UNITED STATES COURT
For the Second Circuit
August Term, 1999
(Argued: January 26, 2000 Decided:
May 25, 2000 )
Docket Nos. 99-7302(L); 99-7658(XAP)
Thypin Steel Company,
Certain Bills Of Lading
Issued For A Cargo Of 3017 Metric Tons, More Or Less,
Of Hot Rolled Steel Plate Laden On Board The M/V Geroi Panfilovsky,
John Farkas, Ulrich Boenzli,
Metall Und Rohstoff A.G.,
B e f o r e :
Van Graafeiland, Straub,
and Pooler, Circuit Judges.
Interlocutory appeal from a finding
of admiralty in rem jurisdiction certified by the United
States District Court for the Southern District of New York (Robert
P. Patterson, Judge) to this court under 28 U.S.C. 1292(b).
Plaintiffs cross-appeal from the District Court's order dismissing
Metall und Rohstoff A.G. for lack of personal jurisdiction pursuant
to Fed. R. Civ. P. 12(b)(2) and dismissing the conversion and
tortious interference with contract claims against Asoma Corporation
for failure to state a claim pursuant to Fed. R. Civ. P. 12(b)(6).
We affirm the finding of admiralty jurisdiction but dismiss the
cross-appeal for lack of appellate jurisdiction.
Harold M. Kingsley, Kingsley &
Kingsley, Hicksville, NY, forDefendant-Counter-Claimant-Appellant-Cross-Appellee
Brian C. Dunning, Hoguet Newman
& Regai, LLP, New York, NY forDefendant-Cross-Appellee
Metall Und Rohstoff A.G.
Alfred J. Kuffler, Montgomery, McCracken,
Walker & Rhoads, LLP, Philadelphia, PA (Howard J. Bashman,
Montgomery, McCracken, Walker & Rhoads, LLP; William P. Larsen
III, D'Amato & Lynch, New York, NY, of counsel), for Plaintiff-Counter-Defendant-Appellee-Cross-Appellant
Thypin Steel Company and Claimant-Appellee-Cross-Appellant Donbakraft
Straub, Circuit Judge:
Appellant Asoma Corporation ("Asoma")
appeals from a finding of admiralty in rem jurisdiction
by the United States District Court for the Southern District
of New York (Robert P. Patterson, Judge) certified to
this court under 28 U.S.C. 1292(b). Plaintiffs Thypin Steel Company
("Thypin") and Donbakraft Ltd. ("Donbakraft")
cross-appeal from the District Court's order dismissing Metall
und Rohstoff A.G. ("Metall") for lack of personal jurisdiction
pursuant to Fed. R. Civ. P. 12(b)(2) and dismissing the conversion
and tortious interference with contract claims against Asoma
for failure to state a claim pursuant to Fed. R. Civ. P. 12(b)(6).
For the reasons that follow, we hold that the District Court
properly found admiralty jurisdiction based on a maritime contract
and dismiss the cross-appeal for lack of appellate jurisdiction.
By a verified admiralty complaint
dated March 25, 1996, Thypin, a corporation organized and existing
under the laws of the State of New York, brought an in rem
action in district court claiming ownership of a bill of lading(1) covering a cargo of steel en route
from the Ukraine to Houston. Thypin alleged that it had contracted
with Donbakraft, an importer/exporter incorporated in Minnesota,
to purchase 20,000 metric tons of newly produced steel plate
conforming to certain specifications; that Donbakraft in turn
had a contract with J.V. Fistag-Victoriya, a Ukrainian-Swiss
supplier, for that amount of steel with delivery to be "FOB
stowed vessel"(2) and with
payment to be made upon presentation of "[t]wo full sets
of original clean on board bills of lading issued to the name
of the Buyer [Donbakraft] or its order"; that Thypin was
Donbakraft's assignee of Donbakraft's contract with Fistag-Victoriya;
that Thypin and Donbakraft had made an advance payment of over
two million dollars for such steel; and that 3017 metric tons
of steel plate matching Thypin's specifications and procured
by Fistag-Victoriya were delivered by a Fistag-Victoriya affiliate
to Metall und Rohstoff A.G. ("Metall"), a Swiss company
engaged in steel trading. Asoma, a New York-based corporation
which trades in steel products, also claims entitlement to the
cargo of steel. Asoma alleges that it purchased the steel
from Metall, which assumed responsibility under the contract
for shipping the goods.
The cargo of steel that is the focus
of this action was shipped under a bill of lading that was dated
January 25, 1996, and issued by the master of the M/V GEROI PANFILOVSKY,
the vessel that was chartered by Metall to transport the goods
overseas. This bill of lading designates "Ukranian-Swiss
JV Fistag Victory" ("Fistag") as the shipper and
Metall as consignee "to order of Donbakraft, Ltd."
The bill of lading was not endorsed by Donbakraft, the party
to whose order the bill of lading is written, but by Metall to
Asoma, which held the bill when Thypin brought its claim in district
On March 26, 1996, the District
Court issued an ex parte order authorizing the issuance
of a warrant for the arrest of the bill of lading. On March 28,
1996, the District Court held a post-arrest hearing pursuant
to Rule E of the Supplemental Rules for Certain Admiralty and
Maritime Claims, and received additional evidence on April 4
and 11, 1996.
In an opinion and order dated May
1, 1996, the District Court found admiralty jurisdiction based
on Thypin's allegations of conversion of goods which "took
place when the steel was transported from the shore onto the
vessel and the Bill of Lading evidencing a change of title was
issued by the carrier." Thypin Steel Co. v. Certain Bills
of Lading, No. 96 CIV 2166 (RPP), 1996 WL 223896, at *3 (S.D.N.Y.
May 2, 1996). In this opinion and order, the District Court also
found that the arrest of the bill of lading was supported on
reasonable grounds and that Thypin was entitled to discovery
prior to a final disposition of its claim. See id.
On May 3, 1996, the District Court
conducted a hearing to determine the amount that Asoma would
post as a bond to secure the release of the bill of lading; this
sum was determined to be $700,000. Asoma posted this bond
on May 21, 1996, and the bill of lading was released. In late
May 1996, the vessel M/V GEROI PANFILOVSKY arrived in Houston
and discharged the cargo of steel.
On August 2, 1996, the District
Court granted Asoma's motion pursuant to 28 U.S.C. 1292 for certification
of immediate appeal of the May 1, 1996 order. On April 29, 1997,
this Court issued a Mandate remanding the issue of jurisdiction
to permit Thypin to amend its pleading to assert its new bases
for jurisdiction and to enable the District Court to rule on
all available bases of jurisdiction prior to appellate review.
Thypin filed an amended complaint
on May 30, 1997, adding Donbakraft as a plaintiff and Metall,
Ulrich Boenzli ("Boenzli"), and John Farkas ("Farkas")(3) as defendants. In addition,
Thypin added claims of fraud, conspiracy to defraud, tortious
interference with contract, and conversion against the new in
personam defendants, and a civil RICO claim. In July
1997, in rem claimant Asoma and in personam defendants
Asoma, Metall, Boenzli, and Farkas filed motions to dismiss the
complaint; quash the in rem arrest of the bill of lading
and release the bond posted by Asoma; and stay discovery pending
resolution of the motion to dismiss and quash discovery on the
personal jurisdiction issue. On August 27, 1997, defendants moved
for Rule 11 sanctions against plaintiffs for including a civil
RICO claim in their amended complaint. In an opinion and
order dated December 28, 1998, the District Court: (1) denied
defendants' motion to dismiss the in rem claim for lack
of admiralty jurisdiction, but stayed discovery pending appeal
and directed that the bond posted by Asoma on May 21, 1996, remain
in place; (2) granted defendants' motion to dismiss Boenzli,
Farkas, and Metall as defendants for lack of personal jurisdiction;
(3) granted defendants' motion to dismiss the maritime tort claims
for fraud and conspiracy with respect to all defendants; (4)
granted defendants' motion to dismiss the maritime tort claims
for tortious interference with contract and conversion on substantive
grounds with respect to defendants Boenzli, Farkas, and Asoma,
and, because the District Court held that it lacked personal
jurisdiction over Metall, found these claims to be effectively
dismissed as against Metall as well; (5) dismissed plaintiffs'
RICO claim with prejudice; (6) granted defendants' motion to
quash discovery on the personal jurisdiction issue without prejudice;
and (7) denied defendants' motion for sanctions. See Thypin
Steel Co. & Donbakraft Ltd. v. Certain Bills of Lading,
No. 96CIV2166 (RPP), 1998 WL 912100, at *7 (S.D.N.Y. Dec. 30,
1998). The District Court issued a certificate of immediate
appeal pursuant to 28 U.S.C. 1292(b) on the in rem admiralty
jurisdiction question. See id. at *3.
In an opinion and order dated March
1, 1999, the District Court denied plaintiffs' motion for reconsideration
of those aspects of its opinion and order dated December 30,
1998, which (1) dismissed plaintiffs' claims against defendant
Metall for lack of personal jurisdiction; (2) granted defendants'
motion to quash discovery on the personal jurisdiction issue
pending appeal; (3) dismissed plaintiffs' conversion and tortious
interference with contract claims against defendant Asoma; and
(4) granted a certificate of immediate appeal on the issue of
whether the District Court properly exercised admiralty jurisdiction
over plaintiffs' in rem claim. See Thypin Steel Co.
& Donbakraft Ltd. v. Certain Bills of Lading, No. 96CIV2166
(RPP), 1999 WL 108728 (S.D.N.Y. Mar. 3, 1999).
This timely appeal followed.
I. Admiralty Jurisdiction
The District Court found that admiralty
jurisdiction existed based on the bill of lading, a maritime
contract between Donbakraft (which assigned its rights to Thypin)
and J.V. Fistag-Victoriya. See Thypin Steel Co., 1998
WL 912100, at *3. We review the District Court's factual
findings for clear error and its legal conclusions de novo.
See LeBlanc v. Cleveland, 198 F.3d 353, 356 (2d Cir. 1999).
"The boundaries of admiralty
jurisdiction over contracts--as opposed to torts or crimes--being
conceptual rather than spatial, have always been difficult to
draw." Kossick v. United Fruit Co., 365 U.S. 731,
735 (1961). Admiralty jurisdiction extends only to wholly maritime
contracts or severable maritime portions of mixed contracts.
See Atlantic Mut. Ins. Co. v. Balfour Maclaine Int'l Ltd.,
775 F. Supp. 101, 104 (S.D.N.Y. 1991), aff'd, 968 F.2d
196, 199 (2d Cir. 1992). Jurisdiction depends, in cases of contract,
"upon the nature of the contract, and is limited to contracts,
claims and services purely maritime, and touching rights and
duties appertaining to commerce and navigation." S.S.
ECLIPSE, 135 U.S. 599, 608 (1890). See also Ingersoll
Milling Mach. Co. v. M/V BODENA, 829 F.2d 293, 302 (2d Cir.
1987) ("If the subject matter of the contract relat[es]
to a ship in its use as such, or to commerce or to navigation
on navigable waters, or to transportation by sea or to maritime
employment it is fairly said to constitute a maritime contract.")
(internal quotation marks omitted), cert. denied, 484
U.S. 1042 (1988).
On appeal, Asoma argues that this
matter is merely a non-maritime dispute between two New York
merchants over the title to cargo, a shipment of steel, based
on a purchase agreement which does not involve the operation,
navigation, or management of a ship. We disagree.
A bill of lading for ocean carriage
is a maritime contract. See Leather's Best, Inc. v. S.S. MORMACLYNX,
451 F.2d 800, 807 (2d Cir. 1971); Luckenbach S.S. Co. v. Coast
Mfg. & Supply Co., 185 F. Supp. 910, 915-16 (E.D.N.Y.
1960) ("A contract for ocean transportation of cargo such
as set forth in the bill of lading herein, is a classical example
of a maritime contract."); see also 1 Benedict
on Admiralty 189[a], at 12-36 ("A bill of lading contract
between cargo owner and common carrier, as well as a dock receipt
issued by a carrier before a bill of lading has been issued,
are maritime instruments and rights and liabilities between the
parties arising out of those contracts may be litigated in a
federal court based on its admiralty jurisdiction, even though
the causes of action arise on land."); cf. Cary Marine,
Inc. v. Motorvessel Papillon, 872 F.2d 751, 754-55 (6th Cir.
1989) (a purchase agreement for the sale of a vessel is not a
maritime contract and a breach of one, therefore, does not give
rise to admiralty jurisdiction); Gaster Marine Recovery &
Sales, Inc. v. M/V THE RESTLESS I, 33 F. Supp. 2d 1333, 1334
(S.D. Fla. 1998) (a contract for the sale of a vessel is not
within federal courts' admiralty jurisdiction).
In this case, Metall, the consignee,
contracted with J.V. Fistag-Victoriya, the shipper, to deliver
goods via the vessel M/V GEROI PANFILOVSKY to the order of Donbakraft,
the designated recipient specified in the bill of lading, for
discharge in Houston. It is evident from the bill of lading that
the shipper and the consignee contracted to ship the steel plates
by vessel over navigable waters to the Houston City Docks, North
Side. Accordingly, the bill of lading that is at the center
of the current dispute is not merely a non-maritime purchase
agreement between merchants for the purchase of maritime cargo,
as Asoma contends, but, rather, is a maritime contract that involves
the transportation of goods over navigable waters.
While it is true that the mere handling
or forwarding of a bill of lading does not convert a simple contract
claim into an admiralty claim, see, e.g., United States v.
M/V SANTA CLARA I, 859 F. Supp. 980, 991 (D.S.C. 1994); Lunsford
v. Farrell Shipping Lines, Inc., No. 83CIV7462, 1991 WL 150596,
at *5 (S.D.N.Y. July 26, 1991); cf. Johnson Prods. Co. v.
M/V LA MOLINERA, 619 F. Supp. 764, 766-67 (S.D.N.Y. 1985),
Thypin's and Donbakraft's in rem claim arises under and
is based on their purported entitlement to the bill of lading--Donbakraft
as the designated recipient of the cargo in the negotiable bill
of lading with the right to control the consignment, and Thypin
as Donbakraft's assignee. See 1 Benedict on Admiralty
191[b], at 12-51 to -52 ("The cases are clear that the consignee
named in a bill of lading is a proper party-plaintiff, his title
being presumed by virtue of being named consignee."); id.
191[d], at 12-54 ("Under present decisions there appears
to be no doubt of the right of a bare assignee to be a party-plaintiff
in an admiralty cause of action."). Indeed, rights and liabilities
between the parties arising out of a bill of lading contract
may be litigated in a federal court based on its admiralty jurisdiction,
even though the causes of action arise on land. See id.
189[a], at 12-36; see also David Crystal, Inc. v. The
Cunard S.S. Co., 223 F. Supp. 273, 290-91 (S.D.N.Y. 1963)
("There is no question but that the bill of lading is a
maritime contract, that a suit for its breach is clearly within
admiralty jurisdiction, and [the] named consignee . . . could
have brought this suit. But the cause of action asserted by [the
third-party plaintiff] is not premised on the bill of lading
and it seems beyond question that in order for jurisdiction to
be invoked on this basis, the bill of lading must be its bedrock.")
(citations omitted), aff'd on other grounds, 339 F.2d
295 (2d Cir. 1964), cert. denied, 380 U.S. 976 (1965).
In short, it is the bill of lading,
a maritime contract, not the cargo, that is the res which
confers admiralty jurisdiction upon this court, and it is the
alleged misappropriation of this bill by both Asoma and Metall
and the effort to obtain delivery from the vessel by the unauthorized
presentation of the bill which relates to maritime commerce.
While we recognize that the procedural posture of this case may
be unusual in some respects--the traditional course of action,
as Thypin acknowledged at oral argument, would have been to seize
the cargo in Houston--the bill of lading whose ownership is at
issue here provides for the transport of the cargo overseas and
we find that this connection to maritime commerce is sufficient
to justify the exercise of admiralty jurisdiction in this case.
Cf. Atlantic Mut. Ins. Co., 968 F.2d at 200 (finding that
the goods' connection with maritime commerce was too speculative
to justify admiralty jurisdiction where the goods were never
designated for marine transport).
The rationale for federal admiralty
jurisdiction provides further support for a finding of admiralty
jurisdiction in this case. "[T]he question of whether a
dispute falls within admiralty jurisdiction cannot be divorced
from the purposes for which admiralty and maritime jurisdiction
was granted." Id. at 199 (internal quotation marks
omitted). "[T]he protection of maritime commerce" is
the "primary focus of admiralty jurisdiction." Foremost
Ins. Co. v. Richardson, 457 U.S. 668, 674 (1982); see
also Jerome B. Grubart, Inc. v. Great Lakes Dredge & Dock
Co., 513 U.S. 527, 544 (1995) (same). Here, a dispute over
title to or possession of a bill of lading, a maritime contract
for ocean carriage, clearly implicates the fundamental federal
interest in the protection of maritime commerce. We therefore
hold that the District Court properly found admiralty jurisdiction
over this dispute based on a maritime contract.(4)
In their cross-appeal, Thypin and
Donbakraft seek to appeal the District Court's interlocutory
order dismissing Metall for lack of personal jurisdiction pursuant
to Fed. R. Civ. P. 12(b)(2) and dismissing the conversion and
tortious interference with contract claims against Asoma for
failure to state a claim pursuant to Fed. R. Civ. P. 12(b)(6).
Asoma and Metall argue that this cross-appeal should be dismissed
for lack of appellate jurisdiction pursuant to 28 U.S.C. 1292(a)(3).
For the reasons that follow, we agree.
A. Standard Under 28 U.S.C.
Title 28, section 1292(a)(3) of
the United States Code provides, in pertinent part, that appeals
may be taken from "[i]nterlocutory decrees . . . determining
the rights and liabilities of the parties to admiralty cases
in which appeals from final decrees are allowed." Section
1292(a) is an exception to the general rule of finality stated
in 1291 and, as such, should be construed narrowly. See Roco
Carriers, Ltd. v. M/V NURNBERG EXPRESS, 899 F.2d 1292, 1297
(2d Cir. 1990) ("This exception to the final judgment rule
has its historical origins in the once common practice in admiralty
cases of referring the determination of damages to a master or
commissioner after resolving the question of liability.");
Tradax Ltd. v. M.V. HOLENDRECHT, 550 F.2d 1337, 1340-41 (2d
Cir. 1977) ("For this provision has been narrowly construed
and basically limited to cases where there has been a determination
of liability but not yet a computation of the damages.")
(citations omitted), abrograted on other grounds by Farrell
Lines Inc. v. Ceres Terminals Inc., 161 F.3d 115 (2d Cir.
1998); Lowry & Co. v. S.S. LE MOYNE D'IBERVILLE, 372
F.2d 123, 124 (2d Cir. 1967) ("[T]he courts have consistently
given [ 1291 and 1292(a)(3)] a narrow construction. Federal policy,
as distinguished from that followed by some state judicial systems,
is against piecemeal appeals."); In re Wills Lines, Inc.,
227 F.2d 509, 510 (2d Cir. 1955) ("It has been repeatedly
held, in this Circuit and elsewhere, that interlocutory decrees
determining the rights and liabilities of the parties to admiralty
cases means deciding the merits of the controversies between
them.") (internal quotation marks omitted), cert. denied,
351 U.S. 917 (1956). In accordance with the purpose for
which the exception was crafted, we have construed the language
in 1292(a)(3) to mean "that we have jurisdiction over such
an appeal when the court below, as is customary in admiralty,
has entered an interlocutory decree deciding the merits of the
controversy between the parties, but has left unsettled the assessment
of damages or other details required to be determined prior to
entry of a final decree." Allen N. Spooner & Son,
Inc. v. Connecticut Fire Ins. Co., 297 F.2d 609, 610 (2d
Cir. 1962) (per curiam); Bergeron v. Koninklijke Luchtvaart
Maatschappij, 299 F.2d 78, 79 (2d Cir. 1962) (per curiam)
A narrow construction of this exception
is consistent with the view shared by several of our sister circuits
that appellate jurisdiction under 1292(a)(3) should only be exercised
where the order at issue conclusively determines the parties'
substantive rights and obligations. In this regard, courts have
declined to hear appeals from orders striking a claim for damages
for loss of use of a plaintiff's vessel, see, e.g., Central
State Transit & Leasing Corp. v. Jones Boat Yard, Inc.,
77 F.3d 376, 377-78 (11th Cir. 1996) (finding order nonappealable
because it did not resolve the principal issue of liability--whether
either of the defendants was responsible for the damage to the
plaintiff's vessel); dismissing a complaint as to some defendants,
see, e.g., Seahorse Boat & Barge Corp. v. Jacksonville
Shipyards, Inc., 617 F.2d 396 (5th Cir. 1980) (per curiam);
and refusing to dismiss a complaint, see, e.g., Jack Neilson,
Inc. v. Tug Peggy, 428 F.2d 54, 55 (5th Cir. 1970) (denial
of motion based on lack of admiralty jurisdiction "did not
go to the merits of the claim"), cert. denied, 401
U.S. 955 (1971).
Some courts certainly have expanded
1292(a)(3)'s application and found that an order determines the
rights and liabilities of the parties so long as it resolves
a fairly separable claim or all matters involving a single party,
see e.g., Aparicio v. Swan Lake, 643 F.2d 1109, 1113 n.6
(5th Cir. 1981) (finding that an order dismissing one of several
separate claims for relief on the merits is appealable in an
admiralty case even though other claims arising from the same
injury remained open); Bradford Marine, Inc. v. M/V SEA FALCON,
64 F.3d 585, 587-88 (11th Cir. 1995) (finding that the final
order entered against the vessel was appealable under 1292(a)(3)
even though there was no disposition of the in personam claim
against its owner because the order decided the rights and liabilities
as to the vessel); Complaint of Nautilus Motor Tanker Co.,
85 F.3d 105, 109-10 & n.3 (3rd Cir. 1996) (finding that the
plaintiff shipowner in a limitation of liability proceeding could
appeal an order that only decided a counterclaim and noting that
"[t]o be appealable under section 1292(a)(3), an order in
admiralty need not determine all rights and liabilities of all
It is our view, however, that a
narrow construction of 1292(a)(3) better comports with the historical
origin of the exception and this Circuit's precedent. Moreover,
as a noted commentator has suggested, "arguments for expansive
interpretation of 1292(a)(3) are offset by the availability of
[Federal] Rule [of Civil Procedure] 54(b) and the more recent
adoption of 1292(b), which allows interlocutory appeals on permission
of the trial court and appellate court in admiralty cases as
well as in other cases." 16 Charles Alan Wright et al.,
Federal Practice and Procedure 3927 (2d ed. 1996). Guided
by these principles, we now turn to the order from which Thypin
and Donbakraft cross-appeal, and address Asoma's and Metall's
B. Dismissal of Metall for
Lack of Personal Jurisdiction
Thypin and Donbakraft first seek
to appeal the portion of the District Court's interlocutory order
dismissing Metall for lack of personal jurisdiction pursuant
to Fed. R. Civ. P. 12(b)(2). They argue for the exercise of appellate
jurisdiction pursuant to 28 U.S.C. 1292(a)(3) on the ground that
all of their claims against Metall have been effectively decided
by Metall's dismissal from the suit. For the reasons that follow,
we conclude that we do not have appellate jurisdiction over this
While this Circuit has not had occasion
to address this precise issue, that is, whether this Court can
exercise jurisdiction pursuant to 28 U.S.C. 1292(a)(3) over an
order dismissing one party for lack of personal jurisdiction,
the Fifth Circuit's decisions in Seahorse Boat & Barge
Corp. v. Jacksonville Shipyards, Inc., 617 F.2d 396 (5th
Cir. 1980) (per curiam) and Allen v. Okam Holdings, Inc.,
116 F.3d 153 (5th Cir. 1997) (per curiam) are particularly instructive
in this regard.
In Seahorse, the Fifth Circuit
found that the dismissal for lack of personal jurisdiction did
not "fall within the limited class of interlocutory appeals
authorized by 28 U.S.C. 1292(a)(3) relating to the rights and
liabilities of parties in admiralty." 617 F.2d at 397. Similarly,
in Allen, the Fifth Circuit concluded that the
district court's dismissal of the defendant from the case neither
affected the merits of the appellants' claim nor precluded the
appellants from commencing and maintaining an independent action
against the dismissed defendant in another forum, but only affected
"how and where the rights and liabilities would be determined."
116 F.3d at 154 (internal quotation marks omitted).
We see no reason to reach a different
result here. Although it may be true that the dismissal of Metall
from the suit effectively resolved all of the plaintiffs' claims
against Metall in the federal admiralty suit, cf. Bradford
Marine, Inc., 64 F.3d at 587-88, Metall's dismissal did not
preclude Thypin and Donbakraft from commencing an independent
action against Metall in another forum. See Allen, 116
F.3d at 154. Therefore, the order dismissing Metall for lack
of personal jurisdiction only affected how and where Metall's
rights would be determined but did not conclusively resolve the
parties' substantive rights or liabilities or the merits of the
underlying controversy. See Spooner, 297 F.2d at 610.
In short, our review of the plain
language of 1292(a)(3), its historical origin, this Circuit's
narrow construction of the exception, and pertinent case law
compels the conclusion that the portion of the District Court's
order dismissing Metall as a defendant for lack of personal jurisdiction
C. Dismissal of Conversion
and Tortious Interference with Contract Claims against Asoma
for Failure to State a Claim.
Thypin and Donbakraft also seek
to appeal the portion of the District Court's order dismissing
the conversion and tortious interference with contract claims
against Asoma for failure to state a claim pursuant to Fed. R.
Civ. P. 12(b)(6). We reject Thypin's and Donbakraft's arguments
in support of exercising appellate jurisdiction pursuant to 28
U.S.C. 1292(a)(3) with respect to the dismissal of these claims
Although the interlocutory order
from which Thypin and Donbakraft now seek to appeal dismissed
all the in personam claims against Asoma, the essential
question of liability regarding the ownership of the title of
the bill of lading (with plaintiffs and Asoma as adverse claimants)
remains to be determined. In Bergeron, 299 F.2d at 79,
we found no basis for appeal from an order which dismissed six
of nine causes of action, but left open all of the questions
of ultimate liability raised by the dismissed theories, i.e.,
the basic issue of negligence. Similarly, in Spooner,
we dismissed an appeal from an order granting a motion to dismiss
an impleading petition where the merits of the libelant's claims,
the respondent's defenses, and the impleading petition were not
adjudicated by the ruling below. See 297 F.2d at 610;
see also THE MARIA, 67 F.2d 571 (2d Cir. 1933) (per curiam)
(dismissing an appeal for lack of appellate jurisdiction under
28 U.S.C. 227, 1292(a)(3)'s precursor, on the ground that "all
of the 'merits'" had not yet been decided because the disputed
material question of the vessel's seaworthiness remained open).(5) Here, because Asoma's rights and liabilities
as to the bill of lading have yet to be determined, we conclude
that the appeal from the portion of the District Court's order
dismissing the conversion and tortious interference claims against
Asoma is premature at this time.
In sum, because the cross-appeal
is from a nonappealable order that does not determine the parties'
substantive rights and obligations, this Court does not have
jurisdiction under 1292(a)(3) to entertain it. Accordingly, the
cross-appeal is dismissed.
III. Supplemental Rules for
Certain Admiralty and Maritime Claims
On appeal, Asoma challenges Thypin's
and Donbakraft's arrest of the bill of lading pursuant to Supplemental
Rule D for Certain Admiralty and Maritime Claims. Thypin and
Donbakraft maintain that Supplemental Rule D,(6)
entitled "Possessory, Petitory and Partition Actions,"(7) supplies the necessary basis to support
the arrest of the bill of lading. Asoma argues, in contrast,
that Supplemental Rule C,(8) entitled
"Actions In Rem: Special Provisions," provides the
appropriate procedure for arrest of property in an in rem
proceeding and that Rule C by its terms specifically excludes
plaintiffs' claim from the ambit of admiralty in rem arrest
since it requires that a maritime lien authorizing in rem
arrest be pleaded. For the reasons discussed below, we find that
the bill of lading was properly arrested pursuant to Supplemental
Supplemental Rule D explicitly applies
to an in rem action to acquire title to maritime property.
See Fed. R. Civ. P. Supp. R. D. Plaintiffs' in rem
action is a possessory suit to recover the bill of lading and,
likewise, the cargo, based on a maritime contract. See Dluhos
v. Floating & Abandoned Vessel, 162 F.3d 63, 68 (2d Cir.
1998) (interpreting Rule D as providing the mechanism for the
arrest of a res in an in rem action and affirming
the dismissal of the complaint where plaintiff did not move pursuant
to Rule D for a warrant of arrest of the vessel); 1 Benedict
on Admiralty 201, at 13-2 n.4 (categorizing a suit to recover
cargo based on a maritime tort or contract as a possessory action
(subject to Rule D)); cf. Cary Marine, 872 F.2d at 756-57
(Rule D governing possessory actions is unavailable where admiralty
jurisdiction did not independently exist because plaintiff's
claim to the vessel arose out of a non-maritime purchase agreement);
Evergreen Marine Corp. v. Six Consignments of Frozen Scallops,
4 F.3d 90, 93-95 (1st Cir. 1993) (dismissing plaintiff's in
rem claim against the scallops under Rule D for lack of admiralty
jurisdiction, on the ground that plaintiff had not satisfied
the situs prong of the jurisdiction test for tort claims, without
addressing the propriety of moving under Rule D). Since Rule
D explicitly applies to an in rem possessory action to
acquire title to maritime property, a category under which
a bill of lading clearly falls, we see no error in plaintiffs'
arrest of the bill of lading pursuant to Rule D.
We hold that the District Court
properly found admiralty jurisdiction based on a maritime contract.
We dismiss the cross-appeal for lack of appellate jurisdiction
pursuant to 28 U.S.C. 1292(a)(3). Asoma shall bear the costs
on its appeal; Thypin and Donbakraft shall bear the costs on
cases of common carriage, a bill of lading has a threefold purpose:
It is a receipt for the cargo, it is the contract of carriage,
and, when it is in negotiable form, it is an indicia of title
to the cargo." 2A Benedict on Admiralty 31, at 4-1
(7th ed. 1999) (citing Pollard v. Vinton, 105 U.S. 7,
26 (1881); THE DELAWARE, 81 U.S. (14 Wall.) 579 (1871);
Vanderbilt v. Ocean S.S. Co., 215 F. 886 (2d Cir. 1914)).
In an F.O.B. ("free on board") contract, the seller
must deliver the goods to the vessel named and has the risk of
loss until the goods reach that location. Black's Law Dictionary
676 (7th ed. 1999).
Ulrich Boenzli, a citizen of Switzerland who was responsible
for processing and shipping orders of steel and pig iron to companies
across Europe, Asia, and the United States during the time period
in question, acted for Metall in connection with the purchase
of the steel cargo at issue in this matter. John Farkas is a
citizen of New Jersey who was Senior Vice President of the steel
division at Asoma at all relevant times.
Because we conclude that a maritime contract confers admiralty
jurisdiction in this case, we need not address the plaintiffs'
alternate bases for admiralty jurisdiction predicated on a maritime
tort and the Admiralty Extension Act, 46 U.S.C. 740.
In Isbrandtsen Tankers, Inc. v. President of India, 446
F.2d 1198, 1199 n.1, (2d Cir.), cert. denied, 404 U.S.
985 (1971), we concluded that an order dismissing a cause of
action on immunity grounds was appealable where the parties assumed
that the order was appealable under 1292(a)(3) even though the
other claims in the admiralty complaint remained unresolved.
It is not clear, however, on what grounds the Isbrandtsen
Court rested its conclusion "that the appeal will lie,"
for no analysis was presented. 446 F.2d at 1199 n.1. To the extent
that Isbrandtsen may be in tension with other precedent,
namely, Bergeron, 299 F.2d at 78; Spooner, 297
F.2d at 610; and THE MARIA, 67 F.2d at 571, we find that
the narrow approach to appellate jurisdiction over admiralty
interlocutory orders advanced in this established line of precedent
is warranted in this case.
Supplemental Rule D provides in pertinent part:
In all actions for possession, partition,
and to try title maintainable according to the course of the
admiralty practice with respect to a vessel, in all actions so
maintainable with respect to the
possession of cargo or other maritime property . . . the
process shall be by a warrant of arrest of the vessel, cargo,
or other property . . . .
Fed. R. Civ. P. Supp. R. D.
"Petitory suits are suits in which it is sought to try the
title to a ship independently of any possession of the vessel"
[while] "possessory actions are actions to recover vessels
or other property to which an owner, seaman or lienor is of right
entitled." 1 Benedict on Admiralty 201, at 13-1 to
-2; see also Cary Marine v. Motorvessel Papillon, 872
F.2d 751, 756 (6th Cir. 1989) ("A possessory action permits
a party to adjudicate the right to possession of property that
has wrongfully been taken.").
Supplemental Rule C provides in pertinent part:
(1) An action in rem may be brought:
(a) To enforce any maritime lien; (b) Whenever a statute of the
United States provides for a maritime action in rem or a proceeding
analogous thereto . . . .
Fed. R. Civ. P. Supp. R. C.