1

09- 2128- cv H awknet , Lt d. v. O ver s eas Shi ppi ng A ge nci es UN ITED STA

TES CO URT OF AP P EALS F OR TH E S ECO N D CI RCU IT Aug us t T er m, 200 8 (S ub mi tt ed: J un e 16 , 20 09 Dec id ed: No vem ber 13, 200 9) Do cket No . 09 -2 128 -c v H AWKNET , L

TD ., Pl aint iff -A ppe lla nt ,
v. O VE RSE AS S HI P P I NG A GENCI ES , O VE RSE AS W ORL DWI DE H OL DI NG G R OUP , H OM AY G EN ERAL T R A DI NG C O ., LL C, M AJ DPO UR B R OS . C U STO M S C LEARA NCE , M AJ DPO UR B R OS . I NTERNATI O NAL S EA & L

A ND T RANS PORT , SA, G UL F O VE RSE AS G EN ERAL T R A DI NG LL C, MOS O VERS EAS S HI P P I NG V ER MI T T L UN G G MB H, G UL F O VERS EAS , LL C, and TOM S HI P P I NG V ER MI T T L UN G G MB H, Defenda nts-App ellees
. B ef or e: W I NT ER , C AB R ANES , H ALL , Circuit Jud ges . In our r ece nt decision in Shi pping Co rp. o f I ndia Lt d. v . J aldhi Ov er seas P te Ltd. , __ F.3d __, No. 08 -34 77 , 2 00 9 W L 33 19 67 5 ( 2d C ir. Oc t. 16 , 2 00 9) , d ec id ed wh il e t he in sta nt c a se w a s sub ju dice , the Court of Appeals held that a n elec tronic funds transf er was not property attachable under a maritime attachme nt order in the dis trict courts of New York pursuant to Rule B of the Su pp lem ent al Rules fo r

Adm ir alt y or M ar it im e Clai ms andAs s et

Fo r fe itur e Act

io ns of th e F ede r al Rule s of Civil Procedure. The present case is an appea l from an order entered on M ay 6, 2009 by the United States District Court f or the Southern Dis trict of New York (Naomi Rei ce Buchwa ld, Judge ) v acat in g a m ar it im e at tac hm ent

or der . I t r ais es th e qu es ti onof whe th er th e r ul e ann ou nce d i n Shi pping Co rpo rat io n o f I ndia app lie s r et r oact

ive ly. We co ncl ud e that

it do es . T hi s app eal al s o r ais esRule B(1)(a) of the Admiralty R ules states, in r eleva nt part: 1 If a defendant is not found within the district when a v erified complai nt pr ayin g f or att achm ent

andth e af

fi dav it r equ ir ed b y Rul e B (1 )(

b) ar e f ile d, a verified compla int may conta in a praye r for process t o attach the defendant’s tangible or intangible pe rs onal property—up to the amount s uedfo r —i n the h and s of

gar ni s hee s nam ed i n the p r oce s s . Fe d. R. Civ . P . Su pp . R. B (1 )(a). Fo r an o ver vie w of th e at tac hm ent

of EF T s andit s di s con te nt s , s ee Shi pping Co rp. o f I ndia , _ __ F. 3d
__ _, 200 9 WL

331 967 5. 2 the question of whether a party’s failure to assert an argument prior to the announceme nt of a decision whic h might suppor t it constitut es waive r. We conc lude that it does not. Affirmed and remanded.
Kei thW. H ear d, B ur ke & Pa r s on s , N ew Yo r k, N Y, for Plainti ff-App ellant. Rob er t K . G r os s (A lanVan P r aag an d Ed war d W. Fl oyd , on the brief ), Eat on& VanWin kle LLP, New Yor k, N Y, fo r D ef en dant -A ppe lle e T OM Shi pping Ve rmi tt lung GmbH
. J OS É A. C AB R ANES , Circuit Jud ge : In our r ece nt decision in Shi pping Co rp. o f I ndia Lt d. v . J aldhi Ov er seas P te Ltd. , __ F.3d __, No. 08 -34 77 , 2 00 9 W L 33 19 67 5 ( 2d C ir. Oc t. 16 , 2 00 9) , d ec id ed wh il e t he in sta nt c a se w a s sub ju dice , we held that an e lectronic funds tr ansfer (“EFT ”) was not property attachable under a maritime
att achm ent

or der inth e di s tr

ict cou r ts of New Yor k p ur s uan t t o Rule B of th e Su pp lem ent al Rules fo r Adm ir alt y or M ar it im e Clai ms andAs s et

Fo r fe itur e Act

io ns of th e F ede r al Rules of

Civil Pr oce du r e ( “Rul e B ” of

th e “Ad mi r alt

y Rul es ”)
. T he p r es ent

cas e is an ap peal

fr om an o r der 1 entered on May 6, 2 009 by the Uni ted States Distr ict Court for the Southern Dis trict of New York (N aom i Rei ce B uch

wald , Judge

) vaca ting a maritime a ttachment order. It r aises the question of whether the rule announc ed in Shi pping Co rp. o f I ndia applie s r etroactively . This appeal al so r aises theAs in Shi pping Co rp. o f I ndia , the p ar ti es her e hadno con nec ti onto New Yor k o r th e Unit ed 2 States other than that their ban ks had ac counts in New York to facilita te the transfer of funds during ov er sea s, d ol la r-de no mi na te d tr a nsa ctio ns. For a detailed e xplana tion of how international corporations often complete dolla rden om in ate d t r ans act

io ns , s ee Shi

pping Co rp. o f I ndia , _ _ F .3d
__ , 20 09 WL

331 967 5, a t * 1 n .1. 3 question of whether a party’s failure to asser t an argument prior to the announcement of a de cision whi ch m igh t s up po r t i t c on s ti tu te s waiv er . BAC KGROUND T he f ollo wing f act s ar e no t dis pu te d f

or th e pu r po s es of

this app eal. In June 2005, plaintiff-appella nt Hawkne t, Ltd. (“plaintiff” or “Hawknet”), a c ompany in corpo r ate d i n En glan d, ent er ed i nt o anagr eem ent with d ef end ant Ov er s eas Sh ip pi ng Agen cies (“OSA”), a c ompany inc orporated in Ir an, to cha rter three vessels to carry s teel pla te from P oland to I r an. Af te r th e f ir s t o f the thr ee vo yages , O SA d ef aul te d o n the c on tr act . I n J un e 20 07, Hawknet

fileda mar

it im e at tac hm ent

laws ui t i n the S ou th er n D is tr ict of New York purs uant to Rule B of the Admiralty R ules to obtain security from OSA for an eventua l awa rd 2 poss ibly resulting from arbitr ation proceedi ngs over OSA’s default on its contr act wi th Hawkne t. In its complaint, Hawk net sought an order to attach the funds of OSA and va rious other shipping agen cies , in clu di ng M OS Ov er s eas Sh ip pi ng ( “M OS ”) , whichHawknet all egedwer e all

par t o f a n Iranian business entity name d Overseas Worldwide Holding Group. T he D is tr ict Cou r t o r der ed the at tac hm ent , whichpl ain ti ff s er vedons ever al b ank s lo cat ed withi n the S ou th er n D is tr

ict of New Yor k that r ou ti nely han dl e EF T s . As a r es ul t, Hawknet successf ully a ttached funds being sent to OSA, as well as an EFT jointly initiate d by TOM Shipping Vermittlung GmbH (“TOM ”) and MOS. At the time, TOM was not yet a name d defendant, but M OS was a nam ed d ef

end ant . O n Ap r

il 4 , 20 08, T OM

mo vedto vacat e the at tac hm ent ; H awkn etThe relationship of T OM to OSA, MOS, or any other name d defendant wa s central to the 3 cas e be caus e Rul e B (1 )(a) o f the A dm ir alt y Rul es on ly p er mi ts att achm ent of a “d ef end ant ’s tan gib le or intangible property.” If TOM were a corporate alter-ego of a na med defenda nt, the attachme nt could issue; if not, the attachment would be invalid. See ge nerally Transfield ER Ca pe Ltd . v. Indus. Ca rriers , Inc. , 571 F.3d 221 (2d C ir. 2009). Rul e E (4 )(f) of t he Ad mi ra lty R ul es st a te s: 4 When ever

pr op er ty is ar r es te d o r

att ache d, any p er s onclai mi ng a n i nt er es t i n it s hall b e en ti tl ed t o a p r om pt hear in g at whi ch the p lai nt

if f s hall b e r equ

ir ed to s ho w wh y t he ar r es t o r

att achm ent

s ho ul d n ot

be v acat ed o r

other r eli ef granted consistent with these rules. T his s ubdivision shall have no a pplica tion to suits for s eame n’s wages whe n process is iss ued upon a c ertification of suff icient c ause filed pursuant to Title 46, U.S .C. § § 603 a nd 604 or to actions by the U ni te d S tat es fo r

fo r fe itur es fo r

vio lat io n o f a ny s tatut e of

th e Unit ed St a te s. Fe d. R. Civ . P . Su pp . R. E (4 )( f)
. 4 op po s ed the v acatur

onth e gr ou nd s th at T OM was a corpo r ate alt er

ego of M OS
. 3 Af te r di s cov ery onth e co r po r ate id ent it y of T OM , the D is tr

ict Cou r t h elda hea r

in g onApr

il 10, 200 8 p ur s uan t t o Rule E(4) (f ) o f the A dm ir alt

y Rul es . T he D is tr

ict Cou r t d et er mi nedth at 4 Hawknet “ha [d ] s uf fi cien tly all egedalt er

ego s tatus ,” b ut

th at a ddit io nal di s cov ery was r equ

ir ed i n
or der fo r Hawknet “t o p r ov e, o r

no t, th e alt er

ego r elat io ns hi p b et

weenT OM

andth e [n ame d def end ant s ]. ” Hawknet Ltd

. v. Overseas Shipp ing Agencies , No. 07 Ci v. 5912, 20 08 U.S. Dist. LEXIS 35542, a t *17-19 (S.D.N.Y. A pr. 29, 2008) (“ Hawknet I ”). Acc ordingly, the C ourt vacated the original a ttachment of TOM ’s funds but st aye d its or der to permit plaintiff t o replead a nd name T OM as a def end ant . Id

. at *7-8, *1 9. The Court also ordered additional discove ry on the corporate id ent it y of T OM
. Id
. at * 19. Fo llo win g the c on clu s io n o f the c ou r t- or der ed dis cov ery, the D is tr ict Cou r t c on s id er ed all th e evi den ce p r es ent ed b y t he p ar ti es anddet er mi nedth at H awkn et “ha [d ] n ot s ho wn, by a pr epo nd er ance of

th e evi den ce, that

T OM andM OS ar e alt er -e gos .” Haw knet Lt d. v . Over seas Shipp ing Agencies

, N o. 07 Ci

v. 5 912 , 20 09 U .S. Di s t. LE XI S 44 023 , at *19 (S .D .N .Y. M ay 6, 200 9)
.We ha ve appe llate jurisdiction over a district court’s vacatur of a maritime attachme nt 5 un der th e “co lla te r al o r der ” ex cep ti onto 28 U .S. C. § 1 291
. Se e Swi ft & Co . P ack er s v . Co mpania Colombia na Del C

aribe, S.A. , 339 U.S. 6 84, 688-89 (1950); Victrix S.S. Co., S.A. v. Salen Dry Ca rgo A.B. , 825 F.2d 709, 712 (2d Cir. 1987). 5 Acco r di ngl

y, the D is tr

ict Cou r t v acat ed the o r der

of att achm ent

agai ns t T OM

bu t gr ant ed a f

ive day stay to allow Hawknet to seek a stay from the Court of Appea ls in the event that it appe aled the
or der
. Id
. at * 20. Hawkne t now appea ls, seeking that the attac hment order be reinst ated. W e continued the stay iss ued by the District Court until we comple ted our review of the merits of the case. On app eal, pl ain ti ff

argue s th at the D is tr

ict Cou r t ap pl

iedto o s tr in gen t a b ur denof

pr oo f when

con s id er in g wh et her

T OM andM OS wer e alt er -e gos . I n a l et te r br ief dat ed N ov emb er

2, 2 009 addressing the effect of Shi pping Co rp. o f I ndia onit s cas e, d ef

end ant argue s th at the ap peal

is mo ot as
a r es ul t o f o ur

ho ld in g inth at c as e. P lai nt if f r es po nd s , ina let te r

br ief dat ed N ov emb er

3, 2 009 , that Shi pping Co rp. o f I ndia does not apply retroactively . In the alternative, pl aintiff argues that if our holding in Shi

pping Co rp. o f I ndia does apply retroactive ly, defenda nt nevertheless cannot now assert an argument a rising fr om that holding bec ause defenda nt failed to make any such a rgument before th e Di s tr ict Cou r t. DISCUSSI ON T hi s app eal p r es ent s tw o ques ti on s r egar di ng the ap pl icat io n o f o ur r ecen t h ol di ng i n Shi pping Co rp. o f I ndia : f ir s t, whe th er

it app lie s r et r oact

ive ly an d, s eco nd , wh ether a par ty ef fe ct ive ly waiv es an argument on appe al by fa iling to assert the argument before the district court pr ior to the

announce ment of an appel late de cision that might suppor t it. 5 A. It is well e stablished that there is a general presumption agai nst the retroactive a pplica tion of

s tatut es andr egulat

io ns , see, e.g

. , La ndgraf v. USI Film Prods. , 51 1 U. S. 2 44, 273 (1 994 ); Is lande r E
.We e xplaine d as follows in Shi pping Co rp. o f I ndia : 6 As a r eme dy qua si in rem , the v ali di ty of a Rul e B att achm ent

dep end s ent

ir ely onth e de te r mi nat

io n that th e res at i s s ue i s th e pr op er ty

of th e de fe nd ant

at th e mo men t the res

is att ache d. See, e.g. , T

ran spo rt es Nav ie ro s y T er re st re s S .A . de C.V. v. Fairmoun t Heavy T

ransp. N.V. , 572 F.3d 96, 108 (2d Cir. 2009). Because a requirement of Rul e B attachments is that the defendant is not “f ou ndwithi n the dis tr

ict ,” the res

is th e on ly m eans by whi ch a c ou r t c an ob tai n j ur is di ct io n o ver th e de fe nd ant . I f the res

is not the pr operty of the defendant, then the c ourt lacks juris diction.

__ F. 3d at _ _, 200 9 WL

331 967 5, a t * 9 ( fo otno te om it te d)
. I t i s well es tab lis hedth at apar ty

can w aiv e it s r

igh t t o ch all eng e the dis tr

ict cou r t’ s per s on al 7 ju r is di ct io n o ver it
. See Fe d. R. Civ . P . 12 (h )( 1) (“ A par ty

waiv es a[ ] def

ens e [o f l ack o f p er s on al ju r is di ct io n] by . . . f

ail in g t o ei th er : (

i) mak e it by m ot io n . . . o r (ii) in clu de i t i n a r es po ns ive pl eadi ng . . . . ”) ; see also Datskow v. T eledyne, Inc., Cont’l Prods. Div. , 89 9 F .2d129 8, 1 303 (2 d Ci r . 19 90) (holding that a de lay i n chall enging pe rs onal jurisdiction may result in wai ver). 6 Pipeline C o., LLC v. Conn. Dep’

t of Envtl. Prot. , 48 2 F .3d79, 93 ( 2d Cir . 20 06) , b ut

no s uch presumpt ion applie s here. In Firesto ne Tire & Rub ber Co. v. Risjord , the S up r eme Cou r t c on clu dedth at “by def init io n, a ju r is di ct io nal r ul in g m ay ne ver

be m ade p r os pec ti

ve o nly.” 449 U.S . 36 8, 3 79 (1981). Our holding in Shi pping Co rp. o f I ndia di r ect ly af fe ct s ho w the dis tr

ict cou r t m ay ob tai n per s on al j ur

is di ct io n o ver def end ant s , andth us it

is pr op erly co ns id er ed a “ ju r is di ct io nal r ul in g.” 6 We c onclude, the refore, that our holding in Shi pping Co rp. o f I ndia app lie s r et r oact

ive ly. B. Next, plaintiff argues in its letter br ief dated Nove mber 3, 2009 that defenda nt waive d its rig ht t o a sser t on a pp ea l t ha t th e D ist ric t C ou rt l a ck s pe rson a l j uri sdi ctio n o ve r de fe nd a nt b ec a use de fe nd a nt d id no t ma ke a ny suc h a rgu me nt b ef

ore the Di stri ctC ou rt. Al tho ug h i t i s tru e a s a 7 general matter that an appe llate c ourt will not consider arguments unless they we re raised before the di s tr ict cou r t, see, e.g

. , Ba ke r v . Do rf man , 23 9 F .3d415 , 42 3 (

2d Cir . 20 00) ; Norto n v. S am’s Club , 14 5 F. 3d 114 , 11 7 (

2d Cir . 19 98) , “a p ar ty

cann ot be d eem ed t o h ave w aiv ed o bj ect io ns or def ens es whi ch w er e no t kno wn t o b e availab le at th e t im e they could fi r s t h ave b eenmad e,” Holzsager v
.7

Val le y Ho sp. , 64 6 F .2d792 , 79 6 ( 2d Cir . 19 81) ; se e al

so id. (“[T]he mere failure to interpos e such a defense prior to the announc ement of a dec ision which might support it cannot prevent a litiga nt fr om lat er invo kin g s ucha gr ou nd
. . . .” (qu ot in g Curtis Pub l’g Co. v. Butts , 38 8 U. S. 1 30, 143 (1 967 )) ). Pu t dif fe r ent ly, th e do ct r

in e of waiv er dem and s con s cien ti ou s nes s , n ot clai r vo yanc e, f r om par ti es . Prior to Shi pping Co rp. o f I ndia , anargum ent

th at the c ou r t l acke d j ur

is di ct io n o ver def end ant would hav e be en dir ect

ly co nt r ary t o co nt r olling pr eced ent inthis Cir cui t. See Winter Storm Shipp ing, Ltd . v. TPI , 310 F.3d 263 (2d C ir. 2002). Because our holding in Shi pping Co rp. o f I ndia ov er r ul ed that pr eced ent —whichhadgov er nedthis ar ea of law an d co mm er ce f

or s evenyear s —i t p r ov

id ed def end ant with a n ew o bj ect

io n t o the D is tr

ict Cou r t’ s ju r

is di ct io n o ver it , an d we con clu de that defendant did not wa ive this objection by fa iling to raise it before the Distr ict Court. C. Having c oncluded tha t our holding in Shi pping Co rp. o f I ndia app lie s r et r oact

ive ly an d that def end ant di d n ot waiv e it s r

igh t t o o bj ect

to th e Di s tr

ict Cou r t’ s lack

of per s on al j ur

is di ct io n, we
no w co ns id er

whe th er th e Di s tr ict Cou r t p r op erly r et ain s per s on al j ur is di ct io n i n thi s cas e. T he D is tr ict Cou r t as s er te d p er s on al j ur is di ct io n o ver T OM on ly b ecau s e EF T s of

whi ch T OM was a either

an o r igi nat or or ben ef ici ary wer e withi n the Co ur t’ s ju r is di ct io n; this was suff icient, unde r the now-overruled precedent of Win ter Stor m , 31 0 F .3dat 2 78, to es tab lis h p er s on al jurisdiction over a defendant. A fter our decision in Shi

pping Co rp. o f I ndia , an E FT of

which a def end ant is either an o r igi nat or or a ben ef ici ary is no lo nge r

att acha bl e un der

Rul e B . Acc or di ngl

y, fo r th e Di s tr ict Cou r t p r op erly t o m ain tai n p er s on al j ur is di ct io n i n thi s cas e, the Co ur t w ould hav e to c on cl ud e t ha t i t c a n e xe rc ise pe rson a l j uri sdi ctio n b y so me oth erme a ns. This , howeve r, seems unlikely. Rul e B permits attachme nt only when “ defendant is not fo un d wi thinth e di s tr

ict ,” F ed. R. Civ . P . Su pp . R. B (1 )(a), th us all owi ng the as s er ti onof per s on al jurisdiction by a district court only in the narrow class of cases where the defendant has property8

within the district, but not a suf ficient presence within the distr ict so that it is “f

ound within the distr ict.” Unde r the now-defunct rule of Win ter Stor m and its progeny, an E FT within the district of whi ch d ef end ant is an o r igi nat or or ben ef ici ary co ul d b e the b as is fo r as s er ti ng qua si in rem jurisdiction under Rule B. Now that EFTs are no longer suf ficient to establish qua si in rem ju r is di ct io n i n a N ew Yo r k f

ede r al co ur t, Hawknet

mu s t e s tab lis h that

th e Di s tr ict Cou r t h as personal jurisdiction over T OM by some other m eans. As noted above , howeve r, TO M appears to have onl y tenuous connections with NewYork and is perhaps not subject to the juris diction of a New Yor k co ur t. Altho ughwe f

in d i t u nl ike ly that Hawknet can e s tab lis h that

th e Di s tr ict Cou r t h as per s on al ju r is di ct io n o ver T OM , we b eli eve that

Hawknet s ho ul d h ave anop po r tu ni ty , inth e ch ang ed l egal landscape , to assert

that the Distr

ict Court has a basis for per sonal jurisdiction over T OM. CONCLUSI ON For t he fore go in g re a son s, t he Ma y 6 , 2 00 9 O rde r of t he Di stri ctC ou rt i s AF F IRME D insofar as the District Court vacated the a ttachment of EFTs of which TOM was the originator or ben ef ici ary. T he c aus e is REMAN DE D to the Distr ict Court with instructions to enter an order to show cause why

it should not dis miss the complai nt for lackof pers onal jurisdiction. Appella nt’s r equest for or al a rgument is denied. We vaca te our June 18, 2009 order st aying the ord erof t he Di stri ctC ou rt. E a ch pa rty sha ll be a r it s ow n c osts.