Siderman de Blake v. Republic of Argentina

• Decision Date: 22 May 1992
• Docket Number: No. 85-5773,85-5773
• Parties: Susana SIDERMAN de BLAKE, Jose Siderman, Carlos Siderman, and Lea Siderman, individuals, Plaintiffs-Appellants, v. The REPUBLIC OF ARGENTINA, a foreign country; The Province of Tucuman of the Republic of Argentina, a province of a foreign country; Oscar Honorato, Abelardo Garcia, Carlos Rosales, Juan Roman Diosque, Victor Eduardo Molina, General Bussi, Captain Abas, General Forzano, General Merlo, individuals; and Inmobiliaria Del Nor-Oeste, S.A., an Argentine Corporation, Defendants-Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 699

965 F.2d 699

60 USLW 2771

Susana SIDERMAN de BLAKE, Jose Siderman, Carlos Siderman and Lea Siderman, individuals, Plaintiffs-Appellants, v. The REPUBLIC OF ARGENTINA, a foreign country; The Province of Tucuman of the Republic of Argentina, a province of a foreign country; Oscar Honorato, Abelardo Garcia, Carlos Rosales, Juan Roman Diosque, Victor Eduardo Molina, General Bussi, Captain Abas, General Forzano, General Merlo individuals; and Inmobiliaria Del Nor-Oeste, S.A., an Argentine Corporation, Defendants-Appellees.

No. 85-5773.

United States Court of Appeals Ninth Circuit.

Argued and Submitted June 3, 1991.

Decided May 22, 1992.

Michael J. Bazyler, Whittier College School of Law, Paul L. Hoffman, ACLU Foundation of Southern California, Los Angeles, Cal., Scott W. Wellman, Wellman & Cane, Newport Beach, Cal., for plaintiffs-appellants.

Bruno A. Ristau, Kaplan, Russin & Vecchi, Washington, D.C., for defendants-appellees.

Betsy R. Rosenthal, Los Angeles, Cal., for amicus curiae Anti-Defamation League of B'Nai B'Rith.

Appeal from the United States District Court for the Central District of California.

Before: FLETCHER, CANBY and BOOCHEVER, Circuit Judges.

FLETCHER, Circuit Judge:

Susana Siderman de Blake and Jose, Lea, and Carlos Siderman (collectively, "the Sidermans") appeal the dismissal of their action against the Republic of Argentina and the Argentine Province of Tucuman (collectively, "Argentina"). The Sidermans' complaint alleged eighteen causes of action arising out of the torture of Jose Siderman and the expropriation of the Sidermans' property by Argentine military officials. The district court dismissed the expropriation claims on the basis of the act of state doctrine, but granted a default judgment to Jose and Lea Siderman on the torture claims. Argentina then entered its first appearance in the case and moved for relief from judgment on the ground that the Foreign Sovereign Immunities Act ("FSIA"), 28 U.S.C. §§ 1330, 1602-11, rendered it immune from the Sidermans' action. The district court granted the motion and vacated the default judgment. The Sidermans now appeal. We reverse and remand for further proceedings.

FACTS

The factual record, which consists only of the Sidermans' complaint and numerous declarations they submitted in support of their claims, tells a horrifying tale of the violent and brutal excesses of an anti-Semitic military junta that ruled Argentina. On March 24, 1976, the Argentine military overthrew the government of President Maria Estela Peron and seized the reins of power for itself, installing military leaders of the central government and the provincial governments of Argentina. ¹ That night, ten masked men carrying machine guns forcibly entered the home of Jose and Lea Siderman, husband and wife, in Tucuman Province, Argentina. The men, who were acting under the direction of the military governor of Tucuman, ransacked the home and locked Lea in the bathroom. They then blindfolded and shackled 65-year old Jose, dragged him out of his home, tossed him into a waiting car, and drove off to an unknown building. For seven days the men beat and tortured Jose. Among their tools of torture was an electric cattle prod, which they used to shock Jose until he fainted. As they tortured him, the men repeatedly shouted anti-Semitic epithets, calling him a "Jew Bastard" and a "Shitty Jew." They inflicted all of these cruelties upon Jose Siderman because of his Jewish faith.

At the end of this nightmarish week, his body badly bruised and his ribs broken, Jose was taken out of the building and driven to an isolated area, where the masked men tossed him out of the car. The men told Jose that if he and his family did not leave Tucuman and Argentina immediately, they would be killed. On the day of Jose's release, he and Lea fled to Buenos Aires in fear for their lives. Their son Carlos followed shortly thereafter, and the night Carlos left Tucuman, military authorities ransacked his home. In June 1976, Jose, Lea, and Carlos left Argentina for the United States, where they joined Susana Siderman de Blake. She is the daughter of Jose and Lea and is a United States citizen.

Before the hasty flight from Tucuman to Buenos Aires, Jose was forced to raise cash by selling at a steep discount part of his interest in 127,000 acres of land. Prior to their departure for the United States, the Sidermans also made arrangements for someone to oversee their family business, Inmobiliaria del Nor-Oeste, S.A. ("INOSA"), an Argentine corporation. Susana Siderman de Blake, Carlos Siderman and Lea Siderman each owned 33% of INOSA and Jose owned the remaining one percent. Its assets comprised numerous real estate holdings including a large hotel in Tucuman, the Hotel Gran Corona. The Sidermans granted management powers over INOSA to a certified public accountant in Argentina.

After the Sidermans left Argentina for the United States, Argentine military officers renewed their persecution of Jose. They altered real property records in Tucuman to show that he had owned not 127,000, but 127, acres of land in the province. They then initiated a criminal action against him in Argentina, claiming that since he owned only 127 acres he had sold land that did not belong to him. Argentina sought the assistance of our courts in obtaining jurisdiction over his person, requesting via a letter rogatory that the Los Angeles Superior Court serve him with documents relating to the action. The court, unaware of Argentina's motives, complied with the request.

Soon thereafter, while he was travelling in Italy, Jose was arrested pursuant to an extradition request from Argentina to the Italian government. Argentina charged that Jose had fraudulently obtained the travel documents enabling him to leave Argentina in 1976. Jose was not permitted to leave Cremora, Italy, for seven months, and actually was imprisoned for 27 days, before an Italian Appeals Court finally held that Argentina's extradition request would not be honored, as it was politically motivated and founded on pretextual charges.

The Argentine military also pursued INOSA with vigor. In April 1977, INOSA was seized through a sham "judicial intervention," a proceeding in which property is put into receivership. The purported reasons for the intervention were that INOSA lacked a representative in Argentina and that INOSA had obtained excessive funds from a Tucuman provincial bank. Though these reasons were pretexts for persecuting the Sidermans because of their religion and profiting from their economic success, the Sidermans were unable to oppose the intervention because Argentine officials had imprisoned and killed the accountant to whom they had granted management powers over INOSA. In 1978, the Sidermans retained an attorney in Argentina and brought a derivative action in a Tucuman court in an effort to end the intervention. The court ordered that the intervention cease, and the order was upheld by the Supreme Court of Tucuman, but the order remains unenforced and the intervention has continued. Argentine military officials and INOSA's appointed receivers have extracted funds from INOSA, purchased various assets owned by INOSA at sharply discounted prices, and diverted INOSA's profits and revenues to themselves.

In 1982, Jose, Lea, and Carlos, who by then had become permanent residents of the United States, and Susana, a United States citizen since 1967, turned to federal court for relief. They filed a complaint asserting eighteen causes of action based on the torture and harassment of Jose by Argentine officials and the expropriation of their property in Argentina. Named defendants included the Republic of Argentina, the Province of Tucuman, INOSA, and numerous individual defendants who participated in the wrongdoing. In December 1982, the Sidermans properly served Argentina and Tucuman with the Summons and Complaint. The Argentine Embassy subsequently sought assistance from the U.S. State Department, which informed Argentina that it would have to appear and present any defenses it wished to assert to the district court, including the defense of sovereign immunity, or risk a default judgment. The State Department also provided a directory of lawyer referral services. Despite receiving this information, Argentina did not enter an appearance, and the Sidermans filed a motion for default judgment.

On March 12, 1984, the district court dismissed the Sidermans' expropriation claims sua sponte on the basis of the act of state doctrine and ordered a hearing for the Sidermans to prove up their damages on the torture claims. ² The Sidermans moved for reconsideration of the court's dismissal of the expropriation claims. On September 28, 1984, the court denied the motion for reconsideration and entered a default judgment on the torture claims, awarding Jose damages and expenses totalling $2.6 million for his torture claims and awarding Lea $100,000 for her loss of consortium claim. ³

The damages award finally elicited a response from Argentina, which filed a motion for relief from judgment on the ground that it was immune from suit under the FSIA and that the district court therefore lacked both subject matter and personal jurisdiction. The United States filed a suggestion of interest, asking the court to consider the issue of foreign sovereign immunity but indicating no view of the merits. On March 7, 1985, the district court vacated the default judgment and dismissed the Sidermans' action on the ground of Argentina's immunity under the FSIA. ⁴ The Sidermans filed a timely notice of appeal on April 5, 1985. ⁵ We have jurisdiction over the appeal pursuant to 28 U.S.C. § 1291.

DISCUSSION

Until 1952, foreign states and their agencies and instrumentalities enjoyed virtually absolute immunity from suit in the courts of the United States. See Verlinden B.V. v. Central Bank of Nigeria, 461 U.S. 480, 486, 103 S.Ct. 1962, 1967, 76 L.Ed.2d 81 (1983)....