Gss Group Ltd. (a/K/A Global Sec. Seals Group Ltd.) v. Nat'l Port Auth.

• Decision Date: 30 March 2011
• Docket Number: Civil Action No. 09–1322(PLF).
• Citation: 774 F.Supp.2d 134
• Parties: GSS GROUP LTD. (a/k/a Global Security Seals Group Ltd.), Petitioner,v.NATIONAL PORT AUTHORITY, Respondent.
• Court: U.S. District Court — District of Columbia

774 F.Supp.2d 134

GSS GROUP LTD. (a/k/a Global Security Seals Group Ltd.), Petitioner,

v.NATIONAL PORT AUTHORITY, Respondent.

Civil Action No. 09–1322(PLF).

United States District Court, District of Columbia.

March 30, 2011.

Charles B. Wayne, DLA Piper LLP (U.S.), Washington, DC, for Petitioner.Robert Benjamin Wolinsky, Hogan Lovells U.S. LLP, Washington, DC, for Respondent.

OPINION

PAUL L. FRIEDMAN, District Judge.

Plaintiff GSS Group Ltd. (“GSS”) initiated this action by filing a petition to confirm foreign arbitration awards. Respondent the National Port Authority (“NPA”) now moves to dismiss that petition, arguing, among other things, that the Due Process Clause of the Fifth Amendment to the United States Constitution prevents this Court from exercising personal jurisdiction over the NPA. Having reviewed the relevant legal authorities, the parties' arguments, and the entire record in this case, the Court agrees with the NPA. It therefore will grant the respondent's motion and dismiss the plaintiff's petition.

I. BACKGROUND

The NPA is “a public corporation registered under the laws of the Republic of Liberia.” Petition to Confirm Arbitration Awards (“Pet.”) ¶ 6. In June of 2005, GSS, a corporation formed under the laws of the British Virgin Islands, see id. ¶ 5, contracted with the NPA to “construct and operate a new container park at the Freeport of Monrovia, Liberia.” Id. ¶ 7. According to the plaintiff's petition, and for reasons not relevant here, in August of 2005 that contract was superseded by a new agreement, which itself was amended on November 28, 2005. Id. ¶¶ 8–9. That final version of the contract between GSS and the NPA contained a clause providing that all disputes related to the “formation, validity, interpretation, performance, termination, enforcement or breach” of the contract would be referred to arbitration in London, England, where they would be resolved “in accordance with the laws of England and Wales.” Id. ¶ 10.

On March 15, 2006, GSS initiated an arbitration proceeding against the NPA, claiming that the NPA had breached their agreement. Pet. ¶ 11. Although the NPA generally refused to participate in the arbitration, see id. ¶¶ 11–14, the proceedings continued in its absence, and the arbitrator ultimately issued two awards in which he concluded that the NPA had breached its contract with GSS and was liable to GSS for damages in the amount of $44,347,260. Id. ¶ 14–15. GSS initiated this action on July 16, 2009, by filing a petition for the confirmation of its arbitration awards against the NPA pursuant to the Federal Arbitration Act, 9 U.S.C. §§ 201 et seq., and the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, opened for signature June 10, 1958, 21 U.S.T. 2517, reprinted in 9 U.S.C. § 201 (historical and statutory notes) (“the New York Convention”).

II. DISCUSSION

The NPA contends that GSS' petition should be dismissed on any one or more of the following grounds: (1) this Court cannot constitutionally exercise personal jurisdiction over the NPA because the NPA does not have the requisite “minimum contacts” with the United States, Respondent's Motion to Dismiss and Opposition to Petition to Confirm Foreign Arbitral Awards (“Mot.”) at 15–20; (2) venue is not proper in the District of Columbia, id. at 20–22; (3) the NPA's contract with GSS was not a valid, legally enforceable agreement, id. at 22–28; (4) petitioner GSS is not one of the parties to the contract, id. at 28–30; and (5) enforcement of the arbitration awards would contravene the public policy of the United States. Id. at 30–35. Because the Court finds the first of these arguments dispositive, it does not address the others. The NPA does not have sufficient contacts with the United States to permit this Court's exercise of personal jurisdiction over the respondent in this case.

A. Standard of Review

It is the petitioner's burden to make a prima facie showing that this Court has personal jurisdiction over the respondent. See First Chicago Int'l v. United Exch. Co., 836 F.2d 1375, 1378–79 (D.C.Cir.1988). In order to meet its burden, the petitioner “must allege specific facts on which personal jurisdiction can be based; [it] cannot rely on conclusory allegations.” FC Investment Group v. IFX Markets, Ltd., 479 F.Supp.2d 30, 35 (D.D.C.2007). Furthermore, when considering personal jurisdiction, the Court need not treat all of the petitioner's allegations as true. Instead, the Court “may [also] receive and weigh affidavits and other relevant matter to assist in determining the jurisdictional facts.” Id. (quoting United States v. Philip Morris Inc., 116 F.Supp.2d 116, 120 n. 4 (D.D.C.2000)); see also Brunson v. Kalil & Co., 404 F.Supp.2d 221, 223 (D.D.C.2005).

B. Analysis

Generally, in order for a court to exercise personal jurisdiction over a defendant, there must be both a constitutionally sufficient relationship between the defendant and the forum, and a statutory basis for the defendant's amenability to service of process. See Mwani v. bin Laden, 417 F.3d 1, 8 (D.C.Cir.2005). It is undisputed that the second requirement is met in this case. The Foreign Sovereign Immunities Act (“FSIA”) authorizes the exercise of personal jurisdiction over a “foreign state,” as that term is defined in 28 U.S.C. § 1603(a), so long as the court has subject matter jurisdiction over the plaintiff's claims and service has been effected in accordance with the relevant provision of the FSIA. 28 U.S.C. § 1330(b). As a corporation owned by Liberia, the NPA is encompassed by the relevant statutory definition of “foreign state.” See 28 U.S.C. § 1603(a)-(b) (defining “foreign state” to include “an agency or instrumentality of a foreign state,” and further defining “an agency or instrumentality of a foreign state” as “any entity ... a majority of whose shares or other ownership interest is owned by a foreign state”). The Court therefore has subject matter jurisdiction under the FSIA, which waives the sovereign immunity of “foreign states,” including their agencies and instrumentalities, with respect to, among other claims, petitions for the confirmation of arbitral awards pursuant to the New York Convention. See Verlinden B.V. v. Central Bank of Nigeria, 461 U.S. 480, 489–91, 497, 103 S.Ct. 1962, 76 L.Ed.2d 81 (1983); 28 U.S.C. § 1605(a)(6). NPA does not contend that it was not properly served with process. As a result, there is an adequate statutory basis for personal jurisdiction.

The question remains whether the Constitution permits the exercise of personal jurisdiction over the NPA by this Court. Where it applies, the Due Process Clause limits the authority of courts to exercise personal jurisdiction over nonresident defendants; personal jurisdiction exists in a given forum only if the defendant has “certain minimum contacts with [the forum] such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice.” Price v. Socialist People's Libyan Arab Jamahiriya, 294 F.3d 82, 95 (D.C.Cir.2002) (quoting Int'l Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945)) (internal quotation marks omitted). GSS has not made any attempt to demonstrate that the NPA, as a corporate entity owned by and operating in Liberia, has such “minimum contacts” with the relevant forum—the United States—as are typically necessary to satisfy the Due Process Clause. See Petitioner's Opposition to Respondent's Motion to Dismiss (“Opp.”) at 13–15. Instead, GSS argues that the NPA may not claim any due process protections because it is a foreign instrumentality. Id.

It is established that foreign sovereign nations are not among the “person[s]” afforded rights by the Fifth Amendment and so receive no due process protections. See Price v. Socialist People's Libyan Arab Jamahiriya, 294 F.3d at 96. Therefore, whether a foreign state has sufficient minimum contacts with the United States to satisfy due process is immaterial, so long as there is subject matter jurisdiction and proper service under the FSIA. See Continental Transfert Technique, Ltd. v. Fed. Gov't of Nigeria, 697 F.Supp.2d 46, 56 (D.D.C.2010). At the same time, countless judicial opinions, including prominent rulings on personal jurisdiction issued by the Supreme Court, have assumed that due process limits the extent to which private foreign entities may be subject to personal jurisdiction in the courts of the United States. See, e.g., Asahi Metal Indus. Co. v. Super. Ct., 480 U.S. 102, 107 S.Ct. 1026, 94 L.Ed.2d 92 (1987) (applying the “minimum contacts” test to determine whether a state court could, without violating the Due Process Clause, exercise personal jurisdiction over a Japanese corporation); Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414–15, 104 S.Ct. 1868, 80 L.Ed.2d 404 (1984) (determining that Colombian corporation was not subject to personal jurisdiction in a Texas court because it lacked sufficient minimum contacts with the forum).

The NPA, which characterizes itself—without dispute from the petitioner—as a “state-owned corporation operating exclusively in Liberia,” Mot. at 1, would seem to fall somewhere between those two categories of defendants. Its status for the purposes of a Fifth Amendment analysis is not identical to that of the Liberian government. Nor is it a wholly private entity. Under Liberian law, the NPA is a legal entity distinct from the national government, able to sue and be sued in its own name. See Public Authorities Law, Ch. VI, § 54(2) (Liberia). According to affidavits submitted by the respondent and unrebutted by the petitioner, the NPA “is responsible for its own finances, and it does not receive funding allocations or subsidies from the Government of Liberia.” Affidavit of Matilda Parker (attached to Mot.) (“Parker Affid.”) ¶ 6. It “keeps its finances separate from the Government of Liberia or any of its agencies, and there is no commingling of...