Reel Pipe, LLC v. USA Comserv, Inc.
Decision Date | 22 April 2019 |
Docket Number | CIVIL ACTION NO. 18-6646 SECTION "L" (5) |
Parties | REEL PIPE, LLC v. USA COMSERV, INC. |
Court | U.S. District Court — Eastern District of Louisiana |
Before the Court is a 12(b)(6) motion to dismiss filed by Reel Pipe, LLC and C-Logistics, LLC. R. Doc. 20. USA Comserv, Inc. opposes. R. Doc. 23. By order of the Court, both sides submitted additional briefing. R. Docs. 32, 36. Having considered the parties' briefs and the applicable law, the Court now issues this Order and Reasons.
USA Comserv, Inc. ("USA Comserv") chartered Reel Pipe, LLC ("Reel Pipe")'s vessel, the M/V CAROL CHOUEST (the "Vessel") to transport 850,000 gallons of fuel to Puerto Rico. Under the terms of the Charter, USA Comserv agreed to pay $20,000 per day charter hire; $1,200 per day for C-Logistics LLC ("C-Logistics"), an affiliate of Reel Pipe, to coordinate the receiving, loading, and manifesting of all equipment; and certain other defined expenses. Reel Pipe invoiced USA Comserv after the 28-day charter period, but has not been paid. Accordingly, it sued USA Comserv for breach of the Charter and under Louisiana's Open Account statute.
In answer, USA Comserv asserts that the Vessel was unfit for its intended voyage. It brings counterclaims against Reel Pipe and third-party claims against C-Logistics for breach of the Charter; negligent misrepresentation; violations of the Louisiana Unfair Trade Practices Act; and "recognition of its maritime lien against the Vessel."
At issue here is Count 2 of USA Comserv's counterclaim, titled "recognition of maritime lien." R. Doc. 10 at 13. Specifically, "USA Comserv requests recognition of its maritime lien against the Vessel for all damages resulting from Reel Pipe's breach of the time charter." Id. Reel Pipe moved to dismiss this claim under Rule 12(b)(6), arguing that USA Comserv had waived its right to a lien under the terms of the Charter. The Court, however, ordered supplemental briefing on a potential issue that neither side had addressed: whether a non-vessel owner can seek recognition of a maritime lien when the Vessel is not before the Court.
Reel Pipe now argues that this Court cannot adjudicate the merits of USA Comserv's alleged maritime lien, since USA Comserv did not assert an in rem claim against the Vessel, did not name the Vessel as an in rem defendant, and did not arrest the Vessel. USA Comserv counters that it seeks only recognition - not enforcement - of its maritime lien, so there is no requirement that the Vessel be arrested. Alternatively, USA Comserv asserts that Reel Pipe waived its objection to in rem jurisdiction by failing to raise the issue in its 12(b)(6) motion.
E.A.S.T. Inc. of Stamford v. M/V Alaia, 876 F.2d 1168, 1174 (5th Cir. 1898) (internal citations omitted).
A vessel is "an entity apart from its owner," and a maritime lien "represents a property interest entirely distinct from an in personam right." Merchants Nat'l Bank of Mobile v. Dredge Gen. G.L. Gillespie, 663 F.2d 1338, 1350, 1345. (5th Cir. 1981). It "adheres to the vessel wherever it may go" and "follow[s] the vessel even after it is sold to an innocent purchaser." Equilease Corp. v. M/V Sampson, 793 F.2d 598, 602 (5th Cir. 1986). "Thus, the maritime lien is a lien on the vessel, and only indirectly, inasmuch as it conflicts with the owner's rights in the vessel, it is connected with the owner." Id. (internal quotations omitted). "[T]he in personam action is filed against the owner personally, an in rem action, on the other hand, is filed against the res, the vessel." Belcher Co. of Alabama v. M/V Maratha Mariner, 724 F.2d 1161, 1163 (5th Cir. 1984).
A claim seeking recognition of a maritime lien is a separate and distinct cause of action from an in personam action against a vessel owner. Port Ship Serv., Inc. v. Int'l Ship Mgmt. & Agencies Serv., Inc., 800 F.2d 1418, 1421 (5th Cir. 1986) (). Because USA Comserv did not assert an in rem claim against the Vessel, did not name the Vessel as a defendant, and did not arrest the Vessel, USA Comserv's claim for recognition of its maritime lien against the Vessel cannot proceed in its in personam counterclaim against the Vessel's owner. See, e.g., Pillsbury Co. v. Midland Enterprises, Inc., 715 F. Supp. 738, 755 (E.D. La. 1989), aff'd and , 904 F.2d 317 (5th Cir. 1990) (); Dow Chem. Co. v. Barge UM-23B, 424 F.2d 307, 311 (5th Cir. 1970) () ; Associated Metals & Minerals Corp. v. S. S. Portoria, 484 F.2d 460, 461 (5th Cir. 1973) () ; Cal Dive Offshore Contractors, Inc. v. M/V SAMPSON, 245 F. Supp. 3d 473, 478 (S.D.N.Y. 2017) ().
The cases cited by USA Comserv are easily distinguishable. First, in Marine Electrics Engineering, Inc. v. United States, 2010 WL 3463689 (M.D. Fla. Sept. 2, 2010), the plaintiff sought to enforce a necessaries lien for work performed as a subcontractor on two United States Coast Guard vessels. This implicated both the Suits in Admiralty Act and the Public Vessels Act, and the Eleventh Circuit had specifically held that those two statutes allow "an in personam action in admiralty against the United States on principles of in rem liability." Bonnani Ship Supply, Inc. v. United States, 959 F.2d 1558, 1564 (11th Cir. 1992). The Marine Electrics court allowed the case to proceed without arrest because "it was the law of the Eleventh Circuit to allow a person who had provided necessaries to a public vessel to bring a maritime lien against the public vessel by suing the United States in personam on principles of in rem liability." 2010 WL 3463689, at *2 (citing Bonnani).
Next, UPT Pool Ltd. v. Dynamic Oil Trading (Singapore) PTE Ltd., 2015 WL 4005527 (S.D.N.Y. July 1, 2015), aff'd sub nom. Hapag-Lloyd Aktiengesellschaft v. U.S. Oil Trading LLC, 814 F.3d 146 (2d Cir. 2016) presented "novel questions regarding the interplay among United States bankruptcy law, maritime law and the federal interpleader statutes." 2015 WL 4005527, at *1. There, vessel owner Hapag-Lloyd had entered into a bunker supply contract with O.W. Bunker. O.W. Bunker filed for bankruptcy, and U.S. Oil Trading LLC ("USOT"), the physical bunker supplier, instituted in rem actions seeking to enforce its maritime liens against Hapag-Lloyd's vessels. Hapag-Lloyd brought an interpleader action, posted bond for the amount claimed, and moved for an anti-suit injunction against the in rem actions.
USOT and other objecting claimants argued that the district court could not rule on the validity of their maritime liens because "the Vessels were never arrested or present in this jurisdiction," and the court lacked in rem jurisdiction. 2015 WL 4005527, at *9. The district court rejected this...
To continue reading
Request your trial