Petition — M. W. Zack Metal Co. v. Severn River

Supreme Court brief1978

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In the Supreme Court of the United States

EEE

M. W. ZACK METAL COMPANY, Petitioner,

Vv.

SS SEVERN RIVER, JANSEN & CO.,

« CONTAM LINIE, and HANS H. JANSEN, Respondents.

ON PETITION FOR A WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS FOR

THE THIRD CIRCUIT

ANTHONY B. CATALDO

Attorney for Petitioner

Office and P.O. Address

lll Broadway

New York, New York 10006

212-962-0965

Printinghouse Press — Bar Ass'n Steno Serv. ( Appeals Section) 212-687-0384

JUL S31 i978

TABLE OF CONTENTS

PETITION

OPINIONS BELOW

JURISDICTION

QUESTIONS INVOLVED

Question

ViekWwnre

CONSTITUTIONAL, STATUTORY and RULES

PROVISIONS INVOLVED

UNITED STATES CONSTITUTION

Article III, Section 2, Clause l

Article III, Section 2, Clause 2

Article IV, Section 2, Clause l

UNITED STATES CODE

28 usc 1254

28 USC1333

23 usc 1653

28 usc 1654

46 USC 1300

46 usc 1301

46 usc 1303

46 usc 1304

FEDERAL RULES OF CIVIL PROCEDURE

Rule 1

Rule 8

-i-

Page

SNS OV W Ww lo N -_

io © 0

TABLE OF CONTENTS (cont.)

Rule 15

Rule 18

Rule 19

Rule 20

Rule 60

CONCISE STATEMENT OF THE CASE

REASONS WHY A WRIT OF CERTIORARI

SHOULD ISSUE IN THIS CASE

CONCLUSION

CASES CITED

ASBESTOS CORP. v. COMPANIE de NAVI-

GATION etc., 345 F. Supp. 814, 820

BENZ KID CO. v. KAWASAKI, 1954 AMC

130, (not officially reported)

BOURNAIS v. ATLANTIC MARITIME CO.,

220 F.(2) 152

CITY OF NORWICH, 118 U.S. 468

CONLEY v. GIBSON, 355 U.S. 41, 48

CONSTRUCTION AGGREGATES CORP. v.

SS AZALEA CITY, (DC. N.J.) 399 F.

Supp. 662

CONTINENTAL GRAIN CO. v. BARGE

P.B.L. 565, 344 U.S. 19

COPP v. DE CASTRO & DONNER SUGAR

REFINING CO., 8 Ben. 321, Case No.

3215

wtie

Page

CASES CITED (cont.)

CZAPLICKI v. THE HOEGH SILVERCLOUD,

351 U.S. 525

DAVIS v. DAVIS, 305 U.S. 32

DU PONT v. VANCE, 19 How. 162

EASTERN TOWNSHIP BANK v. BEEBE,

os Ve. L7?

EDMOND WEILL INC. v. AMERICAN

WEST AFRICAN LINE INC., 2 Cir.

1945 147 F.(2) 363, 366.

FOMAN v. DAVIS, 371 U.S. 178

HAMILTON v. CANAL BARGE COMPANY

INC., 395 F. Supp 978

HILL v. BRUNE, 498 F.(2) 565, 568

HILTON v. GUYOT, 159 U.S. 113, 16

S.CT. 139, 40 L. ed. 95

INTERNATIO-ROTTERDAM INC. v. TOMSON,

4 Cir., 218 F.(@) 514;

LOVRICH v. WARNER CO., 118 F.(2) 690

MIAMI STRUCTURAL STEEL CORP. v. CIE.

NATIONALE BELGE de T.M., 224 F. (2)

566, 568

M. W. ZACK METAL COMPANY v. INTER

NATIONAL CORPORATION OF MONROVIA,

510 F.(2) 451, cert. den., 96 S.CT.

60, 423 U.S. 875, 46 L.ed.(2) 53

NORFOLK SHIP & DRY DOCK CORP. v.

M/Y LA BELLE SIMONE, 375 F. Supp. 985

-iii-

Page

35,44

23,30

CASES CITED (cont. )

ORE S/S CO. v. HASSEL, 2nd cir.,

137 F.(2) 326, 329 ,

ROYSTON DISTRIBUTORS v. MANCHESTER

LINES, 1963 A.M.C. 761(not offici-

ally reported)

SCHNELL v. VALLESCURA, 293 U.S.

296, 303, 55 S.CT. 194, 79 L.ed. 373

SO. PACIFIC CO., v. BOGART, 250 U.S,

483

STEVENS v. THE SANDWICH, Fed. Cas.

13409

SWIFT COMPANY PACKERS et al. v.

COMPANIA COLUMBIANA DEL CARIB, S,.A.,

et al., 339 U.S. 684

SYSTEM FEDERATION NO. 91 v. WRIGHT,

364 U.S. 642

TASHJIAN v. CHORIGIAN, (A.T. lst) 183

Misc. 204

THE ADELINE, 9 Cranch 244, 3 L.ed.

719

THE CARLOTTA, 48 F.(2) 110, 112

THE COMMANDER-IN-CHIEF, 1 Wall.

43, 17 L.ed. 609

THE FREEMAN v. BUCKINGHAM, 18 How.

(55 U.S.) 182

THE GAZELLE, 128 U.S. 474, 487

Page

35,44

CASES CITED (cont.)

THE KEY CITY, 14 Wall. 653

THE MARIANNE FLORA, 1l WHEAT. l,

6 L.ed. 405

THE MONTE A,12 Fed. 331

THE PHEBE, 1 Ware 263

THE REBECCA, 1 Ware 187, Fed.

Cas. 11619

UNITED FRUIT v. FOLGER, 1959 A.M.C.

2224, 270 F.(2) 572

UNITED STATES v. WESTERN, 352 U.S.

UNRRA v. MORMACMAIL, 99 F. Supp.

552

WARNER v. BUFFALO DRY DOCK, 267

F.(2) 540

STATUTES RULES AND AUTHORITIES

46 usc 1303 (6)

FEDERAL RULES OF CIVIL PROCEDURE

Rule 15(c)

Rule 19(a) and (b)

Rule 20

2 AM. JUR., 2nd Ed., ADMIRALTY

Section 190

BENEDICT ON ADMIRALTY

Chapter 462

Chapter 466

-V=-

Page

35,44

25,44

STATUTES RULES AND AUTHORITIES (cont.)

CORPUS JURIS SECUNDUM rage In the Supreme Court of the United States

Section 122 46 October Term, 1978

Section 123 46 No.

Section 124 46

EHRENZWEIG, CONFLICT OF LAWS, PEA

PART ONE, pp. 213-214 42 M. W. ZACK METAL COMPANY, Petitioner,

GOODRICH, CONFLICT OF LAWS Ve

3rd ed.

Chapter 15, p. 631 42 SS SEVERN RIVER, JANSEN & CO.,

CONTAM LINIE, and HANS H. JANSEN, Respondents

RESTATEMENT OF THE LAW, CONFLICT

OF LAWS, 2nd Ed.

Beckton 110. 43 ON PETITION FOR A WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS FOR

THE THIRD CIRCUIT

TO THE HONORABLE THE CHIEF-JUSTICE

and THE ASSOCIATE JUSTICES OF THE

SUPREME COURT OF THE UNITED STATES:

The petitioner, M. W. Zack Metal Com-

pany, respectfully prays this Honorable Court

to issue a writ of certiorari to the Court of

Appeals, Third Circuit, to review the deci-

sion and judgment of that court made May 2,

-le-

-~yvyi-

1978, unanimously affirming the decision and

judgment of the United States District Court

for the District of New Jersey, denying plain-

tiff's motion to restore this case to the

docket and to amend the libel filed against

the vessel "Severn River" by substituting her

owner, International Navigation Corporation

of Monrovia, Liberia, in her place and stead,

which orders of denial by said District Court

are Dated October 19, 1976 and July 14, 1977.

OPINIONS BELOW

The opinion and decision of the Court of

Appeals has not been reported. Attached here-

to is a true copy of the same, as appendix A.

The orders and decisions of the District Court

of New Jersey have not been reported. Attached

hereto are true copies of both said decisions,

see appendices B and C, respectively. No re-

consideration was sought or held in the Court

of Appeals. The decision of the District Court

dated July 14, 1977, was on a reargument of its

of its decision of October 19, 1976,

JURISDICTION

The judgment of affirmance in the Court

of Appeals is dated May 2, 1978. This peti-

tion is being filed within 90 days of that

date. The jurisdiction of this honorable courtis

being invoked under 28 USC 1254 (l).

QUESTIONS INVOLVED

1.) Where petitioner, the owner of a car-

go of steel sheets in coils, received them at

their destination at Port Newark, New Jersey,

in damaged condition, and in order to stop the

running of the one year Statute of Limitation

as provided by Cogsa, it filed a timely suit in

Admiralty in the United States District Court

for the Southern District of New York and anoth-

er timely Admiralty suit in the United States

District Court for the District of New Jersey,

both of which named the carrying vessel, the

Severn River, and her charterers, Jansen & Co,

Hans H. Jansen and Contam Linie, all of Hamburg,

Germany, as respondents, and a third suit was

commenced in a court at Hamburg, Germany, in

personam, against the charterers and the owner

of the vessel, International Navigation Corp-

oration of Monrovia, and personal jurisdiction

was obtained in the German suit, but it could

not be obtained in either of the Admiralty

suits. The suit in Germany was prosecuted ac-

cording to German law, in which the trial court

entered separate judgments as separate issues

were decided, so that in 1966, the first of the

German court's decisions was made holding the

charterers liable. A second judgment in June,

1970, was made holding that the per package limi-

itations under Cogsa and under the Hague rules

did not apply, and a third and final judgment

was entered on December 7, 1971 in favor of pe-

titioner against all defendants for $64,000

with interest and costs, whereas both the Ad-

miralty suits were dismissed for lack of pros-

ecution for the failure to obtain personal jur-

isdiction over the respondents; the dismissal of

this suit in the New Jersey district court oc-

curred by an order dated March 24, 1965, en-

tered by the court, sua sponta, which order

provided that the dismissal was without preju-

dice to the right of the petitioner to re-open

the proceedings upon good cause shown.

On appeal from the German trial court's

judgment, the Appeal Court, on January 9, 1975,

entered its decision affirming the judgment as

against the charterers in the reduced sum of

$33,000 with interest and some costs, but dis-

missed the suit against the shipowner because

of the time-bar provision of Section 901 and

902 of the German Commercial Code which that

court said was applicable.

Further litigation ensued as will be here-

inafter mentioned and explained and at the con-

clusion of which, in February 1976, it became

obvious that the charterers were not paying the

judgment, as affirmed, and it has not been paid

to date, and that the application of a local

Statute of Limitation to dismiss the action

against the owner, according to the Conflict

Laws, is not a dismissal on the merits, so that

-5-

this petitioner's just claim would be lost un-

less the Admiralty courts would restore the

case to its docket for trial, as a consequence

of which, petitioner sought on February 6, 1976,

an ex-parte order of the district court of New

Jersey, to restore this suit to the docket for

trial, and further, it sought permission to sub-

stitute the owner for the vessel which had mean-

while foundered and become a total loss in 1967-

1968. Wasn't it error for the district court

to deny the motion despite the fact that peti-

tioner had not had its day in court on the

merits of its cause in Admiralty, and the fur-

ther fact that laches was neither proven nor

claimed by respondents for they claimed no pre-

judice from the delay and they could not claim

lack of diligence?

2.) Wasn't it error for the district court

to deny the motion because it said that Cogsa's

bar of one year had run in favor of the ship-

owner, despite its acknowledgment that the suit

in Germany against the owner in personam, was

started on May 13, 1961, when the last day,

according to an extension of time granted to

petitioner to sue, would have expired on May

15, 1961?

3.) Wasn't it error for the district

court to acknowledge that timely suits were

started in our Admiralty courts against the

Severn River, but held that her owner's right

to claim the time-bar was not affected by the

filing against its vessel?

4.) Wasn't it error for the district

court to acknowledge that the Severn River

was no longer a viable vessel and no longer

subject to in rem process of our Admiralty

courts, yet, it used her demise as a reason

for holding that it would be futile to re-

store the case to the docket?

5.) Wasn't it error for the district

court to ignore the facts that personal juris-

diction of our Admiralty courts had been de-

feated by respondent's action in leaving port

before a suit could be started and in staying

away from its process and jurisdiction, facts

which are indigenous to the general Maritime

Law, and hence, the Civil Rules of Federal

Procedure should have been interpreted to aid

the jurisdiction of our Admiralty courts to

try this Admiralty cause instead of being re-

strictive in treating with Rule 15(c) or the

Statute of Limitation of Cogsa. Wasn't such

action a denial of due process as was normal-

ly available in our Admiralty courts?

CONSTITUTIONAL, STATUTORY and RULES

PROVISION INVOLVED

UNITED STATES CONSTITUTION

Article III, Section 2, clause l, of the

United States Constitution reads in its per-

tinent parts:

"Section 2. The judicial power shall ex-

tend * * * to all cases of Admiralty and Mari-

time jurisdiction."

Clause 2 of said Article III, Section 2,

reads in its pertinent parts, after first pro-

viding for the original jurisdiction of this

honorable court to cases affecting Ambassadors

other public ministers and States, as follows:

"In all other cases mentioned, the Supreme

Court shall have Appellate jurisdiction, both

as to law and facts, with such exceptions and

under such regulations as the Congress shall

make,"

Article IV, Section 2, Clasue l, reads:

"Section 2. The citizens of each state

shall be entitled to all privileges and immu-

nicies of the citizens in the Several States."

Amendment V to the United States Constitution

reads in part as follows:

"No person shall be deprived of life,

liberty or property, without due process of

law * * * ,. "

UNITED STATES CODE PROVISIONS

28 USC 1254. Cases in the courts of ap-

peal may be reviewed by the Supreme Court by

the following methods:

l. By writ of certiorari granted upon the

petition of any party to any civil or crim-

inal case, before or after fendition of the

judgment or decree; * * * .”

28 USC 1333. Admiralty, Maritime and

Prize cases.

The district courts shall have original

jurisdiction exclusive of the courts of the

states of:

1. Any civil case of Admiralty or Mari-

time jurisdiction, saving to all suitors in

all cases, all other remedies to which they

are otherwise entitled * * * "

28 USC 1653. Amendment of pleadings

to show jurisdiction:

Defective allegations may be amended,

upon terms, in the trial or appellate courts.

28 USC 1654. Apeparance personally or

by counsel.

In all courts of the United States the

parties may plead and conduct their own cases

personally or by counsel as by the rules of

such courts, respectively, are permitted to

-10-

manage and conduct causes therein.

46 USC 1300. Bills of lading subject

to chapter.

Every bill of lading, or similar docu-

ment of title which is evidence of a contract

for the carriage of goods by sea to or from

ports of the United States, in foreign trade,

Shall have effect subjecttoOthe provisions of this

chapter.

46 USC 1301. Definitions; when used in

this chapter.

(a) The term "carrier" includes the owner

or the charterer who enters into a contract of

Carriage with a shipper * * * , "

46 USC 1303. Responsibilties and liabil-

ities of carrier and ship-Seaworthiness.

* * *

(2) The carrier shall properly and care-

fully load, handle, stow, carry, keep, care for,

and discharge the goods carried.

* * *

(6) * * * In any event the carrier and

the ship shall be discharged from all liabil-

elle

ity in respect of loss or damage, unless

suit is brought within one year

after delivery of the goods * * *

46 USC 1304. Rights and immunities of

carrier and ship-unseaworthiness.

a * *

(5) Neither the carrier nor the ship shall,

in any event, be or become liable for any loss

or damage to or in connection with the trans-

portation of goods in an amount exceeding $500.

per package lawful money of the United States,

or in cases of goods not shipped in packages,

per customary freight unit * * *

FEDERAL RULES OF CIVIL PROCEDURE

Rule 1. These rules govern the pro-

cedure in the United States district courts

in all suits of a civil matter, whether cog-

nizable as cases at law or in equity or in ad-

miralty with the exceptions stated in Rule 81.

They shall be construed to secure the just,

speedy, and inexpensive determination of every

action.

Rule 8. General Rules of Pleadings

(e} Pleadings to be concise and direct;

consistency.

1. Each averment of pleading shall be

simple, concise and direct. No technical forms

of pleadings or motions are required * * *

(£) Construction of pleadings. All

pleadings shall be so construed as to do sub-

stantial justice.

Rule 15. Amended and supplemental Plead-

ings.

(a) A party may amend his pleading once

as a matter of course at any time before a

responsive pleading is served, * * * . Other-

wise, a party may amend his pleading only by

leave of court * * * and leave shall be freely

given when justice so requires * * *

ted in the amended pleading arose out of the

conduct, transactionoroccurrence set forth or

attempted to be set forth in the original

pleading, the amendment relates back to the

-13-

~ naa

date of the original pleading. An amendment

changing the party against whom a claim is as-

serted, relates back if the foregoing provi-

sion is satisfied and, within the period pro-

vided by law for commencing the action against

him, the party to be brought in by amendment

(1) has received such notice of the institu-

tion of the action that he will not be preju-

diced in maintaining his defense on the merits,

and (2) knew or should have known that, but

for a mistake concerning the identity of the

proper party, the action would have been

brought against him.

Rule 18. Joinder of Claims and Remedies

(a) Joinder of claims - A party asserting

a claim to relief as an original claim, cross-

claim, or third-party claim, may join, either

as an independent or as alternative claims, as

many claims, legal, equitable or maritime as he

has against an opposing party.

Rule 19. Joinder of persons needed for

Just Adjucation.

Se 5 eA tata

(a) Persons to be joined if feasible.

A person who is subject to service of process

and whose joinder will not deprive the courts

of jurisdiction over the subject matter of the

action, shall be joined as a party in the ac-

tion if (1) in his absence, complete relief

cannot be accorded among those already parties,

or * * *

“ule 20. Permissive Joinder of Parties

(a) Permissive Joinder. * * * . All per-

sons (and any vessel, cargo or other property

subject to admiralty process in rem) may be

joined in one action as defendants if there

is ass-tted .gainst them jointly, severally,

or in -,ernative, any right to relief in

resyecrt of cr arising out of the same trans-

action, occurrences or series of transactions

Or occurrences, and if any question of law or

fact common to all persons will arise in the

action. * * * ,

Rule 60. Relief from Judgment or Order

* * *

(b) On motion, and upon such terms as

are just, the court may relieve a party or

o1 $<

his legal representation from a final judgment

order, or proceeding for tne following reasons:

* * * (5) the judgment * * * is no long-

er equitable that the judgment shall have pro-

spective application; or (6) or any other

reason justifying relief from the operation of

the judgment. * * * .

CONCISE STATEMENT OF THE CASE

In January, 1960, petitioner caused to

be delivered at Antwerp, Belgium, to Jansen

& Co. of Hamburg or its agents at Antwerp,

its shipment of 93 coils of sheet steel to

be used for automobile bodies for delivery to

the port of New York. Said coils were received

at Antwerp, placed aboard the SS Severn River

bound for the port of New York, for which bill

of lading No. 35 was issued, stating that said

steel was received on board in good order and

condition for transport to New York, and there

to be discharged. Freight for the carriage

was paid according to weight. The coils tra-

velled unboxed or unpackaged, and had a total

-16<

weight of 443 metric tons. The bill of lading

was on a form used by Jansen & Co., but it was

signed for the master by an agent ashore. The

steel was loaded and transported to Newark,

New Jersey, but discharged in damaged condition

to a lighter employed by the petitioner to re-

ceive the steel. The shipment was fully dis-

charged to said lighter on February 16, 1961.

The fact of damage to petitioner's ship-

ment of steel was found by the trial court in

Germany to be recoverable of both the Charter-

ers and the shipowner. Thus petitioner's claim

to a valid claim for cargo damage has been con-

firmed by the only court who heard the evidence

and considered the merits of petitioner's claim.

Petitioner defeated the respondent's claim

to the time-bar of Cogsa by filing a libel in

the Southern District Court of New York, on

February 1l, 1961, where a libel was filed in

Admiralty against the Severn River and her

charterers, Jansen & Co., Contam Linie and Hans

H. Jansen. Furthermore, petitioner had, in 1961,

applied for an extension of time to file suit

ol17<

to May 15, 1961, which extension was granted

in writing in February. Besides the filing

of the said libel on February 11, 1961,

this suit in Admiralty was filed on May 12,

1961, against the same respondents as in the

New York suit, and, on May 13, 1961, an in-

personam suit was started in Germany against

the owner of the Severn River, the Interna-

tional Navigation Corporation of Monrovia,

and the charterers. There can be no question

that these suits tolled the time-bar of

Cogsa's Statute of Limitations and that that

defense of time-bar was never vested in the

carrier or the ship.

The vessel left the jurisdiction of the

Admiralty court in the port of New York im-

mediately upon the completion of discharge in

February, 1960. Neither the owner nor the

charterers could be reached within the juris-

diction and could not be served with process

of either Admiralty court. The suit in New

~18«

~ es

Jersey was dismissed for failure to prose-

cute, but its order of dismissal provided

that such dismissal was without prejudice

to plaintiff's right to re-open the pro-

ceedings upon good cause shown. This latter

order was entered on March 24, 1965. The

reason for the failure to prosecute either

suit was petitioner's inability to get juris-

diction over these respondents, despite a

watchful alert for the return of the Severn

River to these ports, and the suit in Ger-

Many appeared to be proceeding under capable

handling of appointed German counsel. Only

one recovery was sought or could be had.

In 1967 or 1968, unknown to petitioner

or their agents, the Severn River foundered

on rocks in the Far East, a fact never re-

ported by respondents either to petitioner

Or to the courts. The suit in Germany pro-

gressed in a manner according to German jur-

isprudence and a judgment was entered in 1966

limited to a finding of liability on the part

=] 9—

of the charterers. Then in June, 1970, a

second judgment was entered, finding that

the per package limitations, whether under

American or Belgium law, were not applicable.

Lastly, on December 7, 1971, the German

Court of First Instance found the shipowner

liable and fixed the recoveryat $64,000 with

interest and cost against all parties defen-

dants. This last judgment seems to have

limited the execution on the judgment,

against the owner, to the seizing of the

Severn River, because the court further

found that said vessel was sailing the seas.

All judgment debtors appealed, but only the

charterers affected a stay of execution. At

this point, petitioner's counsel at Hamburg

was advised that no stay would be applied

for the owner as the carrying vessel had long |

since been withdrawn from navigation.

Petitioner thereupon sought to sue the

owner upon the judgment by attaching one of

its other vessels, if any arrived in the Uni-

-20-

ted States. In April, 1973, it was found

that the Steamship Virtus, a sister ship of

the Severn River, was due to arrive at Nor-

folk and a suit was commenced in the Admir-

alty court at Norfolk and the Virtus was

seized for jurisdictional and security pur-

poses. A motion to dismiss for failure to

serve process properly upon the owner was

made. The court held the motion in abeyance

and after a time, without filing an answer

Or motion therefor, new grounds for dismis-

sal were asserted, defendant alleging that

the judgment in Germany against the owner

was not a judgment in personam, which could

reach the general assets of the owner, or,

if the complaint were to be read as resting

on the original cause of action for cargo

damage, that such was time-barred by Cogsa.

The court dismissed the complaint in an un-

published decision, upon the various grounds

argued for by the shipowner. Feeling ag-

grieved, as none of the five or six grounds

-2l-

—--

2 “_~ «0

fixed by the district appeared to be lawful,

petitioner appealed. The Court of Appeals,

Fourth Circuit, affirmed the dismissal, but

only on two of the reasons found by the dis-

trict court, viz; if the suit was on the Ger-

man judgment, it failed to state facts suf-

ficient to recover, because the judgment was

an "in rem" judgment, and reached the vessel

and not the general assets of the owner, or,

if the suit was on the original cause of ac-

tion, it was time-barred by Cogsa's Statute

of Limitation.

One week before this decision of the

Court of Appeals, the appeal court in Ger-

oni published its decision on January 9,

1975. It reduced the judgment against the

charterers to $33,000. with interest and

costs because of its view of Cogsa' per pack-

age limitation and it dismissed the suit

against the owner altogether by reason of the

application of Section 901 and 902 of the

German Commercial Code. As the dismissal of

=220

ee SO ee

a err

we en Btw he Eas. ee ee ee +

the German appeal court rendered the "in rem"

argument moot, and as the filing of the suits

in 1961 had tolled Cogsa's Statute of Limi-

tation, petitioner moved the Court of Appeals

to reargue, and, to remand the case to the

district court to consider whether the origi-

nal cause could be prosecuted, calling atten-

tion to the court's own treatment of the com-

plaint that it might be held to state the ori-

ginal cargo damage claim in which case, the

time-bar had been defeated. The Court of Ap-

peals withdrew its finding of a time-bar for

the original cause of action but continued the

dismissal because of its view that the judg-

ment was an "in rem" judgment, and it said

further, that petitioner had declared upon

the judgment and it was not entitled to have

its complaint considered as being on the ori-

ginal cause of action. This court denied cer-

tiorari. See 510 F.(2) 451, cert. denied, 96

S. Ct. 60, 423 U.S. 875, 46 L.ed(2) 53.

When the charterers failed to pay the

=23@

judgment as reduced and after this court

had denied certiorari, petitoner, on Febru-

ary 6, 1976, moved to restore the xxxx suit,

in the District Court of New Jersey, to the

docket for trial. At the same time, it asked

permission to name the owner in place and

stead of the vessel, as respondent. The ap-

plication was an ex-parte one. The court de-

murred for one reason or another. Requests

for briefs on specified points of law were

made of counsel through the judge's secret-

ary. A hearing was held. (See the corres-

pondence that followed upon these requests,

in the Appendix, an exhibit submitted in sup-

port of the application.) The court then re-

quested that all copies of the papers be

serv upon International Navigation Corpora-

tion) of Monrovia, at Baltimore, Maryland,

where it had its principal place of business.

Such service was effected. At a second hear-=

ing held, at which the owner appeared by coun-

sel, who submitted several reasons why the

o24e

- ee

Pre eae

motion should be denied and it was. The

reasons are important to notice as they were

arguments on the merits on behalf of the own-

er and charterers.

Consequently, arguments on the merits

effectively waived service of process but,

made the parties litigating the matter on

the merits, appear in the action. The argu-

ments advanced were that Cogsa's time-bar ap-

plied in favor of the shipowner which would de-

feat the relation back theory of Rule 15(c)

of the Federal Rules of Civil Procedure. In

behalf of the charterers, counsel argued that

res judicata, by reason of the German court's

grant of a recovery to petitioner, would bar

this action. This latter argument could

refer only to the claim of the charterers, the

only one against whom the judgment had been

rendered. Also, the transcript of the hearing

states the appearance of counsel which clearly

states that Lum, Biunno and Tomkins appeared

for the defendants, without limitation and in

a%8e

(eed

the plural; see page 49 of the Appendix.

Furthermore, after the denial of the

motion, the same counsel submitted a pro-

posed order for signature, providing for the

denial of the motion to be "with prejudice"

and to include the charterers specifically,

within the ambit of the parties favored; see

pages 89-90. These are two letters explain-

ing this issue. A copy of the proposed order,

unsigned, is on file and it is available to

this court, see Davis v. Davis, 305 U.S. 32.

It is respectfully submitted that the

arguments on the merits of the issue of res-

toration by defendant's counsel should have

been recognized as a voluntary appearance

and the case should have been allowed to pro-

ceed to trial.

REASONS WHY A WRIT OF CERTIORARI SHOULD

ISSUE IN THIS CASE

Under the facts of this case as set

forth above, Admiralty would not have had

=26<

UE ee ee ee ey Cre eee et

any difficulty with ordering a trial and

an amendment to the libel to name the own-

er as a respondent even as late as Febru-

ary, 1976. The liberality of treating

with the issues, amending pleadings and

allowing the parties to plead as necessary,

is well illustrated by Benedict J., in Copp

v. DeCastro & Donner Sugar Refining Co., 8

Ben. 321, Case No. 3215, where finding that

all parties were before the court, each ur-

ging arguments in its own interest, Judge

Benedict found no difficulty in turning the

proceeding from an in personam proceeding

to one in rem. He insisted that Admiralty

had the power and duty to reach the merits

of the matter before the Court. Without

further pleadings it awarded its judgment

on the merits.

The history of a cargo owner's right

to proceed in rem or in personam or both

to recover for cargo damage is related in

a27=

The Rebecca, 1 Ware 187, Fed. Case #11,

619. That case says that the liability

of ship and her owner are one. The dif-

ference in proceeding in rem or in perso-

nam is one of pursuing a remedy, the one

which may be more readily available than

the other. In the early admiralty cases,

there are many illustrations of an Admir-

alty court pursuing one remedy or another

despite the form of the proceeding, when

it had personal jurisdiction. See The

Monte A., 12 F. 331; The Phebe, 1 Ware 263;

The Adeline, 9 Cranch 244, 3 L.ed. 719;

The Commander-in-Chief, 1 Wall 43, 17 L.ed.

609; The Gazelle, 128 U.S. 474, 487; City

of Norwich, 118 U.S. 468; Stevens v. The

Sandwich, Fed. Cas. #13409; The Freeman v.

Buckingham, 18 How. (55 U.S.) 182; The

Marianne Flora, ll Wheat. 1, 6 L.ed. 405

and Du Pont v. Vance, 19 How. 162.

The district court ignored the duty

of our Admiralty courts to reach the mer-

=20-

its but proceeded to find reasons unsup-

ported by the facts and the law to deny

the motion under Rule 15(c) of the Federal

Rules of Civil Practice which prohibits an

amendment of the libel (complaint) from

one party to another, where the Statute of

Limitation has run in favor of the party

sought to be brought in. Having found

that the owner and its ship were different

parties and the amendment sought to bring in

a new party, the court went on to find

that the Cogsa's limitation had barred

this suit against the owner, International

Navigation Corporation of Monrovia. Yet,

the Statute had been tolled and consequent-

ly Rule 15(c) was misapplied. Nevertheless

the result was that the court had refused

to hold a trial of petitioner's cause in

Admiralty on the merits, despite assurances

that jurisdiction could now be had over all

parties. See Rules 19(a) and (b) and 20 PRCP.

Petitioner's case is meritorious for

=29=

the good order and condition of its steel

upon delivery to the vessel is admitted by

the bill of lading. At discharge while

still in the hold of the ship, the steel

was observed by witnesses to be a dishe-

velled heap of coils which had broken

from their stow and were lying about loose,

leaning against one another or on top of one

another, with straps broken, and the steel

sheets extending from the eye of the coil

in telescoped fashion, exposing the edges

to breakage, bending and actual tearing.

The discharging operation further damaged

the coils because the discharge was with

chain slings put through the eye of the

coil, further cutting the edges, instead of

a straight hook being put through the eye

and lifting the coil on its end out of the

ship onto the waiting lighter. The coils

lost their use for automobile bodies be-

cause to recondition them meant to shear

~30<

the cuts and tears in the edges to its

deepest penetration into the whole coil,

making their width too narrow for auto

bodies. There has never been a defense

on the merits suggested by the defendants

to this claim in all of these years of

litigation. Hence, libellant would reco-

ver if a trial of its case were held; see

Schnell v. The Vallescura, 293 U.S. 296,

303, 55 S.Ct. 194, 79 L.ed. 373; Edmond

Weill, Inc. v. American West African Line,

Inc., 2 Cir., 1945, 147 FP.(2) 363, 366;

Miami Structural Steel Corp. v. Cie Nation-

ale Belge de T.M., 224 F.(2) 566, 568 and

Asbestos Corp. v. Compagnie de Navigation,

etc. 345 F. Supp. 814, 820. Ignoring the

equities of this case and even the admonition

by this court, that the Federal Rules of

Civil Procedure must be determined to aid

the courts in reaching the merits, the truth

of controversy, see Conley v. Gibson, 355

U.S. 41, 48; and Foman v. Davis, 371 U.S.

178, court below violated petioner's right

a3} =

eh hn eee Beep ee ae ee eee oe

| | | =32-

to proceed in our Admiralty courts to remedy

a wrong. The district court talked about

these principles but did not follow them.

Plainly, it entertained and adopted a strained

interpretation of the law to say that Cogsa's

Statute of Limitation recognized the differ-

ence in the liability of the vessel from

the liability of her owner for the same

cargo damage, despite petitioner's effort

at setting the law before the court. Judge

Bradly in the City of Norwich, 118 U.S. 468,

said in talking about the alleged separate

liability of the ship and of the owner for

the same wrong, that it would be like talking

in riddles. Judge Learned Hand said suc-

cinctly about such alleged difference that

the personification of the vessel is an ana-

chronism, and had no meaning in substance, see

{

The Carlotta, 48 F.(2) 110, 112. Nor does

Cogsa support the district court. The Statute

of Limitation of Cogsa is Section 1303(6) and

reads:

"In any event the carrier and the ship

PETRI

shall be discharged from all liability

of loss or damage unless suit is brought

within one year after delivery of the

goods or the date when the goods should

have been delivered. * * * , "

The date of final delivery was February 16,

1960. Suit was brought February 1l, 1961.

An extension of time to May 15, 1961, to sue

that had been applied for in January, was

granted after this first suit. A second suit

was filed in the District Court of New Jersey

on May 12, 1961 and a third suit was commenced

in Hamburg, Germany on May 13, 1961. The dis-

trict court perceived a difference between

filing a suit in Admiralty against the vessel

and not having included her owner as respon-

dent and found that the Statute had run against

the owner. But the court had earlier in its

decision recognized that a suit had been star-

ted against the owner in personam on May 13,

1961. It did not object to this suit as not

a33—

being able to toll the Statute perhaps be-

cause it was brought in Germany and not in

the United States' Courts, or that the start

of it on May 13, 1961 was out-of-time despite

the grant of the extension of time to May 15.

1961. It just plainly said that Cocsa's bar

had taken effect in favor of the owner. Had

the court forgotten about the suit of May 13,

1961? Apparently! Ignoring the conceded fact

that the German suit was timely started ac-

cording to our rules, was an error of ies:

but petitioner lost its trial on the merits.

Such an extension was a lawful grant of

time to commence the suit; see Royston Dis-

tributors v. Manchester Lines, 1963 A.M.C.

761 (not officially reported.); United Fruit

v. Folger, 1959 A.M.C. 2224, 270 F.(2) 572; and

Benz Kid Co. v. Kawasaki, 1954 A.M.C. 130

(not officially reported). As the extension

of time was asked for Ahe undersigned counsel,

of the New York agent of the carriers, New

York law would apply. A New York case,

a34=

Tashjian v. Chorigian, (A.T. lst) 183 Misc.

204, states that a written extension of

time to such is binding. Bringing "a suit",

according to the language of Cogsa, would

prevent the vesting of the time-bar provision

from accruing. The defeat of the time-bar pro-

vision by the bringing of a suit, the Statute

said, will affect "The carrier and ship". By

force of the Statute "the carrier and the ship”

shall be discharged from all liability unless

suit is brought. If suit is not brought, it is

plain that then the discharge from liability

will vest. Diligent search has found several

cases deciding that the start of the suit de-

feats a claim to a time-bar, but no decision by

this court. There have been Internatio-Rotter-

dam Inc. v. Tomson, 4 Cir. 218 F.(2) 514; Unrra

v. Mormacmail, 99 F. Supp. 552, and Ore S/S Co.

v. Hassel, 2nd Cir., 137 F.(2) 326, 329. Per=

haps if this court had examined the Statute

and ruled on it, the district court might not

have ignored as it did the decisions of other

circuits. At least, there is a clear conflict

o35=

between the Third Circuit on the one hand

and the Second and Fourth Circuits on the

other. Furthermore the Court of Appeals,

Fourth Circuit, in M. W. Zack Metal Co. v.

International Navigation Corp. of Monrovia,

510 F.(2) 451; (a case on the same facts of

this case) found that the bar of Cogsa was

tolled by the earlier filing of suits here-

in above mentioned. Stare decises should

have applied to the consideration of the

same point in this case, but it wasn't.

The reported opinion of the Fourth Circuit,

above, does not tell the whole story, be-

cause that is its decision on reargument.

Its first decision had held a time-bar but

upon reargument, the court withdrew the al-

leged time-bar as a reason for dimissal of

that suit. Attached as Appendix D is a

true copy of said decision. The point

is a material point involving the exercise

of the Admiralty court's jurisdiction in a

manner that has been traditional with them.

-36-

Its duty to do equity has been its strength

which was made necessary by its dealing with

ships and other immutable facts indigenous

to a ship leaving port after discharging her

cargo may escape liability by never returning

to the jurisdiction of our courts. This is a

reason for applying the liberality of general

Maritime law. Another is that the charter-

ers were residents of Germany and in 1961,

they could not lawfully be served with pro-

cess. Petitioner was required to file suit

to avoid Cogsa's Limitation Statute, never-

theless. Judge Benedict's feeling in the

Copp case, which had gotten quite compli-

cated by the number of parties in inter-

est, was that delays in the trial of an Ad-

miralty matter was an expected event and

where all was ready for trial, the trial

should be had, regardless of procedural re-

finements. Equity practices have not been

denied to Admiralty by the 1966 unification

of actions under the Civil Rules. There is

o37=

rer -

no statements by this court stripping Ad-

miralty of its powers in equity and dealing

with litigants as it would under earlier Ad-

miralty practices. Admiralty must still

deal with maritime affairs that involve

ships, distances and the resort to foreign

tribunals whenever a maritime claim is sought

to be enforced.

Benedict on Admiralty, calls attention

to the facts of maritime matters which have

shaped the duty of Admiralty at chapter 466

which states: "* * * , Such limitations have

usually been subject to exceptions which

have their foundation in the inconvenience

or the impracticality of sooner enforcing

the demand as in the case of persons beyond

the sea. The prevalance of such exceptional

Situations in Maritime litigations justifies

the more flexible maritime doctrine of equi-

table laches."

Yet, the court went on its inexorable

way Of avoiding reading the rules in a way

-38-

to favor the disposition of this Maritime

case upon the merits. It not only found a

time-bar under Cogsa when it had been defea-

ted by the action of the start of suit, but

it went on to perceive a difference in the

personality between ship and owner, which

many other courts have disowned; see Conti-

nental Grain Co, v. Barge F.B.L. 565, 344

U.S. 19; and its progeny such as Construc-

tion Aggregates Corp. v. SS Azalea City,

(DC.N.J.), 399 F. Supp. 662; Norfolk Ship

& Dry Dock Corp. v. M/Y LaBelle Simone,

375 F. Supp 985 and Hamilton v. Canal Barge

Company Inc., 395 F. Supp. 978. All held

that liability of vessel and owner were the

same. This is not to say that the available

remedies to the holder of a maritime lien

are the same. There is a distinction between

a liability and remedies which was not made

by the district court and that lack, should

have been noted by the Court of Appeals.

-39-

a wee

The district court went further. It

interpreted the limitations of Rule 15(c) on

amendments to a complaint in claiming to

change the name of defendant as though those

limitations were to be favored. To conclude

that those limitations prevented a grant of

permission to change the owner for the ship

as a party defendant, the court restated the

issues before it at page 4 of its decision

recognizing that the rule of laches had been

urged upon it and that a liberal construction

of the rules to the end that the merits should

be reached was also urged upon it, but these

urgings were without more disregarded. The

rights of litigants to be relieved of the

effects of an order or judgment, when it is

no longer equitable to enforce its effect as

is granted in Rule 60(b) 5 and 6, was recog-

nized but not decided by the court. This was

an abuse of discretion; see System Federation

No. 91 v. Wright, 364 U.S. 642. At page 4 of

its decision, the court said of petitioner's

claim: "Plaintiff's exclusive purpose in

bringing this motion is to receive an adju-

cation on its claim for damage with respect

to International." This is not so. The

motion was to restore the whole case to the

docket including the restoration as to the

charterers. The charterers could now be

brought in by service of its process upon

the agent of its insurer who is located in

New York City. This convenience was not in

existence in 1961 but it is now. Further,

the charterers appeared generally when coun-

sel argued against the motion to restore as here

inabove explained. This misinterpretation

of petitioner's request for relief was error.

Then the court continues: "If Zack is

precluded from substituting International for

the SS Severn River, (destroyed in 1969), res-

toration becomes meaningless." Accordingly,

the court proceeds to hold that the substi-

tution was impossible and so it erred not only

in the method it followed to come to that con-

a ON

ee ee tae we

clusion, but also in cutting out of its fur-

ther consideration petitioner's request to

restore the case as against the charterers

as well as the shipowner. The charterers

have not paid the judgment and petitioner

is not precluded from prosecuting this

Suit against it; see Goodrich on Conflict of

which

Laws, 3rd edition,/says at chapter 15, at

the bottom of p. 631:

"It is not the judgment, but the satis-

faction of it that renders it a bar to

a recovery in a domestic suit upon the

Original cause of action."

See also Ehrenzweig, Conflict of Laws, Part

One, pp. 213-214 and cases cited in Note 7.

See also Eastern Township Bank v. Beebe, 53

VT. 177 and Hilton v. Guyot, 159 U.S. 113,

16 S.Ct. 139, 40 L.ed. 95.

in Germany

As the dismissal/as to International,

was based on an interpretation of a local

Statute of Limitations, such a dismissal can-

not bar this prosecution of the suit, see

Restatement of the Law, 2nd ed., Conflict of

o420

Laws, Section 110 and Warner v. Buffalo Dry

Dock, 267 F.(2) 540; and Bournais v. Atlan-

tic Maritime Co., 220 F.(2) 152.

Besides, the reduced jdugment resulted

from a misconstruction of the per package limi-

tation of Cogsa by the German appeal court.

The $33,000 allowed would cover 66 coils

whereas there were 93 coils in the shipment.

The limitation is applied to the whole ship-

ment of 93 coils and not to 66 coils which

the court felt were damaged. There are no

facts that could support that only 66 coils

were damaged. Plaintiff's proof was that

all coils suffered some damage, anyway. Be-

sides, the steel travelled as bulk cargo and

freight was paid upon the gross weight of

the cargo. If the freight unit limitations

were applied, then the limitation would be

meaningless because it would be greater than

the actual damages of just short of $80,000.

The refusal of the district court to recog-

nize the right of the petitioner to proceed

Denying to Admiralty its powers to do jus-

in the Admiralty court because of its equit-

tice according to the facts of the case is

able jurisdiction was restrictive, not libe-

1 to deny due process to a litigant in Admir-

ral.

; alty.

The district court progressed to a

There being no Statutory bar effec-

holding that the limitation of Rule 15(c)

tive, and this being a purely maritime cause

dictated a denial that the filing of the

of action, the rule of laches applied in re-

libels in the Admiralty courts of New York

: spect of the restoration. Benedict on Ad-

and New Jersey defeated the right of a time-

miralty, Section 462 states:

bar upon a distinction that did not exist.

, "Unless an Act of Congress speci-

It interpreted the holdings in the Inter-

fies a fixed time for commencement

natio-Rotterdam Inc., UNRRA v. Mormacmail

of an action * * * or taking other

and Ore S/S Co., cases, supra, without any

steps in an Admiralty suit, all

support in Cogsa's wording for the distinc-

matters of delay are left to the

tions which it said applied. In fact, it

discretion of the district court

ignored the plain consequences that would

sitting in Admiralty * * * . But

follow upon the words "unless suit is brought

in general, the district court sit-

etc., ". It overlooked the legal effect on

ting in Admiralty judges each case

the defeat of Cogsa's time-bar by the filing

whether in view of the circumstances

of a suit against the owner in Germany. It

the demand is so stale as to be

went on to refine the wording of Rule 15(c)

deemed neglected or abandoned, in

not equitably, in favor of justice, to get

accordance with the equitable doc-

to a trial on the merits of the dispute, but

to defeat the valid action without a trial.

-45-

-44-

laa a aaa a iia: are ia aaa 1

Hoegh Silvercloud, 351 U.S, 525; The Key

City, 14 Wall. 653; So. Pacific Co, v. Bogart,

a i a a

trine of Laches,."

Section 122, Corpus Juris Secundum, Ad-

250 U.S. 483. In United States v. Western,

miralty, states of ‘the elements of Laches:

352 U.S. 52, this court said that lapse of

"Important constituent elements of

time is not a criteria, "If this litigation is

Laches in Admiralty are unreason-

not stale, then no issue in it can be said to

able, delay by one party in asser-

be stale."

tion of his remedy and prejudice to

However looked at, the courts below erred

another as a result of the delay."

so effectively that petitioner lost its case

Delay alone is not sufficient to support a

without a chance of being heard on the merits,

claim of Laches, sayS Corpus Juris Secondum

by a misapplication of the rules to deny the

at Section 123. See Hill v. Brune, 498 F. (2)

equitable practices of our Admiralty courts.

565, 568 and Lovrich v. Warner Co., 118 F. (2)

The particular point of Cogsa's time-bar is

690. At Section 124, Corpus Juris Secundum

important, for its own sake, and to attain uni-

states that prejudice to the other side must

formity between the decision below and those

) be shown by reason of the delay. Here, no

. of the Second and Fourth Circuits. The deci-

\ lack of diligence in the prosecution of its

sion is not in the interest of justice. In

case and no prejudice to its defense are

fact, justice would demand its correction. It

claimed by defendants. 2 Am. Jur., 2nd ed.,

would therefor be appropriate for this court

Admirlty, Section 190 restates this rule for

to exercise its power of review sitting in

the application of laches in Admiralty.

Admiralty, to correct this ambiguous decision.

The rule of laches in Admiralty was rec-

The fact that petitioner has been deprived of

ognized by this court, see Czaplicki v. The

a46=

PT oe ence

of due process as is available normally to

litigants in our Admiralty court also ought

to lend its weight in favor of a review by

this court. The attack upon our Admiralty

court's power to exercise its traditional

equitable powers by this decision of the

courts below, requires upholding the juris-

diction of Admiralty, as has been held by

this court; see Swift Company Packers et al,

v. Compania Columbiana Del Carribe S.A.,

et al, 339 U.S. 684.

WHEREFORE this honorable court is re-

spectfully urged to grant its writ to the

court of Appeals, Third Circuit, to review

the judgment and decision below.

Respectfull ZZ.

Liaden/s Co

ANTHONY B. CATALDO

Attorney for Petitioner

-48-

APPENDIX A

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

No. 77-2207

M. W. ZACK METAL COMPANY, Appellant

V e

THE SS SEVERN RIVER, JANSEN & CO., CON-

TAM LINIE and HANS H. JANSEN

(D. C. CIVIL NO. 386-61, D. of N. J.)

Submitted Under Third Circuit Rule 12(6)

May 1, 1978

Before SEITZ, Chief Judge, VAN DUSEN and

ROSENN, Circuit Judges.

JUDGMENT ORDER

After consideration of all contentions raised

by appellant, it is

ADJUDGED AND ORDERED that the judgment of the

district court be and is hereby affirmed.

Costs taxed against appellant.

By the Court,

Seitz

Chief Judge

Attest:

DATED: May 2, 1978 Thomas F. Quinn, Clerk

APPENDIX B

DECISION OF OCTOBER 19, 1976, DENYING MOTION

NOT FOR PUBLICATION

UNITED STATES DISTRICT COURT

DISTRICT OF NEW JERSEY

M.W. ZACK METAL COMPANY, )

Libellant, )

Civil Action No. 386-61

v. )

OPINION

THE SS SEVERN RIVER, JANSEN & CO., )

CONTAM LINIE and HANS H. JANSEN,

Respondents.

Appearances:

Mr. Charles P. Saling

Attorney for libellant

By: Mr. Anthony B. Cataldo (New York bar)

Messrs. Lum, Biunno & Tompkins

Attorneys for respondents

By: Mr. David A. Birch

COOLAHAN, Senior Judge

This matter comes before the Court on a motion by plain-

tiff, M.W. Zack Metal Company, to vacate an order of dismissal

entered in the instant admiralty ion and to permit an amend-

ies of its complaint substituting” a party against whom the

claim is asserted.

In 1960 International Navigation Corporation chartered

its vessel SS Severn River to Contam Linie (the charterer), a

4 Pursuant to Fed. R. Civ. P. 60(b) (5).

. Plaintiff seeks to substitute the owner Of a vesse] as a named

defendant in place of the vessel itself.

3 pursuant to Ped. R. Civ. P. 15(a), 1S(c).

=S0<

APPENDIX B

DECISION OF OCTOBER 19, 1976, DENYING MOTION

German partnership (including Jansen & Co. and Hans H. Junsen),

for a voyage from Antwerp, Belgium, to the Port of New York. The

charterer solicited cargo to be transported on board the Severn

River, and Zack shipped with the charterer 93 coils of hot rolled

steel for which a clean bill of lading was issued but which were

found to be damaged when they were discharged in Jersey City in

February, 1960.

A libel was filed in this court’ On May 12, 1961,” by

Zack against the SS Severn River, Contam Linie, Jansen & Co., and

. Pursuant to 46 U.S.C. § 740, which provides the federal courts

with admiralty and maritime jurisdiction, and 46 U.S.C. §§ 1300,

et seg., pertaining to bills of lading in conjunction with the

carriage of goods by sea in foreign trade, to or from ports of

the United States.

. The Court notes at this time the history of litigation concerning

these parties in various courts of law. Zack Metal Company insti-

tuted a suit alleging the same cause Of action as herein in the

Southern District Of New York on February 11, 1961, which was sub-

sequently dismissed for lack of prosecution. In May, 1961, it

instituted a suit in a court in Hamburg, Germany, where the char-

terer resided, against the charterer, the individual partners of

the charterer, and International Navigation Corporation. In 1966

that court found the charterer and its partners liable for the

Gamaye to Zack's steel, but Zack's claim against Internationa:

was postponed for later decision. In 1971 the German court rendered

a decision against International. All parties, including Zack, ap-

pealed to a higher German court. [In 1972, while the appeal was

pending, Zack commenced suit in the Eastern District of Virginia

and caused an attachment to issue against another vessel owned by

International. The District Court dismissed the action and the

Court Of Appeals for the Pourth Circuit affirmed. .W .

o. Vv. natio vi on Co - $10 P.2d 451 (4th Cir. 1975).

The court held that the trial court judgment in Germany was an in

rem judgment against the SS Severn River which furnished no basis

for che assertion of in personam liability on the owner, or the

attachment of another vessel owned by Internacional.

Also in 1975, the Hanseatic Provincial Court of Appeals

in Germany dismissed the action with respect to International and

affirmed the judgments against the other defendants, but in re-

duced amounts. Plaintiff petitioned the Supreme Court for review

of che Fourth Circuit holding on the ground that the Circuit Court

had lost jucisdiction to interpret the 1971 German judgment when

the German Appeals Court reversed and dismissed the action with

respect to International. Certiorari was, however, denied.

422 u.S. 1010 (1975).

-5l-

APPENDIX B

OPINION OF OCTOBER 19, 1976

Hans H. Jansen for the damaged cargo. The action was dismissed

administratively on March 6, 1904, for lack Of prosecution, pur-

Suant to General Rule 12, the predecessor to Gencral Rule 30. Upon

Zack's application, an order was entered on March 12, 1965, re-

storing the case to the court's docket for the purpose of arresting

the SS Severn River. A monition was issued on that date, but was

returned unserved. A second order dismissing the suit adminis-

tratively for lack of prosecution pursuant to General Rule 12 was

then entered on March 24, 1965, without prejudice to the right of

plaintiff to reopen the proceedings for good cause shown. Plain-

tiff seeks to vacate the March 24, 1965, order of dismissal and

to amend its complaint.

Fed. R. Civ. P. 60(b) (5) provides:

“On motion and upon such terms as are just,

the court may relieve a party or his legal representa-

tive from a final judgment, order, or proceeding for

the following reasons: ... (5) ... it is no longer

equitable that the judgment should have prospective

application."

Relief under Rule 60(b) is a matter addressed to the discretion

of the court. erockio v. n _¢O., 56 F.R.D. 82

(W.D. Pa. 1972), affirmed without opinion, 474 F.2d 1340 (34

Cir. 1973); Ww va . .» 262 F.2d 392 (34

Cir. 1960); Delzona Corp. v. Sacks, 265 F.2d 157 (3d Cir. 1959);

(el) v a . , 189 F.2d 242 (3d Cir.

1951). Plaintiff requests the Court to exercise its discretion

and restore this case to the docket so that it might have an

adjudication On the merits of its claim for damage with respect

to International Navigation Corporation. Plaintiff suggests that

laches is the Only element appropriate for consideration when

examining the issue whether the case should be restored, and that

since it has been “diligently” prosecuting its claim in Germany,

APPENDIX B

QPINION OF OCTOBER 19, 1976

restoration should be permitted.

International argues against restoration on the basis

that the March 24, 1965, order of dismissal has no prospective

effect and therefore the discretionary celief afforded by

Rule 60(b)(5) is unavailable. [t further contends that restora-

tion of the instant proceeding would be an abuse of the Court's

discretion since plaintiff “now having lost, on appeal, its first

bite of the apple, ... seeks, by reopening this suit, to take a

second bite."°

It is unnecessary for the Court to reach the merits of

the conflicting positions as to whether it should in the exercise

of its discretion vacate its previous order. Plaintiff's exclu-

sive purpose in bringing this motion is to receive an adjudication

On its claim for damage with respect to International. If Zack is

precluded from substituting International for the SS Severn River

(destroyed in 1969), restoration becomes meaningless. A deter-

mination whether the complaint may properly be amended is thus

in a practical sense dispositive of the restoration issue.

. Plaintiff seeks leave of the Court to amend its libel

by substituting International Navigation Corporation of Monrovia,

Liberia, as Owner of the SS Severn River, in place of the SS Severn

River as a party defendant. The issue for the Court's determina-

tion is whether the complaint may now be amended so as to assert

the claim therein against the vessel's owner without violating the

tule expressed in Pal. R. Civ. BP. 15(c) uguinst adding new parties

Memorandum of law on behalf of International Navigation Corpora-

tion in opposition to plaintiff's motion to vacate dismissal and

amend complaint, p. 3.

-~53-

APPENDIX B

OPINION OF OCTOBER 19, 1976

to an action after the expiration of the statute of limitations.

The first paragraph of Rule 15(c) provides:

“Whenever the claim or defense asserted in

the amended pleading arose out of the conduct, trans-

action or occurrence set forth or attempted to be set

forth in the original pleading, the amendment relates

back to the date of the original pleading. An amend-

ment changing the party against whom a claim is asserted

relates back if the foregoing provision is satisfied

and, w ° Vv w fo

a ainst him, the party to be brought in by

amendment (1) has received such notice of the institu-

tion of the action that he will not be prejudiced in

maintaining a defense on the merits and (2) knew or

should have known that, but for a mistake concerning

the identity of the proper party, the action would huve

been brought against him.” (Emphasis added.)

This action is brought before the Court pursuant to the

Carriage of Goods by Sea Act, 46 U.S.C. §§ 1300, et seg., which

contains its own limitations period. 46 U.S.C. § 1303(6) states

in part:

“In any event, the carrier and the ship shall

be discharged from all liability in respect to loss or

damage unless suit is brought within one year after de-

livery of the goods or the date when goods should have

been delivered."

Thus, for purposes of examining whether the facts of the instant

suit are sufficient to bring this motion within the requirements

of Fed. R. Civ. P. 15(c), the Cogsa one-year limitation period

will be applied.

Suit herein was commenced in 196] against the SS Severn

River, and also against the charterers, Jansen and Co., Contam

Linie, and Hans H. Jansen. Plaintiff now seeks by way of enti

ment tO substitute an in personam claim against International

Navigation Corporation as owner of the SS Severn River for the

initial in rem claim against the vessel itself. Plaintiff con-

tends that it is entitled to such an amendment as a matter of

-54-

APPENDIX B

OPINION OF OCTOBER 19, 1976

cOurse. While the thrust of Rule 15 as a whole is to allow

the liberal use of amendments to impivment the imporcant federal

policy of encouraging litigation on the aerken,’ Rule 15(c) im-

poses the necessary restrictions in deference to the equally

important premises of the statute of Limitations,” with which

relation back is in the terms of the Federal Rules Advisory Com-

mittee “intimately connected. "” Rule 15(c) determines whether

an amendment that changes parties after the expiration of the

statute of limitations relates back to the time of filing of the

Original complaint. “It should be read together with the general

provision in Rule 15(a) that leave to amend should be freely given

when justice so requires." Yorden v. Flaste, 374 F. Supp. 516,

$18-19 (D. Del. 1974).

Although courts do not agree on whether the terminology

“changing the party” found in Rule 15(c) encompasses the addition

Or substitution of pacties, this Court will assume that addition

Or substitution is possible and will proceed to test the plain-

tiff's proposed amendment against the explicit cequirements of

Rule 15(c). Those courts which prohibit joinder of new partins

(gee People of Living God v, Star Towing Co., 289 FP. Supp. 635

(B.D. La. 1968)) apply a restrictive construction to the Rule 15(c)

reference to an amendment changing a party. The Advisory Com-

mittee's Note, however, seems to reject this restrictive construction.

, Conley v. Gibson, 355 U.S. 41, 48 (1957).

§7 Minn. L. Rev. 83, 87 (1972).

® Fed. R. Civ. P. 15(c) Advisory Committee's Note.

@85-

APPENDIX B

OPINION OF OCTOBER 19, 1976

The stated purpose of Rule 15(c) is to clarify when an amendment

of @ pleading changing the party against whom a claim is asserted

(including an amendment to correct a misnomer or misdescription

of a defendant) shall relate back to the date of the original

Pleading. Fed. R. Civ. P. 15(c) Advisory Committee's Note,

39 F.R.D. at 62. Proper interpretation of the phrase “changing

the party” should therefore include the addition and substitution

of a party as well as misnomer situations.

Rule 15(c) provides three conditions which must be satis-

fied in order for an amendment changing a party to relate back:

(1) the claim asserted in the amended pleading must arise out of

the conduct, transaction or occurrence set forth or attempted to

be set forth in the original pleading; (2) the party to be brought

in by amendment must have, within the period provided by law for

commencing the action against him, received such notice of the

institution of the action that he will not be prejudiced in main-

taining his defense on the merits; and (3) the party to be brought

in must or should, within the period of time provided by law for

commencing the action against him, have known that but for a mis-

take concerning the identity of the proper party the action would

have been brought against him.

Since plaintiff seeks only to substitute a defendant

against whom its claim is asserted, the first condition of

Rule 15(c) is clearly satisfied. The second condition, however,

does not seem to have been met. For plaintiff to satisfy that

condition, it must make a two-fold showing: (a) that International

— OR

APPENDIX B

OPINION OF OCTOBER 15, 1976

Navigation Corporation had notice of the institucion of this ection*

befoce the statute of Limitutions had run, and (b) that such notice

was sufficient to prevent International from being prejudiced in

maintaining its defense on the merits. Without reaching the

question of prejudice, there is nothing in che record to indicate

that International received even informal notice of the institu-

tion of this lawsuit prior to the attempted arrest of the SS

Severn River in March, 1965, several years after the Cogsa one~

year limitacion period had expired.

Regardless of whether plaintiff can sucmount the second

condition of Rule 15(c), the thicd requirement cannot be met. The

third condition of the cule necessitates a showing that the party

to be brought in by amendment must or should within the period of

time for commencing the action against it have known that but for

a mistake concerning the identity of the proper party, the action

would have been brought against it. There is not in this case,

nor could there be, any allegation that the Original naming of

the ship (SS Severn River) as a defendant was a mistake within

” Although the Advisocy Committee suggested that the purpose of

the 1966 amendment to Rule 15 was the clarification of those in-

stances in which relation back was appropriate, there still exist

certain uncertainties in Rule 15(c) as amended. The uncertainty

stems from the construction given to the language of the rule it-

self. (See discussion “changing the party.") Possible conflict

exists with respect to how the phrase “notice of the institution

of the action” should be construed. Two Courts of Appeals have

expeessly held that this Languaye means notice of a lawsuit and

not merely notice of the incident which led to the suit. Ceaig

v. United States, 413 F.2d 854 (9th Cir.), cert. den., 396 U.S.

987 (1969); Archuleta v. Duffy's, Inc., 471 F.2d 33 (10th Cir.

1973). Within the Third Circuit, two District Courts have af-

firmed the position adopted in Craig.

Slack v. Treadway Inn of

Lake Harmony, Inc., 388 F. Supp. 15 (M.D. Pa. 1974); Prancis v.

ny , 392 F. Supp. 1252 (D. Del. 1975).

This Court also adopts the position announced in Craig. The

notice requicement applicable to plaintiff's mocion is thus notice

of the commencement of the instant suit.

=8Ja

APPENDIX B

OPINION OF OCTOBER 19, 1976

Rule 15(c) (2). .

Admiralty has long recognized the “personality” of the

ship as distinct from the owner, and has traditionally distinguished

between actions in rem brought against @ vessel itself, and pro-

ceedings in personam directed against a vessel's owner or charterer.

The Supreme Court alluded to the difference between the two causes

of action when it commented that it is “a long standing admiralty

fiction that a vessel may be assumed to be a person for the pur-

pose of filing a lawsuit and enforcing a judgment.” Continental

Grain v. Barge PBL-585, 364 U.S. 19, 22 (1960). This Court refuses

to accept plaintiff's contention that there exists no difference

between an in rem and an in personam cause of action. One not

Only may, but musc, distinguish between in rem and in personam

actions. Gilmore & Black, The Law of Admiralty 2d (1975) §§ 1-12,

p. 37. Our own Circuit Court of Appeals has indicated that the

distinction between in rem and in personam proceedings is “funda-

mental.” The Chickie, 141 F.2d 80, 86 (3d Cir. 1944). The court

noted that an action in rem directs a plaintiff's claim to a thing,

the vessel itself. A successful judgment in an in rem action was

said to affect persons, but only with respect to “their interest

in the thing which is personified as a defendant in the litiga-

tion.” Id.

An action in rem may be initiated concurrently with

Or as an alternative to a proceeding in personam. If as in

Continental Grain, supca, an admiralty libel has been brought

against a vessel in rem and an in personam libel has been insti-

tuted against the vessel owner, the practical effect is the

bringing of a single civil action with two inseparable parts

against the vessel owner. Construction Aggregates Corp. v.

o 88+

it *

APPENDIX B

OPINION OF OCTOBER 19, 1976

§.$. Azalea City, 399 F. Supp. 662 (D. N.J. 1975).

Hece, however, plaintiff inicially instituted suit in

rem against the SS Severn River and now, 15 years later, seeks

to bring that claim against International Navigation Corporation

in personam. Although it is true, as plaintiff urges, that the

courts have consistently held that instituting or filing suit

constitutes the bringing of suit within one your as required

by the Carriage of Goods by Sea Act, 46 U.S.C. § 1303(6),

irrespective of the time when process is issued, United Nations

Relief and R. Adm. v. The Mormacmail, 99 F. Supp. 552, 554

($.0. N.¥. 1951); Qre Steamship Corp. v. D/S/A/S Hassel,

137 F.2d 326, 329 (24 Cir. 1943); Internatio-Kotterdam, Inc.

v. Thomsen, 218 F.2d 514, 516 (4th Cir. 1954), the cases so

stating involve factual circumstances easily distinguished from

those in the instant action. The Fourth Circuit Court of Appeals

stated in Intecnatio-Rotterdam, supra, that the filing of suit in

admiralty begins the litigation as far as the statute of limita-

tions is concerned. Suit therein was commenced by the filing of

a libel in rem and a libel in personam. Internatio-Rotterdam, Inc.

v. The Karachi, 122 F. Supp. 37 (D. Md. 1954). The Circuit Court

made no determination whether commencement of a suit in rem is

the equivalent of commencement of suit within the meaning of

Cogsa with respect to a later amendment changing the action into

@ proceeding in pecsonam. The Carciage Of Goods by Sea Act has

not eroded the long-standing admiralty tradition of distinguishing

between an action in personam and one in rem. This Court finds,

therefore, that based upon the factual circumstances presented,

the commencement of suit against a vessel in rem is not the com-

mencement of suit within the Cogsa statute of limitations with

-58A-

APPENDIX B

OPINION OF OCTOBER 19, 1976

respect to a later proposed amendment which aims to assert the

same claim against the vessel's owner.

Plaintiff's claim against International Navigation

Corporation as owner Of the vessel is barred by the Cogsa one-

year stacute Of limitation unless the proposed amendment is found

to relate back to the date of filing of the Original complainc.

The facts of the instant suit indicate that the relief afforded

by Fed. R. Civ. P. 15(c) is not available to plaintiff Zack Metal

Co. Plaintiff has failed to satisfy the second and third require-

monty Of Rule 15(c), and the mocion to amend the complaint is

therefore denied.

As previously indicated, resolution of the issue of an

amendment to plaintiff's complaint is dispositive of the question

of restoration. Plaintiff's motion for an order vacating the

Court's March 24, 1965, ordec of dismissal is therefore denied.

Counsel shall submit an order in conformity with this opinion.

-59-

APPENDIX C

DECISIONS OF JULY 14, 1977, DENYING

RELIEF ON RE-ARGUMENT

UNITED STATES DISTRICT COURT

DISTRICT OF NEW JERSEY

M.W. ZACK METAL COMPANY, )

Libellant, )

Vv. ) Civil Action No.

386-61

THE SS SEVERN RIVER, et al., )

ORDER

Respondents, )

Plaintiff has moved for reargument under

Rule 12(I) of the Court's denial of plaintiff's

motion to vacate the dismissal of the within

action and to amend the complaint. After a

complete review of the record,

It is, on this 14th day of July, 1977,

ORDERED that the Court's opinion of October 19,

1976, is affirmed and plaintiff's application

for relief is denied.

JAMES A. COOLAHAN

U.S. Senior District Judge

-60-

APPENDIX D

DECISION AND ORDER OF

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

DATED JANUARY 16, 1975

(SAME TITLE)

Appeal from the United States District

Court for the Easter District of Vir-

ginia, at Norfolk. Richard B. Kellan,

Rudge.

Argued December 5, 1974 Decided January 16,

1975.

Before HAYNSWORTH, Chief Judge, BUTZNER, Cir-

cuit Judge, and THOMSEN, Senior District Judge.

ANTHONY B. CATALDO (Jett, Berkley, Furr and

Heilig on brief) for Appellant; John W. Win-

ston (Seawell, McCoy, Winston and Dalton on

brief) for Appellee.

THOMSON, Senior District Judge

M.W. Zack Metal Company (Zack) appeals

from an order of the district court dismis-

sing an action filed therein by Zack against

International Navigation Corporation, a Libe-

rian corporation (International). Zack had

designated its action as an admiralty and

maritime claim within the meaning of Rule

9(h), F.R. Civ. P., and caused the vessel

APPENDIX D

Virtus, owned by International, to be at-

tached.

International chartered its vessel Se-

vern River to Contam Linie Hansen (the Char-

terer), a German partnership, for a voyage

in 1960 from Antwerp, Belgium, to New York.

The charterer solicited cargo to be trans-

ported on board the Severn River and issued

its bills of lading for such cargo signed by

the vessel's master. Zack shipped with the

charteter 93 coils of hot-rolled steel, for

which a clean bill of lading was issued, but

which were found to be damaged when they

were discharged in New York,

In 1961 Zack instituted a suit in a court

in Hamburg, Germany where the charterer re-

sided, against the charterer, the individual

partners of the charterer, and International.

In 1966 that court found the charterer and its

partners liable for the damage to Zack's steel

and entered a money judgment for the full

amount of the damage in favor of Zack against

APPENDIX D

the charterer and its partners. Zack's claim

against International was postponed for later

decision,

In 1971 the German court rendered a further

decision holding according to the agreed trans-

lation, that "personal liability of the ship's

owner does not exist", but that the "claims

because of cargo damages are secured through

a ship's creditor's right, even if--as in the

present case--the carrier is not at the same

time the ship's owner". The court entered a

jdugment that International "is convicted to

submit to execution being levied on the S.S,.

Severn River" of US $64,018.83, plus inter-

est and part of Zack's expenses. The affi-

davits of German lawyers submitted by Zack

and International respectively, as well as

the agreed translation of the judgment itself

show that the judgment was essentially a judg-

ment in rem against the Severn River. All of

the parties, including Zack, appealed to a

higher German court, which under German prac-

APPENDIX D

tice may take additional testimony and review

both the facts and the law.

In early 1972 Zack learned that another

vessel owned by International, the Virtus,

was to arrive at Norfolk. Although the appel-

late proceedings in Germany were and are still

pending, Zack commenced the present suit against

International in the Eastern District of Vir-

ginia, and cause an attachment to be issued

against the Virtus. International appeared

specially and moved to quash the attachment

and dismiss the suit. The Virtus was released

after International agreed to post security.

After two hearings, the district court dis-

missed the suit, with a full opinion.

Zack has declared on the German judgment

(indeed, it could not have declared on the

Original maritime claim for damaged cargo be-

cause of COGSA's statute of limitations.?

There is thus a substantial question whether

the initial maritime claim has been merged in

the German judgment and the present action is

1. 46 USC §1303(6) (1970).

=64-

APPENDIX D

a civil action on a debt, without the juris-

diction of Admiralty. We need not decide

the jurisdictional question, however, for

even if there were jurisdiction in Admiralty,

the German judgment) which furnishes no basis

for an in personam claim against the owner or

for the attachment of the Virtus.

The judgment of the trial court in Ham-

burg is under review on appeal. It may be

that the appellate court will impose some

other liability upon the owner, but it is

plain that the trial court limited the onwer's

liability to its interest in the Severn River.

Essentially and substantively, it is an in

rem judgment against the Severn River, impos-

ing no personam liability upon its owner.

(Since Zack may not now declare upon the ori-

ginal maritime claim and the only cause of

action it may presently assert is subject to

the substantive limitations of the unreviewed

judgment of the German trial court, there is),

2. Cf. Restatement Judgments §47: Restatement,

Second, Judgments Tentative Draft No. 1 March

28, 1973, §47. The restatement rule is based

upon cases influenced by the full faith and

credit clause of the Constitution, not applic-

able here. ee

APPENDIX D

and furnishing no basis for the assertion of

an in personam liability of the owner or the

attachment of any other vessel owned by Inter-

national. The attachment, of course, may not

be based upon the speculative possibility that

the reviewing court in Germany may give Zack

greater rights against the owner than the

trial court did.

The German judgment did not justify the

suit in the Eastern District of Virginia or

the attachment of the Virtus. The decision

of the district judge dismissing that suit

will be AFFIRMED,

=66<

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