Atlantic Tele-Network v. Inter-American Develop

• Decision Date: 07 March 2003
• Docket Number: No. 02-1261 (TPJ).,02-1261 (TPJ).
• Citation: 251 F.Supp.2d 126
• Parties: ATLANTIC TELE-NETWORK INC., Plaintiff v. INTER-AMERICAN DEVELOPMENT BANK, et al., Defendants.
• Court: U.S. District Court — District of Columbia

Page 126

251 F.Supp.2d 126

ATLANTIC TELE-NETWORK INC., Plaintiff v. INTER-AMERICAN DEVELOPMENT BANK, et al., Defendants.

No. 02-1261 (TPJ).

United States District Court, District of Columbia.

March 7, 2003.

As Corrected March 13, 2003.

COPYRIGHT MATERIAL OMITTED

Randall Woods Sifers, Kelley Drye & Warren, LLP, Washington, DC, Andrew P. Gaillard, Day, Berry & Howard, Stamford, CT, Paul L. Kattas, Joseph A. Boyle, Kelley Drye & Warren, LLP, Parsipanny, NJ, for Atlantic Tele-Network, Inc.

William Dill Rogers, Nancy L. Perkins, Mara V.J. Senn, Nick Malhotra, Arnold & Porter, Washington, DC, for Inter-American Development Bank.

Roscoe Conklin Howard Jr., Michael C. Johnson, U.S. Attorneys Office, Washington, DC, for Jose A. Fourquet.

Michael C. Johnson, U.S. Attorneys Office, Washington, DC, Paul Stuart Reichler, Foley, Hoag, LLP, Washington, DC, for Paul O'Neill.

MEMORANDUM AND ORDER

JACKSON, District Judge.

According to the original verified complaint of plaintiff Atlantic Tele-Network, Inc., ("ATN"), the defendant Republic of Guyana contracted with ATN, an American corporation, in June, 1990, to build a domestic telecommunications system for the country. The system, once built, was to be owned by a private Guyanese limited liability company to be known as the Guyana Telephone and Telegraph Company, Ltd. ("GT & T"). ATN would purchase 80 percent of GT & T's capital stock, the remainder to be owned by the government of Guyana, and GT & T would receive an exclusive license from the government of Guyana to operate the system for 20 years, renewable at GT & T's option for a similar term. ATN was also promised, it says, a 15 percent return on its capital investment.¹

Pursuant to the contract, ATN alleges, it completed construction of a modern digital telecommunications system in Guyana at a cost of $140 million. By 1997, however, it became apparent that GT & T's rate of return on its investment was less than the 15 percent it had been guaranteed, but the government of Guyana blocked all efforts to obtain a rate increase sufficient to make up the difference. By May, 2001, ATN alleges, it discovered that the government of Guyana was planning to build a competing telecommunications system in violation of GT & T's contractual right to an exclusive license for 20 years, proposing to use for this purpose moneys to be borrowed from the defendant Inter-American Development Bank ("IDB").

ATN commenced this action on June 20, 2002, against IDB and the two officials of the U.S. government who exercise control over IDB's lending activities, its U.S. Executive Director and the U.S. Secretary of the Treasury (hereinafter the "federal defendants"). Of immediate concern to ATN was what it believed to be the imminent approval of a loan by IDB to Guyana of approximately $18 million to $20 million to begin construction of the competing telecommunications system. ATN sought a temporary restraining order and a preliminary and permanent injunction against the loan, as well as a writ of mandamus directing the federal officials to prohibit any use of IDB funds for the benefit of Guyana. The basis for the relief sought was alleged to be two federal statutes, the Inter-American Development Bank Act, 22 U.S.C. §§ 283 et seq., and the Foreign Assistance Act of 1961, 22 U.S.C. §§ 2151 et seq.

Following denial of ATN's application for preliminary injunctive relief, ATN filed its first amended verified complaint, adding the Republic of Guyana as a partydefendant to a count alleging breach of contract. Jurisdiction of the claim against Guyana is asserted to be found in the Foreign Sovereign Immunities Act, 28 U.S.C. §§ 1602 et seq.

The federal defendants, IDB, and Guyana have each filed separate motions to dismiss the amended complaint upon grounds peculiar to each. The Court will grant each of the motions for the reasons explained below.

I. The Federal Defendants' Motion to Dismiss

The federal defendants offer four interrelated reasons why the complaint must be dismissed as to them. They contend ATN lacks the requisite constitutional standing to maintain its claims against them. The issue of standing aside, they say, the statutes pursuant to which ATN sues do not admit of enforcement by private lawsuit, and even if they did the right to relief would involve non-justiciable political issues. Finally, the foregoing uncertainties preclude any relief by way of a writ of mandamus.

Plaintiff ATN's standing vis-a-vis the federal defendants is dubious at best. Article III standing always requires the existence of an injury in fact suffered by the plaintiff, a causal connection between the injury and the conduct complained of, and a likelihood that the injury will be "redressed by a favorable decision" by the court. See Lujan v. Defenders of Wildlife, 504 U.S. 555, 561, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992). While there may be some relationship between the IDB's impending loan to Guyana and the injury of which ATN complains, it is clearly not one of cause-and-effect the federal defendants had nothing to do with Guyana's breach of contract nor is it clear to the Court that impeding the IDB loan would in any way induce Guyana to comply with the contract.

Two District of Columbia cases addressed a like issue, and in neither of them was the plaintiff found to have the requisite standing. In Talenti v. Clinton, 102 F.3d 573 (D.C.Cir.1996), after failing to receive compensation from the Italian government for its expropriation of his real property in Italy, the plaintiff sought to enjoin U.S. foreign aid to the Italian government. The D.C. Circuit held that it would be "mere speculation to assume that a judgment in Talenti's favor would at all ameliorate Talenti's injury." Talenti, 102 F.3d at 577. Similarly, in Aerotrade Inc. v. Agency for International Development, Dep't of State, 387 F.Supp. 974 (D.D.C. 1974), this district court found no standing for a plaintiff seeking to collect moneys allegedly owed it by Haiti for a sale of arms, observing that "plaintiffs notion ... that a suspension of all aid to Haiti would necessarily have the effect of putting pressure on Haiti to come to terms with it" actually gave rise to "considerable uncertainty as to whether such action would aid plaintiff in collecting its debt or would tend to drive Haiti into even greater intransigence." Aerotrade, 387 F.Supp. at 975.²

ATN attempts to distinguish Talenti and Aerotrade, on the grounds that the plaintiffs in those cases sought the end of all foreign aid to a defendant nation, whereas ATN seeks only the denial of a single specific loan. The distinction is hardly helpful. What is to stop Guyana from borrowing money for the same purpose elsewhere, or from simply funding the competing telecommunications system project itself? Perceiving little likelihood that ATN's injury will be "redressed by a favorable decision," granting the relief sought against the federal defendants, Lujan, 504 U.S. at 561, 112 S.Ct. 2130, the Court holds that ATN lacks standing to bring the instant action against them.

ATN claims to be entitled to relief against the federal defendants under two different federal statutes. Count One of its complaint invokes a provision of the Inter-American Development Bank Act, 22 U.S.C. § 283r, (known colloquially as "the Gonzalez Amendment"), and Count Two, a counterpart found in the Foreign Assistance Act, 22 U.S.C. § 2370a(a), ("the Helms Amendment"). Both represent amendments to substantive statutes dealing with foreign economic assistance and purport to instruct the President and his subordinates to act to prevent disbursements to foreign nations that have expropriated the property of United States citizens or repudiated or nullified any contract with a United States citizen.³ The federal defendants assert that neither amendment is enforceable at the instance of a private litigant.

The U.S. Supreme Court has stated that "[t]he question whether a statute creates a [private] cause of action, either expressly or by implication, is basically a matter of statutory construction." Transamerica Mortgage Advisors, Inc. v. Lewis, 444 U.S. 11, 15, 100 S.Ct. 242, 62 L.Ed.2d 146 (1979). But, in the absence of explicit language to that effect, the fact that various private constituencies were intended beneficiaries of legislation does not determine whether its provisions are enforceable by private litigation. Id. at 18, 100 S.Ct. 242. Elsewhere the Supreme Court has said that there is "far less reason to infer a private remedy in favor of individual persons where Congress, rather than drafting the legislation with an unmistakable focus on the benefitted class, instead has framed the statute simply as a general prohibition or a command to a federal agency." Universities Research Association, Inc. v. Coutu, 450 U.S. 754, 772, 101 S.Ct. 1451, 67 L.Ed.2d 662 (1981).

Whether or not the Helms Amendment has superseded the Gonzalez Amendment, see n. 3, neither contains anything approaching explicit language authorizing private litigants to invoke them for purposes of private debt collection or contract enforcement, and indeed, as the Seventh Circuit Court of Appeals has noted, "[i]t would be imprudent for a court to create rights of action that might interfere with the conduct of foreign policy." Israel Aircraft Industries Ltd. v. Sanwa Business Credit Corp., 16 F.3d 198, 202 (7th Cir. 1994).⁴

Further supporting the Court's conclusion that Congress did not intend use of the Gonzalez or Helms Amendments to compel compliance with private contracts with foreign governments is the federal defendants' interrelated third argument, viz., that ATN's complaint raises non-justiciable political questions by attempting to curtail Executive Branch discretion in what is essentially a matter of foreign policy. Foreign aid, including monetary loans for economic development abroad, is an integral component of this country's international relations. To grant or deny a loan to a...