14‐2752‐cv (L)
`Cedar Petrochemicals, Inc. v. Dongbu Hannong Chem. Co.
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`UNITED STATES COURT OF APPEALS
`FOR THE SECOND CIRCUIT
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`SUMMARY ORDER
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`RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A
`SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007 IS PERMITTED AND IS GOVERNED BY
`FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURTʹS LOCAL RULE 32.1.1.
`WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST
`CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE NOTATION
`ʺSUMMARY ORDERʺ). A PARTY CITING A SUMMARY ORDER MUST SERVE A COPY OF IT ON
`ANY PARTY NOT REPRESENTED BY COUNSEL.
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`At a stated term of the United States Court of Appeals for the Second
`Circuit, held at the Thurgood Marshall United States Courthouse, 40 Foley Square, in
`the City of New York, on the 15th day of October, two thousand fifteen.
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`PRESENT: DENNY CHIN,
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`CHRISTOPHER F. DRONEY,
`Circuit Judges.
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`KATHERINE B. FORREST,
`District Judge.*
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`‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐x
`CEDAR PETROCHEMICALS, INC.,
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`Plaintiff‐Appellant‐Cross‐Appellee,
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`14‐2752‐cv (Lead)
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`v.
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`14‐2890‐cv (XAP)
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`DONGBU HANNONG CHEMICAL CO., LTD.,
`Defendant‐Cross‐Claimant‐Appellee‐Cross‐Appellant,
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`KUMHO P&B CHEMICALS, INC.,
`Defendant‐Cross‐Defendant.
`‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐x
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`The Honorable Katherine B. Forrest, of the United States District Court for the Southern
`District of New York, sitting by designation.
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`Cedar Petrochemicals, Inc. v. Dongbu Hannong Chem. Co.
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`UNITED STATES COURT OF APPEALS
`FOR THE SECOND CIRCUIT
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`SUMMARY ORDER
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`
`
`
`
`
`RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A
`SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007 IS PERMITTED AND IS GOVERNED BY
`FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURTʹS LOCAL RULE 32.1.1.
`WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST
`CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE NOTATION
`ʺSUMMARY ORDERʺ). A PARTY CITING A SUMMARY ORDER MUST SERVE A COPY OF IT ON
`ANY PARTY NOT REPRESENTED BY COUNSEL.
`
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`At a stated term of the United States Court of Appeals for the Second
`Circuit, held at the Thurgood Marshall United States Courthouse, 40 Foley Square, in
`the City of New York, on the 15th day of October, two thousand fifteen.
`
`PRESENT: DENNY CHIN,
`
`
`CHRISTOPHER F. DRONEY,
`Circuit Judges.
`
`
`
`
`
`KATHERINE B. FORREST,
`District Judge.*
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`‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐x
`CEDAR PETROCHEMICALS, INC.,
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`Plaintiff‐Appellant‐Cross‐Appellee,
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`14‐2752‐cv (Lead)
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`v.
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`14‐2890‐cv (XAP)
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`DONGBU HANNONG CHEMICAL CO., LTD.,
`Defendant‐Cross‐Claimant‐Appellee‐Cross‐Appellant,
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`KUMHO P&B CHEMICALS, INC.,
`Defendant‐Cross‐Defendant.
`‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐x
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`The Honorable Katherine B. Forrest, of the United States District Court for the Southern
`District of New York, sitting by designation.
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`FOR PLAINTIFF‐APPELLANT:
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`FOR DEFENDANT‐APPELLEE:
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`JOHN T. LILLIS, Nathan T. Williams, Kennedy
`Lillis Schmidt & English, New York, New
`York.
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`ROBERT A. WEINER, Michael R.
`Huttenlocher, McDermott Will & Emery LLP,
`New York, New York.
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`Appeal from a judgment and order of the United States District Court for
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`the Southern District of New York (Nathan, J.).
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`UPON DUE CONSIDERATION, IT IS HEREBY ORDERED,
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`ADJUDGED, AND DECREED that the judgment and order of the district court are
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`AFFIRMED.
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`Appellant Cedar Petrochemicals, Inc. (ʺCedarʺ) appeals from the district
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`courtʹs entry of judgment, after a four‐day bench trial, in favor of Defendant Dongbu
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`Hannong Chemical Co., Ltd. (ʺDongbuʺ) and against Cedar, as well as from the district
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`courtʹs order denying Cedarʹs motion for reconsideration. We assume the partiesʹ
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`familiarity with the underlying facts, procedural history of the case, and issues on
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`appeal.
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`This suit arises from a May 17, 2005 contract between Cedar and Dongbu
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`for the sale of 2,000 metric tons of phenol, to be delivered F.O.B. Ulsan, Korea. On May
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`21, 2005, the phenol was loaded on Dongbuʹs nominated vessel, the Green Pioneer. On
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`May 24, 2005, the Green Pioneer arrived at Ulsan and the phenol was transferred to
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`Cedarʹs nominated vessel, the Bow Flora. The Bow Flora then set sail for Rotterdam.
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`‐ 2 ‐
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`On or about July 19, 2005 the Bow Flora arrived in Rotterdam and the quality of the
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`phenol was tested, revealing that the color was off‐specification. The test results
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`regarding the damaged phenol were provided to Ertisa, S.A. (ʺErtisaʺ), the ultimate
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`purchaser of the phenol, and Ertisa made a claim for the chemicals through its
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`insurance broker.
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`Cedar initially brought suit in Korean court against the owners and
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`operators of the Green Pioneer, as well as one of the phenol testing companies. After
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`withdrawing that action, Cedar brought the instant suit against Dongbu on May 24,
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`2006, alleging that Dongbu had delivered non‐conforming liquid phenol. The parties
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`agreed that to demonstrate liability, Cedar had to prove by a preponderance of the
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`evidence that the phenol was damaged before it was transferred to the Bow Flora.
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`Because the damage did not manifest itself ‐‐ despite the testing of samples in transit ‐‐
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`until it was offloaded in Rotterdam, Cedar argued what its expert called the ʺseedingʺ
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`theory of injury. According to this theory, the phenol was damaged, imperceptibly,
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`while still in Dongbuʹs control. That initial injury, via a slowly unfurling free radical
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`chain reaction, was finally detected as off‐specification phenol in Rotterdam.
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`The district court was not persuaded by the seeding theory, and by
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`Opinion dated October 21, 2013, following a bench trial, found that Cedar failed to
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`prove by a preponderance of the evidence that Dongbu breached its contract by
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`providing injured phenol.
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`‐ 3 ‐
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`On appeal, Cedar alleges that the district court (1) abused its discretion by
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`prohibiting Cedar from outlining its seeding theory of phenol injury in its post‐trial
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`memorandum and subsequently ruling against the seeding theory without the benefit
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`of the proposed briefing, (2) clearly erred in entering judgment in favor of Dongbu after
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`finding that Cedar failed to show that the phenol was already injured when delivered,
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`and (3) abused its discretion in declining to reach the merits of Cedarʹs motion for
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`reconsideration. On cross‐appeal, Dongbu contends that the district court abused its
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`discretion in declining to sanction Cedar for filing its motion for reconsideration.
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`1.
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`Post‐Trial Memorandum and Motion for Reconsideration
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`Cedar claims that the district court abused its discretion in prohibiting
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`them from explaining the seeding theory in Cedarʹs post‐trial memorandum. Cedar
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`further contends that the district court abused its discretion in deciding that the seeding
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`theory was contradicted by Cedarʹs own evidence, Cedar Exhibits 70A‐70P (the
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`ʺLiteratureʺ).
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`The district court, however, did not deny Cedar the opportunity to argue
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`its seeding theory. At the conclusion of the bench trial, the district court ordered the
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`parties to submit final proposed findings of fact and conclusions of law, as well as a
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`memorandum of law. Specifically, the district court asked that the proposed findings
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`and conclusions be keyed to the trial record and address the primary question of when
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`and where the phenol was damaged. And Cedar did, in fact, address the seeding
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`‐ 4 ‐
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`theory in its submissions. Additionally, though Cedar submitted direct testimony in
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`the form of declarations of its experts Martin East and John Minton, neither was able to
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`demonstrate at trial how the Literature supported the seeding theory.
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`2.
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`The Seeding Theory of Phenol Injury
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`Cedar argues that the district court clearly erred in holding that Cedar
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`failed to meet its burden in proving that the phenol was already injured upon delivery
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`by Dongbu. ʺIn reviewing a judgment entered after a bench trial, we accept the district
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`courtʹs findings of fact unless they are clearly erroneous.ʺ Ortho Pharm. Corp. v.
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`Cosprophar, Inc., 32 F.3d 690, 693 (2d Cir. 1994). The factfinderʹs choice between two
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`permissible views of the evidence cannot be clearly erroneous. Anderson v. City of
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`Bessemer City, N.C., 470 U.S. 564, 574 (1985).
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`Cedar argues that (1) the parties stipulated that phenol discolors
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`gradually, as opposed to rapidly or instantaneously as the district court found, (2) the
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`Literature supports the seeding theory, (3) the Literature illustrates that the phenol
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`could not have discolored rapidly or instantaneously due to the quantities of
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`contaminates, oxidizing agents, and catalysts, (4) Cedarʹs expert never actually
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`conceded that the Literature contradicted the seeding theory, (5) testimony on blending
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`supported the seeding theory, and (6) differences in the phenolʹs storage and carriage
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`conditions and sampling timing limited the ability of the quality‐inspection regime to
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`‐ 5 ‐
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`generate the kind of data the district court suggested would be consistent with the
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`seeding theory.
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` We have conducted an independent review of the record and conclude
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`that the district court did not clearly err. The trial judge properly assessed the
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`credibility of the witnesses and drew reasonable inferences from the evidence before it.
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`The district court held that the seeding theory could not explain the results of the post‐
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`shipment tests of the phenol, and that it was unsupported by the scientific literature
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`provided by the parties. Specifically, the district court found that Cedarʹs experts were
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`not credible, and that they failed to account for the fact that the ʺpeaks and valleysʺ in
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`the test results did not comport with the linear degradation anticipated by the seeding
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`theory. App. at 768‐69; see Krist v. Kolombos Rest. Inc., 688 F.3d 89, 95 (2d Cir. 2012) (ʺIt is
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`within the province of the district court as the trier of fact to decide whose testimony
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`should be credited.ʺ).
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`The district courtʹs decision in favor of Dongbu, that the phenol was not
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`injured before it crossed the rails of the Bow Flora, was amply supported by the record.
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`3.
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`Cedarʹs Motion for Reconsideration
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`Cedar also appeals the district courtʹs June 30, 2014 denial of its motion to
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`amend the findings of fact and alter the judgment under Federal Rules of Civil
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`Procedure 52(b) and 59(e) (ʺmotion for reconsiderationʺ). We review a district courtʹs
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`denial of a motion for reconsideration for abuse of discretion. RJE Corp. v. Northville
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`‐ 6 ‐
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`Indus. Corp., 329 F.3d 310, 316 (2d Cir. 2003). ʺThe standard for granting such a motion
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`is strict, and reconsideration will generally be denied unless the moving party can point
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`to controlling decisions or data that the court overlooked ‐‐ matters, in other words, that
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`might reasonably be expected to alter the conclusion reached by the court.ʺ Shrader v.
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`CSX Transp., Inc., 70 F.3d 255, 257 (2d Cir. 1995).
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`The district court did not abuse its discretion in denying Cedarʹs motion
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`for reconsideration. Only after the district court had found in favor of Dongbu and
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`rejected the seeding theory did Cedar try to connect the Literature to its theory of the
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`phenol degradation. Cedar purported, in its motion for reconsideration, to provide a
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`ʺcritical readingʺ of the Literature to show why the district courtʹs findings were wrong.
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`But the proper time for such a critical reading was trial. Cedar failed to point to
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`decisions or data that the district court had ʺoverlooked.ʺ Id.
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`4.
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`Sanctions
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`On cross‐appeal, Dongbu contends that the district court erred in
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`declining to sanction Cedar for filing its motion for reconsideration, which, Dongbu
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`alleges, revived positions that relied on expert conclusions from its previously
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`withdrawn supplemental report, expanded on these conclusions by making inferences
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`based on the previously withdrawn supplemental report, submitted and relied on
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`documents that were not disclosed during discovery, and asserted a ʺtrend analysisʺ
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`theory that had not previously been disclosed or offered.
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`‐ 7 ‐
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`We review a district courtʹs decision regarding sanctions for abuse of
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`discretion. Schlaifer Nance & Co. v. Estate of Warhol, 194 F.3d 323, 333 (2d Cir. 1999). This
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`deferential standard is in recognition of the premise that ʺthe district court is better
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`situated than the court of appeals to marshal the pertinent facts and apply the fact‐
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`dependent legal standard that informs its determination as to whether sanctions are
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`warranted.ʺ Id. (internal quotation marks omitted).
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`The district court described Cedarʹs motion for reconsideration as
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`ʺborderline frivolous,ʺ but declined to sanction Cedar because ʺ[p]laintiff has not
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`previously been sanctioned or warned regarding the possibility of sanctions in this
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`action.ʺ App. at 954. Dongbu argues that Cedar was ʺwarnedʺ because it did in fact
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`have notice, in accordance with Federal Rule of Civil Procedure 11, and that in response
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`to that notice Cedar informed Dongbu that it would not be withdrawing its
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`reconsideration motion. Despite the Rule 11 notice, it was within the sound discretion
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`of the trial judge to deny sanctions based on lack of warning from the district court, lack
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`of previous sanctions, as well the other ʺpertinent facts.ʺ Schlaifer Nance, 194 F.3d at 333.
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`* * *
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`We have considered all of Cedar and Dongbuʹs remaining arguments and
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`find them to be without merit. Accordingly, we AFFIRM the judgment and order of the
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`district court.
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`FOR THE COURT:
`Catherine OʹHagan Wolfe, Clerk
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`‐ 8 ‐
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