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GDG Acquisitions LLC v. Government of Belize

United States Court of Appeals, Eleventh Circuit

February 28, 2017

GDG ACQUISITIONS LLC, Plaintiff - Appellee,
v.
GOVERNMENT OF BELIZE, Defendant-Appellant.

         Appeal from the United States District Court for the Southern District of Florida D.C. Docket No. 1:12-cv-20558-WJZ

          Before MARCUS, ANDERSON, and GINSBURG, [*] Circuit Judges.

          MARCUS, Circuit Judge.

         This is the second time a contract dispute arising out of the lease of telecommunications equipment by the plaintiff GDG Acquisitions, LLC ("GDG"), to the defendant Government of Belize ("Government"), has reached our Court. In Round One, the district court dismissed GDG's complaint on the grounds of forum non conveniens and international comity; we vacated and remanded for the district court to consider the enforceability of the contract's forum-selection clause and its significance to the forum non conveniens analysis. Now, in Round Two, the Government appeals the district court's subsequent denial of its motion to dismiss.

         After thorough review, we conclude that the Government waived its sovereign immunity. The Government of Belize claims that the express waiver of sovereign immunity contained in the contract was ineffectual because its Minister of Budget Management, who negotiated and signed the contract on its behalf, lacked the authority to waive sovereign immunity. But despite the Minister's claimed lack of authority to bind Belize, the Government ratified Fonseca's actions by fully performing its contract obligations during the lease term and paying approximately $13.5 million in forty separate payments over a period of nearly six years and spanning two different administrations. This conduct can be explained only on the understanding that the Government intended to be bound to the contract. Accordingly, we affirm the district court's denial of the Government's motion to dismiss.

         I.

         A.

         On February 10, 2012, GDG sued the Government of Belize in the United States District Court for the Southern District of Florida, seeking some $10 million in unpaid rent, with the amount growing each month. The complaint and the declarations submitted to the district court alleged these basic facts. As Minister of Budget Management, Investment, and Home Affairs, [1] one of Ralph Fonseca's tasks was to maximize the Government's return on its expenditures of tax revenue funds. To do so, Fonseca entered into complex negotiations with a Belizean company, International Telecommunications, Ltd. ("Intelco"), in order to reduce the Government's expenditures for telecommunications equipment and services. Intelco was owned and operated by Glenn D. Godfrey, a former Attorney General of Belize. Fonseca and Godfrey met several times in Miami to negotiate a lease of telecommunications equipment from Intelco to the Government. They ultimately closed a deal in Miami on December 18, 2002. The deal was governed by a Master Lease Agreement (MLA), which was negotiated in Miami and signed in Washington, D.C., by Godfrey on behalf of Intelco and by Fonseca purportedly on behalf of the Government of Belize.

         All rents due under the MLA were evidenced by promissory notes delivered by the Government to Intelco; the financing was supported by the International Bank of Miami. The same day they signed the MLA, the parties signed a first lease schedule and promissory note for $6, 748, 189.20, to be paid in twenty quarterly payments of $337, 409.46 each. That five-year lease was scheduled to end on December 18, 2007, with the final payment being due on that date. On August 27, 2003, the parties agreed to a second lease of additional telecommunications equipment pursuant to a second lease schedule and promissory note, also in the amount of $6, 748, 189.20, again to be paid in twenty quarterly payments of $337, 409.46 each. The second five-year lease was scheduled to end on August 27, 2008; the final payment was due on that date. After entering into the agreement, Intelco assigned the payments to the International Bank of Miami in exchange for a single upfront cash payment from the bank of $10 million for the two leases.

         Three provisions in the MLA are essential to the resolution of this appeal. First, the Master Lease Agreement contained a provision stating that the Government waived its sovereign immunity:

Lessee acknowledges that the activities contemplated by this Master Lease and each Lease Schedule are commercial in nature rather than governmental or public, and therefore acknowledges and agrees that it is not entitled to any right of immunity or defense on the grounds of sovereignty or otherwise with respect to any such action or proceeding arising out of or relating to this Master Lease or any Lease Schedule. Lessee hereby expressly and irrevocably waives any such right of immunity or defense which now or hereafter may exist or claim thereto which may now or hereafter exist in respect of the Master Lease or any Lease Schedule and its obligations arising thereunder, and agrees not to assert any such right or claim in any such action or proceeding, whether in the United States of America or elsewhere. Lessee hereby expressly and irrevocably waives any defense or claim it may have to delay, hinder or stop the enforcement of this Master Lease or any Lease Schedule based directly or indirectly upon the Act of State Doctrine. Neither Lessee nor any of its property enjoys any right of immunity from suit, setoff, judgment, execution on a judgment or attachment prior to judgment or in aid of execution in respect of its obligations under this Master Lease or any Lease Schedule.

         Second, the MLA included a forum-selection clause:

Lessee hereby waives any special rights or immunities which it may enjoy under the laws of Belize, and agrees and abides that its rights and obligations under this Master Lease or any Lease Schedule shall be determined exclusively in accordance with the governing laws of the State of Florida, irrespective of conflict of laws principles. Lessee irrevocably submits to the exclusive jurisdiction of any of the federal and state courts in the State of Florida in any action or proceeding arising out of or relating to the Master Lease or any Lease Schedule, and Lessee hereby irrevocably agrees that all claims in respect of such action or proceeding may be heard and determined in any court of competent jurisdiction in the State of Florida.

         Finally, the MLA contained a waiver of objections to venue or to claims of an inconvenient forum:

Lessee hereby irrevocably waives any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to the Master Lease or any Lease Schedule and hereby further irrevocably waives any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum. Lessee specifically acknowledges that Miami-Dade County, Florida is a proper venue for the Lessor to bring suit against Lessee pursuant to the Master Lease or any Lease Schedule.

         Another provision in the MLA governed the termination or expiration of the leases. Early termination of the leases required 120 days' written notice of the Government's intent to return the equipment. The failure to give notice triggered an automatic extension of the applicable lease schedule on a month-to-month basis for a period not to exceed twelve months. At the end of the term, the Government was required to return the equipment to Intelco; if it did not do so, it was obliged to continue making payments in an amount equal to the average monthly rent during the lease term.

         The Government of Belize made forty (quarterly) rental payments for the terms of the two leases, totaling nearly $13.5 million. The complaint alleged that Belize never evinced any intent to return the equipment during either the lease terms or the automatic renewal terms, but it continued to possess and use the equipment after the termination of the lease periods. The Government has not made any additional lease payments since 2008.

         B.

         On January 26, 2012, Godfrey created GDG Acquisitions, LLC, as a Florida limited liability company; its principal place of business was in Houston, Texas. Shortly thereafter, Intelco assigned all of its assets to GDG, including its interest in the Belize agreements. Soon after GDG's complaint had been filed, the Government moved to dismiss, offering three reasons: the lack of subject matter jurisdiction because of foreign sovereign immunity; forum non conveniens; and international comity. On March 28, 2013, the district court granted the Government's motion citing forum non conveniens and international comity; it did not address the defense of foreign sovereign immunity.

         On April 22, 2014, a panel of this Court vacated the dismissal and remanded the case. GDG Acquisitions, LLC v. Gov't of Belize, 749 F.3d 1024 (11th Cir. 2014). We vacated the forum non conveniens determination in light of the Supreme Court's decision in Atl. Marine Constr. Co., Inc. v. U.S. Dist. Court for the W. Dist. of Tex., 134 S.Ct. 568 (2013), which instructed the district court to give "controlling weight" to a valid forum-selection clause when conducting a forum non conveniens analysis "in all but the most exceptional cases." Id. at 581 (quotation omitted). Because "[a] binding forum-selection clause requires the court to find that the forum non conveniens private factors entirely favor the selected forum, " GDG Acquisitions, 749 F.3d at 1029, the panel remanded the case to the district court with instructions to "determine the enforceability of the forum-selection clause and its significance to the forum non conveniens analysis." Id. at 1034. The panel also vacated the district court's dismissal because of international comity, concluding that retrospective international comity did not apply without a judgment from a foreign court and that this case did not fall within the narrow sphere of prospective international comity. Id.

         On remand, after supplemental briefing and argument, the district court denied the Government's motion to dismiss. The court determined that it first had to decide whether the forum-selection clause was binding and enforceable. This in turn required answering whether Fonseca had the authority to waive the Government's sovereign immunity. As the district court framed the question: "If Minister Fonseca possessed the requisite authority to bind the Government of Belize, then both the sovereign immunity waiver and the forum selection clause are likely valid and enforceable. If he did not possess said authority, then they are not."

         To answer that question, the trial court turned to this Court's precedent in Aquamar S.A. v. Del Monte Fresh Produce N.A., Inc., 179 F.3d 1279 (11th Cir. 1999), which had held that courts should start with the assumption "that an ambassador possesses the authority to appear before them and waive sovereign immunity absent compelling evidence making it 'obvious' that he or she does not." Id. at 1299. Over the Government's objection, the district court applied this presumption to Minister Fonseca and, relying on declarations filed by both parties, concluded that "the Government of Belize ha[d] not met its burden and shown by a preponderance of the evidence that the FSIA's waiver exception [did] not apply." No extraordinary circumstances were found and no compelling evidence existed in the record suggesting that Fonseca lacked the authority to waive the Government's sovereign immunity. Thus, the district court held that the waiver exception was satisfied and that Belize could be sued in a United States court. Turning to the forum-selection clause, the district court concluded that the clause was enforceable because Fonseca had ...


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