Nanko Shipping, USA v. Alcoa, Inc.
2017 U.S. App. LEXIS 4246
D.D.C.2017Background
- Guinea and Harvey Aluminum (Halco) formed Compagnie des Bauxites de Guinée (CBG) in 1963; Guinea owns 49% and Halco 51%.
- Article 9 of the CBG Agreement reserved Guinea the right to require up to 50% of bauxite cargoes be shipped on Guinean-flag or government-chartered vessels at market rates.
- Nanko alleges Guinea entered a 2011 Technical Assistance Agreement (TAA) assigning Guinea’s Article 9 rights to Nanko, and that CBG invited parties to negotiate with Nanko.
- Nanko claims Alcoa (and Halco/related entities) refused to award meaningful shipping contracts to Nanko, instead giving business to other (white-owned) firms; Nanko asserts claims for breach as a third-party beneficiary and racial discrimination under 42 U.S.C. § 1981 (and tortious interference in a proposed amendment).
- The district court dismissed under Rule 12(b)(7) for failure to join Guinea as a Rule 19 required party, concluding Guinea could not be joined because of sovereign immunity; the court later also dismissed the § 1981 claim for failure to state a claim. The D.C. Circuit reverses and remands.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Guinea is a Rule 19 required party such that the case must be dismissed | Nanko alleges Guinea assigned its Article 9 rights to Nanko (TAA); Guinea’s interests can be protected via discovery and are not necessarily indispensable | Alcoa argues adjudication will affect Guinea's rights under the CBG Agreement and Guinea must be joined | Reversed: on pleadings, Guinea is not clearly a required absentee; district court should develop record before deciding Rule 19 issues |
| Whether Guinea can be involuntarily joined given Foreign Sovereign Immunities Act (FSIA) | Nanko points to alleged Guinea actions (e.g., a 2011 New York meeting authorizing Nanko) suggesting commercial activity and thus FSIA exception | Alcoa contends Guinea is presumptively immune and Nanko has not pleaded an FSIA exception | Reversed: FSIA jurisdiction is a factual question; pleadings may plausibly invoke the commercial-activity exception and warrant discovery |
| Whether Nanko stated a § 1981 claim (failure to state a claim) | Nanko alleges discriminatory treatment knowing the owner’s race and identifies comparators and racially disparate treatment sufficient at pleading stage | Alcoa (and dissent) assert allegations are consistent with nonracial, arbitrary business decisions and lack facts of purposeful racial discrimination | Reversed: court holds § 1981 pleading standard met at this stage — allegations raise plausible intentional discrimination claim |
| Whether dismissal was appropriate without further fact development (procedural adequacy) | Nanko argues the district court prematurely resolved Rule 19/FSIA issues without discovery | Alcoa contends dismissal appropriate because Guinea is immune and indispensable | Reversed: appellate court requires further factual development (discovery and briefing) before resolving joinder and immunity issues |
Key Cases Cited
- SEC v. Bilzerian, 378 F.3d 1100 (D.C. Cir. 2004) (absent party not required to be joined where it merely assigned rights)
- Huber v. Taylor, 532 F.3d 237 (3d Cir. 2008) (Rule 19(a) not satisfied merely because judgment may be persuasive in future suits)
- In re Papandreou, 139 F.3d 247 (D.C. Cir. 1998) (courts often must look beyond pleadings to decide FSIA exceptions)
- Ilan-Gat Eng’rs, Ltd. v. Antigua Int’l Bank, 659 F.2d 234 (D.C. Cir. 1981) (consideration of additional facts often required before indispensable-party determination)
- Nat’l Ass’n of Chain Drug Stores v. New England Carpenters Health Benefits Fund, 582 F.3d 30 (1st Cir. 2009) (Rule 19 dismissals are rare)
- W. Md. Ry. Co. v. Harbor Ins. Co., 910 F.2d 960 (D.C. Cir. 1990) (framework for Rule 19 inquiry)
- Kickapoo Tribe of Indians v. Babbitt, 43 F.3d 1491 (D.C. Cir. 1995) (Rule 19 triad summarized)
- Cloverleaf Standardised Owners Ass’n v. Nat’l Bank of Wash., 699 F.2d 1274 (D.C. Cir. 1983) (standard of review for Rule 19(b) abuse of discretion)
- Bell Helicopter Textron, Inc. v. Islamic Republic of Iran, 734 F.3d 1175 (D.C. Cir. 2013) (plaintiff must plead facts to invoke FSIA exception to overcome presumption of immunity)
- Patterson v. McLean Credit Union, 491 U.S. 164 (1989) (§ 1981 protects right to make and enforce contracts; McDonnell Douglas framework applies)
- McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973) (prima facie framework for intentional discrimination)
- Brown v. Sessoms, 774 F.3d 1016 (D.C. Cir. 2014) (§ 1981 pleading principles and comparator use at pleading stage)
- Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) (plausibility pleading standard)
- Domino’s Pizza, Inc. v. McDonald, 546 U.S. 470 (2006) (limits on § 1981 expansion to avoid vast satellite litigation)