District court denies sovereign state’s motion fortransfer of venue, motion to dismiss for lack of personaljurisdiction, motion to dismiss based on act of statedoctrine, and motion for certification of interlocutory appealof forum non conveniens ruling.

DRFP, LLC v. The Republica Bolivariana de Venezuela, 2:04-CV-00793 (S.D. Ohio, May 14, 2013) [click for opinion]

Plaintiff brought an action in 2004, asserting multiple causes of action that all sought the payment of two promissory notes allegedly issued by Defendant.  Defendant moved to transfer the action to the district court for the District of Columbia; to dismiss the complaint on multiple grounds, including lack of personal jurisdiction and the act of state doctrine; and to certify for interlocutory appeal the court's previous denial of a motion to dismiss for forum non conveniens.  The court denied each of these motions.

The court first addressed Defendant's motion to transfer to the District Court for the District of Columbia pursuant to 28 U.S.C. § 1406(a), which states that an action shall be dismissed or transferred if a case has been brought in an improper venue.  Defendant argued that in this case, the Foreign Sovereign Immunities Act, as codified in 28 U.S.C. § 1391(f)(4), set the District of Columbia as the sole appropriate venue, and therefore transfer under 28 U.S.C. § 1406(a) was required.  The court did not address this contention, but instead noted that the original complaint had been filed in 2004, and Defendant had waited over eight years from that time to first raise an objection to venue.  It held that such a long delay constituted a waiver of Defendant's objection.

The court next addressed Defendant's motion to transfer to the D.C. District Court under 28 U.S.C. § 1404(a), which permits transfer "[f]or the convenience of parties and witnesses, in the interest of justice."  The court found that waiver did not apply to a request under this section, but nonetheless denied Defendant's motion.  It noted that a plaintiff's choice of forum is given considerable weight in deciding whether to transfer under § 1404(a) if the chosen forum has a connection to the facts underlying the action.  Here, Plaintiff is based in the Southern District of Ohio, purchased at least a portion of the subject promissory notes in that district, and requested payment in that district.  The court further noted that Defendant failed to specifically outline how the D.C. District Court would be more convenient, and that the Southern District of Ohio had gained extensive familiarity with the action since its commencement in 2004.  Therefore, the court held that transferring the action would not be in the interest of justice.

The court next addressed Defendant's motion to dismiss the complaint due to a lack of personal jurisdiction because Defendants did not have sufficient contacts to meet the constitutional due process requirements.  The court found that Defendant, as a sovereign nation, was not a "person" for purposes of the Due Process Clause, and therefore denied Defendant's motion.

The court then found that Defendant's act of state doctrine defense failed.  Under the act of state doctrine, the courts of one state will not question the validity of public acts performed by other sovereigns within their own borders.  However, the district court did not find at this stage of the litigation that it was clear that it would be required to decide the validity of official acts of the Venezuelan government.  Moreover, even if Plaintiffs' claims sufficiently challenged official actions of the Venezuelan government, it was not clear that the actions were confined to the borders of Venezuela, as the promissory notes were payable at the bearer's designation, and the situs of the debt was therefore not Venezuela.

Finally, the court addressed Defendant's motion to certify for interlocutory appeal the court's previous decision to deny Defendant's motion to dismiss for forum non conveniens.  The court, noting that a determination of forum non conveniens was in this case fact-intensive, held that certification was inappropriate in this case.  However, it stated in a footnote that "[t]his is not to say that a forum non conveniens analysis will never lend itself to interlocutory appeal."