     08-0838-cv
     ProShipLine, Inc. v. Aspen Infrastructures, Ltd.

1                         UNITED STATES COURT OF APPEALS

2                             FOR THE SECOND CIRCUIT

3                                August Term, 2008

4    (Argued: March 12, 2009                       Decided: October 22, 2009)

5                              Docket No. 08-0838-cv

6                    -------------------------------------

7                                PROSHIPLINE, INC.,

8                               Plaintiff-Appellant,

9                                       - v. -

10                         ASPEN INFRASTRUCTURES, LTD.,

11                              Defendant-Appellee.

12                   -------------------------------------

13   Before:     McLAUGHLIN and SACK, Circuit Judges, and KAPLAN,
14               District Judge.*

15               Appeal from a judgment of the United States District

16   Court for the Southern District of New York.        The district court

17   (Robert W. Sweet, Judge) vacated a maritime attachment,

18   concluding that (1) maritime jurisdiction was absent, (2) both

19   the party that attached the funds and the party that owned the

20   funds were present in another jurisdiction -- the Southern

21   District of Texas, and (3) the party that had sought and secured

22   the attachment abused the ex parte nature of the attachment

23   process.    We disagree with the district court as to the first



           *
            The Honorable Lewis A. Kaplan, of the United States
     District Court for the Southern District of New York, sitting by
     designation.
1    ground for vacatur, but agree with it as to the second, and

2    therefore affirm without reaching the third.

3              Affirmed.

4                               JOHN SULLIVAN (Andrew R. Brown, of
5                               counsel) Hill Rivkins & Hayden LLP, New
6                               York, New York, for Plaintiff-Appellant.

 7                              JOHN ORZEL (Vincent M. DeOrchis, of
 8                              counsel) DeOrchis & Partners, LLP, New
 9                              York, New York, for Defendants-
10                              Appellees.

11   SACK, Circuit Judge:

12             ProShipLine, Inc., the plaintiff-appellant, and EP-

13   Team, Inc., not a party to this proceeding, are engaged in a

14   breach-of-contract dispute with Aspen Infrastructures, Ltd., the

15   defendant-appellee.    What appears to have been a relatively

16   simple matter, however, has metastasized, spreading across

17   several proceedings spanning a variety of districts, states, and

18   continents.   Two separate proceedings related to this dispute are

19   pending in the Southern District of New York.    In one, Aspen

20   secured an ex parte order of maritime attachment against EP-

21   Team's assets.   In the second, ProShipLine sought and secured an

22   ex parte order of attachment against Aspen's assets worth close

23   to two million dollars.    On Aspen's motion, the district court

24   vacated ProShipLine's attachment of Aspen's assets, concluding,

25   inter alia, that both Aspen and ProShipLine are present in the

26   Southern District of Texas.    On appeal in this second case only,

27   ProShipLine challenges the vacatur.    We affirm.




                                       2
1                                 BACKGROUND

2              The Parties

3              The facts underlying this appeal, including those set

4    forth in the district court's Opinion and Order of February 1,

5    2008, see ProShipLine, Inc. v. Aspen Infrastructures, Ltd., 533

6    F. Supp. 2d 422, 424-26 (S.D.N.Y. 2008) ("ProShipLine"), upon

7    which we rely, are uncontested.    Aspen is an Indian corporation

8    associated with Suzlon Energy Ltd. ("Suzlon").      We refer to Aspen

9    and Suzlon collectively as "Aspen."      Aspen manufactures and

10   markets wind turbines -- windmills that convert wind energy into

11   electricity.   It manufactures turbine components in India and

12   then ships them to purchasers in market countries, including the

13   United States, for installation.       Aspen ships these components on

14   ocean-going vessels that it time-charters.      In an attempt to

15   ensure that the vessels are used efficiently when not carrying

16   Aspen products, i.e., to avoid "deadhead" return of empty vessels

17   from market countries to India, Aspen entered into the contract

18   carriage business, soliciting cargos from the market countries

19   with destinations in Asia.

20             On April 9, 2006, as part of this effort, Aspen and EP-

21   Team entered into a "Sales and Logistics Service Agreement," by

22   which EP-Team was appointed as Aspen's general sales and port

23   service agent in the United States.      In connection with this

24   arrangement, EP-Team established ProShipLine -- the appellant

25   here -- to act as Aspen's agent.



                                        3
1               Under the agreement, either party had the right to

2    terminate the "arrangement" on 30 days' notice "without stating

3    any cause" and at "any time during the currency of [the]

4    agreement."    The contract contained a choice-of-law clause

5    providing that it would be construed and enforced in accordance

6    with English law, and a forum selection clause providing that all

7    disputes arising from the agreement would be resolved by

8    arbitration in Singapore.

9               Aspen eventually became dissatisfied with the

10   arrangement.    By email dated July 5, 2007, Aspen informed EP-Team

11   that as of August 1, 2007, Aspen "will have alternate

12   arrangements in place" for its shipping services and that as of

13   that date "Proshipline will [cease] to be our agent[]."    Email

14   from Sanjivv G. Bangad to David Pulk and Neil Johnson (July 5,

15   2007).   By letter to Aspen dated July 6, 2007, EP-Team asserted

16   that the email constituted a "purported termination" of the

17   agreement "in violation of the Services Agreement" and was

18   "actionable by EP-Team."    Letter from Richard A. Lowe to Sanjeev

19   Bangad (July 6, 2007).    By letter dated July 13, 2007, Aspen

20   informed EP-Team that there was "no contract" between Aspen and

21   EP-Team, that the agreement did not purport to appoint EP-Team as

22   the exclusive agent for Aspen in America, and that ProShipLine

23   was "failing to perform in accordance with the agreement or its

24   spirit in any event."    Letter from Christopher Chauncy to

25   Shannon, Gracey, Ratliff and Miller, LLP (July 13, 2007).      By

26   letter dated July 30, 2007, EP-Team told Aspen that "as of

                                       4
1    Midnight July 31, 2007, [EP-Team/ProShipLine will] not be in a

2    position to act in any capacity on behalf of [Aspen]."   Letter

3    from Richard A. Lowe to Christopher Chauncy (July 30, 2007).

4              Procedural History

5              In October 2007, Aspen named EP-Team as a defendant in

6    a proceeding in the Southern District of New York over which

7    Judge Robert W. Sweet was reassigned to preside.   See Aspen

8    Infrastructures Ltd. v. E.P. Team, Inc., No. 07 Civ. 8813

9    (S.D.N.Y. Oct. 12, 2007).   Some two months later, by verified

10   complaint dated December 3, 2007, ProShipLine, without EP-Team,

11   initiated the instant litigation against Aspen, seeking a Writ of

12   Maritime Attachment and Garnishment in the amount of $6,390,000.

13   See Verified Complaint, ProShipLine, Inc. v. Aspen

14   Infrastructures, Ltd., No. 07 Civ. 10969 (S.D.N.Y. Dec. 3, 2007)

15   (Doc. No. 1).   We refer to the former as the "First New York

16   Action" and the latter -- the case now before us on appeal -- as

17   the "Second New York Action."

18             On December 4, 2007, Judge John F. Keenan, sitting as

19   Part I judge, issued the order in the Second New York Action in

20   the full amount.   See Order Directing Clerk to Issue Process of

21   Maritime Attachment and Garnishment, ProShipLine, Inc. v. Aspen

22   Infrastructures, Ltd., No. 07 Civ. 10969 (S.D.N.Y. Dec. 4, 2007)

23   (Doc. No. 5).   On Saturday, January 5, 2008, ProShipLine's

24   counsel "gave notice that an electronic fund transfer belonging

25   to [Aspen] in the amount of US$1,999,964.00 had been restrained."

26   Declaration of John A. Orzel ¶ 6 (Jan. 9, 2008).   Thereafter, the

                                      5
1    case, having been deemed to be related to the First New York

2    Action, was assigned to Judge Robert W. Sweet.   See Notice of

3    Reassignment, ProShipLine, Inc. v. Aspen Infrastructures, Ltd.,

4    No. 07 Civ. 10969 (S.D.N.Y. Dec. 18, 2007) (Doc. No. 8).1    On

5    January 10, 2008, Aspen moved in the Second New York Action to

6    vacate ProShipLine's attachment of its funds.    See ProShipLine,

7    Inc. v. Aspen Infrastructures, Ltd., No. 07 Civ. 10969 (S.D.N.Y.

8    Jan. 10, 2008) (Doc. No. 10).   By Opinion and Order dated

9    February 1, 2008, the district court vacated that attachment.

10   See ProShipLine, 533 F. Supp. 2d at 427.

11             The district court based its vacatur on three grounds:

12   (1) the court lacked maritime jurisdiction because the agreement

13   at issue was an executory requirements contract, id.; (2) Aspen

14   is present in the Southern District of Texas, where ProShipLine

15   has its headquarters and principal place of business, id.; and

16   (3) ProShipLine abused the ex parte nature of the maritime

17   attachment rules, id. at 427-29.

18             ProShipLine appeals, asserting that the district court

19   erred in all three respects.    We affirm solely on the ground that

20   the district court did not err in concluding that the parties

21   were both present in the Southern District of Texas.


          1
            In addition to the two New York actions, the parties have
     been engaged in various other proceedings. See EP-Team, Inc. v.
     Aspen Infrastructure, Ltd., No. 4:07 Civ. 2549 (S.D. Tex. Aug. 6,
     2007); ProShipLine, Inc. v. Aspen Infrastructures, Ltd., No. 3:07
     Civ. 5660 (W.D. Wash. Nov. 27, 2007); ProShipLine, Inc. v. M/V
     Beluga Revolution, No. 4:07 Civ. 04170 (S.D. Tex. Dec. 7, 2007);
     Aspen Infrastructures, Ltd. v. EP-Team, Inc., ARB No. 063 of 2007
     (Sing. Int'l Arb. Ctr. 2007).

                                        6
1                                  DISCUSSION

2                I.    Standard of Review

3                "We generally review the district court's decision

4    vacating a maritime attachment order for abuse of discretion."

5    Aqua Stoli Shipping Ltd. v. Gardner Smith Pty Ltd., 460 F.3d 434,

6    439 (2d Cir. 2006).    A district court "necessarily abuses its

7    discretion when its decision rests on an error of law or a

8    clearly erroneous finding of fact."       Id.   Therefore, we "review[]

9    the legal predicate for an exercise of discretion[] . . . de

10   novo."    Id.

11               II.   Maritime Jurisdiction

12               Federal law controls the interpretation of maritime

13   contracts so long as the dispute is not "inherently local."

14   Norfolk S. Ry. Co. v. James N. Kirby, Pty Ltd., 543 U.S. 14, 23

15   (2004); accord Kossick v. United Fruit Co., 365 U.S. 731, 735

16   (1961).    Contracts that are "by their terms entered into in

17   connection with [a] maritime commercial venture . . . are

18   therefore maritime in nature [and] the Court has jurisdiction of

19   the claims brought thereunder pursuant to 28 U.S.C. § 1333."

20   Williamson v. Recovery Ltd. P'ship, 542 F.3d 43, 49 (2d Cir.

21   2008) (internal quotation marks omitted), cert. denied sub nom.

22   Columbus Exploration, LLC v. Williamson, 129 S. Ct. 946 (2009).

23               In Norfolk Southern Railway Co., the Supreme Court

24   rejected a "spatial approach," 543 U.S. at 24, for determining

25   whether contracts are "maritime in nature," id. at 26.       The Court

26   observed that maritime commerce "is often inseparable from some

                                        7
1    land-based obligations," especially in light of the fact that

2    "[t]he international transportation industry clearly has moved

3    into a new era -- the age of multimodalism, door-to-door

4    transport based on efficient use of all available modes of

5    transportation by air, water, and land."   Id. at 25 (internal

6    quotation marks omitted).   Instead, the Supreme Court has

7    endorsed a "conceptual approach" which, guided by "the

8    fundamental interest giving rise to maritime jurisdiction [--]

9    the protection of maritime commerce" -- focuses upon "whether the

10   principal objective of a contract is maritime commerce."     Id.

11   (internal quotation marks omitted); accord Williamson, 542 F.3d

12   at 49; Folksamerica Reinsurance Co. v. Clean Water of New York,

13   Inc., 413 F.3d 307, 311, (2d Cir. 2005); Sompo Japan Ins. Co. v.

14   Union Pac. R.R. Co., 456 F.3d 54, 71 n.17 (2d Cir. 2006).2



          2
            In cases prior to Norfolk Southern Railway Co., this
     Circuit required that courts "first make a 'threshold inquiry'
     into the subject matter of the dispute." See Folksamerica, 413
     F.3d at 312 (emphasis in original). In other words, we have held
     that "[b]efore attempting to categorize contractual rights as
     maritime or non-maritime, a federal court must first consider
     whether an issue related to maritime interests has been raised."
     Atl. Mut. Ins. Co. v. Balfour Maclaine Int'l Ltd., 968 F.2d 196,
     199 (2d Cir. 1992). The panel in Folksamerica noted "some
     uncertainty as to the extent to which this Court's 'threshold
     inquiry' test survives . . . Norfolk Southern Railway Co." 413
     F.3d at 313. In Norfolk Southern Railway Co., the Supreme Court
     "focused entirely on the underlying contract" and did not
     explicitly engage in such a "threshold inquiry." See
     Folksamerica, 413 F.3d at 313-14. We recognized, however, that
     Norfolk Southern Railway Co. is "readily distinguishable" from
     cases in this Circuit that we have found did not survive our
     threshold inquiry. Id. at 313. This case is also readily
     distinguishable from our prior "threshold inquiry" cases, so we
     need not examine "how Norfolk Southern Railway Co. might
     circumscribe our 'threshold inquiry' doctrine, if at all." Id.

                                      8
1              III.     Maritime Attachment

2              "The power to grant attachments in admiralty [i.e.,

3    maritime attachments] is an inherent component of the admiralty

4    jurisdiction given to the federal courts under Article III of the

5    Constitution."     Aqua Stoli, 460 F.3d at 437.    The "historical

6    purpose [of the power] has been two-fold: first, to gain

7    jurisdiction over an absent defendant; and second, to assure

8    satisfaction of a judgment."     Id.   "Maritime attachments arose

9    because it is frequently, but not always, more difficult to find

10   property of parties to a maritime dispute than of parties to a

11   traditional civil action.     Maritime parties are peripatetic, and

12   their assets are often transitory."      Id. at 443.   The

13   "traditional policy underlying maritime attachment," which is "to

14   permit the attachments of assets wherever they can be found and

15   not to require the plaintiff to scour the globe to find a proper

16   forum for suit or property of the defendant sufficient to satisfy

17   a judgment," has been "implemented by a relatively broad maritime

18   attachment rule, under which the attachment is quite easily

19   obtained."   Id.

20             Rule B of the Supplemental Rules for Certain Admiralty

21   and Maritime Claims to the Federal Rules of Civil Procedure (the

22   "Supplemental Rules") sets forth the process by which a party can

23   attach another party's assets.     The rule provides:

24             If a defendant is not found within      the
25             district when a verified complaint      praying
26             for attachment . . . [is] filed, a      verified
27             complaint may contain a prayer for      process to
28             attach the defendant's tangible or      intangible

                                        9
1               personal property -- up to the amount sued
2               for -- in the hands of garnishees named in
3               the process. . . . The court must review the
4               complaint and affidavit and, if the
5               conditions of this Rule B appear to exist,
6               enter an order so stating and authorizing
7               process of attachment and garnishment.

8    Fed. R. Civ. P., Adm. Supp. Rule B(1) ("Supp. Rule B(1)").    The

9    plaintiff must file with the complaint an "affidavit stating

10   that, to the affiant's knowledge, or on information and belief,

11   the defendant cannot be found within the [judicial] district."

12   Id.; see also Aqua Stoli, 460 F.3d at 438.    Orders of maritime

13   attachment "may be [and normally are] requested and granted ex

14   parte, though notice of the attachment to the defendant via

15   appropriate service is required."    Aqua Stoli, 460 F.3d at 438

16   (citing Supp. Rules B(2), E(3)).

17              The Admiralty Rules do not explain what it means to be

18   "found within [a] district."   Cf. Supp. Rule B, Advisory

19   Committee Notes (1966 Adoption) (noting that "[t]he subject seems

20   one best left for the time being to development on a case-by-case

21   basis").   This Court has noted, however, that "the

22   requirement . . . present[s] a two-pronged inquiry: first,

23   whether (the respondent) can be found within the district in

24   terms of jurisdiction, and second, if so, whether it can be found

25   for service of process."   Seawind Compania, S.A. v. Crescent

26   Line, Inc., 320 F.2d 580, 582 (2d Cir. 1963) (internal quotation

27   marks omitted); see also STX Panocean (UK) Co., Ltd. v. Glory

28   Wealth Shipping Pte Ltd., 560 F.3d 127, 130 (2d Cir. 2009).     Put

29   differently, to be found within the jurisdiction so as to render

                                     10
1   an attachment inappropriate, the respondent must not only be

2   found for service of process,3 but also be "engaged in sufficient

3   activity in the district to subject it to jurisdiction even in

4   the absence of a resident agent expressly authorized to accept

5   process."    Seawind, 320 F.2d at 583.4


         3
           We appear to have concluded that, at least in certain
    circumstances, an entity may be "found" within a judicial
    district even where the actual service contemplated would
    physically occur in another district within the same state. See
    Chilean Line Inc. v. United States, 344 F.2d 757, 761-62 (2d Cir.
    1965). Subsequently, however, we suggested that to be "found"
    within a district for purposes of Rule B an entity must be
    "'found within the geographical confines of the district for
    service of process.'" Aqua Stoli, 460 F.3d at 443. At least one
    district court judge in this Circuit has noted and explored this
    tension. See Amber Int'l Nav., Inc. v. Repinter Int'l Shipping
    Co., S.A., No. 09 Civ. 3897, 2009 WL 1883251, at *1, 2009 U.S.
    Dist. LEXIS 55779, at *2 (S.D.N.Y. June 30, 2009) (Gerard E.
    Lynch, Judge) (noting that "the case law critical to determining
    whether [the defendant] is found within this district for
    purposes of Rule B is in a state of disarray in this Circuit").
    We note that we are dealing here with equitable vacatur rather
    than vacatur for failure to comply with Rule B. In any event, as
    is discussed in further detail below, Aspen was found to maintain
    a "general agent within th[e] district [at issue -- the Southern
    District of Texas --] who could be served with process,"
    ProShipLine, Inc. v. M/V Beluga Revolution, No. H-07-4170, 2007
    WL 4481101, at *1, 2007 U.S. Dist. LEXIS 92674, at *2-*3 (S.D.
    Tex. Dec. 18, 2007), and we affirm that finding. Therefore, not
    faced with a situation where Aspen's general agent was not
    present in the Southern District of Texas, but otherwise present
    in the state, for service of process, we neither address nor
    resolve this tension here.
         4

                The time for determining whether a defendant
                is 'found' in the district is set at the time
                of the filing of the verified complaint that
                prays for attachment and the affidavit
                required by Rule B(1)(b). . . . A defendant
                cannot defeat the security purpose of
                attachment by appointing an agent for service
                of process after the complaint and affidavit
                are filed.


                                     11
1                We thus interpret the Rule to adopt a "'somewhat

2    arbitrary compromise which assumes that the plaintiff will not

3    require the protection of an attachment for security, nor should

4    the defendant be subjected to it,'" if the defendant is shown to

5    meet both prongs of the Seawind test, and "'assumes on the other

6    hand that the plaintiff's interests are not adequately

7    protected'" if the defendant is not so shown.    Aqua Stoli, 460

8    F.3d at 443 (quoting Integrated Container Serv., Inc. v.

9    Starlines Container Shipping, Ltd., 476 F. Supp. 119, 122

10   (S.D.N.Y. 1979)).5

11               IV.   Vacatur

12               The defendant -- i.e., the owner of the attached funds

13   -- or "any other person with an interest in the property seized,"

14   Supp. Rule E, Advisory Committee Notes (1985 Amendment), can make

15   a motion pursuant to Rule E of the Supplemental Rules to contest

16   the validity of the attachment.    Rule E "entitle[s the owner of

17   the attached funds] to a prompt hearing at which the plaintiff

18   [is] required to show why the arrest or attachment should not be

19   vacated."    Supp. Rule E(4)(f).   The rule is "designed to satisfy

20   the constitutional requirement of due process by guaranteeing to

21   the [defendant] a prompt post-seizure hearing at which he can

22   attack the complaint, the arrest, the security demanded, or any



     Supp. Rule B, Advisory Committee Notes (2005 Amendments).
          5
            Federal law "defines the requirements necessary for
     satisfaction of Rule B," but federal courts "look to the relevant
     state law to determine if those requirements are met." STX
     Panocean, 560 F.3d at 128.
                                     12
1    other alleged deficiency in the proceedings."    Supp. Rule E,

2    Advisory Committee Notes (1985 Amendment).

3              At such a hearing, the plaintiff -- the party who has

4    sought the attachment -- bears "the burden of showing why the

5    seizure should not be vacated."    Id.; accord Supp. Rule B,

6    Advisory Committee Notes (1966 Adoption) (noting that the

7    plaintiff has "the burden of establishing that the defendant

8    cannot be found within the district").    The plaintiff must

9    demonstrate that "1) it has a valid prima facie admiralty claim

10   against the defendant; 2) the defendant cannot be found within

11   the district; 3) the defendant's property may be found within the

12   district; and 4) there is no statutory or maritime law bar to the

13   attachment."   Aqua Stoli, 460 F.3d at 445 & n.5 (footnote

14   omitted); accord Transportes Navieros y Terrestres S.A. de C.V.

15   v. Fairmount Heavy Transp. N.V., 572 F.3d 96, 103 (2d Cir. 2009).

16             The "hard-and-fast rule" established by the

17   Supplemental Rules "may occasionally sweep too broadly," but

18   "Congress chose a determinate rule rather than a flexible

19   standard to ensure that attachments may be obtained with a

20   minimum of litigation."   Aqua Stoli, 460 F.3d at 443.

21             "Superficial compliance with Rule B, while necessary,"

22   however, "is not sufficient [to determine that a] maritime

23   attachment is appropriate."   Williamson, 542 F.3d at 52.    Even

24   with an attachment secured in conformity with Rule B, equitable

25   vacatur pursuant to Rule E may nonetheless be in order.     We have

26   disavowed the notion "that district courts are without any

                                       13
1    equitable discretion to vacate maritime attachments that comply

2    with Rule B."   Aqua Stoli, 460 F.3d at 444.    Yet we have

3    cautioned that equitable vacatur is appropriate "only in certain

4    limited circumstances."   Id.   "[W]e have not yet had occasion to

5    determine the full scope of a district court's vacatur power"

6    under the Supplemental Rules, Williamson, 542 F.3d at 52, but

7    certain principles are well-established.      For example, equitable

8    vacatur may be appropriate where the defendant can demonstrate

9    that "1) [it] is subject to suit in a convenient adjacent

10   jurisdiction; 2) the plaintiff could obtain in personam

11   jurisdiction over the defendant in the district where the

12   plaintiff is located; or 3) the plaintiff has already obtained

13   sufficient security for the potential judgment, by attachment or

14   otherwise."   Aqua Stoli, 460 F.3d at 445.6

15             V. Analysis

16   A.   Maritime Jurisdiction7

17             On appeal, ProShipLine contends that the district court

18   erred in concluding that it lacked jurisdiction to order the

19   attachment on the ground that the contract did not confer


          6
            Although the plaintiff bears the burden of demonstrating
     that the attachment "was properly ordered and complied with the
     requirements of Rules B and E," we have noted that the
     Supplemental Rules "require[] the defendant to establish any
     equitable grounds for vacatur." Aqua Stoli, 460 F.3d at 445 n.5.
          7
             Whether or not we are required to address
     the jurisdictional issue first -- i.e., whether Article III
     admiralty jurisdiction is present -- even though we affirm on
     another ground, cf. Steel Co. v. Citizens for a Better Env't, 523
     U.S. 83, 94 (1998) (limiting "the 'doctrine of hypothetical
     jurisdiction'"), we think it advisable to do so as part of a
     complete analysis of the issues on appeal.
                                     14
1    admiralty jurisdiction.   See ProShipLine, 533 F. Supp. 2d at 427.

2    We agree that this was error, and conclude that there is

3    admiralty jurisdiction here.

4              The court proffered two reasons to support its

5    decision: first, that the dispute concerned "the alleged breach

6    of an executory contract," id.;8 and second, that the contract

7    concerned the "provi[sion of] services to any vessel under

8    Aspen's control expected to call at U.S. ports in the future,"

9    and was therefore "'analogous to requirements contracts that

10   courts have found to be outside of admiralty jurisdiction, rather

11   than the one-transaction supply or repair contracts that fall

12   within admiralty jurisdiction,'" id. at 427 (quoting Dolco Invs.,

13   Ltd. v. Moonriver Dev., Ltd., 486 F. Supp. 2d 261, 267-68

14   (S.D.N.Y. 2007) (Robert W. Sweet, Judge)).

15             We conclude, however, that a contrary result is

16   mandated by Norfolk Southern Railway Co. and its progeny, under

17   which a contract confers maritime jurisdiction so long as its

18   "principal objective . . . is maritime commerce."   Norfolk S. Ry.


          8
             "An executory contract . . . is one in which the
     promisee's rights do not immediately come into existence but are
     conditioned upon some further performance, usually by the
     promisee." Fed. Deposit Ins. Co. v. Malin, 802 F.2d 12, 17 (2d
     Cir. 1986); cf. Black's Law Dictionary 369 (8th ed. (2009))
     (defining "executory contract" as "[a] contract that remains
     wholly unperformed or for which there remains something still to
     be done on both sides, often as a component of a larger
     transaction"); In re Wireless Data, Inc., 547 F.3d 484, 488 n.1
     (2d Cir. 2008) (noting that under the Bankruptcy Code, an
     executory contract is "a contract under which the obligation of
     both the bankrupt and the other party to the contract are so far
     unperformed that the failure of either to complete performance
     would constitute a material breach excusing the performance of
     the other" (internal quotation marks omitted)).
                                     15
1    Co., 543 U.S. at 25.   The agreement at issue here specifically

2    "'reference[s] maritime service[s] or maritime transactions.'"

3    Williamson, 542 F.3d at 49 (quoting Norfolk S. Ry. Co., 543 U.S.

4    at 24); accord Folksamerica, 413 F.3d at 312.    It concerns "the

5    furnishing of services, supplies, or facilities to vessels . . .

6    in maritime commerce or navigation."    CTI-Container Leasing Corp.

7    v. Oceanic Operations Corp., 682 F.2d 377, 379 (2d Cir. 1982)

8    (internal quotation marks omitted).    By the agreement, Aspen

9    appointed EP-Team "as its sales agent to establish a sales and

10   management operation to secure freight and associated revenue" to

11   fill the excess capacity on Suzlon's time-chartered vessels.     EP-

12   Team was charged with facilitating voyages from the United States

13   to India to ensure a full and efficient use of the vessels.      On

14   this basis, there is maritime jurisdiction.

15             We find unconvincing the district court's suggestion

16   that there can be no maritime jurisdiction if the contract under

17   which relief is sought is executory in nature.    More than fifty

18   years ago, the Supreme Court concluded that an alleged breach of

19   an executory contract conferred maritime jurisdiction.    See

20   Archawski v. Hanioti, 350 U.S. 532, 533 (1956); accord Compania

21   Argentina De Navegacion Dodero v. Atlas Maritime Corp., 144 F.

22   Supp. 13, 14 (S.D.N.Y. 1956) (rejecting the proposition that

23   executory contracts are not within the admiralty jurisdiction of

24   the federal courts and concluding that "[i]f such was ever the

25   law, it is certainly not the law since the decision of the United



                                     16
1    States Supreme Court in Archawski v. Hanioti, [350 U.S. 532, 533-

2    34 (1956)]").   And as the Seventh Circuit observed even earlier:

 3             If the contract contemplate[s] maritime
 4             service, and ha[s] reference to maritime
 5             transactions, it is within the jurisdiction
 6             of the admiral[ty]. This doctrine is no
 7             longer subject to contention. [I]t has been
 8             held, and, we think, without dissent, that
 9             executory contracts of a maritime character
10             are within the jurisdiction of the admiralty,
11             and that damages for breach of such a
12             contract may be awarded by the courts of
13             admiralty.
14
15   Boutin v. Rudd, 82 F. 685, 686-87 (7th Cir. 1897); S.S. Overdale

16   Co. v. Turner, 206 F. 339, 341 (E.D. Pa. 1913) (noting that a

17   "purely executory [contract] for performance of some maritime

18   service" confers maritime jurisdiction); cf. The Yankee, 37 F.

19   Supp. 512, 514 (E.D.N.Y. 1941) (concluding that an "executory

20   contract to render a maritime service" in "the absence of part

21   performance" does not confer admiralty jurisdiction).   Thus, so

22   long as a contract is maritime in nature, the fact that it is

23   executory does not foreclose maritime jurisdiction.

24             We are similarly unpersuaded by the district court's

25   conclusion that "'requirements contracts,'" as opposed to "'one-

26   transaction supply or repair contracts,'" are necessarily

27   "'outside of admiralty jurisdiction.'"   ProShipLine, 533 F. Supp.

28   2d at 427 (quoting Dolco Invs., Ltd., 486 F. Supp. at 268).   Even

29   assuming the cases cited by the district court in this regard --

30   the most recent of which predates Norfolk Southern Railway Co. by

31   nearly a half century, see Compania Argentina De Navegacion

32   Dodero, 144 F. Supp. 13 (S.D.N.Y. 1956), two of which directly

                                     17
1    conflict with the district court's conclusion that executory

2    contracts do not confer admiralty jurisdiction, see id. at 14;

3    S.S. Overdale Co., 206 F. at 341, and none of which are binding

4    on this court -- have merit, they are distinguishable.   In each

5    case in which the contract was found not to confer maritime

6    jurisdiction, the contracted-for service held not to give rise to

7    maritime jurisdiction was in some fundamental way non-maritime in

8    nature.   See S.S. Overdale Co., 206 F. at 341 (requirements

9    contract for the sale of coal to a fleet of steamships not

10   maritime contract); Garcia v. Warner, Quinlan Co., 9 F. Supp.

11   1010, 1011 (S.D.N.Y. 1934) (year-long requirements contract for

12   the sale of fuel oil to a fleet of steam ships not maritime

13   contract); see also Diefenthal v. Hamburg Am. Line, 46 F. 397

14   (E.D. La. 1891) (requirements contract for the sale of meat,

15   eggs, and vegetables for a year at fixed prices not maritime

16   contract).

17              Obviously, non-maritime businesses need coal, fuel oil,

18   and eggs, too.   But the service under contract here -- the

19   arranging of sea voyages and port services -- has an undeniably

20   maritime flavor.   See S.S. Overdale, 206 F. at 341 (maritime

21   contract "[makes] reference to a[] particular maritime service or

22   . . . to the navigation, business, or commerce of the sea"); cf.

23   Williamson, 542 F.3d at 49 (noting that services or contracts

24   that make sense outside of the context of maritime commerce, such

25   as "standard non-compete, nondisclosure, and lease contract

26   agreements," can nonetheless be properly considered maritime

                                     18
1    contracts if they "reference maritime service or maritime

2    transactions").

3               For these reasons, we conclude, contrary to the

4    conclusion of the district court, that federal maritime

5    jurisdiction exists.

6    B.   Presence in the Southern District of Texas

7               We must decide, then, whether the district court abused

8    its discretion in vacating the attachment.   We conclude that it

9    did not.

10              As we have noted, equitable vacatur may be appropriate

11   where "the plaintiff and defendant are both present in the same

12   district and would be subject to jurisdiction there, but the

13   plaintiff goes to another district to attach the defendant's

14   assets."   Aqua Stoli, 460 F.3d at 444-45; accord Williamson, 542

15   F.3d at 51.   The record supports the conclusion that ProShipLine

16   sought an ex parte order of attachment in the Southern District

17   of New York despite the fact that both Aspen and ProShipLine were

18   present in the Southern District of Texas and subject to

19   jurisdiction there.

20              On December 10, 2007, in connection with ProShipLine,

21   Inc. v. M/V Beluga Revolution, No. 4:07 Civ. 04170 (S.D. Tex.

22   Dec. 7, 2007), one of the two proceedings in the Southern

23   District of Texas associated with this dispute, ProShipLine and

24   EP-Team secured a writ of maritime attachment against Aspen's

25   assets aboard the M/V Beluga Revolution, one of Aspen's vessels

26   then docked in the Southern District of Texas.    Aspen sought

                                     19
1    vacatur of the attachment in part on the basis that Aspen was

2    "found within the district."   ProShipLine, Inc. v. M/V Beluga

3    Revolution, No. H-07-4170, 2007 WL 4481101, at *1, 2007 U.S.

4    Dist. LEXIS 92674, at *3 (S.D. Tex. Dec. 18, 2007).    In

5    connection with the dispute, the parties -- Aspen, EP-Team, and

6    ProShipLine -- "concede[d] that Aspen is present in [the Southern

7    District of Texas] as a result of its substantial and ongoing

8    commercial activities [in the district]."    Id. at *1, 2007 U.S.

9    Dist. LEXIS 92674, at *1.

10              On December 14, 2007, the United States District Court

11   for the Southern District of Texas (John R. Froeschner,

12   Magistrate Judge) conducted a hearing on Aspen's motion for

13   vacatur.   Id.   As set forth in its Opinion and Order of December

14   18, 2007, the district court found "that Aspen maintains a

15   general agent within this district who could be served with

16   process" that "qualifies as a [managing] agent for purposes of

17   service of process under Rule 4(h) of the Federal Rules of Civil

18   Procedure."   Id. at *1, 2007 U.S. Dist. LEXIS 92674, at *2-*3.

19   On the basis of Aspen's "contacts with the district" and because

20   it "can be found within the geographical confines of the district

21   for service of process," the district court vacated the

22   attachment as "improperly issued."    Id., 2007 U.S. Dist. LEXIS

23   92674, at *4.

24              In the proceedings before Judge Sweet, the district

25   court concluded that "[b]y its Opinion and Order dated December

26   18, 2007, the United States District Court for the Southern

                                      20
1    District of Texas has already found that Aspen is present within

2    that district, where ProShipLine has its headquarters and

3    principal place of business."       ProShipLine, 533 F. Supp. 2d at

4    427.       The district court adopted that finding, and on that basis

5    vacated the attachment.       Id. at 429.

6                    We conclude that vacatur on this ground was proper.

7    ProShipLine is estopped from relitigating this factual issue --

8    that Aspen is present within the Southern District of Texas --

9    because it was "'actually litigated [by Aspen and ProShipLine]

10   and decided by a court of competent jurisdiction in a prior

11   action.'"       ATSI Commc'ns, Inc. v. Shaar Fund, Ltd., 547 F.3d 109,

12   112 (2d Cir. 2008).9      And ProShipLine cannot plausibly contend

13   that the Southern District of Texas is an inconvenient venue in

14   which to litigate:       Its headquarters and principal place of

15   business are located there, see ProShipLine, 533 F. Supp. 2d at

16   427.       ProShipLine does not argue that it is not present in the

17   district.       Indeed, the district has been convenient enough for

18   ProShipLine to have chosen to initiate litigation against Aspen


            9
            Following the February 1, 2008, Opinion and Order on
     appeal in this case, the district court for the Southern District
     of Texas (Lee H. Rosenthal, District Judge) affirmed the
     magistrate judge's order and findings. See ProShipLine, Inc. v.
     M/V Beluga Revolution, No. H-07-4170, 2008 WL 447707, at *3, 2008
     U.S. Dist. LEXIS 12056, at *7 (S.D. Tex. Feb. 19, 2008)
     (overruling the objections of ProShipLine and EP-Team and
     affirming the magistrate judge's Opinion and Order, in part based
     on its conclusion that the "record in this case supports the
     Magistrate Judge's determination that [Aspen] maintained a
     general agent within this district that could be served with
     process"); see also ProShipLine, Inc. v. M/V Beluga Revolution,
     No. H-07-4170, 2008 WL 2673832, 2008 U.S. Dist. LEXIS 50721 (S.D.
     Tex. July 2, 2008) (denying ProShipLine and EP Team's motion for
     reconsideration).
                                     21
1    in two separate actions there.    See EP-Team, Inc. v. Aspen

2    Infrastructure, Ltd., No. 4:07 Civ. 2549 (S.D. Tex. Aug. 8,

3    2007); ProShipLine, Inc. v. M/V Beluga Revolution, No. 4:07 Civ.

4    04170 (S.D. Tex. Dec. 7, 2007).

5                ProShipLine contends that Aspen's position in this

6    action -- that it is present in the same district as ProShipLine

7    –- "undercut[s] the claims Aspen has made in the [First New York

8    Action] against EP-Team."    ProShipLine Br. 23 n.3.   It has not

9    brought to this Court's attention, however, any inconsistent

10   misrepresentations in this regard.     And our review of the

11   district court's opinion in this action and the subsequently

12   issued opinion in the First New York Action, Aspen

13   Infrastructures, Ltd. v. E.P. Team, Inc., No. 07 Civ. 8813, 2008

14   WL 2963491, 2008 U.S. Dist. LEXIS 59030 (S.D.N.Y. Aug. 1, 2008),

15   reveals no such inconsistencies.

16               Equitable vacatur of writs of attachment, in contrast

17   to vacatur for failure to comply with Rule B, turns not on the

18   owner of the attached funds' relationship with the jurisdiction

19   of attachment, but on both parties' relationship with another

20   jurisdiction.    For equitable vacatur to be granted on this basis,

21   "the plaintiff [must be able to] obtain in personam jurisdiction

22   over the defendant in [a] district where the plaintiff is

23   located."    Aqua Stoli, 460 F.3d at 445.

24               In the First New York Action, EP-Team moved for

25   equitable vacatur of the order authorizing Aspen's attachment of

26   EP-Team's assets in the Southern District of New York on the

                                       22
1    grounds that both it and Aspen were present in the Southern

2    District of Texas.    Aspen Infrastructures, Ltd. v. E.P. Team,

3    Inc., No. 07 civ. 8813, 2008 WL 2663491, at *1, 2008 U.S. Dist.

4    LEXIS 59030, at *2-*3.    The district court denied EP-Team's

5    motion, concluding that "EP-Team's submissions on this motion

6    [were] insufficient to establish its [presence in that]

7    jurisdiction."    Id. at *2, 2008 U.S. Dist. LEXIS 59030, at *5.

8    Vacatur of the writ of attachment in the First New York Action

9    was thus based on EP-Team's lack of presence in the Southern

10   District of Texas.

11               By contrast, vacatur of the writ of attachment in the

12   Second New York Action -- this one -- depends upon the presence

13   of ProShipLine and Aspen, not EP-Team, in the Southern District

14   of Texas.    Aspen has, according to the district court,

15   demonstrated that both of them are present in that district.

16   Because ProShipLine and EP-Team are separate legal entities, it

17   does not necessarily follow from ProShipLine's presence in the

18   Southern District of Texas that EP-Team is also present there.

19   Cf. Aspen Infrastructures, Ltd. v. E.P. Team, Inc., 2008 WL

20   2963491, at *2, 2008 U.S. Dist. LEXIS 59030, at *5 (noting that

21   "the responsibilities of EP-Team and [ProShipLine] with respect

22   to these various proceedings and the underlying agreement are

23   elusive").

24               Even were the judgments in the First and Second New

25   York actions inconsistent, moreover, inconsistency itself is not

26   sufficient to require reversal of the vacatur of the maritime

                                      23
1    attachment here.   The propriety of the decision in the First New

2    York Action is not before us.    In the absence of support for the

3    proposition that the district court vacated the writ of

4    attachment in the case before us on appeal -- the Second New York

5    Action -- in error, we affirm.   ProShipLine is not entitled to an

6    attachment of Aspen's funds solely because Aspen's attachment of

7    another entity's funds in a separate action might have been

8    improper.   To the extent that the decision in the First New York

9    Action was wrong, if it was, appeal from that decision, if

10   available, is the avenue for recourse in this Court.10

11   C.   Abuse of The Ex Parte Nature of Rule B Process

12               Having concluded that vacatur was proper, we need not,

13   and do not, address whether the district court erred in

14   concluding, in the alternative, that ProShipLine's actions

15   constituted an abuse of the ex parte nature of Rule B process.

16   We offer no views on that issue and none should be inferred from

17   this opinion.



          10
            Our review reveals no inconsistencies between the
     judgments of the New York court and the judgment of the Texas
     court. The Texas district court's vacatur of the writ of the
     Texas attachment for failure to comply with Rule B depended
     solely on whether Aspen, not EP-Team or ProShipLine, was found in
     the Southern District of Texas. See Proshipline, Inc. v. M/V
     Beluga Revolution, 2007 WL 4481101, at *1, 2007 U.S. Dist. LEXIS
     92674, at *3; Supp. Rule B(1) (providing that attachment is only
     appropriate where "defendant is not found within the district").
     Given that Aspen was found in that district, the maritime
     attachment did not meet the basic requirements of Rule B, and was
     vacated as "improperly issued." Proshipline, Inc. v. M/V Beluga
     Revolution, 2007 WL 4481101, at *1, 2007 U.S. Dist. LEXIS 92674,
     at *4. And it does not necessarily follow from Aspen's presence
     in the district that EP-Team -- a completely separate entity --
     would be present in the same jurisdiction.
                                     24
1                              CONCLUSION

2             For the foregoing reasons, the judgment of the district

3   court is affirmed.




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