MEMORANDUM OPINION
BERYL
A. HOWELL CHIEF JUDGE.
Africa
Growth Corporation (“AFGC”), a U.S.-based,
publicly-listed corporation which, through its subsidiaries,
builds and manages apartments in Angola's capital city,
Luanda, initiated this suit against five Angolan government
officials and the Republic of Angola to recover damages for
an alleged series of brazen fraudulent actions culminating in
the outright seizure and ongoing occupation of AFGC's
properties by a General of the Angolan military, his son, and
their “heavily-armed security detail.” Angolan
courts have enjoined two of the defendants, Angolan General
Antonio Francisco Andrade (“General Andrade”),
and his son, Angolan Army Captain Miguel Kenehele Andrade
(“Captain Andrade”), from occupying AFGC's
properties-but to no avail. General Andrade and Captain
Andrade have allegedly claimed “immunity” from
these Angolan court orders, and the police, for their part,
have been of limited service in enforcing the orders,
allegedly because the police have been directed by none other
than General Andrade's own daughter, Angolan State
Prosecutor Natasha Andrade Santos (“Prosecutor
Andrade”), not to enforce the Angolan court's
orders.[1]
The
issue now before the Court is whether default judgment should
be entered against Angola and the five Angolan government
officials due, with respect to Angola, its eight-month delay
in responding to plaintiff's complaint, and with respect
to the individual defendants, their continuing failure to
respond. The plaintiff filed the Complaint, ECF No. 1, on
November 15, 2017, and effectuated service on the defendants,
on December 26, 2017, by sending a copy of the summons and
complaint and a notice of suit, pursuant to the procedure for
service upon foreign states established by the Foreign
Sovereign Immunities Act (“FSIA”), 28 U.S.C.
§ 1608(a)(3). See Return of Service/Affidavit,
ECF No. 20.
An
answer to plaintiff's Complaint was due by February 24,
2018, for any defendant on whom service was properly made,
which, as discussed below, is at issue for the individual
defendants. No. answer was timely filed. Shortly after this
deadline, on February 27, 2018, the plaintiff filed an
Affidavit in Support of Default, ECF No. 21, and the Clerk of
Court entered Default, ECF No. 22, on March 2, 2018. The
plaintiff then, on March 15, 2018, filed a Motion for Default
Judgment (“Pl.'s Mot.”), ECF No. 23. Nearly
six months later, on September 4, 2018, Angola filed a Motion
to Set Aside Default (“Def.'s Mot.”), ECF No.
28. For the reasons set forth below, the plaintiff's
motion for entry of default judgment is denied as to all
defendants, and Angola's motion to set aside the default
entered by the Clerk of the Court is granted.
I.
BACKGROUND
AFGC
operates in Angola through three subsidiaries: AGPV Lda
(“AGPV”), Illico Lda (“Illico”), and
Maximilio Lda (“Maximilio”) (collectively,
“AFGC's Subsidiaries”). Compl. ¶ 31, 35.
As alleged in the Complaint, beginning in January 2015, AFGC
invested in four “high-end apartment complexes”
in Luanda that were managed by AFGC's Subsidiaries.
Id. ¶¶ 2, 27, 29.[2] According to the plaintiff,
the defendants' conspiracy to convert AFGC's
Subsidiaries' assets began in October 2016 when General
Andrade “fraudulently prepare[d] Powers of Attorney,
which purported to appoint one of [General Andrade's]
associates as the shareholder representative of two of
Illico's parent companies, [AGPV] and [Maximilio], but in
truth and in fact, were forged at the direction of General
Antonio Andrade.”[3] Id. ¶ 35; see
also Decl. of Brenton Kuss (“Kuss Decl.”)
¶ 13, ECF No. 23-2. General Andrade next had the
“current and lawful director and Gerente
(General Manager) of Illico” dismissed, and the General
himself “unlawfully appoint[ed]” “as the
director and Gerente of Illico, with signature
authority over the Illico bank accounts.” Id.
¶ 36. The plaintiff claims these acts of
“corporate fraud” were not immediately discovered
because “they were not properly recorded and documented
in the official corporate registry of Angola, which is
administered by the Angolan Guichet Unico de Empresa
(“GUE”), a division of the Angolan Ministry of
Justice.” Id. ¶ 37.
Once in
control of Illico's bank accounts, General Andrade
allegedly transferred money from Illico to his own
privately-owned companies. Id. ¶ 40. The
plaintiff alleges that he “then intimidated the AFGC
staff with threats of violence and demanded that they
recognize him as the owner and managers of” AFGC's
assets, and “demanded that the local AFGC staff cut off
all contact with AFGC senior management going forward.”
Id. ¶ 41. In the ensuing power struggle, AFGC
claims it was able to briefly reinstall its lawful director
and Gerente of Illico in July 2017, but that General
Andrade conspired with his son, Captain Andrade, his
daughter, Prosecutor Andrade, and GUE to have himself
unlawfully reappointed, in August 2017, as director and
Gerente of AFGC's Subsidiaries, and moreover,
amended AFGC's Subsidiaries' bylaws “to name
himself as the sole legal representative and signatory,
” thereby “assum[ing] full and complete
control” of AFGC's Subsidiaries. Id.
¶ 46-50.
When
AFGC representatives arrived in Angola in August 2017 to
reassert control over AFGC's Subsidiaries'
properties, they encountered General Andrade's
“heavily-armed security detail, ” which forced
them “to withdraw from their own properties.”
Id. ¶¶ 51-56. The plaintiff alleges that
“the Angolan police refused (at the express direction
of [Prosecutor Andrade]) to take any action, ”
“thereby aiding and supporting the ongoing conspiracy
… to deprive AFGC of lawful ownership and possession
of” its properties. Id. ¶ 58. As of the
filing of plaintiff's Complaint, the “heavily-armed
security detail continue[d] [] to patrol the buildings
… with exposed AK 47 assault rifles.”
Id. ¶ 61.
The
plaintiff's allegations also implicate the Attorney
General of Angola, General Joao Maria de Sousa
(“Attorney General de Sousa”), who allegedly
conspired with Prosecutor Andrade “to prevent
legitimate law enforcement action from being taken in support
of AFGC, ” id. ¶ 81, and the Governor of
the Province of Luanda, General Francisco Higino Lopes
Carneiro (“Governor Carneiro”), who allegedly
acted “in furtherance of the unlawful conspiracy,
” id. ¶ 99, by signing and approving
“the fraudulent transfer of the surface rights”
to AFGC's Subsidiaries' properties “through a
transfer of title from Illico to Prosecutor Natasha Andrade,
” id. ¶ 97.
Finally,
the plaintiff claims that Angola itself “has aided and
abetted in the unlawful conspiracy by enabling [General
Andrades, Captain Andrade, and Prosecutor Andrade (the
“Andrades”)] to convert AFGC's property
through acts of fraud, illegally asserted control, and
intimidation, ” and “has fostered an expectation
of total impunity on the part of the [Andrades], who have had
no reason to fear they will be brought to judgment in Angola
for their bad acts.” Id. ¶ 120.
The
plaintiff apparently obtained from the Angolan Provincial
Court “a written verdict and opinion, dated November
23, 2017 (the “November 23 Order”), ” in
which “the Angolan Court specifically held” that
AFGC's Subsidiaries' assets “had been taken
‘unlawfully and by exercising violence' against
AFGC's representatives in Angola.” Pl.'s Mem.
Supp. Mot. Default Judgment (“Pl.'s Mem.”) at
13, ECF No. 23-1. Nonetheless, “the Angolan government
took no action to enforce the November 23 Order.”
Id. Accordingly, “[o]n December 19, 2017, an
amended verdict and decision of the Angolan Provincial Court
(the “December 19 Order”) was issued, which
reaffirmed the unlawful and violent nature of the
[Andrades'] conduct and ordered the Angolan police to
return to the [properties] to evict the [Andrades].”
Id. at 14. Allegedly, the police enforced the
December 19 Order, but “once the police departed,
” the Andrades returned. Id. at 14.
Thus,
as of March 15, 2018, the plaintiff alleges that it
“remains: (i) without possession or control of
[AFGC's Subsidiaries' properties]; (ii) without
recorded and secured legal title to [AFGC's
Subsidiaries' properties] returned and cleared of all
fraudulently obtained encumbrances on title; (iii) without
possession or control of [AFGC's Subsidiaries]; (iv)
without possession or control of the corporate bank accounts
of [AFGC's Subsidiaries]; and (v) without the ability to
collect rental income from [AFGC's Subsidiaries'
properties]. Id. at 14. In the ten-count Complaint,
alleging expropriation in violation of International Law
(Count I), violations of the Racketeer Influenced and Corrupt
Organizations (“RICO”) Act, 18 U.S.C. §
1962(c), (d) (Counts II, III), conspiracy to commit fraud and
conversion, and conversion (Count IV, VII), tortious
interference with contract (Count V), defamation (Count VI),
accounting (Count IX), and an Action to Impose Constructive
Trust (Count X), AFGC seeks “damages in excess of US$55
million owed to AFGC arising from Defendants' unlawful
conspiracy, expropriation, and outright theft of AFGC's
properties and rental income in Angola.”
Compl. ¶ 1.
II.
LEGAL STANDARD
The
Federal Rules of Civil Procedure “provide for default
judgments . . . [to] safeguard plaintiffs ‘when the
adversary process has been halted because of an essentially
unresponsive party, '” and to protect
“‘the diligent party . . . lest he be faced with
interminable delay and continued uncertainty as to his
rights.'” Mwani v. bin Laden, 417 F.3d 1,
7 (D.C. Cir. 2005) (quoting Jackson v. Beech, 636
F.2d 831, 836 (D.C. Cir. 1980)). Pursuant to Federal Rule of
Civil Procedure 55(a), “[w]hen a party against whom a
judgment for affirmative relief is sought has failed to plead
or otherwise defend, and that failure is shown by affidavit
or otherwise, the clerk must enter the party's
default.” Fed.R.Civ.P. 55(a); see 10A Charles
Alan Wright et al., Federal Practice and Procedure §
2682 (4th ed. 2018) (“When the prerequisites of Rule
55(a) are satisfied, an entry of default may be made by the
clerk without any action being taken by the court . . . [as
long as] the clerk [has] examine[d] the affidavits filed and
[found] that they meet the requirements of Rule
55(a).”). “[A]n entry of default is merely a
formal matter and does not constitute the entry of
judgment.” Id.
Rule 55
further provides that a “court may set aside [a
clerk's] entry of default for good cause.”
Fed.R.Civ.P. 55(c). The D.C. Circuit has made clear that
courts, when exercising their discretion under Fed.R.Civ.P.
55(c), should consider “‘whether (1) the default
was willful, (2) a set-aside would prejudice plaintiff, and
(3) the alleged defense was meritorious.'”
Mohamad v. Rajoub, 634 F.3d 604, 606 (D.C. Cir.
2011) (quoting Keegel v. Key West & Caribbean
Trading Co., 627 F.2d 372, 373 (D.C. Cir.
1980)). The three factors articulated in Keegel are
not exclusive, however, as the “good cause”
standard of Rule 55(c) “is designed to empower courts
to consider the equities that specially arise in a given
case.” Gilmore v. Palestinian Interim
Self-Government Authority, 843 F.3d 958, 966 (D.C. Cir.
2016). The D.C. Circuit has also “stressed a foreign
sovereign's interest-and [the Court's] interest in
protecting that interest-in being able to assert defenses
based on its sovereign status, ” FG Hemisphere
Associates, LLC v. Democratic Republic of Congo, 447
F.3d 835, 838 (D.C. Cir. 2006), because
“‘[i]ntolerant adherence to default judgments
against foreign states could adversely affect this
nation's relations with other nations and undermine the
State Department's continuing efforts to encourage
foreign sovereigns generally to resolve disputes within the
United States' legal framework, '” id.
at 838-839 (quoting Practical Concepts Inc. v. Republic
of Bolivia, 811 F.2d 1543, 1551 n.19 (D.C. Cir. 1987)).
III.
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