Crystallex International Corporation v. Bolivarian Republic of Venezuela
1:17-mc-00151
D. Del.May 4, 2022Background
- Crystallex holds a registered judgment against the Bolivarian Republic of Venezuela and seeks to satisfy it by selling PDV Holding, Inc. (PDVH) shares derived from PDVSA assets.
- OFAC has designated the PDVH shares as blocked property under U.S. sanctions on Venezuela.
- In a March 2, 2022 Opinion, the District Court held that OFAC sanctions do not bar the Court from taking steps toward a sale process (up to selecting a winning bidder), so long as no sale may close without a specific OFAC license or a change in the sanctions regime.
- The Court asked the Special Master and sale-process parties for views on interlocutory appeal; the Special Master supported certifying an appeal on the OFAC issue.
- The Venezuela Parties filed a notice of appeal from the March 2022 Opinion; the District Court concluded §1292(b) interlocutory certification is appropriate and certified the OFAC question for appeal.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether OFAC Executive Orders and regulations that block PDVH shares bar the Court from proceeding with steps toward an auction (provided no sale closes without an OFAC license) | Crystallex: Court may proceed with sale process steps; certification unnecessary because steps are not final or speculative | Venezuela: OFAC blocks any court-ordered sale process absent a specific OFAC license; any sale-process steps are prohibited | Court certified this specific OFAC question for interlocutory review under §1292(b), concluding the issue is controlling, debatable, and would materially advance the litigation if resolved by the Third Circuit |
| Whether the March 2022 Order meets the §1292(b) standards for interlocutory review (controlling question, substantial ground for difference, material advancement) | Crystallex: No controlling question yet because Court has not ordered public auction; appeal would be advisory and cause delay | Venezuela: The Order definitively overruled their principal objection and thus presents a controlling, novel legal question suitable for interlocutory review | Court held all three §1292(b) requirements are satisfied as to the OFAC issue (controlling question, substantial ground for difference of opinion, and material advancement) |
| Whether alleged conflict of interest involving Special Master's financial advisor taints the Special Master's work and warrants interlocutory review | Crystallex: No substantial basis shown to certify that issue for interlocutory review | Venezuela: Conflict taints the Special Master's work and merits appellate review | Court declined to certify the conflict-of-interest issue for interlocutory review (no substantial ground for difference of opinion) |
| Whether the Venezuela Parties were timely in bringing state-law challenges to Crystallex’s writ of attachment | Crystallex: Venezuela’s state-law challenges were untimely and already decided (January 2021 order) | Venezuela: Contested timeliness and preservation of state-law claims | Court declined to certify this issue for interlocutory review due to lack of justification for delay and absence of substantial ground for difference of opinion |
Key Cases Cited
- Coopers & Lybrand v. Livesay, 437 U.S. 463 (1978) (authorizes interlocutory appeals in exceptional circumstances under §1292(b))
- Microsoft v. Baker, 137 S. Ct. 1702 (2017) (discusses rule changes affecting interlocutory appeal practice)
- Obasi Inv. Ltd. v. Tibet Pharm., Inc., 931 F.3d 179 (3d Cir. 2019) (explains §1292(b) standards in the Third Circuit)
- Crystallex Int’l Corp. v. Bolivarian Republic of Venezuela, 24 F.4th 242 (3d Cir. 2022) (addresses appealability of orders in post-judgment execution proceedings)
- Link v. Mercedes-Benz of N. Am., Inc., 550 F.2d 860 (3d Cir. 1977) (declines interlocutory review of advisory or speculative matters)
- Yamaha Motor Corp., U.S.A. v. Calhoun, 516 U.S. 199 (1996) (appellate court may address issues "fairly included" within a certified question)
- Katz v. Carte Blanche Corp., 496 F.2d 747 (3d Cir. 1974) (Third Circuit discretion regarding interlocutory appeals)