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AGS INTERNATIONAL SERVICES S.A. v. NEWMONT USA LIMITED

November 16, 2004.

AGS INTERNATIONAL SERVICES S.A., ALFONSO G. ANDRESS, AND JOSE FLORIAN, INDIVIDUALLY AND ON BEHALF OF CERTAIN FORMER EMPLOYEES OF AGS, Plaintiffs
v.
NEWMONT USA LIMITED NEWMONT PERU LIMITED MINERA YANACOCHA S.R.L. SODEXHO ALLIANCE S.A. SODEXHO PERU S.A.C., Defendants.



The opinion of the court was delivered by: REGGIE B. WALTON, District Judge

MEMORANDUM OPINION

Currently before the Court is the Motion to Dismiss by Minera Yanacocha and the Newmont Defendants [D.E. #8] ("Newmont's Mot.") and the Motion by Sodexho Alliance and Sodexho Peru to Dismiss the Complaint [D.E. # 9] ("Sodexho's Mot."). The plaintiffs have filed an opposition to the defendants' motions, Plaintiffs' Memorandum in Opposition to Newmont's and Sodexho's Motions to Dismiss ("Pls.' Opp."), Plaintiffs' Supplemental Memorandum Setting Forth Jurisdictional Facts in Opposition to Newmont's and Sodexho's Motion to Dismiss ("Pls.' Supp."), and the defendants have filed replies to the opposition, Reply Memorandum in Support of Motion to Dismiss by Minera Yanacocha and the Newmont Defendants ("Newmont's Reply"); Reply Brief of Sodexho Alliance and Sodexho Peru in Support of Motion to Dismiss ("Sodexho's Reply"). Upon careful consideration of the parties' pleadings and the entire record in this case, the Court concludes that both motions should be granted because this Court cannot exercise general or personal jurisdiction over any of the defendants.

I. The Parties and the Factual Background

  A. The Parties

  The plaintiffs, AGS International Services, S.A. ("AGS"), Alfonso G. Andress ("Andress") and Jose Florian ("Florian"), individually and on behalf of certain former employees of AGS, have brought this action against Newmont USA Limited ("Newmont USA"), Newmont Peru Limited ("Newmont Peru") and Minera Yanacocha S.R.L. ("Minera Yanacocha") (collectively "Newmont defendants") as well as Sodexho Alliance, S.A. ("Sodexho Alliance") and Sodexho Peru S.A.C. ("Sodexho Peru") (collectively "Sodexho defendants").

  AGS was established in 1990 in Lima, Peru, where it provides vending and food processing services as well as "industrial catering and hospitality services" to companies which operate remote mining and oil refining sites. Am. Compl. ¶ 14.*fn1 In order to serve American food products to American consumers in Peru, AGS imports food items from the United States to Peru. Id. Andress, a European citizen living in Peru, is the Chairman of AGS. Id. ¶ 15. Florian, a Peruvian citizen and a former AGS employee who worked at the Yanacocha mines in Peru, is a member of a proposed class of former AGS employees. Id. ¶ 16.

  Newmont USA is a publicly traded corporation, incorporated in Delaware and with its principal place of business in Denver, Colorado. Id. ¶ 6. Newmont USA also maintains a two room office at 1800 Massachusetts Avenue, N.W. in the District of Columbia, which is leased from the law firm of Shea & Gardner and staffed by Mary Beth Donnelly. Id.; Memorandum in Support of Motion to Dismiss by Minera Yanacocha and the Newmont Defendants ("Newmont's Mem.") at 8. Ms. Donnelly is Newmont USA's Group Executive for Government Relations and her employment duties are to "serve as a liaison between Newmont USA and the legislative and executive branches of the United States government [,] to regularly lobby members of the federal government on Newmont's behalf . . . [, and to] act as a liaison between Newmont USA and the embassies of the various countries in which Newmont USA does business." Id., Exhibit ("Ex.") C (Declaration of Mary Beth Donnelly taken on February 25, 2003) ("Donnelly Decl.") ¶ 10.*fn2 Ms. Donnelly has also served as Treasurer of The American-Uzbekistan Chamber of Commerce ("AUCC"), which is located in the District of Columbia, as of June 2002, and as Vice Chairperson of the North American-Kyrgz Business Council ("NAKBC"), which is located in Falls Church, Virginia. Pls.' Opp., Ex. 8 (list of AUCC Board of Directors as of June 2002); Ex. 9 (Information pertaining to AUCC); Ex. 12 (Information pertaining to the NAKBC).*fn3

  Newmont Peru is a Delaware corporation with its principal place of business in Lima, Peru. It is registered to do business in Peru and operates as the manager of Minera Yanacocha. Newmont's Mem., Ex. B (Declaration of Carlos Santa Cruz taken on February 24, 2003) ("Cruz Decl.") ¶ 3. Minera Yanacocha is a limited liability partnership organized under the laws of Peru with its principal place of business in Lima, Peru. Newmont's Mem., Ex. A (Declaration of Federico Schwalb Helguero dated February 24, 2003) ("Helguero Decl.") ¶ 3. Minera Yanacocha is a joint venture, which is 51.35% owned by Newmont USA, 43.65% owned by Compania de Minas Buenaventura, S.A., a mining company in Peru, and 5% owned by the International Finance Corporation ("IFC").*fn4 Am. Compl. ¶ 7. According to the Securities and Exchange Commission ("SEC"), "Newmont Peru is responsible for managing, conducting and controlling the day to day operations of Minera Yanacocha. . . ." Pls.' Opp., Ex. 14 at 51 (Buenaventura Mining Company's submission to the SEC for the fiscal year ending December 31, 2000).*fn5 Minera Yanacocha began its mining operations in 1993 and is a leading gold producer globally, with its mine located "47 km north of the city of Cajamarca at an altitude of 4,000 meters above sea level." Pls.' Opp., Ex. 4 (IFC Summary of Minera Yanacocha Project Information dated May 3, 1999). Minera Yanacocha received IFC funding in 1993, 1994, and 1999. Pls.' Opp., Ex. 5 (IFC Project Brief of Minera Yanacocha). In 1999 the IFC approved a $100 million loan to Minera Yanacocha. Id.

  Sodexho Alliance is a "societe anonyme, a French limited liability company, organized under the laws of France with its principal place of business in France." Memorandum in Support of Motion to Dismiss by Sodexho Alliance and Sodexho Peru ("Sodexho's Mem.") at 4. Sodexho Alliance owns stock in more than 200 subsidiaries in 74 countries, with operations in four primary business areas: Food and Management Services, Remote Sites, Service Vouchers and Cards, and River and Harbor Cruises. Pls.' Supp., Ex. 1 (Affidavit of Sian Herbert-Jones dated February 21, 2003) ("Herbert-Jones Aff.") ¶ 2. One of its subsidiaries is Sodexho Peru, a "sociedad anonima cerrada organized under the laws of Peru with its principal place of business in Lima, Peru", which was created to generate business in Peru. Sodexho's Mem. at 4.*fn6 Another subsidiary of Sodexho Alliance is Sodexho, Inc., which is incorporated in Delaware and provides food services at the Federal Bureau of Investigations headquarters in the District of Columbia at 935 Pennsylvania Avenue, N.W. Am. Compl. ¶ 17.

  Sodexho Marriott Services, Inc. ("SMS") is also a subsidiary of Sodexho Alliance which was formed on March 27, 1998. Pls.' Supp., Ex. 2 (Assistance Agreement between Sodexho Alliance and Marriott International, Inc. dated March 27, 1998). SMS is in the food service and facilities management business. Id. SMS's headquarters is located at 2900 Van Ness Street, N.W., in the District of Columbia. Pls.' Supp. at 2 n. 2. Pursuant to a Royalty Agreement between Sodexho Alliance and Marriott International, Sodexho Alliance authorized SMS to use its trade name in promotional material, advertisements and its logo. Pls.' Supp., Ex. 3 at 2, 4 (Royalty Agreement between Sodexho Alliance and Marriott International, Inc. dated March 27, 1998).

  Universal Sodexho, another subsidiary of Sodexho Alliance, was acquired in 1997 and is located in Harahan, Louisiana. Pls.' Opp., Ex. 1E (computer website printout pertaining to Universal Sodexho) and 1G (Dun & Bradstreet report concerning Universal Sodexho dated July 10, 2000). AGS conducted business directly with Universal Sodexho through April of 2000. Pls.' Opp., Ex. 1A (facsimile from Christophe Parent,*fn7 former Vice President of Remote Site Management for Sodexho Alliance, to defendant Andress dated April 26, 1999); Ex. 1B (facsimile from Christophe Parent to defendant Andress dated April 1, 2000); Ex. 1C (letter from defendant Andress to Barry Blackwell, President of Universal Sodexho, dated April 24, 2000); Ex. 1D (letter from defendant Andress to Barry Blackwell dated May 29, 2000); and Ex. 1E.

  According to Hoovers Online Business Network, another Sodexho Alliance subsidiary, Sodexho Pass, "operated river and harbor dinner cruises on a fleet of more than 40 boats in cities such as . . . Washington D.C." Pls.' Opp., Ex. 1H at 1 (Hoovers Online's company profile of Sodexho Alliance dated July 11, 2000).*fn8 Sodexho Alliance also entered into an International Joint Venture Agreement with the Corrections Corporation of America ("CCA") in 1994 to enhance the "prison management business in a geographic territory that specifically excluded the United States." Sodexho's Reply, Ex. C (Supplemental Affidavit of Sian Herbert-Jones dated September 17, 2003) ("Herbert-Jones Supp. Aff.") ¶ 3.*fn9 B. Factual Background

  The following are the facts alleged in the plaintiffs' amended complaint that gave rise to the filing of this cause of action: On January 24, 2000, Sodexho Peru and AGS entered into a three year confidentiality agreement pursuant to a November 3, 1999 joint venture agreement negotiated by Barry Blackwell, wherein AGS agreed to lease its Lima factory to Sodexho Peru to supply catering service to 3500 workers at the Antamina Mines ("Antamina") in Peru, which was operated by the Bechtel Corporation ("Bechtel"). Am. Compl. ¶¶ 69-70.*fn10 AGS granted more than 30 Sodexho Peru employees access to its facilities in Peru in order for Sodexho Peru to fulfill the terms of the parties' agreement. Id. ¶ 101. On January 12, 2000, Sodexho Peru issued numerous purchase orders to AGS for the acquisition of food products that would be served at Antamina. Id. ¶ 102. Shortly thereafter, in February 2000, Sodexho Peru issued additional purchase orders for AGS to supply food products totaling over $300,000. Id. ¶ 103. AGS ordered materials from numerous suppliers to satisfy the requirements of the purchase orders. Id.

  On February 19-20, 2000, 250 Antamina mine workers reported that they had contracted food poisoning. Id. ¶ 71. Sodexho Peru accused AGS for causing the illnesses and allegedly told AGS' customers and suppliers that AGS had "poisoned or caused" the Antamina mine workers "to be poisoned." Id. ¶ 115. On March 3, 2000, Bechtel conducted an independent investigation and concluded that the cause of the food poisoning was Sodexho Peru's improper handling and storage of food items after AGS had delivered the items to Sodexho Peru. Id. ¶ 71. Sodexho Peru allegedly "attempted to suppress" Bechtel's report and continued to blame AGS for the illnesses. Id. As a result of these accusations, AGS terminated Sodexho Peru's access to the Lima factory. Id. AGS contends that Sodexho Peru removed from the Lima facility "documents containing proprietary and confidential" information in violation of the three-year agreement of confidentiality the parties previously executed in January 2000. Id. The following year, on January 19, 2001, the Newmont defendants announced that they had awarded to AGS the catering and hospitality contract for Yanacocha.*fn11 Id. ¶ 33-34. "In preparation to deliver under the . . . contract, AGS provided a $1.2 million performance bond in the nature of a standby letter of credit." Id. ¶ 34. AGS also paid $700,000 to acquire "new culinary and kitchen equipment" imported from Europe, hired approximately 160 workers to service the Yanacocha site and conducted an on-site inventory of available raw materials. Id. ¶ 34.

  On March 23, 2001, AGS and Minera Yanacocha executed a three year contract, which would expire on May 14, 2004, whereby AGS would "provide food service, cleaning, laundry and maintenance services for workers and administrative staff of [Minera Yanacocha], Newmont USA, and Newmont Peru . . ." at the Yanacocha mines. Id. ¶ 35. AGS contends that Minera Yanacocha "agreed to seal, or accept and acknowledge, monthly invoices issued by AGS up to three months in advance" of when its services would be provided.*fn12 Id. ¶ 36. This enabled AGS to obtain cash advances so it could purchase the food items it needed to serve at the Yanacocha mines. Id. And this alleged undocumented arrangement permitted AGS to fulfill its obligations under the contract for fifteen months until June 2002. Id. ¶ 37. The first year of the contract was uneventful. Id. ¶ 37. In anticipation of expanding its operations at the mine as a result of the Newmont defendants' indication that they wanted AGS to service all of its 3,000 workers at the Yanacocha mines, rather than just the 1,100 workers initially covered by the contract, id. ¶ 38, AGS hired and trained additional employees. Id. ¶ 39 AGS also advised the Newmont defendants of its plans to build a new automated food production facility at or near the mines. Id. In addition, AGS began to establish facilities in Pennsylvania in anticipation of the expansion. Id. ¶ 40.

  However, in April 2002, the Newmont defendants started to complain about the quality of food service being provided by AGS. Id. ¶ 41. Consequently, AGS had the Yanacocha facilities inspected by an international inspection and certification agency. Id. ¶ 42. The Yanacocha facilities received an "A" rating from the inspection agency, scoring "92/100 for all categories inspected." Id. AGS alleges that during the same time period when the Newmont defendants began complaining about the quality of the food, they also allegedly told AGS' customers and suppliers that AGS was insolvent, financially distressed, or otherwise unable to adequately deliver catering services to its customers, including the workers at the Yanacocha mines. Id. ¶ 116. In June 2002, the Newmont defendants also refused to continue sealing advanced monthly invoices for the food, cleaning, and maintenance services, despite the alleged unwritten understanding that they would do so and the fifteen month course of conduct between the parties regarding the execution of the advances. Id. ¶ 43. AGS contends that the Newmont defendants took its new position to prevent AGS from being able to fulfill its contractual obligations. Id. AGS took exception to the changed procedure and requested that the matter be submitted to arbitration as provided for in the contract. Id. ¶ 44.

  In July 2002, the Newmont defendants communicated their concerns to AGS regarding AGS' financial ability to continue performing under the contract. Id. ¶ 45. In addition, they delayed or refused to pay outstanding invoices for past services already rendered, yet continued to accept AGS' services and goods while AGS continued to seek arbitration. Id. In August 2002, AGS offered to continue supplying the food and other services to the Yanacocha mines in partnership with the Compass Group, a financially sound industrial catering and hospitality company, but the Newmont defendants rejected this proposal. Id. ¶ 46. On August 23, 2002, the Newmont defendants terminated the contract and "effected execution upon a $510,000 standby letter of credit that AGS previously provided to secure its performance under the contract." Id. ¶ 47.*fn13 The execution of the standby letter of credit also "invoked execution against [another] $1.2 million letter of credit." Id. Then, on August 26, 2002, the Newmont defendants gave AGS only 24 hours to retrieve its food supplies and equipment from the Yanacocha mines, even though it had taken three months to install the equipment. Id. ¶¶ 94, 95.*fn14 The plaintiffs also allege that on August 26, 2002, the Newmont defendants kidnaped 160 AGS employees and coerced 155 of them to accept jobs with them at lower pay so the workers at the Yanacocha mines could continue to be serviced. Id. ¶ 58. Specifically, AGS contends that its employees were assembled at the Yanacocha mining camp and were falsely told by the Newmont defendants that AGS was bankrupt and had wrongfully terminated the March 23, 2001 contract and that Sodexho Peru would hire the AGS employees to perform their same jobs at the same pay and with identical benefits. Id. That same day, 160 AGS employees were allegedly placed on an AGS bus and detained until after midnight at a remotely located gas station situated on a road several miles between the Yanacocha mining camp and the city of Cajamarca. Id. The employees were purportedly held until they acknowledged their resignations as AGS employees in written letters prepared for them by the Newmont defendants. Id. The plaintiffs further allege that the employees were interrogated for the purpose of obtaining information concerning their salaries and AGS' operating procedures, as well as confidential internal business affairs information of AGS. Id. ¶ 76. Other AGS employees were allegedly forced, intimidated, or coerced into signing false statements relative to legal proceedings concerning the defendants' actions. Id. ¶ 59.*fn15 After August 26, 2002, the Newmont defendants hired Sodexho Peru to replace AGS. The Newmont defendants and Sodexho then allegedly refused to allow AGS to recover its food supplies warehoused at the Yanacocha mines, destroyed some of AGS' equipment and "allowed said equipment to lie in waste" without providing AGS with a reasonable opportunity to retrieve or protect its equipment and supplies. Id. ¶ 95.

  In December of 2002, the plaintiffs filed a complaint against all five defendants in this Court. The complaint asserted the following eight claims: (1) the defendants conspired to violate the Racketeering Influence Corrupt Practice Act ("RICO"), 18 U.S.C. § 1961 et seq. (2000), for the purpose of damaging the business of AGS, to kidnap and harm AGS employees, to influence the testimony of former AGS employees and to replace AGS with Sodexho Peru as the provider of the catering and other services at the Yanacocha mines; (2) false imprisonment of former AGS employees on August 26, 2002; (3) misappropriation of trade secrets by Sodexho Peru after AGS' 2001 contract was terminated in 2002; (4) intentional interference by the Sodexho defendants with contractual relationships of AGS and the Newmont defendants; (5) tortious interference by the Sodexho defendants with the prospective economic benefits AGS was to derive from the 2001 service contract; (6) conversion by the defendants of AGS' supplies and equipment that were located at the Yanacocha mines; (7) breach of contract by the Sodexho defendants; and (8) civil conspiracy by all of the defendants to replace AGS as the service provider at the Yanacocha mines. On January 21, 2003, the plaintiffs filed their Amended Complaint with this Court against all five defendants wherein a ninth claim for unfair competition under § 43(a) of the Lanham Act, 15 U.S.C. § 1125(a)(1)(B), was added. On February 27, 2003, the Newmont and Sodexho defendants filed separate motions to dismiss the amended complaint.

  Newmont moves to dismiss (1) pursuant to Federal Rule of Civil Procedure 12(b)(2) on the grounds that this Court lacks personal jurisdiction over Newmont USA, Newmont Peru and Minera Yanacocha; (2) pursuant to Federal Rule of Civil Procedure 12(b)(1) on the grounds that the RICO and the Lanham Acts do not vest subject matter jurisdiction in this Court because neither can be applied extraterritorially in this case; (3) pursuant to Federal Rule of Civil Procedure 12(b)(6) on the grounds that the plaintiffs' RICO and Lanham Act claims fail to state claims upon which relief can be granted; and (4) the non-federal claims if the RICO and Lanham Act claims are dismissed because without these federal claims the non-federal claims either must or should be dismissed.

  The Sodexho defendants move to dismiss (1) pursuant to Federal Rule of Civil Procedure 12(b)(2) on the grounds that this Court lacks personal jurisdiction over Sodexho Alliance and Sodexho Peru; (2) pursuant to Federal Rule of Civil Procedure 12(b)(1) on the grounds that this Court is without subject matter jurisdiction pursuant to both the RICO statute and the Lanham Acts; (3) pursuant to Federal Rule of Civil Procedure 12(b)(6) on the grounds that the plaintiffs fail to state claims upon which relief can be granted under both the RICO statute and the Lanham Acts; (4) pursuant to the doctrine of forum non conveniens; and (5) the claims of Jose Florian and the former AGS employees because they lack standing to bring a RICO claim. After filing their opposition to the defendants' motions to dismiss, the parties agreed to participate in jurisdictional discovery. Thereafter, the Newmont and Sodexho defendants submitted reply memoranda in support of their dismissal motions.

  II. Analysis

  A. Are the Defendants Subject to General or Personal Jurisdiction in the ...


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