Comsat Corp. v. FINSHIPYARDS SAM

• Decision Date: 15 September 1995
• Docket Number: Civ. No. 94-0165 PLF.
• Parties: COMSAT CORPORATION, Plaintiff, v. FINSHIPYARDS S.A.M., et al., Defendants.
• Court: U.S. District Court — District of Columbia

900 F. Supp. 515

COMSAT CORPORATION, Plaintiff, v. FINSHIPYARDS S.A.M., et al., Defendants.

Civ. No. 94-0165 PLF.

United States District Court, District of Columbia.

September 15, 1995.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Andrew N. Vollmer, Marc R. Cohen, Washington, DC, for plaintiff.

Jack P. Janetatos, Stuart M. Weitz, Washington, DC, for defendants.

OPINION

PAUL L. FRIEDMAN, District Judge.

COMSAT Corporation is an American telecommunications provider that carried long distance telephone calls placed from the Republic of Zaire by Mobutu Sese Seko Kuku Ngbendu Wa Za Banga, the President of Zaire, and by others in Zaire to various places around the world. It sued President Mobutu in his personal capacity and the Republic of Zaire because, COMSAT contends, they have not paid their phone bills. COMSAT also names Finshipyards S.A.M. as a defendant because Finshipyards was responsible for receiving and forwarding COMSAT's invoices to the Zaire defendants and for remitting payment to COMSAT. Finshipyards, a company formed in Monaco and maintaining its principal place of business there, has moved to dismiss this action as to itself on the grounds that the Court lacks personal jurisdiction over it. The Court finds that it does not have jurisdiction over Finshipyards and that COMSAT therefore must seek relief against Finshipyards in another forum.

I. BACKGROUND

COMSAT Corporation is a private entity, incorporated and, at the time of the events underlying this dispute, maintaining its principal place of business in the District of Columbia. It was created under federal law to, among other things, operate a commercial communications satellite system. 47 U.S.C. §§ 731, 735. COMSAT is the United States' sole representative to the International Maritime Satellite Organization ("Inmarsat").

Inmarsat is an international organization established pursuant to the Inmarsat Convention, opened for signature, September 3, 1976, 31 U.S.T. 1. Inmarsat owns, leases and operates telecommunications satellites that permit users to communicate with other persons anywhere in the world. Satellite capacity is made available through private entities such as COMSAT and national telecommunications administrations that own or operate land earth stations ("LESs") capable of sending and receiving signals to and from Inmarsat satellites and connected to terrestrial telecommunications systems. COMSAT is the sole United States' entity authorized by federal law to participate in Inmarsat, for the purpose of providing satellite telecommunications services to users. 47 U.S.C. § 752(a)(1). It owns three LESs located in Connecticut, California and Turkey and charges users for telecommunications services at rates filed with the Federal Communications Commission.

Potential users of the Inmarsat system must commission a mobile earth station ("MES") or terminal which can transmit and receive telecommunications signals directly to and from the Inmarsat satellite.¹ Commissioning such a terminal requires the completion of a Commissioning Application and the appointment of an Accounting Authority. By signing the Application, the applicant agrees to the obligation to pay without delay the charges set by the LES operator for the services provided. The Accounting Authority must be licensed by a member state of the International Telecommunications Union ("ITU"), a United Nations agency. It is expected to receive and pay bills issued by the LES operators and collect payment for the telecommunications services from the terminal owner-operators.

Zaire has commissioned Inmarsat terminals since approximately 1986. In 1988 Finshipyards, which is licensed by Monaco to act as an accounting authority, was appointed to act as Accounting Authority in connection with the Zaire terminals. Under the agreement between Zaire and Finshipyards, in return for its services as Accounting Authority Finshipyards was to receive a commission from Zaire on the amounts paid to Inmarsat LES operators.

The Zaire terminals received telecommunications services from COMSAT LESs in Connecticut, California and Turkey for calls made to Washington, D.C., other parts of the United States and other parts of the world from approximately March 1989 through June 1993. COMSAT sent invoices from its offices in Washington, D.C., to Finshipyards in Monaco for the telephone calls placed from the Zaire terminals and instructed Finshipyards to pay by check to COMSAT in Charlotte, North Carolina, or by transferring funds to a COMSAT bank account in New York City. The invoices also directed that billing inquiries were to be addressed to COMSAT's Washington offices. Finshipyards always made payment by transferring funds to the COMSAT bank account in New York. It paid every COMSAT invoice for service to Zaire terminals from March 1989 to November 1991.

Between January 1990 and May 1993, COMSAT personnel in Washington, D.C., communicated with Finshipyards to complain about late payment or non-payment of Zaire terminals' invoices. Finshipyards responded to these communications and, plaintiff alleges, made representations regarding its intention to pay these invoices. In response to its own difficulty in collecting payment from Zaire, sometime in 1992 Finshipyards sent out a document to the LES operators from whom it had received invoices, including COMSAT in Washington, D.C., indicating that they should bar all calls originating from the Zaire terminals. In November 1992, COMSAT suspended service to certain Zaire terminals and met with Zaire's Ambassador to the United States to demand payment.

COMSAT has brought this action, claiming that Finshipyards was a principal participant in the telecommunication transactions for which COMSAT has not yet received payment and that Finshipyards owes COMSAT for those telecommunications services despite the fact that Finshipyards may not yet have collected payment from the Zaire terminals. COMSAT alleges breach of implied contract by Finshipyards, seeks payment of account stated, and claims that Finshipyards violated the Communications Act, 47 U.S.C. § 203(a).² Finshipyards has moved to dismiss COMSAT's complaint for lack of personal jurisdiction, insufficiency of process, insufficiency of service of process, and for failure to state a claim under the Communications Act. The Court heard oral argument on Finshipyards' motion. For the reasons stated below, the Court finds that it lacks jurisdiction over defendant Finshipyards and dismisses this action.

II. DISCUSSION

A federal court may exercise personal jurisdiction over a non-resident defendant only when service of process is authorized by statute and only when consistent with due process of law. International Shoe Co. v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945); Founding Church of Scientology of Washington, D.C. v. Verlag, 536 F.2d 429, 432 (D.C.Cir.1976). In this federal question case, the Court first must look to the District of Columbia long-arm statute to determine whether it has personal jurisdiction. Edmond v. United States Postal Service General Counsel, 949 F.2d 415, 424 (D.C.Cir.1991). If that analysis demonstrates that the defendant would not be subject to the jurisdiction of the District of Columbia courts, the Court may look to Rule 4(k), Fed.R.Civ.P., which may permit a more expansive jurisdictional analysis.

A. District of Columbia Long-Arm Statute

Under the District of Columbia long-arm statute, a plaintiff has the burden of establishing that personal jurisdiction exists by demonstrating a factual basis for the exercise of such jurisdiction over the defendant. Edmond v. United States Postal Service General Counsel, 949 F.2d at 424; Crane v. New York Zoological Soc., 894 F.2d 454, 456 (D.C.Cir.1990); Dooley v. United Technologies Corp., 786 F.Supp. 65, 70 (D.D.C.1992). While the long-arm statute is interpreted broadly and factual disputes are resolved in favor of the plaintiff, the plaintiff must allege some specific facts evidencing purposeful activity by the defendant in the District of Columbia by which it invoked the benefits and protections of the District's laws. Edmond v. United States Postal Service General Counsel, 949 F.2d at 428; First Chicago Int'l v. United Exchange Co. Ltd., 836 F.2d 1375, 1378-79 (D.C.Cir.1988); Mitchell Energy Corp. v. Mary Helen Coal Co. Inc., 524 F.Supp. 558, 563 (D.D.C.1981); Meyers v. Smith, 460 F.Supp. 621, 622 (D.D.C.1978).

In this case, plaintiff relies on both the "transacting business" and "contracting to supply services" provisions of the District of Columbia long-arm statute, D.C.Code §§ 13-423(a)(1) and (2).³ Because a court in the District may exercise jurisdiction over a non-resident defendant "only for a claim for relief arising from the specific acts enumerated in the statute ...," D.C.Code § 13-423(b), plaintiff's jurisdictional allegations must arise from the same conduct of which the plaintiff complains. Willis v. Willis, 655 F.2d 1333, 1336 (D.C.Cir.1981); Dooley v. United Technologies Corp., 786 F.Supp. at 71; LaBrier v. A.H. Robins Co., Inc., 551 F.Supp. 53 (D.D.C.1982).

1. Transacting Business

The "transacting business" provision of the District of Columbia long-arm statute permits the exercise of personal jurisdiction to the full extent permitted by the Due Process Clause of the Constitution. First Chicago Int'l v. United Exchange Co. Ltd., 836 F.2d at 1377; Environmental Research Int'l, Inc. v. Lockwood Greene Eng'rs, Inc., 355 A.2d 808, 810-811 (D.C.1976) (en banc). The constitutional touchstone of the due process determination is "whether the defendant purposefully established minimum contacts in the forum state." Asahi Metal Industry Co. v. Superior Court, 480 U.S. 102, 108-09, 107 S.Ct. 1026, 1030, 94 L.Ed.2d 92 (1987) (internal citations and emphasis omitted).

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