15‐97
Hapag‐Lloyd Aktiengesellschaft v. U.S. Oil Trading LLC
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
______________
August Term, 2015
(Argued: November 17, 2015 Decided: February 24, 2016)
Docket No. 15‐97
HAPAG‐LLOYD AKTIENGESELLSCHAFT,
Plaintiff‐Appellee,
–v.–
U.S. OIL TRADING LLC,
Defendant‐Appellant,
O.W. BUNKER GERMANY GMBH,
O.W. BUNKER & TRADING A/S,
O.W. BUNKER USA, INC., ING BANK, N.V.,
Defendants.*
______________
Before:
KEARSE, STRAUB, and WESLEY, Circuit Judges.
The Clerk of the Court is directed to amend the official caption
*
as noted above.
Interlocutory appeal from an injunction entered by the
United States District Court for the Southern District of New
York (Valerie E. Caproni, Judge). Plaintiff‐Appellee Hapag‐Lloyd
Aktiengesellschaft filed an action in the District Court,
interpleading a number of parties for obligations arising out of
the purchase of fuel bunkers for its ships. On December 19, 2014,
the District Court entered an interpleader injunction and, on
December 30, denied Defendant‐Appellant U.S. Oil Trading
LLC’s motion to vacate or modify the injunction. Defendant‐
Appellant now appeals on the grounds that, inter alia, the
District Court lacked subject matter jurisdiction and the
injunction is overbroad. We disagree as to jurisdiction but
conclude that the District Court did not properly conduct the
analysis with respect to the scope of the injunction. Accordingly,
we AFFIRM the District Court’s orders in part but REMAND the
case, pursuant to United States v. Jacobson, for a determination of
the proper scope of the injunction.
______________
JOHN R. KEOUGH III (Casey D. Burlage, Corey R.
Greenwald, George G. Cornell, on the brief), Clyde & Co US LLP,
New York, NY, for Defendant‐Appellant.
PETER J. GUTOWSKI (Michael Fernandez, Gina M. Venezia,
on the brief), Freehill Hogan & Mahar LLP, New York, NY, for
Plaintiff‐Appellee.
James H. Hohenstein, James H. Power, Marie E. Larsen,
Holland & Knight LLP, New York, NY, for Amici Curiae APL Co.
Pte Ltd., American President Lines, Ltd., Baere Maritime LLC, Bonny
Gas Transport Ltd., Clearlake Shipping Pte Ltd., Conti 149 Conti
Guinea, MT Cape Bird Tankschiffahrts GmbH & Co KG, Sigma
Tankers Inc, Star Tankers Inc, and UPT Pool Ltd.
1
William F. Dougherty, Keith W. Heard, Michael J. Walsh,
Burke & Parsons, New York, NY, for Amici Curiae 1372 Tanker
Corporation, OSG Ship Management, Inc., SK Shipping Co., Ltd., and
SK B&T Pte. Ltd.
Andrea Pincus, Reed Smith LLP, New York, NY, for
Amicus Curiae SHV Gas Supply & Risk Management SAS.
Kerri M. D’Ambrosio, George M. Chalos, Chalos & Co.,
P.C., Oyster Bay, NY, for Amicus Curiae Exmar Shipping BVBA.1
______________
WESLEY, Circuit Judge:
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
1 All amici curiae are referred to collectively as the “Vessel
Interests.”
2
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 October 2014, Hapag‐Lloyd placed orders with O.W.
Germany for bunkers to be supplied in Tacoma, Washington, to
the three vessels in question; the fuel was actually delivered to
the vessels by U.S. Oil Trading LLC (“USOT”).4 One month later,
O.W. Germany’s parent company, O.W. Denmark, filed for
bankruptcy—followed by similar bankruptcy filings by affiliated
2 Hapag‐Lloyd owns the M/V Sofia Express and is the time charterer of
the M/V Seaspan Hamburg and the M/V Santa Roberta, but the nature of
its interest in each vessel is not significant to this case.
3 “Bunker fuel,” or even commonly just “bunker,” is the term for fuel
oil used to power modern vessels; it derives from the tank in which the
fuel is stored, whose name is itself a holdover term from coal bunkers
used in early steam vessels. See generally Garanti Finansal Kiralama A.S.
v. Aqua Marine & Trading Inc.. 697 F.3d 59, 62 (2d Cir. 2012); In re Sea
Bridge Marine, Inc., 412 B.R. 868, 871 n.1 (Bankr. E.D. La. 2008).
4 USOT informs us in briefing that it entered into contracts with O.W.
Bunker & Trading A/S (“O.W. Denmark”) to provide bunkers to the
vessels, the delivery of which occurred on various dates in October
2014. The vessels accepted delivery and stamped the bunker delivery
receipts. USOT then issued invoices to O.W. Denmark in the amounts
of $1,507,408.99 (M/V Seaspan Hamburg), $1,315,507.80 (M/V Sofia
Express), and $1,481,860.28 (M/V Santa Roberta). Hapag‐Lloyd alleges it
has received invoices from O.W. Germany for each of the three orders
in the amounts of $1,516,809.83 (M/V Seaspan Hamburg), $1,318,668.24
(M/V Sofia Express), and $1,495,860.94 (M/V Santa Roberta).
3
entities, including some in the United States Bankruptcy Court
for the District of Connecticut.5 As a result, in this action
multiple parties assert claims to payment by Hapag‐Lloyd for
the bunkers—some sounding in contract (the O.W. Entities), and
others sounding in statutory maritime liens (the O.W. Entities
and USOT).6
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
5 The affiliated entities in the bankruptcy proceedings in Connecticut
are O.W. Bunker Holding North America Inc., O.W. Bunker North
American Inc., and O.W. Bunker USA Inc. See In re O.W. Bunker
Holding N. Am. Inc. et al., No. 14‐51720 (JAM) (Bankr. D. Conn. filed
Nov. 13, 2014). None of these entities were initially named in this
action, but O.W. Bunker USA Inc. (“O.W. USA”) has since been added
as a defendant through an amended complaint. See infra note 6. We
refer to O.W. Germany, O.W. Denmark, and O.W. USA collectively as
“the O.W. Entities.”
6 The initial complaint named both Crédit Agricole S.A. and ING Bank,
N.V., as alleged assignees or creditors of various claimants. However,
the parties have shifted somewhat since USOT took its appeal. On July
14, 2015, Hapag‐Lloyd filed an amended complaint, adding O.W. USA
as a defendant and replacing Crédit Agricole S.A. with Crédit Agricole
CIB, which then executed a stipulation dismissing the case against
them. See First Am. Cmpl. for Interpleader and Declaratory J., Hapag‐
Lloyd Aktiengesellschaft v. U.S. Oil Trading LLC et al., No. 14‐cv‐9949
(S.D.N.Y. July 14, 2015), ECF No. 84; Stipulation and Notice of
Dismissal of Crédit Agricole CIB, Hapag‐Lloyd, No. 14‐cv‐9949
(S.D.N.Y. Sept. 15, 2015), ECF No. 115. ING Bank remains a named
defendant. We have amended the caption in the instant appeal
accordingly, but the change in non‐appealing players has no
significance to our decision today.
4
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.
The District Court then granted Hapag‐Lloyd’s motion
and enjoined the named defendants from
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.
7 See U.S. Oil Trading LLC v. M/V Vienna Express, No. 3:14‐cv‐05982
(W.D. Wash. filed Dec. 17, 2014); U.S. Oil Trading LLC v. M/V Santa
Roberta, No. 2:14‐cv‐09662 (C.D. Cal. filed Dec. 17, 2014).
5
Order at 2, Hapag‐Lloyd, No. 14‐cv‐9949 (S.D.N.Y. Dec. 19, 2014),
ECF No. 5. The District Court then ordered Hapag‐Lloyd to post
an initial bond, with a six‐percent increase if the litigation lasted
longer than a year. Id. at 3.8 That same day, the District Court
directed the parties to submit briefs concerning the propriety of
Hapag‐Lloyd’s interpleader action. See Order at 4, Hapag‐Lloyd,
No. 14‐cv‐9949 (S.D.N.Y. Dec. 19, 2014), ECF No. 8. USOT later
appeared and filed a motion to vacate or modify the injunction,
which the District Court denied. See Order, Hapag‐Lloyd, No. 14‐
cv‐9949 (S.D.N.Y. Dec. 30, 2014), ECF No. 17.9
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
8 Hapag‐Lloyd posted bond in the following amounts with respect to
each vessel: $1,607,818.41 (M/V Seaspan Hamburg); $1,397,788.33 (M/V
Sofia Express); and $1,507,771.89 (M/V Santa Roberta). See Underwriter’s
Interpleader and Declaratory J. Surety Bond, Hapag‐Lloyd, No. 14‐cv‐
9949 (S.D.N.Y. Dec. 22, 2014), ECF No. 9. These amounts exceed the
costs for the fuel bunkers invoiced to the various parties. See supra note
4.
9 Accordingly, USOT’s arrest warrants in the other districts have never
been executed. One of those actions has been transferred to the
Southern District of New York, see U.S. Oil Trading, LLC v. M/V Vienna
Express, No. 14‐5982 RJB, 2015 WL 4714838, at *11 (W.D. Wash. Aug. 7,
2015), and the other has been stayed pending the resolution of this
appeal, see Order Removing Case from Active Caseload by Virtue of
Stay at 1, U.S. Oil Trading v. M/V Santa Roberta, No. CV 14‐09662‐AB
(SSx) (C.D. Cal. June 29, 2015), ECF No. 36.
10 “[E]very federal appellate court has a special obligation to ‘satisfy
itself not only of its own jurisdiction, but also that of the lower courts
in a cause under review,’ even though the parties are prepared to
6
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.
concede it.” Bender v. Williamsport Area Sch. Dist., 475 U.S. 534, 541
(1986) (quoting Mitchell v. Maurer, 293 U.S. 237, 244 (1934)). “‘And if
the record discloses that the lower court was without jurisdiction,’” the
appellate court has “‘jurisdiction on appeal, not of the merits but
merely for the purpose of correcting the error of the lower court in
entertaining the suit.’” Id. (quoting United States v. Corrick, 298 U.S.
435, 440 (1936)). Since we have jurisdiction over this appeal from the
injunction under 28 U.S.C. § 1292(a)(1), we must address the subject
matter jurisdiction of the District Court even though its later order
ruling on its jurisdiction is not technically before us.
11 On the same day, we granted a motion by the Vessel Interests—
interpleader plaintiffs in related proceedings before the District
Court—to participate as amici curiae. See Order, Hapag‐Lloyd, No. 15‐97
(2d Cir. Oct. 26, 2015), ECF No. 136. Amici Vessel Interests then also
filed a letter brief in response to our supplemental briefing Order. See
Mem. Br., Hapag‐Lloyd, No. 15‐97 (2d Cir. Nov. 2, 2015), ECF No. 144.
However, non‐intervenor amici curiae are not “parties” to this appeal,
cf. Wilder v. Bernstein, 965 F.2d 1196, 1203 (2d Cir. 1992) (citing Morales
v. Turman, 820 F.2d 728, 732 (5th Cir. 1987)), and therefore were neither
ordered nor entitled to participate in the supplemental briefing. Thus,
we consider only the Vessel Interests’ initial brief as amici curiae—and
not their letter brief—on this appeal.
7
DISCUSSION12
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
12 If the jurisdictional issue is presented on the face of the complaint,
we accept as true all of the complaint’s material factual allegations,
along with the reasonable inferences that can be drawn from them, but
if the issue is presented on the basis of controverting evidence outside
of the complaint, we review the district court’s factual findings for
clear error and its rulings of law de novo. See, e.g., Tandon v. Captain’s
Cove Marina of Bridgeport, Inc., 752 F.3d 239, 243 (2d Cir. 2014). “For
purposes of ruling on a motion to dismiss for want of standing, both
the trial and reviewing courts must accept as true all material
allegations of the complaint, and must construe the complaint in favor
of the complaining party.” Warth v. Seldin, 422 U.S. 490, 501 (1975); see
also Lujan v. Defenders of Wildlife, 504 U.S 555, 561 (1992) (“The party
invoking federal jurisdiction bears the burden of establishing
[standing] . . . in the same way as any other matter on which the
plaintiff bears the burden of proof, i.e., with the same manner and
degree of evidence required at the successive stages of the litigation.”).
With respect to a district court’s grant of injunctive relief pursuant to
28 U.S.C. § 2361, we review for abuse of discretion. See Nat’l Union Fire
Ins. Co. of Pittsburgh, Pa. v. Karp, 108 F.3d 17, 23 (2d Cir. 1997).
8
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 co‐
defendants 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 (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
For the purposes of § 31342, bunkers are “necessaries.” 1 THOMAS J.
13
SCHOENBAUM, ADMIRALTY & MARITIME LAW § 9‐3 (5th ed. 2014) (citing
Gulf Oil Trading Co. v. M/V Caribe Mar, 757 F.2d 743 (5th Cir. 1985)).
9
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).
14 Concern over double recovery was similarly addressed in a non‐
interpleader case cited by both parties, Central Hudson Gas & Electric
Corp. v. Empresa Naviera Santa S.A., 56 F.3d 359 (2d Cir. 1995). In that
case, we concluded in rem and in personam claims were distinct, and
thus, a judgment in an in rem action was not a res judicata bar to a
subsequent in personam action—in part because plaintiff “did not seek
duplicative or additional damages” and instead in essence sought
merely to treat the vessel operator as jointly liable with the vessel
itself. Id. at 367. It is also worth noting that the considerations
underlying whether a claim is precluded by res judicata—a judicial
doctrine—are distinct from the considerations underlying the federal
interpleader statutes, and thus Central Hudson’s analysis is of limited
value in this case.
The amounts alleged to be owed differ slightly between each
15
claimant, because the contractual prices in the interlocking chain seem
to incorporate some level of profit. See supra note 4. This is not fatal to
an interpleader claim; the statute expressly applies to “titles or claims
of the conflicting claimants” that “are not identical.” 28 U.S.C.
§ 1335(b).
10
The interconnection of the claims is evident. To recover
under a maritime lien, USOT must demonstrate that it provided
necessaries “on the order of the owner or a person authorized by
the owner.” 46 U.S.C. § 31342(a); see also id. § 31341 (listing
persons “presumed to have authority to procure necessaries for
a vessel”). We have no reason at this time to test USOT’s
assertion that an O.W. entity had the authority the lien statute
requires, but it is difficult to see how USOT could prove
authorization without reference to the chain of contractual
relationships beginning with Hapag‐Lloyd and passing through
the O.W. Entities to itself. This chain of contracts is, of course,
also the source of at least some of the claims by the O.W.
Entities—others of which are competing in rem liens asserted
under the same statutory entitlement claimed by USOT.16
USOT attempts to distinguish the entitlements by arguing
that a payment by Hapag‐Lloyd to O.W. Germany under its
contracts would not discharge the maritime lien held by USOT.
Indeed, that may be true.17 But an interpleader action does not
See Verified Answer, Interpleader Claims, and Countercls. of O.W.
16
Bunker Ger. GmbH at 14, ¶ 83, Hapag‐Lloyd, No. 14‐cv‐9949 (S.D.N.Y.
July 17, 2015), ECF No. 93; Answer, Countercls. and Cross‐Claim of
ING Bank N.V. to the First Am. Cmpl. for Interpleader and
Declaratory J. at 11–12, ¶¶ 6–13, Hapag‐Lloyd, No. 14‐cv‐9949 (S.D.N.Y.
July 28, 2015), ECF No. 98.
17 USOT’s maritime lien certainly would be extinguished if USOT
received payment from O.W. Denmark pursuant to its invoices. See
Mullane v. Chambers, 438 F.3d 132, 138 (1st Cir. 2006) (after repayment,
“any maritime lien had been extinguished by satisfaction”); see also
World Fuel Servs., Inc. v. Magdalena Green M/V, 464 F. App’x 339, 341
(5th Cir. 2012) (per curiam) (same). In such a case, USOT could not
recover both through its contract with O.W. Denmark and through its
lien on Hapag‐Lloyd’s vessels, thereby further demonstrating that the
11
abrogate USOT’s right to be paid (if it has one); it merely
requires USOT to litigate its claim in the context of the same
proceeding as competing claimants, so that the District Court
can minimize or eliminate the risk of double payment to the
extent the governing law permits.18 Adjudication of Hapag‐
Lloyd’s obligation to pay for the fuel bunkers involves
inextricably intertwined claims, and interpleader jurisdiction is
proper under the broad and remedial nature of § 1335.19
entitlements arising from the maritime lien and the interlocking
contracts are inextricable.
18 The various relationships in this case may, for example, require the
District Court to untangle complicated questions of subrogation and
set‐offs among the parties as it determines payment obligations. See
Pearlman v. Reliance Ins. Co., 371 U.S. 132, 136–37, 136 n.12 (1962)
(discussing the doctrine of subrogation); Am. Fid. Co. v. Nat’l City Bank
of Evansville, 266 F.2d 910, 914 (D.C. Cir. 1959) (discussing equitable
liens as a form of subrogation in the context of material suppliers).
Because of the complexity of the questions presented by these
competing claims, the District Court’s interpleader jurisdiction over
the parties and attendant issues meets the goals of efficiency and
fairness motivating the statute.
USOT’s second argument as to interpleader jurisdiction—that the
19
amount of the bond is insufficient under § 1335—patently fails. While
USOT’s arguments focus exclusively on the statutory clause that refers
to deposit of the money or amount of obligation itself, it ignores that
the statute alternatively permits posting of a bond “in such amount and
with such surety as the court or judge may deem proper.” 28 U.S.C.
§ 1335; see also Aetna Cas. & Sur. Co. v. B.B.B. Constr. Corp., 173 F.2d 307,
309 (2d Cir. 1949) (noting that the interpleader statute was expressly
amended to contain the bond as an alternative to payment of a
deposit). The District Court clearly made a determination that the
amount posted was sufficient, and we see no abuse of discretion in its
conclusion. See also supra note 8.
12
USOT also challenges the sufficiency of the District
Court’s in rem jurisdiction.20 However, USOT’s arguments fail
here as well. It relies on cases in which the person possessing the
in rem claim initiates the proceeding without the vessel owner’s
consent, which would necessitate the court obtaining jurisdiction
over the res. See In re Millenium Seacarriers, Inc., 419 F.3d 83, 94
(2d Cir. 2005) (Sotomayor, J.); Dluhos v. Floating & Abandoned
Vessel, 162 F.3d 63, 68–69 (2d Cir. 1998). USOT’s argument—that
both parties’ consent is necessary in cases where the party
initiating suit is the owner of the res that the lienholder seeks to
arrest—relies on cases holding that where a lienholder brings a
claim, both parties’ consent is “sufficient” for a court to exercise
in rem jurisdiction without seizure of the res. E.g., Panaconti
Shipping Co. v. M/V Ypapanti, 865 F.2d 705, 707–08 (5th Cir. 1989).
That is not inconsistent, however, with other cases indicating
that only the owner’s consent is necessary. In rem jurisdiction is
“‘a customary elliptical way of referring to jurisdiction over the
interests of persons in a thing.’” Shaffer v. Heitner, 433 U.S. 186,
207 (1977) (quoting RESTATEMENT (SECOND) OF CONFLICT OF LAWS
§ 56, intro. note (1971)). To obtain jurisdiction over that interest,
a court must either seize the res or obtain the consent of the
owner or other person asserting a right of possession. This
principle is demonstrated by the many cases in which in rem
20 Hapag‐Lloyd argues that USOT conflates subject matter and in rem
jurisdiction, which are distinct. See Mattel, Inc. v. Barbie‐Club.com, 310
F.3d 293, 298 (2d Cir. 2002) (Sotomayor, J.) (distinguishing between
subject matter jurisdiction and in rem jurisdiction). While it is true that
some elements of the arguments overlap, USOT in fact makes two
arguments: first, the amount of the bond is insufficient under § 1335 to
confer subject matter jurisdiction—which we addressed supra note
19—and second, even if it is sufficient under § 1335, it is insufficient to
constitute a substitute res for the vessels themselves, which we address
here.
13
jurisdiction has been held waived without seizure when the
owner appears without contesting jurisdiction. See, e.g., United
States v. Republic Marine, Inc., 829 F.2d 1399, 1402 (7th Cir. 1987);
Cactus Pipe & Supply Co. v. M/V Montmartre, 756 F.2d 1103, 1107–
08 (5th Cir. 1985); cf. Continental Grain Co. v. The FBL‐585, 364
U.S. 19, 22–27 (1960) (construing the owner’s consent as
sufficient for venue transfer of both in personam and in rem
claims). By initiating an interpleader concerning certain in rem
claims and posting adequate security for those claims, Hapag‐
Lloyd consented to the District Court’s jurisdiction over its
interests, which is sufficient to confer jurisdiction. See Cactus
Pipe, 756 F.2d at 1107; Reed v. Steamship Yaka, 307 F.2d 203, 204
(3d Cir. 1962), rev’d on other grounds, 373 U.S 410 (1963).21
Next, USOT contends that the interpleader injunction
issued in this case is in violation of the requirements of 28 U.S.C.
§ 2361.22 USOT argues that § 2361 does not expressly authorize
Similarly, USOT’s argument that the bond is insufficient as a
21
substitute res is unavailing. First, as we have just explained, no res is
necessary when the owner consents; second, USOT’s cited sources deal
with the method by which a vessel’s owner can free it from seizure
through posting a bond and thus have no applicability in a case where
seizure neither occurred nor is required.
22 USOT also argues that service was not by U.S. Marshal and thus
ineffective. Service of process is a question of “practice and procedure”
governed by the Federal Rules of Civil Procedure; statutory
requirements to the contrary were voided by the Rules Enabling Act.
See Henderson v. United States, 517 U.S. 654, 656 (1996); Aisner v. Penn.
Mut. Life Ins. Co., 53 F.3d 1282, 1995 WL 295968, at *2 (5th Cir. 1995)
(per curiam) (unpublished) (“Rule 4 of the Federal Rules of Civil
Procedure supersedes § 2361 to the extent that § 2361 conflicts with the
1983 revisions to Rule 4, which allow any adult non‐party to complete
service in the district in which a claimant resides.”); see also Fed. R. Civ.
P. 22(b) (“An action under [28 U.S.C. §§ 1335, 1397, and 2361] must be
14
an interpleader injunction to extend to foreign suits. While the
statute itself has no extraterritorial reach, federal courts have
long possessed the inherent power to restrain the parties before
them from engaging in suits in foreign jurisdictions. See China
Trade & Dev. Corp. v. M.V. Choong Yong, 837 F.2d 33, 35 (2d Cir.
1987). This Circuit has articulated a test for when such
injunctions are warranted: First, an anti‐foreign‐suit injunction
may be imposed only if the parties are the same and resolution
of the case before the enjoining court is dispositive of the action
to be enjoined; if this threshold is met, the District Court must
then examine five factors:
(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
conducted under these rules.”). As USOT has not argued service was
defective under Federal Rule of Civil Procedure 4, we treat service as
sufficient. See Norton v. Sam’s Club, 145 F.3d 114, 117 (2d Cir. 1998).
USOT makes an additional argument that the injunction was improper
because it prevented USOT from executing arrest orders obtained in
other federal courts. That USOT had obtained arrest orders prior to
entry of the injunction is of no significance—interpleader injunctions
clearly may restrain claimants “from instituting or prosecuting” actions
in another jurisdiction. 28 U.S.C. § 2361 (emphasis added). In any
event, USOT’s arrest actions were not “first filed” because they were
apparently filed later on the same day that Hapag‐Lloyd filed its
interpleader complaint. Moreover, some courts have found
inapplicable the first‐filed rule where filings were made on the same
day, regardless of their order. E.g., Ontel Prods., Inc. v. Project Strategies
Corp., 899 F. Supp. 1144, 1150, 1153 (S.D.N.Y. 1995). But see, e.g., Alden
Corp. v. Eazypower Corp., 294 F. Supp. 2d 233, 235 n.2 (D. Conn. 2003).
15
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
16
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, 135 S. Ct. 793, 798 (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.
Finally, USOT challenges the District Court’s exercise of
personal jurisdiction over it as well as interpleader venue.
However, we conclude that USOT has waived these issues,
excluding them from appellate review in this case. The instances
to which USOT points as asserting its personal jurisdiction
arguments to the District Court are cursory, often one‐sentence
statements, which we have long held are generally insufficient to
preserve an issue for appeal. See Wal‐Mart Stores, Inc. v. Visa
U.S.A., Inc., 396 F.3d 96, 124 n.29 (2d Cir. 2005) (holding that
under established law of the Circuit, a one‐sentence challenge to
a fee award was not sufficient to preserve the issue for appeal).
Similarly, USOT’s purported “objections” to venue at the District
Court are minimal. Though one colloquy at a hearing could
possibly be interpreted to raise the question of venue, we note
from Hapag‐Lloyd’s supplemental briefing and our own review
of the District Court docket that the deadline for motions to
dismiss on the basis of personal jurisdiction and venue passed
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without any submission from USOT. Thus, we decline to decide
these issues for the first—and apparently only—time on appeal.23
CONCLUSION
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.
USOT argues that, even if its arguments were forfeited, we should
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consider them to avoid “manifest injustice.” Magi XXI, Inc. v. Stato della
Città del Vaticano, 714 F.3d 714, 724 (2d Cir. 2013) (internal quotation
marks omitted). As we stated above, USOT had the opportunity to
submit briefing on these issues to the District Court and chose not to
do so. Such a decision bespeaks more waiver than forfeiture, see
Hamilton v. Atlas Turner, Inc., 197 F.3d 58, 61–62 (2d Cir. 1999), which
eliminates our discretion to reach the issue, see Wood v. Milyard, 132 S.
Ct. 1826, 1832 (2012). Even assuming we possessed the discretion, we
generally exercise it when presented with “a question of law” for
which “there is no need for additional factfinding.” Magi XXI, 714 F.3d
at 724 (internal quotation marks omitted). Given the lack of
development of the factual record below, we are not persuaded this
case would present an appropriate vehicle to exercise our discretion in
any event.
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