CSX Transp., Inc. v. Island Rail Terminal, Inc., No. 16-3995 (2d Cir. 2018)Annotate this Case
Third-party garnishees challenged the district court's judgment directing them to turn over $1,056,444.15 to a judgment creditor to satisfy a judgment against a judgment debtor. The Second Circuit agreed with the district court that CSX was permitted to seek relief from garnishees by motion under Federal Rule of Civil Procedure 69(a), rather than by instituting a special proceeding pursuant to New York law; the plain meaning of C.P.L.R. 5222(b) did not support garnishees' argument that they did not violate the Restraining Notices because they transferred the restrained funds under the statute; and, the district court abused its discretion by failing to hold a hearing to resolve factual issues concerning the relative priorities of judgment creditors ‐‐ a necessary predicate to determining the proper amount of damages, if any, sustained by CSX. Accordingly, the court affirmed in part, vacated in part, and remanded.