Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-05-07178/USCOURTS-caDC-05-07178-0/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 

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United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued November 14, 2006 Decided June 22, 2007

No. 05-7178

HIWOT NEMARIAM ET AL.,

APPELLANTS

v.

THE FEDERAL DEMOCRATIC REPUBLIC OF ETHIOPIA AND

THE COMMERCIAL BANK OF ETHIOPIA,

APPELLEES

Appeal from the United States District Court

for the District of Columbia

(No. 00cv01392)

Donald F. Donovan argued the cause for the appellants.

Caroline H. Moustakis, and Colby A. Smith were on brief.

Katherine B. Wilmore entered an appearance.

Knox Bemis argued the cause for the appellees. W. DeVier

Pierson and Thomas R. Snider were on brief.

Before: HENDERSON and TATEL, Circuit Judges, and

SILBERMAN, Senior Circuit Judge.

Opinion for the court filed by Circuit Judge HENDERSON.

KAREN LECRAFT HENDERSON, Circuit Judge: The

appellants—six individuals of Eritrean origin, descent or

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nationality and the class they seek to represent—challenge the

district court’s dismissal of their unlawful takings claims against

the Federal Democratic Republic of Ethiopia (Ethiopia) and the

Central Bank of Ethiopia (CBE) for lack of subject matter

jurisdiction under the Foreign Sovereign Immunities Act (FSIA

or Act), 28 U.S.C. §§ 1330, 1602-1611. The court held that the

appellants’ claims failed to satisfy both the “rights in property”

and the “owned or operated” requirements of 28 U.S.C.

§ 1605(a)(3). As detailed below, we affirm the district court’s

dismissal on alternative grounds.

I.

In May 1998, a long-standing border dispute between Eritrea

and Ethiopia erupted into armed conflict. Approximately one

month later, Ethiopia announced that a vast number of Eritreans

living in the country “were engaged in spying and mobilizing

financial and other resources to support the Eritrean aggression.”

First Amended Class Action Compl. ¶ 46 (Compl.), reprinted

in Joint Appendix (JA) at 599 (internal quotation omitted). As

a result, the appellants claim that they, along with thousands of

other Eritreans, were expelled from the country “without notice

or due process.” Id. at 600. 

In conjunction with their expulsions, the appellants claim

that Ethiopia seized their bank accounts and other property.

Specifically, they assert that Ethiopia issued an order freezing

their CBE accounts “which prevented any access to or

withdrawal of funds.” Id. at 602-03. The CBE allegedly

“retained the funds from these accounts or . . . exchanged them

for other assets.” Id. at 603. Although Ethiopia and the CBE

contend that the funds in the accounts remain accessible, the

appellants maintain that, having been expelled, they can never

access the funds in their accounts because under Ethiopian

banking law, holders of bank accounts must appear in person to

withdraw funds—in Ethiopia there are no automated tellers,

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1

Appellant Sertzu Gebremeskel alleges that the CBE and Ethiopia

seized and auctioned machinery and other immovable assets from his

construction business. He also alleges that he lost his personal

residence and household goods. Compl., supra, at JA 610-11. 

Appellant Belay Redda alleges that the CBE and Ethiopia seized

and auctioned his dry cleaning business. Id. at 605. 

Appellant Tedros Asfaha alleges that “the Ethiopian Government”

expropriated and sold his two shops. Id. at 613. He also alleges that

he lost his household effects and two cars. Id. 

Appellant Fekadu Andemeskal alleges that his businesses were

confiscated. Id. at 615. He also alleges that he lost his family home,

another house, cars, household possessions and “business imports

waiting to clear customs.” Id. at 615-16.

Appellant Mebrahtu Gebremedhin claims to have lost his house,

a car and household goods. Id. at 619.

Appellant Hiwot Nemariam was married to appellant Belay

Redda, who is deceased, and thus “shares in the losses suffered by her

husband.” Id. at 608.

wire transfers are not permitted and checking accounts are

illegal. 

The appellants also claim that their businesses, houses,

automobiles and other property1 were seized and in many cases

sold substantially below their market value at auction “by CBE

for the benefit of CBE and Ethiopia.” Many of the sales

allegedly occurred under the pretext that the property was

burdened by a tax debt or that a mortgage was in default. Some

sales proceeds may have been deposited into CBE bank accounts

in the appellants’ names. Corrected Mem. of P. & A. in Opp’n

to Defs.’ Refiled Mot. to Dismiss 16 (Corrected Mem.).

On December 12, 2000, Ethiopia and Eritrea signed a Peace

Agreement (Agreement) providing for the permanent

termination of military hostilities. One provision of the

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2

On December 12, 2001, Eritrea filed 32 claims with the

Commission, including the claims at issue here. Three years later, on

December 17, 2004, the Commission issued a “Partial Award”

representing its final determination on liability regarding several of the

claims. See Partial Award, Civilians Claims, Eritrea’s Claims 15, 16,

23 & 27-32, Claims Commission ¶¶ 145-46, reprinted in JA at 1222-

23). The award was “partial” in that it determined liability without

calculating damages. The record does not indicate whether the

Commission has since awarded damages. 

Agreement created a Claims Commission (Commission) to

adjudicate claims for loss, damage or injury related to the

conflict and resulting from a violation of international law.

Although the Agreement established the Commission as the

exclusive forum for adjudicating claims arising from the

conflict, it specifically provided for the continuance of claims

filed in other fora before December 12, 2000. 

The appellants brought suit in the district court on June 12,

2000. On August 12, 2001, the district court granted Ethiopia’s

and the CBE’s motion to dismiss for lack of subject matter

jurisdiction and lack of personal jurisdiction on the basis of

forum non conveniens in favor of the Commission. We

overturned the dismissal, however, concluding that “the

Commission’s inability to make an award directly to [the

appellants], and Eritrea’s ability to set off [the appellants’]

claim[s], against claims made by . . . Ethiopia, render the

Commission an inadequate forum.”2

 Nemariam v. Fed.

Democratic Republic of Ethiopia, 315 F.3d 390, 395 (D.C. Cir.

2003).

Following our remand, jurisdictional discovery commenced

in September 2003. Discovery disputes stalled its completion

but the district court nevertheless directed Ethiopia and the CBE

to file a renewed motion to dismiss. On the retirement of the

district judge who originally dismissed the action, the judge to

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Section 1330(a) provides:

The district courts shall have original jurisdiction without

regard to amount in controversy of any nonjury civil action

against a foreign state . . . 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 [title

28] or under any applicable international agreement.

28 U.S.C. § 1330(a).

whom it was assigned ordered the CBE and Ethiopia to refile

memoranda in support of their renewed motion to dismiss and

ordered the appellants to refile a response. In an Order dated

November 8, 2005, the district court again dismissed the

complaint for lack of subject matter jurisdiction. Nemariam v.

Fed. Democratic Republic of Ethiopia, 400 F. Supp. 2d 76, 86

(D.D.C. 2005). This appeal followed.

II.

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 (1989). It gives the

district court “jurisdiction over a civil action against a foreign

sovereign for any claim ‘with respect to which the foreign state

is not entitled to immunity.’” Peterson v. Royal Kingdom of

Saudi Arabia, 416 F.3d 83, 86 (D.C. Cir. 2005) (quoting 28

U.S.C. § 1330(a)3

). A foreign state enjoys sovereign immunity

under the Act “unless an international agreement or one of

several exceptions in the statute provides otherwise.” Id.

(internal citations omitted). Thus, “[i]n the absence of an

applicable exception, the foreign sovereign’s immunity is

‘complete’—‘[t]he district court lacks subject matter jurisdiction

over the plaintiff’s case.’” Id. (quoting Phoenix Consulting, Inc.

v. Republic of Angola, 216 F.3d 36, 39 (D.C. Cir. 2000) (2d

alteration in original)). 

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The appellants seek to establish jurisdiction pursuant to 28

U.S.C. § 1605(a)(3)—FSIA’s so-called “expropriation

exception”—alleging that Ethiopia and the CBE illegally

expropriated their bank accounts (bank account claims) and

other property (non-bank account claims). Section 1605(a)(3)

provides: 

 (a) A foreign state shall not be immune from the

jurisdiction of courts of the United States or of the States

in any case—

 (3) 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.

28 U.S.C. § 1605(a)(3). For the exception to apply, therefore,

the court must find that: (1) “rights in property are at issue;” (2)

“those rights were taken in violation of international law;” and

(3) “a jurisdictional nexus [exists] between the expropriation and

the United States.” Peterson v. Royal Kingdom of Saudi Arabia,

332 F. Supp. 2d 189, 196, 197 (D.D.C. 2004), aff’d, 416 F.3d 83

(D.C. Cir. 2005). A jurisdictional nexus is established if: (a) the

property “‘is present in the United States in connection with a

commercial activity carried on in the United States by the

foreign state’” or (b) the 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.’” Id. at 197-98 (quoting 28 U.S.C. § 1605(a)(3)). The

appellants contend that both their bank account and non-bank

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Relying on the holdings in Vencedora Oceanica Navigacion, S.A.

v. Compagnie Nationale Algerienne de Navigation, 730 F.2d 195 (5th

Cir. 1984), and Greenpeace, Inc. v. State of France, 946 F. Supp. 773

(C.D. Cal. 1996), the district court concluded from FSIA’s legislative

history that the “owned or operated” language has a benefit element.

See infra pp. 15-16; Nemariam v. Fed. Democratic Republic of

Ethiopia, 400 F. Supp. 2d 76, 84-85 (D.D.C. 2005). 

account claims satisfy the latter jurisdictional nexus

requirement. 

In their motion to dismiss, the CBE and Ethiopia did not

dispute the appellants’ factual allegations. See Defs.’ Reply

Mem. of Law in Supp. of Refiled Mot. to Dismiss for Lack of

Jurisdiction 3 (“[G]rounds for dismissal are based upon issues

of law, and underlying facts sufficient to support dismissal are

not in dispute.” (emphasis added)). Accordingly, we must “take

the [appellants’] factual allegations as true and determine

whether they bring the case within any of the exceptions to

immunity invoked by the [appellants].” Phoenix Consulting,

216 F.3d at 40. We review “de novo whether [the] facts are

sufficient to divest the foreign sovereign of its immunity.” Price

v. Socialist People’s Libyan Arab Jamahiriya, 389 F.3d 192, 197

(D.C. Cir. 2004).

A. Bank Account Claims

The district court dismissed the appellants’ bank account

claims because they failed to satisfy both the “rights in property”

and the “owned or operated” requirements of section 1605(a)(3).

See Nemariam, 400 F. Supp. 2d at 83-84, 85. Specifically, the

district court held that a bank account constitutes an intangible

contract right to receive funds from the bank, id. at 83-84, the

expropriation exception does not apply to intangible property,

id. at 82, and the appellants failed to demonstrate that the CBE

benefitted from its alleged control over the bank accounts, id. at

84-86.4

 Although we disagree with the district court’s

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interpretation of the “rights in property” and the “owned or

operated” requirements of section 1605(a)(3), we nevertheless

agree with the district court that the CBE neither owns nor

operates the appellants’ bank accounts within the meaning of

section 1605(a)(3).

1. “Rights In Property” Requirement

As an initial matter, the appellants’ bank accounts constitute

intangible property under Ethiopian banking law. Article 896 of

the Ethiopian Commercial Code states, “The contract of deposit

of funds renders the bank owner of the funds deposited,

irrespective of the mode of deposit. The bank may dispose of

these funds in respect of its professional activity, subject to their

repayment under the conditions provided in the contract . . . .”

Excerpt From Ethiopian Commercial Code of 1960, reprinted in

JA at 1232 (emphasis added); see also Hardee v. George H.

Price Co., 89 F.2d 497, 499 (D.C. Cir. 1937) (“[I]t is the law

that when money is deposited generally in a bank its ownership

passes to the bank and the relation of debtor and creditor is at

once created.”). Thus, as the district court noted, “once funds

are deposited into a holder[’s] account, the holder simply has a

contractual right to receive the funds upon request, not physical

possession or even control of the actual funds.” Nemariam, 400

F. Supp. 2d at 83; see also Citizens Bank of Md. v. Strumpf, 516

U.S. 16, 21 (1995) (bank account “consists of nothing more or

less than a promise to pay, from the bank to the depositor”). A

contractual right to receive payment constitutes intangible

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

830 (9th Cir. 1987) (“certificates of deposit may be

characterized as intangible property or contracts”); de Sanchez

v. Banco Central de Nicaragua, 770 F.2d 1385, 1395 (5th Cir.

1985) (contractual right to receive payment constitutes

intangible property right).

We have yet to address whether the expropriation exception

applies to intangible property. See Peterson, 416 F.3d at 88

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5

In Brewer v. Socialist People’s Republic of Iraq, 890 F.2d 97,

101 (8th Cir. 1989), the Eighth Circuit affirmed the district court’s

denial of default judgment on a breach of contract claim brought

against Iraq. It noted that “[s]ome courts have interpreted [section

1605(a)(3)] to exclude claims involving intangible property, such as

contracts.” The court further explained, however, that the contract

rights at issue “were not expropriated—rather, the contract itself was

repudiated by defendants. We find that such a repudiation is not

equivalent to expropriation.” Id. (citing Kalamazoo Spice Extraction

Co. v. Provisional Military Gov’t of Socialist Ethiopia, 616 F. Supp.

660, 663 n.5 (W.D. Mich. 1985)). In distinguishing between

expropriation and repudiation, the court suggested that a different

result might have been reached had the contract rights been

expropriated. 

6

See Gutch v. Fed. Republic of Germany, 444 F. Supp. 2d 1, 10

(D.D.C. 2006); Yang Rong v. Liaoning Provincial Gov’t, 362 F. Supp.

2d 83, 101 (D.D.C. 2005); Peterson v. Royal Kingdom of Saudi

Arabia, 332 F. Supp. 2d 189, 197 (D.D.C. 2004), aff’d, 416 F.3d 83

(D.C. Cir. 2005); see also Daventree Ltd. v. Republic of Azerbaijan,

(“[W]e have not decided the question and need not do so

today.”). In fact, no circuit court has directly addressed the

issue. See, e.g., Zappia Middle East Constr. Co. v. Emirate of

Abu Dhabi, 215 F.3d 247, 251 (2d Cir. 2000) (“We need not

determine whether intangible contract rights are property under

the statute . . . .”); de Sanchez, 770 F.2d at 1395 (“We need not

decide here, however, whether Mrs. Sanchez’s contractual right

to receive payment on Banco Central’s check is a ‘right in

property’ within the meaning of Section 1605(a)(3).”).5 Some

district courts—including our own—have held, based on the

reasoning of a decision from the Southern District of New York,

see Canadian Overseas Ores Ltd. v. Compania de Acero Del

Pacifico S.A., 528 F. Supp. 1337 (S.D.N.Y. 1982), aff’d., 727

F.2d 274 (2d Cir. 1984), that the expropriation exception applies

only to tangible property.6 

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349 F. Supp. 2d 736, 751 (S.D.N.Y. 2004); Lord Day & Lord v.

Socialist Republic of Vietnam, 134 F. Supp. 2d 549, 560 (S.D.N.Y.

2001); Sampson v. Fed. Republic of Germany, 975 F. Supp. 1108,

1117 (N.D. Ill. 1997); Intercontinental Dictionary Series v. de

Gruyter, 822 F. Supp. 662, 678 (C.D. Cal. 1993). 

7

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 territory.” Banco Nacional

de Cuba v. Sabbatino, 376 U.S. 398, 401 (1964). The doctrine is

“derived from a policy of mutual respect for other nations’ sovereignty

and the appropriate roles of the judicial and executive branches of

government.” Daventree, 349 F. Supp. 2d at 754 (citing Underhill v.

Hernandez, 168 U.S. 250, 252 (1897)). 

In Canadian Overseas, the district court dismissed a claim

brought under section 1605(a)(3) of FSIA seeking payment “for

spare parts and related equipment allegedly delivered” to a

company acquired by the defendant and “to recover for loans

allegedly made” to that company by its predecessor. Id. at 1338.

Focusing on FSIA’s legislative history, the court concluded that

the claim did not involve “rights in property.” It relied on the

Foreign Sovereign Immunities Act of 1976 House Report

(House Report), which stated that the expropriation exception

was “in no way [to] affect[] existing law on the extent to which,

if at all, the ‘act of state’ doctrine may be applicable.”7 H.R.

Rep. No. 94-1487, at 20 (1976). The House Report

cited—without further explanation—22 U.S.C. § 2370(e)(2).

That statute—known as the Hickenlooper

Amendment—provides:

Notwithstanding any other provision of law, no court in

the United States shall decline on the ground of the

federal act of state doctrine to make a determination on

the merits giving effect to the principles of international

law in a case in which a claim of title or other right to

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Through the Hickenlooper Amendment, 

Congress . . . adopted a specific statutory provision requiring

federal courts to examine the merits of controversies

involving expropriation claims. [It] overrides the judicially

developed doctrine of act of state. Hickenlooper was passed

in response to the Supreme Court’s decision in [Sabbatino,

376 U.S. 398], which barred adjudication of an expropriation

claim on act of state grounds.

West v. Multibanco Comermex, S.A., 807 F.2d 820, 829 (9th Cir.

1987).

9

The Court of Appeals of New York first interpreted the

Hickenlooper Amendment as applying to tangible property only. See

French v. Banco Nacional de Cuba, 23 N.Y.2d 46 (1968). The

Second Circuit adopted that interpretation in Menendez v. Saks & Co.,

485 F.2d 1355 (2d Cir. 1973).

property is asserted by any party including a foreign

state (or a party claiming through such state) based upon

(or traced through) a confiscation or other taking after

January 1, 1959, by an act of that state in violation of the

principles of international law . . . .

22 U.S.C. § 2370(e)(2).8

 The district court in Canadian

Overseas reasoned that, because the “claim of title or other right

to property” language in the Hickenlooper Amendment “has

been interpreted to apply only to takings of tangible property

[and] not to include intangible interests like [a] contractual right

to payment,” it had to interpret the similar language in section

1605(a)(3) as applying only to tangible property.9

 Canadian

Overseas, 528 F. Supp. at 1346. Otherwise, “[w]ere the phrase

‘rights in property taken in violation of international law’ in the

FSIA interpreted more broadly than the similar phrase utilized

in the Hickenlooper Amendment, Congress would have

conferred jurisdiction for suits only to have them dismissed in

accordance with the act of state doctrine.” Id. The court also

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10The Southern District of New York subsequently had second

thoughts. In Zappia Middle East Construction Co. v. Emirate of Abu

Dhabi, No. 94 CIV.1942, 1996 WL 413680 (S.D.N.Y. July 24, 1996),

it appeared to doubt the tangible/intangible distinction, id. at *8 n.8.

It noted that in Banco Nacional de Cuba, 822 F.2d 230 (2d Cir. 1987),

the Second Circuit declared that “[a]s defined in international law,

property commonly includes intangible assets and ‘any interest in

property if such interest has a reasonably ascertainable value.’”

Zappia, 1996 WL 413680, at *8 n.8 (quoting Banco Nacional de

Cuba, 822 F.2d at 238) (alteration in original). Although the Second

Circuit was not interpreting FSIA in Banco Nacional de Cuba, the

Zappia court noted that “[i]t appears anomalous that taking of

intangible property constitutes a violation of international law, but lies

outside of the expropriation exception of FSIA.” Id.

noted that “the further requirements in § 1605(a)(3) that ‘the

property taken in violation of international law’ or ‘any property

exchanged therefor’ be ‘present in the United States in

connection with a commercial activity carried on in the United

States by a foreign state’ or be ‘owned or operated by an agency

or instrumentality of the foreign state . . . engaged in commercial

activity in the United States’” suggested that section 1605(a)(3)

is “applicable to tangible property [and] is on its face

inapplicable to a contractual right to be paid.” Id. (ellipsis in

original).10

The appellants contend that Canadian Overseas is

“inapposite” because it “involved unvested rights of a

fundamentally different nature than bank accounts.” Appellants’

Br. at 20. They maintain that two other district court

decisions—Kalamazoo Spice Extraction Co. v. Provisional

Military Government of Socialist Ethiopia, 616 F. Supp. 660

(W.D. Mich. 1985) and de Sanchez v. Banco Central de

Nicaragua, 515 F. Supp. 900, 910 (E.D. La. 1981), aff’d on

other grounds, 770 F.2d 1385 (5th Cir. 1985)—support their

claim that section 1605(a)(3) applies to intangible property,

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11In fact, the Kalamazoo court distinguished Canadian Overseas,

declaring, “[Canadian Overseas] is not to the contrary. That case did

not involve an expropriation but the simple repudiation of a

contractual obligation. In this case, no one disputes that the [foreign

sovereign] expropriated some kind of property, whether stock or

assets.” Kalamazoo, 616 F. Supp. at 663 n.5 (internal citations

omitted).

12In the other district court decision relied on by the appellants, de

Sanchez, the district court applied the expropriation exception to a

certificate of deposit without discussing the tangible/intangible

property distinction. 515 F. Supp. 900, 910 (E.D. La. 1981), aff’d on

other grounds, 770 F.2d 1385 (5th Cir. 1985). The de Sanchez

decision predated Canadian Overseas and included no explanation of

the applicability of section 1605(a)(3) to a certificate of deposit. See

id.

including their accounts. Appellants’ Br. at 15-16. In

Kalamazoo, the district court held that the seizure of the

controlling stockholder’s interest in a corporation triggered the

expropriation exception. 616 F. Supp. at 663. The Kalamazoo

court, however, did not characterize the property right as

intangible property. See id. (“The rights in property that are at

issue are the assets of [the corporation].” (emphasis added)).

Rather, it determined that a controlling interest in the

corporation’s stock was no different from the corporation’s

physical assets under section 1605(a)(3) because “[i]n either

case, the foreign state has expropriated control of the assets and

profits of the corporation.” Id.11 Unlike a controlling interest in

corporate stock, however, a bank account does not represent

control of a tangible asset—instead it constitutes a contractual

right to receive payment from funds owned by the bank. See

Hardee, 89 F.2d at 499.12

Despite the popularity of the Canadian Overseas decision in

the district courts, see, e.g., Peterson, 332 F. Supp. 2d at 197, we

find its reasoning unpersuasive. Neither the plain language of

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section 1605(a)(3) nor its legislative history expressly states that

the expropriation exception applies only to tangible property.

Moreover, “the tangible/intangible characterization of property

interests . . . is a distinction without a difference” and “is not

generally recognized in international, federal, or state law.”

West, 807 F.2d at 830 (“‘The relationship between a depositor

and bank arises only out of contract[,] . . . a contract right is

property.’” (quoting Panel Opinion No. 1, (revised), Fourteenth

Semiannual Report to the Congress for the Period Ending June

30, 1961, 124, 125 (Foreign Claims Settlement Comm’n)

(alterations in original) (alteration omitted))); see also Banco

Nacional de Cuba v. Chem. Bank N.Y. Trust Co., 822 F.2d 230,

238 (2d Cir. 1987). The Canadian Overseas court’s conclusions

rest instead on (1) section 1605(a)(3)’s link to the Hickenlooper

Amendment and (2) the Hickenlooper Amendment’s

applicability to tangible property only. We believe the first

conclusion is erroneous and we therefore do not opine on the

Hickenlooper Amendment’s reach.

At least two obstacles prevent a federal court from

adjudicating on the merits a claim against a foreign sovereign:

foreign sovereign immunity and the act of state doctrine.

Section 1605(a)(3) and the Hickenlooper Amendment operate to

remove these obstacles for a claim involving the expropriation

of “property” in violation of international law. That is, section

1605(a)(3) provides subject matter jurisdiction by creating an

exception to foreign sovereign immunity for a claim involving

the expropriation of “rights in property.” 28 U.S.C.

§ 1605(a)(3). And the Hickenlooper Amendment creates an

exception to the act of state doctrine for a claim involving the

expropriation of a “claim of title or other right to property.” 22

U.S.C. § 2370(e)(2). 

The Canadian Overseas court reasoned that because both the

expropriation exception and the Hickenlooper Amendment serve

a similar purpose, the statutes must be interpreted consistently.

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Neither the text nor the legislative history of section 1605(a)(3),

however, supports such a reading. In fact, the House Report

relied on in Canadian Overseas suggests that the statutes were

not to operate in tandem. It declared that section 1605(a)(3)

“deals solely with issues of immunity” and that “it in no way

affects existing law on the extent to which, if at all, the ‘act of

state doctrine’ may be applicable.” H.R. Rep. No. 94-1487, at

20 (emphases added). In other words, the House Report

indicates that the Congress intended that the expropriation

exception to foreign sovereign immunity operate independently

from the Hickenlooper Amendment’s exception to the act of

state doctrine. In a footnote following a citation to the

Hickenlooper Amendment, the House Report further explained:

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. . . .

The committee has found it unnecessary to address the

act of state doctrine in this legislation since decisions

such as that in [Alfred Dunhill of London, Inc. v.

Republic of Cuba, 425 U.S. 682 (1976)] demonstrate that

our courts already have considerable guidance enabling

them to reject improper assertions of the act of state

doctrine.

Id. at 20 n.10 (emphases added). Thus, instead of limiting the

expropriation exception to tangible property, the Congress

expressed confidence that federal courts would not apply the act

of state doctrine too broadly—that is, to “improperl[y]” prevent

adjudication on the merits after jurisdiction had been

established. 

We are therefore free to interpret section 1605(a)(3)

independent of the Hickenlooper Amendment—and more

important, we believe this interpretation to be the correct one.

The plain language of section 1605(a)(3)—as well as its

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legislative history—does not limit its application to tangible

property. Moreover, there seems to us to be no reason to

distinguish between tangible and intangible property when the

operative phrase is “rights in property.” We therefore conclude

that the expropriation exception applies to the appellants’ bank

accounts. We next consider whether the CBE “own[s] or

operate[s]” those accounts.

2. “Owned or Operated” Requirement 

The district court concluded that the “owned or operated”

language of section 1605(a)(3) requires a showing that the

property benefitted the government which allegedly

expropriated it. Nemariam, 400 F. Supp. 2d at 84-85. In so

holding, it relied on the only two reported decisions addressing

the issue—Vencedora Oceanica Navigacion, S.A. v. Compagnie

Nationale Algerienne de Navigation, 730 F.2d 195 (5th Cir.

1984), and Greenpeace, Inc. v. State of France, 946 F. Supp.

773 (C.D. Cal. 1996). Unlike the district court, we are not

persuaded by the reasoning of those decisions.

In Vencedora, the Fifth Circuit dismissed a claim that an

Algerian corporation had tortiously deprived the appellant of its

wrecked oil tanker following a salvage operation. 730 F.2d at

196, 197. The court held that the expropriation exception did

not apply because “owned or operated” means more than

“‘possess[ed]’ or ‘controll[ed].’” Id. at 204. Citing FSIA’s

House Report, the court explained:

[S]ection 1605(a)(3) was intended to subject to United

States jurisdiction any foreign agency or instrumentality

that has nationalized or expropriated property without

compensation, or that is using expropriated property

taken by another branch of the state. The vessel in this

case thus would have been owned or operated under

section 1605(a)(3) if . . . some Algerian agency had

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13To “possess” is to “seize or gain control of.” Webster’s Third

New International Dictionary 1770 (3d ed. 1993). 

assumed control of the vessel and had used it to carry oil

for the benefit of the Algerian government.

Id. (internal citation omitted). The Greenpeace district court

adopted the Fifth Circuit’s reasoning. It held that a vessel

allegedly “impounded, inventoried and sealed,” 946 F. Supp. at

777, by the French Navy was not “owned or operated” by

France because neither “France [n]or some French agency had

assumed control of the vessel and had used it for the benefit of

the French government,” id. at 784. 

We believe the Vencedora holding runs contrary to the

language and legislative history of section 1605(a)(3). The

phrase “owned or operated” plainly does not include a benefit

requirement. To “own” is to “have or hold as property or

appurtenance . . . [possess],”13 see Webster’s Third New

International Dictionary 1612 (3d ed. 1993), and to “operate” is

to “exert power or influence,” id. at 1580. Moreover, the

legislative history the Fifth Circuit cited, H.R. Rep. No. 94-

1487, at 19-20, did not impose such a requirement or even refer

to the “owned or operated” language. Rather, the House Report

defined the phrase “taken in violation of international law,”

stating, “The term ‘taken in violation of international law’ would

include the nationalization or expropriation of property without

payment of the prompt[,] adequate and effective compensation

required by international law.” H.R. Rep. No. 94-1487, at 19-

20. Even assuming the Report addressed the “owned or

operated” language, the plain meaning of “nationalization or

expropriation” dovetails with the plain meaning of “owned or

operated” and thus weighs against imposing a benefit

requirement. That is, to “expropriate” is to “transfer (the

property of another) to one’s own possession,” Webster’s,

supra, at 803, and to “nationalize” is to “invest in the central

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government of a nation the control or ownership of” property,

id. at 1505. “Where . . . the plain language of the statute is clear,

the court generally will not inquire further into its meaning, at

least in the absence of a clearly expressed legislative intent to

the contrary.” Qi-Zhuo v. Meissner, 70 F.3d 136, 140 (D.C. Cir.

1995) (internal quotation and citations omitted). Accordingly,

we decline to add a benefit element to the “owned or operated”

requirement and conclude instead that the phrase “owned or

operated” means “possessed or exerted control or influence

over” the property at issue. 

We nonetheless agree with the district court’s dismissal of

the bank account claims for a different reason. Cf. Wilburn v.

Robinson, 480 F.3d 1140, 1148 (D.C. Cir. 2007) (“We can . . .

affirm a grant of summary judgment on alternative grounds, if

applicable.” (citing Wash.-Balt. Newspaper Guild, Local 35 v.

Wash. Post, 959 F.2d 288, 292 n.3 (D.C. Cir. 1992))). The

appellants have failed to demonstrate that the CBE “owned or

operated” their bank accounts. As explained supra, the CBE

owns the funds in the appellants’ accounts. Hardee, 89 F.2d at

499. The property right at issue, however, is the appellants’

contractual right to receive payment and the CBE has neither

taken possession of nor exerted control over that right. Instead,

accepting as true the appellants’ allegation that Ethiopia and the

CBE have in fact prevented them from accessing the funds in

the accounts, see Nemariam, 400 F. Supp. 2d at 85, we believe

the CBE has extinguished that contract right. See Strumpf, 516

U.S. at 21 (noting, in bankruptcy context, “[bank’s] refusal to

pay [depositor] was neither a taking of possession of

[depositor’s] property nor an exercising of control over it, but

merely a refusal to perform its promise.” (emphasis added)); cf.

Brewer v. Socialist People’s Republic of Iraq, 890 F.2d 97, 101

(8th Cir. 1989) (“[P]laintiffs’ contract rights were not

expropriated—rather, the contract itself was repudiated by

defendants. We find that such a repudiation is not equivalent to

expropriation.” (citation omitted)); Kalamazoo, 616 F. Supp. at

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663 n.5 (“[Canadian Overseas] did not involve an expropriation

but the simple repudiation of a contractual obligation.”);

Canadian Overseas, 528 F. Supp. at 1346-47 (“Neither [the

defendant] nor any other party claims ownership of the right to

be paid under the contracts which [the plaintiff] asserts.”). That

is, the CBE did not assume the appellants’ contractual right to

performance—instead it declined to perform its own contractual

obligations.

Because the appellants have failed to satisfy the “owned or

operated” requirement of section 1605(a)(3) with respect to their

bank account claims, Ethiopia and the CBE are immune from

suit on those claims. See 28 U.S.C. § 1330. Accordingly, we

affirm the district court’s dismissal of the claims under Federal

Rule of Civil Procedure 12(b)(1).

B. Non-Bank Account Claims

In a footnote, the district court also dismissed the appellants’

non-bank account claims. Following its conclusion that the

appellants’ “intangible” bank accounts do not constitute “rights

in property,” the district court declared:

The papers submitted by both parties focus solely on the

bank accounts as the property that has allegedly been

taken and remains in that status. Despite allegations in

the complaint that the plaintiffs’ real property, i.e., their

homes and businesses, were also illegally taken, there is

no discussion of whether these tangible properties

provide[] the basis for FSIA jurisdiction. Presumably

these properties have not been discussed by the plaintiffs

because they have been sold, and the proceeds from the

sales have been placed in the plaintiffs’ bank accounts,

thereby making the taking of the bank accounts as [sic]

the only property that would form the basis for this

Court to have FSIA jurisdiction.

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14See supra note 1.

15They asserted: “Ethiopia and CBE subsequently foreclosed upon,

or otherwise seized and auctioned off, deportees’ homes, businesses,

and other property.” Corrected Mem., supra, at 8.

Nemariam, 400 F. Supp. 2d at 84 n.4. In other words, the

district court dismissed the appellants’ non-bank account claims

because it “presumed”—based on the appellants’ opposition to

the motion to dismiss—that the bank account claims

encompassed all property allegedly expropriated. 

The appellants argue on appeal that the district court had “no

basis” to so presume. Appellants’ Br. at 43. They maintain that

they raised their non-bank account claims both in their

complaint14 and in the “Statement of the Case” section of their

opposition to the motion to dismiss.15 Moreover, they contend

that Ethiopia and the CBE failed to allege that “all of [the] nonbank-account property had been sold” and that “there was no

support in [their] allegations or in the evidence presented for

such a conclusion.” Id. Finally, they argue that the appellees’

taking of their non-bank account property satisfies the “owned

or operated” requirement of section 1605(a)(3).

As the district court noted, Nemariam, 400 F. Supp. 2d at 84

n.4, the appellants failed to expressly argue that the non-bank

account property establishes an independent basis for FSIA

jurisdiction. In their motion to dismiss, Ethiopia and the CBE

plainly sought dismissal of all of the appellants’ claims, arguing,

inter alia, that section 1605(a)(3) does not apply to intangible

property, see Defs.’ Mem. of Law in Supp. of Refiled Mot. to

Dismiss for Lack of Jurisdiction 12 (“The Expropriation

Exception of the FSIA Does Not Apply, and Therefore This

Court Lacks Subject Matter Jurisdiction.”), 16, and suggesting

that the proceeds from the sales of the non-bank account

property were deposited into the appellants’ bank accounts, id.

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at 11 (“The Commission ruled that it was lawful for Ethiopia to

deposit the proceeds of deportees’ property sales in their CBE

accounts even where those accounts were restricted in a way that

effectively foreclosed fund transfers abroad.” (citing Partial

Award, Civilians Claims, Eritrea’s Claims 15, 16, 23 & 27-32,

Claims Commission ¶ 146, reprinted in JA at 1222)). Indeed,

the motion to dismiss recited, “The only property at issue is

Plaintiffs’ CBE accounts.” Id. at 21. In their opposition, the

appellants did not challenge the assertion that the bank accounts

were the only property at issue. Although they disputed that

section 1605(a)(3) applies only to tangible property, see

Corrected Mem., supra, at 21, they failed to argue in the

alternative that tangible, non-bank account property had also

been expropriated. Moreover, the appellants noted that Ethiopia

and the CBE did not deny “that their bank accounts, including

proceeds from involuntary sales of other property, have

remained with CBE.” Id. at 16 (emphasis added). They

subsequently failed to challenge the district court’s

“presumption” noted in its dismissal order that the bank account

claims encompassed all property allegedly expropriated. Instead

of moving the district court to reconsider, see Fed. R. Civ. P.

59(e), the appellants raised the issue for the first time on appeal.

Nonetheless, “‘[a]bsent exceptional circumstances, the court of

appeals is not a forum in which a litigant can present legal

theories that it neglected to raise in a timely manner in

proceedings below.’” Grant v. U.S. Air Force, 197 F.3d 539,

542 (D.C. Cir. 1999) (quoting Tomasello v. Rubin, 167 F.3d 612,

618 n.6 (D.C. Cir. 1999)). “Exceptional circumstances” include

“cases involving uncertainty in the law; novel, important, and

recurring questions of federal law; intervening change in the

law; and extraordinary situations with the potential for

miscarriages of justice.” Flynn v. Comm’r, 269 F.3d 1064, 1069

(D.C. Cir. 2001). The appellants have offered no explanation

for their failure to pursue their non-bank account claims in the

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district court. Accordingly, we decline to address their nonbank account claims. 

For the foregoing reasons, we affirm the district court’s

dismissal of the complaint for lack of subject matter jurisdiction.

See Fed. R. Civ. P. 12(b)(1). 

So ordered.

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