Sharpe et al v. Sierra Leone Ministry of Surveys, Lands and Environment et al

Filing 30

REPORT AND RECOMMENDATION that this action be dismissed against Sierra Leone Ministry of Surveys, Lands and Environment on the ground that sovereign immunity bars this Court from hearing Plaintiffs' claims against that Defendant. In addition, b ecause Plaintiffs have provided proof of waiver of service as to Miles Investments, the Court will not recommend dismissal of that Defendant for failure to effect proper service of process. Objections to R&R due by 9/28/2015. Signed by Magistrate Judge Terence P. Kemp on 9/10/2015. (agm)(This document has been sent by regular mail to the party(ies) listed in the NEF that did not receive electronic notification.)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF OHIO
EASTERN DIVISION
James Johannes Sharpe, et al., :
Plaintiffs,

Case No. 2:13-cv-00187

:

v.

:

JUDGE MICHAEL H. WATSON

Sierra Leone Ministry of
:
Surveys, Lands and Environment,
et. al.,
:
Defendants.

Magistrate Judge Kemp

:

REPORT AND RECOMMENDATION
By Order dated September 22, 2014, this matter was referred
to the undersigned for an initial review and Report and
Recommendation.

(Doc. 22).

More specifically, the Order

directed the undersigned to “analyze preliminary issues raised by
this case, perhaps such as whether the Court has jurisdiction
over this case, whether any abstention doctrine warrants
declining jurisdiction in this case, whether defendants were
properly served, whether Miles Investments (S.L.) Ltd. is a
proper defendant, or any other issues ... pertinent in this case
at this posture.”

Id. at 2.

On January 20, 2015, this Court

issued a Report and Recommendation and Order, pursuant to which
plaintiffs were ordered to: (1) file a brief, within twenty-one
days from the issuance of the Report and Recommendation and
Order, explaining how, based on the relevant law, the commercial
activity exception to the Foreign Sovereign Immunity Act (“FSIA”)
applies to the particular facts of this case; (2) show cause,
within fourteen days of the issuance of the Report and
Recommendation and Order, as to why this action should not be
dismissed against Miles Investments (S.L.) Ltd. (“Miles
Investments”) based upon plaintiffs’ failure to effect proper
service on that defendant in accordance with Rule 4(m); and (3)

show cause, within fourteen days from the issuance of the Report
and Recommendation and Order, as to why this action should not be
dismissed against Mr. Mohammed and the Estate of Jamil S.
Mohamed.

The Court noted that plaintiffs’ filing pertaining to

Mr. Mohammed and the Estate of Jamil S. Mohamed should be
accompanied, if appropriate, by a request to enter default
pursuant to Fed. R. Civ. P. 55, and a separate motion for default
judgment.

While the Court anticipated problems with plaintiffs’

ability to enforce such a judgment against Mr. Mohamed and the
Estate of Jamil S. Mohamed based on issues of personal
jurisdiction, those issues were not before it for consideration.
On January 30, 2015, plaintiffs filed a response to this
Court’s recommendation stating that the Court “did not err” in
its findings.

(Doc. 24 at 1).

Plaintiffs requested, however,

that the District Judge adjust the damages total referred to in
the Report and Recommendation.

Thus, plaintiffs requested that

District Judge “adjust the damages total, and adopt the Report
and Recommendation....”

Id. at 3.

Also on January 30, 2015,

plaintiffs filed a brief “explaining how, based on the relevant
law, the commercial activity exception to the [FSIA] applies to
the facts of this case.”

(Doc. 25).

On February 3, 2015,

plaintiffs filed a response to the show cause Order, explaining
“why the case against Miles Investments Ltd. should not be
dismissed for failure to effect proper service of process.”
(Doc. 26).

On the same day, plaintiffs filed a motion for

default judgment against Miles Investments, Bassem Mohamed and
the Estate of Jamil S. Mohamed, and the Sierra Leone Ministry of
Lands, Surveys and Environment.

(Doc. 27).

On September 4, 2015, the District Judge issued an Order
observing that, instead of filing any objections to this Court’s
findings, plaintiffs merely “note[d] an adjusted damage total and
their plan to respond....”

(Doc. 29 at 1).
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Because the deadline

for filing objections to the Report and Recommendation had passed
and no such objections had been filed, the District Judge adopted
the Report and Recommendation.

As to plaintiffs’ motion for

default judgment, the District Judge noted that plaintiffs moved
for default judgment prior to obtaining an entry of default as
required Fed. R. Civ. P. 55(a).

Consequently, the District Judge

determined that a default judgment under 55(b) could not be
entered at this juncture, and he denied the motion for default
judgment without prejudice.
Consistent with the September 22, 2014 referral Order, this
Report and Recommendation addresses plaintiffs’ brief explaining
how the commercial activity exception to the FSIA applies to the
particular facts of this case.

It also addresses plaintiffs’

response to this Court’s Order to show cause as to why the case
against Miles Investments should not be dismissed for failure to
effect proper service of process.

After considering plaintiffs’

supplemental briefs as to those issues, this Court will recommend
dismissal of this action against Sierra Leone Ministry of
Surveys, Lands and Environment on the ground that sovereign
immunity bars this Court from hearing plaintiffs’ claims against
that defendant.

In addition, because plaintiffs have provided

proof of waiver of service as to Miles Investments, the Court
will not recommend dismissal for failure to effect proper service
of process on that defendant.
I. Background
Although the Court has done so previously, for ease of
reference, the Court will provide a brief summary of the facts
relevant to this case.

This case involves a dispute over real

estate located in Sierra Leone.

In the amended complaint,

plaintiffs James Johannes Sharpe and Ubadire Nathaniel Nwoko,
both United States citizens, allege that they are owners of
defendant Miles Investments, a Sierra Leone corporation.
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Plaintiffs allege that Miles Investments leased a parcel of
beach-front property identified as No. 18 Beach Road Tokeh
Village, Sierra Leone from defendant the Sierra Leone Ministry of
Surveys, Lands and Environment for purposes of establishing an
industrial ice factory in the western area of Sierra Leone.

The

lease was for a 21-year period, with an option to renew for an
additional 21-year period.

Plaintiffs claim that, on July 1,

2008, Miles Investments started producing and distributing ice
bars at the ice factory.
Plaintiffs further allege that defendant Bassem Mohamed,
administrator and beneficiary of the estate of Jamil S. Mohamed,
also a defendant in this action, subsequently brought an action
in Sierra Leone High Court (Case No. CC 281/08), challenging
Sierra Leone Ministry of Surveys, Lands and Environment’s title
of ownership in the property.

Plaintiffs assert that, on October

22, 2008, “the Sierra Leone High Court, in Case No. CC281/08
issued an interlocutory injunction that restrains Miles
Investments, including Directors and Shareholders from doing
anything on the land leased from the Sierra Leone Government.”
(Doc. 6 at 7).

Plaintiffs also allege that, on June 20, 2011,

the Sierra Leone High Court granted possession of the property to
Bassem Mohamed.

According to plaintiffs, between 2008 and 2011

and contrary to their requests, Sierra Leone Ministry of Surveys,
Lands and Environment “took no action to defend its title of
ownership to the land” which it leased to Miles Investments.

Id.

Based on the foregoing, plaintiffs brought this lawsuit seeking
to recover the funds invested in the ice project in Sierra Leone.
II. Discussion
The Court first considers plaintiffs’ brief explaining how
the commercial activity exception to the FSIA applies to the
particular facts of this case.

As this Court explained in its

January 20, 2015 Report and Recommendation and Order, unless the
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“direct effect” requirement of the commercial activity exception
to the FSIA applies, sovereign immunity bars this Court from
hearing plaintiffs’ claims against the Sierra Leone Ministry of
Surveys, Lands and Environment.

As this Court explained, the

question is whether, under 28 U.S.C. §1605(a)(2), this case is
based upon an act outside the United States in connection with
the Sierra Leone Ministry of Surveys, Lands and Environment’s
commercial activity elsewhere which caused a direct effect in the
United States.

“[A]n effect is ‘direct’ if it follows as an

immediate consequence of the defendant’s activity.”

See Republic

of Argentina v. Weltover, Inc., 504 U.S. 607, 614, 112 S. Ct.
2160, 119 L. Ed.2d 394 (1992) (internal quotations omitted).
In its Report and Recommendation and Order, this Court
ordered plaintiffs to file a brief explaining how, based on the
relevant law, the commercial activity exception applies to the
particular facts of this case.

Plaintiffs filed a timely brief

in which they argue that the actions of the Sierra Leone Ministry
of Surveys, Lands and Environment caused them to suffer financial
harm in the United States.

More specifically, they assert that

the financial harm caused by the actions of the Sierra Leone
Ministry of Surveys, Lands and Environment resulted in Miles
Investments’ inability to make timely payment on a loan in the
United States, led to Mr. Sharpe’s divorce, and led to the loss
of an “investment-backed expectation of 21 years dividend....”
(Doc. 25 at 11).
As this Court explained in its Report and Recommendation and
Order, financial injury in the United States alone is not a
legally sufficient effect to satisfy the “direct effect”
requirement of the commercial activity exception.

See Antares

Aircraft, L.P. v. Federal Republic of Nigeria, 999 F.2d 33, 36
(2nd Cir. 1993)(“the fact that an American individual or firm
suffers some financial loss from a foreign tort cannot, standing
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alone, suffice to trigger the exception”); see also Odhiambo v.
Republic of Kenya, 764 F.3d 31, 38 (D.C. Cir. 2014)(“direct
effect cases involving breaches or contract have turned on
whether the contract in question established the United States as
a place of performance”).

Here, all of the legally significant

acts took place in Sierra Leone.

More specifically, plaintiffs

allege that the Sierra Leone Ministry of Lands, Surveys and
Environment breached a contract which pertained to leasing
property in Sierra Leone and failed to take action in Sierra
Leone to defend its ownership interest in that property.

The

only alleged direct effect in the United States arises from
plaintiffs’ monetary losses.

Thus, plaintiffs have failed to

identify an act by the Sierra Leone Ministry of Lands, Surveys
and Environment which caused a direct effect in the United
States.

Consequently, the “direct effect” requirement of the

commercial activity exception does not apply.

Because sovereign

immunity bars this Court from hearing plaintiffs’ claims against
the Sierra Leone Ministry of Surveys, Lands and Environment, the
Court will recommend dismissal of the case against that
defendant.
The Court now turns to plaintiffs’ response to this Court’s
Order to show cause as to why the case against Miles Investments
should not be dismissed for failure to effect proper service of
process.

Plaintiffs filed a response to this Court’s Order on

February 3, 2015 which attaches a waiver of the service of
summons executed by Ubadire Nathaniel Nwoko on behalf of Miles
Investments.

Because proof of the waiver has been filed with

this Court, this Court will not recommend dismissal of Miles
Investments for failure to effect proper service of process.
III. Conclusion
Based upon the foregoing, this Court will recommend
dismissal of this action against Sierra Leone Ministry of
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Surveys, Lands and Environment on the ground that sovereign
immunity bars this Court from hearing plaintiffs’ claims against
that defendant.

In addition, because plaintiffs have provided

proof of waiver of service as to Miles Investments, the Court
will not recommend dismissal of that defendant for failure to
effect proper service of process.
IV. Procedure on Objections
If any party objects to this Report and Recommendation, that
party may, within fourteen days of the date of this Report, file
and serve on all parties written objections to those specific
proposed findings or recommendations to which objection is made,
together with supporting authority for the objection(s).

A judge

of this Court shall make a de novo determination of those
portions of the report or specified proposed findings or
recommendations to which objection is made.

Upon proper

objections, a judge of this Court may accept, reject, or modify,
in whole or in part, the findings or recommendations made herein,
may receive further evidence or may recommit this matter to the
magistrate judge with instructions.

28 U.S.C. §636(b)(1).

The parties are specifically advised that failure to object
to the Report and Recommendation will result in a waiver of the
right to have the district judge review the Report and
Recommendation de novo, and also operates as a waiver of the
right to appeal the decision of the District Court adopting the
Report and Recommendation.

See Thomas v. Arn, 474 U.S. 140

(1985); United States v. Walters, 638 F.2d 947 (6th Cir. 1981).
/s/Terence P. Kemp
United States Magistrate Judge

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