Background
Ricardo Devengoechea alleged that Venezuelan officials asked him to bring his collection of Simón Bolívar artifacts to Venezuela for inspection while the parties negotiated a possible purchase. According to Devengoechea, the officials agreed either to buy the collection or return it to him in Orlando, but Venezuela did neither. He sued Venezuela for breach of contract and unjust enrichment under the Foreign Sovereign Immunities Act.
Venezuela initially failed to appear, resulting in a clerk’s default and default judgment. After Venezuela appeared, the district court vacated both at Devengoechea’s request and allowed Venezuela to respond. Venezuela later challenged jurisdiction, but the Eleventh Circuit affirmed the denial of its motion to dismiss. Following a regime change, Venezuela’s attorneys withdrew and Venezuela failed to comply with pretrial orders. Devengoechea preferred to prove his case rather than seek a default judgment, so the district court conducted a bench trial without Venezuela and awarded him $17,128,630.10.
The Court’s Holding
The Eleventh Circuit vacated the judgment and remanded. It held that when circumstances would produce a default judgment against a foreign state, whether in name or effect, 28 U.S.C. § 1608(e) governs. The district court therefore could not bypass the FSIA’s default-judgment requirements by conducting an in absentia trial after Venezuela stopped participating.
The majority further held that Federal Rule of Civil Procedure 55 supplies the procedure for implementing § 1608(e). Because no default was entered, Devengoechea did not apply for a default judgment, and Venezuela did not receive Rule 55(b)(2)’s required notice of such an application, the proceedings were improper. The court also noted that § 1608(e) required satisfactory evidence establishing every element of Devengoechea’s claims, and the record did not show that the district court applied that standard. Judge Rosenbaum dissented, reasoning that the judgment followed a merits trial rather than a default and should have been affirmed.
Key Takeaways
- Any proceeding that would result in a default judgment, in name or effect, against a foreign state is governed by the FSIA’s default provision, 28 U.S.C. § 1608(e).
- Rule 55 supplies the required procedure, including entry of default and, when an appearing party faces a Rule 55(b)(2) hearing, at least seven days’ written notice of the default-judgment application.
- An FSIA claimant must establish entitlement to relief with satisfactory evidence as to every element; procedural noncompliance by the foreign state is not enough by itself.
Why It Matters
The decision limits the use of in absentia merits trials when a foreign sovereign stops defending an action. In the Eleventh Circuit, courts and litigants must use the FSIA and Rule 55 framework rather than characterize the proceeding as an ordinary trial without the sovereign.
The ruling also underscores that notice of a trial date does not substitute for Rule 55(b)(2) notice and that even a substantial evidentiary presentation must be evaluated under § 1608(e)’s foreign-sovereign-specific standard.