Wye Oak Technology, Inc. v. Republic of Iraq ( 2013 )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
)
WYE OAK TECHNOLOGY, INC., )
)
Plaintiff, )
)
v. ) Civil No. 10-1182 (RCL)
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REPUBLIC OF IRAQ, )
)
Defendant. )
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MEMORANDUM OPINION
This is a breach of contract action brought by an American defense contractor, Wye Oak
Technology, against the Republic of Iraq. Defendant Iraq moves for partial reconsideration of
an opinion issued by Judge Trenga of the Eastern District of Virginia concerning the adequacy of
service of process. Def.’s Mot. for Reconsideration, ECF No. 64. Iraq also moves to dismiss
the action on grounds of forum non conveniens, naming Iraq as the proper forum. Def.’s Mot. to
Dismiss, ECF No. 66. The Court denies both motions.
I. BACKGROUND 1
A. Factual Background
In 2004, Wye Oak, an American defense contractor, entered into agreements with the
Iraqi Ministry of Defense to buy and sell arms. Wye Oak Tech., Inc. v. Republic of Iraq, 2010
WL 2613323, at *1–2 (E.D. Va. June 29, 2010), aff’d, 666 F.3d 205 (4th Cir. 2011). Wye Oak
undertook a variety of actions in Iraq and the United States to perform its obligations under the
1
The Court summarizes only those facts essential to this opinion. For additional background, see Wye Oak Tech.,
Inc. v. Republic of Iraq, 2010 WL 2613323, at *1–2 (E.D. Va. June 29, 2010), aff’d, 666 F.3d 205 (4th Cir. 2011).
contract, 2 and sought payment of roughly $24 million. Id. at *2. In December 2004, while
traveling by car to Baghdad to collect payment on this contract, two Wye Oak personnel
including the president of the company, Dale Stoffel, were killed by unidentified gunmen. Id.
Both parties agree that the murders remain unsolved. Pl.’s Opp’n 4, ECF No. 70; Def.’s Reply 8,
ECF No. 71. Wye Oak refers to the killings as “assassination[s],” and suggests that they were
linked to Wye Oak’s work as a defense contractor. Pl.’s Opp’n 4. Iraq notes that the FBI has not
“linked [Dale Stoffel’s] death to a known terrorist group or to this contract dispute with the Iraqi
government.” Def.’s Reply 8. The current president of the company is Dale Stoffel’s brother,
David Stoffel. He claims to have received death threats following his brother’s murder in 2005.
Decl. of David J. Stoffel ¶¶ 5–8 & Exs. 1–3.
Wye Oak continued to perform under the agreements after the murders but claims that it
never received payment. Wye Oak Tech, 2010 WL 2613323, at *1–2.
B. Procedural Background
Wye Oak filed this action in 2009 in the Eastern District of Virginia. Id. at *1. On
October 8, 2009, Wye Oak attempted mail service on Iraq pursuant to 28 U.S.C. § 1608(a)(3) by
2
Judge Trenga described Wye Oak’s performance under the agreements as follows:
Between August 16, 2004 and January 2005, Wye Oak performed under the [agreements] in
connection with the repair and refurbishing of several armored battalions and by identifying and
arranging for the sale of scrap metal from military equipment. Beginning in mid-August 2004,
Wye Oak, through offices in the United States and employees and subcontractors in the field in
Iraq, inventoried depots in Iraq for scrap, evaluated whether the equipment was worth
refurbishing, estimated scrap tonnage, and identified potential foreign buyers. All potential buyer
nations were approved by a United States military office.
Wye Oak performed multiple tasks in the United States related to its work in Iraq
including accounting, running computer programs for tracking military equipment, meeting with
Department of Defense officials regarding coordination of the refurbishment program in light of
the reconstruction activities in Iraq, monitoring employees, contacting potential foreign buyers,
ensuring that all necessary licenses were up to date, creating spreadsheet systems to ensure that
pricing of scrap equipment and salvageable equipment could be compared, creating and making
maintenance preparations for an [Iraqi Military Equipment Recovery Project] website, and
maintaining and monitoring Wye Oak’s United States-based bank accounts.
Wye Oak Tech., 2010 WL 2613323, at *2.
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causing the clerk of the court to issue a summons to the “Head of the Ministry of Foreign
Affairs” of Iraq, which was delivered, along with a copy of the complaint, to the Iraqi Embassy
in Washington, D.C., via FedEx. Id. at *4. As no signed receipt was ever returned from this
mailing, Wye Oak then commenced service via diplomatic channels pursuant to 28 U.S.C. §
1608(a)(4). This service was made on December 27, 2009. See Return of Service, ECF No. 14.
Iraq moved to dismiss arguing, inter alia, that Wye Oak “did not satisfy the mandatory
service requirements set forth in 28 U.S.C. § 1608(a).” Id. at *3. Iraq did not dispute that it was
actually served via diplomatic channels. Id. at *4. Instead, it argued that Wye Oak never
properly attempted mail service under § 1608(a)(3) because it sent the package to the Iraqi
embassy in Washington, D.C., rather than to Iraq, and, since the Foreign Sovereign Immunities
Act (FSIA) authorizes diplomatic service under 1608(a)(4) only where a party has first properly
attempted mail service under § 1608(a)(3), the diplomatic service was invalid. Id. at *4–5.
Judge Trenga rejected this argument and found that “attempted service through the
Embassy [did] not render service ineffective.” Id. at *5. He reasoned that (1) “Wye Oak was not
serving the Embassy itself or personnel within the Embassy, but rather attempting to use the
Embassy as a conduit”; (2) Wye Oak reasonably believed that the insecurity in Iraq rendered
service of a government official there impossible; and (3) § 1608(a)(3) does not prohibit this
method of delivery. Id. 3
II. IRAQ’S MOTION FOR RECONSIDERATION IS DENIED
“[A]ny order or other decision, however designated, that adjudicates fewer than all the
claims or the rights and liabilities of fewer than all the parties . . . may be revised at any time
before the entry of a judgment . . . .” Fed. R. Civ. P. 54(b). “Interlocutory orders are not subject
3
Judge Trenga also transferred the case to this district. Id. at *10. It was reassigned by consent to the undersigned
judge from Judge Roberts on April 15, 2013. ECF No. 72.
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to the law of the case doctrine and may always be reconsidered prior to final judgment” even
when a case is reassigned to a new judge. Langavine v. Dist. of Columbia, 106 F.3d 1018, 1023
(D.C. Cir. 1997). Courts in this district grant reconsideration “as justice requires.” See Cobell v.
Norton, 355 F. Supp. 2d 531, 539 (D.D.C. 2005).
Iraq’s motion to reconsider will be denied. The Court takes no position regarding Judge
Trenga’s analysis. Even if Judge Trenga’s analysis was incorrect and Wye Oak’s mail service
attempt was invalid, no injustice would result here since Iraq has received adequate process
through diplomatic channels.
III. IRAQ’S MOTION TO DISMISS BASED ON FORUM NON CONVENIENS IS
ALSO DENIED
While there is a “substantial presumption” in favor of a plaintiff’s chosen forum, a court
“may nonetheless dismiss a suit for forum non conveniens if the defendant shows there is an
alternative forum that is both available and adequate and, upon a weighing of public and private
interests, the strongly preferred location for the litigation.” MBI Grp., Inc. v. Credit Foncier Du
Cameroun, 616 F.3d 568, 571 (D.C. Cir. 2010) (emphases added). “A court first determines
whether there is an adequate alternative forum and, if so, then proceeds to balance both private
interest factors and public interest factors in favor of the respective forums.” Jackson v. Am.
Univ. in Cairo, 52 F. App’x 518, 518 (D.C. Cir. 2002).
The Supreme Court has explained that, ordinarily, the requirement of an adequate
alternative forum “will be satisfied when the defendant is ‘amenable to process’ in the other
jurisdiction.” Piper Aircraft Co. v. Reyno, 454 U.S. 235, 255 (1981). However, “where the
remedy offered by the other forum is clearly unsatisfactory,” for example “where the alternative
forum does not permit litigation of the subject matter of the dispute,” the other forum may not be
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an adequate alternative. Id. Also, “[a]n alternative forum is inadequate if the plaintiff will be
‘treated unfairly’ there.” MBI Grp., 616 F.3d at 571 (quoting Piper Aircraft, 454 U.S. at 255).
A court will not force plaintiffs to litigate in a forum where they would face a
particularized and “serious risk to their safety.” Doe v. Exxon Mobil Corp., 393 F. Supp. 2d 20,
29 (D.D.C. 2005) (rejecting a motion to dismiss for forum non conveniens in a case concerning
the Indonesia military where plaintiffs showed that they faced “a genuine risk of reprisals” if
they litigated in Indonesia); see also HSBC USA, Inc. v. Prosegur Paraguay, SA, 2004 WL
2210283, at *3–4 (S.D.N.Y. Sept. 30, 2004) (holding that Paraguay was an inadequate
alternative forum because the Paraguayan Government was implicated in the alleged wrongdoing
and individuals investigating the case had been murdered); Cabiri v. Assasie–Gyimah, 921 F.
Supp. 1189 (S.D.N.Y. 1996) (holding that Ghana was an inadequate alternative forum for a
former Ghanian Trade Counselor suing a Ghanian security official for alleged torture because
plaintiff would be put in “grave danger” if forced to litigate there); Rasoulzadeh v. Associated
Press, 574 F. Supp. 854 (S.D.N.Y.1983) (Iran was an inadequate alternative forum for an Iranian
refugee in part because of risks to his personal safety). However, mere general indications of
dangerous conditions, such as a State Department travel advisory, might not suffice to
demonstrate the inadequacy of the forum. See, e.g., Harp v. Airblue Ltd., 879 F. Supp. 2d 1069,
1075 (C.D. Cal. 2012); Ismail v. Am. Univ. of Beirut, 246 F. Supp. 2d 330, 331 (S.D.N.Y. 2003).
If the alternative forum is adequate, a court should turn to balance the public and private
interests laid out by the Supreme Court in Gulf Oil Corp. v. Gilbert, 330 U.S. 501 (1947). See
MBI Grp. 616 F.3d at 576. The private interests include “ease of access to sources of proof”;
“availability of compulsory process for attendance of unwilling” witnesses; “the cost of
obtaining attendance of willing” witnesses; the “possibility of view of premises” by the court and
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jury if needed; and “all other practical problems that make trial of a case easy, expeditious and
inexpensive.” Gilbert, 330 U.S. at 508; see also MBI Grp. 616 F.3d at 576. “There may also be
questions as to the enforcibility of a judgment if one is obtained.” Gilbert, 330 U.S. at 508. The
public interest factors include the “local interest in having localized controversies decided at
home”; the possibility of holding the trial in a forum “at home with the law that must govern the
case, rather than having a court in some other forum untangle problems in conflict of laws, and
in law foreign to itself”; and avoiding the imposition of jury duty on “people of a community
which has no relation to the litigation” and other “administrative difficulties” that flow from
foreign litigation congesting local courts. Id.; see also MBI Grp. 616 F.3d at 576.
A. Iraq is an Inadequate Forum
Wye Oak cites a U.S. Department of State Travel Warning to show that Iraq is unsafe for
U.S. Citizens generally. Pl.’s Opp’n 3 (citing U.S. Department of State Travel Warning for Iraq,
Aug. 9, 2012 4 ). Wye Oak also identifies evidence of more particularized risks posed to its
employees and representatives. It points to the unsolved 2004 murder Dale Stoffel and another
Wye Oak employee, which occurred while they were traveling to Baghdad on behalf of the
company to collect on the same contract at issue in this case. Pl.’s Opp’n 4–6. Wye Oak also
points to death threats current Wye Oak president David Stoffel received following the murder.
Pl.’s Opp’n 4–6.
In response, Iraq provides a declaration from an Iraqi lawyer who states that “[t]he Courts
in Baghdad have been open without disruption from attacks since late 2003”; that he is not aware
of “any instance in which there has been an attack on any litigants or witnesses”; and that, in the
court where this case would be filed, “there have been approximately 225–300 hearings a week
4
A more recent travel advisory continues to warn U.S. Citizens “against all but essential travel to Iraq given the
security situation.” See U.S. Department of State Travel Warning for Iraq, Feb. 25, 2013, available at
http://travel.state.gov/travel/cis_pa_tw/tw/tw_5758.html (last visited Apr. 17, 2013).
6
during the course of at least the past five years, all without any security incident inside the
Courts.” See Decl. of Tarik Al Jibori ¶ 6.D, ECF No. 68-2.
Despite this declaration, the Court finds that Wye Oak’s particularized evidence
regarding the “serious risk to the[] safety” of its employees and representatives in Iraq
convincing. See Exxon Mobil, 393 F. Supp. 2d at 29. Iraq is not an adequate alternative forum
for this litigation.
B. In Any Event, The Public and Private Factors Also Weigh Against Dismissal
Because the Court has determined that Iraq is not an adequate alternative forum, it need
not proceed to balance the private and public interest factors. See Jackson, 52 F. App’x at 518.
Nonetheless, it does so here since the Court finds that only one of these factors weighs in Iraq’s
favor, and is not enough to overcome the “‘substantial presumption’ in favor of a plaintiff's
chosen forum.” See MBI Grp., 616 F.3d at 571.
1. Private Interests
i. Ease of Access to Sources of Proof; Compulsory Process; Cost of
Attendance
Iraq states that it intends to call “important trial witnesses who are in Iraq or only subject
to process in Iraq,” Def.’s Reply 19 (listing witnesses); that “[c]ompelling trial testimony from
Iraqi witnesses . . . is out of the question in this Court,” Def.’s Mem. 24; that “[t]rying the case . .
. based on depositions or responses to letters rogatory will be unfair and ineffective at ferreting
out the truth,” id.; and that “[e]ven assuming all Iraqi fact witnesses stated that they were willing
to attend and testify, self-evidently, the cost of travel and hotel accommodations would run into
thousands of dollars for each,” id. at 25. Iraq also states that many documents are in Iraq,
including official military records which cannot be easily transmitted to the United States. Def.’s
Reply 20–21.
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In response, Wye Oak insists that the “vast majority” of witnesses that it intends to call
are located in the United States or subject to federal courts’ subpoena power. See Pl.’s Opp’n
13–15 (listing witnesses). It also states that the “records regarding contract formation, contract
implementation, and payment issues” that it will “principally rely upon in proving its case” are
already in its possession in the United States. Id. at 15.
It appears that wherever the litigation occurs, some inconvenience and delay caused will
be unavoidable. Because neither side has a clear advantage on this argument, these factors do
not weigh in favor of dismissal.
ii. Possibility of View of the Premises
Iraq speculates that access to “work sites and numerous refurbished vehicles that are in
Iraq” may be necessary for the case. Def.’s Mem. 25. The Court finds that this claim is too
speculative to be credited and that this factor does not weigh in favor of dismissal.
iii. Practical Problems
Iraq argues that it may need to implead a party in this case which “cannot be done here
because personal jurisdiction over [the party] is lacking” but which could be done in Iraqi courts.
Def.’s Mem. 26, 4; Def.’s Reply 22. The party is the General Investment Group, based in Beirut
Lebanon. Iraq asserts that the present case really arises out of a “payment dispute between [the
General Investment Group] and Wye Oak” and thus “[i]mpleading [the Group] is imperative to a
full and final adjudication of this dispute among all interested parties.” Def.’s Mem. 26. Such
difficulties are a proper consideration in forum non conveniens motions. See Piper Aircraft, 454
U.S. at 259.
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Wye Oak does not respond to this claim. Therefore, while the Court does not take a
position as to whether the Group is a necessary party, or is not amenable to process here, it finds
that this factor weighs somewhat in favor of dismissal.
Iraq also insists that the costs and burdens of translation would be extensive if the case
proceeded in this Court, as “[c]ountless . . . relevant documents in the possession of Iraq . . . are
in Arabic,” “[w]itnesses for Iraq are Arabic speakers,” and “the official laws of Iraq also are in
Arabic.” Def.’s Reply 22. Wye Oak counters by insisting that any translation would be
“minimal.” Pl.’s Opp’n 17 n.20.
The Court notes that some amount of translation (in both directions) would also likely be
necessary if the trial were held in Iraq. Accordingly, this factor does not weigh in favor of
dismissal.
iv. Enforcement of Judgment
Iraq asserts that if Wye Oak obtains a judgment in the United States against Iraq, it would
be unable to collect on that judgment by attaching assets belonging to any Iraqi Ministry other
than the Ministry of Defense, as they are “separate juridical entities.” Def.’s Reply 21. In
contrast, any judgment issued by an Iraqi court could be enforced “against immediately
reachable assets in Iraq.” Id.
This is not the first time in this litigation Iraq has asserted this theory—that this suit is
properly against only the Ministry of Defense, not Iraq as a whole. In its appeal to the Fourth
Circuit, Iraq argued that the district court actually lacked subject matter jurisdiction over the case
because the plaintiffs had named only Iraq and their only justiciable claim would be against the
Iraqi Ministry of Defense (“IMOD”), a separate legal entity. See Wye Oak Tech., Inc. v.
Republic of Iraq, 666 F.3d 205 (4th Cir. 2011). The Fourth Circuit rejected this argument,
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finding that “it is the FSIA, and not Iraqi law, that provides the framework for determining
whether Iraq and IMOD are to be treated a[s] separate legal persons” and that, under that statute,
“a foreign state and its armed forces are not legally separate for jurisdictional purposes.” Id. at
213–14.
The issue here involves attachment, not subject matter jurisdiction. Without deciding the
issue, the Court notes that Iraq has provided no basis for why a different result should be reached
in an attachment proceeding than the one reached by both Judge Trenga and the Fourth Circuit
regarding subject matter jurisdiction. Finding Iraq’s arguments lacking in this key respect, the
Court finds that this factor does not weigh in favor of dismissal.
2. Public Interests
i. Local Interest in Resolving Controversy at Home
Iraq asserts that it has a strong national interest in resolving the controversy at home,
since it concerns a contract for work “to bring security to its people prior to the 2005 election.”
Def.’s Reply 24. Wye Oak argues that there is a national interest in the work performed under
the contract, which “continues to be of critical importance to the United States foreign policy.”
Pl.’s Opp’n 18. The Court finds these interests are evenly matched and that this factor does not
weigh in favor of dismissal.
ii. Difficulty of Applying Foreign Law
Iraq asserts that the case will require the application of Iraqi law to “numerous and
complex issues.” Def.’s Reply. 24; see also Def.’s Mem. 29–31 (listing issues). Wye Oak notes
that foreign law is “routinely applied” in this jurisdiction, and are quite capable of doing so.
Pl.’s Opp’n 20. The Court agrees with Wye Oak and finds that this factor does not weigh in
favor of dismissal.
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iii. Jury Duty
The parties agree that Wye Oak would not be entitled to a jury trial in this Court under
the FSIA, so this factor does not figure into the forum non conveniens decision. Def.’s Mem. 27;
Pl.’s Opp’n 18.
iv. Administrative Difficulties
Iraq asserts that “[t]he civil courts of Iraq are no more congested than federal courts in the
United States.” Def.’s Mem. 27. Moreover, Iraq argues that if the case proceeds here, additional
delays “can be expected as a result of the slow and inefficient means of taking foreign discovery
through letters rogatory.” Id.Wye Oak counters by arguing that this foreign discovery process would only have to be
used to recover few, if any, documents in the case. Pl.’s Opp’n 16.
The Court finds that this factor does not weigh in favor of dismissal.
v. Additional “Policy” Concern
Iraq also alleges that Wye Oak, a Pennsylvania corporation, decided to sue Iraq in the
Eastern District of Virginia can “only be explained by Wye Oak’s desire to proceed in the
‘Rocket Docket’”—in other words, the decision had nothing to do with convenience, and
everything to do with an intention to “‘vex,’ harass,’ or ‘oppress’ the defendant.” Def.’s Mem.
31 (quoting Gilbert, 330 U.S. at 508.). Wye Oak counters that it sued in that district because the
Pentagon is located there. Pl.’s Opp’n 12 & n.13. The Court finds that Iraq’s allegations of
litigation harassment are inadequately supported, and that this factor does not weigh in favor of
dismissal.
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3. Analysis
Weighing the public and private interests together, the Court finds that only a single
factor weighs in favor of dismissal: the potential need to implead a party. However, as Iraq will
be able to proceed with its defense theory without this party’s presence, the Court finds that this
factor alone does not outweigh the “substantial presumption” in favor of Wye Oak’s choice of
forum. MBI Grp., 616 F.3d at 571. Accordingly, the Court will not dismiss the case.
IV. CONCLUSION
Both of Iraq’s motions are denied. An order shall issue with this opinion.
Signed by Royce C. Lamberth, Chief Judge, on April 23, 2013.
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