Second Circuit reverses district court’s order citing lack of subject matter jurisdiction to enter judgment against Cuba under the FSIA, quashes information subpoena served on bank

Aldo Vera, Jr. (“Vera”) filed a case because of the extra judicial killing of his father in 1976 in Cuba. Cuba was declared as a state sponsoring terrorism in 1982. In 2008, Vera obtained a default judgment against Cuba in Florida State Court by relying on the “terrorism exception” to sovereign immunity, 28 U.S.C. § 1605A(a)(1). Vera then obtained a default judgment in United States District Court for the Southern District of New York which granted full faith and credit to the Florida Judgment. Vera, thereafter, served information subpoenas on the New York branches of various foreign banks including Banco Bilbao Vizcaya Argentaria, S.A. (“BBVA”). BBVA refused to comply with the subpoena’s request for information pertaining to Cuban assets located outside the United States. BBVA moved to quash this subpoena contending that the United States District Court was not having subject matter jurisdiction under the Foreign Sovereign Immunities Act, 1976 (the “FSIA”), as amended, 28 U.S.C. §§ 1602 et seq. District Court rejected the jurisdictional challenge and ordered complete disclosure. BBVA appealed against the order of District Court in the Second Circuit.

The U.S. Court of Appeals for the Second Circuit reverses the decision and remands the case back to the District Court with the observation that it lacked subject matter jurisdiction over Vera’s action against Cuba. The FSIA’s terrorism exception to sovereign immunity—the only potential basis for subject matter jurisdiction in this case—did not apply. Cuba was immune from Vera’s action.

Two principles of federal jurisdiction guided Second Circuit’s analysis. First, subject matter jurisdiction “functions as a restriction on federal power.” Ins. Corp. of Ir., Ltd. v. Compagnie des Bauxites de Guinee, 456 U.S. 694, 702, 102 S.Ct. 2099, 72 L.Ed.2d 492 (1982). Federal courts may not proceed at all in any case without it. See Sinochem, 549 U.S. at 430-31, 127 S.Ct. 1184. Second, “the subpoena power of a court cannot be more extensive than its jurisdiction.” U.S. Catholic Conference v. Abortion Rights Mobilization, Inc., 487 U.S. 72, 76, 108 S.Ct. 2268, 101 L.Ed.2d 69 (1988).

“A district court must therefore determine whether it has jurisdiction, no matter how a case comes before it. If the court lacks jurisdiction over the proceeding and issues a subpoena that does not aid in determining jurisdiction, the subpoena is void and unenforceable. See id. at 80, 108 S.Ct. 2268.” (Page 316)

The subpoena at issue in this appeal was served on BBVA in an effort to enforce Vera’s Federal Default Judgment. The legitimacy of the subpoena was tied to the District Court’s jurisdiction to enter judgment against Cuba under one of the exceptions to sovereign immunity in the FSIA. In order to invoke the terrorism exception to sovereign immunity of the FSIA, Vera had the burden to establish that Cuba was designated a state sponsor of terrorism in 1982 as a result of his father’s death. The record suggested on the contrary that the State Department designated Cuba a state sponsor of terrorism generally because of its “support for revolutionary violence and groups [that] use terrorism as a policy instrument.”

“We reverse. The District Court lacked subject matter jurisdiction over Vera’s action against Cuba because Cuba was not designated a state sponsor of terrorism at the time Vera’s father was killed, and Vera failed to establish that Cuba was later designated a state sponsor of terrorism as a result of his father’s death. Accordingly, the FSIA’s terrorism exception to sovereign immunity—the only potential basis for subject matter jurisdiction in this case—does not apply. Cuba was immune from Vera’s action, the District Court lacked subject matter jurisdiction to enter judgment against it, and the information subpoena to enforce that judgment is void.” (Page 312-313).

Consequently, the Judgment against Cuba and the information subpoena to enforce that Judgment were held to be void.

CITATION: Vera v. Republic of Cuba, 867 F.3d 310, 320 (2d Cir. 2017).

**** Mike Meier is an experienced business consultant. Fluent in German and Spanish, French and Japanese. Juris Doctor (1993) & Master of Laws with distinction (1997), Georgetown University; Master's Degree in Political Science (1988), University of Berlin (Germany), Yale Law School. - Attorney Website at https://mikemeierattorney.com/ - Attorney Profile at: https://solomonlawguild.com/mike-meier# - Attorney News at: https://attorneygazette.com/mike-meier%2C-consultant#