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Union Steel America Co. v. Spruce


October 28, 1998


The opinion of the court was delivered by: Irenas, District Judge



This matter appears on a motion for reargument filed pursuant to District Court of New Jersey Local Civil Rule 7.1(g) by defendants Spruce Maritime S.A. ("Spruce Maritime"), and The Sanko Marine Co., Ltd. ("Sanko Marine") (collectively, "defendants"). Defendants object to this Court's order entered July 20, 1998, and challenge the decision to enforce the forum selection clause in this case only as to plaintiff Union Steel America Co.'s ("Union Steel") cause of action against defendant Yukong Line Limited ("Yukong"). Defendants continue to argue that Union Steel also must sue them in the selected forum, even though they were not parties to the bills of lading containing the forum selection clause. *fn1 For the reasons that follow, this Court will deny the motion for reargument.


"The standard of review involved in a motion for reargument is quite high, and therefore relief under this rule is granted very sparingly." United States v. Jones, 158 F.R.D. 309, 314 (D.N.J. 1994); accord Maldonado v. Lucca, 636 F.Supp. 621, 630 (D.N.J. 1986). A party seeking reconsideration must show more than a disagreement with the court's decision. "[R]ecapitulation of the cases and arguments considered by the court before rendering its original decision fails to carry the moving party's burden." Carteret Savings Bank, S.A. v. Shushan, 721 F.Supp. 705, 709 (D.N.J. 1989), modified on other grounds, 919 F.2d 225 (3rd Cir. 1990); see also Pelham v. United States, 661 F.Supp. 1063, 1065 (D.N.J. 1987); Maldonado, 636 F.Supp. at 630; Lite, N.J. Federal Practice Rules 7.1(g), comment 8(c). Thus, the district court will deny a motion for reconsideration where the plaintiff fails to "provide the court with any pertinent case law or fact which th[e] court may have overlooked." Egloff v. New Jersey Air Nat'l Guard, 684 F.Supp. 1275, 1279 (D.N.J. 1988).


A. The Basis for the Instant Motion

The forum selection clause in this case provides that "any dispute arising under this bill of lading shall be decided in the country where the Carrier has his principal place of business." Defendants contend that this Court "overlooked" authorities they cited in their briefs when it decided that only Yukong Line, as a contracting party, could enforce the forum selection clause.

In its briefs, Union Steel argued that defendants' liability under the Carriage of Goods by Sea Act, 46 U.S.C.App. §§ 1300-1315 ("COGSA"), will be reduced under Korean law because it will not recognize Spruce Maritime and Sanko Marine as carriers, and that its tort claims against those parties do not "arise under" the bills of lading. These arguments raised the collateral question of whether, as a general matter, claims against non-parties to the bills of lading must be brought in the chosen forum.

This question was addressed in part by defendants where they argued that the phrase "any dispute" shows that one need not be a carrier to invoke the clause; this portion of their argument contained no citations. Defs. Rep. Br. at 26. Defendants also pointed to the facts of two cases to show that non-parties have benefitted from forum selection clauses. Id. The cases this Court is reported to have "overlooked" were not cited in this portion of the discussion. Where they were cited, it was not for any discussions of the instant issue. As in their instant brief, defendants cited the "overlooked" cases not for any discussions of applicable law, but only to show that non-parties to bills of lading successfully have invoked forum selection clauses (apparently, in part, because no one in those cases questioned their ability to do so). The cases defendants now cite for legal standards supporting their position are cases which appeared nowhere in their prior briefing.

In short, defendants' claim that this Court "overlooked" a number of cases they had cited is incorrect and somewhat disingenuous. Nonetheless, since this Court's consideration of the issue sub judice was to some degree sua sponte, *fn2 since defendants now cite additional pertinent authorities, and in light of the specter of litigation in two countries with its attendant expense and risk of inconsistent results, this Court has given the issues presented at this stage of the case another searching review.

B. Enforcement of the Forum Selection Clause as to Sanko Marine and Spruce Maritime

There are two issues. First, do Sanko Marine and Spruce Maritime have the right to invoke the forum selection clause? Second, do Yukong Line's rights under the forum selection clause include the right to compel Union Steel to sue these defendants in the chosen forum? While the inquiries might overlap to some degree, these two questions present different issues. One goes at base to the scope of the forum selection clause, while the other goes to the question of who may invoke it. This Court finds the issues involved to be difficult and subtle.

Ultimately, however, this Court need not resolve these issues. For at this stage in the litigation, this Court cannot be certain that plaintiff's COGSA rights will be protected in the event that this Court dismisses Union Steel's claims. This uncertainty arises from an issue left unresolved in this Court's July 20 opinion: whether a Korean court applying the Korean Commercial Code ("KCC") will recognize multiple entities as carriers. *fn3

Union Steel claims that the Korean forum will not recognize Sanko Marine and Spruce Maritime as carriers because Korean law will not recognize both the time charterer and the vessel owner as carriers. *fn4 Defendants' Korean maritime law expert explains that while there is no question that the Korean court will treat Yukong Line as a carrier under the KCC, see Decl. of J.H. Choi ¶ 26, there is a dispute among Korean legal scholars concerning whether both a ship owner and a time charterer may be carriers, see id. ¶¶ 24-26. Plaintiff's contention appears to be that if Korean law as a rule will recognize only the time charterer as carrier, then Sanko Marine and Spruce Maritime will escape liability as carriers notwithstanding that they might face such liability under COGSA. See Pl. Opp. Br. at 29; Decl. of Yong Suk Yoon ¶¶ 25-29. Thus, Korean law would work to reduce COGSA carriers' liability by not recognizing them as carriers in the first instance. Defendants' only response is to say that there is no doubt that Yukong Line will be a carrier under Korean law.

The multiple carrier issue has been raised in other cases, see International Marine Underwriters CU v. M/V Kasif Kalkavan, 989 F. Supp. 498 (S.D.N.Y. 1998); Hyundai Corp. U.S.A. Inc. v. M/V An Long Jiang, No. 97-3855 (S.D.N.Y. Jan. 13, 1998) (unpublished opinion), but these cases offer little guidance. In International Marine Underwriters, the point was moot because the defendants stipulated that they would assume the responsibilities and liabilities of a carrier under Korean law in the event the Korean court were to find liability. See 989 F. Supp. at 499. In Hyundai Corp. U.S.A., the point was moot because the shipper remained free to continue its suits against the ship owner and the vessel in the district court. See No. 97-3855 at 4.

This Court cannot claim to understand the contours and potential ramifications of the disputed point of Korean law, let alone predict with any confidence how the Korean court will decide the multiple carrier issue. Nor is it appropriate to make a prediction in these circumstances. This case differs from the normal cases in which a district court must make a prediction on a question of state or foreign law and then apply the rule whose adoption it has predicted. Here this Court is not called upon to apply Korean law. Rather, this Court is asked to dismiss Union Steel's claims based on a prediction of how the Korean court will settle a disputed issue of Korean law, with the real possibility remaining that the law actually applied by the Korean court will be other than that which this Court predicted. This problem was one of the central difficulties with enforcing foreign forum selection clauses in COGSA-covered bills of lading identified by the Second Circuit in Indussa Corp. v. S.S. Ranborg, 377 F.2d 200 (2d Cir. 1967) (en banc), and one which the Supreme Court essentially did not address in Vimar Seguros Y Reaseguros v. M/V Sky Reefer, 515 U.S. 528 (1995).

With International Marine Underwriters CU v. M/V Kasif Kalkavan in mind, this Court has given consideration to certain stipulations defendants might make, such stipulations no doubt fitting into the category of "expedients" which the Second Circuit had in mind when speaking of courts being "obliged to forecast the result of litigation in a foreign court or attempt other expedients to prevent a lessening of the plaintiff's rights." Indussa, 377 F.2d at 202. But this course is fraught with difficulty. It cannot be known whether the Korean court would accept or enforce such a stipulation. Disputes might arise concerning how the stipulation should be interpreted. Moreover, the parties' dispute as to which defendants are COGSA carriers complicates the task of drafting an effective stipulation regarding which entities will be treated as carriers in the Korean court. On another level, the enterprise of drafting stipulations to control some aspect of the litigation in the foreign forum, or to prohibit certain outcomes, seems fundamentally at odds with some policy reasons for enforcing forum selection clauses. This Court does not further the interests of comity or show respect for foreign courts and foreign laws when it meddles with, and seeks in some measure to control, the course and possible outcomes of litigation in a foreign forum. See generally Sky Reefer, 515 U.S. at 537-38.

In sum, this Court does not know whether Sanko Marine's and Spruce Maritime's COGSA liability will be reduced in the foreign forum, and it will not rely on stipulations to try to cure any defects in this regard. As this Court stated in its July 20 opinion that "the party seeking to avoid enforcement of the clause [must] show that there is a likelihood that `the substantive law to be applied will reduce the carrier's obligations to the cargo owner below what COGSA guarantees.'" Union Steel Am. Co. v. M/V Sanko Spruce et al., No. 97-5696(JEI), at 23 (D.N.J. July 20, 1998) (quoting Sky Reefer, 515 U.S. at 539). *fn5 With respect to the multiple carrier issue, Union Steel has made that showing. In addition, it must be recognized that Union Steel's COGSA rights are diminished in the Korean forum by the very lack of certainty regarding whether or not Union Steel will have it COGSA rights against Sanko Marine and Spruce Maritime as carriers in that forum. In conclusion, even if this Court were to find that Sanko Marine and Spruce Maritime could invoke the forum selection clause, or that the scope of the clause permits Yukong Line to compel Union Steel to sue them in Korea, this Court would not dismiss Union Steel's claims against Sanko Marine and Spruce Maritime.


For the foregoing reasons, this Court will deny defendants' motion for reargument.



This matter having come before this Court on the motion for reargument filed by defendants Spruce Maritime S.A. and The Sanko Marine Co., Ltd. ("defendants"); this Court having reviewed the parties' briefs and submissions; and for the reasons set forth in an opinion issued on an even date herewith;

IT IS on this ____ day of August, 1998,

ORDERED THAT defendants' motion for reargument is DENIED.


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