2010 International Law Update, Volume 16, Number 9
(September)
ALIEN TORT CLAIMS ACT
Eleventh Circuit affirms dismissal of Alien Tort Claims
Act suit against Palestine Authority and PLO in case of Israeli citizen
murdered while driving within Gaza Strip, and rules that single murders
committed by private actors during isolated armed skirmishes do not give rise
to ATCA’s international jurisdiction
Ahuva Amergi, an Israeli citizen (Deceased), was shot and
killed during a firefight in 2002 while she was simply driving her car in the
Gaza Strip. Her estate and her survivors (Plaintiffs) sued the Palestinian
Authority (PA) and the Palestine Liberation Organization (PLO) (Defendants) in
the U.S. District Court for the Southern District of Florida. The Plaintiffs
charged that Deceased died in the course of an armed conflict, and that the
district court had subject matter jurisdiction based on the Alien Tort Claims
Act (ATCA).
The Complaint alleges that Yaser Mahmud Alkativ, a Commander
of the Palestinian Intelligence Services, recruited Muhamad Al Katzir to commit
terrorist acts. Alkativ sent a videotape to Katzir describing his assigned
terrorist acts. Soon thereafter, Katzir travelled near Kisufim, Israel, armed
with an AK‑47 and explosives. There he opened fire on several cars, killing the
Deceased. Katzir then died in the ensuing firefight with Israeli Defense
Forces.
The district court dismissed the complaint for lack of
subject matter jurisdiction on the grounds that ATCA does not apply to random
acts of terrorism. The Plaintiffs noted their appeal. The U.S. Court of Appeals
for the Eleventh Circuit affirms.
ATCA provides federal jurisdiction for a limited class of
international wrongs, e.g. where an alien sues for a tort committed against him
or her in violation of the law of nations. In such cases, it provides a U.S.
forum for aliens to enforce their international rights. The primary actors in
international law matters, however, are sovereign states. In this case, there
is no state action and no indication that Deceased’s murder, however wrongful
and tragic, did violate the law of nations.
“The [Plaintiffs’] ... legal theory is that a killing by
private actors in the course of an armed conflict is enough to give rise to
subject matter jurisdiction under the ATCA, at least under the facts of this
case. ... [W]hile they concede that there is no state action, they argue
nevertheless that the murder of [Deceased] by the PA and the PLO is
sufficiently egregious to constitute an international war crime, thus
conferring jurisdiction under ATCA. The Defendants maintain, however, that even
a private killing in the course of an armed conflict cannot support subject
matter jurisdiction under ATCA. In dismissing, the district court squarely
rejected Plaintiffs’ theory. ...”
“The first problem that the [Plaintiffs] face in this appeal
is that the pleadings and the record do not evince any support for the theory
that this single killing took place during the course of an international armed
conflict. There is virtually nothing in the Third Amended Complaint (TAC) that
pleads the existence of [such] an ongoing armed conflict. ... The TAC does not
explain whether the conflict was a war, how long it had gone on, who was
fighting, what they were fighting for, how the conflict had evolved, or how the
tort at issue fit into the larger picture.”
“Quite simply, the TAC fails to establish subject matter
jurisdiction under the ATCA. ... While the [Plaintiffs] suggest that we may
look to facts extrinsic to the complaint to support subject matter jurisdiction
..., the problem here is that the record is completely barren of any facts in
support of the [Plaintiffs’] second legal theory.” [Slip op. 15‑17]
“As reprehensible as Katzir’s actions were, the result is a
single act of murder. The Supreme Court has stated that any proposed cause of
action under ATCA must be compared to the three torts contemplated in ATCA as
originally passed: [1] offenses against ambassadors, [2] violations of safe
conduct, and [3] piracy. Violations of these narrow sets of international norms
threaten serious consequences in international affairs. See Sosa v. Alvarez‑Machain,
542 U.S. 692, 715, 725 (2004).”
“The Court is not aware of any case that suggests that a
single murder committed by private actors in the course of an armed conflict
gives rise to subject matter jurisdiction under ATCA. Otherwise [U.S.] courts
would be open to [litigate] effectively every incident of violence in every
unstable part of the world.”
The Court also warns of the adverse political consequences
if it were to find subject matter jurisdiction. “Were we to assert subject
matter jurisdiction in this case and on this barren record, the ‘collateral
consequences,’ ... could well be great. The issue of international terrorism
‘concerns an area of international law in which... the disagreements concern
politically sensitive issues that are especially prominent in the foreign
relations problems of the Middle East.’ ...”
“Moreover, this case implicates the struggle between
Israelis and Palestinians, an issue of U.S. foreign policy that presents
numerous diplomatic and political challenges for the White House today, just as
it has in years past. ... A federal court weighing in on claimed Palestinian
war crimes could add to the complexity, and could potentially undermine
American objectives in the region. ...”
“We do not point out these collateral concerns to say that
the federal courts should simply decline to hear cases involving politically
sensitive matters of international law. ... In fact, there can be little doubt
that ATCA permits federal courts to assert jurisdiction over hot‑button matters
of international law. ...”
“Rather, we raise these issues, at the direction of the
Supreme Court, to underscore the real‑world consequences that can accompany
federal judicial participation in matters of international concern. In an ATCA
case such as this one, these foreign policy concerns weigh in the balance, and
provide further support for our holding that, on this factual record, the
district court lacked subject matter jurisdiction to hear this case.” [Slip op.
30‑31].
Citation: Estate of Ahuva Amergi, Amergi v. The
Palestine Authority, 611 F.3d 1350 (11th Cir. 2010).
INTERNATIONAL CHILD ABDUCTION
Despite Pennsylvania state court order granting sole
custody of ten‑year‑old daughter to father in U.S., Third Circuit affirms
district court order that father must return child to mother in Netherlands
since mother still had custody rights under Dutch law because father failed to
seek enforcement of Pennsylvania Court Order in Netherlands court and instead
chose to “snatch [child] and run.” Court also discusses sua sponte whether
mother’s own “unclean hands” should affect her right to return of child
In 2001, EL, the female child of Paul Leendertz (PL) and his
wife Marina Karpenko (MK), entered the world in Pennsylvania. The parents
separated in the following year, however, and later divorced. In 2002, the
Pennsylvania Court of Common Pleas issued an order that incorporated a Custody
Stipulation by EL’s parents. It granted MK primary physical custody and
provided that EL should live with MK in the Ukraine, MK’s native country. MK
and EL later relocated to the Netherlands where EL began attending public
school. Dutch soon became EL’s primary language and she was fully integrating
into life in the Netherlands.
Meanwhile, the relationship between the parents continued to
worsen. MK kept preventing PL from seeing his child, and both parties filed
petitions for sole custody in 2008. While MK filed hers in the Dutch Court in
Arnhem, PL filed his in the Pennsylvania Court of Common Pleas. The Dutch Court
stayed MK’s petition while the Pennsylvania case was pending. In 2009, the
Pennsylvania court granted PL the sole custody of EL. Despite his success, PL
failed to understand or to comply with the requirement of Dutch law that, to be
effective in the Netherlands, PL has to “domesticate” his foreign court order
through a Dutch court. See Dutch Civil Code, Title 9, Article 985.
Instead, PL found EL outside her school in the Netherlands,
and took her to the U.S. without notifying either MK or the appropriate Dutch
court. Some days later, the Dutch court issued an order (1) that, at the time
of EL’s removal, the parents had joint custody, (2) that PL had unlawfully
removed EL, and (3) that PL must immediately return the child to Holland. PL,
however, paid not the slightest attention to the Dutch court order.
Next, MK petitioned the U.S. District Court for the Eastern
District of Pennsylvania to order PL to return EL to Holland. She relied upon
the Hague Convention on the Civil Aspects of International Child Abduction
(October 25, 1980, T.I.A.S. No. 11670, 1343 U.N.T.S. 89; reprinted in 51 Fed.
Reg. 10,494 (1986); in effect for U.S. July 1, 1988) [HCCA]. The U.S. has also
codified the HCCA in the International Child Abduction Remedies Act, 42 U.S.C.
11601 (ICARA), substantially absorbing the provisions of the HCCA into domestic
U.S. law.
The District Court next held an evidentiary hearing. It
determined (1) that EL’s habitual residence was in the Netherlands; (2) that
both parents had custody rights under Dutch law at the time of PL’s unlawful
removal; and (3) that PL had breached MK’s custody rights under Dutch law with
his “snatch and run” tactics. Instead, he should have registered the
Pennsylvania Court’s Order in the appropriate Netherlands court as Dutch law
requires.
The District Court granted MK’s petition, but at the same
time stayed its enforcement pending PL’s appeal. In a divided opinion, the U.S.
Court of Appeals for the Third Circuit affirms the District Court’s Order that
granted MK’s petition based on the HCCA. The Court also lifts the stay so that
EL can return to the Netherlands.
On appeal, PL argued that his conduct did comply with U.S.
and Dutch law. He relied on the Pennsylvania court’s order granting him sole
custody of EL. The Third Circuit disagrees. Such an order does not authorize “a
‘snatch and grab,’ as accurately characterized by the District Court. A
Pennsylvania state court lacks jurisdiction to authorize such conduct; therefore,
the Pennsylvania court’s ... Order was a nullity in the Netherlands until
domesticated by a Dutch court. ... [A] Dutch court ruled that PL had acted
unlawfully by removing the child without MK’s permission. These facts support
the District Court’s finding that PL had breached MK’s custody rights.” [Slip
op. 9].
The appellate court then turns sua sponte to whether the
mother’s “unclean hands” should stand in the way of EL’s return to Holland. “At
oral argument, a member of this panel posed a novel question which was not
raised or briefed by the parties or considered by the District Court.”
“The doctrine of unclean hands, ¼‘is a self‑imposed
ordinance that closes the doors of a court of equity to one tainted with
inequitableness or bad faith relative to the matter in which he seeks relief,
however improper may have been the behavior of the [opponent].’... The doctrine
may be raised sua sponte, ... ; the question then is whether its application is
appropriate here.”
“MK’s conduct in the Netherlands was decidedly not
commendable; it was wrong for her to interfere with PL’s visitation rights and
to refuse to disclose the child’s new address after relocating. But we are not
aware of any authority that would support dismissal of a HCCA petition on
grounds of unclean hands. ... The language of the [HCCA], and of [ICARA] which
implements it, demonstrates that their purpose is to protect the well‑being of
children. The HCCA’s preamble emphasizes that ‘the interests of children are of
paramount importance in matters relating to their custody’ and expresses a
desire to protect children from the harms caused by wrongful removal.”
“The conduct of the parents, other than the claim of
abduction or retention, is not mentioned in the [HCCA] except to the extent
that this conduct may be relevant to one of the affirmative defenses. Moreover,
Article 19 of the [HCCA] provides that a decision to return a child under the
Convention is not a determination on the merits of custody. Custody is to be
decided by a court of the child’s ‘habitual residence.’ The purpose of the
[HCCA] is to safeguard the child by discouraging kidnapping in connection with
custody disputes.”
“[A majority of us] conclude that application of the unclean
hands doctrine would undermine the [HCCA’s] goal of protecting the well‑being
of the child, of restoring the status quo before the child’s abduction, and of
ensuring ‘that rights of custody and of access under the law of one Contracting
State are effectively respected in the other Contracting States.’ Hague
Convention, Article 1(b).” [Slip op 10‑11].
“If PL had simply filed a petition to enforce the
Pennsylvania Court Order in the Netherlands, then the Dutch Court could have
considered the merits. The Dutch Court had already stayed the Dutch proceedings
pending the outcome of the Pennsylvania proceedings, and thus [had] shown
consideration of PL’s interests and the Pennsylvania Court’s decision. PL [had]
foreclosed his opportunity to perfect his claim to custody by resorting to self‑help.
Further, MK’s unclean hands did not bar her from filing a petition under the
[HCCA] to restore the status quo before EL’s removal to the U.S.”
Citation: Karpenko v. Leendertz, 619 F.3d 259 (3rd
Cir. 2010).
INTERNATIONAL CHOICE OF LAW
In dispute over oral contract between Argentine and U.S.
companies, Third Circuit applies U. N. Convention on International Sale of
Goods (CISG) and holds that where one signatory country permits oral contracts
while other signatory country does not, forum court must first decide, based on
forum state’s choice‑of‑law rules, which nation’s law applies, and then apply
law of that nation
Forestal Guarani S.A. (Plaintiff) manufactures lumber
products in Argentina. In 1999, Daros International, Inc. (Defendant), based in
New Jersey, bought wooden finger‑joints from Plaintiff based on an oral
agreement. Plaintiff delivered products worth about $1.8 million, of which
Defendant paid roughly $1.4 million. In 2002, Plaintiff sued for the balance in
New Jersey state court, and Defendant removed the matter to federal court. In
its answer, Defendant denied any further liability.
In 2005, Defendant moved for summary judgment based on the
absence of a written agreement. The U. N. Convention on Contracts for the
International Sale of Goods (CISG) [1489 U.N.T.S. 3; Sen. Treaty Doc. No. 98‑9
(1983), 19 I.L.M. 671 (1980), reprinted at 15 U.S.C. App. (1998); in force for
all signatories January 1, 1988], purportedly requires such an agreement to be
in writing. The District Court initially denied the motion. The Court later
determined that CISG did govern the dispute and thus barred Plaintiff’s claim
because the agreement was not in writing.
Plaintiff appealed. In a 2 to 1 vote, however, the U.S.
Court of Appeals for the Third Circuit concludes that it cannot decide on the
existing record whether to apply New Jersey or Argentine law.
The sticking point here is that the CISG does contain a
limited provision allowing oral contracts. It permits signatory states,
however, to opt out of this provision ‑‑ and some others. Argentina did in fact
opt out, thus declining to enforce oral contracts. The U.S., however, did not
opt out, thus is willing to enforce otherwise valid oral contracts.
In the appellate court’s view, where one party to the CISG
is able to enforce otherwise valid oral contracts while the opposing party is
not, a U.S. court has first to decide, based on the forum state’s choice‑of‑law
analysis, which forum’s law it should apply. The Court therefore remands for
further proceedings.
“The CISG ‘applies to contracts of sale between parties
whose places of business are in different [sovereign] States ... when the States
are Contracting States[.]’ [[15 U.S.C. App., Art. 1(1)(a) ...]] The United
States ratified the CISG on December 11, 1986, Argentina ratified it on July
19, 1983. It first became effective for all signatories as of January 1, 1988.
...”
“Because both the United States, where [Defendant] is based,
and Argentina, where [Plaintiff] is based, are signatories to the CISG and the
alleged contract at issue involves the sale of goods, we agree with the parties
that the CISG governs [Plaintiff’s] claim. ... To resolve the parties’ dispute,
we turn to the text of the CISG itself, ..., giving effect to its plain
language ‘absent extraordinarily strong contrary evidence,’ ...”
“The CISG [explicitly] strives to promote certainty among
contracting parties and simplicity in judicial understanding [1] by reducing
forum shopping, [2] by reducing the need to resort to rules of private
international law, and [3] by establishing a law of sales appropriate for
international transactions.’ ... Article 7 directs a court, in interpreting the
CISG, to be mindful of ‘its international character and... the need to promote
uniformity in its application and the observance of good faith in international
trade.’”
“¼
[A]s relevant here, the CISG dispenses with certain formalities associated with
proving the existence of a contract. Specifically, Article 11 instructs that
‘[a] contract of sale need not be concluded in, or evidenced by, writing and is
not subject to any other requirement as to form. It may be proved by any means,
including witnesses.’ Similarly, Article 29 permits a contract modification to
be proved even if it is not in writing. And Part II of the CISG, titled
‘Formation of the Contract,’ outlines requirements governing offer and acceptance
but does not impose a writing requirement.”
“Article 11’s elimination of formal writing requirements
does not apply in all instances in which the CISG governs. Article 96 of the
CISG carves out an exception to Article 11, Article 29 and Part II. It says
that: ‘[a] Contracting State whose legislation requires contracts of sale to be
concluded in, or evidenced by, writing may at any time make a declaration in
accordance with article 12 that any provision of article 11, article 29, or
Part II of this Convention, that allows a contract of sale or its modification
or termination by agreement or any offer, acceptance, or other indication of
intention to be made in any form other than in writing, does not apply where
any party has his place of business in that State.’ ”
“Article 12, ¼ states that:‘[a]ny provision of article 11, article 29
or Part II of this Convention that allows a contract of sale ... to be made in
any form other than in writing does not apply where any party has his place of
business in a Contracting State which has made a declaration under article 96
of this Convention. The parties may not derogate from or vary the effect of
this article.’ Id., Art. 12.”
“The United States has not made an Article 96 declaration,
so Article 11 governs contract formation in cases involving a United States‑based
litigant and a litigant based in another nondeclaring signatory state.
Argentina, however, has made a declaration under Article 96, thereby opting out
of Articles 11, 29 and Part II. ...”
“Our research has turned up almost no case law from courts
in the United States informing how to address a case, such as this one. ...
Courts in foreign jurisdictions and commentators alike are divided over how to
proceed in such a scenario. See UNCITRAL Digest of Case Law on the [CISG] 46,
48 (2008) (outlining the conflict).”
“According to one school of thought, a court must at the
outset conduct a choice‑of‑law analysis based on private international law
principles to determine which state’s law governs contract formation, and then
apply that law to a party’s claim. ... Our study of the available sources on
the subject establishes this position as the clear majority view. ... “ ¼
“Although none of the supporters of what we perceive as the
majority view have explained their reasoning in any detail, we conclude that
the majority has it right. Our conclusion is compelled by the CISG’s plain
language. ... The CISG says that ‘[q]uestions concerning matters governed by
this Convention which are not expressly settled in it are to be settled in
conformity with the general principles on which it is based or, in the absence
of such principles, in conformity with the law applicable by virtue of the
rules of private international law [i.e. choice of law].’”
“Because Argentina has opted out of Articles 11 and 29 as
well as Part II of the CISG, the CISG does not ‘expressly settle’ the question
whether a breach‑of‑contract claim is sustainable in the absence of a written
contract. So Article 7(2) tells us to consider the CISG’s ‘general principles’
to fill in the gap. We have already outlined some of the general principles
undergirding the CISG, but we fail to see how they inform the question whether
[Plaintiff’s] contract claim may proceed. Indeed, given the inapplicability in
this case of any of the CISG’s provisions relaxing or eliminating writing
requirements, we do not believe that we can answer the question presented here
based on a pure application of those principles alone.”
“Given that neither the CISG nor its founding principles
explicitly or implicitly settle our inquiry, Article 7(2)’s reference to ‘the
rules of private international law’ is triggered. In other words, we have to
consider the choice‑of‑law rules of the forum state ‑‑ in this case New Jersey ‑‑
to determine whether New Jersey or Argentine [contract] requirements govern
[Plaintiff’s] claim.’ [Slip op. 6‑13]
“The Court therefore vacates the summary judgment for
[Defendant] and remands for further proceedings. On remand, the District Court
may determine, based on New Jersey’s choice‑of‑law rules, whether New Jersey or
Argentine law governs and then apply that forum’s law to this case.”
Citation: Forestal Guarani S.A. v. Daros
International, Inc., 613 F.3d 395(3rd Cir. 2010).
ENFORCEMENT OF U.S. JUDGMENTS ABROAD
French Supreme Court enforces Georgia state court’s
adoption order that gave parental responsibility to both French adoptive mother
and American biological mother because it does not conflict with French law or
French principles of international public policy
A French woman, Valerie X, and an American woman, Ms. Y,
were living in a “domestic partnership” in the U.S. state of Georgia. Ms. Y
became pregnant and gave birth to a child named Ana. Valerie obtained an
adoption order from the DeKalb County court in Georgia. The child’s birth
certificate listed Ms. Y as the “mother” and Valerie, the adoptive French
mother, as a “parent,” with both having parental responsibility.
Later on, Valerie sought to enforce the U.S. adoption order
in a French court. The French court declined to do so since it read Article 365
of the French Civil Code as providing that the adoptive mother alone has
parental responsibility. The lower court also cited Art. 509 of the French Code
of Civil Procedure on the enforcement of foreign judgments, and Art. 370‑5 of
the French Civil Code on adoption orders issued by foreign courts.
On appeal, the French Cour de Cassation [Supreme Court]
reverses and grants the enforcement order. It rules that the U.S. adoption
order giving parental responsibility to both Valerie and the biological mother
is not contrary to French international public policy because it does not
contravene essential principles of French law.
The lower court’s decision had erred in implying that the
U.S. court order conflicted with French law. The U.S. court order at issue only
settled the sharing of parental responsibility for a child as between the
natural mother and the adoptive mother. Furthermore, the lower court’s decision
erred in depriving the biological mother of her right to parental
responsibility even though she lives with Valerie, the adoptive mother.
Citation: Appeal by Valerie X, Cour de Cassation,
First Civil Chamber, [2011] International Legal Procedure 6 (July 8, 2010).
FOREIGN SOVEREIGN IMMUNITY
In lawsuit to regain possession of Pissarro painting
allegedly confiscated by Nazi agents and eventually acquired by Spanish
government foundation, Ninth Circuit, sitting en banc, finds that FSIA
expropriation exception applies, and that Spanish state‑owned Foundation
conducted sufficient commercial activities in U.S.
Claude Cassirer (Plaintiff) claims that in 1939 an agent of
the Nazi regime in Germany unlawfully seized a painting by French impressionist
painter Camille Pissaro (1830‑93) from his grandmother Lilly Cassirer. The
painting at issue is “Rue Saint‑Honore, Apres‑midi, Effet de la pluie.” Lilly
allegedly sold the painting for only about $360 to a Nazi government appraiser
out of fear that otherwise she might not be able to leave Germany.
Decades later, after the painting had been sold several
times to different parties, art collector Baron Hans‑Heinrich Thyssen‑Bornemisza
bought it. The Museum of the Thyssen‑Bornemisza Collection Foundation, an
instrumentality of the Spanish government (Foundation) is displaying it now in
Madrid. The Foundation claims it has good title to the painting.
In 2005, Plaintiff sued in a California federal court to
reclaim the painting. Spain and the Foundation moved to dismiss based on
sovereign immunity. See the Foreign Sovereign Immunities Act (FSIA), 28 U.S.C.
1602ff. The District Court denied the motion, and an appeal ensued. A majority
of the U.S. Court of Appeals for the Ninth Circuit, sitting en banc, had
remanded in 2009 after finding, as a matter of first impression, that the
expropriation exception did apply in this case.
At that time, the Court, however, instructed the District
Court to conduct a prudential exhaustion analysis. See 2009 International Law
Update 112. Plaintiff based his claim on the expropriation exception to
sovereign immunity. Spain and the Foundation disagree. They argue [1] that they
were not the ones who had expropriated the painting, [2] that Plaintiff should
have first exhausted any remedies available in Germany, and [3] that the U.S.
Court lacked personal jurisdiction over it.
A 9 to 2 majority of the U.S. Court of Appeals for the Ninth
Circuit, in an en banc opinion, concludes that the case does fall within the
“expropriation” exception, 28 U.S.C. 1605(a)(3), and that the district court,
therefore, did have subject matter jurisdiction to hear the case. The
Foundation is not immune, even though it was not the original expropriator of
the painting. Moreover, it has engaged in various activities within the U.S.,
such as enticing U.S. visitors to pay admissions to the museum; these amount to
commercial activities for purposes of Section 1605(a)(3). Finally, the Court
notes that, in cases such as this, exhaustion of remedies is not a prerequisite
to federal judicial jurisdiction.
The Court first considers whether it has appellate
jurisdiction. “It is well settled that sovereign immunity is within this small
category of cases from which an immediate appeal will lie. ... The point of
immunity is to protect a foreign state that is entitled to it from being
subjected to the jurisdiction of courts in this country, protection which would
be meaningless were the foreign state forced to wait until the action is
resolved on the merits to vindicate its right not to be in court at all. Thus,
we have jurisdiction to review the district court’s order denying sovereign
immunity.”
“The same is not true [1] of the court’s orders denying
motions to dismiss for lack of a case or controversy and [2] [the ruling on]
personal jurisdiction. ... Van Cauwenberghe v. Biard, 486 U.S. 517, 526‑27
(1988), and Batzel v. Smith, 333 F.3d 1018, 1023 (9th Cir. 2003), both
recognize that denial of a motion to dismiss for lack of personal jurisdiction
is neither a final decision nor appealable under the “collateral order”
doctrine.
“The FSIA presents a novel situation, however, in that
personal jurisdiction over a foreign state exists under the statute if it is
not immune and if proper service has been made. 28 U.S.C. § 1330(b) ... Because
the one follows from the other, the rulings arguably are so related that we
should consider extending our collateral order jurisdiction over sovereign
immunity to resolve personal jurisdiction as well. ... We see no reason to do
so here, however, for the decision points are different.”
“The Foundation argues that exercising personal jurisdiction
offends due process. To resolve this argument, we would need to decide [1]
whether a foreign state or an instrumentality of a foreign state is a ‘person’
for purposes of the Due Process Clause, [2] whether the FSIA incorporates the
requirements of ‘minimum contacts,’ and [3] whether the Foundation has
sufficient minimum contacts with the United States to support general or
specific jurisdiction.
“[Defendant’s] stance on sovereign immunity, on the other
hand, turns on whether the takings exception applies only to a foreign state
that has itself taken property in violation of international law, and whether
the Foundation has engaged in a commercial activity in the United States. In
short, a decision that a foreign state is not entitled to sovereign immunity
under the FSIA is not ‘inextricably intertwined’ with a decision that the
exercise of personal jurisdiction comports with due process. ... Therefore, we
decline to expand our collateral order jurisdiction to append review of the
latter to the former.”
“Although we have not previously addressed whether denial of
a motion to dismiss for lack of a case or controversy is an immediately
appealable collateral order, other circuits have indicated that questions of
standing, case or controversy, and ripeness are, like the question of personal
jurisdiction, not immediately appealable. ... We routinely consider these
issues on appeal from a final judgment, ... and are not persuaded that the
district court’s order refusing to dismiss this action for lack of a case or
controversy should be immediately appealable.”
“While a favorable ruling would remove Spain from the
lawsuit just as immunity would do, so too would prevailing on a myriad of other
pretrial motions. Achieving an effectively similar result is no reason to bring
denial of such motions within the ‘small category’ of decisions that merit
immediate review, otherwise the category would be small no longer. Accordingly,
we have no appellate jurisdiction to review the district court’s denial of
motions to dismiss for lack of personal jurisdiction and [the absence of] a
case or controversy.” [Slip op. 8‑10]
The Court then defines the justiciable issue in this appeal.
“... [Plaintiff] invokes only the ‘expropriation’ exception in § 1605(a)(3).
[It] provides that a foreign state is not immune in any case ‘in which rights
in property taken in violation of international law are in issue and that
property or any property exchanged for such property is present in the United
States in connection with a commercial activity carried on in the United States
by the foreign state; or that property or any property exchanged for such
property is owned or operated by an agency or instrumentality of the foreign
state and that agency or instrumentality is engaged in a commercial activity in
the United States[.]’”
“So far as the first condition is concerned, a taking
offends international law [1] when it does not serve a public purpose, [2] when
it discriminates against those who are not nationals of the country, or [3]
when it is not accomplished with payment of just compensation. ... ‘At the
jurisdictional stage, we need not decide whether the taking actually [did
violate] international law; as long as a ‘claim is substantial and
nonfrivolous, it provides a sufficient basis for the exercise of our
jurisdiction.’’ ... On appeal, neither Spain nor the Foundation contends that
[Nazi] Germany’s actions with respect to the painting were not a taking in
violation of international law.”
“So far as the commercial activity prong is concerned, just
the second clause is pertinent here as there is no dispute [that] the painting
is not ‘present in the United States.’ Thus, there is jurisdiction under § 1605(a)(3)
if the Foundation—which admittedly owns the painting and concedes it is an
instrumentality of Spain for purposes of the statute—‘is engaged in a
commercial activity in the United States.’ ‘A ‘commercial activity’ means
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.’ 28 U.S.C. § 1603(d).”
“With this by way of background, we turn to the questions
that are dispositive here: [1] whether § 1605(a)(3) covers a claim against
Spain and the Foundation when neither was the foreign state that took the
painting in violation of international law; [2] whether the Foundation is
engaged in a sufficient commercial activity in the United States; and [3]
whether exhaustion of remedies is required as a prerequisite to jurisdiction.”
[Slip op. 11‑13]
Spain and the Foundation mainly contend that they were not
the wrongdoers but only later purchasers, and that the FSIA expropriation
exception only applies to the foreign state that expropriated the property at
issue. The Court agrees with the District Court’s interpretation that the FSIA
does not require that the foreign state against whom the claim is made also be
the expropriating entity. Section 1605(a)(3) simply excepts from immunity “a
foreign state” in any case “in which rights in property taken in violation of
international law are in issue.” The Court thus accepts the plain meaning of
the FSIA section. Congress meant for jurisdiction to exist over claims against
a foreign state or its instrumentality for expropriated property, as long as
the entity engages in commercial activity in the U.S.
Next, the Foundation argues that its commercial activities
in the U.S. are de minimis, and lack the requisite connection to the property
at issue. “It is clear that activity need not be motivated by profit to be
commercial for purposes of the FSIA. ... As § 1603(d) provides, the commercial
character of an activity depends on its nature rather than its purpose. Thus,
it does not matter that the Foundation’s [U.S.] activities are undertaken on
behalf of a non‑profit museum to further its cultural mission. ... The
important thing is that the actions are ‘the type of actions by which a private
party engages in trade and traffic or commerce.’ Republic of Argentina v.
Weltover, Inc., 504 U.S. 607, 614 (1992) ...”
“After allowing jurisdictional discovery on the issue, the
district court found that the Foundation engages in commercial activities in
the United States that include: buying books, posters, and post cards;
purchasing books about Nazi expropriation of works of art; selling posters and
books, and licensing reproductions of images; paying United States citizens to
write for exhibit catalogs; shipping gift shop items to purchasers in the
United States, including a poster of the Pissarro painting; recruiting writers
and speakers to provide services at the museum; permitting a program to be
filmed at the museum that included the Pissarro painting and was shown on
Iberia Airlines flights between Spain and the United States; [and many other
commercial activities]. ¼ These findings are supported in the record and are not
clearly erroneous.”
“The Foundation faults the district court for having failed
to require a nexus between the activity and the lawsuit, as well as a quantum
of activity that has a substantial connection with the United States. It
suggests that Congress meant to meld traditional concepts of personal
jurisdiction with subject matter jurisdiction under the FSIA.”
“The second clause of § 1605(a)(3), however, contains no
requirement that a lawsuit arise out of specific activity having to do with the
property in the United States, that is, there is no express analogue to the
traditional doctrine of specific jurisdiction; nor does it explicitly require
any particular level of activity or conduct commensurate to that normally
contemplated for general jurisdiction. ¼ Beyond this, the statute
says nothing particularly helpful about what constitutes ‘a’ commercial
activity that is either a ‘regular course of commercial conduct’ or a
‘particular commercial transaction or act.’ Instead, Congress left it to the
courts to flesh out on a case‑by‑case basis. Here, the Foundation had many
contacts with the United States that constitute commercial activity for
jurisdictional purposes under the second prong of § 1605(a)(3).” [Slip op. 20‑24]
Finally, Spain argues that Plaintiff failed to exhaust
judicial remedies in Germany or Spain before suing under the FSIA expropriation
exception. Again, the Court disagrees. “[W]e rely on the plain language of §
1605(a)(3) which contains no exhaustion requirement. This was the district
court’s primary conclusion, and it is one with which we agree.”
“‘Where Congress specifically mandates, exhaustion is
required. But where Congress has not clearly required exhaustion, sound
judicial discretion governs.’ ... The expropriation exception says nothing at
all about exhaustion of remedies. it does not, for example, condition immunity
on a claimant’s having first presented his claim to the courts of the country
being sued, or to the courts of the country that did the taking, or to any
international tribunal. Spain identifies no language in the FSIA that would
obligate [Plaintiff] to exhaust. It follows that exhaustion is not a statutory
prerequisite to jurisdiction. ...”
“This brings us to Sarei v. Rio Tinto, PLC, 550 F.3d 822
(9th Cir. 2008) (en banc), which was rendered after the district court’s
decision in this case and in which we discussed whether prudential exhaustion
should apply to claims under the Alien Tort Claims Act (ATCA) ... There,
residents of Papua New Guinea alleged various crimes against humanity and
environmental torts arising out of Rio Tinto’s mining operations in Papua New
Guinea. Recognizing that the Supreme Court had signaled in Sosa v. Alvarez‑Machain,
542 U.S. 692, 733 n.21 (2004), that a prudential or judicially‑imposed
exhaustion requirement ‘would certainly’ be considered in an appropriate case
under the ATCA, we held that Sarei was such a case.”
“Neither Sosa nor Sarei, however, offers any basis for
reading a mandatory exhaustion requirement into § 1605(a)(3). Both the Supreme
Court in Sosa and we in Sarei were discussing prudential or discretionary
exhaustion, not statutory or mandatory exhaustion that may condition
jurisdiction. Unlike statutory exhaustion, which, if clearly imposed by
Congress, is mandatory and may also be jurisdictional, ‘[j]udicially imposed or
prudential exhaustion is not a prerequisite to the exercise of jurisdiction,
but rather is ‘one among related doctrines including abstention, finality, and
ripeness that govern the timing of federal‑court decision making.’ ‘ Sarei,
supra at 828.”
“For this reason, we do not consider whether exhaustion may
apply to the claims asserted in this case. We have answered the question before
us whether Spain is entitled to sovereign immunity under the FSIA. Necessarily,
to do so we had to decide whether exhaustion is a statutory prerequisite to
jurisdiction. We have determined that it is not: the expropriation exception
does not mandate exhaustion. The district court went no further, nor do we. ...
We simply hold that the district court has power to entertain [Plaintiff’s]
claim against Spain as well as the Foundation.” [Slip op. 24‑30]
Citation: Cassirer v. Kingdom of Spain, 616 F.3d 1019
(9th Cir. 2010) (en banc).
