Judge Garland & The Foreign Sovereign Immunity Act

As promised, this post surveys several Foreign Sovereign Immunity Act (FSIA) opinions penned by Judge Garland while on the D.C. Circuit. Judge Garland has had occasion to consider several of the statutory exceptions to foreign sovereign immunity. This post concludes with some general observations of Judge Garland as a jurist gleaned from his FSIA cases.

El-Hadid v. United Arab Emirates, 216 F.3d 29 (D.C. Cir. 2000). El-Hadid originated with a suit brought by an Egyptian citizen contesting the termination of his employment with the US embassy of the United Arab Emirates (UAE). El-Hadid, an auditor who alleged that he was terminated following his discovery that the embassy had misappropriated funds, brought suit under the FSIA against the sovereign and the embassy for breach of contract and defamation. The district court — ruling on the pleadings — denied UAE’s motion to dismiss and held that (1) the employment relationship fell within the “commercial activity” exception to FSIA and (2) the defamation claim did not trigger the libel exception to the non-commercial tort exception. The decision below hinged on the fact that the plaintiff was not a national of the UAE, which suggested he was not a part of the UAE’s national civil service — an employment relationship that would constitute governmental, rather than commercial, activity within the meaning of the statute. In so ruling, the district court had relied upon language in the D.C. Circuit’s opinion in Broadbent v. Organization of American States, which implied that employment relationships between an international organization and US citizens (or third country nationals) were per se a form of commercial activity. Incidentally, by suggesting in Broadbent that the nationality of the employee might be dispositive of whether the relationship between the parties was of a commercial or governmental nature, the D.C. Circuit had departed from the approach employed in other circuits, which had adopted a multifactorial test. See Holden v. Canadian Consulate.

The question presented on interlocutory appeal was whether the two claims fell within any of the FSIA’s exceptions, or within any exceptions to the exceptions. Undertaking de novo review as is customary, Judge Garland and the panel reversed in part and remanded for further proceedings to generate more facts in the record regarding the precise nature of the employment relationship. Judge Garland distinguished the Circuit’s Broadbent opinion, describing the relevant language as “dictum” in light of the fact that the defendant in that case was an international organization (which would not normally employ civil servants) rather than a foreign sovereign (which would). Judge Garland reasoned that a per se rule of non-immunity when a state employs third country nationals would be inconsistent with the general thrust of the FSIA and with Congress’s intention that states should enjoy immunity except under defined circumstances. In so ruling, he opined that the courts have “no warrant for formulating a test that turns solely on nationality.” Turning to the defamation claim, Judge Garland gave the FSIA a close read and noted that Congress did not provide that alleged acts of defamation arising out of commercial activities (as compared with non-commercial torts) would be immune from suit.

Although many appellate judges might have been content to simply remand the suit, this particular opinion is notable in going further and providing guidance to the district court as to the types of questions that should guide its inquiry into the nature of El-Hadid’s work, with his nationality being one factor among many. As with any multi-factor test, the opinion acknowledges the inevitable trade-off between precision and flexibility, but insists that this outcome was dictated by the vague terms of statute itself, as well as its legislative history, which contemplates courts exercising some discretion in applying undefined statutory terms. This statutory language and the FSIA’s legislative history are open to conflicting interpretations and could probably have gone either way. In reaching the outcome he did, Judge Garland gave greater weight to the presumed congressional intent behind the statutory scheme as a whole than to an ambiguous snippet drawn from the statute’s “muddy legislative history,” and better aligned the D.C. Circuit with the approach adopted elsewhere.

World Wide Minerals v. Republic of Kazakhstan, 296 F.3d 1154 (D.C. Cir. 2002). This case emerged out of the collapse of a business arrangement between a Canadian corporation and the Republic of Kazakhstan to manage a mining complex. Kazakhstan’s failure to issue the plaintiff an export license for mined uranium, and its subsequent expropriation of World Wide’s assets, gave rise to a constellation of claims for fraudulent inducement, conversion, tortious interference, conspiracy, and violations of the Racketeer Influenced and Corrupt Organizations Act (RICO). The plaintiff’s case hinged on the waiver exception to the FSIA and the argument that Kazakhstan had expressly waived its immunity in the web of agreements between the parties.

The panel, with Judge Garland at the helm, ultimately agreed that the first and fourth agreements contained express waivers of immunity. (Indeed, the text of the final agreement referred specifically to the FSIA). When it came to the scope of this waiver, however, the panel disagreed with the district court, which had held that the operative language expressed an intention to waive immunity for the entire lawsuit, rather than just for claims arising out of those two agreements. Concluding that Kazakhstan’s intent was sufficiently “ambiguous,” the panel refused to extend the express waivers to claims arising out of the other two agreements or to the tort/quasi-tort claims. The panel explained that this more cautious approach was dictated by its obligation to narrowly construe any waiver in favor of the sovereign. Although the plaintiff ultimately hung its hat on the express contractual waivers, the opinion does consider some of the grounds on which a sovereign defendant can be deemed to have impliedly waived sovereign immunity and found not present in the case.

The three claims that survived the motion to dismiss for lack of subject matter jurisdiction met their demise by application of the act of state doctrine, the basis on which the district court had dismissed the entire lawsuit. Judge Garland looked to the precedent of multiple circuits to conclude that the relief sought would require the panel to rule on the validity of two acts of state — the issuance of an export license and the expropriation/conversion of property within a foreign state’s territory. World Wide tried to salvage these remaining claims by advancing a “commercial activity” exception to the act of state doctrine. Some circuits have recognized such an exception in the wake of Alfred Dunhill of London, Inc. v. Republic of Cuba, in which a plurality toyed with concept as a parallel to the restrictive theory of sovereign immunity then under development. The World Wide panel, however, determined that the commercial activity at issue concerned legal claims for which there was no subject matter jurisdiction following the FSIA analysis (or was not the subject of any counts in the complaint at all, curiously). Accordingly, the panel was able to dodge the question of whether the D.C. Circuit should or would recognize any such exception to the act of state doctrine.

The only claim to survive the appeal was one against a rival corporation, registered in New York and headquartered in Connecticut, which appeared to have been granted the exclusive rights to the entire US quota of uranium from Kazakhstan. This claim was remanded with instructions to conduct a more searching personal jurisdiction analysis to determine whether the alleged conspiratorial conduct occurred within the District of Columbia so as to satisfy the operative long-arm statute.

The outcome on the waiver question is debatable, and the court could credibly have ruled differently. The agreements containing the waiver bookended the agreements that were silent on waiver, suggesting that the parties may have assumed that Kazakhstan was waiving its immunity with respect to the entire business arrangement encompassed by the suite of agreements. Somewhat paradoxically, Judge Garland suggests that the ambiguity as to sovereign intent may have been lessened had the fourth agreement not included an express waiver. In addition, although Judge Garland reasoned that the existence of forum selection and choice of law clauses in the other agreements added to the ambiguity, an equally reasonable jurist could have concluded that these provisions indicated that Kazakhstan contemplated that it might be sued and was seeking to manage where suit would be brought and under what law the dispute would be decided. All that said, the opinion is carefully reasoned and acknowledges World Wide’s arguments. World Wide is now regularly cited for the proposition that even explicit waivers must be narrowly construed, a position that the D.C. Circuit is not alone in taking. See Capital Ventures Int’l v. Rep. of Argentina (waivers must “give a clear, complete, unambiguous and unmistakable manifestation of the sovereign’s intent to waive immunity”).

On the act-of-state question, although a commercial activity exception might have rendered the export license subject to review, the expropriation of property within the foreign state’s own territory is a classic “act of state.” Indeed, in the seminal case of Banco Nacionale de Cuba v. Sabbatino, 376 U.S. 398 (1964), the Supreme Court ruled that extraterritorial expropriations — no matter how discriminatory, retaliatory, or violative of international law — are unreviewable in US courts. World Wide’s suit was likely doomed in any case since it involved two foreign entities that had entered into contracts with forum selection, choice of law, and arbitration clauses suggesting that any dispute should be resolved by arbitration in Kazakhstan or Sweden and potentially under Kazakhstani law.

Kilburn v. Libya, 376 F.3d 1123 (D.C. Cir. 2004). Lest one come away with the impression that Judge Garland has a propensity to protect foreign sovereigns from suit, the next couple of cases come out in favor of jurisdiction. Kilburn was initiated by the estate of a US citizen kidnapped by Hezbollah in Lebanon and then sold to operatives associated with a terrorist group funded by Libya who tortured and killed him. Iran — which was joined at the outset for its putative support of Hezbollah — defaulted, but Libya entered an appearance. The district court had rejected Libya’s motion to dismiss for lack of subject matter jurisdiction and for failure to state a claim upon which relief could be granted, and this interlocutory appeal followed.

In its appeal, Libya challenged not only the legal sufficiency of the plaintiff’s jurisdictional allegations (i.e., whether the case fell within one of the FSIA’s exceptions), but also the factual basis for the court’s exercise of jurisdiction, requiring the court to peer behind the pleadings. The first line of argument hinged on the degree of causation required in order to satisfy the terrorism exception to the FSIA. The panel rejected the defendants’ contentions (1) that “but for” causation was required and (2) that plaintiffs must prove that Libya provided support directly to the specific act giving rise to the claim. In so ruling, Judge Garland reasoned by analogy from Supreme Court precedent interpreting a similar statutory formulation to require only a showing of proximate causation at this jurisdictional stage. The panel was careful to note that individual torts alleged by plaintiffs carry their own causation requirements, which would become operative once the suit proceeded to the merits. Ultimately, the panel found that plaintiff’s allegations were sufficient to bring the claims into the FSIA’s terrorism exception. In so ruling, Judge Garland made reference to Congress’s goal of enabling suits against state sponsors of terrorism, implying that the terms of the provision should not be read to erect too high a bar to recovery, particularly given Congress’s observation that state sponsors of terrorism often endeavor to conceal their material support to terrorist acts.

In terms of Libya’s second line of argument, the panel concluded that the district court conducted appropriately limited jurisdictional discovery and that plaintiff had adduced sufficient evidence — including US government documents and the affidavit of the former US Counterterrorism Coordinator — to move forward. This ruling implicated the allocation of the burden of production in FSIA cases. At the time, a bit of a circuit split seemed to have been developing. In Kilburn, the panel did not choose sides in this split, because it determined that the plaintiff had met any burden of production it may have had and that Libya had failed to meet any burden — of production or persuasion — at all. Since then, the circuits have generally trended toward shifting the initial burden of production to the plaintiff on the theory that because the FSIA establishes what amounts to a presumption, the party invoking immunity bears on the initial burden of establishing a prima facie claim that it qualifies for immunity, which shifts the burden of production to the plaintiff to overcome the presumption. Incidentally, the D.C. Circuit appears to have since joined the general trend in Bell Helicopter Textron, Inc. v. Islamic Rep. of Iran.

Judge Garland declined to exercise appellate jurisdiction over other rulings by the district court, such as Libya’s argument that the denial of its 12(b)(6) motion also deserved interlocutory appeal under a theory of “pendant appellate jurisdiction,” which would apply when the normally-unappealable issue is “inextricably intertwined” with and “necessary to ensure meaningful review” of the issue that was properly subject to appeal. The D.C. Circuit had been somewhat of an outlier amongst the circuits on this point in evincing a greater willingness to accept pendent appellate jurisdiction. Nonetheless, Judge Garland — potentially parting ways with his colleagues — wisely declined to expand the collateral orders doctrine to entertain an appeal of the denial of defendant’s 12(b)(6) motion.

Interestingly, the US government apparently weighed in for the appellee. Although the case had the potential to touch upon acute foreign policy concerns, the US government’s position is barely acknowledged in the opinion, even while the panel resolved the dispute in keeping with the Executive Branch’s preferences.

Mwani v. Bin Laden, 417 F.3d 1 (D.C. Cir. 2005). This tragic case arose out of the attack on the US embassy in Kenya in 1998. The plaintiffs — all Kenyan nationals — brought suit against Afghanistan under the FSIA (for allegedly providing logistical and other support to al-Qaeda) and against Osama bin Laden and al-Qaeda under the Alien Tort Statute (ATS) (for allegedly orchestrating the attack). The opinion touches upon a number of civil procedure issues that frequently arise in transnational civil litigation, including service by publication, personal jurisdiction and the reach of long-arm statutes, and the standard for taking a default.

Writing for the panel, Judge Garland affirmed the district court in dismissing plaintiffs’ claims against Afghanistan on the ground that they did not satisfy the commercial activity exception to the FSIA. (The terrorism exception was unavailing because Afghanistan had not been designated a state sponsor of terrorism, and the plaintiffs were all foreign nationals). Despite valiant and creative arguments by the plaintiffs (e.g., that Afghanistan’s financial support for terrorism was “paradigmatically mercantile”), they were unable to overcome Judge Garland’s views — and controlling precedent — that the test is whether the acts in question are the type of conduct typically performed by private parties engaging in trade or commerce.

The panel reversed the dismissal for lack of personal jurisdiction with respect to the other defendants, however, on the theory that because al-Qaeda directed its conduct toward this country, it should reasonably anticipate being haled into court here. In so holding, the panel adjusted the statutory basis for exercising personal jurisdiction, shifting it from the District of Columbia’s long-arm statute to the federal long arm statute, FRCP 4(k)(2), which allows plaintiffs to aggregate nationwide contacts to satisfy the Fifth Amendment Due Process Clause. Although that rule was 10 years old at this point, its reach presented an issue of first impression for the Circuit. This switch in time rescued the plaintiffs’ cause of action against the non-sovereign defendants. See n.10 (noting that while plaintiffs did not invoke FRCP 4(k)(2), their “forfeiture” should be “excused” since they advocated a nationwide review of defendants’ contacts).

Although the merits of the case remained on the horizon, Judge Garland tipped his hand a bit on the forthcoming question of whether plaintiffs had stated a claim upon which relief could be granted. Although the panel did not conduct a full analysis under the Supreme Court’s holding in Sosa v. Alvarez-Machain, Judge Garland did signal that the plaintiffs have “more than a colorable argument” that their claims should survive the inevitable Sosa review.

Incidentally, with the death of Bin Laden, plaintiffs had to decide whether to add his estate as a defendant and ultimately chose not to do so. The case eventually survived a Kiobel analysis at the district court but was immediately certified per 28 USC § 1292(b) for interlocutory appeal because the case presented “a controlling question of law as to which there is substantial ground for difference of opinion and that an immediate appeal from the order may materially advance the ultimate termination of the litigation.” The district court eventually conducted a bellwether trial in 2014 and awarded over $100 million in damages to each plaintiff.

Oveissi v. Islamic Republic of Iran, 573 F.3d 835 (D.C. Cir. 2009). Judge Garland had occasion to revisit the terrorism exception to the FSIA in Oveissi. Here, the plaintiff sought to sue Iran, a designated state sponsor of terrorism, and one of its instrumentalities, in connection with the assassination of his grandfather — an official under the regime of the former Shah of Iran, Mohammad Reza Pahlavi — in France, allegedly at the hands of Islamic Jihad operatives deployed by Iran. As is typical in such cases, the defendants defaulted, obliging the district court to satisfy itself that the plaintiff had established his “claim or right to relief by evidence satisfactory to the court.” 28 USC § 1608(e). Following a bench trial, the district court found that the defendants were not entitled to immunity and were in fact liable for Oveissi’s murder, although it ultimately dismissed the plaintiff’s claims for intentional infliction of emotional distress (IIED) and wrongful death following a choice of law analysis. Applying California law (because the plaintiff had resided there for a spell), the district court determined that the grandson lacked standing to bring an IIED claim. Applying Lord Campbell’s Act, it also rejected the wrongful death claim on the theory that the grandfather, as a non-US citizen, could not have recovered under the FSIA had he survived and so his heir should not be able to recover either. (These state-law claims were at issue when the plaintiff brought suit under an earlier iteration of the FSIA that did not provide a federal cause of action against state sponsors of terrorism; accordingly, plaintiff had to invoke state law. See Cicippio-Puleo v. Islamic Republic of Iran. Although he was entitled to refile his action under the new iteration of the legislation, he did not and so the case proceeded under the original version of the law.)

In evaluating plaintiff’s appeal, Judge Garland had to undertake a two-tiered choice-of-law analysis to determine, first, which jurisdiction’s choice of law rules applied, and second, what that law dictated with respect to the IIED and wrongful death claims. Looking to congressional intent and the language of the FSIA, the panel determined that a foreign state stripped of its immunity should be liable in the same manner and to the same extent as a private individual, thus necessitating a standard choice-of-law analysis, which would involve consideration of the forum’s choice of law rules. In adopting this methodology, Judge Garland declined an invitation to identify or craft common law choice-of-law rules and added to an emerging circuit split on the question of whether courts should invoke federal common law choice-of-law rules in connection with the FSIA. Compare Harris v. Polskie Linie Lotnicze with Barkanic v. Gen. Admin. of Civil Aviation of the People’s Rep. of China. This split remains to this day as far as I can tell.

Looking to the forum’s choice-of-law rules, Judge Garland determined that the District of Columbia blends a governmental interests analysis (which seeks to determine which jurisdiction’s policy would be most advanced by having its law applied to the facts) with a most significant relationship test (which necessitates consideration of a number of factors regarding the parties and the facts, as set forth in § 145 of the Restatement (Second) of Conflict of Laws). Applying these rules de novo, the panel determined that the district court should have applied French, rather than California, law given that all of the various factors pointed in the same direction (including that the assassination occurred in France and involved a French domiciliary). Judge Garland thus remanded the suit with instructions to the district court to evaluate plaintiffs IIED and wrongful death claims under French law. Judge Garland hinted that under the new iteration of the terrorism exception in the FSIA, plaintiffs now have a federal cause of action against state sponsors of terrorism, which may merit a consideration of federal common law choice-of-law rules.

Bennett v. Islamic Republic of Iran, 618 F.3d 19 (D.C. Cir. 2010). Bennett was another default case originally brought under the terrorism exception to the FSIA, in which Judge Garland offered a concurrence. The United States intervened in the district court and successfully quashed writs of attachment on former Iranian diplomatic properties located in the District that had been under control of US government since the Iranian Revolution. At issue was the Terrorism Risk Insurance Act, which among other things carves out an exception to the immunity of diplomatic properties from attachment when victims of state sponsors of terrorism seek execution of judgments against “blocked assets” to satisfy compensatory damage awards. (That statute was passed following the attacks of September 11, 2001, in order to make available terrorism risk insurance for commercial property and casualty losses resulting from acts of terrorism and to backstop reinsurance programs with public funds. The Act has been extended several times. See Terrorism Risk Insurance Program Reauthorization Act of 2015.) As custodian of these properties under the Vienna Convention on Diplomatic Relations and the Foreign Missions Act, the US government argued that “blocked assets” do not include property that is being used “exclusively for diplomatic or consular purposes.”

On appeal, the plaintiffs — the parents of a young woman killed in a terrorist attack in Israel by Hamas — conceded that the property was subject to the Vienna Convention; they argued, however, that it had not been used exclusively for these purposes because the United States had, on occasion, rented the properties out to pay for their upkeep. Nonetheless, the majority opinion affirmed the district court’s determination that the properties were immune from attachment. The appeal thus revolved around a question of statutory construction: whether renting the former diplomatic property constitutes a non-diplomatic use, which would render the property amenable to attachment.

The circuit’s judgment, authored by Judge Griffith, honed in on the text of the statute — noting that that the term “diplomatic” seemed to modify the “purposes” for which the property was used rather than the “use” to which the property was put — and concluded that the rental arrangements were undertaken for a diplomatic purpose, i.e., the preservation of the property as is required by statute and treaty. The majority further reasoned that courts should strive to harmonize the United States’ treaty obligations with its statutory law where possible and that any other interpretation would put the United States in arrears of its obligations under the Vienna Convention.

With all due respect, Judge Griffith’s reliance upon the apparent textual distinction between the “purpose of the use” and the “type of use” is not fully convincing. Judge Garland agreed, and his concurrence emphasized the degree of ambiguity in the relevant statutes (particularly given the use of the passive voice (“is being used by”)) and the validity of alternative interpretations that might enable victims to enjoy more than a symbolic victory while at the same time furthering clear congressional intent. Judge Garland would have the courts make a distinction between property being leased to other foreign missions for diplomatic purposes, which would be immune from attachment, and property being leased to private parties, which would be fair game. In the end, Judge Garland concurred in the judgment because none of the property was being leased to private parties at the time of the suit (indeed, all were apparently vacant) and so application of his preferred test reach the same outcome, albeit via a different interpretation of the statutory language.

Judge Merrick Garland: A Snapshot

Even the review of this handful of cases yields some overarching observations about Judge Garland as a jurist. First, from the perspective of technical competence, Judge Garland’s writing is clear and persuasive and his keen analytical skills are regularly on display. His opinions will not necessarily be remembered for their artistry or elegance, but he solves juridical problems with clear and implementable guidance and the occasional wry notes of humor. On substance, while some observers may disagree with the outcomes he reaches, his reasoning is always sound and defensible.

Second, his rulings are properly embedded in relevant case law, although he is not afraid to revisit this precedent if it proves to be unsustainable. See El-Hadid (revising ambiguous D.C. Circuit precedent in connection with a more specific set of facts). He makes regular reference to the opinions of his sister circuits for guidance and affirmation, but also by way of acknowledgement when he diverges from the approach taken elsewhere. See id. at 34 (noting consistency of result with the law of other circuits).

Third, he is not the type of judge who stretches to solve all outstanding problems if there is a narrower basis to proceed or who delights in issuing showy rhetorical pronouncements. See World Wide Minerals (declining to find a commercial activity exception to the act-of-state doctrine where not squarely presented); Kilburn (failing to devise a burden-shifting regime where plaintiff had adduced sufficient evidence to go forward under any possible standard).

Fourth, litigants appearing before him receive a fair and respectful airing of their positions, even when their arguments are ultimately rejected. That said, Judge Garland runs a tight ship and holds litigants to high standards. He generally declines to revive abandoned arguments or entertain new ones on appeal or in reply briefs. See Kappus v. IRS (rebuffing arguments that had been abandoned by the parties); id. n.4 (disregarding argument raised for the first time in plaintiffs’ reply brief). This does not stop him from being empathetic or merciful, however, when not inconsistent with the law or the record. See Mwani (applying federal long-arm statute even though plaintiffs had invoked local law); Bennett (advancing alternative textual argument that would enable victims of terrorism to meaningfully recover).

Fifth, although there are not enough opinions in this tranche to make definitive observations about his tendency to defer (or not) to the Executive Branch, Judge Garland has had a couple of occasions to take such views into account. In one case in which the State Department had weighed in, Judge Garland ruled in the government’s favor but without acknowledgement as such. In his concurrence in Bennett, by contrast, Judge Garland advanced a more nuanced view of the statute at issue than that advocated by the government intervenor. Judge Garland’s proposed solution would better advance congressional intent that victims of terrorism recover while still protecting long-standing State Department concerns about adhering to the United States’ multilateral obligations when it comes to the attachment of diplomatic property, even to satisfy claims of worthy plaintiffs.

Sixth, the fact that many of his opinions are unanimous may indicate an ability to build consensus (which he seems known for), although this assumption would have to be confirmed by a fuller empirical review of the rest of his docket.

In short, the portrait that emerges from this set of cases is that of a careful, scrupulously fair, and thorough judge, who manifests strong analytical skills and a dedication to the orderly pursuit of justice. No surprise that the ABA’s Standing Committee deemed him “well qualified” for the US Supreme Court. Now, if only he received the fair hearing he accords litigants appearing before him… 

About the Author(s)

Beth Van Schaack

Leah Kaplan Visiting Professor of Human Rights, Stanford Law School; Former Deputy to the U.S. Ambassador-at-Large for War Crimes Issues in the U.S. State Department. All views are her own. Follow her on Twitter (@BethVanSchaack).