Everard Findlay Consulting, LLC v. Republic of Suriname

E
20-1691-cv
Everard Findlay Consulting, LLC v. Republic of Suriname

                                  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 “summary order”). A party citing 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 28th day of December, two thousand twenty.

PRESENT:           JOSÉ A. CABRANES,
                   SUSAN L. CARNEY,
                                    Circuit Judges,
                   RICHARD K. EATON,
                                     Judge. *


EVERARD FINDLAY CONSULTING, LLC F/K/A EVERARD
FINDLAY LLC,

                             Plaintiff-Appellant,                       20-1691-cv

                             v.

REPUBLIC OF SURINAME,

                             Defendant-Appellee.


FOR PLAINTIFF-APPELLANT:                                      SOPEN SHAH (Madison, WI), Eric B.
                                                              Wolff (Seattle, WA), Lauren Pardee
                                                              Ruben (Denver, CO), Perkins Coie LLP.




    *
     Richard K. Eaton, Judge of the United States Court of International Trade, sitting by
designation.

                                                          1
FOR DEFENDANT-APPELLEE:                                        KENNETH I. SHACHTER, Simon Chang,
                                                               Morgan, Lewis & Bockius LLP, New
                                                               York, NY.

     Appeal from a judgment of the United States District Court for the Southern District of
New York (Alison J. Nathan, Judge).

        UPON DUE CONSIDERATION WHEREOF, IT IS HEREBY ORDERED,
ADJUDGED, AND DECREED that the judgment of April 30, 2020 of the District Court be and
hereby is VACATED and the cause REMANDED.

         Plaintiff-Appellant Everard Findlay Consulting, LLC (formerly known as Everard Findlay
LLC) (“Plaintiff” or “Everard”) appeals from an April 30, 2020 judgment of the District Court that
dismissed Everard’s April 15, 2019 Amended Complaint (“Complaint”) asserting breach of contract
and account stated claims against Defendant-Appellee, the Republic of Suriname (“Suriname”)
pursuant to Federal Rule of Civil Procedure 12(b)(1) for lack of subject-matter jurisdiction. The
District Court held that the Foreign Sovereign Immunities Act (“FSIA”), 28 U.S.C. § 1602 et seq.
barred Everard’s suit. Relying on this Court’s decision in Kato v. Ishihara, 

360 F.3d 106

(2d Cir. 2004),
the District Court deemed the “commercial activity” exception to sovereign immunity inapplicable
on the facts alleged, because the activity on which the suit was based (Suriname’s engagement of
Everard to develop a strategic branding campaign for Suriname) did not constitute “commercial
activity” within the meaning of the FSIA. 1

         On appeal, Everard contends that Suriname’s engagement of Everard was “commercial
activity” under the FSIA, and that the District Court’s contrary conclusion was based on a
misreading of Kato. Everard further maintains that Suriname’s commercial activity had the requisite
connection to the United States for the commercial activity exception to apply. Accordingly, it
submits, the FSIA does not bar this suit and we should vacate the District Court’s order and remand
the case to be litigated on the merits. We assume the parties’ familiarity with the underlying facts, the
procedural history of the case, and the issues on appeal.

         Because the District Court decision “was made on a motion to dismiss and did not purport
to decide any dispute of fact,” the applicability of the FSIA commercial activity exception “is a legal
matter reviewed de novo.” Barnet as Tr. of 2012 Saretta Barnet Revocable Tr. v. Ministry of Culture & Sports
of the Hellenic Republic, 

961 F.3d 193

, 199 n.5 (2d Cir. 2020) (citation omitted).




    1
      Suriname also argued for dismissal based on lack of personal jurisdiction and forum non
conveniens, but the District Court did not consider those arguments.

                                                      2
        Under the FSIA, foreign states are immune from civil suit in U.S. courts, subject to
“enumerated statutory exceptions,” Anglo-Iberia Underwriting Mgmt. v. P.T. Jamsostek, 

600 F.3d 171

,
175 (2d Cir. 2010) (internal citations and quotation marks omitted), including the so-called
“commercial activity” exception. Under this exception, foreign states are not shielded from suits
“based [i] upon a commercial activity carried on in the United States by the foreign state; or [ii] upon
an act performed in the United States in connection with a commercial activity of the foreign state
elsewhere; or [iii] 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) (bracketed numbers added).

        It is well settled that whether an activity is commercial under the FSIA depends on the
nature of the activity, and not its purpose. That is, in determining whether the commercial exception
applies, courts do not ask “whether the foreign government is acting with a profit motive or instead
with the aim of fulfilling uniquely sovereign objectives” but “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.’” Pablo Star Ltd. v. Welsh Gov't, 

961 F.3d 555

, 561 (2d
Cir. 2020) (quoting Republic of Argentina v. Weltover, Inc., 

504 U.S. 607

, 614 (1992)). “[A] foreign state
engages in commercial activity ‘where it exercises only those powers that can also be exercised by
private citizens, as distinct from those powers peculiar to sovereigns.’”

Id. (citing Saudi Arabia

v.
Nelson, 

507 U.S. 349

, 360 (1993)). The promotion of domestic commerce is a legitimate
governmental function. See Pablo 

Star, 961 F.3d at 563-64

(interpreting Kato). Although the plaintiff
bears the burden of production on the applicability of an FSIA exception “[t[he ultimate burden of
persuasion remains with the party seeking sovereign immunity.” 

Jamsostek, 600 F.3d at 175

. In this
case, that is Suriname.

        I: Commercial Activity

          Suriname’s conduct in negotiating, entering, and allegedly breaching its promotional services
agreement with the public-relations firm Everard was “commercial activity” within the meaning of
the FSIA. In engaging a third-party contractor to promote its brand, Suriname behaved as do
countless private companies involved in commerce and did not exercise any uniquely sovereign
powers. Moreover, although Suriname’s brief on appeal describes Everard as its “surrogate,” neither
the Complaint nor exhibits support such an inference. Although Suriname’s agreements with
Everard contemplate that Everard would “act as Suriname’s press office,” App’x at 32, this vague
formulation does not appear to accurately characterize Everard’s duties under the contracts
referenced in the Complaint to any appreciable degree. Everard’s role was not primarily to act or
speak in Suriname’s name, but rather, as Everard points out, and as it alleged in the Complaint, it
was commissioned to produce “promotional materials common in the corporate world—a logo, a
tagline, a theme song, a website, visual branding guidelines, print copy, and branded items like USB
sticks . . . that Suriname could use at its discretion.” App. Reply Br. at 13. Furthermore, to the extent


                                                    3
Everard did act as Suriname’s “press office,” there is no indication that Everard’s activity involved
any typically “governmental” activity. Indeed, since Everard’s press office activity was to be
performed “work[ing] closely with representatives of the Tourism sector,” App’x at 32, it is
reasonable to infer that Everard was involved in the “commercial” activity of promoting tourism. See
Pablo 

Star, 961 F.3d at 562

(“promoting tourism” is activity “regularly undertaken by private
entities”). 2

        II: Connection with the United States

         As previously stated, the FSIA does not immunize foreign states from suits based on
commercial activity “carried on in the United States by the foreign state.” 28 U.S.C. § 1605(a)(2).
Commercial activity is “carried on” in the United States when it has “substantial contact” with the
United States. 28 U.S.C. § 1603(e). Although it is clear that Congress intended the “substantial
contact” standard to require “a tighter nexus than the ‘minimum contacts’ standard for due
process,” that standard is otherwise “poorly defined.” Pablo 

Star, 961 F.3d at 565

(internal citations
omitted). Here, however, we conclude that Suriname’s commercial activity had substantial contact
with the United States. Suriname chose to deal with an American company, and, as Everard points
out, and as it alleged in its Complaint, “key contractual negotiations [allegedly] occurred in New
York, many aspects of the contract were performed in New York, Suriname paid under the contract
by wiring U.S. dollars to U.S. bank accounts, and the contract targeted the U.S. travel market.” App.
Reply Br. at 18; App’x at 6,8. See, e.g., Pablo 

Star, 961 F.3d at 565

-66 (finding substantial contact with
the United States where promotional campaign of Welsh government—a political subdivision of the
United Kingdom with substantial devolved powers—“reached beyond the confines of its consular
office” to target an American audience and involved activities in New York and contracts with New
York companies); Ministry of Supply, Cairo v. Universe Tankships, Inc., 

708 F.2d 80

, 84 (2d Cir. 1983)
(Friendly, J.) (noting that a finding of substantial contact may be based on “as little activity as
‘receiving financing from a private or public lending institution located in the United States’”)
(internal citations and alterations omitted)).

        Suriname erroneously argues that commercial activity is not “carried on in the United States”
within the meaning of 28 U.S.C. § 1605(a)(2) unless the specific act on which the plaintiff’s suit is
based—which Suriname identifies as its alleged failure to pay Everard—had a substantial contact
with the United States. On the contrary, it is proper to consider Suriname’s predicate course of
commercial activity as a whole. “When a foreign state has carried on a commercial activity within the
United States … [the FSIA] withdraws immunity with respect to claims based not only on acts
within the United States but also with respect to acts outside the United States if they comprise an



    2
      In rendering its decision, the District Court did not have the benefit of our decision in Pablo
Star, which was issued after the court dismissed Everard’s Complaint.

                                                    4
integral part of the state’s regular course of commercial conduct or particular commercial transaction
‘having substantial contact with the United States.’” Universe Tankships, 

Inc., 708 F.2d at 84

(internal
citations omitted). Because we hold that Everard’s suit is based on Suriname’s commercial activity
carried on in the United States, we need not consider Everard’s alternative argument that its suit is
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).

        In sum: The FSIA does not shield Suriname from Everard’s suit, because that suit is based
on Suriname’s commercial activity carried on in the United States. The District Court therefore
erred in dismissing Everard’s suit under Fed. R. Civ. P. 12(b)(1) and we are required to vacate its
judgment.

                                           CONCLUSION

         We have reviewed all of the arguments raised by Suriname on appeal and find them to be
without merit. For the foregoing reasons, we VACATE the April 30, 2020 judgment of the District
Court, and REMAND the cause to the District Court for further proceedings consistent with this
order. 3


                                                        FOR THE COURT:
                                                        Catherine O’Hagan Wolfe, Clerk




    3
     Suriname is free to reassert its arguments regarding personal jurisdiction and forum non conveniens
on remand.

                                                   5

Add comment