Honduras Expropriation Lawsuit May Be Illustrative For Cuba Libertad Act Lawsuits
/“Investors Can Seek Discovery In Honduras Expropriation Fight
By Enna Whitford
Law360 (July 6, 2020) -- A Florida federal judge on Monday dismissed Honduras' assertion that a magistrate judge erred in allowing a group of nearly 100 U.S. real estate investors to seek discovery on Honduras' sovereign immunity defense to claims that it expropriated their development.
U.S. District Judge Thomas P. Barber said the court did not misapply relevant statutes or case law in May, when it allowed the investors to seek discovery on 12 topics to confirm if Honduras qualifies for a takings exception to the Foreign Sovereign Immunities Act.
U.S. Magistrate Judge Sean P. Flynn's May 22 order was "neither clearly erroneous nor contrary to law," Judge Barber wrote Monday.
Honduras is hoping to skirt the investors' January 2019 claim that the country expropriated their 420-home residential development in the northern city of San Pedro Sula.
The investors allege that the government of Honduras backed thousands of squatters who surrounded the development starting in 2012, effectively halting construction and tanking home sales. This amounts to the unlawful taking of an asset belonging to U.S. citizens, an FSIA exception, according to the complaint.
In June objections to Judge Barber's order, Honduras dismissed the discovery request as overbroad. "The order improperly granted plaintiffs' motion for jurisdictional discovery on twelve general topics despite the plaintiffs' inability to identify any specific 'crucial' fact required to establish jurisdiction," Honduras said.
The plaintiffs countered in a response that Judge Flynn's order was carefully considered. "Despite having issued a nine-page order summarizing the complaint's allegations, reviewing the applicable case law, and dismissing defendants' arguments against granting any discovery, defendants blithely claim that the magistrate judge accepted plaintiffs' request 'without analysis,'" the investors said.
Reached for comment Monday, counsel for the investors celebrated the discovery order. "The plaintiffs believe that this discovery will further cement their allegations that the Republic of Honduras expropriated their investment," said Carlos Gonzalez of Alvarez Gonzalez Menezes LLP. "While FSIA litigation presents countless challenges for any plaintiff, today's ruling provides my clients with an important tool to overcome Honduras' claim that it is immune from jurisdiction in U.S. courts." Counsel for Honduras did not immediately respond to requests for comment.
The investors — including numerous individuals and estates — claimed last year that squatters built homes, roads and made other "improvements" to the surrounding land in San Pedro Sula, creating their own makeshift city. They also alleged the squatters received help from Honduras' national power company, which supplied them electricity, and the state-owned Instituto de Propiedad — the Property Institute.
Honduras countered in a motion to dismiss that there was no taking of the investors' properties, and therefore no FSIA exception. The squatters only occupied land adjacent to the investors' development, Honduras said.
The real estate investors are represented by Ignacio M. Alvarez and Carlos F. Gonzales of Alvarez Gonzalez Menezes LLP.
Honduras is represented by Juan C. Basombrio and Mark S. Sullivan of Dorsey & Whitney LLP and Robert K. Jamieson of Wiand Guerra King PL.
The case is Agurcia et al. v. Republic of Honduras, case number 8:19-cv-00038, in the U.S. District Court for the Middle District of Florida.”
LINK To Order Overruling Defendants’ Objection To May, 22, 2020
