Edwards v. Fed. Gov't of Nigeria
| Decision Date | 18 December 2018 |
| Docket Number | Civil Action No. 18-11133-FDS |
| Parties | DR. TED ISEGHOHI EDWARDS, Plaintiff, v. FEDERAL GOVERNMENT OF NIGERIA, et al., Defendants. |
| Court | U.S. District Court — District of Massachusetts |
MEMORANDUM AND ORDER ON DEFENDANTS' MOTIONS TO DISMISS
This is an action to enforce a judgment of the Federal High Court of Nigeria. Plaintiff Dr. Ted Iseghohi Edwards seeks $318 million in contingency fees that he contends were awarded by the Federal High Court for representing local Nigerian governments in a suit against the federal government of Nigeria. Defendants, a group of eleven Nigerian government entities and officials, have filed two motions to dismiss the complaint. For the following reasons, both motions to dismiss will be granted.
The facts are set forth as alleged in the complaint.
According to the complaint, on June 11, 2013, a consultancy company and 235 local Nigerian governments filed an action in the Federal High Court of Nigeria to recover money allegedly owed to them by the federal government of Nigeria. (Pl. Ex. 2).1 Edwards alleges that he provided legal consultation to the local governments in that suit. (Pl. Ex. 3). On December 13, 2013, the Federal High Court issued a judgment in favor of the company and local governments for approximately $3.18 billion. (Pl. Ex. 2).
On July 4, 2015, Edwards filed an action in the Federal High Court against the Incorporated Trustees of Association of Local Governments of Nigeria. (Pl. Ex. 3). Edwards sought to recover a ten percent "contingency fee" he contended he was owed for the legal work he had performed for the local governments as part of their 2013 case. (Id.). On October 30, 2015, the Federal High Court issued Edwards a judgment for approximately $3.18 million. (Id.). The judgment also provided that Edwards was "entitled to be paid . . . 10% of any recovery made and or of proceeds from any source whatsoever of the [2013] Judgment." (Id.).
On November 18, 2015, Edwards brought an action seeking to recover the ten percent ($3.18 million) from the Central Bank of Nigeria. (Pl. Ex. 6). On October 3, 2016, the Federal High Court issued an order directing the Central Bank of Nigeria to pay Edwards that amount. (Id.).
On October 28, 2016, Edwards filed an action in the Federal High Court against the Central Bank of Nigeria, the federal government of Nigeria, and nine entities and officials of the federal government. (Pl. Ex. 1). Among other things, the suit sought (1) a declaration that, by virtue of the Federal High Court's 2013 decision, the Central Bank of Nigeria was not to "disburse any sum of money to anyone . . . without first deducting and paying . . . $318 million . . . to Edwards," and (2) "[a]n [o]rder directing the Central Bank of Nigeria to deduct and pay . . . $318 million to Edwards" pursuant to the Federal High Court's 2016 decision. (Id.).
On February 16, 2018, the Federal High Court issued an order granting all the relief requested, except as to one defendant, the Economic and Financial Crimes Division, which it held had not been notified of the action. (Pl. Ex. 1a).
On April 17, 2018, Edwards attempted to register the Federal High Court's February 2018 judgment with this Court. (Registration of Foreign Judgment, Dr. Ted Iseghohi-Edwards v. Fed. Gov't of Nigeria, No. 18-mc-91146-FDS (D. Mass. Apr. 17, 2018)). Because Edwards did not serve any of the defendants, the case was dismissed without prejudice.
On May 30, 2018, Edwards filed a civil action against the alleged judgment debtors seeks to have the Nigerian judgment recognized by a court in the United States. Instead of serving the defendants, however, Edwards filed a motion for service by the clerk and a motion for summary judgment. The Court denied both motions on June 4, 2018. Edwards then served the eleven defendants on June 7 and June 8.
On August 30, 2018, the Central Bank of Nigeria filed a motion to dismiss the complaint. The other ten defendants filed a motion to dismiss on September 28, 2018. The two motions will be considered together.
All defendants contend that they are entitled to immunity under the Foreign Sovereign Immunities Act ("FSIA"), 28 U.S.C. §§ 1602, et seq.
The FSIA is "the sole basis for obtaining jurisdiction over a foreign state in [United States] courts." Argentine Republic v. Amerada Hess Shipping Corp., 488 U.S. 428, 434 (1989). "Under the FSIA, a foreign state is presumptively immune from the jurisdiction of the UnitedStates Courts; unless a specified exception applies, a federal court lacks subject matter jurisdiction over a claim against a foreign state." Saudi Arabia v. Nelson, 507 U.S. 349, 355 (1993) (citing Verlinden B.V. v. Central Bank of Nigeria, 461 U.S. 480, 488-89 (1983)).
A "foreign state," as used in the FSIA, "includes . . . an agency or instrumentality of a foreign state." 28 U.S.C. § 1603(a).
At the outset, it is clear that the Federal Government of Nigeria is a foreign state. See Adler v. Federal Republic of Nigeria, 107 F.3d 720, 723 (9th Cir. 1997). Three other defendants—the Nigeria Police Force, the State Security Services, and the Economic and Financial Crimes Commission—are law-enforcement agencies that perform core government functions. Accordingly, the Court has no difficulty concluding that each of them constitutes a "foreign state" under the FSIA.
It is also clear that the Central Bank is an "instrumentality" of Nigeria. Indeed, Edwards does not contest that the Central Bank is an instrumentality for purposes of the FSIA; in fact, the complaint cites to § 1603(b) and refers to all of the defendants, including the Central Bank, as "sovereign states within the definition and context of the [FSIA]." (Compl., Docket No. 1, § II(A)(2)).2 Other courts have also concluded that the Central Bank is an "instrumentality" of Nigeria. See, e.g., Adler, 107 F.3d at 723 (); Verlinden B.V. v. Central Bank of Nigeria, 647 F.2d 320, 322, n.4 (2d Cir. 1981) ( ), vacated on other grounds, 461 U.S. 480 (1983).
The six other defendants—the Attorney General of the Federation, the Accountant General of the Federation, the Minister of Finance, the Secretary to the Government of the Federation, the Inspector General of Police, and the Director General of State Security Services—are high-ranking officials of the Nigerian federal government.
"[T]o determine whether a suit against a foreign official is governed by the FSIA," a court Odhiambo v. Republic of Kenya, 930 F. Supp. 2d 17, 34 (D.D.C. Mar. 13, 2013) (quoting Samantar v. Yousuf, 560 U.S. 305, 324 (2010)).
The suit here is essentially against the Nigerian government, not the officials personally. Indeed, the complaint identifies the officials only by their official titles and does not anywhere mention their names. Furthermore, the complaint refers to each defendant as a "sovereign state." Finally, the complaint states that the underlying action in Nigerian court was brought to "secur[e] refunds from the Federal Government of Nigeria . . ." and that the debts sought were "owed by the Federal Government." (Compl., Docket No. 1, at § III). Accordingly, the "real party ininterest" is plainly the foreign state of Nigeria, and the FSIA applies to the officials named as defendants.
Accordingly, the Court concludes that all defendants constitute a "foreign state" within the meaning of the FSIA.
The next question is whether any statutory exception to the FSIA applies. Edwards invokes three of the exceptions under 28 U.S.C. § 1605(a).
Edwards first invokes the FSIA's "commercial activity" exception, 28 U.S.C. § 1605(a)(2).
Under the first clause of § 1605(a)(2), a foreign state may lose immunity for "commercial activity carried on in the United States." Similarly, under the second clause of §1605(a)(2), a foreign state may lose immunity for an "act performed in the United States in connection with a commercial activity of the foreign state elsewhere." Edwards makes no allegation that any acts—commercial or otherwise—were performed by the Central Bank in the United States. Without evidence of such acts, the first two clauses cannot apply.
The third clause of § 1605(a)(2) abrogates immunity for acts a foreign state performed "outside" the United States, "in connection with a commercial activity of [a] foreign state elsewhere," that "cause[d] a direct effect" in the United States.
Edwards contends that the Central Bank's failure to pay his legal fees had the direct effect of denying him "taxable income," which in turn prevented the Internal Revenue Service from collecting "approximately fifty (50) million dollars in tax revenue for the United StatesGovernment." (Compl., Docket No. 1, at § IV(2)). However, courts have consistently held that "[a] financial loss in the United States, when all the acts giving rise to the claim occurred outside this country, is insufficient to show the 'direct effect' in the United States that FSIA requires." BPA Int'l, Inc. v. Sweden, 281 F. Supp. 2d 73, 81 (D.D.C. Sept. 5, 2003). In other words, "the fact that an American individual or firm suffers some financial loss from a...
To continue reading
Request your trial