|
962 F.Supp.
420 United States
District Court, S.D. New York. ALLSTATE
INSURANCE COMPANY, Plaintiff, No. 86 Civil 2365 (DNE). April 28,
1997. PRIOR HISTORY: Related References:
Allstate Ins. Co. v. Administratia Asigurarilor De Stat, 1993 WL 119708
(S.D.N.Y. Apr. 15, 1993) (No. 86 CIV. 2365 (DNE)) Allstate Ins. Co. v. Administratia Asigurarilor De Stat, 875
F.Supp. 1022 (S.D.N.Y. Jan. 19, 1995) (No. 86 CIV. 2365 (DNE)) Allstate Ins. Co. v. Administratia Asigurarilor De Stat, 163
F.R.D. 196 (S.D.N.Y. Aug 24, 1995) (No. 86 CIV. 2365 (DNE)) Allstate Ins. Co. v. Administratia Asigurarilor De Stat, 948
F.Supp. 285 (S.D.N.Y. Dec. 11, 1996) (No. 86 CIV. 2365 DNE) SUBSEQUENT HISTORY: Distinguished by: S.C.
Chimexim S.A. v. Velco Enterprises Ltd., 36 F.Supp.2d 206 (S.D.N.Y. Mar. 12,
1999) (NO. 98 CIV. 0142(DC)) [*421] COUNSEL: Saiber Schlesinger Satz &
Goldstein, Newark, NJ (David J. D’Aloia, of counsel), for plaintiff
Allstate Insurance Company. Law Offices of George W. Wright, Bronx, NY, for defendant
Administratia Asigurarilor de Stat. OPINION & ORDER JUDGE: EDELSTEIN, District Judge: Presently before this Court is a cross-motion for summary judgment
which defendant Administratia Asigurarilor De Stat (“defendant”
or “ADAS”) brought as part of a series of motions decided by
this Court in Allstate Ins. Co. v. Administratia Asigurarilor De Stat, 875
F.Supp. 1022 (S.D.N.Y.1995) (the “1995 Opinion”). The 1995
Opinion, however, did not explicitly adjudicate ADAS’s cross-motion
for summary judgment, a fact which was brought to this Court’s
attention only recently. To rectify this situation, this Court presently will
consider ADAS’s cross-motion. For the following reasons, ADAS’s
cross-motion is denied. BACKGROUND The instant case arises out of a complex series of international
insurance, reinsurance, and retrocession transactions. The details of these
transactions are set forth in two previous decisions of this Court, see 0 at
1023- [*422] 25; Allstate Ins. Co. v. Administratia Asigurarilor De Stat, 948 F.Supp.
285, 289-92 (S.D.N.Y.1996), and a familiarity therewith is assumed.
Accordingly, only those facts necessary to resolving the instant motion will be
discussed. ADAS was an insurance company organized in 1952 under the laws of
the former Socialist Republic of Romania (“SRR”). (ADAS’s
Memorandum of Law in Support of Cross-Motion to Dismiss Complaint and in
Opposition to Plaintiff’s Motion to Amend Complaint and Compel
Pre-Answer Security, Allstate Ins. Co. v. Administratia Asiqurarilor de Stat, 86 Civ. 2365
(“ADAS Memo”) at 1 (Mar. 29, 1993).) Until its dissolution in
1990, ADAS, was “100% owned by the SRR.” Id. In 1975,
ADAS executed in Bucharest, Romania a retrocession agreement (the “Retrocession
Agreement”) by which the POSA Group, acting on behalf of Seguros La
Republica (“SLR”), Allstate’s reinsurer, “ceded
to ADAS certain shares of reinsurance which are the subject of Allstate’s
claim against ADAS in this action.” Id. at 2. ADAS maintains that, “[a]fter discovering fraudulent
conduct by [the] POSA [Group] and certain of its affiliates … ADAS
commenced an action in 1981 in the Bucharest Court of District No. 3 for
rescission of the Retrocession Agreement and other agency and reinsurance contracts
to which ADAS was a party.” Id. ADAS contends that “[t]he
Bucharest Court subsequently rendered Civil Judgment No. 2459 … on
January 24, 1983 rescinding and declaring void ab initio the Retrocession
Agreement and the other agency and reinsurance agreements among ADAS, the POSA
entities, and [SLR]” (the “Bucharest Judgment”). Id. at 2-3; see
also (Notice of Cross-Motion to Dismiss the Complaint, Allstate Ins. Co. v.
Administratia Asigurarilor de Stat, 86 Civ. 2365 (“Notice of
Cross-Motion”) at Exh. C (Mar. 29, 1993).) ADAS further asserts that “[a]s a consequence of the
revolutions in 1989 in Eastern Europe and, particularly, in Romania, the SRR
was abolished and a new political regime oriented toward democracy and a free
market economy was established in Romania.” Id. at 3. The
new Romanian regime privatized that country’s economy and “dissolved
state companies previously owned by the SRR and formed new shareholders
commercial companies.” Id. ADAS contends that pursuant to a 1990
Executive Order (the “Executive Order”), (Notice of
Cross-Motion at Exh. D), “ADAS was dissolved by the Republic of
Romania effective January 1, 1991.” (ADAS Memo at 3.) The Executive
Order divested ADAS of all of its assets and established three new companies to
which ADAS’s liabilities and assets were transferred. Id. These new
companies are: (1) Astra S.A. (“Astra”); (2) Asigurarea
Romaneasca S.A (“Asigurarea Romaneasca”); and (3) Carom S.A (“Carom”).
Id. at 4. ADAS claims that its foreign reinsurance business was transferred
to Astra, and that neither Asigurarea Romaneasca nor Carom have any connection
to any of ADAS’s transactions underlying the instant litigation. Id. In support of its cross-motion for summary judgment, ADAS makes
two arguments. First, ADAS contends that the Bucharest Judgment, which
allegedly renders the Retrocession Agreement underlying Allstate’s
claims void, “is entitled to recognition and enforcement by this
Honorable Court” under both New York law and the doctrine of
international judicial comity. Id. at 5. Second, ADAS asserts that
pursuant to the Executive Order issued by the new Romanian regime, it now lacks
the capacity to be sued in an American court. Id. at 11. As
noted above, ADAS brought the instant cross-motion as part of its opposition to
Allstate’s motions to amend its complaint and to compel defendants to
file pre-answer security. In the 1995 Opinion, this Court granted Allstate’s
motion to amend its complaint, and denied Allstate’s motion to compel
defendants to file pre-answer security. See Allstate, 875 F.Supp.
at 1030. This Court, however, did not expressly address ADAS’s
cross-motion for summary judgment in rendering those determinations. In granting Allstate’s motion to amend its complaint,
this Court found that “ADAS[’s] claims that a judgment from a
court in Bucharest and an executive order of the Republic of Romania bar
Allstate from asserting any claim against Astra S.A …. [were] without
merit.” Id. at 1029. That [*423]
finding, however, was made in the context of this Court’s adjudication
of Allstate’s motion to amend its complaint. In that context, this
Court observed that ADAS’s claims based on the Bucharest Judgment and
the Executive Order “address[ed] the merits of Allstate’s
claim,” and that “arguments that address the merits are not
relevant to a motion for leave to amend the pleadings.” Id. (citations
omitted). This Court’s statement that these arguments were “without
merit,” therefore, pertained only to the issue of whether Allstate
should be permitted to amend its complaint, not to the merits of the claims
Allstate alleges in its complaint. As a result, this Court has yet to consider the effect of the
Bucharest Judgment and the Executive Order upon the merits of Allstate’s
claims against ADAS. Because these issues have never been considered, they do
not constitute the law of the case, see Quern v. Jordan, 440 U.S. 332, 347 n. 18,
99 S.Ct. 1139, 1148 n. 18, 59 L.Ed.2d 358 (1979); 18 Charles A. Wright, Arthur
R. Miller, Edward H. Cooper, Federal Practice & Procedure § 4478,
at 789 (1981) ( “questions that have not been decided do not become
law of the case merely because they could have been decided”), and
thus are properly resolved in the instant opinion. DISCUSSION As a preliminary matter, this Court will set forth the legal
standard controlling the resolution of ADAS’s cross-motion for summary
judgment. I. SUMMARY JUDGMENT STANDARD Pursuant to Rule 56, summary judgement is appropriate where
“the pleadings, answers to interrogatories, and admissions on file,
together with affidavits, if any, show that there is no genuine issue of
material fact and that the moving party is entitled to a judgment as a matter
of law.” Fed.R.Civ.P. 56(c). A party seeking summary judgment bears
the initial burden of demonstrating the absence of a genuine issue of material
fact. Adickes v. S.H. Kress & Co., , 477 U.S. 317, 323, 106
S.Ct. 2548, 2552-53, 91 L.Ed.2d 265 (1986). As the Second Circuit has noted,
“[i]t has long been the rule that on summary judgment the inferences
to be drawn from the underlying facts contained in [the moving party’s]
materials must be viewed in the light most favorable to the party opposing the
motion.” Lendino v. Trans Union Credit Info. Co., 970 F.2d
1110, 1112 (2d Cir.1992) (quotation omitted). To defeat a motion for summary judgment, the non-moving party must
do “more than simply show that there is some metaphysical doubt as to
material facts.” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586, 106
S.Ct. 1348, 1356, 89 L.Ed.2d 538 (1986). Instead, the non-moving party must
“set forth specific facts showing that there is a genuine issue for
trial.” Fed.R.Civ.P. 56(e); Matsushita, 475 U.S. at
587, 106 S.Ct. at 1356. If the adverse party does not respond to the motion for
summary judgement, “summary judgement, if appropriate, shall be
entered against the adverse party.” Fed.R.Civ.P. 56(e). In considering a motion for summary judgment, a court is not to
resolve contested issues of fact, but rather, it is to determine the existence
of any disputed issues of material fact. Knight v. United States Fire Ins.
Co., 804 F.2d 9, 11 (2d Cir.1986), cert. denied, 480 U.S. 932, 107
S.Ct. 1570, 94 L.Ed.2d 762 (1987). The existence of a genuine issue of material
fact depends on both the genuineness and the materiality of the issues raised
by the motion. See Scottish Air Int’l, Inc. v. British Caledonian
Group, 867 F.Supp. 262, 266 (S.D.N.Y.1994), aff’d, 81 F.3d 1224
(2d Cir.1996). Indeed, “the mere existence of factual issues—where
those issues are not material to the claims before the court—will not
suffice to defeat a motion for summary judgment.” Quarles v.
General Motors Corp., 758 F.2d 839, 840 (2d Cir.1985) (per curiam). To evaluate a
fact’s materiality, it is the substantive law’s
identification of which facts are critical and which facts are irrelevant that
governs. [*424] Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106
S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986). While “disputes over facts
that might affect the outcome of a suit under the governing law will properly
preclude the entry of summary judgment[,] [f]actual disputes that are
irrelevant or unnecessary will not be counted.” Id. (citations
omitted); see Knight, 804 F.2d at 11-12. According to the Supreme
Court, “all that is required is that sufficient evidence supporting
the claimed factual dispute be shown to require a judge or jury to resolve the
parties’ differing versions of the truth at trial.” Anderson, 477 U.S. at
249, 106 S.Ct. at 2510 (quotation omitted). Nevertheless, “courts
should not be reluctant to grant summary judgment in appropriate cases.”
A.F.L. Falck S.p.A. v. E.A. Karay Co., Inc., 722 F.Supp.
12, 15 (S.D.N.Y.1989). “One of the principal purposes of the summary
judgment rule is to isolate and dispose of factually insupportable claims,”
Celotex, 477 U.S. at 323-24, 106 S.Ct. at 2552-53, thereby permitting courts to
avoid “protracted, expensive and harassing trials.” Meiri
v. Dacon, 759 F.2d 989, 998 (2d Cir.) cert. denied, 474 U.S. 829, 106
S.Ct. 91, 88 L.Ed.2d 74 (1985). II. ADAS’s MOTION To reiterate, ADAS advances two arguments in support of its
cross-motion for summary judgment: (1) that this Court should recognize the
Bucharest Judgment which allegedly voids the Retrocession Agreement upon which
Allstate’s claims are based; and (2) pursuant to the Executive Order,
ADAS lacks the capacity to be sued. This Court will consider each of these
arguments individually. A. The Bucharest Judgment ADAS asserts that the Bucharest Judgment “declare[s] null
and void ab initio the agency and reinsurance agreements” underlying
Allstate’s claims against ADAS, and that “[u]nder New York
law and the doctrine of international judicial comity,” that judgment
is entitled to recognition and enforcement by this Court. (ADAS Memo at 5.)
This argument implicates this Court’s ability to recognize the
judgments of foreign judicial entities. Unlike judgments of American state courts which are enforced
domestically with full faith and credit, see U.S. Const. Art. IV, § 1;
28 U.S.C. § 1738 (1994) (implementing the Full Faith and Credit
Clause), there is no comparable “international full faith and credit
clause.” See Aetna Life Ins. Co. v. Tremblay, 223 U.S. 185, 190, 32
S.Ct. 309, 310, 56 L.Ed. 398 (1912). Moreover, neither Congress nor the
Executive branch has provided such authority in the form of legislation or
treaties governing the recognition of foreign judgments. See Ronald A. Brand,
Enforcement of Foreign Money-Judgments in the United States: In Search of
Uniformity and International Acceptance, 67 Notre Dame L.Rev. 253, 257-58
(1991). Thus lacking constitutional, congressional or executive guidance,
American courts have been uncertain in their approach to the enforcement of
foreign judgments. Id. at 255. Instead, the law has developed both
through the state and federal common law, as well as through recent state-law
codifications. Because this litigation arises under this Court’s
diversity jurisdiction, see Allstate, 948 F.Supp. at 296, this Court must apply
the law of the state in which it sits, New York, to its consideration of
whether to enforce the Bucharest Judgment. See Pariente v. Scott Meredith
Literary Agency, Inc., 771 F.Supp. 609, 615 (S.D.N.Y.1991) (“New York law
governs actions in New York to enforce foreign judgments”) (citation
omitted); Choi v. Kim, 50 F.3d 244, 248 n. 7 (3d Cir.1995) (“the
consensus among the State courts and lower federal courts which have passed
upon the question is that, apart from federal question cases, such recognition
[of foreign judgments] is governed by State law and that the federal courts
will apply the law of the State in which they sit”). By enacting Article 53 of the New York Civil Practice Law and
Rules (“Article 53”), New York became one of the twenty-seven
states which have adopted versions of the Uniform Foreign Money-Judgments Act,
13 U.L.A. 263 (1986). 7B N.Y. Civ. Prac. L. & R. §§
5301-09 (Table) (McKinney 1997 Supp.). ADAS argues that, pursuant to Article
53, this Court should enforce the Bucharest Judgment. (ADAS Memo at 5-9.) [*425] ADAS’s
reliance upon Section 53 is misplaced, however, because that section is, by its
terms, applicable only to foreign money-judgments. Section 5301 specifically
defines the term “foreign country judgment” as “any
judgment of a foreign state granting or denying recovery of a sum of money, other than a
judgment for taxes, a fine or other penalty, or a judgment for support in
matrimonial or family matters.” 7B N.Y. Civ. Prac. L. & R.
§ 5301(b) (McKinney 1997 Supp.) (emphasis added). The Bucharest
Judgement is, by contrast, a judgment which allegedly nullifies a contract, not
one which awards money. See (Notice of Cross-Motion at Exh. C.) As a result,
Article 53 does not provide authority for this Court to enforce the Bucharest
Judgment. At common law, however, there is an another potential avenue for
the enforcement of the Bucharest Judgement. Under the “the comity of
nations,” courts may give force to foreign judgments, and enforcement
is not limited to foreign money judgments. See Canadian Imperial Bank v.
Pamukbank Tas, 166 Misc.2d 647, 650-51, 632 N.Y.S.2d 918, 920-21
(N.Y.Sup.Ct.1994) (applying principles of comity to, but ultimately not
enforcing, a Turkish court order restraining a New York bank from complying
with a letter of credit); Lasry v. Lasry, 180 A.D.2d 488, 489, 579
N.Y.S.2d 393, 393-94 (N.Y.App.Div.1992) (enforcing, on grounds of comity, a
Swiss court’s injunction freezing defendant’s bank account). The seminal case in the area of enforcement of foreign judgments, Hilton
v. Guyot, 159 U.S. 113,
16 S.Ct. 139, 40 L.Ed. 95 (1895), explained the doctrine of comity as follows: No law has any effect … beyond the limits of the sovereignty from which its authority is derived. The extent to which the law of one nation as put in force within its territory, whether by executive order, by legislative act, or by judicial decree, shall be allowed to operate within the dominion of another nation, depends upon what our greatest jurists have been content to call the “comity of nations.” … Comity, in the legal sense, is neither a matter of absolute obligation on the one hand, nor a mere courtesy and good will upon the other. But it is a recognition which one nation allows within its territory to the legislative, executive, or judicial acts of another nation, having due regard both to international duty and convenience, and to the rights of its own citizens or of persons under the protection of its laws. Id. at 163-64, 16 S.Ct. at 143. In New York, courts “generally
will accord recognition to the judgments rendered in a foreign country under
the doctrine of comity absent a showing of fraud in the procurement of the
foreign judgment or unless recognition of the foreign judgment would offend a
strong policy of New York.” Lasry, 180 A.D.2d at 489, 579
N.Y.S.2d at 393-94; (citation omitted); see also Canadian Imperial Bank, 166
Misc.2d at 651, 632 N.Y.S.2d at 921. The Restatement (Second) of Conflict of
Laws relies upon Hilton to shed more light on the standards controlling the
enforcement of foreign judgments: A foreign nation judgment will not be recognized in the United
States unless the American court is convinced that the foreign court had
jurisdiction and that there has been opportunity for a full and fair trial
abroad before a court of competent jurisdiction, conducting the trial upon
regular proceedings, after due citation or voluntary appearance of the
defendant, and under a system of jurisprudence likely to secure an impartial
administration of justice between the citizens of its own country and those of
other countries, and there is nothing to show either prejudice in the court, or
in the system of laws in which it is sitting, or fraud in procuring the
judgment … Hilton v. Guyot, 159 U.S. 113, 202, 16
S.Ct. 139, 158, 40 L.Ed. 95 (1895). If these conditions are met, the judgment
will not be refused recognition on the ground that the rendering court made an
error of law or fact. Restatement (Second) of Conflict of Laws § 98, cmt. c
(1971). In the case at bar, ADAS contends that the Bucharest Judgment is
enforceable, and asserts that “[e]nforcement of the Bucharest
… Judgment … would not prejudice the interests of the United
States or [*426] violate any aspect of its public policy.” (ADAS
Memo at 10-11.) In addition, ADAS maintains that the Bucharest court possessed
jurisdiction over Allstate because the Bucharest litigation named SLR and the
Northbrook Excess and Surplus Insurance Company (“NESCO”) as
defendants, and Allstate is SLR’s assignee and NESCO’s
successor-in-interest. Id. at 3; see also Allstate, 948 F.Supp.
at 290-91. ADAS contends that SLR “defaulted in appearance” in
the Bucharest action, and that NESCO was “voluntarily dismissed”
because it had no contractual privity with ADAS. (ADAS Memo at 3.) Allstate opposes ADAS’s position that the Bucharest court
possessed personal jurisdiction over Allstate through NESCO and SLR.
Specifically, Allstate maintains that: “at a minimum … the
Bucharest Court did not have personal jurisdiction over the parties”;
“[SLR] did not answer or otherwise appear in the action”;
“NESCO appeared in the action only to object to jurisdiction and that
ADAS voluntarily dismissed NESCO from the action”; “the
[Bucharest] court had no jurisdiction over Allstate, NESCO or [SLR], misapplied
New York law, rendered findings based solely on ADAS’s allegations,
and issued a judgment that violated New York’s public policy.”
(Response of Allstate Insurance Company to Administratia Asigurarilor de Stat’s
Civil Rule 3(g) Statement, Allstate Ins. Co. v. Administratia Asiqurarilor de
Stat, 86 Civ. 2365 (“Allstate 3(g) Statement”)
¶¶ 6-10 (May 24, 1993).) To reiterate, in order to prevail on summary judgment, the moving
party must demonstrate the absence of a disputed issue of material fact. See
Fed.R.Civ.P. 56(c). In considering such a motion, the court is to draw
inferences “from the underlying facts contained in [the moving party’s]
materials … in the light most favorable to the party opposing the
motion.” Lendino, 970 F.2d at 1112. In the instant
case, this Court finds that ADAS has failed to carry its summary judgment
burden. Based on ADAS’s submissions, this Court cannot determine with
any certainty the existence of several of the prerequisites to enforcing the
Bucharest Judgment on comity grounds. For example, this Court has nothing but
the parties’ conflicting statements—neither of which is
submitted with evidentiary support—that the Bucharest Court possessed
jurisdiction over Allstate. In addition, the Bucharest Judgment was allegedly
entered in 1983, long before the Romanian government was democratized, and
therefore this Court cannot find that the Bucharest Judgment was achieved
“under a system of jurisprudence likely to secure an impartial
administration of justice,” Restatement (Second) of Conflict of Laws
§ 98 cmt. c, especially because ADAS has submitted no evidence upon
which this Court could base such a finding. As a result, this Court finds that
ADAS has failed to demonstrate that the Bucharest Judgment should be enforced
under the principles of comity. B. The Executive Order ADAS asserts that pursuant to the Romanian government’s Executive Order ADAS was dissolved and can no longer sue or be sued. (ADAS Memo at 11.) Effective January 1, 1991, the assets and liabilities which appeared on ADAS’s balance sheet as of December 31, 1990, were assumed by the Asigurarea Romaneasca, Astra and Carom entities. Id. at 11-12. ADAS submits an affidavit of Mr. Victor Anagnoste (“Anagnoste”), a purported expert in Romanian law, which asserts that pursuant to Article 40 of Romanian Law No. 31, ADAS had no capacity to sue or be sued after January 1, 1991, the effective date of its dissolution. (ADAS Memo at 12); (Affidavit of Victor Anagnoste, Allstate v. Administratia Asigurarilor de Stat, 86 Civ. 2365 (“Anagnoste Aff.”) ¶ 11 (Mar. 22, 1993).) According to Anagnoste, under Romanian law, “ADAS ceased to exist as a juridical entity on the day of its dissolution.” (Anagnoste Aff. ¶ 11); (ADAS Memo at 12.) In light of the Executive Order, ADAS argues that the “act-of-state doctrine,” compels this Court to grant judgment to ADAS because the Executive Order eliminated ADAS’s capacity to be sued. Id. at 12-13. In Underhill v. Hernandez, 168 U.S. 250, 18 S.Ct. 83,
42 L.Ed. 456 (1897), Chief Justice Fuller set forth the classic statement of
the act of state doctrine: [*427] Every sovereign State is
bound to respect the independence of every other sovereign State, and the
courts of one country will not sit in judgment on the acts of the government of
another done within its own territory. Redress of grievances by reason of such
acts must be obtained through the means open to be availed of by sovereign
powers as between themselves. Underhill, 168 U.S. at 252, 18 S.Ct. at 84; see also 1
Restatement (Third) of Foreign Relations Law § 443 (1988). In Banco
Nacional de Cuba v. Sabbatino, 376 U.S. 398, 84 S.Ct.
923, 11 L.Ed.2d 804 (1964), the second landmark act of state doctrine decision,
the Supreme Court explained the doctrine’s basis. Justice Harlan
reasoned that the act of state doctrine is not compelled by principles of
international law, sovereign authority, or the United States Constitution. Sabbatino, 376 U.S. at
421-24, 84 S.Ct. at 936- 38. Instead, the doctrine arises out of the basic
relationships between branches of government in a system of separation of
powers. It concerns the competency of dissimilar institutions to make and
implement particular kinds of decisions in the area of foreign relations. The
doctrine as formulated in past decisions expresses the strong sense of the
Judicial Branch that its engagement in the task of passing on the validity of
foreign acts of state may hinder rather than further this country’s
pursuit of goals [in foreign relations]. Id. at 423, 84 S.Ct. at 938. The act of state doctrine “is not a jurisdictional limit
of courts,” Siderman de Blake v. Republic of Argentina, 965 F.2d
699, 707 (9th Cir.1992), cert. denied, 507 U.S. 1017, 113 S.Ct. 1812, 123
L.Ed.2d 444 (1993), but rather is “a prudential doctrine designed to
avoid judicial action in sensitive areas.” Liu v. Republic of China, 892 F.2d
1419, 1431 (9th Cir.1989) (quotation omitted), cert. dismissed, 497 U.S. 1058,
111 S.Ct. 27, 111 L.Ed.2d 840 (1990). Moreover, the doctrine is a principle of
federal law which is “binding on federal and state courts alike,”
and which therefore applies even in cases of diversity jurisdiction. See Sabbatino, 376 U.S. at
426-27, 84 S.Ct. at 939-40. In addition, the burden 0of establishing the applicability
of the act of state doctrine rests on its proponent. See Galu v. Swissair,
Swiss Air Transport Co., Ltd., 873 F.2d 650, 653 (2d Cir.1989).
“At a minimum, this burden requires that a party offer some evidence
that the government acted in its sovereign capacity and some indication of the depth
and nature of the government’s interest.” Liu, 892 F.2d at
1432 (emphasis added). In the case at bar, this Court finds that ADAS has not established
that the act of state doctrine renders ADAS immune from suit in an American
court. The only evidentiary item proffered by ADAS in support of its position
is the Anagnoste Affidavit. That affidavit, however, speaks solely in
conclusory terms. For example, it asserts that “[p]ursuant to Romanian
Law No. 31, of January 30, 1954, regarding the status of juridical persons,
ADAS clearly lacks capacity to sue or standing to be sued after the effective
date of its dissolution, January 1, 1991,” (Anagnoste Aff. ¶
11), but provides no supporting rationale for this statement. Such legal
conclusions, even when offered by a competent expert witness, cannot provide
the basis for a grant of summary judgment. See 11 James W. Moore, Moore’s
Federal Practice § 56.14[1] [e][i], at 56-167 (3d ed.1997) (citing Reinke
v. O’Connell, 790 F.2d 850, 851-52 (11th Cir.), reh’g denied, 797
F.2d 982 (1986) (physicians’ affidavits stating merely that they were
not guilty of malpractice were conclusory and not sufficient to support motion
for summary judgment)). Moreover, in his affidavit Anagnoste does not set forth the
underlying facts and methodologies used in drawing his conclusions concerning
the Executive Order. Although Anagnoste states that he “reviewed all
the pleadings, briefs, service of process, orders of court” with respect
to the Bucharest Judgment, and is “fully familiar with the facts and
applicable law in the litigation commenced by ADAS in 1981 against various
defendants in the Court in the City of Bucharest,” (Anagnoste Aff.
¶ 2), these assertions pertain solely to his opinions concerning the
enforceability of the Bucharest Judgment, not to the Executive Order allegedly
dissolving ADAS. It is well-settled that an “expert is required to
inform the court of the facts and reasons [*428] from
which the expert’s opinion was derived so that the court can look
behind the expert’s ‘ultimate conclusion’ …
and analyze the adequacy of its foundation.” 11 Moore §
56.14[1][e][i], at 56-170 (quoting Mid-State Fertilizer Co. v. Exchange Nat’l
Bank of Chicago, 877 F.2d 1333, 1339 (7th Cir.1989) (citation omitted)). Here,
Anagnoste’s affidavit provides only his “ultimate conclusion,”
without explaining the facts and reasons from which that conclusion was
derived. As a result of these omissions, this Court finds that the Anagnoste
Affidavit is an inadequate foundation upon which to base a grant of summary
judgment. Moreover, neither the Anagnoste Affidavit nor any other ADAS
submission addresses the crucial issue of the Romanian or the American
governments’ respective foreign relations interests in this Court’s
not including ADAS as a defendant in this litigation. See Liu, 892 F.2d at
1432. Simply put, ADAS has not met its burden in establishing the applicability
of the act of state doctrine to this case. Accordingly, this Court finds that
ADAS’s motion for summary judgment should be denied. CONCLUSION IT IS HEREBY ORDERED THAT ADAS’s motion for summary
judgment is DENIED. SO ORDERED. |