# Appendix — M. W. Zack Metal Co. v. Severn River

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Appendix
- **Published:** January 1, 1978
- **Citation:** 439 U.S. 894

## Text

Supreme Court, U. S$,
FILED

SEP2 1978

, JR., CLERK

In the Supreme Court of the United States
October Term, 1978

vo. 8-174

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
‘HE THIRD CIRCUIT

APPENDICES B and E

ANTHONY B. CATALDO
Attorney for Petitioner
Office and P.O. Address
lll Broadway

New York, New York 10006
212-962-0965

TABLE OF CONTENTS

APPENDIX B, decision of the
District Court of the District
of New Jersey. Dated October 19,
1976.

(Replacing the decision at pages
50-60 of the Petition for Writ,)

APPENDIX E, decision of the Court
of Appeals, Fourth Circuit, in

M. W. Zack Metal Company against
International Navigantion Corpor-
ation of Monrovia, Reported at
510 F.(2) 451.

Page

50

67

APPENDIX B

DECISION OF OCTOBER 19, 1976, DENYING MOTION

Not for Publication

UNITED STATES DISTRICT COUR
DISTRICT OF NEW JERSEY

M. W. ZACK METAL COMPANY, )

Libellant, )

Vv.
THE SS SEVERN RIVER, JANSEN & CO.,)
CONTAM LINIE and HANS H. JANSEN, Civil Action
) No. 386-61
Respondents.
& ) OPINION

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 plaintiff, M.W. Zack Metal Company,
to vacate an order of dismissal entered in the
instant admiralty action* and to permit an

loursuant to Fed. R. Civ. P. 60(b) (5).

-50-

APPENDIX B

amendment of its complaint substituting a
party against whom the claim is asserted.= irs

In 1960 International Navigation corp-
Oration chartered its vessel SS Severn River ."
to Contam Linie (the charterer), a German
Partnership (including Jansen & Co. and Hans
H. Jansen), for a voyage from Antwerp, Bel-
gium, to the port of New York. The charterer
solicited cargo to be transported on Board the
Severn River, and Zack shipped with the Char-
terer 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 dis-
charged in Jersey City in February, 1960.4

A libel was filind in this court
on May 12, 1961,° by Zack against the SS Severn
River, Contam Linie, Jansen & Co., and Hans H.
Jansen for the damaged cargo. The action was

*plaintiff seeks to substitute the owner of a
vessel as a named defendant in place of the ves-
sel itself.

3pursuant to Fed. R. Civ. P. 15(a), 15(¢c).

* PURSUANT TO 46 U.S.C. § 740, which provides
the federal courts with admiralty and maritime
jurisdiction, and 46 U.S.C. §§ 1300, et seq.,
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 liti-
gation concerning these parties in various courts

of law. Zack Metal Company instituted a suit

alleging the same cause of action as herein in *
the Southern District of New York on February 1l,

1961, which was subsequently dismissed for lack

of prosecution. In May, 1961, it instituted a

-8le

APPENDIX B

DECISION OF OCTOBER 19, 1976, DENYING MOTION

5
a suit in a court in Hamburg, Germany, where

the charterer 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 damage to Zack's steel, but
Zack's claim against International was post-
poned for later decision. In 1971 the German
court rendered a decision against International.
All parties, including Zack, appealed to a high-
er German court. In 1972, while the appeal was
pending, Zack commenced suit in the Eastern Dis-
trict of Virginia and caused an attachment to
issue against another vessel owned by interna-
tional. The District Court dismissed the action
and the Court of Appeals for the Fourth Circuit
affirmed. M.W. Zack Metal Co. y. International
Navigation Corp., 510 F.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 the
assertion of in personam liability on the owner,
Or the attachment of another vessel Owned by
International

Also in 1975, the Hanseatic Proyincial
Court of Appeals in Germany dismissed the ac-
tion with respect to International and affirmed
the judgments against the other defendant, but
in reduced amounts. Plaintiff petitioned the
Supreme Court for review of the Fourth Circuit
holding on the ground that the Circuit Court
had lost jurisdiction 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).

-51A-

APPENDIX B

OPINION OF OCTOBER 19, 1976

dismissed administratively on March 6, 1964,
for lack of prosecuiton, pursuant to General
Rule 12, the predecessor to General Rule 30.
Upon Zack's application, an order was entered
on March 12, 1965, restoring 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 unseryed. A
second order dismissing the suit administra-
tively for lack of prosecution pursuant to
General Rule 12 was then entered on March 24,
1965, without prejudice to the right of plain-
tiff to reopen the proceedings for good cause
shown. Plaintiff seeks to vacate the March 24,
1965, order of dismissal and to amend its com-
plaint,

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 representative 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 60(b) is a matter addressed to
the discretion of the court. Torockio y.
Chamberlain Mfg. Co., 56 F.R.D, 82 (W.D. Pa.

, affirmed without opinion, 474 F.2d
1340 (3d Cir. I973); Wagner v. Pennsylvania
R.R. Co., 282 P,2d 157 en Cir, 1353}5 Toozer
v. Charles A, Krause Milling Co., 189 F.2d 242
Gd Cir. I95I). Plaintiff requests the Court
to exercise its discretion and restore this
case to the docket so that it might have an

adjucation on the merits of its claim for
damage with respect to International Naviga-

=82-

APPENDIX B

gation 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, 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 relief afforded by
Rule 60(b) (5) is unavailable. It further con-
tends that restoration of the instant proceed-
ing 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 dis-
cretion vacate its previous order. Plaintiff's

exclusive purposed 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 determin-
ation whether the complaint may properly be
amended is thus in a practical sense disposi-
tive of the restoration issue.

Plaintiff seeks leave of the Court to amend
its libel by substituting International Naviga-
tion 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 determination is whether the
complaint may now be amended so as to assert
the claim therein against the vessel's owner
without violating the rule expressed in Fed. R.

© memorandum of law on behalf of International

Navigation Corporation in opposition to plaintiff's
motion to vacate dismissal and amend complaint, p.3

APPENDIX B APPENDIX B

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.

Civ. P. 15(c) against adding new parties
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, transaction or oc-
currence set forth or attempted to be
set forth in the original pleading, the
amendment relates back to the date of
the original pleading. An amendment
changing the party against whom a claim

Suit herein was commenced in 1961 against
the SS Severn River, and also against the char-
terers, Jansen and Co., Contam Linie, and Hans
H. Jansen. Plaintiff now seeks by way of
amendment 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. Plain-
tiff contends that it is entitled to such an
amendment as a matter of course. While the
thrust of Rule 15 as a whole is to allow the

liberal use of amendments to implement the
important federal policy of encouraging liti-
gation on the merits,’ Rule 15(c) imposes the
necessary restrictions in deference to the
equally important premises of the statute of
limitations,®8 with which relation back is in
the terms of the Federal Rules,Advisory Com-
mittee "intimately connected."?2 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."
Yordan v. Flaste, 374 F. Supp. 516, 518-19
(D. Del. 1974).

is asserted relates back if the foregoing
provision is satisfied and, within the
period provided by law for commencing
the action against him, the party to be
brought in by amendment (1) has recieved
such notice of the institution 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 have

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 seq., which contains
its own limitations period. 46 U.S.C. §
1303(6) states in part:

Although courts do not agree on whether
the terminology "changing the party" found in
Rule 15(c) encompasses the addition or substi-

"In any event, the carri i
Y ' der and the ship tution of parties, this court will assume that

shall be discharged from all liability in
respect to loss or damage unless suit is
brought within one year after delivery of
the goods or the date when goods should have
been delivered,"

7conley v. Gibson, 355 U.S. 41, 48 (1957).

Thus, for purposes of examining whether the 57 Minn. L. Rev. 83, 87 (1972).

9

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

~88e

addition or substitution is possible and will
proceed to test the plaintiff's proposed amend-
ment against the explicit requirements of Rule
15(c). Those courts which prohibit joinder

of new parties (see People of Living God v.

Star Towing Co., 289 F. Supp. 635 (B.D. ba.
1968)) apply a restrictive construction to the
Rule 15(c) reference to an amendment changing

a party. The Advisory Committee's Note, how-
ever, seems to reject this restrictive constuc-
tion. The stated purpose of Rule 15(c) is to
Clarify when an amendment of a pleading changing
the party against whom a claim is asserted
(including an amendment to correct a misnomer
or a misdescription of a defendant) shall relate
back to the date of the original pleading. Fed.
R. Civ. P. 15ic) Advisory Committee's Note, 39
F.R.D. at 82. 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 satisfied 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 oc-
currence set forth or attempted to be set
forth in the original pleading; (2) the party
to be brought in by amendment must have, with-
in 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 maintaining 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 mistake
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

APPENDIX B.

the first condition of Rule 15(c) is clearly
satisfied. The second condition, however,
does not seem to have been met. For plain-
tiff to satisfy that condition, it must make

a two-fold showing: (a) that International
Navigation Corporation had notice of the in-
stitution of this action!° before the statute
of limitations had run, and (b) that such no-
tice was sufficient to prevent International
from being prejudiced in maintaining its de-
fense on the merits. Without reaching the
question of prejudice, there is nothing in

the record to indicate that International re-
ceived even informal notice of the institution
of this lawsuit prior to the attempted arrest
of the SS Severn River in March, 1965, several
years after the Cogsa one-year limitation
period had expired.

10,1 though the Advisory Committee suggested that
purpose of the 1966 amendment to Rule 15 was the
Clarification of those instances in which relation
back was appropriate, there still exist certain
uncertainties in Rule 15(c) as amended. The un-
certainty stems from the construction given to

the language of the rule itself. (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 expressly held that
this language means notice of a lawsuit and not
merely notice of the incident which led to the
suit. Craig 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.

Within the Third Circuit, two District Courts have
affirmed the position adopted in Crai Slack v.
Treadway Inn of Lake Harmony, Inc., 8 F. Supp.
I5 (M.D. Pa. 1974); Francis v. Pan American Trin-
idad Oil Co., 392 F. Supp. 1252 (D. Del. 1975).
This court also adopts the position announced in
Craig. The notice requirement applicable to plain-
tiff's motion is thus notice of the commencement of
the instant suit.

APPENDIX B

Regardless of whether plaintiff can sur-
mount the second condition of Rule 15(c), the
third requirement cannot be met, The third
condition of the rule 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 Rule 15(c) (2).

Admiralty has long recognized the "person-
ality" of the ship as distinct from the owner,
and has traditionally distinguished between
actions in rem brought against a vessel itself,
and proceedings 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 purpose of filing
a lawsuit and enforcing a judgment." Continen-

tal Grane v. Barge FBL-585,364 U.S. 19, 22 (1960).

This Court refuses to accept plaintiff's conten-
tion that there exists no difference between an
in rem and an in personam cause of action. One
not only may, but must, 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 per-
sonam proceedings is "fundamental." 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 inter-
est in the thing which is personified as a de-
fendant in the litigation." Id,

-58~-

APPENDIX B

An action in rem may be initiated concur-
rently with or as an alternative to a proceeding
in personam, If as in Continental Grain, supra,
an admiralty libel has been brought against a
vessel in rem and an in personam libel has been
instituted against the vessel owner, the prac-
tical effect is the bringing of a single civil
action with two inseperable parts against the
vessel owner. Construction Aggregates Corp. v.
S.S. Azalea City, 399 F. Supp. 662 (D. N.J. 1975).

Here, however, plaintiff initially institu-
ted suit in rem agaisnt the SS Severn River and
now, 15 years later, seeks to bring the claim
aginast 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 year 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 (S.D. N.Y.
T9551); Ore Steamship Corp. v. D/S/A/S Hassel,
137 F.2d 326, 329 (ed Cir. 1543); Internatio-
Rotterdam, Inc. v. Thomsen, 218 F.2a 514, 516
(4th Cir. 1954), the cases so stating involve
factual circumstances easily distinguished from
those in the instant action. The Fourth Cir-
cuit Court of Appeals stated in Internatio-Rot-
terdam, supra, that the filing of suit in ad-
miralty begins the litigation as far as the
statute of limitation is concerned. Suit there-
in was commenced by the filing of a libel in rem
and a libel in personam. Internatio-Rotterdan,

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 a proceeding in personam. The
Carriage of Goods by Sea Act has not eroded the

-59-

APPENDIX B

long-standing admiralty tradition of dis-
tinguishing between an action in personam and
one in rem. This Court finds, therefore,
that based upon the factual circumstances pre-
sented the commencement of suit against a ves-
sel in rem is not the commencement of suit with-
in the Cogsa statute of limitations with re-
spect 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 statute of limi-
tation unless the proposed amendment is found
to relate back to the date of filing of the ori-
ginal complaint. 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 safisfy
the second and third requirements of Rule 45(c),
and the motion to amend the complaint is there-
fore denied.

As previously indicated, resoluiton of
the issue of an amendment to plaintiff's com-
plaint is dispositive of the question of res-
toration. Plaintiff's motion for an order va-
cating the Court's March 24, 1965, order of
dismissal is therefore denied. Counsel shall
submit an order in conformity with this opinion.

-60-

APPENDIX E

UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT

No, 74-1544

M. W. ZACK METAL COMPANY

Appellant
Vv.

INTERNATIONAL NAVIGATION CORPORATION
Appellee

Appeal from the United States District Court for
the Eastern District of Virginia, at Norfolk.
Richard B. Kellam, Judge.

Argued December 5, 1974 Decided March 10, 1975.

Before HAYNSWORTH, Chief Judge, BUTZNER, Circuit
Judge, and THOMSEN, Senior District Judge.

Anthony B. Cataldo (Jett, Berkley, Furr and
Heilig on brief) for Appellant; John W. Winston
(Seawell, McCoy, Winston and Dalton on brief)

for Appellee.

o67J=

APPENDIX E

APPENDIX E

THOMSEN, Senior District Judge

UNITED STATES COURT OF APPEALS

M. W. Zack Metal Company (Zack) appeals

from an order of the district court dismissing

.- an action filed therein by Zack against Inter-
national Navigation Corporation, a Liberian
corporation (International). Zack had desig-
nated its action as an admiralty and maritime
Claim within the meaning of Rule 9(h), F. R.
Civ. P., and caused the vessel Virtus, owned
by International, to be attached,

FOR THE FOURTH CIRCUIT

M.W. ZACK METAL COMPANY :

Vv. H No, 74-1544

INTERNATIONAL NAVIGATION ;
CORPORATION

International chartered its vessel Severn
River to Contam Linie Hansen (the charterer),
a German partnership, for a voyage in 1960
from Antwerp, Belgium, to New York. The char-
terer solicited cargo to be transported on
board the Severn River and issued its bills

of lading for such cargo signed by the vessel's
master. 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 New
York.

©“ ORDER-

Upon consideration of the Petition

for Rehearing, it is now ORDERED;

(1)

that the opinion be modified to

conform to the copy attached to this Order, and

(2) that the Petition be and it here- In 1961 Zack instituted a suit in a court

in Hamburg, Germany, where the charterer resided,
against the charterer, the individual partners
liable for the damage to Zack's steel and entered
a money judgment for the full amount of the dam-
age in favor of Zack against the charterer and
its partners. Zack's claim against International
was postponed for later decision.

by is denied.

With concurrences of Judges Haynsworth

and Butzner.

In 1971 the German court rendered a fur-
ther decision holding, according to the agreed
translation, 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 judgment that Internationa] “is convicted to

Roszel C. Thomsen
Senior U. S. District Judg

March » 2975.

-69-

APPENDIX E

submit to execution being levies on the S. Ss.
Severn River" of US$ 64,018.83, plus inter-
est and part of Zack's expenses. The affida-
vits 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 the German
practice may take additional testimony and re-
view both the facts and the law.

In early 1972 Zack learned that ano-
ther 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 caused 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 dismissed
the suit, with a full opinion.

Zack has declared on the German judg-
ment, which furnishes no basis for an in per-
sonam claim against the owner or for the attach-
ment of the Virtus.

The judgment of the trial court in
Hamburg 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 owner's liability to
its interest in the Severn River. Essentially
and substantively, it is an in rem judgment
against the Severn River, imposing no in per-
sonam liability upon its owner, and furnishing
no basis for the assertion of an in personam

=-70=

; ™ .
~~ ———e

APPENDIX E

liability of the owner or the attachment of

any vessel owned by International. The attach-
ment, 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.

We have treated the cause of action
being founded solely on the German judgment.
Nothing we have done or said Should be con-
strued as intimating any opinion upon any cause
of action Zack may have against any person,
firm or corporation, including International,
under the Carriage of Goods by Sea Act, 46 U.S.C.
1300 et seq.

Affirmed.

---

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