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Copelco Capital, Inc. v. Brazilian Consulate General

June 8, 2005

COPELCO CAPITAL, INC, PLAINTIFF/COUNTERDEFENDANT,
v.
BRAZILIAN CONSULATE GENERAL, ET AL, DEFENDANTS/COUNTERCLAIMANTS.



The opinion of the court was delivered by: Vaughn R Walker United States District Chief Judge

ORDER

Before the court is plaintiff Copelco Capital, Inc's (Copelco) motion for an order allowing it to levy the assets of defendant Brazilian Consulate General (Consulate). Doc #169. Consulate filed its opposition to this motion on March 9, 2005. Doc #175. On April 22, 2005, the United States Department of Justice appeared, pursuant to 28 USC § 517, to attend to the interests of the United States by filing a statement in support of Consulate's opposition. Doc #187. The court heard oral argument on May 26, 2005. Very helpful and thoughtful guidance was offered by Copelco's counsel and by Rupa Bhattacharyya, representing the United States. Having carefully considered the arguments of counsel, and the applicable federal law, the court DENIES Copelco's motion.

I.

The court, the parties and the United States are quite familiar with the facts of this case. In July 1997, Consulate acquired a Konica copy machine for use in its San Francisco office. Through a finance lease agreement, Consulate did not have to pay Konica cash for the copier. Konica subsequently assigned the lease to Copelco. Consulate welched on its contract, however, and has failed to make any payments to Copelco pursuant to the lease.

After six years of litigation surrounding Consulate's undiplomatic refusal to honor its contract, on June 18, 2004, Copelco obtained a judgment against Consulate in the amount of $38,750.11. Doc #160. It is worth noting that the actual value of the copier is only $8,196.52; the additional $30,553.59 in Copelco's judgment represents the attorney fees and interest incurred during this rather absurdly prolonged litigation.

After five months and no indication from Consulate that it intended to pay any portion of the judgment, Copelco obtained a writ of execution from the Clerk of this court, submitted the writ to the United States Marshal (Marshal) and requested execution of Consulate's bank account located at the Citibank International Banking Center (Citibank) in San Francisco. Doc #170. The Marshal complied and the Citibank account was levied on November 9, 2004. Subsequently, counsel for Copelco and Consulate apparently agreed that the writ of execution should be recalled for failure to comply with 28 USC § 1610(c), which prohibits attachment or execution until a hearing has been conducted by the court. Accordingly, on December 16, 2004, Copelco voluntarily released the Citibank account. Doc #166, Ex B (Release Letter).

On January 14, 2005, Copelco filed the present motion requesting the court to find, pursuant to 28 USC § 1610(c), that a reasonable period of time has elapsed following the entry of the judgment against Consulate and thus an order allowing Copelco to levy the assets of Consulate is warranted. Doc #169 (Pla Mot). Copelco has furthered clarified that its motion is "directed specifically toward [the] Citibank account that was previously levied." Doc #190 at 1. Consulate opposes the motion, asserting that its Citibank account enjoys diplomatic immunity from attachment pursuant to the Vienna Convention on Consular Relations of 1969 (VCCR). Doc #175. Alternatively, Consulate asserts that its bank accounts are immune from attachment under the Foreign Sovereign Immunities Act (FSIA), 28 USC § 1602 et seq. Id. As mentioned above, the United States has filed, in essence, a memorandum amicus curiae in support of Consulate.

II. Vienna Convention

A.

"Believing that an international convention on diplomatic intercourse, privileges and immunities would contribute to the development of friendly relations among nations, irrespective of their differing constitutional and social systems," the Vienna Convention on Diplomatic Relations (VCDR) was ratified in 1961. Vienna Convention on Diplomatic Relations, [1961] 23 UST 3227, TIAS No 7502. The VCDR provided diplomatic immunity to ministers and diplomats sent from a "sending" signatory country to a "receiving" signatory country to head a "mission" (e g, negotiations, promoting relations and developments). In 1969, "believing that * * * consular relations" would benefit from a similar convention, the VCCR was enacted to provide diplomatic immunity to consuls of a "sending" signatory who reside in a foreign "receiving" signatory country to represent the commercial interests of the citizens of the sending signatory. Vienna Convention on Consular Relations, [1969] 21 UST 77, TIAS No 6820. Although their Articles are numerically different, both Vienna Conventions employ the same substantive language throughout. It is undisputed that the United States and Brazil are signatories to both the VCDR and VCCR.

Of great importance to the current motion is Article 28 of the VCCR, which provides that "[t]he receiving State shall accord full facilities for the performance of the functions of the consular post." 21 UST at 96 (emphasis added); see 23 UST at 3238, Art 25 (VCDR analog) ("The receiving State shall accord full facilities for the performance of the [diplomatic] mission.").

B.

Consulate concedes that "neither the VCDR nor the VCCR state specifically that official bank accounts used for purposes of a foreign mission enjoy immunity from attachment." Doc #176 at 4. Consulate, however, asserts that VCCR Article 28 prohibits Copelco from attaching its Citibank account. Id.

Consulate argues that "[i]f the 'full facilities' to which the United States agreed to 'accord' consular immunity did not include bank accounts off the premises of the [consular post], the Consulate would have to take grossly inconvenient measures to protect its government accounts against seizures and [measures] that would severely hamper the Consulate's consular function." Doc #176 at 4. At first blush, this argument appears to stretch the words of the VCCR beyond their plain meaning. The Consulate's position, however, finds support in two district court cases. See Liberian Eastern Timber Corp v Government of the Republic of Liberia, ...


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