Atlantic Oceanic LLC v. HF Offshore Services Mexico SAPI de CV et al

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
ATLANTIC OCEANIC LLC 	CIVIL ACTION
VERSUS 	No. 25-974
HF OFFSHORE SERVICES MEXICO 	SECTION “H” (3)
SAPI DE CV, ET AL.
REPORT AND RECOMMENDATION
Before the Court is defendant HF Hunter Shipping Pte. Ltd.’s (“HF Hunter”)
Motion for Sanctions.1 HF Hunter seeks an assessment of attorneys’ fees, costs, and
other expenses against Plaintiff Atlantic Oceanic LLC (“Atlantic”) and its counsel,
the law firm of Holland & Knight, under Federal Rule of Civil Procedure 11 and this
Court’s inherent authority to award sanctions for bad-faith conduct.2 Atlantic has
filed an opposition and related affidavit,3 to which HF Hunter has replied.4 For the
reasons below, the Court recommends the motion be denied.
I. 	Background
Atlantic filed a complaint and sought a writ of attachment against HF Hunter’s
vessel, the M/V HF Hunter, on May 15, 2025.5 A writ of attachment issued the same
day.6 Atlantic alleges that HF Hunter is an alter ego of HF Offshore Services Mexico
1 R. Doc. 133.
2 Id. at 1.
3 R. Docs. 137, 138.
4 R. Doc. 141.
5 R. Docs. 1, 3.
6 R. Doc. 8.
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SAPI de CV (“HF Mexico”) such that HF Hunter is liable for a multi-million-dollar
arbitration award against HF Mexico.7
On May 21, 2025, HF Hunter moved to vacate the attachment.8 The District
Court designated the undersigned to hear and determine the motion.9 An evidentiary
hearing on the motion to vacate was held on June 18, 2025.10 On June 20, 2025, the
undersigned ruled that Atlantic failed to establish probable cause to conclude that
HF Hunter is liable as an alter ego of HF Mexico such that the attachment should be
vacated.11
On June 26, 2026, Atlantic filed a Motion to Alter Judgment.12 On June 28,
2025, the undersigned denied the Motion to Alter Judgment.13 The Court concluded
that 	Atlantic’s 	desire 	to 	rely 	on 	new 	or 	additional 	evidence 	did 	not 	warrant
reconsideration and, in the alternative, that the additional evidence would not have
changed the hearing’s outcome.14
On June 30, 2025, the District Court adopted and approved the undersigned’s
denial of the motion to vacate.15 In doing so, it concurred that Atlantic’s “‘post-hearing
attempt to create a new evidentiary record’ is unpersuasive.”16 Thus, the Court
7 R. Doc. 1, ¶ 13.
8 R. Docs. 16, 17.
9 R. Doc. 41.
10 R. Doc. 60.
11 R. Doc. 57.
12 R. Doc. 68.
13 R. Doc. 76.
14 Id. at 5–6.
15 R. Doc. 77 at 3.
16 Id. (citing R. Doc. 76 at 6).
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vacated the attachment of the M/V HF Hunter.17 A flurry of filings followed,
including HF Hunter’s Motion for Immediate Release of Vessel and Enforcement of
Order18 and Atlantic’s Motion to Stay Release of Vessel Pending Appeal.19 On July 3,
2025, the District Court denied Atlantic’s request for a stay and ordered the vessel
released on July 7, 2025.20 The purpose of this delay was “to allow Plaintiff time to
seek a stay with the Fifth Circuit.”21
On July 5, 2025, the Fifth Circuit ordered a “temporary administrative stay”
of the District Court proceedings through July 9, 2025.22 On July 8, 2025, the Fifth
Circuit deferred ruling on Atlantic’s motion for stay pending appeal and remanded
for the District Court “to explicitly address vessel attachment in light of” the full
record, including the post-hearing evidence submitted by Atlantic.23 Thus, on July
29, 2025, the District Court held an approximately two-hour evidentiary hearing that
included consideration of the new or additional evidence.24 On August 8, 2025, the
District Court issued extensive Findings of Fact and Conclusions of Law and ordered
the immediate release of the M/V HF Hunter.25
17 Id. at 3–4.
18 R. Doc. 78.
19 R. Doc. 90.
20 R. Doc. 92.
21 Id. at 6 n.12.
22 R. Doc. 93.
23 R. Doc. 94.
24 R. Doc. 104.
25 R. Doc. 105.
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On October 10, 2025, HF Hunter filed the instant motion.26 HF Hunter
requests that the Court sanction Atlantic and Holland & Knight under the Court’s
inherent power and Rule 11 and award HF Hunter its attorneys’ fees and costs and
other relief as follows:
A) 	Between May 15, 2025, and June 20, 2025, filing and prosecuting
the 	attachment 	action 	for 	improper 	purposes 	and 	without
evidentiary support, resulting in attorneys’ fees of $272,276.40.
B) 	Between June 21, 2025, and August 11, 2025, defying court orders
and 	improperly 	filing 	multiple 	motions 	calculated 	only 	to
unnecessarily delay the Vessel’s release and increase litigation
costs, again without evidentiary support, resulting in attorneys’
fees of $288,496.40;
C) 	On August 11, 2025, falsely arguing that HF Hunter agreed to
pay for guard charges and refusing to pay charges that were
legally 	the 	responsibility 	of 	Atlantic, 	resulting 	in 	costs 	of
$103,709.88; and
D) 	All other relief this Court deems just.27
II. 	Standard of Law
A. 	Rule 11
Rule 11 is intended to “deter baseless filings” and thus “streamline the
administration and procedure of the federal courts.” Cordova v. Univ. Hosp. & Clinics,
Inc., 92 F.4th 266, 273 (5th Cir.) (quoting Cooter & Gell, 496 U.S. at 393), cert. denied
sub nom. Mire v. Univ. Hosp. & Clinics, Inc., 144 S. Ct. 2608 (2024). Rule 11 requires
attorneys to conduct a “reasonable inquiry” and determine that “any papers filed with
the court are well grounded in fact, legally tenable, and not interposed for any
26 R. Doc. 133.
27 R. Doc. 133-1 at 12–13.
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improper purpose.” See id. (quoting Cooter & Gell, 496 U.S. at 393). An attorney’s
conduct is measured as of the time of his signature on the filing and against an
objective reasonableness standard. See id. “When evaluating the reasonableness of
an attorney's factual inquiry under Rule 11, courts assess various factors, including
the time available to the signer for investigation . . . and the feasibility of a prefiling
investigation.” Id. at 276 (quotation omitted).
Rule 11 requires that the offending party be provided a 21-day “safe harbor”
before relief can be sought from the Court. Fed. R. Civ. P. 11(c)(2). A Rule 11 motion
be served on an opposing party “but it must not be filed or be presented to the court
if the challenged paper, claim, defense, contention, or denial is withdrawn or
appropriately corrected within 21 days after service or within another time the court
sets.” Id. “The purpose of this safe harbor period is to ‘give the parties at whom the
motion is directed an opportunity to withdraw or correct the offending contention.’”
Ports Am. Gulfport, Inc. v. Johnson, No. CV 22-455, 2023 WL 35776, at *3 (E.D. La.
Jan. 3, 2023) (quoting Elliott v. Tilton, 64 F.3d 213, 216 (5th Cir. 1995)).
B. 	Inherent Power
Courts may impose attorneys’ fees as part of their inherent power in certain
“narrowly defined circumstances.” Chambers v. NASCO, Inc., 501 U.S. 32, 45 (1991)
(quotation and citation omitted). This power extends to sanctioning a party who has
“acted in bad faith, vexatiously, wantonly, or for oppressive readings.” See id. at 45–
46 (quotations and citation omitted). The Court’s inherent power is perhaps most
helpful when applied to fill gaps between statutes and the Federal Rules of Civil
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Procedure and thus cover “a full range of litigation abuses.” See id. at 46. “[I]f in the
informed discretion of the court, neither the statute nor the Rules are up to the task,
the court may safely rely on its inherent power.” See id. at 50.
III. 	Analysis
A. 	Rule 11
Many of the pleadings and contentions that HF Hunger challenges under Rule
11 arose in the context of HF Hunter’s motion to vacate the attachment. Rule 11
relief, however, is available only while the challenged document or contention
remains under consideration. “Because this period of ‘safe harbor’ is dependent on
the ability to withdraw or correct the challenged document or contention, it follows
that ‘a party cannot delay serving its Rule 11 motion until conclusion of the case (or
judicial rejection of the offending contention).’” Margetis v. Furgeson, 666 F. App’x
328, 331–32 (5th Cir. 2016) (quoting Fed. R. Civ. P. 11(c) advisory committee's note
to 1993 amendment). “At that point, there is nothing left for the opposing party to
withdraw or correct, and the ‘policies and procedural protections’ provided by Rule
11(c)(2) cannot be given effect.” Id. at 332 (quoting 5A Charles Alan Wright et al.,
Federal Practice and Procedure § 1337.2 (3d ed. 2016)).
Between May 15 and August 9, 2025, HF Hunter engaged in a hard-fought
battle to vacate the attachment of the M/V HF Hunter and secure the release of the
vessel. HF Hunter ultimately prevailed. Given the unequivocal and repeated judicial
rejection of Atlantic’s “offending contention[s],” there is no longer an allegation
relative to the vessel attachment for which Rule 11 relief is available. Thus, Rule 11’s
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safe harbor provision precludes HF Hunter from recovering attorneys’ fees relative
to its successful efforts to vacate the attachment and ensure the vessel’s release.
HF Hunter maintains that the pendency of Atlantic’s Verified Complaint
fulfills the requirement that there be something left to withdraw or correct.28 An
attorney’s conduct is measured as of the time of his signature on the filing and against
an objective reasonableness standard. Cordova, 92 F.4th at 273. “When evaluating
the reasonableness of an attorney's factual inquiry under Rule 11, courts assess
various factors, including the time available to the signer for investigation . . . and
the feasibility of a prefiling investigation.” Id. at 276 (quotation omitted).
The Verified Complaint acknowledges that the underlying arbitration awards
were against HF Mexico and that neither HF Towing nor HF Hunter were “directly
parties to the London Arbitration” or the agreements underlying that arbitration.29
The Verified Complaint discloses that it is based on an alter ego theory of liability.30
As discussed above, that theory has been rejected in connection with the vacatur of
the attachment. At the time of the filing of the Verified Complaint, however, much of
the information relied on by this Court was unavailable. Moreover, the numerous
exhibits attached to the Complaint demonstrate that Atlantic undertook a pre-filing
investigation, albeit on an expedited basis, relative to its theory of alter ego liability.
28 R. Doc. 141 at 8.
29 R. Doc. 1, ¶¶ 12–13.
30 Id. ¶ 13.
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True, one of the Complaint’s exhibits contradicts the Complaint.31 Citing to its
Exhibit 6, the Complaint alleges that HF Hunter’s shareholders include HF Towing
and HF Mexico.32 Exhibit 6 to the Complaint, in turn, lists HF Towing—but not HF
Mexico—as a shareholder.33 Given that the Complaint attached and cited the
document on which it relied, the inclusion of HF Mexico in this sentence is erroneous,
but it does not appear to be the product of inadequate factual investigation or
otherwise support sanction under Rule 11. Moreover, the shareholders of HF Hunter
have been identified such that this allegation is inoperative. See Atl. Oceanic LLC v.
HF Offshore Servs. Mexico SAPI de CV, No. CV 25-974, 2025 WL 1725973, at *3 (E.D.
La. June 20, 2025) (listing shareholders and not including HF Mexico), report and
recommendation adopted, No. CV 25-974, 2025 WL 1833551 (E.D. La. June 30, 2025).
While this judicial determination was preliminary insofar as the hearing did not
ultimately resolve the merits, Atlantic has not contested the shareholder identities.
Finally, although the reasonableness of Atlantic’s conduct is assessed under Rule 11
as of when it filed the Verified Complaint, sanctions are unavailable even considering
Atlantic’s continued prosecution of this lawsuit.
This litigation has proceeded before the undersigned, the District Court, and
the Fifth Circuit. Each stage of the litigation lends support for the conclusion that
Atlantic’s conduct does not support sanctions under Rule 11.
31 R. Doc. 133-1 at 7.
32 R. Doc. 1, ¶ 59.
33 R. Doc. 1-5 at 10–11.
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The proceedings before the undersigned Magistrate Judge included a lengthy
evidentiary hearing. At the hearing, Atlantic “set forth some limited evidence” to
support its theory of alter ego liability.34 That evidence, however, was insufficient
when weighed against the rest of the record, including extensive live witness
testimony.35 Much of the evidence presented at the hearing was unavailable to
Atlantic when it filed this action. This weighs against the imposition of Rule 11
sanctions. Moreover, while Atlantic and its counsel were involved in two instances of
concerning litigation conduct before the undersigned,36 the Court addressed the
conduct within a matter of days. Both incidents are problems. But they are not Rule
11 problems.
As for the District Court, the record similarly reflects that a careful weighing
of the evidence, including transcribed and live testimony, supported its ultimate
decision that the attachment should be vacated. Atlantic also points to a July 3, 2025,
hearing, at which the District Court stated: “I am not assigning any nefarious motives
to anyone” relative to a potential bypass of the rules, and “I think everybody operated
in good faith.”37 It is possible that the comment was akin to a judicial pleasantry,
intended to focus the parties’ argument on substantive issues. But nothing in the
34 R. Doc. 57 at 7.
35 Id. at 7–9.
36 One incident involved the secret use of an unauthorized transcript accompanied by
statements to the Court that no transcript was available. The other involved a
baseless allegation of “doctored” evidence.
37 R. Doc. 137-5 at 47:8–12.
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surrounding record suggests that the District Court perceived Atlantic’s filings to be
sanctionable under Rule 11.
The proceedings before the Fifth Circuit similarly undermine HF Hunter’s
argument that Atlantic’s repetitious requests for reconsideration and presentation of
new or additional evidence are sanctionable. The Fifth Circuit remanded the case to
the District Court for the express purpose of considering certain additional evidence.
While Atlantic did not ultimately prevail, the remand supports the conclusion that
the presentation of “new” evidence was not sanctionable.
Finally, the parties dispute responsibility for the $103,709.8838 cost of guards
aboard the M/V HF Hunter. HF Hunter reportedly paid those charges, under protest,
on August 11, 2025.39 HF Hunter argues that Atlantic is subject to sanction under
Rule 11 relative to its litigation position over payment of the cost of guards. According
to HF Hunter, Atlantic made a “false” assertion that HF Hunter agreed to pay the
guards charges.40 In addition, HF Hunter maintains, Atlantic’s argument that HF
Hunter should bear the costs of guards is “[c]ontrary to law.”41 There is no pending
motion relative to the guards cost, however. Thus, it appears there is no operative
contention subject to Rule 11 withdrawal. Perhaps there is a road by which HF
Hunter can recover the guards cost—an issue the undersigned does not reach—but
Rule 11 provides no relief.
38 R. Doc. 133-1 at 12.
39 R. Doc. 118-1 at 1.
40 R. Doc. 133-1 at 12.
41 Id.
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B. 	Inherent Power
“[I]n order to impose sanctions against an attorney under its inherent power,
a court must make a specific finding that the attorney acted in bad faith.” See Elliott
v. Tilton, 64 F.3d 213, 217 (5th Cir. 1995) (citation omitted). For reasons that overlap
with those stated above, the record does not support the conclusion that Atlantic
acted in bad faith in prosecuting this action such that sanctions are appropriate under
the Court’s inherent power.
IV. 	Conclusion
Atlantic’s attachment of the M/V HF Hunter required HF Hunter to engage in
costly, 	time-pressured, 	and 	high-stakes 	litigation. 	Yet 	any 	vessel 	owner 	that
successfully challenges an attachment will likely incur steep legal fees and costs in
the process. Moreover, cases in which vessel owners prevail necessarily involve
relatively little evidence in support of the attachment. That is because a mere
showing of probable cause is sufficient to support attachment. Finally, the time-
pressured nature of the case is a necessary consideration in deciding whether to
award sanctions. See also Indus. Mar. Carriers, LLC v. Dantzler, Inc., 611 F. App’x
600, 607 (11th Cir. 2015) (observing, in the context of wrongful arrest, that there are
certain “mistakes that our admiralty procedures anticipate and accept as a necessary
evil to be suffered in the interests of preventing parties from fleeing a court's
jurisdiction before the dispute can be adjudicated”).42 Thus, while Atlantic was
42 The undersigned expresses no opinion on the viability of a wrongful attachment
claim.
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unable to muster evidence sufficient to meet the probable cause standard and
maintain the vessel attachment, Atlantic’s filings do not subject it to sanctions under
Rule 11 or the Court’s inherent power.
V. 	Recommendation
Accordingly,
IT IS RECOMMENDED that the Motion for Sanctions (R. Doc. 133) be
DENIED.
A party’s failure to file written objections to the proposed findings, conclusions,
and recommendation in a magistrate judge’s report and recommendation within 14
days after being served with a copy shall bar that party, except upon grounds of plain
error, from attacking on appeal the unobjected-to proposed factual findings and legal
conclusions accepted by the district court, provided that the party has been served
with notice that such consequences will result from a failure to object. 28 U.S.C. §
636(b)(1); Douglass v. United Services Auto. Ass’n, 79 F.3d 1415, 1430 (5th Cir. 1996)
(en banc).
New Orleans, Louisiana, December 1, 2025.
__________________________________________
EVA J. DOSSIER
UNITED STATES MAGISTRATE JUDGE
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