KEITH STANSELL, MARC GONSALVES, THOMAS HOWES, JUDITH JANIS, as Personal Representative of the Estate of Greer Janis, MICHAEL JANIS, et al., SATORI FINE LINENS, NEWMIL MARINE, LLC, versus REVOLUTIONARY ARMED FORCES OF COLOMBIA, COLES ADVENTURES, LLC, SAMARK JOSE LOPEZ BELLO, et al.
No. 20-11736, 20-12467, 20-12545
United States Court of Appeals For the Eleventh Circuit
August 23, 2022
[PUBLISH]
KEITH STANSELL, MARC GONSALVES, THOMAS HOWES, JUDITH JANIS, as Personal Representative of the Estate of Greer Janis, MICHAEL JANIS, et al., Plaintiffs-Counter Defendants-Appellees,
SATORI FINE LINENS, NEWMIL MARINE, LLC, Intervenors-Plaintiffs,
versus
REVOLUTIONARY ARMED FORCES OF COLOMBIA, Defendant,
UBS FINANCIAL SERVICES, INC., BRANCH BANKING & TRUST COMPANY, SAFRA NATIONAL BANK OF NEW YORK, MORGAN STANLEY SMITH BARNEY, LLC, SAFRA SECURITIES, LLC, Interested Parties-Appellees,
CITIBANK, N.A., Interested Party-Cross Claimant-Counter Claimant,
SAMARK JOSE LOPEZ BELLO, et al., Intervenors-Cross Defendants-Appellants.
Appeals from the United States District Court for the Southern District of Florida
D.C. Docket No. 1:19-cv-20896-RNS
No. 20-12467
KEITH STANSELL, MARC GONSALVES, THOMAS HOWES, JUDITH JANIS, as Personal Representative of the Estate of Greer Janis, MICHAEL JANIS, et al., Plaintiffs-Counter Defendants-Appellees,
versus
LEUCADENDRA 325 LLC, Claimant-Appellant,
SAMARK JOSE LOPEZ BELLO, Intervenor-Cross Defendant-Appellant.
Appeals from the United States District Court for the Southern District of Florida
D.C. Docket No. 1:19-cv-20896-RNS
No. 20-12545
KEITH STANSELL, MARC GONSALVES, THOMAS HOWES, JUDITH JANIS, as Personal Representative of the Estate of Greer Janis, MICHAEL JANIS, et al., Plaintiffs-Counter Defendants-Appellees,
SATORI FINE LINENS, NEWMIL MARINE, LLC, Intervenors-Plaintiffs,
versus
REVOLUTIONARY ARMED FORCES OF COLOMBIA, COLES ADVENTURES, LLC, Defendants,
UBS FINANCIAL SERVICES, INC., BRANCH BANKING & TRUST COMPANY, SAFRA NATIONAL BANK OF NEW YORK, MORGAN STANLEY SMITH BARNEY, LLC, SAFRA SECURITIES, LLC, OXBOW CARBON, LLC, SSMPETCOKE, LLC, OXBOW ENERGY SOLUTIONS, LLC, Interested Parties,
LOISINETTE LEIVA, Trustee of LLP Trust, Interested Party-Appellant,
CITIBANK, N.A., Interested Party-Cross Claimant-Counter Claimant.
Appeals from the United States District Court for the Southern District of Florida
D.C. Docket No. 1:19-cv-20896-RNS
Before WILLIAM PRYOR, Chief Judge, JORDAN, Circuit Judge, and BROWN, District
JORDAN, Circuit Judge:
For plaintiffs in civil litigation, obtaining a favorable judgment is only one step on the road to financial compensation. That is because a judgment is essentially worthless unless the holder can collect on it. See, e.g., David Barnhizer, Abandoning an “Unethical” System of Legal Ethics, 2012 Mich. St. L. Rev. 347, 401 (“If you cannot collect the money, the paper value [of a judgment] is little more than symbolic.“). So when the defendant liable for a sizable judgment is a foreign terrorist organization, collection efforts are not surprisingly often directed at third parties.
These consolidated appeals constitute the latest chapter of a long-running legal battle over attempts to satisfy a 2010 default judgment of $318 million under the Anti-Terrorism Act,
In Case No. 20-11736, we conclude that a jury must decide whether Mr. Lopez and his companies qualify as agencies or instrumentalities of the FARC such that their assets can be garnished by the plaintiffs to satisfy their $318 million judgment. We therefore reverse and remand in that appeal. In Case No. 20-12467, we dismiss the appeal as moot because 325 Leucadendra has been sold and we lack the ability to grant the requested relief. In Case No. 20-12545, we affirm the district court‘s order denying Ms. Leiva‘s motion to intervene as untimely and therefore dismiss the appeal.
I1
As relevant here, § 201(a) of the Terrorism Risk Insurance Act of 2002, Pub. L. No. 107-297, codified as a note to
A
In February of 2017, the Office of Foreign Assets Control—acting pursuant to the Foreign Narcotics Drug Kingpin Act,
Two years later, in February of 2019, the plaintiffs who had obtained the $318 million judgment against the FARC filed an ex parte motion in the district court for writs of garnishment and execution against the assets of the Lopez appellants (e.g., condominiums, vessels, and bank accounts). They proceeded under § 201(a) of the TRIA and invoked Florida‘s garnishment and execution statutes,
Upon receiving notice of the ex parte proceeding, the Lopez appellants filed motions—with supporting lay and expert affidavits—to dissolve the writs of garnishment. They made a number of arguments, including that the ex parte proceeding violated their due process rights and that the district court had erred in finding them to
The district court denied the Lopez appellants’ request to cancel the sale of several Miami-area properties, see D.E. 101, but referred to a magistrate judge the motion to dissolve the writs of garnishment with respect to bank accounts held by Mr. Lopez. The magistrate judge, following an evidentiary hearing, issued a report (a) recommending that the district court deny the motion to dissolve and (b) finding that the Lopez appellants were agencies or instrumentalities of the FARC. See D.E. 248. The district court overruled the Lopez appellants’ objections and adopted the magistrate judge‘s report. See D.E. 279. It later issued final turnover judgments as to the garnished assets. See D.E. 339.
B
In March of 2019, just after the plaintiffs filed their ex parte motions for writs of garnishment, a federal grand jury in New York returned an indictment against Mr. Lopez charging him with violating OFAC sanctions by using bulk cash to pay for charter flights between Venezuela and Moscow. See United States v. Lopez Bello, Case No. 19-Cr-144 (S.D.N.Y.). Mr. Lopez has not turned himself in or been arrested, and remains a fugitive.
The fugitive disentitlement doctrine, which is equitable in nature, “empowers courts to dismiss the lawsuits or appeals of fugitives from the law.” Ener v. Martin, 987 F.3d 1328, 1331 (11th Cir. 2021) (citation omitted). We asked the parties to discuss the doctrine at oral argument, and they did so.
Having considered the matter, we choose not to address whether the doctrine should apply. The plaintiffs never asked the district court to invoke the doctrine, and that court therefore did not pass on it. Our review on the application of the doctrine is for abuse of discretion, see id., and under the circumstances we think it best for the district court to consider the matter on remand. First, “[w]e are . . . a court of review, not a court of first view.” Callahan v. U.S. Dep‘t of Health & Hum. Servs., 939 F.3d 1251, 1266 (11th Cir. 2019) (citation omitted). Second, one of the relevant factors is whether the litigant‘s fugitive status has a “sufficient connection” to the present action, see Ener, 987 F.3d at 1332, and reasonable arguments can be made on both sides of that issue here. Third, it is not clear whether the doctrine—even if applicable to Mr. Lopez—would apply to his companies. Fourth, we have cases going both ways as to whether the doctrine can and should apply to litigants who are defending civil lawsuits. Compare Pesin v. Rodriguez, 244 F.3d 1250, 1252-53 (11th Cir. 2001) (applying the doctrine to a defendant in an action for return of a child under a statute implementing the Hague Convention), with FDIC v. Pharaon, 178 F.3d 1159, 1162 (11th Cir. 1999) (“We conclude that application of the fugitive disentitlement doctrine in this case to bar Appellant, a fugitive in a criminal case, from defending himself in a civil case, albeit a related one, would not be a ‘reasonable response to the problems and needs that provoke[d]’ the doctrine.“) (citation omitted).
II
The Lopez appellants raise a number of arguments about the TRIA on appeal. We address them below.3
Addressing an issue of statutory notice, we held in Stansell II that § 201 of the TRIA “does not preempt Florida [garnishment] law” with respect to post-judgment execution or attachment, and that “judgment creditors seeking to satisfy judgments under [§ 201] must follow the notice requirements of Florida law.” 771 F.3d at 730. We also explained that in Florida “execution and garnishment proceedings are ancillary proceedings.” Id. at 733 (citations omitted).
The Lopez appellants, without acknowledging this aspect of Stansell II, argue that a post-judgment action brought pursuant to § 201 of the TRIA is a new and independent civil suit rather than an ancillary proceeding. Based on this premise, they then assert that the district court erred in failing to schedule a Rule 16 conference, refusing to enter a scheduling order, and allowing the plaintiffs to call Paul Craine (a former DEA agent) as one of their witnesses without prior disclosure. See Appellants’ Br. at 22-26.
With respect to the lack of a Rule 16 conference and scheduling order, the Lopez appellants have failed to identify any real harm or prejudice. There is therefore no basis for reversal. See
B
According to the Lopez appellants, § 201(a) of the TRIA required the plaintiffs to prove that they were agencies or instrumentalities of the FARC at the time that the ex parte writs of garnishment were sought and issued (i.e., in February of 2019), and not at any earlier point in time. Exercising plenary review as to this issue of statutory interpretation, see Cho v. Surgery Partners, Inc., 30 F.4th 1035, 1040 (11th Cir. 2022), we disagree with the Lopez appellants.
To recap, § 201(a) of the TRIA provides that “[n]otwithstanding any other provision of law . . . the blocked assets of [a] terrorist party [against which a judgment is obtained] (including the blocked assets of any agency or instrumentality of that terrorist party) shall be subject to execution or attachment.” The Lopez appellants contend that the phrase “shall be subject to execution or attachment” is “stated in the present, as the word ‘shall’ connotes the present,” so the agency/instrumentality status must exist at the time the application for a writ of garnishment is filed. See Appellants’ Br. at 28. They rely on language in Kirschenbaum v. 650 Fifth Ave. & Related Props., 830 F.3d 107, 136 (2d Cir. 2016) (Kirschenbaum I) (“[I]nsofar as Plaintiffs contend that Alavi itself was sufficiently owned, controlled, or directed by Iran to render it an agency or instrumentality of a terrorist party under the TRIA, questions of fact exist as to
A third party‘s assets must be blocked under the TRIA when the motion for a writ of garnishment is filed, and when the writ is issued. See Stansell II, 771 F.3d at 723, 748. But that does not mean that agency/instrumentality status must be determined as of that point in time.
The district court in Stansell II ruled that an agency or instrumentality was “[a]ny SDNT . . . that is or was ever involved” in any aspect of the FARC‘s narcotics trafficking operations “or that assisted the FARC‘s financial or money laundering network” because it “was either (1) materially assisting in, or providing financial or technological support for or to, or providing goods or services in support” of, the FARC‘s international narcotics trafficking activities; and/or (2) “owned, controlled, or directed by, or acting for or on behalf of” the FARC; and/or (3) “playing a significant role in” the FARC‘s narcotics trafficking. See id. at 724 n.6 (emphasis added). Although Stansell II did not address the specific temporal argument made by the Lopez appellants, it did hold that “the district court developed a proper standard” for determining agency/instrumentality status under § 201(a) of the TRIA because that standard was based on the plain and ordinary meaning of those terms. See id. at 732 (concluding also that “the agencies or instrumentalities here were, according to [the] OFAC, part of [the] FARC‘s money laundering operations“) (emphasis added). Because the formulation we expressly approved in Stansell II encompassed past involvement or association with a terrorist party, the Second Circuit‘s language in Kirschenbaum I—if read the way the Lopez appellants suggest—is inconsistent with our precedent. We conclude, based on Stansell II, that the magistrate judge and the district court correctly rejected the contention that a third party must be an agency or instrumentality of a terrorist party at the time that execution or attachment is sought under the TRIA.4
We add two more linguistic points. First, contrary to the assertion of the Lopez appellants, the word “shall” does not necessarily connote the present tense. “Depending on how finely [one] slice[s] the semantic nuances, shall can bear five to eight senses even in a single document.” Bryan A. Garner, Garner‘s Dictionary of Legal Usage 952 (3d ed. 2011). Indeed, “shall” is “commonly used as a future-tense modal verb.” Id. See also United States v. Arredondo, 31 U.S. 691, 741 (1832) (“In the English original, the words are ‘shall be‘—words in the future.“); Carpenters Amended & Restated Health Benefit Fund v. Holleman Constr. Co., 751 F.2d 763, 769 (5th Cir. 1985) (noting that “shall be subject” is a future-tense phrase). Second, in a statute like § 201(a) of the TRIA, the word “shall” is used in its usual “mandatory” legal sense. See Black‘s Law Dictionary 1653 (11th ed. 2019); Webster‘s Third New Int‘l Dictionary of the English Language Unabridged 2085 (2002). Because “shall” is used as a “command and statement of intention,” it “adds nothing to clarify the temporal question before us.” Omni MedSci, Inc. v. Apple, Inc., 7 F.4th 1148, 1154 (Fed. Cir. 2021).
C
The Lopez appellants make two additional arguments about § 201(a) of the TRIA. They assert that indirect ties are not enough to establish that they were agencies or instrumentalities of the FARC. And they maintain that they cannot be agencies or instrumentalities unless they acted knowingly. See Appellants’ Br. at 34-42.
We quickly dispense with the first argument. In Stansell II we affirmed, as not clearly erroneous, the district court‘s factual findings that certain third parties were agencies or instrumentalities of the FARC. See 771 F.3d at 742, 746. In so doing, we explained that as to some third parties the evidence was sufficient to establish the “required relationship between [the] FARC and [the third parties], even if that relationship was indirect.” Id. at 742. See also id. at 746 (“Plaintiffs proffered evidence of connections to [the] FARC that met the district court‘s standard, and the appellants here failed to rebut that evidence.“). Accord Stansell v. Revolutionary Armed Forces of Colombia, Case No. 10-471 (TJK), 2019 WL 4040680, at *4 (D.D.C. Aug. 26, 2019) (Stansell V) (agreeing with Stansell II that an indirect relationship suffices).
If that were not enough, nothing in § 201(a) of the TRIA suggests that an instrumentality relationship with a terrorist party needs to be direct. Imagine, for example, that the FARC hires A to oversee and coordinate the laundering of its narcotics proceeds in different parts of the world. Then A subcontracts, hires, or uses other individuals or entities (B, C, and D) to carry out the money laundering operation in other countries. In that example, B, C, and D could be (depending on the nature of the arrangement, agreement, or understanding) instrumentalities of the FARC notwithstanding their lack of a direct contractual relationship with the FARC.
The second argument—the one pertaining to knowledge—is one we did not address in Stansell II, and proves more difficult. The Second Circuit has left open whether, under § 201(a) of the TRIA, a person or entity must have known, or had reason to know, that it was providing services to or assisting a terrorist party to be considered an agency or instrumentality. See Kirschenbaum I, 830 F.3d at 136. In Kirschenbaum II, 257 F. Supp. 3d at 522, which was later vacated by the Second Circuit due to the improper exclusion of certain witnesses, see Havlish, 934 F.3d at 182-83, the district court explained that it did not need to decide the knowledge question because the evidence showed that the alleged agencies and instrumentalities in that case had the requisite knowledge. Nevertheless, in dicta the court said it did not believe knowledge was required:
As a matter of law, . . . this Court does not believe knowledge of instrumentality status is a required element for a TRIA § 201(a) claim . . . . [G]enerally, agency principles prevent an agent from lacking knowledge as to its princip[al]. But people
or entities may become the unwitting instruments of another. The fact that they may be, or are, unaware of their status as instruments does not eliminate their role as such. In this regard, an instrumentality may be passive[.]
Kirschenbaum II, 257 F. Supp. 3d at 523 (citations omitted). The court added that the “breadth and purpose” of § 201(a) indicated an intent on Congress’ part “to cast a broad net to effectuate deterrence.” Id. As far as we can tell, there is no other discussion of this knowledge question in any other cases or in the literature.
The pertinent phrase in § 201(a) of the TRIA is “agency or instrumentality.” To figure out whether knowledge is required for either status, we must determine the “ordinary public meaning” of the words agency and instrumentality at “the time of enactment.” United States v. Dominguez, 997 F.3d 1121, 1124 (11th Cir. 2021) (citing Bostock v. Clayton Cnty., 140 S. Ct. 1731, 1738 (2020)).
Around 2002, the words agency and instrumentality were largely understood as synonymous in lay usage. See, e.g., 1 Shorter Oxford English Dictionary 41, 1391 (5th ed. 2002) (defining agency as an “[i]ntervening action towards an end” and instrumentality as “[a] thing which is employed for a purpose or end“); Webster‘s New World College Dictionary 25, 741 (4th ed. 2000) (defining agency as “that by which something is done; means; instrumentality” and instrumentality as “a means or agency“); Roget‘s II – The New Thesaurus 27, 551 (1988) (defining both words as “[t]hat by which something is accomplished or some end achieved“); Webster‘s New World Thesaurus 18 (1985) (defining agency, in part, as “[a]n instrumentality“). That lay understanding generally remains the same today. See, e.g., Webster‘s Third New Int‘l Dictionary 40, 1172 (2012) (defining agency as “a person or thing through which power is exerted or an end is achieved: instrumentality, means” and instrumentality as “something by which an end is achieved” or “something that serves as an intermediary or agent through which one or more functions of a controlling force are carried out“) (capitalization altered); The American Heritage Dictionary of the English Language 32, 908 (4th ed. 2009) (defining agency as“[t]he means or mode of acting; instrumentality” and instrumentality as “[a] means; an agency“).
In the legal world, however, the words were understood differently. Agency reflected a more formal fiduciary relationship
imposing certain duties and obligations, while instrumentality meant any means of accomplishing an end. For example, the leading American legal dictionary at the time of the TRIA‘s passage defined agency as “[a] fiduciary relationship created by express or implied contract or by law, in which one party (the agent) may act on behalf of another party (the principal) and bind that party by words or actions.” Black‘s Law Dictionary 62 (7th ed. 1999). That same dictionary defined instrumentality as “[a] thing used to achieve an end or purpose,” though it also provided an alternative definition which treated agency as a synonym (“[a] means or agency though which a function of another entity is accomplished“). See id. at 802. Other legal sources also viewed agency and instrumentality differently. See Merriam-Webster‘s Dictionary of Law 251 (1996) (defining “instrumentality” as “something through which an end is achieved or occurs“);
One lexicographer has put the legal understanding of agency this way: “Nonlawyers are largely unfamiliar with agency used in this way, although they understand the personal noun agent as meaning ‘representative.‘” Bryan A. Garner, Garner‘s Dictionary of Legal Usage 38 (3d ed. 2011). The difference between agency and instrumentality, in their legal senses, has generally remained consistent over time. See, e.g., I Bouvier Law Dictionary 109, 1340 (Desk ed. 2012) (defining agency as “the relationship between the principal and the agent” and instrumentality as “[a] means by which something is accomplished” and “the means by which something is achieved or performed“).5
So which understanding governs? Because Congress used the words agency and instrumentality in
We begin with agency. When the TRIA was enacted in 2002, an agency relationship generally required both (1) a “manifestation by the principal to the agent that the agent may act on his account,” and (2) “consent by the agent to so act.”
We recognize, of course, that we are using domestic understandings of the word agency to interpret the TRIA, which has international application given the breadth and geographic scope of terrorist activity. And we realize as well that in the world of terrorism, affiliations and relationships are not likely to track the formalisms of law. But we are tasked with interpreting a domestic statute, and we think that Congress used agency in its legal sense in
On then, to instrumentality, as to which we reach a different conclusion. As noted above, in a legal sense an instrumentality is a person or thing through which or by which some end or purpose is achieved. We have found no indication that to be an instrumentality one must know the person or entity seeking the end result. To the contrary, the word has been used to refer to unwitting cogs in a criminal scheme. See, e.g., United States v. Bachynsky, 949 F.2d 722, 735 (5th Cir. 1991) (“For each false diagnosis submitted, an unwitting patient was made an instrumentality of the fraud.“); Michael N. Giuliano, 22 C.J.S. Criminal Law: Substantive Principles § 170 (May 2022 update) (“Ordinarily, a person who causes a crime to be committed through the instrumentality of an innocent or unwitting agent is punishable as a principal.“).
In enacting the TRIA after the terrorist attacks on September 11, 2001, Congress found that the government should provide “temporary financial compensation” to parties injured by acts of terrorism. See
When the case returns to the district court for a trial—more on that later—the court will have to instruct the jury on agency and instrumentality consistent with Stansell II as supplemented by today‘s opinion. And it will need to explain that under the TRIA knowledge is required for agency status but not for instrumentality status.
D
The Lopez appellants contend that they will be denied due process unless we require knowledge for both agency and instrumentality status under
In the criminal arena, the Supreme Court has not “undertaken to delineate a precise line or set forth comprehensive criteria for distinguishing between crimes that require a mental element and crimes that do not.” Staples v. United States, 511 U.S. 600, 620 (1994) (citation and internal quotation marks omitted). Just ten years ago, we noted the lack of clarity in this area of the law. See Shelton v. Sec‘y, Dep‘t of Corr., 691 F.3d 1348, 1354-55 (11th Cir. 2012).
The TRIA, however, is not a criminal provision. Instead,
We too have rejected the argument that, as a constitutional matter, a civil penalty requires actual knowledge on the part of the person or entity involved. See Mayers v. U.S. Dep‘t of Health & Hum. Servs., 806 F.2d 995, 999-1000 (11th Cir. 1986). Other circuits have come to similar conclusions. See, e.g., Bettor Racing, Inc. v. Nat‘l Indian Gaming Comm‘n, 812 F.3d 648, 652 (8th Cir. 2016) (“Nor is scienter required to justify a fine.“); Conn. Bar Ass‘n v. United States, 620 F.3d 81, 102 (2d Cir. 2010) (“Strict liability generally raises due process concerns with respect to criminal, not civil, statutes.“); Humanitarian L. Project v. U.S. Treasury Dep‘t, 578 F.3d 1133, 1152 (9th Cir. 2009) (“[C]ivil penalties may be imposed without mens rea requirements because they are indeed civil.“); N. Wind, Inc. v. Daley, 200 F.3d 13, 19 (1st Cir. 1999) (“As a general matter, scienter is not required to impose civil penalties for regulatory violations when the regulation is silent as to state of mind.“).
The Lopez appellants do not acknowledge or discuss these cases. Nor do they provide a convincing argument as to why we can or should deviate from them. We therefore reject their argument that due process demands a knowledge requirement for instrumentality status under the TRIA.
As we explained in Stansell II, the TRIA does not preempt Florida garnishment law. See 771 F.3d at 730 (“[T]he district court erred when it held that Florida law did not govern the garnishment and execution procedures.“). Because the plaintiffs here invoked Florida‘s garnishment statutes to attach the assets of the Lopez appellants under
The Lopez appellants assert that under Florida law the district court erred in denying them a jury trial on the issues of agency and instrumentality. See Appellants’ Br. at 34-54. On the record before us, we agree.
A
The Lopez appellants, who were contesting the ex parte garnishments, “were entitled to be heard on their challenge to the agency or instrumentality issue.” Stansell II, 771 F.3d at 727. One of the Florida garnishment statutes provides that “[o]n demand of either party a jury summoned from the body of the county shall be impaneled to try the issues.”
In the district court, the Lopez appellants argued that the agency/instrumentality issues should be submitted to a jury under
The question for us, then, is whether the evidence presented created issues of material fact as to Mr. Lopez‘s agency or instrumentality status. If so, a jury trial was required. See, e.g., Allen v. Brevard Cnty. Loan & Mortg. Co., 158 So. 305, 306 (Fla. 1934) (reversing judgment in favor of garnishee and remanding for a jury trial because there was “conflicting evidence” as to whether the garnishee was indebted to the judgment debtor). In this respect, we note that under both federal law and Florida law summary judgment should be denied where conflicting inferences can be drawn from the evidence, even if the evidence itself is not in dispute. See Manners v. Cannella, 891 F.3d 959, 967 (11th Cir. 2018); Burroughs Corp. v. Am. Druggists’ Ins. Co., 450 So. 2d 540, 544 (Fla. 2d Dist. Ct. App. 1984).
The plaintiffs, who sought garnishment under
As a reminder, we repeat the substantive TRIA standard we approved in Stansell II. An agency or instrumentality is “any SDNT . . . that is or was ever involved” in the FARC‘s narcotics trafficking operations “or that assisted the FARC‘s financial or money laundering network” because it “was either (1) materially assisting in, or providing financial or technological support for or to,” or “providing goods or services in support of,” the FARC‘s international narcotics trafficking activities; and/or (2) “owned, controlled, or directed by, or acting for or on behalf of” the FARC; and/or (3) “playing a significant role in” the FARC‘s narcotics trafficking. See Stansell II, 771 F.3d at 724 n.6, 732. And, as discussed earlier, knowledge is required for agency status but not for instrumentality status.
We held in Stansell II that an “indirect” relationship can suffice to meet this standard, but did not elaborate further on what such a relationship consists of. See id. at 742. Common sense indicates, however, that the more attenuated the link the more difficult it will be to prove agency/instrumentality status. To use a pop culture analogy, the mere associations used in the game “Six Degrees of Kevin Bacon“—which involves linking American actor Kevin Bacon to other actors via their roles in six film titles or less—would not suffice under
B
The plaintiffs’ agency/instrumentality theory in the district court was based on a series of indirect connections. As the plaintiffs told the magistrate judge, “we have acknowledged from the outset that we were trying to prove up an indirect relationship.” D.E. 230 at 204.
As summarized by the magistrate judge, the plaintiffs’ evidence showed the following. First, according to the OFAC Mr. Lopez—an SDNT—operated as the “frontman” or testaferro for Mr. El Aissami—also an SDNT. Second, Mr. Lopez laundered and moved money for Mr. El Aissami (1) flowing to the latter as a result of his ties to and membership in the Cartel of the Suns and (2) derived from the sale of cocaine manufactured by the FARC. Third, the Cartel of the Suns earned significant income from the sale
The magistrate judge and the district court, as noted earlier, concluded that there were no material issues of fact as to whether Mr. Lopez was an agency or instrumentality of the FARC. Although we understand why they viewed the evidence as supporting the plaintiffs’ position, under
William Marquardt, a forensic accountant and director for Berkeley Research Group (BRG), was the first expert witness for the Lopez appellants. He testified (1) that the 2017 OFAC determination of Mr. Lopez as an SDNT did not mention the FARC; and (2) that he performed a data analysis comparing an OFAC list of individuals associated with the FARC but was unable to link any of those individuals to Mr. Lopez or his companies (including the directors, officers, shareholders, and managers of those companies). See D.E. 230 at 20, 22. He opined, therefore, that none of the persons the OFAC directly tied to the FARC were connected, linked, or associated with Mr. Lopez or any of his companies. See id. at 23.
The Lopez appellants’ second expert witness was Ernesto Carrasco Ramirez, a Colombian attorney who specialized in criminal law and served as a director of BRG. While in Colombia, he worked for the Solicitor General‘s Office (from 1991 to 1994) and the Attorney‘s General‘s Office (from 1994 to 1998). In the latter position he served as the Director of the National Prosecutors’ Office for a year or so and learned about the FARC and its activities. See id. at 32-35. In later jobs in the private sector, such as with Kroll International in Mexico City and ON Partners in Colombia, he maintained contacts with Colombian government sources who had information related to the FARC. See id. at 37-38.
Mr. Carrasco did not meet or interview Mr. Lopez. See id. at 51. Based on his “personal knowledge” and contact with sources, however, he was “unable to establish any direct or indirect link between [Mr.] Lopez . . . and the FARC.” Id. at 39. See also id. at 45 (“[T]here is no connection between [Mr.] Lopez . . . and [the] FARC.“). With respect to the Cartel of the Suns—whom he described as a “group of Venezuelan generals and probably high-ranking officers” of the Chavez and Maduro regimes “dedicated to drug trafficking“—he testified that there was a “close link” between the FARC and the Chavez regime with the Cartel of the Suns “at an intellectual and political level.” Id. at 44. But he did “not identify the connection
The Lopez appellants also introduced the declarations of Mr. Lopez and of Richard Gregorie. The plaintiffs objected on the ground that those two individuals were not present at the evidentiary hearing, but the magistrate judge overruled the objection, and the district court did not disturb that ruling. See id. at 52.8
In his first declaration, made under penalty of perjury, Mr. Lopez stated based on “personal knowledge” that he never “directly or indirectly . . . [was] associated with[,] provided material assistance to[,] engaged in financial transactions with[,] or supported in any way, financially, logistically, or otherwise, the FARC.” D.E. 113-1 at ¶¶ 2, 7. He made the same statements of denial with respect to his companies. See id. at ¶¶ 8-13. In his second declaration, made under penalty of perjury and pursuant to
- “I am not, nor have I ever been[,] involved in narcotics drug trafficking.”
- “I am not, nor have I ever been, a frontman for Tareck El Aissami.”
- “I am not, nor have I ever been, a member of the Cartel of the Suns.”
- “I have not, nor have I ever, laundered drug proceeds for Tareck El Aissami.”
Id. at ¶¶ 8-11.
Mr. Gregorie, a managing director of BRG, worked for the Department of Justice for 42 years and handled a number of complex prosecutions, including those of leaders of the Medellin and Cali drug cartels. While at the U.S. Attorney‘s Office in the Southern District of Florida, he served as the Chief of Narcotics and the Chief of the Criminal Division. See D.E. 97-3 at 1. In his declaration, submitted under penalty of perjury and pursuant to
This evidence, viewed collectively and taken in the light most favorable to the Lopez appellants, created material issues of fact as to whether Mr. Lopez and his companies were agencies or instrumentalities of the FARC. Take Mr. Lopez‘s two declarations. Though the declarations were self-serving and uncorroborated, the factual statements in them were based on personal knowledge, as Mr. Lopez would know whether he was ever a frontman for Mr. El Aissami, or whether he ever laundered narcotics proceeds for him, or whether he ever associated with someone from the FARC or the Cartel of the Suns. Those statements therefore had to be accepted
To tie the bow, we also note that during cross-examination at the evidentiary hearing each of the plaintiffs’ own experts provided some testimony which permitted inferences supporting the position of the Lopez appellants. First, Douglas Farah and Paul Craine acknowledged that they had not reviewed the financial statements or transactions of any of Mr. Lopez‘s companies. See D.E. 230 at 91-92, 188. So even if Mr. Lopez were individually characterized as an agency or instrumentality of the FARC, it is not apparent that the companies also had that status. Second, Mr. Farah and Luis Cote Gomez conceded that the OFAC did not link Mr. El Aissami to the FARC, did not tie Mr. Lopez and his companies to the FARC, and did not connect Mr. Lopez to the Cartel of the Suns. See id. at 101-02, 124-25. Third, when asked by the magistrate judge whether “Mr. El Aissami‘s activities also relate to potential things that have nothing directly to do with the FARC,” such as corruption in the Venezuelan oil industry, Mr. Craine answered “[y]es, potentially.” Id. at 190. And he admitted that crimes like embezzlement of government funds would not relate “directly to the FARC.” Id. at 191.
In sum, we conclude that the evidence, viewed in the light most favorable to the Lopez appellants, presented a jury question on their agency/instrumentality status under
IV
Two of the consolidated appeals—Case Nos. 20-12467 & 20-12545—concern the attachment and sale of real property located at 325 Leucadendra Drive in Coral Gables, Florida.
A
In Case No. 20-12467, Mr. Lopez and Leucadendra 325 appeal the district court‘s denial of their motion for a preliminary injunction to prevent the sale of the property. In their initial brief, Mr. Lopez and Leucadendra 325 contend that they are also appealing the district court‘s July 6, 2020, order denying their motion to strike the writ of execution on the property. See Appellants’ Br. at 10. But the notice of appeal in this case was never amended to include the July 6th order. Instead, the appeal of that order resulted in the opening of a separate case, which Mr. Lopez and Leucadendra 325 voluntarily dismissed in September of 2020. See Stansell v. Revolutionary Armed Forces of Colombia, No. 20-12888 (11th Cir. July 30, 2020) (notice of appeal filed Jul. 30, 2020). So this appeal—Case No. 20-12467—concerns only the order denying Mr. Lopez‘s and Leucadendra 325‘s motion for a preliminary injunction to prevent the sale of the property.
Mr. Lopez and Leucadendra 325 argue that the district court erred in failing to stop the sale. See Appellants’ Br. at 55-57. Because that sale took place and the property was sold to a third party, we cannot grant the requested relief (i.e., preventing the sale). Cf. United States v. Certain Real & Pers. Prop. Belonging to Hayes, 943 F.2d 1292, 1296 (11th Cir. 1991) (“The sale of the property to a third-party
B
On July 2, 2020, after the district court denied the motions of Mr. Lopez and Leucadendra 325 to stop the sale of the property located at 325 Leucadendra Drive, but before the sale, Ms. Leiva—Mr. Lopez‘s wife—filed a motion to intervene as of right under
The district court denied Ms. Leiva‘s motion to intervene as untimely. First, the court explained that Mr. Lopez and his counsel (“and presumably [Ms.] Leiva“) knew as of February of 2017 that the OFAC had blocked the property at 325 Leucadendra Drive and knew as of March of 2020 that a writ of execution had been issued against that property. Second, the same counsel who represented Mr. Lopez represented Ms. Leiva. Third, although Mr. Lopez had filed numerous motions with respect to the property since that time, none of the motions “mentioned that his wife own[ed] an interest in the property.” D.E. 413 at 2 & n.1. Because Ms. Leiva had raised her alleged ownership interest at the “eleventh” hour, her motion was untimely. See id. at 2.10
Generally speaking, the denial of a motion to intervene is not a final order. Nevertheless, we have provisional appellate jurisdiction to review the district court‘s denial of Ms. Leiva‘s
Our review of a timeliness determination under
To intervene as of right pursuant to
Ms. Leiva‘s interests were not, in fact, adequately represented by Mr. Lopez and Leucadendra 325. They were challenging the attachment to and sale of the property on the grounds that Mr. Lopez was not an agency or instrumentality of the FARC. Ms. Leiva‘s claim to the property did not rest on those grounds. Her position was that, regardless of Mr. Lopez‘s status as an agency or instrumentality of the FARC, she herself was not such an agency or instrumentality, and as a result had a right to a portion of the sale proceeds equal to her partial ownership interest. In other words, she was attempting to assert a defense akin to an innocent owner defense under the TRIA.11
Ms. Leiva‘s claim to the property was also factually distinct from that of Mr. Lopez and Leucadendra 325. Her motion acknowledged that the district court would need to consider and adjudicate whether she had an interest in the property before the sale proceeds could be fully disbursed. The court would have had to parse through a series of real property transactions and stock transfers involving four different legal entities that Ms. Leiva described in her motion—none of which were at issue in the proceedings as litigated by Mr. Lopez and Leucadendra 325.12
V
In Case No. 20-11736, we reverse the turnover judgments because there are issues of fact as to whether Mr. Lopez and his companies are or were agencies or instrumentalities of the FARC. In Case No. 20-12467, we dismiss the appeal of Mr. Lopez and Leucadendra 325 as moot. In Case No. 20-12545, we agree with the district court that Ms. Leiva‘s motion to intervene was untimely and dismiss the appeal. The case is remanded to the district court for further proceedings consistent with our opinion.
AFFIRMED in part, DISMISSED in part, and REVERSED AND REMANDED in part.