Bridgeway Corp. v. Citibank

• Court: U.S. Court of Appeals — Second Circuit
• Writing for the Court: CALABRESI
• Citation: Bridgeway Corp. v. Citibank, 201 F.3d 134 (2nd Cir. 1999)
• Decision Date: 01 August 1999
• Docket Number: Docket No. 99-7504
• Parties: (2nd Cir. 2000) BRIDGEWAY CORPORATION, Plaintiff-Appellant, v. CITIBANK, doing business as Citicorp N.A., Defendant-Appellee

Page 134

201 F.3d 134 (2nd Cir. 2000)

BRIDGEWAY CORPORATION, Plaintiff-Appellant, v. CITIBANK, doing business as Citicorp N.A., Defendant-Appellee.

Docket No. 99-7504

August Term, 1999

UNITED STATES COURT OF APPEALS SECOND CIRCUIT

Argued: Nov. 24, 1999

Decided: Jan. 3, 2000

The plaintiff, a Liberian corporation, appeals from a decision of the United States District Court for the Southern District of New York (Denny Chin, Judge) denying plaintiff's motion for summary judgment and granting sua sponte summary judgment in favor of the defendant. We affirm. [Copyrighted Material Omitted]

[Copyrighted Material Omitted] MICHAEL J. CALVEY, New York, N.Y. (Thomas G. Amon and Mark J. Lawless, of counsel, on the brief), for Plaintiff-Appellant.

J. KELLEY NEVLING, Jr., New York, N.Y. (Petra T. Nasheff, of counsel, on the brief), for Defendant-Appellee.

Before: LEVAL, CALABRESI, and KATZMANN, Circuit Judges.

CALABRESI, Circuit Judge:

Bridgeway Corp. ("Bridgeway"), a Liberian corporation seeking to enforce a final judgment rendered by the Supreme Court of Liberia, appeals from the district court's decision denying Bridgeway's motion for summary judgment and granting, sua sponte, summary judgment in favor of the nonmoving party, Citibank. The district court held, first, that Citibank was not judicially estopped from challenging the fairness of the Liberian judicial system simply because it had participated voluntarily in litigation in Liberia and, second, that the evidence in the record established, as a matter of law, that the Liberian judicial system was not "a system that . . . provide[s] impartial tribunals or procedures compatible with the requirements of due process." Bridgeway Corp. v. Citibank, 45 F. Supp. 2d 276, 288 (S.D.N.Y. 1999). We affirm.

I. BACKGROUND

A. Overview of Liberian History

This appeal derives from an action by Bridgeway to enforce a money judgment against Citibank entered by the Supreme Court of Liberia on July 28, 1995. Because the merits of this case turn on the events surrounding the Liberian civil war during the first half of the 1990s, it is helpful to provide a brief overview of those circumstances before proceeding to discuss the case. The following facts are drawn from the district court's thoughtful opinion and are not traversed in the record before us.

Liberia was founded in 1817 to resettle freed American slaves, and in 1847 it became an independent republic. The original 1847 Constitution, amended in 1976 and again in 1986, established a government modeled on that of the United States. Under the 1986 Constitution, for example, the judicial powers of the Liberian government are vested in a Supreme Court and such subordinate courts as the Legislature may establish. The Supreme Court is composed of one chief justice and four associate justices. Justices and judges are nominated by the President and confirmed by the Senate and have life tenure unless impeached.

From 1980 to 1989, Samuel Kanyon Doe headed a Liberian government marked by corruption and human rights abuses, as well as by rampant inflation. In 1989, a group of dissidents seized power and, in 1990, executed Doe. Doe's death marked the beginning of a violent seven-year civil war. By 1991, Liberia was in effect ruled by two governments: one controlled Monrovia, the capital, while the other controlled the remainder of the country. Following several short-lived cease fires, a formal peace accord was signed in August 1995. After another outbreak of violence in 1996, elections were held in July 1997. In August 1997, Charles Taylor was inaugurated and the 1986 Constitution was reinstated.

Throughout the period of civil war, Liberia's judicial system was in a state of disarray and the provisions of the Constitution concerning the judiciary were no longer followed. Instead, under an agreement worked out among the warring parties in 1992, the Supreme Court was reorganized, with various factions each unilaterally appointing a specified number of justices. The U.S. State Department Country Reports for Libiera during this period paint a bleak picture of the Liberian judiciary. The 1994 Report observed that "corruption and incompetent handling of cases remained a recurrent problem." The 1996 Report stated that, "the judicial system, already hampered by inefficiency and corruption, collapsed for six months following the outbreak of fighting in April."

In 1997, before elections were held, the leaders of the various factions acknowledged that the integrity of the Supreme Court had been compromised by factional loyalties since 1992 and agreed that the Court would have to be reconstituted so that it might gain the legitimacy that would enable it to resolve successfully disputes that might arise concerning the elections. The members of the Court were therefore dismissed and new members were appointed based on the recommendations of the Liberian National Bar Association.

B. This Case

Plaintiff-appellant Bridgeway is a Liberian corporation with its principal place of business in Monrovia, Liberia. Defendant-appellee, Citibank, is a U.S. banking corporation with its principal place of business in New York. For many years Citibank maintained a branch in Monrovia, but it closed that branch in January 1992 and completely withdrew from Liberia by 1995. As required by Liberian law, Citibank, before withdrawing, formulated a plan of liquidation, which was approved by the National Bank of Liberia. According to this plan, funds were to be remitted by Citibank to Meridian Bank Liberia Ltd., in order to meet Citibank's obligations to depositors. Citibank alerted its customers to its plans so that they could withdraw their funds. On April 21, 1995, the National Bank of Liberia indicated by letter that Citibank had satisfactorily completed the liquidation plan and was no longer licensed to do business in Liberia.

Bridgeway had an account at Citibank's Liberian branch with a balance of $189,376.66. In November 1992, Bridgeway brought suit in Liberia against Citibank, seeking a declaration that Citibank was obligated to pay Bridgeway its balance in U.S. (rather than Liberian) dollars. In August 1993, the trial court ruled in favor of Citibank. The court found that, under Liberian law, a person may not refuse to accept Liberian dollars for the discharge of an obligation unless there is an express agreement to the contrary and that Liberian law gives the Liberian dollar a par value equal to the value of the U.S. dollar. The trial court also found that under Bridgeway's contract with Citibank, the latter had the right to decide the currency in which a withdrawal would be paid. Bridgeway appealed to the Liberian Supreme Court, which reversed the lower court's decision and entered judgment for Bridgeway.

Bridgeway filed suit in New York state court to enforce the Liberian Supreme Court judgment, and Citibank removed the case to the federal district court. When it became apparent that Citibank was going to defend itself by challenging the legitimacy of the Liberian judicial system, Bridgeway moved for summary judgment -- arguing that Citibank was estopped from questioning the fairness of the Liberian judiciary. But the district court denied that motion and, sua sponte, granted summary judgment for Citibank. Specifically, the court found that, as a matter of law, Liberia's courts did not constitute "a system of jurisprudence likely to secure an impartial administration of justice" and that, as a result, the Liberian judgment was unenforceable in the United States. See Bridgeway, 45 F. Supp. 2d at 287. Bridgeway now appeals.

II. DISCUSSION

A. Sua Sponte Summary Judgment Against the Moving Party

Bridgeway argues that the district court erred in granting summary judgment against it sua sponte without prior notice. In so acting, Bridgeway alleges, the district court deprived Bridgeway of an adequate opportunity to develop and present its case.

While it is not necessarily reversible error in our circuit for a district court to grant summary judgment against the moving party without notice or opportunity to defend, Coach Leatherware Co. v. AnnTaylor, Inc., 933 F.2d 162, 167 (2d Cir. 1991) ("[The] court need not give notice of its intention to enter summary judgment against the moving party."), we have firmly discouraged the practice. In Coach, we made clear that grants of summary judgment without notice will be tolerated only in the absence of "some indication that the moving party might otherwise bring forward evidence that would affect the . . . determination," id., when "the facts before the district court were fully developed so that the moving party suffered no procedural prejudice." (Now Chief) Judge Winter stressed in his concurrence that such "grants of summary judgment are rare and should be employed only when a court is absolutely sure that no issue of material fact exists." Id. at 172 (Winter, J., concurring in part and dissenting in part); see also Ramsey v. Coughlin, 94 F.3d 71, 74 (2d Cir. 1996) ("Before granting summary judgment sua sponte [without notice], the district court must assure itself that following the procedures set out in Rule 56 [for notice and opportunity to defend] would not alter the outcome."). District courts are well advised to give clear and express notice before granting summary judgment sua sponte, even against parties who have themselves moved for summary judgment. The provision of such notice requires relatively little time or effort, and it permits appellate courts much more readily to determine -- as they are required to do -- whether "the absence of a cross motion affected the result." Coach Leatherware Co., 933 F.2d at 167; see also Snider v. Melindez, 1999 F.3d 108, 113 (2d Cir. 1999)("[P]roviding the adversely affected party with notice and an opportunity to be heard plays an important role in establishing the fairness and reliability of the order.").

If the district court fails to give notice before...