Jaldhi Overseas Pte Ltd. v. United Bulk Carriers International Ltda et al

Filing 42

ORDER & REASONS: denying 40 Motion to Tax Costs Under 28 U.S.C. 1921(a)(1)(E). Signed by Judge Carl Barbier on 3/4/16. (sek)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
JALDHI OVERSEAS PTE LTD.

CIVIL ACTION

VERSUS

NO: 15-6148

UNITED BULK CARRIERS
INTERNATIONAL LTDA., ET AL.

SECTION: “J”(3)

ORDER AND REASONS
Before the Court is a Motion to Tax Costs Under 28 U.S.C. §
1921(a)(1)(E)

(Rec.

Doc.

40)

filed

by

Claimant,

Commerciale E Finanziaria S.R.L. (“SCF”), and

Societa’

an Opposition

thereto (Rec. Doc. 41) filed by Plaintiff, Jaldhi Overseas PTE
LTD.

(“Jaldhi”).

Having

considered

the

motion,

the

parties’

submissions, the record, and the applicable law, the Court finds,
for the reasons expressed below, that the motion should be DENIED.
PROCEDURAL HISTORY AND BACKGROUND FACTS
Plaintiff Jaldhi is a Singapore corporation that operates and
charters vessels worldwide. On November 19, 2015, Jaldhi filed a
Verified Original Complaint for Rule B Maritime Attachment and
Garnishment against Defendant United Bulk Carriers International
LTDA (“United Bulk”). (Rec. Doc. 1.) United Bulk is a Maderia
corporation and the alleged charterer of the vessel M/V PEDHOULAS
FARMER (“the Vessel”), which was then present in this District.
1

Jaldhi stated that it had a claim for breach of contract for
nonconforming cargo against United Bulk. It sought to arrest the
Vessel’s bunkers as security for its cargo claim. Jaldhi also filed
a Motion Authorizing Issuance of Process of Maritime Attachment
and Garnishment. (Rec. Doc. 2.) Based on Jaldhi’s Complaint, this
Court granted the Motion for Maritime Attachment and Garnishment.
(Rec.

Doc.

4.)

Accordingly,

the

bunkers

of

the

Vessel

were

attached.
On November 23, SCF filed a Verified Statement of Right or
Interest, claiming that it was a time charterer of the Vessel.
(Rec. Doc. 9.) On the same day, SCF filed a Motion to Vacate
Maritime Attachment, in which it asserted that United Bulk was not
a charterer of the Vessel or an owner of the Vessel’s bunkers.
Instead, SCF claimed that ADM Intermare (“ADM”), the sub-time
charterer of the vessel, owned the bunkers. Subsequently, ADM filed
a Statement of Right or Interest. (Rec. Doc. 13.) ADM then filed
a Motion to Dissolve Attachment (Rec. Doc. 16), which echoed the
arguments raised by SCF in its motion. The Court granted SCF’s and
ADM’s Motions to Expedite and set the motions for hearing on
November 25, 2015. (Rec. Doc. 18.) Jaldhi opposed the motions on
November 24. (Rec. Doc. 21.)

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At the hearing, the Court granted the motions filed by SCF
and ADM and vacated the attachment of the bunkers. (Rec. Doc. 25.)
The Court found that SCF chartered the Vessel to ADM on or about
October 24, with United Bulk acting as a guarantor for SCF’s
performance. (Rec. Doc. 32, at 51.) At that time, ADM became the
owner of the bunkers. Id. at 51-52. Because United Bulk did not
own the bunkers at the time of attachment, the Court vacated the
attachment. The parties submitted a proposed order to that effect,
which this Court entered on November 30. (Rec. Doc. 28.) On
December 2, Jaldhi filed a Notice of FRCP 41 Voluntary Dismissal,
closing the case. On December 7, the Court entered an Order
confirming the dismissal of the case without prejudice and ordering
each party to bear its own costs. (Rec. Doc. 30).
On December 17, SCF filed a Motion to Amend, asking this Court
to amend its December 7 Order to eliminate the requirement that
each party pay its own costs. The Court granted the motion on
January 22, 2016. SCF subsequently filed the instant Motion to Tax
Costs. Jaldhi opposed the motion on February 16, 2016.
PARTIES’ ARGUMENTS
SCF claims that it is entitled to costs pursuant to United
States Code Title 28, Section 1921(a)(1)(E). According to SCF, it

3

incurred expenses for storing the bunkers attached by Jaldhi. SCF
argues that it is entitled to the following costs:
(a)
(b)
(c)

Daily charter hire of $10,750 for 4 days and 23
hours for total hire cost of $51,218.03;
Vessel bunkers consumed totaling $6,940; and
Agency expenses of $8,750.00.

(Rec. Doc. 40-1, at 4) (citations omitted). SCF points to Fifth
Circuit precedent in support of its claim. See Marastro Compania
Naviera, S.A. v. Canadian Maritime Carriers, Ltd., 959 F.2d 49
(5th Cir. 1992). SCF argues that Marastro authorizes an award of
costs to a third party that is forced to store attached property.
Finally, SCF asserts that Marastro and Section 1921(a)(1)(E) do
not require a showing of bad faith or negligence on the part of
the attaching party. Because it was not a party to the dispute
between Jaldhi and United Bulk, SCF argues that it is entitled to
costs.
Jaldhi opposes SCF’s motion for seven reasons. First, Jaldhi
argues that SCF’s motion is untimely because SCF did not file it
within thirty-five days of the Court’s Order to Vacate Attachment.
Second, Jaldhi argues that SCF is not entitled to costs because
Section 1921(a)(1)(E) only allows the United States Marshal to
recover costs. Section 1921 does not authorize a private right of
action. Third, Jaldhi argues that Marastro does not apply because
SCF previously sought to recover damages for wrongful attachment.
4

SCF’s claimed damages are identical to its claimed costs. This
Court previously found that Jaldhi’s attachment was not wrongful
or done in bad faith. Thus, Jaldhi claims that SCF is trying to
convert its would-be wrongful arrest damages into costs, without
the required showing of bad faith.
Fourth, Jaldhi argues that SCF is not an “innocent third
party.” Jaldhi argues that the Marastro court equitably awarded
damages to a third party that was forced to incur costs because of
a dispute between two other parties. In contrast, Jaldhi asserts
that SCF was the alter ego or guarantee of United Bulk, the
defendant in this case. Jaldhi also points out that SCF’s charter
with ADM was temporarily revoked during the bunker attachment. As
a result, SCF was the owner of the bunkers consumed during this
time. Thus, Jaldhi argues that SCF was not an innocent third party
to the dispute.
Jaldhi’s fifth and sixth arguments focus on the sufficiency
of SCF’s proof. Jaldhi claims that SCF failed to prove that it
incurred additional costs for storing the bunkers. The bunkers
were stored aboard the Vessel for the duration of the attachment.
Jaldhi also points out that Section 1921 does not identify charter
hire as a taxable cost. In addition, Jaldhi argues that agency
expenses are incurred regardless of the storing of property. Sixth,
5

Jaldhi attacks the reliability of SCF’s evidence. Seventh and
finally, Jaldhi argues that SCF failed to mitigate its damages. As
an involved party in the lawsuit, Jaldhi argues that SCF could
have posted security to avoid incurring costs. Thus, Jaldhi argues
that SCF’s claim for costs should be denied.
LEGAL STANDARD AND DISCUSSION
Section 1921 provides:
(a)(1) The United States marshals or deputy marshals
shall routinely collect, and a court may tax as costs,
fees for the following:
. . . (E) The keeping of attached property (including
boats, vessels, or other property attached or libeled),
actual expenses incurred, such as storage, moving, boat
hire, or other special transportation, watchmen's or
keepers' fees, insurance, and an hourly rate, including
overtime, for each deputy marshal required for special
services, such as guarding, inventorying, and moving.
28 U.S.C. § 1921. In Marastro, the Fifth Circuit held that a
private party may also recover such costs. 959 F.2d at 53-54.
Marastro involved a seizure of a cargo of corn on a vessel in the
Mississippi River. Id. at 50. The vessel’s time charterer, Canadian
Maritime

Carriers,

Ltd.

(“Canadian”),

intervened

to

recover

damages for wrongful seizure. Id. at 50-51. The Fifth Circuit found
that the plaintiff’s seizure was not in bad faith, so Canadian was
not entitled to damages. Id. at 53. However, the Circuit found
that Canadian’s vessel was forced to store and safeguard the seized
cargo. Id. Because Canadian was an “innocent third party” to the
6

dispute, requiring Canadian to absorb the storage costs would be
unfair. Id. Thus, the Fifth Circuit ordered the plaintiff to pay
for Canadian’s storage fees, including charter hire, bunker fuel,
pilotage from load berth to anchorage, launch service while at
anchorage, and agency fees while detained. Id. at 53-54.
The plaintiff in Marastro requested a rehearing, arguing that
Section 1921 does not authorize a private right of action. See
Marastro Compania Naviera S.A. v. Canadian Maritime Carriers,
Ltd., 963 F.2d 754, 756 (5th Cir. 1992). The Fifth Circuit rejected
this argument as follows:
The court holds the marshal responsible for the
execution of the writ, including the storage and
safekeeping of the seized property[,] although it is
customary and common practice for the marshal on
occasion to delegate certain of these duties, including
storage and safekeeping[,] to others. . . . Canadian was
forced to assume all the duties and responsibilities of
a custodian warehouseman for the marshal. If he
delegates the responsibility for storing and safekeeping
to a third party as he did in this case, it is mandatory
under 28 U.S.C. § 1921(a)(1)(E) for him to collect all
fees and expenses from the seizing creditor . . . . We
have held that the custodian does not forfeit his right
to payment because of the marshal’s failure to perform
his duties . . . .
Id. at 757. The Circuit held that Section 1921 allows a private
right of action. However, it also emphasized that Canadian was
entitled to costs because it (1) was not a litigant on the merits,
(2) had no proprietary interest in the seized object, and (3) had
7

no proprietary interest in whether the seizure was lawful or
whether the seizing party was in good faith. Id. at 756. Thus,
Canadian was an innocent third party to the dispute and entitled
to reimbursement for its costs.
In this case, Jaldhi argues that only the marshal can recover
costs under Section 1921. However, this Court is bound by the
decisions of the Fifth Circuit, including Marastro. Moreover,
courts of this District have applied Marastro when an “innocent
third party” intervenes in a vessel seizure case. See A. Coker &
Co. v. Nat. Shipping Agency Corp., No. 99-1440, 1999 WL 350035
(E.D. La. May 27, 1999) (Vance, J.). Thus, Marastro applies to
SCF’s claim for costs. This Court must determine whether SCF is an
“innocent third party” under Marastro.
In Marastro, the “innocent third party” was the time charterer
of the vessel, which was forced to absorb storage costs due to the
seizure. Similarly, the “innocent third party” in A. Coker was the
vessel’s owner, which had no interest in the merits of the seizure
suit. A. Coker, 1999 WL 350035, at *1. SCF is not an innocent third
party that intervened in the suit to recover costs. Rather, SCF
filed a Statement of Right or Interest, asserting that it was a
time charterer of the Vessel. (Rec. Doc. 9.) Rule C of the
Supplemental Rules for Admiralty or Maritime Claims provides that
8

a verified statement of right or interest indicates a “right of
possession or any ownership interest in the property that is the
subject of the action.” FRCP SUPP AMC Rule C(6)(a)(i). Thus, SCF
claimed a right of possession or an ownership interest in the
bunkers and proceeded to defend the lawsuit.
SCF was also closely connected with United Bulk. While the
Court never expressly found that SCF was the alter ego of United
Bulk, it found that United Bulk was SCF’s guarantor on the charter
to ADM. (See Rec. Doc. 32, at 51.) SCF’s position is similar to
the time charterer’s in A. Coker. In that case, the time charterer
moved to vacate the attachment of the bunkers, arguing that it was
the true owner of the bunkers. See A. Coker, 1999 WL 350035, at
*1. However, the plaintiff established probable cause that the
charterer was an alter ego of the defendant, precluding the Court
from vacating the attachment. Id. Notably, the time charter did
not argue that it was an innocent third party to the dispute. See
id.

Rather,

the

vessel

owner,

which

had

no

interest

in

the

rightfulness of the seizure, asserted innocent third party status.
Id. Here, SCF was closely connected with United Bulk and had an
interest in the merits of the seizure, like the time charterer in
A.

Coker.

SCF’s

connection

to

United

“innocent third party” status.
9

Bulk

precludes

it

from

SCF clearly asserted a proprietary interest in the bunkers
and was a litigant on the merits of the seizure. Thus, it is not
an

“innocent

third

party”

to

the

seizure

suit

according

to

Marastro. SCF is not entitled to recover its storage costs from
Jaldhi.
CONCLUSION
Accordingly,
IT IS HEREBY ORDERED that SCF’s Motion to Tax Costs (Rec.
Doc. 40) is DENIED.
New Orleans, Louisiana this 4th day of March, 2016.

CARL J. BARBIER
UNITED STATES DISTRICT COURT

10