Hapag–Lloyd Aktiengesellschaft v. U.S. Oil Trading LLC

• Decision Date: 24 February 2016
• Docket Number: Docket No. 15–97.
• Parties: 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.
• Court: U.S. Court of Appeals — Second Circuit

814 F.3d 146

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.^*

Docket No. 15–97.

United States Court of Appeals, Second Circuit.

Argued: Nov. 17, 2015.

Decided: Feb. 24, 2016.

John R. Keough III(Casey D. Burlage, Corey R. Greenwald, George G. Cornell, on the brief), Clyde & Co U.S. LLP, New York, NY, for Defendant–Appellant.

Gina M. Venezia(Peter J. Gutowski, Michael Fernandez, 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.

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

Before: KEARSE, STRAUB, and WESLEY, Circuit Judges.

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 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 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 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 Cor Rule Bor other laws to enforce claimants' alleged maritime lien claims arising from the bunker deliveries until the further order of the Court.

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 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.

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 to any benefit arising from an "instrument of value or amount of $500 or more" or from an "obligation written or unwritten to the amount of $500 or more," provided that the plaintiff "has deposited such money or property" into the registry of the court or "has given bond payable to the clerk of the court in such amount and with such surety as the court or judge may deem proper." 28 U.S.C. § 1335(a). Where the other requirements are met, the statute makes it irrelevant that "the titles or claims of the conflicting claimants do not have a common origin." Id. § 1335(b). USOT contends that these statutory requirements are not met. Its principal argument is that, because its claims to payment arise from statutory in rem liens against Hapag–Lloyd's vessels while the O.W. Entities' claims arise from the supply contracts (and thus are correctly characterized by USOT as being in personam in nature), its codefendants are not claiming entitlement to the same money, property, or benefit of the instrument or obligation. USOT is of the view that its maritime liens do not arise out of the Hapag–Lloyd–O.W. Entities contracts but rather from the fact that USOT "provid[ed] necessaries to a vessel on the order of the owner or a person authorized by the owner." See Maritime Commercial Instruments and Liens Act, 46 U.S.C. § 31342.¹³ In the context of this case, however, USOT focuses on a difference that is not material to the availability of interpleader.

It is well established that the interpleader statute is "remedial and to be liberally construed," particularly to prevent races to judgment and the unfairness of multiple and potentially conflicting obligations. State Farm Fire & Cas. Co. v. Tashire, 386 U.S. 523, 533, 87 S.Ct. 1199, 18 L.Ed.2d 270 (1967). Though this matter presents a novel factual situation, we think the case before us fits squarely within the language and purpose of the interpleader statute. Like the District Court, we find instructive Royal School Laboratories, Inc. v. Town of Watertown, 358 F.2d 813 (2d Cir.1966). There, we upheld an interpleader complaint by the Town, naming a supplier of equipment and furniture to the Town and the assignee of the general contractor who purchased but did not pay for the materials. Id. at 815. The supplier's equitable unjust enrichment claims against the Town arose from materialman claims while the general contractor's assignee asserted claims against the Town for payment for the equipment arising from a contract. Judge Friendly, writing for the court, explained that "nothing could be more palpably unjust than to permit two recoveries against [the interpleader plaintiff] for the same enrichment." Id.¹⁴ We conclude that the claims alleged in this action concern the same enrichment to Hapag–Lloyd—i.e., the value of the bunkers, payment for which is the entitlement claimed by all parties¹⁵ —and are thus likewise "inextricably interrelated." Id. Although the claims may have different legal origins, we have previously held that there is no requirement that interpleader claims arise "out of a common source of right or entitlement." Ashton v. Josephine Bay Paul & C. Michael Paul Found., Inc., 918 F.2d 1065, 1069 (2d Cir.1990); see also 28 U.S.C. § 1335(b).

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....