Bayer & Willis Inc. v. Republic of Gambia

• Decision Date: 11 September 2003
• Docket Number: No. CIV.A 02-0176(EGS).,CIV.A 02-0176(EGS).
• Citation: 283 F.Supp.2d 1
• Court: U.S. District Court — District of Columbia
• Parties: BAYER & WILLIS INC., et al., Plaintiffs, v. REPUBLIC OF the GAMBIA, et al., Defendants.

Page 1

283 F.Supp.2d 1

BAYER & WILLIS INC., et al., Plaintiffs, v. REPUBLIC OF the GAMBIA, et al., Defendants.

No. CIV.A 02-0176(EGS).

United States District Court, District of Columbia.

September 11, 2003.

Minh Ngoc T. Nguyen, Stephen L. Bluestone, Bluestone Law Ltd., Bethesda, MD, for Plaintiffs.

Edward R. McNicholas, Sidley, Austin, Brown & Wood, LLP, Washington, DC, for AT&T Corp.

John Edward McCaffrey, Stinson, Morrison, Hecker, LLP, Washington, DC, for Sprint International Communications Corp.

MEMORANDUM OPINION AND ORDER

SULLIVAN, District Judge.

On October 8, 2002, after satisfying itself that the requirements of the Foreign Sovereign Immunity Act ("FSIA"), 28 U.S.C. §§ 1602-1611, had been met, this Court awarded plaintiff a default judgment against defendant the Republic of Gambia. On November 20, 2002, at plaintiff's request, the Clerk of the Court issued Writs of Attachment on Judgment and interrogatories to AT & T Corporation ("AT & T"), IDT Corporation ("IDT"), Sprint International Communication "Sprint", and MCI Worldcom ("MCI"). On December 20, 2002, plaintiff moved for entry of final judgment against all corporations except IDT. On January 31, 2003, after filing unopposed motions for extensions of time to answer, all corporations, again with the exception of IDT, answered the interrogatories accompanying the Writs of Attachment. In addition, AT & T moved to dismiss its Writ of Attachment. Plaintiff subsequently moved to traverse the answers of AT & T and Sprint Communications, but later withdrew the motion to traverse against Sprint.

Several motions remain pending before the Court: garnishee AT & T's motion to dismiss the Writ of Attachment, plaintiff's motions for judgment against AT & T, Sprint and MCI Worldcom, and plaintiff's motion to traverse AT & T's answers to interrogatories. The Court will address each of these in turn.

I. Motion to Dismiss Writ of Attachment

In its answer and its motion to dismiss its Writ of Attachment, AT & T makes two arguments, the first procedural and the second substantive.

A) Failure to comply with procedural requirements of the FSIA

First, AT & T objects to the issuance of the November 20, 2002 Writ of Attachment by the Clerk of the Court, arguing that, in actions governed by the Foreign Sovereign Immunities Act ("FSIA"), 28 U.S.C. §§ 1602-1611, such a writ must be issued by the Court itself. The statutory section on which it relies provides that

[n]o attachment or execution ... shall be permitted until the court has ordered such attachment and execution after having determined that a reasonable period of time has elapsed following the entry of judgment and the giving of any notice required under section 1608(e) of this chapter.

28 U.S.C. § 1610(c); see also Ned Chartering and Trading, Inc. v. Republic of Pakistan, 130 F.Supp.2d 64, 66 (D.D.C.2001) (finding writs of attachment issued by Clerk of the Court in connection with judgment entered against foreign sovereign invalid under § 1610(c)) (citing cases); see also Connecticut Bank v. Republic of Congo, 309 F.3d 240, 247, 250 (5th Cir.2002) ("Some jurisdictions permit judgment creditors to execute against property simply by applying to the clerk of the court or to a sheriff. Section 1610(c) does not permit such summary procedures to be used when a foreign sovereign's property is involved. Instead, it requires a court to enter the writ of execution, so that the court can determine whether the property in question falls within one of the statutory exceptions to foreign sovereign immunity.").

Plaintiff appears to concede this point, and, in its opposition to AT & T's motion to dismiss, expressly asks the Court to either re-issue the Writ of Attachment nunc pro tunc, or simply issue a Writ of Execution against the property of Gambia Telecommunications Co., Ltd. ("Gamtel") held by AT & T.

Accordingly, AT & T's motion to dismiss the existing Writ, issued by the Clerk of the Court on November 20, 2002, is hereby GRANTED. Furthermore, the Court will, sua sponte, DISMISS the remaining Writs issued by the Clerk of the Court on November 20, 2002 against Sprint, MCI, and IDT, and DENY as moot the motions for judgment against MCI and Sprint.

It appears that it would be procedurally proper for the Court to issue new writs of attachment and interrogatories against the three corporations nunc pro tunc, based on a finding that, by November 20, 2002, a "reasonable period of time ha[d] elapsed following the entry of judgment and the giving of any notice required" See Ned Chartering and Trading, Inc. v. Republic of Pakistan, 130 F.Supp.2d at 67 (finding six weeks between entry of judgment and issuance of writ to be sufficient to meet Section 1610(c)'s requirement that "a reasonable period of time has elapsed" prior to issuance of writ of attachment against foreign sovereign). However, the Court finds that the substantive argument raised in AT & T's motion to dismiss the existing Writ of Attachment counsels against granting plaintiff's alternate request for a Writ of Execution against the property of Gamtel held by AT & T.

B) Propriety of executing judgment against AT & T

AT & T maintains that it is an improper garnishee for the purposes of satisfying plaintiff's judgment against the Republic of Gambia because it does not hold any assets belonging to either of the two named defendants in this case, the Republic of Gambia and the Embassy of the Republic of Gambia. AT & T does concede, however, that it holds assets of Gambia Telecommunications Co., Ltd. ("Gamtel"),¹ but argues that entity is not a defendant in this action, is not named on the Writ of Attachment, and "has not been adjudged by this Court to lack a distinct corporate existence to such a degree that it should be held liable for the debts of the Defendants." AT & T Mot. to Dismiss at 2.

The FSIA provides that "the property in the United States of a foreign state shall be immune from attachment, arrest and execution" except, inter alia, where the property is used for a commercial activity in the United States. 28 U.S.C. § 1601(a)(2); see also Connecticut Bank v. Republic of Congo, 309 F.3d at 251-53 ("What matters under the statute is what the property is `used for,' not how it was generated or produced."); Alejandre v. Telefonica Larga Distancia de Puerto Rico, Inc., 183 F.3d 1277, 1283 (11th Cir.1999) (finding that, assuming amounts owed to Cuban telephone company by American telephone company were used for a commercial activity in the U.S., they were not immune from garnishment to satisfy judgment against foreign government under the FSIA).

Plaintiff appears to seek attachment of Gamtel's assets on the theory that, as an instrumentality of the Republic of Gambia, its assets may be attached in aid of execution of plaintiff's judgment against the defendants. An "agency or instrumentality" is defined in the Act as any entity which "is a separate legal person, corporate or otherwise, and ... which is an organ of a foreign state ..., or a majority of whose shares or other ownership interest is owned by a foreign state, and ... which is neither a citizen of a State of the United States ..., nor created under the laws of any third country." 28 U.S.C. § 1603(b). The statute further stipulates that

any property in the United States of an agency or instrumentality of a foreign state engaged in commercial activity in the United States shall not be immune from attachment in aid of execution, or from execution, upon a judgment entered by a court of the United States ....

28 U.S.C. § 1610(b).

Plaintiff submits, citing to public documents, that Gamtel is a "parastatal entity" operated "under Government directives and support." See Pl.'s Opp'n at 7, Ex. 7 ("Gamtel, under Government directives and support, provided direction for the prompt implementation of the IIA project ...."). In support of it position, plaintiff emphasizes that the Republic of Gambia holds 99% of Gamtel's stock, Gamtel's Managing Director is the country's Minister of Works, Communication and Information, and the Board of Directors is appointed by the President of the Republic of Gambia. See Pl.'s Opp'n at 7, Ex. 7 ("Gamtel, under Government directives and support, provided direction for the prompt implementation of the IIA project ...."). AT & T counters that Gamtel is "partially owned by a third party (Gambia National Insurance Company)," although, as plaintiff points out, that company owns only 1% of Gamtel's stock. Nevertheless, it appears clear on the undisputed facts before the Court, namely that the Republic of Gambia owns 99% of Gamtel's stock, that Gamtel meets the FSIA's definition of an "agency or instrumentality."

Where seeking to attach the property of a foreign agency or instrumentality, there is no requirement that the attached property be "used for a commercial activity in the United States" as there is when a party seeks to directly attach the property of a foreign sovereign. Connecticut Bank v. Republic of Congo, 309 F.3d at 252-53. However, the plain language of the statute requires that the "agency or instrumentality" whose assets are to be seized be "engaged in commercial activity in the United States" in order for immunity to be unavailable under the FSIA. It is not clear on the record currently before the Court whether Gamtel is "engaged in commercial activity" in the U.S., and further discovery in this area appears to be warranted before the Court could order execution on Gamtel's assets under 28 U.S.C. § 1610.

Furthermore, an entity's status as an agency or instrumentality of a foreign sovereign is insufficient, without more, to establish that the entity is liable for the debts of the foreign state.² There exists a presumption of a separate corporate existence between a parent and its subsidiary which can only be overcome where a subsidiary is so controlled by its parent that a principal-agent relationship is created, or where "recognition of the...