The opinion of the court was delivered by: Wexler, District Judge.
Plaintiffs John Fickling ("Fickling") and the Estate of
Florence Fickling ("the estate") (collectively "plaintiffs")
bring the above-referenced action against defendants the
Commonwealth of Australia ("Australia"), the State of Victoria
("Victoria"), and Tony Lyons ("Lyons"), in his official
capacity as Registrar of Titles of the Victorian Government
(collectively "defendants"). Plaintiffs allege, inter alia,
that defendants' acceptance of caveats on the property of a
corporation controlled by Fickling constitutes a taking,
nationalization, expropriation and/or seizure of plaintiffs'
property without compensation and in violation of international
law. Currently before this Court is defendants' motion to
dismiss plaintiffs' claims pursuant to subsections (1), (2),
and (6) of Rule 12(b) of the Federal Rules of Civil Procedure.
In addition, defendants argue that the action is nonjusticiable
under the Act of State doctrine. Finally, defendants seek
attorney's fees under Rule 11 of the Federal Rules of Civil
Florence Fickling, the natural mother of Fickling, was a
citizen of the United States residing in the County of Suffolk
until she died intestate on June 22, 1980. Fickling was
appointed administrator of his mother's estate on July 29,
1980, by decree of the Surrogate's Court of the County of
Suffolk. Fickling, as administrator of the estate, has
authorized the commencement of this action.
Australia is a "foreign state" as defined by the Foreign
Sovereign Immunities Act ("FSIA" or "the Act"), 28 U.S.C. § 1602
et seq. Victoria is a political subdivision of Australia
and a "foreign state" under the FSIA. § 1603(a). Lyons is an
"agency or instrumentality" of Australia under the Act. §
1603(b). All three defendants have filed Affidavits of
Nonwaiver of Foreign Sovereign Immunity.
Fickling and Carol are in the midst of a dissolution of their
marriage before the Family Court of Australia ("Family Court"),
a federal court having jurisdiction over that action. The
Family Court's jurisdiction over Fickling is founded on the
fact that the couple was domiciled in Australia prior to their
separation in 1986. The events underlying the action before
this Court stem from the divorce action, although plaintiffs
contend that defendants' actions are unrelated to the
"administering and enforcing [of] Australia's domestic
relations and real property laws." Affidavit of Fickling at 2.
Plaintiffs claim to be the majority shareholders in Johned
Investments Propriety Limited ("Johned"), an investment banking
corporation created under the laws of Victoria. It is
plaintiffs' contention that they were induced into investing
United States currency in Johned by Australia's guarantee that
the monies infused could be repatriated at any time. Complaint
Plaintiffs allege that Carol has caused caveats to be lodged
by Lyons on the freehold properties of Johned. A caveat
"precludes the sale, transfer, hypothecation, mortgage, pledge,
etc., [sic] of the real property upon which the Caveat is
lodged." Complaint at 7. According to plaintiffs, these caveats
constitute the taking of Johned's property without compensation
and in violation of international law.
Johned, which is controlled by Fickling, claims to have made
numerous attempts to retain commercial counsel to commence
caveat removal proceedings. Plaintiffs contend that the
attempts to retain counsel to represent Johned in those
proceedings have been unsuccessful. Plaintiffs proffer that the
attorneys they have attempted to retain conjecture that any
such proceedings would be an "exercise in futility" because
that action's inevitable transfer from an Australian state
court to the Family Court would result in a denial of the
"request for Caveat removal and the enjoin[ing of] Johned from
making any further applications for such relief." Id. at 10-11.
Plaintiffs premise this on the fact that section 78 of the
Australian Family Court Act of 1975 authorizes the Family Court
to decide matters concerning title or rights to property that a
party has with respect to that property. In fact, subsequent to
the filing of the complaint, Johned commenced, on April 6,
1990, a caveat removal proceeding in the Supreme Court of
Victoria at Melbourne, Australia. That proceeding was
ultimately transferred to the Family Court where it is now
pending. Affidavit of Fickling at 4.
Plaintiffs allege that Fickling has been threatened with
arrest in Australia and otherwise harassed by the Australian
government and courts. Plaintiffs contend that the purpose of
the caveats is to ensure that Fickling will succumb to Carol's
"unreasonable, arbitrary, [and] capricious" marital and
financial demands which are "without basis in law and in fact."
Complaint at 12.
As noted, plaintiffs allege that the acceptance of the
caveats by Lyons on behalf of Victoria constitutes a taking,
nationalization, expropriation and/or seizure without
compensation of Johned's property. Plaintiffs further allege
that defendants, by their combined efforts, have conspired to
aid Carol in her attempt to cause Fickling to yield to her
demands. Plaintiffs contend that it is "defendants' practice
and procedure to cause the insolvency bankruptcy of non-citizen
parties" before the Family Court. Plaintiffs also contend that
defendants' actions represent a breach of Australia's promise
that plaintiffs would have the right to repatriate their
foreign investment. Finally, plaintiffs allege that ...