Petroleos Mexicanos v. MT King A

CourtCourt of Appeals for the Third Circuit
DecidedJuly 29, 2004
Docket03-2541
StatusPublished

This text of Petroleos Mexicanos v. MT King A (Petroleos Mexicanos v. MT King A) is published on Counsel Stack Legal Research, covering Court of Appeals for the Third Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Petroleos Mexicanos v. MT King A, (3d Cir. 2004).

Opinion

Opinions of the United 2004 Decisions States Court of Appeals for the Third Circuit

7-29-2004

Petroleos Mexicanos v. MT King A Precedential or Non-Precedential: Precedential

Docket No. 03-2541

Follow this and additional works at: http://digitalcommons.law.villanova.edu/thirdcircuit_2004

Recommended Citation "Petroleos Mexicanos v. MT King A" (2004). 2004 Decisions. Paper 426. http://digitalcommons.law.villanova.edu/thirdcircuit_2004/426

This decision is brought to you for free and open access by the Opinions of the United States Court of Appeals for the Third Circuit at Villanova University School of Law Digital Repository. It has been accepted for inclusion in 2004 Decisions by an authorized administrator of Villanova University School of Law Digital Repository. For more information, please contact Benjamin.Carlson@law.villanova.edu. PRECEDENTIAL TERRY L. STOLTZ, ESQ. (ARGUED) IN THE UNITED STATES COURT OF Nicoletti, Hornig, Campise, Sweeney & APPEALS Paige FOR THE THIRD CIRCUIT 88 Pine Street _________________________ 7 th Floor New York, NY 10005 NO. 03-2541 __________________________ ANDREW J. GOLDSTEIN, ESQ. Goldstein, Lem & Isaacson PETROLEOS MEXICANOS 100 Morris Avenue REFINACION, 3rd Floor Springfield, NJ 07081 v. Attorneys for Appellee M/T KING A (EX-TBILISI), her engines, boilers, etc., in rem by KING DAVID SHIPPING CO., LTD. ________________________ Appellant _______________________________ OPINION OF THE COURT On Appeal from the United States ________________________ District Court for The District of New Jersey BECKER, Circuit Judge. (D.C. No. 02-cv-01215) District Judge: Honorable Dennis M. This case presents important questions Cavanaugh about the scope of our appellate _______________________________ jurisdiction over the order of a district Argued June 15, 2004 court sitting in admiralty denying a motion to dismiss a suit and to vacate a warrant of Before: ALITO, SMITH and BECKER, arrest in an in rem proceeding. Here, Circuit Judges appellee Petroleos Mexicanos Refinacion (Filed: July 29, 2004) (“Pemex”), the Mexican state-owned oil company, brought an action in rem against JEREMY J.O. HARWOOD, ESQ. the King A, an oil tanker over which it (ARGUED) claims to hold a maritime lien. The Healy & Baillie District Court granted a warrant of arrest 61 Broadway for seizure of the res (the vessel). King New York, NY 10006 David Shipping Co. Ltd. (“King David”) claims ownership of the King A and Attorney for Appellant responded on its behalf, moving under Supplemental Rule E(4)(f) of the Federal I. Facts and Procedural History Rules of Civil Procedure to dismiss A. Background Facts Pemex’s suit—and to vacate the warrant of arrest for the King A—on subject matter In late 1992, Pemex chartered a tanker, jurisdiction and statute of limitations the Tbilisi (which has since been renamed grounds. The District Court denied the the King A), from Tbilisi Shipping Co. motion, and King David appeals on behalf (“Tbilisi Shipping”). In a voyage in of the King A.1 December 1992, a defect in the ship somehow caused the two types of We conclude that we lack appellate petroleum carried by the ship—diesel and jurisdiction over the District Court’s order unleaded gasoline—to cross-contaminate. under 28 U.S.C. § 1291 or the cognate This allegedly tortious event arguably collateral order doctrine of Cohen v. gives rise to a maritime lien on the ship in Beneficial Industrial Loan Corp., 337 U.S. favor of Pemex. As security for the 541 (1949). We similarly conclude that damages, Pemex also withheld some we do not have appellate jurisdiction under $530,320 of charter hire that it otherwise the provisions for appellate review of owed to Tbilisi Shipping. certain interlocutory orders found in 28 U.S.C. § 1292(a)(1) and (3). We therefore Tbilisi Shipping conceded liability (but do not reach the merits of the appeal, not the amount of damages). In 1993, which we will dismiss for lack of appellate however, Tbilisi Shipping commenced an jurisdiction. arbitration under the charter to recover the withheld hire. Tbilisi Shipping’s P&I club2 issued a Letter of Undertaking (“LOU”) (for our purposes here, a bond) to secure any arbitral award in favor of 1 Because this is an in rem action, the Pemex (including costs and fees awarded King A itself is the defendant with King by the arbitration panel). In return, Pemex David merely acting on its behalf. promised to pay the withheld hire and “American courts, by and large, adopted refrain from arresting the Tbilisi. a ‘personification’ theory in which the As the parties confirmed at oral vessel itself is a party and judgments are argument, the arbitration has been entered against her without the necessity of securing jurisdiction over the owner.” Salazar v. Atlantic Sun, 881 F.2d 73, 76 2 (3d Cir. 1989). We will dispense with “P&I” stands for “Protection and the linguistic formality in the opinion, Indemnity.” P&I is insurance against however, and refer simply to King third party liabilities and expenses arising David’s actions, arguments, etc., while from owning ships or operating ships as recognizing that it appears only on behalf principals. A P&I club issues such of the King A. insurance.

2 protracted for reasons not at all relevant The application was in substance a motion here, and it continues to this day. At some to dismiss the complaint, and (as the point, the Tbilisi was renamed the King A, logical consequence thereof) to vacate the and it is now owned by King David. warrant of arrest and discharge King Pemex, wanting additional security for its David’s P&I club’s LOU. claim (in case the LOU from Tbilisi The District Court ruled on three issues Shipping’s P&I club proves insufficient to in denying the Rule E(4)(f) application. cover any arbitral award) sought to arrest First, it held that Pemex has standing to the King A, on the theory that the tortious pursue the in rem action, over King event created a maritime lien on the ship, David’s objection that Pemex had been irrespective of its owner. paid in full for its loss by its insurers, and B. Proceedings Before the District Court so had no lien on the ship, and hence no standing to sue. Second, the District Court Pemex applied in mid-March 2002 to held that there was a valid maritime lien the United States District Court for the against the ship, and so the warrant of District of New Jersey for, and was arrest was proper, over King David’s granted, a warrant of arrest for the King A, objection that Pemex failed to properly which was scheduled to call at Port plead the existence of a maritime lien in its Newark. 3 A few days later, King David’s complaint. Third, the District Court held P&I club issued a LOU to secure any in that there was no statute of limitations bar rem award, so the warrant of arrest was to Pemex’s claim, over King David’s withdrawn and was not actually served on objection that this action was subject to a the King A. one-year limitations period that had not In September 2002, King David been tolled, and had thus long ago expired. submitted an application under Fed. R. Thus, the District Court denied King Civ. P. Supp. Rule E(4)(f), which David’s motion to dismiss, and refused to provides: “Whenever property is arrested vacate the warrant of arrest for the King A. or attached, any person claiming an C. This Appeal interest in it shall be entitled to a prompt hearing at which the plaintiff shall be King David argues on appeal that the required to show why the arrest or District Court’s holdings on subject matter attachment should not be vacated or other jurisdiction, the existence of a maritime relief granted consistent with these rules.” lien, and the statute of limitations were incorrect.

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