AMERICAN CENTER FOR CIVIL JUSTICE, INC. v. AMBUSH
3:21-cv-02267
D.N.J.Dec 3, 2021Background
- ACCJ (a nonprofit litigating for terrorism victims) and Ambush entered a 2012 Settlement Agreement resolving disputes arising from the Franqui litigation; Paragraph 6 imposed liquidated damages for breaches and specified the U.S. District Court for the District of Columbia as the forum and that the Agreement be construed under D.C. law.
- Prior litigation: Ambush lost in Berganzo (affirmed by the First Circuit) and a Domenech proceeding resulted in two pots of funds (Pot One: ACCJ-entitled; Pot Two: disputed fees). Ambush moved to intervene in Domenech (2013) seeking fees from Pot Two.
- In 2015 Ambush sued ACCJ in D.C. alleging breach of the Settlement Agreement and multiple RICO counts (the complaint mixed Franqui-related and separate alleged misconduct, some post-dating the Agreement).
- ACCJ filed Chapter 11 in New Jersey (2018); Ambush filed a $31.8M proof of claim in the bankruptcy attaching his 2015 complaint. ACCJ objected and counterclaimed for breaches of the Settlement Agreement.
- The Bankruptcy Court expunged Ambush’s claim and granted summary judgment against ACCJ’s counterclaim on multiple grounds (statute of limitations and merits). District Court affirmed most rulings but reversed the Bankruptcy Court’s choice-of-law/statute-of-limitations analysis and held New Jersey’s six-year limitations period applies to the Domenech-related claim.
Issues
| Issue | ACCJ's Argument | Ambush's Argument | Held |
|---|---|---|---|
| Which statute of limitations governs ACCJ’s Domenech-related counterclaim? | New Jersey six-year period should apply (USBC applied wrong rule); challenge to USBC’s use of D.C. 3-year. | D.C. 3-year limitations (via Agreement’s D.C. choice-of-law/choice-of-forum). | District Court: USBC misapplied choice-of-law layering; New Jersey six-year statute governs (reversing use of D.C. 3-year). |
| Did Ambush’s 2013 motion to intervene in Domenech breach the Settlement Agreement? | Intervention asserted claims against ACCJ and thus violated the Agreement’s prohibition on claims/litigation. | Motion sought fees from the estate (Pot Two), defending Ambush’s entitlement to funds, not a direct claim against ACCJ. | No breach: intervention sought entitlement from the estate and was defensive/estate-focused, not a prohibited claim against ACCJ. |
| Do Ambush’s breach counts in the 2015 D.C. action violate the Settlement Agreement? | Filing the 2015 suit against ACCJ breached the Agreement’s no-litigation clause. | An action to enforce the Settlement (or its remedies) is not itself a breach; parties may litigate enforcement. | No breach: an action to enforce/remedy the Agreement is not proscribed by the Agreement’s enforcement clause; court affirmed USBC. |
| Do Ambush’s RICO counts (and his identical proof of claim in bankruptcy) violate the Settlement Agreement or constitute separate breaches? | RICO counts and the bankruptcy proof of claim amount to additional claims/breaches barred by the Agreement. | RICO allegations largely concern separate, post-Agreement conduct; the bankruptcy proof of claim merely restated the 2015 Action and did not create a distinct breach. | No breach: RICO claims generally arise from unrelated conduct outside Franqui; the Chapter 11 proof of claim was coextensive with the 2015 Action and not a separate breach. |
Key Cases Cited
- Alford v. Kuhlman Elec. Corp., 716 F.3d 909 (5th Cir. 2013) (settlement agreements are enforceable contracts)
- Welch & Forbes, Inc. v. Cendant Corp., 233 F.3d 188 (3d Cir. 2000) (contractual choice-of-law clauses are binding)
- Beazer East, Inc. v. Mead Corp., 412 F.3d 429 (3d Cir. 2005) (settlement agreements enforceable under contract principles)
- Powell v. Omnicom, 497 F.3d 124 (2d Cir. 2007) (parties may bind themselves by settlement terms)
- Estate of Berganzo-Colon v. Ambush, 704 F.3d 33 (1st Cir. 2013) (affirming judgment against Ambush in fee-recovery suit)
- McCarrell v. Hoffman-La Roche, 227 N.J. 569 (N.J. 2017) (New Jersey choice-of-law framework for statutes of limitations)
- Anderson v. City of Bessemer City, 470 U.S. 564 (U.S. 1985) (clearly erroneous standard for reviewing factual findings)