40 F. Supp. 3d 367
S.D.N.Y.2014Background
- Three U.S. citizens (Hausler, Vera, Villoldo) obtained Florida state-court judgments against the Republic of Cuba under the FSIA for torture/extrajudicial killing; Cuba was served but defaulted and full evidentiary hearings were held.
- The Florida courts found Cuba was a state sponsor of terrorism (designated in 1982) and that the acts at issue satisfied §1605A (formerly §1605(a)(7)); large money judgments were entered.
- Federal courts (including this district) later recognized and domesticated those Florida judgments and plaintiffs sought execution against Cuban-blocked funds held or transiting through New York banks under TRIA and the Cuban Assets Control Regulations.
- Banco Bilbao Vizcaya Argentaría moved to dismiss turnover proceedings, arguing the Florida courts lacked jurisdiction under the FSIA and thus their judgments are not entitled to full faith and credit.
- The district court coordinated turnover proceedings, addressed competing claims to blocked EFTs, and limited the dispute to funds originating from Cuban parties; the court required banks to answer and interplead adverse claimants.
- The Southern District of New York denied Banco Bilbao’s collateral attack: Florida courts had subject‑matter jurisdiction, their findings were supported by full hearings, and the judgments are entitled to full faith and credit; TRIA authorizes the levies.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Can Banco Bilbao collaterally attack the Florida judgments here? | Plaintiffs: Florida judgments are final and enforceable; collateral attack is barred by full faith and credit. | Banco Bilbao: The Florida courts lacked FSIA jurisdiction; judgment is void and not entitled to recognition. | Denied — collateral attack fails; full faith and credit applies. |
| Did the Florida courts have subject‑matter jurisdiction under the FSIA (§1605A)? | Plaintiffs: Florida courts held trials, made factual findings that acts were terrorism and that Cuba’s designation was (at least partially) caused by those acts. | Banco Bilbao: The jurisdictional findings were legally insufficient and erroneous. | Held — Florida courts properly found jurisdiction after full evidentiary hearings. |
| Are the Florida judgments constitutionally infirm (due‑process defect) such that federal courts must refuse recognition? | Plaintiffs: Full hearings and service satisfied due process; judgments valid. | Banco Bilbao: Alleged deficiencies in jurisdictional fact‑finding rendered judgments constitutionally defective. | Held — No federal due‑process violation; judgments may be enforced. |
| May plaintiffs levy against blocked Cuban funds under TRIA/Cuban asset rules? | Plaintiffs: TRIA authorizes execution against blocked funds owned/controlled by a state sponsor of terrorism. | Banks (including Banco Bilbao): Challenge scope of levies and whether blocked EFTs constitute Cuban property subject to execution. | Held — Court has jurisdiction over turnover; TRIA authorizes levies; proceeding limited to EFTs originating from Cuban parties. |
Key Cases Cited
- Saudi Arabia v. Nelson, 507 U.S. 349 (U.S. 1993) (FSIA framework for foreign sovereign immunity)
- Davis v. Davis, 305 U.S. 32 (U.S. 1938) (requirement to recognize sister‑state judgments absent obvious jurisdictional defect)
- Underwriters Nat’l Assurance Co. v. N.C. Life & Accident & Health Ins. Guar. Ass’n, 455 U.S. 691 (U.S. 1982) (full faith and credit applies even to jurisdictional questions where fully litigated)
- Kremer v. Chemical Constr. Corp., 456 U.S. 461 (U.S. 1982) (federal courts must refuse enforcement of constitutionally infirm state judgments)
- Marrese v. Am. Acad. of Orthopaedic Surgeons, 470 U.S. 373 (U.S. 1985) (federal courts give state judgments same weight as rendering state would)
- United Student Aid Funds, Inc. v. Espinosa, 559 U.S. 260 (U.S. 2010) (exceptional cases where judgment lacks even an arguable basis for jurisdiction)
- Shipping Corp. of India Ltd. v. Jaldhi Overseas Pte Ltd., 585 F.3d 58 (2d Cir. 2009) (EFTs through NY clearing banks and incidents of property analysis)
- Export‑Import Bank of U.S. v. Asia Pulp & Paper Co., 609 F.3d 111 (2d Cir. 2010) (limits on property interests in transitory EFTs)
- Weininger v. Castro, 462 F.Supp.2d 457 (S.D.N.Y. 2006) (full‑faith‑and‑credit principles in FSIA/state judgment context)
- Hausler v. JPMorgan Chase Bank, 740 F.Supp.2d 525 (S.D.N.Y. 2010) (discussion of blocked funds and execution under Cuban assets regulations)