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

Background

Consulting Concepts International, Inc. (CCI) and Massimiliano Pincione sued the Kingdom of Saudi Arabia and the Consumer Protection Association (CPA). The complaint alleged that Saudi Arabia, through CPA, retained the plaintiffs in 2013 to provide asthma-related and other consulting services in Saudi Arabia. CCI and CPA signed a contract stating that the parties would submit themselves to the jurisdiction of the laws of the United Kingdom for disputes arising from the agreement. The plaintiffs alleged that they completed the services by January 2014 and had not been paid.

The plaintiffs asserted claims for breach of contract, account stated, quantum meruit, and unjust enrichment. They sought $45,055,500 for asthma-related services and $12,000,000 for non-asthma-related services. CCI also filed a related claim against CPA in the High Court of Justice in England.

Foreign Sovereign Immunities Act

The defendants moved to dismiss under Federal Rule of Civil Procedure 12(b)(1) for lack of subject-matter jurisdiction under the Foreign Sovereign Immunities Act (FSIA), which generally protects foreign states and their agencies or instrumentalities from federal-court jurisdiction unless an exception applies.

The plaintiffs relied on the FSIA’s commercial-activity exception. The court explained that this exception required a commercial activity, a connection between that activity and the plaintiffs’ claims, and a geographic connection to the United States. The court assumed, without deciding, that the defendants’ activity was commercial. It nevertheless found no sufficiently close connection between that activity and the plaintiffs’ claims.

The court said the core of the plaintiffs’ claims was the defendants’ failure to pay for consulting services directed at Saudi Arabia. It concluded that the failure to pay was not an act in the United States and that the decision not to perform the contractual payment obligation occurred in the foreign state. The plaintiffs therefore had not shown that the commercial-activity exception applied, and the court found that it lacked jurisdiction under the FSIA.

Forum Selection and Forum Non Conveniens

The defendants also moved under Rule 12(b)(3), which concerns improper venue, arguing that the case should be dismissed under forum non conveniens. Forum non conveniens permits dismissal when a foreign court is a more appropriate and convenient place to resolve the dispute.

The court interpreted the contract’s statement that the parties would “submit themselves to the jurisdiction” of the United Kingdom’s laws for “any and all disputes” as a mandatory forum-selection clause. The court understood the reference to the United Kingdom as meaning England and Wales, noting that the parties and their experts agreed that the contract was governed by English law and that the related litigation was already pending in England.

The court found that the clause was reasonably communicated, applied to the claims and parties, and required use of the selected forum rather than merely choosing the governing law. It also found no evidence of fraud, overreaching, fundamental unfairness, strong public-policy concerns, or circumstances that would prevent the plaintiffs from receiving a fair opportunity to litigate in England. The court therefore dismissed the Amended Complaint both for lack of jurisdiction and because of forum non conveniens.

Jurisdictional Discovery

The plaintiffs separately sought pre-answer jurisdictional discovery about sovereign immunity. The court denied that motion. It explained that plaintiffs challenging sovereign immunity do not automatically receive discovery and must first make a preliminary showing that jurisdiction exists.

The court found that the plaintiffs had not made that showing. They had not identified specific disputed facts, or specific facts within the sovereign defendants’ exclusive knowledge, that discovery could resolve. The court therefore denied the motion for jurisdictional discovery.

Disposition

Judge Alvin K. Hellerstein granted the defendants’ motion to dismiss and denied the plaintiffs’ motion for pre-answer jurisdictional discovery. The Clerk was directed to terminate the two pending motions and close the case. The opinion does not state that the dismissal was with or without prejudice.