Celestin v. Martelly

524 F.Supp.3d 43

Odilon S. CELESTIN, Widmir Romelien, Marie Lucie St Vil, Gorettie St Vil, Jeannette Valeus, Guetty Felin, Herve Cohen, and on behalf of all others similarly situated, Plaintiffs,

v.Michel Joseph MARTELLY, Jocelerme Privert, Jovenel Moise, the Western Union Company, d/b/a Western Union Holdings, Inc., Western Union Financial Services, Inc., and through other subsidiaries and affiliates, Caribbean Air Mail, Inc., d/b/a Cam, Unibank, S.A., Unitransfer USA, Inc., Unigestion Holding, S.A., d/b/a/ Digicel Haiti, Natcom S.A., and the Government of Haiti, Defendants.

18-CV-7340 (LDH) (PK)

United States District Court, E.D. New York.

Signed March 10, 2021

Marcel Pierre Denis, Denis Law Group, PLLC, Brooklyn, NY, Rodney R. Austin, Rodney R. Austin PLLC, Fresh Meadows, NY, for Plaintiff Odilon S. Celestin.

Marcel Pierre Denis, Denis Law Group, PLLC, Brooklyn, NY, for Plaintiffs Widmir Romelien, Goldie Lamothe-Alexandre, Vincent Marazita.

Bertrand Rolf Madsen, Madsen Law P.C., New York, NY, for Defendants Michel Joseph Martelly, Jocelerme Privert, Jovenel Moise, The Government of Haiti.

Macx L. Jean-Louis, New York, NY, for Defendant Natcom S.A.

CORRECTED MEMORANDUM AND ORDER

LaSHANN DeARCY HALL, United States District Judge:

Plaintiffs, on behalf of putative nation-wide and state-specific classes, bring claims against Defendants Caribbean Air Mail, Inc., Unibank S.A., Unitransfer USA Inc., Unigestion Holding, S.A., d/b/a Digicel Haiti, and Western Union Company (collectively "Defendants") for violations of federal antitrust laws, and various state laws.¹ Defendants move pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure to dismiss the case in its entirety under the act of state doctrine and alternatively, pursuant to the doctrine of forum non conveniens.²

BACKGROUND³

Plaintiffs allege that in April 2011, Michel Joseph Martelly, the then-President-elect of Haiti, devised a "wide-ranging scheme" to impose fees and fix prices on money transfers, food remittances, and international calls made to and from Haiti. (2d Am. Compl. ("SAC") ¶¶ 3, 4, 72, 170, 221, ECF No. 62.) While Martelly is alleged to be the "principal architect and ringleader" of the conspiracy, Jocelerme Privert and Jovenel Moise, who each succeeded Martelly, "adopted as his own the acts and conducts [sic] of his predecessor" and continued in perpetrating the scheme. (Id. ¶¶ 170, 197, 206.)

The scheme allegedly began before Martelly took the presidential oath. (Id. ¶ 171.) According to the complaint, Martelly contacted telecommunication companies, including Defendant Digicel Haiti, and requested that they add a $0.05 fee per minute on all phone calls originating from the United States and Europe. (Id. ) They agreed. (Id. ) Martelly also met with money transfer operators and commercial banks, including Defendants Caribbean Air Mail, Inc., Unibank S.A., Unitransfer USA Inc., and Western Union, to strike an anticompetitive agreement to illegally raise the fee to remit money to Haiti by $1.50. (Id. ¶ 174.) Ultimately, Defendants each colluded with Martelly to draft three Haitian governmental instruments to effectuate Martelly's scheme: two circulars issued by the Central Bank of Haiti (the "BRH"), which together imposed a $1.50 fee on money transfers and food remittances made to Haiti from the United States, Canada, Turks and Caicos, and the Bahamas; and a presidential order, which mandated a $0.05 per-minute fee be added to the cost of international phone calls made into Haiti (together, the "Fees"). (Id. ¶¶ 56, 66, 68, 71, 72, 181.)

The first circular, known as Circular 98, was issued on May 20, 2011, and imposed "testing, certification, user and inspection fees" of $1.50 on money transfers into and out of Haiti. (Id. ¶ 66.) In particular, under Circular 98, money transfer operators must: (1) make monthly filings with the BRH of certified copies of reports detailing the total amounts filed with the regulatory body of the territories where they are licensed to operate; and (2) collect a $1.50 fee on money transfers and food remittances. (Id. ¶¶ 67-68.) The second circular, Circular 7, was issued on May 31, 2011. (Id. ¶ 113.) According to the complaint, Circular 7 was issued to address a term omitted from Circular 98. (Id. ¶¶ 69, 70, 113.) Specifically, Circular 7 provides that "[t]he fees will be collected at the source from all money transfer [sic] sent and received (cash or in kind) from overseas" and are to be collected from individuals in the United States, Canada, Turks and Caicos, and the Bahamas. (Id. ¶¶ 70-71.) On September 14, 2011, Martelly issued the Presidential Order, which provides that "the floor price for all incoming international call[s] is hence forth fixed at US$0.23 per minute." (Id. ¶¶ 59-60.) The Presidential Order further requires that $0.05 of the $0.23 are to be turned over to CONATEL, Haiti's telecommunication regulatory agency. (Id. ¶ 61.) According to Article 3 of the Presidential Order, the purpose of the $0.05 fee is to help CONATEL fight against telephone fraud. (Id. ¶ 62.)

Plaintiffs claim that Circulars 98 and 7 (together, the "Circulars") and the Presidential Order "ran afoul of the laws of Haiti" because "only the parliament may raise taxes and fees for the benefit of the state." (Id. ¶ 57 & n.6.) Furthermore, while Martelly "promoted, marketed, advertised and sold" the Fees to the public as "necessary to finance free education for impoverished children," Martelly knew that neither his Presidential Order nor the Circulars contain language "relating to tax or funding education." (Id. ¶¶ 58, 184.) Defendants aided Martelly in misleading the public by advertising and collecting the Fees as lawful taxes levied to fund free education in Haiti. (Id. ¶¶ 73, 96, 98, 108, 109, 119, 124, 136, 141, 149, 169, 190, 198, 208.) According to the complaint, a program to fund free education in Haiti does not exist. (Id. ¶ 204.) Instead, Martelly allegedly embezzled monies collected through the Fees with the aid of Defendant Unibank S.A., which extended Martelly a $9 million loan to build a beach house as a means of transferring a portion of the proceeds from the $1.50 wire transfer fee. (Id. ¶¶ 165-66.) In return for their part in the scheme, Defendants allegedly retained a portion of the Fees. (Id. ¶¶ 85, 116, 131, 146, 163, 195, 206, 209). And while the Government of Haiti purports to receive at least an estimated $132 million per year from the Fees, (Id. ¶ 180), there has been no public accounting detailing the amount of funds collected and remitted to the Haitian government nor an explanation of how the funds were used in Haiti once remitted to the BRH. (Id. ¶¶ 84, 86, 117, 132, 147, 167, 203.)

STANDARD OF REVIEW

To withstand a Rule 12(b)(6) motion to dismiss, 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 , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atl. Corp. v. Twombly , 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ). A claim is facially plausible when the alleged facts allow the court to draw a "reasonable inference" of defendants’ liability for the alleged misconduct. Id. While this standard requires more than a "sheer possibility" of a defendants’ liability, id. , "[i]t is not the Court's function to weigh the evidence that might be presented at trial" on a motion to dismiss. Morris v. Northrop Grumman Corp. , 37 F. Supp. 2d 556, 565 (E.D.N.Y. 1999). Instead, "the Court must merely determine whether the complaint itself is legally sufficient, and, in doing so, it is well settled that the Court must accept the factual allegations of the complaint as true." Id. (citations omitted).

DISCUSSION

The act of state doctrine "precludes the courts of this country from inquiring into the validity of the public acts a recognized foreign sovereign power committed within its own territory." Banco Nacional de Cuba v. Sabbatino , 376 U.S. 398, 401, 84 S.Ct. 923, 11 L.Ed.2d 804 (1964). The doctrine is "a consequence of domestic separation of powers, reflecting, the strong sense of the Judicial Branch that its engagement in the task of passing on the validity of foreign acts of state may hinder the conduct of foreign affairs." W.S. Kirkpatrick & Co. v. Envtl. Tectonics Corp., Int'l , 493 U.S. 400, 404, 110 S.Ct. 701, 107 L.Ed.2d 816 (1990). Thus, the act of state doctrine applies where "the relief sought or the defense interposed would [ ] require[ ] a court in the United States to declare invalid the official act of a foreign sovereign performed within its own territory." Id. at 405, 110 S.Ct. 701. Defendants maintain that the relief sought in this case would require just that. (Joint Mem Law Supp. Defs.’ Mot. Dismiss Pl.’s Second Am. Class Action Compl. ("Defs.’ Mem.") at 5-7, ECF No. 64-1.) More to the point, Defendants argue that the act of state doctrine applies because the Court cannot adjudicate Plaintiffs’ claims without necessarily judging the propriety of official actions of Haiti's government and its leaders.⁴ (Id. at 7.) The Court agrees.

"To qualify as official, an act must be imbued with some level of formality, such as the authorization by the foreign sovereign through an official statute, decree, order or resolution." Kashef v. BNP Paribas S.A. , 925 F.3d 53, 60 (2d Cir. 2019). Indeed, these sorts of instruments have been expressly contemplated by the Supreme Court and have been requisite to the application of the doctrine in "every Supreme Court case" that has addressed this issue. Id. (collecting Supreme Court cases). Accordingly, in assessing the applicability of the act of state doctrine, courts must determine whether a defendant can point to any "statute, decree, order, resolution or comparable evidence of sovereign authorization for any of the actions in question" to show that the act was "the official policy" of the foreign sovereign. Id. at 61. The doctrine...