Reversing $50M Default Judgment for Caribbean Island
Two Florida-based companies – Architectural Ingenieria Siglo and Sun Land & RGITC – sued the Dominican Republic and its independent agency, Instituto Nacional de Recursos Hidráulicos (INDRHI), in the U.S. District Court for the Southern District of Florida in 2013 for breach of contract and unjust enrichment in connection with the development of an irrigation system in the Dominican Republic.
When the Dominican Republic and INDRHI failed to respond, a Miami federal judge issued a $50.1 million default judgment. Immediately, the Caribbean nation enlisted Holland & Knight to vacate the default judgment and allow the country to defend the lawsuit on the merits. Our attorneys argued that the mishandling of the service of the suit and default judgment was excusable neglect, and that the District Court lacked subject matter jurisdiction to enter the default judgment in regards to the Dominican Republic. In June 2015, a team of our South Florida litigation and appellate attorneys prevailed in the U.S. Court of Appeals for the Eleventh Circuit, helping reverse the ruling that ordered the country to compensate two Floridian companies $50.1 million for an alleged breach of an irrigation contract.
Our team argued excusable neglect on the basis that Dominican officials never knew about the suit because of a consulate secretary's clerical error. For the Eleventh Circuit, the central question focused on service of the lawsuit and whether a Dominican government official ever received the complaint. Holland & Knight attorneys presented a fact-intensive argument, ultimately demonstrating that nobody in an official managerial capacity within the Dominican Republic government knew anything about the case. Our attorneys further argued that the District Court lacked subject matter jurisdiction to enter the default judgment against the country because the Dominican Republic is a foreign sovereign immune from suit in this country under the Foreign Sovereign Immunities Act.
In a 29-page opinion published in June 2015, the Eleventh Circuit reversed the District Court and remanded the case for further proceedings in the District Court. The Eleventh Circuit found, consistent with Holland & Knight attorneys' arguments, that the District Court lacked subject matter jurisdiction over some of the claims against the Dominican Republic based on its sovereign immunity – and that the default occurred as a result of excusable neglect. With the judgment vacated, the breach of contract case will now revert to the District Court.