PDVSA US Litigation Trust v. Lukoil Pan Americas, LLC, No. 19-10950 (11th Cir. 2021)Annotate this Case
In a case involving an alleged multi-billion-dollar conspiracy to defraud the Venezuelan state-owned oil company known as PDVSA, the Trust filed suit alleging that it had authority to do so as an assignee of PDVSA pursuant to a trust agreement which, through a choice-of-law clause, is governed by New York law. The district court adopted in part the report and recommendation of the magistrate judge and dismissed the action without prejudice under Federal Rule of Civil Procedure 12(b)(1) for lack of Article III standing. The district court determined that the Trust did not properly authenticate the trust agreement and, even if the trust agreement were authenticated and admissible, it was void as champertous under New York law.
The Eleventh Circuit assumed without deciding that the Trust made out a prima facie case of authenticity for the trust agreement at the Rule 12(b)(1) proceedings and that the district court erred by ruling that the trust agreement was inadmissible. The court concluded that, based on its review of the record, the district court may have erred procedurally in definitively resolving the question of champerty at the Rule 12(b)(1) stage because that question likely implicated the merits of the Trust's claims. However, the court concluded that the Trust does not make this procedural argument on appeal and therefore has abandoned any procedural obligations to the champerty ruling. On the merits, the court applied the champerty bar to the trust agreement under New York law in light of Justinian Capital SPC v. WestLB AG, 65 N.E.3d 1253, 1255 (N.Y. 2016), and concluded that the Trust's primary purpose in acquiring PDVSA's claims was to bring this action. Accordingly, the court affirmed the dismissal of the complaint.
The court issued a subsequent related opinion or order on March 13, 2023.