Federal Circuit remands case
to redetermine applicability of Reciprocity Act to Federal Claims Court suits
brought by residents of Cuba because U.S. government’s 1963 embargo had
suspended payment of their pensions for World War II service
Several Cuban nationals who had
served in the U.S. armed forces during World War II and their surviving spouses
brought an action in the U.S. Court of Federal Claims to obtain pension
benefits under the Civil Service Retirement System from the U.S. Government.
They had been regularly getting retirement annuity checks from the U.S. until a
letter from the U.S. Treasury Department (USTD) arrived in 1963.
Part of the Cuban embargo
program, it declared that the USDT had “determined that there is no reasonable
assurance that a payee living in Cuba will actually receive United States
Government checks or be able to negotiate them for full value. Therefore, since
the United States Treasury Department Regulations now prohibit payments to
persons residing in Cuba, Civil Service annuity payments are being suspended.”
The referenced regulations were the Cuban Asset Control Regulations at 31 C.F.R.
Part 515 (1963).
The Reciprocity Act (the Act) [28
U.S.C. Section 2502(a); originally Act of July 27, 1868, Section 2, 15 Stat.
243.] generally limits the jurisdiction of the Court of Federal Claims over
actions against the U.S. brought by aliens. It does, however, allow these suits
to the extent that the alien’s home country would let U.S. citizens bring
similar suits against that government in the alien’s home tribunals.
The current Act provides in part
that: “Citizens or subjects of any foreign government which accords to citizens
of the United States the right to prosecute claims against their government in
its courts may sue the United States in the Court of Claims if the subject
matter of the suit is otherwise within such court’s jurisdiction.” (In 1992,
Congress updated the lower Court’s title to “U.S. Court of Federal Claims.”)
As evidence of reciprocity under
the Act, plaintiffs submitted an affidavit of Jorge Cobask. He was a Cuban
attorney who had represented U.S. citizens in actions against the Cuban
government. It put U.S. citizens on an equal footing with Cuban citizens in
suing that government.
Supporting the defense side, the
U.S. Department of State (DOS) issued a judicially requested opinion letter
declaring that “any right of a U.S. citizen to pursue a claim against the Cuban
government in Cuban courts is subject to the political interference of the
Cuban government and, thus, there are serious impediments to the ability of a
U.S. citizen to pursue effectively a lawsuit against the Cuban government.”
Based solely on the DOS’s
opinion, the court dismissed the action for lack of subject matter jurisdiction
under the Act. The court also noted that it considered the total quantum of
evidence put in by the parties “wholly inadequate.” Plaintiffs duly appealed.
The U.S. Court of Appeals for the Federal Circuit vacates and remands.
When judicial reciprocity under
the Act is at issue, the first question is whether the foreign court treats
U.S. citizens differently from local citizens when they sue their foreign
sovereign. In the Court’s view, the mere political oversight of foreign courts,
or the fact that a foreign sovereign has not consented to the same kind of
suits that U.S. law allows against the U.S. government, does not necessarily
preclude a finding of reciprocity under the Act.
The Circuit Court sees the DOS’s
opinion as not enough, without more, to show the absence of reciprocity. “The
ultimate conclusion of the State Department opinion is grounded on little more
than an assertion of political interference. The document observes that Cuban
lawyers are under the same pressures as Cuban judges to refrain from acting
against the interests of their government, and consequently, are deterred from
rendering favorable assistance to American citizens. It also states that there
are some $6.3 billion in outstanding claims for compensation against the Cuban
government for property it has appropriated from the United States and its
citizens since the administration of Fidel Castro came to power in 1959. ...”
“While this evidence reveals a
Cuban judicial system that may not be very fair, it does not, in and of itself,
buttress a finding of no reciprocity. Absent additional findings that Cuban
citizens are excused from shouldering the aforementioned disabilities along
with American citizens, the State Department opinion cannot, as a matter of
law, serve as the sole basis for the lower court’s dismissal.”
“For example, the State
Department opinion does not indicate whether or not the Cuban system offers the
same disincentives to Cuban lawyers to file claims against the Cuban government
when their clients are Cuban nationals. It is impossible to discern whether it
is the client’s nationality or the nature of the suit, i.e., that it is
directed at the government, or some combination of the two, that gives rise to
interference from the Cuban government. ... More was required under the Act to
support the State Department’s determination of no reciprocity.” [Slip op.
19-21] Therefore, the Court remands for a “more complete assessment” of whether
the plaintiffs can meet the requirements of the Reciprocity Act.
Citation: Ferreiro v.
United States, 2003 WL 22862350 (Fed. Cir. Dec. 4, 2003).
**** Mr. Richard Ehrlich is a specialist in Corporate, Estate and Personal Financial Planning in Florida. In the course of his career, he has prepared hundreds of estate plans and helped hundreds of small businesses navigate the various issues involving insurance, retirement and employee retention. He has helped numerous families deal with the difficulties of taking care of elderly relatives and assisted with all of their long-term planning and long-term care needs. Finally, he has helped investors with their losses in unsuitable investments. LinkedIn Profile: https://www.linkedin.com/in/richard-ehrlich-777b513/; Attorney Profile: http://www.eldercounsel.com/profile/richard-ehrlich-ehrlich-law-center-pa/; Attorney Profile: https://solomonlawguild.com/richard-ehrlich%2C-esq; Attorney News: https://attorneygazette.com/richard-ehrlich%2C-esq#c35a1098-f039-43ab-b0dc-06cff6dabf61
