Schiffahartsgesellschaft Leonhardt & Co. v. A. Bottacchi S.A. de Navegacion

• Decision Date: 01 October 1985
• Docket Number: No. 83-8019,83-8019
• Citation: 773 F.2d 1528
• Parties: SCHIFFAHARTSGESELLSCHAFT LEONHARDT & CO., Plaintiff-Appellant, v. A. BOTTACCHI S.A. DE NAVEGACION, Defendant-Appellee.
• Court: U.S. Court of Appeals — Eleventh Circuit

Page 1528

773 F.2d 1528

1986 A.M.C. 1

SCHIFFAHARTSGESELLSCHAFT LEONHARDT & CO., Plaintiff-Appellant, v. A. BOTTACCHI S.A. DE NAVEGACION, Defendant-Appellee.

No. 83-8019.

United States Court of Appeals Eleventh Circuit.

Oct. 1, 1985.

Robert S. Glenn, Jr., Savannah, Ga., for plaintiff-appellant.

Lamar Walter, Savannah, Ga., for defendant-appellee.

Theodore A. LeGros, Seattle, Wash., David R. Owen, Baltimore, Md., for amicus curiae, Maritime Law Ass'n of U.S.

Appeal from the United States District Court for the Southern District of Georgia.

Before GODBOLD, Chief Judge, RONEY, TJOFLAT, HILL, FAY, VANCE, KRAVITCH, JOHNSON, HENDERSON, HATCHETT, ANDERSON and CLARK, Circuit Judges.

TJOFLAT, Circuit Judge:

I.

On May 25, 1982 the clerk of the U.S. District Court for the Southern District of Georgia issued a writ of attachment against bunkers and stores owned by the appellee, A. Bottacchi S.A. de Navegacion ("Bottacchi"), and located aboard the vessel M/V Puntas Malvinas. The writ was sought by the appellant, Schiffahartsgesellschaft Leonhardt & Co. (G.M.B.H. & Co.) ("Leonhardt"). This appeal questions the constitutionality of the maritime attachment procedures employed by the district court.

Bottacchi, an Argentine corporation, time-chartered ¹ the M/V Barbara Leonhardt from Leonhardt pursuant to a New York Produce Exchange charter party dated March 26, 1982. ² On or about April 14, 1982, while operating under the charter party on a voyage from St. Johns, Canada, to Buenos Aires, Argentina, the M/V Barbara Leonhardt and her cargo were damaged, allegedly as a result of Bottacchi's negligence, during heavy weather. Upon arrival of the vessel in Buenos Aires, Leonhardt was required to post security of $450,000 in favor of various cargo interests to avoid arrest of the ship. Alleging that it was entitled to indemnity or contribution from Bottacchi for any damages it might be adjudged to owe the cargo interests, Leonhardt, on May 24, 1982, filed a complaint in admiralty, and petition to compel arbitration, in the Southern District of Georgia and sought the issuance of a summons with process of attachment against the M/V Puntas Malvinas, which was docked in Savannah, Georgia, and was listed in the most recent supplement of Lloyd's Register of Shipping as being owned by Bottacchi. In accordance with Rule B(1) of the Supplemental Rules for Certain Admiralty and Maritime Claims to the Federal Rules of Civil Procedure ("Rule B(1)"), Leonhardt's attorney verified the complaint since none of Leonhardt's officers were present in the district. In addition, pursuant to Rule B(1) the lawyer also submitted an affidavit that to the best of his belief Bottacchi could not be found within the district.

Although Bottacchi was listed in Lloyd's Register as the owner of the vessel, documents presented by Bottacchi's attorney the following day revealed that Bottacchi did not own the vessel ³ but rather operated under a bareboat charter. ⁴ Under this arrangement Bottacchi owned only certain bunkers and stores aboard the ship. Leonhardt immediately amended its complaint and prayed for issuance of process of attachment against the bunkers and stores. On May 25, 1982, the clerk of court ordered the U.S. Marshal to initiate process. Before executing the writ of attachment, the marshal had notified the ship's local husbanding agent of the impending seizure. The agent immediately contacted the attorney in Savannah who represented Bottacchi's interests. Bottacchi, pursuant to Supplemental Rule E(5), effectuated an immediate release of the property after posting security for Leonhardt's claims.

On May 26, 1982, the district court convened to hear Bottacchi's objections to the attachment. Bottacchi at this time argued that Rule B(1) violated due process in failing to provide adequate judicial supervision of the attachment process and that, because the rule constituted the sole authority for the court's issuance of the writ, the writ had to be dissolved. Upon hearing this objection, the court directed Bottacchi to incorporate the objection in a formal motion, and on June 4, 1982, Bottacchi moved the court, pursuant to Supplemental Rule E(8), to dismiss the complaint and quash the process of attachment. The court heard the motion on July 22, 1982. Noting that Bottacchi not only had preseizure notice but also enjoyed an immediate postseizure hearing, the court found that Bottacchi had been accorded due process under the circumstances. ⁵ The court, however, proceeded to hold Rule B(1) invalid under the due process clause, citing the Supreme Court's decision in Sniadach v. Family Finance Corp., 395 U.S. 337, 89 S.Ct. 1820, 23 L.Ed.2d 349 (1969), and a line of similar cases. The constitutional deficiency resulted from the absence of: (1) procedural safeguards in place of preseizure notice and hearing; and (2) a prompt postattachment hearing. Schiffahartsgesellschaft Leonhardt & Co. v. A. Bottacchi S.A. de Navegacion, 552 F.Supp. 771, 781-84 (S.D.Ga.1982).

On May 29, 1984, a panel of this court reversed the district court. 732 F.2d 1543 (11th Cir.1984). The panel held that because Bottacchi was accorded due process in the particular case, the lower court erred in proceeding to determine the facial constitutionality of Rule B(1). Id. at 1549. We have taken the case en banc to address the confusion that appears to have arisen in the district courts over the relationship between Rule B(1) and the courts' inherent admiralty powers. The court below, as have others, ⁶ viewed too narrowly its traditional maritime powers and, believing that its sole authority to issue a writ of attachment derived from Rule B(1), found it necessary to pass on the facial constitutionality of the rule. We find that the district courts should take a more expansive view of their power to fashion admiralty procedures and that, as a result, the constitutionality of Rule B(1) need not, and should not, be reached.

II.

We note at the outset that, if the district court had the power to issue the writ of attachment independent of its authority derived under Rule B(1), a finding that Bottacchi was accorded due process would make a ruling on the facial constitutionality of Rule B(1) unnecessary and therefore unwarranted. We conclude that the district court had such power.

The Constitution established a separate jurisdictional base in the federal courts for admiralty cases in article III, section 2, clause 1, ⁷ which extends the judicial power of the United States "to all Cases of admiralty and maritime Jurisdiction." ⁸ This grant of jurisdiction implies the adoption of the then existing maritime law as the law of the United States:

As there could be no cases of "admiralty and maritime jurisdiction," in the absence of some maritime law under which they could arise, the provision presupposes the existence in the United States of a law of that character. Such a law or system of law existed in colonial times and during the Confederation, and commonly was applied in the adjudication of admiralty and maritime cases. It embodied the principles of the general maritime law, sometimes called the law of the sea, with modifications and supplements adjusting it to conditions and needs on this side of the Atlantic. The framers of the Constitution were familiar with that system and proceeded with it in mind. Their purpose was not to strike down or abrogate the system, but to place the entire subject--its substantive as well as its procedural features--under national control, because of its intimate relation to navigation and to interstate and foreign commerce. In pursuance of that purpose the constitutional provision was framed and adopted.... After the Constitution went into effect, the substantive law theretofore in force was not regarded as superseded or as being only the law of the several states, but as having become the law of the United States....

Panama Railroad v. Johnson, 264 U.S. 375, 385-86, 44 S.Ct. 391, 393, 68 L.Ed. 748 (1924). Congress, however, retained the power to alter substantive and procedural maritime rules: ⁹ "When the Constitution was adopted, the existing maritime law became the law of the United States 'subject to power in Congress to alter, qualify or supplement it as experience or changing conditions might require.' " Detroit Trust Co. v. Barlum S.S. Co., 293 U.S. 21, 43, 55 S.Ct. 31, 38, 79 L.Ed. 176 (1934) (quoting Panama Railroad, 264 U.S. at 386, 44 S.Ct. at 393). ¹⁰ Federal courts, then, are empowered to apply maritime procedure and law as it existed at the time of the Constitution's adoption, with such modifications as changing needs and circumstances require, ¹¹ subject to congressional alteration of that law.

The Supreme Court in Manro v. Almeida, 23 U.S. (10 Wheat.) 473, 6 L.Ed. 369 (1825), held that maritime attachment was a part of American jurisprudence at the time the Constitution was adopted. Manro sought to recover for funds wrongfully taken by Almeida while on board a ship off the Capes of the Chesapeake. Almeida left the country and a writ of attachment was issued against certain of his property. The district court dismissed Manro's libel on the demurrer of Almeida and restored the goods attached. The Supreme Court, on appeal, limited its inquiry to "whether the court below erred in refusing to the libellant the process of attachment on the case made out in his libel." 23 U.S. (10 Wheat.) at 484. The central issue before the Court was whether the remedy of attachment was available in admiralty to require the presence of a respondent located outside the court's jurisdiction. 23 U.S. (10 Wheat.) at 487-88.

In answering the question in the affirmative, the Court reviewed the history of attachment in American admiralty law in light of the Process Act of 1789, ¹² which required federal courts to apply civil rather than common law ¹³ in maritime cases, and the Process Act of 1792, ¹⁴ which directed courts to employ procedures "according to the...