International Creative Talent Agency, LLC v. Turkish Republic of Northern Cyprus , 856 F. Supp. 2d 223 ( 2012 )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
INTERNATIONAL CREATIVE TALENT
AGENCY, LLC,
Plaintiff,
v. Civil Action No. 11-1469 (JEB)
TURKISH REPUBLIC OF NORTHERN
CYPRUS, et al.,
Defendants.
MEMORANDUM OPINION
Turkey and Greece have long engaged in a dispute about the governance of the
northeastern part of the island of Cyprus. Against this international backdrop, Plaintiff
International Creative Talent Agency, LLC (ICTA) brings an action that reads more like a
political manifesto than a contract suit. The Complaint decries the Turkish Republic of Northern
Cyprus (TRNC), which “exists only on the strength of occupation by Turkish military forces,”
who “illegally invaded the Republic of Cyprus and forcibly displaced approximately 200,000
Greek Cypriots.” Compl., ¶¶ 1, 36. The suit itself names as defendants the TRNC, a hotel, and
its parent company, and the basis of the action relates to a contract for a concert performance on
Cyprus. Proof of service has only been filed as to Defendant TRNC, which has now moved to
dismiss on a number of grounds, including lack of federal subject-matter jurisdiction. As the
Court agrees that Plaintiff has not sufficiently alleged such jurisdiction, it will grant the Motion
and dismiss the case without prejudice against the TRNC.
I. Background
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The gravamen of the Complaint, which must be presumed true at this stage, is that
Defendants “have colluded wrongfully to procure by deception the services of the [i]nternational
artist Julio Iglesias, to perform in an area in which it is illegal to do so under United States and
international law” – namely, in the TRNC, which is “not a recognized state [and] exists only on
the strength of occupation by Turkish military forces.” Compl. at 2. ICTA is an international
talent agency headquartered in the United States. Id., ¶ 4. Defendant Voyager is “an illegal
foreign company operating as a hotel and casino” on Cyprus, the “rightful owner” having been
“forcibly displaced . . . during the Turkish invasion of Cyprus in 1974.” Id., ¶ 5. Defendant Net
Holdings is “the parent company and sole owner of Voyager.” Id., ¶ 6.
On or about August 8, 2010, Voyager contracted with ICTA for its client, Julio Igleisas,
to perform at a concert in the part of Cyprus under TRNC control. Id. at ¶¶ 10-11. Voyager
“intentionally concealed the fact” that the performance would violate the laws of the Republic of
Cyprus, which, among other nations, does not recognize the TRNC. Id., ¶¶ 13-14. Informed of
the issue, Iglesias decided not to perform. Id., ¶¶ 24, 29. Plaintiff claims that Defendants falsely
represented the lawfulness of their actions, thus misleading it into the contract, which Plaintiff
requests be declared “illegal and void ab initio.” Id., ¶ 25. Plaintiff further alleges that the
TRNC and Voyager’s “deceptive trade practices lure United States citizens to its illegal
operations, making them unknowing violators of the law and causing an intentional trespassing
on the lands of another.” Id., ¶ 51.
Plaintiff brings claims for common-law fraud, civil conspiracy, breach of contract,
“detrimental reliance,” intentional and negligent misrepresentation, “constructive fraud,”
“concealment or non-disclosure,” “aiding and abetting,” violation of the Lanham Act, intentional
interference with prospective business advantage, and false-light invasion of privacy. Id., ¶¶ 55-
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105. No proof of service has yet to be filed for either Voyager or Net Holdings. TRNC has now
submitted a lengthy Motion to Dismiss.
II. Legal Standard
To survive a motion to dismiss under Fed. R. Civ. P. 12(b)(1), Plaintiff bears the burden
of proving that the Court has subject-matter jurisdiction to hear its claims. See Lujan v.
Defenders of Wildlife, 504 U.S. 555, 561 (1992); U.S. Ecology, Inc. v. U.S. Dep’t of Interior,
231 F.3d 20, 24 (D.C. Cir. 2000). A court has an “affirmative obligation to ensure that it is
acting within the scope of its jurisdictional authority.” Grand Lodge of Fraternal Order of Police
v. Ashcroft, 185 F. Supp. 2d 9, 13 (D.D.C. 2001). For this reason, “‘the [p]laintiff’s factual
allegations in the complaint . . . will bear closer scrutiny in resolving a 12(b)(1) motion’ than in
resolving a 12(b)(6) motion for failure to state a claim.” Id. at 13-14 (quoting 5A Charles A.
Wright & Arthur R. Miller, Federal Practice and Procedure § 1350 (2d ed. 1987) (alteration in
original)). Additionally, unlike with a motion to dismiss under Rule 12(b)(6), the Court “may
consider materials outside the pleadings in deciding whether to grant a motion to dismiss for lack
of jurisdiction.” Jerome Stevens Pharmaceuticals, Inc. v. F.D.A., 402 F.3d 1249, 1253 (D.C. Cir.
2005); see also Venetian Casino Resort, L.L.C. v. E.E.O.C., 409 F.3d 359, 366 (D.C. Cir. 2005)
(“given the present posture of this case — a dismissal under Rule 12(b)(1) on ripeness grounds
— the court may consider materials outside the pleadings”); Herbert v. Nat’l Academy of
Sciences, 974 F.2d 192, 197 (D.C. Cir. 1992).
III. Analysis
The TRNC points out numerous defects with the causes of action in Plaintiff’s
Complaint, as well as asserting that the Court lacks subject-matter jurisdiction over the entire
case. “Subject matter jurisdiction ‘is, of necessity, the first issue for an Article III court,’ for
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‘[t]he federal courts are courts of limited jurisdiction, and they lack the power to presume the
existence of jurisdiction in order to dispose of a case on any other grounds.’” Loughlin v. United
States, 393 F.3d 155, 170 (D.C. Cir. 2004) (quoting Tuck v. Pan Am. Health Org., 668 F.2d 546,
549 (D.C. Cir. 1981)); see also Am. Farm Bureau v. EPA, 121 F. Supp. 2d 84, 90 (D.D.C. 2000)
(“The court cannot address any issue if it lacks subject matter jurisdiction . . . .”). The Court,
therefore, will address this ground for dismissal first. Because it concludes that no subject-
matter jurisdiction exists here and because the exercise of supplemental jurisdiction over the
common-law claims would be improper, it will dismiss the Complaint without prejudice.
The Court will first discuss the three alleged bases of subject-matter jurisdiction and then
turn to the question of supplemental jurisdiction.
A. 28 U.S.C. § 1330(a)
The first basis upon which Plaintiff grounds its assertion of subject-matter jurisdiction is
28 U.S.C. § 1330(a). See Compl., ¶ 1. This provision grants federal district courts “original
jurisdiction without regard to amount in controversy of any nonjury civil action against a foreign
state,” where the foreign state is not entitled to sovereign immunity. If Plaintiff’s principal
argument is that the TRNC is not a recognized foreign state, this seems like a curious basis for
jurisdiction. And, indeed, Plaintiff abjures reliance on that statute in its Opposition, although it
is unclear whether it is admitting its mistake or wrongly accusing the TRNC of the error. See
Opp. at 8 (“The Defendant points out that diversity and federal question jurisdiction was alleged
in the civil cover sheet submitted by Plaintiff but has mistakenly included 28 USC 1330 as a
basis for subject matter jurisdiction when in fact it was only based [on] diversity and federal
question (28 USC 13331 and 1332.)”). In any event, given this concession, the Court will not
consider this basis for jurisdiction.
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B. Diversity Jurisdiction
Plaintiff does clearly rely on diversity jurisdiction under 28 U.S.C. § 1332(a)(2). See
Compl. ¶ 1. This section grants federal jurisdiction to actions “where the matter in controversy
exceeds the sum or value of $75,000 . . . and is between . . . citizens of a State and citizens or
subjects of a foreign state.” As the TRNC correctly points out, the Complaint fails to allege that
a sum over $75,000 is in controversy. See Mot. at 9-10. Plaintiff makes no argument to the
contrary, nor could it. “[T]he party asserting diversity jurisdiction in federal court has the burden
of establishing the existence of the jurisdictional amount in controversy.” Lupo v. Human
Affairs Int’l, Inc., 28 F.3d 269, 273 (2d Cir. 1994); see also Reule v. H.O. Seiffert Co., 430 Fed.
Appx. 584, 584 (9th Cir. 2011) (“The district court properly dismissed Reule's state law claims
for lack of diversity jurisdiction because she failed to allege facts establishing that the amount in
controversy exceeded $75,000.”) (citations omitted). This basis for federal subject-matter
jurisdiction, therefore, is as unavailing as the prior one.
C. Lanham Act
The remaining possible basis for jurisdiction, therefore, lies with 28 U.S.C. § 1331,
which addresses federal-question jurisdiction and was also cited by Plaintiff. See Compl., ¶ 1.
Yet, the lone federal claim Plaintiff asserts is one under the Lanham Act, 15 U.S.C. § 1125(a).
Id., ¶¶ 93-97. Defendant argues in its Motion that such a claim is so obviously deficient that it
cannot establish subject-matter jurisdiction. See Mot. at 7-8. Alternatively, the Court could
consider it under Fed. R. Civ. P. 12(b)(6) for failure to state a claim upon which relief may be
granted, a ground also urged by the TRNC. Id. at 35-37.
The Court need not decide which is the more appropriate standard because Plaintiff has
clearly conceded its Lanham Act claim. It says absolutely nothing in its Opposition about such a
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claim, which it has apparently abandoned at this point. See Abuhouran v. U.S. State Dept., 2012
WL 473241, at *2 (D.D.C. 2012) (“An argument in a dispositive motion that the opponent fails
to address in an opposition may be deemed conceded.”) (citations and internal quotations
omitted). The Court, therefore, deems the issue conceded. There remains, accordingly, no basis
for subject-matter jurisdiction here.
D. Supplemental Jurisdiction
District courts are given supplemental (formerly, pendent) jurisdiction over state claims
that “form part of the same case or controversy” as federal claims over which they have original
jurisdiction. 28 U.S.C. § 1367(a). By the same token, they “may decline to exercise
supplemental jurisdiction over [such] claim[s] . . . if . . . the district court has dismissed all claims
over which it has original jurisdiction.” § 1367(c)(3). The decision of whether to exercise
supplemental jurisdiction where a court has dismissed all federal claims is left to the court’s
discretion as “pendent jurisdiction is a doctrine of discretion, not a plaintiff's right.” United
Mine Workers v. Gibbs, 383 U.S. 715, 726 (1966), quoted in Shekoyan v. Sibley Intern., 409
F.3d 414, 423 (D.C. Cir. 2005). When deciding whether to exercise supplemental jurisdiction
over state claims, federal courts should consider “judicial economy, convenience and fairness to
litigants.” Id. Nonetheless, “in the usual case in which all federal-law claims are eliminated
before trial, the balance of factors to be considered under the pendent jurisdiction doctrine —
judicial economy, convenience, fairness, and comity — will point toward declining to exercise
jurisdiction over the remaining state-law claims.” Carnegie–Mellon Univ. v. Cohill, 484 U.S.
343, 350 n.7 (1988); see Edmondson & Gallagher v. Alban Towers Tenants Ass'n, 48 F.3d 1260,
1267 (D.C. Cir. 1995) (finding the discretion set out in Carnegie-Mellon Univ. “unaffected by
the subsequent enactment of 28 U.S.C. § 1367(d), in the Judicial Improvements Act of 1990”).
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Here the factors clearly weigh against a retention of the case. This Court has handled
little in the case beyond the current Motion to Dismiss and has not dealt at all with the pendent
state claims. Compare Schuler v. PricewaterhouseCoopers, LLP, 595 F.3d 370, 378 (D.C. Cir.
2010) (finding that district court appropriately retained pendent jurisdiction over state claims
where it had “invested time and resources” in the case). Finally, Plaintiff will not be prejudiced
because 28 U.S.C. 1367(d) provides for a tolling of the statute of limitations during the period
the case was here and for at least 30 days thereafter. See Shekoyan, 409 F.3d at 419 (finding that
because of this tolling, dismissal of the pendent state claims “will not adversely impact plaintiff's
ability to pursue his District of Columbia claims in the local court system.”) (internal citation
omitted).
The Court declines to exercise supplemental jurisdiction over Plaintiff’s remaining
common-law claims, which it may file in the appropriate state or local forum. Should Plaintiff
do so, or attempt to return here, the Court would caution that a number of the claims are
obviously infirm – e.g., there is no independent action for “aiding and abetting”; Plaintiff’s
contract claims against the TRNC are puzzling given that Iglesias, not Defendants, terminated
the contract, which the TRNC was not even a party to; and there is no publicity allegation to
support a claim for false-light invasion of privacy. These should be removed or amended in the
event Plaintiff proceeds anew.
IV. Conclusion
The Court will, therefore, issue a contemporaneous Order that grants the Motion and
dismisses the case against the TRNC without prejudice.
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/s/ James E. Boasberg
JAMES E. BOASBERG
United States District Judge
Date: April 24, 2012
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