510 F.2d 557 (5th Cir. 1975), 74--1747, Real v. Simon

Docket Nº:74--1747.
Citation:510 F.2d 557
Party Name:Maria del Carmen Llanso de REAL et al., Plaintiffs-Appellants, v. William E. SIMON, as Secretary of the Treasury of the United States ofAmerica, et al., Defendants-Appellees.
Case Date:March 27, 1975
Court:United States Courts of Appeals, Court of Appeals for the Fifth Circuit

Page 557

510 F.2d 557 (5th Cir. 1975)

Maria del Carmen Llanso de REAL et al., Plaintiffs-Appellants,


William E. SIMON, as Secretary of the Treasury of the United

States ofAmerica, et al., Defendants-Appellees.

No. 74--1747.

United States Court of Appeals, Fifth Circuit

March 27, 1975

Rehearing and Rehearing En Banc

Denied 510 F.2d 738.

See 514 F.2d 738.

Page 558

Joseph A. McGowan, Miami, Fla., for plaintiffs-appellants.

Robert W. Rust, U.S. Atty., Clemens Hagglund, Asst. U.S. Atty., Miami, Fla., William B. Saxbe, Atty. Gen., William Olson, Asst. Atty. Gen., Robert L. Keuch, Benjamin C. Flannagan, Thaddeus B. Hodgdon, Jonathan B. Smith, Attys., U.S. Dept. of Justice, Washington, D.C., John J. O'Neill, Law Dept., New York City, for defendants-appellees.

Appeal from the United States District Court for the Southern District of Florida.

Before BELL, AINSWORTH and RONEY, Circuit Judges.

AINSWORTH, Circuit Judge:

This case requires us to undertake the difficult task of resolving a conflict regarding the rights to assets located in the United States blocked by the Secretary of the Treasury but claimed by former Cuban nationals now residing in the United States. Appellants seek to have us reverse the decision of the district court, asserting the property rights of Cuban nationals who have sought refuge in this country from an oppressive, dictatorial regime. The Government of the United States, however, would have us affirm the trial court's judgment on the basis of the important national interest inherent in the conduct of this country's foreign affairs.

Appellants are the surviving heirs of Urbano Real, a Cuban national who died intestate on December 2, 1965, while still a citizen and resident of Cuba. Maria del Carmen Llanso de Real, the widow of Urbano Real, came to this country in June of 1966 after the death of her husband, and presently is an alien residing in Miami, Florida. Mercedes Real de Carillo is the daughter of Urbano Real. She is a naturalized citizen of the United States, and also resides in Miami. Maria Pantin Vitier and Suzanne Pantin Freyre are both granddaughters of Urbano Real, and are daughters of a deceased daughter of Real. Both granddaughters are naturalized citizens of the United States and reside in Miami.

Prior to July 8, 1963, Real and his wife were the joint holders of a securities account with Merrill Lynch, Pierce, Fenner and Smith, a brokerage firm with offices in Miami, Florida. On July 8, 1963, this account, along with all other assets in the United States owned by the Cuban government or Cuban nationals,

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was frozen or 'blocked' by promulgation of the Cuban Assets Control Regulations of the Treasury Department, 31 C.F.R. Part 515. These regulations prohibit the transfer, sale or any other transaction regarding such assets without a license issued by the Treasury Department. See 31 C.F.R. § 515.201 (1974). This action by the United States Government blocked, as of July 8, 1963, $148.8 million of Cuban assets in the United States. It has been the policy of the United States to allow Cuban refugees arriving in this country or taking up residence elsewhere to obtain their blocked assets. Though Urbano Real's family came to this country, Real himself did not or could not leave Cuba. 1 After Real died in Cuba in 1965, his wife left that country for the United States, where she joined her family.

After Mrs. Real arrived in the United States, she attempted to gain possession of the blocked securities account. Mrs. Real was able to obtain a license from the Treasury Department on January 25, 1967, giving her title and possession of one-half the Merrill Lynch securities account, which was her entitlement under the community property law of Cuba. Partial unblocking of the account was authorized under 31 C.F.R. § 515.525 (1974). The other half of the securities account (of the value in excess of $80,000), however, remains blocked, and is the subject of this litigation.

As indicated previously, Urbano Real died without leaving a will. On August 18, 1971, the County Judge's Court of Dade County, Florida, ordered and adjudged that the four plaintiffs in this case were the sole heirs of Urbano Real. The judgment declared that each of the granddaughters was the owner of one-sixth of the estate, and that Real's wife and daughter were each the owners of one-third.

Subsequently, the appellants sought a license from the Treasury Department which would give them their respective shares of the still-blocked portion of the securities account. On September 20, 1971, the Treasury Department granted restricted licenses to the parties, which allowed transfer of the account to the names of the appellants, but required that 'the securities remain in a blocked account with the decedent's interest shown.' This action continued the blocked status of the fund. Appellants' request for an unrestricted license was formally denied on October 22, 1971. This litigation then followed, with the purpose of requiring the Treasury Department to issue appellants an unrestricted license for Urbano Real's securities--in effect, to give each person sole possession and control of her respective share of Urbano Real's estate.

The district court upheld the Treasury Department's refusal to unblock the remaining portion of the securities account. The court rejected appellants' contention that the Treasury's actions were unauthorized or that they constituted an unconstitutional deprivation of property without due process of law in violation of the Fifth Amendment. We reverse the district court's judgment and hold that appellants are entitled to an unrestricted license which will enable each party freely to transfer or dispose of her portion of the securities account.

I. The Statutory Authorization for the Cuban Assets Control Regulations.

Appellants' first contention is that the Cuban Assets Control Regulations are void as applied to them because the regulations lack express congressional authorization. The Government contends that the statutory basis for the regulations is the Trading with the Enemy Act, 50 U.S.C. App. § 1 et seq. The operative provision of the Trading with the Enemy Act is section 5(b), which provides, in part, that:

(b)(1) During the time of war or during any other period of national

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emergency declared by the President, the President may, through any agency that he may designate, or otherwise, and under such rules and regulations as he may prescribe, by means of instructions, licenses, or otherwise--

(B) investigate, regulate, direct and compel, nullify, void, prevent or prohibit, any acquisition holding, withholding, use, transfer, withdrawal, transportation, importation or exportation of, or dealing in, or exercising any right, power, or privilege with respect to, or transactions involving, any property in which any foreign country or a national thereof has any interest, by any person, or with respect to any property, subject to the jurisdiction of the United States . . ..

This nation is under a declaration of national emergency insofar as the Trading with the Enemy Act is concerned, and has been continually since President Truman declared a national emergency in 1950 due to events in Korea. See Exec. Order No. 10896, 25 F.R. 12281 (1960); Exec.Order No. 10905, 26 F.R. 321 (1961); Exec.Order No. 11037, 27 F.R. 6967 (1962)...

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