DHL Project & Chartering Limited v. Newlead Holding LTD et al

Filing 42

ORDER denying 27 Motion for Reconsideration re 24 Order on Motion to Vacate, Order on Motion to Strike. DHL shall show cause by no later than Friday, September 29, 2017, why DHL's claims against Defendants Newlead Shipping S.A., Newlead Castellano Ltd., Grand Venetico Inc., and Newlead Venetico Ltd. should not be dismissed for lack of jurisdiction. Signed by Chief Judge J. Randal Hall on 9/13/17. (loh)

IN THE UNITED
FOR THE

STATES

DISTRICT

COURT

SOUTHERN DISTRICT OF GEORGIA
SAVANNAH DIVISION
IN ADMIRALTY

DHL

PROJECT

&

CHARTERING

*

LIMITED,

*
*

Plaintiff,

*
*

NEWLEAD HOLDINGS LTD.;

*

NEWLEAD BULKERS

416-123

*

NEWLEAD SHIPPING S.A.;

CV

*

S.A.;

NEWLEAD CASTELLANO LTD.;

*

GRAND VENETICO INC.;

*

and

NEWLEAD VENETICO LTD.,

*
•

Defendants.

*

ORDER

Before

the

Court

Limited's

("DHL")

Attachment

and

27.)

After a

to

is

Plaintiff

Motion

for

DHL

Reconsideration

Reinstate Attachment

in

I.
May

complaint

in

directing

the

25,

2016,

the

present

issuance

of

Chartering
Vacatur

filings

of

(Doc.

and law and

DHL's motion is DENIED.

BACKGROUND1

upon

of

&

Reduced Amount.

careful review of the relevant

the evidence properly before the Court,

On

Project

the

filing

of

DHL's

action,

the

Court

entered

process

for

maritime

verified
an

order

attachment

and

1 The Court has assumed the parties' familiarity with the facts and procedural
history of this case.
previous Orders. (See,

A more thorough summary is available in the Court's
e.g. , Docs. 24 & 38/ Ray Capital Inc., et al. v. M/V

Newlead Castellano, IMO No. 9686338,
(the "Ray Action"), Docs. 94 & 116.)

et al.,

Case No.

4:16-CV-093

(S.D.

Ga.)

garnishment

of the M/V Newlead Castellano,

"Vessel") .
Inc.,

(Docs.

1,

2.)

On

Oppenheim Capital Ltd.,

Shiptrade Limited

DHL's

14,

9686338

2016,

Ray

Cheyenne Holdings Ltd.,

(collectively,

a motion to vacate

October

IMO No.

(the

Capital

and Labroy

the "Interested Parties")

attachment pursuant to Rule

filed

E(4) (f)

of

the Supplemental Rules for Certain Admiralty and Maritime Claims
of the Federal Rules of Civil Procedure,

which the Court granted

on November

18,

In addition to vacating

the

directing

Order

2016.

(Docs.

the

16,

issuance

attachment and garnishment of
to

show cause by no

present
(Doc.

case

24,

motion

at

for

15.)

Vessel,

mention.

there

December

Court's

have

5,

5,

2016,

2016

martitime

lack of
DHL

as

to why the

jurisdiction.

filed

entered

DHL's

its

present

attachment

several

developments

1,

DHL

Industry
into

a

Fuel

2016,

Group

"confidential

Co.,

worthy

and

Ltd.

of
of

non-party

(the

settlement

"Sub-

agreement"

DHL is obligated to the Sub-Charterer in

2017,

wherein

of

been

the amount of $250,000.00.2
on February 22,

vacatur

December

on

inter alia,

Judgment,"

December

of

the Court ordered DHL

be dismissed for

the

Materials

Charterer")

whereby,

to

First,

Zheijiang

process

reconsideration.

Subsequent
the

On

of

the Vessel,

later than

should not

24.)

it

(Doc. 27-1, M

14(c), 24.)

Second,

DHL filed a "Motion for Entry

of Final

states

2 DHL has not provided a copy of its
Charterer for this Court's review.

that

it

settlement

has

entered

into

a

agreement with the Sub-

settlement

agreement

Agreement")

regards

whereby,

with

to

the

dated

February

Defendant

claims

inter alia,

Newlead

made

NCL

is

17,

2017

(the

Castellano

by

DHL

in

obligated to

"Settlement

Ltd.

the

("NCL")

instant

DHL in

the

with

action,

amount

of

$2,371,491.15 and has

consented to the personal

jurisdiction of

this

33;

Agreement,

Court.3

(Doc.

Capital Inc.,
et al.,

et al.

Case No.

118-1 at

4-14,

at

S[

1-2,

summary

v.

see

2.)

& 2(C);

Third,

judgment

in

on

favor

Action and ordered NCL

Settlement

M/V Newlead Castellano,

4:16-CV-093

SISI 2

also

(S.D.

March

9686338,

(the "Ray Action"),

Power Decl.,

of the

to

Ga.)

IMO No.

Ray

20,

Ray Action,

2017,

Interested

the

Doc.

Court

Parties

show cause as to why its

Doc.
118-1

granted

in the

Ray

counterclaim

for wrongful arrest against the Interested Parties should not be

dismissed.

(Ray Action,

DHL filed a

includes

On March 30,

2017,

renewed motion to intervene in the Ray Action,

which

a

response

Doc.

to

116.)

the

Fourth,

Court's

order

originally directed at NCL as well as a
reconsider

its

grant

of

summary

judgment

(Ray Action,

Doc.

118.)

6,

States

of

Appeals

Circuit

the

United

issued

its mandate

Court

show

cause

request that the Court

Interested Parties.

2017,

to

vacating this

in

favor

Finally,

for

Court's

the

of

the

on July

Eleventh

Order denying

3 Further, as part of the Settlement Agreement, NCL has allegedly assigned its
ownership interest in the Vessel's substitute res to DHL (up to the amount of
$2,371,491.15 plus any costs and fees incurred by DHL in the present action
and the Ray Action), as well as all of NCL's rights, defenses, and
counterclaims with respect to the claims asserted by the Interested Parties
in the Ray Action.

(See Settlement Agreement, 1 2(B).)

DHL's intervention in the Ray Action and "remand[ed]

[this Court]
status
Doc.

of

to proceed as

the

case."

it

sees

(Ray Action,

fit

in light

Doc.

126,

at

the case to

of the
3;

current

Ray Action,

127.)

II.

A party may

seek to

DISCUSSION

alter

or

amend

a

judgment

in

a

civil

case within twenty-eight days after the entry of the judgment.4
Fed.

R.

Civ.

P.

59(e).

Because

reconsideration

of

a

judgment

after its entry is an extraordinary remedy which should be used
sparingly,

a

convincing

nature

decision.

Bostic

at *1
used

(S.D.
"to

evidence

movant

Ga.

must

to
v.

that

could

forth

induce
Astrue,

July 31,

relitigate

set

the

old
have

court

No.

2012).

or

to

law

A Rule 59(e)
raise

raised

of

a

reverse

l:12-CV-082,

matters,
been

facts

2012

strongly

its
WL

prior

3113942,

motion may not be

argument

prior

to

or

the

present
entry

of

judgment,'' as "the only grounds for granting a Rule 59(e) motion
are

newly-discovered

fact."

Arthur

v.

evidence

King,

500

or
F.3d

manifest
1335,

errors

1343

of

(11th

law

Cir.

or

2007)

4 A Court may also grant relief from a judgment or order pursuant to Rule
60(b).
See Fed. R. Civ. P. 60(b).
"The first five provisions of Rule 60(b)
provide relief in specific circumstances, including in the event of mistake,
fraud, or newly discovered evidence."
Aldana v. Del Monte Fresh Produce
N.A., Inc., 741 F.3d 1349, 1355 (11th Cir. 2014).
When these specific
circumstances are lacking, however, "Rule 60(b)(6) provides a catch-all,
authorizing a court to grant relief from a judgment for xany other reason

that justifies relief.'"

Id^_ (quoting Fed. R. Civ. P. 60(b)(6)).

To prevail

under
Rule
60(b)(6),
however,
a
party
"must
demonstrate
that
circumstances are sufficiently extraordinary to warrant relief."
(internal quotations and citations omitted).

the
Id.

(quotations

rehashing

omitted).

arguments

"Rule

already

59(e)

is

rejected

by

refuting the court's prior decision."

at

*1

not

a

the

Bostic,

court

686

(M.D.

Here,

Ga.

DHL

evidence,

Inc.,

for

or

2012 WL

(quoting Wendy's Int'l v. Nu-Cape Const.,

680,

vehicle

for

3113942,

169 F.R.D.

1996)).

has

newly

law

or

any

alter,

attachment

the

of

"new

the

DHL

relief

from

and its

Vessel

developments

of

fact"

bases

Rederi

AS

Fla.

2001)

Rule

B

facts

Supp.

M/Y

known

146

validity

Dream,

determining
issue,

at

the

time

1307

there

(S.D.

June

an

was

26,

the

Ltd.

Ohio

v. Amazonica,

Ala.

of

Pty.

reasonable

res.

Because

DHL

relies

27, at 5-6),

concern

Dannebrog

1307,

1311

(S.D.

writ

of

attachment

under

a

inquiry

must

P.S.

burden

focus

(citing

IntTl,

see

is

on

Ltd.,

also

W.

the
Bulk

762

F.

834554,

at

challenges the

the

for issuing

on

Transamerica

1997 WL

("When a defendant

grounds

of

2d

97-0556-CB-S,

the

all

they are not
See

attachment."

v.

DHL's

Supp.

1991)));

No.

1997)

attachment,

F.

court's

of

vacating

attachment.

whether

"[t]he

(Australia),

1302,

(S.D.

prove

True

(In

Leasing Inc.
*2

the

Order

which

(see Doc.

reinstating

should

Carriers

upon

for

v.

the

or

substitute

post-attachment developments
valid

fact,

discovered

that would justify a finding that the Court should amend,

grant

of

demonstrate

reason

otherwise

errors

to

other

or

manifest

failed

plaintiff

the

writ.

to

In

making its determination on this issue, the Court's inquiry must

focus

on

the

(citations
v.

facts

known

omitted));

but

at

c. f.

Mar Caribe de Navigacion,

Fla.

Nov.

17,

post-arrest

1999)

the

Linea

C.A.,

(courts may

hearing

that

was

time

of

the

Naviera

de

attachment."

Cabotaje,

1999 WL 33218589,

consider

not

evidence

presented at

C.A.

at *4

(M.D.

presented at

time

of

original

arrest to determine whether reasonable grounds existed to arrest
vessel) .

Furthermore,

finding

that

admiralty

DHL

claim

thinly-veiled
vacating

to

against

Court

the

demonstrate

refute

and to

Doc.

has

that

Defendants

to

attachment
(Compare

the

assertion

failed

attempt

its

arguments.

Indeed,

DHL's

21,

is

the

rehash
at

nothing

DHL's

complaint

alleges

a

direct

-

erred

prima
more

in

facie

than

reasoning

for

Doc.

27,

at

5-6.)

thoroughly considered,

as

a

previously-rejected

with

rejected the very argument DHL now raises;
its

valid

Court's

8-10;

already heard,

a

Court

and

while DHL argues that

opposed

to

contingent

-

breach of contract claim against the relevant Defendants,5 the

5 (See Doc.

27,

at 3

("In

[the]

vacatur order,

this Court reasoned that DHL

had not pleaded a valid prima facie admiralty claim against the Defendants,
because DHL's indemnity claims were contingent' upon a finding that DHL was
liable

to

[the

Sub-Charterer]

and

because

DHL

Ahas

not

alleged

that

Defendants have actually breached their agreement with DHL.'
[(Doc. 24, at
11.)]
But this analysis fails to consider the entirety of DHL's complaint:
DHL has alleged a separate breach of contract by the Newlead Defendants
pursuant to its own charter party, based on the Defendants'
failure to
provide a seaworthy vessel.
[ (]See [Doc] 1 at 6-7. [)]"); see also Doc. 27,
at 6 ("Simply, DHL adequately alleged that the Defendants had a duty to

provide a seaworthy vessel,
of

the

breach

vessel
.

.

.

due

.").)

to

these

and that the cracking of the hull and detention
structural

deficiencies

was

clear

evidence

of

paragraphs of its complaint on which it relies6 for such argument
are

the

state

exact

only

a

paragraphs

that

this

contingent

breach

of

Court

contract

attachment under Rule B is not available.7
15.)

In

until

a

sum,

because

plaintiff

has

"a

claim

actually

for
made

explicitly

for

to

which

(See Doc. 24, at 9-

indemnity
a

claim

found

does

payment

to

not
the

accrue
third

6 See Doc. 1, II 21 ("DHL has a contingent indemnity claim . . . for breach of
the

charter party in connection with the deficiencies found with the vessel
[M/V Newlead Venetico] . . . ." (emphasis added))/ id. I 24 ("If there is a

finding in the

sub-charter arbitration

[between DHL and the Sub-Charterer in

Hong Kong] that there was a personal want of due diligence to make the vessel
seaworthy on the part of Owners for which DHL is responsible,
Newlead
Shipping, Newlead Bulkers, and Grand Venetico Inc. will have breached their
obligations to DHL with respect to seaworthiness and maintenance,
which
caused the detention of the vessel [M/V Newlead Venetico] in Australia, the
delays in the delivery of cargo, and the losses claimed by [the SubCharterer]." (emphasis added)); id. I 25 (" . . . Grand Venetico Inc., and/or
Newlead Shipping and Newlead Bulkers have contingent joint and several
liability to DHL."
(emphasis added))/ id. I 26 (" . . . Newlead Shipping,
Newlead Bulker and/or Newlead Holdings have contingent joint and several
liability for the contractual breach as
successors-in-interest to Grand
Venetico Inc." (emphasis added))/ see also id. I 20 ("Upon a finding by the
Hong Kong arbitration panel that there was a personal want of due diligence
on the part of [Defendants] Newlead Shipping and/or Grand Venetico, Inc. to
make the [M/V] Newlead Venetico seaworthy, for which DHL is responsible, DHL
will be liable to [the Sub-Charterer] and will thereafter pursue its. claim
against Newlead Shipping and/or Grand Venetico Inc. in London Arbitration for
indemnity pursuant to the time charter." (emphasis added))/ id. I 71 ("The
underlying dispute arising from the charter party, is based on an indemnity
claim for an arbitration award which may be issued against DHL in Hong Kong

arbitration."

(emphasis

added)).)

Notably,

while DHL baldly states in a

footnote to its complaint that it has "direct contract claims against Newlead

Shipping and/or Grand Venetico as ^owner(s)' pursuant to the charter party,"
DHL never provides any explanation as to the factual or legal basis for these
"direct" claims.

(See id.

I 21 n.3.)

7 DHL also takes issue with the Court's observations that: (a) DHL did not
initiate the London arbitration proceedings against Defendants Grand Veneticp
Inc. and Newlead Shipping S.A. until after having obtained attachment of the
Vessel in the present action/ and (b) the London arbitration proceedings do
not include NCL as a party thereto.
Neither of these observations, however,
is essential to the Court's paramount conclusion that DHL's primary claim for
breach of contract was, at the time of attachment, a prospective contingent

indemnity claim for which attachment under Rule B was not available.
(See
Doc.
24, at 12-13.)
Rather,
these observations were simply additional
examples of the contingent nature of Plaintiff's claims.

party" under English law
Sub-Charterer
against

claims

against

Tradeline
vacatur

at

was

proper.

293

F.

under

English
third

Shipping

law

Co. ,

it

to

the

claim

is

a

relevant

in

because

a

DHL's

DHL's

2008)

had

also

Blue

F.3d

488,

495

that

claim

was

yet

to

incur

v.

Grand

Cir.

2013)

(2d

substantive law defines the
prima

facie

should

By contrast,

procedural

v.

Corp.

Whale

722

SPA

(upholding

indemnity

plaintiff

the

of

Navigazione

see

inquiry

is

(2d

plaintiff's

substantive

admiralty

claim

Cir.

Assessing

law.

contract

vacatur

and

36,

37

payment to the

attachment,

Pi

remedy.

substantive

a

of

sought

unripe

("Admiralty law provides the remedy;
right

breach

Bottiglieri

where

party);

Dev.

were

App'x

attachment

direct
time

See

of

to

a

the

Defendants

LLC,

liability
China

alleged

Defendants

attachment

unripe

nor

and DHL had not made

be

governed

whether

question,

the

validity

a

of

by

a

the

claim sounds

answer

to

which

supplies the source of a court's subject matter jurisdiction.").
DHL therefore has failed to demonstrate any error in the Court's

Order

vacating

attachment

that

would

affect

that

ruling

or

otherwise necessitate its reversal.9

8 The charter party contract which forms the basis of DHL's breach of contract
claim against Defendants is governed by English law.
(See Doc. 1-1, at 8-9
("This Charter Party shall be governed by and construed in accordance with
English Law.").)

9 To the extent that it may hereafter seek to attach the Vessel's substitute
res on the basis of the facts as they presently exist, this remedy is not
available because of DHL's settlement of its breach of contract and alter-ego

claim with NCL; by way of the Settlement Agreement, DHL no longer has an
active case or controversy against the owner of the Vessel's substitute res,
NCL.

See Yunker v.

Allianceone Receivables Mgmt. ,
8

Inc.,

701

F.3d 369,

372

III.

Upon the

foregoing and due

Reconsideration

Attachment

Court

CONCLUSION

of

Vacatur

in Reduced Amount

continues

to

have

consideration,

of

Attachment

(doc.

27)

serious

jurisdiction over the present case.
cause

by

claims

no

later

against

Castellano

than

Friday,

Defendants

Ltd.,

and

Inc.,

29,

Cir.

2012)

("A

case

becomes

moot

when

it

no

the

its

DHL shall show

2017,

why

S.A.,

DHL's

Newlead

and Newlead Venetico

should not be dismissed for lack of jurisdiction

(llth

regarding

Shipping

for

Reinstate

Moreover,

Accordingly,

September

Motion

to

is DENIED.

concerns

Newlead

Grand Venetico

DHL's

Ltd.

10

longer

presents

a

live

controversy with respect to which the court can give meaningful relief.
As a
general principle, settlement between the parties in litigation renders the
case moot." (internal quotations and citations omitted)); U.S. Fire Ins. Co.
v. Caulkins Indiantown Citrus Co.,

931 F.2d 744,

747

(llth Cir.

1991)

("[T]he

controversy must be Alivef throughout the case; federal jurisdiction is not
created by a previously existing dispute." (citations omitted)).
Moreover,
even were DHL to allege that NCL breached the Settlement Agreement, DHL could
not

seek

attachment

under

Rule

B

because

such

a

claim

would

not

sound

in

admiralty.
See D'Amico Dry Ltd. v. Primera Mar. (Hellas) Ltd., 756 F.3d 151,
159 (2d Cir. 2014) ("[A]n agreement to pay to resolve a maritime claim is not
itself a maritime contract and does not

subsequent

suit

claim."); Consol.

on

that

Bathurst,

agreement

confer admiralty jurisdiction over a

to

resolve

the

underlying

maritime

Ltd. v. Rederiaktiebolaget Gustaf Erikson,

645 F.

Supp. 884, 886 (S.D. Fla. 1986) ("An agreement to satisfy an obligation
arising from a maritime tort or contract is not a maritime contract, and an
action for breach of such a contract is not an admiralty claim.").

10 DHL initiated this action on May 25, 2016.
(See Doc. 1.)
To date,
however, Plaintiff has only purported to serve Defendants Newlead Holdings
Ltd., Newlead Bulkers S.A., and NCL.
(See Docs. 26, 28, and 29.)
While the

90-day deadline for service imposed by Federal Rule of Civil Procedure 4(m)
does not apply to service on foreign defendants, a plaintiff is still bound
to "deploy reasonable due diligence in attempting service of process on a

foreign defendant."

See Brown v. True & Assocs., Ltd., Case No. 4:12-CV-233,

2012 WL 5364346, at *1 n.l (S.D. Ga. Oct. 22, 2012) (citing Lozano v. Bosdet,
693 F.3d, 485 (5th Cir. 2012)).
Moreover, because DHL asserts that it has
settled it claims against NCL, its standing to maintain an action against NCL

appears lacking.
at

747.

See Yunker, 701 F.3d at 372; U.S. Fire Ins. Co., 931 F.2d

ORDER ENTERED at Augusta, Georgia, this
September,

/^^~ day of

2017.

:f

JUDGE

IITED STATES DISTRICT COURT
DISTRICT

10

OF GEORGIA