# Petition — M. W. Zack Metal Co. v. Severn River > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385005_1451%3A1 ## Record - **Collection:** Supreme Court brief - **Document type:** Petition - **Published:** January 1, 1978 - **Citation:** 439 U.S. 894 ## Text al 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 Question Question Question 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 12 13 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 13 14 14 io 15 16 26 48 31 39 39 27 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 47 26 28 40 31 31 39 46 40 35,44 46 31 23,30 39 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 34 31 47 28 48 40 35 28 32 28 23 28 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. 52 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 47 28 28 28 28 34 47 35,44 43 32 25,44 29 29 46 45 38 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 aa petition of any party to any civil or crim- inal case, before or after fendition of the 4 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 * * * (c) Whenever the claim or defense asser- 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 a 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 ee 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 + i f | | | =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 by 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- i ~~ 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 a3 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 yo 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 4 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< --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385005_1451%3A1. Public record. Not legal advice.