# Celestin v. Martelly

> District Court, E.D. New York · March 10, 2021

URL: https://www.frixlaw.com/law-library/cases/10306104

## Case

- **Court:** District Court, E.D. New York
- **Decided:** March 10, 2021
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

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## Opinion text

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 CORRECTED MEMORANDUM
PRIVERT, JOVENEL MOISE, THE WESTERN AND ORDER
UNION COMPANY, d/b/a Western Union 18-CV-7340 (LDH) (PK)
Holdings, 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 Caribbean Air Mail, Inc., Unibank S.A., Unitransfer USA Inc., Unigestion
Holding, S.A., d/b/a Digicel Haiti, and Western Union Company (collectively “Defendants”) for
violations of federal antitrust laws, and various state laws.1 Defendants move pursuant to Rule

1 Plaintiffs also assert claims against the Government of Haiti, the current President of Haiti (Jovenel Moise), two
former Presidents of Haiti (Michel Joseph Martelly and Jocelerme Privert), and Natcom, a telecommunications
company (“Non-Moving Defendants”). (See 2d Am. Compl., ECF No. 62.) None of the Non-Moving Defendants
have been served in this matter, which was initially filed on December 24, 2018. (See ECF No. 1.) As it has been
over 460 days since the complaint was filed, absent good cause shown, failure to execute service on the Non-
Moving Defendants within fourteen (14) days of this memorandum and order will result in dismissal of the case
against the Non-Moving Defendants. See Fed. R. Civ. P. 4(m).
12(b)(6) of the Federal Rules of Civil Procedure to dismiss the case in its entirety under the act
of state doctrine and alternatively, pursuant to the doctrine of forum non conveniens.2
BACKGROUND3
Plaintiffs allege that in April 2011, Michel Joseph Martelly, the then-President-elect of
Haiti, devised a “wide-ranging scheme” to impose fees and fix prices on money transfers, food

remittances, and international calls made to and from Haiti. (2d Am. Compl. (“SAC”) ¶¶ 3, 4,
72, 170, 221, ECF No. 62.) While Martelly is alleged to be the “principal architect and
ringleader” of the conspiracy, Jocelerme Privert and Jovenel Moise, who each succeeded
Martelly, “adopted as his own the acts and conducts [sic] of his predecessor” and continued in
perpetrating the scheme. (Id. ¶¶ 170, 197, 206.)
The scheme allegedly began before Martelly took the presidential oath. (Id. ¶ 171.)
According to the complaint, Martelly contacted telecommunication companies, including
Defendant Digicel Haiti, and requested that they add a $0.05 fee per minute on all phone calls
originating from the United States and Europe. (Id.) They agreed. (Id.) Martelly also met with
money transfer operators and commercial banks, including Defendants Caribbean Air Mail, Inc.,

Unibank S.A., Unitransfer USA Inc., and Western Union, to strike an anticompetitive agreement
to illegally raise the fee to remit money to Haiti by $1.50. (Id. ¶ 174.) Ultimately, Defendants
each colluded with Martelly to draft three Haitian governmental instruments 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

2 The Defendants raised a number of other grounds for dismissal in their pre-motion conference letters. (See ECF
Nos. 38, 39, 48, 51, 58.) At the pre-motion conference on April 10, 2019, and in the subsequent minute entry and
order issued on April 12, 2019, the Court limited Defendants’ briefing to the act of state doctrine and forum non
conveniens without prejudice to Defendants to make a subsequent motion to dismiss on other grounds, if necessary.
3 The following facts are taken from the second amended complaint and are assumed to be true for the purpose of
this memorandum and order. (ECF No. 62.)
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.)
The first circular, known as Circular 98, was issued on May 20, 2011, and imposed
“testing, certification, user and inspection fees” of $1.50 on money transfers into and out of

Haiti. (Id. ¶ 66.) In particular, under Circular 98, money transfer operators must: (1) make
monthly filings with the BRH of certified copies of reports detailing the total amounts filed with
the regulatory body of the territories where they are licensed to operate; and (2) collect a $1.50
fee on money transfers and food remittances. (Id. ¶¶ 67-68.) The second circular, Circular 7,
was issued on May 31, 2011. (Id. ¶ 113.) According to the complaint, Circular 7 was issued to
address a term omitted from Circular 98. (Id. ¶¶ 69, 70, 113.) Specifically, Circular 7 provides
that “[t]he fees will be collected at the source from all money transfer [sic] sent and received
(cash or in kind) from overseas” and are to be collected from individuals in the United States,
Canada, Turks and Caicos, and the Bahamas. (Id. ¶¶ 70-71.) On September 14, 2011, Martelly

issued the Presidential Order, which provides that “the floor price for all incoming international
call[s] is hence forth fixed at US$0.23 per minute.” (Id. ¶¶ 59-60.) The Presidential Order
further requires that $0.05 of the $0.23 are to be turned over to CONATEL, Haiti’s
telecommunication regulatory agency. (Id. ¶ 61.) According to Article 3 of the Presidential
Order, the purpose of the $0.05 fee is to help CONATEL fight against telephone fraud. (Id. ¶
62.)
Plaintiffs claim that Circulars 98 and 7 (together, the “Circulars”) and the Presidential
Order “ran afoul of the laws of Haiti” because “only the parliament may raise taxes and fees for
the benefit of the state.” (Id. ¶ 57 & n.6.) Furthermore, while Martelly “promoted, marketed,
advertised and sold” the Fees to the public as “necessary to finance free education for
impoverished children,” Martelly knew that neither his Presidential Order nor the Circulars
contain language “relating to tax or funding education.” (Id. ¶¶ 58, 184.) Defendants aided
Martelly in misleading the public by advertising and collecting the Fees as lawful taxes levied to
fund free education in Haiti. (Id. ¶¶ 73, 96, 98, 108, 109, 119, 124, 136, 141, 149, 169, 190, 198,

208.) According to the complaint, a program to fund free education in Haiti does not exist. (Id.
¶ 204.) Instead, Martelly allegedly embezzled monies collected through the Fees with the aid of
Defendant 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. (Id. ¶¶ 165-66.)
In return for their part in the scheme, Defendants allegedly retained a portion of the Fees. (Id. ¶¶
85, 116, 131, 146, 163, 195, 206, 209). And while the Government of Haiti purports to receive
at least an estimated $132 million per year from the Fees, (Id. ¶ 180), 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 to the BRH. (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 a 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
The act of state doctrine “precludes the courts of this country from inquiring into the

validity of the public acts a recognized foreign sovereign power committed within its own
territory.” Banco Nacional de Cuba v. Sabbatino, 376 U.S. 398, 401 (1964). The doctrine is “a
consequence of domestic separation of powers, reflecting, 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 the
conduct of foreign affairs.” W.S. Kirkpatrick & Co. v. Envtl. Tectonics Corp., Int'l, 493 U.S.
400, 404 (1990). Thus, the act of state doctrine applies where “the relief sought or the defense
interposed would [] require[] a court in the United States to declare invalid the official act of a
foreign sovereign performed within its own territory.” Id. at 405. Defendants maintain that the
relief sought in this case would require just that. (Joint Mem Law Supp. Defs.’ Mot. Dismiss
Pl’s Second Am. Class Action Compl. (“Defs.’ Mem.”) at 5-7, ECF No. 64-1.) More to the

point, Defendants argue that the act of state doctrine applies because the Court cannot adjudicate
Plaintiffs’ claims without necessarily judging the propriety of official actions of Haiti’s
government and its leaders.4 (Id. at 7.) The Court agrees.
“To qualify as official, an act must be imbued with some level of formality, such as the
authorization by the foreign sovereign through an official statute, decree, order or resolution.”

4 The act of state doctrine is an affirmative defense. Konowaloff v. Metro. Museum of Art, No. 10-CV-9126, 2011
WL 4430856, at *5 (S.D.N.Y. Sept. 22, 2011), aff’d, 702 F.3d 140 (2d Cir. 2012), cert. denied, 570 U.S. 906 (2013).
The assertion of the act of state doctrine defense does not alter the standard of review on a 12(b)(6) motion, in which
the Court determines its applicability based on the pleadings alone. See Bigio v. Coca-Cola Co., 239 F.3d 440, 451
(2d Cir. 2000) (“[T]he act of state doctrine is not jurisdictional.”). “The burden of proof rests on Defendants to
justify [its] application.” Id. at 453.
Kashef v. BNP Paribas S.A., 925 F.3d 53, 60 (2d Cir. 2019). Indeed, these sorts of instruments
have been expressly contemplated by the Supreme Court and have been requisite to the
application of the doctrine in “every Supreme Court case” that has addressed this issue. Id.
(collecting Supreme Court cases). Accordingly, in assessing the applicability of the act of state
doctrine, courts must determine whether a defendant can point to any “statute, decree, order,

resolution or comparable evidence of sovereign authorization for any of the actions in question”
to show that the act was “the official policy” of the foreign sovereign. Id. at 61. The doctrine
has been invoked with respect to Bolshevik nationalization decrees issued in 1918 in Russia,
which resulted in the seizure of a painting from a private household. See Konowaloff, 2011 WL
4430856, at *5. It has also been invoked with respect to the Russian government’s assignment of
the “Stolichnaya” trademarks to a quasi-governmental entity, Fed. Treasury Enter.
Sojuzplodoimport v. Spirits Int'l B.V., 809 F.3d 737, 744 (2d Cir. 2016) (hereinafter “FTE”), and
a Cuban expropriation decree related to sugar, Banco Nacional, 376 U.S. at 401, 436-437.
Here, the Circulars and Presidential Order, which were allegedly used to perpetuate the

scheme, were ratified by Haiti’s government officials. Circular 98 and Circular 7 were signed by
Governor of the BRH Charles Castel. (Declaration of Marcel Denis (“Denis Decl.”), Ex. D, ECF
No. 65-1.)5 The Presidential Order was signed by then-President Martelly, Prime Minister
Joseph Jean-Max Bellerive, and the Minister of Public Works, Transportation and
Communications Jacques Gabriel. (Id., Ex. C.) These governmental instruments are imbued
with a high “level of formality,” and are the exact types of official governmental instruments

5 The Court may consider the Circulars and Presidential Order because Plaintiffs’ complaint “relies heavily upon
[their] terms and effect” and they are therefore “essential to the litigation.” Palin v. New York Times Co., 940 F.3d
804, 811 (2d Cir. 2019); see also Nicoisa v. Amazon.com, Inc., 834 F.3d 220, 234 (2d Cir. 2016) (an “order page”
and “conditions of use” agreement were integral to the complaint when the complaint contained numerous
references to them).
contemplated by the Supreme Court as representative of official government action. See Kashef,
925 F.3d at 60 (collecting Supreme Court cases).
Nonetheless, Plaintiffs ask this Court to entertain their claims arguing that because the
“very tool used to obtain the funds [stolen from Plaintiffs] violated the laws of Haiti,” the act of
state doctrine does not apply. (Pls.’ Mem. Law Opp. Defs.’ Mot. Dismiss Pls.’ Am. Class Action

Compl. (“Pls.’ Opp.”) 9-10.) Plaintiffs’ argument ignores precedent that prohibits inquiry into
the propriety of a sovereign action. For example, in Konowaloff, the plaintiff advanced an
argument similar to the one made here. 2011 WL 4430856 at *5. In determining that the act of
state doctrine applied, the court made plain that whether an act constitutes an “official act does
not turn on the legitimacy or illegitimacy of governmental purposes,” as the “act of state doctrine
prohibits just such an inquiry into the purpose of an official act.” Id. at 6; see also Banco
Nacional, 376 U.S. at 431 (“[T]he act of state doctrine is applicable even if international law has
been violated.”); see also id., at 415, n.17 (“The courts below properly declined to determine if
issuance of the [Cuban] expropriation decree complied with the formal requisites of Cuban

law.”).
Moreover, the Court has considered the cases relied upon by Plaintiffs in pressing their
argument but remains unpersuaded that the inquiry urged by them is appropriate or that the act of
state doctrine is inapplicable here. In Filartiga v. Pena-Irala, the act of state doctrine was not an
issue before the court on appeal because the argument was not raised before the district court.
630 F.2d 876, 889 (2d Cir. 1980). In any event, the facts are distinguishable. There, a father and
daughter brought action against the former Inspector General of Police in Asuncion, Paraguay
for wrongfully causing the death of their son/brother by kidnapping and torturing him. Id. at
878. The Second Circuit—in deciding the case on other grounds—noted “in passing,” that “we
doubt whether action by a state official in violation of the Constitution and laws of the Republic
of Paraguay, and wholly unratified by that nation's government, could properly be characterized
as an act of state.” Id. at 889 (emphasis added). Again, the Circulars and Presidential Order in
this case were ratified by Haitian government officials
This case is also patently different from Liu v. Republic of China, 892 F.2d 1419 (9th Cir.

1989). In Liu, the Republic of China (“ROC”) was alleged to have orchestrated the assassination
of an American citizen on American soil. 892 F.2d at 1432. In rejecting the applicability of the
doctrine there, the court held that the act of state doctrine did not automatically bar a suit against
the ROC where the “foreign government ordered the assassination of an American citizen within
the United States.” Id. The Ninth Circuit observed that abstention pursuant to the act of state
doctrine was not necessary there because “judg[ing] the legality and propriety of an
[assassination] that occurred within the borders of the United States . . . would hardly affront the
sovereignty of a foreign nation.” Id. at 1433. Liu’s holding is so narrow on its face that it is
wholly unhelpful here.

Conversely, Kashef, a recent Second Circuit decision addressing the act of state doctrine,
illustrates well the distinction between cases where the doctrine should be rejected as a defense
and those to which it rightly applies. The Kashef court considered the application of the act of
state doctrine to claims brought by victims of genocide in Sudan for tortious conduct such as
rape, torture, deliberate infection with HIV, and other atrocities. 925 F.3d at 57. The court
specifically inquired into whether the atrocities were “the officially sanctioned policies of
Sudan.” Id. at 61. In a searching analysis, the court found that the defendant could “point to no
statute, decree, order, resolution or comparable evidence of sovereign authorization for any of
the actions in question,” or any other evidence to show that genocide was “the official policy of
Sudan.” Id. As such, the court reversed the district court and held the act of state doctrine did
not apply. Id. While the court went on to reason that the fact that the genocidal actions violated
the Sudanese constitution bolstered its finding, the rejection of the defense did not turn on this
fact. Id. Rather, the decision turned on the court’s finding that no official action had occurred.
Id. Simply put, that is not the case here and the doctrine applies.

In a futile effort to avoid the application of the act of state doctrine, Plaintiffs advance
two additional arguments, neither of which is persuasive. First, Plaintiffs advance a theory that
the Fees charged on American-based customers attempting to send wire transfers or place
international phone calls to Haiti constitute “conduct outside [the United States’] territory that
has or is intended to have substantial effect within its territory.” (Pl.’s Opp. 7 (quoting Third
Restatement of Foreign Relations Law of the United States § 403 (1987)).) In other words,
according to Plaintiffs, the Fees are a taking of property in the United States by the Haitian
government barring the applicability of the act of state doctrine. (Pl.’s Opp. 6.) To be sure, the
act of state doctrine does not apply to “attempts by foreign sovereigns to confiscate property

located in the United States.” FTE, 809 F.3d at 744; see also Films by Jove, Inc. v. Berov, 341 F.
Supp. 2d 199, 207 (E.D.N.Y. 2004) (“[I]t is well-settled law that the act of state doctrine does
not extend to takings of property located outside the territory of the acting state at the time of the
taking.” (collecting cases)). The reason for this rule is well articulated. When another state
attempts to seize property held in the United States, “the foreign sovereign is acting beyond its
enforcement capacity” and courts may look to the laws of the United States “to determine the
reach of the foreign sovereign’s proscriptions.” Bandes v. Harlow & Jones, Inc., 852 F.2d 661,
666 (2d Cir. 1988). However, the scheme here does not mandate the seizure of property held in
the United States. Rather, the Circulars and Presidential Order, when enacted, constituted a
prospective tax scheme on future money transfers, food remittances, and international calls from
the United States. Stated another way, the Fees did not, in and of themselves, impair anyone’s
existing property right at the time they were imposed. See FTE, 809 F.3d at 744 (finding that the
assignment of the trademarks to a quasi-governmental entity, where the purpose of that
assignment was to give the entity standing to bring a Lanham Act claim against United States

distributors, was an act of state because the Russian decree effectuating the assignment did not
“impair[] anyone's property rights or affects the jurisdiction of the United States courts to decide
the competing claims to ownership of the [trade]marks”).
Second, Plaintiff advances a theory that the imposition of the Fees was an act committed
in the course of purely commercial operations, and thus is immune from the act of state doctrine.
(Pl.’s Opp. 11.) However, as the Second Circuit has recently stated, “neither the Supreme Court
nor [the Second Circuit] has ever concluded that there is a commercial exception to the act of
state doctrine.” FTE, 809 F.3d at 744. And, even if the commercial exception were to exist,
Plaintiff offers no basis to conclude that it would apply to the Fees levied by the Haitian

Government. In sum, Defendants have met their burden of establishing that the act of state
doctrine bars Plaintiffs’ claims.6

6 Defendants also move in the alternative to dismiss the complaint pursuant to the doctrine of forum non conveniens.
(Defs.’ Mem. 7-20.) A ruling on such a motion is a fact-intensive inquiry that proceeds in three steps. “The district
court must: (i) determine the degree of deference to be accorded to plaintiff’s choice of forum; (ii) determine
whether an adequate alternative forum to entertain plaintiff's claims exists; and (iii) balance the private and public
interest factors[.]” Base Metal Trading Ltd. v. Russian Aluminum, 98 F. App’x 47, 49 (2d Cir. 2004). The Court has
reviewed the parties’ submissions and finds that forum non conveniens also mandates dismissal. First, special
deference is not given to Plaintiffs’ choice of forum because in relation to the “core operative facts in dispute [the
parties and events] at best [] have only marginal links to [P]laintiffs’ selected forum.” Corporacion Tim, S.A. v.
Schumacher, 418 F. Supp. 2d 529, 534 (S.D.N.Y. 2006), aff’d sub nom., Corp. Tim, S.A. v. Schumacher, 223 F.
App’x 37 (2d Cir. 2007). Second, the Court is not persuaded that Haiti is “not an adequate alternative forum in
which the present dispute can be litigated.” (Pls.’ Opp. 14.) As Defendants urge, “American courts should be wary
of branding other nations’ judicial forums as deficient in the substance or procedures that their laws contain.”
Corporacion Tim, 418 F. Supp. 2d at 532–33. Plaintiff has failed to show that Haiti has “inadequate procedural
safeguards,” and without such a showing, a finding [of forum non conveniens] is rare.” PT United Can Co. v.
Crown Cork & Seal Co., 138 F.3d 65, 73 (2d Cir. 1998). In considering whether Haiti is an adequate alternative
forum, the Court takes judicial notice of the Congressional Hearing Testimony before the Congressional Committee
CONCLUSION
For the foregoing reasons, Defendants’ motion to dismiss with prejudice GRANTED, and
the complaint is dismissed in its entirety 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.

SO ORDERED.

Dated: Brooklyn, New York /s/ LDH
March 10, 2021 LASHANN DEARCY HALL
United States District Judge

on Foreign Affairs, “Haiti on the Brink: Assessing U.S. Policy Toward a Country in Crisis.” (See ECF No. 68.)
However, the Court has not relied on the testimony in considering Plaintiffs’ arguments. The hearing testimony,
which was provided by way of a time-stamped YouTube link, runs over two hours and forty-two minutes total and
Plaintiffs failed to specifically identify a single excerpt of the testimony that the Court should consider in support of
their opposition. Furthermore, there is no evidence that the testimony was sworn. In other words, the submission
was unhelpful. Third, the private and public interest factors weigh in favor of dismissal because the events at issue
took place wholly in Haiti. See, e.g., Gilstrap v. Radianz Ltd., 443 F. Supp. 2d 474, 487 (S.D.N.Y. 2006), aff’d, 233
F. App’x 83 (2d Cir. 2007) (“A review of the allegations of the complaint lends credence to defendants’ contention
that the litigation is centered on events that occurred in England.”); Corporacion Tim, 418 F. Supp. 2d at 533
(“[T]he predominant contacts of the parties and the underlying events occurred in the Dominican Republic, which
has the greatest interest in the application of its law under these circumstances involving property and events
predominantly in the Dominican Republic[.]”). The Court has considered Plaintiffs’ remaining arguments against
the application of the forum non conveniens doctrine and finds them meritless.

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10306104. Public record. Not legal advice.