El-Hadad v. Embassy of United Arab Emirates

• Decision Date: 30 August 1999
• Docket Number: No. CIV. A. 96-1943 SSH.,CIV. A. 96-1943 SSH.
• Citation: 69 F.Supp.2d 69
• Parties: Mohamed Salem EL-HADAD, Plaintiff, v. EMBASSY OF THE UNITED ARAB EMIRATES, et al., Defendants.
• Court: U.S. District Court — District of Columbia

69 F.Supp.2d 69

Mohamed Salem EL-HADAD, Plaintiff, v. EMBASSY OF THE UNITED ARAB EMIRATES, et al., Defendants.

No. CIV. A. 96-1943 SSH.

United States District Court, District of Columbia.

August 30, 1999.

COPYRIGHT MATERIAL OMITTED

Silvia J. Rolinski, Silver Spring, MD, for Plaintiff.

John Thomas Szymkowicz, Szymkowicz & Buffington, Washington, DC, for Defendants.

OPINION

STANLEY S. HARRIS, District Judge.

Plaintiff brings this breach of contract and defamation action against the United Arab Emirates ("U.A.E."), the Embassy of the United Arab Emirates ("the Embassy"), and three individuals acting in their official capacities on behalf of the U.A.E. — Saif Rashid Al-Suwaidi ("Al-Suwaidi"), Magid Al-Khazragi ("Al-Khazragi"), and Nahyan bin Mubark Al-Nahyan ("Al-Nahyan"). Before the Court are defendants' motion to dismiss the amended complaint and related pleadings.¹ The Court treats this motion to dismiss as being made on behalf of all five defendants.² Upon consideration of the sufficiency of the complaint, the Court grants defendants' motion to dismiss for lack of personal jurisdiction as to Al-Suwaidi, Al-Khazragi, and Al-Nahyan, but denies the remainder of the motion. "Findings of fact and conclusions of law are unnecessary on decisions of motions under Rule 12 or 56." Fed.R.Civ.P. 52(a); Summers v. Department of Justice, 140 F.3d 1077, 1079-80 (D.C.Cir.1998). Nonetheless, the Court sets forth its reasoning.

Background

Plaintiff is an Egyptian citizen and a domiciliary of Virginia. For thirteen years, he was employed as an auditor of accounts in the U.A.E. From January 1993 to February 1996, plaintiff was employed as an auditor in the Cultural Division of the Embassy in Washington, D.C. He claims that he was dismissed from his position without apparent cause or notice, and that his discharge was influenced by his discovery of damaging information about some of his superiors at the Embassy. In June 1996, the Embassy rehired plaintiff in the military attache's office. Plaintiff claims that this employment was on an ad hoc basis and was intended to dissuade him from seeking a legal remedy for his previous dismissal. Plaintiff claims that he was summarily dismissed in August 1996, when he refused to discontinue his efforts to file a lawsuit. On August 22, 1996, plaintiff filed his original complaint against the U.A.E., the Embassy, Al-Suwaidi as Director of Financial and Administrative Affairs, and Al-Khazragi as Director of the State Audit Institution, alleging breach of contract and defamation. In October 1996, plaintiff amended his complaint to add Al-Nahyan, Minister of Higher Education and Scientific Research; furthermore, plaintiff alleged that defendants attempted to compel him to withdraw his original complaint, and when he refused, plaintiff's wife was dismissed from her position at the Embassy. Defendants U.A.E., the Embassy, and Al-Suwaidi, through their attorney, stipulated to service of the original complaint on October 10, 1996. On February 19, 1997, defendants Al-Khazragi and Al-Nahyan also stipulated to service through counsel.

After the amended complaint was filed, but before defendants Al-Khazragi and Al-Nahyan stipulated to service, the U.A.E., its Embassy, and defendant Al-Suwaidi filed a motion to dismiss to the original complaint. An opposition and a reply followed. Thereafter, all five defendants filed a motion to dismiss the amended complaint, seeking essentially the same relief as requested in the previously filed motion.

Analysis

Defendants assert six bases for dismissing some or all of plaintiff's claims: (1) lack of subject matter jurisdiction as to all the claims under the Foreign Sovereign Immunities Act ("FSIA"); (2) lack of personal jurisdiction over all the defendants; (3) lack of subject matter jurisdiction as to plaintiff's defamation claim under the FSIA; (4) preclusion of judicial review under the Act of State doctrine; (5) lack of jurisdiction because the acts occurred within a foreign mission; and (6) immunity for defendants Al-Suwaidi, Al-Khazragi, and Al-Nahyan under the doctrine of Head of State immunity. The Court finds no merit in defendants' six defenses, except the lack of personal jurisdiction as to the three individual defendants.³

I. Subject Matter Jurisdiction

The FSIA, codified at 28 U.S.C. §§ 1330, 1391, 1441, 1602-1611 (1994), is the "sole basis for obtaining jurisdiction over a foreign state in our courts," Argentine Republic v. Amerada Hess Shipping Corp., 488 U.S. 428, 434, 109 S.Ct. 683, 102 L.Ed.2d 818 (1989). It therefore must be applied in every action involving a foreign state defendant. Verlinden B.V. v. Central Bank of Nigeria, 461 U.S. 480, 489, 103 S.Ct. 1962, 76 L.Ed.2d 81 (1983). Under the FSIA, a foreign state is immune from the jurisdiction of U.S. courts unless the challenged conduct falls within certain limited statutory exceptions, as set forth in 28 U.S.C. § 1604. Argentine Republic, 488 U.S. at 434, 109 S.Ct. 683. The scope of sovereign immunity for a foreign state extends to any political subdivisions, instrumentalities, and agencies of that state, McKesson Corp. v. Islamic Republic of Iran, 52 F.3d 346, 351 (D.C.Cir.1995); individuals committing acts within their official capacities are considered agencies or instrumentalities of a foreign state. Jungquist v. Sheikh Sultan Bin Khalifa Al Nahyan, 115 F.3d 1020, 1027 (D.C.Cir. 1997); El-Fadl v. Central Bank of Jordan, 75 F.3d 668, 671 (D.C.Cir.1996); see Underwood v. The United Republic of Tanzania, 1995 WL 46383, at *2 (D.D.C. Jan.27, 1995) (an embassy of a sovereign nation is a foreign state); TIFA, Ltd. v. Republic of Ghana, 1991 WL 179098, at *7 (D.D.C. Aug.27, 1991) (embassy of Ghana is an instrumentality of Ghana).

The Court concludes, and defendants do not dispute, that all five defendants fall within the definition of "a foreign state" for purposes of the FSIA, and that the FSIA therefore applies to this action as to all five defendants. The Court thus must determine whether subject matter jurisdiction exists under the FSIA.

A. "Commercial activity" exception

Under the FSIA, the plaintiff first must produce evidence that shows an exception to the FSIA applies; the foreign state then has the ultimate burden of persuasion that the exception does not apply. Princz v. Federal Republic of Germany, 26 F.3d 1166, 1171 (D.C.Cir.1994). The activity upon which this action is based is the U.A.E.'s employment and termination of plaintiff. Plaintiff contends that defendants' conduct with respect to his employment falls within the "commercial activity" exception of the FSIA, codified at 28 U.S.C. § 1605(a)(2). That section provides:

(a) A foreign state shall not be immune from the jurisdiction of courts of the United States or of the States in any case —

....

(2) in which the action is based upon a commercial activity carried on in the United States by the foreign state; or upon an act performed in the United States in connection with a commercial activity of the foreign state elsewhere; or upon an act outside the territory of the United States in connection with a commercial activity of the foreign state elsewhere and that act causes a direct effect in the United States.

The Court must therefore determine whether defendants' actions with respect to plaintiff's employment are considered commercial activity.

Congress has stated that the commercial character of the activity is determined by examining the nature, rather than the purpose, of the activity. 28 U.S.C. § 1603(d). But Congress "deliberately left the meaning open and ... `put [its] faith in the U.S. courts to work out progressively, on a case-by-case basis ... the distinction between commercial and governmental.'" Practical Concepts, Inc. v. Republic of Bolivia, 811 F.2d 1543, 1549 (D.C.Cir.1987) (quoting Texas Trading & Milling Corp. v. Federal Republic of Nigeria, 647 F.2d 300, 308-9 (2d Cir.1981)). The courts have concluded that "a foreign sovereign engages in commercial activity when it engages in those activities that `can also be exercised by private citizens,' as distinct from those `peculiar to sovereigns.'" Sealift Bulkers v. Republic of Armenia, 965 F.Supp. 81, 84 (D.D.C.1997) (quoting Saudi Arabia v. Nelson, 507 U.S. 349, 360, 113 S.Ct. 1471, 123 L.Ed.2d 47 (1993)); see Janini v. Kuwait Univ., 43 F.3d 1534, 1537 (D.C.Cir. 1995).

A foreign state's employment of individuals can be characterized as either governmental or commercial activity depending on whether the employment relationship is "peculiar to sovereigns." The existing caselaw and legislative history therefore have categorized employment relationships as such: "employment of diplomatic, civil service or military personnel is governmental and the employment of other personnel is commercial." Holden v. Canadian Consulate, 92 F.3d 918, 921 (9th Cir.1996); see also H.R.Rep. No. 94-1487, at 16 (1976), reprinted in 1976 U.S.C.C.A.N. 6604, 6615 ("Also public or governmental and not commercial in nature, would be the employment of diplomatic, civil service, or military personnel .... Activities such as a foreign government's ... employment or engagement of laborers, clerical staff or marketing agents ... would be among those included within the definition [of commercial activity]").

Given this categorization of employment relationships, defendants argue that termination of plaintiff's employment was a governmental function because plaintiff was a civil servant. Defendants focus on Holden v. Canadian Consulate, in which the Ninth Circuit noted that "[b]ecause private parties cannot hire ... civil service ... personnel, such hiring is necessarily governmental." 92 F.3d at 921. Defendants rely on Holden's discussion of various factors for determining who is considered a civil servant, as well as U.A.E. law and regulations which purportedly categorize plaintiff as a civil servant.

Defendants' argument, however, is inconsistent with the decisive factor...