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From: Sallie'Hofmeister Sent: Thursday, June 28,2018 3:48 PM To: Sallie Hofmeister Subject: update on BROIDY CASE AGAINST QATAR

Greetings:

We are public relations counsel working with attorneys for the State of Qatar. Given your previous coverage of the lawsuit brought by Elliott Brojdy, we thought you would find of interest the attached motion to dismiss filed by our client late yesterday. Please let us know if you have any questions.

All the best, Sallie

Sallie Hofmeister Sitrick And Company 11999 San Vicente Blvd. Penthouse Los Angeles, GA 9,0049 Office: 310-788-2850 Cell: 323-868-8011 [email protected]

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I ase 2: 18-CV-02421-J FW-E Document 112-1 Filed 06/27/18 Page lot 31 PagelD#:2099

I COVINGTON & BURLING LLP Mitchell A. Ramin (Bar No. 202788) T [email protected] Neema T. Sahni (Bar No. 274240) [email protected] Mark YXhen (Bar No. 310450) 4 [email protected] Rebecca G. Van Tassell (Bar No. 310909) 5 [email protected] 1999 A venue of the Stars, Suite 3500 6 Los Angeles, CA 90067-4643 Telephone: + 1 424-332-4800 7 Facsimile: + 1 424-332-4749

8 Attorneys for Defendant State of Qatar

9 UNITED STATES DISTRICT COURT 10 FOR THE CENTRAL DISTRICT OF CALIFORNIA WESTERN DIVISION 11 BROIDY CAPITAL MANAGEMENT LLC 12 Civil Case No.: and ELLIOTT BROIDY 13 2:18-CV-02421-JFW-(Ex) Plaintiffs, 14 MEMORANDUM OF POINTS AND 15 v. AUTHORITIES IN SUPPORT OF 16 DEFENDANT STATE OF QATAR’S STATE OF QATAR, STONINGTON MOTION TO DISMISS PURSUANT 17 STRATEGIES LLC, NICOLAS D. TO RULES 12(b)(1) AND 12(b)(2) OF MUZIN, GLOBAL RISK ADVISORS 18 THE FEDERAL RULES OF CIVIL LLC, KEVIN CHALKER, DAVID MARK PROCEDURE 19 POWELL, MOHAMMED BIN HAMAD 20 BIN KHALIFA AL THANI, AHMED AL- RUMAIffl, and DOES 1-10, [Filed Concurrently with Notice of 21 Motion and Motion to Dismiss; Request for Judicial Notice; Proposed Order] 22 Defendants.

23 Hearing Date: July 30,2018 24 Time: 1:30 p.m. Courtroom: 7A 25 Judge: Hon. John F. Walter 26 Complaint Filed: March 26,2018 27 Amended Complaint: May 24,2018

MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF STATE OF QATAR’S MOTION TO DISMISS

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I TABLE OF CONTENTS

i Page i. 3 INTRODUCTION...... 1

4 FACTUAL BACKGROUND...... 3

5 I. Qatar Is a Key Strategic Partner of the United States in the Middle East...... 3

6 II. Plaintiff Elliott Broidy and the Alleged Hack...... 5

7 III. Plaintiffs’ Causes of Action Depend on Extraterritorial Conduct...... 7

8 LEGAL STANDARD...... 8

9 ARGUMENT...... 10

10 I. This. Court Lacks Subject-Matter Jurisdiction over Qatar...... 10

11 A. The Noncommercial Tort Exception Does Not Apply...... 10

12 1. Plaintiffs Have Failed to Allege an Entire Tort by the State of Qatar Occurring in the United States...... 11 13 2. Even Assuming Arguendo the Noncommercial Toft Exception 14 Applied, the Alleged Conduct Falls Within the FSIA’s Discretionary Function Rule...... 14 15 3. The FSIA’s Rule Barring Claims Based On Misrepresentation 16 or Deceit Applies...... 16

17 B. The Commercial Activity Exception Does Not Apply...... 17

18 II. Plaintiffs Cannot Establish Personal jurisdiction over the State of Qatar...... 20

19 III. Qatar Is a Necessary Party and Therefore the Entire Case Must Be Dismissed...... 21 20 CONCLUSION...... :...... 24 21

28 ______i______MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF STATE OF QATAR’S MOTION TO DISMISS

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l TABLE OF AUTHORITIES

Page(s)

Cases 4 Adler v. Nigeria, 5 107 F.3d 720 (9th Cir. 1997)...... 19-20 6 Alperin v. Vatican Bank, 7 No. C-99-04941 MMC, 2007 WL 4570674 (N.D. Cal. Dec. 27, 2007)...... 11

8 Am. W. Airlines, Inc. v. GPA Grp., Ltd., 9 877 F.2d 793 (9th Cir. 1989)...... 19

10 Andrews v. Metro N. Commuter R.R. Co., 882 F.2d 705 (2d Cir. 1989)...... ‘...... 5 11

12 Applied Equip. Corp. v. Litton Saudi Arabia Ltd., 869 P.2d 454 (Cal. 1994)...... 14 13

14 Argentine Republic v. Amerada Hess Shipping Corp., 488 U.S. 428 (1989)...... :...... 9, 10, 11 15 Asociacion de Reclamantes v. United Mexican States, 16 735 F.2d 1517 (D.C. Cir. 1984)...... ,....,...... 10 17 Bauer v. Tacey Goss, P.S., 18 No. C 12-00876 JSW, 2012 WL 2838834 (N.D. Cal. July 10,2012)...... 5

19 Bell Ail. Corp. v. Twombly, 20 550 U.S. 544 (2007)...... 9, 13

21 Berkoyitz by Berkovitz v. United States, 22 486 U.S. 531 (1988),...... 15

23 Bolivarian Republic of Venezuela v. Helmerich & Payne Int 'l Drilling Co., 137 S. Ct. 1312 (2017)...... 9, 20 24

25 Cabiri v. Gov’t of Republic of Ghana, 165 F 3d 193 (2d Cir. 1999)...... 16, 17 26 Cassirer v. Kingdom of Spain, 27 461 F. Supp. 2d 1157 (C.D. Cal. 2006)...... 20 28

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I Cholla Ready Mix, Inc. v. Civish,

“> 382 F.3d 969 (9th Cir. 2004)...... 9 A. Dalehite v. United States, J) 346 U.S. 15 (1953)...... 15 4 Dawavendewa v. Salt River Project Agric. Improvement & Power Dist., 5 276 F,3d 1150 (9th Cir. 2002) ...... 21, 22, 23 6 De Leteiier v. Republic of Chile, 7 748 F.2d 790 (2d Cir. 1984)...... 17 8 Delano Farms Co. v. Cal. Table Grape Comm ‘n, i) 623 F. Supp. 2d 1144 (E.D. Cal. 2009)...... 23

10 Doe v. Fed. Democratic Republic of Ethiopia, II 851 F.3d 7 (D.C. Cir. 2017)...... 11

12 Doe v. Holy See, 557 F.3d 1066 (9th Cir. 2009)...... 8, 15 13

14 Doe v. Holy See, 434 F. Supp. 2d 925 (D. Or. 2006)...... 20 15

16 Egypt v. Lasheen, 603 F.3d 1166 (9th Cir. 2010)...... 19 17 Entm’t Research Grp., Inc. v. Genesis Creative Grp., Inc., 18 122 F.3d 1211 (9th Cir. 1997)...... 14 19 Fed. Ins. Co. v. RichardI. Rubin & Co., 20 12 F.3d 1270 (3d Cir. 1993).....^...... v...... 20 21 Friends of Amador Cty. v. Salazar, 22 No. 11-17996, 2011 WL 4709883 (E.D. Cal. Oct. 4,2011)...... 22

23 Frolova v. Union of Soviet Socialist Republics, 24 761 F.2d 370 (7th Cir. 1985)...... 11

25 Garb v. Republic of Poland, 440 F.3d 579 (2d Cir. 2006)...... 19 26

27 In re Gilead Scis. Sec. Litig., 536 F.3d 1049 (9th Cir. 2008)...... ,,...3 28

______111 ______;______■______MEMORANDUM OF POINTS AND. AUTHORITIES IN SUPPORT OF STATE OF QATAR’S MOTION TO DISMISS

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I Greenpeace, Inc. v. State of France, 946 F. Supp. 773 (C.D. Cal. 1996)....,....,...... 13 o

3 Jerez v. Republic of Cuba, 775 F.3d 419 (D.C. Cir. 2014)...... :.... 11 4

5 Kescoli v. Babbitt, 101 F.3d 1304 (9th Cir. 1996)...... 23 6 Kozorowski v. Russian Fed’n, 7 124 F.3d 211 (9th Cir. 1997)...... 17 8 Leite v. Crane Co., 9 749 F.3d 1117 (9th Cir. 2014)...... 8

10 MacArthur Area Citizens Ass’n v. Republic of Peru, 11 809 F.2d 918 (D.C. Cir. 1987)...... 10

12 Meadows v. Dominican Republic, 817 F.2d 517 (9th Cir. 1987)...... 9 13

14 MGIC Indem. Corp. v. Weisman, 803 F.2d 500 (9th Cir. 1986)...... 5 15

16 MOL, Inc. v. Peoples Republic of Bangladesh, 736 F.2d 1326 (9th Cir. 1984)...... 18 17 O ’Bryan v. Holy See, 18 556 F.3d 361 (6th Cir. 2009)...... 15,16,20 19 OBB Personenverkehr AG v. Sachs, 20 136 S. Q. 390 (2015).,...... ,...... ,...... :...... 9, 19

21 Odhiambo v. Kenya, 22 764 F.3d 31 (D.C. Cir. 2014)...... 19

23 Olsen by Sheldon v. Government of Mexico, 24 729 F,2d 641 (9th Cir. 1984)...... 11,13

25 Republic of Argentina v. Weltover, Inc., 504 U.S. 607 (1992)...... 18 26

27 Republic of Philippines v. Pimentel, 553 U.S. 851 (2008)...... 21,22, 23, 24 28

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I Rong v. Liaoning Province Gov % 452 F.3d 883 (D.C. Cir. 2006)...... 8 2

.*> Samantar v. Yousuf, 560 U.S. 305 ...... 21 4 Sampson v. Fed. Republic of Germany, 5 250 F.3d 1145 (7th Cir. 2001)...:...... 9 6 Santa Fe Pac. Realty Corp. v. United States, 7 780 F. Supp. 687 (E.D. Cal. 1991)...... 14 8 Saudi Arabia v. Nelson, 9 507 U.S. 349 (1993)....,...... i...... 9, 18, 19 10 Schermerhorn v. Israel, II 876 F.3d 351 (D.C. Cir. 2017)...... 9

12 Southway v. Cent. Bank of Nigeria, 198 F.3d 1210 (10th Cir. 1999)...... 19 13

14 Tarantino v. Gawker Media, LLC, No. CV-14-603-JFW (FFMx), 2014 WL 2434647 (CD. Cal. Apr. 22, 15 2014) ...... 5 16 United States v. Varig Airlines, 17 467 U.S. 797 (1984)...... 15

18 Verlinden B.V.v. Cent. Bank of Nigeria, 19 461 U.S. 480(1983)...... 9

20 Vickers v. United States, 21 228 F.3d 944 (9th Cir. 2000)...... 15

22 Statutes

23 17 U.S.C. § 1201 ...... 12 24 18 U.S.C, § 1030...... 12 25 18U.S.C. § 1839...... ,12 26 18 U.S.C. §2701...... 12 27

28 28 U.S.C. § 1330...... ,.,...... ^9

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I 28 U.S.C. § 1603...... 17

28 U.S.C. § 1604...... 9 •> 28 U.S.C. § 1605...... passim 4 Cal. Civ. Code § 3426.1...... 12 5 Cal. Penal Code § 496...... 6 ...... 12

7 Cal. Penal Code § 502...... 12

8 Other Authorities 9 CACINo. 1800...... 42 10 CACI No. 2100...... ,...... 12 11 Fed. R. Civ. P. 12...... 3,8 12

Fed. R. Civ. P. 19...... 21, 22,23 13

14 H.R. Rep. No. 94-1487 (1976)...... 10

15 S. Rep. No. 94-1310 (1976)...... 10

16 Vienna Convention on Diplomatic Relations, art. 24, Apr. 18, 1961,23 17 U.S.T. 3227, 500 U.N.T.S. 95...... 22

18 Vienna Convention on Consular Relations, art 33, Apr. 24, 1963,21 U.S.T. 19 77, 596 U.N.T.S. 261...... 22

VI MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF STATE OF QATAR’S MOTION TO DISMISS

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\ l INTRODUCTION

“) The State of Qatar (“Qatar”) is immune from this lawsuit. Plaintiffs Seek to

"i interfere with Qatar’s legitimate pursuit of diplomatic, foreign policy, and national

4 security interests. This is precisely the kind of intrusion into the affairs of sovereign

5 nations that the Foreign Sovereign Immunities Act of 1976 (“FSIA” or the “Act”) was

6 . designed to prevent.

7 The FSIA reflects Congress’s sound judgment that, in order to protect the

8 immunity necessary for the United States and its officials to operate effectively abroad,

9 foreign nations must be given reciprocal immunity here. Based on that judgment, the Act

10 deprives United States courts of their jurisdiction over foreign sovereigns. This is

11 particularly vital in cases such as this one, in which private plaintiffs attempt to use the

12 courts to pursue unsubstantiated allegations against sovereign states. The protections Of

15 the FSIA are even more important in the case of a close ally such as Qatar, which hosts

14 strategically important military installations where United States service men and women

15 work and live. <

10 Allowing private plaintiffs to hale foreign sovereigns into court also undermines

17 the exclusive authority of the Executive Branch to conduct diplomacy. That interest is

18 heightened here, where Plaintiffs’ previous attempts to exert improper influence over

19 U.S. foreign policy are a matter of public record—and the same agenda that they now

20 seek to advance through impermissible litigation.

21 In recognition of these fundamental principles, the FSI A establishes that the

22 immunity of a foreign sovereign is the rule and litigation is the exception. The

23 exceptions to immunity set forth in the FSIA are triggered by only a handful of narrow

24 factual circumstances, and it is Plaintiffs’ burden to establish that those circumstances

25 exist. Despite two attempts to meet that burden, Plaintiffs’ complaint fails to establish

26 any exception to sovereign immunity.

27 First, Plaintiffs have invoked the FSIA’s non-commercial tort exception

28 notwithstanding their own factual allegations and expert testimony that, if credited,

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I establish that each cause of action is a transnational tort. Courts, including the Ninth

2 Circuit, have repeatedly held that the non-commercial tort exception does not apply to

Jt torts where either the precipitating act or the alleged injury occurred outside the United

4 States. Rather, under the “entire tort rule,” a foreign sovereign is entitled to immunity

5 unless the entire tort alleged by the plaintiffs occurred in the United States. Plaintiffs

6 have pled themselves out of the non-commercial tort exception by telling this Court

7 repeatedly, including through expert testimony, that the alleged hacking at the heart of

8 this case was executed in Qatar. All ten causes of action depend upon the acts that

9 Plaintiffs steadfastly assert occurred in Qatar, and that is the end of this case.

K) Second, Plaintiffs have invoked the FSIA’s commercial activity exception. Setting

11 aside the absurdity of attempting to paint Qatar’s alleged acts as simultaneously non

12 commercial and commercial, this theory fails. The commercial activity exception is

13 triggered in cases based on the commercial activity of a foreign state Or on acts in

14 connection with such activity. By contrast, Plaintiffs’ case is based on alleged actions

15 that are decidedly noncommercial: an information and government relations campaign to

16 improve Qatar’s standing in the United States and a purported hacking operation to

17 discredit a known critic of Qatar’s state policies. Alleged contracts between Qatar and

18 other defendants do not trigger this exception because the rights Plaintiffs assert here

19 have nothing whatsoever to do with those agreements.

20 Finally, the FSIA’s jurisdictional bar requires dismissal of the First Amended

21 Complaint (“FAC”) in its entirety. Under directly applicable Supreme Court precedent, a

22 foreign sovereign’s immunity demands dismissal of the litigation as a whole when the

23 immune party is necessary under Federal Rule of Civil Procedure 19 and where its

24 sovereign interests Would be undermined by allowing the case to continue. That is true

25 here. Given Plaintiffs’ demand for an injunction binding Qatar, Qatar’s absence from the

26 suit leaves the .Court unable to provide the relief requested. And, as Qatar has

27 demonstrated, its interests remain at risk if the case is allowed to proceed against any of

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I the other defendants insofar as Qatar would have to repeatedly object and intervene to

T protect its state secrets and the inviolable records of its diplomatic mission.

3 Plaintiffs Elliott Broidy and Broidy Capital Management brought this suit in an

4 apparent attempt to deflect attention from Broidy’s well-documented misconduct,

5 including his efforts to trade access to his political contacts for lucrative foreign security

6 contracts. Plaintiffs’ case is built entirely on speculation and is replete with unsupported

7 allegations that reflect their self-interested, anti-Qatar agenda.

8 Because Plaintiffs fail to establish any statutory exception to Qatar’s presumptive

9 immunity, the FSIA absolutely bars this lawsuit and deprives this Court of jurisdiction

10 over Qatar. The case should be dismissed in its entirety With prejudice.1

11 FACTUAL BACKGROUND2

12 I. Qatar Is a Key Strategic Partner of the United States in the Middle East.

13 Qatar and the United States have a longstanding relationship as allies. From its

14 strategically critical location in the Arabian Gulf, Qatar has assisted U.S. military efforts

15 in the region for decades, including in the campaign to eject Iraqi occupation forces from

16 Kuwait in 1991. Cong. Research Serv., R44533, Qatar: Governance, Security, and U.S.

18 1 In order to bring these threshold jurisdictional issues to the Court expeditiously, Qatar submits the instant Motion solely pursuant to Fed. R. Civ. P. 12(b)(1) and (b)(2). 19 However, the FAC also fails to state a claim under Rule 12(b)(6), because its factual allegations do not suffice to establish that Qatar bears any responsibility for the alleged 20 hacking and because several of its causes of action fail to adequately plead the required elements. 21 As explained in the Joint Statement Regarding Local Rule 7-3 Pre-Filing Conference on this Motion, see Dkt. 109, Qatar sought Plaintiffs’ agreement to hold any Rule 12(b)(6) 22 briefing in abeyance until the Court decides the threshold FSIA issues raised herein to avoid the need to reach any issues unnecessarily. Plaintiffs did not agree to a bifurcated 23 briefing schedule absent additional conditions which Qatar could not accept. Qatar thus moves solely under Rules 12(b)(1) and 12(b)(2), but respectfully reserves the right to 24 seek permission from the Court to file a separate motion under Rule 12(b)(6) in the event this Motion is denied. 25 2 This factual background is based on the factual allegations contained in the FAC and 26 properly excludes "allegations that are merely conclusory, unwarranted deductions of fact, or unreasonable inferences.” In re Gilead Scis. Sec, Li tig., 536 F.3d 1049, 1055 (9th 27 Cir. 2008) (citation omitted). It also includes readily available public record information.

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I Policy (2018) (Request for Judicial Notice in Support of State of Qatar’s Motion to

*!> Dismiss (“RJN”), Ex. A at Summary & p.15); S. Prt. 112-35, The Gulf Security

J) Architecture: Partnership with the Gulf Cooperation Council (2012) (RJN, Ex. B at 15). 4 In 1992, Qatar and the United States signed a Defense Cooperation Agreement, which

5 was renewed for 10 years in December 2013. RJN, Ex. A at 15. In the period since the

6 September 11 attacks, Qatar has been the sole regional home to a critical United States

7 Air Force base housing thousands of American troops. Id.\ see also RJN, Ex. B at 15.3

8 The governments of the United States and Qatar recently confirmed that the

9 relationship between the two nations is “key to successfully combating terrorism,

10 countering violent extremism, and deterring external aggression.” Joint Statement of the

11 Inaugural United States-Qatar Strategic Dialogue, U.S. Dep’t of State (Jan- 30, 2018)

12 (RJN, Ex. C).4 President Trump continues to highlight the importance of Qatari-U.S.

13 relations. On January 15, 2018, he “thanked the Emir for Qatari action to counter

14 terrorism and extremism in all forms” and discussed with the Emir ways the United

15 States and Qatar could “partner to bring more stability to the region, counter malign

16 Iranian influence, and defeat terrorism.” Readout of President Donald J. Trump’s Call

17 with Emir Tamim bin Hamad Al Thani of Qatar (Jan. 15, 2018) (RJN, Ex. E).

18 This litigation—and this Court’s potential exercise of jurisdiction over Qatar—

19 directly implicates this critical diplomatic and national security relationship. In turn, it

20 impacts Qatar’s other strategic foreign policy and national security objectives in the

22 3 Since 2003, Qatar has also been the host of the forward headquarters ofmilitary forces at U.S. Central Command. Overall, 10,000 U.S. troops are currently deployed in Qatar. 23 Most are U.S. Air Force personnel at Al Udeid air base,participating in LJ.S. operations such as Operation Inherent Resolve to combat the Islamic State organization in Iraq and 24 Syria. RJN, Ex. A at 15. 25 4 The Qatari-U.S. relationship also extends to broader economic cooperation. See, e.g., U.S.-Qatar Trade Facts, U.S. Trade Rep., ustr.gov/countries-regions/europe-middle- 26 east/middle-east/north-africa/qatar (last visited June 27,2018) (trade between the United States and Qatar has increased approximately three-fold from 2006 to 2016) (RJN, Ex. 27

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I region—including the goal of ending a regional blockade imposed by Saudi Arabia, the

7 United Arab Emirates (“UAE”) and other Middle Eastern countries—all of which are

7*% matters of the utmost sensitivity and at the core of Qatar’s sovereignty. In sum, this 4 litigation, and related discovery, will implicate and jeopardize matters vital to the national

5 and international security and diplomatic interests of Qatar, the United States, and other

6 nations.

7 II. Plaintiff Elliott Broidy and the Alleged Hack.

8 Among other well-publicized activities, Plaintiff Elliott Broidy is a businessman

9 who has publicly opined on various geopolitical topics. As acknowledged in the articles

10 Broidy submitted in this litigation, Broidy also sought to obtain lucrative procurement

I 1 contracts in Saudi Arabia and the UAE by lobbying his U.S. government contacts on

12 behalf of those countries. Original Complaint, Dkt. I (“OC”), U 6 (curiously, the

13 amended complaint omits any reference to these countries); see also, e.g., FAC fflj 121,

14 138; Dkt. 31-9 (Declaration of Lee Wolosky ISO Plaintiffs’ TRO Application), Ex. 2.5

15 As coverage of Broidy’s far-reaching agenda in the Middle East grew, Broidy filed

16 this lawsuit, claiming that an unlawful and unauthorized intrusion into his personal and

17 company email servers led to the unfavorable publicity he has received.6 The FAC

18 alleges that the “hack” began with simple “phishing” emails, disguised as Gmail security

19 alerts, sent to Mr. Broidy’s wife and his executive assistant on January 14,2018. FAC

21 5 The allegations in Plaintiffs’ prior representations and submissions to this Court remain binding on Plaintiffs. See Bauer v. Tacey Goss, P.S., No. C 12-00876 JSW, 2012 WL 22 2838834, at *3 (N.D. Cal. July 10,2012) (allegations in original complaint are deemed judicial admissions unless explained in the amended complaint); see also MGIC Indent. 23 Corp. v. Weisman, 803 F.2d 500, 504 (9th Cir. 1986) (in ruling on a motion to dismiss, a court may judicially notice documents previously filed by the Plaintiff); Andrews v. 24 Metro N. Commuter R.R. Co., 882 F.2d 705, 707 (2d Cir. 1989). Additionally, the Court may judicially notice the news articles referenced in the FAC and previously submitted 25 by Plaintiffs to this Court. Tarantino v. Gawker Media, LLC, No. CV- 14-603-JFW (FFMx), 2014 WL 2434647, at * 1 n. 1 (C.D. Cal. Apr. 22,2014) (Walter, J.). 26 6 Plaintiffs do not contend that any of the news coverage regarding Broidy’s misconduct 27 is false.

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I 97-100, 109-111. In response, Mr. Broidy’s wife and the executive assistant provided

Amo their usernames and passwords, which an unidentified third party allegedly then used to

3 access the email accounts and remotely control those accounts via a Russian mail service

4 called “mail.ru.”7 See id. Plaintiffs contend that the third party logged into Plaintiffs’

5 email accounts on “thousands” of occasions, using different IP addresses. FAC 1| 113. i 6 Plaintiffs argue that Qatar is the responsible party, because, among those thousands of

7 logins, two allegedly came from an IP address registered to a computer located

8 somewhere in Doha, Qatar. FAC 115. Plaintiffs’ forensic expert also has declared

9 under oath that two connections to Plaintiffs’ systems occurred from the Doha, Qatar

10 address. Dkt. 31-5 (Declaration of J. Luke Tenery ISO Plaintiffs’ TRO Application),

II 1117.

12 Since filing the original complaint, Broidy has subpoenaed more than thirty

13 internet service providers and other internet companies, including the purported “Virtual

14 Private Networks” that Plaintiffs contend were used to mask the hacker’s true identity.

15 While the FAC lists these entities, it does not identify any relationship between them and

16 any of the Defendants. See, eg., FAC f114.

17 Finally, in their FAC, Plaintiffs now also try to blame newly-named defendants

18 Sheikh Mohammed Bin Hamad Bin Khalifa A1 Thani and Ahmed Al-Rufnaihi for the

19 hack. But once again, they plead no specific facts that even remotely suggest that either

20 of these defendants were engaged in any unlawful hacking activity. Rather, Plaintiffs’

21 allegations about these individuals include only irrelevant material designed to inflame

22 the Court and smear their names in a public lawsuit. See, e.g., FAC fflf 26-27, 56-61.

23 Plaintiffs’ effort to extrapolate some grand conspiracy from normal and legitimate

24 diplomatic and sovereign activity is wholly unsupported. Indeed, as this Court held in

26 7 Plaintiffs allege a similar hacking attempt on Broidy’s friend Joel Mowbray, which was 27 ultimately unsuccessful. FAC Iff 101-108. Mr. Mowbray is not a party to this action.

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1 denying a temporary restraining order, Plaintiffs have “failed to demonstrate a likelihood

J of success on the merits,” as they have not provided any “admissible evidence

J*> demonstrating that any of the defendants ... are responsible for the unauthorized access

4 of Plaintiffs’ email accounts or that any of the Defendants are in possession of or are

5 responsible for disseminating the allegedly illegally-obtained emails and documents to

6 various media outlets.” Dkt. 37, at 2-3.

7 Plaintiffs amended the Complaint, but failed to cure any of these problems or

8 include allegations that would bring this case within the narrow exceptions to the FSLA,

9 despite receiving substantive document productions by internet service providers. The

10 paucity of Plaintiffs’ allegations reveal this action for what it is: a misguided attempt to

I I salvage a personal reputation and pursue Plaintiffs’ own geopolitical goals, in conflict

12 with core foreign sovereignty concerns and the attendant risks to both American foreign

13 policy and the bedrock principle of international comity.

14 III. Plaintiffs’ Causes of Action Depend on Extraterritorial Conduct.

15 The locus of the actions giving rise to Plaintiffs’ tort claims is key to the

16 jurisdictional analysis under the F-SIA. All ten of Plaintiffs’ causes of action arise out of

17 extraterritorial activity—in Qatar and other foreign countries—including allegations that:

18 • “Defendant Powell... established GRA ’s office [in Qatar] through a Gibraltar

19 subsidiary in October 2017 - just weeks prior to the commencement of the

20 attack on Plaintiffs.” FAC 5.

21 • “[T]he GRA Defendants introduced Defendant State of Qatar to Cyber

22 mercenaries in various countries to coordinate technical aspects of the illegal

23 intrusion into Plaintiffs’ email server....” Id. 7.

24 • “On February 14,2018 and February 19,2018, unlawful and unauthorized

25 connections originated from an IP address in Qatar.... These connections

26 revealed the actual location of a computer or computers accessing Plaintiff

27 BCM’s network from an IP address in Qatar.” Id.\ 115.

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1 • Qatar “converted or disposed of Plaintiff s property... by unlawfully

O accessing, or at a minimum receiving that property ... and disseminating [it] to L. 3 the media in the United States and abroad.” Id. 180.

4 Plaintiffs submitted sworn expert witness testimony in support of their request for

5 a temporary restraining order, confirming their theory that all alleged hacking activity

6 originated from Qatar:

7 Two mistakes or brief failures in the attacker’s IP address obfuscation techniques on February 14,2018 and February 19,2018 revealed another 8 foreign IP address, identified by Ankura after a detailed review of the 9 unauthorized activity associated with the Netherlands and United Kingdom IP addresses. That IP address is a Qatar source IP registered to a physical 10 location in Doha, Qatar. The nature of the Qatar IP discovery is consistent 11 with the attacker’s system configuration losing its obfuscation ability and

12 exposing the true origin of the attacker by mistake. This event is the foundation of Ankura’s conclusion that individuals located in Qatar are 13 responsible for the unauthorized activity identified in logs.

14 Dkt. 31-5 U 11; see also id. H 17 (describing event that “exposed the Qatari origin on

15 February 14, 2018 and February 19, 2018”).

16 Thus, each of Plaintiffs’ causes of action indisputably is based on a precipitating

17 act that, under Plaintiffs’ own theory, occurred outside of the United States.

18 LEGAL STANDARD

19 Where a defendant challenges the legal sufficiency of the plaintiffs jurisdictional

20 allegations pursuant to Federal Rules of Civil Procedure 12(b)(1) and (2) under the FSIA,

21 “the district court should take the plaintiff s factual allegations as true and determine

22 whether they bring the case Within any of the exceptions to immunity invoked by the

23 plaintiff.” Doe v. Holy See, 557 F.3d 1066, 1073 (9th Cir. 2009) (citing Rong v. Liaoning

24 Province Gov ’t, 452 F.3d 883, 888 (D.C. Cir. 2006)); see also Leite v. Crane Co., 749

25 F.3d 1117,1121 (9th Cir. 2014). However, the Court need not assume the truth of legal

26 conclusions merely because they are cast in the form of factual allegations, nor should it

27 accept as true allegations that are merely conclusory, unwarranted deductions of fact, or 28

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1 unreasonable inferences. Cholla Reddy Mix, Inc. v. Civish, 382 F.3d 969, 973 (9th Cir.

*> 2004); see also Bell Atl. Corp. v. Twombly, 550 U.S. 544, 557 (2007) (conclusory

allegations based on nothing more than “information and belief’ must be rejected at

4 pleading stage).

5 The FSIA provides “the sole basis” for obtaining jurisdiction over foreign

6 countries in federal or state courts. Argentine Republic v. Amerada Hess Shipping Corp.,

7 488 U.S. 428, 443 (1989). The FSIA establishes a fundamental rule that foreign

8 sovereigns are not subject to the jurisdiction of United States courts unless a specific

9 statutory exception to immunity applies. OBB Personenverkehr AG v. Sachs, 136 S. Ct.

10 390, 394 (2015) (citing Saudi Arabia v. Nelson, 507 U.S. 349, 355 (1993)); see also 28

II U.S.C. § 1604. This important rule is rooted in diplomatic and international Sensitivities

12 of the highest order. See, e.g.. Bolivarian Republic of Venezuela v. Helmerich & Payne

13 Int’l Drilling Co., 137 S. Ct. 1312, 1319 (2017) (foreign sovereign immunity “recognizes

14 the absolute independence of every sovereign authority and helps to induce each nation

15 state, as a matter of international comity, to respect the independence and dignity of every

16 other, including our own.” (quotations and citations omitted)).

17 Plaintiffs bear the threshold burden of showing that one of the FSIA’s limited

18 exceptions applies. Meadows v. Dominican Republic, 817 F.2d 517, 522-23 (9th Cir.

19 1987). The exceptions are construed narrowly, consistent with the overall statutory

20 Objective of preserving the sovereign immunity of foreign states. See, e.g., Schermerhorn

21 v. Israel, 876 F.3d 351, 358 (D.C. Cir. 2017) (“The FSIA is premised on ‘a presumption

22 of foreign sovereign immunity’ qualified only by a small number of ‘discrete and limited

23 exceptions.’” (citation omitted)); Sampson v. Fed. Republic of Germany, 250 F.3d 1145,

24 1155-56 (7th Cir. 2001) (any expansion of the FSIA exceptions bears “significantly on

25 sensitive foreign policy matters,” which “might have serious foreign policy

26 implications”). If Plaintiffs fail to meet their burden of proving one of these narrow

27 exceptions applies, the Court lacks both subject matter and personal jurisdiction over

28 Qatar. See 28 U.S.C. § 1330(a)-(b); Verlinden B. V. v. Cent. Bank of Nigeria, 461 U.S.

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I 480,489 & n.5 (1983) (FSIA provides personal jurisdiction only if subject matter

jurisdiction exists and service of process has been made in accordance with the Act).

■> ARGUMENT

4 I. This Court Lacks Subject Matter Jurisdiction over Qatar.

5 Qatar is entitled to sovereign immunity under the FSIA, precluding subject matter

6 jurisdiction in this action. Plaintiffs’ assertions that the noncommercial tort exception (28

7 U.S.C. § 1605(a)(5)) and the Commercial activity exception (28 U.S.C. § 1605(a)(2))

8 apply are unsubstantiated and do not permit them to circumvent the fundamental

9 sovereign immunity that the law provides to Qatar, like other foreign states.

10 A. The Noncommercial Tort Exception Does Not Apply.

11 Plaintiffs rely primarily on the FSIA’s noncommercial tort exception, which

12 abrogates immunity only in actions:

13 for personal injury or death, or damage to or loss of property,

14- occurring in the United States and caused by the tortious act or omission of that foreign state or of any official or employee of 15 that foreign state while acting within the scope of his office or

16 employment....

17 28 U.S.C. § 1605(a)(5) (emphasis added). Courts read this exception narrowly, consistent with the general presumption that 18

19 foreign states are entitled to sovereign immunity, and mindful that Congress’s immediate

20 objective in enacting the non-commercial exception was to “eliminate a foreign state’s immunity for traffic accidents and other torts committed in the United States, for which 21

22 liability is imposed under domestic tort law.” Amerada Hess Shipping Corp., 488 U.S. at

23 439-40 (citing H R. Rep. No. 94-1487, at 14, 20-21 (1976); S. Rep. No. 94-1310, at 14,

24 20-21 (1976) (emphasis added); U.S. Code Cong. & Admin. News 1976, pp. 6613, 6619)); see also MacArthur Area Citizens Ass’n v. Republic of Peru, 809 F.2d 918, 921 25

26 (D.C. Cir. 1987) (noting that the legislative history of the noncommercial tort exception

27 “counsels that the exception should be narrowly construed so as not to encompass the

28 farthest reaches of common law”); Asociaeion de Reclamantes v. United Mexican States,

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l 735 F.2d 1517, 1525 (D.C. Cir. 1984) (“We decline to convert [the noncommercial tort

-) exception] into a broad exception for all alleged torts that bear some relationship to the a,

0 United States”).

4 i. Plaintiffs Have Failed to Allege an Entire Tort by the State of

5 Qatar Occurring in the United States. The noncommercial tort exception “makes no mention of ‘territory outside the 6

United States’ or of ‘direct effects’ in the United States,” and thus Congress’ deliberate 7 word choice indicates that the noncommercial tort exception “covers only torts occurring 8 within the territorial jurisdiction of the United States.” Amerada Hess, 488 U.S. at 441; 9 accord Frolova v. Union of Soviet Socialist Republics, 761 F.2d 370, 379 (7th Cir. 1985). 10 The Ninth Circuit therefore instructs district courts to follow the “entire tort” rule, under 11 which plaintiffs must allege at least “one entire tort” occurring in the United States in 12

13 order to escape the immunity demanded by the FSIA. Olsen by Sheldon v. Government

of Mexico, 729 F.2d 641, 646 (9th Cir. 1984), abrogated on other grounds as stated in 14

15 Joseph v. Office of Consulate Gen■ of Nigeria, 830 F.2d 1018, 1026 (9th Cir. 1987);

Alperin v. Vatican Bank, No, C-99-04941 MMC, 2007 WL 4570674, at *9 (N.D. Cal. 16 Dec. 27,2007) (dismissing action where “plaintiffs have failed to show that ‘one entire 17 tort’ has occurred in the United States”), aff’d, 360 F. App’x 847 (9th Cir. 2009), 18

19 amended in part, 365 F- App’x 74 (9th Cir. 2010). Doe v. Federal Democratic Republic of Ethiopia, 851 F,3d 7 (D.C. Cir. 2017), is 20

21 particularly instructive and confirms that under this narrow exception, “[t]he entire tort-

including not only the injury but also the act precipitating that injury—must Occur in the 22 United States.” Id. at 10 (quoting Jerez v. Republic of Cuba, 775 F.3d 419,424 (D.C. 23 Cir. 2014)). In Doe, the D.C. Circuit held that electronic espionage launched from a • 24

25 foreign country “is a transnational tort” that does not fall within the FSIA’s

26 noncommercial tort exception. Doe, 851 F.3d at 11. Critically, “the software’s initial

27 dispatch [and] an intent to spy” were “integral aspects of the final tort which lay solely

28 abroad.” Id. “Ethiopia’s placement of the FinSpy virus on [the plaintiffs] computer,

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I although completed in the United States when [the plaintiff] opened the infected e-mail

2 attachment, began outside the United States.” Id. at 9. “The tort [the plaintiff] allege[d]

.1 thus did not occur "entirely' in the United States.” Id. at 11. 4 Here, too, Plaintiffs have failed to allege a tort occurring entirely in the United

5 States. Each of the substantive torts alleged by Plaintiffs is premised on conduct that the

6 Complaint alleges occurred outside the United States:

7 Plaintiffs’ first, second, and sixth causes of action for violations of the Computer

8 Fraud and Abuse Act, California Penal Code section 502, and the Stored

9 Communications Act all require proof of “access.” See 18 U.S.C. §§ 1030(a)(2)(C),

I0 (a)(5); Cal. Penal Code § 502; 18 U.S.C. § 2701(a); FAC ff|[ 140-161, 188-193.

II Plaintiffs’ third cause of action for a violation of California Penal Code section 496

I2 requires establishing receipt of stolen property. Cal. Penal Code § 496. Plaintiffs’ fourth

13 cause of action for invasion of privacy by intrusion upon seclusion depends on a showing

I4 of “intentional intrusion.” CACI No. 1800. Plaintiffs’ fifth cause of action for

15 conversion requires proof that the defendant “substantially interfered with the plaintiff s

16 property by knowingly or intentionally taking possession” of the property. CACI No.

17 2100. Plaintiffs’ seventh cause of action for a violation of the Digital Millennium

18 Copyright Act depends on showing that the defendant “circumvented] a technological

19 measure that effectively controls access” to a protected work. 17 U.S.C. § 1201(A); FAC

20 fflj 194-201 (alleging that defendants “illegally accessed” networks and files). Plaintiffs’

21 eighth and ninth causes of action for a violation of the California Uniform Trade Secrets

22 Act and violation of the Defend Trade Secrets Act both require proof of

23 “misappropriation,” meaning “acquisition” or “disclosure.” Cal. Civ. Code § 3426.1; 18

24 U.S.C. § 1839(b)(5).

25 Plaintiffs’ allegations and expert testimony confirm that, under their theory of

26 liability, such alleged access, receipt, intrusion, interference, taking, circumventing, and

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I misappropriation all occurred from Qatar.8 See supra at p.8 (citing Dkt. 31-5 ^ 11

Q (“individuals located in Qatar are responsible for the unauthorized activity identified in

logs")). The Complaint is crystal clear: every key alleged act—from GRA’s alleged

4 establishment of a presence in Doha, to the IP address responsible for the hack, to the

5 alleged dissemination of Broidy’s emails “abroad”—occurred outside the United States,

6 making each alleged tort indisputably transnational. Indeed, as Plaintiffs themselves

7 alleged in their Original Complaint, “[a]cCess to Plaintiffs’ personal accounts was

8 achieved by unlawful hacking and stealing of personal data”—the same conduct

9 allegedly traceable to a server in Qatar—and “[without these unlawful actions, Plaintiffs’

10 personal information would not have been made public.” OC f 108, Simply put, the

I 1 essential factual predicate for all of Plaintiffs’ substantive causes of action is the alleged

12 hacking that originated outside the United States.

13 Plaintiffs’ tenth cause of action for Civil Conspiracy cannot save their Claims. In

14 their TRO pleadings, Plaintiffs suggested that their civil conspiracy claim provided a way

15 around the “entire tort rule.” Dkt. 34 (Response ISO Plaintiffs’ TRO Application), at 2-

16 3 . However, “[ujnder California law, there is no separate and distinct cause of action for

18 8 Plaintiffs concede their failure to plead an “entire tort” within the United States, 19 alleging merely for some causes of action that “at least some instances of the unlawful [conduct] occurred in the United States.” FAC ^ 165, 171, 182. This ^insufficient to 20 establish a jurisdictional exception under the FSlA for several reasons. First, the Court is entitled to reject “conclusory allegations based on nothing more than ‘information and 21 belief at the pleading stage.” Twombly, 550 U.S. at 557. Second, even if the Court credits these unsupported allegations, it is clear on the face of the FAC that those 22 instances were merely the continuation of purported conduct allegedly originating in Qatar and “do not demonstrate an independent tort occurring entirely within the United 23 States.” Greenpeace, Inc. v. State ofFrance^ 946 F. Supp. 773. 786 (C.D. Cal. 1996) (alleged unlawful detention of plaintiffs on French military ana civil aircraft in Los 24 Angeles did not constitute entire tort in the United States, where detention was Continuation of conduct begun outside of United States jurisdiction). The Greenpeace 25 court also rejected as erroneous Plaintiffs’ interpretation of Olsen by Sheldon v. Government of Mexico, 729 F,2d 641 (9th Cir. 1984), as permitting a court to exercise 26 jurisdiction over all tort causes of action alleged in a complaint “nany ‘entire tort’ took place in the United States” because “Olsen does not extend FSIA jurisdiction to tortious 27 conduct occurring overseas.” 946 F. Supp. at 785 (emphasis added).

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I civil conspiracy.” Entm't Research Grp., Inc. v. Genesis Creative Grp., Inc., 122 F.3d

2 1211, 1228 (9th Cir. 1997).

.> Because civil conspiracy is not an independent tort, it cannot provide a basis for

4 the application of the FSIA’s noncommercial tort exception in the absence of any other

5 cause of action to which that exception is otherwise applicable.9 Cf. Santa Fe Pac.

6 Realty Corp. v. United States, 780 F. Supp. 687, 693 (E.D. Cal. 1991) (Stating that

7 because there is no separate tort of civil conspiracy under California law, if the

8 underlying tort is subject to immunity under the Federal Tort Claims Act, “the conspiracy

9 claim is likewise barred”). Since Plaintiffs’ substantive causes of action fail under the

10 “entire tort rule,” the sovereign State of Qatar “cannot be bootstrapped into tort liability

11 by the pejorative plea of conspiracy;” Applied Equip. Corp. v. Litton Saudi Arabia Ltd.,

12 869 P.2d 454,459 (Cal. 1994). Nor can it be subjected to suit and deprived of its

13 sovereign immunity based solely on that claim. Plaintiffs’ attempted bootstrapping is

14 unavailing.

15 2. Even Assuming Arguendo the Noncommercial Tort Exception

16 Applied, the Alleged Conduct Falls Within the FSIA’s Discretionary Function Rule- 17 In any event, the noncommercial tort exception only applies where, unlike here, the 18 torts alleged do not involve the exercise of discretionary functions. The FSIA’s 19 discretionary function rule is an independent, adequate ground for finding Qatar immune. 20 It provides immunity for “any claim based upon the exercise or performance or the 21 failure to exercise or perform a discretionary function regardless of whether the discretion 22 be abused.” 28 U.S.C. § 1605(a)(5)(A). 23

26 9 Plaintiffs’ conspiracy claim also derives from the same set of alleged conduct originating in Qatar that gives rise to Plaintiffs’ substantive torts ana thus is not “entirely” 27 within the United States either.

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I Courts undertake a two-part test to determine whether the discretionary function

2 exception under the FSIA applies. The first inquiry asks whether the challenged action

■* involved an element of choice or judgment, for it is clear that the discretionary function

4 exception “‘will not apply when a federal statute, regulation/or policy specifically

5 prescribes a course of action for an employee to follow.” Vickers v. United States, 228

6 F.3d 944, 949 (9th Cir. 2000) (quoting Berkovitz by Berkovitz v. United States, 486 U.S.

7 531, 536 (1988)). If choice or judgment is exercised, the second inquiry asks whether

8 that choice or judgment is of the type Congress intended to exclude from liability—that

9 is, whether the choice or judgment was one involving social, economic, or political

10 policy. See Vickers, 228 F.3d at 949.

I I Here, Plaintiffs have not alleged any “specific or mandatory” statute, regulation* or

12 policy that required any of the actions alleged in this case, all of which are purported to

13 be part of an information campaign—a clearly discretionary function. Compare Doe v.

14 Holy See, 557 F.3d 1066 (9th Cir. 2009) (claims barred as “discretionary judgments”

15 where there was no “specific and mandatory” policy governing retention of an allegedly

16 abusive priest and failure to warn others about his activities), with O’Bryan v. Holy See,

17 556 F.3d 361 (6th Cir. 2009) (discretionary function exception did not preclude claims

18 where an official 1962 legislative text imposing the highest level of secrecy on the

19 handling of clergy sexual abuse matters constituted a “policy”).

20 Plaintiffs’ allegations confirm that the type of discretionary acts at issue involved

21 policy considerations subject to the exception, including Qatar’s diplomatic relations with

22 the United States and its neighboring countries, as well as policy judgments involving

23 public relations. FAC *[flf 2-4, 14; see United States v. Varig Airlines, 467 U.S. 797, 811

24 (1984) (quoting Dalehite v. United States, 346 U.S. 15,35-36 (1953)) (“[The

25 discretionary function exception] includes determinations made... in establishing plans,

26 specifications or schedules of operations. Where there is room for policy judgment and

27 decision there is discretion.”).

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I 3. The FSIA’s Rule Barring Claims Based on Misrepresentation or Deceit Applies.

The noncommercial tort exception is inapplicable to Plaintiffs’ allegations for still

another reason: section 1605(a)(5)(B) of the FSIA explicitly excludes from the scope of 4 the noncommercial tort exception “any claim arising out of malicious prosecution, abuse 5 of process, libel, slander, misrepresentation, deceit, or interference with contractual 6 rights.” 28U.S.C. § 1605(a)(5)(B) (emphasis added). In determining whether a claim 7 “arises out of’ misrepresentation or deceit, courts look to whether the “wrongful acts 8 alleged to have caused the injury are misrepresentations,” Cabiri v. Gov 7 of Republic of 9 Ghana, 165 F.3d 193, 199 (2d Cir. 1999), or whether the claims “stem[] directly from IQ misinformation.” O’Bryan v. Holy See, 556 F.3d 361, 388 (6th Cir. 2009). Plaintiffs’ 11 hacking allegations are the essential factual predicate for all of Plaintiffs’ substantive 12 causes of action, see supra Section I.A.l , and Plaintiffs specifically allege that “the hack, 13 and the resulting” effects, were achieved through misrepresentation and deceit. FAC ^ 15 14 (alleging that Defendants’ “spearphishing campaign” included “spoofing or otherwise 15 obfuscating U.S.-assigned phone numbers to deceive,” “misappropriating trademarks,” 16 and “fraudulently ’ registering websites). As a result, the misrepresentation or deceit rule 17 applies to all of Plaintiffs’ causes of action. ■ 18 Moreover, to the extent Plaintiffs are alleging that Qatar “altered” or “doctored” 19 Plaintiffs’ personal information,10 such conduct also falls squarely within this rule. 20 “[Bjoth the Second and Ninth Circuits have dismissed claims against foreign sovereigns 21 Where the foreign sovereign allegedly provided false or misleading information” 22 constituting misrepresentation or deceit. O’Bryan, 556 F.3d at 385 (citing Cabiri, 165 23

25 10 It is unclear whether Plaintiffs are maintaining this Claim in the FAC because a comparison of the FAC to the Original Complaint reveals that Plaintiffs have deleted all 26 allegations related to alteration ana doctoring of data from the Statement of Facts. However: Plaintiffs have retained certain references to alteration and doctoring in their 27 causes of action. FAC f 152, 171, 229.

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I F.3d 193 and Kozorowski v. Russian Fed’n, 124 F.3d 211 (9th Cir. 1997)). In Cabiri, for

2 instance, the court concluded “with confidence” that Ghana enjoyed immunity for its

J)% failure to provide “full or truthful information”:—“in essence” a misrepresentation

4 claim—because “[t]he FSIA is not an enforcement mechanism for global freedom of

5 information.” Cabiri, 165 F.3d at 199-200. Similarly here, to the extent Plaintiffs’

6 claims rely on allegations of alteration or doctoring of Plaintiffs’ information, they fall

7 outside the scope of the noncommercial tort exception pursuant to 28 U.S.C.

8 § 1605(a)(5)(B).

9 B. The Commercial Activity Exception Does Not Apply.

10 Plaintiffs’ alternative theory, that the FSIA’s commercial activity exception set

11 forth in 28 U.S.C. § 1605(a)(2) applies, also fails." First, the alleged conduct by Qatar

12 on which Plaintiffs rely for the applicability of this exception does not constitute

13 commercial activity within the meaning of Section 1605(a)(2). Second, even if the

14 alleged Conduct is deemed to be commercial activity (which it is not), Plaintiffs’ claims

15 are not based on* or in connection with, that activity as required by the statutory

16 language.12

17 For the purposes of the FSIA, “[t]he commercial character of an activity shall be

18 determined by reference to the nature of the course of conduct of particular transaction or

19 act, rather than by reference to its purpose.” 28 U.S.C. § 1603(d). “[T]he issue is

21 11 Plaintiffs’ assertion in the FAC that the Court has jurisdiction under both the noncommercial tort exception and the commercial activity exception is incorrect and fatal 22 to their argument. By its plain language, the noncommercial tort exception only provides jurisdiction in “case[si... not Otherwise encompassed” by the commercial activity 23 exception. 28 U.S.C. § 1605(a)(5); De Letelier v. Republic of Chile, 748 F.2d 790, 795 (2d Cir. 1984) (noting that the language of the FSIA suggests that the commercial activity 24 exception and the noncommercial tort exception are “mutually exclusive”). 2:5 12 Plaintiffs have not specified which of the three grounds they are relying upon to claim an exception to immunity under Section 1605(a)(2). See FAC ^ 31. All three bases for 26 the exception require a showing that Plaintiffs' claims are ‘‘based upon a commercial activity’' or are “based upon ... an act... in connection with a commercial activity,” 27 which’Plaintiffs have not established here. See 28 U.S.C. § 1605(a)(2).

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I whether the particular actions that the foreign state performs (whatever the motive behind

them) are the type of actions by which a private party engages in trade and traffic or

J commerce.” Republic of Argentina v. Welt over, Inc., 504 U.S. 607, 614 (1992) 4 (quotation omitted). Plaintiffs allege that, as part of an aggressive information and

5 government relations campaign, Qatar and its alleged agents engaged in hacking and

6 dissemination of the private information of a known critic of the State’s policies. FAG

*7/ ffll 88-92. These allegations postulate conduct that is fundamentally noncommercial in

8 nature. Neither the broader information and government relations campaign nor the

9 specific “black operation” that Plaintiffs recklessly impute to Qatar is the type of action

10 by which private, commercial enterprises typically engage in trade or commerce. As

I I such, it is not commercial activity that can justify the lifting of foreign sovereign

12. immunity.

13 That Qatar allegedly entered into contracts with its agents does not transform this

14 fundamentally noncommercial conduct into commercial activity within the meaning of

15 the FSIA. See, e.g., Weltover, 504 U.S. at 614 (looking beyond existence of a contract to

16 examine whether the conduct governed by the contract was commercial in nature); MOL,

17 Inc. v. Peoples Republic of Bangladesh, 736 F.2d 1326, 1327 (9th Cir. 1984) (finding an

18 agreement by Bangladesh to constitute a sovereign, not commercial, activity because the

19 agreement was one “that only a sovereign could have made”). And the allegation that

20 Qatar’s conduct was influenced by considerations of Qatar’s economic and international

21 trade policy, FAC «[[ 31, does not make the alleged conduct commercial, but instead

2.2 simply confirms the sovereign nature of the activities alleged.

23 Even if, contrary to the test set out by the Supreme Court in Weltover, the Court

24 were to deem the contracts alleged by Plaintiffs to be commercial activity, Plaintiffs

25 alternative theory still fails. That is because Plaintiffs’ action is neither “based upon” nor

26 “iri connection with” the contracts, as those terms have been interpreted in the case law.

27 An action is “based upon” a commercial activity for the purpose of Section

28 1605(a)(2) where the action relies on the activity for “those elements of a claim that, if

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1 proven, would entitle plaintiffs to relief under their theory of the case.” Saudi Arabia v.

2 Nelson, 507 U.S. 349, 357 (1993). As the Ninth Circuit has explained, “[t]he commercial

.>•> activity relied upon ... to establish jurisdiction must be the activity upon which the

4 lawsuit is based. The focus must be solely upon those specific acts that form the basis of

5 the suit.” Am. W. Airlines, Inc. v. GPA Grp., Ltd., 877 F.2d 793, 796-97 (9th Cir. 1989)

6 (quotation* emphasis, and citation omitted); see also OBB Personenverkehr AG v. Sachs,

7 136 S. Ct. at 396 (suit not “based upon” the purchase of the rail pass because “[a]ll of

8 [plaintiff’s] claims turn[ed] on the same tragic episode in Austria,” which was the

9 “foundation” of her suit); cf Egypt v. Lasheen, 603 F.3d 1166,1171 (9th Cir. 2010)

10 (holding that plaintiffs claim was “based upon” the alleged breach of an agreement

11 because the breach determined whether the plaintiff was entitled to relief).

12 Plaintiffs’ action is not “based upon” commercial activity, because Qatar’s

13 purported contractual arrangements with third parties do not give rise to any right to relief

14 by Plaintiffs and are merely incidental to Plaintiffs’ claims. Plaintiffs are not parties to

15 the alleged contracts and do not seek to enforce them. Nor do they claim any injury

16 resulting from the contractual arrangements alone.

17 Courts have held that the phrase “in connection with” has a narrow meaning within

18 the FSIA. See Garb v. Republic of Poland, 440 F.3d 579, 587 (2d Cir. 2006). To

19 establish that an action is “in connection with” commercial activity, the acts complained

20 of must have “some ‘substantive connection’ or a ‘causal link ’ to the commercial

21 activity.” Adler v. Nigeria, 107 F.3d 720, 726 (9th Cir. 1997) (citing Fed. Ins. Co. v.

22 RichardI. Rubin & Co., 12 F.3d 1270, 1289-91 (3d Cir. 1993)). Courts have generally

23 found a substantive connection or causal link to commercial activity for the purpose of

24 Section 1605(a)(2) where the plaintiffs were a party to or received rights under a contract

25 or agreement at issue in the case. See, e.g., Odhiambo v. Kenya, 764 F.3d 31,38 (D.C.

26 Cir. 2014) (finding plaintiff s claim based upon Kenya’s breach of contract to be “in

27 connection with” the underlying commercial activity, a monetary rewards program under

28 which plaintiff claimed rights, but dismissing case on other grounds); Southway v. Cent.

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] Bank of Nigeria, 198 F.3d 1210, 1217-18 (10th Cir. 1999) (plaintiffs’ contracts with

2 defendant alleged to be part of a RICO conspiracy); Adler, 107 F.3d 720 at 726.

j•» In contrast, tortious conduct rarely satisfies the requirements of the commercial

4 activity exception. See e.g., Fed. Ins. Co. v. Richard 1. Rubin & Co., 12 F.3d 1270, 1291

5 (3d Cir. 1993) (causes of action are not substantively in connection with, or based on,

6 commercial activity where the claims are “primarily tort-based and do not include a

7 breach of contract allegation”); Doe v. Holy See, 434 F. Supp. 2d 925, 942 (D. Or. 2006)

8 (rejecting application of the commercial activity exception where “plaintiffs complaint

9 does not allege ... any ... theory whose true essence is commercial” but rather “sound[s]

10 in tort”); O’Bryan* 556 F.3d at 380 (noting that “the gravamen of plaintiffs’ claims is the

I I tortious conduct of priests” and thus allowing jurisdiction under the commercial activity

12 exception would be an inappropriate ‘‘semantic ploy”). Here, Plaintiffs are not claiming

13 breach of contract or “any theory whose true essence is commercial,” nor do Plaintiffs’

14 causes of action “stem from” the alleged commercial activity. Because any connection

15 between Plaintiffs’ claims and Qatar’s commercial contracts is so attenuated, Plaintiffs’

16 claims are not “substantively connected” to the alleged underlying commercial activity,

17 and the commercial activity exception does not apply.

18 II. Plaintiffs Cannot Establish Personal Jurisdiction over the State of Qatar.

19 The FSIA conditions personal jurisdiction over foreign states on the existence of

20 subject matter jurisdiction plus effective service. Cassirer v. Kingdom of Spain, 461 F.

21 Supp. 2d 1157, 1166 (C.D. Cal. 2006), aff'd in part and rev ’d in part, 616 F.3d 1019,

22 1037 (9th Cir. 2010) (affirming district court’s analysis of personal jurisdiction). As

23 explained above, subject matter jurisdiction is lacking because no exception to the FSIA

24 applies. See Helmerich & Payne, 137 S. Ct. at 1317 (“[A] court lacks ‘subject-matter’

25 and ‘personal’jurisdiction over a foreign sovereign unless an FSIA exception applies.”).

26 Absent a valid basis for exercising subject matter jurisdiction, personal jurisdiction is

27 likewise1 lacking.

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1 III. Qatar Is a Necessary Party and Therefore the Entire Case Must Be Dismissed.

Qatar’s sovereign immunity requires dismissal of the FAC in its entirety because

Qatar is a necessary party under Rule 19 but the State’s joinder is statutorily forbidden

4 under the FSIA. The Supreme Court has held that “where sovereign immunity is

5 asserted, and the claims of the sovereign are not frivolous, dismissal of the action must be

6 ordered where there is a potential for injury to the interests of the absent

7 sovereign.” Republic of Philippines v. Pimentel, 553 U.S. 851, 867 (2008); see also

8 Samantar v. Yousuf 560 U.S. 305,324-25 (2010) (quoting Pimentel and observing that if

9 “the entity is immune from suit under the FSIA, the district court may have to dismiss the

10 suit, regardless of whether [an individual] official is immune or not under the common

I I law”).

12 In applying Pimentel, courts look to Rule 19 of the Federal Rules of Civil

13 Procedure. Under Rule 19(a), a party is necessary (1) if the court cannot accord complete

14 relief in its absence, or (2) if, without its presence, its interests in the subject matter are

15 not protected. Fed. R. Civ. P. 19(a). Under Rule 19(b), “[i]f a person who is required to

16 be joined if feasible cannot be joined, the court must determine whether, in equity and

17 good conscience, the action should proceed among the existing parties or should be

18 dismissed.” Fed. R. Civ. P. 19(b). Here, Qatar is a necessary party under Rule 19(a), but

19 equitable considerations, which prominently include Qatar’s sovereign immunity, weigh

20 strongly against allowing the case to proceed as against the other parties.

21 First, a plain review of the FAC’s allegations reveals that the Court cannot afford

22 complete relief—if indeed any relief were warranted—in Qatar’s absence. See Fed. R.

23 Civ. P. 19(a)(1)(A). The primary relief Plaintiffs seek is an injunction to prohibit Qatar

24 from, inter alia, accessing Plaintiffs’ protected computers without authorization,

25 accessing and altering data on Plaintiffs’ computers and networks, and receiving

26 unlawfully obtained communications from Plaintiffs. See, e.g., FAC 140-148,150-

27 160, 162-167. However, an absent party cannot be bound by any such injunction, making

28 it impossible for the court to afford complete relief. Dawavendewa v. Salt River Project

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I Agric. Improvement & Power Dist., 276 F.3d 1150, 1155-56 (9th Cir. 2002) (upholding

dismissal of complaint when complete relief could not be afforded because the absent

3■> necessary party would not be bound by the requested injunctive relief); see also Friends

4 of Amador Cty. v. Salazar, No. 11-17996,2011 WL 4709883, at *2-3 (E.D. Cal. Oct. 4,

5 2011), ajf'd, 554 F. App’x 562 (9th Cir. 2014) (dismissing action against all parties when

6 the court could not provide complete relief when the requested injunction “if granted,

7 would fail to bind all absent parties who are in a position to act in direct contravention of

8 that remedy”).

9 Second, Qatar’s interests, immunities, and rights would be undermined in its

10 absence. Dawavendewa, 276 F.3d at 1155. Plaintiffs’ discovery against other parties

11 seeks materials exchanged between Qatar and its agents regarding sensitive matters of

12 foreign policy. Further, discovery against other defendants would necessarily implicate

13 Qatar’s immunity protections under the Vienna Conventions.13 If discovery continues

14 against other defendants, Qatar will be required to object to and litigate requests for

15 information that elicit its protected information or risk having its interests adjudicated

16 completely in its absence.

17 Because both Rule 19(a) considerations are fulfilled, Qatar is a required party.

18 Thus, Rule 19(b) directs the Court to further consider whether “in equity and good

19 conscience, the action should proceed among the existing parties or should be

20 dismissed.” Pimentel, 533 U.S. at 862. This analysis balances four factors: “(1) the

21 prejudice to any party or to the absent party; (2) whether relief can be shaped to lessen

22 prejudice; (3) whether an adequate remedy, even if not complete, can be awarded without

24 13 The Vienna Convention on Consular Relations provides that “[t]he archives and documents of the mission shall be inviolable at any time and wherever they may be.” 25 Vienna Convention on Diplomatic Relations, an. 24. Apr. 18, 1961,23 U.S.T. 3227, 500 U.N.T.S. 95. The Vienna Convention on Consular Relations likewise states that 26 “consular archives and documents shall be inviolable at all times and wherever they may be.” Vienna Convention on Consular Relations, art 33, Apr. 24, 1963, 21 U.S.T. 77, 596 27 U.N.T.S. 261.

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i the absent party; and (4) whether there exists an alternative forum.” Dawaveridewa, 276

F.3d at 1161-62.

.> In cases involving sovereign immunity, the Supreme Court has recognized that 4 when addressing the first factor, it must give full effect to sovereign immunity and

5 promote the “[cjomity and dignity interests” of the absent sovereign. Pimentel, 533 U.S.

6 at 866. Indeed, under the first factor, the Court should take into account the potential

7 prejudice against any party, but it must “accord proper weight to the compelling claim of

8 sovereign immunity.” Id. at 869; see also Delano Farms Co. v. Cal. Table Grape

0 Comm ’n, 623 F. Supp. 2d 1144, 1168 (E.D. Cal, 2009) (“[Wjhere the absent party cannot

10 be joined in light of sovereign immunity, ‘there may be very little need for balancing...

I I because immunity itself may be viewed as the compelling factor.”) (citing Kescoli v.

12 Babbitt, 101 F.3d 1304, 1311 (9th Cir. 1996)). Thus, Qatar’s immunity weighs in favor

13 of dismissal under Rule 19(b).

14 The other 19(b) factors also weigh in favor of dismissal. As to the second factor,

15 there is no judgment that could be tailored to eliminate prejudice to the absent sovereign,

16 so this factor weighs in favor of dismissal. Delano Farms, 623 F. Supp. 2d at 1169.

17 Indeed, any relief granted for Plaintiffs against Qatar’s alleged agents working on its

18 behalf would necessarily prejudice Qatar. The third factor, whether adequate relief can lO be awarded without the absent party, also weighs in favor of dismissal. Any judgment

20 rendered without Qatar would not be adequate, as explained above, and going forward

21 with an action that does not bind the non-parties does not further the public interest In

22 settling the dispute as a whole. Pimentel, 533 U.S. at 870-71. The fourth factor takes

23 into account whether an alternative forum exists. Even if Plaintiffs argue that the

24 dismissal of the entire action would leave them without an alternative forum and

25 therefore without an adequate remedy, this result is “contemplated under the doctrine of

26 foreign sovereign immunity,” and the potential prejudice to Plaintiffs is “outweighed by

27 prejudice to absent entities invoking sovereign immunity.” Id. at 872. Thus, under

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I Pimentel and Rule 19, the operation of the FSIA to deprive the Court of jurisdiction over

o Qatar requires dismissing not just Qatar, but the FAC as a whole.

* * *

4 Qatar’s sovereign interests in this case lie at the heart of the FSIA’s fundamental

5 purpose: protecting sovereign functions from harassment by private litigants. These

6 interests are especially important here given Qatar’s close alliance with the United States.

7 Even setting aside Qatari-U.S. relations, upholding sovereign immunity in this case—

8 where a foreign government is haled into court based only on its pursuit of a legitimate

9 diplomatic campaign—is crucial to fostering respect and reciprocal treatment of the

10 United States government in courts abroad.

II In this case, Plaintiffs seek to utilize a thinly-pled complaint, regarding an alleged

12 theft of emails, as a vehicle for broad, wide-ranging discovery into Qatar’s diplomatic,

13 political, and highly-sensitive national security-related affairs—all of which is more

14 relevant to advancing Broidy’s own lobbying efforts than to any of his hacking claims.

15 The FSIA squarely prohibits such unwarranted intrusion into intergovernmental relations. CONCLUSION 16 For the foregoing reasons, Defendant State of Qatar respectfully requests that the 17 Court uphold the fundamental purposes of the FSIA by dismissing with prejudice 18 Plaintiffs’ First Amended Complaint in its entirety. 19

20 Dated: June 27, 2018 Respectfully submitted, 21

22 COVINGTON & BURLING LLP

24 By: /si Mitchell A. Kamin MITCHELL A. KAMIN 25 Attorneys for Defendant State of Qatar 26

...... 24 MEMORANDUM OF POINTS AND AUTHORITIES'IN SUPPORT OF STATE OF QATAR'S MOTION TO DISMISS

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Mike Sitrick

From: Mike Sitrick Sent: Monday, July 23, 2018 11:1.5 AM To: Marty Baron ([email protected]) Subject FW: Qatar Attachments: Qatar_Delivers_on_lts_Promises-_6p-ed_draft.docx

Marty

Just heard from Karen de Young. Putting her in touch with a Qatari official (who she knows). Please let me know when you can if you are able to do something with this op-ed. Thank you.

Mike

From: Mike Sitrick Sent: Monday, July 23, 2018 9:42 AM To: Marty Baron ([email protected]) Subject: Qatar

Marty

Here is the op-ed that the Minister of Defense of Qatar asked that I send to you for consideration to be published. It, and the article we discussed, can be posted tonight, if you so choose. The announcement will be tomorrow. Thanks.

Mike

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Qatar Delivers on Its Promises

Doha, Qatar.

In January of this year, I joined my American counterpart Secretary James Mattis and our colleagues at the State Department for the inaugural Strategic Dialogue meeting between the State of Qatar and the United States of America. Building on the strong foundation of preexisting cooperation on a multitude of defense, trade and political issues, we signed agreements reflecting our joint commitment to combatting human trafficking, terrorism and terror financing, as well as signing agreements in the field of trade, investment and technology. All aimed at bolstering the American economy alongside advancing Qatar’s capabilities and diversifying our own economy.

Qatar made a major commitment during the inaugural meeting to support the courageous men and woman of America serving in the A1 Udeid Airbase- the largest American military airbase outside of the US. We vowed to expand on the existing infrastructure to include additional military personnel housing, entertainment and service facilities and an on-base family complex that would unite on-duty soldiers with their families while serving overseas. The expansion stems from Qatar’s longstanding commitment to support our American allies in pursuit of peace and regional stability.

Qatar welcomed American soldiers into the Airbase in 2003 when mounting regional pressures required the American Air Force to relocate their operational base. Since then, Qatar spared no effort in seeing to the success and comfort of the American men and women serving in A1 Udeid. In fact, Qatar’s capital expenditures within A1 Udeid Airbase exceeded eight billion dollars and we continue to invest in the sustainment and upkeep of the base. The multi-phase construction plan of expanding Al Udeid to include family housing and additional military accommodations is in alignment with our shared vision of a strong and sustainable bilateral security partnership between our two nations.

The strategically located Combined Air Operations Center (CAOC) functions as the nerve center of all US and ally forces’ military air campaigns in the region and beyond, considered the beating heart of the international coalition’s fight against

terrorism. The command and control Airbase currently houses over ten thousand brave American soldiers and we are looking forward to increasing those numbers in

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the years to come. Through working with our partners in the U.S. Department of Defense, we are engaged in a series of ongoing discussions on the prospect of permanent U.S. basing in A1 Udeid, similar to U.S. presence in Europe and the Pacific.

After months of joint planning and considerations with our partners in the U.S., I am pleased to announce the commencement of construction for the A1 Udeid Airbase’s expansion. To commemorate this momentous occasion, I joined the Commander of the 379,h Air Expeditionary Wing this morning to take part in the

groundbreaking ceremony at Al Udeid Airbase. We are proud of the work we do together and this undertaking creates a roadmap for future cooperation, marking our continued commitment to strengthening our partnership and propelling it to new heights.

As His Highness the Amir Sheikh Tamim Bin Hamad Al-Thani remarked during his April meeting with President Trump in Washington, Qatar and the United States enjoy a solid military partnership that is supported by the two nations’ 45 year history of cooperation and exchange. Together we are stronger and we aim to continue our work with our strategic partners to support all efforts that seek to bring

about lasting peace and prosperity.

Khalid bin Mohammed Al-Attiyah is the Qatari Deputy Prime Minister and Minister of State for Defense

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From: Sallie Hofmeister Sent: Thursday, August 9, 2018 2:40 PM To: Sallie Hofmeister Subject: QATAR DISMISSED FROM BROIDY LAWSUIT

Our firm is PR counsel for the Qatar embassy. Given your previous coverage of the legal action brought by Elliott Broidy against Qatar and others, I thought you would be interested in the court's dismissal of Qatar from the case yesterday. Attached is the court ruling. Please let me know if you have additional questions.

Sallie

.sallie Ho-jWtster

Sitrick & Company 11999 San Vicente Blvd. Penthouse Los Angeles, CA 90049 Office: 310-788-2850 Cell: 323-868-8011 [email protected]

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Case 2:18iCv-02421-JFW-E Document 198 Filed 08/08/18 Page 1 of 14 Page ID #:3494

UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA

CIVIL MINUTES -- GENERAL

Case No CV 18-2421 -JFW(Ex) Date: August 8, 2018

Title: Broidy Capital Management, LLC, et al. -v- State of Qatar, et al.

PRESENT: HONORABLE JOHN F. WALTER, UNITED STATES DISTRICT JUDGE

Shannon Reilly None Present Courtroom Deputy Court Reporter

ATTORNEYS PRESENT FOR PLAINTIFFS: ATTORNEYS PRESENT FOR DEFENDANTS: None None

PROCEEDINGS (IN CHAMBERS): ORDER GRANTING IN PART AND DENYING IN PART DEFENDANT STATE OF QATAR’S MOTION TO DISMISS PURSUANT TO RULES 12(b)(1) AND 12(b)(2) OF THE FEDERAL RULES OF CIVIL PROCEDURE [filed 6/27/18; Docket No. 112]; and

ORDER DENYING AS MOOT DEFENDANT STATE OF QATAR’S MOTION TO STAY DISCOVERY PENDING RESOLUTION OF DEFENDANT STATE OF QATAR’S MOTION TO DISMISS [filed 6/6/18; Docket No. 80]

On June 6, 2018, Defendant State of Qatar (“Qatar") filed a Motion to Stay Discovery Pending Resolution of Defendant State of Qatar’s Motion to Dismiss (“Motion to Stay”). On June 11, 2018, Plaintiffs Broidy Capital Management LLC (“Broidy Capital”) and Elliott Broidy ("Broidy”) (collectively, “Plaintiffs”) filed their Opposition. On June 15,2018, Qatar filed a Reply. On June 27, 2018, Qatar filed a Motion to Dismiss Pursuant to Rules 12(b)(1) and 12(b)(2) of the Federal Rules of Civil Procedure (“Motion to Dismiss”). On July 9,2018, Plaintiffs filed their Opposition. On July 16, 2018, Qatar filed a Reply. Pursuant to Rule 78 of the Federal Rules of Civil Procedure and Local Rule 7^15, the Court found the matter appropriate for submission on the papers without oral argument. The matter was, therefore, removed from the Court’s July 30, 2018 hearing calendar and the parties were given advance notice. After considering the moving, opposing, and reply papers, and the arguments therein, the Court rules as follows:

I. Factual and Procedural Background

Broidy is a California businessman who owns and operates California-based Broidy Capital and is a prominent critic of Qatar’s policies. In late 2017, hackers began using sophisticated

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techniques to infiltrate the computer systems and accounts belonging to Plaintiffs and certain of their associates and family members. First Amended Complaint ("FAC”), H 97-116. As a result, the hackers stole Plaintiffs' personal and professional files, correspondence, trade secrets, business plans, and other confidential and private documents. The confidential information was packaged into documents that were disseminated to journalists affiliated with various media organizations in the United States. The journalists then wrote stories that largely exploited the private and confidential information contained in the stolen documents. Forensic investigators retained by Plaintiffs, Ankura Consulting Group, LLC (“Ankura”), initially determined that the1 unauthorized access originated from Internet Protocol (“IP”) addresses in the United Kingdom and the Netherlands. However, a more thorough review of server data revealed that on February 14 and 19, 2018, the attackers accessed Broidy Capital’s server from an IP address in Doha, Qatar. Broidy claims that he became aware of Qatar’s involvement in these unlawful actions through Joel Mowbray, a longstanding acquaintance of both Defendant Nicolas D. Muzin (“Muzin”) and Broidy. FAC, 10-13 and 133-37. In a conversation with Mowbray - the contents of Which Mowbray later relayed to Broidy - Muzin told Mowbray that Qatar was "after” Mowbray and Broidy. Based on Mowbray’s conversations with Muzin (and the discovery of the IP address in Doha, Qatar), Broidy concluded that Qatar was responsible for the attack on his and Broidy Capital's servers and filed this action on March 26, 2018.

Plaintiffs' original Complaint alleged seven tort causes of action against Defendants Qatar, Muzin, and Muzin's company, Stoningtpn Strategies LLC (“Stonington”) and alleged that Plaintiffs’ computer systems were accessed without authorization from an IP address in Qatar and that their contents were subsequently disseminated to media outlets. On April 2,2018, Plaintiffs filed an Ex Parte Application for Temporary Restraining Order (“Application”) and a request for expedited discovery. On April 4, 2018, the Court entered an Order denying Plaintiffs’ Application and request for expedited discovery.

On May 24, 2018, Plaintiffs filed a First Amended Complaint, alleging causes of action for: (1) violation of the Computer Fraud and Abuse Act, 18 U.S.C. §§ 1030(a)(2)(C) and (a)(5); (2) violation of the California Comprehensive Computer Data Access and Fraud Act, California Penal Code § 502; (3) receipt and possession of stolen property in violation of California Penal Code § 496; (4) invasion of privacy by intrusion upon seclusion; (5) conversion; (6) violation of Stored Communications Act, 18 U.S.C. § 27012; (7) violation of Digital Millennium Copyright Act, 17 U S.C. § 1201 et seq:, (8) violation Of the California Uniform Trade Secrets Act, California Civil Code § 3426 et seq. \ (9) misappropriation of trade secrets in violation of the Trade Secrets Act, 18 U.S.C. § 1836 etseq.;, and (10) civil conspiracy. The First Amended Complaint added a number of factual allegations, many On information and belief, concerning the method by which the hack purportedly occurred, including that the hackers used virtual private networks to disguise their identities. FAC, fflj 97-116. Plaintiffs also alleged that the “hack” began with “phishing" emails, disguised as Gmail security alerts, sent to Broidy’s wife and his executive assistant on January 14, 2018. Id., 97-100,109-111. Plaintiffs alleged that Broidy’s wife and his executive assistant provided their usernames and passwords in response to these disguised Gmail security alerts, which an unidentified third party then used to access the email accounts and remotely control those accounts via a Russian mail service called “mail.ru." Id. Plaintiffs contend that the third party logged into Plaintiffs’ email accounts oh “thousands” of occasions, using different IP addresses. Id., 113. Although Plaintiffs also named additional defendants, including Sheikh Mohammed Bin Hamad Bin Khalifa A! Thani (“Al Thani"), Ahmed Al-Rumaihi (“AI-Rumaihi”), and

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Global Risk Advisors LLC (“Global Risk”), in their First Amended Complaint Plaintiffs did not plead any specific facts suggesting that these defendants were engaged in any unlawful hacking activity. Plaintiffs allege that Qatar is responsible for the hack based on the two logins determined to have originated from an IP address registered to a computer located somewhere in Doha, Qatar. Id., 115.

II. Legal Standard

A. Rule 12(b)(1)

The party mounting a Rule 12(b)(1) challenge to the Court’s jurisdiction may do so either on the face of the pleadings or by presenting extrinsic evidence for the Court’s consideration, See White v. Lee, 227 F,3d 1214,1242 (9th Cir. 2000) (“Rule 12(b)(1) jurisdictional attacks can be either facial Or factual”). “In a facial attack, the challenger asserts that the allegations contained in a complaint are insufficient on their face to invoke federal jurisdiction." Safe Air for Everyone v. Meyer, 373 F.3d 1035,1039 (9th Cir. 2004). In ruling on a Rule 12(b)(1) motion attacking the complaint on its face, the Court accepts the allegations of the complaint as true. See, e g., Wolfe v. Strankman, 392 F.3d 358, 362 (9th Cir. 2004). “By contrast, in a factual attack, the challenger disputes the truth of the allegations that, by themselves, would otherwise invoke federal jurisdiction.” Safe Air, 373 F.3d at 1039. “With a factual Rule 12(b)(1) attack... a court may look beyond the complaint to matters of public record without having to convert the motion into one for summary judgment, It also need not presume the truthfulness of the plaintiff[‘s] allegations.” White, 227 F.3d at 1242 (internal citation omitted); see also Thornhill Pub. Co., Inc. v. General Tel & Electronics Corp., 594 F.2d 730, 733 (9th Cir. 1979) (“Where the jurisdictional issue is separable from the merits of the case, the judge may consider the evidence presented with respect to the jurisdictional issue and rule on that issue, resolving factual disputes if necessary... '[N]o presumptive truthfulness attaches to plaintiffs allegations, and the existence of disputed material facts will not preclude the trial court from evaluating for itself the merits of jurisdictional claims.’”) (quoting Mortensen v. First Fed. Sav. & Loan Ass'n, 549 F.2d 884, 891 (9th Cir. 1977)). “However, where the jurisdictional issue and substantive issues are so intertwined that the question of jurisdiction is dependent on the resolution of factual issues going to the merits, the jurisdictional determination should await a determination of the relevant facts on either a motion going to the merits or at trial.” Augustine v. U.S., 704 F.2d 1074,1077 (9th Cir. 1983). It is the plaintiff who bears the burden of demonstrating that the Court has subject matter jurisdiction to hear the action. See Kokkonen v. Guardian Life ins. Co., 511 U.S. 375, 377 (1994); Stock West, Inc. v. Confederated Tribes, 873 F.2d 1221,1225 (9th Cir. 1989).

B. Rule 12(b)(2)

1. Procedural Considerations

Under Rule 12(b)(2) of the Federal Rules of Civil Procedure, the Court may decide a question of personal jurisdiction on the basis of affidavits and documentary evidence submitted by the parties, or may hold an evidentiary hearing on the matter. See 5A Wright & Miller, Federal Practice and Procedure, § 1351, at pp. 253-59 and n. 31-35 (2d ed. 1990); Rose v. Granite City Police Dept., 813 F. Supp. 319, 321 (E.D. Pa. 1993). Whichever procedure is used, plaintiff bears the burden of establishing that jurisdiction is proper. See Ziegler v. Indian River County, 64 F.3d

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470, 473 (9th Cir. 1995); Flynt Distributing Co. v. Harvey, 734 F.2d 1389, 1392 (9th Cir. 1984). In this case, the pleadings, declarations and documentary evidence submitted by the parties provide an adequate basis for evaluating jurisdiction. Accordingly, no evidentiary hearing is necessary.

Because this matter is being decided on the basis of affidavits and documentary evidence, Plaintiffs need only make a pfima facie showing of personal jurisdiction. See Fields v. Sedgwick Associated Risks, Ltd., 796 F.2d 299, 301 (9th Cir. 1986). All allegations in Plaintiffs’ complaint must be taken as true, to the extent not controverted by Defendant’s affidavits, and all conflicts in the evidence must be resolved in their favor. AT&T Co. v. Compagnie Bruxelles Lambert, 94 F.3d 586, 588 (9th Cir. 1996) (citing WNS, Inc. v. Farrow, 884 F.2d 200, 203 (5th Cir. 1989)). If Plaintiffs’ evidence constitutes a prima facie showing, this is adequate to support a finding of jurisdiction, "notwithstanding [a] contrary presentation by the moving party.” Wenz v. Memery Crystal, 55 F.3d 1503,1505 (10th Cir. 1995).

2. Substantive Standard

Whether a federal court can exercise personal jurisdiction over a non-resident defendant turns on two independent considerations: whether an applicable state rule or statute permits service of process oh the defendant, and whether the assertion of personal jurisdiction comports with constitutional due process principles. See Pacific Atlantic Trading Co. V. M/V Main Express, 758 F.2d 1325,1327 (9th Cir. 1985).

California’s long-arm statute extends jurisdiction to the limits of constitutional due process. See Gordy v. Daily News, L.P., 95 F.3d 829, 831 (9th Cir. 1996); Cal. Code. Civ. Proc. §410.10 (“A court of this state may exercise jurisdiction on any basis not inconsistent with the Constitution . of this state of of the United States”). Consequently, when service of process has been effected under California law, the two prongs of the jurisdictional analysis collapse into one - whether the exercise of jurisdiction over the defendant comports with due process. See Fireman's Fund Ins. Co. v. National Bank of Cooperative, 103 F.3d 888, 893 (9th Cir. 1996); Aanestad v. Beech Aircraft Corp., 521 F.2d 1298, 1300 (9th Cir. 1974).

The Fourteenth Amendment’s Due Process Clause permits courts to exercise personal jurisdiction over a defendant who has sufficient “minimum contacts” with the forum state that “maintenance of the suit does not offend traditional notions of fair play and substantial justice.” International Shoe Co. v. Washington, 326 U.S. 310, 316 (1945). There are two recognized bases for personal jurisdiction over nonresident defendants: (1) “general jurisdiction,” which arises where the defendant’s activities in the forum state are sufficiently “substantial” or “continuous and systematic” to justify the exercise of jurisdiction over him in all matters; and (2) “specific jurisdiction,” which arises when a defendant’s specific contacts with the forum have given rise to the claim in question. See Helicopteros Nacionales de Columbia S.A. v. Hall, 466 U.S. 408, 414-16 (1984). See Doe v. American Nat'IRed Cross, 11? F.3d 1048,1050-51 (9th Cir. 1997); Fields, supra, 796 F.2d at 301-02.

III. Discussion

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A. The Foreign Sovereign Immunities Act of 1976

The Foreign Sovereign Immunities Act of 1976 (“FSIA”) provides “the sole basis” for obtaining jurisdiction over foreign countries in federal or state courts:

Subject to existing international agreements to which the United States is a party at the time of enactment of this Act a foreign state shall be immune from the jurisdiction of the courts of the United States and of the States except as provided in sections 1605 and 1607 of this chapter.

28 U.S.C. § 1604; see also Argentine Republic v. Amerada Hess Shipping Corp., 488 U.S. 428, 443 (1989). The FSIA establishes a fundamental rule that foreign sovereigns are not subject to the jurisdiction of United States courts unless a specific statutory exception to immunity applies. OBB Personenverkehr AG v. Sachs, 136 S. Ct. 390, 394 (2015) (citing Saudi Arabia v. Nelson, 507 U.S. 349, 355 (1993)); see also 28 U.S.C. § 1604. This important rule is rooted in diplomatic and international sensitivities of the highest order. See, e g., Bolivarian Republic of Venezuela v. Helmerich & Payne Int'l Drilling Co., 137 S. Ct. 1312,1319 (2017) (foreign sovereign immunity "recognizes the absolute independence of every sovereign authority and helps to induce each nation state, as a matter of international comity, to respect the independence and dignity of every other, including our own”) (quotations and citations omitted). It is the plaintiff that has the burden of offering proof that one of the FSIA’s limited exemptions applies. Meadows v. Dominican Republic, 817 F.2d 517, 522-23 (9th Cir. 1987). Once the plaintiff "offers evidence that an FSIA exception to immunity applies, the party claiming immunity bears the burden of proving by a preponderance of the evidence that the exception does not apply.” Joseph v. Office of the Consulate Gen. of Nig., 830 F.2d 1018,1021 (9th Cir.1987).

The exceptions to the FSIA are construed narrowly, consistent with the overall statutory objective of preserving the sovereign immunity Of foreign states. See, e.g., Schermerhom v. Israel, 876 F.3d 351, 358 (D.C. Cir. 2017) (“The FSIA is premised on ‘a presumption of foreign sovereign immunity’ qualified only by a small number of ‘discrete and limited exceptions’”) (citation omitted); Sampson v. Fed. Republic of Germany, 250 F.3d 1145,1155-56 (7th Cir. 2001) (holding that any expansion of the FSIA exceptions bears “significantly on sensitive foreign policy matters,” which “might have serious foreign policy implications”). If one of these narrow exceptions does not apply, the Court lacks both subject matter and personal jurisdiction over the foreign state. See 28 U.S.C. § 1330(a)-(b); Verlinden B.V. v. Cent. Bank of Nigeria, 461 U.S. 480, 489 & n.5 (1983) (holding that the FSIA provides personal jurisdiction only if subject matter jurisdiction exists and service of process has been made in accordance with the Act).

B. The Court Lacks Subject Matter Jurisdiction Over Qatar.

The Court concludes that Plaintiffs’ claims against Qatar fall outside any applicable exception to the FSIA and, therefore, the Court lacks subject matter jurisdiction over Qatar. Foreign sovereign immunity under the FSIA "recognizes the absolute independence of every sovereign authority and helps to induce each nation state, as a matter of international comity, to respect the independence and dignity of every other, including our own." Hefmehch & Payne Int'l Drilling, 137 S. Ct, at 1319. In recognition of these fundamental principles, immunity of a foreign sovereign is the rule and litigation is the exception. The exceptions to immunity set forth in the

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FS1A are triggered by only a handful of narrow factual circumstances, and the Court concludes that none of those exceptions are applicable in this case.

1. The Noncommercial Tort Exception Does Not Apply.

In this case, Plaintiffs allege in the First Amended Complaint that the noncommercial tort exception applies. FAC, fl 30. Under the FSlA's noncommercial tort exception set forth at 28 U.S.C. § 1605(a)(5), immunity is only abrogated in actions:

for personal injury or death, or damage to or loss of property, occurring in the United States and caused by the tortious act or omission of that foreign state or of any official or employee of that foreign state while acting within the scope of his office or employment.

Courts read this exception narrowly, which is consistent with the general presumption that foreign states are entitled to sovereign immunity and Congress’s objective in enacting the non commercial exception, which was to “eliminate a foreign state's immunity for traffic accidents and other torts committed in the United States, for which liability is imposed under domestic tort law.” Amerada Hess, 488 U.S. at 439-40 (citing H R. Rep. No. 94-1487, at 14 and 20-21 (1976); S. Rep. No: 94-1310, at 14 and 20-21 (1976); U.S. Code Cong. & Admin. News 1976, pp. 6613 and 6619)); see also MacArthur Area Citizens Ass'n v. Republic of Peru, 809 F.2d 918, 921 (D.C. Cir. 1987) (noting that the legislative history of the noncommercial tort exception "counsels that the exception should be narrowly construed so as not to encompass the farthest reaches of common law”); Asociacion de Reclamantes v. United Mexican States, 735 F.2d 1517,1525 (D.C. Cir. 1984) (“We decline to convert [the noncommercial tort exception] into a broad exception for all alleged torts that bear some relationship to the United States”).

The noncommercial tort exception “makes no mention of ‘territory outside the United States’ or of ‘direct effects’ in the United States,’’ and, thus, Congress’ deliberate word choice indicates that the noncommercial tort exception “covers only torts occurring within the territorial jurisdiction of the United States." Amerada Hess, 488 U.S. at 441; Frolova v. Union of Soviet Socialist Republics, 761 F.2d 370, 379 (7th Cir. 1985). The Ninth Circuit follows the “entire tort” rule, and plaintiffs must allege at least “one entire tort" occurring in the United States in order to escape the immunity demanded by the FSIA. Olsen by Sheldon v. Government of Mexico, 729 F.2d 641,646 (9th Cir. 1984), abrogated on other grounds as stated in Joseph V. Office of Consulate Gen. of Nigeria, 830 F.2d 1018,1026 (9th Cir. 1987); Alperin v. Vatican Bank, 2007 WL 4570674, at *9 (N.D. Cal. Dec. 27,2007) (dismissing action where "plaintiffs have foiled to show that 'one entire tort’ has occurred in the United States"), aff’d, 360 F. App’x 847 (9th Cir. 2009), amended in part, 365 F. App’x 74 (9th Cir. 2010).

In Doe v. Federal Democratic Republic of Ethiopia, 851 F.3d 7 (D.C. Cir. 2017), the D.C. Circuit held that “[t]he entire tort - including not only the injury but also the act precipitating that injury - must occur in the United States.” Id. at 10 (quoting Jerez v. Republic of Cuba, 775 F.3d 419,424 (D.C. Cir. 2014)). The D.C. Circuit also held that electronic espionage launched from a foreign country “is a transnational tort" that does not foil within the FSlA’s noncommercial tort exception. Doe, 851 F.3d at 11. The court found that “Ethiopia’s placement of the FinSpy virus on [the plaintiffs] computer although completed in the United States when [the plaintiff] opened the

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infected e-mail attachment, began outside the United States.” Id. at 9. Therefore, the court concluded that “[t]he tort [the plaintiff] allegefd] thus did not occur ‘entirely’ in the United States.” Id. at 11.

In this case, Plaintiffs have failed to allege a tort occurring entirely in the United States.1 The substantive torts alleged by Plaintiffs in their First Amended Complaint are all premised on allegedly wrongful conduct by Qatar, its agents, or co-conspirators in gaining access to Plaintiffs’ data sewers from outside the United States, making each tort transnational.2 FAC, tf 115 (“On February 14, 2018 and February 19, 2018, unlawful and unauthorized connections originated from an IP address in Qatar. These two unlawful and unauthorized intrusions into BCM’s California email server were not masked by VPNs, even though the connections immediately before and immediately after the access were routed through VPNs, possibly because the VPN failed or because the accessing computer automatically connected to Plaintiff BCM’s network before the VPN could be activated. These connections revealed the actual location of a computer or computers accessing Plaintiff BCM’s network from an IP address in Qatar"). Consistent With the allegations in the First Amended Complaint, Plaintiffs have steadfastly claimed that their servers were accessed from outside the United States since the filing Of their original Complaint.3 See

1 Plaintiffs' reliance on their cause of action for civil conspiracy is misplaced because civil conspiracy is not an independent tort under California law and, thus, cannot provide a basis for the application of the FSIA’s noncommercial tort exception. Entmt Research Grp., Ine. v. Genesis Creative Grp., Inc., 122 F.3d 1211,1228 (9th Cir. 1997); Santa Fe Pac. Realty Corp. v. United States, 780 F. Supp. 687,693 (E.D. Cal. 1991) (holding that because there is no separate tort of civil conspiracy under California law, if the underlying tort is subject to immunity under the Federal Tort Claims Act, “the conspiracy claim is likewise barred”). Because Plaintiffs’ substantive causes of action fail under the “entire tort rule,” Qatar “cannot be bootstrapped into tort liability by the pejorative plea of conspiracy.” Applied Equip. Corp. v. Litton Saudi Arabia Ltd., 869 P.2d 454,459 (Cal. 1994).

2 The Court agrees with Qatar’s analysis that liability under Plaintiffs’ claims will require proof of access, receipt, intrusion, interference, taking, circumventing, and misappropriation of Plaintiffs’ private and confidential information that occurred in Qatar. See, Motion 12:7-13:12 and Reply, 4:3-6.

3 Plaintiffs argue in their Opposition that the alleged hack may have occurred in Vermont. However, Plaintiffs concede that they have failed to allege in their First Amended Complaint that an “entire tort” occurred within the United States, and have alleged merely that for some causes of action, “at least some instances of unlawful [conduct] occurred in the United States.” FAC, ffl] 165, 171, and 182. In addition, even if the Court considered these unsupported conclusory allegations, it is clear on the face of the First Amended Complaint that those instances were merely the continuation of purported conduct allegedly Originating in Qatar and “do not demonstrate an independent tort occurring entirely within the United States.” Greenpeace, Inc. v. State of France, 946 F.SUpp. 773, 786 (C.D. Cal. 1996) (holding that alleged unlawful detention of plaintiffs on French military and civil aircraft in Los Angeles did not constitute entire fort in the United States where detention was continuation of conduct begun outside of United States jurisdiction). The Greenpeace court also rejected as erroneous Plaintiffs’ interpretation of Olsen, 729 F.2d 641, as

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Complaint, If 73 (“Although initial forensic analysis of the BCM email server logs suggested that the unauthorized access originated from IP addresses in the United Kingdom and the Netherlands, a more thorough review of server data from February 14, 2018 revealed that the attack had originated from an IP address in Qatar. On information and belief, the IP addresses in the Netherlands and the United Kingdom originally identified were used to mask the true identity of the source of the intrusion. Plaintiff Broidy’s advanced Cyber unit was able to uncover problems with the attacker's obfuscation technique on February 14,2018, which revealed that the attack originated in Qatar”).

Even prior to filing their original Complaint, Plaintiffs were convinced based on their investigation that Qatar was responsible for the attack and that it originated in Qatar. Specifically, Ankura, the forensic experts hired by Plaintiffs, determined “that individuals located in Qatar [were] responsible for the unauthorized activity” based on two mistakes or brief failures in the attacker’s IP address obfuscation techniques on February 14, 2018 ahd February 19, 2018 Which revealed that the IP address “is a Qatar source IP registered to a physical location in Doha, Qatar.” April 2, 2018 Declaration of J. Luke Teoery (Docket No. 31-5), 11. Counsel for Plaintiffs, presented the evidence of Qatar’s unlawful attacks to the Ambassador of Qatar, Al Thani, in a letter dated March 19, 2018. In the letter counsel for Plaintiffs advised Al Thani that:

The individuals located in Qatar tied to this attack evidently believed they could , maintain anonymity by trying to disguise their malicious activity targeting Mr. Broidy’s servers. They were wrong. Mr. Broidy’s advanced cyber crime forensics unit has established Qatar's ties to this illegal hacking operation.

March 19,2018 Letter from Lee S. WoloSky to Sheikh Meshal bin Hamad Al Thani (Docket No. 31- 9). The letter concluded with this warning: "[i]f, as you have suggested, the attack on Mr. Broidy that originated in Qatar was not authorized by your government, then we expect your government to hold accountable the rogue actors in Qatar who have caused Mr. Broidy substantial damages.”4 Id.

Although Plaintiffs argue the Court should apply the noncommercial tort exception, Plaintiffs focus on the injury they sustained and ignore that the conduct precipitating that injury involved unlawful access or “hacking” Plaintiffs’ servers, which Plaintiffs’ own evidence demonstrates

' permitting a court to exercise jurisdiction over all tort causes of action alleged in a complaint “if any ‘entire tort’ took place in the United States” because “Olsen does not extend FSIA jurisdiction to tortious conduct occurring overseas.” Greenpeace, 946 F.Supp. At 785. Moreover, to the extent that Plaintiffs seek to amend their First Amended Complaint to allege that the alleged hack occurred solely within the United States, any such allegation would be directly contradictory to the allegations in their Complaint and First Amended Complaint and the declarations and other evidence in support of the temporary restraining order that the hack occurred, in whole Or in part, in Qatar.

4 The ambassadqr of Qatar never responded to the March 19, 2018 letter. Plaintiffs construed Qatar’s failure to respond as an admission that Qatar was responsible for the hack and immediately filed this action.

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originated in Qatar by actors who were acting on behalf of Qatar or who were conspiring with Qatar. In effect, Plaintiffs argue for an expanded interpretation of Section 1605(a)(5) that would allow the Court to find subject matter jurisdiction if the injury, as in this case, occurred in the United States regardless of whether the tortious conduct causing the injury occurred Within the United States. However, this interpretation has been overwhelmingly rejected by the courts that have considered the issue. See, e.g., Persinger v. Islamic Republic of Iran, 729 F.2d 835 (D.C. Cir. 1984), cert, denied469 U.S. 881 (1984); Asociacion de Reclaimantes v. United Mexican States, 735 F.2d 1517 (D C. Cir. 1984), cert, denied 470 U.S. 1051 (1985); Olsen, 729 F.2d 1984; In re the Matter of the Complaint Of Sedco, Inc., 543 F.Supp. 561 (S.D. Tex. 1982); Australian Government Aircraft Factories v. Lynne, 743 F.2d 672, 674-75 (9th Cir. 1988) (holding that injuries to pilot’s family in the United States were insufficient to support jurisdiction); McKee! v. Islamic Republic of Iran, 722 F.2d 582, 589 n. 10 (9th Cir. 1983) (“We need not decide whether § 1605(a)(5) may ever provide jurisdiction for tort actions in which the tortious act or omission occurs outside the United States. The language of § 1605(a)(5) suggests that only the injury heed occur in the United States, but the legislative history declares that, 'the tortious act or omission must occur within the jurisdiction of the United States'”) (citation omitted).

Despite Plaintiffs argument to the contrary, the entire tort rule applied by the Ninth Circuit in Olsen, 729 F.2d 641, is consistent with the application of the entire tort rule in other circuits, in Olsen, the plaintiffs asserted a single Cause of action for the wrongful death of their parents in a plane crash in California, /d. at 643. In weighing whether the noncommercial tort exception applied, the court considered a number of “potentially tortious acts and omissions occurring both in Mexico and the United States." Id. at 645-46. The court found that the plaintiffs had alleged conduct occurring entirely in the United States constituting “a single tort * the negligent piloting of the aircraft" to bring the plaintiffs’ wrongful death claim within the exception. Id. at 646. Thus, the negligent piloting that occurred in the United States was an independent and sufficient cause of the plaintiffs’ injuries - an entire tort. By holding that the plaintiffs must allege “at least one entire tort occurring in the United States” to bring a claim under the noncommercial tort exception, the Olsen court did not change the entire tort rule. Instead, the Ninth Circuit held subject matter jurisdiction could only be exercised to the extent that the plaintiffs sought relief for a tort taking place entirely within United States. Id. at 646; see also Greenpeace, 946 F. Supp. at 785 holding that “Olsen does not extend FSIA jurisdiction to tortious conduct occurring overseas” and that “only those torts which occurred entirely Within the United States support jurisdiction under section 1605(a)(5)").

The primary reason most courts have rejected a broad interpretation of Section 1605(a)(5) as argued for by Plaintiffs is the specific legislative history indicating Congress’s clear intention that the tortious act or omission as well and the injury must occur in the United States. Specifically, the legislative history reveals that:

Section 1605(a)(5) is directed primarily at the problem of traffic accidents but is cast in general terms as applying to all tort actions for money damages, not otherwise encompassed by section 1605(a)(2) relating to commercial activities. It denies immunity as to claims for personal injury or death, Or for damage to or loss of property, caused by the tortious act or omission of a foreign state or its officials or employees, acting within the scope of their authority; the tortious act or omission must occur within the jurisdiction of the United States, and must not come within one of the exceptions enumerated in the second paragraph of the subsection.

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H.R. Rep. No. 94-1487, at 20-21 (1976); S. Rep. No. 94-1310, at 20-21 (1976); U.S. Code Cong. & Admin. News 1976, p. 6619 (emphasis added). Although it is possible to construe Section 1605(a)(5) as Plaintiffs urge to mean that the tortious act or omission can occur anywhere in the world provided that the injury occurs in the United States, the Court cannot do so in light of the applicable case law and the clear legislative history to the contrary.

Moreover, Section 1605(a)(2) demonstrates that when Congress intended to provide jurisdiction for acts outside the United States which have an effect inside the United States, it said so explicitly. Section 1605(a)(2) provides that there is no immunity for a foreign state’s commercial activities outside the United States that cause “direct effect in the United States.” The legislative history reveals that this provision was adopted in accordance with the principles in the Restatement (Second) of The Foreign Relations Law of the United States, § 18 (1965), which provides that a nation has jurisdiction to attach legal consequences to conduct outside its borders that causes an effect within its borders. Significantly, there is no reference to Section 18 of the Restatement in the committee reports discussing Section 1605(a)(5).

Accordingly, the Court concludes that the claims alleged by Plaintiffs do not fall within the scope of the FSlA’s noncommercial tort exception and, therefore, this Court lacks subject matter jurisdiction.8 8

2. The Commercial Activity Exception Does Not Apply.

Plaintiffs also allege in the First Amended Complaint that the commercial activity exception applies. FAC, 31. Under the FSlA’s commercial activity exception set forth at 28 U.S.C. § 1605(a)(2), a foreign state is not immune when "the action is based upon a commercial activity carried on in the United States by the foreign state; or upon an act performed in the United States in connection with a commercial activity of the foreign state elsewhere; or upon an act outside the territory of the United States in connection with a commercial activity Of the foreign state elsewhere and that act causes a direct effect in the United States.” 28 U.S.C. § 1605(a)(2).

“Commercial activity” is defined in the FSIA as “either a regular course of commercial conduct Or a particular commercial transaction or act.” 28 U.S.C. § 1603(d). “Commercial activity 5

5 Because the Court concludes that the noncommercial tort exception does not apply, the Court need not and does not address the discretionary function rule.

8 Even Scott A. Gilmore, who argues for a broad interpretation of the noncommercial tort exception of the FSIA in his very interesting article "Suing the Surveillance States: The (Cyber) Tort Exception to the Foreign Sovereign Immunities Act," 46 Columbia Human Rights Law Review 227 (Spring 2015), acknowledges that "[sjo far, the policy debate on cybersecurity has taken it for granted that foreign states enjoy immunity for cyber attacks on U.S. targets." Given the reluctance of the other courts that have considered the issue to abandon a narrow interpretation of Section 1605(a)(5) and the growing prevalence of attacks in cyberspace, it may be an appropriate time for Congress to consider a cyber attack exception to the FSIA which, at the moment, effectively precludes civil suits in United States courts against foreign governments or entities acting on their behalf in the cyberwbrld.

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carried on in the United States by a foreign state” refers to commercial activity carried on by the foreign state that has substantial contact with the United States. 28 U.S.C. § 1603(e). "The commercial character of an activity shall be determined by reference to the nature of the course of conduct or particular transaction or act, rather than by reference to its purpose.” 28 U.S.C. § 1603(d).

In Nelson, 507 U.S. at 360, the Supreme Court held that commercial activity under the FSIA refers to “only those powers that can also be exercised by private citizens, as distinct from those powers peculiar to sovereigns." “[A] foreign state engages in commercial activity ... where it acts in the manner of a private player within the market.” Id. (quotation omitted): see also Restatement (Third) of The Foreign Relations Law of the United States, § 451 (1987) (“Under international law, a state or state instrumentality is immune from the jurisdiction of the courts of another state, except with respect to claims arising out of activities of the kind that may be carried on by private persons”). Therefore, with respect to the commercial activity exception to the FSIA, the relevant question “is whether the particular actions that the foreign state performs ... are the type of actions by which a private party engages in trade and traffic or commerce.” Argentina v. Weltover, Inc., 504 U.S. 607,614 (1992) (quotation omitted). Thus, a court does not consider whether the specific act was one that only a sovereign would actually perform. Sun v. Taiwan, 201 F.3d 1105, 1109 (9th Cir.2000). Instead, the court should consider whether the “category of conduct” is commercial in nature. Id.

“Application of the commercial activities exception is predicated on the existence of a sufficient nexus between the plaintiffs asserted cause of action and the foreign state's commercial activity." Embassy of the Arab Republic of Egypt v. Lasheen, 603 F.3d 1166,1170 (2010). “The commercial activity relied upon ... to establish jurisdiction must be the activity upon which the lawsuit is based. The focus must be solely upon those specific acts that form the basis of the suit.” Am. W. Airlines, Inc, v. GPA Group, Ltd., 877 F.2d 793, 796-97 (9th Cir. 1989) (quotation, emphasis, and citation omitted). In other words, the phrase “based upon” in § 1605(a)(2) “is read most naturally to mean those elements of a claim that, if proven, would entitle a plaintiff to relief under [its] theory of the case." Nelson, 507 U.S. at 357.

In this case, Plaintiffs allege that, as part of an aggressive information and government relations campaign, Qatar and its alleged agents engaged in hacking and dissemination of the private information of a known critic of Qatar's policies. FAC, 88-92. The Court concludes that the alleged conduct is not commercial in nature. Neither the broader information and government relations campaign nor Qatar’s Specific “black operation” is the type of action by which private, commercial enterprises typically engage in trade or commerce. Accordingly, the alleged conduct is not commercial activity that would justify the lifting of foreign sovereign immunity.

Although Plaintiffs argue that Qatar's alleged contracts with its agents are commercial because "sophisticated cyber-attack[s] and information campaign^]" are activities in which private citizens can engage (Opposition, p. 16), "the issue is whether the particular actions that the foreign state performs ... are the type of actions by which a private party engages in trade and traffic or commerce." Republic Of Argentina v. Weltover, Inc, 504 US. 607, 614 (1992). Cyber-attacks are not the "typical acts of market participants." Cicippio v. Islamic Republic of Iran, 30 F.3d 164,168 (D.C. Cir. 1994); see also Eringer v. Principality of Monaco, 2011 WL 13134271, at *6 (C.D. Cal. Aug. 23, 2011), aff'd, 533 F. App'x 703 (9th Cir. 2013); Jin v. Ministry of State Sec., 557 F. Supp.

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2d 131 (D.D.C. 2008).

Accordingly, the Court concludes that the claims alleged by Plaintiffs do not fall within the scope of the FSIA’s commercial activity exception and, therefore, this Court lacks subject matter jurisdiction.7

C. Qatar is a Necessary, But Not Indispensable Party.

1. Qatar is a Necessary Party.

Whether a party is indispensable is determined pursuant to Rule 19. “The inquiry is a practical, fact-specific one, designed to avoid the harsh results of rigid application.” Dawavendewa v. Salt River Project Agr. Imp. And Power Dist., 276 F.3d 1150, 1154 (9th Cir. 2002); see also Makah Indian Tribe v. Verity, 910 F.2d 555, 558 (9th Cir.1990). Under the Rule 19 inquiry, the court must determine: (1) whether a party is necessary to the action; and then, (2) if the party is necessary, but cannot be joined, whether the party is indispensable such that in "equity and good conscience” the suit should be dismissed. Confederated Tribes v. Lujan, 928 F.2d 1496,1498 (9th Cir. 1991) (quoting Makah Indian Tribe, 910 F.2d at 558).

In determining whether a party is necessary under Rule 19, the court considers whether, in the absence of that party, complete relief can be accorded to the plaintiff. See, e.g., Shermoen v. United States, 98? F.2d 1312,1317 (9th Cir.1992). In the alternative, the court considers whether a party claims a legally protected interest in the subject of the suit such that a decision in its absence will: (1) impair or impede its ability to protect that interest; or (2) expose an existing party to the risk of multiple or inconsistent obligations by reason of that interest. See Fed. R. Civ. P. 19(a); Makah Indian Tribe, 910 F.2d at 558. If a party satisfies either of these alternative tests, it is a necessary party to the litigation. See Clinton v. Babbitt, 180 F.3d 1081,1088 (1999).

In this case, if Plaintiffs prevail, they cannot be accorded complete relief in the absence of Qatar. Plaintiffs seek injunctive relief prohibiting all defendants, including Qatar, from accessing Plaintiffs’ protected computers without authorization, accessing and altering data on Plaintiffs’ computers and networks, and otherwise unlawfully obtaining Plaintiffs confidential information. However, because the Court lacks subject matter jurisdiction over Qatar under the FSIA, only the remaining defendants - and not Qatar - would be bound by such an injunction. Thus, under Rule 19(a)(1), Qatar is a necessary party.

2. Qatar Is Not an Indispensable Party.

After concluding that Qatar is a necessary party and immune from this action under the

7 The Court is always concerned when its decision may effectively deprive parties of a forum to pursue legitimate claims of wrongdoing. However, this is a natural result of recognizing foreign sovereign immunity as provided for in both the general rule and the explicit mandate of the FSIA. See Sachs v. Republic of Austria, 695 F.3d 1021,1026 (9th Cir. 2012) ("Any injustice that results is not greater than the mine-run of cases - jurisdiction over a foreign state is, after all, ordinarily not available").

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FSIA, the Court must next consider whether it is an indispensable party. Under Rule 19(b), if Qatar is an indispensable party, Plaintiffs’ entire action must be dismissed. A party is indispensable if in “equity and good conscience,” the court should not allow the action to proceed in its absence. Fed. R. Civ. P. 19(b); Kescoli v. Babbitt, 101 F.3d 1304,1310 (9th Cir. 1996). To make this determination, the Court must balance four factors: (1) the prejudice to any party or to the absent party; (2) whether relief can be shaped to lessen prejudice; (3) whether an adequate remedy, even if not complete, can be awarded without the absent party; and (4) whether there exists an alternative forum. Bee Kescoli, 101 F.3d at 1310. The Ninth Circuit cautions that if no alternative forum exists, courts should be “extra cautious" before dismissing the suit. Makah Indian Tribe, 910 F.2d at 560.

If the necessary party enjoys sovereign immunity from suit, some courts have noted that there may be very little need for balancing Rule 19(b) factors because immunity itself may be viewed as “one of those interests ‘compelling by themselves,’” which requires dismissing the suit. Wichita & Affiliated Tribes v. Hodel, 788 F.2d 765, 777 (D.C. Cir.1986) (quoting 3A James W. Moore et a I., Moore's Federal Practice 19.15 (1984)); see also Enterprise Mgmt. Consultants, Inc. v. United States, 883 F.2d 890, 894 (10th Cir. 1989). However, despite these out-of-circuit decisions, the Ninth Circuit has continued to apply the four part balancing test to determine whether a necessary party is also an indispensable party. See Confederated Tribes, 928 F.2d at 1499;see also SourceOne Glob. Partners, LLC v. KGK Synergize, Inc., 2009 WL 1346250, at *4 (N.D. III. May 13, 2009) (“If the inability to join a sovereign as a party had the automatic effect of nullifying the suit against other private defendants, Rule 19 would be rendered superfluous in these cases. That is not the law”) (citing Republic of Philippines v. Pimentel, 553 U.S. 851 (2008)).

In this case, despite Qatar’s argument to the contrary, it is difficult to see how Qatar or any of the remaining defendants would be prejudiced if this action proceeded without Qatar. The Court concludes that the types of “comity and dignity interests” that the Supreme Court held would make dismissal of an action under Rule 19(b) necessary - claims arising “from events of historical and political significance,” the sovereign having “ a unique interest in resolving the” claims, or a "comity interest in allowing a foreign state to use its own courts for a dispute if it has a right” - are not present in this action. See Pimentel, 553 U.S. at 866. In addition, any potential prejudice by Qatar’s absence from this action can be lessened or avoided entirely by crafting injunctive relief that would affect only the remaining defendants, and not Qatar. Jota v. Texaco, Inc., 157 F.3d 153,160 (2d Cir. 1998) (reversing a district court's dismissal of Ecuadoran residents' suit against an American oil company on the basis that the participation of the Republic of Ecuador, the current owner and operator of oil drilling equipment, was necessary to afford plaintiffs the full scope of equitable relief they sought, because plaintiffs' Claims against the American oil company could proceed even if equitable claims involving the Republic of Ecuador had been dismissed). Moreover, the Court is concerned that Plaintiffs would not have an adequate remedy if this action was dismissed because it is unlikely that an alternative forum would be available. See, e.g. Jota, 157 F.3d at 160 (“Though extreme cases might be imagined where a foreign sovereign’s interests were so legitimately affronted by the conduct of litigation in a U.S. forum that dismissal is warranted without regard to the defendant's amenability to suit in an adequate foreign forum, this case presents no such circumstances”).

D. Plaintiffs' Request to Amend Their First Amended Complaint and for Jurisdictional Discovery is Denied.

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Where a motion to dismiss is granted, a district court must decide whether to grant leave to amend. Generally, the Ninth Circuit has a liberal policy favoring amendments and, thus, leave to amend should be freely granted. See, e.g., DeSoto v. Yellow Freight System, Inc., 957 F.2d 655, 658 (9th Cir. 1992). However, a Court does not need to grant leave to amend in cases where the Court determines that permitting a plaintiff to amend would be an exercise in futility. See, e.g., Rutman Wine Co. v. E. & J. Gallo Winery, 829 F.2d 729, 738 (9th Cir. 1987) (“Denial of leave to amend is not an abuse of discretion where the pleadings before the court demonstrate that further amendment would be futile"). “Leave to amend may be denied if a court determines that allegation of Other facts consistent with the challenged pleading could not possibly cure the deficiency." Abagninin v. AMY AC Chemical Corp., 545 F.3d 733, 742 (9th Cir. 2008) (quotations and citations omitted).

In this case, Plaintiffs have already had two opportunities to allege claims that would fall within an exception to the sovereign immunity provided by the FSIA and have failed to present “non-conclusory allegations that, if supplemented with additional information, will materially affect the court’s analysis with regard to the applicability of the FSIA.” Crist v. Republic of Turkey, 995 F. Supp. 5,12 (D.D.C. 1998) (citation omitted). Although Plaintiffs have had any opportunity to conduct discovery, that discovery had failed to provide any evidence that might cure or change the Court’s analysis that it lacks subject matter jurisdiction over Qatar. In addition, Plaintiffs have failed to identify with particularity how the additional discovery they would seek could cure the jurisdictional defects in the First Amended Complaint. See Greenpeace, 946 F. Supp. at 789.

Accordingly, Plaintiffs’ request to amend their First Amended Complaint and to take jurisdictional discovery is denied.

IV. Conclusion

For all the foregoing reasons, Qatar’s Motion is GRANTED in part and DENIED in part, Qatar’s motion to dismiss pursuant to Rule 12(b)(1) and Rule 12(b)(2) is GRANTED, and Qatar is DISMISSED from this action without leave to amend.8 Qatar’s motion to dismiss the First Amended Complaint pursuant to Rule 19 is DENIED. Plaintiffs' request to amend their First Amended Complaint and to take jurisdictional discover is DENIED. In light of the Court’s dismissal of Qatar from this action, Qatar’s Motion to Stay Discovery Pending Resolution of Defendant State of Qatar's Motion to Dismiss is DENIED as moot.

IT IS SO ORDERED.

8 Because the Court lacks subject matter jurisdiction, the Court also necessarily lacks of personal jurisdiction over Qatar. See, e.g., Verlinden, 461 U.S. at 489 & n. 5 (holding that the FSIA provides personal jurisdiction only if subject matter jurisdiction exists and service of process has been made in accordance with the Act).

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From: Sallie Hofmeister Sent: Friday, August 24, 2018 11:33 AM To: Tom Hamburger Subject: Fwd: Qatar

Tom: here is a statement you can use. Please attribute accordingly. This is all the information i have at this time and thanks for reaching out.

Sent from my iPhone

Begin forwarded message:

From: Sallie Hofmeister Date: August 24,2018 at 11:31:03 AM PDT To: Sallie Hofmeister Subject: Qatar

You can attribute to the Government Communications Office for the State of Qatar:

*** Sheikh Jassim bin Abdul Aziz Al-Thani is not the minister for business and trade - he served in this role from 2010-2013. His Excellency Sheikh Ahmed bin Jassim A1 Thani has served as Minister of Economy and Commerce since June 2013. The Government of the State of Qatar cannot answer these inquires as neither Sheikh Abdul Aziz Bin Jassim bin Hamad Al-Thani nor Sheikh Jassim bin Abdul Aziz Al-Thani are members of the government. They are private citizens and inquiries about them should be directed to them. To be clear, the state of Qatar has had no dealing whatsoever with Mr. Cohen, nor has it ever been a client of his.

*.**

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