Arabian Support & Servs. Co. v. Textron Sys. Corp.

368 F. Supp. 3d 211
CourtDistrict Court, District of Columbia
DecidedMarch 19, 2019
DocketCivil Action No. 15-12951-PBS
StatusPublished
Cited by5 cases

This text of 368 F. Supp. 3d 211 (Arabian Support & Servs. Co. v. Textron Sys. Corp.) is published on Counsel Stack Legal Research, covering District Court, District of Columbia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Arabian Support & Servs. Co. v. Textron Sys. Corp., 368 F. Supp. 3d 211 (D.D.C. 2019).

Opinion

Saris, C.J.

*214INTRODUCTION

This is a dispute arising out of the sale of cluster bombs - also known as sensor fuzed weapons ("SFWs") - to the Saudi Arabian government. Plaintiff Arabian Support & Services Co. ("ASASCO"), a Saudi Arabian company, brings this action against Defendant Textron Systems Corporation ("Textron" or "TSC"), a Massachusetts-based defense contractor, alleging that it is entitled to six percent of the value of TSC's sale of bombs to Saudi Arabia as compensation for its efforts to help TSC secure the contract. ASASCO seeks compensation from TSC based either on the promise of additional compensation for securing the sale of the cluster bombs or on the promised opportunity to provide offset services related to the sale. In the First Amended Complaint (Docket No. 107) ("Compl."), ASASCO asserts claims of fraudulent inducement (Count I), intentional misrepresentation (Count II), negligent misrepresentation (Count III), quasi contract/implied contract/promissory estoppel (Count IV), quasi contract/unjust enrichment/quantum meruit (Count V), and violation of the Massachusetts Consumer Protection Act, M.G.L. c. 93A ("Chapter 93A") (Count VI). The parties have engaged in extensive discovery.

Before the Court is TSC's motion for summary judgment on all counts (Docket No. 190) and three motions to strike certain witness statements and opinions (Docket Nos. 194, 196, and 221). TSC also renews its motion for judgment on the pleadings (Docket No. 193).1 After hearing, the Court ALLOWS TSC's motion for summary judgment on all counts. The Court DENIES AS MOOT all three motions to strike because resolution of the motion for summary judgment does not depend on any of the disputed testimony or expert opinions. The Court also DENIES TSC's renewed motion for judgment on the pleadings on the ground the Court has ruled on the motion for summary judgment.

BACKGROUND

Unless otherwise noted, the following facts are undisputed.

I. The Beginning of the TSC-ASASCO Relationship

In order to sell munitions and other defense items to the government of Saudi Arabia, TSC needed a consultant in Saudi Arabia who could provide it with access to Saudi government officials and convince those officials to budget funding towards TSC-specific products. The relationship between TSC and ASASCO largely developed through interactions between Avedis (Avo) Boyamian, TSC's Director of Middle East Business Development, and Mansour Al-Tassan, ASASCO's President and founder. At the recommendation of General Abdullah Hamdan, considered the "father" of the modern Saudi Arabian air force, Boyamian and Al-Tassan began to discuss working together in 2001. By 2003, the men were discussing the market potential of selling cluster bombs to the Royal Saudi Air Force. In the spring of 2004, TSC began to discuss internally how best to structure a business relationship with ASASCO.

One key hurdle to the relationship was ensuring that any agreement and compensation scheme was lawful under U.S. and *215Saudi law. To that end, Robert Kemp, TSC's General Counsel, sought legal advice from the International Law Firm in Riyadh on how to structure the relationship. On March 24, 2004, he emailed attorney Yusuf Giansiracusa, asking about the permissibility of engaging a marketing consultant on a fixed monthly fee basis and the feasibility of ASASCO's serving as a service center provider in Saudi Arabia. Giansiracusa advised that "[e]mploying a marketing consultant for one or many different projects and/or products is, in general, permissible as a matter of Saudi law." Pl. Ex. 27.2 But he cautioned that if a consultant's "fixed fee is merely a commission re-styled as a fixed fee, it will not be permissible if the commission would not be permissible." Id. Giansiracusa approved of the idea of using ASASCO as a service center provider and suggested that there is "no reason in principle that Asasco [sic] couldn't act as a marketing consultant as well as a Service Centre operator under separate contracts." Id. Finally, he noted that "[a]s a lethal product, the SFW cannot be sold through an agent." Id.

On April 30, 2004, Boyamian forwarded a letter to ASASCO, which stated: "The Textron Systems' management team would appreciate your advocacy support for the [Royal Saudi Air Force] procurement of SFW. In recognition of your advocacy, TSC is prepared to appoint ASASCO as a service center for support to the [Royal Saudi Air Force] SFW program." Pl. Ex. 32.

Kemp emailed Giansiracusa again on July 8, 2004 requesting advice on the possibility of paying ASASCO via a commission for securing the sale of the bombs. Kemp wrote:

[W]e do not have a business case for a joint venture with ASASCO because of the nature of this weapon .... In addition, because of the potentially great expense of engaging a consultant on a fixed, periodic, non-contingent fee basis, we have been asked to determine whether it would be possible to engage an advocate of the type described above on a commission basis, i.e. with the amount of the payment based on the size of the ultimate order received and contingent upon the receipt of an order.
Avo [Boyamian] has identified ASASCO as the likely advocate for Textron Systems, and he anticipates that they will expect a fee in the range of four percent (4%) of a sale.

Pl. Ex. 37. On September 1, 2004, Vernon Cassin of the International Law Firm advised Kemp that the sale of munitions in Saudi Arabia is governed by the Council of Ministers Resolution No. 1275 ("Resolution 1275"). Resolution 1275 states, in relevant part:

No firm holding a contract with the Saudi Government for the supply of arms or equipment required by the Saudi Government may pay any sum as a commission to any intermediary, sales agent, representative or broker. This prohibition shall apply regardless of the nationality of the firm or the nationality of the intermediary, sales agent, representative or broker. It shall apply also whether the contract was concluded directly between the Saudi Government and the firm or through a third-party State.

Pl. Ex. 39. Cassin advised Kemp that the proposed TSC-ASASCO relationship had "a significant risk of falling within the scope of the relationships prohibited under Resolution 1275."3 Id.

*216On September 15, 2004, Boyamian emailed Al-Tassan, asking to meet in person to discuss the legal opinion provided by Cassin. When Boyamian and Al-Tassan met in Cairo a week later, Boyamian confirmed that TSC was prepared to pay ASASCO an amount equal up to five percent of the total value of the SFW contract, but that the agreement had to comply with U.S. and Saudi law. Boyamian told Al-Tassan that based on Resolution 1275, offsets were the "only way" ASASCO could receive such payments.4 Pl. Ex. 3 at 330:5-9. In 2004, both TSC and Al-Tassan believed that ASASCO could not receive a commission on the sale of SFWs under Saudi Arabian law.

II. The Consulting Agreements (2005-2009)

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Bluebook (online)
368 F. Supp. 3d 211, Counsel Stack Legal Research, https://law.counselstack.com/opinion/arabian-support-servs-co-v-textron-sys-corp-dcd-2019.