The Supreme Court is considering whether to hear an appeal fo the Ninth Circuit's decision in Kawasaki Kisen Kaisha v. Regal Beloit Corporation and Union Pacific Railroad Company v. Regal-Beloit Corporation.  The issue before the court is to what extent do statutory rules governing shipments by rail or motor carrier apply to a shipment of…

Admiralty practitioners note:  Winter Storm has been overturned. A panel of the 2nd Circuit Court of Appeals issued this noteworthy decision today, with the consent of all active judges for that circuit.  Decision here. Everyone else can stop reading now. 

This issue relates to Rule B attachment under the Federal Rules of Civil Procedure and New York state law regarding the definition of “property.”  In Winter Storm Shipping Ltd. v. TPI, 310 F.3d 263 (2nd Cir. 2002), the court of appeals found that electronic funds transfers between two parties outside of New York, but which funds transferred through “intermediary banks” in New York, were subject to prejudgment attachment in New York. 

The intermediary bank is how foreign banks will exchange currency for dollars by way of Electronic Funds Transfer or ETF.  The court uses this example:

To more concretely illustrate the circumstances of the instant case, consider the following example: ABC Shipping wants to transfer $100 to XYZ overseas. ABC has an account at India National Bank, and XYZ has an account at Bank of Thailand. India National Bank and Bank of Thailand do not belong to the same consortium, but each has an account at New York Bank. To begin the transfer, ABC instructs India National Bank to transfer $100 to XYZ’s account at Bank of Thailand. India National Bank then debits ABC’s account and forwards the instruction to New York Bank. New York Bank then debits India National’s account and credits Bank of Thailand’s account. Bank of Thailand then credits XYZ’s account, thereby completing the transfer.

The New York banks were certainly not happy with Winter Storm.  According to this opinion (citing amicus brief):

from October 1, 2008 to January 31, 2009 alone “maritime plaintiffs filed 962 lawsuits seeking to attach a total of $1.35 billion. These lawsuits constituted 33% of all lawsuits filed in the Southern District, and the resulting maritime writs only add to the burden of 800 to 900 writs already served daily on the District’s banks

ETF’s are not property subject to Rule B attachment in New York any longer.  I’ll try to get the briefs to post later.

Several Hawaii residents and businesses have brought suit against the federal government challenging the constitutionality of the “Jones Act.”  The complaint can be downloaded here.

The suit notes that because the Jones Act requires cargo to be transported on U.S. flagged ships between U.S. ports, Hawaii residents pay more for their goods.  It purports …