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Sea Search Armada v. the Republic of Colombia

October 24, 2011

SEA SEARCH ARMADA,
PLAINTIFF,
v.
THE REPUBLIC OF COLOMBIA,
DEFENDANT.



The opinion of the court was delivered by: James E. Boasberg United States District Judge

MEMORANDUM OPINION

The Complaint in this case reads like the marriage between a Patrick O'Brian glorious-age-of-sail novel and a John Buchan potboiler of international intrigue. According to the narrator, in September 1984, Plaintiff Sea Search Armada entered an agreement with the Republic of Colombia to recover sunken treasure from the site of an ancient shipwreck. Under the agreement, SSA would receive a specified share of the booty in exchange for retrieving the valuables from the ocean floor. At Colombia's request, SSA disclosed the precise location of the shipwreck, but afterward Colombia refused to permit SSA to perform full salvage operations at the designated site. The Colombian Parliament then enacted a law giving Colombia all rights to the treasure from the shipwreck site. In 1989, SSA filed suit in Colombia challenging the constitutionality of the new law. Although SSA prevailed, Colombia refused to honor the ruling of the Colombia Supreme Court and permit SSA access to the site of the shipwreck.

In 2010, SSA filed the instant suit against Colombia for breach of contract and conversion. SSA also sought recognition and enforcement of the Colombia Supreme Court's ruling that SSA is entitled to half the treasure recovered from the shipwreck. Colombia has now moved to dismiss SSA's claims for lack of subject-matter jurisdiction, insufficient service of process, and failure to state a claim upon which relief may be granted. Because statutes of limitations bar the first two counts and because no specific money judgment exists to be enforced, the Court will dismiss the case without needing to reach the other issues.

I.Background

According to the rather prolix Complaint, which must be presumed true for purposes of this Motion, a sunken ship called the San Jose, with an estimated $4 billion to $17 billion of coins and bullion, is located on the Colombian Continental Shelf at a depth of 1,000 feet. See Compl., ¶¶ 5-6. The sailing vessel was sunk by the British navy in 1708, and Plaintiff's archival research indicates that it was carrying cargo from the Spanish Viceroyalty of Teirra Firma. Id., ¶ 5. In 1980, the Direccion General Maritima -- a Colombian agency that regulates maritime activity -- authorized the Glocca Mora Co. to explore the Colombian Continental Shelf for shipwrecks. Id., ¶¶ 7-8. GMC located what it believed to be the San Jose in 1981, and GMC and Colombia subsequently agreed that GMC would receive 35% of the treasure recovered from the site. Id., ¶¶ 9-10.

Sea Search Armada was then assigned GMC's rights under the agreement, id., ¶¶ 10-11, and in 1984, Colombia agreed that SSA would be entitled to 35% of the property salvaged from the San Jose. Id., ¶¶ 23-24. Colombia, however, refused to sign a written contract with SSA and denied SSA permission to perform full salvage operations at the San Jose site. Id., ¶¶ 10-11. Soon thereafter, the Colombian Parliament passed a law giving Colombia all rights to treasure recovered from the San Jose site, thereby extinguishing any rights SSA had. Id., ¶ 12. Under the new law, SSA would only be entitled to a 5% finder's fee, which would be taxed at a rate of 45%. Id., ¶¶ 12, 24.

Perceiving a clear breach of its agreement, SSA sued Colombia in 1989, challenging the constitutionality of the law that gave Colombia all rights to treasure salvaged from the San Jose. Id., ¶ 13. The Colombia Constitutional Court declared the law unconstitutional and void in March of 1994. Id., ¶ 14. Shortly thereafter, the Circuit Court of Baranquilla found that SSA and Colombia owned the treasures from the San Jose in equal 50% shares. Id. The Circuit Court's judgment was ultimately upheld by the Supreme Court of Colombia on July 5, 2007. Id., ¶ 16.

Although this history seems relatively straightforward, Plaintiff's Complaint then careens off the tracks. It spends 30 pages chronicling "Colombia's Bad Faith Actions Against SSA" from 1980-2010. Among other things, Plaintiff alleges that Colombia secretly engaged in a corrupt deal with Swedish businesses to award them a contract to salvage the San Jose following a sham bidding process. Id., ¶¶ 27, 30-33. It quotes Swedish and Colombian newspaper headlines, such as "The Swedes Will Execute the Recovery of the Galleon" and "Swedish Firms (were) Promised Commissions." Id., ¶¶ 33-34. It also details letters exchanged between a U.S. Congressman and the Colombian Secretary General. Id., ¶¶ 32, 37. In one such exchange, the Secretary General wrote that "Colombia does not make secret agreements," and Plaintiff, in turn, alleges that the Secretary General's "mendacity is stunning for chuzpah [sic]." Id., ¶ 37. A litany of other irrelevant details follows.

The Complaint in this case was filed on December 7, 2010, and includes three counts: (1) breach of contract, (2) conversion, and (3) recognition and enforcement of a foreign judgment. The Republic of Colombia has now moved to dismiss.*fn1

II.Legal Standard

Federal Rule of Civil Procedure 12(b)(6) provides for the dismissal of an action where a complaint fails to "state a claim upon which relief can be granted." When the sufficiency of a complaint is challenged under Rule 12(b)(6), the factual allegations presented in it must be presumed true and should be liberally construed in plaintiff's favor. Leatherman v. Tarrant Cty. Narcotics & Coordination Unit, 507 U.S. 163, 164 (1993). Although the notice pleading rules are "not meant to impose a great burden on a plaintiff," Dura Pharm., Inc. v. Broudo, 544 U.S. 336, 347 (2005), and "detailed factual allegations" are not necessary to withstand a Rule 12(b)(6) motion, Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007), "a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face." Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009) (internal quotation omitted). Plaintiff must put forth "factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. Though a plaintiff may survive a 12(b)(6) motion even if "recovery is very remote and unlikely," Twombly, 550 U.S. at 555 (citing Scheuer v. Rhodes, 416 U.S. 232, 236 (1974)), the facts alleged in the complaint "must be enough to raise a right to relief above the speculative level." Id. at 555.

III.Analysis

In its Motion, Colombia contends that Plaintiff's claims should be dismissed on three grounds. First, it argues that the Court lacks subject-matter jurisdiction because Colombia is immune from suit in the United States under the Foreign Sovereign Immunities Act, 28 U.S.C. ยงยง 1330, 1602-11. Mot. at 4-13. Second, it maintains that the case should be dismissed under Rules 12(b)(1) and 12(b)(5) for lack of personal jurisdiction and insufficient service of process. Id. at 13-17. Finally, it moves to dismiss under Rule 12(b)(6) for failure to state a claim upon which relief may be granted. Id. at 17. In particular, Defendant argues that the first two counts are barred by the applicable statutes of limitations, id. at 17-19, and that the remaining count is not cognizable under the District of Columbia's Uniform Foreign-Money Judgments Recognition Act. Id. at 19-21. As the Court agrees that the ...


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