Lanny J. Davis & Assocs. LLC v. Republic Guinea, Civil Action No. 11–1787.

• Decision Date: 26 August 2013
• Docket Number: Civil Action No. 11–1787.
• Citation: 962 F.Supp.2d 152
• Parties: LANNY J. DAVIS & ASSOCIATES LLC, Plaintiff, v. REPUBLIC OF EQUATORIAL GUINEA, Defendant.
• Court: U.S. District Court — District of Columbia

962 F.Supp.2d 152

LANNY J. DAVIS & ASSOCIATES LLC, Plaintiff,

v.REPUBLIC OF EQUATORIAL GUINEA, Defendant.

Civil Action No. 11–1787.

United States District Court,

District of Columbia.

Aug. 26, 2013.

Mark S. Zaid, Bradley P. Moss, Law Office of Mark S. Zaid, P.C., Washington, DC, for Plaintiff.

MEMORANDUM OPINION

Granting in Part and Denying in Part Plaintiff's Motion for Default Judgment; and Finding as Moot Plaintiff's Motion for a Hearing

RUDOLPH CONTRERAS, District Judge.

I. INTRODUCTION

This action arises out of an alleged breach of contract for legal services between a law firm and a foreign sovereign nation. The foreign sovereign defendant was served with process but has not appeared in this litigation. Now before the Court are the plaintiff's motion for default judgment and motion for a status conference to conduct a hearing on damages. For the reasons described below, because the plaintiff has shown its entitlement to relief, the Court will grant the plaintiff's motion for default judgment and make a determination of damages. Because this opinion and accompanying order dispose of the case, the Court finds as moot the plaintiff's motion for a hearing.

II. FACTUAL ALLEGATIONS AND BACKGROUND

On February 15, 2010, McDermott, Will & Emery LLP (“MWE”) and the defendant, the Republic of Equatorial Guinea (“Equatorial Guinea”), entered into a contract for legal services (the “Engagement Agreement” or the “Agreement”). See Compl. Ex. A, ECF No. 1–1. H.E. Don Alejandro Evuna Owono Asangano (“Don Alejandro”), the Minister of State and a senior advisor to President Teodoro Obiang Nguema Mbasogo, signed the Agreement on Equatorial Guinea's behalf. See id. at 6; Davis Decl. ¶ 3, ECF No. 12–2. Lanny J. Davis and Eileen M. O'Connor were the principal MWE attorneys responsible for performing the legal services under the Agreement. See Compl. Ex. A, ECF No. 1–1.

The Engagement Agreement stipulated that between February 15, 2010, and January 31, 2011, MWE would perform “services” for the defendant, the details of which were defined by the “integrated” Memorandum of Understanding. See id. § I. In the December 24, 2009, Memorandum of Understanding, which “sets forth the understanding of the scope of services ... that will govern the relationship between Davis—O'Connor/MWE and His Excellency President Obiang [,]” the services included advice and assistance in instituting a “comprehensive program of political, legal, and economic reform [the “Reform Program”], including, without limitation, the rule of law, democracy, an independent judiciary, and a free press.” Compl. Ex. B at 2, ECF No. 1–2. MWE also agreed to “establish and implement an effective U.S. media and political communications plan” to advertise Equatorial Guinea in the United States and to “provide scheduling assistance and support” for the President and senior officials when they visited the United States. Id. at 2–3.

In exchange for the services, Equatorial Guinea agreed to pay MWE $2,055,000 in four equal semi-annual installments of $513,750.00. Compl. Ex. A § IV, ECF No. 1–1. Payments were to be due on March 15, 2010; September 15, 2010; March 15, 2011; and September 15, 2011. See id.; see also Davis Decl. ¶ 5, ECF No. 12–2. Additionally, in a December 24, 2009, letter attached to the Memorandum of Understanding, MWE communicated its expectation that Equatorial Guinea would reimburse MWE for “ordinary and necessary out-of-pocket expenses,” including transportation, lodging, and other incidental expenses, “without [Equatorial Guinea's] prior approval.” Compl. Ex. A at 9, ECF No. 1–1; see also Davis Decl. ¶¶ 5–6, ECF No. 12–2. The same provision is also included in the Engagement Agreement itself. See Pl.'s Notice Filing Resp. Min. Order Ex. 1 § III, ECF No. 18–1 (“[T]he Presidency of the Republic will reimburse MWE for the ordinary expenses incurred by virtue of this Engagement Agreement without its prior approval ....”); see also Davis Decl. ¶ 6, ECF No. 12–2.

In April 2010, Mr. Davis left MWE and established Lanny J. Davis & Associates LLC (“LJDA”), the plaintiff in this action. See id. ¶ 7. After Mr. Davis left MWE, the firm verbally agreed to assign the Engagement Agreement and its payments to LJDA. See id. Additionally, Equatorial Guinea remitted its June 2011 payment to LJDA, an action that LJDA claims represents Equatorial Guinea's awareness of and consent to the assignment. See id.; Pl.'s Mot. Default J. Ex. D, ECF No. 12–4.

Beginning in March 2010, LJDA claims to have undertaken a “multiple-pronged effort” to implement and support the Reform Program. See Compl. ¶ 16, ECF No. 1. In particular, LJDA claims that it took steps to procure Equatorial Guinea's membership in the Energy Extractive Industries Transparency Initiative and assisted in drafting a public address delivered by President Obiang at the Global Media Forum in Cape Town, South Africa, on June 22, 2010. See id. Mr. Davis travelled to Africa on four occasions in May 2010, June 2010, July 2010, and November 2010, each trip allegedly undertaken “with the direction, knowledge, approval, and direct participation of senior representatives of the Government of Equatorial Guinea.” Id. ¶ 12; see also Compl. Ex. E, ECF No. 1–5; Davis Decl. ¶ 8, ECF No. 12–2. On these trips, LJDA claims to have “worked closely” with the U.S. Ambassador to Equatorial Guinea and senior officials of the West Africa Bureau of the U.S. State Department to report on efforts to implement the Reform Program. See Compl. ¶ 15, ECF No. 1. Additionally, in Washington, D.C., Mr. Davis met with President Obiang, the Equatoguinean Ambassador to the United States, the World Bank, oil company trade associations, and construction contractors that did business in Equatorial Guinea. See Davis Decl. ¶ 11, ECF No. 12–2.

Following difficulties in security payment, on February 3, 2011, the parties agreed to terminate the Engagement Agreement. See id. ¶ 12. Equatorial Guinea had paid the March 15, 2010, installment of the Agreement to MWE in June 2010, see Compl. ¶ 13, ECF No. 1, and the September 15, 2010 installment to LJDA in March 2011, see id. ¶ 18. In mid-March 2011, LJDA sent a table of the out-of-pocket expenses to Equatorial Guinea by mail and, on July 21, 2011, sent the table again by email. See Pl.'s Mot. Default J. Ex. G, ECF No. 12–7. On three occasions, LJDA sent a notebook of the expenses, including receipts, to Don Alejandro. See id. Equatorial Guinea has paid for neither MWE's nor LJDA's out-of-pocket expenses, which LJDA claims total $141,911.11.¹See Compl. ¶ 21 & Ex. E, ECF Nos. 1, 1–5. LJDA has reimbursed MWE for all Agreement-related costs and now claims to be the sole party entitled to enforce the Agreement against Equatorial Guinea. See Compl. ¶ 24. On September 8, 2011, LJDA made its “final written demand” to Equatorial Guinea. See Davis Decl. ¶ 15, ECF No. 12–2.

LJDA filed this action on October 7, 2011. On October 14, 2011, pursuant to the service requirements of the Foreign Sovereign Immunities Act (“FSIA”), 28 U.S.C. § 1608(a)(3) (2006), the Deputy Clerk of the Court mailed Equatorial Guinea one copy of the summons, complaint, and notice of suit with a Spanish translation of each. See Certif. Mailing, ECF No. 4. On January 6, 2012, LJDA received a signed return receipt for international mail, which was dated November 7, 2011. See Notice Proof Serv., ECF No. 5. Equatorial Guinea failed to file a response within sixty days of service, the statutory period under the FSIA. See28 U.S.C. § 1608(d) (2006). On February 27, 2012, the Clerk entered default against Equatorial Guinea. See Default, ECF No. 8. LJDA later filed a motion for default judgment and a motion for a status conference. See Mot. Default J., ECF No. 12; Mot. Status Conf., ECF No. 14. Although those motions have been pending for more than seven months, Equatorial Guinea has not responded to either motion, has not entered an appearance, and has otherwise failed to participate in this litigation.

III. ANALYSIS

A. Subject Matter Jurisdiction (Sovereign Immunity)

1. Legal Standard

Under the FSIA, “[s]ubject to existing international agreements to which the United States is a party at the time of enactment of this Act a foreign state shall be immune from the jurisdiction of the courts of the United States and of the States except as provided in sections 1605 to 1607....” 28 U.S.C. § 1604 (2006); see also Oveissi v. Islamic Republic of Iran, 573 F.3d 835, 839 (D.C.Cir.2009) (“[F]oreign states generally are entitled to immunity unless the case falls within one of a list of statutory exceptions.”). Because Congress has “undisputed power to decide ... whether and under what circumstances foreign nations should be amenable to suit in the United States[,]” Verlinden B.V. v. Cent. Bank of Nigeria, 461 U.S. 480, 493, 103 S.Ct. 1962, 76 L.Ed.2d 81 (1983), the exceptions in sections 1605 to 1607 are “the sole basis” for obtaining subject matter jurisdiction over a foreign state and “must be applied by the district courts in every action against a foreign sovereign,” Argentine Republic v. Amerada Hess Shipping Corp., 488 U.S. 428, 434–35, 109 S.Ct. 683, 102 L.Ed.2d 818 (1989) (quoting Verlinden B.V., 461 U.S. at 493, 103 S.Ct. 1962) (internal quotation marks omitted).

2. Commercial Activity

LJDA contends that Equatorial Guinea is not immune from suit because of the FSIA's “commercial activity” exception. See Pl.'s Mem. P. & A. Supp. Mot. Default J. 9, ECF No. 12. LJDA makes three arguments to support its position: (1) that Equatorial Guinea itself carried on commercial activities in the United States through the actions of Don Alejandro, who participated in meetings, telephone conversations, and email discussions regarding the Engagement Agreement; (2) that Mr. Davis conducted “virtually all of his work” in Washington, D.C., in connection with commercial activities; and (3) that EquatorialGuinea carried on commercial activities outside the United States...