Spanish Bank Can’t Deflect Claims by Cuba Terror Victims
Jan Wolfe, The Litigation Daily
August 25, 2014
After winning about $3.5 billion in default judgments against the
Republic of Cuba, Fidel Castro’s persecuted political opponents and
their families have cleared a hurdle in their bid to seize frozen Cuban
assets at global banks including Spain’s Banco Bilbao Vizcaya Argentaria
In a ruling issued on Friday, U.S. District Judge Alvin Hellerstein in
Manhattan denied BBVA’s request that he dismiss garnishment litigation
the families brought in an attempt to collect on the judgments in New
York. BBVA’s lawyers at White & Case argued that judgments issued
against Cuba by courts in Florida are void, and that therefore
Hellerstein lacks jurisdiction over the follow-on proceedings. But the
judge disagreed, writing that the Florida rulings are entitled to deference.
U.S. laws require banks to freeze wire transfers in which blacklisted
governments like the Republic of Cuba and the Republic of Iran might
have an interest. Under the Terrorism Risk Insurance Act, those frozen
funds can be used to satisfy the many default judgments obtained by
terrorism victims against the designated governments in U.S. courts.
The garnishment proceedings before Hellerstein relate to three lawsuits
brought by victims or family members of victims that Castro had killed
or tortured. The plaintiffs won judgments against the Cuban government
in Florida ranging in size from $95 million to $2.7 billion. In all of
the cases, judges heard testimony and determined that they’d had proven
their allegations of torture and extrajudicial killing. The judges also
concluded that the Cuban government can’t invoke sovereign immunity
because it falls under an exception for governments designated as
sponsors of terrorism.
Beginning in 2012, the families brought follow-on litigation in
Manhattan in hopes of enforcing the judgments. They are jointly seeking
to recover funds frozen by 19 financial institutions, including Bank of
America NA and Credit Suisse AG.
Of the banks affected by the turnover proceedings, BBVA was the only one
to bring a motion to dismiss. The bank made the case that the Cuban
government might have put forward if it had appeared in the underlying
litigation—namely, that the government is immune from suit since it
wasn’t designated as a sponsor of terrorism when alleged crimes
occurred. The Cuban government should have been absolved from liability
in the first place, the bank’s lawyers at White & Case argued, putting
the bank assets off limits.
Hellerstein gave no credence to that argument in Friday’s ruling. In his
view, judges in Florida already addressed the issue of sovereign
immunity, and it’s not his place to second-guess them.
“The judgments granted to the plaintiffs by that court were each
supported by appropriate findings of fact and conclusions of law based
on full and fair evidentiary hearings. The judgments are each entitled
to full faith and credit,” the judge wrote.
White & Case partner Kenneth Caruso wasn’t available for comment. We
also couldn’t reach Robert Swift of Kohn, Swift & Graf, who represents
the plaintiffs in the New York litigation along with Jeffrey Glen of
Companies, agencies mentioned: Kohn, Swift & Graf | Terrorism Risk
Insurance | Credit Suisse Group AG | Banco Bilbao Vizcaya Argentaria,
S.A. | Bank of America Corporation
Source: Spanish Bank Can’t Deflect Claims by Cuba Terror Victims |