In re M/V Rickmers Genoa Litigation, 05 Civ. 4261(LAP)(THK).

• Decision Date: 07 August 2009
• Docket Number: No. 05 Civ. 9472(LAP)(THK).,No. 05 Civ. 6226(LAP)(THK).,No. 05 Civ. 8841(LAP)(THK).,No. 05 Civ. 4261(LAP)(THK).,05 Civ. 4261(LAP)(THK).,05 Civ. 6226(LAP)(THK).,05 Civ. 8841(LAP)(THK).,05 Civ. 9472(LAP)(THK).
• Citation: 643 F.Supp.2d 553
• Parties: In re M/V RICKMERS GENOA LITIGATION. This Document Relates To: All Actions.
• Court: U.S. District Court — Southern District of New York

643 F.Supp.2d 553

In re M/V RICKMERS GENOA LITIGATION.

This Document Relates To: All Actions.

No. 05 Civ. 4261(LAP)(THK).

No. 05 Civ. 6226(LAP)(THK).

No. 05 Civ. 8841(LAP)(THK).

No. 05 Civ. 9472(LAP)(THK).

United States District Court, S.D. New York.

August 7, 2009.

James Aloysius Saville, Jr., Thomas Earl Willoughby, James Aloysius Saville, Jr., Hill, Rivkins & Hayden LLP, NY, NY, Lawrence Caruso Glynn, Nicoletti Hornig & Sweeney, New York, NY, James Paul Krauzlis, Roman Badiak, Badiak & Will, LLP, Mineola, NY, Jeffrey Lee Neandross, Graham, Miller, Neandross, Mullin & Roonan, L.L.C., New York, NY, for Plaintiffs.

Eugene Joseph O'Connor, Timothy Semenoro, Eugene Joseph O'Connor, Andrew John Warner, Chalos, O'Connor & Duffy, LLP, Port Washington, NY, Christopher Hayes Dillon, Burke & Parsons, New York, NY, for Defendants.

Memorandum and Order

LORETTA A. PRESKA, Chief Judge.

On March 31, 2009, the Court issued an Opinion [dkt. no. 125 (4261 action)], 622 F.Supp.2d 56 (S.D.N.Y.2009) (the "Opinion") granting in part and denying in part summary judgment for Defendant ESM Group Inc. ("ESM Group"). Third-Party Plaintiffs Rickmers-Linie GmbH & KG, Rickmers Genoa SchiffahrtsGes mbH & Cie. KG, and Genoa Navigation Co. Ltd. (the "Rickmers Interests"), as well as ESM Group have separately moved for reconsideration pursuant to Local Civil Rule 6.3 [dkt. nos. 126 and 128 (4261 action)]. For the reasons set forth herein, ESM Group's Motion for Reconsideration is GRANTED, for the sole purpose of conducting a more complete choice of law analysis, and the Rickmers Interests' Motion for Reconsideration is DENIED. As explained herein, the conclusions of the Opinion stand as previously so ordered.

I. Motion for Reconsideration Standard

Local Rule 6.3 permits a party to move for reconsideration of a court order determining a motion within ten days of entry of the determination of the original motion. See Local Civil Rule 6.3. To succeed on the motion, the party seeking reconsideration must present controlling decisions or facts that the court originally overlooked. See Shrader v. CSX Transp., Inc., 70 F.3d 255, 257 (2d Cir.1995). In order to be properly considered upon reconsideration, any controlling decisions or factual matters presented must have been put before the court in the underlying motion. Range Road Music, Inc. v. Music Sales Corp., 90 F.Supp.2d 390, 392 (S.D.N.Y.2000). A party may not relitigate an already decided issue on a motion for reconsideration. Henderson v. Metropolitan Bank & Trust Co., 502 F.Supp.2d 372, 376 (S.D.N.Y.2007).

II. ESM Group's Motion for Reconsideration

ESM Group's Motion for Reconsideration was timely. ESM Group contends that it did not agree to the wholesale application of federal maritime law to the claims asserted in these actions and that the Court's choice of law analysis, which rested on the understanding that all parties agreed to apply federal maritime common law, was flawed.¹ (See Opinion, 622 F.Supp.2d at 64, n. 9.) ESM Group's contention that the Court overlooked some of ESM Group's arguments in its supplemental letters and briefs for the application of New York law appears to be well founded. Accordingly, reconsideration of the choice of law issue is appropriate at this time.

The parties have had ample opportunity—in the summary judgment briefing, the oral arguments, and on the motions for reconsideration—to articulate their positions with respect to what law or laws should apply to the claims and theories in these actions.² Accordingly, upon reconsideration I conclude that federal maritime law (statutory and common) indeed applies to all claims and theories asserted in these actions for the reasons set forth in the following choice of law analysis.

The operative complaints in these actions invoke this Court's maritime subject matter jurisdiction. No party contests such invocation, and it is proper. (See Opinion, 622 F.Supp.2d at 63.) While the source of a court's subject matter jurisdiction may not always be dispositive on the question of what substantive law to apply,³ federal maritime law is usually applied when a federal court's maritime jurisdiction is invoked. See Norfolk Southern Railway Co. v. Kirby, 543 U.S. 14, 23, 125 S.Ct. 385, 160 L.Ed.2d 283 (2004) (noting that the exercise of a court's maritime jurisdiction is a prerequisite to the application of federal maritime common law); East River S.S. Corp. v. Transamerica Delaval, Inc., 476 U.S. 858, 864-65, 106 S.Ct. 2295, 90 L.Ed.2d 865 (1986) (noting generally that "[w]ith admiralty jurisdiction comes the application of substantive admiralty law"); Kirno Hill Corp. v. Holt, 618 F.2d 982, 985 (2d Cir.1980) (citing Kermarec v. Compagnie Generale Transatlantique, 358 U.S. 625, 628, 79 S.Ct. 406, 3 L.Ed.2d 550 (1959)). In determining whether to apply federal maritime law in an action, the paramount inquiry for the court is to determine whether the facts concern traditional maritime activity. See Kirby, 543 U.S. at 22-23, 125 S.Ct. 385 (determining whether the factual situation presented was "salty" in nature); Kossick v. United Fruit Co., 365 U.S. 731, 742, 81 S.Ct. 886, 6 L.Ed.2d 56 (1961) (same). More specifically, maritime courts have developed tests for determining whether a particular claim qualifies as a maritime claim and thus warrants the application of federal maritime law. For tort claims, "the situs of the tort must be maritime (the location test) and the tort must bear a significant relationship to traditional maritime activity (the nexus test)." Carey v. Bahama Cruise Lines, 864 F.2d 201, 206 n. 4 (1st Cir.1988); Sorensen v. City of New York, 202 F.2d 857 (2d Cir.1953). For breach of contract claims, the determination depends on whether the relevant contract (usually a bill of lading) qualifies as a maritime contract and involves inherently local matters. Kirby, 543 U.S. at 22-23, 125 S.Ct. 385. Statutory claims under COGSA, of course, deserve application of federal maritime statutory law. Id. at 29, 125 S.Ct. 385; Senator Linie Gmbh & Co. Kg v. Sunway Line, Inc., 291 F.3d 145, 166-67 (2d Cir.2002).

The facts involved in these actions and the claims asserted here make this an easy case for application of federal maritime law. The tort claims asserted against the various defendants involve alleged conduct or omissions that occurred on the high seas or in relation to maritime activity. The relevant bills of lading at issue in these actions are for the carriage of goods by sea and do not involve inherently local matters. The COGSA claims asserted, by definition, invoke a federal maritime statute. As such, these claims deserve the application of federal maritime law. I do not understand any party seriously to object to this determination.

However, at least with respect to the corporate control theories of liability asserted against ESM Group,⁴ ESM Group contends that state law should apply because states have a greater interest in policing corporate relations. ESM Group suggests that cases such as Marsh v. Rosenbloom, 499 F.3d 165, 181 (2d Cir.2007), and United States v. Bestfoods, 524 U.S. 51, 118 S.Ct. 1876, 141 L.Ed.2d 43 (1998), stand for the general rule that federal law should not be applied to corporate control theories. And, as a factual matter, ESM Group contends that its corporate relationship with ESM Tianjin Co. Ltd. ("ESMT") was not maritime in nature but rather concerned regular commodity sales and purchase agreements.

I find these arguments unavailing. Federal maritime common law is appropriately applied to corporate control liability theories in maritime actions in order to promote uniformity throughout the maritime law. See Kirby, 543 U.S. 14, 125 S.Ct. 385, 395-97 (2004) ("Article Ill's grant of admiralty jurisdiction must have referred to a system of law coextensive with, and operating uniformly in, the whole country. It certainly could not have been the intention to place the rules and limits of maritime law under the disposal and regulation of the several States, as that would have defeated the uniformity and consistency at which the Constitution aimed on all subjects of a commercial character affecting the intercourse of the States with each other or with foreign states." (internal quotation marks omitted)); Pink Goose (Cayman) Ltd. v. Sunway Traders LLC, 08 Civ. 2351, 2008 WL 4619880, at *2 (S.D.N.Y. Oct. 17, 2008) ("[A]lter-ego theories of liability are prima facie admiralty claims so long as the underlying claim arose in admiralty."). Particularly in light of the unique corporate arrangements that exist in the maritime industry and the need for uniformity of maritime laws, the federal maritime common law has adopted rules governing corporate liability, irrespective of whether corporate entities expected, ex ante, that their corporate relationship would eventually be scrutinized in the context of a maritime action. See Williamson v. Recovery Ltd. P'ship, 542 F.3d 43, 53 (2d Cir.2008); Dow Chem. Pac. Ltd. v. Rascator Mar. S.A., 782 F.2d 329, 339-43 (2d Cir.1986); Kirno Hill, 618 F.2d at 985; Status Int'l S.A. v. M & D Mar. Ltd., 994 F.Supp. 182, 186 (S.D.N.Y.1998).

Additionally, ESM Group's proposed rule that state laws should be applied to corporate control theories in maritime actions runs counter to the overriding presumption that federal maritime law (statutory or common) displaces otherwise applicable state law. See American Dredging Co. v. Miller, 510 U.S. 443, 114 S.Ct. 981, 984-85, 127 L.Ed.2d 285 (1994) (discussing federal preemption doctrines applicable to state laws inconsistent with the general maritime law); Southern Pacific Co. v. Jensen, 244 U.S. 205, 216, 37 S.Ct. 524, 61 L.Ed. 1086 (1917) ("[N]o [state] legislation is valid if it contravenes the essential purpose expressed by an act of Congress, or works material prejudice to the characteristic features of the general maritime law, or interferes with the proper harmony and uniformity of that law in its...