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Crystallex International Corp. v. Bolivarian Republic of Venezuela

United States District Court, D. Delaware

August 23, 2018

CRYSTALLEX INTERNATIONAL CORPORATION, Plaintiff,
v.
BOLIVARIAN REPUBLIC OF VENEZUELA, Defendant.

          OF COUNSEL: Robert L. Weigel Jason W. Myatt Rahim Moloo GIBSON, DUNN & CRUTCHER LLP.

          Raymond J. DiCamillo, Jeffrey L. Moyer, Travis S. Hunter, RICHARDS, LAYTON & FINGER, P.A., Attorneys for Plaintiff.

          MEMORANDUM ORDER

         Plaintiff/Judgment Creditor Crystallex International Corporation ("Crystallex") holds a $1.2 billion judgment against the Bolivarian Republic of Venezuela ("Venezuela" or "the Republic"). (D.I. 1) Crystallex seeks to collect on its judgment against Venezuela by executing on property nominally owned by Petr6leos de Venezuela, S.A. ("PDVSA"), specifically shares of common stock PDVSA owns in PDV Holding Inc. ("PDVH"), a Delaware corporation. While Venezuela has not appeared in this case, PDVSA intervened. (D.I. 14) On August 9, 2018, the Court issued an Opinion and Order finding that PDVSA is the alter ego of Venezuela, and finding that identified property of PDVSA - that is, the shares it owns of PDVH - is subject to attachment and execution in order to satisfy Venezuela's debt to Crystallex. (D.I. 78, 79) On the same date, the Court ordered letter briefing from Crystallex and PDVSA on how the case should proceed and directed the Clerk of Court not to issue the writ of attachment until the Court issues an additional order. The following day, PDVSA filed a Notice of Appeal to the U.S. Court of Appeals for the Third Circuit. (D.I. 80)

         Having reviewed the August 16 joint letter from Crystallex and PDVSA containing their respective positions on how the case should proceed (D.I. 86), a letter from third parties CITGO Holding, Inc. and CITGO Petroleum Corporation (collectively, "CIGTO") (D.I. 87), a letter from third party Rosneft Trading S.A. ("RTSA") (D.I. 92), and two additional letters from Crystallex responding to CITGO and RTSA, respectively (D.I. 92, 94), IT IS HEREBY ORDERED that:

1. The Clerk of Court is now directed to ISSUE Crystallex's Praecipe. (D.I. 4-1 Ex. 2) (attached)
2. The Clerk of Court shall, pursuant to the Praecipe, thereafter ISSUE to the U.S. Marshals Service the writ of attachment fieri facias. (D.I. 4-1 Ex. 1) (attached)
3. Thereafter, the U.S. Marshals Service shall SERVE the writ of attachment.
4. Execution on the attached property is STAYED until further Order of the Court, which will not be issued until after the Court has the opportunity to consider any additional motions or other input any party, or any third party, wishes to provide. Such motions and briefing shall be submitted in accordance with the following schedule:
A. Any motion, including a motion to stay pending appeal pursuant to Federal Rule of Civil Procedure 62(d), and any other input any party (i.e., Crystallex, Venezuela, PDVSA) wishes to provide, shall be filed no later than seven (7) days after service of the writ.
B. Any motion to intervene, or any other motion or input any third party wishes to provide, shall also be filed no later than seven (7) days after service of the writ.
C. Responses to any filings made pursuant to A or B above shall be due no later than fourteen (14) days after any papers are filed pursuant to A or B above.
D. Replies to any responses shall be due no later than seven (7) days after such responses.

         The Court agrees with Crystallex that, notwithstanding PDVSA's filing of a Notice of Appeal, the Court retains authority to enforce its August 9 Order. (See D.I. 86 at 2) Unless PDVSA files a Rule 62(d) motion for a stay and posts a supersedeas bond, "the Court remains free to issue further orders as needed to enforce the August 9 Order." (Id.) While PDVSA is correct that the Court no longer retains jurisdiction over the issues on appeal (see Id. at 6-7) -those issues being the Court's conclusions that PDVSA's sovereign immunities under the Foreign Sovereign Immunities Act ("FSIA") do not preclude the attachment and execution sought by Crystallex - the Court retains authority to enforce the judgment that is currently on appeal (see Id. at 2).

         "[T]he mere pendency of an appeal does not, in itself, disturb the finality of a judgment. The district court has jurisdiction to act to enforce its judgment so long as the judgment has not been stayed or superseded." N.L.R.B. v. Cincinnati Bronze, Inc.,829 F.2d 585, 588 (6th Cir. 1987) (internal citation, quotation marks, and alteration omitted); see also Lauber v. Belford High Sch., 2012 WL 12994877, at *2 n.4 (E.D. Mich. Aug. 31, 2012) (citing "well established rule that district courts retain jurisdiction, even after a notice of appeal is filed, to enforce an order already issued prior to the filing of the notice of appeal"); 20 Moore's Federal Practice § 303.32(2)(b)(vi) ("Until the district court's judgment is superseded or stayed, the judgment is fully in effect and the district court retains the authority to enforce the judgment."). "If an appeal from an order or judgment divested the district court of jurisdiction to enforce that order or judgment, there would be no point to Rule 62(d) of the Federal Rules of Civil Procedure, which provides for a stay of an appealed order or judgment with the posting of a supersedeas bond."[1]In re Gushlak, 2012 WL 2564523, at *4 (E.D.N.Y. July 2, 2012); see also Brown v. Braddick,595 F.2d 961, 965 (5th Cir. 1979) ("Since Braddick failed to ask the district court for a stay pending appeal and to post supersedeas bond as required by F.R.C.P. ...


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