Saint-Gobain Performance Plastics Eur. v. Bolivarian Republic of Venez.

• Decision Date: 01 February 2021
• Docket Number: Civil Action No.: 20-129 (RC)
• Parties: SAINT-GOBAIN PERFORMANCE PLASTICS EUROPE, Plaintiff, v. BOLIVARIAN REPUBLIC OF VENEZUELA, Defendant.
• Court: U.S. District Court — District of Columbia

SAINT-GOBAIN PERFORMANCE PLASTICS EUROPE, Plaintiff, v. BOLIVARIAN REPUBLIC OF VENEZUELA, Defendant.

Civil Action No.: 20-129 (RC)

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

February 1, 2021

Re Document Nos.: 43, 45

MEMORANDUM OPINION

GRANTING PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT; DENYING DEFENDANT'S CROSS-MOTION TO DISMISS

I. INTRODUCTION

Plaintiff Saint-Gobain Performance Plastics Europe ("Saint-Gobain") initially filed this action in the United States District Court for the District of Delaware, seeking to register and enforce an arbitration award made pursuant to the International Convention on the Settlement of Investment Disputes between States and Nationals of Other States ("ICSID Convention" or "ICSID"), against Defendant the Bolivarian Republic of Venezuela ("the Republic"). The Republic did not appear, and Saint-Gobain moved for a default judgment. The Republic then appeared to challenge Saint-Gobain's service of process, arguing that it had not been properly served under the Hague Service Convention, and that venue was also improper in the District of Delaware. Chief Judge Leonard P. Stark of the District Court in Delaware determined that Saint-Gobain had properly served the Republic under the Hague Service Convention, but agreed with the Republic that venue was improper in the District of Delaware and transferred the action to this Court. Saint-Gobain now brings a motion for summary judgment, asking this Court to enter a judgment registering and enforcing the arbitration award at issue. In response, the Republic has brought a cross-motion for dismissal, claiming the action must be dismissed pursuant to Federal Rule of Civil Procedure 12(b)(5) for failure to properly effect service. Because Judge Stark has previously concluded that service of process was properly made in this action, the Republic's motion will be evaluated as a motion for reconsideration. The Court finds that Judge Stark's determination was correct, and does not constitute legal error. Accordingly, Saint-Gobain's motion for summary judgment is granted, while the Republic's cross-motion to dismiss is denied.

II. BACKGROUND

A. Factual Background

Plaintiff Saint-Gobain is a French corporation who held a 99.99% interest in NorPro Venezuela C.A., a Venezuelan company that manufactured components used in the fracking process. Pl.'s Statement of Material Facts ("Pl.'s SMF") ¶ 1, ECF No. 43-2. On March 29, 2011, Hugo Chávez, the then-president of Venezuela, ordered the expropriation of Saint-Gobain's interest. Compl. ¶ 16, ECF No. 1; see also Yanos Decl. Ex. 3 ("Decision on Liability") ¶¶ 245-47, ECF No. 3-3. Because Saint-Gobain was protected under the France-Venezuela Bilateral Investment Treaty of April 15, 2004, Saint-Gobain and the Republic entered into arbitration to resolve the dispute. Pl.'s SMF ¶¶ 5, 7-8. Saint-Gobain filed a request for arbitration pursuant to the ICSID Convention, which was registered as ICSID Case Number ARB/12/13 of June 15, 2012.¹ Id. ¶¶ 9-10.

Pursuant to the ICSID Convention and Arbitration Rules, a Tribunal was formed to consider the dispute. Written submissions were made, and after a four-day oral hearing theTribunal rendered, on December 30, 2016, a Decision on Liability and the Principles of Quantum, finding that the Republic had breached the France-Venezuela Bilateral Investment Treaty due to its acts of expropriation. Id. ¶ 11; see also Decision on Liability ¶ 908. The same Tribunal issued an award of $42 million to Saint-Gobain on November 3, 2017, which as of March 9, 2020 has accrued with interest to US$ 44,229,629.66. Pl.'s SMF ¶¶ 13, 28. The Republic does not contest that this award is final and binding. See Pl.'s Mot. Summ. J. Ex. 4 ("Status Conf. Tr.") at 5:25-6:3 (statement by the Republic's counsel asserting that "we are not going to challenge the merits of the arbitral award in this or any other court. The arbitral award—as a matter of substance, the Republic is prepared to accept . . ."), ECF No. 43-7. However, the Republic has not yet paid any of the amounts owed under the award. Pl.'s SMF ¶ 27.

In December 2018, Saint-Gobain filed this action in the U.S. District of Court for the District of Delaware seeking registration of the award as a Foreign Judgment and enforcement of the award pursuant to 22 U.S.C. § 1650(a). See Compl. ¶¶ 30-38. Pursuant to the Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters (1969) ("Hague Service Convention" or "the Convention"), Saint-Gobain sought to serve the Republic with the summons and Complaint in this action. Pl.'s SMF ¶ 20. To this end, on December 14, 2018, Saint-Gobain sent via certified mail "(i) duly-executed USM-94 'Request for Service Abroad of Judicial or Extrajudicial Documents' forms in duplicate English and Spanish versions addressed to [the Republic], together with duplicate English and Spanish copies of: (ii) the summons and Complaint in this action, (iii) five supporting exhibits and (iv) notice of right to consent to trial before a magistrate judge, to the Central Authority designated by Venezuela for international service of process pursuant to the Hague Service Convention." Id. ¶ 21. On December 21, 2018 and December 27, 2018 these deliveries weresigned for by T. Flores and I. Ruiz respectively, two individuals Saint-Gobain asserts were employees of the Venezuelan Foreign Ministry. Id. ¶ 22; see also Def.'s Response to Pl.'s Statement of Material Facts ¶ 22 (noting "the Republic disputes Plaintiff's characterization of these individuals as employees of the Foreign Ministry" as Saint-Gobain "has not come forward with any evidence or other information supporting its assertion as to that relationship"), ECF No. 47. No further response or action from the Central Authority occurred after the packages were delivered. See Pl.'s SMF ¶ 23.²

Because of this lack of response, the clerk of the United States District Court for the District of Delaware entered a default against the Republic on June 12, 2019. Pl.'s SMF ¶ 23. Saint-Gobain moved for a default judgment on June 24, 2019. Id. ¶ 24. On August 7, 2019, counsel for the Republic opposed Saint-Gobain's motion for default and requested that the court vacate the clerk's entry of default, challenging Saint-Gobain's service of process under the Hague Service Convention and also arguing that venue was improper in Delaware.³ Id. ¶ 25. OnDecember 12, 2019, Chief Judge Leonard P. Stark of the District Court in Delaware vacated the clerk's entry of default and denied Saint-Gobain's motion for default judgment, determining that while Saint-Gobain had properly served the Republic under the Hague Service Convention, venue was improper in the District of Delaware. Id. ¶ 26; see also Dec. 12, 2019 Mem. Order ("Stark Decision") at 21-22, ECF No. 39. Judge Stark transferred the action to this Court on January 16, 2020. Pl.'s SMF ¶ 26.

Saint-Gobain now brings a motion for summary judgment, asking this Court to enter a judgment registering and enforcing the award in question. See Pl.'s Mot. at 1. In response, the Republic has brought a cross-motion for dismissal, claiming that the action must be dismissed pursuant to Federal Rule of Civil Procedure 12(b)(5), arguing that the actions taken under the Hague Service Convention failed to properly effect service in compliance with the FSIA. See Def.'s Cross Mot. to Dismiss Compl. ("Def.'s Mot.") at 1, ECF No. 45. Both of these motions have been fully briefed and are now ripe for decision.

III. LEGAL STANDARDS

A. Motion to Dismiss for Inadequate Service of Process

"Service of process, under longstanding tradition in our system of justice, is fundamental to any procedural imposition on a named defendant." Murphy Bros., Inc. v. Michetti Pipe Stringing, Inc., 526 U.S. 344, 350 (1999). Accordingly, "[b]efore a federal court may exercise personal jurisdiction over a defendant, the procedural requirement of service of summons must be satisfied." Omni Cap. Int'l, Ltd. v. Rudolf Wolff & Co., 484 U.S. 97, 104 (1987). A "[r]ule 12(b)(5) motion is the proper vehicle for challenging the mode of delivery or the lack of delivery of the summons and complaint." Candido v. District of Columbia, 242 F.R.D. 151, 162 (D.D.C. 2007) (citing 5B C. Miller & A. Wright, Federal Practice & Procedure: Civil § 1353 (3d ed.2006)); see, e.g., Bazarian Int'l Fin. Assocs., L.L.C. v. Desarrollos Aerohotelco, C.A., 168 F. Supp. 3d 1, 17 (D.D.C. 2016) (12(b)(5) motion to dismiss challenging service made in accordance with the terms of the Hague Convention). The burden to establish the validity of the purported service rests on "[t]he party on whose behalf service [was] made." Light v. Wolf, 816 F.2d 746, 751 (D.C. Cir. 1987) (quotations omitted).

B. Motion for Summary Judgment

Pursuant to the Federal Rules of Civil Procedure, summary judgment is appropriate where the "movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). The movant bears the initial burden of identifying portions of the record that demonstrate the absence of any genuine issue of material fact. See Fed. R. Civ. P. 56(c)(1); Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). A "material" fact is one capable of affecting the substantive outcome of the litigation, see Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986), and a dispute is "genuine" if there is enough evidence for a reasonable jury to return a verdict for the non-movant, see Scott v. Harris, 550 U.S. 372, 380 (2007).

In response, the non-movant must identify specific facts in the record that reveal a genuine issue that is suitable for trial. See Celotex, 477 U.S. at 324. In determining whether a genuine issue exists, a court must refrain from making credibility determinations or weighing the evidence; rather, "[t]he evidence of the non-movant is to be believed, and all justifiable inferences are to be...