UNITED STATES, Plaintiff, v. ONE GULFSTREAM G-V JET AIRCRAFT, Displaying tail number VPCES, its tools and Appurtenances, Defendant.
Civil Action No. 11-1874 (RC)
United States District Court, District of Columbia.
April 19, 2013.
RUDOLPH CONTRERAS, District Judge.
MEMORANDUM OPINION
GRANTING THE CLAIMANTS’ MOTION TO DISMISS WITHOUT PREJUDICE; GRANTING LEAVE TO AMEND
RUDOLPH CONTRERAS, District Judge.
I. INTRODUCTION
The United States brings this forfeiture action against a $38.5 million dollar jet purchased by Teodoro Nguema Obiang Mangue (“Nguema“), Equatorial Guinea‘s Minister of Forestry and Agriculture1 and the son of Equatorial Guinea‘s president. The government alleges that Nguema purchased the jet with funds derived from extortion, misappropriation, theft, and embezzlement. Although the government describes a disconcerting pattern of corruption in Equatorial Guinea, the complaint does not link the jet to any specific illicit acts. Accordingly, the court grants the claimants’ motion to dismiss.
II. LEGAL & FACTUAL BACKGROUND
A. Legal Framework
Forfeiture is an ancient penalty; its origins can be traced to biblicаl times. See Calero-Toledo v. Pearson Yacht Leasing Co., 416 U.S. 663, 681 n. 17 (1974) (citing Exodus 21:28) (“If an ox gore a man or a woman, and they die, he shall be stoned and his flesh shall not be eaten“). Based on the legal fiction that “the thing is primarily considered the offender,” Goldsmith-Grant Co. v. United States, 254 U.S. 505, 511 (1921), forfeiture law allows suit to be brought against an inanimate object rather than a person. See, e.g., In re Various Items of Personal Property, 282 U.S. 577, 581 (1931) (“[I]t is the property which is proceeded against, and, by resort to a legal fiction, held guilty and condemned as though it were conscious instead of inanimate and insentient.“). Commentators and judicial decisions have primarily understood the rationale for this peculiar concept to be a means of punishment for a wrongdoer. See, e.g., Austin v. United States, 509 U.S. 602, 611-14 (1993); Calero-Toledo, 416 U.S. at 681.
The Civil Asset Forfeiture Reform Act of 2000 (“CAFRA“),
Here, the government brings suit under two of CAFRA‘s substantive provisions:
B. Factual Allegations and Procedural History
Teodoro Nguema Obiang Mangue is the son of Equatorial Guinea‘s President.
The government alleges that Nguema is a member of Equatorial Guinea‘s “Inner Circle,” a coterie of powerful individuals who have ties to Equatorial Guinea‘s ruling family. The government alleges that members of the Inner Circle demand extortionate payments from oil companies seeking to do business in the country.
After some initial difficulties, Nguema purchased the jet from a private party via a nominal buyer known as Ebony Shine International, Ltd., a British Virgin Islands company.
III. ANALYSIS
A. The Court Denies the Claimants’ Motion to Dismiss for Lack of Jurisdiction
1. Legal Standard for a Motion to Dismiss for Lack of Jurisdiction3
Federal courts are courts of limited jurisdiction and the law presumes that “a cause lies outside this limited jurisdiction.” Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994). Accordingly, a federal court should first determine that it has jurisdiction over a case before ruling on the merits. Al-Zahrani v. Rodriguez, 669 F.3d 315, 317-18 (D.C. Cir. 2012). On a motion to dismiss for lack of jurisdiction under Rule 12(b)(1), the plaintiff bears the burden of establishing jurisdiction by a preponderance of the evidence. Lujan v. Defenders of Wildlife, 504 U.S. 555, 561 (1992). When considering a motion under Rule 12(b)(1), the court may look beyond the allegations set forth in the complaint and “may consider materials outside the pleadings.” Jerome Stevens Pharms., Inc. v. FDA, 402 F.3d 1249, 1253 (D.C. Cir. 2005).
2. The Court Hаs Jurisdiction Notwithstanding the Equatoguinean Government‘s Avowed Refusal to Comply With This Court‘s Orders
The claimants argue that the government lacks Article III standing because its alleged injury cannot be redressed.
The language of
1. International Comity
The claimants argue that the complaint should be dismissed on the basis of international comity. Claimants’ Mot. at 19. Because adjudicating this case might require the court to pass judgment over Equatorial Guinea‘s application of its own laws, the claimants maintain that the court should decline to hear this case.
International comity is a doctrine of deference based on respect for the decisions of foreign sovereigns. United States v. Kashamu, 656 F.3d 679, 683 (7th Cir. 2011) (Posner, J.); see Hilton v. Guyot, 159 U.S. 113, 164 (1895) (noting that comity is “the recognition which one nation allоws within its territory to the legislative, executive or judicial acts of another nation“). This doctrine provides that a U.S. court should give full effect to a foreign judgment that has been rendered with impartiality and due process. Hilton v. Guyot, 159 U.S. at 163, 202-03; Doe v. Exxon Mobil Corp., 654 F.3d 11, 64 (D.C. Cir. 2011). The purpose underlying the rule is to foster international cooperation and encourage reciprocal recognition of U.S. judgments in foreign courts. Oetjen v. Central Leather Co., 246 U.S. 297, 304 (1918) (“To permit the validity of the acts of one sovereign state to be reexamined and perhaps condemned by the courts of another would very certainly imperil the amicable relations between governments and vex the peace of nations.“); Laker Airways Ltd. v. Sabena, Belgian World Airlines, 731 F.2d 909, 937 (D.C. Cir. 1984) (stating that “the decisions of foreign tribunals should be given effect in domestic courts, since recognition fosters international cooperation and encourages reciprocity, thereby promoting predictability and stability through satisfaction of mutual expectations.“). Thus, the doctrine is accurately described as a “golden rule among nations—that each must give the respect to the laws, policies and interests of others that it would have others give to its own in the same or similar circumstances.” Mich. Community Servs., Inc. v. NLRB, 309 F.3d 348, 356 (6th Cir. 2002).8
The doctrine of comity has no single definition, as the doctrine “summarizes in a brief word a complex and elusive con-
cept.” Laker Airways, 731 F.2d at 937; see also United States v. Nippon Paper Indus. Co., 109 F.3d 1, 8 (1st Cir. 1997) (“Comity is more an aspiration than a fixed rule, more a matter of grace than a matter of obligation.“).9 A timeless characterization of the doctrine urges U.S. courts to recognize a foreign judgment if:
there has been opportunity for a full and fair trial abroad before a court of competent jurisdiction, conducting the trial upon regular proceedings, after due citation or voluntary appearance of the defendant, and under a system of jurisprudence likely to secure an impartial administration of justice between the citizens of its own country and those of other countries, and there is nothing to show either prejudice in the court, or in the system of laws under which it was sitting, or fraud in procuring the judgment.
Hilton v. Guyot, 159 U.S. 113, 202 (1895). If anything is clear, however, it is that the doctrine of international comity will not impede a judicial proceeding when no foreign judgment exists. A defendant invoking the doctrine of comity must either point to a valid legal proceeding to which the court must defer; or at the very lеast, the defendant must demonstrate that some alternate forum would be adequate. E.g., Doe v. Exxon Mobil Corp., 654 F.3d at 65 (“In order to invoke this doctrine, Exxon must either point to a legal proceeding in Indonesia involving these particular plaintiffs to which the court must defer or at least the availability of effective and non-futile local remedies.“); cf. Turner Entertainment Co. v. Degeto Film GmbH, 25 F.3d 1512, 1518-21 (11th Cir. 1994) (deferring to German litigation where a German court had reached judgment on merits of same issue).
A foreign state‘s statutory remedies may also warrant deference, provided that they provide plaintiffs with an adequate remedy. Compare Ungaro-Benages v. Dresdner Bank AG, 379 F.3d 1227, 1239 (11th Cir. 2004) (indicating that Germany had provided an adequate forum to compensate plaintiffs for Nazi-era crimes) and Bi v. Union Carbide Chems. & Plastics Co., 984 F.2d 582, 586 (2d Cir. 1993) (determining that India had provided an adequate and comprehensive statutory remedy to victims of the Union Carbide disaster) with Cruz v. United States, 387 F. Supp. 2d 1057, 1070 (N.D. Cal. 2005) (determining that the Mexican Congress‘s creation of a special commission to investigate the plaintiffs’ claims did not provide a sufficient basis for this Court to dismiss on comity grounds because the Mexican commission did not provide an adequate remedy). In addition, courts rarely abstain on the basis of comity if the court is not assured that foreign courts would accomplish the aim of the litigation. United States v. Lazarenko, 504 F. Supp. 2d 791, 802 (N.D. Cal. 2007) (“The Court also finds it inappropriate to disturb the criminal forfeiture based on comity principles. This Court has few assurances that proceedings in Antiguan courts would accomplish the aims of criminal forfeiture—punishment of Lazarenko by seizure of his assets associated with the criminal activity for which he was convicted.“).
Here, the claimants have not identified any foreign proceeding to which this court should lend its deference. Instead, the claimants note that Nguema “is a sit-ting
Two additional factors counsel against invoking the doctrine of comity here. First, the claimants believe that courts should decline to exercise its jurisdiction whenever a case touches upon the realm of foreign affairs. But it would be erroneous “to suppose that every case or controversy which touches foreign relations lies beyond judicial cognizance.” Baker v. Carr, 369 U.S. 186, 211 (1962). Thus, few cases view international comity as a doctrine of preemption that would require courts to decline jurisdiction merely because foreign affairs are at play. United States v. Portrait of Wally, A Painting By Egon Schiele, 2002 WL 553532, at *10 (S.D.N.Y. Apr. 12, 2002) (noting that “the principlе of comity does not operate as a pre-emption doctrine, barring this court from hearing a valid forfeiture action merely because there are foreign laws that might also apply“).
Second, dismissal would not be appropriate when doing so “would be contrary to the policies or prejudicial to the interests of the United States.” Pravin Banker Assocs., Ltd. v. Banco Popular Del Peru, 109 F.3d 850, 854 (2d Cir. 1997); see Allied Bank Int‘l v. Banco Credito Agricola de Cartago, 757 F.2d 516, 522 (2d Cir. 1985); Laker Airways, 731 F.2d at 937 (“No nation is under unremitting obligation to enforce foreign interests which are fundamentally prejudicial to those of the domestic forum.“). Thus, if the government viewed dismissal as necessary to protect its relationships with foreign countries, the doctrine would apply with greater force. Whiteman v. Dorotheum GmbH & Co. KG, 431 F.3d 57, 69-74 (2d Cir. 2005); Ungaro-Benages v. Dresdner Bank AG, 379 F.3d at 1237. But here, the government brings suit to enforce its anti-money laundering laws and to prevent the United States from being a haven for the proceeds of illegal activity committed abroad. United States v. All Assets Held At Julius Baer & Co., 571 F. Supp. 2d 1, 12 (D.D.C. 2008); United States v. Portrait of Wally, 2002 WL 553532, at *6 (noting that the United States “has a strong interest in enforcing its own laws as applied to conduct on its own soil.... United States courts will not yield in the name of comity if doing so conflicts with the law or policy of the United States“). Thus, the Executive Branch‘s decision to bring this case could be viewed as evidence of its judgment that the delicate balance of foreign affairs would not be disturbed by the lawsuit. United States v. Baker Hughes Inc., 731 F. Supp. 3, 6 n. 5 (D.D.C. 1990) (noting that it is “not the Court‘s role to second-guess the executive branch‘s judgment as to the proper role of comity concerns” when “the United States has decided to go ahead with the case“). Because the executive “has already done the balancing in deciding to bring the case in the first plaсe,” United States v. Brodie, 174 F. Supp. 2d 294, 306 (E.D. Pa. 2001), the
2. The Act of State Doctrine
The claimants also argue that the complaint should be dismissed due to the “act of state” doctrine. Claimants’ Mot. at 19. They maintain that the doctrine is “based on notions of sovereign respect and intergovernmental comity,” and that the court should be “reluctan[t] to complicate foreign affairs by validating or invalidating the actions of foreign sovereigns.”
The act of state doctrine precludes domestic courts from inquiring into the validity of the public acts that a recognized foreign sovereign power committed within its own territory. McKesson Corp. v. Islamic Republic of Iran, 539 F.3d 485, 491 (D.C. Cir. 2008); see Underhill v. Hernandez, 168 U.S. 250, 252 (1897) (“Every sovereign state is bound to respect the independence of every other sovereign state, and the courts of one country will not sit in judgment on the acts of the government of another done within its territory.“); see also RESTATEMENT (THIRD) OF THE FOREIGN RELATIONS LAW OF THE UNITED STATES § 443 (1987). The doctrine applies when the relief sought or the defense interposed would require a court in the United States to declare invalid the official act of a foreign sovereign performed within its boundaries. W.S. Kirkpatrick & Co. v. Envtl. Tectonics Corp., 493 U.S. 400, 405 (1990). The policies underlying the doctrine include international comity, respect for the sovereignty of foreign nations on their own territory, and the avoidance of embarrassment to the Exeсutive Branch in its conduct of foreign relations. World Wide Minerals, Ltd. v. Republic of Kazakhstan, 296 F.3d 1154, 1165 (D.C. Cir. 2002).
The doctrine is not a principle of abstention, however—that is to say, a defendant may not raise the act of state doctrine as a complete bar to suit whenever the case touches upon the realm of foreign affairs. W.S. Kirkpatrick, 493 U.S. at 409 (noting that “[t]he Act of State doctrine does not establish an exception for cases and controversies that may embarrass foreign governments“). Rather, it serves as “a rule of decision for the courts of this country,”
There are two reasons why the doctrine does not bar this lawsuit. First: the applicability of this doctrine is weakened when the Executive Branch of the United States is the party that brings suit. One of the major concerns underlying the act of state doctrine is “the strong sense of the judicial branch that its engagement in the task of passing on the validity of for-eign
Second: even if the doctrine applied, its invocation would be premature at this stage because several factual disputes exist. In particular, the party invoking the doctrine must establish that the act was an exercise of its sovereign power. See Alfred Dunhill of London, Inc. v. Republic of Cuba, 425 U.S. 682, 695 (1976); Republic of the Philippines v. Marcos, 862 F.2d 1355, 1369 (9th Cir. 1988) (for the doctrine to apply, “the acts in question must have involved public acts of the sovereign“); Callejo v. Bancomer, S.A., 764 F.2d 1101, 1115 n. 15 (5th Cir. 1985) (the doctrine only applies when the acts were “invested with the sovereign authority of the state.“). Aside from vague allegations that this lawsuit would “interfere with ... Equatorial Guinea‘s right to administer its domestic laws within its borders,” the claimants do not identify what acts, if any, werе taken on behalf of the sovereign. Claimants’ Mot. at 21. In fact, the claimants argue that Nguema purchased the jet with private funds obtained independently of his office. Thus, it is not clear whether any relevant acts were taken with the imprimatur of the Equatoguinean government. See Alfred Dunhill, 425 U.S. at 695 (requiring the party invoking the act of state doctrine to produce some “statute, decree, order, or resolution” to show that the government‘s act was vested with sovereign authority). Accordingly, the act of state doctrine poses no bar to this suit.
3. Equitable Estoppel
The claimants argue that the government should be equitably estopped from filing this suit because the claimants relied on a 2005 letter from the Department of Justice stating that it had no basis for believing that the purchase would violаte the federal anti-money laundering laws. Claimants’ Mot. at 22. The government responds that the doctrine of equitable estoppel only applies in sparing circumstances and is not warranted here. Govt.‘s Opp‘n at 16.
Estoppel is an equitable doctrine invoked to avoid injustice by precluding a litigant from asserting an otherwise
4. The Court Grants the Claimants’ Motion to Dismiss for Failure to State a Claim
a. Legal Standard for Failure to State a Forfeiture Claim
The pleading requirements in a civil forfeiture action are simultaneously governed by the Federal Rules of Civil Proсedure and the Supplemental Rules for Admiralty or Maritime Claims and Asset Forfeiture Actions.
Supplemental Rule E(2)(a) requires that the government set forth its claims “with such particularity that the defendant will be able, without moving for a more definite statement, to commence an investigation of the facts and to frame a responsive pleading.” Supplemental Rule G(2)(f) requires that the government “state sufficiently detailed facts to support a reasonable belief that the government will be able to meet its burden of proof at trial.” Read in conjunction, these rules require
The standards set forth in Supplemental Rules G and E impose a pleading that is somewhat more exacting than the liberal notice pleading standard contemplated by Rule 8(a)(2). See United States v. All Assets Held at Bank Julius Baer & Co., Ltd., 571 F. Supp. 2d 1, 16-17 (D.D.C. 2008) (“Rule G (and its predecessor Rule E(2)) creates a heightened burden for рleading on the plaintiff.“); cf.
At the pleading stage, it suffices for the government to simply allege enough facts so that the claimant may understand the theory of forfeiture, file a responsive pleading, and undertake an adequate investigation. Mondragon, 313 F.3d at 864; United States v. $22,173.00 in U.S. Currency, 2010 WL 1328953, at *2 (S.D.N.Y. Apr. 5, 2010). And a court may not dismiss the complaint “on the ground that the government did not have adequate evidence at the time the complaint was filed to establish the forfeitability of the property.” SUPP. R. G(8)(b)(ii);
A claimant in an in rem proceeding may move to dismiss in the same form provided by Rule 12(b). SUPP. R. G(8)(b)(i). As is the case under Rule 12(b), the plaintiff‘s factual allegations must be presumed true and should be liberally construed in his or her favor. United States v. Seventy-Nine Thousand Three Hundred Twenty-One Dollars, 522 F. Supp. 2d 64, 68 (D.D.C. 2007). Likewise, the plaintiff must be afforded every favorable inference that may be drawn from the allegations of fact set forth in the complaint.
b. The Government Fails to Allege that the Jet Is Derived From or Traceable to Illicit Activity
The government alleges that the Gulfstream Jet was purchased with funds that can be traced to or derived from illegal activity. The claimants counter that the complaint “merely states in a conclusory fashion that Minister Nguema and other members of the Equatoguinean government have amassed extraordinary wealth through ‘corrupt schemes’ and that because Minster Nguema‘s ‘level of spending is inconsistent with his salary as a Minis-ter,’
The government alleges that a group of Equatoguinean individuals—dubbed the Inner Circle—has amassed great wealth by siphoning funds from the public fisc. See Compl. ¶ 27. The government alleges that the Inner Circle committed a number of violations of Equatoguinean law, including “extortion and misappropriation, theft, and embezzlement of public funds.”
To illustrate: under the heading “Illegal Corrupt Schemes Used by Nguema and the Inner Circle to Enrich Themselves,” the government alleges that “members of the Inner Circle, such as Nguema, demand[ed] payments from companies doing business in E.G., in exchange for the performance of official acts.”
Many of the complaint‘s allegations do not even give rise to an inference of illegal activity. See, e.g.,
Other allegations make no mention of Nguema whatsoever. See
A recurring theme in the government‘s complaint is the allegation that Nguema‘s outlandish wealth raises suspicions about the lawfulness of his income.
The government itself has alleged that Nguema owns or controls a number of companies. Yet nothing is known about what income Nguema derives from them. Thus, without knowing what Nguema‘s means are, the court is hard-pressed to infer that he lives beyond them. Absent other details, the court cannot infer how Nguema‘s wealth may have been derived, nor from what sources, nor the legality of those sources. Although thе government alleges that Nguema lives far beyond his means, the court cannot leap to the conclusion that his largesse is evidence of criminal activity.
Faced with this complaint, the claimants would find it difficult to know where to begin their investigation, what individuals to interview, or what documents to review. Cf. Mondragon, 313 F.3d at 864. To be sure, the government paints a troubling picture of endemic corruption in Equatorial Guinea. But the government has done so with brushstrokes that are much too broad. The government cannot proceed by casting general allegations of lawlessness in the country in which the relevant transactions took place. United States v. $1,399,313.74 in U.S. Currency, 592 F. Supp. 2d 495, 499 (S.D.N.Y. 2008) (“The principal new allegation in support of the narcotics-trafficking theory is that many of the funds were sent from Latvia, which the Government asserts is a notorious money laundering haven. This does not raise the right to relief above a speculative level.“). Absent some specific indication that the Jet is derived from or traceable to illicit activity, the complaint must be dismissed.
IV. CONCLUSION
For the foregoing reasons, the court grants the defendants’ motion to dismiss. But the government is granted leave to amend the complaint. An order consistent with this memorandum opinion is separately and contemporaneously issued this 19th day of April, 2013.
UNITED STATES of America, Plaintiff, v. Christian Fernаndo BORDA, et al., Defendants.
Criminal Case No. 07-65 (GK)
United States District Court, District of Columbia.
April 22, 2013.