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Ruslan Shipping Corp. v. Coscol Petroleum Corp.


decided: December 12, 1980.


Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 80-C-456 -- Prentice H. Marshall, Judge .

Before Wood and Cudahy, Circuit Judges, and Campbell, Senior District Judge.*fn*

Author: Cudahy

The issue before us is whether the district court properly vacated the writ of maritime attachment and garnishment obtained by plaintiff-appellant Ruslan Shipping Corporation ("Ruslan") against funds of defendant-appellee Coscol Petroleum Corporation ("Coscol") on deposit at the Continental Illinois National Bank and Trust Company of Chicago ("Continental"). We believe the district court, in deciding the controversy, prematurely determined that the attachment procedure set forth in Rule B(1) of the Supplemental Rules of Federal Civil Procedure for Certain Admiralty and Maritime Claims ("Supplemental Rules") is unconstitutional. We therefore vacate and remand for consideration of Coscol's nonconstitutional claims.


Pursuant to a tanker voyage charter party dated December 3, 1979 (the "Charter"), Ruslan carried a cargo of "(c)rude and/or dirty petroleum products" for Coscol from Es Sider and Zueitina, Libya to Nederland, Texas. Upon arrival at the port of destination, however, Ruslan's vessel, the T.T. Agios Ioannis, was unable to discharge 19,082 barrels of liquid from nine of the eleven cargo tanks that carried the crude oil loaded at Zueitina.*fn1

Coscol claimed that the liquid remaining in the tanks was Zueitina crude oil that would have been discharged but for defective pumps on the T.T. Agios Ioannis. Coscol determined that the Zueitina crude remaining on board plus freight from Zueitina to Nederland had a value of $742,321.79. Coscol therefore deducted this amount from the total freight due under the Charter pursuant to the Charter's "Amoco Cargo Retention Clause," which provides:

In the event that any cargo remains on board upon completion of discharge, Charterer shall have the right to deduct from freight an amount equal to the FOB port of loading value of such cargo plus freight due with respect thereto, provided that the volume of cargo remaining on board is pumpable as determined by an independent surveyor. Any action or lack of action in accordance with this provision shall be without prejudice to any rights or obligations of the parties.

Ruslan, however, maintained that Coscol's retention of freight under the Amoco Retention Clause was improper, since the cargo that remained on board the T.T. Agios Ioannis was, in its view, "unpumpable." After unsuccessfully urging Coscol to place the withheld freight in an interest-bearing account (rather than paying it to Vickers Petroleum Corporation, the apparent owner of the undischarged Zueitina crude oil) pending arbitration of the dispute,*fn2 Ruslan filed a complaint in the district court on January 28, 1980, for freight and demurrage allegedly due under the Charter which, in the aggregate totalled $1,067,465.11. The verified complaint, which set forth a maritime claim within the meaning of Supplemental Rule 9(h), stated that Coscol could not be found within the Northern District of Illinois. Therefore, pursuant to Ruslan's request under Supplemental Rule B(1),*fn3 the deputy clerk of the United States District Court for the Northern District of Illinois issued a summons and process of maritime attachment and garnishment directing the United States Marshall to:

Attach Defendant's debts, credits and effects to the amount sued for in the hands of the garnishee named in the Complaint, specifically:

Continental Illinois National Bank & Trust Company of Chicago

231 South LaSalle Street

Chicago, Illinois 60604.

This writ was served on Continental on January 28, 1980, resulting in attachments of Coscol's funds on deposit in the amount of $999,090.45. After learning of this attachment, Coscol moved under Rule 14 of the United States District Court for the Northern District of Illinois Admiralty Rules ("Local Rule 14")*fn4 to "vacate instanter the summons and process of maritime attachment and garnishment." Coscol also filed an answer and counterclaims for alleged short delivery and "in transit losses" totalling $1,017,321.79.

On February 6, 1980, the district court granted Coscol's motion to vacate the summons and process of maritime attachment and garnishment. The district court did not issue a written opinion setting forth the reasons for its decision but instead held (according to the transcript of its remarks) that the attachment procedure set forth in Supplemental Rule B(1) violated defendant's procedural due process rights under the Fifth Amendment to the United States Constitution.*fn5


The great gravity and delicacy of constitutional decision-making counsels that federal courts abjure constitutional rulings where a "dispositive nonconstitutional ground is available." Hagans v. Lavine, 415 U.S. 528, 547, 94 S. Ct. 1372, 1384, 39 L. Ed. 2d 577 (1973).

"If there is one doctrine more deeply rooted than any other in the process of constitutional adjudication, it is that we ought not to pass on questions of constitutionality ... unless such adjudication is unavoidable.' Before deciding the constitutional question it (is) incumbent on (the district court and court of appeals) to consider whether the statutory grounds might be dispositive.

New York City Transit Authority v. Beazer, 440 U.S. 568, 582, 99 S. Ct. 1355, 1363, 59 L. Ed. 2d 587 (1979) (citation omitted). See also City of Mobile v. Bolden, 446 U.S. 55, 100 S. Ct. 1490, 1496, 64 L. Ed. 2d 47 (1980); Califano v. Yamasaki, 442 U.S. 682, 692, 99 S. Ct. 2545, 2553, 61 L. Ed. 2d 176 (1979); Ashwander v. TVA, 297 U.S. 288, 345-47, 56 S. Ct. 466, 482-83, 80 L. Ed. 688 (1936) (Brandeis, J., concurring).

Although Coscol relied on both Local Rule 14 and procedural due process analysis in support of its motion to vacate the attachment, the district court focused only on the latter. While it may be acceptable for a court to disregard a nonconstitutional claim if it is clear that it would not constitute substantial grounds for vindicating the claimant's position, see City of Mobile v. Bolden, supra, 100 S. Ct. at 1496; Mayor of Philadelphia v. Educational Equality League, 415 U.S. 605, 628-29, 94 S. Ct. 1323, 1337, 39 L. Ed. 2d 630 (1974), we believe here that Coscol's claims under Local Rule 14 are sufficiently substantial*fn6 to merit consideration before deciding the constitutional question.*fn7 Indeed, Local Rule 14 seems to confront several objections which are as weighty as those which otherwise might demand constitutional disposition. It is significant that an equivalent of Local Rule 14 was not available to Judge Beeks for alternative consideration in the leading determination of unconstitutionality of Supplemental Rule B(1). Grand Bahama Petroleum Co., Ltd. v. Canadian Transportation Agencies, Ltd., 450 F. Supp. 447, 458 (W.D.Wash.1978).

Having determined that the claim under Local Rule 14 should be adjudicated, we are faced with two alternatives. We can either decide the question on the record before us, requesting additional briefing if necessary, see New York City Transit Authority v. Beazer, supra, 440 U.S. at 583 n.24, 99 S. Ct. at 1364 n.24; Regents of the University of California v. Bakke, 438 U.S. 265, 281, 98 S. Ct. 2733, 2743, 57 L. Ed. 2d 750 (1978), or we can remand for initial consideration of the issue by the district court, see Massachusetts v. Westcott, 431 U.S. 322, 97 S. Ct. 1755, 52 L. Ed. 2d 349 (1977); Clay v. Sun Insurance Office, Ltd., 363 U.S. 207, 80 S. Ct. 1222, 4 L. Ed. 2d 1170 (1960); Beeson v. Hudson, 630 F.2d 622, 627 (8th Cir. Sept. 17, 1980).

The district court is best equipped to make the factual determinations necessary to establish the merit of Coscol's Local Rule 14 claims. We therefore vacate the judgment (subject to any interim arrangements deemed appropriate by the district court to preserve the status quo*fn8 pending its further decision) and remand for consideration of the nonconstitutional claims and for further proceedings consistent with this opinion.*fn9 Each party is to bear its own costs.

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