887 F.2d 1089
NOTICE: Ninth Circuit Rule 36-3 provides that dispositions other than opinions or orders designated for publication are not precedential and should not be cited except when relevant under the doctrines of law of the case, res judicata, or collateral estoppel.
John MITCHELL, Trustee of Collier-Traino, Inc., and
International Agricultural Development, Inc.,
The SECRETARIAT OF LAND AND RECLAMATION, AND AGRICULTURAL
REFORM OF the SOCIALIST PEOPLE'S LIBYAN ARAB
United States Court of Appeals, Ninth Circuit.
Argued and Submitted Sept. 11, 1989.
Decided Oct. 2, 1989.
Before PREGERSON, TROTT and FERNANDEZ, Circuit Judges.
In 1979 Collier-Traino, Inc. ("Collier-Traino") entered into three contracts with the Secretariat of Land Reclamation and Agricultural Reform of the Socialist People's Libyan Arab Jamahiriya ("the Secretariat"). The contracts were numbered 3, 4 and 5. Ultimately, the Secretariat terminated the contracts, and drew down certain monetary guaranties.
Thereafter, this action for breach of contract was commenced against the Secretariat by John Mitchell, Trustee of Collier-Traino, Inc., and International Agricultural Development, Inc., in the bankruptcy of Collier-Traino ("the Trustee").
The district court dismissed the action for lack of jurisdiction, and the Trustee appeals. He claims that the district court erred when it decided that the doctrine of collateral estoppel barred the current attempt to assert jurisdiction over the Secretariat as to Contract 5, and that it committed further error when it decided that there was no personal or subject matter jurisdiction over the Contract 3 and 4 disputes. We affirm.
In 1978 two gentlemen from Libya met with one of the principals of Collier-Traino to inquire into Collier-Traino's interest in building greenhouses in Libya. Collier-Traino expressed interest, and in early 1979 the Libyan Government requested a meeting in Paris. The meeting was held. It was followed by a meeting in Benghazi, Libya, and resulted in execution of a contract numbered 35, which is not involved in this litigation.
At a later time, Libya sent a telex to Collier-Traino's office in the United States. The possibility of entering into other agreements was suggested. Further negotiations took place in Libya, and in about September of 1979, those led to execution of Contracts 3, 4 and 5 in Libya.
Contract 5 provided for the management and operation of irrigated units in the Sarir area of Libya. Collier-Traino was to cultivate the units and see to the production of quantities of onions, potatoes, and summer wheat. Contract 3 provided for the supply and construction of six greenhouses in Libya, and Contract 4 provided for the management of those greenhouses and the training of Libyan personnel in their management. Since all of these were on-site agricultural contracts, the ultimate services were to be performed in Libya. Only there could the building, cultivation, growing and harvesting take place. Only there could output be measured.
Other provisions of Contract 5 required that Collier-Traino maintain an office in Benghazi, to which notices and other communications to that company would be sent. It further provided that payments to Collier-Traino would be by deposit of Libyan dinars in Collier-Traino's Libyan bank account or by a letter of credit, which the Secretariat created at Umma Bank, a Libyan banking entity.
Contract 4 provided for payment in dinars or in dollars, but also had an express provision that Collier-Traino could send up to 70 percent of the payments abroad in the form of United States dollars. No English translation of Contract 3 was provided to the district court, but there is no evidence to suggest that its essential basic terms are different from those in Contract 4.
The contracts also provided that Libyan law would apply and that the Libyan courts would have exclusive jurisdiction over any dispute. A further provision required that a performance guaranty be created for the benefit of the Secretariat. That was accomplished through back-to-back letters of credit. Umma Bank issued the Secretariat a letter of credit on which the Secretariat could draw in the event of a default by Collier-Traino. Umma Bank, in turn, held letters of credit from Citibank International ("Citibank") which, in effect, obligated that bank to pay Umma Bank, if the Secretariat drew down an Umma Bank letter of credit. Naturally, Collier-Traino had to back the Citibank letter of credit.
The Secretariat did ultimately declare a default by Collier-Traino, and did draw down the letters of credit issued by Umma Bank. That bank in turn made a demand on Citibank. Collier-Traino thus lost the income it would have earned on the contracts, but remained liable to Citibank. Not surprisingly, that was a severe blow; a blow that generated a spate of litigation and led to Collier-Traino's ultimate bankruptcy.
After the declaration of default, Collier-Traino filed an action in the United States District Court for the Northern District of California, in which it accused the Secretariat of breach of Contract No. 5. That action was known as Collier-Traino, Inc. v. Socialist's People's Libyan Arab Jamahiriya, Secretariat for Land Reclamation and Agricultural Reform, et al., C-82-3345 (WWS).
Before that litigation could be concluded, Collier-Traino went into bankruptcy and the Trustee took over in about November of 1984. The record before us does not show the exact date that the Trustee became involved in the Northern District of California litigation, but it was certainly before November of 1985.
In any event, the issue of jurisdiction under the Foreign Sovereign Immunities Act ("FSIA"), 28 U.S.C. Secs. 1602-1611, was raised in that litigation. After giving the parties ample opportunity to litigate the subject, the district court dismissed that action for lack of jurisdiction. The dismissal came in February of 1986. There was no effort by the trustee to seek reconsideration of that court's determination, or to appeal it. Instead, the Trustee decided to commence the present action against the Secretariat.
STANDARD OF REVIEW
We review the district court's determination that the doctrine of collateral estoppel is available as a bar to the Contract 5 litigation de novo. Davis & Cox v. Summa Corp., 751 F.2d 1507, 1519 (9th Cir.1985). We review the district court's decision to apply the doctrine for abuse of discretion. United States v. Geophysical Corp., 732 F.2d 693, 697 (9th Cir.1984). Under this standard, "we cannot simply substitute our judgment for that of the district court, but must be left with the definite and firm conviction that the court committed a clear error of judgment in reaching its conclusion after weighing the relevant factors." United States v. BNS, Inc., 858 F.2d 456, 464 (9th Cir.1988).
The district court's decision regarding personal jurisdiction is an issue of law, which we review de novo, where the underlying facts are not disputed. Hirsch v. Blue Cross, Blue Shield, 800 F.2d 1474, 1477 (9th Cir.1986). We note that to the extent the factual materials bearing on the jurisdictional issue were disputed, the Trustee need only have presented materials that would support a finding of jurisdiction, since no testimony was received. Data Disk, Inc. v. Systems Technology Assoc., Inc., 557 F.2d 1280, 1285 (9th Cir.1977).
A. Collateral estoppel principles bar the Trustee's action on Contract 5.
There is nothing particularly arcane about the doctrine of collateral estoppel. It is based on the simple premise that a party should get only one opportunity to litigate a dispute. Any other rule could generate endless litigation, and other parties would not be able to obtain peace. Once an issue of fact has been decided in a previous proceeding, it cannot be re-litigated. Americana Fabrics, Inc. v. L & L Textiles, Inc., 754 F.2d 1524, 1529 (9th Cir.1985). Nor will it matter that the issue involves jurisdiction, for "... a final determination ... on the jurisdictional issue is conclusive in the subsequent federal litigation if the later suit is between the same parties, on the same issue, and if the issue sought to be precluded was actually litigated and necessary to the prior determination." Kendall v. Overseas Development Corp., 700 F.2d 536, 538 (9th Cir.1983).
However, jurisdictional issues do raise some additional concerns. A dismissal for lack of jurisdiction is not a decision on the merits. If a person seeks jurisdiction on one ground, and that issue is decided against him, it does not necessarily mean that he is precluded from seeking jurisdiction based on different and unlitigated jurisdictional facts. GAF Corp. v. United States, 818 F.2d 901, 913-14 (D.C.Cir.1987). A simple example would be a dismissal for failure to file a claim with a governmental agency, or for failure to wait long enough before suing on that claim. A later filed claim, or a longer wait, may cure the defect and allow a new action to go forward.
That does not mean that merely neglecting to present the facts in the first case will preclude application of the bar of collateral estoppel. Cf. Los Angeles Unified School Dist. v. Los Angeles Branch NAACP, 714 F.2d 935 (9th Cir.1983). One may not evade the doctrine that easily. If one could, then the doctrine would offer little peace to opposing parties. Compagnie des Bauxites De Guinee v. L'Union Atlantique S.A. D'Assurances, 723 F.2d 357 (3rd Cir.1983) is not to the contrary. In that case, the party asserting the bar claimed that the prior action had decided the case on its merits. The court rightly pointed out that no such decision had been made. The court then went on to note that there had not, in fact, been an opportunity to litigate the jurisdictional issue before the prior tribunal. That was because the other court had proceeded in a way that precluded plaintiff from presenting evidence on the jurisdictional question. Compagnie des Bauxites, 723 F.2d at 361-62. That is not our case. Indeed, when properly read, Compagnie des Bauxites does not undermine the general principle that prior litigation will preclude a further sally.
Here the Trustee valiantly attempts to demonstrate that the district court in the prior litigation denied him the right to litigate the jurisdictional issue. That is incorrect. The Trustee had every opportunity, and now simply wishes he had brought forth more facts. He wishes he had argued the connection between Contracts 3, 4 and 5, facts that were known to him at that time. The Trustee does recognize that it could be argued that he was simply "out-lawyered" in the prior action. It surely could be. Perhaps he was. In any event, that will not save him now.
Therefore, the district court did not fall into error when it decided that the defense of collateral estoppel was applicable to this case, nor did it abuse its discretion when it decided to invoke that doctrine. It properly determined that the Trustee was barred from re-litigating the Contract 5 jurisdictional issue in this action.
Since the issue of jurisdiction was before the district court in the prior action, the Trustee cannot re-litigate that issue as to Contract 5. If he was not satisfied with that ruling he should have sought reconsideration or taken an appeal. His failure to do so was a fatal tactical mistake.
B. There is no personal jurisdiction over the claim that the Secretariat breached Contracts 3 and 4.
Our decision regarding jurisdiction turns on an analysis of the FSIA. In that act, Congress, with great parsimony of language although not with great clarity, set out to resolve issues of sovereign immunity, subject matter jurisdiction, and personal jurisdiction.
One particularly interesting aspect of the FSIA is found in 28 U.S.C. Sec. 1330, for that section suggests that if the district court has subject matter jurisdiction, then personal jurisdiction automatically follows. The courts have limited the idea that subject matter jurisdiction gives rise to personal jurisdiction. They have determined that the concept does not extend personal jurisdiction beyond the boundaries established by the usual constitutional due process analysis. See Texas Trading & Milling Corp. v. Federal Republic of Nigeria, 647 F.2d 300 (2nd Cir.1981), and Thos. P. Gonzalez Corp. v. Consejo Nacional de Producion, 614 F.2d 1247 (9th Cir.1980).
In this case, the issue of subject matter jurisdiction is bound up with the provisions of 28 U.S.C. Sec. 1605(a)(2), which declare that a foreign state lacks immunity if its commercial activity which is the basis for the action has a "direct effect" in the United States. Here the Trustee accuses the Secretariat of breaching a contract with an American company. It has been held that a breach of contract is enough to cause a direct effect upon the company, and that the effect is in the United States when payment was to be here. See Texas Trading & Milling Corp., 647 F.2d at 312. That court did not determine whether the effect would be in the United States if payment was to be elsewhere. 647 F.2d at 312 n. 35. We need not decide that issue today,1 since this court has taken the position that the unique structure of the FSIA combines the usual concept of personal jurisdiction with that of subject matter jurisdiction. See McKeel v. Islamic Republic of Iran, 722 F.2d 582, 589, n. 10 (9th Cir.1983); Thos. V. Gonazalez Corp., 614 F.2d at 1255. Perhaps it would be more elegant to keep the ideas separated, and to follow the general principle that subject matter jurisdiction should be the first concern of the court. However, there is little point in doing so in this case. If we find that there were not sufficient contacts to permit the assertion of personal jurisdiction, then the district court must be upheld, whether we say that minimum contacts are part of the direct effect alchemy or treat them as a different issue entirely. In fact, as will be shown, application of the law of this circuit inexorably leads to the conclusion that personal jurisdiction over the Secretariat does not exist.
Our analysis starts with the principles set forth in Data Disk, Inc., 557 F.2d 1280.2 The first inquiry is whether general jurisdiction over the Secretariat exists. Clearly, it does not. There is no showing of continuous and systematic contacts between the Secretariat and this country. See Perkins v. Benguet Consol. Mining Co., 342 U.S. 437, 445-47, 72 S.Ct. 413, 418-19, 96 L.Ed. 485 (1952); and Hirsch, 800 F.2d at 1477.
The next inquiry is whether there is specific jurisdiction over the Trustee's claims. As the court pointed out in Data Disk, Inc., 557 F.2d at 1287, this determination is based upon the following three-part test:
(1) The non-resident defendant must do some act or consummate some transaction with the forum or perform some act by which he purposefully avails himself of the privilege of conducting activities in the forum, thereby invoking the benefits and protections of its laws. (2) The claim must be one which arises out of or results from the defendant's forum-related activities. (3) Exercise of jurisdiction must be reasonable.
Our first concern is the initial element of the test. The only contact that the Trustee can point to is a single telex which invited Collier-Traino representatives to the negotiations in Libya.3 Perhaps one contact can be enough in a proper case, but it is not the mere fact of a contact that must concern us. We must consider the quality of that contact. See FDIC v. British-American Ins. Co., 828 F.2d 1439 (9th Cir.1987), and Lake v. Lake, 817 F.2d 1416, 1421 (9th Cir.1987). Surely a single invitation to come to Libya to negotiate does not rise to the level of availing oneself of the benefits or protections of the laws of the United States.4 That invitation does not even approach the level of solicitation that the court found in Shute v. Carnival Cruise Lines, 863 F.2d 1437 (9th Cir.1988). There the record was replete with evidence of the defendant's advertising, promotional activities, and use of travel agents within the state. Carnival Cruise's conduct was a far cry from the Secretariat's suggestion that Collier-Traino send a representative to Libya to discuss possible additional contracts.
Nor did the court's decision to exercise jurisdiction in Decker Coal Co. v. Commonwealth Edison Co., 805 F.2d 834 (9th Cir.1986), turn on a single solicitation. It involved a contract which expressly required that coal be delivered in the forum state, and the defendant actually accepted delivery there for years. Here, the Trustee does assert that there were oral statements that the goods in question must come from the United States, but we note that those statements were not made a part of the written contracts between the parties. Furthermore, even if the statements did become part of the contracts, their presence would not establish a sufficient contact between the Secretariat and this country, since delivery, erection, operation and production were to take place in Libya. Again, these facts are much different from those in Decker Coal, where in addition to an explicit contract term, the mining and supply of forum state coal were essential to carrying out the contract.
We are also mindful of the decision in Brainerd v. Governors of the University of Alberta, 873 F.2d 1257 (9th Cir.1989), where jurisdiction appeared to turn on one phone call. However, that case involved a tort, and the call was the very vehicle by which the tort was committed. A tortious phone call is not like a simple invitation to negotiate. The former easily generates sufficient contacts, the latter virtually none at all. See Paccar Inter., Inc. v. Commercial Bank of Kuwait, 757 F.2d 1058 (9th Cir.1985).
The Trustee does assert that there were two other contacts--one visit by two Libyans and one invitation to a meeting in Paris. The Trustee has never presented evidence to show that the Libyan gentlemen were agents of the Secretariat. Moreover, even if we assume that they were, those contacts led to a wholly different contract, that is, Contract No. 35. It is not at issue here, and cannot support our jurisdiction. See Thos. P. Gonzalez Corp., 614 F.2d at 1254.
Finally, the mere existence of the contracts and of the Citibank letters of credit is insufficient to result in personal jurisdiction. See Paccar Inter., Inc., 757 F.2d at 1063. However, the Trustee claims that the demand on the Citibank letters of credit creates the necessary contact. It does not. First, if the existence of a contract or a letter of credit does not itself create a sufficient contact, it would be most peculiar if a non-tortious demand for performance transformed the situation so radically. Second, the Secretariat did not make a demand on any letter of credit in this country. Umma Bank did. While the Trustee suggests that the Secretariat and Umma Bank are inextricably entwined, he presented no evidence that they were anything but separate juridical entities. There is no evidence that one controls the other. See First Nat'l City Bank v. Banco Para El Comercio Exterior de Cuba, 462 U.S. 611, 103 S.Ct. 2591, 2601, 77 L.Ed.2d 46 (1983). Therefore, regardless of how we analyze the demand itself, it cannot supply the required nexus between the Secretariat and this country.
In short, the Trustee has failed to satisfy the first Data Disk element. That being said, we need not address the second element, nor is there any reason for us to consider whether the taking of jurisdiction would be reasonable under the circumstances.
The Trustee is precluded from re-litigating the issue of personal jurisdiction as it relates to Contract No. 5. As to Contracts 3 and 4, we find there is no personal jurisdiction over the Secretariat.
This disposition is not appropriate for publication and may not be cited to or by the courts of this circuit except as provided by 9th Cir.R. 36-3
In light of our decision in America West Airlines v. GPA Group, Inc., 877 F.2d 793 (9th Cir.1989), it is unlikely that we would accept an expansive reading of Texas Trading. See also Gregorian v. Isvestia, 871 F.2d 1515, 1526-27 (9th Cir.1989)
Of course, for FSIA purposes, the area of contact is the United States, rather than a particular state within this country
We note that there is no evidence that this telex is directly connected to Contracts 3 and 4, rather than to some other contract. However, we will give Collier-Traino the benefit of the doubt
We know, by the way, that the Secretariat did not intend to rely on our law, since the contract between the parties called for the application of Libyan law, and even called for a Libyan forum