Opinion ID: 2897977
Heading Depth: 2
Heading Rank: 1

Heading: The Florida Default Judgment

Text: 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 to 3 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§ 1608(e) (requiring FSIA plaintiff to “establish[] his claim or right to relief by 1 Section 1605(a)(7) has since been replaced by 28 U.S.C. § 1605A.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 L. No. 102‐ 256, § 3(a), 106 Stat. 73, 73 (1992) (codified at 28 U.S.C.A. § 1350 Note); see 28 U.S.C. § 1605(e)(1) (repealed) (incorporating above definition); id.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. 4 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. 5 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 enforcement 6 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  (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). 7 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. 8 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. 9