GSS Group Ltd. v. National Port Authority

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued March 2, 2012 Decided May 25, 2012

No. 11-7093

GSS GROUP LTD, ALSO KNOWN AS GLOBAL SECURITY SEALS

GROUP LTD,

APPELLANT

v.

NATIONAL PORT AUTHORITY,

APPELLEE

Appeal from the United States District Court

for the District of Columbia

(No. 1:09-cv-01322)

Stanley McDermott III, pro hac vice, argued the cause for

appellant. On the brief was Charles B. Wayne.

Jessica L. Ellsworth argued the cause for appellee. With

her on the brief was Lindsay D. Breedlove.

Before: GARLAND, Circuit Judge, and WILLIAMS and

RANDOLPH, Senior Circuit Judges.

Opinion for the Court filed by Senior Circuit Judge

RANDOLPH.

2

Concurring opinion filed by Senior Circuit Judge

WILLIAMS, with whom Senior Circuit Judge RANDOLPH joins.

RANDOLPH, Senior Circuit Judge: GSS Group, Ltd.,

brought this action to confirm a foreign arbitration award against

the National Port Authority of Liberia. The district court

dismissed the petition for lack of personal jurisdiction after

concluding that the Port Authority did not have sufficient

contacts with the United States. We affirm.

The Port Authority is a public corporation, organized under

the laws of Liberia, responsible for the management, operation,

and maintenance of Liberia’s port facilities. It is wholly owned

by the Liberian government, but, like many state-owned

enterprises, operates at some remove from the government itself.

The precise extent of this separation is a contested issue, taken

up in greater detail below.

On June 9, 2005, the Port Authority entered into an

agreement with GSS Group, a construction company

incorporated in the British Virgin Islands and headquartered in

Israel. The agreement called on GSS Group to build and operate

a container park at the port of Monrovia, Liberia’s capital.

Several later amendments resulted in a final contract dated

October 28, 2005. Although the parties intended the contract to

run for twelve and one-half years, it remained in effect for only

a few months.

The contract’s early demise resulted from a change in

Liberia’s government. The National Transitional Government

of Liberia – installed in 2003, during the aftermath of a four-

year civil war – handed over control to a new, democratically-

elected government in January 2006. Just a few weeks later, the

new government determined that the contract was “null and void

ab initio” because it had been awarded in violation of

3

competitive bidding requirements. Although GSS Group and

the Port Authority had secured a single-source exemption from

those requirements, the new government claimed that the waiver

was “based on misrepresentation[s]” by GSS Group and

“collusion” between GSS Group and Transitional Government

officials.

GSS Group denied the new government’s allegations and

protested the contract’s cancellation. After attempting to resolve

the dispute informally, GSS Group invoked the contract’s

arbitration clause on March 15, 2006. That clause required the

parties to submit disputes regarding the contract’s “formation,

validity, interpretation, performance, termination, enforcement

or breach” to “binding arbitration” in London, England. The

arbitration clause further stated that disputes would be decided

“in accordance with the laws of England and Wales.”

The Port Authority resisted GSS Group’s arbitration

demand. It maintained that parallel proceedings in the Liberian

court system1 prevented Lord Mustill – the London arbitrator

selected by GSS Group – from adjudicating the dispute. Lord

Mustill rejected this argument in a March 3, 2008, “Ruling on

Jurisdiction” and went on to reach the merits of GSS Group’s

claim, without further participation by the Port Authority.

Ultimately, he held that the Port Authority had breached the

contract and was liable to GSS Group for $44,347,260 in

1

The Liberian Public Procurement and Concessions

Commission instituted proceedings on August 28, 2006, after GSS

Group had invoked the arbitration clause. The Commission alleged

that GSS Group and the Port Authority had both acted improperly, and

that the contract was invalid under Liberian law. A Liberian court

agreed to hear the case over GSS Group’s objection. On February 8,

2008, the court held that the relevant portions of the contract were

unenforceable.

4

damages – a sum representing GSS Group’s project

expenditures and future lost profits.

On June 16, 2009, GSS Group filed a petition in the United

States District Court for the District of Columbia to confirm the

London arbitration award. The Port Authority moved to dismiss

the petition on several grounds, including lack of personal

jurisdiction. Its personal jurisdiction argument focused on two

main points. First, the Port Authority asserted that it was

“legally separate from the Liberian government.”2

Memorandum of Points and Authorities, GSS Grp. Ltd. v. Nat’l

Port Auth., No. 1:09-cv-01322-PLF, at 16 (D.D.C. Oct. 30,

2009) (“NPA Memorandum”). Separate legal status was

important since foreign sovereigns and their extensively-

controlled instrumentalities are not “persons” under the Fifth

Amendment’s Due Process Clause – and thus have no right to

assert a personal jurisdiction defense. See TMR Energy Ltd. v.

State Prop. Fund of Ukraine, 411 F.3d 296, 300-01 (D.C. Cir.

2005); Price v. Socialist People’s Libyan Arab Jamahiriya, 294

F.3d 82, 96-97 (D.C. Cir. 2002). In contrast to the Liberian

government and its agencies, the Port Authority portrayed itself

as an independent, albeit state-owned, corporation entitled to the

full panoply of due process protections. Second, the Port

Authority claimed that it could not be haled into the district

court because it did not have “minimum contacts” with the

United States. See Goodyear Dunlop Tires Operations, S.A. v.

Brown, 131 S. Ct. 2846, 2853 (2011). This contention relied on

the fact that the Port Authority had no offices or personnel in the

United States and “ha[d] never engaged in commercial activity

in the United States.” NPA Memorandum at 20.

2

This separation resulted from, among other things, the Port

Authority’s management of its own, unsubsidized finances; its ability

to sue and be sued in its own name; and its independent property

ownership.

5

GSS Group’s reply did not contest the Port Authority’s

claim of juridical separateness or assert that the Port Authority

had minimum contacts with the United States. Instead, it argued

that the Port Authority satisfied all of the jurisdictional

prerequisites set forth in the Foreign Sovereign Immunities Act.

See 28 U.S.C. §§ 1330(b), 1603(a) & (b). The minimum

contacts standard did not “trump” these requirements, GSS

Group maintained, because foreign, state-owned corporations

“do[] not have a constitutional status different from” their

sovereign shareholders, “whether the[y] [are] independently

managed or not.” Memorandum in Opposition, GSS Grp. Ltd.

v. Nat’l Port Auth., No. 1:09-cv-01322-PLF, at 15 (D.D.C. Dec.

22, 2009).

The district court granted the motion to dismiss. GSS Grp.

Ltd. v. Nat’l Port Auth., 774 F. Supp. 2d 134 (D.D.C. 2011). It

agreed that the Port Authority was subject to statutory personal

jurisdiction under the Foreign Sovereign Immunities Act. Id. at

137. This did not end the inquiry, however, because the

“question remain[ed] whether the Constitution permit[ted] the

exercise of personal jurisdiction over the [Port Authority].” Id.

(emphasis added). In answering this question, the court stressed

the Port Authority’s uncontested claim of juridical separateness.

Id. at 139-41. Because GSS Group had not argued that the Port

Authority was an agent of the Liberian government, the rule that

closely-controlled instrumentalities have no due process rights

did not apply. Id. at 139 (citing TMR Energy, 411 F.3d at 301);

see also id. at 141.

Considering the Port Authority an independent entity, the

district court concluded that it was a “person” covered by the

Fifth Amendment. Id. at 139-41. “[C]ountless judicial

opinions,” the court explained, had afforded minimum contacts

protections to foreign corporations. Id. at 138 (citing Asahi

Metal Indus. Co. v. Superior Court, 480 U.S. 102 (1987);

6

Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S.

408, 414-15 (1984)). Although none of these cases involved

state-owned corporations, the court found no basis for treating

them differently – at least in the absence of evidence that the

corporation acted as an agent of its sovereign owner. Id. at 139-

41 (distinguishing Price, 294 F.3d at 96-97). GSS Group had

not attempted to demonstrate such a relationship, and did not

identify any minimum contacts between the Port Authority and

the United States.3 Id. at 140-41. The court therefore held that

the Due Process Clause prevented it from exercising personal

jurisdiction over the Port Authority. Id.; see also FED. R. CIV.

P. 12(b)(2).

In passing, the district court noted a possible doctrinal

inconsistency between the Helicopteros line of civil procedure

cases and other decisions holding that aliens without property or

presence in the United States are not entitled to constitutional

protection. Id. at 139; see TMR Energy, 411 F.3d at 302 n.*

(citing United States v. Verdugo-Urquidez, 494 U.S. 259, 271

(1990); Jifry v. FAA, 370 F.3d 1174, 1182 (D.C. Cir. 2004)). It

was “not clear” to the district court “why foreign defendants,

other than foreign sovereigns, should be able to avoid the

jurisdiction of United States courts by invoking the Due Process

Clause when it is established in other contexts that nonresident

aliens without connections to the United States typically do not

have rights under the United States Constitution.” 774 F. Supp.

2d at 139. Nonetheless, the court concluded that it was “in no

3

In actions under the Foreign Sovereign Immunities Act, the

relevant frame of reference for the minimum contacts analysis is the

United States as a whole, rather than the specific jurisdiction in which

the suit is filed (here, the District of Columbia). See Theo. H. Davies

& Co. v. Republic of the Marshall Islands, 174 F.3d 969, 974 (9th Cir.

1998); accord Creighton Ltd. v. Gov’t of the State of Qatar, 181 F.3d

118, 127 & n.* (D.C. Cir. 1999).

7

position to reject” the personal jurisdiction rule “enshrined in”

Helicopteros and similar cases. Id.

GSS Group moved to alter or amend the judgment under

Federal Rule of Civil Procedure 59(e), based on three new

arguments. The district court held that GSS Group had waived

these arguments by failing to raise them in its opposition to the

motion to dismiss. Accordingly, it denied the motion.

This appeal concerns both of the district court’s orders. We

review the order of dismissal de novo, see Second Amendment

Found. v. U.S. Conference of Mayors, 274 F.3d 521, 523 (D.C.

Cir. 2001), and the Rule 59(e) decision for abuse of discretion,

Firestone v. Firestone, 76 F.3d 1205, 1208 (D.C. Cir. 1996) (per

curiam).

I

GSS Group’s petition arises under the Federal Arbitration

Act, 9 U.S.C. §§ 201 et seq., which codifies the Convention on

the Recognition and Enforcement of Foreign Arbitral Awards,

opened for signature June 10, 1958, 21 U.S.T. 2517, 330

U.N.T.S. 3 (“New York Convention”). The Convention

obligates each contracting state to “recognize [foreign] arbitral

awards as binding and enforce them in accordance with” local

procedural law. Id. art. III. When the United States acceded to

the Convention, it reserved the right to recognize and enforce

“only those awards made in the territory of another Contracting

State.” 21 U.S.T. at 2566; see New York Convention art. I(3)

(allowing such reservations). The United Kingdom of Great

Britain and Northern Ireland, the site of the arbitral award, is a

party to the Convention. Thus, while the dispute between GSS

Group and the Port Authority has no connection to the United

States, the arbitration award is eligible for enforcement here.

8

See 9 U.S.C. §§ 203, 207; Termorio S.A. E.S.P. v. Electranta

S.P., 487 F.3d 928, 933-34 (D.C. Cir. 2007).

The petition also relies on the Foreign Sovereign

Immunities Act’s jurisdictional provisions. Under the Act,

district courts have subject-matter jurisdiction over “any nonjury

civil action against a foreign state . . . as to any claim for relief

in personam with respect to which the foreign state is not

entitled to immunity.” 28 U.S.C. § 1330(a); see also id. §

1605(a)(6) (eliminating foreign states’ sovereign immunity with

respect to certain arbitration claims). The Act defines the term

“foreign state” expansively. It includes not only foreign

sovereigns, but also any “political subdivision of a foreign state

or an agency or instrumentality of a foreign state.” Id. §

1603(a). And the term “agency or instrumentality of a foreign

state” in turn covers any foreign corporation “a majority of

whose shares . . . [are] owned by a foreign state.” Id. § 1603(b).

Because the Port Authority is wholly owned by the Liberian

government, it qualifies as an “agency or instrumentality,” and

thus a “foreign state” for subject-matter jurisdiction purposes.

The Port Authority’s “foreign state” status has personal

jurisdiction ramifications as well. The Foreign Sovereign

Immunities Act specifies that “[p]ersonal jurisdiction over a

foreign state shall exist as to every claim for relief over which

the district courts have [subject-matter] jurisdiction under” §

1603(a) “where service has been made under” § 1608. 28

U.S.C. § 1330(b). In other words, “under the FSIA, ‘subject

matter jurisdiction plus service of process equals personal

jurisdiction.’” Price, 294 F.3d at 95 (quoting Practical

Concepts, Inc. v. Republic of Bolivia, 811 F.2d 1543, 1548 n.11

(D.C. Cir. 1987)). The Port Authority does not contest the

manner in which it was served, and concedes that “[t]he FSIA

supplies a statutory basis for [exercising] personal jurisdiction

over” it. Appellee’s Br. 22.

9

This brings us to the question presented: does the

Constitution impose additional, non-statutory personal

jurisdiction requirements, and if so, have those requirements

been met here?

II

GSS Group’s briefs dedicate significant attention to three

arguments raised for the first time in its Rule 59(e) motion. The

first of these arguments asserts that the Constitution is irrelevant

because the Port Authority acted as the Liberian government’s

agent, and thereby lost all due process protection. See TMR

Energy, 411 F.3d at 301-02. The second is that the district court

should have permitted jurisdictional discovery before ruling on

the motion to dismiss. The third is that if the Port Authority

does have due process rights, the Federal Arbitration Act and the

Foreign Sovereign Immunities Act provide it with all the

process it is due. Cf. Shaffer v. Heitner, 433 U.S. 186, 210 n.36

(1977).

These contentions misapprehend the role of Rule 59(e).4

“Rule 59(e) motions are aimed at reconsideration, not initial

consideration.” District of Columbia v. Doe, 611 F.3d 888, 896

(D.C. Cir. 2010) (quoting Nat’l Ecological Found. v. Alexander,

496 F.3d 466, 477 (6th Cir. 2007)). Accordingly, a “Rule 59(e)

motion may not be used to . . . raise arguments or present

evidence that could have been raised prior to the entry of

judgment.” 11 CHARLES ALAN WRIGHT ET AL., FEDERAL

PRACTICE AND PROCEDURE § 2810.1, at 127-28 (2d ed. 1995).

GSS Group could have made all three of the arguments

identified above in its opposition to the Port Authority’s motion

4

The Rule states: “Motion to Alter or Amend a Judgment. A

motion to alter or amend a judgment must be filed no later than 28

days after the entry of the judgment.” FED. R. CIV. P. 59(e).

10

to dismiss, but elected not to do so. See 774 F. Supp. 2d at 139,

141. The arguments therefore are waived. Doe, 611 F.3d at

896.

GSS Group insists that its Rule 59(e) arguments are not

waived because they were implicit in its original argument

against the motion to dismiss. For support, GSS Group points

to this footnote in its opposition memorandum:

In the event, however, that this Court considers it

material whether and to what extent the Government of

Liberia controls the NPA’s decision-making, then GSS

reserves the right to conduct appropriate discovery to

that end. The manner in which the NPA’s new

management cancelled the Contract strongly suggests

that the Government does in fact control the NPA to a

significant degree.

The district court did not abuse its discretion in rejecting this

argument. Firestone, 76 F.3d at 1208. The footnote’s

“reservation” had no effect; “[t]o get discovery” GSS Group had

to “ask for it.” Second Amendment Found., 274 F.3d at 525. As

for the bare, unsubstantiated suggestion that the Liberian

government controlled the Port Authority’s actions, the court

had no obligation to consider it. See Hutchins v. District of

Columbia, 188 F.3d 531, 539 n.3 (D.C. Cir. 1999) (en banc)

(courts “need not consider cursory arguments made only in a

footnote”).

These shortcomings do not matter, GSS Group says,

because the district court committed “legal error” in its

jurisdictional analysis. We do not agree. The district court

faithfully applied the same minimum contacts standard used in

prior cases involving foreign corporations. See 774 F. Supp. 2d

at 141 (citing Asahi, 480 U.S. at 102; World-Wide Volkswagen

11

Corp. v. Woodson, 444 U.S. 286, 297 (1980)). GSS Group

could have urged the court to apply a different standard, but it

failed to do so in a timely fashion. It cannot avoid the

consequences of that omission by labeling the district court’s

lack of telepathic powers as “legal error.” United States v.

Hewlett, 395 F.3d 458, 460 (D.C. Cir. 2005).

GSS Group also claims that “[a]ny question of waiver is .

. . moot” because the district court “passed upon” its additional

claims when it ruled on the Rule 59(e) motion. Appellant’s Br.

22; see Blackmon-Malloy v. U.S. Capitol Police Bd., 575 F.3d

699, 707-08 (D.C. Cir. 2009). Although the court described one

of GSS Group’s new arguments as “profoundly unpersuasive,”

it did so only after explaining that the argument had been

waived. A district court does not open the door to further

consideration of a forfeited claim by giving an alternative,

merits-based reason for rejecting it. Cf. New Castle Cnty. v.

Halliburton NUS Corp., 111 F.3d 1116, 1125 n.10 (3d Cir.

1997).

III

The sole argument GSS Group has preserved for our

consideration is its claim that foreign, state-owned corporations

have no due process rights. Distilled to its essence, GSS

Group’s point is that state-owned firms should be treated no

differently than their sovereign shareholders.

In Price, we held that “foreign states are not ‘persons’

protected by the Fifth Amendment.” 294 F.3d at 96. Several

factors influenced this conclusion, including the Supreme

Court’s ruling that the States of the Union are not “persons” for

Fifth Amendment purposes. See id. (citing South Carolina v.

Katzenbach, 383 U.S. 301, 323-24 (1966)). We explained that

“it would be highly incongruous to afford greater Fifth

12

Amendment rights to foreign nations, who are entirely alien to

our constitutional system, than are afforded to the states, who

help make up the very fabric of that system.” Id. We also

emphasized that foreign governments interact with the United

States “as juridical equals on the level of international law and

diplomacy outside the constitutional system.” Id. at 97

(emphasis added) (quoting Lori Fisler Damrosch, Foreign States

and the Constitution, 73 VA. L. REV. 483, 521 (1987)). These

considerations put foreign sovereigns in a separate constitutional

category from “private entities” – one in which “[t]he

constitutional limits that have been placed on the exercise of

personal jurisdiction” do not apply. Id. at 98-99.

GSS Group contends that the same logic applies to foreign,

state-owned corporations. These entities, GSS Group claims,

are just as “alien to our constitutional system” as the sovereigns

that own them. Appellant’s Br. 24-25. Thus, “[i]f a [foreign]

sovereign does not have a ‘due process trump,’ neither does an

alien state-owned agency or instrumentality.” Id. at 26. Under

this rule, the Port Authority would be unable to oppose

enforcement of the arbitration award on jurisdictional grounds,

because it would not have a constitutional status different from

the Liberian government.

Binding precedent forecloses GSS Group’s argument. Both

the Supreme Court and this court have repeatedly held that

foreign corporations may invoke due process protections to

challenge the exercise of personal jurisdiction over them. See,

e.g., Goodyear, 131 S. Ct. at 2850-51, 2853; J. McIntyre Mach.,

Ltd. v. Nicastro, 131 S. Ct. 2780, 2785, 2789-90 (2011); Asahi,

480 U.S. at 113-16; Helicopteros, 466 U.S. at 413-14; FC Inv.

Grp. LC v. IFX Mkts., Ltd., 529 F.3d 1087, 1091-92 (D.C. Cir.

2008); Koteen v. Bermuda Cablevision, Ltd., 913 F.2d 973, 974-

13

75 (D.C. Cir. 1990).5 In each of those instances, the foreign

defendant was just as “alien to our constitutional system” as the

Libyan government was in Price. 294 F.3d at 96. Yet the court

did not hesitate to afford the defendant the full measure of due

process protection.

It is true that these cases do not speak to the due process

rights of state-owned corporations. We addressed that issue in

TMR Energy, a case involving facts quite similar to those

presented here. TMR Energy, a Cyprian development

corporation, sought to enforce a foreign arbitration award

against the State Property Fund of Ukraine, an agency

responsible for Ukraine’s privatization program.6 TMR Energy,

411 F.3d at 298-99, 302. The State Property Fund conceded that

it was an “agency or instrumentality” subject to statutory

personal jurisdiction under the Foreign Sovereign Immunities

Act. Id. at 299. It nevertheless moved to dismiss because it

lacked minimum contacts with the United States, as required by

the Fifth Amendment’s Due Process Clause. Id. at 299-300

(citing Int’l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945)).

The State Property Fund was able to make this argument

because Price’s limit on due process protections “applie[d] only

to ‘an actual foreign government.’” Id. at 300 (quoting Price,

294 F.3d at 99). Left open was the question “whether other

entities that fall within the FSIA’s definition of ‘foreign state[,]’

including corporations in which a foreign state owns a majority

interest, could yet be considered persons under the Due Process

Clause.” Price, 294 F.3d at 99-100 (internal citation omitted).

5

But see infra pp. 15-18.

6

As in this case, the underlying dispute between the parties

had no connection to the United States whatsoever. See TMR Energy,

411 F.3d at 298-99.

14

TMR Energy claimed that Transaero, Inc. v. La Fuerza Aerea

Boliviana, 30 F.3d 148 (D.C. Cir. 1994), a case interpreting the

Foreign Sovereign Immunities Act’s service of process

provisions, 28 U.S.C. § 1608 (a) & (b), provided the answer.

See TMR Energy, 411 F.3d at 300. Because the State Property

Fund allegedly qualified as a “foreign state” under Transaero,

TMR Energy concluded that it had to be classified as a foreign

state under the Due Process Clause as well. Id.

We rejected the argument, explaining that “a different

analysis is indicated where the issue is not service of process

under the FSIA but whether an agency or instrumentality of a

foreign state is entitled to the protection of the [D]ue [P]rocess

[C]lause.” Id. at 301. To answer that question, we relied instead

on the Supreme Court’s decision in First National City Bank v.

Banco Para el Comercio Exterior de Cuba, 462 U.S. 611 (1983)

(“Bancec”). Id. Bancec addressed the liability of a foreign,

state-owned firm for the acts of its sovereign parent. See 462

U.S. at 613-14, 620-30. The Supreme Court held that “[d]ue

respect for the actions taken by foreign sovereigns and for

principles of comity between nations” required a baseline rule

“that government instrumentalities established as juridical

entities distinct and independent from their sovereign should

normally be treated as such.” Id. at 626-27. In other words,

state-owned firms generally are not liable for their government’s

actions. This presumption of separateness gives way only if a

foreign “corporate entity is so extensively controlled by its

owner that a relationship of principal and agent is created,” id.

at 629, or when “broader equitable principle[s]” dictate that

separate treatment “would work fraud or injustice,” id. (quoting

Taylor v. Standard Gas & Electric Co., 306 U.S. 307, 322

(1939)).

TMR Energy extended the Bancec analysis to the

constitutional realm, holding that Bancec “must govern” the

15

question whether a foreign instrumentality has due process

rights under the Fifth Amendment. 411 F.3d at 301 (citing

Foremost-McKesson, Inc. v. Islamic Republic of Iran, 905 F.2d

438, 446-47 (D.C. Cir. 1990)). The upshot of that rule is

relatively straightforward. Whenever a foreign sovereign

controls an instrumentality to such a degree that a principal-

agent relationship arises between them, the instrumentality

receives the same due process protection as the sovereign: none.

That was the result in TMR Energy, based on Ukraine’s

extensive legal, managerial, and financial control of the State

Property Fund. See 411 F.3d at 302. On the other hand, if an

instrumentality does not act as an agent of the state, and separate

treatment would not result in manifest injustice, see Bancec, 462

U.S. at 629, the instrumentality will enjoy all the due process

protections available to private corporations. Far from being

“irrelevant,” as GSS Group claims, the extent of a state-owned

corporation’s juridical independence plays a dispositive role in

the constitutional analysis. See TMR Energy, 411 F.3d at 301;

see also Frontera Res. Azerbaijan Corp. v. State Oil Co. of the

Azerbaijan Republic, 582 F.3d 393, 400-01 (2d Cir. 2009)

(adopting the TMR Energy rule).

GSS Group responds that “this Court has not hitherto

suggested much less held that an agency or instrumentality loses

due process protection only if, as in TMR Energy, it is controlled

by its foreign-state parent.” Appellant’s Reply Br. 8. The

implication is that there are other reasons why a foreign

instrumentality might not fall within the Fifth Amendment’s

protective sweep. For instance, a footnote in TMR Energy

suggested, while “express[ing] no view upon the question,” that

“[i]t is far from obvious that even an independent [foreign

instrumentality] would be entitled to the protection of the [F]ifth

[A]mendment.” 411 F.3d at 302 n.*.

16

The footnote cites two cases, each of which held that aliens

without property or presence in the sovereign territory of the

United States have no constitutional rights. Id. (citing Verdugo-

Urquidez, 494 U.S. at 271; Jifry, 370 F.3d at 1182). Similar

cases abound. See, e.g., Zadvydas v. Davis, 533 U.S. 678, 693

(2001); Johnson v. Eisentrager, 339 U.S. 763, 783-84 (1950);

Kiyemba v. Obama, 555 F.3d 1022, 1026 (D.C. Cir. 2009),

vacated and remanded, 130 S. Ct. 1235 (2010) (per curiam),

reinstated, 605 F.3d 1046 (D.C. Cir. 2010); 32 Cnty. Sovereignty

Comm. v. Dep’t of State, 292 F.3d 797, 799 (D.C. Cir. 2002);

Harbury v. Deutch, 233 F.3d 596, 603-04 (D.C. Cir. 2000),

rev’d on other grounds sub nom. Christopher v. Harbury, 536

U.S. 403 (2002); People’s Mojahedin Org. of Iran v. U.S. Dep’t

of State, 182 F.3d 17, 22 (D.C. Cir. 1999); Pauling v. McElroy,

278 F.2d 252, 254 n.3 (D.C. Cir. 1960) (per curiam). The

district court in this case observed that these decisions, if taken

to their logical conclusion, might mean that no foreign entity

could assert a due process–personal jurisdiction defense, at least

so long as it lacked property or presence within the United

States. See 774 F. Supp. 2d at 139. Others have also suggested

that the decisions just cited could be seen as in conflict with the

rule expressed in the Helicopteros line of civil procedure cases;

if a foreign entity has no constitutional rights, its lack of

minimum contacts is immaterial. See Austen L. Parrish,

Sovereignty, Not Due Process: Personal Jurisdiction Over

Nonresident Alien Defendants, 41 WAKE FOREST L. REV. 1, 28-

33 (2006); Gary A. Haugen, Personal Jurisdiction and Due

Process Rights for Alien Defendants, 11 B.U. INT’L L.J. 109,

115-17 (1993); see also TMR Energy, 411 F.3d at 301-02 & n.*.

After all, the “personal jurisdiction requirement is not a

structural limitation on the power of courts,” Price, 294 F.3d at

98, but “a function of the individual liberty interest preserved by

the Due Process Clause,” Nicastro, 131 S. Ct. at 2798 (quoting

Ins. Corp. of Ireland, Ltd. v. Compagnie des Bauxites de Guinee,

456 U.S. 694, 703 n.10 (1982)).

17

Yet it may be that the cases can be reconciled. When a

foreign corporation is summoned into court, it is being forced to

defend itself. To do so, the corporation must appoint a

representative to act for it – that is, an attorney. See Bristol

Petroleum Corp. v. Harris, 901 F.2d 165, 166 n.1 (D.C. Cir.

1990). In opposing personal jurisdiction on due process grounds

the corporation, through its attorney, makes itself present. See

Int’l Shoe, 326 U.S. at 316. And since it has been forced to

appear in the United States, at least for that limited purpose,7 it

7

At common law, the exercise of personal jurisdiction was

tied to physical presence. See Burnham v. Superior Court, 495 U.S.

604, 610-14 (1990) (plurality opinion). A “general appearance” of

any kind, such as a motion to dismiss for failure to state a claim, made

a nonresident defendant present and thus subject to the court’s

authority. See Pollard v. Dwight, 8 U.S. (4 Cranch) 421, 428-29

(1808); Gerber v. Riordan, 649 F.3d 514, 521 (6th Cir. 2011) (Moore,

J., concurring). And in the case of a corporate defendant, the

corporation made itself present through the appearance of its attorney.

See St. Louis & S.F. Ry. Co. v. McBride, 141 U.S. 127, 128, 130

(1891). The special appearance doctrine evolved as an exception to

the general appearance rule. It enabled a nonresident defendant to

contest the court’s jurisdiction “without thereby subjecting [it]self to

the power of the court generally.” Orange Theatre Corp. v. Rayherstz

Amusement Corp., 139 F.2d 871, 874 (3d Cir. 1944) (en banc); see

also Harkness v. Hyde, 98 U.S. 476, 479 (1878). The doctrine relied

on a legal fiction; although counsel appeared on the defendant’s

behalf, courts allowed defendants to escape the consequences of the

appearance “as a matter of grace” and “sound public policy.” Orange

Theatre, 139 F.3d at 874.

Rule 12 of the Federal Rules of Civil Procedure abolished the

distinction between special appearances and general appearances. 5B

CHARLES ALAN WRIGHT & ARTHUR R. MILLER, FEDERAL PRACTICE

AND PROCEDURE § 1344 (3d ed. 2004). This relieved nonresident

defendants of the need “to appear specially or employ any particular

set of words to challenge a federal court’s personal jurisdiction.” Id.

18

is entitled to the protection of the due process clause as

interpreted in International Shoe and later decisions involving

foreign corporate defendants. Cf. Zadvydas, 533 U.S. at 693.

An alternative reconciliation might lie in the idea that when a

United States court exercises jurisdiction over a foreign

corporate defendant it inflicts damage on that defendant (at a

minimum in the form of legal costs, but possibly in the form of

a judgment) in the United States.

We need not embrace this line of reasoning or resolve the

possible conflict described above, for three reasons. First, GSS

Group waived any reliance on Verdugo-Urquidez and its

progeny at oral argument. See Oral Arg. Recording at 11:50-

12:55, 22:25-22:46. Second, Bancec is the exclusive means for

determining whether a foreign, state-owned corporation is a

“person” for Fifth Amendment purposes. TMR Energy’s

holding that Bancec “must govern” is a precedent binding on us.

411 F.3d at 301. Third, the Supreme Court has reaffirmed as

recently as last year that foreign corporations are entitled to due

process protection, despite the fact they have no meaningful

connection to the United States. See, e.g., Goodyear, 131 S. Ct.

at 2853; Nicastro, 131 S. Ct. at 2787. In fact, the entirely

foreign nature of the defendants in Goodyear, Nicastro, Asahi,

and Helicopteros is what enabled them to prevail. See, e.g.,

Goodyear, 131 S. Ct. at 2854. These decisions leave the

unmistakable impression that United States courts may not

exercise personal jurisdiction over a foreign corporation unless

But it did not eliminate the logical consequence of a defensive court

appearance: presence within the forum. A defendant is just as

“present” when it files a Rule 12 motion as it is when it makes a

special appearance. While this does not affect the question of personal

jurisdiction, it seems to bear on the separate and antecedent question

whether a party has due process rights.

19

the corporation has “minimum contacts” with the relevant

forum. See id. at 2853.

The bottom line is this: the Port Authority claimed to be an

independent juridical entity in its motion to dismiss, and GSS

Group failed to contest that characterization. GSS Group’s

omission left intact the Bancec presumption, which, under TMR

Energy, guarantees the Port Authority treatment as a separate

“person” entitled to due process protection. That protection

includes the right to assert a minimum contacts defense. GSS

Group has not identified any connection between the Port

Authority and the United States; indeed, its brief concedes that

none exists. The district court therefore correctly dismissed the

petition for lack of personal jurisdiction.

Affirmed.

WILLIAMS, Senior Circuit Judge, with whom Senior

Circuit Judge RANDOLPH joins, concurring: I concur in the

court’s opinion and judgment but write separately to express

concern about our decision in TMR Energy v. State Property

Fund of Ukraine, 411 F.3d 296 (D.C. Cir. 2005), which

extended First National City Bank v. Banco Para el Comercio

Exterior de Cuba (“Bancec”), 462 U.S. 611 (1983), to a

wholly new domain. The result was to constitutionalize an

issue quite unnecessarily.

In Bancec the Court considered whether a U.S. firm, sued

in New York by a bank wholly owned by the Cuban

government, could claim as a “set off” the losses inflicted on

it by the Cuban government’s seizure of its Cuban assets. The

Court held that it could do so, invoking a set of corporate veil-

piercing principles. While “government instrumentalities

established as juridical entities distinct and independent from

their sovereign should normally be treated as such,” 462 U.S.

at 626-27, that norm could be overcome under a variety of

circumstances—namely, where the “corporate entity is so

extensively controlled by its owner that a relationship of

principal and agent is created,” id. at 629, and where honoring

the distinction “would work fraud or injustice” or “defeat

legislative policies,” id. at 629-30.

At the time we decided TMR, three arguably relevant

lines of authority were outstanding. First was Bancec’s veil-

piercing decision in the context of U.S. firms’ efforts to set off

foreign states’ obligations against claims by a state-owned

entity. Second was our own decision in Price v. Socialist

People’s Libyan Arab Jamahiriya, 294 F.3d 82 (D.C. Cir.

2002), holding that a foreign state was not a “person” for

purposes of the due process clause and its requirement of

“minimum contacts” for personal jurisdiction. In doing so we

pointed out that foreign states were the juridical equals of the

United States, and that if a state perceived that it had been

2

improperly dragged into a U.S. court, it would have available

to it “a panoply of mechanisms in the international arena

through which to seek vindication or redress.” Id. at 98.

Given that the federal courts themselves had “relied on

principles of comity and international law to protect foreign

governments in the American legal system,” id. at 97, we held

that “[t]hese mechanisms [the ones available to foreign states

in the international arena], not the Constitution, set the terms

by which sovereigns relate to one another,” id. at 98

(emphasis added).

Third were Supreme Court applications of the due

process clauses’ “minimum contacts” analysis to private

foreign corporations in determining whether they could be

subject to U.S. courts’ jurisdiction. See, e.g., Asahi Metal

Indus. Co. v. Superior Court, 480 U.S. 102 (1987).

In TMR Energy we noted both (1) that the cases applying

minimum contacts analysis to foreign corporations appeared

to rest on a hitherto unchallenged assumption of the due

process clauses’ applicability, and (2) that in light of decisions

by this court and the Supreme Court that aliens without

property or presence in the United States do not receive

constitutional protections, see, e.g., United States v. Verdugo-

Urquidez, 494 U.S. 259, 271 (1990), it was “far from obvious

that [a wholly independent foreign state-owned corporation]

would be entitled to the protection of the fifth amendment.”

411 F.3d at 302 n.*. But, partly because of TMR’s failure to

argue the point and partly because of the approach we took

(finding against the foreign entity on other grounds, described

below), we had no need to resolve either point.

Instead, we looked at the foreign entity in question

through the lens of Bancec. We posed the question “whether

the SPF [the State Property Fund of Ukraine] has a

constitutional status different from that of the State of

3

Ukraine.” Id. at 301. Finding that “the State of Ukraine had

plenary control over the SPF,” we ruled that the SPF, “like its

principal . . . is not a ‘person’ for purposes of the due process

clause and cannot invoke the minimum contacts test to avoid

the personal juridiction of the district court.” Id. at 301-02.

But we never really explained the metamorphosis of

Bancec, which arose as the solution to a set-off issue, into a

constitutional doctrine for foreign state-owned entities. That

extension yields several anomalies. While Bancec explicitly

took note of “legislative policies,” 462 U.S. at 630,

constitutionalization of the issue of suing foreign state-owned

corporations stands as a potential obstacle to solutions that

Congress might find sensible. Our own decision in Price,

noting the availability of diplomatic measures, invites us as a

country (courts as well as the political branches) to take note

of the behavior of foreign states and the structure of

international relations. Some countries have adopted “statutes

that authorize their courts to exercise jurisdiction over a

foreign defendant whenever the defendant’s nation would do

the same in analogous situations.” Austen L. Parrish,

Sovereignty, Not Due Process: Personal Jurisdiction over

Nonresident Alien Defendants, 41 WAKE FOREST L. REV. 1,

49 (2006). A U.S. statute mimicking such foreign solutions,

however sensible as a negotiating strategy, would run afoul of

TMR’s constitutionalization of the issue—as applied, for

instance, to corporations of a state that allowed suits against

our corporations regardless of minimum contacts. State-

owned corporations, of course, will often have access to the

diplomatic mechanisms alluded to in Price, and their use of

that access might well precipitate the sort of negotiated

solutions contemplated there.

More generally, we reasoned in Price that extending due

process protections to foreign states would “frustrate the

United States government’s clear statutory command” to

4

subject foreign states to the jurisdiction of the federal courts

under some circumstances. 294 F.3d at 98-99. In the Foreign

Sovereign Immunities Act Congress defined circumstances

when foreign states and their instrumentalities may be subject

to the jurisdiction of United States courts, see 28 U.S.C. §§

1602, 1605, and it is not at all clear why that determination

should not be given full effect.

These concerns suggest that in a suitable case it may be

valuable for courts to reconsider both the merits of the

assumption in Asahi Metal and kindred cases that private

foreign corporations deserve due process protections, and

(perhaps more significantly) the application of that

assumption to entities owned by a foreign state but not subject

to the state’s plenary control or otherwise treated as a state.

This said, if the Supreme Court were to find the due

process clauses inapplicable to the question of jurisdiction

over private foreign corporations, or if we were to do the same

for state-owned but not state-equivalent entities, it would not

follow ineluctably that they could henceforth be exposed to

the United States courts’ jurisdiction regardless of minimum

contacts. Quite apart from the instances where the FSIA itself

imposes requirements substantially equivalent to minimum

contacts, see 28 U.S.C. § 1605(a)(2); see also S & Davis

Intern., Inc. v. Republic of Yemen, 218 F.3d 1292, 1304 (11th

Cir. 2000) (noting similarity of the standards), courts might

well extend the current practice on the ground of its

substantial duration (most clearly in the case of private

corporations), but subject to any congressional provisions to

the contrary. Such an approach would be quite different from

the constitutional straightjacket that appears to prevail

currently.