Marisco, Ltd. v. Sailele, The Tug Boat et al

Filing 158

ORDER GRANTING IN PART AND DENYING IN PART GARNISHEE BANK OF HAWAII'S MOTION FOR INTERPLEADER re: 142 . Signed by JUDGE LESLIE E. KOBAYASHI on 10/5/2012. Excerpt of Conclusion: ~ "The Motion is gr anted as to [Bank of Hawaii's ("BOH")] request to interplead the amount of $824,071.15 to the district court in a non-interest bearing account. The Court ORDERS BOH to deposit the interpleader funds with the district court by O ctober 22, 2012. If BOH files a written request to deposit the interpleader funds in an interest bearing account, BOH must do so before depositing the funds with the district court. The Motion is DENIED WITHOUT PREJUDICE as to BOH's request for an injunction against further proceedings regarding the interpleader funds. Further, Marisco's request to increase the amount of the interpleader to include interest and attorneys' fees and costs is HEREBY DENIED." (afc)CERTIFICATE OF SERVICEParticipants registered to receive electronic notifications received this document electronically at the e-mail address listed on the Notice of Electronic Filing (NEF). Participants not registered to receive electronic notifications will be served by first class mail on Tuesday, October 9, 2012.

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF HAWAII
CIVIL NO. 10-00137 LEK-BMK

MARISCO, LTD., a Hawaii
corporation,

)
)
)
)
Plaintiff,
)
vs.
)
)
AMERICAN SAMOA GOVERNMENT,
)
)
)
Defendant and
)
Third-Party
)
Plaintiff,
)
)
vs.
)
)
TERRY R. CONDEN,
)
)
Third-Party
)
Defendant.
_____________________________ )

ORDER GRANTING IN PART AND DENYING IN PART
GARNISHEE BANK OF HAWAII’S MOTION FOR INTERPLEADER
Before the Court is Garnishee Bank of Hawaii’s (“BOH”)
Motion for Interpleader (“Motion”), filed on September 17, 2012.
[Dkt. no. 142.]

On September 24, 2012, Plaintiff/Counterclaim

Defendant Marisco, Limited (“Marisco”) filed its statement of
position, and Defendant/Counter Claimant/Third Party Plaintiff
American Samoa Government (“ASG”) filed its memorandum in
opposition.

[Dkt. no. 154, 155.]

hearing on September 27, 2012.

This matter came on for

Appearing on behalf of BOH was

Robert Marks, Esq., appearing on behalf of Marisco was
Mark Desmarais, Esq., and appearing on behalf of ASG was
Mark Hamilton, Esq.

After careful consideration of the Motion,

supporting and opposing memoranda, and the arguments of counsel,
BOH’s Motion is HEREBY GRANTED for the reasons set forth below.
BACKGROUND
The relevant background is set forth in this Court’s
Order Granting Marisco Ltd.’s Ex Parte Request for Order
Directing Disbursement of Funds from Garnishee Bank of Hawai`i
and Granting in Part and Denying in Part Bank of Hawaii’s Motion
for Instructions, filed August 23, 2012 (“Disbursement Order”),
2012 WL 3686088, which this Court incorporates by reference.
I.

Motion
Since the filing of the Disbursement Order, ASG filed a

Notice of Appeal from the Disbursement Order.

[Dkt. no. 140.]

On September 13, 2012, the High Court of American Samoa (“High
Court”) issued an order (“Reconsideration Order”) denying BOH’s
motion for reconsideration of the Order Granting Motion for
Preliminary Injunctive Relief in American Samoa Government v.
Bank of Hawaii, et al., Trial Division, CA No. 29-12 (“ASG v.
BOH”), which the High Court originally filed on July 11, 2012
(“Injunction Order”), and denying BOH’s motion to stay the
enforcement of the Injunction Order.

[Motion, Exh. 2 (Injunction

Order), Exh. 3 (Reconsideration Order).]

BOH states that, in its

reply memorandum in support of its motion to stay, it argued that
the High Court should defer to this Court, particularly its

2

Disbursement Order.

The Reconsideration Order, however, does not

mention the Disbursement Order.

[Mem. in Supp. of Motion at 6.]

BOH states that ASG is aggressively trying to enforce
the Injunction Order.

ASG filed a motion in ASG v. BOH to

enforce the Injunction Order.

The High Court heard that motion

at the same time as BOH’s motion for reconsideration and BOH’s
motion to stay, but the High Court did not issue an order as to
ASG’s motion to enforce.

ASG v. BOH will soon be set for trial

on the issue of whether ASG is entitled to permanent injunctive
relief.

Both ASG and Marisco have demanded that BOH comply with

the respective orders in their favor.1

[Id. at 6-8; Motion, Exh.

6 (letter dated 9/14/12 to BOH’s counsel in American Samoa from
the Deputy Attorney General of American Samoa), Exh. 7 (email
dated 9/14/12 to ASG’s counsel from Marisco’s counsel).]
In the instant Motion, BOH argues that it is a neutral
stakeholder in this dispute and, through no fault of its own, it
is subject to conflicting orders - this Court’s Disbursement
Order and the High Court’s Injunction Order.

1

It is impossible

Since the filing of the instant Motion, ASG filed the
following motions in ASG v. BOH: Expedited Motion to Enforce
Preliminary Injunction and for Sanctions Against Bank of Hawaii,
filed on September 18, 2012; and Ex Parte Motion for Expedited
Hearing on Motion to Enforce Preliminary Injunction and for
Sanctions Against Bank of Hawaii, filed on September 19, 2012.
The High Court denied the request for an expedited hearing and
set the motion to enforce and for sanctions for hearing on
October 31, 2012. [BOH’s Notice of Filing of Pleadings in
Related Case in the High Court of Am. Samoa, filed 9/21/12 (dkt.
no. 150), Exhs. A-C.]
3

for BOH to comply with both orders, and BOH seeks the following
relief:
1) interplead the funds in question,[2] pursuant
to such terms as this Court deems appropriate;
2) to restrain Marisco and ASG from instituting or
prosecuting any proceedings in any court other
than this one with respect to the disputed funds,
and 3) for such further relief as this Court deems
appropriate.
[Mem. in Supp. of Motion at 3 (footnote omitted).]

BOH argues

that interpleader is appropriate because it is faced with double
liability.

It emphasizes that the interpleader rule and statutes

are remedial in nature and are to be interpreted liberally.

[Id.

at 8-9.]
BOH argues that this Court should also enjoin
overlapping lawsuits.

Specifically, BOH wants to prevent

Marisco, ASG, and ASG’s Attorney General, Fepulea`i Arthur
Ripley, Jr., who is a member of the bar of this district court,
from pursuing further proceedings in another action to seek
relief inconsistent with this Court’s ruling.

BOH contends that

the Court has the authority to do so pursuant to the All Writs
Act, 28 U.S.C. § 1651, 28 U.S.C. § 2361, and the Court’s inherent
powers.

[Id. at 10-11; Motion at 3.]

BOH argues that, in spite

of ASG’s appeal of the Disbursement Order, this Court has

2

BOH states that it currently has $824,071.15 from ASG’s
General Fund Account frozen. [Mem. in Supp. of Motion at 4 n.5.]
4

continuing jurisdiction to rule on the instant Motion.

[Mem. in

Supp. of Motion at 2 n.1.]
II.

Marisco’s Position
In its position statement, Marisco first argues that

BOH should follow the Disbursement Order.

Marisco, however,

states that, in the alternative, it will reluctantly agree to the
interpleader.

Marisco asks this Court to order that the

interpleader amount include all past and accrued interest,
anticipated future interest, and at least $25,000.00 to be used
for post-judgment attorneys’ fees and costs, which this district
court will determine at a future time.

Marisco states that it

will stipulate that it will not bring an action in another court
regarding the interpleader funds.

[Marisco’s Statement at 2-3.]

Marisco argues that this Court has continuing
jurisdiction to maintain the status quo between the parties
pending the appeal of the Disbursement Order to protect the
integrity of its judgments in general, specifically to protect
its final judgment.

Marisco emphasizes that BOH is not seeking

to alter the status quo.

[Id. at 3-4.]

III. ASG’s Opposition
In its memorandum in opposition, ASG first argues that
this Court no longer has jurisdiction over the subject of the
Disbursement Order because of the appeal.

ASG argues that the

Court only has jurisdiction over matters not involved in the
5

appeal.

ASG emphasizes that the appeal of the Disbursement Order

contests whether this Court has jurisdiction over ASG’s General
Funds Account in the first instance, and ASG argues that this
Court does not have continuing jurisdiction to hear issues
premised on the same legal grounds as those on appeal.

[Mem. in

Opp. at 6-8.]
ASG argues that interpleader is not appropriate in this
case because BOH is not acting like a neutral stakeholder.
actually advocating Marisco’s position.

It is

ASG emphasizes that

Marisco has not sought to enforce the judgment in this case in
the American Samoa courts, where the funds are domiciled.
therefore argues that Marisco is forum shopping.

ASG

[Id. at 8-9.]

ASG also argues that interpleader is not appropriate because
interpleader is not for the purpose of resolving conflicts
between courts.

ASG therefore argues that the Motion does not

meet the requirements of Fed. R. Civ. P. 22 and the governing
statute.

[Id. at 10-11.]

ASG emphasizes that interpleader is

not appropriate for those who have acted in bad faith to create
the controversy.

ASG argues that BOH has done so because it

acted upon the Writ of Execution instead of seeking to quash it
or filing an interpleader action in the High Court.

[Id. at 13-

14.]
ASG contends that BOH has cited no case law that would
support a restraining order under the circumstances of this case.

6

ASG argues that a § 2361 injunction is an exception to the
general rule barring federal injunctions of state court
proceedings.

ASG argues that a federal court should defer to

proceedings that pre-date the interpleader.

[Id. at 12.]

Finally, ASG emphasizes that BOH is still subject to
claims in ASG v. BOH because BOH violated A.S.C.A. §§ 10.0601 and
43.1803(b).

ASG also argues that “BOH has ignored a valid High

Court order for over two months, an order that was issued a month
before the Court issued its [Disbursement] Order.

BOH created

the controversy and the Court should not order an interpleader to
relieve BOH of the situation it created.”

[Id. at 14.]

ASG therefore urges the Court to deny the Motion.
DISCUSSION
I.

Jurisdiction
At the outset, this Court must address ASG’s argument

that its appeal of the Disbursement Order divested this Court of
jurisdiction to hear matters such as the instant Motion.

BOH

contends that this Court has continuing jurisdiction to consider
the instant Motion because, inter alia, this Court has
the discretionary authority . . . to “suspend,
modify, restore or grant an injunction during the
pendency of the appeal. [FRCP 62(c)] codifies the
inherent power of a court to preserve the status
quo where, in its sound discretion, the court
deems the circumstances so justify, and
specifically authorizes the district court to
modify, if necessary, the terms of the injunction
being appealed from.”
7

[Mem. in Supp. of Motion at 2 n.1 (some alterations in Mem. in
Supp.) (quoting Christian Science Reading Room Jointly Maintained
v. City & County of San Francisco, 784 F.2d 1010, 1017 (9th Cir.
1986)).]
The pertinent part of Rule 62(c) states: “While an
appeal is pending from an interlocutory order or final judgment
that grants, dissolves, or denies an injunction, the court may
suspend, modify, restore, or grant an injunction on terms for
bond or other terms that secure the opposing party’s rights.”
While Rule 62(c) is not directly on point because the
Disbursement Order neither granted nor denied an injunction, Rule
62(c) is instructive because it embodies well-established legal
principles that courts also apply outside of the context of
orders and judgments regarding injunctive relief.

For example,

the Ninth Circuit has stated:
The rule divesting lower courts of
jurisdiction of aspects of a case involved in an
appeal “‘is judge-made doctrine designed to avoid
the confusion and waste of time that might flow
from putting the same issues before two courts at
the same time.’” United States v. Thorp (In re
Thorp), 655 F.2d 997, 998 (9th Cir. 1981) (quoting
9 Moore, Federal Practice P 203.11 n.1); accord
Marino [v. Classic Auto Refinishing, Inc. (In re
Marino)], 234 B.R. [767,] 769 [(9th Cir. BAP
1999)]. This rule is not absolute. For example,
a district court has jurisdiction to take actions
that preserve the status quo during the pendency
of an appeal, see Securities and Exch. Comm’n v.
American Capital Invs., Inc., 98 F.3d 1133, 1146
(9th Cir. 1996); see also Mirzai [Hill & Sandford,
LLP v. Mirzai (In re Mirzai)], 236 B.R. [8,] 10
[(9th Cir. BAP 1999)], but “‘may not finally
8

adjudicate substantial rights directly involved in
the appeal.’” McClatchy Newspapers v. Central
Valley Typographical Union No. 46, Int’l
Typographical Union, 686 F.2d 731, 734-35 (9th
Cir. 1982) (quoting Newton v. Consolidated Gas
Co., 258 U.S. 165, 177, 42 S. Ct. 264, 66 L. Ed.
538 (1922)); see also Pyrodyne Corp. v.
Pyrotronics Corp., 847 F.2d 1398, 1403 (9th Cir.
1988). Absent a stay or supersedeas, the trial
court also retains jurisdiction to implement or
enforce the judgment or order but may not alter or
expand upon the judgment. See Bennett v. Gemmill
(In re Combined Metals Reduction Co.), 557 F.2d
179, 190 (9th Cir. 1977); Hagel v. Drummond (In re
Hagel), 184 B.R. 793, 798 (1995); Marino, 234 B.R.
at 770.
In re Padilla, 222 F.3d 1184, 1190 (9th Cir. 2000), partially
superseded by statute on other grounds, Bankruptcy Abuse
Prevention and Consumer Protection Act of 2005, Pub. L. 109–8,
119 Stat. 23;3 see also Golden Gate Rest. Ass’n v. City & Cnty.
of San Francisco, No. C 06-06997 JSW, 2007 WL 4591729, at *1
(N.D. Cal. Dec. 28, 2007) (“The trial court retains the inherent
power ‘during the pendency of an appeal to act to preserve the
status quo and to ensure the effectiveness of the eventual

3

In Padilla, the bankruptcy court dismissed Padilla’s
bankruptcy petition for bad faith, but the Bankruptcy Appellate
Panel (“BAP”) reversed the order and remanded the case for
reinstatement of the petition. The trustee appealed the BAP’s
decision to Ninth Circuit. During the pendency of the appeal,
the bankruptcy court discharged Padilla’s debts and closed the
case. 222 F.3d at 1188. The Ninth Circuit held, inter alia,
that the bankruptcy court lacked jurisdiction to do so because
the bankruptcy court’s actions “drastically changed the status
quo and amounted to a final adjudication of the substantial
rights directly involved in the appeal. It also did not
constitute implementation or enforcement of the BAP’s judgment
reversing and remanding for reinstatement of Padilla’s petition.”
Id. at 1190.
9

judgment.’” (some citations omitted) (quoting Tribal Village of
Akutan v. Hodel, 859 F.2d 662, 663 (9th Cir. 1988))).4

The Court

therefore finds case law regarding Rule 62(c) to be instructive
on the issue of whether the Court has jurisdiction to grant BOH’s
Motion.

This district court has recognized:
The Ninth Circuit has explained that Rule
62(c) “grants the district court no broader power
than it has always inherently possessed to
preserve the status quo during the pendency of an
appeal; it ‘does not restore jurisdiction to the
district court to adjudicate anew the merits of
the case.’” Natural Resources Defense Council[,
Inc. v. Sw. Marine Inc.], 242 F.3d [1163,] 1166
[(9th Cir. 2001)] (quoting McClatchy Newspapers,
686 F.2d at 734). “[A]ny action taken pursuant to
Rule 62(c) ‘may not materially alter the status of
the case on appeal.’” Id. (quoting Allan Ides,
The Authority of a Federal District Court to
Proceed After a Notice of Appeal Has Been Filed,
143 F.R.D. 307, 322 (1992)). Under Rule 6[2](c),
this court “only ‘retains jurisdiction during the
pendency of an appeal to act to preserve the
status quo.’” Small v. Operative Plasterers’ and
Cement Masons’ Int’l. Assoc. Local 200, 611 F.3d
483, 495 (9th Cir. 2010) (quoting Natural
Resources Defense Council, 242 F.3d at 1166).

4

In Golden Gate, the district court granted summary
judgment in favor of the plaintiff and denied summary judgment to
the defendant and the intervenors on the issue whether the
expenditure requirements of a city ordinance was preempted by the
Employee Income Security Act of 1974. The defendant and the
intervenors filed notices of appeal and, on the same day, the
defendant filed a motion for a stay of the district court’s
ruling pending the appeal. The issue before the district court
was whether it had jurisdiction to grant the defendant’s motion.
2007 WL 4591729, at *1-2. The district court denied the
application for a stay because granting the stay “would reverse
the status quo and enable what the Court considers to be a
preempted local ordinance to take effect.” Id. at *2 (citation
omitted).
10

Marcus I. ex rel. Karen I. v. Dep’t of Educ., Civil No. 10–00381
SOM/BMK, 2012 WL 3686188, at *3 (D. Hawai`i Aug. 24, 2012) (some
alterations in Marcus I.).
In the instant case, allowing BOH to interplead the
funds garnished from ASG’s account would not materially alter the
status of the case during ASG’s appeal of the Disbursement Order.
In the Disbursement Order, this Court ruled that Marisco properly
served BOH, and this Court directed BOH to disburse the garnished
funds to Marisco.

Granting the interpleader would preserve the

status quo because it would prevent either Marisco or ASG from
utilizing the funds to the other party’s detriment during the
pendency of the appeal of the Disbursement Order.

Contrary to

ASG’s argument, granting the Motion would not allow immediate
disbursement of the funds to Marisco.

This Court therefore

CONCLUDES that it has jurisdiction to consider the instant
Motion.
II.

The Court now turns to the merits of BOH’s Motion.

Interpleader
Federal Rule of Civil Procedure 22(a) states:
(1) By a Plaintiff. Persons with claims
expose a plaintiff to double or multiple
may be joined as defendants and required
interplead. Joinder for interpleader is
even though:

that may
liability
to
proper

(A) the claims of the several claimants, or
the titles on which their claims depend, lack
a common origin or are adverse and
independent rather than identical; or

11

(B) the plaintiff denies liability in whole
or in part to any or all of the claimants.
(2) By a Defendant. A defendant exposed to
similar liability may seek interpleader through a
crossclaim or counterclaim.
In addition, 28 U.S.C. § 1335 sets forth the
requirements for an interpleader action.

Section 1335 states:

(a) The district courts shall have original
jurisdiction of any civil action of interpleader
or in the nature of interpleader filed by any
person, firm, or corporation, association, or
society having in his or its custody or possession
money or property of the value of $500 or more, or
having issued a note, bond, certificate, policy of
insurance, or other instrument of value or amount
of $500 or more, or providing for the delivery or
payment or the loan of money or property of such
amount or value, or being under any obligation
written or unwritten to the amount of $500 or
more, if
(1) Two or more adverse claimants, of diverse
citizenship as defined in subsection (a) or
(d) of section 1332 of this title, are
claiming or may claim to be entitled to such
money or property, or to any one or more of
the benefits arising by virtue of any note,
bond, certificate, policy or other
instrument, or arising by virtue of any such
obligation; and if (2) the plaintiff has
deposited such money or property or has paid
the amount of or the loan or other value of
such instrument or the amount due under such
obligation into the registry of the court,
there to abide the judgment of the court, or
has given bond payable to the clerk of the
court in such amount and with such surety as
the court or judge may deem proper,
conditioned upon the compliance by the
plaintiff with the future order or judgment
of the court with respect to the subject
matter of the controversy.

12

(b) Such an action may be entertained although the
titles or claims of the conflicting claimants do
not have a common origin, or are not identical,
but are adverse to and independent of one another.
The Ninth Circuit has stated that:
Both Rule 22 and the interpleader statute
allow a party to file a claim for interpleader if
there is a possibility of exposure to double or
multiple liability. 28 U.S.C. § 1335; Fed. R.
Civ. P. 22(a)(2). “The purpose of interpleader is
for the stakeholder to ‘protect itself against the
problems posed by multiple claimants to a single
fund.’” Mack v. Kuckenmeister, 619 F.3d 1010,
1024 (9th Cir. 2010) (quoting Minn. Mut. Life Ins.
Co. v. Ensley, 174 F.3d 977, 980 (9th Cir. 1999));
see also Michelman v. Lincoln Nat’l Life Ins. Co.,
685 F.3d 887, 894 (9th Cir. 2012). “This includes
protecting against the possibility of
court-imposed liability to a second claimant where
the stakeholder has already voluntarily paid a
first claimant. But it also includes limiting
litigation expenses, which is not dependent on the
merits of adverse claims, only their existence.”
Mack, 619 F.3d at 1024 (citation omitted).
Lee v. W. Coast Life Ins. Co., 688 F.3d 1004, 1009 (9th Cir.
2012).
First, the Court notes that § 1335 is not applicable
because BOH has not filed a civil interpleader action.

The Court

construes the Motion as brought pursuant to Rule 22, which shares
the requirement with § 1335 that the party seeking interpleader
be exposed to double or multiple liability.

The Court finds that

the instant case satisfies the requirements of Rule 22.

It is

undisputed that Marisco and ASG both claim entitlement to the
funds described in the Motion.

The Court also finds that BOH

does not have an interest in the outcome of the issue of who is
13

entitled to the funds.

ASG argues that interpleader is not

appropriate because BOH’s Motion does not seek to resolve the
conflict between ASG’s claim and Marisco’s claim to the funds.
[Mem. in Opp. at 11.]

As noted in the discussion of this Court’s

jurisdiction, however, the purpose of the instant Motion is to
preserve the funds while the appellate court, or courts,
determine the issue of who is entitled to the funds.
ASG also argues that the Motion does not meet the
requirements of Rule 22 because “[n]othing in the . . . case law
authorizes an interpleader based on conflicting court orders.”
[Id.]

ASG, however, does not cite any authority for its

proposition that a conflict between orders of two different
courts renders a disputed fund ineligible for interpleader.
Further, BOH responded by citing Merril Lynch, Pierce, Fenner &
Smith, Inc. v. Cavicchia, 311 F. Supp. 149, 152-53 (S.D.N.Y.
1970), in which the plaintiff-stakeholders were subject to
conflicting orders from the New York courts and the New Jersey
courts.

[BOH’s Submission of Uncited Authority Regarding Its

Motion, filed 9/26/12 (dkt. no. 156).]
present contrary authority.

ASG did not seek leave to

The Court therefore rejects ASG’s

argument that the dispute between the Disbursement Order and the
High Court’s orders renders the disputed funds ineligible for
interpleader.

14

ASG primarily urges the Court to deny the Motion on
equitable grounds.
“It is generally recognized that interpleader
‘developed in equity and is governed by equitable
principles.’” Aetna Life Ins. Co. v. Bayona, 223
F.3d 1030, 1033–34 (9th Cir. 2000) (quoting Lummis
v. White, 629 F.2d 397, 399 (5th Cir. 1980), rev’d
on other grounds by Cory v. White, 457 U.S. 85,
102 S. Ct. 2325, 72 L. Ed. 2d 694 (1982); Metro.
Life Ins. Co. v. Marsh, 119 F.3d 415, 418 (6th
Cir. 1997) (“[I]nterpleader is fundamentally
equitable in nature.”)). Accordingly, many courts
have held that those who have acted in bad faith
to create a controversy over the stake may not
claim the protection of interpleader. See, e.g.,
Kent v. N. Cal. Reg’l Office of Am. Friends Serv.
Comm., 497 F.2d 1325, 1328 (9th Cir. 1974)
(“Interpleader, which is an equitable remedy, is
not available to one who has voluntarily accepted
funds knowing they are subject to competing
claims.”) (citations omitted); Farmers Irrigating
Ditch & Reservoir Co. v. Kane, 845 F.2d 229, 232
(10th Cir. 1988) (“It is the general rule that a
party seeking interpleader must be free from blame
in causing the controversy, and where he stands as
a wrongdoer with respect to the subject matter of
the suit or any of the claimants, he cannot have
relief by interpleader.”) (collecting cases); see
also 44B Am. Jur. 2d Interpleader § 7 (“The
equitable doctrine of ‘clean hands’ applies to
interpleader actions. The party seeking
interpleader must do equity, not have caused the
conflicting claims, and be free from blame in
causing the controversy.”) (footnotes omitted).
Lee, 688 F.3d at 1012 (footnote omitted).

ASG argues that BOH

has unclean hands and is forum shopping because BOH is actually
advocating Marisco’s position, and neither Marisco nor BOH has
sought to resolve this dispute in the American Samoa courts.

ASG

asserts that, because the funds at issue are domiciled in
American Samoa, either Marisco should have sought to enforce the
15

judgment in the instant case through the American Samoa courts or
BOH should have filed its interpleader in the American Samoa
courts.

ASG also argues that BOH should have sought to quash the

Writ of Execution, filed June 13, 2012, [dkt. no. 115 at 7-9,5]
instead of acting upon the writ.

Further, ASG argues that this

Court should defer to the High Court’s Injunction Order, which
the High Court issued before BOH filed the instant Motion.

ASG’s

arguments are misplaced.
First, as noted in the Disbursement Order, ASG
explicitly agreed both to arbitrate the underlying dispute with
Marisco and to submit itself to the jurisdiction of this district
court to confirm and enforce the arbitration award.
3686088, at *4.

2012 WL

In addition, ASG did not appeal the judgment

entered after this Court confirmed the award.

Id. at *2.

Thus,

this Court had jurisdiction over the instant case before the
commencement of ASG v. BOH.
Second, BOH did not create the controversy at issue in
the instant Motion by aligning itself with Marisco.

BOH complied

with the Writ of Execution, which the Disbursement Order ruled
Marisco effectively served on BOH.

BOH seeks to interplead the

funds at issue; it does not seek to disburse the funds to

5

The Writ of Execution is only one of several parts of
docket number 115, and docket number 115 as a whole is not
consecutively paginated. Thus, the Court’s page citations to the
Writ of Execution are to the pages of docket number 115 as
reflected in the district court’s cm/ecf system.
16

Marisco.

In fact, ASG argues that BOH could have moved to quash

the Writ of Execution, [Mem. in Opp. at 14,] but in doing so, BOH
would have aligned itself with ASG.

Interpleader will preserve

the funds during the appellate courts’ resolution of the
controversy regarding the service of the Writ of Execution.
Morever, even if the Ninth Circuit reverses the Disbursement
Order on appeal, that would merely require Marisco to seek other
means of enforcing the judgment.

The arbitration award in favor

of Marisco and this Court’s confirmation of the award are not at
issue in the appeal.

The reversal of the Disbursement Order

therefore would not extinguish the judgment against ASG.
Third, ASG argues that BOH is forum shopping because
BOH could have filed an interpleader action in the American Samoa
courts.

It was reasonable for BOH to file the Motion in the

instant case because this district court issued the Writ of
Execution, Marisco served the writ on BOH in this district, and
both of the parties that claim entitlement to the disputed funds
are parties in the instant case.

ASG emphasizes that it has

pending claims against BOH in ASG v. BOH.

[Id.]

Filing its

interpleader in ASG v. BOH would not have been as effective as
filing the Motion in the instant case because Marisco is not a
party to that case, and the protection that BOH hopes to obtain
by interpleading the disputed funds would not extend to ASG’s

17

claims against BOH, which are unrelated to the issue of who is
entitled to the disputed funds.

The Ninth Circuit has stated:

interpleader protection generally does not extend
to counterclaims that are not claims to the
interpleaded funds. “Certainly when the
stakeholder is an interested party and when one of
the claimants asserts that the stakeholder is
independently liable to him, the interposition of
a counterclaim is appropriate. Indeed, in most
instances of this type, the counterclaim will be
compulsory and the court will exercise
supplemental jurisdiction over it . . .” Wright,
Miller & Kane, Federal Practice & Procedure: Civil
2d § 1715 (1986) (footnote omitted); see also 44B
Am. Jur. 2d Interpleader § 4 (“Interpleader is a
procedural device not intended to alter
substantive rights. It is not [the] function of
an interpleader rule to bestow upon the
stakeholder immunity from liability for damages
that are unrelated to the act of interpleading,
such as negligence in preserving the fund.”)
(footnotes omitted).
Lee, 688 F.3d at 1009-10 (alterations in Lee).
This Court therefore finds that, under the
circumstances of this case, BOH is free from blame in causing the
controversy over the entitlement to the disputed funds.

The

Court also finds that there is no evidence that BOH has engaged
in forum shopping.

The Court therefore cannot conclude that BOH

has unclean hands.

ASG has not established that this Court must

deny BOH’s Motion on equitable grounds.
The Court GRANTS the Motion as to BOH’s request to
interplead the amount of $824,071.15, currently being held by BOH
from ASG’s account pursuant to the Writ of Execution.

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III. Injunction
BOH also asks that Marisco, ASG, and
all attorneys for ASG, including counsel of record
in this action as well as the Honorable Fepulea`i
Arthur Ripley, Jr., Attorney General of American
Samoa, a member of the bar of this Court, and
those acting under color of his authority,
including his regular and special deputies, be
enjoined from further proceedings with respect to
the disputed funds in the High Court.
[Motion at 3.]

BOH asserts that this Court may enter such an

injunction pursuant to 28 U.S.C. § 2361, 28 U.S.C. § 1651, and
the Court’s inherent powers.

[Id.]

Section 2361 states:

In any civil action of interpleader or in the
nature of interpleader under section 1335 of this
title, a district court may issue its process for
all claimants and enter its order restraining them
from instituting or prosecuting any proceeding in
any State or United States court affecting the
property, instrument or obligation involved in the
interpleader action until further order of the
court. Such process and order shall be returnable
at such time as the court or judge thereof
directs, and shall be addressed to and served by
the United States marshals for the respective
districts where the claimants reside or may be
found.
Such district court shall hear and determine the
case, and may discharge the plaintiff from further
liability, make the injunction permanent, and make
all appropriate orders to enforce its judgment.
As previously noted, however, the instant Motion seeks
interpleader pursuant to Rule 22, not § 1335.
not apply.

Thus, § 2361 does

See, e.g., Metro. Life Ins. Co. v. Probst, No.

CV–09–8180–PCT–DGC, 2009 WL 3740775, at *1 (D. Ariz. Nov. 6,
2009) (“Because Plaintiff has brought a Rule 22 interpleader
19

action, the Court must determine the propriety of a restraining
order by looking ‘to the standards of 28 U.S.C. § 2283, and
[Federal Rule of Civil Procedure] 65, and not to those of
statutory interpleader, 28 U.S.C. § 2361.’” (quoting Life
Insurance Co. of N. Am. v. Thorngren, No. CV–04–464–S–BLW, 2005
WL 2387596, at *4 (D. Idaho Sept. 27, 2005))).
Section 2283 states: “A court of the United States may
not grant an injunction to stay proceedings in a State court
except as expressly authorized by Act of Congress, or where
necessary in aid of its jurisdiction, or to protect or effectuate
its judgments.”

The requested injunction would aid in

effectuating the judgment in the instant case, as well as in
effectuating the Disbursement Order.

BOH, however, cannot

establish the requirements for an injunction pursuant to Rule 65.
In general, to obtain a Rule 65 injunction, the moving
party must establish: a likelihood of success on the merits; a
likelihood of irreparable harm in the absence of the injunction;
that the balance of equities tip in its favor; and that the
injunction serves the public interest.

Am. Trucking Ass’ns v.

City of Los Angeles, 559 F.3d 1046, 1052 (9th Cir. 2009) (quoting
Winter v. Natural Res. Def. Council, Inc., --- U.S. ----, 129 S.
Ct. 365, 374, 172 L. Ed. 2d 249 (2008)).

In particular, BOH

cannot establish the likelihood of irreparable harm.

First,

Marisco states that it will “stipulate that it will not prosecute

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litigation regarding the interplead [sic] funds in courts other
than this Court.”

[Marisco’s Statement at 3.]

There is no

indication that ASG, or anyone acting on its behalf, will
institute other proceedings involving the interpleader funds.
The existence of ASG v. BOH was known to BOH when it filed the
instant Motion, and it is likely that ASG will litigate issues
regarding the interpleader funds.

Even if BOH is ultimately

subjected to an inconsistent ruling in ASG v. BOH regarding the
interpleader funds, there is no evidence that BOH would suffer
anything but monetary losses.

“[E]conomic injury alone does not

support a finding of irreparable harm, because such injury can be
remedied by a damage award.”

Rent–A–Center, Inc. v. Canyon

Television & Appliance Rental, Inc., 944 F.2d 597, 603 (9th Cir.
1991) (citation omitted).

Thus, if the High Court requires BOH

to reinstate an amount equal to the interpleader funds to ASG,
BOH will not suffer irreparable harm because BOH can seek return
of the funds by challenging the High Court’s decision.

Cf. Corp.

of Presiding Bishop of Church of Jesus Christ of Latter-Day
Saints v. Hodel, 830 F.2d 374, 376-77 (D.C. Cir. 1987)
(discussing judicial system of American Samoa).
This Court therefore CONCLUDES that BOH has not
established an entitlement to the requested injunction.
Motion is DENIED as to the requested injunction.

BOH’s

The denial is

WITHOUT PREJUDICE to either the filing of an interpleader action

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or the filing of a motion in the instant action establishing that
BOH meets the requirements of § 2361 and Rule 65.
IV.

Marisco’s Request to Increase the Interpleader Amount
In its statement of position, Marisco “requests that

the interplead [sic] funds include all past and accrued interest
. . . as well as a reasonable amount for future anticipated
interest . . . and at least $25,000 as a fund for post-judgment
attorneys’ fees and costs, the payment of which in such amounts
as may further be determined by this Court.”

[Marisco’s

Statement at 3.]
First, the Court notes that Marisco has not cited any
authority in support of its request for a court order requiring
BOH to interplead an estimated amount for future interest and as
yet undetermined attorneys’ fees and costs.

The Court finds that

Marisco’s request is premature as to these amounts.
As to the past and accrued interest, Marisco’s Ex Parte
Motion for Order Granting Issuance of Writ of Execution (“Ex
Parte Execution Motion”) notes that the judgment in this action
awarded Marisco “the sum of $811,631.87 plus interest at the rate
of .43% per year (not compounded) from September 1, 2009 and
stipulated costs of $12,439.28.”

[Ex Parte Execution Motion,

filed 6/13/12 (dkt. no. 115), Decl. of Mark B. Desmarais at ¶ 2.]
The Writ of Execution, which Marisco’s counsel drafted, however,
states, in pertinent part:

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WHEREAS, judgment was entered on the 1st of
May, 2012 in an action in the United States
District Court, District of Hawai`i, between
MARISCO, LTD., plaintiff and AMERICAN SAMOA
GOVERNMENT defendant, in favor of said MARISCO,
LTD. and against said AMERICAN SAMOA GOVERNMENT
for the sum of $811,631.87 and costs taxed in the
sum of $12,439.28 for a total of $824,071.15 as
appears by the judgment filed in the Office of the
Clerk of the United States District Court,
District of Hawai`i; and
WHEREAS, the said judgment was duly entered
in the Office of the Clerk of the United States
District Court, District of Hawai`i, and the sum
of $824,071.15 is now actually due thereof;
THEREFORE, you are hereby commanded to
satisfy the said judgment out of the personal
property of the said Judgment Debtor . . . .
[Writ of Execution, dkt. no. 115 at 8 (underline emphasis
added).]

Thus, the amount that BOH seeks to interplead is the

amount that the Writ of Execution ordered it to tender.

Although

Marisco could have included the past and accrued interest in the
Writ of Execution, Marisco did not do so, and the past and
accrued interest is beyond the scope of the Writ of Execution.
Marisco’s request to increase the amount of the
interpleader is therefore DENIED WITHOUT PREJUDICE.
V.

Interest Bearing Account
Prior to the hearing on the instant Motion, counsel for

BOH indicated to the Court’s staff that BOH wanted to deposit the
interpleader funds with the district court in an interest bearing
account.

This request, however, is not reflected in BOH’s

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Motion.

This district court’s policy is to deposit interpleader

funds in a non-interest bearing account unless expressly provided
in the order granting the interpleader.

[In re Deposit &

Investment of Registry Funds, Order re Deposit & Investment of
Registry Funds, filed 5/22/12 (“Registry Order”), at 1-2.]

Where

the interpleader funds are deposited into some form of interest
bearing account, the deposit is governed by the Registry Order
and the Court Registry Investment System Overview, both of which
were provided to counsel at, or prior to, the hearing on the
instant Motion.
In order for the Court to order that the interpleader
funds be deposited into an interest bearing account, BOH must
file a written request.

Thus, the Court construes the instant

Motion as requesting that the interpleader funds be deposited in
a non-interest bearing account.
CONCLUSION
On the basis of the foregoing, Garnishee Bank of
Hawaii’s Motion for Interpleader, filed September 17, 2012, is
HEREBY GRANTED IN PART AND DENIED IN PART.

The Motion is GRANTED

as to BOH’s request to interplead the amount of $824,071.15 to
the district court in a non-interest bearing account.

The Court

ORDERS BOH to deposit the interpleader funds with the district
court by October 22, 2012.

If BOH files a written request to

deposit the interpleader funds in an interest bearing account,
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BOH must do so before depositing the funds with the district
court.
The Motion is DENIED WITHOUT PREJUDICE as to BOH’s
request for an injunction against further proceedings regarding
the interpleader funds.

Further, Marisco’s request to increase

the amount of the interpleader to include interest and attorneys’
fees and costs is HEREBY DENIED.
IT IS SO ORDERED.
DATED AT HONOLULU, HAWAII, October 5, 2012.

/s/ Leslie E. Kobayashi
Leslie E. Kobayashi
United States District Judge

MARISCO, LTD. V. AMERICAN SAMOA GOVERNMENT, ETC.; CIVIL NO. 1000137 LEK-BMK; ORDER GRANTING IN PART AND DENYING IN PART
GARNISHEE BANK OF HAWAII’S MOTION FOR INTERPLEADER

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