FLAME S.A. v. Freight Bulk Pte. Ltd.

PUBLISHED

UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT

No. 14-2267

FLAME S.A.; GLORY WEALTH SHIPPING PTE LTD.,

Plaintiffs - Appellees,

and

VITOL, S.A.,

Party-in-Interest,

NOBLE CHARTERING INCORPORATED,

Intervenor/Plaintiff,

v.

FREIGHT BULK PTE. LTD.,

Defendant - Appellant,

and

INDUSTRIAL CARRIERS, INC.; VISTA SHIPPING, INC.; VIKTOR
BARANSKIY,

Defendants.

No. 15-1120

FLAME S.A.; GLORY WEALTH SHIPPING PTE LTD.,

Plaintiffs - Appellees,

and
VITOL, S.A.,

Party-in-Interest,

NOBLE CHARTERING INCORPORATED,

Intervenor/Plaintiff,

v.

FREIGHT BULK PTE. LTD.,

Defendant - Appellant,

and

INDUSTRIAL CARRIERS, INC.; VISTA SHIPPING, INC.; VIKTOR
BARANSKIY,

Defendants.

Appeals from the United States District Court for the Eastern
District of Virginia, at Norfolk. Robert G. Doumar, Senior
District Judge. (2:13-cv-00658-RGD-LRL; 2:13-cv-00704-RGD-LRL)

Argued: September 17, 2015 Decided: November 24, 2015

Before WILKINSON, AGEE, and HARRIS, Circuit Judges.

Affirmed by published opinion. Judge Agee wrote the opinion, in
which Judge Wilkinson and Judge Harris joined.

ARGUED: Anthony J. Franze, ARNOLD & PORTER LLP, Washington,
D.C., for Appellant. William Robert Bennett, III, BLANK ROME
LLP, New York, New York; James H. Power, HOLLAND & KNIGHT LLP,
New York, New York, for Appellees. ON BRIEF: Andrew G. McBride,
WILEY REIN LLP, Washington, D.C.; John N. Nassikas III, R.
Stanton Jones, Daniel F. Jacobson, ARNOLD & PORTER LLP,
Washington, D.C., for Appellant. Thomas H. Belknap, Jr., Alan
M. Weigel, Lauren B. Wilgus, Nicholas R. Tambone, BLANK ROME
LLP, New York, New York, for Appellee Flame S.A. Robert T.

2
Hicks, Samuel Spital, Michael J. Frevola, Marie E. Larsen, Stosh
Silivos, HOLLAND & KNIGHT LLP, New York, New York, for Appellee
Glory Wealth Shipping PTE LTD.

3
AGEE, Circuit Judge:

Industrial Carriers, Inc., (“ICI”), a defunct maritime

shipping company, breached numerous contracts in the final

months of its operation. Among ICI’s creditors were FLAME S.A.

(“Flame”), who obtained a foreign judgment against ICI for

breach of four Forward Freight Swap Agreements ("FFAs"), and

Glory Wealth Shipping Pte. Ltd. (“Glory Wealth”), who obtained a

foreign arbitration award against ICI based on the breach of a

charter party.

Both Flame and Glory Wealth sought a writ of maritime

attachment under Supplemental Rule B of the Federal Rules of

Civil Procedure to attach the vessel M/V CAPE VIEWER when it

docked in Norfolk, Virginia. Freight Bulk Pte. Ltd. (“Freight

Bulk”) is the registered owner of the vessel, but Flame and

Glory Wealth asserted that Freight Bulk was the alter ego of

ICI, and that ICI had fraudulently conveyed its assets to

Freight Bulk in order to evade its creditors. For that reason,

they argued that the U.S. District Court for the Eastern

District of Virginia could enforce their claims against ICI

through Freight Bulk. Following a bench trial, the district

court awarded judgment to Flame and Glory Wealth, ordered the

sale of the M/V CAPE VIEWER, and confirmed the distribution of

the sale proceeds to Flame and Glory Wealth.

4
 Freight Bulk now appeals. Finding no merit to its claims,

we affirm the judgment of the district court.

I.

A.

In 2008, Flame entered into four FFAs with ICI. After ICI

defaulted on those contracts, Flame sued ICI in the High Court

of Justice, Queen’s Bench Division, Commercial Court, in London,

England, alleging the breach and seeking monetary damages. The

English court awarded judgment to Flame in the amount of

$19,907,118.36 (“Flame’s English judgment”).

Flame had the English judgment recognized in the U.S.

District Court for the Southern District of New York, and later

registered the judgment in the U.S. District Court for the

Eastern District of Virginia. It then sought and obtained the

order of attachment against the M/V CAPE VIEWER.

Freight Bulk moved to vacate the order of attachment,

contending the district court lacked subject matter jurisdiction

because under either United States (federal) or English law, the

FFAs were not maritime contracts. The district court denied

Freight Bulk’s motion and concluded it had admiralty

jurisdiction, but certified the issue for interlocutory appeal.

We granted Freight Bulk permission to file an interlocutory

appeal.

5
 We then held that federal law governed our jurisdictional

inquiry, and that the FFAs were maritime contracts under federal

admiralty law. Flame S.A. v. Freight Bulk Pte. Ltd., 762 F.3d

352 (4th Cir. 2014) (the “Interlocutory Appeal”). Because the

FFAs were maritime contracts, we concluded that “the district

court had subject matter jurisdiction to adjudicate the matter

before it.” Id. at 363. We remanded the case to the district

court for further proceedings.

B.

Separately, but also in 2008, Glory Wealth contracted for

ICI to charter a vessel. After three installments, ICI stopped

making payments under this agreement. Glory Wealth pursued

arbitration against ICI in England and won an arbitration award

(Glory Wealth’s “English arbitration award”). Subsequently,

Glory Wealth sought and obtained recognition of the arbitration

award in the Southern District of New York. It did not register

that judgment in the Eastern District of Virginia. Instead,

Glory Wealth filed a complaint in the Eastern District of

Virginia alleging that it was an ICI creditor who could maintain

a maritime claim against ICI for breach of a charter party, as

established by its English arbitration award. 1 It then sought

1 Glory Wealth represented to the district court that it was
in the process of having its English arbitration award reduced
to a judgment in England.

6
and obtained an attachment order for the M/V CAPE VIEWER

pursuant to Supplemental Rule B.

C.

While the Interlocutory Appeal in Flame’s case was pending,

the district court consolidated the Flame and Glory Wealth cases

based on the common questions of law and fact. Both complaints

named other defendants in addition to Freight Bulk and ICI. One

such co-defendant was the beneficial owner of Freight Bulk,

Viktor Baranskiy, who is the son of ICI’s final Chairman of the

Board of Directors. Baranskiy is also the sole, beneficial

owner of co-defendant Vista Shipping Ltd. (“Vista”). In fact,

Baranskiy is the sole owner of numerous maritime companies —

now, collectively known as the Palmira Group — of which Freight

Bulk and Vista are just two.

The basic theory underlying both complaints was that

Baranskiy aided ICI in evading its creditors by funneling money

and other assets into multiple entities he controlled, including

Vista and Freight Bulk. Vista was formed in late 2008, around

the same time as ICI’s failure. Freight Bulk, on the other

hand, was not formed until several years later. Consequently,

the complaints relied on the interconnectedness of ICI with

Vista and Vista with Freight Bulk to establish the requisite

link showing Freight Bulk's responsibility as an alter ego for

ICI’s debts. The complaints alleged that Vista and Freight Bulk

7
were both formed with funds that originated from ICI and that

ICI fraudulently transferred those funds and other assets in

order to avoid its creditors.

The district court, with the assistance of a magistrate

judge, oversaw “many, many” motions during discovery. Flame

S.A. v. Indus. Carriers, Inc., 39 F. Supp. 3d 769, 771 (E.D. Va.

2014). Freight Bulk repeatedly sought to delay the proceedings

by obfuscation, often challenging the meaning and scope of

discovery orders with meritless claims. As a result of Freight

Bulk’s noncompliance, Flame and Glory Wealth obtained sanctions

in the form of certain presumptions to be applied at trial.

The evidence adduced at trial and the district court’s

factual findings are discussed below in the context of Freight

Bulk’s sufficiency challenge. But as background to our review,

we note that things did not bode well for Freight Bulk when, by

the end of the first day of his testimony, Baranskiy had

provided inconsistent and evasive explanations for many of the

key relationships and transactions at issue in the case. Even

so, the district court expressed its surprise when Baranskiy and

Freight Bulk’s lead trial attorney “abandoned the case on the

second morning of his testimony by not appearing” and instead

left the country. Id. at 776. Local counsel notified the court

of Baranskiy and lead counsel’s decision and did not present any

further evidence.

8
 Flame and Glory Wealth subsequently moved for judgment in

their favor, which the district court granted. Id. at 790. In

so doing, the court concluded that the evidence demonstrated

that ICI, Vista, Freight Bulk, and Baranskiy were alter egos of

one another. In addition, it found that ICI fraudulently

transferred assets to Vista and related Palmira Group entities

to avoid creditors, and that these latter entities had also

fraudulently transferred funds to Freight Bulk. Accordingly, it

held the defendants jointly and severally liable for ICI’s

debts, up to the value of the M/V CAPE VIEWER. 2 The court

ordered the sale of the vessel, and later confirmed the sale and

ordered distribution of the sale proceeds between Flame and

Glory Wealth under a formula to which they had agreed.

Freight Bulk noted a timely appeal and we exercise

jurisdiction pursuant to 28 U.S.C. § 1291.

The liability finding was limited in this manner because
2

attachment proceedings under Supplemental Rule B confers only
quasi in rem jurisdiction, which limits personal jurisdiction
over the defendants in the case to the value of the attached
vessel. See Supplemental Rule B(1)(a); Vitol, S.A. v. Primerose
Shipping Co. Ltd., 708 F.3d 527, 540 (4th Cir. 2013). Flame and
Glory Wealth had also sought to hold the defendants liable for
the entire amount of their judgments against ICI, but the
district court rejected that argument. Since they did not file
a cross-appeal challenging that determination, it is not at
issue in this appeal.

9
 II.

On appeal, Freight Bulk raises six discrete issues and

multiple sub-arguments. While we have reviewed its arguments in

detail, we will only address its primary contentions of error.

Those are: (1) that under Fourth Circuit precedent, United

States substantive law does not apply to this dispute, which

means the district court lacked subject matter jurisdiction; (2)

that under Supreme Court precedent, actions to shift liability

do not state an independent cause of action to establish subject

matter jurisdiction, nor can a plaintiff rely on a prior

lawsuit’s basis for the court’s jurisdiction in a subsequent

suit to shift liability; (3) that the district court erred in

distributing proceeds of the M/V CAPE VIEWER’s sale to Glory

Wealth because Glory Wealth failed to register its New York

default judgment against ICI in the U.S. District Court for the

Eastern District of Virginia; (4) that the district court abused

its discretion by imposing certain discovery sanctions; (5) that

the evidence was insufficient to support the judgment as to both

alter ego liability and fraudulent conveyance; and (6) that the

district court judge exhibited personal bias against the

defendants’ Ukrainian nationality, which tainted the entire

proceeding and requires a new trial. We address each issue in

turn.

10
 A. Subject Matter Jurisdiction

Freight Bulk raises two new challenges to the district

court’s subject matter jurisdiction. Although the Court

previously determined in the Interlocutory Appeal that the

district court possessed admiralty jurisdiction over Flame’s

claims, the substantive questions we analyzed there are

different from the arguments Freight Bulk now presents. Flame

and Glory Wealth urge us to hold that the mandate rule precludes

our reconsideration of the district court’s subject matter

jurisdiction.

We have reservations about whether a party can bring

serial, piecemeal challenges to the district court’s subject

matter jurisdiction, and it is certainly a practice we do not

encourage. However, we will address the merits of Freight

Bulk’s new arguments for two reasons. First, neither the

Supreme Court nor we have directly opined on how to reconcile

the mandate rule with subsequent distinct challenges to the

Court’s subject matter jurisdiction, a challenge that could

ordinarily be raised at any time and even sua sponte. Second,

Glory Wealth was not a party to the Interlocutory Appeal.

We review de novo whether the district court had subject

matter jurisdiction. See Vitol, 708 F.3d at 533.

11
 1.

Relying on Dracos v. Hellenic Lines, Ltd., 762 F.2d 348

(4th Cir. 1985) (en banc), Freight Bulk contends that the

district court lacked jurisdiction because the factors governing

choice of law set out in Lauritzen v. Larsen, 345 U.S. 571

(1953), point against applying federal law to the parties’

dispute. Because neither the parties nor the alleged wrongful

conduct had any connection to the United States, Freight Bulk

asserts that Dracos requires us to conclude that the district

court lacked subject matter jurisdiction.

Many of Freight Bulk’s arguments conflate questions of

choice of law with questions of subject matter jurisdiction, but

our overriding impression is that Freight Bulk simply

misunderstands our holding in Dracos. There, the plaintiff

brought a negligence claim under the Jones Act and an

unseaworthiness claim under general “American Maritime law.”

762 F.2d at 350. The plaintiff asserted both tort claims

against her deceased husband’s employer, the owner of the ship

upon which he had died. The plaintiff, her husband, and the

defendant were all Greek individuals or corporations. The only

connection to the United States was that the plaintiff’s husband

died while the ship was docked in Norfolk, Virginia. Id. at

350-51.

12
 Applying Lauritzen’s choice-of-law analysis, the district

court found that federal tort law should not apply to the case,

and without a federal claim to decide, the court dismissed the

case for lack of jurisdiction. Id. at 351. We held that the

district court’s findings that the defendant’s operations and

connections to the United States were insufficient to require

application of United States law to the plaintiff’s claims were

not clearly erroneous. Id. at 352. As a consequence, we agreed

that federal tort law did not govern the plaintiff’s claims and

that the district court lacked jurisdiction to consider the

case. Id. at 353.

Dracos thus held that when federal law does not provide the

basis for a plaintiff’s claims against the defendant, the

district court is without subject matter jurisdiction. The

court relied on the Lauritzen choice-of-law analysis to

determine what law would govern the maritime tort action at

issue, which in turn determined whether a federal tort claim

existed. 3 Here, in contrast, Flame and Glory Wealth do not need

to look to Lauritzen’s choice-of-law analysis to pursue a claim

under federal law. Instead, their claims rest on the long-

3Glory Wealth argues that Dracos’s reference to
“jurisdiction” was imprecise and that recent Supreme Court
precedent calls into question whether that analysis implicates
the district court’s subject matter jurisdiction. We need not
address that argument because even a straightforward reading of
Dracos does not support Freight Bulk’s position.

13
standing recognition that district courts have subject matter

jurisdiction in admiralty both to enforce the judgments of

foreign admiralty courts, see Vitol, 708 F.3d at 533, 538, and

to consider the issues of alter ego and fraudulent transfer as

part of an attachment proceeding pursuant to Supplemental Rule

B, see id. at 537-38.

In the Interlocutory Appeal, we held that the FFAs between

Flame and ICI were maritime contracts, which meant that Flame’s

claim to enforce its English Judgment by means of a Supplemental

Rule B attachment was cognizable under the district court’s

admiralty jurisdiction. Flame, 762 F.3d at 354-63. None of

Freight Bulk’s arguments in this appeal challenge that holding,

nor would it be able to do so as that holding is the law of the

case. Everett v. Pitt Cty. Bd. of Educ., 788 F.3d 132, 142 (4th

Cir. 2015) (observing that with limited exceptions, once a court

has established the law of the case, “it must be followed in all

subsequent proceedings in the same case” 4). Although Glory

Wealth seeks to enforce its English arbitration award, its claim

against ICI also arose from the breach of an indisputably

maritime contract, namely, a charter party. E.g., Kossick v.

United Fruit Co., 365 U.S. 731, 735 (1961) (“Without doubt a

Here and throughout the opinion, internal quotation marks,
4

citations, alterations, or footnotes have been omitted in
citations.

14
contract for hire either of a ship or of the sailors and

officers to man her is within the admiralty jurisdiction.”).

Accordingly, Flame and Glory Wealth have claims arising squarely

within federal admiralty jurisdiction. See 28 U.S.C. § 1333.

At bottom, neither Dracos nor the Lauritzen choice-of-law

analysis have any bearing on Flame and Glory Wealth’s ability to

bring the type of federal action they assert, nor in

establishing the district court’s admiralty jurisdiction over

this case.

2.

Freight Bulk’s second jurisdictional challenge is that

Peacock v. Thomas, 516 U.S. 349 (1996), “precludes federal

jurisdiction over alter ego and fraudulent conveyance claims

that seek to shift liability for an existing judgment—including

a maritime judgment—onto a non-party to that judgment.”

(Opening Br. 15.) Freight Bulk contends that Flame and Glory

Wealth’s allegations of alter ego and fraudulent concealment

liability did not independently provide the district court

subject matter jurisdiction. In addition, it asserts that the

district court could not exercise ancillary, or supplemental,

jurisdiction because Peacock prohibits a plaintiff relying on

the court’s jurisdiction in an earlier lawsuit to establish

jurisdiction in a subsequent lawsuit to enforce a judgment.

15
 We disagree. Freight Bulk fails to grasp key substantive

distinctions between federal question jurisdiction and admiralty

jurisdiction when bringing suit to enforce a judgment. In

Peacock, the Supreme Court held that the district court lacked

jurisdiction to consider a “new action[] in which a federal

judgment creditor [sought] to impose liability for a money

judgment on a person not otherwise liable for the judgment.”

516 U.S. at 351. Because the second action did not allege a new

violation of any federal law, the district court did not have

original jurisdiction in the second lawsuit pursuant to 28

U.S.C. § 1331 (federal question jurisdiction). Id. at 353-54.

The Supreme Court also held that the district court did not have

supplemental jurisdiction. 5 This was so, the Court concluded,

because “[i]n a subsequent lawsuit involving claims with no

independent basis for jurisdiction, a federal court lacks that

threshold jurisdictional power that exists when ancillary claims

are asserted in the same proceeding as the claims conferring

federal jurisdiction.” Id. at 355.

While the plaintiff in Peacock sought to enforce a judgment

arising from the court’s federal question jurisdiction, Flame

5 Supplemental jurisdiction, which is sometimes referred to
as ancillary jurisdiction, “permit[s] disposition by a single
court of claims that are, in varying respects and degrees,
factually interdependent” and “enable[s] a court to function
successfully, that is, to manage its proceedings, vindicate its
authority, and effectuate its decrees.” Id. at 354.

16
and Glory Wealth sought to enforce a foreign judgment and

arbitration award through the attachment of a vessel by invoking

the district court’s admiralty jurisdiction. This distinction

matters because under long-standing Supreme Court jurisprudence,

a district court’s admiralty jurisdiction extends to claims to

enforce foreign admiralty judgments. See Pennhallow v. Doane

Adm’rs, 3 U.S. (3 Dall.) 54, 97 (1795) (opinion of Iredell, J.);

see also Vitol, 708 F.3d at 538 (stating “centuries of settled

hornbook admiralty law establish that ‘admiralty jurisdiction in

the United States may be broadly stated as extending to . . .

any claim to enforce a judgment of a foreign admiralty court’”);

Ost-West-Handel Bruno Bischoff GmbH v. Project Asia Line, Inc.,

160 F.3d 170, 174 (4th Cir. 1998); 1-VII Benedict on Admiralty §

106.

This recognition of subject matter jurisdiction in the

admiralty context “differs substantially from the law governing

jurisdiction to enforce judgments rendered by federal courts

exercising federal question jurisdiction under 28 U.S.C. §

1331.” D’Amico Dry Ltd. v. Primera Mar. (Hellas) Ltd., 756 F.3d

151, 155 (2d Cir. 2014). While an enforcement action brought

under § 1331 must demonstrate the existence of federal

jurisdiction independent of the judgment to be enforced, a

district court’s ability to enforce foreign admiralty judgments

has not been so limited. Id. at 155-56 (collecting cases on

17
point). Similarly, as we reiterated in Vitol, the district

court’s admiralty jurisdiction includes the inherent authority

to grant attachments, including an attachment of assets pursuant

to Supplemental Rule B. See 708 F.3d at 537-38.

Peacock only discussed the requirements of federal question

jurisdiction under § 1331 and was unrelated to the scope of a

district court’s admiralty jurisdiction. As we have previously

recognized in another context, “Peacock does not prohibit a

federal court from taking jurisdiction over a postjudgment alter

ego claim where an independent basis for jurisdiction exists.”

C.F. Trust, Inc. v. First Flight Ltd. P’ship, 306 F.3d 126, 133

(4th Cir. 2002). Here, that “independent basis” is the court’s

admiralty jurisdiction.

The Supreme Court’s decision in Swift & Co. Packers v.

Compania Colombiana Del Caribe, S.A., 339 U.S. 684 (1950),

confirms our conclusion that because the district court was

properly exercising its admiralty jurisdiction, it could also

consider the issues of alter ego and fraudulent conveyance. In

Swift, the plaintiff filed suit against a defendant for

nondelivery of cargo and attached the defendant’s vessel. The

plaintiff later sought to amend its allegations to include a

second named defendant, which it argued was either the original

defendant’s alter ego or an entity to whom the original

defendant had fraudulently transferred assets. Id. at 686.

18
Although the Supreme Court ultimately rejected plaintiff’s alter

ego claim, it first reiterated that “[t]he jurisdiction of a

court of admiralty to determine the question of alter ego is

undoubted.” Id. at 689 n.4. Thus, under Swift, that

“undoubted” authority exists in this case as well.

Swift reached the same conclusion on the issue of

fraudulent conveyance. The district court had held (and the

Fifth Circuit affirmed) that it could not consider the

plaintiff’s fraudulent conveyance claim because it ran too far

afield from the admiralty claim that provided the basis for the

court’s jurisdiction. Id. at 689-90. The Supreme Court

disagreed, observing that although there are restraints on the

exercise of admiralty jurisdiction,

[The plaintiffs, as creditors of the defendant] went
into admiralty on a claim arising upon . . . matters
obviously within admiralty jurisdiction. As an
incident to that claim, in order to secure
respondents’ appearance and to insure the fruits of a
decree in [their] favor, they made an attachment . . .
. The issue of fraud [arose] in connection with the
attachment as a means of effectuating a claim
incontestably in admiralty. To deny an admiralty
court jurisdiction over this subsidiary or derivative
issue in a litigation clearly maritime would require
an absolute rule that admiralty is rigorously excluded
from all contact with nonmaritime transactions and
from all equitable relief . . . . It would be strange
indeed thus to hobble a legal system that has been so
responsive to the practicalities of maritime commerce
and so inventive in adapting its jurisdiction to the
needs of that commerce.

Id. at 691.

19
 These principles govern this case as well: Flame and Glory

Wealth filed enforcement claims that were “obviously within

admiralty jurisdiction.” Attendant to these claims was the

Supplemental Rule B attachment. The issue of fraudulent

conveyance arose in connection with those claims. And because

the district court’s admiralty jurisdiction had been invoked by

the Supplemental Rule B attachment, it could also consider the

latter.

Freight Bulk points to two cases where circuit courts have

applied Peacock in a maritime context. See Nat’l Mar. Servs.,

Inc. v. Straub, 776 F.3d 783 (11th Cir. 2015); Zamora v. Bodden,

395 F. App’x 118 (5th Cir. 2010) (per curiam) (limiting its

analysis to whether federal question jurisdiction exists).

Neither is binding, of course, but we also find them

unpersuasive to Freight Bulk’s position. 6 Significantly, neither

6 In fact, Straub cuts against Freight Bulk’s argument with
respect to the fraudulent transfer claim because the Eleventh
Circuit distinguished Peacock, and concluded it could exercise
ancillary jurisdiction in a supplementary proceeding to avoid a
fraudulent transfer by a judgment debtor where jurisdiction in
the original proceeding had been based in admiralty. See
Straub, 776 F.3d at 786-88. This was so because the suit
“sought to disgorge [the defendant] of a fraudulently
transferred asset, not to impose liability for a judgment on a
third party,” and liability would be limited to “the proceeds
that [the judgment debtor] fraudulently transferred to [the
defendant].” Id. at 787. While we need not reach that analysis
here since admiralty jurisdiction otherwise exists, Freight
Bulk’s attempt to distinguish Straub in its favor
mischaracterizes that case’s holding.

20
case considers whether Peacock applies to an action where an

independent basis for establishing the district court’s

admiralty jurisdiction exists (apart from the fraud or alter ego

theories). Nor does either case challenge that the district

court’s admiralty jurisdiction extends to enforcing foreign

admiralty judgments in attachment proceedings.

To reiterate, then, unlike Peacock and the other cases

Freight Bulk relies on, Flame and Glory Wealth brought

proceedings in the district court to enforce an admiralty

judgment and attach a vessel under Supplemental Rule B. The

district court had admiralty jurisdiction under § 1333 to

determine those claims, and as part of considering those claims,

the court also had authority to consider the questions of alter

ego and fraudulent conveyance. See 28 U.S.C. § 1367; Vitol, 708

F.3d at 537-39.

Peacock’s analysis thus has no bearing on the district

court’s subject matter jurisdiction over Flame and Glory

Wealth’s claims. For these reasons, the district court properly

exercised jurisdiction over the parties’ dispute. 7

7 Freight Bulk also contends that even if the district court
possessed subject matter jurisdiction, the district court erred
by adopting Virginia’s fraudulent conveyance framework because
it is an outlier among state-law provisions. Freight Bulk has
not preserved this issue for appeal because it failed to raise
it in the district court. As such, we will not consider it for
(Continued)
21
 B. Glory Wealth’s Judgment Against ICI

Next, Freight Bulk contends the district court should not

have permitted Glory Wealth to receive a share of the proceeds

from the sale of the M/V CAPE VIEWER because Glory Wealth failed

to register its New York judgment in the Eastern District of

Virginia, “a perquisite to enforce[ment] . . . under 28 U.S.C. §

1963.” (Opening Br. 38.) Freight Bulk raises various arguments

flowing from this main premise, all of which it asserts require

“this Court [to] render judgment for Freight Bulk.” (Opening

Br. 40.) We need not consider the substance of Freight Bulk’s

arguments in light of two threshold considerations: waiver and

harmlessness.

To start, Freight Bulk never argued to the district court

that Glory Wealth’s failure to formally submit the judgment it

sought to be enforced precluded it from receiving a share of the

proceeds from the sale of the M/V CAPE VIEWER. As such, Freight

Bulk did not put the district court “on notice as to the

substance of the issue” now raised on appeal, as required to

preserve it for review. Nelson v. Adams USA, Inc., 529 U.S.

460, 469 (2000).

the first time on appeal. In re Under Seal, 749 F.3d 276, 285-
86 (4th Cir. 2014).

22
 In addition, the record shows that between the district

court’s order holding Freight Bulk liable and the sale of the

M/V CAPE VIEWER, Freight Bulk never argued that Glory Wealth’s

failure to formally introduce a judgment against ICI precluded

it from recovering a portion of the proceeds. This was so even

though the district court explicitly asked Freight Bulk if it

had any objections to the distribution. At that time, Freight

Bulk only expressed a somewhat indifferent concern that it did

not know the basis for the agreed-upon allocation between Glory

Wealth and Flame. We have refused to consider newly raised

arguments absent “exceptional circumstances,” that is to say, a

“‘fundamental error’ or a denial of fundamental justice.” In re

Under Seal, 749 F.3d at 285-86. No exceptional circumstances

exist in this case.

Another consideration demonstrates the absence of any such

fundamental injustice and stands as an alternative basis to

reject Freight Bulk’s argument. Even assuming error, Freight

Bulk would not be entitled to any relief as a consequence of

Glory Wealth’s failure to formally file its judgment. This is

so because Flame registered an enforceable judgment in the

district court against Freight Bulk in the amount of

$19,907,118.36. That judgment far exceeds the approximately

$8.3 million in proceeds arising from the sale of the M/V CAPE

VIEWER. Flame’s claim thus precluded Freight Bulk from any

23
portion of the proceeds from the sale. Prior to distribution of

the proceeds, however, Flame and Glory Wealth mutually agreed

how to divide the proceeds between themselves, and the district

court entered judgment based on that agreement. Freight Bulk

thus has no interest in how they resolved their competing

claims. It has not been harmed by the alleged error, nor has it

shown that it would be entitled to any relief as a result. See

28 U.S.C. § 2111 (stating the court will not consider harmless

errors); Fed. R. Civ. P. 61 (same). Accordingly, we decline to

consider the substance of Freight Bulk’s argument. 8

C. Discovery Sanctions

After finding that Freight Bulk had violated several of the

court’s discovery orders, the magistrate judge issued certain

sanctions. Freight Bulk challenges only one of the findings and

resulting sanctions: the failure to produce responsive ICI

documents. 9 As a consequence of that violation, the magistrate

In light of our conclusion, we deny Glory Wealth’s motion
8

to supplement the record with the English judgment enforcing the
arbitration award that it obtained after final judgment had been
obtained in this proceeding.
9 The district court also found that Freight Bulk had
violated discovery orders by failing to produce (1) employee
workbooks, (2) responsive emails from Baranskiy’s account, (3)
documents relating to a loan agreement between Sea Traffic and
Freight Bulk, and (4) responsive email attachments. As a
consequence, it authorized a sanction in the form of deeming the
following facts established for purposes of the case: (1)
Freight Bulk and Vista were alter egos of each other, and (2)
the loan from Sea Traffic to Freight Bulk was a sham transaction
(Continued)
24
judge deemed “as established for purposes of” the proceedings,

that “had any [ICI] documents been produced by [Freight Bulk] in

compliance with the Court’s discovery orders, those documents

would have been favorable to [Flame and Glory Wealth] and

harmful to [Freight Bulk].” (J.A. 1323.) The district court

overruled Freight Bulk’s objections, agreeing that Freight Bulk

controlled responsive ICI documents and yet had failed to

produce them, and that the sanction was appropriate. (J.A.

1762-66, 1778-79.)

Freight Bulk contends this discovery sanction was improper

because it did not possess, control, or have custody of

responsive ICI documents and thus should not have been compelled

to produce them. It also attacks the scope of the discovery

order as being too broad. Freight Bulk further asserts that the

sanctions “were overwhelmingly prejudicial” given that the

district court repeatedly referred to the sanctions to “fill

wide gaps” in the trial evidence. (Opening Br. 46.) 10

and Freight Bulk was prohibited from offering evidence of
repayment. In addition, the court held Freight Bulk and its
counsel jointly and severally liable for attorneys’ fees and
expenses in pursuing the motions for sanctions.
10 Freight Bulk’s Opening Brief mentions one other discovery

sanction in passing (deeming Freight Bulk and Vista to be alter
egos). (Opening Br. 41.) Since the alter ego sanction was
approved due to “the magnitude of [Freight Bulk’s discovery]
violations,” (J.A. 1777), it was arguably based, at least in
part, on Freight Bulk’s failure to produce ICI documents. But
(Continued)
25
 We typically review the substance of a district court’s

decision to impose discovery sanctions for abuse of discretion.

Hoyle v. Freightliner, LLC, 650 F.3d 321, 329 (4th Cir. 2011).

We are also obligated, however, to “disregard all errors and

defects that do not affect any party’s substantial rights.”

Fed. R. Civ. P. 61; see also McNanama v. Lukhard, 616 F.2d 727,

730 (4th Cir. 1980) (concluding error in compelling discovery

was harmless); Tagupa v. Bd. of Dirs., 633 F.2d 1309, 1312 (9th

Cir. 1980) (“The harmless error doctrine applies to discovery

orders.”).

We need not wade into the nuances of Freight Bulk’s

arguments because we readily conclude on this record that even

if the district court abused its discretion on this issue, its

error was harmless. Freight Bulk markedly overstates the impact

that this discovery order and resulting sanction had on the

district court’s consideration of the case as a whole. Although

since the failure to produce ICI documents was just one of five
discrete categories of discovery violations leading to this
sanction, it likely would have still been an appropriate
exercise of the district court’s discretion to have imposed it
based on the other violations. In addition, Freight Bulk has
failed to develop any argument in its opening brief discussing
the propriety of this particular sanction. Its analysis solely
involves the ICI documents. As such, Freight Bulk has not
adequately developed any additional issues related to the
propriety of the alter ego sanction for us to review on appeal.
See Fed. R. App. P. 28(a)(8)(A); see also Edwards v. City of
Goldsboro, 178 F.3d 231, 241 n.6 (4th Cir. 1999).

26
the negative inference from the ICI documents informed some of

the factual findings underpinning the district court’s analysis,

each factual finding that noted the negative inference was

supported by more than one piece of additional evidence that had

been admitted at trial. 11 Moreover, by the time the court

explained its legal conclusions as to each of the claims, it had

so cabined the negative inference about the ICI documents that

this evidence was only one of many facts supporting its

analysis. See Flame, 39 F. Supp. 3d at 787-89.

More problematic, Freight Bulk’s argument disregards the

effect of the other negative inferences the district court

relied on throughout its opinion and which arose from a key

aspect of the trial: Baranskiy and his lead counsel’s decision

to abandon their case mid-trial. The district court identified

that event as “[p]erhaps [the] most important in [the] case,”

observing that Baranskiy’s testimony to that point had been “at

times false, inaccurate, contradictory, and untruthful.” Id. at

776. The district court concluded that Baranskiy’s “desertion”

prejudiced Flame and Glory Wealth, and found that had Baranskiy

For example, although the district court noted the non-
11

production of ICI documents showing when it became insolvent,
testimony at trial supported an insolvency “as early as June 30,
2008” and “no later than mid-September,” which also allowed the
district court to make its ultimate finding “that ICI’s
insolvency began in July 2008 and continued through October 2008
and thereafter.” Flame, 39 F. Supp. 3d at 777.

27
continued to testify, “his testimony would have been

substantially against his own interests in relation to” Vista,

Freight Bulk, and ICI. Id. The district court then relied on

that negative inference throughout its factual findings and

legal analysis. E.g., id. at 778, 779, 787-88, and 789. By the

district court’s own indication, these negative inferences were

considerably more damaging to Freight Bulk than the negative

inference created by the document discovery violation contested

on appeal.

Based on the totality of the record, even if we assume that

the district court erred in sanctioning Freight Bulk for failing

to produce ICI documents, that error did not substantially

affect the judgment. See Taylor v. Va. Union Univ., 193 F.3d

219, 235 (4th Cir. 1999) (en banc) (“In order to conclude the

district court’s assumed evidentiary errors did not affect [the

judgment], and therefore were harmless, ‘we need only be able to

say with fair assurance, after pondering all that happened

without stripping the erroneous action from the whole, that the

judgment was not substantially swayed by the error[s].’”),

abrogated on other grounds by, Desert Palace Inc. v. Costa, 539

U.S. 90 (2003). Accordingly, we reject Freight Bulk’s claim of

error.

28
 D. Sufficiency of the Evidence

Freight Bulk next claims the evidence is insufficient to

support the judgment in favor of Flame and Glory Wealth. It

contends that the hallmarks for establishing alter ego liability

are missing as between ICI, Vista, and Freight Bulk. 12 Freight

Bulk further posits that the evidence did not establish the

requisite fraud to support the fraudulent conveyance claim, but

rather reflected legitimate business transactions. Neither

argument has merit.

When evaluating the sufficiency of the evidence after a

bench trial, we review the district court’s factual findings for

clear error and its legal conclusions de novo. Universal

Furniture Int’l, Inc. v. Collezione Europa USA, Inc., 618 F.3d

417, 427 (4th Cir. 2010).

1. Alter Ego

Although the corporate form ordinarily prohibits one entity

from being liable for the acts of a separate, though related,

entity, courts will pierce the corporate veil in “extraordinary

circumstances,” such as when the corporate form is being used

for wrongful purposes. Vitol, 708 F.3d at 543-44. The standard

for piercing the corporate veil is high, but its purpose is to

12As noted above, the alter ego analysis here is a two-step
process showing Vista operated as an alter ego of ICI and that
Freight Bulk is an alter ego of Vista.

29
“achieve an equitable result” by “focus[ing] on reality and not

form, on how the corporation operated and the individual

defendant’s relationship to that operation.” Id. 13

Freight Bulk first contends that the district court erred

in holding that ICI and Vista were alter egos. It points to the

alter ego analysis in Vitol – wherein we concluded the evidence

was insufficient to allege an alter ego claim – and maintains

that certain allegations here were identical to, and in some

cases less than, the allegations in Vitol. However, because

numerous factors can support the conclusion that corporations

are alter egos, the inquiry is fact-intensive and specific facts

may be relevant in one case and irrelevant in another. See Ost-

West-Handel, 160 F.3d at 174 (“Such a determination is to be

made on a case-by-case basis.”). To that end, Freight Bulk’s

focus on how the factors in this case align with those in Vitol

is misplaced. The relevant inquiry is not whether any

particular factor was present, but whether the totality of the

evidence established during the trial demonstrated that ICI and

Vista were alter egos of each other.

13 The parties do not dispute that federal common law
applies to this analysis. See Ost-West-Handel, 160 F.3d at 174
(“[I]n an admiralty case, a court applies federal common law and
can look to state law in situations where there is no admiralty
rule on point.”).

30
 On that point, the district court applied the proper legal

standards, relied on factors we have previously identified as

relevant, and concluded that the evidence supported an alter ego

finding. The factors considered by the district court included

ICI’s insolvency; Baranskiy’s siphoning of funds; the failure of

ICI, Vista, and Palmira Group companies to observe corporate

formalities and maintain corporate records; that Baranskiy

controlled the acts of specific Vista officers as well as Vista

and Palmira Group companies as a whole; and that ICI and Vista

had some shared ownership and employees. See Vitol, 708 F.3d at

544 (listing these factors as indicative of alter ego

corporations).

Freight Bulk does not dispute most of these factual

findings, and the few it does challenge were not clearly

erroneous. For example, Freight Bulk points to Baranskiy’s

trial testimony to assert that ICI and Vista had only a

negligible overlap in employees. But the district court did not

find Baranskiy’s testimony to be credible. Flame, 39 F. Supp.

3d at 776. Moreover, the district court’s finding that ICI and

Vista “shared the same employees performing substantially the

same tasks” relied on four named management employees plus

unnamed “others.” Id. at 780. As the court’s analysis

reflects, the significant factor underpinning its finding on

this point was not the percentage of overall shared employees,

31
but rather their roles and fluidity between ICI, Vista, and the

other Palmira Group affiliates (including Freight Bulk). Id.

This finding was an appropriate one to make under the record

evidence and to be considered as part of the district court’s

alter ego analysis.

Similarly, Freight Bulk asserts the district court errantly

found that Baranskiy’s “working at [his] father’s company [made

him ICI’s] alter ego.” (Opening Br. 49.) Yet again, Freight

Bulk mischaracterizes the basis for the district court’s

finding, which was not based on Baranskiy’s status as an

employee of both ICI and Vista. Instead, the court’s conclusion

followed a detailed explanation of Baranskiy’s specific conduct

as a conduit for cash between ICI and Vista. See Flame, 39 F.

Supp. 3d at 776-83.

Freight Bulk also challenges the second step of the

district court’s analysis – i.e., its conclusion that Freight

Bulk and Vista were alter egos. Freight Bulk contends that “as

a matter of law” they are not. (Opening Br. 50.) We reject

this argument for two reasons, either of which would be

sufficient on its own. First, one of the sanctions for Freight

Bulk’s cumulative discovery violations was the finding that

Freight Bulk and Vista are “alter egos of one another.” Id. at

773. For the reasons discussed in footnote 10, that sanction

stands. As such, the district court could properly rely on it

32
at trial. See Fed. R. Civ. P. 37(b)(2)(A)(i) (stating that a

proper sanction for discovery violations is “directing that . .

. designated facts be taken as established for purposes of the

action”).

Second, and quite apart from the sanction-based finding,

the evidence fully supports the district court’s conclusion.

The trial record established, among other things, Baranskiy’s

ownership and control of both entities; that officers do as

Baranskiy directs rather than exercising independent decision

making; that Freight Bulk is undercapitalized; that funds

between Freight Bulk and Vista are intermingled amongst

themselves and other Palmira Group entities; that Baranskiy’s

companies fail to observe corporate formalities and maintain

proper records; that they share office space; and that dealings

are not conducted at arm’s length.

Freight Bulk’s limited challenges to these findings again

minimize Baranskiy’s conduct and attack the court’s findings as

being based solely on his ownership of both Freight Bulk and

Vista. Certainly not all corporations with a common owner are

alter egos, but neither can a corporation escape alter ego

liability solely on the basis of being a separate, formal entity

sharing the same owner. Where, as here, the evidence shows a

common owner who fails to observe corporate formalities and

often comingles funds to avoid legal obligations, it is not

33
error to treat the entities as one. E.g., De Witt Truck

Brokers, Inc. v. W. Ray Flemming Fruit Co., 540 F.2d 681, 685

(4th Cir. 1976) (“[T]he mere fact that all or almost all of the

corporate stock is owned by one individual . . . will not afford

sufficient grounds for disregarding corporateness. But when

substantial ownership of all the stock of a corporation in a

single individual is combined with other factors clearly

supporting disregard of the corporate fiction on grounds of

fundamental equity and fairness, courts have experienced ‘little

difficulty’ and have shown no hesitancy in applying what is

described as the ‘alter ego’ or ‘instrumentality’ theory in

order to cast aside the corporate shield[.]”).

Freight Bulk also mistakenly asserts that it cannot, as a

matter of law, have been ICI’s alter ego because it was

established years after ICI’s demise. This argument overlooks

the requisite causal link between the entities through Vista.

Freight Bulk does not deny that ICI and Vista were in existence

at the same time. Since those two entities were alter egos,

they are liable for each other’s debts. See Keffer v. H.K.

Porter Co., Inc., 872 F.2d 60, 65 (4th Cir. 1989) (describing

the effect of piercing the corporate veil). Similarly, because

Vista and Freight Bulk are alter egos, they can be responsible

34
for each other’s debts. 14 In short, Freight Bulk is liable for

ICI’s liabilities through Vista.

The district court properly applied our case law regarding

alter ego liability to the facts presented. Our conclusion in a

prior case applies equally here: “[T]his case patently presents

a blending of the very factors which courts have regarded as

justifying a disregard of the corporate entity in furtherance of

basic and fundamental fairness.” Keffer, 872 F.2d at 65.

2. Fraudulent Conveyance

Freight Bulk also raises multiple challenges to the

district court’s conclusion that ICI fraudulently conveyed

assets to the defendants and related entities to avoid its

creditors. Given no federal admiralty rules govern such a

claim, the district court appropriately looked to Virginia law.

See Ost-West-Handel, 160 F.3d at 174; see also supra n.7

(observing that Freight Bulk failed to preserve any argument

that the district court should not have looked to Virginia

As part of its argument, Freight Bulk selectively
14

characterizes the Supreme Court’s statement in Swift that the
plaintiff could not pursue alter ego liability against a
particular defendant since it came into existence after the
underlying cause of action accrued. Significantly, however, the
Supreme Court noted that “apart from any transfer of assets by
[the originating defendant to an alleged alter ego company], the
latter company could not be held personally liable on an alter
ego theory.” Swift, 339 U.S. at 689 n.4 (emphasis added).
Here, Flame and Glory Wealth alleged a transfer of assets, so
that principle does not apply.

35
fraudulent transfer principles). The applicable Virginia

statute treats as void any transfer of property “given with

intent to delay, hinder or defraud creditors, purchasers or

other persons of or from what they are or may be lawfully

entitled to[.]” Va. Code § 55-80.

“In a suit to set aside a fraudulent conveyance, proof of

the fraudulent intent must be ‘clear, cogent and convincing.’”

Fox Rest Assocs., L.P. v. Little, 717 S.E.2d 126, 132 (Va.

2011). However, because of the difficulty of establishing

fraudulent intent, Virginia courts have traditionally relied on

certain presumptions, known as “badges of fraud.” Id. These

“badges of fraud” include: the relationship of the parties, the

grantor’s insolvency, pursuit of the grantor by creditors at the

time of the transfer, want of consideration, retention of the

property by the grantor, fraudulent incurrence of indebtedness

after the conveyance, gross inadequacy of price, and lack of

security. Id. at 131-32; 9A Michie’s Jurisprudence of Virginia

& West Virginia §§ 12, 15 (2015). “Once a party has introduced

evidence to establish a badge of fraud, a prima facie case of

fraudulent conveyance is established[, and] the burden shifts

[so that] the defendant must establish the bona fides of the

transaction.” Fox Rest Assocs., 717 S.E.2d at 132.

At the outset, Freight Bulk asserts the district court

inappropriately relied on adverse inferences in the absence of

36
evidence supporting Flame and Glory Wealth’s claim. While

Freight Bulk refers to “adverse inferences” in the plural, we

note again that its prior challenge was only to the negative

inference drawn from the failure to produce ICI documents, not

from the district court’s additional inferences arising from

Baranskiy’s trial conduct. Plus, we have already held that any

error on this front was harmless. As to the inference arising

from trial, the district court acted within its discretion in

finding that any additional testimony from Baranskiy “would have

been detrimental to [Freight Bulk’s] positions.” Flame, 39 F.

Supp. 3d at 789; see also Baxter v. Palmigiano, 425 U.S. 308,

318 (1976) (noting, in the context of the Fifth Amendment’s

privilege against self-incrimination, that a court may draw

“adverse inferences against parties to civil actions when they

refuse to testify in response to probative evidence offered

against them”); Brice v. Nkaru, 220 F.3d 233, 240 & n.9 (4th

Cir. 2000) (discussing limitations on when an adverse inference

can be made in a civil trial as a result of an opposing party’s

failure to testify or missing testimony, none of which are

applicable here); Streber v. Comm’r, 138 F.3d 216, 221-22 (5th

Cir. 1998) (“In general, a court may draw a negative inference

from a party’s failure to produce a witness ‘whose testimony

would elucidate the transaction.’” (quoting Graves v. United

States, 150 U.S. 118, 121 (1893)).

37
 Next, Freight Bulk contends the evidence did not show that

ICI transferred the charter for the M/V HARMONY FALCON to Vista,

but rather that Vista simply entered into its own charter after

ICI went bankrupt. The district court ably described the record

evidence supporting its finding to the contrary. That evidence

included proof that ICI and Vista both hid Vista’s assumption of

the charter; that Vista “paid [the] same charter rate for the

same ship and route and cargo [as ICI had contracted for]

despite the drop in shipping rates which [had] occurred”; that a

subsidiary of ICI paid bunker rates for the charter Vista

fulfilled; that Vista did not give ICI any consideration for the

transaction; and that Vista “made about $1.7 million profit for

the charter of the HARMONY FALCON, which sum ICI would have been

entitled” to collect and apply to its debts. Flame, 39 F. Supp.

3d at 777-78. As the district court concluded, these facts are

the very badges of fraud Virginia courts have indicated give

rise to a prima facie case of fraudulent transfer. Id. at 785,

789. And Freight Bulk failed to rebut that presumption with

evidence establishing the bona fides of the transaction.

Freight Bulk also contends Flame and Glory Wealth failed to

establish fraud with respect to $1.58 million in payments ICI

made to Baranskiy that it claims were commissions. The document

Freight Bulk points to as proof for this position is an

untitled, undated sheet of paper containing columns listing

38
clients and corresponding numbers without any context. We

cannot say on the basis of this document that the district court

clearly erred in rejecting Freight Bulk’s assertion as to its

meaning, particularly given the lack of credible corroborating

testimony. Indeed, Baranskiy’s testimony was contradictory

throughout the duration of the case, including with respect to

explaining money he received from ICI and money he used to

capitalize Vista. As such, the district court did not clearly

err in finding that these payments were actually payments ICI

made to capitalize Vista.

As a final argument, Freight Bulk asserts that, at most,

Flame and Glory Wealth established two discrete fraudulent

transfers (the M/V HARMONY FALCON charter and $1.58 million

cash) totaling only $3.28 million. As such, it contends the

district court erred in holding that Freight Bulk was liable for

the total amount of Flame and Glory Wealth’s judgments against

ICI, which were in the neighborhood of $60 million. Relatedly,

Freight Bulk asserts that the district court should have capped

Flame and Glory Wealth’s recovery at $3.28 million rather than

distributing the entire $8.3 million obtained from the sale of

the M/V CAPE VIEWER.

This argument fails for two reasons. First, alter ego

liability made Freight Bulk jointly and severally liable for the

entirety of Flame and Glory Wealth’s judgments against ICI.

39
Thus, even if Freight Bulk were correct as to the fraudulent

conveyance claim, it would still not be entitled to a different

result because of the district court’s judgment on that issue.

Swift, 339 U.S. at 689 n.4 (observing that if plaintiffs

succeeded on a theory of alter ego, then the issue of fraudulent

transfer would be irrelevant because they would be afforded

relief under those standards). Second, the premise of Freight

Bulk’s argument - that the district court only found two

fraudulent conveyances - is incorrect. To the contrary, the

district court found multiple fraudulent conveyances between

ICI’s alter egos, making Freight Bulk liable for the entire

fraud perpetrated by ICI through Baranskiy and his compatriots.

While its holding identified the charter of the M/V HARMONY

FALCON in particular, it also identified the transfer of other

“assets,” “substantial funds,” and “ostensible ‘loans,’ which

are in reality security—and interest-free transfers of funds[.]”

Flame, 39 F. Supp. 3d at 789. In addition, the district court

relied on the discovery sanction – unchallenged on appeal – that

Vista provided funds to Sea Traffic, which were “then

transferred to [Freight Bulk] for the purchase of the CAPE

VIEWER,” in a “sham transaction used to avoid creditors.” Id.

at 781.

40
 For these reasons, we conclude sufficient evidence supports

the judgment against Freight Bulk on the fraudulent conveyance

claim.

E. Judicial Bias

Lastly, Freight Bulk contends the district court

demonstrated a personal bias against Ukrainians, which tainted

the entire proceeding and requires reversal. 15 In support,

Freight Bulk points to nine statements by the district court

that purportedly show this prejudice.

To be sure, “[a] fair trial in a fair tribunal is a basic

requirement of due process.” Caperton v. A.T. Massey Coal Co.,

556 U.S. 868, 876 (2009). To protect the right to be heard by

an impartial jurist, Congress has authorized parties to timely

file an “affidavit that the judge before whom the matter is

pending has a personal bias or prejudice either against him or

in favor of any adverse party,” and upon such a showing, “such

judge shall proceed no further therein, but another judge shall

be assigned to hear such proceeding.” 28 U.S.C. § 144. This

is, of course, in addition to the judge’s own duty to consider

whether he must disqualify himself “in any proceeding in which

15Alternatively, Freight Bulk asserts the district court’s
bias requires reassignment to a different judge in the event of
a remand. Because we have not found any other reversible error,
we only consider the remaining portion of Freight Bulk’s
argument.

41
his impartiality might reasonably be questioned.” 28 U.S.C. §

455(a).

At no time in the proceedings below did Freight Bulk

challenge the district court judge’s impartiality to hear the

case. Accordingly, it has failed to preserve this claim for

appellate review. See In re Under Seal, 749 F.3d at 285-86

(discussing the consequences of failing to preserve a claim for

appeal); see also Corti v. Storage Tech. Corp., 304 F.3d 336,

343 (4th Cir. 2002) (Niemeyer, J., concurring) (“[I]t remains

the law of this circuit that when a party to a civil action

fails to raise a point at trial, that party waives review of the

issue unless there are exceptional or extraordinary

circumstances justifying review.”). Having reviewed Freight

Bulk’s arguments and paid particular attention to the exemplars

it provided in the transcripts, we discern no exceptional or

extraordinary circumstances in this case that would justify

reviewing it on the merits. 16

16 Freight Bulk cites an out-of-circuit case to support its
view that this Court should not deem its argument waived. See
United States v. Kaba, 480 F.3d 152 (2d Cir. 2007). This
criminal sentencing case did not involve an allegation of
evidence of a judge’s personal bias or prejudice, but rather a
claim that the judge considered the defendant’s nationality in
deciding an appropriate sentence. Id. at 156-58. As such, it
is inapposite.
Moreover, even assuming Freight Bulk preserved its
argument, we find no error. We have reviewed the statements
cited by Freight Bulk and conclude it has selectively quoted
(Continued)
42
 III.

For the reasons detailed above, the judgment of the

district court in favor of Flame and Glory Wealth is

AFFIRMED.

only parts of the record and taken the comments far out of
context. Viewed in full, there is nothing in the district
court’s commentary to support such a claim.

43