BERYL A. HOWELL, United States District Judge
The plaintiff in this matter, TJGEM LLC, was not awarded an anticipated $595,000,000 no-bid contract to reconstruct the sewer system in Accra, the capital city of the Republic of Ghana ("Ghana"). See Pl.'s First Am. Compl. ("FAC") ¶ 258. After the contract was awarded to a competing company, the plaintiff brought the instant suit against Ghana, the Accra Metropolitan Assembly (the "AMA"), and two Ghanaian government officials, Kwabena Duffuor and Alfred O. Vanderpuije (collectively, the "Ghana Defendants"); the firm that obtained the contract, Conti Group ("Defendant Conti"); the subcontractor for the sewer project, Kwame Building Group and two of its employees, Anthony T. Thompson and Craig Lucas (collectively, the "KBG Defendants"); and three brothers, Gideon, Mark, and Jonathan Adjetey (collectively, the "Adjetey Defendants"), who were founding members of TJGEM.
Pending before the Court are eight motions related to three groups of defendants: the Defendant Conti's Motion to Dismiss ("Conti MTD"), ECF No. 40 and the plaintiff's Motion to Strike Defendant Conti's Motion to Dismiss, ECF No. 42; the Ghana Defendants' Motion to Dismiss ("Ghana Defs.' MTD"), ECF No. 51, and
The plaintiffs FAC is a 216 page, rambling document containing numerous allegations of corruption and bribery in Ghana accompanied by 479 pages of exhibits, that, at the very least, tests the limits of Federal Rule of Civil Procedure 8(a)(2)'s requirement that a complaint contain "a short and plain statement of the claim showing that the pleader is entitled to relief." See FAC; Pl.'s Errata, Exhibit List with Exhibits to FAC ("Pl.'s Exhibits"), ECF No. 31, generally. In order to address the Ghana Defendants' jurisdictional argument, which dooms the plaintiff's claims, a brief recitation of the pertinent facts from the FAC is necessary.
In 2010, Defendants Vanderpuije and Gideon Adjetey ("Gideon"), who were long-time friends, discussed "potential infrastructure development projects" in Ghana "that might be awarded to a company with whom Gideon might be affiliated or hold an interest." FAC ¶¶ 5; 11.
Over the next fourteen months, from January, 2011 through March, 2012, the plaintiff pursued a contract with the Ghanaian government to reconstruct the Accra sewer system, working closely with Defendant Vanderpuije. See id. ¶¶ 44-258. As part of these negotiations, the plaintiffs members and agents flew to Ghana on multiple occasions. See id. ¶¶ 44; 77; 168. During the negotiations, the plaintiff concedes it learned that "only the central government could contract for and finance the Accra sewer system project" and "under Ghana's constitution and statutes, the
Despite this concession, the plaintiff alleges that it was induced into providing Defendant Vanderpuije with contracts and a business plan that it characterizes as "trade secrets" based on Defendant Vanderpuije's assurances that "TJGEM would be granted a contract as the developer for the construction or reconstruction of the sewer system of Accra." See FAC ¶¶ 98-102. The plaintiff notes that it provided the documents it classifies as "trade secrets" voluntarily to, inter alia, (1) Defendant Vanderpuije, id. ¶ 79; (2) "his staff of engineers, city manager, and city attorney[,]" id. ¶ 80; (3) the subcontractor retained for the project, Defendant KBG, see id. ¶ 89; (4) United States embassy personnel in Ghana, id. ¶ 164; (5) Ghana's Minister of Finance, Defendant Duffuor, id. ¶ 233; and (6) the commercial officer in the Ghanaian Embassy in Washington, D.C., id. ¶ 241. The plaintiff concedes that it did not submit a confidentiality agreement to Defendant Vanderpuije "in reliance on [Defendant] Gideon's representations as to the good faith and fairness of [Defendant Vanderpuije] and the need under Ghanaian custom to show trust in [Defendant Vanderpuije.]" Id. ¶ 86. The plaintiff does not plead that it ever asked anyone associated with the project to sign a confidentiality agreement. See id., generally. A similar failure to obtain a signed confidentiality agreement with Defendant Vanderpuije scuttled an earlier attempt to work with "a New York based company, KPP," during the formation of TJGEM, see id. ¶¶ 30-35, and a loan broker the plaintiff discussed doing business with in Ghana, id. ¶ 110.
In pursuing the project, the plaintiff met with several Ghana government officials and sought financing from the Export-Import Bank of the United States for Ghana to fund the reconstruction. See id. ¶¶ 170-79; 201. The plaintiff alleges it was able to secure a loan from the Export-Import Bank for Ghana in the amount "of $587,937,500 to finance the sewer project upon Ghana entering into a contract with TJGEM as developer of the project and [Defendant] KBG as subcontractor to TJGEM on the project." Id. ¶¶ 206; 223.
The plaintiff alleges that after it refused several requests for a bribe from Defendant Vanderpuije, see id. ¶¶ 114; 120; 129; 140; 191; 245-47, the Ghana Defendants sought and obtained a $10 million bribe from Defendant Conti to award the contract for the sewer project to Defendant Conti, id. ¶ 257. The plaintiff alleges that, based in part on the work the plaintiff had done, the Ghana Defendants awarded the project to Defendant Conti and signed a memorandum of understanding to that effect on March 9, 2012. Id. ¶ 258. Defendant Vanderpuije was a signatory on the contract between Defendant Ghana and Defendant Conti. Pl.'s Opp'n at 14. The plaintiff alleges that this amounted to a failure to follow Ghanaian law in procurement of government contracts and was only possible because of the alleged bribe. See id. ¶¶ 281-90.
On the misappropriation claim, the plaintiff included in its list of exhibits attached to the pleading and filed on the public docket in this case, the documents it alleges to be the "trade secret" documents. See id. ¶ 301 (referencing Exhibits 1 and 9). The Ghana Defendants, Defendant Conti, and the KBG Defendants have moved to dismiss this action on numerous grounds. See Ghana Defs.' MTD; Conti MTD; KBG MTD, generally. The plaintiffs Motion for Sanctions against Defendant Vanderpuije and his attorneys is based upon exhibits attached to the declaration provided by Defendant Vanderpuije in support of the Ghana Defendants' Motion to Dismiss. See Pl.' Sanctions Mot., generally.
"`Federal courts are courts of limited jurisdiction,' possessing `only that power authorized by Constitution and statute.'" Gunn v. Minton, ___ U.S. ___, 133 S.Ct. 1059, 1064, 185 L.Ed.2d 72 (2013) (quoting Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377, 114 S.Ct. 1673, 128 L.Ed.2d 391 (1994)). Indeed, Federal courts are "forbidden ... from acting beyond our authority," NetworkIP, LLC v. FCC, 548 F.3d 116, 120 (D.C.Cir. 2008), and, therefore, have "an affirmative obligation `to consider whether the constitutional and statutory authority exist for us to hear each dispute.'" James Madison Ltd. by Hecht v. Ludwig, 82 F.3d 1085, 1092 (D.C.Cir.1996) (quoting Herbert v. Nat'l Acad. of Scis., 974 F.2d 192, 196 (D.C.Cir.1992)). Absent subject matter jurisdiction over a case, the court must dismiss it. McManus v. District of Columbia, 530 F.Supp.2d 46, 62 (D.D.C.2007).
To survive a motion to dismiss under Federal Rule of Civil Procedure 12(b)(1), the plaintiff must establish the court's jurisdiction over the subject matter by a preponderance of the evidence. See Lujan v. Defenders of Wildlife, 504 U.S. 555, 561, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992); Bolden-Bey v. U.S. Parole Comm'n, 731 F.Supp.2d 11, 13 (D.D.C. 2010) ("On a motion to dismiss for lack of subject matter jurisdiction pursuant to Rule 12(b)(1), the plaintiff bears the burden of establishing by a preponderance of the evidence that the court has subject matter jurisdiction"). When considering a motion under Rule 12(b)(1), the court must accept as true all uncontroverted material
The Ghana Defendants assert two primary arguments for dismissal that are interrelated and, ultimately, dispositive. First, they assert that Ghana and the AMA are foreign sovereigns under the Foreign Sovereign Immunities Act ("FSIA"), 28 U.S.C. §§ 1602 et seq., which deprives United States courts of subject matter jurisdiction over claims against them. See Ghana Defs.' MTD at 1, ECF No. 51. Based on their assertion of sovereign immunity, the Ghana Defendants argue that this action should be dismissed in its entirety, against all defendants, under the doctrine articulated in Philippines v. Pimentel, 553 U.S. 851, 867, 128 S.Ct. 2180, 171 L.Ed.2d 131 (2008) ("Pimentel"). See id. Pimentel holds that "[a] case may not proceed when a required-entity sovereign is not amenable to suit." Pimentel, 553 U.S. at 867, 128 S.Ct. 2180. Thus, the Court must first determine if the FSIA applies to the Ghana Defendants and, if so, whether the foreign sovereigns are required-entities such that this case may not proceed.
The FSIA states that "a foreign state shall be immune from the jurisdiction of the courts of the United States" except in the case of three exceptions delineated in the FSIA. 28 U.S.C. § 1604; Samantar v. Yousuf, 560 U.S. 305, 313-14, 130 S.Ct. 2278, 176 L.Ed.2d 1047 (2010); see Van Beneden v. Al-Sanusi, 709 F.3d 1165, 1166 (D.C.Cir.2013) (noting the FSIA "protects foreign sovereigns from suit in the United States unless Congress specifically provides otherwise."). A "foreign state" for the purposes of the FSIA includes "an agency or instrumentality of a foreign state ... which is an organ of a foreign state or political subdivision thereof." 28 U.S.C. § 1603(a-b). None of the parties to this action dispute that Ghana and the AMA are "foreign states" for the purposes of the FSIA. See, e.g., FAC Part I.B ¶¶ 1-2 ("Defendant Republic of Ghana (Ghana) is a sovereign foreign state[;]" and "Defendant Accra Metropolitan Assembly is a political subdivision of the Republic of Ghana"); Ghana Defs.' Mem. Supp Mot. Dismiss ("Ghana Defs.' Mem.") at 9, ECF No. 51-1 (asserting the Republic of Ghana and the AMA are "foreign states"); Decl. of Prof. Kofi Quashigah, Dean of the Law Faculty, University of Ghana ("Quashigah Decl.") ¶¶ 2; 12, ECF No. 51-7 (stating that the "Republic of Ghana is a sovereign state" and the AMA "is an organ of the Republic of Ghana, established by the Ghanaian Constitution.").
The plaintiff argues that the so-called "commercial activity" exception to the FSIA, 28 U.S.C. § 1605(a)(2), applies to this matter. Pl.'s Opp'n at 14-16. That exception states that "[a] foreign state shall not be immune from the jurisdiction of courts of the United States or of the States in any case ... (2) in which the action is based upon a commercial activity carried on in the United States by the foreign state; or upon an act performed in the United States in connection with a commercial activity of the foreign state elsewhere; or upon an act outside the territory of the United States in connection with a commercial activity of the foreign state elsewhere and that act causes a direct effect in the United States." 28 U.S.C. § 1605(a)(2). As legal support for its contention that this exception applies, the plaintiff merely cites a passage from Republic of Argentina v. Weltover, Inc., 504 U.S. 607, 614, 112 S.Ct. 2160, 119 L.Ed.2d 394 (1992), which held that "when a foreign government acts, not as regulator of a market, but in the manner of a private player within it, the foreign sovereign's actions are `commercial' within the meaning of the FSIA." Pl.'s Opp'n at 15. As factual support for its contention that the commercial activity exception applies, the plaintiff offers thirteen "facts," many of which are legal conclusions that need not be accepted as true, see Hettinga v. United States, 677 F.3d 471, 476 (D.C.Cir. 2012), and none of which support the plaintiffs contention.
At the outset, the plaintiff has not offered any affidavits or evidence, as required under the burden shifting framework of the FSIA, to disprove the presumption. See Bell Helicopter Textron, Inc. v. Islamic Republic of Iran, 734 F.3d 1175, 1183 (D.C.Cir.2013) ("[T]he FSIA begins with a presumption of immunity, [under] which the plaintiff bears the initial burden to overcome by producing evidence that an exception applies, and once shown, the sovereign bears the ultimate burden of persuasion to show the exception does not apply."). Instead, the plaintiff asserts, inter alia, that the construction loan at issue "has to be repaid in Washington, D.C.[;]" certain monies from the loan have been earmarked "to pay the bribe fee" allegedly demanded by the Ghana Defendants; the source of the loan funds is the United States Export-Import Bank, which "is subject
Although "loans, guarantees or insurance provided by the Export-Import Bank of the United States" can be grounds for the application of the commercial activity exception, see Zedan v. Kingdom of Saudi Arabia, 849 F.2d 1511, 1513 (D.C.Cir.1988) (quoting H.R. Rep. No. 1487, 94th Cong., 2d Sess. 17 (1976)), the plaintiff points out that it is not challenging validity of the sewer reconstruction contract or the memorandum of understanding that led to the Export-Import Bank loan. See Pl.'s Opp'n at 17. Rather, the plaintiff is challenging the allegedly tortious conduct that occurred in Ghana, i.e., the alleged extortion and misappropriation. See id. The commercial exception to the FSIA applies only when the "domestic commercial activity constitutes an `element[] of a claim that ... would entitle [the plaintiff] to relief under [its] theory of the case.'" Goodman Holdings v. Rafidain Bank, 26 F.3d 1143, 1146 (D.C.Cir. 1994) (quoting Saudi Arabia, 507 U.S. at 356, 113 S.Ct. 1471). None of the "facts" relied upon by the plaintiff form the elements of the claims for relief the plaintiff is asserting, since, as the plaintiff concedes, the grant of the Export-Import Bank loan is completely unrelated to the letting of the contract itself and the alleged extortion surrounding the awarding of the contract. Thus, the "alleged commercial activities have absolutely no connection with the events underlying [the plaintiffs] claims against" Ghana and the AMA. See Peterson v. Islamic Republic of Iran, 563 F.Supp.2d 268, 273 (D.D.C. 2008).
The FAC alleges that, in Ghana, Defendant Vanderpuije sought bribes from the plaintiff in return for a no-bid contract to rebuild Accra's sewer system and, when the plaintiff refused to pay the bribes, this defendant misappropriated the plaintiffs allegedly proprietary trade secrets and awarded the contract to Defendant Conti, allegedly because Defendant Conti was willing to pay the requested bribe. See FAC, generally. The plaintiff asserts its legal claims against all of the Ghana Defendants based upon the alleged actions of the single Ghanaian official, Defendant Vanderpuije, but this assertion fails. As the Ghana Defendants point out, in order to fall within the commercial activity exception, the commercial activity must be "by the foreign state." See 28 U.S.C. § 1605(a)(2). Under Ghanaian law, Defendant Vanderpuije lacked the authority to award a no-bid contract since all government contracts require approvals under "the 1992 Ghanaian Constitution, the Procurement Act, the Local Government Act, and the Environmental Protection Agency Act." Quashigah Decl. ¶ 17.
The plaintiff fails to address the holding in Phaneuf v. Republic of Indonesia, 106 F.3d 302, 308 (9th Cir.1997) — which is relied upon by the Ghana Defendants, see Ghana Defs.' Mem. at 10-11 — that when "the foreign state has not empowered its agent to act, the agent's unauthorized act cannot be attributed to the foreign state; there is no `activity of the foreign state.'" The Phaneuf court specifically rejected the argument that apparent, or de facto, authority was enough to trigger the commercial activity exception, finding that "Congress intended for the exception to apply only in cases of actual authority." Id. Since the actions of Defendant Vanderpuije are the crux of all of the plaintiffs claims, and the plaintiff admits that Defendant Vanderpuije did not have actual authority to award the contract at issue, those claims, even if assumed to be true, cannot be attributed to Ghana or the AMA. Thus, the plaintiff has failed, at the outset, to meet its burden of showing the commercial activity exception applies since it admits that the actions undertaken by Defendant Vanderpuije were not of or by a foreign state.
Moreover, even assuming to be true the allegations that the awarding of the contract to Defendant Conti was due to corruption and payment of a bribe, the plaintiff has failed to show the requisite "direct effect" in the United States sufficient to bring the Ghana defendants' actions within the commercial activity exception. As the D.C. Circuit has noted, "[i]f a loss to an American individual and firm resulting from a foreign tort were sufficient standing alone to satisfy the direct effect requirement, the commercial activity exception would in large party eviscerate the FSIA's provision of immunity for foreign states." Bell Helicopter Textron, Inc., 734 F.3d at 1184 (quoting Antares Aircraft, L.P. v. Federal Republic of Nigeria, 999 F.2d 33,
In short, the plaintiff has failed to meet its burden of showing that a FSIA exception applies and, consequently, has failed to overcome the presumption of sovereign immunity that cloaks Ghana and the AMA.
The Ghana Defendants assert that, under Pimentel, this matter must be dismissed in its entirety, a view shared by the Defendant Conti. See Ghana Defs.' Mem. at 18; Conti MTD at 1, n.2, ECF No. 40. The plaintiff does not respond to this argument in its opposition to the Ghana Defendants' motion. See Pl.'s Opp'n, generally; Ghana Defs.' Reply to Pl.'s Opp'n to Defs.' MTD ("Ghana Defs.' Reply") at 9-10, ECF No. 67. Thus, the Court "may treat the plaintiffs failure to oppose the defendant[s'] ... arguments as a decision to concede those arguments." Nat'l Sec. Counselors v. CIA, 898 F.Supp.2d 233, 268 (D.D.C.2012) (citing Buggs v. Powell, 293 F.Supp.2d 135, 141 (D.D.C.2003) (citing FDIC v. Bender, 127 F.3d 58, 67-68 (D.C.Cir.1997))). Even if the plaintiff had not conceded this point, however, the Ghana Defendants are correct in arguing that Pimentel bars further consideration of this matter.
In Pimentel, the Supreme Court held that, when parties to a suit possess sovereign immunity and are required parties under Federal Rule of Civil Procedure 19, "dismissal of the action must be ordered where there is a potential for injury to the interests of the absent sovereign." Pimentel, 553 U.S. at 867, 128 S.Ct. 2180. In the instant matter, the plaintiffs claims are, at base, those of a disappointed bidder that failed to win a contract with a foreign government. See Pl.'s Opp'n at 17 ("What is being requested is for a jury to decide whether ... the Conti-Ghana contract was procured by [Defendant] Conti promising to pay [Defendant] Vanderpuije a bribe, as a predicate act under Plaintiffs RICO conspiracy and enterprise claim."). Thus, the plaintiff is asking for an examination of the reasons for, and propriety of, a foreign sovereign's decision to award a contract for a construction project in a foreign state.
Since the sovereign defendants have a significant "interest relating to the subject of the action" and "disposing of the action in the [sovereign defendants'] absence may... impede the [sovereign defendants'] ability to protect the[ir] interest," the sovereign defendants are required parties under Federal Rule of Civil Procedure 19(a)(1)(B). Pimentel holds unambiguously that in such a situation, where a sovereign is a required party for the purposes of Rule 19, the case must be dismissed. See Pimentel, 553 U.S. at 867, 128 S.Ct. 2180.
Consequently, since principles of comity, as articulated in Pimentel, militate strongly against resolution of this matter in this Court due to the significant risk of implicating, and possibly injuring, the sovereign entities' interests, the Court finds that, even if this argument were not conceded by the plaintiff, dismissal of this action in its entirety would be required.
The FSIA and Pimentel resolve or render moot all motions pending in this suit, save for the plaintiffs motion for sanctions against Defendant Vanderpuije and his lawyers. See Pl.'s Sanctions Mot., generally. In its motion for sanctions, the plaintiff alleges that two emails attached to Defendant Vanderpuije's declaration were "fraudulent and forged." Id. at 1. The two emails were "purported to be authentic emails" from Adjetey Defendants Gideon and Mark "asserting that [Defendant] Vanderpuije had not solicited a bribe." Pl.'s Mem. Supp. Sanctions Mot. ("Pl.'s Sanctions Mem.") at 5, ECF No. 89-1. The Ghana Defendants included lengthy excerpts from the emails in the background section of their Memorandum in Support of their Motion to Dismiss, relying on them to support the argument that Defendant Vanderpuije did not, in fact, accept any bribes in connection with the sewer contract. See Ghana Defs.' Mem. at 7-8.
The plaintiff moved to strike the emails and, "[a]fter Plaintiff presented ... evidence that said emails were forged, Defendants' counsel failed to withdraw, sua sponte, Vanderpuije's Declaration and Exhibits, so on November 1, 2013, Plaintiff, pursuant to Fed.R.Civ.P. 11(c), served a Motion for Sanctions on Defendant Vanderpuije's counsels [sic]." Pl.'s Sanctions Mem. at 6. The plaintiff's evidence of forgery consisted of a conversation that the plaintiff's members had, including the Adjetey Defendants, in St. Louis, Missouri, on October 30, 2013. See Decl. of Elbert A. Walton, Jr., Vice-President/General Counsel, TJGEM LLC ("Walton Decl.") ¶¶ 19-25, ECF No. 105-1. During this conversation, the Adjetey Defendants allegedly admitted that Defendant Vanderpuije "requested that Vanderpuije be paid compensation for Vanderpuije awarding [the plaintiff] the Accra sewer system reconstruction project contract and that [Defendant] Gideon had documentary evidence thereof." Walton Decl. ¶¶ 19-20; Decl. of Anthony L. Weaver, President, TJGEM LLC ("Weaver Decl.") ¶ 23, ECF No. 105-2.
Consequently, the Ghana Defendants' actions fall within the safe harbor provision in Rule 11(c)(2). The plaintiff's Rule 11 motion was filed before the safe harbor period expired and after the documents had been withdrawn. See Pl.'s Sanctions Mot. (filed on November 20, 2013, i.e., twenty days after serving of motion on Ghana Defendants). Thus, the plaintiffs sanctions' motion is invalid.
In its memorandum supporting its motion for sanctions, the plaintiff confidently announces that it "is but a matter of time as the Plaintiff engages in Discovery in its march to a judgment for Plaintiff for $317,426,250.00, including punitive damages!" Pl.'s Sanctions Mem. at 3. For the aforementioned reasons, that march ends today. The Ghana Defendants' Motion to Dismiss, ECF No. 51, is granted and this matter is dismissed as to all defendants. Consequently, all remaining motions are denied as moot, except for the plaintiff's
An appropriate Order accompanies this Memorandum Opinion.