Case ID: f-appx_560/html/0672-01.html
Source: Caselaw Access Project
Author: {"author": "", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

FG HEMISPHERE ASSOCIATES, LLC, Plaintiff-Appellee, v. UNOCAL CORPORATION, Intervenor-Plaintiff-Appellant. FG Hemisphere Associates, LLC, Plaintiff-Appellee, and Unocal Corporation, Intervenor-Plaintiff, v. Democratic Republic of Congo, aka Republic of Zaire, Defendant-Appellant.
    Nos. 12-56031, 12-56110.
    United States Court of Appeals, Ninth Circuit.
    Argued and Submitted Feb. 10, 2014.
    Filed March 4, 2014.
    Amy Pesapane Lally, Esquire, Peter I. Ostroff, Esquire, Michelle Beth Goodman, Sidley Austin LLP, Los Angeles, CA, for Plaintiff-Appellee.
    Christopher Rivas, Reed Smith LLP, Los Angeles, CA, Douglas Boven, Karen Ann Braje, Esquire, Dennis Peter Maio, Esquire, Reed Smith LLP, Craig Stewart, Jones Day, San Francisco, CA, for Inter-venor-Plaintiff-Appellant.
    Before: FARRIS, N.R. SMITH, and WATFORD, Circuit Judges.
   MEMORANDUM

Unocal and the Democratic Republic of Congo (DRC) appeal from the district court’s judgment that future oil tax revenues owed to the DRC by ODS, Ltd., a subsidiary of Unocal, were not immune from execution based on an exception established by the Foreign Sovereign Immunities Act (FSIA) for property of a foreign sovereign that is located and used for commercial activity in the United States, 28 U.S.C. §§ 1609-10. We have jurisdiction under the collateral order doctrine. See Gupta v. Thai Airways Int’l, Ltd., 487 F.3d 759, 763 (9th Cir.2007).

The availability of the alter ego doctrine to determine the location of intangible property for FSIA purposes is a question of law that is reviewed de novo. See Fourth Inv. LP v. United States, 720 F.3d 1058, 1066 (9th Cir.2013). Questions of exceptions to sovereign immunity under the FSIA are reviewed de novo. Af-Cap, Inc. v. Chevron Overseas (Congo) Ltd., 475 F.3d 1080, 1085-86 (9th Cir.2007).

California law determines the location of intangible assets for the purposes of the FSIA. See Peterson v. Islamic Republic of Iran, 627 F.3d 1117, 1130 (9th Cir.2010) (holding that enforcement proceedings “are governed by the law of the state in which the court sits” unless it conflicts with applicable federal law). Under California law, a right to payment is located where the debtor (who must pay) is located. Id. at 1131. Unocal is located in the U.S.; however, ODS, the formal debtor owing the payment, is a Bermuda corporation. Nonetheless, applying the alter ego doctrine to ODS, the district court held the right to payment was located in the U.S., because Unocal was located there.

Applying the alter ego doctrine to disregard the separate legal status of Unocal and ODS to find the DRC’s right to payment is located in the United States would constitute a novel extension of California law. In prior cases, the plaintiff has been owed substantive relief by the corporate entity. Hennessey’s Tavern, Inc. v. Am. Air Filter Co., 204 Cal.App.3d 1351, 251 Cal.Rptr. 859, 863 (1988). (The alter ego doctrine serves as a procedural mechanism that holds “the alter ego individuals liable on the obligations of the corporation.”). Here, neither Unocal nor ODS owes FG anything.

Moreover, California courts have rejected previous attempts by plaintiffs to expand the reach of the alter ego doctrine. See Stodd v. Goldberger, 73 Cal.App.3d 827, 141 CaLRptr. 67, 71 (1977) (rejecting alter ego theory where bankruptcy trustee failed to allege injury by corporation); Postal Instant Press, Inc. v. Kaswa Corp., 162 Cal.App.4th 1510, 77 Cal.Rptr.3d 96, 102-03 (2008) (rejecting the creation of an outsider reverse veil piercing theory of alter ego liability). Absent firmer support than FG has provided us, we do not think the California Supreme Court would extend the alter ego doctrine to this context. Thus, we decline to do so. See, e.g., Morrell Constr., Inc. v. Home Ins. Co., 920 F.2d 576, 578-79 (9th Cir.1990).

REVERSED. 
      
       This disposition is not appropriate for publication and is not precedent except as provided by 9th Cir. R. 36-3.