United States District Court, D. Columbia.
[Copyrighted Material Omitted]
For DIAG HUMAN S.E., Plaintiff: James Richard Schiffer, LEAD ATTORNEY, Hyman L. Schaffer, PRO HAC VICE, ALLEGAERT BERGER & VOGEL LLP, New York, NY.
For CZECH REPUBLIC-MINISTRY OF HEALTH, Defendant: Dean Albert Calland, LEAD ATTORNEY, Alana E. Fortna, Leonard Fornella, PRO HAC VICE, BABST, CALLAND, CLEMENTS & ZOMNIR, P.C., Pittsburgh, PA.
AMY BERMAN JACKSON, United States District Judge.
Plaintiff Diag Human filed this case against the Czech Republic Ministry of Health, seeking to enforce an August 4, 2008 arbitration award related to the Ministry's alleged interference into a business relationship between plaintiff and a third party. Compl. ¶ 9 [Dkt. # 1]. Plaintiff seeks to confirm the award pursuant to the Federal Arbitration Act (" FAA" ), 9 U.S.C. § § 201-08 (2012), which codifies the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (" New York Convention" ), June 10, 1958, 21 U.S.T. 2518, 330 U.N.T.S. 38. Compl. ¶ 1.
Defendant moved to dismiss the complaint on numerous grounds, including failure to state a claim under the New York Convention, the SPEECH Act of 2010, and forum non conveniens. See Def.'s Mot. to Dismiss Compl. [Dkt. # 16] at 2-3; Mem. of P. & A. in Supp. of Def.'s Mot. to Dismiss Compl. (" Def.'s Mem." ) [Dkt. # 17] at 11-37. But the Court cannot address these grounds for dismissal because it has no subject matter jurisdiction in this case. Plaintiff cites the New York Convention and two exceptions to the Foreign Sovereign Immunities Act (" FSIA" ) as its predicates for jurisdiction, Compl. ¶ 2, but after review, the Court finds that these provisions do not apply. Accordingly, the Court will dismiss this case sua sponte pursuant to Rule 12(h)(3) of the Federal Rules of Civil Procedure for lack of subject matter jurisdiction.
Plaintiff Diag Human is a corporation organized under the laws of the Principality of Liechtenstein. Compl. ¶ 6. The Czech Republic is a foreign state, and the Ministry of Health for the Czech Republic is an agency of the Czech Republic. Id. ¶ 7; Def.'s Mem. at 2. In the 1980s, Diag Human developed a business model that allowed " currency-deficient Eastern Bloc states to acquire modern blood plasma technology." Pl.'s Mem. of P. & A. in Opp. to Def.'s Mot. to Dismiss Compl. (" Pl.'s Opp." ) [Dkt. # 20] at 5. By 1989, it was one of the world's largest blood plasma suppliers with fourteen branches across Europe and in Canada and Singapore. Id. at 6. After the fall of the Berlin wall, plaintiff sought to enter the Eastern European market and began to develop its business in Czechoslovakia. Pl.'s Opp. at 6; Def.'s Mem. at 2.
One of plaintiff's principal commercial relationships was with the Danish company Novo Nordisk. Pl.'s Opp. at 6. Diag Human alleges that the Minister of Health for the Czech Republic sent a letter to Novo Nordisk regarding a public bidding tender for blood plasma products intended " to dissuade Novo Nordisk from continuing to do business with Diag." Pl.'s Opp. at 7; Def.'s Mem. at 29. It contends that the letter contained statements expressing
concerns about Diag Human's business ethics and credibility, and that this letter caused Novo Nordisk to discontinue its business relationship with Diag Human. Pl.'s Opp. at 7; Def.'s Mem. at 29. Plaintiff asserts that the collapse of its business in the Czech Republic was a direct result of the termination of its relationship with Novo Nordisk. Compl. ¶ 9; Pl.'s Opp. at 8; Def.'s Mem. at 2.
In 1996, Diag Human commenced an action against defendant in the Prague Commercial Court, claiming defamation and unfair competition, seeking damages including lost profits. Pl.'s Opp. at 8, 38. The parties agreed to arbitrate their dispute, and on September 18, 1996, they entered into a written arbitration agreement (" Arbitration Agreement" ). Def.'s Mem. at 2; Pl.'s Opp. at 8; Arbitration Agreement, Ex. B to Compl. [Dkt. # 1-2] at 2-3. The Arbitration Agreement sets forth procedures for the arbitration process, covering such matters as the selection and payment of the arbitrators and the location of the proceedings. Arbitration Agreement at 2-3.
On August 4, 2008, the arbitration panel decided in favor of plaintiff, finding that the Czech Republic had caused commercial loss to Diag Human. Pl.'s Opp. at 10; Def.'s Mem. at 3. The final award (" Arbitration Award" ) directed defendant to pay Diag Human approximately $650 million in damages and interest. Pl.'s Opp. at 10. On August 22, 2008, defendant requested review of the award pursuant to Article V of the Arbitration Agreement. Def.'s Mem. at 4; Pl.'s Opp. at 13. A dispute concerning the composition of the arbitration review panel lasted for more than two years, but in 2013, it was finally resolved, and a review panel was convened. Def.'s Mem. at 4-7; Pl.'s Opp. at 13-16.
While the dispute regarding the appointment of the arbitration review panel was pending in the Czech courts, plaintiff applied to this Court and to the courts of Austria, France, the United Kingdom, Luxembourg, and Switzerland for orders to enforce the Arbitration Award under the New York Convention. Def.'s Mem. at 7; Pl.'s Opp. at 18-19. To date, it appears that no court has ordered enforcement of the award.
STANDARD OF REVIEW
" Federal courts are courts of limited jurisdiction. They possess only that power authorized by Constitution and statute, which is not to be expanded by judicial decree. It is to be presumed that a cause lies outside this limited jurisdiction, and the burden of establishing the contrary rests upon the party asserting jurisdiction." Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377, 114 S.Ct. 1673, 128 L.Ed.2d 391 (1994) (citations omitted). In addition, " '[i]t is axiomatic that subject matter jurisdiction may not be waived, and that courts may raise
the issue sua sponte. '" NetworkIP, LLC v. FCC,548 F.3d 116, 120, 383 U.S.App.D.C. 310 (D.C. Cir. 2008), quoting Athens Cmty. Hosp., Inc. v. Schweiker,686 F.2d 989, 992, 222 U.S.App.D.C. 363 (D.C. Cir. 1982). Indeed, a federal court must raise the issue because it is " forbidden -- as a court of limited jurisdiction -- from acting beyond [its] authority." Id., citing Akinseye ...