Dentons US LLP v. Republic of Guinea ( 2016 )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
DENTONS US LLP,
Plaintiff,
v. Civil Action No. 14-1312 (RDM)
THE REPUBLIC OF GUINEA, et al.,
Defendants.
THE REPUBLIC OF GUINEA, et al.,
Counterclaims and Third-Party
Plaintiffs,
v.
DENTONS US LLP, et al.,
Counterclaims and Third-Party
Defendants.
MEMORANDUM OPINION AND ORDER
In August 2014, Dentons US LLP (“Dentons US”) filed a complaint against the Republic
of Guinea and its Ministry of Mines and Geology (collectively, “Guinea”), alleging claims for
breach of contract, quantum meruit, unjust enrichment, and account stated. See Dkt. 1
(“Compl.”). Dentons US alleges, in particular, that Guinea has not paid more than $10 million in
legal fees for work performed by Dentons US and its British and French affiliates on behalf of
Guinea on a large natural resources development project. Compl. ¶¶ 3–6, 59. Guinea answered
that complaint and counterclaimed, asserting its own breach of contract claim, as well as claims
for breach of fiduciary duty, fraudulent inducement, and injunctive relief. Dkt. 25
(“Countercl.”). Guinea also asserted those same claims against three third-party defendants:
Salans FMC SNR Denton Group (a Swiss Verein) (“the Dentons Verein”), Dentons Europe LLP
(“Dentons Europe”), and Dentons UKMEA LLP (“Dentons UKMEA”) (collectively, “Third-
Party Defendants”). Countercl. ¶¶ 2, 8–14.
Dentons US now moves, pursuant to Rule 12(b)(6), to dismiss Counts III (fraudulent
inducement) and IV (injunctive relief) for failure to state a claim upon which relief may be
granted, and, pursuant to Rule 12(f), to strike Guinea’s allegations relating to the Ebola crisis as
“[i]rrelevant and [p]rejudicial.” Dkt. 39 at 8, 14–23. The Third-Party Defendants, in turn, move
to dismiss all of the claims asserted against them on multiple grounds. Dkt. 40. The Dentons
Verein argues that because Guinea’s claims against it stem from the incorrect “notion that [the
Dentons Verein] engages in the practice of law,” those claims must fail. Id. at 7. Dentons
Europe and Dentons UKMEA, in turn, argue that the contract governing their relationships with
Guinea “unambiguously provide[s] for exclusive jurisdiction in foreign courts” in accordance
with the contract’s “forum-selection clauses.” Id. All three Third-Party Defendants, moreover,
contend that Counts I (breach of contract), III, and IV each fail to allege one or more essential
elements and thus fail to state a claim. Id.
For the reasons explained below, the Court will grant Dentons US’s motion to dismiss
Count III; grant, in part, its motion to dismiss Count IV; and deny its motion to strike. The Court
will also grant the Third-Party Defendants’ motion to dismiss all Counts against Dentons Europe
and Dentons UKMEA, and will grant their motion to dismiss Counts II and III, and, in part,
Count IV as asserted against the Dentons Verein, but will deny their motion to dismiss Counts I
and, in part, Count IV, as asserted against the Dentons Verein.
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I. BACKGROUND
For purposes of the pending motions to dismiss, the following facts, which are taken from
Guinea’s counterclaims and third-party complaint and from documents incorporated by
reference, are taken as true. See Am. Nat’l Ins. Co. v. FDIC, 642 F.3d 1137, 1139 (D.C. Cir.
2011); see also Nichols v. Vilsack, No. 13-01502, 2015 WL 9581799, at *1 (D.D.C. Dec. 30,
2015) (explaining that in “adjudicating a motion to dismiss for failure to state a claim, a court
may consider, along with the facts alleged in the complaint, ‘any documents either attached to or
incorporated in the complaint and matters’ subject to ‘judicial notice’”) (quoting EEOC v. St.
Francis Xavier Parochial Sch., 117 F.3d 621, 624 (D.C. Cir. 1997)). Most notably, this includes
the relevant retainer agreements, which are expressly referenced in Guinea’s counterclaims and
third-party complaint, and upon which all of the parties rely in their respective briefs. To the
extent the plain terms of those agreements contradict the factual allegations of Guinea’s
counterclaims and third-party complaint, moreover, the Court need not accept the conflicting
allegations. See Kaempe v. Myers, 367 F.3d 958, 963 (D.C. Cir. 2004).
In an effort to develop natural resources discovered in the Simandou region of Guinea,
the Republic of Guinea and its Ministry of Mines and Geology initiated the “Simandou Project”
with the sponsorship of several investors and the World Bank. Countercl. ¶15. Guinea “sought
legal counsel” for the project and, at the request of its sponsors, targeted “counsel experienced in
the development of sovereign resources” who could “advise the government” on the
“infrastructure necessary to develop the nationally-owned mineral resources” found at the site.
Countercl. ¶¶ 15–16. Guinea retained “SNR Denton” as counsel to work on the Simandou
Project, Countercl. ¶ 17, and, on August 25, 2012, Mohamed Lamine Fofana, Guinea’s Minister
of Mines and Geology, formalized the representation agreement, stating that “SNR Denton US
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LLP[’s]” “appointment as Ministry’s Counsel . . . [was] considered to have begun on May 2,
2012” and would “continue . . . until September 30, 2012,” Dkt. 1-4 at 33 (Compl. Ex. 4).
On December 24, 2012, the parties executed an agreement to cover the three months that
had passed since September 30, 2012, and to extend the representation into the future. Dkt. 1-4
at 1 (Compl. Ex. 4); Countercl. ¶ 40. The new agreement (the “Retainer Agreement”) was
divided into two parts: the “Engagement [L]etter,” which set out the specific terms of the
retention, Dkt. 1-4 at 1–6 (Compl. Ex. 4), and the “Terms of Business,” which “contain[ed] the
general terms and conditions applicable” to the Firm’s “international working groups,” id. at 3,
8–32.
A. The Retainer Agreement
1. The Parties
Dentons US, the Third-Party Defendants, and Guinea dispute which Dentons entities
were parties to the Retainer Agreement. According to Dentons US and the Third-Party
Defendants, only Dentons US was a party to the agreement. See Dkt. 39 at 9; Dkt. 40 at 19–22.
In contrast, Guinea alleges that Dentons US and each of the Third-Party Defendants—and
perhaps other Dentons entities—were parties to the agreement. See Countercl. ¶¶ 3–5. The
following facts, however, are not disputed.
First, the Engagement Letter was signed by Jonathan D. Cahn, a partner in Dentons US’s
Washington, D.C. office. Dkt. 1-4 at 5, 33, 37 (Compl. Ex. 4); Dkt. 39 at 9. He does not,
however, identify his affiliation in the Engagement Letter, which was printed on “SNR
DENTON” letterhead. Dkt. 1-4 at 1, 5 (Compl. Ex. 4). Second, the Engagement Letter asserts
that Guinea is engaging “the firm SNR Denton US LLP and its affiliates,” which it then refers to
collectively as “the Firm.” Id. at 1. Third, the Engagement Letter states that the Terms of
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Business would apply to the engagement and explains that the Terms of Business apply “to all
our international working groups.” Id. at 3. Fourth, the Terms of Business, which is on “SNR
Denton” letterhead similar to that used for the Engagement Letter, in turn, asserts that “SNR
Denton is the collective trade name for an international legal practice including SNR Denton
Group (a Swiss Verein), SNR Denton UK LLP, SNR Denton US LLP and their affiliated
undertakings, each of which is a separate and distinct legal entity.” Id. at 8. Fifth, under a
section captioned “Contracting Parties,” the Terms of Business states that “[w]e may appoint
other Practices”—that is, other “distinct legal entit[ies] . . . that are Member[s] of” the Dentons
Verein—“to assist with your matter” as either a subcontractor or agent. Id. at 9. Finally, the
Terms of Business includes additional location-specific contract provisions for Dentons US, id.
at 29–30, Dentons UKMEA, id. at 27–29, and Dentons Europe, id. at 17–18, but not for the
Dentons Verein, and, aside from the Engagement Letter’s outline of the hourly rates of
employees at various offices, the Third-Party Defendants are not otherwise mentioned in the
Retainer Agreement, see, e.g., id. at 1–6.
2. Compensation
The Retainer Agreement also addresses the terms of the Firm’s compensation in some
detail. In particular, the Engagement Letter states that, although the “Firm[’]s” “costs and fees”
are typically “due upon receipt of [its] invoice,” the Firm understood that Guinea did not
“currently have the necessary funds to pay for the costs and fees of the representation.” Dkt. 1-4
at 4, 10 (Compl. Ex. 4); Countercl. ¶ 18. “[W]ell aware of [Guinea’s] urgent needs,” the “Firm”
agreed to “defer collection of fees and expenses . . . until the appropriate financing [was] in
place,” so long as Guinea “implement[ed] in good faith all efforts necessary to secure funding for
[the Firm’s] representation, either through [Guinea’s] budget or through external funding.” Dkt.
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1-4 at 4 (Compl. Ex. 4); Countercl. ¶¶ 18–19. The Engagement Letter further “authorizes the
Firm to seek, with third parties, various options for the financing of its representation, and to
present th[o]se options in the form of a written proposal to [Guinea] for its consideration.” Dkt.
1-4 at 4 (Compl. Ex. 4). Although the Engagement Letter explains that any amounts collected
from those third-parties would be deducted from “the amounts due by [Guinea],” id. at 5, the
Terms of Business states that even “[w]here [Guinea] expect[s] a third party to reimburse” it for
the Firm fees, the Firm remains “entitled to recover payment in full from [Guinea]” whether or
not the external funding source pays “on time or at all,” id. at 10.
3. Dispute Resolution
The Retainer Agreement also includes terms that discuss how disputes between the
parties were to be handled. Countercl. ¶¶ 66–73. In the Engagement Letter, the Firm states that,
should Guinea “have any concern about any aspect of [the Firm’s] services, including [its]
invoices,” it should contact one of three designated employees—two in the Washington, D.C.
office of Dentons US and one in the London office of Dentons UKMEA—who were “committed
to resolving any issue” raised. Dkt. 1-4 at 5 (Compl. Ex. 4). To this, the Engagement Letter
adds that the Firm has “a formal complaints procedure . . . available upon request.” Id. The
Terms of Business echoes this statement, noting that should Guinea become “dissatisfied with
any aspect of [the Firm’s] services, including the invoice,” it should “contact the Partner with
overall responsibility” for Guinea’s project and that the Firm has a “complaints policy.” Id. at
13.
Should a conflict between the parties escalate, the Terms of Business specifies particular
“dispute resolution mechanisms” for “each Practice” in its location-specific sections. Id. at 13.
For disputes relating to Dentons Europe, for example, the Terms of Business states that “French
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law governs all the agreements and arrangements” made between the parties and that, if “any
claim, dispute, or difference of any kind whatsoever arises,” the parties “agree to submit to the
exclusive jurisdiction of the French courts.” Id. at 18. The Terms of Business goes on to explain
that “[a]ny disputes relating to the amount and payment of [Dentons Europe’s] fees shall be
submitted to arbitration by the Bâtonnier of the Paris Bar Association.” Id. Similarly, the Terms
of Business states that disputes relating to Dentons UKMEA are “govern[ed]” by “English law”
and that the parties agree to “submit to the exclusive jurisdiction of the English courts,” save for
instances in which Dentons UKMEA, “at [its] sole option,” chooses to “refer the . . . dispute . . .
to arbitration in London.” Id. at 29. In contrast, the Terms of Business does not include forum
selection (or arbitration) clauses for claims involving Dentons US’s Washington, D.C. office or
the Dentons Verein. See id. at 14–32.
B. Representation
The parties executed the Retainer Agreement in December of 2012. Countercl. ¶ 40.
Pursuant to the agreement, Guinea “retain[ed] . . . attorneys” in the “Washington[, D.C.],
London, and Paris offices” of various Dentons entities. Countercl. ¶ 17. Although disputed,
Guinea alleges that it “advanced every good faith effort available to it” to “secure funding for
[the Firm’s work on] the Simandou Project,” but those efforts proved unsuccessful. Countercl.
¶ 28. Guinea further alleges that, although it “authorized” the Firm to “communicate directly”
with project sponsors like “Rio Tinto” and with the “World Bank,” the Firm “failed to secure
payment.” Countercl. ¶¶ 20–21, 32–33. The parties agree, moreover, that Guinea made a $2
million payment to Dentons US. According to Dentons US, Guinea made the payment in partial
fulfillment of its obligations under the Retainer Agreement. Compl. ¶¶ 42–43. According to
Guinea, in contrast, the payment was provided as “a good faith” “advance” in order to provide
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the Firm “time to arrange third party funding,” Countercl. ¶23, but Guinea anticipated that
Dentons US would reimburse this amount to it after the Firm obtained third-party funding,
Countercl. ¶ 24. Ultimately, the Firm “withdrew as counsel” and Guinea “was forced to retain
new counsel” at substantial expense to “complete[ ] the work” on the Simandou Project.
Countercl. ¶¶ 33–37.
C. Procedural History
Dentons US filed suit in this Court in 2014, “seek[ing] to recover the value” of unpaid
“legal fees and costs” stemming from the Firm’s representation of Guinea and its work on the
Simandou Project from May 2012 to June 2013. See generally Compl. ¶¶ 2–7, 19–59. Guinea
moved to dismiss Dentons US’s complaint on sovereign immunity and forum non conveniens
grounds and because the Retainer Agreement purportedly “waived any possible right” for
Dentons US to bring its “claim for fees in a U.S. Court.” See Dkt. 15 at 1–2. The Court denied
Guinea’s motion on all grounds. See Dkt. 21. Guinea then answered Dentons US’s complaint,
counterclaimed with four of its own causes of action, and filed a third-party complaint against
the Dentons Verein, Dentons Europe, and Dentons UKMEA, alleging the same four causes of
action. See Dkt. 25.
II. LEGAL STANDARD
A motion to dismiss brought under Federal Rule of Civil Procedure 12(b)(6) is designed
to “test[] the legal sufficiency of a complaint.” Browning v. Clinton, 292 F.3d 235, 242 (D.C.
Cir. 2002). In evaluating such a motion, the Court “must first ‘tak[e] note of the elements a
plaintiff must plead to state [the] claim’ to relief, and then determine whether the plaintiff has
pleaded those elements with adequate factual support to ‘state a claim to relief that is plausible
on its face.’” Blue v. District of Columbia, 811 F.3d 14, 20 (D.C. Cir. 2015) (quoting Ashcroft v.
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Iqbal, 556 U.S. 662, 675, 678 (2009)) (alterations in original) (internal citation omitted).
Although “detailed factual allegations” are not necessary to withstand a Rule 12(b)(6) motion,
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007), “a complaint must contain sufficient
factual matter, [if] accepted as true, to ‘state a claim to relief that is plausible on its face,’” Iqbal,
556 U.S. at 678 (quoting Twombly, 550 U.S. at 570). A plaintiff may survive a Rule 12(b)(6)
motion even if “recovery is very remote and unlikely,” but the facts alleged in the complaint
“must be enough to raise a right to relief above the speculative level.” Twombly, 550 U.S. at555–56 (quotation marks omitted).
In those cases in which the Court concludes that the complaint—or a particular count in
the complaint—fails to state a claim, it must then determine whether the complaint—or count—
should be dismissed with or without prejudice. Given the preference voiced in the Federal Rules
of Civil Procedure for resolving disputes on their merits, “[d]ismissal with prejudice is the
exception, not the rule, in federal practice.” Rudder v. Williams, 666 F.3d 790, 794 (D.C. Cir.
2012). “Accordingly, the ‘standard for dismissing a complaint with prejudice is high: dismissal
with prejudice is warranted only when . . . the allegation of other facts consistent with the
challenged pleading could not possibly cure the deficiency.’” Id. (quoting Belizan v. Hershon,
434 F.3d 579, 583 (D.C. Cir. 2006)) (alterations in original).
Finally, under Federal Rule of Civil Procedure 12(f), the Court “may order stricken from
any pleading . . . any redundant, immaterial, impertinent, or scandalous matter.” The “decision
to grant or deny a motion to strike is vested in the trial judge’s sound discretion,” Aftergood v.
CIA, 355 F. Supp. 2d 557, 564 (D.D.C. 2005), but motions to strike “are not favored . . . and
should usually be denied ‘unless it is clear that the allegations in question can have no possible
bearing on the subject matter of the litigation,’” Cobell v. Norton, 224 F.R.D. 1, 2 (D.D.C. 2004)
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(quoting Ulla-Maija, Inc. v. Kivimaki, 2003 WL 169777, at *4 (S.D.N.Y. Jan. 23, 2003)); see
also Aftergood, 355 F. Supp. 2d at 565 (noting that “absent a ‘strong reason for so doing,’ courts
will generally ‘not tamper with pleadings’” (quoting Lipsky v. Commonwealth United Corp., 551
F.2d 887, 893 (2d Cir. 1976)). Although federal courts retain the discretion to strike immaterial
allegations even in the absence of prejudice to the moving party, in practice, “many courts will
grant such a motion only if the portions sought to be stricken as immaterial are also prejudicial or
scandalous.” Uzlyan v. Solis, 706 F. Supp. 2d 44, 52 (D.D.C. 2010) (quotation marks omitted).
But, if the challenged allegations are both “irrelevant and prejudicial to the defendant, a motion
to strike will be granted.” Wiggins v. Philip Morris, Inc. 853 F. Supp. 457, 457 (D.D. C. 1994).
III. ANALYSIS
A. Fraud in the Inducement
To state a claim for fraudulent inducement, the complaint must allege that the defendant
(1) made a false representation, (2) regarding a material fact, (3) with knowledge of the falsity of
that representation, (4) and an intent to deceive, and that (5) the plaintiff acted in reliance on that
false representation. See McWilliams Ballard, Inc. v. Level 2 Dev., 697 F. Supp.2d 101, 108
(D.D.C. 2010) (citing In re McKenney, 953 A.2d 336, 342 (D.C. 2008)). Moreover, “[a]t least in
cases involving commercial contracts negotiated at arm’s length, there is the further requirement
(6) that the defrauded party’s reliance be reasonable.” Hercules & Co. v. Shama Rest. Corp.,
613 A.2d 916, 923 (D.C. 1992); see also Regan v. Spicer HB, LLC, 134 F. Supp. 3d 21, 36
(D.D.C. 2015). As with other claims premised on allegations of fraud, a claim for fraudulent
inducement “must be pled with particularity under Rule 9(b) of the Federal Rules of Civil
Procedure.” Buy Back District of Columbia, LLC v. Home Depot USA, Inc., 2004 WL 4012265,
at *1 (D.D.C. Dec. 14, 2004). That means, as the D.C. Circuit has explained, that the complaint
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must “‘state the time, place and content of the false misrepresentations, the fact misrepresented
and what was retained or given up as a consequence of the fraud’” and must “identify
individuals allegedly involved in the fraud.” United States ex rel. Williams v. Martin-Baker
Aircraft Co., Ltd., 389 F.3d 1251, 1256 (quoting Kowal v, MCI Commc’ns Corp., 16 F.3d 1271,
1278 (D.C. Cir. 1994)). This more onerous pleading standard “serves to . . . safeguard[]
potential defendants from frivolous accusations of moral turpitude” and “guarantee[s] all
defendants sufficient information to allow for preparation of a response.” Intelsat USA Sales
Corp. v. Juch-Tech, Inc., 935 F. Supp. 2d 101, 107 (D.D.C. 2013) (internal quotation marks
omitted).
Dentons US argues that Guinea’s claim for fraud in the inducement falls short of these
standards at three points, and the Third-Party Defendants join in these arguments. Dkt. 39 at
14–20; Dkt. 40 at 22. In particular, it contends that Guinea has not adequately alleged (1) that
Guinea reasonably relied on the purported false representations; (2) that Dentons US (and, by
extension, that the Third-Party Defendants) had knowledge of the purported falsity of these
representations; or (3) that any allegedly false representation was made with an intent to deceive.
Id. The Court will address each argument in turn.
As Dentons US acknowledges, its first argument turns on whether the Retainer
Agreement was a “commercial contract” that was “negotiated at arm’s length.” Dkt. 39 at
15–18. If it was not, Guinea need not allege that its reliance on the asserted false representations
was “reasonable.” Hercules & Co., 613 A.2d at 923. According to Guinea, the negotiations
were not at arm’s length because it was in “urgent” need of representation, and, at the time the
Retainer Agreement was negotiated, Dentons US and its affiliates had an existing attorney-client
relationship with Guinea, giving rise to a fiduciary relationship. Dkt. 47 at 6, 9–10.
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The Court agrees with Guinea that it cannot conclude on the pleadings, and drawing all
inferences in favor of the nonmoving party, see Am. Nat’l Ins., 642 F.3d at 1139, that the
Retainer Agreement was negotiated at arm’s length. Dentons US is correct that this Court
(Lamberth, J.) previously concluded that the parties engaged in “commercial activity” at the time
they entered the Retainer Agreement. Dkt. 21 at 4-7. That conclusion, however, related solely
to the availability of the “commercial activity” exception to the Foreign Sovereign Immunities
Act and has little bearing on the present question. But, even if the Court were to conclude that
the agreement was a “commercial contract” for purposes of tort law, a substantial question of
fact would remain regarding whether the agreement was negotiated at arm’s length or whether
the parties had the type of “confidential relationship” that obviates the need to allege or prove
reasonable reliance. See Goldman v. Bequai, 19 F.3d 666, 674 (D.C. Cir. 1994) (“Whether two
parties are in a confidential relation is a fact-specific inquiry, but in general a confidential
relationship arises when one party, having gained the trust and confidence of another, exercises
extraordinary influence over the other party.” (quotation marks omitted)). That factual question
cannot be resolved on a motion to dismiss.
Dentons US and the Third-Party Defendants fare better on their second argument—that
Guinea has inadequately alleged that Dentons US or any of the Third-Party Defendants had
knowledge of the purported falsity of the relevant representations. Paragraph 59 of Guinea’s
counterclaims and third-party complaint lists five purported misrepresentations. Countercl.
¶ 59(a)–(e). Most of these purported misrepresentations are at odds with the plain terms of the
Retainer Agreement and, thus, as a matter of law cannot support a claim of fraud. Guinea
alleges, for example, that Dentons US and its affiliates represented that “Guinea would not have
to pay for services rendered by SNR Denton and its affiliates.” Countercl. ¶ 59(a). But that is
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not what the Retainer Agreement says. Rather, under the plain terms of the agreement, “costs
and fees are due upon receipt of [the Firm’s] invoice,” although Guinea was allowed to “defer
payment” while it made “good faith” efforts “to secure funding for [the] representation.” Dkt. 1-
4 at 4 (Compl. Ex. 4). Similarly, Guinea alleges that “SNR Denton falsely represented in the
Retainer Agreement that its clients would be entitled to a dispute resolution process with respect
to any fee disputes.” Countercl. ¶ 59(e). But the Retainer Agreement merely provides that the
Firm maintains a “complaints policy” and specifies particular “dispute resolution mechanisms”
for particular practices, none of which are applicable here. See Dkt. 1-4 at 13–31 (Compl. Ex.
4). To the extent that Guinea relies on purported falsities contained in the Retainer Agreement,
and those falsities are contradicted by the plain terms of that very agreement, its claim for
fraudulent inducement fails as a matter of law. See Kaempe, 367 F.3d at 963 (explaining that a
court need not “accept as true the complaint’s factual allegations insofar as they contradict
exhibits to the complaint”). And, to the extent that Guinea intends to rely on purportedly false
statements made outside the four corners of the Retainer Agreement, it has failed to comply with
the requirement of Rule 9(b) that the operative pleading identify the specific representation at
issue. See Fed. R. Civ. P. 9(b).
This, then, leaves Guinea’s allegation that Dentons US and its affiliates represented in the
Retainer Agreement that they would seek third-party funding, and that they “failed to make a
good faith effort” to do so. Countercl. ¶ 59(c). Once again, however, that is not what the
agreement actually says. Rather, it merely “authorizes the Firm to seek, with third parties,
various options for the financing of its representation and to present th[o]se options in the form
of a written proposal to the Ministry for its consideration.” Dkt. 1-4 at 4 (Compl. Ex. 4)
(emphasis added). But, even beyond that, there is a vast difference between the failure to satisfy
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a contractual requirement and entering into an agreement based on a knowing falsity. As
Dentons US notes, the very next paragraph of Guinea’s counterclaims and third-party complaint
alleges that the representations contained in the Retainer Agreement “proved to be false.”
Countercl. ¶ 60 (emphasis added). That allegation is a far cry from an allegation that the Firm
knew, at the time that it entered the Retainer Agreement, that it had no intention of seeking third-
party funding.
For similar reasons, the Court also concludes that Guinea has failed to allege that
Dentons US and its affiliates acted with an “intent to deceive.” Although Rule 9(b) permits a
plaintiff to allege “intent” and “knowledge” generally, see Fed. R. Civ. P. 9(b), Guinea has failed
to meet even the traditional pleading requirements. Indeed, Guinea alleges no facts beyond
reciting its view of what the Retainer Agreement required and asserting that Dentons US and its
affiliates failed to satisfy their obligations. If merely adding the conclusory assertion that
Dentons US and its affiliates acted with an intent to deceive were sufficient, virtually every claim
for a breach of contract could also be pled as a fraud claim. Plainly, more is required.
To sidestep these deficiencies, Guinea attempts to recast its fraudulent inducement claim
as a claim for constructive fraud. Dkt. 47 at 6–7. “Constructive fraud includes all the same
elements as actual fraud except the intent to deceive,” and, in place of requiring a showing of
actual dishonesty, it “requires a plaintiff to demonstrate the existence of a confidential
relationship between the plaintiff and defendant, ‘by which the defendant [wa]s able to exercise
extraordinary influence over plaintiff.’” Cordoba Initiative Corp. v. Deak, 900 F. Supp. 2d 42,
50 (D.D.C. 2012) (quoting McWilliams Ballard, Inc. v. Broadway Mgmt. Co., 636 F. Supp. 2d 1,
7 n.7 (D.D.C. 2009)); see also Himmelstein v. Comcast of the Dist., LLC, 908 F. Supp.2d 49, 59
(D.D.C. 2012). Because Dentons US allegedly had “a fiduciary . . . relation[ship] [with]
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Guinea” since initiating an attorney-client relationship in May of 2012, Guinea contends that
Dentons US “had a higher responsibility to ensure that it did not mislead, misrepresent, or omit
critical facts when . . . entering into agreements” with its client. Dkt. 47 at 7. That, however, is
not the claim that Guinea brought, and Guinea cannot amend its counterclaims and third-party
complaint by simple re-casting its claim in its opposition brief. See, e.g., Arbitraje Case de
Cambio, S.A. de C.V. v. United States Postal Serv., 297 F. Supp. 2d 165, 170 (D.D.C. 2003) (“It
is axiomatic that a complaint may not be amended by the briefs in opposition to a motion to
dismiss” (quoting Coleman v. Pension Benefit Guar. Corp., 94 F. Supp. 2d 18, 24 n.8 (D.D.C.
2013)). As currently pled, Guinea’s counterclaims and third-party complaint does not allege that
Dentons US or its affiliates was able to “exercise extraordinary influence over [Guinea],”
Cordoba, 900 F. Supp. 2d at 50 (quoting McWilliams Ballard, 636 F. Supp. 2d at 7 n.7), and,
although Guinea does allege a separate count for breach of fiduciary duty, that claim focuses on
conduct post-dating entry of the Retainer Agreement, such as “overbill[ing],” pursuit of a self-
serving litigation strategy, and failure to return client files, see Countercl. ¶ 52(a), (b) and (e).
In its current form, Guinea’s counterclaims and third-party complaint thus fails to allege a
claim of fraudulent inducement or constructive fraud. The Court will, accordingly, dismiss
Count III without prejudice as against both Dentons US and the Third-Party Defendants.
B. Injunctive Relief
Dentons US also moves to dismiss Count IV of Guinea’s counterclaims and third-party
complaint, a cause of action Guinea styles as “injunctive relief,” Dkt. 39 at 20–23, and the Third-
Party Defendants join in that motion, Dkt. 40 at 22. In addition, the Dentons Verein moves to
dismiss this count on the separate grounds that it is not engaged in the practice of law and thus
could not have violated any duty related to the provision of legal services. Id. at 13–15.
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As Dentons US correctly observes, see Dkt. 39 at 20–21, a “request for injunctive relief is
a remedy and does not assert any separate cause of action,” Kemp v. Eiland, 139 F. Supp. 3d 329,
343 (D.D.C. 2015) (internal quotation marks omitted). Guinea does not dispute this
noncontroversial proposition, but argues that, despite the label used in the counterclaims and
third-party complaint, Count IV alleges a claim for breach of contract—and not a stand-alone
claim for an injunction. The Court agrees. Although mislabeled, in substance Court IV alleges
that Dentons US and its affiliates agreed to defer efforts to collect payment on the Firm’s
invoices and to submit any dispute to an internal Dentons dispute resolution process before filing
suit and that they breached these promises. Countercl. ¶¶ 66-75. Construing Count IV as a
claim for breach of contract, it appears to allege two separate breaches: first, that Dentons US
and its affiliates breached their contractual undertaking to defer collection efforts “until the
appropriate financing [wa]s in place,” Countercl. ¶¶ 67, 74 (quoting Dkt. 1-4 at 4 (Compl. Ex.
4)); and second, that they breached their agreement “to follow [their] own ‘formal complaints
procedure,’” Countercl. ¶ 71 (quoting Dkt. 1-4 at 5 (Compl. Ex. 4)). As explained below, the
Court concludes that the first of these claims is sufficient to survive a motion to dismiss but that
the second is not.
Although it is unclear how such a claim differs from Guinea’s defense to Dentons US’s
claim for breach of contract, Guinea has alleged that Dentons US and its affiliates agreed not to
seek “collection of [their] fees and expenses . . . until the appropriate financing [wa]s in place”
and that they have breached that promise. Dkt. 1-4 at 4 (Compl. Ex. 4). The factual questions
remain, of course, whether Guinea engaged in all “good faith . . . efforts necessary to secure
funding for th[e] representation” and whether “appropriate financing” was in place. Id. Those
factual questions, moreover, merge with the merits of Dentons US’s claims. But, construing the
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complaint “liberally in the plaintiff[’s] favor,” and granting the plaintiff “the benefit of all
inferences that can be derived from the facts alleged,” Kowal, 16 F.3d at 1276; see also Thomas
v. Principi, 394 F.3d 970, 972 (D.C. Cir. 2005), the Court concludes that Count IV states a
claim—at least with respect to whether the necessary conditions were satisfied before Dentons
US sought to collect on its outstanding invoices.
To the extent Count IV alleges that Dentons US and its affiliates breached an obligation
to provide Guinea with an alternative dispute resolution mechanism, however, that claim fails.
The provisions of the Retainer Agreement upon which Guinea relies do not establish an
alternative dispute resolution mechanism or an exhaustion requirement. See Dkt. 39 at 21. To
the contrary, the Retainer Agreement merely states that Dentons US and its affiliates are
“committed to resolving any issues” that might arise with Guinea; that the Firm has “a formal
complaints procedure,” which it promised to provide to Guinea “upon request”; and that
individual Dentons Practices have “dispute resolution mechanisms,” which are described in the
Terms of Business. Dkt. 1-4 at 5, 13 (Compl. Ex. 4); Countercl. ¶¶ 69, 72. Read in context,
however, the Firm’s “commit[ment] to resolving any issues” applies only to “any concern about
any aspect of [the Firm’s] services” that the Firm’s client—that is, Guinea—may have. Dkt. 1-4
at 5 (Compl. Ex. 4). Nothing in the Retainer Agreement even hints that this vague
“commit[ment]” applies in cases in which it is the Firm that seeks redress. The same is true,
moreover, with respect to the “formal complaints procedure.” Id. As the Retainer Agreement
makes clear, that policy—even if it were binding—applies in cases in which the client is
“dissatisfied with the response” it receives from the Firm. Id. at 13.
Guinea’s reliance on the Practice-specific dispute resolution policies fares no better.
Guinea asserts Count IV against Dentons US, the Dentons Verein, Dentons Europe, and Dentons
17
UKMEA. Countercl. ¶¶ 2–3, 9–12, 65–67. Although the Court will discuss these policies in
greater detail below, for present purposes it is sufficient to note that only Dentons US has sued
Guinea for failure to pay its invoices, and the counterclaims and third-party complaint do not
identify any other collection effort that Guinea would have the Court enjoin in favor of some
alternative dispute resolution mechanism. See Compl. ¶ 73; Countercl. ¶ 74. The Retainer
Agreement, moreover, includes no special rules or dispute resolution mechanism for disputes
between Guinea and Dentons US.
The Court will, accordingly, dismiss Count IV, except to the limited extent that it alleges
that Dentons US and its affiliates breached the Retainer Agreement by seeking payment of the
Firm’s fees before “appropriate funding” was in place.
C. Motion to Strike
The Court turns next to Dentons US’s motion to strike “all references to the Ebola
epidemic” from Guinea’s counterclaims and third-party complaint. Dkt. 39 at 23–25. The Ebola
epidemic is mentioned three times in that pleading, most notably in connection with Guinea’s
breach of contract claim. See Countercl. ¶¶ 46–47 (alleging that the financial damages caused by
Dentons US’s breach of contract “occurred at a time when the country needed every available
resource to address the Ebola epidemic that ravaged the country” leaving “Guinea in a much
weaker position to address the health crisis that paralyzed the nation and its economy” and that
“killed more than 11,000 people in Guinea”); see also Countercl. ¶ 75 (alleging that in “the
absence of injunctive relief,” Guinea will suffer financial harms when it “must muster all of its
resources to recover from the Ebola epidemic”).
Dentons US argues that these references to Ebola are “[i]rrelevant and [p]rejudicial” and
should be eliminated from the pleading pursuant to Federal Rule of Civil Procedure 12(f), which
18
permits the Court to “strike from a pleading . . . any redundant, immaterial, impertinent, or
scandalous matter.” Dkt. 39 at 23. As Dentons US explains, because “the Ebola epidemic began
long after Dentons US withdrew as [Guinea’s] legal counsel,” references to the epidemic “bear
no rational connection to this dispute over legal fees.” Id. Dentons US also posits that the
references to Ebola are “highly prejudicial” because they attempt to “link the outbreak of a
terrifying disease . . . to a law firm seeking payment of its legal fees.” Id. at 24. Guinea
responds that had Dentons US “not breached its agreement, Guinea would have had available to
it [additional funds] to use for Ebola relief” and because “the existence of the Ebola crisis is
relevant to damages, Guinea should not be made to sanitize the allegations contained in its
Counterclaim to suit Dentons US.” Dkt. 47 at 15.
The Court is far from convinced that the Ebola epidemic has any relevance to this case.
Dentons US, however, faces a “high standard” in seeking to strike the arguably offending
references. Wiggins, 853 F. Supp. at 457. In general, motions “under Rule 12(f) are viewed with
disfavor . . . and are infrequently granted.” 5C Wright & Miller et al., Federal Practice and
Procedure § 1380 (3d ed. 2016); see also Stabilisierungsfonds Fur Wein v. Kaiser Stuhl Wine
Distribs. Pty. Ltd., 647 F.2d 200, 201 (D.C. Cir. 1981) (per curiam) (citing Wright & Miller for
the proposition that “motions to strike, as a general rule, are disfavored”). Given the fact that the
parties have yet to brief the range of issues posed by Guinea’s contention that the Ebola epidemic
has some bearing on damages—including, for example, questions of proximate cause,
foreseeability, and speculativeness—the Court will not strike the references at this time. If
Guinea elects to amend its counterclaims and third-party complaint, as this decision elsewhere
permits, however, it should give due consideration to whether it has a good-faith basis for
including such a contentious allegation.
19
D. The Third-Party Defendants’ Motion to Dismiss
Finally, the Third-Party Defendants move to dismiss Guinea’s claims against them for
failure to state a claim under Rule 12(b)(6). See Dkt. 40.
1. The Dentons Verein
The Dentons Verein argues that Guinea’s third-party complaint—which “depend[s] on
the allegation that [the Third-Party Defendants] practice law”—“do[es] not state a facially
plausible cause of action against the Dentons Verein itself because . . . the Dentons Verein does
not practice law.” Dkt. 40 at 13–14 (emphasis in original). The Dentons Verein asserts, for
example, that because it does not practice law it could not “enter[] into an agreement to provide
legal services,” Countercl. ¶ 39 (Count I); could not “assume[] the role of a fiduciary . . . in
agreeing to serve as counsel,” Countercl. ¶ 50 (Count II); would not make false representations
to induce Guinea to contract for legal services that it could not provide, Countercl. ¶ 59 (Count
III); and could not offer internal mediation over unpaid legal bills that it could not generate,
Countercl. ¶ 66 (Count IV); see also Dkt. 40 at 14–15. Guinea responds that the Dentons Verein
was “one of the affiliates within Dentons US who entered into the Retainer Agreement to
provide legal services” and that, as the Dentons Verein represented itself as a “global law firm”
which was a collection of geographic “offices holding membership in a central entity,” there is
“no reason to excuse the ringleader umbrella organization from the law suit where the allegations
of concerted activity are properly alleged.” Dkt. 48 at 4–9.
Although Swiss vereins do not have “an exact legal counterpart in the United States,”
they are “somewhat akin to an incorporated membership association” that is “legally distinct
from its members.” Jeffries v. Deloitte Touche Tohmatsu Int’l, 893 F. Supp. 455, 457 n.1 (E.D.
Pa. 1995); see also In re Project Orange Assocs., LLC, 431 B.R. 363, 368 n.2 (Bankr. S.D.N.Y.
20
2010). “[O]ffices of the ‘firm’ are linked via an association but are separate legal entities with
separate revenue pools.” In re GSC Grp., Inc., 502 B.R. 673, 735 n.227 (Bankr. S.D.N.Y. 2013).
“Several courts have declined to treat” structures like vereins as “a single entity . . . jointly and
severally liable” for the acts of its component firms “simply because they share[] an associational
name and/or collaborate[] on certain aspects of the relevant transaction.” In re Lernout &
Hauspie Sec. Lit., 230 F. Supp. 2d 152, 170 (D. Mass. 2002). But, at least at the motion dismiss
stage, it is sufficient for a plaintiff to make “specific factual allegations of agency” or to allege
that the verein directly intervened in the conduct at issue. See In re Parmalat Sec. Lit., 377 F.
Supp. 2d 390, 405 (S.D.N.Y. 2005). Applying these concepts here, the Court concludes that
some of Guinea’s claims may proceed against the Dentons Verein, while others must be
dismissed.
As to Count I, the Court is unpersuaded by the Dentons Verein’s contention that Guinea’s
claim fails as a matter of law. The Dentons Verein starts by pointing to the Terms of Business,
which states that “the Dentons Verein (a Swiss Verein) does not itself provide legal or other
client services.” Dkt. 40 at 14 (quoting Dkt. 1-4 at 8 (Compl. Ex. 4)). It then argues that “an
entity that does not provide legal services would not have plausibly ‘entered into an agreement to
provide legal services.’” Id. (quoting Countercl. ¶ 39). But that is not self-evident. Guinea
alleges that the Dentons Verein “is comprised of several affiliated firms [that] form a global legal
practice . . . through its member firms and affiliates, . . . each of which is a separate business
entity and each of which conducts its own legal practice.” Countercl. ¶ 2. Although conceding
that the Dentons Verein does not itself provide the underlying legal services, this allegation is
consistent with Guinea’s contention that the Dentons Verein, in essence, acted as the umbrella
organization that facilitated the delivery of legal services by the “separate business entit[ies],”
21
who are the members of the verein. The Dentons Verein, moreover, fails to identify any legal
authority for the proposition that an entity that does not itself provide legal services cannot enter
a contract pursuant to which its members provide those services. Nor has it shown, at least at
this stage of the proceeding, that the Retainer Agreement unambiguously bound only Dentons
US. To the contrary, the Engagement Letter was arguably entered into on behalf of Dentons US
“and its affiliates,” Dkt. 1-4 at 1 (Compl. Ex. 4) (emphasis added), and the Terms of Business,
which is on the same “SNR DENTON” letterhead as the Engagement Letter, explains that “SNR
Denton is the collective trade name for an international legal practice including” the Dentons
Verein, Dentons US, and Dentons UKMEA, id. at 1, 8. At least for purposes of a motion to
dismiss, these allegations are sufficient.1
As to Count II, however, the Court is convinced that Guinea’s claim against the Dentons
Verein fails as a matter of law. That count asserts a claim for breach of fiduciary duty based on
the attorney-client relationship that existed between Guinea and its counsel. See Countercl.
¶¶ 51–55. The Terms of Business, however, clearly states that the Dentons Verein “does not
itself provide legal or other client services,” Dkt. 1-4 at 8 (Compl. Ex. 4), and Guinea does not
allege that the Dentons Verein, in fact, acted as its lawyer. Because the attorney-client
relationship is a necessary element of this claim, and because there is no basis for inferring that
the Dentons Verein acted as Guinea’s counsel, the Court will dismiss Count II as against the
Dentons Verein.
1
Under the “general rule,” the “obligation created by the promise of several persons is joint
unless the contrary is made evident.” Welch v. Sherwin, 300 F.2d 716, 718 (D.C. Cir. 1962)
(quotation marks omitted); see also Bender v. Jordan, 570 F. Supp. 2d 37, 47 & n.9 (D.D.C.
2008) (same). The parties have yet to address whether and how this rule might apply in the
present context.
22
Because the Court has already concluded that Count III fails to state a claim and that
most of Count IV fails as a matter of law, see supra 10–18, this then leaves only the portion of
Count IV that alleges that Dentons US and the Third-Party Defendants breached the Retainer
Agreement when Dentons US brought suit seeking to collect its fees. For the same reasons that
the Court concludes that Count I states a claim against the Dentons Verein, it concludes that this
remaining portion of Count IV also survives as against the Dentons Verein.
2. Dentons Europe and Dentons UKMEA
Finally, Dentons Europe and Dentons UKMEA argue that Guinea has “waived any right
to bring suit” against them “in a United States court by agreeing to forum-selection clauses that
unambiguously provide for exclusive jurisdiction in foreign courts.” Dkt. 40 at 7. In support of
this defense, they point to the “Location Terms of Business” contained in the Retainer
Agreement and argue that Guinea agreed to “the exclusive jurisdiction of the French courts” for
all disputes “aris[ing] out of or in connection with” Dentons Europe’s representations of Guinea,2
Dkt. 1-4 at 18 (Compl. Ex. 4), and “the exclusive jurisdiction of the English courts” for all
disputes “aris[ing] out of or in connection with” Dentons UKMEA’s representation of Guinea,
id. at 29. Alternatively, they argue that, because they were not “parties to the contract,” Guinea’s
breach of contract claim (Count I) “must be dismissed.” Dkt. 40 at 19–22.
Guinea responds that Dentons Europe and Dentons UKMEA should not be permitted
simultaneously to “fall back upon the protections in the Retainer Agreement’s Terms of
Business,” while “maintain[ing] at the same time that they are not parties to the Retainer
Agreement or Terms of Business.” Dkt. 48 at 10. That contention, however, is unpersuasive.
2
That same provision also provides that “disputes relating to the amount and payment of [the
Firm’s] fees shall be submitted to arbitration.” Dkt. 1-4 at 18 (Compl. Ex. 4).
23
Guinea has alleged that Dentons Europe and Dentons UKMEA were parties to the Retainer
Agreement, and the adequacy of the counterclaims and third-party complaint must be assessed in
light of Guinea’s allegations. See Iqbal, 556 U.S. at 678 (“[A] court must accept as true all of
the allegations contained in a complaint[.]”).
More substantively, Guinea also argues that “there is nothing in the Retainer Agreement
or [in] the Terms of Business that addresses the situation of jurisdiction against multiple” offices
or that requires a claim to be “fractured among multiple jurisdictions.” Dkt. 48 at 11. Although
that is correct as far as it goes, the text of the Location Terms of Business is sweeping and, on its
face, includes the present circumstances. It provides: “[A]ny claim, dispute or difference of any
kind whatsoever aris[ing] out of or in connection with” any “agreements [or] arrangements
between you and us relating to our services” is subject “to the exclusive jurisdiction of the
French courts” or is subject to arbitration by “the Paris Bar Association” (Dentons Europe), Dkt.
1-4 at 18 (Compl. Ex. 4) (emphasis added), and “any claim, dispute or difference of any kind
whatsoever . . . aris[ing] out of or in connection with” “all the agreements [or] arrangements
between you and us relating to our services” is subject “to the exclusive jurisdiction of the
English courts” (Dentons UKMEA), id. at 23 (emphasis added).
Given the clarity and breadth of this language, Guinea’s argument appears to boil down
to one of fairness: If Dentons US is able to litigate against Guinea in U.S. court, Guinea should
be able to litigate against Dentons Europe and Dentons UKMEA in U.S. court as well and should
not be forced to wage three separate legal battles across two continents. It is unclear from the
current record whether Guinea would, in fact, lose anything by limiting its claims to Dentons US.
But, even assuming that it would, and recognizing the burden of being required to litigate a
proceeding in three different fora, the Court must enforce the forum selection clauses agreed to
24
by the parties “unless enforcement is shown by the resisting party to be ‘unreasonable’ under the
circumstances.” M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 10 (1972); see also
Commerce Consultants Int’l, Inc. v. Vetrerie Riunite, S.p.A., 867 F.2d 697, 700 (D.C. Cir. 1989)
(explaining that there is “a strong presumption in favor of enforcement of freely negotiated
contractual choice-of-forum provisions.” (quoting Mitsubishi Motors Corp. v. Soler Chrysler-
Plymouth, Inc., 473 U.S. 614, 631 (1985))). “Unreasonable” forum-selection clauses include
those “induced by fraud or overreaching,” those where the “contractually selected forum is so
unfair and inconvenient as, for all practical purposes[,] to deprive the plaintiff of a remedy or of
its day in court,” and those where “enforcement would contravene a strong public policy of the
[forum] where the action is filed.” Water & Sand Int’l Capital, Ltd. v. Capacitive Deionization
Tech. Sys., Inc., 563 F. Supp. 2d 278, 283 (D.D.C. 2008) (quotation marks omitted) (second
alteration in original).
Here, the Court cannot conclude that enforcement of the forum selection clauses would
be “unreasonable.” Guinea acknowledges that each of the entities it seeks to sue constitutes “a
separate business entity.” Countercl. ¶ 2. And, although it may be inconvenient for Guinea to
proceed in three separate fora, it entered a Retainer Agreement that granted Dentons Europe and
Dentons UKMEA the right to litigate in their domestic fora. Requiring that those entities litigate
in the United States would, in turn, impose additional burdens on them—even if those burdens
may be less substantial than the burdens Guinea could face if required to pursue a “fractured”
litigation in “multiple jurisdictions.” Dkt. 48 at 11. Under these circumstances, the Court must
enforce the agreement of the parties.
The Court will, accordingly, grant the motion of Dentons Europe and Dentons UKMEA
to dismiss.
25
CONCLUSION
For the reasons discussed above, Count III of Guinea’s counterclaims and third-party
complaint is dismissed without prejudice and Count IV is dismissed in part. Dentons US’s
motion to strike is denied, also without prejudice. The Dentons Verein’s motion to dismiss is
granted, except with respect to Count I and the above-identified portion of Count IV. Dentons
Europe’s and Dentons UKMEA’s motion to dismiss is granted.
SO ORDERED.
/s/ Randolph D. Moss
RANDOLPH D. MOSS
United States District Judge
Date: September 25, 2016
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