Hausler v. JPMorgan Chase Bank, N.A.
2012 U.S. Dist. LEXIS 24247
| S.D.N.Y. | 2012Background
- Hausler, as successor and personal representative of Fuller’s estate, seeks to enforce a Florida judgment against Cuban entities by turning over Blocked Funds held by U.S. Garnishee Banks under TRIA and CACRs.
- Garnishee Banks interplead to inoculate against competing interests and to freeze EFT proceeds blocked under OFAC regulations.
- TRIA preempts state property law, making blocked assets available for attachment and execution to satisfy terrorism-related judgments.
- ACRs assert various ownership interests in the Blocked Funds; most allege mistakes in routing or paperwork caused blocking.
- Court previously affirmed preemption and authorized interpleader; this decision resolves priority and entitlement to turnover of the Blocked Funds.
- Court grants Hausler summary judgment on entitlement, rejects ACRs’ claims to superior interests.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does TRIA preempt state property law for blocked assets? | Hausler argues TRIA defines executory assets and preempts state law. | ACRs argue state ownership controls asset rights; possible narrowing by state law. | Yes; TRIA preempts state property law for blocked assets. |
| Who has superior interest in Blocked Funds—the TRIA judgment holder or ACRs? | Hausler, as judgment creditor, holds superior rights under TRIA. | ACRs contend ownership or inferior interests may trump turnover. | Petitioner holds superior interest; turnover granted. |
| Are Cuban Banks agencies or instrumentalities of Cuba for FSIA purposes? | Suchlicki affidavits show Cuban Banks are Cuba’s organs or instrumentalities. | ACRs contest status, lacking independent evidence. | Cuban Banks are agencies or instrumentalities; no genuine dispute. |
| Are retroactivity or Takings Clause concerns defeated by TRIA application? | No retroactivity problem; assets already blocked fall under TRO/TREA scheme. | Takings/retroactivity could be violated if assets unfairly diminished. | Takings and retroactivity defenses rejected; turnover upheld. |
Key Cases Cited
- Smith ex rel. Estate of Smith v. Federal Reserve Bank of N.Y., 346 F.3d 264 (2d Cir.2003) (TRIA interpretation and asset execution context cited)
- Levin v. Bank of New York, 2011 WL 812032 (S.D.N.Y.2011) (TRIA preemption and priority of terrorist-judgment holders (contextual))
- Weininger v. Castro, 462 F.Supp.2d 457 (S.D.N.Y.2006) (agency/instrumentality FSIA analysis guidance)
- United States v. Pink, 315 U.S. 203 (U.S.1942) (precedent on government priority over private interests in blocked assets)
- Dames & Moore v. Regan, 453 U.S. 654 (U.S.1981) (presidential control of foreign assets blocking orders)
- Rockefeller Enterprises v. Roche Molecular Systems, 131 S. Ct. 2188 (U.S.2011) (Stanford decision referenced on ownership phrase 'of')