Preview:

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MARYLAND WARREN T. DEWHURST, et al. v. TELENOR INVEST AS, et al. : : : : : : ...o0o... MEMORANDUM Now pending before this Court is Defendants' motion to dismiss the complaint or, in the alternative, to stay the proceedings. On February 16, 1999, Plaintiffs Warren Dewhurst,

CIVIL NO. CCB-99-417

Harry Burks, Jr., Robert Dewhurst, Serguej Domaratskij, Latitudes Trading Company, Inc. ("LTC"), DCI Engineering and Consulting Ltd. ("DCI"), and Neva-Nor Telekom AS ("NNT") filed a complaint with this Court against Defendant Telenor AS, a wholly-owned subsidiary of the government of Norway; Defendants Telenor Invest AS, Telenor International AS, Comet Telecom AS, Comet Holding AS, and Comet Advisors KFT (collectively the "Subsidiary Defendants"); and Defendants Jan Gustav Stenhagen, Arne-Kjetil Lian, and Goran Olson (collectively the "Individual Defendants"). The action stems from a business venture between Warren Dewhurst, Robert Dewhurst,1 Burks, Domaratskij, LTC, and Telenor Invest AS.

Although both Warren and Robert Dewhurst are shareholders of NNT and Plaintiffs in this action, most of the activities giving rise to this action involve Warren Dewhurst. Therefore, when the Court refers only to "Dewhurst" it is referring to Warren Dewhurst. 1

1

These four individuals and two corporations were shareholders in both NNT and a companion corporation, Full-Cry Neva ("FCN"). In June 1993, Warren Dewhurst, Robert Dewhurst, Burks, Domaratskij, and LTC (collectively the "Founders") formed FCN to operate a paging system in St. Petersburg, Russia. In an attempt

to obtain additional funding for the corporation, these Plaintiffs reached an agreement with Telenor Invest AS whereby Telenor Invest AS agreed to invest $700,000 into the venture in exchange for a 50 percent ownership in the company. The parties

also agreed to establish a new corporation, ultimately NNT, to provide financial and management services to FCN (collectively the "NNT/FCN venture"). The agreement stated that Telenor Invest NNT was

AS would likewise receive a 50 percent ownership in NNT.

eventually incorporated in Norway, although much of its business was conducted from Germantown, Maryland. Plaintiffs' complaint alleges that Telecom AS and the Subsidiary Defendants (collectively the "Corporate Defendants") breached funding, service, and settlement agreements with the Plaintiffs; that the Corporate Defendants breached employment contracts with Burks and Warren Dewhurst; that the Defendants breached fiduciary duties owed to the Plaintiffs; that conduct by Olson and the Corporate Defendants resulted in a tortious interference with contractual relations between the Plaintiffs and outside investors; and that the actions of the Defendants were conducted in bad faith and in breach of the covenants of 2

good faith and fair dealing.

On July 13, 1999, the Defendants

filed a motion to dismiss the complaint or, in the alternative, to stay the proceedings pending arbitration proceedings that have commenced in Paris, France. The Defendants move to dismiss

asserting several challenges to this Court's jurisdiction, as well as other procedural and substantive challenges. For the

reasons that follow, this Court holds that it lacks subject matter jurisdiction over any of the claims, and therefore grants the Defendants' motion to dismiss.

STANDARD OF REVIEW The Fourth Circuit recently summarized the basic principles governing the resolution of a Rule 12(b)(1) motion to dismiss for lack of subject matter jurisdiction: The plaintiff has the burden of proving that subject matter jurisdiction exists. When a defendant challenges subject matter jurisdiction pursuant to Rule 12(b)(1), the district court is to regard the pleadings as mere evidence on the issue, and may consider evidence outside the pleadings without converting the proceeding to one for summary judgment. The district court should grant the Rule 12(b)(1) motion to dismiss only if the material jurisdictional facts are not in dispute and the moving party is entitled to prevail as a matter of law. Evans v. B.F. Perkins Co., 166 F.3d 642, 647 (4th Cir. 1999) (internal citations omitted). While the Fourth Circuit has not

addressed the standard of review when the motion to dismiss is based on a claim of foreign sovereign immunity, a district court may need to make a more searching inquiry into the alleged facts 3

before asserting jurisdiction over the foreign state.

See

Jungquist v. Sheikh Sultan Bin Khalifa al Nahyan, 115 F.3d 1020, 1027-28 (D.C. Cir. 1997) ("Where the motion to dismiss is based on a claim of foreign sovereign immunity, which provides protection from suit and not merely a defense to liability, however, the court must engage in sufficient pretrial factual and legal determinations to satisfy itself of its authority to hear the case before trial.") (internal quotations omitted).

BACKGROUND Telenor AS is a Norwegian company, all of whose shares are owned by the Government of Norway. (Decl. of Jan Gustav

Stenhagen, Defs. Mot., Ex. A ["Stenhagen Decl."],

Download Dewhurst v Telenor Invest.pdf

Maryland Law