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TONOGA v. MINISTRY OF PUBLIC WORKS AND HOUSING
March 13, 2001
TONOGA, LTD., D/B/A TACONIC PLASTICS LTD., PLAINTIFF,
MINISTRY OF PUBLIC WORKS AND HOUSING OF THE KINGDOM OF SAUDI ARABIA, THE KINGDOM OF SAUDI ARABIA, WERNER VOSS ARCHITECTS AND ENGINEERS, AND WERNER VOSS, DEFENDANTS.
The opinion of the court was delivered by: Kahn, District Judge.
MEMORANDUM — DECISION AND ORDER
Plaintiff Tonoga, Ltd., d/b/a Taconic Plastics Ltd.
("Taconic") is a materials manufacturer incorporated in Ireland
with its principal place of business located in Petersburgh, New
York. The Sovereign Defendants are foreign states within the
meaning of the Foreign Sovereign Immunities Act ("FSIA"). See
28 U.S.C. § 1603(a); see Reiss v. Societe Centrale Du Groupe
Des Assurances Nationales, 235 F.3d 738, 746 (2d Cir. 2000).
In 1997 Taconic entered into a contract with a German
construction company to supply specialized membrane material for
a Saudi Arabian tent project designed to shelter religious
pilgrims visiting holy sites there. Shortly after entering into
this contract, the German construction company failed to make
scheduled payments to Taconic and eventually filed for
bankruptcy. Defendant Voss and his engineering firm, defendant
Werner Voss Architects and Engineers, acting, for the purposes
of this motion, as the Sovereign Defendants' authorized
agent,*fn1 allegedly guaranteed the payments due Taconic via
a series of three letter agreements in order to induce it into
completing the tent project.*fn2
Taconic completed manufacturing of the material needed for the
tent project and received two of the three payments due, the
source of which is in dispute,*fn3 but did not receive the
final payment due. Claiming that each of the named defendants
breached the guarantee, Plaintiff brought suit in this Court
seeking to collect, in part, DM 5,560,530.70, or about $3
million,*fn4 the final payment owed under the alleged
guarantee. The Sovereign Defendants brought the current motion
to dismiss based upon lack of subject matter jurisdiction, lack
of personal jurisdiction, and forum non conveniens.
A. Subject Matter Jurisdiction
As such, the burden of proving that a federal court has
subject matter jurisdiction over an action rests upon the party
attempting to invoke the court's jurisdiction, see Thomson v.
Gaskill, 315 U.S. 442, 446, 62 S.Ct. 673, 86 L.Ed. 951 (1942),
and no presumption of truth attaches to the non-moving party's
allegations, see Brown v. American Legion Cortland City Post,
64 F. Supp.2d 96, 97 (N.D.N.Y. 1999). Moreover, since a dismissal
under 12(b)(1) is not a dismissal on the merits and is without
res judicata effect on the underlying merits of the claims, when
a court dismisses a case pursuant to 12(b)(1), it is precluded
from exercising supplemental jurisdiction over related state
claims. See Cushing v. Moore, 970 F.2d 1103, 1106 (2d Cir.
i. Subject Matter Jurisdiction Under the FSIA Generally
Under the FSIA, a foreign state is presumptively immune "from
the jurisdiction of the United States and of the States" unless
one of several statutory exceptions applies. 28 U.S.C. § 1604;
see Republic of Argentina v. Weltover, Inc., 504 U.S. 607,
610-11, 112 S.Ct. 2160, 119 L.Ed.2d 394 (1992). The most
significant of these exceptions, and the one at issue here, is
the "commercial activity" exception codified under
28 U.S.C. § 1605(a)(5). See Weltover, 504 U.S. at 610-11, 112 S.Ct. 2160.
In relevant part, this portion of the FSIA states that a foreign
state is not immune from suit in any case
in which the action is based  upon a commercial
activity carried on in the United States by the
foreign state; or  upon an act performed in the
United States in connection with a commercial
activity of the foreign state or elsewhere; or 
upon an act outside the territory of the United
States in connection with a commercial activity of
the foreign state elsewhere and that act causes a
direct effect in the United States.
28 U.S.C. § 1605(a)(2). Plaintiff argues that the first
("commercial activity clause") and third ("direct effect
clause") clauses of 28 U.S.C. § 1605(a)(2) confer subject matter
jurisdiction in the present case. Because the Court concludes
that the commercial activity clause provides it with subject
matter jurisdiction, it does not ...