O'Bryan v. Holy See

RECOMMENDED FOR FULL-TEXT PUBLICATION

Pursuant to Sixth Circuit Rule 206

File Name: 09a0044a.06

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

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JAMES H. O’BRYAN, DONALD E. POPPE, and

Plaintiffs-Appellees/Cross-Appellants, --

MICHAEL J. TURNER,

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Nos. 07-5078/5163

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v.

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Defendant-Appellant/Cross-Appellee. -

HOLY SEE,

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Appeal from the United States District Court

for the Western District of Kentucky at Louisville.

No. 04-00338—John G. Heyburn II, Chief District Judge.

Argued: March 18, 2008

Decided and Filed: February 10, 2009

Before: MARTIN, GIBBONS, and GRIFFIN, Circuit Judges.

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COUNSEL

ARGUED: Jeffrey S. Lena, LAW OFFICES OF JEFFREY S. LENA, Berkeley, California,

for Appellant. William F. McMurry, McMURRY & ASSOCIATES, Prospect, Kentucky, for

Appellees. Lewis Yelin, UNITED STATES DEPARTMENT OF JUSTICE, Washington,

D.C., for Intervenor. ON BRIEF: Jeffrey S. Lena, LAW OFFICES OF JEFFREY S.

LENA, Berkeley, California, R. Gregg Hovious, John David Dyche, FULTZ, MADDOX,

HOVIOUS & DICKENS, Louisville, Kentucky, for Appellant. William F. McMurry,

Adrienne W. Kim, McMURRY & ASSOCIATES, Prospect, Kentucky, Douglas H. Morris

II, Lea A. Player, MORRIS & PLAYER, Prospect, Kentucky, for Appellees. Lewis Yelin,

Douglas N. Letter, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C.,

for Intervenor.

1

Nos. 07-5078/5163 O’Bryan, et al. v. Holy See Page 2

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AMENDED OPINION

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JULIA SMITH GIBBONS, Circuit Judge. Defendant Holy See appeals the district

court’s denial, in part, of its motion to dismiss all of plaintiffs’ claims due to lack of subject

matter jurisdiction. The Holy See contends that the district court has no subject matter

jurisdiction over plaintiffs’ claims because the Holy See is immune from suit as a foreign

state pursuant to the Foreign Sovereign Immunities Act (“FSIA”), 28 U.S.C. § 1602 et seq.

Plaintiffs James H. O’Bryan, Donald E. Poppe, and Michael J. Turner (“plaintiffs”) cross-

appeal the district court’s partial grant of the Holy See’s motion to dismiss. Plaintiffs claim

that the FSIA does not immunize the Holy See from suit on the grounds alleged in their

complaint and thus the district court does in fact have subject matter jurisdiction in this case.

The United States as intervenor and amicus supports the position of the Holy See with

respect to the Holy See’s status as a foreign state and the constitutionality of the FSIA. For

the following reasons, we affirm the decision of the district court.

I.

On June 4, 2004, plaintiffs, who claim to have been victims of sexual abuse by

Roman Catholic clergy, filed a class action suit against the Holy See. The Holy See is both

a foreign state and an unincorporated association and the central government of an

international religious organization, the Roman Catholic Church. The United States has

recognized the Holy See as a foreign sovereign since 1984. According to their complaint,

plaintiffs consist of representatives for two separate classes. James H. O’Bryan and Donald

E. Poppe serve as the representatives of Class I, which “consists of all persons who have not

previously brought claims against an agent or servant of the Defendant, Holy See, in the

United States . . . arising out of sexual abuse he or she suffered at the hands of a Roman

Catholic priest, cleric, bishop, archbishop, cardinal, agent or employee . . . .” Michael J.

Turner serves as the representative of Class II, which “consists of all persons who have

previously brought claims against an agent or servant of the Defendant, Holy See, in the

United States . . . arising out of sexual abuse he or she suffered at the hands of a Roman

Catholic priest, cleric, agent or employee . . . .” All three representatives were residents of

Nos. 07-5078/5163 O’Bryan, et al. v. Holy See Page 3

Kentucky and citizens of the United States at the time of the alleged sexual abuse by local

Catholic priests.

As representatives, the plaintiffs allege the following underlying facts in support of

their suit.

Plaintiff, James H. O’Bryan, was sexually abused, molested and assaulted

by a Roman Catholic priest in the 1920s, while Plaintiff was under the care,

custody, authority, control and influence of an abusive Roman Catholic

priest, which authority was granted to him by the Defendant, Holy See.

Plaintiff, Donald E. Poppe, was sexually abused, molested and assaulted by

a Roman Catholic priest in the 1960s, while Plaintiff was under the care,

custody, authority, control and influence of an abusive Roman Catholic

priest, which authority was granted to him by the Defendant, Holy See.

Plaintiff, Michael J. Turner, was sexually abused, molested and assaulted by

a Roman Catholic priest in the mid 1970s, while Plaintiff was under the care,

custody, authority, control and influence of an abusive Roman Catholic

priest, which authority was granted to him by the Defendant, Holy See.

In all cases, plaintiffs allege that the sexual molestation in question “occurred while the

abusive Roman Catholic priest, agent, servant or employee was acting within the scope of

his employment, as part of an agency relationship with the Defendant, Holy See, and the

misconduct was committed with the apparent authority arising from this employment and/or

agency relationship.”

Plaintiffs’ claims regarding the liability of the Holy See stem, in large part, from their

allegations regarding the purported policy of the Holy See towards accusations of sexual

abuse leveled against clergy:

[T]he Holy See has mandated that all allegations of childhood sexual abuse

be kept under a cloak of complete secrecy, even if that secrecy violated state,

federal, or international law. In March, 1962, the Holy See privately

circulated a document containing a set of procedural norms for dealing with

the solicitation of sex in confession, clergy sex with minors, homosexual

relations, and bestiality. This document [the “1962 Policy”] – an official

legislative text issued by the Congregation of the Holy Office and

specifically approved by Pope John XXIII – imposes the highest level of

secrecy on the handling of clergy sexual abuse matters. . . . This secret

document was first discovered and made public in July, 2003 by news media

in the United States and throughout the world. The policies of the Holy See

expressed in this and other documents require bishops in the United States

to, among other things, refuse to report childhood sexual abuse committed

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by priests to criminal or civil authorities, even where such failure to report

would itself be a criminal offense.

(Plaintiff’s Complaint, Introduction.) On behalf of Class I, plaintiffs outline in their

1

complaint the following causes of action: violation of customary international law of

human rights; negligence; breach of fiduciary duty; and the tort of outrage/intentional

infliction of emotional distress. In addition, plaintiffs advance claims of deceit and

misrepresentation against the Holy See “in its capacity as an Unincorporated Association

and Head of an International Religious Organization Only.” Finally, plaintiffs, on behalf

of Class I, request injunctive relief.

On behalf of Class II, plaintiffs outline in their complaint the following causes

of action: violation of customary international law of human rights; negligence; breach

of fiduciary duty; and the tort of outrage/intentional infliction of emotional distress. In

addition, plaintiffs advance claims of deceit and misrepresentation against the Holy See

“in its capacity as an Unincorporated Association and Head of an International Religious

Organization Only.” Finally, plaintiffs, on behalf of Class II, request injunctive relief.

Plaintiffs assert in their complaint that federal subject matter jurisdiction exists

in this case on a number of grounds. First, plaintiffs advance claims of federal

jurisdiction under the FSIA, 28 U.S.C. § 1602 et seq. Assuming that the Holy See is a

“foreign state” within the meaning of 28 U.S.C. § 1603, plaintiffs claim that federal

jurisdiction attaches because (1) the Holy See has waived its immunity pursuant to

28 U.S.C. § 1605(a)(1); (2) the Holy See was acting in a commercial capacity pursuant

to 28 U.S.C. § 1605(a)(2); or (3) the money damages that are sought are for personal

injuries stemming from the Holy See’s tortious conduct pursuant to 28 U.S.C.

§ 1605(a)(5).

Alternatively, assuming that the Holy See is not a “foreign state” within the

meaning of 28 U.S.C. § 1603, plaintiffs assert that this court has subject matter

1

Plaintiffs also plead a separate cause of action titled “Respondeat Superior Liability.” However,

respondeat superior is not a cause of action. It is a basis for holding the Holy See responsible for the acts

of its agents. Thus, respondeat superior will factor in to our discussion of the other claims advanced by

plaintiffs but will not be treated separately.

Nos. 07-5078/5163 O’Bryan, et al. v. Holy See Page 5

jurisdiction pursuant to 28 U.S.C. §§ 1331 and 1332 and supplemental jurisdiction

pursuant to 28 U.S.C. § 1367.

On April 4, 2005, the Holy See filed a motion to dismiss on the grounds that the

plaintiffs’ complaint failed to state a claim upon which relief can be granted, lack of

subject matter jurisdiction, lack of personal jurisdiction, insufficient process and

insufficient service of process. In its memorandum and opinion of October 7, 2005, the

district court addressed the Holy See’s claim that the service of process had been

insufficient. In doing so, the district court began its analysis by determining that the

Holy See was in fact a “foreign state” within the meaning of the FSIA. In turn, the

district court found that plaintiffs had not satisfied the service of process requirements

under the FSIA, 28 U.S.C. § 1608(a). However, the district court found that because the

plaintiffs had made good faith attempts to perfect service of process, it would grant them

an additional 60 days in which to perfect service. O’Bryan v. Holy See, 490 F. Supp 2d

826, 832 (W.D. Ky. 2005) (“O’Bryan I”).

On January 10, 2007, the district court determined that plaintiffs had perfected

service of process and therefore went on to consider the Holy See’s motion to dismiss

on the grounds that there was no subject matter jurisdiction in the instant case. In its

memorandum and opinion, the district court determined that while subject matter

jurisdiction did not exist for a number of plaintiffs’ claims, a number of the plaintiffs’

claims fell within the exceptions to the immunities granted foreign states under FSIA.

In doing so, the district court concluded that plaintiffs had sufficiently pled that the

clergy in the United States were Holy See’s employees; in turn, because the Holy See

had declined to provide evidence to the contrary, the district would presume that the

clergy in question were in fact Holy See employees. However, the district court

remained “open to reconsidering its decision that the United States-based bishops,

archbishops, and other clergy of the Roman Catholic Church are employees of the Holy

See for purposes of FSIA if further contrary evidence emerges during the litigation.”

The district court summarized its holdings as follows:

Nos. 07-5078/5163 O’Bryan, et al. v. Holy See Page 6

In summary, this Court will dismiss the Plaintiffs’ negligence claim that

Defendant Holy See failed to provide safe care of children entrusted to

the clergy. The Court also will dismiss Plaintiffs' deceit and

misrepresentation claims. However, the Court will deny Defendant's

motion to dismiss as to the failure to report and failure to warn

negligence claims and as to all other claims asserted against the Holy See

at this time. Therefore, the following claims remain against the Holy See:

negligent failure to report, negligent failure to warn, breach of fiduciary

duty (insofar as that breach involved the failure to report and the failure

to warn), outrage and emotional distress, violations of the customary law

of human rights, and claims under the doctrine of respondeat superior.

The Holy See appealed the district court’s order denying, in part, its motion to dismiss

and plaintiffs subsequently cross-appealed. In their Final Second Brief, the plaintiffs

argued, for the first time, that the application of the FSIA to the Holy See violated the

Establishment Clause. Because the plaintiffs’ new contentions amounted to a challenge

of the FSIA’s constitutionality, the United States, pursuant to 28 U.S.C. § 2403(a),

intervened as a matter of right to defend the constitutionality of the FSIA. The United

States also intervened as an amicus curiae supporting the position of the Holy See

regarding its status as a foreign sovereign. The United States took no position on the

applicability of the statutory exceptions to immunity with respect to plaintiffs’ claims.

II.

Because “sovereign immunity is an immunity from trial, not just a defense to

liability on the merits, the denial of a claim of sovereign immunity is immediately

appealable under the collateral order doctrine as a final decision, pursuant to 28 U.S.C.

§ 1291.” Keller v. Cent. Bank of Nig., 277 F.3d 811, 815 (6th Cir. 2002). This court

“review[s] de novo questions of subject matter jurisdiction.” Bauer v. RBX Indus., 368

F.3d 569, 578 (6th Cir. 2004) (citing Caudill v. N. Am. Media Corp., 200 F.3d 914, 916

(6th Cir. 2000)). However, “[a] district court’s decision to exercise supplemental

jurisdiction over state law claims that are related to the federal question claim is

reviewed only for abuse of discretion.” Harper v. AutoAlliance Int’l, Inc., 392 F.3d 195,

200 (6th Cir. 2004).

Nos. 07-5078/5163 O’Bryan, et al. v. Holy See Page 7

III.

As stated in 28 U.S.C. § 1604, “a foreign state shall be immune from the

jurisdiction of the courts of the United States and of the States except as provided in

sections 1605-1607 of this chapter.” However, the FSIA does not itself define the term

“foreign state.” See, e.g., Ungar v. Palestinian Liberation Org., 402 F.3d 274, 283 (1st

Cir. 2005).

In determining whether a particular entity constitutes a “foreign state” courts

typically adopt one of two approaches. A number of courts have looked to the criteria

enumerated in Restatement (Third) of the Foreign Relations Law of the United States

§ 201: “Under international law, a state is an entity that has a defined territory and a

permanent population, under the control of its own government, and that engages in, or

has the capacity to engage in, formal relations with other such entities.” See Estate of

Klieman v. Palestinian Auth., 424 F. Supp. 2d 153, 158-59 (D.D.C. 2006) (collecting

cases); see also Ungar, 402 F.3d at 283 (noting that FSIA’s legislative history makes it

clear that the “objective of the bill was to codify sovereign immunity doctrine as

recognized by international law and to ensure that this international standard would be

applied in federal litigation”); Morgan Guar. Trust Co. v. Republic of Palau, 924 F.2d

1237, 1243 (2d Cir. 1991) (relying primarily on the Restatement standard for

determining whether the appellee was a “foreign state” under FSIA). However, as the

First Circuit noted in Ungar, “the Restatement standard . . . is not inevitably correct. It

may be argued that a foreign state, for purposes of the FSIA, is an entity that has been

recognized as a sovereign by the United States government.” 402 F.3d at 284 n.6.

Regardless, as the court noted in Ungar, when both standards lead to the same

conclusion, courts need not choose as “all roads lead to Rome.” Id.

In this case, there is no dispute that the United States recognized the Vatican in

1984,2 and there is no dispute between the parties that the State of the Vatican is a

foreign state within the meaning of FSIA. (Appellee’s Br. 21 (“The Holy See, as State

2

See, e.g., Ams. United for Separation of Church & State v. Reagan, 786 F.2d 194, 197 (3d Cir.

1986) (noting that diplomatic relations between the United States and the Vatican began in 1984).

Nos. 07-5078/5163 O’Bryan, et al. v. Holy See Page 8

of the Vatican, meets the[] requirements [of the Restatement Standard]”)). See also Dale

v. Colagiovanni, 337 F. Supp. 2d 825, 832 (S.D. Miss. 2004) (vacated on other grounds)

(treating the Vatican as a foreign state for the purposes of the FSIA); English v. Thorne,

676 F. Supp. 761, 764 (S.D. Miss. 1987) (same).3

Plaintiffs, however, contend that the “Holy See . . . . as the head of the Roman

Catholic Church, . . . has no defined territory and no permanent population, and thus

does not” satisfy the definition of “foreign state” under the Restatement’s standard.

(Appellee’s Br. 21 (emphasis added)).

Plaintiffs’ argument remains somewhat obscure. As noted, plaintiffs admit that

the Holy See, as State of the Vatican, is a foreign state within the meaning of FSIA.

Thus, they do not dispute that the entity recognized by the United States government as

a foreign state is indeed a foreign sovereign. Instead, plaintiffs appear to advance one

of two arguments. The first possible interpretation of plaintiffs’ argument is that they

ask this court to conceive of the Holy See as two separate entities – first, a foreign

sovereign, recognized by the United States government, and second, an unincorporated

head of an international religious organization (Appellee’s Br. 21 (“The Holy See, as

State of the Vatican, meets the[] requirements [of the Restatement Standard],” but the

“Holy See . . . . as the head of the Roman Catholic Church, . . . has no defined territory

and no permanent population, and thus does not” satisfy the definition of “foreign state”

under the Restatement’s standard”)). Alternatively, they ask this court not to consider

the Holy See, a single entity, a foreign sovereign in this case because the Holy See was

acting in a non-sovereign capacity when it engaged in the conduct alleged in plaintiffs’

3

Plaintiffs argue that because the conduct in question preceded the United States’ recognition of

the Holy See as a foreign sovereign, this court should not apply FSIA. This argument also fails. First, as

a general principle of international law, “recognition is retroactive in effect and validates all the actions

and conduct of the government so recognized from the commencement of its existence.” Oetjen v. Cent.

Leather Co., 246 U.S. 297, 303 (1918). More importantly, “the principal purpose of foreign sovereign

immunity has never been to permit foreign states and their instrumentalities to shape their conduct in

reliance on the promise of future immunity from suit in United States courts. Rather, such immunity

reflects current political realities and relationships, and aims to give foreign states and their

instrumentalities some present ‘protection from the inconvenience of suit as a gesture of comity.’”

Republic of Austria v. Altmann, 541 U.S. 677, 696 (2004) (emphasis in original) (holding that FSIA can

be retroactive in application) (quoting Dole Food Co. v. Patrickson, 538 U.S. 468, 479 (2003)). Thus, the

purpose of FSIA is to grant immunity based upon the current relationship between the United States and

the relevant foreign sovereign. Because the United States currently has diplomatic relations with the Holy

See, foreign sovereign immunity applies even to prior conduct.

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complaint. Compl. ¶ 22 (“At the same time, and wholly distinct and separate from its

role and activities as a sovereign, [the Holy See] is an unincorporated association and

head of the Roman Catholic Church, an international religious organization.”).

Plaintiffs’ argument fails under either construction. With respect to the first

alternative – the two-entity alternative – the district court correctly noted that

“[p]laintiffs cite no authority for the proposition that the Holy See may be sued in a

separate, non-sovereign function as an unincorporated association and as head of an

international religious organization.” O’Bryan I, 490 F. Supp. 2d at 830. To the

contrary, courts have generally treated the Holy See as a foreign state for purposes of the

FSIA. See Dale, 337 F. Supp. 2d at 832 (treating the Vatican as a foreign state for the

purposes of the FSIA); English, 676 F. Supp. at 764 (concluding that the Vatican is a

foreign state for the purposes of the FSIA); Doe v. Holy See, 434 F. Supp. 2d 925, 933

(D. Or. 2006) (applying FSIA’s foreign state status to the Holy See). Consequently, we

reject plaintiffs’ contention that they are not suing the Holy See that has been recognized

by the United States government, but a parallel non-sovereign entity conjured up by the

plaintiffs.

The structure and intent of the FSIA also counsel us to reject the plaintiffs’

alternative capacity approach. As the Supreme Court has explained, by enacting FSIA,

Congress intended to adopt the “restrictive theory” of sovereign immunity, “under which

‘the immunity of the sovereign is recognized with regard to sovereign or public acts

(jure imperii) of a state, but not with respect to private acts (jure gestionis).’”

Permanent Mission of India to the U.N. v. City of New York, 127 S. Ct. 2352, 2357

(2007) (quoting Alfred Dunhill of London, Inc. v. Republic of Cuba, 425 U.S. 682, 711

(1976)).

In order to implement the “restrictive theory” of sovereign immunity and limit

immunity to sovereign acts but not private acts, Congress crafted exceptions to FSIA.

See 28 U.S.C. 1605(a). For example, “[t]he ‘commercial activity’ exception of the FSIA

withdraws immunity in cases involving essentially private commercial activities of

foreign sovereigns that have an impact within the United States.” Commercial Bank of

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Kuwait v. Rafidain Bank, 15 F.3d 238, 241 (2d Cir. 1994); see also Orient Mineral Co.

v. Bank of China, 506 F.3d 980, 983 (10th Cir. 2007) (“The FSIA’s commercial activity

exceptions, however, permit a foreign sovereign to be sued in a court within the United

States, to the same extent as any private individual . . . .”). In this way, Congress

constructed the FSIA to immunize foreign sovereigns acting in a public capacity, while

ensuring that essentially private activities would be actionable under the FSIA

exceptions.

For these reasons, the Supreme Court has stated “[w]e think that the text and

structure of the FSIA demonstrate Congress’ intention that the FSIA be 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); accord Am. Telecom Co., L.L.C. v.

Republic of Leb., 501 F.3d 534, 538 (6th Cir. 2007). This conclusion stems from the

FSIA’s rule-plus-exceptions structure; if a party believes that the foreign state was not

acting in its capacity as a sovereign, but instead in its private capacity, then the party can

seek redress via one of the FSIA’s exceptions.

Thus, if plaintiffs believe that the Holy See acted in a private capacity, then the

plaintiffs are limited to arguing that an exception to the FSIA applies; such claims cannot

serve as reasons to avoid the FSIA altogether. The exceptions to FSIA capture all

instances where Congress has deemed conduct, if pursued by a foreign sovereign,

sufficiently private so as to eliminate foreign sovereign immunity. In turn, the

alternative-capacity argument can only succeed to the extent that it identifies conduct

that fits within one of the exceptions outlined under FSIA. See 28 U.S.C. § 1605(a).4

4

Both the Holy See and the United States argue that this court should refrain from making a

determination regarding whether the Holy See is a foreign sovereign because such an issue is a non-

justiciable political question. They rely on the following language: “It has been specifically decided that

‘Who is the sovereign, de jure or de facto, of a territory is not a judicial, but is a political question, the

determination of which by the legislative and executive departments of any government conclusively binds

the judges, as well as all other officers, citizens and subjects of that government.’” Oetjen, 246 U.S. at 302

(quoting Jones v. United States, 137 U.S. 202, 212 (1890)); see also United States v. Belmont, 301 U.S.

324, 328 (1937) (“[T]hat who is the sovereign of a territory is not a judicial question, but one the

determination of which by the political departments conclusively binds the courts; and that recognition by

these departments is retroactive and validates all actions and conduct of the government so recognized

from the commencement of its existence.”).

This argument misapprehends the nature of the court’s inquiry. Plaintiffs do not ask this court

to contravene the executive branch’s recognition of the Holy See as a foreign sovereign. Instead, they

either ask this court to determine that they can rightfully bring suit against a parallel religious entity that

Nos. 07-5078/5163 O’Bryan, et al. v. Holy See Page 11

IV.

We next consider the plaintiffs contention that the FSIA, as applied to the Holy

See, violates the Establishment Clause.

“Issues that are not squarely presented to the trial court are considered waived

and may not be raised on appeal.” Thurman v. Yellow Freight Sys., 90 F.3d 1160, 1172

(6th Cir. 1996). Similarly, “vague references fail to clearly present the objection in the

district court so as to preserve the issue for appellate review.” Bldg. Serv. Local 47

Cleaning Contractors Pension Plan v. Grandview Raceway, 46 F.3d 1392, 1399 (6th

Cir. 1995).

Plaintiffs contend that they preserved their constitutional claims by articulating

them in their response to the Holy See’s motion to dismiss. However, plaintiffs’

response brief includes no such constitutional claims. Plaintiffs’ response to the Holy

See’s First Amendment challenges cannot preserve plaintiffs’ own Establishment Clause

claim. Thus, plaintiffs waived their constitutional challenges to the FSIA.5

V.

We next address the Holy See’s contention that the district court misapplied the

FSIA’s burden-shifting process.

also goes by the name “Holy See” or that the conduct of the Holy See rendered it a private actor in this

case. Courts routinely determine whether incorporated entities satisfy the criteria necessary to be

considered an agency or instrumentality of a recognized foreign state pursuant to 28 U.S.C. § 1603(b)

without becoming entangled in a non-justiciable political question. See,e.g., Gould, Inc. v. Pechiney Ugine

Kuhlmann, 853 F.2d 445 (6th Cir. 1988) (agreeing with the district court’s determination that the

corporation in question could qualify for foreign sovereign immunity status because the majority owner

of the corporation was a foreign state) (abrogated on other grounds by Republic of Arg. v. Weltover, Inc.,

504 U.S. 607 (1992)); Gen. Elec. Capital Corp. v. Grossman, 991 F.2d 1376 (8th Cir. 1993) (same). And

courts can consider the conduct of the Holy See in order to determine whether the type of conduct alleged

should cause the Holy See to lose its sovereign immunity. See 28 U.S.C. § 1605(a).

5

Although this court “may exercise [its] discretion to review an issue not raised below in

exceptional cases or particular circumstances, or when the rule would produce a plain miscarriage of

justice,” United States v. Chesney, 86 F.3d 564, 567-68 (6th Cir. 1996) (internal quotation marks and

citation omitted), we see no such exceptional circumstances in this case.

Nos. 07-5078/5163 O’Bryan, et al. v. Holy See Page 12

In the proceedings before the district court, the Holy See filed a motion to

dismiss for lack of subject matter jurisdiction pursuant to Federal Rule of Civil

Procedure 12(b)(1). This motion presented a facial attack to plaintiffs’ complaint.

As this court has previously noted, “Rule 12(b)(1) motions to dismiss for lack of

subject-matter jurisdiction generally come in two varieties: a facial attack or a factual

attack.” Gentek Bldg. Prods. v. Sherwin-Williams Co., 491 F.3d 320, 330 (6th Cir. 2007)

(citing Ohio Nat’l Life Ins. Co. v. United States, 922 F.2d 320, 325 (6th Cir. 1990)). “A

facial attack on the subject-matter jurisdiction alleged in the complaint questions merely

the sufficiency of the pleading.” Id. And, “[w]hen reviewing a facial attack, a district

court takes the allegations in the complaint as true . . . . If those allegations establish

federal claims, jurisdiction exists.” Id. However, “conclusory allegations or legal

conclusions masquerading as factual conclusions will not suffice to prevent a motion to

dismiss.” Mezibov v. Allen, 411 F.3d 712, 716 (6th Cir. 2005).

Applying the standards under 12(b)(1) to the FSIA context is complicated by

FSIA’s burden-shifting process. “The party claiming FSIA immunity bears the initial

burden of proof of establishing a prima facie case that it satisfies the FSIA’s definition

of a foreign state; once this prima facie case is established, the burden of production

shifts to the non-movant to show that an exception applies.” Keller, 277 F.3d at 815.

The party claiming immunity under FSIA retains the burden of persuasion throughout

this process. Id.

The Holy See contends that this burden-shifting process was misapplied by the

district court. In addressing the Holy See’s motion to dismiss, the district court

explained that “once the asserted allegations bring claims within the statutory

exceptions to FSIA, the burden then shifts to the party asserting immunity to prove that

the exceptions do not apply.” O’Bryan v. Holy See, 471 F. Supp. 2d 784, 791 (W.D. Ky.

2007) (“O’Bryan II”) (citing Siderman de Blake v. Republic of Arg., 965 F.2d 699,

707-08 (9th Cir. 1992)) (emphasis in original). The Holy See, however, argues that the

burden-shifting analysis, because of its reliance on evidence from the parties, cannot be

Nos. 07-5078/5163 O’Bryan, et al. v. Holy See Page 13

applied to a facial motion to dismiss, which simply attacks the legal sufficiency of the

complaint.

Federal courts have consistently applied the FSIA’s burden-shifting process to

facial motions to dismiss; in doing so, courts simply look to the general standards for

evaluating motions to dismiss pursuant to Rule 12(b)(1) and take the factual allegations

of the plaintiff as true. See, e.g., Siderman de Blake, 965 F.2d at 708 n.9 (noting that

“even if the [plaintiffs] had presented nothing more than the allegations in their

complaint . . . it would have been incumbent upon [defendant] to respond to those

allegations”); Kilburn v. Socialist People’s Libyan Arab Jamahiriya, 376 F.3d 1123,

1127 (D.C. Cir. 2004) (“[I]f the defendant challenges only the legal sufficiency of the

plaintiff's jurisdictional allegations, then the district court should take the plaintiff's

factual allegations as true and determine whether they bring the case within any of the

[FSIA] exceptions to immunity invoked by the plaintiff.”) (quoting Phoenix Consulting,

Inc. v. Republic of Angl., 216 F.3d 36, 40 (D.C. Cir. 2000)); Doe, 434 F. Supp. 2d at 933

(“If the foreign state makes [the “foreign state”] showing, the burden of production shifts

to the plaintiff to show, either by the allegations in the complaint or by extrinsic

evidence, that at least one of the FSIA exceptions applies. Once the plaintiff offers

evidence that an exception to immunity applies, the party claiming immunity bears the

burden of proving by a preponderance of the evidence that the exception does not

apply.” (internal citations and quotation marks omitted; emphasis added)).

We conclude that the district court correctly applied the FSIA’s burden shifting

process. It accurately described the process. O’Bryan II, 471 F. Supp. 2d at 790-91. It

considered the allegations in plaintiffs’ complaint that a number of exceptions to FSIA

immunity applied and concluded that the tortious act exception did in fact apply.

O’Bryan II, 471 F. Supp. at 792. As the district court correctly noted, the Holy See

could still retain immunity if it could “prove that the exceptions do not apply.” Id. at

791. Such proof would presumably amount to a “factual attack” pursuant to Rule

12(b)(1). Cf. Gentek Bldg. Prods., 491 F.3d at 330 (“Where . . . there is a factual attack

Nos. 07-5078/5163 O’Bryan, et al. v. Holy See Page 14

on the subject-matter jurisdiction alleged in the complaint, no presumptive truthfulness

applies to the allegations.”).

VI.

Because the plaintiffs can only bring suit against the Holy See in its capacity as

a foreign sovereign, the district court has subject matter jurisdiction over the dispute only

if the Holy See is “not entitled to immunity [under any of the the FSIA exceptions].”

See 28 U.S.C. § 1330(a). Title 28 U.S.C. § 1605(a) provides the following relevant

exceptions to a foreign state’s immunity under the FSIA:

(a) A foreign state shall not be immune from the jurisdiction of courts of

the United States or of the States in any case –

(1) in which the foreign state has waived its immunity either

explicitly or by implication, notwithstanding any withdrawal of

the waiver which the foreign state may purport to effect except in

accordance with the terms of the waiver;6

(2) in which the action is based upon a commercial activity

carried on in the United States by the foreign state; or upon an act

performed in the United States in connection with a commercial

activity of the foreign state elsewhere; or 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;

...

(5) not otherwise encompassed in paragraph (2) above, in which

money damages are sought against a foreign state for personal

injury or death, or damage to or loss of property, occurring in the

United States and caused by the tortious act or omission of that

foreign state or of any official or employee of that foreign state

while acting within the scope of his office or employment; except

this paragraph shall not apply to –

(A) any claim based upon the exercise or performance or

the failure to exercise or perform a discretionary function

regardless of whether the discretion be abused, or

6

While plaintiffs raised the waiver exception in their complaint, they have abandoned this

argument in their briefs before this court.

Nos. 07-5078/5163 O’Bryan, et al. v. Holy See Page 15

(B) any claim arising out of malicious prosecution, abuse

of process, libel, slander, misrepresentation, deceit, or

interference with contract rights . . . .

The district court determined that the “commercial activity” exception did not apply,

O’Bryan II, 471 F. Supp. 2d at 789, a determination that the plaintiffs contest in their

cross-appeal.7 The district court also found that it had subject matter jurisdiction over

some of the plaintiffs’ claims under the “tortious act” exception, id. at 792, a

determination that the Holy See now appeals. We will consider the application of the

various exceptions to sovereign immunity under the FSIA in turn.

a. The Commercial Activity Exception

As noted above, the commercial activity exception reads as follows:

A foreign state shall not be immune from the jurisdiction of courts of the

United States or of the States in any case . . . in which the action is based

upon a commercial activity carried on in the United States by the foreign

state; or upon an act performed in the United States in connection with

a commercial activity of the foreign state elsewhere; or 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 . . . .

7

The Holy See argues that this court has no jurisdiction to hear plaintiffs’ cross-appeal. This

court has jurisdiction to hear the Holy See’s appeal because the “denial of sovereign immunity is

immediately appealable under the collateral order doctrine as a final decision, pursuant to 28 U.S.C. §

1291.” Keller, 277 F.3d at 815. In order to hear plaintiffs’ cross-appeal, this court would have to exercise

pendent jurisdiction: “The doctrine of pendent appellate jurisdiction allows an appellate court, in its

discretion, to exercise jurisdiction over issues that are not independently appealable when those issues are

‘inextricably intertwined’ with matters over which the appellate court properly and independently has

jurisdiction.” Chambers v. Ohio Dep’t of Human Servs., 145 F.3d 793, 797 (6th Cir. 1998). “A pendent

appellate claim can be regarded as ‘inextricably intertwined’ with a properly reviewable claim only if the

pendent claim ‘is coterminous with, or subsumed in, the claim before the court on interlocutory appeal.’”

Id. (quoting Law v. Nat’l Collegiate Athletic Ass’n, 134 F.3d 1025, 1028 (10th Cir. 1998)). To be sure,

“[t]he ‘inextricably intertwined’ requirement of pendent appellate jurisdiction is not meant to be loosely

applied as a matter of discretion; rather, such jurisdiction only may be exercised when the appealable issue

at hand cannot be resolved without addressing the nonappealable collateral issue.” Id.

Despite this strict standard for pendent jurisdiction, we conclude that pendent jurisdiction should

be exercised in this case. Plaintiffs seek to challenge the district court’s ruling on the applicability of the

commercial activity exception of the FSIA. The ultimate issue of this interlocutory appeal – whether the

Holy See is immune from suit pursuant to the FSIA – also hinges on a finding that this exception does not

apply. Moreover, given the relatedness of the two exceptions, judicial economy would counsel hearing

these two issues together. Cf. Rendall-Speranza v. Nassim, 107 F.3d 913 (D.C. Cir. 1997) (exercising

pendent appellate jurisdiction pursuant to an interlocutory appeal of the denial of sovereign immunity

under the FSIA).

Nos. 07-5078/5163 O’Bryan, et al. v. Holy See Page 16

28 U.S.C. § 1605(a)(2). “A ‘commercial activity’ means either a regular course of

commercial conduct or a particular commercial transaction or act. The commercial

character of an activity shall be determined by reference to the nature of the course of

conduct or particular transaction or act, rather than by reference to its purpose.”

28 U.S.C. § 1603(d). In addition, “the commercial activity relied upon by plaintiff for

jurisdictional purposes must be also the activity upon which the lawsuit is based; that is,

there must be a connection between that activity and the act complained of in the

lawsuit.” Gould, 853 F.2d at 452 (citing Riedel v. Bancam, S.A., 792 F.2d 587, 591 (6th

Cir. 1986)).

The Supreme Court has further analyzed the statutory definition of commercial

activity, stating that

[W]hen a foreign government acts, not as regulator of a market, but in the

manner of a private player within it, the foreign sovereign’s actions are

“commercial” within the meaning of the FSIA. Moreover, because the

Act provides that the commercial character of an act is to be determined

by reference to its “nature” rather than its “purpose,” the question is not

whether the foreign government is acting with a profit motive or instead

with the aim of fulfilling uniquely sovereign objectives. Rather, the issue

is whether the particular actions that the foreign state performs (whatever

the motive behind them) are the type of actions by which a private party

engages in trade and traffic or commerce.

Republic of Arg., 504 U.S. at 614 (internal quotation marks and citations omitted). By

“withdraw[ing] immunity in cases involving essentially private commercial activities,”

the commercial activity exception “reflects the ‘restrictive’ theory of sovereign

immunity that underlies the FSIA.” Commercial Bank of Kuwait v. Rafidain Bank, 15

F.3d 238, 241 (2d Cir. 1994).

The Supreme Court applied the Weltover standard in Saudi Arabia v. Nelson, 507

U.S. 349 (1993). In Nelson, the plaintiff, a United States citizen and a former employee

of the Saudi government, had allegedly been imprisoned and tortured by Saudi officials

for reporting defects regarding hospital equipment to a Saudi government commission.

Upon release, the plaintiff filed suit against the Saudi government, alleging, inter alia,

that the government was negligent in its failure to warn him of the undisclosed dangers

Nos. 07-5078/5163 O’Bryan, et al. v. Holy See Page 17

of his employment position (i.e. the likelihood of being imprisoned and tortured). Id. at

352-54. In finding that the Saudis’ conduct was not commercial in nature, the Supreme

Court analyzed Nelson’s claims as follows:

[T]he intentional conduct alleged here (the Saudi Government’s wrongful

arrest, imprisonment, and torture of Nelson) could not qualify as

commercial under the restrictive theory. The conduct boils down to abuse

of the power of its police by the Saudi Government, and however

monstrous such abuse undoubtedly may be, a foreign state’s exercise of

the power of its police has long been understood for purposes of the

restrictive theory as peculiarly sovereign in nature . . . . Exercise of the

powers of police and penal officers is not the sort of action by which

private parties can engage in commerce.

Id. at 361-62. Indeed, directly addressing Nelson’s attempt to advance a failure-to-warn

theory of the case, the Supreme Court responded:

[T]his is merely a semantic ploy. For aught we can see, a plaintiff could

recast virtually any claim of intentional tort committed by sovereign act

as a claim of failure to warn, simply by charging the defendant with an

obligation to announce its own tortious propensity before indulging it. To

give jurisdictional significance to this feint of language would effectively

thwart the Act’s manifest purpose to codify the restrictive theory of

foreign sovereign immunity.

Id. at 363.

The analysis in Weltover and Nelson points to two distinct limitations on the

application of the commercial activity exception. First, the activity must be of the type

in which private individuals engage; if the activities in question are not private, but

sovereign in nature, then the commercial activity exception will not apply. This flows

from the purpose of the commercial activity exception – to encapsulate the restrictive

theory of sovereign immunity, which grants immunity for the public, not private, actions

of a sovereign. Permanent Mission of India to the UN v. City of New York, 127 S. Ct.

2352, 2357 (2007) (quoting Alfred Dunhill of London, Inc. v. Republic of Cuba, 425 U.S.

682, 711 (1976)); see also City School of Detroit v. Government of France, 1990 U.S.

Dist. LEXIS 19577, at *9-*10 (E.D. Mich. 1990) (concluding that the commercial

activity exception did not apply because “[t]he granting of accreditation to a private

Nos. 07-5078/5163 O’Bryan, et al. v. Holy See Page 18

school by a foreign government is by its very nature a sovereign function, incapable of

being performed by a private individual [and] . . . the welfare and education of its

citizenry is . . . an area where sovereign activity is typically asserted”).

Second, the Weltover and Nelson cases also instruct courts to avoid the artful

pleading of plaintiffs and look to the core of the activities alleged to be commercial in

nature. Thus, the Southern District of New York has explained that “Nelson rest[s] on

a broader principle, directing district courts first to ascertain the claim’s gravamen to

determine whether the FSIA plaintiff is simply using creative nomenclature as a

semantic ploy to shroud the true essence of its theory and obtain jurisdiction over a claim

that Congress did not intend to be brought against a foreign sovereign.” Leutwyler v.

Office of Her Majesty Queen Rania Al Abdullah, 184 F. Supp. 2d 277, 299 (S.D.N.Y.

2001) (internal quotation marks and citation omitted). District courts have applied both

limiting principles in instructive contexts.

Employing this principle, the District of Oregon has recently considered the

commercial activity exception in circumstances similar to our own. In Doe v. Holy See,

the district court of Oregon considered the applicability of the commercial activity

exception to claims against the Holy See stemming from the alleged abuse of the

plaintiff by his priest, a Holy See employee. 434 F. Supp. 2d at 937-47. After a lengthy

analysis of the term “commercial activity” under the FSIA, the district court stated as

follows:

[T]he Supreme Court has counseled courts not to lose sight of the

ultimate issue: whether the true essence of the complaint is commercial.

Nelson, 507 U.S. at 363. Here, plaintiff’s complaint does not allege

property damage, breach of contract for goods or services, product

liability, copyright infringement, an indebtedness yet unpaid on a loan or

other transaction, or any other theory whose true essence is commercial.

Instead, at the heart of plaintiff's complaint is the injury inflicted by a

sexually abusive priest at plaintiff's church, a claim clearly sounding in

tort.

Id. at 942. In other words, the Doe Court did not rely on the public-private inquiry, but

instead it examined the “gravaman” of the claims advanced by the plaintiff. See

Leutwyler, 184 F. Supp. 2d at 299. Regardless of how the plaintiff phrased his

Nos. 07-5078/5163 O’Bryan, et al. v. Holy See Page 19

complaint, none of the allegations truly sounded in commercial activity, and thus the

commercial activity exception did not apply. Doe, 434 F. Supp. 2d at 947.

Both limiting principles apply to plaintiffs’ attempt to invoke the commercial

activity exception in our own case. On one front, all of the claims advanced by plaintiffs

stem from the promulgation of the purported 1962 Policy by the Holy See. Indeed, in

arguing that the discretionary function exception did not apply, plaintiffs themselves

emphasize the force of the purported policy and the potential for sanction if Holy See

employees chose not to comply.

In addition, the gravaman of plaintiffs’ claims is the tortious conduct of priests

which was allegedly facilitated by the tortious conduct of Holy See employees. Thus

to allow plaintiffs to obtain jurisdiction under the commercial activity exception through

a semantic ploy would allow them to “obtain jurisdiction over a claim that Congress did

not intend to be brought against a foreign sovereign.” See Leutwyler, 184 F. Supp. 2d

at 299. We therefore conclude that the commercial activity exception does not apply.

b. The Tortious Act Exception

Pursuant to the FSIA, a plaintiff can establish subject matter jurisdiction over a

foreign sovereign under the tortious act exception if there has been a tortious act

(1) “occurring in the United States”; (2) “caused by [a] tortious act or omission”;

(3) where the alleged acts or omissions were those of a “foreign state or of any official

or employee of that foreign state”; and (4) those acts or omissions were done within the

scope of tortfeasor’s employment. See 28 U.S.C. § 1605(a)(5).

Because, however, there are exceptions to the tortious act exception, our inquiry

does not end here. If the tortious act in question was either (1) “based upon the exercise

or performance or the failure to exercise or perform a discretionary function” or

(2)“ar[o]s[e] out of . . . misrepresentation [or] deceit . . . ” then the foreign sovereign

retains its immunity. 28 U.S.C. § 1605(a)(5)(A), (B).

In determining whether the tortious act exception applies, courts, as a rule, apply

state substantive law: “where state law provides a rule of liability governing private

Nos. 07-5078/5163 O’Bryan, et al. v. Holy See Page 20

individuals, the FSIA requires the application of that rule to foreign states in like

circumstances.” First Nat'l City Bank v. Banco Para El Comercio Exterior De Cuba,

462 U.S. 611, 622 n.11 (1983); see also Pescatore v. PAN AM, 97 F.3d 1, 12 (2d Cir.

1996) (stating that “the FSIA thereby operates as a ‘pass-through’ to state law

principles”). Thus, “[a]s a general rule, state law should provide a cause of action

against a foreign nation in a section 1605(a)(7) claim [under the Tortious Act

Exception].” Damarrell v. Islamic Republic of Iran, 2005 U.S. Dist. LEXIS 5343, at *55

(D.D.C. 2005). Therefore, to determine the applicability of the tortious act exception,

we must consider the elements of the exception, applying Kentucky state law where

applicable.8

i. Elements of the Tortious Act Exception

(a) “Occurring in the United States”

“Section 1605(a)(5) is limited by its terms . . . to those cases in which the damage

to or loss of property occurs in the United States.” Amerada Hess Shipping Corp., 488

U.S. at 439 (emphasis omitted). Thus, in contrast to the commercial activity exception,

a tortious act having “direct effects” in the United States will not satisfy the requirements

of the tortious activity exception. Id. at 441. Courts in both the Second and D.C.

8

As noted above, the class representatives all resided in the state of Kentucky at the time of the

alleged abuse. “[I]n FSIA cases, we use the forum state’s choice of law rules to resolve ‘all issues,’ except

jurisdictional ones.” Karaha Bodas Co. v. Perusahaan Pertambangan Minyak Dan Gas Bumi Negara,

313 F.3d 70, 85 (2d Cir. 2002). According to Kentucky’s choice of law rules, Kentucky law would apply

where Kentucky is the state where the relevant acts or omissions occurred. See, e.g., Vaughn v. United

States, 1997 U.S. App. LEXIS 35795, at *9 n.2 (6th Cir. Dec. 16, 1997) (applying Kentucky law in a case

arising under the Federal Tort Claims Act).

However, the choice of law inquiry is complicated by the fact that the case before is us is a class

action suit. Under Phillips Petroleum Co. v. Shutts, 472 U.S. 797 (1985), due process requirements apply

to nationwide class action lawsuits, requiring courts to engage in individualized choice of law analysis for

each plaintiff’s claims and not just named plaintiffs. Id. at 822-23.

But the individualized choice of law analysis is only necessary once the class seeks certification.

While the class remains a putative class, courts focus on the application of the forum’s choice of law rules

to the named plaintiffs. Cunningham v. PFL Life Ins. Co., 42 F. Supp. 2d 872, 883 (N.D. Iowa 1999) (“[I]t

is important to note that at this point in the litigation, the Court has not certified the Plaintiffs as class

representatives. Accordingly, the Court will not make a choice of law determination that will bind the

putative class in this Order. This Order only contemplates the claims of the named Plaintiffs . . . .”); cf.

Rakes v. Life Investors Ins. Co. of Am., 2007 U.S. Dist. LEXIS 52719, at *33 (N.D. Iowa July 20, 2007)

(“[I]n the case at bar the court has not yet certified Plaintiffs as class representatives. Therefore, nothing

in this order may be construed as a non-individualized choice-of-law determination that binds all 150,000

putative members of the Class.”). We, in the instant case, need not engage in such an individualized

choice of law analysis because plaintiffs have not yet sought certification.

Nos. 07-5078/5163 O’Bryan, et al. v. Holy See Page 21

Circuits have interpreted this requirement to mean that the “entire tort” must occur in the

United States. See, e.g., Asociacion de Reclamantes v. United Mexican States, 735 F.2d

1517, 1524-25 (D.C. Cir. 1984) (rejecting application of the tortious activity exception

because “the entire tort would not have occurred [in the United States]”); Kline v.

Kaneko, 685 F. Supp. 386, 391 (S.D.N.Y. 1988) (“If the non-commercial tort exception

is to apply, the entire tort must be committed in the United States.”); see also Burnett v.

Al Baraka Inv. & Dev. Corp. (In re Terrorist Attacks), 349 F. Supp. 2d 765, 795

(S.D.N.Y. 2005) (collecting Second Circuit cases). But see Olsen v. Gov’t of Mexico,

729 F.2d 641, 646 (9th Cir. 1984) (abrogated on other grounds by Joseph v. Office of

Consulate Gen. of Nig., 830 F.2d 1018, 1026 (1987)) (“[I]f plaintiffs allege at least one

entire tort occurring in the United States, they may claim under section 1605(a)(5).”).

We join the Second and D.C. Circuits in concluding that in order to apply the

tortious act exception, the “entire tort” must occur in the United States. This position

finds support in the Supreme Court’s decision in Amerada Hess Shipping: “the exception

in § 1605(a)(5) covers only torts occurring within the territorial jurisdiction of the United

States.” 488 U.S. at 441. Moreover, the purpose of the tortious activity exception is

limited: “Congress’ primary purpose in enacting § 1605(a)(5) was to eliminate a foreign

state’s immunity for traffic accidents and other torts committed in the United States, for

which liability is imposed under domestic tort law.” Id. at 439-40 (citing H.R. Rep., at

14). Thus, it seems most in keeping with both Supreme Court precedent and the

purposes of the FSIA to grant subject matter jurisdiction under the tortious activity

exception only to torts which were entirely committed within the United States.

(b) Caused by an Act or Omission

In Kentucky, “[l]iability for a negligent act follows a finding of proximate or

legal cause,” which is defined as “a finding of causation in fact, i.e., substantial cause,

and the absence of a public policy rule of law which prohibits the imposition of

liability.” Deutsch v. Shein, 597 S.W.2d 141, 143-44 (Ky. 1980). “In order to be a legal

cause of another’s harm, it is not enough that the harm would not have occurred had the

Nos. 07-5078/5163 O’Bryan, et al. v. Holy See Page 22

actor not been negligent. . . . The negligence must also be a substantial factor in bringing

about the plaintiff’s harm.” Id. (quoting Restatement of Torts (Second) § 431, cmt. a).

(c) Official or Employee of a Foreign State

Kentucky law appears to have adopted the Restatement (Third) of Agency § 7.07

definition of employee when addressing claims of vicarious liability: “an employee is

an agent whose principal controls or has the right to control the manner and means of the

agent’s performance of work . . . .” Papa John’s Int’l, Inc. v. McCoy, 2008 Ky. LEXIS

16, at *16 (Ky. 2008) (quoting Restatement (Third) of Agency § 707).9 In addition, “the

fact that work is performed gratuitously does not relieve a principal of liability.” Id.

(d) Scope of Employment

“State law, not federal common law, governs whether an officer’s or employee’s

action is within the scope of employment in determining the applicability of the FSIA.”

Moran v. Kingdom of Saudi Arabia, 27 F.3d 169, 173 (5th Cir. 1994) (applying

Mississippi law) (citing First Nat’l City Bank v. Banco Para el Comercio Exterior de

Cuba, 462 U.S. 611, 622 n.11 (1983)); see also, e.g., Doe, 434 F. Supp. 2d at 944

(applying Oregon law); Robinson v. Gov't of Malay., 269 F.3d 133, 145 (2d Cir. 2001)

(applying New York law); Randolph v. Budget Rent-A-Car, 97 F.3d 319, 326-27 (9th

Cir. 1996) (applying California law). Because the conduct alleged by the named

plaintiffs occurred in Kentucky, Kentucky law applies to the instant case.

9

The Holy See contends that plaintiffs failed to identify specifically which clergy engaged in the

relevant tortious conduct. As a result, the Holy See seizes upon the language in the complaint which

names the “Louisville Corporation” as one of the agents of the Holy See having engaged in the tortious

conduct; in turn, the Holy See argues that all of the allegations in the complaint can only be analyzed in

terms of the actions of the Louisville Corporation. And, the Holy See believes that corporate law prevents

holding it liable for the actions of another corporate entity. However, this analysis begins with a faulty

premise. Plaintiffs pled repeatedly that the tortious acts of which they complain were also committed by

priests, clerics, bishops, archbishops, cardinals, agents and employees. General allegations against

employees are sufficient for the purposes of notice pleading: “a complaint that generally alleges an

employer’s negligence need not specifically identify each employee involved to hold the employer liable

under respondeat superior.” Cornejo-Ramirez v. James G. Garcia, Inc., 2000 U.S. Dist. LEXIS 20064, at

*13 (D. Ariz. 2000) (also noting “[t]he court is required to examine Plaintiffs’ complaint under the

standard set forth in Fed R. Civ. P. 8(f) that ‘all pleading shall be so construed as to do substantial

justice’”).

Nos. 07-5078/5163 O’Bryan, et al. v. Holy See Page 23

Under Kentucky law, for alleged conduct to be considered within the scope of

employment “the conduct must be of the same general nature as that authorized or

incidental to the conduct authorized.” Osborne v. Payne, 31 S.W.3d 911, 915 (Ky.

2000). Thus, “[u]nder the doctrine of respondeat superior, an employer can be held

vicariously liable for an employee’s tortious actions if committed in the scope of his or

her employment.” Papa John’s Int’l, 2008 Ky. LEXIS 16, at *28-*29. “In the area of

intentional torts, the focus is consistently on the purpose or motive of the employee in

determining whether he or she was acting within the scope of employment.” Id. at *29.

However, “[a] principal is not liable under the doctrine of respondeat superior unless the

intentional wrongs of the agent were calculated to advance the cause of the principal or

were appropriate to the normal scope of the operator’s employment.” Osborne, 31

S.W.3d at 915. Applying these principles, the Kentucky Supreme Court ruled that a

priest’s adulterous conduct could not be considered within the scope of his employment,

even though the underlying conduct was intentional. Osborne, 31 S.W.3d at 915.

ii. Exceptions to the Tortious Act Exception

(a) Discretionary Function Exception to the Tortious Act

Exception

The FSIA does not define “discretionary functions.” To interpret the FSIA’s

discretionary function exception, courts typically apply the interpretation of the

discretionary function exception of the Federal Tort Claims Act (the “FTCA”), because

“[n]ot only does the language of the FSIA discretionary function exception replicate that

of the [FTCA], 28 U.S.C. § 2680(a), but the legislative history of the FSIA, in explaining

section 1605(a)(5)(A), directs us to the FTCA.” Olsen, 729 F.2d at 646 (citing H.R.

Rep. at 21); see also Rodriguez v. Republic of Costa Rica, 297 F.3d 1, 8 (1st Cir. 2002);

Office of Consulate Gen. of Nig., 830 F.2d at 1026 (9th Cir. 1987).

In determining whether particular conduct falls under the FTCA’s, and in turn

under the FSIA’s, discretionary function exception, courts apply the two part Berkovitz

test:

Nos. 07-5078/5163 O’Bryan, et al. v. Holy See Page 24

The first inquiry is whether the challenged action involved an element of

choice or judgment, for it is clear that the exception “will not apply when

a federal statute, regulation, or policy specifically prescribes a course of

action for an employee to follow.” If choice or judgment is exercised,

the second inquiry is whether that choice or judgment is of the type

Congress intended to exclude from liability - that is, whether the choice

or judgment was one involving social, economic or political policy.

Vickers v. United States, 228 F.3d 944, 949 (9th Cir. 2000) (internal citations omitted)

(quoting Berkovitz v. United States, 486 U.S. 531, 536 (1988)); Rodriguez, 297 F.3d at

9 (applying the two-part Berkovitz test to the FSIA’s discretionary function exception).

The Supreme Court in Berkovitz explained the rationale behind the discretionary

function exception:

The basis for the discretionary function exception was Congress’ desire

to prevent judicial ‘second-guessing’ of legislative and administrative

decisions grounded in social, economic, and political policy through the

medium of an action in tort. The exception, properly construed, therefore

protects only governmental actions and decisions based on considerations

of public policy.

Berkovitz, 486 U.S. at 536-37 (internal quotation marks and citation omitted).

A number of courts have applied the Berkovitz test to cases of negligent hiring,

concluding that the selection of employees, officials and officers typically falls within

the scope of the FTCA’s discretionary function exception. See, e.g., United States v.

Gaubert, 499 U.S. 315, 332-34 (1991) (finding that the negligent selection of directors

and officers falls squarely under the FTCA’s discretionary function exception); Burkhart

v. Washington Metro. Area Transit Auth., 112 F.3d 1207, 1217 (D.C. Cir. 1997) (“The

hiring, training, and supervision choices that [the defendant] faces are choices

susceptible to policy judgment. The hiring decisions of a public entity require

consideration of numerous factors, including budgetary constraints, public perception,

economic conditions, individual backgrounds, office diversity, experience and employer

intuition.” (internal quotation marks and citation omitted)); Tonelli v. United States, 60

F.3d 492, 496 (8th Cir. 1995) (“The post office’s choice between several potential

employees involves the weighing of individual backgrounds, office diversity, experience

and employer intuition. These multi-factored choices require the balancing of competing

Nos. 07-5078/5163 O’Bryan, et al. v. Holy See Page 25

objectives, and are of the nature and quality that Congress intended to shield from tort

liability.” (internal quotation marks and citation omitted)); cf. Carlyle v. United States,

Dep’t of Army, 674 F.2d 554, 557 (6th Cir. 1982) (“Any decision to supervise [army

recruits] only by means of letters and not to place personnel in the Hotel was a

discretionary function and outside federal jurisdiction.”).

(b) Arising Out of Misrepresentation or Deceit Exceptions

to the Tortious Act Exception

The scope of the misrepresentation or deceit exception to the tortious act

exception is an unsettled matter. Courts generally have looked to the definition of

misrepresentation in the FTCA as a guide for defining the term under the FSIA, relying

on the legislative history of the FSIA for such comparison. See, e.g., Cabiri v. Gov’t of

the Republic of Ghana, 165 F.3d 193, 200 n.4 (2d Cir. 1999) (“The FSIA House Report

provides that ‘the exceptions provided in subparagraph[] . . . (B) of section 1605(a)(5)

correspond to many of the claims with respect to which the U.S. Government retains

immunity under the [FTCA], 28 U.S.C. 2680(a) and (h).”) (quoting H.R. Rep. at 21); see

also De Sanchez v. Banco Central de Nicar., 770 F.2d 1385, 1398 (5th Cir. 1985).

In addition, both the Second and Ninth Circuits have dismissed claims against

foreign sovereigns where the foreign sovereign allegedly provided false or misleading

information regarding the whereabouts of the plaintiffs’ relatives. See Cabiri, 165 F.3d

193, 200 (dismissing claim “for emotional injury caused by the refusal of a foreign state,

however nefarious, to give its citizens in the United States full or truthful information

concerning its operations”); Kozorowski v. Russian Fed’n, No. 93-16388, 1997 U.S.

App. LEXIS 26266 (9th Cir. Sept. 19, 1997) (dismissing claims of intentional infliction

of emotional distress, fraud and deceit, conspiracy and other claims because they were

premised on the Soviet Union’s failure to disclose its role in the 1940 massacre of Polish

soldiers and therefore arose out of misrepresentation and deceit).

Nos. 07-5078/5163 O’Bryan, et al. v. Holy See Page 26

iii. Application of the Tortious Act Exception to the Instant Case

The difficulty in applying the elements of the tortious act exception to plaintiffs’

complaint is the manner in which plaintiffs have pled their claims. In their complaint,

plaintiffs advance the following claims: violation of customary international law of

human rights, negligence, breach of fiduciary duty, tort of outrage/infliction of emotional

distress, deceit and misrepresentation.10 In each of their claims, plaintiffs base their

theories of liability not only on the actions of the Holy See itself, but also on the acts of

the Holy See’s agents and employees. As a result, we must analyze each claim to see

not only which claims survive, but which parts of each claim survive.

Looking first to the fourth requirement for the application of the tortious act

exception, the Kentucky Supreme Court’s holding in Osborne, 31 S.W.3d at 915, leads

to the inescapable conclusion that the alleged acts of sexual abuse were not done while

the alleged tortfeasors were acting within the scope of their employment. Thus, the

tortious act exception to the FSIA’s grant of immunity cannot apply to permit suit

against the Holy See for sexual abuse by its clergy, even if the other requirements for its

application are met.

Furthermore, as per the FSIA’s explicit terms, in order for the tortious act

exception to apply, the tortious acts in question must have occurred in the United States.

Therefore, any portion of plaintiffs’ claims that relies upon acts committed by the Holy

See abroad cannot survive. For example, the tortious act exception to the FSIA’s grant

of immunity would not include any theory of liability premised on the Holy See’s own

negligent supervision because such acts presumably occurred abroad; moreover, a direct

claim leveled against the Holy See for promulgating the 1962 Policy would not fall

within the tortious act exception because it too presumably occurred abroad. In turn,

10

See supra, n.1.

Nos. 07-5078/5163 O’Bryan, et al. v. Holy See Page 27

plaintiffs cannot pursue claims based upon the alleged sexual abuse of priests or based

upon the acts of the Holy See that occurred abroad.11

These conclusions are not wholly dispositive, however, of the claims against the

Holy See. As noted before, plaintiffs’ claims are not based solely on the conduct of the

Holy See itself or the allegedly abusive conduct of priests. All of plaintiffs’ claims also

advance theories of liability premised on the conduct of Holy See employees in the

United States engaged in the supervision of the allegedly abusive priests. These portions

of plaintiffs’ claims meet the four requirements for application of the tortious act

exception.

First and contrary to the Holy See’s protestations, plaintiffs have pled both that

the relevant archbishops, bishops and other Holy See personnel had knowledge of the

alleged sexual abuse of priests and that they failed to act on that knowledge. In doing

so, it would seem that the complaint also pleads that conduct of the archbishops, bishops

and other Holy See personnel were a substantial factor in causing plaintiffs’ damages,

satisfying Kentucky’s causation requirements.

In addition, and as already noted, tortious acts committed by bishops,

archbishops and other Holy See personnel while engaged in the supervision of allegedly

abusive priests satisfy the requirements of the FSIA’s tortious act exception that the

tortious act occur in the United States and within the scope of employment.

Also, for the conduct of bishops and archbishops and other Holy See personnel

to serve as a basis for jurisdiction under the tortious act exception, these bishops,

archbishops and Holy See personnel must have been employees of the Holy See. As

noted above, under Kentucky law, this inquiry focuses on the degree of control exercised

by the employer over the individual or individuals in question. In their complaint,

11

Plaintiffs appear to have agreed with these applications of the tortious act exception: “The

Plaintiffs do not seek to hold the Defendant vicariously liable for the acts of its priests; rather, they seek

to hold the Defendant vicariously liable for the acts of its bishops and archbishops who, following the

directives of the Defendant, permitted childhood sexual abuse to occur.” Indeed, the alleged torts

committed by the bishops and archbishops occurred entirely within the United States. Moreover,

complying with the alleged 1962 Policy would fall within the scope of the bishops’ and archbishops’

employment.

Nos. 07-5078/5163 O’Bryan, et al. v. Holy See Page 28

plaintiffs allege facts that demonstrate that the Holy See exercised a significant degree

of control over the bishops and archbishops accused of having committed the tortious

acts in question. Taking these allegations as true, plaintiffs have sufficiently pled the

employee element of the tortious activity exception.12

Thus, the portions of plaintiffs’ claims that are based upon the conduct of

bishops, archbishops and Holy See personnel while supervising allegedly abusive clergy

satisfy all four requirements of the tortious act exception: this conduct served as a

substantial cause of the alleged abuse; the conduct occurred in the United States; the

conduct was within the scope of employment; and these individuals were, according to

the pleadings, Holy See employees.

However, although the four requirements are met for these claims, we must still

consider whether either of the two exceptions to the tortious act exception applies and

prevents its application: the discretionary-function exception and the arising-out-of-

misrepresentation-or-deceit exception.

According to the allegations in plaintiffs’ complaint, theories of liability

premised upon the supervision of the allegedly abusive clergy do not implicate the

discretionary function exception to the tortious act exception because the terms of the

supervision were not discretionary. According to the complaint, the 1962 Policy

“impose[d] the highest level of secrecy on the handling of clergy sexual abuse matters.”

Plaintiffs contend that this required secrecy prohibited Holy See personnel from, among

other things, reporting childhood sexual abuse to government authorities. Id. Thus,

following the 1962 Policy cannot, on the pleadings in plaintiffs’ complaint, be deemed

discretionary. We now apply these general conclusions to each of the plaintiffs’

remaining claims.13

12

As noted above, the district court also correctly employed the FSIA burden-shifting analysis

in connection with this inquiry.

13

See supra n.1.

Nos. 07-5078/5163 O’Bryan, et al. v. Holy See Page 29

1) Violation of Customary International Law of Human Rights (Class I Claim

II, Class II Claim I): Plaintiffs plead this claim against the Holy See itself, stating that

[t]he instructions, mandates and dictates of the Defendant, Holy See in

the United States prohibiting the disclosure of the identity and existence

of pedophiles and sexual predators under its control, thereby placing

children in a position of peril, is a gross violation of well-established,

universally recognized norms of international law of human rights.

This claim does not survive against the Holy See as it pertains to the actual promulgation

of the 1962 Policy because the promulgation itself occurred abroad. However, this claim

does survive against the Holy See as it pertains to the conduct of its employees who,

pursuant to the 1962 Policy, violated the terms of the relevant international laws through

their tortious supervisory conduct over the allegedly abusive clergy.

2) Negligence (Class I Claim III, Class II Claim II): Plaintiffs present three grounds

for negligence in their complaint: failure to provide “safe care”; failure to “warn”; and

failure to report. The failure to warn and failure to report prongs of the negligence claim

survive because they are premised on the conduct of Holy See employees who were

allegedly negligent in their supervision of abusive clergy. However, the claims of

negligence against the Holy See for its own conduct cannot survive because such

negligence would not have occurred in the United States. Furthermore, the claim of

failure to provide safe care does not survive. As the district court noted, the failure to

provide safe care amounts to a claim for negligent hiring. O’Bryan II, 471 F. Supp 2d

at 793. And, as outlined above, claims of negligent hiring fall within the discretionary

function exception. Indeed, the 1962 Policy, even according to plaintiffs’ allegations,

only required Holy See employees not to disclose information regarding sexual

misconduct, not to actually hire individuals who had engaged in prior sexual misconduct.

3) Breach of Fiduciary Duty (Class I Claim IV, Class II Claim III): Plaintiffs plead

this claim against the Holy See itself, stating that “a special legal relationship existed

between the Plaintiffs and the Defendant Holy See, in the nature of a fiduciary

relationship, which was carried out by and through priests, clerics, and administrators

under the absolute control of the Defendant . . . .” In turn, plaintiffs contend that the

Nos. 07-5078/5163 O’Bryan, et al. v. Holy See Page 30

“Defendant breached fiduciary duties owed to the Plaintiffs,” premised upon the “duty

to warn parents” and the “duty to report known or suspected perpetrators. This claim

survives against the Holy See for the actions of its supervising employees occurring in

the United States. As has already been emphasized, the claim cannot survive against the

Holy See itself for its own failures to warn or report because such tortious conduct

would have occurred abroad.

4) Tort of Outrage/Infliction of Emotional Distress (Class I Claim V, Class II

Claim IV): Plaintiffs plead this claim against the Holy See itself, stating:

The acts and omissions of the Defendant, Holy See alleged herein,

including the concealment of its policy of harboring and protecting its

abusive priests, agents and employees from public disclosure and

prosecution and directives prohibiting the reporting of child sexual abuse

to authorities . . . is conduct which is so outrageous and extreme in

degree, as to go beyond all possible bounds of decency, so as to be

regarded as utterly atrocious in a civilized society.

This claim cannot survive against the Holy See as it pertains to the actual promulgation

of the 1962 Policy because the promulgation itself occurred abroad. In addition, it

cannot survive against the Holy See for the conduct of its allegedly abusive priests

because the acts of alleged abuse did not occur within the scope of employment. In

contrast, this claim does survive against the Holy See as it pertains to the conduct of its

employees who, pursuant to the 1962 Policy, violated the terms of the relevant

international laws through their tortious supervisory conduct over the allegedly abusive

clergy.14

We next turn to considering whether the surviving theories of liability, as

outlined above, are precluded by the other exception to the tortious act exception:

whether they arise out of misrepresentation or deceit.

14

It also appears that the plaintiffs have abandoned this claim by stating in their response to the

Holy See’s motion to dismiss “[t]he Plaintiffs’ complaint also identifies claims for intentional infliction

of emotional distress . . . . Plaintiffs are no longer pursuing those claims.” (Plaintiffs’ Response to the

Holy See’s Motion to Dismiss at 6 n.9).

Nos. 07-5078/5163 O’Bryan, et al. v. Holy See Page 31

In contrast to Cabiri and Kozorowski, plaintiffs’ claims are not best characterized

as stemming directly from the misinformation disseminated by the Holy See. Instead,

plaintiffs’ claims are more akin to claims of negligent supervision as employees of the

Holy See are alleged to have provided inadequate supervision over those under its care.

In this way, these claims resemble other negligent supervision claims more than they

resemble claims brought by the plaintiffs in Cabiri and Kozorowski. See, e.g., Williams

v. Ky. Dep’t of Educ., 113 S.W.3d 145, 148 (Ky. 2003) (addressing claims of negligent

supervision on the part of high school faculty which resulted in the death of a student

and noting that “[i]t is well established in this jurisdiction that a school teacher can be

held liable for injuries caused by negligent supervision of his/her students”); see also

Yanero v. Davis, 65 S.W.3d 510, 528-31 (Ky. 2001); Nelson v. Turner, No. 2007-

CA–000489-MR, 2008 Ky. App. LEXIS 177 (Ky. Ct. App. June 6, 2008). We therefore

conclude that, at this stage of the litigation, the plaintiffs’ claims of violation of

customary international law of human rights, negligence, and breach of fiduciary duty

should not be dismissed for “arising out of . . . misrepresentation [or] deceit.” See 28

U.S.C. § 1605(a)(5)(B). We do however dismiss the last two claims advanced by

plaintiffs in their complaint (Class I Claims VI and VII, Class II Claims V and VI) as

they do arise out of misrepresentation or deceit.15

In conclusion, we also note that we believe the foregoing analysis to be

consistent with the analysis of the district court in O’Bryan II.

VII.

For the foregoing reasons, we affirm the district court’s partial grant of

defendant’s motion to dismiss.

15

In addition, plaintiffs’ complaint states that it pursues these claims against the Holy See “in its

capacity as an Unincorporated Association and Head of an International Religious Organization Only.”

As a result, because we have determined above that the Holy See cannot be sued in such a capacity, these

claims would appear to no longer be relevant. Moreover, plaintiffs admit as much in their Response to the

Holy See’s motion to dismiss. Plaintiffs’ Response to the Holy See’s Motion to Dismiss at 6 n.9 (stating

that “the complaint alleges claims for deceit . . . and misrepresentation . . . . Those latter causes of action

were expressly brought against the Defendant only in its capacity as an unincorporated association and

head of an international religious organization. In light of the [district] Court’s previous ruling that such

capacity does not apply here, those claims are no longer at issue).