Weininger v. Castro

Decision Date17 November 2006
Docket NumberNo. 05 Civ. 7214(VM).,05 Civ. 7214(VM).
Citation462 F.Supp.2d 457
PartiesJanet Ray WEININGER, Plaintiff, v. Fidel CASTRO, et al., Defendants.
CourtU.S. District Court — Southern District of New York

James Wilson Perkins, Greenberg Traurig, LLP, New York City, for Janet Ray Weininger.

Bryan T. West, Joseph A. DeMaria, Tew Cardenas LLP, Miami, FL, for Dorothy Anderson McCarthy.

James Loran Kerr, Karen E. Wagner, Davis Polk & Wardwell, New York City, Robert Lee Muse, Muse & Associates, for JP Morgan Chase Bank.

Robert Lee Muse, Muse & Associates, Washington, D.C., for The Cuban Electric Company.

DECISION AND ORDER

MARRERO, District Judge.

                Table of Contents
                Page
                I. BACKGROUND ..................................................................463
                     A. THE WEININGER JUDGMENT ...................................................463
                     B. THE McCARTHY JUDGMENT ....................................................466
                     C. JPM CHASE'S CROSS-MOTION FOR RELIEF IN THE NATURE
                         OF INTERPLEADER .........................................................467
                 II. STANDARD OF REVIEW ..........................................................467
                III. DISCUSSION ..................................................................467
                     A. ENFORCEABILITY OF THE WEININGER AND McCARTHY
                         JUDGMENTS ...............................................................469
                        1. The Full Faith and Credit Doctrine ....................................470
                        2. Recognition by Other Courts ...........................................476
                     B. TRIA SECTION 201(a) ......................................................477
                        1. Subject Matter Jurisdiction ...........................................477
                
                        2. TRIA § 201(a) .........................................................479
                           a. A Judgment Against a Terrorist Party ...............................479
                           b. A Claim Based on an Act of Terrorism Or a Claim for Which the
                                Terrorist Party Is Not Immune under § 1605(a)(7) .................479
                           c. Blocked Assets .....................................................480
                           d. Compensatory Damages ...............................................480
                           e. Execution Upon the Assets of an Agency or Instrumentality of a
                                Terrorist Party ..................................................481
                               (i) Placing TRIA in Context in the FSIA ...........................481
                              (ii) The Effect of TRIA upon Bancec ................................483
                        3. Subject Matter Jurisdiction through Ancillary Jurisdiction ............489
                        4. Personal Jurisdiction .................................................490
                        5. Whether the Assets Belong to Agencies or Instrumentalities of Cuba.....494
                                      i. The EMTELCUBA Account ...................................494
                                     ii. The AT & T Long Lines Account ...........................496
                                    iii. The Rabinowitz Boudin Account ...........................497
                     C. TURNOVER PURSUANT TO CPLR § 5225(b) ......................................499
                     D. JPM CHASE'S MOTION FOR INTERPLEADER RELIEF ...............................499
                        1. Interpleader Relief ...................................................499
                        2. Attorney's Fees and Costs .............................................501
                 IV. ORDER .......................................................................502
                

Plaintiffs Janet Ray Weininger ("Weininger") and Dorothy Anderson McCarthy ("McCarthy") (collectively, "Plaintiffs") each filed motions for partial summary judgment for turnover orders pursuant to Federal Rules of Civil Procedure 13 and 69 and New York Civil Practice Law and Rules ("CPLR") § 5225(b). Defendant JPMorgan Chase Bank, N.A. ("JPM Chase") opposed Plaintiffs' motions for summary judgment and cross-moved for discharge in interpleader, as well as discharge pursuant to CPLR §§ 5209 and 5239.1 Adverse claimant-respondents AT & T Corp. ("AT & T") and Cuban American Telephone and Telegraph Company ("CATT"), a wholly-owned subsidiary of AT & T, opposed JPM Chase's cross-motion for discharge in interpleader to the extent that such motion requested discharge of funds that AT & T and CATT claimed were the sole property of AT & T and/or CATT. The Court has reviewed the submissions from Plaintiffs, JPM Chase, AT & T and CATT, the amicus curiae submission from the Cuban Electric Company ("CEC"), and a letter dated January 6, 2006 from the U.S. Department of Justice, expressing the position of the United States in this matter.2

Plaintiffs seek an order directing turnover of certain funds held by garnishees JPM Chase and Rabinowitz, Boudin, Standard, Krinsky & Lieberman, P.C., ("Rabinowitz Boudin") (collectively, "Garnishees"). Specifically, Plaintiffs seek turnover of funds in the following accounts: (i) AT & T Long Lines (Account No. G00875) (hereinafter the "AT & T Long Lines Account") (of which CATT claims ownership of $6,332,843.49, which amount (and interest thereon) has been voluntarily exempted by Petitioners from the scope of the requested order); (ii) Rabinowitz Boudin Republic of Cuba (Account No. 092-6371190) (hereinafter the "Rabinowitz Boudin Account"); and (iii) Empresa de Telecomunicaciones de Cuba (Account No. 395-507995) (hereinafter the "EMTELCUBA Account") (collectively the "Accounts").3 The funds sought were blocked by the United States pursuant to the Cuban Assets Control Regulations ("CACR"), 31 C.F.R. Part 515, as authorized by Trading with the Enemy Act, 50 U.S.C.App. §§ 1-44, as sanctions against Cuba in response to the expropriation of Americans' property in Cuba.

None of the judgment debtors has appeared at any stage of these proceedings. Additionally, Rabinowitz Boudin has not appeared in this action.

I. BACKGROUND4
A. THE WEININGER JUDGMENT

Weininger, invoking amendments to the Foreign Sovereign Immunities Act ("FSIA") that removed the immunity of foreign countries from suits in United States courts for certain state-sponsored wrongful conduct, see 28 U.S.C. § 1605(a)(7), obtained a default judgment in Florida state court against the Republic of Cuba, Fidel Castro, Raul Castro, and the Army of the Republic of Cuba. Weininger's Florida action was grounded on the death of her father, Thomas Willard Ray, who was killed by Cuban soldiers during events surrounding the Bay of Pigs invasion by Cuban exiles and their supporters in 1961. Weininger's default judgment was rendered by the Circuit Court for the Eleventh Judicial Circuit in and for Miami-Dade County (the "Florida Circuit Court") on June 15, 2005. See Weininger v. Castro, No. 03-22920 CA 20 (Fla. Cir. Ct., 11th Cir., Miami-Dade Cty., June 15, 2005) ("Weininger Judgment") (attached as Ex. B to Perkins Decl.). The amount of compensatory damages awarded by Weininger's judgment is $23,939.301.95, including interest through December 27, 2005. Weininger commenced the instant litigation in state court by seeking summary judgment in lieu of complaint to domesticate the Florida state court judgment. On August 1, 2005, Weininger obtained an attachment order in New York State Supreme Court, New York County, directing the Sheriff of the City of New York to levy upon property held at JPM Chase as Garnishee in which the judgment debtors have an interest, naming specifically the three accounts mentioned above. On or about August 4, 2005, the sheriff levied upon JPM Chase, and in response, on August 11, 2005, JPM Chase served its garnishment statement pursuant to CPLR § 6219. In that statement, JPM Chase indicated that none of the accounts on its books had been opened in the name of any of the judgment debtors, but that the three specified accounts represented deposit debts owed to "agencies or instrumentalities" of the Republic of Cuba, and that the Republic of Cuba "may have an indirect or contingent interest" in the accounts. (Letter from JPM Chase to Sheriff, dated Aug. 11, 2005 ("JPM Chase Garnishee Statement"), attached as Ex. A to Perkins Decl.) JPM Chase further indicated that all such accounts were blocked pursuant to the Cuba Assets Control Regulations, 31 C.F.R. Part 515.

JPM Chase removed the action to federal court on August 12, 2005, and on September 8, 2005 filed a third-party petition for interpleader relief against Weininger, McCarthy, and various other parties whom JPM Chase alleged may have an interest in the accounts. In particular, JPM Chase named (1) Rabinowitz Boudin in its capacity as alleged fiduciary in respect of the blocked Rabinowitz Boudin Account; (2) Banco Nacional de Cuba ("Banco Nacional"); (3) Empresa Cuhana Exportadora de Alimentos y Productos Varios ("CUBAEXPORT"); (4) Empresa de Telecomunicaciones Internacionales de Cuba ("EMTELCUBA"); (5) Empresa de Radiocomunication y Difusion de Cuba ("RADIOCUBA"); (6) Empresa de Telecomunicaciones de Cuba SA ("ETECSA") (7) AT & T; and (8) CATT.5 JPM served a summons, notice of petition and third-party petition on each of these adverse claimants. AT & T and CATT were served pursuant to agreement with counsel. (See Kerr Suppl. Decl. ¶¶ 19, 36.) Rabinowitz Boudin was served by hand on October 5, 2005. (See Kerr Suppl. Decl. ¶¶ 17, 34.) After being served with JPM Chase's interpleader petition, Rabinowitz Boudin twice requested additional time to respond, first until October 31, 2005, then until November 4, 2005, and the parties so stipulated. (See Kerr Suppl. Decl. ¶¶ 18, 35.) To date, no response has been made by Rabinowitz Boudin to JPM Chase's petition.

JPM Chase served the alleged agencies and instrumentalities of Cuba, or entities sited only in Cuba (such as ETECSA.), pursuant to § 1608(b)(3)(B) of the FSIA by causing the summons, notice of petition, and third-party petition, in English and Spanish, to be sent by the Clerk of Court by registered mail,...

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