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Jerez v. Republic of Cuba

United States District Court, District Circuit

August 29, 2013

NILO JEREZ, Plaintiff,
v.
REPUBLIC OF CUBA, et al., Defendants.

MEMORANDUM OPINION

RICHARD W. ROBERTS Chief Judge

Plaintiff Nilo Jerez brought this action to enforce a default judgment against defendants the Republic of Cuba, Fidel Castro Ruz, Raul Castro Ruz, the Cuban Revolutionary Armed Forces and El Ministerio Del Interior. The motion by entities that Jerez alleged in an application for a writ of attachment are agencies and instrumentalities of the Republic of Cuba (“third party movants”)[1] to vacate the writ of attachment, Jerez’s motion for an order to show cause why the writ of attachment should not be issued against the third party movants, and the intervenor Camara de Comercio’s motion to vacate the writ of attachment were referred to Magistrate Judge Alan Kay who found that there was no subject matter jurisdiction to enforce Jerez’s state court default judgment and that Jerez’s writ of attachment was not enforceable. Jerez filed objections under Local Civil Rule 72.2(b) to the magistrate judge’s order.[2] Because the magistrate judge’s rulings as to subject matter jurisdiction are not clearly erroneous or contrary to law, Jerez’s objections will be overruled.

BACKGROUND

The extensive factual and procedural history of this dispute is set forth in detail in Jerez v. Republic of Cuba, 777 F.Supp.2d 6 (D.D.C. 2011). Briefly, Jerez filed a complaint in 2005 in Florida state court against the Republic of Cuba, Fidel Castro Ruz, Raul Castro Ruz, the Cuban Revolutionary Armed Forces and El Ministerio del Interior seeking damages for the physical and mental torture he allegedly endured when he was incarcerated in Cuban prisons in the early 1970's. Id. at 10-11. Jerez alleged that he was purposefully infected with Hepatitis C and developed cirrhosis of the liver, among other injuries. Pl.’s Objections to Magistrate Judge’s Mem. Op. and Order (“Pl.’s Objs.”) at 6. In 2007, Jerez obtained a default judgment against the defendants in the Florida state court. Id. at 8; Opp’n to Pl.’s Objections by Centro de Bioactivos Químicos et al. (“Defs.’ Opp’n”) at 2. In May 2009, the United States District Court for the Southern District of Florida granted full faith and credit to the state court judgment and entered default judgment against the defendants. Pl.’s Objs. at 9; Defs.’ Opp’n at 2. In September 2009, Jerez registered his Southern District of Florida default judgment in this court and filed a writ of attachment seeking to attach assets of the named defendants and of entities alleged to be agencies and instrumentalities of the defendants. Pl.’s Objs. at 9; Defs.’ Opp’n at 3. Third party movants whose property Jerez sought to attach, but who were not named as defendants in the Southern District of Florida’s default judgment, moved to vacate the writ.[3] Jerez then moved for an order to show cause why a writ of attachment should not be issued against the agencies and instrumentalities of the Republic of Cuba and its co-defendants. Camara del Comercio, which was permitted to intervene, moved to vacate plaintiff’s writ of attachment with respect to the Republic of Cuba’s registration of its certification mark for Cuban Cigars. Magistrate Judge Kay found that the Florida state court did not have subject matter jurisdiction under the Foreign Sovereign Immunities Act (“FSIA”), 28 U.S.C. §§ 1330, 1602 et seq. Jerez, 777 F.Supp.2d at 25-26. In addition, the magistrate judge found that the writ of attachment was unenforceable under the Cuban Assets Control Regulations and related statutory authority even if the Florida state court had subject matter jurisdiction. Id. at 29. Finally, the magistrate judge decided that the attachment of the trademark would be impermissible. Id. at 32. Jerez filed objections to the magistrate judge’s decision arguing that the magistrate judge erred on each issue.

DISCUSSION

“Upon consideration of objections filed . . ., a district judge may modify or set aside any portion of a magistrate judge’s order . . . found to be clearly erroneous or contrary to law.” LCvR 72.2(c); see also Fed.R.Civ.P. 72(a). Factual findings are subject to the clearly erroneous standard and will be affirmed unless “the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed.” Am. Ctr. for Civil Justice v. Ambush, 794 F.Supp.2d 123, 129 (D.D.C. 2011) (internal quotation marks omitted). “The contrary to law standard, by contrast, permits de novo review of a magistrate judge’s legal conclusions.” Id. (internal quotation marks omitted).

I. SUBJECT MATTER JURISDICTION

Jerez objects to the magistrate judge’s decision that there is no subject matter jurisdiction under the FSIA. The FSIA is the “‘sole basis for obtaining jurisdiction over a foreign state in our courts.’” Nemariam v. Fed. Democratic Republic of Ethiopia, 491 F.3d 470, 474 (D.C. Cir. 2007) (quoting Argentine Republic v. Amerada Hess Shipping Corp., 488 U.S. 428, 434 (1989)). “Under the FSIA, a court may entertain jurisdiction over a civil complaint directed against a foreign sovereign ‘only if the foreign state lacks immunity under the Act’s prescriptions[.]’” Doe v. Bin Laden, 580 F.Supp.2d 93, 96 (D.D.C. 2008) (alteration in original) (quoting Practical Concepts, Inc. v. Republic of Bolivia, 811 F.2d 1543, 1544 (D.C. Cir. 1987)). “When a defendant qualifies for sovereign immunity, ‘the federal courts lack subject matter jurisdiction’ over proceedings against that defendant, and therefore ‘must dismiss the case’ against the immune defendant.” Inversora Murten, S.A. v. Energoprojekt Holding Co., 671 F.Supp.2d 152, 155 (D.D.C. 2009) (quoting Auster v. Ghana Airways, Ltd., 514 F.3d 44, 48 (D.C. Cir. 2008)). “An agency or instrumentality of a foreign state is treated as a foreign state under the FSIA, . . . and thus is ‘immune from the jurisdiction of the courts of the United States.’” Id. (quoting Peterson v. Islamic Republic of Iran, 563 F.Supp.2d 268, 273 (D.D.C. 2008)). The FSIA provides exceptions which allow a plaintiff to bring suit when particular conditions are met. Bin Laden, 580 F.Supp.2d at 96 (citing 28 U.S.C. § 1605). The plaintiff bears the burden of showing that an FSIA exception allows waiver of the defendants’ sovereign immunity. Id. at 96-97 (citing Youming Jin v. Ministry of State Sec., 475 F.Supp.2d 54, 61 (D.D.C. 2007)).

Jerez argues that two waivers of sovereign immunity are applicable under the FSIA: the non-commercial tort exception under 28 U.S.C. § 1605(a)(5) and the terrorism exception under 28 U.S.C. § 1605(a)(7).

A. Non-commercial tort exception

Under the non-commercial tort exception, a waiver of sovereign immunity is appropriate where a party seeks money damages against a foreign state when the injury was caused by “the tortious act or omission of that foreign state or of any official[.]” 28 U.S.C. § 1605(a)(5). It is well-settled in the D.C. Circuit that under this provision, “both the tort and the injury must occur in the United States.” Persinger v. Islamic Republic of Iran, 729 F.2d 835, 842 (D.C. Cir. 1984); accord Cicippio v. Islamic Republic of Iran, 30 F.3d 164, 169 (D.C. Cir. 1994). The Supreme Court has recognized that “Congress’ primary purpose in enacting § 1605(a)(5) was to eliminate a foreign state's immunity for traffic accidents and other torts committed in the United States[.]” Amerada Hess, 488 U.S. at 439-40; see also H.R. Rep. No. 94-1487, at 20-21 (1976), reprinted in 1976 U.S.C.C.A.N. 6604, 6619 (stating that “Section 1605(a)(5) is directed primarily at the problem of traffic accidents but is cast in general terms . . . . It denies immunity as to claims for personal injury or death . . .; the tortious act or omission must occur within the jurisdiction of the United States”). Unlike the commercial activity exception to the FSIA under § 1605(a)(2), which allows consideration of whether a foreign activity had a “direct effect” inside the United States, the noncommercial tort exception “covers only torts occurring within the territorial jurisdiction of the United States.” Amerada Hess, 488 U.S. at 441.

Overall, Jerez argues that the magistrate judge erred in finding the non-commercial tort exception inapplicable because of the continuing nature of his injuries. In particular, Jerez states that the replication of the Hepatitis C virus within his body creates separate and distinct tortious acts within the United States. Pl.’s Objs. at 28. Under a similar theory, Jerez argues that cirrhosis of the liver caused by the Hepatitis C is a separate and distinct tortious act which occurred in the United States and therefore the waiver of sovereign immunity is valid. Id. at 30. However, this interpretation would broaden the noncommercial tort exception far beyond the expectation of Congress. The D.C. Circuit has been vigilant in limiting this exception to circumstances where both the tort and the injury occurred in the United States and rejecting claims to the contrary. See Persinger, 729 F.2d at 839-43 (reviewing the legislative history and concluding that the parents’ emotional distress arising from their son being taken hostage did not fall within the exception because “both the tort and injury must occur in the United States”); Asociación de Reclamantes v. United Mexican States, 735 F.2d 1517, 1525 (D.C. Cir. 1984) (requiring the “entire tort” to have occurred in the United States); see also Cicippio, 30 F.3d at 169. In this case, even if the injuries -- Hepatitis C and cirrhosis of the liver -- occurred solely in the United States, the tortious acts which gave rise to these injuries undoubtedly occurred outside of the United States. See Pl.’s Objs. at 5-6 (detailing the torture which occurred in Cuba and the related “long term psychiatric and physical injuries” which continued to affect Jerez after he “came to the United States”). The magistrate judge properly reviewed the record and rejected Jerez’s theory.

Jerez also argues that Cuba’s failure to advise him of the presence of the virus in his body provides an additional basis under § 1605(a)(5) to find the non-commercial tort exception applicable. Id. at 28-29. The scope of this exception includes both tortious acts and omissions of foreign officials. 18 U.S.C. § 1605(a)(5). The magistrate judge found that Jerez failed to point to evidence that “[t]he Republic of Cuba knew that Plaintiff had contracted Hepatitis C and concealed this fact” and that any “failure to advise . . . would be deemed to have occurred in Cuba.” Jerez, 777 F.Supp.2d at 23 n.36, 25 n.40.

Jerez argues that this was error because any failure to advise should be deemed to have occurred in the United States. Pl.’s Objs. at 28-29. Jerez’s objection relies on the case O’Bryan v. Holy See, 556 F.3d 361 (6th Cir. 2009). In that case, the Sixth Circuit found that the claims based on actions committed abroad fell outside the scope of the exception, but a claim survived “against the Holy See for the actions of its supervising employees occurring in the United States.” Id. at 387-88. However, Jerez misreads O’Bryan in arguing that because Cuba had representatives in the United States who failed to warn Jerez, the omission should be deemed a tort which occurred in the United States under this exception. O’Bryan states that “any portion of plaintiffs’ claim that relies upon acts committed by the Holy See abroad cannot survive” and “plaintiffs cannot pursue claims based upon . . . acts . . . that occurred abroad.” Id. at 385-86. Furthermore, in O’Bryan, the plaintiff advanced ‚Äútheories of liability premised on the conduct of Holy See employees in the United States engaged in the supervision of the allegedly abusive ...


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