20-CV-9380 (JMF)
UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK
November 24, 2021
JESSE M. FURMAN, United States District Judge
OPINION AND ORDER
JESSE M. FURMAN, United States District Judge:
This case is one of the first brought in this District under the Cuban Liberty and Democratic Solidarity Act of 1996,
Defendants now move, pursuant to Rules 12(b)(1) and 12(b)(6) of the Federal Rules of Civil Procedure, to dismiss Plaintiffs’ claims. They raise various arguments, including that Plaintiffs lack standing under Article III of the Constitution and that Plaintiffs’ claims are time barred by the Act, which provides that an action “may not be brought more than 2 years after the trafficking giving rise to the action has ceased to occur.”
BACKGROUND
The Court begins with the relevant background, starting with the Helms-Burton Act and then turning to the facts specific to this case. The latter are drawn from the Amended Complaint (“Complaint“), ECF No. 29 (“Compl.“) and assumed to be true for purposes of this motion. See, e.g., Biro v. Conde Nast, 807 F.3d 541, 544 (2d Cir. 2015).
A. The Helms-Burton Act
In 1996, seeking to strengthen the United States’ economic sanctions on Cuba and hasten the end of the Fidel Castro regime, Congress passed the Helms-Burton Act. Congress observed that Cuba was “offering foreign investors the opportunity to purchase an equity interest in, manage, or enter into joint ventures,” oftentimes using property confiscated from United States nationals, and that these foreign investors were, in turn, providing Cuba with “badly needed financial benefit, including hard currency, oil, and productive investment and expertise.”
Under Title III, a person “traffics” in confiscated property if that person “knowingly and intentionally” “sells, transfers, distributes, dispenses, brokers, manages or otherwise disposes of confiscated property, or purchases, leases, receives, possesses, obtains control of, manages, uses, or otherwise acquires or holds an interest in confiscated property . . . [or] engages in a commercial activity using or otherwise benefiting from confiscated property,” or if that person “causes, directs, participates in, or profits from, trafficking . . . or otherwise engages in trafficking . . . through another person.”
The enactment of Title III was not welcomed universally. See, e.g., Havana Club Holding, S.A. v. Galleon S.A., 961 F. Supp. 498, 501 n.5 (S.D.N.Y. 1997) (explaining, shortly after the Act‘s passage, that Title III had been characterized as “objectionable and onerous to United States allies” and that some allies had responded to its passage with “nothing less than ‘outrage‘“). Perhaps anticipating that reaction, Congress granted the President the power to suspend the private right of action created by Title III if he or she “determines . . . that suspension is necessary to the national interests of the United States and will expedite a transition to democracy in Cuba.”
B. Factual Background
In 1958, before Fidel Castro came to power in Cuba, Banco Pujol was the seventh largest Cuban owned bank, controlling $25.1 million in assets. Compl. ¶ 25. On October 14, 1960, the new Castro government confiscated Banco Pujol and absorbed
Plaintiffs here are United States citizens (or the estates thereof) who inherited interests in Banco Pujol. Id. ¶¶ 6-16, 25. They bring claims under Title III against SG and Paribas, major multinational banks, for trafficking in confiscated Banco Pujol property. Id. ¶¶ 36, 43, 61. In particular, Plaintiffs allege that sometime after December 11, 1995, SG opened at least six credit facilities that made loans to BNC or to “a New-Jersey incorporated entity for subsequent transfer to” BNC. Id. ¶¶ 36, 37. They allege that between 2000 and 2010, Paribas operated “eight credit facilities” for Cuban banks and “opened U.S.-dollar accounts with Cuban banks,” including BNC, “to permit them access to U.S. dollars.” Id. ¶ 43.
Plaintiffs allege that the opening of these credit facilities, and loans made to BNC, constitute trafficking within the meaning of Title III because BNC “knowingly and intentionally . . . manag[ed], posess[ed], obtain[ed] control of, or otherwise acquir[ed] or [held] an interest in” and “used or benefited from” the property confiscated from Banco Pujol, and SG and Paribas “knowingly and intentionally participated in and profited from BNC‘s trafficking in [the] confiscated property.” Id. ¶ 39 (internal quotation marks omitted); see also id. ¶ 47. Through these facilities, Plaintiffs allege, SG and Paribas provided BNC with access to U.S. dollar credit facilities that it could not otherwise access and “earned significant profits from operating the . . . facilities.” Id. ¶¶ 38, 39; see also id. ¶¶ 46, 47.
Plaintiffs allege that SG and Paribas also trafficked in property confiscated from Banco Pujol by “knowingly and intentionally engag[ing] in, participat[ing] in, and profit[ing] from commercial activities that used or otherwise benefited from confiscated property.” Id. ¶ 40 (internal quotation marks omitted); see also id. ¶ 48. According to Plaintiffs, SG and Paribas benefited from the property confiscated from Banco Pujol because that property “made BNC a more stable, less risky, and more desirable counterparty than it otherwise would have been” for the credit facilities. Id. ¶¶ 40, 48. Finally, Plaintiffs allege that SG and Paribas “continue to traffic in” Banco Pujol‘s confiscated property “in substantially the same manner” by “continu[ing] to operate similar credit facilities,” although the facilities now exclude U.S. dollar transactions. Id. ¶¶ 54, 59.
LEGAL STANDARD
Defendants move jointly to dismiss Plaintiffs’ Complaint pursuant to Rules 12(b)(1) and 12(b)(6). ECF No. 41 (“Defs.’ Mem.“) at 39. A Rule 12(b)(1) motion challenges the court‘s subject-matter jurisdiction to hear the case. “A case is properly dismissed for lack of subject matter jurisdiction under Rule 12(b)(1) when the district court lacks the statutory or constitutional power to adjudicate it.” Makarova v. United States, 201 F.3d 110, 113 (2d Cir. 2000). In reviewing a motion to dismiss under Rule 12(b)(1), a court “must take all facts alleged in the complaint as true and draw all reasonable inferences in favor of plaintiff, but jurisdiction must be shown affirmatively, and that showing is not made by drawing from the pleadings inferences favorable to the party asserting it.” Morrison v. Nat‘l Austl. Bank Ltd., 547 F.3d 167, 170 (2d Cir. 2008) (internal quotation marks and citation omitted), aff‘d, 561 U.S. 247 (2010). “The plaintiff bears the burden of proving subject matter jurisdiction by a preponderance of the evidence.” Aurecchione v. Schoolman Transp. Sys., Inc., 426 F.3d 635, 638 (2d Cir. 2005).
By contrast, a Rule 12(b)(6) motion tests the legal sufficiency of a complaint and requires a court to determine whether the facts alleged in the complaint are sufficient to show that the plaintiff has a plausible claim for relief. See Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009). When ruling on a Rule 12(b)(6) motion, a court must accept the factual allegations set forth in the complaint as true and draw all reasonable inferences in favor of the plaintiff. See, e.g., Holmes v. Grubman, 568 F.3d 329, 335 (2d Cir. 2009). To survive such a motion, however, the plaintiff must plead sufficient facts “to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). A claim is facially plausible “when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. at 678.
DISCUSSION
Defendants advance a handful of arguments in support of dismissal. The Court, however, reaches only two: first, whether Plaintiffs have standing, as that is a “threshold jurisdictional question” and cannot be assumed, Steel Co. v. Citizens for a Better Env‘t, 523 U.S. 83, 102 (1998); and second, whether Plaintiffs’ claims are timely. The Court will address each in turn.
A. Standing
Article III of the Constitution restricts the “judicial Power” of the United States to “Cases” and “Controversies.”
Here, Plaintiffs allege that they suffered injuries sufficient to confer standing because Defendants “use[d], exploit[ed], and derive[d] benefits from their confiscated property, without their permission and without compensating them for the property‘s use.” ECF No. 48 (“Pls.’ Opp‘n“) at 8-9. In response, Defendants offer two arguments as to why these injuries are insufficient. First, they contend that Plaintiffs allege only one true concrete injury, the confiscation of Banco Pujol, and it is not fairly traceable to Defendants’ conduct. Defs.’ Mem. 9-10. Second, and relatedly, Defendants argue that to the extent Plaintiffs allege any injury that is fairly traceable to their trafficking in Plaintiffs’ confiscated property, that injury is a mere statutory violation and not sufficiently concrete to satisfy the constitutional requirements of Article III. Id. at 11-12. Neither argument is persuasive.
With respect to the first, Plaintiffs allege an injury from Defendants’ trafficking that is distinct from the confiscation of Banco Pujol by the Cuban Government.
With respect to the second argument — that Plaintiffs’ alleged injuries are insufficiently concrete to satisfy Article III — Defendants are, of course, correct that “‘a plaintiff [does not] automatically satisf[y] the injury-in-fact requirement whenever a statute grants a person a statutory right and purports to authorize that person to sue to vindicate that right.‘” Thole v. U. S. Bank N.A, 140 S. Ct. 1615, 1620 (2020) (quoting Spokeo, Inc., 136 S. Ct. at 1549). Plaintiffs must also allege a concrete injury in fact. See id. At the same time, the Supreme Court has explained that “‘[c]oncrete’ is not . . . necessarily synonymous with ‘tangible‘” and that “Congress may elevate to the status of legally cognizable injuries concrete, de facto injuries that were previously inadequate in law.” Spokeo, Inc., 136 S. Ct. at 1549 (cleaned up). In evaluating whether Congress has exercised that authority, a court must “consider whether an alleged intangible harm has a close relationship to a harm that has traditionally been regarded as providing a basis for a lawsuit in English or American courts.” Id.; see also Maddox v. Bank of N.Y. Mellon Tr. Co., N.A., No. 19-1774, 2021 WL 5347004, at *4 (2d Cir. Nov. 17, 2021).
Doing so here, the Court concludes that Congress did indeed “elevate to the status of legally cognizable” a harm that has traditionally been regarded as providing a basis for a lawsuit in American courts: the harm of unjust enrichment. “The equitable doctrine of unjust enrichment rests, generally, on the principle that a party should not be allowed to enrich himself at the expense of another.” Reprosystem, B.V. v. SCM Corp., 727 F.2d 257, 263 (2d Cir. 1984). In this case, the gravamen of Plaintiffs’ claims is that Defendants were unjustly enriched by the “significant profits” they earned based, in part, on Banco Pujol‘s confiscated assets. Compl. ¶¶ 38, 46. In fact, Congress itself recognized the relationship between unjust enrichment and claims under the statute, finding that “[t]he international judicial system, as currently structured, lacks fully effective remedies . . . for unjust enrichment from the use of wrongfully confiscated property by governments and private entities at the expense of the rightful owners of the property.”
Defendants argue that Plaintiffs cannot state a claim for unjust enrichment because they no longer own Banco Pujol‘s property, ECF No. 51 (“Defs.’ Reply“) at 3-4, but that argument misapprehends the analysis. To establish standing, Plaintiffs need not bring an unjust enrichment claim or a claim that has identical elements; it suffices for them to allege a statutory violation that is closely related to “a harm that has traditionally been regarded as providing a basis for a lawsuit.” Spokeo, Inc., 136 S. Ct. at 1549. They do so.
In short, Plaintiffs have standing to pursue their claims under the Helms-Burton Act. Notably, in reaching that conclusion, the Court joins every other court that has addressed the issue in the wake of President Trump‘s decision to lift the suspension. See Glen, 7 F.4th at 336; N. Am. Sugar Indus. Inc. v. Xinjiang Goldwind Sci. & Tech. Co., No. 20-CV-22471 (DPG), 2021 WL 3741647, at *5 (S.D. Fla. Aug. 24, 2021); Exxon Mobil Corp., 2021 WL 1558340, at *21; Glen, 529 F. Supp. 3d at 328; Havana Docks Corp. v. Carnival Corp., No. 19-CV-21724 (BB), 2020 WL 5517590, at *8 (S.D. Fla. Sept. 14, 2020); Havana Docks Corp. v. MSC Cruises SA Co., 484 F. Supp. 3d 1177, 1195 (S.D. Fla. 2020); Havana Docks Corp. v. Norwegian CruiseLine Holdings, Ltd., 484 F. Supp. 3d 1215, 1231 (S.D. Fla. 2020); Iglesias v. Ricard, No. 20-CV-20157 (KMW), 2020 U.S. Dist. LEXIS 164117, at *29 (S.D. Fla. Aug. 17, 2020).
B. Timeliness
With that, the Court turns to the merits of Plaintiffs’ claims. Defendants make various alternative arguments for why Plaintiffs fail to state a claim, but the Court reaches only one: that Plaintiffs’ claims are time barred. Defendants contend that Plaintiffs’ claims are untimely based on Section 6084 of the Helms-Burton Act, which provides that “[a]n action under section 6082 of this title [i.e., for trafficking] may not be brought more than 2 years after the trafficking giving rise to the action has ceased to occur.”
Plaintiffs offer several responses. First and most straightforward, they contend that their claims are timely because, in addition to the conduct through 2010, the Complaint alleges that Defendants “continue to traffic in Plaintiffs’ property in substantially the same manner” and that “[b]oth Defendants continue to operate similar credit facilities.” Id. ¶ 54; accord id. ¶ 59; see Pls.’ Opp‘n 26-27. But when it comes to assessing timeliness, such conclusory assertions of “continuing” or “ongoing” conduct do not cut it. See, e.g., Chiu v. Au, No. 03-CV-1150 (RNC), 2005 WL 2452565, at *3 (D. Conn. Sept. 30, 2005) (holding that the plaintiff‘s allegations “in conclusory terms that the defamation against him is ongoing” were “too vague to state a claim for relief that is not barred by the statute of limitations“); Broughton v. Livingston Indep. Sch. Dist., No. 08-CV-175 (TH), 2009 WL 10707489, at *6 (E.D. Tex. June 11, 2009) (same); cf. Shomo v. City of New York, 579 F.3d. 176, 181 (2d Cir. 2009) (“To trigger the continuing violation doctrine when challenging discrimination, the plaintiff must allege both the existence of an ongoing policy of discrimination and some non-time-barred acts taken in furtherance of that policy.” (internal quotation marks omitted) (emphasis added)); Gaughan v. Nelson, No. 94-CV-3859 (JFK), 1997 WL 80549, at *5 (S.D.N.Y. Feb. 26, 1997) (holding that “a few non-specific and conclusory allegations of” discriminatory conduct within the time limitation were not sufficient to establish timeliness under a continuing violations theory); see also generally Iqbal, 556 U.S. at 678, 678 (holding that “naked assertions devoid of further factual enhancement” are not sufficient to state a claim and that a court need not accept as true “conclusory statements” in a complaint (cleaned up)).
Plaintiffs further argue that “Defendants’ own admissions support an inference of continued trafficking” because (1) Defendants previously disregarded U.S. criminal law in pursuit of profits related to the facilities; (2) Defendants “renewed [the] facilities in Euros” after facing liability in the United States; (3) BNC maintains an office in Paris to conduct business with French banks; and (4) Defendants did not affirmatively say, in response to Plaintiffs’ claims, that they had stopped trafficking in confiscated property. Id. at 27-28. But these arguments do not withstand scrutiny. The fact that Defendants previously disregarded U.S. criminal law in connection with the facilities says nothing about whether they continued to do so during the limitations period. So too, it is a non sequitur to suggest that Defendants continue to offer credit facilities to BNC simply because BNC has an office in Paris and Defendants are Paris-based banks. And at this stage of the litigation, the mere fact that Defendants have not affirmatively denied Plaintiffs’ allegations does not mean that the allegations are plausible. That leaves the alleged fact that Defendants “renewed,” ECF No. 29-2, at 47, or “converted,” ECF No. 29-3, at 51, the facilities into Euros. See Compl. ¶¶ 54, 59. The alleged renewals and conversions, however, happened in 2010. ECF No. 29-2, at 47; ECF No. 29-3, at 51. Moreover, there is no indication that either Defendant renewed facilities available to BNC as opposed to other Cuban entities to which they made credit facilities available. See ECF No. 29-2, at 47 (noting, with respect to some of the facilities, that SG “did not renew them at the end of their term“).1 When push comes to shove, “the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct” after 2010. Iqbal, 556 U.S. at 679; see also Twombly, 550 U.S. at 570 (noting that a complaint “must be dismissed” if “the plaintiffs . . . have not nudged their claims across the line from conceivable to plausible“).
Perhaps recognizing that their allegations of misconduct since 2010 are inadequate, Plaintiffs make a second argument: that, at the Rule 12(b)(6) stage, dismissal based on timeliness is appropriate only if it is clear from “‘the face of the complaint‘” that the claims are time-barred. Pls.’ Opp‘n 26 (citing Conn. Gen. Life Ins. Co. v. BioHealth Lab‘ys, Inc., 988 F.3d 127, 132 (2d Cir. 2021)). Defendants argue that is
102 (2d Cir. 2004)). Relatedly, they cite cases for the proposition that “when the very statute which creates the cause of action also contains a limitation period, the plaintiff must plead and prove facts showing that he is within the statute.” Mori v. Saito, 10-CV-6465 (KBF), 2013 WL 1736527, at *3 (S.D.N.Y. Apr. 19, 2013) (cleaned up). But the Court need not and does not decide who has the better of that debate because, even if Plaintiffs are right, the doctrine provides them no relief. That is because Plaintiffs — whether they were required to do so or not — explicitly allege that Defendants’ trafficking conduct ended more than a decade ago. See Compl. ¶ 37 (“SocGen processed at least 2,500 transactions — valued at $13 billion — through New York financial institutions between 2004 and 2010.“); id. ¶ 43 (“[F]rom at least 2000 to 2010, Paribas offered U.S.-dollar financing to Cuban entities.“). Plaintiffs may be right that “‘no information’ [about timeliness] precludes dismissal,” Pls.’ Opp‘n. 27 (quoting Fargas v. Cincinnati Mach., LLC, 986 F. Supp. 2d 420, 427 (S.D.N.Y. 2013)), but their Complaint has information — namely, the specific dates of Defendants’ alleged conduct. That is, ignoring Plaintiffs’ conclusory allegations about “continuing” and “ongoing” conduct, as the Court must for the reasons discussed above, the Court is left with a Complaint that, on its face, does reveal the claims to be time barred. See 5B Fed. Prac. & Proc. Civ. § 1357 (3d ed.) (“[T]he inclusion of dates in the complaint indicating that the action is untimely renders it subject to dismissal for failure to state a claim. This particularly is true if the action sued on is statutory in origin, because the bar of the statute of limitations then is said to extinguish not only the remedy but the underlying substantive right as well.” (footnotes omitted)).2
That leaves only Plaintiffs’ final argument: that the time bar in Section 6084 was tolled — either equitably or per the statute‘s terms — during the time that Title III was suspended at the direction of the President (i.e., until 2019). Pls.’ Opp‘n 28-33. Whether equitable tolling is available turns in the first instance on whether Section 6084 is a statute of limitation or a statute of repose, as the Supreme Court has made clear that statutes of repose are “in general not subject to tolling.” Cal. Pub. Emps.’ Ret. Sys. v. ANZ Sec., Inc., 137 S. Ct. 2042, 2050 (2017). Instead, “[t]olling is permissible only where there is a particular indication that the legislature did not intend the statute to provide complete repose but instead anticipated the extension of the statutory period under certain circumstances.” Id.; see also Police & Fire Ret. Sys. of City of Detroit v. IndyMac MBS, Inc., 721 F.3d 95, 106 (2d Cir. 2013) (“[A] statute of repose is subject only to legislatively created exceptions, and not to equitable tolling.” (cleaned up)); accord United States ex rel. Wood v. Allergan, Inc., No. 19-CV-4029 (JMF), 2020 WL 3073293, at *2 (S.D.N.Y. June 10, 2020). Defendants argue that Section 6084 is a statute of repose and, therefore, not subject to equitable tolling. Defs.’ Mem. 12. Plaintiffs counter that Section 6084 is a statute of limitations and that it was equitably tolled. Pls.’ Opp‘n 31-32.
Defendants have the better of the argument. The time limitation in Section 6084 runs from the date “the trafficking giving rise to the action has ceased to occur.”
Plaintiffs offer no persuasive argument to the contrary. They argue that the date on which “the trafficking giving rise to that action has ceased to occur,”
In the alternative, Plaintiffs argue that, under the statute itself, any time during which the right to bring suit under Section 6082 is “suspend[ed]” by the President is excluded from the time in which suit must be brought under Section 6084. Pls.’ Opp‘n 29 (citing
The Court is not persuaded. “When interpreting a statute,” a court must “begin with the text. [It] must give effect to the text‘s plain meaning, . . . [which] draws on the specific context in which that language is used, and the broader context of the statute as a whole. Where the plain meaning of the text is clear, [the] inquiry generally ends there.” Jingrong v. Chinese Anti-Cult World All. Inc., 16 F.4th 47, 57 (2d Cir. 2021) (cleaned up). Here, the meaning of the relevant text, Section 6085(c)(1)(B), is plain. It provides only that “the President may suspend the right to bring an action” under the Act (if the President makes certain findings and reports to Congress) and makes no reference to Section 6084 or the time within which a plaintiff must bring an action in the first instance.
This reading is reinforced by the fact, noted above, that one of Congress‘s principal purpose in enacting Title III — as evidenced by the three-month safe harbor in Section 6082(a)(1)(A) — was not to maximize victim compensation, but rather to
Plaintiffs’ counterarguments fall short. First, it is immaterial that “the terms ‘toll’ and ‘suspend‘” are “interchangeabl[e].” Artis v. D.C., 138 S. Ct. 594, 601-02 (2018), quoted at Pls.’ Opp‘n 29. The question here is what a presidential suspension tolls. By the statute‘s terms, the answer is “the right to bring an action,”
shall cease” upon a determination that a democratically elected government has come to power in Cuba — actually cuts against Plaintiffs’ reading of the statute because it makes plain that Congress‘s principal purpose was to bring about regime change in Cuba (by forcing companies to cease doing business there), not to maximize victim compensation. Finally, statements by the President and other executive branch officials cannot, of course, alter the plain meaning of a statute. Cf. Chevron, U.S.A., Inc. v. Nat. Res. Def. Council, Inc., 467 U.S. 837, 842-43 (1984) (providing that no deference should be given to an executive branch agency‘s interpretation of a statute where “the intent of Congress is clear” because “the court, as well as the agency, must give effect to the unambiguously expressed intent of Congress“). In any event, the statements at issue, considered in context, refer only to the fact that the executive branch‘s initial strategy was “to allow Title III to come into effect” while “suspend[ing] for a six-month period the right to file individual suits,” giving the executive branch time to “work vigorously with allies and with foreign companies to build support for a series of steps to promote democracy in Cuba.” Briefing, 1996 WL 396125 at *2. There is no indication that the speakers envisioned the suspension lasting for twenty-three more years. And regardless, nothing in the statements speaks to the implications of the suspension with respect to Section 6084.
In short, the Court concludes that Section 6084 was not tolled by the suspensions of Title III. Accordingly, and for the reasons discussed above, Plaintiffs’ claims are untimely.
CONCLUSION
For the foregoing reasons, Defendants’ motion to dismiss is GRANTED on the ground that Plaintiffs’ claims are time
SO ORDERED.
Dated: November 24, 2021
New York, New York
JESSE M. FURMAN
United States District Judge