United States District Court, Eastern District of New York
May 2, 2002
JOHN D. SHAKOUR, KORNELISKE SHAKOUR, ROBERT A. SHAKOUR, MARINA S. HABER-SHAKOUR AND RICHARD K. SHAKOUR, PLAINTIFFS,
THE FEDERAL REPUBLIC OF GERMANY AND THE ESTATE OF JOHN D. HOLLINGSWORTH, DECEDENT, DEFENDANTS.
The opinion of the court was delivered by: Arthur D. Spatt, United States District Court Judge.
MEMORANDUM OF DECISION AND ORDER
This action arises out of a claim by pro se plaintiffs John D. Shakour
("J. Shakour"), Korneliske Shakour ("K. Shakour"), Robert A. Shakour
("R.A. Shakour"), Marina S. Haber-Shakour ("Haber-Shakour") and Richard
K. Shakour ("R.K. Shakour") (collectively, the "plaintiffs") against the
defendants the Federal Republic of Germany ("Germany") and the Estate of
John D. Hollingsworth (the "Hollingsworth Estate"). The plaintiffs
allege that the defendants engaged in a conspiracy to deprive them of
rights to certain property in Germany. Presently before the Court is a
motion by the Hollingsworth Estate to dismiss the amended complaint
pursuant to Rules 8(a), 12(b)(2), 12(b)(3) and 12(b)(6) of the Federal
Rules of Civil Procedure.
The following facts are taken from the amended complaint. At the
outset, the Court notes that the amended complaint is largely
unintelligible and it contains a number of unexplained exhibits, many
written in German.
The plaintiffs allege that one Margarethe Otto ("M. Otto") conveyed her
estate, involving three factories in the former East Germany, namely one
in Leisnig, Germany and two in Mittweida, Germany, to J. Shakour in her
will of July 6, 1980. The factories produced unspecified products in the
carding industry. Carding involves the process in which machines clean
and straighten wool or cotton in preparation for the spinning and weaving
of material into clothing or fabric.
The plaintiffs further allege that in 1948, prior to the disposition
set forth above, the German Democratic Republic (the "GDR") had
expropriated the three factories at issue in this case. The GDR then
renamed the factories and operated them until the downfall of the GDR in
1990. The plaintiffs also allege that the GDR purchased an additional
factory in Neustadt (Orla), Germany on March 4, 1949 which expanded its
operation in the carding industry.
The plaintiffs next allege that since 1990, they have attempted
unsuccessfully to obtain restitution for or the return of the factories
allegedly conveyed to J. Shakour from various German courts and
administrative agencies. The plaintiffs also claim that they retained
attorneys in Germany who advised them that they are not entitled to the
factories allegedly conveyed to J. Shakour on the ground that the GDR
expropriated the property in 1948.
On April 21, 2000, the plaintiffs commenced this action against the
Federal Republic of Germany alleging that the
German government, the
German courts and administrative agencies and the plaintiffs' attorneys
in Germany participated in a conspiracy to deprive them of their rights
to the property allegedly conveyed in the will of M. Otto. On March 15,
2001, shortly after K. Shakour read an article about the death of John
D. Hollingsworth ("Hollingsworth) and Hollingsworth's involvement in the
textile industry, the plaintiffs filed an amended complaint adding the
Hollingsworth Estate as a defendant. In particular, the plaintiffs
allege that Hollingsworth was part of the conspiracy with Germany because
he purchased the factory in Neustadt (Orla) on April 12, 1991. The
amended complaint contains no specific causes of action. Presently
before the Court is a motion by the Hollingsworth Estate to dismiss the
amended complaint pursuant to Rules 8(a), 12(b)(2), 12(b)(3) and 12(b)(6)
of the Federal Rules of Civil Procedure.
In addressing the present motion, the Court is mindful that the
plaintiffs are proceeding pro se and that their submissions should be held
"`to less stringent standards than formal pleadings drafted by
lawyers. . . .'" Hughes v. Rowe, 449 U.S. 5, 9,
101 S.Ct. 173, 176 (1980) (per curiam) (quoting Haines v. Kerner,
404 U.S. 519, 520, 92 S.Ct. 594, 595 (1972)); see also Ferran
v. Town of Nassau, 11 F.3d 21, 22 (2d Cir. 1993). The Court
recognizes that it must make reasonable allowances so that pro se plaintiffs
do not forfeit rights by virtue of their lack of legal training. See
Traguth v. Zuck, 710 F.2d 90, 94 (2d Cir. 1983).
Indeed, district courts should "read the pleadings of a pro se
plaintiff liberally and interpret them `to raise the strongest arguments
that they suggest.'" McPherson v. Coombe, 174 F.3d 276, 280 (2d Cir.
1999) (quoting Burgos v. Hopkins, 14 F.3d 787, 790 (2d Cir. 1994)).
Nevertheless, the Court is also aware that pro se status "`does not
exempt a party from compliance with relevant rules of procedural and
substantive law. . . .'" Traguth, 710 F.2d at 95 (citation omitted).
The Court will address the issues of jurisdiction first because a
dismissal for lack of jurisdiction renders all other claims moot. See
Ruhrgas A.G. v. Marathon Oil Co., 526 U.S. 574, 584, 119 S.Ct. 1563, 1570
(1999) (stating that subject matter jurisdiction and personal
jurisdiction go to the power of the court to adjudicate the merits of a
case). Here, the Court will analyze its subject matter jurisdiction
before addressing personal jurisdiction. See Ruhrgas, 526 U.S. at 583,
119 S.Ct. at 1569 (stating that the district court may choose to first
address either subject matter jurisdiction or personal jurisdiction).
A. Subject Matter Jurisdiction
District courts must police subject matter jurisdiction on their own
initiative. Fed.R.Civ.P. 12(h)(3); Lyndonville Savings Bank & Trust Co.
v. Lussier, 211 F.3d 697, 700 (2d Cir. 2000) ("[F]ailure of subject
matter jurisdiction is not waivable and may be raised at any time by a
party or by the court sua sponte."). When evaluating subject matter
jurisdiction, a court may consider affidavits and other materials beyond
the pleadings to resolve the jurisdictional question. See Robinson v.
Gov't of Malaysia, 269 F.3d 133, 141 n. 6 (2d Cir. 2001); Antares
Aircraft, L.P. v. Fed. Republic of Nigeria, 948 F.2d 90, 96 (2d Cir.
1991), vacated on other grounds, 505 U.S. 1215 (1992); Exch. Nat'l Bank
of Chicago v. Touche Ross & Co., 544 F.2d 1126, 1130 (2d Cir. 1976).
A court must accept as true all material factual allegations in the
complaint, but will not draw inferences favorable to the party asserting
jurisdiction. Shipping Fin. Servs. Corp. v. Drakos, 140 F.3d 129, 131
(2d Cir. 1998); Atl. Mut. Ins. Co. v. Balfour Maclaine Int'l Ltd.,
968 F.2d 196, 198 (2d Cir. 1992). Hearsay statements contained in
affidavits may not be considered. Kamen v. Am. Tel. & Tel. Co.,
791 F.2d 1006, 1011 (2d Cir. 1986).
1. As to Germany
The Foreign Sovereign Immunities Act of 1976 (the "FSIA") provides the
sole basis for securing subject matter jurisdiction over a foreign state
in federal court. Reiss v. Societe Centrale Du Groupe Des Assurances
Nationales, 235 F.3d 738, 746 (2d Cir. 2000). Under the FSIA, a foreign
state is immune from suit unless one of the statutory exceptions
applies. Reiss, 235 F.3d at 746-47. A plaintiff bears the burden of
establishing that her or his claim falls within one of the statutory
exceptions to sovereign immunity, while the ultimate burden of persuasion
remains with the foreign state. See Drexel Burnham Lambert Group Inc.
v. Committee of Receivers for Galadari, 12 F.3d 317, 325 (2d Cir. 1993).
The statutory exceptions are essentially: (1) where the foreign state
waives immunity; (2) where the action is based on a commercial activity
by the foreign state carried on in the United States or has a direct
effect in the United States; (3) where the action relates to the
expropriation of property located in the United States; (4) where the
action relates to property in the United States acquired by succession or
gift; (5) where the action relates to a tort committed in the United
States; (6) where the action relates to the enforcement of an arbitration
agreement; and (7) where the action relates to personal injury or death
caused by acts of torture, extrajudicial killing, aircraft sabotage or
hostage taking. See 28 U.S.C. § 1605(a)(1)-(7) (2002).
It is undisputed that Germany is a foreign state under the FSIA. See
28 U.S.C. § 1603 (2002). As such, to have subject matter
jurisdiction in their action against Germany, the plaintiffs must
establish that one of the statutory exceptions to immunity exists.
Neither the amended complaint nor the affidavit submitted in opposition
to the motion to dismiss set forth any of the exceptions to sovereign
In addition, the Court finds that none of the exceptions apply. The
first exception does not apply because Germany has not waived its right
to immunity. The second exception does not apply because the action is
not based on a commercial activity of the German government. In
particular, the action is based upon the expropriation of property by the
GDR. This is a public, not a commercial act. See Saudi Arabia v.
Nelson, 507 U.S. 349, 359-60, 113 S.Ct. 1471, 1478-79 (1993) (stating
that as to the commercial activity exception "a state is immune from the
jurisdiction of foreign courts as to its sovereign or public acts (jure
imperii), but not as to those that are private or commercial in character
(jure gestionis)."). Moreover, neither the GDR's expropriation of the
factories nor the alleged conspiracy by Germany had a direct effect in
the United States.
The third exception does not apply because the action does not relate
to the expropriation of property located in the United States. The
fourth exception does not apply because the action does not relate to
property in the United States acquired by succession or gift. The fifth
exception does not apply because the action does not relate to a tort
committed in the United States but rather relates to an
committed in Germany. The sixth exception does not apply because the
action does not relate to the enforcement of an arbitration agreement.
Finally, the seventh exception is inapplicable because the action does
not relate to personal injury or death.
Because the plaintiffs have failed to establish that an exception to
sovereign immunity exists, the Court finds that it lacks subject matter
jurisdiction with respect to Germany. Accordingly, sua sponte, the action
against Germany is dismissed.
2. As to the Hollingsworth Estate
Diversity jurisdiction as set forth in 28 U.S.C. § 1332 provides in
The district courts shall have original jurisdiction
of all civil actions where the matter in controversy
exceeds the sum or value of $75,000, exclusive of
interest and costs, and is between — (3)
citizens of different States and in which citizens
or subjects of a foreign state are additional
parties. . . .
28 U.S.C. § 1332(a)(3) (2002). The citizenship of the Hollingsworth
Estate for purposes of diversity jurisdiction is determined by reference
to the decedent's domicile. Sluberski v. Lakeside Manor Home for
Adults, No. 96-2689, 1996 WL 1088902, *1 (E.D.N.Y. Nov. 19, 1996); Adler
v. Adler, 862 F. Supp. 70, 72 (S.D.N.Y. 1994).
Complete diversity exists between the plaintiffs who are citizens of
the Netherlands and Canada (K. Shakour), Canada (M. Haber-Shakour), New
York and Canada (J. Shakour), Canada (R.A. Shakour) and Pennsylvania
(R.K. Shakour), see Affidavit of K. Shakour dated June 16, 2001 (the "K.
Shakour Affidavit") ¶¶ 1-5, and Hollingsworth who was a citizen of
South Carolina. See Affidavit of Andy B. Rasor dated June 1, 2001 (the
"Rasor Affidavit"). In addition, the plaintiffs seek damages in excess
of $75,000. Accordingly, diversity jurisdiction exists with respect to
the Hollingsworth Estate.
B. Personal Jurisdiction
"When responding to a Rule 12(b)(2) motion to dismiss for lack of
personal jurisdiction, the plaintiff bears the burden of establishing that
the court has jurisdiction over the defendant." Bank Brussels Lambert v.
Fiddler Gonzalez & Rodriguez, 171 F.3d 779, 784 (2d Cir. 1999). The
plaintiff's burden depends on the posture of the case. Ball v.
Metallurgie Hoboken-Overpelt, S.A., 902 F.2d 194, 197 (2d Cir. 1990).
Before discovery, the plaintiff need only make a prima facie showing that
personal jurisdiction exists, based upon allegations of fact which will be
taken as true. Id. See also Jazini v. Nissan Motor Co., Ltd.,
148 F.3d 181, 184 (2d Cir. 1998).
"[W]here the parties have conducted extensive discovery regarding the
defendant's contacts with the forum state, but no evidentiary hearing has
been held — the plaintiff's prima facie showing, necessary to
defeat a jurisdiction testing motion, must include an averment of facts
that, if credited by [the ultimate trier of fact], would suffice to
establish jurisdiction over the defendant." Metropolitan Life Ins. Co.
v. Robertson-Ceco Corp., 84 F.3d 560, 567 (2d Cir. 1996) (internal
quotations and citations omitted). "[W]hen an evidentiary hearing is
held, the plaintiff must demonstrate the court's personal jurisdiction
over the defendant by a preponderance of the evidence." Id.
A district court may decide a motion to dismiss for lack of personal
jurisdiction on "the basis of affidavits alone; or it may permit
discovery in aid of the motion; or it may conduct an evidentiary
on the merits of the motion." Marine Midland Bank, N.A. v. Miller,
664 F.2d 899
, 904 (2d Cir. 1981). In this case, the Court will decide
the motion on the basis of the amended complaint and the affidavits
submitted in support and opposition to the present motion.
1. As to the Hollingsworth Estate
In a diversity case, a district court exercises personal jurisdiction
over a party in accordance with the law of the forum state, subject to
the requirements of due process under the United States Constitution.
Whitaker v. Amer. Tele., Inc., 261 F.3d 196, 208 (2d Cir. 2001). As
such, the Court must look to New York's personal jurisdiction statutes,
namely CPLR §§ 301 and 302, to determine whether the plaintiffs have
made a prima facie showing of personal jurisdiction over the
a. CPLR § 301
Section 301 provides "[a] court may exercise such jurisdiction over
persons, property, or status as might have been exercised heretofore."
N.Y. C.P.L.R. § 301 (McKinney 2002). Section 301 "was intended to
codify the traditional common law bases of personal jurisdiction such as
presence, consent, domicile, and `doing business.'" Goldenberg v. Lee,
No. 97-5297, 1999 WL 390611, *2 (E.D.N.Y. Apr. 15, 1999).
The Rasor Affidavit states that Hollingsworth resided in South Carolina
his entire life, that he owned property there and traveled to New York
only a handful of times in the last forty years before his death. Rasor
Affidavit ¶ 4. Accordingly, personal jurisdiction in New York
cannot be based on the presence, the consent or the domicile of
As to "doing business" under Section 301, this basis has been used
traditionally for securing personal jurisdiction over foreign
corporations. Goldenberg, 1999 WL 390611 at *2. However, the New York
Court of Appeals has not yet decided whether this basis applies an
individual. Id. Regardless of whether "doing business" may be applied
to an individual, the plaintiffs have failed to demonstrate that either
Hollingsworth or his corporation, namely John D. Hollingsworth on
Wheels, Inc. ("HOW") was "doing business" in New York.
To prove that a defendant is "doing business" under Section 301, a
plaintiff must show that the defendant's "continuous and systematic course
of `doing business' [in New York] . . . warrant a finding of its
`presence' in the jurisdiction." Ball v. Metallurgie Hoboken-Overpelt,
902 F.2d 194, 198 (2d Cir. 1990) (internal quotations and citation
The Rasor Affidavit states that HOW has always been located in South
Carolina and Hollingsworth did not have any regular or even incidental
contact with New York. Rasor Affidavit ¶ 4. The plaintiffs have
not made a prima facie showing to the contrary. Accordingly, the Court
concludes that the plaintiffs have not established personal jurisdiction
under Section 301.
b. CPLR § 302
Section 302 provides long-arm jurisdiction in New York. Section
302(a)(1) sets forth a two-prong test for determining personal
jurisdiction. In particular, a court may exercise personal jurisdiction
over any non-domiciliary "who in person or through an agent . . .
transacts any business within the state or contracts anywhere to supply
goods or services in the state," but only "[a]s to a cause of action
arising from" the transaction in question. N.Y. C.P.L.R. § 302(a)(1)
2002). In other words, a plaintiff who seeks to rely on
Section 302(a)(1) must show that (1) the defendant supplied goods or
services in the state and (2) the cause of action arises from that
Here, the plaintiffs' action against the Hollingsworth Estate arises
from Hollingsworth's business dealings in Germany, not in New York.
Accordingly, Section 302(a)(1) does not provide a basis for personal
jurisdiction. Sections 302(a)(2) and (4) are also not applicable because
the plaintiffs' action does not arise from a tortious act committed in
New York or relate to property located in New York. The Court now turns
to the final basis for long-arm jurisdiction.
Section 302(a)(3) requires (1) a tortious act committed outside the
state; (2) an injury to the plaintiff within the state; and (3) either
(a) the defendant regularly does business in or derives substantial
revenue from New York or (b) the consequences of the defendant's
activities in New York were foreseeable and the defendant derives
substantial revenue from interstate or international commerce. N.Y.
C.P.L.R. § 302(a)(3) (McKinney 2002).
The first element is met because the plaintiffs allege that
Hollingsworth conspired with the German Government when he purchased a
factory in Germany. However, neither the second nor the third element are
met. In particular, with regard to the second element, the plaintiffs'
injury did not occur within the state. New York courts "have uniformly
held that the situs of a non-physical commercial injury is where the
critical events associated with the dispute took place." Jaisan v.
Sullivan, No. 96-4336, 1997 WL 86402, *5 (S.D.N.Y. Feb. 28, 1997)
(internal quotations and citation omitted). In addition, the occurrence
of financial consequences in New York as a result of the fortuitous
location of plaintiffs in New York is an insufficient ground under
Section 302(a)(3) where the underlying events took place outside New
It is undisputed that the critical events associated with the dispute
took place in Germany. Specifically, the factories alleged conveyed to
J. Shakour were located in Germany; the GDR expropriated the factories in
the former East Germany; Hollingsworth purchased the factory at issue in
Germany; and the alleged conspiracy to deprive the plaintiffs of their
rights to the factories occurred in Germany.
Accordingly, the Court finds that the alleged injury took place in
Germany, not in New York. See Jaisan, 1997 WL 86402 at *5 (finding that
the alleged injury occurred outside New York when the shares of the
defendants' inheritance were located in Arizona, the devisor resided in
New Mexico and the New Mexico courts distributed the inherited assets);
Chemical Bank v. World Hockey Ass'n, 403 F. Supp. 1374, 1380 (S.D.N.Y.
1975) (finding that the injury resulting from the alleged conversion
occurred in Maryland and New Jersey where defendants' acts respecting the
property were committed even though the plaintiff's alleged injury to
security interest was located in New York).
Finally, the third element is not met because the plaintiffs have
failed to allege that Hollingsworth regularly conducted business in or
derived substantial revenue from New York or the consequences of
Hollingsworth's activities in Germany had foreseeable consequences in New
York and that Hollingsworth derived substantial revenue from interstate
or international commerce. Accordingly, the Court does not have long-arm
jurisdiction over the Hollingsworth Estate. Therefore, the Hollingsworth
Estate's motion to dismiss the
amended complaint for lack of personal jurisdiction is granted.
Based upon the foregoing, it is hereby
ORDERED, that, sua sponte, the action against Germany is dismissed for
lack of subject matter jurisdiction; and it is further
ORDERED, that the motion of the Hollingsworth Estate to dismiss the
amended complaint based on lack of personal jurisdiction is granted; and
it is further
ORDERED, that the Clerk of the Court is directed to close this case.
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