Peter Odhiambo v. Republic of Kenya

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued April 8, 2014 Decided August 29, 2014

No. 13-7100

PETER GEORGE ODHIAMBO,

APPELLANT

v.

REPUBLIC OF KENYA, A FOREIGN STATE, ET AL.,

APPELLEES

Appeal from the United States District Court

for the District of Columbia

(No. 1:12-cv-00441)

Robert W. Ludwig argued the cause and filed the briefs

for appellant. With him on the briefs were W. Clifton Holmes

and Thomas K. Kirui.

David I. Ackerman argued the cause for appellees. With

him on the brief was Daniel D. Barnowski.

Before: GRIFFITH, KAVANAUGH, and PILLARD, Circuit

Judges.

Opinion for the Court filed by Circuit Judge

KAVANAUGH, with whom Circuit Judge GRIFFITH joins.

2

Opinion concurring in part and dissenting in part filed by

Circuit Judge PILLARD.

KAVANAUGH, Circuit Judge: Kenya wanted to crack

down on tax evasion. So it enlisted help from the Kenyan

public. The Kenya Revenue Authority issued an ad promising

monetary rewards in exchange for information about

undisclosed taxes. Enticed by that offer, Kenyan private bank

employee Peter Odhiambo blew the whistle on hundreds of

accountholders with potential tax deficiencies. Kenya

responded by making some rewards payments to Odhiambo.

But Odhiambo claimed that he was entitled to more – millions

more. When word got out that he was an informant,

Odhiambo feared for his safety, and Kenyan officials helped

him ultimately move to the United States as a refugee.

Odhiambo then sued Kenya in federal district court in

Washington, D.C., for breach of contract based on Kenya’s

alleged underpayment of rewards to Odhiambo.

Under the Foreign Sovereign Immunities Act, foreign

governments are immune from suit in U.S. courts unless the

plaintiff’s claim falls into one of the statute’s enumerated

exceptions. See 28 U.S.C. § 1604. Odhiambo argues that his

claims satisfy the FSIA’s waiver and commercial activity

exceptions. But Kenya has not waived its immunity in U.S.

courts “either explicitly or by implication.” Id. § 1605(a)(1).

And Kenya’s alleged breach of contract – a contract that was

offered, accepted, and performed in Kenya – lacks the

connection to the United States required by the commercial

activity exception to the FSIA. See id. § 1605(a)(2). We

therefore conclude, as did the District Court, that the FSIA

bars Odhiambo’s suit. We affirm.

3

I

For most of our Nation’s history, foreign sovereigns

enjoyed virtually absolute immunity from suit in U.S. courts.

See Verlinden B.V. v. Central Bank of Nigeria, 461 U.S. 480,

486 (1983); The Schooner Exchange v. M’Faddon, 11 U.S.

116, 136-46 (1812) (Marshall, C.J.). That changed in 1952,

when the State Department and then the courts adopted the

“restrictive theory” of sovereign immunity. Under the

restrictive theory, foreign states retain immunity for sovereign

public acts but not for private commercial acts. See Republic

of Austria v. Altmann, 541 U.S. 677, 689-91 (2004);

Verlinden, 461 U.S. at 486-88. In the Foreign Sovereign

Immunities Act of 1976, Congress codified the restrictive

theory and further defined the scope of foreign sovereign

immunity. See Pub. L. No. 94-583, 90 Stat. 2891. Since then,

the FSIA has provided “the sole basis for obtaining

jurisdiction over a foreign state in our courts.” Argentine

Republic v. Amerada Hess Shipping Corp., 488 U.S. 428, 434

(1989); see Peterson v. Royal Kingdom of Saudi Arabia, 416

F.3d 83, 86 (D.C. Cir. 2005). As the Supreme Court recently

reiterated, the FSIA supplies a “comprehensive set of legal

standards governing claims of immunity in every civil action

against a foreign state.” Republic of Argentina v. NML

Capital, Ltd., 134 S. Ct. 2250, 2255 (2014) (quoting

Verlinden, 461 U.S. at 488).

Under the FSIA, a district court has subject matter

jurisdiction over a suit against a foreign state if – and only if –

the plaintiff’s claim falls within a statutorily enumerated

exception. See 28 U.S.C. §§ 1330(a), 1604, 1605. In other

words, the FSIA exceptions are exhaustive; if no exception

applies, the district court has no jurisdiction. See Saudi

Arabia v. Nelson, 507 U.S. 349, 355 (1993); Peterson, 416

F.3d at 86.

4

Two FSIA exceptions are relevant to this case. The first

is the waiver exception, which permits a suit when “the

foreign state has waived its immunity either explicitly or by

implication.” Id. § 1605(a)(1). The second is the commercial

activity exception, which permits a suit when “the action is

based [1] upon a commercial activity carried on in the United

States by the foreign state; or [2] upon an act performed in the

United States in connection with a commercial activity of the

foreign state elsewhere; or [3] upon an act outside the territory

of the United States in connection with a commercial activity

of the foreign state elsewhere and that act causes a direct

effect in the United States.” Id. § 1605(a)(2).

The dispute here arises from an “Information Reward

Scheme” developed by the Kenya Revenue Authority to enlist

public cooperation in enforcing Kenya’s tax laws. The

scheme “rewards persons who provide information as below:

Information leading to the identification of

hitherto undisclosed taxes – a reward amounting

to 1% of the tax identified [up to] a maximum of

[100,000 Kenyan shillings].

Information leading to the recovery of hitherto

undisclosed taxes – a reward amounting to 3% of

the taxes collected.”

J.A. 16. In essence, the rewards program encouraged

whistleblowers to come forward with information about tax

evasion by offering them a share of the proceeds – not unlike

our country’s False Claims Act or the common law qui tam

action. See 31 U.S.C. §§ 3729-3733; Vermont Agency of

Natural Resources v. United States ex rel. Stevens, 529 U.S.

765, 768 & n.1, 774-77 (2000).

5

The rewards program had its intended effect on Peter

Odhiambo, an auditor at a private Kenyan bank called

Charterhouse Bank. In April 2004, Odhiambo turned over

records implicating more than 800 accountholders in possible

tax evasion. The Kenya Revenue Authority rewarded

Odhiambo with an initial payment of 200,000 Kenyan

shillings (about $2,600). A year later, the Authority made an

additional payment of roughly 250,000 Kenyan shillings

(about $3,300).

At some point, Charterhouse apparently learned that

Odhiambo was the informant behind the investigation.

Odhiambo then reported receiving disquieting phone calls

telling him to leave Kenya. He was also the victim of alleged

police harassment, which he reported to the Kenya National

Commission on Human Rights. Believing Odhiambo’s safety

at risk, Kenyan officials supported his application for asylum

in the United States. He was granted asylum and arrived here

as a refugee in September 2006.

Before and after his relocation, Odhiambo insisted that

Kenya owed him more money for the tips that he had

provided about tax evasion at Charterhouse. Odhiambo

pressed his claims through written correspondence and in

face-to-face meetings with Kenyan officials in the United

States. Still unsatisfied, Odhiambo sued Kenya for breach of

contract in federal district court in Washington, D.C. He

sought approximately $24.5 million in damages to

compensate him for Kenya’s alleged underpayment of

rewards. See Odhiambo v. Republic of Kenya, 930 F. Supp.

2d 17, 20-24 (D.D.C. 2013) (Odhiambo I).

Kenya moved to dismiss Odhiambo’s complaint based on

its sovereign immunity to suit in U.S. courts. The District

Court agreed with Kenya that the FSIA bars the suit. See id.

6

at 23-35. We review the District Court’s sovereign immunity

determination de novo. See Cruise Connections Charter

Management 1, LP v. Attorney General of Canada, 600 F.3d

661, 664 (D.C. Cir. 2010).

II

Odhiambo invokes two FSIA exceptions to establish

district court jurisdiction over his suit: the waiver and

commercial activity exceptions. We consider each in turn.

A

Odhiambo first contends that the FSIA does not bar his

suit because the waiver exception applies. The waiver

exception provides in relevant part that sovereign immunity

will not apply when a “foreign state has waived its immunity

either explicitly or by implication.” 28 U.S.C. § 1605(a)(1).

In the district court, Odhiambo argued that Kenya had

implicitly waived its sovereign immunity to suit in the United

States by facilitating his asylum here. In essence,

Odhiambo’s claim was that Kenya should not be allowed to

collect both the benefits of his performance on the contract

and the benefits of sovereign immunity while simultaneously

reneging on its bargain and creating an environment in which

he had to flee the country. The District Court rejected that

conception of implicit waiver as inconsistent with the case

law, which has found implicit waiver only where the foreign

state had “at some point indicated its amenability to suit.”

Odhiambo v. Republic of Kenya, 930 F. Supp. 2d 17, 24

(D.D.C. 2013) (Odhiambo I) (quoting Princz v. Federal

Republic of Germany, 26 F.3d 1166, 1174 (D.C. Cir. 1994)).

Odhiambo does not renew this argument on appeal, so we do

not consider it.

7

Odhiambo now claims that Kenya waived its sovereign

immunity with respect to claims like his when it acceded to

the 1951 Convention Relating to the Status of Refugees. We

disagree for two alternative and independent reasons. First, in

his submissions to the district court, Odhiambo did not

mention the Refugee Convention, much less contend that

Kenya’s accession constituted a waiver of sovereign

immunity in U.S. courts. Odhiambo has therefore forfeited

this argument. See World Wide Minerals, Ltd. v. Republic of

Kazakhstan, 296 F.3d 1154, 1161 & n.10 (D.C. Cir. 2002).

Second, even if we were to overlook Odhiambo’s failure to

timely raise this argument, it would have little merit. The

ambiguous and generic language of the Refugee Convention

falls far short of the exacting showing required for waivers of

foreign sovereign immunity. See id. at 1162. Indeed, the

Supreme Court has explained that it cannot “see how a

foreign state can waive its immunity under § 1605(a)(1) by

signing an international agreement that contains no mention

of a waiver of immunity to suit in United States courts.”

Argentine Republic v. Amerada Hess Shipping Corp., 488

U.S. 428, 442 (1989). The waiver exception to the FSIA does

not permit Odhiambo’s suit.

B

Odhiambo next relies on the commercial activity

exception. That exception applies when

the action is based [1] upon a commercial activity

carried on in the United States by the foreign state; or

[2] upon an act performed in the United States in

connection with a commercial activity of the foreign

state elsewhere; or [3] upon an act outside the territory

of the United States in connection with a commercial

8

activity of the foreign state elsewhere and that act

causes a direct effect in the United States.

28 U.S.C. § 1605(a)(2).

1

Clause one of the commercial activity exception permits

a suit against a foreign sovereign when the plaintiff’s “action

is based upon a commercial activity carried on in the United

States by the foreign state.” Id. § 1605(a)(2). The FSIA in

turn defines the phrase “commercial activity carried on in the

United States by a foreign state” to mean “commercial

activity carried on by such state and having substantial

contact with the United States.” Id. § 1603(e). Thus, to

invoke the district court’s jurisdiction under clause one, the

plaintiff’s claim must be “based upon some commercial

activity by” the foreign state “that had substantial contact with

the United States.” Saudi Arabia v. Nelson, 507 U.S. 349,

356 (1993) (internal quotation marks omitted).

In the district court, Odhiambo alleged several instances

of commercial activity by Kenya that had substantial contact

with the United States, including the meetings that Kenyan

officials held with him in the United States to discuss the

disputed rewards. The problem for Odhiambo is that his

breach-of-contract claim is not “based upon” that activity. 28

U.S.C. § 1605(a)(2) (emphasis added). As the Supreme Court

has explained, a claim is “based upon” commercial activity if

the activity establishes one of the “elements of a claim that, if

proven, would entitle a plaintiff to relief under his theory of

the case.” Nelson, 507 U.S. at 357. In other words, the

alleged commercial activity must establish “a fact without

which the plaintiff will lose.” Kirkham v. Société Air France,

429 F.3d 288, 292 (D.C. Cir. 2005); see Goodman Holdings v.

9

Rafidain Bank, 26 F.3d 1143, 1146 (D.C. Cir. 1994)

(commercial activity unrelated to elements of claim is “legally

irrelevant”). Odhiambo does not seriously contend that his

meetings with Kenyan officials in the United States establish

any fact without which his breach-of-contract claim will fail.

He therefore cannot proceed under clause one.

On appeal, Odhiambo asserts a new twist. He contends

that (i) Kenya’s rewards offer constitutes a commercial

activity by a foreign state on which his claim is based, and (ii)

the asserted commercial activity had substantial contact with

the United States because of his meetings with Kenyan

officials in the United States.1 As an initial matter, Odhiambo

failed to raise this argument in the district court and therefore

has forfeited it. But even if we consider Odhiambo’s new

theory, his interpretation of clause one is doubly flawed under

our case law. First, our cases have held that mere business

meetings in the United States do not suffice to create

substantial contact with the United States for these purposes.

See Zedan v. Kingdom of Saudi Arabia, 849 F.2d 1511, 1513

(D.C. Cir. 1988); Maritime International Nominees

Establishment v. Republic of Guinea, 693 F.2d 1094, 1109

(D.C. Cir. 1982). Second, our cases make clear that clause

one requires a plaintiff’s claim to be “based upon” the aspect

of the foreign state’s commercial activity that establishes

substantial contact with the United States. Our decision in

Kirkham illustrates that rule. There, we considered a claim by

an airline passenger who had purchased a ticket in the United

States and alleged an injury negligently caused by an Air

France employee in France. We did not, as Odhiambo

1

The District Court assumed without deciding that the rewards

offer was a commercial activity. See Odhiambo v. Republic of

Kenya, 930 F. Supp. 2d 17, 26 (D.D.C. 2013) (Odhiambo I).

Kenya appears to accept that premise on appeal.

10

proposes here, ask first whether her claim was based on

commercial activity by France and then ask independently

whether that commercial activity had substantial contact with

the United States. Instead, reasoning from the Supreme

Court’s decision in Nelson, we explained that the “sole

question before us” was whether the plaintiff’s negligence

claim was based upon her ticket purchase in the United States

– that is, whether her claim was based upon the aspect of the

foreign state’s commercial activity that establishes substantial

contact with the United States. Kirkham, 429 F.3d at 291; see

Nelson, 507 U.S. at 356-58. That is precisely the approach to

clause one that Justice White articulated in his concurring

opinion in Nelson. See Nelson, 507 U.S. at 364-65, 370

(White, J., concurring).

Kirkham’s interpretation of Nelson is fatal to Odhiambo’s

argument. As explained above, the only aspect of Kenya’s

commercial activity that allegedly established substantial

contact with the United States – his meetings with Kenyan

officials in the United States – is not necessary to make out

any element of his breach-of-contract claim. Recognizing as

much, Odhiambo essentially concedes that Kirkham

forecloses his argument. See Odhiambo Reply Br. 13, 16, 21-

22. Odhiambo suggests that Kirkham was “implicitly

overruled” by Permanent Mission of India to the United

Nations v. New York, 551 U.S. 193 (2007). Id. at 21. But that

case had nothing to do with the commercial activity

exception. This panel must follow Kirkham. And in any

event, Kirkham is correct. Clause one of the commercial

activity exception does not permit Odhiambo’s suit.

2

Clause two of the commercial activity exception allows a

suit against a foreign sovereign when the plaintiff’s claim is

11

based “upon an act performed in the United States in

connection with a commercial activity of the foreign state

elsewhere.” 28 U.S.C. § 1605(a)(2). Even assuming that

Odhiambo alleged an act that fits that definition, Odhiambo’s

clause two argument falters on the same grounds as his clause

one argument: His breach-of-contract claim is not based

upon any alleged “act performed in the United States in

connection with” Kenya’s commercial activity. Cf. Nelson,

507 U.S. at 357; Kirkham, 429 F.3d at 292; Goodman, 26

F.3d at 1145-46.

To be sure, Nelson, Kirkham, and Goodman interpreted

the phrase “based upon” in clause one, not clause two. But

the virtually identical statutory text and structure of clauses

one and two lead us to conclude that “based upon” means the

same thing in both clauses. See Powerex Corp. v. Reliant

Energy Services, Inc., 551 U.S. 224, 232 (2007); IBP, Inc. v.

Alvarez, 546 U.S. 21, 34 (2005). Indeed, although Odhiambo

disagrees with our interpretation of “based upon” in clause

one, he does not argue that those same words mean something

different in clause two. And to the degree that the text leaves

any ambiguity, the legislative history is “crystal clear” that

clause two’s reference to acts “performed in the United States

in connection with a commercial activity of the foreign state

elsewhere” is “limited to those” acts “which in and of

themselves are sufficient to form the basis of a cause of

action.” Zedan, 849 F.2d at 1514 (quoting H.R. REP. NO. 94-

1487, at 19 (1976)); see S. REP. NO. 94-1310, at 18 (1976)

(same).

In sum, a suit against a foreign sovereign may proceed

under clause two only if the “act performed in the United

States in connection with a commercial activity of the foreign

state elsewhere” establishes a fact without which the plaintiff

12

will lose. See Nelson, 507 U.S. at 357; Kirkham, 429 F.3d at

292. None of the acts cited by Odhiambo satisfies that test.

3

The closest question in this case arises from clause three

of the commercial activity exception. Clause three permits a

suit against a foreign sovereign when the plaintiff’s claim is

based “upon an act outside the territory of the United States in

connection with a commercial activity of the foreign state

elsewhere and that act causes a direct effect in the United

States.” 28 U.S.C. § 1605(a)(2). We agree with Odhiambo

that his suit satisfies the first part of clause three: His claim is

based upon the “act” of Kenya’s alleged breach of contract,

which happened outside the United States in connection with

the rewards offer – a presumptively commercial activity of

the Kenyan government. The question remaining is whether

Kenya’s alleged breach of the rewards offer caused a “direct

effect in the United States” given that Odhiambo now resides

in the United States.

The leading Supreme Court case on the meaning of

“direct effect” is Republic of Argentina v. Weltover, Inc., 504

U.S. 607 (1992). In Weltover, the Supreme Court considered

whether Argentina’s decision to delay payments on certain

bonds caused a direct effect in the United States. The Court

explained that “an effect is ‘direct’ if it follows as an

immediate consequence of the defendant’s” activity.

Weltover, 504 U.S. at 618 (internal quotation marks omitted).

The Court reasoned that Argentina’s delay of the bond

payments caused a direct effect in the United States because

the bond contract had established the United States as a “place

of performance.” Id. at 619. More specifically, the contract

provided for payment in U.S. dollars and directed investors to

elect one of four payment locations, including New York.

13

Thus, at the moment the contract was formed, Argentina

assumed “contractual obligations” to pay the bondholders in

New York (or one of the three other designated locations). Id.

The investors in Weltover chose New York as their place of

payment, and Argentina made payments to their New York

accounts. See id. When Argentina breached its contractual

obligations by failing to make bond payments that were

“supposed to have been delivered to a New York bank,” its

breach had a direct effect in the United States. Id.

Like Weltover, this Court’s direct effect cases involving

alleged breaches of contract have turned on whether the

contract in question established the United States as a place of

performance. That approach follows from the text and

purpose of the FSIA. By definition, breaching a contract that

establishes the United States as a place of performance will

have a direct effect here, whereas breaching a contract that

establishes a different or unspecified place of performance

can affect the United States only indirectly, as the result of

some intervening event such as the plaintiff’s move to this

country. See Princz v. Federal Republic of Germany, 26 F.3d

1166, 1172 (D.C. Cir. 1994). Construing clause three to

permit suits in that latter category would create an incentive

for every breach of contract victim in the world to move to the

United States, demand payment here, and then sue alleging a

direct effect of nonpayment in the United States. That result

would contradict the statutory term “direct” and undermine

Congress’s objective of avoiding turning U.S. courts into

“small international courts of claims.” Verlinden B.V. v.

Central Bank of Nigeria, 461 U.S. 480, 490 (1983) (internal

quotation marks omitted).

This Court’s decision in Peterson v. Royal Kingdom of

Saudi Arabia, 416 F.3d 83 (D.C. Cir. 2005), illustrates our

place of performance rule and dictates our result here. In that

14

case, an American who had worked in Saudi Arabia but

resided in the United States claimed that he was contractually

entitled to a refund of employee contributions that he had paid

to the Saudi government. We held that Saudi Arabia’s

alleged breach of the contract did not create a direct effect in

the United States. Even though Peterson was in the United

States at the time of the asserted breach, and even though the

Court assumed that Saudi government “understood” as much,

the contract included “no agreement – implied or express –

that Peterson was to be paid in the United States.” Peterson,

416 F.3d at 90-91. On the contrary, the contract envisioned

that the Saudi government would refund the employee’s

money to him wherever he was when the payment came due.

Of critical importance to our case, the Court in Peterson held

that such a “pay wherever you are” arrangement does not

suffice to create a direct effect in the United States. See id.

Likewise, in Goodman, this Court concluded that there

was no direct effect where the foreign sovereign “might well

have paid” its contract partner through a bank account in the

United States but “might just as well have done so” outside

the United States. Goodman, 26 F.3d at 1146-47. Similarly,

in Zedan, the Court held that there was no direct effect when

the allegedly breached contract required the foreign sovereign

to “forward the money to” the other party “wherever he chose

to travel.” Zedan, 849 F.2d at 1514.

In Cruise Connections Charter Management 1, LP v.

Attorney General of Canada, 600 F.3d 661 (D.C. Cir. 2010),

this Court again observed that “harm to a U.S. citizen, in and

of itself, cannot satisfy the direct effect requirement.” Cruise

Connections, 600 F.3d at 665 (citing Zedan, 849 F.2d at

1515). The Court in that case went on to find a direct effect

based on Canada’s alleged breach of a contract that required a

U.S. company “to subcontract with two U.S.-based cruise

15

lines” to provide ships during the Vancouver Olympics. Id. at

662. Because “the contract itself required the ships to come

from” U.S.-based cruise lines, Canada’s alleged breach “led

inexorably to the loss of revenues” by the U.S. company in

the United States, just as Argentina’s breach of the bond

contract led to a loss of revenues for the investors who had

designated New York as a place of payment in Weltover. Id.

at 665.

Applying that same place of performance rule, this Court

in De Csepel v. Republic of Hungary, 714 F.3d 591 (D.C. Cir.

2013), found that the plaintiffs had adequately alleged a direct

effect in the United States by asserting that Hungary had

breached a bailment contract obligating it to return artwork to

individuals in the United States. The key to the Court’s

reasoning was that Hungary had, in forming the bailment

contract, “promised to perform specific obligations in the

United States.” De Csepel, 714 F.3d at 600-01. Thus, from

the moment of contract formation, the United States was a

contractually designated place of performance. The Court

emphasized twice that Hungary “knew” the owners of the

borrowed artwork “to be residing in the United States” at the

time Hungary formed the bailment agreement. Id. at 601; see

id. (Hungary “knew at all relevant times that the Herzog Heirs

owned the Herzog Collection and that certain of the Herzog

Heirs resided in the United States”) (quoting Complaint ¶ 36)

(emphasis added); De Csepel Br. 50 (“United States residents

owned portions of the Herzog Collection” “at the time the

bailments were created” and Hungarian officials “knew that

to be the case when they created bailment agreements”)

(emphases added). And the Court expressly contrasted

Hungary’s promise to perform specific obligations in the

United States with the facts of a case in which the Sixth

Circuit declined to find a direct effect in the United States

because the plaintiffs had not alleged that the foreign state

16

“ever promised to deliver the art collection to the United

States.” De Csepel, 714 F.3d at 601 (quoting Westfield v.

Federal Republic of Germany, 633 F.3d 409, 415 (6th Cir.

2011)) (alteration omitted).

In short, Hungary’s knowledge – from the moment the

bailment agreement was formed – that performing its

contractual obligations would require it to return the artwork

to owners in the United States was crucial to the Court’s

finding of a “direct effect in the United States” and to its

explanation of why the case was not covered by precedents

such as Peterson. Indeed, the De Csepel Court cited Peterson

immediately before explaining the relevance of Hungary’s

knowledge at the time it formed that contract that the owners

of the artwork were residing in the United States. See id.

(quoting Peterson, 416 F.3d at 90). We see no indication that

the De Csepel Court intended to (or did) depart from Peterson

or our other “direct effect” precedents in any way.

To summarize, this Court’s cases draw a very clear line:

For purposes of clause three of the FSIA commercial activity

exception, breaching a contract that establishes or necessarily

contemplates the United States as a place of performance

causes a direct effect in the United States, while breaching a

contract that does not establish or necessarily contemplate the

United States as a place of performance does not cause a

direct effect in the United States.

In presenting his case for a direct effect, Odhiambo does

not argue that his U.S. presence or U.S. citizenship alone

suffices to create a direct effect in the United States. As

explained above, the relevant precedents would foreclose any

such contention. See, e.g., Cruise Connections, 600 F.3d at

665 (citing Zedan, 849 F.2d at 1515); Peterson, 416 F.3d at

90-91. Instead, Odhiambo tries to model his claim on De

17

Csepel by suggesting that the contract established or

necessarily contemplated the United States as a place of

performance. But nothing in Kenya’s rewards offer suggested

that the United States might be a place of performance. If the

contract designated any place of performance, that place

would be Kenya, because the contract expressly provided that

rewards would be paid in Kenyan shillings. See J.A. 16; cf.

Weltover, 504 U.S. at 609, 619 (noting that Argentine bond

contract that created direct effect in the United States

provided for payment in U.S. dollars). Otherwise, the

contract simply established the kind of “pay wherever you

are” arrangement that we have repeatedly held – particularly

in cases like Peterson – insufficient to cause a direct effect in

the United States. Put another way, no one could look at

Kenya’s rewards offer and reasonably conclude that Kenya

“promised to perform specific obligations in the United

States” or was “supposed to” pay recipients in the United

States. De Csepel, 714 F.3d at 600-01; Weltover, 504 U.S. at

619; Peterson, 416 F.3d at 90; Goodman, 26 F.3d at 1146.

Kenya’s alleged breach of its obligations therefore did not

create a direct effect in the United States. On the contrary, as

the District Court found, the effect in the United States arose

only after a variety of intervening events, including the

unveiling of Odhiambo’s role as a whistleblower, Odhiambo’s

phone call to a Kenyan newspaper and the subsequently

published story, Odhiambo’s outreach to Kenya’s Human

Rights Commission, and Odhiambo’s move to the United

States as a refugee. See Odhiambo I, 930 F. Supp. 2d at 32.

In our view, we could not rule for Odhiambo on this point

without departing substantially from our precedents. See

Princz, 26 F.3d at 1172 (a direct effect “has no intervening

element, but, rather, flows in a straight line without deviation

or interruption”) (internal quotation marks omitted).

18

In reaching that conclusion, we also note an Eleventh

Circuit precedent on a factually similar question. See

Guevara v. Republic of Peru, 608 F.3d 1297 (11th Cir. 2010)

(Guevara II). In Guevara II, Peru issued a public reward

offer in return for information that would directly enable the

locating and capture of a high-profile fugitive. During a trip

to Miami, one of the fugitive’s associates, Guevara, gave up

the fugitive’s location to the FBI and demanded the reward.

When the Peruvian government refused to pay, Guevara sued

for breach of contract in South Florida’s federal court. The

Eleventh Circuit concluded that Peru’s alleged breach of the

reward offer did not cause a direct effect in the United States.

See id. at 1300-02, 1309-10. In short, Guevara’s mere

presence in the United States and demand for payment here

did not suffice to create an effect arising directly from the

breach of a contract offered in Peru that never established or

contemplated the United States as a place of performance. So

too here.2

Odhiambo alternatively contends that Kenya modified

the contractual place of performance by helping him resettle

in the United States and knowingly making payments that

reached him here. That contention falters on multiple fronts.

2

Odhiambo relies on the Ninth Circuit’s decision finding a

direct effect in Adler v. Federal Republic of Nigeria, 107 F.3d 720

(9th Cir. 1997). But in Adler, the contract expressly required the

investors to designate an out-of-country location of payment. See

Adler, 107 F.3d at 727. Here, by contrast, nothing in Kenya’s

rewards offer allowed – much less required – claimants to demand

payment in particular locations. So even if we agreed with the

Ninth Circuit’s looser approach to the direct effect prong of the

analysis, we would still conclude that Odhiambo’s suit does not fall

within clause three under Adler.

19

First, Odhiambo failed to allege any payments in the

United States in his first amended complaint – or at any time

prior to the District Court’s judgment – even though he

apparently received those payments years before he filed his

complaint. The District Court therefore did not need to

consider those allegations. See Exxon Shipping Co. v. Baker,

554 U.S. 471, 485 n.5 (2008).

Second, even if we were to consider Odhiambo’s

allegations, they do not demonstrate that Kenya manifested

the consent necessary to modify the contract. Odhiambo

offers no reason to believe that Kenya’s assistance in his

asylum application had any impact on the place of

performance designated in the rewards offer. Although

Kenya knows that Odhiambo is in the United States, that

alone does not suffice. Kenya has not, in the words of De

Csepel, “promised to perform specific obligations in the

United States.” De Csepel, 714 F.3d at 600-01. Indeed, far

from agreeing with Odhiambo that the contract designates the

United States as a place of performance, Kenya has

continually refused to issue any payments outside Kenya.

Odhiambo has therefore received the payments in the United

States only through an intermediary in Kenya who obtained

the payments in Kenya and then sent them to Odhiambo.

Again, that is a far cry from De Csepel, in which the contract

never envisioned performance anywhere other than the

United States. See id.

Third, Odhiambo’s allegation that he received a payment

from the Kenyan government through the Kenyan

intermediary while he was in Tanzania further undercuts his

claim that the United States was a contractually designated

place of performance. In short, the evidence shows this:

When Odhiambo was in Kenya, Kenya made payment in

Kenya. When Odhiambo was in Tanzania, Kenya made

20

payment to an intermediary in Kenya, and that intermediary

later transferred the money to Odhiambo in Tanzania. When

Odhiambo was in the United States, Kenya made payment to

an intermediary in Kenya, and that intermediary later

transferred the money to Odhiambo in the United States. If

Odhiambo were to move somewhere else, we see no reason to

doubt that Kenya would make any further payments in Kenya,

and that the money would be transferred by an intermediary to

Odhiambo in his new locale. That record further buttresses

the conclusion that the contract operated precisely as the kind

of “pay wherever you are” arrangement that we rejected as a

basis for jurisdiction over foreign states in Peterson and

Goodman.

Odhiambo nonetheless suggests that our direct effect

analysis should apply differently here because Kenya

arranged for him to seek asylum in the United States. See

Odhiambo Br. 50; Odhiambo Reply Br. 25-26. Under his

theory, refugees would be allowed to bring suits in U.S.

courts against their former sovereigns if those sovereigns

played a role in the refugees’ relocation to the United States.

Whatever the wisdom of that proposed refugee exception as a

policy matter, the FSIA does not recognize it. So neither can

we. We must adhere to the text of the statute, especially in

FSIA cases. See Republic of Argentina v. NML Capital, Ltd.,

134 S. Ct. 2250, 2255-56 (2014). As we explained above, the

FSIA is the sole way for a plaintiff suing a foreign sovereign

to invoke the jurisdiction of U.S. courts, and the exceptions

enumerated by the FSIA are exhaustive. See Nelson, 507 U.S.

at 355; Peterson, 416 F.3d at 86; cf. Law v. Siegel, 134 S. Ct.

1188, 1196 (2014) (enumeration of exemptions “confirms that

courts are not authorized to create additional exceptions”). In

other words, any claim to a FSIA exception “must stand on

the Act’s text. Or it must fall.” NML Capital, 134 S. Ct. at

21

2256. Odhiambo’s proposed refugee exception cannot stand

on the FSIA’s text. So it must fall.

To be sure, Congress and the President of course may

enact new legislation to amend the FSIA and include an

exception of the kind that Odhiambo proposes. But until then,

the role of this Court “is to apply the statute as it is written –

even if we think some other approach might accord with good

policy.” Burrage v. United States, 134 S. Ct. 881, 892 (2014)

(internal quotation marks and alterations omitted); see NML

Capital, 134 S. Ct. at 2258 (“[t]he question . . . is not what

Congress ‘would have wanted’ but what Congress enacted in

the FSIA”) (quoting Weltover, 504 U.S. at 618).

***

None of the FSIA exceptions asserted by Odhiambo

applies to this case. His suit therefore cannot proceed. We

affirm the judgment of the District Court.3

So ordered.

3

The District Court did not abuse its discretion in denying

Odhiambo’s motion for reconsideration and leave to file a second

amended complaint. Odhiambo’s only plausible argument was that

he had new evidence, but the District Court reasonably concluded

that the evidence was not new. See Odhiambo v. Republic of

Kenya, 947 F. Supp. 2d 30 (D.D.C. 2013) (Odhiambo II); see also

Ciralsky v. CIA, 355 F.3d 661, 668, 671-73 (D.C. Cir. 2004).

PILLARD, Circuit Judge, concurring in part and dissenting

in part: I agree with the majority that this case involves

commercial activity under the Foreign Sovereign Immunities

Act, and that neither the waiver exception to the Act nor

either of the first two clauses of the FSIA’s commercial

activity exception applies to permit Peter Odhiambo’s suit. I

write separately to explain why I believe that this case should

have been allowed to proceed under the third clause of the

commercial activity exception.

Odhiambo’s claim is based on “an act outside the

territory of the United States in connection with a commercial

activity of the foreign state elsewhere . . . that . . . cause[d] a

direct effect in the United States.” 28 U.S.C. § 1605(a)(2).

An effect in the United States in connection with a

sovereign’s commercial activity abroad is “direct” under the

third clause of the FSIA’s commercial activities exception “if

it follows as an immediate consequence of the defendant’s

activity.” Republic of Arg. v. Weltover, Inc., 504 U.S. 607,

618 (1992) (internal quotation marks and ellipsis omitted).

To be “direct,” the effect need be neither “substantial” nor

“foreseeable,” so long as it is more than “purely trivial.” Id.

The facts that Odhiambo alleges, and the reasonable

inferences drawn in his favor from those facts, support the

conclusion that there is a direct effect in the United States

caused by actions of Kenya in connection with a commercial

activity. Various of Kenya’s actions in connection with the

reward contract that forms the basis of Odhiambo’s claim

constitute “direct effects,” including:

Kenya offered rewards to members of the public for

information about tax evasion, without limiting the

offer to Kenyan nationals or residents, and without

specifying the place of performance of such contract;

2

The offer contained the promise that the Kenyan

government would keep informants’ identities secret

in order to protect them from reprisals, but Kenya

failed to keep Odhiambo’s whistle blowing secret,

thereby exposing him to threats against his life and

those of his family members, in response to which

Kenyan government officials actively assisted in

resettling Odhiambo as a refugee in the United States;

Exiled in the United States, Odhimabo necessarily

experiences here the direct effect of Kenya’s

continued failure to pay.

In sum, Odhiambo is present here, cannot safely return to

Kenya, and experiences Kenya’s non-payment here in the

United States as the “immediate consequence” of Kenya’s

actions.

The FSIA requires that we consider all facts relevant to

whether the unlawful conduct of a foreign sovereign acting in

its commercial capacity had a “direct effect” in the United

States. We are bound to do so by the statute’s terms, the

Supreme Court’s decision in Weltover, 504 U.S. 607, and our

own court’s FSIA precedents, see, e.g., De Csepel v. Republic

of Hung., 714 F.3d 591 (D.C. Cir. 2013); Cruise Connections

Charter Mgmt. 1, LP v. Att’y Gen. of Can., 600 F.3d 661

(D.C. Cir. 2010).

The majority’s determination that the lack of a place-of-

performance clause defeats Odhiambo’s claim misconstrues

the FSIA’s direct-effects analysis. The court’s opinion

misreads the prior cases to “turn[] on whether the contract in

question established the United States as a place of

performance.” Slip Op. at 13. But our decision in Cruise

Connections explicitly held to the contrary, that “[t]he

3

FSIA . . . requires only that [the] effect [in the United States]

be ‘direct,’ not that the foreign sovereign agree that the effect

would occur” in the United States. 600 F.3d at 665 (emphasis

added). In conflict with Cruise Connections, the majority

insists that, unless the plaintiff can point to a contract term

explicitly or implicitly designating the United States as the

place of performance, any claim arising from foreign

commercial activity affects the U.S. “only indirectly” and thus

is barred by the FSIA. Slip Op. at 13. I disagree.

Not every claim that relates to a foreign sovereign’s

commercial activity must be governed by a place-of-

performance clause, such as one might expect to find in a

commercial contract, before the claim may proceed under our

FSIA direct-effect clause precedents. Indeed, claims based on

actions “in connection with” commercial activity need not

even be contract claims. See, e.g., Princz v. Fed. Republic of

Ger., 26 F.3d 1166, 1168 (D.C. Cir. 1994) (claiming false

imprisonment, assault and battery, negligent and intentional

infliction of emotional distress, and quantum meruit). But see

28 U.S.C. § 1605(a)(5)(B) (recognizing immunity for

noncommercial torts with respect to “any claim arising out of

malicious prosecution, abuse of process, libel, slander,

misrepresentation, deceit, or interference with contract

rights”). Even where the claim does arise out of a contract,

specification of the anticipated place of performance is

especially unlikely in a case such as this one, involving a

unilateral contract drafted by the foreign government whose

own inability to protect the plaintiff accounts for his having to

flee, cf. De Csepel, 714 F.3d 591, especially when that

government’s own officials helped to direct the plaintiff to the

United States. It is common ground that, in cases in which

parties engage in commercial activities abroad and a plaintiff

thereafter unilaterally decides to relocate to the United States

where he then seeks to enforce claims relating to the foreign

4

commercial activity, the direct-effects requirement is not

satisfied. See, e.g., Peterson v. Royal Kingdom of Saudi

Arabia, 416 F.3d 83 (D.C. Cir. 2005); Zedan v. Kingdom of

Saudi Arabia, 849 F.2d 1511 (D.C. Cir. 1988). But the result

should be different where, for example, a foreign government

hires an American employee or firm abroad without

specifying place of performance, and, once the work is

complete, reneges on payment and deports the employee to

the United States. Where a foreign government causes a

plaintiff to leave its country and helps direct him to the United

States, as is alleged here, the FSIA should not bar suit against

it in United States courts.

To the extent that the majority opinion is simply a fact-

specific application of Weltover and our precedents, I believe

it is in error for the reasons I explain. But the majority

opinion appears to go further, to create a new legal rule for

FSIA direct-effect clause claims, requiring an express or

implied place-of-performance clause specifying the United

States. Any such rule is in conflict with Weltover and our

own decisions, so cannot have binding effect. See United

States v. Old Dominion Boat Club, 630 F.3d 1039, 1045 (D.C.

Cir. 2011) (“[W]hen a conflict exists within our own

precedent, we are bound by the earlier decision.” (citing

Indep. Cmty. Bankers of Am. v. Bd. of Governors of the Fed.

Reserve Sys., 195 F.3d 28, 34 (D.C. Cir. 1999))).

I.

Odhiambo, a professional auditor at a private commercial

bank in Kenya, accepted his government’s unilateral offer of a

reward for information revealing tax fraud. The “Information

Reward Scheme” promised a 1% bounty for information

leading to the identification of “hitherto undisclosed taxes,”

and 3% for information leading to their recovery. J.A. 16.

5

The published offer called on the public to share such

information, and promised that “volunteers are assured of

strict confidentiality to safeguard identities.” Id. The offer

included e-mail addresses as well as other contact

information, and did not geographically place any limit on the

sources from whence whistleblowers might provide the

needed information.

Odhiambo responded to the Kenyan government’s offer

by providing reliable information about a widespread scheme

of criminal tax evasion that was being operated through the

private commercial bank at which he worked. The scheme

was so extensive that, once the government learned of it and

appointed a task force to investigate, the bank was placed

under statutory management and ultimately forced to close.

(By that time, Odhiambo had left its employ and was working

at the Central Bank of Kenya.) The information Odhiambo

submitted led to detection of hundreds of millions of dollars

in unpaid taxes and the recovery of a large part of that figure.

Kenya began to fulfill its end of the bargain by giving

Odhiambo initial payment of a token sum to show its

appreciation, followed by a percentage payment relating to

only a small fraction of the fraud he identified.

Kenya failed to keep Odhiambo’s identity secret, despite

its promise. He received anonymous phone calls telling him

to leave Kenya. As the bank investigation intensified, police

officers with “a bogus warrant” confronted Odhiambo at work

and sought to search his home—an effort that Odhiambo

managed to deflect with the help of the Central Bank’s

governor and that the police did not then pursue. J.A. 7.

Odhiambo received more threatening phone calls and

“suspicious people were seen lurking around his house.” Id.

6

Odhiambo’s performance under the reward contract and

leaks regarding his identity as the whistleblower led directly

to death threats against him and forced Odhiambo into exile in

the United States. Before he left the country, Odhiambo

moved his residence twice and changed his phone number. It

was the Kenyan government that facilitated Odhiambo’s

flight as a refugee, and that helped to select the United States

as his destination. Various Kenyan governmental agencies

and officials sought to help Odhiambo relocate abroad,

including the Kenyan National Commission on Human Rights

and the Kenyan Minister for Justice. The Kenyan Human

Rights Commissioner facilitated Odhiambo’s meeting with

the United States embassy, and helped to arrange for

Odhiambo to leave the country as a refugee.

Kenya actively facilitated Odhiambo becoming a refugee

in the United States because it recognized that it could not

protect his life in Kenya in the face of the threats against him

triggered by his performance under its reward contract. Now

that it is clear that Odhiambo cannot return to Kenya to sue,

Kenya has reneged on millions it owes, instead raising the

FSIA as a jurisdictional bar.

II.

The FSIA’s authorization of suit based on a foreign

sovereign’s “commercial activities” codifies the “restrictive

theory” of sovereign immunity ascendant in international law

at the time of the FSIA’s enactment. That theory recognizes

that foreign governments are not immune from suit when they

act in their commercial, as distinct from sovereign, mode.

Permanent Mission of India to the United Nations v. City of

New York, 551 U.S. 193, 199 (2007); Weltover, 504 U.S. at

612-14. The limitations in the commercial activities

exception—including, as relevant here, the direct-effects

7

requirement—fulfill the additional purpose of ensuring

sufficient connection to the United States to warrant resort to

our courts. See 28 U.S.C. § 1605(a)(2); see also id. § 1330(b)

(establishing personal jurisdiction over any claim not subject

to immunity under sections 1605-1607 in which the foreign

sovereign has been served with process). As the FSIA cases

consistently demonstrate, there is no single factual sine qua

non of a United States direct effect. Where the facts, taken

together, show that a foreign government’s commercial

activity has a direct effect in the United States, claims in

United States court relating to that commercial activity are not

barred by the FSIA.

In Weltover, the Supreme Court held that, under the

direct-effect prong of the commercial activities exception, “an

effect is ‘direct’ if it follows ‘as an immediate consequence of

the defendant’s activity.’” 504 U.S. at 618 (ellipsis omitted).

Weltover requires consideration of all facts relevant to that

inquiry. In that case, the Court’s conclusion that the

rescheduling of Argentina’s currency-stabilizing bond had a

direct effect in the United States was supported by various

facts: the Swiss and Panamanian creditors’ preference for

payment in New York; Argentina’s prior interest payments

there; the debt’s designation in U.S. dollars; and, principally,

the fact that money the creditors insisted be paid to their New

York bank “was not forthcoming.” Id. at 619. Weltover did

not turn on any ex ante contractual specification of the United

States as the sole place of performance. The contract

contemplated that the money could be paid in any one of

several international financial centers, at the election of the

creditor, and plaintiffs only later chose New York as the

payment locale. Id. at 609-10. Instead of requiring an ex ante

place-of-performance clause, the Court considered a range of

facts it deemed relevant to the connection between the

commercial activity, the plaintiffs’ claim, and the United

8

States. A handful of relevant facts sufficed to demonstrate

that the effect of Argentina’s rescheduling of its bonds was

directly felt in the United States, so that foreign sovereign

immunity did not bar the suit. Id. at 618-19.

Weltover overruled the precedents of this and other

circuits that had limited the effects that could qualify as

“direct” under the FSIA’s commercial activities exception to

those that were “substantial” and “foreseeable.” Id. at 618.

To the extent the majority adopts a requirement of a place-of-

performance clause designating the United States, its analysis

conflicts with Weltover by effectively “engraft[ing] on

§ 1605(a)(2)’s commercial activity exception” the

requirement of “foreseeability” that Weltover rejected.

McKesson Corp. v. Islamic Republic of Iran, 52 F.3d 346, 350

(D.C. Cir. 1995). Indeed, to require ex ante contractual

designation of the United States as the place of performance

imposes a particularly restrictive form of the overruled

“foreseeability” condition, demanding not only an objectively

“foreseeable” effect, as this court’s overruled precedent had,

but a contract term memorializing that the parties actually

contemplated an effect in the United States. Cf. Maritime

Int’l Nominees Establishment v. Republic of Guinea, 693 F.2d

1094, 1111 & n.28 (D.C. Cir. 1982) (noting, under overruled

foreseeability requirement, that inquiry did “not require intent

in the subjective sense,” but only must have been “reasonably

contemplated”).

Following Weltover, our sister circuits have rejected the

restrictive contention that a contract must explicitly specify

the United States as a place of performance for its breach to

cause a direct effect. See DRFP L.L.C. v. Republica

Bolivariana de Venez., 622 F.3d 513, 517 (6th Cir. 2010)

(“We do not read Weltover as creating an additional

requirement that the United States be specifically mentioned

9

in the terms of the notes, as suggested by Venezuela.”); Hanil

Bank v. PT. Bank Negara Indon. (Persero), 148 F.3d 127, 133

(2d Cir. 1998) (“Even assuming that Indonesia is the place of

performance under letter of credit law, Weltover does not

insist the ‘place of performance’ be in the United States in

order for a financial transaction to cause a direct effect in this

country. Rather, it only requires an effect in the United States

that follows as an immediate consequence of the defendant’s

actions overseas.”); see also Callejo v. Bancomer, S.A., 764

F.2d 1101, 1110-12 (5th Cir. 1985) (finding a direct effect in

case involving a claim for payment on Mexican Certificates

of Deposit despite an express clause specifying payment in

Mexico, even under pre-Weltover analysis requiring that a

direct effect be substantial and foreseeable). Because the

majority opinion’s narrowing approach to our FSIA direct-

effects precedent, which requires a U.S. place-of-performance

clause, conflicts with Weltover and the decisions of this and

other circuits, I decline to join it.

It is not the foreseeability or the bargained-for character

of an effect that matters. Weltover rejected a requirement of

foreseeability and, a fortiori, any requirement of a place-of-

performance clause. Instead, the animating rationale of the

direct-effect requirement is to assure that a foreign

sovereign’s commercial activity abroad has a sufficient

connection to the United States to warrant suit here. That is

why the decisions of the Supreme Court and our court have

stressed the need of an “immediate consequence” in the

United States relating to the foreign sovereign’s commercial

activity. See, e.g., Weltover, 504 U.S. at 618. It is also why

we have denied jurisdiction in cases in which plaintiffs

unilaterally, fortuitously, or after a long period of time and

intervening events move to the United States, and, without

any other effect here, invoke the jurisdiction of our courts.

See, e.g., Princz, 26 F.3d at 1172-73. The connection must not

10

be one created unilaterally by the plaintiff, but must be a

direct effect of an act in connection with the sovereign’s

commercial activity. That requirement prevents opportunistic

plaintiffs from unilaterally haling foreign sovereigns into

United States courts, but it also ensures that private parties are

not disadvantaged in commercial dealings with foreign state

entities by such entities’ inappropriate assertion of an

immunity designed to apply only to actions in the

government’s sovereign capacity. 1

The majority arbitrarily shrinks the class of contract

claims that may survive the FSIA sovereign-immunity bar to

those in which there is a United States place-of-performance

clause—most likely cases in which a foreign sovereign offers

or negotiates such a term to induce agreement from parties

who want to keep their money in the United States. Needless

to say, Kenya’s unilateral offer of reward for information

about tax evasion, accepted by a Kenyan national who at the

time had no intention of becoming a refugee from his home

country, was not such a case.

An ex ante contractual choice of the United States as the

place of performance would, of course, typically support a

finding of direct effect, but Weltover makes clear that such a

clause is not necessary. Indeed, even in those cases in which

the United States was contractually specified as the place of

performance, this court has not ended its inquiry once it

1

The “immediate consequence” inquiry does not hinge on the non-

existence of any arguably intervening event. It is always possible

to identify some “intervening event” if one parses finely enough, be

it changed economic or political conditions affecting commercial

activities, or the purchase of a plane ticket for travel with a

stopover. The focus of the inquiry is, instead, on whether the

actions of both parties create a sufficient nexus to the United States

for a breach to cause a non-trivial consequence here.

11

identified such a clause—as it presumably would, were a

place-of-performance clause to be the lynchpin the majority

makes it. Instead, following Weltover, our decisions have

taken account of all facts tending to show whether there is a

genuine nexus to the United States or, conversely, a plaintiff’s

unilateral or gratuitous choice of a U.S. forum.

In Cruise Connections, for example, we found a direct

effect in the absence of a U.S. place-of-performance clause.

The contract in that case directed “payments to an account of

Cruise Connections’ choosing rather than specifically to an

account in the United States.” 600 F.3d at 663-64 (internal

quotation marks omitted). This court declined to consider

whether “the contract required [the defendant] to pay via wire

transfer to a U.S. bank” or whether its “failure to do so

qualifie[d] as a direct effect.” Id. at 666. We instead found a

direct effect because Canada’s breach meant that “revenues

that would otherwise have been generated in the United States

were ‘not forthcoming.’” Id. at 665.

In Goodman Holdings v. Rafidain Bank, 26 F.3d 1143

(D.C. Cir. 1994), we also looked to all facts relevant to

discerning any potential “direct effect,” not restricting our

consideration to whether the United States was the

contractually designated place of payment or other contract

performance. The overarching question remained whether

there was an “‘immediate consequence’ in the United States”

of the defendant’s breach. Id. at 1146. In that case, past

practice was relevant to our conclusion that the defendant

“might well have paid [the plaintiffs] from funds in United

States banks but it might just as well have done so from

accounts located outside of the United States, as it had

apparently done before.” Id. at 1146-47. We accordingly

found no direct effect.

12

Odhiambo’s circumstances are in certain ways most

analogous to those of De Csepel, 714 F.3d 591. The bailment

contract in that case, like the unilateral contract here, arose in

circumstances in which it would be unrealistic to expect an

explicit place-of-performance clause, let alone one selecting

the United States as that place. The contract in De Csepel

was not written. The complaint alleged that the Hungarian

government and Nazi collaborators confiscated the Herzog

family’s art collection, and that Hungary’s “possession or re-

possession” of the collection “constituted an express or

implied-in-fact bailment contract.” Id. at 598 (internal

quotation marks omitted). The contract was formed as a

“bailment” following the collection’s emphatically non-

negotiated expropriation during World War II.

Hungary kept and used the confiscated artwork for

decades until the Herzog family sought its return. The

complaint did not clearly allege when the bailment arose, and

we noted that plaintiffs “never expressly allege[d] that the

return of the artwork was to occur in the United States.” Id. at

601. By the time the parties began their unsuccessful

negotiation for the return of the artwork, however, Hungary

was well aware that some of the family lived in the United

States (with others living in Italy), and we held that

Hungary’s commercial activity caused a direct effect in the

United States because “Hungary promised to return the

artwork to members of the Herzog family it knew to be

residing in the United States.” Id. The continued deprivation

of that artwork thus impinged on the rights of the Herzogs in

the United States, in a manner analogous to the effect on

Odhiambo of Kenya’s continued failure to pay him here.

The majority strives to fit De Csepel into its place-of-

performance clause rubric by describing the case as one in

which, “from the moment of contract formation, the United

13

States was a contractually designated place of performance.”

Slip Op. at 15. No contract clause in fact required

performance in the United States. See 714 F.3d at 601 (noting

that complaint did not specify any agreement that artwork was

to be returned to the United States). Rather, the reason this

court had little difficulty finding a direct effect was because in

that case, actions in relation to the commercial activity created

a genuine nexus between the claim and the United States.

The majority points to Peterson as support for its

requirement of a place-of-performance clause. In Peterson,

however, factors not present here tilted the scale against any

finding of a direct effect: most prominently, the underlying

transaction occurred entirely in Saudi Arabia, and the

defendant played no role in the plaintiff’s unilateral decision

to relocate to the United States. Peterson had worked in Saudi

Arabia for over a decade before he moved to the United States

and sued for the refund of retirement contributions to which

he was entitled once the Saudi government decided to exclude

foreigners from its retirement benefit program. In finding no

direct effect, we emphasized that “the entire transaction took

place outside the United States.” 416 F.3d at 91. The Saudi

government had paid Peterson his refund in Saudi Arabia, and

Peterson had previously deposited those funds in a Saudi

bank. Id. Peterson simply later chose to move to the United

States, and his desire for payment here was entirely of his

own making. Odhimabo’s move to the United States was not

unilateral like Peterson’s, but was necessitated by Kenya’s

failure to keep secret Odhiambo’s whistle blowing.

The place-of-payment contract term in Peterson (in

which we found no direct effect) was materially identical to

that in Cruise Connections (in which we did). In each case,

the contract permitted the plaintiff to elect where payment

would be made. See Peterson, 416 F.3d at 91 (“Saudi Arabia

14

‘represented’ to non-Saudi employees that it would refund

[their retirement] contributions ‘wherever the workers

lived.’”); Cruise Connections, 600 F.3d at 663, 666

(recounting district court’s finding that contract provided for

“payment to an account of [the plaintiffs’] choosing,” an issue

the court of appeals did not reach because it concluded that “it

makes no difference where [defendant] would have paid

Cruise Connections”). And, in each case, the plaintiff elected

payment in the United States. But in both cases, we looked

beyond the simple inquiry of whether a contract clause

designated the United States as the place of payment. See

also Weltover, 504 U.S. at 609-10 (contract provided for

payment “at the election of the creditor” in any of several

contractually permitted destinations, and creditor chose New

York only after Argentina unilaterally rescheduled the debt).

Taken together, the cases show that a place-of-performance

clause, which for the majority is conclusive, is correctly

considered to be neither the sole nor the determining factor.

Under the holistic analysis the precedents require, the

direct-effects test is readily met here, as it was in Weltover,

Cruise Connections, and De Csepel. At his own

government’s invitation, Odhiambo risked his life to help

Kenya recover a large amount of stolen money. Kenya’s

invitation placed no restrictions on where a whistleblower

such as Odhiambo could come from, nor on where he could

demand payment. And, given the serious risks he faced in

coming forward as a whistleblower, Kenya promised him

confidentiality. Odhiambo is in the United States and

experiencing the effect of Kenya’s nonpayment here as the

direct consequence of accepting Kenya’s offer of reward for

information, and Kenya’s failure to fulfill its part of the

bargain by keeping Odhiambo’s identity secret and paying

him what it owes. Odhiambo moved to the United States,

instead of some other locale, not merely with Kenya’s

15

knowledge, but with its guidance and help. Under these

circumstances, Odhiambo’s presence in the United States and

the financial loss he suffers here are a direct effect of actions

in connection with the commercial activity of the reward

contract. Those effects suffice to provide a non-trivial nexus

between the parties’ commercial activity and the United

States adequate to support jurisdiction here under the FSIA.

Odhiambo is no opportunistic forum shopper. He did not

unilaterally opt to come to the United States to experience the

effects of Kenya’s non-payment of the money it owes him.

As Kenya acknowledges, Odhiambo—unlike the plaintiffs in

any of the cases on which the majority relies—is unable to

return to sue in the foreign country that now asserts its

immunity. The United States may not have been the chosen

place of performance at the time Odhiambo accepted Kenya’s

offer, but Weltover expressly eschews any foreseeability

requirement. The absence of a United States place-of-

performance clause in Kenya’s reward scheme cannot negate

the fact that Kenya’s nonpayment is felt here, as the direct

effect in the United States of Kenya’s commercial activities

with Odhiambo. I would thus hold that Kenya is not entitled

under the FSIA to sovereign immunity from Odhiambo’s suit.

U.S. courts have enforced rewards-based contracts

against foreign sovereigns as far back as 1798. See Ellison v.

The Bellona, 8 F. Cas. 559, 559 (D.S.C. 1798). That is

because, as the Eleventh Circuit aptly explained, “[a]nything

that makes it easier for countries to welch on their promises to

pay for information decreases the real value of any reward

they offer and makes it less likely that an offer will be

accepted” and so “jeopardize[s] . . . [the] vital interests . . . of

every country that offers rewards for information, including

this country.” Guevara v. Republic of Peru, 468 F.3d 1289,

16

1303-04 (11th Cir. 2006). 2 Failing to recognize jurisdiction

here rewards Kenya’s decision to default on its promise to pay

Odhiambo for the valuable information he provided at great

risk to himself. It thereby threatens the interests of all

countries, including our own, to encourage disclosure of

information that may be critical to effective enforcement of

the law against threats ranging from tax evasion to terrorism. 3

I believe finding a direct effect on these facts is

warranted and so, respectfully, dissent.

2

The court eventually found no “direct effect” in the United States of the

reward contract in Guevara, but did so, not for lack of contractual

designation of the United States as the place of performance, but because

Guevara was in the United States as “‘an immediate consequence’ of his

criminal activity, not of Peru’s offer of a reward for Montesinos’s

capture.” Guevara v. Republic of Peru, 608 F.3d 1297, 1310 (11th Cir.

2010).

3

Reward contracts are an important source of valuable information for

governments around the world, and there are strong reasons to believe that

they should be enforceable, and be understood as such by people who

might respond to them. The U.S. Department of State, for example, runs a

“Rewards for Justice” program that currently offers a reward of up to $25

million for Ayman al-Zawahiri (the current head of al-Qaeda), among

others. See Rewards for Justice, Most Wanted,

http://www.rewardsforjustice.net/english/most-wanted/all-regions.html

(last visited Aug. 12, 2014). The United States additionally offers rewards

pursuant to the False Claims Act, and the Internal Revenue Service,

Securities and Exchange Commission, and Commodity Futures Trading

Commission also administer rewards programs. According to a 2012

news report, the biggest reward paid at that point was $104 million by the

IRS for to a bank employee who, like Odhiambo, provided information on

tax evasion. See David Kocieniewski, Whistle-Blower Awarded $104

Million by I.R.S., N.Y. Times, Sept. 12, 2012, at A1.