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Security for Counterclaims

Supp. R. for Certain Admiralty and Maritime Claims E(7)provides that whenever there is asserted a counterclaim arising out of the same transaction or occurrence with respect to which the action was originally filed, and the defendant or claimant in the original action has given security to respond in damages, any plaintiff for whose benefit such security has been given shall give security in the usual amount and form to respond in damages to the claims set forth in such counterclaim, unless the court, for cause shown, shall otherwise direct.[i]

In a transaction or occurrence that is the subject of the original action, a plaintiff for whose benefit the security has been given must give security for damages demanded in the counterclaim unless the court for cause shown, directs otherwise.  Even though, Supp. R. Adm. or Mar. Cl. & Asset Forfeiture Actions E(7)(a) initially appears to make the posting of countersecurity mandatory whenever its conditions are satisfied, the final clause of the above language makes clear that the trial court possesses broad discretion in deciding whether to order countersecurity under such conditions.[ii]

[i] Titan Navigation, Inc. v. Timsco, Inc., 808 F.2d 400 (5th Cir. Tex. 1987)

[ii] DSND Subsea AS v. Oceanografia, S.A. de C.V., 569 F. Supp. 2d 339 (S.D.N.Y. 2008)

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