Broidy Capital Mgmt. LLC v. Benomar

• Citation: 944 F.3d 436
• Decision Date: 06 December 2019
• Docket Number: August Term, 2019,Docket No. 19-236
• Parties: BROIDY CAPITAL MANAGEMENT LLC, Elliott Broidy, Plaintiffs-Appellants, v. Jamal BENOMAR, Defendant-Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals (2nd Circuit)

944 F.3d 436

BROIDY CAPITAL MANAGEMENT LLC, Elliott Broidy, Plaintiffs-Appellants,

v.Jamal BENOMAR, Defendant-Appellee.

Docket No. 19-236

August Term, 2019

United States Court of Appeals, Second Circuit.

Argued: October 23, 2019

Decided: December 6, 2019

Shannen W. Coffin (Filiberto Agusti, Linda C. Bailey, on the brief), Steptoe & Johnson LLP, Washington, D.C., for Plaintiffs-Appellants.

Abbe David Lowell (Eric W. Bloom, on the brief), Winston & Strawn LLP, Washington, D.C., for Defendant-Appellee.

Martin Totaro, Attorney, Appellate Staff Civil Division, U.S. Department of Justice (Marik A. String, Acting Legal Adviser, U.S. Department of State, Joseph H. Hunt, Assistant Attorney General, Sharon Swingle, Attorney, Appellate Staff Civil Division, U.S. Department of Justice, on the brief), for the United States, Amicus Curiae.

Before: Katzmann, Chief Judge, Chin and Droney, Circuit Judges.

Katzmann, Chief Judge:

This case calls on us to determine who bears the burden of establishing jurisdiction pursuant to an exception to diplomatic immunity under the Vienna Convention on Diplomatic Relations ("VCDR" or the "Vienna Convention"), Apr. 18, 1961, 23 U.S.T. 3227, 500 U.N.T.S. 95, where a defendant has demonstrated diplomatic status. Plaintiffs Elliott Broidy and Broidy Capital Management LLC appeal from a judgment of the United States District Court for the Southern District of New York (Seibel, J. ) dismissing their suit against Jamal Benomar, a Moroccan diplomat, for lack of subject matter jurisdiction. On appeal, plaintiffs challenge the district court’s conclusion that Benomar possessed diplomatic immunity from suit under the Vienna Convention, and argue that the district court erred in imposing on plaintiffs the burden of establishing jurisdiction by showing that their suit could proceed under one of the VCDR’s exceptions to diplomatic immunity. Plaintiffs also contend that the district court abused its discretion in denying jurisdictional discovery and leave to amend the complaint. For the reasons below, we hold that, where a defendant has demonstrated diplomatic status, plaintiffs bear the burden of proving by a preponderance of the evidence that an exception to diplomatic immunity applies and that jurisdiction exists. The plaintiffs having failed to meet that burden, we AFFIRM the judgment of the district court.

BACKGROUND

Elliott Broidy is the chief executive officer and chairman of Broidy Capital Management LLC. Until early 2018, he served as the Deputy Finance Chair of the Republican National Committee. In late 2017 and early 2018, Broidy’s computer systems were hacked, and trade secrets and personal information were stolen. Materials stolen in the hack were organized thematically and then disseminated to U.S. media outlets. Broidy alleges that the state of Qatar, believing Broidy to be an influential detractor responsible for President Trump’s public criticism of Qatar in June 2017, engineered the cyberattack in order to discredit Broidy and curtail his influence.

Broidy subsequently filed several lawsuits seeking to hold Qatar and various alleged Qatari agents accountable for the hack. See Broidy Capital Mgmt., LLC et al. v. State of Qatar et al. , No. 2:18-cv-02421-JFW-E (C.D. Cal.) (the "California Action"); Broidy Capital Mgmt., LLC et al. v. Muzin et al. , No. 1:19-cv-00150-DLF, 2019 WL 4928767 (D.D.C., June 4, 2019). On July 23, 2018, Broidy filed suit in the United States District Court for the Southern District of New York against Jamal Benomar, a Moroccan native and dual Moroccan-U.K. citizen who served as a high-ranking diplomat with the United Nations ("U.N.") for twenty-four years before stepping down as the U.N. Under-Secretary-General for Conflict Prevention on July 1, 2017. Broidy alleged that Benomar had served as a secret Qatari agent since at least 2017 and that Benomar had been paid by Qatar to participate in the alleged Qatari hacking scheme. According to the complaint, Benomar engaged in commercial activity when he purportedly participated in reviewing and organizing the hacked materials and planning their dissemination to the media, and he engaged in increased contacts with other participants in the conspiracy prior to, during, and after the hack and media distribution of hacked materials.¹

Prior to the first in-court conference in the case, Benomar filed a letter stating that he was currently a Moroccan diplomat and that he intended to move to dismiss the complaint pursuant to Federal Rule of Civil Procedure 12(b)(1) for lack of subject matter jurisdiction due to diplomatic immunity. In a subsequent declaration, Benomar represented that he had served as a diplomat with the Moroccan Permanent Mission to the United Nations ("Moroccan Mission") since November 1, 2017. However, he acknowledged that the Moroccan Permanent Mission had not begun the process of seeking U.S. diplomatic credentials for him until after Broidy’s complaint was filed in July 2018. Accordingly, the United States had not made a determination as to Benomar’s diplomatic immunity when the complaint was filed.

While briefing was pending on Benomar’s motion to dismiss, the U.S. Department of State confirmed that the U.S. Mission to the United Nations ("U.S. Mission") had registered Benomar with full diplomatic privileges and immunities as of November 13, 2018. Plaintiffs acknowledged the State Department’s determination but argued that their case could nevertheless proceed because it arose out of commercial or professional activity (Benomar’s alleged paid work for Qatar) excepted from diplomatic immunity under the VCDR.

The district court rejected this argument, finding that Benomar was entitled to diplomatic immunity and granting his motion to dismiss for lack of subject matter jurisdiction. The district court denied both plaintiffs’ request for jurisdictional discovery and plaintiffs’ request, made for the first time after the district court had granted the motion to dismiss, to provide the court with a request for the production of specific documents relevant to jurisdictional discovery. In rejecting the latter request, the court explained that it had previously instructed plaintiffs to make any specific jurisdictional discovery requests in their opposition to the motion to dismiss and that plaintiffs had failed to do so. The district court also denied plaintiffs’ motion for leave to amend the complaint as futile because the proposed amended complaint would also have been subject to dismissal for lack of subject matter jurisdiction. This appeal timely followed.

DISCUSSION

I. The district court properly dismissed the complaint for lack of subject matter jurisdiction

A. Standard of review

We review de novo a district court’s legal conclusions granting or denying immunity and its dismissal of a claim for lack of subject matter jurisdiction. Brzak v. United Nations , 597 F.3d 107, 110–11 (2d Cir. 2010). We also "review de novo a district court’s interpretation of a treaty such as the Vienna Convention." Swarna v. Al-Awadi , 622 F.3d 123, 132 (2d Cir. 2010).²

"[T]he district court can refer to evidence outside the pleadings" when resolving a motion to dismiss under Federal Rule of Civil Procedure 12(b)(1). Luckett v. Bure , 290 F.3d 493, 496–97 (2d Cir. 2002). "[E]videntiary matter[s] may be presented by affidavit or otherwise." Kamen v. Am. Tel. & Tel. Co. , 791 F.2d 1006, 1011 (2d Cir. 1986). "On appeal from a dismissal under Rule 12(b)(1), we review the court’s factual findings for clear error...." Cortlandt St. Recovery Corp. v. Hellas Telecomm., S.à.r.l. , 790 F.3d 411, 417 (2d Cir. 2015).

B. Treaty and statutory framework

Diplomatic immunity in the United States is governed by the Vienna Convention on Diplomatic Relations, which was ratified by the United States in 1972. The Vienna Convention primarily "codified longstanding principles of customary international law with respect to diplomatic relations."

767 Third Ave. Assocs. v. Permanent Mission of Republic of Zaire to United Nations , 988 F.2d 295, 300 (2d Cir. 1993). However, it also modernized the law of diplomatic immunity in accordance with the prevailing functional view of diplomatic immunity as intended "not to benefit individuals but to ensure the efficient performance of the functions of diplomatic missions as representing States." VCDR pmbl.; see Diplomatic Law: Commentary on the Vienna Convention on Diplomatic Relations 4-5 (Eileen Denza ed., 4th ed. 2016). Accordingly, the VCDR reserves the broadest immunity for those most integral to the diplomatic mission, active "diplomatic agents," defined to include "the head of the mission or a member of the diplomatic staff of the mission."³ VCDR art. 1(e). Diplomatic agents are entitled to complete immunity from the criminal jurisdiction of the receiving State. Id. art. 31(1). A diplomatic agent is also entitled to immunity from the civil and administrative jurisdiction of the receiving State, with exceptions for three categories of cases:

(a) A real action relating to private immovable property situated in the territory of the receiving State, unless he holds it on behalf of the sending State for the purposes of the mission;

(b) An action relating to succession in which the diplomatic agent is involved as executor, administrator, heir or legatee as a private person and not on behalf of the sending State;

(c) An action relating to any professional or commercial activity exercised by the diplomatic agent in the receiving State outside his official functions.

Id.

"In interpreting a treaty, it is well established that we begin with the text of the treaty and the context in which the written words are used." Swarna , 622 F.3d at 132. Where the text is "difficult or ambiguous," we may both employ "general rules of construction" and "look beyond the written words to the history of the treaty, the negotiations, and the practical construction adopted by the parties." E. Airlines, Inc. v. Floyd , 499 U.S. 530, 535, 111 S.Ct....