Source: https://caselaw.findlaw.com/us-2nd-circuit/1726859.html
Timestamp: 2019-04-19 11:29:07+00:00

Document:
This action presents, as the District Court aptly put it, “interesting and apparently novel questions regarding the interplay among the United States bankruptcy law, maritime law and the federal interpleader statutes.” UPT Pool Ltd. v. Dynamic Oil Trading (Sing.) PTE., Ltd., Nos. 14–CV–9262 (VEC) et al., 2015 WL 4005527, at *1 (S.D.N.Y. July 1, 2015). It is just one of at least twenty-five other interpleader actions in the United States District Court for the Southern District of New York (Valerie E. Caproni, Judge ), concerning similar issues among overlapping parties.
Plaintiff–Appellee Hapag–Lloyd Aktiengesellschaft (“Hapag–Lloyd”), based in Hamburg, Germany, owns or charters a fleet of shipping vessels, three of which—the M/V Seaspan Hamburg, the M/V Santa Roberta, and the M/V Sofia Express—are involved in this case.2 Hapag–Lloyd contracted with non-appealing Defendant O.W. Bunker Germany GmbH (“O.W.Germany”) to purchase fuel bunkers for these three ships, among others, for the calendar year 2014.3 Pursuant to this contract, Hapag–Lloyd would place orders with O.W. Germany for delivery of bunkers to the vessels and then remit payment as invoiced.
In December, the litigation frenzy began. On December 17, USOT instituted in rem actions on the basis of its asserted maritime liens against the M/V Sofia Express in the United States District Court for the Western District of Washington and against the M/V Santa Roberta and the M/V Seaspan Hamburg in the United States District Court for the Central District of California.7 As part of these actions, USOT obtained ex parte arrest warrants for the vessels, which it intended to execute when the vessels arrived in their respective ports at some point within the next several days. However, on the same day and the opposite coast, Hapag–Lloyd filed its Interpleader Complaint below and moved ex parte for an anti-suit injunction under 28 U.S.C. § 2361. Understandably uneasy to act without notice to the defendants, the District Court held a hearing on Hapag–Lloyd's motion the following day. USOT's counsel was present at the hearing but informed the District Court that he had not been authorized by USOT to appear on their behalf. The District Court adjourned for an hour to give USOT's counsel time to speak with his client, but when it reconvened, USOT still did not enter an appearance.
instituting or prosecuting any proceeding or action anywhere, affecting the property and res involved in this action of interpleader, including but not limited to the arrest, attachment or other restraint of the subject Vessels pursuant to Supplemental Admiralty Rule C or Rule B or other laws to enforce claimants' alleged maritime lien claims arising from the bunker deliveries until the further order of the Court.
USOT took its appeal, and the parties completed their appellate briefing, before the District Court issued its written decision on subject matter jurisdiction. See UPT Pool Ltd., 2015 WL 4005527. Although this order of the District Court is not formally before us on appeal,10 we instructed the parties to brief their respective positions on the District Court's conclusions. See Order, Hapag–Lloyd Aktiengesellschaft v. U.S. Oil Trading LLC, No. 15–97 (2d Cir. Oct. 26, 2015), ECF No. 135.11 With the benefit of this supplemental briefing and oral argument, we turn to subject matter jurisdiction and the merits.
The federal interpleader statute confers original jurisdiction on federal district courts where “[t]wo or more adverse claimants [of at least minimally] diverse citizenship” may or do claim entitlement to “money or property of the value of $500 or more,” or any benefit arising from an “instrument of value or amount of $500 or more” or an “obligation written or unwritten to the amount of $500 or more,” provided that the plaintiff “has deposited such money or property” into the registry 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.” 28 U.S.C. § 1335(a). Where the other requirements are met, the statute makes it irrelevant that “the titles or claims of the conflicting claimants do not have a common origin.” Id. § 1335(b). USOT contends that these statutory requirements are not met. Its principal argument is that, because its claims to payment arise from statutory in rem liens against Hapag–Lloyd's vessels while the O.W. Entities' claims arise from the supply contracts (and thus are correctly characterized by USOT as being in personam in nature), its codefendants are not claiming entitlement to the same money, property, or benefit of the instrument or obligation. USOT is of the view that its maritime liens do not arise out of the Hapag–Lloyd–O.W. Entities contracts but rather from the fact that USOT “provid[ed] necessaries to a vessel on the order of the owner or a person authorized by the owner.” See Maritime Commercial Instruments and Liens Act, 46 U.S.C. § 31342.13 In the context of this case, however, USOT focuses on a difference that is not material to the availability of interpleader.
It is well established that the interpleader statute is “remedial and to be liberally construed,” particularly to prevent races to judgment and the unfairness of multiple and potentially conflicting obligations. State Farm Fire & Cas. Co. v. Tashire, 386 U.S. 523, 533, 87 S.Ct. 1199, 18 L.Ed.2d 270 (1967). Though this matter presents a novel factual situation, we think the case before us fits squarely within the language and purpose of the interpleader statute. Like the District Court, we find instructive Royal School Laboratories, Inc. v. Town of Waterman, 358 F.2d 813 (2d Cir.1966). There, we upheld an interpleader complaint by the Town, naming a supplier of equipment and furniture to the Town and the assignee of the general contractor who purchased but did not pay for the materials. Id. at 815. The supplier's equitable unjust enrichment claims against the Town arose from materialman claims while the general contractor's assignee asserted claims against the Town for payment for the equipment arising from a contract. Judge Friendly, writing for the court, explained that “nothing could be more palpably unjust than to permit two recoveries against [the interpleader plaintiff] for the same enrichment.” Id.14 We conclude that the claims alleged in this action concern the same enrichment to Hapag–Lloyd–i.e., the value of the bunkers, payment for which is the entitlement claimed by all parties15 —and are thus likewise “inextricably interrelated.” Id. Although the claims may have different legal origins, we have previously held that there is no requirement that interpleader claims arise “out of a common source of right or entitlement.” Ashton v. Josephine Bay Paul & C. Michael Paul Found., Inc., 918 F.2d 1065, 1069 (2d Cir.1990); see also 28 U.S.C. § 1335(b).
(1) frustration of a policy in the enjoining forum; (2) the foreign action would be vexatious; (3) a threat to the issuing court's in rem or quasi in rem jurisdiction; (4) the proceedings in the other forum prejudice other equitable considerations; or (5) adjudication of the same issues in separate actions would result in delay, inconvenience, expense, inconsistency, or a race to judgment.
Id. at 35–36 (internal quotation marks omitted); accord Ibeto Petrochemical Indus., Ltd. v. M/T Beffen, 475 F.3d 56, 64 (2d Cir.2007). Our review of the record does not reveal any such analysis by the District Court of the factors, which leaves us without a sufficient record of the District Court's exercise of its discretion. See Gasperini v. Ctr. for Humanities, Inc., 149 F.3d 137, 142, 144 (2d Cir.1998).
However, if we were merely to vacate and remand on this ground, Hapag–Lloyd would remain free to seek an anti-foreign suit injunction under China Trade, and the order granting or denying that injunction would then be immediately appealable under 28 U.S.C. § 1292(a)(1). In the interests of judicial economy and orderly resolution of the matter, therefore, we think it more prudent to order a limited remand pursuant to our Circuit's practice under United States v. Jacobson, 15 F.3d 19, 22 (2d Cir.1994). The remand permits the District Court to make its determinations under the correct standard and return its determinations to us for consideration without the need for reassignment to a new panel and full briefing.
Accordingly, we remand to the District Court with instructions to enter an order, within ninety days of the issuance of our mandate, that eliminates or retains the foreign scope of the injunction, with specific determinations applying the China Trade test. If the District Court retains the scope of the injunction, either party may restore jurisdiction to this panel by filing a letter with the Clerk of this Court within thirty days after entry of such order; if the District Court eliminates the foreign scope of the injunction and Hapag–Lloyd wishes to challenge that decision, it will be required to file a notice of appeal in order to do so. See generally Jennings v. Stephens, –––U.S. ––––, ––––, 135 S.Ct. 793, 798, 190 L.Ed.2d 662 (2015) (“[A]n appellee who does not cross-appeal may not attack the decree with a view ․ to enlarging his own rights thereunder ․“ (internal quotation marks omitted)). In either event, briefing of the issue may be by letter, not to exceed ten double-spaced pages, setting forth the grounds for claiming error in the District Court's decision and attaching a copy of the order. Upon the filing of such a letter, the opposing party may file a response of the same maximum length within fourteen days. Oral argument will be scheduled at the panel's discretion. If neither party files an initial letter—or notice of appeal, if required—the order entered by the District Court on remand will not be reviewed.
We have considered USOT's remaining arguments and find them to be without merit. Accordingly, we AFFIRM in part the District Court's orders of December 19 and 30, 2014, but REMAND the case to the District Court with instructions to enter an order, within ninety days of the issuance of our mandate, that eliminates or retains the foreign scope of its injunction according to specific conclusions under the China Trade test. Either party may seek review of such order by filing a letter or notice of appeal, as prescribed above. In the interests of judicial economy, any such reinstated appeal will be assigned to this panel. The mandate shall issue forthwith.

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