WESLEY, Circuit Judge:
This admiralty law dispute arises from a distinctly international transaction: a Chinese company contracted to transport goods from Brazil to China aboard a Libe
rian vessel. The existence of so many foreign interests yields an inherently federal choice-of-law question — one we resolve via application of maritime eonflictsof-law principles.
Background
Plaintiff-Appellant Blue Whale Corporation (“Blue Whale”), a foreign company,
entered into a charter party (a maritime contract) with Defendant-Appellee Grand China Shipping Development Company, Ltd. (“Development”), a Chinese company, on May 25, 2011. The charter party provided for transport of 250,000 metric tons of iron ore from Brazil to China aboard a Blue Whale vessel registered in the republic of Liberia. The contract purportedly required Development to pay 98% of the total freight costs to Blue Whale within seven days of loading the iron ore; allegedly, Development failed to make this payment. Blue Whale therefore held the vessel and its contents until Development satisfied the claimed debt, resulting in more than $1 million in damages borne by Blue "Whale. Blue Whale commenced arbitration against Development in London pursuant to the charter party’s clause specifying that “[a]ny disputes arising under the Contract,” if not settled amicably, “shall be referred to arbitration in London [with] British law to apply.” The arbitration is ongoing.
On March 26, 2012, Blue "Whale filed a complaint in the United States District Court for the Southern District of New York seeking to attach property belonging to Development’s alleged alter ego, Defendant-Appellee HNA Group Company, Ltd. (“HNA”), also a Chinese company, in anticipation of a future arbitration award against Development. Rule B of the Supplemental Rules for Certain Admiralty and Maritime Claims (“Rule B”) allows plaintiffs to seek an attachment of “defendant’s tangible or intangible personal property— up to the amount sued for — in the hands of garnishees named in the process,” “[i]f a defendant is not found within the district” at the time the complaint is filed. Fed. R.CrvP. Supp. R. B(l)(a). Blue Whale alleged that Development and HNA “are in fact a single business enterprise” and that the district court should allow Blue Whale to pierce the corporate veil to reach in-district HNA assets of approximately $1.3 million.
On May 17, 2012, the district court (Nathan,
J.)
issued an order authorizing attachment of HNA’s holdings in third-party Pacific American Corporation — a privately-held direct subsidiary of HNA based in New York — in an amount up to approximately $1.3 million. HNA subsequently moved to vacate the district court’s maritime attachment order under Rule E(4)(f), which provides that a person claiming interest in attached property “shall be entitled to a prompt hearing at which the plaintiff shall be required to show why the arrest or attachment should not be vacated.” Fed.R.Civ.P. Supp. R. E(4)(f).
Under Rule B, attachment is only appropriate if,
inter alia,
the plaintiff has a valid prima facie admiralty claim against the defendant. Neither party disputed that Blue Whale had alleged a claim sounding in admiralty and that the court had maritime jurisdiction. However, the parties disagreed over what substantive body of law controlled whether Blue Whale had alleged a valid prima facie claim to pierce the corporate veil. HNA argued that English law governed pursuant to the
charter party’s choice-of-law provision and that Blue Whale had failed to allege sufficient facts to support a prima facie alter-ego claim. In response, Blue Whale argued that federal common law controlled the inquiry because Rule B is procedural in nature and, in addition, because “it is well-settled that ‘federal courts sitting in admiralty must apply federal common law when examining corporate identity.’ ”
Memorandum of Law in Opposition to Motion to Vacate Maritime Rule B Attachment, at 8-9,
Blue Whale Corp. v. Grand China Shipping Dev. Co., Ltd., et al.,
No. 12 Civ. 02213 (AJN) (S.D.N.Y.2012).
The district court separately analyzed the two elements required for Blue Whale’s claim: (1) whether the claim sounded in admiralty; and (2) whether the claim was prima facie valid. First, the court held that whether Blue Whale adequately pled an admiralty claim was a procedural question governed by federal maritime law because it related to the court’s subject matter jurisdiction (a point not disputed by the parties). The court therefore exercised maritime jurisdiction over the claim. Second, the district court held that the substantive question of whether Blue Whale had pled a valid prima facie alter-ego claim was controlled by English law pursuant to the contractual choice-of-law provision. Under English law, the court concluded that Blue Whale had not alleged an adequate prima facie claim to pierce the corporate veil, and therefore vacated the attachment.
Supported by Amicus Curiae White Rosebay Shipping S.A. (“White Rosebay”),
Blue Whale appeals from the district court’s January 11, 2013 order vacating the prior Rule B maritime attachment order against HNA.
Discussion
“We review a district court’s decision to vacate a maritime attachment for abuse of discretion; however, we review de novo any legal determinations on which this discretion rests.”
Williamson v. Recovery Ltd. P’ship,
542 F.3d 43, 48 (2d Cir.2008). This Court has interpreted Rule B to permit a plaintiff to obtain an order of attachment if it can show that
1) it has a valid prima facie admiralty claim against the defendant; 2) the defendant cannot be found within the district; 3) the defendant’s property may be found within the district; and 4) there is no statutory or maritime law bar to the attachment.
Aqua Stoli Shipping Ltd. v. Gardner Smith Pty Ltd.,
460 F.3d 434, 445 (2d Cir.2006),
overruled on other grounds by Shipping Corp. of India Ltd. v. Jaldhi Overseas Pte Ltd.,
585 F.3d 58 (2d Cir.2009). If a plaintiff fails to make this showing when challenged under Rule E, a district court must vacate the prior order of attachment.
Id.
The principal issue on appeal is whether Blue Whale satisfied its burden of pleading a valid prima facie admiralty claim against HNA in satisfaction of the first prong of
Aqua Stoli.
As the district court recognized, this evaluation requires us to answer two questions: (1) whether Blue Whale’s claim against HNA sounds in admiralty; and (2) whether the claim is prima facie valid. Each of these questions, in turn, necessitates determining the governing body of law. For the reasons explained below, we conclude that the district court properly applied federal maritime law to the procedural question of whether Blue Whale’s claim sounds in admiralty, and we agree that the claim does sound in admiralty because it arose out of a maritime contract.
We also agree with the district court that the issue of the claim’s prima facie validity is a substantive inquiry. We conclude, however, that the district court’s application of English law to this question was improper because the charter party’s choice-of-law provision does not govern Blue Whale’s collateral alter-ego claim against HNA. Instead, we draw on maritime choice-of-law principles to hold that although federal common law does not govern every claim of this nature, federal common law does apply here, primarily because of the collateral claim’s close ties to the United States. We remand for reconsideration by the district court of the prima facie validity of Blue Whale’s alter-ego claim under federal common law.
I. The Rule B Inquiry Is Procedural in Part and Substantive in Part
“There is a split of authority” in the Southern District of New York on the issue of what law governs “whether [a] plaintiff has pled a facially valid admiralty claim ... and the Second Circuit has not ruled on it.”
Al Fatah Int’l Nav. Co. Ltd. v. Shivsu Canadian Clear Waters Tech. (P) Ltd.,
649 F.Supp.2d 295, 299 (S.D.N.Y.2009). Some district courts within this Circuit presume that “federal law governs all questions concerning the validity of a Rule B attachment.”
Harley Mullion & Co. Ltd. v. Caverton Marine Ltd.,
No. 08-ev-5435 (BSJ), 2008 WL 4905460, at *2 (S.D.N.Y. Aug. 7, 2008) (assessing whether plaintiffs pled a valid maritime claim).
Other district courts reason that despite Rule B’s “undoubted[ ]” status as a procedural rule, “Rule B itself does not provide the basis for determining the existence of a valid prima facie admiralty claim,” and instead, “the existence of a valid prima facie claim turns on substantive law.”
Al Fatah,
649 F.Supp.2d at 300.
A. Whether a Claim Sounds in Admiralty Is a Procedural Question Governed by Federal Maritime Law
Despite the divide, what is clear is that federal law controls the procedural inquiry, namely, whether a plaintiffs claim sounds in admiralty.
See id.
at 299 n. 4;
Euro Trust Trading S.A. v. Allgrains U.K. Co.,
No. 09 Civ. 4483(GEL), 2009 WL 2223581, at *3 (S.D.N.Y. July 27, 2009). This question is inherently procedural by virtue of its relationship to the courts’ subject matter jurisdiction and, thus, is controlled by federal maritime law. Here, the parties do not dispute that Blue Whale’s claim sounds in admiralty because it arises out of a maritime contract. The more difficult question is whether federal law also controls a court’s assessment of the validity of a plaintiffs prima facie claim.
B. Whether a Claim Is Prima Facie Valid Is a Substantive Question Governed by the Relevant Substantive Law
If the prima facie validity component of the inquiry is procedural in nature, federal law will control; if it is substantive, the relevant substantive body of law will control. The district courts in the Southern District of New York have laid out the competing arguments for us. In
Harley Mullion & Co. Ltd. v. Caverton Marine Ltd.,
the court explained its reasoning for finding that “the better view is that federal law governs all questions concerning the validity of a Rule B attachment” as follows:
If, in order to comply with the requirements set forth in
Aqua Stoli
a claim must be valid under the substantive law that will govern the underlying action, parties initiating or responding to a Rule 4(E) [sic] challenge would be routinely required to litigate issues of foreign law and courts would have to probe into the merits of the underlying claim. This sort of detailed examination is inappropriate at a Rule 4(E) [sic] hearing as it would undermine the prima facie standard and is at odds with the limited inquiry contemplated by
Aqua Stoli.
No. 08-cv-5435 (BSJ), 2008 WL 4905460, at *2 (S.D.N.Y. Aug. 7, 2008) (internal
quotation marks omitted). By contrast, in
Al Fatah,
the district court rejected this position because
Rule B itself does not provide the basis for determining the existence of a valid prima facie admiralty claim.... [T]he existence of a valid prima facie claim turns on substantive law. "Where the substantive law underlying the claim is foreign, it would make no sense to determine the claim’s prima facie validity under U.S. law.
649 F.Supp.2d at 300. Then-District Judge Chin further explained that his “conclusion [was] not inconsistent with
Aqua Stoli[
] ” because even if an inquiry conducted under foreign law might be “more difficult” than the same assessment under United States law, “it need not necessarily be any more rigorous.”
Id.
We agree with Judge Chin’s reasoning. Admiralty law provides the remedy; substantive law defines the right to the remedy. Assessing the prima facie validity of a claim is a substantive inquiry that should be governed by the relevant substantive law. By contrast, whether a claim sounds in admiralty is a procedural question, the answer to which supplies the source of a court’s subject matter jurisdiction.
As the district court here recognized, the decisions incorporating the reasoning in
Harley Mullion
typically do so in the context of resolving a dispute over whether a plaintiff has sufficiently alleged an
admiralty
claim — not whether a plaintiff has pled a
valid prima facie claim. See Indagro S.A. v. Bauche S.A.,
652 F.Supp.2d 482, 490 (S.D.N.Y.2009) (“"Where the question is not whether the claim is maritime in nature, but rather whether the plaintiff has pled a ‘valid’ claim at all, courts in this District have considered whether the plaintiff alleged a prima facie claim under the substantive law governing the parties’ dispute.”). As a result, in these cases, statements to the effect that all Rule B queries are procedural in nature and are governed by federal law effectively constitute dicta — no one disagrees that federal law controls the determination of whether a claim sounds in admiralty.
We hold that federal maritime law governs whether a claim sounds in admiralty and that the relevant substantive law governs whether a plaintiff has alleged a valid prima facie claim. We use substantive law to assess the prima facie validity of a plaintiffs claim because substantive law supplies the relevant measure for deciding whether or not the claim is legally sufficient. Of course, this means that courts must apply the correct substantive law— i.e., the law which defines the rights and responsibilities of the parties to the dispute. This introduces the more difficult question in this case: what substantive law controls the validity of Blue Whale’s alter-ego claim?
II. Federal Maritime Choice-of-Law Analysis Determines the Relevant Substantive Law
There are three approaches for evaluating what law governs Blue Whale’s alter-ego claim in this case: invoking the charter party’s choice-of-law provision, which specifies English law; automatically applying federal common law because the court is “examining corporate identity”; or engaging in a federal maritime choice-of-law analysis. Because we find that the charter party’s choice-of-law clause does not govern this collateral alter-ego claim, we hold that federal maritime choice-of-law principles dictate the proper controlling substantive law. In this case, a maritime choice-of-law analysis yields federal common law as the relevant governing law by virtue of the claim’s connection to the United States.
A. The Contractual Choice-of-Law Clause Does Not Control Because the Alter-Ego Claim Is Collateral
First, we reject HNA’s contention, and the district court’s conclusion, that the charter party’s choice-of-law clause requires applying English substantive law to govern this dispute.
Kalb, Voorhis & Co. v. American Financial Corp.,
8 F.3d 130, 132 (2d Cir.1993), teaches us that choice-of-law clauses in underlying contracts are “irrelevant” to assessing alter-ego claims. In that case, Kalb, the plaintiff, held debentures (collateral-free debts or notes) issued by third-party corporation Circle K.
Id.
at 131. After Circle K filed for bankruptcy under Chapter 11, Kalb sued as a creditor of Circle K to pierce the corporate veil and impose liability for the debentures on the defendant, a former controlling stockholder of Circle K.
Id.
Shortly thereafter, Circle K asserted its own rights to pierce the veil against the defendant; the question in the case was “whether a claim alleging that the debtor or bankrupt is the alter ego of its controlling stockholder” belonged to Circle K or Kalb.
Id.
at 132.
In considering the choice of law in this diversity case, we determined that it was appropriate to apply the choice-of-law principles of the forum state (New York) rather than relying on the choice-of-law clause in the debentures.
Id.
We noted that “[t]he choice of law provisions in the debentures [were] irrelevant [because t]he issue is the limited liability of shareholders of a corporation — not Circle K’s obligations under the debentures.”
Id.
Similarly, here the issue is HNA’s legal status as an alter ego of Development, not the obligations under or subsequent alleged violations of the charter party between Development and Blue Whale. Blue Whale’s claim against HNA sounds in admiralty because it arose from this maritime contract — however, the substance of the attachment claim concerns whether HNA is an alter ego of Development. This corporate identity inquiry is indeed distant from the dispute over the charter party’s provisions regarding the transport of iron ore. For this reason, we find that “the issue of piercing the corporate veil is collateral to the contract, and thus this Court is not bound by the choice of law provision.”
United Trade Assocs. Ltd. v. Dickens & Matson (USA) Ltd., Inc.,
848 F.Supp. 751, 759 (E.D.Mich.1994);
see also Wehlage v. EmpRes Healthcare Inc.,
821 F.Supp.2d 1122, 1127-28 (N.D.Cal.2011);
JSC Foreign Economic Ass’n Technostroyexport v. Int’l Dev. and Trade Servs., Inc.,
295 F.Supp.2d 366, 385-86 (S.D.N.Y.2003) (determining that action to enforce judgment was “in no way connected to or related to the performance of the shipment contracts” and that arbitration clause did not govern).
B. Federal Common Law Does Not Apply Automatically for “Examining Corporate Identity
”
Second, we reject the proposition advanced by Blue Whale and White Rose-bay that federal common law
automatically
governs the alter-ego claim. Blue
Whale and Amicus Curiae White Rosebay cite numerous cases for the proposition that
courts in this Circuit have consistently held ... [that] ‘[fjederal courts sitting in admiralty must apply federal common law when examining corporate identity.’
Clipper Wonsild Tankers Holding A/S v. Biodiesel Ventures, LLC,
851 F.Supp.2d 504, 507-08 (S.D.N.Y.2012) (quoting
In re Holbom Oil Trading Ltd.,
774 F.Supp. 840, 844 (S.D.N.Y.1991)).
However, many of these cases, as well as matters cited more broadly in support,
are focused principally on the scope of courts’ admiralty jurisdiction, rather than on the source of substantive law. Admiralty jurisdiction and federal maritime law need not go hand-in-hand,
see, e.g., Lauritzen v. Larsen,
345 U.S. 571, 73 S.Ct. 921, 97 L.Ed. 1254 (1953), even in the context of examining corporate identity.
It appears that this Court’s decision in
Kirno Hill Corp. v. Holt,
618 F.2d 982 (2d Cir.1980) (per curiam), is at the root of the principle that federal common law governs the analysis of corporate identity.
Kimo Hill
did not involve Rule B, a contract specifying choice of law, international parties or contracts, or, in fact, any quarrel over choice of law. Instead, the case centered around a dispute over personal liability for obligations under a charter party.
Id.
at 984. We applied federal maritime law, “which is the law we apply in an admiralty case,” to determine whether an undisclosed principal was bound by contracts made by an agent acting within his authority.
Id.
at 985.
Subsequent cases citing
Kimo Hill
for the proposition that federal common law dictates whether or not a maritime plaintiff has sufficiently pled a claim to pierce the corporate veil tend to proceed along one of two lines. First, there are cases like
Clipper Wonsild Tankers Holding A/S v. Biodiesel Ventures, LLC,
851 F.Supp.2d 504 (S.D.N.Y.2012), opining that courts must choose between state law and federal common law. In
Clipper,
alleged alter-ego defendants argued that plaintiffs’ Rule B claims should be governed by Texas law because of the parties’ diversity and defendants’ status as Texas corporations.
Id.
at 506-07. The district court disagreed because plaintiffs had expressly (and properly) invoked the court’s admiralty jurisdiction since a charter party lay at the center of the dispute.
Id.
at 507-08. This result strikes us as correct. When the choice is between state law and federal common law, the federal interest in maintaining uniformity in the quintessentially federal realm of admiralty supersedes any competing interest in applying state law.
See generally Am. Dredging Co. v. Miller,
510 U.S. 443, 114 S.Ct. 981, 127 L.Ed.2d 285 (1994).
Second, there are Rule B attachment cases in which district courts must grapple with foreign parties’ disputes that arose (or sometimes sank) in foreign waters. In
Arctic Ocean International, Ltd. v. High Seas Shipping Ltd.,
622 F.Supp.2d 46 (S.D.N.Y.2009), for example, a Russian plaintiff-company secured a Rule B attachment order in the Southern District of New York against a Marshall Islands defendant-company and an alleged alter-ego Canadian defendant-company.
Id.
at 47-48. In evaluating the alleged alter ego’s attack on the attachment order,
the district court assessed the prima facie validity of plaintiffs alter-ego claim under federal common law.
Id.
at 53-56. The district court applied federal common law instead of Russian law, Marshall Islands law, Canadian law or English law (which was specified by the charter party’s arbitration choice-of-law provision,
id.
at 48) because “federal courts sitting in admiralty have tended to apply federal maritime common law,”
id.
at 53 (citing
In re Holborn,
774 F.Supp. at 844).
Although the district court may well have reached the correct result in
Arctic Ocean,
we do not believe that
Kimo Hill
(or its progeny) compels courts “examining corporate identity” to apply federal common law. That said, we recognize that district courts frequently have found value in using federal common law to evaluate the validity of collateral claims in Rule B attachment proceedings. Our aim today is to clarify that the decision of which body of law to apply should be the product of a maritime choice-of-law analysis.
C. Maritime Choice-of-Law Analysis Shows that Federal Common Law Controls Because United States Law Has the Strongest Connection to the Relevant Transaction
The Supreme Court first announced the maritime conflicts-of-law test in
Lauritzen v. Larsen,
345 U.S. 571, 73 S.Ct. 921, 97 L.Ed. 1254 (1953). “The rule of
Klaxon Co. v. Stentor Electric Mfg. Co.,
313 U.S. 487 [61 S.Ct. 1020, 85 L.Ed. 1477] (1941), under which a federal court exercising its diversity jurisdiction looks to the choice-of-law doctrine of the forum state, does not govern suits invoking the court’s admiralty jurisdiction.”
Itel Containers Int’l Corp. v. Atlanttrafik Exp. Serv. Ltd.,
No. 86 Civ. 1313(RLC), 1988 WL 75262, at *2 (S.D.N.Y. July 13, 1988). Thus, when parties properly invoke admiralty jurisdiction, courts apply federal maritime choice-of-law rules.
Id.
In
Lauritzen,
a Danish seaman brought suit in the Southern District of New York under the Jones Act, 46 U.S.C. § 688, alleging that he was negligently injured aboard a ship of Danish flag and registry while in Havana harbor. 345 U.S. at 573, 73 S.Ct. 921. The ship was owned by a Danish citizen, and the injured seaman had signed the ship’s articles providing that disputes would be governed by Danish law.
Id.
Nevertheless, he sought to invoke United States law.
Id.
Recognizing that “[m]aritime law ... has attempted to avoid or resolve conflicts between competing laws by ascertaining and valuing points of contact between the transaction and the states or governments whose competing laws are
involved,”
id.
at 582, 73 S.Ct. 921, the Supreme Court laid out a multi-factor choice-of-law test,
“[t]he purpose of [which] is to assure that a case will be treated n [sic] the same way under the appropriate law regardless of the fortuitous circumstances which often determine the forum,”
id.
at 591, 73 S.Ct. 921. In
Lauritzen,
the balance of factors clearly pointed to application of Danish law: the injured seaman had minimal contacts with the United States beyond the intangible— his desire to invoke this nation’s more favorable maritime tort law.
Id.
at 592, 73 S.Ct. 921.
Here, by contrast, Blue Whale initiated this proceeding in the United States, and specifically in the Southern District of New York, because that is where HNA owns property. Blue Whale did not invoke the Southern District of New York’s admiralty jurisdiction by serendipity — the presence of HNA’s property enabled this action and, along with it, the application of federal maritime law. Furthermore, the basic tenet upon which
Lauritzen
is premised will be satisfied here by using federal common law because its application reflects an implicit “resolution of] conflicts between competing laws by ascertaining and valuing points of contact between the transaction and the states or governments whose competing laws are involved.”
Id.
at 582, 73 S.Ct. 921.
As is often the case in admiralty, we deal here with multi-national foreign parties locked in dispute as the result of an alleged breach of an international shipping contract. Indeed, part of the reason we authorize maritime attachment is the “peripatetic” nature of maritime parties, the “transitory” status of their assets,
Aqua Stoli,
460 F.3d at 443, and the need for parties to obtain security “[i]n a world of shifting assets, numerous thinly-capitalized subsidiaries, flags of convenience and flows of currencies,”.
Navalmar (U.K.) Ltd. v. Welspun Gujarat Stahl Rohren, Ltd.,
485 F.Supp.2d 399, 404 (S.D.N.Y.2007) (citing
Aurora Maritime v. Abdullah Mohamed Fahem & Co.,
85 F.3d 44 (2d Cir.1996)).
This particular case arose from a charter party between a Chinese company, Development, and another foreign company, Blue Whale, to ship iron ore from Brazil to China on a Liberian vessel. This narrative yields several potential sources of law; none have a particularly strong connection to the transaction. The facts here contrast strongly with the facts in
Lauritzen,
where all parties, the ship, and the contract itself exhibited strong ties to Denmark. 345 U.S. at 573, 73 S.Ct. 921.
Importantly, however, the relevant “transaction” in this case is
not
Development’s alleged failure to comply with the charter party — it is Blue Whale’s claim to pierce the corporate veil. The district court in this Rule B action is charged only with determining whether Blue Whale stated a prima facie valid alter-ego claim against HNA in furtherance of its motion to attach HNA’s property in New York. Accordingly, United States law has the
strongest “points of contact” with this claim by virtue of the location of HNA’s property, Blue Whale’s corresponding choice of forum and the unavailability of an alternative forum, and the absence of a dominant foreign choice of law.
On a final note, we recognize the value of simplifying the judicial process required for Rule B attachments and Rule E motions to vacate when feasible.
See generally Aqua Stoli,
460 F.3d at 443-44. As we have articulated, this does not excise the judicial obligation to apply the governing substantive law to assess the prima facie validity of a Rule B admiralty claim when challenged in a Rule E proceeding. But here, for the reasons discussed, we identify federal common law as the proper substantive body of law to govern Blue Whale’s alter-ego claim against HNA. This follows from the ideas underpinning the
Lauritzen
choice-of-law analysis and from our aim of ensuring uniformity in admiralty law whenever possible. Accordingly, we vacate the district court’s order and remand for reconsideration of the prima facie validity of Blue Whale’s Rule B alter-ego claim under federal common law.
See Williamson,
542 F.3d at 53;
Clipper,
851 F.Supp.2d at 509-10.
Conclusion
For the foregoing reasons, the order of the district court is hereby VACATED and REMANDED.