Terrorism Risk Insurance

Attachment Under the Terrorism Risk Insurance Act: Martinez v Cuba in 2011

United States views on international law (based on the document “Digest of U.S. Practice in International Law”): On August 26, 2011, the U.S. District Court for the Southern District of Florida granted the U.S. motion for summary judgment and to quash the writs of garnishment that Ms. Martinez had obtained to garnish payments owed to the government of Cuba by certain air charter companies operating flights between the United States and Cuba. Martinez v. Cuba, No. 10-22095 (S.D. Fla. 2011). Ms. Martinez, the ex-wife of a Cuban spy, had obtained a default judgment against the government of Cuba in 2001 in state court in Florida pursuant to § 1605(a)(7) of the FSIA. The state court awarded Martinez over $27 million in damages based on its determination that she had been subject to torture and sexual battery. In 2010, Martinez obtained writs of garnishment from the clerk of the Florida state court providing for the garnishment of payments owed by eight U.S. air charter companies to entities in Cuba in connection with flight services authorize by the United States. The United States intervened in the case, removed it to federal court, and filed a motion for summary judgment and to quash the writs of garnishment in December 2010.

Developments

The U.S. brief in support of the motion for summary judgment argued that Martinez had not obtained a license under the Cuban Assets Control Regulations (“CACR”) to permit garnishment of the payments owed by the air charter companies, and that neither the FSIA nor the Terrorism Risk Insurance Act of 2002 (“TRIA”), P.L. No. 107-297, 116 Stat. 2322 (28 U.S.C. § 1610 note) provided a basis for garnishing the payments. The U.S. position was supported by the foreign policy interests of the United States in permitting the flights between the United States and Cuba which the Office of Foreign Assets Control (“OFAC”) had licensed pursuant to the CACR. The U.S. reply brief in support of summary judgment, filed February 9, 2011, is excerpted below (with footnotes and references to the record in the case omitted) and available at www.state.gov/s/l/c8183.htm, where the U.S. brief in support of its motion for summary judgment filed in December 2010 is also available.

Details

II. NEITHER THE FSIA NOR THE TRIA AUTHORIZE GARNISHMENT HERE.

There is no dispute that payments owed by the garnishees to an entity in Cuba constitute property in which Cuba or a Cuban national has an interest and are subject to the CACR. See 31 C.F.R. § 515.201(b). Nor can plaintiff dispute that the CACR requires a license to garnish such assets (without which the writs are null and void). See id. §§ 515.203(e); 515.310. The question presented is whether statutory law supplants this license requirement. Plaintiff relies on two statutory provisions in support of her garnishment action: Section 1610(f)(1)(A) of the FSIA and the TRIA. Neither statutory provision authorizes garnishment here.

A. FSIA Section 1610(f)(1)(A) Has Been Waived by the President.

Plaintiff's lengthy contention that Section 1610(f)(1)(A) of the FSIA permits garnishment here is clearly wrong because that provision has been waived by the President. By way of background, while the FSIA creates a presumption of immunity of foreign states from the jurisdiction of U.S. Courts, see 28 U.S.C. § 1605(a), Congress enacted an exception to such immunity in 1996 for cases in which money damages are sought against a foreign state for personal injury or death caused by, inter alia, acts of torture, see id. § 1605(a)(7). Plaintiff obtained her judgment against Cuba pursuant to that provision.As noted, the FSIA also creates a presumption against execution on the property of a foreign state to satisfy a judgment, subject to certain exceptions set forth in Section 1610 of the statute. See id. § 1609. The exception relied upon by plaintiff here—Section 1610(f)(1)(A)—permits the holder of a Section 1605(a)(7) judgment to execute on “any property with respect to which financial transactions are prohibited or regulated pursuant to section 5(b) of the Trading with the Enemy Act.” Id. § 1610(f)(1)(A).

But, as plaintiff acknowledges, when Section 1610(f) was originally enacted, Congress also enacted a non-code provision that allowed the President to waive it, and Section 1610(f) was waived upon enactment by the President. See Presidential Determination No. 99-1, 63 Fed.

Reg. 59,201 (Oct. 21, 1998). After a dispute arose as to the scope of the President's original waiver of Section 1610(f),Congress added language to the FSIA which clearly provides that the President “may waive any provision of paragraph (1) [of Section 1610(f)] in the interests of national security.” See 28 U.S.C. § 1610(g). The President again waived Section 1610(f)(1).

Presidential Determination No. 2001-03, 65 Fed. Reg. 66, 483 (Oct. 28, 2000).

Plaintiff's contention that the President's action contravened views expressed in a committee report as to how the President should exercise his waiver authority is beside the point:

More about the Issue

the statute clearly authorizes the President to waive Section 1610(f)(1), and that waiver forecloses plaintiff's reliance on that provision to garnish assets to satisfy her judgment. See Young v. West Publishing Co., 724 F. Supp. 2d 1268, 1278 (S.D. Fl. 2010) (Moreno, C.J. affirming Torres, M.J.) (“In the U.S. circuit, '[w]hen the import of the words Congress has used is clear . . . we need not resort to legislative history, and we certainly should not do so to undermine the plain meaning of the statutory language.'”) (quoting United States v. Weaver, 275 F.3d 1320, 1331 (11th Cir. 2001) and Harris v. Garner, 216 F.3d 970, 976 (11th Cir. 2000) (en banc)); see also Harry v. Marchant, 291 F.3d 767, 770 (11th Cir. 2002).

Plaintiff also contends that, in response to the President's waiver of Section 1610(f)(1), Congress enacted the TRIA, which “expressly made the President's waiver power exercisable only on an asset-by-asset basis,” (citing TRIA Section 201(b)(1)), and that Congress thereby expressly stated its intent to eliminate any prior blanket waiver,” (citing H.R. 107-779 at 27). This, too, is incorrect. While Section 201(b)(1) of the TRIA authorizes the President to waive attachment under the TRIA on an asset-by-asset basis, this provision does not amend Section 1610 of the FSIA, nor the President's authority to waive Section 1610(f)(1) (codified at 28 U.S.C. § 1610(g)). See TRIA, § 201(b)(1). That is, TRIA does not reinstate Section 1610(f)(1)(A)'s authorization to attach certain assets; it establishes a distinct waiver authority applicable solely to attachments governed by the TRIA itself. FSIA Section 1610(f)(1)(A) remains a “nullity” and is unavailable to authorize attachment. See Bennett v. Islamic Republic of Iran, 604 F. Supp. 2d 152, 160-161 (D. D.C. 2009). Moreover, the Government does not rely here on a Presidential waiver of assets under the TRIA, but on the fact that the assets at issue do not fall under TRIA's definition of “blocked asset.”

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See Also

• Privileges
• Immunities
• Foreign Sovereign Immunities
• Execution Of Judgments
• Post-Judgment Actions
• Attachments
• Terrorism
• Risk
• Insurance

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Notes and References

1. **** Editor's note: see in the content of this world legal encyclopedia 16.A.6.e(1) for a discussion of revisions to the Cuban Asset Control Regulations in 2011 that expanded opportunities for travel to Cuba.