Consulting Concepts Int'l, Inc. v. Kingdom of Saudi Arabia ( 2022 )

21-941-cv
Consulting Concepts Int’l, Inc., et al. v. Kingdom of Saudi Arabia, et al.
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
SUMMARY ORDER
RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY
ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF
APPELLATE PROCEDURE 32.1 AND THIS COURT=S LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER
IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN
ELECTRONIC DATABASE (WITH THE NOTATION ASUMMARY ORDER@). A PARTY CITING TO A SUMMARY
ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.
At a stated term of the United States Court of Appeals for the Second Circuit, held
at the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New York,
on the 22nd day of June, two thousand twenty-two.
PRESENT:
BARRINGTON D. PARKER,
JOSEPH F. BIANCO,
EUNICE C. LEE,
Circuit Judges.
_________________________________________
Consulting Concepts Int’l, Inc., Massimiliano
Pincione,
Plaintiffs-Appellants,
v. 21-941-cv
Kingdom of Saudi Arabia, Consumer Protection
Association, an Association/Agency of Kingdom
of Saudi Arabia,
Defendants-Appellees.
__________________________________________
FOR PLAINTIFFS-APPELLANTS: BRIAN J. ISAAC, Pollack, Pollack, Isaac & DeCicco,
LLP, New York, NY (Special and Appellate Counsel
to Antin Enrlich & Epstein, LLP, New York, NY, on
the brief).
FOR DEFENDANTS-APPELLEES: ALEXANDRA E. CHOPIN, (Mitchell R. Berger, Myung
Han Kim, on the brief), Squire Patton Boggs (US)
LLP, New York, NY.
Appeal from an order and judgment of the United States District Court for the Southern
District of New York (Hellerstein, J.).
UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED, AND
DECREED that the order and judgment of the district court are AFFIRMED.
Plaintiffs-Appellants Consulting Concepts International, Inc. (“CCI”) and its principal
Massimiliano Pincione appeal from an order and judgment of the district court dismissing their
breach of contract, account stated, quantum meruit, and unjust enrichment claims against
Defendants-Appellees Kingdom of Saudi Arabia (“Saudi Arabia”) and the Consumer Protection
Association of Saudi Arabia (“CPA”) for lack of subject matter jurisdiction under the Foreign
Sovereign Immunities Act (the “FSIA”), 28 U.S.C. § 1602, et seq., and forum non conveniens.
On appeal, Appellants argue that Saudi Arabia and its agency, the CPA, are not immune
from suit under the FSIA because they engaged in a commercial activity having a nexus with the
United States by entering into an agreement with CCI for the provision of certain consulting
services. Appellants also challenge the district court’s denial of jurisdictional discovery and
dismissal of their claims for forum non conveniens based on a finding that CCI’s agreement with
the CPA contains a mandatory forum selection clause requiring the parties to litigate any dispute
arising from the agreement in the United Kingdom.
We review a district court’s legal conclusions concerning a determination of foreign
sovereign immunity under the FSIA de novo and its factual findings for clear error. See
Beierwaltes v. L’Office Federale De La Culture De La Confederation Suisse, 999 F.3d 808, 817
(2d Cir. 2021). We assume the parties’ familiarity with the underlying facts and prior record of
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proceedings, to which we refer only as necessary to explain our decision to affirm for lack of
subject matter jurisdiction under the FSIA.
Pursuant to the FSIA, foreign states and their agencies or instrumentalities are
presumptively immune from suit in the United States unless one of several exceptions applies. See
28 U.S.C. §§ 1604, 1605; see also § 1603(a) (defining “foreign state” to include “an agency or
instrumentality of a foreign state”). If no exception applies, a court lacks subject matter
jurisdiction. See Kato v. Ishihara, 360 F.3d 106, 108 (2d Cir. 2004).
A foreign state may be subject to suit if it engages in a “commercial activity” with a nexus
to the United States. See 28 U.S.C. § 1605(a)(2). Under this exception, a foreign state is not
immune from claims based: “[1] upon a commercial activity carried on in the United States by
the foreign state; or [2] upon an act performed in the United States in connection with a commercial
activity of the foreign state elsewhere; or [3] upon an act outside the territory of the United States
in connection with a commercial activity of the foreign state elsewhere and that act causes a direct
effect in the United States.” Id. A foreign state’s “commercial activity” can take the form of
“either a regular course of commercial conduct or a particular commercial transaction or act.” Id.§ 1603(d). As set forth below, we agree with the district court that Appellants have failed to
demonstrate that the claims at issue fall within the commercial activity exception to the FSIA.
Under the first prong of the exception, Appellants argue that Saudi Arabia and the CPA,
though presumptively immune as foreign states, are subject to jurisdiction because they “carried
on” a commercial activity in the United States by retaining CCI, a New York company, which
performed most of the work under the agreement in New York. We disagree.
A commercial activity is “carried on” in the United States when the commercial activity
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has “substantial contact” with the United States. 28 U.S.C. § 1603(e). Although Congress has not
defined the “contours” of such contact, it requires “a tighter nexus than the ‘minimum contacts’
standard for due process.” See Pablo Star Ltd. v. Welsh Gov’t, 961 F.3d 555, 565 (2d Cir. 2020)
(internal citation omitted). For example, in Pablo Star, we found substantial contact where the
Welsh government distributed promotional materials for display and use in the United States as
part of its “The Welsh in America” campaign, and those materials were printed under contract with
New York companies. See id. at 565–66. In Everard, we found substantial contact where, among
other things, the Republic of Suriname “chose to deal with an American company,” “the contract
targeted the U.S. travel market,” and “many aspects of the contract were performed in New York.”
See Everard Findlay Consulting, LLC v. Republic of Suriname, 831 F. App’x 599, 601 (2d Cir.
2020) (summary order) (internal quotation marks and alterations omitted).
Here, unlike in Pablo Star or Everard, the commercial activity did not have substantial
contact with the United States. Although the CPA entered into an agreement with CCI, a New
York-based company, and CCI performed some of the work under the agreement in New York,
the services for which CCI was retained were aimed at Saudi Arabia, not the United States. Under
the agreement, CCI agreed to “assume the implementation and management of a progressive
pulmonary healthcare reform” in Saudi Arabia and devise a “marketing campaign” targeting the
Saudi public. Joint App’x at 83. In addition to the services being aimed at Saudi Arabia, the
execution of the contract and the decision not to pay also took place in Saudi Arabia, as Appellants
concede. Given these uncontroverted facts, and the lack of any substantial contacts with the United
States, the district court correctly concluded that the commercial activity did not satisfy the first
prong of the exception.
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Appellants contend, in the alternative, that Appellees’ negotiation, recruitment, and
retention of Appellants’ services constituted “act[s] performed in the United States” in connection
with the execution of the contract, which was commercial activity elsewhere, satisfying the
exception’s second prong. However, the relevant act here is the contract’s breach, not its
formation. See OBB Personenverkher AG v. Sachs, 577 U.S. 27, 35 (2015) (explaining that, in the
context of the commercial activity exception, “an action is ‘based upon’ the ‘particular conduct’
that constitutes the ‘gravamen’ of the claim”). It is undisputed that Appellees’ decision to not pay
occurred in Saudi Arabia, not in the United States. See Guirlando v. T.C. Ziraat Bankasi A.S., 602
F.3d 69, 76 (2d Cir. 2010)(“The decision by a foreign sovereign not to perform is itself an act, but
it is not an act in the United States; it is an act in the foreign state.”). Therefore, Appellees are not
subject to jurisdiction under the second prong of the commercial activity exception. See Rogers
v. Petroleo Brasileiro, S.A., 673 F.3d 131, 137 (2d Cir. 2012) (stating that “[a] threshold
requirement under the statute . . . is that the relevant act was performed in the United States”). 1
Finally, we find Appellants’ challenge to the district court’s denial of jurisdictional
discovery to be unpersuasive. We review a district court’s decision to deny jurisdictional
discovery under the FSIA “only for abuse of discretion, mindful that a district court has wide
latitude to determine the scope of discovery.” See Beierwaltes, 999 F.3d at 817 (internal quotation
1
Appellants also argue, for the first time on appeal, that the CPA and Saudi Arabia are subject to
jurisdiction under the third prong of the commercial activity exception. Appellants assert that Appellees’
failure to pay under the agreement constituted “an act outside . . . the United States” that caused “a direct
effect in the United States” because CCI expected to be paid in New York. See 28 U.S.C. § 1605(a)(2).
However, because Appellants have failed to raise this argument before the district court, they have waived
it on appeal. See Westinghouse Credit Corp. v. D’Urso, 371 F.3d 96, 103 (2d Cir. 2004) (“In general we
refrain from passing on issues not raised below.”); Singleton v. Wulff, 428 U.S. 106, 120–21 (1976)
(recognizing that a court of appeals will not consider an issue raised for the first time on appeal).
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marks omitted). “Because the purpose of sovereign immunity is to protect foreign nations not only
from liability but also from the expense, intrusiveness, and hassle of litigation, a court must be
circumspect in allowing discovery before the plaintiff has established that
the court has jurisdiction over a foreign sovereign defendant under the FSIA.” Id. at 828 (internal
quotation marks omitted). Here, Appellants failed to articulate how any additional discovery could
establish jurisdiction, especially given that the dispositive facts on the jurisdictional issue
(discussed above) were undisputed. Thus, the district court did not abuse its discretion in denying
such discovery. See id. at 828 (stating that a court “does not abuse its discretion in denying
jurisdictional discovery if the party seeking discovery cannot articulate a reasonable basis for the
court first to assume jurisdiction” (internal citation omitted)).
In sum, we conclude that Appellants have failed to establish an exception to the FSIA and,
thus, that there is no subject matter jurisdiction over the claims in this case. Accordingly, the
district court properly dismissed the case on that ground. 2
* * *
We have considered Appellants’ remaining arguments and find them to be without merit.
Accordingly, we AFFIRM the judgment of the district court.
FOR THE COURT:
Catherine O’Hagan Wolfe, Clerk of Court
2
Because we conclude that jurisdiction is lacking under the FSIA, we need not (and do not) review the
district court’s decision to dismiss the case alternatively for forum non conveniens.
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