16 -3 92 3( L)

ING Bank N.V

. v . M/V TEMARA 1 

## I n t he 2 

# Uni te d Stat es Cour t of Appeals 3 

## For the Second Cir cuit 4

_________________________________ 5 August Term 2017 6

_________________________________ 7 Nos. 16-4019(L), 16-4019(C on) 8 9 (Argued: March 15, 2018; D ecided: June 13, 2018) 10 11 ING Bank N.V., 12 Plaintiff-Intervenor-Defendant-Appellant, 13 14 v. 15 16 M/V TEMARA, IMO No. 9333929, her engines , tackle, equi pment, furniture, 17 appurtenance s, etc., in rem , 18 Defendant-Intervenor-Defendant-Appellee, 19 20 CEPSA International B.V., 21 Intervenor-Plaintiff-Appellant, 22 23 CEPSA Panama, S.A., 24 Intervenor-Plaintiff, 25 26 O.W. Bunker & Trading A/ S, in personam , 27 Intervenor-Defendant . 1 28

_________________________________ 29 Appeal from the United States District Court 30 for the S outhern D istrict of New York 31 Katherine B. Forre st, District Judge, Presiding.

The Clerk of Court i s respectful ly di rected to amend the caption as abov e. 11 Before : PARKER , WESLEY, and LIVINGSTON, Circuit Judges. 2

________ 3 4 The assignee of a mariti me fu e l contract supplier and the physical supplier 5 a s sert competing maritime li en claim s arising from the delivery of fuel to a 6 vesse l. To effect actual delivery of the fuel, the c o n tr a c t s upplier subcontracted 7 with an intermediary, who re-s ubco n tr acted with the physical supplier. After 8 delivery of the fuel but befor e any party rece ived payment, the cont r a c t supplier 9 and the intermediary declared bankruptcy. Both th e a ssignee of the contract 10 supplier and the physical supplier asser ted maritime li e n s f o r the unpaid fuel 11 against the vesse l. Th e District Court denied both mariti me li ens and sua sponte 12 entere d summary judgment in favor o f the vesse l. The assignee of the contract 13 supplier and th e p hysical supplier appealed. We AFFIRM IN PART, VACATE 14 IN PART, and REMAND for furthe r proc eedings cons istent with this opinion. 15

________ 16 17 J. S T E P H E N S I M M S A N D C A S E Y L. B RY A N T, Simm s Shower s LLP, 18 Balti more, MD., for CEPSA International B.V. 19 20 J A M E S D. B E R C A W A N D RO B E R T J. S T E F A N I, King, Kre b s & 21 Jurgens, PLLC, New Orleans, LA, and B R U C E G. P A U L S O N A N D 22 B R I A N P. M A L O N E Y, Sewar d & Ki ssel LLP, New York, N.Y., for 23 ING Bank N.V. 24 25 J A M E S H. P O W E R A N D M A R I E E. L A R S E N , Holland & Knight LLP, 26 New York, N.Y., for M/V TEMARA, IMO No. 9 3 3 3929, her 27 engines, tackle, equipment, furniture, appurtenances, etc . 28

________ 29 30 31 32 33 34

21 BARRING TON D. PARKER , Circuit Judge: 2 This appeal requires us to decide which parties are e n ti tl e d to a mariti me 3 li en under the Commercial Instruments and Maritime L ie n s Act (“CIMLA”), 46 4 U.S.C. § 31301 et seq. 5 In 2014, the charter er of a vesse l contracted with a s u pplier to buy bunker s 6 (marine fuel). To fulfi ll its oblig a ti on, the contract supplier subcontracted with 7 an intermediary, who, in turn, subcontracted with another entity, the physical 8 s upplier, who then delivered the bunker s. After the bunker s were delivered, b u t 9 befor e anyone was paid, the contract supplier and the intermediary entere d 10 bankruptcy. In order to g e t p a id , the assignee of the contract supplier and the 11 physical supplier asser ted competing mariti me li ens against the vesse l. W e must 12 decide which party was entitled to do so. 13 The assignee of the contract supplier and the physical supplier cross 14 moved for summary judgment. The United S tates District Court for the Southern 15 District of N e w York (Katherine B. Forre st, Judge ) concluded that neither the 16 contract supplier (and, thus, its assignee) nor th e p hy s ical supplier were entitl ed 17 under CIMLA to mariti me li ens and denied their moti ons for summary

31 judgment. Without providing notice to the parties , the District Court then sua

2 sponteentere d summary judgm ent in favor of the ves sel. 3 We affirm in part, vacate in part, and remand fo r fu r th e r p rocee dings. We 4 agree w ith the District Court that the subcontractor physical supplier was not 5 entitl ed to a mariti me li en because it did not provide the bunker s on the order of 6 an entity specified in CIMLA. However, we disagree with th e D istrict Court that 7 the bunker contract supplier—and, thus, its assignee—was not ent itled to seek a 8 marit im e li e n . A contractor is entitl ed to asser t a mariti me li en under CIMLA 9 when it contracts with an entity s p e c if ie d in the statute for the delivery of 10 neces saries and th ose neces saries are delivered pursuant to that arrange ment, 11 even if by a subcontractor . We also conclude that th e D is tr ic t Court’s sua sponte 12 entry of summary judgment was error . 13 BACKGROUND 2 14 This appeal flows from the c o ll apse of O.W. Bunker and Trading A/S 15 ( “ O .W. Denmark”) and its international subsidiaries (collecti vely with its 16 international subsidiaries, the “O.W. Bunker Group”), a world-wide ope r ation 17 which was in the business of supplying bunker s to ships operating in

“JA” refers to the parties’ joint appendix. “SA” refers to ING’s suppl ementalappendix. 2 41 in te rnational commerce. Foll owing the collapse of the O.W. Bunker Group,

2 many of its customers were unsu r e where to direct payment and, because they 3 faced competing claim s fro m various unpaid parties, those customers were 4 concer ned that their vesse ls w o u ld be subject to arre st while the payment issues 5 were s orted out. 6 CIMLA provides to a specific class of creditors a special type of statutory 7 lien—a mariti me li en—as security for a discrete category of debts. Under 8 CIMLA, a party who provides neces sari e s (such as bunker s) to a vesse l is entitl ed 9 to asser t a mariti me li en. 46 U.S.C. § 31342. A mariti me li en grants a provid e r o f 10 neces s a r ie s a suite of powerful rights: the right to arre st the vesse l, to have it 11 sold, and to be paid from the procee ds. Mariti me li ens pr o mo te mariti me 12 commerce by providing addit io n al recour se—be yond in personam claim s against 13 c o u n te r parties—by enabling the asser tion of a li en directly against the vesse l, 14 thereb y encouraging the prompt payment of debts and th e e xistence of a reliable 15 market for the servicing and supplying of v esse ls, which are obviously esse ntial 16 to mariti me commerce. Unpaid entiti es who have supplied neces saries b ut who 17 do not qual ify for mariti me li ens may have in personam claim s . However, due to

51 the complexiti es of international mariti me commerc e , collecti on on these claim s

2 can be con siderably more pr oblemati c than is the case with mariti me li ens. 3 The relevant chain of events began in October 2014 wh e n C opensh ip 4 Bulkers A/S (“ C o p e n ship”), the tim e-char terer of the M/V TEMARA (the 5 “TEMARA,” or the “Vesse l”), contracted with a contract supplier, O. W. 6 Denmark, for the delivery of 400 metric tons of bunker s to the Vesse l in Balboa, 7 Panama. After rece iving the order, O.W. D e n ma rk issued a sales order to 8 Copen ship confirming the det a ils of the sale. The confirmation li sts O.W. 9 Denmark as the “seller,” Copen ship as the “buyer,” and CEPSA International 10 B.V. (“CEPSA”) as the “supplier.” The co n fir ma tion provided that “acceptance 3 11 of the marine bunker s by the vesse l . . . shall be d e e me d to constitute acceptance 12 of the said gener al terms[.]” The confirmation reflected the agreed -upon price 13 for the fuel—$536.0 0 p e r metric ton—and specified that payment would be due 14 3 0 d a y s after delivery. The sales agreemen t between O.W. Denmark and the 15 charter er was governe d by the “OW Bunker Group Terms and Conditions of sale

CEPSA Panama, S.A. o r iginally fi led the intervenor complaint, but the Di stric t Court 3 determined that the re al party-in-interest was CEPSA InternationalB.V. 61 [sic] for Marine B u n k e r s Editi on 2013” (the “O.W. Terms”). JA at 103–14. Clause

2 L.4(a) of the O.W. Ter ms (“Clause L.4(a)”) made them flui d by providing that: 3 Th e s e Te r ms a n d C o n d it ions are subje c t to v a r ia ti o n in 4 circumstanc e s where the physical supply of the Bunkers is being 5 undertaken by a third party which insists that the Buyer is also 6 bound by its own terms a nd conditions. In such circumstances, these 7 Terms and Conditions shall be varied accordingly, and the Buyer 8 shall be deemed to have read and accepted th e terms and conditions 9 imposed by the said third party. 10 Id. at 111. 11 In the next step of the transaction, O.W. Denmark subcontracted with its 12 subsidia r y, O.W. USA, for the purchase of the bunker s. O.W. USA issued a sales 13 order confirmation to O.W. Denmark, li sting O.W. Denmark as the “buyer” and 14 O.W. USA as the “seller.” The confirmation reflected a price of $529.00 per 15 metric ton and call ed for payment within 30 days of delivery. 4

Notably, ING fai led t o present the actual contract constituting this link in the co nt r actual 4 ch ain to the Dist r ict Court on its moti on for summ ary judgm ent; it only presented the actual contract as p a r t o f its moti on for reconsi deration, whi ch the Di stric t Court decl ined to con sider when it denied the moti on. See Order, ING Bank N.V. v. M/V TEMARA , No. 16-cv-95 (S.D .N.Y. Nov. 28, 2 016), ECF Dkt. 181. 71 In the third and final stage of the transaction, O.W . USA subcontracted

2 with the physical supplier, CEPSA, for the actual de li v e r y of the bunker s. 3 CEPSA issued a confirmat io n to O.W. USA li sting CEPSA as the “seller,” O.W. 4 USA as the “buyer,” and reflecting a price of $526.00 per me tr ic ton. O.W. USA 5 th e n me mo riali zed the transaction in its own confirmation. Neither confirmation 6 refe rence d O.W. Denmark or the charter er of the Vesse l, but both refe rence d the 7 Vesse l. CEPSA physically supplied the bunker s to the Ve s s e l a nd CEPSA 8 provided a bunker rece ipt that the Vesse l’s chie f e ngineer signed and stamped 9 with the names of the Vess el and its owner. 10 Foll owing delivery of the bunker s, each pa r ty in the contractual chain 11 invoiced its resp ective counterpar ty, at different prices, reflecting a markup at 12 ea c h s tage of the transaction: O.W. Denmark invoiced the charter er, Copen ship, 13 JA at 11 5 ( $ 5 3 6 p e r metric ton); O.W. USA invoiced O.W. Denmark, JA at 130 14 ($529 per metric ton); and C E PS A in v o ic e d O.W. USA, JA at 90 ($526 per metric 15 ton). A s the invoices came due, O.W. Denmark entere d insolvency procee dings 16 in Den ma r k, the O.W. Bunker Group collapsed, and the various O.W. Bunker 17 Group entiti es then e ntered insolvency p rocee dings around the world.

81 In Dece mber 2013, almost a yea r b e f o r e the O.W. Bunker Group’s collapse,

2 ING Bank N.V. (“ING”) and O.W. Denmark entere d into a $700 mil li on revolving 3 credit agreemen t, funded by a syndicate of lende r s , w hich provided working 4 capital f o r the O.W. Bunker Group. ING contends that the credit agreemen t was 5 secure d by, among other things, an assign me n t of O.W. Bunker Group 6 re c e iv ab le s from the bunker transactions it had conducted — including the right 7 to payment for the bunker s delivered to th e V esse l. No one has rece ived 8 payment for those b unkers. 9 In May 2015, ING, as assignee of O.W. Denmark, fil ed a complaint in rem 10 against the Vesse l in the United States District Court for the District of Mar y land, 11 asser ting a mariti me li en against the Vesse l for the bunker s delivered by C E PS A . 12 ING moved for a warrant of arre st, and the Ves s e l w as then arre sted in 13 B a lti more, Maryland. A few days later, CEPSA, intervened to asser t a competing 14 mariti me li en claim and an in personam bre ach of contract claim agains t IN G. To 15 secure the release of the Vesse l pe nding the adjudication of the competing cl aims, 16 its owner posted s ecurity, and the vess el was release d.

91 In Septembe r 2015, ING move d f o r partial summary judgment on its li en

2 claim and on CEPSA’s claim s and CEPSA cross - mo v e d f o r summary judgment. 3 In January 2016, as these moti ons were stil l pending, the case was transfer red to 4 the Southern District of New York. By June 2016, sever al o th e r a c ti ons arising 5 out of the collapse of the O.W. Bunker Gr o u p in v o lving simi lar claim s were 6 pendi n g b e f o re the District Court. The District Court entere d an order 7 coordinating them, and among other things, directed ING to move fo r p a r tial 8 summary judgm ent to test the validi ty of its m aritim e lien. 9 Initial ly, the District Cour t c o n s idered CEPSA’s entitl ement to a mariti me 10 li en. The District Court granted ING’s mot ion for summary judgment, dismi ssed 11 CEPSA’s mariti me lien claim and denied its cross -moti on for summary 12 judgment. See ING Bank N.V. v. M/V TEMARA , 203 F. Supp. 3d 35 5 ( S.D.N .Y 13 2016) (th e “ A u gust 2016 Order ”). Noting that CIMLA requires that a party 5 14 asser ting a mariti me li en must have prov ide d the neces saries upon the order of 15 ow n e r of the vesse l or a pers on authorized by the owner, the District Court

At the same tim e, the Di strict Court is s ue d o p inions in other O.W. Bunker Gr oup related 5 matters, dism issing the physic al suppli ers’ cl aim s in those action s. See Aegean Bunke ri ng (USA) LLC v. M/T AMAZON

, No. 14-cv-9447, 2016 WL 447 1 8 9 5 (S . D.N.Y. Aug. 24, 2016 ); Order, O’Ro urke Ma ri ne Servs. L.P ., LLP v. M/V COSCO HAIFA, No. 15-cv -2992 (S.D.N.Y. Aug. 24, 2 016), ECF Dkt. 103. 101 deter mi n e d that CEPSA was not entitl ed to a mariti me li en because it provided

2 the bunker s on the ord e r o f O .W. USA, an intermediary who was neither an 3 owner nor the authorized agent of th e o w n er. See id. at 365. The District Court 4 also dismi ssed CEPSA’s alternative claim that it was entitl ed to recove r on a 5 theory of unjust enrichment and o n e qu itable principles, reaso ning that because 6 ma r it im e li ens are creations of CIMLA whose terms are strictly construed, 7 g e n e r ali zed equit able concer ns do not trump the expr ess provisions of the 8 statute. 9 Turning to ING’s (as assignee o f O . W . Denmark) asser tion of a mariti me 10 li en, the District Court concluded that O.W. Denmark had not “provided” 11 neces saries to the Vesse l within the meaning of C IM L A and thus could not asser t 12 a mariti me li en. The District Court found that there was a lack of evide nce with 13 resp ect to O.W. Denmark’s “arrange ments down the chain” a n d th a t O.W. 14 Denmark could not, without proof of a fully intact con tr a c tual chain, be deemed 15 to have provided neces saries as required by CIMLA. See ING Bank, N.V. v. M/V 16 TEMARA , No. 16-cv-95, 2016 WL 6156320, at *8 (S.D.N .Y. Oct. 21, 2016) ( th e 17 “October 2016 Order ”). In other words, the District Cour t concluded that the

111 recor d w a s u n c ertain as to how financial obligati ons and terms and conditions

2 moved down th e chain from O.W. Denmark, the contract supplier, to C EPSA, the 3 physical supplier (through the intermediary, O.W. USA). Based on this view of 4 the recor d, the District Court rea s o n e d th at O.W. Denmark did not take on any 5 risk—fin a ncially or in terms of neces saries provided—in connection with the 6 provision of bunker s to the Vesse l since “it never assumed title or posses sion of 7 the bunker s, it never obligated it self to pay the actual physical supplier, and it 8 never supplied the bunker s.” See id. at *3. Concluding th a t a provider of 9 neces saries must have taken on some risk in the transaction, the District Court 10 denied O.W. Den mark’s claim for a maritime li en because it was “steps removed 11 from the physical pr ovision of bun k e r s a n d never . . . had a tangible financial r isk 12 with regar d to them[.]” See id. at *6; id. at *7 (“The case law does n o t s u p port 13 a w a r d i n g a m a r i t i m e l i e n i n a n o n - r i s k

— a n d t h e r e f o r e n o n 14 protective—circumstance.”). 15 After denying ING’s moti on for partial summar y ju dgment, the District 16 C o u r t sua sponte —and without giving ING notice or an opportunity to 17 resp ond—en te r e d s umm ary judgment against ING and in favor of the Vesse l,

121 e ven though the Vesse l had not moved for summary judgment. Subse quently,

2 ING moved for recons ideration and sought to suppleme nt that factual recor d 3 with additi onal informati o n in order to complete the contractual links missing 4 from its original moti on. The District Court denied the moti o n w ith out 5 entertaining further submissions or brie fin g . Order, ING Bank N.V. v. M/V 6 TE MARA , No. 16-cv-95 (S.D.N .Y. Nov. 28, 2016), ECF Dkt. 181. This appeal 7 followed. 8 STANDARD OF REVIE W 9 We review a district court’s grant of summary judgment de novo . Process 10 Am., Inc. v. Cynergy Holdings, LLC , 839 F.3d 125, 133 (2d Cir. 2016). “ S u mm a r y 11 judgment is proper ‘if the movant shows that there is no genuine dispute as to 12 any material fact and the movant is entitl ed to ju d g me n t as a matter of law.’” Id. 13 (quoting Fed. R. Civ. P. 56(a) ). We construe the evidence in the li ght most 14 favorable to th e non-moving party and draw all reaso nable inference s in its 15 favor. June v. Town of Westfield, 370 F.3d 255, 257 (2d Cir. 2004). 16 17

131 DISCUSSION

2 A maritime li en is a “spec ial proper ty right in the vesse l, arising in favor of 3 the creditor by operation of law as security for a debt or claim,” which “arises 4 when the debt arises[.]” Itel Containers Int’l Corp. v . A t l a nttrafik Express Serv. Ltd. , 5 982 F.2d 765, 766 ( 2 d Cir. 1992) (quoting Equilease Corp. v. M/V SAMPSON , 793 6 F.2d 598, 602 (5th Cir. 1986) (en banc)). Unlike othe r s e c u r ity arrange ments, a 7 mariti me li en tends to bene fit b o th th e ship and its creditors. “On the one hand, 8 it enables ships to obtain repairs an d supplies on its own account that might not 9 otherwise be avail able.” Id. at 768 (citin g P i e d mont & Georges’ Creek Coal Co. v. 10 Seaboard Fisheries Co. , 254 U.S. 1, 9 (1920)). On the other hand, it endows the 11 creditor with a “special proper ty” in the ship that comes into existence when the 12 debt arises and gives the creditor the right to have the ship sold so that the 13 creditor’s debt may be paid out of the procee ds of the sale. Id . ( qu o ti n g The 14 Poznan , 9 F.2d 838, 842 (2d Cir. 1925), rev'd on other grounds sub nom. , New York 15 Dock Co. v. Steamship Poznan , 274 U.S. 117 ( 1 927)); see also Schoenbaum, Thomas, 16 J . , A dmiralty and Maritime Law § 9-1, at 684 (5th ed. 2011); 2-II Benedic t o n 17 Admiral ty § 22 (2017).

141 CIMLA is the statutory basis for mariti me li ens. CIMLA provides that “a

2 pers on providing neces saries to a vesse l on th e o r d e r of the owner or a pers on 3 authorized by the owner . . . has a ma r it im e li en on the vesse l [and] may bring a 4 civil action in rem to enforc e the li en . . . . ” 4 6 U.S.C. § 31342(a). Specifically, 5 CIMLA requires three elements for a maritime li en: ( 1 ) that the goods or services 6 at issue were “neces saries,” (2) that the entity “provid[ed]” the ne c e s s aries to a 7 vesse l; and (3) that the entity pr ovided the neces saries “on the order of the o w n er 8 or a p e r s o n a u th orized by the owner.” Id.; see Barcliff LLC v. M/V DEEP BLUE , 9 876 F.3d 1063, 1068 (11th Cir. 2017). CIMLA defin e s “ p e r s o n s . . . pres umed to 10 have authority to procure neces saries for a v e s s e l” a s “(1) the owner; (2) the 11 master; (3) a pers on entrusted with the manageme n t of the vesse l at the port of 12 supply; or (4) an office r o r a gent appointed by—(A) the owner; (B) a charter er; 13 (C) an owne r pro h ac vice; or (D) an agreed buyer in po sses sion of the vess el.” 46 14 U.S.C. § 31341(a). “Nece ssaries” include, among other things, bunker s. See 15 Hapag-Lloyd Aktiengesellschaft v. U.S. Oil Trading LLC , 814 F.3d 146, 15 1 n .13 (2d 16 Cir. 2016); see also 46 U.S.C. § 31301(4).

151 Mariti me li ens arise only by operation of law and not by con tr act.

2 Bominflot, Inc. v. The M/V HENRICH S , 465 F. 3 d 1 4 4, 146 (4th Cir. 2006) 3 (“[M]aritim e li ens are stricti juris and cannot be created by agreemen t between 4 the parties; instead, they arise by oper a ti o n o f law[.]”); accord Newell v. Norton , 70 5 U.S. 257, 262 (1865) (“Mariti me li ens are not establ is h e d by the agreemen t of the 6 parties. . . . They are consequences attached by law to certain cont r a c ts , and are 7 independen t of any agreeme n t b e tween the parties that such li ens shall exist.”). 8 Mariti me li ens are disfavore d b y the law, and are thus construed under the 9 doctrine of stricti juris , meaning that the statuto r y r e qui rements are construed 10 strictly and may not be expande d by “construction, analogy or inference .” Itel 11 Containers , 982 F.2d at 768 (quoting Piedmont, 254 U.S. at 12). The primary 12 purpose of mariti me li ens is to facili tate ma r it ime commerce by reducing the 13 c o u n te rparty risk associated with supplying a vesse l that may not return to th e 14 same port again. Strict construction of CIMLA, among o th e r th ings , is intended 15 to p r e v e n t a proliferation of li ens, something that might otherwise be a 16 signifi cant hindrance to maritim e commerce. See id. 17

161 A. Contract Supplier’s Claims (O.W. Denmark)

2 Whether ING, as O.W. D e n ma r k ’ s purported assignee, is entitl ed to asser t 3 a mariti me li en against th e V e ssel depends on whether O.W. Denmark is entitl ed 4 to a s s e r t s uch a li en. The key to this inqu iry is whether an entity such as O.W. 5 D e n ma r k which agreed to supply neces saries and then contracts with one or 6 more intermediaries to supply them c a n itself be deemed to have “provided” 7 neces saries under CIMLA. We conclude that the answer, guid ed by 8 straightforward principles of contract law, is yes. A mar it im e li en may be 9 asser ted by an entity when that entity con tr a cts with a vesse l’s owner, charter er, 10 o r other statutorily-authorized pers on for the provision of neces saries a n d th e 11 neces saries ar e supplied pursuant to that agreement eve n if by another par ty. 12 The Restatement (Second ) of Contracts offe r s th e following apt il lustrati on: 13 “A c o n tr a c ts to deliver to B coal of a specified kind and qual ity. A delegates the 14 perf o r ma n c e of this duty to C, who tenders to B coal of specified kind and 15 qual ity. The tender has the e f f e c t o f a tender by A.” Restatement (Second ) of 16 Contracts § 318 cmt. a., il lus. 2 (Am. Law Inst. 1 9 8 1 ) . In other words, a supplier 17 may provide neces saries to a vesse l indirectly through a s ub c o n tr actor because

171 when a subcontractor d o e s so pursuant to its contract with a contractor, the

2 s ubcontractor’s perfor mance is attributable to the contractor. See Galehead, In c . v . 3 M/V ANGLIA , 183 F.3d 12 4 2 , 1245 (11th Cir. 1999) (obser ving that a contract 4 sup p li er “‘provided’ neces saries to the vesse l under the contract irrespe ctive of 5 ho w, o r b y w hom, the delivery was carried out”); see also Clearlake Shipping PTE 6 Ltd. v. O.W. Bunker (Switzerland) SA , 239 F. S u p p . 3 d 674, 691 (S.D.N .Y. 2017) 7 (concluding that a contractor need not have supplied fuel to have a lien, so long 8 a s it, “through a chain of separ ate, but clearly documented transactions, caus e d 9 its subcontractor s to deliver the nece ssaries to the vesse ls”); Exxon Corp. v. Cent. 10 Gulf Lines, Inc ., 780 F. Supp. 191, 194 (S.D .N.Y. 1991). 11 That is what occurre d here . O.W. Denmark agreed to supply bunker s to 12 the Vesse l on the order of Copen ship, the charter er. O.W. Denmark then 13 subcontracted its obligati ons to O.W. USA, which, in turn, subcontracted with 14 CEPS A f or the actual delivery of the bunker s and who in fact delivered the 15 bunker s. Accordingly, we hold that O.W. Denmark was a pr ovider of nece ssaries 16 under CIMLA and may asser t a mariti me li e n against the Vesse l. See also Barcliff , 17 876 F.3d at 1074 (holding that an O.W. Bunker Group entity ac ti n g a s a contract

181 supplier could asser t a maritime li en against a ve s s e l b e c a u se it “provided the

2 bunker s to the vess el within the meaning of § 31341(a)”). 3 The Dist rict Court reache d a different result. It concluded that O.W. 4 Denmar k, in subcontracting for the provision of the bunker s to the Vesse l, did 5 not “provide” the bunker s to the Vesse l since it did n o t in cur any financial risk 6 d own the contractual chain. See October 2016 Order, 2016 WL 6156320, at * 7 7 (obser ving that “if Party A subcontracts to Party B for bunker s for a vesse l, a n d B 8 subcontracts to C . . . in order for Party A to have a mariti me li en . . . the 9 contractua l chain between A and C (or D) must be traceable and intact, 10 ulti mately placing A at financial risk for the bunker s provided” (alter a ti o n in 11 original)). We disagr e e w ith th is applicati on of CIMLA. To asser t a mariti me 12 li en, all a bunker contractor must establish is that it c o n tr a c te d with a statutorily13 authorized pers on for the delivery of bunker s and that the bu n k e r s w e r e 14 delivered pursuant to that contractual arrange ment. H e r e , there is no question 15 that the Vesse l’s charter er an d O .W. Denmark entere d into a contract to deliver 16 b u n k ers to the Vesse l. And, there is no question that those bunker s were

191 delivered pursuant to that arrange ment. Thus, O.W. Denm a r k is entitl ed to

2 asser t a maritime l ien under C IMLA. 3 The District Court’s ri s k a n a ly sis was beside the point. In any event, the 4 contractual chain in the recor d reflects routine commercia l r is k. Had O.W. USA 5 ( th r o ugh CEPSA) failed to deliver, O.W. Denmark would have been li able to 6 Copen ship for the bre ach. O . W . D enmark bore the risk of O.W. USA’s 7 nonper formance (and, also, CEPSA’s) and would have had to find an a lt e r n a te 8 bunker supplier if they failed to deliver. Mor e o v e r, O . W. Denmark would have 9 had to pay O.W. USA even in th e e v ent that Copen ship failed to pay it (and 10 bankruptcy had not intervened). Insofar a s the District Court determined that 11 some additi onal proof of financial risk (over and above the contract itself) on the 12 part of the bunker contractor was required, we conclude that such proof is not 13 required by C IMLA. 14 A c c o r d ingly, we conclude that the District Court err ed in denying ING’ s 15 moti on for par tialsummary judgm ent on its entitl ement to a mariti me li en. 16 17

201 B. Physical Supplier’s Claims (CEPSA)

2 CEPSA claim ed that it is entitl ed to a mariti me li e n f o r the bunker s it 3 supplied, or, in the alternative, that it is entitl ed to r ecover y based upon equit able 4 principles, such as unjust enrichm e n t. We do not agree. Because there is no 5 dispute that CEPSA physically pr o v id e d bunker s to the Vesse l, “CEPSA’s 6 entitl ement to a mariti me li en turns on wheth e r it furnished those bunker s ‘on 7 th e o r d e r of the owner or a pers on authorized by the owner’” August 2016 8 O r d e r, 203 F. Supp. 3d at 364 (quoting 46 U.S.C. § 31342(a)). We agree with th e 9 Distr ic t C o u r t th at CEPSA, as a subcontractor, is not entitl ed to a mariti me li en 10 because it provided the bunker s at the direction of O.W. USA rather tha n a t th e 11 d ir e c tion of the owner or the charter er of the Vesse l, or any other statuto r il y 12 a u th o r ized pers on. It is a “long-recognized rule that the services of an 13 independen t subcontractor [gener ally] do not give rise to a ma r it im e line.” 1 14 A dmiral ty & Mar. Law § 9-3 (5th ed.) Every circuit to have considere d th e is s u e 15 agrees . See Barcliff , 876 F.3d at 1071 (“Where the owner directs a gener al 16 contractor to p r o vide neces saries to its vesse l, a subcontractor retained by the 17 gener al contractor to . . . provide the supplies is gener ally n o t entitl ed to a

211 mar it im e line.”); Cianbro Corp. v. George H. Dean, Inc. , 596 F.3d 10, 17 (1st Cir.

2 2010); Lake Charles Stevedores, Inc. v. PROFESSOR VLADIMIR POPOV MV , 199 3 F.3d 220, 229 (5th Cir. 1999); S.C. State Port Auth. v. M/ V T Y S O N LYKES , 67 F.3d 4 59, 61 ( 4th Cir. 1995); Port of Portland v. M/V PARALLA , 892 F.2d 825, 828 (9th Cir. 5 1989). 6 Des pite the weight of authority to th e c o n tr ary, CEPSA claim s never theless 7 th at it is entitl ed to a mariti me li en for the bunker s it supplied. Alternativ e ly, 8 C E PS A claim s that it is e ntitl ed to r ecover y based upon equit able principles, s u c h 9 as unjust enrichment. We reject both of these ar guments. 10 The District Court c o rre ctly concluded that there is no genuine dispute of 11 material fact as to whether CEPSA provided the b u n k e r s a t the direction of O.W. 12 USA. The recor d contained the sales order c o n fir ma tion that CEPSA issued to 13 O.W. USA and the p u r c h a s e order confirmation that O.W. USA issued to C EPSA. 14 On C E PS A ’ s sales order confirmation, O.W. USA is li sted as the “buyer” and 15 CEPSA is li sted as the “supplier.” See JA at 65 (CEPSA sales order confir ma tion). 16 O.W. USA’s con fir ma ti o n to CEPSA is to the same effect. See id. at 66 (O.W. USA 17 purchase order confirmation). These documents indicate that CEPSA entere d

221 into a bilateral transaction with O.W. USA and none of them indicat e that O.W.

2 USA was the owner o f th e V e s s e l or an agent of the owner or any other 3 statutorily-authorized pers on. The nominati on, co n firmati ons of purchase and 4 s a le , a n d invoice all denominate O.W. USA as the “buyer” and CEPSA as the 5 “ s e ller.” None of the pertinent documents refe r to O.W. Denmark or th e 6 charter er. In other words, CEPSA poin ts us to no credible evidence that the 7 charter er of the Vesse l agreed to be bound b y O . W. USA’s purchase of the 8 bunker s. See Lake Charles Stevedore s , 1 9 9 F.3d at 229 (subcontracting suppliers

6 9 “hired by those gener al contractors are ge n e r a ll y not entitl ed to asser t a li en on 10 their own behalf, unless it can be shown th a t a n entity authorized to bind the 11 ship controlled the se le c ti o n o f the subcontractor and/or its perfor mance”). For 12 these reaso ns, we agree with the District Court’s conclusion that CEPSA was 13 a c ti n g as a subcontractor of O.W. USA (which itself was a subcontractor of O.W .

CEPSA’s argument that the Vessel’s chief engineer’s signature or CEPSA’s delivery recei pt 6 evi dences a direc tiv e from the Vessel (or an authorized agent of the owner) fai ls to raise a genuine issue of materi al fac t. Ackn owl edgment of delivery merely shows that the bun k e r s r e a ch e d the ship and is merely evi dence of “acceptanc e of perform ance under a pre-exi sting cont r a ct .” Clear la ke , 239 F. Supp. 3d at 689. A signature on a delivery reci pe alone is not enough to show that the parties intended to alter in any way the establi shed contractual ch ain well -docum ents by order confi rm ations and inv oic es. 231 Denmark) when it delivered the bunker s to th e Vesse l and is, theref ore, not

2 entitl ed to a mariti me li en. 7 3 Nor can C EPSA show that it was acting on the order of O.W. USA, as age nt 4 of the vesse l owner. See id. at 229; Marine Fuel Supply & T o w i ng, Inc. v. M/V KEN 5 LUCKY

, 869 F.2d 473, 477– 78 (9th Cir. 1988). To resist this con c lu s io n, C EPSA 6 argues th a t the terms and conditions in its (bilateral) agreemen t with O.W. USA 7 bind not just O.W. USA, bu t a ls o th e Vesse l, the charter er, and O.W. Denmark 8 (and ING, as O.W. Denmark’s assignee). Specifi c a ll y, C EPSA contends that the 9 te r ms of the contract between CEPSA and O.W. USA apply to the Vesse l through 10 Clause L.4(a) of the O.W. Terms. In esse nce, CEPSA argues that, assumin g th o s e 11 terms pass through to and apply to the Vesse l, th en the Vesse l had knowledge of 12 those terms and approved and accepted them, making any O.W. Bu n k e r Group 13 entity an agent of the Vesse l s u c h th a t CEPSA, in contracting with O.W. USA, 14 provide d the bunker s on the order of a statutorily-authorized pers on. This chain 15 of contract argument fails because , as we have seen, mariti me li ens are solely

We also note, as the Di strict Court cogently observ ed, that if we were to all ow a 7 subc ontractor— wi thout any in dic ation that a statuto rily-authori zed entity provi ded direc tion— to assert a marit ime li en, we woul d be subj ecting vessels to arrest on the basis of disputes between contractors and their subc ontractors, or in this case, a dispute between a subc ontractor and a subsubc ontractor. SeeAugust 201 6 Order, 2 03 F. Supp. 3d a t 367 . 241 creature s of statute. If a party d o e s n o t comply with the expr ess provisions of

2 CIMLA, it is not entitl ed to a mariti me li en. Generalized principles of contract 3 law can not be use d to work around those provisions. See Itel Containers , 982 F.2d 4 at 768 (a mariti me li en “aris[es] by ope r a ti o n o f la w . . . [and] is theref ore stricti 5 juri s”). 6 CEPSA’s related agency argument fails as well. CEPSA contends that its 7 terms and conditions pass u p the contractual chain, and thus the O.W. Bunker 8 Group entiti es (O.W. Denmark and O.W. USA) became its agen ts f or the supply 9 o f th e bunker s directly to the Vesse l. In othe r words, the charter er (or the Ve s s e l) 10 order ed th e b u nkers directly from CEPSA through O.W. Denmark and O.W. 11 USA. We ar e not per suaded. We s ee no support in the recor d for the pr oposition 12 that either or both of O.W. Denmark and O.W. USA were a c ti ng as CEPSA’s 13 a gent when (i) O.W. Denmark took the initial order for bunker s f r o m th e 14 char te r e r of the Vesse l, (ii) O.W. Denmark subcontracted with O.W. USA for 15 delivery, and (iii ) O.W. USA then sub-subc o n tr a c ted with C EPSA. All we see is a 16 series of counterpar ty transactions.

251 CEPSA also argues that since it supp li e d th e b unkers, it is entitl ed to

2 recove ry from the Vesse l on a theory of unjust e n r ic hment. The District Court 3 proper ly determined that C E PSA could not prevail on this theory. The District 4 Court determined, and CEPSA confirms on appeal, that the only r elief s ought is a 5 mariti me li en against the Vesse l in rem . But, as the District C o u r t c o rre ctly 6 determined, an unjust enrichment claim must b e asser ted in personam . Although 7 unjust enrichment claim s a r e avail able under mariti me law as in personam claim s, 8 Gulf Oil Trading Co. v. Creole Supply, 5 9 6 F .2d 515, 519 (2d Cir. 1979), in rem 9 ma r it ime li ens “cannot be confer red on the theory of unjust enrichment or 10 subrogation.” 2-II Bene dict on Admiral ty § 24 (2017); see also Mullane v. Chambers , 11 438 F.3d 132, 136 n.5 (1st Cir. 2006) (obser ving that the plainti ffs “mista kenly 12 thought that their mariti me li en theories could create equit able li ens”); The 13 Eurana, 1 F.2d 684, 686 (3d Cir. 1924) (“Mariti me li ens . . . cannot be confer red on 14 the theory of unjust en richment or subr ogation.”). 15 Finally, CEPSA’s oth e r e qu itable arguments also fail. Obse rving that 16 equit able principles are “central” to admiral ty law, CEPSA contends th a t it 17 would be a “manifest injusti ce” to all ow ING to recove r the fu n d s th a t are owed

261 CEPSA, the entity that provided the b u n k e rs, in circumstances where ING

2 delivered nothing and supposedl y incurred no commercial risk or obligati on. 3 CEPSA Opening Br. at 24. While mariti me law is ind e e d g r o unded in equity, we 4 disagree that equit able principles mean that CEPSA is entitl ed to a de facto 5 mariti me li en under CIMLA when the statue unambiguously provides otherwise. 6 As the Di s tr ict Court corre ctly obser ved, courts have consistently rejected the 7 c o n c e p t of an equit able mariti me li en. C.f. The Bird of Paradise, 72 U.S. 545 , 5 5 5 8 (1866); O’Rourke M a r i n e S ervs. L.P., LLP v. M/V COSCO HAIFA , 179 F. Supp. 3d 9 333, 336–37 (S.D . N . Y . 2 0 1 6 ) . We do as well because mariti me li ens are strictly 10 creature s of statute and “cannot be extend e d argumentatively, or by analogy or 11 inference .” Osaka Shosen Kaisha v. Pac. Exp. Lumber Co. , 260 U.S. 490, 500 (1923). 12 We are not unsympathetic to CEPSA’s position. After all, it supplied the 13 bunker s and our conclusion means it gets no li en and very li kely could find itself 14 at the end of the day with an uncolle c tible rece ivable. But this result is a frequent 15 one in insolv e n c ies: an unsecure d entity such as CEPSA, who took an unsecure d 16 credit risk, stands in line behind secur ed lender s. 17

271 C. Sua Sponte Grant of Summary Judgment to Vessel

2 Finally, we conclude that the District Court e r r e d when it, sua sponte, 3 granted summary judgment in f a v o r of the Vesse l. See October 2016 Order, 2016 4 WL 6 1 5 6 3 2 0 , a t *9 (citing Bridgeway Corp. v. Citibank , 201 F.3d 134, 140 (2d Cir. 5 2000)).

F eder al Ru le s o f C iv il Procedure 56(a) and 56(b)-(e) set out the procedur es 6 that apply when a party moves for summa r y ju d g ment and when a district court 7 decide s a s u c h a moti on. But when a party does not move for summary 8 judgm e n t, Rule 56(f) controls and “provide[s] expr ess procedur es governing the 9 grant of summary judgment independen t of a moti on.” Swatch Grp. Mgmt. Servs. 10 Ltd. v. Bloomberg L.P. , 756 F.3d 73, 80 n.2 (2d Cir. 2014). Rule 56(f) provides: 11 Judgment Independe n t o f the Motion. After giving notice 12 and a reas onable time to respond, the cour t may: 13 (1) grant summary judgm ent for a non movant; 14 (2) grant the motion on grounds not raised b y a party; or 15 (3) c o n sider summary judgment on its own after 16 identifying for the parties material facts that may not be 17 genuinely in di spute. 18 19 Fed. R. Civ. P. 56(f). 20 A s we rece ntly stated, this Rule requires “that a court may grant summary 21 judgment sua sponte only ‘[a]fter giving notice and a reaso nable tim e to resp ond’

281 an d ‘ a fte r identifying for the parties material facts that may not be genuinely in

2 dispute.’” In re 650 Fifth A v e . a n d R e l a t ed Props. , 830 F.3d 66, 96 (2d Cir. 2016) 3 (quoting Fed. R. Civ. P. 56(f) (alteration in original)). The Supre me Court has 4 emphasized that prior notice is a prer equisi te to a sua s p o n t e grant of summary 5 judgment. See Ce l o t e x Corp. v. Catrett, 477 U.S. 317, 326 (1986) (“[D]istrict courts 6 are widely acknowledged to posses s the power to enter summary judgments su a 7 sponte, so long as the losing party was on notice that [it] had to c o me f o r w a rd 8 with all of [its] e vidence.”). In addition to p roviding notice, a district court is also 9 required to “identify[] for the parties material facts that may not be genuinely in 10 dispute” before entering summary judgment sua sponte . Fed. R. Civ. P. 56(f)(3). 8 11 A district court’s failu re to prov id e adequate notice is almost always 12 reve rsible err or, as it is here . A notice

- f r e e , sua sponte entry of summary 13 judgment is “firmly d is c o u raged” and is li mited only to situati ons when there is 14 no indicatio n th at the party against whom summary judgment would be entere d 15 could pres ent evidence that would affect the summary judgment determination. 16 Bridgeway Corp. , 201 F.3d at 139; see also Coach Leatherware Co. v . A n nTaylor, Inc. ,

The advi sory commi ttee notes to Rul e 56(f) provi d e that “[i ]n many cases it may prove 8 useful fi rst to invi te a moti on; the invi ted moti on wi ll automatic ally tri gger the regular procedure of [Rule 56(c )] .” Fe d. R. Civ. P. 56, Advi sory Comm ittee Notes (2010 Amendm ents). 291 933 F.2d 162, 167– 6 8 ( 2 d Cir. 1991); Schwan-Stabilo Cosmetics GmbH v. Pacificlink

2 Int’l Corp. , 401 F.3d 28, 33 (2d Cir. 2005); In re 650 Fifth Ave. , 830 F.3d at 96–97. 9 3 The District Court’s notice

- f r e e s ua sponte grant of summary judgment in 4 this case was il l-advised. It concluded that the recor d b e f o r e it d id not contain 5 documentation re garding the arrange ment between O.W. Denmark and the other 6 entiti es down the contractual chain to CEPSA. It then concluded tha t th is la c k of 7 documentation was fatal to ING’s asser tion of a mariti me li en by f a il ing to 8 establish a “traceable and intact” contractual chain that would ulti mately place 9 O.W. Denmark, ING’s assignor, at financial risk for the bunker s. See October 10 2016 Order, 2016 WL 6156320, at *6. 11 ING put forth evidence that tended to establish its relationships down the 12 contractual chain. ING submitted, as an exhibit to its S.D.N .Y. Local C iv il Rule 13 56.1 statement in support of its moti on for summary judgment, a d e c la ration of 14 Claus E r ik Mo rtense n, in which he attested that contractual relationships existed 15 between the contract supplier (O.W. Denmark), the subcontractor (O.W. USA),

In re 650 Fif

th Ave. , 830 F.3d at 96 –97 (“We hav e emphasized th at ‘ care should be taken b y 9 the distri ct cour t to determine that the party against whom summ ary judgm ent is rendered has had a full and fai r opportuni ty to meet the propositi on that there is no genuine issue of materi al fac t to be tri ed.’” (quoting Schwan- Sta bil o Co sme ti cs GmbH , 401 F.3d at 33 )) . 301 and the physical s u p p li er of the bunker s to the Vesse l (CEPSA). See SA at 40–41,

2 ¶¶ 16–18. Although specifics were not provide d , h e a tt e sted that O.W. USA was 3 a “subcontractor ” of O.W. Denmark and that C EPSA was a “sub-subco ntractor o f 4 [O.W. D e n ma r k ] f or the delivery of bunker s to [the Vesse l].” Id. at 41, ¶ 18. 5 Th e s e f a c ts were incorporated into ING’s Rule 56.1 statement, and the Vesse l did 6 not dispute them in its Rule 56.1 counter statement. F urther, in its moti on for 7 recons id e r a ti o n, ING submitted an additi onal declaration and offere d 8 documentation regar ding the details of the con tr a c tu al arrange ments O.W. 9 Denmark h ad with i ts subcontractor s. 10 Thus, when the District Court granted summary judgment, it knew from 11 the Mortense n declaration that some evidence ex is ted concer ning the contractual 12 arrange ments between O.W. D enmark and the entiti es down the chain. Insofar 13 as the District Court concluded it required additi onal documentation on this 14 p o in t, the informati on ING pres ented at a minimum should have alerted the 15 District Cou r t that, given notice and an opportunity to do so, ING could have 16 p r o v id e d additi onal informati on on an issue the District Court considere d 17 d is p o s itive. The avail abili ty of this informati on was confirmed when ING

311 provided it on its moti on for recons ideration. To b e sure, district courts are

2 ordinarily not required to accept evidence on mo tions to recons ider that could 3 have been adduced earlier. But here the District Court’s f a il u r e to follow Rule 4 5 6 ( f ) w a s not a technical lapse. By sua sponte entering summary judgment 5 without affording ING the opportunity to pres ent its relevant evidence, the 6 District Court denied ING the proce dures to which it was entitl ed underRule 56. 7 CONCLUSION 8 For th e f o r egoing reaso ns, we AFFIRM IN PART, VACATE IN PART, 9 and REMAND to the District Cour t f o r fu r ther procee dings consistent with this 10 opinion. 11

32