Keith Stansell v. Revolutionary Armed Forces of Columbia, (FARC)
771 F.3d 713
11th Cir.
2014

Background

  • Plaintiffs (U.S. victims of a FARC kidnapping) obtained a $318 million default judgment against FARC under the Antiterrorism Act and sought to satisfy it by executing blocked assets under TRIA §201 against third parties OFAC had designated as SDNTs.
  • Plaintiffs pursued a series of ex parte garnishments and executions against bank accounts and real property of various claimants (individuals, partnerships, corporations) alleged to be FARC "agencies or instrumentalities."
  • OFAC designations (under IEEPA, TWEA, or the Kingpin Act) played a central role: designation rendered assets "blocked," but the court treated OFAC designation and the separate TRIA agency/instrumentality inquiry as distinct. Some claimants were later de‑listed by OFAC during the proceedings.
  • Claimants raised procedural (constitutional and state statutory notice/hearing) and substantive (agency/instrumentality status; effect of OFAC de‑listing; OFAC license requirements; fraud) challenges and sought relief from turnover judgments under Rules 59/60 and Florida garnishment law.
  • The district court generally allowed TRIA executions (finding blockage and agency/instrumentality), frequently without formal prior service on claimants; this court affirms most orders but reverses as to Brunello where a nunc pro tunc substitution of garnishee improperly retroactively related a new garnishee to an earlier writ.

Issues

Issue Plaintiff's Argument Defendant's Argument Held
Notice / Due process for third‑party owners of blocked assets Plaintiffs: post‑judgment garnishment need not be served on third parties; immediate attachment furthers TRIA's remedial purpose Claimants: owners of property within U.S. are entitled to actual notice and opportunity to be heard before execution Claimants have Fifth Amendment due process rights to notice and an opportunity to be heard before execution (but not necessarily before attachment); Florida garnishment notice rules apply and are not preempted by TRIA
Standard for "agency or instrumentality" under TRIA §201 Plaintiffs: apply a practical standard to capture clandestine terrorist networks and their fronts Claimants: TRIA should borrow FSIA §1603(b) definition Court rejects applying FSIA §1603(b) literally (would render TRIA ineffective against non‑state actors); endorses district court’s pragmatic standard and reviews factual findings for clear error
Effect of OFAC de‑listing on TRIA execution (blocked‑asset element) Claimants: de‑listing should remove assets from TRIA reach retroactively if de‑listed before judgment/turnover Plaintiffs: once garnishment proceedings have commenced (service of writ / ancillary proceeding begun), later de‑listing does not affect pending garnishment OFAC regulation and precedent control: de‑listing after commencement of garnishment/execution does not retroactively unblock assets for that pending proceeding; but where the substituted garnishee action was filed after de‑listing (Brunello/Merrill Lynch), TRIA blocked‑asset requirement was not met
Proper use of nunc pro tunc to substitute garnishee / turnover against unserved garnishee Plaintiffs: correcting garnishee identification may relate back to original writ Brunello: cannot retroactively insert a garnishee that was not in the original writ or served Nunc pro tunc cannot be used to retroactively add a new garnishee who was never named or served; turnover reversed for Brunello and writ quashed

Key Cases Cited

  • Weininger v. Castro, 462 F. Supp. 2d 457 (S.D.N.Y. 2006) (explaining TRIA §201 elements and blocked‑assets concept)
  • Stansell v. Revolutionary Armed Forces of Colom. (Mercurio), 704 F.3d 910 (11th Cir. 2013) (construing TRIA’s scope re: Kingpin Act designations)
  • Russian Volunteer Fleet v. United States, 282 U.S. 481 (1931) (property within U.S. entitled to constitutional protections even if foreign‑owned)
  • Helicopteros Nacionales de Colom., S.A. v. Hall, 466 U.S. 408 (1984) (due process rights apply to foreign corporations in U.S. proceedings)
  • Peterson v. Islamic Republic of Iran, 627 F.3d 1117 (9th Cir. 2010) (post‑judgment motions generally need not be served on judgment debtor)
  • Holy Land Found. for Relief & Dev. v. Ashcroft, 722 F.3d 677 (5th Cir. 2013) (TRIA/blocked‑asset analysis and limits on interpreting TRIA preemption)
  • Samantar v. Yousuf, 560 U.S. 305 (2010) (limits on foreign‑official immunity and recognition that individuals are distinct from sovereigns)
  • Mathews v. Eldridge, 424 U.S. 319 (1976) (due process balancing test for procedural protections)
  • Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306 (1950) (standard for constitutionally adequate notice)
  • Calero‑Toledo v. Pearson Yacht Leasing Co., 416 U.S. 663 (1974) (recognizing circumstances where pre‑seizure notice may frustrate governmental interests)
  • United Student Aid Funds, Inc. v. Espinosa, 559 U.S. 260 (2010) (Rule 60(b)(4) and what constitutes a void judgment)
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