Opposition Brief — Can-Am International, LLC v. Republic of Trinidad and Tobago (No. 06-6)

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No. 06-6 FILE

JUL 3 1 2006

IN THE RK

OFFICE OF THE CLE

: S.

Supreme Court of the United E COURT.”

CAN-AM INTERNATIONAL, L.L.C.,

Petitioner,

THE REPUBLIC OF TRINIDAD & TOBAGO and

the TOBAGO HOUSE OF ASSEMBLY,

Respondents.

ON PETITION FOR A Writ OF CERTIORARI TO THE _

Unirep STATES Court OF APPEALS

FOR THE FirtH Circuit

BRIEF IN OPPOSITION

eee ee

RALPH T. Lepore, [I

Counsel of Record

Mary MartTHA Born

Tara J. MYSLINSK!

HOLLAND & KniGHt LLP

10 St. James Avenue

Boston, MA 02116

(617) 523-2700

Attorneys for Respondents

202417

COUNSEL PRESS

(800) 274-3321 * (800) 359-6859

COUNTERSTATEMENT OF

QUESTIONS PRESENTED FOR REVIEW

Respondents, the Republic of Trinidad & Tobago and

the Tobago House of Assembly, submit that the Questions

Presented by Petitioner, Can-Am International, L.L.C., do

not reflect accurately the issues in dispute in this litigation.

Rather, Respondents submit the following questions as the

proper issues for review:

Did Petitioner establish that Respondents waived their

right to immunity under the waiver exception to the Foreign

Sovereign Immunities Act, 28 U.S.C. § 1605(a)(1), by signing

a “pay order,” the validity and enforceability of which was

conditioned upon the formation of a later, separate contract,

which was never entered?

Did Petitioner establish that Respondents are subject

to jurisdiction in the courts of the United States by

demonstrating the applicability of the “commercial activity”

exception to the Foreign Sovereign Immunities Act,

28 U.S.C. § 1605(a)(2)?

If either the waiver or commercial activity exceptions

to the Foreign Sovereign Immunities Act, 28 U.S.C.

§§ 1605(a)(1)-(2), apply to allow jurisdiction over

Respondents, is summary judgment in favor of Respondents

appropriate for other reasons?

TABLE OF CONTENTS

Counterstatement of Questions

Presented for RevieW .. 2... ccc cc cccccvecs

SENS OE AUN ii sc 5a Cand esbakewes

Citations to Official and Unofficial Opinions and

Cols Renee ENE 3c sed chen eebeere

Statement Of JUFISGICHION .. cece ccescccces

OU ETE 6 dbp dees tccde wad iamerecera

l. STATEMENT OF THE CASE .....ccccccess

A. Statement of the Proceedings Below ......

. Deen OE PO... 6 oi iio vk ko eevee een

C. Misstatements of Fact by Petitioner .......

1. Sorsby’s Experience with International

Financing Arrangements ............

Petitioner’s Misstatements about Respon-

dents’ Alleged Approval of a Contract for

the Bower Cotton Proposal ..........

3. Petitioner’s Misstatements as to its Right

to Compensation, and Where Sorsby Was

ere ere

ili

Contents

4. Petitioner’s Misstatements as to the

Chronology and Location of Events Relating

to the Bower Cotton Proposal ........

5. Petitioner’s Misstatement Concerning

Activity of the THA’s Business Analyst .. .

6. Petitioner’s Misstatements Concerning

the Relationship between the Government

of the Republic of Trinidad and Tobago

and the THA, and the Role of the Chief

Secretary of the THA ..... cc cccccess

7. Petitioner’s Missiatements Regarding an

“Agency” Relationship between the THA

and Ms. Sorsby or Can-Am ..........

8. Petitioner’s Misstatements Regarding the

Waiver of Immunity Clause in the Pay

ME ca cccd cab a pamed ys wrsawe reese

9. Petitioner’s Misstatements Regarding

Can-Am’s Commercial Activities in the

NN UN a te ae ar

Il. REASONS FOR DENYING THE PETITION ...

A. The Fifth Circuit Court Of Appeals Properly

Held That The Waiver Exception To The FSIA

Bee Set NE ok Rcd eahs es 9) Sikes

B. The Fifth Circuit Court Of Appeals Properly

Held That The Commercial Activity Exception

To The FSIA Does Not Apply ............

Page

Contents

C. If An Exception To The FSIA Applies Here,

Summary Judgment In Favor Of Respondents

Is Appropriate On The Merits ............

Petitioner Cannot Prove That Respondents

Breached Any Contract .............

Petitioner Cannot Prove That Respondents

Perpetrated Any Fraud Nor Fraudulently

TGR FORTIONEE. os ish i cea ts

Petitioner Cannot Prove that T&T or the

THA Made Negligent Representations To

in SIGIR RARER tsa Beem UNM RCa eat rites

Petitioner Cannot Prove That It Was

Estopped From Any Conduct On Account

Of Any Actions Of T&T Or The THA ...

Petitioner Cannot Prove It Has Any Basis

For Recovery In Quantum Meruit Against

fi cht 2. Ri ee reer.

es RE 2 SA Peer re ere wir ne

Page

TABLE OF CITED AUTHORITIES

Page

Federal Cases:

Argentine Republic v. Amerada Hess Shipping

Corp... GES U.S. S20 CIFEF) ocicivccccvcene 14, 16

Bryks v. Canadian Broad. Corp., 906 F. Supp. 204

OEE och id awe ce abe be ete ten 22

Clardy Mfg. Co. v. Marine Midland Bus. Loans,

SNC. , Gh F326 347 (SCR. 196) cc cccccveves 28

College Sav. Bank v. Florida Prepaid Postsecondary

Educ. Expense Bd., 527 U.S. 666 (1999) ...... 14

Dames & Moore v. Regan, 453 U.S. 654 (1981) .. 14

de Sanchez v. Banco Central De Nicaragua, 770

Fae ee Us SOO nwa co ve dawn veewees 20-21

Dole Food Co. v. Patrickson, 538 U.S. 468

NIN hs iliac Gf tg Ci ate cald 6 ab owe eae Aes 14, 15-16

Eastman Kodak Co. v. Image Technical Svcs., Inc.,

Pe ae PR NUE i sos cece cxtedeadchaees 26

Exxon Mobil Corp. v. Saudi Basic Indus. Corp.,

a a oe wo ag gee i 14,15

Fernandez-Vargas v. Gonzales, 126 S. Ct. 2422

NEA oe REE aehy a peat 14

First Nat'l City Bank v. Banco Para El Comercio

Exterior de Cuba, 462 U.S. 611 (1983) ....... 14

Cited Authorities

General Elec. Capital Corp. v. Grossman, 991 F.2d

SD CON GNOME os vce neswae reranee ewes

Gerding v. Republic of France, 943 F.2d 521

I Sd eG era. Dae se

Granfinanciera, S.A. v. Nordberg,

AI DEED Sk kde esd a es een ¥everewe

Griffin v. GK Intelligent Sys., 87 F. Supp. 2d 684

Sn NR NY Sas oneal oid aver bu bw la kw aias

Kelly v. Syria Shell Petroleum Dev., 213 F.3d 841

CR SE ere ve be aee Kahan Fee eeeke

Kiowa Tribe of Oklahoma v. Manufacturing Tech.,

hs A Slee FEE CRUE eakas chase vawkans

Mesa v. California, 489 U.S. 121 (1989) ........

Ministry of Defense and Support for the Armed

Forces of the Islamic Republic of Iran v. Elahi,

126 S. Ch. TESS CGR. Shy AOC) ccc vcctvcvcces

Morgan Equip. Co. v. Novokrivorogsky State Ore

Mining and Processing Enter., 57 F. Supp. 2d

ok fae rr rrr reer Tre

NYSA-ILA Pension Trust Fund v. Garuda

Indonesia, 7 F.3d 35 (2d Cir. 1993) ..........

Pere v. Nuovo Pignone, Inc. , 150 F.3d 477 (Sth Cir.

one 6 6-2 ev ee Fever eéspeecé @e.@824.¢€¢08a 22 8280 682 8' 8

Page

Vil

Cited Authorities

Page

Pfizer, Inc. v. Government of India, 434 U.S. 308

‘$c. : See Ce ee ee err TE es 14

Republic of Argentina v. Weltover, Inc.,

re es OE GE oe baie deaeou 14, 16, 22, 24, 26

Republic of Austria v. Altmann,

- oes Byes. | Sree .. 14, 15-16

Rush-Presbyterian-St. Lukes Med. Ctr. v. Hellenic

Republic, 877 F.2d 574 (7th Cir. 1989) ....... 24

Saudi Arabia v. Nelson,

Pet Ua SRPANGORD Shs sc dvecscuur ces 14, 16, 21, 25

Sergeant Oil & Gas Co. v. Nat'l. Maint. & Repair,

Inc., 861 F. Supp. 1351 (S.D. Tex. 1994) ...... 28-29

Sosa v. Alvarez-Machain, 542 U.S. 692 (2004) ... 14

Stena Rederi AB v. Comision de Contratos del

Comite Ejecutivo General del Sindicato

Revolucionario de Trabajadores Petroleros de

la Republica Mexicana S.C., 923 F.2d 380

Ce es RPE Goss uwice rece dex uemeens 20, 21, 23

United States v. Moats,

961 F.2d 1198 (Sth Cir. 1992) ............5. 16

Velasco v. Government of Indonesia, 370 F.3d 392

Ce ale EE. ov ea eh yon sth bia eee eee 22

vill

Cited Authorities

Verlinden B.V. v. Central Bank of Nigeria, 461 U.S.

Voest-Alpine Trading USA Corp. v. Bank of China,

Se eR, BOOP cecccescesvese:

Zedan v. Kingdom of Saudi Arabia, 849 F.2d 1511

ce cccerccceves:

Zenor v. El Paso Health Care Sys., 176 F.3d 847

ier bet cct er revccvesceees

State Cases:

Clary v. Schmolke,

977 S.W.2d 883 (Tex. App. 1998) ...........

Formosa Plastics v. Presidio Engineers, 960

ES Se

Guzman vy. Ugly Duckling Car Sales of Texas, 63

BW oan LOK, AUD. 2001) on ccc ccc s scree.

Vortt Exploration Co. v. Chevron U.S.A., Inc., 787

Page

. 26-27

Cited Authorities

Page

Statutes:

SO Giect O CRORE od bvie20s5 5 based eneenwe l

BO Uae BE PD. oid bivtcinievs deuaeeees 16

Be an EEE, hv hu bb cddens dacaceneel 16, 17, 20

+ Be es OE POEEET 6606 6u50s 00 censeeteane 6

Rules:

PG ce en} Rehr bean 26

eer ne

DD CE BGG ES cheb nbd calcewes baeeak 9 ;

TABLE OF APPENDICES

. Page

A Opinion of the United States Court of Appeals

for the Fifth Circuit dated March 1, 2006... Al

B Memorandum and Order of the United States

District Court for the Southern District of

Texas on Respondents’ Motion for Summary

Judgment entered September 8, 2004 ...... A26

C Order of the United States Court of Appeals

for the Fifth Circuit on Petition for Rehearing

es I i 604 ie eka Races ees A36

D Order of the United States District Court

for the Southern District of Texas on Motion

for Reconsideration of Summary Judgment

entered November 23, 2004 ............. A38

E Pertinent Text of the Foreign Sovereign

Immunities Act (28 U.S.C. §§ 1602, 1603,

1604, 1605(a)(1) and (2), and 1606) ....... A40

F Petitioner’s Petition for Rehearing to the

United States Court of Appeals for the Fifth

I ct c's a Dak kha Nes oiled wearmaa pees A44

G_ Excerpt from Petitioner’s Brief on Appeal to

the United States Court of Appeals for the Fifth

SEE: Sa ie Ws chtEk ob ak nes ice hae es A58

H Letter from Laura Lee Sorsby to Honorable

Chief Administrator Mr. Alan Richards,

Tobago House of Assembly, dated February 5,

oe 2 -@.6.4 @- e248 €.09 8202 0°@ 606060686 .06€6 C28 ¢€¢6 OO 8.8 2 4.97 @

Appendices

Letter from Laura Lee Sorsby to Chief

Administrator, Tobago House of Assembly,

Gate BENGGR TG, AFP. nc kick eSweceveveces

Memorandum of Understanding dated March

SE eerie in bev ayenpeereseae oes

Letter from Laura Lee Sorsby to Honorable

Chief Secretary, Tobago House of

Assembly, dated April 12, 1999 (misdated as

EE Gs asa bo hS ae RETIREE EOS

Letter from Janice J. Cleavinger, General

Counsel of Can-Am International, to Honorable

Allan Richards, Chief Administrator, Tobago

House of Assembly, dated April 30, 1999

Letter from Roger F. Wyatt, Nikea N.V., to

Alan Richards, Tobago House of Assembly,

and letter from Peter Newton to Alan Richards,

poth dated May 11, 1999 ........ccceeves

Letter from Laura Lee Sorsby to Honorable

Chief Administrator Mr. Alan Richards,

Tobago House of Assembly, dated May 11,

RNa ee are ib SAPO a aati aera nn

Letter from Hugh Hague, Director, Can-Am

International, to Honorable Allan Richards,

Chief Administrator, Tobago House of

Assembly, dated May 14, 1999 ...........

Page

A65

A68

A79

A82

A84

A90

xil

Appendices

Page

P Letter from Hugh Hague, Director, Can-Am

International, to Honorable Allan Richards,

Chief Administrator, Tobago House of

Assembly, dated June 6, 1999 ............ A9S5

Q Email from Laura Lee Sorsby to Rennie

Dumas dated July 11, 1999 .............. A98

R Letter from Laura Lee Sorsby to Honorable

Hochoy Charles, Chief Administrator, Tobago

House of Assembly, dated March 7, 2000 .. A103

S Excerpts from Deposition of Laura Lee

DO se evbeees cuwnewes Van neeeeerss A105

T Excerpts from Petitioner’s Answers to

NOI nov 5 caved saheued ea eeiten A128

U Letter from Honourable Hochoy Charles, Chief

Secretary, Tobago House of Assembly, to Laura

Lee Sorsby dated February 22,1999 ........ A135

V_ Irrevocable Payment Order dated April 30,

POE Siocis ceWutes cane eee tea eee A138

W Letter from Hochoy Charles, Chief Secretary,

Tobago House of Assembly, to Peter Newton

dated April 19, 1999 (“Letter of Intent”) ... A143

X Letter from Hochoy Charles, Chief Secretary,

Tobago House of Assembly, to Peter

Newton dated April 19, 1999 (“Letter of

SNE So ok owed hd ec eeedeuste A146

xiii

Appendices

Page

Y Petitioner’s Amended Complaint ......... A149

Z -Excerpts from Deposition of Michael Ambrose

RANE «ote cas Wile Seen ees er eres ee eee A159

CITATIONS TO OFFICIAL AND UNOFFICIAL

OPINIONS AND ORDERS ENTERED BELOW

The Decision granting summary judgment to Respondents

by the United States District Court for the Southern District of

Texas is unpublished but attached hereto at Respondents’

Appendix A26-A35. The District Court’s Order denying

rehearing is unpublished but attached hereto at A38-A39. The

March 1, 2006 Opinion of the United States Court of Appeals

for the Fifth Circuit, affirming the District Court, is published

at Can-Am Intern., LLC v. Republic of Trinidad and Tobago,

169 Fed. Appx. 396, is available on Westlaw® at 2006 WL

481662, and is attached hereto at Al-A25. The Fifth Circuit’s

Order denying rehearing is unpublished but attached hereto at

A36-A37.

STATEMENT OF JURISDICTION

Generally, this Court has jurisdiction over appeals from

the federal courts of appeals pursuant to 28 U.S.C. § 1254(1).

However, the Foreign Sovereign Immunities Act, 28 U.S.C.

§ 1602, et seg., precludes the exercise of jurisdiction by this

Court, or any other court in the United States, as Respondents

are foreign sovereigns entitled to immunity from suit.

STATUTE AT ISSUE

The statute involved in this case is the Foreign Sovereign

Immunities Act, 28 U.S.C. § 1602, et seq., the pertinent text of

which is set forth at A40-A43.

I. STATEMENT OF THE CASE

A. Statement of the Proceedings Below

In November 2001, Can-Am International, L.L.C.

(“Petitioner” or “Can-Am”) filed a Complaint against

Respondents, the Republic of Trinidad & Tobago (“T&T”) and

the Tobago House of Assembly (the “THA”) (collectively,

“Respondents”') in the United States District Court for the

' Where necessary, Respondents are referred to individually.

Petitioner never has alleged activity by T&T itself, but instead, only

alleges that conduct of the THA or THA officials can be attributed to

T&T. See infra section 1.C.6. at 12; see also generally A149-A158.

Southern District of Texas, asserting claims for breach of

contract, fraud, negligent misrepresentation and promissory

estoppel (see Petition (“Pet.”) at 1; see also A9), all purportedly

based on a proposed transaction that never occurred.

Respondents filed a motion to dismiss, or, alternatively, for

summary judgment, based primarily on their immunity under

the provisions of the Foreign Sovereign Immunities Act,

28 U.S.C. § 1602, et seq. (the “FSIA”). (A9.) The District Court

denied the motion and aliowed discovery (/d.) Subsequently,

Petitioner amended its Complaint, adding a count for quantum

meruit, over Respondents’ objection. (/d.)

In April 2004, Respondents filed motions for summary

judgment, based primarily on the FSIA. (A9.) They alternatively

argued that summary judgment was appropriate as there was no

genuine issue as to any material fact, and that Respondents were

entitled to judgment as a matter of law on all counts of the

Amended Complaint. (/d.)

On September 8, 2004, the District Court granted

Respondents’ motions for summary judgment, concluding that

the FSIA precluded it from reaching the merits of the case, for

the reason that “there is no basis to overcome [Respondents’]

presumption of immunity.” ( A9.) Thereafter, Petitioner’s motion

for reconsideration was denied on November 23, 2004. (/d.)

Petitioner appealed to the Fifth Circuit, which, in an Opinion

dated March 1, 2006 (the “Opinion,” A1l-A25), affirmed the

District Court’s grant of summary judgment in Respondents’

favor, holding that Respondents were entitled to immunity under

the FSIA and that neither the waiver nor commercial activity

exceptions to the FSIA applied to defeat that immunity.” (A25.)

Petitioner’s subsequent motion for reconsideration was denied

? Neither the District Court nor the Fifth Circuit had occasion to

decide Respondents’ summary judgment motions on the merits because

both courts dismissed Petitioner’s case on subject matter jurisdiction

grounds. Should this Court conclude that the FSIA does not provide

Respondents with immunity, it is submitted, for the reasons set forth in

section II.C., infra at 26, that summary judgment should have entered,

in any event, for Respondents.

on March 30, 2006. (A36.) A petition for a writ of certiorari

was docketed in this Court on July 3, 2006.

B. Statement of Facts’

The Petitioner asserts that it is “an American Company

organized in the state of Texas,” and that Laura Lee Sorsby

(“Sorsby”) is its founder and Chief Executive Officer. (Pet. at

1.)

T&T is a sovereign nation off the coast of Venezuela,

consisting of the islands of Trinidad and Tobago. (A2.) The

island of Tobago is administered by the THA, a political

subdivision of T&T. (/d.) At all relevant times, Hochoy Charles

was the Chief Secretary of the THA, and Allan Richards was

the Chief Administrator of the THA. (See id.)

In the late 1990's, Sorsby began marketing her services as

a “financial consultant” to the THA. (A2.) On February 5, 1999,

she wrote to Chief Administrator Richards about a “creative

financing structure” for raising money for public projects on

Tobago, and proposed that she travel to Tobago to work to

arrange this financing. (A3; A61.) Before arriving in Tobago,

however, Sorsby asked Richards to ‘ appoint our company as

your consultant/agent,” assuring Richards that this appointment:

does not commit the Government to anything. . . [y]ou

do not have to pay us anything if the loan does not go

though [sic]. . . . [i}f you decide you do not wish to take

the loan and participate in the trading program, then.

the appointment becomes null and void.

(A3.)

On February 22, 1999, Chief Secretary Charles signed a

letter appointing Sorsby as the THA’s “financial consultant”

for three development projects. (A3.) The letter of appointment

* The Respondents cite to the facts set forth in the Opinion, portions

of the record in the Fifth Circuit, portions of the record in the District

Court, and portions of Petitioner’s brief to the Fifth Circuit. (The

Respondents treat the Petitioner’s assertions, and those of its Chief

Executive Officer, Laura Lee Sorsby as true solely for purposes of this

Opposition.) The cited documents are included in the Appendix hereto.

did not obligate the THA to participate in any financing

arrangement presented by Sorsby. (A137-A137.) Rather, the

letter required Sorsby to bring all matters that required financial

commitments by the THA to the THA “for agreement before

any financial commitments are made,” and stated that “all

schedules of payments and money management shall be

determined and pursued only with the agreement of the THA.”

(A136.) The appointment was for a six-month term, with a non-

automatic option of renewal. (A136-A137.)

The THA did not pursue the financing program described

in Sorsby’s February 5" letter. (A6.) On March 18, 1999, Sorsby

sent the Chief Administrator of the THA a letter recommending

‘a different program, allegedly available through a London firm

called the “Bower Cotton Group.” 4 (A65-A67.)

Sorsby cited several reasons why she felt that investing with

Bower Cotton was in the THA’s “best interest”: the funds

invested by the THA would be deposited in a Swiss bank

account; the THA’s principal would never leave the bank

account; “the payment” would be “guaranteed by the

participating bank”; and “all transaction [sic] [would] be

monitored by the federal reserve [sic].” (A65-A67.)

Nine days after this letter, the THA and Sorsby executed a

Memorandum of Understanding (“MOU”) pertaining to

Sorsby’s role as financial consultant and her fee for her services.

(A4.) Like the letter of appointment, the MOU did not obligate

the THA to participate in any financing program proposed by

Sorsby. (A68-A78.) The MOU provided that “all schedules of

payments and money management shall be determined and

pursued only with the agreement of the [THA].” (A71.)

The fee clauses of the MOU provided, in relevant part, as

follows:

For the services of financial consultant, THA agrees to

pay the Financial Consultant a fee equal to ten percent

* Although not apparent from her letter to the THA or from the

Petition, Bower Cotton is a law firm, and not an investment house.

(A1] 1.)

(10%) of all monies earned from the private placement

(or other funding programs) out of funds provided to

THA generated by the funding program arranged by

the Financial Consultant. . . .

In the event that the House selects a form of

conventional financing from the financing structures

submitted by the Financial Consultant, the parties shall

negotiate prior to the closing of the conventional

financing a fee agreeable to both parties to compensate

the Financial Consultant for the services in arranging

such financing. The fee to be payable upon closing.

(AS.)

In early April, 1999, Sorsby and THA officials traveled to

London for a series of meetings where various individuals

presented investment opportunities for the THA’s consideration.

(A6.) One of the meetings took place at Bower Cotton with a

solicitor in that law firm, who has since prohibited from

practicing law by the Law Society, and representatives of a

company called Nikea, N.V. (A6; AI59-A160.)

Three days after the meeting at Bower Cotton, on April 12,

1999, Sorsby wrote to Chief Secretary Charles with “wonderful

and timely news for the THA.” (A6.)° Sorsby reported that

“Bower Cotton/Nikea” had an investor with “US $100 million

of good clean funds” that Bower Cotton/Nikea’s investor was

placing into a trading program, i.e., an investment program. (A6;

A79.) Sorsby stated that the THA had an opportunity to

“piggyback” $10 million of the THA’s money onto the $100

million that Bower Cotton/Nikea was placing in the investment

program. (A80.) Sors | assured the Chief Secretary that the

transaction was entirely risk-free to the THA: “It]here is

absolutely no risk for the THA because your US $10 million

stays In your own account and in your own control with

absolutely no leans [sic] against the monies.” (A81.)

* The letter is mistakenly dated March 12, 1999. It should have

been dated April 12, 1999. (A6 n.4.)

In its brief to the Fifth Circuit, Petitioner elaborated on the

alleged opportunity with Bower Cotton/Nikea. Petitioner

asserted that Sorsby had “secured a funding program with

philanthropic interests.” (A5S9.) The “philanthropic” funding

group was allegedly willing to invest $100 million into an

investment program to be managed by Peter Newton, on behalf

of Nikea, N.V., provided that the THA invested $10 million.

(A7; A59.)°

Petitioner claimed that the “combined funds, $110 million,

would be placed in an investment program to be managed by

Mr. Peter Newton.” (A59.) According to Petitioner, the “program

would leave $10 million at all times in an account that would

be in the control of the THA only.” (/d.) In addition, under this

alleged program, the THA’s principal would be guaranteed by:

“a bank guarantee, for a period of a year . . . purchased from a

top 25 bank guaranteeing the $10 million invested by the THA.”

(/d.) eG

According to Petitioner, “[a]fter 12 months, 30% of the

profits generated would be disbursed to the THA to fund the

projects, 30% would be [sic] go to the investors that pledged

the $100 million, and the remainder would be reinvested into

the trade for an additional 12 months.” (A59.) (Apparently, the

philanthropic funding group was willing to let the THA receive

a disproportionate share of the profits.) Petitioner also stated

° In the Appendix to its Petition, Petitioner includes the unverified,

unsworn affidavit of Mohammad Mohammadi, the alleged

“philanthropic investor” whom Petitioner states that Sorsby introduced

to Nikea, N.V. (See Petioner’s Appendix (“Pet. App.”) E.) The purported

affidavit (allegedly signed in Switzerland) is inadmissible, because it is

not subscribed by Mohammadi as true under the penalties of perjury of

the United States of America, as required by 28 U.S.C. § 1746(1).

Respondents moved to strike the affidavit on this and other grounds.

Respondents also moved to strike portions of the Sorsby affidavit, which

is also included in the Appendix to the Petition, including the portions

in which she purported to explain the Bower Cotton program. The

District Court did not reach either motion to strike, presumably because

they were not material to the grounds on which the District Court granted

summary judgment.

that “[t]he guarantee for the principle [sic] placed into the fund

for the second year would be the same as the guarantee for the

first year.” (A59-A60.) Sorsby testified that the anticipated

profits under the investment program that she recommended

were “30% a month.” ’ (A126.)

In her letter of April 12, 1999 describing the Bower Cotton

proposal, Sorsby told the Chief Secretary that “in order to get

your contract issued from the bank for your review and

approval,” the THA needed to sign three documents: (1) a “Letter

of Intent,” (2) “Proof of Funds,” and (3) “Pay orders signed and

notarized.” (A7; A80.) Sorsby testified that a “pay order” is an

order to pay a commission, in this case, to her. (A118-A119.)

Concerning the pay orders, Sorsby assured the Chief Secretary,

“(rJemember our pay orders are generated through the trade, so

if you do not go forward with the contract, these pay orders will

be worthless.” (A7.) On April 30, 1999, Chief Secretary Charles

signed the requested documents. (/d.)

The Letter of Intent states that the Chief Secretary is “willing

and able to enter Ten Million US dollars for participation into a

private bank-secured investment programme, subject to my [the

” Without compounding, an interest rate of 30% per month on $110

million of principal yields total interest of $396,000,000 after 12 months.

Thirty percent of these profits would be $118,800,000 on an investment

of $10 million. Therefore, apparently, the THA would have earned over

$118 milion in one year, or approximately 1180%, on its “guaranteed”

initial $10 million investment. In the event of compounding, the total

investment at the end of twelve months would be worth approximately

$2 billion. As Respondents argued in the courts below, Petitioner’s

assertions concerning the Bower Cotton investment program must be

disregarded, based on the fact that it lacks admissible evidence that

Bower Cotton actually offered such a program, and based on the lack

of record citations in support of most of its assertions about the alleged

program. Even if the assertions are treated as true, however, they do not

support Petitioner’s claim that it is entitled to $10 million (10% of the

$100 million that Sorsby allegedly secured from the philanthropic

funding group) (A126-27), or any other sum. It is undisputed that the

THA did not participate in the “recommended” funding program and

did not receive any money from it. (A9.)

Chief Secretary’s] approval of the contract.” (A7.) The Letter

of Exclusivity grants “the trade program manager/administrator/

facilitator [i.e, Peter Newton] full exclusive nght as our sole

agent. . . to enter these funds for me, or the corporation into the

best available bank-secured investment program” (A8) and

attests that the Chief Secretary has sent “cease and desist notices

to any other intermediaries or trade groups that have had our

paperwork in the past.” (A147.)

The Irrevocable Payment Order Confirmation (the “Pay

Order”) provides that Sorsby will receive “a total of 10% (Ten

Percent) of the net disbursable profits received by [the THA] or

any Company on their behalf to facilitate the investment

transaction. . . .” (A7—A8.) Regarding the bank account to which

Sorsby’s commission should be paid, the Pay Order states “[t]o

be advised.” (A142.) The Pay Order includes a waiver of

immunity rights. (A8.) It also states that it “is valid upon

commencement of the start of the transaction herein. . . .” (/d.)

Despite Sorsby’s recommendation, the THA did not invest

with Bower Cotton. As the Fifth Circuit stated, “[t]here was no

investment transaction in relation to the Bower Cotton

proposal,” and “the THA never signed a contract with a bank in

relation to such an investment.” (A15.)

In an e-mail dated July 11, 1999, Sorsby stated to the THA’s

business analyst, Rennie Dumas, that she “cannot afford to keep

giving away my services and educating these people. .. . the

letter [Charles] prepared and the payorder meant nothing since

[the THA] did not go forward.” (A8; A98-A99.) In a letter to

Chief Secretary Charles dated March 7, 2000, Sorsby expressed

her frustration with the THA: “I have always tried to get you

what you need, lawyers, funding etc. and have not ever charged

you a dime.” (A8; A104.) Sorsby asked Charles to meet with

some financiers whom she knew, assuring him that “[t}his does

not commit you to anything.” (A104.) Thereafter, some THA

officials met with some financiers introduced by Sorsby, but

did not enter into any agreement with them. (A8-A9.)

Respondents never obtained or received any money from any

financing source introduced by Sorsby or Petitioner. (A9.)

C. Misstatements of Fact by Petitioner

1. Sorsby’s Experience with International Financing

Arrangements

Petitioner asserts that “Ms. Sorsby has extensive experience

with international financing arrangements.” (Pet. at 1.) As

purported support, Petitioner appends Sorsby’s own self-serving

affidavit, replete with hearsay, to which is attached a letter of

recommendation from a Sermin Bahsis of Istanbul, Turkey,

together with Sermin Bahsis’ resume. (Pet. App. D14-D18.)

Bahsis claims to have an MBA from the incredibly christened

“Manchester School University of Whales (frozen).” (/d. at

D16.) Respondents moved to strike these and other hearsay

documents attached to Sorsby’s affidavit. As noted above, the

District Court did not reach the motion to strike, presumably

because the material cited therein was irrelevant to the grounds

on which the District Court granted summary judgment.

2. Petitioner’s Misstatements about Respondents’

Alleged Approval of a Contract for the Bower

Cotton Proposal

Petitioner asserts that the documents signed by Chief

Secretary Charles on April 30, 1999 “demonstrate” that “the

Chief Secretary actually approved the contract in the Bower

Cotton proposal under penalty of perjury.” (Pet. at 6.) Similarly,

Petitioner asserts that Chief Secretary Charles “accepted” the

“funding” allegedly secured by Petitioner “when he issued a

Letter of Exclusivity giving Peter Newton/Bower Cotton the

exclusive right to enter the contract.” (/d. at 6-7). Petitioner

also asserts that:

Mr. Newton preceded [sic] with the contract to enter

the funds and probed the bank account at the instruction

of the Chief Secretary and Secretary of Finance, Hochoy

* This section is included pursuant to the Court’s “admonition” in

Supreme Court Ruije 15.2 regarding Respondent’s obligation to point

out any perccived misstatement in the petition. While Respondents take

issue with most of the statements in the Petition, duc to space constraints,

Respondents highlight the most egregious of the misstatements.

Charles, but the T&T Government did not have the

funds that they pledged under penalty of perjury that

they had, therefore causing a breach in the contract.

(Jd. at 7.) For the reasons set forth below, and as the Fifth Circuit

held, the documents signed by Hochoy Charles did not give

Petitioner or Peter Newton authority to approve the Bower

Cotton proposal on behalf of the THA.

3. Petitioner’s Misstatements as to its Right to

Compensation, and Where Sorsby Was to be

Compensated |

Petitioner asserts that it “was to receive a 10% commission

as compensation for securing funding.” (Pet. at 1; see also id.

at 6). Petitioner asserts that “Ms. Sorsby secured funding for

the T&T government through the Bower Cotton transaction and

Mohammed [the alleged philanthropic investor] pledged to that

transaction.” (/d. at 6.) Petitioner asserts that “[u|ltimately, the

Government reneged on the funding project leaving Can-Am

uncompensated for years of efforts on behalf of the

Government.” (/d. at 1.) Petitioner claims that “Ms. Sorsby did

everything she was requested to do,” and that “[h]er performance

was complete without complaint or criticism.” (/d. at 7.)

Petitioner also claims that Ms. Sorsby “was to be compensated

for her work in the United States.” (/d. at 13.)

In fact, since the THA was under no obligation to enter any

funding program arranged by or “secured” by Petitioner,

Petitioner’s night to a fee was not contingent upon Petitioner’s

“securing funding.” Rather, under the MOU, Petitioner would

be entitled to a fee equal to ten percent of the “monies earned”

by the THA on its investment only in the event that the THA

actually entered an investment program arranged by Petitioner,

and only if the THA actually received a return on its investment

— neither of which happened. (AS; A9.)’

* Solely for purposes of this opposition, without waiver of any

argument or affirmative defense, Respondents treat the MOU as a valid

contract. Had this case gone to trial, Respondents would have proven

(Cont'd)

Furthermore, there is no record support for the statement

that Sorsby was to be compensated, if at all, in the United States.

In fact, regarding the bank to which payments to Sorsby were

to be made, the Pay Order states, “[t]o be advised.” (A142.)

4. Petitioner’s Misstatements as to the Chronology and

Location of Events Relating to the Bower Cotton

Proposal

Petitioner states as follows:

Allan Richard’s [sic] wrote to Ms. Sorsby in the U.S.

to set up meetings in Tobago for her to travel to Tobago

with Hugh Hague from Canada, to complete the Bower

Cotton proposal and travel on to London for a meeting

with Bower Cotton all of which including, but not

limited to, the irrevocable pay order and letter of

exclusivity was negotiated and originated in the U.S.

in the office of Can-Am [sic] attorney through telephcne

conferences, fax and e-mail, prior to traveling to Tobago

and on [sic] London.

(Pet. at 11.)

Petitioner also states:

The Fifth Circuit’s narrow focus on the Bower Cotton

transaction fails to recognize that the Bower Cotton

transaction as well as many other funding proposals

were negotiated and originated in the United States.

(/d. at 13.)

These statements are untrue. As the record demonstrates,

Sorsby and THA officials traveled to London in early April,

1999, where they met with representatives of Bower Cotton

and Nikea. (A6.) Three days after that meeting, on April 12,

(Cont'd)

that it is not a valid contract, and that if it were a valid contract, neither

Petitioner nor Sorsby performed. Respondents also note that Petitioner

lacks any competent evidence that it or Sorsby “secured funding” for

the THA. As discussed above, neither Sorsby’s affidavit nor Mohammad

Mohammadi’s affidavit contains admissible statements in support of

the assertion that Petitioner “secured funding.” (see fn. 6&7, supra

at 6-7.)

1999, in a letter announcing the “wonderful and timely news”

of an investment opportunity with Bower Cotton, Sorsby

informed Chief Secretary Charles that the THA needed to sign

various documents, including “pay orders,” in order to “get your

contract issued from the bank.” (A6-A7.) There is no record

evidence that the irrevocable pay order, letter of exclusivity

(addressed to Peter Newton in London), or any other document

signed by any THA official was “negotiated” or “originated” in

the United States. In addition, Sorsby stated that “Peter Newton

said [the “bank”] was in Switzerland.” (A113.)

Regarding “other funding proposals” which allegedly were

“negotiated and originated in the United States,” the record

contains no competent evidence of any such proposal.

5. Petitioner’s Misstatement Concerning Activity of

the THA’s Business Analyst

Petitioner states that “Ms. Sorsby and Rennie Dumas, the

THA’s business analyst, continued their work in the United States

and Tobago on funding program proposals.” (Pet. at 11.) There is

no support in the record for the statement that Rennie Dumas

worked in the United States on any funding program proposal.

6. Petitioner’s Misstatements Concerning the

Relationship between the Government of the

Republic of Trinidad and Tobago and the THA, and

the Role of the Chief Secretary of the THA

Petitioner refers to the THA as the “legislative body” of

T&T and as the “governing body” of T&T. (Pet. at 1). In fact,

“T&T... established the [THA] to administer Tobago Island.”

(A2) (emphasis added.) The THA consists of an Executive

Council, which comprises several Secretaries, including the

Chief Secretary. (/d.) The responsibilities of the Chief Secretary

include “planning Tobago Island development projects.” (/d.)

Petitioner describes Hochoy Charles, Chief Secretary of the

THA, as the Chief Secretary of “T&T,” and also describes him

as the “highest government official in charge of Finance (akin

to our U.S. Secretary of the Treasury).” (Pet. at 1.) There is no

record support for either of these misstatements of fact.

7. Petitioner’s Misstatements Regarding an “Agency”

Relationship between the THA and Ms. Sorsby or

Can-Am

Throughout the Petition, Petitioner refers to itself or Sorsby

as the “agent” of T&T and/or the THA, based solely on an

“express agency agreement.” For the reasons set forth below,

neither Petitioner nor Sorsby was an “agent” of either

Respondent.

8. Petitioner’s Misstatements Regarding the Waiver

of Immunity Clause in the Pay Order

The Petition refers numerous times to Respondents’ alleged

“waiver” of their sovereign immunity, implying a general waiver

of immunity by Respondents. Petitioner erroneously relies on

one clause of the “Pay Order” — an agreement related only to

the Bewer Cotton proposal — to demonstrate such waiver. As

set forth in greater detail below, however, the Pay Order’s

validity and enforceability was conditioned upon Respondents’

approval of the Bower Cotton proposal, which never happened.

9. Petitioner’s Misstatements Regarding Can-Am’s

Commercial Activities in the United States

There is no record support for the statement that Petitioner

was engaged to “solicit sources in the United States for

commercial financing originating in the United States... .”

(Pet. at 13.) In fact, Petitioner itself refers to its alleged

solicitation of financing and investment opportunities on behalf

of the THA outside of the United States, including the Bower

Cotton proposal. (/d. at 11.) In any event, as explained fully

below, the conduct that Petitioner alleges took place in the United

States is irrelevant because (1) Petitioner’s actions cannot be

imputed to Respondents, wherever those actions took place;

(2) none of Petitioner’s actions are the “basis” for its lawsuit;

and (3) such actions did not rise to the level of “commercial

activity.”

Il. REASONS FOR DENYING THE PETITION

The Fifth Circuit correctly affirmed the District Court’s

grant of summary judgment in Respondents’ favor, properly

determining that Petitioner’s claims cannot be brought against

Respondents because they are immune from suit in the courts

of the United States under the FSIA and neither the waiver

nor commercial activity exceptions to the FSIA apply.

No “compelling reasons” exist to grant certiorari in this case,

as the Fifth Circuit’s Opinion followed well-established

interpretations of the FSIA by this Court'® and the various Courts

of Appeals.

The Petitioner does not make any attempt to present

“compelling reasons” for its Petition to be granted — nor could

it. See Sup. Ct. R. 10. Petitioner does not argue that the Opinion

is in conflict with a decision of this Court or another Court of

Appeals, that the Fifth Circuit decided an important federal

question that has not been settled by this Court, or that the Fifth

Circuit has decided an important federal question in a way that

conflicts with the relevant decisions of this Court.'’ See Sup.

Ct. R. 10(a)-(c).

since its enactment. Fernandez- Vargas v. Gonzales, 126 S.Ct. 2422 (June

22, 2006); Ministry of Defense and Support for the Armed Forces of the

Islamic Republic of Iran v. Elahi, 126 S.Ct. 1193 (Feb. 21, 2006); Exxon

Mobil Corp. v. Saudi Basic Indus. Corp., 544 U.S. 280 (2005); Sosa v.

Alvarez-Machain, 542 U.S. 692 (2004); Republic of Austria v. Altmann,

541 U.S. 677 (2004); Dole Food Co. v. Patrickson, 538 U.S. 468 (2003);

College Sav. Bank v. Florida-Prepaid Postsecondary Educ. Expense

Bd., 527 U.S. 666 (1999); Kiowa Tribe of Oklahoma v. Manufacturing

Tech., Inc., 523 U.S. 751 (1998); Saudi Arabia v. Nelson, 507 U.S. 349

(1993); Republic of Argentina v. Weltover, Inc., 504 U.S. 607 (1992);

Granfinanciera, S.A. v. Nordberg, 492 U.S. 33 (1989); Mesa v.

California, 489 U.S. 121 (1989); Argentine Republic v. Amerada Hess

Shipping Corp., 488 U.S. 428 (1989); First Nat'l City Bank v. Banco

Para El Comercio Exterior de Cuba, 462 U.S. 611 (1983); Verlinden

B.V. v. Central Bank of Nigeria, 461 U.S. 480 (1983); Dames & Moore

v. Regan, 453 U.S. 654 (1981); Pfizer, Inc. v. Government of India, 434

U.S. 308 (1978). None of these cases provide any support for Petitioner’s

argument that the waiver and commercial activity cxceptions to the FSIA

apply here.

'' For example, Petitioner’s argument that “no other Circuit Court

or any U.S. Supreme Court cases hold that an express waiver of immunity

(Cont'd)

Furthermore, Petitioner does not state that the Fifth Circuit

inaccurately stated the law or inaccurately described the

summary judgment record. Rather, Petitioner merely claims that

the Fifth Circuit misapplied “a properly stated rule of law” to

the undisputed evidence or that the Opinion contained

“erroneous factual findings ” See Sup. Ct. R. 10. Rule 10

expressly instructs that a petition for certiorari is “rarely

granted” on these grounds. /d. 7

- Because none of the arguments of Petitioner, nor any of the

cases cited in the Petition,’? provides any “compelling reason”

to grant the Petition, it should be denied.

(Cont'd)

clause has been obliterated because the contract was deemed

conditional” (Pet. at 5) is not a “compelling reason” for granting a writ

of certiorari because it does not argue that the Fifth Circuit’s decision

is in conflict with a decision of this Court or another Court of Appeals,

that the Fifth Circuit decided an important federal question that has not

been settled by this Court, that the Fifth Circuit has decided an important

federal question in a way that conflicts with the relevant decisions of

the Supreme Court, or that the Fifth Circuit inaccurately stated the law

or inaccurately described the summary judgment record. See Sup. Ct.

R. 10(a)-(c). Petitioner’s argument is rendered even weaker by its

inability to cite any cases, anywhere in the Petition, in its favor — i.e.,

holding that an express waiver of immunity can be enforced where it is

expressly contingent on the formation of a contract that was never

formed.

'2 Indeed, the four cases cited by Petitioner as “recent[]} ...

interpretation[s]” by this Court of the FSIA (Pet. at 4) (Elahi, 126 S.Ct.

1193; Exxon Mobil, 544 U.S. 280; Altmann, 541 U.S. 677; and Dole,

538 U.S. 468) provide no support for Petitioner’s argument and, indecd,

have no relevance to this case whatsoever. In Elahi, this Court discussed

the question of whether Iran’s Ministry of Defense was an “agency or

instrumentality” of Iran, for purposes of analyzing whether the Defense

Ministry’s property in the United States was subject to attachment, and

remanded to the Ninth Circuit for further consideration. 126 S.Ct. at

1194-95. The Exxon Mobil case deals with the FSIA tangentially,

mentioning it only in its description of the proceedings below, and does

not interpret the FSIA or apply its principles. 544 U.S. at 290-91. Altmann

(Cont'd)

A. The Fifth Circuit Court of Appeals Properly Held that

the Waiver Exception to the FSIA Does Not Apply

The FSIA “provides the sole basis for obtaining jurisdiction

over a foreign state in a court in the United States.” (A 10) (citing

Argentine Republic v. Amerada Hess Shipping Corp., 488 U.S.

428 (1989)). “Under the [FSIA], a foreign state is presumptively

immune from the jurisdiction of United States courts; unless a

specified exception applies, a federal court lacks subject-matter

jurisdiction over a claim against a foreign state.” Saudi Arabia

v. Nelson, 507 U.S. 349, 355 (1993); see Al0. Here, both

Respondents meet the definition of “foreign state” set forth in

28 U.S.C. § 1603(a) as “it is undisputed that T&T is a foreign

state and that the THA is T&T’s instrumentality.” (A11.) Thus,

Respondents have established a prima facie case for immunity

under the FSIA and it was incumbent upon Petitioner to rebut

that and demonstrate that one of the exceptions to the FSIA

applies. (A1l1) (citing United States v. Moats, 961 F.2d 1198,

1205 (Sth Cir. 1992)).

The only relevant exceptions to the FSIA that would allow

a federal court to exercise jurisdiction over Respondents are

the “waiver” and “commercial activity” exceptions to the FSIA.

28 U.S.C. § 1605(a)(1)-(2); see Pet. at 3-4. The Fifth Circuit

properly held that Petitioner failed to satisfy its burden to

establish that the “conduct that forms the basis of [its]

complaint” falls within one of these exceptions. (A11) (citing

Republic of Argentina v. Weltover, Inc., 504 U.S. 607, 610-11

(1992); see also A25.

The waiver exception to the FSIA applies only when the

foreign state “has waived its immunity either explicitly or by

inplication, notwithstanding any withdrawal of the waiver

(Cont'd)

held that the FSIA applies to claims involving conduct that occurred

prior to the enactment of the FSIA. 541 U.S. at 699-700. Finally, Dole

held that only where a foreign state owns a majority of shares of a

corporation can that corporation be considered to be an “instrumentality

of a foreign state” under the FSIA. 538 U.S. at 480. The remainder of

the cases cited in the Petition are distinguished herein.

which the foreign state may purport to effect, except in

accordance with the terms of the waiver.” (A12) (quoting

28 U.S.C. § 1605(a)(1)). The Fifth Circuit, pointing out that the

waiver exception is to be “narrowly construed” (A12) (quoting

Pere v. Nuovo Pignone, Inc., 150 F.3d 477, 482 (Sth Cir. 1998)),

correctly held that, in this case, the waiver exception to the FSIA

does not apply. (A15.)

The only basis that Petitioner asserts in support of its

argument that Respondents waived their sovereign immunity is

a clause in the “Pay Order” for the Bower Cotton proposal (Pet.

at 6), which never came to fruition. The Fifth Circuit

appropriately rejected this argument, holding that, “[nJeither

T&T nor the THA waived sovereign immunity with respect to

the conduct upon which Can-Am’s complaint stands, because

the document containing the waiver clause was conditional, and

the condition never occurred.” (A12.)

In reaching this conclusion, the Fifth- Circuit properly

evaluated the “Pay Order” within the context of its execution.

Simultaneously with its signing, Chief Secretary Charles signed

the “Letter of Intent” and the “Letter of Exclusivity,” both of

which explicitly reference the Bower Cotton proposal. (A7.)

Sorsby requested the execution of these documents together,

writing to Chief Secretary Charles “[w]e must have these things

in order to get your contract issued from the bank for your review

and approval.” (Id.) (emphasis added.)

The “Pay Order” states that it is “valid upon commencement

of the start of the transaction herein.” (A8) (emphasis added.)

Further, the Pay Order states that it “will be executed, following

settlement and clearance of funds into the Disbursement Account

for the first and subsequent tranches.” (A140.) By its own terms,

therefore — as the Fifth Circuit properly determined — the “Pay

Order” is a conditional agreement to pay Sorsby a commission

— or, as the Fifth Circuit put it, a “contingency fee” — on profits

generated by an investment. (A15.) The Pay Order simply could

not be “breached,” as Petitioner mistakenly alleges, because

any obligation of the THA to pay Sorsby rose or fell, in the first

instance, with entry by the THA into a “specific investment

transaction” with Bower Cotton — a transaction separate and

apart from the mere execution of the Pay Order and related

documents."* Jd. The Pay Order, there + re, was rendered

meaningless when the THA decided against investing in the

Bower Cotton proposal. /d.

Petitioner’s convoluted argument that the Bower Cotton

proposal was “approved” by the Letter of Exclusivity (Pet. at 6-7)

should be ignored — as it was by the Fifth Circuit — as being without

foundation in fact or logic. (A13-A15.) The Letter of Exclusivity

does not state that the THA funded or otherwise entered into any

investment and is irrelevant to the waiver issue, as demonstrated

by the Fifth Circuit’s sound rejection of that argument. (/d.) Rather,

the Letter of Exclusivity afforded Peter Newton the exclusive right

for twenty days to enter the THA’s funds into “the best available

investment program” (A7), but the decision as to which program

was “best availabie” was the THA’s to make. Petitioner offered no

evidence that the THA ever signed a contract with a bank in relation

to any investment program with Bower Cotton or any funding group

presented by Petitioner. (A9.)

The Letter of Intent, similarly, makes clear that the THA’s

participation in the alleged investment program was “subject to

{the Chief Secretary’s] approval of the contract.” (A7.) Thus,

Petitioner’s argument that “[nJothing in... the. . . transaction

documents in question suggests the express waiver was

conditional” (Pet. at 6) ignores the Letter of Intent —- a document

signed simultaneously with the “Pay Order” and which

references, like the Pay Order, the Bower Cotton proposal. (A7.)

The Fifth Circuit astutely recognized this:

The payment authorized by the order is conditioned on

the investment transaction, which in turn relied on the

THA’s approval of and signature on a contract between it

and the bank. There was no investment transaction in

'? Even Sorsby told the Chief Secretary, “our pay orders are

generated through the trade ... if you do not go forward with the

contract, these pay orders will be worthless.” (A7.)

relation to the Bower Cotton proposal. Sorsby’s

contingency fee depended on profits generated by an

investment that was never made; the THA never signed a

contract with a bank in relation to such an investment.

The waiver clause exists within a document that

specifically relates to an investment transaction which

never transpired. Thus, the waiver of “all rights of

immunity” also relates to the investment transaction which

never transpired.

(A15.)

The terms of the MOU — which did not obligate the THA

to participate in any financing program, to pay anything to Sorsby

if the THA did not earn profits from any such financing program,

or to enter a conventional financing arrangement under a

proposal presented by Sorsby — support the Fifth Circuit’s

interpretation.'* As do Sorsby’s own statements. On July 11,

1999, she wrote an e-mail to the THA stating “I cannot afford

to keep giving away my services. ... the letter [the THA]

prepared and the payorder [sic] meant nothing since the THA

did not go forward [with the Bower Cotton proposal].” (A8)

(emphasis added.’

Thus, Petitioner’s references to Respondents’ “breach of

contract” are utterly nonsensical. This case does not present the

question that Petitioner says it does — whether a sovereign nation

can avoid a waiver of immunity by breaching the agreement

containing the waiver. Rather, in this case, the THA — for good

reason'’ — never entered into the contract of which the immunity

'* In relevant part, the fee clause of the MOU provides as follows:

[flor the services of financial consultant, THA agrees to pay

the Financial Consultant a fee equal to ten percent (10%) of

all monies earned from the private placement (or other

funding programs) out of funds provided to THA generated

by the funding program arranged by [Sorsby].

(A5) (emphasis added.)

'S See fn. 7, supra at 7, concerning Petitioner’s promised rates of

return on the Bower Cotton proposal. These rates of return were clearly

unrealistic.

waiver was one component part. (A9; Al5.) The Pay Order —

and its waiver provision — never became effective as the THA

decided not to enter into an investment scheme with Petitioner.

The Fifth Circuit correctly held that the waiver exception to the

FSIA does not apply.

B. The Fifth Circuit Court of Appeals Properly Held that

the Commercial Activity Exception to the FSIA Does

Not Apply

The Fifth Circuit also correctly held that the commercial

activity exception to the FSIA does not apply in this case.

A foreign sovereign’s “commercial activity” must have a

jurisdictional nexus with the United States for the exception to

apply. The FSIA provides for three means of establishing that

nexus: demonstrating the existence of (1) “a commercial activity

carried on in the United States by the foreign state”; (2) “an act

performed in the United States in connection with a commercial

activity of the foreign state elsewhere”; or (3) “an act outside

the territory of the United States in connection with a commercial

activity of the foreign state elsewhere [that] causes a direct effect

in the United States.” (A17) (quoting 28 U.S.C. § 1605(a)(2)).

Further, the FSIA requires that, even if the “commercial

activity” has the requisite jurisdictional nexus with the United

States, for the exception to apply, a plaintiff's cause of action

must be “based upon” that activity. (A18) (citing NYSA-ILA

Pension Trust Fund v. Garuda Indonesia, 7 F.3d 35, 38 (2d Cir.

1993) (“[i]n construing the commercial activity exception, courts

have required that a significant nexus exist between the

commercial activity . . . anda plaintiff's cause of action”); Stena

Rederi AB v. Comision de Contratos del Comite Ejecutivo

General del Sindicato Revolucionario de Trabajadores

Petroleros de la Republica Mexicana S.C., 923 F.2d 380, 386-

87 (5th Cir. 1991) (“{nJot only must there be a jurisdictional

nexus between the United States and the commercial acts of

the foreign sovereign, there must be a connection between the

plaintiff's cause of action and the commercial acts of the foreign

sovereign”)); see also de Sanchez v. Banco Central De

Nicaragua, 770 F.2d 1385, 1391 (Sth Cir. 1985) (“[t]he focus

of the [commercial activity] exception to immunity . . . is not

on whether the defendant generally engages in a commercial

enterprise or activity .. . rather, it is on whether the particular

conduct giving rise to the claim in question constitutes or is in

connection with commercial activity. . . .”)).

The Fifth Circuit correctly held that no “commercial

activity” of Respondents had the requisite “jurisdictional nexus”

with the United States under any prong of the exception. (A15.)

The Fifth Circuit further held that, in any event, Petitioner’s

complaint was not based upon any commercial activity of

Respondents. (A22.)

The Fifth Circuit explained that, under the commercial

activity exception, a cause of action is “based upon” actions

with a jurisdictional nexus to the United States where, if those

actions are proven, they “would entitle a plaintiff to relief under

his theory of the case.” (A18) (citing Nelson, 507 U.S. at 357-

58); see also Stena, 923 F.2d at 387 (“[t]he requirement. . . ofa

connection between the plaintiff's cause of action and the

commercial acts of the foreign sovereign is a significant barrier

to the exercise of subject matter jurisdiction in the United States

courts.”’)

Analyzing the first two prongs of the commercial activity

exception — “commercial activity carried on in the United States

by the foreign state” and “an act performed in the United States

in connection with a commercial activity of the foreign state

elsewhere” — the Fifth Circuit held that Respondents conducted

no activity in the United States having the requisite contact with

the United States and no “commercial activity” anywhere (A21-

A22, n.10).

Further, the Fifth Circuit rejected Petitioner’s argument that

activity in the United States of Petitioner, as tne agent of

Respondents, could be imputed to Respondents.'* (A19) (‘the

'© The agency argument was not properly before the Fifth Circuit

as it went entirely unmentioned in the District Court. When Petitioner

first raised the agency argument in its brief to the Fifth Circuit, it was

(Cont'd)

commercial acts must be of the named Defendant”). The Fifth

Circuit held that Petitioner “did not substantiate its theory” that

it was an agent of Respondents.'’ (A19.) Crucial to the Fifth

Circuit’s analysis were its findings that the record did not support

Petitioner’s claim that Respondents had “both the right to assign

Sorsby’s task and control the means and details of the process

by which she would accomplish it.”’* (A20.) Petitioner claims

(Cont'd)

largely incomprehensible. To the extent that the agency argument is

reviewed, it can only be seen as backwards and should be ignored.

Ironically, if Sorsby could demonstrate that she was an “agent” of T&T

or the THA, she might argue for protection under the FSIA in the event

that some third party filed suit against her for any actions taken on

behalf of Respondents. See, e.g., Velasco v. Government of Indonesia,

370 F.3d 392, 398 (4th Cir. 2004) (“courts have constr. od foreign

sovereign immunity to extend to an individual acting in his official

capacity on behalf of a foreign state”); Bryks v. Canadian Broad. Corp.,

906 F. Supp. 204, 210 (S.D.N.Y. 1995) (immunity extends to agents of

a foreign staie acting in their official capacities). However, Petitioner

has cited no authority for the proposition that, under the FSIA, a plaintiff

can loox to its own actions, as a purported agent for a forcign sovereign,

to establish that the commercial activity exception applies.

'7 Petitioner’s arbitrary declaration that the Fifth Circuit’s decision

regarding “the commercial character of Can-Am's actions” is in

contradiction with Weltover, 504 U.S. 607 (Pet. at 5) (emphasis added)

is, at best, simply uninformed and, at worst, a desperate, baseless attempt

to conjure a “compeliing reason” for granting certiorari. As observed

by the Fifth Circuit, this Court’s Weltover decision did not face any

question regarding agency and evaluated, under the commercial activity

exception to the FSIA, only the acts of the foreign sovercign. Weltover,

' 504 US. at 609-10; see also A20 (“Weltover does not conclude that the

acts of the plaintiff within the United States may be attributed to the

defendant to defeat sovereign immunity. . . . [rjather, it is the acts of the

foreign government that determine if the foreign sovereign’s acts are

‘commercial’ within the meaning of the FSIA”).

'S Furthermore, the MOU (executed after the “agency agreement”)

specifically restricted Sorsby’s authority to bind Respondents. See A71

(“{ajll matters that require financial commitments by the THA shall be

brought to the notice of the THA for agreement before any final

commitments are made.”)

that the Fifth Circuit ignored the “express agency agreement”

between it and the THA." (Pet. at 9.) However, the Fifth Circuit

clearly rejected any import of the agreement, appropriately

elevating substance over form by holding that Respondents had

no control over Petitioner — an element essential to a finding of

agency (A20) — and summarily denying Petitioner’s Petition

for Rehearing on the issue. (A36-A37; A44-A57.)

In any event, the remainder of the Opinion clarifies that the

Fifth Circuit’s decision to reject application of the commercial

activity exception did not hinge on its finding regarding agency.”

'? In addition to Petitioner’s agency theory, it makes a desperate

attempt to point to some connection between Respondents and the United

States by alleging that Respondents engaged in commercial activity in

the United States by contacting Sorsby, by letter and telephone, while

she was in the United States. (Pet. at 11-12.) These facts, even if true,

do not constitute “commercial activity” by Respondents upon which

Petitioner’s suit is based. See, e.g., Stena, 923 F.2d at 387 (“the

connection between the cause of action and the sovereign’s commercial

acts in the United States must be material . . . . [i]solated or unrelated

commercial actions of a foreign sovereign in the United States are

insufficient to support a commercial activitics exception to sovereign

immunity”). In addition, Petitioner alleges that Rennie Dumas, a THA

employee, and “government representatives” worked together “in the

United States.” (Pet. at 11-12.) Petitioner cannot cite the record for such

propositions because they simply are not true and never happened.

Nothing in the record, not even Sorsby’s self-serving, inadmissible

affidavit, contradicts the facts that meetings between Petitioner and

Respondents occurred in either Trinidad & Tobago or London, all

documents relevant to the relationship osetween Petitioner and

Respondents were signed in Tobago, and R*spondents never traveled

to the United States in connection with any relationship with Petitioner.

See generally Ai38-A148.

* Indeed, the Fifth Circuit noted that “there is a question as to

whether Sorsby’s acts in the United States qualify as ‘commercial

activities’ . . . [because] [t]here are no cases to support the notion that

investigating potential investment options constitute [sic] commercial

activity under the FSIA.” (A22.) Petitioner criticizes the Fifth Circuit

and attempts to simplify this analysis, arguing that so long as the

(Cont'd)

The Fifth Circuit held that even the alleged acts of Petitioner

did not have the requisite nexus — or, as the Fifth Circuit termed

it, “material connection” — with Petitioner’s cause of action.

(A22); see also General Elec. Capital Corp. v. Grossman, 991

F.2d 1376, 1383-84 (8th Cir.1993) (single meeting between

parties in United States, along with use of mails, wire, and

telephones not sufficient nexus); Morgan Equip. Co. v.

Novokrivorogsky State Ore Mining and Processing Enter., 57

F. Supp. 2d 863, 870-71 (N.D. Cal. 1998) (some negotiation, in

the United States, of a contract between foreign sovereign and

a United States company did not have a sufficient nexus with

plaintiff's cause of action for breach of contract). The Fifth

Circuit reasoned that it would be illogical for Petitioner to claim

that its conduct had a “material connection” to its cause of action,

because Petitioner insisted that it “met its-end of the bargain.”

(A22.) If Petitioner did nothing wrong, the Fifth Circuit

implicitly reasoned, and Petitioner was the only party conducting

“commercial activity” with a jurisdictional nexus to the United

States, then its suit could not be “based on” its own activity in

the United States. (/d.)

Indeed, the only conduct of Respondents set forth in the

Petition as causing harm to Petitioner is Respondents’ “reneging”

on funding the Bower Cotton proposal. (Pet. at 1.) But, the

(Cont'd)

Respondents acted as “private player[s] in the market,” they conducted

“commercial activity.” (Pet. at 10-11) (citing Rush-Presbyterian-St.

Lukes Med. Ctr. v. Hellenic Republic, 877 F.2d 574 (7th Cir. 1989) and

Weltover, 504 U.S. at 616). However, Petitioner has cited no cases

supporting the proposition that merely investigating potential investment

options constitutes commercial activity under the FSIA. In fact, the case

law cited by Petitioner holds to the contrary. In Weltover, the defendant

actually issued debt instruments, in stark contrast to the facts of this

case, where Respondents entered into no transaction. Similarly, in Rush-

Presbyterian, the Greek government entered into a contract with a

Chicago hospital for the provision of kidney transplants to Greek

nationals, part of which the defendant failed to pay. 877 F.2d at 575.

Here, there was no such “transaction” — and thus, there was no

commercial activity.

Petition does not allege that any acts undertaken by Petitioner,

T&T or the THA in the United States have a “significant nexus”

with that allegation.”’ See also Nelson, 507 U.S. at 357-58

(plaintiffs suit, alleging personal injury in the form of unlawful

detention and torture by Saudi Arabia, was not “based upon”

Saudi Arabia’s acts of recruiting, and employing, United States

citizen to work in Saudi Arabia, reasoning that “while these

activities led to the conduct that eventually injured [the plaintiff],

they are not the basis for the [plaintiff's] suit”); Kelly v. Syria

Shell Petroleum Dev., 213 F.3d 841, 852-53 (Sth Cir. 2000)

(negligence claim was not “based upon” safety duties contained

in contract for the purchase of goods in the United States);

Gerding v. Republic of France, 943 F.2d 521, 527 (4th Cir. 1991)

(plaintiff's suit, alleging deeedent’s wrongful death at sea while

on a mission to repair underwater telephone line in Spain, was

not “based upon” a meeting in the U.S. to discuss strategy for

repairing line); Zedan v. Kingdom of Saudi Arabia, 849 F.2d

1511, 1513 (D.C. Cir. 1988) (plaintiff's breach of contract claim

could not be “based upon” recruiting call that eventually led to

contract, as call was merely a precursor to commercial

transaction, noting that the “based upon” requirement of the

commercial activity exception is “stricter than... a minimum

contacts due process inquiry”’).

Finally, the Fifth Circuit appropriately rejected Petitioner’s

claim under the third prong of the commercial activity exception,

holding that Petitioner failed to demonstrate commercial activity

by Respondents that caused a “direct effect” in the United States.

(A24-A2S.) The Petition’s only alleged “effect” in the United

States is alleged injury to Sorsby based upon the decision of the

THA not to enter into any financial transaction proposed by

Sorsby. (A23; Pet. at 13.) The Fifth Circuit rejected this

argument, reasoning that Respondents did not engage in

“commercial activity” because they never “transferred money

*! As set forth above at section I.C.4. at 11-12, Petitioner’s claims

that documents associated with the Bower Cotton proposal originated

and were negotiated in the United States are entirely unsupported by

the record.

in connection with any alleged investment opportunity identified

by Can-Am.” (A24.) The Fifth Circuit properly distinguished

Weltover, 504 U.S, at 618, and Voest-Alpine Trading USA Corp.

v. Bank of China, 142 F.3d 887, 896 (Sth Cir. 1998), reasoning

that in both of those cases, the defendants agreed to pay funds

into United States bank accounts and then failed to do so. (A23-

A24 n.11.) In this case, Respondents never entered into any

transaction with Petitioner and no money was due and owing to

Petitioner.

Accordingly, the Fifth Circuit property rejected all three

prongs of the commercial activity exception to the FSIA.

C. If an Exception to the FSIA Applies Here, Summary

Judgment in Favor of Respondents is Appropriate on

the Merits

A further reason that the Court should deny the Petition is

that, even if the Court decides that an exception to the FSIA

applies subjecting Respondents to suit in the United States,

Respondents have established that they are entitled to judgment

on the merits.” Eastman Kodak Co. v. Image Technical Svcs.,

Inc., 504 U.S. 451, 465 n.10 (1992) (Supreme Court has the

power to review summary judgment decisions “by examining

the record de novo without relying on the lower courts’

understanding”); Fed. R. Civ. P. 56(c).

1. Petitioner Cannot Prove That Respondents

Breached Any Contract

Under Texas law,” a claim for breach of contract requires

proof of: (1) a valid contract; (2) plaintiff's performance or

tender of performance; (3) a defendant’s breach; and (4) a

plaintiff's damages caused by the breach. Guzman v. Ugly

~ The Amended Complaint alleges breach of contract, fraud and

fraudulent inducement, negligent misrepresentation, promissory

estoppel, and quantum meruit. (A149-A158.) The THA and T&T are

separate entities and Petitioner must prove each clement of each claim -

against cach defendant.

® For the most part, the laws of Texas and T&T do not differ. But

see IL.C.2., infra at 27 n.25.

Duckling Car Sales of Texas, 63 S.W.3d 522, 528 (Tex. App.

2001). Petitioner’s breach of contract claim fails because there

was no “contract” between Petitioner and the THA; no breach

of any alleged contract; and Petitioner has suffered no damages

as a result of any alleged breach.

To the extent that the Complaint alleges a breach of the

MOU, the undisputed facts establish that the THA fulfilled all

possible obligations under the MOU, which states expressly

that Petitioner was not entitled to any fee unless the THA decided

to invest its money and profits followed.” (A34, District Court

opinion) (“[c]onsidering that [THA] was never bound to accept

any proposal, the fact that Sorsby did not make money on her

investment is not a legitimate basis for a breach of contract

claim.”) (emphasis in original.)

Further, Petitioner has no damages. No amount of tortured

logic can explain how ten percent of nothing (the sum of all the

profits received by the THA generated by investment

opportunities Petitioner brought to its attention) equals $10

million, which Petitioner seeks. (Pet. at 1; A127.)

2. Petitioner Cannot Prove That Respondents

Perpetrated Any Fraud Nor Fraudulently Induced

Petitioner

To prove fraud or fraudulent inducement under Texas law,”

there must be: (1) a material representation; (2) which was false;

4 Nor do the “agency agreement”, Pay Order, Letter of Exclusivity

or Letter of Intent impose any obligations on the THA that have been

breached. The agency agreement merely states that the THA “proposes

to secure financing” and that there are projects “being considered for

financing” and does not impose any obligation to invest in a proposal

suggested by Petitioner. (A135-A137.) The Pay Order is conditional

upon a later investment contract. (See supra at 17-20.) The Letter of

Intent imposes no obligations and states only that the THA “is ready”

for investment opportunities. (A143.) The Letter of Exclusivity imposes

no obligation on the THA beyond a commitment to invest with a

particular entity if it invests at all. (A13-A15.)

*> There is no civil claim for fraudulent inducement under the laws

of T&T. (A169.) Thus, to the extent T&T law w appues, this claim would

have to be dismissed.

(3) which was either known to be false when made or made

recklessly without knowledge of its truth; (4) which was

intended to be acted or relied upon; (5) which was relied upon;

and (6) which caused injury or damage. Formosa Plastics v,

Presidio Engineers, 960 S.W.2d 41, 47 (Tex. 1998). A promise

of future performance is not actionable as a basis for a claim of

fraud in the inducement unless made with the intent to deceive

with no intention of performance. Clardy Mfg. Co. v. Marine

Midland Bus. Loans, Inc., 88 F.3d 347, 359-60 (Sth Cir. 1996).

In its Amended Complaint, Petitioner points only to one

allegation — that “THA and T&T represented to Can-Am that it

intended to provide $10 million in funding for the requested

financing structure arranged for by Can-Am and it intended to

proceed with the capital improvement projects with the

participation of Can-Am.” (A152-A153.) This alleged fraudulent

representation is not set forth with particularity — it is devoid

of any detail regarding the source of the $10 million, the

particular financing structure, or the projects to be pursued.

Further, it is not false but merely an indication that, should the

appropriate circumstances exist, the THA will consider taking

certain action. Moreover, the representation is not material. The

documents themselves are replete with language indicating that

the THA had the nght to approve any investment. Furthermore,

Petitioner fails to state with particularity that it relied on any

misrepresentation by Respondents to its detriment. Rather,

Petitioner knew that it would not be paid unless the THA chose

to invest in one of these programs and earned profits as a result.

(A3; A5; A7-A8.)

3. Petitioner Cannot Prove that T&T or the THA

Made Negligent Representations To Petitioner

To demonstrate liability for negligent misrepresentations,

a plaintiff must show: (1) a false representation; (2) the failure

to exercise reasonable care in making the representation; and

(3) damages suffered as a result of reasonable reliance on the

representation. Griffin v. GK Intelligent Sys., 87 F. Supp. 2d

684, 690 (S.D. Tex. 1999). “[N]egligent misrepresentation does

not occur when a defendant simply makes a guess as to a future,

unknown event.” Sergeant Oil & Gas Co. v. Nat'l. Maint. &

Repair, Inc., 861 F. Supp. 1351, 1360 (S.D. Tex. 1994).

Petitioner has failed to identify any alleged negligent

misrepresentations other than the same vague allegation used

for its fraud claim. As discussed above, that representation was

not false. The record contains no evidence that the THA and/or

T&T could not, as opposed to chose not to, invest $10 million

or could not proceed with capital improvement projects.

4. Petitioner Cannot Prove That It Was Estopped

From Any Conduct On Account Of Any Actions Of

T&T Or The THA

Promissory estoppel requires a showing of: (1) a promise;

(2) foreseeability of reliance thereon by the promisor; (3)

substantial reliance by the promisee to his detriment; and (4) a

definite finding that injustice can be avoided only by the

enforcement of the promise. Zenor v. E/ Paso Health Care Sys.,

176 F.3d 847, 864 (Sth Cir. 1999). Petitioner cannot demonstrate

reliance on any promise of Respondents to Petitioner’s

detriment. For example, Petitioner has not demonstrated that

its alleged efforts are any different from those allegedly

undertaken by it pursuant to the MOU, which did not obligate

the THA to participate in any investment opportunities that

Petitioner presented. (A71.) Further, as discussed above,

Petitioner has not suffered any damages, as it assumed the risk

that it would not be paid unless the THA earned profits from

investments it entered. (A3; AS; A7-A8.)

5. Petitioner Cannot Prove It Has Any Basis For

Recovery In Quantum Meruit Against T&T Or The

THA

To recover under quantum meruit, a claimant must prove

that:

(1) valuable services were rendered or materials

furnished; (2) for the person sought to be charged;

(3) which services and materials were accepted by the

person sought to be charged, used, and enjoyed by him;

(4) under such circumstances as reasonably notified the

person sought to be charged that the plaintiff in

performing such services was expecting to be paid by

the person sought to be charged.

Vortt Exploration Co. v. Chevron U.S.A., Inc., 787 S.W.2d 942,

944 (Tex. 1990).

Here, Petitioner, through the MOU, agreed that it would be

paid 10% of all the profits eamed by THA (AS) — a classic

contingent fee agreement. That agreement cannot be

circumvented with a quantum meruit claim. Clary v. Schmolke,

977 S.W.2d 883, 886 (Tex. App. 1998) (plaintiff in contingent

fee agreement could not recover for value of services under

quantum meruit as a matter of law). Further, Petitioner conferred

no benefit upon Respondents. Moreover, Petitioner never put

Respondents on notice that it expected to be paid for the services

it rendered. To the contrary, in an e-mail message to the THA

sent long after the THA rejected the Bower Cotton proposal,

Sorsby wrote that she could “not afford to keep giving away my

services and educating these people.” (A8) (“I have always tried

to get you what you need, lawyers, funding etc. and have not

ever charged you a dime.”) Finally, there is no evidence in the

record of any costs or expenses allegedly incurred in the course

of Petitioner’s alleged work for the THA.

CONCLUSION

Petitioner has not established any compelling reasons to

grant the Petition. For the foregoing reasons, Respondents

respectfully request that the Petition be denied.

Respectfully submitted,

Racpu T. Lepore, III

Counsel of Record

Mary MartHA Born

TARA J. MySLINSKI

HOLLAND & KniGHT LLP

10 St. James Avenue

Boston, MA 02116

(617) 523-2700

Attorneys for Respondents

APPENDIX

APPENDIX A — OPINION OF THE UNITED STATES

COURT OF APPEALS FOR THE FIFTH CIRCUIT

DATED MARCH 1, 2006

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 05-20007

CAN-AM INTERNATIONAL, LLC,

3 Plaintiff - Appellant,

THE REPUBLIC OF TRINIDAD AND TOBAGO;

THE TOBAGO HOUSE OF ASSEMBLY,

Defendants - Appellees.

Appeal from the United States District Court

for the Southern District of Texas, Houston Division

Before GARWOOD, CLEMENT, AND PRADO, Circuit

Judges.

EDWARD C. PRADO, Circuit Judge: *

Can-Am International, L.L.C. (“Can-Am”) appeals the

district court’s entry of final judgment dismissing its action

for lack of subject matter jurisdiction. The district court found

that no exception to sovereign immunity applies under the

* Pursuant to 5TH CIR. R. 47.5, the court has determined that

this opinion should not be published and is not precedent except

under the limited circumstances set forth in STH CIR. R. 47.5.4.

Appendix A

Foreign Sovereign Immunity Act (“FSIA”), 28 U.S.C. § 1602

et seq., to support jurisdiction over Appellees.

Appellant Can-Am International, L.L.C. is registered in

Texas. Laura Lee Sorsby is its founder and CEO. Appellees

are the Republic of Trinidad and Tobago and one of its

political bodies, the Tobago House Assembly.

The Republic of Trinidad and Tobago (“T&T”)

comprises two islands in the Caribbean Sea near Venezuela.

After achieving independence from Great Britain in 1962,

the T&T central government established the Tobago House

of Assembly (“THA”) to administer Tobago Island. The

THA consists of an Executive Council, which comprises

several Secretaries, including the Chief Secretary. The

responsibilities of the Office of Chief Secretary include

planning Tobago Island development projects. At all relevant

times in this case, the House Chief Administrator or Chief

Secretary was either Allan Richards or Hochoy Charles.’

In 1997, Sorsby marketed her services as a financial

consultant to T&T and the THA. After learning that the THA

needed financing for varicus development projects, Sorsby

incorporated Can-Am International, L.L.C. (“Can-Am”) in

Texas in 1998 and began submitting finance proposals to

the THA.

1. The titles of these individuals and the dates in which they

held these titles are not clear from the parties’ briefs, but (like- the

district court noted in its order) these details do not affect the court’s

disposition.

Appendix A

Can-Am asserts that it sought funding proposals for

conventional financing to be backed by a government

guarantee in early 1998. Later, in November 1998, it sought

funding proposals for conventional financing to be

collateralized by THA assets. On February 5, 1999, Sorsby

sent 1 letter to Richards outlining a financing program Sorsby

had arranged through a large United States insurance

company. In that letter she wrote:

We are willing to come back to Tobago and work

with you in order to try and put this whole thing

together. But before we come, we would

appreciate it if you could appoint our company as

your consultant/agent. This does not commit the

Government to anything. You do not have to pay

us anything if the loan does not go though [sic].

If you decide you do not wish to take the loan and

participate in the trading program, then the

appointment becomes null and void.

On February 22, 1999, the THA appointed Sorsby, CEO

of Can-Am International, L.L.C., as the financial consultant

for three of its development projects. Paragraphs 5 and 6 of

the appointment letter read:

5. This agency will be revoked in writing if Ms.

Sorsby has failed to perform.

6. This agency agreement will remain in effect

for six months, with an option of renewal, subject

to the Tobago House of Assembly’s satisfaction

with Ms. Laura-Lee [sic] Sorsby’s performance

Appendix A

and the continuance of its engagement with ongoing

financing arranged by Can-Am International L.L.C.

Charles allocated THA office space to Sorsby along with this

appointment.

On March 27, 1999, the parties formalized their

relationship by outlining their respective responsibilities in

a Memorandum of Understanding (“MOU”).? Sorsby’s

responsibilities included: introducing different financing

structures to the THA for government review and selection;

arranging the funding institution subject to THA approval;

providing contractual arrangements with program managers

of trading groups acceptable to the THA; negotiating interest

rates, if required, payable on the funds held in T&T’s account,

subject to the approval of the THA; arranging for the profits

generated by the financing program to go into a THA trust

account; working with the THA to arrange collateral, if

required, for the financing program selected by the THA;

and investigating and arranging the lowest interest rates, if

required, for the THA’s selection and approval.

The THA’s responsibilities under the MOU included:

providiss the most feasible and high priority projects for

financing; getting all the necessary government approvals to

implement the financing program selected by the THA from

those submitted by Sorsby; executing all documents

2. As noted by the district court, the MOU states that it is

between the THA and Sorsby, rather than the THA and the plaintiff

Can-Am. The district court did not decide “whether the party

designation was part of an on-going misrepresentation or merely a

drafting error.”

Appendix A

necessary to implement the selected financing program; and

arranging all necessary government collateral as required.

The MOU states in paragraph 1.1, “All matters that

require financial commitments by the THA shall be brought

to the notice of the THA for agreement before any final

commitments are made.”

The MOU’s fee clauses provide that:

THA agrees to pay the Financial Consultant a fee

equal to ten percent (10%) of all monies earned

from the private placement (or other funding

programs) out of funds provided to THA generated

by the funding program arranged by the Financial

Consultant. . . .

In the event that THA selects a form of

conventional financing from the financing

structures submitted by the Financial Consultant,

the parties shall negotiate . . . a fee agreeable to

both parties to compensate the Financial

Consultant for the services in arranging such

financing.

As to duration, the MOU states:

1.4 The agency appointment will remain in effect

from the time trading begins or as long as THA is

receiving funds through any trading programs of

financial arrangements provided by the Financial

Consultant... .

Appendix A

1.5 This agency appointment can only be revoked

in writing if the Financial Consultant fails to

perform on the terms of this MOU.

Furthermore, the MOU has a choice of law provision:

“This MOU and all amendments thereto shall be governed

and constructed in accordance with the laws of the Republic

of Trinidad and Tobago.”

The THA did not pursue the financing program outlined

in Sorsby’s February Sth letter. In early April 1999 Sorsby

arranged for the THA officials to travel to London, England,

for a series of meetings where various individuals presented

investment opportunities for the THA’s consideration.’ One

proposal came from a London firm called the Bower Cotton

Group, for which payment was guaranteed by a bank in

Switzerland. The proposal required Appellees to invest ten

million United States dollars. Three days afterwards,* Sorsby

wrote the THA’s Chief secretary:

We have wonderful and timely news for the THA.

Bower Cotton ... [has] available at the present time

US$100 million dollars of good clean funds. They

have an investor they are placing into the program.

Because of the investor’s contract with Bower

Cotton ... we are on a short time fuse [sic].

3. Although Appellees originally sought conventional financing

proposals, it considered financing through investment.

4. The letter erroneously bears the date March 12, 1999. It

should have been dated April 12, 1999.

Appendix A

After requesting a letter of intent, proof of funds, and pay

orders, Sorsby wrote, “We must have these things in order

to get your contract issued from the bank for your review

and approval.” Regarding the pay orders, she wrote,

“Remember our pay orders are generated through the trade,

so if you do not go forward with the contract, these pay orders

will be worthless.”

Thus, upon returning to Tobago, the House Chief

Secretary executed various documents related to the Bower

Cotton proposal including a letter of intent, an “Irrevocable

Pay Order” (“pay order”), and a letter of exclusivity. These

documents explicitly reference a code specifically designated

for the Bower Cotton proposal and are signed by the THA

Chief Secretary Charles. The documents are dated April 19,

1999, but were signed on April 30, 1999.

The letter of intent is addressed to Peter Newton,’ the

program manager for the potential investment, and states, “I

herewith grant you the exclusive right to provide me with

the best available investment program to facilitate the private

placement of these funds.” The letter provides that the THA

Chief Secretary is “willing and able to enter $ Ten Million

US [sic] dollars for participation into a private bank-secured

investment programme, subject to my [the Chief Secretary’s]

approval of the contract.”

The pay order provides that Sorsby, in her individual

capacity, will receive “{a] total of 10% (Ten Percent) of the

5. Appellees identify Newton as an affiliate of Nikea, N.V.

‘“Nikea”), an engineering company that Sorsby alleges would have

helped to construct the THA’s projects.

Appendix A

net disbursable profits received by [the THA] or any

Company on their behalf to facilitate the investment

transaction....” The pay order names Sorsby as the

beneficiary. It also states, “The Irrevocable Pay Order is valid

upon commencement of the start of the transaction herein....”

The pay order also includes a waiver of immunity rights,

and it submits the transaction to governance under the

International Chamber of Commerce Rules of Conciliation

and Arbitration.

The letter of exclusivity is also addressed to Newton and

states in relevant part: “I [Charles], the undersigned, herewith

grant the trade prograra manager/administrator/facilitator full

exclusive right as our sole agent for 20 banking days from

the above date [April 19, 1999], to enter these funds for me,

or the corporation into the best available bank-secured

investment program.”

Despite Sorsby’s recommendation to accept the Bower

Cotton proposal and a letter from her stating that there was a

short window of time to decide, the THA did not fund the

Rower Cotton proposal. On July 11, 1999, Sorsby wrote an

email to Rennie Dumas, a staff member at the THA, and

stated, “... I cannot afford to keep giving away my services...

[T]he letter [Charles] prepared and the payorder [sic] meant

nothing since [the THA] did not go forward.” Sorsby

continued to submit investment proposals to the THA, which

rejected them all. On March 7, 2000, Sorsby wrote a letter

addressed to Charles expressing her frustration with the THA:

“| have always tried to get you what you need, lawyers,

funding etc. [sic], and have not ever charged you a dime.”

| Thereafter, some THA officials met with some financiers

Appendix A

introduced by Sorsby, but did not enter into any agreement

with them. The THA never obtained or received any money

from any financing source introduced by Sorsby or Can-Am.

In November 200i, Can-Am filed a complaint against

T&T and the THA in the District Court for the Southern

District of Texas. It later filed an amended complaint to

include a claim for quantum meruit. T&T and the THA filed

a motion to dismiss, or alternatively, a motion for summary

judgment based primarily on the Foreign Sovereign Immunity

Act (FSIA). The district court denied the motion because it

needed discovery to decide the issue of whether the FSIA

applied to Appellees.

After discovery, in April 2004, T&T and the THA filed

a motion for summary judgment claiming the court did not

have jurisdiction over Can-Am’s claims pursuant to the FSIA.

Alternatively, they argued for summary judgment because

no genuine issue existed as to any material fact, and that

both T&T and the THA were entitled to judgment as a matter

of law for all claims.

On September 8, 2005, the district court judge dismissed

Can-Am’s claim for lack of subject matter jurisdiction. It

concluded that the FSIA precluded the court from reaching

the merits of the case, reasoning that “there is no basis to

overcome [Appellees’] presumption of immunity.” The

district court denied Can-Am’s motion for reconsideration

on November 23, 2004.

Al0

Appendix A

Ill

Can-Am appeals the district court’s entry of final

judgment dismissing its action for lack of subject matter

jurisdiction after having found no exception to sovereign

immunity applies to Appellees. Can-Am argues that

Appellees are subject to jurisdiction under two exceptions

to its sovereign immunity under the FSIA, the waiver

exception and the commercial activity exception.

The existence of subject matter jurisdiction under the

FSIA is a question of law which is reviewed de novo. Stena

Rederi AB vy. Comision de Contratos del Comite Ejecutivo

General del Sindicato Revolucionario de Trabajadores

Petroleros de la Republica Mexicana S.C., 923 F.2d 380,

386 (Sth Cir. 1991). The FSIA provides a framework for

determining whether a court within the United States may

exercise jurisdiction over a foreign state. The FSIA provides

the sole basis for obtaining jurisdiction over a foreign state

in a court in the United States. Argentine Republic v. Amerada

Hess Shipping Corp., 488 U.S. 428, 434 (1989). Under the

FSIA, a “foreign state shall be immune from the jurisdiction

of the courts of the United States and of the States” unless

one of the several statutorily defined exceptions applies.

28 U.S.C. § 1604; see Verlinden B.V. v. Cent. Bank of Nigeria,

461 U.S. 480, 488-89 (1983) (“When one of [the] specified

exceptions applies, ‘the foreign state shall be liable in the

same manner and to the same extent as a private individual

under like circumstances.””) (citing 28 U.S.C. § 1606). The

exceptions are enumerated in 28 U.S.C. § 1605.

All

Appendix A

Courts must apply the FSIA “in every action against a

foreign sovereign, since subject matter jurisdiction in any

such action depends on the existence of one of the specified

exceptions to foreign sovereign immunity.” Verlinden, 461

U.S. at 493. The party claiming FSIA immunity must

establish a prima facie case that it satisfies FSIA’s definition

of a foreign state, thereby creating a presumption of

immunity. United States v. Moats, 961 F.2d 1198, 1205 (Sth

Cir. 1992); see also Keller v. Cent. Bank of Nigeria, 277

F.3d 811, 815 (6th Cir. 2002); Export Group v. Reef Indus.,

Inc., 54 F.3d 1466, 1470 (9th Cir. 1995). Then, the burden

of production shifts to the non-movant to provide facts

showing that an exception applies. Moats, 961 F.2d at 1205.

To overcome a presumption of immunity, Can-Am must

prove that the conduct that forms the basis cf its complaint

falls within one of the statutorily defined exceptions.

Republic of Argentina v. Weltover, Inc., 504 U.S. 607, 610-

11 (1992); see 28 U.S.C. 1605 (exceptions to the

jurisdictional immunity of a foreign state). Because it is

undisputed that T&T is a foreign state and that the THA is

T&T’s instrumentality as defined in 28 U.S.C. § 1603, under

the FSIA, they enjoy a presumption of immunity.

Accordingly, the issue of subject matter jurisdiction turns

on whether Can-Am rebuts the presumption of immunity

enjoyed by T&T and the THA.

Two FSIA immunity exception provisions are at issue.

The first is section 1605(a)(1), which discusses waiver. The

second is section 1605(a)(2), which discusses commercial

activity. It is Can-Am’s burden to show that Appellees waived

their immunity, or that Appellees’ conduct that forms the basis

of Can-Am’s complaint is commercial activity as defined by

Al2

Appendix A

the FSIA. A failure to satisfy the statute’s exceptions deprives

a federal court of subject matter jurisdiction. Stena, 923 F.2d

at 386.

A. Whether T&T or the THA waived their immunity

Neither T&T nor the THA waived sovereign immunity

with respect to the conduct upon which Can-Am’s complaint

stands, because the document containing the waiver clause

was conditional, and the condition never occurred.

Subsection (a)(1) states:

(a) A foreign state shall not be immune from the

jurisdiction of the courts of the United States or

of the States in any case (1) in which the foreign

state has waived its immunity either explicitly or

by implication, notwithstanding any withdrawal

of the waiver which the foreign state may purport

to effect except in accordance with the terms of

the waiver[.]

28 U.S.C. § 1605(a)(1).

To be effective, a waiver of sovereign immunity must

be either implicit or exphow. FSIA’s “waiver exception is

narrowly construed.” Pere v. Nwovo Pignone, Inc., 150 F.3d

477, 482 (Sth Cir. 1998).®

The district court held that the waiver of immunity rights

in the Bower Cotton pay order was “ineffective” and

“condition[al].” The district court stated:

6. Here, only an explicit waiver is at issue.

Al3

Appendix A

[T]he pay order was never executed because no

[THA] funds ever transferred to the disbursement

account. In fact, the transaction ended with the

[THA]’s decision to withhold its funds. Without

the transfer of funds, there is no transaction and

therefore, no pay order. Hence, there is no waiver.

Can-Am disagrees with the district court’s reasoning. It

claims the waiver of immunity rights in the Bower Cotton

pay order is a general express waiver. The gravamen of Can-

Am’s argument is that the pay order is by its own terms “valid

upon the commencement of the start of the transaction

herein,” such that the transaction began with Charles’s

submission of the pay order, the letter of intent, and the letter

of exclusivity. Can-Am therefore claims that the THA’s

“decision” to withhold funds was a breach of its “obligation”

to fund.

In addition, Can-Am argues that the district court’s

assertion that “[n]o evidence has been proffered that the Chief

Secretary ever approved the contract to fund the Bower

Cotton proposal” is false. It refers to the letter of intent,

saying that Charles “expressly approved the transaction” by

signing it. Can-Am then makes the leap that Charles approved

the “contract” through the letter of exclusivity by “granting

the trade program manager/administrator/facilitator full

exclusive right as our sole agent for 20 banking days ... to

enter the funds ... in the best available bank-secured

investment program.” Thus, Can-Am maintains that a

contract was formed through the THA’s submission of these

documents.

Al4

Appendix A

Finally, Can-Am takes issue with the notion that the

waiver is conditional on the funding of the Bower Cotton

proposal. Can-Am states, “[t]here is no language in the

waiver provision or any other evidence before the district

court that limits or conditions in anyway the explicit waiver.”

Can-Am focuses on the word “all” in the waiver clause found

in the pay order:

This document binds all parties, their employees,

associates, transfers, assigns and/or designees.

Any facsimile of this document shall be deemed

as legal and binding on all parties hereto and shall

be so construed to any court of law regardless of

State, nation, er ,rovince waiving ai// rights of

immunity, regardless of whether diplomatic,

sovereign or otherwise, which shall give this

document full force and legal effect to true

purpose and intent of this agreement as so

construed by its signing parties.

(Emphasis added.) Thus, Can-Am argues that the waiver

clause in the pay order is explicit and unconditional.

Appellees maintain that Can-Am’s argument “is based

on a strained interpretation of language in a document

ostensibly prepared for a transaction that never occurred....”

They emphasize that without a transfer of funds in connection

with the Bower Cotton proposal, there was no transaction.

Without a transaction, there .s no applicable waiver.

We agree with the district court that “the alleged waiver

was a limited waiver.” The waiver is contained in a document

Al5

Appendix A

that references a specific investment transaction for which

there is no contract. The waiver is limited in its scope,

applying solely to the Bower Cotton proposal. The pay order

specifically references the code designating the Bower Cotton

proposal. The word “all” in the waiver clause is also

conditioned on the funding of the Bower Cotton proposal.

The payment authorized by the order is conditioned on the

investment transaction, which in turn relied on the THA’s

approval of and signature on a contract between it and the

bank. There was no investment transaction in relation to the

Bower Cotton proposal. Sorsby’s contingency fee depended

on profits generated by an investment that was never made;

the THA never signed a contract with a bank in relation to

such an investment. The waiver clause exists within a

document that specifically relates to an investment

transaction which never transpired. Thus, the waiver of “all

rights of immunity” also relates to the investment transaction

which never transpired. We find that Appellees did not waive

their sovereign immunity.

B. Whether T&T 's/the THA ’s conduct fits the commercial

activity exception

Foreign sovereigns are not immune from judicial process

in actions based upon commercial activity that has a

jurisdictional nexus with the United States, as defined

by the FSIA. Stena, 923 F.2d at 386 (citing 28 U.S.C.

§ 1605(a)(2)). Because Can-Am’s action is not based upon a

commercial activity that has a jurisdictional nexus with the

United States, Appellees remain immune.

Al6

Appendix A

In order to decide whether the commercial activity

exception applies, first, the relevant activity must be

identified. “This requires focusing on the acts of the named

defendant, not on other acts that may have had a causal

connection with the suit. In particular, we must isolate those

specific acts of the named defendant that form the basis of

the plaintiff's suit.” De Sanchez v. Banco Central de

Nicaragua, 770 F.2d 1385, 1391 (Sth Cir. 1985) (citation

omitted).

Second, the court must determine if the relevant activity

is sovereign or commercial. The statutory definition

of “commercial activity” is “either a regular course of

commercial conduct or a particular commercial transaction

or act.” 28 U.S.C. § 1603(d).’ The second sentence of

§ 1603(d) directs the courts to look at the “nature” of an

activity rather than its “purpose” in determining whether it

is commercial. Thus, the Supreme Court has defined an

activity as having a commercial nature for purposes of FSIA

immunity if it is of a type that a private person would

customarily engage in for profit. Weltover, 504 U.S. at 614;

Callejo v. Bancome, S.A., 764 F.2d 1101, 1108 n.6 (Sth Cir.

1985). A foreign government’s acts may be deemed

commercial when that foreign government is not acting “as

7. Courts have accepted that the circular definition for

“commercial activity” in § 1603(d) was a mandate by Congress

authorizing the courts to define the concept on an case-by-case basis.

See H.Rep. No. 9401487, 94th Cong., 2d Sess. at 16 (stating that

federal courts are given “a great deal of latitude in determining what

is a ‘commercial activity’” under the FSIA). The statute does give

us some guidance, however, in approaching the task of distinguishing

between sovereign and commercial activities, as discussed below.

Al7

Appendix A

a regulator of the market, but in the manner of a private player

within it.”* Weltover, 504 U.S. at 614.

Finally, if the relevant activity is commercial in nature,

the court must determine whether it had the requisite

jurisdictional nexus with the United States. A foreign state

will not be immune in a case

[a] in which the action is based upon a commercial

activity carried on in the United States by the

foreign state; or [b] upon an act performed in the

United States in connection with a commercial

activity of the foreign state elsewhere; or [c] upon

an act outside the territory of the United States in

connection with a commercial activity of the

foreign state elsewhere and that act causes a direct

effect in the United States].]

28 U.S.C. § 1605(a)(2). Any one of these connections with

the United States, if met, provides a sufficient basis for

jurisdiction. Stena, 923 F.2d at 386.

8. Courts have typically held that coritracts for the procurement

of goods and services are commercial rather than governmental in

nature. See United States v. Moats, 961 F.2d 1198, 1205 (Sth Cir.

1992) (contract for settlement agreement is commercial); Rush-

Presbyterian-St. Luke's Med. Ctr. v. Hellenic Republic, 877 F.2d 574,

581 (7th Cir. 1989) (contract for purchase of medical services is

commercial); Practical Concepts, Inc. v. Republic of Bolivia, 8\1

F.2d 1543, 1550 (D.C. Cir. 1987) (contract for developing rural areas

is commercial); Tex. Trading & Milling Corp. v. Federal Republic

of Nigeria, 647 F.2d 300, 310 (2d Cir. 1981) (contract for purchase

of cement is commercial).

Al8

Appendix A

Stena further states, “[nJot only must there be a jurisdictional

nexus between the United States and the commercial acts of

the foreign sovereign, there must be a connection between the

plaintiff's cause of action and the commercial acts of the foreign

sovereign.” Id. See also NYSA-ILA Pension Trust Fund vy.

Garuda Indonesia, 7 F.3d 35, 38 (2d Cir. 1993) (“In construing

the commercial activity exception, courts have required that a

significant nexus exist between the commercial activity in this

country upon which the exception is based and a plaintiff's cause

of action.”) (citations omitted); Moats, 961 F.2d at 1205-06;

Vencendora Oceanica Navigacion, S.A. v. Compagnie Nationale

Algerienne de Navigation, 730 F.2d 195, 200 (Sth Cir. 1984).

The phrase ““‘[based upon’ | is read most naturally to mean those

elements of a claim that, if proven, would entitle a plaintiff to

relief under his theory of the case.” Saudi Arabia v. Nelson, 507

U.S. 349, 357 (1993). The court must therefore focus only on

the conduct on which Can-Am’s action is based. /d. at 356.

Can-Am’s action is based on the appointment of Sorsby as

financial consultant for Appellees and the MOU defining

Sorsby’s and the THA’s responsibilities. It argues that the MOU

is an enforceable contract for Can-Am’s services. Thus, Can-

Am argues that T&T and the THA are subject to jurisdiction

under each of the three parts to the commercial activity

exception.

1. Commercial activity in the United States

Section 1603(e) of the FSIA states: “A ‘commercial activity

carried on in the United States by a foreign state’ means

commercial activity carried on by such state and having

substantial contact with the United States.”

Al9

Appendix A

The district court held that Can-Am failed to present any

evidence indicating that T&T or the THA carried on any

activity that had substantial contact with the United States.

It went on to state that none of the THA’s relevant activities,

including its appointment of Sorsby as its financial consultant

and its consideration of various financing and investment

proposals, occurred in the United States. However, Can-Am

disputes this conclusion, pointing to Sorsby’s acts “as CEO

of Can-Am, conducting financial consulting services for and

on behalf of [Appellees], as their agent and financial

consultant, in the United States.” Can-Am invokes agency

theory to meet the requirement that the requisite acts be those

of the named defendant.

Appellees respond that Can-Am has not alleged

anywhere that Appellees engaged in any commercial activity

in the United States. Rather, they point out that all meetings

between Can-Am and T&T or the THA occurred in either

Trinidad & Tobago or London, and that all documents were

signed in Tobago. Appellees also state that the THA “declined

to participate in [an] alleged investment opportunity that

would have required representatives to travel to New York

and deposit funds in an unnamed bank there....” Appellees

do not respond to Can-Am’s allegation that Sorsby was

T&T’s and/or the THA’s agent, likely because Can-Am did

not substantiate its theory.

In order for Can-Am’s claim under this prong to survive,

the commercial acts must be of the named Defendant.

De Sanchez, 770 F.2d at 1391 (citation omitted). Can-Am

argues that, as financial consultant, it acted as Appellees’

agent and that its actions can be imputed to T&T and the

THA.

A20

Appendix A

Can-Am cites to Weltover to support its contention. But,

as Appellees identified in their brief, Weltover does not

conclude that the acts of the plaintiff within the United States

may be attributed to the defendant to defeat sovereign

immunity. Rather, it is the acts of the foreign government

that determine if the foreign sovereign’s acts are

“commercial” within the meaning of the FSIA. Weltover, 504

U.S. at 614-16.

The burden of proving an agency relationship, which

would enable Can-Am to hold T&T and the THA liable, falls

upon Can-Am. See Walter Fuller Aircraft Sales, Inc. v.

Republic of the Philippines, 965 F.2d 1375, 1381 (Sth Cir.

1992). “Our precedent ... indicates ... we look to the

ownership and management structure of the instrumentality,

paying particularly close attention to whether the government

is involved in day-to-day operations, as well as the extent to

which the agent holds itself out to be acting on behalf of the

government.” /d. at 1382 (citing Hester Int'l Corp. v. Fed.

Rep. of Nigeria, 879 F.2d 170, 178, 181 (Sth Cir. 1989)).

The record does not support the allegation that Appellees, as

the supposed principal to Sorsby’s agent, had both the right

to assign Sorsby’s task and control the means and details of

the process by which she would accomplish it. Can-Am did

not meet its burden of proof in proving the existence of a

principal-agent relationship between it and Appellees.’

9. Can-Am also points to Texas law, citing Holloway v. Skinner,

898 S.W.2d 793 (Tex. 1995), for the proposition that the acts of an

agent on behalf of the principal are deemed to be the principal's

acts. Even if we chose to rely on Texas law, Can-Am’s argument

would fail since it does not cite any facts to show it was controlled

(Cont'd)

A21

Appendix A

Since Can-Am does not identify acts carried on in the

United States having substantial contact with the United

States by the named Appellees, we lack jurisdiction over

Appellees under this prong of the commercial activity

exception.

2. Acts performed in the United States in connection with

commercial activity elsewhere

Acts of a foreign sovereign in the United States in

connection with foreign commercial activity may give rise

to subject matter jurisdiction. Stena, 923 F.2d at 388. In Stena,

the court held that the connection between the commercial

activity and the plaintiff's complaint had to be material. /d.

“Any material connection between ‘commercial activity

elsewhere’ and the plaintiff's complaints ... is irrelevant to

the determination of subject matter jurisdiction.” Jd. at 388.

The material connection must be between the act performed

in the United States and the plaintiff's cause of action. Pere,

150 F.3d at 482.

The district court disposed of Can-Am’s argument with

regard to this prong in one sentence, which stated that “this

prong does not apply because the facts do not identify a

commercial act performed in the United States.”

(Cont'd)

by T&T and the THA. See Walker Ins. Servs. v. Bottle Rock Power

Corp., 108 S.W.3d 538, 549 (App. Ct. Tex. 2003) (stating that the

defining feature of the agency relationship is the principal’s right to

control the actions of the agent).

A22

Appendix A

Can-Am argues we have jurisdiction because Sorsby

traveled throughout the United States to meet and negotiate

with potential investors, and that Sorsby was Appellees’

agent, whose acts are imputed to Appellees. Appellees

respond that since the proposed transaction with a third party

never occurred, Can-Am cannot satisfy this prong of the

commercial activity exception requiring that an act be

performed in the United States. '°

Can-Am asserts that its financial consulting services are

the “commercial act[s] performed in the United States.” In

the instant: case, the material connection must exist between

Can-Am’s financial consulting services and Appellees’

alleged breach of contract, fraud, or negligent

misrepresentation. First, there is a question as to whether

Sorsby’s acts in the United States qualify as “commercial

activities.” There are no cases to support the notion that

investigating potential investment options constitute

commercial activity under the FSIA. Second, Can-Am’s

allegation that it acted as an agent of Appellees is not

substantiated. Third, it is illogical that plaintiff's own acts

create the required material connection underlying its cause

of action, because, after all, Can-Am maintains that it met

its end of the bargain. Can-Am does not assert that Appellees

performed any other commercial activities within the United

States that give rise to its cause of action.

Another possible basis for Can-Am’s claim is its

contingent fee based on the breach of an alleged contract

10. Appellee’s brief also correctly notes, “In fact, Can-Am fails

to allege in its Amended Complaint that either T&T [or the] THA

has conducted any commercial activity anywhere.”

A23

Appendix A

entered into in Tobago. However, Can-Am’s services were

to be rendered in Tobago, and payment of Can-Am’s

contingent fee was to be paid, not from the United States,

but from profits (if any) of the alleged investment program

held in a Swiss bank. Therefore, we have no jurisdiction

under this prong of the commercial activity exception.

3. Commercial activity outside the United States that has

a direct effect in the United States

Finally, Can-Am argues that “the [Appellees’] breach

caused a direct effect on the United States” because Sorsby,

an American citizen and CEO of an American company,

expected to be compensated for her work in the United States.

The only direct effect claimed by Can-Am is the financial

loss to Sorsby from Appellees’ alleged breach.

The Supreme Court addressed the “direct effect”

exception in Weltover, 504 U.S. 607 (1992). In Weltover, the

plaintiffs held certain Argentine bonds. These bonds required

Argentina to make payment of principal and interest to

bondholders in U.S. dollars. Payment could be made through

transfer on the London, Frankfurt, Zurich, or New York

market, at the election of the creditor. When the bonds began

to mature, Argentina unilaterally extended the time for

payment and offered bondholders substitute instruments. The

plaintiffs, two Panamanian corporations and a Swiss bank,

refused to accept the rescheduling and insisted on full

payment, specifying New York as the place where payment

should be made. The plaintiffs then brought suit in the U.S.

District Court alleging that Argentina’s failure to pay the

bonds according to the original terms was a breach of

~A24

Appendix A

contract. Jurisdiction was alleged under section 1605(a)(2)

of the FSIA. The plaintiffs argued that Argentina’s refusal to

make payment caused a “direct effect” in the U.S. because

payment that was supposed to have been made in New York

was not made. The Supreme Court agreed. The Supreme

Court stated that “an effect is ‘direct’ if it follows ‘as an

immediate consequence of defendant’s ... activity.”” Weltover,

504 U.S. at 618 (citation omitted). After noting that the

plaintiffs had designated their accounts in New York as the

place of payment, the Court concluded, “Because New York

was thus the place of performance for Argentina’s ultimate

contractual obligations, the rescheduling of those obligations

necessarily had a ‘direct effect’ in the United States: Money

that was supposed to have been delivered to a New York

bank for deposit was not forthcoming.” /d. at 619."

We agree with the district court that Can-Am’s losses in

pursuit of an acceptable investment opportunity for the

Appellees are not enough to meet this prong of the

commercial activity exception. Even if Can-Am did provide

evidence of its financial losses, this prong still would not be

met. It is undisputed that neither T&T nor the THA ever

transferred money in connection with any alleged investment

opportunity identified by Can-Am; hence, the type of activity

11. Other examples of direct effect include when a defendant

agrees to pay funds to an account in the United States and then fails

to do so, Voest-Alpine Trading USA Corp. v. Bank of China, 142

F.3d 887, 896 (Sth Cir. 1998), and where a defendant’s default on a

letter of credit for which plaintiff had designated payment to its bank

account in New York, Hanil Bank v. PT. Bank of Negara Indonesia,

148 F.3d 127, 132 (2d Cir. 1998).

A25

Appendix A

found to be commercial in Weltover and other cases is absent

here. Can-Am’s alleged financial loss in the United States in

and of itself is not enough to meet this prong of the

commercial activity exception.

Neither the waiver exception nor the commercial activity

exception to the FSIA apply to Appellees. While the THA

did include a waiver clause in the pay order, the pay order

was conditioned on a transaction that never occurred, and

the waiver itself never went into effect. Further, Appellees

did not perform any commercial activities in the United

States, nor did they perform any commercial activities in the

United States with a material connection to the conduct that

forms the basis of Can-Am’s complaint. Finally, Appellees

did not perform any commercial activities outside the United

States that had a direct effect in the United States. Because

no exception under the FSIA applies, Appellees are entitled

to sovereign immunity. We AFFIRM.

A26

APPENDIX B — MEMORANDUM AND ORDER OF

THE UNITED STATES DISTRICT COURT FOR THE

SOUTHERN DISTRICT OF TEXAS

ON MOTION FOR SUMMARY JUDGMENT

ENTERED SEPTEMBER 8, 2004

IN THE UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF TEXAS

HOUSTON DIVISION

C.A. NO. H-01-3897

CAN-AM INTERNATIONAL, L.L.C.,

Plaintiff,

THE REPUBLIC OF TRINIDAD AND TOBAGO

and the TOBAGO HOUSE OF ASSEMBLY,

Defendant.

MEMORANDUM AND ORDER

(Entered September 8, 2004)

I. INTRODUCTION

This is a contract action wherein the plaintiff asserts state

law causes of action for breach of contract, fraud, negligent

misrepresentation, and promissory estoppel against a foreign

state. The plaintiff, Can-Am International, L.L.C., is an

American company registered in the state of Texas. Laura

Lee Sorsby is its founder and CEO. The defendants are the

Republic of Trinidad and Tobago and its political subdivision,

A27

Appendix B

the Tobago House Assembly. Pursuant to Rule 56 of the Federal

Rules of Civil Procedure, the defendants have submitted motions

for summary judgment. Having considered each party’s

submissions, the Court is of the opinion that subject matter

jurisdiction does not exist.' Accordingly, the Court concludes

that this case should be DISMISSED.

Il. HISTORY

The Republic of Trinidad and Tobago (“Republic”) is

comprised of two islands in the Caribbean Sea near Venezuela.

After achieving independence from Great Britain in 1962, the

Republic central government established the Tobago House of

Assembly (“House”) to administer Tobago Island. It is

undisputed that the Republic is a foreign state and that the House

is a Republic instrumentality. Responsibility for the House

Office of Chief Secretary includes planning Tobago Island

development projects. At all relevant times, the House Chief

Administrator or Chief Secretary was either Allan Richards

(“Richards”) or Hochoy Charles (“Charles’’).?

1. While the pleadings and the plaintiff’s response to the

defendants’ motion to dismiss for lack of subject matter jurisdiction

initially indicated proper ‘urisdiction, the Court could not perceive

an actual lack of subject matter jurisdiction until the parties

conducted further discovery.

2. The position’s actual title or who held it at what particular

time does not affect the case’s disposition. The Court notes, however,

that the dates and titles from the parties’ submissions do not coincide.

See, Defs.’ Mem. Mot. Summ. J. Doc. 86, p. 3 (Charles referred to

as House Chief Sec’v in Jan. 1998); p. 4 (Richards as Chief Admin.

in Nov. 1998); PI.’s Mem. Mot. Summ. J. Doc. 99, p.4 (Richards as

Chief Admin. in Mar. 1998); p. 5 (Richards as Chief Sec’y in Nov.

1998); and p. 6 (Charles as Chief Sec’y in Feb. 1999).

Pe cS

A28

Appendix B

In 1998, Laura Lee Sorsby (“Sorsby”) initiated contact

with the House Office of Chief Secretary and offered her

services as a financial consultant. She learned that the House

needed financing for various development projects. Shortly

thereafter, Sorsby incorporated Can-Am International, L.L.C.

(“Can-Am”) and began submitting finance proposals to the

House. None of the proposals were accepted. In early 1999,

however, Chief Secretary Charles allocated House office

space to Sorsby and formally appointed her to be the House’s

financial consultant. On March 27, 1999, the parties executed

a Memorandum of Understanding in Tobago.’ The

Memorandum recites that the House is considering three

projects for financing and that Sorsby is the House’s

“Financial Consultant” with authority to oversee the

financing process. In relevant part, the Memorandum fee

clauses provide that the:

House agrees to pay the Financial Consultant a

fee equal to ten percent (10%) of all monies earned

from the private placement (or other funding

programs) out of funds provided to the House

generated by the funding program arranged by the

Financial Consultant... .

In the event that the House selects a form of

conventional financing from the financing

3. The MOU states that it is between the House and Sorsby

rather than the plaintiff, Can-Am. The Court has not decided whether

the party designation was part of an on-going misrepresentation or

merely a drafting error.

A29

Appendix B

structures submitted by the Financial Consultant,

the parties shal] negotiate ... a fee agreeable to

both parties to compensate the Financial

Consultant for the services in arranging such

financing.

Regarding duration, the Memorandum provides that “[t]his

Memorandum shall remain in effect as long as the House is

receiving funds through any trading programs or financial

arrangements provided by the Financial Consultant.” Finally,

the Memorandum has a choice of law provision that selects

Republic law as the basis for governance and construction.

In April 1999, Sorsby arranged for House officials to

travel to London, England for a series of meetings where

various individuals presented investment opportunities for

the House’s consideration. One proposal came from a London

firm called the Bower Cotton Group. Upon returning to

Tobago, the House Chief Secretary received and executed

various documents related to the Bower Cotton proposal

including a letter of intent and an Irrevocable Pay Order (“pay

order”).* The letter of intent provides that the House Chief

Secretary is “willing and able to enter Ten Million US dollars

for participation into a private bank-secured investment

programme, subject to my [the Chief Secretary’s] approval

of the contract.” The pay order provides that Sorsby, in her

individual capacity, will receive “[a] total of 10% (Ten

Percent) of the net disbursable profits received by [the House]

4. The plaintiff submitted a “letter of intent” at Doc. 100, tab

7. That letter of intent, however, is not the same as the letter that the

plaintiff submitted with Doc. 14 in reference to the Bowers Cotton

proposal and the defendant’s alleged immunity waiver.

A30

Appendix B

or any Company on their behalf to facilitate the investment

transaction. ...” The pay order also includes a waiver of

immunity rights, and it submits the transaction to governance

under the International Chamber of Commerce Rules of

Conciliation and Arbitration.

Despite Sorsby’s recommendation to accept the Bowers

Cotton proposal and a letter from her stating that there was a

short window of time to decide, the House declined to fund

the Bowers Cotton proposal. Undeterred, Sorsby continued

to submit investment proposals, and the House rejected them

all. On March 7, 2000, Sorsby revealed her frustration with

the House’s resistance in a letter to the Chief Secretary. In

addition to stating that she was “upset,” she remarked “I have

always tried to get you what you need, lawyers, funding, etc.,

and have not ever charged you a dime.” In response, the

House agreed to consider several more proposals but refused

them as well.

In November 2001, Sorsby instituted this action on Can-

Am’s behalf. Can-Am contends that the Memorandum was

a contract and that the House breached it by not funding any

of the investment proposals. In addition to denying the

existence of any enforceable contract, the Republic and the

House contend that their undisputed status as a foreign state

precludes subject matter jurisdiction without exception. In

response, the plaintiff avers that the letter of intent, executed

in concert with the Bowers Cotton proposal, waives immunity

and that, in the alternative, the “commercial activity”

exception applies.

A31

Appendix B

Ill. SUBJECT MATTER JURISDICTION

The law requires the Court to maintain subject matter

jurisdiction at all times. Ceres Gulf v. Cooper, 957 F.2d 1199,

1207 (Sth Cir. 1992). Any party or the court can raise issues

of subject matter jurisdiction at any time. Fep. R. Civ. P.

12(h)(3). With regard to foreign states, maintaining subject

matter jurisdiction is particularly important because, unlike

other litigants, foreign states are immune from jurisdiction

in United States courts. See 28 U.S.C. § 1604. Immunity is

not merely the right to avoid liability; it also includes the

freedom to remain exempt from the burdens of the judicial

process. See Kelly v. Syria Shell Petroleum Dev. B.V, 213

F.3d 841, 849 (Sth Cir. 2000). In observance of comity, the

United States grants foreign states a presumption of

immunity. See Conn. Bank of Commerce v. Republic of

Congo, 309 F.3d 240 (Sth Cir. 2002). The presumption of

immunity, however, may be rebutted in accordance with the

Foreign Sovereign Immunities Act of 1976, 28 U.S.C. § 1602

et seq. (“FSIA”). The FSIA applies to foreign states and their

political subdivisions. /d. at § 1604. Can-Am does not dispute

that the Republic is a foreign state and that the House is its

political subdivision. Accordingly, the issue of subject matter

jurisdiction turns on whether the FSIA rebuts the presumption

of immunity enjoyed by the Republic and the House. Based

on the facts before the Court, only two FSIA immunity

exception provisions apply to this case. The first is section

1605(a)(1) (“waiver”). It applies to a foreign state that “has

waived its immunity either explicitly or by implication,

notwithstanding any withdrawal of the waiver which the

foreign state may purport to effect, except in accordance with

the terms of the waiver[.]” /d. at § 1605(a)(1). The second is

A32

Appendix B

section 1605(a)(2) (“commercial activity”). A discussion on

the commercial activity exception is below.

Citing the FSIA’s waiver provision, Can-Am contends

that no immunity exists because the House executed a pay

order agreement that contained a waiver clause. After a

thorough review, the Court finds that the alleged waiver is

ineffective. The evidence before the Court clearly

demonstrates that the House executed the alleged waiver in

concert with the Bowers Cotton Group transaction. The

documents for that transaction each use the reference code:

“House/9904-001.” The alleged waiver is a clause within the

unique pay order document for the transaction. In addition

to identifying the specific transaction to which the pay order

applies, the pay order explicitly states that “[u]pon execution

of this agreement, this Irrevocable Payment Order will be

executed, following settlement and clearance of funds into

the Disbursement Account for the first and subsequent

tranches.”* Accordingly, the pay order was never executed

because no House funds ever transferred to the disbursement

account. In fact, the transaction ended with the House’s

decision to withhold its funds. Without the transfer of funds,

there is no transaction and, therefore, no pay order. Hence,

there is no waiver.

In fact, the alleged waiver was a limited waiver. The

waiver applied only in the context of the Bowers Cotton

transaction. The Court observes that the waiver is conditional.

5. Tranche: “A bond issue derived from a pooling of similar

debt obligations.” Black’s Law Dictionary 1503 (7th ed. 1999). The

Bowers Cotton proposal was an attempt to pool a potential House

investment with other investments to purchase an initial tranche.

A33

Appendix B

Its validity is conditioned on the funding of the Bowers

Cotton proposal. That did not occur. Recall that the proposal’s

letter of intent explicitly states that the House’s participation

is ultimately subject to the Chief Secretary’s approval of the

contract. No evidence has been proffered that the Chief

Secretary ever approved the contract to fund the Bowers

Cotton proposal. In fact, the Chief Secretary’s decision to

withhold funding demonstrates the opposite. Hence, the

Court finds that the Republic and the House have not waived

their immunity under the FSIA section 1605(a)(1).

Turning to the FSIA section 1605(a)(2), the Court has

reviewed the parties’ submissions and finds that the

commercial activity exception does not apply to the Republic

or the House. The commercial activity exception has three

prongs. The first creates an exception if a foreign state carries

on a commercial activity in the United States. 28 U.S.C.

§ 1605(a)(2). Section 1603(e) defines commercial activity.

It provides that “[a] commercial activity carried on in the

United States by a foreign state means commercial activity

carried on by such state and having substantial contact with

the United States.” 28 U.S.C. § 1603(e).

Can-Am has failed to present any document indicating

that the Republic carried on any activity having substantial

contact with the United States. The House’s relevant activities

included appointing Sorsby as its financial consultant and,

thereafter, considering various investment proposals.

However, none of these activities occurred in the United

States. The House appointed Sorsby in Tobago and provided

an office for her in Tobago. The House also negotiated and

executed the Memorandum in Tobago. No facts in the record

A34

Appendix B

indicate that the House considered any proposals in the

United States. The record does, however, reflect that Sorsby

arranged for proposals to be considered in England.

Moreover, the record reflects that the House declined an

opportunity to consider a proposal in New York. In sum, it is

clear that no commercial activity occurred in the United

States.

The second commercial activity prong creates an

immunity exception if the action is based “upon an act

performed in the United States in connection with the

commercial activity of a foreign state elsewhere[.]” Jd. Again,

this prong does not apply because the facts do not identify a

commercial act performed in the United States.

Finally, the third commercial activity prong precludes

immunity when an action is based “upon an act outside the

territory of the United States in connection with a commercial

activity of the foreign state elsewhere and that act causes a

direct effect in the United States[.]” /d. The plaintiff alleges

that the Republic and the House breached a contract to allow

Sorsby to act as the House’s financial consultant. Even if the

Court allows that the Memorandum was a bona fide contract,

it explicitly limits Sorsby’s compensation to ten percent of

monies earned from funding programs. The evidence fails

to demonstrate that any monies were earned. In fact, Can-

Am’s contract claims arise from the House’s decision not to

fund the investment proposals that she presented.

Considering that the House was never bound to accept any

proposal, the fact that Sorsby did not make money on her

investment is not a legitimate basis for a breach of contract

claim. In any event, the House’s unfettered decision to decline

A35

Appendix B

investment opportunities that could have enured to the

plaintiff's benefit in this Country is certainly not a basis to

assert that the Republic and the House caused a direct effect

in the United States.

IV. CONCLUSION

In light of the discussion above, the Court finds that there

is no basis to overcome the Republic and House’s

presumption of immunity. Accordingly, the Court lacks

subject matter jurisdiction and this case must be

DISMISSED.

It is so ORDERED.

Signed this 8th day of September, 2004.

s/ Kenneth M. Hoyt

KENNETH M. HOYT

United States District Judge

A36

APPENDIX C — ORDER OF THE UNITED STATES

COURT OF APPEALS FOR THE FIFTH CIRCUIT

ON PETITION FOR REHEARING

DATED MARCH 30, 2006

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 05-20007

CAN-AM INTERNATIONAL, LLC,

Plaintiff-Appellant,

THE REPUBLIC OF TRINIDAD AND TOBAGO;

THE TOBAGO HOUSE OF ASSEMBLY,

Defendants-Appellees.

Appeal from the United States District Court

for the Southern District of Texas, Houston Division

ON PETITION FOR REHEARING

Before GARWOOD, CLEMENT, and PRADO, Circuit

Judges.

PER CURIAM:

IT IS ORDERED that the petition for rehearing is

DENIED.

A37

Appendix C

ENTERED FOR THE COURT:

s/ Edward C. Prado

United States Circuit Judge

A38

APPENDIX D — ORDER OF UNITED STATES

DISTRICT COURT ON MOTION FOR

RECONSIDERATION OF SUMMARY JUDGMENT

ENTERED NOVEMBER 23, 2004

IN THE UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF TEXAS

HOUSTON DIVISION

C.A. NO. H-01-3897

CAN-AM INTERNATIONAL, L.L.C.,

Plaintiff,

, 2

THE REPUBLIC OF TRINIDAD AND TOBAGO

and the TOBAGO HOUSE OF ASSEMBLY,

Defendant.

ORDER

Before the Court is the plaintiffs motion for

reconsideration of summary judgment (#119) and the

defendant’s response (#128), and the Court having reviewed

same is of the opinion that the motion should be denied.

It is so Ordered.

A39

Appendix D

SIGNED and ENTERED 11/23/2004

s/ Kenneth M. Hoyt

Kenneth M. Hoyt

United States District Judge

A40

APPENDIX E — 28 U.S.C. §§ 1602, 1603,

1604, 1605(a)(1) and (2), AND 1606

UNITED STATES CODE

TITLE 28. JUDICIARY AND

JUDICIAL PROCEDURE

§ 1602. Findings and declaration of purpose

The Congress finds that the determination by United States

courts of the claims of foreign states to immunity from the

jurisdiction of such courts would serve the interests of justice

and would protect the rights of both foreign states and

litigants in United States courts. Under international law,

states are not immune from the jurisdiction of foreign courts

insofar as their commercial activities are concerned, and their

commercial property may be levied upon for the satisfaction

of judgments rendered against them in connection with their

commercial activities. Claims of foreign states to immunity

should henceforth be decided by courts of the United States

and of the States in conformity with the principles set forth

in this chapter.

§ 1603. Definitions

For purposes of this chapter—

(a) A “foreign state”, except as used in section 1608 of

this title, includes a political subdivision of a foreign

state or an agency or instrumentality of a foreign state

as defined in subsection (b).

A41

Appendix E

(b) An “agency or instrumentality of a foreign state”

means any entity—

(1) which is a separate legal person, corporate or

otherwise, and

(2) which is an organ of a foreign state or political

subdivision thereof, or a majority of whose shares or

other ownership interest is owned by a foreign state

or political subdivision thereof, and

(3) which is neither a citizen of a State of the United

States as defined in section 1332(c) and (e) of this

title, nor created under the laws of any third country.

continental or insular, subject to the jurisdiction of the

United States.

(d) A “commercial activity” means either a regular

course of commercial conduct or a particular commercial

transaction or act. The commercial character of an

activity shall be determined by reference to the nature

of the course of conduct or particular transaction or act,

rather than by reference to its purpose.

(e) A “commercial activity carried on in the Uni‘ed

States by a foreign state” means commercial activity

carried on by such state and having substantial contact

with the United States.

A42

Appendix E

§ 1604. Immunity of a foreign state from jurisdiction

Subject to existing international agreements to which the

United States is a party at the time of enactment of this Act a

foreign state shall be immune from the jurisdiction of the

courts of the United States and of the States except as_

provided in sections 1605 to 1607 of this chapter. —

§ 1605. General exceptions to the jurisdictional

immunity of a foreign state

(a) A foreign state shall not be immune from the

jurisdiction of courts of the United States or of the States

-In any case—

(1) in which the foreign state has waived its immunity

either explicitly or by implication, notwithstanding any

withdrawal of the waiver which the foreign state may

purport to effect except in accordance with the terms

of the waiver;

(2) in which the action is based upon a commercial

activity carried on in the United States by the foreign

state; or upon an act performed in the United States in

connection with a commercial activity of the foreign

state elsewhere; or upon an act outside the territory of

the United States in connection with a commercial

activity of the foreign state elsewhere and that act

causes a direct effect in the United States;

A43

Appendix E

§ 1606. Extent of liability

As to any claim for relief with respect to which a foreign

State is not entitled to immunity under section 1605 or 1607

of this chapter, the foreign state shall be liable in the same

manner and to the same extent as a private individual under

like circumstances; but a foreign state except for an agency

Or instrumentality thereof shall not be liable for punitive

damages; if, however, in any case wherein death was caused,

the law of the place where the action or omission occurred

provides, or has been construed to provide, for damages only

punitive in nature, the foreign state shall be liable for actual

or compensatory damages measured by the pecuniary injuries

resulting from such death which were incurred by the persons

for whose benefit the action was brought.

A44

APPENDIX F — APPELLANT?’S PANEL PETITION

FOR REHEARING

No. 05-20007

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

CAN-AM INTERNATIONAL, L.L.C.,

Plaintiff-Appellant,

THE REPUBLIC OF TRINIDAD AND TOBAGO

and the TOBAGO HOUSE OF ASSEMBLY,

Defendants-Appellees.

On Appeal from the United States District Court

for the Southern District of Texas

APPELLANT’S PANEL PETITION FOR REHEARING

Alice Oliver-Parrott (20210800)

Attorney-in-Charge

Maria Teresa Arguindegui (01301765)

David H. Burrow (03468000)

1301 McKinney, Suite 3500

Houston, Texas 77010-3092

Telephone: (713) 222-6333

Telecopier: (713) 650-6333

Attorneys for Appellant-Plaintiff,

CAN-AM INTERNATIONAL, L.L.C.

A45

Appendix F

No. 05-20007

CAN-AM INTERNATIONAL, L.L.C.,

Plaintiff-Appellant,

THE REPUBLIC OF TRINIDAD AND TOBAGO

and the TOBAGO HOUSE OF ASSEMBLY,

Defendants-Appellees.

Appellant’s Panel Petition For Rehearing

TO THE JUSTICES OF THE FIFTH CIRCUIT COURT

OF APPEALS:

Plaintiff-Appellant, Can-Am International, L.L.C.,

respectfully files this Appellant’s Panel Petition for Rehearing

in support of its appeal of the district court’s dismissal of this

action based on jurisdictional immunity under the Foreign

Sovereign Immunities Act (the “FSIA”). For clarity, plaintiff-

appellant will be referred to as “Ms. Sorsby” or “Can-Am.”

Defendants-Appellees will be referred to as “T&T and THA”

or collectively as “the Government.”

INTRODUCTION

The Pane! Opinion’s reasoning in this case is fundamentally

flawed. First, even disregarding the undisputed fact that T&T

and THA expressly waived immunity under the FSIA, the facts

are undisputed with regard to the application of the commercial

A46

Appendix F

activity exception to the FSIA. The Panel Opinion concludes

that Can-Am did not prove the existence of a principal-agent

relationship between it and the Government. Not only is this

conclusion directly contrary to the written agency agreements

between the parties, but the undisputed fact that Ms. Sorsby

acted on behalf of the Government in the United States pursuant

to these agency agreements. The existence of a formal, written

agency relationship between the parties here makes this case

different from the Walter Fuller case cited in the Panel Opinion. '

The Panel Opinion is wrong when it concludes that Can Am

did not substantiate its allegation that it acted as an agent for

the Government.

Second, the Panel Opinion’s conclusion that investigating

potential investment options is not commercial activity is

contrary to Supreme Court authority defining the term

“commercial” under the FSIA. In Weltover, the Court held

“commercial activity” means when a government’s conduct is

consistent with a “private player” in a market. See Republic of

Argentina v. Weltover, Inc., 504 U.S. 607, 614, 112 S.Ct. 2160,

119 L.Ed.2d 394 (1992). The investigation of potential

investment options in the open market is not conduct that is

sovereign or governmental in nature, but clearly commercial

activity.’

1. The partics entered into an initial agency agreement and later

entered into the Memorandum of Understanding, further clarifying

the agency relationship between the parties. (R. 2279, 2277, 2276,

2275, 2267; Tab 7; R. 22327 [sic].)

2. The investigation of potential investment options is so clearly

commercial and not governmental that even the counsel for T&T

and THA had to agree at oral argument that the conduct in question

here is commercial activity.

A47

Appendix F

Third, the Panel Opinion concludes that it is “illogical

that plaintiff's own acts create the required material

connection underlying its cause of action.” (Op. at 24.) Can

Am’s underlying causes of action are not based on Ms.

Sorsby’s acts in soliciting and investigating investment

options on behalf of the Government but on the Government’s

breach of contract and failure to proceed with any funding

proposals solicited on its behalf. The Panel Opinion’s

conclusion that the acts of Ms. Sorsby in the United States

on behalf of the Government cannot be considered the

commercial activity of the Government is contrary to and in

direct conflict with fundamental principles of agency law.

Finally, the Panel Opinion’s conclusion that the express

waiver provision in this case was somehow conditional is

contrary to the clear and unambiguous language of the waiver

provision in question. Under the Panel Opinion’s

interpretation of an express waiver provision, any time a

sovereign wrongfully breaches a contract with a United States

citizen that contains a provision expressly waiving sovereign

immunity, that sovereign will nevertheless be granted

immunity because the contract containing the waiver was

breached and not completed.

A48

Appendix F

ARGUMENT

A. The Panel Opinion ignores important, dispositive

facts.

The Panel Opinion ignores important undisputed and

dispositive facts. Specifically, the Panel Opinion’s holding

in so far as the commercial activity exception is concerned

is based on the false premise that the parties in this case did

not have an agency relationship. It is undisputed that the

parties entered into an initial written agency agreement. After

Ms. Sorsby had arranged for several initial financing

proposals and traveled to Tobago, and at the request of

Hochoy Charles, the parties then over the course of two

months negotiated the MOU. (R. 2372 at 46.) The MOU

formalized details of the agency agreement. The Panel

Opinion ignores the undisputed fact that Charles had the

authority to and did create an agency relationship with Ms.

Sorsby on behalf of the Government. (R. 2279, 2277, 2276,

2275, 2267; Tab 7; R. 2327). Ms. Sorsby worked at the

request of the Government in 1997 and 1998 before the

parties entered into the MOU. At the Government’s request,

Ms. Sorsby obtained several proposals for investment

programs that would allow the country to invest money and

create financing through the investment. If Ms. Sorsby failed

to perform under the MiJU, then the Government could

revoke the agreement in writing. (R. 2318.) The agreement

was never revoked.

The Pane! Opinion also misstates the circumstances

leading to the Government’s breach in not going forward with

the Bower Cotton Proposal. There is no dispute that Hochoy

A49

Appendix F

Charles possessed the authority to bind the Government when

he authorized the letter of intent, the proof of fund and the

pay orders necessary to proceed with the funding proposal.

(R. 2335, 2334, 2330, 2328.) After these documents were

executed, Hochoy Charles issued the “Letter of Exclusivity,”

signed April 30, 1999, which granted the “trade program

manager/administrator/facilitator full exclusive right as our

sole agent for 20 banking days. . . to enter funds . . . into the

best available bank-secured investment program.” (Tab 10,

R. 2331). Ms. Sorsby was required to and did obtain $100

million in funding to place in an appropriate investment

program.’ (Tab 13; R. 2357.) THA breached and reneged

without explanation and continued to request financing

proposals under its agency agreement with Ms. Sorsby. Ms.

Sorsby complied with the Government’s requests and

provided alternative forms of financing throughout 1999.4

The Panel Opinion states that the Government rc,ected

the various funding proposals submitted by Ms. Sorsby. There

is no evidence that the Government formally rejected any of

the proposals submitted by Ms. Sorsby. In so far as the Bower

3. The Panel Opinion implies that the payorders were

“worthless” because the trade did not go forward. However, the

payorders were effective upon the execution of the Letter of

Exclusivity. The Letter of Exclusivity was executed, making the

payorders effective. But for the Government’s breach, the trade would

have gone forward because Ms. Sorsby had already obtained the

$100 million dollar [sic] commitment to fund the trade and the

Government failed to fund its matching $10 million.

4. (Tab 12; R. 2370; 2301-2297, 2295-2263; 2266-2267, 2265,

2253-2254, 2294-2304, 2370, 2304-2303, 2301-2300, 2299-2297,

2295, 1869, 2252, 1902, 1900, 2259.)

A50

Appendix F

Cotton proposal, the only evidence in the record concerning

the reasons for the Government’s breach were news reports,

stating the money was not invested because of a political

dispute between THA officials and the Prime Minister of

Trinidad & Tobago. (R. 2227.) As late as January 24, 2000,

Ms. Sorsby was still soliciting and presenting funding

proposals to the THA. (R. 2153-2150 at 215-17, 220-25).

THA continued to do business with Ms. Sorsby and at no

time did the THA, or any other government representatives,

ever cancel Ms. Sorsby’s agency appointment and revoke

the MOU. (R. 2150 at 219) (R. 2299).

B. The commercial activity exception applies.

Even disregarding T&T and THA’s express waiver of

immunity under the FSIA, the undisputed facts demonstrate

that the commercial activity exception applies in this case.

Contrary to the Panel’s ruling, Ms. Sorsby’s, as CEO of Can-

Am, conducting financial consulting services at the written

request of T&T and THA, and as their agent and financial

consultant, in the United States means the Government

carried on commercial activity having a substantial contact

with and in the United States.

The Panel opinion relies on factors defined in Walter

Fuller Aircraft Sales, Inc. v. Republic of the Philippines to

determine whether an agency relationship existed between

Can-Am and T&T and THA, but ignores the distinguishing

and dispositive fact that in this case there was a formal agency

agreement between the parties. The Walter Fuller case did

not involve an express agency agreement between the

Philippine government and the PGCC. 965 F.2d 1375 (Sth

ASI

Appendix F

Cir. 1992). Here, there is a written agency agreement between

the parties. (R. 2318.) Hochoy Charles, with the proper

authority as Chief Secretary of the THA, formally appointed

Ms. Sorsby, CEO of Can-Am, as the Government agent and

the financial consultant. (R. 2318.) As “financial consultant,”

Ms. Sorsby was granted “the authority and responsibility to

oversee the financing process, on behalf of the Assembly.”

Id. The Panel Opinion’s conclusion that Can-Am did not

substantiate that it acted as the agent of Government simply

ignores the undisputed record in this case.

Moreover, the Panel Opinion erroneously concludes that

it is illogical that Ms. Sorsby’s conduct in United States

qualifies as the commercial activity of the T&T and THA on

whose behalf and at whose request Ms. Sorsby acted in the

United States. The Panel concludes “there are no cases to

support the notion that investigating potential investment

options constitutes commercial activity under the FSIA.” (Op.

at 24.) The FSIA defines commercial activity as “either a

regular course of commercial conduct or a particular

commercial transaction or act.” 28 U.S.C. § 1603(d) (1988).

The commercial character of an act must be determined by

reference to the nature of the act and not its purpose. /d.

Taken together, these two provisions mean that “when a

foreign government acts, not as a regulator of a market, but

in the manner of a private player within it, the foreign

sovereign’s actions are commercial within the meaning of

the FSIA.” See Republic of Argentina v. Weltover, Inc., 504

U.S. 607, 614, 112 S.Ct. 2160, 119 L.Ed.2d 394 (1992)

(holding sovereign’s issuance of debt constituted commercial

activity). To determine whether the foreign state acted in the

manner of a private player in the market, the court must look

A52

Appendix F

to the type of actions in which the foreign state engaged. Jd.

If the actions are the type that private persons are able to

legally engage, then the actions are commercial under the

FSIA. See Rush- -Presbyterian- St. Lukes Medical Cent. v.

Hellenic Republic, 877 F.2d 574, 578 (7th Cir.), cert. denied,

493 U.S. 937, 110 S.Ct. 333, 107 L.Ed.2d 322 (1989).

In Weltover, the United States Supreme Court held that

a sovereign’s issuance of debt instruments was commercial

activity under the FSIA. The Court reasoned as follows:

The commercial character of the Bonds is

confirmed by the fact that they are in almost all

respects garden-variety debt instruments: They

may be held by private parties; they are negotiable

and may be traded on the international market

(except in Argentina); and they promise a future

stream of cash income.

504 U.S. 607, 616, 112 S.Ct. 2160, 2167. It is difficult to

understand how a sovereign’s investigation of potential

investment options would be any less commercial in nature

than a sovereign’s issuance of bonds as part of a plan to

stabilize its currency, as was the case in Weltover.

Taking Can-Am’s allegations as true, as this Court must,

there is no question that the Government was acting a “private

player” in directing its agent and financial consultant to seek

in the United States investment opportunities from United

States companies. It is undisputed that Ms. Sorsby engaged

in many activities in the United States at the behest of the _

A53

Appendix F

Government that qualify as commercial activity.’ For

example, in 1999, Ms. Sorsby went to the United States at

the request of the Government and negotiated with numerous

people on the Government’s behalf. The negotiations resulted

in: (1) Ms. Sorsby submitted a funding program proposal

from Gee & Jenson, an American company, headquartered

in West Palm Beach, Florida (R. 2304, 2303, 2301, 2240);

(2) Ms. Sorsby and Rennie Dumas, the THA’s Business

Analyst, continued their work in the United States and Tobago

on funding program proposals (R, 2304, 2303, 2301, 2240);

(3) Allan Richards wrote to Ms. Sorsby in the United States

to set up meetings in Tobago (R. 2301-2297, 2295); (4) Can-

Am was also pursuing potential funding programs in the

United States through proposals made by Raymond James

and Frankwell Investments, two additional American

companies (R. 2370 at 418) (R. 2304-2294); and (5) the T&T

Port Authority also contacted Can-Am regarding funding

programs to finance port upgrades, and the Minister of Energy

and Energy Industries regarding the Raymond James

proposal. (R. 1869).

In 2002, at the request of the government: (1) Ms. Sorsby

and government representatives continued working together

in the United States and Tobago on funding programs by

Raymond James and Frankwell Investments (R. 2304-2294):

(2) Ms. Sorsby continued her efforts in the United States to

secure funding proposals for the ferry project (R. 2252); (3)

Allan Richards issued a formal invitation to the United States

for scheduled meetings in Tobago for Raymond James and

Frankwell Investments (R. 2297, 2295); and (4) the Chairman

5. The parties’ agency agreement, the MOU, was negotiated in

the United States.

AS4

Appendix F

of Petrotrin, the government owned oil company, wrote to

Ms. Sorsby in the United States requesting a funding program

proposal by Raymond James. (R. 1902, 1935).

In this case, there can be no question that Can-Am’s

conducting financial consulting services in the United States

as the actual and apparent agent for a foreign government

should qualify as a commercial act performed by a foreign

state in the United States. The Panel Opinion’s holding to

the contrary is simply contrary to well-settled principles of

agency law. See Holloway v. Skinner, 898 S.W.2d 793, 795

(Tex. 1995) (holding the acts of an agent on behalf of its

principal are deemed to be the principal’s acts).° On this

record, both the first and second prongs of the commercial

activity exception under the FSIA are satisfied.

In so far as the third prong of the commercial activity

exception, there is no question that the Government’s breach

caused a direct effect on the United States. Ms. Sorsby is an

American citizen and CEO of an American company who

was to be compensated for her work in the United States.

See Id. The Panel Opinion’s narrow focus on the Bower

Cotton transaction ignores the significant evidence of all the

other financing opportunities Can-Am sought out, evaluated

and proposed to the government pursuant to the both the [sic]

MOU and agency appointments. At the urging of the

Government, Ms. Sorsby, as CEO of Can-Am, and the duly

appointed agent and financial consultant for the Government,

dedicated three years performing the work requested of her

6. The Panel’s suggestion that Can-Am did not cite any fact to

show it was controlled by T&T and THA ignores the written agency

agreement between the parties in this case.

AS5

Appendix F

by Government officials. (R. 1840-2095, 2373-2099.) Can-

Am’s claims against T&T and THA are for quantum meruit

as well as breach of contract.

T&Ts and THA’s wrongful conduct should not be

rewarded by ignoring the explicit waiver or disregarding the

true nature of the Government’s commercial activities in the

United States. The direct effect of T&T’s and THA’s wrongful

conduct was on United States citizens and a United States

company engaged by the government to solicit sources in

the United States for commercial financing originating in

the United States, and to create profits to fund critical

infrastructure projects in the foreign country. The third prong

of the commercial activity exception is, therefore, also

satisfied.

C. The waiver provision in this case is not conditional.

The Panel’s Opinion misapprehends the evidence in the

record relating to the express waiver of immunity found in

the irrevocable pay order. Contrary to the Panel Opinion, the

plain language of the written transaction documents

demonstrates that the express waiver of immunity in this case

was “effective” and not “conditional.” The THA, acting for

and on behalf of T&T, agreed that it was “waiving all rights

of immunity regardless of whether diplome*ic, sovereign, or

otherwise ...” (emphasis added) (Tab 8; R. 2329, 2330).

There is absolutely nothing in this lar ge or the rest of the

transaction documents in question that. ,gests this express

waiver was conditional. /d. The Panel Opinion is clearly

erroneous and allows a sovereign to benefit from its breach

by granting immunity inspite [sic] of an express waiver of

immunity.

AS6

Appendix F

As the documents clearly demonstrate, the Chief

Secretary actually approved the contract in the Bower Cotton

proposal under penalty of perjury. (Tab 10, R. 2331.) The

failure to fund was not a “decision” made by the Chief

Secretary and there is no language suggesting that the waiver

was conditional on the government not breaching the

agreement. (Tab 8; R. 2329, 2330.) The Panel’s reasoning

ignores the Government’s clear and express waiver and

allows any foreign state in breach of an agreement with an

explicit waiver of immunity clause to use its own wrongful

breach as a defense to waiver. That is clearly not the purpose

of immunity under the FSIA. T&T and THA should not

receive their reward of jurisdictional immunity because they

chose to breach a written agreement. The Panel Opinion must

be corrected.

A57

Appendix F

Prayer

The record in this case calls for a jury trial, rather than

the dismissal ordered by the district court. For the reason

stated in its appellate briefing and in this motion for panel

rehearing, Can-Am respectfully requests that the Panel grant

this motion, withdraw its opinion, reverse the judgment of

the district court, remand this case for a trial on the merits,

and grant Can-Am all other relief to which it may be entitled.

Respectfully submitted,

s/ Alice Oliver-Parrott

Alice Oliver-Parrott (20210800)

Attorney-in-Charge

Maria Teresa Arguindegui (01301765)

David H. Burrow (03468000)

1301 McKinney, Suite 3500

Houston, Texas 77010-3092

Telephone: (713) 222-6333

Telecopier: (713) 650-6333

Attorneys for Appellant-Plaintiff,

CAN-AM INTERNATIONAL, L.L.C.

AS5S8

APPENDIX G — APPELLANT’S APPEAL BRIEF

(PARTS OF PAGES 40-42)

No. 05-20007

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

CAN-AM INTERNATIONAL, L.L.C.,

Plaintiff-Appellant,

Vv.

THE REPUBLIC OF TRINIDAD AND TOBAGO and

the TOBAGO HOUSE OF ASSEMBLY,

Defendants-Appellees.

On Appeal from the United States District Court

for the Southern District of Texas

APPELLANTS’ BRIEF

Alice Oliver-Parrott (20210800)

Attorney-in-Charge

Maria Teresa Arguindegui (01301765)

David H. Burrow (03468000)

1301 McKinney, Suite 3500

Houston, Texas 77010-3092

Telephone: (713) 222-6333

Telecopier: (713) 650-6333

Attorneys for Appellant-Plaintiff,

CAN-AM INTERNATIONAL, L.L.C.

AS9

Appendix G

* * *

d. The plaintiff performed

According to the defendants, Can-Am did not perform

under any contract since it could not have nerformed. The

defendants focused on a funding proyosal that was

undisputedly not reviewed, submitted or approved by Can-

Am.’ The defendants concede, as they must, that Can-Am did

7. Under the funding mechanism recommended by Can-Am,

the trading program involved required the investment of $100 million

for entry with 10% of that to be pledged by the THA. (R. 2371 at

4911). Ms. Sorsby had secured a funding program with philanthropic

interests with $100 million to invest if the THA invested $10 million.

(Tab 13). The combined funds, $110 million, would be placed in an

investment program to be managed by Mr. Peter Newton. The

programs would leave $10 million at all times in an account that

would be in the control of the THA only. Moreover, it was agreed

that a bank guarantee, for a period of a year, would be purchased

from a top 25 bank guaranteeing the $10 million invested by THA.

Originally, THA was not supposed to be able to remove its funds for

12 months. However, the THA represented that it would need its

funds sooner. Accordingly, Mr. Newton accommodated the THA

and agreed that it would be able to remove its funds after only 3

months. A contract of $110 million was to be placed on the FOREX

market. The profits from the trading of the entire $110-million fund

would be placed into an account. For 12 months, any and all profits

would be reinvested into the program and allowed to compound.

After 12 months, 30% of the profits generated would be disbursed

to the THA to fund the projects, 30% would be [sic] go to the

investors that pledged the $1

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