U.S. Oil Trading LLC v. M/V Vienna Express, 121918 FED2, 17-0922-cv

Docket Nº:17-0922-cv, 17-0931-cv[*]
Opinion Judge:KEARSE, CIRCUIT JUDGE.
Party Name:U.S. OIL TRADING LLC, Plaintiff-Appellant, v. M/V VIENNA EXPRESS, her tackle, boilers, apparel, furniture, engines, appurtenances, etc., in rem, M/V SOFIA EXPRESS, her tackle, boilers, apparel, furniture, engines, appurtenances, etc., in rem, Defendants-Appellees, HAPAG-LLOYD AKTIENGESELLSCHAFT, as claimant to the in rem defendant M/V VIENNA EX...
Attorney:JOHN R. KEOUGH, New York, New York (Casey D. Burlage, Corey R. Greenwald, George G. Cornell, Clyde & Co US, New York, New York, on the brief), for U.S. Oil Trading LLC. GINA M. VENEZIA, New York, New York (Michael Fernandez, Michael J. Dehart, Freehill Hogan & Mahar, New York, New York, on the br...
Judge Panel:Before: KEARSE, CABRANES, and LOHIER, Circuit Judges.
Case Date:December 19, 2018
Court:United States Courts of Appeals, Court of Appeals for the Second Circuit
 
FREE EXCERPT

U.S. OIL TRADING LLC, Plaintiff-Appellant,

v.

M/V VIENNA EXPRESS, her tackle, boilers, apparel, furniture, engines, appurtenances, etc., in rem, M/V SOFIA EXPRESS, her tackle, boilers, apparel, furniture, engines, appurtenances, etc., in rem, Defendants-Appellees,

HAPAG-LLOYD AKTIENGESELLSCHAFT, as claimant to the in rem defendant

M/V VIENNA EXPRESS, Third-Party-Plaintiff-Counter-Claimant-Counter-Defendant-Appellee,

v.

U.S. OIL TRADING LLC, Counter-Defendant-Third-Party-Cross-Defendant-Appellant,

ING BANK N.V., Third-Party-Defendant-Counter-Claimant-Cross-Claimant-Appellee,

O.W. BUNKER GERMANY GMBH, Third-Party-Defendant-Counter-Claimant-Appellee,

O.W. BUNKER & TRADING A/S, CREDIT AGRICOLE CORPORATE & INVESTMENT BANK, a division or arm of Credit Agricole S.A., Third-Party-Defendants.

HAPAG-LLOYD AKTIENGESELLSCHAFT, Plaintiff-Counter-Defendant-Appellee,

v.

U.S. OIL TRADING LLC, Defendant-Cross-Defendant-Appellant,

O.W. BUNKER GERMANY GMBH, Defendant-Counter-Claimant-Appellee,

ING BANK N.V., Defendant-Cross-Claimant-Counter-Claimant-Appellee,

O.W. BUNKER & TRADING A/S, CREDIT AGRICOLE S.A., O.W. BUNKER USA, INC., CREDIT AGRICOLE CORPORATE & INVESTMENT BANK, Defendants. [**]

Nos. 17-0922-cv, 17-0931-cv[*]

United States Court of Appeals, Second Circuit

December 19, 2018

Argued: April 19, 2018

Appeals by U.S. Oil Trading LLC ("USOT") from orders and May 2, 2017 partial final judgments of the United States District Court for the Southern District of New York, Valerie E. Caproni, Judge, rejecting claims by USOT that it was entitled to assert maritime liens against vessels, owned or chartered by Hapag-Lloyd Aktiengesellschaft ("Hapag"), to which USOT, pursuant to arrangements with and among other entities, physically supplied marine fuel for which USOT was not paid following the bankruptcies of the entities involved in the supply contracts with USOT or Hapag. The district court denied USOT's motions for summary judgment on its maritime-lien claims and entered partial final judgments dismissing those claims, ruling that the claims were governed by the Commercial Instruments and Maritime Liens Act ("CIMLA"), 46 U.S.C. § 31301 et seq., and that physical suppliers who were subcontractors were not entitled to maritime liens because their fuel sales were not made "on the order of the owner or a person authorized by the owner" of the vessel, id. § 31342(a). See Clearlake Shipping PTE Ltd. v. O.W. Bunker (Switzerland) SA, 239 F.Supp.3d 674 (S.D.N.Y. 2017). On appeal, USOT contends principally that the district court erred in finding it was not entitled to a maritime lien in the absence of a contractual or agency relationship with the vessels or with an authorized entity specified in CIMLA, and that USOT was entitled to the liens because Hapag's purchase orders specified that the physical supplier of the fuel was to be USOT. We conclude that purchase orders and admissions by Hapag in these actions permit a conclusion that Hapag directed that USOT be the subcontractor to supply the fuel, thereby bringing USOT within an established exception that allows maritime liens to be asserted by subcontractors whose selection was controlled or directed by the vessel's owner/charterer. We therefore vacate the judgments and remand for trial on the issue of whether Hapag directed that USOT be the physical supplier.

Vacated and remanded.

JOHN R. KEOUGH, New York, New York (Casey D. Burlage, Corey R. Greenwald, George G. Cornell, Clyde & Co US, New York, New York, on the brief), for U.S. Oil Trading LLC.

GINA M. VENEZIA, New York, New York (Michael Fernandez, Michael J. Dehart, Freehill Hogan & Mahar, New York, New York, on the brief), for M/V VIENNA EXPRESS and Hapag-Lloyd Aktiengesellschaft.

BRUCE G. PAULSEN, New York, New York (Brian P. Maloney, Seward & Kissel, New York, New York, on the brief), for ING Bank N.V.

JUSTIN M. HEILIG, New York, New York (Hill Rivkins, New York, New York; Andrew B. Kratenstein, Darren Azman, McDermott Will & Emery, New York, New York, on the brief), for O.W. Bunker Germany GmbH.

Before: KEARSE, CABRANES, and LOHIER, Circuit Judges.

KEARSE, CIRCUIT JUDGE.

In these appeals, U.S. Oil Trading LLC ("USOT" or "U.S. Oil")-the plaintiff in No. 17-0922, and an interpleader defendant in No. 17-0931-challenges (a) orders entered in the United States District Court for the Southern District of New York, Valerie E. Caproni, Judge, denying USOT's motions for summary judgment on its claims of entitlement to maritime liens for physically supplying marine fuel ("bunkers") to certain vessels owned or chartered by interpleader plaintiff Hapag-Lloyd Aktiengesellschaft ("Hapag"), and (b) partial final judgments entered on May 2, 2017, dismissing USOT's maritime-lien claims. Pursuant to the Commercial Instruments and Maritime Liens Act ("CIMLA"), 46 U.S.C. § 31301 et seq., which permits a maritime lien to be asserted by "a person providing necessaries to a vessel on the order of the owner or a person authorized by the owner," id. § 31342(a)-see also Hapag-Lloyd Aktiengesellschaft v. U.S. Oil Trading LLC, 814 F.3d 146, 151 n.13 (2d Cir. 2016) ("[f]or the purposes of § 31342, bunkers are 'necessaries'")-the district court denied USOT's motions for summary judgment and entered the partial judgments dismissing USOT's claims for liens, ruling that USOT had not provided the fuel to the vessels on the order of the owner or a person authorized by the owner to place such an order. On appeal, USOT contends that the district court erred in finding it was not entitled to maritime liens in the absence of a direct contractual or agency relationship with the vessels or with an authorized entity specified in CIMLA, arguing principally that it was entitled to the liens because Hapag's purchase orders specified that the physical supplier of the fuel was to be USOT. For the reasons that follow, we conclude that purchase orders and admissions by Hapag in these actions permit a finding that Hapag directed that USOT be the subcontractor to supply the fuel, thereby bringing USOT within an established exception that allows maritime liens to be asserted by subcontractors whose selection was controlled or directed by the vessel's owner/charterer or authorized agent. We therefore vacate the judgment and remand for trial on the issue of whether Hapag directed that USOT be the physical supplier.

I. BACKGROUND

The present cases are among many that have their origin in the financial collapse of O.W. Bunker & Trading A/S ("O.W. Denmark") and its subsidiaries and affiliates (collectively the "O.W. Bunker Group"), a global network of traders and suppliers of bunkers. See generally ING Bank N.V. v. M/V TEMARA, 892 F.3d 511, 515 (2d Cir. 2018) ("Temara"); see also Chemoil Adani Pvt. Ltd. v. M/V MARITIME KING, No. 16-3944, 2018 WL 3359609 (2d Cir. July 10, 2018) ("Chemoil"); Aegean Bunkering (USA) LLC v. M/T AMAZON, 730 Fed.Appx. 87 (2d Cir. 2018) ("Aegean"); O'Rourke Marine Services L.P. v. M/V COSCO HAIFA, 730 Fed.Appx. 89 (2d Cir. 2018) ("O'Rourke"). Except as indicated below, the following facts, drawn from statements submitted by various parties pursuant to Rule 56.1 of the Local Rules for the Southern District of New York ("Rule 56.1 Statements"), are not in dispute.

A. USOT's Delivery of Bunkers to Hapag Vessels

In the fall of 2014, Hapag was the owner and operator of the M/V VIENNA EXPRESS and the M/V SOFIA EXPRESS, and was the time charterer of the M/V SEASPAN HAMBURG and the M/V SANTA ROBERTA (collectively the "Subject Vessels" or "Vessels"). The O.W. Bunker Group, an international operation that both supplied bunkers to ships and arranged the supply of bunkers by others, included O.W. Denmark, O.W. Bunker Germany GmbH ("O.W. Germany" or "OWG"), and O.W. Bunker USA Inc. ("O.W. USA"). USOT was in the business of physically supplying bunkers to oceangoing vessels.

In September-October 2014, Hapag, upon receiving fuel replenishment requests from the masters of the respective Vessels, solicited fuel supply bids from a number of potential counterparties. In response, O.W. Germany and several others submitted bids. O.W. Germany, to do so, had requested quotes from its affiliate O.W. USA, which was in charge of the O.W. Bunker Group's bunker procurement in the Americas. O.W. USA, to obtain the necessary information, had contacted physical suppliers, including USOT. For two of the Hapag Vessels, O.W. Germany submitted several bids, each bid describing fuel to be provided by a different physical supplier; for each of the four Vessels, O.W. Germany submitted one bid that listed USOT as the physical supplier. Hapag analyzed the submitted responses in internal spreadsheets that set out for each bid the bidder, the price, details as to fuel quality, and the identity of the physical supplier.

For each of the Subject Vessels, Hapag accepted the O.W. Germany bid that...

To continue reading

FREE SIGN UP