Dentons US LLP v. Republic of Guinea ( 2019 )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
DENTONS US LLP,
Plaintiff,
v. Civil Action No. 14-1312 (RDM)
THE REPUBLIC OF GUINEA, et al.,
Defendants.
THE REPUBLIC OF GUINEA, et al.,
Counterclaimants and Third-
Party Plaintiffs,
v.
DENTONS US LLP, et al.,
Counterclaimants and Third-
Party Defendants.
MEMORANDUM OPINION AND ORDER
This is an action against the Republic of Guinea and its Ministry of Mines and Geology
(collectively “Guinea”) for fees and costs that Dentons US LLP (“Dentons”) claims it is owed
for work it performed for Guinea on a large natural resources development project. Shortly after
the complaint was served, Guinea moved to dismiss on the ground that it is immune from suit
under the Foreign Sovereign Immunities Act (“FSIA”), 28 U.S.C. § 1602 et seq. Guinea argued,
among other things, that Dentons could not invoke the commercial activity exception to the
FSIA because this lawsuit, as Guinea conceived it, is based on Dentons’s advice to the Guinean
“government on how to exercise its sovereign authority over national assets” and is not based on
an ordinary commercial transaction. Dkt. 15-1 at 11–12 (discussing 28 U.S.C. § 1603(d)). The
Court was unconvinced and held that (1) the activity on which the suit is based—contracting for
legal services—is the type of “activity in which private parties regularly engage” and (2) the suit
is therefore subject to the FSIA’s commercial activity exception. Dentons U.S. LLP v. Republic
of Guinea, 134 F. Supp. 3d 5, 9 (D.D.C. 2015) (“Dentons I”). After the Court denied Guinea’s
motion to dismiss, Guinea answered the complaint, counterclaimed against Dentons, and filed
third-party claims against various Dentons affiliates. Dentons and its affiliates, in turn, moved to
dismiss Guinea’s counter- and third-party claims, and the Court granted in part and denied in part
that motion. Dentons US LLP v. Republic of Guinea, 208 F. Supp. 3d 330, 347 (D.D.C. 2016)
(Dentons II).
The case is now before the Court on Guinea’s motion for summary judgment. Dkt. 84.
In this motion, Guinea again asserts that it is immune from suit under the FSIA, but on a
different theory. This time, Guinea argues that its Minister of Mines and Geology (“Minister of
Mines”), who signed the engagement letters that Dentons relies upon, did not have authority to
bind Guinea because the Guinean public procurement law vests the Minster of Finance with
exclusive authority to approve public contracts. According to Guinea, the engagement letters are
therefore invalid and, as a result, cannot support application of the commercial activity exception
to the FSIA. In other words, to the extent the Court previously held that an action to enforce a
contract for legal services is based upon the commercial activity of private contracting, that
theory of jurisdiction must fall away if the contracts at issue were invalid from the outset.
Guinea further argues, in the alternative, that it is entitled to summary judgment on the merits
because the engagement letters are unenforceable for the same reason.
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As explained below, the Court concludes that Guinea has failed to carry its burden of
demonstrating that it is immune from suit or that, based on the undisputed material facts, the
engagement letters are unenforceable. The Court will, accordingly, DENY Guinea’s motion for
summary judgment. Guinea remains free, however, to renew either argument at a later stage of
the proceeding.
I. BACKGROUND
Except as otherwise noted, the following facts are either undisputed or established by
uncontroverted evidence. See Okpara v. District of Columbia, 174 F. Supp. 3d 6, 11 (D.D.C.
2016) (“Summary judgment is appropriately granted ‘if the movant shows that there is no
genuine dispute as to any material fact and the movant is entitled to judgment as a matter of
law.’”) (quoting Fed. R. Civ. P. 56(a)). Where necessary and appropriate, however, the Court
will make findings of fact relating to Guinea’s assertion of sovereign immunity. See Phoenix
Consulting, Inc. v. Republic of Angola, 216 F.3d 36, 40 (D.C. Cir. 2000) (“When the defendant
has . . . challenged the factual basis of the court’s jurisdiction, . . . the court must . . . resolve any
[relevant] disputed issues of fact”).
A. Factual Background
In an effort to develop extensive iron ore deposits discovered in the Simandou region of
Guinea, the Republic of Guinea and its Ministry of Mines instituted the “Simandou Project” with
the sponsorship of several investors and the World Bank. Dkt. 60 at 5 (Answer to Countercl. ¶
15). In May 2012, the World Bank awarded a short-term contract to a consulting firm, which
assembled a group of financial, technical, and legal advisors to assist Guinea with the project.
Dkt. 94-3 at 23–24 (Dentons SMF ¶ 37); Dkt. 99-2 at 17 (Guinea Resp. ¶ 37); see also Dkt. 1-2
at 1 (First Retainer Agreement). Dentons served as the legal advisor within this advisory group.
Dkt. 94-3 at 24 (Dentons SMF ¶ 37); Dkt. 99-2 at 17 (Guinea Resp. ¶ 37).
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While members of the Dentons team were in Guinea for meetings in August 2012, senior
Guinean officials indicated that they wanted directly to engage Dentons as Guinea’s legal
counsel on the Simandou Project. Dkt. 94-3 at 28–29 (Dentons SMF ¶ 53); Dkt. 99-2 at 18
(Guinea Resp. ¶ 53). On August 25, 2012, Guinea’s Minister of Mines, Lamine Fofana,
executed the first of two retainer agreements with Dentons. Dkt. 94-3 at 28–29 (Dentons SMF ¶
53); Dkt. 99-2 at 18 (Guinea Resp. ¶ 53). That agreement “confirm[ed] the appointment by the
Republic of Guinea’s Ministry of Mines . . . of” Dentons “as its Legal Counsel” as of May 2,
2012. Dkt. 1-2 at 1 (First Retainer Agreement); Dkt. 94-3 at 8 (Dentons SMF ¶ 11). Under the
agreement, “[a]ll billing related to the activities related to the assignment . . . w[ould] be
performed in accordance with the World Bank Agreement and, insofar as it would not be
handled by the World Bank, w[ould] be subject to, and in line with, the financial arrangements
that w[ould] be agreed upon between [Dentons] and the Ministry.” Dkt. 1-2 at 3 (First Retainer
Agreement). The agreement specified that the “appointment” would continue until September
30, 2012. Id. at 1. The agreement recognized, however, that Dentons might continue to provide
legal services to Guinea (or the Ministry of Mines and Geology) after the World Bank contract
expired in September 2012, and Dentons, in fact, did so. Id.; Dkt. 94-3 at 9 (Dentons SMF ¶ 12).
During a visit to Guinea by members of the Dentons team in December 2012, the parties
once again discussed the terms of Dentons’s engagement, leading to the execution of the second
retainer agreement. Dkt. 94-3 at 34 (Dentons SMF ¶ 72); Dkt. 99-2 at 19-20 (Guinea Resp. ¶
72). The second retainer agreement, which was signed by Minster Fofana and Dentons partner
Jonathan Cahn, covered Dentons’s work following the expiration of the World Bank contract and
into the future. See Dkt. 85-6. The agreement “confirm[ed] the agreement of the Minister of
Mines and Geology . . . to engage . . . [Dentons] . . . and its affiliates . . . to provide services . . .
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as Legal Advisor to the Ministry and to the Government of the Republic of Guinea in relation
with the development and financing of the Simandou iron ore mining project.” Id. at 1. With
respect to compensation, the agreement specified the hourly rates of the Dentons lawyers
working on the project and provided that the firm’s “costs and fees are due upon receipt of [the
firm’s] invoice.” Id. at 5. In the very next sentence, however, Dentons “confirm[ed] its intention
to defer payment” because “neither the Ministry nor the Government of the Republic of Guinea”
had “the necessary funds to pay for . . . the representation” at that time.” Id. The Ministry of
Mines and Geology agreed to “implement in good faith all efforts necessary to secure funding
for this representation, either through the Ministry’s budget or through external funding,” and,
“as long as the Ministry [of Mines] continue[d] to make these efforts,” Dentons agreed to “defer
collection of fees and expenses billed . . . until the appropriate financing is in place.” Id.
Finally, the agreement “authorize[d] [Dentons] to seek” financing from third parties to cover its
costs and fees and “to present [any such] options in the form of a written proposal to the Ministry
for its consideration,” and the Ministry of Mines agreed to “consider the proposals, in good faith,
subject” to the Ministry’s “right to ensure that” the financing was consistent with the firm’s
ethical duties of loyalty and independence. Id.
The parties disagree about whether, and to what extent, senior Guinean officials outside
the Ministry of Mines and Geology knew about and approved this agreement. According to
Kerfalla Yansane, who served as the Guinean Minister of Finance at the time, the December
2012 engagement letter “was never brought to [his] attention[,] and [he] never approved it in
[his] capacity as Guinean Minster of Finance.” Dkt. 84-10 at 3 (Yansane Aff. ¶ 11). Dentons
partner Jonathan Cahn, in contrast, attests that the letter was signed “with the approval of
[Guinean] President Condé,” Dkt. 95-4 at 21–22 (Cahn Decl. ¶¶ 50–51); that Minister Yansane
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knew that Dentons had expressed a need for a letter of engagement and payment, id. at 38 (Cahn
Decl. ¶ 92); and that “it was quite clear” to Cahn, “based on [an] exchange that” he witnessed
between Ministers Yansane and Fofana, that Minister Yansane “had been consulted prior to . . .
Minister . . . Fofana’s entering into [the December 2012] letter of engagement,” id. at 44–45
(Cahn Decl. ¶ 112). Guinea does not offer any evidence controverting Cahn’s assertion that the
agreement was signed with President Condé’s approval but, rather, argues that Cahn’s testimony
is inadmissible—presumably, as hearsay—and immaterial. Dkt. 99-2 at 20 (Guinea Resp. ¶ 74).
In its statement of material facts in dispute, Dentons catalogues the extensive legal
services that it provided to Guinea after the World Bank contract expired, and, although Guinea
challenges the materiality of these facts, it does not (at least for present purposes) dispute that
Dentons provided these services. The firm’s lawyers, for example, helped prepare Guinea for
negotiations with project sponsors in Paris in December 2012, Dkt. 94-3 at 32 (Dentons SMF ¶
63); Dkt. 99-2 at 19 (Guinea Resp. ¶ 63); traveled to Conakry, Guinea from November 27
through December 5, 2012, “to conduct intensive strategy and training sessions with Government
officials, including from the Ministry of Finance, to solidify Guinea’s negotiating positions,”
Dkt. 94-3 at 32 (Dentons SMF ¶ 64); Dkt. 99-2 at 19 (Guinea Resp. ¶ 64); traveled to Paris to
provide “support to Guinea during” the negotiations, Dkt. 94-3 at 33 (Dentons SMF ¶ 66); Dkt.
99-2 at 19 (Guinea Resp. ¶ 66); “returned to Conakry . . . to understand and finalize Guinea’s
position regarding certain of the Investment Framework Agreements” and met with “Guinea’s
infrastructure and mining teams to address key remaining questions” regarding those agreements,
Dkt. 94-3 at 33 (Dentons SMF ¶¶ 69–70); Dkt. 99-2 at 19 (Guinea Resp. ¶¶ 69–70); “prepare[d]
a ‘teaser’ to interest investors in the prospect of financing the Project,” Dkt. 94-3 at 34 (Dentons
SMF ¶ 71); Dkt. 99-2 at 19 (Guinea Resp. ¶ 71); “delivered revised drafts of the two Investment
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Framework Agreements to Guinea,” Dkt. 94-3 at 36 (Dentons SMF ¶ 77); Dkt. 99-2 at 20
(Guinea Resp. ¶ 77); returned to Conakry “to review the draft Investment Framework
Agreements in preparation for” continued negotiations in January 2013, Dkt. 94-3 at 36 (Dentons
SMF ¶ 78); Dkt. 99-2 at 20 (Guinea Resp. ¶ 78); attended further negotiations in Paris in January
2013 and “drafted and delivered to the Government various deal summaries,” Dkt. 94-3 at 36
(Dentons SMF ¶ 79); Dkt. 99-2 at 20 (Guinea Resp. ¶ 79); returned to Paris later that month “to
conduct meetings with Government officials to revise and refine the Infrastructure Framework
Agreements” and “continued to revise and refine the drafts in accordance with the Government’s
instructions,” Dkt. 94-3 at 37 (Dentons SMF ¶ 81); Dkt. 99-2 at 20 (Guinea Resp. ¶ 81);
provided communications and tax advice, Dkt. 94-3 at 38 (Dentons SMF ¶¶ 84–85); Dkt. 99-2 at
21 (Guinea Resp. ¶¶ 84–85); delivered draft agreements to Rio Tinto, a mining company with
which Guinea negotiated repeatedly in planning the Simandou Project, in April 2013, Dkt. 94-3
at 44 (Dentons SMF ¶ 106); Dkt. 99-2 at 23 (Guinea Resp. ¶ 106); “traveled to Abu Dhabi at
Guinea’s request, where they met with Minsters Yansane and Fofana” and to “defend the draft
agreements” in in meetings with the project’s sponsors, Dkt. 94-3 at 44–45 (Dentons SMF ¶¶
108–10); Dkt. 99-2 at 23 (Guinea Resp. ¶ 108–10); “traveled to Conakry in April 2013 to start
preparing the Guinean delegation,” including representatives from the Ministries of Mines and
Geology and Finance, “that would attend” future negotiations, Dkt. 94-3 at 46 (Dentons SMF ¶¶
112–13); Dkt. 99-2 at 23 (Guinea Resp. ¶ 112–13); met with Guinean officials in France in May
2013, “delivered hundreds of pages of briefing materials to Guinea for preparation,” and
“continued to develop the evolving negotiation strategy . . . and a strategic communications plan
for Guinea,” Dkt. 94-3 at 47 (Dentons SMF ¶ 116); Dkt. 99-2 at 24 (Guinea Resp. ¶ 116); met
with Guinean officials in Conakry in June 2013 to prepare “for the next round of meetings
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scheduled for June 16–18 in Paris” and then “traveled to Paris . . . to continue providing legal
advice and support” for the negotiations, Dkt. 94-3 at 49–50 (Dentons SMF ¶¶ 120–21, 127);
Dkt. 99-2 at 24–25 (Guinea Resp. ¶¶ 120–21, 127); and “delivered legal advice and work
product to Guinea in July 2013,” Dkt. 94-3 at 51 (Dentons SMF ¶ 128); Dkt. 99-2 at 25 (Guinea
Resp. ¶ 128).
Dentons also contends, and Guinea does not dispute, that the Ministry of Finance—and
Minster Yansane, in particular—were aware of many of the services that the law firm provided
and that, on several occasions, Minister Yansane requested and accepted Dentons’s services.
Minister Yansane, for example, requested that Dentons prepare him and Minister Fofana for a
December 8, 2012 meeting with Rio Tinto, Dkt. 94-3 at 33 (Dentons SMF ¶¶ 67–68); Dkt. 99-2
at 19 (Guinea Resp. ¶¶ 67–68); Minister Yansane attended the January 2013 meetings in Paris
with members of the Dentons team, where he accepted “legal services” from Dentons “without
objection,” Dkt. 94-3 at 36–37 (Dentons SMF ¶¶ 79, 81); Dkt. 99-2 at 20 (Guinea Resp. ¶¶ 79,
81); Dentons delivered a “report on the tax implications of Rio Tinto’s proposal” to Minister
Yansane in March 2013, Dkt. 94-3 at 39, 45 (Dentons SMF ¶¶ 85–86, 109); Dkt. 99-2 at 21, 23
(Guinea Resp. ¶¶ 85–86, 109); Minister Yansane was “aware that Dentons . . . helped prepare,
draft, edit and deliver various drafts of the Investment Framework to Rio Tinto” and did not
object, Dkt. 94-3 at 44 (Dentons SMF ¶ 107); Dkt. 99-2 at 23 (Guinea Resp. ¶ 107); Minister
Yansane “participated in and/or agreed with” the decision that Dentons “help [Guinea] prepare
for [certain] meetings, to provide behind-the-scenes assistance during the meetings, and to
provide counsel in other areas,” Dkt. 94-3 at 45 (Dentons SMF ¶ 111); Dkt. 99-2 at 23 (Guinea
Resp. ¶ 111); Dentons attended other meetings to provide support to the Ministry of Finance and
others, e.g., Dkt. 94-3 at 50–51 (Dentons SMF ¶ 127); Dkt. 99-2 at 25 (Guinea Resp. ¶ 127); and
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Minister Yansane requested substantive work product from Dentons as late as August 2013, Dkt.
94-3 at 55 (Dentons SMF ¶ 145); Dkt. 99-2 at 27 (Guinea Resp. ¶ 145). At least for present
purposes, moreover, Guinea does not dispute that this work was performed for and accepted by
the government of Guinea, and not simply the Ministry of Mines. Dkt. 99-2 at 7 (“Whether
Plaintiff provided service to Guinea, as opposed to the Ministry of Mines alone, is undisputed for
purposes of this motion . . . .”). Minister Yansane testified, however, that he assumed that the
services were provided on a pro bono basis. Dkt. 99-1 at 5 (Yansane Dep. at 37).
On March 25, 2012, Minister Fofana wrote to Jonathan Cahn, “confirm[ing] that the
Republic of Guinea, as client, is prepared to perform all of its contractual obligations contained
in the agreement between [Dentons] and the Ministry of Mines.” Dkt. 95-5 at 253. The letter
further explained that Guinea anticipated that Rio Tinto would pay Denton’s fees. Id. If Rio
Tinto failed to do so, however, the letter represented that “the Guinean State” would pay the fees,
“which, as with the other fees shall be integrated into the costs of the Simandou Project.” Id.
Finally, the letter stressed “the urgency of the delivery of the documents” that Dentons was
drafting on Guinea’s behalf “and the pressing need to respect all delivery timetables agreed to for
the required documents, many of which are on the critical path to completion of the project.” Id.
Several days later, on March 29, 2013, $2 million was wired to Dentons from the Central
Bank of Guinea. Dkt. 94-3 at 40 (Dentons SMF ¶ 90). Although Guinea questions the
sufficiency of Dentons’s evidence regarding this transfer, Dkt. 99-2 at 21 (Guinea Resp. ¶ 90)
(“[t]he cited materials are self-serving conclusory statements [that] do not create genuine issues
of material fact”), Dentons has supplied the Court with a copy of the wire transfer, which shows
that the transfer was made from Banque Centrale De La Republique de Guinee to Dentons’s
account at Citibank in New York and that the “ordering customer” was the “Ministry of Mines
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and Geology of Guinea,” Dkt. 95-5 at 256–57. The source and circumstances of the $2 million
payment remain a bone of contention.
Dentons maintains that the payment was made with the authorization of the Minster of
Finance. For support, it points to the testimony of Saadou Nimaga, who “served as assistant
legal counsel to the Ministry of Finance from 1998–2008,” Dkt. 94-3 at 40–41 (Dentons SMF ¶¶
93–94), and “legal counsel to the [M]inistry of [M]ines” between 2008 and 2016, Dkt. 95-3 at 75
(Nimaga Dep. at 13). Nimaga testified that, so far as he knows, it is the Minister of Finance—
and not the President or the Minister of Mines—that approves payments from the Central Bank.
Id. According to Jonathan Cahn, moreover, Abdoulaye Magassouba, an advisor to the President
of Guinea, informed him that Minister of Mines Fofana requested that the President “intervene
and ensure [that] the payment was made,” and “[t]he President then directed Minister of Finance
Yansane to coordinate with the Central Bank to make the payment.” Id. at 41 (Dentons SMF ¶
95). Cahn further attests that “[s]everal months later” Minister Yansane “acknowledged that he
was involved in, and aware of, the $2 million payment” and, indeed, complained “that he had
been ‘woken up in the middle of the night to approve the payment’ in March 2013.” Id. (quoting
Dkt 93-4 at 30 (Cahn Decl. ¶ 72)). A contemporaneous email from Magassouba to Cahn,
moreover, reports that the Central Bank was completing the paperwork to effectuate the wire
transfer; requests that Dentons send an email “confirming” its “commitment and the completion
of the draft version of remaining documents by tomorrow;” and explains that “we need to
provide it to the [G]overnor [of the Central Bank] and the Ministry of Finance.” Dkt. 95-5 at
260. Magassouba explained at his deposition that “the exchange was about” Dentons delivering
the work product in return for the payment and that Dentons’s “commitment” needed “to go to
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the Ministry of Finance” because it was “part of the process” for Dentons to receive payment.
Dkt. 94-5 at 35–36 (Magassouba Dep. at 73–74).
Guinea raises a host of arguments in response. First, in its answer to the complaint,
Guinea admitted that it paid Dentons an “‘advance’ of $2,000,000 . . . in response to demands by
. . . [Dentons] and its affiliates,” but did so “on the understanding that the advance would be
repaid once [Dentons] received the funds from another source.” Dkt. 25 at 14 (Answer ¶ 42); see
also id. at 30 (Countercl. ¶ 44) (“Guinea advanced $2 million to [Dentons] with the
understanding that [Dentons] would secure those funds from another source and repay Guinea.”);
Dkt. 99-1 at 18 (Yansane Dep. at 84). In its reply brief, Guinea now asserts that “the $2 million
payment received by Dentons was made by a third party and not by the Government of Guinea.”
Dkt. 99 at 17. Minister Yansane, for his part, testified that he did not participate in any
discussion about making the payment to Dentons; he did not learn about the payment until after
it was made; he had not seen the payment document until being shown it at his deposition, and,
to this day, he does not know who authorized the payment. Dkt. 99-1 at 11–15 (Yansane Dep.
77–81). He did acknowledge, however, that the payment was made from Guinea and that the
Ministry of Mines lacked authority to direct that the Central Bank make the payment. Id. at 14–
17 (Yansane Dep. at 80–83). Finally, Guinea disputes Dentons’s characterization of the Nimaga
and Magassouba testimony and argues that the Court should disregard Cahn’s account of various
statements made by Guinean officials in August 2013 on the ground that those statements were
made in the context of settlement discussions and they are thus inadmissible under Federal Rule
of Evidence 408. Dkt. 99 at 17–19 & n.10.
B. Guinean Law Relating to Government Contracts
The parties also disagree about the governing public procurement laws applicable to the
contracts. According to Guinea, its procurement laws require a competitive bidding or tender
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process in most circumstances involving the provision of “goods or services in exchange for
payment of a price,” Dkt. 84-12 at 1–2 (Law L/2012/No. 020/CNT (Oct. 11, 2012), Title I, Art.
1), and require that “[a]ny other method of procurement . . . must be authorized by the Finance
Minister,” Dkt. 84-10 at 3 (Yansane Aff. ¶¶ 5–7) (quoting Dkt. 84-12 at 2 (Law L/2012/No.
20/CNT (Oct. 11, 2012), Title III, Article 11(1)). “In certain exceptional circumstances,” a
procurement contract may be awarded without “a call for tenders,” but only with the Minister of
Finance’s “prior consent.” Id. ¶ 8. But even when a contract is awarded in this manner—
referred to as a “restricted” or “special consultation”—procurement contracts “must be
authorized in advance by the Minister of Finance.” Dkt. 84-12 at 3 (Decree
D/2012/128/PRG/SGG (Dec. 3, 2012), Art. 38); see also Dkt. 84-10 at 3 (Yansane Aff. ¶ 8).
Contracts that do not comply with either set of procedures, according to Guinea, are “null and
void.” Dkt. 84-10 at 3 (Yansane Aff. ¶ 9) (quoting Decree D/2012/128/PRG/SGG (Dec. 3,
2012), Art. 74). Finally, Guinea asserts that Minister Yansane never approved the Dentons
retainer agreement, and thus it “does not constitute a valid or binding contract” under Guinean
law. Id. at ¶ 12.
Dentons does not dispute that the Minister of Finance must authorize public procurement
contracts but, instead, argues that the second retainer agreement is not a “public procurement
contract[]” or “public service delegation[].” Dkt. 94-2 at 22. For support, Dentons proffers the
report of Dr. Amara Soumah, who is a member of the bar of Guinea and whose legal practice
“focuses on commercial disputes in Guinea and other West African countries.” Dkt. 95-11 at 2.
Dr. Soumah asserts that the public procurement law applies to situations in which the
government contracts for projects, such as, for example, “toll highway construction,” “airport
construction,” or “exploration of an offshore oil block,” and that the procurement law “is
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inapplicable . . . to instances where Guinea enters the private market to secure services from a
private entity.” Id. at 3. In a situation where Guinea is contracting with a law firm, Soumah
opines, “there is no specific rule” and “[e]ach ministry . . . has certain inherent authority based
on its semi-autonomy.” Id. at 3–4. Dentons also relies on the deposition of the current Minister
of Mines, Abdoulaye Magassouba, who testified that he “ha[s] the authority” to “enter into
contracts with mining companies” and “external advisers” unless the “commitment[] . . . go[es]
beyond the Ministry’s mandates.” Dkt. 95-3 at 45 (Magassouba Dep. at 140–41). Finally,
Dentons points to a contract between Guinea and another law firm, Jones Day, which was signed
by Minister of Mines Magassouba, and not by the Minister of Finance. Dkt. 94-2 at 22. Guinea,
for its part, does not disavow the Jones Day contract but, rather, posits that the Minister of
Finance’s authorization was not required because the law firm’s fees were paid by an outside
grant, and “no funds were paid out of the Guinea[n] government budget.” Dkt. 95-3 at 5–6.
C. Procedural History
Dentons commenced this action in August 2014 seeking payment pursuant to the first and
second retainer agreements on unpaid invoices from May 2012 to June 2013. See Dkt. 1 at 1–3,
6–15 (Compl. ¶¶ 2–7, 19–59). In response, Guinea moved to dismiss on grounds of foreign
sovereign immunity, forum non conveniens, and failure to state a claim. See Dkt. 15 at 1–2. The
Court denied that motion in all respects. Of particular relevance here, the Court held that Guinea
is not immune from suit under the FSIA because (1) the activity of contracting for legal services
in support of a project to “fund[] and develop[] a mine . . . ‘constitutes “‘commercial activity”’”
within the meaning of the commercial activity exception to the FSIA, and (2) “the activities
involved in the . . . case include performance of services in” the United States “as well as
payment to be made to [Dentons’s] U.S. bank.” Dentons I, 134 F. Supp. 3d at 8–9 (first quote
quoting Lanny J. Davis & Assocs. LLC v. Republic of Equatorial Guinea, 862 F. Supp. 2d 152,
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159 (D.D.C. 2013)). After the Court denied Guinea’s motion to dismiss, Guinea answered the
complaint, filed counterclaims against Dentons, and filed third-party claims against various
Dentons affiliates, seeking, among other relief, recoupment of the $2 million “advance” it paid to
Dentons in August 2013. Dkt. 25 at 30–31. Dentons and its affiliates, in turn, moved to dismiss
Guinea’s counter- and third-party claims, Dkt. 39; 40, and the Court granted in part and denied in
part those motions, Dentons II, 208 F. Supp. 3d at 341, 344.
Guinea now moves for summary judgment. See Dkt. 84. In this round of briefing,
Guinea argues that (1) it is entitled to sovereign immunity because the Minister of Mines did not
have the authority to bind Guinea, and therefore, the commercial activity exception to the FSIA
does not apply; and (2) even if Guinea is not immune from suit, it is entitled to summary
judgment on Dentons’s breach of contract claim because the Minister of Mines lacked the
authority to bind Guinea. In February 2019, the Court directed that the parties submit
supplemental briefs, and declarations if necessary, addressing Guinea’s contention that the Court
should disregard certain evidence cited by Dentons because the discussions at issue “allegedly
occurred ‘during compromise negotiations’ subject to” Federal Rule of Evidence 408. Minute
Orders (Feb. 5 & 6, 2019).
II. ANALYSIS
The Court begins, as it must, by examining its jurisdiction to consider Dentons’s claims.
See Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83, 94 (1998); Foremost-McKesson, Inc. v.
Islamic Republic of Iran, 905 F.2d 438, 449 (D.C. Cir. 1990) (court must resolve jurisdiction
under the FSIA at the outset). The Court then turns, briefly, to Guinea’s motion for summary
judgment on the merits.
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A. Sovereign Immunity
The exclusive “basis for obtaining jurisdiction over a foreign state in our courts” is set
forth in the FSIA. Argentine Republic v. Amerada Hess Shipping Corp., 488 U.S. 428, 434
(1989); see 28 U.S.C. §§ 1604, 1330(a). Under the FSIA, “a foreign state is presumptively
immune from the jurisdiction of United States courts; unless a specified exception applies, a
federal court lacks subject-matter jurisdiction over a claim against a foreign state.” Saudi Arabia
v. Nelson, 507 U.S. 349, 355 (1993). “If no exception applies, a foreign sovereign’s immunity
under the FSIA is complete: The district court lacks subject matter jurisdiction over the
plaintiff’s case.” Phoenix Consulting, 216 F.3d at 39. If the sovereign is immune from suit, the
sovereign has “an immunity from trial and the attendant burdens of litigation, and not just a
defense to liability on the merits.” Id. (quoting Foremost–McKesson, 905 F.2d at 443).
The only exception invoked in this case is the “commercial activity” exception, which
provides in relevant part:
A foreign state shall not be immune from the jurisdiction of courts of the United
States . . . in any case . . . in which the action is 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.
28 U.S.C. § 1605(a). The FSIA defines commercial activity as “either a regular course of
commercial conduct or a particular commercial transaction or act.” 28 U.S.C. § 1603(d).
Because the FSIA “largely codifies the so-called ‘restrictive’ theory of foreign sovereign
immunity first endorsed by the State Department in 1952,” the Supreme Court has interpreted the
commercial activity exception in a manner consistent with the restrictive theory, which permitted
suits in U.S. “courts in cases ‘arising out of purely commercial transactions.’” Republic of
15
Argentina v. Weltover, Inc., 504 U.S. 607, 612–13 (1992) (second quote quoting Alfred Dunhill
of London, Inc. v. Republic of Cuba, 425 U.S. 682, 703 (1976) (plurality op.)). Under this
approach, “foreign sovereign immunity [does] not bar a suit based upon a foreign state’s
participation in the marketplace in the manner of a private citizen or corporation.” Id. at 614.
That is, “when a foreign government acts, not as regulator of a market, but in the manner of a
private player within it, the foreign sovereign’s actions are ‘commercial’ within the meaning of
the FSIA.” Id.
In assessing the commercial character of an act, courts must consider “the nature of the
course of conduct or particular transaction or act, rather than . . . its purpose.” 28 U.S.C. §
1603(d). “[T]he question,” accordingly, “is not whether the foreign government is acting with a
profit motive or instead with the aim of fulfilling uniquely sovereign objectives” but, rather,
“whether the particular actions that the foreign state performs (whatever the motive behind them)
are the type of actions by which a private party engages in ‘trade and traffic or commerce.’”
Weltover, 504 U.S. at 614 (quoting Black’s Law Dictionary 270 (6th ed. 1990)). Consider two
examples: on the one hand, “a foreign government’s issuance of regulations limiting foreign
currency exchange is a sovereign activity, because such authoritative control of commerce
cannot be exercised by a private party,” while, on the other hand, “a contract to buy army boots
or even bullets is a ‘commercial’ activity, because private companies can similarly use sales
contracts to acquire goods.” Id. at 614–15.
Applying this test, the Court previously held that “contract[ing] for the provision of legal
services constitutes ‘commercial activity’ under section 1605(a)(2).” Dentons I, 134 F. Supp. 3d
at 10 (quoting Lanny J. Davis, 962 F. Supp. 2d at 159). That is because “retaining an attorney is
the type of activity by which private parties engage in commerce.” Nnaka v. Federal Republic of
16
Nigeria, 238 F. Supp. 3d 17, 28 (D.D.C. 2017). It does not matter why the foreign government
retained counsel or whether the foreign government’s ultimate objective in retaining counsel was
to further a sovereign interest, just as it does not matter why a foreign government might contract
to purchase army boots or bullets. See id. What matters is whether the suit is based upon “the
type of action[] by which a private party engages in ‘trade and traffic or commerce.’” Weltover,
504 U.S. at 614 (quoting Black’s Law Dictionary 270 (6th ed. 1990)).
Guinea does not seek to retread this ground. It accepts for purposes of the current motion
that a suit to enforce a contract for legal services in exchange for an agreed-upon fee falls within
the commercial activity exception. Guinea now argues, however, that this is not such a case
because a foreign state acts—if at all—only through the conduct of its duly authorized agents
and, in Guinea’s view, the Minister of Mines lacked authority to bind the Guinean state to the
contracts at issue. In support of this theory, Guinea relies on several out-of-circuit precedents
holding that “the commercial activity exception to the FSIA may be invoked against a foreign
state (and its agents) ‘only when its officials have actual authority’ to bind the sovereign.”
Allfreight Worldwide Cargo, Inc. v. Ethiopian Airlines Enterprise, 307 F. App’x 721, 724 (4th
Cir. 2009) (quoting Velasco v. Indonesia, 370 F.3d 392, 400 (4th Cir. 2004)); see also Dale v.
Colagiovanni, 443 F.3d 425, 428–29 (5th Cir. 2006); Phaneuf v. Republic of Indonesia, 106 F.3d
302, 306–07 (9th Cir. 1997). Guinea also offers the affidavit of Minster Yansane, who describes
the requirements of Guinean procurement law, asserts that the contracts at issue required his
approval, and attests that he never provided the required approval. Dkt. 84-10 at 2–5 (Yansane
Aff. ¶¶ 4–14). “[A] foreign government’s official declaration clarifying its laws must,”
according to Guinea, “be accepted as ‘conclusive.’” Dkt. 99 at 8 (quoting D’Angelo v. Petroleos
Mexicanos, 422 F. Supp. 1280, 1284 (D. Del. 1976)). Finally, Guinea has provided the Court
17
with a copy of the Guinean law upon which it relies and points to evidence supporting its
contention that “Dentons knew or should have known that” contractual language providing for a
substantial payment from the Guinean fisc “needed to be approved by the Minister of Finance.”
Dkt. 84-1 at 13.
Dentons disagrees on multiple grounds. It argues that, regardless of the legal sufficiency
of the engagement letters alone, Guinea indisputably retained Dentons to serve as its counsel and
accepted legal services for more than a year and, by doing so, engaged in commercial activity. It
disagrees with the premise of Guinea’s argument that Minister of Mines Fofana lacked authority
contractually to bind Guinea. It contends that, in any event, Guinea ratified the engagement
letters when senior Guinean officials, including Minister of Finance Yansane, “asked
Dentons . . . to perform extensive, time-sensitive work,” accepted those services, and paid
Dentons $2 million for services rendered. Dkt. 94-2 at 7, 28. It argues that Guinea waived any
claim of immunity by asserting third-party claims seeking to enforce the contracts at issue and by
participating in this “litigation for almost two years after its [initial] sovereign immunity motion
was denied.” Id. at 8. Finally, it argues that its claims extend beyond the four corners of the
engagement letters and include equitable claims for unjust enrichment, quantum meruit, and
account stated.
1. Legal Standards
Before turning to the merits of the parties’ respective arguments, it is worth reviewing the
relevant legal standards. Most importantly, although Guinea asserts its immunity in a motion for
summary judgment, the typical summary judgment standard does not apply. In the ordinary
course, the Court would consider whether the party moving for summary judgment had carried
its burden of demonstrating “that there is no genuine dispute as to any material fact and” that,
18
based on those undisputed facts, it “is entitled to judgment as a matter of law.” Fed. R. Civ. P.
56(a). In the face a genuine dispute of a material fact, the Court must deny the motion and
reserve judgment pending further factual development and, if necessary, trial on the merits. But,
because the FSIA protects foreign states “from suit,” and does “not merely” establish “a defense
to liability, more than the usual is required of trial courts in making pretrial factual and legal
determinations.” Foremost-McKesson, 905 F.2d at 449. “In order to preserve the full scope of
that immunity, the district court must make the ‘critical preliminary determination’ of its own
jurisdiction as early in the litigation as possible.’” Phoenix Consulting, 216 F.3d at 39. For this
reason, the D.C. Circuit has held on multiple occasions that, “if [a] defendant challenges ‘the
factual basis of the court’s jurisdiction, the court may not deny [a] motion to dismiss merely by
assuming the truth of the facts alleged by the plaintiff” and must, instead, “resolve any disputed
issues of fact the resolution of which is necessary to ruling upon the motion.’” Kilburn v.
Socialist People’s Libyan Arab Jamahiriya, 376 F.3d 1123, 1127 (quoting Phoenix Consulting,
216 F.3d at 40)). That same conclusion applies, a fortiori, when—as here—the foreign state
files a motion for summary judgment supported by exhibits and affidavits.
This rule is, of course, in tension with the notion that “a court is [often] poorly equipped
to resolve factual disputes at an early stage in a litigation—as reflected in the ordinary rules of
procedure.” Price v. Socialist People’s Libyan Arab Jamahiriya, 389 F.3d 192, 197 (D.C. Cir.
2004). Two additional precepts, however, at least reduce this tension. First, although the Court
must resolve disputed issues of fact, that “resolution . . . is ‘not a conclusive determination’ but is
‘instead subject to change in light of further development of the facts.’” Id. (quoting I.T.
Consultants, Inc. v. Republic of Pakistan, 351 F.3d 1184, 1188 (D.C. Cir. 2003)). Second, the
foreign sovereign “bears the burden of establishing its immunity, including the burden of proof
19
that no exception applies.” Phaneuf, 106 F.3d at 306; see also Price, 389 F.3d at 197; Kilburn,
376 F.3d at 1131; Phoenix Consulting, 216 F.3d at 40; H.R. Rep. No. 1487, 94th Cong., 2d Sess.
(“the burden will remain on the foreign state to produce evidence in support of its claim of
immunity”). Although the plaintiff bears the initial burden of production, that burden falls way
where, as here, the plaintiff produces evidence that the exception applies, and “the ultimate
burden of persuasion” then lies with the foreign state. Bell Helicopter Textron, Inc. v. Islamic
Republic of Iran, 734 F.3d 1175, 1183 (D.C. Cir. 2013). Taken together, these principles
establish that the Court must provide the foreign state with a meaningful opportunity to develop
the relevant facts and must resolve disputed issues of fact raised by the foreign state’s motion
and the plaintiff’s opposition, but, if the foreign state fails to carry its burden of proof, the case
may proceed subject to further factual development and litigation regarding any issues the
foreign state continues to contest.
Finally, although Guinea argues that “a foreign government’s official declaration
clarifying its laws must be accepted as ‘conclusive,’” Dkt. 99 at 8, the Supreme Court has
recently clarified that “[a] federal court should accord respectful consideration to a foreign
government’s submission, but is not bound to accord conclusive effect to the foreign
government’s statement[]” of the law.” Animal Sci. Prods., Inc. v. Hebei Welcome Pharm. Co.
Ltd., 138 S. Ct. 1865, 1869 (2018). Under Federal Rule of Civil Procedure 44.1, “[i]n
determining foreign law, the court may consider any relevant material or source, including
testimony, whether or not submitted by a party or admissible under the Federal Rules of
Evidence.” Fed. R. Civ. P. 44.1. The Rule further “specifies that a court’s determination of
foreign law ‘must be treated as a ruling on a question of law.’” Animal Sci. Prods., 138 S. Ct. at
1873 (quoting Fed. R. Civ. P. 44.1).
20
Applying these principles, the Court concludes that—at least on the existing record—
Guinea has failed to carry its burden of demonstrating that Dentons’s suit is based on activity
that is not subject to the commercial activity exception. Guinea devotes the bulk of its argument
to contentions that a foreign state can act only through the conduct of its authorized agents and
that, here, Minister Fofana was not authorized to enter a contract requiring payment from the
Guinean government budget. Dkt. 84-1 at 9–13. For present purposes, the Court assumes that
Guinea is correct and that, as a matter of Guinean procurement law, Minister Fofana lacked the
authority to bind the Guinean government to pay Dentons for its services in that manner. But,
even given those assumptions, the Court is convinced that the commercial activity exception
applies for two reasons. First, regardless of whether Minister Fofana was authorized to enter a
procurement contract on behalf of the Guinean state, there is ample evidence that the Guinean
state engaged in commercial activity sufficient to trigger the exception with respect to Dentons’s
claims for quantum meruit, unjust enrichment, and account stated. Second, there is also ample
evidence that senior Guinean officials—including Minister Yansane—ratified the contracts that
Minister Fofana signed.
To be sure, Guinea may have substantial defenses to all of these claims on the merits.
For present purposes, however, the Court is focused on jurisdiction and sovereign immunity, and
nothing in Guinea’s motion or accompanying exhibits establishes that Dentons’s claims are not
“based upon” Guinea’s commercial activity. See 28 U.S.C. § 1605(a)(2).
2. Dentons’s Equitable Claims
The Court must, as usual, start with the relevant statutory text. See Sebelius v. Cloer, 569
U.S. 369, 377 (2013). Dentons relies on the third clause of the FSIA’s commercial activity
exception, which exempts from the FSIA’s jurisdictional bar “any case . . . in which the action is
21
based . . . 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.” 28
U.S.C. § 1605(a)(2). As explained above, the foreign state’s purpose plays no role in
determining whether a course of conduct, act, or transaction is commercial; rather, the Court
must look to the “nature” of the activity, 28 U.S.C. § 1603(d), and must ask whether the foreign
state was acting as a regulator of a market or as a participant—“in the manner of a private
player”—in that market, Weltover, 504 U.S. at 614.
For present purposes, Guinea does not dispute that its acts caused a direct effect in the
United States—lawyers employed by Dentons performed substantial work on the Simandou
Project while in the United States. How the remainder of the third clause applies here, however,
raises more substantial questions. As an initial matter, although not briefed by the parties, the
Court assumes—without deciding—that each separate claim that Dentons asserts must satisfy the
relevant test. This, then, leaves the question whether each of Dentons’s equitable claims are
“based . . . upon an act outside the . . . United States in connection with a commercial activity of”
the Guinean state.
The phrase “based upon” is best read to refer to “conduct that forms the ‘basis’ or
‘foundation’ for a claim,” and thus to refer to “those elements of a claim that, if proven, would
entitle a plaintiff to relief under his theory of the case.” Nelson, 507 U.S. at 357; see also
Goodman Holdings v. Rafidain Bank, 26 F.3d 1143, 1146 (D.C. Cir. 1994). This does not
necessarily mean that “each and every element of a claim” must constitute “commercial activity
by [the] foreign state,” Nelson, 507 U.S. at 358 n.4, and, at least in the context of the third clause
of the commercial activity exception—which applies to an action based on acts taken “in
connection with a commercial activity,” as opposed to an action based on the “commercial
22
activity” itself—“a mere connection with, or relation to, commercial activity” might suffice, id.at 357–58 (noting distinction between the first and third clause). Taken together, these principles
establish following test: The Court must consider whether each of Dentons’s equitable claims is
based upon “particular actions” taken by Guinean officials that were “the type of actions by
which a private party engages in ‘trade and traffic or commerce’” or the type of actions a private
party undertakes in connection with trade or commerce. Weltover, 504 U.S. at 614 (quoting
Black’s Law Dictionary 270 (6th ed. 1990)); see also Nelson, 507 U.S. at 357–58.
Although a binding contract with a foreign government is often sufficient to invoke the
commercial activity exception, see Walter Fuller Aircraft Sales, Inc. v. Republic of the
Philippines, 965 F.2d 1375, 1384–85 (5th Cir. 1992) (collecting cases), it is not a necessary
condition to satisfy the above test, see, e.g., BP Chems. Ltd. v. Jiangsu Sopo Corp., 285 F.3d
677, 686 (8th Cir. 2002) (holding that a government company’s “attempts . . . to contact
American vendors to produce goods . . . were obviously ‘commercial’ in character”). Indeed, it
is not uncommon for parties to bring tort claims, such as claims for fraud, negligence,
misrepresentation, libel, and intentional infliction of emotional distress, based on the commercial
activity exception to the FSIA. See Nnaka, 238 F. Supp. 3d at 25, 29–30 (involving claims of
misrepresentation, libel, and intentional infliction of emotional distress); Atlantica Holdings v.
Sovereign Wealth Fund Samruk-Kazyna JSC, 813 F.3d 98, 109 (2d Cir. 2016) (“Here, of course,
Plaintiffs are asserting tort claims, not contract claims.”); Kettey v. Saudi Ministry of Educ., 53 F.
Supp. 3d 40, 52 (D.D.C. 2014) (involving claim of fraud); Kirkham v. Societe Air France, 429
F.3d 288, 292 (D.C. Cir. 2005) (negligence suit).
Here, even if one assumes that Minister Fofana lacked the authority to enter a public
procurement contract without the authorization of Minister Yansane, there is little doubt that a
23
variety of Guinean officials—acting within the scope of their authority—acted “in the manner of
private player[s]” operating within a market. There is no dispute that Guinea requested and
accepted extensive legal services from Dentons. See supra at 6–8. Lawyers from Dentons
attended meetings around the globe on Guinea’s behalf; they attended negotiations; they drafted
and revised numerous, complex documents; they advised senior Guinean officials, including the
Ministers of Mines and Finance, on matters of extraordinary importance to the nation; they
prepared hundreds of pages of briefing materials; they helped formulate Guinea’s negotiating
strategy; and they prepared materials to generate interest among potential investors in the
Simandou Project. Id. Senior Guinean officials, including the Minister of Finance, moreover,
were aware of much of Dentons’s work, and, indeed, at times, requested Dentons’s assistance.
See supra at 8–9. Minister Yansane, for example, requested that Dentons brief him and Minister
Fofana for a meeting with Rio Tinto in December 2012; he attended multiple, important
meetings with lawyers from Dentons; he received reports and drafts from Dentons; and requested
work product from Dentons as late as August 2013. Id. Finally, there is no dispute that—from
whatever source—Dentons received a payment of $2 million for its work months before August
2013. See supra at 9–11.
Although the parties dispute whether Minister Yansane authorized the $2 million
payment and where the funds came from to make the payment, see infra 32–34, for present
purposes, those disputes are beside the point. Guinea concedes that the transfer was made in
order to induce Dentons to continue providing legal services to Guinea, and, regardless of who
authorized the payment and where it came from, the activity at issue was decidedly commercial
in nature. Guinea wanted to obtain legal services from Dentons; it obtained those services; and it
arranged—one way or the other—for a payment of $2 million to ensure that Dentons would
24
continue to perform. Regardless of who paid, Guinea was the consumer of legal services, and, in
acquiring those services, Guinea engaged in the same “type of actions by which a private party
engages” in commerce, Weltover, 504 U.S. at 614, or, at the very least, engaged in the type of
actions that private parties undertake in “connection with, or relation to, commercial activity,”
Nelson, 507 U.S. at 358. Private parties, for example, routinely participate in the market for
legal services with the understanding that a third party will pay the associated fees. See, e.g.,
D.C. Rules of Professional Conduct, Rule 1.8, cmt. 10 (“Lawyers are frequently asked to
represent a client under circumstances in which a third person will compensate the lawyer, in
whole or in part.”). Thus, even assuming that Guinea did not itself pay the $2 million that
Dentons received, and even assuming that it merely contracted to make its best efforts to find
third-party funding for Dentons’s work, those facts do not remove the transaction from the
traditional realm of commercial activity, and there is nothing about Guinea’s engagement of
Dentons to represent it on the Simandou Project that differs from “the type of actions by which a
private party engages in ‘trade and traffic or commerce.’” Weltover, 504 U.S. at 614 (quoting
Black’s Law Dictionary 270 (6th ed. 1990)); see also Restatement (Third) of the Foreign
Relations Law of the United States § 453 cmt. b (1987) (“An activity is deemed commercial . . .
if it is concerned with . . . performance of . . . services.”).
This is not, in any event, the occasion for the Court to decide who is right on the facts or
who should prevail as a matter of law on any particular version of the facts. Those questions do
not go to the Court’s jurisdiction, but rather to the merits. For present purposes, the Court need
only decide whether Dentons’s case “is based . . . upon an act outside the territory of the United
States in connection with a commercial activity of the foreign state,” 28 U.S.C. § 1605(a)(2), and
the relevant facts and circumstances are undeniably commercial in nature. Dentons alleges, for
25
example, that it “provided valuable services for the benefit of Defendants and at the request of
Defendants,” Dkt. 1 at 16 (Compl. ¶ 68); that “Defendants were aware that Dentons was
providing these services, which Defendants accepted and from which they benefited,” id.(Compl. ¶ 69); that “Defendants knew that Dentons expected to be paid for its services,” id. at 17(Compl. ¶ 71); that “Defendants accepted and retained the benefits of Dentons’[s] services,”
without paying Dentons for all those services, id. (Compl. ¶¶ 77–78); and that Dentons sent
Defendants invoices “for the legal services,” which Defendants accepted without objection,
thereby “induc[ing] Dentons to continue to provide services,” id. at 18 (Compl. ¶¶ 83–85).
These allegations form the basis for Dentons’s equitable claims, and they all involve acts that
Guinea allegedly engaged in “in connection with a commercial activity”—that is, the provision
of legal services. 28 U.S.C. § 1605(a)(2); see also Nelson, 507 U.S. at 357. Guinea may well
have substantial factual and legal defenses to these claims. But Guinea has yet to make those
arguments—and correctly so because they go to the merits of Dentons’s claims and not to
Guinea’s sovereign immunity.
For these reasons, Guinea’s reliance on the line of cases—all from outside this circuit—
holding that “the commercial activity exception to the FSIA may be invoked against a foreign
state (and its agents) ‘only when its officials have actual authority’ to bind the sovereign.”
Allfreight Worldwide Cargo, 307 F. App’x at 724 (quoting Velasco, 370 F.3d at 400); but see
Devengoechea v. Bolivarian Republic of Venezuela, 889 F.3d 1213, 1227 (11th Cir. 2018); First
Fidelity Bank v. Gov’t of Antigua, 877 F.2d 189, 194 (2d Cir. 1989); Themis Capital, LLC v.
Democratic Republic of Congo, 881 F. Supp. 2d 508, 522–26 (S.D.N.Y. 2012), is misplaced for
present purposes. In each of those cases, the gravamen of the plaintiff’s claim focused on
purportedly unauthorized conduct. Velasco v. Government of Indonesia, 370 F.3d 392, 395 (4th
26
Cir. 2004), for example, involved an “action to compel the payment of a promissory note . . .
issued by former staff members of the National Defense Security Council of the Republic of
Indonesia (‘NSDC’).” One of those staff members, however, “admitted that[,] at the time he
issued the note[], he knew he was not authorized to do so,” and the former Secretary General of
the NSDC “declared that two ‘letters of authorization’ purportedly signed by him and
empowering” the two individuals “to issue the instruments on behalf of the [agency] were
forgeries.” Id. at 395–96. Similarly, in Dale v. Colagiovanni, 443 F.3d 425, 426–27 (5th Cir.
2006), the plaintiffs, receivers for various insurance companies alleging that the companies had
been looted, argued that the Vatican was subject to suit under the commercial activity exception
because a senior member of the Vatican government had allegedly aided in the “fraudulent”
scheme. The plaintiff did not allege, however, that the Vatican—or any Vatican official acting
with authority—knew about, authorized, or participated in the acts upon which the plaintiffs’ suit
was based. Id.Here, in contrast, there can be no dispute that the Guinean government as a whole—and
not merely a rogue officer or employee—was intimately involved in a relationship with Dentons
and that, however conceived, that relationship bore the hallmarks of commercial activity.
Indeed, it is difficult to imagine a case that involves greater participation and buy-in at the
highest levels of a foreign state than this one. To the extent that there is some arguable basis,
moreover, to resist this understanding of the facts, the Court finds that Guinea has failed to carry
its burden of proof of establishing that it is immune from suit. The evidence before the Court
supports a finding that senior Guinean officials—acting within their authority—requested and
accepted extensive legal assistance from Dentons; did not disavow Dentons’s bills or dispute
Dentons’s requests for payment; and, instead, paid Dentons $2 million in order to induce the law
27
firm to continue providing Guinea with badly needed legal services. At least with respect to
Dentons’s equitable claims, Guinea’s sole response posits that, “[u]nder [Dentons’s]
interpretation, any party contracting with a foreign state can do an end-run around the actual
authority requirement by simply pleading equitable remedies.” Dkt. 99 at 6. But, as explained
above, Dentons has done far more than that. Accordingly, on the present record, the Court must
reject Guinea’s contention that it is immune from Dentons’s equitable claims.
3. Contract Ratification
Although Dentons raises a host of additional arguments with respect to its claim for
breach of contract, the Court need reach only one of those contentions, which is both persuasive
and dispositive: that is, even if Minister Yansane was required to approve the retainer
agreements, and even if he did not do so at the outset, the government of Guinea, in general, and
Minister Yansane, in particular, ultimately ratified the agreements. In reaching this conclusion,
however, the Court once again cautions that this holding does not decide the case on the merits.
The Court merely holds that Guinea has had ample opportunity to engage in discovery and to
develop its sovereign immunity defense, and that it has—at least at this stage of the
proceeding—failed to carry its burden of showing that the commercial activity exception is
unavailable. See Price, 389 F.3d at 197 (court must resolve any disputed issues of fact, but that
resolution “is not a conclusive determination” and “subject to change in light of further
developments of the facts” (quoting I.T. Consultants, 351 F.3d at 1188)).
Dentons identifies two decisions that have applied the agency law concept of ratification
to the commercial activity exception to the FSIA. In the first case, Reiss v. Societe Centrale de
Groupe des Assurances Nationales, 246 F. Supp. 2d 273 (S.D.N.Y. 2003), the plaintiff sued
three French governmental entities to recover a finder’s fee he was allegedly owed based on an
28
oral agreement with Alain Juliard, the chairman of one of the French entities. In response, the
defendants argued that Juliard was not authorized to enter into the purported contract. Id. at 276.
The district court, however, concluded that an evidentiary hearing was necessary to determine
whether the defendants had ratified Juliard’s engagement with the plaintiff. Id. at 283–85. As
the court noted, “[r]atification is a form of retroactive activity that occurs where a principal,
having knowledge of the material facts, accepts the benefits of the agent’s actions already made
on his behalf.” Id. (quoting Banque Arabe et Internationale D’Investissement v. Maryland Nat’l
Bank, 850 F. Supp. 1119, 1213 (S.D.N.Y. 1994)). Such ratification, accordingly, “cures any
defect in actual authority at the time of the engagement.” Id.In the second case, GDG Acquisitions LLC v. Government of Belize, 849 F.3d 1299, 1302
(11th Cir. 2017), the plaintiff sued the government of Belize, “seeking . . . $10 million in unpaid
rent” under a lease agreement and promissory note for telecommunications equipment. On
interlocutory appeal, the government of Belize argued that the Belizean official who negotiated
and signed the agreement, the Minster of Budget Management, Investment, and Home Affairs
(“Minister of Budget”), lacked authority to bind Belize. The Eleventh Circuit declined to decide
whether the Minister of Budget “had actual authority to enter into the” agreement, however,
“because the [g]overnment subsequently ratified his actions and, therefore, agreed to be bound
by them as if they were done with actual authority.” Id. at 1308. As the court explained,
“ratification” constitutes “the affirmance of a prior act done by another, whereby the act is given
effect as if done by an agent acting with actual authority.” Id. (quoting Restatement (Third) of
Agency § 4.01(1) (2006)). If a party with actual authority ratifies a prior act, “the legal
consequence is that the [principal’s] legal relations are affected as they would have been had the”
initial act been taken “with actual authority at the time of the act.” Id. (quoting same at cmt. b)
29
(alteration in original). In other words, “ratification retroactively creates the effects of actual
authority.” Restatement (Third) of Agency § 4.02(1). “[A] person ratifies an act by (a)
manifesting assent that the act shall affect the person’s legal relations or (b) conduct that justifies
a reasonable assumption that the person so consents.” GDG Acquisitions, 849 F.3d at 1308
(quoting Restatement (Third) of Agency § 4.01).
Applying that test, the Eleventh Circuit held that the government of Belize ratified the
Minister of Budget’s actions in two ways. First, “the [g]overnment made forty payments of
$337,409.46[,] each in accordance with the lease schedules for the entirety of the two concurrent
five-year leases.” Id. at 1309. Second, it “retained the telecommunications equipment for the
duration of the two leases and, indeed, . . . still has not returned the equipment to” the plaintiff.
Id. at 1309–10. Concluding that “neither the act of retaining the telecommunications equipment
for nearly six years nor the act of making payments can be understood absent the assumption that
the [g]overment intended to be bound by the agreement,” the Eleventh Circuit held that “the
[g]overnment of Belize consented to and affirmed [the Minister of Budget’s] actions by
ratification” and that, as a result, the lease agreement was “binding and enforceable.” Id. at
1310.
In Dentons’s view, this case is on all fours with GDG Acquisitions. It argues, in
particular, that “[o]fficials at all levels of the Guinean government, including the Minister of
Finance and advisors to the President, requested, accepted, and retained legal services from
Dentons;” that “Guinean officials, including the Minister of Finance, continued to request and
accept work product from Dentons . . . after they were aware of the [l]etter of [e]ngagement;”
and that “Guinea ratified the [l]etter of [e]ngagement by making a payment pursuant to it” in late
March 2013 with the approval of the Minister of Finance. Dkt. 94-2 at 27–28. In response,
30
Guinea fails to identify any U.S. or Guinean law that differs from the approach taken in GDG
Acquisitions.1 It does, however, take issue with almost every factual premise underlying
Dentons’s ratification argument. As explained below, the factual record is—to say the least—
confused. The parties offer contradictory accounts of a number of events, and Guinea’s own
account of events is inconsistent in certain respects. The Court would, undoubtedly, benefit from
hearing from the key witnesses in person—or at least by videoconference for witnesses based in
Guinea—and the Court invites Guinea to renew its motion with a request for an evidentiary
hearing. On the present record, however, the Court finds that Dentons’s ratification theory is
convincing.
Guinea’s first disagreement is about whether Minister Yansane was aware of the retainer
agreement that Minister Fofana signed. Minister Yansane, for his part, testified that he was
unaware of the agreement before he became Minister of Mines in 2014, long after the relevant
events occurred. Dkt. 95-3 at 56 (Yansane Dep. at 39). The former legal counsel to the Ministry
of Mines testified, however, that he was told in March 2013 that Minister Yansane initially
declined to authorize partial payment to Dentons because Minister Fofana “did not act in respect
of the procedures which needed to be followed”—that is, Minister Yansane apparently objected
that Minister Fofana had signed the agreement without obtaining his prior approval. Id. at 81
1
Guinea does assert in a single sentence in a footnote that Guinean—as opposed to U.S.—law
should govern the inquiry. Dkt. 99 at 15 n.7. It cites no case in support of that assertion,
however, and, more importantly, it fails to identify any Guinean law that is inconsistent with the
ratification doctrine. It is implausible, moreover, that Guinean law contemplates that those
government officials authorized to bind the state may accept valuable services with the
knowledge that the service provider believes that it is entitled to payment; that those officials
may make a partial payment to the service provider to induce the continued provision of
services; and that they can later assert that the agreement was unauthorized. If any such law
exits, Guinea had the burden of bringing it to the Court’s attention, and it failed to do so.
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(Nimaga Dep. at 40). According to the Cahn declaration, moreover, Minister Yansane
acknowledged in August 2013 that he was aware of the agreement, apparently from the time it
was initially negotiated. Dkt. 95-4 at 44 (Cahn Decl. ¶ 112). Cahn attests that, in an exchange
between the two ministers, which he witnessed, Minister Yansane “remonstrated Minister Fofana
for having agreed to engage Dentons . . . on an hourly basis rather than[,] as [Minister Yansane]
had recommended, based on fixed sums for contractually specified deliverables.”2 Id. Even
after that meeting, moreover, Minister Yansane continued to request Dentons’s assistance. Dkt.
94-3 at 55 (Dentons SMF ¶ 145); Dkt. 99-2 at 27 (Guinea Resp. ¶ 145).
Guinea also disputes Dentons’s contention that Minister Yansane authorized the $2
million payment that Dentons received in March 2013 and, indeed, disputes that the payment
was made by the government of Guinea. In support of its position, Dentons has produced a copy
of the wire transfer, which reflects a transfer of $2 million from the Central Bank of Guinea to
Dentons’s Citibank account in New York on March 29, 2013. Dkt. 95-5 at 256–57. An email
2
Guinea challenges the admissibility of this evidence, both as hearsay and as a statement made
in the context of settlement discussions. See Dkt. 99-2 at 22 (Guinea Resp. ¶ 95); Dkt. 103; Dkt.
99 at 19 n.10. The statement is not hearsay, however; rather, it is an admission of a party
opponent. Fed. R. Evid. 801(d)(2). Nor is the statement inadmissible under Fed. R. Evid. 408.
For Rule 408 to apply, “there must first be an actual dispute, or at least an apparent difference of
view between the parties, concerning the validity or amount of the claim.” 2 Jack B. Weinstein
& Margaret A. Berger, Weinstein’s Federal Evidence § 408.06 (Mark S. Brodin, ed., Mathew
Bender 2d ed. 1997). Here, Guinea points to evidence that the parties were engaged in
discussions regarding securing payment to Dentons, including the timing and source of the
payment. Dkt. 103 at 2–3. But it does not identify any evidence that Guinea had already
disputed the validity of Dentons’s claim to fees and costs. The fact that Guinea lacked the funds
to make payment, that the parties were discussing other sources of payment, and that Guinea had
engaged in an audit of Dentons’s bills is unrelated to the present dispute between the parties. It
is not unusual for client to audit or review its attorneys’ bills, or to negotiate regarding a payment
schedule, in the absence of any claim or dispute regarding the validity or enforceability of the
retainer agreement. Such discussions do not fall within the scope of Rule 408 unless the dispute
at issue—or the statement the opposing party seeks to admit—involves the sufficiency or
accuracy of the audited bills.
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from a presidential advisor dated that same day, moreover, shows that “[t]he guys at the central
bank” were working on the transfer and requested confirmation for the Governor of the Central
Bank and the Ministry of Finance that Dentons would “complet[e] . . . the draft version of”
certain documents that Guinea needed by the following day. Dkt. 95-5 at 260. The advisor to
the President testified in deposition, moreover, that the payment was coordinated while seeking
Dentons’s promise to deliver the documents and that the Ministry of Finance needed Dentons’s
commitment because it was “part of the process” by which Dentons would receive payment.
Dkt. 94-5 at 35–36 (Magassouba Dep. at 73–74). The evidence further shows that the President
of Guinea intervened to ensure that Dentons received the payment and that he personally
“directed Minister of Finance Yansane to coordinate with the Central Bank to make the [$2
million] payment. Dkt. 94-3 at 41 (Dentons SMF ¶ 95); Dkt. 99-2 at 22 (Guinea Resp. ¶ 95).
Months later, in August 2013, moreover, Minister “Yansane acknowledged that he was involved
in, and directed, the $2 million payment,” and, indeed, complained to Cahn that he had been
awakened “in the middle of the night to approve the payment.”3 Dkt. 97-4 at 31 (Cahn Decl. ¶
72).
In response, Guinea does not offer a coherent, alternative explanation of the source and
authorization for the payment. In its counterclaim against Dentons, Guinea alleges that it made
the $2 million payment as an advance “to [Dentons] in a good faith effort to allow [the law firm]
time to arrange for third party funding.” Dkt. 25 at 26–27 (Countercl. ¶¶ 23–24); see also id. at
30 (Countercl. ¶ 44); id. at 14 (Answer ¶ 42); Dkt. 99-1 at 18 (Yansane Dep. at 84). But in its
reply brief, Guinea disavows that it made the payment at all and argues, instead, that the payment
3
Guinea also challenges the admissibility of this evidence and, for the reasons provided above,
that challenge also fails.
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“was made by a third party and not by the Government of Guinea.” Dkt. 99 at 17; see also Dkt.
95-3 at 15–16 (Nimaga Decl. at 1–2). Guinea asserts, “[t]he evidence revealed that Minister of
Mines Fofana made third party arrangements to have the $2 million paid from sources outside
the Government because Minister of Finance Yansane refused to pay the $2 million.” Dkt. 99 at
at 18. It is difficult to fathom, however, that Guinea would not know who supplied the funds or
how those funds made their way through the Guinean Central Bank to Dentons’s Citibank
account in New York. To the extent Guinea is correct about this, it has unique access to the
relevant evidence, yet has failed to provide that evidence to the Court.
Although difficult to reach any firm conclusions without live testimony, the existing
record supports the following findings: Minister Fofana executed the December 2012 agreement
with Minister Yansane’s knowledge, but without his express authorization; Minister Yansane did
not regard the contract as legally binding at that time “because the minister of finance is the only
person [who may] commit the government contractually and financially,” and he had not
approved the contract, Dkt. 99-1 at 4 (Yansane Dep. at 36); for this reason, Minister Yansane
resisted making the $2 million payment to Dentons in March 2013, but he eventually authorized
the payment at the request or direction of the Guinean President; and Minister Yansane—along
with other Guinean officials—requested and received substantial legal services from Dentons
while aware that Minister Fofana had signed the agreement and aware that Dentons expected
payment, and, indeed, requested additional assistance from Dentons even after the August 2013
meeting. These findings are not conclusive, and they remain “subject to change in light of
further developments of the facts.” Price, 389 F.3d at 197 (quoting I.T. Consultants, 351 F.3d at
1188). But, they constitute the Court’s findings of fact for purposes of the pending motion, and
they support Dentons’s theory that, even if Minister Yansane did not provide advance approval
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for the December 2012 retainer agreement, through his subsequent actions—and those of other
senior Guinean officials—the retainer agreement was ratified.
Accordingly, the Court finds that Guinea has failed to carry its burden of demonstrating
that the activities upon which Dentons’s claims are based fall beyond the scope of the
commercial activities exception to the FSIA. The Court will, accordingly, deny Guinea’s motion
for summary judgment on grounds of sovereign immunity, but will do so without prejudice to
Guinea renewing the motion based on further evidence, including evidence offered at a live
hearing.
B. The Merits
Finally, Guinea also argues that, even if the Court has jurisdiction, it is entitled to
summary judgment on the merits of Dentons’s breach of contract claim because “Minister
Fofana lacked authority to contract on behalf of Guinea.” Dkt. 84-1 at 14. The parties agree that
D.C. law governs this claim and that the elements of the claim include “‘(1) a valid contract
between the parties; (2) an obligation or duty arising out of the contract; (3) a breach of that duty;
and (4) damages caused by [the] breach.’” Id. (citation omitted); see also Dkt. 94-2 at 37
(Dentons Mem. in Opp. Summ. J. at 32). They also agree that, under D.C. law, a valid contract
may exist by virtue of ratification by an official with authority to bind the party. Dkt. 94-2 at 37
(Dentons Mem. in Opp. Summ. J. at 32); see also Dkt. 84-1 at 14. In Guinea’s view, the
December 2012 retainer agreement does not constitute a valid contract because Minister Fofana
lacked authority to bind Guinea. Dkt. 84-1 at 15. Dentons, in contrast, argues—among other
things—that the agreement was ratified through the actions of senior Guinean officials, including
Minister Yansane. Dkt. 94-2 at 37–38 (Dentons Mem. in Opp. Summ. J. at 32–33).
This dispute, accordingly, raises the same factual and legal issues discussed above. For
purposes of Guinea’s motion for summary judgment, however, the Court need not resolve—even
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inconclusively—the factual dispute between the parties. It is enough to conclude that the parties’
conflicting factual contentions are sufficient to create a “genuine factual issue[]” that may affect
the substantive outcome of the litigation and may “reasonably be resolved in favor of either
party.” Liberty Lobby, 477 U.S. at 250. Here, for the reasons explained above, Dentons has
easily met its burden of “com[ing] forward with ‘specific facts showing that there is a genuine
issue for trial.’” Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587
(1986) (quoting Fed. R. Civ. P. 56(e)) (emphasis removed).
The Court must, accordingly, deny Guinea’s motion for summary judgment.
CONCLUSION
For the reasons set forth above, the Guinea’s motion for summary judgment, Dkt. 84, is
denied.
SO ORDERED.
/s/ Randolph D. Moss
RANDOLPH D. MOSS
United States District Judge
Date: September 16, 2019
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