Petition for Writ of Certiorari — World Wide Minerals Ltd. v. Republic of Kazakhstan

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02 688 oct 31 2009

No. 02- OfPICE OF THE CLERK

IN THE |

Supreme Court of the United States

WORLD WIDE MINERALS LTD., WORLD WIDE RESOURCE

FINANCE INC., KAZURAN CORPORATION, and NUCLEAR

FUEL RESOURCES CORPORATION,

Petitioners,

THE REPUBLIC OF KAZAKHSTAN, THE STATE

COMMITTEE OF THE REPUBLIC OF KAZAKHSTAN ON THE

MANAGEMENT OF STATE PROPERTY, and THE NATIONAL

ATOMIC COMPANY KAZATOMPROM,

Respondents.

On PETITION FOR A Writ OF CERTIORARI TO THE

UNITED STATES CouRT OF APPEALS FOR THE

DISTRICT OF COLUMBIA CIRCUIT

PETITION FOR A WRIT OF CERTIORARI

ANSON M. KELLER

Counsel of Record

MARSHALL LEE MILLER .

Baise & MILLER, P.C.

Attorneys for Petitioners

1020 19th Street, N.W.

Suite 400

Washington, D.C. 20036

(202) 331-9109

177100 g

COUNSEL PRESS

(800) 274-3321 * (800) 359-6859

Her

QUESTIONS PRESENTED

1. Whether the court of appeals erred in holding that there

was no waiver of sovereign immunity by Kazakhstan under the

Foreign Sovereign Immunities Act 28 U.S.C. §§ 1330 and 1602

et seq. (“FSIA”): :

a. when Kazakhstan had entered into a commercial

venture with petitioners that was implemented by

a series of four interrelated, purely commercial

contracts, each of which refers to the other,

b. two ofthe contracts contain a clear written waiver

of sovereign immunity, and

c. the finding of waiver by the district court was not

contested on appeal.

In other words, did the court of appeals err in holding that every

document in a commercial venture has to contain the written

waiver.

2. Whether the court of appeals erred in refusing to apply

the commercial activity exception of the FSIA to this case.

3. Whether the court of appeals erred in holding that when

a foreign sovereign specifically waives by contract its sovereign

immunity to regulate the export of a natural resource except for

some auxiliary, administrative tasks, can it escape liability in

breaching that contract by claiming the Act of State Doctrine. ~

4. Whether the court of appeals erred in holding that a

foreign sovereign, which clearly waives its sovereign immunity

and engages in commercial activity, can then hide behind the

Act of State Doctrine insofar as acts of state are concerned and

when such acts are not public but indeed private and commercial.

PARTIES TO THE PROCEEDING

1. Petitioners are the appellants in the court of appeals:

World Wide Minerals Ltd., World Wide Resource Finance

Inc., KazUran Corporation, and Nuclear Fuel Resources

Corporation, a Colorado corporation.

2. Respondents are the Republic of Kazakhstan, the State

Committee of the Republic of Kazakhstan on the

Management of State Property, and the National Atomic

Company Kazatomprom. The State Committee of the

Republic of Kazakhstan on the Management of State Property

is not only an instrumentality of Kazakhstan but an actual

part of the government of Kazakhstan, just as the United

States Department of the Interior is part of the United States

government. The National Atomic Company Kazatomprom,

owned by the Kazakhstan government, was formed for the

purpose of privatizing the Kazakhstan uranium industry.

It is also an instrumentality of the Republic of Kazakhstan.

STATEMENT PURSUANT TO RULE 29.6

The parent company of Petitioners, World Wide Resource

Finance Inc., Kazuran Corporation, and Nuclear Fuel

Resources Corporation, is Petitioner World Wide Minerals

Ltd. Petitioner, World Wide Minerals Ltd., has no parent

corporation. No publicly held company owns 10% or more

of the stock of any Petitioner.

til

TABLE OF CONTENTS

Page

ee are es ene Sr ae i

Partees to the Proceeding ....... ccc cc ev cceseces li

Statement Pursuart to Rule 29.6 ............... li

SS a8 ce eee OUR RI iia oo oe ill

Table of Cited Authorities ERE Oe ie a eee Vv

LT eeETEE RELL lh

SE 5 TUS wich oN Sb NS kes weles eevee l

Statement of Jurisdiction .......... SVevgr yw l

Statutory Provision Involved .................. 1

ET GE TO GD eS ce cece eens 1

Reasons for Granting the Petition .............. 4

Improper Interpretation of the FSIA. .......... 4

Improper use of The Act of State Doctrine. .... 5

I. . The FSIA Was Improperly Applied. ....... 5

Contents

Il. The Act Of State Doctrine Does Not Extend

To The Commercial Activity Of A rege

PO adic ho5 6s CES NweasS THI AC

A. The Act of State Doctrine. ......... P

B. The Commercial Activity Exception to

the Act of State Doctrine. Dunhill v.

Cuba, 425 U.S. 682 (1976). .........

The Enactment of FSIA. ............

The Application of the Commercial

Activities Exemption to this case by the

various courts of appeals and district

CU a awh Ris Bea Kis Seek eee

Ill. In Any Event, Even If There Were Some Act

Of State, It Was An Auxiliary, Facilitating

Act

Concerning A Private, Commercial

Agreement And Therefore Not Subj ect To The

Act Of State Doctrine. ..................

Conclusion

The Act of State Must be Public and

Governmental Across the Board. .....

In Any Event, When the “Act” Is

Ancillary To the Core of the Activity, It

Is Not Protected By the Act of State

PEG foo boa awekcesa ers ecwenuss

TABLE OF CITED AUTHORITIES

Page

Cases: ’

Adler v. Federal Republic of Nigeria, 107 F.3d 720

COUGH CUTE cwbsc ccc cuNcbectetes kevn recs 22

Alfred Dunhill of London v. Cuba, 425 U.S. 682

CREE catch cvotnP RN Cah aveceuesmeveceuens 3,7

Alomang v. Freeport-McMoRan, Inc., 1996 WL

GUE OaE Ue EM EPG cbc cteccacsseneceass 15,17

Arango v. Guzman Travel Advisors Corp., 621 F.2d

SITU SUE CE SOUT ce ceheccresececevacttees 16

Banco Nacional de Cuba v. Sabbatino, 376 U.S. 398.

FPR EE ES Fos PRA Sh Fp pie 7

Bank of the United States v. Planters’ Bank of

Georgia, 9 Wheat. 904 (1824) ............... 9

Behring Int'l, Inc. v. Imperial Iranian Air Force,

475 F. Supp. 396 (D.N.J. 1979) .............. 15, 17

Callejo v. Bancomer, S.A., 764 F.2d 1101 (Sth Cir.

ERI aS aan enh Are ati ier acre 16

Drexel Burnham Lambert Group Inc. v. Committee

of Receivers for A.W. Galadari, 810 F. Supp. 1375

(S.D.N.Y. reversed on other grounds, 12 F.3d 317

(2d Cir. 1993)), cert. denied, 511 U.S. 1069, 114

se ee RE SEE eee See aye a 17

Cited Authorities

Page

Dunhill v. Cuba, 425 U.S. 682 (1976) .......... passim

Eckert Int'l, Inc. v. Govt of Sovereign Democratic

Republic of Fiji, 834 F. Supp. 167 (E.D. Va. 1993),

aff'd, 32 F.3d 77 (4th Cir. 1994) .......... 15, 16, 17

Environmental Tectonics v. W.S. Kirkpatrick, Inc.,

847 F.2d 1052 (3d Cir. 1988), aff'd sub nom., WS.

Kirkpatrick & Co. v. Environmental Tectonics

Corp., Int'l, 493 U.S. 400 (1990) ............ 14, 16

Gemini Shipping, Inc. v. Foreign Trade Organization

for Chemicals and Foodstuffs, 647 F.2d 317 (2d

CW, RIOD 65 FR EN eee SNe Caldas Ate eb ae 27, 29

Gilson v. Republic of Ireland, 682 F.2d 1022

CRAs CRB, SIR see tiitin 06 chin 0th beh 64S npn os 27

Grupo Protexa, S.A. v. All American Marine Slip,

20 F.96 1424.6 Cie ISDA) | oiidie ob vein oe ieee 16

Honduras Aircraft Registry, Ltd. v. Government of

Honduras, 129 F.3d 543 (11th Cir. 1997) ...... 17

Hunt v. Mobil Oil Corp., 550 F.2d 68 (2d Cir.), cert.

denied, 434 U.S. 984 (1977) ............00.. 14, 15

Jones v. Petty Ray Geophysical Geosource, Inc., 722

F. Supp. 343 (S.D. Texas 1989), aff'd, 954 F.2d

SOGE COU SUED. bs'a cv cenendneschithd'ok 19

vii

Cited Authorities

Page

Kalamazoo Spice Extraction Co. v. The Provisional

Military Government of Socialist Ethiopia, 729

Pia Gee (ele Cor, BSB) oon ed di ctedecceccs 17

Kirkpatrick v. Environmental Tectonics Corp., Int'l,

493 U.S. 400, 110 S. Ct. 701 (1990) .......... 23

McDonnell Douglas Corp. v. Islamic Republic of

Iran, 758 F.2d 341 (8th Cir. 1985) ............ 15, 20

Millen Industries, Inc. v. Coordination Council for

North American Affairs, 855 F.2d 879 (D.C. Cir.

PEE REAVONCNDARADE Dba bGeNhSRB Cates ebans 21

MOL, Inc. v. Peoples Republic of Bangladesh, 575

F. Supp. 79 (D.Or. 1983), aff'd, 736 F.2d 1326

(9th Cir.), cert. denied, 469 U.S. 1037 (1984) .. 21

MOL, Inc. v. Peoples Republic of Bangladesh, 736

F.2d 1326 (9th Cir.), cert. denied, 469 U.S. 1037

SE Lh cad bosau aah acess dase vaneepneas> 19, 28

National American Corp. v. Federal Republic of

Nigeria, 448 F. Supp. 622 (S.D.N.Y. 1978), aff'd,

597 F.2d 314 (2d Cir. 1979) .......... 14, 15, 17, 24

Practical Concepts, Inc. v. Republic of Bolivia,

811 F.2d 1543 (D.C. Cir. 1987) .. 3, 19, 22, 24, 25, 26

Republic of Argentina et al. v. Weltover, Inc.,

Pe has OE CADPR 9 ce ccccdwcces 13, 14, 21, 22, 23

alenenenes:

Sere Se PT one tee = wy emerge en

vili

Cited Authorities

Page

Republic of the Phillippines v. Marcos, 806 F.2d 344

(2d Cir. 1986), cert. denied, 481 U.S. 1048, 107

is GR ZERO GROOED 608 bd Sacerees discs 14, 15, 20, 21

Sampson v. Fed. Republic of Germany, 975 F. Supp.

1108 (N.D. Hl. 1997) .......... ce eee eee eee 15, 18

Texas Trading & Milling Corp. v. Federal Republic

of Nigeria, 647 F.2d 300 (2d Cir. 1981) ....22, 27, 28

Tifa Ltd. v. Republic of Ghana, 692 F. Supp. 393

NS PRY TT TTT P TOC eT Tee. 24, 27, 28

Transamerican Steamship Corp. v. Somali

Democratic Republic, 767 F.2d 998 (D.C. Cir.

Se er ee ery (aS spe eae eee ree 27

Underhill v. Hernandez, 168 U.S. 250 (1897) ..... 7

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

GH RIeeee ob cedbodienins Scions éeuwueees 15

Virtual Defense and Development International, Inc.

v. Republic of Moldova, 133 F. Supp. 2d 1 (D.D.C.

SOOOD | 8S E 5k boaHis 0 CR eV eh eee ee hieNe. 17

Walter Fuller Aircraft Sales, Inc. v. Republic of the

Phillippines, 965 F.2d 1375 (Sth Cir. 1992) .... 16

Cited Authorities

Page

West v. Multibanco Comermex, S.A., 807 F.2d 820

(9th Cir.), cert. denied, 482 U.S. 906, 107 S. Ct.

2483, reh. denied, 483 U.S. 1040, 108 S. Ct. 10

CTD 550455660 e vee sbaearslhcceds > oWaas 16

Wolf v. Federal Republic of Germany, 95 F.3d 536

(FUVOE, 1DDG) .siicvcccccccvcvevcccccccce’ 16

Wolf v. Federal Republic of Germany, 1995 WL

Se CCID GG 45 barb Widens cece eboesene 16

Statutes:

SN PO idx pi cacducdcbudenceacere 1

PEE She sce b eh ke Uae dedd bed ecentedse l

8 eee TT Te eT TTT ee |

RE cok bike ecandhsaecesicreiene i, 1

Se Chae OF CUP LE, ec vccccncceccovcst lp ote be BO

RI ee eos scode' 11

I EE Whk ost oecbsntacsrbdvnusises 11

EG ED. Sc ta cccescvesccscosenes 11

—_——_—

Cited Authorities

Page

Other Authorities:

Michael J. Bazyler, Abolishing the Act of State

ppetereme, £34 VU: Pa. 1. Bee. S25 noi ccc ksivn 22

H.R. Rep. No. 94-1487, 94th Cong., 2d Sess. 6

(1976), U.S. Code Cong. & Admin. News 1976

TABLE OF APPENDICES

Appendix A — Order Of The United States Court

Of Appeals For The District Of Columbia Circuit

oR 2 en rr esr

Appendix B — Memorandum Opinion And Order

Of The United States District Court For The

District Of Columbia Dated September 27, |

TS SESE IS AA ae

‘

;

Petitioners respectfully petition for a writ of certiorari to

review the judgment of the United States Court of Appeals for

the District of Columbia Circuit in this case.

OPINIONS BELOW

The court of appeals opinion is reported at 296 F.3d 1154.

(1a-29a). The district court’s opinion (per Royce Lamberth, D.J.)

is published at 116 F. Supp. 98. (30a-50a). ~

STATEMENT OF JURISDICTION

The decision of the court of appeals was entered on August

2, 2002.

STATUTORY PROVISION INVOLVED

The provisions of the Foreign Sovereign Immunities Act

28 U.S.C. §§ 1330 and 1602 et seq. (“FSIA”) are relevant to

this petition and are reprinted in the Appendix at 51a-52a.

STATEMENT OF THE CASE

This action claims fraudulent inducement, multiple breaches

of multiple contracts, conversion, conspiracy, unlawful restraint

of trade, tortious interference with contractual rights, and

violations of RICO! and the Sherman and Clayton Acts?, all

arising out of a commercial activity by the Republic of

Kazakhstan.

One single set of facts tincture this entire case. In response

to overtures, agreements, and contracts by respondents

(“Kazakhstan”) in early summer of 1996, petitioners loaned over

$30 million, including interest, to Kazakhstan to resuscitate,

restore and manage, inter alia, the commercial Kazakhstan

uranium industry. This also required providing life sustaining

heating and other services for the 75,000 inhabitants of the

1. Title LX of the Racketeer Influenced and Corrupt Organizations

Act, 18 U.S.C. § 1964(c).

2. 15 U.S.C. § 1 et seg. and 15 U.S.C. § 15 respectively.

nearby City of Stepnogorsk in the winter of 1996-97 which w

done. :

Yet the loans have never been paid back as Kazakhstan agreed

to do. Neither have the interest and management fees been paid as

agreed. And the profits from an agreed-upon joint venture between

Kazakhstan and petitioners to market uranium internationally were

never realized because Kazakhstan — after the investments

had been made — claimed that several years before, in 1992, it

had already granted another company, a New York corporation,

the exclusive right to market uranium in the United States.

This exclusive contract was unknown to petitioners,

because, as the district court found, the existence of this contract

had been kept confidential throughout the course of events.

(33a). Yet, Kazakhstan made a promise in writing, approved by

the Cabinet of Ministers, to negotiate with petitioners an export

license “in good faith”. It also gave petitioners “most favored

investor status”, so that no one would have greater rights than

petitioners, again approved by Kazakhstan’s Cabinet of

Ministers. Nevertheless, the New York broker, with no ability

to process uranium ore, possessed a confidential contract

requiring Kazakhstan to provide it a stated amount of uranium

per year and granting it the exclusive right to sell Kazakhstan

uranium in the United States which constitutes 50% of the world

spot market for processed uraniurn.

It is clear that Kazakhstan knew from the beginning that it

could never have been able to meet its contractual promises to

petitioners. Petitioners allege that Kazakhstan fraudulently

induced petitioners to invest in Kazakhstan and resuscitate and

refurbish its uranium industry based on false statements that

Kazakhstan would pay back the loans, with agreed-upon interest,

pay management fees, and form a joint venture with petitioners

to market the uranium “internationally” and enjoy a 50/50 split

in the profits. Instead, after performing its end of the bargain,

petitioners could only watch as the American brokerage

company took over petitioners’ sales contracts with third parties

and sold the rest of the uranium processed by petitioners, all

with the approval and blessing of respondents.

These important facts — and the inherent injustice — were

either overlooked or ignored by the district court except to say

“this court cannot consider any of the claims against Kazakhstan

or its instrumentalities due to the act of state doctrine.” (39a).

The district court believed that a sovereign state and its related

businesses could ignore amy contractual commercial relationship

in any context at its choosing. The court of appeals affirmed

but on “somewhat different grounds” (2a). The court of appeals

stated:

Although we agree that Kazakhstan waived

sovereign immunity for some of World Wide’s

claims, we conclude that it did not waive immunity

for all of the claims. As to those claims where there

was no waiver, we affirm lack of subject matter

jurisdiction. As to the remaining claims against

Kazakhstan and one of its instrumentalities, we agree

with the district court that the act of state doctrine is

fatal to World Wide’s suit.

2a-3a; 296 F.3d at 1156-57.

To sustain the opinions below invites and encourages

“international hijacking” with impunity and rewrites and

misapplies both the Foreign Sovereign Immunities Act of 1976

(“FSIA”) (28 U.S.C. § 1602 et seq.) and the Act of State Doctrine

as set forth by this Court in a four justice plurality in Alfred

Dunhill of London v. Cuba, 425 U.S. 682 (1976) (“Dunhill”)

(then Mr. Justice Rehnquist participating, Mr. Antonin Scalia

arguing for the proposition on behalf of the United States, and

Mr. Justice Stevens abstaining). It also misapplies the opinion

of then-Judge Ruth Bader Ginsberg in Practical Concepts,

Inc. v. Republic of Bolivia, 811 F.2d 1543 (D.C. Cir. 1987)

The opinions below are not the law. They are not common sense.

And it is terrible public policy that has the potential to shut

down world trade and investment.

Besides ignoring the well-known commercial activities

exception to both the FSIA and the Act of State Doctrine —

terms which are treated as synonymous in this brief although

the basis for FSIA is jurisdictional and the Act of State is judicial

abstention — the court of appeals did not discuss the commercial

contacts between the parties except in the context of the waiver

provision found in the Pledge Agreement and Management

Agreement. Yet the four basic contracts implementing the

commercial venture (the Management Agreement, the Loan

Agreement, the Pledge Agreement and the Strategic Alliance

Agreement) all involved the same commercial activities of

Kazakhstan as were involved in the discussions in the briefs

concerning the Act of State Doctrine.

REASONS FOR GRANTING THE PETITION

If ever there were a case of fraud exercised by a sovereign

nation in the context of commercial activity, this is the case.

Improper Interpretation of the FSIA.

First, as to jurisdiction pursuant to FSIA, the court of

appeals was in error when it found that every document

implementing the commercial activity had to contain a waiver

of immunity even when some of the documents clearly

contained such waivers and referred to the other documents.

This counterintuitive point was never even raised by the

Kazakhstan appellees. Second, the court of appeals then

conveniently ignored the fact that Kazakhstan did not question

the waiver on appeal so the commercial activity exception

provided by FSIA was not at issue. Petitioners’ entire brief dealt

with the commercial activities of Kazakhstan in the context of

the Act of State Doctrine and to say that petitioners’ attorney

“eschewed” that part of the FSIA — is a statement that is

demonstrably untrue. (12a-13a).

Improper use of The Act of State Doctrine.

Third, the courts below were incorrect when they found

that Kazakhstan was immunized from suit because the Act of

State doctrine prevented recovery from a denial of an export

license although Kazakhstan had promised to grant that license

in return for money and other commercial activity. That doctrine

was not applicable in this case because all of the acts of

Kazakhstan fell within the commercial exception to the Act of

State doctrine as enunciated by this Court in Dunhill and

. followed by some courts of appeals, heard by some courts of

appeals but decided upon other grounds, and rejected by only

one court of appeals (Eleventh Circuit). Petitioners do not here

challenge the validity of any truly sovereign act. Moreover, if

any of the acts were sovereign in nature, they were private, not

public, ancillary to the core of the commercial activities, and

entitled to no protection by the Act of State doctrine as Mr.

Justice White stated in Dunhill.

THE FSIA WAS IMPROPERLY APPLIED.

The court of appeals failed to recognize that the commercial

venture in this case was a single commercial deal — it involved

the resuscitation and development of the Kazakhstan uranium

industry and the sale of the uranium internationally. A series of

interrelated contracts was prepared. Two contained a clear

written waiver. For example, the Pledge Agreement, which

protected the Loan Agreement, stated:

To the extent that the Grantor may in any jurisdiction

claim for themselves or their Asserts immunity from

suit ... the Grantor hereby irrevocably agrees not

to claim and hereby irrevocably waives such

immunity for themselves and their Assets to the full

extent permitted by the laws of such jurisdiction with

the intent inter alia that the foregoing waiver of

immunity shall have irrevocable effect for the

purposes of the United States Foreign Sovereign

Immunities Act of 1976 in any legal action or

proceedings to which such Act applies.

The court of appeals in effect held that every single

document and contracts involved in this commercial activity of

Kazakhstan had to contain this waiver, although the Pledge

Agreement was meaningless without the Loan Agreement to

which it referred. Likewise, the Strategic Alliance Agreement

relied upon the Management Agreement which clearly waived

sovereign immunity. The disaggregation of the contractual

relationship was, at best, disingenuous by the court of appeals.

At worst, the logic could require looking separately at each

section of each document. Petitioners submit that this would

stand the FSIA on its head. A fortiori, no cases have been found

supporting this narrow interpretation of waiver under the FSIA.

Finally, the court of appeals erred in finding that counsel

for petitioners waived or eschewed the commercial activities

except to sovereign immunity. This is incorrect. The commercial

activities of Kazakhstan were clearly briefed as to the Act of

State doctrine as well, the subject was never raised by the court’s

in the oral arguments.

Petitioners submit that the narrow reading of the waiver

and commercial activities exceptions to sovereign immunity

emasculates the intent and spirit of the FSIA.

Il.

THE ACT OF STATE DOCTRINE DOES NOT EXTEND

TO THE COMMERCIAL ACTIVITY

OF A FOREIGN SOVEREIGN.

The courts below were in error when they said that the key

issue was the validity of the denial of the export license. Indeed,

petitioners’ argument assumes the denial’s validity. The courts

below did not discuss the applicability of the commercial

activities exception to the Act of State doctrine or FSIA. Nor

did the courts below discuss the fraud or the commercial

contracts that are, inter alia, the heart of this litigation, namely

the Management Agreement, the Loan Agreement, the Pledge

Agreement, and Strategic Alliance Agreement. These are typical

business agreements that do not involve sovereign powers. The

overdue repayment of the commercial loans, the overdue

interest, the unpaid management fees, and the unpaid profits

from the joint venture are all standard commercial transactions

that were never paid, as contractually promised. These

commercial defaults and delinquencies were not acts of

sovereignty nor did they have anything to do with Kazakhstan’s

refusal to issue an export license.

A. The Act of State Doctrine.

In Banco Nacional de Cuba v. Sabbatino, 376 U.S. 398,

416 (1964), this Court reiterated “[t]he classic American

statement of the act of state doctrine”:

Every sovereign state is bound to respect the

independence of every other sovereign State, and

the courts of one country will not sit in judgment on

the acts of the government of another done within

its own territory.

Id. at 416 quoting Underhill v. Hernandez, 168 U.S. 250, 253

(1897).

In 1976, two pivotal events occurred which altered the right

to bring an action in the federal courts against a foreign

sovereign. First was the decision of this Court in Alfred Dunhill

of London, Inc. v. Cuba, 425 U.S. 682 (May 24, 1976). Second

was the enactment of the Foreign Sovereign Immunities Act

(“FSIA”) (28 U.S.C. § 1602 et seg.) effective October 21, 1976,

which endorsed and codified the Court’s decision.

B. The Commercial Activity Exception to the Act of State

Doctrine. Dunhill v. Cuba, 425 U.S. 682 (1976).

In Dunhill, this Court set forth what is now known as the

commercial activity exception to the Act of State doctrine.

This Court held that the failure of Cuba to return to plaintiffs

funds mistakenly paid by plaintiffs for cigars sold to plaintiffs

by certain expropriated Cuban cigar businesses was not an

“Act of State” precluding an affirmative judgment against Cuba

on its commercial debts. Mr. Justice White, writing for a five

member majority, stated that:

No statute, decree, order, or resolution of the Cuban

Government itself was offered in evidence indicating

that Cuba had repudiated its obligations in general

or any class thereof or that it had as a sovereign

matter determined to confiscate the amounts due

three foreign importers.

Id. at 695.

Mr. Justice White then stated for a four member plurality

(including then Mr. Justice Rehnquist, excluding Mr. Justice

Stevens) and argued by Mr. Antonin Scalia that even if there

had been a governmental statute or decree, it would have arisen

in a commercial context and therefore was not an Act of State

that would prevent jurisdiction in the federal courts. Specifically,

Mr. Justice White stated:

If we assume with the Court of Appeals that the

Cuban Government itself had purported to exercise

sovereign power to confiscate the mistaken payments

belonging to three foreign creditors and to repudiate

[Cuba’s] adjudicated obligation to return those funds,

we are nevertheless persuaded by the arguments of

petitioner and by those of the United States that the

concept of an act of state should not be extended to

include the repudiation of a purely commercial

obligation owed by a foreign sovereign or by one of

its commercial instrumentalities.

Id. at 695.

This is a strong statement, but Mr. Justice White explained

that the distinction “between the public and governmental acts

of sovereign states on the one hand and their private and

commercial acts on the other is not a novel approach.” Jd.

In fact, the original State Department’s recommendation for

restricting the Act of State doctrine, the “Tate letter” of 1952,

relied on this traditional distinction between jure imperii (public)

acts and jure gestionis (private) acts of a sovereign. Mr. Justice

White adopted this view, explaining that if the act is one created

out of a commercial venture and not “public” in the sense that

it is a governmental act applying to all of its citizens, the

sovereign is not entitled to the Act of State doctrine. He stated:

It is, we think, a sound principle, that when a

government becomes a partner in any trading

company, it divests itself, so far as concerns the

transactions of that company, of its sovereign

character, and takes that of a private citizen. Instead

of communicating to the company its privileges and

its prerogatives, it descends to a level with those

with whom it associates itself, and takes the character

which belongs to its associates, and to the business

which is to be transacted.

Id. at 695-96, quoting Bank of the United States v. Planters’

Bank of Georgia, 9 Wheat. 904, 907 (1824).

Mr. Justice White then explained that the Court agreed with

the amicus brief filed by the U.S. Solicitor General (written by

Mr. Antonin Scalia) and the letter from the Legal Adviser of the

Department of State that “we do not believe that the Dunhill

case raises an act of state question because the case involves an

act which is commercial and not public, in nature” (omitting

footnotes). Jd. at 696. Mr. Justice White then stated that “Cuba’s

debt to Dunhill arose out of the conduct by Cuba’s agents of a

commercial business for profit” (n.11) and held that the Act of

State doctrine was inapplicable. Jd. at 697 n.11.

_ Finally, it should be noted that Mr. Justice White, and all of

the lower courts that have discussed the issue, explained the

basis for the Act of State doctrine in the first instance, viz:

The major underpinning of the act of state doctrine

is the policy of foreclosing court adjudications

involving the legality of acts of foreign states on

their own soil that might embarrass the Executive

Branch of our Government in the conduct of our

foreign relations. ... But based on the presently

expressed views of those who conduct our relations

with foreign countries, we are in no sense compelled

to recognize as an act of state the purely commercial

conduct of foreign governments in order to avoid

embarrassing conflicts with the Executive Branch.

On the contrary, for the reasons to which we now

turn, we fear that embarrassment and conflict would

more likely ensue if we were to require that the

repudiation of a foreign government’s debts arising

from its operation of a purely commercial business

be recognized as an act of state and immunized from

question in our courts.

Id. at 697-98. (Emphasis supplied).

C. The Enactment of FSIA.

The second event that occurred in 1976 was the enactment

of FSIA, 28 U.S.C. § 1602 et seg. There, the Congress

established a comprehensive framework for determining

whether a court in this country may exercise jurisdiction over a

foreign state. Under FSIA, a “foreign state shall be immune

from the jurisdiction of the courts of the United States and of

the States” unless one of several statutorily defined exceptions

applied. Jd. at § 1604. One exception is when the foreign

sovereign has expressly waived sovereign immunity, as Judge

Lamberth already found in the present case.

Another exception is the “commercial activity” exception

of § 1605(a)(2), derived from Dunhill, which provides that a

foreign state is not immune from suit in any case:

in which the action is based upon a commercial

activity carried on in the United States by the foreign

state; or upon an aci 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.

Id. at § 1605(a)(2).

The term “commercial activity” is defined as:

either a regular course of commercial conduct or a

particular commercial transaction or act. The

commercial character of an activity shall be

determined by reference to the nature of the course

of conduct or particular transaction or act, rather than

by reference to its purpose.

Id. at § 1603(d).

In referring to the definition of commercial activity, the

legislative history is important. There the Congress stated:

“A ‘regular course of commercial conduct’” includes the

carrying on of a commercial enterprise such as a mineral

extraction company .. .” (emphasis supplied.) The Congress

also stated that “[a]s the definition indicates, the fact that goods

or services to be procured through a contract are to be used for

a public purpose is irrelevant; it is the essentially commercial

eeenenmees ape agen Ee

nature of an activity of transaction that is critical.” H.R. Rep.

No. 94-1487, 94th Cong., 2d Sess. 6 (1976), U.S. Code Cong.

& Admin. News 1976, p. 6604.

As to the section dealing with the “commercial activity”

exception to sovereign immunity, Congress, in a footnote to the

House Report, put its imprimatur on this Court’s recent plurality

view in Dunhill. The footnote states in its entirety:

The committee has been advised that in some cases,

after the defense of sovereign immunity has been

denied or removed as an issue, the act of state

doctrine may be improperly asserted in an effort to

block litigation. Under the act of state doctrine,

United States Courts may refuse to adjudicate the

validity of purely public acts of foreign sovereigns,

as distinguished from commercial acts,

committed and effective within their own

territory. For example, in the Supreme Court’s

recent decision in Dunhill v. Republic of Cuba, 44

U.S.L.W. 4665, No. 73-1288 (May 24, 1976), the

respondent having brought suit (and thus clearly

having waived the defense of sovereign immunity)

attempted to assert that a refusal to pay a commercial

obligation was not reviewable because it was an ‘act

of state’.

The committee has found it unnecessary to address

the act of state doctrine in this legislation since

decisions such as that in the Dunhill case

demonstrate that our courts already have

considerable guidance enabling them to reject

improper assertions of the act of state doctrine. For

example, it appears that the doctrine would not apply

to the cases covered by H.R.11315, whose

touchstone is a concept of ‘commercial activity’

involving significant jurisdictional contacts with this

country. The conclusions of the committee are in

concurrence with the position of the government in

its amicus brief to the Supreme Court in the Dunhill

case where the Solicitor General stated:

‘(U]nder the modern restrictive theory of

sovereign immunity, a foreign state is not

immune from suit on its commercial

obligations. To elevate the foreign state’s

commercial acts to the protected status of

‘acts of state’ would frustrate this modern |

development by permitting sovereign

immunity to enter through the back door,

under the guise of the act of state doctrine.’

(Amicus Brief of United States, p. 41, written

by now M. Justice Scalia).

Id. at 6619. (Emphasis supplied).

By the time of the decision in Republic of Argentina et al.

v. Weltover, Inc., 504 U.S. 607 (1992), this entire Court appeared

to accept the definition of the commercial activity exception to

sovereign immunity as required by FSIA. Writing for a

unanimous Court, Mr. Justice Scalia stated that Argentina

unilaterally extended, by use of a Presidential Decree, the time

for payment of official Argentina bonds and offered bondholders

substitute instruments as a means of rescheduling the debts.

The question was whether those actions by the country’s

President nevertheless fell within the FSIA commercial activity

exception to sovereign immunity. Justice Scalia, after discussing

Dunhill’ plurality description of the restrictive theory of

sovereign immunity, stated that:

[w]e conclude that when a foreign government acts,

not as a regulator of a market, but in the manner of a

private player within it, the foreign sovereign’s

actions are “commercial” within the meaning of the

FSIA.

Id. at 614.

D. TheApplication of the Commercial Activities Exemption

to this case by the various courts of appeals and district

courts.

In should be kept in mind that the instant case involves a

purely “for profit” commercial venture to mine, process, and

sell uranium. As part of the complaint there are claims for:

* The repayment of loans which Kazakhstan had

agreed to pay.

¢ — Interest on those loans which Kazakhstan had agreed

to pay.

¢ Payment of management fees which Kazakhstan

had agreed to pay.

¢ Profits from a joint venture Kazakhstan had agreed

to join to sell uranium internationally.

Numerous federal courts have addressed the commercial

activity exception to the Act of State doctrine and it is generally

treated as the same under both FSIA and the Act of State doctrine

although the basis for each is different (jurisdiction for FSIA

and abstention for the Act of State Doctrine). See, e.g., Republic

of the Phillippines v. Marcos, 806 F.2d 344 (2d Cir. 1986), cert.

denied, 481 U.S. 1048 (1987); Hunt v. Mobil Oil Corp., 550

F.2d 68 (2d Cir.), cert. denied, 434 U.S. 984 (1977); Nat’l Amer.

Corp. v. Fed. Republic of Nigeria, 448 F. Supp. 622 (S.D.N.Y.

1978), aff'd, 597 F.2d 314 (2d Cir. 1979) (quoting Dunhill in

that “the concept of an act of state should not be extended to

include the repudiation of a purely commercial obligation.”’);

Environmental Tectonics v. W.S. Kirkpatrick, Inc., 847 F.2d 1052

(3d Cir. 1988), aff'd sub nom., W.S. Kirkpatrick & Co. v.

Environmental Tectonics Corp., Int'l, 493 U.S. 400 (1990);

Eckert Int'l, Inc. v. Gov t of Sovereign Democratic Republic of

Fiji, 834 F. Supp. 167 (E.D. Va. 1993), aff'd, 32 F.3d 77 (4th

Cir. 1994) (stating that “[pJublic and governmental acts of

sovereign states, which are protected by the act of state doctrine,

are distinct from states’ private and commercial acts, which are

not”); Behring Int'l, Inc. v. Imperial Iranian Air Force, 475

F, Supp. 396 (D.N.J. 1979) (citing Dunhill, stating that “[t}he

doctrine does not preclude me from considering the ‘repudiation

of a purely commercial obligation owed by a foreign sovereign

or by one of its commercial instrumentalities’.”); Alomang v.

Freeport-McMoRan, Inc., 1996 WL 601431 (E.D. La. 1996)

(stating that the “act of state doctrine does not apply to the

commercial activities of a foreign government”); Sampson v.

Fed. Republic of Germany, 975 F. Supp. 1108 (N.D. Ill. 1997)

(stating that “(t]he [act of state] doctrine, however, does not

apply to the commercial activities of a sovereign State.”).

As the Eighth Circuit pointed out in McDonnell Douglas Corp.

v. Islamic Republic of Iran, 758 F.2d 341 (8th Cir. 1985):

FSIA recognizes that sovereign immunity ...

should be confined to a foreign sovereign’s truly

governmental acts and not extended to strictly

commercial activities.

Id. at 347, citing to Verlinden B.V. v. Cent. Bank of Nigeria, 461

U.S. 480 (1983). |

To sum up, petitioners submit that guidance from this

Court is needed in this area of the Act of State doctrine and

the FSIA. At the Circuit Court level, the Second Circuit

has embraced the commercial activity exception’ as have the

3. Republic of the Phillippines v. Marcos, 806 F.2d 344

(2d Cir. 1986), cert. denied, 481 U.S. 1048, 107 S. Ct. 2178 (1987);

Hunt v. Mobil Oil Corp., 550 F.2d 68 (2d Cir.), cert. denied, 434 U.S.

984, 98 S. Ct. 608 (1977); National American Corp. v. Federal Republic

of Nigeria, 448 F. Supp. 622 (S.D.N.Y. 1978), aff’d, 597 F.2d 314 (2d

Cir. 1979)

{

}

Fifth* and Third Circuits*. Circuit Courts in the Fourth’,

Seventh’, and Ninth® Circuits have heard cases involving the

exception but have decided upon other grounds while

acknowledging the exception and the possibility of endorsing

it. Four circuits, namely the First, Eighth, Tenth, and the District

of Columbia Circuits do not appear to have yet addressed the

commercial activity exception to the Act of State at all except

4. Walter Fuller Aircraft Sales, Inc. v. Republic of the Phillippines,

965 F.2d 1375, 1388 (Sth Cir. 1992) (“Although public acts lurk in the

background, the act of state doctrine ‘does not preclude judicial resolution

of all commercial consequences stemming from the occurrence . . . of

public acts’.”); Arango v. Guzman Travel Advisors Corp., 621 F.2d 1371,

1381 (Sth Cir. 1980) (the act of state doctrine “does not preclude judicial

resolution of all commercial consequences stemming from the occurrence

of such public acts”); cf Callejo v. Bancomer, S.A., 764 F.2d 1101 (Sth

Cir. 1985) (stating that since Mexico’s actions were not commercial,

there was no need to decide on the commercial activity exception).

5. Environmental Tectonics v. W.S. Kirkpatrick, Inc., 847 F.2d 1052

(3d Cir. 1987), aff’d sub nom. W.S. Kirkpatrick & Co., Inc. v.

Environmental Tectonics Corporation, International, 493 U.S. 400, 110

S. Ct. 701 (1990); Grupo Protexa, S.A. v. All American Marine Slip, 20

F.3d 1224 (3d Cir. 1994) (“sometimes, even though the validity of the

act of a foreign sovereign within its own territory is called into question,

the policies underlying the act of state doctrine may not justify its

application.”)

6. Eckert Int'l, Inc. v. The Government of the Sovereign Democratic

Republic of Fiji, 32 F.3d 77 (4th Cir. 1994).

7. Wolf v. Federal Republic of Germany, 95 F.3d 536 (7th Cir.

1996) (affirming Wolf v. Federal Republic of Germany, 1995 WL 263471,

(N.D. IIL), which stated that “[w]hether such an exception actually exists

has not been decided by the Court. Even if it does, it is not applicable

here because, as we have held Germany’s actions are not commercial.”)

8. West v. Multibanco Comermex, S.A., 807 F.2d 820 (9th Cir.)

cert. denied, 482 U.S. 906, 107 S. Ct. 2483, reh. denied, 483 U.S. 1040,

108 S. Ct. 10 (1987) (stating, “[w]e do not need to reach that issue

here”).

in the case at bar. Only the Eleventh Circuit has rejected the

exception’ while the Sixth Circuit and, now, the D.C. Circuits

have only questioned in dicta whether the Dunhill plurality is

of “precedential value.””'°

On the district court level, the federal district courts have

much more readily endorsed the commercial activity exception.

District courts in the District of Columbia!', Second”, Third’’,

Fourth", Fifth'®, and Seventh'® Circuits have either explicitly

9. Honduras Aircraft Registry, Ltd. v. Government of Honduras,

129 F.3d 543 (11th Cir. 1997). .

10. Kalamazoo Spice Extraction Co. v. The Provisional Military

Government of Socialist Ethiopia, 729 F.2d 422, 425 n.3 (6th Cir. 1984).

11. Virtual Defense and Development International, Inc. v.

Republic of Moldova, 133 F. Supp. 2d 1 (D.D.C. 1999).

12. Drexel Burnham Lambert Group Inc. v. Committee of Receivers —

for A.W. Galadari, 810 F. Supp. 1375 (S.D.N.Y. reversed on other

grounds, 12 F.3d 317 (2d Cir. 1993)), cert. denied, 511 U.S. 1069, 114

S. Ct. 1644) (stating that consistent with the Supreme Court’s holdings

in Dunhill, “[t]he repudiation of the debts owned to [plaintiffs] in this

case is therefore not an act of state”); National American Corp. v. Federal

Republic of Nigeria, 448 F. Supp. 622 (S.D.N.Y. 1978), aff'd, 597 F.2d

314 (2d Cir. 1979) (“the concept of an act of state should not be extended

to include the repudiation of a purely commercial obligation.”).

13. Behring Int'l, Inc. v. Imperial Iranian Air Force, 475 F. Supp.

396 (D.N.J. 1979) (citing Dunhill, stating that “[t]he doctrine does not

preclude me from considering the “repudiation of a purely commercial

obligation owed by a foreign sovereign or by one of its commercial

instrumentalities.”’)

14. Eckert Int’l, Inc. v. Fiji, 834 F. Supp. 167 (E.D. Va. 1993),

aff'd supra, (stating that [p]ublic and governmental acts of sovereign

states, which are protected by the act of state doctrine, are distinct from

states’ private and commercial acts, which are not”).

15. Alomang v. Freeport-McMoRan, Inc., 1996 WL 601431 (E.D.

La.) (stating that “act of state doctrine does not apply to the commercial

activities of a foreign government”). (Cont’d)

or implicitly endorsed the commercial activity exception. Courts

in the First, Eight and Tenth, and Sixth Circuits have not yet

heard cases involving the commercial activity exception.

When Kazakhstan privatized its uranium industry, created

private stockholder corporations, then borrowed money and

engineering management talent, waived sovereign immunity not

once but twice, and then entered into the interrelated commercial!

agreements such as the Loan Agreement, the Pledge Agreement,

the Management Agreement, and the Strategic Alliance

Agreement, it relinquished its sovereign status under the Act of

State doctrine. As this Court stated in Dunhill, “there is nothing

in U.S. law that calls on this Court to recognize as an Act of

State the repudiation of obligations adjudicated in this Court as

arising out of the operation of a commercial business by a

sovereign or one of its instrumentalities.” Dunhill, 425 U.S. at

704.

Simply put, the court below failed to recognize that the Act

of State doctrine was not relevant to this case because no public

official sovereign act of the government of Kazakhstan was

needed to be declared valid or invalid as to the repayment of

the loans, payment of the interest, payment of the management

fees and payment of the loss of profits from the failed joint

venture.

16. Sampson v. Federal Republic of Germany, 975 F. Supp. 1108

(N.D. Ill. 1997) (stating that “[t]he [act of state] doctrine, however, does

not apply to the commercial activities of a sovereign State.”).

iil.

IN ANY EVENT, EVEN IF THERE WERE SOME ACT

OF STATE, IT WAS AN AUXILIARY, FACILITATING

ACT CONCERNING A PRIVATE, COMMERCIAL

AGREEMENT AND THEREFORE NOT SUBJECT TO

THE ACT OF STATE DOCTRINE.

Petitioners recognize that a refusal to grant an export license

in a sterilized setting has been considered an act of state which

the federal courts will not review'’. However, for at least two

reasons, the courts of this country have drawn a distinction

between public and governmental acts (jure imperii) on the one

hand and private and commercial acts (jure gestionis) on the

other. Moreover, this Court has stated that even if there is an act

of state involved in commercial activity, a court should not focus

“on auxiliary provisions rather than on the agreement’s core to

classify the contract at issue as ‘governmental’ rather than

‘commercial’.” Practical Concepts, Inc. v. Republic of Bolivia,

811 F.2d 1543, 1548 (D.C. Cir. 1987).

A. The Act of State Must be Public and Governmental

Across the Board.

As Mr. Justice White stated in Dunhill:

SHO between the public and governmental

acts of sovereign states on the one hand and their

17. For example, we refer to the discussion infra, concerning MOL,

Inc. v Bangladesh, 736 F.2d 1326 (9th Cir. 1984), cert. denied, 469

U.S. 1037 (1984). See, however, Jones v. Petty Ray Geophysical

Geosource, Inc., 722 F. Supp. 343, 347 (S.D. Texas 1989), aff’d, 954

F.2d 1061 (Sth Cir. 1992). There the district court dismissed a FSIA

action stating at 347: “A basic attribute of sovereignty is a nation’s control

over its mineral resources and, short of actually selling these resources

on the world market, decisions and conduct concerning them are

uniquely governmental in nature.” (emphasis supplied).

private and commercial acts on the other is not a

novel approach.

425 USS. at 695.

He further noted that, quoting from the amicus brief filed

by Mr. Antonin Scalia, that the Department of State also agreed:

[W]e do not believe that the Dunhill case raises an

act of state question because the case involves an

act which is commercial and not public, in nature.

(omitting footnotes.)

Id. at 697 and 707.

The courts have repeatedly applied the public aspects of

the requirements set forth in Dunhill. In McDonnell Douglas

Corp. v. Islamic Republic of Iran, 758 F.2d 341 (8th Cir. 1985),

the Eighth Circuit affirmed a judgment against Iran arising out

of McDonnell Douglas’ refusal to fill orders for spare parts for

F-4 fighter planes. The Court held, inter alia, that, although the

transaction involved fighter aircraft, the deal essentially involved

sale of merchandise and therefore, Iran was not entitled to claim

sovereign immunity because: “FSIA . . . should be confined to

a foreign sovereign’s truly governmental acts and not extended

to strictly commercial activities.” Jd. at 348.

In the seminal case of Republic of Philippines v. Marcos,

the Phillippines sought preliminary injunctions concerning

certain real estate allegedly owned by the Marcos family, 806

F.2d 344 (2d Cir. 1986). The Marcoses raised the argument that

the Act of State doctrine prohibited adjudication of the legality

of the acts of a foreign head of state within his own country.

The Second Circuit pointed out the difference between public

acts and private acts. Public acts are those applied across the

board. The Second Circuit stated:

[T]Jhat the acts must be public acts of the sovereign

has been repeatedly affirmed. See Alfred Dunhill of

London, Inc. v. Republic of Cuba, 425 U.S. 682, 694

&n. 10... (noting that in Ricaud v. American Metal

Co., 246 U.S. 304...., Oetjen, supra, and

Underhill, supra, the conduct “was the public act of

those with authority to exercise sovereign powers”

(emphasis added); . . . Hunt v. Mobil Oil Corp., 550

F.2d 73 (2d Cir.) (underscoring that acts must be

“public” and “governmental” for the doctrine to

apply)...

Id. at 358.

In Millen Industries, Inc. v. Coordination Council for North

American Affairs, 855 F.2d 879 (D.C. Cir. 1988), Millen

contracted with CCNAA, an instrumentality of Taiwan, for

Millen to locate a shoe box manufacturing plant on Taiwan and

import raw materials on a duty-free basis. CCNAA promised

Millen only the benefit of existing Taiwanese law but warned

this was subject to change. After building a plant, Taiwan issued

a new regulation canceling duty-free treatment across the board

for all such transactions. This was a public act, done for a

sovereign purpose, not directed at a single commercial

transaction or a single entity engaged in commercial activity

with the sovereign. This Court found that the commercial activity

exception to the FSIA was not applicable to such public activity.

Here, of course, we have private commercial activity in

which Kazakhstan acted as a private party (jure gestionis) with

petitioners over loans, management, reconstruction, and

shipments of commodities. As this Court declared in Westover:

“There is nothing distinctive about the state’s assumption of

debt (other than its purpose) that would cause it to be regarded

as jure imperii ...”. 504 U.S. at 615.

The court below relied upon MOL, Inc. v. Peoples Republic

of Bangladesh, 575 F. Supp. 79 (D.Or. 1983), aff’d, 736 F.2d

1326 (9th Cir.), cert. denied, 469 U.S. 1037 (1984) to find that

the denial of an export license was an act of sovereignty.'*

But that is only the beginning, not the end, of the inquiry.

After all, while the instant case may involve a sovereign

act, so did the Argentine President’s decree in Republic of

Argentina v. Weltover, 504 U.S. 607 (1992) (government bond

repayment delayed); and the most sovereign of all, a trade

embargo ordered by the Nigerian government in Texas Trading

& Milling Corp. v. Federal Republic of Nigeria, 647 F.2d 300

(2d Cir. 1981). Yet in each case the court looked beyond the

threshold state involvement and assumed jurisdiction over the

transaction as a whole.

That is because the courts recognized that most international

business deals can involve governmental action in some form

or another. As we discussed at length above, if the essence

of the deal is the buying and selling of goods and services,

courts do not relinquish jurisdiction merely because some

governmental red tape or even disapproval is involved. Practical

Concepts, Inc. v. Republic of Bolivia, 811 F.2d 1543 (D.C. Cir.

1987).

Justice Scalia, speaking again for a unanimous Court, stated

succinctly, “Act of state issues only arise when a court must

18. MOL was a 1983 attempt by an Oregon district court to establish

a “natural resources” exception to both the act of state and the evolving

commercial activity exception to the FSIA. This effort found little

endorsement except in its own circuit, 736 F.2d 1326 (9th Cir. 1984)

and even there has been subsequently ignored or distinguished.

Adler v. Federal Republic of Nigeria, 107 F.3d 720 (9th Cir. 1997) (even

collecting taxes and issuing governmental decrees do not deprive a court

of jurisdiction under FSIA those state activities are “in connection with”

a commercial activity). MOL also exemplified the early efforts to devise

what one commentator criticized as an unsuccessful “mechanical” system

for determining the applicability of the act of state doctrine. Michael J.

Bazyler, Abolishing the Act of State Doctrine, 134 U. Pa. L. Rev. 325 at

footnotes 264 and 268.

decide — that is, when the outcome of the case tums upon —

the effect of official action by a foreign sovereign. When the

question is not in the case, neither is the act of state doctrine.”

Kirkpatrick v. Environmental Tectonics Corp., Int'l, 493 U.S.

400, 406, 110 S. Ct. 701, 705 (1990) (emphasis in original).

Here, petitioners did not challenge the export license denial.

In fact, if there had been no export control process in Kazakhstan

— as there almost was not'? — the result would have been the

same, because the long-denied, suddenly-revealed prior contract

between Nukem and Kazakhstan contractually prevented the

latter from honoring its obligations to WWM. Since the license

is not in question, therefore, there is no necessity for the Court

to consider the validity of the export license nor of the contract

that underlay it. Therefore, under Kirkpatrick, the act of state

defense is not applicable here.

Once a sovereign steps down from its throne and acts as a

merchant, its private actions (jure gestionis) are deemed

commercial and place it on the same footing as the private

business with which it deals. Dunhill, 425 U.S. at 705-06,

Weltover, 504 U.S. at 614. As such, it and its instrumentalities

are acting as private persons and must bear the consequences of

their actions just as any other commercial enterprise. Loans must

be repaid and agreements honored. The courts should not give

deference to an unseemly shuffle between the throne room and

the marketplace.

19. The Kazakhstan export control law of 1996 called for the

creation of a system headed by an undefined “authorized central

executive body” but a year later one still did not exist. “Concerning the

Export Control of Armaments and Double Designation Production” of

Kazakhstan, 18 June 1996, signed by Pres. N. Nazarbayev (296A-302A).

WWM was therefore referred almost endlessly from one department to

another with conflicting advice until finally told in the summer of 1997

that, procedures aside, no export license could be given because of the

prior contract between Nukem and Kazakhstan.

B. In Any Event, When the “Act” Is Ancillary To the Core of

the Activity, It Is Not Protected By the Act of State Doctrine.

When the act of a sovereign is ancillary or peripheral to the

core of the activity of a deal, the Act of State doctrine does not

apply. See, e.g., Practical Concepts, Inc. v. Republic of Bolivia,

811 F.2d 1543 (D.C. Cir. 1987); National American Corp. v.

Fed. Republic of Nigeria, 448 F. Supp. 622 (S.D.N.Y. 1978),

aff'd, 597 F.2d 314 (2d Cir. 1979); Tifa Lid. v. Republic of

Ghana, 692 F. Supp. 393 (D.N.J. 1988).

In Practical Concepts, the court of appeals was faced with

a situation which involved a breach of a contract for designing

and implementing a comprehensive program for the economic

development of Bolivia’s rural areas by Bolivia. The district

court granted a motion to dismiss on the basis of sovereign

immunity under FSIA. The court of appeals, through then-Judge

Ruth Bader Ginsburg, reversed, on the basis that any sovereign

act of Bolivia was auxiliary to the agreement’s commercial core

with PCL. She stated:

Immunity applied, the district court reasoned,

because the contract between Bolivia and PCI

included “numerous terms which only a sovereign

state could perform, and which no private

firm or individual going into the market place

could ever offer”... . Denying PCI’s motion for

reconsideration, the district court stated: “Where, as

here, a state exempts a private party from taxation,

grants preferential bureaucratic treatment, and

diplomatic privileges, it is acting in a sovereign [as

distinguished from a commercial] capacity.”

Id. at 1548.

She then stated:

We think the district court misperceived the

legislature’s intention when the court focused

on auxiliary provisions rather than on the

agreement’s core to classify the contract at issue as

“governmental” rather than “commercial.: It is more

sensible, and faithful to the probable intent of

Congress, we believe, generally to center on the basic

exchange (e.g., the sale of goods or services), not

on the facilitating features (e.g., expediting entrance

of personnel and supplies), in determining whether

an obligation qualifies as a “commercial activity”

for FSIA purposes.

Id.

Judge Ginsburg recognized that governmental approvals

are involved sometimes in business transactions, so the inquiry

must go further. She elaborated:

The district court crystallized its own analysis by

asking “Is the activity contemplated by [the PCI-

Bolivia] contract activity ‘in which a private person

could engage?” . . . Not in all respects, the district

judge pointed out, for the contract included terms

only a government could perform . . . Those terms,

PCI asserts and we agree, were “incidental” or

auxiliary; they do not denote the essential character

of the agreement.

* * *

Congress did indeed contemplate that courts would

regard as key the question whether the foreign

sovereign’s contract at issue is “of the same character |

as a contract which might be made by a private

person.” ... But the legislature, so far as we can

tell, did not intend that the character of a contract

would turn on its subsidiary rather than its central

prescriptions. The essence of the Bolivia-PCI

contract plainly was the exchange of money for

advice on the development of rural areas. Prompt

provision of documents to facilitate entry of material

and personnel and tax exemptions to simplify PCI’s

receipt of payments from Bolivia, just as plainly,

were auxiliary to the basic exchange. (footnotes

omitted).

Id. at 1550.

Here we have an act that was auxiliary to the contracts

between petitioners and Kazakhstan. The essence of the contracts

was plainly the exchange of money and business talent for the

development of Kazakhstan uranium mines and the sale of

uranium ore internationally. Schedule 2 of the Management

Agreement, which had been specifically approved by the

Cabinet, states that the export license would be granted subject

only to a review of three treaties so as not to violate them. Part

2.3 of Schedule 2 states:

2.3 Uranium Marketing: World Wide shall have

obtained licenses from the Republic of Kazakhstan

to permit World Wide to market freely internationally

all processed uranium and uranium compounds

produced or processed by World Wide or TGK,

subject to controls imposed by the Republic of

Kazakhstan over production in order to comply with

the United Nations Nuclear Non-Proliferation Treaty,

the Safeguards Guidelines of the International

Atomic Energy Agency and other similar

international treaties and agreements. Subject to the

above, World Wide would be free to sell all product

of the Property Complex at free world prices and to

participate freely in the international spot and long

term markets.

Thus, Kazakhstan had already waived any “sovereignty”

concerning an export license except for the ministerial actions

to assure such license complied with certain treaties. Once

waived, this clerical or administrative function could have been

certified by anyone, such as a lawyer or private customs broker,

not just a sovereign nation. By disregarding these repeated

expressions of sovereign intent, the courts below did what they

claim they were forbidden to do — adjudicate the validity of

Kazakhstan’s President and Cabinet of Ministers joint decision

to waive.

As was reiterated in Transamerican Steamship Corp. v.

Somali Democratic Republic, 767 F.2d 998 (D.C. Cir. 1985),

quoting Gilson v. Republic of Ireland, 682 F.2d 1022, 1028

(D.C.Cir. 1982):

[W]e think it ought to be difficult for defendants

engaged in commercial activity with substantial

American contact . . . to invoke successfully

sovereign immunity when sued for underlying ~

commercial misdeeds. This is especially so in view

of the fact that FSIA was written in great measure to

ensure that “our citizens will have access to the

courts in order to resolve ordinary legal disputes.

Id. at 211.

Other courts have focused on the overall transaction as a

whole rather than specific instances of ancillary government

activity. Texas Trading & Milling Corp. v. Federal Republic of

Nigeria, 647 F.2d 300 (2d Cir. 1981); Gemini Shipping, Inc. v.

Foreign Trade Organization for Chemicals and Foodstuffs, 647

F.2d 317 (2d Cir. 1981); Tifa Limited v. Republic of Ghana, 692

F. Supp. 393 (D.N.J. 1988).

In Tifa, a New Jersey corporation brought an action against

Ghana seeking to recover damages arising out of Ghana’s failure

to honor its obligations under a national pesticide project.

In denying Ghana’s motion to dismiss, the court found Ghana’s

activities clearly fell within the FSIA jurisdiction. It stated:

the governmental defendants contend the alleged

contract was conditioned on the government of

Ghana’s exemption of import duties on the shipment

and waiver of the cash margin required by the Bank

of Ghana ... Thus, the governmental defendants

contend the relevant activity is governmental

conduct and thus the commercial activity exception

to the FSIA does not apply.”

* * *

Despite the defendants’ arguments, the gravamen of

Tifa’s complaint is the foreign state defendants’

alleged breach of the express or implied promise to

pay for the chemicals and equipment which Tifa

shipped to Ghana. Although standing alone the

exemption from import duties and waiver of the

mandatory cash margin appear to be governmental

activities, these acts were ancillary to the alleged

promise.

Id. at 401.

The court then explained that its conclusion was bolstered

by the two cited cases. In Texas Trading, the government of

Nigeria embargoed the shipments of concrete and issued orders

regulating entry into Nigerian ports and unilaterally altered the

letters of credit. The Second Circuit did not focus on these

sovereign actions but held them to be ancillary activities by the

Nigerian government as part of an overall commercial contract

for the purchase of concrete.

20. The Ghana defendants cited for this proposition MOL, Inc. v.

Peoples Republic of Bangladesh, 736 F.2d 1326 (9th Cir.), cert. denied,

469 U.S. 1037 (1984), which is dealt with supra.

In Gemini Shipping, an organization wholly owned by the

government of Syria purchased rice from a private American

corporation. Because of certain shipping problems, a related

Syrian governmental organization “guaranteed” payment of the

demurrage cost to the American corporation which shipped the

goods. When the Syrian government organization refused to

pay the demurrage, the shipping company brought an action in

the Southern District of New York against the government

organizations. The court reasoned: “The suit is ‘based upon’

commercial activity because the guarantee was part and parcel

of the rice sale. While, in a narrow sense [the suit] might be

said to be ‘based upon’ only the breach of the guarantee, the

drafters of the FSIA intended no such niggardly construction.”

Id. at 319,

A fortiori, the failure to perform mere clerical duties in this

case, resulting in the denial of an export license, was simply

ancillary to the real commercial core of the transactions and in

which Kazakhstan and its instrumentalities played an integral

part.

CONCLUSION

For the foregoing reasons, the petition for a writ of certiorari

should be granted.

Respectfully submitted,

ANSON M. KELLER

Counsel of Record

MARSHALL LEE MILLER

Baise & MILLer, P.C.

Attorneys for Petitioners

1020 19th Street, N.W.

Suite 400

Washington, D.C. 20036

(202) 331-9100

APPENDIX

APPENDIX A — ORDER OF THE UNITED STATES

COURT OF APPEALS FOR THE DISTRICT OF

COLUMBIA CIRCUIT DATED AUGUST 2, 2002

UNITED STATES COURT OF APPEALS

DISTRICT OF COLUMBIA CIRCUIT

No. 00-7250.

WORLD WIDE MINERALS, LTD., et al.,

Appellants,

REPUBLIC OF KAZAKHSTAN, et al.,

Appellees.

Argued Nov. 8, 2001.

Decided Aug. 2, 2002.

ORDER

Before: GINSBURG Chief Judge, ROGERS and GARLAND,

Circuit Judges.

GARLAND, Circuit Judge:

In 1996 and 1997, World Wide Minerals Ltd., a Canadian

corporation, entered into a series of agreements with the

Republic of Kazakhstan. Pursuant to those agreements, World

Wide took over the management of one of Kazakhstan’s

major uranium complexes and loaned Kazakhstan several

million dollars to fund the restoration of the facility. World

Wide contends that, in return, Kazakhstan agreed (inter alia)

Appendix A

to permit World Wide to export Kazakhstan uranium. World

Wide alleges that Kazakhstan breached its agreements by

failing to issue World Wide a uranium export license and by

seizing its assets in Kazakhstan. World Wide further alleges

fraudulent inducement, tortious interference, conversion,

conspiracy, and violations of the Racketeer Influenced and

Corrupt Organizations Act (RICO), 18 U.S.C. § 1961 et seq.'

The defendants in this case are Kazakhstan and two of

its instrumentalities, as well as Nukem, Inc., a New York

corporation that World Wide contends conspired with

Kazakhstan in committing wrongful acts against World Wide.

The district court concluded that Kazakhstan and its

instrumentalities had waived sovereign immunity against suit,

and that the court therefore had jurisdiction over the claims

against these defendants under the Foreign Sovereign

Immunities Act (FSIA), 28 U.S.C. §§ 1330, 1605(a)(1).

The court nonetheless dismissed those claims pursuant to

the act of state doctrine. The court also dismissed World

Wide’s claims against Nukem, holding that it did not have

personal jurisdiction over that New York corporation because

World Wide’s injuries did not arise out of any act that took

place in the District of Columbia.

We affirm the dismissal of World Wide’s claims against

the Kazakhstan entities, albeit on somewhat different

grounds. Although we agree that Kazakhstan waived sovereign

1. Two of World Wide’s subsidiaries (World Wide Resource

Finance, Inc. and KazUran Corporation), as well as its sales agent

(Nuclear Fuel Resources Corporation), are also plaintiffs in this case.

For the sake of convenience, we refer to the plaintiffs collectively as

World Wide.

Appendix A

immunity for some of World Wide’s claims, we conclude

that it did not waive immunity for all of the claims. As to

those claims where there was no waiver, we affirm dismissal

for lack of subject matter jurisdiction. As to the remaining

claims against Kazakhstan and one of its instrumentalities,

we agree with the district court that the act of state doctrine

is fatal to World Wide’s suit. This conclusion also removes

any substantial federal question with respect to identical

claims against the other instrumentality, a corporation wholly

owned by Kazakhstan. Finally, because the dismissal of the

claims against Nukem was based on a misunderstanding

regarding the date upon which World Wide alleges that

officials of Nukem and Kazakhstan met in the District of

Columbia to conspire against it, we remand those claims to

permit the district court to determine whether the facts are

sufficient to establish personal jurisdiction.

In 1995, the Republic of Kazakhstan issued a decree

announcing the privatization of the country’s uranium

industry and its intention to contract with foreign investors

for the management of previously state-run facilities. Am.

Compl. ¢ 40.? Shortly thereafter, World Wide submitted a

proposal to take over the management of Tselinny Gorno-

Khimicheskii Kombinat (TGK), a state holding company

2. The facts set out in this Part are taken from World Wide’s

amended complaint and documents incorporated by reference therein.

Because we are reviewing the district court’s decision on a motion

to dismiss, we must assume that the allegations of the complaint are

true, although many are disputed by the defendants. See Saudi Arabia

v. Nelson, 507 U.S. 349, 351, 113 S. Ct. 1471, 1474, 123 L. Ed. 2d 47

(1993).

Appendix A

that operated a uranium complex located in the area of

Kazakhstan’s Northern Mines. After a period of negotiation,

the parties entered into the four agreements that are at issue

in this case.

The first agreement was the Management Agreement.

That agreement, signed by World Wide and the State Committee

of the Republic of Kazakhstan on the Management of State

Property (Kazakhstan State Committee) on October 7, 1996,

granted World Wide the right to manage and control the assets

of TGK. Jd. | 56; Management Agreement § 2.11. In return,

World Wide agreed to satisfy TGK’s outstanding debts and

to implement a restructuring program for the uranium

complex. Management Agreement 9¥ 2.11(b), 2.22. The

agreement listed a number of additional points “which have

not been concluded in this Agreement” but which were to be

“addressed in good faith negotiations,” including the granting

of a license to World Wide to export TGK uranium for

international sale. Jd. | 2.17, Sched. 2 § 2.3. World Wide

was entitled to terminate the agreement if Kazakhstan did

not grant it the license by December 16, 1996. Jd. | 2.18.

Although World Wide never received the license, it did not

suspend performance under the contract until April 30, 1997.

Am. Compl. { 73.

On November 14, 1996, Worid Wide, the Kazakhstan

State Committee, and TGK executed a second agreement,

the Loan Agreement. Under that agreement, World Wide

agreed to lend TGK at least $5 million to fund the restoration

and operation of the uranium complex. In the same month,

World Wide took over management of the TGK complex

and began to make loans under the Loan Agreement. Jd.

{7 58, 59, 61.

Appendix A

The third agreement was the Strategic Alliance Agree-

ment, which World Wide entered into with Kazatomprom

on February 28, 1997. Kazatomprom is a corporation, wholly

owned by the Republic of Kazakhstan, that is charged with

managing nuclear energy complexes and promoting the

development of uranium production in Kazakhstan. /d. 4 60.

In the Strategic Alliance Agreement, the parties agreed to

form a joint venture to explore, develop, and mine several

other uranium sources, including deposits in Kazakhstan’s

Southern Mines, and to market uranium from those sources.

Id. { 69. Kazatomprom also agreed to “assist” World Wide

in obtaining a uranium export license from Kazakhstan.

Strategic Alliance Agreement 8.2.

Finally, on March 25, 1997, World Wide, TGK, and the

Kazakhstan State Committee entered into a fourth agreement,

the Pledge Agreement. This agreement gave World Wide a

security interest in the assets and shares of TGK as collateral

for its loans. The Pledge Agreement also prohibited the

transfer of any of the pledged assets or shares. Am. Compl.

{7 70, 85; Pledge Agreement { 5.1.3.

On March 27, 1997, following execution of the Pledge

Agreement, World Wide entered into a contract with

Consumers Energy Company, a Michigan utility, to deliver

approximately $4.1 million worth of Kazakhstan uranium.

In order to fulfill this contract, World Wide needed to receive

an export license by May 30, 1997. By the end of April,

however, World Wide had not received the necessary license,

and, on April 30, it suspended mining operations at the TGK

complex. Am. Compl. ¢¥ 71-73.

Appendix A

In May 1997, in response to its requests for an export

license, a Kazakhstan official told World Wide that Kazakhstan

had previously given another company, Nukem, exclusive

rights to the entire quota of uranium that Kazakhstan was

permitted to export to the United States. That quota was

determined by a Suspension Agreement between the two

countries. Jd. {] 77, 78.° Although World Wide continued to

seek an export license from Kazakhstan, and negotiated

several extensions of its contract with Consumers Energy

pending the grant of such a license, its final extension ran

out on July 4, 1997. On July 10, the contract between World

Wide and Consumers Energy was terminated. World Wide

alleges that, during the period in which it was trying to obtain

a license, Nukem approached Consumers Energy with an

offer to sell it uranium in the event that World Wide failed to

obtain the license, and that subsequently Nukem did sell

Kazakhstan uranium to Consumers Energy. Jd. {¥ 82-84.

3. Kazakhstan had entered into the Suspension Agreement in

return for the United States’ agreement to suspend an antidumping

investigation initiated by the Department of Commerce under the

Tariff Act, 19 U.S.C. § 1673a. See Agreement Suspending the

Antidumping Investigation on Uranium from Kazakhstan

(“Suspension Agreement”), reproduced at 57 Fed. Reg. 49,220,

49,222 (Oct. 30, 1992); Am. Compl. ¥ 33. The Suspension Agreement

specifically provided that uranium exported to the United States

required “export licenses and certificates ... issued in a manner

determined by the Government of Kazakhstan, in accordance with

laws of Kazakhstan.” Suspension Agreement § V.A., 57 Fed. Reg.

at 49,224.

Appendix A

Thereafter, what was left of World Wide’s relationship

with Kazakhstan quickly deteriorated. On August 1, Kazakhstan

terminated the Management Agreement, declaring that World

Wide had failed to fulfill its obligations. It then allegedly

seized $1 million worth of World Wide’s uranium and other

property located at the TGK complex, and forced World

Wide’s employees to leave the country. Jd. J 86-87. Finally,

on October 2, 1997, Kazakhstan issued a decree transferring

all of the assets and shares of TGK to Kazatomprom. /d.

17; Republic of Kazakhstan, Ministry of Finance, Resolution

No. 317 (Oct. 2, 1997) (J.A. at 431).

In May 1998, World Wide sued Kazakhstan, the Kazakhstan

State Committee, Kazatomprom, and Nukem in the United

States District Court for the District of Columbia. In its

eleven-count amended complaint, World Wide alleged

that Kazakhstan and the Kazakhstan State Committee

(collectively Kazakhstan) breached their agreements with

World Wide, fraudulently induced World Wide to enter into

several of the agreements, wrongfully converted its property,

tortiously interfered with its contracts, unlawfully conspired

against it, and committed acts that violated RICO. In addition

to damages for these violations, World Wide sought a

declaratory judgment establishing its “right to market

Kazakhstan uranium under the Suspension Agreement

or otherwise.” Am. Compl. 9 161. World Wide joined

Kazatomprom in most of these counts, and joined Nukem as

a defendant in the counts for tortious interference, conspiracy,

and violation of RICO, and in its request for a declaratory

judgment. Although World Wide alleges various wrongful

Appendix A

conduct, the amended complaint identifies Kazakhstan’s

denial of its application for an export license as “the very

heart of this matter.” Jd. J 157.4

The defendants moved to dismiss World Wide’s amended

complaint, arguing that the court lacked personal and subject

matter jurisdiction, and that the act of state doctrine barred

adjudication of World Wide’s claims. The district court

granted the motions to dismiss, and denied World Wide’s

request to file a second amended complaint as futile. World

Wide Minerals Ltd. v. Republic of Kazakhstan, 116 F. Supp.

2d 98 (D.D.C. 2000). The court began by holding that,

because Kazakhstan had expressly waived its sovereign

immunity in the Pledge Agreement, the FSIA, 28 U.S.C.

§§ 1330(a) & (b), 1605(a)(1), gave the court personal

jurisdiction over Kazakhstan and Kazatomprom and subject

matter jurisdiction over all of World Wide’s claims against

4. The eleven counts, and the defendants to which they apply,

are as follows: Count I, against Kazakhstan and Kazatomprom,

for breach of the Management Agreement; Count II, against

Kazakhstan, for breach of the Loan Agreement; Count III, against

Kazakhstan, for breach of the Pledge Agreement; Count IV, against

Kazatomprom, for breach of the Strategic Alliance Agreement;

Count V, against Kazakhstan and Kazatomprom, for fraud in the

inducement to enter into the Management and Loan agreements;

Count VI, against Kazakhstan and Kazatomprom, for fraud in

the inducement to enter into the Strategic Alliance Agreement;

Count VII, against Kazakhstan and Kazatomprom, for conversion;

Count VIII, against all defendants, for tortious interference with

World Wide’s contracts with its sales agent and Consumers Energy;

Count IX, against all defendants, for civil conspiracy; Count X,

against all defendants, for violation of RICO; and Count XI, against

all defendants, for a declaratory judgment.

Appendix A

them. 116 F. Supp. 2d at 103.° The court concluded, however,

that “granting World Wide relief would require a judgment

on the acts of a sovereign state,” including Kazakhstan’s

failure to grant World Wide an export license and its decision

to expropriate World Wide’s property. Accordingly, the court

held the claims against the Kazakhstan defendants barred by

the act of state doctrine. Jd. at 104.

The district court also dismissed World Wide’s claims

against Nukem, holding that it lacked personal jurisdiction

over the corporation. The court rejected all of the juris-

dictional theories asserted by World Wide, including the

“transacting business” clause of the District of Columbia’s

long-arm statute, D.C. Code § 13-423(a)(1), and “conspiracy

jurisdiction.” The court rejected the latter two theories on

the ground that the only act sufficient to satisfy their

prerequisites took place after World Wide’s injuries had

already been incurred. 116 F. Supp. 2d at 108. World Wide

now appeals.

5. The FSIA grants United States courts both subject matter

and personal jurisdiction (where service of process has been made)

over any claim against a foreign state as to which the state is not

entitled to immunity. 28 U.S.C. § 1330(a), (b). The district court

held that, where one of the FSIA’s exceptions to sovereign immunity

(e.g., waiver) applies, a foreign government and its instrumentalities

are subject to suit without the need to apply the “minimum contacts”

test traditionally used in determining whether the assertion of personal

jurisdiction satisfies due process. 116 F. Supp. 2d. at 102-03. Subse-

quently, this circuit reached the same conclusion with respect to “an

actual foreign government,” but expressed no view as to whether

that conclusion also applied to “other entities that fall within the

FSIA’s definition of ‘foreign state’— including corporations in which

a foreign state owns a majority interest.” See Price v. Socialist People’s

Libyan Arab Jamahiriya, 294 F.3d 82, 99-100 (D.C. Cir. 2002).

10a

Appendix A

We review the district court’s dismissal of World Wide’s

complaint de novo, and must accept the complaint’s

allegations as true for purposes of this appeal. See El-Hadad

v. United Arab Emirates, 216 F.3d 29, 31, 32 n.5 (D.C. Cir.

2000). In doing so, we consider only the allegations of the

(first) amended complaint. Although World Wide indicated

in its notice of appeal that it planned to challenge the district

court’s refusal to permit it to file a second amended complaint,

see Fed.R.Civ.P. 15(a), it failed to do so until its reply brief.

As we have said many times before, a party waives its right

to challenge a ruling of the district court if it fails to make

that challenge in its opening brief. See, e.g., Students Against

Genocide v. Department of State, 257 F.3d 828, 834-35 (D.C.

Cir. 2001); Board of Regents v. EPA, 86 F.3d 1214, 1221

(D.C. Cir. 1996); see also Terry v. Reno, 101 F.3d 1412, 1415

(D.C. Cir. 1996) (holding that where the appellants iisted

challenges in the “Statement of Issues,” but failed to brief

them, the challenges were waived).

World Wide contends that none of the defendants’

motions to dismiss should have been granted. In response,

Kazakhstan, Kazatomprom, and Nukem assert that the district

court was correct in ruling that a variety of threshold

obstacles, including sovereign immunity, the act of state

doctrine, and lack of personal jurisdiction, barred World

Wide’s claims. In the following three Parts, we address the

issues relating to each defendant separately.

lla

Appendix A ~

World Wide’s amended complaint levels ten of its eleven

charges against Kazakhstan (including the Kazakhstan State

Committee). They are: Count I (breach of the Management

Agreement), Count II (breach of the Loan Agreement), Count

II (breach of the Pledge Agreement), Count V (fraud in the

inducement to enter into the Management and Loan agree-

ments),° Count VI (fraud in the inducement to enter into

the Strategic Alliance Agreement), Count VII (conversion),

Count VIII (tortious interference), Count IX (civil conspiracy),

Count X (violation of RICO), and Count XI (declaratory

judgment). In Part III.A, we conclude that the district court

lacked subject matter jurisdiction over seven of these counts,

because Kazakhstan has sovereign immunity against their

adjudication in United States courts. In Part III.B, we conclude

that the remaining three counts were properly dismissed

pursuant to the act of state doctrine.

We turn first to whether the district court was correct in

concluding that it had subject matter jurisdiction over all of

World Wide’s claims against Kazakhstan. See Jn re Papandreou,

139 F.3d 247, 254-56 (D.C. Cir. 1998) (holding that juris-

diction must be resolved before applying the act of state

6. Although the title of this count also alleges fraud in the

inducement to enter into the “Preliminary Agreement,” neither the

count nor World Wide’s briefs allege any damages or make any

argument relating to that agreement, and we therefore give it no

independent consideration.

12a

Appendix A

doctrine, because that doctrine is “‘a substantive rule of law’”’).’

The FSIA is “the sole basis for obtaining jurisdiction over a

foreign state in our courts.” Argentine Republic v. Amerada Hess

Shipping Corp., 488 U.S. 428, 434, 109 S. Ct. 683, 688, 102

L. Ed. 2d 818 (1989). Under the FSIA, a district court has

jurisdiction over a civil action against a foreign state for any

claim “with respect to which the foreign state is not entitled to

immunity.” 28 U.S.C. § 1330(a). The Act provides that a foreign

state is generally immune from the court’s jurisdiction unless

one of the exceptions listed in the statute applies. Jd. §§ 1604,

1605; Verlinden B.V. v. Central Bank of Nigeria, 461 U.S. 480,

488-89, 103 S. Ct. 1962, 1968-69, 76 L. Ed. 2d 81 (1983).°

In the district court, World Wide argued that the court

had subject matter jurisdiction under two FSIA exceptions:

the waiver exception, 28 U.S.C. § 1605(a)(1), and the

commercial activity exception, id. § 1605(a)(2). In its briefs

on appeal, however, World Wide did not argue that the

commercial activity exception was applicable, relying instead

7. In its reply brief, World Wide argues that we cannot review

the district court’s finding of subject matter jurisdiction because the

appellees “failed to cross-appeal on this issue.” World Wide Reply

Br. at 11. To the contrary, we have an independent responsibility to

consider that question. See Steel Co. v. Citizens for a Better Envt,

523 U.S. 83, 95, 118 S. Ct. 1003, 1012-13, 140 L. Ed. 2d 210 (1998).

8. World Wide does not dispute that the Kazakhstan State

Committee is an “agency or instrumentality of a foreign state” within

the meaning of the FSIA. 28 U.S.C. § 1603(a), (b); see World Wide

Br. at xiii. As such, like Kazakhstan, the State Committee is entitled

to immunity unless one of the statute’s enumerated exceptions applies.

Id. § 1604.

13a

Appendix A

on the waiver exception.’ And at oral argument, World Wide

eschewed any reliance on the FSIA’s commercial activity

exception. Accordingly, we limit our inquiry to whether the

district court had jurisdiction by virtue of Kazakhstan’s waiver

of immunity.'° Under the FSIA’s waiver exception, a state is

not immune from suit in any case “in which the foreign state

has waived its immunity either explicitly or by implication.”

Id. § 1605(a)(1). World Wide does not rely on a theory of implied

waiver, but rather on the explicit waivers of sovereign immunity

contained in the Pledge and Management agreements.!!

9. This was so despite the fact that Kazatomprom devoted a

substantial portion of its brief to arguing against the applicability of

the commercial activity exception. See Kazatomprom Br. at 14-24.

10. The defense of sovereign immunity may be raised at any

time because, if valid, it means that the court lacks power to hear the

case. See Steel Co., 523 U.S. at 94-95, 118 S. Ct. at 1012-13. Achallenge

to sovereign immunity, by contrast, is an argument that can be waived.

See Watters v. Washington Metro. Area Transit Auth., No. 01-7092,

slip. op. at 7n.13 (D.C. Cir. July 17, 2002) (holding that a claim that

sovereign immunity has been waived is itself waived if not argued

on appeal).

11. As we have previously noted, the “FSIA does not define

an implied waiver.” Creighton Ltd. v. Government of the State of

Qatar, 181 F.3d 118, 122 (D.C. Cir. 1999). This circuit, however,

has “followed the ‘virtually unanimous’ precedents construing the

implied waiver provision narrowly.” Jd. (quoting Shapiro v. Republic

of Bolivia, 930 F.2d 1013, 1017 (2d Cir. 1991)). Courts have found

implied waiver where a foreign state has filed a responsive pleading

without raising the defense of sovereign immunity. Jd. at 123. They

have also found implied waiver where the state has agreed to arbitrate

or to adopt a particular choice of law, under circumstances not present

in this case. Jd.; see id. at 122 (“ ‘[MJost courts have refused to find

(Cont'd)

14a

Appendix A

In general, explicit waivers of sovereign immunity are

narrowly construed “in favor of the sovereign” and are not

enlarged “beyond what the language requires.” Library of

Cong. v. Shaw, 478 U.S. 310, 318 (1986) (internal quotation

marks omitted); see Watters v. Washington Metro. Area

Transit Auth., No. 01-7092, slip. op. at 5, 2002 WL 1484943

*1 (D.C. Cir. July 12, 2002) (requiring “clear and unequi-

vocal” waiver); Forman v. Small, 271 F.3d 285, 296 (D.C.

Cir. 2001). A foreign sovereign will not be found to have

waived its immunity unless it has clearly and unambiguously

done so. See Aquamar S.A. v. Del Monte Fresh Produce N.A.,

Inc., 179 F.3d 1279, 1292 (11th Cir. 1999) (“An express

waiver under section 1605(a)(1) must give a clear, complete,

unambiguous, and unmistakable manifestation of the

sovereign’s intent to waive its immunity.” (internal quotation

marks omitted)); see also Maritime Int’l Nominees

Establishment v. Republic of Guinea, 693 F.2d 1094, 1100

n.10 (D.C. Cir. 1982) (holding that under the FSIA, Congress

contemplated waivers of a “specific and explicit nature”).

(Cont'd) ;

an implicit waiver of immunity to suit in American courts from a

contract clause providing for arbitration in a country other than the

United States.’ ” (quoting Frolova v. Union of Soviet Socialist

Republics, 761 F.2d 370, 377 (7th Cir. 1985))); id. at 126 (holding

“that Qatar did not, by agreeing to arbitrate in France, waive its

sovereign immunity under § 1605(a)(1)”). As we have also noted,

“ “courts have been reluctant to stray beyond these examples when

considering claims that a nation has implicitly waived its defense of

sovereign immunity.’ ” Princz v. Federal Republic of Germany,

26 F.3d 1166, 1174 (D.C. Cir. 1994) (quoting Frolova, 761 F.2d at 377).

12. Cf. C&L Enters., Inc. v. Citizen Band Potawatomi Indian

Tribe, 532 U.S. 411, 418, 421 n.3, 423, 121 S. Ct. 1589, 1594, 149

(Cont'd)

15a

Appendix A

There is no question that Kazakhstan clearly indicated

its intent to waive its immunity for the claims contained in

Count I (breach of the Management Agreement) and Count

III (breach of the Pledge Agreement), as both the Management

and Pledge agreements contain express waivers of sovereign

immunity—the latter referring specifically to the FSIA.” But

the district court further held that the waiver in the Pledge

Agreement indicated Kazakhstan’s intention to waive

immunity for World Wide’s entire lawsuit. As to this we

cannot agree. Neither the waiver in the Pledge Agreement,

nor that in the Management Agreement, describes the kind

of claims for which Kazakhstan waived immunity. And there

is nothing “clear and unambiguous” about either waiver other

than that each extends to claims for breach of the agreement

(Cont’d)

L. Ed. 2d 623 (2001) (holding that “to relinquish its immunity, a tribe’s

waiver must be clear” and “not ambiguous,” and finding instructive

“the law governing waivers of immunity by foreign sovereigns”

(internal quotation marks omitted)).

13. The Management Agreement states: “In respect of any

arbitration or legal action or proceedings arising out of or in

connection with this Agreement, ... [the Kazakhstan State

Committee] hereby irrevocably agrees not to claim and hereby

irrevocably waives ... immunity for itself and the assets of the

Republic of Kazakstan to the full extent permitted by the laws of

such jurisdiction.” Management Agreement § 6.4. The Pledge

Agreement states: “[T]he Grantor [defined as Kazakhstan and TGK]

hereby irrevocably agrees not to claim and hereby irrevocably waives

. immunity for themselves and their Assets to the full extent

permitted by the laws of such jurisdiction with the intent inter alia

that the foregoing waiver of immunity shall have irrevocable effect

for the purposes of the [FSIA] in any legal action or proceedings to

which such Act applies.” Pledge Agreement § 19.5. :

l6a

Appendix A

in which it is contained.'* We see nothing in these waivers to

indicate that they extend to breaches of the two other agree-

ments at issue in this case (the Loan and Strategic Alliance

agreements), neither of which contains a waiver of its own.

Indeed, the fact that only two of the four agreements

contain waivers is particularly significant in creating ambiguity.

Although it could be argued that the parties saw no need for

repetition once a waiver was made in the Management

Agreement, which was the first of the four, that does not

explain why they thought it necessary to include a waiver in

the Pledge Agreement, which was the last. Moreover,

regardless of what could be argued, the fact is that the

presence of waivers in only two of four agreements creates

real ambiguity as to Kazakhstan’s intent. Cf. Marra v.

Papandreou, 216 F.3d 1119, 1123 (D.C. Cir. 2000) (“If the

Greek government were sued by Marra for breach of two

different contracts, it certainly would have the prerogative

to waive a sovereign immunity defense with respect to one

of the contracts and invoke that defense for the other.”).

14. Supporting the conclusion that the waivers do not apply to

all of World Wide’s claims is the fact that each of these agreements

contains a provision limiting the agreement’s scope. The Management

Agreement states that “[t]he subject of this Agreement shall be the

transfer to World Wide of the right to manage, control, use and own

the State-owned or controlled block of shares in [TGK].” Management

Agreement § 1. And the Pledge Agreement includes an integration

clause stating that “[t}his Pledge Agreement constitutes and contains

the entire agreement of the parties.” Pledge Agreement § 21.1.

Although the Pledge Agreement grants World Wide a security interest

in TGK shares and assets, id. | 2.1, it does not itself include an

agreement to repay World Wide’s loans to TGK.

17a

Appendix A

So, too, do provisions in both the Loan and Strategic Alliance

agreements that suggest Kazakhstan did not contemplate that

disputes over those agreements would be resolved in United

States courts, but rather by arbitration in Kazakhstan and

Sweden.'*

Nor do we see evidence that, by waiving immunity for

claims for breach of the Management and Pledge agreements,

Kazakhstan unambiguously intended to expose itself to the

miscellany of tort and tort-like claims with which World Wide

has charged it. Unlike the claims for breach of those two

contracts, which arise out of consensual agreements containing

waivers of immunity, the tort claims arise out of exogenous

law. Indeed, in this case that law is truly “exogenous.” World

Wide seeks application of the law of the United States

(including RICO), see World Wide Opp’n to Mot. to Dismiss,

notwithstanding that no American national was a party to

any of the four agreements, and notwithstanding that each

agreement declares that it “shall be governed by and

construed in accordance with the laws of Kazakhstan.”

Management Agreement 4 6.1; Pledge Agreement 18.1;

15. See Strategic Alliance Agreement § 9.3 (“If any dispute or

difference arises out of or in connection with any matter in relation

to this Strategic Alliance Agreement . . . , the same shall be arbitrated

between the Parties and the arbitration shall be conducted ...

in Almaty, Kazakhstan.”); Loan Agreement 4 4.2 (“If any default or

dispute or difference . . . arises out of or in connection with any matter

or thing in relation to the provisions of this Agreement, . . . any party

may submit the Dispute to be settled by arbitration . . . conducted in

Stockholm, Sweden. . . .”). Although an agreement to arbitrate may

in some circumstances constitute an implied waiver of sovereign

immunity, this is not such a circumstance and World Wide does not

contend that it is. See supra note 11 and accompanying text.

18a

Appendix A

Loan Agreement ¥ 4.1; Strategic Alliance Agreement 9.2."°

Plaintiff makes no argument and cites no cases that support

extending the waivers to these kinds of claims, and analogous

cases are to the contrary."’

In sum, we find that Kazakhstan clearly and unambi-

guously waived its sovereign immunity only for claims of

breach of the Management and Pledge agreements, and we

therefore hold that the district court only had jurisdiction to

hear counts that make such claims. Those counts are Count I

(breach of the Management Agreement) and Count III (breach

of the Pledge Agreement), as well as Count XI (declaratory

16. Kazakhstan’s contention that as a civil law jurisdiction it

does not recognize common law torts, may be still further evidence

that Kazakhstan did not intend to waive immunity for tort claims

like those asserted here. See Kazakhstan Mot. to Dismiss for Failure

to State a Claim, at 9-10. In light of the significant ambiguities

concerning waiver noted in the text, we need not rely on this point to

decide this case, and hence need not consider Kazakhstan’s

representation regarding its legal system. We note, however, that

World Wide did not dispute that representation. See World Wide

Opp’n to Mot. to Dismiss.

17. Cf. Hercules, Inc. v. United States, 516 U.S. 417, 423, 116

S. Ct. 981, 985-86, 134 L. Ed. 2d 47 (1995) (holding that the Tucker

Act’s waiver of sovereign immunity for contract claims does not

extend to claims for contracts implied in law); Watters, slip op. at 5-7

(concluding that the WMATA Compact’s waiver of immunity for

contracts and torts does not extend to attorney’s liens); Doe v.

Civiletti, 635 F.2d 88, 94-95 (2d Cir. 1980) (holding that the Tucker

Act’s waiver does not extend to statutory claims); Rodenbur v.

Kaufmann, 320 F.2d 679, 683-84 (D.C. Cir. 1963) (holding that a

lease’s waiver of trial by jury for “any matters whatsoever arising

out of or in any way connected with this lease” did not extend to a

tort claim).

19a

Appendix A

judgment) to the extent that it seeks a declaration that

Kazakhstan breached the Management Agreement.'* As for

all of the other claims against Kazakhstan, there has been no

waiver, and we therefore affirm their dismissal for lack of

subject matter jurisdiction.

Having concluded that the district court had subject

matter jurisdiction over the claims in Counts I, III, and XI,

we now turn to Kazakhstan’s contention that another

threshold objection—the act of state doctrine—bars

adjudication of those counts. Although ordinarily we would

first examine the validity of the district court’s decision that

it had personal jurisdiction over Kazakhstan, see Papandreou,

139 F.3d at 254-56, Kazakhstan does not dispute that decision

on appeal. Unlike subject matter jurisdiction, a party waives

the right to dispute personal jurisdiction by failing to contest

it on appeal. See Spann v. Colonial Village, Inc., 899 F.2d

24, 32-33 (D.C. Cir. 1990).

The act of state doctrine “precludes the courts of this

country from inquiring into the validity of the public acts a

recognized foreign sovereign power committed within its own

18. In Count XI, World Wide asks the court to declare that it

“had the right to market Kazakhstan uranium under the Suspension

Agreement.” Am. Compl. 4 161. Since World Wide obtained this

right, if at all, under the Management Agreement, we construe

Count XI as a request for a declaration that Kazakhstan breached

that agreement by not granting World Wide an export license. To the

extent that this relatively opaque count asserts other claims,

Kazakhstan has not waived its immunity and the district court

was without jurisdiction to entertain them.

20a

Appendix A

territory.” Banco Nacional de Cuba v. Sabbatino, 376 U.S. 398,

401, 84S. Ct. 923, 926, 11 L. Ed. 2d 804 (1964). It is applicable

when “the relief sought or the defense interposed would [require]

a court in the United States to declare invalid the official act of

a foreign sovereign performed within” its boundaries. W.S.

Kirkpatrick & Co., Inc. v. Environmental Tectonics Corp., 493

U.S. 400, 405, 110 S. Ct. 701, 704, 107 L. Ed. 2d 816 (1990).

When it does apply, the doctrine serves as “ ‘a rule of decision

for the courts of this country,’ ” id. at 405, 110 S.Ct. at 704

(quoting Ricaud v. American Metal Co,., 246 U.S. 304, 310,

38 S. Ct. 312, 314, 62 L. Ed. 733 (1918)), which requires that,

“in the process of deciding [a case], the acts of foreign sovereigns

taken within their own jurisdictions shall be deemed valid,” id.

at 409, 110 S.Ct. at 707. Although the Supreme Court’s

description of the jurisprudential rationale for the doctrine has

evolved over the years, the Court has most recently described it

“as a consequence of domestic separation of powers, reflecting

‘the strong sense of the Judicial Branch that its engagement in

the task of passing on the validity of foreign acts of state may

hinder’ the conduct of foreign affairs.” Jd. at 404, 110 S. Ct.

at 704 (quoting Sabbatino, 376 U.S. at 423, 84 S. Ct. at 938).

The policies underlying the doctrine include “international

comity, respect for the sovereignty of foreign nations on their

own territory, and the avoidance of embarrassment to the

Executive Branch in its conduct of foreign relations.” Jd. at 408,

110 S. Ct. at 706; see id. at 409, 110 S. Ct. at 706-07.

The gravamen of Count I is a claim that Kazakhstan

breached the Management Agreement by “failing to issue an

export license” to World Wide. Am. Compl. ¢ 93. Count XI

seeks a declaratory judgment for breach of that agreement,

and declares that “the denial of Plaintiff[’}s export license”

is “the very heart of this matter.” Jd. at ¢ 157. We have no

2la

Appendix A

doubt that issuance of a license permitting the removal of

uranium from Kazakhstan is a sovereign act. As we have

previously held in the context of the FSIA, the “right to regulate

imports and exports is a sovereign prerogative.” Millen

Indus., Inc. v. Coordination Council for North Am. Affairs,

855 F.2d 879, 885 (D.C. Cir. 1988) (internal quotation marks

and alteration omitted); see Int'l Ass'n of Machinists v.

OPEC, 649 F.2d 1354, 1361 (9th Cir. 1981) (affirming

“the principle of supreme state sovereignty over natural

resources” in applying the act of state doctrine); cf. Rush-

Presbyterian-St. Luke's Med. Ctr. v. Hellenic Republic,

877 F.2d 574, 578 (7th Cir. 1989) (holding that “a contract

whereby a foreign state grants a private party a license to

exploit the state’s natural resources is not a commercial

activity [under the FSIA], since natural resources, to the

extent they are ‘affected with the public interest,’ are goods

in which only the sovereign may deal”); MOL, Inc. v. Peoples

Republic of Bangladesh, 736 F.2d 1326, 1328 (9th Cir. 1984)

(holding that “licensing the exploitation of natural resources

is a sovereign activity” under the FSIA).

Because the relief sought here would require us to question

the “legality” of Kazakhstan’s denial of the export license

by ruling that denial a breach of contract,'® the act of state

doctrine applies. Kirkpatrick, 493 U.S. at 405, 110 S. Ct. at 704.

Moreover, this is plainly a case in which the policies

underlying the doctrine “justify its application,” id. at at 409,

110 S. Ct. at 706, since questioning the export control policies

19. If anything, the specific relief sought in Count XI challenges

the validity of Kazakhstan’s actions even more directly, as it asks the

court to declare that, despite the absence of a license, World Wide

had “the right to market Kazakhstan uranium.” Am. Compl. { 161.

22a

Appendix A

of a foreign state would both disrupt international comity

and interfere with the conduct of foreign relations by the

Executive Branch. Cf. Clayco Petroleum Corp. v. Occidental

Petroleum Corp., 712 F.2d 404, 408 (9th Cir. 1983) (“[I]t is

clear that judicial scrutiny of sovereign decisions allocating

the benefits of oil development would embarrass the political

branches of our goveriment in the conduct of foreign policy.”).

Indeed, as the amended complaint reveals, both the export of

Kazakhstan uranium to the United States and the use of

licenses to control the quantity of such exports are the subjects

of diplomatic efforts by the Executive. See supra note 3 and

accompanying text. Accordingly, we conclude that the claims

asserted in Counts I and XI must fail as a consequence of the

act of state doctrine, and we therefore affirm the dismissal

of those counts.

Our analysis of Count III is the same. In that count, World

Wide alleges that Kazakhstan breached the Pledge Agreement

by “transferring the shares of TGK to Kazatomprom and by

converting all pledged property, assets and interests for [its]

own use.” Am. Compl. § 103. The amended complaint makes

clear that this transfer and alleged conversion were accomplished

pursuant to an official decree of the Republic of Kazakhstan.

Id. § 17; see Republic of Kazakhstan, Ministry of Finance,

Resolution No. 317 (Oct. 2, 1997) (J.A. at 431). That kind of

expropriation of property is the classic act of state addressed in

the case law. And as the Supreme Court declared in Sabbatino,

“the Judicial Branch will not examine the validity of a taking of

property within its own territory by a foreign sovereign

government.” 376 U.S. at 428, 84S. Ct. at 940; see id. at 430,

439, 84 S. Ct. at 941, 946; Riggs Nat'l Corp. v. Comm’r of

Internal Revenue Serv., 163 F.3d 1363, 1367 (D.C. Cir. 1999)

23a

Appendix A

(citing Sabbatino, 376 U.S. at 403-04, 84S. Ct. at 927); Dayton

v. Czechoslovak Socialist Republic, 834 F.2d 203, 206 (D.C.

Cir. 1987); Empresa Cubana Exportadora v. Lamborn & Co.,

652 F.2d 231, 237-38 (2d Cir. 1981); Hunt v. Mobil Oil,

550 F.2d 68, 73 (2d Cir. 1977). Because Count III would

require the court to undertake just such an examination,

we affirm its dismissal.

At oral argument, World Wide acknowledged that both

the denial of export licenses and the expropriation of property

are sovereign acts under the act of state doctrine. It none-

theless contended that this case comes within an exception

to that doctrine for “commercial activity.” The existence of

such an exception is an unsettled question that this court has

never addressed.”° Nor need we do so today.

In claiming the benefit of the exception here, World Wide

contends that its claims are not based on Kazakhstan’s

expropriation of its assets or on its denial of an export license,

but rather on the following “purely” commercial conduct:

1) Kazakhstan’s failure to repay loans and interest; 2) its

refusal to enter into a joint venture with World Wide; and

3) its failure to pay management fees. World Wide Br. at 24,

26. However, the first of these claims is made only in Count

II (breach of the Loan Agreement)—a count that we have

already held must be dismissed for lack of subject matter

jurisdiction. The second is made only in Count IV (breach of

20. See Kirkpatrick, 493 U.S. at 404-05, 110 S. Ct. at 704 (noting

that “some Justices have suggested” a possible exception for commercial

activity, but finding it unnecessary to consider the question to resolve

the case); Alfred Dunhill of London, Inc. v. Cuba, 425 U.S. 682, 695,

96 S. Ct. 1854, 1861-62, 48 L. Ed. 2d 301 (1976) (plurality opinion of

White, J., adopting commercial activity exception).

24a

Appendix A

the Strategic Alliance Agreement), which does not name

Kazakhstan as a defendant (and for which there was also no

waiver of sovereign immunity). And the third is not made

anywhere in the complaint—not even in what would seem

the most likely place, Count I (breach of the Management

Agreement). We, therefore, have no cause to address World

Wide’s contention that its claims fall within a commercial

activity exception to the act of state doctrine.

In sum, we conclude that, although the district court had

subject matter jurisdiction over three claims against

Kazakhstan (Counts I, I, and X1), all three must nonetheless

be dismissed under the act of state doctrine.

In addition to naming Kazakhstan as a defendant, most

of the counts of the amended complaint also name

Kazatomprom, a corporation wholly owned by Kazakhstan.”!

World Wide does not dispute that Kazatomprom is an

instrumentality of Kazakhstan. World Wide Br. at xiii;

see 28 U.S.C. § 1603(b) (providing that an “instrumentality

of a foreign state” includes any corporation, “a majority of

whose shares or other ownership interest is owned by a

foreign state”). As a consequence, Kazatomprom is entitled

to the immunity of the sovereign. See 28 U.S.C. §§ 1603(a),

1604; NYSA-ILA Pension Trust Fund v. Garuda Indonesia,

7 F.3d 35, 38 (2d Cir. 1993) (“A defendant corporation that

21. See supra note 4 for a list of the counts. Kazatomprom is

not named in Count II (breach of the Loan Agreement) or Count III

(breach of the Pledge Agreement). It is the sole defendant in Count

IV (breach of the Strategic Alliance Agreement).

25a

Appendix A

is owned entirely by a foreign state also is considered to be a

distinct foreign state and immune from the jurisdiction of

the federal courts.”). Thus, for the same reasons discussed

in Part III.A, the district court lacked jurisdiction to consider

against Kazatomprom any of the counts of the amended

complaint other than those alleging breaches of the only two

agreements containing waivers of immunity: the Management

and Pledge agreements. And because Kazatomprom is not a

defendant in Count III (breach of the Pledge Agreement),

that leaves only Count I (breach of the Management

Agreement) and Count XI (declaratory judgment, limited to

breach of the Management Agreement).”

Our decision in Part III.B also effectively disposes of

those two remaining counts. In that part, we held that because

the gravamen of both Counts I and XI is an attack on

the legality of Kazakhstan’s refusal to grant World Wide

an export license, those counts are barred—as against

Kazakhstan—by the act of state doctrine. And since World

Wide offers no reason to distinguish between Kazakhstan

and Kazatomprom for purposes of the application of that

doctrine,”” our holding in Part III.B dispositively resolves

the identical claims against Kazatomprom. This means that

there is no substantial federal question as to World Wide’s

22. Although we did not directly address Count IV (breach of

the Strategic Alliance Agreement) in Part III.A since Kazakhstan was

not named as a defendant in that count, the analysis of that Part applies

because the Strategic Alliance Agreement does not contain a waiver

of sovereign immunity. The district court therefore lacked subject

matter jurisdiction over that count.

23. Nor does the amended complaint distinguish between the

two in these counts.

26a

Appendix A

claims against Kazatomprom. And because in the absence of

a substantial federal question the district court lacks jurisdiction,

we may affirm the dismissal of these counts as well for lack

of jurisdiction. See Steel Co. v. Citizens for a Better Envt,

523 U.S. 83, 98-99, 118 S. Ct. 1003, 1014, 140 L. Ed. 2d 210

(1998) (noting that the Court has regarded a judgment

against a plaintiff, entered because the same issue had been

“dispositively resolved” in a companion case, as “equivalent

to a jurisdictional dismissal for failure to present a substantial

federal question” (citing Norton v. Mathews, 427 U.S. 524,

530-31, 96 S. Ct. 2771, 2774-75, 49 L. Ed. 2d 672 (1976))).

Finally, we turn to the district court’s decision to dismiss

World Wide’s claims against Nukem. The amended complaint

names Nukem as a defendant in four counts: Count VIII (tortious

interference), Count IX (civil conspiracy), Count X (violation

of RICO), and Count XI (declaratory judgment). Because

Nukem is neither a state nor the instrumentality of a state,

it cannot assert sovereign immunity as a defense. Nor can

we Say, as we did regarding Kazatomprom, that our resolution

of the act of state issues with respect to Kazakhstan removes

any substantial federal question regarding the claims against

Nukem, since we never reached the act of state question with

respect to Counts VIII-XI, dismissing them instead for lack

of subject matter jurisdiction. We must therefore turn to

24. In Part III.B, we did conclude that Count XI is barred by the

act of state doctrine to the extent that it reasserts Count I’s claim of breach

of the Management Agreement. But Nukem is not a defendant in Count

I, and our act of state analysis did not address the allegation of Count XI

that concerns Nukem—that it does not have an exclusive right to market

Kazakhstan uranium in the United States. Am. Compl. J 157-60.

27a

Appendix A

the jurisdictional ground upon which the district court

dismissed the counts against Nukem: personal jurisdiction.

Nukem is a New York corporation with its principal place

of business in Connecticut. In the district court, World Wide

asserted four alternative grounds for personal jurisdiction,

all of which the court rejected: the transacting business clause

of the District of Columbia’s long-arm statute, D.C. Code

§ 13-423(a)(1); conspiracy jurisdiction; the nationwide

service of process provision of RICO, 18 U.S.C. § 1965(d);

and the nationwide service of process provision of the

Clayton Act, 15 U.S.C. § 22. On appeal, World Wide argued

only the first two grounds in its opening brief and has

therefore waived reliance on the latter two. See Students

Against Genocide, 257 F.3d at 834-35.

Under the District’s long-arm statute, local courts may

exercise personal jurisdiction over any person “as to a claim

for relief arising from the person’s . . . transacting any business

in the District of Columbia.” D.C. Code § 13-423(a)(1).

The statute makes clear that, where jurisdiction is predicated

solely upon the long-arm statute, “only a claim for relief

arising from acts enumerated in this section may be asserted.”

Id. § 13-423(b). Thus, personal jurisdiction under this theory

“is limited to claims arising from the particular transaction

of business” in the District. AMAF Int’l Corp. v. Ralston

Purina Co., 428 A.2d 849, 850 (D.C.1981); see Naartex

Consulting Corp. v. Watt, 722 F.2d 779, 785-86 (D.C. Cir.

1983). Similarly, to establish jurisdiction under a theory of

civil conspiracy, the plaintiff must plead with particularity

“overt acts within the forum taken in furtherance of the

28a

Appendix A

conspiracy.” Jungquist v. Sheikh Sultan Bin Khalifa Al

Nahyan, 115 F.3d 1020, 1031 (D.C. Cir. 1997) (internal

quotations marks omitted).

The district court held, and World Wide does not dispute,

that the only act that might satisfy these jurisdictional

requirements was a meeting between Nukem officials and

Kazakhstan’s Ambassador, which World Wide alleges took

place at Kazakhstan’s embassy in Washington, D.C. 116

F.Supp.2d at 106-07; World Wide Br. at 45. World Wide

alleges that these individuals met at the embassy “for the

purpose of obtaining and/or confirming [Kazakhstan’s]

agreement to unlawfully breach its contract with Plaintiffs

by denying their pending petition for a license to export”

Kazakhstan uranium to the United States. Am. Compl. ¥ 6.

As a result of some confusion in the parties’ pleadings, the

district court understood World Wide to allege that this

meeting took place in December 1997. Since the court also

understood from World Wide’s allegations that all of its

injuries occurred prior to that date, the court concluded that

World Wide’s claims could not have arisen from that meeting

and that the meeting could not have furthered the conspiracy.

The court therefore concluded that it had neither long-arm

nor conspiracy jurisdiction over Nukem. 116 F. Supp. 2d

at 106, 108.

On appeal, the parties agree that there was a misunder-

standing in the district court regarding the date upon which

the embassy meeting allegedly occurred. Both World Wide

and Nukem now agree that the relevant allegation—which

we must take as true for purposes of this appeal—is that

Nukem and Kazakhstan conspired together at a meeting that

29a

Appendix A

took place in the District of Columbia in late May 1997.

See Am. Compl. J 6; Nukem Br. at 11. The basis for the

district court’s dismissal therefore no longer suffices.

Although Nukem contends that May 1997 was also too late

to have contributed to the injuries claimed by World Wide,

World Wide disputes that contention. Accordingly, we must

remand the case to the district court to resolve the dispute

over its jurisdiction.

For the foregoing reasons, we affirm, although in part

for different reasons, the district court’s dismissal of World

Wide’s complaint against Kazakhstan and Kazatomprom. The

dismissal with respect to Nukem is remanded for further

proceedings consistent with this opinion.

Affirmed in part and remanded in part.

30a

APPENDIX B — MEMORANDUM OPINION AND

ORDER OF THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLUMBIA

DATED SEPTEMBER 27, 2000

UNITED STATES DISTRICT COURT

DISTRICT OF COLUMBIA

No. 98 CV 1199-RCL.

WORLD WIDE MINERALS LTD., World Wide Resource

Finance Inc., Kazuran Corporation, and Nuclear Fuel Resources

Corporation,

Plaintiffs,

The REPUBLIC OF KAZAKHSTAHN, The State Committee

of the Republic of Kazakhstan on the Management of State

Property, The National Atomic Company Kazatomprom, and

Nukem, Inc.,

Defendants.

Sept. 27, 2000.

MEMORANDUM OPINION AND ORDER

LAMBERTH, District Judge.

Plaintiffs World Wide Minerals Ltd., World Wide Resources

Finance Inc., Kazuran Corporation, and Nuclear Fuel Resources

Corporation (hereinafter “World Wide”) brought suit over a

3la

Appendix B

contract dispute with the Republic of Kazakhstan concerning

the mining and export of uranium. After the filing of the

Complaint and First Amended Complaint numerous motions

to dismiss were filed by the defendants. Most recently,

the plaintiffs have requested Leave to File Second Amended

Complaint. The defendants, the Republic of Kazakhstan,

the State Committee of the Republic of Kazakhstan on the

Management of State Property, the National Atomic Company

Kazatomprom, and Nukem Inc., have opposed this motion

and moved to dismiss. Upon consideration of these motions,

the corresponding replies, the entire record herein, and the

relevant law, the Court has determined that:

1. Plaintiff World Wide’s Motion for Leave to File Second

Amended Complaint is denied for futility.

2. As to defendants the Republic of Kazakhstan, the State

Committee on the management of State Property, and Kazuran

Corporation (hereinafter ‘Kazakhstan’) the claims of plaintiff

World Wide are barred by the act of state doctrine. Therefore

Kazakhstan’s motion to dismiss is granted.

3. As to defendant Nukem, the Court lacks personal

jurisdiction, and therefore grants defendant Nukem’s motion

to dismiss.

BACKGROUND

After gaining independence from the Soviet Union in

1991, Kazakhstan began to seek foreign investment. Among

the areas of interest to foreign companies were the northern

and southern uranium mines of Kazakhstan. In June of 1996,

World Wide Minerals Ltd., a Canadian corporation, submitted

32a

Appendix B

a proposal for the management of the northern mines complex

in Kazakhstan. World Wide was simultaneously negotiating

with the Kazakhstan Joint Stock Company of Atomic Power,

Engineering, and Industry (KATEP) for the right to export

and sell uranium from Kazakhstan.

On July 2, 1996, World Wide and KATEP agreed on the

points of negotiation. They called for good faith negotiations

on the issue of marketing the uranium. No final agreement

to market the uranium was ever reached.

On October 7, 1996, Kazakhstan and World Wide entered

into the Management Agreement. Under this agreement,

World Wide took over the state controlled holding company

for the northern mines complex. World Wide committed to

paying the debt of the holding company, some 5 million

dollars. This agreement indicated that an export license would

be required for World Wide to sell the uranium. See Proposed

Second Am.Compl., Ex. 1, Management Agreement,

Schedule 2, | 2.3. World Wide was entitled to terminate the

agreement if the license was not received by December 16,

1996. This deadline was extended to March 16, 1997. World

Wide never received the export license, but did not suspend

activities until April 1997.

On March 25, 1997 World Wide, through its wholly

owned subsidiary World Wide Resource Finance Inc., entered

into the Pledge Agreement with the State Committee of

Kazakhstan. This agreement secured the loans of the

Management Agreement. Under Article 19 of the Pledge

Agreement, the parties indicated that any disputes would be

addressed first by negotiations, and then by arbitration under

33a

Appendix B

UNCITRAL. Paragraph 19.5 provided that the parties would

not be restricted in their right to settle disputes in court. That

paragraph also provides that Kazakhstan waives immunity

“for the purposes of the United States Foreign Sovereign

Immunities Act of 1976 in any action or proceedings to which

such Act applies.”

On January 15, 1997, World Wide contracted with

Nuclear Fuel Resources Inc., (NFR) of Colorado to market

uranium from the northern mines. NFR and World Wide then

entered into an agreement to provide uranium to Consumer’s

Energy, a Michigan corporation, on March 27, 1997. When

the export license was not issued World Wide could

not perform its duties under the contract. As a result of the

failure to obtain the export license, World Wide suspended

operations at the Northern Mines. Kazakhstan informed

World Wide that it would not be able to grant an export

license because of an earlier agreement with Nukem Inc.,

a U.S. company, for exclusive marketing of the uranium. This

agreement had been kept confidential. In July of 1997, Nukem

took over the failed contract with Consumer’s Energy.

On Angust 1, 1997, Kazakhstan terminated the northern

mines management agreement. Plaintiffs filed suit, alleging

breach of contract, conspiracy, violations of the RICO statute

and, in the proposed second amended complaint violations

of the Sherman Act.

ANALYSIS

The Plaintiff requested leave to file a second amended

complaint. Leave to amend pleading should be given when

justice so requires. See Firestone v. Firestone, 76 F.3d 1205

(D.C. Cir. 1996). The decision to allow or deny amendment

34a

Appendix B

is firmly within the court’s discretion. Jd. It is proper to deny

leave for amendment if the amendment would be futile.

See Graves v. United States, 961 F. Supp. 314 (D.D.C. 1997).

Futility is determined by whether or not the amended

complaint would survive a motion to dismiss. /d. For reasons

explained more fully below, the second amended complaint

would be futile.

I. Kazakhstan

A. FSIA and Minimum Contacts

The Republic of Kazakhstan is a foreign sovereign

nation. Foreign sovereigns traditionally have enjoyed

immunity from suit in courts of the United States. The

Foreign Sovereign Immunities Act (“FSIA”) of 1976 lays

out the conditions of immunity. FSIA is the sole basis for

jurisdiction over foreign nations. See Argentine Republic v.

Amerada Hess Shipping Corp., 488 U.S. 428, 434, 109 S. Ct.

683, 102 L. Ed. 2d 818 (1989). Instrumentalities of the State

also have immunity from suit under FSIA. Both the State

Committee of the Republic of Kazakhstan on the Manage-

ment of State Property and the National Atomic Company

Kazatomprom, meet the definition of instrumentalities of

state under 28 U.S.C. § 1603(b)(2). The defendants maintain

that the exceptions to FSIA do not apply and argue that a

minimum contacts test is necessary.

In Flatow v. Islamic Republic of Iran, 999 F. Supp. 1

(D.D.C. 1998), this court concluded that the minimum

contacts test was not required when deciding jurisdictional

issues concerning foreign sovereigns. See Flatow, 999 F. Supp.

35a

Appendix B

at 21. In Flatow, this court stated that the traditional minimum

contacts test was subsumed in the exceptions to FSIA.

Id. This ruling drew on the Supreme Court’s suggestion

that a foreign state might not be a “person” for due process

considerations. See Republic of Argentina v. Weltover, Inc.,

504 U.S. 607, 619, 112 S. Ct. 2160, 119 L. Ed. 2d 394 (1992)

(citing South Carolina v. Katzenbach, 383 U.S. 301, 323-24,

86 S. Ct. 803, 15 L. Ed. 2d 769 (1966)). Since Flatow, this

circuit has raised the issue but not decided it. See Creighton

Limited v. Government of the State of Qatar, 181 F.3d 118,

124 (D.C. Cir. 1999). Consistent with the decision in Flatow,

we find that no minimum contacts analysis is required

concerning defendants the Republic of Kazakhstan, the State

Committee of the Republic of Kazakhstan on the Manage-

ment of State Property, and the National Atomic Company

Kazatomprom. See Flatow, 999 F. Supp. at 21. The jurisdictional

analysis instead depends on the presence or absence of one

of the exceptions to FSIA. Jd.

In this case, World Wide alleges that Kazakhstan waived

its immunity in the “Pledge Agreement.” In the alternative,

World Wide argues that the acts of Kazakhstan qualify for

the commercial activities exception to the FSIA. 28 U.S.C.

§ 1605(a)(2). Kazakhstan disputes these points and,

in addition, argues that the act of state doctrine applies. These

issues are discussed in turn below.

B. Waiver of Immunity under FSIA

FSIA provides that a sovereign may be sued if it has

“waived its immunity either explicitly or by implication[.]”

28 U.S.C. § 1605(a)(1). World Wide claims that Kazakhstan

explicitly waived its immunity in the “Pledge Agreement.”

36a

Appendix B

The waiver provision of FSIA is to be interpreted narrowly,

and it must be clear the foreign state intended to waive its

immunity. See Foremost-McKesson, Inc. v. Islamic Republic

of Iran, 905 F.2d 438, 444 (D.C. Cir. 1990).

1. The Pledge Agreement

The parties entered into the “Pledge Agreement” to secure

various loans required under the management agreement.

Article 19 of the “Pledge Agreement” provides for dispute

resolution mechanisms. If negotiations fail, the parties have

the option to arbitrate but are not required to do so. See Proposed

Second Am.Compl., Ex. 2, art. 19.5. The waiver clause

specifically indicates that the waiver is to apply to FSIA. Jd.

The dispute at hand involves all of the contracts between the

parties and therefore the dispute resolution requirements of

the “Pledge Agreement” are applicable here.

Defendant Kazakhstan argues that the waiver is void

since the agreement is between Kazakhstan and World Wide

Financial Resources, a British Virgin Islands corporation.

Kazakhstan claims that since article 19.5 allows that the

parties may sue in their jurisdictions, it was not on notice

that it would be sued in the United States. Article 19.5 does

allow that the parties may bring suit in the court of the

jurisdiction of each party, but goes on to waive immunity

in any jurisdiction. See Proposed Second Am.Comp., Ex. 2,

art. 19.5. Article 19.5 concludes by stating that the waiver is

intended specifically for jurisdictions in which FSIA is

applicable. Jd.

37a

Appendix B

The fact that World Wide Fincorp is a British Virgin

Islands company is not determinative in this case. See Verlinden

B.V. v. Central Bank of Nigeria, 461 U.S. 480, 490, 103 S. Ct.

1962, 76 L. Ed. 2d 81 (1983) (holding that FSIA did not bar

actions brought by foreign plaintiffs). The language of the

waiver makes the United States the only possible jurisdiction

to which it could apply. Therefore, this court holds that

Kazakhstan intended to waive immunity to suit.

The finding that Kazakhstan waived its immunity to suit

renders irrelevant discussion of whether or not the activities

of Kazakhstan qualify as commercial activity under FSIA.

However, Kazakhstan has also raised the act of state doctrine

as a defense and this requires further examination.

C. Act of State Doctrine

The act of state doctrine bars consideration of claims

when the resolution of a case turns on the legality or illegality

of official action taken by a foreign sovereign in its own

territory. See W.S. Kirkpatrick & Co., Inc. v. Environmental

Tectonics Corp., 493 U.S. 400, 406, 110 S. Ct. 701, 107 L. Ed.

2d 816 (1990). The rule is connected to the domestic

separation of powers and intended to avoid burdening the

conduct of foreign affairs. See W.S. Kirkpatrick & Co., Inc.,

493 U.S. at 404, 110 S. Ct. 701. Under the doctrine, “the act

within its own boundaries of one sovereign State . . . becomes

... arule of decision for the courts of this country.” Jd. at 406,

110 S. Ct. 701 (quoting Ricaud v. American Metal Co.,

246 U.S. 304, 310, 38 S. Ct. 312, 62 L.Ed. 733 (1918)). The

party raising the act of state defense has the burden of

establishing the facts required under the doctrine. See Riggs

38a

Appendix B

Nat’l Corp. & Subsidiaries v. Commissioner of the L.R.S.,

163 F.3d 1363, 1367 & n.5 (D.C. Cir. 1999) (citing Lamb vy.

Phillip Morris, Inc., 915 F.2d 1024, 1026 & n.4 (6th Cir.

1990)). The doctrine does not demonstrate a lack of

jurisdiction but rather functions as a doctrine of abstention.

Id. (citing In re Minister Papandreou, 139 F.3d 247, 256

(D.C. Cir. 1998)).

Kazakhstan has raised the act of state doctrine as a

defense. The defendants claim that in order to give relief

this court must find invalid the denial of the export license

and other governmental enactments.

Kazakhstan has demonstrated that granting World Wide

relief would require a judgment on the acts of a sovereign

state. World Wide repeatedly indicates that its damages were

caused by the inability to obtain an export license for uranium

and the nationalization of property, See Proposed Second

Am.Compl., {J 65, 66, 76, 82. The regulations regarding the

issuance of export licenses were specifically enacted by

Kazakhstan in the interests of international and national

security. See Republic of Kazakhstan’s Motion to Dismiss

The Am.Compl., Ex. 10. If liability were attributed to

Kazakhstan for the alleged damages suffered by World Wide,

Kazakhstan would be faced with a judgment that designated

its denial of the export license as invalid. See Mol, Inc. v.

Peoples Republic of Bangladesh, 572 F. Supp. 79, 85 (D. Or.

1983) (holding that denial of an export license cannot be

examined under the act of state doctrine). The same is true

of a judgement concerning the alleged nationalization of

property. See Banco Nacional de Cuba v. Sabbatino, 376 U.S.

39a

Appendix B

398, 433, 84 S. Ct. 923, 11 L. Ed. 2d 804 (1964) (holding

that the seizure of privately owned property could not be

examined because of the act of state doctrine).

World Wide claims that it only seeks investigation into

the conspiracy against it. World Wide maintains that the facts

here are similar to those in W.S. Kirkpatrick, and therefore

the ruling in that case should guide the decision.

In W.S. Kirkpatrick, the Supreme Court considered the

application of the act of state doctrine to a claim for damages

under the Racketeer Influenced and Corrupt Organizations

Act, 18 U.S.C. § 1961. See W.S. Kirkpatrick, 493 U.S. at 402,

110 S. Ct. 701. The plaintiff claimed that the defendant,

a private corporation, had bribed Nigerian officials in order

to obtain a contract. Jd. The Court in WS. Kirkpatrick held

that the act of state doctrine did not apply because the validity

of the contract was not at issue. Jd. at 409, 110 S. Ct. 701.

In contrast, the validity of the contract is at issue in this

case. Unlike the facts in W.S. Kirkpatrick the defendant here

is a foreign sovereign, not a private company. To investigate

the conspiracy we must examine the contracts with Nukem,

since these led to the denial of World Wide’s export license.

These contracts were based on the internal laws and decrees

of the Republic of Kazakhstan. Kazakhstan would be faced

with an investigation directly concerning its governmental

acts. Investigation of the claims against Kazakhstan would

be in direct conflict with the ruling in W.S. Kirkpatrick.

See W.S. Kirkpatrick, 493 U.S. at 406, 110 S. Ct. 701.

40a

Appendix B

By way of comparison the act of state doctrine would

not bar claims against Nukem because the situation would

be analogous to W.S. Kirkpatrick. If the court allowed such

damages its findings might suggest that the contract was

invalid, but Kazakhstan’s governmental decrees would not

be directly implicated. Here however, the claim for damages

is against Kazakhstan, thus involving the legality of the

governmental actions. As such, this court cannot consider

any of the claims against Kazakhstan or its instrumentalities

due to the act of state doctrine.

II. Nukem

The jurisdictional allegations against defendant Nukem,

raise issues separate from the jurisdictional questions

involving the other defendants. Defendant Nukem is a New

York corporation with its principal place of business in

Connecticut. Plaintiff World Wide asserts several grounds

of jurisdiction. First, that Nukem satisfies the D.C. long arm

statute and meets the requirements of due process. Second,

that the Court has jurisdiction under the Clayton Act,

28 U.S.C. § 1391. Third, that jurisdiction is proper under

the Federal Rico Statute, 18 U.S.C. § 1965, and finally

that the court has conspiracy jurisdiction. The court finds

these arguments without merit.

As an initial matter, plaintiff World Wide raises few

allegations in the amended complaint specifically against

defendant Nukem. See Amended Complaint { 6 (alleging

personal jurisdiction over Nukem due to meetings at the

Republic of Kazakhstan Embassy), § 13 (alleging that Nukem

conducts business in the District of Columbia by meeting

4la

Appendix B

with various officials of the U.S. and Kazakhstan). In various

responses filed by World Wide, and the proposed Second

Am.Comp., World Wide has repeated these allegations and

added five new contacts with the District of Columbia. World

Wide alleges that:

1. Nukem publishes advertising in the district.

2. Subscribers to Nukem’s trade publication reside in

the district.

3. Nukem is a member of various trade organizations

which hold conferences in the District of Columbia.

4. The American Uzbekistan Chamber of Commerce

was incorporated by Nukem and Nukem serves on the board

of directors for the Chamber of Commerce in the district.

5. Nukem, represented by Mr. James C. Comell, signed

the U.S.—Russia Highly Enriched Uranium agreement.

For the reasons discussed below, these contacts do not

give this court jurisdiction over Nukem.

A. The “Government Contacts” Exception to Personal

Jurisdiction

The “government contacts” exception excludes from

jurisdictional consideration a defendant’s contacts with

federal instrumentalities. See Mallinckrodt Med. Inc. v. Sonus

Pharm., Corp., 989 F. Supp. 265, 271 (D.D.C. 1998). This

exception has arisen from the District of Columbia’s unique

42a

Appendix B

character as the home of the federal government. /d. Courts

have construed the exception to extend to non-resident

contact with trade associations located with the District

of Columbia. See Investment Co. Inst. v. United States,

550 F. Supp. 1213 (D.D.C. 1982).

Application of this exception to Nukem ends

consideration of several jurisdictional allegations. Any of the

meetings with governmental officials would be excluded

under the doctrine. See Mallinckrodt, 989 F. Supp. at 271.

Courts have refused to extend this exception to embassy

meetings when the non-resident defendant was pursuing a

proprietary interest. See Dooley v. United Technologies Corp.,

786 F. Supp. 65, 74-76 (D.D.C. 1992). Therefore, under the

government contacts exception, this Court excludes from

consideration meetings with governmental officials in the

District of Columbia, and the signing of the bi-lateral

agreement on uranium. However, the alleged meetings at the

Republic of Kazakhstan Embassy will be considered.

Nukem’s membership in a trade organization also

qualifies as “government contacts”, under Investment Co.

Institute v. United States, 550 F. Supp. 1213 (D.D.C. 1982).

The Court in that case noted, “[I]t would surely come as a

surprise to the members of the many trade associations having

offices here that their membership counted as intrastate

business for jurisdictional purposes.” Jnvestment Co. Institute

v. U.S., 550 F. Supp. 1213, 1217 & n.6 (D.D.C. 1982). The

same applies here.

43a

Appendix B

B. D.C. Long Arm Statute

World Wide has invoked the “transacting business”

clause of the D.C. Long Arm statute, D.C. Code § 13-423(b).

To obtain personal jurisdiction over a non-resident defendant

under § 13-423(b), a plaintiff must assert three requirements

with specificity. First, the non-resident defendant must have

“transacted business” within the district. Second, the contact

must give rise to the claim. Third, the assertion must be

consistent with due process considerations.

1. Transacting Business

A corporation transacts business within the District only

if the business is of a “substantial character”. See Armco Steel

Co., L.P. v. CSX Corp., 790 F. Supp. 311, 320 (D.D.C. 1991)

(citing Chrysler Corp. v. General Motors Corp., 589 F. Supp.

1182, 1195 (D.D.C. 1984)). Trade organizations representing

business interests have been found to lack the required level

of involvement. See Armco, 790 F. Supp. at 320. Lacking a

showing that the contact was “integral to the conduct of...

business,” the contact failed to establish that the defendant

had transacted business within the district. Jd.

The American Uzbekistan Chamber of Commerce seems

to be the type of trade organization considered in Armco.

World Wide alleges that the Chamber of Commerce is a

“non-profit encouraging international trade with Central

Asia.” See proposed Second Am.Compl. { 10e. This generalized

statement does not indicate that the organization is a contact

of “substantial character” for Nukem. Jd. The involvement

of Nukem in the Chamber of Commerce, therefore, fails to

satisfy the transacting business requirement.

44a

Appendix B

2. “Arising From”

D.C. Code Ann. § 13-423(b) requires a significant

connection between the claim and alleged contact with the

forum. This court will closely adhere to this “arising from”

requirement. See Coalition on Sensible Transp., Inc. v. Dole,

631 F. Supp. 1382 (D.D.C. 1986).

The remaining Worid Wide allegations fail to demonstrate

a sufficient connection between the injury and the contacts

to meet the “arising from” requirement.

World Wide alleges that meetings contributing to the

conspiracy took place at the Kazakhstan Embassy. World

Wide simply states that there were several such meetings

without giving specific dates. See Proposed Second Am.

Compl., { 10. In earlier pleadings, World Wide had alleged

that meetings took place in December 1997. World Wide

claims that the injury occurred either on April 30, 1997 or

May 6, 1997, when Kazakhstan indicated that no export

license would be granted. The contact therefore took place

after the alleged injury occurred. The Long Arm statute, D.C.

Code § 13-423(b), requires that the claim arise from the

contacts alleged. It would be impossible for the injury to arise

from a contact occurring months later. Therefore, this court

cannot exercise personal jurisdiction over Nukem on the basis

of the alleged meetings at the embassy.

The other contacts alleged by World Wide also fail the

“arising from” test. Publishing advertisements or mailing

trade magazines in the forum might not even provide the

needed minimum contacts. See Volkswagen De Mexico v.

45a

Appendix B

Germanischer Lloyd, 768 F. Supp. 1023, (S.D.N.Y. 1991)

(holding that advertisements that reach the district do not

establish personal jurisdiction). Even granting that these

contacts meet the requirements of due process they cannot

meet the requirements under § 13-423(b). The presence of

subscribers to a trade magazine cannot be connected to the

creation of a conspiracy to breach a contract that was signed

and performed in Kazakhstan. The same is true of advertise-

ments in area newspapers. The alleged injury therefore cannot

arise from these contacts.

For the reasons above this court lacks personal

jurisdiction over Nukem under the D.C. Long Arm Statute.

C. Anti-trust Claims as an Alternative Basis of

Jurisdiction

The claims under the Sherman and Clayton Acts are new

additions to World Wide’s allegations, appearing for the first

time in the Proposed Second Amended Complaint. World

Wide cites these acts as an alternative grounds for jurisdic-

tion. Presumably, although it is not expressly indicated, World

Wide hopes that the national service provisions of the Clayton

Act will give this court jurisdiction over Nukem. This

approach has been expressly rejected in recent decisions.

See GTE New Media Serv. Inc. v. BellSouth Corp., 199 F.3d

1343 (D.C. 2000). In GTE, the defendant argued that the

nation-wide service provisions of the Clayton Act provided

a basis for personal jurisdiction in every district of the United

States. See GTE, 199 F.3d at 1350. The court found that

the Clayton act required proper venue in order to satisfy

jurisdictional requirements. Jd.

46a

Appendix B

The venue analysis requires that this court perform the

local contacts test under the applicable long-arm statute.

See In re Vitamins Antitrust Litigation, 94 F. Supp. 2d 26, 31

(D.D.C. 2000). As shown above, the allegations by World

Wide do not satisfy the requirements of the long-arm

provision, and therefore, this court does not have jurisdiction

under the Clayton Act.

D. RICO as an alternative basis of Jurisdiction

Plaintiffs also contend that jurisdiction may be based on

the Federal RICO statute, 18 U.S.C. § 1965. A court in

this jurisdiction has held that the RICO service provision

does provide for jurisdiction based on a national contacts

test as opposed to a local contacts test. See Dooley v. United

Technologies Corp., 786 F. Supp. 65, 71 (D.D.C. 1992). This

ruling recognized that other jurisdictions have used a national

contacts test. See Omni Video Games, Inc. v. Wing Co., Ltd.,

754 F. Supp. 261, 263 (D.R.I. 1991); University Savings Assn.

v. Bank of New Haven, 765 F. Supp. 35, 36 (D. Conn. 1991);

American Trade Partners L.P. v. A-1 Int'l Importing Enter.

Ltd., 755 F. Supp. 1292, 1302 (E.D. Pa. 1990). The Court in

Dooley also recognized that this circuit has not directly

addressed the issue. See Dooley, 786 F. Supp. at 71.

This court declines to follow Dooley. In United States v.

Dyncorp, Inc., 924 F. Supp. 292, 297 (D.D.C. 1996), the court

conducted a minimum contacts due process analysis despite

the nationwide service provision in the False Claims Act.

It is true that each statute must be interpreted separately.

See Cortez Byrd Chips, Inc. v. Bill Harbert Constr. Co., 529

U.S. 193, 120 S. Ct. 1331, 1339, 146 L. Ed. 2d 171 (2000)

47a

Appendix B

(“analysis of special venue provisions must be specific to

the statute”). However, a comparison of the Clayton Act

service provisions and the RICO statute provisions does show

a substantial similarity. Compare 18 U.S.C. § 1965(a), (d)

with 28 U.S.C. § 1391(b), (c). The ruling in this circuit in

GTE New Media Services, 199 F.3d 1343 (D.C. Cir. 2000),

on the Clayton Act postdates Dooley, and suggests that a

national contacts test might not apply. In addition, there is

strong support to reject nationwide jurisdiction in the Second

Circuit. See PT United Can Co. Ltd. v. Crown Cork & Seal

Co., Inc., 138 F.3d 65, 70-71 (2nd Cir. 1998).

As the Second Circuit noted, the service provisions of

the RICO statute must be read together in order to be

coherent. See PT United Can Co., supra, 138 F.3d at 70.

First, 1965(a) gives personal jurisdiction over defendants

when they reside, have an agent, or transact affairs in the

district. This is analogous to having minimum contacts within

the district. Then 1965(b) provides for nationwide

jurisdiction over other parties not residing in the district.

1965(c) provides for service of subpoenas. Finally, 1965(d)

provides for nationwide service of “all other process”.

This clause should not invalidate the division in (a) and (b)

between resident and non-resident defendants. The statute

seems to provide for nationwide jurisdiction only when one

of the defendants has minimum contacts with the forum.

This court rejects the notion that the federal RICO statute

would provide a basis for nation wide jurisdiction. Since none

of the defendants are subject to personal jurisdiction in the

District of Columbia the RICO statute does not allow this

court to assert jurisdiction.

48a

Appendix B

£. Conspiracy Jurisdiction

Finally, World Wide alleges that Nukem is amenable to

the court’s power under conspiracy jurisdiction. Most courts

utilize conspiracy jurisdiction warily and require that a

plaintiff “plead with particularity the conspiracy as well as

the overt acts within the forum.” See Jungquist v. Sheikh

Sultan Bin Khalifa Al Nahyan, 115 F.3d 1020, 1031 (D.C.

Cir. 1997). For conspiracy jurisdiction to function there must

be a substantial act within the forum. See Jungquist, supra,

115 F.3d at 1031.

World Wide names as Nukem’s co-conspirators the

embassy officials. The only overt act alleged with

particularity by World Wide involving the conspiracy is the

meeting at the embassy. World Wide fails to explain how

this meeting taking place after the crucial incidents had

occurred could have been used to “plan” the conspiracy.

All of the other acts of the conspiracy took place outside of

the District of Columbia. Consequently, a denial of personal

jurisdiction under this theory is warranted.

ITT. Conclusion

For the reasons set forth above the proposed second

amended complaint would not survive a motion to dismiss.

Therefore, the Proposed Second Amended Complaint is

futile. Moreover, the defendants’ motions to dismiss the

Amended Complaint shall be granted in a separate order filed

this date.

49a

Appendix B

ORDER

Upon consideration of the parties’ motions, their oppositions

and replies, and the entire record in this case, and for the

reasons set forth in the accompanying Memorandum Opinion,

it is hereby

ORDERED that the plaintiff’s motion for leave to File

Second Amended Complaint [54-1] is DENIED, and

FURTHER ORDERED that Republic of Kazakhstan,

State Committee for the Republic of Kazakhstan, and

Kazatomprom’s motion to dismiss under the act of state

doctrine is GRANTED [21-1], and that defendant Nukem’s

motion to dismiss for lack of personal jurisdiction is GRANTED

[27-1].

ORDERED that Kazakhstan’s motion to dismiss for lack

of personal jurisdiction [22-1] is DENIED as moot. Kazakhstan’s

motion to dismiss for failure to state a claim [23-1] is DENIED

as moot.

Kazakhstan’s motion to stay proceedings and compel

arbitration [24-2] is DENIED.

Kazatomprom’s motion for joinder of motions [25-1] is

DENIED as moot.

Kazatomprom’s motion to dismiss [26-1] under F.R.C.P.

12(b)(1), (2) are DENIED as moot.

50a

Appendix B

Nukem’s motion to file confidential material under seal

[29-1] is GRANTED.

Nuclear Fuel Resources motion to strike affidavit [33-1]

is DENIED as moot. i

World Wide Minerals motion for leave to take jurisdic- -

tional discovery [34-1] is DENIED.

Nukem’s motion to seal confidential material [46-1]

is GRANTED.

World Wide’s motion [53-1] to remove from public

record and place under seal the plaintiff’s motion to strike

submission is GRANTED.

This case now stands DISMISSED.

SO ORDERED.

S5la

APPENDIX C — STATUTES INVOLVED

28 U.S.C. § 1330

Section 1330. Actions against foreign states

(a) The district courts shall have original jurisdic-

tion 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.

* * *

52a

Appendix C

28 U.S.C. § 1605

Section 1605. General exceptions to the jurisdictional

immunity of a foreign state

(a) A foreign state shali not be immune from the

jurisdiction of courts of the United States or of

the States in any case—

(1) in which the foreign state has

waived its immunity either explicitly or

by implication, notwithstanding any

withdrawal of the waiver which the

foreign state may purport to effect

except in accordance with the terms of

the waiver;

(2) in which the action is based upon a

commercial activity carried on in the

United States by the foreign state; or

upon an act performed in the United

States in connection with a commercial

activity of the foreign state elsewhere;

or upon an act outside the territory of

the United States in connection with a

commercial activity of the foreign state

elsewhere and that act causes a direct

effect in the United States;

* * * *

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.