Proshipline Inc. v. Aspen Infrastructures Ltd.

594 F.3d 681, 2010 A.M.C. 450, 2010 U.S. App. LEXIS 2292, 2010 WL 367563
CourtCourt of Appeals for the Ninth Circuit
DecidedFebruary 3, 2010
Docket08-35337
StatusPublished
Cited by1 cases

This text of 594 F.3d 681 (Proshipline Inc. v. Aspen Infrastructures Ltd.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Ninth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Proshipline Inc. v. Aspen Infrastructures Ltd., 594 F.3d 681, 2010 A.M.C. 450, 2010 U.S. App. LEXIS 2292, 2010 WL 367563 (9th Cir. 2010).

Opinions

Opinion by Judge BEEZER; Partial Concurrence and Partial Dissent by Judge TALLMAN.

BEEZER, Circuit Judge:

Plaintiffs-appellants ProShipLine, Inc. and EP-Team, Inc. appeal from two district court decisions in favor of defendantappellee Aspen Infrastructures Ltd. Both decisions involve a writ of maritime attachment that ProShipLine and EP-Team obtained against Aspen pursuant to Rule B of the Supplemental Rules for Certain Admiralty and Maritime Claims to the Federal Rules of Civil Procedure (“Rule B”). The district court held in the first decision that it could not compel Aspen to post security in lieu of garnishment. This deci[684]*684sion forced ProShipLine and EP-Team to either waive their right to garnish Aspen’s property pursuant to a previously obtained Rule B writ or to garnish the property despite alleged impracticability. The district court, in the second decision, equitably vacated ProShipLine’s and EP-Team’s Rule B writ and exonerated security posted for that writ. The district court further ordered ProShipLine and EP-Team to reimburse Aspen for the value of the property they seized in accord with that writ.

We have jurisdiction over this appeal pursuant to 28 U.S.C. § 1291. We hold that although the district court’s first decision was proper, the district court abused its discretion in the second decision. Equitable vacatur should not have been applied against EP-Team individually.

I

The litigants’ legal relationship formally began on April 9, 2006, when EP-Team1 and Aspen2 entered into the Sales and Logistics Services Agreement. Under the Agreement, ProShipLine,3 as EP-Team’s designated agent and assignee, agreed to act as Aspen’s general sales and port services agent. ProShipLine and EP-Team solicited cargo for return trips to India and handled port and terminal operations for Aspen throughout America.4

The parties’ Agreement contains a forum selection clause that says, in the case of a dispute between the parties, arbitration should take place in Singapore. The Agreement also includes a choice-of-law clause providing that, in such a dispute, the Agreement should be construed and enforced in accord with English law. ProShipLine’s, EP-Team’s and Aspen’s contractual relationship remained in good standing for more than a year.

ProShipLine’s, EP-Team’s and Aspen’s relationship became strained in the summer of 2007. Each side blames the other for breaching the Agreement.5 We do not examine the merit of these contentions. We observe only that the conflict resulted in the parties terminating their business relationship on or about August 1, 2007. The end of the business relationship marked the onset of extensive litigation in Texas, New York and Washington.

A

On August 6, 2007, ProShipLine and EP-Team filed suit against Aspen in the [685]*685Southern District of Texas (the “First Texas Action”). EP-Team, Inc. v. Aspen Infrastructure, Ltd., No. 4:07 Civ. 2549, 2007 WL 2969565 (S.D.Tex. Aug. 6, 2007). ProShipLine and EP-Team sought declaratory relief regarding the construction and enforcement of the Agreement and to compel arbitration. Aspen then moved to stay the case pending resolution of the parties’ disputes through arbitration in Singapore. On December 5, 2007, the Texas District Court granted Aspen’s motion and administratively closed the First Texas Action. The court expressly left open the option to reinstate the case following the conclusion of the arbitration proceedings.

On December 7, 2007, ProShipLine and EP-Team initiated a second action against Aspen in the Southern District of Texas (the “Second Texas Action”). ProShipLine, Inc. v. M/V Beluga Revolution, No. H-07-4170, 2007 WL 5397377, at *1 (S.D.Tex. Dec. 7, 2007). In that action, ProShipLine and EP-Team sought an order and writ of maritime attachment pursuant to Rule B. The district court issued the writ on December 10, 2007. Aspen immediately moved to vacate the writ. After conducting an evidentiary hearing on December 14, 2007, the district court granted Aspen’s motion and vacated the writ.6 ProShipLine, Inc. v. M/V Beluga Revolution, No. H-07-4170, 2007 WL 4481101, at *1 (S.D.Tex. Dec. 18, 2007).

B

Similar legal proceedings took place in New York. On October 12, 2007, Aspen brought suit against EP-Team individually in the Southern District of New York (the “First New York Action”). Aspen Infrastructures, Ltd. v. E.P. Team, Inc., No. 07 Civ. 8813(RWS), 2008 WL 2963491 (S.D.N.Y. Aug. 1, 2008). Aspen alleged admiralty jurisdiction and sought an order and writ of maritime attachment pursuant to Rule B. The district court ordered the issuance of the writ. Pursuant to that writ, Aspen successfully seized funds belonging to EP-Team.7

On December 3, 2007, ProShipLine independently filed a separate action against Aspen in the Southern District of New York (the “Second New York Action”). ProShipLine, Inc. v. Aspen Infrastructures, Ltd., 533 F.Supp.2d 422, 425 (S.D.N.Y.2008). ProShipLine sought an order and writ of maritime attachment pursuant to Rule B. The district court issued the writ, and ProShipLine garnished Aspen and seized approximately $2 million from Aspen’s bank accounts. On January 16, 2008, Aspen moved to vacate the district court’s order in the Second New York Action. The district court ruled in favor of Aspen on February 1, 2008, and vacated the writ.8 ProShipLine appealed the district court’s grant of this motion to [686]*686the Second Circuit, which affirmed the district court. ProShipLine, Inc. v. Aspen Infrastructures, Ltd., 585 F.3d 105, 110 (2d Cir.2009) (affirming “solely on the ground that the district court did not err in concluding that[ProShipLine and Aspen] were both present in the Southern District of Texas”).

C

The parties brought their legal struggles to Washington on November 27, 2007, when ProShipLine and EP-Team filed another ancillary Rule B action in the Western District of Washington (the “Washington Action”). See ProShipLine, Inc. v. Aspen Infrastructures, Ltd., No. C07-5660FDB, 2008 WL 859753 (W.D.Wash. Mar. 28, 2008). ProShipLine and EP-Team successfully obtained a writ of maritime attachment against Aspen. In light of the district court’s order, Aspen posted security pursuant to Supplemental Admiralty and Maritime Claims Rule E(5) (“Rule E(5)”) in lieu of allowing ProShipLine and EP-Team to garnish the fuel and lube oil aboard one of Aspen’s chartered vessels within the district.

In December of 2007, a second ship chartered by Aspen, the M/V BELUGA FUSION (the “Beluga”), entered the Western District of Washington. ProShipLine and Aspen sought to garnish the fuel and lube oil aboard the Beluga. This time, Aspen declined to provide security to substitute for garnishment of those resources. On December 27, 2007, the district court held an “emergency” hearing. The court rejected ProShipLine’s and EP-Team’s argument that it could compel Aspen to provide security.9

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Bluebook (online)
594 F.3d 681, 2010 A.M.C. 450, 2010 U.S. App. LEXIS 2292, 2010 WL 367563, Counsel Stack Legal Research, https://law.counselstack.com/opinion/proshipline-inc-v-aspen-infrastructures-ltd-ca9-2010.