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

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.

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

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.

A Common Service Error

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 Practical Impact of Strict Compliance Under Section 1608(a)

Two recent decisions reaffirm the need for a plaintiff’s strict compliance with the service requirements set forth in 28 U.S.C. section 1608(a).  Although I have addressed the standard for service upon a foreign state before, the new decisions demonstrate the practical effect of a strict compliance standard in FSIA litigation.

First, in Barot v. Embassy of Republic of Zambia, CV 13-0451 (ABJ), 2014 WL 1400849 (D.D.C. Apr. 11, 2014), the district court held that the plaintiff failed to comply with section 1608(a)(3)’s requirement that service of process must “be addressed and dispatched by the clerk of the court to the head of the ministry of foreign affairs of the foreign state concerned.”  28 U.S.C. § 1608(a)(3).  Instead of addressing the package to the head of the foreign ministry, the plaintiff addressed the mailing to the “Embassy of Zambia, P.O. Box 50069, Lusaka City, Zambia.”  Barot, 2014 WL 1400849, at *5.  While the district court noted that it “would be inclined to overlook such a technical error” in another context, the court held that section 1608(a) requires strict compliance and that the service attempt “did not comply with the strict terms of section 1608(a)(3).”  Id. at *5-6.

Second, in Doe v. Holy See, CIV.A. 13-128, 2014 WL 1329985 (E.D. La. Apr. 2, 2014) (a case in which I am one of the attorneys for the foreign sovereign), the district court held that service of the original complaint did not strictly comply with section 1608(a) when the complaint had been amended before service was accomplished.  The court held that “the plaintiff’s attempted service of process failed to strictly comply with the FSIA’s service requirements in 28 U.S.C. § 1608(a) because the plaintiff failed to serve the operative amended complaint [and] did not serve a translation of the operative complaint.”  Id. at *6. 

The strict compliance standard requires plaintiffs to follow the rules set forth under section 1608(a) and the underlying federal regulations.  When a plaintiff fails to do so, there is a good chance that the plaintiff will be compelled to return to square one.

The Sole Method of Service Upon a Diplomatic Agent

Although this site focuses on developments in FSIA law, I will also occasionally address legal issues relating to head-of-state immunity, official immunity and diplomatic immunity.  Today, I address an unusual issue: the proper method of service of process upon a diplomatic agent.

While a sitting diplomatic agent is immune from criminal jurisdiction under Article 31 of the Vienna Convention on Diplomatic Relations  (“VCDR”), there are three narrow exceptions to immunity from civil jurisdiction.  See VCDR, art. 31(1)(a)-(c).  In the (unlikely) event that a plaintiff’s attorney files an action against a diplomatic agent that falls within one of the three limited exceptions to diplomatic immunity, the issue arises of service of process upon a sitting diplomatic agent.  It is a matter not addressed by statute or rule, and it has received little attention in the commentary.  In this post, I conclude that international law requires that service upon a diplomatic agent may only be accomplished via diplomatic channels.

Under the principle of personal inviolability, it is without question that a diplomatic agent may not be personally served with legal process.  See VCDR, art. 29 (“The person of a diplomatic agent shall be inviolable.”); see also Tachiona v. United States, 386 F.3d 205, 221-24 (2d Cir. 2004); Hellenic Lines, Ltd. v. Moore, 345 F.2d 978, 979-81 (D.C. Cir. 1965).  Moreover, because the premises of a diplomatic mission are inviolable under Article 22 of the VCDR, a plaintiff’s attorney may not send a process server onto the premises of a mission to serve process upon an ambassador or any other individual.  See VCDR, art. 22(1) (“The premises of the mission shall be inviolable.”); see also 767 Third Ave. Assoc. v. Permanent Mission of Republic of Zaire to United Nations, 988 F.2d 295, 300 (2d Cir. 1993) (stating that the VCDR “recognized no exceptions to mission inviolability”); Harvard Research in International Law, Diplomatic Privileges and Immunities, 26 Am. J. Int’l L. Supp. 15, 55 (1932) (“Customary international law, recognized by municipal legislation, prohibits the serving of any writ, summons, order, or process within the premises of a mission.”).

Whether or not a diplomatic agent may be served by mail poses a more difficult question.  However, four decades ago, the United States Department of State concluded that service by mail would run afoul of Article 22’s inviolability provision.  The Department determined that “countries party to the Convention on Diplomatic Relations . . . would have a basis for objection to the propriety of process served [by mail] under Article 22, section 1, of that Convention, as interpreted in light of the negotiating history of that Convention (Official Records, Volume I, page 141).”  Diplomatic Premises – Inviolability, 69 Am. J. Int’l L. 146, 146-47 (1975); see also 1974 Digest of United States Practice in International Law 171, 171-72 (same).  The Vienna Convention negotiating history cited by the State Department consisted of the following statement by the Japanese representative, made upon withdrawal of an amendment prohibiting service by a process server on mission premises:

Mr. Takahashi (Japan) said that the purpose of the Japanese amendment was to establish a uniform rate concerning the service of judicial documents.  He was prepared to withdraw the amendment, on the understanding that it was the unanimous interpretation of the Committee that no writ could be served, even by post, within the premises of a diplomatic mission.

United Nations Conference on Diplomatic Intercourse and Immunities (Vienna – 2 March – 14 April 1961), Official Records, Vol. I: Summary Records of Plenary Meetings and of Meetings of the Committee of the Whole (1962), A.Conf.20/14, at 141 (emphasis added).

The few commentators who have addressed the issue agree that Article 22 of the Vienna Convention prohibits service by mail.  See, e.g., Brownlie, Principles of Public International Law 357 (7th ed. 2008) (“It follows from Article 22 that writs may not be served, even by post, within the premises of a mission.”); Dembinski, The Modern Law of Diplomacy 193 (1988) (stating that Article 22 “protects the mission from receiving by messenger or by mail any notification from the judicial or other authorities of the receiving State”); Salmon, Manuel de Droit Diplomatique § 302 (1994) (stating that service of process is not permitted by mail under Article 22).

As the same commentators recognize, the sole remaining method of service upon a diplomatic agent is via diplomatic channels.  See Brownlie, Principles of Public International Law 357 (stating that writs may be served “only through the local Ministry of Foreign Affairs”); Dembinski, The Modern Law of Diplomacy 193 (“If absolutely necessary such documents have to be transmitted through the Foreign Ministry.”); Salmon, Manuel de Droit Diplomatique § 302 (1994) (stating that service of process is permitted only via diplomatic channels under Article 22).

There are several important policy reasons underlying the requirement of service via diplomatic channels.  First, such service ensures that the head of the diplomatic mission and the foreign sovereign are apprised of the attempted service of process.  Notice in an international case with unique constitutional status (cf. U.S. Const. art. III, § 2, cl. 1) and potential serious foreign relations implications should not depend upon mere service by mail. 

Second, service by diplomatic channel guarantees notice to the receiving state’s foreign ministry – important under Article 22, given the receiving state’s “special duty” to “take all appropriate steps to protect the premises of the mission against any intrusion . . . and to prevent any . . . impairment of its dignity.”  VCDR, art. 22(3). 

Third, requiring service by diplomatic channel helps ensure similar treatment for U.S. diplomatic missions overseas.  See, e.g., 767 Third Ave. Assoc., 988 F.2d at 300 (in Article 22 case, stating that “the United States recognizes the privileges of foreign diplomats in the U.S. with the understanding that American diplomats abroad will be afforded the same protections from intrusions by the host state. The most secure way to guarantee this protection, the United States tells us, is through blanket immunities and privileges without exception.”); see also The Schooner Exchange v. McFaddon, 11 U.S. 116, 138-39 (1812).

In short, if a plaintiff’s attorney files a lawsuit against a diplomatic agent falling into one of the exceptions set forth in Article 31(1) of the Convention, the only acceptable means of service under international law is via diplomatic channels.  All other methods of service would be subject to challenge under Federal Rule of Civil Procedure 12(b)(5).

Litigation Comment: Richardson v. Attorney General of the British Virgin Islands

Another blog devoted to issues relating to foreign sovereigns in United States courts recently mentioned the case Richardson v. Attorney General of the British Virgin Islands, Civil No. 2008-144, 2013 WL 4494975 (D.V.I. Aug. 20, 2013).  See www.foreignsovereignblog.com.  Although Richardson is unusual because the foreign sovereign is appearing pro se, the case is indeed interesting for a number of reasons:

Capacity: Richardson addresses the circumstances under which a lawsuit against a foreign sovereign official should be deemed a lawsuit against the foreign sovereign itself.  Richardson, 2013 WL 4494975, at *2.  The official capacity issue frequently arises with respect to domestic government officials.   Cf. Kentucky v. Graham, 473 U.S. 159, 166 (1985) (“[A]n official-capacity suit is, in all respects other than name, to be treated as a suit against the entity.  It is not a suit against the official personally, for the real party in interest is the entity”).  In Samantar, the Supreme Court recognized that it was an issue under the FSIA as well: “it may be the case that some actions against an official in his official capacity should be treated as actions against the foreign state itself, as the state is the real party in interest.”  Samantar v. Yousuf, 560 U.S. 305, 325 (2010), citing Graham, 473 U.S. at 166.  It is an issue that should be kept in mind whenever an attorney confronts a case against a foreign sovereign official.

Waiver: The Richardson court correctly held that a foreign state does not waive immunity simply by failing to appear in the matter.  Richardson, 2013 WL 4494975, at *4.  However, the court also accurately stated that a foreign state does waive immunity if it fails to assert immunity in a responsive pleading – which, according to a docket check, is what the pro se foreign sovereign defendant may just have done in a recent filing.  Id.  Richardson highlights that a foreign sovereign can actually increase the risk of waiver by appearing in the action, particularly if defense counsel is not familiar with the FSIA’s waiver rules.

Commercial Activity: In analyzing whether the plaintiff’s claims involved commercial activity, the Richardson court examined whether the conduct was “of a nature that a private person would undertake for profit.”  Richardson, 2013 WL 4494975, at *4.  The “for profit” test is controversial, particularly given the nature/purpose language in 28 U.S.C. section 1603(d).  However, there is a strong argument that whether or not an activity is the type customarily undertaken for profit is an appropriate factor to consider, and I address that issue here.

Scope of Employment/Respondeat Superior: The Richardson court quotes the Fifth Circuit’s decision in Moran for the following proposition relating to the tort exception’s “scope of employment” requirement: “‘[T]he scope of employment provision of the tortious activity exception requires a finding that the doctrine of respondeat superior applies to the tortious act or omission committed by the officer or employee of the foreign state.’”  Richardson, 2013 WL 4494975, at *5, quoting Moran v. Kingdom of Saudi Arabia, 27 F.3d 169, 173 (5th Cir. 1994).  This again is an issue for a future post, but courts and attorneys in FSIA cases should be careful not to equate the tort exception’s “scope of employment” requirement with a respondeat superior analysis.  Under most circumstances the two are identical, but in certain situations there is a big difference.  Cf. Primeaux v. United States, 181 F.3d 876 (8th Cir. 1999) (en banc).

Political Subdivision: Richardson determined that BVI was a political subdivision of the United Kingdom for purposes of the FSIA.  Richardson, 2013 WL 4494975, at *10.  On its face that determination appears correct, but it is worth noting that there are not many cases under the FSIA addressing what is meant by the term “political subdivision.”  Under the right circumstances, the political subdivision issue is one that could involve very interesting litigation.

Strict Compliance: The Richardson court correctly held that a plaintiff must strictly comply with section 1608(a)’s service of process requirements.  See Richardson, 2013 WL 4494975, at *8; see also https://fsialaw.com/2013/11/07/the-ninth-circuits-substantial-service-error/.  However, Richardson is unusual in that the court appeared to hold that the strict compliance standard applied to the requirements of the Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters, Nov. 15, 1965, 658 U.N.T.S. 163 (“Hague Service Convention”).  See Richardson, 2013 WL 4494975, at *13; see also 28 U.S.C. § 1608(a)(2).  There are not many cases under section 1608(a)(2), but applying a strict compliance standard to the Hague Service Convention requirements appears to be a logical extension of FSIA service precedent.

Official Immunity: Official immunity is relatively straightforward when the Executive Branch files a suggestion of immunity.  See, e.g., Rosenberg v. Lashkar-e-Taiba, — F. Supp. 2d — , 2013 WL 5502851 (E.D.N.Y. Sept. 30, 2013).  Richardson provides an example of a court finding a foreign sovereign official immune even in the absence of a suggestion of immunity from the Executive Branch.  Richardson, 2013 WL 4494975, at *16; see also Samantar, 560 U.S. at 311 (discussing that, under the common law, a district court “had authority to decide for itself whether all the requisites for such immunity existed” in the “absence of recognition of the immunity by the Department of State”) (citations and internal quotations omitted).  A court determination of official immunity can be a useful tool for FSIA defense counsel in cases against officials or in situations where discovery is sought from foreign sovereign officials.

The Ninth Circuit’s Substantial Service Error

This blog dedicated to FSIA jurisprudence begins, fittingly, by addressing the issue that confronts parties at the start of FSIA litigation: service of process.

On December 10, 2010, in Peterson v. Islamic Republic of Iran, 627 F.3d 1117 (9th Cir. 2010), the Ninth Circuit created a circuit split with respect to a significant issue relating to service of process under the FSIA.  The ruling has attracted little attention or commentary.  But the Peterson court’s decision was in error, and it should one day be challenged.

The basic rules relating to service of process under the FSIA are well known.   Service upon a foreign state is governed by 28 U.S.C. section 1608(a), whereas the requirements for service upon a foreign state agency or instrumentality are set forth in section 1608(b).  Until the Ninth Circuit’s decision in Peterson, the law was unambiguous: a plaintiff had to strictly comply with section 1608(a)’s requirements for service upon a foreign state.  Seee.g.Magness v. Russian Fed’n, 247 F.3d 609, 611 (5th Cir. 2001) (“strict compliance”); Transaero, Inc. v. La Fuerza Aerea Boliviana, 30 F.3d 148, 153-54 (D.C. Cir. 1994) (“strict adherence”); Gray v. Permanent Mission of People’s Republic of Congo to United Nations, 443 F. Supp. 816, 821 (S.D.N.Y. 1978), aff’d, 580 F.2d 1044 (2d Cir. 1978) (“strict compliance”); Alberti v. Empresa Nicaraguense De La Carne, 705 F.2d 250, 253 (7th Cir. 1983) (strict compliance); see also O’Bryan v. Holy See, 490 F. Supp. 2d 826, 831 (W.D. Ky. 2005) (“Service of process on a foreign state must be effected in strict compliance with the provisions of section 1608(a).”).  By contrast, with regard to service upon an agency or instrumentality, courts agreed that substantial compliance was sufficient.  Seee.g.Magness, 247 F.3d at 616 (“substantial compliance with section 1608(b) is sufficient so long as the defendants have actual notice of the suit”); see also Semtek Int’l Inc. v. Info. Satellite Sys., CIV.A. 09-10183-RWZ, 2012 WL 831475 (D. Mass. Mar. 9, 2012) (“While service on a ‘foreign state’ under FSIA § 1608(a) must be accomplished in accordance with standard of ‘strict compliance,’ service on an agency or instrumentality of a foreign state under § 1608(b) requires only ‘substantial compliance.'”).

As courts have found – and as I have previously successfully argued in FSIA litigation – there are weighty reasons underlying the more careful treatment of foreign states with respect to service of process.  Most importantly, application of a strict compliance standard comports with the statutory scheme.   For example, in the absence of a special arrangement or an international convention, section 1608(a) requires service upon the “head of foreign affairs of the foreign state concerned” – a requirement that is absent in Section 1608(b).  See 28 U.S.C. § 1608(a)(3); compare 28 U.S.C. § 1608(b).  In the event service by mail upon the foreign minister fails, service is permitted only through diplomatic channels – a procedure also absent in Section 1608(b).  See 28 U.S.C. § 1608(a)(4); compare 28 U.S.C. § 1608(b).  The adoption of high-level procedures in Section 1608(a)’s service provisions reflects Congress’s determination that service upon a foreign state has greater political and diplomatic significance, requiring a more exacting standard of compliance.  See Note, Service of Process Under the Foreign Sovereign Immunities Act of 1976: The Arguments for Exclusivity, 14 Cornell Int’l L. J. 357, 362 (1981) (“The utilization of diplomatic service when other methods fail [under Section 1608(a)], instead of court-ordered service [as permitted under Section 1608(b)], indicates an unwillingness on Congress’s part to entrust the courts with power to deal with foreign states and subdivisions.”).

The same holds true with Section 1608(a)’s notice of suit requirement, which is absent from section 1608(b).  The notice of suit was a “new document” created by Congress, unique to service upon foreign sovereigns and designed “to minimize potential irritants to relations with foreign states.”  H.R. Rep. No. 94-1487, at 11.  The notice of suit’s requirements are separate and distinct from notice requirements imposed by other rules.  See 28 U.S.C. § 1608(a); 22 C.F.R. § 93.2 (detailing notice of suit requirements).  The notice of suit reflects the added importance attached to service on foreign states and the need to minimize irritants to foreign relations, which both require service in accordance with the statute’s provisions.  See Arthur L. George, A Practical and Theoretical Analysis of Service of Process under the Foreign Sovereign Immunities Act, 19 Int’l Law. 49, 75 & n.177 (1985) (notice of suit required under Section 1608(a) demonstrates Congress’s “sensitivity to the need for greater delicacy in suits against foreign states themselves as opposed to their agencies and instrumentalities”).

In addition, the legislative history of Section 1608(a) – unlike the legislative history of Section 1608(b) – states that the Section 1608(a) service provisions provide the “exclusive procedures” for service upon a foreign state.  H.R. Rep. No. 94-1487, at 24; cf. H.R. Rep. No. 94-1487, at 25 (no “exclusive procedures” language in discussion of section 1608(b) provisions).  The “exclusive procedures” language “simply does not support a finding that anything less than strict compliance will suffice under the law.”  Magness, 247 F.3d at 615; see also Finamar Investors, 889 F. Supp. at 117 (same).

By contrast, section 1608(b) contains relatively informal service procedures that are akin to service provisions for foreign individuals and corporations under Rules 4(f) and (h)(2) of the Federal Rules of Civil Procedure rather than to service upon foreign states.  See, e.g., 28 U.S.C. § 1608(b)(3)(C) (permitting service “as directed by order of the court consistent with the law of the place where service is to be made”); see also George, supra, at 55 (stating that the service options under section 1608(b) “are more numerous and offer more flexibility than those of section 1608(a).”).  Indeed, section 1608(b)(3) explicitly allows a range of service options “if reasonably calculated to give actual notice.”  As several courts have found, the “actual notice” language in section 1608(b)(3) shows “that Congress was there concerned with substance rather than form; but the analogous subsection of Section 1608(a) says nothing about actual notice.”  Transaero, Inc., 30 F.3d at 154; see also Magness, 247 F.3d at 616 (same); Finamar Investors, 889 F. Supp. at 117 (same).

The distinctions in the service provisions are “neatly tailored to the differences between ‘foreign states’ and ‘agencies or instrumentalities.’  The latter, typically international commercial enterprises, often possess a sophisticated knowledge of the United States’ legal system that other organs of foreign governments may lack . . . .”  Transaero, Inc., 30 F.3d at 154; see also H.R. Rep. No. 94-1487, at 25 (foreign states may be “unfamiliar with U.S. law or procedures”).  Given Congress’s adoption of procedures to ensure service upon a foreign state which would both “minimize potential irritants to relations with foreign states” and take into consideration a foreign state’s lack of sophistication (H.R. Rep. No. 94-1487, at 11), leniency in section 1608(a) cases “would disorder the statutory scheme.”  Transaero, Inc., 30 F.3d at 154.  Accordingly, in keeping with the language, structure and legislative history of the FSIA, service upon foreign states requires strict compliance.

The Peterson court failed to address any of these issues.  Even worse, there is no indication that the court was ever advised of the relevant case law or legislative history.  Iran did not appear in the Peterson case, and neither the third-party’s answering brief nor the United States’ amicus brief addressed the standard applicable to service under section 1608(a).

Deprived of the benefit of adversarial briefing on the standard applicable to service of process, the Peterson court relied on Straub v. A P Green, Inc., 38 F.3d 448 (9th Cir. 1994), which had stated in a section 1608(b) case that “[w]e formally adopt a substantial compliance test for the FSIA.”  Id. at 453.  Citing Straub, Peterson stated that the “Ninth Circuit has adopted a substantial compliance test for the FSIA’s notice requirements; a plaintiff’s failure to properly serve a foreign state defendant will not result in dismissal if the plaintiff substantially complied with the FSIA’s notice requirements and the defendant had actual notice.”  But Straub was a case under section 1608(b), and therefore is not precedent on the standard applicable under section 1608(a).  See Straub, 38 F.3d at 451 (holding that defendant was “an instrumentality of a foreign state”); id. at 452-53 (addressing solely whether service had been effected under sections 1608(b)(2) and (b)(3)).  This was, in fact, the oral ruling of the United States District Court for the District of Oregon in John V. Doe v. Holy See (a case in which I represented the foreign sovereign defendant), where the court adopted a strict compliance standard notwithstanding the Ninth Circuit’s decision in Straub: “I believe that Straub intends to be a holding about the appropriate standard under subsection (b) or, more particularly, under subsection (b)(3), and that in the broader language in one sentence of that opinion isn’t an intention by the Ninth Circuit to decide a very important issue that wasn’t before the court in any way.”  Oral Transcript of February 5, 2004 Hearing, at 30 (on file with author).

In the aftermath of Peterson, it appears that district courts in the Ninth Circuit may no longer believe they have the flexibility to adopt a strict compliance standard under section 1608(a).  Cf. FSM Dev. Bank v. Arthur, 11-CV-05494-LHK, 2012 WL 1438834, at *4 (N.D. Cal. Apr. 25, 2012) (“Under the Ninth Circuit’s ‘substantial compliance’ test, which is binding on this Court, the pivotal factor is whether the defendant receives actual notice and was not prejudiced by the lack of compliance with the FSIA”) (emphasis in original).  That is a shame, because an important development in FSIA jurisprudence – and the creation of a circuit split – should be based upon reasoned legal analysis rather than a court error arising from the unusual non-adversarial posture of the relevant appellate proceedings.

If and when the issue presents itself again in the Ninth Circuit, Peterson should be challenged.  And if the challenge is carefully done, Peterson could be – and should be – reversed.