Volloldo v. Ruz
| Decision Date | 24 October 2017 |
| Docket Number | 1:14-MC-25 (LEK/CFH) |
| Parties | ALFREDO VOLLOLDO, et al., Plaintiffs, v. FIDEL CASTRO RUZ, et al., Defendants. ALFREDO VOLLOLDO, et al., Plaintiffs/Petitioners, v. THOMAS P. DINAPOLI, New York State Comptroller, Respondent. |
| Court | U.S. District Court — Northern District of New York |
Plaintiffs Alfredo Volloldo and Gustavo F. Villoldo commenced this action to enforce a Florida state court default judgment against the Republic of Cuba and various Cuban government entities and officials in May 2014. Dkt. Nos. 1 ("Registration of Foreign Judgment"), 6 ("1610(c) Motion"). On January 7, 2016, the Court granted Plaintiffs' 1610(c) Motion and granted, but stayed, Plaintiffs' petition for an order directing Thomas P. DiNapoli, the New York State Comptroller, to turnover assets located in the Northern District that the Comptroller holds as custodian of abandoned property. Dkt. No. 66 ("2016 Order"). Presently before the Court are Plaintiff's request for a final turnover order, Dkt. No. 127 ("Turnover Motion"), and the Comptroller's motion to dismiss for lack of subject matter jurisdiction, Dkt. No. 135 ("Comptroller's Motion"). For the reasons stated below, the Comptroller's Motion is granted, and the Turnover Motion is denied.
The facts underlying this action were detailed in the 2016 Order and will be repeated here only to the extent necessary to resolve the motions currently before the Court. The following facts are drawn from the Florida state court's findings of fact. Dkt. No. 6-8 ("Florida Judgment").
Plaintiffs are the sons of Gustavo Villoldo Argilagos, a dual citizen of the United States and Cuba. Id. at 2. Before the Cuban Revolution in January 1959, Villoldo Argilagos was a successful businessman in Cuba and owned several businesses, including one of the first General Motors dealerships in Cuba, and held numerous pieces of real estate. Id. at 3. After the Revolution, Villoldo Argilagos and his family were targeted by Defendants on account of Villoldo Argilagos's wealth and American citizenship. Id. at 3-4. Villoldo Argilagos and his sons were imprisoned, beaten, and threatened with execution. Id. at 4-5. On several occasions, Villoldo Argilagos was removed from his home at gunpoint. Id. at 5. He was told repeatedly that his family would be killed unless he surrendered his property and took his own life. Id. On February 16, 1959, Villoldo Argilagos's body was found in his home, the result of an apparent suicide. Id. Plaintiffs fled Cuba and have resided in the United States since 1960. Id. at 2. Defendants have continued to pursue efforts to assassinate Plaintiffs and have threatened Plaintiffs with assassination as recently as 2003. Id. at 5.
Plaintiffs initially sued Defendants in the Eleventh Judicial Circuit Court in and for Miami-Dade County, Florida for personal injury and wrongful death. 1610(c) Mot. Defendants were served with process in the Florida action, but failed to appear. Florida Judgment at 2. On August 19, 2011, following a non-jury trial, the Florida state court found that Defendants were liable under the Foreign Sovereign Immunities Act's ("FSIA") terrorism exception, 28 U.S.C. § 1605A, for acts of torture committed against Plaintiffs. Id. at 6. The court entered a default judgment against Defendants and awarded Plaintiffs $2.79 billion, including $1 billion in punitive damages. Id. at 7-8.
On October 25, 2012, the United States District Court for the Southern District of New York extended full faith and credit to the Florida Judgment. Registration of Foreign Judgment. Plaintiffs commenced this action on May 15, 2014 by registering the Southern District judgment in this Court. Id. Plaintiffs subsequently filed a Motion for entry of a 28 U.S.C. § 1610(c) order, 1610(c) Mot., and several petitions to turnover various blocked assets held by the Comptroller, Dkt. Nos. 7 ("Trans-Cuba Petition"), 17 ("Cuban Entities Petition"), 21 ("Escheated Accounts Petition"). The Court issued a writ of execution on July 24, 2014, Dkt. No. 20 ("Writ of Execution"), which it stayed pending further order, Dkt. No. 23.
In the 2016 Order, the Court granted Plaintiffs' Cuban Entities Petition with respect to certain Banco Nacional de Cuba accounts, denied the Trans-Cuba Petition, and stayed the Escheated Accounts Petition. 2016 Order at 39-40. The Court further ordered Plaintiffs to notify interested third parties of the order to turnover the Banco Nacional accounts to allow objections from any individuals who might have a claim to the accounts. Id. at 40. On December 2, 2016,Plaintiffs informed the Court that they had complied with the 2016 Order and that there were "no pending objections to turnover of the Banco Nacional accounts to the Plaintiffs." Turnover Mot. at 2.
Plaintiffs argue that they are entitled to the Banco Nacional accounts pursuant to the 2016 Order and seek an order directing the Comptroller to turnover any funds in the accounts to Plaintiffs. Id. The Comptroller opposes the Turnover Motion, and argues that the Court should vacate the Writ of Execution and dismiss this action for lack of subject matter jurisdiction. Dkt. No. 135-1 ("Memorandum"). Specifically, he argues that the Court lacks subject matter jurisdiction to enforce the Florida Judgment because the Florida court itself lacked jurisdiction. Id. at 5-17. Since no FSIA exception applied, the Comptroller argues, Defendants were immune from suit and the Florida Judgment is void. Id. at 5-7. Plaintiffs oppose the Comptroller's Motion, arguing that the Florida court properly concluded that the FSIA's "terrorism exception" abrogated Defendants' immunity, and, in any event, the Comptroller lacks standing to collaterally attack the Florida Judgment. Dkt. No. 138 ("Opposition") at 4-19.
A fundamental predicate to judgment in the federal courts is the existence of subject matter jurisdiction. "Dismissal of a case for lack of subject matter jurisdiction . . . is proper 'when the district court lacks the statutory or constitutional power to adjudicate it.'" Ford v. D.C. 37 Union Local 1549, 579 F.3d 187, 188 (2d Cir. 2009) (per curiam) (quoting Makarova v. United States, 201 F.3d 110, 113 (2d Cir. 2000)). A lack of subject matter jurisdiction cannot be waived, and may be raised by motion or sua sponte at any time. Transatlantic Marine ClaimsAgency, Inc. v. Ace Shipping Corp., 109 F.3d 105, 107-08 (2d Cir. 1997). "If [a] court determines at any time that it lacks subject-matter jurisdiction, the court must dismiss the action." Fed. R. Civ. P. 12(h)(3). The party asserting subject matter jurisdiction carries the burden of proving its existence by a preponderance of the evidence. E.g., Makarova, 201 F.3d at 113; Augienello v. FDIC, 310 F. Supp. 2d 582, 587-88 (S.D.N.Y. 2004).
The FSIA provides "the sole basis for obtaining jurisdiction over a foreign state in the courts of this country." Argentine Republic v. Amerada Hess Shipping Corp., 488 U.S. 428, 434 (1989). Foreign states are immune from the jurisdiction of federal and state courts unless one of the exceptions contained in §§ 1605-1607 applies. § 1604. The "terrorism exception"—codified at § 1605A—"abrogates immunity for those foreign states officially designated as state sponsors of terrorism by the Department of State where the foreign state commits [torture] or provides material support for the commission of . . . [torture,] and the act results in the death or personal injury of a United States citizen." Weinstein v. Islamic Republic of Iran, 609 F.3d 43, 48 (2d Cir. 2010).1 The claimant or victim must establish that he was a United States national, armed service member, or government employee or contractor at the time of the challenged act. § 1605A(2)(A)(ii). If "the act occurred in the foreign state against which the claim has been brought," the claimant must also "afford[] the foreign state a reasonable opportunity to arbitrate the claim in accordance with the accepted international rules of arbitration." § 1605A(2)(A)(iii).
Plaintiffs make two threshold arguments that the Court must address before analyzing the question of subject matter jurisdiction. First, Plaintiffs argue that the Comptroller lacks standing to collaterally attack the Florida Judgment. Opp'n at 10-11. In a recent case that raised similar jurisdictional questions under the FSIA, the Court held that "a garnishee such as the Comptroller has standing to bring a collateral attack against a jurisdictionally defective default judgment." Martinez v. Republic of Cuba, 221 F. Supp. 3d 276, 282 (N.D.N.Y. 2016) (Kahn, J.) (citing Weininger v. Castro, 462 F. Supp. 2d 457, 473 (S.D.N.Y. 2006)). In any event, the Court has an free-standing duty to assess its jurisdiction independent of the Comptroller's Motion. Transatlantic Marine, 109 F.3d at 107-08; accord Fed. R. Civ. P. 12(h)(3). Therefore, Plaintiffs' argument that the Comptroller lacks standing to challenge the Florida Judgment is unavailing.
Plaintiffs also urge the Court to follow the Southern District's decision in Vera v. Republic of Cuba, 40 F. Supp. 3d 367, 376 (S.D.N.Y. 2014), to afford full faith and credit to the Florida Judgment. Opp'n at 8-10. The Full Faith and Credit Act provides that "judicial proceedings . . . shall have the same full faith and credit in every court within the United States . . . as they have by law or usage in the courts of [the] State [in which they took place]." 28 U.S.C. § 1738. Thus, "a federal court must give to a state-court judgment the same preclusive effect as would be given that judgment under the law of the State in which the judgment was rendered." Migra v. Warren City Sch. Dist. Bd. of Educ., 465 U.S. 75, 81 (1984). However, "a judgment of a court in one State is conclusive upon the merits in a court in another State only if the court...
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