Nilo Jerez v. Republic of Cuba , 775 F.3d 419 ( 2014 )

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued November 10, 2014 Decided December 30, 2014
No. 13-7141
NILO JEREZ,
APPELLANT
v.
REPUBLIC OF CUBA, ET AL.,
APPELLEES
Appeal from the United States District Court
for the District of Columbia
(No. 1:09-mc-00466)
Richard J. Oparil argued the cause and filed the briefs for
appellant.
Michael R. Krinsky argued the cause for appellees. With
him on the brief was David B. Goldstein.
Before: BROWN, Circuit Judge, and WILLIAMS and
GINSBURG, Senior Circuit Judges.
Opinion for the Court filed by Senior Circuit Judge
WILLIAMS.
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WILLIAMS, Senior Circuit Judge: Nilo Jerez filed suit in
Florida state court against the Republic of Cuba and various
codefendants, including Fidel Castro and the “Cuban
Revolutionary Armed Forces,” alleging that he had suffered
horrifying torture at their hands and continued to suffer the
consequences. Having obtained a default judgment in state
court, Jerez now seeks to execute that judgment on patents
and trademarks held or managed by the appellees in this
action, who are allegedly agents and instrumentalities of
Cuba. Because the Florida state court lacked subject-matter
jurisdiction to grant the default judgment, we affirm the
district court’s denial of Jerez’s request.
* * *
In the 1960s and 1970s, while incarcerated in Cuba, Nilo
Jerez allegedly endured unlawful incarceration and torture
committed by the Cuban government and its codefendants.
The torture allegedly included such features as having
electricity run through his body causing loss of bodily
functions and consciousness and being forced to live
surrounded by his own urine and feces. Readers familiar with
Against All Hope, Armando Valladares’s account of his
incarceration by the same parties, will find much of Jerez’s
treatment similar to that inflicted on Valladares and depicted
by him as having been extended to many of his fellow
prisoners. In Jerez’s case, he alleges, the defendants also
purposefully injected him with the hepatitis C virus and
subjected him to other conditions also causing hepatitis C,
which has in turn caused him ongoing cirrhosis of the liver.
In 2005, years after arriving in the United States, Jerez
sued the defendants for compensatory and punitive damages
in Florida state court (specifically the Eleventh Judicial
Circuit in and for Miami-Dade County, Florida). After the
defendants failed to appear, the court found them liable under
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the Torture Victim Protection Act and granted Jerez a default
judgment for $200 million. Although Jerez’s complaint
alluded to the Foreign Sovereign Immunities Act (“FSIA”), he
claimed jurisdiction under the Alien Tort Claim Act, and the
court found jurisdiction on that basis.
To enforce the default judgment, Jerez sued in the United
States district court for the Southern District of Florida. The
defendants again defaulted. The court granted full faith and
credit to the Florida state court judgment and granted Jerez
judgment for $200 million plus interest. The Florida district
court made no mention of the basis for its jurisdiction.
Jerez registered the Florida district court’s default
judgment in the United States district court for the District of
Columbia. He also applied for various writs of attachment on
certain patents and trademark registrations held by alleged
agencies and instrumentalities of Cuba; the latter, together
with intervenor Camara de Comercio, manager of a trademark
on Cuban cigars, are collectively the appellees in this action.
The history of the successive writs is tangled and irrelevant to
the outcome of the case.
The appellees moved to vacate a writ of attachment that
had been issued, while Jerez cross-moved for an order to show
cause why a new writ of attachment should not issue against
them. A magistrate judge found that the Florida state and
district courts lacked jurisdiction under the FSIA to grant the
default judgments, and accordingly granted the appellees’
motions to vacate the writ. Jerez v. Republic of Cuba, 777 F.
Supp. 2d 6 (D.D.C. 2011). The district judge overruled
Jerez’s objections to the magistrate judge’s order, Jerez v.
Republic of Cuba, 964 F. Supp. 2d 52 (D.D.C. 2013), and
issued an order to that effect. We affirm the district court.
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* * *
A default judgment rendered in excess of a court’s
jurisdiction is void. See Bell Helicopter Textron, Inc. v.
Islamic Republic of Iran, 734 F.3d 1175, 1181 (D.C. Cir.
2013). Thus, a court asked to enforce a default judgment must
entertain an attack on the jurisdiction of the court that issued
the judgment. If it finds that the issuing court lacked
jurisdiction, it must vacate the judgment.
Then-Judge Ginsburg put the rules clearly and succinctly
in Practical Concepts, Inc. v. Republic of Bolivia, 811 F.2d
1543 (D.C. Cir. 1987):
A defendant who knows of an action but believes the
court lacks jurisdiction over his person or over the
subject matter generally has an election. He may
appear, raise the jurisdictional objection, and
ultimately pursue it on direct appeal. If he so elects,
he may not renew the jurisdictional objection in a
collateral attack. . . .
Alternatively, the defendant may refrain from
appearing, thereby exposing himself to the risk of a
default judgment. When enforcement of the default
judgment is attempted, however, he may assert his
jurisdictional objection. If he prevails on the
objection, the default judgment will be vacated.
Id. at 1547. See also Insurance Corp. of Ireland v.
Compagnie des Bauxites de Guinee, 456 U.S. 694, 706
(1982); RESTATEMENT (SECOND) OF JUDGMENTS § 65 cmt. b
(1982).
Jerez points to Insurance Corp. of Ireland, where the
Court said that “principles of res judicata apply to
jurisdictional determinations.” Insurance Corp. of Ireland,
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456 U.S. at 702 n.9. He also cites language from a number of
cases to the effect that a judgment rendered by a court
assuming subject-matter jurisdiction is preclusive, even if the
judgment was incorrect, as long as the court did not “plainly
usurp jurisdiction.” Weininger v. Castro, 462 F. Supp. 2d
457, 475 (S.D.N.Y. 2006) (citing Cantor Fitzgerald, L.P. v.
Peaslee, 88 F.3d 152, 155 n.2 (2d Cir. 1996); Nemaizer v.
Baker, 793 F.2d 58, 65 (2d Cir. 1986)). But those principles
apply not to default judgments but only to contested cases,
where the defendant “had an opportunity to litigate the
question of subject-matter jurisdiction.” Insurance Corp. of
Ireland, 456 U.S. at 702 n.9. It is clear from the context of the
Supreme Court and circuit court cases that “opportunity”
means not only awareness of the litigation but the defendant’s
actually appearing in it. See id.; Chicot County Drainage
Dist. v. Baxter State Bank, 308 U.S. 371, 376-78 (1940);
Nemaizer, 793 F.2d at 65. In contrast, a defendant that has
never appeared is always free under Insurance Corp. of
Ireland and Practical Concepts to assert a jurisdictional attack
later, in the court where enforcement of the default judgment
is sought, and to have its jurisdictional objections considered
de novo. See Practical Concepts, 811 F.2d at 1547. To the
extent that Weininger suggests the contrary, we respectfully
disagree (and are in any event precluded from agreement by
Practical Concepts and Bell Helicopter).
We would reach the same result if we approached the
judgment of the Florida state court through the lens of the Full
Faith and Credit Act, 28 U.S.C. § 1738. Under the Act,
federal courts are “to accept the rules chosen by the State from
which the judgment is taken,” including the rules with respect
to jurisdiction. Kremer v. Chem. Constr. Corp., 456 U.S. 461,
482 (1982); see also Marrese v. Am. Acad. of Orthopaedic
Surgeons, 470 U.S. 373, 381 (1985). Florida law, like federal
law, calls for a de novo examination of the Florida state
court’s jurisdiction: “A judgment entered by a court which
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lacks subject matter jurisdiction is void and subject to
collateral attack under [Florida] rule 1.540 at any time.”
McGhee v. Biggs, 974 So. 2d 524, 526 (Fla. Dist. Ct. App.
2008). And if the issuing court “did not have jurisdiction over
the subject matter or the relevant parties, full faith and credit
need not be given.” Underwriters Nat’l Assurance Co. v. N.C.
Life & Accident & Health Ins. Guar. Ass’n, 455 U.S. 691, 705
(1982).
The FSIA contains a separate provision regarding default
judgments, 28 U.S.C. § 1608(e), but it does not controvert the
principles of Practical Concepts. The statute provides that no
“judgment by default shall be entered by a court . . . unless the
claimant establishes his claim or right to relief by evidence
satisfactory to the court.” 28 U.S.C. § 1608(e). This provides
foreign sovereigns a special protection akin to that assured the
federal government by Fed. R. Civ. P. 55(e). See Commercial
Bank of Kuwait v. Rafidain Bank, 15 F.3d 238, 242 (2d Cir.
1994); RESTATEMENT (FOURTH) OF THE FOREIGN RELATIONS
LAW OF THE UNITED STATES § 463 reporters’ note 2
(Preliminary Draft No. 2, 2014). The rationale for such extra
protection of sovereigns is that “the government is sometimes
slow to respond and that the public fisc should be protected
from claims that are unfounded but would be granted solely
because the government failed to make a timely response.”
Marziliano v. Heckler, 728 F.2d 151, 157-58 (2d Cir. 1984).
In providing this additional protection, Rule 55(e) obviously
complements rather than replaces the res judicata principles
governing a defendant’s challenge to jurisdiction.
The process required by § 1608(e) is therefore a
supplement to, not a substitute for, the right of a foreign
sovereign defendant who has not appeared in the judgment-
granting court to obtain de novo assessment of his
jurisdictional objections. In Commercial Bank of Kuwait, for
example, the court of appeals initially addressed jurisdiction
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independently, 15 F.3d at 241, and then reviewed the district
court’s application of § 1608(e), id. at 241-42. To the extent
that the decision in Weininger rests on a view that the mandate
of §1608(e) is a substitute for the ordinary rules of res
judicata, see 462 F. Supp. 2d at 475, we again respectfully
disagree.
Finally, the jurisdiction of the Florida district court,
which issued a default judgment on the strength of the state
court’s judgment, is equally subject to de novo consideration
here and presents no additional questions.
* * *
We turn now to a de novo assessment of the Florida state
court’s jurisdiction.
The FSIA, 28 U.S.C. §§ 1602-11, is “the sole basis for
obtaining jurisdiction over a foreign state in our courts.”
Argentine Republic v. Amerada Hess Shipping Corp., 488
U.S. 428, 434 (1989). Under the FSIA, “a foreign state shall
be immune from the jurisdiction of the courts of the United
States and of the States except as provided in sections 1605 to
1607 of this chapter.” 28 U.S.C. § 1604. If no exception
applies, then the court lacks subject-matter jurisdiction.
Mwani v. bin Laden, 417 F.3d 1, 15 (D.C. Cir. 2005).
Jerez argues that two statutory exceptions apply here: the
non-commercial tort exception, 28 U.S.C. § 1605(a)(5), and
the terrorism exception, which at the relevant time was
codified as 28 U.S.C. § 1605(a)(7) (2006).
The non-commercial tort exception provides jurisdiction
for cases alleging “personal injury or death, or damage to or
loss of property, occurring in the United States and caused by
the tortious act or omission of that foreign state or of any
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official or employee of that foreign state while acting within
the scope of his office or employment.” 28 U.S.C.
§ 1605(a)(5). “[B]oth the tort and the injury must occur in the
United States.” Persinger v. Islamic Republic of Iran, 729
F.2d 835, 842 (D.C. Cir. 1984). “Congress’ primary purpose
in enacting § 1605(a)(5) was to eliminate a foreign state’s
immunity for traffic accidents and other torts committed in the
United States, for which liability is imposed under domestic
tort law.” Amerada Hess, 488 U.S. at 439-40.
The problem for Jerez is that the defendants’ alleged
tort—purposefully injecting him with hepatitis C, otherwise
subjecting him to conditions that caused hepatitis C, and
failing to warn him of the virus—occurred in Cuba. This is
obvious as to the first two. As to the failure to warn, to the
extent that such warnings might have had any value to Jerez
after he reached the United States, the omissions might seem
to have taken place in the United States. But none of the
defendants sued here was within the United States, and we
agree with the district court that under those circumstances the
omissions cannot reasonably be said to have occurred within
the United States. Jerez, 964 F. Supp. 2d at 56-57. Jerez has
suggested that unnamed representatives in the Cuba Interest
Section in Washington similarly failed to warn him, but has
afforded no reason to believe that these representatives were
aware of any relevant information. Id. at 57.
To overcome this difficulty, Jerez argues that the virus
continues to replicate in his body even now, and that “each
deployment (through such viral replication) of the biological
agent is an independent event” and “a separate and distinct
tort.” But the continued replication of hepatitis C and Jerez’s
cirrhosis of the liver describe an ongoing injury that he suffers
in the United States as a result of the defendants’ acts in Cuba.
The law is clear that “the entire tort”—including not only the
injury but also the act precipitating that injury—must occur in
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the United States. Asociacion de Reclamantes v. United
Mexican States, 735 F.2d 1517, 1525 (D.C. Cir. 1984).
Jerez seeks to reinforce the redeployment analysis by
analogizing the defendants’ actions to a foreign agent’s
delivery into the United States of an anthrax package or a
bomb. But here the defendants’ infliction of injury on Jerez
occurred entirely in Cuba, whereas the infliction of injury by
the hypothetical anthrax package or bomb would occur
entirely in the United States.
Jerez’s invocation of the FSIA’s terrorism exception is
equally problematic. In the version operative when Jerez sued
in Florida, the statute provided an exception to sovereign
immunity for cases alleging “personal injury or death that was
caused by an act of torture.” 28 U.S.C. § 1605(a)(7) (2006).
Jurisdiction is subject to two conditions: first, the state must
have been “designated as a state sponsor of terrorism . . . at
the time the act occurred,” or it must have been designated
later because of the act in question; and second, the claimant
must have been “a national of the United States . . . when the
act upon which the claim is based occurred.” Id. (That
section has since been replaced by 28 U.S.C. § 1605A.)
Jerez fails to satisfy either of these two independent
conditions. First, Cuba was not designated a state sponsor of
terrorism until 1982, and the defendants subjected Jerez to
torture in 1970 and 1971. Further, Cuba was designated a
state sponsor not because of the torture inflicted on Jerez, but
because of “support for acts of international terrorism” such as
those committed by the terrorist group M-19. Regulation
Changes on Exports: Hearing Before the Subcomm. on Near
E. & S. Asian Affairs of the S. Comm. on Foreign Relations,
97th Cong. 13 (1982) (statement of Ernest Johnson, Jr.,
Deputy Assistant Secretary for Economic Affairs, Department
of State).
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Faced with these obstacles, Jerez again invokes the
redeployment theory—that hepatitis C continues to replicate
in his body, daily inflicting new acts of torture. Now that
Cuba is designated as a state sponsor of terrorism and he is a
citizen of the United States, he reasons, the continued
replication of the virus in his body constitutes a stream of
contemporaneous acts of torture and thus satisfies both
requirements of the terrorism exception. But in ordinary
language the ongoing replication of hepatitis C and the
cirrhosis of the liver are the injuries that Jerez is suffering, not
acts of torture. Those acts occurred in Cuba before 1982,
before Jerez became a United States national and before Cuba
was designated a state sponsor.
Because no statutory exception to sovereign immunity
under the FSIA applies, the Florida state court and the Florida
district court lacked subject-matter jurisdiction. See Amerada
Hess, 488 U.S. at 433. Their default judgments are therefore
void. As a result there is no legal basis for the writ of
attachment that Jerez seeks and the appellees are entitled to
grant of their motion to vacate the previously outstanding
writ. See Practical Concepts, 811 F.2d at 1547. Accordingly
we need not address the appellees’ other arguments.
* * *
The judgment of the district court is
Affirmed.