Full Opinion (html_with_citations)

                                                                                FILED
                                                                    United States Court of Appeals
                                      PUBLISH                               Tenth Circuit

                      UNITED STATES COURT OF APPEALS                      December 27, 2019

                                                                        Elisabeth A. Shumaker
                             FOR THE TENTH CIRCUIT                          Clerk of Court
                         _________________________________

 ANTONIO CABALLERO,

       Plaintiff - Appellant,

 v.                                                         No. 19-4037

 FUERZAS ARMADAS
 REVOLUCIONARIAS DE COLOMBIA,
 a/k/a FARC-EP, a/k/a Revolutionary
 Armed Forces of Colombia; EJERCITO
 DE LIBERACION NACIONAL, a/k/a
 ELN, a/k/a National Liberation Army;
 THE NORTE DE VALLE CARTEL,

       Defendants - Appellees.
                      _________________________________

                     Appeal from the United States District Court
                               for the District of Utah
                           (D.C. No. 2:17-CV-00315-CW)
                       _________________________________

Submitted on the briefs:*

Bradley R. Helsten, Zumpano Patricios & Helsten, LLC, Holladay, Utah, Joseph I.
Zumpano, Leon N. Patricios, Rossana Baeza, Zumpano Patricios, P.A., Coral Gables,
Florida, on behalf of the Plaintiff-Appellant.
                         _________________________________

Before EID, KELLY, and CARSON, Circuit Judges.


      *
        After examining the briefs and appellate record, this panel has determined
unanimously that oral argument would not materially assist in the determination of
this appeal. See Fed. R. App. P. 34(a)(2); 10th Cir. R. 34.1(G). The case is therefore
ordered submitted without oral argument.
                         _________________________________

KELLY, Circuit Judge.
                         _________________________________

         Antonio Caballero filed the underlying lawsuit in the United States District

Court for the District of Utah seeking a “judgment on a judgment” he had obtained

from a Florida state court. The federal district court registered the Florida state-court

judgment under
28 U.S.C. § 1963
, but denied all other relief because Mr. Caballero

did not establish personal jurisdiction over the defendants. As a result, Mr. Caballero

could not utilize federal district court collection procedures. Mr. Caballero then filed

a motion to alter or amend the judgment, which the district court denied. He appeals

both orders. We exercise jurisdiction under
28 U.S.C. § 1291
, and reverse and

remand for further proceedings.

         I.    BACKGROUND

         Mr. Caballero sued the defendants in Florida state court, where he obtained a

judgment for over $190 million. He then filed the underlying action in Utah federal

court alleging that the defendants are Colombian drug traffickers who kidnapped,

tortured, and killed his father to facilitate their trafficking and distribution of illicit

drugs. The federal complaint further alleged that the defendants, through their agents

and representatives, were trafficking millions of dollars of illicit drugs into and

through Utah and, further, that their “vicious and vile acts against [Mr. Caballero]

and his family were a necessary component part of this scheme.” Aplt. App. Vol. 1,

at 10.


                                              2
      Mr. Caballero requested a “judgment on a judgment” to have the federal court

enter a judgment and authorize collection procedures. His complaint asserted that he

“expects to proceed against assets located in Utah pursuant to the Terrorism Risk

Insurance Act of 2002, [
Pub. L. No. 107-297, § 201
(a),
116 Stat. 2322
, 2337,

codified as a note to
28 U.S.C. § 1610
 (TRIA)], and to take discovery as to assets

owned by the Defendants or their agencies and instrumentalities.”
Id. at 9
. He

served the defendants with process in the federal suit; none of the defendants

answered or otherwise participated in the Utah federal action.

      The district court registered the judgment under
28 U.S.C. § 1963
, despite

Mr. Caballero’s request to enter a “judgment on a judgment” pursuant to
28 U.S.C. § 1738
, and denied all other relief, holding that he had not demonstrated personal

jurisdiction over the defendants. Mr. Caballero filed a motion to alter or amend the

judgment pursuant to Fed. R. Civ. P. 59(e), seeking to have the court enter a new

federal judgment. The district court denied the motion. Mr. Caballero appeals,

arguing that § 1963 is limited to registration of a federal judgment in another federal

court, and he is entitled to a new judgment, which would allow him to use collection

remedies.

      II.    JURISDICTION AND STANDARDS OF REVIEW

      “Federal courts are courts of limited jurisdiction, possessing only that power

authorized by Constitution and statute.” Gunn v. Minton,
568 U.S. 251, 256
 (2013)

(internal quotation marks omitted). “Federal subject matter jurisdiction is elemental,

and must be established in every cause under review in the federal courts.” Safe

                                           3
Streets All. v. Hickenlooper,
859 F.3d 865, 878
 (10th Cir. 2017) (brackets and

internal quotation marks omitted). The party invoking a federal court’s jurisdiction

bears the burden of establishing subject-matter jurisdiction.
Id.
 “A court lacking

jurisdiction cannot render judgment but must dismiss the cause at any stage of the

proceedings in which it becomes apparent that jurisdiction is lacking.”
Id.
 (internal

quotation marks omitted).

      “Questions of statutory interpretation . . . are pure questions of law that we

review de novo.” May v. Segovia,
929 F.3d 1223, 1227
 (10th Cir. 2019). We also

review de novo the legal question of jurisdiction. TransAm Trucking, Inc. v. Fed.

Motor Carrier Safety Admin.,
808 F.3d 1205, 1210
 (10th Cir. 2015). “We review

rulings on Rule 59(e) motions for an abuse of discretion. A court abuses its

discretion when basing its decision on an erroneous legal conclusion.” Nelson v. City

of Albuquerque,
921 F.3d 925, 929
 (10th Cir. 2019) (citation omitted).

   III.      DISCUSSION

   A. Section 1963

      The district court registered the Florida state-court judgment under
28 U.S.C. § 1963
, which provides:

      A judgment in an action for the recovery of money or property entered in
      any court of appeals, district court, bankruptcy court, or in the Court of
      International Trade may be registered by filing a certified copy of the
      judgment in any other district or, with respect to the Court of International
      Trade, in any judicial district, when the judgment has become final by
      appeal or expiration of the time for appeal or when ordered by the court that
      entered the judgment for good cause shown. . . . A judgment so registered
      shall have the same effect as a judgment of the district court of the district
      where registered and may be enforced in like manner.

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       Federal courts disagree on whether a state-court judgment may be registered in a

federal district court under § 1963. The Seventh Circuit has held that § 1963 does not

prohibit removal of a state-court judgment to federal court if other requirements for

federal jurisdiction are met. GE Betz, Inc. v. Zee Co.,
718 F.3d 615, 625
 (7th Cir. 2013).

In reaching this conclusion, the court determined that “[r]eading a bar against the

enforcement of state-court judgments by federal courts requires reading additional words

into § 1963 that are not there.” Id. at 624; but see id. at 623-24 (listing “a host of district

court decisions” holding that § 1963 does not authorize a federal court to register a state-

court judgment (collecting cases)).

       In contrast, the Second Circuit found support in § 1963 itself for its view that a

new court action must be filed to enforce a judgment entered by a non-federal court.

Mobil Cerro Negro, Ltd. v. Bolivarian Republic of Venezuela,
863 F.3d 96, 99

(2d Cir. 2017). “‘By its express terms § 1963 applies only to registration of federal-

court judgments in another federal court.’” Id. at 123 (quoting Caruso v. Perlow,
440 F. Supp. 2d 117, 118
 (D. Conn. 2006)) (brackets omitted); see also, e.g., Fox

Painting Co. v. NLRB,
16 F.3d 115, 117
 (6th Cir. 1994) (finding “unambiguous”

§ 1963’s language specifying the courts whose judgments can be registered in federal

district courts)1; Euro-Am. Coal Trading, Inc. v. James Taylor Mining, Inc.,
431 F. 1
        Although Fox Painting was announced before the 1996 amendment to
§ 1963, which added the courts of appeals and the bankruptcy courts as courts whose
judgments can be registered in another jurisdiction, see Federal Courts Improvement
Act of 1996,
Pub. L. No. 104-317, 110
 Stat. 3847, the amendment does not detract
from Fox Painting’s determination that § 1963’s “language is unambiguous.”
16 F.3d at 117
.
                                               5
Supp. 2d 705, 708 (E.D. Ky. 2006) (“[T]he registration procedures of
28 U.S.C. § 1963
 contain jurisdictional limitations that prohibit federal courts from registering

state court judgments.”)

       We join the courts holding that § 1963 applies only to registration of federal-

court judgments in federal courts—not to state-court judgments. Consequently, we

reverse the district court’s judgment registering the Florida state-court judgment in

Utah federal court.

   B. Section 1738

       We next consider Mr. Caballero’s position that
28 U.S.C. § 1738
 provides a

jurisdictional basis for granting him a “judgment on a judgment.” We conclude that

it does not.

       As relevant here, § 1738 provides:

       Such Acts [of state legislatures], records and judicial proceedings or copies
       thereof, so authenticated [as described herein] shall have the same full faith
       and credit in every court within the United States and its Territories and
       Possessions as they have by law or usage in the courts of such State,
       Territory or Possession from which they are taken.
   Section 1738 is a rule of decision, not an independent basis of jurisdiction.

“[T]he Full Faith and Credit Clause, in either its constitutional or statutory

incarnations, does not give rise to an implied federal cause of action.” Thompson v.

Thompson,
484 U.S. 174, 182
 (1988) (citing Minnesota v. N. Sec. Co.,
194 U.S. 48, 72
 (1904)). In other words, Ҥ 1738[] has no bearing on the question of whether a

district court has subject matter jurisdiction to hear a claim.” Vera v. Republic of

Cuba,
867 F.3d 310, 320
 (2d Cir. 2017); accord Adar v. Smith,
639 F.3d 146
, 157

                                             6
(5th Cir. 2011) (en banc) (holding the Full Faith and Credit Clause “affords a rule of

decision in state courts”). Therefore, Mr. Caballero cannot rely on § 1738 to supply

federal subject-matter jurisdiction.

   C. TRIA

       Because Mr. Caballero may not register the Florida state-court judgment in

federal district court under § 1963, and § 1738 does not provide a basis for federal

jurisdiction, he was required to file a new action in federal district court and establish

federal subject-matter jurisdiction over the new action. Although Mr. Caballero filed

a new action, he did not demonstrate that the federal district court had subject-matter

jurisdiction.

       Mr. Caballero’s civil cover sheet filed in the district court indicates that the

basis of jurisdiction is a federal question. Aplt. App. Vol. 1, at 16.
28 U.S.C. § 1331

provides that federal district courts “shall have original jurisdiction of all civil

actions arising under the . . . laws . . . of the United States.” In his complaint,

Mr. Caballero stated that he “expects to proceed against assets located in Utah

pursuant to the [TRIA], and to take discovery as to assets owned by the Defendants

or their agencies and instrumentalities.” Aplt. App. Vol. 1, at 9. His opening brief

on appeal also relies on § 1331 and the TRIA for jurisdiction. Aplt. Br. at 1.

       The TRIA reads as follows:

              Notwithstanding any other provision of law, . . . in every case in which
       a person has obtained a judgment against a terrorist party on a claim based
       upon an act of terrorism, or for which a terrorist party is not immune under
       section 1605(a)(7) of title 28, United States Code, the blocked assets of that
       terrorist party (including the blocked assets of any agency or instrumentality of

                                             7
         that terrorist party) shall be subject to execution or attachment in aid of
         execution in order to satisfy such judgment to the extent of any compensatory
         damages for which such terrorist party has been adjudged liable.
Pub. L. No. 107-297, § 201
(a),
116 Stat. 2322
, 2337, codified as a note to
28 U.S.C. § 1610
.

         “The TRIA provides courts with subject matter jurisdiction over post-judgment

execution and attachment proceedings” where the plaintiff has complied with the

TRIA’s requirements. Vera,
867 F.3d at 321
. A judgment creditor may establish

federal subject-matter jurisdiction to attach a defendant’s property by satisfying the

showing required by the TRIA: “(1) [the defendant] is a ‘terrorist party,’ and (2) its

assets are ‘blocked assets.’” Kirschenbaum v. Assa Corp.,
934 F.3d 191, 198
 (2d Cir.

2019).

                TRIA defines ‘blocked assets’ as any asset seized or frozen by the
         United States under section 5(b) of the Trading With the Enemy Act . . . or
         under sections 202 and 203 of the International Emergency Economic
         Powers Act . . . . Assets are blocked when the United States Department of
         the Treasury Office of Foreign Assets Control . . . designates the owner of
         the assets as a Specially Designated Narcotics Trafficker . . . .

Stansell v. Revolutionary Armed Forces of Colombia,
771 F.3d 713, 723
 (11th Cir.

2014) (internal quotation marks omitted); see also United States v. All Funds on

Deposit with R.J. O’Brien & Assocs.,
783 F.3d 607, 615
 (7th Cir. 2015) (“[P]er

TRIA’s text, victims of terror may only execute on ‘blocked’ funds.”). In addition,

“[i]f the party wishes to execute against the assets of a terrorist party’s agency or

instrumentality, the party must further establish that the purported agency or

instrumentality is actually an agency or instrumentality.” Stansell,
771 F.3d at 723


                                              8
(internal quotation marks omitted); see also
id. at 724
 (noting that the Foreign

Sovereign Immunities Act provides the definition of “agency or instrumentality of a

foreign state” (citing
28 U.S.C. § 1603
(b))).

      Applying these principles to Mr. Caballero’s complaint, we determine that it

did not establish subject-matter jurisdiction under the TRIA. The complaint did not

specifically allege that the defendants are “terrorist parties.” Nor did it allege that

the defendants’ assets are “blocked” as that term is defined in TRIA. As for alleging

that the purported agency or instrumentality is actually an agency or instrumentality,

the complaint included a section defining the defendants’ “agents and

instrumentalities” under the TRIA, and stated that Mr. Caballero intended to execute

on the Florida state-court judgment against the defendants or their agents and

instrumentalities. Aplt. App. Vol. 1, at 12-14.

      Mr. Caballero attached the Florida state-court judgment to his complaint. The

Florida state court determined that all three defendants were “narco-terrorist

organization[s],”
id. at 19
, the defendants’ assets were “‘blocked’ . . . as defined by

TRIA,”
id. at 41
, and the defendants acted through many “agents and

instrumentalities,” a list of which the Florida court appended to its judgment,
id. at 30-31
. Thus, it appears that Mr. Caballero may be able to establish federal subject-

matter jurisdiction under the TRIA if he is permitted to amend his complaint.

Consequently, on remand, the district court should permit him the opportunity to

amend the complaint.



                                            9
      IV.    CONCLUSION

      The district court’s judgment is reversed and this matter is remanded for

further proceedings consistent with this opinion.




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