Dentons U.S. LLP v. Republic of Guinea , 134 F. Supp. 3d 5 ( 2015 )

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Bowes, Inc. v. US. Postal Service, 27 F. Supp .2d 15, 19 (D.D.C. 1998) (citing Freiburger v.
Emery Air Charter, Inc, 795 F. Supp. 253, 256 (ND. 111. 1992; 5A Wright & Miller, Federal
Practice & Procedure: Civil 2d § 1361 at 456 (2d ed. 1990). As defendants note, “[w]here the
motion to dismiss is based on a claim of foreign sovereign immunity. . .the court must engage in
sufficient pretrial factual and legal determinations to satisfy itself of its authority to hear the
case...” Mot. Dismiss, ECF No. 15—1 citing Burnett v. AlBaraka Inv. &Dev. Corp., 292 F. Supp.
2d 9, l4 (D.D.C. 2003) (citations omitted). Thus, the Court examines subject matter jurisdiction
with more scrutiny than in non-FSIA cases.
b. Whether Defendants Enjoy Immunity from Suit under the Foreign Sovereign
Immunities Act
First, defendants argue that they are entitled to immunity under the Foreign Sovereign
Immunities Act (“FSIA), 28 U.S.C. §§ 1602-1611. Defendants argue that “the scope of the
[plaintiffl’s work was to counsel a foreign sovereign about the financing and development of
sovereign assets and national infrastructure located entirely within the boundaries of the foreign
country.” Mem. Supp. Mot. Dismiss, ECF No. 15-1 at 2. Pursuant to the FSIA, “a foreign state
is presumptively immune from the jurisdiction of United States courts; unless a specified exception
applies...” Saudi Arabia v. Nelson, 507 U.S. 349, 355 (1993) citing Verlinden B.V. v. Central
Bank of Nigeria, 461 US. 480, 488 (1983)1. As the parties agree that defendant Guinea is a
foreign state and that defendant Ministry is a political subdivision thereof, the Court finds that
defendants are a “foreign state” as defined under FSIA. Compl, ECF No. 1; Mem. Supp. Mot.
Dismiss, ECF No. 15—1; Mem. Opp’n. Mot. Dismiss, ECF No. 18; 28 U.S.C. § 1603 (2005). As
such, defendants are entitled immunity under FSIA unless an exception applies. The Court now
1 The Court examines whether such an exception applies below-a,
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turns to that analysis, noting that there are two possible exceptions that may apply herein; waiver
under § 1605(a)(1) or that related to commercial activity under § 1605(a)(2).
c. Waiver of Immunity Under § 1605(a)(1)
The FSIA provides that “a foreign state shall not be immune from the jurisdiction of courts
of the United States or of the States in any case. . . in which the foreign state has waived its immunity
either explicitly or by implication...” §§ 1605(a)-(a)(1). Defendants allege that there was no such
explicit waiver and as such, this exception to immunity does not apply. Mem. Supp. Mot. Dismiss,
ECF No. 15-1 at 5. To support this proposition, defendant alleges that plaintiff agreed to secure
funding if defendant was unable, that the parties contemplated an out of court dispute resolution
process, that the Retainer Agreement failed to designate law to govern any disputes, and that
plaintiff’s terms of business2 generally avoid jurisdiction in US. Courts. Mem. Supp. Mot.
Dismiss, ECF No 15—1 at 6—9. The Court addresses relevant portions of these arguments more
specifically below, but notes that none of these arguments address explicitly the presence or
absence of waiver. Defendants filrther suggest that plaintiff conflates “‘waiver’ and ‘commercial
activity’” under the F SIA. ECF No. 15-1 at 10. The Court sees no evidence of an explicit or
implied waiver of sovereign immunity under § 1605(a)( 1) and turns to the “commercial activity”
exception under § 1605(a)(2).
d. The Commercial Activity Exception to Immunity Under § 1605(a)(2)
Plaintiff cogently argues that there is an exception to immunity based upon defendants’
commercial activities. Compl, ECF No. 1. Section 1605(a)(2) of the FSIA provides that:
a foreign state shall not be immune from the jurisdiction of courts of the United
States or of the States in any case. . . 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 commercial activity of the
foreign state elsewhere; or upon an act outside the territory of the United States in
'n'———‘f—: — —'_'— _ _ _
2 Attached to the Retainer Agreement and incorporated by reference. Exhibit 4 of ECF No. 1,,-
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connection with a commercial activity of the foreign state elsewhere and that act
causes a direct effect in the United States...
Further, “commercial activity” is defined in § 1603(d) and (e) as}
(d)...either a regular course of commercial conduct or a particular commercial
transaction or act. The commercial character of an activity shall be determined by
reference to the nature of the course of conduct or particular transaction or act,
rather than by reference to its purpose.
(e) A “commercial activity carried on in the United States by a foreign state” means
commercial activity carried on by such state and having substantial contact with the
United States.
The Supreme Court has explained the required analysis, stating:
...the question is not whether the foreign government is acting with a profit motive
or instead with the aim of fulfilling uniquely sovereign objectives. Rather, the issue
is whether the particular actions that the foreign state performs (whatever the motive
behind them) are the zfype of actions by which a private party engages in ‘trade and
commerce,’ Black’s Law Dictionary 270 (6th Ed. 1990)...
Republic of Argentina v. Weltover, Inc., 504 US. 607, 614 (1992) (citations omitted). Whether
the activities at issue in this case should be considered commercial activity depends upon how to
fundamentally characterize the transactions. If, as defendants argue, the activity can be
characterized as “[t]he core of the representation was thus to advise a foreign government on how
to exercise its sovereign authority over national assets,” which is of a nature that cannot be
undertaken by private parties, then defendants must prevail and this exception cannot apply. Mem.
Supp. Mot. Dismiss, ECF No. 15-1 at 12. If, conversely, the Court characterizes such activity as
an entity (defendants) contracting for legal services related to a development, infrastructure and
construction project, and thus as a commercial activity in which private parties regularly engage,
the exception applies and defendants’ motion must be denied. Defendants argue that the Simandou
Project involves “three classic functions of government — (i) international diplomacy, (ii)
infrastructure development, and (iii) raising revenue for government operations.” Id. at 13. The
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“[fjollowing Weltover, the DC. Circuit’s direct effect cases involving alleged breaches of contract
have turned on whether the contract in question established the United States as a place of
performance.” Mem. Opp’n. Mot. Dismiss, ECF No. 18 at 17. Applying this precedent, the Court
finds that the activities involved in the instant case include performance of services in the district
as well as payment to be made to plaintiff’ s U. S. bank, therefore establishing sufficient direct effect
to maintain jurisdiction.
e. Structure of Fees and Funding
Defendants further assert that plaintiff undertook representation “knowing that the Ministry
and Guinea lacked the fiinds to pay for the Firm’s legal services and with the express intention of
seeking compensation from other parties...” Mem. Supp. Mot. Dismiss, ECF No. 15-1 at 16.
Defendants make much of their claim that plaintiff agreed to secure {finding for plaintiff’ 3 services.
This claim is both inconsistent with the language of the Retainer Agreement on its face and
illogical in the context of the instant case. The language of the retainer agreement between the
parties appears clear as to payment of fees in that defendants “will implement in good faith all
efforts necessary to secure finding for this representation...” Ex. 4 of Compl, ECF No. 1 at 4.
Defendants filrther point to provisions regarding deferral of collection and allowing plaintiff to
affirmatively seek alternate finding- to bolster their claim that no fees or costs are owed. Mem.
Supp. Mot. Dismiss, ECF No. 15-1 at 17. The Court finds it cannot interpret such language to
indicate that the parties agreed for defendants to pay plaintiff if convenient, but otherwise expect
plaintiff to pay themselves, as defendants suggest. Such argument is squarely rejected.
f. forum non conveniens
Next, defendants argue that the Court should decline jurisdiction on the grounds of forum
non conveniens. Mem. Supp. Mot. Dismiss, ECF No. 15—1 at 18. In support of this contention,
defendants argue that “it would be presumptuous to have a US. court dictate terms to a foreign
sovereign in a circumstance where the foreign sovereign has not agreed to the jurisdiction of the
US. court...” Id. at 19. The Court disagrees that whether defendants agree to the jurisdiction of
the Court has any relevance, and the court declines to exercise its discretion to grant such relief
g. Plaintiff is a United States Entity
Defendants argue, at length throughout their motion, that plaintiff is an international
organization, which should deprive the court of jurisdiction. Mem. Supp. Mot. Dismiss, ECF No.
15—1. Conversely, plaintiff describes itself as a “distinct U.S. legal entity.” Mem. Opp’n. Mot.
Dismiss, ECF No. 18. Defendants have offered no sufficient or competent evidence to rebut
plaintiffs assertion, therefore the Court finds no relief appropriate on these grounds, nor does the
court further analyze defendants’ claims contingent upon its assertion that plaintiff is an
international law firm. In fact, the retainer agreement letter itself states that it “confirms the
agreement of the Minister of Mines and Geology of the Republic of Guinea (the “Ministry” or
“Client”) to engage the firm SNR Denton US LLP and its affiliates (the “firm”) to provide
services. . Exhibit 4 of Comp1., ECF No 1-4 at 1.
III. CONCLUSION
In light of the Court’s analysis, defendants’ motion to dismiss will be DENIED in a separate
Order issued this date.
Signed by Royce C. Lamberth, Judge, on September 22, 2015.