Glen v. Club Mediterranee S.A.

• Decision Date: 07 April 2005
• Docket Number: No. 04-21664-CIV.,04-21664-CIV.
• Citation: 365 F.Supp.2d 1263
• Parties: Elvira de la Vega GLEN and Robert M. Glen, Plaintiffs, v. CLUB MÉDITERRANÉE S.A., a French Corporation, Defendant.
• Court: U.S. District Court — Southern District of Florida

365 F.Supp.2d 1263

Elvira de la Vega GLEN and Robert M. Glen, Plaintiffs, v. CLUB MÉDITERRANÉE S.A., a French Corporation, Defendant.

No. 04-21664-CIV.

United States District Court, S.D. Florida.

April 7, 2005.

COPYRIGHT MATERIAL OMITTED

Michael Olin, Esq., Stephen F. Rosenthal, Esq., Podhurst Orseck, P.A., City National Bank Building, Miami, Andrew H. Marks, Esq., Stuart H. Newberger, Esq., Alyssa Gsell, Esq., Beth Nolan, Esq., James W. Reed, Esq., Crowell & Moring LLP, Washington, DC, Attorney for Plaintiff.

Benjamine Reid, Esq., Carlton Fields, P.A., Miami, Elliot E. Polebaum, Esq., Fried Frank Harris Shriver & Jacobson LLP, Washington, DC, Attorney for Defendant.

ORDER

K. MICHAEL MOORE, District Judge.

THIS CAUSE came before the Court upon the Renewal of Motion to Dismiss the Complaint by Defendant Club Méditerranée, S.A. ("CMSA") (DE # 91).

UPON CONSIDERATION of the motion, responses, and being otherwise fully advised in the premises, this Court enters the following Order, GRANTING the Motion by Defendant CMSA to Dismiss the Complaint.

BACKGROUND

This action arises out of an alleged unlawful and unjust trespass on and use by Defendant CMSA, of beachfront property in Varadero, Cuba, (the "Varadero" property) which is allegedly owned by Plaintiffs, Elvira de la Vega Glen and Robert M. Glen (successor in interest to Ana de la Vega Glen) (collectively the "Glens"). Plaintiffs assert three separate causes of action against CMSA: (1) unjust enrichment; (2) trespass; and (3) violations of the Trading with the Enemy Act, 50 U.S.C.App. § 1 et seq. ("TWEA"). Specifically, the Complaint alleges that CMSA disregarded Plaintiffs' longstanding ownership of the Varadero property, by building and operating a 337-room luxury resort hotel on the property beginning in 1997. Compl. at 1. Plaintiffs claim that CMSA generated millions of dollars of revenues and profits from this "commercial exploitation" of the Varadero property, and that CMSA has "failed and refused to share any of these proceeds or to make any payment whatsoever" to the Glens. Id. Plaintiffs seek compensation for CMSA's alleged wrongful exploitation of the Varadero property and CMSA's alleged unjust enrichment at Plaintiffs' expense. Id. at 1-2. In addition, Plaintiffs allege that CMSA's dealings with the Government of Cuba in connection with the development and operation of the luxury resort hotel on the Varadero property violated TWEA, and seek a declaration that CMSA violated this federal statute. Id. at 2.

In its August 16, 2004 Motion to Dismiss (DE # 29) CMSA sought dismissal of Plaintiffs' Complaint for insufficiency of process, lack of proper venue, lack of subject matter jurisdiction, and failure to state a claim, pursuant to Federal Rules of Civil Procedure 12(b)(1), 12(b)(3), 12(b)(5) and 12(b)(6). Specifically, CMSA argued that: (1) Plaintiffs failed to serve CMSA (2) the act of state doctrine precludes this Court from considering the unjust enrichment and trespass claims; (3) the political question doctrine (or in the alternative, preemption) precludes the Court from considering the unjust enrichment and trespass claims; (4) the local action doctrine precludes this Court's exercise of jurisdiction with respect to the unjust enrichment and trespass claims, or in the alternative, the local action doctrine renders venue improper in this district; (5) the Court lacks jurisdiction to consider Plaintiffs' claim under the TWEA because the statute confers on Plaintiffs no judicially remediable rights; (6) Plaintiffs lack standing to bring a claim under TWEA; and (7) the Complaint fails to state a claim upon which relief can be granted under any applicable law.

On February 16, 2005 this Court granted the CMSA's Motion to Dismiss to the extent that the Motion challenged the service of process as insufficient. The Court granted Plaintiffs an additional thirty (30) days to effect proper service upon CMSA in accordance with the Hague Service Convention. The Court reserved ruling on all other portions of CMSA's Motion to Dismiss and stated that upon being properly served, CMSA may move this Court to renew the Motion. On March 1, 2005, pursuant to Plaintiffs' perfection of service, CMSA renewed its Motion to Dismiss the Complaint. The Court will thus address the remaining grounds of CMSA's Motion to Dismiss.

DISCUSSION

I. THE ACT OF STATE DOCTRINE MANDATES DISMISSAL OF PLAINTIFFS' UNJUST ENRICHMENT AND TRESPASS CLAIMS

As a threshold matter Defendant CMSA argues that the act of state doctrine compels dismissal of this case. Defendant argues that Plaintiffs' claims for unjust enrichment and trespass necessarily hinge on Plaintiffs' alleged ownership of the Varadero property in 1997 and thereafter. Defendant argues that in asserting claims that are predicated on their property interests in an expropriated Cuban property, Plaintiffs are effectively asking this Court to nullify the Cuban government's 1959 expropriation of the Varadero property. Defendant CMSA argues that such evaluation, and thus Plaintiffs claims, are precluded by the act of state doctrine.

A. The Act of State Doctrine

The act of state doctrine is not a jurisdictional doctrine. Rather, it is a doctrine of judicial restraint that prohibits a United States court from passing judgment on the validity of an act of a foreign sovereign taken within its own territory. W.S. Kirkpatrick & Co. v. Environmental Tectonics Corp., 493 U.S. 400, 405, 110 S.Ct. 701, 107 L.Ed.2d 816 (1990); Banco Nacional de Cuba v. Sabbatino, 376 U.S. 398, 401, 84 S.Ct. 923, 11 L.Ed.2d 804 (1964) ("The act of state doctrine... precludes the courts of this country from inquiring into the validity of the public acts a recognized foreign sovereign power committed within its own territory"); Fogade v. ENB Revocable Trust, 263 F.3d 1274 (11th Cir.2001). The court in Banco Nacional de Cuba v. Sabbatino reasoned that:

Every sovereign state is bound to respect the independence of every other sovereign state, and the courts of one country will not sit in judgment on the acts of the government of another, done within its own territory. Redress of grievances by reason of such acts must be obtained through the means open to be availed of by sovereign powers as between themselves.

376 U.S. at 416-417, 84 S.Ct. 923 (quoting Underhill v. Hernandez, 168 U.S. 250, 252, 18 S.Ct. 83, 42 L.Ed. 456 (1897)). The doctrine is based on the "domestic separation of powers, reflecting the strong sense of the Judicial Branch that its engagement in the task of passing on the validity of foreign acts of state may hinder the conduct of foreign affairs." W.S. Kirkpatrick & Co., Inc. v. Environmental Tectonics Corp., Int'l, 493 U.S. 400, 404, 110 S.Ct. 701, 107 L.Ed.2d 816 (1990) (citations omitted). Underlying the act of state doctrine are the principles of "[i]nternational comity, respect for the sovereignty of foreign nations on their own territory, and the avoidance of embarrassment to the Executive Branch in its conduct of foreign affairs." Id. at 408, 110 S.Ct. 701. The doctrine "prohibits the United States courts from reaching the merits of an issue in order to avoid embarrassment of foreign governments in politically sensitive matters and interference with our own foreign policy." Consolidated Development Corp., No. 96-1820-Civ-Graham, at 3 (S.D.Fla. July 30, 1997) (citing In re Grand Jury Proceedings Bank of Nova Scotia, 740 F.2d 817, 831 (11th Cir.1984)).

The Court in W.S. Kirkpatrick, noted that the act of state doctrine is not some vague doctrine of abstention but a "principle of decision binding on federal and state courts alike," whereby "the act within its own boundaries of one sovereign State ... becomes ... a rule of decision for the courts of this country." 493 U.S. at 406, 110 S.Ct. 701; see, e.g., Sabbatino, 376 U.S. at 439, 84 S.Ct. 923 (act of state doctrine "proscribe[d] a challenge to the Cuban expropriation decree"); Fogade, 263 F.3d at 1296 (act of state doctrine precluded challenge to confiscation by Venezuelan government); First Merchants Collection Corp. v. Republic of Argentina, 190 F.Supp.2d 1336, 1339-1340 (S.D.Fla.2002) (act of state doctrine barred inquiry into allegedly illegal confiscation by government of Argentina); see also F. Palicio y Compania, S.A. v. Brush, 256 F.Supp 481, 487 (S.D.N.Y.1966), aff'd 375 F.2d 1011 (2d Cir.1967).

There is, however, a limited legislative exception to the act of state doctrine. This exception, the Second Hickenlooper Amendment (the "Amendment"), provides in relevant part:

Notwithstanding any other provision of law, no court in the United States shall decline on the ground of the federal act of state doctrine to make a determination on the merits ... in a case which a claim of title or other right to property is asserted ... based upon (or traced through) a confiscation or other taking after January 1, 1959, by an act of [ ] state in violation of principles of international law....

22 U.S.C. § 2370(e)(2). This Court, however, is not persuaded that the Second Hickenlooper Amendment applies to the instant action.

First, the confiscated property is real property located outside of the United States. See Compania de Gas de Nuevo Laredo, S.A. v. Entex, Inc., 686 F.2d 322, 327 (5th Cir.1982) ("Congress intended [the Amendment] to be limited to cases involving claims of title with respect to American owned property nationalized by a foreign government in violation of international law, when the property or assets were subsequently located in the United States."); Perez v. Chase Manhattan Bank, 61 N.Y.2d 460, 474 N.Y.S.2d 689, 463 N.E.2d 5, 10 (1984) ("The Hickenlooper amendment does not apply ... to expropriated property that remains in the confiscating country without coming within the territorial jurisdiction of the United States."); Restatement (Third) of the Foreign Relations Law of the United States § 444 cmt. E (1986) ("In order for the Hickenlooper Amendment to...