Case Information
‐ 236 Broidy Capital Benomar
United States Court of Appeals
for the Second Circuit _______________
A UGUST T ERM , (Argued: October 23, Decided: December 6, 2019) Docket No. ‐
_______________
B ROIDY C APITAL M ANAGEMENT LLC, E LLIOTT B ROIDY ,
Plaintiffs ‐ Appellants ,
—v.—
J AMAL B ENOMAR ,
Defendant Appellee .
_______________
Before: K ATZMANN Chief Judge C HIN AND D RONEY , Circuit Judges . _______________
Plaintiffs Elliott Broidy Broidy Capital Management LLC appeal from judgment States District Court Southern District New York (Seibel, J .) granting defendant Jamal Benomar’s dismiss lack subject matter jurisdiction. concluded possessed suit Vienna Convention Diplomatic Relations (“VCDR”), Apr. U.S.T. U.N.T.S. 95. We agree. Plaintiffs bear establishing jurisdiction, here by establishing preponderance applies. argue suit can proceed pursuant *2 commercial activity exception to diplomatic immunity, which permits suits “relating to any professional commercial activity exercised by the agent receiving State outside his official functions.” VCDR art. 31(1)(c). However, failed meet their burden proof establish exception applied by presenting support allegations engaged such activity. Plaintiffs also argue abused its discretion denying jurisdictional discovery leave amend. However, failed request jurisdictional discovery directed court, amendment would futile because plaintiffs’ proposed amended complaint did cure original complaint’s jurisdictional deficiencies. Accordingly, we AFFIRM judgment court.
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S HANNEN W. C OFFIN (Filiberto Agusti, Linda C. Bailey, on brief ), Steptoe & Johnson LLP, Washington, D.C., ‐ Appellants .
A BBE D AVID L OWELL (Eric W. Bloom, on brief ), Winston & Strawn LLP, Washington, D.C., Defendant Appellee .
M ARTIN T OTARO Attorney, Appellate Staff Civil Division, U.S. Department Justice (Marik A. String, Acting Legal Adviser, U.S. Department State, Joseph H. Hunt, Assistant Attorney General, Sharon Swingle, Attorney, Appellate Staff Civil Division, U.S. Department Justice, on brief ), States, Amicus Curiae .
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K ATZMANN Chief Judge :
This case calls on us determine who bears establishing pursuant Vienna Convention Diplomatic Relations (“VCDR” “Vienna Convention”), *3 Apr. U.S.T. U.N.T.S. 95, where a defendant has demonstrated diplomatic status. Plaintiffs Elliott Broidy and Broidy Capital Management LLC appeal from a judgment States District Court Southern District New York (Seibel, J. ) dismissing their suit against Jamal Benomar, Moroccan diplomat, lack subject matter jurisdiction. On appeal, plaintiffs challenge district court’s conclusion that possessed diplomatic suit under Vienna Convention, argue that court erred imposing plaintiffs burden establishing jurisdiction by showing that suit could proceed one VCDR’s exceptions diplomatic immunity. also contend abused its discretion denying jurisdictional discovery leave amend complaint. For reasons below, we hold that, where defendant has demonstrated status, bear proving preponderance applies exists. having failed meet burden, we AFFIRM judgment court.
B ACKGROUND
Elliott Broidy chief executive officer and chairman Broidy Capital Management LLC. Until early 2018, he served Deputy Finance Chair Republican National Committee. In late and early 2018, Broidy’s computer systems were hacked, and trade secrets and personal information were stolen. Materials stolen hack were organized thematically and then disseminated U.S. media outlets. Broidy alleges state Qatar, believing Broidy influential detractor responsible for President Trump’s public criticism Qatar June engineered cyberattack order discredit Broidy curtail his influence.
Broidy subsequently filed several lawsuits seeking hold Qatar various alleged Qatari agents accountable hack. See Broidy Capital Mgmt., LLC et al. State Qatar et al. No. 2:18 ‐ cv ‐ ‐ JFW ‐ E (C.D. Cal.) (the “California Action”); Broidy Capital Mgmt., LLC et al. Muzin et al. No. 1:19 ‐ cv ‐ ‐ DLF (D.D.C.). On July Broidy filed suit United States District Court Southern District New York against Jamal Benomar, Moroccan native dual Moroccan ‐ U.K. citizen who served high ‐ ranking diplomat Nations (“U.N.”) twenty four years before stepping *5 down as the U.N. Under ‐ Secretary ‐ General Conflict Prevention July 2017. Broidy alleged that Benomar had served a secret Qatari agent since least and that Benomar had been paid Qatar to participate in alleged Qatari hacking scheme. According complaint, Benomar engaged in commercial activity when he purportedly participated in reviewing and organizing hacked materials and planning dissemination media, and he engaged increased contacts with other participants conspiracy prior to, during, and after hack and media distribution hacked materials.
Prior first conference case, Benomar filed a letter stating he was currently Moroccan diplomat and he intended move dismiss complaint pursuant Federal Rule Civil Procedure 12(b)(1) lack subject matter jurisdiction due immunity. In subsequent declaration, represented he had served diplomat Moroccan Permanent Mission Nations (“Moroccan Mission”) since November 2017. However, he acknowledged Moroccan Permanent Mission had begun process seeking U.S. credentials him *6 until after Broidy’s complaint was filed July 2018. Accordingly, United States had made determination Benomar’s diplomatic immunity when complaint was filed.
While briefing was pending Benomar’s motion dismiss, U.S. Department State confirmed U.S. Mission Nations (“U.S. Mission”) had registered Benomar with full diplomatic privileges immunities November 2018. acknowledged State Department’s determination but argued case could nevertheless proceed because it arose out commercial professional activity (Benomar’s alleged paid work for Qatar) excepted VCDR.
The court rejected this argument, finding was entitled granting his motion dismiss for lack subject matter jurisdiction. court denied both plaintiffs’ request jurisdictional discovery plaintiffs’ request, made first time after court had granted dismiss, provide court request production specific documents relevant jurisdictional discovery. In rejecting latter request, explained had *7 previously instructed make any specific jurisdictional discovery requests opposition motion dismiss had failed do so. The district court also denied plaintiffs’ motion for leave amend complaint futile because proposed amended complaint would also have been subject dismissal lack subject matter jurisdiction . This appeal timely followed.
D ISCUSSION
I. district court properly dismissed complaint lack subject
matter
A. Standard review
We review de novo a court’s legal conclusions granting denying its dismissal a claim lack subject matter jurisdiction. Brzak Nations F.3d 110–11 (2d Cir. 2010). We also “review de novo court’s interpretation treaty such Vienna Convention .” Swarna Al Awadi (2d “[T]he can refer outside pleadings” when resolving dismiss Federal Rule Civil Procedure 12(b)(1). *8 Luckett v. Bure , 290 F.3d 493, 496–97 (2d Cir. 2002). “[E]videntiary matter[s] may presented by affidavit otherwise.” Kamen v. Am. Tel. & Tel. Co. , 791 F.2d 1011 (2d Cir. 1986). “On appeal dismissal Rule 12(b)(1), we review court’s factual findings clear error….” Cortlandt St. Recovery Corp. Hellas Telecomm., S.à.r.l. F.3d 417 (2d Cir. 2015).
B. Treaty statutory framework
Diplomatic immunity United States governed by Vienna Convention on Diplomatic Relations, which was ratified United States 1972. Vienna Convention primarily “codified longstanding principles customary international law with respect diplomatic relations.” Third Ave. Assocs. Permanent Mission Republic Zaire Nations (2d 1993). However, also modernized law diplomatic immunity accordance prevailing functional view diplomatic intended “not benefit individuals but ensure efficient performance functions missions representing States.” VCDR pmbl.; see Diplomatic Law: Commentary Vienna Convention on Diplomatic Relations (Eileen Denza ed., 4th ed. Accordingly, VCDR reserves broadest those most integral mission, active *9 “diplomatic agents,” defined include “the head of the mission or member of the diplomatic staff of the mission.” VCDR art. 1(e). Diplomatic agents are entitled complete from the criminal jurisdiction of the receiving State. Id. art. 31(1). A diplomatic agent is also entitled the civil administrative of the receiving State, with exceptions three categories of cases:
(a) A real action relating private immovable property situated in the territory of the receiving State, unless he holds it on behalf of the sending State the purposes the mission; (b) An action relating succession which the diplomatic agent is involved executor, administrator, heir legatee private person behalf the sending State; (c) An action relating any professional commercial activity exercised by diplomatic agent receiving State outside his official functions.
Id.
“In interpreting treaty, is well established we begin with text treaty context which written words are used.” Swarna *10 at 132. Where the text is “difficult or ambiguous,” we may both employ “general rules construction” and “look beyond written words history treaty, negotiations, and practical construction adopted by parties.” E. Airlines, Inc. Floyd , 499 U.S. 530, 535 (1991); see also Medellin v. Texas , 552 U.S. 507 (2008) (“Because treaty ratified by United States is an agreement among sovereign powers, we have also considered as aids its interpretation negotiation drafting history treaty well postratification understanding signatory nations.”). In addition, “although conclusive, meaning attributed treaty provisions Government agencies charged with negotiation enforcement is entitled great weight.” United States Stuart U.S. 369 (1989); see also Medellin 552 U.S. at 513 (“It is . . . well settled States’ interpretation treaty is entitled great weight.”).
The Diplomatic Relations Act (“DRA”) incorporated VCDR into U.S. law repealed contradictory earlier legislation. Pub. L. No. ‐ Stat. (1978) (codified U.S.C. §§ 254a e, U.S.C. § DRA makes clear must dismiss “[a]ny action proceeding brought against individual who entitled respect such action proceeding the Vienna Convention.” 22 U.S.C. § 254d. While altering or augmenting VCDR’s substantive provisions, DRA provides certain procedural clarifications as how diplomatic immunity may be established asserted, including that, when a lawsuit is filed against someone who claims protection of diplomatic immunity, “[s]uch immunity may established upon suggestion by or behalf of individual, or otherwise permitted by law applicable rules procedure.” Id.
C. bear burden establishing jurisdiction Generally, plaintiff, party asserting subject matter jurisdiction, has burden proving it exists by a preponderance evidence. See Makarova United States , 201 F.3d 113 (2d Cir. 2000). Diplomatic immunity is matter subject matter jurisdiction. See Brzak F.3d at 11; Tachiona States (2d Accordingly, where defendant has demonstrated status, would seem follow plaintiff must prove by preponderance evidence applies. *12 Plaintiffs argue, however, courts should instead require defendants bear ultimate burden persuasion proving no exception applies. rely on a line cases interpreting Foreign Sovereign Immunities Act (“FSIA”), 28 U.S.C. §§ 1330, 1602 ‐ 11, which governs jurisdiction courts suits brought against foreign states agents instrumentalities. Certain courts, including this one, have applied a unique “burden ‐ shifting framework” determining jurisdiction where there is claim foreign sovereign immunity. See, e.g. , Virtual Countries, Inc. v. Republic S. Afr. , 300 F.3d 230, 242 (2d Cir. 2002); Phoenix Consulting Inc. v. Republic Angl. , 216 F.3d 36, 40 (D.C. Cir. 2000); Forsythe v. Saudi Arabian Airlines Corp. , 885 F.2d 285, 289 n.6 (5th 1989) (per curiam). Under burden ‐ shifting approach, “[o]nce defendant presents prima facie evidence foreign sovereign, falls plaintiff establish preponderance FSIA permits over foreign sovereign.” Swarna , 622 at 143. If plaintiff applied. See, e.g. , Koumoin v. Ban Ki ‐ Moon , No. 16 ‐ cv ‐ 2111 (AJN), 2016 U.S. Dist. LEXIS 172953, at *9 (S.D.N.Y. Dec. 14, 2016); Hilt Constr. & Mgmt. Corp. v. Permanent Mission Chad Nations , No. cv ‐ (VB), 2016 U.S. Dist. LEXIS *3 (S.D.N.Y. June 2016); Devi Silva F. Supp. 2d 135, (S.D.N.Y. 2012); Baoanan Baja F. Supp. 2d (S.D.N.Y. *13 meets this burden, the defendant claiming FSIA immunity “then bears the ultimate burden persuasion the FSIA does not apply.” Id . The burden ‐ shifting approach appears come directly the FSIA’s legislative history. [5] The States argues as amicus this statement the legislative history was error and is inconsistent with the text the FSIA.
Regardless whether burden ‐ shifting approach is appropriate as applied FSIA, there is no justification extending VCDR immunity. The FSIA, as statute was enacted after VCDR was not intended affect under VCDR, is generally inappropriate use “as interpretive guide Vienna Convention.” Tabion Mufti , 73 F.3d 535, 538 n.7 (4th Cir. 1996); see 767 Third Ave. 988 F.2d at 297 (“[T]he consular immunities foreign states recognized various treaties remain unaltered [FSIA].”). Moreover, VCDR DRA do not share *14 the unique legislative history that has been used justify the burden ‐ shifting approach as applied FSIA.
The DRA’s legislative history, in contrast FSIA’s, includes specific disclaimers any intention impose special proceedings on courts where immunity is claimed. See S. Rep. No. 95 958, 5 (1978) (noting that prior version bill that would be enacted as DRA had been revised because that version “might be read impose on courts new special motion procedure immunity cases”). DRA, as enacted, strongly suggests usual rules should be applied assessing jurisdiction where immunity is claimed. See 22 U.S.C. § 254d (“[I]mmunity may established upon suggestion . . . otherwise permitted law or applicable rules procedure .”) (emphasis added). And courts regularly require bear burden establishing where other types immunity are claimed. [6] *15 See, e.g. , Chayoon v. Chao , 355 F.3d 141, 143 (2d Cir. 2004) (per curiam); Makarova , 201 F.3d at 113; Garcia v. Akwesasne Hous. Auth. , 268 F.3d 76, 84 (2d Cir. 2001).
Accordingly, where a defendant has demonstrated status, we hold that plaintiffs bear the burden of proving by a preponderance of the evidence that an to applies that jurisdiction therefore exists. [7]
23 (2d Cir. 2014) (summary order) (applying the usual rule plaintiffs bear the burden proving by a preponderance the evidence where defendants move to dismiss Rule 12(b)(1) based on common law foreign official immunity).
[7] For the first time on appeal, plaintiffs also argue the court erred requiring bear this proof at motion dismiss stage, rather than leaving jurisdictional determination for trial after conclusion discovery. As failed raise this argument below otherwise object court’s resolution jurisdictional question dismiss stage, argument is waived. See Tannerite Sports, LLC v. NBCUniversal News Grp. , F.3d ‐ 53 (2d Cir. 2017) (“It is a well ‐ established general rule an appellate court will not consider an issue raised first time on appeal.”). Moreover, plaintiffs’ argument is entirely meritless, deferral jurisdictional issue until trial is extremely “unusual situation,” Dorchester Fin. Sec., Inc. Banco BRJ, S.A. F.3d (2d Cir. 2013) (per curiam), appropriate only where “the overlap such fact finding jurisdictional issue will adjudicate factual issues required Seventh Amendment resolved by jury,” Alliance Envtl. Renewal, Inc. Pyramid Crossgates Co. (2d Here, did need resolve ultimate merits question Benomar’s liability plaintiffs’ alleged injuries order resolve jurisdictional question whether had, while diplomat, engaged commercial professional
D. The commercial activity exception to diplomatic does not apply to plaintiffs’ claims
We next turn to question whether met their establishing exception diplomatic applies. Plaintiffs claim suit can proceed pursuant commercial activity exception diplomatic immunity, which permits diplomat sued in “[a]n action relating any professional or commercial activity exercised agent in receiving State outside his official functions.” VCDR art. 31(1)(c). While precise contours phrase “professional commercial activity,” which defined in VCDR, are unsettled, it is broadly understood refer trade business activity engaged personal profit. See Tabion Mufti (4th contend Benomar engaged commercial activity because his alleged ‐ profit work hack smear campaign late early 2018. United States argues amicus complaint fails even allege application commercial activity exception because alleges only conduct occurring before obtained status based immunity, and, States’ view, commercial activity conduct outside his role.
does not apply to conduct before diplomat obtained status based immunity. However, we need not reach question of when activity must occur to qualify commercial activity what type of activity qualifies because clear from record that failed meet their of proving a preponderance that Benomar at any time engaged alleged smear campaign. attached three documents their opposition motion
dismiss, only one which, transcript deposition alleged Qatari agent Joey Allaham, taken during discovery California action, was relevant corroborating allegations commercial activity. In transcript segment submitted, Allaham’s only statement relevant Benomar was that he had at one point considered suing Benomar over money Qatar owed Allaham, but he decided after his lawyers advised him suing Benomar would “waste” his money. Joint App’x 249. In his reply brief support his dismiss, submitted additional pages Allaham deposition transcript, which Allaham specifically affirmed he never discussed hack Broidy’s emails Benomar.
Plaintiffs supplied no other evidence in support of their allegations. complaint refers phone records showing that Benomar was in regular telephone contact with participants in alleged hacking conspiracy key points close hack media distribution. Plaintiffs did not, however, attach any these records, which they represent they obtained in discovery in California action, their opposition dismiss. Moreover, record evidence is inconsistent with plaintiffs’ allegations concerning nature these calls: Benomar submitted a declaration affirming that he had received no renumeration Qatar that his communications Qatari representatives were furtherance his duties Morocco.
Reviewing this evidence, rightly concluded had failed meet proving by preponderance evidence Benomar had engaged commercial professional activity. submitted no whatsoever was engaged activity received payments alleged, only snippet deposition transcript that, viewed context additional transcript pages submitted Benomar, both unpersuasive misleadingly out context. As failed establish commercial activity applied, *19 we find that Benomar entitled under terms of Vienna Convention, plaintiffs’ claims against him were properly dismissed for lack of subject matter jurisdiction. [8]
II. district court did not abuse its discretion in denying jurisdictional
discovery also argue district court erred denying request jurisdictional discovery. “We review district court’s denial jurisdictional discovery abuse discretion . . . .” Arch Trading Corp. v. Republic Ecuador , F.3d 206 (2d Cir. 2016). “A court has wide latitude determine scope discovery.” Frontera Res. Azer. Corp. State Oil Co. Azer. Republic F.3d (2d Cir. 2009). Moreover, “[t]he court has considerable latitude devising procedures it will follow ferret out facts pertinent jurisdiction.” Foremost McKesson, Inc. Islamic Republic Iran (D.C.
Plaintiffs’ arguments ignore fact offered plaintiffs opportunity make specific jurisdictional discovery requests, *20 failed to do so. district court clearly instructed to make any specific discovery requests their opposition the motion to dismiss. However, instead making specific requests, merely stated summary paragraph at the end their opposition they were entitled discovery. then attempted supply district court with actual request for production documents for first time after district court had denied general request for discovery granted Benomar’s dismiss. Plaintiffs’ own failure follow court’s procedures for seeking jurisdictional discovery does not constitute grounds reversal court’s decision.
Further, contrary plaintiffs’ contentions otherwise, was appropriate court balance need jurisdictional discovery risk imposing discovery obligations diplomat who fact possesses court’s jurisdiction—and, moreover, who generally “is obliged give witness” VCDR. VCDR art. 31(2). Like sovereign immunity, protects mission “from expense, intrusiveness, hassle litigation.” Arch Trading 206. Achieving this goal requires “a court must circumspect allowing discovery before plaintiff has established has jurisdiction.” Id. *21 In FSIA context, this Court has described discovery “warranted only to verify allegations specific facts crucial to determination” inappropriate where “plaintiffs do not yet know what they expect to find discovery” advance only broad demands discovery kind plaintiffs advanced their opposition to to dismiss. Id. (affirming denial jurisdictional discovery where “plaintiffs did not specify . . . what discovery they might seek”).
Accordingly, district court did not abuse its discretion denying jurisdictional discovery. III. district court did abuse its discretion denying leave amend complaint
Finally, argue court abused its discretion denying leave amend complaint. “We review court’s denial leave amend abuse discretion.” Kim Kimm (2d While, pursuant Rule 15(a) Federal Rules Civil Procedure, “leave amend shall freely given when justice so requires, within sound discretion grant deny leave amend . . . good reason, including futility, bad faith, undue delay, undue prejudice opposing party.” Id.
Here, permitting plaintiffs to amend their complaint requested would have been futile. Plaintiffs’ proposed amended complaint simply adds conclusory allegations and legal arguments already either included in original complaint presented to court in plaintiffs’ opposition to motion to dismiss. New allegations do advance plaintiffs towards meeting their proof in establishing jurisdiction. See Filetech S.A. France Telecom S.A. F.3d (2d Cir. 1998) (“[I]t was error court to accept mere allegations complaint basis finding subject matter jurisdiction.”), overruled on other grounds Lotes Co. Hon Hai Precision Indus. Co. (2d If plaintiffs had evidence to support new allegations relevant to jurisdiction, they could should have presented that court their opposition to motion to *23 dismiss, court explicitly instructed plaintiffs do when denying amend complaint prior motion dismiss. Allowing such futile amendment would particularly prejudicial where defendant diplomat who possesses treaty based suit. Therefore, proposed amendments would not enable establish would affect proper dismissal complaint, did not abuse its discretion denying leave amend.
CONCLUSION
For reasons stated, we affirm judgment court.
[1] allege both federal question diversity citizenship jurisdiction, alleged violations “Defend Trade Secrets Act,” U.S.C. § et seq ., state law causes action.
[2] Unless otherwise noted, when quoting cases, all internal quotation marks, citations, alterations are omitted.
[3] “The ‘head mission’ person charged sending State duty acting capacity . . . .” VCDR art. 1(a). “The ‘members staff’ are members staff mission having rank . . . .” Id. art. 1(d).
[4] Courts this circuit have consistently required plaintiff prove preponderance where VCDR is claimed, least where courts explicitly state what proof being
[5] See H.R. Rep. No. ‐ (1976), reprinted 1976 U.S.C.C.A.N. (“Once foreign state has produced such prima facie evidence immunity, burden going forward would shift plaintiff produce establishing foreign state entitled immunity. ultimate burden proving would rest foreign state.”); Gould, Inc. Pechiney Ugine Kuhlmann (6th 1988) (citing this legislative history source shifting approach).
[6] point out some courts have applied FSIA ‐ shifting standard where common law foreign official immunity is claimed. However, case identify does so relies FSIA case law without discussing why FSIA standard should apply common law foreign official immunity context. See Lewis v. Mutond , (D.C. It is not clear is correct use FSIA’s standard this context, common law foreign official is distinct FSIA predates FSIA. Samantar Yousuf , U.S. (2010). Moreover, this approach universally accepted . See, e.g. Rosenberg Pasha F. App’x
[8] As we find failed establish engaged alleged smear campaign, we need address further questions whether alleged activity itself would qualify professional commercial activity VCDR whether occurred relevant time period claiming application exception.
[9] Plaintiffs’ primary argument on appeal they should have been permitted leave amend rests mischaracterization record. argue they should have been permitted amend because Benomar received diplomatic status one day before they filed their opposition dismiss they had no opportunity address his new status. However, were aware before first conference case planned claim immunity, and, even more point, affirmatively stated letter following Benomar’s change status they believed opposition adequately addressed Benomar’s changed status no further briefing was required.