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. The motions presently before the Court include the motion of defendants Westland Group, plc and Westland Helicopters, Ltd. to dismiss the complaint and the motion of defendants Ibrahim A. Al Namlah. Thimar Al-Jazirah Corporation, and Thimar Aviation Supply Company to dismiss the complaint. For the reasons set forth below, the Court denies both motions to dismiss.
The Complaint alleges the defendants' involvement in a wide-ranging conspiracy encompassing foreign and domestic corporations, individuals and governments. The conspiracy allegedly involves a bribery scheme between representatives of the Saudi Arabian Government and Dooley's employer, defendant Sikorsky, along with Sikorsky's parent corporation, United Technologies Corporation ("UTC"), and various co-conspirators including the two British defendants and the three Saudi Arabian defendants whose motions are before the court.
manufactures and sells military and commercial helicopters. Dooley alleges that throughout the late 1970's UTC/Sikorsky 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/Sikorsky helicopters. Dooley claims that to obtain the Saudi's business, UTC/Sikorsky agreed to pay substantial bribes to Saudi Arabian officials and businessmen.
The international players in the alleged conspiracy can be divided into two groups. The "British defendants" include Westland Group plc and Westland Helicopters, Ltd., two British corporations which manufacture and sell helicopters. The "Saudi defendants" include Ibrahim A. Al Namlah ("Namlah") a Saudi Arabian citizen and businessman, and Thimar Al-Jazirah Corporation ("TAJC") and Thimar Aviation Supply Company ("TASC"), two closely held businesses owned by Namlah.
The conspiracy allegedly developed through agreement between high-level UTC/Sikorsky employees, and defendant Namlah. Namlah allegedly was designated by the Saudi Arabian Ambassador to the United States, His Royal Highness ("HRH") Prince Bandar bin Sultan ("Prince Bandar"), to be UTC/Sikorsky's business "contact" in Saudi Arabia. Namlah, is President and sole owner of Thimar al-Jazirah corporation and Thimar Aviation Supply Company. According to the plaintiff, Namlah came to the United states in January 1986 to meet with defendant Zincone, the former president of Sikorsky. Plaintiff Dooley, who also was present at the meeting, alleges that Namlah presented a letter from HRH Prince Sultan bin Abdul Aziz bin Saud ("Prince Sultan"), the Saudi Arabian Minister of Defense and Aviation (and Prince Bandar's father), which stated that Prince Sultan had no objection to Sikorsky entering into a business relationship with Namlah. The plaintiff also alleges that Prince Bandar indicated that UTC/Sikorsky should become joint venture partners with Namlah and his corporation, Thimar al-Jazirah Corp., before sales of Black Hawks to Saudi Arabia could proceed. Thereafter, Dooley alleges, Namlah became UTC/Sikorsky's point man in the bribery schemes.
The scheme described by the plaintiff involved the sale of 12 UTC-manufactured Black Hawk helicopters to MODA through the Foreign Military Sales ("FMS-Black Hawks") program, administered by the Department of Defense, and implicit promises for future sales. In exchange for the sales, UTC allegedly agreed to pay bribes to HRH Prince Khalid bin Sultan ("Khalid") and HRH Prince Fahad bin Sultan ("Fahad"), also sons of Prince Sultan, through Namlah.
Plaintiff Dooley alleges that from 1986 through May of 1987, Namlah negotiated the proposed joint venture with UTC/Sikorsky. According to the plaintiff, the proposed joint venture was to be called, Sikorsky Aircraft Saudi Arabia, Ltd. ("SASAL"). SASAL's legitimate purpose was to provide maintenance work on the FMS-Black Hawks. But, according to the plaintiff, it also would serve as a mechanism for passing the bribes. Namlah allegedly made demands for his "bonus" during the SASAL negotiations. Plaintiff Dooley contends that the final joint venture proposal, which was signed by Namlah, provided for a 55/45 split of profits in Namlah's favor. He further contends that Namlah was not required to perform any real work to obtain his share. It is alleged that SASAL was abandoned when it became too visible to United States Government oversight.
Plaintiff Dooley alleges that when Namlah and the UTC defendants abandoned SASAL, they determined to involve a third party as Namlah's joint venture partner. As a result, Namlah formed a joint venture with Frank E. Basil, Inc. of Washington, D.C. ("Basil"). The plan allegedly was to have the Basil/Namlah joint venture perform personnel support services ("PSS") in conjunction with the maintenance support service ("MSS") contracts. The bribes would be added into the PSS contract costs. Plaintiff Dooley contends that Namlah told him that defendant Buckley, President of Sikorsky, approved the joint venture and Namlah's bonus during Namlah's visit to Sikorsky's Connecticut office in June 1988.
The plaintiff alleges that the Basil/Namlah bribery mechanism also was abandoned when the Saudi Arabian Government refused to register the joint venture. Basil's interest in the venture allegedly was assigned to Thimar al-Jazirah Corporation. In the end, according to the plaintiff, a subsidiary of defendant UTC -- defendant Sikorsky International Products, Inc. (SIPI) -- was contracted to provide the MSS; a line-item in SIPI's MSS contract gave TAJC the PSS contract. Dooley contends that Namlah took his "bonus" and the bribes for Prince Bandar's brothers from this contract. The actual performance under the contract allegedly was subcontracted to Basil.
Dooley alleges that Namlah also entered into other agreements with UTC defendants relating to the MSS and PSS work to enlarge his share of the bribes. Dooley contends that Namlah created TASC solely for this purpose.
According to Dooley, the alliance between the British defendants and defendants UTC/Sikorsky began in December 1985, when UTC agreed to purchase a significant financial interest in Westland Group plc. Westland Group plc allegedly controls 100 percent of the capital of Westland Helicopters, Ltd. and Westland, Inc., so UTC also became associated with these companies. The two companies then entered into a manufacturing license agreement, on March 7, 1986, giving the British defendants the right to manufacture UTC/Sikorsky's Black Hawk helicopter.
Dooley further alleges that through a separate bribery scheme the British defendants have obtained the Saudi Government's promise to purchase 88 armed Black Hawks. The sale is to be part of the Al-Yamanah II ("AY-II") transaction which the United Kingdom Ministry of Defense and the Saudi Arabia MODA announced on July 9, 1988. Dooley alleges that in order to obtain this sale, the British defendants entered into their own joint venture agreement with defendant Namlah, to create a mechanism for bribes for Prince Sultan's sons.
Both the British defendants and the Saudi defendants challenge this Court's jurisdiction and challenge the sufficiency of plaintiff Dooley's Complaint to state a claim against them. Many of the arguments made by both sets of defendants are duplicative. The Court, first, will consider whether personal jurisdiction exists over the defendants individually and then take up the arguments made by both the Saudi and British defendants.
A. Service of Process Is Based On The District Of Columbia Long-Arm Statute.
Before a federal court may exercise personal jurisdiction over a foreign defendant in litigation involving a federal question, there must be some basis for the defendant's amenability to service. Omni Capital Int'l, Ltd. v. Rudolf Wolff & Co., 484 U.S. 97, 104, 98 L. Ed. 2d 415, 108 S. Ct. 404 (1987). In Omni, the Supreme Court found that personal jurisdiction was lacking where neither the federal statute under which the claim was made, nor the state long-arm statute authorized service on the foreign defendants. Id.
Although RICO authorizes nationwide service of process, it does not provide for service of process in a foreign country. Avianca, Inc. v. Corriea, 705 F. Supp. 666, 684 (D.D.C. 1989). In order for this Court to exercise personal jurisdiction over the British defendants, service of process must be authorized under the District of Columbia long-arm statute.
Plaintiff Dooley relies upon the "transacting business" section found in District of Columbia Code, section 13-423(a)(1). Under section 13-423(a)(1), a court has personal jurisdiction over an individual if the individual transacted any business within the district, the claim arose out of the jurisdictional contacts and the exercise of personal jurisdiction does not offend due process. Section 13-423(a)(1), has been construed broadly by courts. As the section states, any transaction, even a single transaction, will suffice if it gives rise to the plaintiff's cause of action.
When a claim is related to or arises out of a defendant's contacts with the forum, a court is said to be exercising specific jurisdiction. Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414, 80 L. Ed. 2d 404, 104 S. Ct. 1868 (1984). The Supreme Court has explained that "a 'relationship among the defendant, the forum, and the litigation' is the essential foundation of [specific] jurisdiction." Id., quoting Shaffer v. Heitner, 433 U.S. 186, 204, 53 L. Ed. 2d 683, 97 S. Ct. 2569 (1977).
But the relationship between the defendant, the litigation and the forum also must satisfy due process requirements. "The constitutional touchstone [of Fourteenth Amendment due process analysis] remains whether the defendant purposely established 'minimum contacts' in the forum state." Burger King Corp. v. Rudzewicz, 471 U.S. 462, 474, 85 L. Ed. 2d 528, 105 S. Ct. 2174 (1985), quoting International Shoe Co. v. Washington, 326 U.S. 310, 316, 90 L. Ed. 95, 66 S. Ct. 154 (1945); see also, Asahi Metal Industry Co v. Superior Court, 480 U.S. 102, 108, 94 L. Ed. 2d 92, 107 S. Ct. 1026 (1987). "Minimum contacts" entail "some act by which the defendant purposefully avails itself of the privilege of conducting activities with the forum State, thus invoking the benefits and protections of its laws." Burger King, 471 U.S. at 475.
Plaintiff Dooley argues that in assessing an alien defendant's contacts under a state long-arm statute in a federal question litigation, a court should consider the alien's nationwide contacts, not simply contacts with the forum state. This view springs from the belief that the Fifth Amendment due process clause governs the exercise of personal jurisdiction in such cases.
The Fifth Amendment due process clause, however, is not controlling. Because the federal statute (RICO) at issue does not provide for service of process on these defendants in a foreign country, authorization for service depends upon the state law. And, because state law is subject to Fourteenth Amendment limitations, minimum contacts with the forum state must be established. United Elec. Workers v. 163 Pleasant Street Corp., 960 F.2d 1080 (1st Cir. 1992).
Applying these principles, the Court first considers whether jurisdiction is proper over the British defendants and then the Saudi defendants.