MARGARET M. MORROW, District Judge.
On October 5, 2012, EduMoz, LLC filed this action against the Republic of Mozambique and the Ministry of Education of the Republic of Mozambique ("the government defendants"), Celio Mondlane, Joaquim Chissano Foundation, and Joaquim Chissano ("the Foundation defendants"), and Zeferino Martins.
On May 2, 2013, the Foundation defendants and the government defendants collectively filed a motion to dismiss the complaint pursuant to Rules 12(b)(1), 12(b)(2), 12(b)(6), and 12(b)(7).
EduMoz, LLC ("EduMoz") is a Delaware limited liability company.
The Republic of Mozambique ("Mozambique") is a foreign state. Chissano Foundation ("Foundation") is a Mozambican quasi-governmental organization purportedly dedicated to educating Mozambican children.
EduMoz alleges that Mondlane and Martins were agents of Mozambique and the Ministry.
Beginning on or about December 19, 2010, Silberberg and Mondlane communicated concerning the launch of an educational initiative in Mozambique.
In March 2011, the parties began to negotiate a contract for services related to the initiative; Silberberg sent Mondlane a written proposal.
On May 25, 2011, Mondlane advised Silberberg by telephone that Martins, the Mozambican Minister of Education, had signed the contract.
On May 26, 2011, Mondlane sent Silberberg an electronic copy of the contract executed by Martins. The parties to the agreement were Martins in his governmental capacity as Minister of Education of the Republic of Mozambique, as Mandator, and Silberberg Innovations, LLC, as Mandatory.
On June 15, 2011, Silberberg received an originally executed copy of the contract.
Under the contract, Martins, the Ministry, and Mozambique promised to pay Silberberg Innovations for work on the "Educate Mozambique" initiative as follows:
Relying on the electronic copy of the contract signed by Martins, Silberberg Innovations began working on the "Educate Mozambique" campaign in May 2011.
On June 13, 2011, Mondlane emailed Silberberg to advise that President Chissano could not travel to Washington D.C. due to a crisis he was negotiating in Ethiopia.
Between May and December 2011, Silberberg Innovations promoted Mozambique, the Ministry, and the Foundation; due to its efforts, CBS News, Crowdsourcing.org, FederalNewsRadio.com, and AfricaAfrica.org purportedly published flattering pieces regarding these entities and the "Educate Mozambique" initiative.
EduMoz alleges claims for fraud; constructive fraud; an accounting; breach of contract; negligence; unjust enrichment; and violation of California's Unfair Competition Law, California Business & Professions Code § 17200 et seq.
EduMoz requests that the court take judicial notice of nine facts and one document related to its claims.
In ruling on a motion to dismiss, the court can consider material that can be judicially noticed under Rule 201 of the Federal Rules of Evidence. FED. R.EVID. 201. Under Rule 201, the court can judicially notice "[o]fficial acts of the legislative, executive, and judicial departments of the United States," and "[f]acts and propositions that are not reasonably subject to dispute and are capable of immediate and accurate determination by resort to sources of reasonably indisputable accuracy."
EduMoz requests that the court take judicial notice of the following facts:
In support of its request for judicial notice of the first four facts, EduMoz proffers excerpts from four Central Intelligence Agency ("CIA") World Factbook entries concerning Mozambique dated January 28, 2011; March 7, 2011; November 2, 2011; and October 17, 2012. Public facts concerning the governments of sovereign nations that "are capable of immediate and accurate determination" are appropriate subjects of judicial notice. See Collins v. Loisel, 259 U.S. 309, 314, 42 S.Ct. 469, 66 L.Ed. 956 (1922) (taking judicial notice of the fact that the consul general of the United States was the principal diplomatic officer in Calcutta); Greeson v. Imperial Irr. Dist., 59 F.2d 529, 531 (9th Cir.1932) ("[T]he court is bound to take notice of public facts and geographical positions, and also of populations of cities and counties, public documents, reports of Commissions made to Congress, and proceedings thereon, etc."); see also Roe v. Unocal Corp., 70 F.Supp.2d 1073, 1078 (C.D.Cal.1999) (taking judicial notice of the fact that the United States conducts diplomatic relations with SLORC/SPDC as the current government of Burma and as such, recognizing that SLORC/SPDC is a foreign sovereign for purposes of the act of state doctrine, citing Department of State's 1999 Burma Country Commercial Guide).
Other courts have taken judicial notice of facts set forth in the CIA's World Factbook. See Sadiki v. Gonzales, 218 Fed. Appx. 27, 30 n. 1 (2d Cir.2007) (Unpub.Disp.) (relying on the CIA Factbook to take judicial notice of the fact that Serbia and Montenegro are independent nations, and that Kosovo is an autonomous province within Serbia); Philipps v. Talty, 555 F.Supp.2d 265, 267 n. 2 (D.N.H.2008) ("[T]he court sua sponte takes judicial notice that St. Martin/St. Maarten is an island in the Caribbean, southeast of Puerto Rico. The island is politically divided (roughly in half) between France (St. Martin) and the Netherlands Antilles ([St.] Maarten). The northern half of the island is part of the Overseas Department of Guadalupe, France, and it employs the French legal system," citing Central Intelligence Agency, THE WORLD FACTBOOK (2008), https://www.cia.gov/library/publications/the-world-factbook/geos/rn.html); Sulieman v. Roswell Park Cancer Inst., No. 05-CV-0766A(F), 2007 WL 1851640, *5 (W.D.N.Y. June 27, 2007) (citing the CIA Factbook in taking judicial notice of the fact that 97% of the population of Iraq is Muslim); Presbyterian Church of Sudan v. Talisman Energy, Inc., 244 F.Supp.2d 289, 296 n. 4 (S.D.N.Y. 2003) (taking judicial notice of facts concerning Sudan's geography and population, and citing the CIA Factbook). Defendants do not object to EduMoz's first four judicial notice requests.
EduMoz's fifth through seventh requests for judicial notice concern whether or not certain items appear on the court docket for this action. The court can take judicial notice of its own docket. See Jacobsen v. Mims, No. 1:13-cv-00256-SKO-HC, 2013 WL 1284242, *2 (E.D.Cal. Mar. 28, 2013) ("The Court may take judicial notice of court records," citing Fed.R.Evid. 201(b); United States v. Bernal-Obeso, 989 F.2d 331, 333 (9th Cir.1993)). The court takes judicial notice of the fact that defendants filed the declaration of Manuel Chang with their reply in support of the motion to dismiss on June 24, 2013, eight days after EduMoz filed its opposition to the motion.
Defendants object to EduMoz's request for judicial notice of the contents of the USAID report as "vague and overbroad" because EduMoz does not specify which "facts" in the report it seeks to have the court judicially notice. They also assert that the USAID report is irrelevant. Defendants do not, however, dispute the accuracy of facts concerning corruption in Mozambique contained in the USAID report.
Courts have held that "[j]udicial notice is appropriate for records and `reports of administrative bodies.'" United States v. 14.02 Acres of Land More or Less in Fresno County, 547 F.3d 943, 955 (9th Cir.2008) (quoting Interstate Natural Gas Co. v. Southern California Gas Co., 209 F.2d 380, 385 (9th Cir.1954)). USAID is a federal government agency. Other courts have taken judicial notice of similar reports published by federal agencies. See, e.g. American-Arab Anti-Discrimination Comm. v. Reno, 70 F.3d 1045, 1070 (9th Cir.1995) (taking judicial notice of State Department publications for the purpose of assessing the strength of government's interest in prohibiting individuals from remaining in the United States); United States v. Quintanilla, No. CR 09-01188 SBA, 2011 WL 4502668, *9 n. 5 (N.D.Cal. Sept. 28, 2011) (taking judicial notice of the "[a]buse of children, child labor, forced child prostitution, and trafficking in ... children" documented in the State Department's 2004 Country Report on Human Rights Practices in El Salvador). The court therefore takes judicial notice of the contents of the USAID report concerning corruption in Mozambique. The court will assess the relevancy of those portions of the report cited by EduMoz in addressing the merits of the motion to dismiss.
In support of its opposition to the motion to dismiss, EduMoz proffers the expert
"Experts may interpret and analyze factual evidence but may not testify about the law." S.E.C. v. Capital Consultants, LLC, 397 F.3d 733, 749 (9th Cir. 2005) (citing Crow Tribe of Indians v. Racicot, 87 F.3d 1039, 1045 (9th Cir.1996)). The entirety of Smith's expert declaration consists of testimony about the Foreign Sovereign Immunities Act ("FSIA"). Smith draws legal conclusions regarding the application of that law to the facts of this case. Specifically, Smith describes activities in which the parties purportedly engaged, asserts that those activities were conducted in the United States, and concludes that they fall under the "commercial activity" exception to the FSIA, 28 U.S.C. §§ 1602, et seq.
Interpreting the FSIA and applying it to the facts are functions that the court is competent to perform without the aid of an expert. The court will therefore disregard Smith's declaration in deciding this motion. See United States v. Scholl, 166 F.3d 964, 973 (9th Cir.1999) ("[I]t is well settled that the judge instructs the jury in the law. Experts interpret and analyze factual evidence. They do not testify about the law because the judge's special legal knowledge is presumed to be sufficient, and it is the judge's duty to inform the jury about the law that is relevant to their deliberations," citing U.S. v. Brodie, 858 F.2d 492, 496-97 (9th Cir.1988) (internal quotations omitted)).
EduMoz seeks to exclude portions of Teresa Muenda's declaration pursuant to Rule 703 of the Federal Rules of Evidence.
Rule 44.1 gives the court considerable discretion in deciding whether or not to consider a party's submission regarding relevant foreign law. See Thomson Consumer Elecs., Inc. v. Innovatron, S.A., 3 F.Supp.2d 49, 52 (D.D.C.1998) ("When answering a question of foreign law, a federal court is authorized to look to a host of sources, including evidence in the form of expert testimony"); Pfizer, Inc. v. Elan Pharm. Research Corp., 812 F.Supp. 1352, 1360 (D.Del.1993) (concluding that the court had discretion to disregard a foreign attorney's affidavit on foreign law under Rule 44.1); Chantier Naval Voisin v. M/Y Daybreak, 677 F.Supp. 1563, 1567 (S.D.Fla.1988) ("Under Fed. R.Civ.P. 44.1, it is clear that while the court may accept evidence submitted by the parties as to the proof of foreign law, it is not bound by the evidence submitted and may make its own investigation and consider `any relevant material or source,' id., concerning the foreign law"); see also DP Aviation v. Smiths Industries Aerospace and Defense Systems Ltd., 268 F.3d 829, 848 (9th Cir. 2001) ("In some cases foreign law may be proved by reference to authorities; in others foreign law experts may testify").
While expert testimony may be useful, it is not "an invariable necessity in establishing foreign law, and indeed, federal judges may reject even the uncontradicted conclusions of an expert witness and reach their own decisions on the basis of independent examination of foreign legal authorities." Access Telecom, Inc. v. MCI Telecomms. Corp., 197 F.3d 694, 713 (5th Cir.), cert. denied, 531 U.S. 917, 121 S.Ct. 275, 148 L.Ed.2d 200 (2000); see also Batruk v. Mitsubishi Motors Corp., Nos. 94 Civ. 7593, 8677, 1998 WL 307383, *3 (S.D.N.Y. June 19, 1998) (Wood, J.); In re Arbitration Between: Trans Chem. Ltd. and China Nat'l Mach. Import and Export Corp., 978 F.Supp. 266, 275 (S.D.Tex. 1997), aff'd, 161 F.3d 314 (5th Cir.1998); Curtis v. Beatrice Foods Co., 481 F.Supp. 1275, 1285 (S.D.N.Y.) (Pollack, J.), aff'd, 633 F.2d 203 (2d Cir.1980).
EduMoz objects to the statement in paragraph seven of Muenda's declaration. There, she states: "In the case subjudice, the evidence suggests that there was no provision for the expenditures arising out of the referenced `contract' in the budget for the corresponding year. Nevertheless, even if there were, the contract requiring their incurrence would require the prior authorization by the Ministry of Finance."
EduMoz's reliance on Rule 703 is misguided. Defendants appear to offer Muenda as an expert in foreign law, since the majority of her declaration concerns Mozambican law. As noted, under Rule 44.1, courts, "in determining foreign law, may consider any relevant material or source, including testimony, whether or not submitted by a party or admissible under the Federal Rules of Evidence." FED.R.CIV. PROC. 44.1. "One common source that judges rely upon in determining foreign law are the affidavits of lawyers who practice law in the country at issue, or who are from the country at issue and are familiar with its laws." Transportes Aereos Pegaso, S.A. de C.V. v. Bell Helicopter Textron, Inc., 623 F.Supp.2d 518, 534 (D.Del.2009); Akande v. Transamerica Airlines, Inc., No. 1039-VCP, 2007 WL 1555734, *7 (Del. Ch. May 25, 2007).
Muenda's personal knowledge of Mozambican law is established by her declaration, which states that her opinions are based on eleven years as a practicing attorney in Mozambique. Muenda's testimony that a government contract requires prior authorization by the Minister of Finance, whether or not the contract was included in the budget for the corresponding year, is a statement of Mozambican law. The court can consider this evidence regarding Mozambican law under Rule 44.1.
By contrast, Muenda's statement that the evidence suggests there was no provision for expenditures associated with the contract in Mozambique's budget for 2011 does not assist the court in determining the content of applicable foreign law. The court will therefore disregard this statement as an improper subject of expert testimony on foreign law. See Krish v. Balasubramaniam, No. 1:06-CV-01030 OWW, 2006 WL 2884794, *3 (E.D.Cal. Oct. 10, 2006) ("[E]vidence from foreign law experts submitted pursuant to Rule 44.1 is admissible only to aid a court's understanding of foreign law; foreign law experts may not opine as to the ultimate application of the foreign law to the facts of the case").
EduMoz also objects to the statement in paragraph eight of Muenda's declaration that "contracts for the supply of goods and services to the State, according to the law of procurement (Decree 15/2010), are subject to prior approval of the Administrative Court, a formality which, not having been observed, renders the contract equally null and void."
EduMoz next objects to the statement in paragraph twelve of Muenda's declaration that "we understand that the courts of Mozambique are competent."
The challenged statement is only relevant, however, to defendants' argument that this case should be dismissed under the doctrine of forum non conveniens. For reasons stated below, the court lacks jurisdiction to consider EduMoz's claims and does not reach the parties' arguments concerning forum non conveniens as a result. Consequently, the court need not consider this portion of Muenda's declaration.
EduMoz objects to the statement in paragraph 15 of Muenda's declaration that "[o]n the other hand, Mozambique puts foreigners on the same footing as nationals as to the enjoyment of civil rights and assures to anyone access to the courts, guaranteeing the right to a defense, legal assistance, legal support, and free choice of defense counsel to assist throughout the legal proceedings."
As noted, under Rule 44.1, courts, "in determining foreign law, may consider any relevant material or source, including testimony, whether or not submitted by a party or admissible under the Federal Rules of Evidence." FED.R.CIV.PROC. 44.1. "One
The challenged statement is only relevant, however, to defendants' argument that this case should be dismissed under the doctrine of forum non conveniens. Because, as noted, the court concludes that it lacks jurisdiction to consider EduMoz's claims, it need not reach the issue of forum non conveniens, and thus need not consider this portion of Muenda's declaration.
EduMoz also objects to the statement in paragraph 16 of Muenda's declaration that "[t]his, therefore, assures the independence, exemption and impartiality of the judiciary in Mozambique."
The court has an independent obligation to examine its own jurisdiction. FW/PBS, Inc. v. City of Dallas, 493 U.S. 215, 230-31, 110 S.Ct. 596, 107 L.Ed.2d 603 (1990); United States v. United Mine Workers of America, 330 U.S. 258, 292 n. 57, 67 S.Ct. 677, 91 L.Ed. 884 (1947) ("a court has jurisdiction to determine its own jurisdiction"); Wells Fargo & Co. v. Wells Fargo Exp. Co., 556 F.2d 406, 430 n. 24 (9th Cir.1977) ("[A] trial court does have jurisdiction to determine its own jurisdiction"). Accordingly, the court will consider the jurisdictional issues raised by defendants' motion to dismiss before addressing the merits of EduMoz's claims.
When a defendant moves to dismiss for lack of personal jurisdiction, the plaintiff
To satisfy this burden, a plaintiff can rely on the allegations in its complaint to the extent not controverted by the moving party. See, e.g., Doe v. Unocal Corp., 248 F.3d 915, 922 (9th Cir.2001) ("Where not directly controverted, plaintiff's version of the facts is taken as true for the purposes of a 12(b)(2) motion to dismiss"). If the defendant adduces evidence controverting the allegations, however, plaintiff must "`come forward with facts, by affidavit or otherwise, supporting personal jurisdiction.'" Scott v. Breeland, 792 F.2d 925, 927 (9th Cir.1986) (quoting Amba Mktg. Sys., Inc. v. Jobar Int'l, Inc., 551 F.2d 784, 787 (9th Cir.1977)). "Conflicts between [the] parties over statements contained in affidavits must be resolved in the plaintiff's favor." Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 800 (9th Cir. 2004); see also AT & T v. Compagnie Bruxelles Lambert, 94 F.3d 586, 588 (9th Cir.1996) ("In determining whether [the plaintiff] has met this burden, uncontroverted allegations in [the] complaint must be taken as true, and `conflicts between the facts contained in the parties' affidavits must be resolved in [plaintiff's] favor for purposes of deciding whether a prima facie case for personal jurisdiction exists,'" quoting WNS Inc. v. Farrow, 884 F.2d 200, 203 (5th Cir.1989)).
"Personal jurisdiction over a foreign state depends on subject matter jurisdiction over the action against the foreign state under the FSIA." A.R. Int'l Anti-Fraud Sys., Inc. v. Pretoria Nat'l Cent. Bureau of Interpol, 634 F.Supp.2d 1108, 1116-17 (E.D.Cal.2009); see also Corzo v. Banco Central de Reserva del Peru, 243 F.3d 519, 522 (9th Cir.2001) ("The [FSIA] conflates the usually distinct questions of sovereign immunity, subject matter jurisdiction, and personal jurisdiction"). Under the FSIA, personal jurisdiction over a foreign state exists only when the court has subject matter jurisdiction to hear the action and proper service has been made. Altmann v. Republic of Austria, 317 F.3d 954, 969 (9th Cir.2002) (citing 28 U.S.C. § 1330(b)); see also Argentine Republic v. Amerada Hess Shipping Corp., 488 U.S. 428, 434, 109 S.Ct. 683, 102 L.Ed.2d 818 (1989) ("[P]ersonal jurisdiction, like subject-matter jurisdiction, exists only when one of the exceptions to foreign sovereign immunity in [the FSIA] applies"). For reasons discussed infra, the court lacks subject matter jurisdiction to hear EduMoz's claims against the government defendants. Consequently, it lacks personal jurisdiction over them as well. A.R. Int'l, 634 F.Supp.2d at 1117 ("For the reasons described above, Interpol Pretoria is immune from suit in this court, and A.R. International fails to establish a statutory exception to FSIA. Accordingly, personal jurisdiction is lacking.... Because this Court finds subject matter and personal jurisdiction lacking, the Court need not consider whether personal jurisdiction is proper under the due process clause of the
Defendants argue that EduMoz's claims against Chissano should also be dismissed for lack of personal jurisdiction. "The general rule is that personal jurisdiction over a defendant is proper if it is permitted by a long-arm statute and if the exercise of that jurisdiction does not violate federal due process." Pebble Beach, 453 F.3d at 1154-55 (citing Fireman's Fund Ins. Co. v. Nat'l Bank of Cooperatives, 103 F.3d 888, 893 (9th Cir.1996)); see also Metro-Goldwyn-Mayer Studios Inc. v. Grokster, Ltd., 243 F.Supp.2d 1073, 1082 (C.D.Cal.2003) (citing Aanestad v. Beech Aircraft Corp., 521 F.2d 1298, 1300 (9th Cir.1974)). Because California authorizes jurisdiction to the full extent permitted by the Constitution, see CAL.CODE CIV. PROC. § 410.10, the only question the court must ask is whether the exercise of jurisdiction over Chissano would be consistent with due process. Harris Rutsky & Co. Ins. Servs., Inc. v. Bell & Clements Ltd., 328 F.3d 1122, 1129 (9th Cir.2003); Peterson v. Highland Music, Inc., 140 F.3d 1313, 1317 n. 2 (9th Cir.1998).
To satisfy due process, a defendant must have such "minimum contacts" with the forum state that "maintenance of the suit does not offend traditional notions of fair play and substantial justice." International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945). There are two recognized bases for exercising personal jurisdiction over a nonresident defendant: (1) "general jurisdiction," which arises where defendant's activities in the forum are sufficiently "substantial" or "continuous and systematic" to justify the exercise of jurisdiction over him in all matters; and (2) "specific jurisdiction," which arises when a defendant's specific contacts with the forum give rise to the claim in question. Helicopteros Nacionales de Colombia S.A. v. Hall, 466 U.S. 408, 414-16, 104 S.Ct. 1868, 80 L.Ed.2d 404 (1984); Doe v. Am. Nat'l Red Cross, 112 F.3d 1048, 1050-51 (9th Cir.1997).
A court can exercise general jurisdiction over a defendant if the defendant's contacts with the forum are "substantial" or "continuous and systematic." International Shoe Co., 326 U.S. at 316, 66 S.Ct. 154; see also Data Disc, Inc. v. Systems Technology Assocs., Inc., 557 F.2d 1280, 1287 (9th Cir.1977); Schwarzenegger, 374 F.3d at 801 (plaintiff must show that defendant engaged in "`continuous and systematic general business contacts' that `approximate physical presence' in the forum state," quoting Helicopteros, 466 U.S. at 416, 104 S.Ct. 1868; Bancroft & Masters, Inc. v. Augusta Nat'l Inc., 223 F.3d 1082, 1086 (9th Cir.2000)). When properly invoked, general jurisdiction allows a federal court to hear any cause of action, even one unrelated to defendant's activities in the state. See Perkins v. Benguet Consol. Mining Co., 342 U.S. 437, 445, 72 S.Ct. 413, 96 L.Ed. 485 (1952).
To determine if a defendant's activities within the forum are "continuous and systematic" or "substantial," the court must examine all of his activities impacting the state. See Helicopteros, 466 U.S. at 411, 104 S.Ct. 1868; World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 295, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980); Perkins, 342 U.S. at 445-49, 72 S.Ct. 413. "Factors to be taken into consideration are whether the defendant makes sales, solicits or engages in business in the state, serves the state's markets, designates an agent for service of process, holds a license, or is incorporated there." Bancroft
Defendants contend the complaint pleads no facts establishing that Chissano has contacts with this forum. EduMoz does not argue that Chissano has had "continuous and systematic" or "substantial" contacts with California sufficient to establish that the court can exercise general jurisdiction over him; it focuses instead on Chissano's alleged contacts with California through Celio Mondlane.
Before the court can exercise specific jurisdiction over a defendant, the plaintiff must show three things: (1) that the defendant did some act or consummated some transaction in California by which he purposefully availed himself of the privilege of conducting activities in the state or that he undertook an act that was purposely directed at the state; (2) that plaintiff's claims arise out of such activities; and (3) that the exercise of jurisdiction is reasonable. See Unocal Corp., 248 F.3d at 923; Fireman's Fund Ins. Co., 103 F.3d at 894.
"Purposeful availment analysis examines whether the defendant's contacts with the forum are attributable to his own actions or are solely the actions of the plaintiff." Sinatra v. Nat'l Enquirer, 854 F.2d 1191, 1195 (9th Cir.1988). To demonstrate purposeful availment, a plaintiff must show that the defendant "engage[d] in some form of affirmative conduct allowing or promoting the transaction of business within the forum state." Gray & Co. v. Firstenberg Machinery Co., 913 F.2d 758, 760 (9th Cir.1990) (citing Shute v. Carnival Cruise Lines, 897 F.2d 377, 381 (9th Cir.1990), overruled on other grounds, 499 U.S. 585, 111 S.Ct. 1522, 113 L.Ed.2d 622 (1991)); see also Burger King v. Rudzewicz, 471 U.S. 462, 475, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985) ("This `purposeful availment' requirement ensures that a defendant will not be haled into a jurisdiction solely as a result of `random,' `fortuitous,' or `attenuated' contacts, ... or of the `unilateral activity of another party or a third person' ..."). A defendant's contacts must be such that he should "reasonably anticipate being haled into court there." World-Wide Volkswagen Corp., 444 U.S. at 297, 100 S.Ct. 559.
Courts distinguish between contract and tort cases in assessing whether the first prong of the specific jurisdiction test is met. See Roth v. Garcia-Marquez, 942 F.2d 617, 621 (9th Cir.1991); see Scholl v. F.D.I.C., No. 08-3977 S.C. 2009 WL 1625947, *6 (N.D.Cal. June 5, 2009) ("A purposeful availment analysis is most often used in suits sounding in contract. A purposeful direction analysis is most often used in suits sounding in tort"). Here, EduMoz asserts claims against Chissano for fraud and negligence; these claims sound in tort.
To apply this test, therefore, the court must assess whether Chissano committed intentional actions, expressly aimed at California, causing harm he knew was likely to be suffered in California. Haisten v. Grass Valley Medical Reimbursement Fund, 784 F.2d 1392, 1397 (9th Cir.1986) ("[W]ithin the rubric of `purposeful availment' the Court has allowed the exercise of jurisdiction over a defendant whose only `contact' with the forum state is the `purposeful direction' of a foreign act having effect in the forum state," citing Calder v. Jones, 465 U.S. 783, 789, 104 S.Ct. 1482, 79 L.Ed.2d 804 (1984)).
Defendants contend the complaint alleges no facts indicating that Chissano committed intentional actions expressly aimed at California. The conduct of an agent, acting with apparent authority from his principal, will suffice to establish personal jurisdiction over the principal, however. Myers v. Bennett Law Offices, 238 F.3d 1068, 1073 (9th Cir.2001); see also Besser v. Chapple, No. SACV 09-230 DOC, 2010 WL 370336, *4-5 (C.D.Cal. Jan. 25, 2010). "A party claiming apparent authority of an agent must prove (1) that the acting party subjectively believed that the agent had authority to act for the principal[,] and (2) that the subjective belief in the agent's authority was objectively reasonable." Myers, 238 F.3d at 1073 n. 2; Besser, 2010 WL 370336 at *5.
EduMoz alleges that Celio Mondlane was the agent of both the Chissano Foundation and Chissano.
The facts also show that the things Mondlane did with apparent authority to act for Chissano were intentional and aimed at this forum. EduMoz alleges that Mondlane solicited Silberberg Innovations to perform work for Chissano and the Foundation; that he promised it would be paid for that work; that Silberberg performed work in California (Silberberg Innovation's principal place of business) in reliance on Mondlane's representations; and that Silberberg Innovations was never paid for the work.
A Rule 12(b)(1) motion tests whether the court has subject matter jurisdiction to hear the claims alleged in the complaint. Such a motion may be "facial" or "factual." Safe Air for Everyone v. Meyer, 373 F.3d 1035, 1039 (9th Cir.2004). Stated differently, a party mounting a Rule 12(b)(1) challenge to the court's jurisdiction may do so either on the face of the pleadings or by presenting extrinsic evidence for the court's consideration. See White v. Lee, 227 F.3d 1214, 1242 (9th Cir.2000); Thornhill Publ'g Co. v. Gen. Tel. & Elecs., 594 F.2d 730, 733 (9th Cir.1979). Whatever the nature of the challenge, the party seeking to sue in federal court bears the burden of burden of establishing that the court has subject matter jurisdiction to hear the action. Kokkonen v. Guardian Life Ins. Co., 511 U.S. 375, 377, 114 S.Ct. 1673, 128 L.Ed.2d 391 (1994); Association of American Medical Colleges v. United States, 217 F.3d 770, 778-79 (9th Cir.2000); Stock West, Inc. v. Confederated Tribes, 873 F.2d 1221, 1225 (9th Cir.1989).
Defendants have proffered declarations and documents in support of their Rule 12(b)(1) motion; they thus mount a factual attack on subject matter jurisdiction. The Ninth Circuit has held that the district court should apply a standard similar to that used in deciding summary judgment motions when asked to decide a factual attack under Rule 12(b)(1). Evidence outside the pleadings may be considered, but all factual disputes must be resolved in favor of the non-moving party. See Dreier v. United States, 106 F.3d 844, 847 (9th Cir.1996) ("[W]e will consider items outside the pleading that were considered by the district court in ruling on the 12(b)(1) motion, but resolve all disputes of fact in favor of the non-movant.... [T]he standard we apply upon de novo review of the record is similar to the summary judgment standard that the district court purported to apply"); In re Facebook Privacy Litigation, 791 F.Supp.2d 705, 710 (N.D.Cal. 2011) ("[I]n the absence of a full-fledged evidentiary hearing, disputes in the facts pertinent to subject-matter are viewed in the light most favorable to the opposing party. The disputed facts related to subject-matter jurisdiction should be treated in the same way as one would adjudicate a motion for summary judgment" (internal citation omitted)); Ambros-Marcial v. United States, 377 F.Supp.2d 767, 771 (D.Ariz.2005) ("Where a motion `properly should be labeled a dismissal for lack of jurisdiction pursuant to Fed.R.Civ.P. 12(b)(1),' the Court may `consider items outside the pleading ... but [shall] resolve all disputes of fact in favor of the nonmovant... similar to the summary judgment standard ...,'" quoting Dreier, 106 F.3d at 847). "Once the moving party has converted the motion to dismiss into a factual motion by presenting affidavits or other evidence properly brought before the court, the party opposing the motion must furnish affidavits or other evidence necessary to satisfy its burden of establishing subject matter jurisdiction." Savage v. Glendale Union High Sch., 343 F.3d 1036, 1039 n. 2 (9th Cir.2003).
Defendants argue that EduMoz's claims against the government defendants must be dismissed because the court lacks subject matter jurisdiction to hear the claims under the Foreign Sovereign Immunities Act, 28 U.S.C. §§ 1602 et seq. The "sole basis" upon which federal courts can obtain jurisdiction over a foreign state is the FSIA. Amerada Hess Shipping Corp., 488 U.S. at 434, 109 S.Ct. 683. The FSIA establishes a "comprehensive framework for determining whether a court in this country, state or federal, may exercise jurisdiction over a foreign state." Republic of Argentina v. Weltover, Inc., 504 U.S. 607, 610, 112 S.Ct. 2160, 119 L.Ed.2d 394 (1992).
"Under § 1604 of the FSIA, a foreign state is immune from the jurisdiction of the courts of the United States and of the States except as provided in various exceptions." Terenkian v. Republic of Iraq, 694 F.3d 1122, 1127 (9th Cir.2012). The FSIA's definition of a "foreign state" includes a "political subdivision of a foreign state or an agency or instrumentality of a foreign state." Embassy of the Arab Republic of Egypt v. Lasheen, 603 F.3d 1166, 1170 n. 2 (9th Cir.2010) (citing 28 U.S.C. § 1603(a)). An "agency or instrumentality of a foreign state" includes "an organ of a foreign state or political subdivision thereof." Id. (citing 28 U.S.C. § 1603(b)).
Defendants argue that the Republic of Mozambique has sovereign immunity because it is a foreign state. They contend that the Ministry of Education also has sovereign immunity because it is an organ of the Mozambican government and is therefore a foreign state as well. EduMoz does not dispute that each of the government defendants constitutes a "foreign state" under the FSIA.
Because defendants have adequately established that the government defendants are "foreign states," the burden shifts to EduMoz to overcome the presumption of sovereign immunity by adducing evidence that the conduct that forms the basis of the complaint falls within the scope of an applicable FSIA exception. See Peterson v. Islamic Republic of Iran, 627 F.3d 1117, 1125 (9th Cir.2010) ("Once the court has determined that the defendant is a foreign state, `the burden of production shifts to the plaintiff to offer evidence that an exception applies,'" citing Phaneuf v. Republic of Indonesia, 106 F.3d 302, 305 (9th Cir.1997), cert. denied, 535 U.S. 987, 122 S.Ct. 1540, 152 L.Ed.2d 466 (2002)). EduMoz contends that the evidence it has adduced demonstrates that the FSIA's "commercial activity" exception applies. Under this exception,
To determine whether certain conduct falls within the commercial activities exception, "the FSIA directs courts to look to the nature of the activity in question, rather than to its purpose." Park v.
EduMoz argues that it has satisfied its burden of showing that the commercial activity exception applies because the subject contract "incontestably constitutes `commercial activity' carried on by Mozambique's Ministry of Education."
Once a party "offers evidence that a[ ] FSIA exception to immunity applies, the party claiming immunity bears the burden of proving by a preponderance of the evidence that the exception does not apply." Joseph, 830 F.2d at 1021; see also Phaneuf, 106 F.3d at 307 ("Because Phaneuf offered evidence that the commercial activity exception applies, the defendants bear the burden of proving by a preponderance of the evidence that the exception does not apply"). Defendants argue that the exception does not apply because the government defendants did not engage in the commercial activity at issue. Citing Phaneuf, they contend that the government defendants cannot be said to have engaged in "commercial activity" because Martins lacked the "actual authority" to execute the contract with Silberberg on their behalf.
In Phaneuf, the plaintiff held several promissory notes executed by several then-members of Indonesia's National Defense Security Council ("NDSC"). 106 F.3d at 304. The notes bore the signatures of two NDSC members and the NDSC crest. Id. H.A. Chalid Mawardi, Indonesia's ambassador to Syria, purportedly confirmed that the NDSC notes were official governmental notes. The Republic of Indonesia later declared them worthless, however. Indonesia asserted that the creation of the notes was unauthorized and
Defendants argued that they were entitled to immunity under the FSIA. Specifically, they contended that the commercial activity exception did not apply because they were not responsible for execution of the notes. Indonesia and the NDSC asserted that they were not bound by the actions of former NDSC members or Mawardi because those officials had exceeded the scope of their authority in issuing and certifying the validity of the notes. The Ninth Circuit agreed that the commercial activity exception did not apply, holding that a government agent must have actual authority to carry out "commercial activity of a foreign state" within the meaning of the FSIA. Id. at 308. It reasoned: "When an agency acts beyond the scope of his authority, that agent `is not doing business which the sovereign has empowered him to do.... If 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.'" Id.
The Fourth Circuit considered very similar facts in Velasco, 370 F.3d 392. It concurred with the Ninth Circuit's view and held that the commercial activity exception can be invoked only when the officials of the foreign state have actual authority. Id. at 400. It stated:
Defendants are not expressly named as parties to the contract,
Defendants counter that Martins lacked actual authority to enter into the contract on their behalf for three reasons: (1) he failed to obtain the prior approval of the Mozambique Minister of Finance; (2) he failed to submit the contract to the Mozambique public bidding process; and (3) he failed to obtain the approval of the Mozambique Administrative Tribunal (the "Tribunal"). They contend that Mozambican procurement law required that each of these steps occur before the subject contract could be validly executed. As a result, they argue, the commercial activity exception does not apply.
EduMoz disagrees, asserting that Martins had actual authority to contract on behalf of the Ministry (and therefore, Mozambique). It contends that executing the contract fell within the scope of the Education Minister's duties as defined by Mozambican law. EduMoz does not dispute that Martins failed to comply with the procedures identified by defendants. It asserts, however, that the procedural infirmities defendants identify do not negate Martins' statutory authority as Education Minister. In support of this argument, they cite Larson v. Domestic & Foreign Commerce Corp., 337 U.S. 682, 697, 69 S.Ct. 1457, 93 L.Ed. 1628 (1949).
The court cannot accept EduMoz's argument that the procedural infirmities cited by defendants do not negate Martins' statutory authority. Such an assertion is inconsistent with Velasco and the decisions of other courts that have considered the scope of the commercial activity exception in light of that decision and Phaneuf. In Velasco, the court held that the defendant ambassador's actions in confirming and legalizing the promissory notes at issue "were ultra vires and not binding on the Government of Indonesia" because he did not first obtain a power of attorney from the Ministry of Finance or "Full Powers" from the Department of Foreign Affairs. Velasco, 370 F.3d at 402.
EduMoz next asserts that defendants have failed to adduce sufficient evidence showing that Martins did not comply with Mozambique's procurement procedures before signing the contract.
Specifically, they proffer a copy of Article 16 of Law No. 9/2002 — the "State Financial Administration System" law — that sets forth these requirements. They also proffer Muenda's declaration. Muenda confirms that Article 16 of Law No. 9/2002 requires the contract be authorized by the Minister of Finance before Martins could sign it; that under Mozambican procurement law, the Tribunal must approve contracts for the supply of goods and services to the State; and that Mozambique's Decree No. 15/2010 requires that contracts for the goods and services for the State be submitted to a public tender process.
In support of their reply, defendants adduce evidence that a written record of the required approvals would exist had Martins obtained such approvals. Citing his prior experience obtaining approvals of public contracts, Zaqueu Mondlane states that "approval from the Minister of Finance, the submittal to the public bidding process, and the approval by the Administrative Tribunal are all done in writing ... to create a record."
Chang also states that the Ministry of Finance would have been informed if the contract had been submitted to competitive public bidding or had been approved by the Tribunal. He contends that such approvals would have been in writing, and there is no record of such approvals.
Based on the evidence in the record, the court concludes that defendants have met their burden of showing that the commercial activity exception is inapplicable because Martins acted outside the scope of his authority and failed to comply with Mozambican law in executing the contract. The government defendants are therefore entitled to sovereign immunity under the FSIA.
Defendants next argue that the action should be dismissed in its entirety under
The Supreme Court explained that "where sovereign immunity is asserted, and the claims of the sovereign are not frivolous, 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 864-67, 128 S.Ct. 2180. In concluding that comity interests required dismissal of the action, the Court reasoned:
The facts of this case are distinguishable from Pimentel. Based on the evidence submitted by the parties, the court has found that Martins' conduct was not authorized by Mozambique. EduMoz's claims against him do not, therefore, implicate Mozambique's sovereign interests; this is in contrast to the injuries wrecked by Marcos, which represented the actions of the sovereign. There is no suggestion, moreover, that the transaction between the parties in this case concerns "events of historical and political significance" for Mozambique and its people. Although the court recognizes the comity interest in allowing a foreign state to use its own courts to resolve a dispute, it cannot conclude that this factor alone is sufficiently weighty that it requires dismissal of this action in its entirety. This is particularly
Nor would a monetary recovery by EduMoz case result in the seizure of the property of Mozambique. EduMoz can obtain the damages it seeks directly from Martins. Defendants fail to identify any reason why the case cannot proceed in the absence of the government defendants.
Defendants argue that the complaint should be dismissed in its entirety because EduMoz has not joined Silberberg Innovations LLC, which they contend is an indispensable party. "Rule 19 of the Federal Rules of Civil Procedure governs compulsory joinder in federal district courts." Walter v. Drayson, 496 F.Supp.2d 1162, 1172 (D.Haw.2007) (citing EEOC v. Peabody W. Coal Co., 400 F.3d 774, 778 (9th Cir.2005), cert. denied, 546 U.S. 1150, 126 S.Ct. 1164, 163 L.Ed.2d 1128 (2006)). Rule 19(a) states, in relevant part:
If it is not feasible to join a party found to be "necessary" under Rule 19(a), the court must consider whether "in equity and good conscience, the action should proceed among the existing parties or should be dismissed." Stated differently, the court
In making this determination, the court must consider:
Rule 19 thus requires "three successive inquiries": (1) whether a nonparty is "necessary" and should be joined under Rule 19(a); (2) if so, whether it is feasible to order the absent party joined; and (3) if joinder is not feasible, whether the case can proceed without the party, or whether instead the party is "indispensable" such that the action must be dismissed. See, e.g., Walter, 496 F.Supp.2d at 1173; see also, e.g., Disabled Rights Action Committee v. Las Vegas Events, Inc., 375 F.3d 861, 867 n. 5 (9th Cir.2004) ("The terms `necessary' and `indispensable' are terms of art in Rule 19 jurisprudence: `Necessary' refers to a party who should be `[j]oined if [f]easible.' ... `Indispensable' refers to a party whose participation is so important to the resolution of the case that, if the joinder of the party is not feasible, the suit must be dismissed" (citations omitted)). The Ninth Circuit has cautioned that the Rule 19 inquiry "is a practical, fact specific one, designed to avoid the harsh results of rigid application." Dawavendewa v. Salt River Project Agricultural Improvement and Power District, 276 F.3d 1150, 1154 (9th Cir.2002).
A party may move to dismiss a case for failure to join a necessary and indispensable party under Rule 19. FED. R.CIV.PROC. 12(b)(7); see also, e.g., Contractors Bonding and Insurance Company v. American Lighting Industry, Inc., No. CV 08-813-VAP (JWJx), 2008 WL 4447680, *2 (C.D.Cal. Oct. 1, 2008); Brosnahan v. Pozgay, No. CV 06-2195 DMS (NLS), 2007 WL 173969, *2 (S.D.Cal. Jan. 17, 2007). When seeking dismissal for nonjoinder of a necessary and indispensable party under Rules 12(b)(7) and 19, the moving party bears the burden of adducing evidence supporting the motion. Contractors Bonding and Insurance Company, 2008 WL 4447680 at *2 (citing Citizen Band Potawatomi Indian Tribe of Oklahoma v. Collier, 17 F.3d 1292, 1293 (10th Cir.1994)).
Defendants argue that EduMoz lacks standing to assert the claims set forth in the complaint because it is not a party to the contract — only Silberberg Innovations and Martins are. Although they invoke Rules 12(b)(7) and 19 in asserting that the action should be dismissed, the nature of their challenge is more properly considered a challenge to subject matter jurisdiction under Rule 12(b)(1). See, e.g., Minden Pictures, Inc. v. John Wiley & Sons, Inc., No. C-12-4601 EMC, 2013 WL 1995208, *6 (N.D.Cal. May 13, 2013) (" Rule 12(b)(1) is the appropriate vehicle for dismissing a claim where the plaintiff lacks standing to sue," citing Warren v. Fox Family Worldwide, Inc., 328 F.3d 1136, 1140 (9th Cir.2003)). The court
EduMoz does not dispute that it is not a party to the contract. Nor does it allege that defendants defrauded it or directly injured it in any way. It asserts, instead, that it is the successor-in-interest to Silberberg Innovations.
In its opposition, EduMoz argues that it has standing to assert its claims because Silberberg Innovations has assigned the claims to it. It proffers no evidence that this is so, however, and does not allege this fact in the complaint.
Because defendants have mounted a factual attack on the court's subject matter jurisdiction, EduMoz had the burden of furnishing evidence demonstrating that it has standing. Savage, 343 F.3d at 1039 n. 2; see also Board of Trustees of Laborers Health and Welfare Trust Fund for Northern Cal. v. Doctors Medical Center of Modesto, No. C-07-1740 EMC, 2007 WL 2385097, *5 (N.D.Cal. Aug. 17, 2007) ("The party asserting federal jurisdiction must show express evidence of an explicit assignment in order for a court to find that the alleged assignee has standing," citing
For the reasons stated, the court lacks subject matter jurisdiction over this action. Accordingly, the court grants defendants' motion to dismiss. Because the government defendants are entitled to sovereign immunity, the court dismisses Edumoz's claims against them with prejudice. With respect to Edumoz's claims against the Foundation defendants, the complaint is dismissed with leave to amend to include allegations establishing EduMoz's standing to assert Silberberg Innovation's claims. See Doe v. United States, 58 F.3d 494, 497 (9th Cir.1995) ("`[A] district court should grant leave to amend ... unless it determines that the pleading could not possibly be cured by the allegation of other facts,'" quoting Cook, Perkiss & Liehe v. N. Cal. Collection Serv., 911 F.2d 242, 247 (9th Cir.1990)). EduMoz may file an amended complaint addressing the standing deficiency identified herein within twenty (20) days of the date of this order.
