Embassy Law Web Log   
Washington, DC, USA      

Ruhrgas, FSIA and Discretion

On December 1, 2005, the Fourth Circuit approved the exercise of discretion by the lower court in dismissing a matter for lacking personal jurisdiction without examining in full the more complex issues of subject matter jurisdiction.

In the matter Mattie Lolavar et al. v. Ferndando de Santibanes et al., docket number 04-1901, the District Court realized that the subject matter jurisdiction in the complaint against an Argentinian intelligence official involves the Foreign Sovereign Immunities Act and decided not to resolve that question. Instead it relied on the clear facts that support a dismissal for lack of personal jurisdiction.

In their appeal, plaintiffs argued that the court should have ruled on the subject matter jurisdiction before dismissing the case. The Supreme Court of the United States granted the lower courts in Ruhrgas AG v. Marathan Oil Co., 526 US 574, 588 (1999), the discretion that the court properly applied here, the court of appeals found.   -   Clemens Kochinke, Berliner, Corcoran & Rowe, LLP, Washington, DC.

U.S. Ticket Sale Creates FSIA Nexus

The United States Court of Appeals for the District of Columbia found subject matter jurisdiction in Kirkham v. Société Air France allowing the case against the foreign government-owned airline to proceed in the United States. On November 22, 2005, the court decided that the purchase of an airline ticket in the United States was sufficient to invoke the commercial activities exception under the Foreign Sovereign Immunities Act (FSIA) against an airline owned by a foreign nation, even without other activity in the United States relative to the substance of the complaint.

The District Court's analysis of jurisdictional facts included the merits of the plaintiff's claim including breach, causation and duty of care, while the Court of Appeals reduced the scope of jurisdictional facts to those facts that would establish a claim at all. Relying on Saudi Arabia v. Nelson, 507 U.S. 349, 357 (1993), the Court of Appeals interprets Nelson's standard of elements contributing to claims to be each fact necessary to establish a claim, rather than the facts without which the plaintiff will lose.

Allowing this single element of commercial activity to constitute a sufficient nexus for subject matter jurisdiction under the FSIA will have far reaching consequences and bring into question what constitutes state control of commercial entities in the future.   -   by Sally Laing, Legal Assistant, Berliner, Corcoran & Rowe, LLP, Washington, DC.

FSIA: Jurisdictional Discovery

In Robert Lee Beecham et al. v. Socialist People's Libyan Arab Jamahiriya et al., No. 04-7037, the United States Court of Appeals for the District of Columbia on September 30, 2005, ruled on the case of representatives of those killed in the 1986 bombing of a discotheque in Germany who had brought suit against Libya invoking the terrorist exception to foreign sovereign immunity, 28 USC 1605(a)(7). Libya moved to dismiss arguing that plaintiffs had presented insufficient evidence to establish subject matter jurisdiction under the terrorist exception.

The district court ordered the parties to meet and confer and submit a joint report proposing a plan for conducting jurisdictional discovery. Libya appealed arguing that the court of appeals had jurisdiction to review the district court's order pursuant to the collateral order doctrine.

The court of appeals, in an opinion by Judge Randolph, dismissed the appeal for lack of jurisdiction. There was no prior case in which a court had exercised appellate jurisdiction over such an order. An order to participate in a discovery conference did not "by any stretch" resolve important issues in the case nor did it "conclusively determine" the scope of jurisdicitonal discovery. The order, just requiring Libya's lawyer to meet and confer, imposed no significant burden on Libya.

In response to Libya's argument that it should not be required to violate the district court's order and be held in contempt to establish appellate jurisdiction, the court of appeals wrote that it was not clear the district court would hold Libya in contempt as other sactions were available under Civil Rule 37(b). In any event, the law of the circuit was that a civil contempt order was not appealable as a final order.

The appeal was premature because there was a possibility that the parties might agree to a discovery plan at the conference. Only if the district court were to order jurisdictional discovery and clearly abused its discretion could there be appellate review. Such review, the opinion suggests, could only be by mandamus.   -   Thomas G. Corcoran, Jr., Berliner, Corcoran & Rowe, LLP, Washington, DC.

Consular Notification Case Proceeds

On the basis of the Alien Tort Statute, 28 USC §1350, the Indian citizen plaintiff claimed in the matter Tejpaul S. Jogi v. Tim Voges et al., docket number 01-1657, that his incarceration in the United States violated the Vienna Convention on Consular Relations of April 24, 1963, 21 UST 77, TIAS 6820, 596 UNTS 261, which requires consular notification of his arrest.

On September 27, 2005, the United States Court of Appeals for the Seventh Circuit determined that jurisdiction could lay on the Alien Tort Statute and remanded the case for further proceedings to the lower court.   -   Clemens Kochinke, Berliner, Corcoran & Rowe, LLP, Washington, DC.

FSIA and Trade Secrets

Visits by numerous employees of a wholly-owned business entity of a foreign government to various places of business in the United States in conjunction with commercial transactions for American equipment protected by trade secrets can mean a sufficient nexus for jurisdictional purposes under the Foreign Sovereign Immunities Act, the United States Court of Appeals for the Eighth Circuit held on August 25, 2005 in BP Chemicals Ltd. v. Jiangsu SOPO Corporation (Group) Ltd., docket number 04-1814.

In passing, the court noted that the nexus required by the commercial activities exception to the FSIA, defined in 28 USC §1603(e) as substantial contact, may imply personal jurisdiction under the constitutional minimum contacts doctrine.

The court also confirmed that the plaintiff needs to demonstrate an American nexus only with one element of the allegations of violations of a trade secret which constitutes the substance of BP's complaint against the Chinese business entity. See also Akihiro Matsui, Intellectual Property Litigation and Foreign Sovereign Immunity: International Law Limit to the Jurisdiction over the Infringement of Intellectual Property.   -   Clemens Kochinke, Berliner, Corcoran & Rowe, LLP, Washington, DC.

Arbitration with State Entity

In a matter involving a foreign state entity and arbitration between such an entity and a commercial enterprise, the Federal Arbitration Act, treaties and the issue of foreign sovereign immunity come into play.

The decision of the United States Court of Appeals for the District of Columbia Circuit of June 17, 2005, in the matter of TMR Energy Limited v. State Property Fund of Ukraine, docket 03-7191, involves such circumstances.

The appellate court rejected the Fund's jurisdictional arguments that apply to the Cyprian plaintiff's action for the enforcement in the United States of a Swedish arbitral award, as well as the contention that the arbitrators' determination of liability exceeded the scope of the arbitration agreement and violated public policy.   -   Clemens Kochinke, Berliner, Corcoran & Rowe, LLP, Washington, DC.

FSIA Protects Afghanistan

In a lawsuit by victims of the terror bombings in Nairobi, Kenya, Odilla Mutaka Mwani et al. v. Osama bin Laden and Afghanistan, no. 04-5266, the U.S. Court of Appeals for the D.C. Circuit granted Afghanistan's FSIA immunity claim on August 5, 2005 while it held in favor of the plaintiffs' claims that the co-defendants bin Laden and al Qaeda submitted themselves to the jurisdiction of American courts because they engaged in unabashedly malignant actions director at [and] felt here.  -   Clemens Kochinke, Berliner, Corcoran & Rowe, LLP, Washington, DC.

Peace Treaty Bars Third Parties

The peace treaty between Japan and the United States of America bars not only law suits before American courts by Americans against Japan for wrongs suffered during World War II but also by third parties.

This is the result of the decision by the United States Court of Appeals for the District of Columbia Circuit in the matter Hwang Geum Joo et al. v. Japan, Minister Yohei Kono, Minister of Foreign Affairs, No. 01-7169, of June 28, 2005. The U.S. government supported the decision with an amicus curiae brief.

The court held that the political solution of a peace treaty had exhausted the available avenues for redress of wrongs in the system of justice and left remaining issues in the political sphere which falls outside of the jurisdiction of the courts.

Relying on Ruhrgas AG v. Marathon Oil Co., 526 US 574 (1999), the court held that courts are free to address the political question issue for their jurisdictional analysis before turning to other jurisdictional issues such as the commercial activity exception to the immunity rules of the Foreign Sovereign Immunities Act.  -   by Clemens Kochinke, Berliner, Corcoran & Rowe, LLP, Washington, DC.

FSIA and Implicit Waiver

In the matter of Pedro Gilly Calzadilla v. Banco Latino International, Fondo de Guarantia, No. 04-10730, the U.S. Court of Appeals for the Eleventh Circuit on June 21, 2005, addressed the plaintiff's claim of an implied waiver by the defendant Venezuelan bank reinsurer, a government entity. After its collapse, the defendant sued the plaintiff, its former director, in United States courts and lost.

Calzadilla argued in his subsequent case against the agency--when he claimed damages for malicious prosecution--that the agency had implicitly waived its immunity under the Foreign Sovereign Immunities Act, 28 USC §1602 et seq., by litigating its case in the United States.

Although the agency had maintained a Florida subsidiary under the Edge Act, 12 USC §611 et seq., the court rejected Calzadilla's argument, relying on the express FSIA language in 28 USC §1605(a)(5)(B) which specifically rejects implied waivers in the case of any claim arising out of malicious prosecution.   -   Clemens Kochinke, Berliner, Corcoran & Rowe, LLP, Washington, DC.

Plunder, Expropriation and Global Business

Michael D. Murray's article Jurisdiction Under the Foreign Sovereign Immunities Act for Nazi War Crimes of Plunder and Expropriation of November 23, 2004 is now online. It details the history of sovereign immunity in the United States and the specific issues that Nazi war crimes triggered and are encountered in comparable world events.

Also, Mark S. Blodgett and Vincent A. Carrafiello's 2002 article Commercial Activity under the Foreign Sovereign Immunity Act: Gateway to Global Business and Ethics, 2 ALSBI Nt'L Bus.L.J. 65, is online in PDF format.   -   Clemens Kochinke, Berliner, Corcoran & Rowe, LLP, Washington, DC.