EDITH H. JONES, Chief Judge:
Alphamate Commodity GMBH sought and obtained a Rule B maritime attachment in New Orleans, Louisiana, on a shipment of corn that had been loaded on the M/V GOLDEN STAR bound for Green Valley for Animal Feed Libya ("AFL")
We hold that the district court lacked maritime jurisdiction over the dispute between AFL and Alphamate. Their contracts for sales of grain are not wholly maritime, nor are the demurrage and detention charges suffered by Alphamate severable from the alleged breaches of their sales contracts. The court did not have the power to issue a Rule B maritime attachment. Therefore, the judgment is vacated and the case remanded for further proceedings.
Alphamate is a German international grain merchant. AFL, a Libyan company, entered three contracts with Alphamate to purchase grain from Europe. AFL failed to issue timely and satisfactory letters of credit as required by their contracts and, as a result of AFL's failure to complete its purchases, Alphamate claimed approximately $8 million in damages, including $3 million in demurrage charges and $1 million in unpaid detention. Alphamate has been arbitrating these contractual disputes with AFL at the Grain and Feed Trade Association ("GAFTA") based in London.
In an attempt to recover its losses, Alphamate sought a Rule B maritime attachment against a shipment of corn aboard the M/V GOLDEN STAR berthed in Louisiana. The corn was being sold by CHS to AFL pursuant to an independent contract. While the Rule B attachment proceeding was pending in district court, AFL had not paid CHS, nor had CHS received a bill of lading.
On July 18, 2009, the district court approved Alphamate's ex parte application and issued the writ of attachment. On July 21, Appellees moved to intervene, asserting that because title had not transferred to AFL and they remained the rightful owners of the corn, Alphamate had no right to attach Appellees' property. On July 23, Alphamate posted a corporate surety bond for $250,000 as security for costs. On July 27, the district court held a Rule E(4)(f) hearing and concluded that CHS retained title to the corn:
The M/V GOLDEN STAR left port and presumably delivered the corn to AFL in Africa. Alphamate's appeal to this court dwells on whether title to the corn had passed to AFL under English law after it was loaded on the vessel. Appellees, however, raise threshold mootness and jurisdictional issues that we must discuss first.
As an initial matter, Appellees assert that the case is moot because the corn has been transported outside the jurisdiction and Alphamate has no claim against the Appellees personally. We review mootness de novo. Envtl. Conservation Org. v. City of Dallas, 529 F.3d 519, 524-25 (5th Cir.2008). An appellate court normally retains jurisdiction over an in rem or quasi in rem dispute even if the property in question leaves the jurisdiction. Republic Nat. Bank of Miami v. United States, 506 U.S. 80, 87-88, 113 S.Ct. 554, 121 L.Ed.2d 474 (1992). Appellate courts retain jurisdiction "in any case where the judgment will have any effect whatever." Id. at 85, 113 S.Ct. 554 (citing United States v. The Little Charles, 26 F.Cas. 979 (C.C.D.Va.1818) (No. 15,612))
Here, Alphamate posted a $250,000 bond as security against any charges, including demurrage and detention charges CHS owed to the M/V GOLDEN STAR, that might be imposed by the court in the event the attachment was unsuccessful. Appellees are seeking such damages in the district court. Which party receives the benefit of the security is an issue that renders the case still a live controversy.
Appellees also contend that federal admiralty jurisdiction is lacking because the underlying dispute between AFL and Alphamate is not maritime. Consequently, Alphamate could not assert a prima facie admiralty claim against the defendant.
Alphamate's dispute with AFL arises from three contracts for the sale of grain.
First, Alphamate does not dispute that the primary subject matter of the Alphamate-AFL contracts is the sale of grain. Sea transport is incidental to accomplishing that purpose. The sale contract here is not maritime in toto. A maritime contract is one in which the "primary objective is to accomplish the transportation of goods by sea...." Norfolk Southern Ry. Co. v. Kirby, 543 U.S. 14, 24, 125 S.Ct. 385, 160 L.Ed.2d 283 (2004). "It is well-established that such a sale of goods by itself would not be `maritime' merely because the seller agrees to ship the goods by sea to the buyer." Lucky-Goldstar Int'l (America) Inc. v. Phibro Energy Int'l Ltd., 958 F.2d 58, 59 (5th Cir.1992) (internal citation omitted). As summarized in a leading treatise:
1 BENEDICT ON ADMIRALTY § 182 (2010) (emphasis added). A contrary rule would expand admiralty jurisdiction to include nearly every contract involving the sale of goods transported by ship. Luckenbach S.S. Co. v. Gano Moore Co., 298 F. 343, 344 (S.D.N.Y.1923) (Hand, J.), rev'd on other grounds, 298 F. 344 (S.D.N.Y.1924).
Second, although Alphamate concedes that the contracts are essentially for the sale of goods, it argues that they are "mixed" contracts containing both maritime and non-maritime elements. A mixed contract may create maritime jurisdiction in only two limited circumstances. Lucky-Goldstar, 958 F.2d at 59. The court may consider a mixed contract maritime if the contract is primarily maritime and the non-maritime elements of the contract are incidental to that primary purpose. Id. That is not the case here. Alternatively, "if a contract's maritime obligations are separable from its non-maritime aspects and can be tried separately without prejudice to the other, admiralty jurisdiction will support trial of the maritime obligations." Id. Alphamate contends its demurrage and detention claims are severable maritime obligations.
Demurrage fees are paid by a charterer to the vessel owner when the vessel is detained beyond the specified date agreed to in the charter party contract. This situation typically arises when the charterer fails to load or unload cargo within the agreed time. See BLACK'S LAW DICTIONARY 465 (8th ed. 2004). Some courts have held that demurrage claims are separable from sales of good contracts and may be litigated as admiralty claims. In those cases, the parties' contract created an independent obligation to pay for demurrage, or demurrage was the sole basis of the claim. See, e.g., Crossbow Cement SA v. Mohamed Ali Saleh Ali-Hashedi & Bros., No. 08-5074, 2008 WL 5101180, at *5-*7 (S.D.N.Y. Dec. 4, 2008) (severing a demurrage maritime claim from a sale of goods contract because the contract created an independent obligation for demurrage charges); Centramet Trading S.A. v. Egyptian American Steel Rolling Co., No. 07-6379, 2007 WL 5731922, at *1 (S.D.N.Y. Sept. 28, 2007) (same); Kulberg Finances Inc. v. Spark Trading D.M.C.C., 628 F.Supp.2d 510, 517-18 (S.D.N.Y.2009).
Alphamate did not present a prima facie admiralty claim to undergird its Rule B attachment motion. As the contractual dispute between AFL and Alphamate was not maritime in whole or in severable part, the district court lacked admiralty jurisdiction. The district court's judgment on the merits must be VACATED and the case REMANDED for further proceedings consistent herewith.
VACATED and REMANDED.