Milena Ship Management Co. v. Newcomb

804 F. Supp. 855, 1992 WL 303115
CourtDistrict Court, E.D. Louisiana
DecidedSeptember 28, 1992
DocketCiv. A. No. 92-2535
StatusPublished

This text of 804 F. Supp. 855 (Milena Ship Management Co. v. Newcomb) is published on Counsel Stack Legal Research, covering District Court, E.D. Louisiana primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Milena Ship Management Co. v. Newcomb, 804 F. Supp. 855, 1992 WL 303115 (E.D. La. 1992).

Opinion

ORDER AND REASONS

FELDMAN, District Judge.

Before this Court is the motion of Milena Ship Management Company, Ltd., and the three Maltese shipping companies which it represents, plaintiffs in this action, for the Court to order the defendants to appoint a provisional custodian to maintain and administer four vessels owned or operated by the plaintiffs which are the subject of a blocking order issued pursuant to the International Emergency Economic Powers Act.1 For the reasons that follow, the mo[857]*857tion is denied. Although the facts have been recited in a prior opinion denying the plaintiffs motion for a preliminary injunction, they will be repeated to keep the issues in perspective.

BACKGROUND

Against the background of hostilities occurring in the strife torn republic once known as Yugoslavia and the resolutions of the United Nations imposing economic sanctions on the Federal Republic of Yugoslavia (Serbia and Montenegro), President Bush issued two executive orders imposing economic sanctions on that government. In Executive Order 12808, the President blocked

all property and interests in property in the name of the Government of the Socialist Federal Republic of Yugoslavia or the Government of the Federal Republic of Yugoslavia that are in the United States, that, hereafter come within the United States, or that are or hereafter come within the possession or control of United States persons.

Executive Order 12810 prohibited all imports to the United States from Yugoslavia and all exports from the United States to Yugoslavia.

In early July, the Office of Foreign Assets Control (OFAC) issued a notification that “[a]ll entities located or organized in Serbia and Montenegro, and their foreign subsidiaries, are presumed to be owned or controlled by the Government of Yugoslavia.” This same document announced that “all assets within U.S. jurisdiction owned or controlled by these entities are to be treated as blocked.” The list of blocked Yugoslavian companies in this notice included Jugoslovanska Oceanska Plovidba (JOP).

Pursuant to this order, the U.S. Customs Service has blocked vessels in the Port of New Orleans (the M/Y Zeta and the M/V Moslavina) and the Ports of Savannah and Baltimore (the M/Y Kapetan Martinovic and the M/V Durmitor) as well as blocking some bank accounts relating to JOP.

The plaintiffs maintain that the blocking order is improper because all these vessels fly the flag of Malta, and all are owned and operated by Maltese companies (recently formed in May 1992). They say that plaintiff South Cross Shipping, Ltd. owns the Zeta and the Durmitor and plaintiff South Adriatic Bulk Shipping, Ltd. owns the Mos-lavina and the Kapetan Martinovic. All of the vessels are managed and operated by the plaintiff Milena Ship Management Co. of Malta.

JOP, an old and established company, is, however, the parent to each of the recently formed Maltese companies that currently, at least nominally, own and manage the vessels. OFAC's blocking order is based upon its conclusion that the Maltese companies are “foreign subsidiaries” of JOP so that they, like JOP (a Yugoslavian company) are presumed to be owned or controlled by the Yugoslavian government. The plaintiffs deny this claim, although the head of JOP, until a short time ago, was also the foreign minister of Montenegro.

The plaintiffs have previously sought a preliminary injunction asking this Court to unblock the assets pending a final determination of the validity of the administrative freeze order. This Court denied that motion finding that the plaintiffs had failed to carry their burden of proof on the issue of substantial likelihood of success on the merits, and that the requested preliminary injunction did not serve the public interest.

I.

The plaintiffs now move for this Court to order the defendants to appoint a provisional custodian to be responsible for the maintenance and care of the four blocked vessels for the duration of this case. In deciding this motion, this Court is mindful of and constrained by the fact that the defendants are officials of the United States government. As a result, the proper procedural model for deciding this motion is the Mandamus Act, 28 U.S.C. § 1361. For the plaintiffs to succeed on their motion they must prove that (1) their claim for relief is clear and certain; (2) that the defendants have a duty which is ministerial and so plainly prescribed as to be free from doubt; and (3) no other adequate [858]*858remedy is available. Azurin v. Von Raab, 803 F.2d 993, 995 (9th Cir.1986). See also, Sheehan v. Army and Air Force Exchange Service, 619 F.2d 1132, 1141 (5th Cir.1980); Winningham v. HUD, 512 F.2d 617, 620 (5th Cir.1975). The plaintiffs have failed to meet this test because no duty exists to provide custodial care for blocked assets under the IEEPA, certainly not one so plainly prescribed as to be free from doubt.

A.

The plaintiffs make two arguments in support of their motion to order the appointment of a provisional custodian. First, they argue that because they have been “completely divested of all control over the movement, operation and management of these vessels, [the blocking] is tantamount to a constructive seizure of these vessels.” As such, the plaintiffs argue, the defendants are responsible for the care and maintenance of the vessels. This Court disagrees with both the plaintiffs’ characterization of the blocking action and the conclusion that the plaintiffs draw from it. The plaintiffs have not been completely, divested of all control over these vessels. In fact, the defendants have indicated a willingness

to grant plaintiffs licenses to maintain their vessels using funds from blocked accounts, to grant licenses for the sale of the vessels with proceeds to be placed in a blocked account, or to grant the plaintiffs licenses to operate under bare boat charters with the proceeds to be placed in blocked accounts.2

That the plaintiffs must proceed with the permission of the defendants merely suggests that the plaintiffs have a more heavily regulated control over their ships under emergency circumstances, but certainly have not been completely divested of control.

Plaintiffs’ novel concept of a “constructive seizure” can hardly be drawn from the fact that the Customs Service has refused to permit the vessels to clear for foreign ports. Had these vessels been actually seized by U.S. marshals under the Court’s jurisdiction as part of in rem proceedings in admiralty, then the United States would have an interim duty of care, but that is not this case. That the blocking order impinges upon how the plaintiffs would choose to utilize their vessels does not elevate the government’s administrative act to the status of a seizure, constructive or otherwise. The Customs Service assumes no duty of maintenance or care by refusing to clear these vessels for foreign ports.

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804 F. Supp. 855, 1992 WL 303115, Counsel Stack Legal Research, https://law.counselstack.com/opinion/milena-ship-management-co-v-newcomb-laed-1992.