Dr. Mitchell seeking immunity from prosecution
Grenada Prime Minister, Dr. Keith Mitchell is relying on the doctrine of immunity to dismiss a fraudulent lawsuit brought against him in New York by a Boston businessman.
Charles Howland has sued Dr. Mitchell along with his wife and convicted international fraudster, Eric Resteiner in connection with monies taken away from the businessman in a mail and wire fraud scheme.
Resteiner, a former diplomat under Mitchell's ruling New National Party (NNP) government in St. George's is serving a 7-year jail sentence for the scheme in which the american businessman and several others lost millions of dollars.
Howland is seeking to recover monies which the fraudster handed over to the Grenadian Prime Minister.
October 3 is the date set by a judge in New York for the start of hearings in the lawsuit filed against Prime Minister Mitchell.
Last week, this newspaper carried Part 1 of a motion to dismiss the case that was put forward to the Brooklyn court by defence lawyers for the Grenadian leader.
Following is Part 11 of the arguments as submitted to the court by the defense team of Paul, Weis, Rifkind, Wharton & Garrison LLP:
Defendant Marietta Mitchell
Likewise, the Head-of-State immunity that bars actions against the Prime Minister extends to his wife.
Extension of the immunity to Mrs Mitchell is particularly appropriate here, given that she is sued simply for being the Prime Minister's wife, and "benefiting" from his actions.
Accordingly, this action must be dismissed against both Prime Minister and Mrs Mitchell on the grounds that they are absolutely immune from suit in the U.S. Courts.
THIS ACTION MUST BE DISMISSED FOR FAILURE TO SATISFY THE REQUIREMENTS OF PERSONAL JURISDICTION UNDER C.P.L. R 302 (a) (4)
Even were the Court to conclude that Prime Minister and Mrs. Mitchell are not immune from suit, this lawsuit against them must be dismissed for lack of personal jurisdiction pursuant to Fed. R. Civ 12 (b) (2)
It is plaintiff's burden to allege non-conclusory facts sufficient to establish a prima facie case for personal jurisdiction. This, plaintiff fails to do.
Where, as here, diversity of citizenship is the basis for subject-matter jurisdiction, personal jurisdiction must be premised on the law of the State in which this Court sits, which, in this instance is New York.
Here, plaintiff pleads personal jurisdiction over Prime Minister and Mrs. Mitchell pursuant to 302 (a) (4) of New York's long arm statute.
(10) Section 302 (a) (4) provides:
As to a cause of action arising from any of the acts enumerated in this section, a court may exercise personal jurisdiction over any non-domiciliary, or his executor or administrator, who in person or through an agent:
(4) owns, uses or possesses any real property situated within the state.
Plaintiff fails to allege facts sufficient to establish a prima facie case for personal jurisdiction pursuant to 302 (a)(4).
The only cause of action set for the in the Complaint is for "fraudulent transfer", which plaintiff alleges occurred in St. Moritz, Switzerland, when Eric Resteiner allegedly gave cash to Prime Minister Mitchell.
Although plaintiff alleges that Prime Minister and Mrs. Mitchell own real property in Brooklyn, New York, plaintiff does not and cannot allege that Resteiner alleged transfers to Prime Minister Mitchell "arose out of" the Mitchells' property ownership in New York.
For this simple reason, the Complaint fails to set forth a legally sufficient set of facts for long-arm jurisdiction under 302 (a) (4).
Accordingly, this action should be dismissed for lack of personal jurisdiction over Prime Minister and Mrs. Mitchell.
In order adequately to allege personal jurisdiction, plaintiff must allege non conclusory facts sufficient to establish a prima facie case not only for personal jurisdiction under New York law, but also for personal jurisdiction under the U.S. Constitution.
However, here, because plaintiff has not established personal jurisdiction over Prime Minister Mitchell and his wife pursuant to New York law, the Court need not even consider the argument as to whether plaintiff has shown that jurisdiction comports with constitutional due process.
THIS ACTION MUST BE DISMISSED FOR FAILURE TO SATISFY THE REQUIREMENTS OF DIVERSITY JURISDICTION
Next, in the event the Court somehow concludes that Prime Minister and Mrs. Mitchell are not immune from suit and that they are subject to this Court's personal jurisdiction, this action must still be dismissed pursuant to Fed. R. Civ P. 12(b) (1) for lack of subject-matter jurisdiction.
It is axiomatic that federal courts are courts of limited subject-matter jurisdiction.
Plaintiff's basis for asserting subject-matter jurisdiction is diversity of citizenship, pursuant to 28 U.S.C. 1332. A necessary prerequisite for diversity jurisdiction is that the parties to the litigation be completely diverse in their citizenship. (Collecting cases).
That is, the civil action must be:
Between.
(1) citizens of different States;
(2) citizens of a State and citizens or subjects of a foreign state;
(3) citizens of different States, in which citizens or subjects of a foreign state are additional parties, and
(4) a foreign state, defined in section 1603 (a) of this title, as plaintiff and citizens of a State or of different States.
U.S.C 1332 (a) (2007). It is well settled that, for purposes of assessing diversity jurisdiction, U.S citizens who are domiciled abroad are deemed to be neither citizens of any state of the United States nor citizens or subjects of any foreign state.
Thus, a suit brought by or against a U.S. Citizen who is domiciled abroad destroys diversity jurisdiction.
Here, plaintiff Howland repeatedly alleges that defendant Marietta Mitchell is a citizen of the United States. However, Howland does not and cannot allege that Mrs. Mitchell is also domiciled in the United States.
Indeed, Howland alleges that Mrs. Mitchell is the wife of the Prime Minister of Grenada and resides in Grenada. And, because Mrs. Mitchell is a U.S. Citizen residing abroad, the Court lacks diversity jurisdiction over the entire lawsuit.
Accordingly, this action must be dismissed in its entirety for lack of subject-matter jurisdiction.
THIS ACTION MUST BE DISMISSED FOR FAILURE TO STATE A CLAIM
Failure to state a claim for "fraudulent transfer"
Next, this lawsuit must also be dismissed pursuant to Fed. R. Civ. P. 12(b)(6), because plaintiff Howland's sole cause of action, "fraudulent transfer", fails to state a claim against the Mitchells upon which relief can be granted.
The law of Switzerland applies to Howland's cause of action. A federal court sitting in diversity, as here, must apply the choice-of-law rules of the forum state.
New York's choice-of-law rules state that, where, as here, the cause of action is a tort, the jurisdiction whose law is applied is the jurisdiction having the greatest interest in the litigation.
That interest is determined differently depending on whether the tort is considered "conduct-regulating" or "loss-allocating".
The tort of "fraudulent transfer" is considered to be conduct-regulating. And, for conduct-regulating torts, the jurisdiction deemed to have the greatest interest in the litigation is the jurisdiction in which the tort occurred.
Here, plaintiff alleges that defendant Resteiner, a resident of Switzerland, fraudulently transferred cash to Prime Minister Mitchell at Resteiner's home in St. Moritz, Switzerland. Therefore, it is Swiss law that applies.
Accompanying this memorandum of law is an affidavit, submitted by Swiss attorney Alexandra Elisabeth Schluep pursuant to Fed, R. Civ, P. 44.1, setting forth the relevant Swiss law.
Under Swiss law, there is no cause of action for fraudulent transfer except in the context of an insolvency proceeding filed in a Swiss court.
This action is not an insolvency proceeding, and plainly, it has not been filed in Switzerland. For these reasons, plaintiff fails to state a claim for fraudulent transfer under Swiss law.
Defendant Marietta Mitchell
Even were the Court to conclude that it is New York law, rather than Swiss law, that applies to Howland's claim of fraudulent transfer, plaintiff would still fail to state a claim against Mrs. Mitchell.
First, plaintiff Howland alleges little against Mrs. Mitchell except that she is simply the Prime Minister's wife, and "benefitted" from the cash transfer her husband allegedly received.
Thus, plaintiff alleges liability simply by virtue of the marital relationship. However, it is well-settled that the mere relationship of husband and wife does not impose upon the wife any liability for the torts of her husband".
Moreover, even if the alleged benefit had accrued to Mrs. Mitchell by reason other than her marital relationship with the alleged transferee, Howland still fails to state a claim against her.
Under N.Y Debtor and Creditor law 276 (McKinney 2007), in order to pursue a claim for fraudulent transfer, the defendant not only must have benefitted from, but also must have participated in, the allegedly fraudulent transfer.
Here, although Howland alleges that Mrs Mitchell benefitted form the allegedly fraudulent transfer, he fails entirely to allege that she participated in the allegedly fraudulent transfer.
Therefore, even were New York law to apply, plaintiff would still fail to state a claim against Mrs. Mitchell.
Accordingly, the Court should dismiss the action for fraudulent transfer asserted against Prime Minister and Mrs. Mitchell.
Conclusion
For the foregoing reasons, Prime Minister and Mrs. Mitchell request that the Court dismiss this action against them, and request such other and further relief as this Court deems appropriate.
Dated August 10, 2007
New York, New York
