summary of supplemental admiralty rule b attachment prepared by: freehill hogan & mahar, llp
TRANSCRIPT
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Summary of Supplemental Admiralty Rule B Attachment
Prepared by:
Freehill Hogan & Mahar, LLP
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Text of Rule B
If a defendant is not found within the district …a verified complaint may contain a prayer for process to attach the defendant’s tangible or intangible personal property - up to the amount sued for - …The court must review the complaint and affidavit, and if the conditions of this Rule B appear to exist, enter an order so stating and authorizing process of attachment.
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Requirements for Rule B
Defendant Not Found Within the District
Maritime Claim
Property Within the District
No Bar to the Attachment
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Defendant Not Found in District
Depends on answer to two questions
Does the defendant do enough business within the district to be subject to the court’s in personam jurisdiction?
Does the defendant have an agent for service of process in the district?
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Must Have a Maritime Claim
Must have a valid maritime claim against the defendant(s) Attorney’s fees & interest
Claims for indemnity / claims not ripe: may not support an attachment
Claims of alter ego status Claims of paying agent status
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Property Within the District
Broad language – “tangible or intangible” Electronic Fund Transfers
Why Southern District of New York? State law – Winter Storm & Aqua Stoli
cases Transfers to or from the defendant Still a hot issue
Letters of Credit
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No Statutory Bar
Must ensure there is no bar to pre-judgment attachment of defendant’s assets Example: Foreign Sovereign Immunities
Act Contract precluding ancillary relief Foreign litigation or arbitration
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No Need Requirement
Some judges had held that there was a “need” requirement to Rule B
Overruled by Aqua Stoli case in 2006
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Steps for Obtaining & Serving Rule B Order
Verified complaint & affidavit Ex parte relief / without notice to
defendant Prima facie showing Daily service on banks Notice to defendant after property
restrained
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Post-Attachment Hearing(Rule E(4)(f))
Defendant entitled to prompt hearing (within 3 days)
Plaintiff bears burden of proof Prima facie showing / reasonable
grounds / probable cause Review of extraneous evidence Grounds for challenging
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Counter-Security
Admiralty Rule E(2): for limited costs (e.g. bond premium, bank charges)
Admiralty Rule E(7): for counterclaim arising out of the same transaction
Court has discretion Failure to post after court order