RESOURCE DYNAMICS INTERN. v. General People's Com., Civ. A. No. C84-0226A.

• Decision Date: 25 June 1984
• Docket Number: Civ. A. No. C84-0226A.
• Citation: 593 F. Supp. 572
• Parties: RESOURCE DYNAMICS INTERNATIONAL, LTD., a Colorado Corporation, Plaintiff, v. The GENERAL PEOPLE'S COMMITTEE FOR COMMUNICATIONS AND MARITIME TRANSPORT IN the SOCIALIST PEOPLE'S LIBYAN ARAB JAMAHIRIYA, Defendant.
• Court: U.S. District Court — Northern District of Georgia

593 F. Supp. 572

RESOURCE DYNAMICS INTERNATIONAL, LTD., a Colorado Corporation, Plaintiff, v. The GENERAL PEOPLE'S COMMITTEE FOR COMMUNICATIONS AND MARITIME TRANSPORT IN the SOCIALIST PEOPLE'S LIBYAN ARAB JAMAHIRIYA, Defendant.

Civ. A. No. C84-0226A.

United States District Court, N.D. Georgia, Atlanta Division.

June 25, 1984.

Julie Childs, Cofer, Beauchamp & Hawes, Atlanta, Ga., for plaintiff.

Richard C. Shadyac, Metzger, Shadyac & Schwarz, Annandale, Va., for defendant.

ORDER

ROBERT H. HALL, District Judge.

This breach of contract action is before the court on defendant's motion to dismiss. Federal jurisdiction is predicated upon 28 U.S.C. § 1330 (Supp.1984), which provides original federal jurisdiction of actions against foreign states. For the reasons stated herein, defendant's motion is DENIED.

FACTS

On April 20, 1982, the parties entered into a written contract whereby plaintiff, Resource Dynamics International, Ltd. ("RDI"), was to provide training to Libyan nationals in programs of airport administration, civil aviation related courses, and technical English. The students were to be trained to a point where they could return to job placements with Libya. According to plaintiff, performance of the contract began in June, 1982 and was to continue for thirty months from that date.

Plaintiff alleges that in early June of 1983 defendant, The General Peoples' Committee for Communications and Maritime Transport in the Socialist Peoples' Libyan Arab Jamahariya (the "Committee"), withdrew the students and notified plaintiff that it was terminating the contract. Plaintiff contends that defendant has failed and refused to pay the sum of $85,800 due and owing for training conducted during the month of June, 1983. Plaintiff asserts that at all relevant times it was performing under the contract and that plaintiff is ready, willing, and able to complete performance.

On August 15, 1983, plaintiff filed a complaint in federal court, thus instituting suit to recover its alleged damages. Service was sought by plaintiff through the procedures outlined in 28 U.S.C. § 1608(b) (Supp. 1984). Defendant moved to dismiss the complaint for insufficiency of service of process, contending that the defendant was not "an agency or instrumentality" of a foreign state subject to service under § 1608(b) but rather it was a "foreign state" subject to service pursuant to 28 U.S.C. § 1608(a) (Supp.1984). This court held that because plaintiff had proceeded under the section applicable to an agency or instrumentality, it was necessary for plaintiff to prove that the defendant was such (as opposed to being a foreign state) in order to establish the validity of service. The court held that plaintiff had failed to meet this burden of proof and, therefore, dismissed the action without prejudice.

Plaintiff refiled its action on February 2, 1984, and sought service under both 28 U.S.C. § 1608(a) and (b). Defendant has filed another motion to dismiss alleging (1) insufficiency of process, (2) insufficiency of service of process, (3) lack of subject matter jurisdiction and (4) lack of personal jurisdiction. These issues will be addressed separately and further facts will be disclosed as necessary for the discussion.

DISCUSSION

I. Insufficient Process¹ and Service of Process

28 U.S.C. § 1602 (Supp.1984), et seq, more commonly known as the Foreign Sovereign Immunities Act ("FSIA"), delineates the specific and limited situations under which a potential litigant can have recourse in the United States courts for asserting claims against foreign states. The FSIA provides detailed service requirements for such cases, 28 U.S.C. § 1608. It is these requirements which defendant contends have not been satisfied.

Section 1608 delineates two different modes of service of process depending upon the status of the defendant. The statute distinguishes between service upon "a foreign state or political subdivision of a foreign state" (§ 1608(a)) and service upon "an agency or instrumentality of a foreign state" (§ 1608(b)). In the present lawsuit plaintiff attempted service under both subsections. In compliance with § 1608(a)(3) plaintiff dispatched the necessary complaint and notices of suit in English and Arabic to the Head of the Ministry of Foreign Affairs of Libya by certified mail through the clerk of court. (See record). The mail receipt was not returned at the expiration of 30 days and plaintiff then proceeded under § 1608(a)(4), requesting the clerk to transmit the necessary documents to the United States State Department for service through diplomatic channels. On March 28, 1984, the clerk did transmit the documents to the Office of Special Consular Services where it was received on April 3, 1984 (See Exhibit "A" to Plaintiff's Response). These documents were transmitted on April 6, 1984, but service has not yet been perfected.

Plaintiff has also attempted service under § 1608(b). Service has been made and perfected on Mohammed Malhuf, the individual who signed the contract on behalf of defendant. Service has also been made upon Richard Shadyac as "a managing agent of defendant" (plaintiff's language), and on Mr. Huda, the Minister of Transportation of Libya. Apparently there has been no perfection as to the latter two individuals.

Defendant continues to allege that it is a foreign state or political subdivision thereof. If this is a correct characterization of defendant's status then service must be made under § 1608(a). According to defendant service has not been perfected under this section and, therefore, the lawsuit should be dismissed. The court disagrees. Plaintiff has taken all necessary steps for perfection under § 1608(a); it is true that service has not been perfected yet but this is not due to a lack of diligence on plaintiff's part, but rather to the difficulty inherent in perfecting service on a foreign entity. The court will allow an additional period of time for perfection under § 1608(a).

Plaintiff, while attempting service under both sections, contends that defendant is an agency or instrumentality of a foreign state. For this reason plaintiff has attempted service under § 1608(b). According to defendant none of three parties on whom plaintiff attempted (or in Malhuf's case, perfected) service is a proper individual to serve under § 1608(b).

It appears to the court that the discovery process may clarify many of the issues surrounding service of process in this case. In the first place, discovery should resolve the question of whether defendant is a "foreign state" or "agency or instrumentality." If defendant proves to be a foreign state then plaintiff will be given an additional time period in which to prove perfection under § 1608(a). If, however, discovery shows that defendant is an agency or instrumentality, then the depositions of Mr. Shadyac and Mr. Malhuf (already noticed) should indicate whether either of these two individuals have authority to act for and be served as defendant's representative under § 1608(b).

Plaintiff will have until August 24, 1984, to complete discovery on these preliminary issues. A hearing in this case will then be scheduled, at which time the court will decide the issues regarding service of process raised by defendant's motion to dismiss.

II. Jurisdiction

According to defendant, this court lacks subject matter jurisdiction and personal jurisdiction over the defendant due to the doctrine of sovereign immunity.² 28 U.S.C. § 1604 does grant foreign states³ immunity from jurisdiction of the courts of the United States and of the states. However, 28 U.S.C. § 1605 delineates the exceptions to this broad grant of immunity.

The first exception arises when a foreign state waives its immunity, § 1605(a)(1). Pl...