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Interpool, Inc. v. Four Horsemen, Inc.

United States District Court, D. New Jersey

February 8, 2017

INTERPOOL, INC. D/B/A TRAC INTERMODAL Plaintiff,
v.
FOUR HORSEMEN, INC., et al., Defendants.

          MEMORANDUM OPINION

          MARY L. COOPER United States District Judge

         Plaintiff Interpool, Inc. d/b/a Trac Intermodal (“Plaintiff”) initiated this action against Ayeah A. Ayesh; Four Horsemen, Inc.; and A&A Exp, Inc. (collectively, “Defendants”), alleging that the Defendants breached a maritime contract with Plaintiff by utilizing Plaintiff's chassis[1] to move maritime cargo without compensating Plaintiff. (See dkt. 1.)[2] Defendants failed to timely respond, and Plaintiff moved for entry of default and entry of judgment by default. (See dkt. 20, dkt. 27, dkt. 28.) Before resolving Plaintiff's motion for entry of judgment by default, the Court, exercising its obligation to satisfy itself that it has subject matter jurisdiction over this action, ordered Plaintiff to show cause why the action should not be dismissed for lack of subject matter jurisdiction. (See dkt. 29.) The Court also invited Plaintiff to assert an alternative basis for jurisdiction to prevent the action from being dismissed if the Court were to find admiralty jurisdiction lacking. Plaintiff responded, arguing that this Court has both admiralty jurisdiction and diversity jurisdiction. (See dkt. 30.) For the reasons discussed below, the Court is unpersuaded by Plaintiff's arguments that it has admiralty jurisdiction. The Court will therefore grant its order to show cause, concluding that the Court does not have admiralty jurisdiction. As a result, the Court must also vacate the writs of maritime garnishment previously issued in favor of Plaintiff under Supplemental Rule B of the Federal Rules of Civil Procedure. Because Plaintiff has alleged an alternative basis for jurisdiction, the Court will not dismiss the case at this juncture, but will issue another order to show cause in light of the Plaintiff's failure to allege personal jurisdiction.

         BACKGROUND

         The following facts are taken from the complaint, the materials submitted in support of the default judgment motion, and Plaintiff's response to the Court's order to show cause. Plaintiff is a Delaware corporation in the business of leasing marine equipment, namely chassis, for the movement of cargo. (See dkt. 1 at 2, dkt. 30-2.) The Defendants took Plaintiff's chassis from chassis pools[3] in certain marine ports “for delivery of marine cargo to consignees, to and from ports of the United States, including, inter alia, the Port of Chicago, ” and have refused to compensate the Plaintiff. (Dkt. 1 at 2.) Plaintiff's Manager of Credit, Claims and Litigation, Karen Wolcott, specified that

Defendants used [Plaintiff's] marine equipment to transport ocean containers between various ports. The ocean containers transported by Defendants were carried pursuant to bills of lading, which provided for the landing of the ocean import cargo and continuous on-carriage by train to the railhead, and then on [Plaintiff's] chassis [ ] to the ultimate consignee.

(Dkt. 30-1 at 2, (“Wolcott Declaration”.))

         Based on the information supplied to the Court by the Plaintiff, it is this Court's understanding that the Defendants took Plaintiff's chassis so that the Defendants could transport ocean import cargo pursuant to the final land portion (i.e., from railhead to consignee) of a “through” (i.e., end-to-end transportation) bill of lading. The question before the Court is thus whether a contract to lease chassis to a carrier so that the carrier may transport cargo from a railhead to a consignee pursuant to a “through” bill of lading provides this court with admiralty jurisdiction.

         DISCUSSION

         I. Admiralty Jurisdiction

         This Court has an obligation to satisfy itself that it has subject matter jurisdiction over a case and may address the issue sua sponte, if need be. See Fed.R.Civ.P. 12(h)(3); Nesbit v. Gears Unlimited, Inc., 347 F.3d 72, 76 (3d Cir. 2003). The burden of proving subject matter jurisdiction is on the plaintiff. CNA v. United States, 535 F.3d 132, 139 (3d Cir. 2008). Federal district courts have original jurisdiction over “[a]ny civil case of admiralty or maritime jurisdiction.” 28 U.S.C. § 1333(1). Thus, if the contract between the parties is a maritime contract, the Court has subject matter jurisdiction pursuant to 28 U.S.C. § 1333.

         The Supreme Court has recognized that “[t]he boundaries of admiralty jurisdiction over contracts . . . have always been difficult to draw.” Norfolk S. Ry. Co. v. Kirby, 543 U.S. 14, 23 (2004). In Kirby, a cargo owner entered into two bills of lading with a freight forwarding company to arrange for the transportation of goods from Australia to Alabama. Id. at 18. The journey included a sea component (from Australia to Savannah, Georgia) and a land component (from Savannah, Georgia to Huntsville, Alabama). Id. at 19-20. During the land portion of the journey, a train carrying the cargo derailed. Id. at 21. The cargo was destroyed, and litigation commenced. Id. The Court initially had to decide whether the bills of lading were maritime contracts (even though they included land portions) because, if they were, federal law would apply to the underlying claims. Id. at 22-23. Looking to the “nature and character of the contract, ” the Court held that the bills of lading were maritime contracts “because their primary objective [wa]s to accomplish the transportation of goods by sea from Australia to the eastern coast of the United States.” Id. at 24.

         The rationale of Kirby was that maritime law must accept the modern realities of maritime transportation:

Maritime commerce has evolved along with the nature of transportation and is often inseparable from some land-based obligations. The international transportation industry clearly has moved into a new era--the age of multimodalism, door-to-door transport based on efficient use of all available modes of transportation by air, water, and land. The cause is technological change: Because goods can now be packaged in standardized containers, cargo can move easily from one mode of transport to another.
Contracts reflect the new technology, hence the popularity of “through” bills of lading in which cargo owners can contract for transportation across and to inland destinations in a single transaction. . . . The popularity of that efficient choice, to assimilate land legs into international ocean bills ...

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