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Marisco, Ltd., A Hawaii Corporation v. American Samoa Government

October 5, 2012

MARISCO, LTD., A HAWAII CORPORATION, PLAINTIFF,
v.
AMERICAN SAMOA GOVERNMENT, DEFENDANT AND THIRD-PARTY PLAINTIFF,
v.
TERRY R. CONDEN, THIRD-PARTY DEFENDANT.



The opinion of the court was delivered by: Leslie E. Kobayashi United States District Judge

ORDER GRANTING IN PART AND DENYING IN PART GARNISHEE BANK OF HAWAII'S MOTION FOR INTERPLEADER

Before the Court is Garnishee Bank of Hawaii's ("BOH") Motion for Interpleader ("Motion"), filed on September 17, 2012. [Dkt. no. 142.] On September 24, 2012, Plaintiff/Counterclaim Defendant Marisco, Limited ("Marisco") filed its statement of position, and Defendant/Counter Claimant/Third Party Plaintiff American Samoa Government ("ASG") filed its memorandum in opposition. [Dkt. no. 154, 155.] This matter came on for hearing on September 27, 2012. Appearing on behalf of BOH was Robert Marks, Esq., appearing on behalf of Marisco was Mark Desmarais, Esq., and appearing on behalf of ASG was Mark Hamilton, Esq. After careful consideration of the Motion, supporting and opposing memoranda, and the arguments of counsel, BOH's Motion is HEREBY GRANTED for the reasons set forth below.

BACKGROUND

The relevant background is set forth in this Court's Order Granting Marisco Ltd.'s Ex Parte Request for Order Directing Disbursement of Funds from Garnishee Bank of Hawai`i and Granting in Part and Denying in Part Bank of Hawaii's Motion for Instructions, filed August 23, 2012 ("Disbursement Order"), 2012 WL 3686088, which this Court incorporates by reference.

I. Motion

Since the filing of the Disbursement Order, ASG filed a Notice of Appeal from the Disbursement Order. [Dkt. no. 140.] On September 13, 2012, the High Court of American Samoa ("High Court") issued an order ("Reconsideration Order") denying BOH's motion for reconsideration of the Order Granting Motion for Preliminary Injunctive Relief in American Samoa Government v. Bank of Hawaii, et al., Trial Division, CA No. 29-12 ("ASG v. BOH"), which the High Court originally filed on July 11, 2012 ("Injunction Order"), and denying BOH's motion to stay the enforcement of the Injunction Order. [Motion, Exh. 2 (Injunction Order), Exh. 3 (Reconsideration Order).] BOH states that, in its reply memorandum in support of its motion to stay, it argued that the High Court should defer to this Court, particularly its Disbursement Order. The Reconsideration Order, however, does not mention the Disbursement Order. [Mem. in Supp. of Motion at 6.]

BOH states that ASG is aggressively trying to enforce the Injunction Order. ASG filed a motion in ASG v. BOH to enforce the Injunction Order. The High Court heard that motion at the same time as BOH's motion for reconsideration and BOH's motion to stay, but the High Court did not issue an order as to ASG's motion to enforce. ASG v. BOH will soon be set for trial on the issue of whether ASG is entitled to permanent injunctive relief. Both ASG and Marisco have demanded that BOH comply with the respective orders in their favor.*fn1 [Id. at 6-8; Motion, Exh. 6 (letter dated 9/14/12 to BOH's counsel in American Samoa from the Deputy Attorney General of American Samoa), Exh. 7 (email dated 9/14/12 to ASG's counsel from Marisco's counsel).]

In the instant Motion, BOH argues that it is a neutral stakeholder in this dispute and, through no fault of its own, it is subject to conflicting orders - this Court's Disbursement Order and the High Court's Injunction Order. It is impossible for BOH to comply with both orders, and BOH seeks the following relief:

1) interplead the funds in question,[*fn2 ] pursuant to such terms as this Court deems appropriate;

2) to restrain Marisco and ASG from instituting or prosecuting any proceedings in any court other than this one with respect to the disputed funds, and 3) for such further relief as this Court deems appropriate. [Mem. in Supp. of Motion at 3 (footnote omitted).] BOH argues that interpleader is appropriate because it is faced with double liability. It emphasizes that the interpleader rule and statutes are remedial in nature and are to be interpreted liberally. [Id. at 8-9.]

BOH argues that this Court should also enjoin overlapping lawsuits. Specifically, BOH wants to prevent Marisco, ASG, and ASG's Attorney General, Fepulea`i Arthur Ripley, Jr., who is a member of the bar of this district court, from pursuing further proceedings in another action to seek relief inconsistent with this Court's ruling. BOH contends that the Court has the authority to do so pursuant to the All Writs Act, 28 U.S.C. § 1651, 28 U.S.C. § 2361, and the Court's inherent powers. [Id. at 10-11; Motion at 3.] BOH argues that, in spite of ASG's appeal of the Disbursement Order, this Court has vcontinuing jurisdiction to rule on the instant Motion. [Mem. in Supp. of Motion at 2 n.1.]

II. Marisco's Position

In its position statement, Marisco first argues that

BOH should follow the Disbursement Order. Marisco, however, states that, in the alternative, it will reluctantly agree to the interpleader. Marisco asks this Court to order that the interpleader amount include all past and accrued interest, anticipated future interest, and at least $25,000.00 to be used for post-judgment attorneys' fees and costs, which this district court will determine at a future time. Marisco states that it will stipulate that it will not bring an action in another court regarding the interpleader funds. [Marisco's Statement at 2-3.]

Marisco argues that this Court has continuing jurisdiction to maintain the status quo between the parties pending the appeal of the Disbursement Order to protect the integrity of its judgments in general, specifically to protect its final judgment. Marisco emphasizes that BOH is not seeking to alter the status quo. [Id. at 3-4.]

III. ASG's Opposition

In its memorandum in opposition, ASG first argues that

this Court no longer has jurisdiction over the subject of the Disbursement Order because of the appeal. ASG argues that the Court only has jurisdiction over matters not involved in the appeal. ASG emphasizes that the appeal of the Disbursement Order contests whether this Court has jurisdiction over ASG's General Funds Account in the first instance, and ASG argues that this Court does not have continuing jurisdiction to hear issues premised on the same legal grounds as those on appeal. [Mem. in Opp. at 6-8.]

ASG argues that interpleader is not appropriate in this case because BOH is not acting like a neutral stakeholder. It is actually advocating Marisco's position. ASG emphasizes that Marisco has not sought to enforce the judgment in this case in the American Samoa courts, where the funds are domiciled. ASG therefore argues that Marisco is forum shopping. [Id. at 8-9.] ASG also argues that interpleader is not appropriate because interpleader is not for the purpose of resolving conflicts between courts. ASG therefore argues that the Motion does not meet the requirements of Fed. R. Civ. P. 22 and the governing statute. [Id. at 10-11.] ASG emphasizes that interpleader is not appropriate for those who have acted in bad faith to create the controversy. ASG argues that BOH has done so because it acted upon the Writ of Execution instead of seeking to quash it or filing an interpleader action in the High Court. [Id. at 13-14.]

ASG contends that BOH has cited no case law that would support a restraining order under the circumstances of this case.

ASG argues that a § 2361 injunction is an exception to the general rule barring federal injunctions of state court proceedings. ASG argues that a federal court should defer to proceedings that pre-date the interpleader. [Id. at 12.]

Finally, ASG emphasizes that BOH is still subject to claims in ASG v. BOH because BOH violated A.S.C.A. §§ 10.0601 and

43.1803(b). ASG also argues that "BOH has ignored a valid High Court order for over two months, an order that was issued a month before the Court issued its [Disbursement] Order. BOH created the controversy and the Court should not order an interpleader to relieve BOH of the situation it created." [Id. at 14.]

ASG therefore urges the Court to deny ...


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