ORDER DISMISSING COMPLAINT AND VACATING SUPPLEMENTAL RULE B ATTACHMENT
JAMES L. ROBART, District Judge.
Before the court are two motions: (1) Defendants Shanghai Grand China Shipping Development Co. Ltd. ("Shanghai Development"), Hong Kong Chain Glory Shipping Co. LTD ("Chain Glory"), Grand China Logistics Holdings (Group) Company Limited ("GCL"), and HNA Group Co. Ltd.'s ("HNA") (collectively "Defendants") motion to dismiss Plaintiff Iron Pasha, Inc.'s ("Iron Pasha") complaint and to vacate the Federal Rules of Civil Procedure, Supplemental Rule B ("Rule B") process of maritime attachment (Def. Mot. (Dkt. # 45)), and (2) Garnishee Hainan Airlines Company Limited's ("Hainan Airlines") motion to quash the Rule B process of maritime attachment and vacate the Federal Rules of Civil Procedure, Supplemental Rule E ("Rule E") directions (Garn. Mot. (Dkt. # 49)). The court has reviewed the motions, all submissions filed in support of and opposition to the motions, the balance of the record, and the applicable law. Being fully advised, the court grants both motions, dismisses Iron Pasha's complaint without prejudice, and vacates the Rule B process of maritime attachment and Rule E directions.
This is an ancillary proceeding to an admiralty case in which Iron Pasha claims that Defendants are liable for breach of contract. Iron Pasha filed this ancillary proceeding to obtain security for its substantive claims, which are in front of an English arbitral tribunal. The lawsuit underlying the instant action arises out of Iron Pasha's allegation that Defendants breached and repudiated a bareboat charter party contract for Iron Pasha's ship, the M/V GCL ARGENTINA. Iron Pasha entered into the charter party contract with Defendants Development, Chain Glory, and GCL in April 2010. The contract called for Defendants to pay Iron Pasha $19, 800.00 per day in exchange for Defendants' use of the seagoing vessel. (Compl. (Dkt. #1) Ex. 1 at 2.) Iron Pasha asserts that Defendants breached the charter by regularly failing to pay this amount. ( See generally 1st Supp. Compl. (Dkt. #40-1).) Iron Pasha also claims that Defendant HNA is liable for Development, Chain Glory, and Holding's breach because all four defendants share the same corporate identity, though they purport to be separate business entities. ( See generally id .) The merits of this dispute will be decided by an arbitration panel in London, where Iron Pasha intends to claim damages resulting from Defendants' alleged breach. When Iron Pasha filed its First Amended Verified Complaint in April 2012, its alleged damages were $1, 339, 984.50. Iron Pasha now asserts that the damages total $3, 118, 771.11 due to Defendants' alleged continuing breach. (1st Supp. Compl. at 10.)
In April 2012, Iron Pasha filed a complaint and motion to attach property belonging to HNA in the Western District of Washington in order to obtain quasi in rem jurisdiction over Defendants and security for the London arbitration. ( See Compl. at 8-10 (citing Fed. R. Civ. P., Supp. R. B)); Aurora Maritime Co. v. Abdullah Mohamed Fahem & Co., 85 F.3d 44, 48 (2nd Cir. 1996). The court granted Iron Pasha's motion in April 2012 and issued process to facilitate the attachment of $1, 339, 984.50 of Defendants' in-district property. (4/30/12 Order (Dkt. # 20).) The property consisted of stock HNA holds in Hainan Airlines. ( See Compl.; Mot. to Attach 1 (Dkt. # 4).) On May 8, 2012, Iron Pasha filed notice that it served Hainan Airlines consistent with the service requirements of Federal Rules of Civil Procedure, Supplemental Rule E ("Rule E"). ( See Serv. of Summons Exec. (Dkt. # 22).)
Nearly one year later, on March 7, 2013, Iron Pasha filed a motion for directions pursuant to Rule E(4)(d). (Mot. for Directions (Dkt. # 26).) The court granted Iron Pasha's motion, directing Hainan Airlines to mark the encumbrance against HNA's stock in its financial records. ( See 5/23/13 Order (Dkt. # 38).) The court also granted Iron Pasha leave to file a supplemental verified complaint pursuant to Federal Rule of Civil Procedure 15(d), amending its alleged damages from $1, 339, 984.50 to $3, 118, 771.11. ( See id. ) Defendants' objections to Iron Pasha's Rule E motion for directions largely related to the underlying validity of the attachment and the situs of the stock at issue. ( See 4/1/13 Resp. (Dkt. # 32) at 2, 7-10.) Yet, for more than one year following the issuance of the maritime attachment, Defendants had failed to file a Rule E(4)(f) motion to challenge or vacate the order of attachment. See Fed. R. Civ. P., Supp. R. E(4)(f). Thus, the court determined "that the validity of the attachment [wa]s not presently before [it]." (5/23/13 Order at 13.) The court nevertheless acknowledged that "[n]othing in [its order granting Rule E directions] preclude[d] Defendants from bringing... arguments relating to the validity of the attachment... in a Rule E(4)(f) motion" and "that it is Defendants' prerogative to [do so]." ( Id. at 13-14.) Defendants have now filed a motion to dismiss the complaint and a Rule E(4)(f) motion to vacate the order of attachment. ( See generally Def. Mot.) In addition, Hainan Airlines has filed a motion to quash the Rule B maritime attachment and the Rule E directions. ( See generally Garn. Mot.) Thus, the validity of the attachment is now squarely before the court via both Defendants' and Hainan Airlines' motions. The court now turns to those motions.
Rule B maritime attachments serve the dual purpose of obtaining jurisdiction over an absent defendant and securing collateral for a potential judgment in plaintiff's favor. Aqua Stoli Shipping Ltd. v. Gardner Smith Pty. Ltd., 460 F.3d 434, 437 (2d Cir. 2006), overruled on other grounds by Shipping Corp. of India Ltd. v. Jaldhi Overseas Pte Ltd., 585 F.3d 58, 61 (2d Cir. 2009) (mini en banc). The elements for a Rule B writ of maritime attachment are: "(1) Plaintiff has a valid prima facie admiralty claim against the defendant; (2) defendant cannot be found within the district; (3) property of the defendant can be found within the district; and (4) there is no statutory or maritime law bar to the attachment." Equatorial Marine Fuel Mgmt. Servs. Pte Ltd. v. MISC Berhad, 591 F.3d 1208, 1210 (9th Cir. 2010) (citing Aqua Stoli Shipping, 460 F.3d at 445; Fed. R. Civ. P., Supp. R. B). After receiving notice of the attachment, a defendant may contest it under Rule E(4)(f). Equatorial Marine Fuel, 591 F.3d at 1210 (citing Fed. R. Civ. P., Supp. R. E(4)(f)). At a Rule E hearing, a defendant may argue that the attachment should be vacated because plaintiff failed to meet one of the four conditions for attachment. See id. ; see also Fed. R. Civ. P., Supp. R. E, advisory committee's note (1985 amends.) (explaining that at a Rule E hearing, defendant "can attack the complaint, the arrest, the security demanded, or any other alleged deficiency in the proceedings"). Iron Pasha, as the plaintiff, has the burden of justifying a continued attachment. Equatorial Marine Fuel, 591 F.3d at 1210 (citing Fed. R. Civ. P., Supp. R. E(4)(f)).
The only property at issue in this proceeding is shares of stock in Hainan Airlines that are owned by HNA. Defendants assert that Iron Pasha has failed to sustain its burden of demonstrating that element three of a Rule B maritime writ of attachment has been met-that property of Defendants can be found within the district. ( See Def. Mot. at 1, 20-24); Shipping Corp. of India v. Jaldhi Overseas Pte Ltd., 585 F.3d 58, 69 n.12 (2d Cir. 2009) ("In Rule B attachment proceedings, jurisdiction is predicated on the presence within the court's territorial reach of property in which the Rule B defendant has an interest."). Garnishee Hainan Airlines also asserts as ground for quashing the attachment and vacating the directions that the shares of its stock that Iron Pasha seeks to attach are located in China and not within the court's jurisdiction. (Garn. Mot. at 7.) The court agrees with Defendant and Hainan Airlines and on this basis dismisses Iron Pasha's complaint and vacates the Rule B writ of attachment and subsequent Rule E directions.
Defendants and Hainan Airlines assert that HNA's Hainan Airlines stock is not subject to Rule B attachment because it is not located within the Western District of Washington, but rather in China. (Def. Mot. at 20-24; Garn Mot. at 7.) In order to analyze where Hainan Airline's stock is located, the court must determine what law governs the issue. "[A] court sitting in admiralty must apply federal maritime choice-of-law rules." Aqua-Marine Constructors, Inc. v. Banks, 110 F.3d 663, 670 (9th Cir. 1997).) Defendants assert that maritime choice of law analysis "generally requires application of the law of the state with the most significant relationship' to the substantive issue in question." (Def. Mot. at 21 (citing Aqua-Marine, 110 F.3d at 673).) Iron Pasha concedes that this is the proper test to apply (Resp. to Def. Mot. (Dkt. # 52) at 15), but the parties disagree regarding the outcome of the test's application.
Defendants assert that Chinese law applies to the issue of the location of Hainan Airlines stock because Hainan Airlines is a Chinese corporation, and its stock was issued in China and is traded on the Shanghai Stock exchange. (Def. Mot. at 21.) Further, HNA, the stockholder, is a Chinese corporation and holds its Hainan Airlines stock certificates in China. ( Id. ) Defendants submit a declaration from an attorney admitted to practice law in the People's Republic of China, Mr. Xingzheng Hou, who testifies that, under Chinese law, the stock that HNA owns in Hainan Airlines is located in China. ( See Hou Decl. (Dkt. # 46) ¶¶ 5-7.)
Iron Pasha responds that Chinese law is inapplicable and the court should look to United States law because "when it comes to maritime attachment and garnishment the state with the most significant relationships... is the forum where the attachment or garnishment proceeding is pending... based on the presence of the property in its jurisdiction, the plaintiff's choice of forum, and the absence of a dominant foreign choice of law." (Resp. to Def. Mot. at 15 (italics added) (citing Blue Whale Corp. v. Grand China Shipping Development Co., LTD., 722 F.3d 488, 500 (2d Cir. 2013).) This argument, however, is largely circular or a mere tautology because whether Iron Pasha has fulfilled its burden of establishing the presence of Defendants' property in this district is the very issue the court must resolve. Further, in Blue Whale, the case upon which Iron Pasha relies,  the "narrative yield[ed] several potential sources of law, " including China, Brazil, and Liberia, "none [of which had] a particularly strong connection to the transaction." 772 F.3d at 499. Here, unlike Blue Whale, the only potential foreign law at issue is Chinese law. Thus, the Blue Whale court's concern about "the absence of a dominant foreign choice of law" is not at issue here. All that remains, then, with respect to Iron Pasha's argument is its own choice of forum. Once again, however, the court is faced with circular reasoning. The court cannot accede to Iron Pasha's choice of forum absent Iron Pasha's demonstration that some property of Defendants exists within the jurisdiction, which is the very issue the court must resolve.
Even assuming that the court agreed with Iron Pasha that United States law should apply with respect to the location of Hainan Airlines stock owned by HNA, Iron Pasha cites no United States authority for its position that the stock is located within this district. ( See id. at 16-17.) Instead, Iron Pasha makes the remarkable assertion, again without citation to authority, that the situs of the stock, as an intangible, "is immaterial." (Resp. to Garn. Mot. (Dkt. # 54) at 10.) This position is contrary to Ninth Circuit law which expressly provides that one of the essential elements ...