Peterson v. Royal Kingdom of Saudi Arabia

• Decision Date: 23 August 2004
• Docket Number: No. CIV.A. 03-1771(JDB).,CIV.A. 03-1771(JDB).
• Parties: John W. PETERSON, Plaintiff, v. ROYAL KINGDOM OF SAUDI ARABIA and General Organization of Social Insurance, Defendants.
• Court: U.S. District Court — District of Columbia

Page 189

332 F.Supp.2d 189

John W. PETERSON, Plaintiff, v. ROYAL KINGDOM OF SAUDI ARABIA and General Organization of Social Insurance, Defendants.

No. CIV.A. 03-1771(JDB).

United States District Court, District of Columbia.

August 23, 2004.

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Eric Lee Siegel, Henrichsen Siegel, PLLC, Stephen A. Saltzburg, George Washington University Law School, Washington, DC, for plaintiff.

Benjamin Thomas Peele, III, Baker & Mckenzie, John F. Hundley, Baker & Mckenzie, Washington, DC, for defendants.

MEMORANDUM OPINION

BATES, District Judge.

Presently before the Court in this action brought by plaintiff John W. Peterson against the Royal Kingdom of Saudi Arabia ("Saudi Arabia") and the General Organization of Social Insurance ("GOSI"), an instrumentality of Saudi Arabia (together "defendants"), are the motion of defendants to dismiss the complaint and the motion of plaintiff to strike or, in the alternative, for leave to file a sur-reply. For the reasons that follow, the Court will grant defendants' motion and deny plaintiff's motion.¹

BACKGROUND

The following facts are alleged by plaintiff. In November 1969, Saudi Arabia established GOSI to promote foreign commerce and attract foreign workers to Saudi Arabia. Compl. ¶ 9. GOSI is separated into two branches: the Occupational Hazards Branch and the Annuities Branch, which provides its participants with retirement benefits. Id. ¶ 23. GOSI invests and reinvests employer and employee contributions to its fund in various corporations, organizations, and international banks. Id. ¶ 25.

Between 1969 and 1987, GOSI contributions were mandatory for private employers and their employees, regardless of national origin or citizenry. Id. ¶ 23. Employers were solely responsible for contributing two percent (2%) of their employees' salaries to the Occupational Hazards Branch. Id. ¶ 24. Contributions to GOSI's Annuities Branch were calculated as thirteen percent (13%) of the total value of the employee's wages and other benefits. Id. The employee contributed five percent (5%) and the employer contributed eight percent (8%) of the monetary contribution. Id. All contributions were made for the benefit of, and in the name of, the employee. Id.

On or about March 10, 1987, the Saudi Government issued Royal Decree No. M/43, which excluded non-Saudi workers from GOSI's Annuities Branch ("1987 Royal Decree"). Id. ¶ 26. Pursuant to that Decree, non-Saudi workers were no longer covered by the GOSI Annuities Branch. Id. At some point between 1987 and 1990, defendants decided to refund a portion of the GOSI contributions to foreign workers who had made contributions into the system. Id. ¶ 31. Plaintiff was a foreign worker in Saudi Arabia who made contributions into the GOSI system. In approximately 1990, plaintiff applied for a refund of his GOSI contributions and received a check from defendants in the United States, which purported to represent his five percent monetary GOSI contribution plus some amount of interest for the delay in payment. Id. ¶ 36.

Plaintiff alleges that defendants failed to publicize the GOSI refund program, failed to explain their decision to refund the five percent contribution, and failed to state when the remaining eight percent would be paid. Id. ¶¶ 36-37. Plaintiff alleges that he contacted defendants at the embassy of Saudi Arabia in Washington throughout June 2003 via telephone, electronic mail, facsimile, and certified mail. Id. ¶ 39. In each of his communications to defendants, plaintiff asked for a date certain by which he would receive the remaining eight percent of his GOSI refund. Id. Defendants failed to provide the requested information. Id. Plaintiff stated that he would give defendants until June 23, 2003, to provide a definitive answer to his refund inquiry and that failure of defendants to respond by that date would be deemed a denial of his refund claim. Id. ¶ 40. Defendants did not respond to plaintiff or provide a complete refund. Id. ¶¶ 40-41.

On August 21, 2003, plaintiff filed his complaint in this Court, asserting claims of: (1) unlawful expropriation of plaintiff's property rights, without just, adequate, prompt compensation in violation of international law; (2) arbitrary and discriminatory treatment of foreign workers with regard to their property in Saudi Arabia; (3) breach of contract; (4) unjust enrichment; and (5) conversion of plaintiff's property and rights in property. Defendants filed their motion to dismiss pursuant to Fed. R. Civ. P. 12(b)(1), 12(b)(2), 12(h)(3), and 12(b)(6) and on act of state grounds on November 21, 2003. A hearing on the motion to dismiss was held on July 16, 2004.

APPLICABLE STANDARD

The Foreign Sovereign Immunities Act ("FSIA") is "the sole basis for obtaining jurisdiction over a foreign state in our courts." Argentine Republic v. Amerada Hess Shipping Corp., 488 U.S. 428, 434, 109 S.Ct. 683, 102 L.Ed.2d 818 (1989). The basic premise of the FSIA is that foreign sovereigns are immune from suit in the United States unless the action falls under one of the specific exceptions enumerated in the statute. 28 U.S.C. § 1604. If the foreign sovereign is not immune, the federal district courts have exclusive jurisdiction over the action. 28 U.S.C. §§ 1330, 1604; Daliberti v. Republic of Iraq, 97 F.Supp.2d 38, 42 (D.D.C.2000)(citing Amerada Hess, 488 U.S. at 434-35, 109 S.Ct. 683).

Under the FSIA, the foreign sovereign has "immunity from trial and the attendant burdens of litigation, and not just a defense to liability on the merits." Phoenix Consulting, Inc. v. Republic of Angola, 216 F.3d 36, 39 (D.C.Cir.2000) (quoting Foremost-McKesson, Inc. v. Islamic Republic of Iran, 905 F.2d 438, 443 (D.C.Cir.1990)). The special circumstances of a foreign sovereign require the court to engage in more than the usual pretrial factual and legal determinations. Foremost-McKesson, 905 F.2d at 449. The D.C. Circuit has noted that it is particularly important that the court "satisfy itself of its authority to hear the case" before trial. Id. (quoting Prakash v. Am. Univ., 727 F.2d 1174, 1179 (D.C.Cir.1984)).

Once a foreign-sovereign defendant asserts immunity, the plaintiff bears the burden of producing evidence to show that there is no immunity and that the court therefore has jurisdiction over the plaintiff's claims. Daliberti, 97 F.Supp.2d at 42 (citations omitted). A court may dismiss a complaint brought under the FSIA only if it appears beyond doubt that the plaintiff can prove no set of facts in support of his claims that would entitle him to relief. Id. (citations omitted). Once the plaintiff has shown that the foreign defendant is not immune from suit, the defendant bears the burden of proving that the plaintiff's allegations do not bring the case within one of the statutory exceptions to immunity. Phoenix Consulting, 216 F.3d at 40.

On a Rule 12(b)(1) motion to dismiss in an FSIA case, the defendant may challenge either the legal sufficiency or the factual underpinning of an exception. Phoenix Consulting, 216 F.3d at 40. Given that a foreign-state actor's entitlement to immunity from suit is a critical preliminary determination, the parties have the responsibility, and must be afforded a fair opportunity, to define issues of fact and law, and to submit evidence necessary to the resolution of the issues. Foremost-McKesson, 905 F.2d at 449 (citing Gould, Inc. v. Pechiney Ugine Kuhlmann & Trefimetaux, 853 F.2d 445, 451 (6th Cir.1988)). Thus, the court must resolve the substantive immunity-law issues of section 1605 before reaching a decision on subject-matter jurisdiction. Id. (citations omitted).

If the defendant challenges the legal sufficiency of the plaintiff's jurisdictional allegations, the court should accept the plaintiff's factual allegations as true and determine whether such facts bring the case within any of the exceptions to foreign-state immunity invoked by the plaintiff. Id. This standard is similar to that of Rule 12(b)(6), under which dismissal is warranted if no plausible inferences can be drawn from the facts alleged that, if proven, would provide grounds for relief. Price v. Socialist People's Libyan Arab Jamahiriya, 294 F.3d 82, 93 (D.C.Cir.2002) ("Price II"). The plaintiff need not set out all of the precise facts on which he bases his claim to survive a motion to dismiss. Id.

If the defendant challenges the factual basis of the court's jurisdiction, however, the court may not deny the motion to dismiss merely by assuming the truth of the facts alleged by the plaintiff. Phoenix Consulting, 216 F.3d at 40. Instead, the court must resolve any disputed issues of fact, the resolution of which is necessary to a ruling upon the motion to dismiss. Id.; Price II, 294 F.3d at 90; Foremost-McKesson, 905 F.2d at 449. The court has "considerable latitude in devising the procedures it will follow to ferret out the facts pertinent to jurisdiction," but it must give the plaintiff "ample opportunity to secure and present evidence relevant to the existence of jurisdiction." Phoenix Consulting, 216 F.3d at 40 (quoting Prakash, 727 F.2d at 1179-80). To avoid burdening a foreign sovereign that proves to be immune from suit, however, the court should carefully control and limit jurisdictional discovery. Id.; Foremost-McKesson, 905 F.2d at 449.

DISCUSSION

Defendants argue that plaintiff's complaint must be dismissed because defendants are foreign states and, under the FSIA, they are immune from the jurisdiction of this Court. Defendants specifically maintain that no FSIA exception applies here, including the expropriation exception and the commercial activity exception. Even if one of the exceptions to the FSIA were to apply, defendants contend that the act of state doctrine bars adjudication of this case. Finally, defendants argue that plaintiff's claims are barred by the statute of limitations. The Court will address each of defendant...