FSIA Immunity Determinations at Trial?

In the recent FSIA case of Funnekotter v. Agricultural Development Bank of Zimbabwe, No. 13 CIV. 1917 CM, 2013 WL 6091616 (S.D.N.Y. Nov. 15, 2013), the district court stated that “where the evidence on the [FSIA] jurisdictional issue overlaps with the evidence on the merits, the Court has the discretion even to ‘proceed to trial and make its jurisdictional ruling at the close of the evidence.’”  Id. at *4, quoting Alliance for Envtl. Renewal, Inc. v. Pyramid Crossgates Co., 436 F.3d 82, 88 (2d Cir. 2006).  The notion that a foreign sovereign should be forced to trial prior to an immunity determination conflicts with FSIA precedent.

A district court must resolve the question of FSIA immunity at the “threshold” of every action.  Verlinden B.V. v. Cent. Bank of Nigeria, 461 U.S. 480, 493-94 (1983); see also Republic of Austria v. Altmann, 541 U.S. 677, 691 (2004).  An early resolution of immunity is essential, since a sovereign enjoys “‘an immunity from trial and the attendant burdens of litigation, and not just a defense to liability on the merits.’”  Phoenix Consulting Inc. v. Republic of Angola, 216 F.3d 36, 39 (D.C. Cir. 2000), quoting Foremost-McKesson, Inc. v. Islamic Republic of Iran, 905 F.2d 438, 443 (D.C. Cir. 1990).

That an FSIA immunity issue may overlap with evidence on the merits does not change the equation.  Courts routinely resolve factual disputes when addressing jurisdictional challenges under the FSIA, including with regard to issues intertwined with the merits.  See, e.g., Moran v. Kingdom of Saudi Arabia, 27 F.3d 169, 173-74 (5th Cir. 1994) (affirming district court’s resolution of disputed facts with regard to whether foreign state employee acted within the scope of employment for purposes of the FSIA’s tort exception).  The “jurisdiction and merits inquiries” may “[i]nevitably” overlap under the FSIA, but permitting a district court to resolve disputed facts “preserves the effectiveness of the immunity doctrine by avoiding put[ting the foreign government defendant] to the expense of defending what may be a protracted lawsuit without an opportunity to obtain an authoritative determination of its amenability to suit at the earliest possible opportunity.”  Robinson v. Gov’t of Malaysia, 269 F.3d 133, 142 (2d Cir. 2001); see also id. at 143-44.

It is true that the general rule outside the FSIA – as stated in Alliance for Envtl. Renewal, the case cited by the Funnekotter court – is that the resolution of jurisdictional issues enmeshed with the merits can be postponed until trial.  However, FSIA precedent has long made clear that it “would be inappropriate” to postpone the jurisdictional issue until trial under the FSIA “[b]ecause sovereign immunity is immunity from suit, not just from liability.”  Gould, Inc. v. Pechiney Ugine Kuhlmann, 853 F.2d 445, 451 (6th Cir. 1988); see also Moran, 27 F.3d at 172.  As explained by the Fifth Circuit:

An exception to the general rule for FSIA cases is justified by the fact that we have held that the FSIA requires courts to fashion procedures that lead to pretrial resolution of a foreign state’s immunity from suit – even if such procedures depart from the usual rule.  The need for special procedures designed to preserve a foreign sovereign’s immunity from suit is heightened in FSIA cases, which implicate notions of international comity.

Montez v. Dep’t of Navy, 392 F.3d 147, 150-51 (5th Cir. 2004) (emphasis added).

In short, if a plaintiff or a court seeks to invoke the general rule that jurisdictional issues enmeshed with the merits can be resolved at or after trial, defense counsel should object under FSIA precedent.  Otherwise, given that many of the FSIA’s exceptions to immunity involve jurisdictional issues that overlap with evidence on the merits, application of the general rule in FSIA cases runs the risk of vitiating foreign sovereigns’ presumptive immunity from suit.

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