Embassy Law Web Log   
Washington, DC, USA      

Ammunition in Employment Disputes Over FSIA

On October 23, 2019, the United States Court of Appeals for the First Circuit in Boston provided plaintiffs and defendants with more ammunication in disputes over employment terms governing local hires at consulates and, possibly, embassies, with its interpretation of the Foreign Sovereign Immunities Act in the matter Merlini v. Canada. In the latest release, a minority opinion argues that the FSIA must be construed by its text, not merely the legislative history. As such, the opinion finds certain restraints of foreign missions incompatible with the FSIA, congressional intent as well as the interests of U.S. missions abroad:

The majority's conclusion that Canada's administration of its own statutory workers' compensation scheme here is not protected by its sovereign immunity leads to the conclusion that our government's similar actions as to employees, foreign or American, of its consulates and embassies will not be granted immunity. … By denying Canada's choice to implement a federal workers' compensation scheme the respect and deference it is entitled to, the consequences of the opinion will likely be that FECA--Congress's choice of comprehensive workers' compensation--will not be given that deference.
-- Clemens Kochinke, partner, Berliner Corcoran & Rowe LLP, Washington, DC.

China Diplomats under OFM Scrutiny: Restraints

On October 21, 2019, the Federal Register will publish two special restraints on Chinese diplomats. Under the title Determination Pursuant to the Foreign Missions Act, the State Department subjects travel plans of military staff to a prior notice requirement if the travel would exceed a distance 25 miles from Washington.

A second rule, Designation and Determination Pursuant to the Foreign Missions Act imposes a prior notification requirement for all diplomatic interactions with U.S. officials and other institutions.. Both restraints are based on the Foreign Missions Act, 22 U.S.C. 4301, et seq., and require notification of the Office of Foreign Missions. The latter scrutiny is extensive:

1. All official meetings with representatives of state, local, and municipal governments in the United States and its territories;
2. All official visits to educational institutions (public or private) in the United States and its territories; and
3. All official visits to research institutions (public or private), including national laboratories, in the United States and its territories.
The second notice requirement covers all Chinese members of the PRC's missions in the United States, including its representatives temporarily working in the United States, and accompanying Chinese dependents and members of their households. -- Clemens Kochinke, partner, Berliner Corcoran & Rowe LLP, Washington, DC.

Terrorism Pierces Sovereign Immunity for State Assets

On August 9, 2019, the United States Court of Appeals for the Second Cir­cuit af­fir­med the judgment of the United States District Court for the Southern District of New York in the case of Kirschenbaum v. Assa Corp., which classifies the De­fen­dants as a "for­eign sta­te" and "terrorist party" under two statutes, the FSIA and the TRIA. The Plain­tiffs-Appellees are victims of direct and indirect ter­rorism and ob­tained de­fault judg­ments in federal court against the Islamic Republic of Iran over the cour­se of a few decades. In an effort to execute their judgments, the victims tar­get­ed Iranian assets located in the United States by claiming they are subject to attachment and exe­cu­ti­on under these statutes.

Since the Defendant is owned and controlled by Iran through Bank Melli and acts as the alter ego of the Government of Iran, as the court determined, it qualifies as a "foreign state" under the FSIA definition of the term. The court concluded that it lacks immunity, subjecting it to the District Court's jurisdiction and its assets to attachment and execution. Additionally, as the alter ego of the Government of Iran--a state spon­sor of terrorism and therefore a "terrorist party" for TRIA purposes--Assa qualifies as a "terrorist party" under the TRIA, the court agreed. Finally, the court also found Assa to be an "agency or instrumentality" of Iran since it is ow­ned, controlled or directed by a terrorist party, meaning its property constitutes blocked assets and is subject to attachment and execution. -- Marco Stewart Lopez, legal assistant, Berliner Corcoran & Rowe LLP, Washington, DC.

SOFA Waiver of Sovereign Immunity?

In the case of James R. Moriarty v. Hashemite Kingdom of Jordan on August 6, 2019, three U.S. Special Forces members were killed while entering a Jordanian air base on November 4, 2016; the Plaintiffs, the surviving family of the service members claim that the Defendant, a service member of the Jordanian Air Force committed an act of terrorism by wrongfully killing the service members, and that the Kingdom aided and abetted the terrorist attack. In the United States District Court for the District of Columbia, the Defendant entered a motion to dismiss, claiming that the court lacks jurisdiction due to Jordan's sovereign immunity.

To establish that defendant Jordan implicitly waived it’s sovereign immunity, the plaintiffs rely on the Status of Forces Agreement between the United States and Jordan; under SOFA, United States military personal are afforded the same status to that of technical and administrative staff of the U.S. Embassy. This is a reference to the Vienna Convention in which technical staff are members of the mission, see Vienna Convention on Diplomatic Relations, art. 1(b) and 1(c), 500 U.N.T.S. 95. Members of the mission are to be given due respect by the receiving state. The plaintiffs argue that the Kingdom did not give them due respect as it did not take all appropriate steps to prevent any attack on their person, freedom or dignity under the admonition of customary international law, Vienna Convention, art. 29.

The plaintiffs offered several arguments to prove Defendant Jordan waived its immunity from suit. However, the arguments failed to prove a waiver of immunity by virtue of SOFA. The court declared that although SOFA sets fourth rules of conduct, how service members are to be treated by the receiving state and defines the status of individuals within the foreign state, SOFA fails to show that violations of these rules result in waived immunity and that suit should be brought in the U.S. -- Thomas Nelson IV, legal assistant, Berliner Corcoran & Rowe LLP, Washington, DC.

Judgment Execution Immunity for Diplomatic Property

Judgment creditor Republic of Argentina won an important argument on the timing of execution immunity when it defeated a proposed attachment of the ambassadors former residence. The residence was put up for sale and the plaintiff in TIG Insurance Co. v. Republic of Argentina filed for its attachment to partially satisfy arbitral awards. Before the court issued the writ of attachment, the defendant pulled back from the sale. At issue in the decision of the United States District Court for the District of Columbia of July 10, 2019 is when and for how long the property had a commercial quality, allowing for attachment under the exception in 28 USC §1610 to execution immunity under the Foreign Sovereign Immunities Act. The court explained:

The parties’ sole dispute is the relevant time for assessing execution immunity. TIG contends that a foreign state's property may be attached as long as it was "used for a commercial activity" at the time a motion for a writ of attachment was filed. Argentina, on the other hand, argues that the commercial activities exception applies if the property is "used for a commercial activity" at the moment a writ of attachment issues. Text, structure, history, and precedent support Argentina's reading: a property is immune from attachment unless it is "used for a commercial activity" at the time a writ of attachment issues.
After explaining its analysis and applying precedent, the court denies TIG's Motions for Emergency Relief, Attachment-Related Relief, and a Writ of Execution. -- Clemens Kochinke, partner, Berliner Corcoran & Rowe LLP, Washington, DC.
Disclaimer: The author's law firm assists embassies with FSIA matters and has represented such defendants at the appellate and Supreme Court levels.

Foreign Sovereign Immunity and forum non conveniens

The former business partners in Farhad Azima v. Rak Investment Authority entered into a Settlement Agreement after Azima claimed RAK owed another business partner for investments made during their joint venture. Their Agreement states that the parties agree to litigate all future, related claims in England.

In 2015-2016, RAKIA hired Azima to help negotiate a resolution of dispute between RAKIA and its former CEO Khater Massaad. After a tentative resolution fell apart, RAKIA blamed Azima and threatened him. Azima’s computer was hacked and his documents were published online. RAKIA then sued Azima when the publicized documents showed that Azima committed fraud during an earlier business deal. Azima filed a suit in the U.S. alleging that RAKIA violated the Computer Fraud and Abuse Act, 18 USC §1030. RAKIA moved to dismiss the suit on two grounds. First, it claimed immunity under the Foreign Sovereign Immunities Act, 28 USC §§1602-11. Second, RAKIA asserted that the Settlement Agreement submits the Parties to the exclusive jurisdiction of the courts of England and Wales, thus the court must dismiss the case on forum non conveniens grounds.

The United States Court of Appeals for the District of Columbia on June 18, 2019 concluded that the district court erroneously placed the burden on RAKIA to show that dismissal was warranted. The Court of Appeals exercised its pendent jurisdiction to reverse the denial of RAKIA’s motion to dismiss on forum non conveniens grounds with an opinion that explains the tensions between sovereign immunity and other jurisdictional principles. -- Marco Stewart Lopez, legal assistant, Berliner, Corcoran & Rowe, LLP, Washington, DC.

Expanding the Reach of U.S. Courts Abroad

The noteworthy dissent in Philipp v. Germany of June 18, 2019 submits the concern that construing exceptions under the Foreign Sovereign Immunities Act may turn federal courts into war crimes tribunals for harm caused abroad. A further concern is the disparate understanding of the exceptions by other appellate courts.

The case deals with the expropriation of property in the context of genocide. The dissenting judge of the United States Court of Appeals for the District of Columbia Circuit notes that under his court's interpretation of the statute, redress for property losses are conceivable while the loss of life in an alleged genocide may not be. -- Clemens Kochinke, partner, Berliner Corcoran & Rowe LLP, Washington, DC.

Disclaimer: The author's law firm assists embassies with FSIA matters and has represented such defendants at the appellate and Supreme Court levels.

No Skype or Social Media Graces: Age Discrimination

Her lack of familiarity with Skype and social media showed her age, a colleague noted about the plaintiff in the matter Payne v. British Embassy Washington DC. This remark formed the basis for her claim of age discrimination when she was dismissed from her employment. On May 24, 2019, the United States District Court for the District of Columbia found the allegation insufficient and dismissed this claim which requires age to be the cause of, or related to, the dismissal.

Other allegations survived this stage of the litigation, and the plaintiff may pursue her claim for an improperly entered observation in her personnel file, for instance, that she managed well the otherwise burdensome absences from the office to care for a family member with special health needs.

Among other things, the court's reasoning explains the danger of innocent or superfluous remarks, notes and observations which can cause an employer tremendous expense in defending claims, participating in the exchange of evidence during the discovery process, and possibly damages.

Absolute Immunity Dies in Supreme Court

Under the International Organizations Immunities Act of 1945, such organizations were believed, under 22 USC §288a(b), to enjoy absolute immunity from suit in United States courts. On February 27, 2019, the Supreme Court of the United States declared the absolute standard outdated and modified by the subsequent enactment of the Foreign Sovereign Immunities Act of 1976. That act abolished absolute immunity and enacted a restrictive immunity standard in 28 USC §1602, and its original protections have been greatly weakened since its enactment.

The IOIA provides for the same immunity granted states, embassies and consulates. The issue before the Supreme Court was whether same means the equivalance existing when the IOIA was enacted, or the same as the standard for states, embassies and consulates as it evolved before and after the enactment of the FSIA. In Jam v. IFC, the court decided that it is the latter. Therefore, the absolute immunity standard does not apply, and the test for the immunity of international organizations in U.S. courts will be the same as the standard applied today under the FSIA. -- Clemens Kochinke, partner, Berliner Corcoran & Rowe LLP, Washington, DC.

Court imposes Sanctions on Foreign Sovereign Nation

In a matter involving arbitration and the confirmation of an award under the New York Convention, the United States Court of Appeals for the District of Columbia Circuit imposed a sanction on the foreign sovereign defendant for procedural misconduct

Venezuela committed a second misdeed, one meriting sanctions. On January 8, 2019, Venezuela filed an emergency motion to hold this case in abeyance. The motion represented that Crystallex had requested Venezuela to seek a stay based on the purported settlement agreement. That representation was misleading. At the time Venezuela filed the emergency motion, Crystallex had declared in the press and in Third Circuit filings that Venezuela had breached the agreement. … Andrew Scurria, Bankers Hired for Citgo Auction Following Scrapped Deal With Venezuela, Wall St. J. (Dec. 12, 2018) … Venezuela's emergency motion was thus misleading and meritless. As a sanction, we believe Venezuela should pay Crystallex's reasonable attorneys' fees and costs incurred in responding to the emergency motion. D.C. Cir. R. 38.
As lies pour out of the current White House, it is good to know that courts do not tolerate them, as explained in the matter on February 14, 2019. -- Clemens Kochinke, partner, Berliner Corcoran & Rowe LLP, Washington, DC.