Aldossari v. Ripp
| Decision Date | 13 September 2022 |
| Docket Number | 21-2080 |
| Parties | NADER TURKI ALDOSSARI, on behalf of as parent and natural guardian of Rakan Nader Aldossari, Appellant v. JOSEPH C. RIPP; MOHAMMED BIN NAYEF AL SAUD, former Crown Prince of Saudi Arabia; THE KINGDOM OF SAUDI ARABIA; SAUDI EST. FOR DEVELOPMENT OF RIYADH; SAUDI ARAMCO; EXPORT REFINERY WESTERN HEMISPHERE, LTD; TRANSCONTINENTAL OIL AND FINANCIAL GROUP OF AMERICA, INC.; MOHAMMED BIN SALMAN BIN ABDULAZIZ AL SAUD, Crown Prince of Saudi Arabia |
| Court | U.S. Court of Appeals — Third Circuit |
Argued April 13, 2022
On Appeal from the United States District Court For the Eastern District of Pennsylvania (D.C. No. 2-20-cv-03187) District Judge: Honorable Gene E.K. Pratter James T. Tallman [ARGUED]
Elliott & Davis
Counsel for Appellant
Katherine C. Cooper
Michael K. Kellogg
Gregory G. Rapawy
Andrew C. Shen [ARGUED]
Kellogg Hansen Todd Figel & Frederick
Counsel for Kingdom of Saudi Arabia and
Mohammed Bin Salman Bin Abdulaziz Al Saud
Lawrence F. Stengel
Saxton & Strump
Counsel for Mohammed Bin Nayef Al Saud
Nicolle Kownacki
Carolyn B. Lamm [ARGUED]
Claire Marsden
Hansel T. Pham
Counsel for Saudi Aramco
Before: AMBRO, JORDAN, and SCIRICA, Circuit Judges
Federal courts are courts of limited jurisdiction. Constitutional, prudential, and statutory constraints on our authority prevent us from hearing some cases that are brought to us. For example, disputes under state law between citizens of the same state are typically beyond our adjudicatory power. 28 U.S.C. § 1332. So, too, are actions, like this one, brought against foreign defendants over a transaction executed and performed overseas. Those suits can only proceed in federal court if a sufficient connection - some jurisdictional "hook" -exists between the parties and their dispute on one hand and the United States on the other. This case has no hook.
Nader Turki Aldossari brought suit to recover a debt allegedly owed to his father. In the 1990s, his father's company, Trans Gulf, entered into an agreement in Saudi Arabia with three other businesses. The companies agreed to set up and operate an oil refinery in Saint Lucia, an island nation in the Caribbean. Crude oil for the refinery was to be sourced from the Saudi government or its national oil company, the Saudi Arabian Oil Company (known colloquially as "Saudi Aramco"). The project went forward, but, it is alleged, the owners of the three contract counterparties - one of whom later became the Crown Prince of Saudi Arabia - conspired to cut Aldossari's father out of the deal by refusing to pay Trans Gulf its promised share of the proceeds. Two decades later, when Aldossari sought recompense for his father's work on the project, the soon-to-be Crown Prince promised to pay but never did. That failure is allegedly a consequence of the Crown Prince only having two years in office before being ousted by his cousin, the current Crown Prince. Aldossari later assigned to his minor son, a U.S. citizen, whatever rights he had to whatever his father was owed. Then, acting on behalf of his son, Aldossari brought suit in the District Court, asserting various tort and contract claims.
The defendants filed motions to dismiss, which the District Court granted with prejudice, holding that Aldossari and his son lacked standing to sue and that most of the defendants - Saudi Arabia, Saudi Aramco, and the current and former Crown Princes - were immune from suit. After Aldossari appealed, the only other defendant who appeared in the case died, and no representative or estate has been substituted.
We hold that dismissal of the claims against that deceased defendant was proper because Aldossari failed to allege any basis for exercising subject-matter jurisdiction over those claims. As for the claims against the surviving defendants, the lack of any meaningful ties between those defendants and the United States in Aldossari's claims defeats his effort to sue them in the United States. This case concerns a decades-old contract among mostly non-U.S. parties, entered into in Saudi Arabia and performed there and in Saint Lucia. There is no meaningful U.S. connection, so, pursuant to the Foreign Sovereign Immunities Act, we lack subject-matter jurisdiction over the claims against Saudi Arabia and Saudi Aramco. And, for similar reasons, we do not have personal jurisdiction over the two Crown Prince defendants. Because the District Court dismissed with prejudice, however, we must vacate its order and remand with directions to dismiss without prejudice, since none of the dispositive rulings reach the merits.
In December 1994, four companies aiming to establish an oil refinery in Saint Lucia executed an Ownership Agreement in Riyadh, Saudi Arabia.[2] Those parties were Trans Gulf, a Saudi-based company; Saudi Est. for Development of Riyadh ("Saudi Est."), another Saudi-based company; Export Refinery Western Hemisphere, Ltd. ("Export"), a British Virgin Islands corporation; and Transcontinental Oil and Financial Group of America, Inc. ("Transcontinental"), a Delaware corporation.[3] Representing Trans Gulf, and signing on its behalf, was Turki bin Faraj bin Nader ("bin Nader"), the father of plaintiff Nader Turki Aldossari.[4] Signing for both Export and Transcontinental was Joseph Ripp, a Pennsylvania citizen who allegedly "controlled" both companies. (J.A. at 83-85, 105.) As for Saudi Est., Aldossari alleges that, at all relevant times, Prince Mohammed bin Nayef bin Abdulaziz Al Saud of Saudi Arabia - who went on to become Crown Prince from 2015 to 2017 -was its owner and acted as its agent.
The parties to the Ownership Agreement agreed to split ownership of the refinery on a roughly equal basis: 25% for Saudi Est., 24% for "Trans Gulf (and his partners as they agree[d] between them),"[5] 25.5% for Export, and 25.5% for Transcontinental.[6] (J.A. at 85-86, 97-107.) In exchange, each party took on certain responsibilities. Saudi Est. promised to obtain, within a year, "a contract for the supply of crude oil from the Government of the Kingdom of Saudi Arabia, and[/]or Saudi Aramco" for the refinery at below-market prices for at least twenty years. (J.A. at 100, 102.) Saudi Est. also agreed to send letters to the prime minister of Saint Lucia and to Saudi Aramco "authorizing [bin Nader] ... to work with Aramco on behalf of the venture." (J.A. at 102.) The "Owner of Saudi Est." - who, again, Aldossari alleges was Prince Mohammed bin Nayef - would sit on the refinery's board of directors. (J.A. at 85, 102.) Export, meanwhile, provided an exclusive license it had previously secured from the government of Saint Lucia to "build, own and operate a state of the art Export Petroleum Refinery[.]" (J.A. at 98.) Export was tasked with completing "the actual development, financing and construction of the Refinery" in three years; "maintain[ing] good relations with the Government of St. Lucia"; and running the refinery once it was built. (J.A. at 100.) Transcontinental was authorized by Export to act on its behalf. Trans Gulf's role was stated in a memorandum of understanding entered into in September 1994 and incorporated by reference but not attached to the Ownership Agreement. The memorandum allegedly said that Trans Gulf and bin Nader "were designated to be the local Manager in Saudi Arabia and the Middle East" by Transcontinental and Export. (J.A. at 99.)
Aldossari provides scant detail of the parties' performance under the Ownership Agreement. He does claim, however, that his father, bin Nader, traveled to Saint Lucia in 1995 "on behalf of the former Crown Prince[7] and [the] Saudi Arabian government" to meet with government officials. (J.A. at 86.) According to Aldossari, "as a result of the efforts of [his father,] the parties entered into deals for the supply of oil from Aramco." (J.A. at 86.) He also says that Export secured an agreement with the Saudi government "and/or" Saudi Aramco for the supply of crude oil, but he does not include a copy of that agreement or explain why it was Export that obtained that contract and not Saudi Est., as the Ownership Agreement provided. (J.A. at 85.)
At some point, things took a turn for the worse, at least for Aldossari's father. Aldossari claims that "Ripp and the former Crown Prince acted in concert to breach ... the agreement and cut [bin Nader] out of the deal." (J.A. at 86.) In April 1995, Prince Mohammed bin Nayef "wrote to [bin Nader] stating: '[i]f we make another deal in St. Lucia with the same people or different people, you will get your 24%'" - in other words, bin Nader was being denied his share on the original deal. (J.A. at 86.) According to Aldossari, even though "future agreements and deals resulting in substantial profits transpired," "[n]either [bin Nader] nor Trans Gulf received any payment of profits" under the original deal or any subsequent ones. (J.A. at 87.) Bin Nader died in 1999, leaving behind as heirs his three wives, twelve sons (including Aldossari), and seven daughters.
To all appearances, that was the end of the matter for the next fifteen years. Although the Ownership Agreement provided that "[a]ny dispute between the parties shall be arbitrated in accordance with the rules and regulations then pertaining by the International Chamber of Commerce in Switzerland" (J.A. at 104), there is no indication that Aldossari or his father, or anyone else, ever availed themselves of that dispute-resolution mechanism.
In 2014, however, Aldossari met with Prince Mohammed bin Nayef in London. At that time, says Aldossari, the Prince "acknowledged the agreement" and bin Nader's "right to receive payment" under it. (J.A. at 87.) In Aldossari's...
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