Caballero v. Fuerzas Armadas Revolucionarias De Coloumbia, et al
DECISION AND ORDER: The motion for reconsideration or, in the alternative, certification of an interlocutory appeal filed by Terrance P. Flynn and Marcos Daniel Jimenez, Docket Item 81 , is DENIED. SO ORDERED. Signed by Hon. Lawrence J. Vilardo on 1/7/2022. (EK)
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UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF NEW YORK
DECISION & ORDER
REVOLUCIONARIAS DE COLOMBIA, et
The plaintiff, Antonio Caballero, is a judgment creditor of Fuerzas Armadas
Revolucionarias de Colombia (“FARC”). To satisfy his judgment against FARC,
Caballero moved ex parte under section 201(a) of the Terrorism Risk Insurance Act of
2002 (“TRIA”) for post-judgment execution on the blocked assets of alleged agencies or
instrumentalities of FARC. 1 See Docket Items 10, 22. In connection with that request,
Caballero sought a determination that Petróleos de Venezuela, S.A. (“PDVSA”), Docket
Item 10, and six of PDVSA’s subsidiaries—(1) PDV Marina SA; (2) Aceites Y Solventes
Venezolanos SA; (3) Petroanzoategui SA; (4) Venfleet Asphalt Ltd.; (5) Venfleet
Products Ltd.; and (6) Venfleet Ltd. (together, “the subsidiaries”), Docket Item 22—are
agencies or instrumentalities of FARC.
TRIA is a means through which terrorism victims can satisfy judgments for
damages against terrorist defendants. Under TRIA, a terrorism victim who meets
certain requirements can satisfy her judgment against a terrorist party by attaching and
executing upon the “blocked assets of . . . any agency or instrumentality of that terrorist
party.” Terrorism Risk Insurance Act § 201(a), Pub. L. No. 107-297, 116 Stat. 2322
(2002) (codified at 28 U.S.C. § 1610 note).
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This Court determined that PDVSA and the subsidiaries are agencies or
instrumentalities of FARC and, because Caballero satisfied the other TRIA
requirements, granted Caballero’s motions for post-judgment execution. Docket Items
15, 33. On January 29, 2021, this Court entered a turnover judgment against the
blocked assets of PDVSA. Docket Item 35.
Meanwhile, PDVSA and the subsidiaries moved to intervene, and a dispute
developed about who represented them. Because PDVSA is an entity controlled by the
Bolivarian Republic of Venezuela (“Venezuela”), PDVSA’s board is appointed by the
head of the Venezuelan government. But dueling leaders claimed to be the real head of
the Venezuelan government: Nicolás Maduro, the incumbent leader, and Juan Guaidó,
the leader recognized by the United States. 2 And dueling lawyers—chosen by the
Maduro or Guaidó factions—claimed to represent PDVSA and its subsidiaries.
PDVSA’s general counsel in Caracas, Venezuela—appointed by Maduro 3—
retained attorneys Terrance P. Flynn and Marcos Daniel Jiménez (“Flynn and Jiménez”)
In May 2018, Venezuela held presidential elections. Then-president Maduro
claimed victory, but the National Assembly of Venezuela (“National Assembly”) declared
Maduro’s presidency illegitimate and declared Guaidó the Interim President of
Venezuela. Docket Item 58-2 at 3. The United States immediately recognized Guaidó
and the National Assembly (together, the “Interim Government”) as the legitimate
government of Venezuela. See Docket Item 58-4 (Statement of President Donald J.
Trump Recognizing Venezuelan National Assembly President Juan Guaido as the
Interim President of Venezuela (Jan. 23, 2019)). The current United States
administration has reaffirmed that decision. See Press Briefing, Background Press Call
by Senior Administration Officials on Venezuela, The White House (Mar. 8, 2021),
Flynn and Jiménez have not explicitly linked PDVSA’s general counsel to
Maduro, but as this Court previously explained, Docket Item 78 at 6 n.6, the connection
is self-evident. The Maduro and Guaidó regimes are the only two entities competing to
govern PDVSA—and, indeed, Venezuela itself. Because Flynn and Jiménez were
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to represent the interests of PDVSA and the subsidiaries in this action. Represented by
Flynn and Jiménez, PDVSA and the subsidiaries intervened to challenge the Court’s
agency-or-instrumentality determination as well as the validity of the turnover judgment.
See Docket Items 37, 39. A short time later, White & Case LLP (“White & Case”)—
retained by the Ad Hoc Board of Directors of PDVSA (“Ad Hoc Board” or the “Board”)
appointed by Guaidó—moved to substitute counsel and for a stay of the proceedings.
Docket Item 58.
After briefing and oral argument, this Court granted White & Case’s motion to
substitute. Docket Item 78. Based on the political question and act of state doctrines,
the Court found that the “only board authorized to appoint counsel to represent PDVSA
and the subsidiaries in this Court is the Ad Hoc Board.” Id. at 12. The Court also
denied the motion for a stay. Id. at 17.
Flynn and Jiménez now ask the Court to reconsider its order granting substitution
of counsel, or, in the alternative, to certify that order for interlocutory appeal pursuant to
28 U.S.C. § 1292(b). Docket Item 81. On July 2, 2021, Caballero and White & Case
both responded, Docket Items 86 and 87, and on July 23, 2021, Flynn and Jiménez
replied, Docket Item 89.
For the following reasons, the motion to reconsider this Court’s May 11, 2021
order granting substitution of counsel, or, in the alternative, to certify that order for
interlocutory appeal is denied. 4
retained by PDVSA counsel unconnected to Guaidó or the Ad Hoc Board of PDVSA,
the Court is left with the inevitable conclusion that they were retained by someone who
was appointed by, or who is otherwise associated with, Maduro.
The Court assumes the reader’s familiarity with the factual background and the
analysis in the Court’s May 11, 2021 order granting White & Case’s motion to substitute,
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Strict standards govern motions for reconsideration and interlocutory appeal,
which should be granted only in exceptional and rare circumstances. Motions for
reconsideration “will generally be denied unless the moving party can point to controlling
decisions or data that the court overlooked—matters, in other words, that might
reasonably be expected to alter the conclusion reached by the court.” Shrader v. CSX
Transp., Inc., 70 F.3d 255, 257 (2d Cir. 1995). Similarly, motions for an interlocutory
appeal are generally denied because “only exceptional circumstances will justify a
departure from the basic policy of postponing appellate review until after the entry of a
final judgment.” In re Facebook, Inc., 986 F. Supp. 2d 524, 529-30 (S.D.N.Y. 2014)
(internal quotations marks, alteration, and citation omitted). In fact, the Second Circuit
urges “district courts to exercise great care in making a § 1292(b) certification.”
Westwood Pharm., Inc. v. Nat'l Fuel Gas Distrib. Corp., 964 F.2d 85, 89 (2d Cir. 1992).
This case presents none of those circumstances, and Flynn and Jiménez therefore
have not met the lofty standards necessary for reconsideration or interlocutory appeal. 5
see Docket Item 78. A more complete recitation of the facts can be found in that
As a threshold matter, White & Case argues that Flynn and Jiménez were
without authority to file their motion because this Court terminated them as attorneys of
record for PDVSA and its subsidiaries and struck their appearances from the record.
Docket Item 87 at 2-3. White & Case asks the Court to deny the motion on that ground
alone. Id. Because the Court finds that Flynn and Jiménez have not met the high
standard for a motion to reconsider or for certification of an interlocutory appeal, that
clever but somewhat circular argument is moot, and this Court therefore does not
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MOTION FOR RECONSIDERATION
“A motion for reconsideration is an extraordinary request that is granted only in
rare circumstances, such as where the court failed to consider evidence or binding
authority.” Van Buskirk v. United Grp. of Companies, Inc., 935 F.3d 49, 54 (2d Cir.
2019). Therefore, a motion to reconsider must provide a compelling reason why the
court should revisit a prior decision. For example, reconsideration is appropriate when
there is (1) a change in the controlling law, (2) newly discovered evidence, or (3) clear
error or an obvious injustice the court must correct or prevent. See Virgin Atl. Airways,
Ltd. v. Nat'l Mediation Bd., 956 F.2d 1245, 1255 (2d Cir. 1992). On the other hand,
reconsideration is not appropriate when a party simply does not like or disagrees with a
decision and simply wants another bite of the apple. See Reed v. Aqueon Prods., 2015
WL 506434, at *2 (W.D.N.Y. Feb. 6, 2015) (citing In re Houbigant, Inc., 914 F. Supp.
997, 1001 (S.D.N.Y. 1996)).
Flynn and Jiménez do not argue that there is a change in controlling law or newly
discovered evidence; instead, they assert that this Court committed clear error by
misapplying Supreme Court precedent—W.S. Kirkpatrick & Company v. Environmental
Tectonics Corporation, 493 U.S. 400 (1990)—and that it would be “manifestly unjust” to
proceed with White & Case as counsel for PDVSA and the subsidiaries. Docket Item
81. Because this Court correctly applied Kirkpatrick, and because Flynn and Jiménez
do not offer anything more than they offered the first time around, their motion to
reconsider is denied.
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Clear Error in Applying Kirkpatrick
Flynn and Jiménez fault this Court for overlooking Kirkpatrick and improperly
applying the act of state doctrine. Id. at 4-5. Kirkpatrick, they say, held that “federal
courts should not invoke the act of state doctrine unless the court ‘must decide—that is,
when the outcome of the case turns upon—the effect of official action by a foreign
sovereign.’” Id. at 4 (emphasis in original) (quoting Kirkpatrick, 493 U.S. at 406). Here,
they argue, the outcome of this case turns not on any official action by the Venezuelan
sovereign but on whether Caballero can establish that PDVSA was an “agency or
instrumentality” of FARC. 6 Id. at 5.
Flynn’s and Jiménez’s argument misses the point. To decide White & Case’s
motion—that is, to decide who represents parties in this Court—this Court necessarily
had to decide “the effect of official action by a foreign sovereign.” See Kirkpatrick, 493
U.S. at 406. More specifically, as this Court explained in its prior order, to determine
who would represent the intervenors in this case, the Court had to decide whether
Guaidó’s appointment of the Ad Hoc Board was a valid act of state or whether Maduro
and his appointees retained control of Venezuela and therefore PDVSA. See Docket
Item 78 at 14-16.
Kirkpatrick was markedly different. In Kirkpatrick, one company sought damages
from another under the Racketeer Influenced and Corrupt Organizations Act (“RICO”)
because of bribes allegedly paid to Nigerian officials to secure a government contract.
Flynn and Jiménez made these same arguments against the application of the
act of state doctrine in their briefing on the motion to substitute, see Docket Item 65 at
11, 17, and this Court considered and rejected those arguments in its prior order, too,
see Docket Item 78 at 11, 14-16.
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493 U.S. at 402. The defendant argued that the act of state doctrine barred the action
because the facts necessary to establish the RICO claim also would establish that the
contract was illegal under Nigerian law and could result in embarrassment to the foreign
government. Id. at 406-08. But the Supreme Court found that the act of state doctrine
was not implicated because nothing in the case “require[d] the Court to declare invalid
. . . the official act of a foreign sovereign.” Id. at 405 (citation omitted). In other words,
deciding an issue in the case did not require deciding the effect of an official act by a
foreign sovereign, there Nigeria, and so the act of state doctrine was not implicated. Id.
Not so here. Unlike Kirkpatrick, this is not a case where the court’s findings
might indirectly suggest the invalidity of a foreign sovereign’s action. See id. at 405.
Here, this Court necessarily had to decide whether Guaidó’s appointment of the Ad Hoc
Board was a valid act of state or whether Maduro retained the authority to control
PDVSA. Indeed, the Court’s decision hinged precisely on that very issue.
In sum, to resolve the motion to substitute, this Court had to decide who was
properly retained to represent PDVSA and the subsidiaries. Docket Item 78 at 14.
That, in turn, required the Court to decide who controlled PDVSA and could retain
counsel on its behalf. And that required the Court to decide who had the authority to
appoint the board of the state-owned company—that is, to decide who was the
legitimate leader of Venezuela’s government. Id. The political question doctrine
therefore required this Court to recognize the leader already recognized by the
Executive Branch—Guaidó—as the head of the legitimate government in Venezuela.
Id. (citing Jiménez v. Palacios, 2019 WL 3526479, at *11 (Del. Ch. Aug. 2, 2019), aff’d,
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237 A.3d 68 (Del. 2020)). 7 And the act of state doctrine then required this Court to
recognize Guiadó’s appointment of the Ad Hoc Board as valid. Id. at 14-15.
Manifest Injustice and Denial of Due Process
Flynn and Jiménez urge this Court to reconsider its prior order for a second
reason: to prevent “manifest injustice” to PDVSA and its subsidiaries. Docket Item 81 at
5-9. They argue that granting the motion to substitute denies PDVSA’s right to due
process which necessarily includes the right to present evidence and to choose
Those arguments are identical to the arguments Flynn and Jiménez made in their
earlier briefs, see Docket Item 65 at 6-9, 12-13; Docket Item 77 at 2-4, and this Court
Flynn and Jiménez attempt to distinguish Jiménez v. Palacios because the
ultimate relief sought there was a declaratory judgment that the directors of PDVSA, not
the Ad Hoc Board, constituted the legitimate board, while the ultimate relief sought here
is the turnover of PDVSA’s and the subsidiaries’ assets. Docket Item 81 at 5. But the
application of the act of state doctrine does not turn on the ultimate relief sought; rather,
it looks to whether the Court necessarily must decide the legitimacy of a foreign
sovereign’s action in rendering a decision. Here, to decide who represents PDVSA and
its subsidiaries—something this Court necessarily must decide for this case to
proceed—this Court necessarily must choose the legitimate leader of the Venezuelan
government so that it can honor the official act of that legitimate leader. If it is Maduro,
then his appointment of general counsel is valid, and Flynn and Jiménez, the attorneys
retained by general counsel, are counsel of record; if it is Guaidó, then his appointment
of the Ad Hoc Board is valid, and White & Case represents the intervenors. There is no
way around that decision and no way to decide the issue without deciding Venezuela’s
legitimate leadership and thus who compromises the PDVSA board. So the political
question doctrine resolves the first question: Guaidó is the legitimate leader of the
Venezuelan government—at least as far as courts in the United Sates are concerned.
And ultimate issue or not, the act of state doctrine resolves the second question: “The
Guaidó government’s reconstitution of the PDVSA board was the official act of a
recognized sovereign taken wholly within its own territory.” Jiménez, 2019 WL
3526479, at *13.
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rejected those arguments in its prior order, see Docket Item 78 at 12-14. As this Court
noted, the right-to-choose-counsel argument hinges on who has the right to choose, an
issue addressed above and at length in this Court’s prior order. Id. And as this Court
also noted, the due process argument is a chimera because any obstacle to White &
Case’s effective representation of PDVSA would be of PDVSA’s and Maduro’s own
making. 8 Id. Therefore, and because reconsideration is not appropriate when a party
simply dislikes or disagrees with a decision and seeks to reargue issues already
considered, see Reed, 2015 WL 506434, at *2 (citing In re Houbigant, 914 F. Supp. at
100), the motion to reconsider based on due process is denied.
Having found no reason to revisit its prior decision, this Court considers
Flynn’s and Jiménez’s request for an interlocutory appeal. To be entitled to bring an
Flynn and Jiménez repeatedly assert that this Court’s decision leaves PDVSA
and the subsidiaries with a “Hobson’s choice”: (1) risk their assets by following
Venezuelan law that prohibits PDVSA from working with the Ad Hoc Board and its
counsel or (2) violate Venezuelan law by cooperating with the Ad Hoc Board and its
counsel to protect PDVSA’s assets. Docket Item 81 at 2, 8-9. At the same time, they
insist that accepting their due process argument would not require this Court to accept
the Venezuelan Supreme Tribunal of Justice Constitutional Court’s ruling that the
Transition Statute and Ad Hoc Board were unconstitutional and void as a valid act of
state. Id. at 8-9. That is simply incorrect. Flynn’s and Jiménez’s due process argument
hinges on a violation of Venezuelan law based precisely on the Constitutional Court’s
ruling. Therefore, accepting their argument would necessarily require the Court to
accept that ruling as valid. But as previously explained by this Court, it cannot. Docket
Item 78 at 15. Guaidó’s appointment of the Ad Hoc Board and the Transition Statute
were valid acts of state that “must be accepted by this Court as valid,” and judicial
inquiry into Venezuelan law is “neither necessary nor appropriate” under the
circumstances here. See Republic of Panama v. Air Panama Internacional, S.A., 745 F.
Supp. 669, 673 (S.D. Fla. 1988). And the act of state doctrine applies only to official
acts taken by recognized sovereigns—which Maduro and the Constitutional Court are
not, at least in the United States. See Docket Item 78 at 6 n.5, 15.
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interlocutory appeal in federal court, the aggrieved party must show that the appeal
involves a controlling question of law about which there is a substantial ground for
difference of opinion and that an immediate appeal would materially advance the
ultimate termination of the litigation. 28 U.S.C. § 1292(b). But even that may not be
enough: even if these criteria appear to be met, “[d]istrict courts [ ] have independent
and unreviewable authority to deny certification.” Buehlman v. Ide Pontiac, Inc., 268 F.
Supp. 3d 437, 440 (W.D.N.Y. 2017). And that is because “[i]nterlocutory appeals are
strongly disfavored in federal practice.” In re Adelphia Commc’ns Corp., 2008 WL
361082, at *1 (S.D.N.Y. Feb. 7, 2008); see Westwood Pharm., 964 F.2d at 89 (“[W]e
urge the district courts to exercise great care in making a § 1292(b) certification. For
after all, the district courts are presumed to be more familiar with a case than is the
court of appeals prior to briefing and argument.”)
Here, Flynn and Jiménez have not demonstrated that there is substantial ground
for a difference of opinion. They argue that the issues in the motion to substitute are
particularly difficult and of first impression. Docket Item 81 at 10. But “the mere fact
that a disputed issue is a question of first impression is insufficient to demonstrate
substantial grounds for a difference of opinion.” N.F.L. Ins. Ltd. By Lines v. B&B
Holdings, Inc., 1993 WL 255101, at *2 (S.D.N.Y. July 1, 1993). What is more, the
political question and act of state doctrines are well-settled principles of law, this Court
carefully applied them, and the application of well-settled principles of law does not
amount to good reason for an interlocutory appeal. See, e.g., In re MTBE Prod. Liab.
Litig., 2005 WL 39918, at *2 (S.D.N.Y. Jan. 6, 2005).
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In fact, aside from their assertion that this issue is one of first impression and
difficult to resolve, Flynn and Jiménez provide no substantial basis to doubt this Court’s
prior decision. Their argument is little more than disagreement with this Court’s prior
order and doubling down that this Court’s previous ruling was incorrect. See, e.g.,
Docket Item 89 at 8-9 (“The act of state doctrine does not apply here because the
outcome of this case does not turn upon the effect of official action by a foreign
sovereign. . . . [T]he Impact Fluid Solutions [v. Bariven, No. 4:19-cv-652, Docket Item 55
(S.D. Tex. May 20, 2020)] decision is in direct conflict with the Supreme Court’s holding
in Kirkpatrick.”). But “[a] claim that the district court's opinion was incorrect does not,
standing alone, support a finding of a substantial ground for a difference of opinion.”
N.F.L. Ins. Ltd. By Lines, 1993 WL 255101, at *2.
Moreover, contrary to their assertion, Flynn and Jiménez have not shown that an
immediate appeal may materially advance the ultimate termination of this case and
avoid protracted litigation. They argue that an interlocutory appeal would better
advance the litigation because they and those who retained them, not White & Case
and the Ad Hoc Board, have control of and access to PDVSA’s operations, documents,
and witnesses. Docket Item 81 at 10. But as this Court observed in its prior order,
“White & Case . . . is ‘ready, willing, and able to mount a full-throated defense of [its
clients’] interests in this action.’” Docket Item 78 at 17 (alteration in original) (quoting
Docket Item 67 at 2). And as noted above, whoever has de facto control over PDVSA’s
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operations and documents can—either directly or through counsel it has chosen—
provide access to the attorneys that the Court has authorized to handle the case. 9
Therefore, this Court declines to certify its order granting substitution of counsel
for interlocutory appeal.
The Court recognizes that the realities of the political situation in Venezuela
may present obstacles to the Ad Hoc Board’s access to PDVSA’s operations and
documents. But that does not change the fact that this problem is of Maduro’s and
PDVSA’s own making and that it might be resolved in this case by cooperation between
the United States lawyers chosen by each of the dueling factions. Nor does it permit
this Court to ignore the fact that the Executive Branch has recognized Guaidó and that
the Ad Hoc Board’s appointment therefore was a valid act of state. And as for practical
considerations based on political realities, the Court must assume “that the President
was apprised of and counseled on the practical ramifications of recognizing the Guaidó
[g]overnment, including those presented in this motion.” Bariven, No. 4:19-cv-652,
Docket Item 55 at 14 (“This Court, nor any other court for that matter, is simply not
situated to determine the proper balance of the practical considerations . As the
Supreme Court has explained, ‘most federal judges [do not] begin the day with briefings
that may describe new and serious threats to our Nation and its people.’ Boumediene
v. Bush, 553 U.S. 723, 797 (2008). Members of the Executive Branch do.”).
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Because Flynn and Jiménez have failed to demonstrate the exceptional and rare
circumstances that would justify reconsideration or an interlocutory appeal, their motion
to reconsider this Court’s May 11, 2021 order, or, in the alternative, to certify that order
for interlocutory appeal, Docket Item 81, is DENIED.
Dated: January 7, 2022
Buffalo, New York
/s/ Lawrence J. Vilardo
LAWRENCE J. VILARDO
UNITED STATES DISTRICT JUDGE
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