732 F.

2d 1543
1984 A.M.C. 2113

SCHIFFAHARTSGESELLSCHAFT LEONHARDT & CO.,

Plaintiff-Appellant,
v.
A. BOTTACCHI S.A. DE NAVEGACION, DefendantAppellee.
No. 83-8019.

United States Court of Appeals,

Eleventh Circuit.
May 29, 1984.
Rehearing En Banc Granted Sept. 21, 1984.

Robert S. Glenn, Jr., Savannah, Ga., for plaintiff-appellant.

Lamar Walter, Savannah, Ga., for defendant-appellee.
Appeal from the United States District Court for the Southern District of
Georgia.
Before TJOFLAT and HILL, Circuit Judges, and LYNNE* , District
Judge.
LYNNE, District Judge:
This appeal involves the chameleon-like concept of procedural due
process. While recent Supreme Court discussions on the subject are
devoted to common law garnishment, attachment, and sequestration
actions, the court below dealt with Supplemental Rule for Admiralty B(1),
Federal Rules of Civil Procedure, which authorizes the attachment of
maritime property to obtain jurisdiction over a foreign defendant. In this
instance, the appellant, Schiffahrtsgesellschaft, attached an Argentine
vessel, the M/V Puntas Malvinas, purportedly belonging to the appellee,
Bottacchi, when it docked at Savannah, Georgia, on May 24, 1982.
Consonant with Rule B(1)'s usual application, the appellant sought
jurisdiction over Bottacchi to adjudicate a prior dispute wholly unrelated

to the port of Savannah or the vessel attached. Its ultimate goal is to

enforce the terms of a New York Produce Exchange Charter Party dated
March 16, 1982. Under that agreement, Bottacchi time-chartered one of
the appellant's own vessels, the M/V Barbara Leonhardt, to deliver goods
from St. John's, Canada, to Buenos Aires, Argentina. Heavy weather en
route resulted in damage both to cargo and vessel. Upon arrival, Bottacchi
refused either to post counter-security for damages or submit to arbitration
in accordance with the charter party. Obtaining jurisdiction over Bottacchi
is appellant's only means of enforcing these two contractual provisions.
The attachment of the M/V Puntas Malvinas was erroneous. According to
documents presented by counsel the following day, Bottacchi did not own
the vessel. It instead operated the boat under a bareboat charter and
therefore only owned certain bunkers and stores aboard. The appellant's
attempt at attachment, though flawed, was by no means unfounded. It
initiated process only after consulting the most recent supplement to the
Lloyd's Register of Shipping, which listed Bottacchi as the vessel's owner.
The appellant immediately released the vessel and narrowed its action to
the limited items owned by the appellee. In each instance, the clerk of the
court reviewed the pleadings without judicial assistance. He ordered the
Marshal to initiate process based upon the complaint and an affidavit,
upon information and belief, that the appellee could not be found within
the district. The Marshal, though not required to do so, notified the ship's
agent of the impending attachments. Bottacchi obtained immediate release
of the property after posting security pursuant to Supplemental Rule for
Admiralty E(5). Judge Anthony A. Alaimo granted a post-seizure hearing
the following day, at which time Bottacchi assailed the constitutionality of
Rule B(1). The parties then filed briefs on the issue and appeared before
Judge B. Avant Edenfield on July 22, 1982.
Based on the agent's prior notice of seizure and the hearing conducted by
Judge Alaimo, the court declared that Rule B(1), as applied, did not
violate procedural due process. It went on to hold, however, that on its
face Rule B(1) violates procedural due process guarantees on two
grounds: (1) failure to provide procedural safeguards in place of preseizure notice and hearing; (2) failure to require a prompt post-attachment
hearing. Schiffahrtsgesellschaft v. A. Bottacchi S.A. De Navegacion, 552
F.Supp. 771 (S.D.Ga.1982).
Procedural Due Process Inherently Flexible
Due process, in its original form, requires that a property owner be given

notice and an opportunity to be heard prior in time to the seizure of his

possessions. Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306,
313-316, 70 S.Ct. 652, 656-58, 94 L.Ed. 865 (1950). However, the
Supreme Court embarked on a four case dialogue on modern day
procedural due process in Sniadach v. Family Finance Corp., 395 U.S.
337, 89 S.Ct. 1820, 23 L.Ed.2d 349 (1969). See Fuentes v. Shevin, 407
U.S. 67, 92 S.Ct. 1983, 32 L.Ed.2d 556 (1972); Mitchell v. W.T. Grant
Co., 416 U.S. 600, 94 S.Ct. 1895, 40 L.Ed.2d 406 (1974); North Georgia
Finishing, Inc. v. Di-Chem, Inc., 419 U.S. 601, 95 S.Ct. 719, 42 L.Ed.2d
751 (1974). While retaining many former views, the Court acknowledged
that prior notice could undermine the desired end of seizure in cases where
the property is susceptible to ready disposal, concealment, or removal
from the jurisdiction.1 Mitchell, 416 U.S. at 610, 94 S.Ct. at 1901.
Accordingly, the opportunity to be heard may be delayed until
immediately following the seizure if "other procedural safeguards" are
imposed during initiation of the process leading to seizure. These
safeguards include: (1) posting of bond by the plaintiff prior to execution;
(2) particularized factual showings in the pleadings indicating entitlement
to relief, (3) judicial review of the pleadings and authorization of
proceedings. Id. at 605-06, 616-18, 94 S.Ct. at 1904-05. See also Polar
Shipping, Ltd. v. Oriental Shipping Corp., 680 F.2d 627, 643-44 (9th
Cir.1982).
None of these safeguards, which are intended to compensate for the
bypassed pre-seizure hearing, surrounded the attachment of the Puntas
Malvinas. Additionally, as emphasized by the court below, Rule B(1) does
not explicitly provide for either prior notice or a hearing of any kind.
These latter deficiencies, however, are not germane to the current dispute.
Bottacchi undisputedly received prior notice and a prompt, subsequent
opportunity to be heard. The lower court, therefore, opened Pandora's box
by isolating its examination of Rule B(1) from the facts. At the same time,
its unfortunate statement that Rule B(1) is constitutional, as applied, is
rendered a non-sequitur by the disclosure that other safeguards were not
applied to the attachment proceeding.2
Nevertheless, the awkward approach below helps define the very narrow
issue before this court: must an attachment of maritime property under
Supplemental Rule B(1) for Admiralty be cloaked with the other
procedural safeguards found essential in actions peculiar to the common
law?
We think not. Here we are confronted not with legislation regulating
procedure in land-based commercial transactions, but with a procedural

rule promulgated by the Supreme Court providing for the attachment of

maritime vessels, primarily for jurisdictional purposes.
Above all else, Sniadach and its progeny affirm that flexibility remains
the most significant trait of procedural due process. In Mitchell, the Court
reiterated its view that "the very nature of due process negates any concept
of inflexible procedures universally applicable to every imaginable
situation." 416 U.S. at 610, 94 S.Ct. at 1901 (quoting Cafeteria Workers v.
McElroy, 367 U.S. 886, 895, 81 S.Ct. 1743, 1748, 6 L.Ed.2d 1230
(1969)). Earlier, it found a garnishment of wages procedurally deficient
only after balancing the creditor's desire to collect against the debtor's
deprivation of income. Sniadach, 395 U.S. at 339, 89 S.Ct. at 1821.
Justice White's finding of a "constitutional accommodation of the
conflicting interests of the parties," Mitchell, 416 U.S. at 610, 94 S.Ct. at
1901 (majority opinion), harks back to an approach suggested years
earlier for procedural due process cases:
Due process is not a mechanical concept. It is not a yardstick. It is a
process. It is a delicate process of adjustment inescapably involving the
exercise of judgment...
Joint Anit-Fascist Refugee Committee v. McGrath, 341 U.S. 123, 162-63,
71 S.Ct. 624, 643-44, 95 L.Ed. 817 (1951) (Frankfurter, J., concurring).
The Supreme Court's continued recognition of this attribute clearly
transcends whatever factual limitations these recent cases otherwise
suggest.
Paradoxically, the most immutable characteristic of procedural due
process is that it constantly changes. To impose specific procedures found
essential in drastically different fact situations, as the lower court did,
ignores the one precept that insulates procedural due process, like all other
constitutional doctrines, from susceptibility to black letter law
formulation. Accordingly, constitutional review of Rule B attachments is
not governed by the unyielding guidelines promulgated in Sniadach and
cases which followed. That approach simply does not hold water in the
context of maritime commerce.
Rule B Ground In Legal, Historical, and Practical Differences
We are not alone in withholding application of procedural due process
guidelines established in other contexts to admiralty rules of procedure.
The Ninth Circuit, as yet the only appellate court to address the issue, has
already rejected constitutional attack on Rule B attachments.3 Polar

Shipping, Ltd. v. Oriental Shipping Corp., 680 F.2d 627 (9th Cir.1982).
The Fourth and Fifth Circuits seized upon the flexible nature of
procedural due process to uphold the constitutionality of arrests of
property pursuant to Rule C. Amstar Corp. v. S/S Alexandros T., 664 F.2d
904 (4th Cir.1981); Merchants National Bank v. General G.L. Gilespie,
663 F.2d 1338 (5th Cir.1981).
Those decisions attack head on the complex question of the two Rule's
facial constitutionality.4 Each court relied upon the distinct legal
foundation of admiralty law, the historical application of the two
procedures, and the transient nature of maritime property to scrutinize the
procedural safeguards of Rules B and C under more lenient standards.
While this court is concerned only with the absence of other procedural
safeguards, we nonetheless find their analytical approach persuasive.
The framers considered admiralty jurisdiction so significant that they
awarded Federal Courts the power to sit in Admiralty under a separate
constitutional delegation. U.S. Const., art. III, Sec. 2. The concept did not
originate, however, with American jurisprudence. "Admiralty courts have
been found necessary in all commercial countries, for the safety and
convenience of commerce ..." In re Louisville Underwriters, 134 U.S. 488,
493, 10 S.Ct. 587, 589, 33 L.Ed. 991 (1890). The concerns of Admiralty
obviously reach matters far removed from the common law.
The legacy of admiralty's legal heritage is the deep-rooted historical basis
surrounding its procedural rules. Maritime attachments, dating back to our
nation's fledgling days, preceded the promulgation of specific admiralty
rules. Manro v. Almeida, 23 U.S. (10 Wheat.) 473, 6 L.Ed. 369 (1825).
Congress authorized the Supreme Court to develop such rules in 1792. It
reiterated the peculiar nature of admiralty law and instructed adherence to
rules and usages of admiralty rather than those of common law courts.
Amstar, 664 F.2d at 908. Rule B is a sterling example of the Court's
respect for that advice. Its focus has changed little in 140 years. The
practice was officially codified in 1844, and refined in 1920, as Admiralty
Rule 2. With the addition of admiralty procedure as supplemental rules to
the Federal Rules of Civil Procedure, it became Supplemental Rule B in
1966. According to the Advisory Committee charged with unifying
admiralty and civil procedure, Rule B merely restates the traditional 19th
Century attachment method. 7A J. Moore, Moore's Federal Practice Sec.
B.01 at B-12, 2d ed. (1981).5
Rule B's practical effect constitutes the most persuasive prong of this
analytical approach. Traditional procedural due process analysis does not

take place in a vacuum; relevant commercial and legal considerations

provide the backdrop for review. Merchants, 663 F.2d at 1343.6 In this
regard, a ship's ability to dock, unload cargo, and fill its hold with goods
intended for another destination--all within 24 hours--imposes tremendous
pressure on creditors desiring to attach a vessel or property located aboard.
"A ship may be here today and gone tomorrow...." Polar Shipping, 680
F.2d at 637. Worse yet, as the ship sails, so does the debtor.7 The
frustrated creditor, much like Evangeline,8 the poor Acadian girl separated
from her lover, is tragically left to roam the shores awaiting the debtor's
next arrival.
Rule B is the harbinger of more happy endings. Its personal jurisdiction
objective, unswervingly adhered to since this nation's origin, Manro v.
Almeida, 23 U.S. at 487, 6 L.Ed. at 369, takes on added viability in the
admiralty context. Merchants were long ago described as "shrewd, careful,
familiar with the forms of business ... watchful [of] their own interests."
The David Pratt, F.Cas. No. 3597 (D.C.Me.1839). Little has changed
today. They rush to fly the nouveau flags of legal and financial safe
harbors such as Liberia, Panama, and Argentina. Intricate corporate shells
are employed to disguise the ownership of shipping assets. Inter-American
Shipping Enterprises, Ltd. v. Turbine Tanker T.U.L.A., 1982 A.M.C. 951
(Ed. Va.1981). It is reputed that they participate in petroleum black
markets and willfully destroy outmoded, overinsured vessels.
In this atmosphere, Rule B restores order and attempts to protect the
creditor's rights. It draws debtors from otherwise impenetrable fortresses.
It commands a speedy clarification of vital facts underlying both prior
disputes and the current seizure. It compels adjudication. Polar Shipping,
680 F.2d at 629-30. Otherwise, pursuit of such unresolvable disputes, as
the Court long ago acknowledged, "would in many cases amount to a
denial of justice." In re Louisville Underwriters, 134 U.S. at 493, 10 S.Ct.
at 589.
Other Safeguards Unnecessary Under Rule B
Satisfied that the circumstances overwhelmingly support a lenient review
of Rule B's procedural guidelines, we turn to its silence as to other
procedural safeguards. The three alleged shortcomings are the failure to
require: (1) posting of bond by the plaintiff; (2) complaints, stated with
particularity, based upon personal knowledge, and (3) prior judicial
evaluation of the claim. In rejecting these contentions, the wisdom of
taking cognizance of Rule B's historical, legal, and practical differences
becomes evident.

First, while the plaintiff need not post bond prior to execution,
Supplemental Rule E(7) arms the defendant with the power to compel
bond on any counterclaim it files. Additionally, provision (2) of Rule E
enables the defendant to recover its costs in defending a wrongfully
instituted attachment proceeding. These protective measures preclude the
necessity of this safeguard.
Second, the sufficiency of the complaint cannot be seriously questioned.
Admiralty Rule E(2)(a), which parallels F.R.C.P. Rule 8(a), requires the
complaint to state factual circumstances with enough particularity to
enable formulation of a response. Admittedly, attorneys in these cases
often rely on the hearsay statements of others. Grand Bahamas, 450
F.Supp. at 458. This criticism ignores the transient nature of the property
and the jurisdictional goals involved. It would be unduly burdensome to
impose rigid pleading technicalities when the creditor and its attorneys
have only 24 hours--the time in which a ship may get in and out of port--to
communicate the facts to each other and then hurriedly contact local
counsel.
The lower court conceded this point; it instead criticized the information
and belief standard, which governs the attorney's affidavit that the
defendant cannot be found in the district, as meaningless. It is rare,
however, that a foreign shipper will be found in the district due to the
global nature of maritime shipping and modern communication
technology. The growth of P & I (Protection and Indemnity) Clubs, with
correspondents in every port of call, eliminates the need for a ship owner's
direct involvement in local disputes. Furthermore, a debtor residing in the
district will likely have an office in the port city. Attorneys operating
under the information and belief approach are unquestionably required to
undertake a telephone or city directory search.
Third, the policy considerations prompting endorsement of judicial
participation do not apply in factually confusing admiralty disputes arising
out of occurrences on the high seas or in other parts of the globe. Its
usefulness is limited to screening claims whose validity can be discerned
from examining purchase contracts and credit agreements. To impose this
requirement blindly would only produce "more legal boiler plate." Polar
Shipping, 680 F.2d at 639. We likewise agree with the refreshing
comments of another court recently addressing this issue:
It would be unfortunate, indeed, if for the sake of theoretical uniformity
standardized concepts of procedural due process were compelled to be
followed in and superimposed on all cases including admiralty.

Parcel Tankers, Inc. v. Formosa Plastics Corp., 569 F.Supp. 1459, 1465
(S.D.Tex.1983).
The Fifth Circuit, in rejecting arguments for judicial participation under
Rule C, questioned a judge's or magistrate's ability to review complicated
transactions and instantaneously determine the ultimate enforceability of a
maritime lien. It focused upon the lienor's due process rights,9 noting that
denial of a seizure would in essence dispose of the claim without trial.
Merchants, 663 F.2d at 1344. This rationale applies with equal force to
Rule B, which injects far more confusing facts since the claims are based
on prior disputes occurring in other jurisdictions. The erroneous
attachment in the present dispute is instructive on the issue of meaningful
judicial participation. Since the appellant proceeded pursuant to
information contained in Lloyd's Register, the intervening change in
ownership would not have been brought out in an ex parte proceeding.
CONCLUSION
Since 1844 Admiralty Rules of Procedure have had but one author: the
United States Supreme Court. Their lineage sets them apart from common
law based sequestration, garnishment, and attachment laws developed by
the legislatures of the several states. As offspring of the very institution
charged with mandating the procedural safeguards required before
property may be taken, Supplemental Rules for Admiralty must be
reviewed with special deference.
Because it is clear beyond peradventure that appellee was accorded the
procedural due process to which it was entitled, the lower court
erroneously proceeded to a determination of the facial constitutionality of
Rule B(1). Accordingly, its judgment is:
REVERSED and REMANDED.

Honorable Seybourn H. Lynne, U.S. District Judge for the Northern District of
Alabama, sitting by designation

Maritime property falls comfortably within this exception

The court's extended focus on the critical absence of the three safeguards leads
us to believe it did not mean what it said. Schiffahrtsgesellschaft, 552 F.Supp.
at 782-83

The lower court's well researched opinion sets out the numerous district court
decisions on the subject, concluding that the majority support Rule B in its
present form. Schiffahrtsgesellschaft, 552 F.Supp. 778

Those courts addressed the failure of Rules B and C to require either notice of
any kind or a guaranteed prompt, post attachment hearing, as well as the
necessity of additional safeguards. Our review is much more limited by
comparison

In Grand Bahama Petroleum Co., Ltd. v. Canadian Transp., Ltd., 450 F.Supp.
447 (W.D.Wash.1978), the seminal case denying the constitutionality of Rule
B, the court asserted the rule has changed significantly since adoption of the
Constitution. The two proferred grounds: (1) the defendant's presence in the
district was originally determined by a marshal; (2) attachment issued on the
strength of a court order. Id. at 459. We will deal with these contentions
shortly. For the present, it serves our purposes to note that the court conceded
the procedures have not changed since being streamlined in 1825. Id

We are mindful that the Supreme Court, in its most recent review of procedural
due process, concluded:
We are no more inclined now than we have been in the past to distinguish
different kinds of property in applying the due process clause. North Georgia
Finishing, 419 U.S. at 608, 95 S.Ct. at 723.
In our view, this admonition merely prohibits superficial distinctions between
corporate, consumer, and other types of property. It does not, however, preclude
meaningful review of a property's susceptibility to destruction, removal, or
transfer, characteristics consistently given careful attention by the Court in
evaluating a creditor's security interest. See, e.g., Fuentes, 407 U.S. at 93, 92
S.Ct. at 1983.

Significantly, creditors in common law actions can still avail themselves of in

personam causes of action. Cf. Sniadach, 395 U.S. at 339, 89 S.Ct. at 1821. We
take note of our inability to extend similar consolation to the appellant in this
case

Longfellow, "Evangeline, A Tale of Acadie," (1843)

This concern is a natural by-product of a truly flexible approach. It comports

with the Supreme Court's realistic assessment of such disputes:
[We] must take into account not only the interests of the buyer of the property
but those of the seller as well.

Mitchell, 416 U.S. at 604, 94 S.Ct. at 1898.