MTN Dismiss

Case 1:12-cv-00479-RBW Document 32 Filed 07/02/12 Page 1 of 59
UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA TURKCELL LETIIM HIZMETLERI A.. AND EAST ASIAN CONSORTIUM B.V. , Plaintiffs, v. MTN GROUP, LTD. AND MTN INTERNATIONAL (MAURITIUS) LTD., Defendants. ) ) ) ) Civil Action No. 12-00479 (RBW) ) ) Filed under Seal in Part ) ) ) )
MOTION TO DISMISS
COME NOW, Defendants MTN Group, Ltd. and MTN International (Mauritius) Ltd., by and through their undersigned counsel of record, Freshfields Bruckhaus Deringer US LLP, pursuant to Federal Rules of Civil Procedure 12(b)(1), 12(b)(2), and 12(b)(6) and move for dismissal of Plaintiffs Complaint with prejudice and for any other and further relief that this Court deems just and proper. In support of this Motion, Defendants direct the Court to the Declaration of Timothy J. Coleman with accompanying exhibits, the Declaration of Justice Johann Christiaan Kriegler, and the Statement of Points and Authorities attached hereto and incorporated herein by reference.
Dated:
Washington, D.C. July 2, 2012
FRESHFIELDS BRUCKHAUS DERINGER US LLP
By: /s/ Timothy J. Coleman___________ Timothy J. Coleman (#436415) 701 Pennsylvania Avenue, N.W., Suite 600 Washington, D.C. 20004-2692 tim.coleman@freshfields.com Attorneys for Defendants
UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA TURKCELL LETIIM HIZMETLERI A.. AND EAST ASIAN CONSORTIUM B.V., Plaintiffs, v. MTN GROUP, LTD. AND MTN INTERNATIONAL (MAURITIUS) LTD., Defendants. ) ) ) ) Civil Action No. 12-00479 (RBW) ) ) ORAL ARGUMENT REQUESTED ) ) Filed under Seal in Part ) )
STATEMENT OF POINTS AND AUTHORITIES IN SUPPORT OF DEFENDANTS MOTION TO DISMISS THE COMPLAINT OR FOR A STAY
FRESHFIELDS BRUCKHAUS DERINGER US LLP 701 Pennsylvania Avenue, NW, Suite 600 Washington, DC 20004-2692 Telephone: (202) 777-4500 Facsimile: (202) 777-4555 Attorneys for Defendants
TABLE OF CONTENTS Page TABLE OF AUTHORITIES ......................................................................................................... iii PRELIMINARY STATEMENT .....................................................................................................1 THE COMPLAINT .........................................................................................................................4 PLAINTIFFS LOSE THE ICC ARBITRATION............................................................................6 ARGUMENT.................................................................................................................................10 I. THE COURT LACKS SUBJECT MATTER JURISDICTION UNDER THE ALIEN TORT STATUTE.........................................................................................11 A. B. C. D. Plaintiffs Alien Tort Statute Claim Fails Because Plaintiffs Do Not Assert a Violation of the Law of Nations..............................................................12 Plaintiffs Fail to State a Claim Based on a Treaty of the U.S....................17 Plaintiffs Fail to State a Claim that Defendants Aided and Abetted a Treaty Violation .........................................................................................21 The Court Lacks Supplemental Jurisdiction over Plaintiffs State Law Claims ........................................................................................................21 The Findings in the Award are Dispositive of Plaintiffs Principal Claims ........................................................................................................22
II. THE ICC ARBITRATION AWARD BARS PLAINTIFFS PRINCIPAL CLAIMS ......22 A.
B. C. D.
The Award Bars Plaintiffs Principal Claims Under the Doctrine of Res Judicata ...............................................................................................26 Plaintiffs Are Collaterally Estopped from Bringing the Principal Claims.........................................................................................28 The Award Bars Plaintiffs Principal Claims Under the Doctrine of Comity........................................................................................................30 The Court Lacks General Jurisdiction under D.C. and Federal Law.........31 1. Plaintiffs Cannot Rely on Alleged Contacts of MTN Groups Subsidiaries ....................................................................................31
III. THE COURT LACKS PERSONAL JURISDICTION OVER DEFENDANTS ..............30 A.
2. 3. 4. B. A. B.
MTNs Alleged Contacts Do Not Establish General Personal Jurisdiction.....................................................................................32 Plaintiffs Have Not Alleged Personal Jurisdiction Over MTNI .............................................................................................36 Exercising Jurisdiction Would Be Inconsistent with Due Process ...........................................................................................36
The Court Lacks Specific Jurisdiction under D.C. Law ............................37 The Complaint Should Be Dismissed under the Doctrine of Forum Non Conveniens.........................................................................................40 The Act of State Doctrine Bars This Action..............................................42
IV. THE COURT SHOULD DECLINE TO EXERCISE JURISDICTION ...........................40
V. PLAINTIFFS PRINCIPAL NON-FEDERAL CLAIMS ARE TIME-BARRED............43 VI. THE COMPLAINT FAILS TO STATE A CLAIM FOR BREACH OF CONTRACT OR DEFAMATION...........................................................................................................44 CONCLUSION..............................................................................................................................45
ii
TABLE OF AUTHORITIES Page(s) CASES * AGS Intl Servs. S.A. v. Newmont USA Ltd., 346 F. Supp. 2d 64 (D.D.C. 2004) .........................................................................31, 32, 35, 38 Ali Shafi v. Palestinian Auth., 642 F.3d 1088 (D.C. Cir. 2011) ...................................................................................12, 14, 22 Allen v. Russian Fedn, 522 F. Supp. 2d. 167 (D.D.C. 2007) ............................................................................33, 34, 35 Am. Petroleum Inst. v. Johnson, 541 F. Supp. 2d 165 (D.D.C. 2008) .........................................................................................12 Arndt v. UBS AG, 342 F. Supp. 2d 132 (E.D.N.Y. 2004) .....................................................................................12 * Asahi Metal Indus. Co. v. Super. Ct. of Calif. v. Solano Cnty, 480 U.S. 102, 107 S. Ct. 1026 (1987)......................................................................................37 * Ashcroft v. Iqbal, 556 U.S. 662, 129 S. Ct. 1937 (2009)................................................................................11, 44 Bancoult v. McNamara, 214 F.R.D. 5 (D.D.C. 2003).....................................................................................................37 BBC Chartering & Logistic GmbH & Co.K.G. v. Siemens Wind Power A/S, 546 F. Supp. 2d 437 (S.D. Tex. 2008) .....................................................................................42 Bell Atl.v. Twombly. 550 U.S. 544, 127 S. Ct. 1955 (2007)......................................................................................17 Buesgens v. Brown, 567 F. Supp. 2d 26 (D.D.C. 2008) ...............................................................................28, 30, 31 Burman v. Phoenix Worldwide Indus., 437 F. Supp. 2d 142 (D.D.C. 2006) .........................................................................................36 Burns v. Town of Lamoine, No. Civ. 00-89-B-S, 2000 WL 1612704 (D. Me. Sept. 21, 2000)...........................................28 Busby v. Capital One, N.A., 772 F. Supp. 2d 268 (D.D.C. 2011) .........................................................................................23
iii
Busse v. Steele, Case No. 2:10-CV-89-FtM-36TGW, 2010 U.S. Dist. LEXIS 104779 (M.D. Fl. Aug. 18, 2010) ..................................................................................................................................28 * Camp v. Kollen, 567 F. Supp. 2d 170 (D.D.C. 2008) .........................................................................................28 Capitol Hill Grp. v. Pillsbury, Winthrop, Shaw, Pittman, LLC, 569 F.3d 485 (D.C. Cir. 2009) .................................................................................................26 City of Chicago v. Intl Coll. of Surgeons, 522 U.S. 156, 118 S. Ct. 523 (1997)........................................................................................22 Creighton Ltd. v. Govt of State of Qatar, 181 F.3d 118 (D.C. Cir. 1999) ...........................................................................................34, 36 Discon Inc. v. Nynex Corp., 86 F. Supp. 2d 154 (W.D.N.Y. 2000) ......................................................................................28 Doe v. Nestle, S.A., 748 F. Supp. 2d 1057 (C.D. Cal. 2010) .............................................................................13, 14 Doe VIII v. Exxon Mobil Corp., 654 F.3d 11 (D.C. Cir. 2011) .......................................................................................12, 22, 41 Dtex, LLC v. BBVA Bancomer, S.A., 512 F. Supp. 2d 1012 (S.D. Tex. 2007) ...................................................................................42 Dubois v. Wash. Mut. Bank, Civ. No. 09-2176 (RJL), 2010 WL 3463368 (D.D.C. Sept. 3, 2010)......................................43 El-Shifa Pharm. Indus. Co. v. United States, 607 F.3d 836 (D.C. Cir. 2010) .................................................................................................11 Ellsworth Assoc., Inc. v. U.S., 917 F. Supp. 841 (D.D.C. 1996) ..................................................................................23, 24, 25 Estate of Thomson v. Toyota Motor Corp. Worldwide, 545 F.3d 357 (6th Cir. 2008) .............................................................................................41, 42 Evans v. First Mt. Vernon, 786 F. Supp. 2d 347 (D.D.C. 2011) ...........................................................................................4 FC Inv. Grp. LLC v. IFX Mkts., Ltd., 529 F.3d 1087 (D.C. Cir. 2008) ...............................................................................................34 Fernandez v. Jones, 653 F. Supp. 2d 22 (D.D.C. 2009) ...........................................................................................21
iv
Flores v. S. Peru Copper Corp., 414 F.3d 233 (2d Cir. 2003)...............................................................................................12, 15 Freiman v. Lazur, 925 F. Supp. 14 (D.D.C. 1996) ................................................................................................39 Hamid v. Price Waterhouse, 51 F.3d 1411 (9th Cir. 1995) ...................................................................................................12 Helms v. Secretary of the Treasury, 21 F. Supp. 1354 (D.D.C. 1989) ..............................................................................................19 IIT v. Vencap, Ltd., 519 F.2d 1001 (2d Cir. 1975)...................................................................................................12 In re Intl Bechtel Co., 300 F. Supp. 2d 112 (D.D.C. 2005) .........................................................................................30 Irwin v. World Wildlife Fund, Inc., 448 F. Supp. 2d 29 (D.D.C. 2006) .....................................................................................41, 42 Jennings v. Exelrod, Civ. No. 11-1708 (RWR), 2012 WL 1357554 (D.D.C. Apr. 19, 2012) ..................................44 Jenson v. Huerta, 828 F. Supp. 2d 174 (D.D.C. 2011) .........................................................................................27 Jogi v. Voges, 480 F.3d 822 (7th Cir. 2007) ...................................................................................................20 JS Serv. Ctr. Corp. v. Gen. Elec. Tech. Servs. Co., 937 F. Supp. 216 (S.D.N.Y. 1996) ..........................................................................................15 Kaempe v. Myers, 367 F.3d 958 (D.C. Cir. 2004) .................................................................................................24 Khatib v. Alliance Bankshares Corp., Civ. Action No. 12-00056 (CKK), 2012 WL 668594 (D.D.C. Mar. 1, 2012).........................31 * Kiobel v. Royal Dutch Petroleum Co, ___ U.S. ___, 132 S. Ct. 1738 (2012)......................................................................................12 Kline v. Williams, Civil Action 05-01102 (HHK), 2012 WL 1431377 (D.D.C. Mar. 23, 2006) ..........................39 Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375 (1994).................................................................................................................11
Kroger v. Legalbill.com LLC, Civ. No. 04-2189 (ESH), 2005 WL 4908968 (D.D.C. Apr. 7, 2005)................................39, 40 Lamb v. Phillip Morris, Inc., 915 F.2d 1024 (6th Cir. 1990) .................................................................................................15 Lapointe v. Note, Civ. Action No. 03-2128 (RBW), 2004 U.S. Dist. LEXIS 27691 (D.D.C. Nov. 9, 2004) ..................................................................................................................................38, 39 Levermore v. Smith, Civ. A. No. 87-2158-OG, 1988 WL 110607 (D.D.C. Oct. 12, 1988) .....................................44 Martin v. Dept of Justice, 488 F.3d 446 (D.C. Cir. 2007) ...........................................................................................28, 29 Maugein v. Newmont Mining Corp., 298 F. Supp. 2d 1124 (D. Colo. 2004).....................................................................................14 Mazza v. Verizon Wash. D.C., Inc., Case No. 11-719 (EGS), 2012 U.S. District LEXIS 43314 (D.D.C. Mar. 29, 2012) ........32, 33 MBI Grp., Inc. v. Credit Foncier du Cameroun, 558 F. Supp. 2d 21 (D.D.C. 2008), affd, 616 F.3d 568 (D.C. Cir. 2010).........................40, 42 McFarlane v. Esq. Magazine, 74 F.3d 1296 (D.C. Cir. 1996) .................................................................................................39 McLaughlin v. Bradlee, 599 F. Supp. 839 (D.D.C. 1984) ..............................................................................................28 Medellin v. Texas, 552 U.S. 491, 128 S. Ct. 1346 (2008)......................................................................................18 Mendonca v. Tidewater, Inc., 159 F. Supp. 2d 299 (E.D. La. 2001), affd, 33 F. Appx 705 (5th Cir. 2002) ........................13 Mitchell v. Bannum Place of Wash., 532 F. Supp. 2d 104 (D.D.C. 2008) ...................................................................................27, 28 Moore v. Motz, 437 F. Supp. 2d 88 (D.D.C. 2006) ...........................................................................................30 Natl Football League Players Assn v. Office & Profl Emps. Intl Union, Local 2, 947 F. Supp. 540 (D.D.C. 1996), affd, 96-7245, 1997 WL 362761 (D.C. Cir. May 6, 1997) ........................................................................................................................................24
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Natl Resident Matching Program v. Elec. Residency LLC, 720 F. Supp. 2d 92 (D.D.C. 2010) ...........................................................................................38 Natural Res. Def. Council v. EPA, 513 F.3d 257 (D.C. Cir. 2008) ...........................................................................................26, 27 New Comm Wireless Servs., Inc. v. SprintCom Inc., 287 F.3d 1 (1st Cir. 2002)........................................................................................................33 Novak v. World Bank, 703 F. 2d 1305 (D.C. Cir. 1983) ..............................................................................................28 OAO Alfa Bank v. Center for Public Integrity, 387 F. Supp. 2d 20 (D.C. Cir. 2005)..................................................................................44, 45 Omollo v. Citibank, N.A., No. 07 Civ. 9259 (SAS), 2008 WL 1966721 (S.D.N.Y. May 6, 2008).............................41, 42 Orellana v. Croplife Intl, 740 F. Supp. 2d 33 (D.D.C. 2010) .....................................................................................30, 36 Palmer v. Kawaguchi Iron Works, Ltd., 644 F. Supp. 327 (N.D. Ill. 1986) ............................................................................................35 Parisi v. Sinclair, Civ. No. 10-897 (RJL), 2012 WL 639280 (D.D.C. Feb. 28, 2012).........................................45 Patton Boggs LLP v. Chevron Corp., 791 F. Supp. 2d 13 (D.D.C. 2011) .....................................................................................23, 25 Roane v. Gonzales, Civil Action No. 05-2337 (RWR), 2006 U.S. Dist. LEXIS 31781 (D.D.C. Feb. 27, 2006) ........................................................................................................................................12 RSM Prod. Corp. v. Fridman, 643 F. Supp. 2d 382 (S.D.N.Y. 2009), affd 387 F. Appx 72 (2d Cir. 2010)...................14, 19 Rush v. Savchuk, 444 U.S. 320, 100 S. Ct. 517 (1980)........................................................................................36 S.K. Innovation, Inc. v. Finpol, Civ. Action No. 10-138 (JEB), 2012 WL 1259108 (D.D.C. Apr. 16, 2012)...........................11 Sanders v. Wash. Metro. Area Transit Auth., 819 F.2d 1151 (D.C. Cir. 1987) ...............................................................................................28 Sarei v. Rio Tinto PLC, 550 F.3d 822 (9th Cir. 2008) (en banc) ...................................................................................41
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Sarei v. Rio Tinto, PLC, 671 F.3d 736 (9th Cir. 2011) .............................................................................................13, 43 Schattner v. Girard, Inc., 668 F.2d 1366 (D.C. Cir. 1981) ...............................................................................................28 Scientific Drilling Intl, Inc v. Gyrodata Corp., 215 F.3d 1351, 1999 WL 674511 (Fed. Cir. 1999) .................................................................14 Siam Kraft Paper Co. v. Parsons & Whittemore, Inc., 400 F. Supp. 810 (D.D.C. 1975) ..............................................................................................34 Sinochem Intl Co. v. Malay. Intl Shipping Corp., 549 U.S. 422, 127 S. Ct. 1184 (2007)......................................................................................42 Son v. Kim, Civil Action No. 04-2318 (JR), 2007 U.S. Dist. LEXIS 22403 (D.D.C. March 28, 2007) ..................................................................................................................................32, 37 * Sosa v. Alvarez-Machain, 542 U.S. 692, 124 S. Ct. 2739 (2004).............................................................................. passim Tech. Patents, LLC v. Deutsche Telekom AG, 573 F. Supp. 2d 903 (D. Md. 2008) .........................................................................................33 Telcordia Techs. Inc. v. Telkom SA, Ltd. No. 02-1990(JR), 2003 U.S. Dist. LEXIS 23726 (D.D.C. July 20,2003).............................................................35 Thomas v. Centennial Commcns Corp., No. 05-0495, 2006 U.S. Dist. LEXIS 92555 (W.D.N.C. Dec. 19, 2006)................................33 United States ex. rel. Lujan v. Gengler, 510 F.2d 62 (2d Cir. 1975).......................................................................................................18 United States v. Phillip Morris Inc., 116 F. Supp. 2d 116 (D.C. 2000).......................................................................................31, 37 United States v. Zabaneh, 837 F.2d 1249 (5th Cir. 1988) .................................................................................................18 Whiteman v. Fed. Republic of Austria, No. 00 Civ. 8006 (SWK), 2002 WL 31368236 (S.D.N.Y. Oct. 21, 2002)..............................35 World Wide Minerals, Ltd. v. Republic of Kazakhstan, 296 F.3d 1154 (D.C. Cir. 2002) ...............................................................................................43 Xuncax v. Gramajo, 886 F. Supp. 162 (D. Mass. 1995) ...........................................................................................21
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Zibiz Corp. v. FCN Tech. Solutions, 777 F. Supp. 2d 408 (E.D.N.Y. 2011) .....................................................................................35 RULES Fed. R. Civ. P. 4.................................................................................................................31, 32, 37 * Fed. R. Civ. P. 12..............................................................................................................1, 11, 22 Article 1484 of the French Code of Civil Procedure .................................................................................. 26 STATUTES 15 U.S.C. 78dd-1 ......................................................................................................................16 15 U.S.C. 78dd-2 ........................................................................................................................16 * 28 U.S.C. 1350.............................................................................................................12, 20, 21 28 U.S.C. 1367(a) .......................................................................................................................21 28 U.S.C. 1367(c) .......................................................................................................................22 D.C. Code 13-334 ........................................................................................................................31 D.C. Code 13-423 ......................................................................................................37, 38, 39, 40 OTHER AUTHORITIES Advisory Opinion on the Legality of the Threat of Use of Nuclear Weapons, 1996 I.C.J. 226 .........................................................................................................................17 African Union Convention on Preventing and Combating Corruption, July 11, 2003, 43 I.L.M. 5 ....................................................................................................................................20 Council of Europe Criminal Law Convention on Corruption, Jan. 29, 1999, Europe C.E.T.S. No. 173......................................................................................................................20 Country reports on the implementation of the OECD Anti-Bribery Convention, http://www.oecd.org/document/24/0,3746,en_2649_37447_1933144_1_1_1_37447,0 0.html (last visited May 22, 2012) ...........................................................................................16 Devon Maylie, MTN Probes Bribery Claims, Wall St. J., Feb. 4, 2012........................................45 G.A. Res. 58/4, U.N. Doc. A/RES/58/4 (Oct. 21, 2003) ...............................................................17 G.A. Res. 61/89, U.N. Doc. A/RES/61/89 (Dec. 18, 2006)...........................................................17
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* Kiobel v. Royal Dutch Petroleum Co., No. 10-1491, 2012 WL 2161290 (June 11, 2012) ...................................................................40 Organization of American States, Inter-American Convention against Corruption, Mar. 29, 1996, S. Treaty Doc. No. 105-39, O.A.S.T.S. No. B-58, 35 I.L.M. 724 (1996), http://www.oas.org/juridico/english/Sigs/b-58.html (last visited June 4, 2012) .....................16 Organisation for Economic Co-operation and Development Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, Nov. 21, 1997, S. Treaty Doc. No. 105-43, 37 I.L.M. 1 (1998).. ...........................................................14 OECD Working Group on Bribery Annual Report 2010, 11., http://www.oecd.org/dataoecd/7/15/47628703.pdf .................................................................16 RESTATEMENT (THIRD) OF FOREIGN RELATIONS LAW OF THE UNITED STATES .......................13, 14 S. EXEC. REP. NO. 109-18 ........................................................................................................17, 18 S. REP. NO. 105-277 (1998) ...........................................................................................................16 Strengthening Governance, Tackling Corruption: The World Banks Updated Strategy and Implementation Plan (World Bank Group Engagement on Governance and Anticorruption Jan. 17, 2012) available at: http://siteresources.worldbank.org/PUBLICSECTORANDGOVERNANCE/Resource s/285741-132681618754/Strengthening ..................................................................................21 UN Convention, Art. 15; United Nations Convention against Transnational Organized Crime, Art. 8, Nov. 15, 2000, T.I.A.S. 13127, S. Treaty Doc. No. 108-16, 209 U.N.T.S. 2225 ..........................................................................................................................20 United Nations Global Compact, Principle 10 (June 24, 2004), available at: http://unglobalcompact.org/AboutTheGC/TheTenPrinciples/principle10.html (some of which are not treaties)..........................................................................................................22
Defendants respectfully submit this statement of points and authorities in support of their motion to dismiss the Complaint pursuant to Rules 12(b)(1), 12(b)(2), and 12(b)(6) of the Federal Rules of Civil Procedure (the Federal Rules).1 PRELIMINARY STATEMENT This case is nothing more than a commercial dispute between a Turkish company and a South African company arising from the parties competition for a cellular telephone license in Iran. It does not belong in this Court because Plaintiffs hollow invocation of the Alien Tort Statute (ATS)a statute that concerns torts that violate the law of nations or a treaty of the U.S.does not vest the Court with subject matter jurisdiction to hear this dispute. Nor should it. This is not a case about grave issues of universal international concern that the ATS addresses such as piracy and genocide. This case is about one thing: Turkcell trying to get paid by a nonstate actor for an Iranian cellular telephone license that it claims it lost unfairly. We respectfully submit that a U.S. district court has no business deciding this dispute. Because the core of Plaintiffs Complaint has no conceivable connection to the U.S., it should come as no surprise that this Court is not the first to hear Plaintiffs plea for compensation. It is the fourth. In 2005, Plaintiffs initiated an injunction action in an Iranian court and later, in 2008, instituted a bilateral investment treaty arbitration against Iran. Plaintiffs did not stop there. In April 2008, EAC initiated yet another arbitration (the ICC Arbitration), this one against Iran Electronic Development Company (IEDC), claiming that IEDC violated a shareholders agreement and seeking compensation for damages for EACs exclusion from a consortium of investors who were to be awarded the Iranian cellular telephone license. On April
1
Defendants MTN Group Ltd. and MTN International (Mauritius) Ltd. (respectively, MTN Group and MTNI) are referred to collectively herein as Defendants. Plaintiffs Turkcell letiim Hizmetleri A.. and East Asian Consortium B.V. (respectively, Turkcell and EAC) are referred to collectively herein as Plaintiffs. Plaintiffs complaint in this action is referred to herein as the Complaint and cited as Compl. The Declaration of Timothy J. Coleman, dated July 2, 2012, is cited as Coleman Decl.
17, 2012, the arbitration panel in the ICC Arbitration (the Tribunal) issued an award (the Award) in which all of EACs claims were rejected on the merits. Having failed to obtain relief elsewhere, Plaintiffs have filed yet another complaint, which does not state a cognizable cause of action and is not properly before this Court. The Complaint should be dismissed for at least four reasons. First, the Court lacks subject matter jurisdiction under the ATS, which is the only purported basis for subject matter jurisdiction in this Court. In its first two Counts, which purportedly concern violations of the law of nations and U.S. treaties, the Complaint alleges what amounts to claims for tortious interference with a contract or prospective economic advantage. See Compl. 205, 212 (alleging that MTN Group tortiously interfere[d] with Turkcells receipt of the GSM License). Plaintiffs admit as much by asserting common law claims for tortious interference and conversion arising from the same facts (Counts III through VI) and asserting only economic damages stemming from a lost business opportunity. The allegation that the alleged interference took the form of bribery or trading in influence does not transform this case into a matter of international law or concern. The ATS is not meant to right alleged business torts. The ATS creates no new causes of action but simply grants jurisdiction to hear tort claims by aliens in a narrow set of common law actions that are derived from the law of nations. See Sosa v. Alvarez-Machain, 542 U.S. 692, 724, 124 S. Ct. 2739, 2761 (2004). Plaintiffs would have this Court recognize a new cause of actiontortious interference with contract through briberybut their Complaint fails to clear the high bar set by the Supreme Court for doing so under the ATS. Id. at 727, 124 S. Ct. at 2763. This Court should exercise the great caution the Supreme Court requires when
considering whether to extend the ATS (id. at 728, 124 S.Ct. at 2764) and decline Plaintiffs invitation to recognize a new federal tort for purely commercial claims. Second, Plaintiffs are barred by res judicata and collateral estoppel from asserting many of the allegations in their Complaint by the Award.
The Award, therefore, precludes each of Plaintiffs claims in Counts I through VI (the Principal Claims). Third, the Court lacks personal jurisdiction over Defendants. MTN Group and MTNI are each foreign companies, with their principal places of business in South Africa and Mauritius, respectively. Plaintiffs Principal Claims do not arise out of conduct that occurred in or had an effect in this District, and Defendants lack the significant contacts with the United States that are necessary for this Courts exercise of general personal jurisdiction. Calling foreign defendants with no presence in the U.S. to answer allegations in this Court, regarding events that allegedly took place in South Africa and Iran, would hardly comport with the traditional notions of fair play and substantial justice required by due process. Fourth, even if this Court had jurisdiction to hear this matter (and it does not) and Plaintiffs Principal Claims were not precluded by the Award (and they are), the Court should decline to exercise jurisdiction because abstention doctrines including forum non conveniens, the act of state doctrine, and exhaustion of remedies all counsel against it. Under the doctrine of forum non conveniens, this action should not be heard in a U.S. court. It should be heard, if anywhere, in South Africa, which has an actual nexus to the allegations of the Complaint and
provides an adequate alternative forum. The relevant private and public factors, including the location of all the evidence and witnesses, the administrative burden in hearing the claims here, and South Africas overriding interest in deciding a lawsuit alleging bribery at the highest levels of its government, all strongly favor having the case decided there. Further, the allegations of the Complaintthat a South African telephone company convinced the government of Iran to award a cellular telephone license to one party and not another, and thereby breached a treaty with the U.S.raise foreign policy concerns that implicate the act of state doctrine. The Court should also decline supplemental jurisdiction over Plaintiffs non-federal claims, all but two of which are precluded by the Award and are time-barred. For all of these reasons, all of Plaintiffs claims should be dismissed.2 THE COMPLAINT3 Plaintiffs Complaint concerns an international tender for the development of a mobile telephone network in Iran. Compl. 1. The Iranian Ministry of Communication and Information Technology (MCIT) held the tender in 2003, offering the winner a 15-year license to operate a mobile phone network in Iran (the License). See id 55-56. Plaintiff Turkcell, a Turkish telecommunications company, participated in the tender through its wholly-owned subsidiary, Plaintiff EAC. Plaintiffs joined in a consortium bid with two Iranian companies, IEDC and Parman Ertebat (collectively, the Irancell Consortium). See id. 17. MTN Group, a South African company, separately formed its own consortium that
Plaintiffs claims for breach of contract and defamation (Counts VII and VIII) should be dismissed for the additional reason that they fail to state a claim. Plaintiffs fail to allege, for instance, damages for the alleged breach or that the allegedly defamatory statement was made with actual malice. See Section VI, infra.
3
This summary is drawn from the Complaint, except as otherwise noted. On a motion to dismiss, the Court may appropriately consider materials outside the pleadings that are either central to the plaintiffs claims, and are thus incorporated into the Complaint, or are appropriate for the Courts consideration in determining its jurisdiction. See Evans v. First Mt. Vernon, 786 F. Supp. 2d 347, 352 (D.D.C. 2011). Defendants in no way concede the accuracy of Plaintiffs allegations.
included Defendant MTNI (a Mauritius company) and several other Iranian entities. See id. Nowhere do Plaintiffs allege that any of the participants in the tender were American companies or that any of the acts relating to the tender or occurring after the tender was complete occurred in the United States. See id. 55-191. Ultimately, in February 2004, MCIT announced that the Irancell Consortium had won the bid and was the provisional winner of the License. See id. 60; id. at Exh. C. As the provisional winner, the Irancell Consortium (including Plaintiffs) had to complete several contractual agreements with the Iranian government and clear certain regulatory requirements. Id. 61. Plaintiffs failed to meet those requirements and did not obtain the License. See id. The Complaints allegations concerning events prior to February 2004 are However,
the Complaint glosses over the critical period between the announcement in February 2004 that the Irancell Consortium provisionally won the License and MTNIs replacement of EAC in the Irancell Consortium in November 2005. Plaintiffs avoid the details of this time period, referring vaguely to their difficulties with certain regulatory requirements imposed by the Iranian government. See id. 61. Instead, Plaintiffs allege that Defendants took Turkcells position in the Irancell Consortium by using their high-level political influence within the South African government to promise Iran: (1) support for the Iranian development of nuclear weapons; and (2) the procurement of high-tech defense equipment in return for allowing Defendants to participate in the second mobile telephone network. Id. 4, 64, 68. Defendants allegedly furthered [that
purported] scheme by bribing and trading in influence with government officials in both Iran and South Africa in exchange for the License. Id. 4. Notably, the Complaint does not actually allege that the South African government supported Iranian nuclear weapons development, that the South African government changed its position with regards to Irans nuclear policy, or that any high-tech defense equipment was ever sold. Instead, it alleges that South Africa abstained from one vote in the International Atomic Energy Agency (IAEA) (see id 153) and later voted against Iran during a 2007 vote at the U.N. Security Council. Id. 187 (emphasis added). Similarly, the Complaint alleges that MTNs alleged promise to deliver military equipment remained unfulfilled as of March 2007. Id. 184-85. And, nowhere does the Complaint allege that Defendants engaged in the sorts of behavior the ATS traditionally addressessuch as piracy, genocide, or torture. PLAINTIFFS LOSE THE ICC ARBITRATION After failing to meet the legal requirements to participate in the Irancell Consortium, Turkcell and EAC began to seek through litigation and arbitration that which they could not get through negotiationa share of the income from the License. First, in September 2005, EAC brought a commercial proceeding in the Tehran Public Court, which it ultimately lost, seeking an injunction against the MCIT in an attempt to prevent the issuance of the License to a consortium including MTNI rather than EAC. Coleman Decl., Exh. B (Turkcell 2010 Annual Report).4 In the wake of this initial Turkcell lawsuit, Defendant MTNI entered into an indemnity agreement with IEDC (the Indemnity Agreement) regarding claims by Turkcell against IEDC. See Declaration of Sylvia Noury, dated May 24, 2012 [Dkt No. 17] (hereinafter Noury Decl.) 3-5, Exh. A.
Second, in January 2008, Turkcell initiated a bilateral investment treaty arbitration against Iran (the BIT Arbitration). Coleman Decl., (Turkcells 2012 First Quarter Report). Exh. E
That arbitration is pending. Coleman Decl., Exh. E. Third, in April 2008, Plaintiff EAC initiated the ICC Arbitration,
ARGUMENT Defendants move to dismiss the Complaint for lack of subject matter and personal jurisdiction and for failure to state a claim. Although the Court must accept Plaintiffs
10
allegations as true for purposes of this motion,5 see El-Shifa Pharm. Indus. Co. v. United States, 607 F.3d 836, 839 (D.C. Cir. 2010) (en banc), pleadings that . . . are no more than conclusions, are not entitled to the assumption of truth. Ashcroft v. Iqbal, 556 U.S. 662, 679, 129 S. Ct. 1937, 1950 (2009). Only well-pleaded factual allegations should be considered to determine whether they plausibly give rise to an entitlement to relief. See id. Defendants submit that the Complaint must be dismissed in its entirety. All of Plaintiffs claims should be dismissed because the Complaint does not contain sufficient factual matter, accepted as true, to allow this Court to draw the reasonable inference that Defendants are liable for the misconduct alleged. See id. at 1949. Plaintiffs only federal law claims (Counts One and Two) must be dismissed for lack of subject matter jurisdiction and for failure to state a claim, and the Court should decline to exercise supplemental jurisdiction over the other claims. Counts Three through Six are time-barred as a matter of law. Plaintiffs other two claims (Counts Seven and Eight) also fail to state a cognizable claim for relief. Moreover, all of Plaintiffs Principal Claims must be dismissed for the separate and independent reason that they are precluded by the findings and judgments of the tribunal in the ICC Arbitration. Finally, the Court should abstain from exercising jurisdiction in this case, based on the forum non conveniens and act of state doctrines, inter alia, and because the Court lacks personal jurisdiction over Defendants. I. THE COURT LACKS SUBJECT MATTER JURISDICTION UNDER THE ALIEN TORT STATUTE Plaintiffs have not established that this action falls within the Courts limited subject matter jurisdiction, Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994), which is especially narrow here because Plaintiffs sole basis for invoking jurisdiction is the ATS, see
5
To survive a motion to dismiss under Rule 12(b)(1), Plaintiffs bear[] the burden of proving that the Court has subject-matter jurisdiction to hear their claims. S.K. Innovation, Inc. v. Finpol, Civ. Action No. 10-138 (JEB), 2012 WL 1259108, at *4 (D.D.C. Apr. 16, 2012). Because the Complaint fails to state a claim under the ATS, Counts I and II should also be dismissed pursuant to Federal Rule 12(b)(6).
11
Compl. 23. The ATS requires Plaintiffs to allege a tort . . . committed in violation of the law of nations or a treaty of the United States, 28 U.S.C. 1350, but does not, by itself, create any causes of action. See Sosa, 542 U.S. at 724, 124 S. Ct. at 2761; Ali Shafi v. Palestinian Auth., 642 F.3d 1088, 1091 (D.C. Cir. 2011). In determining what offenses are cognizable under the ATS, courts must proceed with extraordinary care and restraint. Flores v. S. Peru Copper Corp., 414 F.3d 233, 248 (2d Cir. 2003). Because the Complaint fails to allege a cognizable tort under the ATS, the Court lacks subject matter jurisdiction, and the Complaint must be dismissed. A. Plaintiffs Alien Tort Statute Claim Fails Because Plaintiffs Do Not Assert a Violation of the Law of Nations Plaintiffs ask this Court to recognize an entirely new federal common law tort which would allow foreign corporations to sue foreign competitors in a U.S. federal district court for tortiously interfering with foreign contractual relations through alleged acts of bribery and trading in influence that took place solely in a foreign country.6 No federal court has recognized such a claim. Nor has any decision held that the ATS may be used to recover for the type of purely business injuries that Plaintiffs allege. To the contrary, ordinary commercial claims are not considered to violate the law of nations. See, e.g., Hamid v. Price Waterhouse, 51 F.3d 1411, 1418 (9th Cir. 1995); IIT v. Vencap, Ltd., 519 F.2d 1001, 1015 (2d Cir. 1975); Arndt v. UBS AG, 342 F. Supp. 2d 132, 139 (E.D.N.Y. 2004).
At the very least, this Court should stay this case pending the outcome of the Supreme Courts decision in Kiobel v. Royal Dutch Petroleum Company. In Kiobel, the Supreme Court has been asked to consider [w]hether and under what circumstances the Alien Tort Statute, 28 U.S.C. 1350, allows courts to recognize a cause of action for violations of the law of nations occurring within the territory of a sovereign other than the United States. Kiobel v. Royal Dutch Petroleum Co, ___ U.S. ___, 132 S. Ct. 1738 (2012). The Supreme Courts resolution of this question could amend the current law in this Circuit that the ATS confers jurisdiction to hear alien tort claims based on human rights violations that occurred outside the United States. See Doe VIII v. Exxon Mobil Corp., 654 F.3d 11, 26 (D.C. Cir. 2011). Indeed, this Court has demonstrated its authority to stay cases where the Supreme Court is simultaneously considering issues relevant to their outcome, and it should do so in this case. See, e.g., Am. Petroleum Inst. v. Johnson, 541 F. Supp. 2d 165, 171 (D.D.C. 2008) (noting decision to stay case pending Supreme Courts decision in unrelated case involving issues of considerable significance to current case); Roane v. Gonzales, Civil Action No. 05-2337 (RWR), 2006 U.S. Dist. LEXIS 31781, at * 2 (D.D.C. Feb. 27, 2006) (staying case pending Supreme Court decision on separate case).
12
That no court has ever recognized the sort of ATS claim Plaintiffs bring is no surprise; none of the acts Plaintiffs allege rise to the high standard set by the Supreme Court in Sosa for a violation of the law of nations under the ATS. See Sosa, 542 U.S. at 732, 124 S. Ct. at 2765. In Sosa, the Supreme Court held that courts should require any claim based on the present-day law of nations to rest on a norm of international character accepted by the civilized world and defined with a specificity comparable to the features of the 18th-century paradigms previously recognized by the Supreme Court, including violation of safe conducts, infringement of the rights of ambassadors, and piracy. Id. at 724-25, 124 S. Ct. at 2765. The Complaint does not begin to satisfy that exacting standard. Stripped of rhetoric and sensationalism, the Complaint presents nothing more than a commercial dispute, in which Defendants are alleged to have interfered with Plaintiffs efforts to invest in a telephone businessnot atrocities that violate the law of nations. See, e.g., RESTATEMENT (THIRD) OF FOREIGN RELATIONS LAW OF THE UNITED STATES (the Restatement), 702 (listing genocide and slavery as violations of customary international law); Sarei v. Rio Tinto, PLC, 671 F.3d 736, 769 (9th Cir. 2011) (holding genocide and war crimes violates customary international law); Doe v. Nestle, S.A., 748 F. Supp. 2d 1057, 1074-75 (C.D. Cal. 2010) (holding forced labor violates customary international law). In addition to rejecting commercial torts categorically as ATS claims, courts have consistently denied ATS claims on bribery. For example, in Mendonca v. Tidewater, Inc., the District Court for the Eastern District of Louisiana dismissed an ATS claim in which the plaintiff alleged he was forced to pay bribes by his employer. 159 F. Supp. 2d 299, 301 (E.D. La. 2001), affd, 33 F. Appx 705 (5th Cir. 2002). The plaintiff based his claim in part on the OECD7
The Organisation for Economic Co-operation and Development is referred to herein as the OECD.
13
Convention regarding bribery of foreign officials,8 one of the international conventions relied upon by Plaintiffs. See id.; Compl. 198(D). The court rejected the argument that the OECD Convention enjoyed the universal acceptance in the international community necessary to satisfy the high ATS standard and dismissed the case. See Mendonca, 159 F. Supp. 2d at 302; see also RSM Prod. Corp. v. Fridman, 643 F. Supp. 2d 382, 398 (S.D.N.Y. 2009), affd 387 F. Appx 72 (2d Cir. 2010) (questioning whether the OECD Convention, ratified by only 37 countries sufficiently demonstrates that bribery of a foreign public official is a violation of international law within the meaning of the [ATS]); Maugein v. Newmont Mining Corp., 298 F. Supp. 2d 1124, 1130 (D. Colo. 2004) (rejecting ATS claim based on allegations that defendant bribed Peruvian judges). Given that, in this Circuit, not even torture committed by a private actor falls within the jurisdictional ambit of the ATS, Ali Shafi v. Palestinian Auth., 642 F.3d 1088, 1096 (D.C. Cir. 2011), Plaintiffs bribery claims do not establish jurisdiction. More broadly, recognized authorities have not contended that bribery, corruption, influence peddling and other similar claims give rise to actionable claims under customary international law, or under U.S. domestic law. For instance, the Restatement identifies certain customary international law violations of human rights, such as genocide, slavery, torture, and prolonged arbitrary detention, because the prohibitions against them are universally accepted and their scope and content are generally agreed upon. See 702 and cmt. (a). By contrast, the Restatement does not refer to corruption, use of influence, or manipulation and only mentions bribery in a single comment referring to the Foreign Corrupt Practices Act (the FCPA), which does not include a private right of action. See 414 note 5; Scientific Drilling Intl, Inc v. Gyrodata Corp., 215 F.3d 1351, 1999 WL 674511, at *3 (Fed. Cir. 1999) (The district court
8
Organisation for Economic Co-operation and Development Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, Nov. 21, 1997, S. Treaty Doc. No. 105-43, 37 I.L.M. 1 (1998).
14
properly dismissed Gyrodatas FCPA counterclaim because there is no implied private right of action under the FCPA.); Lamb v. Phillip Morris, Inc., 915 F.2d 1024, 1027-30 (6th Cir. 1990) (affirming dismissal of claim on the basis that no private right of action is available under the [FCPA]); JS Serv. Ctr. Corp. v. Gen. Elec. Tech. Servs. Co., 937 F. Supp. 216, 227 (S.D.N.Y. 1996) (we conclude, as has every other court that has addressed this issue, that no private right of action exists under the FCPA.). Indeed, even the OECD, which sponsored the OECD Convention and inspired certain portions of the FCPA, acknowledges that [n]ot long ago, paying bribes . . . was just a part of business as usual and that many countries gave corporate tax deductions for these bribe payments. OECD Working Group on Bribery Annual Report 2010, 11, http://www.oecd.org/dataoecd/7/15/47628703.pdf (last visited May 22, 2012). These repeated refusals to recognize claims similar to those raised by Plaintiffs are consistent with the Supreme Courts warnings against using judicial creativity to seek out and define new and debatable violations of the law of nations. See Sosa, 542 U.S. at 728, 124 S. Ct. at 2763. This warning is particularly apropos in this case, where the hodgepodge of materials cited by Plaintiffs hardly reflects a universal consensus of a defined rule of law: None of the authorities cited have an historic lineage comparable to the 18thcentury paradigms identified in Sosa; instead, all but one of them were adopted recently, within the past 18 years. See Compl. 198. The treaties and conventions on which Plaintiffs rely are aspirational and consequently cannot form the basis of an ATS claim. See Sosa, 542 U.S. at 738, 124 S. Ct. at 2769 ([c]reating a private cause of action to further that aspiration would go beyond [the Supreme Courts] residual common law discretion). At least one federal court, for instance, has held that the four U.N. documents on which Plaintiffs rely (see Compl. 198(A, K, L, M)) are not proper sources of customary international law because [these documents] are merely aspirational and were never intended to be binding on member States of the United Nations. Flores v. S. Peru Copper Corp., 414 F.3d 233, 259 (2d Cir. 2003). Plaintiffs cited authorities are not universally or consistently enforced and therefore do not reflect universal norms of the law of nations. See Flores, 414
15
F.3d at 256 (a treaty will only constitute sufficient proof of a norm of customary international law if an overwhelming majority of States have ratified the treaty, and those States uniformly and consistently act in accordance with its principles.) (emphases in original). For instance, the OECD reported that almost half of countries which signed the OECD Convention have failed to implement and enforce its prohibitions, including Turkey, Plaintiffs home country.9 Finally, Congress refusal to create a private right of action for bribery counsels against inferring a private right of action in ATS cases where Congress has refused to do so in domestic legislation. See Sosa, 542 U.S. at 727, 124 S. Ct. at 2763 ([E]ven when Congress has made it clear by statute that a rule applies to purely domestic conduct, we are reluctant to infer intent to provide a private cause of action where the statute does not supply one expressly. While the absence of congressional action addressing private rights of action under an international norm is more equivocal than its failure to provide such a right when it creates a statute, the possible collateral consequences of making international rules privately actionable argue for judicial caution.). Congress has repeatedly refused, for instance, to include a private right of action for bribery in the FCPA both when enacting the FCPA in 1977 and again when amending the FCPA in 1998 to implement portions of the OECD Convention, which Plaintiffs rely upon here. See Compl. 198(D); 15 U.S.C. 78dd-1, 78dd-2; S. REP. NO. 105-277 (1998). When the U.S. ratified the OAS Convention in 2000 (Compl. 198(E)),10 Congress again did not create a private cause of action, noting that [t]here is an extensive network of laws already in place in the United States that criminalize a wide range of corrupt acts. Accordingly, the United States does not intend to enact new legislation. When the U.S. ratified the UN Convention six years
See Country reports on the implementation of the OECD Anti-Bribery Convention, http://www.oecd.org/document/24/0,3746,en_2649_37447_1933144_1_1_1_37447,00.html (last visited May 22, 2012).
10
Organization of American States, Inter-American Convention against Corruption, Mar. 29, 1996, S. Treaty Doc. No. 105-39, O.A.S.T.S. No. B-58, 35 I.L.M. 724 (1996).
16
later (Compl. 198(A)),11 it did so with the express reservation that [n]one of the provisions of the Convention creates a private right of action. See S. EXEC. REP. NO. 109-18, at 10. With respect to Plaintiffs other claims based on corruption, trading in influence, and manipulation, these claims are merely restatements of Plaintiffs bribery claim. Plaintiffs have made no effort to distinguish the acts underlying these claims from bribery, and rightly so, because there is no indication that they implicate any established norms of customary international law: no state or federal court has ever entertained a claim for a breach of customary international law based on any of these acts. To recognize these claims as a basis for ATS jurisdiction would be unprecedented and would unquestionably exceed the boundaries of the narrow class of international norms today. Sosa, 542 U.S. at 729, 124 S. Ct. at 2764.12 B. Plaintiffs Fail to State a Claim Based on a Treaty of the U.S. Plaintiffs also attempt to satisfy the ATS by basing jurisdiction on Defendants alleged violation of a U.S. treaty. Plaintiffs have attempted to make this argument by listing 17 documents, many of which are not treaties, that Defendants allegedly violated. See Compl. 198. None of these documents, however, can form the basis of Plaintiffs claims because Defendants are not parties to any of these treaties. Moreover, the treaties (i) are not selfexecuting and have not been implemented by U.S. legislation creating a private right of action,
11 12
United Nations Convention against Corruption, G.A. Res. 58/4, U.N. Doc. A/RES/58/4 (Oct. 21, 2003).
MTN does not understand Plaintiffs to be claiming that they were harmed by illicit trafficking of defense equipment and nuclear proliferation, Compl. 198, because these are not recognized claims under the ATS. [I]llicit trafficking of defense equipment cannot be a basis for an ATS Claim because of the absence of common international standards on the import, export and transfer of conventional arms. Towards an Arms Trade Treaty: Establishing Common International Standards for the Import, Export and Transfer of Conventional Arms, G.A. Res. 61/89, U.N. Doc. A/RES/61/89 at 1 (Dec. 18, 2006). The same is true for nuclear proliferation. See Advisory Opinion on the Legality of the Threat of Use of Nuclear Weapons, 1996 I.C.J. 226 (holding that [t]here is in neither customary nor conventional international law any comprehensive and universal prohibition of the threat or use of nuclear weapons.). Moreover, Plaintiffs allegation that MTN affected Iranian nuclear development by convincing South Africa to abstain from a single vote of the IAEA is utterly implausible and cannot give rise to subject matter jurisdiction under Bell Atl.v. Twombly. 550 U.S. 544, 547, 127 S. Ct. 1955, 1960 (2007) (dismissing complaint because plaintiffs did not nudge[] their claims across the line from conceivable to plausible).
17
(ii) do not outlaw any of the acts alleged by Plaintiffs, (iii) in many cases, are not treaties of the U.S., and (iv) do not establish civil tort claims among private parties. First, the treaties listed by Plaintiffs cannot serve as a jurisdictional basis for Plaintiffs claims because they are non-self-executing and do not establish a private right of action absent implementing legislation. See Sosa, 542 U.S. at 734-35, 124 S. Ct. at 2767 (non-self-executing treaties do not create private rights of action). Plaintiffs, therefore, lack standing to assert tort claims under these treaties because treaties are generally designed to protect the sovereign interests of nations, and it is up to the offended nations to determine whether a violation . . . occurred and requires redress. United States v. Zabaneh, 837 F.2d 1249, 1261 (5th Cir. 1988).13 None of the treaties listed by Plaintiffs creates a private right of action. Indeed, two of them expressly decline to do so. Thus, when the U.S. ratified the UN Convention (see Compl. 165(A)), it expressly declare[d] that the provisions of the Convention . . . are non-selfexecuting. None of the provisions . . . creates a private right of action. S. EXEC. REP. NO. 10918, at 10. Moreover, the Agreement Concerning Cooperation on Defense and Trade Controls (see Compl. 198(Q)) explicitly states that THIS AGREEMENT IS NOT INTENDED TO CREATE, NOR DOES IT CREATE, ANY RIGHTS FOR . . . ANY OTHER THIRD PARTIES. See Agreement Concerning Cooperation on Defense and Trade Controls, U.S.South Africa, Art. III, dated January 24, 1997, T.I.A.S. 12825 (capital letters in original). Moreover, none of the treaties cited by Plaintiffs have been implemented by legislation establishing a private right of action. In fact, quite the opposite is true. Plaintiffs point, for instance, to the OECD Convention and the FCPA, but, as discussed above, Congress repeatedly
13
Plaintiffs would lack standing based on these treaties even if they were to argue that a particular treaty intended to convey benefits to them, because individual rights are only derivative through the states parties to the treaty. See, e.g., United States ex. rel. Lujan v. Gengler, 510 F.2d 62, 67 (2d Cir. 1975). ([i]nternational agreements, even those directly benefiting private persons, generally do not create private rights or provide for a private cause of action in domestic courts.); Medellin v. Texas, 552 U.S. 491, 506 n.3, 128 S. Ct. 1346, 1357 n.3 (2008).
18
refused to include a private right of action in the FCPA when effecting it in 1977, again when amending it in 1988 to implement portions of the OECD Convention, and again when the U.S. ratified the U.N. Convention in 2006. See pages 15-16, infra. 14 Because Congress has refused to provide a private right of action for bribery, corruption, manipulation, or trading in influence under these treaties, establishing a judicially created private right of action under the OECD Convention would contradict Congress intent and would have the perverse result of giving aliens a remedy for bribery that is unavailable to American citizens under domestic legislation. Second, even if Plaintiffs could bring a claim under one or more of the treaties, their failure to identify any specific treaty provision that allegedly confers a private right of action is fatal to their claim. For example, in Helms v. Secretary of the Treasury, this Court affirmed dismissal of a claim for breach of the U.N. Charter in part because the plaintiffs in that action failed to allege that any clause of the U.N. Charter established a private right action. See 721 F. Supp. 1354, 1359 (D.D.C. 1989). Plaintiffs in this case do no better. Rather than identify a single clause in any of the treaties or other documents listed in the Complaint as giving rise to a private right of action, Plaintiffs merely rely on the length of their list of materials to imply that they have a valid claim. Plaintiffs do not cite any provision of the treaties or other materials that MTN allegedly breached because they cannot: rather than outlaw bribery or the other acts enumerated by Plaintiffs, the treaties and other materials at most create obligations for State Parties to effect domestic legislation outlawing certain conduct. See RSM, 643 F. Supp. 2d at 398 (denying ATS claim alleging violation of OECD Convention because it merely required State Parties to pass criminal legislation). For example, Article 15 of the United Nations Protocol against the Illicit
14
B-58 Inter-American Convention Against Corruption, http://www.oas.org/juridico/english/Sigs/b-58.html (last visited June 4, 2012).
19
Manufacturing of and Trafficking in Firearms (the UNFP) (see Compl. 198(M)) requires each State Party to adopt such legislative and other measures as may be necessary to make firearms trafficking a criminal offense. Similarly, the conventions dealing with corruption do not outlaw bribery themselves, but require State Parties to adopt legislation outlawing bribery. See UN Convention, Art. 15; United Nations Convention against Transnational Organized Crime, Art. 8, Nov. 15, 2000, T.I.A.S. 13127, S. Treaty Doc. No. 108-16, 209 U.N.T.S. 2225 (requiring criminalization of corruption); African Union Convention on Preventing and Combating Corruption, July 11, 2003, 43 I.L.M. 5 (the AUC), Art. 5; Southern African Development Community Protocol Against Corruption (Aug. 14, 2001) (the SADCP), Art. 4. Third, Plaintiffs cannot base their claim on the treaties they cite to which the United States is not a party. See 28 U.S.C. 1350 (granting subject matter jurisdiction over claims based on a treaty of the United States). Indeed, Plaintiffs claims find no support in many of the treaties they cite because the United States is not a party to them.15 Fourth, even where a treaty is self-executing and confers individual rights, Plaintiffs have still not established that a violation of any of the treaties listed in their Complaint constitutes a tort, as required by the ATS. At least one other Circuit Court of Appeals has held that when the tortious nature of an ATS claim is in doubt, the ATS cannot support jurisdiction. See Jogi v.
15
These non-U.S. treaties include: the AUC, the SADCP, the Council of Europe Civil Law Convention on Corruption, Nov. 4, 1999, C.E.T.S. No. 174 (the European Civil Law Convention), the Council of Europe Criminal Law Convention on Corruption, Jan. 29, 1999, Europ. C.E.T.S. No. 173 (signed but not ratified by the U.S.), Anti-Corruption Action Plan (Asian Development Bank and Organization for Economic Co-operation and Development), Nov. 30, 2001, available at: www.oecd.org/dataoecd/38/24/35021642.pdf, the Strengthening Governance, Tackling Corruption: The World Banks Updated Strategy and Implementation Plan, (World Bank Group Engagement on Governance and Anticorruption Jan. 17, 2012) available at: siteresources.worldbank.org/PUBLICSECTORANDGOVERNANCE/ Resources/285741132681618754/Strengthening GovTacklingCorruption1-17-12.pdf, or the United Nations Global Compact, Principle 10 (June 24, 2004), available at: http://unglobalcompact.org/AboutTheGC/TheTenPrinciples/principle10.html (some of which are not treaties).
20
Voges, 480 F.3d 822, 824 (7th Cir. 2007) (denying ATS jurisdiction for a claim under a selfexecuting treaty since it is unclear whether the treaty violation . . . amounts to a tort.). Because Plaintiffs have failed to identify any treaty that was actually violated, this Court lacks subject matter jurisdiction under the ATS, and this case should be dismissed. C. Plaintiffs Fail to State a Claim that Defendants Aided and Abetted a Treaty Violation Plaintiffs aiding and abetting claim alleging violations by South Africa and Iran of various treaties, Compl. 207-08, also fails. For the reasons stated in Section I.B above, Plaintiffs fail to show that Defendants violated a U.S. treaty or that Defendants aided and abetted any such violation by another. Moreover, Plaintiffs claim that Defendants tortiously interfere[d] with Plaintiffs receipt of the License falls far short of alleging, as they must under the ATS, that Defendants committed a tort in violation of . . . a treaty of the United States. 28. U.S.C. 1350; see also Xuncax v. Gramajo, 886 F. Supp. 162 (D. Mass. 1995) ([O]nly those treaty provisions that would actually give rise to a tort action by reason of their violation are implicated by the ATS). Indeed, Plaintiffs have not pointed to a single provision of any treaty addressing tortious interference with contract. Therefore, Count II must be dismissed. D. The Court Lacks Supplemental Jurisdiction over Plaintiffs State Law Claims Because Plaintiffs have failed to establish that the ATSPlaintiffs sole basis for federal jurisdictionallows this Court to entertain their federal claims, their state claims should be dismissed as well. Fernandez v. Jones, 653 F. Supp. 2d 22, 32 (D.D.C. 2009) (internal citation omitted) (dismissing state law claims where federal claims supporting supplemental jurisdiction are dismissed before trial); see also 28 U.S.C. 1367(a). Thus, this Court lacks jurisdiction over Plaintiffs non-federal claims, and Counts III through VIII should be dismissed.
21
Even if this Court could exercise supplemental jurisdiction over Plaintiffs non-federal claims, it should decline to do so in its discretion. See City of Chicago v. Intl College of Surgeons, 522 U.S. 156, 172, 118 S. Ct. 523, 533 (1997) (noting that supplemental jurisdiction is a doctrine of discretion, not of plaintiffs right.). Plaintiffs non-federal claims present novel and complex issues of foreign law16 and are based on events that allegedly occurred outside of the U.S. with no connection to D.C. See 28 U.S.C. 1367(c) (district courts may decline to exercise supplemental jurisdiction over a claim if, inter alia, the claim raises a novel or complex issue of State law or for other compelling reasons); see also Ali Shafi, 642 F.3d at 1097 (district court did not abuse discretion by declining to hear claims that arose from events in another nation where [a]ll parties are citizens of other nations and have no connection with the United States or specifically, with the District of Columbia). Accordingly, this Court should decline to exercise supplemental jurisdiction over all of Plaintiffs non-federal claims. II. THE ICC ARBITRATION AWARD BARS PLAINTIFFS PRINCIPAL CLAIMS Plaintiffs have already tried this case and lost. They cannot do so again. The Principal Claims must be dismissed on the basis of res judicata and collateral estoppel because the Award has resolved the factual and legal issues that are dispositive of the Principal Claims.17 A. The Findings in the Award are Dispositive of Plaintiffs Principal Claims
16
South African or Iranian law would most likely apply to the claims in Counts III through VI. See Fed. R. Civ. P. 44.1; Doe VIII v. Exxon Mobil Corp, 654 F.3d at 70 (holding, in an ATS case, that Indonesian law would apply to the plaintiffs non-federal tort claims because all conduct causing injury occurred in Indonesia).
22
23
24
25
B.
The Award Bars Plaintiffs Principal Claims Under the Doctrine of Res Judicata
26
27
C.
Plaintiffs Are Collaterally Estopped from Bringing the Principal Claims
28
29
D.
The Award Bars Plaintiffs Principal Claims Under the Doctrine of Comity
III.
THE COURT LACKS PERSONAL JURISDICTION OVER DEFENDANTS The Court lacks personal jurisdiction over Defendants MTN Group, a South African
corporation based in Johannesburg (Compl. 18), and MTNI, a corporation organized under the laws of Mauritius, an island nation in the Indian Ocean (id. 21), because Plaintiffs failed to plead facts sufficient to demonstrate that jurisdiction over Defendants is proper under the applicable local long-arm statute or federal law and that jurisdiction accord[s] with the demands of due process. Orellana v. Croplife Intl, 740 F. Supp. 2d 33, 38 (D.D.C. 2010); see also Moore v. Motz, 437 F. Supp. 2d 88, 92 (D.D.C. 2006) (basing personal jurisdiction over foreign defendants on the D.C. long-arm statute in federal question cases). Although Plaintiffs claim that the D.C. long-arm statute permits this Court to exercise both specific and general jurisdiction over Defendants, see Orellana, 740 F. Supp. 2d at 38 (D.C. law applies specific and general jurisdiction to non-resident defendants), they have failed to allege specific facts on which personal jurisdiction is based. Buesgens v. Brown, 567 F. Supp. 2d 26, 31 (D.D.C.
30
2008). Instead, they have relied on conclusory allegations that cannot support jurisdiction. See id.; United States v. Phillip Morris Inc., 116 F. Supp. 2d 116, 121 (D.C. 2000) (plaintiffs must make a prima facie showing of pertinent jurisdictional facts) (emphasis added). Accordingly, because this Court lacks personal jurisdiction over Defendants under D.C. lawand consequently under Federal Rule 4(k)(1) and (2)this case should be dismissed. A. The Court Lacks General Jurisdiction under D.C. and Federal Law This Court may not exercise jurisdiction over Defendants pursuant to D.C. Code 13334(a) (the General Jurisdiction Statute) or Federal Rule 4(k)(1)(A) (see Compl. 26) because Defendants are not doing business in D.C.and Plaintiffs do not allege otherwise. AGS Intl Servs. S.A. v. Newmont USA Ltd., 346 F. Supp. 2d 64, 74 (D.D.C. 2004). The doing business test is coextensive with the due process requirements of the Constitution and requires an examination of the frequency and volume of the [defendants] transactions with [D.C.] residents. Id. Plaintiffs misguidedly attempt to meet this test by improperly relying not on Defendants contacts with D.C., but on those of MTN Groups subsidiaries to imply that MTN Group and MTNI are doing business in D.C. See Compl. 33-34. These contacts, however, not only belong to the wrong parties but also are so insignificant that they cannot demonstrate that Defendants sustained a continuing corporate presence in [D.C.] with the aim of advancing [their] objectives (Khatib v. Alliance Bankshares Corp., Civ. Action No. 12-00056 (CKK), 2012 WL 668594, at*6 (D.D.C. Mar. 1, 2012), quoting AMF Intl Corp. v. Ralston Purina Co., 482 A.2d 849, 851 (D.C. 1981)) or that the exercise of personal jurisdiction would comply with due process. 1. Plaintiffs Cannot Rely on Alleged Contacts of MTN Groups Subsidiaries
The Complaint improperly groups MTN Group with all of its worldwide subsidiaries (only one of which is a named defendant) as MTN and alleges that the jurisdictional contacts 31
of each MTN company should be attributed to MTN Group and the MTN organization as a whole. Compl. 34. However, Plaintiffs cannot rely on these contacts because they have not show[n] that [the] subsidiaries are the alter ego of [MTN Group]. AGS, 346 F. Supp. 2d at 84. Plaintiffs also cannot rely on their alter ego theory because they have not alleged (1) a unity of interest and ownership between MTN Group and its subsidiaries and (2) that treating the subsidiarys wrongful acts as those of the subsidiary alone would be inequitable. See Mazza v. Verizon Wash. D.C., Inc., Case No. 11-719 (EGS), 2012 U.S. District LEXIS 43314, at *32-33 (D.D.C. Mar. 29, 2012) (listing elements of alter ego test). Instead, Plaintiffs merely parrot the test, declaring that the MTN companieshave unity of ownership and interest and are alteregos of one another. Compl. 33. Such conclusory allegations cannot form a basis for personal jurisdiction.28 See Mazza, 2012 U.S. Dist. LEXIS 43314 at *34 (conclusory statements do not demonstrate . . . active and substantial control over the other [affiliated party] defendants). Likewise, Plaintiffs have also failed to plead any facts that show that respecting the boundaries between MTN Group and its affiliates would sanction fraud or promote injustice. Id. at 33. 2. MTNs Alleged Contacts Do Not Establish General Personal Jurisdiction
Plaintiffs have failed to plead facts from which this Court could infer that MTN Group had sufficient contacts with D.C. to be doing business.29 In fact, what Plaintiffs fail to plead is
28
For example, Plaintiffs offer no specific allegations concerning the nature of the corporate ownership and control; failure to maintain corporate minutes or records; failure to maintain corporate formalities; commingling of funds and assets; diversion of one corporations funds to the others uses; and use of the same office or business location. AGS, 346 F. Supp. 2d at 90. Instead, Plaintiffs have effectively asked this Court to assume that corporate subsidiaries are automatically alter egos of their parents (see Compl. 27), which this Court has already refused to do in other circumstances. See AGS, 346 F. Supp. 2d. at 92.
29
Plaintiffs alternative argument that this Court may exercise personal jurisdiction over MTN based on its aggregate contacts with the [U.S.] as a whole pursuant to [Federal Rule] 4(k)(2) also fails because the exercise of jurisdiction over MTN would not comply with due process. See infra at Section III.A.4; Son v. Kim, Civil Action No. 04-2318 (JR), 2007 U.S. Dist. LEXIS 22403,at*7 (D.D.C. March 28, 2007) (The due process analysis is no different under Rule 4(k)(2) than under the D.C. long-arm statute.).
32
more enlightening than what they do plead: Plaintiffs do not plead that Defendants have offices, assets, personnel, or physical business presence in D.C. In other words, Defendants are in no sense at home in the forum. See id. at *34 n. 13. Instead, Plaintiffs plead four inconsequential contacts with D.C.: (i) MTN offers top-up services at 7-Eleven stores (including in D.C.); (ii) customers can bring airtime vouchers to U.S. locations (including D.C.); (iii) MTN contracts with a company with administrative headquarters in D.C.; and (iv) an MTN director resided in D.C. See Compl. 43-44, 50, and 52. To overcome their inability to plead facts showing that Defendants were doing business in D.C., Plaintiffs improperly allege a series of contacts between MTN Groups subsidiaries and the U.S. generally. None of these allegations, however, are sufficient to confer jurisdiction. a. Agreements with U.S. Companies Do Not Create General Jurisdiction
Plaintiffs allegations that (i) two MTN subsidiaries have roaming agreements with U.S. service providers; (ii) MTN does business with U.S. companies; and (iii) MTN receives financing from U.S. lenders do not establish general jurisdiction. See Compl. 35-40, 48-51. First, a roaming agreement with a U.S. carrier30 cannot establish general jurisdiction, even where additional jurisdictional facts are alleged. See Tech. Patents, LLC v. Deutsche Telekom AG, 573 F. Supp. 2d 903, 913-14 (D. Md. 2008) (basing jurisdiction on roaming agreements is inconsistent with due process); see also Thomas v. Centennial Commcns Corp., No. 05-0495, 2006 U.S. Dist. LEXIS 92555, at *10 (W.D.N.C. Dec. 19, 2006). Second, MTNs alleged contracts with U.S. companies do not establish general jurisdiction because the contracts concerned services outside of the U.S. and most of the U.S. companies were not in D.C. See Allen v. Russian Fedn, 522 F. Supp. 2d. 167, 196 (D.D.C.
30
Although roaming agreements allow customers of foreign telecommunications service providers to use their phones on the domestic providers network, they do not establish that the foreign provider has any U.S. presence. See New Comm Wireless Servs., Inc. v. SprintCom Inc., 287 F.3d 1, 4 (1st Cir. 2002).
33
2007) (denying jurisdiction where agreements do not relate to U.S.). Indeed, the location of the contracting parties is less important than where the prior negotiations and contemplated future consequences of the contract take placein this case, abroad. See Creighton Ltd. v. Govt of State of Qatar, 181 F.3d 118, 127-28 (D.C. Cir. 1999) (citation omitted) (no jurisdiction where contacts with forum were necessitated by [plaintiffs] decision to base itself there). Third, financing arrangements with U.S. lenders do not establish general jurisdiction. See, e.g., Allen, 522 F. Supp. 2d at 195-96 (Russian company issuing bonds through U.S. bank lacked continuous and systematic contacts); Siam Kraft Paper Co. v. Parsons & Whittemore, Inc., 400 F. Supp. 810, 812 (D.D.C. 1975) (securing a loan does not confer jurisdiction on the local courts). Notably, Plaintiffs do not allege where the negotiations took place, where the loans were serviced, which MTN entities entered into the arrangements, or any other facts to show contacts with D.C. See Creighton Ltd., 181 F.3d at 127-28 (considering prior negotiations and contemplated future consequences, along with the terms of the contract and the parties actual course of dealing in jurisdictional analysis). b. Maintenance of Website Does Not Create General Jurisdiction
Plaintiffs allegation that Defendants maintained a website accessible in the U.S. does not confer general jurisdiction because Plaintiffs fail to allege that people in the U.S. use the website in a continuous and systematic way. See Compl. 41; FC Inv. Grp. LLC v. IFX Mkts., Ltd., 529 F.3d 1087, 1092-93 (D.C. Cir. 2008) (focusing on whether D.C. residents actually use website, rather than simply have access to it). Plaintiffs have made no allegations whatsoever regarding the use of the website by D.C. residents. c. U.S. Sales Do Not Create General Jurisdiction
Plaintiffs allegations that MTN offers top-up services, permitting customers in the U.S. to purchase additional airtime, and that MTN sells calling cards in the U.S. also cannot 34
confer general jurisdiction. Plaintiffs fail to provide any detail concerning the MTN entities engaged in these sales, the volume of sales, and the quantity of contacts with D.C. residents, as required for the exercise of general jurisdiction. See AGS, 346 F. Supp. 2d at 74 (test for general jurisdiction requires an examination of the frequency and volume of the [defendants] transactions with [D.C.] residents) (citations omitted); see also Allen, 522 F. Supp. 2d. at 195 (mere shipment of products to the [U.S.] is not a substantial contact with the forum). d. MTN Groups Sale of ADRs Does Not Create Jurisdiction
Offering American Depository Receipts (ADRs) to U.S. investors (Compl. 47) cannot, by itself, establish general jurisdiction. See Allen, 522 F. Supp. 2d at 195 (holding that ADRs alone cannot establish jurisdiction, but may be considered with other contacts). Many courts have refused to consider ADRs in their jurisdictional analysis, and some have flatly rejected the notion that ADRs constitute doing business within the U.S. See Whiteman v. Fed. Republic of Austria, No. 00 Civ. 8006 (SWK), 2002 WL 31368236, at *6 (S.D.N.Y. Oct. 21, 2002); see also Telcordia Techs. Inc. v. Telkom SA, Ltd. No. 02-1990(JR), 2003 U.S. Dist. LEXIS 23726, at *11-12 (D.D.C. July 20,2003) (listing stock on U.S. exchange does not establish jurisdiction). e. U.S. Residency of Directors Does Create Jurisdiction
Finally, Plaintiffs allegations that MTN directors reside in or near D.C. (Compl. 5253) do not show the continuous and systematic contacts required for general jurisdiction. See Palmer v. Kawaguchi Iron Works, Ltd., 644 F. Supp. 327, 331 (N.D. Ill. 1986) (citing cases). To the contrary, the mere presence of an employee within the forum state [is] insufficient to confer general personal jurisdiction over an out-of-state corporate defendant. Zibiz Corp. v. FCN Tech. Solutions, 777 F. Supp. 2d 408, 419 (E.D.N.Y. 2011) (citing cases).
35
3.
Plaintiffs Have Not Alleged Personal Jurisdiction Over MTNI
The Complaint should be dismissed as to MTNI because Plaintiffs have provided no jurisdictional allegations against MTNI whatsoever. Instead, Plaintiffs apparently rely on their general allegations against the MTN Group and its subsidiaries. Such allegations cannot confer general jurisdiction over MTNI because Plaintiffs cannot aggregate factual allegations concerning multiple defendants in order to demonstrate personal jurisdiction over any individual defendant. Burman v. Phoenix Worldwide Indus., 437 F. Supp. 2d 142, 147 (D.D.C. 2006) (citation omitted); see also Rush v. Savchuk, 444 U.S. 320, 331-32, 100 S. Ct. 517, 579 (1980) (considering the defending parties together and aggregating their forum contacts to establish jurisdiction is plainly unconstitutional). Accordingly, the Court should dismiss the Complaint as to MTNI because Plaintiffs have not demonstrated that this Court has personal jurisdiction over it. See Orellana, 740 F. Supp. 2d at 39 (no jurisdiction where plaintiffs point to theories that rely exclusively on [defendants] relationship with [related companies]). 4. Exercising Jurisdiction Would Be Inconsistent with Due Process
Asserting personal jurisdiction over Defendants would be unreasonable and inconsistent with due process. Due process requires that Defendants must have [had] certain minimum contacts with [D.C.] such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice and such that Defendants should reasonably anticipate being haled into court in D.C. Creighton Ltd., 181 F.3d at 127 (internal citations omitted). Plaintiffs have not established either requirement for due process. First, as demonstrated above, Plaintiffs have not established that Defendants had minimum contacts with D.C. or purposefully availed themselves of U.S. laws. Second, maintenance of this suit would offend traditional notions of fair play and substantial justice because Defendants are unreasonably being asked to defend themselves in a court half way around the world, operating under foreign 36
law, to defend themselves against claims by foreign citizens that arise out of events in South Africa and Iran. See Asahi Metal Indus. Co. v. Super. Ct. of Calif. v. Solano Cnty, 480 U.S. 102, 113-14, 107 S. Ct. 1026, 1033 (1987) (The unique burdens placed upon one who must defend oneself in a foreign legal system should have significant weight in assessing the reasonableness of stretching the long arm of personal jurisdiction over national borders.); see also Bancoult v. McNamara, 214 F.R.D. 5, 13 (D.D.C. 2003) ([T]he severe burden of litigating in a foreign legal system that would be shouldered by [defendant]a Mauritian company thousands of miles from [D.C.]deserves significant weight in determining whether personal jurisdiction applies.). Because Plaintiffs have failed to establish either of the due process requirements, they are also unable to establish jurisdiction under Federal Rule 4(k)(2). Personal jurisdiction under this rule (which applies only to Plaintiffs federal claims), is only appropriate if it is consistent with the United States Constitution and laws. See id. Where, as here, the exercise of jurisdiction does not comply with due process, Federal Rule 4(k)(2) cannot confer jurisdiction. See Son v. Kim, No. 05-2318(JR), 2007 U.S. Dist. LEXIS 22403, at *7 (D.D.C. Mar. 2,2007) (The due process analysis is no different under Rule 4(k)(2) than under the D.C. long-arm statute.). B. The Court Lacks Specific Jurisdiction under D.C. Law Although Plaintiffs do not specify which subsection(s) of the D.C. long-arm statute (D.C. Code 13-423) they rely on to establish specific jurisdiction over Defendants (see Compl. 25), their Complaint fails to make the requisite prima facie showing of pertinent jurisdictional facts to support specific jurisdiction under any of them or to establish that the exercise of that jurisdiction would comport with due process. See Phillip Morris Inc., 116 F. Supp. 2d at 121. Plaintiffs do not allege sufficient to establish jurisdiction under D.C. Code Sections 13423(a)(1), (3), or (4), which are the only potentially applicable subsections of the statute. These sections provide that a D.C. court may exercise personal jurisdiction as to a claim arising from 37
the persons transacting any business in [D.C.] D.C. Code 13-423(a)(1), causing tortious injury in [D.C.] by an act or omission in [D.C.] (D.C. Code 13-423(a)(3)), and/or causing tortious injury in [D.C.] by an act or omission outside [D.C.] if he regularly does or solicits business, engages in any other persistent course of conduct, or derives substantial revenue from goods used or consumed, or services rendered, in [D.C.]. (D.C. Code 13-423(a)(4)). First, Plaintiffs cannot establish personal jurisdiction under 13-423(a)(1)which could only apply to the breach of contract claim (Count VII) because that is the only transaction that allegedly took place in D.C. To establish jurisdiction under this subsection, Plaintiffs would have to show that (1) [each of the Defendants] transacted business in [D.C.]; (2) the claim arose from the business transacted in [D.C.]; (3) [each of the Defendants] had minimum contacts with [D.C.]; and (4) the Courts exercise of personal jurisdiction would not offend traditional notions of fair play and substantial justice. Natl Resident Matching Program v. Elec. Residency LLC, 720 F. Supp. 2d 92, 98 (D.D.C. 2010). Plaintiffs have not demonstrated, however, that Defendants have minimum contacts with D.C. or that the exercise of personal jurisdiction would not offend traditional notions of fair play and substantial justice. Id.; see also AGS, 346 F. Supp. 2d at 78 (A corporation transacts business within [D.C.] only if the business is of a substantial character.). Consequently, specific personal jurisdiction is not appropriate. Second, Plaintiffs cannot rely on 13-423(a)(3) because this section would only confer jurisdiction if Defendants (1) caused a tortious injury in [D.C.] by (2) an act or omission in [D.C.]. Lapointe v. Note, Civ. Action No. 03-2128 (RBW), 2004 U.S. Dist. LEXIS 27691, at *18 (D.D.C. Nov. 9, 2004). Here, Plaintiffs conclusory allegations that Defendants caused Plaintiffs damage by impacting [Plaintiffs] traded share price (Compl. 258) and causing irreparable harm to [Plaintiffs] reputation (Compl. 266) are insufficient to demonstrate a
38
tortious injury in D.C. See Freiman v. Lazur, 925 F. Supp. 14, 23 n.1 (D.D.C. 1996) (allegation of reputational injury . . . in many forums, including [D.C.] failed to show tortious injury in D.C. under 13-423(a)(3)). Moreover, Plaintiffs have not pled that the act forming the basis for Plaintiffs breach of contract and defamation claimspublishing the March 12, 2012 press releaseoccurred in D.C. See Lapointe, 2004 U.S. Dist. LEXIS 27691, at *21 (holding that publication of alleged libelous article occurred outside D.C., notwithstanding articles distribution in D.C.). Third, Plaintiffs cannot rely on D.C. Code 13-423(a)(4) in part because Plaintiffs have not pled injury in D.C., a required element under the statute. See Kline v. Williams, Civil Action 05-01102 (HHK), 2012 WL 1431377, *9 (D.D.C. Mar. 23, 2006) (no jurisdiction where plaintiffs failed to plead that they suffered an injury in D.C. that they could not have suffered or did not suffer in any state in the nation where someone may have read the message.). Additionally, Plaintiffs failed to plead that Defendants regularly conduct or solicit business in D.C., engage in persistent conduct in D.C., or derive substantial revenue from goods used or consumed or services rendered in D.C., all of which are required to establish jurisdiction under this section. See McFarlane v. Esq. Magazine, 74 F.3d 1296, 1300 (D.C. Cir. 1996) ([W]riting an article for a publication that is circulated throughout the nation . . . hardly constitutes doing or soliciting business, or engaging in a persistent course of conduct, within [D.C.].) Even assuming arguendo that Plaintiffs have demonstrated that this Court could exercise specific personal jurisdiction over Defendants with respect to the breach of contract and defamation claims, this Court still could not exercise jurisdiction with respect to Plaintiffs other claims. See Kroger v. Legalbill.com LLC, Civ. No. 04-2189 (ESH), 2005 WL 4908968, at *7 n.6 (D.D.C. Apr. 7, 2005). As this Court has held, each claim must be analyzed separately, and a
39
finding that the Court may exercise specific personal jurisdiction over a defendant as to one claim does not mean that the Court can exercise specific personal jurisdiction over that defendant as to all claims. See id. Thus, even if the Court were to conclude that it has specific personal jurisdiction over Defendants with respect to the breach of contract and defamation claims, it would not have personal jurisdiction with respect to Plaintiffs other causes of action, which have no arguable connection to D.C. or the U.S. Finally, as discussed above, even if Plaintiffs properly pled specific jurisdiction under 13-423(a), the Court would still be unable to exercise personal jurisdiction over Defendants because to do so would violate due process. IV. THE COURT SHOULD DECLINE TO EXERCISE JURISDICTION Even if the Court were to conclude that the ATS provides subject matter jurisdiction, that Plaintiffs claims are not barred by res judicata or collateral estoppel, and that this Court has personal jurisdiction over Defendants, the Court should nevertheless decline to exercise jurisdiction and instead should dismiss the Complaint under the doctrine of forum non conveniens or under the act of state doctrine.31 A. The Complaint Should Be Dismissed under the Doctrine of Forum Non Conveniens The Complaint should be dismissed on the ground of forum non conveniens because South Africa is an adequate alternative forum and the private and public interest factors favor dismissal. See MBI Grp., Inc. v. Credit Foncier du Cameroun, 558 F. Supp. 2d 21, 26-27 (D.D.C. 2008), affd, 616 F.3d 568 (D.C. Cir. 2010) (identifying the test for forum non conveniens).
31
Plaintiffs claims may also be precluded under the political question doctrine. As the United States recently argued before the Supreme Court, principles of abstention should be applied more liberally in ATS cases than in ordinary cases. See Supplemental Brief for the United States as Amicus Curiae in Partial Support of Affirmance at 22-26, Kiobel v. Royal Dutch Petroleum Co., No. 10-1491, 2012 WL 2161290, at *22-26 (June 11, 2012).
40
Here, South Africa is an adequate alternative forum. See Declaration of Justice Johann Kriegler dated May 30, 2012 (Kriegler Decl.) 8; Estate of Thomson v. Toyota Motor Corp. Worldwide, 545 F.3d 357, 367 (6th Cir. 2008) (The district court was correct in determining that South Africa is the most convenient and proper forum.); Omollo v. Citibank, N.A., No. 07 Civ. 9259 (SAS), 2008 WL 1966721, at *5 (S.D.N.Y. May 6, 2008) (South Africa is an available alternative forum.). Both Plaintiffs and Defendants agree that MTN Group is a resident of South Africa and is amenable to process there. See Coleman Decl. Exh. I (Plaintiffs attorney publicly stated that [t]here would be of course jurisdiction available in the South African courts); Kriegler Decl. 2.4, 2.5, 4.20, 4.23.32 The private factors weigh overwhelmingly in favor of South Africa as an alternative forum. First, because Plaintiffs are citizens and residents of foreign states, their choice of forum is not entitled to deference. See Irwin v. World Wildlife Fund, Inc., 448 F. Supp. 2d 29, 33 (D.D.C. 2006). Second, importing witnesses and other evidence from South Africa and Iran where all of the events in the Complaint took placewould be unduly burdensome and expensive. See Estate of Thomson, 545 F.3d at 367 (dismissing claim in part because procuring South African evidence and witnesses was prohibitively expensive.). Almost none of the evidence relating to this case is in the U.S.: most of the potential witnesses and evidence are located abroad, outside the Courts subpoena power. In fact, 19 of the 23 individuals identified in the Cast of Characters annexed to the Complaint are not within the control of the parties and
32
The Complaint should also be dismissed because Plaintiffs have failed to exhaust domestic remedies available to them in South Africa. See Sosa, 542 U.S. at 733 n.21, 124 S. Ct. at 2766 (failure to exhaust domestic and perhaps international remedies [may] limit[] the availability of relief . . . for violations of customary international law); Sarei v. Rio Tinto PLC, 550 F.3d 822, 829-30 (9th Cir. 2008) (en banc). This is an especially appropriate case for requiring exhaustion because South Africa is a country where remedies are available and would not be futile. See Doe VIII, 654 F.3d at 27; Kriegler Decl. 5-6.
41
cannot reasonably be expected to testify.33 See Dtex, LLC v. BBVA Bancomer, S.A., 512 F. Supp. 2d 1012, 1025 (S.D. Tex. 2007) (granting motion to dismiss where [m]ost of these witnesses are Mexican citizens and are not parties or employees of the parties.). The public factors also weigh in favor of dismissal. First, the administrative difficulties of trying a case thousands of miles away from the majority of witnesses and the evidence is obvious. Irwin, 448 F. Supp. 2d at 35 (internal citation omitted). Second, the Complaint alleges bribery at the highest levels of the South African government; thus South Africa has a strong interest in the resolution of South African legal claims in its own courts. Omollo, 2008 WL 1966721, at *6; Estate of Thomson, 545 F.3d at 368 (dismissing claim on forum non conveniens because South Africa had greater interest in outcome than U.S.). Third, U.S. courts do not have an interest in this case because MTN Group is a resident of South Africa and many of the events alleged in the Complaint took place there. See id. Finally, dismissal will relieve the Court and jurors from the burden of trying a case that has no local connection or interest. See MBI, 616 F.3d at 576.34 B. The Act of State Doctrine Bars This Action The Complaint should be dismissed under the act of state doctrine because Plaintiffs are asking this Court to: (1) question Iranian legislation regulating the award of the License; (2) find that the Iranian and South African governments participat[ed] in bribery, trading in influence, attempts to procure illicit arms, and trading in the IAEA vote; and (3) declare that such conduct
33
This Court cannot compel the attendance of witnesses (including foreign government officials) located in Iran or South Africa. By contrast, witnesses in South Africa are subject to compulsory process for cases based in South Africa. See Kriegler Decl. at 4.11. The expense of producing these witnesses in South Africa would also be reasonable compared to the cost of travel to the United States. See BBC Chartering & Logistic GmbH & Co.K.G. v. Siemens Wind Power A/S, 546 F. Supp. 2d 437, 447 (S.D. Tex. 2008) (Transporting [Belgian, Danish, and German] witnesses to Hamburg rather than Houston would be far less financially burdensome to both parties.).
34
The Court may dismiss on the basis of forum non conveniens in lieu of addressing questions of subject matter and personal jurisdiction, particularly whereas herethose inquiries raise difficult issues that might otherwise require jurisdictional discovery. MBI, 558 F. Supp. at 27; see also Sinochem Intl Co. v. Malay. Intl Shipping Corp., 549 U.S. 422, 425, 127 S. Ct. 1184, 1188 (2007).
42
violated treaties between these governments and the U.S. See Compl. 207; World Wide Minerals, Ltd. v. Republic of Kazakhstan, 296 F.3d 1154, 1164 (D.C. Cir. 2002). The act of state doctrine, however, counsels against addressing any of these issues by preventing [U.S. courts] from inquiring into the validity of the public acts of a recognized sovereign power committed within its own territory and which may interfere with the executives conduct of American foreign policy. Sarei, 487 F.3d at 1208 (9th Cir. 2007). Plaintiffs ask this Court to assess the validity of acts of the Iranian and South African governments committed in their sovereign territory, but the D.C. Circuit rejected just such a case in World Wide Minerals, 296 F.3d at 1160. In that case, the act of state doctrine barred claims by a Canadian corporation that sued to enforce a series of agreements with the Republic of Kazakhstan concerning uranium exports because the plaintiffs allegations would require [the court] to question the legality of Kazakhstans denial of the export license. Id. at 1165. This Court should apply World Wide Minerals and dismiss the Complaint. V. PLAINTIFFS PRINCIPAL NON-FEDERAL CLAIMS ARE TIME-BARRED Whether governed by D.C. law or the law of South Africa, Plaintiffs principal nonfederal claims arising out of the alleged scheme to displace Turkcell are all time-barred. Under D.C. law, a three-year statute of limitations applies to each of the claims asserted in Counts III through VI of the Complaint. See Dubois v. Wash. Mut. Bank, Civ. No. 09-2176 (RJL), 2010 WL 3463368, at *3 (D.D.C. Sept. 3, 2010) (three-year limitations period applies to claims for conversion, tortious interference, and civil conspiracy). The same limitations period applies to the extent these claims are cognizable under South African law. See Kriegler Decl. 4.24. Plaintiffs claims accrued no later than November 27, 2005, the day MTN displaced Turkcell and received the License. Compl. 12. At the latest, Plaintiffs were on inquiry notice by April 29, 2008, 43
Plaintiffs claims, therefore, are clearly time-barred. VI. THE COMPLAINT FAILS TO STATE A CLAIM FOR BREACH OF CONTRACT OR DEFAMATION The Complaint fails to state a claim for breach of contract because Plaintiffs do not allege damages caused by the alleged breach, a required element under D.C. law. See Jennings v. Exelrod, Civ. No. 11-1708 (RWR), 2012 WL 1357554, at *1 (D.D.C. Apr. 19, 2012). Plaintiffs conclusory allegations simply state that MTNs breach has caused Turkcell damages, Compl. 258, but such [t]hreadbare recitals of [one of] the elements of a cause of action cannot withstand a motion to dismiss. Ashcroft, 556 U.S. at 678, 129 S.Ct. at 1949. In fact, as described above, there were no monetary obligations or expectations under the contract, and Plaintiffs have not alleged that consequential damages resulting from an alleged decline in Turkcells stock price were foreseeable and within the contemplation of the parties when they entered into the Confidentiality Agreement. See Levermore v. Smith, Civ. A. No. 87-2158-OG, 1988 WL 110607, at *5 (D.D.C. Oct. 12, 1988). Such damages are entirely speculative as there could have been any number of reasons for the alleged decline in Turkcells stock price. Allegations of damages, however, must be reasonably certain in their nature and in respect to the causes from which they proceed. Id. Likewise, the Complaint fails to state a claim for defamation because Plaintiffs have not pled actual malice. Plaintiffs are, at a minimum, limited public figures because, at the time of the alleged defamation on March 12, 2012, news articles had already widely disseminated the controversy between Turkcell and MTN. See OAO Alfa Bank v. Center for Public Integrity, 387 F. Supp. 2d 20, 4243 (D.C. Cir. 2005) (holding that a plaintiff is a limited public figure if the (1) controversy is public; (2) plaintiff has more than a trivial or tangential role in the
44
controversy; and (3) alleged defamation was germane to the plaintiffs participation in the controversy); see e.g. Devon Maylie, MTN Probes Bribery Claims, Wall St. J., Feb. 4 2012, at B3 (discussing Turkcells allegations against MTN). As public figures, Plaintiffs must prove that the alleged defamatory statements were made with actual malice. OAO Alfa Bank, 387 F. Supp. at 2d 48-49. But instead, Plaintiffs merely allege in a conclusory fashion that the defamatory statements were made and published by defendants with knowledge of their falsity. Parisi v. Sinclair, Civ. No. 10-897 (RJL), 2012 WL 639280, at *2 (D.D.C. Feb. 28, 2012); see also Compl. 262. The Complaint in fact includes no particularized allegations of MTNs knowledge or reckless disregard of the statements falsity. See Compl. 259-267. Plaintiffs thus fail to raise a right to relief above the speculative level. Parisi, 2012 WL 639280 at *2 (citation omitted). CONCLUSION For the foregoing reasons, Defendants respectfully request that the Court enter an order dismissing the Complaint and granting Defendants such additional relief as the Court may deem just and proper. Dated: July 2, 2012 Respectfully submitted, FRESHFIELDS BRUCKHAUS DERINGER US LLP /s/ Timothy J. Coleman Timothy J. Coleman (#436415) Timothy P. Harkness (admitted pro hac vice) Jessica R. Simonoff (admitted pro hac vice) Pamila Gudkov (admitted pro hac vice) Mia L. Havel (#994371) 701 Pennsylvania Avenue, N.W., Suite 600 Washington, DC 20004 tim.coleman@freshfields.com Attorneys for Defendants
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UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA TURKCELL LETIIM HIZMETLERI A.. AND EAST ASIAN CONSORTIUM B.V. , Plaintiffs, v. MTN GROUP, LTD. AND MTN INTERNATIONAL (MAURITIUS) LTD., Defendants. ) ) ) ) Civil Action No. 12-00479 (RBW) ) ) Filed under Seal in Part ) ) ) )
CERTIFICATE OF SERVICE I, TIMOTHY J. COLEMAN, hereby certify that on July 2, 2012, I caused a true and correct copy of the Motion to Dismiss the Complaint, dated July 2, 2012, with all accompanying redacted attachments and exhibits thereto, to be served upon the parties listed below through the Courts ECF system: David Farber, Esq. Patton Boggs LLP 2550 M Street, NW Washington, DC 20037 dfarber@pattonboggs.com Read K. McCaffrey, Esq. Patton Boggs LLP 2550 M Street, NW Washington, DC 20037 rmccaffrey@pattonboggs.com
Kristen M. Jarvis Johnson, Esq. Patton Boggs LLP 2550 M Street, NW Washington, DC 20037 kmjohnson@pattonboggs.com I further certify that on July 2, 2012, I caused a true and correct copy of the Motion to Dismiss the Complaint, dated July 2, 2012, with all accompanying unredacted attachments and exhibits thereto, to be served upon the same parties through email and overnight courier.
Dated:
Washington, D.C. July 2, 2012
FRESHFIELDS BRUCKHAUS DERINGER US LLP
By: /s/ Timothy J. Coleman___________ Timothy J. Coleman (#436415) 701 Pennsylvania Avenue, N.W., Suite 600 Washington, D.C. 20004-2692 tim.coleman@freshfields.com Attorneys for Defendants

MTN Dismiss

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Case 1:12-cv-00479-RBW Document 32 Filed 07/02/12 Page 1 of 59

Washington, D.C. July 2, 2012

FRESHFIELDS BRUCKHAUS DERINGER US LLP

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III. THE COURT LACKS PERSONAL JURISDICTION OVER DEFENDANTS ..............30 A.

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IV. THE COURT SHOULD DECLINE TO EXERCISE JURISDICTION ...........................40

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Plaintiffs Are Collaterally Estopped from Bringing the Principal Claims

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Plaintiffs Have Not Alleged Personal Jurisdiction Over MTNI

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