45 F.4th 426
D.C. Cir.2022Background
- Pavel Lazarenko, former Prime Minister of Ukraine, is alleged to have laundered and hidden tens of millions of dollars in the Balford Trust, an irrevocable trust established in Guernsey and valued at over $147 million (later reported >$176M).
- In 2004 the U.S. brought a civil in rem forfeiture action under 18 U.S.C. § 981 alleging the trust assets are proceeds of money laundering; the D.D.C. court issued a restraining order under 18 U.S.C. § 983(j)(1) to preserve the assets and sought parallel assistance from the Royal Court of Guernsey, which also issued a restraining order (2004).
- The Guernsey order expressly allowed applications for discharge or variation; Lazarenko delayed seeking relief there until 2015, and when he did the U.S. threatened contempt in the D.D.C.; the D.D.C. court refused to clarify that filing in Guernsey was allowed, and Lazarenko stopped his Guernsey challenge.
- In 2020 the district court struck Lazarenko’s claim to the Balford Trust for lack of standing (settlor of irrevocable trust), and Lazarenko then moved to modify the restraining order to permit him to litigate the trust’s forfeitability in Guernsey; the district court denied the motion.
- Lazarenko appealed the denial (immediately appealable as an injunction under 28 U.S.C. § 1292(a)(1)); his daughters sought to intervene on appeal but the D.C. Circuit denied intervention as their interests were adequately represented by Lazarenko.
- The D.C. Circuit affirmed: it rejected Lazarenko’s challenges that the court lacked authority to enjoin him (despite the standing ruling), that § 983(j)(1) does not authorize foreign anti-suit injunctions (argument forfeited), and that the injunction violated international comity (appeal untimely and prejudicial delay).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Motion to intervene by Lazarenko’s daughters | Daughters claimed a protectable interest in litigating in Guernsey that may be impaired | Their interests are identical to father’s and already represented by him | Denied — representation adequate; daughters offered no distinct arguments |
| Whether court can restrain Lazarenko after striking his claim | Striking his claim removed his party status so court may no longer enjoin him | Lazarenko remains a party generally; courts may restrain nonparties under § 983(j)(1) and Supplemental Rules | Affirmed — court retained authority; statute and Supplemental Rules permit restraints on nonparties |
| Whether § 983(j)(1) authorizes foreign anti-suit injunctions | § 983(j)(1)’s general preservation language doesn’t clearly authorize anti-suit injunctions; clear-statement rule and extraterritoriality concerns apply | § 983(j)(1) broadly authorizes orders to preserve property and has been used to restrain nonparties; issue was not preserved below | Argument forfeited — not raised properly below or in opening brief, so court did not decide the statutory question on the merits |
| Whether the injunction violated international comity / abuse of discretion | An anti-suit injunction preventing litigation in Guernsey improperly disrespects foreign court authority; in personam standards should apply | Even if anti-suit injunctions implicate comity, Lazarenko’s 16-year delay and prejudice to other parties justify equitable restraint | Affirmed — court did not abuse discretion; delay and prejudice justified maintaining the injunction under equitable principles; |
Key Cases Cited
- Various Items of Personal Prop. v. United States, 282 U.S. 577 (1931) (explains in rem fiction and traditional territorial limits on jurisdiction)
- Banco Espanol de Credito, 295 F.3d 23 (D.C. Cir. 2002) (addresses foreign-located res and § 1355(b)(2) jurisdiction)
- Laker Airways Ltd. v. Sabena, 731 F.2d 909 (D.C. Cir. 1984) (standards for foreign anti-suit injunctions and comity considerations)
- Princess Lida v. Thompson, 305 U.S. 456 (1939) (traditional rule that the first court seized of in rem jurisdiction may exclude others)
- SEC v. Banner Fund Int’l, 211 F.3d 602 (D.C. Cir. 2000) (describing the rule that the court first asserting control over property may exclude others)
- United States v. Regan, 858 F.2d 115 (2d Cir. 1988) (permitting restraining orders against nonparties in forfeiture contexts)
- United States v. Kirschenbaum, 156 F.3d 784 (7th Cir. 1998) (contrast — held criminal-preservation statute applies to nonparties only where court has personal jurisdiction)
- Koon v. United States, 518 U.S. 81 (1996) (standard that abuse of discretion includes legal error)
- Manitoba v. Bernhardt, 923 F.3d 173 (D.C. Cir. 2019) (argument-preservation/forfeiture principle applied to forfeiture litigation)