Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-04-07214/USCOURTS-caDC-04-07214-0/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 

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United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued October 28, 2005 Decided August 8, 2006

No. 04-7214

SOCIETY OF LLOYD’S,

APPELLEE

v.

GILLIAN MARY SIEMON-NETTO AND

UWE SIEMON-NETTO,

APPELLANTS

Appeal from the United States District Court

for the District of Columbia

(No. 03cv01524)

Russel H. Beatie argued the cause and filed the briefs for

appellants.

Stephen J. Jorden argued the cause and filed the brief for

appellee.

Before: SENTELLE and GARLAND, Circuit Judges, and

WILLIAMS, Senior Circuit Judge.

Opinion for the court filed by Circuit Judge GARLAND.

GARLAND, Circuit Judge: Defendants Gillian and Uwe

Siemon-Netto are two among the hundreds of “Names” whom

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1

See Society of Lloyd’s v. Reinhart, 402 F.3d 982 (10th Cir.

2005); Lipcon v. Underwriters at Lloyd’s, 148 F.3d 1285 (11th Cir.

1998); Richards v. Lloyd’s of London, 135 F.3d 1289 (9th Cir. 1998);

Haynsworth v. The Corporation, 121 F.3d 956 (5th Cir. 1997); Allen

v. Lloyd’s of London, 94 F.3d 923 (4th Cir. 1996); Shell v. R.W.

Sturge, Ltd., 55 F.3d 1227 (6th Cir. 1995); Bonny v. Soc’y of Lloyd’s,

3 F.3d 156 (7th Cir. 1993); Roby v. Corp. of Lloyd’s, 996 F.2d 1353

(2d Cir. 1993).

the Society of Lloyd’s has sued for nonpayment of reinsurance

premiums. The English High Court of Justice, Queen’s Bench

Division, entered money judgments in favor of Lloyd’s against

the Siemon-Nettos. Lloyd’s then sued to enforce those

judgments in the United States District Court for the District of

Columbia. The district court granted summary judgment in

favor of Lloyd’s, and we now affirm. 

I

Eight circuit courts have set forth the background

information that is relevant to this appeal.1

 Seeing no need to

reinvent the wheel, we take our description of the context of this

litigation from the Fifth Circuit’s clear explications in Society of

Lloyd’s v. Turner, 303 F.3d 325 (5th Cir. 2002), and

Haynsworth v. The Corporation, 121 F.3d 956 (5th Cir. 1997).

See also Society of Lloyd’s v. Reinhart, 402 F.3d 982, 988 (10th

Cir. 2005) (“Numerous courts have summarized the basic facts

applicable to the underlying litigation, and these facts are not in

dispute.”).

A

The Parliament of the United Kingdom authorized the

Society of Lloyd’s to regulate a London insurance market

through a series of Parliamentary Acts, known as the “Lloyd’s

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3

Acts,” passed between 1871 and 1982. In Haynsworth, the Fifth

Circuit explained the structure of the Lloyd’s market as follows:

Lloyd’s is a 300-year-old market in which

individual and corporate underwriters known as

“Names” underwrite insurance. The Corporation of

Lloyd’s, which is also known as the Society of

Lloyd’s, provides the building and personnel necessary

to the market’s administrative operations. The

Corporation is run by the Council of Lloyd’s, which

promulgates “Byelaws,” regulates the market, and

generally controls Lloyd’s administrative functions.

Lloyd’s does not underwrite insurance; the Names

do so by forming groups known as syndicates. Within

each syndicate, participating Names underwrite for

their own accounts and at their own risk. . . . Each

syndicate is managed and operated by a Managing

Agent, who owes the Names a contractual duty to

conduct the syndicate’s affairs with reasonable care. .

. .

Names must become members of Lloyd’s in order

to participate in the market. Prospective members are

solicited and assisted in the process of joining by

Member’s Agents, whose duties to the Names are

fiduciary in nature. Names must pass a means test to

ensure their ability to meet their underwriting

obligations, post security (typically, a letter of credit),

and personally appear in London before a

representative of the Council of Lloyd’s to

acknowledge their awareness of the various risks and

requirements of membership, and in particular the fact

that underwriting in the Lloyd’s market subjects them

to unlimited personal liability.

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Participation in the market also requires the

execution of a number of contracts and agreements, the

most important of which is the General Undertaking,

the standardized contract between Lloyd’s and the

individual Names. Names additionally must enter into

a Member’s Agent’s agreement, the contract that

defines the relationship between the Name and his

chosen Member’s Agent, and one or more Managing

Agent’s agreements, which define the relationships

between the Name and the Managing Agents of the

syndicates he wishes to join. Under the present version

of Lloyd’s Byelaws, each of these agreements must

contain clauses designating England as the forum in

which disputes are to be resolved and choosing English

law as the law governing such disputes.

Haynsworth, 121 F.3d at 958-59. 

The Turner court described the insurance crisis that led to

lawsuits like the one now before us:

In the late 1980s and early 1990s, Lloyd’s

underwriters incurred billions of dollars of losses, due

in large part to toxic tort cases. Because of the

enormity of the outstanding liabilities and because of

the Names’ inability to satisfy their underwriting

obligations, the very existence of Lloyd’s was

threatened. To ensure both the survival of the market

and the payment of policyholders’ claims, as well as to

protect the Names, Lloyd’s devised the Reconstruction

and Renewal (R&R) plan, which provided reinsurance

for all the Names’ pre-1993 liabilities from an

independent company, Equitas Reinsurance Ltd.

(“Equitas”). Equitas was funded, in part, by the

reinsurance premiums paid by the Names.

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2

As the Seventh Circuit explained, “Lloyd’s levied an assessment

(the reinsurance premium) against all the names [and then] offered a

discount on the assessment to induce the names to go along with this

plan voluntarily.” Society of Lloyd’s v. Ashenden, 233 F.3d 473, 478

(7th Cir. 2000).

. . . .

According to Lloyd’s, 95% of the Names accepted

the offer and paid the reinsurance premium.[2] The

remaining 5% . . . refused to accept the offer and

refused to pay. As Lloyd’s was contractually

authorized to do, Lloyd’s appointed a substitute agent

for the non-accepting Names. The substitute agent

signed and accepted the Equitas reinsurance contract

on behalf of the resistant Names.

Turner, 303 F.3d at 327-28. 

The Turner court further explained the genesis of the

referenced “contractual[] authoriz[ation]” that permitted Lloyd’s

to appoint a substitute agent for the recalcitrant Names:

All Names signed a General Undertaking in which

they agreed to “comply with the provisions of Lloyd’s

Acts 1871-1982, any subordinate legislation made

thereunder, [and any] requirement made or imposed by

the Council [of Lloyd’s].” Pursuant to Lloyd’s Acts

1982, Schedule 2, § (18)(b), Lloyd’s obtained the

power to appoint substitute agents when the Council

deemed it necessary. Through a series of bylaws and

resolutions under this Act, the Council was authorized

to appoint a substitute agent on behalf of Names

specifically “to execute the Reinsurance Contract for

itself and on behalf of the Members in such form as the

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council may direct . . . .” Lloyd’s Byelaw No. 20 of

1983; Byelaw No. 82 of 1995; AUA9 Resolution of

1996.

Turner, 303 F.3d at 328 n.3. 

Finally, the Fifth Circuit described the English litigation

against the recalcitrant Names, upon which the English

judgments in this case are ultimately founded:

Lloyd’s paid the Equitas premiums for those

Names, and Equitas assigned its right to collect the

premiums to Lloyd’s. In late 1996, Lloyd’s brought

collection proceedings in England against the

recalcitrant Names . . . .

The lengthy litigation that followed in England

took place in a series of test cases. First, the English

courts tried the Leighs case, [Society of Lloyd’s v.

Leighs, [1997] C.L.C. 759 (Q.B.)], to determine

whether Lloyd’s was entitled to appoint substitute

agents to bind the non-settling Names to the R&R Plan,

to enforce the Equitas contact, and to collect the

premiums. The court found for Lloyd’s, but allowed

the plaintiffs to pursue their claims of fraudulent

inducement against Lloyd’s in a separate action. The

English Court of Appeal upheld the trial court’s

decision, [see Society of Lloyd’s v. Leighs, [1997]

EWCA (Civ) 2283], and leave to appeal was denied by

the Judicial Committee of the House of Lords, the

English equivalent of the United States Supreme Court.

The Names’ claims for fraud were brought all

together in the Jaffray action, [Society of Lloyd’s v.

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Jaffray, [2000] EWHC (Comm) 51], . . . [in which] the

English courts found in favor of Lloyd’s . . . .

. . . Lloyd’s sought summary judgment against the

Names for the Equitas premium amount in the Fraser

litigation. In this litigation, the Names challenged

Lloyd’s calculation of the reinsurance premium . . . .

After lengthy review, the trial court ruled against the

Names on this claim, and the English Court of Appeal

denied leave to appeal. [See Society of Lloyd’s v.

Fraser, [1998] EWCA (Civ) 1378.]

Turner, 303 F.3d at 328-29.

B

This brings us to the present litigation. Gillian and Uwe

Siemon-Netto were among the Names who neither accepted

their settlement offers nor paid the reinsurance premium for

their outstanding underwriting liabilities. Nor did they take the

opportunity afforded by the English courts to pursue separate

fraud claims against Lloyd’s. See Society of Lloyd’s v. SiemonNetto, No. 03-1524, Mem. Op. at 3 (D.D.C. Aug. 20, 2004).

On March 24, 1997, Lloyd’s sued the Siemon-Nettos in

England for breach of their contractual obligations to pay the

reinsurance premiums. The Siemon-Nettos’ counsel entered an

appearance on their behalf. The English courts granted

summary judgment against the Siemon-Nettos in the Fraser

case, see Society of Lloyd’s v. Fraser, [1998] EWCA (Civ)

1378, and on December 21, 1998, entered individual money

judgments against Gillian Siemon-Netto for ^280,055.72 and

against Uwe Siemon-Netto for ^87,109.97, see Society of

Lloyd’s v. Gillian Mary Siemon-Netto, Judgment (J.A. 116);

Society of Lloyd’s v. Uwe Siemon-Netto, Judgment (J.A. 119).

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On July 15, 2003, Lloyd’s filed suit against the SiemonNettos in the United States District Court for the District of

Columbia, seeking recognition and enforcement of the English

judgments under the District’s Uniform Foreign Money

Judgments Recognition Act of 1995 (“Recognition Act”), D.C.

Code § 15-381 et seq. Venue was based on the Siemon-Nettos’

status as District residents and jurisdiction on diversity of

citizenship. See Compl. ¶¶ 6, 7. The Siemon-Nettos answered

Lloyd’s complaint and asserted a number of affirmative defenses

and counterclaims. Lloyd’s filed motions to strike the

affirmative defenses under Federal Rule of Civil Procedure 12(f)

and to dismiss the counterclaims pursuant to Rule 12(b). 

The district court granted Lloyd’s motions to strike and to

dismiss. See Society of Lloyd’s v. Siemon-Netto, No. 03-1524,

Order at 1 (D.D.C. Aug. 20, 2004). Lloyd’s then moved for

summary judgment on its claims for recognition and

enforcement of the English judgments, which the district court

granted. See Society of Lloyd’s v. Siemon-Netto, No. 03-1524,

Order at 1 (D.D.C. Oct. 28, 2004). The Siemon-Nettos noted a

timely appeal.

We consider the Siemon-Nettos’ affirmative defenses in

Part II and their counterclaims in Part III. Because the district

court struck the former and dismissed the latter solely on

grounds of legal insufficiency, we review those decisions de

novo. See Singletary v. District of Columbia, 351 F.3d 519, 523

(D.C. Cir. 2003); Fund for Animals, Inc. v. Norton, 322 F.3d

728, 732 (D.C. Cir. 2003). The defendants “concede that

without their affirmative defenses and counterclaims there

[would be] no genuine issues of material fact,” and that in such

event summary judgment would be appropriate. Appellants’ Br.

28.

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3

The Recognition Act is based on the Uniform Foreign MoneyJudgments Recognition Act. See UNIF.FOREIGN MONEY-JUDGMENTS

RECOGNITION ACT, 13 U.L.A. 261 (1991). The alert reader will note

that, for no apparent reason, different authorities cited in this opinion

insert a hyphen at different places (or not at all) within the phrase

“foreign money judgments.”

II

Section 15-382 of the Recognition Act provides, in

pertinent part, that “[e]xcept as provided in section 15-383,” a

“foreign-money judgment is enforceable in the same manner as

the judgment of a sister jurisdiction which is entitled to full faith

and credit.” D.C. Code § 15-382.3

 Section 15-383 contains a

list of specific exceptions, only one of which the Siemon-Nettos

claim here: 

A foreign-money judgment need not be recognized if:

. . . (3) [t]he cause of action on which the judgment is

based is repugnant to the public policy of the District

of Columbia.

D.C. Code § 15-383(b)(3). Concluding that none of the SiemonNettos’ four affirmative defenses came within that exception,

the district court struck them all as legally insufficient to bar

enforcement of the English judgments. We consider the first

defense in subpart A, and the remaining defenses in subpart B.

A

As their first affirmative defense, the Siemon-Nettos’

contend that “the foreign-money judgment[s] obtained by

Lloyd’s in the courts of the United Kingdom [are] repugnant to

the public policy of the District of Columbia and should not be

recognized because the cause of action on which [they were]

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based conflicts with the public policy of the District of

Columbia.” Am. Answer ¶ 69. The defendants list three

grounds for finding repugnancy: (1) “a contract cannot be

enforced against the party who did not knowingly assent to its

terms”; (2) “the legislation on which the foreign cause of action

was based (Lloyd’s Act 1982) and [the] Reconstruction and

Renewal Byelaw were unenforceable and voidable as a result of

Lloyd’s failure to satisfy the conditions imposed on it by the

Parliament in exchange for the legislation”; and (3) “the Lloyd’s

Act 1982 constituted an unlawful delegation of legislative and

governmental power to Lloyd’s, a private business entity.” Id.

1. As their first ground, the defendants contend that the

English judgments are repugnant to District public policy

because they enforce a contract to which they did not assent.

The contract at issue, they argue, is the Equitas reinsurance

contract. That contract was not signed by them, but rather by

the substitute agent appointed by Lloyd’s to negotiate and sign

for all Names who rejected the Reconstruction and Renewal

(R&R) Plan. Recognition of such a contract, they insist, is

repugnant to the general contract law principle that a contract

requires mutual assent. 

Section 15-383(b)(3) of the Recognition Act permits

nonrecognition of a foreign judgment only if “the cause of

action on which [it] is based” is repugnant to public policy.

D.C. Code § 15-383(b)(3) (emphasis added). A cause of action

is the legal authority (here, English contract law) that permits a

court to provide redress for a particular kind of claim (here,

Lloyd’s contention that the defendants breached their

obligations to pay the reinsurance premiums). See Trudeau v.

FTC, No. 05-5363, slip op. at 18 n.15 (D.C. Cir. July 28, 2006).

Accordingly, the dispositive question is whether the core

principles of English contract law are repugnant to the public

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4

See Reinhart, 402 F.3d at 995 (“reiterat[ing] that we must focus

on the ‘cause of action’ and the ‘claim for relief’ underlying the

English Judgment, not the differences in the bodies of law, because

slight differences between England’s and New Mexico’s laws do not

trigger the public policy exception”); Turner, 303 F.3d at 332 (noting

that the Texas Recognition Act “does not refer to the judgment itself,

but specifically to the ‘cause of action on which the judgment is

based,’” and thus that “the fact that a judgment offends Texas public

policy does not, in and of itself, permit” refusal of recognition).

5

See, e.g., Williams v. Walker-Thomas Furniture Co., 350 F.2d

445, 450 n.7 (D.C. Cir. 1965) (citing English common law in

concluding that unconscionable contracts are unenforceable under

District of Columbia law); 1 E. ALLAN FARNSWORTH, FARNSWORTH

ON CONTRACTS §§ 1.5-1.7 (3d ed. 2004) (describing the development

of American contract law from its English common law roots); see

also North Am. Graphite Corp. v. Allan, 184 F.2d 387, 389 n.1 (D.C.

Cir. 1950); Meyer v. Washington Times Co., 76 F.2d 988, 992 (D.C.

Cir. 1935).

policy of the District of Columbia, not whether any particular

application of that cause of action is repugnant.4

That question is easily answered. As the district court

noted, the Siemon-Nettos “have not suggested that English

contract law principles differ substantively from those in the

District of Columbia.” Mem. Op. at 7 (Aug. 20, 2004). Indeed,

District of Columbia contract law, like American contract law

in general, is historically derived from (and similar to) the

English common law of contract.5

 That being the case, it would

be hard to regard the latter as repugnant to the former, and no

federal court has done so. See Reinhart, 402 F.3d at 995

(holding that an English “breach of contract action” is not

“repugnant to New Mexico public policy”); Turner, 303 F.3d at

333 (holding the same with respect to Texas public policy).

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The defendants do not suggest, for example, that English

contract law principles permit parties to be bound to a contract

without their consent. Rather, they contend only that this is the

“practical effect” of the English judgments holding them

responsible for a reinsurance contract they refused to sign.

Appellant’s Br. 18. But even if we were to consider repugnancy

on such an “as applied” basis, we still could not find the

judgments repugnant to public policy, because the English court

did not bind the Siemon-Nettos to a contract to which they did

not assent. To the contrary, it held them to a contract to which

they did assent: the General Undertaking.

 When the Siemon-Nettos became Names, they (not their

agents) personally signed a “standardized contract between

Lloyd’s and the individual Names” known as the General

Undertaking. Haynsworth, 121 F.3d at 959; see J.A. 25-26

(showing the signature of Gillian Siemon-Netto on a copy of the

General Undertaking dated Sept. 9, 1986); J.A. 28-29 (showing

the signature of Uwe Siemon-Netto on a copy of the General

Undertaking dated Jan. 1, 1988). Under the General

Undertaking, the Siemon-Nettos agreed to be bound by the

Lloyd’s Acts 1871-1982, as well as by current and future

Lloyd’s Byelaws. See General Undertaking ¶ 1; Oral Arg. Tr.

at 11-12. The Lloyd’s Act 1982 specifically authorized Lloyd’s

to make Byelaws for the purpose of appointing substitute agents

to bind Names, see Lloyd’s Act, 1982, Sched. 2, § 18(b), and

such a “Substitute Agents Byelaw” was in existence when the

defendants signed the General Undertaking, see J.A. 32-33.

Thereafter, Lloyd’s issued another series of Byelaws that

authorized the appointment of “substitute agent[s] on behalf of

Names specifically ‘to execute the Reinsurance Contract for

itself and on behalf of the Members.’” Turner, 303 F.3d at 328

n.3 (citing Lloyd’s Byelaw No. 20 of 1983; Byelaw No. 82 of

1995; AUA9 Resolution of 1996).

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6

To be more precise: “Names bear unlimited liability for their

proportionate losses in each syndicate they join. Their liability is

several, not joint; no Name is ever responsible for the losses of those

fellow Names who comprise the syndicate.” Roby, 996 F.2d at 1357.

7

See Siemon-Netto, Mem. Op. at 13 (Aug. 20, 2004) (“Unequal

bargaining power is not a factor in a case like this one, where the

Siemon-Nettos, as investors, had the free choice to become Names or

not.”); see also Reinhart, 402 F.3d at 996-97 (holding that binding the

Names to the Equitas reinsurance contract did not violate New Mexico

public policy because (inter alia) the Names were “highly

sophisticated investor[s] who had to pass a ‘means’ test,” the Equitas

contract “was the implementation of specific provisions to address the

unlimited liability undertaken by all Names pursuant to the General

Undertaking Agreement’s broad powers,” and the Names were “not

in a weaker bargaining position nor did Lloyd’s compel [their]

investment”); cf. Ashenden, 233 F.3d at 480-81 (ruling that “the

English court[’s] holding that Lloyd’s was authorized by its contract

with the names to appoint agents to negotiate a contract that would

bind the names without the names’ consent. . . . is not so unreasonable

that it could be thought a denial of international due process even if

international due process had a substantive component”).

It was no doubt risky for the defendants to agree to be

bound by future Byelaws in this way. But the General

Undertaking was no contract of adhesion. The Siemon-Nettos

were investors who qualified for status as Lloyd’s Names under

a set of stringent criteria, and who presumably thought the

upside potential was worth the downside risk (including the

express risk of unlimited personal liability6

). Regardless of

whether we would reach the same disposition under District of

Columbia contract law, we cannot say that the English courts’

decision to bind the defendants under these circumstances is

repugnant to the public policy of this jurisdiction.7

The defendants press upon us the case of Matusevitch v.

Telnikoff, 877 F. Supp. 1 (D.D.C. 1995), aff’d, No. 97-7138,

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8

Among the differences found by the Maryland court were that,

in contrast to Maryland law, under English law: “it is unnecessary for

the plaintiff to establish fault, either in the form of conscious

wrongdoing or negligence”; “defamatory statements are presumed to

1998 WL 388800 (D.C. Cir. May 5, 1998), in which a district

court declined to recognize an English libel judgment on the

ground that enforcement would be repugnant to the public

policy of the State of Maryland and of the United States. 877 F.

Supp. at 4. But in Matusevitch, unlike this case, the district

court noted substantial differences between a cause of action for

libel in England and in the United States, including differences

in both substantive law and burdens of proof. Id. at 4-6. Indeed,

the subsequent history of that case, which neither the SiemonNettos nor Lloyd’s mention, only sharpens the point. On appeal,

this Court certified to the Maryland Court of Appeals the

question of whether enforcement of the English judgment would

be repugnant to the public policy of Maryland. See Matusevitch,

1998 WL 388800, at *1. We then affirmed the district court’s

judgment after receiving the following answer:

A comparison of English and present Maryland

defamation law does not simply disclose a difference

in one or two legal principles. Instead, present

Maryland defamation law is totally different from

English defamation law in virtually every significant

respect. Moreover, the differences are rooted in

historic and fundamental public policy differences

concerning freedom of the press and speech.

Telnikoff v. Matusevitch, 702 A.2d 230, 248 (Md. 1997)

(internal citations omitted); see Matusevitch, 1998 WL 388800,

at *1. The defendants have noted no similarly substantial

differences between England and the District of Columbia with

respect to the law of contract.8

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15

be false unless a defendant proves them to be true”; “a qualified

privilege can be overcome without establishing that the defendant

actually knew that the publication was false or acted with reckless

disregard”; a statement is presumed to be “one of fact, and the burden

is on the defendant to prove ‘fair comment’”; and there is “no special

protection for defamation actions arising from critiques of public

figures or public officials, [or] involving what American courts would

characterize as core political discourse.” Telnikoff, 702 A.2d at 247-

48.

2. The defendants’ second ground for claiming that the

English judgments are repugnant to District policy begins with

their contention that the legislation (the Lloyd’s Act 1982) that

permitted Lloyd’s to promulgate Byelaws -- particularly the

Byelaws that authorized Lloyd’s to appoint substitute agents to

execute the reinsurance contract on behalf of the Names -- also

imposed certain conditions on Lloyd’s (i.e., the provision of

better quality information to Names about the status of the

Lloyd’s market). See Am. Answer ¶¶ 40-43. The defendants

argue that, because Lloyd’s assertedly failed to satisfy those

conditions, the Byelaws passed pursuant to that legislation

“were unenforceable and voidable.” Id. ¶ 69.

But the question of whether the Lloyd’s Byelaws were valid

under English law is itself a question of English -- not District

of Columbia -- law. And it is a question that the English courts

have already answered, concluding that the pertinent Byelaws

are indeed valid. See Society of Lloyd’s v. Leighs, [1997] C.L.C.

759 (Q.B.). We cannot reconsider that decision here. See

Medellin v. Dretke, 544 U.S. 660, 670 (2005) (“[W]here ‘comity

of this nation’ calls for recognition of a judgment rendered

abroad, ‘the merits of the case should not . . . be tried afresh . .

. upon the mere assertion . . . that the judgment was erroneous in

law or in fact.’” (quoting Hilton v. Guyot, 159 U.S. 113, 202-03

(1895)). Certainly the defendants have pointed to nothing about

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9

As we have further explained:

The act of state doctrine . . . . is applicable when “the relief

sought or the defense interposed would [require] a court in

the United States to declare invalid the official act of a

foreign sovereign performed within” its boundaries. W.S.

Kirkpatrick & Co., Inc. v. Envtl. Tectonics Corp., 493 U.S.

400, 405 (1990). When it does apply, the doctrine serves as

“‘a rule of decision for the courts of this country,’” id.

(quoting Ricaud v. Am. Metal Co., 246 U.S. 304, 310

(1918)), which requires that, “in the process of deciding [a

case], the acts of foreign sovereigns taken within their own

jurisdictions shall be deemed valid,” id. at 409. 

World Wide Minerals, 296 F.3d at 1164-65. 

the principles applied by the English courts in reaching that

decision that would render repugnant the contractual cause of

action on which Lloyd’s judgments are based.

3. The third ground advanced by the defendants is their

claim that “the Lloyd’s Act 1982 [itself] constituted an unlawful

delegation of legislative and governmental power to Lloyd’s, a

private business entity.” Am. Answer ¶ 69. But whether the

Lloyd’s Act constituted an “unlawful delegation” under English

law is again a question that only the English courts can answer;

in fact, it is a question that the act of state doctrine bars us from

even asking. See World Wide Minerals, Ltd. v. Republic of

Kazakhstan, 296 F.3d 1154, 1164 (D.C. Cir. 2002) (noting that

the “act of state doctrine ‘precludes the courts of this country

from inquiring into the validity of the public acts a recognized

foreign sovereign power committed within its own territory’”

(quoting Banco Nacional de Cuba v. Sabbatino, 376 U.S. 398,

401 (1964)).9

 Moreover, there is once again nothing in the

defendants’ argument to support the only ground the defendants

advance for nonrecognition of Lloyd’s English judgments: that

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17

the contractual cause of action on which those judgments are

based is repugnant to District policy.

B

The district court struck the defendants’ second, third, and

fourth affirmative defenses as well as the first. Because the

defendants do not appeal the loss of their second defense, see

Appellants’ Br. 14 n.10, we address only the third and fourth.

The third affirmative defense states: “Lloyd’s does not

have standing to enforce the judgments” because “neither

Lloyd’s nor Equitas paid the duty required by English law upon

the transfer of the supposed R&R debt” from Equitas to Lloyd’s.

Am. Answer ¶¶ 91, 93. The defendants contend that any debts

they owed for nonpayment of reinsurance premiums were owed

to Equitas, not Lloyd’s. They further assert that, because the

transfer tax required to assign those debts to Lloyd’s has never

been paid, the assignment is invalid under English law and

Lloyd’s cannot enforce the judgments against them.

As the district court correctly noted, “this challenge to the

validity of the assignment comes too late and is made in the

wrong court.” Mem. Op. at 9 (Aug. 20, 2004). The English

judgments that Lloyd’s seeks to enforce were entered in Lloyd’s

own name as plaintiff, not in the name of Equitas. They order

the Siemon-Nettos to “pay the Plaintiff,” not to pay Equitas.

Society of Lloyd’s v. Gillian Mary Siemon-Netto, Judgment (J.A.

116); Society of Lloyd’s v. Uwe Siemon-Netto, Judgment (J.A.

119). Moreover, the English complaints on which those

judgments were entered expressly asserted that Equitas had

assigned its rights to the Siemon-Nettos’ premiums to Lloyd’s,

and that the premiums were “due and owing from the

Defendant[s] to Lloyd’s.” E.g., Society of Lloyd’s v. Gillian

Mary Siemon-Netto, Points of Claim ¶ 10 (J.A. 35). Proof of

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that assignment was thus a part of Lloyd’s English cause of

action and, as we have noted, that cause of action is not

repugnant to the law of the District. Nor have the defendants

asserted anything about English principles of assignment of

claims that would make it so.

Finally, the defendants’ fourth affirmative defense merely

states that “the amount alleged by plaintiff as due and owing is

incorrect.” Am. Answer ¶ 96. The district court struck this

defense on the ground that it did “not even arguably fit into any

of the specific exceptions enumerated in the [Recognition Act]

and appear[ed], rather, to be an improper attempt to relitigate the

merits of the underlying claims.” Mem. Op. at 8-9 (Aug. 20,

2004). The court was obviously correct. The amount due and

owing was an element of Lloyd’s cause of action in contract,

and as there is nothing repugnant about that cause of action, the

fourth affirmative defense does not state a ground for failing to

recognize it.

In sum, we conclude that the district court committed no

error in striking any of the Siemon-Nettos’ affirmative defenses

under Federal Rule of Civil Procedure 12(f). 

III

The defendants’ answer also asserts four counterclaims

against Lloyd’s: “negligent misrepresentation,” Countercls. ¶

152; “fraud,” id. ¶ 155; “consumer fraud,” id. ¶ 159; and “breach

of fiduciary duty,” id. ¶ 165. Each asserts, in haec verba, that

Lloyd’s failed to disclose and/or concealed “the extent of the

losses generated by the asbestos and environmental claims,”

“the financial condition of the syndicates,” and Lloyd’s

“accounting and financial controls for the syndicates.” Id. ¶¶

152, 155, 159, 165. The district court dismissed the

counterclaims on the ground that the Siemon-Nettos had agreed,

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10See, e.g., Haynsworth, 121 F.3d at 961, 970 (dismissing, on the

basis of the forum selection clause, suits against Lloyd’s by Names

alleging fraud, breach of fiduciary duty, and violations of the Texas

consumer fraud statute); Bonny, 3 F.3d at 157, 159 (same for suits

alleging, inter alia, fraud, negligence, and breach of duty); Roby, 996

F.2d at 1358, 1366 (same for suits alleging violations of federal

securities and racketeering laws).

by contract, that only English courts could hear such claims.

See Mem. Op. at 10-15 (Aug. 20, 2004). We concur.

The General Undertaking, personally signed by each of the

Siemon-Nettos, contains the following forum selection clause:

Each party hereto irrevocably agrees that the courts of

England shall have exclusive jurisdiction to settle any

dispute and/or controversy of whatsoever nature arising

out of or relating to the Member’s membership of,

and/or underwriting of insurance business at, Lloyd’s

and that accordingly any suit, action or proceeding . .

. arising out of or relating to such matters shall be

brought in such courts . . . .”

General Undertaking § 2.2 (J.A. 25). Eight circuits have found

the clause enforceable, see supra note 1 (citing cases), and the

defendants do not contest its validity here, see Appellant’s Br.

26.

The forum selection clause provides that the English courts

shall have exclusive jurisdiction over any dispute “of

whatsoever nature arising out of or relating to the Member’s

membership of, and/or underwriting of insurance business at,

Lloyd’s.” We perceive no room for doubt that the defendants’

misrepresentation, fraud, consumer fraud, and breach of

fiduciary duty counterclaims all fall well within those confines.10

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11The LATF deed contains a choice of law clause (providing that

disputes shall be governed by New York law), but does not contain a

forum selection clause.

As the district court noted, the “Siemon-Nettos’ central claim

[is] that they would not have become Names or renewed their

memberships if they had known the truth about Lloyd’s losses.”

Mem. Op. at 11 (Aug. 20, 2004). Indeed, at oral argument, the

defendants conceded that their counterclaims are compulsory

under the Federal Rules, see Oral Arg. Tr. at 15-16, which by

definition means that they “arise[] out of the transaction or

occurrence that is the subject matter of the opposing party’s

claim,” FED. R. CIV. P. 13(a). The subject matter of that claim

is the debt owed by the defendants arising out of their

membership in, and underwriting of insurance business at,

Lloyd’s.

The defendants seek to avoid the effect of the General

Undertaking’s forum selection clause by contending that their

counterclaims do not relate to their membership in Lloyd’s, but

rather to “Lloyd’s handling of” the Lloyd’s American Trust

Funds (LATF) -- the funds into which all insurance premiums

paid in U.S. dollars are deposited. Appellant’s Br. 25. But that

is simply not the case. Each of the counterclaims expressly

“repeat[s] and reallege[s],” Countercls. ¶¶ 151, 154, 157, 164,

the allegation of the defendants’ second affirmative defense that:

“Defendants would not have become Names and would not have

renewed their memberships if they had known about the losses

attributable to asbestos claims, the financial condition of the

syndicates, or the lack of proper accounting and financial

controls for the syndicates.” Id. ¶ 85 (emphasis added). 

In support of their contention that this case should be

governed by the LATF deed, rather than the General

Undertaking,11 the defendants cite In re Lloyd’s American Trust

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12See Ashenden, 233 F.3d at 476 (“Any suggestion that [the

English] system of courts does not provide impartial tribunals or

procedures compatible with the requirements of due process of law

borders on the risible.” (internal quotation marks omitted));

Fund Litigation, 954 F. Supp 656 (S.D.N.Y. 1997). That case

involved claims brought by Names against Citibank, the trustee

of the LATF. There, the court denied Citibank’s motion to

dismiss the case based on the forum selection clause of the

General Undertaking. The court held that, because Citibank was

neither a party to the General Undertaking nor “closely related”

to one, it could not rely upon the clause. 954 F. Supp. at 670.

But as the district court in this case correctly noted, unlike

Citibank, Lloyd’s “is more than ‘closely related’ to a signatory

to the [General Undertaking] -- it is itself a signatory.” Mem.

Op. at 12 (Aug. 20, 2004). Accordingly, “it may invoke the

forum selection clause to insist upon litigation in the United

Kingdom.” Id.

IV

At oral argument, counsel for the defendants made clear

that the underlying basis of their defense is their belief that the

English courts are biased in favor of Lloyd’s: that is, that those

courts have a “bias and prejudice in favor of Lloyd’s under

circumstances which make it impossible for a Name to win.”

Oral Arg. Tr. at 7. The Recognition Act includes an exception

for this kind of defense to a foreign judgment, but it requires

proof that the “judgment was rendered under a system that does

not provide impartial tribunals or procedures compatible with

the requirements of due process of law.” D.C. Code § 15-

383(a)(1). 

The defendants do not assert that English courts fall within

that category and could not prove it if they did.12 Indeed, the

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Haynsworth, 121 F.3d at 967 (noting that England is “a forum that

American courts repeatedly have recognized to be fair and impartial”);

Riley v. Kingsley Underwriting Agencies, Ltd., 969 F.2d 953, 958

(10th Cir. 1992) (holding that “the courts of England are fair and

neutral forums”); British Midland Airways Ltd. v. Int’l Travel, Inc.,

497 F.2d 869, 871 (9th Cir. 1974) (“United States courts which have

inherited major portions of their judicial traditions and procedure from

the United Kingdom are hardly in a position to call the Queen’s Bench

a kangaroo court.”).

Siemon-Nettos’ only evidence of the English courts’ asserted

“bias and prejudice” is that other Names in their position --

whose arguments they believe had merit -- lost their cases in

those courts. But the fact that the Names’ arguments did not

prevail hardly establishes the partiality of the courts that heard

them. Indeed, if it did, the fact that Names have lost similar

(albeit not identical) cases in eight United States Courts of

Appeals, see supra note 1, would require us to reach the same

conclusion regarding American courts.

The judgment of the district court is

affirmed.

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