The opinion of the court was delivered by: JUNE L. GREEN
The plaintiff, Thomas Dooley, has brought an action against numerous defendants alleging violations of the Racketeer Influenced and Corrupt Organizations Act, Title 18, United States Code, sections 1961 et seq. ("RICO"), and supplemental state law claims. Several defendants, including the United Technologies Corporate ("UTC Corporate") defendants,
the United Technologies Individual ("UTC Individual") defendants,
defendants Olin E. Smith and Olin E. Smith & Associates ("Smith defendants"), defendant Westland, Incorporated ("Westland, Inc."),
and defendant Frank E. Basil, Inc. ("Basil")
filed motions challenging jurisdiction and venue and seeking transfer. The Court held a hearing on February 28, 1992, to consider these motions. For the reasons set forth below, the Court finds that personal jurisdiction and venue are proper as to each defendant. The Court further finds that transfer to the District of Connecticut is not appropriate.
Plaintiff Dooley's complaint sets forth allegations of a wide-ranging conspiracy encompassing foreign and domestic corporations individuals, and governments. At its root, the conspiracy set forth by the plaintiff is a bribery scheme between representatives of the Saudi Arabian government and Dooley's employer, defendant Sikorsky Aircraft ("Sikorsky"), in concert with its parent corporation, defendant United Technologies Corporation ("UTC"). UTC manufactures and sells military and commercial helicopters. Dooley alleges that throughout the late 1970's UTC actively solicited the Saudi Arabian government as a customer for its helicopters. Dooley further alleges that in 1986, the Saudi Arabian Ministry of Defense and Aviation ("MODA") finally agreed to purchase UTC helicopters. Dooley claims that to obtain the Saudi's business, UTC agreed to pay substantial bribes to Saudi Arabian officials and businessmen.
The conspiracy allegedly developed through tacit agreement between high-level UTC corporate employees and the Saudi Arabian Ambassador to the United States, His Royal Highness ("HRH") Prince Bandar bin Sultan ("Prince Bandar"), and Prince Bandar's Saudi Arabian associates. In its skeletal structure, the scheme described by plaintiff Dooley involved the sale of 13 UTC-manufactured Black Hawk helicopters to MODA through the Foreign Military Sales ("FMS") program administered by the Department of Defense and implicit promises for future sales. In exchange for the sales, UTC agreed to pay bribes to HRH Prince Khalid bin Sultan ("Khalid") and HRH Prince Fahad bin Sultan ("Fahad"), sons of MODA Minister Prince Sultan bin Abdul Aziz bin Saud, and Saudi Arabian businessman Ibrahim A. al-Namlah ("Namlah").
The bribes were to be funneled to the Saudi royalty through a business arrangement linking a Washington, D.C.-based corporation, Frank E. Basil, Inc., with a Saudi Arabian-based corporation, Thimar Al-Jazirah Corporation ("Thimar"). Through the influence of Saudi Arabian officials, including Prince Bandar, defendant Sikorsky was awarded a collateral contract for Maintenance Support Services ("MSS") to the FMS sale, without the normal competitive bidding of the contract. The UTC defendants then, in turn, contracted out for Personnel Support Service ("PSS") under the MSS contract, to the Basil-Thimar joint-venture. This mechanism allegedly allowed the UTC defendants to funnel bribes to Namlah and his "business partners", Khalid and Fahad, while circumventing United States Government oversight and audit procedures.
Namlah, the Saudi businessman designated by Prince Bandar to be UTC's "contact" in Saudi Arabia, is president and part-owner of Thimar. It is alleged that he used the payments from the Basil-Thimar joint venture to pay off Khalid and Fahad and to take a "cut" for himself.
Plaintiff Dooley alleges that Defendant 'Westland, Inc.'s involvement in the international conspiracy derives from its parent corporation, Westland Group PLC's, role in the affair. Dooley contends that as part of the alleged conspiracy, the UTC defendants agreed to the Saudi Arabian's demand that the Black Hawk helicopters be armed. Dooley alleges, that UTC, knowing the United States Government would not approve the sale of armed Black Hawks, sought the assistance of Westland Group PLC, a British manufacturer of military hardware in which UTC owned 7 percent stock. Dooley claims that the defendants conspired to amend a licensing agreement between UTC and Westland Group PLC so as to allow sales of armed Black Hawks to Saudi Arabia without the knowledge or approval of Congress, and the United States Government. According to the plaintiff, defendant Westland, Inc. played a role in attaining the amendment. Dooley contends that the Westland defendants' involvement in the conspiracy was critical in getting armed helicopters to the Saudi government.
The plaintiff has the burden of establishing that jurisdiction exists. Lott v. Burning Tree Club, Inc., 516 F. Supp. 913, 918 (D.D.C. 1980). Facts asserted by the plaintiff in his Complaint are presumed to be true unless directly contradicted by affidavit. Data Disc, Inc. v. Systems Tech. Assoc., Inc., 557 F.2d 1280, 1284 (9th Cir. 1977). However, where the parties are limited to written submissions, such as affidavits, the plaintiff need make only a prima facie showing to prevail on a motion to dismiss for want of jurisdiction. Chase v. Pan-Pacific Broadcasting, Inc., 617 F. Supp. 1414 (D.D.C. 1985).
Plaintiff Dooley raises several grounds which he argues give the Court personal jurisdiction over the defendants. The Court has carefully considered each argument. The Court finds two alternative bases on which to exercise personal jurisdiction over the defendants in this case. First, the Court finds that RICO provides for nationwide service of process under section 1965(d). Alternatively, the Court finds that it has personal jurisdiction over each defendant under the "transacting business clause" of the District of Columbia long-arm statute. Because the Court finds that it may exercise personal jurisdiction over all the defendants under either RICO section 1965(d) or section 13-423(a)(1) of the District of Columbia long-arm statute, it does not reach the question of whether any of the other grounds asserted by the plaintiff also support this Court's exercise of personal jurisdiction in this case.
Title 18, United States Code, section 1965(d) provides:
All other process in any action or proceeding under this chapter may be served on any person in any judicial district in which such person resides, is found, has an agent or transacts his affairs.
The section has been construed as a nationwide service of process provision. See Bank of Crete, S.A. v. Koskotas, 733 F. Supp. 648, 1991 U.S. Dist. LEXIS 12169, *4 (S.D.N.Y. Aug. 30, 1991); Merchant Nat'l Bank v. Safrabank,. . . F. Supp. . . ., 1991 U.S. Dist. LEXIS 12380 (D. Kan. Aug. 28, 1991); University Savings Assn v. Bank of New Haven, 765 F. Supp. 35, 36 (D. Conn. 1991); Omni Video Games, Inc. v. Wing Co., Ltd., 754 F. Supp. 261, 263 (D. R.I. 1991); American Trade Partners L.P. v. A-1 Int'l Importing Enter., Ltd., 755 F. Supp. 1292, 1302 (E.D. Pa. 1990); Bridge v. Invest America, Inc., 748 F. Supp. 948, 951 (D. R.I. 1990); Rolls-Royce Motors, Inc. v. Charles Schmitt & Co., 657 F. Supp. 1040, 1055 (S.D.N.Y. 1987); Soltex Polymer Corp. v. Fortex Indus. Inc., 590 F. Supp. 1453, 1458 (E.D.N.Y. 1984), cert. denied 832 F.2d 1325 (1987). Under this section, the plaintiff's prima facie burden is met by showing that a defendant has contacts with the United States. Minimum contacts with the forum state, as required under the traditional long-arm jurisdiction analysis, is not necessary. A defendant's contact with the United States is sufficient to satisfy the requirements of due process. Bank of Crete, S.A. v. Koskotas, 733 F. Supp. 648, 1990 U.S. Dist. LEXIS 12169, at *4, quoting Rolls-Royce Motors, Inc. v. Charles Schmitt & Co., 657 F. Supp. 1040, 1055 (S.D.N.Y. 1987) ("Where such nationwide service of process is authorized, a federal district court's jurisdiction is coextensive with the boundaries of the United States [and] due process requires only that a defendant in a federal suit have minimum contacts with the United States.")
All of the defendants served in this matter thus far, reside in the United States. The Court, therefore, has personal jurisdiction over each defendant under section 1965(d).
While the Court finds support in the case law from other circuits for its determination that section 1965(d) is RICO's nationwide service of process provision, it recognizes that the Court of Appeals in this circuit has not had the opportunity to address this issue. The Court, therefore, also considers whether personal jurisdiction is proper as to each defendant under the District of Columbia long-arm statute, concluding that it is.
B. D.C. Long-Arm Statute D.C. Code § 13-423(a)(1)
The Court has personal jurisdiction over the defendants in this matter pursuant to the District of Columbia long-arm statute, D.C. Code § 13-423(a)(1). This section provides:
A District of Columbia Court may exercise personal jurisdiction over a person who acts directly or by an agent, as to a claim for relief arising from the person's transacting any business in the District of Columbia.
In enacting the long-arm statute, Congress intended to expand the basis for jurisdiction in the District of Columbia. S. Rep. No. 405, 91st Cong., 1st Sess. 35 (1969) See also Chase, 617 F. Supp. at 1420. Section 13-423(a)(1) of the statute has been held to be coextensive with the Constitution's due process limits. Crane v. Carr, 259 App. D.C. 229, 814 F.2d 758 (D.C.Cir. 1987); Mouzavires v. Baxter, 434 A.2d 988, 991-2 (D.C.App. 1981) (en banc), cert. denied 455 U.S. 1006, 71 L. Ed. 2d 875, 102 S. Ct. 1643 (1982).
However, the reach of a Court's jurisdiction under the "transacting business" clause is limited by Section 423(b) which provides, "only a claim for relief arising from the acts enumerated in this section may be asserted against [a defendant]." Consequently, a plaintiff seeking to carry his burden of proving personal jurisdiction under section 13-423(a)(1) must show: first, that the defendant transacted business in the District of Columbia; second, that the claim arose from the business transacted in D.C.; and third, that the defendant had minimum contacts with the District of Columbia such that the Court's exercise of personal jurisdiction would not offend "traditional notions of fair play and substantial justice." International Shoe v. Washington, 326 U.S. 310, 316, 90 L. Ed. 95, 66 S. Ct. 154 (1945); See also Avianca, Inc. v. Corriea, 705 F. Supp. 666, 1991 U.S. LEXIS 7447, *5-*6 (D.D.C. May 31, 1991).
1. UTC Corporate Defendants
Plaintiff Dooley makes a sufficient showing as to the UTC Corporate Defendants under the "transacting business" subsection of the District of Columbia long-arm statute to establish a prima facie case of personal jurisdiction as to these defendants. The plaintiff's 159-page complaint sets forth numerous instances of UTC Corporate Defendants transacting business in Washington, D.C., during the period the conspiracy is alleged to have occurred. UTC Corporate Defendants own and maintain business and residential property in Washington, D.C. Through their offices in the District, it is alleged that representatives of UTC Corporate Defendants conducted business directly relating to the development, negotiation and implementation of the Black Hawk sale to the Saudi Arabians. See Complaint PP23, 66, 131, 174. Plaintiff alleges that representatives of UTC Corporate Defendants made numerous trips to the District of Columbia throughout the course of the conspiracy to further its success. See Opposition Of Plaintiff Dooley To Motion By The UTC Corporate Defendants To Dismiss For Lack Of Personal Jurisdiction Or, In The Alternative, For Transfer Of Venue To The District Of Connecticut ("Opposition to UTC Corporate Defendants") at 15. Thus, the UTC Corporate Defendants "purposefully availed [themselves] of the privilege of conducting activities within the forum." Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475, 85 L. Ed. 2d 528, 105 S. Ct. 2174 (1985).
Moreover, the plaintiff alleges that UTC Corporate Defendants sought out a Washington, D.C.-based corporation, Frank E. Basil, Inc., to become the conduit for the bribes passed to the Saudi Arabians. Complaint PP188-189, 194-195, 197, 203-206, 209-210, 214. Basil, it is alleged, acted on the direction of the UTC defendants. The UTC defendants allegedly profited from this association by using Basil's legitimate existence to shield their bribes to the Saudi officials from government scrutiny. The UTC Corporate Defendants' allegedly affirmative role in effecting this scheme is sufficient for asserting personal jurisdiction over them. Avianca,. . . F. Supp. . . ., 1991 U.S. Dist. LEXIS 7447, at *6-*7.
Plaintiff also alleges that UTC Defendants have made countless phone calls and mailings into the District which directly relate to the Black Hawk Saudi sale. Opposition to UTC Corporate Defendants at 41-42. Courts, including this one, have found that telephone calls and mailings to Washington, D.C. constitute "transacting business" under section 13-423(a)(1). Margoles v. Johns, 157 App. D.C. 209, 483 F.2d 1212, 1218 (D.C. Cir. 1973); Dorothy K. Winston & Co. v. Town Heights Dev., Inc., 376 F. Supp. 1214, 1216 (D.D.C. 1974); See also Federal Deposit Insurance Corp. v. O'Donnell, 136 Bankr. 585,. . . F. Supp. . . ., 1991 U.S. Dist. LEXIS 11882 (D.D.C. August 26, 1991).
Plaintiff Dooley's complaint certainly can be said to arise from the UTC Corporate Defendants' activities in the District of Columbia. It is through UTC Defendants' contacts with Saudi Arabian Ambassador Bandar in Washington, D.C. that the conspiracy allegedly came to its inception. Through UTC Defendants' visits to the District, the conspiracy allegedly came to fruition. And it is the defendants' connections to Frank E. Basil, Inc., in Washington, D.C., which established allegedly the mechanism for the bribes at the heart of the conspiracy. Plaintiff Dooley's alleged refusal to cooperate with this Washington-centered conspiracy gave rise to his demotion and thus, this action.
Finally, the exercise of personal jurisdiction over the UTC Corporate Defendants satisfies due process requirements. The minimum contacts test described by the Court in International Shoe Co. v. Washington, 326 U.S. 310, 90 L. Ed. 95, 66 S. Ct. 154 (1945), focuses on the reasonableness of pursuing the litigation in the forum. World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 292, 62 L. Ed. 2d 490, 100 S. Ct. 559 (1980). "Implicit in this emphasis on reasonableness is the understanding that the burden on the defendant, while always a primary concern, will in an appropriate case be considered in light of other relevant factors, including the forum State's interest in adjudicating the dispute." Id. The exercise of jurisdiction over a particular defendant must not offend "traditional notions of fair play and substantial justice." International Shoe, 326 U.S. at 616.
Considering the UTC Corporate Defendants' contacts to Washington, D.C., the Court concludes that the exercise of personal jurisdiction over these defendants does not offend due process. It is reasonable to require the UTC Corporate Defendants to return to the jurisdiction where they allegedly first sought to accomplish their scheme. The UTC Corporate Defendants should have foreseen that their actions in the District of Columbia, allegedly developing an illegal international conspiracy, would imperil persons like Dooley who refused to cooperate in the scheme. They also could have anticipated that an employee injured by his refusal to cooperate would seek redress in Washington, D.C., a hub of the conspiracy.
Moreover, the District of Columbia has a significant interest in providing a forum for the plaintiff's action. Plaintiff Dooley alleges what amounts to a large-scale fraud on the federal government. In particular, Dooley claims that the defendants' actions defrauded Congress, the State Department and the Department of Defense and manipulated the FMS program by which the government deals with foreign governments in military sales. The allegations, if proven, could have a substantial impact on future FMS sales. Additionally, Dooley contends that to accomplish this fraud, the UTC defendants sought out a Washington-based ...