UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA
_________________________________________ ) In Re: ENFORCEMENT OF A RESTRAINING ) ORDER BY THE NINTH FEDERAL COURT, ) FIFTH JUDICIAL SUBSECTION IN CAMPINAS, ) SP, THE FEDERATIVE REPUBLIC OF BRAZIL, ) TO RESTRAIN: ) ) Misc. Action No. 1:15-783-RBW ) AN APPROXIMATELY 836-POUND ) EMERALD KNOWN AS THE BAHIA ) EMERALD LOCATED IN LOS ANGELES, ) CALIFORNIA ) _________________________________________ )
MEMORANDUM OPINION
This case concerns a large emerald known as the Bahia Emerald (the “Emerald”), that
weighs approximately 836 pounds and is the subject of a final forfeiture judgment obtained by
the Federative Republic of Brazil (the “Brazilian Forfeiture Judgment”) in a Brazilian court as
part of the criminal prosecution of two individuals who were convicted of “smuggling, receiving
stolen property[,] and fraudulent misrepresentation in violation of Brazilian law.” See United
States’ Application to Enforce a Foreign Forfeiture Judgment Pursuant to 28 U.S.C. § 2467(c)(1)
and (d)(1) Against Bahia Emerald and for Entry of an Order of Forfeiture (“Gov’t Appl.” or “the
application”) at 2, ECF No. 56. Currently pending before the Court is the United States’
application to register and enforce the Brazilian court’s Final Forfeiture Judgment. See id. at 1–
2. Upon careful consideration of the parties’ submissions, 1 the Court concludes for the following
1 In addition to the filings already identified, the Court also considered the following submissions in rendering its decision: (1) the Intervenors’ Opposition to [the] United States’ Application to Enforce a Foreign Forfeiture Judgment Pursuant to 28 U.S.C. § 2467(c)(1) and (d)(1) Against [the] Bahia Emerald, (“Intervenors’ Opposition” or “Intervenors’ Opp’n”), ECF No. 57, and (2) the United States’ Reply to Intervenors’ Opposition, (“Government Reply” or “Gov’t Reply”), ECF No. 59. reasons that it must vacate the stay currently imposed in this case and grant the government’s
application.
I. BACKGROUND
According to Brazilian authorities, “the Bahia Emerald is one of the largest emeralds—if
not the largest emerald—ever to have been discovered.” Sixteenth Joint Status Report, Exhibit
(“Ex.”) 1 (Letter to the Court from the Government of Brazil (“Letter to the Court”)) at 1, ECF
No. 63-1. Undoubtedly, Brazilian authorities appreciate that “the Emerald [ ] has substantial
monetary value, [but] its value to Brazil cannot be quantified: it is a ‘national treasure’ that forms
a critical part of Brazil’s natural heritage and cultural patrimony.” Id., Ex. 1 (Letter to the Court)
at 1 (footnote omitted).
Understanding the significance of the Emerald, on April 4, 2022, the United States (the
“government”) filed an application to enforce the Brazilian Forfeiture Judgment pursuant to 28
U.S.C. § 2467, seeking to return the gem to Brazil. See Gov’t Appl. at 2. In late 2011, the
United States Immigration and Customs Enforcement “informed the Brazilian Ministry of Justice
that the Bahia Emerald may have been illegally taken from Brazil[,]” which led the “Brazilian
authorities to open a criminal investigation.” Id., Ex. 2 (Affidavit of Brazilian Prosecutor
Fernando Filgueiras de Araujo (“de Araujo Aff.”)) 2 ¶ 15, ECF No. 56-2. Since then, the
Emerald has been the subject of more than eight years of ongoing litigation in this Court,
criminal proceedings that resulted in convictions in Brazil, and a separate civil action in
California state court.
2 Fernando Filgueiras de Araujo is “an [a]ttorney in the Foreign Disputes Unit of the Department of International Affairs[]” in the Brazilian Attorney General’s Office. Gov’t Appl. Ex. 2 (de Araujo Aff.) ¶ 1.
2 A. The United States’ Application to Enforce and Register a Foreign Restraining Order Pursuant to 28 U.S.C. § 2467
In May 2015, a Brazilian court issued an order to restrain the Emerald pursuant to the
criminal prosecution of two Brazilian residents for “knowingly receiving the stolen Bahia
Emerald and illegally smuggling it into the United States[.]” See Expedited Application of the
United States to Enforce and Register Foreign Restraining Order Pursuant to 28 U.S.C.
§ 2467(d)(3)(A) and 18 U.S.C. § 983(j)(1)(A) (“Gov’t Mot. to Enforce Restraining Order”) at 1,
ECF No. 1. Brazil sought assistance from the United States to “register and enforce the
[r]estraining [o]rder so that the Bahia Emerald [would] be available for forfeiture[.]” See id.
at 7. In June 2015, in response to Brazil’s request and pursuant to 28 U.S.C. § 2467 and a treaty
between the United States and Brazil, the United States filed an application that was originally
assigned to another member of this Court to “issue an order restraining” the Emerald. See id.
at 4–5.
When the United States filed its application for the restraining order, the Emerald was
simultaneously “the subject of a pending California state court matter[,]” id. at 2, which involved
“a dispute between numerous American citizens and residents about ownership over the Bahia
Emerald under state law[,]” id. The United States requested “expedited treatment of [its]
application,” stating that “there [was] a risk the [ ] Emerald could become [a] fugitive” because it
was also the subject of “parallel California state court proceedings[.]” Id. at 1–2. On June 25,
2015, another member of this Court issued an order granting the United States’ application and
ordered that the “Los Angeles County Sheriff’s Office [ ] maintain custody of the Bahia
Emerald . . . until the Brazilian criminal cases are concluded[,] and any forfeiture judgments
obtained therein have been presented for enforcement to this Court[.]” Restraining Order at 3,
ECF No. 2.
3 B. The Morrison Parties’ Intervention
In June 2015, Kit Morrison, Todd Armstrong, Jerry Ferrara, Market Link, Inc., and FM
Holdings, Inc. (collectively, the “Morrison Parties” or “Intervenors”), filed a motion to intervene,
asserting that they had “an interest subject to the [United States’] Application and [would] suffer
substantial harm” as a result of the Brazilian court’s restraining order. See Motion and
Incorporated Memorandum of Law of Kit Morrison, Todd Armstrong, Jerry Ferrara, Market
Link, Inc., and FM Holdings, Inc. to Intervene (“Mot. to Intervene”) at 1, ECF No. 4. The
Morrison Parties asserted that, as a result of the “extended civil dispute before the Superior Court
of the State of California,” id. at 2, they were the “bona fide owners” of the Emerald because
they purchased it “lawfully and in good faith[,]” id. at 5.
Although another member of this Court granted the motion to intervene, see Minute
(“Min.”) Order (Apr. 13, 2016), it limited the scope of intervention to “claims and defenses
permitted by 28 U.S.C. § 2467.” Public Opinion at 2, ECF No. 28 (redacted); see Sealed
Opinion at 2, ECF No. 20. Furthermore, the Court stated that the “[California] Superior Court
made it very clear that it was not ruling on Brazil’s claim to ownership of the Emerald, but only
sorting out superior title among the various U.S. claimants.” Public Opinion at 6. Thus, the
Court declined to “adjudicate claims regarding the ownership” of the Emerald, finding that such
claims were “outside the purview of [the] [Mutual Legal Assistance in Criminal Matters Treaty
or] [(‘]MLAT[’)] proceeding.” Id. at 8.
The Intervenors were given an initial deadline of September 9, 2016, to “file a motion for
reconsideration” if they intended to challenge the Court’s order limiting the scope of their
intervention. See Min. Order (May 25, 2016). In response, both the government and the
Intervenors filed a joint motion for a continuance of the deadline to file a motion for
4 reconsideration and requested access to the Emerald for an appraisal to “promote settlement and
facilitate judicial economy.” See Joint Motion for a Continuance of the Deadline to File a
Motion for Reconsideration and Request for Access to the Bahia Emerald for an Appraisal at 1,
ECF No. 36. The Court granted the request for the continuance and granted in part and denied in
part the motion for access to the Emerald. See Order at 1 (Nov. 28, 2016), ECF No. 37 (ordering
that, “upon consent from the [United States] Department of Justice[,] a representative from [the]
Interven[o]rs may be present during the viewing, inspection, and appraisal of the Bahia
Emerald[]”).
In April 2017, the Intervenors filed another unopposed motion to continue, stating that
“settlement efforts have been ongoing,” Unopposed Motion to Continue the Deadline to File a
Motion for Reconsideration at 2, ECF No. 38, which another member of this Court granted, see
Min. Order (Apr. 10, 2017). In August 2017, the Intervenors filed yet another unopposed motion
to continue, stating that “[w]hile the details of [the] settlement have not been finalized, the
parties remain hopeful for settlement[.]” Unopposed Motion to Continue the Deadline to File a
Motion for Reconsideration at 2, ECF No. 39. The Court then issued an order in response to this
motion, see Min. Order (Aug. 1, 2017), stating in part that “[the] Intervenors misperceive the
nature of this action . . . [, as] [t]he question of the ownership of the Bahia Emerald is not at
issue. Therefore, there is no purpose to extending any further [the] Intervenors’ efforts to resolve
that underlying issue[,]” id. (ordering the Intervenors to file a motion for reconsideration on or
before September 15, 2017). In response to the Court’s new imposed deadline, the parties
submitted a joint motion to stay the case, or in the alternative, to dismiss the Intervenors’ motion
without prejudice. See Joint Motion to Stay the Case, or in the Alternative to Dismiss the
Intervenors Without Prejudice (“Joint Mot. to Stay”) at 1, ECF No. 40. Specifically, the parties
5 made this alternative request because the “Intervenors [were] exploring how to intervene or
otherwise participate in the Brazilian proceedings[.]” Id. at 2. The Court granted the motion to
stay, denied the Intervenors’ motion to dismiss, and ordered the parties to submit “a joint status
report every 120 days to inform the [C]ourt of the progress of the related proceedings.” Min.
Order (Sept. 26, 2017).
C. The Litigation in Brazil
In September 2017, two defendants, Elson Alves Ribeiro (“Riberio”) and Rui Saraiva
Filho (“Filho”), were convicted of receiving stolen property, smuggling, and fraudulent
misrepresentation by the Ninth Federal Criminal Court in Campinas, Brazil, see Gov’t Appl. at 4,
and as a result of the conviction, the Brazilian court ordered the forfeiture of the Bahia Emerald,
see id. From October 2017 to January 2020, the Brazilian defendants pursued, and ultimately
exhausted, all avenues of appeal. See id. at 5. Once these defendants had exhausted all appeals
and “the criminal sentence[s] became final[,]” id., “the order of forfeiture and repatriation of the
[Bahia] Emerald became final[,]” id.; see id., Ex. 2 (de Araujo Aff.) ¶ 41. However, before the
judgment became final, “third parties were provided notice and an opportunity to file a claim
against the [ ] Emerald.” Id. at 6. And, to ensure that the Morrison Parties received notice of the
judgment, “the Brazilian government served the notice on January 12, 2018, on Morrison
[Parties’] U.S. counsel[—at that time, Mayer Brown LLP—]after it agreed to accept service in
this manner.” Id.; see id., Ex. 2 (de Araujo Aff.) ¶ 34.
The Morrison Parties “filed a petition with the Federal Regional Court of the 3rd Region
to obtain access and to extract copies of the case files.” Id., Ex. 2 (de Araujo Aff.) ¶ 35. That
court granted the request, and the Morrison Parties “took the case file out of the court, reviewed
it at [their] legal counsel’s office . . . and then returned it[,]” but did not ultimately move to
6 “participate[] in the [Brazilian] criminal proceeding[s.]” Id. Ex. 2 (de Araujo Aff.) ¶ 35. Instead,
in October 2019, the Morrison Parties “filed a petition for a writ of mandamus in the Federal
Regional Court of the 3rd Region seeking to set aside the [f]orfeiture [j]udgment.” Id., Ex. 2 (de
Araujo Aff.) ¶ 43. In his affidavit, Prosecutor de Araujo represents that “a petition for a writ of
mandamus does not suspend or impair the judgment, order, or action at which it is directed[,]”
and therefore has no impact on the final forfeiture judgment. Id., Ex. 2 (de Araujo Aff.) ¶ 44; see
also id. at 15 (stating that “the forfeiture [judgement] is final despite a collateral attack[]”).
Prosecutor de Araujo indicated that under Brazilian law, “third parties [cannot] assert claims
against assets seized in a criminal action after the conclusion of the relevant criminal proceedings
(following the principle of res judicata).” Id., Ex. 2 (de Araujo Aff.) ¶ 28.
D. Procedural Background
1. The United States’ Application to Enforce the Brazilian Forfeiture Judgement
The United States requests that the Court “[enforce] and [register] [ ] a September 5,
2017 Final Forfeiture Judgment issued by the Ninth Federal Criminal Court in Campinas, Brazil”
and enter “a final order of forfeiture against the Bahia Emerald in favor of the United States[,]”
pursuant to 28 U.S.C. § 2467(c)(1) and (d)(1). 3 Id. at 2. The United States represents that its
application is based on “a formal request by the Federative Republic of Brazil made under the
[MLAT] treaty[,]” and the request “has been certified by the Attorney General’s designee, the
Assistant Attorney General for the Criminal Division of the United States Department of
3 28 U.S.C. § 2467 authorizes United States district courts to enforce a “foreign forfeiture or confiscation judgement[,]” 28 U.S.C. § 2467 (c)(1), and “enter such orders as may be necessary to enforce the judgement[,]” id. § 2467 (d)(1).
7 Justice[.]” Id. at 1. 4 Along with its application, the United States included the original Brazilian
Forfeiture Judgment, as well as a certified translation of the Forfeiture Judgment. See id., Ex. 1
(“Brazil Judgment”) at 1, ECF No. 56-1. The United States represents that the Brazilian
Forfeiture Judgment became final and unappealable on January 28, 2020, after the defendants
had exhausted all appeals. See id. at 2; id., Ex. 1 (Brazil Judgment) at 59–61. The application
also includes the affidavit of Brazilian Prosecutor Filgueiras de Araujo, see Gov’t Appl., Ex. 2
(de Araujo Aff.) at 1, which sets forth “the facts and history of [the Brazilian proceedings,]” id.,
Ex. 2 (de Araujo Aff.) ¶ 2, and attests that there are no ongoing proceedings that could “suspend
or impair the Forfeiture Judgment, which is final and not subject to appeal[,]” id., Ex. 2 (de
Araujo Aff.) ¶ 53. The United States represents that because “the Brazilian Forfeiture Judgment
was certified by the [Brazilian] Attorney General,” and because none of the exceptions in
§ 2467(d)(1) exist, the Court must grant its application. Id. at 13. The United States further
represents that if the Court grants its application, that would afford “the Attorney General of the
United States . . . the discretion to repatriate the Bahia Emerald to the Government of Brazil.”
Id. at 16.
2. The Intervenors’ Opposition to the United States’ Application
On April 18, 2022, the Intervenors, see infra section I.B (explaining the history of the
Morrison Parties’ intervention in this action), filed a memorandum in opposition to the United
States’ application, and requested that the Court “continue to stay this action and deny the
[a]pplication.” See Intervenors’ Opp’n at 1. The Intervenors provide three main arguments in
support of their position: (1) “the United States has not moved to lift the stay of these
4 See Treaty Between the Government of the United States of America and the Government of the Federative Republic of Brazil on Mutual Legal Assistance in Criminal Matters, Braz.-U.S., Oct. 14, 1997, S. Treaty Doc. No. 105-42 (1998) (“the MLAT” or “the Treaty”).
8 proceedings, and, in any event, good cause does not exist to lift the stay[;]” (2) “[b]ecause
settlement discussions are still ongoing” and the United States previously took the position that
the case should remain stayed “pending the outcome of settlement negotiations between [the]
Intervenors and the Government of Brazil[,]” “by the United States’ own logic, this action should
remain stayed[;]” and (3) the “California Superior Court [ ] issued a final judgment awarding
legal and equitable title in the Bahia [ ] Emerald to [the] Intervenors[,]” and if the United States
returns the Emerald to Brazil, it would be “abdicat[ing] its responsibility to protect third party
interests in the item to be transferred.” Id. at 1–2 (internal quotation marks omitted).
Throughout their memorandum, the Intervenors reference the California Superior Court
judgment, which concluded that the Morrison Parties were “bona fide good-faith purchasers of
the Bahia Emerald[,]” id. at 6, as support for their argument that they “have an interest––legal
title under U.S. law––in the Bahia Emerald[,]” id. at 7. The Intervenors further represent that
“there is no justification to lift the stay . . . because settlement discussions continue between the
Intervenors and the Government of Brazil[,]” id. at 5, and “as recently as three months ago[ at
that time],” on January 21, 2022, the United States “maintained the position that the Court should
continue to stay [this] case pending settlement discussions[,]” id. at 4. 5
5 From 2018 to 2021, the parties submitted joint status reports requesting that the “case continue to be stayed” and that the Emerald “remain in the custody of the Los Angeles County Sheriff’s Department[.]” Twelfth Joint Status Report (Oct. 1, 2021) at 1, 5, ECF No. 54; see Third Joint Status Report (Oct. 10, 2018) at 5, ECF No. 45 (stating that both the Intervenors and the United States “agree that this case should remain stayed . . . pending the outcome of the Brazilian defendants’ appeals and the Intervenors’ efforts to demonstrate that Brazil’s legal position as a matter of law and fact falls short.”); Seventh Joint Status Report (Feb. 7, 2020) at 1–4, ECF No. 49 (requesting that the case “continue to be stayed and that the restraining order continue[] to remain in place[,]” and stating that “the Brazilian trial court’s forfeiture order . . . is final and non-appealable,” and Brazilian authorities were in the process of preparing an MLAT request package to the Department of Justice “to enforce the final and non-appealable forfeiture judgment to forfeit and then repatriate the Bahia Emerald back to Brazil”).
9 3. The United States’ Reply to the Intervenors’ Opposition
On May 9, 2022, the United States filed its reply to the Intervenors’ Opposition, stating
that “none of [the Intervenors’ reasons to delay entry of the forfeiture order] [are] legally
sufficient to prevent enforcement[.]” Gov’t Reply at 1. The United States further represents
that: (1) it has “no obligation to agree to further stays for no reason[,]” and “the grounds on
which the United States agreed with the Intervenors to stay this action have long lapsed[;]” (2)
“the Brazilian government says there are no ongoing settlement discussions[;]” and (3) the
Morrison Parties’ reference to “Article 14 of the Treaty” is “inapplicable to the present
circumstances[]” because it covers “conditions on the transfer of evidence[,]” not “conditions on
the transfer of forfeited property[.]” Id. at 1–2.
The United States represents that it previously supported the continued stay of this case
so that the Intervenors could assert their claims regarding the Emerald “under Brazilian law in
the Brazilian criminal proceedings and/or otherwise seek alternative resolutions with the
Government of Brazil.” See id. at 2. It further contends that “the need and justification for
continuing stays of the instant action have lapsed[]” because “the Brazilian court has now
entered a final forfeiture order.” Id. at 3. To support its position that settlement discussions have
ended, the government included a subsequent affidavit from Brazilian Prosecutor de Araujo to
“[explain] the history of the alleged settlement discussions and confirm[] that there are no
settlement discussions in progress[.]” Id. at 3; see id., Ex. 1 (de Araujo Affidavit (“Reply Aff.”))
¶¶ 2–3, ECF No. 59-1 (“Intervenors’ [o]pposition repeatedly asserts that settlement discussions
are ongoing . . . [, but t]hose assertions are incorrect[,]” and “[s]ince the entry of the forfeiture
order, there have been no meaningful settlement discussions[.]”). The United States also
maintains that, under 28 U.S.C. § 2467, “there are limited grounds for a person to assert a
property interest in property subject to forfeiture abroad to challenge such an enforcement action
10 filed by the United States pursuant to a treaty request[,]” and any claim to the property as a bona
fide purchaser should have been “asserted in and reviewed by the Brazilian court that heard the
related criminal case.” Gov’t Reply at 5.
Finally, in a joint status report filed on May 30, 2023, the parties represented that there is
“no dispute between the U.S. Government and the Intervenors that the criminal litigation in
Brazil is over after the miners have exhausted all appeals[,]” although the Intervenors “remain
committed to pursuing options to resolve the case[,]” including “a possible civil action in Brazil
regarding [the p]laintiffs’ rights as bona fide good[-]faith purchasers.” See Sixteenth Joint Status
Report (May 30, 2023) at 2, ECF No. 63. The joint status report included a letter to the Court
from the Brazilian “National Solicitor’s Office for [International] Affairs[,]” representing that
Brazil “has not been engaged in––and has no wish to engage in––settlement discussions[.]” Id.,
Ex. 1 (Letter to the Court) at 2.
II. STANDARD OF REVIEW
28 U.S.C. § 2467 “outlines a four-step process for enforcing a foreign forfeiture judgment
in a U[nited ]S[tates] court.” In re One Prinz Yacht Named Eclipse, No. 12-mc-162 (RCL), 2022
WL 4119773, at *3 (D.D.C. Sept. 9, 2022). First, “[a] foreign nation seeking to have a
forfeiture . . . judgment . . . enforced by a district court . . . shall [ ] submit a request to the
Attorney General or [his or her] designee[.]” 28 U.S.C. § 2467(b)(1). Second, “the Attorney
General [or his or her designee] . . . shall determine whether . . . to certify the request[.]” Id.
§ 2467(b)(2).
In making this determination, the Attorney General is required to consider, inter alia, (1) “a summary of the facts of the case and a description of the proceedings that resulted in the forfeiture or confiscation judgment;” (2) a “certified copy of the forfeiture or confiscation judgment;” and (3) “an affidavit or sworn declaration establishing that the foreign nation took steps, in accordance with the principles of due process, to give notice of the proceedings to all persons in
11 sufficient time to enable such persons to defend against the charges and that the judgment rendered is in force and is not subject to appeal[.]”
In re $6,871,042.36, No. 14-mc-1222 (RBW), 2021 WL 1208942, at *4 (Mar. 31, 2021)
(alteration in original) (quoting § 2647(b)(1)(A)–(D)). The Attorney General’s decision to either
certify or deny the foreign nation’s request “shall be final and not subject to [ ] judicial
review[.]” 28 U.S.C. § 2467(b)(2). Third, “the United States may file an application on behalf
of a foreign nation . . . to enforce the foreign forfeiture . . . judgment . . . as if the judgement had
been entered by a court in the United States.” Id. § 2467(c)(1).
Finally, a court “shall enter such orders as may be necessary to enforce the judgment on
behalf of the foreign nation[,]” id. § 2467(d)(1), unless the court finds that “certain jurisdictional,
procedural, or substantiative defects are present,” In re $6,871,042.36, 2021 WL 1208942, at *4
(citing 28 U.S.C. § 2467(d)(1)). Under § 2467, “the court must grant the application unless one
of [ ] five narrow exceptions applies.” In re One Prinz Yacht, 2022 WL 4119773, at *4. Those
exceptions are: (A) “the judgment was rendered under a system that provides tribunals or
procedures incompatible with the requirements of due process of law;” (B) “the foreign court
lacked personal jurisdiction over the defendant;” (C) “the foreign court lacked jurisdiction over
the subject matter;” (D) “the foreign nation did not take steps, in accordance with the principles
of due process, to give notice of the proceedings to a person with an interest in the property of
the proceedings in sufficient time to enable him or her to defend” that interest or; (E) “the
judgment was obtained by fraud.” 28 U.S.C. § 2467(d)(1)(A)–(E) (footnote omitted). In
assessing the applicability of these exceptions, a district court “shall be bound by the findings of
fact to the extent that they are stated in the foreign forfeiture or confiscation judgment.” Id.
§ 2467(e)(1).
12 III. ANALYSIS
To reiterate, currently pending before the Court is the United States’ application to
register and enforce the Brazilian Court’s Final Forfeiture Judgment. See Gov’t Appl. at 1–2. In
its application, the United States requests that the Court enforce the Brazilian Forfeiture
Judgment by “enter[ing] a final order of forfeiture in favor of the United States against the Bahia
Emerald[,]” so that the United States “will have the discretion to repatriate the Bahia [ ] Emerald
to the Government of Brazil.” Id. at 16–17. As noted earlier, the Intervenors raise three main
arguments as to why this Court should not enforce the Brazilian Forfeiture Judgment: (1) “the
United States has not moved to lift the stay of these proceedings, and, in any event, good cause
does not exist to lift the stay[;]” (2) “[b]ecause settlement discussions are still ongoing[]” and the
government previously took the position that the case should remain stayed “pending the
outcome of settlement negotiations[,]” “by the [government’s] own logic, this action should
remain stayed[;]” and (3) the “California Superior Court [ ] issued a final judgment awarding
legal and equitable title in the Bahia Emerald to [the] Intervenors[,]” and if the United States
returned the Emerald to Brazil, it would be “abdicat[ing] its responsibility to ‘protect third party
interests in the item to be transferred.’” Intervenors’ Opp’n at 1–2.
The Court will first consider whether the government’s application satisfies the
requirements of § 2467 and whether the stay should be lifted. Because the Court concludes that
lifting the stay is warranted, it will then address whether any of the Intervenors’ arguments fall
within any of the statutory exceptions of § 2467. See 28 U.S.C. § 2467(d)(1)(A)–(E).
A. Whether the Requirements of § 2467 Are Satisfied
The United States requests that the Court “enforce and register the Brazilian [ ] Forfeiture
Judgment and enter a final order of forfeiture in favor of the United States against the Bahia
13 Emerald” so that it may repatriate the Emerald to Brazil. See Gov’t Appl. at 16–17. For the
following reasons, the Court concludes that the requirements of § 2467 have been satisfied and
thus, the Court must grant the government’s application unless any of the exceptions apply.
Pursuant to § 2467, “[a] foreign nation seeking to have a forfeiture . . . judgment . . .
enforced by a district court . . . shall [ ] submit a request to the Attorney General or [his or her]
designee[,]” 28 U.S.C. § 2467(b)(1), and “the Attorney General [or his or her designee] shall
determine whether . . . to certify the request,” id. § 2467(b)(2). The decision by the Attorney
General is not subject to judicial review. See id. § 2467(b)(2). Thus, if the Attorney General
“decided to certify the request[,]” and “[t]he government filed an application with [the] Court to
enter an order to enforce” it, then the “Court must enforce the [Final Forfeiture Judgment] . . .
unless a specific statutory exception applies.” In re One Prinz Yacht, 2022 WL 4119773, at *4.
In other words, if “none of § 2467(d)(1)’s limitations are present[,]” and “every requirement in
§ 2467 has been satisfied,” then “the Court must [ ] enforce the Brazilian Forfeiture Judgment[.]”
In re $6,871,042.36, 2021 WL 1208942, at *5–6.
Here, Brazil submitted the requisite request to the Attorney General of the United States
to enforce its Final Forfeiture Judgment. See Gov’t Appl., Ex. 2 (de Araujo Aff.) ¶ 1. After the
Attorney General’s designee, acting on behalf of the Attorney General, 6 reviewed Brazil’s
request, the Attorney General’s designee found that it was “in the interest of justice to certify
[Brazil’s] request . . . for enforcement of [the] final forfeiture judgment issued by the Brazilian
Ninth Federal Criminal Branch of Campinas, SP to forfeit . . . the Bahia Emerald.” Id., Ex. 1
(Brazil Judgment) at 1; see 28 U.S.C. § 2467(b)(2) (“the Attorney General [or his or her
designee] shall determine whether . . . to certify the request[]”). Consistent with the statute, the
6 The record reflects that the Attorney General delegated his authority to the former Assistant Attorney General for the Criminal Division, Kenneth A. Polite, Jr. See id., Ex. 1 (Brazil Judgment) at 1.
14 United States “filed an application with this Court to enter an order to enforce the [Brazilian]
final forfeiture [judgment,]” In re One Prinz Yacht, 2022 WL 4119773, at *4, on April 4, 2022,
see Gov’t Appl. at 1; 28 U.S.C. § 2467(c)(1). Therefore, because “the statutory requirements for
an entry of final forfeiture[,]” In re One Prinz Yacht, 2022 WL 4119773, at *7, are satisfied, the
Court “must enforce the [Brazilian] final forfeiture [judgment and] order[] unless a specific
statutory exception applies[,]” id. at *4.
B. Whether Any of the § 2467 Exceptions Apply
Next, the Court assesses the applicability of any of the five exceptions of § 2467(d)(1).
See 28 U.S.C. § 2467(d)(1)(A)–(E). If any “jurisdictional, procedural, or substantiative defects
are present,” In re $6,871,042.36, 2021 WL 1208942, at *4 (citation omitted), then the Court
“may not enter [an] order[] to enforce the judgment on behalf of the foreign nation[,]” id. “The
statutory exceptions in 28 U.S.C. § 2467(d)(1)(A)–(E) are the only factors [the] Court is required
to consider in deciding whether [to] enforce” the foreign nation’s final forfeiture judgment. In re
One Prinz Yacht, 2022 WL 4119773, at *5. If a claim “does not fall within a statutory exception
in 28 U.S.C. § 2467(d)(1), [the] Court [need] not consider it.” Id. (footnote omitted).
Rather than explicitly arguing that any exceptions under § 2467 apply in this case, the
Intervenors make three arguments as support for their position that the Court should not enforce
the Brazilian Forfeiture Judgment. See Intervenors’ Opp’n at 1. The Court will address the
Intervenors’ first argument, even though it does not fall within any of the statutory exceptions
defined in § 2467(d)(1)(A)–(E). Then, the Court will address the Intervenors’ third argument, as
it potentially relates to § 2467(d)(1)(A). 7 Finally, the Court will not address the Intervenors’
7 Although the Intervenors do not specifically reference or cite any of the exceptions in § 2467(d)(1), the Court construes the third argument as potentially invoking the due process exception, see 28 U.S.C. § 2467(d)(1)(A), (continued . . .)
15 second argument, because it “does not fall within a statutory exception in 28 U.S.C.
§ 2467(d)(1),” see One Prinz Yacht, 2022 WL 4119773, at *5. 8 The United States argues that
“none of [the Intervenors’ reasons to delay entry of the forfeiture order] [are] legally sufficient to
prevent enforcement[.]” Gov’t Reply at 1. For the following reasons, the Court agrees with the
United States and finds that none of § 2467(d)(1)’s exceptions apply.
First, the Intervenors argue that the government “has put the cart before the horse[]”
because “[i]t has not moved to lift the stay of these proceedings[,]” and in any event, “there is no
justification to lift the stay[.]” See Intervenors’ Opp’n at 5. However, the fact that the
government failed to move to lift the stay is immaterial. “A trial court has broad discretion to
stay all proceedings in an action pending the resolution of independent proceedings elsewhere.”
Marsh v. Johnson, 263 F. Supp. 2d 49, 52 (D.D.C. 2003) (citation omitted). And, “[w]hen
circumstances have changed such that the [c]ourt’s reasons for imposing the stay no longer exist
or are inappropriate, the [c]ourt may lift the stay sua sponte or upon motion.” Id. Accordingly,
the “same court that imposes a stay of litigation has the inherent power and discretion to lift the
stay.” Id. (citations omitted).
Here, the Court granted the parties’ joint motion to stay the case based on their
representation that staying the case would “promote settlement and facilitate judicial economy.”
(. . . continued) based on the Intervenors’ assertions that the government and the Government of Brazil are disregarding their “third party interests” in the Emerald, see Intervenors’ Opp’n at 6–7. 8 Even if the Court considered the Intervenors’ second argument––that the government’s application should be denied because settlement discussions are ongoing––it would fail. Both the United States and the government of Brazil represent there are no ongoing settlement discussions. See Gov’t Reply, Ex. 1 (Reply Aff.) at 1–2 (“[The Intervenors] repeatedly assert[] that settlement discussions are ongoing . . . [, but t]hose assertions are incorrect[] . . . [because] since the forfeiture order was entered, [de Araujo] [is] aware of only two instances where [the] Intervenors, acting through a Brazilian lawyer [ ], contacted the Brazilian government, but no substantiative settlement discussions ensued.”); see also id. at 3 (“The United States joined the motion to stay [ ], and in subsequent status reports, to permit litigation or negotiations in Brazil which were granted. However, the Intervenors’ ‘settlement discussions’ are over, and the Brazilian court has now entered a final forfeiture order.”). Accordingly, the Intervenors’ second argument would have to be rejected.
16 See Joint Mot. to Stay at 1. However, according to the United States, “the grounds on which [it]
agreed with the Intervenors to stay this action have long lapsed.” Gov’t Reply at 1.
Furthermore, both the United States and the government of Brazil represent that there are no
current ongoing settlement discussions. See id. at 3; see also id., Ex. 1 (Reply Aff.) ¶¶ 2–3.
Additionally, the United States has filed an application to enforce the Brazilian Forfeiture
Judgment, which the Court “must grant . . . unless one of the five narrow exceptions applies.” In
re One Prinz Yacht, 2022 WL 4119773, at *4. Thus, the “circumstances have changed such that
the [Court’s] reasons for imposing the stay no longer exist[,]” Marsh, 263 F. Supp. 2d at 52, and,
therefore, the Court will sua sponte lift the stay currently imposed in this case.
As to the Intervenors’ third argument, they contend that “through the United States,”
Brazil “appears to be [ ] attempt[ing]” to “unduly influence[:]” (1) the settlement discussions by
requesting forfeiture of the Emerald, and (2) by having the United States submit the application
to enforce the Forfeiture Judgment, which is not protecting their “interest[s] in [the Emerald.]”
Intervenors’ Opp’n at 6. The Court construes this argument as potentially invoking the due
process exception under § 2467(d)(1)(A), which precludes a court from entering an order to
enforce a foreign nation’s judgment if “the judgment was rendered under a system that provides
tribunals or procedures incompatible with the requirements of due process of law[.]” 28 U.S.C.
§ 2467(d)(1)(A).
Here, the Brazilian Forfeiture Judgment was rendered in accordance with the Brazilian
Constitution, which provides that “no one shall be deprived of liberty or property without due
process of law[.]” See Gov’t Appl., Ex. 2 (de Araujo Aff.) ¶ 10. Furthermore, under the
Brazilian Criminal Procedure Code, “any [party] who claims to be a bona fide third[-]party
purchaser of seized property may petition the criminal judge to return the property[,]” id., Ex. 2
17 (de Araujo Aff.) ¶ 26, at any time before “the conclusion of the relevant criminal proceedings[,]”
id., Ex. 2 (de Araujo Aff.) ¶ 29. To ensure that the Morrison Parties, “in particular, received
notice of the [Brazilian] Forfeiture Judgment, the [Brazilian Attorney General’s] office arranged
to serve it on the [Morrison Parties].” Id., Ex. 2 (de Araujo Aff.) ¶ 34. 9
Rather than intervene in the Brazilian criminal proceedings and assert their purported
rights to the Emerald as “bona fide third[-]party purchaser[s in those proceedings,]” id., Ex. 2 (de
Araujo Aff.) ¶ 29, as the United States notes, the Intervenors elected instead to “file[] a petition
for a writ of mandamus in the Federal Regional Court of the 3rd Region [ ] to set aside the
[Brazilian] Forfeiture Judgment[,]” id., Ex. 2 (de Araujo Aff.) ¶ 43. The Intervenors’ petition
was based on their perspective that the California Superior Court adjudicated them “as a bona
fide purchaser, [and therefore they are] the rightful owner[s] of the Emerald.” Id., Ex. 2 (de
Araujo Aff.) ¶ 46. In a prior ruling, another member of this Court has already ruled on the effect
of the California Superior Court Judgment and the undersigned has no basis to reconsider that
ruling. See Public Opinion at 6 (stating that the “[California] Superior Court made it very clear
that it was not ruling on Brazil’s claim to ownership of the Emerald, but only sorting out superior
title among the various U.S. claimants[]”). And furthermore, under Brazilian law, the attempt
“to pursue a writ of mandamus––including any potential appeal––is and has been entirely
collateral to the criminal proceedings, which [have been] [ ] completed. Accordingly, the
Forfeiture Judgment is final and not subject to appeal.” Gov’t Appl., Ex. 2 (de Araujo Aff.) ¶ 50.
“[A]ll interested third parties, including [the Intervenors], had the right to petition the Brazilian
courts overseeing the criminal proceedings to return the Emerald[, but the Intervenors] failed to
exercise that right.” Id., Ex. 2 (de Araujo Aff.) ¶ 47. Thus, instead of intervening in accordance
9 There is no indication in the record that the Intervenors were not properly served, nor do they argue that the Brazilian Attorney General was unsuccessful in serving them.
18 with the process allowed by the Brazilian Criminal Procedure Code, the Intervenors elected to
pursue an alternative process that had no effect on the Brazilian Forfeiture Judgment.
Accordingly, the Court concludes that the Intervenors’ rights to assert an interest in the Emerald
were not, from a due process perspective, infringed or denied. See 28 U.S.C. § 2467(d)(1)(A).
In support of their third argument, the Intervenors further argue that, under Article 14 of
the MLAT, the United States has “abdicated its responsibility to protect [the Intervenors’] third
party interests in [the Emerald,]” Intervenors’ Opp’n at 1–2, by seeking to return the Emerald to
Brazil even though the “California Superior Court [ ] issued a final judgment awarding legal and
equitable title in the Bahia Emerald to [the] Intervenors[,]” id. at 2. For several reasons this
argument must be rejected. First, the Intervenors misinterpret Article 14 of the MLAT. As the
United States accurately points out, Article 14 “creates a formal framework for handling [ ]
requests” related to “one State [ ] ask[ing] another to search for, secure, and deliver articles or
objects needed . . . as evidence[.]” See S. Exec. Doc. No. 105-22, at 82 (1998) 10; see also Gov’t
Reply at 7 (“Article 14 of the MLAT is intended to manage the transfer of requested evidence to
a foreign treaty partner.”). Second, the Intervenors already had the opportunity to assert their
third-party interests in the Emerald in the Brazilian criminal proceedings but failed to do so.
Third, and again, another member of this Court has already ruled on the effect of the California
Superior Court Judgment and there is no basis to reconsider that ruling.
Having considered (1) the arguments advanced by the Intervenors in their opposition; (2)
the documentation submitted with the United States’ application, and (3) the documentation
submitted with the United States’ reply to the Intervenors’ Opposition, the Court concludes that
the Intervenors have failed to demonstrate that the proceedings that resulted in the Brazilian
10 The United States Senate Executive Report relevant to the above referenced treaty is available on the website of the United States Congress at https://www.congress.gov/105/crpt/erpt22/CRPT-105erpt22.pdf.
19 Forfeiture Judgment did not comport with due process. Thus, the § 2467(d)(1)(A) due process
exception does not apply in this case.
Finally, although the Court has concluded that the Intervenors’ positions are insufficient
to prohibit the return of the Emerald to Brazil, the Court briefly considers the applicability of the
other four exceptions in § 2467(d)(1). See 28 U.S.C. § 2467(d)(1)(B)–(E). Despite the
Intervenors failing to directly raise any of the exceptions prescribed by § 2467(d)(1), the Court
concludes that based on the documentation submitted with the government’s application, none of
the exceptions apply in this case. First, the Ninth Federal Court of Campinas, SP, as well as the
subsequent Brazilian appeals courts, had subject matter jurisdiction because “the crimes
[involving the Bahia Emerald] were committed against the Federative Republic of Brazil.”
Gov’t Appl., Ex. 2 (de Araujo Aff.) ¶ 17. Second, the Brazilian trial court had personal
jurisdiction over the defendants in the criminal case involving the Emerald because the
defendants, Riberio and Filho, “consented to the Court’s personal jurisdiction.” Id., Ex. 2 (de
Araujo Aff.) ¶ 18. Specifically, both defendants retained legal counsel and litigated their cases
before the Brazilian court and even sought appeals to overturn their convictions, which were
ultimately upheld. See id., Ex. 2 (de Araujo Aff.) ¶ 18. Third, all interested parties—including
the Intervenors—had notice of the Brazilian forfeiture proceedings because Brazil “took steps, in
accordance with the principles of due process, to give notice of the proceedings to all persons
with an interest in the Bahia Emerald in sufficient time to enable such persons to defend against
the charges or to assert their rights as bona fide purchasers[.]” See id., Ex. 2 (de Araujo Aff.)
¶ 2; see also id., Ex. 2 (de Araujo Aff.) ¶ 34 (attesting that, in order to ensure the Intervenors, in
particular, received notice of the Forfeiture Judgment, the Attorney General’s Office “arranged
to serve [notice] on the [Intervenors]. Specifically, on January 12, 2018, the
20 A[ttorney ]G[eneral]’s Office, acting through [the law firm of] Mayer Brown LLP, and having
previously secured the [Intervenors’] consent to service via its counsel, served the [Intervenors’]
counsel with the Forfeiture Judgment (including a certified translation of the Forfeiture
Judgment).”). And finally, the Court having reviewed all of the documentation before it, agrees
with the United States that “there is no indication [or allegation by the Intervenors] that the
[Brazilian] Forfeiture Judgment was obtained by fraud.” Id. at 16. See generally Intervenors’
Opp’n.
The Court therefore concludes that none of the Intervenors’ arguments are sufficient to
establish that any of the § 2467(d)(1) exceptions apply. Moreover, in their opposition, the
Intervenors raised no arguments that would preclude entry and enforcement of the foreign
nation’s judgment under § 2467(d)(1) or preclude the Court from granting the government’s
application. Accordingly, the Court concludes that every requirement in § 2467 has been
satisfied, and that none of the § 2467(d)(1) exceptions apply. The Court must therefore enforce
the Brazilian Forfeiture Judgment of the Bahia Emerald. See, e.g., In re One Prinz Yacht, 2022
WL 4119773, at *4 (concluding that under § 2467, “the [C]ourt must grant the application unless
one of the five narrow exceptions applies.”).
IV. CONCLUSION
For all of the foregoing reasons, the Court will lift the stay currently imposed in this case
and grants the government’s application to enforce the Brazilian Final Forfeiture Judgment to the
extent that it seeks a final order of forfeiture in favor of the United States against the Bahia
Emerald.
21 SO ORDERED this 21st day of November, 2024. 11
REGGIE B. WALTON United States District Judge
11 The Court will contemporaneously issue an Order lifting the stay in this case. Additionally, the Court will issue a final order of forfeiture pending the United States’ filing of a proposed order that is consistent with this Opinion.