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Portman v. Andrews

April 17, 2006

CAREY PORTMAN, PLAINTIFF,
v.
EDMOND B. ANDREWS; ARTURO VALLARINO; CITIBANK N.A.; CITIGROUP CORP.; ANGEL SEVERINO DIAZ; AND REPUBLIC OF PANAMA, DEFENDANTS.



The opinion of the court was delivered by: Matthew F. Kennelly, District Judge

MEMORANDUM OPINION AND ORDER

The Republic of Panama, one of the defendants in this case, has moved to dismiss plaintiff Carey Portman's claims for lack of subject matter jurisdiction, improper service of process, and improper venue, and to strike Portman's jury demand as to the claims against Panama. For the reasons stated below, the Court dismisses Portman's claims against Panama for lack of proper venue.

Facts

Portman alleges that he entered into a written contract with Panama that he says he negotiated with "former First Vice President [Arturo] Vallarino and former Ambassador [Edward] Andrews." Compl. ¶¶ 20, 21. According to Portman, under the contract he was engaged to attempt to redeem a $4.68 billion Citibank "certificate of obligation" supposedly representing funds that the United States Central Intelligence Agency supposedly seized from Manuel Noriega, Panama's former president. Id. ¶¶ 14, 32, 34. Portman alleges that under the contract, he was to receive twelve percent of any funds recovered. Id. ¶ 22. Portman has sued Panama (as well as other defendants) for breaching the alleged agreement in various ways.

Id. ¶¶ 37-41.

The Court previously dismissed Portman's claims against Citibank, and in doing so we noted the apparent phoniness of the purported "certificate of obligation." See Order of Oct. 14, 2005 at 2. Panama has not, however, moved to dismiss Portman's claims on this basis. Rather, it argues that the Court lacks subject matter jurisdiction over Portman's claim; that it has not properly been served with process; and that this District is an improper venue for the suit.

Discussion

1. Subject Matter Jurisdiction

Because the Republic of Panama is a foreign state, under the Foreign Sovereign Immunities Act it is immune from suit in the courts of this country unless a specified exception to immunity exists. 28 U.S.C. § 1604; see Saudi Arabia v. Nelson, 507 U.S. 349, 355 (1993); Phoenix Consulting, Inc. v. Republic of Angola, 216 F.3d 36, 40 (D.C. Cir. 2000). Unless an exception exists, subject matter jurisdiction is lacking over the claim against the foreign state. See, e.g., Verlinden B.V. v. Central Bank of Nigeria, 461 U.S. 480, 488 (1983). One FSIA exception concerns actions based on commercial activities of the foreign state carried on in the United States or causing a direct effect in the United States. See 28 U.S.C. § 1605(a)(2).

"In accordance with the restrictive view of sovereign immunity reflected in the FSIA," the party claiming immunity has the burden of showing that the plaintiff's claims do not fall within a statutory exception. Phoenix Consulting, 216 F.3d at 40. A defendant that moves to dismiss on the ground that it is immune from suit under the FSIA may challenge either the legal sufficiency of the plaintiff's claims or their factual sufficiency. If, as in this case, the defendant challenges only the legal sufficiency of the claims, the court takes the plaintiff's factual allegations as true and determines whether those allegations are sufficient to bring the case within a statutory exception to immunity. Id. at 40 (citing cases).

Portman's allegations, if taken as true, are sufficient to bring the case within the FSIA's commercial activity exception to sovereign immunity. The exception applies when the plaintiff's claim is based on a foreign state's commercial activity that has substantial contact with the United States; commercial activity consists of "either a regular course of commercial conduct or a particular commercial transaction or act." 28 U.S.C. § 1603(d) & (e).

Portman's claim against Panama is based on his contention that Panama contracted with him to collect, in this country, a debt purportedly owed to Panama by an American bank. Taking this contention as true for purposes of the present inquiry, Panama's activity qualifies as commercial activity within the meaning of the FSIA. The FSIA's legislative history provides examples of what constitutes commercial activity: a "foreign government's sale of a service or product, its leasing of property, its borrowing of money, its employment or engagement of laborers, clerical staff or public relations or marketing agents or its investment in the security of an American corporation." H.R. Rep. No. 1487, 94th Cong., 2d Sess. 16, reprinted in 1976 U.S. Code Cong. & Admin. News 6604, 6615.*fn1 If borrowing money in this country constitutes commercial activity, then surely collecting on claim said to be owed to the foreign state by a United States bank falls in the same category. For this reason, the Court denies Panama's motion to dismiss for lack of subject matter jurisdiction.*fn2

2. Venue

Panama also argues that the case is improperly venued in this District. A particular subsection of the general venue statute governs suits against foreign states. See 28 U.S.C. § 1391(f). Two of the four subsections of § 1391(f) are not implicated in this case, as they concern specific types of claims that Portman has not brought. See id. § 1391(f)(2) & (3). The remaining subsections provide that a foreign state may be sued in any judicial district in which a substantial part of the events or omissions giving rise to the claim occurred, or a substantial part of the ...


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