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S.A. v. Drescher

decided: August 11, 1983.


Appeal from an order of the United States District Court for the Southern District of New York (Motley, C.J.) directing appellant to post security for the release of an arrested vessel.

Waterman, Mansfield and Van Graafeiland, Circuit Judges. Mansfield, Circuit Judge, concurring.

Author: Van Graafeiland


Compania Anonima Venezolana De Navegacion (Venline), a Venezuelan steamship corporation, appeals from an order of the United States District Court for the Southern District of New York (Motley, C.J.) requiring it to post security for release from arrest of the ship M/V Oliver Drescher, which was owned by Containerline Joachim Drescher, K.G. (Drescher), a German limited partnership. On December 6, 1981, while Venline was operating the vessel under a sub-charter from KAP Shipping Corporation, to whom it had been time-chartered by Drescher, five large mobile cranes were washed overboard during a storm. The cranes were being shipped from Baltimore, Maryland to Matanzas, Venezuela. C.V.G. Electrificacion Del Caroni C.A. was the consignee and Seguros Banvenez S.A. was its insurance carrier.

This suit seeks damages of $1,300,000 for loss of the cranes. The complaint alleges a geographical deviation, based on the fact that the ship was headed for Searsport, Maine when the loss occurred, and an on-deck deviation, based on the issuance of a clean bill of lading and a dock receipt requiring under-deck stowage. Drescher and Venline have cross-claimed against each other.

The Oliver Drescher was arrested at a Brooklyn pier on December 28, 1982, while still under the charter party. Because of the allegations of deviation, which Drescher's insurance policy did not cover, its insurer refused to provide a bond to secure the release of the vessel. Maintaining that Venline, as charterer, ultimately would be liable for the cargo loss, Drescher requested the district court to order Venline to put up the necessary security. After a hearing, the district court ordered that Venline "post security sufficient in form and amount to allow the owners of the M/V OLIVER DRESCHER to post a bond for the release of said vessel from arrest." Venline posted a bond and then appealed. For reasons hereinafter set forth, the appeal is dismissed.


Recognizing that the district court's order is not a "final decision" for purposes of 28 U.S.C. ยง 1291, appellant makes a two-pronged argument in support of appealability. It contends (1) that the district court did not have the authority under either the Admiralty Rules or the court's general equity powers to compel appellant, as charterer, to furnish security for release of the vessel, and (2) that when, as here, the power of the district court is challenged, its order becomes appealable under the collateral order doctrine of Cohen v. Beneficial Indus. Loan Corp., 337 U.S. 541, 546, 93 L. Ed. 1528, 69 S. Ct. 1221 (1949).

It is not always easy to decide whether a district court's order constitutes an abuse of conceded authority or an exercise of power which the court does not possess. See, e.g., De Beers Consolidated Mines, Ltd. v. United States, 325 U.S. 212, 225, 89 L. Ed. 1566, 65 S. Ct. 1130 (1945) (Douglas, J. dissenting); U.S. v. Kane, 646 F.2d 4, 9-10 (1st Cir. 1981). When the issue involves the scope of the equity powers available to a district court sitting in admiralty, its resolution is particularly troublesome. See, e.g., Tradax Ltd. v. M.V. Holendrecht, 550 F.2d 1337 (2d Cir. 1977); Pino v. Protection Maritime Ins. Co., 599 F.2d 10, 14-16 (1st Cir.), cert. denied, 444 U.S. 900, 62 L. Ed. 2d 136, 100 S. Ct. 210 (1979); Techem Chemical Co. v. M/T Choyo Maru, 416 F. Supp. 960, 970-72 (D. Md. 1976); MISR Ins. Co. v. M/V Har Sinai, 80 F.R.D. 438, 440-41 (S.D.N.Y. 1978).

The word "power" sometimes is used in cases such as Bancroft Navigation Co. v. Chadade Steamship Co., 349 F.2d 527 (2d Cir. 1965), to distinguish interlocutory orders based on questions of law from those unappealable orders which involve only the exercise of discretion. Id. at 529-30. See Dayco Corp. v. Foreign Transactions Corp., 705 F.2d 38, 40 (2d Cir. 1983). However, even an actual abuse of power does not make an interlocutory order appealable unless the order "finally determine[s] claims of rights separable from, and collateral to, rights asserted in the action." Cohen v. Beneficial Indus. Loan Corp., supra, 337 U.S. at 546; Drys Shipping Corp. v. Freights, Sub-Freights, Charter Hire, 558 F.2d 1050, 1051-52 (2d Cir. 1977); Int'l Products Corp. v. Koons, 325 F.2d 403, 407 (2d Cir. 1963).

The proper remedy for usurpation of power, per se, is by petition for mandamus. Schlagenhauf v. Holder, 379 U.S. 104, 110, 13 L. Ed. 2d 152, 85 S. Ct. 234 (1964); IBM v. Edelstein, 526 F.2d 37, 40 (2d Cir. 1975); International Products Corp. v. Koons, supra, 325 F.2d at 407; Barcelo v. Brown, 655 F.2d 458, 462 (1st Cir. 1981); see Financial Services, Inc. v. Ferrandina, 474 F.2d 743, 746 n.7 (2d Cir. 1973).*fn1 Something more than alleged abuse of power is required to make an interlocutory order appealable. If this were not so appellate courts would be deluged by interlocutory appeals alleging abuse of power.

It is for lack of finality that orders denying motions to vacate attachments generally are held to be non-appealable. Cushing v. Laird, 107 U.S. 69, 76, 27 L. Ed. 391, 2 S. Ct. 196 (1883); Flegenheimer v. General Mills, Inc., 191 F.2d 237 (2d Cir. 1951); see Swift & Co. Packers v. Compania Colombiana Del Caribe, 339 U.S. 684, 689, 94 L. Ed. 1206, 70 S. Ct. 861 (1950). Such an order is said to lack finality because, although it directs attachment of the funds, it does not direct that they be paid to the plaintiff, who may, or may not, be able to prove his claim. See United States v. Estate of Pearce, 498 F.2d 847, 850 (3d Cir. 1974) (en banc). That is the situation that exists in the instant case, where the liability of the shipowner is sure to be hotly contested.

Moreover, it is possible, indeed likely, that, upon proper application by appellant, Chief Judge Motley would modify her order so as to give Venline some sort of security to protect it in the event it is required to pay a loss attributable to Drescher. Perhaps, and there are other possibilities, this could be done by giving Venline a lien against the ship itself. We suggest that, if such an application is made, Chief ...

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