1 14-3743-cv(L)

Vera v. Republic of Cuba



## In the



# United States Court of Appeals

**For the Second Circuit**

________________

August Term, 2015

(Argued: August 18, 2015 Decided: September 8, 2015)

Docket Nos. 14

‐ 3743

‐ cv(L); 15

‐ 1154

‐ cv(Con)

________________

A LDO V ERA

, J R

.,

as Personal Representative of the Estate of Aldo Vera, Sr.,

Plaintiff

‐ Appellee

,

— v.—

T HE R EPUBLIC OF C UBA

,

Defendant

,

B ANCO B ILBAO V IZCAYA A RGENTARIA

, S.A.,

Appellant.

________________ Before:

C ABRANES

, R AGGI

, and W ESLEY

, Circuit Judges.

________________2 On appeal from orders entered in the Southern District of New York

(Hellerstein, J. ) (1) enforcing an information subpoena against a third

‐ party

foreign bank in connection with plaintiff’s ongoing efforts to enforce a money

judgment against the Republic of Cuba, and (2) denying reconsideration, the

bank moves for a stay pending appeal. We deny the motion as moot because the

challenged decisions are not appealable final orders, and, therefore, we lack

appellate jurisdiction in this matter.

A PPEALS D ISMISSED

.

________________

K ENNETH A. C ARUSO (Kelly A. Bonner, Harold W. Williford, on the

brief ), White & Case LLP, New York, New York, for Appellant

.

J EFFREY E. G LEN

, Anderson Kill P.C., New York, New York (Robert

A. Swift, Kohn, Swift & Graf, P.C., Philadelphia,

Pennsylvania, on the brief ), for Plaintiff

‐ Appellee.

________________

R EENA R AGGI

, Circuit Judge :

Third

‐ party defendant Banco Bilbao Vizcaya Argentaria, S.A. (“BBVA”), a

Spanish bank, appeals from orders entered in the United States District Court for

the Southern District of New York (Alvin K. Hellerstein, Judge ) on September 10,

2014, and March 17, 2015. The first order directs BBVA to comply with an3 information subpoena issued in connection with plaintiff Aldo Vera, Jr.’s attempt

to enforce a $49 million default judgment against the Republic of Cuba; the

second order denies reconsideration of the first. BBVA now moves this court for

a stay of the district court’s enforcement order pending resolution of these

appeals. Vera, Jr., opposes a stay, arguing, inter alia, that this court is without

jurisdiction because the appealed decisions are not final orders under 28 U.S.C.

§ 1291. We agree and, therefore, dismiss the appeals for lack of jurisdiction and

deny the stay motion as moot.

I. Background

A. The Florida Default Judgment

In 2001, Aldo Vera, Jr., acting as representative of his father Aldo Vera,

Sr.’s estate, invoked the terrorism

‐ exception provision of the Foreign Sovereign

Immunities Act (“FSIA”) to sue the Republic of Cuba in Florida state court for

money damages resulting from his father’s 1976 murder in San Juan, Puerto Rico.

See 28 U.S.C. § 1605(a)(7); Final Judgment at 1–4, Vera v. Republic of Cuba, No.

01

‐ 31216 (Fla. Cir. Ct. May 15, 2008) (construing FSIA terrorism exception to4 allow money

‐ damages action against foreign state for extrajudicial killing). 1

Vera, Jr., alleged that his father—formerly Havana’s Chief of Police—fled Cuba

after becoming disillusioned with the Communist regime, residing thereafter in

Florida and Puerto Rico, where he participated in counter

‐ revolutionary

activities. Final Judgment at 5, Vera v. Republic of Cuba, No. 01

‐ 31216 (Fla. Cir.

Ct. May 15, 2008). On October 25, 1976, as Vera, Sr., was emerging from a

political meeting in San Juan, he was shot dead, allegedly by agents acting on

orders of the Cuban government. See id. While BBVA disputes this account,

that issue is not before us. 2 Cuba failed to appear in the Florida action, and, in

2008, after holding a bench trial, the state court entered a default judgment in

Vera, Jr.’s favor for $95,579,591.22. See id. at 1–3, 9–10; see also 28 U.S.C.

§ 1608(e) (requiring FSIA plaintiff to “establish[] his claim or right to relief by

1 Section 1605(a)(7) has since been replaced by 28 U.S.C. § 1605A. Applicable

federal law defines an “extrajudicial killing” as “a deliberated killing not

authorized by a previous judgment pronounced by a regularly constituted court

affording all the judicial guarantees which are recognized as indispensable by

civilized peoples.

. . .” Torture Victim Protection Act of 1991, Pub. L. No. 102

‐

256, § 3(a), 106 Stat. 73, 73 (1992) (codified at 28 U.S.C.A. § 1350 Note); see 28

U.S.C. § 1605(e)(1) (repealed) (incorporating above definition); id. § 1605A(h)(7)

(same).

2 BBVA points to investigative and news reports attributing Vera, Sr.’s death to

criminal rather than political activities. See, e.g., J.A. 324, 332.5 evidence satisfactory to the court” before entry of default judgment against

foreign state).

B. Entry of the Florida Judgment in the Southern District of New York

and Ensuing Collection Proceedings

In 2012, Vera, Jr., again on behalf of his father’s estate, filed suit against the

Republic of Cuba in the Southern District of New York seeking entry of the

Florida judgment under the Full Faith and Credit Act, 28 U.S.C. § 1738. See Vera

v. Republic of Cuba, No. 12 Civ. 1596 (AKH) (S.D.N.Y.) (hereinafter “Vera v.

Republic of Cuba”). After Cuba failed to appear in this action, the district court,

by default, entered the Florida judgment on August 20, 2012, in the amount of

$49,346,713.22, not recognizing that part of the judgment awarding $50 million in

punitive damages. See 28 U.S.C. § 1606 (prohibiting award of punitive damages

against foreign state); Judgment, Vera v. Republic of Cuba, S.D.N.Y. ECF No. 12.

Two months later, on October 11, 2012, the district court authorized Vera, Jr., to

pursue attachment and execution on the judgment. See 28 U.S.C. § 1610(c)

(requiring “reasonable period of time” after entry of judgment before attachment

of foreign state’s assets permitted).

Toward that end, Vera, Jr., issued subpoenas to the New York branches of

various banks, seeking to discover assets that Cuba held at those banks. See Fed.6 R. Civ. P. 69(a)(2); N.Y. C.P.L.R. § 5224(a). The subpoena challenged on this

appeal was directed to BBVA’s New York branch and sought disclosure of all of

Cuba’s sovereign assets held by BBVA worldwide. BBVA responded by

identifying Cuba’s sovereign assets at its New York branch, but it provided no

information about any of Cuba’s assets that the bank may hold abroad.

On November 13, 2013, Vera, Jr., moved to compel BBVA’s compliance

with the subpoena’s request for disclosure of Cuba’s worldwide assets. On

December 6, 2013, BBVA cross

‐ moved to quash the subpoena, arguing that

(1) the subpoena was void ab initio because the FSIA did not support jurisdiction

for Vera, Jr.’s actions against Cuba; and (2) under Daimler AG v. Bauman, 134 S.

Ct. 746 (2014), BBVA was not subject to personal jurisdiction in New York with

respect to assets held abroad.

Meanwhile, starting in February 2013 and for some time thereafter, Vera,

Jr., filed motions in the district court for orders directing various banks to turn

over identified Cuban sovereign assets held at the banks’ New York branches. A

number of banks objected, maintaining that Vera, Jr., had to proceed against

them by “special proceeding” pursuant to N.Y. C.P.L.R. § 5225(b) rather than by

motion. See Fed. R. Civ. P. 69(a)(1) (requiring judgment enforcement7 proceedings to comport with “procedure of the state where the court is

located”). 3 On June 25, 2013, the district court orally directed Vera, Jr., to file and

serve a formal pleading for turnover naming the banks as defendants. The court

explained that this action (1) ensured its jurisdiction to order the banks to turn

over Cuba’s assets, see Koehler v. Bank of Bermuda Ltd., 12 N.Y.3d 533, 540–41,

883 N.Y.S.2d 763, 768–69 (2009) (explaining that use of special proceeding

ensures jurisdiction to order third party to turn over assets); and (2) allowed the

3 The requirement that execution procedures comport with those of the state

where the district court is located yields when a federal statute or the Federal

Rules of Civil Procedure otherwise govern. See Fed. R. Civ. P. 69(a)(1); Schneider

v. Nat’l R.R. Passenger Corp., 72 F.3d 17, 19–20 (2d Cir. 1995). This court has not

spoken in a published opinion to how a party in federal court in New York

satisfies the “special proceeding” requirements of N.Y. C.P.L.R. § 5225(b) given

that the Federal Rules of Civil Procedure recognize only “one form of action—the

civil action.” Fed. R. Civ. P. 2; see generally Saregama India, Ltd. v. Mosley,

Nos. 12

‐ MC

‐ 45

‐ P1, 11

‐ MC

‐ 84

‐ P1 (LAK), 2012 WL 955520, at *1 (S.D.N.Y. Mar. 20,

2012) (citing Rule 2 in observing that “special proceedings in the sense used in

the CPLR are unknown in federal courts”). We need not do so on this appeal.

We note, however, that we have summarily indicated that the filing

requirements of a “special proceeding” under New York law need not be strictly

adhered to as long as there is no prejudice to the opposing party in giving notice

of the claims and framing the issues. See Cordius Trust v. Kummerfeld, 153 F.

App’x 761, 763 (2d Cir. 2005) (summary order) (excusing failure to denominate

document a “petition” as required in New York special proceedings). Moreover,

we have noted that the standards governing N.Y. C.P.L.R. § 5225(b) special

proceedings are similar to those applicable to summary judgment motion

practice in federal courts. See HBE Leasing Corp. v. Frank, 48 F.3d 623, 633 & n.7

(2d Cir. 1995).8 banks to interplead other potential claimants to the assets at issue. See Tr. of

June 25, 2013, at 29–38, Vera v. Republic of Cuba, S.D.N.Y. ECF No. 274; see also

Order Terminating Mots. and Regulating Status, Vera v. Republic of Cuba,

S.D.N.Y. ECF No. 323.

Consistent with the court’s directive, on September 20, 2013, Vera, Jr., filed

with the court, and thereafter served on BBVA and other banks, an omnibus

petition for the turnover of Cuban sovereign assets in New York against which

writs of execution had been levied under the Southern

‐ District

‐ recognized

Florida judgment. See Pet. for Turnover Order ¶¶ 48–49, Vera v. Republic of

Cuba, S.D.N.Y. ECF No. 298. 4

On September 10, 2014, while this turnover petition was pending, the

district court rejected BBVA’s challenges to jurisdiction and ordered BBVA to

“provide full and complete answers with respect to the Republic of Cuba’s assets

located in [BBVA’s] branches outside of, as well as inside, the United States.”

Order at 2, Vera v. Republic of Cuba, S.D.N.Y. ECF No. 677. BBVA both timely

4 The omnibus petition includes claims by two other sets of plaintiffs seeking to

collect unrelated judgments against the Republic of Cuba, which were

consolidated before Judge Hellerstein for administrative purposes.9 appealed and moved for reconsideration, arguing that this court’s intervening

decision in Gucci America, Inc. v. Weixing Li, 768 F.3d 122 (2d Cir. 2014),

compelled the conclusion that BBVA was not subject to general personal

jurisdiction in New York. In a single written opinion issued on March 17, 2015,

the district court both (1) denied reconsideration of its September 20, 2014

enforcement order, and (2) granted the omnibus turnover petition as to Cuba’s

sovereign assets held at BBVA’s New York branch. See 2015 WL 1244050

(S.D.N.Y. Mar. 17, 2015). BBVA timely appealed both orders. 5

BBVA now moves for a stay of the district court’s enforcement order

pending resolution of these appeals, arguing that the district court lacked

jurisdiction to order worldwide discovery. In opposing a stay, Vera, Jr., argues,

inter alia, that this court is without jurisdiction because the appealed decisions

are not final orders under 28 U.S.C. § 1291.

5 BBVA’s appeals from the district court’s subpoena

‐ enforcement order and

denial of reconsideration, Nos. 14

‐ 2743

‐ cv(L) and 15

‐ 1154

‐ cv(Con), were

consolidated by this court and underlie the stay motion presented to this panel.

BBVA’s appeals from the district court’s turnover order and subsequent denial of

reconsideration, Nos. 15

‐ 1147

‐ cv(L) and 15

‐ 1796

‐ cv(Con), have also been

consolidated but are not at issue in the stay motion before this panel.10 II. Discussion

This court has jurisdiction to review “final decisions” of a district court, 28

U.S.C. § 1291, as well as those interlocutory orders specified in 28 U.S.C. § 1292.

Because BBVA asserts jurisdiction only under § 1291, and not under § 1292, 6

we here consider only whether the appealed orders enforcing the subpoena and

denying reconsideration are “final decisions” within the meaning of § 1291. 7

A final decision is one that “ends the litigation on the merits and leaves

nothing for the court to do but execute the judgment.” Coopers & Lybrand v.

Livesay, 437 U.S. 463, 467 (1978) (internal quotation marks omitted); accord Cox

v. United States, 783 F.3d 145, 147 (2d Cir. 2015). Under the collateral order

doctrine, an interlocutory order can also be deemed final and immediately

6 Notably, the district court did not here certify its enforcement order for

interlocutory appeal pursuant to 28 U.S.C. § 1292(b) (allowing Court of Appeals,

in its discretion, to hear interlocutory appeal from non

‐ final order where district

court certifies that order “involves a controlling question of law as to which there

is substantial ground for difference of opinion and that an immediate appeal

from the order may materially advance the ultimate termination of the

litigation”).

7 Because we determine the finality of an appealed order in the first instance, we

need not attempt to decide what the district court was referencing when, in

denying a stay of discovery pending appeal, the district court stated on June 4,

2015, that “the proceedings leading to this decision are as final as can be.” Order

at 6, Vera v. Republic of Cuba, S.D.N.Y. ECF No. 789.11 appealable under § 1291 if it “(1) conclusively determines a disputed question;

(2) resolves an important issue completely separate from the merits of the action;

and (3) is effectively unreviewable on appeal from final judgment.” EM Ltd. v.

Republic of Argentina, 695 F.3d 201, 205–06 (2d Cir. 2012); see Cohen v.

Beneficial Indus. Loan Corp., 337 U.S. 541, 545–47 (1949). The orders here at

issue do not qualify as final decisions in either of these respects.

As precedent makes clear, “[u]nder traditional finality principles, a district

court’s decision to compel compliance with a subpoena or to deny a motion to

quash a subpoena is generally not a ‘final decision’ and therefore is not

immediately appealable.” In re Air Crash at Belle Harbor, 490 F.3d 99, 104 (2d

Cir. 2007) (internal quotation marks omitted). To obtain immediate appellate

review of such an order absent § 1292(b) certification, the subpoenaed party must

typically “defy the district court’s enforcement order, be held in contempt, and

then appeal the contempt order, which is regarded as final under § 1291.” Id.

(internal quotation marks omitted). This process, which recognizes only the

contempt judgment, not the underlying enforcement order, as a final decision

subject to appeal, “promotes the strong congressional policy—embodied in 28

U.S.C. § 1291—against piecemeal reviews, and against obstructing or impeding12 an ongoing judicial proceeding by interlocutory appeals.” Id. at 105 (internal

quotation marks omitted). The availability to BBVA of review upon contempt

also precludes application of the collateral order doctrine, which BBVA does not

invoke in any event. See Gross v. Rell, 585 F.3d 72, 95 (2d Cir. 2009) (stating that

arguments not raised on appeal are deemed waived). Compare Gucci Am., Inc.

v. Weixing Li, 768 F.3d at 141–42 (reviewing validity of subpoena issued to third

‐

party bank where bank defied enforcement order and was cited for contempt),

with EM Ltd. v. Republic of Argentina, 695 F.3d at 206–07 (holding that collateral

order doctrine afforded Argentina immediate review of order requiring foreign

bank to disclose Argentina’s worldwide assets because subsequent appellate

review was unavailable and Argentina, as judgment debtor rather than party to

whom disclosure order was directed, could not obtain review through

disobedience and contempt).

The fact that the challenged orders are part of post

‐ judgment litigation

warrants no different conclusion. In such circumstances, the relevant “‘final

decision’ is not the underlying judgment,” i.e., the Florida judgment that Vera,

Jr., was “attempting to enforce, but the subsequent judgment that concludes the

collection proceedings.” EM Ltd. v. Republic of Argentina, 695 F.3d at 205.13 Absent defiance and contempt, appellate review of an order enforcing a

subpoena—even one directed to a third party—is generally unavailable until the

collection proceedings terminate, at which point the order will merge into the

final judgment effecting that termination. See id. at 205–06 (holding that

discovery order directed to third

‐ party bank is not “final decision” because it

does not terminate creditors’ collection proceedings against Argentina); accord

United States v. Fried, 386 F.2d 691, 693–95 (2d Cir. 1967) (Friendly, J.) (holding

that decision to enforce subpoena against third party in post

‐ judgment collection

proceedings was not appealable final order).

In urging otherwise, BBVA cites cases recognizing some subpoena

‐

enforcement orders as § 1291 final decisions. In those cases, however, the orders

were issued to benefit proceedings pending before other authorities. Because the

enforcement orders granted all relief sought and thus concluded the work of the

issuing district courts, the orders were akin to final judgments, even if not

denominated as such. See United States v. Constr. Prods. Research, Inc., 73 F.3d

464, 469 (2d Cir. 1996) (holding that order directing witness to testify before

administrative agency could be appealed immediately without defiance and

contempt); Dynegy Midstream Servs., LP v. Trammochem, 451 F.3d 89, 92–94 (2d14 Cir. 2006) (holding same for order directing compliance with arbitrator’s

subpoena). In such circumstances, “[t]he litigation to enforce the subpoena is an

entirely self

‐ contained court proceeding, and the court’s order compelling

compliance completely dispose[s] of the case, leaving nothing more for the court

to do but enforce the judgment.” Midstream Servs., LP v. Trammochem, 451

F.3d at 94; see Cobbledick v. United States, 309 U.S. 323, 330 (1940) (holding that,

once court ordered witness to testify before commission, “there remain[ed]

nothing for it to do”). That is not this case. The Southern District order

compelling BBVA’s compliance with the challenged subpoena was in furtherance

of collection proceedings against Cuba that were, and remain, pending in that

court, not in some other tribunal.

The same reasoning defeats BBVA’s reliance on 28 U.S.C. § 1782 to

establish the finality of the challenged orders. Section 1782(a) allows United

States courts to order discovery “for use in a proceeding in a foreign or

international tribunal.” Because the issuance of such an order concludes all

proceedings before the issuing district court, we have recognized § 1782 orders

as final decisions subject to immediate appeal. See Chevron Corp. v. Berlinger,

629 F.3d 297, 306 (2d Cir. 2011). But BBVA was not here subpoenaed to provide15 discovery for use in a foreign tribunal; it was subpoenaed to provide information

in a collection proceeding pending in the Southern District—the same court that

issued the discovery order in question. BBVA nevertheless maintains that the

§ 1782 analogy is apt because the only subpoenaed information it has withheld

pertains to Cuba’s assets outside the United States, and the district court cannot

order the turnover of BBVA’s extraterritorial assets under New York’s “separate

entity rule.” See Motorola Credit Corp. v. Standard Chartered Bank, 24 N.Y.3d

149, 158–59, 996 N.Y.S.2d 594, 597–98 (2014) (holding that assets held at bank’s

foreign branches are beyond reach of New York post

‐ judgment collection

proceedings against bank’s New York branch). Thus, BBVA argues, because

compliance with the enforcement order can provide discovery of use only in

foreign proceedings, it should be deemed the equivalent of a § 1782 final decision

subject to immediate appeal.

The argument is unpersuasive because it requires judicial speculation to

identify finality. Although BBVA maintains that its compliance with the

enforcement order will yield information that can support collection efforts only

in foreign courts, until the district court actually reviews such compliance, it

cannot determine what authority it may have—whether in personam or in rem,16 whether over BBVA or other parties, whether directly or through requests for

foreign judicial assistance—to take actions to collect additional identified assets

in satisfaction of the entered judgment. We express no view on this matter here.

We conclude only that, in these circumstances, BBVA cannot demonstrate that

the enforcement order, or the order denying its reconsideration, “end[ed] the

litigation on the merits and le[ft] nothing [more] for the court to do.” Coopers &

Lybrand v. Livesay, 437 U.S. at 467 (internal quotation marks omitted).

To avoid this conclusion, BBVA attempts to distinguish various

proceedings: (1) the Southern District turnover proceeding, in which it is named

as a defendant; (2) the Southern District action to register and collect the Florida

judgment, to which it is not a party; and (3) the original Florida state

‐ court action

under the FSIA. The endeavor need not detain us because, even if these

proceedings are distinct actions—a question we do not decide, particularly as to

the first two proceedings—that does not help BBVA demonstrate that the

challenged orders are final decisions. We have already explained that the finality

of the underlying Florida judgment does not determine the finality of the

enforcement order issued by the district court. See EM Ltd. v. Republic of

Argentina, 695 F.3d at 205. Whether or not the district court’s turnover order is a17 final decision as to assets already identified and subject to writs of execution, that

order plainly does not encompass the unidentified extraterritorial assets that are

the subject of the challenged orders. As for the registration and collection action,

because we have above determined that it is not yet concluded, an order

enforcing a subpoena issued in that action is not a final decision. See In re Air

Crash at Belle Harbor, 490 F.3d at 104–05.

III. Conclusion

To summarize, BBVA has failed to demonstrate that the orders challenged

on this appeal (1) enforcing an information subpoena, and (2) denying

reconsideration of the enforcement order, are final decisions that ended the

collection litigation in which they were issued. Thus, we lack jurisdiction under

28 U.S.C. § 1291 to review these orders.

Accordingly, while BBVA’s motion to file an oversized reply brief in

support of its motion for a stay pending appeal is GRANTED, the appeals

docketed under Nos. 14

‐ 3743

‐ cv(L) and 15

‐ 1154

‐ cv(Con) are DISMISSED for lack

of jurisdiction, and BBVA’s motion for a stay pending appeal and the motion of

the Institute of International Bankers and the European Banking Federation to

file an amicus curiae brief on appeal are DENIED AS MOOT.