ODILON S. CELESTIN, WIDIMIR ROMELIEN, GOLDIE LAMOTHE-ALEXANDRE, VINCENT MARAZITA, Plaintiffs-Appellants, v. CARIBBEAN AIR MAIL, INC., WESTERN UNION, UNITRANSFER USA, INC., UNIBANK, S.A., UNIGESTION HOLDING, S.A., DBA DIGICEL HAITI, WESTERN UNION FINANCIAL SERVICES, INC., MICHEL JOSEPH MARTELLY, JOCELERME PRIVERT, JOVENEL MOISE, NATCOM S.A., GOVERNMENT OF HAITI, Defendants-Appellees.
20-1412-cv
United States Court of Appeals for the Second Circuit
March 31, 2022
August Term, 2021 (Argued: October 26, 2021)
NEWMAN, PARK, and LEE, Circuit Judges.
Plaintiffs brought this putative class action alleging that Defendants—Haitian government officials and multinational corporations—conspired to fix the prices of remittances and telephone calls from the United States to Haiti. Defendants allegedly agreed to produce official instruments (a Presidential Order and two Circulars of the Bank of the Republic of Haiti) to disguise their agreement as a tax for domestic education programs. Plaintiffs brought a price-fixing claim
We hold that the act of state doctrine does not bar adjudication of a claim merely because that claim turns on the “propriety” of the official acts of a foreign sovereign. Instead, the doctrine forecloses a claim only if it would require a court to declare that an official act of a foreign sovereign is invalid, i.e., to deny the act legal effect. W.S. Kirkpatrick & Co. v. Env‘t Tectonics Corp., Int‘l, 493 U.S. 400 (1990). Here, even assuming the Presidential Order and Circulars have their full purported legal effect under Haitian law, Plaintiffs’ antitrust claim under U.S. federal law remains cognizable. We therefore REVERSE the district court‘s dismissal of the antitrust claim under the act of state doctrine and VACATE the dismissal of the fifteen state-law claims for reanalysis under the proper standard. We further VACATE the dismissal on the alternative grounds of forum non conveniens because the district court did not give due deference to U.S.-resident Plaintiffs’ choice of forum. The case is REMANDED for further proceedings consistent with this opinion.
Judge NEWMAN concurs in a separate opinion.
RODNEY AUSTIN, Rodney R. Austin PLLC, Fresh Meadows, NY (Marcel P. Denis, Denis Law Group, PLLC, Brooklyn, NY, on the brief), for Plaintiffs-Appellants.
JAMES I. MCCLAMMY (James H.R. Windels, Robert G. King, on the brief), Davis Polk & Wardwell LLP, New York, NY, for Defendant-Appellee Unigestion Holding, S.A., DBA Digicel Haiti.
ANDREW P. FISHKIN, Fishkin Lucks LLP, New York, NY, for Defendant-Appellee The Western Union Company.
Oliver M. Birman, Benjamin L. Reiss, Paul D. Turner, Perlman, Bajandas, Yevoli & Albright, P.L., Fort Lauderdale, FL; Kieran M. Corcoran, Stinson LLP, New York, NY, for Defendants-Appellees Unitransfer USA, Inc., and Unibank, S.A.
BERTRAND MADSEN, Madsen Law P.C., New York, NY, for Defendants-Appellees Michel Joseph Martelly, Jocelerme Privert, Jovenel Moise, and Government of Haiti.
Macx L. Jean-Louis, Law Offices of Macx L. Jean-Louis P.C., New York, NY, for Defendant-Appellee Natcom S.A.
PARK, Circuit Judge:
Under the act of state doctrine, U.S. courts may not declare the official acts of a foreign sovereign to be invalid. But the doctrine does not bar our adjudication of whether those same acts are wrongful under a cause of action properly brought before us. See W.S. Kirkpatrick & Co. v. Env‘t Tectonics Corp., Int‘l, 493 U.S. 400 (1990).
This case presents the question whether the act of state doctrine requires dismissal of an antitrust claim implicating official acts of the Haitian government.
We hold that the act of state doctrine does not foreclose Plaintiffs’ antitrust claim because no official act of Haiti must be deemed invalid for liability to attach under federal law. We thus reverse in part. We also vacate the district court‘s dismissal of fifteen state-law claims and remand for reanalysis under the correct standard. We further vacate the court‘s alternative dismissal under forum non conveniens because it did not give due deference to U.S.-resident Plaintiffs’ choice of forum.
I. BACKGROUND
A. Factual Allegations
Plaintiffs are U.S. residents with relatives and friends in Haiti. Defendants Caribbean Air Mail, Inc., Western Union, Unitransfer USA, Inc., Unibank, S.A.,
As alleged,1 Martelly orchestrated a far-reaching price-fixing agreement with the Corporate Defendants before becoming President in 2011. The “mechanism” for implementing the agreement was a Presidential Order and two Circulars of the Bank of the Republic of Haiti that Martelly would issue after taking office. Compl. ¶ 56. The Presidential Order set a “floor price for all incoming international call[s]” at $0.23 per minute and required that $0.05 per minute be “turned over to the Government.” Id. ¶¶ 60–61. Similarly, the Circulars “memorialized” Defendants’ agreement to add a $1.50 fee to remittances of food and money sent to Haiti from certain countries, including the United States. Id.
Martelly represented to the public that these policies would raise revenues to support a Haitian compulsory education program. But in fact, Plaintiffs say, no such program existed. Rather, just months after publication of the Presidential Order, “it was discovered that [$26] million in the new National Fund for Education was missing.” Id. ¶ 82. Plaintiffs assert that each Corporate Defendant retained a portion of the fees it collected rather than transmitting the full amount to the Haitian treasury. And Martelly, Privert, and Moise, during their respective terms, profited personally from the fees as well. Moreover, Plaintiffs say that the Presidential Order and Circulars ran afoul of Haitian law because “only the parliament may raise taxes and fees for the benefit of the state.” Id. ¶ 57 & n.6. As part of the scheme, Plaintiffs allege, Defendants told customers that these fees were in fact collected pursuant to a “lawful tax” for education. Id. ¶¶ 50, 72, 98, 119, 136, 150, 169, 188, 190, 198, 208.
B. Procedural History
Plaintiffs brought a putative class action in the U.S. District Court for the Eastern District of New York on behalf of “[a]ll persons in the United States and its territories who used the services of one or more of the [Corporate Defendants or Natcom] . . . who were subjected to paying the $1.50 [fee] on money and food transfers made to and from Haiti and $0.05 per minute [fee] on phone calls placed to and from Haiti.” Id. ¶ 39. The Complaint raises a claim of price-fixing in violation of Section 1 of the Sherman Act,
Second, the district court dismissed all claims against the Government Defendants under the law of the case doctrine. See Celestin v. Martelly (Celestin II), No. 18-cv-7340, 2021 WL 918290 (E.D.N.Y. Mar. 10, 2021). The court followed its earlier ruling based on the act of state doctrine and declined to reach the issue of forum non conveniens. Id. at *2, *3 n.4. Plaintiffs timely appealed both rulings.
II. STANDARDS OF REVIEW
Review of dismissal under forum non conveniens is for abuse of discretion. Pollux Holding Ltd. v. Chase Manhattan Bank, 329 F.3d 64, 70 (2d Cir. 2003). “Discretion is abused in the context of forum non conveniens when a decision (1) rests either on an error of law or on a clearly erroneous finding of fact, or (2) cannot be located within the range of permissible decisions, or (3) fails to consider all the relevant factors or unreasonably balances those factors.” Id. (citation omitted).
III. DISCUSSION
A. Act of State Doctrine
1. Legal Framework
The act of state doctrine bars federal and state courts from “declar[ing] invalid, and thus ineffective as a rule of decision for the courts of this country, the official act of a foreign sovereign.” Kirkpatrick, 493 U.S. at 405 (cleaned up). The doctrine is not a principle of abstention, a grant of immunity, or a bar on liability based on compliance with foreign laws. Rather, the act of state doctrine is a “rule
In Kirkpatrick, the Supreme Court‘s last major act of state case, a unanimous Court outlined the contours of the doctrine. The Court explained that the rule is a “principle of decision binding on federal and state courts alike,” and grounded it in “‘the strong sense of the Judicial Branch that its engagement in the task of passing on the validity of foreign acts of state may hinder’ the conduct of foreign affairs.” Id. at 404, 406 (quoting Banco Nacional de Cuba v. Sabbatino, 376 U.S. 398, 423, 427 (1964)). Instructively, Kirkpatrick included a synthesis of the Court‘s act of state case law:
In every case in which we have held the act of state doctrine applicable, the relief sought or the defense interposed would have required a court in the United States to declare invalid the official act of a foreign sovereign performed within its own territory. In Underhill v. Hernandez, 168 U.S. 250, 254 (1897), holding the defendant‘s detention of the plaintiff to be tortious would have required denying legal effect to “acts of a military commander representing the authority of the revolutionary party as government, which afterwards succeeded and was recognized by the United States.” In Oetjen v. Central Leather Co., 246 U.S. 297 (1918), and in Ricaud v. American Metal Co., 246 U.S. 304 (1918), denying title to the party who claimed through purchase from Mexico would have required declaring that government‘s prior seizure of the property, within its own territory,
legally ineffective. See Oetjen, 246 U.S. at 304; Ricaud, 246 U.S. at 310. In Sabbatino, upholding the defendant‘s claim to the funds would have required a holding that Cuba‘s expropriation of goods located in Havana was null and void.
Id. at 405–06 (citations cleaned up). In Kirkpatrick itself, the act of state doctrine did not bar U.S. courts from adjudicating a Racketeer Influenced and Corrupt Organizations (RICO) claim,
Importantly, Kirkpatrick clarified what the act of state doctrine is not: It is not a “doctrine of abstention,” Id. at 406, and it “does not establish an exception for cases and controversies that may embarrass foreign governments,” Id. at 409.
Similarly, our own post-Kirkpatrick cases have confirmed the well-defined bounds of the doctrine. In Federal Treasury Enterprises Sojuzplodoimport v. Spirits International B.V. (FTE), 809 F.3d 737 (2d Cir. 2016), we held that a Russian Federation “Decree” and “Assignment” reassigning all title and interest in a trademark from the Russian government to FTE were protected by the act of state doctrine. Id. at 744. We had “little trouble concluding” that the doctrine rendered
In Kashef v. BNP Paribas S.A., 925 F.3d 53 (2d Cir. 2019), we rejected a proposed application of the act of state doctrine to bar plaintiffs from suing BNP Paribas for alleged aiding and abetting of atrocities by the government of Sudan. We held that nothing in the claim required a court to “declare invalid” a foreign official act. Id. at 59 (quoting Kirkpatrick, 493 U.S. at 405). Validity was simply not an issue: To evaluate the merits of the aiding and abetting claim, the Court had to
Most recently, in In re Vitamin C Antitrust Litigation, 8 F.4th 136 (2d Cir. 2021), we distinguished the act of state doctrine from other doctrines like comity and foreign sovereign compulsion. In that case, plaintiffs brought an antitrust claim against Chinese defendants who asserted that their conduct was required by Chinese law. See Id. at 140. We explained that we were “not called upon to express any view about the legality—under Chinese or international law—of the . . . export regime that the Chinese government implemented.” Id. at 162 n.44. By legality under Chinese and international law,3 we meant that nothing required us to deny the regime its purported legal effect or to “declare invalid, and thus ineffective as a rule of decision for the courts of this country the official act of a foreign sovereign.” Id. (quoting Kirkpatrick, 493 U.S. at 405).
2. Defendants’ Erroneous View
Defendants’ arguments are inconsistent with this understanding of the act of state doctrine. Defendants propose that the doctrine bars courts from deciding cases that involve passing judgment on the policies, laws, and motivations of a foreign sovereign. Tellingly, in their supplemental briefing ordered by the Court,6 Defendants did not even mention Kirkpatrick, the most relevant Supreme Court case about the doctrine. Defendants instead urge us to adopt a framework relying on our pre-Kirkpatrick cases and similar cases from sister circuits. We reject this erroneous view for two reasons.
First, Defendants’ argument rests on portions of our cases that have been abrogated by Kirkpatrick. In O.N.E. Shipping Ltd. v. Flota Mercante Grancolombiana, S.A., 830 F.2d 449 (2d Cir. 1987), O.N.E. brought an antitrust suit alleging that a Colombian shipping line entered into anticompetitive agreements under a Colombian cargo reservation law that gave preferences to Colombian flag vessels. The Court characterized the act of state doctrine as “a principle of law designed
We conclude that these characterizations of the act of state doctrine were all but expressly abrogated by Kirkpatrick. The question presented in Kirkpatrick was whether “the act of state doctrine bars a court in the United States from entertaining a cause of action that does not rest upon the asserted invalidity of an official act of a foreign sovereign, but that does require imputing to foreign officials an unlawful motivation.” Id. at 401 (emphasis added). The Court answered that question “no.” See Id. at 408 (rejecting the government‘s argument that the
Our more recent decisions in FTE, Kashef, and Vitamin C all characterize the doctrine consistently with this understanding. In particular, in Vitamin C, a
Second, Defendants’ effort to equate an act‘s “validity” with whether it breaches some legal duty is inconsistent with Kirkpatrick.10 The Court in Kirkpatrick repeatedly described “invalid” as meaning “null and void,” “ineffective,” or without “legal effect,” rather than “complained of” or “impugned.” Id. at 405-07. In the same vein, we have explained that the doctrine requires that “the acts of the foreign sovereign within its dominions [be] deemed ‘valid when
Kirkpatrick distinguished between violations of a legal duty and the validity of government acts in its discussion of Underhill v. Hernandez, 168 U.S. 250 (1897). The Court applied the act of state doctrine in that case because it could find a Venezuelan revolutionary general‘s seizure “tortious” only if he lacked official
Our own cases are equally clear. In Vitamin C, we concluded that the defendants could not prevail under the act of state doctrine even though we agreed with their contention that the conduct alleged to violate the Sherman Act was mandated by the Chinese government. See 8 F.4th at 162 n.44. And in FTE, we distinguished the “validity of the Assignment” of trademarks from the “merits issue” of the unlawfulness of alleged trademark infringement. 809 F.3d at 744. Similarly, the Restatement clarifies that “[a] court may impose legal consequences on a transaction or event without having to pass on the validity of the act.” Restatement (Fourth) of Foreign Relations Law § 441 cmt. d.
3. Application
The district court reasoned that “the act of state doctrine applie[d]” to bar Plaintiffs’ claims because the court could not “adjudicate Plaintiffs’ claims without
a. Antitrust Claim
Plaintiffs allege that shortly before assuming the office of President of Haiti, Martelly “communicated directly with [the Corporate] Defendants . . . to raise prices on telecommunication and money transfer services.” Compl. ¶ 222. The conspiracy included “a continuing agreement, understanding, and concert of action among the Defendants” to “raise” the price of “money and food remittances by US$1.50” and “fees on all international calls to Haiti by US$0.05 per minute.” Id. ¶ 226. Defendants implemented their agreement via the Presidential Order and two Circulars, which allegedly were the “instrumentalit[ies]” and “memorializ[ations]” of the agreements. Id. ¶¶ 63, 65. The motivation for this price-fixing was not the public interest, Plaintiffs say, but rather Defendants’ self-enrichment. See id. ¶¶ 85, 116, 131, 146, 163, 170, 274.
Defendants argue that the act of state doctrine bars the antitrust claim because it would require determining that, by agreeing to implement the Presidential Order and Circulars, Defendants violated the
Indeed, Kirkpatrick itself alluded to the justiciability of antitrust suits of this kind. Defendants in that case cited American Banana Co. v. United Fruit Co., 213 U.S. 347 (1909), which contains the Court‘s now-overruled holding that the antitrust laws do not extend extraterritorially. Defendants viewed American Banana as barring the kind of review of the antitrust claim that the district court would need to perform here. The Court rejected that reading and explained that a “defendant‘s actions in obtaining [a foreign country‘s] enactment of ‘discriminating legislation’ could form part of the basis for suit under the United States antitrust laws.” Kirkpatrick, 493 U.S. at 407 (quoting United States v. Sisal Sales Corp., 274 U.S. 268, 276 (1927)).
In sum, Plaintiffs’ antitrust claim depends not on “whether the alleged acts are valid, but whether they occurred” in a way that gives rise to liability. Id. at 406 (quoting Sharon v. Time, Inc., 599 F. Supp. 538, 546 (S.D.N.Y. 1984)) (cleaned up). The act of state doctrine thus does not foreclose Plaintiffs’ antitrust claim.
b. State-Law Claims
The parties focused primarily on the antitrust claim and provided minimal briefing on Plaintiffs’ fifteen state-law causes of action. Defendants assert that for Plaintiffs to succeed on these claims, the district court would be required to find that the Presidential Order and Circulars do not comply with relevant requirements of Haitian law and so deny them legal effect. We remand to the district court to conduct the inquiry required under the act of state doctrine consistent with this opinion.16
B. Forum Non Conveniens
1. Legal Standards
There are three steps to the forum non conveniens inquiry: (1) “determine[] the degree of deference properly accorded the plaintiff‘s choice of forum“; (2) “consider[] whether the alternative forum proposed by the defendants is adequate to adjudicate the parties’ dispute“; and (3) “balance[] the private and
We begin and end at step one, the level of deference accorded to Plaintiffs’ choice of forum. As the Supreme Court has explained, “[w]hen the home forum has been chosen, it is reasonable to assume that this choice is convenient.” Piper Aircraft Co. v. Reyno, 454 U.S. 235, 255–56 (1981). That said, “if the balance of conveniences suggests that trial in the chosen forum would be unnecessarily burdensome for the defendant or the court, dismissal is proper.” Id. at 255 n.23.
We have held that a plaintiff‘s residence is relevant to the extent that it shows that “considerations of convenience,” rather than gamesmanship and the pursuit of a favorable forum, motivated the decision to “conduct . . . the lawsuit in the United States.” Iragorri v. United Techs. Corp., 274 F.3d 65, 72 (2d Cir. 2001) (en banc). The proper degree of deference is a “sliding scale.” Id. at 71.
2. Application
The district court discussed deference to Plaintiffs’ choice of forum in a single sentence: “[S]pecial deference is not given to Plaintiffs’ choice of forum because in relation to the ‘core operative facts in dispute [the parties and events] at best [] have only marginal links to [P]laintiffs’ selected forum.‘” Celestin I, 524
We conclude that the district court clearly erred in determining that Plaintiffs had only “marginal links” to an American forum. To the contrary, the Complaint alleges that named Plaintiffs are all U.S. residents, that many are U.S. citizens, and that several reside in the Eastern District of New York.17 The district court thus exceeded its discretion in summarily deciding not to give deference to Plaintiffs’ choice of forum. See Iragorri, 274 F.3d at 72. Rather than “undertake our own de novo review, simply substituting our view of the matter for that of the district court,” id., we leave it to the district court to decide the question under the correct level of deference. Accord id. at 75–76 (en banc Court vacating and remanding where the district court failed to “accord appropriate deference“).
Plaintiffs seek to send money and make phone calls to their relatives, friends, and other contacts in Haiti. They allege that Defendants have unlawfully colluded to make these activities more expensive, and nothing Plaintiffs seek through that claim requires a court to declare an act of the Haitian government null and void. Whether Plaintiffs have stated a plausible claim for relief under the
I agree that the act of state doctrine does not bar the Plaintiffs-Appellants’ antitrust claim, and I also agree that the District Court failed to give proper consideration to the Plaintiffs-Appellants’ choice of their home forum, thus rendering improper the Court‘s dismissal of the complaint on the ground of forum non conveniens.
However, on both the act of state issue and the forum non conveniens issue, I would go further. Specifically, I would rule that the act of state doctrine does not bar the Plaintiffs’ state law claims. I would also rule that the District Court exceeded its discretion by dismissing the case on the ground of forum non conveniens. The remand should therefore be for further proceedings on the merits, not for further briefing on the act of state doctrine because that issue has already been briefed twice, and not for further District Court consideration of forum non conveniens because, on the undisputed facts, a renewed dismissal on that ground would have to be reversed for exceeding allowable discretion.
1. Act of State
We all agree that if the actions of a foreign state (here, Haiti) are assumed to be valid under the law of that state, the act of state doctrine does not bar a claim. See W.S. Kirkpatrick & Co. v. Environmental Tectonics Corp., 493 U.S. 400, 405 (1990).
There is no reason to order further briefing on the act of state doctrine. The act of state doctrine does not bar the state law claims for the same reason that it does not bar the antitrust claims: the Haitian taxes and fees alleged to have injured the Plaintiffs in the United States can be assumed to be valid under Haitian law. “[W]hen the validity of a foreign state‘s action is not the question being litigated, and the inquiry is simply whether the conduct in question occurred, the act of state doctrine is not implicated.” Kashef v. BNP Paribas S.A., 925 F.3d 53, 59 (2d Cir. 2019). The Plaintiffs’ state law claims are not based on the imposition of the taxes and fees, which we assume was lawful under Haitian law, but are based on the state officials’ diversion of the tax and fee proceeds to their personal use. For example,
All parties have already had two opportunities to brief the act of state issue in this Court. After they filed their initial briefs, we ordered supplemental briefing explicitly on the doctrine‘s application to this case, and we received whatever the parties cared to tell us. In their supplemental briefing, the Plaintiffs specifically referred to their state law claims. There is no newly identified issue. Remanding for a third round of briefing burdens a busy District Judge and needlessly delays the progress of this case, both in the District Court and in this Court, in the event
2. Forum Non Conveniens
We all agree that the District Court, in dismissing on the ground of forum non conveniens, failed to give proper consideration to the Plaintiffs’ choice of their home forum. But, in addition to that, on the undisputed facts of this case, dismissal of the case on the ground of forum non conveniens is so clearly beyond the limits of the District Court‘s discretion that there is no reason to give that Court another opportunity to make the same mistake.
Six of the Plaintiffs are United States citizens, and all seven reside in the United States. Three Plaintiffs live in New York City. Four of the corporate Defendants are United States corporations with their principal places of business in the United States. There is “a strong presumption in favor of the plaintiff‘s choice of forum.” Piper Aircraft Co. v. Reyno, 454 U.S. 235, 255 (1981). “[U]nless the balance [of relevant factors] is strongly in favor of the defendant, the plaintiff‘s choice of forum should rarely be disturbed.” Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 508 (1947). “[O]ur caselaw and that of the Supreme Court has clearly and unambiguously established that courts should offer greater deference to the
The adverse effects of the Defendants’ challenged actions, i.e., the increased costs imposed on the Plaintiffs, were felt in the United States, which is also relevant to maintaining a case in a plaintiff‘s choice of forum. Indeed, even in a case where the alleged wrongful conduct occurred abroad, we reversed a dismissal on the ground of forum non conveniens largely because the plaintiffs were U.S. citizens, see Guidi v. Inter-Continental Hotels Corp., 224 F.3d 142 (2d Cir. 2000), and had not even sued in their district of residence, as some of the Plaintiffs here did.
Assuming, as I do, that if any transfer were warranted, Haiti would be an adequate forum, the undisputed facts so overwhelmingly make the Eastern District of New York the appropriate forum that the case cannot be transferred elsewhere. Any dismissal of this case on the ground of forum non conveniens “cannot be located within the range of permissible decisions,” Norex, 416 F.3d at
A remand for further consideration of the forum non conveniens issue also imposes a needless burden on the District Judge and, if dismissal were again ordered, would lead to an inevitable reversal by this Court.
Notes
493 U.S. at 407–08. Underhill‘s relevant holding, for act of state purposes, is that the plaintiff had no cognizable claim because “holding the defendant‘s detention of the plaintiff to be tortious” under plaintiff‘s causes of action “would have required denying legal effect to” the acts of a military commander. Id. at 405.Justice Holmes observed, citing Underhill, that “a seizure by a state is not a thing that can be complained of elsewhere in the courts.” [Am. Banana Co. v. United Fruit Co., 213 U.S. 347, 357–58 (1909).] The statement is concededly puzzling. Underhill does indeed stand for the proposition that a seizure by a state cannot be complained of elsewhere—in the sense of being sought to be declared ineffective elsewhere. The plaintiff in American Banana, however, like the plaintiff here, was not trying to undo or disregard the governmental action . . .. Simply put, American Banana was not an act of state case; and whatever it said by way of dictum that might be relevant to the present case has not survived . . . .
The district court also relied on the law of the case doctrine to dismiss all claims against the Government Defendants on act of state grounds after dismissing the claims against the Corporate Defendants. We reject the Government Defendants’ reliance on the law of the case for the same reasons we reject the district court‘s conclusions as to the Corporate Defendants. We do not reach Plaintiffs’ remaining arguments on appeal regarding the act of state doctrine.