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Comparelli v. Republica Bolivariana De Venezuela

United States Court of Appeals, Eleventh Circuit

June 8, 2018

REPUBLICA BOLIVARIANA DE VENEZUELA, a sovereign nation, PETROQUIMICA DE VENEZUELA, S.A., an agency or instrumentality of the Bolivarian Republic of Venezuela, INTERNATIONAL PETROCHEMICAL SALES, LTD., Defendants - Appellees.

          Appeal from the United States District Court for the Southern District of Florida D.C. Docket No. 1:14-cv-24414-KMW

          Before JORDAN, HULL, and BOGGS, [*] Circuit Judges.


         Carmina Comparelli and Julio Delgado Comparelli sued the República Bolivariana de Venezuela and Petroquimica de Venezuela, S.A., alleging unlawful expropriation of their property in violation of international law. The district court dismissed their complaint for lack of subject-matter jurisdiction and denied their motion for leave nunc pro tunc to file an amended complaint. The Comparellis appealed.

         While the case was pending here, the Supreme Court issued an opinion detailing the showing that plaintiffs such as the Comparellis must make in order to have jurisdiction over a foreign state in United States courts under the expropriation (i.e., takings) exception of the Foreign Sovereign Immunities Act, 28 U.S.C. § 1605(a)(3). See Bolivarian Republic of Venezuela, et al. v. Helmerich & Payne Int'l Drilling Co., 137 S.Ct. 1312 (2017). This new standard leaves us with several questions that the district court did not (and likely did not think it had to) answer. Under the circumstances, we believe that the district court is best suited to resolve those questions in the first instance. And so, after careful review of the parties' briefs and the entire record, and with the benefit of oral argument, we reverse and remand for further proceedings.

         I. Background

         The Comparellis alleged the following facts in their complaint. Because they share a last name, we refer to them by their first names.

         A. The Seizure of Marivelca in Venezuela

         Carmina was born in Italy and moved to Venezuela at a young age. She has resided in Venezuela most of her life and is the sole shareholder of a Venezuelan company, Marivelca, C.A.[1]

         Marivelca sold chemical products and raw materials in the alimentary, petroleum, and petrochemical industries. Carmina's son, Julio, born in Venezuela, wholly owns Inversiones Trans Benz, C.A., the "trucking arm" of Marivelca. Both Marivelca and Trans Benz worked closely with Venezuela's public sector and its state-owned and operated businesses, including Petroquimica de Venezuela, S.A. ("Pequiven"), a nationalized Venezuelan company engaged in the domestic production and sale of petrochemical products.

         Marivelca operated as part of Pequiven's network of certified distributors of hydrochloric acid for legal industrial applications. Pequiven would deliver hydrochloric acid to Marivelca at certain storage locations that Marivelca owned or leased. From those storage locations, Marivelca would transport the hydrochloric acid to other sites beyond Pequiven's direct distribution zone.[2]

         As part of its delivery network, Marivelca leased storage space from Suplidora del Caribe, C.A., a company headquartered in Maracaibo, Venezuela. Marivelca used the leased space from Suplidora to temporarily store hydrochloric acid that it acquired from Pequiven.

         In June of 2008, the Public Ministry of the State of Zulia (a Venezuelan state) began investigating Suplidora. During this investigation, on August 8, 2008, the Anti-Drug Division of the Bolivarian National Guard of Venezuela conducted a warrantless search of Marivelca's headquarters for the suspected illicit storage of controlled chemical substances, as defined in Article 31 of Venezuela's Organic Law Against Illicit Traffic and Consumption of Narcotics and Psychotropic Substances. After this search, the National Guard reported that Marivelca maintained a surplus of about three million pounds of hydrochloric acid that it had not disclosed to Venezuelan authorities. On October 20, 2008, the National Anti-Drug Office conducted another warrantless search of Marivelca's facilities, at the request of the prosecutor's office in Zulia.

         About two years later, in August of 2010, Venezuela charged the Comparellis with illicit storage of controlled chemical substances in violation of Article 31, and criminal conspiracy in violation of Article 6 of Venezuela's Organic Law Against Organized Crime. In November of 2010, Venezuela seized Marivelca and its assets and appointed Pequiven as the "special administrator" of Marivelca.

         The original complaint, rife with allegations about corruption in Venezuela's political and judicial branches, asserts that Venezuela initiated the criminal proceeding as a pretext to further an illicit scheme to expropriate Marivelca. The Comparellis allege that they filed pleadings in September of 2010, December of 2010, and January of 2011 in response to the criminal charges, but claim that these pleadings were ignored by Venezuela so that it could "put [the case] at sleep . . . for the sole purpose of furthering the illicit scheme." The Comparellis also submitted a petition for extraordinary relief (an "avocamiento") to the Venezuela Supreme Court, but that too was rejected, over the dissent of one justice.

         A physical audit of Marivelca's purchases, sales, and inventory-conducted in December of 2010-revealed a surplus of only 903 pounds of hydrochloric acid, an amount within the normal tolerance margins associated with the weighing of bulk purchases of the acid. The Comparellis sent the results of this audit to the prosecutor in January of 2011. Instead of providing any relief, the Venezuelan government sought and obtained arrest warrants for Carmina and Julio. Around this time (the complaint does not say exactly when), the Comparellis fled Venezuela for Costa Rica.

         B. The Lawsuit

         On November 19, 2014, Carmina and Julio, together with Freddy and Loryelena Comparelli, filed a "Complaint for Claims Pursuant to 28 U.S.C. § 1350" (the Alien Tort Statute) against Venezuela and Pequiven. This original complaint alleged that, through the conduct described above, Venezuela and Pequiven (an alleged "agency or instrumentality" of Venezuela) unlawfully expropriated the Comparellis' assets in violation of "the applicable law of nations and of conventional and customary international law." The complaint alleged violations of the American Convention on Human Rights (1144 U.N.T.S. 129 (1969)), the American Declaration of the Rights and Duties of Man (O.A.S. Res. XXX (1948)), the International Covenant on Civil and Political Rights (999 U.N.T.S. 171 (1967)), the Universal Declaration of Human Rights (G.A. Res. 217A, U.N. Doc. A/810 at 71 (1948)), and United Nations General Assembly Resolution 3281. The Comparellis specifically asserted jurisdiction under the expropriation exception of the FSIA, 28 U.S.C. § 1605(a)(3).

         Venezuela and Pequiven moved to dismiss the Comparellis' original complaint. After receiving an extension of time to respond to the motions to dismiss, Carmina and Julio (but not Freddy and Loryelena) filed an amended complaint rather than a response to the motions. The amended complaint alleged the same wrongful expropriation, removed a reference to the ATS, corrected Marivelca's ownership, added that Carmina and Julio currently reside in Miami-Dade County, Florida, and sought to add an additional defendant, International Petrochemical Sales, Ltd. A week later, Carmina and Julio filed a motion for leave nunc pro tunc to re-file their amended complaint, requesting that the district court treat it as the operative pleading in the case. Venezuela and Pequiven opposed the motion and separately moved to dismiss the amended complaint.

         The district court issued a summary omnibus order (1) denying the motion for leave to file an amended complaint nunc pro tunc; (2) striking the amended complaint; and (3) ordering the Comparellis to respond to the original motions to dismiss. Freddy and Loryelena Comparelli voluntarily dismissed their claims. Carmina and Julio continued pursuing their claim for unlawful expropriation and filed a response opposing the motions to dismiss the original complaint six days later.

         On September 23, 2016, the district court granted the motions to dismiss. It categorized the Comparellis' claim in the original complaint as arising under the ATS, not under § 1605(a)(3) of the FSIA. Applying ATS case law and the presumption against extraterritoriality, see generally Kiobel v. Royal Dutch Petroleum Co., 569 U.S. 108, 115 (2013), it ruled that federal courts do not have jurisdiction over an ATS claim when it "involves a foreign plaintiff suing a foreign defendant where 'all relevant conduct' occurred on foreign soil (a so-called 'foreign-cubed' case)." D.E. 75 at 4. Describing the facts of the case as a "quintessential 'foreign-cubed' case, " with foreign nationals suing foreign sovereigns over conduct that occurred abroad, the district court determined that it lacked subject-matter jurisdiction and dismissed the case.

         II. Standard of Review

         We review de novo questions of subject-matter jurisdiction. See Doe v. Drummond Co., Inc., 782 F.3d 576, 593 (11th Cir. 2015). We likewise review de novo the applicability of the act of state doctrine to the Comparellis' claims. See Mezerhane v. República Bolivariana de Venezuela, 785 F.3d 545, 548 (11th Cir. 2015).

          III. The Foreign Sovereign Immunities Act

         As noted earlier, the Comparellis' attorney made some errors in the original complaint that led to the filing of the stricken amended complaint. Because the amended complaint was never the operative pleading, we only consider the original complaint. We treat Carmina as the sole shareholder of Marivelca due to the exhibit attached to the original complaint, which governs over the conflicting allegation of ownership in the complaint. See Friedman, 520 F.3d at 1295 n.6.

         The original complaint cites the ATS in its caption, but that reference does not preclude us from recognizing that the Comparellis invoked jurisdiction under the FSIA's expropriation exception. First, "although captions provide helpful guidance to the court, they are not determinative as to the parties to the action or the court's jurisdiction." Lundgren v. McDaniel, 814 F.2d 600, 604 n.2 (11th Cir. 1987). Second, aside from the reference to the ATS in the caption, the remainder of the complaint makes explicit reference to, sets out the elements of, and alleges facts relating to ยง 1605(a)(3), the FSIA expropriation exception. Of particular note, paragraph nine prominently states that the court "has jurisdiction over Venezuela and Pequiven pursuant to 28 ...

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