Castanedo Escalon v. Trafigura Trdg ( 2023 )

Case: 23-20191 Document: 00516956633 Page: 1 Date Filed: 11/03/2023
United States Court of Appeals
for the Fifth Circuit
United States Court of Appeals
Fifth Circuit
____________ FILED
November 3, 2023
No. 23-20191 Lyle W. Cayce
Summary Calendar Clerk
____________
Hilda M. Castanedo Escalon; Estate of Hilda
Castanedo; Estate of Emma Diaz,
Plaintiffs—Appellants,
versus
Trafigura Trading L.L.C.; Trafigura Group Pte Limited;
Trafigura Pte Limited,
Defendants—Appellees.
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Appeal from the United States District Court
for the Southern District of Texas
USDC No. 4:21-CV-659
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Before Clement, Duncan, and Douglas, Circuit Judges.
Per Curiam:*
Appellants are the estates of two Cuban-American decedents and the
personal representative of those estates—Hilda Castanedo Escalon. They
sued a global commodities-trading company under the Helms-Burton Act, a
statute that creates a private right of action against anyone who traffics in
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*
This opinion is not designated for publication. See 5th Cir. R. 47.5.
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property expropriated by the Castro regime, subject to certain limitations.
One such limitation is that, for any property expropriated prior to March 12,
1996—the date of the statute’s enactment—the U.S. national that owns a
claim to such property must have acquired that claim prior to March 12, 1996.
Here, the Castro regime confiscated the decedents’ property before
March 12, 1996, but the decedents died after March 12, 1996, at which point
their claims to the property immediately transferred to the sole beneficiary of
their estates—Escalon. Accordingly, Escalon alone owns the claims to the
confiscated property, and because she acquired the claim after March 12,
1996, any Helms-Burton Act action based on the confiscated property is
foreclosed. Appellants’ argument that the decedents somehow retained
ownership of the claims to the confiscated property is, therefore, unavailing,
as is Appellants’ motion to certify to the Florida Supreme Court immaterial
questions about precisely when an heir acquires ownership interests and
whether an estate can acquire ownership interests.
Accordingly, we AFFIRM the district court’s judgment and DENY
Appellants’ motion to certify.
I.
A.
In 1961, the Fidel Castro regime expropriated, without compensation,
a mining business belonging to the Diaz family, who resided in Cuba. Shortly
thereafter, in 1962, the Diaz patriarch died, at which point his daughters,
Emma Diaz and Hilda Castanedo, inherited his ownership interests in the
company. Diaz and Castanedo eventually fled Cuba for the United States, as
did Castanedo’s daughter—Escalon. The three became naturalized U.S.
citizens and lived stateside until Diaz and Castanedo passed away in July 1996
and June 2000, respectively, leaving Escalon as the sole beneficiary of their
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estates. Neither Diaz’s nor Castanedo’s will makes any mention of an event
that must occur before their terms vest.
Just before Diaz’s death, Congress passed the Cuban Liberty and
Democratic Solidarity Act (LIBERTAD), also known as the Helms-Burton
Act (“HBA”), 22 U.S.C. § 6021, et seq., which sought to deter the
unauthorized commercial exploitation of property in Cuba. To that end, Title
III of the HBA created a private right of action against “any person that . . .
traffics in property which was confiscated by the Cuban Government”
without authorization from the U.S. national who owns the claim to such
property. 22 U.S.C. § 6082(a)(1)(A). A person “traffics” in this context if
he or she “engages in a commercial activity using or otherwise benefiting
from confiscated property,” or “directs,” “participates in,” or “profits
from” another person’s trafficking. Id. § 6023(13)(A). Crucially, the HBA
also provides that, if the property in question was “confiscated before March
12, 1996,” the “United States national who owns the claim to such property”
may “bring an action under [Title III]” only if “such national acquires
ownership of the claim before March 12, 1996.” Id. § 6082(a)(4)(B).
Title III also authorizes the President to suspend the private right of
action for six-month increments, however, if doing so serves U.S. national
interests. See id. § 6085(c)(1)(B), (c)(2). Upon the HBA’s enactment,
President Clinton suspended the cause of action, and his successors
continued to do so until May 2, 2019, when President Trump lifted the
suspension. Garcia-Bengochea v. Carnival Corp., 57 F.4th 916, 919–20 (11th
Cir. 2023). To date, President Biden has not reinstituted the suspension, so
Title III’s private right of action remains available to qualified parties. Id.B.
In 2019, Escalon, through counsel, sent several pre-litigation letters
threatening a Title III claim against the Trafigura Group. Trafigura operates
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a global commodities-trading business, including a mining operation
conducted through a joint venture with the Cuban government that uses
property formerly possessed by the Diaz family. In response to the pre-
litigation letters, Trafigura supposedly advised Escalon of a fatal defect in her
Title III claim, namely that it was untimely because Escalon had not acquired
ownership of the claim until after March 12, 1996.
In July 2020—two decades after Castanedo and Diaz died—Escalon
went to Florida probate court where she petitioned to admit Castanedo’s and
Diaz’s wills to probate and to qualify as the estates’ personal representative.
Escalon listed as each estate’s sole asset a “[r]ight to pursue a cause of action
pursuant to [the Helms-Burton Act].”1 The Miami-Dade County Probate
Court admitted the wills to probate and appointed Escalon as the personal
representative of Castanedo’s and Diaz’s (hereinafter “Decedents”) estates.
Shortly thereafter, Escalon’s counsel contacted Trafigura to say that they
now had “a very different case than what [they had] presented” in 2019
because the purported claimants were now “the Estates of Hilda Castanedo
. . . and Emma Diaz” rather than Escalon herself.
Then, Decedents’ estates and Escalon—solely in her capacity as
representative of the estates—brought suit in the United States District
Court for the Southern District of Texas.2 Appellants named as Defendants
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1
Appellants appear at times to conflate “claim” in the property sense (i.e., an
ownership interest in some property that one can assert) and “claim” in the cause-of-action
sense. Here, Florida wills-and-estates law governs the question of who owns a claim to the
confiscated property, and federal law—the HBA and interpretive case law—governs the
question of who is qualified to bring a Title III action and under what circumstances. One
can have a claim to property without being entitled to bring an HBA claim, and the mere
fact that one lists a right to sue as an asset of an estate does not make it so.
2
We note that estates lack the capacity to sue in this instance. See Fed. R. Civ.
P. 17(b)(3) (the law of the state of forum court governs whether estates have the capacity
4
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three Trafigura entities.3 They alleged that Trafigura was trafficking in
property that the Cuban government had confiscated and thus brought a
Title III action as well as a civil-conspiracy claim against Trafigura. Trafigura
moved to dismiss on multiple grounds, including lack of personal jurisdiction
over two of the sued entities, lack of injury traceable to the third entity, failure
to plead actual ownership interests in the confiscated property or knowing
and intentional trafficking, and failure to state a civil-conspiracy claim.
Trafigura also argued that the Title III claim was untimely because any right
to the confiscated property would have vested either in Escalon personally or
the estates themselves upon Castanedo’s and Diaz’s deaths, both of which
occurred after March 12, 1996.
The district court granted Trafigura’s motions to dismiss, holding
that, under Florida law, “any rights [that Castanedo and Diaz] had to the
Confiscated Property vested in Escalon on the dates of their deaths.” And
because Escalon had this vested right upon the testators’ deaths, the estates
lacked any “ownership interest in the Confiscated Property.” The trial court
further reasoned that, even if Castanedo’s and Diaz’s ownership interests
had not vested in Escalon upon their deaths, “their purported claims to the
Confiscated Property were not part of their respective Estates before the
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to sue or be sued); Aguirre v. City of San Antonio, 995 F.3d 395, 423 (5th Cir. 2021) (“[A]
deceased’s estate is not a legal entity and may not properly sue or be sued as such.” (citing
Price v. Estate of Anderson, 522 S.W.2d 690, 691 (Tex. 1975))). Nevertheless, Trafigura has
failed, so far as we are aware, to raise the lack-of-capacity defense at any point in this
litigation. Because lack of capacity, unlike standing, is a non-jurisdictional defect, it may be
waived. See Bankston v. Burch, 27 F.3d 164, 167 (5th Cir. 1994). And failure to brief a non-
jurisdictional issue on appeal means waiver thereof. Procter & Gamble Co. v. Amway Corp.,
376 F.3d 496, 499 n.1 (5th Cir. 2004). Thus, Trafigura waived any lack-of-capacity defense,
and we proceed accordingly.
3
Specifically, they sued Trafigura Group PTE Ltd., Trafigura PTE Ltd., and
Trafigura Trading, LLC. The specific nature of these entities and their relationship to
Trafigura generally is not relevant to the instant appeal.
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statutory cutoff” because Diaz and Castanedo died after March 12, 1996. The
district court therefore dismissed the Title III claims and denied
reconsideration.4 Decedents’ estates and Escalon, solely in her capacity as
personal representative of the estates, now appeal and move to certify
questions of law to the Supreme Court of Florida.
II.
We review de novo a district court’s dismissal under Rule 12(b)(6).
Cicalese v. Univ. of Tex. Med. Branch, 924 F.3d 762, 765 (5th Cir. 2019).
Whereas we accept as true all well pleaded facts, construing all reasonable
inferences in the light most favorable to the plaintiff, we do not accept as true
legal conclusions. Heinze v. Tesco Corp., 971 F.3d 475, 479 (5th Cir. 2020).
III.
It is undisputed that Decedents acquired ownership of any claims they
had to the confiscated property prior to March 12, 1996, and retained any
such ownership until their deaths on July 27, 1996, and June 6, 2000. At issue
is (A) whether Escalon later acquired Decedents’ claims to the confiscated
property and (B) if not, whether Decedents’ estates or the personal
representative thereof own the claims to the confiscated property.
A.
Under Florida law, “[t]he death of the testator is the event that vests
the right to devises” unless the will contains language to the contrary. FLA.
STAT. § 732.514. An ownership interest in property constitutes “property”
for purposes of wills and estates. Id. § 731.201(32). And the inheritance of
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4
The district court also dismissed the civil-conspiracy claim because the Title III
claim was “the only underlying claim” that could have supported the derivative tort of civil
conspiracy. The district court thus did not reach the Rule 12(b)(6) basis for dismissal, nor
did it reach the Rule 12(b)(1) basis.
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claims to confiscated property constitutes “acqui[sition]” thereof for
purposes of Title III actions. Glen v. Am. Airlines, Inc., 7 F.4th 331, 336 (5th
Cir. 2021), cert. denied, 142 S. Ct. 863 (2022).5
In Glen, the plaintiff inherited a claim to property that the Cuban
government had confiscated prior to March 12, 1996, upon his aunt’s death
in 1999. Id. at 333–34. We held that, when an individual inherits a claim to
confiscated property after March 12, 1996, that individual has indeed
acquired the claim to such property but is time-barred from bringing a Title
III action under the HBA’s plain text. Id. at 336.
Here, like in Glen, Escalon inherited, and thus acquired, the claims to
the confiscated property upon the decedents’ deaths. Further like in Glen,
those deaths occurred after March 12, 1996, thus rendering untimely any
Title III action based on ownership interests in the confiscated property that
now belong to the inheritor.
Appellants argue that Escalon, as the estates’ personal representative,
“was properly appointed to stand in Emma’s and Hilda’s shoes and bring
their claims as part of the administration of their Estates.” But the Title III
claims are not “their[s]” to bring. Decedents’ wills were executed and
admitted to probate in Florida. Both wills bequeath all property to Escalon,
and neither will states that any event must occur before its terms vest.
Therefore, any rights that Diaz and Castanedo had to the confiscated
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5
We also noted in Glen that every court to address this issue has ruled the same
way. 7 F.4th at 336–37 (collecting cases).
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property vested in Escalon on the dates of their deaths—July 27, 1996, and
June 6, 2000, respectively.6
Nothing in the probate order or Florida law undermines this
inescapable fact. Probating a will has no impact on the vesting of property
rights conveyed therein. See Rice v. Greene, 941 So. 2d 1230, 1231–32 (Fla.
Dist. Ct. App. 2006). Rather, it is simply a means of validating the will for
purposes of enforcement. Id. And appointing a representative is simply a
means of administering the distribution of the estate’s assets, which must be
done consistent with the will’s text, where applicable, and the relevant law.
Thus, under the HBA and Glen, (1) Escalon acquired any claims that
Decedents had to the confiscated property on the dates of their deaths, (2)
Escalon alone owns any such claims, and (3) any Title III action concerning
those claims would be time-barred under the HBA’s plain text.
B.
Because we conclude that Escalon alone owns the claims to the
confiscated property, the second question presented—whether Decedents’
estates or their personal representative own the claim to the confiscated
property—is moot. Likewise, the two issues that Appellants moved us to
certify to the Florida Supreme Court—(1) whether an heir acquires
ownership of a decedent’s claim at the date of death, and (2) whether an
estate is capable of acquiring ownership of a decedent’s claim—are
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6
Under Title III, “acquisition” means to “gain possession or control of; to get or
to obtain.” Glen, 7 F.4th at 336 (quoting Acquire, BLACK’S LAW DICTIONARY 29 (11th
ed. 2019)). Even assuming that Appellants are correct that Escalon has not yet technically
acquired the claims to property because probate is ongoing, Appellants’ arguments still fail
because, regardless of the precise date on which Escalon acquires the claims, Escalon alone
is entitled to the ownership interests in the confiscated property, and her acquisition
thereof will necessarily be untimely for purposes of bringing a Title III action.
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immaterial: in light of Decedents’ wills and the applicable law, Appellants do
not, and have never, owned the claims to the confiscated property, so their
Title III action is foreclosed.7
IV.
For the foregoing reasons, we AFFIRM the district court’s grant of
Rule 12(b)(6) dismissal and DENY Appellants’ motion to certify.
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7
We note once again that Escalon is a plaintiff in this action only in her capacity as
personal representative of Decedents’ estates and not in her personal capacity.
9