Stemcor USA Incorporated v. Cia Siderurgica do Par

Case: 16-30984 Document: 00514550127 Page: 1 Date Filed: 07/11/2018
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
United States Court of Appeals
No. 16-30984
Fifth Circuit
FILED
July 11, 2018
STEMCOR USA INCORPORATED, Lyle W. Cayce
Clerk
Plaintiff
v.
CIA SIDERURGICA DO PARA COSIPAR, ET AL.,
Defendants
----------------------------------------------
DAEWOO INTERNATIONAL CORPORATION,
Plaintiff - Appellant
v.
THYSSENKRUPP MANNEX GMBH,
Intervenor Plaintiff - Appellee
v.
AMERICA METALS TRADING L.L.P., ET AL.,
Defendants
Appeal from the United States District Court
for the Eastern District of Louisiana
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Before HIGGINBOTHAM, GRAVES, and HIGGINSON, Circuit Judges.
STEPHEN A. HIGGINSON, Circuit Judge:
We grant Intervenor Plaintiff–Appellees’ Motion for Panel Rehearing
and deny the Motion For Rehearing En Banc. We withdraw the prior opinion,
870 F.3d 370 (5th Cir. 2017), and substitute the following.
This case is a dispute between two creditors, each of which attached the
same pig iron owned by America Metals Trading L.L.P. (“AMT”). Plaintiff-
Appellant Daewoo International Corp. (“Daewoo”) sued AMT in the Eastern
District of Louisiana, seeking an order compelling AMT to arbitrate and an
attachment of the pig iron. Daewoo invoked both maritime attachment and
the Louisiana non-resident attachment statute, which allows attachments in
aid of any “action for a money judgment.” La. Code Civ. Proc. art. 3542. Citing
both types of attachment, the district court granted Daewoo its attachment.
Following Daewoo’s attachment, Intervenor-Appellee Thyssenkrupp Mannex
GMBH (“TKM”) attached the same pig iron in Louisiana state court. TKM
then intervened in the federal suit, arguing that Daewoo’s attachment should
be vacated because (1) maritime jurisdiction was improper and (2) Louisiana
non-resident attachment was inapplicable.
The district court agreed with TKM and vacated Daewoo’s attachment.
Specifically, the district court found that because Daewoo’s underlying suit
sought to compel arbitration, it was not an “action for a money judgment” and
therefore Daewoo could not receive a non-resident attachment writ. Daewoo
appeals only the district court’s conclusion that its Louisiana non-resident
attachment writ was invalid. We affirm on slightly different grounds.
I
Daewoo is a South Korean trading company. In May 2012, Daewoo
entered into a series of contracts with AMT for the purchase of pig iron, to be
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delivered in New Orleans. The sale contracts contained arbitration clauses.
Although Daewoo made payments under the contracts, AMT never shipped the
pig iron. TKM is a German company. Between June 2010 and February 2011,
TKM entered into six contracts to purchase pig iron from AMT. AMT never
delivered. In response to the breach of contract, TKM and AMT negotiated a
settlement, which required AMT to make quarterly payments to TKM. AMT
did not pay.
On December 14, 2012, Daewoo filed suit in the Eastern District of
Louisiana, seeking attachment of AMT’s pig iron on board the M/V Clipper
Kasashio, and asserting maritime jurisdiction. The district court issued the
attachment. On December 21, Daewoo amended its complaint to seek a writ
of attachment under the Louisiana non-resident attachment statute. The writ
was granted. On December 22, the U.S. Marshals Service served Daewoo’s
writ on the cargo, which was then anchored in Kenner Bend.
On December 28, 2012, TKM filed suit in Jefferson Parish state court
seeking a writ of attachment over the same pig iron that Daewoo attached on
December 22. TKM’s state court writ of attachment was served on the cargo
on December 29, 2012. TKM then moved to intervene in Daewoo’s federal suit.
TKM sought a federal writ of attachment over the pig iron, which was granted
and served on the cargo on January 11.
That same day, all of the parties moved in federal court to sell the pig
iron. The court approved the sale. The parties agreed that the proceeds of the
sale would serve as substitute res, subject to TKM’s jurisdictional attack on
the federal attachments.
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On May 9, 2016, TKM moved to vacate Daewoo’s attachment. 1 The
district court agreed with TKM and vacated Daewoo’s writ on August 4, 2016.
With Daewoo’s federal writ vacated, the first valid remaining writ was TKM’s
state court writ. Accordingly, the district court ordered that the proceeds from
the pig-iron sale be transferred to the Jefferson Parish state court. On August
10, Daewoo moved to stay the district court’s order, arguing that “[i]n the event
that Daewoo’s appeal is successful it would be difficult to retrieve the funds
from the state court, assuming the state court has not already dispersed the
funds, and would create serious issues of federal-state comity.” The district
court denied the stay request because it was filed after the district court had
sent the money to the Jefferson Parish state court.
II
The district court found federal subject matter jurisdiction under the
Convention on the Recognition and Enforcement of Foreign Arbitral Awards
(the “Convention”). We agree.
For a federal court to have jurisdiction under the Convention two
requirements must be met: (1) there must be an arbitration agreement or
award that falls under the Convention, and (2) the dispute must relate to that
arbitration agreement. These requirements flow from the text of two sections
of the Convention. The explicit jurisdictional provision is Section 203, which
gives federal courts jurisdiction over all “action[s] or proceeding[s] falling
under the Convention.” 9 U.S.C. § 203. “An arbitration agreement or arbitral
award arising out of a legal relationship, whether contractual or not, which is
considered as commercial, including a transaction, contract, or agreement
described in section 2 of this title, falls under the Convention.” 9 U.S.C. § 202.
1 TKM successfully moved to vacate a number of parties’ attachments. Only Daewoo
appealed.
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Accordingly, the first step for determining jurisdiction is deciding whether the
“arbitration agreement or award . . . falls under the Convention.” Id.
The next step, derived from Section 203, is to ask whether the “action or
proceeding”—as opposed to the arbitration agreement or award—falls under
the Convention. The Convention’s removal statute offers guidance on what
“falling under” means because “[g]enerally, the removal jurisdiction of the
federal district courts extends to cases over which they have original
jurisdiction.” Francisco v. Stolt Achievement MT, 293 F.3d 270, 272 (5th Cir.
2002). Section 205 of the Convention allows for removal whenever “the subject
matter of an action or proceeding pending in a State court relates to an
arbitration agreement or award falling under the Convention.” 9 U.S.C. § 205.
We have read “relates to” to mean “has some connection, has some relation,
[or] has some reference” to. Acosta v. Master Maint. & Constr. Inc., 452 F.3d
373, 378–79 (5th Cir. 2006). And reading “falling under” to mean “relates to”
makes sense grammatically. “Fall” means “to come within the limits, scope, or
jurisdiction of something.” Merriam-Webster’s Collegiate Dictionary 418 (10th
ed. 2002). Accordingly, the second step of the jurisdictional question is asking
whether the “action or proceeding” “relates to” a covered arbitration agreement
or award. See Fred Parks, Inc. v. Total Compagnie, 981 F.2d 1255, 1992 WL
386999, at *1–2 (5th Cir. 1992) (unpublished) (treating the question of original
and removal jurisdiction under the Convention as identical).
This two-step jurisdictional inquiry is consistent with case law
interpreting the Convention. See, e.g., BP Expl. Libya Ltd. v. ExxonMobil
Libya Ltd., 689 F.3d 481, 487 & n.4 (5th Cir. 2012) (finding jurisdiction where
there was a covered arbitration agreement and the suit sought appointment of
arbitrators); Borden, Inc. v. Meiji Milk Prods. Co., 919 F.2d 822, 826 (2d Cir.
1990) (holding that jurisdiction over preliminary injunction in aid of covered
arbitration was proper because the remedy sought did not try to “bypass
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arbitration”); Sunkyong Eng’g & Const. Co. v. Born, Inc., 149 F.3d 1174, 1998
WL 413537, at *5 (5th Cir. 1998) (unpublished) (“The FAA grants the United
States district courts original federal question jurisdiction over arbitral awards
and agreements to arbitrate that fall within the Convention.”); Venconsul N.V.
v. Tim Int’l. N.V., 03Civ.5387(LTS)(MHD), 2003 WL 21804833, at *3 (S.D.N.Y.
Aug. 6, 2003) (“Borden has been interpreted as recognizing a court’s power to
entertain requests for provisional remedies in aid of arbitration even where
the request for remedies does not accompany a motion to compel arbitration or
to confirm an award.”).
Both jurisdictional requirements are met here. First, Daewoo’s
arbitration agreements with AMT are covered by the Convention. For an
arbitration agreement to be covered by the Convention, four requirements
must be met: (1) there must be an agreement in writing to arbitrate the
dispute; (2) the agreement must provide for arbitration in the territory of a
Convention signatory; (3) the agreement to arbitrate must arise out of a
commercial legal relationship; and (4) at least one party to the agreement must
not be an American citizen. See Freudensprung v. Offshore Tech. Servs., Inc.,
379 F.3d 327, 339 (5th Cir. 2004); Sunkyong, 149 F.3d 1174, 1998 WL 413537,
at *5; Sedco, Inc. v. Petroleos Mexicanos Mexican Nat’l Oil Co. (Pemex), 767
F.2d 1140, 1144–45 (5th Cir. 1985). All four requirements are met here:
• There is an agreement in writing to arbitrate Daewoo and AMT’s
dispute.
• That agreement provides for arbitration in New York, and the United
States is a signatory to the Convention.
• The agreement arises out of a commercial relationship between Daewoo
and AMT.
• Both Daewoo and AMT are not American citizens.
Second, this suit is related to the AMT arbitration agreements because
Daewoo seeks an attachment to facilitate the arbitration provided for in the
AMT agreements. See Borden, 919 F.2d at 826 (“[T]he desire for speedy
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decisions in arbitration is entirely consistent with a desire to make as effective
as possible recovery upon awards, after they have been made, which is what
provisional remedies do.” (internal quotation marks and citation omitted)).
Our decision in E.A.S.T., Inc. of Stamford v. M/V Alaia, 876 F.2d 1168 (5th
Cir. 1989), strongly counsels towards recognizing subject matter jurisdiction
based on the Convention to issue provisional remedies in aid of arbitration. 2
The court in E.A.S.T., albeit in the context of a maritime attachment, found
that the “the arrest of a vessel prior to arbitration is not inconsistent with the
Convention.” Id. at 1173. And the court noted that the Convention “does not
expressly forbid pre-arbitration attachment” and that pre-arbitration
attachment “may ‘serve[] . . . as a security device in aid of arbitration.’” Id.
(alteration in original) (quoting Atlas Chartering Servs., Inc. v. World Trade
2 At one point at least, there was significant contrary authority on this issue. See, e.g.,
Simula, Inc. v. Autoliv, Inc., 175 F.3d 716, 726 (9th Cir. 1999) (“Because the district court
correctly concluded that all of Simula’s claims were arbitrable and the ICC arbitral tribunal
is authorized to grant the equivalent of an injunction pendente lite, it would have been
inappropriate for the district court to grant preliminary injunctive relief.”); I.T.A.D. Assocs.,
Inc. v. Podar Bros., 636 F.2d 75, 77 (4th Cir. 1981) (“[T]he attachment obtained by I.T.A.D.
and the superseding bond posted by Podar are contrary to the parties’ agreement to arbitrate
and the Convention[.]”); McCreary Tire & Rubber Co. v. CEAT S.p.A., 501 F.2d 1032, 1038
(3d Cir. 1974) (finding that the Convention does not allow a court to issue provisional
remedies). It appears, however, that the courts that read jurisdiction under the Convention
restrictively have retreated from their views and now, at least in most circumstances,
recognize subject matter jurisdiction to grant provisional remedies in aid of arbitration. See
Aggarao v. MOL Ship Mgmt. Co., 675 F.3d 355, 377 n.19 (4th Cir. 2012) (“Because the
Supreme Court has rejected the McCreary premise, Podar Bros. has been effectively
overruled by the Court on the jurisdictional point and is not controlling precedent with
respect to [the] injunction request [in aid of arbitration].”); Toyo Tire Holdings Of Americas
Inc. v. Cont’l Tire N. Am., Inc., 609 F.3d 975, 980 (9th Cir. 2010) (“In contrast to Simula,
[plaintiff] seeks an injunction to preserve the status quo until the arbitral panel can consider
and rule upon Toyo’s application for interim relief pending the arbitration panel’s final
decision. Allowing a district court to grant this type of relief is not contrary to the ‘emphatic
federal policy in favor of arbitral dispute resolution’ of primary concern in Simula. To the
contrary, in cases such as this, judicial interim relief may be necessary to preserve the
meaningfulness of the arbitral process.” (internal citation omitted)); Rhone Mediterranee
Compagnia Francese Di Assicurazioni E Riassicurazoni v. Lauro, 712 F.2d 50, 55 (3d Cir.
1983) (allowing district court to maintain jurisdiction pending arbitration).
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Grp., Inc., 453 F. Supp. 861, 863 (S.D.N.Y. 1978)).
Indeed, E.A.S.T.’s reasoning mirrors the reasoning of courts that have
found subject matter jurisdiction under the Convention to order state-law
provisional remedies. Like the court in E.A.S.T., those courts reason that
“nothing in the Convention divests federal courts of jurisdiction to issue
provisional remedies . . . such as an attachment, when appropriate in
international arbitrations.” Bahrain Telecomms. Co. v. Discoverytel, Inc., 476
F. Supp. 2d 176, 181 (D. Conn. 2007); see also China Nat’l Metal Prods.
Imp./Exp. Co. v. Apex Dig., Inc., 155 F. Supp. 2d 1174, 1180 (C.D. Cal. 2001)
(“Rather than conflicting with the parties’ agreement to arbitrate, provisional
remedies such as attachment reinforce arbitration agreements by ensuring
that assets from which an arbitration award would be satisfied are secured
while arbitration is pending.”). E.A.S.T. therefore strongly suggests that this
court recognizes jurisdiction under the Convention to issue state-law
preliminary remedies in aid of arbitration. 3
3 And there are compelling reasons against reading jurisdiction under Section 203 as
narrowly limited to the three remedies expressly allowed by the Convention (compelling
arbitration and appointing arbitrators in Section 206 and confirming awards in Section 207).
Namely,
[n]othing in § 206 or § 207 limits the subject matter jurisdiction
of federal courts. These sections merely identify the remedies
that federal courts may grant, and do not speak in jurisdictional
terms or refer in any way to the jurisdiction of the district courts.
. . . To grant the remedies provided in those sections, the Court
must first determine that it has jurisdiction . . . .
Treating §§ 206 and 207 as jurisdictional provisions confuses the
subject matter jurisdiction of federal courts with their remedial
authority. Although jurisdiction is a word of many . . . meanings,
there is a difference between the two. The nature of the relief
available after jurisdiction attaches is, of course, different from
the question whether there is jurisdiction to adjudicate the
controversy . . . . The breadth or narrowness of the relief which
may be granted under federal law . . . is a distinct question from
whether the court has jurisdiction over the parties and the
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Applying E.A.S.T. and the cases that follow it, the Convention grants
jurisdiction over Daewoo’s request for an attachment. Like the plaintiff in
E.A.S.T., Daewoo sought to attach the pig iron in order to facilitate arbitration
and increase its chance of recovering on any award. Because Daewoo sought
attachment to bring about a covered arbitration—that is, because Daewoo’s
suit related to a covered arbitration agreement—this court has subject matter
jurisdiction. 4
III
The parties dispute whether Louisiana’s non-resident attachment
statute allows for attachment in aid of arbitration. The district court held that
it does not. With great respect for the district court, and cognizant of the lack
of instructional case law and limited briefing on this issue below, we decline to
adopt a categorical approach to this question. Louisiana’s non-resident
attachment statute allows for attachment in aid of suits to confirm monetary
arbitration awards. Moreover, because Louisiana law allows for attachment
in aid of yet-to-be-brought actions, non-resident attachment may be available
in aid of arbitration when an eventual confirmation suit is contemplated.
Nevertheless, we affirm the district court’s vacatur because Daewoo did not
strictly comply with the attachment statute’s procedural requirements.
As always, statutory interpretation begins with “the plain language and
subject matter. Any error in granting or designing relief does
not go to the jurisdiction of the court.
CRT Capital Grp. v. SLS Capital, S.A., 63 F. Supp. 3d 367, 374–75 (S.D.N.Y. 2014) (internal
quotations marks, citations, and alterations omitted). Simply put, the question of what
remedies are available in a Convention suit is distinct from the question of jurisdiction.
4 We asked the parties to brief whether this court has personal jurisdiction under
quasi in rem principles. We are satisfied that we have personal jurisdiction. See Republic
Nat’l Bank of Miami v. United States, 506 U.S. 80, 88–89 (1992); Nassau Realty Co., Inc. v.
Brown, 332 So. 2d 206, 210 (La. 1976).
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structure of the statute.” Coserv Ltd. Liab. Corp. v. Sw. Bell Tel. Co., 350 F.3d
482, 486 (5th Cir. 2003); see also Arabie v. CITGO Petroleum Corp., 89 So. 3d
307, 312 (La. 2012) (“[A]ccording to the general rules of statutory
interpretation, our interpretation of any statutory provision begins with the
language of the statute itself.”). Louisiana’s attachment statute provides that
“[a] writ of attachment may be obtained in any action for a money judgment,
whether against a resident or a nonresident, regardless of the nature,
character, or origin of the claim, whether it is for a certain or uncertain
amount, and whether it is liquidated or unliquidated.” La. Code Civ. Proc. art.
3542. A “money judgment” is a “[a] judgment for damages subject to immediate
execution, as distinguished from equitable or injunctive relief.” Black’s Law
Dictionary 972 (10th ed. 2014). Accordingly, an “action for a money judgment”
is a civil or criminal judicial proceeding seeking monetary damages.
Louisiana case law supports this interpretation. In de Lavergne v. de
Lavergne, 244 So. 2d 698 (La. App. 4th Cir. 1971), a Louisiana court of appeals
was asked to decide whether a suit for alimony was an “action for a money
judgment” within the meaning of Article 3542. The court concluded that it
was, reasoning:
A proceeding for alimony is a suit for judgment
ordering the payment of money just as any other suit
which has for its object the recovery of money in
damages or in enforcement of any obligation to pay a
sum of money whether liquidated or not. The
difference is that in a judgment ordering the payment
of a sum of money as alimony or for child support in
addition to the ordinary remedies available to the
judgment creditor for execution, there is the additional
remedy of a contempt proceeding and the imposition of
a penalty for noncompliance with the court’s order.
We must reject the argument of appellants that the
additional remedy makes the action something other
than one for a money judgment.
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Id. at 704. The de Lavergne court’s analysis aligns with the plain meaning of
Article 3542. That is, the de Lavergne court first asked whether a suit for
alimony sought an order compelling the payment of money. Id. Noting,
however, that an alimony suit allowed for more than just a payment of
money—because an alimony proceeding allowed “the additional remedy of a
contempt proceeding and the imposition of a penalty for noncompliance with
the court’s order”—the court asked whether the additional remedy converted
alimony into “something other” than an action “for a money judgment.” Id.
The court concluded that it did not because the additional contempt remedy
was intended to make the money judgment more effective. Id.
And other sections of Louisiana law that refer to money judgments have
similarly been interpreted to refer to judicial proceedings seeking judgments
of money damages. See Flowers v. S. Reg’l Physician Servs. Inc., 247 F.3d 229,
233 n.4 (5th Cir. 2001) (“[A]s a matter of statutory interpretation, in
determining the meaning of a particular statutory provision, it is helpful to
consider the interpretation of other statutory provisions that employ the same
or similar language.”). For example, Civil Code Article 3501 sets forth the
prescriptive period for “money judgments”: “A money judgment rendered by a
trial court of this state is prescribed by the lapse of ten years . . . .” Courts
interpreting Article 3501 have found that orders for “the payment of a sum of
money” are money judgments, see, e.g., Eikert v. Beebe, 188 So. 3d 1129, 1131
(La. App. 2d Cir. 2016), but that orders directing a party to take an action are
not money judgments, see, e.g., Liquidator of Clinton & P.H.R. Co. v. Whitaker,
22 La. Ann. 209, 209 (1870) (“The judgment directs the liquidator to discharge
a duty attached to his office. It is not a money judgment.”); Williams v. Perry,
436 So. 2d 1268, 1269 (La. App. 1st Cir. 1983) (judgment of partition is not a
money judgment). Courts interpreting Code of Civil Procedure Article 2291
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have similarly defined “money judgment.” Article 2291 provides “[a] judgment
for the payment of money may be executed by a writ of fieri facias directing the
seizure and sale of property of the judgment debtor.” The Article has been
interpreted to distinguish between orders for the payment of money and orders
directing a party to take an action. See, e.g., Madere v. Madere, 660 So. 2d
1205, 1205 (La. 1995) (order of partition “did not create” a money judgment);
Lindy Invs., III, L.P. v. Shakertown Corp., 631 F. Supp. 2d 815, 821 & n.13
(E.D. La. 2008) (suit seeking declaration that condition precedent for payment
was met was not a suit for money judgment).
Based on this definition of “action for a money judgment,” we agree with
the district court that a suit to compel arbitration (like this suit) is not directly
an action for a money judgment. A motion to compel arbitration seeks an order
requiring a party to take an action—namely, to arbitrate the dispute.
Accordingly, a suit seeking to compel arbitration is not an “action for a money
judgment,” and Daewoo’s suit seeking to compel arbitration cannot underlie a
Louisiana non-resident attachment writ. On the arguments raised by Daewoo,
its appeal ends here.
We further take the opportunity to note that Louisiana law provides, in
limited circumstances, that an attachment may issue before the suit
underlying the attachment is filed. Article 3502 of the Louisiana Code of Civil
Procedure provides:
A writ of attachment . . . may issue before the petition
is filed, if the plaintiff obtains leave of court and
furnishes the affidavit and security provided in Article
3501. In such a case the petition shall be filed on the
first judicial day after the issuance of the writ of
attachment . . . unless for good cause shown the court
grants a longer delay.
Article 3502 allows for the possibility of attachments in suits like this one. In
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Louisiana, arbitral awards are convertible into money judgments in
confirmation proceedings. See, e.g., Matherne v. TWH Holdings, L.L.C., 136
So. 3d 854, 860 (La. App. 1st Cir. 2013) (“A confirmed arbitration award is
considered to be a valid and final judgment for purposes of res judicata.”); La.
Stat. § 9:4212 (“Upon the granting of an order confirming, modifying, or
correcting an award, judgment may be entered in conformity therewith in the
court wherein the order was granted.”); La. Stat. § 9:4214 (noting that when
an award is converted to a judgment, “[t]he judgment so entered shall have the
same force and effect, in all respects, as, and be subject to all the provisions of
law relating to, a judgment in an action, and it may be enforced as if it had
been rendered in an action in the court in which it is entered”). Thus, an action
to confirm a money award is an action for a money judgment. And because a
confirmation suit can be an action for a money judgment, Article 3502 allows
for attachments to be issued before the contemplated underlying confirmation
suit is brought. 5
Put into context, Article 3502 allows for attachments to issue in aid of
arbitration so long as the party seeking the attachment (1) complies with the
5 Reading Louisiana law to allow for pre-suit attachment in aid of arbitration makes
sense of the statutory scheme as a whole because other provisions of Louisiana law assume
that some state-law preliminary remedies are available to aid arbitration. Louisiana has
adopted the UNCITRAL Model Law on interim measures in arbitration, which provides, “[i]t
is not incompatible with an arbitration agreement for a party to request, before or during
arbitral proceedings, from a court an interim measure of protection and for a court to grant
the measure.” La. Stat. § 9:4249. Moreover, the UNCITRAL Model Law indicates that
attachment is one of the interim remedies that may aid an arbitration. It would be strange
for Louisiana to have adopted the UNCITRAL Model Law without allowing for state law
interim remedies in aid of arbitration. See Food & Drug Admin. v. Brown & Williamson
Tobacco Corp., 529 U.S. 120, 121 (2000) (“In determining whether Congress has specifically
addressed the question at issue, the court should not confine itself to examining a particular
statutory provision in isolation. Rather, it must place the provision in context, interpreting
the statute to create a symmetrical and coherent regulatory scheme.”); Green v. La.
Underwriters Ins. Co., 571 So. 2d 610, 616 (La. 1990) (“If two statutes can be reconciled by a
fair and reasonable interpretation, we must read the statutes so as to give effect to each.”).
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requirements of Article 3502 and (2) shows good cause for a pre-petition
attachment, which will usually require showing that arbitration is likely to
result in a confirmation suit and also showing a need for an immediate
attachment (which may include an inquiry into the imminence of the
arbitration or confirmation suit).
Although Daewoo’s briefs did not rely on Article 3502 as a reason to
reverse the district court, our independent review of the record confirms that
Daewoo did not satisfy step one. Because attachment is a “harsh” remedy, the
Louisiana statutes “providing for a Writ of Attachment . . . must be strictly and
literally complied with.” Barnett Marine, Inc. v. Van Den Adel, 694 So. 2d 453,
458 (La. App. 5th Cir. 1997); accord Yorkwood Sav. & Loan Ass’n v. Thomas,
379 So. 2d 798, 799 (La. App. 4th Cir. 1980). Failure to do so renders a granted
writ a “nullity.” Lee v. Lee, 38 So. 2d 66, 69 (La. 1948). The record does not
disclose that Daewoo strictly and literally complied with Article 3502’s
requirements. We see no indication that Daewoo invoked Article 3502 when it
sought a writ, that the district court granted Daewoo permission to file a
petition on “the first judicial day after the issuance of the writ,” or that the
district court made the good-cause finding to permit a later filing. La. Code
Civ. Proc. art. 3502. 6
6 On this score, the dissent observes that Daewoo’s compliance with Article 3502 “was
not raised on appeal, [that] neither party presented any such argument, and [that] the
district court made no such finding.” Dissenting Opinion at 1. Indeed, but the forfeiture was
Daewoo’s, not TKM’s. The court that issued the attachment did not address Article 3502
because Daewoo did not invoke that provision; nor did Daewoo rely on that law as ground to
reverse the district court’s judgment. As for the merits: true enough, “the statute allows the
court to grant a longer delay” beyond Article 3502’s default timeline, Dissenting Opinion at
2 (emphasis added), but the attachment order said nothing of deadline extensions or the
required good-cause showing, contra La. Code Civ. Proc. art. 3502. Finally, forfeiture
principles also work against the dissent’s contention that “Louisiana law permits only the
party whose assets were attached to raise procedural challenges to the attachment.”
Dissenting Opinion at 2. This argument implicates statutory, not constitutional, standing,
see Bd. of Miss. Levee Comm’rs v. EPA, 674 F.3d 409, 417 (5th Cir. 2012) (“Unlike
constitutional standing, prudential standing arguments may be waived.”); cf. Harold H.
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Although Article 3502 allows parties to seek an Article 3542 attachment
before commencing confirmation proceedings, Daewoo neither invoked nor
complied with Article 3502’s requirements when it sought the attachment
here.
We AFFIRM.
Huggins Realty, Inc. v. FNC, Inc., 634 F.3d 787, 795 n.2 (5th Cir. 2011) (noting that
constitutional standing, unlike statutory standing, is unwaivable), and Daewoo did not stake
this position until its reply brief, see, e.g., Flex Frac Logistics, L.L.C. v. N.L.R.B., 746 F.3d
205, 208 (5th Cir. 2014) (“Ordinarily, arguments raised for the first time in a reply brief are
waived.”); United States v. Scroggins, 599 F.3d 433, 446–47 (5th Cir. 2010) (“We look to an
appellant’s initial brief to determine the adequately asserted bases for relief.” (quoting Knatt
v. Hosp. Serv. Dist. No. 1, 327 F. App’x 472, 483 (5th Cir. 2009)).
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JAMES E. GRAVES, JR., Circuit Judge, dissenting:
I would conclude that the underlying action seeking to compel
arbitration here is clearly an “action for a money judgment” under Louisiana’s
non-resident attachment statute. See La. Code Civ. P. art. 3542. Because I
would vacate the judgment of the district court and remand, I respectfully
dissent.
As the majority acknowledges, Daewoo has made it clear from the outset
that it would be pursuing a money judgment. The “nature, character, or origin
of the claim” just happens to be arbitration. La. Code Civ. P. art. 3542. The
majority cites various cases for its conclusion that, under the definition of
“action for a money judgment,” a suit to compel arbitration is not directly an
action for a money judgment. However, those cases are inapposite. The
majority declares, incorrectly, that “[o]n the arguments raised by Daewoo, its
appeal ends here.” As the majority has previously conceded, the inquiry
absolutely does not end there. The majority’s declaration is wholly
undermined by the analysis which immediately follows that declaration.
Clearly that analysis continues to be the basis for the majority’s decision on
rehearing. Further, the majority correctly concedes that Article 3502 allows
for attachments in suits like this. See Matherne v. TWH Holdings, L.L.C., 136
So. 3d 854, 860 (La. App. 1st Cir. 2013); see also La. Stat. § 9:4249. 1 This
concession establishes that the district court erred in vacating the attachment
on the basis that the underlying action was not an action for a money
judgment.
Rather than properly concluding that the district court erred, the
majority instead concludes that “[t]he record does not disclose that Daewoo
1 TKM’s counsel has also conceded that an action to confirm an arbitration award
would be an action for a money judgment.
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strictly and literally complied with Article 3502’s requirements.” Saying, “[w]e
see no indication that Daewoo invoked Article 3502 when it sought a writ, that
the district court granted Daewoo permission to file a petition ‘on the first
judicial day after the issuance of the writ,’ or that the district court made the
good-cause finding to permit a later filing. La. Code Civ. Proc. art. 3502.” Yet
that issue was not raised on appeal, neither party presented any such
argument, and the district court made no such finding. Moreover, as TKM
argues on rehearing, the majority fails to identify any exceptional
circumstance to justify consideration of a new issue sua sponte. See Martinez
v. Tex. Dep’t of Criminal Justice, 300 F.3d 567, 574 (5th Cir. 2002).
Notwithstanding the lack of exceptional circumstances, I disagree with
the majority’s analysis of and conclusion that Daewoo failed to comply with the
procedural requirements of Article 3502 of the Louisiana Code of Civil
Procedure. As Daewoo asserts in its response to the petition for rehearing, the
statute allows the court to grant a longer delay and Daewoo’s application was
based on an affidavit stating that it would be filing for arbitration within 30
days. Additionally, as Daewoo asserts, longstanding Louisiana law permits
only the party whose assets were attached to raise procedural challenges to the
attachment.
In Gilkerson-Sloss Commission Co. v. Bond, 11 So. 220 (La. 1892) 2, the
Supreme Court of Louisiana said:
On the first point urged by the interveners it is elementary
that in an attachment suit the intervener will not be permitted to
urge defenses personal to the defendants. The formality and
regularity of the proceedings, the rightful issuing of the
attachment, in the absence of fraud and collusion between plaintiff
and defendants, are matters pertaining exclusively to the
2There appears to be a typographical error in the listing of this case which says
“Gilkeson.” The caption and body of the opinion, as well as some other opinions involving the
same company, indicate the spelling “Gilkerson.”
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defendant. The intervener is limited to the assertion of his own
rights, to show that the property attached is his; that he has a
superior privilege on it, or, as alleged in this case, the plaintiffs
and defendants perpetrated a fraud in the issuing of the
attachment in order to defeat his pursuit of the property. He has
nothing to do with the irregularity of the affidavit, the
insufficiency of the attachment bond, and other irregularities in
the proceedings.
Id. at 221. See also Gen’l Motors Acceptance Corp. v. Jordan, 65 So. 2d 627, (La.
Ct. App. 1st Cir. 1953) (“All of o[u]r jurisprudence on this point shows a long
standing and well-defined rule that an intervenor must take the case as he
finds it, and he is not allowed to retard the progress of the main action.”). Id.
at 629; Fleming v. Shields, 21 La. Ann. 118, 119-20 (1869) (“In the absence of
fraud and collusion, the intervenor will not be permitted to urge defenses which
are personal to the defendant.”); and West v. His Creditors, 8 Rob. 123, 128 (La.
1844) (“An intervenor who claims property in controversy between other
parties, cannot interfere therein any further than to prove his right to the
property. He cannot contest the plaintiff's claim against the defendant, nor
urge any irregularities in the suit.”). This court, in Berger v. First Federal
Savings and Loan Association of Warner Robbins, Ga., 824 F.2d 400, 402 (5th
Cir. 1987), recognized the holding from Gilkerson-Sloss, cited above, that
“wrongful attachment may not be raised by intervenor.” Also, in Fisher v.
Jordan, 116 F.2d 183, 185 (5th Cir. 1940), this court prohibited such a
collateral attack on an attachment.
The majority does not conclude that there was fraud and collusion here,
and the cases cited by the majority are easily distinguished. In Barnett
Marine, Inc. v. Van Den Ade, 694 So. 2d 453, 458 (La. App. 5th Cir. 1997), the
matter involved the defendants whose assets were attached, not an intervenor.
The majority also cites Yorkwood Sav. & Loan Ass’n v. Thomas, 379 So. 2d 798,
799 (La. App. 4th Cir. 1980), and Lee v. Lee, 38 So. 2d 66, 69 (La. 1948), but,
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again, those cases did not involve an intervenor. The majority argues that
Daewoo somehow forfeited the right to rebut any argument that it did not
procedurally comply with Article 3502 even though TKM waived the very issue
of Daewoo’s procedural compliance by never raising it. That argument is
illogical. The majority offers no authority for its statement that “forfeiture
principles also work against the dissent’s contention that ‘Louisiana law
permits only the party whose assets were attached to raise procedural
challenges to the attachment.’” Instead, the majority concedes that “[t]his
argument implicates statutory, not constitutional, standing” and then cites
Board of Mississippi Levee Commissioners v. Environmental Protection Agency,
674 F.3d 409, 417 (5th Cir. 2012), for the proposition that, “[u]nlike
constitutional standing, prudential standing arguments may be waived.” 3 In
doing so, the majority acknowledges that any procedural compliance argument
TKM may have against Daewoo’s attachment is waived. It is wholly improper
for the majority to raise, sua sponte, an issue that has been waived and then
conclude that Daewoo forfeited the right to assert that the issue is waived.
Regardless, Daewoo did not fail to raise any constitutional or procedural
argument in its initial brief. Daewoo also did not raise any new issue in its
reply brief. Instead, Daewoo merely provided additional authority regarding
the issues it raised in its initial brief. Moreover, Daewoo was not aware of its
need to address TKM’s lack of standing to raise a procedural challenge to the
attachment as the dispositive issue until the majority decided the appeal on
3 The majority also cites various other cases to support its propositions that
“constitutional standing, unlike statutory standing, is unwaivable” and that this court should
decline to address the merits of a constitutional argument not raised in the initial brief. See
Harold H. Huggins Realty, Inc. v. FNC, Inc. 634 F.3d 787 (5th Cir. 2011); see also Flex Frac
Logistics, L.L.C. v. N.L.R.B., 746 F.3d 205, 208 (5th Cir. 2014); and United States v.
Scroggins, 599 F.3d 433 (5th Cir. 2010). But none of these cases address the issue which is
raised here.
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this procedural issue rather than the issues actually raised or decided in the
district court. This is particularly so when TKM still maintains that it is not
challenging whether Daewoo complied with the procedural requirements.
TKM asserts on rehearing that the standing argument is “undiscerning”
and argues that the language from Gilkerson “that he has a superior privilege,”
quoted above, gives it standing to raise a procedural challenge to the
attachment. Gilkerson-Sloss, 11 So. At 221. Notwithstanding that the
referenced language in no way confers standing to raise a procedural challenge
to Daewoo’s attachment, TKM then asserts that, under Fleming, it is not
asserting a procedural irregularity. Instead, TKM argues that it is attacking
the “very availability of an Article 3541 attachment” because the action “is not
for a money judgment.” 4 However, as the majority concedes, this is an action
for which article 3541 attachment is proper, thus, TKM’s argument is defeated.
Further, like the majority, TKM fails to distinguish any of the cases on point
and does not argue there was fraud and collusion.
For these reasons, I would vacate the judgment of the district court and
remand. Accordingly, I respectfully dissent.
4 Yet, the majority ignores TKM’s concession on rehearing that it is not asserting a
procedural irregularity.
20