United States District Court, D. Oregon
Roberts Daivd R. Boyajian SCHWABE, WILLIAMSON & WYATT,
P.C. Attorneys for Plaintiff
J. Henry Valerie I. Holder KEESAL, YOUNG & LOGAN
Attorneys for Defendant Aretoussa Shipping S.A.
OPINION & ORDER
A. HERNÁNDEZ UNITED STATES DISTRICT JUDGE.
Swaidan Shipping Co., LLC brings this admiralty action
against Defendants M/V DONOUSA in rem and Dileton
Maritime, S.A., Androussa Shipping, S.A., Aretoussa Shipping,
S.A., and Erikoussa Maritime, S.A., in personam.
Specially appearing Defendant Aretoussa Shipping, S.A. moves
for security for costs and damages on its counterclaim for
wrongful attachment. Plaintiff posted $500 as security for
costs as required by Supplemental Admiralty Rule E(2)(b) and
Local Admiralty Rule 1020-1. Plaintiff otherwise opposes
Defendant's motion. For the reasons that follow, the
Court denies Defendant's Motion for Security for Damages.
early 2017, Defendant Androussa, the registered owner of the
vessel M/T ANDROUSSA, issued a clean bill of lading for a
shipment of gas oil purchased by Plaintiff. Compl.
¶¶ 9-10, ECF 1. While in transit, the vessel was
stopped and boarded by Coalition Forces led by the Kingdom of
Saudi Arabia and directed to Jeddah for inspection.
Id. at ¶ 11. Plaintiff alleges that its cargo
was confiscated after the Coalition and Saudi Arabian forces
determined that the ship was likely used for smuggling
illegal weapons. Id. at ¶¶ 13-14.
March 7, 2018, Plaintiff filed this ancillary admiralty and
maritime action against Defendants-alleging breach of
contract, negligence, fraud, implied warranty of workmanlike
performance, and alter ego liability-in order to obtain
security for Plaintiff's claims currently proceeding in
arbitration in London. Id. at ¶ 89. Plaintiff
also moved ex parte to attach the M/V DONOUSA, the
vessel owned by Defendant Aretoussa, pursuant to Admiralty
Rule B on the grounds that Defendant Aretoussa is the alter
ego of Defendant Androussa and Defendant Dileton, the manager
of both the M/T ANDROUSSA and the M/V DONOUSA. Pl. Ex Parte
Mot., ECF 6.
motion was granted by this Court on March 8, 2018, and the
M/V DONOUSA was attached on March 25, 2018. Order, ECF 11. On
April 12, 2018, Defendant Aretoussa filed a restricted
appearance and answer to Plaintiff's
Complaint. Answer, ECF 43. Defendant Aretoussa also
brought a counterclaim against Plaintiff for wrongful
attachment. Id. at 11. Defendant alleges that
Plaintiff knew that Defendant was not the alter ego of
Androussa or Dileton and acted in bad faith, with malice, or
with gross negligence in filing its verified complaint.
Id. at 10-11. As a result of the seizure of the M/V
DONOUSA, Defendant alleges that it has suffered damages
totaling in excess of $5, 165, 210.50. Id. at 12.
Defendant's present motion seeks counter-security for its
claim for wrongful attachment. Def. Mot., ECF 44.
Admiralty Rule E(7)(a) of the Federal Rules of Civil
Procedure governs security on counterclaims in admiralty
When a person who has given security for damages in the
original action asserts a counterclaim that arises from the
transaction or occurrence that is the subject of the original
action, a plaintiff for whose benefit the security has been
given must give security for damages demanded in the
counterclaim unless the court, for cause shown, directs
otherwise. Proceedings on the original claim must be stayed
until this security is given unless the court directs
Fed. R. Civ. P. Supp. Admiralty R. E(7)(a). “The
purpose of Supplemental Rule E(7) is to ‘place the
parties on a basis of equality as regards
security.'” Whitney-Fidalgo Seafoods, Inc. v.
Miss Tammy, 542 F.Supp. 1302, 1305 (W.D. Wash.
1982) (citing Vic Frank's Boat Co. v. Yacht
SUNCHASER III, 508 F.Supp. 609, 610 (W.D. Wash.
1981)). “Although the language of this rule is
automatic, a district court has discretion to excuse a
plaintiff from posting counter-security ‘for cause
shown.'” Seaworthy Serv. Inc. v. NANEA,
No. 09-5062BHS, 2009 WL 1174654, at *2 (W.D. Wash. April 28,
2009) (citing Fed.R.Civ.P. Supp. Admiralty R. E(7)(a) and
Whitney-Fidalgo S542 F.Supp. at 1302). The burden is
on the plaintiff to show that “good cause exists to
relieve the plaintiff of its obligation to provide
have looked to two different factors in determining whether
to grant counter-security. Some courts focus on the
plaintiff's ability to satisfy a judgment. Seaworthy
Serv., 2009 WL 1174654, at *2; see also
Whitney-Fidalgo, 542 F.Supp. at 1305 (“It is
intended only as a means by which to remedy a defendant's
insecurity in respect to the likelihood of satisfying a
judgment awarded by the court.”). Others look to the
ability of the plaintiff to post counter-security.
Seaworthy Serv., 2009 WL 1174654, at *2; see
also MMI Int'l, Inc. v. M/V SKYROS, 1991 A.M.C.
1264, 1273 (N.D. Cal. 1991) (“Given that the Rule
assumes security will usually be ...