Moreira v. Societe Generale, S.A.

JUAN B. PUJOL MOREIRA, in his personal capacity and as Personal Representative and Administrator of the ESTATE OF NIEVES PUJOL a/k/a NIEVES MOREIRA MARTINEZ et al., Plaintiffs, v. SOCIETE GENERALE, S.A. et al., Defendants.

No. 20-CV-9380 (JMF)

United States District Court, S.D. New York

January 23, 2023

OPINION AND ORDER

JESSE M. FURMAN, United States District Judge

The heirs of former owners of Banco Pujol - a Cuban bank confiscated by the Castro regime in 1960 and absorbed into Banco National de Cuba (“BNC”) - bring this suit against two French banks, Societe Generale, S.A. (“SG”) and BNP Paribas, S.A. (“Paribas”), for “trafficking” their confiscated assets by doing business with BNC, in violation of Title III of the Cuban Liberty and Democracy Solidarity Act of 1996, 22 U.S.C. § 6021 et seq., commonly known as the Helms-Burton Act. In an earlier Opinion and Order, the Court dismissed Plaintiffs' claims on the ground that they were barred by Section 6084 of the Helms-Burton Act, which provides that an action for trafficking “may not be brought more than 2 years after the trafficking giving rise to the action has ceased to occur.” 22 U.S.C. § 6084; see Moreira v Societe Generale, S.A., 573 F.Supp.3d 921 (S.D.N.Y. 2021) (ECF No. 60). Thereafter, Plaintiffs filed the operative Second Amended Complaint. ECF No. 67 (“SAC”). Defendants now move again, pursuant to Rule 12(b) of the Federal Rules of Civil Procedure, to dismiss. For the reasons that follow, the Court concludes that Plaintiffs' Second Amended Complaint fails to remedy the timeliness problems that doomed their claims against SG. The Court reserves judgment as to the claims against Paribas pending further briefing.

BACKGROUND

The Court described the relevant background in its prior Opinion and Order, see Moreira, 573 F.Supp.3d at 924-25 familiarity with which is presumed. Accordingly, the Court provides here only a short overview before turning to Plaintiffs' new allegations in the Second Amended Complaint, which - to the extent they are well pleaded - are assumed to be true for purposes of this motion, see e.g., Kleinman v. Elan Corp., 706 F.3d 145, 152 (2d Cir. 2013).

When Plaintiffs first brought this suit, they alleged that SG and Paribas trafficked their confiscated assets by operating credit facilities that made U.S. dollar-denominated loans to BNC. See Moreira, 573 F.Supp.3d at 925. Significantly, however, Plaintiffs explicitly alleged that Paribas operated its credit facilities from 2000 to 2010 and that SG operated its facilities from 2004 to 2010. See id. at 928. As for the period after 2010, Plaintiffs alleged only that Defendants “continue[d]” to operate “in substantially the same manner” as before (albeit through Euro-denominated credit facilities). Id. at 928-29. In dismissing Plaintiffs' claims the Court concluded that their allegations about Defendants' post-2010 conduct were conclusory and thus insufficiently pleaded and that Plaintiffs' allegations about Defendants' pre-2010 conduct, although sufficiently pleaded, were not enough to avoid Title III's two-year statute of repose. Id. at 928-30. The Court expressed skepticism about Plaintiffs' ability to address these problems, but it nevertheless granted them leave to amend “with the benefit of” its Opinion. Id. at 934.

The Second Amended Complaint includes new allegations in an attempt to demonstrate that each Defendant's conduct continued into the two-year repose period. As to SG, the Second Amended Complaint includes only one new such allegation: that SG trafficked their assets until at least mid-2019 by “providing Cuban entities access to foreign currency,” which “[u]pon information and belief . . . flow[ed] through BNC, which is the primary financial institution with whom foreign companies do business in or with Cuba.” SAC ¶ 40; see also id. ¶ 42 (“[SG] continued, through at least late August or early September 2019, to provide the Cuban government - and, upon information and belief, BNC - access to U.S. dollars and other foreign currency that Cuba and its primary commercial banking arm (BNC) could not themselves access or provide to BNC's clients.”). As to Paribas, the Second Amended Complaint alleges similarly that Paribas transacted with a Cuban military-linked investment firm and other foreign companies that do business in Cuba and that, “[u]pon information and belief, BNC [was] involved in at least some of th[ose] transactions because it is the primary financial institution with whom foreign companies do business in or with Cuba.” SAC ¶ 56. In addition, however, Plaintiffs now allege that, “[a]ccording to a former Paribas compliance officer, Paribas routinely provides to BNC in Switzerland parcels of U.S. currency,” that it did so in 2020, and there is “no reason to believe Paribas stopped.” Id. ¶ 49. “Upon information and belief,” the Second Amended Complaint continues, “BNC uses the U.S. currency provided by Paribas to continue to access international markets and conduct transactions, including on behalf of its clients, that it would not otherwise be able to access or conduct.” Id.; see also id. ¶ 53 (“Through at least 2020, Paribas . . . provided physical U.S. dollars to BNC that BNC need[ed] to operate as a commercial bank but could not itself access or provide to its clients.”).^[1]

DISCUSSION

Defendants advance several arguments in support of dismissal, only two of which the Court discusses here. First, they renew their argument that Plaintiffs' claims are time barred asserting that the new allegations of trafficking within the repose period are not well pleaded. See ECF No. 76 (“Defs.' Mem.”), at 8-14. Second, they contend that the Court lacks personal jurisdiction over them because the only conduct that could support personal jurisdiction is time barred. See id. at 14-18. Under other circumstances, the Court would begin with the latter argument. See, e.g., Sinochem Int'l Co. v. Malay. Int'l Shipping Corp., 549 U.S. 422, 430-31 (2007) (“[A] federal court generally may not rule on the merits of a case without first determining that it has . . . personal jurisdiction[].”); In re Rationis Ents., Inc. of Pan., 261 F.3d 264, 267-68 (2d Cir. 2001). But here, whether there is personal jurisdiction turns in part on whether and to what extent Plaintiffs plausibly allege relevant conduct within the two-year repose period. Accordingly, at least with respect to SG, the Court begins with the timeliness of Plaintiffs' claims. See, e.g., ONY, Inc. v. Cornerstone Therapeutics, Inc., 720 F.3d 490, 498 n.6 (2d Cir. 2013) (“Although we traditionally treat personal jurisdiction as a threshold question to be addressed prior to consideration of the merits of a claim, that practice is prudential and does not reflect a restriction on the power of the courts to address legal issues.” (citations omitted)); Chevron Corp v. Naranjo, 667 F.3d 232, 246 n.17 (2d Cir. 2012) (addressing the merits before personal jurisdiction, noting that the court need not begin with personal jurisdiction where “the personal jurisdictional challenges are based on factual allegations that are, in this early posture, still under development”). The Court will begin Plaintiffs' claims against SG.

A. Plaintiffs' Claims Against SG

As noted, the Second Amended Complaint contains only one pertinent new allegation against SG: that it provided foreign currency to Cuban entities and that, “[u]pon information and belief” the foreign currency must have flowed through BNC because it is “the primary financial institution with whom foreign companies do business in or with Cuba.” SAC ¶ 40.^[2] Defendants argue that this allegation, without more, is conclusory and therefore not well pleaded. See Defs.' Mem. 11-12. The Court agrees. “A litigant cannot merely plop ‘upon information and belief' in front of a conclusory allegation and thereby render it non-conclusory.” See Citizens United v. Schneiderman, 882 F.3d 374, 384 (2d Cir. 2018). In the Second Circuit, pleading on information and belief is generally appropriate only where “the facts are peculiarly within the possession and control of the defendant or where the belief is based on factual information that makes the inference of culpability plausible.” Arista Recs., LLC v. Doe 3, 604 F.3d 110, 120 (2d Cir. 2010) (citations omitted); see Citizens United, 882 F.3d at 384-85. Where neither condition is fulfilled, the allegation is no more than “pure speculation.” Singa v. Corizon Health, Inc., No. 17-CV-4482 (BMC), 2018 WL 324884, at *4 (E.D.N.Y. Jan. 8, 2018); accord Williams v. Calderoni, No. 11-CV-3020 (CM), 2012 WL 691832, at *7 (S.D.N.Y. Mar. 1, 2012).

Neither condition is fulfilled here. First, Plaintiffs' assertion that SG is in “exclusive possession of information and documentation relevant to [the allegations at issue],” New York v. Town of Clarkstown, 95 F.Supp.3d 660 681 (S.D.N.Y. 2015), is hard to square with their reliance on a whistleblower with allegedly intimate knowledge of SG's Cuba-related business, see SAC ¶ 40. Plaintiffs tout the whistleblower as a “Paris-based [SG] employee” with “personal knowledge of the illicit transactions to which SG admitted [in the past].” SAC ¶ 40; Pls.' Opp'n 8. Indeed, it was this very whistleblower who alerted Plaintiffs' counsel to SG's alleged trafficking in the first place. SAC ¶ 40.^[3] Plaintiffs' access to inside information thus distinguishes this case from those they cite in which information-and-belief pleading was found to be proper. See Benjamin v. Consol. Edison Co. of N.Y., Inc., No. 17-CV-1720 (JMF), 2018 WL 1406620, at *2 (S.D.N.Y. Mar. 20, 2018) (finding information-and-belief pleading adequate where, as the defendant conceded, the plaintiff had “no way of knowing” the defendant's testing practices as to other employees); Altman...