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Nilo Jerez v. the Republic of Cuba

March 28, 2011

NILO JEREZ, PLAINTIFF,
v.
THE REPUBLIC OF CUBA, FIDEL CASTRO RUZ, INDIVIDUALLY AND AS PRESIDENT OF THE STATE AND COUNCIL OF MINISTERS, HEAD OF THE COMMUNIST PARTY AND MISCELLANEOUS COMMANDER-IN-CHIEF OF THE MILITARY, RAUL CASTRO RUZ, INDIVIDUALLY AND AS FIRST VICE PRESIDENT OF THE HEAD OF THE CUBAN REVOLUTIONARY ARMED FORCES, THE CUBAN REVOLUTIONARY ARMED FORCES, AND EL MINISTERIO DEL INTERIOR, DEFENDANTS.



The opinion of the court was delivered by: Alan Kay United States Magistrate Judge

MEMORANDUM OPINION

This matter was referred to the undersigned Magistrate Judge by the Honorable Richard W. Roberts, pursuant to Local Civil Rule 72.2, for resolution of all pending motions in the above-captioned case. (Order of Referral to United States Magistrate Judge, January 19, 2010 Minute Order.) Pending before this Court are the following motions: 1) Third-Parties' Motion to Vacate Writ of Attachment on Judgment with Prejudice [10]; 2) Plaintiff Nilo Jerez's Motion for an Order to Show Cause as to Why a Writ of Attachment Should Not be Issued against Agencies and Instrumentalities of the Republic of Cuba and its Co-Defendants [48]; 3) Camara de Comercio's Proposed Motion to Vacate Plaintiff's Writ of Execution with Respect to the Republic of Cuba's Registration of its Certification Mark for Cuban Cigars [61] *fn1 and 4) Motion by Camara and Third-Parties Requesting the Court's consideration of an Additional Jurisdictional Argument [104]. The Court held a hearing on three motions [10, 48, 61] on July 19, 2010. Upon careful consideration of the arguments presented and for reasons set forth below, the Court finds that the Plaintiff's Writ of Attachment is not enforceable and should be vacated. An appropriate Order accompanies this Memorandum Opinion.

This Memorandum Opinion also addresses supplementation of the Court's record. Since the July 19, 2010 hearing, the Plaintiff, Third-Parties and Intervenor Camara del Comercio ("Camara") have filed a multitude of documents, some of which are recorded on the Court's docket as "Supplemental Authority."*fn2 More specifically, the parties have filed seven "supplements" to the record, and these "supplements," have in turn resulted in additional filings such as motions for leave to file the supplements, oppositions to the supplements, replies to the oppositions, and a motion to strike a reply, with an accompanying opposition and reply to the motion to strike.

Fed. R. Civ. P 15(d) controls supplementation of pleadings, where pleadings are defined by Fed. R. Civ. P. 7(a) to include complaints and third-party complaints; answers to complaints, counterclaims and cross claims; and if ordered, a reply to an answer. Courts also have the discretion to determine whether parties are allowed to supplement the record of a case. Having reviewed the series of "supplements" propounded by Plaintiff, Third-Parties and Camara, the Court finds that the only "supplements" that should be permitted are [84] Supplemental Authority by Plaintiff and [87] Supplemental Authority by Third-Parties and Camara, which involve two legal decisions post-dating the July 2010 hearing. The remaining "supplements" address cases that were decided prior to the July 2010 hearing and issues that were raised in the three motions and at the oral hearing on those motions, or the "supplements" follow up on Supplemental Authority in [84] and [87]. This Court neither requested additional briefing nor authorized any additional briefing and accordingly the documents docketed at [71], [72], [78], [91] and [93] should be stricken from the record.

I. Background

The pending miscellaneous action involves enforcement of a default judgment issued by the United States District Court for the Southern District of Florida (hereinafter, the "Florida U.S. District Court") in the amount of $200,000,000.00 in damages, plus interest in the amount of $49,424,647.00, in favor of Plaintiff Nilo Jerez ("Jerez") against the named Defendants therein: The Republic of Cuba; Fidel Castro Ruz; Raul Castro Ruz; The Cuban Revolutionary Armed Forces and El Ministerio Del Interior. The Florida U.S. District Court's default judgment gave full faith and credit to an earlier Florida state court judgment awarding Jerez 50 million dollars in compensatory damages and 150 million dollars in punitive damages against the same Defendants. Because the Defendants challenge the jurisdiction of the Florida courts, this Court will provide a detailed description of the judicial proceedings that preceded the filing of the miscellaneous action in this Court.

On September 15, 2005, Jerez filed his Complaint in the Circuit Court of the Eleventh Judicial Circuit in and for Miami-Dade County, Florida (hereinafter, the "Florida state court') requesting compensatory and punitive damages against the aforementioned Defendants. In his civil action captioned Jerez v. Republic of Cuba et al., Case No. 05-18719 CA9, Eleventh Judicial Circuit In and For Miami-Dade County, Florida, the Plaintiff alleged that he had been subjected to tortious and torturous acts committed by Defendants and persons operating under their direction and/or control. The named Defendants did not respond to the Complaint nor did they appear in court at any time, including during the one day non-jury ex parte "trial" held in the Florida state court on January 30, 2007.

On that same date, the Florida state court entered its Final Judgment (Motion to Vacate Writ of Attachment [10-2], Exh. B [January 30, 2007 Final Judgment]) finding the Defendants liable under the Torture Victim Protection Act, 28 U.S.C. §1350. The Florida state court noted that it acquired "jurisdiction over the claims asserted by Mr. Jerez pursuant to the Alien Tort Claim[ ] Act, 28 U.S.C. [§1350] and 28 U.S.C. §1331. . . ." (January 30, 2007 Final Judgment at 1-2.)*fn3 The state court's Final Judgment addressed the physical and mental torture suffered by Plaintiff during his incarceration in Cuba and the psychiatric and physical damages resulting therefrom, including Plaintiff's Hepatitis C infection. The Florida state court did not address or reference the Foreign Sovereign Immunities Act, 28 U.S.C. §§1330, 1602 et seq.,which applies to claims against foreign states, their political subdivisions, and their agencies and instrumentalities.

Jerez subsequently moved to enforce his Florida state court Final Judgment by filing a Complaint, on December 9, 2008, in Florida U.S. District Court, in a case captioned Jerez v. Republic of Cuba, Case No. 08-23405- CIV- Hoveler (S.D. Fla.). The Florida U.S. District Court Clerk's Office entered a default against the Defendants after they failed to respond to the Complaint and that default was followed by entry of a Final Default Judgment Granting Full Faith & Credit to State Judgment ("Final Default Judgment")(attached to Registration of Foreign Judgment [1] at [1-1])) on May 6, 2009. In its Final Default Judgment, the Florida U.S. District Court did not address the Florida state court's subject matter jurisdiction to enter a final judgment nor did it undertake any independent examination of Plaintiff's case. The Final Default Judgment was granted pursuant to 28 U.S.C. §1738, giving full faith and credit and federal recognition to the Florida state court's Final Judgment*fn4 dated January 30, 2007,which awarded Plaintiff two hundred million dollars in compensatory and punitive damages against the Defendants.*fn5

On September 1, 2009, Jerez registered his Final Default Judgment ([1]) in this Court, pursuant to 28 U.S.C. §1963, and moved for a Writ of Execution on Judgment to acquire any "personal property located within the District of Columbia against the defendants and their agencies and instrumentalities. . . ."*fn6 (Motion for Order to Issue Writ of Execution on Judgment

[2] at 1.) A corrected application for an Order to Issue Writ of Execution on Judgment was filed on September 2, 2009. (Corrected Application for Order to Issue Writ of Execution on Judgment

[3].) Also on September 2, 2009, Jerez filed in this Court an application for a Writ of Attachment on Judgment ([4]) requesting that the Clerk of the Court issue a Writ of Attachment on Judgment for the personal property, goods and chattels of the named Defendants and their agencies and instrumentalities listed on Schedule A.*fn7 (Application for Writ of Attachment on Judgment [4]; Schedule A.) Schedule A listed 24 entities allegedly related to Defendant, Republic of Cuba. On October 1, 2009, Plaintiff withdrew his Motion for Order to Issue Writ of Execution of Judgment [2], corrected by [3], (Withdrawal of Motion [6]), and on the following day, a Writ of Attachment on Judgment was issued by the Clerk's Office to the United States Marshal for the District of Columbia.

On November 4, 2009, Plaintiff filed a Notice of Service of Writ of Attachment on Judgment [7] indicating that he had, through a private process server, served the Writ of Attachment on Judgment on the United States Department of Commerce ("Commerce").*fn8 According to the parties, no action was taken by Commerce regarding the service of the Writ of Attachment. On November 19, 2009, approximately 20 of the entities listed in Plaintiff's Schedule A filed a Motion to Vacate the Writ, which is one of the three motions pending before this Court. (Motion to Vacate Writ of Attachment [10].) On November 25, 2009, Camara del Comercio ("Camara") filed a motion to intervene in the present proceeding. (Motion to Intervene by Camara [13].)*fn9 Jerez opposed both of these motions. (Plaintiff's Opposition to [10], docketed at [25] & Opposition to [13], docketed at [26].)

The instant case was assigned to the Honorable Richard W. Roberts in January 2010, and thereafter referred to this Magistrate Judge for resolution of all motions. On April 14, 2010, after considering the record in this case, this Court issued a Memorandum Order quashing the Writ of Attachment issued by the Clerk's Office on grounds that the Writ was inconsistent with the Florida U.S. District Court's Final Default Judgment because it was not limited to the Defendants named therein. (April 14, 2010 Memorandum Order [43].) The Court permitted Plaintiff to apply for a Writ of Attachment consistent with the original Final Default Judgment, which would list only the named Defendants. Jerez filed a corrected Application for Writ of Attachment on April 15, 2010. (Application for Writ of Attachment by Nilo Jerez [44].)

On May 6, 2010, the Court convened a status conference to ascertain the nature of the asset(s) Plaintiff intended to attach because the proposed Writ of Attachment on Judgment [44] did not specify what "personal property, goods and chattels" Plaintiff sought to attach. (See Transcript of Proceedings from May 6, 2010 [54].) During the status conference, Plaintiff's counsel identified the only "asset" at issue as the trademark (Serial No. 72153423) registered in the United States for the National Warranty Seal ( "the Seal" or "the Mark") on Cuban Cigars, which is assigned to the Republic of Cuba.*fn10 Counsel for Camara was present at the hearing even though its motion to intervene had not yet been granted. Besides the Seal, no other assets were identified in connection with the Defendants named in the default judgment; however, just prior to the status conference Plaintiff Jerez filed his Motion for an Order to Show Cause As to Why a Writ of Attachment Should not be Issued Against the Agencies and Instrumentalities of the Republic of Cuba and Its Co-Defendants [48], and that is the second motion pending before this Court.*fn11

The named entities, the alleged agencies and instrumentalities, filed their response on May 20, 2010. (Opposition to Motion for Order to Show Cause [52].) In that response, seventeen of the entities appeared to have conceded that for purposes of the proceeding in this Court they were, in fact, agencies and instrumentalities of the Republic of Cuba; however, five of the entities filed a separate opposition to the Motion for Order to Show Cause indicating that they did not concede and should not be considered agencies and instrumentalities of the Republic of Cuba. ([Second] Opposition to Motion for Order to Show Cause [53].)

On June 4, 2010, the Clerk of the Court issued a Writ of Attachment on Judgment for the personal property, goods and chattels of the Defendants named in the default judgment that was obtained in the Florida state court and certified by the Florida U.S. District Court. (Writ of Attachment on Judgment [58].) On June 18, 2010, this Court issued a Memorandum Order granting Camara's motion to intervene. (Memorandum Order granting motion to intervene [59].) On that same date, Camara filed a proposed Motion to Vacate Plaintiff's Writ [of Attachment] with Respect to the Republic of Cuba's Registration of its Certification Mark for Cuban Cigars (Motion to Vacate Plaintiff's Writ [61]), which is the third motion pending before this Court.

A telephone status conference was held on June 25, 2010, during which the seventeen entities affirmed their status as agencies and/or instrumentalities of the named Defendants (these entities are hereinafter referred to as "the Agencies/Instrumentalities") and five entities continued to dispute that they were agencies and/or instrumentalities of Cuba. This Court subsequently issued a Memorandum Order (June 30, 2010 Memorandum Order [64]) listing the entities and identifying their status, and setting a July 19, 2010 hearing on the Third-Parties' Motion to Vacate the Writ [10]; Plaintiff's Motion for Order to Show Cause as to Why a Writ of Attachment Should Not be Issued ([48]); and Camara's Motion to Vacate Plaintiff's Writ ([61]).*fn12

The essence of the three motions require the Court to rule on two issues -- the jurisdiction of this Court to enforce the default judgment entered by the Florida state and federal court and execution of the Writ of Attachment. Because the relief requested and the arguments asserted by the Plaintiff, Camara and the Agencies/Instrumentalities overlap, this Court's ruling will initially address the Florida courts' jurisdiction to enter the default judgment, a prerequisite for this Court's jurisdiction to enforce the default judgment and then address whether this Court can enforce the Writ of Attachment.*fn13

II. Does this Court have Jurisdiction to Enforce the Judgment of the Florida U.S. District Court, which in turn granted Full Faith and Credit to the Judgment of the Florida State Court?

A. Subject Matter Jurisdiction

Although Camara and the Agencies/Instrumentalities (collectively referred to as "Movants") and the Plaintiff focus on enforceability of the judgment, relying on the Terrorism Risk Insurance Act of 2002, ("TRIA"), Pub. L. No. 107-297, 116 Stat. 2322 (Nov. 26, 2002), codified at 28 U.S.C. §1610 note,*fn14 this Court will initially address the issue of jurisdiction. It is necessary to first review the underlying subject matter jurisdiction of the two Florida courts, primarily because the record does not indicate that the Florida state court or Florida U.S. District Court considered the Foreign Sovereign Immunities Act ("FSIA"). The Florida state court did not affirmatively find that there was an applicable waiver of immunity under FSIA for the entry of the Florida state court Final Judgment, and the Florida U.S. District Court subsequently granted Full Faith and Credit to that Final Judgment.

If the Florida state court's reliance on statutes prevented it from acquiring subject matter jurisdiction, then its Final Judgment would not be enforceable and its lack of jurisdiction cannot be cured by a second court giving it Full Faith and Credit. These are basic principles historically recognized by the Supreme Court:

To be sure, the structure of our Nation as a union of States, each possessing equal sovereign powers, dictates some basic limitations on the full-faith-and-credit principles enumerated above. Chief among these limitations is the caveat, consistently recognized by this Court, that "a judgment of a court in one State is conclusive upon the merits in a court in another State only if the court in the first State had power to pass on the merits-had jurisdiction, that is, to render the judgment." Durfee v. Duke, 375 U.S. 106, 110 (1963). Consequently, before a court is bound by a judgment rendered in another State, it may inquire into the jurisdictional basis of the foreign court's decree. If that court did not have jurisdiction over the subject matter or the relevant parties, full faith and credit need not be given. Nevada v. Hall, 440 U.S. 410, 421 (1979).

Underwriters Nat. Assur. Co. v. N.C. Life and Acc. and Health Ins. Guaranty Ass'n, 455 U.S. 691, 704 ( 1982).

Preliminarily, it should be noted that subject matter jurisdiction may be raised at any time, even by the court sua sponte.*fn15 See generally Fed. R. Civ. P. 12 (h)(3)("If the court determines at any time that it lacks subject-matter jurisdiction, the court must dismiss the action.")See G. Keys PC/Logis NP v. Pope, 630 F.Supp.2d 13, 15 (D.D.C. 2009) ("When it perceives that subject matter jurisdiction is in question, the Court should address the issue sua sponte.") (citations omitted.) "[R]esolving a merits issue while jurisdiction is in doubt 'carries the courts beyond the bounds of authorized judicial action[.]'" In Re Papandreou, 139 F.3d 247, 254-55 (D.C. Cir. 1998) (quoting Steel Co. v. Citizens for a Better Environment, 523 U.S. 83, 84 (1998)).*fn16

A case relied upon by both Plaintiff and Movants, which discusses jursidictional issues, and which is factually similar to the case at bar, is Weininger v. Castro, 462 F. Supp.2d 457 (S.D.N.Y. 2006). In Weininger, plaintiff Weininger received a default judgment against the Republic of Cuba, Fidel Castro, Raul Castro and the Army of the Republic of Cuba, and the plaintiff McCarthy received a default judgment against the Republic of Cuba. These judgments resulted in an award of compensatory damages by the Circuit Court for the Eleventh Judicial Circuit in and for Miami-Dade County.*fn17 Weininger attempted to domesticate her Florida state court judgment by seeking summary judgment in a New York state court but that action was removed to a district court in New York, where the judgment was given full faith and credit and a writ of execution was issued.

McCarthy brought an action on her Florida state court judgment in the Florida U.S. District Court, and a final default judgment was entered in her favor. McCarthy subsequently registered that federal judgment with the United States District Court for the Southern District of New York, which authorized issuance of a writ of execution for McCarthy to levy upon the Republic of Cuba's property in New York in order to satisfy her judgment. The property Plaintiffs sought to levy included JPM ...


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