CDM Smith Inc. v. Atasi

UNITED STATES DISTRICT COURT

DISTRICT OF MASSACHUSETTS

___________________________________

)

CDM SMITH INC., )

)

Plaintiff, )

) Civil Action

v. ) No. 20-cv-12108-PBS

)

KHALIL ATASI, )

)

Defendant. )

)

______________________________ )

MEMORANDUM AND ORDER

March 29, 2022

Saris, D.J.

INTRODUCTION

Plaintiff CDM Smith Inc. (“CDM”) brings this action against

its former employee, Defendant Khalil Atasi, who successfully

litigated a claim for compensation under a Saudi Arabian contract

against CDM in the Kingdom of Saudi Arabia (“KSA”). Alleging that

Atasi was paid twice for the same work, CDM asserts claims under

state law seeking the return of the duplicate wages. CDM claims

unjust enrichment (Count I), money had and received (Count II),

breach of the duty of loyalty and against self-dealing (Count III),

breach of a constructive trust (Count IV), conversion (Count V),

breach of the implied covenant of good faith and fair dealing

(Count VI), negligent and/or intentional misrepresentation (Count

VII), and fraud on the court (Count VIII). CDM also seeks a

declaratory judgment:

(a) that the KSA Instrument did not require CDM to pay

Atasi a salary in addition to the compensation he

received pursuant to his at-will employment arrangement;

and (b) that the KSA Award is not recognized or

conclusive under the Massachusetts Uniform Foreign

Money-Judgment[s] Recognition Act (M.G.L. c. 235 § 23);

and [(c)] ordering Atasi to return the Funds to CDM.

Dkt. 24, ¶ 110.

Atasi has moved to dismiss on the grounds of collateral

estoppel, forum non conveniens, and failure to state a claim as to

several counts. As to collateral estoppel, Atasi argues that all

claims are precluded by the KSA judgment, which is entitled to

recognition and enforcement under Massachusetts’ version of the

Uniform Foreign Money-Judgments Recognition Act (“Massachusetts

Foreign Money-Judgments Recognition Act”). As to forum non

conveniens, Atasi argues that the KSA contract’s forum selection

clause should be enforced via the dismissal of all claims without

prejudice to refiling in the KSA. And Atasi argues that Counts

III, IV, V, VI, and VIII fail to state a claim upon which relief

can be granted.

CDM has moved to strike the expert affidavits on the law of

Saudi Arabia that Atasi filed with his Motion to Dismiss, arguing

that they cannot be considered at the motion-to-dismiss stage and

that at least portions of them are inadmissible under Federal Rules

of Evidence 702 and 403. Atasi responds that the affidavits are

admissible under Federal Rule of Civil Procedure 44.1 for the

determination of foreign law.

After hearing, Plaintiff’s Motion to Strike Defendant’s

Expert Affidavits (Dkt. 51) is ALLOWED IN PART and DENIED IN PART.

Defendant’s Motion to Dismiss (Dkt. 40) is ALLOWED IN PART without

prejudice under the doctrines of collateral estoppel and forum non

conveniens as to Counts III, IV, V, VI, and VIII and DENIED IN

PART as to Counts I, II, and VII.

FACTUAL BACKGROUND

The verified amended complaint alleges the following facts.

In addition, the court considers the rulings of the court in KSA.

See Watterson v. Page, 987 F.2d 1, 3 (1st Cir. 1993) (noting the

rule that courts do not consider documents outside of the complaint

at the motion-to-dismiss stage before explaining that “courts have

made narrow exceptions for documents the authenticity of which are

not disputed by the parties; for official public records; for

documents central to plaintiffs' claim; or for documents

sufficiently referred to in the complaint”).

I. Two Contracts

CDM, an engineering and construction firm in Massachusetts,

hired Khalil Atasi in 2008, pursuant to an at-will employment

contract, as an environmental engineer. At the time of his

discharge in 2018, he was a Senior Vice President and Shareholder.

Atasi’s responsibilities included traveling to various countries

in the Middle East, including the KSA, where he managed the

company’s operations. He was being paid an annual salary of

$228,841 (not including benefits) by CDM’s accounting office in

Massachusetts. He held a power of attorney authorizing him to act

as a fiduciary on CDM’s behalf.

For CDM to hold a KSA Commercial Registration, the person

responsible for the company’s KSA operations, or “General

Manager,” was required to hold a work permit and a residence visa

known as an Iqama. Acquiring these documents required a written

employment contract from the local KSA CDM entity. As such, Atasi

prepared a document, written in both English and Arabic, evidencing

his employment with CDM’s local KSA branch. The document was

executed on September 15, 2015; Atasi asked a CDM employee in KSA

to whom he reported to sign on the company’s behalf. An email

transmitting the document states that the KSA contract’s salary

was intended to “match” his existing U.S. compensation. The KSA

contract contained a forum selection clause that read, “Any

disputes or differences arising between the two contract parties

. . . shall be referred to the competent authorities concerned in

solving the disputes according to the Law of Labor.” Dkt. 40-3 at

13. The next provision made clear that this is the “Law of Labor

of the Kingdom of Saudi Arabia.” Id.

Atasi’s job responsibilities did not change after executing

the KSA contract and he spent less time in the KSA than he had

previously. Prior to his termination, Atasi did not ask for payment

under the KSA contract and never received any. He filed timesheets

for U.S. payroll payments, not the separate timesheets used for

local payroll in the KSA. CDM continued to pay Atasi under his

U.S. contract until it wound down its KSA operations and terminated

Atasi in February 2018.

II. Atasi Sues CDM in the KSA

Shortly after his termination, Atasi commenced a legal action

before the KSA Labor Committee, alleging that the KSA contract was

a separate contract entitling him to payment in addition to his

payment under the U.S. contract. He told the Committee that he had

previously asked for this additional salary to be paid, and that

CDM had told him its KSA bank account was frozen and that he would

receive his payment, and his accumulated vacation time, once all

of the company’s matters in the KSA were addressed. CDM alleges

that Atasi lied to the Committee.

According to CDM, the proceedings were unfair. Under the KSA

Committee’s procedures, CDM was unable to conduct any electronic

or document discovery. No oral testimony was permitted, and the

factual submissions through attorneys were not submitted under

oath.

The KSA Committee found for Atasi, holding:

[T]he plaintiff’s contracts were fundamentally different

as the job title in his contract signed in the United

States of America was under the name (environmental

engineer) with a weekly wage of $ 7308 and the contract

the one executed + [sic] in the Kingdom of Saudi Arabia

under another job title is (General Manager) in the tenth

degree and the monthly wage is (74250) riyals, and

therefore the two contracts are separate from each other

and not as the defendant’s attorney claimed.

Dkt. 40-3 at 35. CDM appealed, unsuccessfully. The KSA Supreme

Committee held:

[T]he argument presented by the company which is based

on claiming that the employment contract is fictitious

and concluded only for completing procedures for the

issuance of Work visa is not considered as a cause for

cancelling what was drawn up and signed between the two

parties, and if the case had been as stated by the

company, it would have drawn up a document proving that

that contract was fictitious, or presented whatever

proofs to support such claim. Also the argument

presented by the company that the employee has not

claimed his wages throughout the period of his work at

the company’s branch in the Kingdom of Saudi Arabia is

not a reason that leads to dropping the right.

. . .

Whereas the basis is the agreement, which was made and

documented by signatures of the two parties, and as the

defendant did not present in its arguments and in its

list of appeal document and subsequent memos whatever

proves that the labor relation is an extension of the

relation with the company without additional

obligations, and as it failed to provide evidence for

all that it has mentioned, and it didn’t present the

email that it has mentioned. So, the Circuit agrees with

what [was] stated by the Primary Commission which stated

that the relation with the branch is an independent

relation which is separate from the relation with the

parent company, and it agrees with it in the judgment

about wages of the employee for his period of work.

Id. at 83–84. CDM was ordered to pay Atasi the equivalent of

$760,744 for his salary under the KSA contract along with an end

of service gratuity payment and compensation for his untaken leave.

CDM paid the KSA Enforcement Court the full amount to avoid further

penalties and made a formal demand upon Atasi to return the funds,

which are now deposited in a Bank of America Account.

DISCUSSION

I. Motion to Strike Defendant’s Expert Affidavits

Atasi attached several exhibits to his Motion to Dismiss,

including the original Arabic court filings and the English

translations of these filings. CDM has moved to strike two

affidavits that were attached to the motion: one by Zikra Bint

Mohammad Bin Abdullah AlQarni, who represented Atasi in the KSA

action, and one by Saad AlMansour, who was not involved in the

action, but whom Atasi describes as “a lawyer with years of

experience practicing in Saudi Arabia and a deep understanding of

both the Saudi and American legal systems.” Dkt. 55 at 2.

CDM argues that these two affidavits should be stricken,

primarily arguing that they cannot be considered on a motion to

dismiss because they introduce facts outside the pleading.

Alternatively, CDM argues they should be stricken as inadmissible

under Federal Rules of Evidence 403 and 702.

As the parties agree, Federal Rule of Civil Procedure 44.1

governs the admissibility of evidence “[w]hen foreign law is

relevant to a case instituted in federal court.” Animal Sci.

Prods., Inc. v. Heibei Welcome Pharm. Co. Ltd., 138 S. Ct. 1865,

1869 (2018). The Rule provides, “In determining foreign law, the

court may consider any relevant material or source, including

testimony, whether or not submitted by a party or admissible under

the Federal Rules of Evidence.” Fed. R. Civ. P. 44.1. This is

because a determination of foreign law “must be treated as a ruling

on a question of law.” Id. CDM does not dispute that Rule 44.1

governs the admissibility of affidavits for the determining of

foreign law, even on a motion to dismiss, but argues that the

fundamental issue raised by the Motion to Dismiss is the

application of the Massachusetts Foreign Money-Judgments

Recognition Act, a state law.

In applying the Massachusetts Foreign Money-Judgments

Recognition Act, a court must determine foreign law. Questions

such as whether KSA tribunals are impartial, whether they use

procedures compatible with the requirements of due process, and

whether they recognize Massachusetts judgments all involve at

least in part questions of law, so Rule 44.1 governs. See Soc’y of

Lloyd’s v. Ashenden, 233 F.3d 473, 477 (7th Cir. 2000) (explaining

that whether a foreign state provides impartial tribunals and

procedures compatible with due process “is not, strictly speaking,

a question of law . . . , but it is a question about the law of a

foreign nation, and in answering such questions a federal court is

not limited to the consideration of evidence that would be

admissible under the Federal Rules of Evidence”).

Insofar as the affidavits help with these determinations of

foreign law, they are admissible under Rule 44.1. See 9A Charles

Alan Wright & Arthur R. Miller, Federal Practice & Procedure § 2444

(3d ed. 2008) (“Since foreign law is an issue to be determined by

the district judge, an expert witness has not been required to

meet any special qualifications.). That said, Rule 44.1 does not

allow for the admissibility of expert testimony that goes beyond

helping the court determine the content of foreign law. See id.

(“Although courts do not strike experts who offer legal

conclusions, the purpose of an expert witness in foreign law is to

aid the court in determining the content of the applicable foreign

law, not to apply the law to the facts of the case.”). The portions

of the affidavits that attempt to introduce facts of the case not

found in the pleadings, rather than the content of foreign law,

are not governed by Rule 44.1 and so will not be considered on

this Motion to Dismiss.

II. Motion to Dismiss

A. Massachusetts Foreign Money-Judgments Recognition Act and

Collateral Estoppel

Atasi argues that the action should be dismissed on the ground

that the action is barred by the doctrine of collateral estoppel

because the KSA judgment is recognizable under the Massachusetts

Foreign Money-Judgments Recognition Act and precludes relitigation

of CDM’s claims. CDM responds that the KSA judgment is not

conclusive under Massachusetts law because it was not rendered

under a system that provides impartial tribunals and procedures

compatible with due process and cannot be recognized under

Massachusetts law because it was procured by fraud, Atasi’s claim

for double salary is repugnant to the public policies of

Massachusetts, and Massachusetts judgments are not recognized in

the KSA. CDM also argues that, even if the KSA judgment is

conclusive and recognizable, Atasi has not met the necessary

elements of collateral estoppel, so the judgment has no preclusive

effect.

1. Massachusetts Foreign Money-Judgments Recognition Act

The Massachusetts Foreign Money-Judgments Recognition Act

provides that “any foreign judgment that is final and conclusive

and enforceable where rendered . . . shall be conclusive between

the parties to the extent that it grants or denies recovery of a

sum of money.” M.G.L. c. 235, § 23A. CDM argues that the following

statutory exceptions apply: a foreign judgment shall not be

“conclusive” if “it was rendered under a system which does not

provide impartial tribunals or procedures compatible with the

requirements of due process of law” and a foreign judgment shall

not be recognized if “the judgment was obtained by fraud,” “the

cause of action on which the judgment is based is repugnant to the

public policy of this state,” or “judgments of this state are not

recognized in the courts of the foreign state.” Id. Whether a

foreign judgment should be recognized must be determined when a

party seeks to rely on the prior adjudication of a controversy,

including under the doctrine of res judicata. See Evans Cabinet

Corp. v. Kitchen Int’l, Inc. 593 F.3d 135, 142 n.8 (1st Cir. 2010).

“The burden of proof in ‘establishing the conclusive effect of a

foreign judgment is on the party asserting conclusiveness.’”

Bridgeway Corp. v. Citibank, 45 F. Supp. 2d 276, 286 (S.D.N.Y.

1999) (holding a foreign system not impartial given an ongoing

civil war) (quoting 11 Jack B. Weinstein et al., New York Civil

Practice ¶ 5302.01 (1998)).

a. System of Impartial Tribunals

The first issue is whether the KSA judgment was rendered under

a system that provides impartial tribunals. To make this

determination, the court must conduct an analysis of the “system”

as a whole, regardless of whether the instant proceedings were

impartial. See Ashenden, 233 F.3d at 477 (“The statute, with its

reference to ‘system,’ does not support . . . a retail approach.”).

But the parties differ in how they view the scope of the “system”:

the judicial system as a whole or just the KSA Labor Courts.

CDM argues that KSA tribunals overall are biased against non-

Muslim litigants and so are not impartial. CDM submitted expert

testimony to address recognition under the Massachusetts Foreign

Money-Judgments Recognition Act, but the affidavit does not

directly address the issue of pro-Muslim bias. CDM’s expert,

Christopher H. Johnson, who has practiced Saudi Law for 43 years

and served as an expert in Saudi Law for the U.S. Department of

Justice, did not discuss any bias, despite being asked to “analyze

what substantive and procedural differences, if any, exist between

the processes and procedures employed by the Commission and that

of the American system of jurisprudence, with particular attention

to . . . the criteria described in the Massachusetts Foreign Money-

Judgments Recognition Act.” Dkt. 50-8, ¶ 15.

CDM cites a section of a recent Department of State report on

the KSA criminal system that found “the law and practice

discriminate against women, noncitizens, nonpracticing Sunni,

Shia, and persons of other religions” in trial procedures. U.S.

Department of State, 2017 Country Reports on Human Rights

Practices: Saudi Arabia 18, state.gov/reports/2017-country-

reports-on-human-rights-practices/saudi-arabia/ (“For example, in

most cases a woman’s testimony before a court counts as only half

that of a man’s. Judges may discount the testimony of nonpracticing

Sunni Muslims, Shia Muslims, or persons of other religions; sources

reported that judges sometimes completely disregarded or refused

to hear testimony by Shia.”). The report raises serious concern

abut the impartiality of the criminal justice system. See

Restatement (Fourth) of Foreign Rel. L. § 483 (“Courts that

systematically discriminate on the basis of factors such as

nationality, race, sex, wealth, political affiliation, or other

status may fail to qualify as impartial tribunals.”). But the

report does not address the impartiality of the KSA Labor Courts.

As to the KSA Labor Courts, a district court held, based on

the undisputed testimony of two expert witnesses, that the Labor

Courts were not an adequate forum because they would only credit

an individual’s testimony if it is corroborated by two adult, male,

Muslim witnesses. Petersen v. Boeing Co., 108 F. Supp. 3d 726, 729

(D. Ariz. 2015) (holding that a forum selection clause was

unenforceable). A Massachusetts court also expressed doubt two

decades ago about KSA forums, also based on undisputed expert

testimony. See Rhodes v. ITT Sheraton Corp., No. Civ.A. 97-4530-

B, 1999 WL 26874, at *3 (Mass. Super. Ct. Jan. 15, 1999) (declining

to dismiss for forum non conveniens on the ground of biases against

women and non-Muslims in Saudi Arabia).

The question of impartiality is a close call. It is disputed

whether the system-wide analysis under the Massachusetts Foreign

Money-Judgments Recognition Act involves all aspects of the

judicial system or just the particular kind of court or procedures

involved in handling the type of dispute at issue. Atasi

convincingly focuses on the KSA civil legal system, and the KSA

Labor Courts in particular, as the system in question. This is the

“system” which must provide impartial tribunals and procedures

compatible with due process for its judgments to be recognized.

CDM’s expert was silent as to any pro-Muslim bias, let alone

in the KSA Labor Courts specifically. Atasi’s expert Almansour,

who has nine years of experience in Saudi Law, stated, “All parties

to a case before the labor commissions are treated equally as the

judges are limited to base their decisions on the Saudi Labor law

and as it is a given all Saudi laws including the Labor law

considers opposing parties equal.” Dkt. 40-4, ¶ 26. On the record

before the Court, Atasi has met his burden in demonstrating that

the KSA Labor Courts provide impartial tribunals.

b. Procedures Compatible with Due Process

The second issue is whether the KSA judgment was rendered

under a system that provides procedures compatible with due process

of law. CDM argues that the procedures of the KSA Committee are

not compatible with due process because they limit discovery and

cross-examination, and primarily limit the formal presentation of

evidence to written submissions, without requiring they be

submitted under oath. See Dkt. 50-8, ¶¶ 22–32 (“It is my

professional opinion that because of the due process limitations

described above, CDM was deprived of the right to a fair and fully

considered determination of all relevant facts consistent with

U.S. Constitutional principles.”). Contrary to the assertion of

CDM’s expert, these procedures are compatible with due process.

See Ashenden, 233 F.3d at 476–77 (“The statute requires only that

the foreign procedure be ‘compatible with the requirements of due

process of law,’ and we have interpreted this to mean that the

foreign procedures are ‘fundamentally fair’ and do not offend

against ‘basic fairness.’”); see also Restatement (Fourth) of

Foreign Rel. L. § 483 cmt. c (Am. L. Inst. 2018) (“[T]he absence

of attorney cross-examination of witnesses or a foreign court’s

primary reliance on written depositions, rather than oral

testimony, does not by itself constitute a fundamentally unfair

approach to the presentation of evidence.”).

c. Fraud on the Court

CDM alleges that the judgment was procured by fraud on the

court, chiefly via falsehoods in the submissions. In the context

of the Massachusetts Foreign Money-Judgments Recognition Act, “the

fraud ‘must relate to matters other than issues that could have

been litigated and must be fraud on the court.’” Soc’y of Lloyd’s

v. Hamilton, 501 F. Supp. 2d 248, 252 (D. Mass. 2007) (quoting

Soc'y of Lloyd's v. Mullin, 255 F. Supp. 2d 468, 473 (E.D. Pa.

2003)). There is fraud on the court “where it can be demonstrated,

clearly and convincingly, that a party has essentially set in

motion some unconscionable scheme calculated to interfere with the

judicial system’s ability impartially to adjudicate a matter by

improperly influencing the trier or unfairly hampering the

presentation of the opposing party’s claim or defense.” Aoude v.

Mobil Oil Corp., 892 F.2d 1115, 1118 (1st Cir. 1989). A party “must

prove ‘the most egregious conduct involving a corruption of the

judicial process itself. Examples are bribery of judges,

employment of counsel to “influence” the court, bribery of the

jury, and the involvement of an attorney (an officer of the court)

in the perpetuation of fraud.’” In re Paternity of Cheryl, 746

N.E.2d 488, 498 (Mass. 2001) (quoting MacDonald v. MacDonald, 552

N.E. 2d 533, 536 (Mass. 1990)).

CDM’s allegations of falsehoods were actually litigated in

the KSA action. See, e.g., Dkt. 40-3 at 28 (“We respond by saying

that what was stated by the plaintiff’s attorney about a new

contract is false.”). Moreover, any such allegations of falsehoods

about the issues in a case would not generally amount to the

egregious conduct of fraud on the court. See Restatement (Fourth)

of Foreign Rel. L. § 484 cmt. d (“False testimony or forged

evidence does not by itself provide a basis for nonrecognition

because it should have been raised and dealt with in the foreign

proceeding.”).

d. Cause of Action Repugnant to Public Policy

CDM argues that Atasi’s cause of action “to fraudulently

leverage a double salary” is repugnant to public policy, Dkt. 50

at 17, but this misstates the cause of action. Atasi brought a

breach of contract claim based on his allegation that he had a

separate KSA contract. Breach of contract is not a cause of action

repugnant to Massachusetts public policy. See Mullin, 255 F. Supp.

2d at 476 (holding a breach of contract action was not repugnant

to public policy, regardless of the facts underlying the cause or

the differences in law in deciding the action because “the Court

must focus on the ‘cause of action’ . . . [which] narrows the scope

of the Court’s inquiry significantly”).

e. Reciprocity

CDM and Atasi’s experts stated opposite conclusions as to

whether U.S. judgments are recognized by KSA courts. Compare

Dkt.50-8, ¶ 39 (“It has been our law firm’s experience that absent

an international treaty, the Saudi Enforcement Court is reluctant

to recognize or enforce foreign judgments.”) with Dkt. 40-4, ¶ 36

(“[C]ourts in Saudi Arabia do enforce judgments from courts of the

United States of America.”) and Dkt. 40-2, ¶ 25 (“I . . . can

attest that the courts of the Kingdom of Saudi Arabia regularly

recognize and enforce [U.S.] judgments.”). Atasi has produced

evidence that United States judgments are recognized by the KSA:

a 2008 KSA decision recognizing and enforcing a D.C. district court

judgment. See Dkt. 81-1 at 12–13 (“[T]he principle of reciprocity

between the Kingdom of Saudi Arabia and the United States of

America exists . . . . Therefore, the Chamber decided to execute

the judgment issued by the US District court for the District of

Columbia.”).1 CDM has failed to produce a single instance of the

1 CDM moved to strike this supplemental authority, arguing that Atasi failed to

obtain leave to file its notice, included redundant argument with the authority,

and failed to provide notice that he intended to raise an issue of foreign law,

as required by Fed. R. Civ. P. 44.1. See Dkt. 83. But Atasi did not raise any

issue of foreign law in filing the notice of supplemental authority; the

question of reciprocity has already been briefed by both parties and the Court

asked the parties at the hearing whether either had proof of reciprocity through

a KSA case enforcing or refusing to enforce an American judgment. The Court

allowed the notice of supplemental authority but refused to consider the

additional briefing on the issues. See Dkt. 86; see also Fed. R. Civ. P. 44.1

KSA refusing to recognize a Massachusetts or United States

judgment. Absent this evidence, its expert affidavit cannot rebut

Atasi’s evidence of reciprocity. The KSA judgment is entitled to

recognition under the Massachusetts Foreign Money-Judgments

Recognition Act.

2. Collateral Estoppel

Atasi moves to dismiss all claims under the doctrine of

collateral estoppel based on the KSA judgment. Under the

traditional approach to collateral estoppel:

When the parties in a subsequent action are the same as

those in a prior one, a party seeking to invoke the

doctrine of issue preclusion needs to establish four

essential elements: “(1) the issue sought to be

precluded must be the same as that involved in the prior

action; (2) the issue must have been actually litigated;

(3) the issue must have been determined by a valid and

binding final judgment; and (4) the determination of the

issue must have been essential to the judgment.”

Keystone Shipping Co. v. New England Power Co., 109 F.3d 46, 51

(1st Cir. 1997) (quoting Grella v. Salem Five Cent Sav. Bank, 42

F.3d 26, 30 (1st Cir. 1994)).

Here, the question of issue preclusion involves only issues

actually decided in the KSA action. See Grella, 42 F.3d at 30 (“The

principle of collateral estoppel, or issue preclusion, bars

relitigation of any factual or legal issue that was actually

decided in previous litigation . . . .”).

(“In determining foreign law, the court may consider any relevant material or

source.”) (emphasis added).

The KSA Committee held that “the two contracts are separate

from each other” and that Atasi was owed money under the terms of

the KSA contract. Dkt. 40-3 at 35. The Supreme Committee agreed,

holding, “[T]he argument presented by the company which is based

on claiming that the employment contract is fictitious and

concluded only for completing procedures for the issuance of Work

visa is not considered as a cause for cancelling what was drawn up

and signed between the two parties.” Id. at 83. While CDM argued

in the KSA litigation that “those tasks that [Atasi] carries out

as a director of the company’s branch in the Kingdom of Saudi

Arabia is among the core of his duties that were contracted with

him in the United States of America,” id. at 74, the KSA Committee

did not actually decide the issue of whether CDM is entitled to an

equitable set-off credit for duplicative pay, nor whether Atasi

breached his duties to CDM in drafting a contract that would

entitle him to unexpected payment and misrepresenting this

intention. Atasi argued in the KSA action that the KSA Committee

had ”nothing to do with his contract in his country [the United

States].” Id. at 35. The KSA Committee agreed. Insofar as the

claims allege a cause of action arising under the KSA contract,

they are barred under the doctrine of collateral estoppel. But the

KSA judgment does not preclude the remaining claims relating to

the U.S. employment contract.

B. Forum Non Conveniens

The Court next addresses Atasi’s argument that all claims

should be dismissed under the forum selection clause in the KSA

contract. The KSA contract contains a forum selection clause that

reads, “Any disputes or differences arising between the two

contract parties . . . shall be referred to the competent

authorities concerned in solving the disputes according to the Law

of Labor.” Dkt. 40-3 at 13. The next provision makes clear that

this is the “Law of Labor of the Kingdom of Saudi Arabia.” Id.

“[T]he appropriate way to enforce a forum-selection clause

pointing to a . . . foreign forum is through the doctrine of forum

non conveniens.” Atl. Marine Constr. Co., Inc. v. U.S. Dist. Ct.

for W. Dist. of Tex., 571 U.S. 49, 60 (2013).

Normally, a defendant moving for dismissal on forum non

conveniens grounds “bears the burden of showing both that an

adequate alternative forum exists and that considerations of

convenience and judicial efficiency strongly favor litigating the

claim in the alternative forum.” Iragorri v. Int’l Elevator, Inc.,

203 F.3d 8, 12 (1st Cir. 2000). As to convenience and efficiency,

“the defendant must show that the compendium of factors relevant

to the private and public interests implicated by the case strongly

favors dismissal.” Id.

A valid forum selection clause alters the forum non conveniens

analysis because the enforcement of bargained for provisions

protects the parties’ legitimate expectations and furthers the

interests of justice; thus “a valid forum-selection clause [should

be] given controlling weight in all but the most exceptional

cases.” Atl. Marine Constr. Co., 571 U.S. at 63 (quoting Stewart

Org., Inc. v. Ricoh Corp., 487 U.S. 22, 33 (1988) (Kennedy, J.,

concurring)). “[T]he plaintiff’s choice of forum merits no weight”

because the plaintiff agreed to a forum through the forum selection

clause. Atl. Marine Constr. Co., 571 U.S. at 63. And the parties’

private interests are not considered at all because, in agreeing

to the clause, “they waive[d] the right to challenge the

preselected forum as inconvenient or less convenient for

themselves or their witnesses, or for their pursuit of the

litigation.” Id. at 64. In fact, “[a] court accordingly must deem

the private-interest factors to weigh entirely in favor of the

preselected forum.” Id. Additionally, “[m]ost courts do not

discuss whether the location identified in an applicable,

mandatory, valid, and enforceable forum-selection clause is

available or adequate,” on the assumption that the parties selected

an adequate forum. Azima v. RAK Inv. Auth., 926 F.3d 870, 875 &

n.2 (D.C. Cir. 2019).

1. Forum Selection Clause

In deciding whether a forum selection clause is enforceable,

the Court first determines whether the clause is mandatory or

permissive, then whether the claims at issue fall within the scope

of the clause, and finally whether the clause should be enforced.

Atlas Glass & Mirror, Inc. v. Tri-North Builder, Inc., 997 F.3d

367, 374–75 (1st Cir. 2021).

a. Mandatory or Permissive

“Permissive forum selection clauses, often described as

‘consent to jurisdiction’ clauses, authorize jurisdiction and

venue in a designated forum, but do not prohibit litigation

elsewhere. . . . In contrast, mandatory forum selection clauses

contain clear language indicating that jurisdiction and venue are

appropriate exclusively in the designated forum.” Rivera v. Centro

Medico de Turabo, Inc., 575 F.3d 10, 17 (1st Cir. 2009) (quoting

14D Charles Alan Wright, Arthur R. Miller & Edward H. Cooper,

Federal Practice and Procedure § 3803.1 (3d ed. 1998)). Contrary

to CDM’s assertions, based on the use of this term “shall,” this

is best understood as a mandatory forum selection clause.

b. Scope of the Clause

With respect to the scope of the clause, the forum selection

clause is broadly written to cover “any” dispute, between the

contracting parties, so claims relating to the KSA contract are

covered by the clause.

CDM argues that the clause extinguished upon Atasi’s

termination and so this dispute outside the parties’ contractual

relationship, particularly as it relates to Atasi’s actions in the

KSA litigation. This misstates the law on forum selection clauses.

See Litton Financial Printing v. NLRB, 501 U.S. 190, 208 (1991)

(“We presume as a matter of contract interpretation that the

parties did not intend a pivotal dispute resolution provision to

terminate for all purposes upon the expiration of the agreement.”)

CDM also argues that some of its claims do not arise under

the KSA Contract and so cannot be governed by it. For example, it

argues that its claim for an “equitable right to a set-off” or “an

offsetting credit” for work under the U.S. contract falls outside

the scope of the KSA contract. Dkt. 50 at 26. I agree that some of

CDM’s claims squarely arise under the separate U.S. contract. Count

I (unjust enrichment) focuses on Atasi’s retention of the funds

“and his at-will salary.” Dkt. 24, ¶ 59. Count II (money had and

received) asks for return of “Funds which in equity and good

conscience should be returned to CDM.” Id. ¶ 63. Insofar as these

claims are based on CDM’s right to recoup for its payment under

the U.S. contract for work that Atasi has already been paid for

under the KSA contract, the claims are outside the scope of the

forum selection clause. Similarly, Count VII (negligent and/or

intentional misrepresentation) focuses on Atasi’s silence during

his at-will employment under the U.S. contract as to “his secret

intention to later seek double compensation under the KSA

Instrument.” Id. ¶ 91. CDM argues that it “continued to pay Atasi

pursuant to the parties’ at-will employment arrangement” in

reliance on Atasi’s misrepresentation. Id. ¶ 94. This claim arises

under the U.S. contract and is outside the scope of the forum

selection clause. Counts I, II, and VII are not dismissed because

they are outside the scope of the forum selection clause and, as

stated above, not barred by collateral estoppel because they were

not decided in the KSA litigation.

On the other hand, claims involving the dispute between the

parties relating to the KSA contract (Counts III, IV, V, VI, and

VIII) fall squarely within the scope of the clause. Most of these

claims are barred under the doctrine of collateral estoppel.

However, to the extent they are not barred, they fall within the

scope of the forum selection clause.

c. Enforceability

CDM argues that even for claims within the scope of the forum

selection clause, the clause is unenforceable. There are four

possible grounds for finding a forum selection clause

unenforceable:

(1) the clause was the product of “fraud or

overreaching”; (2) “enforcement would be unreasonable

and unjust”; (3) proceedings “in the contractual forum

will be so gravely difficult and inconvenient that [the

party challenging the clause] will for all practical

purposes be deprived of his day in court”; or (4)

“enforcement would contravene a strong public policy of

the forum in which suit is brought, whether declared by

statute or by judicial decision.”

Atlas Glass & Mirror, 997 F.3d at 375 (quoting Claudio-de León v.

Sistema Universitario Ana G. Méndez, 775 F.3d 41, 48-49 (1st Cir.

2014)). CDM argues that all four grounds apply.

As to fraud and overreaching, CDM argues that “[a]s the person

responsible for the Employment Contract’s preparation and content,

Atasi abused his authority as CDM’s Senior Vice President to lure

CDM into an ambiguous arrangement whereby he later would demand an

additional salary to which he was not entitled.” Dkt. 50 at 26.

Fraud in this context refers to when “a party’s manifestation of

assent is induced by either a fraudulent or material

misrepresentation by the other party upon which the recipient is

justified in relying.” Rivera, 575 F.3d at 20 (quoting Restatement

(Second) of Contracts § 164 (Am. L. Inst. 1979)). But this

“requires a ‘focused showing’ that the inclusion in the contract

of the forum selection clause itself was ‘the product of fraud or

coercion.’” Atlas Glass & Mirror, 997 F.3d at 376 (emphasis added)

(quoting Huffington v. T.C. Grp., LLC, 637 F.3d 18, 24 (1st Cir.

2011)). CDM fails to argue that the clause itself, as opposed to

the entire contract, was procured by fraud. Overreaching “refer[s]

to one party’s unfair exploitation of its overwhelming bargaining

power or influence over the other party.” Rivera, 575 F.3d at 21.

There is also no evidence that the forum selection clause was

induced by overreaching.

As to enforcement being unreasonable and unjust, CDM argues

that enforcing the clause would undermine goals of predictability

and certainty because the clause is ambiguous as to where disputes

are to be adjudicated. But this is just rehashing its argument

that the forum selection clause is permissive. CDM also argues

that requiring it to return to KSA is unreasonable and unjust

because “CDM once again would be foreclosed from pursuing a jury

trial, cross-examining Atasi, and obtaining discovery essential to

its right of offset.” Dkt. 50 at 28. As stated earlier, this

argument is also unavailing; many foreign countries rely on trial

procedures drastically different from the U.S. system, but this

does not make trial in those countries unjust. See Restatement

(Fourth) of Foreign Rel. L. § 483 cmt. c (“[T]he absence of

attorney cross-examination of witnesses or a foreign court’s

primary reliance on written depositions, rather than oral

testimony, does not by itself constitute a fundamentally unfair

approach to the presentation of evidence.”).

As to difficulty and inconvenience, CDM argues that key

witnesses live and work in Massachusetts and throughout the United

States, that all records are maintained in Massachusetts, that it

is questionable whether a KSA tribunal could have personal

jurisdiction over Atasi, and that the proceedings would be

conducted in Arabic with respect to the claims involving the KSA

contract. This fails to meet the “heavy burden of proof.” In re

Mercurio, 402 F.3d 62, 66 (1st Cir. 2005) (quoting Carnival Cruise

Lines, Inc. v. Shute, 499 U.S. 585, 595 (1991)). Were this enough,

“forum selection clauses would almost never be enforceable, for

inconvenience to at least one of the parties is an almost foregone

conclusion when dealing with a provision that requires litigating

away from one’s home turf.” In re Mercurio, 402 F.3d at 66; see

also Royal Bed & Spring Co., Inc. v. Famossul Industria e Comercio

de Moveis Ltda, 906 F.2d 45, 49 (1st Cir. 1990) (“[A] showing of

inconvenience as to a foreign forum would not be enough to hold a

forum-selection clause unenforceable, especially if that

inconvenience was known or contemplated by the parties at the time

of their agreement.”). And the concern about personal jurisdiction

can be disposed of because Atasi has agreed to “consent to the

personal jurisdiction of the KSA courts for any claims which are

refiled by CDM Smith in Saudi Arabia.” Dkt. 41 at 18; see also

Imamura v. Gen. Elec. Co., 957 F.3d 98, 108 (1st Cir. 2020) (“A

defendant’s ‘concession’ as to amenability to service of process

in the alternative forum is generally sufficient.”).

As to the argument that enforcement would contravene

Massachusetts public policy, CDM argues that this Court has “a

keen interest in preventing Atasi and others like him from gaming

other Massachusetts employers who currently or are planning to do

business in the KSA.” Dkt. 50 at 31. But it cannot be said to

contravene any policy of the Commonwealth to enforce a contractual

provision not procured through fraud. See Cambridge Biotech Corp

v. Pasteur Sanofi Diagnostics, 740 N.E. 2d 195, 201 (Mass. 2000)

(agreeing that a fair and reasonable forum selection clause “in a

freely negotiated international commercial transaction” should be

enforced).

CDM also argues again that KSA evidentiary laws are

discriminatory in contravention of Massachusetts public policy,

citing Petersen v. Boeing Co., 108 F. Supp. 3d 726 (D. Ariz. 2015).

But the Petersen court noted that its conclusion that a KSA forum

was inadequate does not “render the Saudi Labor Courts inadequate

for every dispute” because “[n]ot every claim in Saudi courts rests

on testimonial evidence or lacks male, Muslim witnesses from whom

to procure such evidence.” Id. at 732. Many courts have held that

the KSA provides an adequate forum for employment disputes. See

Alayan v. Permanent Mission of Saudi Arabia to the United States,

no.18-cv-10068, 2021 WL 1964078, at *2 (S.D.N.Y. May 17, 2021)

(“The Court is unable to find Saudi Arabia to be an inadequate

forum for these claims [over severance payments].”); Kamel v. Hill-

Rom Co., Inc., 108 F.3d 799, 803 (7th Cir. 1997) (“Kamel does have

a potential avenue for redress in Saudi Arabia in his breach of

contract action.”); Forsythe v. Saudi Arabian Airlines Corp., 885

F.2d 285, 290 (5th Cir. 1989) (“There is no indication that a Saudi

Arabian forum would treat Forsythe unfairly or deprive him of all

remedies [for wrongful discharge].”). CDM has not demonstrated

that in the context of an employment dispute based on a written

employment contract that it would be discriminated against such

that it could be afforded no relief whatsoever or that the KSA has

substantive law “that is both different and basically unjust.”

Ahmed v. Boeing Co., 720 F.2d 224, 226 (1st Cir. 1983) (Breyer,

J.) (finding Saudi Arabia an adequate alternative forum).

Enforcement would not be contrary to public policy.

In sum, dismissal is appropriate under forum non conveniens,

based on the forum selection clause. CDM has not argued that public

interest factors weigh against dismissal, outside of the arguments

this Court has rejected as to enforceability of the forum selection

clause. This is not the exceptional case where the clause should

not be given controlling weight. See Atl. Marine Constr. Co., Inc.,

571 U.S. at 64 (“Because those [public-interest] factors will

rarely defeat a transfer motion, the practical result is that

forum-selection clauses should control except in unusual cases.”).

C. Failure to State a Claim

Defendant moves to dismiss Counts III, IV, V, VI and VIII for

failure to state a claim. However, all these claims are either

barred by the KSA judgment or fall within the forum selection

clause. Count III alleges that Atasi breached his duty of loyalty

and against self-dealing “by lying to the KSA Committee and falsely

stating in his factual submissions that CDM was required, but

refused, to pay him double for the same work.” Dkt. 24, ¶ 69. Count

VI similarly alleges Atasi breached the implied covenant of good

faith and fair dealing “by lying to the KSA Committee and

misrepresenting to the Committee that the Instrument was intended

to pay him twice for the same work.” Id., ¶ 87. Count IV alleges

that the funds Atasi received in the KSA litigation “represent a

constructive trust, arising by operation of law,” and that his

refusal to return the funds is a breach of the constructive trust.

Dkt. 24, ¶ 75. Count V alleges that Atasi wrongfully converted

CDM’s money by taking the funds awarded in the KSA litigation.

Count VIII alleges that Atasi committed fraud on the (KSA) court,

arguing his “use of the KSA Instrument as a means in which to

improperly double his salary, coupled with his lies to the KSA

Committee [was] an unconscionable scheme calculated to interfere

with the Committee’s ability to impartially adjudicate CDM’s

employment obligations.” Dkt. 24, ¶ 98. These claims are dismissed

without prejudice to refiling in the KSA.

CDM argues that some of these counts are not barred by res

judicata or the forum selection clause, stating that “[b]y focusing

on his post-termination conduct, Atasi ignores the laundry list of

responsibilities that he breached when he was employed by the

company.” Dkt. 50 at 34. As to Counts III and VI, it alleges in

its brief that Atasi breached his duty of loyalty and against fair

dealing and the covenant of good faith and fair dealing by

preparing the KSA contract while intending “to use the document’s

purposeful ambiguity as means in which to leverage a double

salary,” and by failing to inform CDM of his belief that he was

owed a second salary until after his employment was terminated.

Id. However, the complaint only pleads breaches through post-

termination activity, so these arguments fail to support the

claims. Counts III, IV, V, VI and VIII are dismissed without

prejudice.

ORDER

For the reasons stated above, Plaintiff’s Motion to Strike

Defendant’s Expert Affidavits (Dkt. 51) is ALLOWED IN PART and

DENIED IN PART. Defendant’s Motion to Dismiss (Dkt. 40) is ALLOWED

IN PART without prejudice as to Counts III, IV, V, VI, and VIII

under the doctrines of collateral estoppel and forum non conveniens

and DENIED IN PART as to Counts I, II, and VII.

SO ORDERED.

/s/ PATTI B. SARIS

Hon. Patti B. Saris

United States District Judge