Celestin v. Martelly

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF NEW YORK

ODILON S. CELESTIN, WIDMIR ROMELIEN,

MARIE LUCIE ST VIL, GORETTIE ST VIL,

JEANNETTE VALEUS, GUETTY FELIN, HERVE

COHEN, and on behalf of all others similarly situated,

Plaintiffs,

v.

MICHEL JOSEPH MARTELLY, JOCELERME

PRIVERT, JOVENEL MOISE, THE WESTERN MEMORANDUM AND ORDER

UNION COMPANY, d/b/a Western Union Holdings, 18-CV-7340 (LDH) (PK)

Inc., Western Union Financial Services, Inc., and

through other subsidiaries and affiliates,

CARIBBEAN AIR MAIL, INC., d/b/a CAM,

UNIBANK, S.A., UNITRANSFER USA, INC.,

UNIGESTION HOLDING, S.A., d/b/a/ DIGICEL

HAITI, NATCOM S.A., and THE GOVERNMENT

OF HAITI,

Defendants.

LASHANN DEARCY HALL, United States District Judge:

Plaintiffs, on behalf of putative nation-wide and state-specific classes, bring claims

against Defendants Natcom S.A., Michel Joseph Martelly, Jocelerme Privert, Jovenel Moise and

the Government of the Republic of Haiti (collectively, “Moving Defendants”) for violations of

federal antitrust laws and various state laws. Moving Defendants move pursuant to Rule

12(b)(6) of the Federal Rules of Civil Procedure to dismiss the complaint in its entirety.

BACKGROUND1

Plaintiffs allege that in April 2011, Martelly, the then-President-elect of Haiti, devised a

“wide-ranging scheme” to impose fees and fix prices on money transfers, food remittances, and

1 The following facts are taken from the second amended complaint and are assumed to be true for the purpose of

this memorandum and order.

international calls made to and from Haiti. (Sec. Am. Compl. ¶¶ 3, 4, 72, 170, 221, ECF No.

62.) While Martelly is alleged to be the “principal architect and ringleader” of the conspiracy,

Privert and Moise, who each succeeded Martelly, are alleged to have “adopted as his own the

acts and conducts [sic]” of Martelly and continued in perpetrating the scheme. (Id. ¶¶ 23, 170,

197, 206.)

Defendants Caribbean Air Mail, Inc., Unibank S.A., Unitransfer USA Inc., Unigestion

Holding, S.A., d/b/a Digicel Haiti, Western Union Company,2 (“Dismissed Defendants”) and

Natcom allegedly colluded with Martelly regarding three Haitian governmental instruments,

which were drafted to effectuate Martelly’s scheme: two circulars issued by the Central Bank of

Haiti (the “BRH”), which together imposed a $1.50 fee on money transfers and food remittances

made to Haiti from the United States, Canada, Turks and Caicos, and the Bahamas; and a

presidential order, which mandated a $0.05 per-minute fee be added to the cost of international

phone calls made into Haiti (together, the “Fees”). (Id. ¶¶ 56, 66, 68, 71, 72, 181, 222.) Circular

98 and Circular 7 were signed by the Governor of the BRH, Charles Castel. (June 12, 2019

Declaration of Marcel Denis (“Denis Decl.”), Ex. D, ECF No. 65-1.). The Presidential Order

was signed by Martelly, Prime Minister Joseph Jean-Max Bellerive, and the Minister of Public

Works, Transportation and Communications, Jacques Gabriel. (Id., Ex. C.)

Martelly allegedly embezzled monies collected through the Fees with the aid of Unibank

S.A., which extended Martelly a $9 million loan to build a beach house as a means of

transferring a portion of the proceeds from the $1.50 wire transfer fee. (Sec Am. Compl. ¶¶

165–66.) Privert and Moise allegedly “profited from the scheme in the same manner” as

2 The Court previously dismissed Plaintiffs’ claims against Defendants Caribbean Air Mail, Inc., Unibank S.A.,

Unitransfer USA Inc., Unigestion Holding, S.A., d/b/a Digicel Haiti, and Western Union Company. (See March 31,

2020 Mem. & Order, ECF No. 73.)

Martelly. (Id. ¶¶ 197, 206.) The Government of Haiti purports to receive at least an estimated

$132 million per year from the Fees, (id. ¶ 180), but there has been no public accounting

detailing the amount of funds collected and remitted to the Haitian government nor an

explanation of how the funds were used in Haiti once remitted. (Id. ¶¶ 84, 86, 117, 132, 147,

167, 203.)

STANDARD OF REVIEW

To withstand a Rule 12(b)(6) motion to dismiss, a complaint “must contain sufficient

factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft

v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570

(2007)). A claim is facially plausible when the alleged facts allow the court to draw a

“reasonable inference” of defendants’ liability for the alleged misconduct. Id. While this

standard requires more than a “sheer possibility” of defendants’ liability, id., “[i]t is not the

Court’s function to weigh the evidence that might be presented at trial” on a motion to dismiss.

Morris v. Northrop Grumman Corp., 37 F. Supp. 2d 556, 565 (E.D.N.Y. 1999). Instead, “the

Court must merely determine whether the complaint itself is legally sufficient, and, in doing so,

it is well settled that the Court must accept the factual allegations of the complaint as true.” Id.

(citations omitted).

DISCUSSION

Moving Defendants press that, consistent with the law of the case doctrine, the claims

against them should be dismissed under the act of state doctrine for the same reasons as stated in

its prior Memorandum and Order (“Celestin I”).3 (Joint Mem. L. Supp. Defs.’ Mot. Dismiss

(“Defs.’ Mem.”) 3–5, ECF No. 87.) The Court agrees.

3 On March 10, 2021, the Court vacated its March 31, 2020 memorandum and order and issued a corrected opinion

clarifying one aspect of its analysis. (ECF No. 94.) All other analysis—including that cited by Plaintiffs in arguing

“The doctrine of the law of the case posits that if a court decides a rule of law, that

decision should continue to govern in subsequent stages of the same case.” Aramony v. United

Way of Am., 254 F.3d 403, 410 (2d Cir. 2001) (internal quotations omitted). Of course, the law

of the case doctrine “does not rigidly bind a court to its former decisions, but is only addressed to

its good sense.” Johnson v. Holder, 564 F.3d 95, 99 (2d Cir. 2009) (quoting Higgins v. Cal.

Prune & Apricot Grower, Inc., 3 F.2d 896, 898 (2d Cir. 1924) (L. Hand, J.)). “Cogent or

compelling reasons,” to depart from the law of the case include “change in law, availability of

new evidence, or the need to correct a clear error or prevent manifest injustice.” Id. at 99–100

(internal citations omitted).

Here, the Court previously dismissed the second amended complaint against Dismissed

Defendants under the act of state doctrine, as the relief Plaintiffs sought required the Court to

declare an official act of a foreign sovereign performed within its own territory invalid. (Celestin

I at 5.) This rule of law applies with equal force to the instant motion. The law of the case

doctrine, therefore, requires that Celestin I govern, and under the law of the case doctrine, the

case should be dismissed against the Moving Defendants on the same grounds. Nevertheless,

Plaintiffs argue that there are cogent and compelling reasons for the Court to disturb its prior

ruling regarding the act of state doctrine. (Pls.’ Opp’n Def.’s Mot. Dismiss (“Pls.’ Opp’n”) 3,

ECF No. 88.) Specifically, Plaintiffs contend that in finding that the Circulars and Presidential

Orders were acts of state, the Court overlooked Sharon v. Time, Inc., and misinterpreted Kashef

v. BNP Paribas S.A., constituting clear error. (Id.) Not so.

Sharon v. Time, Inc. addressed allegations that Israel’s Minister of Defense, Ariel Sharon,

approved or condoned a massacre of refugees in Lebanon perpetrated by a non-Israeli militia

against the application of the law of the case—remains unchanged. Page citations to Celestin I refer to the page

numbers in the corrected opinion. (ECF No. 94.)

group. 599 F. Supp. 538, 542, 544 (S.D.N.Y. 1984). There, Sharon was alleged to have gone

beyond his authority in the campaign in Lebanon. Id. at 544. Citing Filartiga v. Pena-Irata, the

Sharon court found that the act of state doctrine did not apply because “the actions of an official

acting outside the scope of his authority as an agent of the state are simply not acts of state.” Id.

at 544–45. Sharon is easily distinguishable. Unlike in the instant case, in Sharon, there was no

ratified governmental instrument approving or condoning the conduct at issue. This is no small

point. Indeed, in Filartiga v. Pena-Irata, the case upon which Sharon relies, the court noted in

dicta that it is where actions violate a foreign constitution and laws, and are “wholly unratified

by that nation’s government,” that the act of state doctrine will not apply. 630 F.2d 876, 889 (2d

Cir. 1980). In Celestin I, the Court cited this language and properly distinguished Filartiga from

the instant action, as here, the Circulars and Presidential Order were ratified by Haitian

government officials. (See Celestin I at 7-8.) Accordingly, Sharon and its cited authority

provide no basis for the Court to disturb its prior ruling.

Plaintiffs’ argument related to Kashef v. BNP Paribas S.A is likewise unavailing. In

particular, Plaintiffs direct the Court to Kashef’s statement that, “[g]iven our precedent, acts that

flagrantly violate a foreign state’s own laws cannot, at the same time, constitute official acts

entitled to deference.” (Pls.’ Opp’n 3 (quoting Kashef v. BNP Paribas S.A, 925 F.3d 53, 61 (2d

Cir. 2019)). However, the relevant passage in full states:

BNPP makes absolutely no showing that the atrocities committed against the

Plaintiffs were the officially sanctioned policies of Sudan. They point to no statute,

decree, order, resolution, or comparable evidence of sovereign authorization for

any of the actions in question. On the contrary, the atrocities alleged to have

occurred unquestionably violated Sudanese law. . . . In Filartiga v. Pena-Irala, we

made clear that “we doubt whether action by a state official in violation of [its]

Constitution and laws . . . and wholly unratified by [its] government, could properly

be characterized as an act of state.” 630 F.2d 876, 889 (2d Cir. 1980). Given our

precedent, acts that flagrantly violate a foreign state’s own laws cannot, at the same

time, constitute official acts entitled to deference.

Id. at 61 (internal citation omitted). Plaintiffs have simply cherry-picked what they deemed

useful language for their argument in utter disregard of the thrust of the Kashef court’s opinion.

As explained in detail in Celestin I, the Second Circuit’s finding in Kashef was driven by the fact

that there was no officially sanctioned policy authorizing the genocidal conduct. (Celestin I at 8-

9 (citing Kashef, 925 F.3d at 61).) Having found that the conduct was neither ratified nor the

sanctioned policy of Sudan, the Kashef court commented that non-ratified conduct that clearly

violated a country’s own constitution and laws could not be characterized as an act of state. Id.

Again, here, the Circulars and Presidential Order, which were allegedly used to

perpetuate the scheme, were ratified by Haitian government officials. (Denis Decl., Ex. C & D.)

Plaintiffs do not direct the Court to any case in which a court has even endeavored to determine

whether an instrument of a foreign government was ratified in contravention of that

government’s constitution. And, this Court does not find that it would be proper to do so. See

Banco Nacional de Cuba v. Sabbatino, 376 U.S. 398, 415 n.17 (1964) (“The courts below

properly declined to determine if issuance of the [Cuban] expropriation decree complied with the

formal requisites of Cuban law.”). Accordingly, neither Sharon (and its cited authority) nor

Kashef provide a basis to find clear error in its prior determination, and Plaintiffs fail to advance

any other legally cognizable theory upon which the court could rely on to disregard the law of

the case doctrine. As this Court previously held, the act of state doctrine applies to Plaintiffs’

claims and warrants their dismissal.4

4 Having dismissed the second amended complaint against Moving Defendants under the act of state doctrine

pursuant to the law of the case, the Court need not address Moving Defendants’ arguments for dismissal under

forum non conveniens. Accordingly, the Court has not considered Plaintiffs’ motions requesting the Court take

judicial notice of various materials supporting its arguments in opposition to dismissal under forum non conveniens.

(ECF Nos. 91, 93.)

CONCLUSION

For the foregoing reasons, Moving Defendants’ motion to dismiss is GRANTED, and the

complaint is dismissed in its entirety.

SO ORDERED.

Dated: Brooklyn, New York /s/ LDH

March 10, 2021 LASHANN DEARCY HALL

United States District Judge