Bouchard Transportation Co., Inc. v. Laurel Shipping LLC
- Vyskocil
- 1:19-cv-09559
- U.S. District Court · Southern District of New York
- 3
In Bouchard Transportation v. Laurel Shipping, Judge Vyskocil allowed amendment and ordered countersecurity discussions because Bouchard’s claims were plausibly pleaded.
Bouchard Transportation Co., Inc. could amend its pleadings and pursue countersecurity; Laurel Shipping LLC had to discuss the amount with Bouchard and participate in the required joint submission. The order concerned the four vessels named in Laurel’s third-party complaint, including the three that had been arrested.
What happened
Bouchard Transportation Co., Inc. sued Laurel Shipping LLC and Gulf Oil LP in a dispute involving a contract. Laurel later brought an in-rem claim against four vessels owned by Bouchard and obtained arrest warrants; three vessels were arrested, while one remained unarrested.
Bouchard asked to amend its pleadings to seek countersecurity—security intended to place both sides on equal footing—under Admiralty Rule E(7). Laurel opposed the request as late and argued that Bouchard’s claims lacked merit.
Judge Mary Kay Vyskocil allowed Bouchard to amend its pleadings by June 15, 2020, finding good cause despite the earlier deadline. She also found that Bouchard’s claims were not completely meritless, ordered the parties to discuss the amount of countersecurity, and required a joint letter by June 22, 2020; the order did not set the amount itself.
The detailed version
- Bouchard Transportation Co., Inc. v. Laurel Shipping LLC · No. 1:19-cv-09559
- Vyskocil
- June 1, 2020
Background
Bouchard Transportation Co., Inc. brought the underlying civil case against Laurel Shipping LLC and Gulf Oil LP in connection with a disputed contract. Laurel filed a third-party complaint in rem—meaning against property rather than only against a person or company—against four vessels owned by Bouchard. Laurel sought and obtained warrants authorizing the vessels’ arrest. Two vessels were arrested on May 1, 2020, another was arrested on May 21, 2020, and the fourth had not been arrested as of the order.
Bouchard moved for an extension of time to amend its pleadings. It explained that the amendment would seek countersecurity under Federal Rule of Civil Procedure Supplemental Admiralty Rule E(7) for the vessels Laurel had arrested. Countersecurity is security requested from the opposing party to help place the parties on equal footing regarding security. Laurel opposed the request, arguing that it was untimely under the March 6, 2020 deadline in the case management plan and that Bouchard’s contract claims were fundamentally without merit.
Court’s Analysis
The court explained that countersecurity should be awarded when the claims arise from the same transaction or occurrence and are not completely meritless. The court stated that the threshold for merit is very low: a claim satisfies it when it is well pleaded and based on a plausible, even if debatable, legal theory.
The court found good cause for Bouchard’s late amendment. The vessels at issue were not arrested until May 1, 2020, at the earliest, so an earlier request to amend would have been hypothetical. Bouchard filed its May 14 motion within two weeks of the first arrest, which the court found inconsistent with Laurel’s assertion that the request was a delay tactic. The court also found that Bouchard’s claims met the low threshold for countersecurity because they were not completely without merit.
Ruling
Judge Mary Kay Vyskocil ordered that Bouchard could amend its pleadings no later than June 15, 2020. If the remaining vessel was later arrested, Bouchard could promptly move for countersecurity. The court further ordered the parties to meet and confer about an appropriate amount of countersecurity and to file a joint letter by June 22, 2020, either stating an agreed amount or explaining each party’s proposed amount and its basis. The order did not itself determine the amount of countersecurity.
Read the full 3-page opinion on CourtListener, the free public archive maintained by the Free Law Project.