STX Panocean (UK) Co., Ltd. v. Glory Wealth Shipping Pte Ltd. et al. (08-6131-cv)

On March 19, 2009, the Second Circuit, the federal appeals court that covers New York City, issued a landmark opinion for potential Rule B defendants in STX Panocean (UK) Co., Ltd. v. Glory Wealth Shipping Pte Ltd. et al. (08-6131-cv). In the opinion, the Court made clear that registration to do business in New York, pursuant to New York Business Corporation Law § 1304, and designation of an agent for service of process within the district constitutes being “found” within the district for purposes of Rule B.

In order to obtain a Rule B maritime attachment, a plaintiff must first demonstrate that the defendant cannot be “found” within the district. Thus, the Second Circuit’s ruling provides that potential defendants to maritime claims who elect to qualify to do business in New York, and appoint an agent for service of process within Manhattan, will effectively insulate themselves from future Rule B claims. This is a simple and relatively inexpensive process. Potential defendant should, of course, carefully consider the implications of qualifying to do business in New York, as there may be tax consequences, and a defendant subject to jurisdiction in New York may be sued here generally.