502 F.Supp.3d 200
D.D.C.2020Background
- Four former Cuban physicians allege they were coerced into Brazil’s Mais Médicos program and that PAHO acted as an intermediary, routing Brazilian payments to Cuba, retaining a 5% fee, and assisting enforcement and surveillance abroad.
- Plaintiffs filed a putative class action (TVPA §§1589(a),(b),1590; RICO) originally in S.D. Fla.; case was transferred to D.C.; PAHO moved to dismiss chiefly on immunity grounds under the IOIA and related treaty provisions and also raised comity and service defenses.
- The Supreme Court’s decision in Jam v. IFC required courts to apply FSIA immunities/exceptions to IOIA-covered organizations, creating novel questions about FSIA exceptions (commercial-activity, expropriation) for international organizations.
- The complaint alleges PAHO used a Citibank account in Washington, D.C., to receive Brazil’s payments and transmit funds to Cuba; plaintiffs assert PAHO knowingly benefited from forced-labor arrangements.
- The Court held PAHO is not immune as to the TVPA §1589(b) (knowing benefit) claim under the FSIA/IOIA commercial-activity exception; PAHO remains immune as to plaintiffs’ §1589(a) (forced labor) and §1590 (trafficking) claims absent further jurisdictional showing; RICO survives only to the extent it rests on the §1589(b) conduct.
- The Court found the UN Charter and WHO Constitution provisions cited by PAHO are non-self-executing (not enforceable domestic law); PAHO’s service-of-process defense was waived; comity dismissal denied at this stage.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether IOIA/FSIA commercial-activity exception permits suit on TVPA §1589(b) (knowing benefit) | PAHO acted as a financial intermediary in U.S. (Citibank D.C.), knowingly benefited from forced-labor venture; that is commercial activity | Gravamen is Cuba’s coercion; PAHO’s money-handling is ancillary artful pleading to evade immunity | Held: §1589(b) claim is "based upon" commercial activity carried on in U.S.; IOIA immunity waived for that claim |
| Whether IOIA/FSIA exceptions cover TVPA §1589(a) (forced labor) and §1590 (trafficking) | PAHO organized, enforced, hired minders, and threatened officials — conduct amounts to wrongful acts subject to suit | Such coercive and enforcement acts are not commercial; if non-commercial, immunity remains | Held: §1589(a) and §1590 do not fall within commercial-activity exception; expropriation exception also inapplicable; jurisdiction not found on these grounds (claims held in abeyance re: waiver) |
| Whether UN Charter art.105 and WHO Const. art.67 bar suit (treaty immunity) | PAHO: article language mandates privileges/immunities and supports absolute immunity | Plaintiffs: those treaty provisions are not domestic law binding federal courts | Held: Both provisions are non-self-executing and thus do not provide cognizable domestic immunity to PAHO |
| Whether PAHO was properly served and/or required FSIA §1608 service | Plaintiffs: served under Rule 4 at PAHO D.C. HQ; PAHO waived service defense by not timely asserting it | PAHO: IOIA incorporates FSIA; IOIA-covered orgs may be served only under FSIA §1608 methods | Held: PAHO waived the Rule 12(b)(5) defense by omission; and even on merits the FSIA service regime does not govern IOIA entities’ service; Rule 4 service sufficient |
| Whether case should be dismissed on international comity grounds | Plaintiffs: no foreign proceeding involving same parties; strong U.S. policy against trafficking; comity inappropriate | PAHO: Brazilian courts (Supremo Tribunal Federal and lower courts) addressed legality of Mais Médicos; comity requires deference | Held: Comity dismissal denied at motion stage; factual disputes about foreign rulings and parties preclude dismissal now |
Key Cases Cited
- Jam v. International Finance Corp., 139 S. Ct. 759 (U.S. 2019) (IOIA immunity measured by FSIA exceptions; international organizations presumptively immune but exceptions apply)
- OBB Personenverkehr AG v. Sachs, 136 S. Ct. 390 (U.S. 2015) (identify the gravamen of a claim to determine whether FSIA commercial-activity exception applies)
- Saudi Arabia v. Nelson, 507 U.S. 349 (U.S. 1993) (distinction between sovereign and commercial acts; commercial-character test)
- Republic of Argentina v. Weltover, Inc., 504 U.S. 607 (U.S. 1992) (commercial-activity defined by nature of act, not purpose)
- Transamerican S.S. Corp. v. Somali Democratic Republic, 767 F.2d 998 (D.C. Cir. 1985) (acting as a collection/financial agent qualifies as commercial activity)
- Medellin v. Texas, 552 U.S. 491 (U.S. 2008) (framework for determining whether a treaty provision is self-executing)
- Nemariam v. Federal Democratic Republic of Ethiopia, 491 F.3d 470 (D.C. Cir. 2007) (property-interest analysis under FSIA expropriation exception)
- Zappia Middle E. Constr. Co. v. Emirate of Abu Dhabi, 215 F.3d 247 (2d Cir. 2000) (expropriation exception refers to sovereign acts of taking; instrumentality acts insufficient)
- Mwani v. bin Laden, 417 F.3d 1 (D.C. Cir. 2005) (commercial-activity analysis and market-participant test for non-state actors)