Lanny J. Davis & Associates LLC v. Republic of Equatorial Guinea
2013 U.S. Dist. LEXIS 120561
| D.D.C. | 2013Background
- LJDA sues the Republic of Equatorial Guinea for breach of an Engagement Agreement to provide legal services, signed February 15, 2010.
- Agreement contemplated payments of $2,055,000 in four semi-annual installments and reimbursement of ordinary out-of-pocket expenses.
- LJDA asserts assignment of the MWE Engagement Agreement from MWE after Mr. Davis left MWE and that Equatorial Guinea continued payments to LJDA.
- Equatorial Guinea terminated the Engagement Agreement in March 2011; LJDA claims unreimbursed expenses total $141,941.11.
- Equatorial Guinea failed to respond to service; default judgment was entered; court overall grants relief on breach of contract but denies hearing on damages.
- Court applies D.C. contract law (choice-of-law analysis) and finds subject matter and personal jurisdiction under FSIA; awards damages, pre-judgment interest, and post-judgment interest but defers fees and costs.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| FSIA subject-matter jurisdiction exists? | Commercial activity exception applies due to contract for legal services and U.S. conduct. | Equatorial Guinea did not participate; immunity should apply absent exception. | Yes; FSIA commercial activity applies, no immunity bar. |
| Does the FSIA commercial activity exception apply to the contract for services? | Engagement and related activities conducted in the U.S. constitute commercial activity with direct U.S. contact. | No participation/contacts to establish nexus; immunity should apply absent consent. | Yes; commercial activity exception applies because substantial U.S. nexus and direct effect. |
| Is personal jurisdiction proper over Equatorial Guinea? | Service under FSIA § 1608 established; jurisdiction follows subject-matter jurisdiction. | No response; no jurisdictional challenge raised by defendant. | Yes; personal jurisdiction established via proper service. |
| Choice of law governs breach of contract? | D.C. law should apply under a govt. interest/most significant relationship approach. | Not litigated; no expressed choice-of-law provision; no explicit preference. | D.C. contract law applies. |
| Whether default judgment is appropriate and amount of damages? | Breach of contract and unreimbursed expenses support relief; documentary evidence suffices. | Not presented; no opposition. | Default judgment granted; damages for unreimbursed expenses: $141,941.11; pre-judgment interest awarded; post-judgment interest awarded; attorneys’ fees/costs denied without prejudice. |
Key Cases Cited
- Reichler, Milton & Medel v. Republic of Liberia, 484 F. Supp. 2d 1 (D.D.C. 2007) (contracts for legal services constitute commercial activity under FSIA)
- Republic of Argentina v. Weltover, Inc., 504 U.S. 607 (Sup. Ct. 1992) (direct effect and place of payment for contract obligations evidence of jurisdiction)
- Saudi Arabia v. Nelson, 507 U.S. 349 (Sup. Ct. 1993) (requires significant nexus between activity and plaintiff's claim)
- I.T. Consultants, Inc. v. Republic of Pakistan, 351 F.3d 1184 (D.C. Cir. 2003) (commercial activity with direct effect and jurisdictional nexus under FSIA)
- Gates v. Syrian Arab Republic, 580 F. Supp. 2d 53 (D.D.C. 2008) (standard for prima facie case in FSIA default judgments)
- Oveissi v. Islamic Republic of Iran, 573 F.3d 835 (D.C. Cir. 2009) (subject-matter jurisdiction + choice of law analysis in FSIA contexts)
- Ben-Rafael v. Islamic Republic of Iran, 540 F. Supp. 2d 39 (D.D.C. 2008) (pre-judgment interest considerations in FSIA actions)
- Pugh v. Socialist People’s Libyan Arab Jamahiriya, 530 F. Supp. 2d 216 (D.D.C. 2008) (pre- and post-judgment interest framework in FSIA default judgments)