The opinion of the court was delivered by: VICTOR Marrero, United States District Judge.
Plaintiff Brad M. Reiss ("Reiss") filed this action in 1998 to recover a "finder's fee" allegedly owed to him by defendants Societe Centrale du Groupe des Assurances Nationales ("Societe"), GAN S.A., Union pour le Financement D'Immeubles de Societe ("UIS"), and Union Industrielle de Credit ("UIC"). In earlier proceedings on this matter, GAN S.A. and Societe (hereinafter collectively referred to as "Defendants") moved to dismiss for lack of personal jurisdiction under the New York State long-arm statute, N.Y. C.P.L.R. § 302, and Fed.R.Civ.P. 12(b)(2), and for failure to state a claim pursuant to Fed.R. Civ. p. 12(b)(6), which was granted by another court in this District, Reiss v. Societe Centrale du Groupe Des Assurances Nationales, 78 F. Supp.2d 147 (S.D.N.Y. 1999) ("Reiss I"), but was vacated and remanded by the Second Circuit to this Court, to which the case was later reassigned, Reiss v. Societe Centrale du Groupe Des Assurances Nationales, 235 F.3d 738
, 747-48 (2d Cir. 2000) ("Reiss II"). Defendants have renewed their motion to dismiss the complaint, in this instance under the Foreign Sovereign Immunities Act ("FSIA"), 28 U.S.C. § 1602 - 1611, and Rules 12(b)(1) and 12(b)(2) of the Federal Rules of Civil Procedure for lack of personal and subject matter jurisdiction. For the reasons set forth below, an evidentiary hearing is hereby ordered to resolve the factual issues in dispute concerning whether this Court has subject matter jurisdiction over Defendants.
This action concerns Reiss's claim that he is entitled to a fee, pursuant to an oral agreement, for having successfully interested General Electric Capital Corporation ("GECC") in acquiring UIS and UIC. Reiss claims that he entered into the oral agreement with Alain Juliard ("Juliard"), the Chairperson of UIS, to solicit investment in Groupe Percier, a conglomerate of real estate companies, including UIS, which were majority owned by Societe and managed by Juliard, as well as UIC, in exchange for a commission of one percent of the value of the transaction. In his Amended Complaint, Reiss pleads causes of action in breach of contract and quantum meruit. In 1992, the year that the alleged oral contract was first formed, GAN S.A. was a wholly owned subsidiary of Societe, and GAN S.A. wholly owned UIC and 94.47 percent of UIS. In 1997, prior to the sale of UIC and UIS to the GECC, GAN S.A.'s shares of UIC were transferred to Societe.
Defendants filed a motion to dismiss the Amended Complaint pursuant to Fed.R.Civ.P. 12(b)(2) for lack of personal jurisdiction under the New York state long-arm statute, N.Y. C.P.L.R. § 302, and Fed.R.Civ.P. 12(b)(6) for failure to state a claim, on the ground that Reiss did not establish that Defendants had authorized Reiss to act as their agent. The court granted Defendants' motion. See Reiss I, 78 F. Supp.2d at 147 (S.D.N.Y. 1999). Although given leave to replead, Reiss instead appealed the Court's ruling. Thereafter, the docket sheet shows that on January 27, 2000, a Stipulation and Order dismissing the action as against UIS and UIC was "So Ordered" by the court.
On appeal, the Second Circuit vacated the dismissal, remanded for further proceedings consistent with its decision, and instructed the parties to engage in discovery on the issue of subject matter jurisdiction under the FSIA. See Reiss II, 235 F.3d at 747-748.*fn2 On remand, the case was assigned to this Court.
The factual background of this litigation has been discussed at length by the Second Circuit in Reiss II, 235 F.3d at 739-743; see also Reiss I, 78 F. Supp.2d at 149-152. Given the extensive attention the factual recitation of the case has received, the Court will not repeat what has already been said. However, the Court will describe what has happened from the time the case was remanded, and will repeat key factual information for purposes of clarification and guidance throughout.
As directed by the Second Circuit, Reiss has engaged in further discovery addressing FSIA jurisdiction. Reiss has taken the deposition of Juliard and Mr. Phillipe Rosio ("Rosio"), Chief Financial Officer of UIS.*fn3 However, Guy de Chavanne ("de Chavanne"), the Director General of GAN S.A. and Societe, who the Second Circuit suggested would be a helpful witness in determining subject matter jurisdiction, Reiss II, 235 F.3d at 747-748, could not be located by Reiss. (See GAN S.A. Mem. at 11.)
The issue to be determined by this Court has been clarified and narrowed by the Second Circuit:
The question here is whether Reiss can demonstrate a
significant nexus between his engagement by Societe
and/or GAN S.A. as a marketing agent in the United
States and his action to recover a finder's fee for
the deal that culminated in the sale of UIC and UTS by
Societe to GECC. . . To find a significant nexus
between Societe's and/or GAN S.A.'s commercial
activity in this country in its dealings with Reiss
and Reiss' cause of action for a finder's fee requires
a determination that Juliard had actual or apparent
authority to act on behalf of Societe and/or GAN S.A.
Reiss II, 235 F.3d at 747-748. In other words, the question to be resolved is whether Juliard validly retained Reiss to act on behalf of Defendants.
Defendants argue that Juliard was not an agent of GAN S.A. or Societe and that in no way did his position as Chairperson of UIS include the authority to engage Reiss on their behalf. Reiss argues the opposite, that Juliard and Rosio were agents of the Defendants and that Juliard did have the proper authority to engage Reiss, or that Defendants, through their actions after Reiss's engagement, ratified Juliard's engagement of Reiss.
On appeal from the district court decision, the Second Circuit determined that the jurisdictional question with regard to the Defendants is not whether there is personal jurisdiction within the meaning of the New York Civil Practice Law and Rules, but whether there is subject matter jurisdiction with the meaning of the FSIA. As the Second Circuit explained, "`[T]he FSIA provides the sole basis for obtaining jurisdiction over a foreign state in federal court . . . .'" Reiss II, 235 F.3d at 746 (quoting Amerada Hess, 488 U.S. at 439). It is undisputed that the Defendants are foreign states within the meaning of the FSIA. See id. at 747 (citing 28 U.S.C. § 1603(a) ("A `foreign state' . . . includes . . . an agency or instrumentality of a foreign state.")) Accordingly, in their renewed motion to dismiss, Defendants argue that this Court lacks subject matter jurisdiction under the FSIA.
In a motion to dismiss pursuant to Rule 12(b)(1) defendant may challenge either the legal or factual sufficiency of the plaintiff's assertion of jurisdiction, or both. See Robinson, 269 F.3d at 140 (citations omitted). If the defendant challenges only the legal sufficiency of the plaintiff's jurisdictional allegations, "the court must take all facts alleged in the complaint as true and draw all reasonable inferences in favor of plaintiff." Sweet v. Sheahan, 235 F.3d 80, 83 (2d Cir. 2000). But, where evidence relevant to the jurisdiction question is before the court, and resolution of a proffered factual issue may result in the dismissal of the complaint for want of jurisdiction, a district court must consult factual evidence. See Robinson v. Gov't of Malaysia, 269 F.3d 133, 140-141 (2d Cir. 2001); Filitech S.A. France Telecom S.A., 157 F.3d 922, 932 (2d Cir. 1998) (it was error for district court to determine subject matter jurisdiction under the FSIA without regard to factual submissions); Phoenix Consulting, Inc. v. Republic of Angola, 216 F.3d 36, 40 (D.C. Cir. 2000) ("When the defendant . . . challenged the factual basis of the court's jurisdiction the court must go beyond the pleadings and resolve any disputed issues of fact the resolution of which is necessary to a ruling upon the motion to dismiss."); Cargill Int'l S.A. v. M/T Pavel Dybenko, 991 F.2d 1012, 1019 (2d Cir. 1993) Furthermore, the Second Circuit has indicated that if material issues of fact are in dispute, "it is essential for the district court of afford the parties the opportunity to present evidentiary material at a hearing on the question of FSIA jurisdiction." Reiss II, 235 F.3d at 748.
In Cargill, 991 F.2d at 1016, the Second Circuit set forth the burden of persuasion for a finding of subject matter jurisdiction under the FSIA. If the defendant challenges the factual basis for the plaintiff's jurisdictional claim, the plaintiff has the burden of proof to demonstrate that under the exceptions set forth in the FSIA, immunity should not be granted. If the plaintiff comes forward with sufficient evidence to carry its burden of production on this issue, the district court must "resolve disputed issues of fact, ...