Celestin v. Caribbean Air Mail, Inc.
| Decision Date | 31 March 2022 |
| Docket Number | Docket No. 20-1412,August Term, 2021 |
| Citation | 30 F.4th 133 |
| Parties | Odilon S. CELESTIN, Widimir Romelien, Goldie Lamothe-Alexandre, Vincent Marazita, Plaintiffs-Appellants, v. CARIBBEAN AIR MAIL, INC., Western Union, Unitransfer USA, Inc., Unibank, S.A., Unigestion Holding, S.A., dba Digicel Haiti, Western Union Financial Services, Inc., Michel Joseph Martelly, Jocelerme Privert, Jovenel Moise, Natcom S.A., Government of Haiti, Defendants-Appellees. |
| Court | U.S. Court of Appeals — Second Circuit |
Rodney Austin, Rodney R. Austin PLLC, Fresh Meadows, NY (Marcel P. Denis, Denis Law Group, PLLC, Brooklyn, NY, on the brief), for Plaintiffs-Appellants.
James I. McClammy (James H.R. Windels, Robert G. King, on the brief), Davis Polk & Wardwell LLP, New York, NY, for Defendant-Appellee Unigestion Holding, S.A., DBA Digicel Haiti.
Andrew P. Fishkin, Fishkin Lucks LLP, New York, NY, for Defendant-Appellee The Western Union Company.
Stephen H. Nakamura, Andrew R. Peck, Merle Brown & Nakamura P.C., New York, NY, for Defendant-Appellee Caribbean Air Mail, Inc.
Oliver M. Birman, Benjamin L. Reiss, Paul D. Turner, Perlman, Bajandas, Yevoli & Albright, P.L., Fort Lauderdale, FL; Kieran M. Corcoran, Stinson LLP, New York, NY, for Defendants-Appellees Unitransfer USA, Inc., and Unibank, S.A.
Bertrand Madsen, Madsen Law P.C., New York, NY, for Defendants-Appellees Michel Joseph Martelly, Jocelerme Privert, Jovenel Moise, and Government of Haiti.
Macx L. Jean-Louis, Law Offices of Macx L. Jean-Louis P.C., New York, NY, for Defendant-Appellee Natcom S.A.
Before: Newman, Park, and Lee, Circuit Judges.
Judge Newman concurs in a separate opinion.
Under the act of state doctrine, U.S. courts may not declare the official acts of a foreign sovereign to be invalid. But the doctrine does not bar our adjudication of whether those same acts are wrongful under a cause of action properly brought before us. See W.S. Kirkpatrick & Co. v. Env't Tectonics Corp., Int'l , 493 U.S. 400, 110 S.Ct. 701, 107 L.Ed.2d 816 (1990).
This case presents the question whether the act of state doctrine requires dismissal of an antitrust claim implicating official acts of the Haitian government. Plaintiffs are U.S. residents who allege that multinational corporations conspired with Haitian officials to fix the prices of remittances and telephone calls made between Plaintiffs and their contacts in Haiti. To implement the scheme, Plaintiffs allege, Defendants clothed their agreement in formal executive actions of the Haitian government. The district court dismissed Plaintiffs’ claim based on the act of state doctrine, reasoning that Plaintiffs could not bring their antitrust claim because the court would have to adjudge the "propriety" of Haiti's official acts.
We hold that the act of state doctrine does not foreclose Plaintiffs’ antitrust claim because no official act of Haiti must be deemed invalid for liability to attach under federal law. We thus reverse in part. We also vacate the district court's dismissal of fifteen state-law claims and remand for reanalysis under the correct standard. We further vacate the court's alternative dismissal under forum non conveniens because it did not give due deference to U.S.-resident Plaintiffs’ choice of forum.
Plaintiffs are U.S. residents with relatives and friends in Haiti. Defendants Caribbean Air Mail, Inc., Western Union, Unitransfer USA, Inc., Unibank, S.A., Unigestion Holding, S.A., and Western Union Financial Services, Inc. (the "Corporate Defendants") are companies that facilitate remittances and phone calls between the United States and Haiti. In addition to the Corporate Defendants, Plaintiffs brought this action against the Government of Haiti and three of its former Presidents, Michel Joseph Martelly, Jocelerme Privert, and Jovenel Moise, along with Natcom S.A., a telecommunications company partly owned by the Haitian government (the "Government Defendants").
As alleged,1 Martelly orchestrated a far-reaching price-fixing agreement with the Corporate Defendants before becoming President in 2011. The "mechanism" for implementing the agreement was a Presidential Order and two Circulars of the Bank of the Republic of Haiti that Martelly would issue after taking office. Compl. ¶ 56. The Presidential Order set a "floor price for all incoming international call[s]" at $0.23 per minute and required that $0.05 per minute be "turned over to the Government." Id. ¶¶ 60–61. Similarly, the Circulars "memorialized" Defendants’ agreement to add a $1.50 fee to remittances of food and money sent to Haiti from certain countries, including the United States. Id. ¶ 65. Under both the Presidential Order and the Circulars, the Corporate Defendants and Natcom would collect these surcharges at the source—in Plaintiffs’ case, in the United States—as a condition of eligibility to provide services.
Martelly represented to the public that these policies would raise revenues to support a Haitian compulsory education program. But in fact, Plaintiffs say, no such program existed. Rather, just months after publication of the Presidential Order, "it was discovered that [$26] million in the new National Fund for Education was missing." Id. ¶ 82. Plaintiffs assert that each Corporate Defendant retained a portion of the fees it collected rather than transmitting the full amount to the Haitian treasury. And Martelly, Privert, and Moise, during their respective terms, profited personally from the fees as well. Moreover, Plaintiffs say that the Presidential Order and Circulars ran afoul of Haitian law because "only the parliament may raise taxes and fees for the benefit of the state." Id. ¶ 57 & n.6. As part of the scheme, Plaintiffs allege, Defendants told customers that these fees were in fact collected pursuant to a "lawful tax" for education. Id. ¶¶ 50, 72, 98, 119, 136, 150, 169, 188, 190, 198, 208.
According to the Complaint, all Corporate Defendants agreed to this scheme and joined as full participants. After Martelly's departure from the presidency in 2016, his successors, Privert and Moise, continued his misconduct. The price-fixing scheme "has caused a significant, lasting and ultimately harmful rippling effect in communities in the United States who must remit money [and] food, and place phone calls to Haiti, which is still ongoing." Id. ¶ 74.
Plaintiffs brought a putative class action in the U.S. District Court for the Eastern District of New York on behalf of "[a]ll persons in the United States and its territories who used the services of one or more of the [Corporate Defendants or Natcom] ... who were subjected to paying the $1.50 [fee] on money and food transfers made to and from Haiti and $0.05 per minute [fee] on phone calls placed to and from Haiti." Id. ¶ 39. The Complaint raises a claim of price-fixing in violation of Section 1 of the Sherman Act, 15 U.S.C. § 1, and fifteen state-law claims including false advertising and fraud. See, e.g. , Compl. ¶ 296 (). The district court granted Defendants’ motions to dismiss in two separate opinions.
First, the district court dismissed all claims against the Corporate Defendants under the act of state doctrine and, in the alternative, under forum non conveniens . See Celestin v. Martelly (Celestin I ), 524 F. Supp. 3d 43 (E.D.N.Y. 2021). The district court noted that the act of state doctrine applies where "the relief sought or the defense interposed would require a court in the United States to declare invalid the official act of a foreign sovereign performed within its own territory." Id. at 48 (cleaned up) (quoting Kirkpatrick , 493 U.S. at 405, 110 S.Ct. 701 ). It then reasoned that "the [c]ourt cannot adjudicate Plaintiffs’ claims without necessarily judging the propriety of official actions of Haiti's government and its leaders." Id. It thus dismissed all counts under Federal Rule of Civil Procedure 12(b)(6) for failure to state a cognizable claim. On forum non conveniens , the district court conducted the three-step analysis required under our case law in a footnote and concluded that the case should be heard in Haiti. Id. at 51 n.6.
Second, the district court dismissed all claims against the Government Defendants under the law of the case doctrine. See Celestin v. Martelly (Celestin II ), No. 18-cv-7340, 2021 WL 918290 (E.D.N.Y. Mar. 10, 2021). The court followed its earlier ruling based on the act of state doctrine and declined to reach the issue of forum non conveniens . Id. at *2, *3 n.4. Plaintiffs timely appealed both rulings.
Review of a district court's dismissal of a complaint for failure to state a claim under Rule 12(b)(6), including dismissal under the act of state doctrine, is de novo. See Kashef v. BNP Paribas S.A. , 925 F.3d 53, 58 (2d Cir. 2019).
Review of dismissal under forum non conveniens is for abuse of discretion. Pollux Holding Ltd. v. Chase Manhattan Bank , 329 F.3d 64, 70 (2d Cir. 2003). "Discretion is abused in the context of forum non conveniens when a decision (1) rests either on an error of law or on a clearly erroneous finding of fact, or (2) cannot be located within the range of permissible decisions, or (3) fails to consider all the relevant factors or unreasonably balances those factors." Id. (citation omitted).
The act of state doctrine bars federal and state courts from "declar[ing] invalid, and thus ineffective as a rule of decision for the courts of this country, the official act of a foreign sovereign." Kirkpatrick , 493 U.S. at 405, 110 S.Ct. 701 (cleaned up). The doctrine is not a principle of abstention, a grant of immunity, or a bar on liability based on compliance with foreign laws. Rather, the act of state doctrine is a ...
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