Michael R. Tein of Lewis Tein

Miami attorneys including former Florida Supreme Court Justice Raoul Cantero are challenging an appellate ruling they argue would require Florida courts to take marching orders from totalitarian regimes.

The attorneys represent two brothers sued in Miami by the Ecuadorean government for allegedly embezzling about $662 million from Filanbanco, the bank where they were administrators. The defendants, Roberto and William Isaias Dassum, initially won dismissal of the lawsuit on standing and statute of limitations grounds.

But in December, the Third District Court of Appeal reversed the decision on both issues. The court ruled the statute of limitations began running in 2008, when Ecuador's version of the Federal Deposit Insurance Corporation found the Isaias brothers liable for the bank's losses and ordered the seizure of their assets.

“In other words, the Isaiases' liability for the losses to Filanbanco has been established in the Republic's act of state …. and pursuant to the act of state doctrine, no court in this country may find otherwise,” wrote Judge Barbara Lagoa, with Judges Richard Suarez and Robert Luck concurring.

The judges instructed the lower court to focus only on damages for the remaining proceedings. They made it clear the trial judge has the option of awarding no damages: “This [decision] does not mean that the republic is entitled to automatically seize the Isaiases' property in Miami-Dade County.”

Now Cantero of White & Case and Michael Tein of Lewis Tein are moving for rehearing en banc, arguing the judges' instructions would have broad constitutional implications.

“Until now, no court in the United States — state or federal — has allowed a foreign sovereign to enforce a government decree determining an individual's liability without either having provided due process in the country of origin or proving its case with evidence here,” the attorneys argue. “Such a holding would be anathema to the constitutional protections of both Florida and the United States prohibiting deprivations of property without due process.”

Ecuador's attorney, Alvin Davis of Squire Patton Boggs in Miami, said the matter was already decided the first time the case went up on appeal.

“They raised all of these same arguments when they moved for rehearing when they lost the first case, and the court ruled against them on all of the points they're raising,” said Davis, who worked with colleague Digna French.

The due process argument “goes nowhere” because the act of state doctrine cuts off any analysis of due process in Ecuador, Davis added. The Third DCA already ruled in the first appeal that the extraterritoriality exception to the doctrine does not apply.

The case was initially heard by Miami-Dade Circuit Judge John Thornton, who acknowledged in his 2015 dismissal order that “there was substantial evidence presented at trial by the Isaiases that they committed no wrongdoing, did not cause any losses to Filanbanco and were not provided due process in Ecuador.” But he ruled the evidence would be more appropriate to consider at a later stage.

In response to a request for comment, Tein pointed to his opening statement during the bench trial, when he told Thornton accepting Ecuador's arguments would be like “enforcing Cuba's 1959 Agrarian Reform Laws or Nazi Germany's Nuremberg Laws to collect assets from Florida residents.”

White & Case attorneys Maria Beguiristain and Jesse Green also represent the Isaiases.