Fifth Cir. Panel Reverses Itself in Attachment Case, Raises Issue Not Argued by Either Litigant
Stemor USA Inc. v. CIA Siderurgica Do Para Cosipar, 895 F.3d 375, U.S. App. LEXIS 18885*; 16-30984 (5th Cir. 2018).
By: Mary Taliancich
In a reversal of its prior decision upon rehearing in the same dispute, 870 F.3d 370 (5th Cir. 2017)[1], Judge Higginson stated for the panel that though the non-resident creditor could not attach property under one provision of Louisiana law, (La. C.C.P. art. 3542) it could, nonetheless, attach the property under another provision (La. C.C.P. art. 3502).[2] The main issue presented is whether a Louisiana non-resident attachment statute allows for attachment in aid of arbitration or before a petition is filed.[3]The court agreed with the district court that a claim to compel arbitration is not a monetary judgment and thus the attachment was not proper.[4] The appeals court went on to state, however, that though the claimant did not attach property pursuant to La. C.C.P. art. 3502, the article could serve as a basis for pre-litigation attachment.[5] However, because the statute requires strict compliance[6] with the procedural requirements of La. C.C.P. art. 3502, any attachment under that provision would also be null.[7]This issue arose from a dispute between two creditors, Thyssenkrupp Mannex GMBH (“TKM”), a German company, and Daewoo International Corp. (“Daewoo”), a South Korean trading company, each of which attached the same pig iron owned by America Metals Trading L.L.P. (“AMT”). AMT sold pig iron to both TKM and Daewoo and failed to deliver it[8] as stated in their contracts, containing arbitration clauses.Daewoo filed suit in federal court[9] against AMT seeking attachment of AMT’s pig iron asserting admiralty jurisdiction. Similarly, TKM filed suit in state court to attach the same cargo under the Louisiana statute and then intervened in the federal suit.[10] Daewoo subsequently amended its complaint to seek a writ of attachment under the Louisiana non-resident attachment statute. La. Code Civ. Proc. Art. 3542. Both parties then moved to sell the pig iron and to have the proceeds held in custodia legis and substitute for the res.[11]TKM moved to vacate Daewoo’s attachment asserting that[12] (1) maritime jurisdiction was improper and (2) Louisiana non-resident attachment was inapplicable. The district court held that it had jurisdiction pursuant to the New York Convention (9 U.S.C. § 201 et seq.)[13] and that because Daewoo’s underlying suit was to compel arbitration, it was not an “action for a money judgment” under the Louisiana non-resident attachment statute and therefore a non-resident attachment writ was inapplicable. The appeals court affirmed on both issues.[14]Louisiana’s attachment statute provides that “[a] writ of attachment may be obtained in any action for a money judgment, whether against a resident or a nonresident, regardless of the nature, character, or origin of the claim, whether it is for a certain or uncertain amount, and whether it is liquidated or unliquidated.” La. Code Civ. Proc. Art. 3542. Supported by Louisiana case law, a “money judgment” is “[a] judgment for damages subject to immediate execution, as distinguished from equitable or injunctive relief.” As such, an “action for a money judgment” is a civil or criminal judicial proceeding seeking monetary damages.Though Daewoo did not assert that its attachment would be valid under La. C.C.P. art. 3502, the appeals court nonetheless addressed this in dictum.[15] Under this provision, attachment may issue prior to filing suit.[16] However, this article requires strict compliance with its provisions.[17] “Article 3502 allows for attachments to issue in aid of arbitration so long as the party seeking the attachment (1) complies with the requirements of Article 3502 and (2) shows good cause for a pre-petition attachment, which will usually require showing that arbitration is likely to result in a confirmation suit and also showing a need for an immediate attachment (which may include an inquiry into the imminence of the arbitration or confirmation suit).[18]” Daewoo failed to fulfill step one of the article.Judge Graves dissented.[19] [1] Stemor USA Inc. v. CIA Siderurgica Do Para Cosipar, 895 F.3d 375, 377 (5th Cir. 2018).[2] Id. at 384.[3] Id. at 383.[4] Id. at 377.[5] Id. at 383.[6] 895 F.3d 375 at 384.[7] Id.[8] Id. at 378.[9] Id.[10] Id. [11] 895 F.3d 375 at 378.[12] Id.[13] Id.[14] Id. at 384.[15] Id.[16] 895 F.3d 375 at 383.[17] Id. at 386.[18] Id. at 384.[19] Id. at 385-87.
