United States District Court, W.D. Washington, Seattle
SHAGANG SHIPPING COMPANY LIMITED (IN LIQUIDATION), Plaintiff, HNA GROUP CO., LTD., HNA HOLDING GROUP CO. LIMITED f/k/a HNA INTERNATIONAL INVESTMENT HOLDINGS LIMITED, HNA PLATEAU GOLF LLC, HNA WASHINGTON NATIONAL GOLF LLC, HNA NEWCASTLE GOLF LLC, HNA INDIAN SUMMER GOLF LLC, HNA TROPHY LAKE GOLF, LLC, HNA REDMOND RIDGE LLC HNA HARBOUR POINTE LLC and ABC GOLF, LLC, Defendants.
HONORABLE RICHARD A. JONES UNITED STATES DISTRICT JUDGE
matter comes before the Court on Defendants' Motion To
Vacate Process of Maritime Attachment and Garnishment and
Dismiss Complaint. Dkt. # 32. The parties presented
sufficient arguments by way of thorough
briefing and the balance of the record for the
Court to render a decision based on Supplemental Admiralty
Rule E(4)(f). The parties were permitted to file extensive
briefing and evidence on which the Court placed no
limitation, and therefore the Court finds a hearing
unnecessary on this matter in light of the briefing and
balance of the record.
entered into a Charter Agreement with Grand China, to which
HNA Group Co. Ltd. (“Group”) signed as a
guarantor. Dkt. # 1 (Complaint) at ¶ 16. Grand China
breached the Agreement and Group refused to fulfill its
obligations as the guarantor. Id. at ¶¶
18, 19. The parties litigated in London in the English Court,
which entered judgment against Group for the sum of $68, 597,
049.59, plus interests and costs (“English
Judgement”). Id. at ¶ 21.
collect on the English Judgment, Plaintiff successfully
obtained a writ of attachment pursuant to the Supplemental
Rules for Admiralty and Maritime Claims and Asset Forfeiture
Actions of the Federal Rules of Civil Procedure. Dkt. ## 2,
6. The Court issued process of attachment and writ of
garnishment against eight golf courses located in Washington
(“US golf courses”). Dkt. # 6.
seeking attachment of the U.S. golf courses, Plaintiff needed
to prove through a verified complaint that it established a
reasonable probability that it would prevail on its alter ego
claim of liability against Defendants. Id. Eight
limited liability companies (“LLC Defendants”)
own the U.S. golf courses. Dkt. # 1 (Complaint) at
¶¶ 45, 46. These LLC Defendants are owned by HNA
Holding Group Co. Limited (“Holding”).
Id. at ¶ 45. In turn, Holding is owned in part
by Group and in part by public shareholders. Specifically,
Group, through a series of subsidiaries, holds approximately
67 percent of Holding's traded shares while about 900
public shareholders own the remaining 33 percent of
Holding's traded shares. Dkt. # 34 at 809.
alleges that Group, Holding, and the LLC Defendants abused
the corporate form through overlapping officers and suspect
infusions of capital to avoid creditors. Defendants deny
this, offering a panoply of public records into evidence.
Defendants are now before the Court seeking vacatur of the
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
E(4)(f) allows any person whose property has been attached
pursuant to Rule B an opportunity to appear before the Court
to contest the attachment. To sustain an attachment, the
burden is on Plaintiff to show that it has fulfilled the
“filing and service requirements of Rules B and
E.” Aqua Stoli Shipping Ltd., 460 F.3d at 445
(footnote omitted); see also Equatorial Marine Fuel Mgmt.
Servs., 591 F.3d at 1210 (“At a Rule E hearing,
defendant may argue that the attachment should be vacated
because plaintiff failed to meet one of the four conditions
plaintiff fails to demonstrate that it has met the
requirements of Rules B and E, the Court must vacate the
attachment. Id. at 445. Maritime plaintiffs,
however, are not required to prove their case at this stage.
See Ronda Ship Mgmt. Inc. v. Doha Asian Games Organising
Comm., 511 F.Supp.2d 399, 404 (S.D.N.Y. 2007)
(“The prima facie standard in the maritime attachment
context is a pleading requirement, not an evidentiary
standard, and differs from the use of that phrase in other
contexts.”); Wajilam Exps. (Singapore) Pte, Ltd. v.
ATL Shipping Ltd., 475 F.Supp.2d 275, 279 (S.D.N.Y.
2006) (holding that where attachment is based on a fraud
theory of veil piercing, plaintiff should not be required to
allege fraud with particularity before discovery) (citing
Japan Line, Ltd. v. Willco Oil Ltd., 424 F.Supp.
1092, 1094 (D. Conn. 1976)); Sea-Terminals, Inc. v.
Indep. Container Line, Ltd., No. 89-412-JRR, 1989 WL
222634, at *2 (D. Del. Aug. 16, 1989) (holding that whether
the defendant “is a totally separate and unrelated
company” from the company directly liable to plaintiff
should not be decided “until the facts are fully
fleshed out after discovery”).
plaintiff carries its burden of showing that an attachment
satisfies the requirements, the Court may still vacate the
attachment if the defendant can show that “1) the
defendant is present in a convenient adjacent jurisdiction;
2) the defendant is present in the district where the
plaintiff is located; or 3) the plaintiff has already
obtained sufficient security for a judgment.” See
Proshipline Inc. v. Aspen Infrastructures Ltd., 533
F.Supp.2d 422, 426 (S.D.N.Y. 2008) (citing Aqua Stoli
Shipping Ltd., 460 F.3d at 436).