Non-Economic Quasi-Property Rights Under Section 1605(a)(3)

October 15, 2014 By in International Takings Exception Tags: , , , Leave a comment

Section 1605(a)(3) provides that a foreign state shall not be immune in any case “in which rights in property taken in violation of international law are in issue and that property or any property exchanged for such property is present in the United States in connection with a commercial activity carried on in the United States by the foreign state; or that property or any property exchanged for such property is owned or operated by an agency or instrumentality of the foreign state and that agency or instrumentality is engaged in a commercial activity in the United States.”  28 U.S.C. § 1605(a)(3).  In LaLoup v. United States, No. CIV.A. 13-7124, 2014 WL 3361804 (E.D. Pa. July 10, 2014), the court held that a family’s “quasi-property right” in a deceased family member’s body – a right that “can be used for only the one purpose of burial, and has no pecuniary value” – satisfied the “rights in property” requirement set forth in section 1605(a)(3).  Id. at *14-15. 

I am skeptical of the LaLoup court’s conclusion.  As then-Circuit Judge Scalia observed with regard to the analogous immovable property exception, 28 U.S.C. § 1605(a)(4), a court’s “job is not to give the term [rights in immovable property] the most expansive reading possible, nor to extract from different sources of law an artificial consensus definition of the term, but to determine what Congress meant by the language in this particular statute.”  Asociacion de Reclamantes v. United Mexican States, 735 F.2d 1517, 1521 (D.C. Cir. 1984).  The purpose of section 1605(a)(3) was  to address “expropriation claims.”  H.R. Rep. No. 94-1487, at 19 (1976).  As the full language of the jurisdictional provision demonstrates, it was intended to cover property that could be used “in connection with a commercial activity.”  28 U.S.C. § 1605(a)(3); see also, e.g., Robinson v. Shell Oil Co., 519 U.S. 337, 341 (1997) (“The plainness . . . of statutory language is determined by reference to the language itself, the specific context in which that language is used, and the broader context of the statute as a whole.”).  Given the legislative history and the specific context of the term “rights in property” as it is used in section 1605(a)(3), it does not appear that the term should be extended to “quasi-property rights” in a human body that have no pecuniary or economic value.

“Head of the Foreign Ministry” is Strictly Construed Under Section 1608(a)

October 8, 2014 By in Service of Process Tags: , , , , Leave a comment

In Barot v. Embassy of Republic of Zambia, No. CV 13-0451 (ABJ), 2014 WL 2443868 (D.D.C. June 2, 2014) – a case that I have discussed before – the court reaffirmed that strict compliance under section 1608(a) requires careful adherence to all of the service requirements. 

The plaintiff in Barot argued that sending service documents to the Zambia’s Ministry of Foreign Affairs complied with section 1608(a)(3)’s requirement that the documents be sent to “the head of the ministry of foreign affairs of the foreign state concerned.”  28 U.S.C. § 1608(a)(3).  The court disagreed, finding the service defective because “[t]he plain language of the statute requires that the service package be addressed to the head of the ministry, or the minister of foreign affairs, not to the ministry in general.”  Barot, 2014 WL 2443868, at *2.  The district court also rejected plaintiff’s argument that “no other court has required ‘head of’ or the name of the minister before there is proper service under section 1608(a)(3),” holding that such a contention “ignores the plain language of that section[] and . . . overlooks the fact that this issue has not been presented to a court before.”  Id. at *3.

Barot should serve as a reminder to plaintiffs that courts will not excuse even relatively minor defects in service on a foreign state under section 1608(a).  To the extent that a plaintiff is uncertain about service requirements under section 1608(a), the plaintiff should seek legal counsel to help ensure that service is perfected.

Lurking Attribution Issues Under the FSIA

October 1, 2014 By in Agency Tags: , , , Leave a comment

During my regular review of FSIA cases, I am constantly surprised by the inattention paid to attribution.

For example, in LaLoup v. United States, No. CIV.A. 13-7124, 2014 WL 3361804 (E.D. Pa., July 10, 2014), the court assumed that Greece owned an item for purposes of the international takings exception because the item was owned by an agency or instrumentality of Greece.  LaLoup, 2014 3361804, at *18.  The court’s conclusion ignores a fundamental principle underlying the FSIA, namely that “government instrumentalities established as juridical entities distinct and independent from their sovereign should normally be treated as such.”  First Nat. City Bank v. Banco Para El Comercio Exterior de Cuba, 462 U.S. 611, 626-27 (1983).  If property is owned by an agency or instrumentality of a foreign state, it is not owned by the foreign state itself for purposes of the FSIA’s jurisdictional provisions – at least absent a principal-agent relationship or another basis upon which to disregard the agency or instrumentality’s separate legal status.

Attribution issues under the FSIA can be complex and can (as I have explained before) lead to confusion.  However, courts and attorneys should follow a basic rule: if there are distinct legal entities involved under a plaintiff’s theory of the case, there is a lurking attribution issue.  That issue must be addressed and resolved before the conduct or ownership rights of one entity can be freely imputed to another.

Plaintiffs and Their Counsel Should Determine a Foreign State Entity’s Status Early in the Litigation

September 24, 2014 By in FSIA Tags: , , , , , , Leave a comment

In FSIA cases, plaintiffs and their counsel frequently fail to examine carefully at the outset of the litigation a foreign state entity’s status under section 1603.  That mistake, which is easily avoidable, has resulted in numerous instances of defective service of process and other unnecessary delays in FSIA litigation.  

In Howe v. Embassy of Italy, No. CV 13-1273 (BAH), 2014 WL 4449697 (D.D.C. Sept. 11, 2014), the court recently held that the Italian Embassy was a foreign state for purposes of the FSIA’s service provisions.  The court relied on the “categorical” approach adopted by the D.C. Circuit in Transaero, Inc. v. La Fuerza Aerea Boliviana, 30 F.3d 148 (D.C. Cir. 1994), which examines if an entity is “an integral part of a foreign state’s political structure” in determining whether the entity qualifies as a “foreign state.”  Howe, 2014 WL 4449697, at *5-6; see also Transaero, 30 F.3d at 151.  The Howe court also relied on a line of FSIA cases that have determined that an embassy is part of the foreign state itself.  See Howe, 2014 WL 4449697, at *6; see also Barot v. Embassy of Republic of Zam., No. 13-451, 2014 WL 1400849, at *4 (D.D.C. Apr. 11, 2014) (holding defendant foreign embassy in Washington, D.C., is “foreign state or [a] political subdivision of a foreign state” for FSIA purposes (alteration in original)); Ellenbogen v. The Can. Embassy, No. 05-1553, 2005 WL 3211428, at *2 (D.D.C. Nov. 9, 2005) (“[I]t is well-settled that an embassy is a ‘foreign state’ . . . not an ‘agency or instrumentality’ thereof”); Int’l Rd. Fed’n v. Embassy of Dem. Republic of the Congo, 131 F. Supp. 2d 248, 250 (D.D.C. 2001) (holding embassy of foreign state in Washington, D.C., a “foreign state” for the purposes of the FSIA and collecting cases); Underwood v. United Republic of Tanz., No. 94-902, 1995 WL 46383, at *2 (D.D.C. Jan. 27, 1995) (“Applying the categorical approach to the status of the Embassy, we conclude that as a matter of law an embassy of a sovereign nation is a foreign state which must be served pursuant to § 1608(a).”).  Based upon this conclusion regarding the Italian Embassy’s status, the Howe court held that the plaintiff’s attempted service – which did not meet the requirements of section 1608(a) – was defective.  Howe, 2014 WL 4449697, at *6.

It is not always easy to tell whether an entity is a foreign state or an agency or instrumentality thereof.  While each entity must be analyzed separately in the context of the foreign political system at issue, a good rule of thumb is that ministries or departments, the military, and embassies will be deemed “foreign states” – and not agencies or instrumentalities thereof – under 28 U.S.C. § 1603(a).  See, e.g., Garb v. Republic of Poland, 440 F.3d 579, 597-98 (2d Cir. 2006) (holding that the Ministry of the Treasury of Poland is a foreign state and not an “agency or instrumentality” thereof); Transaero, 30 F.3d at 153 (“We hold that armed forces are as a rule so closely bound up with the structure of the state that they must in all cases be considered as the ‘foreign state’ itself, rather than a separate ‘agency or instrumentality’ of the state.”); Howe, 2014 WL 4449697, at *5-6 (holding that an embassy is a foreign state under section 1603(a)). 

In any event, plaintiffs and their counsel would be well-served to examine the issue carefully at the outset of the case.  An entity’s status can have a major impact on the ensuing litigation, including with respect to service (28 U.S.C. § 1608), jurisdiction (28 U.S.C. § 1605(a)(3)), damages (28 U.S.C. § 1606), and attachment or execution (28 U.S.C. § 1610).  An early resolution of the issue should not be difficult – Transaero is the key case to get the research started – and can avoid costly and unnecessary litigation.

Discovery Targeting FSIA Counsel

September 17, 2014 By in Discovery Tags: , , Leave a comment

A recent decision by the Second Circuit serves as a warning signal to foreign states and their attorneys in the United States.  In Mare Shipping Inc. v. Squire Sanders (US) LLP, No. 13-4426-CV, — Fed. Appx. —, 2014 WL 3733133 (2d Cir., July 30, 2014), the Second Circuit held that the FSIA does not preclude discovery requests targeting a foreign state’s counsel in the United States.  Relying on Rep. of Argentina v. NML Capital, Ltd., — U.S. —, 134 S.Ct. 2250, 2256, (2014), the court held that the FSIA’s “explicit definition” of a “foreign state,” by “its plain text, excludes a foreign sovereign’s U.S. counsel.”  Mare Shipping, 2014 WL 3733133, at *3. 

It is unclear what practical impact Mare Shipping will have, since documents and other information obtained by FSIA defense counsel from a foreign state would presumably remain protected by the attorney-client privilege.  In addition, FSIA counsel’s work should remain protected by the attorney work product doctrine.  However, in the event that such protections do not apply, defense counsel should be aware that they likely cannot rely upon the FSIA to fight discovery related to their representation of foreign states.

The Narrow Implied Waiver Exception

September 12, 2014 By in Waiver Exception Tags: , , , Leave a comment

A recent decision from the United States District Court for the District of Columbia underscores the difficulty of establishing FSIA jurisdiction based upon a foreign state’s implied waiver of immunity.  The case also highlights that defense counsel in FSIA cases should take a simple step to prevent an inadvertent waiver of immunity in litigation.

The FSIA’s legislative history indicates that implied waivers may be found “in cases where a foreign state has agreed to arbitration in another country or where a foreign state has agreed that the law of a particular country should govern a contract.”  H.R.Rep. No. 94–1487, at 18 (1976).  In addition, “[a]n implicit waiver would . . . include a situation where a foreign state has filed a responsive pleading in an action without raising the defense of sovereign immunity.”  Ibid.  Based upon this legislative history, “[f]ederal courts have been virtually unanimous in holding that the implied waiver provision of Section 1605(a)(1) must be construed narrowly.”  Shapiro v. Republic of Bolivia , 930 F.2d 1013, 1017 (2d Cir. 1991).  Moreover, while “the examples given in the House Report are not necessarily the only circumstances in which an implied waiver might be found,” Smith v. Socialist People’s Libyan Arab Jamahiriya, 101 F.3d 239, 244 (2d Cir. 1996), “courts have been reluctant to stray beyond these examples when considering claims that a nation has implicitly waived its defense of sovereign immunity.” Princz v. Federal Republic of Germany, 26 F.3d 1166, 1174 (D.C. Cir. 1994).

Diag Human S.E. v. Czech Republic-Ministry of Health, CV 13-0355 (ABJ), 2014 WL 3956747 (D.D.C. Aug. 14, 2014), is consistent with precedent narrowly construing implied waivers under section 1605(a)(1).  In determining whether the Czech Republic had implicitly waived its immunity, the district court held that there had been no implied waiver because the foreign state’s conduct did not fall within any of the three examples set forth in the legislative history.  Diag Human, 2014 WL 3956747, at *6.

While the analysis in Diag Human is straightforward, the case highlights an important issue for FSIA defense counsel.  The Czech Republic filed a motion to dismiss in Diag Human that did not raise the issue of foreign sovereign immunity.  The district court determined that such a filing did not fall within the “responsive pleading” implicit waiver exception, because a motion to dismiss is not a responsive pleading.  Diag Human, 2014 WL 3956747, at *6.  As a procedural matter, the district court was correct: under the Federal Rules of Civil Procedure, a motion to dismiss is technically not a “responsive pleading.”  See, e.g., Doe v. United States, 58 F.3d 494, 497 (9th Cir. 1995).  However, as a practical matter, defense counsel in FSIA cases should be cautious about filing a motion to dismiss that fails to include a sovereign immunity defense.  At a bare minimum, any such motion should expressly reserve the sovereign immunity defense so that the plaintiff cannot argue implicit waiver under section 1605(a)(1).  In fact, it is good practice for defense counsel to include explicit “non-waiver” language in all early filings in an FSIA case – including, for example, stipulations to extend time to file an answer or otherwise respond – to avoid waiver becoming an issue in the litigation.

NML Capital and FSIA Jurisdictional Discovery

July 25, 2014 By in Discovery Tags: , , , , Leave a comment

Following NML Capital, a significant issue is whether the Supreme Court’s holding applies with respect to FSIA jurisdictional discovery.  Some commentators believe that NML Capital indicates that “lower courts have been too generous in protecting foreign sovereigns from [jurisdictional] discovery requests.”   See Wuerth, Republic of Argentina v. NML Capital: Discovery and the Foreign Sovereign Immunities Act. Although the issue is complex and requires further analysis, this post sets forth my preliminary thoughts.

First, Argentina’s position in the NML Capital litigation was wholly unlike that of a foreign sovereign facing FSIA jurisdictional discovery.  Argentina had previously waived both immunity from jurisdiction and immunity from execution, and the Supreme Court concluded that the FSIA did not confer any immunity over Argentina’s overseas assets.  See The Republic of Argentina v. NML Capital, Ltd. (No. 12-842): Why Both Sides Are Wrong (“NML Article”) at 2-3; see also Republic of Argentina v. NML Capital, Ltd., 134 S. Ct. 2250, 2256, 2257 (2014).  The district court had held that it had subject matter jurisdiction over the action, a conclusion that was uncontested by Argentina.  NML Article at 3.  The district court had entered judgments against Argentina that were indisputably valid.  Id.  Argentina’s position had, in short, no similarities to that of a foreign sovereign that is presumptively immune from suit in a court where jurisdiction is in doubt.  See Saudi Arabia v. Nelson, 507 U.S. 349, 355 (1993) (“Under the Act, a foreign state is presumptively immune from the jurisdiction of United States courts; unless a specified exception applies, a federal court lacks subject-matter jurisdiction over a claim against a foreign state.”).  Given the contrast between Argentina’s position and the position of foreign sovereigns confronting the possibility of jurisdictional discovery, it would be injudicious to draw conclusions from the NML Capital case with regard to FSIA jurisdictional discovery.  See, e.g., Cohens v. State of Virginia, 19 U.S. 264, 399, 6 Wheat. 264, 399 (1821) (“It is a maxim not to be disregarded, that general expressions, in every opinion, are to be taken in connection with the case in which those expressions are used.” ); see also Armour & Co. v. Wantock, 323 U.S. 126, 132-33 (1944) (“words of . . . opinions are to be read in the light of the facts of the case under discussion . . . . General expressions transposed to other facts are often misleading.”).

Second, while plaintiffs’ counsel are likely to rely upon the Supreme Court’s discussion of Rule 69(a)(2) and its conclusion that the FSIA does not modify the Rule’s authorization of broad post-judgment discovery (cf. NML Capital, 134 S. Ct. at 2254-57), it is unclear whether the same analysis is applicable with respect to FSIA jurisdictional discovery.  To draw a sustainable analogy to NML Capital, a plaintiff’s attorney would need to show that the scope of discovery provided by Rule 26(b) applies where subject matter jurisdiction has not even been established.  This is a complicated issue that merits further examination, but there are reasons to believe that Rule 26(b) discovery is inappropriate if the district court has not yet resolved the issue of subject matter jurisdiction.  See Steven R. Swanson, Jurisdictional Discovery Under the Foreign Sovereign Immunities Act, 13 Emory Int’l L. Rev. 445, 457-58 (1999) (“[I]t has not always been clear whether the FRCP permit jurisdictional discovery.  After all, before jurisdiction has been established a court technically lacks power to order discovery.”); cf. Oppenheimer Fund, Inc. v. Sanders, 437 U.S. 340, 351 n.13 (1978) (indicating that discovery is available with respect to jurisdictional issues, without distinguishing between personal jurisdiction and subject matter jurisdiction); Insurance Corporation of Ireland, Ltd. v. Compagnie des Bauxites de Guinee, 456 U.S. 694, 701-03 (1982) (distinguishing subject matter jurisdiction from personal jurisdiction); see also, e.g., United States v. Sherwood, 312 U.S. 584, 589-90 (1941) (holding that the rules of civil procedure do not “modify, abridge or enlarge the substantive rights of litigants or  . . . enlarge or diminish the jurisdiction of federal courts”); Am. Telecom Co., L.L.C. v. Republic of Lebanon, 501 F.3d 534, 538-39 (6th Cir. 2007) (“Courts are constituted by authority and they cannot [go] beyond the power delegated to them. If they act beyond that authority, and certainly in contravention of it, their judgments and orders are regarded as nullities. They are not voidable, but simply void, and this even prior to reversal.”); Rolls Royce Indus. Power (India) v. M.V. Fratzis M. Stratilatis Navigation Ltd., 905 F. Supp. 106, 107 (S.D.N.Y. 1995) (declining to order discovery in the absence of subject matter jurisdiction).

Third, the “Civil Rule vs. FSIA” conflict advanced by Argentina – which was the “single, narrow question” resolved by the Supreme Court (NML Capital, 134 S. Ct. at 2255) – is a red herring in the context of FSIA jurisdictional discovery.  The issue is not whether the FSIA itself governs jurisdictional discovery; indeed, as the Supreme Court correctly pointed out, the FSIA only expressly addresses discovery in a very limited way.  NML Capital, 134 S. Ct. at 2256; see also 28 U.S.C. § 1605(g).  Instead, the question is whether a district court should exercise its discretion to limit any jurisdictional discovery ordered against a foreign sovereign.  See Crawford-El v. Britton, 523 U.S. 574, 598 (1998).  In this regard, two important observations are in order:

  • District courts limit FSIA jurisdictional discovery in recognition of the fact that (1) a foreign sovereign is presumptively immune from discovery at the beginning of the litigation (cf. NML Article at 12-13) and (2) the court’s subject matter jurisdiction is in doubt. That is true not only with respect to jurisdictional discovery under the FSIA, but also in other circumstances where a defendant is presumptively immune or jurisdiction has not yet been established.   In fact, there are strong similarities between the rules applied in FSIA jurisdictional discovery cases and the rules applied in other situations where a court confronts the propriety of jurisdictional discovery.  See, e.g., Freeman v. United States, 556 F.3d 326, 342 (5th Cir. 2009); St. Clair v. City of Chico, 880 F.2d 199, 202 (9th Cir. 1989); Razore v. Tulalip Tribes of Wash., 66 F.3d 236, 240 (9th Cir. 1995); Encompass Office Solutions, Inc. v. Ingenix, Inc., No. 4:10-CV-96, 2010 WL 2639563, at *2 (E.D. Tex. June 28, 2010); Dichter-Mad Family Partners, LLP v. United States, 707 F. Supp. 2d 1016, 1053-54 (C.D. Cal. 2010).  Because precedent regarding FSIA jurisdictional discovery does not rely on any textual analysis of the FSIA – but instead relies upon well-established precedent regarding the propriety of discovery prior to a resolution of immunity or a determination of subject matter jurisdiction – such precedent remains unaffected by NML Capital.
  • The Supreme Court in NML Capital expressly recognized that comity considerations govern discovery requests targeting foreign sovereigns. See NML Capital, 134 S. Ct. at 2258 n. 6 (“Although this appeal concerns only the meaning of the Act, we have no reason to doubt that . . . other sources of law ordinarily will bear on the propriety of discovery requests of this nature and scope, such as . . . the discretionary determination by the district court whether the discovery is warranted, which may appropriately consider comity interests and the burden that the discovery might cause to the foreign state.”).  In support of this proposition, the Supreme Court cited Société Nationale Industrielle Aérospatiale v. USDC, 482 U.S. 522, 543-44, and n. 28 (1987).  In the portion of Société Nationale relied upon by the NML Capital Court, the Supreme Court stated that factors relevant to “any comity analysis” include “(1) the importance to the . . . litigation of the documents or other information requested; (2) the degree of specificity of the request; (3) whether the information originated in the United States; (4) the availability of alternative means of securing the information; and (5) the extent to which noncompliance with the request would undermine important interests of the United States, or compliance with the request would undermine important interests of the state where the information is located.”  Société Nationale Industrielle Aérospatiale v. USDC, 482 U.S. at 544 n.28.  Because these are similar to factors considered in a traditional FSIA jurisdictional discovery analysis, a plaintiff would at best be jumping from the frying pan (FSIA jurisdictional discovery precedent) into the fire (international comity analysis).  Regardless of which mode of analysis is utilized, it is unlikely to make a material difference in any given case.

In short, a plaintiff seeking to rely upon NML Capital to argue for broader jurisdictional discovery is unlikely to succeed.  Foreign sovereigns – like other similarly situated litigants – should continue to enjoy discovery protections in the context of a challenge to a district court’s jurisdiction under the FSIA.

Republic of Argentina v. NML Capital, Ltd. (No. 12-842): The Supreme Court (and this Website) Got It Right

June 17, 2014 By in Discovery Tags: , , , , , , , , Leave a comment

Yesterday, the Supreme Court ruled against the Republic of Argentina (7 to 1) in the NML case.  In correctly rejecting Argentina and the United States’ interpretation of the Foreign Sovereign Immunities Act, Justice Scalia’s majority opinion echoed the arguments made on this website two months ago.

Recap: In the NML case, Argentina and the United States argued that the district court’s order permitting broad discovery regarding Argentina’s extraterritorial assets violated the FSIA.  The key premise of Argentina and the United States’ contention was that the FSIA conferred execution immunity over a foreign state’s property held overseas.  See Brief for Petitioner on the Merits (No. 12-842), filed Feb. 24, 2014, at 6, 21; Brief for the United States as Amicus Curiae in Support of Petitioner (No. 12-842), filed Mar. 3, 2014, at 12, 18.  Argentina and the United States advanced their argument by largely ignoring the plain language of 28 U.S.C. section 1609, which conferred execution immunity only upon a foreign state’s property “in the United States.”  28 U.S.C. § 1609 (emphasis added); see also The Republic of Argentina v. NML Capital, Ltd. (No. 12-842): Why Both Sides Are Wrong (“NML Article”) at 6, 7 n.9.

While NML raised the section 1609 argument (Brief for Respondent on the Merits (No. 12-842), filed Mar. 26, 2014 (“NML Br.”) at 9, 46, 52), it was not the focus of its brief in the Supreme Court.  NML Br., passim.

On April 11, 2014, I posted the NML Article on this website.  In the article and a follow-up post regarding Argentina’s reply brief, I made three major contentions regarding Argentina and the United States’ position.  First, I argued that “the threshold issue” in the NML case was “whether foreign assets are accorded a statutory presumption of immunity from execution” under the FSIA.  NML Article at 1.  I stated that “[u]nder section 1609’s plain language, the FSIA does not accord Argentina’s foreign assets with presumptive immunity from execution.  Since Argentina’s property overseas is not presumptively immune under the FSIA, the FSIA does not provide such property with protection from discovery.”  NML Article at 5; see also id. at 5-10.

Second, with regard to Argentina’s contention in its reply brief that pre-FSIA common law controls, I stated that “Argentina nowhere shows that the pre-FSIA regime accorded immunity to a foreign state’s property abroad.  In the absence of such a showing, it is just as likely that immunity issues relating to foreign property were treated as matters of foreign law before the FSIA’s enactment, just as they are now.”  See Republic of Argentina v. NML Capital, Ltd.: Reaction to Argentina’s Reply Brief.

Third, I argued that “[s]ince the FSIA does not accord presumptive sovereign immunity upon a foreign state’s assets overseas, the discovery dispute between Argentina and NML should not be analyzed under the FSIA.  Instead, the Supreme Court’s decision in Société Nationale Industrielle Aérospatiale v. USDC,  482 U.S. 522 (1987), controls.”  NML Article at 2; see also id. at 14-19.  I also noted that while NML cited Société Nationale Industrielle Aérospatiale in its Supreme Court brief, neither party had raised the Société Nationale Industrielle Aérospatiale comity issue in the district court or in the Second Circuit.  Ibid. at 18-19 n.27.

The Supreme Court’s Opinion: In rejecting Argentina and the United States’ position, the Supreme Court’s opinion echoed the analysis I set forth in the NML Article and the subsequent post. 

First, the Supreme Court concluded that the plain language of the FSIA undermined the central premise of Argentina and the United States’ position.  The Supreme Court squarely held that section 1609 “immunizes only foreign-state property ‘in the United States’” and thus does “not shield from discovery a foreign sovereign’s extraterritorial assets.”  Republic of Argentina v. NML Capital, Ltd., No. 12-842, 573 U.S. ___ (2014) (slip op., at 9) (emphasis in original).

Second, with regard to pre-FSIA common law immunity, the Supreme Court observed that “Argentina cites no case holding that, before the Act, a foreign state’s extraterritorial assets enjoyed absolute execution immunity in United States courts. No surprise there. Our courts generally lack authority in the first place to execute against property in other countries, so how could the question ever have arisen?”  NML Capital, 573 U.S. ___ (slip op., at 9).

Third, the Supreme Court agreed that Société Nationale Industrielle Aérospatiale applies with regard to NML’s discovery requests.  See NML Capital, 573 U.S. ___ (slip op., at 11-12 n.6).

Final Thoughts Regarding Argentina and the United States’ Argument: In the end, the NML case was not a close call.  Argentina and the United States’ position – that the FSIA conferred execution immunity over a foreign state’s extraterritorial assets – was simply irreconcilable with the plain language of section 1609.  While I understand why Argentina nevertheless made the argument given the precarious legal situation that it finds itself in, I am disappointed that the Solicitor General supported a position that was contrary to the plain language of the FSIA.  The United States’ untenable legal position may have been driven by overarching political and economic concerns, but the Solicitor General’s brief was, in my view, inconsistent with the responsibilities of the “Tenth Justice” of the Supreme Court.   

Note: I will post another article regarding the NML case in the next few weeks, this time focused on the effect (if any) of the decision with respect to FSIA jurisdictional discovery.

A Common Service Error

June 11, 2014 By in Service of Process Tags: , , , , , Leave a comment

Since the enactment of the FSIA, plaintiffs have repeatedly attempted to serve foreign states via their embassies in Washington, D.C.  That is the wrong approach.  The FSIA does not provide for service via an embassy (cf. 28 U.S.C. § 1608(a)), and indeed such service is inconsistent with international law.  As demonstrated by a recent case from the United States District Court for the Eastern District of California, any attempt to serve via a foreign state’s embassy will be quashed by the court.  See Rhuma v. Libya, 2:13-CV-2286 LKK AC, 2014 WL 1665042, at *4 (E.D. Cal. Apr. 24, 2014) (“personal service on a foreign state’s embassy fails to comply with Section 1608(a)”); see also, e.g., BPA Intern., Inc. v. Kingdom of Sweden, 281 F. Supp. 2d 73, 84 (D.D.C. 2003) (personal service on Embassy of Sweden was insufficient under 28 U.S.C. § 1608(a)); Ibiza Business Ltd. v. U.S., 2010 WL 2788169, at *2 (D.D.C. 2010) (personal service on Brazilian Embassy was insufficient pursuant to 28 U.S.C. § 1608(a)).

The Tort Exception’s Situs Requirement

June 5, 2014 By in Tort Exception Tags: , , , Leave a comment

The FSIA’s tort exception requires an action “in which money damages are sought against a foreign state for personal injury or death, or damage to or loss of property, occurring in the United States . . . .”  28 U.S.C. § 1605(a)(5).  As exemplified by a recent decision from the United States District Court for the District of Puerto Rico, courts have long held that jurisdiction lies under the tort exception only if the entire tort occurred within the United States.  See Fernandez v. Spain, CIV. 13-1911 PG, 2014 WL 1807069, at *2 (D.P.R. May 7, 2014); see also, e.g., Argentine Republic v. Amerada Hess Shipping Corp., 488 U.S. 428, 441 (1989); In re Terrorist Attacks on September 11, 2001, 714 F.3d 109, 116 (2d Cir. 2013); O’Bryan v. Holy See, 556 F.3d 361, 382 (6th Cir. 2009); Cabiri v. Gov’t of Republic of Ghana, 165 F.3d 193, 200 n.3 (2d Cir. 1999); Wolf v. Fed. Republic of Germany,95 F.3d 536, 542 (7th Cir. 1996); Jones v. Petty-Ray Geophysical Geosource, Inc., 954 F.2d 1061, 1065 (5th Cir. 1992); Asociacion de Reclamantes v. United Mexican States, 735 F.2d 1517, 1524-25 (D.C. Cir. 1984); Abrams v. Societe Nationale des Chemins de Fer Francais, 175 F. Supp. 2d 423, 431 (E.D.N.Y. 2001), vacated on other grounds by 332 F.3d 173 (2d Cir. 2003), cert. granted and vacated, 542 U.S. 901 (2004), aff’d 389 F.3d 61 (2d Cir. 2004); Sampson v. Fed. Republic of Germany, 975 F. Supp. 1108, 1118 (N.D. Ill. 1997); S. Seafood Co. v. Holt Cargo Sys., Inc., No. Civ.A.96-5217, 1997 WL 539763, at *7 (E.D. Pa. Aug. 11, 1997); Cabiri v. Gov’t of Republic of Ghana, 981 F. Supp. 129, 132 (E.D.N.Y. 1997), aff’d in part and rev’d on other grounds in 165 F.3d 193 (2d Cir. 1999); Hirsh v. State of Israel, 962 F. Supp. 377, 383-84 (S.D.N.Y. 1997); Rein v. Rein, No. 95 Civ. 4030 (SHS), 1996 WL 273993, at *3 (S.D.N.Y. May 23, 1996); Coleman v. Alcolac, Inc., 888 F. Supp. 1388, 1403 (S.D. Tex. 1995); Smith v. Socialist People’s Libyan Arab Jamahiriya, 886 F. Supp. 306, 313 (E.D.N.Y. 1995); El-Fadl v. Cent. Bank of Jordan, No. Civ.A. 93-1895 RMU, 1994 WL 1656111, at *4 (D.D.C. Nov. 9, 1994); Velasquez v. Gen. Consulate of Mexico, No. C-92-3745 CFL, 1993 WL 69493, at *3 (N.D. Cal. Mar. 4, 1993); Intercont’l Dictionary Series v. De Gruyter, 822 F. Supp. 662, 677 (C.D. Cal. 1993), disapproved on other grounds in Sun v. Taiwan, 201 F.3d 110 (9th Cir. 2000); Denegri v. Republic of Chile, Civ. A. No. 86-3085, 1992 WL 91914, at *2 (D.D.C. Apr. 6, 1992); Antares Aircraft L.P. v. Fed. Republic of Nigeria, No. 89 Civ. 6513(JSM), 1991 WL 29287, at *4 (S.D.N.Y. Mar. 1, 1991); Polanco v. Dominican Republic, No. 90 Civ. 7089 (WK),1991 WL 146306, at *2 (S.D.N.Y. July 22, 1991); Fickling v. Commw. of Australia, 775 F. Supp. 66, 72 (E.D.N.Y. 1991); Von Dardel v. Union of Soviet Socialist Republics, 736 F. Supp. 1, 7-8 (D.D.C. 1990); Goquiolay v. Philippines Nat’l Bank, No. 90 CIV. 893 (CSH), 1990 WL 144118, at *3 (S.D.N.Y. Sept. 28, 1990); Bennett v. Stephens, CIV. A. No. 88-2610 (RCL), 1989 WL 17751, at *4 (D.D.C. Feb. 23, 1989); Kline v. Kaneko, 685 F. Supp. 386, 391 (S.D.N.Y. 1988); Four Corners Helicopters, Inc. v. Turbomeca S.A., 677 F. Supp. 1096, 1102 (D. Colo. 1988); English v. Thorne, 676 F. Supp. 761, 764 (S.D. Miss. 1987); Ledgerwood v. State of Iran, 617 F. Supp. 311, 314 (D.D.C. 1985); Kline v. Republic of El Salvador, 603 F. Supp. 1313, 1315-16 (D.D.C. 1985); Evans v. Petroleo, Civil Action No. H-83-91, 1984 WL 1887, at *1 (S.D. Tex. Aug. 2, 1984); In re Sedco, Inc., 543 F. Supp. 561, 567 (S.D. Tex. 1982); cf. H.R. Rep. No. 1487, at 21 (1976).

The tort exception’s situs requirement is a critical limitation on jurisdiction over foreign torts under the FSIA.  In light of the recognized importance of such limitations in international law (cf. Kiobel v. Royal Dutch Petroleum Co., — U.S. —, 133 S. Ct. 1659, 1669 (2013)), it should continue to be strongly enforced by courts in the United States.