Aly v. Import

• Decision Date: 14 July 2016
• Docket Number: No. 12-CV-6069-SJ-DGK,12-CV-6069-SJ-DGK
• Court: U.S. District Court — Western District of Missouri
• Parties: HASSANIN ALY, Plaintiff, v. HANZADA FOR IMPORT & EXPORT COMPANY, LTD., Defendant.

HASSANIN ALY, Plaintiff, v. HANZADA FOR IMPORT & EXPORT COMPANY, LTD., Defendant.

No. 12-CV-6069-SJ-DGK

UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF MISSOURI ST. JOSEPH DIVISION

July 14, 2016

ORDER DENYING MOTIONS FOR JUDGMENT AS A MATTER OF LAW AND FOR A NEW TRIAL

A jury found Defendant Hanzada for Import & Export Company, Ltd.("Hanzada"), liable for breach of contract.Challenging that verdict, Hanzada has filed a renewed motion for judgment as a matter of law(Doc. 158) and a motion for a new trial(Doc. 160).For the reasons below, each motion is DENIED.¹

Background

The Court reviews these motions by relying on "its own reading of the evidence."Lincoln Composites, Inc.v. Firetrace USA, LLC, — F.3d —, 2016 WL 3186895, at *2(8th Cir.2016).Hanzada is an Egyptian beef importer.Around 2006, Hanzada was hoping to establish an import-export relationship with National Beef Packing Company in Kansas City, Missouri.A Hanzada employee named Samy Sobhy Eliwa, who also went as Samy Shaheen("Shaheen"), sought help from PlaintiffHassanin Aly("Aly"), a business promoter.Shaheen orally agreed, on Hanzada's behalf, to pay Aly a percentage of all the beef that Hanzada imported in exchange for Aly's help.Hanzada has claimed throughout the case that Shaheen was not authorized to entercontracts on Hanzada's behalf.Instead, Hanzada claims that its president and chief executive officer, Selim Sobhy Eliwa("Eliwa"), was the only person authorized to do that.

Claiming that Hanzada was bound to the contract but failed to pay him all due commissions, Aly sued for breach of contract in July 2012.Aly, a dual citizen of Egypt and the United States—specifically, Ohio—served Hanzada in Cairo in December 2012.The case creaked along for three more years, during which time Hanzada moved for summary judgment on the grounds that the statute of frauds bars Aly's claim and that Shaheen had no authority to enter contracts on Hanzada's behalf.The Court denied the motion.

As the Court has previously chronicled, Hanzada missed several deadlines in this case, for which it was sanctioned once (Doc. 94).The trial was always set for early 2016; after two brief continuances, the Court set a trial date of April 12, 2016.Nonetheless, on March 25, 2016, Hanzada moved to continue the trial setting, asserting that Eliwa wanted to testify but was having problems obtaining a visa to travel from Egypt to the United States.Eliwa swore in an affidavit that he was able to secure a visa appointment at the U.S. embassy "[s]everal weeks ago," and needed just a few days' continuance to be able to attend (Doc. 118-1at 1).The Court denied the motion, citing the age of the case and the number of extensions it had already granted Hanzada.

At trial, the Court allowed Eliwa to testify via videolink from Egypt.The Court cut off the testimony after experiencing problems with the video feed, the interpreter, interruptive people in the same room as Eliwa, and Eliwa himself, who appeared to be evasively taking mid-testimony counsel from other people in the room.On agreement from both parties, the Court told the jury to disregard Eliwa's testimony entirely: "Ladies and gentlemen of the jury, I willdirect you to disregard everything you just heard from this witness.I don't believe it's helpful or has probative value."(Doc. 182at 408).

Having lost Eliwa's testimony, Hanzada presented no evidence of its own.Through Aly's witnesses, Hanzada moved to admit Exhibit 501, a commercial registry filed with the Egyptian Ministry of Industry and Foreign Trade.The Court excluded Exhibit 501 as irrelevant and confusing.(The exhibit is attached as an appendix to this Order.)

The jury returned a $1,591,286.60 verdict in Aly's favor.

Discussion

Between its two motions, Hanzada seeks three kinds of relief.First, it argues that the Court must vacate the judgment as void because the Court lacks jurisdiction over this case.Second, Hanzada asks the Court to enter judgment as a matter of law in its favor on the basis that the jury had no legally sufficient evidentiary basis to return a pro-Aly verdict.Third, it argues the Court should grant a new trial because it issued erroneous rulings in limine and at trial.

I.Because the Court has jurisdiction over the case and the parties, there are no grounds to void the judgment.

Hanzada argues that the Court must void its judgment for two reasons: the Court lacks subject-matter jurisdiction, and it lacks personal jurisdiction.

A.The Court has subject-matter jurisdiction because although Aly is a dual citizen, the Court considers only his Ohio citizenship, thus establishing diversity of citizenship with Hanzada of Egypt.

Hanzada argues that the Court lacks subject-matter jurisdiction over this case because both Aly and Hanzada are Egyptian citizens, and the relevant statutes do not permit the exercise of jurisdiction when a lawsuit has only foreign citizens.Aly responds that he avoids that rule because he is a dual citizen of Egypt and the United States, specifically Ohio.

A court may relieve a party from a "void" judgment.Fed. R. Civ. P. 60(b)(4)."Absence of subject matter jurisdiction may, in certain cases, render a judgment void."Kan. City. S. Ry. Co. v. Great Lakes Carbon Corp., 624 F.2d 822, 825(8th Cir.1980)(en banc).Because the jurisdictional issue here is arguably not enough to compel relief under Rule 60(b)(4), seeid., the Court instead construes Hanzada's motion as one brought under Rule 12(b)(1).

Under that Rule, the Court must dismiss a case over which it lacks subject-matter jurisdiction."The objection that a federal court lacks subject-matter jurisdiction . . . may be raised . . . at any stage in the litigation, even after trial and the entry of judgment."Arbaugh v. Y&H Corp., 546 U.S. 500, 506(2006);seeFed. R. Civ. P. 12(h)(3).When entertaining a factual Rule 12(b)(1) attack, as here, the court assesses all record evidence to determine whether subject-matter jurisdiction exists.Branson Label, Inc. v. City of Branson, 793 F.3d 910, 914-15(8th Cir.2015).The court makes this determination from evidence appearing anywhere in the record, including at trial.Yeldell v. Tutt, 913 F.2d 533, 537-38(8th Cir.1990).

Hanzada specifically claims that the Court lacks "alienage diversity jurisdiction," which is the variety of federal jurisdiction Aly invoked.SeeJPMorgan Chase Bank v. Traffic Stream (BVI) Infrastructure Ltd., 536 U.S. 88, 90(2002).Alienage diversity jurisdiction vests only if the action is between "citizens of a State and citizens or subjects of a foreign state."28 U.S.C. § 1332(a)(2).To qualify under this statute, the plaintiff may not be a citizen of the same foreign country as the defendant.Mossman v. Higginson, 4 U.S. (4 Dall.) 12, 13(1800);seeNewman-Green, Inc. v. Alfonzo-Larrain, 490 U.S. 826, 829(1989).

This scheme does not address what to do with a dual citizen: should the court count only his U.S. state citizenship, only his foreign citizenship, or both?Dual citizenship's impact on diversity is an issue of first impression for this Circuit, but one that has been addressed by sixother courts of appeals.They uniformly hold that if a party is a dual citizen of a U.S. state and of a foreign country, then a federal court ignores the party's non-American citizenship for diversity purposes.See, e.g., Sadat v. Mertes, 615 F.2d 1176, 1187(7th Cir.1980)("[O]nly the American nationality of the dual citizen should be recognized under 28 U.S.C. § 1332(a).").²After all, a "person can have only one domicile at a time,"Ellis v. Se. Constr. Co., 260 F.2d 280, 281(8th Cir.1958), and since alienage diversity jurisdiction aims to keep truly international disputes out of state courts, JPMorgan Chase, 536 U.S. at 94-96, allowing a foreigner to be sued by a citizen of a U.S. state even if he happens to have dual citizenship with another country does not frustrate the purpose of alienage diversity.

Hanzada urges the Court to reject this Sadat rule and follow a reasoning supposedly espoused by the Fifth Circuit, but the decisions it relies on are readily consistent with Sadat.SeeSmith v. Carter, 545 F.2d 909, 912(5th Cir.1977)(precluding an American citizen living abroad from invoking alienage diversity jurisdiction, which comports with Sadat because that decision still requires the American citizen to be domiciled in a U.S. state);Coury v. Prot, 85 F.2d 244, 250(5th Cir.1996)(adoptingSadat).

Hanzada urges the Court to treat Aly like a corporation, for which § 1332 expressly counts two citizenships equally: the place of incorporation, and the principal place of business.28 U.S.C. § 1332(c)(1).But this statutory distinction is not readily transposed to natural persons, who could have a "principal place of business," but not a state of "incorporation."If Hanzada is arguing that § 1332 sanctions multiple citizenships generally, that position is also untenable.Given the many types of parties whose citizenship the statute does not address—unincorporatedbusinesses, stateless persons, American expatriates, and dual citizens, to name a few—the Court holds the statute's peculiar two-citizenships scheme applies solely to corporations.See, e.g., Dep't of Homeland Sec. v. MacLean, 135 S. Ct. 913, 919(2015)(applying this interpretive presumption to conclude of a certain statute, "Congress's choice to say 'specifically prohibited by law' rather than 'specifically prohibited by law, rule, or regulation' suggests that Congress meant to exclude rules and regulations.").Without a specific statutory exception like the one created for corporations, Hanzada's approach succumbs to the general rule that a "person can have only one domicile at a time."Ellis, 260 F.2d at 281.The Sadat rule of dual citizenship is sound, so the Court adopts that rule.

The Court previously found, and Hanzada does not now contest, that when Aly filed his complaint Hanzada was a citizen of Egypt and...