Tjgem LLC v. Republic of Ghana ( 2013 )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
TJGEM LLC,
Plaintiff,
Civil Action No. 13-382 (BAH)
v.
Judge Beryl A. Howell
REPUBLIC OF GHANA, et al.
Defendants.
MEMORANDUM OPINION
The plaintiff in this matter, TJGEM LLC, was not awarded an anticipated $595,000,000
no-bid contract to reconstruct the sewer system in Accra, the capital city of the Republic of
Ghana (“Ghana”). See Pl.’s First Am. Compl. (“FAC”) ¶ 258. After the contract was awarded to
a competing company, the plaintiff brought the instant suit against Ghana, the Accra
Metropolitan Assembly (the “AMA”), and two Ghanaian government officials, Kwabena
Duffuor and Alfred O. Vanderpuije (collectively, the “Ghana Defendants”); the firm that
obtained the contract, Conti Group (“Defendant Conti”); the subcontractor for the sewer project,
Kwame Building Group and two of its employees, Anthony T. Thompson and Craig Lucas
(collectively, the “KBG Defendants”); and three brothers, Gideon, Mark, and Jonathan Adjetey
(collectively, the “Adjetey Defendants”), who were founding members of TJGEM. 1 See FAC
Part I.B ¶¶ 1–9.
Pending before the Court are eight motions related to three groups of defendants: the
Defendant Conti’s Motion to Dismiss (“Conti MTD”), ECF No. 40 and the plaintiff’s Motion to
Strike Defendant Conti’s Motion to Dismiss, ECF No. 42; the Ghana Defendants’ Motion to
1
The plaintiff apparently derives its moniker from the first initials of the five founding members: Tony Weaver,
Jonathan Adjetey, Gideon Adjetey, Elbert Walton, and Mark Adjetey.
1
Dismiss (“Ghana Defs.’ MTD”), ECF No. 51, and the plaintiff’s Motion to Strike the
Declarations filed with the Ghana Defs.’ MTD, ECF No. 62; the plaintiff’s Amended Motion to
Stay, ECF No. 83; the KBG Defendants’ Motion to Dismiss (“KBG Defs.’ MTD”), ECF No. 53,
and Motion to Join the Other Defendants’ Oppositions to the plaintiff’s Motion for Stay, ECF
No. 92; and the plaintiff’s Motion for Sanctions Against Defendant Vanderpuije, his defense
counsel, Creighton R. Magid and Juan C. Basombrio, and Dorsey & Whitney, Defendant
Vanderpuije’s defense counsel’s law firm (“Pl.’s Sanctions Mot.”), ECF No. 89. As explained
below, the Court grants the Ghana Defendants’ Motion to Dismiss, denies the plaintiff’s Motion
to Strike the Ghana Defendants’ declarations and, consequently, dismisses this action in its
entirety, rendering all but one of the remaining motions moot. That remaining motion, the
plaintiff’s Motion for Sanctions, is denied.
I. BACKGROUND
The plaintiff’s FAC is a 216 page, rambling document containing numerous allegations
of corruption and bribery in Ghana accompanied by 479 pages of exhibits, that, at the very least,
tests the limits of Federal Rule of Civil Procedure 8(a)(2)’s requirement that a complaint contain
“a short and plain statement of the claim showing that the pleader is entitled to relief.” See FAC;
Pl.’s Errata, Exhibit List with Exhibits to FAC (“Pl.’s Exhibits”), ECF No. 31, generally. In
order to address the Ghana Defendants’ jurisdictional argument, which dooms the plaintiff’s
claims, a brief recitation of the pertinent facts from the FAC is necessary.
In 2010, Defendants Vanderpuije and Gideon Adjetey (“Gideon”), who were longtime
friends, discussed “potential infrastructure development projects” in Ghana “that might be
awarded to a company with whom Gideon might be affiliated or hold an interest.” FAC ¶¶ 5;
2
11. 2 Defendant Vanderpuije is the Metropolitan Chief Executive of the Accra Metropolitan
District, a position akin to an appointed Mayor in the United States. Id. ¶ 4; Pl’s Mem. Opp’n
Ghana Defs.’ MTD (“Pl’s Opp’n”) at 14, ECF No. 63. Following the visit, Gideon contacted
Elbert Walton (“Walton”), an attorney in St. Louis, Missouri, with a proposal to form a
partnership to pursue such infrastructure projects. FAC ¶ 15. Walton suggested involving
another partner, Anthony Weaver (“Weaver”), and Gideon assented. Id. ¶¶ 17–19. In January
2011, Walton and Weaver “organized a limited liability company, TJGEM, LLC in the state of
Missouri as an infrastructure development company.” Id. ¶ 40. The three Adjetey Defendants,
Gideon, Mark, and Jonathan, were to “make both a financial investment in the company and sign
the operating agreement as members of the company and to jointly manage the company with
Walton and Weaver.” Id. ¶ 42.
Over the next fourteen months, from January, 2011 through March, 2012, the plaintiff
pursued a contract with the Ghanaian government to reconstruct the Accra sewer system,
working closely with Defendant Vanderpuije. See id. ¶¶ 44–258. As part of these negotiations,
the plaintiff’s members and agents flew to Ghana on multiple occasions. See id. ¶¶ 44; 77; 168.
During the negotiations, the plaintiff concedes it learned that “only the central government could
contract for and finance the Accra sewer system project” and “under Ghana’s constitution and
statutes, the central government borrows funds and the central government by and through its
cabinet level members enter [sic] into such contracts, subject to the approval of financing by
parliament.” Id. ¶ 148; see also Pl’s Opp’n at 10, (acknowledging Defendant Vanderpuije
“misrepresented the AMA’s authority in that the AMA did not have the power to enter into the
sewer reconstruction contract and thus no contract was adopted by the AMA”).
2
Unless noted otherwise, paragraph citations refer to those paragraphs in Section IV of the FAC.
3
Despite this concession, the plaintiff alleges that it was induced into providing Defendant
Vanderpuije with contracts and a business plan that it characterizes as “trade secrets” based on
Defendant Vanderpuije’s assurances that “TJGEM would be granted a contract as the developer
for the construction or reconstruction of the sewer system of Accra.” See FAC ¶¶ 98–102. The
plaintiff notes that it provided the documents it classifies as “trade secrets” voluntarily to, inter
alia, (1) Defendant Vanderpuije, id. ¶ 79; (2) “his staff of engineers, city manager, and city
attorney[,]” id. ¶ 80; (3) the subcontractor retained for the project, Defendant KBG, see id. ¶ 89;
(4) United States embassy personnel in Ghana, id. ¶164; (5) Ghana’s Minister of Finance,
Defendant Duffuor, id. ¶ 233; and (6) the commercial officer in the Ghanaian Embassy in
Washington, D.C., id. ¶ 241. The plaintiff concedes that it did not submit a confidentiality
agreement to Defendant Vanderpuije “in reliance on [Defendant] Gideon’s representations as to
the good faith and fairness of [Defendant Vanderpuije] and the need under Ghanaian custom to
show trust in [Defendant Vanderpuije.]” Id. ¶ 86. The plaintiff does not plead that it ever asked
anyone associated with the project to sign a confidentiality agreement. See id., generally. A
similar failure to obtain a signed confidentiality agreement with Defendant Vanderpuije scuttled
an earlier attempt to work with “a New York based company, KPP,” during the formation of
TJGEM, see id. ¶¶ 30–35, and a loan broker the plaintiff discussed doing business with in
Ghana, id. ¶ 110.
In pursuing the project, the plaintiff met with several Ghana government officials and
sought financing from the Export-Import Bank of the United States for Ghana to fund the
reconstruction. See id. ¶¶ 170–79; 201. The plaintiff alleges it was able to secure a loan from
the Export-Import Bank for Ghana in the amount “of $587,937,500 to finance the sewer project
4
upon Ghana entering into a contract with TJGEM as developer of the project and [Defendant]
KBG as subcontractor to TJGEM on the project.” Id. ¶¶ 206; 223.
The plaintiff alleges that after it refused several requests for a bribe from Defendant
Vanderpuije, see id. ¶¶ 114; 120; 129; 140; 191; 245–47, the Ghana Defendants sought and
obtained a $10 million bribe from Defendant Conti to award the contract for the sewer project to
Defendant Conti, id. ¶ 257. The plaintiff alleges that, based in part on the work the plaintiff had
done, the Ghana Defendants awarded the project to Defendant Conti and signed a memorandum
of understanding to that effect on March 9, 2012. Id. ¶ 258. Defendant Vanderpuije was a
signatory on the contract between Defendant Ghana and Defendant Conti. Pl.’s Opp’n at 14.
The plaintiff alleges that this amounted to a failure to follow Ghanaian law in procurement of
government contracts and was only possible because of the alleged bribe. See id. ¶¶ 281–90. 3
The plaintiff filed the instant suit on March 22, 2013, see Compl., ECF No. 1, and
amended its complaint on July 24, 2013, see FAC. The FAC asserts seven claims for relief: (1)
“Misappropriation and Conversion of Trade Secrets” against all defendants; (2) Tortious
Interference with a Business Relationship against the Adjetey Defendants; (3) Tortious
Interference with a Business Relationship against the KBG Defendants; (4) Tortious Interference
with a Business Relationship against Defendant Conti; (5) RICO and Hobbs Act Violations
against all defendants; (6) common law fraud against Defendant Vanderpuije and Defendant
Duffuor; and (7) conspiracy to defraud against all defendants. See id. Part V ¶¶ 292–603. The
3
The plaintiff also accuses a commercial officer in the United States Embassy in Accra of steering the sewer project
contract to Defendant Conti solely because the officer “is a European-American,” FAC ¶ 270, and Defendant “Conti
was European-American owned and managed,” id. ¶ 277. The plaintiff states the officer’s “apprising [Defendant]
Conti of [the plaintiff’s] proposal to redevelop the sewer system of Accra was racially motivated and/or had a
racially discriminatory effect.” Id. ¶ 278. It is unclear what relevance these conclusory allegations have to the
instant matter, considering that the officer is not a named defendant and none of the plaintiff’s claims for relief are
based upon discriminatory animus.
5
plaintiff seeks from all defendants approximately $425 million in compensatory and punitive
damages. See id. Part VI ¶¶ 1–9.
On the misappropriation claim, the plaintiff included in its list of exhibits attached to the
pleading and filed on the public docket in this case, the documents it alleges to be the “trade
secret” documents. See id. ¶ 301 (referencing Exhibits 1 and 9). The Ghana Defendants,
Defendant Conti, and the KBG Defendants have moved to dismiss this action on numerous
grounds. See Ghana Defs.’ MTD; Conti MTD; KBG MTD, generally. The plaintiff’s Motion
for Sanctions against Defendant Vanderpuije and his attorneys is based upon exhibits attached to
the declaration provided by Defendant Vanderpuije in support of the Ghana Defendants’ Motion
to Dismiss. See Pl.’ Sanctions Mot., generally.
II. LEGAL STANDARD
“‘Federal courts are courts of limited jurisdiction,’ possessing ‘only that power
authorized by Constitution and statute.’” Gunn v. Minton, 133 S. Ct. 1059, 1064 (2013) (quoting
Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994)). Indeed, Federal courts
are “forbidden . . . from acting beyond our authority,” NetworkIP, LLC v. FCC, 548 F.3d 116,
120 (D.C. Cir. 2008), and, therefore, have “an affirmative obligation ‘to consider whether the
constitutional and statutory authority exist for us to hear each dispute.’” James Madison Ltd. by
Hecht v. Ludwig, 82 F.3d 1085, 1092 (D.C. Cir. 1996) (quoting Herbert v. Nat’l Acad. of Scis.,
974 F.2d 192, 196 (D.C. Cir. 1992)). Absent subject matter jurisdiction over a case, the court
must dismiss it. McManus v. District of Columbia, 530 F. Supp. 2d 46, 62 (D.D.C. 2007).
To survive a motion to dismiss under Federal Rule of Civil Procedure 12(b)(1), the
plaintiff must establish the court’s jurisdiction over the subject matter by a preponderance of the
evidence. See Lujan v. Defenders of Wildlife, 504 U.S. 555, 561 (1992); Bolden-Bey v. U.S.
6
Parole Comm’n, 731 F. Supp. 2d 11, 13 (D.D.C. 2010) (“On a motion to dismiss for lack of
subject matter jurisdiction pursuant to Rule 12(b)(1), the plaintiff bears the burden of
establishing by a preponderance of the evidence that the court has subject matter jurisdiction”).
When considering a motion under Rule 12(b)(1), the court must accept as true all uncontroverted
material factual allegations contained in the complaint and “construe the complaint liberally,
granting plaintiff the benefit of all inferences that can be derived from the facts alleged and upon
such facts determine jurisdictional questions.” Am. Nat’l Ins. Co. v. FDIC, 642 F.3d 1137, 1139
(D.C. Cir. 2011) (internal citations and quotation marks omitted). The court need not accept
inferences drawn by the plaintiff, however, if those inferences are unsupported by facts alleged
in the complaint or amount merely to legal conclusions. See Browning v. Clinton, 292 F.3d 235,
242 (D.C. Cir. 2002). In evaluating subject-matter jurisdiction, the court, when necessary, may
look beyond the complaint to “undisputed facts evidenced in the record, or the complaint
supplemented by undisputed facts plus the court’s resolution of disputed facts.” Herbert, 974
F.2d at 197; see also Alliance for Democracy v. FEC, 362 F. Supp. 2d 138, 142 (D.D.C. 2005).
III. DISCUSSION
The Ghana Defendants assert two primary arguments for dismissal that are interrelated
and, ultimately, dispositive. First, they assert that Ghana and the AMA are foreign sovereigns
under the Foreign Sovereign Immunities Act (“FSIA”), 28 U.S.C. §§ 1602 et seq., which
deprives United States courts of subject matter jurisdiction over claims against them. See Ghana
Defs.’ MTD at 1, ECF No. 51. Based on their assertion of sovereign immunity, the Ghana
Defendants argue that this action should be dismissed in its entirety, against all defendants, under
the doctrine articulated in Philippines v. Pimentel, 553 U.S. 851, 867 (2008) (“Pimentel”). See
id. Pimentel holds that “[a] case may not proceed when a required-entity sovereign is not
7
amenable to suit.” Pimentel, 553 U.S. at 867. Thus, the Court must first determine if the FSIA
applies to the Ghana Defendants and, if so, whether the foreign sovereigns are required-entities
such that this case may not proceed.
A. The FSIA’s Application To The Ghana Defendants
The FSIA states that “a foreign state shall be immune from the jurisdiction of the courts
of the United States” except in the case of three exceptions delineated in the FSIA. 28 U.S.C. §
1604; Samantar v. Yousuf, 560 U.S. 305, 313–14 (2010); see Van Beneden v. Al-Sansui, 709
F.3d 1165, 1166 (D.C. Cir. 2013) (noting the FSIA “protects foreign sovereigns from suit in the
United States unless Congress specifically provides otherwise.”). A “foreign state” for the
purposes of the FSIA includes “an agency or instrumentality of a foreign state . . . which is an
organ of a foreign state or political subdivision thereof.” 28 U.S.C. § 1603(a–b). None of the
parties to this action dispute that Ghana and the AMA are “foreign states” for the purposes of the
FSIA. See, e.g., FAC Part I.B ¶¶ 1–2 (“Defendant Republic of Ghana (Ghana) is a sovereign
foreign state[;]” and “Defendant Accra Metropolitan Assembly is a political subdivision of the
Republic of Ghana”); Ghana Defs.’ Mem. Supp Mot. Dismiss (“Ghana Defs.’ Mem.”) at 9, ECF
No. 51-1 (asserting the Republic of Ghana and the AMA are “foreign states”); Decl. of Prof.
Kofi Quashigah, Dean of the Law Faculty, University of Ghana (“Quashigah Decl.”) ¶¶ 2; 12,
ECF No. 51-7 (stating that the “Republic of Ghana is a sovereign state” and the AMA “is an
organ of the Republic of Ghana, established by the Ghanaian Constitution.”). 4 A foreign state is
4
The plaintiff has moved to strike the declarations submitted by the Ghana Defendants in support of their Motion to
Dismiss. Pl.’s Mot. Strike Decls. & Docs. Or Exs. Attach. Supp. Ghana Defs.’ Mot. Dismiss Pl.’s First Am. Compl.
(“Pl.’s Mot. Strike”) at 3, ECF No. 62. The plaintiff argues that such declarations are improper for the Court to
consider under Federal Rule of Civil Procedure 12(d). Pl.’s Mem. Supp. Mot. Strike at 5, ECF No. 62-1. The
plaintiff is incorrect. Since the Ghana Defendants are challenging the subject matter jurisdiction of the Court under
Federal Rule of Civil Procedure 12(b)(1), the Court may properly “consider the complaint supplemented by
undisputed facts evidenced in the record, or the complaint supplemented by undisputed facts plus the court’s
resolution of disputed facts.” Coalition for Underground Expansion v. Mineta, 333 F.3d 193, 198 (D.C. Cir. 2003);
8
“presumptively immune from the jurisdiction of United States courts[,] unless a specific
exception applies.” Saudi Arabia v. Nelson, 507 U.S. 349, 355 (1993); TMR Energy Ltd. v. State
Property Fund of Ukraine, 411 F.3d 296, 299 (D.C. Cir. 2005). This presumption of immunity
“is overcome only if the plaintiff shows that one of the exceptions to immunity provided in 28
U.S.C. §§ 1605–07 applies.” TMR Energy Ltd., 411 F.3d at 299.
The plaintiff argues that the so-called “commercial activity” exception to the FSIA, 28
U.S.C. § 1605(a)(2), applies to this matter. Pl.’s Opp’n at 14–16. That exception states that “[a]
foreign state shall not be immune from the jurisdiction of courts of the United States or of the
States in any case . . . (2) in which the action is based upon a commercial activity carried on in
the United States by the foreign state; or upon an act performed in the United States in
connection with a commercial activity of the foreign state elsewhere; or upon 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). As
legal support for its contention that this exception applies, the plaintiff merely cites a passage
from Republic of Argentina v. Weltover, Inc., 504 U.S. 607, 614 (1992), which held that “when a
foreign government acts, not as regulator of a market, but in the manner of a private player
within it, the foreign sovereign’s actions are ‘commercial’ within the meaning of the FSIA.”
Pl.’s Opp’n at 15. As factual support for its contention that the commercial activity exception
applies, the plaintiff offers thirteen “facts,” many of which are legal conclusions that need not be
accepted as true, see Hettinga v. United States, 677 F.3d 471, 476 (D.C. Cir. 2012), and none of
which support the plaintiff’s contention.
Gammill v. U.S. Dep’t of Educ., No. 11-409, 2013 WL 6053544, at *1, n.1 (Nov. 18, 2013) (same). Therefore, the
plaintiff’s Motion to Strike is denied as to the declarations pertaining to the Ghana Defendants’ 12(b)(1) motion.
9
At the outset, the plaintiff has not offered any affidavits or evidence, as required under
the burden shifting framework of the FSIA, to disprove the presumption. See Bell Helicopter
Textron, Inc. v. Islamic Republic of Iran, 734 F.3d 1175, 1183 (D.C. Cir. 2013) (“[T]he FSIA
begins with a presumption of immunity, [under] which the plaintiff bears the initial burden to
overcome by producing evidence that an exception applies, and once shown, the sovereign bears
the ultimate burden of persuasion to show the exception does not apply.”). Instead, the plaintiff
asserts, inter alia, that the construction loan at issue “has to be repaid in Washington, D.C.[;]”
certain monies from the loan have been earmarked “to pay the bribe fee” allegedly demanded by
the Ghana Defendants; the source of the loan funds is the United States Export-Import Bank,
which “is subject to the Foreign Corrupt Practices Act (FCPA)[;]” Defendant Vanderpuije and
the Defendant Conti “are US [sic] citizens coming within the FCPA[;]” extortion is a predicate
act under the civil RICO statute; the Export-Import Bank “has an interest in enforcing US [sic]
law[;]” and that United States courts “have jurisdiction to enforce US [sic] law and Ex[port]-
Im[port] Banks [sic] rules and regulations.” Pl.’s Opp’n at 15–16. In essence, the plaintiff
argues that because the sewer reconstruction project was to be paid for by a loan from the
Export-Import Bank of the United States, Ghana must be engaging in commercial activity. See
id. at 16 (plaintiff posing rhetorical question: “If that does not comprise commercial activity by
[Ghana] or [the] AMA in the USA. [sic], as well as outside of the USA with a direct effect in the
USA, what does?”). To the extent these statements are “facts” and not legal conclusions, they do
not help the plaintiff’s case.
Although “loans, guarantees or insurance provided by the Export-Import Bank of the
United States” can be grounds for the application of the commercial activity exception, see
Zedan v. Kingdom of Saudi Arabia, 849 F.2d 1511, 1513 (D.C. Cir. 1988) (quoting H.R. Rep.
10
No. 1487, 94th Cong., 2d Sess. 17 (1976)), the plaintiff points out that it is not challenging
validity of the sewer reconstruction contract or the memorandum of understanding that led to the
Export-Import Bank loan. See Pl.’s Opp’n at 17. Rather, the plaintiff is challenging the
allegedly tortious conduct that occurred in Ghana, i.e., the alleged extortion and
misappropriation. See id. The commercial exception to the FSIA applies only when the
“domestic commercial activity constitutes an ‘element[] of a claim that . . . would entitle [the
plaintiff] to relief under [its] theory of the case.’” Goodman Holdings v. Rafidain Bank, 26 F.3d
1143, 1146 (D.C. Cir. 1994) (quoting Saudi Arabia, 507 U.S. at 356). None of the “facts” relied
upon by the plaintiff form the elements of the claims for relief the plaintiff is asserting, since, as
the plaintiff concedes, the grant of the Export-Import Bank loan is completely unrelated to the
letting of the contract itself and the alleged extortion surrounding the awarding of the contract.
Thus, the “alleged commercial activities have absolutely no connection with the events
underlying [the plaintiff’s] claims against” Ghana and the AMA. See Peterson v. Islamic
Republic of Iran, 563 F. Supp. 2d 268, 273 (D.D.C. 2008).
The FAC alleges that, in Ghana, Defendant Vanderpuije sought bribes from the plaintiff
in return for a no-bid contract to rebuild Accra’s sewer system and, when the plaintiff refused to
pay the bribes, this defendant misappropriated the plaintiff’s allegedly proprietary trade secrets
and awarded the contract to Defendant Conti, allegedly because Defendant Conti was willing to
pay the requested bribe. See FAC, generally. The plaintiff asserts its legal claims against all of
the Ghana Defendants based upon the alleged actions of the single Ghanaian official, Defendant
Vanderpuije, but this assertion fails. As the Ghana Defendants point out, in order to fall within
the commercial activity exception, the commercial activity must be “by the foreign state.” See
28 U.S.C. § 1605(a)(2). Under Ghanaian law, Defendant Vanderpuije lacked the authority to
11
award a no-bid contract since all government contracts require approvals under “the 1992
Ghanaian Constitution, the Procurement Act, the Local Government Act, and the Environmental
Protection Agency Act.” Quashigah Decl. ¶ 17. Although the plaintiff offers the conclusory
statement that Defendant “Vanderpuije did in fact or de facto choose the company that was
awarded the NO-BID contract for reconstruction of the sewer system,” Pl.’s Opp’n at 14, it
specifically concedes that “only the central government could contract for and finance the Accra
sewer system project” and “under Ghana’s constitution and statutes, the central government
borrows funds and the central government by and through its cabinet level members enter [sic]
into such contracts, subject to the approval of financing by parliament.” FAC ¶ 148. This
concession is ultimately fatal to the plaintiff’s attempt to shoehorn the Ghana Defendants’
actions into the commercial activity exception. 5
The plaintiff fails to address the holding in Phaneuf v. Republic of Indonesia, 106 F.3d
302, 308 (9th Cir. 1997)—which is relied upon by the Ghana Defendants, see Ghana Defs.’
Mem. at 10–11—that when “the foreign state has not empowered its agent to act, the agent’s
unauthorized act cannot be attributed to the foreign state; there is no ‘activity of the foreign
state.’” The Phaneuf court specifically rejected the argument that apparent, or de facto, authority
was enough to trigger the commercial activity exception, finding that “Congress intended for the
exception to apply only in cases of actual authority.” Id. Since the actions of Defendant
Vanderpuije are the crux of all of the plaintiff’s claims, and the plaintiff admits that Defendant
Vanderpuije did not have actual authority to award the contract at issue, those claims, even if
5
The plaintiff also implicitly argues that Defendant Vanderpuije’s signature on the ultimate contract is somehow
relevant to his de facto power to award the contract and, consequently, to the application of the commercial
exception. See Pl.’s Opp’n at 14. It is black-letter law that “[a]n agent may bind the principal to a contract if the
agent entered into a contract while acting within the scope of his or her actual authority.” See, e.g., Uhar & Co., Inc.
v. Jacob, 840 F. Supp. 2d 287, 291 (D.D.C. 2012); see also RESTATEMENT (THIRD) OF AGENCY § 6.01, cmt. b.
Here, there is no dispute that Defendant Vanderpuije did not have “actual authority” to enter into a binding contract
on behalf of Ghana. Thus, his signature on the contract is of no import.
12
assumed to be true, cannot be attributed to Ghana or the AMA. Thus, the plaintiff has failed, at
the outset, to meet its burden of showing the commercial activity exception applies since it
admits that the actions undertaken by Defendant Vanderpuije were not of or by a foreign state. 6
Moreover, even assuming to be true the allegations that the awarding of the contract to
Defendant Conti was due to corruption and payment of a bribe, the plaintiff has failed to show
the requisite “direct effect” in the United States sufficient to bring the Ghana defendants’ actions
within the commercial activity exception. As the D.C. Circuit has noted, “[i]f a loss to an
American individual and firm resulting from a foreign tort were sufficient standing alone to
satisfy the direct effect requirement, the commercial activity exception would in large party
eviscerate the FSIA’s provision of immunity for foreign states.” Bell Helicopter Textron, Inc.,
734 F.3d at 1184 (quoting Antares Aircraft, L.P. v. Federal Republic of Nigeria, 999 F.2d 33, 36
(2d Cir. 1993)) (alteration in original). The plaintiff has offered no rationale as to why the
alleged misappropriation or any other tortious activity by the Ghana Defendants has had any
“direct effect” in the United States beyond an alleged loss to “an American individual and firm,”
which in this case is the plaintiff. The only colorable “fact” the plaintiff offers for this “direct
effect” analysis is an allegation that several Ghanaian officials travelled to the United States on
one occasion to visit the Export-Import Bank in Washington, D.C., in conjunction with
Defendant Conti, to discuss the loan for the project. See Pl.’s Opp’n at 15. The mere fact that
some Ghanaian officials travelled to the United States as part of negotiations regarding the sewer
project at issue is simply not enough to trigger the application of the commercial activity
6
Although the plaintiff does not elaborate on which of the three clauses contained in the commercial activity
exception applies, see Pl.’s Opp’n at 14–16, this opaqueness is immaterial because all three clauses require
“commercial activity . . . by the foreign state” or “commercial activity of the foreign state,” 28 U.S.C. § 1605(a)(2).
Considering that the plaintiff has made no allegations that Ghana or the AMA, acting through authorized agents with
actual authority, committed any of the acts that gave rise to the plaintiff’s claims for relief, the exception cannot
apply.
13
exception. See, e.g., Maritime Int’l Nominees Establishment v. Republic of Guinea, 693 F.2d
1094, 1109 (D.C. Cir. 1982) (finding two meetings by foreign officials regarding contract for
services with U.S. enterprise in United States too “transitory and insubstantial” to trigger
commercial activity exception). In any event, the plaintiff’s claims, as noted, do not arise from
the loan but instead from the alleged actions of a single Ghanaian government official.
Specifically, the plaintiff has alleged that a Ghanaian government official sought a bribe from the
plaintiff, the plaintiff declined, and the plaintiff did not receive a contract for an infrastructure
project paid for by Ghana to be completed in Accra. This falls woefully short of the requisite
showing that a foreign state engaged in commercial activity having a direct effect in the United
States, which is necessary to overcome the FSIA’s presumption of immunity. 7
In short, the plaintiff has failed to meet its burden of showing that a FSIA exception
applies and, consequently, has failed to overcome the presumption of sovereign immunity that
cloaks Ghana and the AMA. 8 Thus, the Court has no subject matter jurisdiction over the claims 9
against Ghana or the AMA. 10
7
To the extent that the plaintiff presents responsive arguments to the Ghana Defendants’ Motion to Dismiss in its
briefing related to unrelated motions, such arguments are untimely and not properly before the Court. See Pl.’s
Reply Mem. to Ghana Defs.’Opp’n to Pl.’s Am. Mot. to Stay, Suspend and to Hold Case in Abeyance and to Fix
Deadline to File Mot. for Leave to Amend Compl. (“Pl.’s Am. Stay Reply”) at 4–18, ECF No. 93. New arguments,
raised for the first time in a reply brief to an unrelated motion, were not timely filed in response to the Ghana
Defendants’ Motion to Dismiss, see LCvR 7(b), as they were filed seventy-six days after the Ghana Defendants’
Motion to Dismiss and after briefing on that motion had closed. See Ghana Defs.’ MTD (dated September 6, 2013);
Pl.’s Opp’n (dated October 7, 2013); Ghana Defs.’ Reply to Pl.’s Opp’n to Defs.’ MTD, ECF No. 67 (dated October
17, 2013); Pl.’s Am. Stay Reply (dated November 21, 2013). In any event, even if the arguments were timely
presented and the plaintiff had sought leave to file a sur-reply, consideration of the new arguments would make no
difference in the Court’s analysis since the plaintiff still admits that its claims are based on the alleged
misrepresentations and actions of Defendant Vanderpuije, which cannot be attributed to Defendant Ghana or
Defendant AMA. See Part III.A, supra; Pl.’s Am. Stay Reply at 4–16.
8
The Ghana Defendants also argue that this matter should be dismissed as to Ghana and the AMA under the “act of
state doctrine.” Ghana Defs.’ Mem at 20–21. This Circuit has noted the “strong similarity between this doctrine
and the FSIA,” but since the FSIA acts to limit subject matter jurisdiction over a federal court’s adjudication of a
matter involving foreign states, a jurisdictional challenge under the FSIA must be evaluated and resolved before
considering the act of state doctrine. See Millen Indus., Inc. v. Coordination Council for N. Am. Affairs, 855 F.2d
879, 881–82 (D.C. Cir. 1988). Here, since the Court lacks jurisdiction over the Ghana Defendants pursuant to the
FSIA, it consequently does not have the power to invoke the act of state doctrine. See id.
14
B. The Ghana Defendants Are Required-Entities Under Pimentel
The Ghana Defendants assert that, under Pimentel, this matter must be dismissed in its
entirety, a view shared by the Defendant Conti. See Ghana Defs.’ Mem. at 18; Conti MTD at 1,
n.2, ECF No. 40. The plaintiff does not respond to this argument in its opposition to the Ghana
Defendants’ motion. See Pl.’s Opp’n, generally; Ghana Defs.’ Reply to Pl.’s Opp’n to Defs.’
MTD (“Ghana Defs.’ Reply”) at 9–10, ECF No. 67. Thus, the Court “may treat the plaintiff’s
failure to oppose the defendant[s’] . . . arguments as a decision to concede those arguments.”
Nat’l Sec. Counselors v. CIA, 898 F. Supp. 2d 233, 268 (D.D.C. 2012) (citing Buggs v. Powell,
293 F. Supp. 2d 135, 141 (D.D.C. 2003) (citing FDIC v. Bender, 127 F.3d 58, 67–68 (D.C. Cir.
1997))). Even if the plaintiff had not conceded this point, however, the Ghana Defendants are
correct in arguing that Pimentel bars further consideration of this matter.
In Pimentel, the Supreme Court held that, when parties to a suit possess sovereign
immunity and are required parties under Federal Rule of Civil Procedure 19, “dismissal of the
action must be ordered where there is a potential for injury to the interests of the absent
sovereign.” Pimentel, 553 U.S. at 867. In the instant matter, the plaintiff’s claims are, at base,
those of a disappointed bidder that failed to win a contract with a foreign government. See Pl.’s
Opp’n at 17 (“What is being requested is for a jury to decide whether . . . the Conti-Ghana
9
Notably, even if the Court had jurisdiction over this matter, the plaintiff likely has destroyed its own
misappropriation claim by filing un-redacted, complete versions of the documents it alleges were trade secrets,
particularly Exhibits 1 and 9, Pl.’s Exhibits at 1–72; 94–195, on the public docket in this matter. See Littlejohn v.
Bic Corp., 851 F.2d 673, 680 (3d Cir. 1988) (“It is well established that the release of information in open court ‘is a
publication of that information and, if no effort is made to limit its disclosure, operates as a waiver of any rights a
party had to restrict its future use.’”) (quoting Nat’l Polymer Prods. v. Borg-Warner Corp., 641 F.2d 418, 421 (6th
Cir. 1981)). Additionally, the plaintiff made no effort to secure confidentiality agreements before dissemination of
the documents containing purported trade secrets, thereby calling into question whether the plaintiff established the
requisite “reasonable efforts to safeguard [their] secrecy,” Armenian Assembly of America, Inc. v. Cafesjian, 692 F.
Supp. 2d 20, 43 (D.D.C. 2010), especially in light of the multiple parties to which it disclosed the allegedly secret
information, see Part I, supra.
10
Since the Court finds it has no subject matter jurisdiction over claims involving Ghana and the AMA, it is
unnecessary to address the Ghana Defendants’ other arguments, including their motion to dismiss for failure to state
a claim under Federal Rule of Civil Procedure 12(b)(6).
15
contract was procured by [Defendant] Conti promising to pay [Defendant] Vanderpuije a bribe,
as a predicate act under Plaintiff’s RICO conspiracy and enterprise claim.”). Thus, the plaintiff
is asking for an examination of the reasons for, and propriety of, a foreign sovereign’s decision
to award a contract for a construction project in a foreign state. 11 Such an examination is
prohibited by Pimentel.
“There is a comity interest in allowing a foreign state to use its own courts for a dispute if
it has a right to do so.” Pimentel, 553 U.S. at 866. In the instant matter, the sovereign
defendants, Ghana and the AMA, have a legitimate interest in “events of . . . political
significance for the Republic and its people.” Id. The proposed project would, as the plaintiff
notes, “alleviate the flooding problem [in Accra] with the attendant savings of hundreds of lives
and millions of dollars in property.” Pl.’s Opp’n at 10; see also Decl. of Major Mahama Samuel
Tara, Chief Director, Ministry of Finance of the Republic of Ghana (“Tara Decl.”) ¶ 7, ECF No.
51-6 (“[T]his is a matter of significant importance to the people of Ghana. The subject dispute
relates to a project for improvements to infrastructure in Ghana and, as such, it is a matter of
local significance.”). Additionally, the plaintiff has alleged that a major Ghanaian official,
Defendant Vanderpuije, engaged in corrupt practices. See, e.g., Pl.’s Opp’n at 11. Resolving
such matters of substantial domestic and political significance falls squarely within the types of
interests held by the Ghana Defendants that could be compromised by adjudication of this suit in
11
Although not necessary to resolve the plaintiff’s claim, the Ghana Defendants make plain the basis for the
selection of Defendant Conti instead of the plaintiff to construct the project. As the Ghana Defendants note, the
plaintiff was created solely to attempt to “pursue the subject project,” whereas Conti “is an established company
with extensive experience in” infrastructure development and came “highly recommended by officials of the United
States Embassy in Accra.” Decl. of Samuel Nana Ayeh-Datey, Coordinating Director, AMA (“Ayeh-Datey Decl.”)
¶ 9, ECF No. 51-8. Indeed, the plaintiff appears to backpedal about its planned role in the project, stating in its
opposition that the plaintiff was merely a “developer” that “was to marshal the resources requisite to completion of
the sewer project.” Pl.’s Opp’n at 7. This is difficult to reconcile with the plaintiff’s characterization of the KBG
Defendants in its FAC as “subcontractors,” clearly implying that the plaintiff intended to be the “prime”
construction contractor on the project. See, e.g., FAC ¶ 74 (“KBG would be identified . . . as the subcontractor to
[the plaintiff] providing project and program construction management services on the” project.).
16
the United States. See Pimentel, 553 U.S. at 869 (finding claims based on alleged public
corruption to implicate “important comity concerns” to which courts must “accord proper weight
to the compelling claim of sovereign immunity.”).
Since the sovereign defendants have a significant “interest relating to the subject of the
action” and “disposing of the action in the [sovereign defendants’] absence may . . . impede the
[sovereign defendants’] ability to protect the[ir] interest,” the sovereign defendants are required
parties under Federal Rule of Civil Procedure 19(a)(1)(B). Pimentel holds unambiguously that in
such a situation, where a sovereign is a required party for the purposes of Rule 19, the case must
be dismissed. See Pimentel, 553 U.S. at 867.
Consequently, since principles of comity, as articulated in Pimentel, militate strongly
against resolution of this matter in this Court due to the significant risk of implicating, and
possibly injuring, the sovereign entities’ interests, the Court finds that, even if this argument
were not conceded by the plaintiff, dismissal of this action in its entirety would be required. 12
C. The Plaintiff’s Rule 11 Sanctions Motion
The FSIA and Pimentel resolve or render moot all motions pending in this suit, save for
the plaintiff’s motion for sanctions against Defendant Vanderpuije and his lawyers. See Pl.’s
Sanctions Mot., generally. In its motion for sanctions, the plaintiff alleges that two emails
attached to Defendant Vanderpuije’s declaration were “fraudulent and forged.” Id. at 1. The two
emails were “purported to be authentic emails” from Adjetey Defendants Gideon and Mark
“asserting that [Defendant] Vanderpuije had not solicited a bribe.” Pl.’s Mem. Supp. Sanctions
12
Although no motion to amend the complaint a second time has been filed, the plaintiff has indicated it plans to
seek leave to amend its Complaint again to address the shortcomings pointed out in the defendants’ briefing. See,
e.g., Pl.’s Am. Mot. Stay ¶ 3. Since the nexus of this suit is the propriety of the sovereign entities’ awarding of the
sewer contract to Defendant Conti, see Pl.’s Opp’n at 17, any amendment contemplated by the plaintiff could not
overcome the comity concerns articulated by the sovereign defendants. The Court makes this evaluation in light of
the plaintiff’s Amended Complaint, which exhaustively detailed, in 216 pages, the plaintiff’s factual and legal
claims, and in “aggregate some One Thousand (1,000) pages or more” of briefing submitted in connection with the
multiple pending motions. Pl.’s Am. Mot. Stay ¶ 2. Consequently, this suit is dismissed with prejudice.
17
Mot. (“Pl.’s Sanctions Mem.”) at 5, ECF No. 89-1. The Ghana Defendants included lengthy
excerpts from the emails in the background section of their Memorandum in Support of their
Motion to Dismiss, relying on them to support the argument that Defendant Vanderpuije did not,
in fact, accept any bribes in connection with the sewer contract. See Ghana Defs.’ Mem. at 7–8.
The plaintiff moved to strike the emails and, “[a]fter Plaintiff presented . . . evidence that
said emails were forged, Defendants’ counsel failed to withdraw, sua sponte, Vanderpuije’s
Declaration and Exhibits, so on November 1, 2013, Plaintiff, pursuant to Fed. R. Civ. P. 11(c),
served a Motion for Sanctions on Defendant Vanderpuije’s counsels [sic].” Pl.’s Sanctions
Mem. at 6. The plaintiff’s evidence of forgery consisted of a conversation that the plaintiff’s
members had, including the Adjetey Defendants, in St. Louis, Missouri, on October 30, 2013.
See Decl. of Elbert A. Walton, Jr., Vice-President/General Counsel, TJGEM LLC (“Walton
Decl.”) ¶¶19–25, ECF No. 105-1. During this conversation, the Adjetey Defendants allegedly
admitted that Defendant Vanderpuije “requested that Vanderpuije be paid compensation for
Vanderpuije awarding [the plaintiff] the Accra sewer system reconstruction project contract and
that [Defendant] Gideon had documentary evidence thereof.” Walton Decl. ¶¶ 19–20; Decl. of
Anthony L. Weaver, President, TJGEM LLC (“Weaver Decl.”) ¶ 23, ECF No. 105-2. 13 The
defendants withdrew the challenged emails and all references to them on November 18, 2013,
less than three weeks after the filing of the plaintiff’s sanctions motion. See Not. of Withdrawal
13
These declarations, along with the declaration of Ronald Pennington, an Information Technology expert who
examined the emails and opined that the emails were forged, Decl. of Ronald Pennington, Sr. Technical Specialist,
Wachovia/A.G. Edwards Technology Group, Inc. (“Pennington Decl.”) ¶ 12, ECF No. 105-4, were filed in reply to
the Ghana Defendants’ opposition to the plaintiff’s motion for sanctions. The plaintiff’s initial motion contained no
declarations or other factual support for its contentions regarding the authenticity or truthfulness of the emails. See
Pl.’s Sanctions Mot., generally.
18
of Exs. Attached to Decl. of Alfred O. Vanderpuije and References Thereto (“Defs.’ Withdrawal
Not.”) at 1, ECF No. 87. 14
Federal Rule of Civil Procedure 11(c)(2) requires that “[a] motion for sanctions must be
made separately from any other motion and must describe the specific conduct that allegedly
violates Rule 11(b). The motion must be served under Rule 5, but it must not be filed or
presented to the court if the challenged paper, claim, defense, contention, or denial is withdrawn
or appropriately corrected within 21 days after service . . .” (emphasis added). Here, the
plaintiff avers that it served the Ghana Defendants with the proposed Rule 11 motion on
November 1, 2013, and the Ghana Defendants withdrew the challenged submissions on
November 18, 2013. Pl.’s Sanctions Mem. at 6.
Consequently, the Ghana Defendants’ actions fall within the safe harbor provision in
Rule 11(c)(2). The plaintiff’s Rule 11 motion was filed before the safe harbor period expired
and after the documents had been withdrawn. See Pl.’s Sanctions Mot. (filed on November 20,
2013, i.e., twenty days after serving of motion on Ghana Defendants). Thus, the plaintiff’s
sanctions’ motion is invalid. 15 “This procedural rule must be satisfied before the Court considers
the substantive aspects of plaintiff’s motion.” Brown v. FBI, 873 F. Supp. 2d 388, 408 (D.D.C.
14
Although the Ghana Defendants indicate that they withdrew the exhibits with the challenged emails, and all
references to them, in order to avoid the “risk [of] distracting from the merits” of the Ghana Defendants’ Motion to
Dismiss, Ghana Defs.’ Opp’n Pl.’s Sanctions Mot. at 8, ECF No. 100, the Court notes that the Ghana Defendants
continue to buttress the authenticity of the emails through two declarations from the Adjetey Defendants. These
declarations, which were submitted in opposition to the plaintiff’s sanctions motion, merely state that “the text of the
email is exactly as I sent it to Mayor Alfred Vanderpuije,” Decl. of Gideon Adjetey ¶ 3, ECF No. 100-4, and “[t]he
text of the email is exactly as I sent it to Gideon Adjetey and Jonathan Adjetey,” Decl. of Mark Adjetey ¶ 3, ECF
No. 100-5. As the plaintiff rightfully points out, these declarations may address the plaintiff’s concerns about
alleged forgery or authenticity of the emails, but plainly fall short of attesting to the truthfulness of the matters
contained therein, namely, whether Defendant Vanderpuije solicited bribes. See Pl.’s Reply Ghana Defs.’ Opp’n
Pl.’s Sanctions Mot. at 8–10, ECF No. 105.
15
The plaintiff appears to argue that, despite fully complying with Rule 11(c)(2), the defendants’ counsel somehow
committed a fraud upon the court and acted without good faith. See Pl.’s Reply Defs.’ Opp’n Pl.’s Sanctions Mot. at
17–19, ECF No. 105. In support of this contention, the plaintiff cites Breezevale Ltd. v. Dickinson, 879 A.2d 957
(D.C. 2005), which is both factually and legally inapposite. In that case, a jury considering a legal malpractice claim
found that certain documents, which formed the basis of the claim, were forged, thus negating the plaintiff’s grounds
for relief. Breezevale Ltd., 879 A.2d at 960. Rule 11 was neither discussed nor invoked in that case.
19
2012). Since the plaintiff failed to comply with Rule 11(c)(2), 16 the motion for sanctions is
denied. 17
IV. CONCLUSION
In its memorandum supporting its motion for sanctions, the plaintiff confidently
announces that it “is but a matter of time as the Plaintiff engages in Discovery in its march to a
judgment for Plaintiff for $317,426,250.00, including punitive damages!” Pl.’s Sanctions Mem.
at 3. For the aforementioned reasons, that march ends today. The Ghana Defendants’ Motion to
Dismiss, ECF No. 51, is granted and this matter is dismissed as to all defendants. Consequently,
all remaining motions are denied as moot, except for the plaintiff’s motions to strike the Ghana
Defendants’ declarations and for sanctions, which are both denied.
An appropriate Order accompanies this Memorandum Opinion.
Digitally signed by Beryl A. Howell
Date: December 31, 2013 DN: cn=Beryl A. Howell, o=District Court
for the District of Columbia, ou=District
Court Judge,
email=howell_chambers@dcd.uscourts.go
v, c=US
__________________________
Date: 2013.12.31 12:28:59 -05'00'
BERYL A. HOWELL
United States District Judge
16
The plaintiff urges the Court to sanction defense counsel under 28 U.S.C. § 1927, Pl.’s Sanctions Mem. at 9–10,
which applies “only when the attorney acts in subjective bad faith.” Hilton Hotels Corp. v. Banov, 899 F.2d 40, 45,
n.9 (D.C. Cir. 1990) (emphasis in original). The plaintiff has, as the Ghana Defendants point out, “provided nothing
but argumentation and innuendo” to show defense counsel has acted in subjective bad faith. Ghana Defs.’ Opp’n
Pl.’s Sanctions Mot. at 20, ECF No. 100. Section 1927 sanctions are therefore unwarranted.
17
The Ghana Defendants’ request for attorneys’ fees as a prevailing party under Rule 11(c)(2) is denied because, as
the Ghana Defendants point out, Rule 11 sanctions are an extreme punishment for filing pleadings that frustrate the
judicial process. Brown, 873 F. Supp. 2d at 408 (citation omitted); Ghana Defs.’ Opp’n Pl.’s Sanctions Mot. at 12.
The Court is not convinced that the plaintiff acted in bad faith or improperly in seeking withdrawal of the subject e-
mails in light of the substantial questions raised about their reliability and the truthfulness of their contents.
20