The opinion of the court was delivered by: URBINA
Granting Defendants' Renewed Motion to Dismiss the First Amended Complaint in Its Entirety; Denying Defendants' Motion for Leave to File Discovery Materials
Three corporate entities brought suit against the Republic of Costa Rica, a Costa Rican instrumentality, and a corporate subsidiary of the Costa Rican instrumentality arising from alleged unlawful anti-competitive activity and other related misconduct in the Costa Rican cellular services market. The plaintiffs in this action are three foreign corporations that design, develop, install, and operate, cellular telephone systems in countries in Europe, Asia, Africa, and Latin America. Plaintiff Millicom International Cellular, S.A. ("Millicom International"),
a Luxembourg corporation, owns 70 percent of the shares of common stock of its Costa Rican subsidiary, Plaintiff Millicom Costa Rica, S.A. ("MCR"). Plaintiff Communicaciones Celulares, S.A, ("Comcel"), another corporation organized under the laws of Costa Rica, owns 25 percent of the shares of MCR's common stock. The defendants in this action are the Republic of Costa Rica, Instituto Costarricense de Electricidad ("ICE"), and Radiografica Costarricense, S.A. ("Radiografica"). Defendant ICE is an agency or instrumentality of the Costa Rican government that controls the public land-line based telephone services market in Costa Rica. Defendant Radiografica, a Costa Rican corporation wholly owned by defendant ICE, provides telecommunications and data transmission services within Costa Rica and to the United States.
This matter comes before the court upon the defendants' renewed motion to dismiss the amended complaint in its entirety.
The defendants submit that the plaintiffs' claims are barred by the Foreign Sovereign Immunities Act of 1976 ("FSIA"), 28 U.S.C. §§ 1330, 1602 et seq., the Act of State Doctrine, Fed. R. Civ. P. 12(b)(6), and the doctrine of forum non conveniens. The plaintiffs contend that two jurisdictional exceptions to the FSIA apply, and therefore the defendants are amenable to suit. Upon consideration of the parties' submissions and the relevant law, the court dismisses the plaintiffs' amended complaint because none of the FSIA jurisdictional exceptions confers jurisdiction over the plaintiffs' suit.
In December 1987, Comcel obtained a license from the Radio Control Office of Costa Rica's Ministry of Government authorizing it to use certain radio frequencies to operate a cellular telephone system in Costa Rica. First Amended Complaint ("First Am. Compl.") P 25. After receiving the license, Comcel entered into a joint venture agreement with MCR to develop, install, and operate a cellular telephone system in Costa Rica. See id. P 26. In September 1988, before proceeding with the development of the cellular telephone system, Millicom, Inc., sought the assistance of the Costa Rican government to obtain insurance for its investment. See id. P 27. Specifically, Millicom, Inc., requested the Director General of Industry (at the Costa Rican Ministry of Economy, Industry, and Commerce) to assist it in obtaining insurance from the Overseas Private Investment Corporation ("OPIC")
by sending a letter to the U.S. Embassy in Costa Rica approving the proposed cellular telephone system. See id. On October 20, 1988, the Director General of Industry sent a letter to the U.S. Embassy in Costa Rica stating that the Costa Rican government had no objections to the proposed investment. See id. P 28. After the Costa Rican government did not object to the proposed investment, the OPIC approved Millicom, Inc.'s insurance application. See id. P 29. Subsequently in 1992, the Costa Rican government assisted Millicom International and MCR in obtaining financing from the International Finance Corporation ("IFC")
when they tried to expand their cellular network. See id. P 39. The IFC and MCR entered into an investment agreement whereby the IFC acquired preferred shares in MCR in return for a $ 6 million line of credit. See id. In May 1989, Millicom International and MCR began providing cellular telephone service to its first subscribers. See id. P 40.
In September 1991, ICE publically announced that it was developing its own cellular telephone system. See id. P 47. Shortly thereafter, the plaintiffs claim that they became the target of anti-competitive behavior. As part of ICE's alleged "plan to drive plaintiffs out of the Costa Rican cellular telephone services market," ICE's labor union filed an action in the Constitutional Chamber of Costa Rica's Supreme Court challenging the constitutionality of the 1987 grant of license to Comcel. See id. PP 47, 49. On October 6, 1993, the Costa Rican Constitutional Court ruled that the grant of the radio frequencies to Comcel was unconstitutional and therefore void. See id. P 51. The Court, however, stayed the effect of the ruling until May 9, 1995, in order to protect rights acquired in good faith by affected third parties. See id. Although the Court's ruling did void the license given to Comcel, it did not conclude that only one entity could provide cellular services and completely preclude Millicom International, Comcel or MCR from participating in the Costa Rican market. See id. P 52. Accordingly, Millicom International made various attempts with the Costa Rican government to reach an agreement by which Millicom and MCR could continue to compete in the Costa Rican cellular services market in a manner consistent with the Constitutional Court's ruling. See id. PP 59-62. These efforts included a possible Costa Rican legislative solution and/or a joint venture between Millicom International/MCR and Radiografica. See id. P 63. After an arrangement was reached, the parties signed a Letter of Intent on April 12, 1995, agreeing to use their best efforts to effectuate the signing of the contract containing the negotiated clauses. See id. P 64.
During the negotiations with the Costa Rican government and Radiografica, Millicom International alleges that the ICE and its unions continued their efforts to monopolize the cellular services market by seeking to prevent Millicom International from entering the market in any capacity. See id. P 53. In November 1993, ICE's engineers' union ("union") went on strike to prevent legislation from being presented to Costa Rica's National Assembly that would have authorized Millicom International's continued participation in the cellular services market. See id. P 54. Also, as part of its alleged attempt to monopolize the cellular services market, ICE sought written agreements from heads of political parties represented in the Costa Rican National Assembly that they would not pass any such legislation if it were to be presented to the National Assembly. See id.
As the May 10, 1995 deadline set by the Costa Rican Constitutional Court approached, the union went on strike to protest the Letter of Intent signed by Radiografica, the Costa Rican government and Millicom International. See id. P 67. On May 11, 1995, with the union still on strike, the Costa Rican government suggested to Millicom International and MCR to enter into a contract with ICE instead of Radiografica as an interim solution which could advance the interests of all the affected parties. See id. P 74. Millicom International provisionally agreed to contract with the ICE instead only if the terms were to be the same as those set forth in the Letter of Intent signed by Radiografica. See id. During subsequent negotiations between Millicom International, MCR, and ICE could not reach terms agreeable to both parties and on May 16, 1996, the Costa Rican government through its President announced the termination of all present and future negotiations between the parties. See id. P 76. As a result of the defendants' conduct, the plaintiffs were in default of the investment agreement with the IFC and consequently had to pay back the $ 2 million dollar loan. See id. P 78. Furthermore, the plaintiffs allege that after the defendants forced their cellular network off the air, ICE entered into an agreement with U.S. telecommunications companies to provide cellular service to subscribers in Costa Rica. See id.
Millicom International brings suit against the defendants based on the following causes of action: (i) monopolization in violation of Section 2 of the Sherman Act, 15 U.S.C. § 2; (ii) monopolization by denial of access to an essential facility in violation of Section 2 of the Sherman Act, 15 U.S.C. § 2; (iii) conspiracy to monopolize in violation of Section 2 of the Sherman Act, 15 U.S.C. § 2; (iv) conspiracy to restrain trade in violation of Section 1 of the Sherman Act, 15 U.S.C. § 1; (v) breach of contract; (vi) promissory estoppel; (vii) unlawful expropriation of aliens' property in violation of the Alien Tort Act, 28 U.S.C. § 1350; and (viii) tortious interference with prospective economic advantage. Millicom seeks damages from the defendants in excess of $ 134 million -- trebled pursuant to Section 4 of the Clayton Act, 15 U.S.C. § 15, and in an amount to be established at trial -- plus interest, attorneys' fees, expenses, and costs.
A. Applicability of the FSIA
Whenever the court is presented with a suit against a foreign state, the court must initially determine whether it has jurisdiction to hear the case. The FSIA "provides the sole basis for obtaining jurisdiction over a foreign state in the courts of this country." Argentine Republic v. Amerada Hess Shipping Corp., 488 U.S. 428, 443, 102 L. Ed. 2d 818, 109 S. Ct. 683 (1989). The FSIA presumes a foreign state is immune from suit in United States courts except as provided in one of the statutory exceptions. See Saudi Arabia v. Nelson, 507 U.S. 349, 355, 123 L. Ed. 2d 47, 113 S. Ct. 1471 (1993) ("Under the Act, a foreign state is presumptively immune from the jurisdiction of United States courts; unless a specified exception applies, a federal court lacks subject-matter jurisdiction over a claim against a foreign state"). Exceptions to this immunity exist for cases dealing with waiver of immunity, 28 U.S.C. § 1605(a)(1); certain commercial activities, 28 U.S.C. 28 U.S.C. § 1605(a)(2); expropriation of certain types of property, 28 U.S.C. § 1605(a)(3); cases concerning rights to immovable property situated in the United States, 28 U.S.C. § 1605(a)(4); actions based in tort, 28 U.S.C. § 1605(a)(5); or admiralty claims, 28 U.S.C. § 1605(b).
The plaintiffs argue that the FSIA's statutory exceptions defeat the defendants' immunity claims to give this court jurisdiction over the present action. In particular, the plaintiffs allege that the defendants are not entitled to foreign sovereign immunity because two of the FSIA's exceptions to immunity apply: (i) the commercial activity exception, 28 U.S.C. § 1605(a)(2); and (ii) the expropriation exception, 28 U.S.C. § 1605(a)(3). Neither of the FSIA jurisdictional exceptions cited by the plaintiffs is meritorious and defeats the defendants' immunity claim. Therefore, for the reasons stated herein, the present action is dismissed because the FSIA does not confer upon this ...