22Oct
By: Tom On: October 22, 2019 In: International Litigation, International Service of Process Comments: 0
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The Foreign Sovereign Immunities Act (FSIA) is the “sole basis” for obtaining jurisdiction over foreign sovereigns in American courts.[1] “Once the defendant presents prima facie evidence that it is a foreign sovereign, the burden falls on the plaintiff to establish by a preponderance of the evidence that an exception under FSIA permits jurisdiction over the foreign sovereign.”[2]

In a 2019 case, the Republic of Moldova challenged the plaintiff’s ability to bring an action against it under FSIA. The Republic of Moldova lost on all accounts. However, the court in this case presented a summary of the factors to be considered before filing a FSIA action.

Below is a brief of the FSIA law as it was taken from this case as well as some supplemental references.

Jurisdiction

Jurisdictional questions under FSIA are determined under federal law.[3] The exceptions to FSIA, which destroy a foreign state’s immunity are:

  1. 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. 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;
  3. the rights in property taken in violation of international law are in issue and that property or any property exchanged for such property is present in the United States in connection with a commercial activity carried on in the United States by the foreign state; or that property or any property exchanged for such property is owned or operated by an agency or instrumentality of the foreign state and that agency or instrumentality is engaged in a commercial activity in the United States;
  4. the rights in property in the United States acquired by succession or gift or rights in immovable property situated in the United States are in issue;
  5. damages are sought against a foreign state for personal injury or death, or damage to or loss of property, occurring in the United States and caused by the tortious act or omission of that foreign state or of any official or employee of that foreign state while acting within the scope of his office or employment; except this paragraph shall not apply to—
    1. (A) any claim based upon the exercise or performance or the failure to exercise or perform a discretionary function regardless of whether the discretion be abused, or
    2. (B) any claim arising out of malicious prosecution, abuse of process, libel, slander, misrepresentation, deceit, or interference with contract rights; or
  6. the action is brought, either to enforce an agreement made by the foreign state with or for the benefit of a private party to submit to arbitration all or any differences which have arisen or which may arise between the parties with respect to a defined legal relationship, whether contractual or not, concerning a subject matter capable of settlement by arbitration under the laws of the United States, or to confirm an award made pursuant to such an agreement to arbitrate, if (a) the arbitration takes place or is intended to take place in the United States, (b) the agreement or award is or may be governed by a treaty or other international agreement in force for the United States calling for the recognition and enforcement of arbitral awards, (c) the underlying claim, save for the agreement to arbitrate, could have been brought in a United States court under this section or section 1607, or (d) paragraph (1) of this subsection is otherwise applicable.[4]

Rule 12(b)(1) permits dismissal of a claim for lack of subject matter jurisdiction. Fed. R. Civ. P. 12(b)(1). A plaintiff asserting subject matter jurisdiction has the burden of proving by a preponderance of the evidence that it exists. See Makarova v. United States, 201 F.3d 110, 113 (2d Cir. 2000). “[I]n resolving a motion to dismiss for lack of subject matter jurisdiction under Rule 12(b)(1), a district court… may refer to evidence outside the pleadings.”

Venue

In a FSIA action, venue is proper if one of the following conditions is true:

  1. in any judicial district in which a substantial part of the events or omissions giving rise to the claim occurred, or a substantial part of property that is the subject of the action is situated;
  2. in any judicial district in which the vessel or cargo of a foreign state is situated, if the claim is asserted under section 1605(b) of this title;
  3. in any judicial district in which the agency or instrumentality is licensed to do business or is doing business, if the action is brought against an agency or instrumentality of a foreign state as defined in section 1603(b) of this title; or
  4. in the United States District Court for the District of Columbia if the action is brought against a foreign state or political subdivision thereof.[5]

“On a motion to dismiss for improper venue under Rule 12(b)(3), the burden of proof lies with the plaintiff to show that venue is proper.”[6] “Unless the court holds an evidentiary hearing, however, `the plaintiff need only make a prima facie showing of venue.'”[7] In determining whether a plaintiff has met this burden, courts must view “all facts in the light most favorable to the non-moving party.”[8]

Service of Process

[Note: This section was not included in the court’s opinion, but is included here for completeness.]

Service upon a foreign state is hierarchical and defined at 28 USC §1608(a)[9]

  1. by delivery of a copy of the summons and complaint in accordance with any special arrangement for service between the plaintiff and the foreign state or political subdivision; or
  2. if no special arrangement exists, by delivery of a copy of the summons and complaint in accordance with an applicable international convention on service of judicial documents; or
  3. if service cannot be made under paragraphs (1) or (2), by sending a copy of the summons and complaint and a notice of suit, together with a translation of each into the official language of the foreign state, by any form of mail requiring a signed receipt, to be addressed and dispatched by the clerk of the court to the head of the ministry of foreign affairs of the foreign state concerned, or
  4. if service cannot be made within 30 days under paragraph (3), by sending two copies of the summons and complaint and a notice of suit, together with a translation of each into the official language of the foreign state, by any form of mail requiring a signed receipt, to be addressed and dispatched by the clerk of the court to the Secretary of State in Washington, District of Columbia, to the attention of the Director of Special Consular Services—and the Secretary shall transmit one copy of the papers through diplomatic channels to the foreign state and shall send to the clerk of the court a certified copy of the diplomatic note indicating when the papers were transmitted. As used in this subsection, a “notice of suit” shall mean a notice addressed to a foreign state and in a form prescribed by the Secretary of State by regulation.

Importantly, foreign states are allowed 60 days – the same as the Federal government — respond to service. This 60 day response time requires a clerk of the court to issue a special summons.

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Notes

[1] Argentine Republic v. Amerada Hess Shipping Corp., 488 U.S. 428, 434 (1989).
[2] Swarna v. Al-Awadi, 622 F.3d 123, 143 (2d Cir. 2010).
[3] 28 USC §1604; Karaha Bodas Co., LLC v. Perusahaan Pertambangan Minyak Dan Gas Bumi Negara, 313 F.3d 70, 85 (2d Cir. 2002).
[4] 28 USC §1605(a). Note the court only cited and discussed §1605(a)(6). For the admiralty law exceptions see §1605(b). §1607 waives a foreign state’s immunity if that state files a counter claim. These later two points were not addressed by the court.
[5] 28 U.S. Code §1391(f). This statue was not included in the court’s opinion.
[6] NextEngine Inc. v. NextEngine, Inc., 2019 WL 79019, at *1 (S.D.N.Y. Jan. 2, 2019) (quoting Cartier v. Micha, Inc., 2007 WL 1187188, at *2 (S.D.N.Y. Apr. 20, 2007); see also K.A. Holdings Ltd. of NY v. Chagaris, 2009 WL 10685159, at *5 (S.D.N.Y. Nov. 13, 2009) (“On a motion to dismiss for improper venue, the plaintiff has the burden of establishing that it has chosen a proper venue.”).
[7] Id.
[8] TradeComet.com LLC v. Google, Inc., 647 F.3d 472, 475 (2d Cir. 2011).
[9] Service of agencies and instermentalities are also hierarchical and defined by §1608(b).


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