Guirlando v. T.C. Ziraat Bankasi A.S., No. 09-0478 (2d Cir. 2010)

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09-0478-cv Guirlando v. T.C. Ziraat Bankasi A.S. 09-0478 1 UNITED STATES COURT OF APPEALS 2 FOR THE SECOND CIRCUIT 3 August Term, 2009 4 5 (Argued: October 23, 2009 Decided: April 8, 2010) Docket No. 09-0478-cv 6 7 8 THERESA GUIRLANDO*, 9 Plaintiff-Appellant, 10 11 - v. T.C. ZIRAAT BANKASI A.S., 12 13 14 Defendant-Appellee. Before: JACOBS, Chief Judge, KEARSE, Circuit Judge, and GARDEPHE, . . Dlstrlct Ju d ge ** . 15 16 Appeal from final judgment and order of the United States 17 District Court for the Southern District of New York, Richard J. 18 19 20 21 22 23 24 25 26 27 * 28 29 30 * * Honorable Paul G. Gardephe, of the Uni ted States District Court for the Southern District of New York, sitting by designation. Although in the notice of appeal, as well as in the briefs filed in this Court, plaintiff's name is spelled "Giurlando," which matches the spelling on reproductions of her driver's license and passport in the record, her name is spelled "Guirlando" in her original complaint and in the orders issued by the district court. "Because legal research catalogs and computers are governed by the principle of consistency, not correctness, we feel constrained to adhere to the erroneous spelling." Ford Motor Credit Co. v. Milhollin, 444 U.S. 555, 555 n.* (1980). 1 Sullivan, Judge, subject matter 2 jurisdiction under the Foreign Sovereign Immuni ties Act, see 28 3 U.S.C. 4 defendant Turkish bank for conduct in Turkey enabling the theft of 5 moneys from her Turkish bank account. §§ 6 1330 (a) , for 1605 (a) (2), lack of plaintiff's claims against Affirmed. V. 7 8 9 10 11 12 13 dismissing, ELI ZABETH GRAYSON, New York, for Plaintiff-Appellant. New York, MICHAEL T. SULLIVAN, New York, New York (Sullivan & Worcester, New York, New York, on the brief), for DefendantAppellee. KEARSE, Circuit Judge: 14 Plaintiff Theresa Guirlando judgment of final 16 Southern 17 dismissing her claims against defendant T.C. Ziraat Bankasi A.S., 18 a 19 neg'ligence, 20 omissions, 21 husband 22 established bank account in Turkey. The district court granted 23 Ziraat's R. 24 provisions of the Foreign Sovereign Immunities Act 25 "Act"), see 28 U.S.C. 26 for lack of subject matter jurisdiction, finding that Ziraat is an 27 agency or instrumentality of a foreign state within the meaning of Turkish bank of United New ("Ziraat" negligent and breach of to withdraw motion most pursuant §§ York, or and States District appeals from a 15 District the ("Guirlando") Richard the J. "Bank"), intentional Court for Sullivan, for, the Judge, inter misrepresentations alia, and fiduciary duty in enabling Guirlando' s of to her Fed. life savings Civ. P. from a 12(b) (1) newly and ("FSIA" or the 1330(a), 1603-1605, to dismiss the action - 2 - 1 the Act and is immune from this sui t 2 Guirlando's claims were based did not "cause[] a direct effect in 3 the Uni ted States," 2 8 U. S. C. 4 contends that the district court erred in concluding that Ziraat's 5 acts did not cause a direct effect in the United States. 6 reasons that follow, 7 the judgment of the district court. I. The 1605 (a) (2). § On appeal, Guirlando For the we reject Guirlando's contentions and affirm 8 9 because the acts on which status of BACKGROUND Ziraat as an instrumentality of the 10 government of Turkey is not disputed. 11 of the events on which Guirlando's claims are based is drawn from 12 the allegations of the amended complaint 13 accepted 14 dismissal. 15 A. as true for purposes of The following description ("Complaint"), which are reviewing this Rule 12 (b) (1) The Events 16 In Port Jefferson, New York, in October 2006, Guirlando, a 17 67-year-old United States citizen, married Mevlut Cicek, a citizen 18 of Turkey who was not legally present in the United States. 19 March 20 telephoned 21 Turkey, 22 sold her house and car; in May 2007 she flew to Turkey, bringing a 23 check drawn on a New York branch of Citibank payable to herself in 2007, Cicek wi thout disappeared Guirlando, explained that notice. he had He been and asked her to move to Turkey to join him. - 3 - In thereafter deported to Guirlando 1 the amount of 2 sales and the entire balance of her Citibank account--in essence, 3 her "life savings." When 4 $251,156.63, representing the proceeds from those (Complaint Guirlando 8.) ~ arrived in Cicek I s home town of Adana, 5 Turkey, Cicek took her to the Adana branch of Ziraat, where he was 6 "well known to the Manager and other executive level personnel." 7 (Id. 8 Ziraat that she wished to open an individual account and deposit 9 her check into it. ~ Guirlando 9.) that informed English-speaking employees of She alleges that the Bank employees told her, 10 falsely, 11 identification number; 12 account with Cicek. 13 the 14 made only by the owners jointly, the Ziraat employees had her sign 15 forms and signature cards for a 16 character," allowing wi thdrawals to be made by one owner wi thout 17 the consent of the other. 18 cards were entirely in Turkish, and Guirlando was unaware that her 19 money could be withdrawn from the account without her signature. could not availabili ty of The 20 she open an account without a Turkish they thus persuaded her to open a In addition, an account joint without informing Guirlando of from which wi thdrawals could be (Id. j oint account of a ~ 11.) "disj uncti ve The forms and signature Ziraat employees promised to telephone Guirlando as 21 soon as the deposited funds became available; 22 funds had arrived, 23 the 24 withdrew more than $200,000 in a series of transactions completed 25 in a single day. Bank and they informed Cicek. commenced wi thdrawing (See id. ~ 16.) - 4 - money instead, once the Cicek promptly went to from the account; he "Whi 1 cek was at Ziraat Bank withdrawing the funds, 2 Cicek's adult daughter informed G[ui]rlando that Cicek had gone to 3 the bank to steal money_ 4 confirmed had 5 withdrew 6 subsequently 7 present action against the remaining returned made withdrawals, balance, to the After the Bank ~ 17.) Guirlando approximately United States promptly She $50,000. and commenced the raat. In addition to the above allegations, Guirlando alleged on 8 9 that (Complaint II information and bel that at the time when she opened her Ziraat Bank account, the manager and executive personnel at Ziraat Bank knew that Cicek was a criminal and a swindler, and that his marriage to G [ui] rlando was bigamous and void because Cicek was already married to a Turkish woman when he married G[ui]rlando. The Ziraat employees expected to profit from Cicek defrauding G[ui]rlando. 10 11 12 13 14 15 16 17 Complaint asserted that, as a resul t of the (Id. 19 conduct of Ziraat's employees with respect to the opening of the 20 account for the deposit of Guirlando's check, the Bank was liable 21 for negligence, 22 omissions, breach of the covenants 23 and breach of fiduciary duty. 24 B. Ziraat's Motion To Dismiss and the Ruling of the District Court 25 Ziraat moved to dismiss the Complaint on various grounds, ~ 19.) The 18 ional misrepresentations and negligent and good faith and fair dealing! 26 including lack of subject matter jurisdiction. 27 motion, 28 stating, 29 owned by the government of Turkey it submitted a inter alia, declaration by In support of its its First Legal Counsel that Ziraat is a joint-stock company wholly - 5 - Declaration of Yurdagul 1 Ruzgar dated February 8, 2008, 2 "date back to the Ottoman Empire when it was formed as the first 3 agricultural 4 state" 5 instrumentality of a foreign state and hence entitled to immunity 6 under the FSIA. 7 instrumentality of a foreign state within the meaning of the FSIA; 8 but 9 because the actions of the Bank's employees caused a direct effect 10 in the United States by causing the payment of approximately a 11 quarter of a million dollars from Guirlando's Citibank account in 12 New York. (id. she 13 financial ~ 4) . argued In institution founded and guaranteed by the Ziraat argued, inter alia, that it is thus an Guirlando did not dispute Ziraat's status as an that Ziraat an Order of Dismissal dated December 15, Ziraat Bankasi, A.S., No. 07 Civ. 10266, 2008 WL 5272195 (S.D.N.Y. 17 Dec. 18 contention that Ziraat's actions had a direct effect in the United 19 States. 20 "'commercial 21 legally significant acts'" took place in the foreign country and 22 the 23 " , [t] hat the money came from a bank account in New York.'" 24 at *4 25 Nigeria, 26 1071 only noted that activity'" alleged (quoting Antares Here, 36 Court exception '" direct 999 F. 2d 33, (1994)). this did effect'" Aircraft, (2d Cir. instead, in L.P. 1993), for lack of See Guirlando v. T.C. court had dismiss the 16 The to 2008, subject matter jurisdiction under the FSIA. ("Guirlando"). motion statute 15 It Ziraat' s immuni ty under that district 2008) granted lacked 14 15, court 2), and that its historical roots ~ rejected Guirlando's ruled not apply the v. that United Federal the FSIA' s where "'all States Republic cert. denied, was Id. of 510 U. S. the district court found that "all - 6 - 1 'legally significant' acts" by Ziraat "took place in Turkey, where 2 Plaintiff opened 3 [Ziraat's] allegedly unlawful behavior occurred," Guirlando, 4 WL 5 connected to the United States in the instant matter, the drawing 6 of a check on a bank in New York, 7 it was entirely fortuitous and entirely unrelated to the liability 8 of [Ziraat]," id. 9 Judgment 5272195, the joint at *4. The bank court account, and concluded where that "the all of 2008 sole act is not legally significant, as (internal quotation marks omitted) . was entered dismissing the Complaint. 10 Guirlando's motion for reconsideration pursuant to Fed. R. Civ. P. 11 59(e) and 60(b) was denied, and this appeal followed. 12 II. DISCUSSION 13 On appeal, Guirlando challenges the judgment of dismissal 14 (as well as the denial of her motion for reconsideration--although 15 she proffers no separate arguments as to that denial), contending 16 principally that either the "payment of the $251,156.63 out of the 17 New York Citibank account" 18 her impoverishment "as an American citizen" 19 Guirlando 20 effect 21 "legally significant 22 Court to abandon the "legally significant act" test and rule that 23 the in reply brief the United Citibank on appeal States act" payment (Guirlando brief on appeal at 35) or at 6-7) sufficient test. her (id. at 41; see also constitutes to meet Alternatively, impoverishment - 7 - or this a direct Court's she urges constitutes this the 1 requisite direct effect. 2 45; Guirlando reply brief on appeal at 18-19.) 3 Given as the (See Guirlando brief on appeal at 37-38, absence of any dispute as to the status of 4 Ziraat a foreign state wi thin the meaning of the FSIA, see 5 28 U.S.C. §§ 1603(a) and the 6 allegations 7 12(b) (1) motion, Guirlando's contentions present only questions of 8 law, 9 Inc. v. Republic of South Africa, 300 F.3d 230, 235 (2d Cir. 2002) of the (b), Complaint and as which we review de novo. 10 ("Virtual 11 A. true for acceptance purposes of of its Rule See generally Virtual Countries, Guirlando's contentions. 12 Ziraat's Countries"). For the reasons that follow, we rej ect The FSIA Meaning of "Direct Effect in the United States" 13 The FS IA '" provides the sole basis for obtaining 14 jurisdiction over a foreign state in the courts of this country.'" 15 Saudi 16 Argentine Republic v. Amerada Hess Shipping Corp., 17 443 18 district courts have subject matter jurisdiction over "any nonjury 19 civil action against a foreign state as defined in section 1603(a) 20 of this title as to any claim for relief in personam with respect 21 to which the 22 under 23 international agreement." 24 25 Arabia v. (1989)). Nelson, The Act foreign sections Section 507 provides, state 1605-1607 U.S. is 349, in general, not (1993) 355 enti tIed that to (quoting 488 U.S. 428, the federal immuni ty ei ther of this title or under any applicable 28 U.S.C. 1605(a) (2), known exception", provides that - 8 - § as 1330 (a) the (emphasis added). "commercial activity (a) A foreign state shall not be immune from the jurisdiction of courts of the United States or of the States in any case-- 1 2 3 4 (2) in which the action is based [1] upon a commercial activity carried on in the United States by the foreign state; or [2] upon an act performed in the United States in connection with a commercial activity of the foreign state elsewhere; or [3] 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 . 5 6 7 8 9 10 11 12 13 14 15 28 U.S.C. 16 upon [] , 17 elements of a claim that, 18 relief under his 19 (construing first clause of 20 language 21 different 22 denied immunity. 23 To be a § 1605(a) (2) is of the (emphases read most added). naturally" section, of "'based introduce to phrase "those if proven, would entitle a plaintiff to theory of the case." categories The § Nelson, 1605 (a) (2) ) . each of conduct its 507 U. S. at 357 As is plain from the three clauses for which the describes foreign state is Only the third clause is at issue here. "direct" effect wi thin the meaning of the third 24 clause of the commercial activity exception, 25 be either substantial or foreseeable, see Republic of Argentina v. 26 Weltover, Inc., 504 U.S. 607,617-18 (1992) 27 941 F.2d 145 (2d Cir. 1991) 28 'direct' it 29 defendant's 30 (quoting 31 indicated that, by "immediate," we meant that, between the foreign 32 state's if follows Weltover I, commercial ("Weltover II"), aff'g ("Weltover I"); rather, 'as an activity, '" 941 the impact need not immediate Weltover II, F.2d activity at 152). and - 9 - the "an effect is consequence 504 In effect, U.S. of at 618 Weltover I, there the was we no 1 "intervening element." 2 Republic South 3 ("Martin") of 941 Africa, F.2d 836 at 152; F.2d 91, see also 95 (2d Martin Cir. 1987) ("The common sense interpretation of a 'direct effect meaning within 5 intervening element, but, rather, flows in a straight line without 6 deviation 7 omitted)). We have held that lithe requisite immediacy" is lacking 8 where alleged 9 independent or the of § interruption. of ll 1605(a) (2) 'll 4 10 the v. effect the (other II conduct II depend [s] of the "is one internal which quotation crucially foreign has no marks on variables state. Virtual Countries, 300 F.3d at 238. This 11 Circuit I s reference to a Illegally significant act II 12 test had its origin in an effort to determine whether the direct 13 impact of a foreign state1s foreign commercial activity was felt 14 lIin the United States. 15 against the Republic of Argentina for unilaterally extending the 16 time for payments on bonds it had issued, brought by bondholders 17 who had designated New York as the place of payment, we began our 18 inquiry as to situs by stating that 19 20 21 22 23 24 25 26 27 II In Weltover I, a breach-of-contract suit [i]n determining where the effect is felt directly, courts often look to the place where legally significant acts giving rise to the claim occurred. See Zedan v. Kingdom of Saudi Arabia, 849 F. 2d 1511, 1515 (D. C. Cir .1988) (legally significant event must occur in the United States). We have stated that II [a] n injury to a corporation occurs in some legally significant situs, for instance, . a place designated for performance of a contract." 28 Weltover I, 941 F.2d at 152 (quoting International Housing Limited 29 v. 30 (II Rafidain Bank Iraq, 893 International Housing")). F.2d 8, 11 n.3 (2d Cir. 1989) We concluded that whereas there was - 10 - 1 no FSIA jurisdiction over the contract dispute in International 2 Housing "based, 3 New York City was not a contractual requirement, '" Weltover I, 941 4 F. 2d at 152 -53 5 there was FSIA jurisdiction in Weltover I because 6 7 8 9 10 11 12 13 14 15 16 in large measure, on the fact that (quoting International Housing, '[p] ayment in 893 F. 2d at 12), the contract gave plaintiffs the option to call for payment in New York. Plaintiffs exercised that option. The legally significant act was defendants' failure to abide by the contractual terms; i.e., to make payments in New York. The effects occurred, in the first instance, in New York, when the plaintiffs' accounts were not credited with the outstanding amount of u.s. dollars. As such, the act of nonpayment caused a direct effect in the United States. 941 F.2d at 153 (emphases added) . Thus, 17 in ruling that a "legally significant act" occurred 18 in the United States, Weltover I meant that, because the contracts 19 required payment to be made in the United States, 20 constituting the breach occurred in the United States. 21 Virtual Countries, 300 F.3d at 239 (" [A]n anticipatory contractual 22 breach 23 purposes of 24 in 25 conclusion in Weltover I 26 payment in the United States as 27 direct effect 28 § 29 U.S. at 617-19, albeit without comment on our use of the "legally 30 significant act" lang'uage. the occurs § 'in the United 1605(a) (2) United States in the States' for the the nonpayment See also jurisdictional if performance could have been required and then that a United was requested there."). Our foreign state's failure to make required by contract States within the caused a meaning of 1605(a) (2) was affirmed by the Supreme Court in Weltover II, 504 - 11 - 1 In the meantime, prior to the decision in Weltover II, the 2 "legally significant act" formulation used in Weltover I, was used 3 in Antares Aircraft, L.P. v. Federal Republic of Nigeria, 948 F.2d 4 90 5 reconsideration in light of Weltover II by 505 U.S. 6 Antares I was an action for conversion, brought by a United States 7 partnership 8 detained for some five months by an instrumentality of the Federal 9 Republic (2d Cir. 1991) whose of sole Nigeria and and asset was was vacated an airplane not released fees landing and allegedly remanded 1215 that until owed for (1992). had been Antares by paid 10 airport 11 lessee. 12 matter jurisdiction, we noted that the detention undoubtedly had a 13 direct effect on Antares; but as "the 'legally significant act'-- 14 the detention and alleged conversion of the aircraft--occurred in 15 Nigeria," we concluded that "the effect of the defendants' conduct 16 abroad 17 Nigeria." 18 parking ("Antares I"), Antares's In affirming dismissal of the action for lack of subject was not fel t directly 'in the Uni ted States,' but in Antares I, 948 F.2d at 95 (emphases added). The "legally significant act" caused some (emphasis added) formulation 19 has 20 standpoint 21 from a 22 clause of 23 a 24 United 25 foreign state elsewhere and that act causes a direct effect in the 26 United States" claim confusion both from a and- -principally metaphysical § in the standpoint. statutory interpretation breach-of - contract First, context -- interpreting the third 1605 (a) (2) - -which denies a foreign state immunity for upon an act outside the terri tory of the "based States in connection with a commercial activity of the (emphases added) --to mean that the foreign state - 12 - 1 must have performed some legally significant act 2 States 3 those 4 expressly denies immunity to a foreign state for "an act performed 5 in the United States in connection with a commercial activity of 6 the 7 Since" [d] istinctions among descriptions 8 other 9 U.S. would of conflate the provisions second clause of that foreign are the state elsewhere," at 357, we do not to interpret the section. 1605 (a) (2) § naturally understood of be "in" the United third clause The second clause (emphasis added). juxtaposed against each significant," the with Nelson, "legally significant 507 act" 10 test as one requiring that the foreign state have "performed" an 11 act "in the United States." 12 Second, the metaphysical conundrum posed by Weltover I' s 13 suggestion that, 14 clause 15 legally 16 formulation equated acts 17 stated that the legally significant 18 of Argentina of immunity "was defendants' 19 contractual terms"--i.e., the "act of nonpayment"--941 F.2d at 153 20 (emphases added), 21 non-act. And although some cases state, 22 nonpayment, 23 breach that occurred in the United States," Antares Aircraft, L.P. 24 v. 25 ("Antares II") 26 (1994), of § in order to be denied immunity under the third 1605 (a) (2), significant Federal the that a Uni ted the with omissions. have States" Thus, performed a is that (emphases when Weltover I failure to abide by the the same cert. because - 13 - with a with respect to such a act was 999 F.2d 33,36 added), that "act" depriving the Republic 'legally significant' of Nigeria, is must shorthand phrasing equated an act "[t] he effect state "in "act" its Republic foreign denied, the the (2d Cir. 510 U. S. reference is 1993) 1071 to a 1 "payment [that] was to take place. . but did not," id. at 35. 2 Thus, 3 problems in the context of contract suits, because it conflates an 4 act wi th the act's effect. 5 not 6 United States; it is an act in the foreign state. 7 to act, 8 has been an anticipatory repudiation or a failure to act at the 9 time required. the "legally significant act" formulation causes conceptual The decision by a foreign sovereign to perform is itself an act, standing by itself, but it is not an act in the A decision not does not have an effect until there And although the failure to act may have a legally 10 significant effect 11 performed, the failure to act is not itself an act. 12 in the place where the act was to have been The "legally significant act" formulation poses less of a 13 conundrum 14 following the remand of Antares I for reconsideration in light of 15 Weltover II, 16 WeI tover I I had 17 significant act" 18 similar analysis in finding it decisive that the contract had been 19 breached 20 performance. 21 tort claim brought by Antares for the conversion of its airplane, 22 we noted that 23 performance is the locus of the tort," id. 24 the 25 contacts with the United States to establish the requisite 'direct 26 effect' in the we in New context noted not of that the expressed formulation York, that a In Court's Antares I I, opinion view on WeI tover I' s that Weltover II contractually See Antares II, possibility a actions. Supreme but the "[i] n tort, tort 999 F.2d at 36. "legally had designated in used place a of Focusing on the the analog to contract law's place of foreign tort Although recognizing could have "sufficient in this country," we concluded that the conversion before - 14 - 1 us was not 2 acts took place in Nigeria." 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 such a tort because all of the "legally significant Id. The aircraft was registered in Nigeria. There is no evidence that the use of the aircraft was related to substantial commerce with the United States. The detention of, and physical damage to, the plane happened in Nigeria. The alleged conversion thus occurred in Nigeria. Moreover, the negotiations over, and the payment of, the outstanding fees occurred in Nigeria and utilized Nigerian currency. That the money came from a bank account in New York is a fact but one without legal significance to the alleged tort. The Nigerian authori ties were indifferent to the geographic location of the source of the money used to pay the fees. Their demands would have been satisfied had Antares paid from a London checking account or borrowed the funds from a bank in Lagos. Wherever the source of the money, payment had to be in Nigeria, just as the payment in Weltover had to be in New York. The tort thus began in Nigeria wi th the detention of the aircraft and ended in Nigeria wi th the payment of the money. Unlike Weltover, where the parties had agreed that performance was to occur in New York, the sole act connected to the United States in the instant matter, the drawing of a check on a bank in New York, was entirely fortui tous and entirely unrelated to the liability of the appellees. (emphases added) . Thus, we stated that " [u]pon 30 reconsideration, we again affirm [the dismissal] because there was 31 no' direct effect' 32 the United States . of appellees' " legally significant conduct in Id. at 34. 33 We view this last sentence's prepositional phrase "in the 34 United States" as pertaining to "'direct effect'," rather than to 35 "conduct". 36 a requirement that 37 have engaged in conduct in the United States, 38 the conclusion that the defendant's legally significant conduct-- That is, the Antares II reconsideration did not state (for FSIA jurisdiction) the foreign state must - 15 - but rather stated 1 all of which occurred in Nigeria--had had no direct effect in the 2 United States. 3 our" 'legally significant acts' 4 defendant's conduct that is alleged to have had a direct effect in 5 the United States must be legally significant: 6 7 8 9 10 11 12 13 Indeed, our post-Weltover I cases have described test" as meaning simply that the This test requires that the conduct having a direct effect in the United States be legally significant conduct in order for the commercial activity exception to apply. See Hanil Bank [ v. PT. Bank Negara Indonesia, (Persero) 1, 148 F. 3d [127,] 133[ (2d Cir. 1998)]; see also Antares Aircraft, L.P. v. Federal Republic of Nigeria, 999 F.2d 33, 34-35 (2d Cir.1993). 14 Filetech S.A. v. France Telecom S.A., 15 1998) added); 16 at 240-41. 17 contract cases cited in Weltover I. (emphases 18 see also 157 F.3d 922, Virtual 931 Countries, (2d Cir. 300 F.3d This interpretation is also consistent with tort and For example, in Martin, cited in for the 19 proposi tion that 20 substantial, 21 United States citizen, was injured in an accident in South Africa, 22 and 23 malpractice by employees of a state-owned hospital rendered him a 24 quadriplegic, see Martin, 836 F.2d at 92. 25 26 27 28 29 30 31 he in order to be direct, Weltover I see Weltover I, alleged that 941 racially an effect need not be F.2d at 152, motivated the plaintiff, neglect and a medical We noted that the effects of the foreign state's acts occurred outside the Uni ted States, in South Africa, where appellant sustained personal inj uries . [T] he injury to appellant occurred in South Africa where he became quadriplegic. [I]t cannot be said that the effects of South Africa's acts occurred "in the United States". 32 Id. at 94. 33 returned There was no effect in the United States until Martin to the United States; - 16 - and there was no legally 1 significant act by the foreign state causally connected to that 2 return. Similarly, 3 (D.C. Cir. in Zedan v. 1988) Kingdom of Saudi Arabia, 849 F.2d 4 1511 5 first 6 Circuit, 7 a contract in Saudi Arabia to perform services for an agency of 8 that government, the Ministry of Communications, in Saudi Arabia. 9 That agency subsequently refused to pay the agreed compensation, articulating ("Zedan"), the case cited by Weltover I in the II legally significant act 11 test in this the plaintiff, a United States citizen, had entered into 10 and Zedan returned to the United States unpaid. 11 noted that 12 13 14 15 16 17 18 19 The Zedan court [a]ppellant's injury, while financial rather than personal, was def ini tely suffered in Saudi Arabia, for it was there that the Ministry of Communications breached its contract wi th him. While it is true that the breach continued after appellant left Saudi Arabia, the breach's effect in the United States cannot be said to be direct, for this effect is due to an intervening event--appellant's return here. F.2d 21 having occurred, its continuation was not legally significant. These at 1515. breach Zedan, 22 849 The 20 holdings that in Martin also reflect the principle 24 activity outside of the United States caused physical or financial 25 injury to 26 constitute a direct effect in the United States. 27 litigation, 28 acts 29 because Antares was a United States partnership and had suffered United States for example, had had the that a Zedan 23 a the mere fact and citizen is foreign state's commercial not itself sufficient to In the Antares the plaintiff contended that Nigeria's requisite direct - 17 - effect in the United States 1 financial 2 twice rejected this proposition: 3 4 5 6 7 8 9 10 11 12 loss by having to pay the Nigerian fee demands. We [T]he direct effect of detaining the plane was . the loss of the use of the aircraft and the physical damage it suffered in Nigeria, and not, as Antares alleges, the financial loss that Antares suffered in the United States. The transfer of funds out of Antares' New York bank account, and the resultant financial loss to the partnership, are not by themselves sufficient to place the effect of the defendants' conduct "in the United States" within the meaning of § 1605 (a) (2) . 13 Antares 14 emphasis ours). I, 948 F.2d at 95 (first emphasis in original; second We elaborated in Antares II: 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 [T]he fact that an American individual or firm suffers some financial loss from a foreign tort cannot, standinG alone, suffice to trigger the exception. See Martin v. Republic of South Africa, 836 F. 2d 91 (2d Cir .1987) (finding that financial injury of person injured abroad is not a "direct effect" in United States); Zernicek v. Brown & Root, Inc., 826 F.2d 415, 418 (5th Cir.1987) ( "consequent ial damages [from personal inj ury tort abroad] are insufficient to constitute a 'direct effect in the United States' for purposes of abrogating sovereign immunity"), cert. denied, 484 U.S. 1043, 108 S.Ct. 775, 98 L.Ed.2d 862 (1988); Australian Gov't Aircraft Factories v. Lynne, 743 F.2d 672, 675 (9th Cir.1984) (similar), cert. denied, 469 U.S. 1214, 105 S.Ct. 1189, 84 L.Ed.2d 335 (1985); Colonial Bank v. Compagnie Generale Maritime et Financiere, 645 F.Supp. 1457, 1465 (S.D.N.Y.1986) (finding American bank's loss on ship mortgage from ship seizure to be indirect effect) . 35 36 37 38 39 40 41 42 43 44 45 46 If a loss to an American individual and firm resulting from a foreign tort were sufficient standing alone to satisfy the direct effect requirement, the commercial activity exception would in large part eviscerate the FSIA' s provision of immunity for foreign states. Many commercial disputes, like the present one, can be pled as the torts of conversion or fraud and would, if appellant is correct, result in litigation concerning events with no connection with the United States other than the citizenship or place of incorporation of the plaintiff. Similarly, personal injury actions based - 18 - on torts with no connection with this country, except for the plaintiff's citizenship, might be brought under appellant's theory. For example, an American citizen injured in a foreign city by a governmentowned bus company might sue here if the commercial acti vi ty exception is triggered solely by the fact that the citizen's wealth is diminished by the accident. We find it difficult to characterize such an effect, standing alone, as "direct" or to read into this otherwise somewhat restrictive legislation an all-encompassing jurisdiction for foreign torts. 1 2 3 4 5 6 7 8 9 10 11 12 Antares II, 999 13 Countries, 300 14 corporation's financial loss constitute[s] 15 United States[]' 16 B. F. 2d at 36-37 F.3d (emphases added). at 240 (the "theory [] . is plainly flawed" Accord Virtual that any 'u.s. a direct effect in the (emphasis in original)). Guirlando's Claims 17 As described principally in Part above, 19 her, 20 account into which to deposi t 21 to 22 wi thdrawn by one 23 rather than an account for which the consent of both owners would 24 be required for a withdrawal, and 25 Guirlando, 26 She 27 States both because they resul ted in the payment of 28 from her New York Citibank account and because she lost more than 29 $200,000 30 "legally significant act" open a she disjunctive j oint could not Ziraat Complaint alleges that in Turkey, Guirlando's 18 falsely, that, I.A. open an employees individual her Ci tibank check, joint account from which the consent owner wi thout (3) (1) (2) told checking caused her funds could be of the other, notified Cicek, rather than when the funds had arrived in the new Ziraat account. asserts and that is these an acts had a American direct citizen. effect Regardless test is formulated, - 19 - in the Uni ted $251, 156.63 of how the we cannot conclude 1 that either 2 States within the meaning of 3 event Guirlando' s constituted § a direct occurred because 5 lives in much reduced circumstances" 6 disposed of 7 authorities discussed in Part II.A. 8 American 9 foreign two "returned the 4 for reasons. individual tort to the standing activity] the United direct requisi te effect United States where (Complaint First, suffers cannot, in 1605 (a) (2) . contention that she effect it is above. some alone, 18) ~ she is quickly foreclosed by the " [T] he fact that an financial suffice loss from a to trigger the 999 F.2d at 36. 10 [commercial 11 Second, Guirlando's financial loss was not a direct result of the 12 Bank's denying her the right to open an individual account, 13 between 14 intervening element, to wit, Cicek's larcenous withdrawals. that exception." conduct and her Antares II, impoverishment there was for an 15 We note also that Ziraat's act of notifying Cicek that the 16 funds had arrived in the new Turkish bank account from New York 17 could 18 States 19 citizen is not a legally sufficient effect, 20 funds' 21 the transfer of the funds from the Citibank account in New York, 22 and hence notification of their arrival could not have caused that 23 transfer. 24 any legal significance. 25 the notion that the bank was not enti tIed to notify one of the not have both had because the (a) requisi te financial direct effect injury to a in the Uni ted United States and because (b) the arrival in Turkey plainly could not have occurred before Moreover, we cannot see that such a notification had The joint account had been established; - 20 - 1 owners of the arrival of funds in the account is not supported by 2 any authority of which we are aware. 3 Guirlando's contention that the requisite direct effect in 4 the United States consisted of the transfer of the funds out of 5 her New York Citibank account requires somewhat more discussion, 6 but 7 complaint that 8 account, rather 9 withdrawals could not be made without the consent of both owners, it suffers from mul tiple flaws. Ziraat her caused than considerable a First, to open two-signature significance note that disjunctive account joint from which loses 11 latter type of account would have prevented Cicek from withdrawing 12 funds 13 have given him control over Guirlando's own ability to withdraw 14 the funds. 15 purports 16 independent access to her money. 17 that Ziraat did not allow her to open an individual account. 18 Thus, to knowledge scrutiny. her 10 wi thout Guirlando' s upon a we and consent, Although the it would also the two-signature joint account that Guirlando have preferred would have deprived Guirlando of Her more logical complaint is Even as to Ziraat's refusal to allow Guirlando to open an 19 individual account, however, there 20 contention that 21 States. 22 individual account as she wished, her money still would have left 23 the United States. 24 money from New York had a direct effect in the United States, 25 is clear from the face of the Complaint that that transfer is not 26 what caused Guirlando's injury. that conduct had a First, if Guirlando are several direct effect had deposi ted her flaws in the in the Uni ted check into an And while she argues that the transfer of her it Upon the arrival of Guirlando's - 21 - 1 funds in Turkey, Guirlando had lost nothing. 2 were 3 States--in withdrawing most of the money from the Turkish account 4 without Guirlando's consent. the 5 acts of Second, Cicek- -after the What caused her loss money had left as held in the Antares litigation, the Uni ted although the 6 breach of an agreement "to pay [money] 7 requisite direct effect in the United States, see Antares I, 8 F. 2d 9 added)," [t]he transfer of funds out of 10 at 95 [is] (describing WeI tover I, not [itself] sufficient . . . in New York" has the 941 to F. 2d at 153) 948 (emphases [a] New York bank account place the effect of [a] 11 defendant ['s] conduct 'in the United States' within the meaning of 12 § 13 also Antares II, 999 F.2d at 36. 1605 (a) (2) ," 14 Antares I, 948 F. 2d at 95 (emphases added); see Although Guirlando argues that United States Fidelity & 15 Guaranty Co. v. Braspetro Oil Services Co., No. 97 CIV. 6124, 1999 16 WL 307666 17 to 18 substantially for 19 opinion, F.3d 20 proposition that '" 21 defendants, 22 diminish the effect 23 appeal at 27 (quoting Braspetro, 1999 WL 307666, at *14 24 in brief omitted)), 25 Braspetro plaintiffs, 26 for construction projects in Brazil, contended that the defendant (S.D.N.Y. May 17, 1999) dismiss for 199 are lack the 94, of subject reasons 97 ("Braspetro"), denial of motion matter stated (2d Cir. in jurisdiction the 1999), district stands aff'd court for the [t]he fact that the plaintiffs, rather than the to make payment in the United States in the Uni ted States'" does not (Guirlando brief on (emphasis her reliance on Braspetro is misplaced. The sureties that had issued performance bonds - 22 - 1 instrumentalities 2 breaches of the underlying construction contracts and impaired the 3 plaintiffs' 4 relief as to their obligations under the performance bonds. 5 are several differences between Braspetro and the present case. 6 To begin wi th, 7 regardless 8 had a direct effect in the United States because the first clause 9 of the of Brazil (II Petrobras/Brasoil") suretyship status. of The sureties had caused sought declaratory There the commercial acti vi ty exception was applicable whether commercial the alleged activity conduct exception of Petrobras/Brasoil applied, the performance 10 bonds at issue having been negotiated in the United States. 11 1999 WL 307666, 12 and procured performance bonds in New York. 13 (although not contractually obliged to be) 14 and 15 FSIA" because such conduct was 16 clause of the commercial activity exception. II thus 17 at were "not Further, *12 See (IIPetrobras/Brasoil allegedly negotiated immune even wi th from federal . understood to be payable in New York II jurisdiction under the "sufficient to satisfy the first respect to the (emphasis added)). third clause of the 18 commercial activity exception, 19 to pay moneys from their New York accounts was not the only factor 20 considered 21 Petrobras/Brasoil had caused the underlying construction contracts 22 to be breached by their conduct in New York, 23 also id. at *11 24 directing the 25 dollars from Brasoil's New York bank accounts to the [contractors] by the court. the sureties' potential obligation The court noted the assertion that see id. at *14; see (Petrobras/Brasoil allegedly caused breaches "by premature and excessive - 23 - payment of millions of 1 for work 2 plaintiffs' consent"). 3 that had not yet been performed and without the And most importantly, Guirlando's reliance on Braspetro is 4 misplaced because 5 contractors, 6 make payments 7 the Braspetro 8 contrast, 9 was the express goal of Guirlando herself--as she describes it: triggering alleged 10 11 12 13 14 15 in the the plaintiff nonperformance sureties' from their Uni ted States accounts, wrongful conduct of the of obligations the to was caused by defendants. Here, in transfer of Guirlando' s money from New York to Turkey As set forth in the Amended Complaint, Mrs. G [ui] rlando walked into Ziraat Bank in Turkey, and immediately announced her purpose of opening an individual bank account into which she could deposit a check drawn on her New York bank account and payable to herself. 16 (Guirlando reply brief on appeal at 3; see also Guirlando brief 17 on appeal at 39 ("The drawing of the check on the bank in New York 18 . was Mrs. G[ui]rlando's only reason for opening an account at 19 Defendant Ziraat Bank.").) Having engaged Ziraat for the express 20 purpose New 21 account, 22 leaving the United States, 23 courts 24 conduct of Ziraat that caused that effect. 25 of an deny depositing act that immuni ty her by to its York check into nature would resul t a new Turkish in her money Guirlando is not entitled to have the Ziraat on the theory that it was the We note that the dismissal for lack of jurisdiction here not leave Guirlando wi thout in the does 27 district court that the United States is an inappropriate forum, 28 Ziraat stated, - 24 - recourse. In arguing 26 1 [a] s stated in the accompanying Declaration of Yurdagul Ruzgar, First Legal Counsel to the Bank, Ziraat Bankasi is amenable to suit in Turkey and will not challenge the appropriateness of Turkey as the forum for litigating this action. 2 3 4 5 6 (Ziraat Memorandum of Points 7 Defendant's Motion To Dismiss at 7.) 8 and Authorities in Support of CONCLUSION We 9 and have have considered all 10 appeal 11 dismissing 12 under the FSIA is affirmed. the found of Guirlando' s action them to be wi thout for lack of - 25 - subject arguments on this meri t . matter The judgment jurisdiction

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