524 F.Supp.3d 43
E.D.N.Y2021Background
- Plaintiffs (putative nationwide and state classes) allege a scheme led by then‑President Michel Martelly (and later adopted by his successors) to impose and collect fees on international money transfers, food remittances, and incoming international calls to Haiti, with assistance from private defendants including Western Union, Unibank, Caribbean Air Mail, Unitransfer, and Digicel Haiti.
- The challenged governmental instruments are: Circular 98 (May 20, 2011) and Circular 7 (May 31, 2011), which imposed a $1.50 fee on money transfers/food remittances from specified foreign territories, and a Presidential Order (Sept. 14, 2011) that fixed a $0.23/min floor for incoming calls and directed $0.05/min to CONATEL.
- Plaintiffs allege Defendants colluded with Martelly to draft, promote, advertise, collect, and retain portions of the Fees—representing them as lawful taxes to fund free education—and that Martelly embezzled proceeds (aided by Unibank).
- Defendants moved to dismiss under Rule 12(b)(6), invoking the act of state doctrine as an affirmative defense and alternatively seeking dismissal on forum non conveniens grounds; the Circulars and Presidential Order were signed by Haitian government officials.
- The court held the Circulars and Presidential Order are formal, official acts of the Haitian sovereign; applied the act of state doctrine (barred inquiry into validity of those acts), rejected plaintiffs’ takings and commercial‑exception arguments, also found forum non conveniens applicable, and dismissed the complaint with prejudice as to the moving defendants.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Applicability of the act of state doctrine | The Circulars/Order violated Haitian law and thus are not protected — court may review legality | The challenged instruments are official sovereign acts; U.S. courts must not adjudicate their validity | Doctrine applies; instruments are official acts so court must abstain |
| Whether the Fees are a taking of U.S. property (exceptions to act of state) | Fees are effectively a taking of property located in the U.S., so act of state should not bar suit | Fees were prospective taxes imposed by Haiti on transfers/calls into Haiti, not confiscations of U.S. property | Rejected plaintiff’s takings theory; Fees did not seize property located in the U.S. at time of taking |
| Commercial‑exception to act of state doctrine | The Fee scheme was commercial in nature, so act of state should not apply | No recognized commercial exception; even if existed, plaintiffs failed to show it applies | Rejected; Second Circuit precedent recognizes no such exception in these circumstances |
| Forum non conveniens | U.S. is appropriate forum | Haiti is adequate and more connected forum; private/public interest factors favor Haiti | Dismissal on forum non conveniens also warranted; Haiti is adequate alternative forum |
Key Cases Cited
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (pleading‑standard rule for facial plausibility under Rule 12(b)(6))
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (antitrust pleading standards and plausibility framework)
- Banco Nacional de Cuba v. Sabbatino, 376 U.S. 398 (1964) (formulation and purpose of the act of state doctrine)
- W.S. Kirkpatrick & Co. v. Envtl. Tectonics Corp., Int'l, 493 U.S. 400 (1990) (act of state doctrine bars judging validity of foreign sovereign acts)
- Fed. Treasury Enter. Sojuzplodoimport v. Spirits Int'l B.V., 809 F.3d 737 (2d Cir. 2016) (act of state doctrine principles; no commercial exception applied)
- Kashef v. BNP Paribas S.A., 925 F.3d 53 (2d Cir. 2019) (requirement to identify a statute/decree showing sovereign authorization for act of state to apply)
- Konowaloff v. Metropolitan Museum of Art, 702 F.3d 140 (2d Cir. 2012) (act of state as an affirmative defense and related procedural matters)
- Bigio v. Coca‑Cola Co., 239 F.3d 440 (2d Cir. 2001) (burden on defendant to establish act of state defense)
- Filartiga v. Pena‑Irala, 630 F.2d 876 (2d Cir. 1980) (distinguishable facts on sovereign acts and remedies)
- Liu v. Republic of China, 892 F.2d 1419 (9th Cir. 1989) (narrow holding that act of state may not bar suits when foreign sovereign acts occur within U.S. borders)