Thyssenkrupp Materials NA, Inc. v. M/V Kacey

• Decision Date: 16 February 2017
• Docket Number: 15 Civ. 3800 (ER)
• Parties: THYSSENKRUPP MATERIALS NA, INC., Plaintiff, v. M/V KACEY, her engines, boilers, tackle, etc., SPV 1 LLC, Technomar Shipping Co. Inc., Defendants.
• Court: U.S. District Court — Southern District of New York

236 F.Supp.3d 835

THYSSENKRUPP MATERIALS NA, INC., Plaintiff,

v.M/V KACEY, her engines, boilers, tackle, etc., SPV 1 LLC, Technomar Shipping Co. Inc., Defendants.

15 Civ. 3800 (ER)

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

Signed February 16, 2017

Harold M. Kingsley, Kingsley Kingsley & Calkins, Hicksville, NY, for Plaintiff.

Garth S. Wolfson, Edward A. Keane, Mahoney & Keane, LLP, New York, NY, for Defendants.

OPINION AND ORDER

Edgardo Ramos, U.S.D.J.

Thyssenkrupp Materials NA, Inc. ("Plaintiff") brings this admiralty action against M/V Kacey, SPV 1 LLC ("SPV 1") and Technomar Shipping Co. Inc. ("Technomar" and together, the "Defendants") for loss and damage to its cargo. Before this Court is the Defendants' motion to dismiss for forum non conveniens pursuant to Fed. R. Civ. P. 12(c), on the basis of a forum selection clause in the bills of lading issued for the shipment of Plaintiff's cargo.

For the reasons discussed below, the Defendants' motion is GRANTED.

I. Background

Plaintiff is the owner or duly authorized representative of the owners of 447 pieces of steel pipe shipped on board the vessel M/V Kacey. Complaint at ¶ 2, Complaint Schedule A. The M/V Kacey is owned by SPV 1 and managed by Technomar. Notice of Motion at ¶ 3.

On November 14, 2014, two bills of lading¹ were issued for carrying the cargo on the M/V Kacey from Subric, Philippines to Houston, Texas. Complaint Schedule A, Notice of Motion Exhibit C. The bills of lading contained a forum selection clause which states that "[a]ny dispute arising under this Bill of Lading shall be decided in the country where the Carrier has his principal place of business, and the law of such country shall apply except as provided elsewhere herein." Notice of Motion Exhibit C (Bills of Lading) at ¶ 32. The bills of lading define "carrier," inter alia, as the owner of the vessel, in this case, SPV 1. Id. at ¶ 1.

Plaintiff filed the instant case on May 15, 2015, bringing an in rem action against the M/V Kacey, and in personam actions against SPV 1 and Technomar for the loss and damage of the steel pipes. The precise cause of the damage is not stated. On August 13, 2015, Defendants filed an answer asserting twenty-one affirmative defenses. On May 6, 2016, Defendants filed the instant motion to dismiss for forum non conveniens pursuant to Rule 12(c).

II. Legal Standard

1. Rule 12(c) Motion to Dismiss

A party may move for judgment on the pleadings "[a]fter the pleadings are closed—but early enough not to delay trial." Fed. R. Civ. P. 12(c). A Rule 12(c) motion should be granted "if, from the pleadings, the moving party is entitled to judgment as a matter of law." Burns Int'l Sec. Servs., Inc. v. Int'l Union, United Plant Guard Workers of Am. (UPGWA) & Its Local 537, 47 F.3d 14, 16 (2d Cir. 1995) (per curiam).

In deciding a 12(c) motion, the Court may consider "the complaint, the answer, any written documents attached to them, and any matter of which the court can take judicial notice for the factual background of the case." L–7 Designs, Inc. v. Old Navy, LLC , 647 F.3d 419, 422 (2d Cir. 2011) (quoting Roberts v. Babkiewicz , 582 F.3d 418, 419 (2d Cir. 2009) ). The Court may also consider documents incorporated into the complaint by reference or integral to the complaint, provided there is no dispute regarding their authenticity, accuracy, or relevance. Id. ; see also Piazza v. Florida Union Free Sch. Dist. , 777 F.Supp.2d 669, 677 (S.D.N.Y. 2011) (12(c) motion).

2. Forum Non-Conveniens

The appropriate procedural mechanism for filing a motion to enforce a forum selection clause designating a foreign forum is a motion to dismiss for forum non conveniens. Atl. Marine Const. Co. v. U.S. Dist. Court for W. Dist. of Texas, ––– U.S. ––––, 134 S.Ct. 568, 580, 187 L.Ed.2d 487 (2013). The doctrine of forum non conveniens allows a court to dismiss an action "even if the court is a permissible venue with proper jurisdiction over the claim." LaSala v. Bank of Cyprus Pub. Co. Ltd., 510 F.Supp.2d 246, 254 (S.D.N.Y. 2007) (quoting Carey v. Bayerische Hypo-und Vereinsbank AG, 370 F.3d 234, 237 (2d Cir. 2004) ). "A decision to grant or deny a motion to dismiss a cause of action under the doctrine of forum non conveniens lies wholly within the broad discretion of the district court." Scottish Air Int'l, Inc. v. British Caledonian Grp., PLC, 81 F.3d 1224, 1232 (2d Cir. 1996).

Ordinarily, a three-step analysis guides the exercise of this discretion.² If there is a forum selection clause at issue, however, the calculus is altered because a valid forum selection clause is given "controlling weight in all but the most exceptional cases." Atlantic , 134 S.Ct. at 581 ;³ see also M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 10, 92 S.Ct. 1907, 32 L.Ed.2d 513 (1972) (forum selection clauses are "prima facie valid" and should be enforced unless demonstrated to be "unreasonable" under the circumstances). In such instances, the Court must determine: (1) whether the forum selection clause is valid, and (2) whether public interest factors nevertheless counsel against its enforcement. Atlantic, 134 S.Ct. at 581–82 ; Midamines SPRL Ltd. v. KBC Bank NV, No. 12 CIV. 8089 (RJS), 2014 WL 1116875 at *3 (S.D.N.Y. Mar. 18, 2014).

III. Discussion

A. Forum Non Conveniens

In the Second Circuit, a forum selection clause is presumptively valid if it was reasonably communicated to the party resisting enforcement, is mandatory and not merely permissive, and covers the claims and parties involved in the suit. Phillips v. Audio Active Ltd., 494 F.3d 378, 383 (2d Cir. 2007). To overcome this presumption of enforceability, Plaintiff has the burden to make "a sufficiently strong showing that ‘enforcement would be unreasonable or unjust, or that the clause was invalid for such reasons as fraud or overreaching.’ " Id. at 383–84 (citing Bremen, 407 U.S. at 15, 92 S.Ct. 1907 ). Additionally, when the Carriage of Goods by Sea Act ("COGSA") applies to the bill of lading at issue, a forum selection clause is unenforceable if "the substantive law to be applied will reduce the carrier's obligations to the cargo owner below what COGSA guarantees." Vimar Seguros v. Reaseguros, S.A. v. M/V Sky Reefer, 515 U.S. 528, 539, 115 S.Ct. 2322, 132 L.Ed.2d 462 (1995). The parties agree that COGSA applies to this case. Defendants' Motion to Dismiss at 12, Plaintiff's Opposition at 4.

The two bills of lading issued for Plaintiff's cargo, which are incorporated by reference in the Complaint and appended to the Defendants' Notice of Motion, states that "[a]ny dispute arising under this Bill of Lading shall be decided in the country where [SPV 1] has his principal place of business." Notice of Motion Exhibit C (Bills of Lading) at ¶ 32. The parties disagree on whether SPV 1's principal place of business is the Marshall Islands or Greece. Since Defendants assert that this disagreement is irrelevant for purposes of their motion, this Court will presume that SPV 1's principal place of business is Greece as Plaintiff contends. Defendants' Motion to Dismiss at 10.

Plaintiff does not dispute that the forum selection clause was reasonably communicated, is mandatory, and that the claims and parties involved in the instant action are subject to the clause. It argues that the Court should nevertheless deny the motion because Greek law does not recognize the in rem action against the M/V Kacey or the in personam action against Technomar. Plaintiff's Opposition at 5. Plaintiff also "does not oppose the proposed litigation in Greece," but requests this Court to stay the instant action and retain jurisdiction to ensure that the Greek litigation complies with applicable U.S. law. Id. at 2.⁴

1. Plaintiff fails to show that it will lose its in rem action to the detriment of its substantive rights

Plaintiff asserts that its substantive rights under COGSA will be reduced because Greek law does not recognize in rem actions. This argument fails for two reasons. First, the weight of authority in this district holds that the inability to proceed in rem in the chosen forum is not sufficient by itself to defeat the presumed enforceability of the forum selection clause. Uniwire Trading LLC v. M/V Wladyslaw Orkan, 622 F.Supp.2d 15, 22 (S.D.N.Y. 2008) (collecting cases); Salim Oleochemicals, Inc. v. M/V SHROPSHIRE, 177 F.Supp.2d 159, 161 (S.D.N.Y. 2001) (same). The majority view is that in rem actions are generally "duplicative of the in personam claims against the carrier(s)," and do not confer any further benefit other than providing an additional mechanism for enforcement. Uniwire Trading LLC, 622 F.Supp.2d at 22–23. This Court agrees. Plaintiff has not demonstrated that the in rem action against the M/V Kacey will confer to Plaintiff any substantive benefits in addition to those in its in personam action against SPV 1.

Second, while Plaintiff explains that Greek domestic law does not recognize in rem actions, it fails to account for the application of the Hague-Visby Rules. The Hague-Visby Rules, which is an amended version of the original Hague Rules, is a set of international rules governing bills of lading. Kreta Shipping, S.A. v. Preussag Int'l Steel Corp., 192 F.3d 41, 46 n.5 (2d Cir. 1999). Notably, the Hague-Visby Rules contain a provision similar to Section 3(8) of COGSA, which appears to keep in rem actions intact by stating, "[a]ny clause ... in a contract of carriage relieving the carrier or the ship from liability ... or lessening such liability ... shall be null and void." See Hague-Visby Rules, Art. III, § (8) (emphasis added); see also Man Ferrostaal, Inc. v. M/V Akili, 704 F.3d 77, 85 (2d Cir. 2012) (noting that the Hague-Visby Rules prohibit waiver of in rem liability). In other words, in the context of this case, the rule would serve to insure that Plaintiff is not deprived of its in rem cause of action because it is being made to litigate in a foreign forum. The bills of lading at issue require application of the Hague-Visby Rules. See Notice of Motion Exhibit...