Friedman v. Government of Abu Dhabi, United Arab Emirates ( 2020 )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
WILLIAM J. FRIEDMAN,
Plaintiff,
v. Civil No. 19-2021 (JDB)
GOVERNMENT OF ABU DHABI,
UNITED ARAB EMIRATES, et al.,
Defendants.
MEMORANDUM OPINION
Plaintiff William J. Friedman brought this action against the Government of Abu Dhabi,
Sheikh Khalifa bin Mohamed al Nehyan in his former official capacity as Minister of the
Government of Abu Dhabi Purchasing and Housing Office (collectively, the “Abu Dhabi
defendants”), and Janata Bank, Ltd., seeking to recover damages for defendants’ alleged failure to
honor a debt owed to him. Several motions are now pending before the Court: first, the Abu Dhabi
defendants’ timely motion to dismiss; second, Friedman’s motion for default judgment against
Janata Bank, which began participating in the litigation late, following an entry of default against
it by the Clerk of Court; and third, Janata Bank’s motion to set aside the entry of default, filed in
conjunction with a proposed motion to dismiss. For the reasons stated below, the Court concludes
that it lacks subject matter jurisdiction over most of Friedman’s claims and that the rest are barred
by the applicable statute of limitations.
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Background 1
Many of the facts in this case, particularly the timing of events, are something of a mystery.
From what the Court can glean from the complaint, the case stems back to when, at an unspecified
time but presumably before 1985, the government of the United Arab Emirates (of which Abu
Dhabi is a constituent part) approached Friedman and asked him to “help establish the requisite
political relationships between the UAE and the United States for the purpose of facilitating
military sales agreements between the two nations.” Compl. [ECF No. 1] ¶ 19. At the time,
Friedman was an advisor with “extensive experience providing advisory services such as guiding
and facilitating introductions to high-level policymakers in the U.S. government.” Id. ¶ 18.
Following the initial approach by UAE, Friedman participated in several meetings in Washington,
DC, to discuss UAE’s relationship with the United States and how Friedman could help “advanc[e]
dialogues with Pentagon decisionmakers and legislators on Capital Hill.” Id. ¶ 20. During one or
more of these meetings, Friedman agreed to advise UAE, and UAE “agreed to provide Mr.
Friedman good and valuable consideration in exchange for his services.” Id. ¶ 21.
According to the complaint, Friedman made good on his obligations to UAE by persuading
a top Defense Department official, as well as U.S. Senator John Tower, “to provide fair and serious
evaluation of [UAE’s] strategic military interests.” Id. ¶ 22. Because of Friedman’s efforts, the
U.S. government considered UAE’s “requests for strategic military hardware.” Id. ¶ 23. Friedman
provided further services to UAE (again at an unspecified time) by bringing his “business and
financial resources” to bear to help UAE “encourage the economic growth of, and thereby
stabilize,” the country, which was then “in its nascent stage as a nation.” Id. ¶ 24. Specifically,
Friedman “invested significant capital” in a joint venture with UAE designed to “provide
1
The relevant facts are drawn from Friedman’s complaint and are assumed to be true for purposes of the
motion to dismiss.
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engineering and construction services for public infrastructure projects” planned by UAE. Id. The
joint venture was unsuccessful and went bankrupt. Id. ¶ 25.
To repay Friedman for his “extraordinary services” to UAE, at some point “Abu Dhabi
caused to be delivered to Mr. Friedman at his then-residence in Alexandria, Virginia,” two
documents executed under seal. Id. ¶ 27. Both documents were dated May 30, 1975, with maturity
dates in 1985. Id. The documents, which branded themselves as “promissory note[s],” each stated
that, at maturity, the “identified holder” would be paid $2,500,000. Exhibit 1 to Compl.
(“Promissory Notes”) [ECF No. 1-5] at 2, 4. The notes themselves did not identify a holder. The
notes had several other features: (1) they could be “transferred, pledged, or assigned one or more
times”; (2) they were to be governed by the laws of the “International Chamber of Commerce of
Paris, resolution 222, last edition 1962,” as well as Swiss and Canton of Geneva law prevailing in
1975; and (3) apparently before payment, “all the signatures must be authenticated by a bank.” Id.
The notes, on their face, purported to be issued by Abu Dhabi and Khalifa and bore the seals of a
number of Abu Dhabi officials. See id. at 2–4. Abu Dhabi was the “first guarantor” of the notes,
and Janata Bank was the “second guarantor.” Id. at 3, 5.
Since the maturity dates of the promissory notes in 1985, Friedman has made a number of
attempts to collect the $5,000,000 that he claims is owed to him. His first attempt involved placing
the notes for collection at First American Bank in Virginia; this attempt ended in failure when Abu
Dhabi officials “disclaim[ed] any knowledge of the issuance of the [promissory notes].” Compl.
¶¶ 43–50. The bank subsequently returned the notes to Friedman. Id. Some time thereafter,
Friedman became aware of an October 6, 1987 letter from the UAE Presidential Court to the U.S.
Ambassador to UAE, in which UAE represented that neither Khalifa nor Janata Bank had “any
connection with these notes” and that the notes were false and fraudulent. Id. ¶¶ 51–52; Exhibit 5
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to Compl. [ECF No. 1-9] at 3. This letter led Friedman to “believe that the [promissory notes]
likely were invalid.” Compl. ¶ 56.
Nonetheless, Friedman opted “to take further steps to confirm [the] assertion that the
[promissory notes] are inauthentic.” Id. Between 1987 and 2010, he enlisted the help of no less
than three U.S. senators to attempt to recover on the promissory notes: in 1987, Senator Paul
Trible; in 1988, Senator John Kerry; and in 2010, Senator John D. Rockefeller IV. Id. ¶¶ 59, 66–
70, 81. Each senator attempted to assist Friedman by using political and diplomatic channels to
reach out to UAE; each time, UAE responded that the notes were “fake, forged, and fraudulent.”
Id. ¶¶ 62, 67, 82–85. Throughout this period, and until February 2019, Friedman believed “that
any [court] action to enforce the [promissory notes] would be futile.” Id. ¶ 88.
In February 2019, Friedman discovered that ten other promissory notes existed that are
“substantially similar” to those in his possession. Id. ¶ 89. This discovery led Friedman to believe
that his promissory notes are valid, and that Abu Dhabi’s consistent “representations that the
[promissory notes] are ‘fake’ and ‘forgeries’ were made with the intention of fraudulently
concealing [its] wrong-doing from Mr. Friedman and to lull him into not filing suit . . . sooner.”
Id. ¶ 102.
Friedman then decided to bring this action, which he filed on July 8, 2019. His complaint
asserts three counts: (1) breach of contract, against all defendants; (2) quantum meruit, against the
Government of Abu Dhabi; and (3) unjust enrichment, against the Government of Abu Dhabi. Id.
¶¶ 104–17. The Abu Dhabi defendants timely moved to dismiss. See Defendants the Government
of Abu Dhabi, United Arab Emirates’ Mot. to Dismiss Pl.’s Compl. (“Abu Dhabi MTD”) [ECF
No. 23]. Janata Bank, however, failed to timely file an answer or motion to dismiss as required
by the Federal Rules of Civil Procedure. Instead, it sent two letters to the Court indicating that it
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had not been properly served under Bangladeshi law. See Letter [ECF No. 15]; Letter [ECF No.
22].
On January 10, 2020, Friedman filed simultaneously a declaration requesting the Clerk of
Court to enter a default against Janata Bank and a motion for default judgment. See Decl. in Supp.
of Entry of Default Against Janata Bank [ECF No. 25]; Pl.’s Mot. for Default J. Against Janata
Bank & Statement of P. & A. in Supp. Thereof (“Default Mot.”) [ECF No. 26]. Three days later,
the Clerk of Court entered a default against Janata Bank. See Default [ECF No. 28]. Upon entry
of default, counsel for Janata Bank entered an appearance and began actively participating in the
litigation. Then, following the Court’s grant of an extension of time to file the relevant briefs,
Janata Bank moved to set aside the entry of default and filed a proposed motion to dismiss. See
Def. Janata Bank Ltd. Mot. to Set Aside Entry of Default (“Janata Mot. to Set Aside”) [ECF No.
34]; Def. Janata Bank Ltd. Mot. to Dismiss Compl. (“Janata Proposed MTD”) [ECF No. 35].
There are, therefore, three pending motions before the Court: (1) the Abu Dhabi
defendants’ motion to dismiss; (2) Friedman’s motion for default judgment against Janata Bank;
and (3) Janata Bank’s motion to set aside the entry of default. All three motions are now fully
briefed and ripe for decision.
Discussion
I. The Foreign Sovereign Immunities Act
Analysis of this case begins, and in part ends, with the Foreign Sovereign Immunities Act
(“FSIA”). The FSIA provides “the sole basis for obtaining jurisdiction over a foreign state in
[U.S.] courts.” Argentine Republic v. Amerada Hess Shipping Corp., 488 U.S. 428, 434 (1989);
see also Orange Middle East & Africa v. Republic of Equatorial Guinea, 2016 WL 2894857, at *2
(D.D.C. May 18, 2016) (“FSIA is the source of jurisdiction in federal court over claims against
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foreign states, their agencies, or their instrumentalities.”). Under the FSIA, “a foreign state is
presumptively immune from the jurisdiction of United States courts,” and “unless a specified
exception applies, a federal court lacks subject-matter jurisdiction over a claim against a foreign
state.” Saudi Arabia v. Nelson, 507 U.S. 349, 355 (1993); see also 28 U.S.C. §§ 1604–05. The
FSIA’s enumerated exceptions are exhaustive: “if no exception applies, the district court has no
jurisdiction.” Odhiambo v. Republic of Kenya, 764 F.3d 31, 34 (D.C. Cir. 2014). And if a court
lacks subject-matter jurisdiction, “the court must dismiss the action.” Fed. R. Civ. P. 12(h)(3)
(emphasis added); see Kontrick v. Ryan, 540 U.S. 443, 455 (2004).
Defendants here all argue that the FSIA immunizes them from Friedman’s suit. The Abu
Dhabi defendants do so in the context of their Fed. R. Civ. P. 12(b)(1) motion to dismiss, while
Janata Bank does so in the context of its motion to set aside the entry of default and its opposition
to Friedman’s motion for default judgment. (Janata Bank’s proposed motion to dismiss raises
similar arguments under Rule 12(b)(1).) The somewhat different procedural postures of the Abu
Dhabi defendants and Janata Bank, however, makes no real difference to this Court’s initial
subject-matter jurisdiction inquiry, because “[s]overeign immunity under the FSIA is . . . a gateway
issue, not simply a plea in defense to a claim: if the foreign state is entitled to immunity with
respect to the claim asserted, then the district court lacks both subject matter and personal
jurisdiction, and must dismiss the case.” Practical Concepts, Inc. v. Republic of Bolivia, 811 F.2d
1543, 1544–45 (D.C. Cir. 1987). In an FSIA case, whether on a defendant’s motion to dismiss or
a plaintiff’s motion for default judgment, the plaintiff “bears an initial burden of production to
show an exception to immunity . . . applies”; then, “the sovereign bears the ultimate burden of
persuasion to show the exception does not apply.” Owens v. Republic of Sudan, 864 F.3d 751,
784 (D.C. Cir. 2017) (quotation omitted); see Odhiambo v. Republic of Kenya, 930 F. Supp. 2d
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17, 23 (D.D.C. 2013), aff’d 764 F.3d 31 (D.C. Cir. 2014) (“Under Rule 12(b)(1), the plaintiff bears
the burden of establishing jurisdiction by a preponderance of the evidence.”); 28 U.S.C. § 1608(e)
(“No judgment of default shall be entered . . . unless the claimant establishes his claim or right to
relief by evidence satisfactory to the court.”). On a motion for default judgment, even if a
defendant never appears (which is not the situation here), the court must still satisfy itself that the
plaintiff has demonstrated that an FSIA exception applies; if the plaintiff has not done so, the
action must be dismissed. See Strange v. Islamic Republic of Iran, 320 F. Supp. 3d 92, 99 (D.D.C.
2018).
The Court, therefore, proceeds to analyze whether plaintiff has established that the Court
has subject-matter jurisdiction over any of his claims.
A. Applicability of the FSIA’s Protections to Each of the Defendants
There is an initial question whether each of the defendants here is entitled to invoke the
FSIA’s protections. By its terms, the FSIA immunizes “foreign state[s]” from the jurisdiction of
U.S. courts. 28 U.S.C. § 1604. “Foreign state” is defined to include “an agency or instrumentality
of a foreign state.” Id. § 1603(a). An entity qualifies as an agency or instrumentality of a foreign
state if that entity is (1) a separate legal person; (2) an organ of a foreign state or its shares are
majority-owned by a foreign state; and (3) neither a citizen of the United States nor “created under
the laws of any third country.” Id. § 1603(b). Moreover, “[i]ndividuals acting in their official
capacities are considered ‘agenc[ies] or instrumentalit[ies] of a foreign state;’ these same
individuals, however, are not entitled to immunity under the FSIA for acts that are not committed
in an official capacity.” Jungquist v. Sheikh Sultan Bin Khalifa Al Nahyan, 115 F.3d 1020, 1027
(D.C. Cir. 1997).
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Friedman does not contest that defendants here are “foreign states” within the meaning of
the FSIA, nor could he. Abu Dhabi is plainly a foreign state to which the FSIA applies. See
Compl. ¶ 13 (“Abu Dhabi is an Emirate in the UAE and a sovereign entity.”). Likewise, Janata
Bank is plainly an agency or instrumentality of Bangladesh. See id. ¶ 14 (“Janata is a financial
institution owned and controlled by Bangladesh . . . .”); Janata Proposed MTD at 11 (“Janata
qualifies for immunity under the FSIA because it is undisputed that it is an ‘agency or
instrumentality’ of Bangladesh.”); see also Lalalis Trading PTE, Ltd. v. Janata Bank, 52 A.D.3d
439, 439–40 (N.Y. App. Div. 2008) (concluding that Janata Bank is protected by the FSIA). As
for Khalifa, he is being sued “in his former official capacity as Minister of the Government of Abu
Dhabi Purchasing and Housing Office.” Compl. at 2. And it is clear from the allegations in the
complaint that he is being sued solely for actions taken in his official capacity. See id. ¶¶ 15, 28,
52, 60, 92. For instance, the complaint alleges that Khalifa “signed and issued the [promissory
notes] in his former official capacity as Minister of the [Abu Dhabi Purchasing and Housing
Office].” Id. ¶ 60. Friedman makes no allegation that Khalifa’s actions were personal in nature,
and indeed the complaint states that Khalifa was acting to “carry[] out the duties, responsibilities,
and decisions” of his office under the “law of Abu Dhabi and the UAE.” Id. ¶ 15. Hence, Khalifa
qualifies as an agency or instrumentality of Abu Dhabi.
All three defendants are thus “foreign states” as defined by the FSIA and are entitled to a
“presumption of immunity.” Owens, 864 F.3d at 784.
B. The Commercial Activity Exception
To overcome that presumption of immunity, Friedman relies on the FSIA’s commercial
activity exception. Under that exception, a foreign state is not immune from suit when “the action
is based [1] upon a commercial activity carried on in the United States by the foreign state; or [2]
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upon an act performed in the United States in connection with a commercial activity of the foreign
state elsewhere; or [3] 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). Friedman invokes clause three for his breach of contract claim
and clause one for his equitable claims. The Court addresses these invocations in turn.
a. Breach of Contract Claim Against All Defendants
In essence, Friedman’s breach of contract claim is that defendants issued and guaranteed
the promissory notes but failed to pay the amounts owed when Friedman, the holder of the notes
at maturity, attempted to collect. See Default Mot. at 19–20. For clause three of the commercial
activity exception to apply to this claim, Friedman must establish that the claim is (1) based upon
an act outside the territory of the United States, (2) taken in connection with a commercial activity
of the foreign state outside this country, that (3) caused a direct effect in the United States.
Republic of Argentina v. Weltover, Inc., 504 U.S. 607, 611 (1992). It is uncontested that
Friedman’s allegations satisfy the first requirement of clause three: his claim is based upon the
“act” of defendants’ alleged non-payment of the promissory notes, which happened outside of the
United States (presumably in Abu Dhabi and Bangladesh). See Pl.’s Mem. of P. & A. in Opp’n to
Defs. Abu Dhabi & Khalifa’s Mot. to Dismiss (“Opp’n to Abu Dhabi MTD”) [ECF No. 27] at 20–
21. Two questions remain: whether the notes constitute “commercial activity” and whether the
failure to pay the notes caused a “direct effect” in the United States.
The FSIA defines “commercial activity” as “either a regular course of commercial conduct
or a particular commercial transaction or act.” 28 U.S.C. § 1603(d). Whether an activity is
commercial “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.” Id. As the Supreme Court has put it,
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“the issue is whether the particular actions that the foreign state performs (whatever the motive
behind them) are the type of actions by which a private party engages in trade and traffic or
commerce.” Weltover, 504 U.S. at 614 (internal quotation marks omitted); see Nelson, 507 U.S.
at 360 (stating that a foreign state engages in commercial activity “where it exercises only those
powers that can also be exercised by private citizens, as distinct from those powers peculiar to
sovereigns” (internal quotation marks omitted)). To determine whether the promissory notes at
issue here constituted “commercial activity,” then, this Court must examine whether they are the
type of action by which a private party would engage in trade or commerce.
Friedman argues that the Supreme Court’s Weltover decision is decisive and on-point,
requiring that the promissory notes be considered commercial activity. See Opp’n to Abu Dhabi
MTD at 19–21. In Weltover, the question was whether Argentina’s issuance of bonds “as part of
a plan to stabilize its currency” was “commercial activity.” 504 U.S. at 609, 612. The Court
concluded that it was. Id. at 614. The Court reasoned that despite the governmental purpose of
the bond issuance (which is irrelevant under the FSIA for this analysis), in nature (“i.e., the outward
form of the conduct that the foreign state performs or agrees to perform”) the bonds were “in
almost all respects garden-variety debt instruments.” Id. at 615, 617. The Argentinian bonds could
be “held by private parties” and “traded on the international market,” were “negotiable,” and
“promise[d] a future stream of cash income.” Id. at 615. In effect, there was “nothing distinctive
about the state’s assumption of debt” that rendered it uniquely sovereign or non-commercial. Id.
The bond issuance was thus commercial activity. Id.
Friedman analogizes his promissory notes to the bonds in Weltover, suggesting that the
notes are “garden-variety debt instruments” and that issuing them or guaranteeing them is “exactly
the kind[] of activit[y] a private party in a commercial marketplace would undertake.” Opp’n to
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Abu Dhabi MTD at 21. In response, the Abu Dhabi defendants point out that, on their face, the
notes do not seem to have all the same features that led the Supreme Court to conclude that the
Argentinian bonds were commercial activity, such as negotiability or the ability to be traded on
the international market. Reply Mem. in Supp. of Defs. the Gov’t of Abu Dhabi, United Arab
Emirates’ Mot. to Dismiss (“Abu Dhabi Reply”) [ECF No. 33] at 3–4. The Abu Dhabi defendants
also argue that it is difficult to assess the precise “nature” of the notes, as required by § 1603(d),
given that the complaint contains no allegations explaining how the notes were issued, how many
were issued, to whom they were originally assigned, or how they came into Friedman’s possession.
Id.
There is some force to the Abu Dhabi defendants’ arguments, and the Court acknowledges
that Friedman’s complaint is not a model of clarity. However, most courts have not read Weltover
to be limited to its facts, as the Abu Dhabi defendants would have it, and have instead read it to
stand for the broader principle that “the issuance of sovereign debt is a commercial act.” See, e.g.,
Phaneuf v. Republic of Indonesia, 106 F.3d 302, 307 (9th Cir. 1997); Glob. Index, Inc. v. Mkapa,
290 F. Supp. 2d 108, 112 (D.D.C. 2003) (concluding, with “no difficulty,” that “Tanzanian
promissory notes [are] a commercial activity”). Indeed, just a year after Weltover, the Supreme
Court itself characterized the decision’s holding as follows: “[b]ecause Argentina had merely dealt
in the bond market in the manner of a private player, . . . its refinancing of the bonds qualified as
a commercial activity for purposes of the [FSIA] despite the apparent governmental motivation.”
Nelson, 507 U.S. at 361. Moreover, Friedman’s promissory notes do have several features
similar—though not identical—to those the Supreme Court thought important in Weltover. They
can be held by private parties, may be “transferred, pledged[,] or assigned,” and promise a lump
sum future payment. Promissory Notes at 2; cf. Turkmani v. Republic of Bolivia, 193 F. Supp. 2d
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165, 175 (D.D.C. 2002) (concluding that issuance of debt instruments that “promised future
interest payments and could be held, negotiated for, and traded by private parties” was commercial
activity). Most importantly, the notes have no features that are “peculiar to [the] sovereign[]”—
there is “nothing about the issuance of [the notes] . . . that is not analogous to a private commercial
transaction.” Weltover, 504 U.S. at 614, 616. The Court therefore concludes that the notes are
“commercial activity” and satisfy the second requirement of clause three.
Next, the Court must determine whether the promissory notes have a “direct effect” in the
United States, under clause three’s final requirement. Once again, the leading Supreme Court case
on the meaning of “direct effect” is Weltover. After determining that issuance of the Argentinian
bonds was commercial activity, the Weltover Court went on to examine whether Argentina’s
unilateral rescheduling of its payment of the bonds had a “direct effect” in the United States. Id.
at 618–19. The Court explained that “an effect is ‘direct’ if it follows as an immediate consequence
of the defendant’s activity.” Id. at 618 (cleaned up). And because the bond contract at issue there
specified the place of performance as New York, such an immediate consequence existed: “the
rescheduling of those obligations necessarily had a ‘direct effect’ in the United States[.] Money
that was supposed to have been delivered to a New York bank for deposit was not forthcoming.”
Id. at 619.
The D.C. Circuit, in a line of cases interpreting Weltover, has elaborated the meaning of
“direct effect” still further. In Goodman Holdings v. Rafidain Bank, 26 F.3d 1143 (D.C. Cir.
1994), the Circuit considered whether the Iraqi government’s failure to honor letters of credit that
it had issued to two Irish corporations had a direct effect in the United States, id. at 1144. The
panel concluded that there was no direct effect because “[n]either New York nor any other United
States location was designated as the ‘place of performance.’” Id. at 1146. It did not matter that
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Iraq “might well have paid [plaintiffs] from funds in United States banks,” because Iraq “might
just as well have done so from accounts located outside the United States”; there was therefore no
necessary “immediate consequence” of the breach in the United States. Id. at 1146–47. Similarly,
in Peterson v. Royal Kingdom of Saudi Arabia, 416 F.3d 83 (D.C. Cir. 2005), the Circuit rejected
a plaintiff’s argument that an agreement by Saudi Arabia to pay him wherever he lived had a direct
effect in the United States, because there was “no agreement—implied or express—that [he] was
to be paid in the United States,” id. at 91. This pay-wherever-you-are arrangement did not satisfy
the Weltover requirement that an effect must have an “immediate consequence” in the United
States, because plaintiff’s ability to move and receive payment in the location of his choice
constituted an “intervening element” that severed the direct link between the agreement and the
United States. See id.
Most recently, in Odhiambo v. Republic of Kenya, the Circuit affirmed the vitality of its
holdings in Goodman and Peterson and explained that in cases involving alleged breaches of
contract, whether the breach has a direct effect in the United States “turn[s] on whether the contract
in question establishe[s] the United States as a place of performance.” Odhiambo, 764 F.3d at 38.
“By definition,” the court stated, “breaching a contract that establishes the United States as a place
of performance will have a direct effect here, whereas breaching a contract that establishes a
different or unspecified place of performance can affect the United States only indirectly.” Id.
Any other rule “would create an incentive for every breach of contract victim in the world to move
to the United States, demand payment here, and then sue alleging a direct effect of nonpayment in
the United States.” Id. at 39. That result would “undermine Congress’s objective of avoiding
turning U.S. courts into small international courts of claims.” Id. (internal quotation marks
omitted). Hence, the Circuit has drawn a “very clear line: . . . breaching a contract that establishes
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or necessarily contemplates the United States as a place of performance causes a direct effect in
the United States, while breaching a contract that does not establish or necessarily contemplate the
United States as a place of performance does not cause a direct effect in the United States.” Id. at
40.
Friedman faces an uphill battle under this standard. Nothing on the face of the promissory
notes says anything about the place of performance—they are entirely silent on the question.
Friedman even concedes that the notes do not “establish” the United States as the place of
performance. See Pl.’s Combined Mem. of P. & A. in Opp’n to Def. Janata Bank’s Mot. to Set
Aside Entry of Default & Reply in Supp. of Pl.’s Mot. for Default Judgment Against Janata Bank
(“Friedman Response to Janata”) [ECF No. 39] at 22 n.22. But he nevertheless argues that the
notes have a direct effect in the United States because they “necessarily contemplate[]” the United
States as a place of performance. Id.; see Odhiambo, 764 F.3d at 40.
To do so, he relies on the portion of the notes reading:
The terms and conditions of this promissory note are to be governed and construed
in accordance with the documentary credit instruments as approved by the
International Chamber of Commerce of Paris, resolution 222, last edition 1962 for
Documentary Credits and in accordance with the law of the Confederation of
Switzerland and of the Canton of Geneva prevailing on the date of the issue.
Promissory Notes at 2, 4. To explain what that provision means, Friedman has submitted an
affidavit from Marco Villa, an expert on Swiss law. See Ex. A to Opp’n to Abu Dhabi MTD
(“Villa Decl.”) [ECF No. 27-1] ¶¶ 2–3. According to Villa, “there is no prohibition under Swiss
law prevailing on May 30, 1975 denying a creditor the right to sue for payment of a defaulted debt
instrument in any jurisdiction of his choice (except in Switzerland).” Id. ¶ 6(a). Friedman, armed
with Villa’s affidavit, argues that under Swiss law he, “as the holder of the [promissory notes], has
the right to collect on them in the United States,” and therefore the Abu Dhabi defendants’ and
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Janata Bank’s “breaches of their promises under the instruments have ‘direct effects’ in the United
States.” Opp’n to Abu Dhabi MTD at 22.
The Court does not agree that a provision giving a creditor the right to sue for enforcement
of the notes anywhere in the world suffices to satisfy the “direct effect” requirement. The Court
will assume—though the Abu Dhabi defendants dispute this point 2—that a “place where the
creditor can sue to enforce a contract” provision, like the one in Friedman’s promissory notes, has
the same legal effect as the more common “place of performance” provision. In other words, the
Court will assume that a worldwide sue-for-enforcement provision grants the creditor (in this case,
Friedman) the right to demand performance anywhere in the world, just as a worldwide place-of-
performance provision would.
Nevertheless, the promissory notes here still fail the direct effect test. As the Odhiambo
court put it, “breaching a contract that establishes a[n] . . . unspecified place of performance can
affect the United States only indirectly, as the result of some intervening event.” 764 F.3d at 38.
The promissory notes here do not specify any specific jurisdiction as the place of performance,
instead allowing performance to occur anywhere in the world. The D.C. Circuit has repeatedly
rejected these “pay wherever you are” arrangements as insufficient to create a direct effect in the
United States. See id. at 39; Peterson, 416 F.3d at 90–91 (agreement to pay workers “wherever
[they] lived” did not create direct effect in United States); Goodman, 26 F.3d at 82–83 (letters of
credit that did not specify a place of performance did not create direct effect in the United States);
Zedan v. Kingdom of Saudi Arabia, 849 F.2d 1511, 1514 (D.C. Cir. 1988) (agreement to “forward
2
They contend that a provision allowing a party to sue worldwide to enforce non-payment is an additional
step removed from the United States in comparison with a worldwide place-of-performance provision, because there
are two intervening elements between the breach and the United States: first, where the creditor happens to be when
the breach occurs, and second, the creditor’s choice of jurisdiction in which to sue. See Abu Dhabi Reply at 7–8. The
Court sees the logic in this argument, but declines to decide the question because Friedman’s direct effect argument
fails even under his own view of the enforcement provision.
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the money to [plaintiff] wherever he chose to travel” did not create direct effect in the United
States).
Friedman tries to get around this clear Circuit precedent by arguing that the fact that the
promissory notes specify that they will be paid out in U.S. currency mandates a different outcome.
Opp’n to Abu Dhabi MTD at 25. But that mere fact, standing alone, does not show that the notes
“necessarily contemplate” performance in the United States—the U.S. dollar is a commonly used
currency the world over. See Global Index, Inc., 290 F. Supp. 2d at 114 (rejecting argument that
direct effect existed where “[t]he notes plainly require payment in U.S. dollars to a U.S. company
but, on their face, do not designate any place of payment at all, let alone a particular bank or city
in the United States”).
Nor is the Court persuaded by Friedman’s passing argument that because Abu Dhabi
caused the notes to be delivered to his residence in the United States, non-performance of the notes
thereby necessarily causes a direct effect in the United States. See Opp’n to Abu Dhabi MTD at
25 n.14. Peterson presented similar facts: Saudi Arabia had an agreement to pay plaintiff and
“understood” that he would return to the United States and expect to be paid there. 416 F.3d at
90–91. Nonetheless, the D.C. Circuit concluded that there was no direct effect, because there was
no actual “agreement—implied or express—that [plaintiff] was to be paid in the United States.”
Id. at 91. Instead, the contract in Peterson promised to pay the plaintiff wherever he was, regardless
of where the parties expected that might be at the time the contract was formed. Id. There was
thus an intervening element between the contract and the effect in the United States: the plaintiff’s
choice of residence. See id. Similarly here, under Swiss law, even if Friedman lived in the United
States when he came into possession of the notes, he could have moved away from the United
States and sued in any other jurisdiction to enforce them. His choice to remain in the United States
16
and sue here is an intervening element that severs the direct link between the notes and the United
States.
In an attempt to shore up his position, Friedman calls the Court’s attention to the Sixth
Circuit’s decision in DRFP L.L.C. v. Republica Bolivariana de Venezeula, 622 F.3d 513 (6th Cir.
2010). There, the panel considered promissory notes similar in some respects to those at issue
here; in particular, the notes were also governed by Swiss law, such that “the bearer of the notes
may sue for collection in the jurisdiction of his choice.” Id. at 516. The panel divided over the
question whether non-payment of the notes had a direct effect in the United States. The majority
determined that they did have a direct effect in the United States. Id. at 517. In the majority’s
view, the direct effect requirement was satisfied because “the parties implicitly agreed to leave it
to the bearer to demand payment of the notes anywhere,” including within the United States. Id.
The dissent disagreed that this was sufficient to satisfy Weltover, concluding that “[t]he effect on
the United States [was] not direct because it [was] not an immediate consequence of the
defendant’s activity”; instead, “it was a consequence of [plaintiff’s] choice of the United States.”
Id. at 523 (Martin, Jr., J., concurring in part and dissenting in part). The dissent thought it
“incredible that a country issuing notes would, under any circumstances, waive its sovereign
immunity in every country in the world in which a noteholder could take the notes and [sue for
enforcement].” Id.
This Court is inclined to think that the DRFP dissent had the better of that argument. But
whatever the merits of the DRFP majority’s reasoning, the decision is clearly in conflict with this
Circuit’s precedents. Indeed, in Odhiambo, in a partial dissent, Judge Pillard expressly
distinguished the D.C. Circuit’s approach from that taken in DRFP, noting that “the majority
opinion’s narrowing approach to our FSIA direct-effects precedent, which requires a U.S. place-
17
of-performance clause, conflicts with” the DRFP decision. Odhiambo, 764 F.3d at 47 (Pillard, J.,
concurring in part and dissenting in part). Friedman cannot, therefore, rely on DRFP to get around
binding D.C. Circuit precedent culminating in Odhiambo.
That precedent dictates that Friedman’s promissory notes have, at best, an indirect effect
in the United States. As a result, this Court concludes that Friedman has not met his burden of
production to show that clause three of the FSIA’s commercial activity exception applies to his
breach of contract claim. See Owens, 864 F.3d at 784. With respect to that claim, he has therefore
failed under Rule 12(b)(1) to establish jurisdiction against Abu Dhabi or Khalifa and under 28
U.S.C. § 1608(e) to establish jurisdiction against Janata Bank by evidence satisfactory to the Court.
The Court will dismiss the breach of contract claim for lack of subject-matter jurisdiction. 3
b. Equitable Claims Against Abu Dhabi
In the alternative to his breach of contract claim, Friedman brings equitable claims of
quantum meruit (contract implied-in-fact) and unjust enrichment against only Abu Dhabi. See
Compl. ¶¶ 109–17. For these claims, Friedman invokes clause one of the commercial activity
exception as the basis for subject-matter jurisdiction. See Opp’n to Abu Dhabi MTD at 26. Clause
one requires Friedman to establish that his equitable claims are “based upon a commercial activity
carried on in the United States by the foreign state.” 28 U.S.C. § 1605(a)(2). Friedman identifies
two potential activities of Abu Dhabi within the United States that would satisfy clause one: (1)
Abu Dhabi’s “causation of the delivery of the [promissory notes] to Mr. Friedman at his then-
residence in Alexandria, Virginia”; and (2) “the meetings and discussions Abu Dhabi had with him
3
Because the Court lacks subject-matter jurisdiction over Janata Bank, it will also set aside the Clerk’s entry
of default against Janata Bank. See Strange, 320 F. Supp. 3d at 99; see also Khochinsky v. Republic of Poland, 2019
WL 5789740, at *4 (D.D.C. Nov. 6, 2019).
18
in Washington, D.C. to negotiate his provision of advisory services on behalf of the Emirate.” 4
Opp’n to Abu Dhabi MTD at 26–27. 5 The first activity does not satisfy clause one, but the second
does.
As to the delivery of the promissory notes to Friedman, this activity fails to meet the first
requirement of clause one: that the claims be “based upon the aspect of the foreign state’s
commercial activity that establishes substantial contact with the United States.” Odhiambo, 764
F.3d at 37 (emphasis omitted); see Nelson, 507 U.S. at 356–58. In this context, “based upon”
means “those elements of a claim that, if proven, would entitle a plaintiff to relief under his theory
of the case.” Nelson, 507 U.S. at 357. In other words, a claim is based upon the “core of the suit”:
the “particular conduct that constitutes the gravamen of the suit.” OBB Personenverkehr AG v.
Sachs, 136 S. Ct. 390, 396 (2015) (internal quotation marks omitted). If the activity that a plaintiff
alleges established substantial contact with the United States “is not necessary to make out any
element of” his or her claim, then the claim is not “based upon” that activity. Odhiambo, 764 F.3d
at 37. Here, the fact that Abu Dhabi caused the notes to be delivered to Friedman’s Alexandria
4
Friedman’s filings in this case regularly refer interchangeably—and confusingly—to the UAE and the
Government of Abu Dhabi. For instance, at one point in his complaint, Friedman states that “Abu Dhabi approached
[him] about enlisting his assistance to help establish the requisite political relationships between the UAE and the
United States.” Compl. ¶ 19. But in the next paragraph, when elaborating on that approach, Friedman states that
“[s]pecifically, then-UAE Embassy official Hamad Al Madfa invited Mr. Friedman to attend meetings at the UAE
Embassy in Washington, D.C.” Id. (emphasis added). Given that they are not the same entity (the UAE encompasses
but is separate from Abu Dhabi, much like the United States encompasses but is separate from Massachusetts), this
consistent error is potentially problematic for some of Friedman’s claims. For example, his complaint does not
specifically allege that any Abu Dhabi officials attended the business meetings in Washington, D.C. that he uses as
the basis for his argument that the commercial activity exception applies to his equitable claims—he refers only to
UAE officials. Id. ¶¶ 20–23. However, given the interchangeability of Friedman’s references to UAE and Abu Dhabi
throughout the complaint, the Court will assume for now that some Abu Dhabi officials attended those meetings.
5
Friedman does not press his alleged joint venture with Abu Dhabi as a basis for subject-matter jurisdiction.
See Opp’n to Abu Dhabi MTD at 26 (calling it a “gross mischaracterization” of his claims to argue that “[t]he
commercial activities of Abu Dhabi upon which Mr. Friedman’s claims are based are . . . any commercial relationship
between Mr. Friedman and [Abu Dhabi] with respect to the joint venture Mr. Friedman helped to establish in the
UAE”).
19
residence is not necessary to make out any element of his quantum meruit or unjust enrichment
claims. 6 This is fatal to his argument that his equitable claims are “based upon” that activity.
Friedman has better luck with his second argument, relating to his meetings with Abu
Dhabi, though the Court frames his point slightly differently than he has. As it must, the Court
begins by identifying the specific conduct upon which Friedman’s equitable claims are based, or
the “core” or “gravamen” of the suit. See Sachs, 136 S. Ct. at 396; Jam v. Int’l Finance Corp.,
2020 WL 759199, at *8 (D.D.C. Feb. 14, 2020) (explaining that courts should take a “holistic”
approach to identify the gravamen). In similar cases, involving breach of contract or related
equitable claims, courts routinely identify the breach (or formation plus breach) as the gravamen.
See, e.g., Petersen Energia Inversora S.A.U. v. Argentine Republic & YPF S.A., 895 F.3d 194,
207 (2d Cir. 2018) (“[W]e conclude that [plaintiff’s] lawsuit is ‘based on’ Argentina’s breach of a
commercial obligation.”); Devengoechea v. Bolivarian Republic of Venezuela, 889 F.3d 1213,
1223 (11th Cir. 2018) (“The conduct that actually injured [plaintiff]—and therefore makes up the
gravamen of [his] lawsuit—is Venezuela’s failure to return [artwork] to [plaintiff] or to pay him
for it.”); Lempert v. Republic of Kazakhstan, 62 F. App’x 355, 355 (D.C. Cir. 2003) (“[T]his action
is based on the formation and alleged breach of the consulting agreement.”). So too here. The
gravamen of Friedman’s equitable claims is that Abu Dhabi broke its promise, made during its
meetings with Friedman, to pay him in exchange for valuable services rendered in the United
States. See Compl. ¶¶ 110–11, 115–16. That conduct is “at [the] foundation” of Friedman’s
6
The elements of an unjust enrichment claim are: “(1) the plaintiff conferred a benefit on the defendant; (2)
the defendant retains the benefit; and (3) under the circumstances, the defendant’s retention of the benefit is unjust.”
News World Commc’ns, Inc. v. Thompsen, 878 A.2d 1218, 1222 (D.C. 2005). The elements of a quantum meruit
claim are: “(1) valuable services must be rendered [by the plaintiff]; (2) for the person sought to be charged; (3) which
services were accepted by the person sought to be charged, and enjoyed by him or her; and (4) under such
circumstances as reasonably notified the person sought to be charged that the plaintiff, in performing such services,
expected to be paid.” Brown v. Brown, 524 A.2d 1184, 1190 (D.C. 1987) (quotation omitted).
20
equitable claims, Sachs, 136 S. Ct. at 396, and “provides the legal basis” for the claims, Merlini v.
Canada, 926 F.3d 21, 30 (1st Cir. 2019).
The next question is whether Abu Dhabi’s failure to pay Friedman has “substantial
contacts” with the United States, as required by the FSIA. 28 U.S.C. § 1603(e). The Court easily
concludes that it does. As alleged, Abu Dhabi’s promise to pay, as well as the services Friedman
provided, all occurred in the United States—specifically, in Washington, D.C. See Compl. ¶¶ 19–
21. All of the meetings held between Friedman and Abu Dhabi likewise took place in Washington,
D.C. Id. These alleged contacts satisfy the FSIA’s requirements. Cf. Lanny J. Davis & Assocs.
LLC v. Republic of Equatorial Guinea, 962 F. Supp. 2d 152, 159 (D.D.C. 2013) (concluding
substantial-contact requirement was met in case involving breach of contract where “the majority
of [plaintiff’s] work was performed here in Washington, D.C.” and foreign sovereign had
participated in many meetings in the United States); Tonoga, Ltd. v. Ministry of Public Works &
Housing of Kingdom of Saudi Arabia, 135 F. Supp. 2d 350, 356–57 (N.D.N.Y. 2001) (“[W]hen
the commercial activity in question centers on the formation of a contract, the United States will
be found to have had a substantial contact with that activity if substantial aspects of the contract
were to be performed here.” (internal quotation marks and ellipses omitted)); see Lempert v.
Republic of Kazakhstan, 223 F. Supp. 2d 200, 203 (D.D.C. 2002), aff’d 62 F. App’x 355 (D.C.
Cir. 2003) (suggesting that substantial-contacts requirement would be met where “there were . . .
meetings between the parties in the United States, . . . significant availment of resources in this
country to persuade [plaintiff] to enter into the contract, and . . . regular recruitment efforts here”).
Abu Dhabi, citing Odhiambo, argues that “mere business meetings” cannot satisfy the
substantial-contact requirement. See Odhiambo, 764 F.3d at 36–37. But Abu Dhabi pulls this
statement out of context. In Odhiambo, the meetings were not sufficiently related to the gravamen
21
of plaintiff’s suit. See id. at 37 (noting that plaintiff’s “meetings with Kenyan officials in the
United States . . . [were] not necessary to make out any element of his breach-of-contract claim”).
Odhiambo was not articulating a per se rule that business meetings can never constitute substantial
contacts with the United States; indeed, the Circuit’s precedent makes clear that the analysis will
always depend on what role the meetings played in the full context of a given plaintiff’s claims.
Compare Zedan, 849 F.2d at 1513 (concluding that a “recruitment phone call, in which no contract
[was] agreed upon,” cannot satisfy substantial-contact requirement); Maritime Int’l Nominees
Establishment v. Republic of Guinea, 693 F.2d 1094, 1109 (D.C. Cir. 1982) (concluding that “two
isolated meetings amounted to [no] more than ‘transitory’ and ‘insubstantial’ contact for purposes
of the [FSIA]”), with Zedan, 849 F.2d at 1513 (suggesting that entering into a contractual
agreement at a meeting, “one part of which is to be performed in the United States,” would
constitute substantial contacts with the United States). Here, Friedman alleges that at the meetings
with Abu Dhabi, he entered into a contract-in-fact to perform services in the United States or
negotiated the terms of an arrangement to perform those services that later unjustly enriched Abu
Dhabi to his detriment. See Compl. ¶¶ 21, 110–11, 115–16. Under the logic of Zedan, these
meetings constitute “substantial contacts with the United States.”
Finally, Abu Dhabi’s promise to pay, and subsequent failure to pay, was “commercial
activity.” As before, the inquiry is whether the actions at issue “are the types of actions by which
a private party engages in trade and traffic or commerce.” Weltover, 504 U.S. at 614 (internal
quotation marks omitted). Friedman argues that the meetings at which Abu Dhabi promised to
pay him for his services were “the kind of negotiations in which private commercial parties
routinely engage.” Opp’n to Abu Dhabi MTD at 27. In response, Abu Dhabi argues that the
meetings were not commercial because they were meetings “undertaken to further a nation’s
22
foreign policy and defense strategies.” Abu Dhabi Reply at 13. However, this argument
impermissibly “describe[es] the act in question as intertwined with its purpose.” Cicippio v.
Islamic Republic of Iran, 30 F.3d 164, 167 (D.C. Cir. 1994). The Court is prohibited by statute
from looking at the motive behind the activity—instead, it must look at the nature of the activity.
See 28 U.S.C. § 1603(d).
Here, Abu Dhabi simply retained Friedman to lobby the U.S. government to advance its
interests in exchange for payment. This is no different in nature from a private entity hiring a
lobbyist to represent its interests, as happens every day in Washington and elsewhere. See Kettey
v. Saudi Ministry of Educ., 53 F. Supp. 3d 40, 50 (D.D.C. 2014) (“Contracts for services are
generally considered commercial activities when entered into in the United States.”); cf. Dentons
US LLP v. Republic of Guinea, 410 F. Supp. 3d 194, 205 (D.D.C. 2019) (“Contracting for the
provision of legal services constitutes commercial activity.” (cleaned up)). There is nothing
distinctively sovereign about the nature of this activity, even if its ultimate purpose was sovereign.
See Dentons, 410 F. Supp. 3d at 205 (“It does not matter why the foreign government retained
counsel or whether the foreign government’s ultimate objective in retaining counsel was to further
a sovereign interest.”); Eckert Intern., Inc. v. Gov’t of Sovereign Dem. Republic of Fiji, 834 F.
Supp. 167, 171 (E.D.V.A. 1993) (rejecting argument that consulting contract was made a sovereign
activity by the fact that the consultant “represented Fiji in its political and diplomatic relationship
with the United States” because the argument “mistakenly focuse[d] on the contract’s purpose,
while ignoring its essentially commercial nature” (internal quotation marks omitted)). 7
7
Abu Dhabi cites Kato v. Ishihara, 360 F.3d 106 (2d Cir. 2004), for the proposition that “actions that [are]
only superficially similar to actions typically undertaken by private parties” are not commercial activity, id. at 111;
see Abu Dhabi Reply at 12–13. But that case is not on point. There, plaintiff worked for the Japanese government in
the United States, where her duties included “product promotion for Japanese companies, general business
development assistance, [and] participation in trade shows” to promote Japanese businesses. Kato, 360 F.3d at 111–
12. When she attempted to sue Japan in an employment action, Japan raised the FSIA as a defense. Id. The Kato
court concluded that plaintiff’s suit was barred because the Japanese government had not engaged in “commercial
23
Friedman has established that Abu Dhabi’s failure to pay for Friedman’s services satisfies
clause one. The Court therefore concludes that the FSIA’s commercial activity exception applies
to his equitable claims, providing the Court with subject-matter jurisdiction over those claims.
II. Statute of Limitations
Having overcome the hurdle of subject-matter jurisdiction with respect to his equitable
claims against Abu Dhabi, Friedman is now confronted with an equally formidable obstacle: the
D.C. statute of limitations for quantum meruit and unjust enrichment claims. 8 Abu Dhabi raises
the statute of limitations as an affirmative defense in its 12(b)(6) motion to dismiss, as is permitted
when “the facts that give rise to the defense are clear from the face of the complaint.” Abu Dhabi
MTD at 20 (quoting Thompson v. HSBC Bank, 850 F. Supp. 2d 269, 273 (D.D.C. 2013)). Courts
should dismiss claims on statute-of-limitations grounds “only if the [claim] on its face is
conclusively time-barred.” Firestone v. Firestone, 76 F.3d 1205, 1209 (D.C. Cir. 1996); see United
States ex rel. Landis v. Tailwind Sports Corp., 51 F. Supp. 3d 9, 38 (D.D.C. 2014) (“[A] district
court can certainly grant a motion to dismiss on statute of limitations grounds, but to do so, the
factual allegations in the complaint must clearly demonstrate all elements of the statute of
limitations defense and that the plaintiff has no viable response to the defense.”).
In D.C., “a quantum meruit or unjust enrichment claim accrues and the statute of limitations
begins to run ‘when the plaintiff’s last service has been rendered and compensation has been
wrongly withheld.’” Glenn v. Fay, 281 F. Supp. 3d 130, 136 (D.D.C. 2017) (quoting News World
Commc’ns v. Thompsen, 878 A.2d 1218, 1219 (D.C. 2005)). Friedman’s complaint does not state
activity” by hiring her as a government employee: instead, “promotion abroad of the commerce of domestic firms is
a basic—even quintessential—governmental function.” Id. Here, on the other hand, Abu Dhabi entered into an
essentially standard lobbying agreement with Friedman, a contractor. This action was not just “superficially similar”
to the types of actions a private party would take—it was identical to those types of actions.
8
“When jurisdiction arises under the FSIA, the local forum’s statute of limitations applies to the action.” Sea
Search Armada v. Republic of Columbia, 821 F. Supp. 2d 268, 272 (D.D.C. 2011) (citing Gilson v. Republic of
Ireland, 682 F.2d 1022, 1025 n.7 (D.C. Cir. 1982)).
24
the exact dates of his service to Abu Dhabi, but it does allege that the promissory notes were
delivered to him after his services had been completed, and at some point before November 3,
1986, the first specific date mentioned in the complaint, when Friedman began taking concrete
steps to collect on the notes. See Compl. ¶¶ 27, 43. The Court will therefore treat November 3,
1986, as the date that Friedman’s last service was rendered. As for the date that compensation was
wrongly withheld, Friedman alleges that he received notice on December 6, 1986, that Abu Dhabi
disclaimed any knowledge of the promissory notes and refused to pay. Id. ¶ 47. To the extent that
Friedman might claim that the refusal was not yet unequivocal on that date, it certainly was by
October 7, 1987, when he received a letter from Abu Dhabi “affirmatively representing” that the
promissory notes were “fakes” and “forgeries” and that it refused to pay them. Id. ¶¶ 50–56. Both
requirements for his claims to accrue were thus satisfied not later than October 7, 1987, and that
is the date on which the Court will treat his claims as having accrued.
Thirty-two years and about seven months have passed since October 7, 1987. The
applicable statute of limitations for Friedman’s quantum meruit and unjust enrichment is three
years. 9 See Boyd v. Kilpatrick Townsend & Stockton, 164 A.3d 72, 75 (D.C. 2017); see also D.C.
Code § 12-301(8) (statute of limitations for actions not otherwise specially prescribed is three
years). Absent any tolling of the statute, Friedman’s claims are self-evidently time-barred.
The Court’s analysis cannot stop there, however, because Friedman argues that the doctrine
of fraudulent concealment applies to toll the statute of limitations here. See Opp’n to Abu Dhabi
MTD at 31. Under that doctrine, “affirmative acts employed by a party to fraudulently conceal
either the existence of a claim or facts forming the basis of a cause of action toll the running of
9
Friedman concedes that D.C.’s 12-year statute of limitations for instruments executed under seal would be
applicable, if at all, only to his breach of contract claim. See Opp’n to Abu Dhabi MTD at 30–31. It is not relevant
to his equitable claims.
25
limitations periods.” Drake v. McNair, 993 A.2d 607, 619 (D.C. 2010). To successfully plead
fraudulent concealment under D.C. law, a plaintiff must show (1) that the defendant undertook
“something of an affirmative nature designed to prevent discovery of a cause of action”; and (2)
that the plaintiff “by reasonable diligence could not discover the concealed facts.” Earle v. District
of Columbia, 707 F.3d 299, 309 (D.C. Cir. 2012). If a plaintiff successfully pleads fraudulent
concealment, “the statute of limitations is tolled until the facts are revealed.” Id.
Friedman’s basic argument is that Abu Dhabi’s consistent statements to him (and those he
enlisted to help him collect on the promissory notes) that the notes were fake and fraudulent
“caused him to believe that the [promissory notes] were invalid and that bringing an action against
Defendants to enforce them would be futile.” Opp’n to Abu Dhabi MTD at 32. In Friedman’s
view, it would be inappropriate to decide whether the fraudulent concealment doctrine applies to
his claims on a motion to dismiss because the issue involves many “contested questions of fact,”
such as whether and when Friedman believed Abu Dhabi’s representations that the notes were
fraudulent, whether and when Friedman learned that Abu Dhabi had been misleading him, what
impact the newly discovered notes had on Friedman, and whether by reasonable diligence he could
have discovered those additional notes earlier. See id. at 35–38. Fair enough. And if Friedman’s
breach of contract claim had not been barred by sovereign immunity, the Court might have
concluded that the fact-intensive nature of the fraudulent concealment question was such that it
should not be decided on a motion to dismiss.
The problem for Friedman is that none of his allegations regarding Abu Dhabi’s alleged
attempt to fraudulently conceal the validity of the notes are at all relevant to his equitable claims.
Neither of those claims depends on the validity of the promissory notes. His breach of contract
claim did: his claim there was that by virtue of being assigned the promissory notes, he had entered
26
into a contract with Abu Dhabi. Compl. ¶¶ 105–06. The alleged contract was therefore based on
his status as a valid assignee of the notes, not on any services he had performed for Abu Dhabi.
For that claim, fraudulent concealment could potentially be applicable, because if the notes were
invalid (as Friedman alleges Abu Dhabi told him they were), Friedman would have no breach of
contract claim.
In contrast, his equitable claims do not rely on the validity of the notes at all. Those claims,
in essence, are that he provided services to Abu Dhabi for which he was never paid. See Compl.
¶¶ 110–12, 115–16. The only relevance of the notes to his equitable claims is that they were
allegedly to be the payment for his services. But the allegations in the complaint demonstrate
conclusively that he learned of Abu Dhabi’s refusal to pay him for his services by, at the latest,
October 7, 1987. Id. ¶¶ 50–56; see Riddell v. Riddell Washington Corp., 866 F.2d 1480, 1494
(D.C. Cir. 1989) (“Clearly, the doctrine of fraudulent concealment does not come into play,
whatever the lengths to which a defendant has gone to conceal the wrongs, if a plaintiff is on notice
of a potential claim.” (internal quotation marks omitted)). Under D.C. law, his equitable claims
accrued at that point, and nothing that he alleges Abu Dhabi stated thereafter with respect to the
validity of the notes could have any effect on those equitable claims.
Aside from the allegations regarding the notes, Friedman has made no argument
whatsoever that Abu Dhabi affirmatively did anything to make him believe that he was not entitled
to payment for his services and thereby prevent discovery of his equitable causes of actions, as
would be required for the fraudulent concealment doctrine to apply to his equitable claims. Indeed,
his complaint repeatedly emphasizes the opposite: that Abu Dhabi and UAE officials told him that
he was entitled to, and would be given, payment for his services. See Compl. ¶¶ 21 (“Abu Dhabi
agreed to provide Mr. Friedman good and valuable consideration in exchange for his services.”),
27
26 (“[C]ertain decisionmakers of the UAE recognized Mr. Friedman’s extraordinary service.”), 27
(“In consideration for his extraordinary services, Abu Dhabi caused to be delivered to Mr.
Friedman [the promissory notes].”). His argument that fraudulent concealment is a “rejoinder to
[Abu Dhabi’s] affirmative defense” of statute of limitations, then, is “foreclosed by the allegations
in the complaint.” de Csepel v. Republic of Hungary, 714 F.3d 591, 608 (D.C. Cir. 2013).
Friedman has “no viable response” to Abu Dhabi’s statute of limitations defense. Landis,
51 F. Supp. 3d at 38. The Court will therefore dismiss his equitable claims as conclusively time-
barred. Cf. Nader v. Democratic National Committee, 567 F.3d 692, 699–702 (D.C. Cir. 2009)
(affirming dismissal on statute of limitations grounds where uncontested allegations clearly
showed not only when cause of action arose, but also that fraudulent concealment could not apply).
Thirty-two years is simply too long to wait to file suit on claims that Friedman has known about
all along, given Abu Dhabi’s consistent refusal to pay over that entire period.
Conclusion
For the foregoing reasons, the Court concludes that (1) it lacks subject-matter jurisdiction
over Friedman’s breach of contract claim against Abu Dhabi, Khalifa, and Janata Bank; (2) it has
subject-matter jurisdiction over Friedman’s equitable claims against Abu Dhabi; and (3) the
equitable claims are time-barred. Accordingly, the Court will set aside the entry of default against
Janata Bank, dismiss the breach of contract claim for lack of subject-matter jurisdiction, and
dismiss Friedman’s equitable claims as time-barred. A separate order has been issued on this date.
/s/
JOHN D. BATES
United States District Judge
Dated: May 14, 2020
28