Reply Brief — Bawazir v. Mahfouz

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No. 00-1102 FEB 7 26

SUPREME COURT OF THE UNITED STATES

TAHIR M. BAWAZIR,

Petitioner,

v.

Pa

SHEIKH KHALID BIN MAHFOUZ,

Respondent.

ON PETITION FOR A WRIT OF CERTIORARI TO

THE WASHINGTON STATE COURT OF APPEALS

(DIVISION I)

REPLY BRIEF FOR PETITIONER

CAMDEN M. HALL

(Counsel of Record)

MICHAEL K. VasKA

Davip J. DADOUN

FOSTER PEPPER

& SHEFELMAN PLLC

1111 Third Avenue

Suite 3400

Seattle, Washington 98101

(206) 447-4400

Attorneys for Petitioner.

Washington, 0.C. ¢ THIEL PRESS © (202) 328-3208

(i) =

TABLE OF CONTENTS

PRELIMINARY STATEMENT ..... LOS SNS Da eres Me eas 1

A. This Court Has Jurisdiction to Review the

Petition Because the Federal Issues that

Are Raised Were Addressed Below ............. 2

B. Petitioner Complied with Supreme Court

Rule 14, and Respondent’s Highly Strained

Reading of that Rule Is not a Basis to

RPOUY TIO oc cc be vce ries sdcecsacwaed 4

C. Respondent’s Reliance on Supreme Court

Rule 10(b) as a Basis to Deny Jurisdiction

EE ET eee OE ee 6

CONCEUBION oi cc cee e wee wee ceseccccvesese 7

Appendix G — Excerpts from Plaintiff Tahir M.

Bawazir’s Memorandum in Opposition to

Defendant Khalid Bin Mahfouz’s Motion

to DOIN oo oc ete SEV TORS Tee eee Ce A-1

Appendix H — Excerpts from Appellant’s Brief ....A-11

TABLE OF AUTHORITIES

Cases:

Amalgamated Food Employees Union Local 509

v. Logan Valley Plaza, Inc., 391 U.S. 308

So ee ee ero eer rT Tee ey ee eT err ee ere 2

Cohen v. Cowles Media Co., 501 U.S. 663 (1991)...... 3

Dewey v. Des Moines, 173 U.S. 193 (1899) ........3, 4

Eddings v. Oklahoma, 455 U.S. 104 (1982) .......... 5

Illinots v. Gates, 462 U.S. 213 (1983)...........4. 3, 4

(1)

Cases, continued: Page

Interstate Circuit, Inc. v. Dallas, 390 U.S. 676

(1966)... cccccccdss suman een seenespeeser ined 6

New York ex rel. Bryant v. Zimmerman, 278 U.S.

6S (1928)... ccccnvexssesaanapeds sev esaeane 3

Taylor v. Kentucky, 436 U.S. 478 (1978).........4.. 5

Statutes:

26 USK. $1297. ca43 eee eee ee passim

Other Authonities:

Robert L. Stern et al., Supreme Court Practice

(7th ed. 1993). ccccccsccscucesessweeeens passim

PRELIMINARY STATEMENT

Respondent Sheikh Khalid Bin Mahfouz (“Sheikh

Mahfouz”) virtually ignores the merits of the underlying

Petition in his Brief in Opposition. Rather, he asks the

Court to deny the writ on procedural grounds, claiming

the Court “lacks jurisdiction to review the decision of

the Washington State Court of Appeals” under 28 U.S.C.

§1257 because Petitioner Tahir M. Bawazir (“Bawazir”’)

purportedly failed to (1) “properly raise a substantial

federal question below,” (2) “comply with Supreme

Court Rule 14,” and (3) show a “conflict exists among

the lower courts with regard to the issues presented

herein” under Supreme Court Rule 10(b). Respond-

ent’s Brief in Opposition (“Opp.”) at 6. Sheikh Mah-

fouz’s arguments are without merit.

First, Sheikh Mahfouz ignores that, in the proceedings

below, both parties addressed whether Washington State

could assert personal jurisdiction over him consistent with

the principles embodied under the Due Process Clause of

the Fourteenth Amendment. Those arguments, and the

decisions by the Washington State courts, form the basis

for the federal constitutional issues framed in Bawazir’s

Petition. Second, Sheikh Mahfouz misapplies the Sup-

reme Court Rules as an alternative basis to deny jurisdic-

tion. Sheikh Mahfouz’s highly strained interpretation of

the Supreme Court Rules is not a proper ground for this

Court to decline jurisdiction.

Bawazir’s Petition raises important questions under the

Due Process Clause about when states may assert personal

jurisdiction over foreign~persons, like Sheikh Mahfouz,

who derive substantial economic benefit by conducting

international commerce in a forum state personally and

through their agents. The decision of the Washington

State courts below conflicts with the precedent of this

2

Court, and other state and federal courts, as to when

personal jurisdiction may be asserted consistent with

the due process principles established by this Court.

Sheikh Mahfouz has not rebutted in his Opposition the

compelling reasons why certiorari should be granted.

Left undisturbed, the decision of the Washington State

courts will cause a chilling effect on international com-

merce.

A. This Court Has Jurisdiction to Review the Peti-

tion Because the Federal Issues that Are Raised

Were Addressed Below.

Sheikh Mahfouz claims that this Court lacks jurisdic-

tion to hear the Petition because “[o]f the four issues

Bawazir presents for review by this Court; only the third

was raised below.” Opp. at 6. Sheikh Mahfouz ignores

the fact that all four issues raised in the Petition were

specifically addressed to the Washington State trial court

and Washington State Court of Appeals, and were pre-

served in Bawazir’s Petition fc Discretionary Review to

the Washington State Supreme Court. Relevant excerpts

of Bawazir’s briefs, which expressly address the federal

issues raised in the Petition, are attached as an Appendix

to this Reply.! aa

Sheikh Mahfouz’s claim that these issues were not

raised below is disingenuous given that he sought dis-

lin determining whether a question was “specially set up or

claimed” within the meaning of § 1257, “‘it is relevant and usually

sufficient to ask whether petitioners satisfied the state rules govern-

ing presentation of issues.” Amalgamated Food Employees Union

Local 509 v. Logan Valley Plaza, Inc., 391 U.S. $308, 334 (1968)

(Harlan, J., dissenting). Sheikh Mahfouz makes no claim that Bawa-

zir did not comply with the state rules in presenting the federal

issues on appeal, and they are explicitly referenced in Bawazir’s

Appellate Brief as required under Washington Rules of Appellate

Procedure Rule 10.3. See App. A-12 - A-21.

Fate

3

missal of the lawsuit against him because, he argued,

the exercise of personal jurisdiction over him would vio-

late the Due Process Clause. Cf. Cohen v. Cowles Media

Co., 501 U.S. 663, 668 (1991) (“It can hardly be said

that there is no First Amendment issue present in the

case when respondents have defended this suit all along...

[under] the First Amendment”).

In addition, all four issues raised in the Petition center

on whether Sheikh Makfuuz’s contacts with Washington

State satisfy the purposeful availment requirement under

the Due Process Clause. Sheikh Mahfouz concedes the

third issue relating to the purposeful availment require-

ment under the Due Process Clause ‘“‘was raised below.”

Opp. at 8. This is all that is necessary for jurisdiction to

exist for all of the issues raised in the Petition. See Rob-

ert L. Stern, et al., Supreme Court Practice §3.2 at 91

(7th Ed. 1993) (“It is enough that the title, right, privi-

lege, or immunity under federal law be asserted affirma-

tively or defensively and that the state court’s decision

pass upon the federal question”); New York ex rel. Bry-

ant v. Zimmerman, 278 U.S. 63, 67 (1928) (“No partic-

ular form of words or phrases is essential,” and “if the

record as a whole shows either expressly or by clear

intendment that this was done, the claim is to be

regarded as having been adequately presented”’).

Finally, it is well-settled that ‘Parties are not confined

here to the same arguments which were advanced in the

courts below upon a federal question there discussed.”

Dewey v. Des Moines, 173 U.S. 193, 198 (1899). Indeed,

this Court has “never suggested that the jurisdictional

stipulations of §1257 require that all arguments on

behalf of, let alone in opposition to, a federal claim be

raised and decided below.” Jllinots v. Gates, 462 U.S.

213, 248 (1983) (White, J., concurring). Rather, the

+

“parties may enlarge upon the questions they do present

so long as the enlargement may be deemed fairly included

or comprised within the stated questions.” Supreme

Court Practice §3.20 at 137 (citing Gates, 462 U.S. at

219-20).

To the extent the questions presented here are viewed

as an “enlargement” of the Due Process Clause questions

addressed below, this Court “should have no hesitation

in holding the assignment sufficient to permit the ques-

tion to now be raised and argued.” Dewey, 173 U.S. at

198. Bawazir’s Petition, Appendix to the Petition, this

Reply and Appendix all demonstrate that substantial

federal questions under the Due Process Clause were

raised below. Jurisdiction clearly exists. See Supreme

Court Practice §3.20 at 137 (this “Court’s jurisdiction

over a state court case thus effectively attaches once the

Court is satisfied that a petition presents substantial fed-

eral questions raised or decided below”’).

B. Petitioner Complied with Supreme Court Rule

14, and Respondent’s Highly Strained Reading

of that Rule Is not a Ba s to Deny Jurisdic-

tion.

Sheikh Mahfouz claims that the Court lacks jurisdic-

tion under 28 U.S.C. § 1257 because “Petitioner failed to

fulfill the requirements of Supreme Court Rule 14(b)(iii)-

(g)(i) [sic].”” Opp. at 6, 10. Presumably, Sheikh Mah-

fouz means Rule 14.1(g)(i), which does not invoke the

Court’s jurisdiction under §1257 but merely describes

what a petition for a writ of certiorari must contain.

Sheikh Mahfouz’s highly strained interpretation of Rule

14 is flawed, and does not serve as a proper basis to deny

jurisdiction under § 1257.

5

First, Bawazir complied with all aspects of Rule 14. A

“petition for a writ of certiorari should be stated briefly

and in plain terms.” Rule 14.3. It “need not contain

‘all’ that is material and need not contain references to an

appendix or the record.” Supreme Court Practice §6.30

at 352. Indeed, Rule 14.1(g) requires a “concise state-

ment of the case.” (Emphasis added). Further, the

material required under 14.1(g)(i) must only contain

information “to show that the federal question was

timely and properly raised and that this Court has juris-

diction to review the judgment on a writ of certiorari.”

In addition, Rule 14.1(g)(i) permits portions of the rec-

ord relied upon to be “included in the appendix.” Bawa-

zir’s Petition and Appendix clearly set forth in “concise”

and “plain” terms that a “federal question was timely

and properly raised” below.

Second, even if, for purposes of argument, Bawazir

did not comply in a hyper-technical sense with Rule 14

as Sheikh Mahfouz claims, the remedy is not to deprive

Bawazir of redress with this Court. Instead, “[i]f the

Clerk determines that a petition submitted timely and in

good faith is in a form that does not comply with this

Rule, . . . the Clerk will return it with a letter indicating

the deficiency. A corrected petition received no more

than 60 days after the date of the Clerk’s letter will be

deemed timely.” Rule 14.5.

Sheikh Mau.fouz does not cite one single reported deci-

sion of this Court supporting the harsh result he seeks.

As this Court admonished, “[o] ur jurisdiction does not

depend on citation to book and verse.” Eddings v. Okla-

homa, 455 U.S. 104, 113 n.9 (1982). This Court “will

not strain the record in an effort to divest petitioner of

his federal forum.” Taylor v. Kentucky, 436 U.S. 478,

482 n.10 (1978).

6

C. Respondent’s Reliance on Supreme Court Rule

10(b) as a Basis to Deny Jurisdiction Is Mis-

placed.

Finally, Sheikh Mahfouz claims no jurisdiction exists

because Bawazir purportedly did not show under Rule

10(b) that a “conflict exists among the lower courts with

regard to the issues presented herein.” Opp. at 6, 10-11.

However, Rule 10(b) only applies to appeals from a

“state court of last resort.” In contrast, Rule 10(c)

applies when “a state court ... has decided an import-

ant question of federal law that has not been, but should

be, settled by this Court, or has decided an important

federal question in a way that conflicts with relevant

decisions of this Court.”

Sheikh Mahfouz’s reliance on Rule 10(b) is without

foundation. Because the Washington State Supreme

Court denied discretionary review of Bawazir’s appeal,

the judgment of the Washington State Court of Appeals

“rather than the order of refusal by the higher court is

the judgment reviewable under §1257.” Supreme Court

Practice §3.12 at 115. See also Interstate Circuit, Inc.

v. Dallas, 390 U.S. 676, 678 n.1 (1968) (“The Texas

Supreme Court denied discretionary review and therefore

the appeal is from the judgment of the Court of Civil

Appeals”). Consequently, Rule 10(c), not 10(b), applies

to this Petition.

Bawazir’s Petition properly frames the issués as required

under Rule 10(c). Sheikh Mahfouz’s jurisdictional all

ment under Rule 10(b) is without merit.

7

CONCLUSION

Bawazir’s Petition sets forth many compelling reasons

why this Court should grant review of the writ. Not

only will Bawazir be deprived of legal redress should

the writ be denied, but the narrow rules adopted by the

Washington State courts threaten to erode this Court’s

fundamental principles of when states may assert per-

sonal jurisdiction over nonresidents consistent with the

Due Process Clause. The writ should be granted.

Respectfully submitted,

CAMDEN M. HALL

(Counsel of Record)

MICHAEL K. VASKA

DaviD J. DADOUN

FOSTER PEPPER

& SHEFELMAN PLLC

1111 Third Avenue

Suite 3400

Seattle, Washington

98101-3299

(206) 447-4400

Attorneys for Petitioner.

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APPENDIX G

[EXCERPTS FROM PLAINTIFF TAHIR M.

BAWAZIR’S MEMORANDUM IN OPPOSITION

TO DEFENDANT KHALID BIN MAHFOUZ’S

MOTION TO DISMISS]

[Filed AUG 14 1998]

The Honorable Jim Bates

SUPERIOR COURT OF WASHINGTON

IN AND FOR KING COUNTY

No. 98-2-14646-0SEA

TAHIR M. BAWAZIR,

Plaintiff,

Vv.

THE BOEING COMPANY, a Delaware corporation;

and SHEIKH KHALID BIN MAHFOUZ,

Defendants.

PLAINTIFF TAHIR M. BAWAZIR’S

MEMORANDUM IN OPPOSITION TO

DEFENDANT KHALID BIN MAHFOUZ’S

MOTION TO DISMISS

* * *

_——

[5]

V. LEGAL ARGUMENT

A.The Court May Assert Jurisdiction To The Full

Extent Permitted Under the Due Process Clause.

Washington courts may exert jurisdiction over nonresi-

dent defendants to the full extent permitted by the Due

Process Clause of the United States Constitution. See

Shute v. Carnival Crutse Lines, 113 Wn.2d 763, 771

(1989) (“Washington’s long-arm statute extends juris-

diction to the limit of federal due process”’); Hartley v.

Am. Contract Bridge League, 61 Wn. App. 600, 605

(1991) (“The ‘doing business’ requirement . . . subsumes

the due process requirement’’). Bawazir has the burden

to establish “only a prima facie showing of jurisdic-

—tion.”” MBM Fisheries v. Bollinger Mach. Shop, 60

Wn. App. 414, 418 (1991). On a motion to dismiss the

allegations of the Complaint are deemed to be true. Jd.

a

[8]

2. The Activities of Mahfouz’s Agents, Including

NCB, May Be Imputed To Him To Confer Juris-

diction.

Mahfouz claims that ‘‘NCB’s contacts with Washing-

ton, if any, cannot be used to justify suit against Mah-

fouz.”” Mahfouz Motion at 12. Mahfouz is widely

referred to as “Mr. NCB” and it is reported that “NCB

is Khalid and Khalid is NCB.” Dadoun Dec., Ex. 3

(Moneyclips, July 8, 1992). Mahfouz ignores his unique

relationship with NCB, and that as a partner of NCB its

activities — and the activities of any of his agents, includ-

ing Bawazir — may be imputed to him for purposes of

asserting jurisdiction. See Crose v. Volkswagenwerk

—_

A-3

Aktiengesellschaft, 88 Wn.2d 50, 55 (1977) (general

jurisdiction may be asserted over foreign corporation

based on activities of its agent in Washington); Trump v.

Nevada & GNLV, 109 Nev. 687, 694, 857 P.2d 740,

745 (1993) (contacts of agent with particular forum are

attributable to principal in determining whether personal

jurisdiction over principal is appropriate); Chan v. Soc’y

Expeditions, Inc., 39 F.3d 1398, 1405-06 (9th Cir.

1994) (activities of general agent attributable to principal

in asserting jurisdiction).

[10]

C.The Court May Assert Specific Jurisdiction

Over Mahfouz. ,

While the long-arm statute outlines specific require-

ments for establishing specific jurisdiction for the trans-

action of business, courts have often recognized that its

limits extend as broadly as permitted by federal due

process. Shute, 113 Wn.2d at 767. Federal due process

permits the exercise of in personam jurisdiction when: 1)

there have been purposeful contacts between the defend-

ant in the forum state; 2) plaintiff’s cause of action arises

out of or relates to those contacts; and 3) the exercise

of jurisdiction is reasonable. Kysar v. Lambert, 76 Wn.

App. 470, 487-88 (1995). Once purposeful availment

has been established, the forum’s exercise of jurisdic-

tion is presumptively reasonable. To rebut the presump-

tion, the defendant “ ‘must present a Compelling case’

that the exercise of jurisdiction would, in fact, be unreas-

onable.”” Roth v. Marquez, 942 F.2d 617, 621 (9th Cir.

1991) (quoting Burger King Corp. v. Rudzewtcz, 471

U.S. 462, 477 (1985)).

A-4

1. Mahfouz Purposefully Availed Himself of this

Forum.

a. The Boeing Agreement Has A Substantial Con-

nection to Washington.

This dispute directly arises from commission payments

owed under the Agreement. In Burger King, the Sup-

reme Court recognized that where individuals “‘ ‘purpose-

fully derive benefit’ from their interstate activities, it may

well be unfair to allow them to escape having to account

in other States for consequences that arise proximately

from such activities.” 471 U.S. at 473-74. The standard

of purposeful availment is not rigorous, and “casts a wide

net.” Pritzker v. Yari, 42 F.3d [11] 53, 62 (1st Cir.

1994), cert. dented, 115 S.Ct. 1959 (1995). Where, as

here, Mahfouz deliberately created ‘“‘continuing obliga-

tions between himself and residents of the forum, ... the

Due Process Clause may not be readily wielded as a terri-

torial shield to avoid interstate obligations that have been

voluntarily assumed.’”’ Burger King, 471 U.S. at 474-76.

See also McGee v. Int'l Live Ins. Co., 355 U.S. 220, 223

(1957) (“‘it is sufficient for purposes of due process that

the suit was based on a contract which had a substantial

connection with that State’’).

Burger King is dispositive here. In Burger King,

defendant entered into a franchise relationship with

Burger King Corp., a Florida corporation. 471 U.S. at

464. Defendant resided in Michigan. Jd. at 466. Defend-

ant forwarded an application and final contract to Burger

King at its headquarters in Miami. Defendant’s sole con-

tact with Florida was through his business partner, who

attended a management training course at Burger King’s

Miami headquarters. Jd. The contract was governed by

Florida law. Jd. Burger King sued defendant in Miami

for breach of the contract. The Supreme Court found

AS

that asserting jurisdiction over the defendant was proper

because he had purposefully availed himself to Florida’s

jurisdiction by entering into a contract with Burger

King. The “ ‘purposeful availment’ requirement ensures

that a defendant will not be haled into a jurisdiction

solely as a result of ‘random,’ ‘fortuitous,’ or ‘atten-

uated’ contacts.” Id. at 475.

Mahfouz claims, however, he is immune from juris-

diction because the “mere execution of a contract” is

insufficient to establish jurisdiction. Mahfouz Motion

at 7. The cases relied upon by Mahfouz are unavailing.

See CTVC of Hawai Co., Ltd. v. Shinawatra, 82 Wn.

App. 699, 714 (1996) (contacts by a Thai national

involving a Thai joint venture governed by Thai law insuf-

ficient to confer jurisdiction where none of the defend-

ant’s duties or responsibilities under the parties’ agree-

ment were carried out in Washington, and plaintiffs failed

to show that the defendant “derived [12] any legal pro-

~ tection or benefit in Washington”); MBM Fisheries, 60

Wn. App. at 424 (court declined to assert jurisdiction

over a Louisiana defendant when the sole contact with

Washington involved the single transmission of a contract

from Seattle via a telecopier machine, involving a single

contract, with all work relating to the contract being per-

formed in Louisiana and defendant never setting foot in

Washington to consummate or negotiate the transaction.)

As in Burger King, Mahfouz’s contacts with Washing-

ton are neither random, fortuitous nor attenuated. Mah-

fouz had an ongoing relationship with Boeing for six

years. He entered into five separate contracts with Boe-

ing annually, from 1992-1996. Bawazir Dec. 423. Boe-

ing exercised substantial control over Mahfouz, and his

principal, Bawazir. Among other things, the Agreement

requires Mahfouz to do the following:

A-6

e Promptly inform Boeing whenever a Customer is

interested in discussing the purchase of Aircraft

and at Boeing’s request, arrange to bring Boeing

and the Customer together for negotiations;

e Consultant shall not engage in activities in con-

flict with Boeing’s interests; and

e Consultant shall use promotional literature, data

and information furnished by Boeing only in fur-

therance of the objectives of this Agreement.

Further, the Agreement gave either party the option to

terminate or renew the Agreement at the end of its term.

Agreement 446-7. Mahfouz chose to renew the Agree-

ments annually.

In addition, Bawazir, as Mahfouz’s representative, had

substantial and continuous contacts with Boeing, includ-

ing numerous meetings in Seattle.’ These contacts are,

at a minimum, as follows:

[13]

e Under Mahfouz’s express instructions to Boeing,

Bawazir served as the primary contact with Boe-

ing officials and representatives under the terms

of the Consulting Agreement, correspondence

from Boeing was directed to Bawazir, and Mah-

fouz requested that Boeing coordinate its activi-

ties through Mahfouz [sic] [Bawazir] ;

~

7 Washington's long-arm statute explicitly subjects any person

“who in person or through an agent” transacts business in Washing-

ton. RCW 4.28.185 (emphasis added). The activities of agents

have uniformly been held sufficient to confer personal jurisdiction _

over the principal. See Chan., 39 F.3d at 1405-06; Trump, 109

Nev. at 694 (agent’s contacts with forum attributable to principal);

Grove Press, Inc. v. Angleton, 649 F.2d 121, 122 (2nd Cir. 1981)

(agency established for jurisdictional purposes by showing that

agent acted in forum with knowledge and consent of the nonresi-

dent principal).

a

A-7

e¢ Bawazir made many visits to Seattle as part of his

activities on behalf of Mahfouz and Boeing;

¢ Bawazir met and coordinated with senior Boeing

management in Seattle by telephone for several

hours each week during the six year duration of

the Agreement; and

e Bawazir assisted Boeing in the preparation of cor-

respondence and communication to Saudi royal

officials and Saudi management as part of his

responsibilities under the Agreement.

Bawazir Dec. 4 4 11-16.

Cumulatively, these contacts are substantial, and not

“fortuitous” or “incidental” as Mahfouz claims.® Wash-

ington and federal courts have not hesitated to confer

personal jurisdiction over nonresident defendants on facts

far less compeiling than here. See Kysar v. Lambert, 76

Wn. App. 470, 489-90 (1995) (court exercised jurisdic-

tion over Massachusetts resident who ordered Christ-

mas trees from Washington though contacts were limited

to “an exchange of forms, letters and phone calls bet-

ween Washington and Massachusetts,” and the contract

contained a choice-of-law clause that Washington law

would govern any disputes).°

Ssee Burger King, 471 U.S. at 478-79 (the entire business

transaction, including “prior negotiations and contemplated future

consequences, along with the terms of the contract and the parties’

actual course of dealing . . . must be evaluated in determining

whether the defendant purposefully established minimal contacts

within the forum”); Pepsi-Cola Bottling Co., Inc. v. Buffalo Rock

Co., Inc., 593 F. Supp. 1559, 1565 (N.D. Al. 1984) (“resulting

contacts can hardly be called fortuitous or unintended” where

defendant was fully aware from outset that transaction would be

intimately connected with Alabama, and that interests in transac-

tion required substantial number of activities there).

°See also Sorb Oil Corp. v. Batalla Corp., 32 Wn. App. 296,

299 (1982) (nonresident defendant engaged in purposeful con-

[footnote continued]

A-8

[14] b. Solicitation Is Not A Prerequisite To Juris-

diction.

Mahfouz suggests he should be immune from jurisdic-

tion because “Boeing, not Mahfouz” solicited the Agree-

ment which was renewed by the parties on an annual

basis for five years. Mahfouz Motion at 7. This asser-

tion neither comports with the facts or the law.

First, the Complaint makes clear that Mahfouz and

Bawazir “were one of several teams vying to act as Boe-

ing’s consultant in the competition for the Saudia com-

mercial airplane order.” Complaint 415. The Agree-

ment was automatically terminable without notice at

the end of its one-year term. Agreement 46. Of his own

volition, Mahfouz sent to Boeing renewals each year,

from 1993-1996, thus explicitly soliciting Boeing with

a request for renewal of his services. Bawazir Dec. 423.

Boeing was not obligated to renew the Agreement.

Agreement 446-7. In addition, Mahfouz solicited The

Frank Russell Company with a request that it act as a

referral in connection with the Agreement. Mahfouz

needed the referral in order to be approved as Boeing’s

consultant with his partner, Bawazir. Bawazir Dec.

q 10.

duct by ordering by telephone oil products from Washington

corporation that were shipped from Indiana, not Washington, to

defendant); Crown Controls, Inc. v. Smiley, 47 Wn. App. 832,

836-839 (1987) (nonresident defendant’s telephone orders suf-

ficient to confer jurisdiction); Cofinco of Seattle v. Wiess, 25 Wn.

App. 195, 196-97 (1980) (nonresident defendant purposefully

availed himself of the privilege of conducting activities within

Washington state by entering into an oral telephone contract

from New York with Washington employer); Roth v. Marquez,

942 F.2d 617, 622 (9th Cir. 1991) (nonresident defendant pur-

posefully availed himself in California where checks owed under

the agreement would have originated from the forum state and

depended upon activities in the forum).

A-9

Second, even if Mahfouz purportedly did not solicit

Boeing to become its consultant — a fact the parties dis-

pute — the absence of solicitation is not fatal to asserting

jurisdiction over Mahfouz. It is well-settled that “a party

who does not initiate the business contact is not thereby

immune from personal jurisdiction of Washington courts

if a business eR subsequently arises.” Sorb Oil,

32 Wn. App. 296, 299.!

[17]

2. This Cause of Action Arises From The Con-

sultant Services Agreement.

Washington may assert jurisdiction over Mahfouz so

long as Bawazir’s cause of action would not have arisen

“but for’ Mahfouz’s contacts with Washington. See

Shute v. Carnival Cruise Lines, 113 Wash.2d 763, 772

(1989) (plaintiff’s injury on cruise ship in Mexico would

not have arisen but for nonresident defendant’s adver-

tising its travel tours in Washington).

Mahfouz contends, without any supporting evidence,

the “but for’ test is unsatisfied because he visited Wash-

ington only once, and his visit was “incidental” to the

Saudia sale. Mahfouz Motion at 7-8. In reality, Bawa-

zir’s claims arise from the Agreement between Boeing and

10 see also Cofinco, 25 Wn. App. at 196-97 (jurisdiction over

nonresident defendant initially contacted by Washington em-

ployer to perform services in New York sufficient to confer juris-

diction in Washington); Kysar, 76 Wn. App. at 489-90 (“exchange

of forms, letters and phone calls” coupled with Washington choice-

of-law _clause supported finding of jurisdiction even if plaintiff

initiated transaction).

A-10

Mahfouz. Bawazir seeks commission payments owed to

him under the Agreement. The commission payments

were to be paid only if as a result of the services per-

formed under the Agreement, Bocing obtained a contract

with Saudia. In other words, this dispute would not

arise “but for” the $5.2 billion contract Boeing won with

Saudia, and under which commission payments are owed.

This second prong of the due process test is easily satis-

fied.

A-11

APPENDIX H

[EXCERPTS FROM APPELLANT’S BRIEF]

No. 43375-0-I

IN THE COURT OF APPEALS

OF THE STATE OF WASHINGTON

DIVISION I

TAHIR M. BAWAZIR,

Appellant,

Vv.

THE BOEING COMPANY, AND

SHEIKH KHALID BIN MAHFOUZ

Respondents.

APPELLANT’S BRIEF

Charles P. Nomellini, WSBA No. 3882

Michael K. Vaska, WSBA No. 15438

_ Camden M. Hall, WSBA No. 146 |

David J. Dadoun, WSBA No. 28948

Attorneys for Appellant

FOSTER PEPPER & SHEFELMAN PLLC

1111 Third Avenue, Suite 3400

Seattle, Washington 98101-3299

(206) 447-4400

A-12

[4] II. ASSIGNMENTS OF ERROR

A. Assignments of Error

1. The Trial Court erred in granting Boeing’s 12(b)-

(6) motion to dismiss.

2. The Trial Court erred in granting Sheikh Mahfouz’s

motion to dismiss the lawsuit for lack of personal juris-

diction. }

3. The Trial Court erred in granting Sheikh Mahfouz’s

motion to dismiss the lawsuit on forum non conveniens

grounds.

4. The Trial Court erred in summarily dismissing the

Complaint against Sheikh Mahfouz without permitting

Bawazir the right to conduct discovery.

B. Issues Pertaining to Assignments of Error

1. Do numerous factual disputes relating to Bawazir’s

claims against a Washington State resident corporation,

Boeing — including Boeing’s assertion that it made a

“mistake” when it paid Bawazir a [5] commission

installment of $6.8 million for the sale of airplanes manu-

factured in Washington State — preclude dismissal under

CR 12(b)(6) of claims that Boeing had an obligation to

pay Bawazir for helping Boeing win a $5.2 billion air-

plane order with Saudia?

2. Did Sheikh Mahfouz purposefully avail himself of

this state’s jurisdiction by agreeing to be employed under

a six-year contractual relationship to provide consulting

services on Boeing’s behalf, and at its discretion, for the

purchase of Washington State manufactured Boeing air-

planes when this lawsuit would not have arisen but for

this long-term relationship?

3. Did the Trial Court abuse its discretion in dismissing

the lawsuit on forum non conveniens ground by (a) not

5,

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A-13

entering any findings of fact explaining its decision; (b)

not requiring Sheikh Mahfouz to offer any evidence or

otherwise meet his burden to show that Saudi Arabia is

an adequate alternative forum, (c) not requiring Sheikh

Mahfouz and Boeing to consent to service of process,

jurisdiction or enforcement of any judgment in Saudi

Arabia; and (d) not requiring Sheikh Mahfouz to provide

any evidence that Saudi Arabia is a more convenient

forum to hear this dispute?

4. Did the Trial Court err in denying Bawazir the right

to conduct discovery on jurisdiction and forum non

conveniens issues after Bawazir made a prima facie

showing that jurisdiction over Sheikh Mahfouz exists

and Washington State is the only forum in which Bawa-

zir can obtain justice?

50 * * *

[27]

B.Sheikh Mahfouz Purposefully Availed Himself

of This State’s Jurisdiction Through His Six-Year

Employment By Boeing.

The Trial Court’s determination whether jurisdiction

may be exercised is a question of law reviewable de novo

when the underlying facts are undisputed. Hartley v.

Am. Contract Bridge League, 61 Wn.2d 600, 603, 812

P.2d 109 (1991). Because Bawazir’s evidence in support

of his opposition to Sheikh Mahfouz’s motion to dismiss

is uncontroverted, no facts underlying the basis for jur-

isdiction are in dispute.

A-14

1. Only a Prima Facie Showing of Jurisdiction Is

Required.

Washington courts may exercise jurisdiction over non-

resident defendants tc the full extent permitted by the

Due Process Clause of the U.S. Constitution. Shute v.

Carnival Cruise Lines, 113 Wn.2d 763, 771, 783 P.2d

78 (1989). Federal due process permits the exercise of

in personam jurisdiction when: (1) there have been pur-

poseful contacts between the defendant in the forum

state; (2) plaintiff’s cause of action arises out of or

relates to those contacts; and (3) the exercise of jurisdic-

tion is reasonable. Kysar_v. Lambert, 76 Wn. App. 470,

487-88, 887 P.2d 431 (1995). Once purposeful avail-

ment has been established, the forum’s exercise of juris-

diction is presumptively reasonable. To rebut the pre-

sumption, the defendant “‘ ‘must present a compelling

case’ that the exercise of jurisdiction would, in fact, be

unreasonable.” Roth v. [28] Marquez, 942 F.2d 617,

621 (9th Cir. 1991) (quoting Burger King Corp. v.

Rudzewicz, 471 U.S. 462, 477, 105 S.Ct. 2174, 85

L.Ed.2d 528 (1985)).

Where, as in this case, the Trial Court ruled on the

issue .. . without holding an evidentiary hearing, dis-

missal is appropriate only if the plaintiff has not

made a prima facie showing of personal jurisdiction.

Fields v. Sedgwick Assoc. Risks, Ltd., 796 F.2d 299, 301

(9th Cir. 1986). In reviewing the dismissal, the court

must “review the facts in the light most favorable to the

party opposing dismissal.’’ Access Road Builders v. Chris-

tenson Elec. Contracting Eng’g, Co., 19 Wn. App. 477,

481, 576 P.2d 71 (1978).

* * *

A-15

[29]

3. Sheikh Mahfouz Deliberately Availed Himself of

Washington State’s Jurisdiction by Maintaining

His Employment - Relationship With Boceing’s

Seattle Headquarters.

a. Sheikh Mahfouz Subjected Himself to the Juris-

diction of Washington State Courts Because He

Transacted Business in Washington.

Under RCW 4.28.185, “even a solitary business deal

transacted in this state is sufficient to vest jurisdiction.”

International Sales & Lease, Inc. v. Seven Bar Flying

Serv., Inc., 12 Wn. App. 894, 898, 533 P.2d 445 [30]

(1975). Sheikh Mahfouz’s employment with Boeing

constituted far more than a “solitary business deal” in

Washington State.

From 1992 through 1997, Sheikh Mahfouz was

employed by Boeing to provide services in connection

with the Saudia sale. The contract of employment

required Sheikh Mahfouz to visit Seattle for high-level

conferences, correspond with Boeing officials in Seattle,

provide representations and warranties to Boeing, take

direction and follow instructions from Boeing, be sub-

ject to legal restrictions imposed by the U.S. govern-

ment on Boeing, send agents to Washington State to

assist Boeing, and execute on an annual basis a new writ-

ten contract and in so doing agree to be bound by Wash-

ington law. Sheikh Mahfouz has benefited greatly from

these Washington contacts. He will receive several hun-

dred million dollars in commissions under the Agree-

ments. The claims in this lawsuit arise from Sheikh

Mahfouz’s relationship with Boeing over this six-year

period.

Contracts — including employment contract — bet-

ween a nonresident and a Washington State business con-

A-16

fer jurisdiction to a Washington court.!> For example,

in Cofinco, this Court reversed a Trial [31] Court’s dis-

missal for lack of jurisdiction. This Court held that by

“entering the employment contract,”’ the defendant sub-

mitted to Washington’s jurisdiction;even though he had

“never been in the state . . . never owned property [here]

and has never engaged in activities, business or otherwise,

in this state.” 25 Wn.App. at 197.

In Burger King Corp. v. Rudzewicz, 471 U.S. 462, 105

S.Ct. 2174, 85 L-Ed.2d 528 (1985) the Supreme Court

3 See Kysar, 76 Wn. App. at-489-90 (court exercised juris-

diction over Massachusetts resident who ordered Christmas trees

from Washington, though contacts were limited to “an exchange of

forms, letters and phone calls between Washington and Massachu-

setts,” and the contract contained a choice-of-law clause that

Washington law would govern any disputes); Sorb Oil Corp. v. Bat-

alla Corp., 32 Wn. App. 296, 299, 647 P.2d 514 (1982) (nonresi-

dent defendant engaged in purposeful conduct by ordering by

telephone products from Washington corporation that were ship-

ped from Indiana, not Washington, to defendant); Crown Controls,

Inc. v. Smiley, 47 Wn. App. 832, 836-39, 737 P.2d 709 (1987)

(nonresident defendant’s telephone orders sufficient to confer

jurisdiction); see also Roth, 942 F.2d at 622 (nonresident defend-

ant purposefully availed himself in California where checks owed

under the agreement would have originated from the forum state

and depended upon activities in the forum); CompuServe Inc. v.

Patterson, 89 F.8d 1257, 1264 (6th Cir. 1996) (jurisdiction estab-

lished solely on contacts through the Internet); Pepsi-Cola Bot-

tling Co. Inc. v. Buffalo Rock Co., 593 F. Supp. 1559, 1565

(N.D. Ala. 1984) (“[N] onresident’s purposeful affiliation with a

state for purposes of pecuniary gain has long been deemed a suf-

ficient contact to render the nonresident subject to suit in the

courts of that state .. . even if the nonresident has no physical

presence in the state whatsoever.” (emphasis added)); Burger King,

471 U.S. at 478-79 (the entire business transaction, including

“prior negotiations and contemplated future consequences, along

with the terms of the contract and the parties’ actual course of

dealing must be evaluated in determining whether the defendant

purposefully established minimal contacts within the forum”)

(emphasis added).

A-17

reached the same conclusion as this Court in Cofinco. It

held that where, as here, a defendant deliberately created

“continuing obligations between himself and residents

of the forum, . . . the Due Process Clause may not readily

be wielded as a territorial shield to avoid interstate obli-

gations that have been voluntarily assumed.” Burger

King, 471 U.S. at 474-76. See also McGee v. Interna-

national Life Ins. Co., 355 U.S. 220, 223, 78 S.Ct. 199,

2 L.Ed.2d 223 (1957) (“I]t is sufficient for purposes of

due process that the suit was based on a contract which

had a substantial connection with that State.”’).

[34]

b. Sheikh Mahfouz Subjected Himself to the Juris-

diction of Washington State’s Courts Because He

Transacted Business Through His Agent Bawazir.

Washington’s long-arm statute explicitly subjects to the

jurisdiction of Washington State courts any person “who

in person or through an agent” transacts business in

Washington. RCW 4.28.185 (emphasis added). See

also Chan v. Society Expeditions, Inc., 39 F.3d 1398,

1405-06 (9th Cir. 1994).

Sheikh Mahfouz’s contacts with Boeing through his

agent Bawazir were extensive and include having:

e Bawazir serve as the primary contact with Boeing

officials and representatives;

e Bawazir make many visits to Seattle as part of

his activities on behalf of Sheikh Mahfouz and

Boeing;

e Bawazir meet and coordinate with senior Boeing

management in Seattle by telephone for several

hours each week; and

A-18

e Bawazir assist Boeing in the preparation of cor-

respondence and communication to Saudi royal

officials and Saudia management.

CP 677-78 4911-16.”

4. This Lawsuit Would Not Arise “But For” Sheikh

Mahfouz’s Agreements With Boeing.

Washington may assert jurisdiction over Sheikh Mah-

fouz because Bawazir’s cause of action would not have

arisen “‘but for” Sheikh [35] Mahfouz’s Agreements with

Boeing. See Shute, 113 Wn.2d at 772. The Washington

Supreme Court has held that jurisdiction may be asserted,

and the minimum due process requirement satisfied, if

the “but for” test is met. Jd. See also Port Lynch, Inc.

v. New England Int’l Surety of Am., Inc., No. C89-

465Z, 1990 WL 167126 (W.D. Wash. May 23, 1990);

Ballard v. Savage, 65 F.3d 1495, 1500 (9th Cir. 1995)

(Shute’s “but for” test followed in asserting jurisdic-

tion).

17 see Nakanishi v. Foster, 64 Wn.2d 647, 659, 393 P.2d 635

(1964) (nonresident defendant who contracted with an agent “on

a commission basis” to secure supplies in Washington subject to

Washington’s jurisdiction based on agent’s activities in Washing-

ton); Barer, 20 Wn. App. at 481 (activities of nonresident defend-

ant’s manager in state “all that is necessary” to confer jurisdic-

tion); Bowen v. Bateman, 76 Wn.2d 567, 576-77, 458 P.2d 269

(1969) (activities of nonresident defendant’s partner in state suf-

ficient to confer personal jurisdiction).

A-19

5. The Assumption of Jurisdiction Over Respond-

ents Is Reasonable.

a. The Trial Court’s Rulings Will Have a Detri-

mental Impact on International Trade in Wash-

ington State.

The U.S. Supreme Court recognized long ago that

‘‘modern transportation and communication have made

it much less burdensome for a party sued to defend him-

self in a State~where he engages in economic activity.”

McGee, 355 USS. at 223.

The Washington Supreme Court likewise has held that

the long-arm statute recognizes:

[A]s an economic fact of modern life that large seg-

ments of commerce . . . inevitably seek out a con-

nection with or link to customers, consumers... or

subcontractors in other states who intend or con-

template that the product, process or article of

commerce . . . shall be used or employed in states

other than the place of origin or beginning.

The connecting link then may consist of affirmative

acts taking place here by which the out-of-state resi-

dent overtly submits to jurisdiction; . . . or the ini-

tiation of a transaction outside the state in contem-

plation that some phase of it will take place in the

forum state. . . . The existence of these phenomena

of modern economy are ordinarily enough to bring

the parties within the long-arm statute without en-

gendering an unjust or oppressive extension of jur-

isdiction.

A-20

[36]

Griffiths & Sprague Stevedoring Co. 71 Wn.2d at 684."®

The Trial Court’s rulings are a giant step backwards

from these “economic facts of modern life.”

b. The Assumption of Jurisdiction Is Reasonable

Because Sheikh Mahfouz Has Extensive Ongoing

Activities in Washington.

Because the first two prongs under the due process test

are satisfied, the burden has shifted to Sheikh Mahfouz

to “‘present a compelling case that the presence of some

other considerations would render jurisdiction unreason-

able.” Burger King, 471 U.S. at 476. But Sheikh Mah-

fouz provided no evidence that asserting jurisdiction over

him is unreasonable.

Sheikh Mahfouz frequently travels to the United States

and maintains residences here. CP 674-75 442-3. He

has substantial relationships with Boeing in Seattle and

the Frank Russell Company in Tacoma. He owns several

businesses in this state. CP 111 4 46-8, Exs. 5-7 (CP 148,

151-55). He or his family owned a residence in the Seat-

tle area. CP 675 43. He owns at least two Boeing air-

planes (a 757 and a 767), making travel convenient. CP

674 42; App. A.

Defending this lawsuit in this forum wili not amount

to a “due process violation” or place Sheikh Mahfouz at

18Nowhere should this be more apparent than our state,

standing as we do at a major crossroads of international trade.

“Washington is the most trade-oriented state in America, [and]. . .

is home to the United States’ largest exporter, the Boeing Com-

pany.” See Washington State Community, Trade & Economic

Development (<http://www.trade.wa.gov/whyis.htm>(Dec. 14,

1998)).

A-21

“a severe disadvantage in [37] comparison to his oppon-

ent.” See McGee, 355 U.S. at 224. Burger King, 471

U.S. at 474.