Wells Fargo Bank, N.A. v. Caballero

Decision Date25 February 2020
Docket Number4:19-CV-04141-KES
PartiesWELLS FARGO BANK, N.A., Plaintiff, v. ANTONIO CABALLERO, KEITH STANSELL, MARC GONSALVES, THOMAS HOWES, JUDITH G. JANIS, GREER C. JANIS, MICHAEL I. JANIS, JONATHAN N. JANIS, OLIVIA PESCATORE, JOSH PESCATORE, JADA PESCATORE, JARROD PESCATORE, JORDAN PESCATORE, CAROL PESCATORE HARPSTER, individually and as the representative of the Estate of Frank Pescatore Sr., RICHARD PESCATORE, JOHN PESCATORE, and CAROLYN PESCATORE, BANCO CONTINENTAL S.A., GOVERNMENT OF HONDURAS, INVERSIONES CONTINENTAL (PANAMA), S.A. DE C.V., FRANK PESCATORE SR., RICHARD PESCATORE, CAROLYN PESCATORE, JOHN PESCATORE, CHRISTOPHER T. JANIS, individually and as personal representative and sole heir of the Estate of Greer C. Janis, MICHAEL I. JANIS, JONATHAN N. JANIS, Defendants.
CourtU.S. District Court — District of South Dakota

ORDER DENYING MOTION TO TRANSFER AND DISMISSING THE CASE

Keith Stansell, Marc Gonsalves, Thomas Howes, Judith Janis, Christopher Janis, Michael Janis, Jonathan Janis (the Stansell ATA Judgment Creditors), and Olivia Pescatore, Josh Pescatore, Jada Pescatore, Jarrod Pescatore, Jordan Pescatore, Carol Pescatore Harpster, individually and as representative of the Estate of Frank Pescatore Sr., Richard Pescatore, John Pescatore, and Carolyn Pescatore (the Pescatore ATA Judgment Creditors) (collectively, the ATA Judgment Creditors) move to transfer the interpleader action under Federal Rule of Civil Procedure 12(b)(3) and 28 U.S.C. §§ 1404(a)and 1406(a) to the United States District Court for the District of Colombia because venue is improper in the District of South Dakota. Docket 23. Antonio Caballero and Wells Fargo Bank oppose the motion and argue that venue is proper in the District of South Dakota. Dockets 27, 52. For the following reasons, the court denies the motion to transfer and dismisses the case.

BACKGROUND

Wells Fargo filed this interpleader action on August 14, 2019, in the District of South Dakota. Docket 1. Wells Fargo is a financial service company with its headquarters in San Francisco, California. Docket 6 ¶ 12. In its first amended complaint, Wells Fargo alleges that it is "confronted with the imminent prospect of competing claims" by the interpleader defendants to certain blocked assets held by Wells Fargo. Id. ¶ 11; see also id. ¶ 1.

Three groups of judgment creditors obtained judgments against Fuerzas Armadas Revolucionarias de Columbia (FARC), a/k/a Revolutionary Armed Forces of Colombia, and related/additional parties under the Alien Tort Statute (ATS) and the Anti-Terrorism Act (ATA): Caballero, the Stansell ATA JudgmentCreditors, and the Pescatore ATA Judgment Creditors. Id. ¶¶ 1, 13-15. FARC was designated as a Foreign Terrorist Organization, as Specially Designated Global Terrorists, and as a significant foreign narcotics trafficker under various federal statutes and by federal agencies. Id. ¶ 2.1 In October of 2015, Banco Continental, the account holder of FARC's assets, was designated as a Specially Designated Narcotics Trafficker. Id. ¶ 3. Because of these designations, the assets of Banco Continental were blocked. Id. ¶ 4. Wells Fargo, as a bank that holds or received assets of an Office of Foreign Assets Control (OFAC) designated entity, was required to freeze the assets in a special, separate bank account. Id.

Caballero is a resident of Florida. Id. 13. Caballero was a plaintiff in an action in the 11th Judicial District Court in Miami-Dade County, Florida. Id. On November 18, 2014, Caballero received a judgment against FARC in the amount of approximately $191 million under the ATA, the Racketeer Influenced and Corrupt Organizations Act, and foreign law. Id. On October 30, 2018, Caballero domesticated the final judgment from the Florida action in South Dakota and initiated a garnishment action in the Second Judicial Circuit, Minnehaha County Circuit Court. Id. ¶¶ 13, 22. On January 18, 2019, Wells Fargo removed the garnishment action to federal court; the garnishment action is currently pending before this court. Id. ¶ 23; see Notice of Removal,Caballero v. Fuerzas Armada Revolucionarias de Colum. et al., No. 4:19-CV-04011-KES, Docket 1 (D.S.D.) (hereinafter "garnishment action"). In the garnishment action, the ATA Judgment Creditors filed a motion to intervene. See Motion to Intervene, Caballero v. FARC et al., 4:19-CV-04011-KES, Docket 4. The court denied the motion on July 11, 2019. See Order Denying Motion to Intervene, Caballero v. FARC et al., No. 4:19-CV-04011-KES, Docket 23. On July 12, 2019, Caballero filed a motion for entry of turnover judgment, which is still pending. See Motion for Entry of Turnover Judgment, Caballero v. FARC et al., No. 4:19-CV-04011-KES, Docket 40.

The Stansell ATA Judgment Creditors are residents of Florida, Connecticut, Alabama, New York, and Virginia. Docket 6 ¶ 14. The Stansell ATA Judgment Creditors were plaintiffs in an action in the United States District Court for the Middle District of Florida (Stansell v. Revolutionary Armed Forces of Colom., et al., No. 8:09-CV-2308-T-26MAP (M.D. Fla.)). Id. In 2010, the Stansell ATA Judgment Creditors received a judgment against FARC in the amount of approximately $318 million under the ATA. Id.

The Pescatore ATA Judgment Creditors are residents of Alabama and New Jersey. Id. 15. The Pescatore ATA Judgment Creditors were plaintiffs in an action in the United States District Court for the District of Columbia (Pescatore et al. v. Pineda et al., No. 1:08-CV-02245-RMC (D.D.C.). Id. In 2010, the Pescatore ATA Judgment Creditors received a judgment against FARC in the amount of approximately $69 million under the ATA. Id.

The three groups of judgment creditors seek to recover the same blocked assets, approximately $13,117,136, held by Wells Fargo. Id. ¶ 6. Each of the judgment creditors have served Wells Fargo as to the blocked assets and claim that the blocked assets should be turned over to them in satisfaction of their judgments. Id. ¶ 7. The Pescatore ATA Judgment Creditors have a writ of attachment issued on November 18, 2018, and served the writ on Wells Fargo on December 4, 2018. Id. ¶ 7(a). Caballero has a summons of garnishment issued on December 21, 2018, and served the summons on Wells Fargo on December 21, 2018. Id. ¶ 7(b). The Stansell ATA Judgment Creditors have a writ of attachment issued on August 27, 2019, and served the writ on Wells Fargo on September 6, 2019. Id. ¶ 7(c). Wells Fargo alleges that the competing writs and summons "create a legitimate fear of multiple liability, inconsistent obligations, and vexatious litigation for Wells Fargo." Id. ¶ 8.

In addition to the judgment creditors, Wells Fargo alleges that Banco Continental, the Government of Honduras, and Inversiones Continental (Panama), S.A. de C.V., a/k/a Grupo Continental, all have interests in the blocked assets. Id. ¶¶ 16-18, 27-29. Banco Continental was a bank headquartered in San Pedro Sula, Honduras. Id. ¶ 16. Banco Continental is the account holder of the blocked assets. Id. ¶ 3. In October of 2015, the Government of Honduras initiated liquidation proceedings of Banco Continental. Id. ¶ 16. Banco Continental is currently under the control of the Honduran government and is managed by a governmental-appointedliquidator. Id. ¶¶ 16-17. Grupo Continental is a holding company and parent company of Banco Continental in Panama. Id. ¶ 18.

There are an additional eight pending motions before this court: motion to dismiss complaint in interpleader (Docket 4); motion to dismiss first amended complaint (Docket 7); motion for leave to amend first amended interpleader complaint (Docket 28); motion to intervene (Docket 32); motion to stay (Docket 37); motion requesting an order restraining prosecution (Docket 41); motion for status conference (Docket 61); and motion to strike (Docket 66).

DISCUSSION

I. Venue

The ATA Judgment Creditors move to transfer venue to the United States District Court for the District of Columbia under Federal Rule of Civil Procedure 12(b)(3) and 28 U.S.C. §§ 1404(a) and 1406(a). Docket 23. Wells Fargo's complaint relies upon 28 U.S.C. § 1391(b)(2) to establish that venue is proper in this district. Docket 6 ¶ 19. Section 1391(b)(2) authorizes the bringing of a civil action in "a judicial district in which a substantial part of the events . . . giving rise to the claim occurred[.]"

The ATA Judgment Creditors contend that Wells Fargo's reliance on this section is incorrect because 28 U.S.C. § 1397 controls and the District of South Dakota is not the proper venue. Docket 23 at 1; Docket 24 at 3. Caballero opposes the motion, arguing that venue is proper in the District of South Dakota because the interpleader action was filed after the garnishment action and pertains to the blocked assets located in South Dakota. Docket 27 at 3-4.Wells Fargo joins in Caballero's arguments as they pertain to proper venue. Docket 52.

A party may request for a court to transfer a case from its current judicial district to a different judicial district under either 28 U.S.C. §§ 1404(a) or 1406(a). When deciding which of the two venue statutes to invoke, however, a party must first determine whether venue was laid in a proper district when the suit was filed. See Van Dusen v. Barrack, 376 U.S. 612, 633-34 (1964). "Although both sections were broadly designed to allow transfer instead of dismissal, § 1406(a) provides for transfer from forums in which venue is wrongly or improperly laid, whereas, in contrast, § 1404(a) operates on the premises that the plaintiff has properly exercised his venue privilege." Id. at 634.

To determine whether venue is proper in a civil action, courts generally look to 28 U.S.C. § 1391. The general venue provisions of § 1391 apply to Rule 22 interpleader actions. See State Farm Fire & Cas. Co. v. Tashire, 386 U.S. 523, 529 n.3 (1967); see also 7 Charles Alan Wright & Arthur R. Miller, Federal Practice & Procedure Civil § 1712 (3d ed. 2019). Venue in a statutory...

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