Berkowitz v. Republic of Costa Rica

288 F. Supp. 3d 166
CourtCourt of Appeals for the D.C. Circuit
DecidedJanuary 20, 2018
DocketCivil Action No. 17–148
StatusPublished
Cited by2 cases

This text of 288 F. Supp. 3d 166 (Berkowitz v. Republic of Costa Rica) is published on Counsel Stack Legal Research, covering Court of Appeals for the D.C. Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Berkowitz v. Republic of Costa Rica, 288 F. Supp. 3d 166 (D.C. Cir. 2018).

Opinion

RICHARD J. LEON, United States District Judge

Petitioners, Brett Berkowitz and his sons, Trevor Berkowitz and Aaron Berkowitz (collectively referred to as "the Berkowitz claimants" or "petitioners"), seek vacatur or annulment of an interim award that was issued during international arbitration proceedings they filed against respondent, the Republic of Costa Rica ("Costa Rica" or "respondent"). In the underlying arbitration ("the Arbitration"), petitioners alleged that Costa Rica's decision to expropriate their beachside properties-and thus deprive them of their residential real estate property investments-violated the Dominican Republic-Central America Free Trade Agreement ("CAFTA"),

After a five-day hearing, the Arbitration Tribunal ("the Tribunal") issued an interim award ("the Interim Award" or "the Award") on jurisdiction, finding that it: (1) lacked jurisdiction to hear claims with regard to one of petitioners' properties; (2) had jurisdiction to hear claims with respect to two of petitioners' properties; (3) and needed more briefing on whether it had jurisdiction to hear claims regarding petitioners' two remaining properties. The Berkowitz claimants then filed a Petition to Vacate the Interim Award in this Court, pursuant to Section 10 of the Federal Arbitration Act ("FAA"), 9 U.S.C. § 10, on the ground that the Tribunal exceeded its authority in issuing the Award. While their Petition was pending in this Court, the Berkowitz claimants voluntarily withdrew their claims before the Tribunal.

The Berkowitz claimants' Petition is now fully briefed and ripe for my review. Upon consideration of the parties' submissions and the entire record herein, I find that the Berkowitz claimants' Petition must be DENIED. This case accordingly will be DISMISSED with prejudice.

BACKGROUND

Before delving into the dispute at issue in the Arbitration, I must provide a brief background on the land disputes that *168formed the basis of petitioners' claims against Costa Rica.

A. The Marine Park

In the early 1990s, the government of Costa Rica became increasingly concerned that tourist development near the country's beaches would seriously affect the nesting of leatherback turtles in that area. See Pet. to Vacate Arbitration Award Ex. K ("Interim Award") [Dkt. # 1-11] ¶ 33. To reduce the impact of tourism on the leatherback turtles, Costa Rica decided to establish a marine park in order to protect the turtles, as well as other species and natural resources. Id. On July 9,1991, the Ministry of Natural Resources, Energy and Mines accordingly issued an executive decree ("the 1991 Decree"), declaring the government's intent to establish a park to be known as Parque National Marino Las Baulas de Guanacaste ("the Park"), which translates to National Leatherback Turtle Marine Park of Guanacaste. Id. at ¶¶ 33, 60. The 1991 Decree stipulated the exact boundaries of the park, and as relevant here, called for "a strip of land of 75 meters from the public zone," which consists of the first 50 meters of land running inland from the mean high tide line. Id. at ¶¶ 33, 34. This decree essentially established a marine park that extended 125 meters inland from the high tide mark. Id. at ¶ 33.

Four years later, on July 10, 1995, the Costa Rican Congress passed Law No. 7524 ("the Park Law"), which authorized the state to acquire, either through direct purchase or expropriation, any private properties or portions thereof that are located within the boundaries of the Park. See id. at ¶ 36. Importantly, however, the Park Law established the eastern boundary of the Park at 125 meters west of the mean high tide mark, rather than 125 meters east of the mean high tide mark, as contemplated by the 1991 Decree. Id. at ¶¶ 36-37. In essence, the Park law created an offshore marine park. Id. The conflict between the 1991 Decree's contemplated inland marine park and the Park Law's offshore park generated uncertainty regarding the boundaries of the Park. Id. at 37.

B. The Berkowitz Acquisitions

In 2003, Brett Berkowitz began to purchase land along the Pacific coast of Costa Rica, hoping to build luxury homes on that land in the future. See Pet. to Vacate Arbitration Award, Ex. D. ("Notice of Arbitration") [Dkt. # 1-4] ¶ 43; Interim Award ¶ 60. Before purchasing the land, Brett Berkowitz alleges that he met personally with the Minister of the Environment and Energy, Carlos Manuel Rodriquez Echandi ("Echandi"), and received assurances that he would be permitted to develop this real estate, even though large portions of it fell within the boundary set by the 1991 Decree-but not within the boundary set by the Park Law. Interim Award ¶ 60. According to petitioners, Echandi stated "that the Government did not intend to expropriate the land in question, they did not have the funds for it, and the Government and his Ministry did not intend to prevent development of the private property bordering the public zone ...." Id. Brett Berkowitz ultimately acquired five of the lots at issue in the Arbitration: Lots B1,1 B3, B5, B6, and B82 ("the Berkowitz Lots").3 See id. ¶ 254, Table 38.

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288 F. Supp. 3d 166, Counsel Stack Legal Research, https://law.counselstack.com/opinion/berkowitz-v-republic-of-costa-rica-cadc-2018.