Gupta v. Thai Airways International, Ltd.

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

SUBIR GUPTA, 

Plaintiff-Appellee, No. 04-56389

v.

 D.C. No.

CV-04-00152-RT

THAI AIRWAYS INTERNATIONAL,

LTD., OPINION

Defendant-Appellant.



Appeal from the United States District Court

for the Central District of California

Robert J. Timlin, Senior District Judge, Presiding

Argued October 25, 2006

Pasadena, California

Submitted May 30, 2007

Filed May 30, 2007

Before: Eugene E. Siler, Jr.,* A. Wallace Tashima, and

Carlos T. Bea, Circuit Judges.

Opinion by Judge Bea;

Dissent by Judge Tashima

*The Honorable Eugene E. Siler, Jr., Senior United States Circuit Judge

for the Sixth Circuit, sitting by designation.

6451

GUPTA v. THAI AIRWAYS INTERNATIONAL 6453

COUNSEL

Mark S. Priver, Ohashi & Priver, Pasadena, California, and

David A. Nelson, Nelson Law Firm, P.C., Pasadena, Califor-

nia, for the the defendant-appellant.

6454 GUPTA v. THAI AIRWAYS INTERNATIONAL

Luis E. Lopez, Lopez & Morris, LLP, Riverside, California,

for the plaintiff-appellee.

OPINION

BEA, Circuit Judge:

Thai Airways, International (“Thai Airways”) appeals from

the district court’s order denying Thai Airways’ motion to

dismiss for lack of subject matter jurisdiction pursuant to Fed.

R. Civ. P. 12(b)(1). Thai Airways claims the district court

erred in refusing to recognize the preclusive effect (“res judi-

cata”) of an earlier order dismissing, under the Foreign Sover-

eign Immunities Act (“FSIA” or “Act”), 28 U.S.C. §§ 1330,

1602 et seq., an identical action brought by Gupta. That Cali-

fornia order of dismissal was not appealed, and is now final.

We raised the issue of jurisdiction during oral argument sua

sponte and asked the parties to submit briefing on the discrete

issue whether this court has jurisdiction to consider the dis-

trict court’s holding that res judicata does not apply in this

case. We conclude that we have jurisdiction, and we reverse.

I.

Subir Gupta, Plaintiff-Appellee, was scheduled to fly from

Bangkok to Los Angeles. When Gupta attempted to board the

plane bound for Los Angeles, Thai Airways employees

refused to allow Gupta to board because they determined his

United States Visa was invalid. Gupta claims the employees

“subjected him to unwarranted accusations of fraud after [he]

presented a valid and current U.S. Visa.” Gupta was unable

to fly to Los Angeles on this date and claims he missed a

lucrative business meeting.

Gupta timely filed a complaint in California Superior

Court, Los Angeles County, alleging Thai Airways employees

GUPTA v. THAI AIRWAYS INTERNATIONAL 6455

subjected him to unwarranted accusations of fraud regarding

his visa that led to professional business losses. Gupta’s com-

plaint alleged claims of (1) negligence; (2) respondeat supe-

rior liability; (3) negligent hiring, training, and/or retention of

unfit employee; (4) intentional infliction of emotional dis-

tress; (5) employer’s authorization of employee’s wrongful

conduct; (6) slander per se; and (7) intentional interference

with contractual relations.

Thai Airways successfully moved to dismiss for lack of

subject matter jurisdiction1 asserting it was a “foreign state”

under FSIA, and no exception to the FSIA was applicable.2

1

In California the typical method for raising lack of subject matter juris-

diction is by means of a demurrer. California Code of Civil Procedure

(“CCP”) § 430.30(a) (“When any ground for objection to a complaint . . .

appears on the face thereof . . . the objection on that ground may be taken

by a demurrer to the pleading.”). Motions to dismiss for lack of subject

matter jurisdiction, however, have been recognized in California case law.

See, e.g., Goodwine v. Superior Court, 63 Cal. 2d 481, 483-85 (1965); In

re Guardianship of Donaldson, 178 Cal. App. 3d 477, 484-85 (1986).

These motions have been described as “a substitute[ ] for general demur-

rer.” 5 Witkin, California Procedure, Pleading, § 956 (4th ed. 1997). The

fact that a motion to dismiss for lack of subject matter jurisdiction was

used in this case rather than a general demurrer does not affect the analysis

here because a general demurrer alleging the same facts would have been

sustained given Thai Airways’ immunity under the FSIA, and Gupta’s

failure to plead an exception to the FSIA. See id. (explaining that “any

procedural error in eliminating the complaint by motion rather than

demurrer is not prejudicial or reversible if a general demurrer could have

been properly sustained without leave to amend”).

2

United States courts, both federal and state, possess subject matter and

personal jurisdiction over a “foreign sovereign” only when an exception

to the FSIA applies. Compania Mexicana de Aviacion, S.A. v. U.S. Dist.

Ct., 859 F.2d 1354, 1358-59 (9th Cir. 1988) (per curiam). The California

Court of Appeal has explained that the FSIA “is the sole basis for obtain-

ing jurisdiction over a ‘foreign state’ ” in California state court. Bolkiah

v. Super. Ct., 74 Cal. App. 4th 984, 992 (1999). Thus, although Gupta’s

complaint alleged tortious action by Thai Airways—a subject matter over

which the superior court normally would have jurisdiction—the superior

court’s jurisdiction over Thai Airways depended on the applicability of an

exception to the FSIA.

6456 GUPTA v. THAI AIRWAYS INTERNATIONAL

The superior court rejected Gupta’s assertion that Thai Air-

ways had implicitly waived its immunity under 28 U.S.C.

§ 1605(a)(1) by communicating with Gupta regarding Gupta’s

suit and by not responding to the service of the complaint.

Consequently, the court held Thai Airways immune from suit

in United States courts in accordance with 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 . . . .”). Gupta

did not appeal the state court’s order dismissing the action.3

Rather, Gupta filed a complaint in federal district court in Jan-

uary 2004, alleging identical causes of action as those raised

in the dismissed state court complaint.

Thai Airways moved to dismiss Gupta’s federal case pursu-

ant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(3)

forum non conveniens. Regarding Rule 12(b)(1), Thai Air-

ways asserted that the issue of subject matter jurisdiction and

immunity under the FSIA was res judicata by virtue of the

state court’s prior determination of these issues. Thai Airways

also argued, without reliance on res judicata, that it was a for-

eign state and that no exception to the FSIA was applicable.

Thai Airways is 79% owned by the Ministry of Finance of the Kingdom

of Thailand. Under federal law, an entity whose controlling shares or

majority interest is owned by a foreign state or political subdivision is

itself a “foreign state.” 28 U.S.C. § 1603(b)(2). The FSIA provides that a

foreign state is immune from suit in state and federal court unless an

exception to the FSIA applies. Id. § 1604. Gupta has never contended Thai

Airways is not a “foreign state.”

3

The superior court’s order is final because Gupta neither amended the

complaint nor appealed the dismissal within the time allowed for such

actions. “An action is deemed to be pending from the time of its com-

mencement until its final determination upon appeal, or until the time for

appeal has passed . . . .” Cal. Civ. Proc. Code § 1049 (emphasis added).

Pursuant to the California Rules of Court, Gupta had 60 days to file a

notice of appeal. Cal. Rules of Court 8.104(a). Thus, when the 60 days

passed without a notice of appeal, the superior court’s order became final

on December 15, 2003.

GUPTA v. THAI AIRWAYS INTERNATIONAL 6457

Gupta responded by asserting that Thai Airways is subject

to the jurisdiction of United State courts pursuant to the War-

saw Convention, which governs the international transporta-

tion of passengers and cargo. See Convention for the

Unification of Certain Rules Relating to International Trans-

portation by Air, Oct. 12, 1929, 49 Stat. 3000, T.S. No. 876

(1934), reprinted in note following 49 U.S.C. § 40105.4 Gupta

also argued that the forum was proper because the Warsaw

Convention allowed for suit “at the place of destination.”

In ruling on Thai Airways’ motion to dismiss, the district

court held that the prior state judgment did not bar re-

litigation of the claim in federal court. Nominally applying the

preclusion rules of California, the court explained that “a

court’s dismissal for lack of jurisdiction is not res judicata as

to the merits of the claim because it was not a judgment on

the merits.” Because the state court’s order dismissed

Gupta’s action for lack of subject matter jurisdiction based on

Thai Airways’ immunity under the FSIA, the court held it

“was not a judgment on the merits and has no preclusive

effect.”

Next the district court held that “[s]uits against foreign

states under the Warsaw Convention are excepted from FSIA

immunity.” On this basis, the district court then held that the

suit against Thai Airways, even though it is a foreign state-

owned carrier, was properly brought in United States federal

court. The Convention applied to this case, the district court

reasoned, because the act of embarking on an international

airline flight was sufficient to bring the incident within the

ambits of the Convention.

4

Gupta argued Articles 17 and 19 of the Warsaw Convention brought

Thai Airways within the jurisdiction of United States courts despite the

FSIA. Article 17 provides for carrier liability when physical injury occurs

on board the aircraft or in the course of embarking or disembarking the

aircraft. Article 19 provides for carrier liability for damage caused “by

delay in the carriage by air of passengers, luggage or goods.”

6458 GUPTA v. THAI AIRWAYS INTERNATIONAL

Finally the court explained that the forum was proper

because Article 28 of the Warsaw Convention allows for

actions brought before a court located in the place of the pas-

senger’s destination. Since Gupta was bound for Los Ange-

les, the district court held that forum is proper in federal

district court in California.

Thai Airways now appeals the district court’s order deny-

ing its motion to dismiss on grounds of Rule 12(b)(1). Thai

Airways argues that Gutpa’s action in federal court is barred

under principles of res judicata because the state court deter-

mined that Thai Airways is immune from suit in the United

States on the identical claims asserted in Gupta’s federal com-

plaint.

II.

Because this appeal is from an order denying a motion to

dismiss for lack of subject matter jurisdiction—an order

which ordinarily is not appealable—we must first determine

whether we have jurisdiction to consider Thai Airways’

appeal. See Savage v. Glendale Union High Sch., 343 F.3d

1036, 1040 (9th Cir. 2003) (stating that “the denial of a

motion to dismiss is ordinarily not a complete and final judg-

ment subject to appeal . . .”). Although the parties did not

raise the issue of jurisdiction, we have the obligation to con-

firm our jurisdiction sua sponte before determining whether

the California state court’s holding that Thai Airways is

immune from suit under the FSIA is res judicata in federal

court. WMX Techs., Inc. v. Miller, 104 F.3d 1133, 1135 (9th

Cir. 1997) (en banc) (“Although the parties did not raise the

question of our jurisdiction, we have raised it sua sponte, as

we must.”). We conclude that jurisdiction exists.

[1] The FSIA “is the exclusive source of subject matter

jurisdiction over all suits involving foreign states or their

instrumentalities.” Compania Mexicana de Aviacion, S.A. v.

U.S. Dist. Ct., 859 F.2d 1354, 1358 (9th Cir. 1988) (per

GUPTA v. THAI AIRWAYS INTERNATIONAL 6459

curiam). Hence, only if one of the Act’s “specified exceptions

to sovereign immunity applies” may a court exercise subject

matter jurisdiction over a foreign sovereign. Verlinden B.V. v.

Cent. Bank of Nigeria, 461 U.S. 480, 489 (1983).5

[2] Because jurisdiction over a foreign sovereign may be

exercised only by applicability of an exception to the FSIA,

we have long held that “an order denying immunity under the

FSIA is appealable under the collateral order doctrine.” Com-

pania Mexicana, 859 F.2d at 1358.6 “An interlocutory appeal

5

In Verlinden, the Supreme Court further explained:

The [FSIA] must be applied by the District Courts in every action

against a foreign sovereign, since subject matter jurisdiction in

any such action depends on the existence of one of the specified

exceptions to foreign sovereign immunity[.] At the threshold of

every action in a District Court against a foreign state, therefore,

the court must satisfy itself that one of the exceptions applies—

and in so doing it must apply the detailed federal law standards

set forth in the Act.

461 U.S. at 493-94.

6

In Compania Mexicana, as in this case, the district court denied a

motion to dismiss for want of jurisdiction on the basis of foreign sovereign

immunity. 859 F.2d at 1357. We explained that the collateral order doc-

trine of Cohen v. Beneficial Indus. Loan Corp., 337 U.S. 541 (1949), con-

templates interlocutory review of a small class of “orders that conclu-

sively determine the disputed question, resolve an important issue com-

pletely separate from the merits of the action, and are effectively unre-

viewable on appeal from a final judgment.” Compania Mexicana, 859

F.2d at 1358. Orders dealing with foreign sovereign immunity fell within

this class of collateral orders, we reasoned, because like claims of absolute

or qualified immunity of a public official, foreign sovereign immunity “is

an immunity from suit rather than a mere defense to liability; it is effec-

tively lost if a case is erroneously permitted to go to trial.” Id. (emphasis

added) (citing Mitchell v. Forsyth, 472 U.S. 511, 526 (1985)). We also

noted that both the text of the FSIA and the legislative history of the Act

“support[ed] a prompt appellate determination of sovereign immunity.” Id.

Our later case law on the subject has only reaffirmed the holding of Com-

pania Mexicana. See Blaxland v. Commonwealth Dir. of Pub. Prosecu-

tions, 323 F.3d 1198, 1203 (9th Cir. 2003); Phaneuf v. Republic of

Indonesia, 106 F.3d 302, 304 (9th Cir. 1997).

6460 GUPTA v. THAI AIRWAYS INTERNATIONAL

insures that ‘a foreign state shall be immune from the jurisdic-

tion of the courts of the United States and of the States except

as provided [in the Act].’ ” Id. (alteration in the original)

(quoting 28 U.S.C. § 1604).7 Accordingly, we have jurisdic-

tion over the order denying Thai Airways’ Rule 12(b)(1)

motion.

We note that each of our sister circuits that has considered whether a

denial of a motion to dismiss on grounds of foreign sovereign immunity

is an appealable collateral order have unanimously held that it is. See Rux

v. Republic of Sudan, 461 F.3d 461, 466-67 (4th Cir. 2006); Southway v.

Cent. Bank of Nigeria, 198 F.3d 1210, 1214 (10th Cir. 1999); Rein v.

Socialist People’s Libyan Arab Jamahiriya, 162 F.3d 748, 755-56 (2d Cir.

1998); Hond. Aircraft Registry, Ltd. v. Gov’t of Hond., 129 F.3d 543, 545

(11th Cir. 1997); Fed. Ins. Co. v. Richard I. Rubin & Co., Inc., 12 F.3d

1270, 1279-82 (3d Cir. 1993); Stena Rederi AB v. Comision de Contratos,

923 F.2d 380, 385-86 (5th Cir. 1991); Foremost-McKessen, Inc. v. Islamic

Republic of Iran, 905 F.2d 438, 442-43 (D.C. Cir. 1990); Gould, Inc. v.

Pechiney Ugine Kuhlmann, 853 F.2d 445, 450-52 (6th Cir. 1988); Segni

v. Commercial Office of Spain, 816 F.2d 344, 346-47 (7th Cir. 1987).

7

We reject Gupta’s contention that the Supreme Court’s decision in Will

v. Hallock, 126 S. Ct. 952 (2006), disallows interlocutory review of ques-

tions of foreign sovereign immunity. The issue in Hallock dealt only with

“whether a refusal to apply the judgment bar of the Federal Tort Claims

Act is open to collateral appeal.” Id. at 956. In ruling such refusal does not

constitute an appealable collateral order, the Court stressed that the class

of collaterally appealable orders is “narrow and selective in its member-

ship.” Id. at 958. The Court listed orders that fall within this narrow class

and included orders denying absolute and qualified immunity in the list,

id.—orders we analogized to orders denying a foreign sovereign immunity

under FSIA in Compania Mexicana. 859 F.2d at 1358. The Court reiter-

ated the three factors to consider in determining whether an order is collat-

erally appealable: “ ‘[1] conclusively determine the disputed question, [2]

resolve an important issue completely separate from the merits of the

action, and [3] be effectively unreviewable on appeal from a final judg-

ment.’ ” Hallock, 126 S. Ct. at 957 (alteration in the original) (quoting

Puerto Rico Aqueduct and Sewer Auth. v. Metcalf & Eddy, Inc., 506 U.S.

139, 144 (1993)). These are the precise factors we analyzed in Compania

Mexicana. 859 F.2d at 1358. In short, nothing in Hallock causes us to

question the reasoning of Compania Mexicana and our later case law that

holds orders denying a foreign sovereign immunity are immediately

appealable collateral orders.

GUPTA v. THAI AIRWAYS INTERNATIONAL 6461

Thai Airways moved the district court to dismiss Gupta’s

action on two grounds: lack of subject matter jurisdiction

under Fed. R. Civ. P. 12(b)(1) and forum non conveniens

under Fed. R. Civ. P. 12(b)(3).8 In support of its motion to

dismiss under Rule 12(b)(1), Thai Airways briefed two

grounds for dismissal in the alternative: (1) the state court’s

decision already determined Thai Airways’ immunity under

FSIA and, under principles of res judicata, therefore pre-

cludes further review of the issue; and (2) Thai Airways is a

“foreign state” within the meaning of FSIA, and no FSIA

exception is applicable to confer the court jurisdiction. The

district court rejected both of Thai Airways’ arguments and

issued an order denying Thai Airways’ motion to dismiss for

lack of jurisdiction.

It is from this order that Thai Airways is appealing. Under

Compania Mexicana, we may review this order denying Thai

Airways immunity under the FSIA.9

8

Thai Airways does not appeal its claim of forum non conveniens. If it

had, we would have lacked jurisdiction to consider that claim. See Coyle

v. P.T. Garuda Indonesia, 363 F.3d 979, 984 (9th Cir. 2004).

9

The dissent faults our conclusion on the basis the Thai Airways’ res

judicata claim does not involve FSIA immunity. Were the issue of res

judicata fully divorced from the issue of FSIA immunity, we would agree

with the thoughtful and cogent dissent and dismiss for want of appellate

jurisdiction. However, we do not agree with the dissent’s premise, which

ignores that Thai Airways’ res judicata claim involves FSIA immunity;

indeed it is based in FSIA immunity and nothing else. As explained above,

Thai Airways is appealing from the district court’s order denying Thai

Airways FSIA immunity; we understand Thai Airways’ claim on appeal

to be that it is entitled to FSIA immunity because the state court’s decision

holding Thai Airways was so immune is res judicata in federal court:

A district court judgment dismissing an action for lack of subject

matter jurisdiction because of FSIA is determinative of the sover-

eign immunity question. Thus, a private party, who lost on the

question of jurisdiction, cannot bring the same case in a state

court claiming the federal court’s decision extended only to the

question of federal jurisdiction and not to sovereign immunity or

only had force in the federal courts.

6462 GUPTA v. THAI AIRWAYS INTERNATIONAL

III

A.

The existence of subject matter jurisdiction under the FSIA

is a question of law reviewed de novo. See Coyle v. P.T.

Garuda Indonesia, 363 F.3d 979, 984 n.7 (9th Cir. 2004);

Blaxland, 323 F.3d at 1203.

B.

While the order from which Thai Airways is appealing is

one denying its motion to dismiss for lack of subject matter

jurisdiction, Thai Airways’ first theory supporting dismissal is

that the California state court already determined Thai Air-

ways was immune under FSIA. Thus, Thai Airways contends

this determination has preclusive effect in federal court under

the principle of res judicata. We agree.

[3] Whether a prior state court judgment precludes re-

litigation of an identical claim in federal court depends on the

14A Charles Alan Wright, Arthur R. Miller, & Edward H. Cooper, Juris-

diction and Related Matters § 3662 (3d ed. 1998) (emphasis added). The

same result occurs when the private party first brought the case in the state

court, then filed in federal court. See Kremer v. Chem. Constr. Corp., 456

U.S. 461, 466 (1982).

Hence, the “sovereign immunity question” is here settled, and to deny

interlocutory appeal in this case would frustrate the purpose of FSIA,

which is to provide, like qualified immunity, “an immunity from suit rather

than a mere defense to liability . . . .” Compania Mexicana, 859 F.2d at

1358 (emphasis added); see Saucier v. Katz, 533 U.S. 194, 200-01 (2001);

Brittain v. Hansen, 451 F.3d 982, 987 (9th Cir. 2006) (“[Q]ualified immu-

nity is ‘immunity from suit rather than mere defense to liability . . . .”

(quoting Mitchell, 472 U.S. at 526)). Thai Airways’ immunity, to which

it is entitled pursuant to the state court’s decision, would be “effectively

lost if [the] case is erroneously permitted to go to trial.” Compania Mex-

icana, 859 F.2d at 1358.

GUPTA v. THAI AIRWAYS INTERNATIONAL 6463

preclusion rules of the state. Migra v. Warren City Sch. Dist.

Bd. of Educ., 465 U.S. 75, 81 (1984); Allen v. McCurry, 449

U.S. 90, 96 (1980). This principle results from the statutory

command in 28 U.S.C. § 1738 that “judicial proceedings . . .

shall have the same full faith and credit in every court within

the United States and its Territories and Possessions as they

have by law or usage in the courts of such State from which

they are taken.” “This statute has long been understood to

encompass the doctrines of res judicata, or claim preclusion,

and collateral estoppel, or issue preclusion.” San Remo Hotel,

L.P. v. City and County of San Francisco, Cal., 545 U.S. 323,

336 (2005) (internal quotation marks omitted). Hence, we

look to California law to determine whether principles of res

judicata precluded the district court from deciding anew Thai

Airways’ immunity under the FSIA.

[4] Under California law, “ ‘[a]n order denying a motion or

dismissing a proceeding for procedural reasons such as lack

of jurisdiction is not res judicata as to the merits of any under-

lying substantive question.’ ” Kalai v. Gray, 109 Cal. App.

4th 768, 774 (2003) (emphasis added) (quoting Gorman v.

Gorman, 90 Cal. App. 3d 454, 462 (1979)).10 However, and

10

In Kalai, “underlying substantive question” referred to the merits of

a claim a homeowner-plaintiff brought against a contractor based on a dis-

pute arising from home improvements. 109 Cal. App. 4th at 771-72. The

agreement between the homeowner and the contractor included an arbitra-

tion clause that stated the exclusive remedy for either party would be

through arbitration. Id. The homeowner, however, brought suit in state

court, and “rather than filing a petition to compel arbitration,” the contrac-

tor moved for summary judgment on the basis of the arbitration agree-

ment. Id. at 772. The contractor’s motion was based on Charles J. Rounds

Co. v. Joint Council of Teamsters No. 42, 4 Cal. 3d 888 (1971), “in which

the [California] Supreme Court held that a party faced with a lawsuit filed

in contravention of an arbitration agreement may move for summary judg-

ment as an option to filing a petition to compel arbitration pursuant to

Title 9.” Id. The court granted the motion for summary judgment, and in

so doing, ruled that the homeowner had waived his right to arbitrate by

bringing suit in state court. Id. The homeowner appealed.

6464 GUPTA v. THAI AIRWAYS INTERNATIONAL

determinative here, such dismissal does bar re-litigation of

“ ‘issues necessary for the determination of jurisdiction.’ ”

MIB, Inc. v. Super. Ct., 106 Cal. App. 3d 228, 233 (1980)

(quoting Nichols v. Canoga Indus., 83 Cal. App. 3d 956, 967

(1978)).11 As the California Supreme Court explained, “when

the decision on the jurisdictional question is based upon a

determination of the merits of an issue before the court, it

constitutes a binding determination of that issue.” Shore v.

Shore, 43 Cal. 2d 677, 681 (1954).

The appellate court reversed, holding that the homeowner did not waive

his rights to arbitrate by filing suit in state court. In so ruling, the court

mentioned, among numerous other grounds, that the homeowner had not

litigated the merits of his claims in superior court, and therefore the deci-

sion did not preclude arbitration. Id. at 773-74. Kalai does not address the

preclusive effect of a determination of jurisdictional facts, which is the

discrete issue here.

11

In MIB, a nonresident corporate defendant served with summons and

complaint by mail filed a motion to quash the service of summons on two

grounds: lack of jurisdiction because the defendant did not have sufficient

contacts with California, and res judicata. The defendant asserted res judi-

cata because rulings in three prior actions filed by plaintiff against the

defendant had determined that the defendant had insufficient contacts with

the state to be subject to personal jurisdiction in California. 83 Cal. App.

3d at 230. The trial court denied the defendant’s motion, and the defendant

appealed. The California Court of Appeal reversed based on the “res judi-

cata effect to findings of jurisdictional facts . . . .” Id. at 234. Although a

dismissal because of lack of jurisdiction is not res judicata on the merits

of the underlying action, “a finding with respect to jurisdictional facts will

be treated as res judicata in subsequent actions” with respect to those facts.

Id. at 232. Because the facts underlying California’s personal jurisdiction

over the defendant had already been determined in the previous actions,

the plaintiff was prohibited from re-litigating the issue of California

courts’ personal jurisdiction over the defendant.

The decision in MIB fully accords with the explanation in Kalai that

dismissal for procedural reasons does not bar future litigation of the merits

of a claim. MIB simply prohibits re-litigation of jurisdictional facts already

decided; the merits of the claim may still be litigated in a court of compe-

tent jurisdiction. The present case is analogous to MIB because the supe-

rior court here made findings on jurisdictional facts.

GUPTA v. THAI AIRWAYS INTERNATIONAL 6465

C.

[5] Here, the California state court concluded it lacked sub-

ject matter jurisdiction because Thai Airways is 79% owned

by the Ministry of Finance of the Kingdom of Thailand and

is therefore immune from suit in courts in the United States

under the FSIA. See 28 U.S.C. § 1603(b)(2) (including as a

“foreign state” “any entity . . . a majority of whose shares or

other ownership interest is owned by a foreign state or politi-

cal subdivision thereof”). The state court further concluded

Gupta had not alleged any of the exceptions to the FSIA

applied to Thai Airways. These findings were necessary to the

determination of jurisdiction and therefore have a preclusive

effect under Shore, 43 Cal. 2d at 681, and MIB, 106 Cal. App.

3d at 231-35.12

12

We note that the result here is not affected by the recent decision in

Af-Cap, Inc. v. Chevron Overseas (Congo) Ltd., 475 F.3d 1080 (9th Cir.

2007). There, we declined to apply principles of collateral estoppel in

determining the legal meaning of FSIA’s exception for “used for a com-

mercial activity in the United States” under 28 U.S.C. § 1610(a). Id. at

1086-87. A previous Fifth Circuit decision, stemming from the same con-

troversy before this court in Af-Cap and involving the same plaintiff,

already had interpreted the “commercial activity” exception in § 1610(a).

Id. at 1087; see Af-Cap, Inc. v. Republic of Congo, 383 F.3d 361 (5th Cir.

2004). We explained that “ ‘[i]ssue preclusion has never been applied to

issues of law with the same rigor as to issues of fact[.]’ ” Af-Cap, 475 F.3d

at 1086 (first alteration in the original) (quoting Segal v. Am Tel. & Tel.

Co., Inc., 606 F.2d 842, 845 (9th Cir. 1979). We also noted the novelty

of the issue and the importance of developing the law in the area—an area

where only one circuit court had addressed an issue as yet unresolved by

the Supreme Court. Id. We then reviewed de novo the meaning of the

“used for commercial activity” exception in § 1610(a). Id. at 1087-91.

The case before us bears no resemblance to Af-Cap. Here, on a purely

factual question of immunity—ownership interest of more than 50% by a

foreign sovereign and nonexistence of allegations of exceptions to FSIA—

we are called upon to consider only whether California principles of res

judicata bar Gupta from re-litigating Thai Airways’ immunity in federal

court where a state court already determined the factual basis for the appli-

cation of the FSIA: that Thai Airways is immune.

6466 GUPTA v. THAI AIRWAYS INTERNATIONAL

[6] Under California law, it makes no difference that Gupta

now contends the Warsaw Convention provides the court

jurisdiction. The California Appellate Court in MIB faced a

similar situation where in the fourth action attempting to

establish jurisdiction over an out-of-state defendant, the plain-

tiffs introduced new evidence and pleaded new causes of

action. 106 Cal. App. 3d at 231. The court held that evidence

“which was not introduced in the earlier proceedings” does

not overcome the preclusive effect of the prior decisions. Id.

at 235. Even if wrong, an earlier decision involving the same

issue and the same parties, “is as conclusive as a correct one.”

Id. Gupta had a full and fair opportunity to establish the juris-

diction of United States courts over Thai Airways. He failed

to do so. He does not now get a do-over.13

Accordingly, we REVERSE and REMAND with instruc-

tions to the district court to vacate its order and dismiss

Gupta’s suit for lack of jurisdiction.14

REVERSED and REMANDED.

TASHIMA, Circuit Judge, dissenting:

The majority finds appellate jurisdiction in this case only

by mistakenly assuming that if any issue decided by the dis-

trict court is subject to interlocutory appeal, any other issue

decided in the same order can also be reached on interlocutory

appeal. Because I disagree and would dismiss this interlocu-

tory appeal for lack of appellate jurisdiction over the limited

issues raised and not reach the merits, I respectfully dissent.

13

We say nothing about whether Gupta can raise his claims against Thai

Airways where his claims are not subject to the FSIA.

14

Having so determined, we need not address Thai Airways’ claim that

Gupta’s federal court action is barred under the Rooker-Feldman doctrine.

GUPTA v. THAI AIRWAYS INTERNATIONAL 6467

Under the collateral order doctrine, this court would have

jurisdiction over an interlocutory appeal from that portion of

the district court’s order denying Thai Airways’ claim to sov-

ereign immunity under the Foreign Sovereign Immunities Act

(“FSIA”), 28 U.S.C. §§ 1602-1611. But this rule does not

confer jurisdiction over an interlocutory appeal from other

parts of the same order.

Thai Airways was very specific of the issues it raised on

this appeal. It raised only two issues. To quote fully the “Is-

sues Presented for Review” section of Thai Airways’ opening

brief:

1. Whether the District Court erred in Denying

Thai Airways’ motion to dismiss after the State

Superior Court determined, in an identical prior

action, that Thai Airways was immune from suit

on Gupta’s claim in the United States under the

Foreign Sovereign Immunities Act (“FISA”). 28

U.S.C. § 1604; Saudi Arabia v. Nelson, 507 U.S.

349, 355 (1993).

2. Whether Gupta’s subsequent identical action

against Thai Airways in federal court was a de

facto appeal of the prior State Court determina-

tion and thus barred under the Rooker-Feldman

Doctrine.

In support of its first issue, Thai Airways argued that the

district court erred in denying its motion to dismiss because

the prior ruling by the state superior court was res judicata. In

support of its second issue, Thai Airways argued that under

the Rooker-Feldman doctrine,1 Gupta’s action in the district

court was a de facto appeal of the state court’s dismissal of

his earlier action. Thai Airways raised no argument in its

1

See Rooker v. Fidelity Trust Co., 263 U.S. 413 (1923; Dist. of Colum-

bia Court of Appeals v. Feldman, 460 U.S. 462 (1983).

6468 GUPTA v. THAI AIRWAYS INTERNATIONAL

briefs that it was immune from suit as a foreign state under

the FSIA. Yet, because Thai Airways is taking an interlocu-

tory appeal from an “order denying Thai Airways immunity

under the FSIA,” Maj. op. at 6461 (emphasis added), the

majority concludes, without analysis and erroneously in my

view, that we have jurisdiction to review that portion of the

district court’s order denying dismissal on the basis of res

judicata.

The collateral order doctrine is intended to allow immediate

appeal only of “that small class [of decisions] which finally

determine claims of right separable from, and collateral to,

rights asserted in the action, too important to be denied review

and too independent of the cause itself to require that appel-

late consideration be deferred until the whole case is adjudi-

cated.” Cohen v. Beneficial Indus. Loan Corp., 337 U.S. 541,

546 (1949). “The requirements for collateral order appeal

have been distilled down to three conditions: that an order (1)

conclusively determine the disputed question, (2) resolve an

important issue completely separate from the merits of the

action, and (3) be effectively unreviewable on appeal from a

final judgment.” Will v. Hallock, 126 S. Ct. 952, 957 (2006)

(citation and internal quotation marks omitted).

While it is true that our case law permits an immediate

interlocutory appeal from an order denying a motion to dis-

miss based on foreign sovereign immunity, Compania Mex-

icana de Aviacion, S.A. v. U.S. Dist. Court, 859 F.2d 1354,

1358 (9th Cir. 1988) (per curiam), it is equally well-settled

that the denial of a motion to dismiss based on res judicata

grounds is not immediately appealable. See Will, 126 S. Ct. at

960 (“[The] rule of respecting a prior judgment by giving a

defense against relitigation has not been thought to protect

values so great that only immediate appeal can effectively

vindicate them.”). To repeat, in this case, while it is true that

the order Thai Airways appeals from rejected its claim of sov-

ereign immunity, Thai Airways’ only arguments on appeal are

GUPTA v. THAI AIRWAYS INTERNATIONAL 6469

directed to the other bases of the order, those resting on res

judicata and the Rooker-Feldman doctrine.2

Although the cases discussing the collateral order doctrine

sometimes loosely refer to interlocutory orders as being

appealable, in fact, the cases actually analyze the specific

claim or issue presented in determining the scope of their

jurisdiction on an interlocutory appeal. And each claim pre-

sented must independently meet the requirements of the col-

lateral order doctrine in order for it to be considered on inter-

locutory appeal. Appellate jurisdiction over one claim rejected

in a district court order does not confer jurisdiction over all

other claims rejected in the same order. Abney v. United

States, 431 U.S. 651, 662-63 (1977); see also United States v.

Yellow Freight Sys., Inc., 637 F.2d 1248, 1251 (9th Cir. 1980)

(“Inquiry into the immediate appealability of a particular pre-

trial order must focus upon each claim asserted.”).

In Abney, after ruling that a denial of a criminal defendant’s

motion to dismiss on double jeopardy grounds is an immedi-

ately appealable collateral order, the Supreme Court noted

that “we, of course, do not hold that other claims contained

in the motion to dismiss are immediately appealable as well.”

431 U.S. at 662-63. The Court held that “other claims pre-

sented to, and rejected by, the district court in passing on the

accused’s motion to dismiss . . . . are appealable if, and only

if, they too fall within Cohen’s collateral-order exception to

the final-judgment rule.” Id. at 663. The Court thus held that

the court of appeals lacked jurisdiction to review the district

2

Thai Airways did not make any Rooker-Feldman-based arguments to

the district court. “As a general rule, a federal appellate court does not

consider an issue not passed upon below.” Dodd v. Hood River County,

59 F.3d 852, 863 (9th Cir. 1995) (citation and internal quotation marks

omitted). Even if we wished to deviate from this general rule, we lack

jurisdiction over the Rooker-Feldman argument for the same reasons that

we lack jurisdiction over the res judicata issue.

6470 GUPTA v. THAI AIRWAYS INTERNATIONAL

court’s denial of the motion to dismiss based on insufficiency

of the indictment. Id.3

The principle that appellate courts must examine each

claim or issue presented separately to determine their jurisdic-

tion on interlocutory appeal is also reflected in the require-

ments that an order must meet to be immediately appealable.

Those requirements are phrased in terms of a disputed “ques-

tion” — in the singular — indicating that it is not the breadth

of the order that defines the scope of appellate jurisdiction on

an interlocutory appeal. Rather, each particular appealable

issue that is resolved by the order must be examined sepa-

rately. See Will, 126 S. Ct. at 957 (noting that an order must

“conclusively determine the disputed question” and “resolve

an important issue completely separate from the merits” to be

immediately appealable) (emphasis added).

Hence, the issue here is whether separate claims/defenses

are raised by Thai Airways’ arguments to the district court of

(1) a substantive entitlement to foreign sovereign immunity,

and (2) issue preclusion as to its entitlement to foreign sover-

eign immunity. Here, under simple logic, applying Abney, if

the two arguments constitute separate claims, then this court

does not have jurisdiction over an appeal taken solely from

the portion of the district court’s order rejecting Thai Air-

ways’ issue preclusion argument. The fact that the ruling on

one argument is interlocutorily appealable does not mean that

the other is as well.4

3

The Abney rule may be eased somewhat in instances where courts

choose to exercise pendent appellate jurisdiction. In this instance, how-

ever, pendent jurisdiction is inapplicable because there is no independent

basis for jurisdiction to which jurisdiction over this matter can be “ap-

pended.” Cf. Swint v. Chambers County Comm’n, 514 U.S. 35, 50-51

(1995) (“We need not definitively or preemptively settle here whether or

when it may be proper for a court of appeals, with jurisdiction over one

ruling, to review, conjunctively, related rulings that are not themselves

independently appealable.”).

4

The majority’s reliance on Compania Mexicana is misplaced because

there the only issue that was before the appellate court on interlocutory

appeal was sovereign immunity under the FSIA.

GUPTA v. THAI AIRWAYS INTERNATIONAL 6471

There may be instances where it is not entirely clear

whether the two arguments can be considered separate

defenses.5 An immunity defense and an issue preclusion

defense, however, are clearly unrelated, separate defenses.

See, e.g., Timpanogos Tribe v. Conway, 286 F.3d 1195, 1200

(10th Cir. 2002) (refusing to exercise pendent jurisdiction

over a res judicata claim in an interlocutory appeal of the

denial of a motion to dismiss on Eleventh Amendment

grounds, because there was no showing that the res judicata

claim was “inextricably intertwined” with the Eleventh

Amendment claim).6

Here, the rationale for applying the Cohen collateral order

doctrine to appeals from denials of foreign sovereign immu-

nity does not encompass instances where the appeal is taken

and supported solely on the grounds of issue preclusion. The

Supreme Court has pointedly remarked that “the third Cohen

question, whether a right is ‘adequately vindicable’ or ‘effec-

tively reviewable [on appeal from a final judgment],’ simply

cannot be answered without a judgment about the value of the

interests that would be lost through rigorous application of a

final judgment requirement.” Digital Equip. Corp. v. Desktop

Direct, Inc., 511 U.S. 863, 878-79 (1994).

5

The transactional definition of a “claim” for purposes of claim preclu-

sion, which is aimed at determining whether two suits allege the same

cause of action, is unhelpful here, where the court must consider the rela-

tionship between defenses rather than between claims. Cf. Cent. Delta

Water Agency v. United States, 306 F.3d 938, 952 (9th Cir. 2002) (most

important factor in claim preclusion analysis is “whether the two suits

arise out of the same transactional nucleus of facts”).

6

The majority argues that because the state court judgment was based

on FSIA immunity, that should make a difference in determining whether

we have jurisdiction over this interlocutory appeal based only on res judi-

cata, Maj. op. at 6461-62 n.9, but it cites no case in support of that asser-

tion. It further conflates the inquiry by asserting that “to deny interlocutory

appeal in this case would frustrate the purposes of the FSIA.” Id. But that

frustration is caused by Thai Airways appealing only from the res judicata

portion of the district court’s order and not appealing from the FSIA

immunity portion of the same order.

6472 GUPTA v. THAI AIRWAYS INTERNATIONAL

In explaining why pretrial rulings based on res judicata

grounds do not merit immediate appeal, courts have empha-

sized that the res judicata doctrine is not meant to give a

defendant an absolute right to avoid trial. See, e.g., In re Cor-

rugated Container Antitrust Litig., 694 F.2d 1041, 1043 (5th

Cir. 1983) (“[T]he only injury [from denial of immediate

review] . . . is that [the defendant] will have to present its

defense at trial, but that sort of injury follows in every denial

of a motion to dismiss a complaint and does not justify an

exception to the final-judgment rule.”); see also R.R. Donnel-

ley & Sons Co. v. FTC, 931 F.2d 430, 432-33 (7th Cir. 1991)

(“Preclusion in a civil case creates a ‘right not to be tried’

only in the sense that it creates a right to win; but many legal

doctrines do that without also creating a right to interlocutory

appellate review.”).

Here, in relying only on issue preclusion arguments, Thai

Airways is not arguing that the substantive purposes of the

FSIA would be served by granting it sovereign immunity.

Those admittedly weighty interests are not the interests at

stake in this appeal. Rather, Thai Airways is only arguing that

respect for another court’s judgment entitles it to dismissal.

The interests at stake in the claim being asserted are simply

those ordinarily protected by the doctrine of res judicata. Any

interest that Thai Airways may legitimately possess in avoid-

ing suit under the FSIA is not truly implicated in this appeal,

because Thai Airways is not arguing the merits of its claim to

FSIA immunity. Thus, in reaching the merits of this interlocu-

tory appeal, the majority frustrates “the substantial finality

interests § 1291 is meant to further, Will, 126 S. Ct. at 957,

and expands the intended “modest scope” of the collateral

order doctrine, id. at 958.

Had Thai Airways chosen to appeal the district court’s rul-

ing as to its entitlement to foreign sovereign immunity under

the FSIA, we might have exercised jurisdiction over that

appeal. However, nowhere in its opening or reply brief did

Thai Airways make this argument. In fact, Thai Airways affir-

GUPTA v. THAI AIRWAYS INTERNATIONAL 6473

matively declared that the merits of its FSIA defense are not

within the scope of its appeal, arguing in its reply brief that

“the applicability of the Warsaw Convention is not an issue

on this appeal.”7 By electing not to argue its entitlement to

FSIA immunity on the merits, Thai Airways has waived the

issue for purposes of this appeal. United States v. Kama, 394

F.3d 1236, 1238 (9th Cir. 2005). Thai Airways’ issue preclu-

sion defense is an insufficient ground upon which to base our

appellate jurisdiction over this interlocutory appeal.

Because I would dismiss this appeal for lack of jurisdiction,

I respectfully dissent.

7

In a supplemental filing, Thai Airways argues that if we find jurisdic-

tion lacking under the final judgment rule, we should construe this appeal

as a petition for mandamus. However, my conclusion that this appeal does

not fall within the Cohen collateral order doctrine is based on my view

that the rights at stake in an issue preclusion defense are adequately vindi-

cable on appeal from a final judgment. This conclusion implies that Thai

Airways has an “adequate means” to obtain relief, and will not be “dam-

aged or prejudiced in a way not correctable on appeal” if we do not pro-

vide mandamus relief. See Bauman v. U.S. Dist. Court, 557 F.2d 650, 654-

55 (9th Cir. 1977) (listing these criteria among the factors that should be

considered in determining whether to grant mandamus). As a result, I see

no reason to grant mandamus relief.