Villoldo v. Computershare, Inc.

821 F.3d 196, 94 Fed. R. Serv. 3d 1378, 2016 U.S. App. LEXIS 8755
CourtCourt of Appeals for the First Circuit
DecidedMay 12, 2016
Docket15-1808P
StatusPublished
Cited by5 cases

This text of 821 F.3d 196 (Villoldo v. Computershare, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the First Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Villoldo v. Computershare, Inc., 821 F.3d 196, 94 Fed. R. Serv. 3d 1378, 2016 U.S. App. LEXIS 8755 (1st Cir. 2016).

Opinion

BARRON, Circuit Judge.

These cross-appeals arise from the ongoing efforts by two brothers to satisfy a multi-billion dollar judgment they won against the-Republic of Cuba and other Cuban parties. In the appeal that the brothers bring, they challenge the District Court’s ruling that certain assets they seek to attach to satisfy that judgment are not the property of the Cuban government and thus are not subject to attachment in satisfaction of their judgment. The cross-appeal is brought by the trustee who controls the assets ip question. The trustee challenges the District Court’s denial of its motion for attorneys’ fees incurred in proceedings concerning whether it had to turn over the assets in question to the brothers. We affirm the District Court in both appeals.

I.

The primary legal dispute in this case concerns how the law of, foreign relations *199 affects the attempted satisfaction of a judgment. The judgment itself, however, is not at issue. Nevertheless, because the circuitous route that led from that judgment to these cross-appeals is relevant to the issues in' dispute, we begin by briefly retracing how we got from there to here.

The brothers who are seeking to satisfy the judgment are Alfredo and Gustavo Vil-loldo, each of whom moved from Cuba to the United States in 1960. In 2008, they filed suit in Florida state court and named as defendants: Fidel Castro Ruz; Raul Castro Ruz; the Republic of -Cuba; the Cuban Ministry of the Interior;' and the Army of the Republic of Cuba (together, the “Cuban defendants”).

The brothers’ complaint alleged state-law causes of action for economic loss, intentional infliction of emotional distress, and wrongful death. The complaint alleged that after Fidel Castro assumed power, on January 1,1959, his government began to target the Villoldos.- In particular, the complaint alleged that the targeting involved the following actions. Cuban security forces threatened, beat, and arrested both brothers. Cuban officials threatened Gustavo Villoldo Argilagos, the brothers’ father, and promised to kill the entire family unless the brothers’ father committed suicide and turned his property over ,to the Cuban government. The Cuban government, confiscated Gustavo Vil-loldo Argilagos’s land, company, and bank accounts after he was found dead on February 16, 1959, apparently having committed suicide. And the Cuban' government continued to threaten the brothers with assassination even after they fled Cuba for the United States in 1960.

In 2011, a Florida- court awarded the brothers a $2.79 billion judgment against the Cuban defendants on- their state-law claims. The judgment followed the defendants’ default and a bench trial on damages. ■ • • '

Soon thereafter, the brothers sued the Cuban defendants' in the Southern District of New York, seeking recognition of the Florida judgment iinder the Full Faith and Credit Clause of the United States Constitution. U.S. Coflst. art. IV,' § 1. The Cuban defendants defaulted again, and the Southern District of New York awarded the brothers a federal judgement in the amount of $2.79 billion, plus interest.

The brothers then sought to execute the federal judgment, including by pursuing assets located in Massachusetts and allegedly owned by the Cuban government. So, as part of that quest, on May 17, 2013, the brothers registered the-New-York federal judginent in the District of Massachusetts. And on June 6, -2013, the District Court authorized'-the brothers to seek attachment. The brothers then served a subpoena on Computershare, Inc., a transfer agent located in Canton, Massachusetts. -

The subpoena sought information about' any securities accounts controlled' by Com-putershare that were blocked ‘pursuant to the Cuban Assets Control Regulations, 31 C.F.R. Subt. B, ch. V, pt. 515, the Cuba sanctions regime. The brothers hoped to identify accounts that Cuba owns. Com-putershare produced a -chart identifying 383 accounts that had been blocked by the Cuban sanctions regime, which- had been opened by 70 different individuals.

Having received- that information, the brothers, in December of 2013, filed an eX parte motion in the District Court for a turnover order against Computershare. The brothers’ motion argued that the accounts identified by -Computershare -had been opened in the 1950s by Cuban nationals, but. had since become the property of Cuba by operation of a Cuban confiscatory law. Thus, the brothers argued that the *200 accounts are subject to attachment in light of the federal judgment from New York. The brothers requested that the District Court (a) find the accounts subject to attachment and execution; (b) allow the issuance of a trustee summons to Computers-hare; and (c)- establish a procedure to notify potential parties in interest.

The District Court granted the motion, established a detailed notice protocol, and set January 31, 2014, as the deadline for any interested party to file an objection. The District Court also ordered Comput-ershare to turn over the accounts of any non-objecting parties by February 7, 2014.

Following the District Court’s ruling, the brothers served Computershare with a trustee summons. Computershare filed a trustee answer shortly afterwards. Com-putershare contended that the accounts at issue contained three different types of assets: shares of common stock held by physical stock certificates (“certificated shares”); shares of common stock held electronically (“book shares”); and cash. Computershare asserted that it could turn over the cash and the book shares but that it could hand over the certificated shares only if the brothers provided a surety bond and the Court made a finding that the original shares were deemed “lost, stolen or wrongfully taken.”

Following the passing of the January 31, 2014 objection deadline — by which time only one objection had been filed — the District Court, on February 12, 2014, issued a follow-on turnover order. This order required Computershare to turn over the book and cash assets within 60 days. The order did not address the certificated shares. The order also stated that the District Court would set a briefing schedule for the objecting party.

Another flurry of motions followed the February 12 order. As- relevant here, Computershare at this point argued for the first time — in its briefing regarding whether it should be given extra time to comply with the February 12 order — that the blocked accounts should not be considered the property of Cuba. The United States then filed a statement of interest that also argued that the accounts should not be considered the property of Cuba. The brothers responded that the February 12 turnover order was- a final judgment and thus that the District Court lacked the authority to revisit it.

The District Court, however, determined that the February 12 order was not a final judgment. Then, on July 7, 2015, the District Court ruled that — contrary to the conclusion it had reached in its original turnover order — the blocked assets were not the property of the Cuban government, denied the brothers’ pending motions, and dismissed the case.

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Bluebook (online)
821 F.3d 196, 94 Fed. R. Serv. 3d 1378, 2016 U.S. App. LEXIS 8755, Counsel Stack Legal Research, https://law.counselstack.com/opinion/villoldo-v-computershare-inc-ca1-2016.