Delta Foods Ltd. v. Republic of Ghana

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued September 6, 2001 Decided September 28, 2001

No. 00-7081

Delta Foods Ltd.,
Appellee

v.

Republic of Ghana, et al.,
Appellants

Consolidated with
00-7248

Appeals from the United States District Court
for the District of Columbia
(No. 99cv00044)

Michael Steven Cole argued the cause and filed the briefs
for appellants.

 Robert D. Balin argued the cause for appellee. With him
on the brief was Richard L. Cys.

Before: Ginsburg, Chief Judge, Edwards and Sentelle,
Circuit Judges.

Opinion for the Court filed by Chief Judge Ginsburg.

Ginsburg, Chief Judge: The government of the Republic of
Ghana appeals two orders of the district court denying its
motions to reopen judgment under Rule 60(b). Those mo-
tions seek relief from a judgment enforcing against Ghana a
consent decree entered by that country's High Court of
Justice. Ghana argues, first, that it never waived sovereign
immunity before judgment and therefore may raise it after
judgment and, alternatively, that the parties reached a post-
judgment settlement. We hold that Ghana may not, after
having voluntarily withdrawn its direct appeal, assert sover-
eign immunity in a collateral attack, and that the parties did
not enter into a post-judgment settlement agreement.
Therefore, we affirm the orders of the district court denying
Ghana's Rule 60(b) motions.

I. Background

The government of Ghana contracted to buy corn from
Delta Foods, a Ghanaian corporation. After Delta purchased
the corn in the United States and tried to deliver it, the
government refused to take it or to pay for it. Delta sued
Ghana in the High Court of Justice, after which the two
parties negotiated a settlement agreement, the terms of
which were then embodied in a consent decree. Ghana was
to pay Delta 20.3 billion Ghanaian cedis for: the corn, the cost
of pre-judgment storage, and pre-judgment interest. In addi-
tion, Ghana was to reimburse Delta for any post-judgment
cost of storage, and to pay Delta post-judgment interest in an
amount to be negotiated by the parties.

In January, 1999, still not having been paid any money,
Delta sued Ghana in the district court here to enforce the
decree of the High Court. Ghana moved to dismiss or for
summary judgment on the grounds of forum non conveniens,

comity, and ripeness, but it did not assert sovereign immuni-
ty. Delta opposed Ghana's motion and cross-moved for sum-
mary judgment. Ghana then filed a reply in which it stated:

Also confused in the opposition papers are the principles
of Sovereign Immunity and "Act of State" with that of
Comity. The first two are doctrines of jurisdictional
immunity. Comity on the other hand, like the doctrine
of forum non-conveniens, concerns discretionary jurisdic-
tion. Neither Sovereign Immunity nor Act of State is
relevant since immunity to jurisdiction is not claimed.

In October, 1999 the district court granted Delta's motion
for summary judgment and ordered Ghana to pay Delta the
20.3 billion cedis due under the Ghanaian consent decree, plus
interest. Converting the 20.3 billion cedis to dollars using the
rate of exchange at the time Delta filed suit in the United
States, the court awarded Delta $8,526,000 plus interest from
the entry of the consent decree to the entry of judgment in
the district court, for a total of $9,174,005, plus post-judgment
interest on that sum.

Ghana timely appealed to this court "each and every part of
the said judgment" but still did not assert sovereign immuni-
ty. In December, 1999, however, Ghana moved voluntarily to
dismiss its appeal--which motion we granted--so it could file
in the district court a motion under Rule 60(b) seeking relief
from that court's judgment.

Meanwhile, on November 24, 1999 Ghana had deposited
20.3 billion cedis into the Ghanaian court, pursuant to the
consent decree, but Delta had rejected the payment, no doubt
because by that time the cedis were worth millions of dollars
less than the $9,174,005 to which it was entitled under the
judgment of the district court. (Ghana also had tendered
some 2.282 billion cedis it owed under the consent decree for
warehouse costs; Delta accepted that money.) In its Rule
60(b) motion Ghana quoted a letter Delta's counsel had sent
the government in March, 1999 stating that "[i]f the judgment
debt is satisfied in Ghana, the proceedings in the U.S. cannot
continue since satisfaction of the judgment in Ghana will be a
complete answer to proceedings for execution in the U.S."

 The district court denied Ghana's motion to vacate the
judgment. The court ruled that neither Delta's letter nor its
acceptance of payment for post-consent decree warehouse
costs--a part of the Ghanaian judgment Delta had not sought
to enforce in the United States--"establishes that the parties
ever entered into a post-judgment settlement."

In March, 2000 Ghana moved again under Rule 60(b) to
vacate the judgment of the district court, this time on the
ground of sovereign immunity. Ghana explained its belated
assertion of immunity as follows: "[T]here has been a sub-
stantive change in the law which affects the judgment of this
Court. This change is affected by virtue of a most recent
decision of the Second Circuit Court of Appeals," here refer-
ring to Transatlantic Shiffahrtskontor GmbH v. Shanghai
Foreign Trade Corp., 204 F.3d 384 (2000).

The district court denied Ghana's second motion to vacate,
holding that Ghana had, by the earlier-quoted passage in
Ghana's opposition to the plaintiff's motion for summary
judgment, "explicitly waived any claim to sovereign immuni-
ty." Therefore, the court did not reach the question whether
Ghana was precluded from raising sovereign immunity in a
post-judgment motion.

Ghana now appeals the district court's dismissal of its two
Rule 60(b) motions. The time for appeal of the underlying
judgment has long passed, of course.

II. Analysis

Ghana contends initially that it has not waived sovereign
immunity and may raise it for the first time in a post-
judgment motion. In the alternative, Ghana argues that it
satisfied the judgment of the district court when it paid into
the High Court of Ghana 20.3 billion cedis for the benefit of
Delta.

Ghana initially must show that it may assert sovereign
immunity in a motion under Rule 60(b). Because we hold
that it may not, we need not reach the question whether
Ghana waived sovereign immunity.

A. Sovereign Immunity

Ghana points out that it never answered Delta's complaint;
it merely moved to dismiss or for summary judgment on
various preliminary grounds, such as forum non conveniens.
When the district court denied that motion, Ghana filed an
appeal, which it later withdrew. There being no doubt it
could move to dismiss on the ground of forum non conveniens
(etc.) without thereby waiving sovereign immunity, Ghana
argues that it could likewise withdraw its appeal of the forum
non conveniens motion without losing its right to assert
sovereign immunity.

Delta counters that Ghana lost its right to assert sovereign
immunity when it withdrew its direct appeal. According to
Delta, a party may not challenge a court's subject-matter
jurisdiction in a collateral attack if the party initially ap-
peared in its own defense; the question of jurisdiction is res
judicata.

We cannot but agree with Delta. The problem with Gha-
na's argument is that Ghana never timely asserted sovereign
immunity in any forum. Its failure to assert sovereign
immunity in the district court is not by itself fatal because, as
Ghana points out, it did not answer the complaint and sover-
eign immunity is not necessarily waived by the tactical choice
to raise other preliminary objections first. Canadian Over-
seas Ores, Ltd. v. Compania de Acero del Pacifico S.A., 727
F.2d 274, 277-78 (2d Cir. 1984). Therefore, when the district
court entered summary judgment for Delta, Ghana arguably
could have asserted sovereign immunity for the first time in
the court of appeals because the objection goes to the subject
matter jurisdiction of the court. See Bazuaye v. United
States, 83 F.3d 482, 486 (D.C. Cir. 1996) ("Challenges to
subject matter jurisdiction can be raised for the first time on
appeal"). There is a limit, however, to the timeliness of even
a jurisdictional objection, and that limit was reached when the
time to appeal ran out; with no appeal pending, the judgment
of the district court then became final. For, as the Supreme
Court has stated:

 A party that has had an opportunity to litigate the
question of subject-matter jurisdiction may not ... re-
open that question in a collateral attack upon an adverse
judgment. It has long been the rule that principles of
res judicata apply to jurisdictional determinations--both
subject matter and personal.

Insurance Corp. of Ireland, Ltd. v. Compagnie des Bauxites
de GuinEe, 456 U.S. 694, 702 n.9 (1982).

Ghana now seeks to raise the issue of sovereign immunity
because it believes that Transatlantic, which the Second
Circuit decided two months after the last day for Ghana to
appeal, works a "substantive change in the law" from which
Ghana might benefit. According to Ghana, that case holds
that in a suit to enforce a foreign judgment, the immunity of a
foreign sovereign is not subject to the commercial activity
exception unless the foreign judgment arises out of commer-
cial activity in the United States.

Whether Ghana would benefit from the Transatlantic case
is irrelevant to the proper disposition of its motion to vacate
the judgment. The Supreme Court has been clear, in terms
that might as well have been crafted with this case in mind,
that "reopening a judgment under Rule 60(b) [is precluded]
where the movant has voluntarily abandoned his appeal, and
the only ground for the motion to reopen is an asserted later
change in the judicial view of applicable law." Polites v.
United States, 364 U.S. 426, 431 (1960). Enough said.

B. Settlement

Ghana argues in the alternative that it satisfied the judg-
ment of the district court when it tried to pay Delta 20.3
billion cedis, plus 2.82 billion cedis for post-consent decree
warehouse costs, both as required by the Ghanaian consent
decree, and Delta in fact accepted payment for the warehouse
costs. According to Ghana, Delta agreed that if Ghana paid
the Ghanaian judgment, then Delta would not pursue pay-
ment of the U.S. judgment. Ghana here relies upon the
letter it received in March, 1999 from Delta's counsel: "If the
judgment debt is satisfied in Ghana, the proceedings in the

U.S. cannot continue since satisfaction of the judgment in
Ghana will be a complete answer to proceedings for execution
in the U.S."

Delta counters that counsel sent that letter before the
district court had entered judgment; in that procedural con-
text the letter meant only that, if Ghana paid the Ghanaian
judgment for 20.3 billion cedis, then there would be no
unsatisfied judgment of which Delta could seek enforcement
in the United States. Once the district court entered judg-
ment, however, everything changed: Ghana owed Delta not
20.3 billion cedis but $9,174,005. See Competex, S.A. v.
Labow, 783 F.2d 333 (2d Cir. 1986). Ghana has not attempt-
ed to pay that amount, nor has Delta agreed to accept less.

In reply, Ghana does not argue that it could satisfy the
judgment of the district court by paying the less valuable
Ghanaian judgment; such an argument would be squarely at
odds with the holding in Competex. Instead Ghana maintains
that Delta agreed to accept less than the U.S. judgment.
Ghana first points to counsel's letter, but the letter manifests
no such agreement. Although the letter informed Ghana that
Delta's "proceedings in the U.S. [could not] continue" if
Ghana paid the Ghanaian judgment, it in no way suggested
that Delta would accept payment of the Ghanaian judgment
as satisfaction of any judgment that might later be issued in
the United States.

Ghana also emphasizes that Delta accepted payment of the
warehouse costs in cedis, the suggestion apparently being,
because the cedis had lost value, that such acceptance is
evidence that Delta agreed not to demand the full payment
provided by the judgment of the district court if only Ghana
satisfied the decree of the High Court. The warehouse costs,
however, were not a part of the U.S. judgment. Delta had to
accept payment in cedis for those costs because it was not
owed payment in dollars. Delta is, by contrast, owed dollars
under the U.S. judgment, and it has consistently demanded
full payment of the amount it is owed. We therefore reject
Ghana's claim that it is entitled to relief from the judgment

because the parties entered into a post-judgment settlement
agreement.

III. Conclusion

For the foregoing reasons, the judgment of the district
court is

Affirmed.