Louisiana Record

Sunday, August 18, 2019

5th Circuit Court of Appeals vacates district court ruling in pig iron attachment dispute

By David Hutton | Sep 19, 2017

NEW ORLEANS — Two creditors that attached the same pig iron owned by America Metals Trading LLP (AMT) will have to continue seeking a resolution after the 5th Circuit Court of Appeals vacated a district court ruling that dissolved one creditor’s attachment.

The appeals court also remanded the case to the U.S. District Court for the Eastern District of Louisiana.

Daewoo International Corp. and Thyssenkrupp Mannex GMBH (TKM) attached the same pig iron Daewoo in the Eastern District and TKM in Louisiana state court.

The appeal was heard by Circuit Judges Patrick E. Higginbotham, Stephen A. Higginson and James E. Graves Jr. The majority opinion was written by Higginson and filed Sept. 1. 

While agreeing with the opinion, Graves wrote separately that he concluded that the underlying action seeking to compel arbitration was clearly an “action for a money judgment” under Louisiana’s nonresident attachment statute.

“As the majority acknowledges, Daewoo has made it clear from the outset that it would be pursuing a money judgment," Graves wrote. "The nature, character or origin of the claim just happens to be arbitration. Nevertheless, I concur with the conclusion ultimately reached by the majority.”

Daewoo originally invoked both maritime attachment and the Louisiana nonresident attachment statute, which allows attachments in aid of any “action for a money judgment.”

Following Daewoo’s attachment, TKM attached the same pig iron in Louisiana state court. TKM then intervened in the federal suit, arguing that Daewoo’s attachment should be vacated because maritime jurisdiction was improper and Louisiana nonresident attachment was inapplicable.

The district court agreed with TKM and vacated Daewoo’s attachment.

“Specifically, the district court found that because Daewoo’s underlying suit sought to compel arbitration, it was not an action for a money judgment and therefore Daewoo could not receive a non-resident attachment writ,” Higginson wrote in the opinion. “Daewoo appeals only the district court’s conclusion that its Louisiana non-resident attachment writ was invalid.”

From the outset, Daewoo was clear it would pursue a money award in arbitration and it needed a preconfirmation suit attachment to secure any eventual arbitral award because AMT was hemorrhaging assets.

Daewoo consistently maintained it needed an attachment so it could return to Louisiana and collect on its successful arbitration award.

The court also noted that the Louisiana Code of Civil Procedure allows Daewoo to seek a Section 3542 attachment before commencing its confirmation proceeding, and Daewoo followed Section 3502’s requirements, Daewoo’s attachment was valid.

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Fifth Circuit Court of Appeals U.S. District Court for the Eastern District of Louisiana