Toumazou v. Turkish Republic Cyprus of N. Cyprus

• Decision Date: 09 October 2014
• Docket Number: Civil Action No. 09–1967 PLF
• Citation: 71 F.Supp.3d 7
• Court: U.S. District Court — District of Columbia
• Parties: Michali Toumazou, et. al., Plaintiffs, v. Turkish Republic of Northern Cyprus, et. al., Defendants.

71 F.Supp.3d 7

Michali Toumazou, et. al., Plaintiffs

v.Turkish Republic of Northern Cyprus, et. al., Defendants.

Civil Action No. 09–1967 PLF

United States District Court, District of Columbia.

Signed October 9, 2014

Athan Theodore Tsimpedes, Tsimpedes Law Firm, Washington, DC, Robert J. Shelist, Law Offices Of Robert J. Shelist, P.C., Chicago, IL, for Plaintiffs.

David S. Saltzman, Saltzman & Evinch, P.C., Steven R. Perles, Edward B. MacAllister, Perles Law Firm, P.C., Andrew John Pincus, Mayer Brown, LLP, Washington, DC, Michael Orth Ware, Mayer Brown LLP, New York, NY, for Defendants.

HSBC Holdings PLC, pro se.

HSBC Group, pro se.

OPINION

PAUL L. FRIEDMAN, United States District Court

This litigation arises out of the protracted conflict between Turkish and Greek Cypriots. See generally Autocephalous Greek–Orthodox Church v. Goldberg & Feldman Fine Arts, Inc., 917 F.2d 278, 280–81 (7th Cir.1990) ; Crist v. Republic of Turkey, 995 F.Supp. 5, 7 (D.D.C.1998). “The Cypriot people have long been a divided people, approximately three-fourths being of Greek descent and Greek–Orthodox faith, the other quarter of Turkish descent and Muslim faith”. Autocephalous Greek–Orthodox Church v. Goldberg & Feldman Fine Arts, Inc., 917 F.2d at 280–81. Formerly under Ottoman and then British control, the Republic of Cyprus was founded in 1960 by mutual agreement between Greece, Turkey, and Great Britain. Id. at 280. Animosity between Greek and Turkish Cypriots, who desired unification with Greece or Turkey respectively, resurfaced shortly thereafter. Id. Intercommunal violence was common throughout the 1960's and early '70s. Id.

This tension erupted in July 1974 when the Greek Cypriot military ousted the joint Cypriot government. TRNC Statement of Facts at 9; Crist v. Republic of Turkey, 995 F.Supp. at 7.¹ In response, Turkey invaded Cyprus. TRNC Statement of Facts at 10; Crist v. Republic of Turkey, 995 F.Supp. at 7. In the bitter conflict that ensued, both sides committed atrocities. See TRNC Statement of Facts at 9–10; Compl. ¶ 12; Pls. Mot. to Amend. Ex. 2 ¶¶ 15–16. By the time a cease-fire was declared in August of 1974, Turkey had taken control of approximately one third of Cyprus, leaving many Greek Cypriots as refugees. Compl. ¶¶ 10–11; TRNC Statement of Facts at 10–11; Crist v. Republic of Turkey, 995 F.Supp. at 7. To this day, United Nations peacekeeping forces maintain the “Green Line” that separates the Turkish-occupied north from the rest of Cyprus. Compl. ¶ 17; TRNC Statement of Facts at 12; Crist v. Republic of Turkey, 995 F.Supp. at 7.

In the aftermath, Turkish Cypriots established a functioning government called the “Turkish Federated State of Cyprus,” which was succeeded by the Turkish Republic of Northern Cyprus in 1983. TRNC Statement of Facts at 12; Crist v. Republic of Turkey, 995 F.Supp. at 7.² The TRNC claimed ownership of all property it deemed was “abandoned” by Greek Cypriots who fled south. Compl. ¶ 17.³ This “abandoned” property was redistributed to Turkish Cypriots who, in return, were required to renounce their rights to property in southern Cyprus. TRNC Statement of Facts at 17–18.⁴

The plaintiffs, Greek Cypriots, filed the instant proposed class action suit on October 19, 2009, bringing varied claims, alleging that the TRNC unlawfully confiscated their property in northern Cyprus in 1974, Compl. ¶¶ 10–14, 18–20, and has masterminded a broad scheme to profit from and sell these properties “in the United States, Europe and around the world with the aid, assistance and support of HSBC.” Id. ¶ 45.⁵ Plaintiffs allege that the HSBC defendants “do[ ] business with the TRNC through the north of Cyprus and the United States and knowingly aid[ ], assist[ ], support[ ] and benefit [ ] from the fraudulent property scheme of the TRNC.” Id. ¶ 46.

The TRNC filed its motion to dismiss for lack of personal jurisdiction on March 26, 2010; plaintiffs requested leave to file a third amended complaint on April 12, 2011. The proposed amended complaint seeks to add 758 individual plaintiffs and several new claims. The HSBC defendants filed their motion to dismiss for failure to state a claim on November 15, 2011. Their primary argument is that the plaintiffs have failed to adequately plead that the HSBC defendants are liable for the alleged acts of a Turkish subsidiary, HSBC A.S., which operates three branches in northern Cyprus.

Upon consideration of the parties' arguments, the relevant legal authorities, and the record in this case, the Court concludes that it lacks personal jurisdiction over the TRNC and that the complaint fails to state a claim against the HSBC defendants. For the same reasons, the Court also finds that it would be futile to permit plaintiffs to file an amended complaint. On September 30, 2014, the Court granted both motions to dismiss with prejudice and denied plaintiffs' motion for leave to amend. This Opinion explains the reasoning underlying that September 30, 2014 Order.

I. TRNC'S MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION

The plaintiffs assert that this Court has personal jurisdiction over the TRNC pursuant to: (1) D.C. Code § 13–334(a), which authorizes general jurisdiction over foreign corporations “doing business” in the District of Columbia; and (2) D.C.Code § 13–423(a)(1), which authorizes specific jurisdiction over defendants who “transact business” in the District of Columbia. Pls. TRNC Opp. at 10–17. The Court disagrees and finds that it cannot exercise either general or specific personal jurisdiction over TRNC.⁶

A. Legal Standards

The plaintiffs bear the burden of establishing a prima facie showing that the Court has personal jurisdiction over the TRNC. See Mwani v. Bin Laden, 417 F.3d 1, 7 (D.C.Cir.2005) ; First Chicago Int'l v. United Exch. Co., 836 F.2d 1375, 1378–79 (D.C.Cir.1988). In order to meet this burden, plaintiffs “must provide sufficient factual allegations, apart from mere conclusory assertions, to support the exercise of personal jurisdiction over the defendant.” Howe v. Embassy of Italy, 68 F.Supp.3d 26, 27, 2014 WL 4449697, at *2 (D.D.C. Sept. 11, 2014) ; see also First Chicago Int'l v. United Exch. Co., 836 F.2d at 1378 (“Conclusory statements ... do not constitute the prima facie showing necessary to carry the burden of establishing personal jurisdiction”); Alkanani v. Aegis Def. Servs., 976 F.Supp.2d 13, 22 (D.D.C.2014) (plaintiff has the burden of establishing a factual basis for a court's exercise of personal jurisdiction and for alleging facts connecting defendant with the forum).

On a motion to dismiss for lack of personal jurisdiction under Rule 12(b)(2) of the Federal Rules of Civil Procedure, the Court need not accept all of the plaintiffs' allegations as true. Jung v. Assoc. of Am. Med. Colls., 300 F.Supp.2d 119, 127 (D.D.C.2004). It “may receive and weigh affidavits and other relevant matter [outside of the pleadings] 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 Alkanani v. Aegis Def. Servs., 976 F.Supp.2d at 22. But all factual discrepancies must be resolved in the plaintiffs' favor. Crane v. N.Y. Zoological Soc., 894 F.2d 454, 456 (D.C.Cir.1990).

B. General Personal Jurisdiction under D.C. Code § 13–334(a)

In support of this Court's exercise of general personal jurisdiction over the TRNC pursuant to D.C. Code § 13–334(a), the plaintiffs assert that the TRNC:

1. “Hir[es] employees from abroad and send[s] them as representative or staff to the District of Columbia, leas[es] office, hir[es] and pay[s] lawyers, [uses] letterhead, [an] interactive website, phone, email, facsimiles, maps, and a DC postal address, writ[es] letters to newspapers, speak[s] at universities, [and] ha[s] offices [with] other “TRNC” representative[s] who are business owners;”

2. Employs a “known lobbyist and representative of the ‘Turkish Cypriot Community’ and not the so called “TRNC,” who holds “himself out as an ambassador in Washington DC to at least Turkey;”

3. Conducts banking transactions with HSBC “and its network of institution[s] under its name;”

4. Maintains a website (www.trncwashdc.org); and

5. Operates in the District without a business license and has failed to pay D.C. taxes.

Pls. TRNC Opp. at 4–7.

Plaintiffs argue that these assertions are sufficient to establish general personal jurisdiction because they demonstrate that the TRNC's contacts with the District “have been so continuous and systematic that it could foresee being haled into court in the District of Columbia.” Pls. TRNC Opp. at 10 (quoting AGS Int'l Servs. S.A. v. Newmont U.S.A. Ltd., 346 F.Supp.2d 64, 74 (D.D.C.2004) ). Since the plaintiffs' briefing in this case, however, the Supreme Court has held that “engag[ing] in a substantial, continuous, and systematic course of business in the forum is not, in and of itself, enough for general jurisdiction to comport with due process.”Daimler AG v. Bauman, ––– U.S. ––––, 134 S.Ct. 746, 761, 187 L.Ed.2d 624 (2014) ; see also Goodyear Dunlop Tires Operations, S . A . v. Brown, ––– U.S. ––––, 131 S.Ct. 2846, 180 L.Ed.2d 796 (2011). Rather, as the Court made plain in Goodyear, and repeated in Daimler, “general jurisdiction requires affiliations so continuous and systematic as to render [the foreign entity] essentially at home in the forum State.” Daimler AG v. Bauman, 134 S.Ct. at 758 n. 11 (emphasis added) (quoting Goodyear Dunlop Tires Operations, S . A . v. Brown, 131 S.Ct. at 2851 ) (internal quotation marks omitted). Otherwise it is not amenable to suit for claims unrelated to particular activity in the forum. Goodyear Dunlop Tires Operations, S . A . v. Brown, 131 S.Ct. at 2856.⁷

Plaintiffs' allegations, even if true, fall woefully short of demonstrating that the TRNC is “at home” in the District of Columbia. See Pls. TRNC Opp. at 4–7.⁸ Although unrecognized by the United States, the TRNC controls and administers over a third of the island of Cyprus and...