Case of the Day: Broidy Capital Management v. Benomar

Today’s case of the day, Broidy Capital Management LLC v. Benomar (2d Cir. 2019), is at the intersection of cloak-and-dagger intrigue, international law, and the Trump era. Elliott Broidy was the deputy finance chair of the Republican National Committee. He alleged that the State of Qatar and its agents had hacked his computers, stolen trade secrets and personal information, and passed it to the media. Qatar’s motive, according to Broidy, was to “discredit Broidy and curtail his influence,” because he was “an influential detractor responsible for President Trump’s public criticism of Qatar in June 2017.” Broidy sued Jamal Benomar in the Southern District of New York, alleging that he was a “secret Qatari agent,” and that he “had been paid by Qatar to participate in the alleged Qatari hacking scheme.” Benomar, a Moroccan national, had been a United Nations official until July 1, 2017, and he had served as a diplomat in Morocco’s mission to the United Nations since November 1, 2017. But Morocco did not seek US accreditation until mid-2018. After Broidy filed his lawsuit, the United States did accredit Benomar as a diplomat, but Broidy asserted the suit could proceed anyway, because it arose out of Benomar’s commercial or professional activity, namely, “reviewing and organizing the hacked materials and planning their dissemination to the media.” The District Court dismissed the action, and Broidy appealed.

The first question was the burden of proof on jurisdiction. In FSIA cases some courts apply a burden-shifting framework, where the plaintiff has the initial to prove that an exception to immunity applies but the defendant then has the ultimate burden of persuasion on the issue. The parties, and the US as amicus curiae, argued about the correctness of those cases, but the court held that that question was beside the point, since there was no good reason to apply the FSIA rule in the Vienna Convention context. “Accordingly, where a defendant has demonstrated diplomatic status, we hold that plaintiffs bear the burden of proving by a preponderance of the evidence that an exception to diplomatic immunity applies and that jurisdiction therefore exists.”

On the merits, the court found that Broidy had failed to meet his burden to prove that Benomar had engaged in any commercial activity. Although the court didn’t take this approach, I think it might also have asked whether, assuming Benomar had done what Broidy alleged, his actions were commercial, though I don’t know the answer to that question. Broidy claimed he should have been entitled to take jurisdictional discovery, but the court noted that Broidy had failed to take up the district court’s offer to submit particular jurisdictional questions he wanted asked. In any event, the court noted, you have to balance an asserted need for jurisdictional discovery against the policy of the Vienna Convention and the Diplomatic Relations Act, which is not just to provide a substantive immunity from liability but an immunity from suit.

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