KEITH STANSELL, MARC GONSALVES, THOMAS HOWES, JUDITH G. JANIS, CHRISTOPHER T. JANIS, GREER C. JANIS, MICHAEL I. JANIS, JONATHAN N. JANIS, Plaintiffs - Appellees,
REVOLUTIONARY ARMED FORCES OF COLUMBIA, (FARC), et al., Defendants, JOSE RICUARTE DIAZ HERRERA, Claimant - Appellant, WACHOVIA BANK, a Division of Wells Fargo Bank, N.A., et al., Garnishees, MERCURIO INTERNATIONAL S.A., et al., Claimants. KEITH STANSELL, MARC GONSALVES, THOMAS HOWES, JUDITH G. JANIS, CHRISTOPHER T. JANIS, MICHAEL I. JANIS, GREER C. JANIS, JONATHAN N. JANIS, Plaintiffs - Appellees,
REVOLUTIONARY ARMED FORCES OF COLUMBIA (FARC), et al., Defendants, CARMEN SIMAN, ARMANDO JAAR, RICARDO JAAR, MOISES SAIEH, CARLOS SAIEH, ABDALA SAIEH, JAQUELINE SAIEH, U.S. Citizen Beneficial Owner of Brunello Ltd. Trust, C. W. SALMAN PARTNERS, SALMAN CORAL WAY PARTNERS, CONFECCIONES LORD S.A., ALM INVESTMENT FLORIDA, INC., VILLAROSA INVESTMENTS FLORIDA, INC., KAREN OVERSEAS, INC., MLA INVESTMENTS, INC., JACARIA FLORIDA, INC., SUNSET & 97TH HOLDINGS, LLC, MARIAM SUTHERLIN, JAMCE INVESTMENTS, LTD., AMELIA SAIEH, Claimants - Appellants, KATHYA SAIEH, JAIME SAIEH, LAURA SAIEH, SANDRA SAIEH, KAREN SAIEH, GRANADA ASSOCIATES, INC., Defendants - Appellants. KEITH STANSELL, MARC GONSALVES, THOMAS HOWES, JUDITH G. JANIS, CHRISTOPHER T. JANIS, et al., Plaintiffs - Appellees,
REVOLUNTIONARY ARMED FORCES OF COLOMBIA (FARC), et al., Defendants, PLAINVIEW FLORIDA II, INC., C. W. SALMAN PARTNERS, SALMAN CORAL WAY PARTNERS, Claimants - Appellants. KEITH STANSELL, MARC GONSALVES, THOMAS HOWES, JUDITH G. JANIS, CHRISTOPHER T. JANIS, et al., Plaintiffs - Appellees,
REVOLUTIONARY ARMED FORCES OF COLOMBIA, (FARC), et al., Defendants, CARMEN SIMAN, ARMANDO JAAR, MOISES SAIEH, CARLOS SAIEH, Claimants - Appellants. KEITH STANSELL, MARC GONSALVES, THOMAS HOWES, JUDITH G. JANIS, CHRISTOPHER T. JANIS, GREER C. JANIS, MICHAEL I. JANIS, JONATHAN JANIS, Plaintiffs - Appellees,
REVOLUTIONARY ARMED FORCES OF COLUMBIA (FARC), et al., Defendants, KATHYA SAIEH, LAURA SAIEH, SANDRA SAIEH, KAREN SAIEH, Defendants - Appellants, CARLOS SAIEH, BRUNELLO, LTD., JACQUELINE SAIEH, U.S. Citizen Beneficial Owner of Brunello Ltd. Trust, Claimants - Appellants. KEITH STANSELL, MARC GONSALVES, THOMAS HOWES, JUDITH G. JANIS, CHRISTOPHER T. JANIS, GREER C. JANIS, MICHAEL I. JANIS, JONATHAN N. JANIS, Plaintiffs - Appellees,
REVOLUTIONARY ARMED FORCES OF COLOMBIA (FARC), et al., Defendants, LUIS SUTHERLIN, Claimant - Appellant
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Appeals from the United States District Court for the Middle District of Florida. D.C. Docket No. 8:09-cv-02308-RAL-MAP, D.C. Docket No. 8:09-cv-02308-RAL-MAP, D.C. Docket No. 8:09-cv-02308-RAL-MAP, D.C. Docket No. 8:09-cv-02308-RAL-MAP, D.C. Docket No. 8:09-cv-02308-RAL-MAP, D.C. Docket No. 8:09-cv-02308-RAL-MAP.
For Keith Stansell, Marc Gonsalves, Thomas Howes, Judith G. Janis, Christopher T. Janis, Plaintiffs - Appellees: Richard B. Rosenthal, Law Office of Richard B. Rosenthal, PA, Miami, FL; Tony Korvick, Newton Patrick Porter, Porter & Korvick, PA, Coral Gables, FL.
For Jonathan N. Janis, Michael Janis, Greer C. Janis, Plaintiffs - Appellees: Newton Patrick Porter, Porter & Korvick, PA, Coral Gables, FL.
For Jose Ricuarte Diaz Herrera, Claimant - Appellant: Joseph S. Rosenbaum, Joseph S. Rosenbaum, PA, Miami, FL; Guy Richard Strafer, G. Richard Strafer, PA, Miami, FL.
Before WILSON, JORDAN and BLACK, Circuit Judges.
WILSON, Circuit Judge
These appeals arise from the collection efforts of victims of a terrorist kidnapping in Colombia. After obtaining a nine-figure default judgment against their captor, they attempted to collect through a series of ex parte garnishments and executions against third parties with purported illicit ties to the captor. The third-party claimants challenge the judgments against their property on both substantive and procedural grounds, including alleged due process violations arising from the ex parte manner in which the district court initially handled the proceedings. We affirm the district court as to all appeals but one: No. 13-12171, concerning Brunello Ltd.
I. Global Discussion
Because common themes run through all appeals, we initially discuss the underlying facts and common issues globally. Later, we will apply our conclusions to the particular circumstances of each appeal and analyze the unique issues in a more individualized manner for each third-party claimant.
A. Underlying Procedural and Factual Background
On February 13, 2003, Keith Stansell, Marc Gonsalves, Thomas Howes, and Thomas Janis were flying over Colombia while performing counter-narcotics reconnaissance. Members of the Revolutionary Armed Forces of Colombia (FARC) shot their plane down and, after the plane's crash landing, captured the group. FARC immediately executed Janis and took the survivors hostage, holding them for over five years. After they were rescued and returned to the United States, Stansell, Gonsalves, and Howes--along with Janis's wife, Judith G. Janis, as personal representative of his estate, and his surviving children, Christopher T. Janis, Greer C. Janis, Michael I. Janis, and Jonathan N. Janis--(collectively, Plaintiffs) filed a complaint against FARC in the United States District Court for the Middle District of Florida under the Antiterrorism Act, 18 U.S.C. § 2333, naming FARC and a number of associated individuals as defendants. After court-directed service of summons by publication, FARC failed to appear, and the district court entered a default judgment in favor of Plaintiffs in the amount of $318,030,000 on June 15, 2010.
Because of the difficulty inherent in the direct execution of a judgment against a terrorist organization, Plaintiffs sought to satisfy their award by seizing the assets of " agenc[ies] or instrumentalit[ies]" of FARC pursuant to Section 201(a) of the Terrorism Risk Insurance Act of 2002, Pub. L. No. 107-297, § 201(a), 116 Stat. 2322, 2337 (TRIA), which reads:
Notwithstanding any other provision of law, and except as provided in subsection (b), in every case in which a person has obtained a judgment against a terrorist party on a claim based upon an act of terrorism, or for which a terrorist party is not immune under section 1605(a)(7) of title 28, United States Code, the blocked assets of that terrorist party (including the blocked assets of any agency or instrumentality of that terrorist party) shall be subject to execution or attachment in aid of execution in order to satisfy such judgment to the extent of any compensatory damages for
which such terrorist party has been adjudged liable.
TRIA § 201(a). The elements a party is required to establish before executing under TRIA § 201 are therefore quite straightforward. The party must first establish that she has obtained a judgment against a terrorist party that is either for a claim based on an act of terrorism or for a claim for which a terrorist party is not immune. Weininger v. Castro, 462 F.Supp.2d 457, 479 (S.D.N.Y. 2006). The party must then show that the assets are blocked as that term is defined in TRIA. Id. Finally, the total amount of the execution cannot exceed the amount of compensatory damages. Id. If the party wishes to execute against the assets of a terrorist party's agency or instrumentality, the party must further establish that the purported agency or instrumentality is actually an agency or instrumentality. Of the preceding elements, only the blocked asset and agency or instrumentality determinations are at issue in any of the appeals here.
TRIA defines " blocked assets" as " any asset seized or frozen by the United States under section 5(b) of the Trading With the Enemy Act [(TWEA)] or under sections 202 and 203 of the International Emergency Economic Powers Act [(IEEPA)]." TRIA § 201(d)(2)(A) (citation omitted). Assets are blocked when the United States Department of the Treasury Office of Foreign Assets Control (OFAC) designates the owner of the assets as a Specially Designated Narcotics Trafficker (SDNT). See 31 C.F.R. § § 594.201, 594.301, 597.201, 597.303. OFAC's blocking power is authorized by TWEA, 12 U.S.C. § 95a, 50 U.S.C. § § 1-14, 16-39, 40-44, and the IEEPA, 50 U.S.C. § § 1701-1706, the blocking authority of which TRIA § 201 includes in its definition of blocked assets. OFAC also has blocking authority under other legislation not mentioned in TRIA § 201, including the Foreign Narcotics Kingpin Designation Act, 21 U.S.C. § § 1901-08 (Kingpin Act). OFAC specifies the jurisdictional basis for any designation it makes, i.e. the statute under which an individual or entity is designated. Thus, the blocking of assets by OFAC does not necessarily bring those assets within the ambit of TRIA execution. See Stansell v. Revolutionary Armed Forces of Colom. (Mercurio), 704 F.3d 910, 915-17 (11th Cir. 2013) (per curiam) (reversing an order permitting TRIA execution of assets that OFAC had blocked pursuant to the Kingpin Act). All the individuals and entities party to these appeals (Claimants) whose property is in jeopardy due to Plaintiffs' TRIA execution had been designated SDNTs by OFAC, rendering their assets blocked. Other than Herrera, no party disputes that the assets in question were blocked at some point for purposes of TRIA execution, though some argue that their eventual de-listing during the pendency of the proceedings should have been given effect.
TRIA itself does not define the term " agency or instrumentality." However,
§ 201 is codified as a note to the Foreign Sovereign Immunities Act, 28 U.S.C. § § 1330, 1602-11 (FSIA). See 28 U.S.C. § 1610 (note). The FSIA defines the term:
An " agency or instrumentality of a foreign state" means any entity--
(1) which is a separate legal person, corporate or otherwise, and
(2) which is an organ of a foreign state or political subdivision thereof, or a majority of whose shares or other ownership interest is owned by a foreign state or political subdivision thereof, and
(3) which is neither a citizen of a State of the United States as defined in section 1332(c) and (e) of this title, nor created under the laws of any third country.
Id. § 1603(b). Claimants here disagree with the district court's standard as well as its factual determinations regarding the agency or instrumentality status of each.
Plaintiffs initiated their collection efforts in each instance ex parte, without any direct notice to Claimants. The district court found that, for purposes of TRIA execution, each Claimant was an agency or instrumentality of FARC and that each asset was blocked. Importantly, each Claimant eventually discovered the proceedings against their property. In each case, the district court sided with Plaintiffs and allowed the collection efforts to proceed (or, where such efforts had been completed, to lie).
Claimants appealed the various orders granting Plaintiffs' motions seeking to collect on their judgment using Claimants' assets and denying the motions filed by Claimants seeking relief. They argue separately a number of issues on appeal, including many that Claimants share in common with one another: (1) that they were denied constitutional and statutory rights to notice and a hearing because they were not served with the writs of garnishment and execution or the motions requesting them; (2) that they were erroneously designated agencies or instrumentalities of FARC by the district court; (3) that their assets were not reachable under TRIA § 201 because they have been removed from OFAC's list of SDNTs; (4) that Plaintiffs did not obtain the licenses required to execute against OFAC-blocked assets; (5) that the judgments must be set aside for fraud; and (6) that on remand, we should assign a different judge to the proceedings.
B. Analysis of the Issues
We now turn to an analysis of the common issues argued on appeal.
1. Constitutional and Statutory Due Process
Claimants contend that they were denied their rights to notice of the execution proceedings and an opportunity to be heard in violation of the Fifth Amendment, Florida law, and the FSIA. Whether a due process violation occurred is reviewed de novo. Ali v. U.S. Att'y Gen., 443 F.3d 804, 808 (11th Cir. 2006) (per curiam). The de novo standard also applies when determining whether constitutional protections extend to foreign nationals. United States v. Emmanuel, 565 F.3d 1324, 1330-32 (11th Cir. 2009) (reviewing de novo whether the Fourth Amendment applied to a foreign search of a foreign national).
Florida law has specific requirements for notice and an opportunity to be heard. See Fla. Stat. § 56.21 (" When levying upon real property, notice of such levy and execution sale and affidavit . . . shall be made to the property owner of record in the same manner as notice is made to any judgment debtor pursuant to this section . . . ." ); Fla. Stat. § 56.16 (outlining procedure for third-party claimants to halt an execution sale); Fla. Stat. § 77.055 (requiring service of garnishee's answer to the writ on " any . . . person disclosed in the garnishee's answer to have any ownership interest in the" asset); Fla. Stat. § 77.07(2) (permitting " any other person having an ownership interest in [garnished] property" to move to dissolve the writ with a motion " stating that any allegation in plaintiff's motion for writ is untrue" ). In a nutshell, Florida law provides certain protections to third parties claiming an interest in property subject to garnishment or execution. Such law is effective in proceedings in federal court, unless, as the district court held here, it is preempted by federal statute. Fed.R.Civ.P. 69(a)(1). We review de novo a district court's determination that federal law preempts state law. Pace v. CSX Transp., Inc., 613 F.3d 1066, 1068 (11th Cir. 2010).
The FSIA also contains a notice requirement. 28 U.S.C. § 1610(c) (requiring notice required under § 1608(e) be provided where property is attached under § 1610(a) or (b)). Whether this notice requirement applies to TRIA execution is a question of law we review de novo. Mercurio, 704 F.3d at 914.
a. Constitutional Due Process
Preliminarily, we address whether, under the Fifth Amendment, Claimants were entitled to due process. The district court and Plaintiffs have at some points maintained that some were not so entitled due to their status as foreign nationals. Where a district court exercises its jurisdiction over property within the United States, however, the owners of that property have due process rights regardless of their location or nationality. See Russian Volunteer Fleet v. United States, 282 U.S. 481, 491-92, 51 S.Ct. 229, 232, 75 L.Ed. 473, 71 Ct.Cl. 785 (1931) (applying the Takings Clause to confiscation of foreign-owned property located within the United States); Helicopteros Nacionales de Colom., S.A. v. Hall, 466 U.S. 408, 413-19, 104 S.Ct. 1868, 1872-74, 80 L.Ed.2d 404 (1984) (applying due process protection to a Colombian corporation);  Schiffahartsgesellschaft Leonhardt & Co. v. A. Bottacchi S.A. de Navegacion, 732 F.2d 1543, 1545-49 (11th Cir. 1984) (analyzing
due process protections vis-à-vis a foreign entity whose property came under the court's jurisdiction); Nat'l Council of Resistance of Iran v. Dep't of State, 251 F.3d 192, 204, 346 U.S. App. D.C. 131 (D.C. Cir. 2001) (" Russian Volunteer Fleet makes clear that a foreign organization that acquires or holds property in this country may invoke the protections of the Constitution when that property is placed in jeopardy by government intervention." (citation omitted)). Therefore, Claimants were entitled to the Fifth Amendment's guarantee of due process.
Now, we consider what due process requires. As Plaintiffs point out in their briefs, post-judgment motions and writs typically need not be served on defendants, including when collection is pursued under the FSIA. See Peterson v. Islamic Republic of Iran, 627 F.3d 1117, 1130 (9th Cir. 2010). Courts have held that this principle extends to agencies or instrumentalities of terrorist judgment debtors under the FSIA. See, e.g., Estate of Heiser v. Islamic Republic of Iran, 807 F.Supp.2d 9, 23 (D.D.C. 2011) (" Congress did not intent [sic] to require service of garnishment writs on agencies or instrumentalities of foreign states responsible for acts of state-sponsored terrorism . . . ." ). To the extent Estate of Heiser holds that alleged agencies or instrumentalities which dispute that classification are not entitled to notice of execution or garnishment proceedings against their assets, we disagree.
TRIA execution requires two separate determinations regarding the property being executed: (i) that the asset is blocked, and (ii) that the owner of the asset is an agency or instrumentality of the judgment debtor. TRIA § 201(a). While the first can be definitively established by the fact that OFAC has taken action against the alleged agency or instrumentality under TWEA or the IEEPA, the second is a separate determination in addition to blockage not dispositively decided by OFAC designation. Furthermore, because an agency or instrumentality determination carries drastic results--the attachment and execution of property--it undeniably implicates due process concerns. United States v. Bissell, 866 F.2d 1343, 1352 (11th Cir. 1989) (" [Due process] is implicated when, as here, persons are deprived of their possessory interests in property." ). It follows that parties whose assets are under threat of execution pursuant to TRIA § 201 are entitled to notice and an opportunity to be heard in order to rebut the allegations and preserve their possessory interest in blocked assets. See Dusenbery v. United States, 534 U.S. 161, 167, 122 S.Ct. 694, 699, 151 L.Ed.2d 597 (2002) (" [I]ndividuals whose property interests are at stake are entitled to notice and an opportunity to be heard." (internal quotation marks omitted)).
Plaintiffs respond by emphasizing that this court and others have repeatedly held that due process does not require service of post-judgment motions. Typically, however, such motions are directed at the judgment debtor, see Brown v. Liberty Loan Corp. of Duval, 539 F.2d 1355, 1357 (5th Cir. 1976), not at third parties such as Claimants. The difference--one that the district court did not appropriately consider--is crucial. Where the owner of the asset being garnished is the judgment debtor, " notice upon commencement of a suit is adequate to give a judgment debtor advance warning of later proceedings undertaken to satisfy a judgment."
Id. at 1364. That same type of notice is not sufficient where the claimant is a third party, who cannot be expected to ...