The opinion
United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued October 17, 2023 Decided June 11, 2024
No. 22-7118
EIG ENERGY FUND XIV, L.P., ET AL.,
APPELLEES
v.
PETROLEO BRASILEIRO, S.A.,
APPELLANT
ODEBRECHT, S.A., ET AL.,
APPELLEES
Appeal from the United States District Court
for the District of Columbia
(No. 1:16-cv-00333)
Sean Marotta argued the cause for appellant. With him on
the briefs were N. Thomas Connally, Christopher T. Pickens,
and Patrick C. Valencia.
Daniel B. Goldman argued the cause for appellees. With
him on the brief were Kerri Ann Law, Claudia Pak, and
Matthew M. Madden.
Before: HENDERSON, WILKINS and KATSAS, Circuit
Judges.
2
Opinion for the Court filed by Circuit Judge HENDERSON.
KAREN LECRAFT HENDERSON, Circuit Judge: EIG, an
American investment fund, lost $221 million after it invested
in a project to exploit newly discovered oil reserves off the
coast of Brazil. The company behind the project was Petróleo
Brasileiro, S.A. (Petrobras), Brazil’s state-owned oil company.
A criminal investigation eventually discovered that Petrobras
executives were taking bribes from contractors and splitting the
proceeds amongst themselves and Brazilian politicians. When
the corruption came to light, the project’s lenders pulled out.
The project collapsed and EIG’s investment became worthless.
The issue before us is whether EIG can continue its lawsuit
against Petrobras or whether Petrobras is immune from liability
under the Foreign Sovereign Immunities Act (FSIA), 28 U.S.C.
§§ 1330, 1602-1611. We held earlier that EIG had sufficiently
alleged that Petrobras’ fraud “cause[d] a direct effect in the
United States” and therefore fell within the direct-effect
exception to the FSIA. Accordingly, we affirmed the denial of
Petrobras’ motion to dismiss. See EIG Energy Fund XIV, L.P.
v. Petróleo Brasileiro, S.A. (EIG II), 894 F.3d 339 (D.C. Cir.
2018). Now, after discovery, we reach the same conclusion on
the summary judgment record. We therefore affirm the district
court’s denial of Petrobras’ assertion of foreign sovereign
immunity at this stage and remand for further proceedings.
I. Background
Both parties accept the district court’s findings of
undisputed facts for this interlocutory appeal. We draw the
following description from the district court order, repeating
only the essentials of its thorough account.
In 2007, Petrobras, an oil and gas company owned by the
Brazilian government, discovered vast oil reserves in the Pre-
3
Salt Reserves off the Brazilian coast. EIG Energy Fund XIV,
L.P. v. Petróleo Brasileiro S.A. (EIG III), 621 F. Supp. 3d 30,
39–41 (D.D.C. 2022). It planned to exploit the reserves by
building twenty-eight drilling rigs at a total cost of roughly $22
billion. Id. at 41–42. To do so, Petrobras contracted with
Brazilian shipyards to build the rigs “through a financial
structure sponsored by Petrobras” and open to outside
investors. Id. at 42. It hired Banco Santander Brasil S.A.
(Santander) as its financial advisor to secure financing. Id.
That “financial structure” took the form of Sete Brasil
Participações (Sete), an entity Petrobras formed in December
2010 to raise money and contract with shipyards for the
necessary construction. Id. Petrobras held 10 per cent of Sete’s
shares and equity investors held the remaining 90 per cent. Id.
Notably, Petrobras filled Sete with its own executives. Sete’s
new CEO, João Carlos de Medeiros Ferraz (Ferraz), was a
Petrobras veteran who had served since 2008 as Petrobras’
General Manager of Special Projects Financing, in which
capacity he was responsible to develop the plan to exploit the
Pre-Salt Reserves and “negotiat[e] with all potential capital
investors in Sete Brasil.” Id. at 40. As Sete’s COO, Petrobras
appointed Pedro José Barusco Filho (Barusco), Petrobras’
long-time Executive Manager of Engineering. Id. at 40, 42.
Both Ferraz and Barusco worked for Petrobras and Sete
simultaneously for several months until Sete’s shareholders
officially approved their positions. Id. at 42, 51.
“[F]rom Sete’s formative stages,” Petrobras and Sete
sought international investors for Sete, including investors
based in the United States. Id. at 47. In 2010, for example,
Santander drew up a list of potential investors which named
certain U.S. companies and Petrobras kept a map of the United
States “showing the locations of fifteen potential U.S.
investors.” Id. at 48. Petrobras also participated in two
4
conferences held in Brazil in 2010 and 2011, at which it pitched
the opportunity to invest in Sete. Both conferences were hosted
by a U.S. company and potential U.S. investors attended. Id. at
48–49.
EIG learned about Sete on its own, however, when Kevin
Corrigan (Corrigan), an EIG senior investment professional,
received an email in 2010 about Sete from a professional
colleague who was unaffiliated with Petrobras. Id. at 43. At the
time, EIG was “seeking opportunities to invest in Brazil.” Id.
By October 2010, EIG was in contact with Santander, which
sent Corrigan a Petrobras presentation about the Pre-Salt
Reserves that touted the opportunity to “partner[] with
Petrobras.” Id. at 50–51. That December, Santander gave EIG
access to a virtual data room “that contained detailed
information about the Sete investment opportunity.” Id. at 51.
EIG used the data room to conduct a “months-long diligence
process” regarding investing in Sete, which process involved
analyzing thousands of pages of documents. Id. at 71.
EIG also met with Petrobras and Sete executives several
times. Ferraz hosted Corrigan in Brazil in March 2011 to
discuss investing in Sete. Id. at 51. A few months later, EIG
executives returned to Brazil to meet with Ferraz (now the
confirmed CEO of Sete) and Almir Barbassa, Petrobras’ CFO
and Chief Investor Relations Officer. Id. EIG representatives
met with Barbassa in Brazil again in March 2012 and toured
one of the shipyards slated to build the drilling rigs. Id.
EIG ultimately chose to invest in Sete. It entered into a
series of investment agreements, including in June 2011 and
July 2012, and made its first payment on August 3, 2012. Id. at
43. Its investments, which continued until January 2015,
totaled roughly $221 million. Id. at 44. EIG’s investment did
not prove fruitful. Unbeknownst to it, Petrobras and Sete
5
executives were engaged in rampant corruption that ultimately
led to Sete’s collapse. These executives, including Ferraz and
Barusco, solicited bribes from shipyards in return for drilling
rig construction contracts and then split part of the graft
amongst themselves while passing the rest on to members of
the Workers’ Party, Brazil’s governing political party. Id. at 38.
A Brazilian criminal investigation called Operation Lava Jato
(Operation Car Wash) uncovered the corruption in 2014 as Sete
was attempting to secure long-term financing deals so that it
could meet its obligations to the shipyards. Id. at 38, 44–45.
The February 2015 public disclosure of Sete’s involvement in
the scheme caused the lenders to pull out. Unable to meet its
obligations or to obtain credit, Sete became bankrupt. Id. at 38,
45. “EIG’s entire investment in Sete was lost.” Id. at 45.
In 2016, EIG sued Petrobras for fraud, among other
delicts. Petrobras moved to dismiss, arguing it was entitled to
foreign sovereign immunity as an instrumentality of the state
of Brazil. The district court denied the motion. See EIG Energy
Fund XIV, L.P. v. Petróleo Brasileiro S.A., 246 F. Supp. 3d 52,
73 (D.D.C. 2017). In EIG II, we affirmed the district court’s
denial on interlocutory appeal, holding that EIG’s allegations
brought the case within the FSIA’s exception to sovereign
immunity for defendants whose commercial activity “causes a
direct effect in the United States.” 28 U.S.C. § 1605(a)(2); see
EIG II, 894 F.3d at 345. Specifically, we reasoned that EIG had
“made out a prima facie case for jurisdiction by alleging that
Petrobras specifically targeted U.S. investors for Sete; that
Petrobras intentionally concealed the ongoing fraud at
Petrobras and at Sete; and that money invested in Sete was used
to pay bribes and kickbacks.” Id. (internal citations omitted).
On remand from EIG II, the parties conducted discovery
and cross-moved for summary judgment on liability; Petrobras
also moved for summary judgment on immunity grounds. The
6
district court again rejected Petrobras’ assertion of sovereign
immunity, reasoning that EIG had met its burden of production
“by adducing facts, supported by proof, satisfying the three
elements of the prima facie case set forth in EIG II.” EIG III,
621 F. Supp. 3d at 47. As relevant here, the court found that
there was “ample evidence showing that Petrobras ‘specifically
targeted U.S. investors for Sete.’” Id. (quoting EIG II, 894 F.3d
at 342). After reviewing the evidence, it concluded that
Petrobras had “targeted” EIG because “Petrobras engaged with
EIG in a sustained course of dealing over many months that
conveyed its desire to obtain an investment from EIG.” Id. at
51. The court then granted summary judgment to EIG on
liability but reserved the damages issue for trial. Thus, the court
denied Petrobras’ summary judgment motion and granted EIG
partial summary judgment.
Petrobras appealed the denial of its sovereign immunity
assertion. EIG moved to dismiss the appeal, which a motions
panel referred to us. Order, EIG Energy Fund XIV, L.P. v.
Petróleo Brasileiro, S.A., No. 22-7118 (December 27, 2022).
II. Analysis
A. Jurisdiction
We first address EIG’s threshold challenge to our appellate
jurisdiction. In re Brewer, 863 F.3d 861, 868 (D.C. Cir. 2017).
Our appellate jurisdiction extends only to the “final decisions
of the district courts.” 28 U.S.C. § 1291. These decisions
include not only final judgments but also collateral orders, “a
small class of decisions that conclusively determine the
disputed question, resolve an important issue completely
separate from the merits of the action, and are effectively
unreviewable on appeal from a final judgment.” Citizens for
Resp. & Ethics in Wash. v. Dep’t of Homeland Sec., 532 F.3d
860, 864 (D.C. Cir. 2008) (cleaned up). The denial of a foreign
7
sovereign’s assertion of sovereign immunity ordinarily
qualifies as a collateral order. See Jungquist v. Sheikh Sultan
Bin Khalifa Al Nahyan, 115 F.3d 1020, 1025 (D.C. Cir. 1997).
EIG contends that treating the district court’s immunity
ruling as a collateral order contravenes the Supreme Court’s
instruction in Johnson v. Jones that interlocutory appeals
should decide only “issues of law.” 515 U.S. 304, 317 (1995).
By contrast, cases involving “fact-related dispute[s],”
including “which facts a party may, or may not, be able to
prove at trial,” id. at 307, 313, are inappropriate for
interlocutory review because those issues are “not truly
‘separable’ from the plaintiff’s claim,” Behrens v. Pelletier,
516 U.S. 299, 313 (1996). EIG argues that EIG II already
settled the relevant issue of law and thus this appeal centers on
the fact-bound issue of whether the district court correctly
found that Petrobras “targeted” U.S. investors. This, EIG says,
is precisely the type of “evidence sufficiency” determination
that does not constitute a collateral order. See Johnson, 515
U.S. at 313.
EIG overreads Johnson. As the Court later clarified,
“Johnson held, simply, that determinations of evidentiary
sufficiency at summary judgment are not immediately
appealable merely because they happen to arise in a qualified-
immunity case.” Behrens, 516 U.S. at 313; see also Ortiz v.
Jordan, 562 U.S. 180, 188 (2011) (“[I]nstant appeal is not
available, Johnson held, when the district court determines that
factual issues genuinely in dispute preclude summary
adjudication.”). But Petrobras does not dispute the district
court’s factual determinations; instead, it disagrees with the
district court’s view of the legal significance of those facts. An
interlocutory appeal does not fall afoul of Johnson merely
because it “require[s] the court to apply law to facts.” See
Jungquist, 115 F.3d at 1026. On the contrary, the Supreme
8
Court has made clear that “Johnson permits” a defendant “to
claim on appeal that all of the conduct which the District Court
deemed sufficiently supported for purposes of summary
judgment” nevertheless does not overcome the defendant’s
assertion of immunity. Behrens, 516 U.S. at 313; see also
Johnson, 515 U.S. at 319 (Whether “a given set of facts violates
clearly established law” is a “reviewable determination.”). We
remain free under Johnson to exercise appellate jurisdiction to
determine whether Petrobras is entitled to sovereign immunity
as a matter of law given the facts as determined by the district
court. See Farmer v. Moritsugu, 163 F.3d 610, 614 (D.C. Cir.
1998). 1
B. Merits
The merits issue before us is whether the district court
properly denied Petrobras’ summary judgment motion on
sovereign immunity, an issue we review de novo. See Price v.
1
Our Oscarson precedent does not help EIG’s position.
Oscarson v. Off. of Senate Sergeant at Arms, 550 F.3d 1 (D.C. Cir.
2008). There, as EIG emphasizes, the facts were not in dispute but
we nevertheless found that we lacked jurisdiction under Johnson. See
id. at 5–6. The critical distinction is that Oscarson involved “fact-
rich legal issues” that were “difficult to separate from the merits of
the underlying action.” Id. at 5; see also id. (the appeal “mingl[ed]”
the “preliminary and merits issues”). Although an interlocutory
appeal often requires the court to apply law to facts, “jurisdiction
may be denied . . . if the court concludes that the facts are too blurred
to support review on the law.” 15A CHARLES ALAN WRIGHT,
ARTHUR R. MILLER & EDWARD H. COOPER, FEDERAL PRACTICE &
PROCEDURE § 3914.10.4, 762–64 & n.49 (3d ed. 2022) (citing
Oscarson as an example). That is not the case here, as we have a
straightforward set of facts and a legal issue regarding the FSIA
distinct from the merits of EIG’s claims. See Kimberlin v. Quinlan,
199 F.3d 496, 503 (D.C. Cir. 1999) (Johnson precludes interlocutory
review only “[w]hen the law and the fact issues are not separable”).
9
Socialist People’s Libyan Arab Jamahiriya, 294 F.3d 82, 91
(D.C. Cir. 2002). Under the FSIA, “a foreign state is
presumptively immune from the jurisdiction of United States
courts; unless a specified exception applies, a federal court
lacks subject-matter jurisdiction over a claim against a foreign
state.” Saudi Arabia v. Nelson, 507 U.S. 349, 355 (1993).
Nonetheless, the FSIA embodies a “restrictive view of
sovereign immunity.” EIG II, 894 F.3d at 344 (quoting Phoenix
Consulting Inc. v. Republic of Angola, 216 F.3d 36, 40 (D.C.
Cir. 2000)). The plaintiff bears only the initial burden to
“produc[e] evidence that an exception applies,” after which the
defendant “bears the ultimate burden of persuasion to show the
exception does not apply.” Bell Helicopter Textron, Inc. v.
Islamic Republic of Iran, 734 F.3d 1175, 1183 (D.C. Cir.
2013).
EIG relies on the direct-effect exception to the FSIA,
under which a U.S. court can exercise jurisdiction over a
foreign sovereign if the sovereign’s commerce-related conduct
“causes a direct effect in the United States.” 28 U.S.C. §
1605(a)(2). The plaintiff must produce evidence “that the
‘lawsuit is (1) based upon an act of a foreign state outside the
territory of the United States; (2) that was taken in connection
with a commercial activity of the foreign state outside this
country; and (3) that caused a direct effect in the United
States.’” EIG II, 894 F.3d at 345 (quoting Republic of
Argentina v. Weltover, Inc., 504 U.S. 607, 611 (1992)
(alterations, ellipses and internal quotation marks omitted)).
The parties contest only the final element: directness. They
dispute whether the evidence produced at summary judgment
bears out the allegations we found sufficient to show a direct
effect at the dismissal stage. In EIG II, we held that EIG had
met its burden of production “by alleging that Petrobras
specifically targeted U.S. investors for Sete; that Petrobras
intentionally concealed the ongoing fraud at Petrobras and at
10
Sete; and that money invested in Sete was used to pay bribes
and kickbacks.” EIG II, 894 F.3d at 345 (citations to the record
omitted). The parties now focus on whether the evidence
supports the finding that Petrobras “specifically targeted” EIG
or other U.S. investors. 2 But targeting is not the touchstone of
our inquiry. We drew that term not from the FSIA’s text or our
precedent but from EIG’s allegations. See id. (citing EIG’s
pleadings); see also id. at 342 (citing the record for the
allegation that “Petrobras specifically targeted U.S. investors
for Sete”). EIG II held simply that EIG’s targeting allegations
were sufficient to show “a direct effect in the United States.” It
did not hold that targeting was the only way to satisfy the
statute. The governing test remains whether Petrobras
“cause[d] a direct effect in the United States” regardless of how
it did so. 28 U.S.C. § 1605(a)(2).
A “direct” effect is one that “follows ‘as an immediate
consequence of the defendant’s activity.’” Weltover, 504 U.S.
at 618 (quotation omitted and ellipses removed). It “has no
intervening element, but, rather, flows in a straight line without
deviation or interruption.” Princz v. Federal Republic of
Germany, 26 F.3d 1166, 1171 (D.C. Cir. 1994) (quotation
omitted). A direct effect need not be substantial or foreseeable,
see Weltover, 504 U.S. at 618, but it cannot be the result of
mere happenstance or coincidence. See Cruise Connections
Charter Mgmt. 1, LP v. Att’y Gen. of Canada, 600 F.3d 661,
665 (D.C. Cir. 2010) (“[H]arm to a U.S. citizen, in and of itself,
cannot satisfy the direct effect requirement.”); EIG II, 894 F.3d
at 348 (noting the Second Circuit’s holding that “some
financial loss from a foreign tort cannot, standing alone, suffice
to trigger the exception” (quoting Antares Aircraft, L.P. v.
2
Petrobras argues that “EIG fails the first prong of the EIG II
test, which requires that Petrobras have specifically targeted EIG or
other U.S. investors.” Appellant’s Br. at 15.
11
Federal Republic of Nigeria, 999 F.2d 33, 36 (2d Cir. 1993))).
We believe these requirements are met here.
Petrobras caused a direct effect in the United States
because, as the district court correctly observed, “Petrobras
engaged with EIG in a sustained course of dealing over many
months that conveyed its desire to obtain an investment from
EIG—one that ultimately resulted in an equity investment
worth hundreds of millions of dollars.” EIG III, 621 F. Supp.
3d at 51. No matter which party initiated the talks, Petrobras
sought to convince EIG to invest in Sete. After all, Santander,
Petrobras’ financial advisor, gave EIG access to a virtual data
room so that EIG could assess the investment opportunity. Id.
at 57. “Only potential investors were given access to the Data
Room.” Id. Petrobras’ top executives, including Ferraz and
Barbassa, met with EIG representatives no fewer than three
times in Brazil to help secure the investment. See id. at 51.
Petrobras tries to paint itself as the passive recipient of EIG’s
unwanted attention but investors do not force themselves to
make a $221 million investment. Petrobras’ actions “facilitated
and promoted” EIG’s investment, directly leading to both the
investment and EIG’s ultimate injury when the investment was
lost. Id. at 50. See Cruise Connections, 600 F.3d at 665 (direct-
effect exception satisfied when defendant’s termination of a
contract “led inexorably to the loss of revenues under
[plaintiff’s] third-party agreements”). 3
3
Petrobras attempts to support its characterization of the facts
by pointing to part of Corrigan’s testimony that the district court
excluded as hearsay. See EIG III, 621 F. Supp. 3d at 51–52. Corrigan
testified that his impression from October 2010 talks with Santander
was that Petrobras did not want international investors in Sete. He
also testified that “as of March 2011, Petrobras had not expressed
interest in EIG being an investor in Sete Brasil.” Id. at 51. EIG argues
that this evidence was wrongly excluded and is proof that “EIG had
12
The facts here are stronger than in Atlantica, the Second
Circuit case we relied on in EIG II. See EIG II, 894 F.3d at 345
(discussing Atlantica Holdings, Inc. v. Sovereign Wealth Fund
Samruk-Kazyna JSC, 813 F.3d 98, 110 (2d Cir. 2016)). There,
the court found the direct-effect exception satisfied when the
plaintiffs invested in the defendant’s securities after receiving
the defendant’s fraudulent memorandum about the securities
from “third-party intermediaries,” not from the defendant
itself. Atlantica, 813 F.3d at 113 (alteration omitted). Although
there was no allegation that the defendant met or directly
communicated with the plaintiffs, there was a direct effect
because the securities “were marketed in the United States and
directed toward United States persons” and thus “the defendant
contemplated and acted to encourage investment by United
States persons.” Id. at 110–11. Here, by contrast, there was
direct and extensive contact between Petrobras and EIG.
Nor was the direct effect in the United States the result of
happenstance or coincidence. Indeed, it was wholly
foreseeable. In EIG II, we noted that “EIG alleges that its
United States presence was not mere happenstance to Petrobras
and Sete, but that Petrobras and Sete ‘specifically targeted’
U.S. investors.” EIG II, 894 F.3d at 348 (quoting the record).
The summary judgment evidence substantiates these
allegations. Both Santander and Petrobras made lists of
potential U.S. investors and Petrobras pitched the Sete
not been targeted by Petrobras.” Appellant’s Br. at 24. We do not
think the district court abused its discretion in excluding the
testimony, see Gilmore v. Palestinian Interim Self-Gov’t Auth., 843
F.3d 958, 969 (D.C. Cir. 2016), but it would change little even if we
considered it. Regardless of Corrigan’s impression, the concrete acts
taken by Petrobras and its agent, Santander, including months-long
access to Petrobras’ virtual data room, show that Petrobras was
affirmatively cultivating a relationship with EIG as a potential
investor.
13
investment opportunity at two conferences hosted and attended
by potential U.S. investors. See EIG III, 621 F. Supp. 3d at 47–
49. The fact that the conferences were in Brazil and also
attended by non-American investors does not alter the fact that
Petrobras contemplated and tried to attract U.S. investment.
Thus, this is not a case “in which the plaintiff’s U.S. citizenship
was the only connection to the United States.” See Cruise
Connections, 600 F.3d at 665. 4
Finally, Petrobras argues that any effect from its actions
was not sufficiently “direct” because superseding events broke
the chain of causation. In essence, Petrobras contends that it
had handed everything over to Sete before EIG decided to
invest. From there, it was Sete, an independently financed and
managed company, that encouraged and ultimately accepted
EIG’s investment.
We are unconvinced. As we recognized in EIG II,
“multiple but-for causes” of an injury do not “break the chain
of causation for any one of them.” EIG II, 894 F.3d at 346; see
also id. (“Petrobras cannot oust the court of jurisdiction in a
lawsuit resulting from its alleged fraud simply because Sete’s
third-party lenders might also have injured EIG.”). That Sete
4
Petrobras misunderstands the relevance of the evidence
related to other U.S. investors. It argues that “whether Petrobras
targeted U.S. investors other than EIG is irrelevant because EIG’s
claims are not ‘based upon’ anything Petrobras said or did with
respect to those investors.” Appellant’s Br. at 31; see 28 U.S.C. §
1605(a)(2) (the direct-effect exception to the FSIA requires the suit
to be “based upon” the foreign sovereign’s commercial activity). The
other-investor evidence does not address what EIG’s suit is “based
upon” but simply provides further evidence, in addition to Petrobras’
lengthy course of dealing with EIG itself, that it was no coincidence
that the effects of Petrobras’ actions were “felt” in the United States.
See Atlantica, 813 F.3d at 110.
14
independently injured EIG does not relieve Petrobras of
liability for its own fraudulent acts. That is particularly true
here where the district court effectively concluded that
Petrobras and Sete were operating in tandem. The court found
that there was “no genuine dispute that a corruption scheme
was sewn into Sete’s very fabric from the start.” EIG III, 621
F. Supp. 3d at 55; see also id. at 53 (“The evidence shows that
a bribery scheme identical to the one executed at Petrobras was
built into Sete’s very DNA.”). There was uncontroverted
testimony that “Petrobras set the bribery scheme in motion at
Sete” by “hatch[ing] the plan to embed a kickback condition
within the contracts for drilling rigs” and installing its own
corrupt executives as Sete’s leaders. Id. at 78. Properly viewed,
Sete did not break the chain of causation; it continued it. By
beginning the bribery scheme and seeking EIG’s investment,
Petrobras knocked over the first domino; it cannot shift blame
to the end domino for the result.
Because we affirm the denial of Petrobras’ summary
judgment motion on immunity grounds, we must address
Petrobras’ argument that the district court prematurely granted
summary judgment to EIG on the merits. Foreign sovereign
immunity confers “immunity from litigation burdens as well as
from the entry of adverse judgments,” which means that a suit
against a foreign sovereign follows a set sequence. See Process
& Indus. Devs. Ltd. v. Fed. Republic of Nigeria, 962 F.3d 576,
584 (D.C. Cir. 2020). “[A] district court must resolve immunity
assertions ‘as early in the litigation as possible,’ even if that
requires jurisdictional discovery and factual resolution of
immunity questions to take place before the sovereign is
required to defend the merits.” Id. (emphasis added) (quoting
Phoenix Consulting, 216 F.3d at 39). Petrobras asks us to
vacate the district court’s grant of summary judgment to EIG
on the theory that the district court violated the immunity-then-
15
merits sequence by ruling on the merits before it had
conclusively resolved Petrobras’ assertion of immunity.
The confusion here stems from the fact that the parties
cross-moved for summary judgment on different grounds.
Despite its right to insist on having the immunity issue resolved
first, Petrobras argued that it was entitled to summary judgment
both because it enjoyed sovereign immunity and because EIG’s
claims failed on the merits. EIG Energy Fund XIV, L.P. v.
Petróleo Brasileiro S.A, Civ. No. 1:16-cv-00333 (Sept. 1,
2021), ECF No. 156. EIG, however, focused only on the merits
and did not move for summary judgment on the issue of
sovereign immunity. Id. (Sept. 1, 2021), ECF No. 153. The
district court rejected Petrobras’ immunity argument and
“proceed[ed] to the merits” because it was “satisfied that it has
jurisdiction over EIG’s claims under the FSIA’s direct-effect
exception.” EIG III, 621 F. Supp. 3d at 54. The court ultimately
denied Petrobras’ motion for summary judgment in full and
granted EIG partial summary judgment, ruling for EIG on the
merits “as to liability” and reserving the issue of damages for
trial. Id. at 84.
The issue is whether the district court was permitted to
reach the merits given that it did not affirmatively grant
summary judgment to EIG on the issue of sovereign immunity;
instead, it denied Petrobras’ assertion of sovereign immunity at
the summary judgment stage. The difference is an important
one. A summary judgment grant conclusively determines an
issue but a denial leaves the issue open for further factual
development and resolution at trial. See Whalen v. Unit Rig,
Inc., 974 F.2d 1248, 1251 (10th Cir.), as modified on reh’g
(Oct. 20, 1992) (“[A] denial of summary judgment is not a
judgment, but ‘merely a judge’s determination that genuine
issues of material fact exist.’” (quotation omitted));
Switzerland Cheese Ass’n, Inc. v. E. Horne’s Mkt., Inc., 385
16
U.S. 23, 25 (1966) (“[T]he denial of a motion for summary
judgment . . . is strictly a pretrial order that decides only one
thing—that the case should go to trial.”). Indeed, the district
court here recognized that it had left the immunity issue
unresolved. At a status conference following the ruling, the
judge stated that “I don’t think I’ve entered judgment on the
issue of sovereign immunity; rather, I simply said that
Petrobras has not carried its burden to show that it’s immune,”
noting that this “in theory, could leave open the question for
trial.” EIG Energy Fund XIV, L.P. v. Petróleo Brasileiro S.A,
Civ. No. 1:16-cv-00333 (Aug. 25, 2022), ECF No. 201 at 15–
16.
We need not decide whether the district court erred or what
the proper remedy might be if it did. As Petrobras recognizes,
the district court’s merits ruling does not qualify as a collateral
order as to which we have appellate jurisdiction. Even
assuming we could nonetheless review it via pendent
jurisdiction as Petrobras urges, doing so is discretionary and we
decline to do so here. See Kilburn v. Socialist People’s Libyan
Arab Jamahiriya, 376 F.3d 1123, 1136 (D.C. Cir. 2004)
(“[W]hether or not we have authority to exercise pendent
appellate jurisdiction in this case, there is no question that we
have discretion to decline to do so.”). We exercise pendent
jurisdiction sparingly and “only when substantial
considerations of fairness or efficiency demand it.” Id. at 1133
(quotation omitted). Here, neither fairness nor efficiency
weighs in favor of interlocutory review. Petrobras voluntarily
briefed the merits and thus invited the district court to rule upon
them even if the immunity question were not yet conclusively
resolved. Cf. Process & Indus. Devs. Ltd., 962 F.3d at 579–80
(district court erred in requiring foreign sovereign, over its
objection, to simultaneously brief immunity and merits issues).
The district court did so thoroughly; our reversal of that ruling
would only result in duplicative proceedings if Petrobras is
17
ultimately denied sovereign immunity conclusively. Neither
party is prejudiced if this issue is left for the district court to
resolve on remand.
For the foregoing reasons, we deny EIG’s motion to
dismiss the appeal for lack of jurisdiction and affirm the district
court’s denial of Petrobras’ summary judgment motion on
immunity grounds. We remand for further proceedings
consistent with this opinion.
So ordered.