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MBI Group, Inc. v. Credit Foncier du Cameroun

June 23, 2009

MBI GROUP, INC., ET AL., PLAINTIFFS,
v.
CREDIT FONCIER DU CAMEROUN, ET AL., DEFENDANTS.



The opinion of the court was delivered by: John D. Bates United States District Judge

MEMORANDUM OPINION

Plaintiffs MBI Group, Inc. and Atlantic Group, SCI (collectively, "plaintiffs") filed suit against Credit Foncier du Cameroun ("CFC") and the Republic of Cameroon (collectively, "defendants") seeking damages for breach of contract, fraud, misrepresentation, intentional interference with contract, and misappropriation of trade secrets and proprietary information. The controversy arises out of an agreement that plaintiffs would construct a series of affordable housing projects in Cameroon, with CFC providing the land and funding for that initiative. As plaintiffs would have it, the deal was scuttled by CFC and Cameroon when plaintiffs refused to deliver bribes demanded by certain officials within the government of Cameroon. Defendants deny the accusations of bribery and insist that there was no binding agreement to begin with. On September 26, 2007, defendants filed a motion to dismiss, arguing that this case should be dismissed on forum non conveniens grounds. They also claimed that this Court lacked personal and subject matter jurisdiction, and that defendants were immune under the Foreign Sovereign Immunities Act, 28 U.S.C. §§ 1602-1611. Plaintiffs filed a motion for jurisdictional discovery, and both motions were fully briefed.

Thereafter, the Court granted defendants' motion on forum non conveniens grounds. See MBI Group, Inc. v. Credit Foncier du Cameroun, 558 F. Supp. 2d 21 (D.D.C. 2008). The Court applied a three-step test, first determining that an adequate alternative forum existed and then balancing private and public interest factors. See id. at 28-36. The Court considered plaintiffs' argument that the Cameroonian courts would not provide plaintiffs with a fair hearing. Although the Court found plaintiffs' argument unavailing, see id. at 28-31, "in an abundance of caution and to avoid any potential undue prejudice to plaintiffs, the Court . . . condition[ed] dismissal upon defendants' submitting to jurisdiction in Cameroon and on the Cameroonian courts' acceptance of the case," id. at 31. The Court weighed the private and public interest factors, see id. at 32-36, concluding that "[t]he contacts with the United States are simply insufficient to overcome the powerful showing that Cameroon is the far more appropriate forum to hear this matter," id. at 36. The Court did not address defendants' other jurisdictional arguments and denied plaintiffs' motion for jurisdictional discovery. See id.

Two weeks later, on June 24, 2008, plaintiffs filed a motion to vacate the dismissal because the Cameroonian courts had not accepted the case. According to plaintiffs, they submitted their case for filing in Cameroon on June 24, 2008 and were informed that they were required to pay a fee of five percent of the amount claimed for the case to be "accepted for filing." Decl. of Jules Nkana ¶ 1, 4 (attached as Ex. A to Pls.' Renewed Mot. to Vacate Dismissal [dkt. ent. # 54]). Because plaintiffs claimed damages of $500 million -- as they did in their complaint before this Court -- they were required to pay a fee of nearly $25 million for the case to proceed. Rather than challenging the filing fee as excessive or erroneous, plaintiffs sought to vacate this Court's order that required them to utilize the Cameroonian court.

Defendants countered that the $25 million fee had been erroneously calculated by the Cameroonian court's clerk. See Defs.' Opp'n at 6 [dkt. ent. # 28]. They maintained that such fees are subject to court review and that plaintiffs had made no effort to secure such review. And although plaintiffs did not seek review of the filing fee, defendants did -- and the Cameroonian High Court scheduled a hearing on this issue for July 23, 2008. Plaintiffs did not appear for the hearing in Cameroon on July 23, and the hearing was adjourned until August 27, 2008. Defs.' Sur. at 8 [dkt. ent. # 39]. Plaintiffs again did not appear, and the hearing was again adjourned, this time to October 22, 2008. Id.

On October 20, 2008, this Court deferred ruling on plaintiffs' motion to vacate dismissal but cautioned that plaintiffs were required to prosecute their action in Cameroon in good faith:

Plaintiffs' refusal to participate is not the same as the Cameroonian courts' refusal to accept the case. Implicit in this Court's Order was a command that plaintiffs prosecute their claims in the Cameroonian courts in good faith. Whatever the merits of plaintiffs' arguments that the deposit procedures will ultimately bar the Cameroonian courts' acceptance of the case, the High Court has, in fact, provided plaintiffs with an opportunity to be heard. Plaintiffs cannot ignore that opportunity and expect this Court to find that the Cameroonian courts do not provide an adequate alternative forum. If plaintiffs participate in the Cameroonian proceedings in good faith and the High Court refuses to accept the case without payment of a prohibitively large deposit, then this Court will further consider plaintiffs' motions to vacate and reconsider.

October 20, 2008 Order at 2 [dkt. ent. # 46].

Pursuant to this Court's order, plaintiffs did appear at the October 22, 2008 hearing in Cameroon. After appearing at the hearing, plaintiffs filed a submission with the Cameroonian High Court on November 11, 2008. But rather than seeking to persuade the Cameroonian High Court that its case could proceed in Cameroon, plaintiffs asked the court to find, inter alia, "that bringing a legal proceeding is the exclusive business of the plaintiff within a specific formal legal framework and at his choice and not that of the defendant." See Pls.' Submissions to High Court (attached as Ex. A to Defs.' Feb. 19, 2009 Status Rpt. [dkt. ent. # 48]). Defendants, meanwhile, argued that the High Court could review and reduce the clerk's filing fee under Cameroonian law. See Defs.' Submissions to High Court (attached as Ex. G to Pls.' Rep. [dkt. ent. # 58]). The Cameroonian High Court heard oral argument from the parties on December 10, 2008.

On January 14, 2009, the Cameroonian High Court delivered judgment orally in open court, "[d]eclar[ing] the writ by plaintiffs inadmissible for non-payment of court deposit and non-return of the original copy of the writ of summons." Ex. B to Defs.' Feb. 19, 2009 Status Rpt. [dkt. ent. # 48]. On March 31, 2009, the High Court issued its written opinion. See Ex. E to Pls.' Renewed Mot. to Vacate [dkt. ent. # 54]. The High Court reiterated its earlier oral conclusion, finding that "in spite of the numerous postponements . . . , the plaintiffs abstained from producing the original of the summons, the introductory act for a trial by which they drew the defendants before this Court, and to pay the required deposit." Id. at 44. Hence, the High Court "declare[d] the action of the petitioner inadmissible for failure to make a deposit and to file the original of the summons." Id.

Now before the Court is plaintiffs' renewed motion to vacate dismissal based on the Cameroonian High Court's dismissal of plaintiffs' case. Plaintiffs also ask this Court to reconsider its analysis of the private and public interests at stake. The motion is fully briefed and ripe for resolution.

ANALYSIS

I. Adequacy of Cameroonian Courts

Implicit in this Court's dismissal on forum non conveniens grounds was a command that plaintiffs prosecute their action in Cameroon in good faith. See October 20, 2008 Order at 2; see also In re Bridgestone/Firestone, 420 F.3d 702, 705-07 (7th Cir. 2005) (holding that a plaintiff's failure to prosecute its case in Mexico in good faith, thus resulting in dismissal of its case by the Mexican courts, would not warrant reopening a case dismissed on forum non conveniens grounds). Here, once it became apparent to this Court that plaintiffs were ignoring legal options available to them in Cameroon, the Court explicitly cautioned that plaintiffs could not expect their complaints about the deficiencies of the Cameroonian judicial system to carry the day absent a good faith prosecution of their action there. See October 20, 2008 ...


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