United States v Real Property Located at 7505 and 7171 Forest Lane, Dallas, Texas 75230 - District Court, S.D. Florida Case No 1-20-cv-23278 (Optima Ventures) - Claimant's Reply in Support of Motion to Dismiss (Consolidated Case No 1-20-Cv-23279, includes Delaware Chancery Court - Memorandum Opinion) - 25 April 2022
Claimants demonstrated in their Brief that principles of international comity apply to the United States' claims and require this Court to abstain from considering this matter in light of Ukraine-based parallel proceedings and judgments addressing the same fundamental issues in dispute. In its Opposition, the United States contends, without any basis in law or fact, that these Ukrainian proceedings and judgments do not matter and should be given no weight by this Court.
The United States is wrong, and this Court should abstain.
First, in arguing that the Ukrainian litigations are not parallel proceedings because they allegedly do not involve substantially the same facts and parties, the United States ignores that the Ukrainian litigations focus on the core issue here: whether the Ukrainian loans at the heart of the United States' claims were valid and legitimate or the product of fraud. All of the United States' claims are premised on the allegation that the proceeds used to acquire PNC Plaza ultimately came from the NZF and ZFZ Loans, which the United States asserts were fraudulently obtained in violation of Ukrainian law. The rulings in the NZF and ZFZ Judgments--which confirmed that the NZF and ZFZ Loans were entirely valid and lawful, bear directly on, and indeed disprove, the United States' claims. The Ukrainian court that issued the NZF Judgment addressed and rejected the United States' allegations that the NZF Loan was fraudulently obtained.
Second, the United States has it backwards in arguing it would be unprecedented for this Court to abstain from this case. What is unprecedented here is not Claimants' motion to dismiss but rather the United States' determination to pursue civil forfeiture claims based on allegations that have been adjudicated and rejected by a competent foreign tribunal. The United States does not and cannot point to a single instance in which a court allowed the United States to ignore directly applicable foreign judgments in pursuit of a civil forfeiture claim. This Court should not be the first to permit the United States to engage in such overreach, and the Verified Complaint should be dismissed on grounds of abstention based on international comity.
Third, this Court should reject the United States' innuendo and insinuation suggesting Ukrainian courts are somehow flawed such that their judgments and/or proceedings are not worthy of deference. The United States offers absolutely no evidence to support this insulting characterization, and its apparent reliance on "questions" supposedly raised by PrivatBank in a Delaware case does not provide any basis to ignore the NZF (or any other Ukrainian) Judgment.
In fact, the Delaware court stayed PrivatBank's lawsuit in favor of the parallel Ukrainian proceedings, and found that in issuing judgments the Ukrainian courts considered the "evidence, including `detailed accounting source documents regarding the exact purpose for which the loan proceeds were used' and `bank statements and other official documents' confirming repayment." Ex. 1 at 15. The United States' cheap-shot characterization of a Ukrainian decision it does not like as an instance of a Ukrainian judge "obliging" one of the litigants--as opposed to a judgment issued after the court conducted a proper analysis of the law and facts--is gratuitious vilification of Ukraine's courts that is no substitute for proper legal argument and analysis.
Finally, the United States fails to rebut Claimants' arguments that (i) prospective comity applies because of Ukraine's predominant interest in governing conduct in its territory, by its nationals, against its most important bank; (ii) prescriptive comity requires this Court to interpret the statutes under which the United States intends to proceed to avoid interfering with Ukraine's sovereign right to police itself and its people; and (iii) the Verified Complaint should be dismissed because the United States does not adequately trace the purportedly illicit funds through to the acquisition of PNC Plaza.
For the reasons set forth in Claimants' Brief, and as set forth below, this Court should abstain from hearing this matter and dismiss the Verified Complaint in its entirety.