Defense Contractor Can Seek Millions From Iraq

(CN) - Iraq may owe $24 million to a contractor that says it refurbished military vehicles and weapons, and collected scrap metal for the war-torn country, a federal judge ruled.

Wye Oak Technologies filed a federal complaint in 2009, claiming it had been hired five years earlier to work with top U.S. military officials, including then Lt. Gen. David Petraeus, to organize the effort to repair damaged military equipment.

Despite numerous meetings with Iraqi officials who promised payments, however, the three invoices Wye Oak submitted that year were ignored. Wye Oak said Iraq owes it roughly $24 million.

On a December 2004 trip to Baghdad to collect payment on the invoices, Wye Oak's then president, Dale Stoffel, and another employee were assassinated. Wye Oak's employees and contractors worked in the country until nonpayment forced them to stop in 2007.

Though both parties agree that the murders remain unsolved, Iraq maintains that the FBI has not linked Stoffel's death to a known terrorist group or to the contract dispute. After taking over as president for his brother, David Stoffel allegedly received death threats.

Though Wye Oak attempted mail service on Iraq in October 2009, no signed receipt was ever returned. Wye Oak then commenced service via diplomatic channels in December 2009.

U.S. District Judge Anthony Trenga, of Alexandria, Va., refused to dismiss the suit in June 2010, nixing Iraq's claims that Wye Oak never properly attempted mail service.

"Attempted service through the embassy [did] not render service ineffective," Trenga wrote.

Wye Oak reasonably believed that Iraq's insecurity rendered service of a government official there impossible, according to the ruling.

Trenga then transferred the case to Washington, where Chief U.S. District Judge Royce Lamberth refused to dismiss it Tuesday.

"Iraq's motion to reconsider will be denied," Lamberth wrote. "The court takes no position regarding Judge Trenga's analysis. Even if Judge Trenga's analysis was incorrect and Wye Oak's mail service attempt was invalid, no injustice would result here since Iraq has received adequate process through diplomatic channels."

The court placed little stock in a declaration from an Iraqi lawyer who said that "the courts in Baghdad have been open without disruption from attacks since late 2003," that he is unaware of "any instance in which there has been an attack on any litigants or witnesses," and that, in the court where the case would be filed, "there have been approximately 225-300 hearings a week during the course of at least the past five years, all without any security incident inside the courts."

"Despite this declaration, the court finds that Wye Oak's particularized evidence regarding the 'serious risk to the[] safety' of its employees and representatives in Iraq convincing," Lamberth wrote. "Iraq is not an adequate alternative forum for this litigation."

The judge refused to dismiss the case based on interest factors.

"Weighing the public and private interests together, the court finds that only a single factor weighs in favor of dismissal: the potential need to implead a party," Lamberth wrote. "However, as Iraq will be able to proceed with its defense theory without this party's presence, the court finds that this factor alone does not outweigh the 'substantial presumption' in favor of Wye Oak's choice of forum. Accordingly, the court will not dismiss the case."

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