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The American Center For Civil Justice v. Joshua M. Ambush

July 1, 2011

THE AMERICAN CENTER FOR CIVIL JUSTICE, PLAINTIFF,
v.
JOSHUA M. AMBUSH, ESQ., DEFENDANT.



The opinion of the court was delivered by: Paul L. Friedman United States District Judge

OPINION

On March 21, 2011, Magistrate Judge Deborah A. Robinson issued a memorandum opinion and order in which she denied the motion of plaintiff, the American Center for Civil Justice ("ACCJ"), for a stay of this case or, in the alternative, for a transfer to the United States District Court for the District of Puerto Rico. See American Ctr. for Civil Justice v. Ambush, Civil Action No. 09-0233, 2011 WL 971643, at *4 (D.D.C. Mar. 21, 2011). This matter now is before the Court on ACCJ's objection to that decision. Upon consideration of the parties' papers, the relevant legal authorities, and the entire record in this case, the Court concludes that Magistrate Judge Robinson's decision is neither clearly erroneous nor contrary to law. Consequently, the Court will deny ACCJ's objection, will affirm Magistrate Judge Robinson's decision, and will deny ACCJ's motion for a stay or, in the alternative, for a transfer.*fn1

I. BACKGROUND

Although the claims in this case are quite common - breach of contract, breach of fiduciary duty, tortious interference with a contract or business expectancy, among others - they ultimately arise out of an act of terrorism known as the Lod Airport Massacre. On May 30, 1972, three members of the Japanese Red Army, armed with submachine guns and hand grenades, opened fire on passengers awaiting their baggage at the Lod International Airport, located near Tel Aviv, Israel. See Compl. ¶ 14; see also Hernandez v. Air France, 545 F.2d 279, 281 (1st Cir. 1976).*fn2 In total, 24 people were killed and 78 were wounded, many of whom were Puerto Rican tourists on a pilgrimage trip to Israel. See Compl. ¶ 14; see also Hernandez v. Air France, 545 F.2d at 281.

ACCJ, "a non-profit organization dedicated to recompense for victims of terrorism," Compl. ¶ 1, and Joshua M. Ambush, an attorney, originally worked together to help pursue litigation on behalf of some of the Puerto Rican victims of this 1972 attack. See Compl. ¶ 18; Countercl. ¶ 5. In 2006, Mr. Ambush, on behalf of such victims and allegedly at the direction of ACCJ, filed suit in the United States District Court for the District of Columbia against those purportedly responsible for the attack; that case was captioned Franqui v. Syria, Civil Action No. 06-0734 (Walton, J.). Subsequently, one of the named defendants in Franqui v. Syria, the government of Libya, established a $1.8 billion fund to compensate victims of state sponsored terrorism, which included the 1972 attack. See Compl. ¶ 29; Countercl. ¶ 36. This case is the result of a dispute between ACCJ and Mr. Ambush primarily over compensation relating to disbursements from the $1.8 billion fund; it also involves various allegations of tortious behavior. See generally Compl.; Countercl.

As ACCJ describes it, to accomplish the organization's mission, it "enters into written agreements with victims of terrorism or the estate representatives of murdered victims (collectively, 'claimants')," whereby ACCJ "advances funds for litigation and retains law firms and individual lawyers to prosecute the claims on behalf of" such claimants. Compl. ¶ 8. In most instances, ACCJ "retains and supervises the efforts of counsel under a power of attorney granted by [claimants] to a representative of [ACCJ] and advances the money for expenses and experts as needed." Id. In exchange, the claimants agree to pay ACCJ "20% of the net proceeds of any recovery" and agree to reimburse ACCJ's legal fees and expenses. Id. ¶ 9 (quotations omitted). ACCJ emphasizes that, under the terms of these contracts, "payment of legal fees, expenses, and pledges will not exceed 20% of the claimants' recovery, enabling the claimant to retain 80% of any recovery." Id. ¶ 11; see also id. ¶ 9.

ACCJ alleges that, in 2001, it engaged Mr. Ambush to help pursue litigation on behalf of victims of the Lod Airport Massacre and tasked him "with traveling to Puerto Rico," where he had spent part of his childhood, "to negotiate agreements between [ACCJ] and Puerto Rican victims of the Lod Massacre." Id. ¶ 19; see Countercl. ¶ 22. Mr. Ambush negotiated agreements with ten Puerto Rican claimants: five claimant agreements were signed by representatives of estates seeking wrongful death damages; five more were signed by victims seeking compensation for physical injuries (collectively, the "Franqui claimants"). See Compl. ¶ 20; Countercl. ¶¶ 27, 28.

Subsequently, on April 21, 2006, Mr. Ambush - on behalf of victims of the Lod Airport Massacre, including the Franqui claimants - filed a complaint in Franqui v. Syria against, among others, the government of Libya. See Compl. ¶ 23; Countercl. ¶ 32. While Franqui v. Syria was pending, Libya entered into an agreement . . . whereby it would establish a fund in the amount of $1.8 billion . . . , to be administered by the United States Department of State, to compensate victims of terrorism sponsored by Libya. . . . The five Franqui wrongful death claimants would be entitled to approximately $10,000,000 each from the [f]und . . . . Additional sums of approximately $3,000,000 each [were] being made available . . . to compensate the personal injury claimants.

Compl. ¶ 29.

Thus, under the terms of the contracts that Mr. Ambush negotiated with the Franqui claimants, ACCJ potentially would be entitled to more than $12 million. And with millions of dollars now at stake, disputes between the parties arose over the issue of compensation: specifically, whether Mr. Ambush was entitled to a portion of ACCJ's total recovery or only his hourly fees. See Compl. ¶¶ 29-31; Countercl. ¶¶ 34, 37-43. Furthermore, ACCJ came to believe that Mr. Ambush "improperly induced each of the Franqui wrongful death claimants and four of the personal injury claimants to revoke the powers of attorney that they had granted to [ACCJ]," Compl. ¶ 36, and that Mr. Ambush "entered into agreements with [these] claimants for a percentage share of their recovery in excess of the 20% of their recovery that is payable to [ACCJ]." Id. ¶ 40.

The parties were unable to resolve their disputes and this litigation ensued. On February 6, 2009, ACCJ filed suit against Mr. Ambush in this Court. After amending its complaint twice, ACCJ asserts three claims against Mr. Ambush: it requests (1) a declaratory judgment that Mr. Ambush is not entitled to compensation beyond his hourly rate for work performed for ACCJ; (2) a claim for money damages for breach of fiduciary duty; and (3) a claim for damages for tortious interference with a contract or business expectancy arising out of the allegation that Mr. Ambush intentionally caused nine Franqui claimants to revoke the powers of attorney previously granted to ACCJ. See id. ¶¶ 55-65. ACCJ also seeks injunctive relief. See id. at 24-25. Mr. Ambush filed a counterclaim and subsequently filed an amended counterclaim with leave of court. See generally Countercl.; see also Minute Entry, Sept. 30, 2010. Mr. Ambush requests (1) a declaratory judgment; (2) a claim for money damages for breach of contract; and (3) a claim for damages under quantum meruit. See Countcl. ¶¶ 56-69. Mr. Ambush also appears to seek injunctive relief. See id. at 1.

Since the beginning of this case, "the often contentious litigation of this action has proceeded apace." American Ctr. for Civil Justice v. Ambush, 2011 WL 971643, at *1. Indeed, as Magistrate Judge Robinson described, [t]he litigation activity initiated by [ACCJ], in addition to the filing of the complaint . . . , includes - but is not limited to - the filing of an amended complaint; moving for a preliminary injunction; filing a second amended complaint; agreeing with [Mr. Ambush] to conduct discovery in two phases; moving for judgment on the pleadings with respect to [Mr. Ambush's] counterclaim; moving for [Magistrate Judge Robinson's recusal]; moving to compel discovery[;] and filing an answer to [Mr. Ambush's] amended counterclaim.

Id. (internal citations omitted). But on January 4, 2011 - after almost two years of vigorous litigation - ACCJ requested that this case be stayed or transferred in light of the pendency of Berganzo v. Ambush, Civil Action No. 10-1044, filed on January 25, 2010, in the United States District Court for the District of Puerto Rico. See Stay/Transfer Mot. at 1-3. There, certain Franqui claimants have filed suit against Mr. Ambush, seeking recovery of $2 million and alleging that

[they] were led to believe by Mr. Ambush, through misrepresentations and nondisclosure by him and/or his agents, on the need to sign a certain additional "retainer agreement" for fees in excess of what the [plaintiffs] had originally agreed to pay [ACCJ] . . . , who had retained and was paying Mr. Ambush his legal fees for ...


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