Natalie Qandah v. Johor Corp. ( 2021 )

NOT RECOMMENDED FOR PUBLICATION
File Name: 21a0534n.06
No. 20-1991
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
FILED
NATALIE C. QANDAH, ) Nov 22, 2021
) DEBORAH S. HUNT, Clerk
Plaintiff-Appellant, )
)
ON APPEAL FROM THE
v. )
UNITED STATES DISTRICT
)
COURT FOR THE EASTERN
JOHOR CORPORATION; YB DATO )
DISTRICT OF MICHIGAN
KAMARUZZAMAN BIN ABU KASSIM, )
)
Defendants-Appellees. )
)
BEFORE: BOGGS, GRIFFIN, MURPHY, Circuit Judges.
GRIFFIN, Circuit Judge.
According to Natalie Qandah, her former employer defrauded her, discriminated against
her, and emotionally abused her. But instead of suing her old bosses, she has sued a Malaysian
governmental entity that had only a tangential relationship with her former employer. Given that
there was no direct link between this entity and the harms alleged, the district court held that
Qandah’s suit was barred by the Foreign Sovereign Immunities Act (“FSIA”). Because the district
court properly applied the law to sound factual findings, we affirm.
I.
Johor is one of the thirteen states that form Malaysia. In 1968, the Johorian government
established the Johor Corporation (“JCorp”), an “investment holding entity” designed to encourage
economic development in the region. JCorp is, and has always been, wholly owned by the State
of Johor.
No. 20-1991, Qandah v. Johor Corp., et al.
During the timeframe relevant to this action, JCorp had hundreds of direct subsidiaries,
including Johor Logistics, which in turn owned 80% of the Asia Logistics Council (“ALC”). The
other 20% of ALC was owned by the World Logistics Council. Throughout the relevant time,
neither JCorp nor any JCorp subsidiary had any ownership interest in the World Logistics
Council.1
The World Logistics Council had a wholly owned subsidiary, WLC SA. In August 2013,
WLC SA hired Natalie Qandah, a Michigan attorney, as in-house counsel for its affiliate, the
Global Coalition for Efficient Logistics (“GCEL”), in Dearborn, Michigan.
According to Qandah, GCEL was a terrible place to work. She contends that, as a Christian
woman in an office of “primarily Muslim men,” she was discriminated against because of her
gender and religion. GCEL allegedly required her to work on Christian holidays (even though her
Muslim co-workers did not have to work on Islamic holidays) and pressured her to convert to
Islam. She also alleges that her employer withheld her paycheck because she is a woman and that
promised equity packages and pay raises never materialized. Less than a year after she started,
WLC SA fired Qandah.
After her termination, Qandah informed JCorp that she intended to file a lawsuit against it
for the harm she suffered as a WLC SA employee. She claims that, shortly after providing this
notice, JCorp’s chief executive officer YB Dato Kamaruzzaman Bin abu Kassim (“Kassim”)
“directed, ordered and financed the filing of a false and malicious grievance against [her] with the
Michigan Attorney Grievance Commission.”
1
Later, ALC acquired a 5% ownership stake in the World Logistics Council for
approximately $50 million. ALC transferred half of this sum before or during Qandah’s
employment with WLC SA, but did not receive any equity in the World Logistics Council until
after her termination.
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No. 20-1991, Qandah v. Johor Corp., et al.
True to her word, Qandah filed this lawsuit against JCorp and Kassim, raising
discrimination and tort claims. Defendants filed a motion to dismiss under Fed. R. Civ. P. 12(b)(1),
arguing that the district court lacked subject-matter jurisdiction because the FSIA immunized them
from suit in the United States. Qandah responded, arguing that defendants did not qualify for FSIA
protections and that, even if they did, the Act’s “commercial activity” exception and “tortious act”
exception negated their immunities.
The district court ordered limited discovery on its jurisdiction, after which defendants
renewed their motion to dismiss on FSIA grounds. The district court granted this motion, but we
reversed that decision because it misapplied the FSIA’s burden-shifting framework by placing the
burden of persuasion on plaintiff. Qandah v. Johor Corp., 799 F. App’x 353, 360 (6th Cir. 2020).
On remand, defendants renewed their motion again, and the district court again dismissed the case
for lack of subject-matter jurisdiction, this time ensuring that the burden of persuasion remained
with defendants. Qandah then filed this timely appeal.
II.
Qandah challenges the district court’s decision to dismiss her suit for lack of subject-matter
jurisdiction. At the outset, we must determine how to review the district court’s order. As a
general matter, we review de novo questions of subject-matter jurisdiction. O’Bryan v. Holy See,
556 F.3d 361, 372 (6th Cir. 2009). But the nature of the decision below adds an extra layer to the
standard. The court adjudicated a factual attack on subject-matter jurisdiction under Rule 12(b)(1).
Unlike failure-to-state-a-claim challenges or facial attacks on subject-matter jurisdiction, factual
attacks do not require the district court to accept plaintiff’s version of the facts. See Gentek Bldg.
Prods., Inc. v. Sherwin-Williams Co., 491 F.3d 320, 330 (6th Cir. 2007). Instead, “the district
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No. 20-1991, Qandah v. Johor Corp., et al.
court must weigh the conflicting evidence to arrive at the factual predicate that subject-matter
[jurisdiction] does or does not exist.” Id.Here, the district court examined the facts before it and concluded that it lacked
subject-matter jurisdiction. On appeal, we “accept the district court’s findings of fact unless the
findings are clearly erroneous[,]” but “review de novo the district court’s legal conclusions
regarding those facts.” Glob. Tech., Inc. v. Yubei (XinXiang) Power Steering Sys. Co., 807 F.3d
806, 810 (6th Cir. 2015). A factual finding is clearly erroneous “when although there is evidence
to support it, the reviewing court on the entire evidence is left with the definite and firm conviction
that a mistake has been committed.” Lyngaas v. Ag, 992 F.3d 412, 419 (6th Cir. 2021) (quotation
omitted).
III.
The FSIA lies at the heart of this appeal. Under that statute, “a foreign state is
presumptively immune from suit unless a specific exception applies.” Permanent Mission of India
to the United Nations v. City of New York, 551 U.S. 193, 197 (2007); see 28 U.S.C. § 1604.
Determining whether defendants are entitled to FSIA immunity involves a “unique burden-shifting
framework.” Qandah, 799 F. App’x at 357. First, defendants bear the burden of proof to establish
that JCorp is a “foreign state” under the FSIA’s definition of that term. O’Bryan, 556 F.3d at 376.
“[O]nce this prima facie case is established, the burden of production shifts to [Qandah] to show
that an exception applies.” Id. But defendants “retain[] the burden of persuasion throughout this
process.” Id. This means that they must “prove by a preponderance of the evidence” that no
asserted exception applies. Qandah, 799 F. App’x at 360.
Because granting immunity to individual foreign officials (rather than states) has additional
requirements, see infra Section IV, we will start with JCorp.
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No. 20-1991, Qandah v. Johor Corp., et al.
A.
At the first step, Qandah briefly argues that JCorp failed to prove that it is a foreign state.
But she ignores that, in her first appeal, we affirmed the district court’s holding that JCorp is “a
foreign state for the purposes of the FSIA.” Qandah, 799 F. App’x at 358. This holding is the law
of the case, see Westside Mothers v. Olszewski, 454 F.3d 532, 538 (6th Cir. 2006), and enough for
JCorp to satisfy its first-step burden now.
B.
Because JCorp satisfied its burden at the first step, Qandah must produce evidence that at
least one FSIA exception applies. O’Bryan, 556 F.3d at 376. She believes that the record supports
applying the commercial-activity exception and/or the tortious-act exception. We take each
exception in turn.
i.
The commercial-activity exception allows a foreign government to be sued in the United
States if the lawsuit is “based upon” (1) “a commercial activity carried on in the United States by
the foreign state”; (2) “an act performed in the United States in connection with a commercial
activity of the foreign state elsewhere”; or (3) “an act outside the territory of the United States in
connection with a commercial activity of the foreign state elsewhere and that act causes a direct
effect in the United States.” 28 U.S.C. § 1605(a)(2). The statute’s use of the phrase “based upon”
means that “[t]he commercial activity relied upon by a plaintiff for jurisdictional purposes must
be directly connected to the activity for which the plaintiff brings suit.” Glob. Tech., 807 F.3d at
812 (citing Saudi Arabia v. Nelson, 507 U.S. 349, 358 (1993)).
Qandah relies on four aspects of the record to show that her lawsuit qualifies for the
commercial-activity exception. First, she points to an affidavit submitted by GCEL’s former
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No. 20-1991, Qandah v. Johor Corp., et al.
Director of Finance, Steve Szirmai, which asserts that “[t]he GCEL and WLC entities were
operated as one organization at the direction of [Kassim] . . . on behalf of JCorp.” Next, she
submitted her own affidavit, which largely aligns with the Szirmai affidavit and further asserts that
she performed work in the United States directly for JCorp and its subsidiaries. She then identifies
a 2012 letter sent by JCorp to WLC SA, asking for “more details” on its progress in recruiting
employees and deciding on a domicile. Finally, she highlights an email that Kassim sent after
receiving notice that Qandah was threatening litigation, in which he warns WLC SA to “prepare
to cover all angels [sic]” because he “was told [Qandah is] adamant to pursue the claims.” In all,
she argues that this evidence compels the conclusion that JCorp conducted business domestically
and directed WLC SA’s commercial activity in the United States.
The district court viewed this evidence differently. It saw Szirmai and Qandah’s testimony
as “[l]egal conclusions” that “need not be accepted[.]” It also found that the JCorp letter was “not
a direction, let alone an enforceable command, to hire [Qandah] or other American employees,”
and that Kassim’s email was “not a direction” to take adverse action against Qandah. Instead, the
court credited defendants’ evidence, which showed that “[t]he only connection from JCorp to
[WLC SA] is through a series of subsidiaries and secondary investments.” The court observed
that, although “JCorp, through ALC, appears to have been an important commercial partner to
[WLC SA],” it lacked “any legally enforceable interest that would allow it to direct, manage, and
control the operations of [WLC SA.]” The court found that JCorp’s commercial activities were
limited to “investments and management of corporate entities,” and “did not extend to the hiring,
discrimination, and termination of [Qandah].” Because JCorp’s commercial activities were
therefore not directly connected to the conduct underlying Qandah’s suit, the court held that the
exception did not apply.
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No. 20-1991, Qandah v. Johor Corp., et al.
The district court’s finding that JCorp’s commercial activities were limited to investing in
entities separate from WLC SA is a factual finding, which we review only for clear error. Global
Tech., 807 F.3d at 810. This finding is not clearly erroneous. Defendants introduced evidence on
JCorp’s corporate structure, which showed that it had no ownership interest in, or direct control
over, World Logistics or WLC SA during the relevant time periods. The district court did not
clearly err by crediting this evidence over Qandah’s conclusory assertions to the contrary. See
Gentek Bldg., 491 F.3d at 330.
Moreover, the district court’s criticism of Qandah’s documentary evidence is well-taken.
The 2012 JCorp letter—which preceded Qandah’s employment by more than a year—only
reminded WLC SA of the “importance of expediently deciding [its] domicile,” and requested
“details on the progress of [WLC SA’s] Human Resources intake to-date and [its] recruitment
plans going forward.” Contrary to Qandah’s characterization, the letter did not direct WLC SA to
hire employees in the United States or elsewhere. Similarly, Kassim’s email only shows him
opining that WLC SA “must prepare to cover all angels [sic]” in response to Qandah’s legal claim.
Qandah’s argument that this email is really Kassim directing WLC SA to file a grievance against
her is simply not supported by what the message actually says.
Qandah also asserts that the district court ignored the Szirmai affidavit. As a factual matter,
she is wrong; the district court discussed the Szirmai affidavit in its latest dismissal order. See
Qandah v. Johor Corp., Case No. 17-11126, 2020 WL 5944459, at *4 (E.D. Mich. Oct. 7, 2020)
(citing “ECF No. 54-20,” a record designation of the Szirmai affidavit). And even if it had not
discussed that affidavit, the district court was not “obliged to recite and analyze individually each
and every piece of evidence presented by the parties.” See Qandah, 799 F. App’x at 359 n.5
(quoting Holton v. City of Thomasville Sch. Dist., 425 F.3d 1325, 1353 (11th Cir. 2005)). Qandah’s
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No. 20-1991, Qandah v. Johor Corp., et al.
real argument appears to be that the district court did not give enough weight to the Szirmai
affidavit. But, absent clear error, assigning weight is the province of the district court as fact
finder. See Gentek Bldg., 491 F.3d at 330. And it was not clearly erroneous for the district court
to conclude that the Smirzai affidavit—like Qandah’s own affidavit—was entitled to little or no
weight because it was conclusory.
Given the district court’s not-clearly-erroneous finding that JCorp’s commercial activity
did not include the acts upon which Qandah bases her action, it correctly declined to apply this
exception. JCorp owned subsidiaries that partially owned another company that worked with
Qandah’s employer’s parent company. JCorp had no ownership interest in or control over the
company responsible for the conduct that Qandah complains of in her suit and thus its commercial
activity lacks a direct connection to her alleged injuries. Accordingly, the commercial-activity
exception does not apply.
ii.
The tortious-act exception strips immunity from foreign governments in any case where
the plaintiff seeks money damages for a personal injury “(1) occurring in the United States;
(2) caused by a tortious act or omission; (3) where the alleged acts or omissions were those of a
foreign state or of any official or employee of that foreign state; and (4) those acts or omissions
were done within the scope of tortfeasor’s employment.” O’Bryan, 556 F.3d at 380–81 (citing
28 U.S.C. § 1605(a)(5)) (internal quotation marks and alterations omitted).
The district court held that a lack of the second element—causation—barred this exception.
It found that, “by a preponderance of the evidence, [Qandah’s] alleged hiring, discrimination,
firing, and attorney grievance complaint were not caused by the actions of [JCorp] or of any official
or employee of [JCorp].” “[C]ausation, or the lack of it, is generally a question of fact[.]” Toth v.
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No. 20-1991, Qandah v. Johor Corp., et al.
Yoder Co., 749 F.2d 1190, 1196 (6th Cir. 1984) (applying Michigan law); see O’Bryan, 556 F.3d
at 381 (“In determining whether the tortious act exception applies, courts, as a rule apply state
substantive law.”). So we review the district court’s lack-of-causation finding for clear error.
Glob. Tech., 807 F.3d at 810.
The district court’s finding is not clearly erroneous. Based on defendants’ evidence, the
district court could have reasonably concluded that Qandah’s employer was separate and distinct
from JCorp, which contradicts the conclusory testimony of her and Szirmai’s affidavits. Nor does
her proffered documentary evidence support a definite and firm conviction that the district court
erred in finding that defendants were not involved in the alleged tortious acts. The JCorp letter
shows nothing more than that company’s gentle nudging of a collaborator to take certain steps to
further their joint goals. There is no connection between that letter and the mistreatment that
Qandah suffered at WLC SA more than a year later. And Kassim’s vague advice to “cover all
angels [sic]” does not compel the conclusion that he was directing anyone to file a grievance
against Qandah. Because the district court found that defendants did not cause Qandah’s alleged
injuries, it correctly held that the tortious-act exception does not apply.
In sum, the district court weighed the evidence, properly allocated the relevant burdens,
and concluded that JCorp was immune from suit under the FSIA. Because the court correctly
applied the law to its sound factual findings, we affirm the district court’s grant of immunity to
JCorp.
IV.
We now turn to Kassim. FSIA immunity does not extend to “an official acting on behalf
of the foreign state.” Samantar v. Yousuf, 560 U.S. 305, 319 (2010). However, “some actions
against foreign officials in their official capacity should be treated as actions against the foreign
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No. 20-1991, Qandah v. Johor Corp., et al.
state itself because the state is the real party in interest.” Qandah, 799 F. App’x at 360 (citing
Samantar, 560 U.S. at 325).2 The district court applied this official-capacity doctrine to grant
immunity to Kassim.
Qandah challenges the district court’s grant of immunity to Kassim, first arguing that the
court erred by allowing him to assert this defense despite his failure to list it in his answer. “This
Court reviews a finding that a party did not forfeit an affirmative defense for abuse of discretion.”
Rogers v. I.R.S., 822 F.3d 854, 856 (6th Cir. 2016). A district court may allow a defendant to raise
an untimely affirmative defense “if doing so does not result in surprise or prejudice to the plaintiff.”
Id.Here, the district court allowed Kassim to proceed on this defense because Qandah was on
notice that he was claiming immunity based on foreign sovereignty and had ample opportunity to
respond. This decision was well within the district court’s discretion. Both defendants have
consistently argued for foreign immunity since this case was first filed more than four years ago.
Kassim’s argument is merely an offshoot of this broadside attack on jurisdiction. See Samantar,
560 U.S. at 325. And Qandah had a full opportunity to respond to Kassim’s claim of foreign
immunity during the post-remand motion practice. Kassim’s raising of this argument was not
surprising or prejudicial, so the district court did not abuse its discretion in excusing any tardiness.
2
We note that Samantar may not have placed the existence of an official-capacity exception
beyond all doubt. See 560 U.S. at 325 (“Or it may be the case that some actions against an official
in his official capacity should be treated as actions against the foreign state itself, as the state is the
real party in interest.” (emphasis added)). But because Qandah does not argue against this
exception (and, indeed, appears to concede its existence in this case by arguing that Kassim failed
to carry his burdens under the FSIA framework), we leave this question for another day. We also
need not decide the scope of any common law foreign official immunity because the parties only
address the official-capacity question. See Samantar, 560 U.S. at 322 n.17, 325–26.
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No. 20-1991, Qandah v. Johor Corp., et al.
Next, Qandah argues that Kassim has “fail[ed] to carry [his] burden of proof and persuasion
on this assertion of immunity,” and that he cannot invoke foreign immunity because he is the head
of a corporate—not governmental—entity. As explained above, however, JCorp is an organ of
the Johorian government and has carried its burden to receive FSIA immunity. Thus, if Qandah
has brought this suit against Kassim in his official capacity and JCorp is the real party in interest,
he is also immune from suit. Qandah, 799 F. App’x at 360.
In Samantar, the Supreme Court briefly analogized this potential official-capacity
exception to official-capacity suits under 42 U.S.C. § 1983. 560 U.S. at 325 (citing Kentucky v.
Graham, 473 U.S. 159, 166 (1985)). Under § 1983, our court treats suits against state actors
presumptively as suits in their official capacity (in which case they cannot be held liable for
damages) rather than in their personal capacity (in which case they can be). See Moore v. City of
Harriman, 272 F.3d 769, 772 (6th Cir. 2001) (en banc). When the plaintiff’s complaint does not
make clear whether a defendant is sued in an official or personal capacity, we make this
determination by examining factors such as the way defendants are named in the complaint,
whether the complaint’s language indicates an individual-capacity suit, and whether the complaint
seeks damages in general or damages from each individual. See Vittetoe v. Blount Cnty, 861
F. App’x 843, 2021 WL 2472357, at *7 (6th Cir. 2021).
A review of Qandah’s operative complaint makes clear that she sued Kassim only in his
official capacity. Her complaint’s caption states that she is suing Kassim “as CEO of Johor Corp.”
She further alleges that “at all pertinent times associated with the facts underlying this complaint”
Kassim “engage[d] in business and/or activities . . . on behalf of Defendant Johor Corporation, its
Organization and constituents.” She also almost exclusively refers to JCorp and Kassim as “the
Defendants” and makes only a general demand for damages without specifying the source. In
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No. 20-1991, Qandah v. Johor Corp., et al.
short, Qandah’s complaint is best read as suing Kassim only in his official capacity for acts he
allegedly caused JCorp to commit. Because the company is immune from suit, so is Kassim in his
official capacity.
V.
For these reasons, we affirm the district court’s judgment.
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