Amicus Curiae Brief — Bolivarian Republic Venezuela v. Helmerich & Payne Int'l Drilling Co., 136 S. Ct. 1242 (2016) (No. 15-423)

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FILED

AUG 26 2016

OFFICE OF THE CLERK

No. 15-423

eee

In the Supreme Court of the United States

BOLIVARIAN REPUBLIC OF VENEZUELA, ET AL..

PETITIONERS

HELMERICH & PAYNE INTERNATIONAL DRILLING Co.,

ET AL.

ON WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE DISTRICT OF COLUMBIA CIRCUIT

BRIEF FOR THE UNITED STATES AS AMICUS CURIAE

SUPPORTING PETITIONERS

IAN HEATH GERSHENGORN

Acting Solicitor General

Counsel of Record

EDWIN 8S. KNEEDLER

Deputy Solicitor General

ELAINE J. GOLDENBERG

Assistant to the Solicitor

General

BRIAN J. EGAN

Adviser

of State Washington, D.C. 20530-0001

SupremeCtBriefs ,

Washington, D.C. 20520 tale ona Gna? @usdoj.gov

QUESTION PRESENTED

The Foreign Sovereign Immunities Act of 1976,

28 U.S.C. 1330, 1441(d), 1602 et seg., provides that a

foreign state and its instrumentalities are immune

from suit in United States courts, subject to limited

statutory exceptions. The expropriation exception

provides that a foreign state is not immune “in any

case * * * in which rights in property taken in viola-

tion of international law are in issue” and there is a

specified commercial-activity nexus to the United

States. 28 U.S.C. 1605(a)(3).

The question presented is whether a district court

lacks jurisdiction under Section 1330(a) and Section

1605(a)(3) on the ground that a plaintiff in an action

against a foreign state has failed to make legally suffi-

cient allegations of “rights in property” or a “tak[ing]

in violation of international law” only when the plain-

tiff’s claim that “rights in property taken in violation

of international law are in issue” is frivolous or com-

pletely devoid of merit.

(I)

; ’ "

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TABLE OF CONTENTS

Page

Interest of the United States..................c.c0cssssscsesesereerereeeessenseees l

tei iieretiniehenienisininencctesccsnnccncenternvesssennscsseusmennsenascemmanseuasti 1

I ertoneemnesemnsnsensentnsnmntenpementenspsncnennnsiacention 7

Argument:

A. A foreign state is immune from state or federal

court jurisdiction in a suit brought pursuant to

allegations are legally sufficient to satisfy ithe

exception’s substantive requirements .......................-. )

B. The court of appeals erred in ruling that juris-

diction was proper so long as respondents’ alle-

gations that the substantive standards of the

expropriation exception were satisfied were not

“wholly insubstantial or frivolous” ............................. 23

C. The judgment should be vacated and the case

remanded for further consideration under the

a iaitenrienterecicensimecnreincemacnnsccsecens 32

EST A 3A

Appendix — Statutory provisions...........................cs-cecesesesee la

TABLE OF AUTHORITIES

Cases:

Abelesz v. Magyar Nemzeti Bank, 692 F.3d 661

CO ae Sa errr rccescnseenennsesnsnssscscseveccsssnenssonseensvensnscsosesesese 23

Agudas Chasidei Chabad of U.S. v. Russian Fed’n,

528 F.3d 934 (D.C. Cir. 2008) «00, 6, 23, 25, 28, 29

American Nat'l Red Cross v. S.G., 505 U.S. 247

(1992) aes 23

Arbaugh v. Y & H Corp., 546 U.S. 500 (2006) 7 .27, 29, 30

Argentine Republic v. Amerada Hess Shipping

Corp., 488 U.S. 428 (1989) ........ccccccesccsesceseeveeneeeeees 11, 15, 18

(IIT)

Cases—Continued: Page

Asociacion de Reclamantes v. United Mexican

States, 735 F.2d 1617 (D.C. Cir. 1984),

cert. denied, 470 U.S. 1061 (1985) .............c.ccccesereesesereeees 17

Banco Nacional de Cuba v. Sabbatino, 307 F 2d

845 (2d Cir. 1962), rev’d on other grounds by 376

Cs I vrencsenesnsnecnnssstnsnzsnecssncnsncocesossstesssnecesonsssoessees 6

Bell v. Hood, 327 U.S. 678 (1946)........-.-c0ceceseseesvenevenes passim

Boos v. Barry, 485 U.S. 312 (1988) ..........ccsreererseserseeeseees 22

Cary v. Curtis, 44 U.S. (3 How.) 236 (1845) ..........0.0c..00000 15

Case Concerning the Barcelona Traction, Light &

Power Co. (Belgium v. Spain), 1970 1.C.J. 3,

(Feb. 5) ssvoee BO

de Sanchez v. Banco Cent. de Nicaragua, 770 F.2d

1385 (5th Cir. 1985) 17, 23, 33

Dole Food Co. v. Patrickson, 538 U.S. 468 (2003)...... 19, 33

EM Ltd. v. Republic of Argentina, 473 F.3d 463

(2d Cir.), cert. denied, 552 U.S. 818 (2007) ....................- 19

Fairv. ‘<nanbuntngnantatanogmel USS. 22

ee eit catentnsnrmcansccscnssusseneasensacapstmmneansenensnesseemmmenncsneaseeee 26

Foremost-McKesson, Inc. v. Islamic Republic of

Tran, 905 F.2d 438 (D.C. Cir, 1990) .0...........0.ccececcececeseneee 19

Franchise Tax Bd. v. Construction Laborers

Vacation Trust, 463 U.S. 1 (1983) .............ccccecerereeeeeeeeees 15

Garb v. Se ee 579 (2d Cir.

a rcnrenitennsteninnniersenisnagnsmmnestneninntintinemapeinnesassemsccssentenasosces 21

Harlow v. Fitzg rald, 457 U.S. 800 (1982) I iseatiacnniniesniiin 19

Hertz Corp. v. Friend, 559 U.S. 77 (2010) ...............-.000000+- 30

McCulloch v. Sociedad Nacional de Marineros de

Honduras, 372 U.S. 10 (196B)..........0..-cscscseeeseeseseereeeeerees 22

Merrill Lynch v. Manning, 136 S. Ct. 1562

Cases—Continued: Page

Mezerhane v. Repiiblica Bolivariana de

Venezuela, 785 F.3d 545 (11th Cir. 2015),

cert. denied, 136 S. Ct. 800 (2016) .0...........cccccccccececceseenees 23

Mims v. Arrow Fin. Servs., LLC, 132 S. Ct. 740

(ESET SSR Ese Aa POON ca 24

Ministry of Def. & Support for the Armed Forces

of the Islamic Republic of Iran v. Elahi, 556 U.S.

366 (2009) maieehdesdiedipaniiatianieeiataingmatibcememeecme 16

Mitchell v. Forsyth, 472 U.S. 511 (1985) ..........cccsereeeeeees 19

Moran v. Kingdom of Saudi Arabia, 27 F.3d 169

ee aettreiccscctreremrensunemnsnemerseseemnenios 19, 20, 31

Mt. Healthy City Sch. Dist. Bd. of Educ. v. Doyle,

a ttetirirtrniteseniasncincsensanccsnsencentsescscancsnscecte 18

National City Bank v. Republic of China,

I cerrtnicnicenssninsetnmensennimesnmmmacsenese 20, 21

OBB Personenverkehr AG v. Sachs, 136 8. Ct. 390

(2015) a pcesenenanpedannbaiediniamtatinnimenacmes 18, 31

Oliver Am. Trading Co. v. Mexico, 264 U.S. 440

(1924) eS 12

Owens v. Republic of Sudan, No. 01-2244,

2016 WL 1170919 (D.D.C. Mar. 23, 2016) .................0.-+- 26

Permanent Mission of India to the U.N. v. City of

N.Y., 651 U.S. 198 (2007)...........-c-ccercsceresseee 8, 10, 18, 20, 33

Persinger v. Islamic Republic of Iran, 729 F 2d

835 (D.C. Cir.), cert. denied, 469 U.S. 881 (1984).......... 22

Phoenix Consulting, Inc. v. Republic of Angola,

ee 14

Rein v. Socialist People’s Libyan Arab

Jamahirya, 162 F.3d 748 (2d Cir. 1998),

cert. denied, 527 U.S. 1008 (1999) ...........cssceserecoessesneeee 20

Republic of Austria v. Altmann, 541 U.S. 677

Cases—Continued: Page

Republic of Mexico v. Hoffman, 324A U.S. 30

(1946)... . —— +

Republic of Peru, Ex Parte, 318 U.S. 578

Gaia iertncterecsassrsupsvcsnscssnecevccensespenanopetnanenassecesusesesss 10, 12, 21

Republic of Philippines v. Pimentel, 553 U.S. 851

ei irecenescasensancanscesemneansnsentenmesnseasusesessnaecetanesetscsesese 19, 20

Robinson v. Government of Malaysia, 269 F.3d

ee ietianarisciienicniitninitniiinstenescncenecccenssseseeses 31

Samantar v. Yousuf, 560 U.S. 306 (2010) ............cccccceeeeee 10

Saudi Arabia v. Nelson, 507 U.S. 349 (1993) ........ 11, 18, 30

Schooner Exch. v. McF addon, 11 U.S.

(7 Cranch) 116 (1812) liiiaineeendiiaiapatieneanasmecsenes )

Segni v. Commercial Office of Spain, 816 F.2d 344

COR I ip herenncnsancnvcenensessscnenenscconessennnevesesessszenscssesesess 20

Siderman de Blake v. Republic of Argentina, 965

F.2d 699 (9th Cir. 1992), cert. denied, 507 U.S.

1017 (1993) satetinendnbenintitaasbhiensentnemsensceccsccssnen 23

Simon v. Republic of Hungary, 812 F 3d 127

(D.C. Cir. 2016)... 25, 26, 28, 30

Sosa v. Alvarez-Machain, 542 U.S. 692 (2004)................. 26

Steel Co. v. Citizens for a Better Env’ t, 523 U.S.

83 (1998)..... ssi lesetnaneidittadilaiididatiatiaialdidaiieteesescaceneseccees 25

Swafford v. Templeton, 185 U.S. TT 24

United States v. Congress Constr. Co., 222 U.S.

199 (1911) seeeeitihentilaadinaniateaduitaameenasnentcnscccscsssseses 15

United States v. Curtiss-Wright Exp. Gu.

A 21

Verlinden B.V. v. Central Bank of Nigeria,

a i inticcinneniccsnncccntintiensetcccsncvscsceseses passim

Zappia Middle East Constr. Co. v. Emirate of

Abu Dhabi, 215 F.3d 247 (2d Cir. 2000) .......... asia 21, 23

Vil

Case—Continued: Page

Zschernig v. Miller, 389 U.S. 429 (1908) ........cccccesesesesesees 21

Constitution, statutes and rules: Page

U.S. Const. Art. I seahalinaiaieeaiimepaeaniois 12

Foreign Sovereign Immunities Act of 1976,

28 U.S.C. 1330, 1441(d), 1602 ef 86. ........c.csr-csrerecereresereees 1

28 U.S.C. 1330(a) pasnsiligatedisionnts 2, 8, 11, 12, 15, 30

ne eae 11

TT 13, 23, 24

rn ee 18

i ciiniciscintiatenintecenenmeinnianmnieniontinies 30

natin icin seieinnainetnccmintincaennaitins 8, 10, 15

eee 2, 11, 28

a 18, 29

oi crrcicrcccncsnssscesersenscmnnppeciiinenntity 2,11

it iccsccncsceresnsnceenennsmesnentencennncnitn 4,18

a crcersercctenetenniermnntnented passim

rc incnrsnsescemenntepreenennnenonsdsiinti 8, 18

TT TEE 26

EERE tree 29

STi dainastcteanectntencnesensccenesninenorenienedinenicinginn 26

ita iertiianiccicsimesnnsuiceninineinvicmenninaion 27

hi cccencinniceninnscentapsammmmnesentiatapenntnsinita 29

NT 24

Fed. R. Civ. P.:

i icinincennieesenemnietinenemmemnetin 7, 14, 18, 29, 30, 31

ITT ies desennssnnsetnneietindinninieneniedinmaritiensiasiniaiiaiies 31

Miscellaneous:

Joseph W. Dellapenna, Suing Foreign Govern-

ments and Their Corporations (2d ed. 2003) ................ 20

Vill

Miscellaneous—Continued: Page

Dep't of Justice, Office of Foreign Litigation,

https://www justice.gov/civil/office-foreign-

litigation seiienianaiadeeanies 21

Bryan A. Garner, A Dictionary of Modern Legal

Usage (2d ed. 1995) lima 15

H.R. Rep. No. 1487, 94th Cong., 2d Sess.

(1976) . . 10, 11, 16, 21

13D Charles Alan Wright et al., Federal Practice

and Procedure (3d ed. Supp. 2016) .............-0-eceserereevens 14

In the Supreme Court of the Anited States

No. 15-423

BOLIVARIAN REPUBLIC OF VENEZUELA, ET AL.,

PETITIONERS

HELMERICH & PAYNE INTERNATIONAL DRILLING Co.

ET AL.

ON WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE DISTRICT OF COLUMBIA CIRCUIT

BRIEF FOR THE UNITED STATES AS AMICUS CURIAE

SUPPORTING PETITIONERS

INTEREST OF THE UNITED STATES

This case concerns the appropriate standard for es-

tablishing jurisdiction in an action against a foreign

state under the Foreign Sovereign Immunities Act of

1976 (FSIA or Act), 28 U.S.C. 1330, 1441(d), 1602 et

seq. Because application of the FSIA’s jurisdictional

provisions has implications for the treatment of the

United States in foreign courts and for its relations

with other sovereigns, the United States has a sub-

stantial interest in this case. At the Court’s invitation,

the Solicitor General filed an amicus brief on behalf of

the United States at the petition stage of this case.

STATEMENT

1. The FSIA establishes “a comprehensive set of

legal standards governing claims of immunity in every

(1)

civil action against a foreign state or its political sub-

divisions, agencies, or instrumentalities.” Verlinden

B.V. v. Central Bank of Nigeria, 461 U.S. 480, 488

(1983). The FSIA provides that a foreign state and its

agencies and instrumentalities “shall be immune from

the jurisdiction” of federal and state courts except as

provided by certain international agreements and by

exceptions enumerated in the statute. 28 U.S.C. 1604;

see 28 U.S.C. 1605-1607. It also provides that federal

district courts shall have jurisdiction “of any nonjury

civil action * * * as to any claim for relief in perso-

nam with respect to which the foreign state is not

entitled to immunity either under sections 1605-1607

of this title or under any applicable international

agreement.” 28 U.S.C. 1330(a).

The exception to immunity involved in this case,

which is set forth in Section 1605(a)(3), is known as

the expropriation exception. It provides that “(a

foreign state shall not be immune from the jurisdic-

tion of courts of the United States or of the States in

any case * * * in which rights in property taken in

violation of international law are in issue” and there is

a specified commercial-activity nexus to the United

States. 28 U.S.C. 1605(a)(3). The nexus requirement

is that the property taken or “any property exchanged

for such property” must be (1) “present in the United

States in connection with a commercial activity car-

ried on in the United States by the foreign state,” or

(2) “owned or operated by an agency or instrumentali-

ty of the foreign state and that agency or instrumen-

tality is engaged in a commercial activity in the Unit-

ed States.” /bid.

2. a. In the mid-1970s, petitioner Bolivarian Re-

public of Venezuela (Venezuela) nationalized its oil in-

dustry. Pet. App. 4a. As a result, Venezuela controls

production and exportation of oil through two state-

owned corporations, petitioners Petréleos de Venezue-

la, S.A., and PDVSA Petréleo (collectively PDVSA).

Ibid.

For many decades, respondent Helmerich & Payne

International Drilling Company (H&P-IDC), a United

States company, provided oil-drilling services to peti-

tioners through a wholly owned subsidiary, most re-

cently respondent Helmerich & Payne de Venezuela,

C.A. (H&P-V). H&P-V is incorporated under Venezue-

lan law. Pet. App. 3a-4a, 39a.

In 2007, H&P-V entered into contracts with PDVSA

to provide drilling services for a fixed period using

highly specialized drilling rigs, which H&P-IDC pur-

chased and then transferred to H&P-V. Pet. App. 4a.

By 2009, petitioners had failed to pay approximately

$100 million owed to H&P-V for its drilling services.

H&P-V responded by fulfilling its existing contractual

obligations, announcing that it would not renew the

contracts until it was paid, and disassembling its drill-

ing rigs. Jd. at 4a-5a.

In June 2010, petitioners blockaded H&P-V’s prop-

erties where the disassembled rigs were located. Pet.

App. 5a; see id. at 5a-6a. Shortly thereafter, the Vene-

zuelan National Assembly enacted a measure recom-

mending that then-President Hugo Chavez expropri-

ate H&P-V’s property, and he issued an expropriation

decree the same day. /d. at 6a, 44a. Petitioners “now

use[] H&P-V’s rigs and other assets in [their] state-

owned drilling business.” /d. at 8a.

b. Respondents filed suit in the District Court for

the District of Columbia, claiming that (1) PDVSA and

Venezuela took respondents’ property in violation of

international law, and (2) PDVSA breached the drill-

ing contracts with H&P-V. Pet. App. 45a-46a; see J.A.

103-104; see also J.A. 84 (alleging that respondents

were “subjected to discriminatory treatment” because

of their association with the United States). As to the

first count, respondents asserted that the court had

jurisdiction over the claim under 28 U.S.C. 1605(a)(3).'

Pet. App. 8a.

As relevant here, petitioners moved to dismiss re-

spondents’ expropriation claims on the ground that

they did not fall within the scope of the exception to

immunity in Section 1605(a)(3). Pet. App. 8a. The

parties agreed to brief certain threshold issues, in-

cluding whether “H&P-V is a national of Venezuela

under international law” and whether “H&P-IDC has

standing to assert a taking in violation of international

law” based on Venezuela’s expropriation of H&P-V’s

property. /d. at 9a; see J.A. 119 (order stating that

resolution of those issues would “assum/(e] the truth”

of the complaint’s factual allegations).

The district court granted the motion to dismiss in

part and denied it in part. The court dismissed H&P-

V’s expropriation claim because it determined that

H&P-V is a national of Venezuela. Pet. App. 49a-59a,

9la; see id. at 12a (“(GJenerally, a foreign sovereign’s

expropriation of its own national’s property does not

violate international law.”); id. at 93a-94a. But the

court declined to dismiss H&P-IDC’s expropriation

' Respondents’ contract claims are the subject of a certiorari

petition pending before this Court (No. 15-698) involving the

separate commercial-activity exception to immunity in 28 U.S.C.

1605(a)(2). The United States filed an amicus brief in that matter,

at this Court’s invitation, expressing the view that the Court

should deny the petition.

claim, reasoning that although H&P-IDC did not own

the property petitioners allegedly seized from H&P-V,

H&P-IDC asserted that petitioners effectively took its

interest in H&P-V as a going concern. /d. at 8l1a-90a.

3. The court of appeals affirmed the district court’s

expropriation-related rulings in part and reversed in

part. Pet. App. 1a-29a.

a. The court of appeals first addressed the stand-

ard for determining whether respondents’ “takings

claim[s]” fell within the scope of the expropriation

exception. Pet. App. 10a-12a. The court rejected the

contention that the claims should be dismissed be-

cause they did not, as a legal matter, sufficiently

allege “rights in property taken in violation of inter-

national law” under Section 1605(a)(3). 28 U.S.C.

1605(a)(3); Pet. App. lla. Relying on Bell v. Hood, 327

U.S. 678 (1946), and D.C. Circuit precedent relying on

Bell, the court stated that subject-matter jurisdiction

“is not defeated” by the possibility that a complaint

“might fail to state a cause of action on which petition-

ers could actually recover.” Pet. App. lla (citation

omitted); see Agudas Chasidei Chabad of U.S. v. Rus-

sian Fed’n, 528 F.3d 934, 940-941 (D.C. Cir. 2008).

The court concluded instead that it “will grant a mo-

tion to dismiss” for lack of jurisdiction under the

FSIA “on the grounds that the plaintiff has failed to

plead a ‘taking in violation of international law’ or has

no ‘rights in property ... in issue’ only if the claims

are ‘wholly insubstantial or frivolous’”—a standard

that the court described as setting an “exceptionally

low bar.” Pet. App. lla (quoting Chabad, 528 F.3d at

943, 946).

The court of appeals next held that H&P-V had “as-

serted a non-frivolous international expropriation claim.”

Pet. App. 12a; see id. at 13a-17a. The court acknowl-

edged that, under the so-called domestic-takings rule,

a foreign state’s expropriation of its own national’s

property does not violate international law. /d. at 12a.

But the court understood a pre-FSIA Second Circuit

decision, Banco Nacional de Cuba v. Sabbatino, 307

F.2d 845, 861 (1962), rev’d on other grounds by 376

U.S. 398 (1964), to hold that international law prohib-

its a state from expropriating the property of a do-

mestic corporation based on discrimination against

the corporation’s foreign shareholders. Pet. App. 13a-

14a. In light of Sabbatino, and in the absence of “any

decision from any circuit that so completely forecloses

H&P-V’s discriminatory takings theory as to inescap-

ably render the claim{) frivolous and completely de-

void of merit,” the court held that H&P-V’s claim “has

satisfied this Circuit’s forgiving standard.” /d. at l6a

(citation and internal quotation marks omitted).

The court of appeals likewise held that H&P-I1DC’s

claim that its own “rights in property” had been taken

in violation of international law was not frivolous. Pet.

App. 17a-22a. The court noted that “shareholders

may have rights in corporate property” that are not

derivative of the corporation’s rights, id. at 20a, and

that H&P-IDC alleged that it had suffered “a total

loss of control over its subsidiary,” id. at 22a. Accord-

ingly, without resolving the legal question of whether

H&P-IDC had viably alleged “rights in property”

under Section 1605(a)(3), the court ruled that “H&P-

IDC has ‘put its rights in property in issue in a non-

frivolous way.” Jbid. (quoting Chabad, 528 F.3d at

941).

b. Judge Sentelle dissented in part. Pet. App. 30a-

36a. He would have held that both H&P-V and H&P-

IDC had “failed to plead a taking in violation of in-

ternational law.” Id. at 34a (citation omitted); see id.

at 32a-33a (“To extend our examination of Venezuelan

law to adjudicate its fairness appears to me to violate

Venezuela’s sovereignty, the value protected by the

FSIA.”).

SUMMARY OF ARGUMENT

Section 1605(a)(3) of the Foreign Sovereign Im-

munities Act creates a narrow exception to foreign

sovereign immunity in certain cases “in which rights

in property taken in violation of international law are

in issue.” 28 U.S.C. 1605(a)(3). Like the FSIA’s other

exceptions to immunity, the expropriation exception

“codifies the standards governing foreign sovereign

immunity as an aspect of substantive federal law.”

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

480, 497 (1983). And “whether statutory subject-matter

jurisdiction exists under the [FSIA] entails an appli-

cation of the substantive terms of the Act to deter-

mine whether one of the specified exceptions to im-

munity applies.” Jd. at 497-498. The court of appeals

erred in holding that merely non-frivolous allegations

regarding the substantive requirements of an immuni-

ty exception were sufficient to establish jurisdiction—

a standard that the court itself described as “excep-

tionally low.” Pet. App. lla.

For a case to come within the scope of Section

1605(a)(3), the complaint must assert a claim that is

legally sufficient to satisfy the provision’s substantive

requirements. When the foreign state challenges the

legal sufficiency of the complaint’s jurisdictional alle-

gations under Federal Rule of Civil Procedure 12(b)(1),

the district court must determine whether the plain-

tiff’s allegations, if true, actually describe a “tak[ing)

in violation of international law”—that is, conduct that

is prohibited by internationai expropriation law—and

identify “rights in property” that were impaired as a

result of the foreign state’s conduct. If those substan-

tive requirements are not satisfied, the foreign state is

immune from suit both federal and state courts, the

district court lacks subject-matter jurisdiction, and

the claim must be dismissed.

That conclusion is dictated by the FSIA’s text and

purposes, as well as by this Court’s precedent. The

FSIA calls for courts to decide a foreign state’s “enti-

tle{ment}” to immunity, not to hypothesize about what

the outcome of that analysis could conceivably be. 28

U.S.C. 13830(a); see 28 U.S.C. 1602. Section 1605(a)(3)

requires that “rights in property taken in violation of

international] law are in issue”—not that such rights

may be in issue, or that there may have been a taking

that international law might proscribe. 28 U.S.C.

1605(a)(3). And requiring a legal determination of

immunity at the “threshold” of the action, Verlinden,

461 U.S. at 493-494, is necessary to ensure that the

foreign state actually receives the protections of im-

munity if no exception applies, to preserve the dignity

of the foreign state and comity between nations, and

to safeguard the interests of the United States when it

is sued in foreign courts. This Court has made just

such an analysis of legal sufficiency when considering

the application of other FSIA exceptions, including

the exception for cases “in which * * * rights in

immovable property situated in the United States are

in issue.” 28 U.S.C. 1605(a)(4); see Permanent Mis-

sion of India to the U.N. v. City of N.Y., 561 U.S. 193,

198-199 (2007).

In holding otherwise, the court of appeals relied

only on this Court’s decision in Bell v. Hood, 327 U.S.

678 (1946), which construed the “aris{ing] under” re-

quirement in the federal-question jurisdictional stat-

ute. But the Bell standard, which is derived from a

statute that does “nothing more than grant jurisdic-

tion over a particular class of cases,” Verlinden, 461

U.S. at 496-497, has no application in the FSIA con-

text, where Congress—impelled by foreign relations

concerns that are specific to suits against foreign

sovereigns—made foreign states presumptively im-

mune and imposed substantive preconditions to the

existence of jurisdiction that must be satisfied in eve-

ry case.

The court of appeals failed to assess whether re-

spondents’ allegations were legally sufficient to estab-

lish that petitioners’ alleged actions violated interna-

tional law or that H&P-IDC’s own rights in property

were in issue. Accordingly, the judgment should be

vacated and the case remanded for further considera-

tion under the proper standard.

ARGUMENT

A. A Foreign State Is Immune From State Or Federal

Court Jurisdiction In A Suit Brought Pursuant To The

Expropriation Exception Unless The Plaintiff's Alle-

gations Are Legally Sufficient To Satisfy The Excep-

tion’s Substantive Requirements

1. The United States has long recognized that for-

eign sovereigns are generally immune from suit in our

courts. See Schooner Exch. vy. McFaddon, 11 US. (7

Cranch) 116, 137 (1812) (explaining that sovereign

immunity rests on the “perfect equality and absolute

independence of sovereigns, and th{e) common inter-

est impelling them to mutual intercourse”); see also

Samantar v. Yousuf, 560 U.S. 305, 311 (2010). For

much of the Nation’s history, the United States ad-

hered to the “absolute” theory of foreign sovereign

immunity, under which foreign states were not subject

to suit without their consent. See, e.g., Verlinden, 461

U.S. at 486-487; Permanent Mission, 551 U.S. at 199.

The courts. historically looked to “the political

branch of the government charged with the conduct of

foreign affairs” to decide whether absolute immunity

should be recognized in a particular case. Republic of

Mezico v. Hoffman, 324 U.S. 30, 34 (1945); see Ver-

linden, 461 U.S. at 486; Ex parte Republic of Peru,

318 U.S. 578, 588-589 (1943). In 1952, the Department

of State adopted the “restrictive” theory of foreign

sovereign immunity, under which a foreign state gen-

erally was immune from suit for sovereign or public

acts but not for commercial acts. See Verlinden, 461

U.S. at 486-487.

In 1976, Congress enacted the FSIA, which estab-

lishes comprehensive “legal standards” governing

claims of immunity in all civil actions against foreign

states. Verlinden, 461 U.S. at 488. “For the most

part, the Act codifies, as a matter of federal law, the

restrictive theory of sovereign immunity.” J/bid.; see

H.R. Rep. No. 1487, 94th Cong., 2d Sess. 14 (1976)

(House Report). The Act also “transfers primary res-

ponsibility for immunity determinations from the

Executive to the Judicial Branch.” Republic of Aus-

tria v. Altmann, 541 U.S. 677, 691 (2004); see 28 U.S.C.

1602.

The FSIA sets forth a general rule that a foreign

state “shall be immune” from suit in federal and state

courts unless the suit comes within one of the FSIA’s

specific exceptions to that rule (or an exception is

provided by an applicable international agreement).

28 U.S.C. 1604; see 28 U.S.C. 1605-1607; Altmann, 541

U.S. at 691; see also House Report 17 (FSIA “starts

from a premise of immunity”). The exception invoked

in this case provides that “[a] foreign state shall not

be immune from the jurisdiction of courts of the Unit-

ed States or of the States in any case * * * in which

rights in property taken in violation of international

law are in issue” and a specified commercial-activity

nexus with the United States is present. 28 U.S.C.

1605(a)(3).

The FSIA also provides that when the require-

ments of one (or more) of the immunity exceptions are

met, and a foreign state is therefore not immune from

suit, 28 U.S.C. 1604, federal district courts shall have

subject-matter jurisdiction over the relevant claims.

28 U.S.C. 13830(a) (conferring jurisdiction “of any non-

jury civil action * * * as to any claim for relief in

personam with respect to which the foreign state is

not entitled to immunity either under sections 1605-

1607 of this title or under any applicable international

agreement”). Accordingly, “subject-matter jurisdic-

tion” in any action against a foreign state “depends on

the existence of one of the specified exceptions to

foreign sovereign immunity.” Verlinden, 461 U.S. at

493; see Saudi Arabia v. Nelson, 507 U.S. 349, 355

(1993) (same); Argentine Republic v. Amerada Hess

Shipping Corp., 488 U.S. 428, 434 (1989) (same); see

also 28 U.S.C. 1330(b)-(c) (when district court has

subject-matter jurisdiction and service is proper, then

“{pjersonal jurisdiction over a foreign state shall ex-

ist”).

2. As this Court held in Verlinden, the FSIA sets

forth “substantive” standards of federal law governing

the sovereign immunity of a foreign state, and Section

1330(a)’s grant of subject-matter jurisdiction there-

fore also incorporates those substantive requirements.

461 U.S. at 493, 497; see Altmann, 541 U.S. at 694-

696; see also Hoffman, 324 U.S. at 36 (sovereign im-

munity is “accepted rule of subs:antive law”); Ex

parte Peru, 318 U.S. at 588 (sovereign immunity is

“overriding principle of substantive law”); Oliver Am.

Trading Co. v. Mexico, 264 U.S. 440, 442-443 (1924).

In Verlinden, the Court considered “whether Con-

gress exceeded the scope of Art. III of the Constitu-

tion by granting federal courts subject-matter juris-

diction over certain civil actions * * * against for-

eign sovereigns” that fall outside the bounds of diver-

sity jurisdiction. 461 U.S. at 491. Interpreting the

FSIA in light of its text, context, and purposes, the

Court held that “a suit against a foreign state under

th[e] [FSIA] necessarily raises questions of substan-

tive federal law at the very outset, and hence clearly

‘arises under’ federal law, as that term is used in Art.

III.” Jd. at 498; see id. at 492. That is so, the Court

explained, because the FSIA’s rule of immunity and

its exceptions to that immunity are an exercise of

Congress’s “undisputed power” under Article I “to

decide, as a matter of federal law, whether and under

what circumstances foreign nations should be amena-

ble to suit in the United States”—a decision that

“raise[s] sensitive issues concerning the foreign rela-

tions of the United States” and as to which the “pri-

macy of federal concerns is evident.” Jd. at 493; see

ibid. (noting Congress’s “authority over foreign com-

merce and foreign relations”). It was to “promote

these federal interests” that Congress chose to “en-

act[] a statute comprehensively regulating the amena-

bility of foreign nations to suit” in federal or state

court under “detailed federal law standards.” /d. at

493-494.

In so ruling, the Court in Verlinden rejected sever-

al arguments that the FSIA’s immunity-related provi-

sions have a limited, non-substantive reach. As an

initial matter, the Court explained that Congress’s

power to enact the relevant provisions was not con-

strained by the various limitations that have been

imposed in interpreting 28 U.S.C. 1331, “which grants

district courts general federal-question jurisdiction

over any case that ‘arises under’ the laws of the Unit-

ed States.” Verlinden, 461 U.S. at 494; see id. at 495

(“the Court of Appeals’ heavy reliance on decisions

construing [Section 1331] was misplaced”).

The Court also rejected the contention that the

FSIA is merely “a jurisdictional statute” and there-

fore “can never constitute the federal law under which

the action arises, for Art. III purposes.” Verlinden,

461 U.S. at 496. The Court contrasted statutes that

seek “to do nothing more than grant jurisdiction over

a particular class of cases” with the FSIA, which “does

not merely concern access to the federal courts” but

rather is a “comprehensive scheme” substantively

regulating “foreign commerce” and foreign relations.

Id. at 496-497; see ibid. (noting that the FSIA “gov-

erns the types of actions for which foreign sovereigns

may be held liable in a court in the United States,

federal or state”) (emphasis added); id. at 495 n.22.

The Court concluded that because “(t]he [FSIA] codi-

fies the standards governing foreign sovereign im-

munity as an aspect of substantive federal law,” and

“applying those standards will generally require in-

terpretation of numerous points of federal law,” the

fact that “the inquiry into foreign sovereign immuni-

ty” is “labeled” a matter of subject-matter jurisdiction

“does not affect the constitutionality” of the statute.

Id. at 497.

3. The Court further explained in Verlinden that

the substantive question of immunity is one that must

be resolved at the outset of a case. “At the threshold

of every action in a district court against a foreign

state, * * * the court must satisfy itself that one of

the exceptions applies—and in doing so it must apply

the detailed federal law standards set forth in the

Act.” 461 U.S. at 493-494; see id. at 497-498 (“whether

statutory subject-matter jurisdiction exists under the

[FSIA] entails an application of the substantive terms

of the Act to determine whether one of the specified

exceptions to immunity applies”). It necessarily fol-

lows that when a foreign state moves to dismiss a

complaint for lack of jurisdiction under Federal Rule

of Civil Procedure 12(b)(1) on the ground that the

claim as pleaded does not meet the substantive re-

quirements of the relevant exception to immunity, the

district court must determine whether the allegations

are legally sufficient to satisfy those requirements.” If

not, the court must dismiss the case.

a. The text of the relevant FSIA provisions dic-

tates that conclusion. Assessing whether a claim falls

* When the foreign state challenges the factual basis for jurisdic-

tion, the court must go beyond the pleadings and resolve disputed

issues of fact necessary to determine subject-matter jurisdiction.

See Phoenix Consulting, Inc. v. Republic of Angola, 216 F.3d 36,

40 (D.C. Cir. 2000); see generally 13D Charles Alan Wright et al.,

Federal Practice and Procedure § 3564, at 93 n.7 (3d ed. Supp.

2016). In this Court, this case involves a legal, not factual, chal-

lenge to jurisdiction.

within a particular statutory grant of jurisdiction is,

after all, a question of statutory construction, see

Franchise Tax Bd. v. Construction Laborers Vacation

Trust, 463 U.S. 1, 21-22 (1983), and “the subject-

matter jurisdiction of the lower federal courts is

determined by Congress ‘in the exact degrees and

character which to Congress may seem proper for

the public good,’” Amerada Hess, 488 U.S. at 433-434

(quoting Cary v. Curtis, 44 U.S. (3 How.) 236, 245

(1845)).

In Section 1330(a), Congress provided that a dis-

trict court has subject-matter jurisdiction over ar

action against a foreign state only if “the foreign state

is not entitled to immunity either under sections 1605-

1607 of [Title 28] or under any applicable international

agreement.” 28 U.S.C. 1330(a). And in Section 1602,

which defines the purposes of the FSIA, Congress

provided that “{cjlaims of foreign states to immunity

should henceforth be decided by courts of the United

States * * * in conformity with the principles set

forth in this chapter.” 28 U.S.C. 1602. Those provi-

sions establish that a federal court lacks the power to

proceed until it has actually “decided” that the foreign

state is not legally “entitled to immunity.” 28 U.S.C.

1330(a), 1602. Hypothesizing about what the outcome

of such a substantive determination might ultimately

be is not sufficient.

In order for a foreign state to lack immunity under

the FSIA exception invoked in this case, the suit must

be one “in which rights in property taken in violation

of international law are in issue.” 28 U.S.C 1605(a)(3).

The term “in issue” means under discussion or in

dispute. See Bryan A. Garner, A Dictionary of Mod-

ern Legal Usage 470 (2d ed. 1995); see also United

States v. Congress Constr. Co., 222 U.S. 199, 200-201

(1911); ef. Ministry of Def. & Support for the Armed

Forces of the Islamic Republic of Iran v. Elahi, 556

U.S. 366, 379-384 (2009) (interpreting statutory term

“at issue” similarly). And Section 1605(a)(3) defines

what must be in dispute in the case for the exception

to apply: actual “rights in property taken in violation

of international law.” In other words, the allegations

in the complaint must be legally sufficient to identify

property rights that serve as the basis for the plain-

tiff’s claim, as well as to establish that a “tak[ing] in

violation of international law” has indeed taken place,

in order for a district court to have the power to re-

solve a dispute stemming from such an alleged taking.

A court cannot “satisfy itself” that a claim comes

within its jurisdiction, Verlinden, 461 U.S. at 494,

unless it determines the scope of the substantive re-

quirements in Section 1605(a)(3) and decides that the

plaintiff’s allegations fulfill them. Section 1605(a)(3)

thus cannot be read to obviate a foreign state’s im-

munity when “rights in property taken in violation of

international law” may be “in issue”—when, for ex-

ample, there is an unresolved dispute about whether a

taking of property (as alleged) violated international

law or simply the foreign state’s own law. A dispute

encompassed by Section 1605(a)(3) is one in which the

plaintiff’s allegations, if true, are sufficient as a mat-

ter of law to establish that a taking in violation of

international law has occurred and that the plaintiff

has rights in the relevant property, and the plaintiff

seeks some form of relief on the ground that those

rights have not been vindicated. See House Report

19-20 (“[tJhe term ‘taken in violation of international

law’ would include the nationalization or expropriation

of property without payment of the prompt adequate

and effective compensation required by international

law,” and “takings which are arbitrary or discrimina-

tory in nature”).

Congress’s decision to limit the exercise of jurisdic-

tion over a foreign sovereign under Section 1605(a)(3)

to cases in which “rights in property taken in violation

of international law are in issue” no doubt stems from

the very nature of the substantive restriction that the

exception embodies. Governmental decisions involv-

ing property—particularly real property—within a

sovereign’s own territorial jurisdiction are generally

reserved to that sovereign free of interference by the

courts of another nation. See, e.g., Asociacion de

Reclamantes v. United Mexican States, 735 F.2d 1517,

1520-1524 (D.C. Cir. 1984) (Sealia, J.), cert. denied, 470

U.S. 1051 (1985). In enacting Section 1605(a)(3), Con-

gress decided that foreign states would be subject to

suit in U.S. courts in only a narrow class of cases—

ones in which “international law” has been “violat{ed}”

by such an action and a commercial-activity nexus to

the United States is present. Without those limita-

tions, the case would raise what would otherwise be

purely a question of the domestic law of the nation

where the property is located or would lack a suffi-

cient connection to the United States to justify the

exercise of jurisdiction over a foreign state. See, e.g.,

de Sanchez v. Banco Cent. de Nicaragua, 770 F.2d

1385, 1395-1398 (5th Cir. 1985). And to ascertain

whether such a dispute is before the court, the legal

adequacy of the plaintiff’s allegations must be as-

sessed before the case moves forward.

Evaluating a complaint’s legal adequacy in that

way is precisely the approach that this Court has

already taken with respect to a closely analogous

subsection of Section 1605: Section 1605(a)(4), which

creates an exception to immunity for suits “in which

* * * rights in immovable property situated in the

United States are in issue.” 28 U.S.C. 1605(a)(4). In

Permanent Mission, supra, the Court determined

whether, as a matter of law, the plaintiff’s claim to

enforce a tax lien under New York law fell within

Section 1605(a)(4). The Court first determined the

scope of Section 1605(a)(4)’s reference to “rights in

* * * property,” concluding that it extended to non-

ownership and non-possessory interests. 551 U.S. at

198-199. The Court then analyzed the content of the

lien right asserted under New York law, concluding

that the tax lien encumbered the right to convey the

relevant property. See ibid. The Court accordingly

held that the lien-enforcement suit “implicate[d]

‘rights in immovable property’” in the United States

within the meaning of the FSIA exception. /d. at 199.

The Court thus determined that the claim pleaded in

the complaint was legally sufficient to fulfill Section

1605(a)(4)’s requirements.’

* The Court has given similar treatment to other immunity ex-

ceptions. See OBB Personenverkehr AG v. Sachs, 136 S. Ct. 390,

395-398 (2015) (conclusively resolving at Rule 12(b)\(1) stage

whether action for personal injury was “based upon a commercial

activity” under Section 1605(a)2)); Nelson, 507 U.S. at 361 (same);

Amerada Hess, 488 U.S. at 439-443 (conclusively deciding at Rule

12(b)(1) stage that “none” of the FSIA’s immunity exceptions

“apply to the facts of this case”). Outside the sovereign-immunity

context, certain other jurisdictional provisions have been held to

call for a definitive legal assessment of substantive requirements

at the threshold of the case. See, ¢.g., Mt. Healthy City Sch. Dist.

Bd. of Educ. v. Doyle, 429 U.S. 274, 278-279 (1977) (explaining that

28 U.S.C. 1343, which grunts federal courts jurisdiction over

b. Ensuring that an action does not proceed past

the “threshold,” Verlinden, 461 U.S. at 493-494, unless

the allegations of the complaint are legally sufficient

to satisfy the requirements of an exception to immuni-

ty is critical to carrying out the purposes of the FSIA.

First, the FSIA is intended to confer immunity

from suit, not merely liability. Making a legal deter-

mination at the outset of the case about whether im-

munity is applicable is the only way to ensure that a

foreign state can realize that important protection. It

is the very nature of immunity to protect({] against

“the costs, in time and expense, and other disruptions

attendant to litigation.” EM Ltd. v. Republic of Ar-

gentina, 473 F.3d 463, 486 (2d Cir.) (citation omitted),

cert. denied, 552 U.S. 818 (2007); see Republic of Phil-

ippines v. Pimentel, 553 U.S. 851, 865 (2008) (immuni-

ty is designed to “give foreign states and their in-

strumentalities some protection from the inconven-

ience of suit”) (quoting Dole Food Co. v. Patrickson,

538 U.S. 468, 479 (2003)); Moran v. Kingdom of Saudi

Arabia, 27 F.3d 169, 172 (5th Cir. 1994) (“[S]overeign

immunity under the FSIA is immunity from suit, not

just from liability.”); cf. Mitchell v. Forsyth, 472 U.S.

511, 526 (1985) (qualified immunity protects govern-

ment officials from “the costs of trial or * * * the

burdens of broad-reaching discovery”) (quoting Har-

low v. Fitzgerald, 457 U.S. 800, 817-818 (1982)). Mak-

ing jurisdiction a negligible requirement would “frus-

trate the significance and benefit of entitlement to

immunity” by imposing the very burdens and costs

that immunity is intended to shield against. Fore-

actions brought to redress deprivation of federal rights under color

of state law, requires inquiry into “whether a statutory action had

in fact been alleged”).

most-McKesson, Inc. v. Islamic Republic of Iran, 905

F.2d 438, 449 (D.C. Cir. 1990) (citation omitted); see

ibid. (“Where, as with foreign sovereigns, immunity

involves protection from suit, not merely a defense to

liability, more than the usual is required of trial courts

in making pretrial * * * legal determinations.”);

Segni v. Commercial Office of Spain, 816 F.2d 344,

847 (7th Cir. 1987). For those reasons, appellate

courts have consistently concluded that the denial of a

Rule 12(b)(1) motion asserting sovereign immunity

may be appealed immediately. See Permanent Mis-

sion, 551 U.S. at 197; Moran, 27 F.3d at 172; Rein v.

Socialist People’s Libyan Arab Jamahiriya, 162 F.3d

748, 755-756 (2d Cir. 1998), cert. denied, 527 U.S. 1003

(1999); Joseph W. Dellapenna, Suing Foreign Gov-

ernments and Their Corporations, at 694-700 (2d ed.

2003) (collecting authorities).

Second, the FSIA’s general rule of presumptive

immunity, and the limited exceptions thereto, are

intended to preserve the dignity of foreign sovereigns

and to ensure comity between nations. See, e¢.g., Pi-

mentel, 553 U.S. at 865-866; National City Bank v.

Republic of China, 348 U.S. 356, 362 (1955) (sovereign

immunity derives from concerns that include “respect

for the ‘power and dignity’ of the foreign sovereign”).

Subjecting a foreign sovereign to the jurisdiction of a

U.S. court without first making the substantive legal

determination that the FSIA’s immunity exceptions

dictate may well be understood as “an affront to [that

sovereign’s| dignity.” Hoffman, 324 U.S. at 35-36. It

also may well damage relations with that sovereign.

See id. at 35 (“Every judicial action exercising or

relinquishing jurisdiction over * * * a foreign gov-

ernment” may “effect * * * our relations with that

government.”); Ex parte Peru, 318 U.S. at 588-589;

see also generally Zschernig v. Miller, 389 U.S. 429,

441 (1968) (assertions of state authority in matters of

international importance have “a direct impact upon

foreign relations and may well adversely affect the

power of the central government to deal with those

problems”). In the “vast external realm, with its im-

portant, complicated, delicate and manifold prob-

lems,” United States v. Curtiss-Wright Exp. Corp.,

299 U.S. 304, 319 (1936), perceived affronts to foreign

states may result over the long term in reduced coop-

eration in a variety of areas. That is the opposite of

what the FSIA was intended to accomplish. See

House Report 26-27 (expressing intent to “ease the

conduct of foreign relations by the United States”); id.

at 11, 32, 45; see also Zappia Middle East Constr. Co.

v. Emirate of Abu Dhabi, 215 F.3d 247, 250-252 (2d

Cir. 2000).

Finally, and relatedly, ensuring that a substantive

threshold determination is made about whether a

plaintiff's allegations satisfy one of the statute’s ex-

ceptions to immunity serves the “reciprocal self-

interest” of the United States—another one of the

FSIA’s purposes. National City Bank, 348 U.S. at 362;

see House Report 9; Garb v. Republic of Poland, 440

F.3d 579, 585 (2d Cir. 2006). The United States engag-

es in extensive activities overseas in support of its

worldwide diplomatic, security, and law enforcement

missions, and it is not infrequently sued in foreign

courts. See generally Dep’t of Justice, Office of For-

eign Litigation (OF L), https://www.justice.gov/civil/

office-foreign-litigation (“At any given time, foreign

lawyers under OF L’s direct supervision represent the

United States in approximately 1,000 lawsuits pending

in the courts of over 100 countries.”). Because “some

foreign states base their sovereign immunity decisions

on reciprocity,” Persinger v. Islamic Republic of Iran,

729 F.2d 835, 841 (D.C. Cir.), cert. denied, 469 U.S.

881 (1984), a full substantive determination about a

foreign sovereign’s immunity under the FSIA must be

made at the outset of the case—lest suits against the

United States abroad be permitted to proceed past

their initial stages, thus embroiling the United States

in expensive and difficult litigation, based on legally

insufficient assertions that sovereign immunity should

be vitiated. Cf. McCulloch v. Sociedad Nacional de

Marineros de Honduras, 372 U.S. 10, 21 (1963) (con-

struing statute to avoid “invit{ing} retaliatory action

from other nations”); Persinger, 729 F.2d at 841 (de-

clining to adopt construction of FSIA that bore the

“potential for international discord and for foreign

government retaliation”); cf. also Boos v. Barry, 485

U.S. 312, 323 (1988) (highlighting importance of “con-

cept of reciprocity” in international law and diplomacy

and explaining that respecting diplomatic immunity of

foreign states “ensures that similar protections will be

accorded” to the United States). That damaging con-

sequence is one that Congress would have wanted to

avoid in enacting the strong immunity protections in

the FSIA.

B. The Court Of Appeals Erred In Ruling That Jurisdic-

tion Was Proper So Long As Respondents’ Allegations

That The Substantive Standards Of The Expropriation

Exception Were Satisfied Were Not “Wholly Insub-

stantial Or Frivolous”

The court of appeals did not undertake the re-

quired analysis. Instead of determining whether

H&P-V’s allegations actually state a violation of inter-

national law and whether H&P-IDC’s allegations

actually place its own “rights in property” in issue, the

court—applying an “exceptionally low” standard—

considered only whether respondents’ allegations on

those points are “wholly insubstantial or frivolous.”

Pet. App. lla (citation omitted); see id. at 16a, 20a.

The court thus did not correctly resolve those ele-

ments of the immunity inquiry.‘

1. In framing the jurisdictional question as wheth-

er respondents’ expropriation claims were frivolous,

the court of appeals relied only on this Court’s deci-

sion in Bell v. Hood, 327 U.S. 678 (1946), which con-

strued the “arising under” requirement in the federal-

question jurisdictional statute, now 28 U.S.C. 1331.

See Pet. App. lla (citing Bell, 327 U.S. at 682, and

Agudas Chasidei Chabad of U.S. v. Russian Fed’n,

528 F.3d 934, 940 (D.C. Cir. 2008), which also cites

Bell). That reliance was misplaced. Cf. Verlinden,

461 U.S. at 494-495 (finding that court of appeals

erred in importing federal-question-statute precedent

into FSIA context); American Nat'l Red Cross v. S.G.,

505 U.S. 247, 258 (1992) (explaining that Section 1331

* In contrast, other courts of appeals (with the exception of the

Ninth Circuit) have understood the inquiry under Section

1605(aX(3) to require a decision about the legal sufficiency of the

allegations. See Mezerhane v. Repiiblica Bolivariana de Venezue-

la, 785 F.3d 545, 548-561 (11th Cir. 2015) (holding that the claim

did not come within the expropriation exception because the for-

eign state’s alleged actions did not constitute a taking in violation

of international law), cert. denied, 136 S. Ct. 800 (2016); Zappia

Middle East Constr. Co., 215 F.3d at 251 (same); de Sanchez, 770

F.2d at 1894-1398 (same); Abelesz v. Magyar Nemzeti Bank, 692

F.3d 661, 678-685 (7th Cir. 2012) (same); see also Siderman de

Blake v. Republic of Arg., 965 F.2d 699, 711 (9th Cir. 1992), cert.

denied, 507 U.S. 1017 (1993).

pleading rule should not have been invoked with re-

spect to “jurisdiction based on a separate and inde-

pendent jurisdictional grant”).

The federal-question statute confers on federal

courts jurisdiction over any action that “aris[es] un-

der” the Constitution, treaties, or laws of the United

States. 28 U.S.C. 1831; see 28 U.S.C. 41(1) (1940)

(version of statute discussed in Bell). That statute is

not a source of substantive law. See, ¢.g., Mims v.

Arrow Financial Servs., LLC, 132 S. Ct. 740, 748-749

(2012). Rather, it grants federal courts power to hear

“a particular class of cases,” Verlinden, 461 U.S. at

496—those asserting “a right to recover under the

Constitution and laws of the United States,” Bell, 327

U.S. at 681; see Merrill Lynch v. Manning, 136 S. Ct.

1562, 1570 (2016).

As Bell explains, a claim “arises under” federal law

if the claim will be “sustained if the Constitution and

laws of the United States are given one construction

and will be defeated if they are given another.” 327

U.S. at 685; see Manning, 136 S. Ct. at 1569-1570.

Thus, the federal-question statute has been under-

stood to separate the jurisdictional inquiry from any

examination of the legal sufficiency of the plaintiff's

claim: a claim may “aris[e] under” federal law even if

the court’s ultimate construction of federal law will

defeat that claim. See Bell, 327 U.S. at 685; see also,

e.g., Swafford v. Templeton, 185 U.S. 487, 493-494

(1902). The Court applied that principle in Bell, hold-

ing that “the failure to state a proper cause of action

calls for a judgment on the merits and not for a dis-

missal for want of jurisdiction.” 327 U.S. at 682. The

Court also explained, however, that a suit asserting an

“alleged claim under the Constitution or federal stat-

utes” that “is wholly insubstantial and frivolous” may

be “dismissed for want of jurisdiction.” Jd. at 682-683;

see Steel Co. v. Citizens for a Better Env't, 523 U.S.

83, 89-90 (1998) (collecting cases).

The D.C. Circuit has understood Bell to establish a

more general rule, equally applicable to the FSIA as

to the federal-question statute, that “[jjurisdiction . . . is

not defeated ... by the possibility that” a complaint

“might fail to state a cause of action.” Pet. App. lla

(quoting Bell, 327 U.S. at 682); see Chabad, 528 F.3d

at 940. That court has accordingly held that whenever

“the plaintiff’s claim on the merits directly mirror{(s)

the jurisdictional standard” set forth in the FSIA, the

district court should find the jurisdictional standard

satisfied and the foreign state amenable to suit so long

as the plaintiff’s claim is not frivolous. Simon v. Re-

public of Hungary, 812 F.3d 127, 140 (2016). When

the “jurisdictional and merits inquiries” are not “fully

overlap[ping],” however, the district court is to under-

take a more stringent inquiry that asks “whether the

plaintiffs’ allegations satisfy the jurisdictional stand-

ard.” Jd. at 141; see ibid. (declining to apply the frivo-

lousness standard to inquiry under the expropriation

exception because plaintiffs asserted common-law

claims (such as conversion) on the merits and alleged

a taking that violated international law only to estab-

lish jurisdiction). Although the D.C. Circuit has thus

® The D.C. Circuit assumed that the jurisdictional and merits

inquiries “fully overlap” under Section 1605(a)(3) when a plaintiff

pleads a cause of action against a foreign state asserting a taking

in violation of international law, rather than a garden-variety

state-law claim (like conversion, restitution, or breach of contract)

in which the property that is the subject of the suit is alleged to

have been taken in violation of international law. Simon, 812 F.3d

far applied that rule only in cases involving the expro-

priation exception, it appears that the court may ex-

tend its rule to cases involving other exceptions to

foreign-state immunity.°

The D.C. Circuit’s approach is founded on a misun-

derstanding of the scope of Bell. Rather than an-

nouncing a general rule that applies to other jurisdic-

tional grants without regard to their text, Bell rested

on an interpretation of the federal-question statute,

see 327 U.S. at 680, 683, which has its own language,

“history,” and “judicial policy” considerations, Man-

ning, 136 S. Ct. at 1570 (citation omitted), and which

does not contain any substantive limitations. Bell's

frivolousness standard is merely a way of ascertaining

whether a claim is so plainly not a true assertion of a

right of recovery pursuant to federal law that it can-

not be said to fall within the bounds of the broad cate-

gory marked out by the “arising under” requirement.

See 327 U.S. at 682-683; see also Fair v. Kohler Die &

Specialty Co., 228 U.S. 22, 25 (1913).

at 141. But the D.C. Circuit did not address whether there would

be a distinct cause of action based directly on an alleged taking in

violation of international law, and that issue is not presented here.

See Pet. App. 12a (describing respondents’ claims as “international

expropriation claim{s]” without further discussion); J.A. 103-104;

cf. Sosa v. Alvarez-Machain, 542 U.S. 692, 732 (2004).

* See Owens v. Republic of Sudan, No. 01-2244, 2016 WL

1170919, at *22-°25 (D.D.C. Mar. 23, 2016) (applying rule in Simon

to case involving 28 U.S.C. 1606A, an immunity exception for claims

for personal injury or death “caused by an act of torture, extraju-

dicial killing, aircraft sabotage, [or] hostage taking”); see also, e.g.,

28 U.S.C. 1606(aX5) (immunity exception for claims for personal

injury or death “caused by the tortious act or omission of [a]

foreign state”).

That standard has no application to the FSIA. Un-

like the federal-question statute, the FSIA does not

merely address the question of subject-matter juris-

diction over a general category of cases. Instead, it

establishes substantive federal immunity standards

that both state and federal courts must apply at the

outset to determine whether a foreign state is amena-

ble to suit at all. Verlinden, 461 U.S. at 493, 497; see

pp. 11-18, supra; see also Arbaugh v. Y & H Corp., 546

U.S. 500, 514-515 & n.11 (2006) (explaining that Con-

gress may condition subject-matter jurisdiction on

satisfying a substantive requirement). Thus, “decid-

ing whether statutory subject-matter jurisdiction

exists under the [FSIA] entails an application of the

substantive terms of the Act to determine whether

one of the specified exceptions to immunity applies.”

Verlinden, 461 U.S. at 497-498. And among the ex-

propriation exception’s substantive standards is that

the claim must put in issue “rights in property taken

in violation of international law.” 28 U.S.C. 1605(a)(3).

That exception therefore requires a legal inquiry that

the federal-question statute eschews: jurisdiction

under Section 1605(a)(3) turns on the legal sufficiency

of the plaintiff’s claim that the alleged taking violated

international law.’

’ This Court recently interpreted a jurisdictional provision word-

ed differently than the federal-question statute to embody the

same “jurisdictional test” that has been “formulated for § 1331.”

Manning, 136 S. Ct. at 1570. But the provision involved in that

case—conferring jurisdiction over suits “brought to enforce any

liability or duty created by” certain securities-law provisions, 15

U.S.C T8aa(a)—is similar to the federal-question statute, and

distinct from the FSIA, in asking only about the general nature of

a plaintiff's claim (not its substance) and in governing claims as to

which there is no presumptive immunity.

The required legal inquiry under the FSIA reflects

Congress’s judgment about the limited scope of the

exceptions to immunity, which in turn stems from

important comity and foreign-relations concerns that

are unique to suits against foreign states. That judg-

ment and those underlying concerns have no relevance

to a jurisdictional determination under the federal-

question statute. In establishing a framework that

starts with a presumption that a foreign state “shall

be immune” from “jurisdiction,” 28 U.S.C. 1604, Con-

gress did not intend that a foreign state would be

subjected to the burdens of suit based merely on non-

frivolous allegations that the FSIA’s requirements

have been satisfied.

The ill fit between Bell and the FSIA is emphasized

by the extent to which the D.C. Circuit has departed

from the FSIA’s text and purposes in creating two

different jurisdictional standards—one that applies if

the merits of the underlying cause of action “fully

overlap” with an element of the jurisdictional inquiry,

and another that applies if partial or no overlap exists.

Simon, 812 F.3d at 141. That elaborate jurisdictional

superstructure is nowhere to be found in the relevant

provisions of the FSIA, and it is divorced from the

statute’s underlying goals. Cf. Chabad, 528 F.3d at

955-957 & n.3 (Henderson, J., concurring). Congress

mandated a careful, substantive inquiry into whether

a foreign state is immune from jurisdiction in every

case, not just in a limited class of cases.

2. Other rationales that have been advanced by re-

spondents in support of the “exceptionally low” stand-

ard applied by the court of appeals, Pet. App. 11a, also

fail to justify use of that standard to make jurisdic-

tional determinations under the FSIA.

First, it is not correct to say (e.g., Resp. Supp. Br.

8) that Section 1605(a)(3) merely requires “as-

sert{ion]” of “a certain type of claim”—that is, that a

plaintiff must merely assert as a (non-frivolous) legal

conclusion that its rights in property have been taken

in violation of international law in order to clear the

hurdle of Rule 12(b)(1). Chabad, 528 F.3d at 941.

Section 1605(a)(3) could, of course, have been worded

to refer to claims “alleging” or “asserting” a taking

of property in violation of international law, see, ¢.9.,

15 U.S.C. 8405, or to claims “arising under” or

“brought to enforce” international law, see Manning,

136 S. Ct. at 1570-1575." But Congress chose in Sec-

tion 1605(a)(3) to impose substantive requirements

rather than simply to describe the subject matter of

the suit. See Verlinden, 461 U.S. at 496 (distinguish-

ing FSIA from statutes that “do nothing more than

grant jurisdiction over a particular class of cases”).

Second, a more searching standard than the D.C.

Circuit’s is not unworkable merely because a determi-

nation of whether Section 1605(a)(3) applies may also

involve examination of questions that are pertinent to

the merits of the plaintiff’s claim. See Resp. Supp. Br.

7-8. Other courts of appeals deciding expropriation-

related FSIA cases have applied the correct legal

standard without any difficulty. See note 4, supra; see

also Arbaugh, 546 U.S. at 515 n.11 (discussing Con-

gress’s “prerogative” to define jurisdiction by impos-

ing substantive requirements that may be “relevant to

* Indeed, Congress did use “arising out of” language in Sectior

1605 when it so intended. See 28 U.S.C. 1605(aX5)(B) (stating that

the domestic-torts exception does not apply to “any claim arising

out of malicious prosecution, abuse of process, libel, slander,

misrepresentation, deceit, or interference with contract rights”).

the merits of a case”). Outside the FSIA context,

concerns that have arisen about a robust jurisdictional

inquiry in cases of overlap with the merits are often

driven by a prospect that a plaintiff may be deprived

of a right to have a jury resolve disputed factual ques-

tions. See, e.g., Arbaugh, 546 U.S. at 514. But the

Rule 12(b)(1) motion in this case makes only a legal

challenge to the sufficiency of the jurisdictional alle-

gations, and in any event no plaintiff in an action

against a foreign sovereign is ever entitled to a jury

trial. See 28 U.S.C. 1330(a) and 1441(d).

It is, in fact, the D.C. Circuit’s approach that raises

practical difficulties. See generally Hertz Corp. v.

Friend, 559 U.S. 77, 94 (2010) (“administrative sim-

plicity is a major virtue in a jurisdictional statute”). It

would not always be clear whether the jurisdiction and

the merits sufficiently “mirror{]” each other to meet

the D.C. Circuit’s atextual standard. Simon, 812 F.3d

at 140-141. Application of that standard could result

in very similar FSIA cases being decided under dif-

ferent (and sometimes outcome-determinative) juris-

dictional analyses, giving rise to confusion among for-

eign states and other litigants. See ibid; see also

Verlinden, 461 U.S. at 487-488, 497 (acknowledging

need for uniformity under FSIA so that foreign states

do not perceive unequal treatment). And the D.C.

Circuit’s requirement strongly encourages plaintiffs

to “recast” their claims to try to achieve the necessary

correspondence between the jurisdictional and merits

inquiries—the kind of practice on which this Court has

frowned as a means of bypassing sovereign-immunity

protections. Nelson, 507 U.S. at 363; see ibid. (refus-

ing to give “jurisdictional significance” to “feint of

language”); see also OBB Personenverkehr AG v.

Sachs, 136 S. Ct. 390, 396 (2015).

Finally, the problems associated with the D.C. Cir-

cuit’s standard cannot be obviated simply by pointing

to the foreign state’s ability to file a Rule 12(b)(6)

motion to dismiss for failure to state a claim. See

Resp. Supp. Br. 6 (citing Robinson v. Government of

Malaysia, 269 F.3d 133, 149 n.1 (2d Cir. 2001) (So-

tomayor, J., concurring)). Assuming that the plain-

tiff’s cause of action in a case involving Section

1605(a)(3) can ever overlap completely with the sub-

stantive requirements of that exception, see note 5,

supra, a Rule 12(b)(6) motion would provide a way of

testing whether a plaintiff’s allegations, taken as true,

made out a taking in violation of international law.

But if the foreign state made a Rule 12(b)(6) motion

and lost, that decision would not be appealable, and

the case would proceed to full discovery, dispositive

motions, and (perhaps) a bench trial. By contrast, the

denial of a Rule 12(b)(1) motion asserting sovereign

immunity in an FSIA case may be appealed immedi-

ately, thus helping to ensure that a foreign state’s

immunity is truly an “immunity from suit” and not

merely an immunity from liability. Moran, 27 F.3d at

172.

3. Application of the D.C. Circuit’s “exceptionally

low” standard for establishing jurisdiction under Sec-

tion 1605(a)(3) in a case like this one, Pet. App. 11a,

may well do real harm. Recognizing that “[a]ctions

against foreign sovereigns in our courts raise sensitive

issues concerning the foreign relations of the United

States,” Verlinden, 461 U.S. at 493, Congress careful-

ly crafted the FSIA’s exceptions to immunity to take

into account prevailing customary international-law

standards of foreign state immunity, id. at 487-488.

The D.C. Circuit’s use of the frivolousness standard

effectively nullifies key elements of the immunity

analysis under the expropriation exception, and sub-

jects a foreign state to the power of another sover-

eign’s judicial system and the burdens of litigation,

whenever the plaintiff can muster a non-frivolous

argument that it has “rights in property” and that

international law could be interpreted to prohibit the

alleged taking. That permissive approach could result

in adverse foreign-relations consequences and recip-

rocal adverse treatment of the United States in for-

eign courts. See pp. 20-22, supra.

C. The Judgment Should Be Vacated And The Case Re-

manded For Further Consideration Under The Correct

Legal Standard

Because the court of appeals applied an insuffi-

ciently rigorous standard, it failed to determine whether

resp /ndents’ allegations satisfied Section 1605(a)(3)’s

requirements.

With respect to whether respondent H&P-V’s ex-

propriation claim satisfied Section 1605(a)(3)’s re-

quirement that a “tak[ing] in violation of international

law” be “in issue,” 28 U.S.C. 1605(a)(3), the court of

appeals held only that H&P-V’s argument was “non-

frivolous,” Pet. App. 17a (citation omitted). The court

acknowledged that international law does not general-

ly speak to a sovereign’s actions with respect to the

property of its own nationals, but believed that a col-

orable argument could be mustered that a corporate

plaintiff's own nationality may be disregarded “[w]hen

a foreign state treats a corporation in a particular way

because of the nationality of its shareholders.” Jd. at

14a (citation omitted). That ruling set the bar for

making the jurisdictional determination too low. The

court should, instead, have answered the legal ques-

tion before it and definitively ruled on whether a

“generally accepted norm” of international expropria-

tion law prohibits the taking of a domestic corpora-

tion’s property to discriminate against foreign share-

holders. de Sanchez, 770 F.2d at 1396.

The court of appeals made the same error with re-

spect to whether respondent H&P-IDC adequately

alleged that its own “rights in property” were “in

issue.” 28 U.S.C. 1605(a)(3); see Pet. App. 22a. The

court recognized that “[a] corporation and its share-

holders are distinct entities” and that a shareholder

generally does not have an ownership interest in the

corporation’s property. Dole Food, 538 U.S. at 474-

475. But the court nonetheless held that H&P-IDC

might have “rights in” respondent H&P-V’s property

for purposes of Section 1605(a)(3), without examining

the source or scope of those potential rights. Pet.

App. 19a-22a. The court should, instead, have deter-

mined whether respondents’ allegations were legally

sufficient to place H&P-IDC’s “rights in property” in

issue. The court should have first examined whether

the law of the state of H&P-V’s incorporation—

Venezuela—gave H&P-IDC, as H&P-V’s shareholder,

any direct rights. See Case Concerning the Barcelona

Traction, Light & Power Co. (Belgium v. Spain), 1970

L.C.J. 3, 1 47 (Feb. 5). The court then should have

considered whether any such rights constitute “rights

in property” for purposes of Section 1605(a)(3). See

Permanent Mission, 551 U.S. at 198-199. Finally, had

it identified any relevant “rights in property,” the

court should have determined whether the complaint

sufficiently alleges that “rights in property [were]

taken in violation of international law.” 28 U.S.C.

1605(a)(3).

CONCLUSION

The judgment of the court of appeals should be va-

cated and the case remanded for consideration under

the proper standard.

Respectfully submitted.

AUGUST 2016

IAN HEATH GERSHENGORN

EDWIN S. KNEEDLER

Deputy Solicitor General

ELAINE J. GOLDENBERG

Assistant to the Solicitor

General

SHARON SWINGLE

LEwis S. YELIN

APPENDIX

1. 28 U.S.C. 1330 provides:

Actions against foreign states

(a) The district courts shall have original jurisdiction

without regard to amount in controversy of any nonjury

civil action against a foreign state as defined in section

1603(a) of this title as to any claim for relief in personam

with respect to which the foreign state is not entitled to

immunity either under sections 1605-1607 of this title or

under any applicable international agreement.

(b) Personal jurisdiction over a foreign state shall

exist as to every claim for relief over which the district

courts have jurisdiction under subsection (a) where ser-

vice has been made under section 1608 of this title.

a foreign state does not confer personal jurisdiction with

respect to any claim for relief not arising out of any

transaction or occurrence enumerated in sections 1605-

1607 of this title.

2. 28 U.S.C. 1331 provides:

Federal question

The district courts shall have original jurisdiction of

all civil actions arising under the Constitution, laws, or

treaties of the United States.

3. 28 U.S.C. 1602 provides:

Findings and declaration of purpose

The Congress finds that the determination by United

States courts of the claims of foreign states to immunity

(la)

from the jurisdiction of such courts would serve the in-

terests of justice and would protect the rights of both

foreign states and litigants in United States courts.

Under international law, states are not immune from the

jurisdiction of foreign courts insofar as their commercial

activities are concerned, and their commercial property

may be levied upon for the satisfaction of judgments

rendered against them in connection with their commer-

cial activities. Claims of foreign states to immunity

should henceforth be decided by courts of the United

States and of the States in conformity with the principles

set forth in this chapter.

4. 28 U.S.C. 1608 provides:

Definitions.

For purposes of this chapter—

(a) A “foreign state”, except as used in section 1608 of

this title, includes a political subdivision of a foreign state

or an agency or instrumentality of a foreign state as

defined in subsection (b).

(b) An “agency or instrumentality of a foreign state”

means any entity—

(1) which is a separate legal person, corporate or

otherwise, and

(2) which is an organ of a foreign state or political

subdivision thereof, or a majority of whose shares or

other ownership interest is owned by a foreign state

or political subdivision thereof, and

(3) which is neither a citizen of a State of the

United States as defined in section 1332 (c) and (e) of

this title, nor created under the laws of any third

country.

ters, continental or insular, subject to the jurisdiction of

the United States.

(d) A “commercial activity” means either a regular

course of commercial conduct or a particular eymmercial

transaction or act. The commercial character of an activ-

ity shall be determined by reference to the nature of the

course of conduct or particular transaction or act, rather

than by reference to its purpose.

(e) A “commercial activity carried on in the United

States by a foreign state” means commercial activity car-

ried on by such state and having substantial contact with

the United States.

5. 28 U.S.C. 1604 provides:

Immunity of a foreign state from jurisdiction

Subject to existing international agreements to which

the United States is a party at the time of enactment of

this Act a foreign state shall be immune from the juris-

diction of the courts of the United States and of the

States except as provided in sections 1605 to 1607 of this

chapter.

6. 28 U.S.C. 1605 provides:

General exceptions to the jurisdictional immunity of a

foreig=: stat-

(a) A foreign state shall not be immune from the ju-

risdiction of courts of the United States or of the States

in any case—

(1) in which the foreign state has waived its im-

munity either explicitly or by implication, notwith-

standing any withdrawal of the waiver which the for-

eign state may purport to effect except in accordance

with the terms of the waiver;

(2) in which the action is based upon a commer-

cial activity carried on in the United States by the

foreign state; or upon an act performed in the United

States in connection with a commercial activity of the

foreign state elsewhere; or upon an act outside the

territory of the United States in connection with a

commercial activity of the foreign state elsewhere and

that act causes a direct effect in the United States;

(3) in which rights in property taken in violation

of international law are in issue and that property or

any property exchanged for such property is present

in the United States in connection with a commercial

activity carried on in the United States by the foreign

state; or that property or any property exchanged for

such property is owned or operated by an agency or

instrumentality of the foreign state and that agency

or instrumentality is engaged in a commercial activity

in the United States;

(4) in which rights in property in the United

States acquired by succession or gift or rights in im-

movable property situated in the United States are in

issue;

(5) not otherwise encompassed in paragraph (2)

above, in which money damages are sought against a

foreign state for personal injury or death, or damage

to or loss of property, occurring in the United States

and caused by the tortious act or omission of that for-

eign state or of any official or employee of that for-

eign state while acting within the scope of his office or

employment; except this paragraph shall not apply

(A) any claim based upon the exercise or per-

formance or the failure to exercise or perform a

discretionary function regardless of whether the

discretion be abused, or

(B) any claim arising out of malicious prosecu-

tion, abuse of process, libel, slander, misrepresen-

tation, deceit, or interference with contract rights;

(6) in which the action is brought, either to en-

force an agreement made by the foreign state with or

for the benefit of a private party to submit to arbitra-

tion all or any differences which have arisen or which

may arise between the parties with respect to a de-

fined legal relationship, whether contractual or not,

concerning a subject matter capable of settlement by

arbitration under the laws of the United States, or to

confirm an award made pursuant to such an agree-

ment to arbitrate, if (A) the arbitration takes place or

is intended to take place in the United States, (B) the

agreement or award is or may be governed by a trea-

ty or other international agreement in force for the

United States calling for the recognition and en-

forcement of arbitral awards, (C) the underlying

claim, save for the agreement to arbitrate, could have

been brought in a United States court under this sec-

tion or section 1607, or (D) paragraph (1) of this sub-

section is otherwise applicable.

(b) A foreign state shall not be immune from the ju-

risdiction of the courts of the United States in any case in

which a suit in admiralty is brought to enforce a maritime

lien against a vessel or cargo of the foreign state, which

maritime lien is based upon a commercial activity of the

foreign state: Provided, That—

(1) notice of the suit is given by delivery of a copy

of the summons and of the complaint to the person, or

his agent, having possession of the vessel or cargo

against which the maritime lien is asserted; and if the

vessel or cargo is arrested pursuant to process ob-

tained on behalf of the party bringing the suit, the

service of process of arrest shall be deemed to consti-

tute valid delivery of such notice, but the party bring-

ing the suit shall be liable for any damages sustained

by the foreign state as a result of the arrest if the par-

ty bringing the suit had actual or constructive know-

ledge that the vessel or cargo of a foreign state was

involved; and

(2) notice to the foreign state of the commence-

ment of suit as provided in section 1608 of this title is

initiated within ten days either of the delivery of no-

tice as provided in paragraph (1) of this subsection or,

in the case of a party who was unaware that the vessel

or cargo of a foreign state was involved, of the date

such party determined the existence of the foreign

state’s interest.

(b)(1), the suit to enforce a maritime lien shall thereafter

proceed and shall be heard and determined according to

the principles of law and rules of practice of suits in rem

whenever it appears that, had the vessel been privately

owned and possessed, a suit in rem might have been

maintained. A decree against the foreign state may

include costs of the suit and, if the decree is for a money

judgment, interest as ordered by the court, except that

the court may not award judgment against the foreign

state in an amount greater than the value of the vessel or

cargo upon which the maritime lien arose. Such value

shall be determined as of the time notice is served under

subsection (b)(1). Decrees shall be subject to appeal and

revision as provided in other cases of admiralty and mari-

time jurisdiction. Nothing shall preclude the plaintiff in

any proper case from seeking relief in personam in the

same action brought to enforce a maritime lien as provid-

ed in this section.

(d) A foreign state shall not be immune from the ju-

risdiction of the courts of the United States in any action

brought to foreclose a preferred mortgage, as defined in

section 31301 of title 46. Such action shall be brought,

heard, and determined in accordance with the provisions

of chapter 313 of title 46 and in accordance with the prin-

ciples of law and rules of practice of suits in rem, when-

ever it appears that had the vessel been privately owned

and possessed a suit in rem might have been maintained.

((e), (f) Repealed. Pub. L. 110-181, div. A, title X,

§ 1083(b)(1)(B), Jan. 28, 2008, 122 Stat. 341.]

(g) LIMITATION ON DISCOVERY.—

(1) IN GENERAL.—~A) Subject to paragraph (2), if

an action is filed that would otherwise be barred by

section 1604, but for subsection 1605A, the court, up-

on request of the Attorney General, shall stay any re-

quest, demand, or order for discovery on the United

States that the Attorney General certifies would sig-

nificantly interfere with a criminal investigation or

prosecution, or a national security operation, related

to the incident that gave rise to the cause of action,

until such time as the Attorney General advises the

court that such request, demand, or order will no

longer so interfere.

(B) A stay under this paragraph shall be in effect

during the 12-month period beginning on the date on

which the court issues the order to stay discovery.

The court shall renew the order to stay discovery for

additional 12-month periods upon motion by the Unit-

ed States if the Attorney General certifies that dis-

covery would significantly interfere with a criminal

investigation or prosecution, or a national security

operation, related to the incident that gave rise to the

cause of action.

(2) SUNSET.—{A) Subject to subparagraph (B),

no stay shall be granted or continued in effect under

paragraph (1) after the date that is 10 years after the

date on which the incident that gave rise to the cause

of action occurred.

(B) After the period referred to in subparagraph

(A), the court, upon request of the Attorney General,

may stay any request, demand, or order for discovery

on the United States that the court finds a substantial

likelihood would—

(i) create a serious threat of death or serious

bodily injury to any person;

(ii) adversely affect the ability of the United

States to work in cooperation with foreign and in-

ternational law enforcement agencies in investi-

gating violations of United States law; or

(iii) obstruct the criminal case related to the

incident that gave rise to the cause of action or

undermine the potential for a conviction in such

case.

(3) EVALUATION OF EVIDENCE.—The Court’s

evaluation of any request for a stay under this subsec-

tion filed by the Attorney General shall be conducted

ex parte and in camera.

(4) BAR ON MOTIONS TO DISMISS.—A stay of dis-

covery under this subsection shall constitute a bar to

the granting of a motion to dismiss under rules

12(b)(6) and 56 of the Federal Rules of Civil Proce-

dure.

(5) CONSTRUCTION.—Nothing in this subsection

shall prevent the United States from seeking protec-

tive orders or asserting privileges ordinarily available

to the United States.

10a

7. 28 U.S.C. 1605A provides:

Terrorism exception to the jurisdictional immunity of a

foreign state

(a) INGENERAL.—

(1) NO IMMUNITY.—A foreign state shall not be

immune from the jurisdiction of courts of the United

States or of the States in any case not otherwise cov-

ered by this chapter in which money damages are

sought against a foreign state for personal injury or

death that was caused by an act of torture, extrajudi-

cial killing, aircraft sabotage, hostage taking, or the

provision of material support or resources for such an

act if such act or provision of material support or re-

sources is engaged in by an official, employee, or

agent of such foreign state while acting within the

scope of his or her office, employment, or agency.

(2) CLAIM HEARD.—The court shall hear a claim

under this section if—

(AXi)(I) the foreign state was designated as a

state sponsor of terrorism at the time the act de-

scribed in paragraph (1) occurred, or was so des-

ignated as a result of such act, and, subject to sub-

clause (II), either remains so designated when the

claim is filed under this section or was so desig-

nated within the 6-month period before the claim

is filed under this section; or

(II) in the case of an action that is refiled un-

der this section by reason of section 1083(c)(2)(A)

of the National Defense Authorization Act for Fis-

cal Year 2008 or is filed under this section by rea-

son of section 1083(c)(3) of that Act, the foreign

lla

state was designated as a state sponsor of terror-

ism when the original action or the related action

under section 1605(a)(7) (as in effect before the

enactment of this section) or section 589 of the

Foreign Operations, Export Financing, and Re-

lated Programs Appropriations Act, 1997 (as con-

tained in section 101(c) of division A of Public Law

104-208) was filed;

(ii) the claimant or the victim was, at the time

the act described in paragraph (1) occurred—

(I) anational of the United States;

(II) a member of the armed forces; or

(III) otherwise an employee of the Govern-

ment of the United States, or of an individual

performing a contract awarded by the United

States Government, acting within the scope of

the employee's employment; and

(iii) in a case in which the act occurred in the

foreign state against which the claim has been

brought, the claimant has afforded the foreign

state a reasonable opportunity to arbitrate the

claim in accordance with the accepted internation-

al rules of arbitration; or

(B) the act described in paragraph (1) is relat-

ed to Case Number 1:00CV03110 (EGS) in the

United States District Court for the District of

Columbia.

(b) LIMITATIONS.—An action may be brought or

maintained under this section if the action is commenced,

or a related action was commenced under section

1605(a)(7) (before the date of the enactment of this sec-

12a

tion) or section 589 of the Foreign Operations, Export

Financing, and Related Programs Appropriations Act,

1997 (as contained in section 101(c) of division A of Public

Law 104-268) not later than the latter of—

(1) 10 years after April 24, 1996; or

(2) 10 years after the date on which the cause of

action arose.

is or was a state sponsor of terrorism as described in

subsection (a)(2)(A)(i), and any official, employee, or

agent of that foreign state while acting within the scope

of his or her office, employment, or agency, shall be liable

to—

(1) anational of the United States,

(2) amember of the armed forces,

(3) an employee of the Government of the United

States, or of an individual performing a contract a-

warded by the United States Government, acting

within the scope of the employee’s employment, or

(4) the legal representative of a person described

in paragraph (1), (2), or (3),

for personal injury or death caused by acts described in

subsection (a)(1) of that foreign state, or of an official,

employee, or agent of that foreign state, for which the

courts of the United States may maintain jurisdiction

under this section for money damages. In any such ac-

tion, damages may include economic damages, solatium,

pain and suffering, and punitive damages. In any such

action, a foreign state shall be vicariously liable for the

acts of its officials, employees, or agents.

13a

(d) ADDITIONAL DAMAGES.—After an action has been

brought under subsection (c), actions may also be

brought for reasonably foreseeable property loss, wheth-

er insured or uninsured, third party liability, and loss

claims under life and property insurance policies, by

reason of the same acts on which the action under sub-

section (c) is based.

(e) SPECIAL MASTERS.—

(1) IN GENERAL.—The courts of the United

States may appoint special masters to hear damage

claims brought under this section.

(2) TRANSFER OF FUNDS.—The Attorney General

shall transfer, from funds available for the program

under section 1404C of the Victims of Crime Act of

1984 (42 U.S.C. 106038c), to the Administrator of the

United States district court in which any case is pend-

ing which has been brought or maintained under this

section such funds as may be required to cover the

costs of special masters appointed under paragraph

(1). Any amount paid in compensation to any such

special master shall constitute an item of court costs.

(f) APPEAL.—In an action brought under this section,

appeals from orders not conclusively ending the litigation

may only ‘e taken pursuant to section 1292(b) of this

title.

(g) PROPERTY DISPOSITION.—

(1) IN GENERAL.—In every action filed in a Unit-

ed States district court in which jurisdiction is alleged

under this section, the filing of a notice of pending ac-

tion pursuant to this section, to which is attached a

copy of the complaint filed in the action, shall have the

l4a

effect of establishing a lien of lis pendens upon any

real property or tangible personal property that is—

(A) subject to attachment in aid of execution,

or execution, under section 1610;

(B) located within that judicial district; and

tled in the name of any entity controlled by any

defendant if such notice contains a statement list-

(2) NOTICE.—A notice of pending action pursu-

ant to this section shall be filed by the clerk of the dis-

trict court in the same manner as any pending action

and shall be indexed by listing as defendants all

named defendants and all entities listed as controlled

by any defendant.

(3) ENFORCEABILITY.—Liens established by rea-

son of this subsection shall be enforceable as provided

in chapter 111 of this title.

(h) DEFINITIONS.—F or purposes of this section—

(1) the term “aircraft sabotage” has the meaning

given that term in Article 1 of the Convention for the

Suppression of Unlawful Acts Against the Safety of

Civil Aviation;

(2) the term “hostage taking” has the meaning

given that term in Article 1 of the International Con-

vention Against the Taking of Hostages;

(3) the term “material support or resources” has

the meaning given that term in section 2339A of title

18;

15a

(4) the term “armed forces” has the meaning giv-

en that term in section 101 of title 10;

(5) the term “national of the United States”

has the meaning given that term in section 101(a)(22)

of the Immigration and Nationality Act (8 U.S.C.

1101(a)(22));

(6) the term “state sponsor of terrorism” means a

country the government of which the Secretary of

State has determined, for purposes of section 6(j) of

the Export Administration Act of 1979 (50 U.S.C.

App. 2405(j)), section 620A of the Foreign Assistance

Act of 1961 (22 U.S.C. 2371), section 40 of the Arms

Export Control Act (22 U.S.C. 2780), or any other

provision of law, is a government that has repeatedly

provided support for acts of international terrorism;

and

(7) the terms “torture” and “extrajudicial killing”

have the meaning given those terms in section 3 of the

Torture Victim Protection Act of 1991 (28 U.S.C. 1350

note).

8. 28 U.S.C. 1606 provides:

Extent of liability

As to any claim for relief with respect to which a for-

eign state is not entitled to immunity under section 1605

or 1607 of this chapter, the foreign state shall be liable in

the same manner and to the same extent as a private

individual under like circumstances; but a foreign state

except for an agency or instrumentality thereof shall not

be liable for punitive damages; if, however, in any case

wherein death was caused, the law of the place where the

l6a

action or omission occurred provides, or has been con-

strued to provide, for damages only punitive in nature,

the foreign state shall be liable for actual or compensato-

ry damages measured by the pecuniary injuries resulting

from such death which were incurred by the persons for

whose benefit the action was brought.

9. 28 U.S.C. 1607 provides:

Counterclaims

In any action brought by a foreign state, or in which a

foreign state intervenes, in a court of the United States

or of a State, the foreign state shall not be accorded

immunity with respect to any counterclaim—

(a) for which a foreign state would not be entitled

to immunity under section 1605 or 1605A of this chap-

ter had such claim been brought in a separate action

against the foreign state; or

(b) arising out of the transaction or occurrence

that is the subject matter of the claim of the foreign

state; or

seek relief exceeding in amount or differing in kind

from that sought by the foreign state.

17a

10. 28 U.S.C. 1608 provides:

Service; time to answer; default

(a) Service in the courts of the United States and of

the States shall be made upon a foreign state or political

subdivision of a foreign state:

(1) by delivery of a copy of the summons and

complaint in accordance with any special arrange-

ment for service between the plaintiff and the foreign

state or political subdivision; or

(2) if no special arrangement exists, by delivery of

a copy of the summons and complaint in accordance

with an applicable international convention on service

of judicial documents; or

(3) if service cannot be made under paragraphs

(1) or (2), by sending a copy of the summons and com-

plaint and a notice of suit, together with a translation

of each into the official language of the foreign state,

by any form of mail requiring a signed receipt, to be

addressed and dispatched by the clerk of the court to

the head of the ministry of foreign affairs of the for-

eign state concerned, or

(4) if service cannot be made within 30 days un-

der paragraph (3), by sending two copies of the sum-

mons and complaint and a notice of suit, together with

a translation of each into the official language of the

foreign state, by any form of mail requiring a signed

receipt, to be addressed and dispatched by the clerk

of the court to the Secretary of State in Washington,

District of Columbia, to the attention of the Director

of Special Consular Services—and the Secretary shal]

transmit one copy of the papers through diplomatic

channels to the foreign state and shall send to the

18a

clerk of the court a certified copy of the diplomatic

note indicating when the papers were transmitted.

As used in this subsection, a “notice of suit” shall mean a

notice addressed to a foreign state and in a form pre-

scribed by the Secretary of State by regulation.

(b) Service in the courts of the United States and of

the States shall be made upon an agency or instrumental-

ity of a foreign state:

(1) by delivery of a copy of the summons and

complaint in accordance with any special arrange-

ment for service between the plaintiff and the agency

or instrumentality; or

(2) if no special arrangement exists, by delivery

of a copy of the summons and complaint either to an

officer, a managing or general agent, or to any other

agent authorized by appointment or by law to receive

service of process in the United States; or in accord-

ance with an applicable international convention on

service of judicial documents; or

(3) if service cannot be made under paragraphs

(1) or (2), and if reasonably calculated to give actual

notice, by delivery of a copy of the summons and com-

plaint, together with a translation of each into the of-

ficial language of the foreign state—

(A) as directed by an authority of the foreign

state or political subdivision in response to a letter

rogatory or request or

(B) by any form of mail requiring a signed

receipt, to be addressed and dispatched by the

clerk of the court to the agency or instrumentality

to be served, or

19a

sistent with the law of the place where service is to

be made.

(1) in the case of service under subsection (a)(4),

as of the date of transmittal indicated in the certified

copy of the diplomatic note; and

(2) in any other case under this section, as of the

date of receipt indicated in the certification, signed

and returned postal receipt, or other proof of service

applicable to the method of service employed.

(d) In any action brought in a court of the United

States or of a State, a foreign state, a political subdivision

thereof, or an agency or instrumentality of a foreign state

shall serve an answer or other responsive pleading to the

complaint within sixty days after service has been made

under this section.

(e) No judgment by default shall be entered by a

court of the United States or of a State against a foreign

state, a political subdivision thereof, or an agency or in-

strumentality of a foreign state, unless the claimant

establishes his claim or right to relief by evidence satis-

factory to the court. A copy of any such default judgment

shall be sent to the foreign state or political subdivision in

the manner prescribed for service in this section.

20a

11. 28 U.S.C. 1609 provides:

Immunity from attachment and execution of property of a

foreign state

Subject to existing international agreements to which

the United States is a party at the time of enactment of

this Act the property in the United States of a foreign

state shall be immune from attachment arrest and execu-

tion except as provided in sections 1610 and 1611 of this

chapter.

12. 28 U.S.C. 1610 provides:

Exceptions to the immunity from attachment or execution

(a) The property in the United States of a foreign

state, as defined in section 1603(a) of this chapter, used

for a commercial activity in the United States, shall not

be immune from attachment in aid of execution, or from

execution, upon a judgment entered by a court of the

United States or of a State after the effective date of this

Act, if—

(1) the foreign state has waived its immunity

from attachment in aid of execution or from execution

either explicitly or by implication, notwithstanding

any withdrawal of the waiver the foreign state may

purport to effect except in accordance with the terms

of the waiver, or

(2) the property is or was used for the commer-

cial activity upon which the claim is based, or

(3) the execution relates to a judgment establish-

ing rights in property which has been taken in viola-

Z2la

tion of international law or which has been exchanged

for property taken in violation of international law, or

(4) the execution relates to a judgment establish-

ing rights in property—

(A) which is acquired by succession or gift, or

(B) which is immovable and situated in the

United States: Provided, That such property is

not used for purposes of maintaining a diplomatic

or consular mission or the residence of the Chief

of such mission, or

(5) the property consists of any contractual obli-

gation or any proceeds from such a contractual obli-

gation to indemnify or hold harmless the foreign state

or its employees under a policy of automobile or other

liability or casualty insurance covering the claim

which merged into the judgment, or

(6) the judgment is based on an order confirming

an arbitral award rendered against the foreign state,

provided that attachment in aid of execution, or exe-

cution, would not be inconsistent with any provision in

the arbitral agreement, or

(7) the judgment relates to a claim for which the

foreign state is not immune under section 1605A or

section 1605(a)(7) (as such section was in effect on

January 27, 2008), regardless of whether the property

is or was involved with the act upon which the claim is

based.

(b) In addition to subsection (a), any property in the

United States of an agency or instrumentality of a for-

eign state engaged in commercial activity in the United

States shall not be immune from attachment in aid of

22a

execution, or from execution, upon a judgment entered

by a court of the United States or of a State after the

effective date of this Act, if—

(1) the agency or instrumentality has waived its

immunity from attachment in aid of execution or from

execution either explicitly or implicitly, notwithstand-

ing any withdrawal of the waiver the agency or in-

strumentality may purport to effect except in accord-

ance with the terms of the waiver, or

(2) the judgment relates to a claim for which the

agency or instrumentality is not immune by virtue of

section 1605(a)(2), (3), (5), or 1605(b) of this chapter,

regardless of whether the property is or was involved

in the act upon which the claim is based, or

(3) the judgment relates to a claim for which the

agency or instrumentality is not immune by virtue of

section 1605A of this chapter or section 1605(a)(7) of

this chapter (as such section was in effect on January

27, 2008), regardless of whether the property is or

was involved in the act upon which the claim is based.

tions (a) and (b) of this section shall be permitted until

the court has ordered such attachment and execution

after having determined that a reasonable period of time

has elapsed following the entry of judgment and the

giving of any notice required under section 1608(e) of this

chapter.

(d) The property of a foreign state, as defined in sec-

tion 1603(a) of this chapter, used for a commercial activi-

ty in the United States, shall not be immune from attach-

ment prior to the entry of judgment in any action

brought in a court of the United States or of a State, or

23a

prior to the elapse of the period of time provided in sub-

section (c) of this section, if—

(1) the foreign state has explicitly waived its im-

munity from attachment prior to judgment, notwith-

standing any withdrawal of the waiver the foreign

state may purport to effect except in accordance with

the terms of the waiver, and

(2) the purpose of the attachment is to secure sat-

isfaction of a judgment that has been or may ultimate-

ly be entered against the foreign state and not to ob-

tain jurisdiction.

(e) The vessels of a foreign state shall not be immune

from arrest in rem, interlocutory sale, and execution in

actions brought to foreclose a preferred mortgage as

provided in section 1605(d).

(f)(1)A) Notwithstanding any other provision of law,

including but not limited to section 208(f) of the Foreign

Missions Act (22 U.S.C. 4308(f)), and except as provided

in subparagraph (B), any property with respect to which

financial transactions are prohibited or regulated pursu-

ant to section 5(b) of the Trading with the Enemy Act (50

U.S.C. App. 5(b)), section 620(a) of the Foreign Assis-

tance Act of 1961 (22 U.S.C. 237((a)), sections 202 and

203 of the International Emergency Economic Powers

Act (50 U.S.C. 1701-1702), or any other proclamation, or-

der, regulation, or license issued pursuant thereto, shall

be subject to execution or attachment in aid of execution

of any judgment relating to a claim for which a foreign

state (including any agency or instrumentality or such

state) claiming such property is not immune under sec-

tion 1605(a)(7) (as in effect before the enactment of sec-

tion 1605A) or section 1605A.

24a

(B) Subparagraph (A) shall not apply if, at the time

the property is expropriated or seized foreign state, the

property has been held in title by a natural person or, if

held in trust, has been held for the benefit of a natural

person or persons.

(2A) At the request of any party in whose favor a

judgment has been issued with respect to a claim for

which the foreign state is not immune under section

1605(a)(7) (as in effect before the enactment of section

1605A) or section 1605A, the Secretary cf the Treasury

and the Secretary of State should make every effort to

fully, promptly, and effectively assist any judgment cred-

itor or any court that has issued any such judgment in

identifying, locating, and executing against the property

of that foreign state or any agency or instrumentality of

such state.

(B) In providing such assistance, the Secretaries—

(i) may provide such information to the court

under seal; and

(ii) should make every effort to provide the in-

formation in a manner sufficient to allow the court to

direct the United States Marshall’s office to promptly

and effectively execute against that property.

(3) WAIVER.—The President may waive any provi-

sion of paragraph (1) in the interest of national security.

25a

(g) PROPERTY IN CERTAIN ACTIONS.—

(1) IN GENERAL.—Subject to paragraph (3), the

property of a foreign state against which a judgment

is entered under section 1605A, and the property of

an agency or instrumentality of such a state, including

property that is a separate juridical entity or is an in-

terest held directly or indirectly in a separate juridi-

cal entity, is subject to attachment in aid of execution,

and execution, upon that judgment as provided in this

section, regardless of—

(A) the level of economic control over the

property by the government of the foreign state;

(B) whether the profits of the property go to

that government;

ernment manage the property or otherwise con-

trol its daily affairs;

(D) whether that government is the sole bene-

ficiary in iaterest of the property; or

(E) whether establishing the property as a

separate entity would entitle the foreign state to

benefits in United States courts while avoiding its

obligations.

(2) UNITED STATES SOVEREIGN IMMUNITY INAP-

PLICABLE.—Any property of a foreign state, or agen-

cy or instrumentality of a foreign state, to which par-

agraph (1) applies shall not be immune from attach-

ment in aid of execution, or execution, upon a judg-

ment entered under section 1605A because the prop-

erty is regulated by the United States Government by

reason of action taken against that foreign state un-

26a

der the Trading With the Enemy Act or the Interna-

tional Emergency Economic Powers Act.

(3) THIRD-PARTY JOINT PROPERTY HOLDERS.—

Nothing in this subsection shall be cunstrued to su-

persede the authority of a court to prevent appropri-

ately the impairment of an interest held by a person

who is not liable in the action giving rise to a judg-

ment in property subject to attachment in aid of exe-

cution, or execution, upon such judgment.

13. 28 U.S.C. 1611 provides:

Certain types of property immune from execution

(a) Notwithstanding the provisions of section 1610 of

this chapter, the property of those organizations desig-

nated by the President as being entitled to enjoy the

privileges, exemptions, and immunities provided by the

International Organizations Immunities Act shall not be

subject to attachment or any other judicial process im-

peding the disbursement of funds to, or on the order of, a

foreign state as the result of an action brought in the

courts of the United States or of the States.

(b) Notwithstanding the provisions of section 1610 of

this chapter, the property of a foreign state shall be im-

mune from attachment and from execution, if—

(1) the property is that of a foreign central bank

or monetary authority held for its own account, unless

such bank or authority, or its parent foreign govern-

ment, has explicitly waived its immunity from at-

tachment in aid of execution, or from execution, not-

withstanding any withdrawal of the waiver which the

27a

bank, authority or government may purport to effect

except in accordance with the terms of the waiver; or

(2) the property is, or is intended to be, used in

connection with a military activity and

(A) is of a military character, or

(B) is under the contro] of a military authority

or defense agency.

this chapter, the property of a foreign state shall be im-

mune from attachment and from execution in an action

brought under section 302 of the Cuban Liberty and

Democratic Solidarity (LIBERTAD) Act of 1996 to the

extent that the property is a facility or installation used

by an accredited diplomatic mission for official purposes.

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.