Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-04-07159/USCOURTS-caDC-04-07159-0/pdf.json

Parties Involved:
General Organization of Social Insurance
Appellee
John W. Peterson
Appellant
The Royal Kingdom of Saudi Arabia
Appellee

Document Text:

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued May 9, 2005 Decided July 29, 2005

No. 04-7159

JOHN W. PETERSON,

ON BEHALF OF HIMSELF AND OTHERS SIMILARLY SITUATED,

APPELLANT

v.

THE ROYAL KINGDOM OF SAUDI ARABIA AND

GENERAL ORGANIZATION OF SOCIAL INSURANCE,

AN INSTRUMENTALITY OF THE KINGDOM OF SAUDI ARABIA,

APPELLEES

Appeal from the United States District Court

for the District of Columbia

(No. 03cv01771)

Stephen A. Saltzburg argued the cause for the appellant. Eric

L. Siegel was on brief.

B. Thomas Peele, III argued the cause for the appellees. John

F. Hundley entered an appearance.

Before: EDWARDS, HENDERSON and TATEL, Circuit Judges.

Opinion for the court filed by Circuit Judge HENDERSON.

KAREN LECRAFT HENDERSON, Circuit Judge: John Peterson

sued the Royal Kingdom of Saudi Arabia and one of its

agencies, the General Organization of Social Insurance

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1

See Saudi Arabia v. Nelson, 507 U.S. 349, 351 (1993) (“Because

this case comes to us on a motion to dismiss the complaint, we assume

that we have truthful factual allegations before us though many of

those allegations are subject to dispute.” (internal citation omitted));

accord World Wide Minerals, Ltd. v. Republic of Kazakhstan, 296

F.3d 1154, 1157 n.2 (D.C. Cir. 2002).

(collectively, Saudi Arabia), seeking to recover mandatory

contributions his employers made to a retirement program.

Finding no exception in the Foreign Sovereign Immunities Act

(FSIA or Act), 28 U.S.C. §§ 1602 et seq., applicable to

Peterson’s claims, the district court dismissed his law suit for

lack of jurisdiction. See Peterson v. Royal Kingdom of Saudi

Arabia, 332 F. Supp. 2d 189 (D.D.C. 2004), reprinted in Joint

Appendix (J.A.) at 342-58. He now appeals, arguing that Saudi

Arabia is not entitled to sovereign immunity because the FSIA’s

“expropriation” and “commercial activity” exceptions apply to

the claims he presses. Neither exception applies, we conclude,

and thus there is no basis for federal court jurisdiction over

Saudi Arabia for the purpose of Peterson’s suit. We therefore

affirm the district court’s judgment. 

I.

We accept as true the facts Peterson alleges in his complaint

and briefly recount them now.1 In November 1969, Saudi

Arabia established the General Organization of Social Insurance

(GOSI) by Royal Decree “to promote foreign commerce and

attract badly needed foreign workers to Saudi Arabia.” J.A. 3-4.

GOSI has two distinct branches: the Occupational Hazards

Branch, which provides insurance coverage for employmentrelated injuries, and the Annuities Branch, which provides

retirement and death benefits. 

From 1969 until 1987, Saudi Arabia required employers and

their employees, regardless of national origin or citizenship, to

make contributions to GOSI. Employers were required to

contribute two per cent of their employees’ salaries to the

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Occupational Hazards Branch. Each employer and each

employee were responsible for contributing “thirteen . . . percent

of the total value of the employee’s wages and other benefits” to

the Annuities Branch, the employer contributing eight-per cent

and the employee the remaining five per cent. J.A. 6. “All

contributions,” however, “were made for the benefit of, and in

the name of, the employee.” J.A. 6. GOSI invested the

contributions it received in domestic corporations and

organizations as well as international banks. 

In 1987 Saudi Arabia issued Royal Decree No. M/43, “which

excluded non-Saudi workers from GOSI’s Annuit[ies] Branch.”

J.A. 6. The upshot of the Royal Decree was that non-Saudi

workers were no longer eligible for retirement and death

benefits. At some point between 1987 and 1990, however,

Saudi Arabia decided to refund to non-Saudi workers a portion

of the contributions made to the Annuities Branch in their

names. Peterson, who had worked for multiple engineering and

construction companies in Saudi Arabia from 1979 to 1990 and

made contributions to GOSI, applied for and eventually received

in 1988 a refund of the five per cent contribution he made to the

Annuities Branch. Along with his refund check, Peterson

received the following notice: “Attached is a check for the value

of your entitlements, due to you as per the applicable rules for

this purpose. This payment represents your full dues from

GOSI.” J.A. 22. 

Peterson alleges that Saudi Arabia failed to publicize the

refund program, failed to explain its decision to refund only five

per cent of the contributions made in his name and failed to

“state when the remaining eight percent would be paid.” J.A. 9.

Throughout June 2003, Peterson contacted the Saudi Arabian

Embassy in Washington, D.C., by telephone, by mail and by

facsimile to ask for a date certain by which he would receive the

remaining eight-per cent contribution his employers made in his

name. Peterson notified the embassy that he would give Saudi

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Arabia until June 23, 2003 to answer his inquiry and that he

would deem its failure to respond a constructive denial of his

request. He received no answer. 

Peterson then sued Saudi Arabia in the district court on August

21, 2003. His complaint alleges four claims based on Saudi

Arabia’s failure to refund the full amount paid into the GOSI

Annuities Branch in his behalf: (1) arbitrary and discriminatory

expropriation of his property in violation of international law;

(2) breach of contract; (3) conversion of his property; and (4)

unjust enrichment. Saudi Arabia subsequently filed a motion to

dismiss, which the district court granted on August 23, 2004.

See Peterson, 332 F. Supp. 2d at 202. 

The district court concluded that it lacked jurisdiction to

entertain Peterson’s suit under FSIA because his claims failed to

meet the Act’s “expropriation” or “commercial activity”

exceptions. See id. at 196-201. With respect to the

“expropriation” exception, the district court concluded that “the

eight percent GOSI contribution, characterized by the plaintiff

as an expectation interest in payments, does not qualify as a

right in tangible property and the expropriation exception does

not apply here for that reason.” Id. at 197. “The fact that the

property in question is not ‘tangible’ property is,” it explained,

“dispositive of the question whether the expropriation exception

of the FSIA can apply to defendants.” Id. at 198. Turning to

FSIA’s “commercial activity” exception, the district court found

it inapplicable as well because “[t]he termination of GOSI

benefits for foreign workers is a sovereign, not a commercial,

act and the termination cannot be understood to have had a

‘direct effect’ in the United States.” Id. at 201 (quoting 28

U.S.C. § 1605(a)(2)). The termination was “distinctly

sovereign,” to the court’s mind, because “a private player in the

market certainly could not engage in the particular actions of

initiating, administering, and ending a scheme of mandatory

social insurance.” Id. at 200 (internal quotation marks omitted).

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And there was no “direct” effect in the United States, the court

explained, because “[b]ased on the record before the Court, it

appears that, to the extent Peterson expected a refund of his

GOSI contributions in a particular place, it can at most be

described as an implied agreement for payment in the United

States.” Id. at 201. In the alternative, the district court further

concluded that Peterson’s claims were “barred under any

applicable statute of limitations.” Id. 

He now appeals. See 28 U.S.C. § 1291. On de novo review,

we affirm the judgment of the district court, see Princz v. Fed.

Republic of Germany, 26 F.3d 1166, 1168 (D.C. Cir. 1994)

(foreign government’s entitlement to sovereign immunity is

question of law subject to de novo review), cert. denied, 513

U.S. 1121 (1995), as set forth below. 

II.

In the United States, there is only one way for a court to obtain

jurisdiction over a foreign state and it is not a particularly

generous one—the FSIA. See Argentine Republic v. Amerada

Hess Shipping Corp., 488 U.S. 428, 443 (1989) (“[T]he FSIA

provides the sole basis for obtaining jurisdiction over a foreign

state in the courts of this country . . . .”); accord World Wide

Minerals, Ltd. v. Republic of Kazakhstan, 296 F.3d 1154, 1161

(D.C. Cir. 2002). FSIA provides that a district court has

jurisdiction over a civil action against a foreign sovereign for

any claim “with respect to which the foreign state is not entitled

to immunity.” 28 U.S.C. § 1330(a); see World Wide Minerals,

Ltd., 296 F.3d at 1161. But under the Act, a foreign state is

immune from the jurisdiction of federal and state courts alike,

see 28 U.S.C. § 1330(a); id. § 1604, and remains so unless an

international agreement, see id. §§ 1330(a), 1604, or one of

several exceptions in the statute provides otherwise, see id.

§§ 1605, 1607. See Phoenix Consulting, Inc. v. Republic of

Angola, 216 F.3d 36, 39 (D.C. Cir. 2000). In the absence of an

applicable exception, the foreign sovereign’s immunity is

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“complete”—“[t]he district court lacks subject matter

jurisdiction over the plaintiff’s case.” Id. (citation omitted); see

also Saudi Arabia v. Nelson, 507 U.S. 349, 355 (1993)

(“[U]nless a specified exception applies, a federal court lacks

subject-matter jurisdiction over a claim against a foreign state.”

(citations omitted)). Peterson maintains that Saudi Arabia is not

entitled to sovereign immunity under either of two FSIA

exceptions—the “expropriation” exception or the “commercial

activity” one. We conclude neither applies. 

Peterson first maintains that Saudi Arabia is not entitled to

sovereign immunity because it arbitrarily and discriminatorily

expropriated his property in violation of international law.

Under FSIA,

[a] foreign state shall not be immune from the

jurisdiction of courts of the United States or of

the States 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.

28 U.S.C. § 1605(a)(3). Thus, for a claim to fit within this

statutory exception, it must meet three requirements: At issue

must be (1) “rights in property” that (2) were taken in violation

of international law and (3) the property at issue (or any

property exchanged for it) must either (a) be present in the

United States “in connection with a commercial activity carried

on in the United States by the foreign state” or (b) “owned or

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operated by an agency or instrumentality of the foreign state and

that agency or instrumentality” engages in commercial activity

in the United States. Id. Our analysis begins and ends with the

exception’s first two requirements. See id. 

The parties make assorted arguments regarding whether the

eight-per cent GOSI contributions made by Peterson’s

employers on his behalf constitute a “right[] in property”—i.e.,

the parties dispute whether the eight-per cent contribution

constitutes property at all, what kind of property it is—tangible

or intangible—and, if it is property, to whom it in fact belongs.

They direct most of their attention to the question whether the

employers’ GOSI contributions constitute tangible or intangible

property. Saudi Arabia contends that FSIA’s expropriation

exception encompasses only tangible property (such as physical

assets), not intangible property (such as a right to receive

payment), and therefore does not apply to Peterson’s employers’

GOSI contributions, which it characterizes as securing an

“[e]xpectation interest[] in social insurance benefits.” See

Appellees’ Br. at 14. Peterson disagrees, arguing that such a

cramped interpretation is “shortsighted, overly formalistic and

contradicts Congressional intent,” Appellant’s Br. at 12, and that

his employers’ GOSI contributions constitute tangible property

in any event. 

The parties’ focus on this question is not surprising inasmuch

as the district court found the question pivotal, as have other

district courts. Some courts have held that the term “property”

as used in FSIA’s expropriation exception “means physical

property not the right to receive payment.” Lord Day & Lord v.

Socialist Republic of Vietnam, 134 F. Supp. 2d 549, 560

(S.D.N.Y. 2001) (internal quotation marks & citations omitted)

(expropriation exception inapplicable because claim based on

entitlement to funds was “fatally flawed”); accord, e.g.,

Sampson v. Fed. Republic of Germany, 975 F. Supp. 1108, 1117

(N.D. Ill. 1997) (expropriation exception inapplicable to claim

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2 The Second Hickenlooper Amendment constitutes the Congress’s

response to the United States Supreme Court’s decision in Banco

Nacional de Cuba v. Sabbatino, 376 U.S. 398 (1964), which held an

expropriation claim barred by the act of state doctrine. See id. at 428

(“[W]e decide only that the Judicial Branch will not examine the

validity of a taking of property within its own territory by a foreign

sovereign government . . . even if the complaint alleges that the taking

not involving “loss of tangible property” because “property

under this section refers to tangible property” (internal quotation

marks & citation omitted)), aff’d, 250 F.3d 1145 (7th Cir. 2001);

Intercontinental Dictionary Series v. De Gruyter, 822 F. Supp.

662, 678 (C.D. Cal. 1993) (“intangible intellectual property

rights or the right to receive payment on a contract alleged by

IDS are not grounds for applying the [expropriation]

exception”); Canadian Overseas Ores Ltd. v. Compania de

Acero del Pacifico S.A., 528 F. Supp. 1337, 1346 (S.D.N.Y.

1982) (expropriation exception inapplicable to breach of

contract claim because it “is on its face inapplicable to a

contractual right to be paid”), aff’d, 727 F.2d 274 (2d Cir. 1984);

see generally De Sanchez v. Banco Cent. de Nicaragua, 770 F.

2d 1385, 1395 (5th Cir. 1985) (declining to decide issue but

citing cases); cf. Hirsh v. State of Israel, 962 F. Supp. 377, 383

(S.D.N.Y. 1997) (assuming reparation payments were

expropriated, exception “nevertheless . . . inapplicable, as it has

been interpreted to apply only to the expropriation of tangible

property, not to the right to receive payments”). In fact, this

case is not the only instance in which our Circuit’s district court

has analyzed the tangible/intangible distinction in assessing

subject matter jurisdiction under FSIA’s expropriation

exception. See Rong v. Liaoning Provincial Gov’t, 362 F. Supp.

2d 83, 101 (D.D.C. 2005) (“[T]he FSIA applies where the

property at issue is tangible property.” (internal quotation marks

& citation omitted)). Arguing against this precedent, Peterson

relies on a Ninth Circuit decision construing the Second

Hickenlooper Amendment, 22 U.S.C. § 2370(e)(2),2in which

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violates customary international law.”). The Second Hickenlooper

Amendment provides in part: 

[N]o 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 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 . . . by an act

of that state in violation of the principles of

international law, including the principles of

compensation . . . .

22 U.S.C. § 2370(e)(2).

the court observed that “the tangible/intangible characterization

of property interests . . . is a distinction without a difference.”

West v. Multibanco Comermex,S.A.,807 F.2d 820, 830 (9thCir.

1987). For our part, we have not decided the question and need

not do so today.

Regardless whether the eight-per cent GOSI contributions

constitute tangible or intangible property or what significance,

if any, the latter classification may carry under FSIA’s

expropriation exception, 28 U.S.C. § 1605(a)(3), Peterson has

failed to allege sufficient facts demonstrating that the

contributions constitute a “right[] in property” in the first place.

Peterson maintains that his “substantial cash investments in

GOSI” constitute tangible property. Complaint at 13, ¶ 58,

reprinted in J.A. at 13. But his contributions were not placed in

a private account in his name; rather, if GOSI had remained in

force with respect to foreign workers, the contributions Peterson

(and his employers) made would have been returned to him in

the form of an annuity upon his retirement at age 60, provided

he met certain conditions. See J.A. 216-17. The annuity,

moreover, would not have been based on his five-per cent and

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his employers’ eight-per cent contributions to GOSI but instead

on the average monthly wages he received in the two years

preceding his retirement. See J.A. 217 (According to Saudi

Arabia’s Social Insurance Law base amount is “computed by

multiplying one-fiftieth of the average monthly wages by the

number of insurance years.”). Peterson’s counsel made two

concessions at oral argument that confirm that Peterson had no

right, contractual or otherwise, to this benefit stream, which

resembles our Social Security system more than a

pension—such as a 401(k) plan. Peterson’s counsel conceded

both that Peterson was not guaranteed a return of the eight-per

cent contributions his employers made to GOSI in his behalf,

see Tr. of Oral Argument at 32:39, and that Saudi Arabia could

have unilaterally eliminated the GOSI program for all workers,

foreign and domestic, see Tr. of Oral Argument at 4:37. Taken

together, these factors rebut Peterson’s assertion that his and his

employers’ contributions to GOSI constitute “rights in property”

of which he was deprived in derogation of international law.

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

101 (8th Cir. 1989) (expropriation exception inapplicable

because “breach of contract did not create ‘rights in property’ ”);

see also Human Rights in China v. Bank of China, No. 02 Civ.

4361, 2005 WL 1278542, at *6 (S.D.N.Y. May 27, 2005)

(expropriation exception inapplicable because plaintiff had “no

legal right to the property” after funds transferred to third party).

Peterson nonetheless makes two arguments to the contrary,

neither of which we find persuasive. Citing various

authorities—from another circuit’s opinion, Altmann v. Republic

of Austria, 317 F.3d 954 (9th Cir. 2002), to a decision of the

European Court of Human Rights, Skórkiewicz v. Poland (dec.),

App. 39860/98, Eur. Ct. H.R. (1999), reprinted in J.A. at 74, to

a law review article, Diego Rodríguez-Pinzón & Claudia Martin,

The International Human Rights Status of Elderly Persons, 18

AM. U. INT’L L. REV. 915 (2003)—Peterson first contends that

we should heed emerging international norms prohibiting a

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government’s taking of a person’s property interest in his

contributions to a pension plan. But, as we noted, the GOSI

program is not a pension plan but a social insurance system.

Thus it is of no moment that Saudi Arabia’s Royal Decree No.

M/43 affected only one group of GOSI’s beneficiaries, viz., nonSaudi employees. Citing United States Supreme Court cases,

including Kaiser Aetna v. United States, 444 U.S. 164 (1979)

and Perry v. Sindermann, 408 U.S. 593 (1972), as well as ours,

Nixon v. United States, 978 F.2d 1269 (D.C. Cir. 1992) and Hall

v. Ford, 856 F.2d 255 (D.C. Cir. 1988), for the notion that

property is “made up of mutually reinforcing understandings,”

Nixon, 978 F.2d at 1275, Peterson additionally argues that his

employers’ eight-per cent GOSI contributions constitute his

property because Saudi Arabia treated it as such by refunding to

him his five-per cent GOSI contribution. “[T]here is no

common sense, or legal difference between the ownership of the

5% contribution and the 8% contribution made by the employer

in the employee’s name,” his argument goes. Appellant’s Br. at

23. While it is debatable that Saudi Arabia’s refund of

Peterson’s five-per cent contribution to GOSI represents a

“mutual[] . . . understanding[]” that the contribution was

Peterson’s property, it is indisputable that the refund does not

further represent a “mutual[] . . . understanding[]” that his

employers’ eight-per cent contributions also constituted

Peterson’s property inasmuch as the refund notified Peterson

that the refund constituted “full dues from GOSI.” J.A. 22. 

Peterson next maintains that FSIA’s “commercial activity”

exception supplies the necessary jurisdiction. Under this

exception, 

[a] foreign state shall not be immune from the

jurisdiction of courts of the United States or of

the States in any case . . . in which the action is

based upon a commercial activity carried on in

the United States by the foreign state; or upon an

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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. 

28 U.S.C. § 1605(a)(2). A foreign state is subject to jurisdiction

under this exception based upon any of three distinct types of

commercial activity: “commercial activity carried on in the

United States,” an “act performed in the United States in

connection with a commercial activity . . . elsewhere,” or an “act

outside the territory of the United States in connection with a

commercial activity . . . elsewhere” which “causes a direct effect

in the United States.” Id. 

Peterson asserts that his claim is based upon the third type—an

act that (1) takes place “outside the territory of the United

States”; (2) “in connection with a commercial activity of the

foreign state elsewhere”; and (3) “causes a direct effect in the

United States.” Id. The act that took place outside the United

States, he says, is Saudi Arabia’s 1987 Royal Decree excluding

non-Saudi employees from GOSI, Royal Decree No. M/43. The

Decree was issued “in connection with a commercial activity,”

he continues, because the “act of investing the employee

contributions in private companies and providing loans to

private industry constituted commercial activity,” Appellant’s

Br. at 36-37, and because the retirement system was established

for an “overriding commercial purpose”—i.e., “to attract highly

skilled foreign workers . . . to live and work in Saudi Arabia for

the purpose of developing the country’s infrastructure,”

Appellant’s Br. at 38. The Royal Decree caused a “direct

effect” in the United States, Peterson concludes, because Saudi

Arabia is “accustomed to sending refund checks to be deposited

in bank accounts in the United States and [its] failure to send a

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full refund has thus caused [a] direct effect in the United States.”

Appellant’s Br. at 40. 

Whatever the merit of Peterson’s arguments regarding the first

two requirements, we conclude that his claim fails the final

one—i.e., that the “commercial activity” causes a “direct effect”

in the United States. In Republic of Argentina v. Weltover, Inc.,

504 U.S. 607 (1992), the Supreme Court defined the term

“direct effects”; “an effect is ‘direct,’ ” the Weltover Court said,

“if it follows ‘as an immediate consequence of the defendant’s

. . . activity.’ ” Id. at 618 (quoting & citing Weltover, Inc. v.

Republic of Argentina, 941 F.2d 145, 152 (2d Cir. 1991))

(ellipsis by Court). The Weltover Court concluded that

Argentina’s unilateral rescheduling of the maturity dates of

certain bonds caused a “direct effect” in the United States

because the payees “had designated their accounts in New York

as the place of payment, and Argentina made some interest

payments into those accounts before announcing that it was

rescheduling the payments.” 504 U.S. at 618-19. “Because

New York was thus the place of performance for Argentina’s

ultimate contractual obligations,” the Court explained, “the

rescheduling of those obligations necessarily had a ‘direct

effect’ in the United States: Money that was supposed to have

been delivered to a New York bank for deposit was not

forthcoming.” Id. at 619. We applied Weltover in Goodman

Holdings v. Rafidain Bank, 26 F.3d 1143 (D.C. Cir. 1994), and

concluded that no “direct effect” in the United States resulted

from an Iraqi bank’s failure to honor letters of credit because

that failure resulted in “no ‘immediate consequence’ in the

United States.” Id. at 1146 (quoting Weltover, 504 U.S. at 618).

We found “[t]he situation . . . quite different” from Weltover

because “[n]either New York nor any other United States

location was designated as the ‘place of performance’ where

money was ‘supposed’ to have been paid” to the plaintiffs. Id.

(quoting Weltover, 504 U.S. at 619). We explained that the

bank “might well have paid them from funds in United States

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banks but it might just as well have done so from accounts

located outside of the United States.” 26 F.3d at 1146-47. 

Peterson’s allegations fail to demonstrate that Saudi Arabia

was “ ‘supposed’ to” refund his GOSI contribution to him in the

United States. See id. at 1146 (quoting Weltover, 504 U.S. at

619). In his complaint, he asserted that he “and other foreign

workers, their employers, GOSI, and the Saudi Government all

understood that Plaintiff would return to the United States and

that GOSI benefits would be remitted here,” Complaint at 7,

¶ 28, reprinted in J.A. at 7, and that he “believed that his

contributions to GOSI would be returned to him in the United

States.” Complaint at 7, ¶ 29, reprinted in J.A. at 7. In his brief

to us, he further states that he submitted to the district court

“numerous declarations . . . from other foreign workers similarly

situated demonstrating that [Saudi Arabia was] accustomed to

refunding the GOSI contributions in the United States” and that

“remittances of GOSI annuity benefits . . . were to be sent to the

last known addresses of covered employees.” Appellant’s Br.

at 40 & n.10. These assertions evidence no agreement—implied

or express—that Peterson was to be paid in the United States.

In fact, he was not paid in the United States. Although he

claims to have made “special arrangements,” Appellant’s Br. at

40, Peterson not only received his refund in Saudi Arabia but

deposited it in a Saudi bank as well—the entire transaction

occurred outside the United States. Moreover, Peterson’s

counsel stated below that Saudi Arabia “represented” to nonSaudi employees that it would refund GOSI contributions

“wherever the workers lived,” J.A. 320, so that, if Peterson

chose to reside outside the United States, Saudi Arabia would

have returned his contribution to him there, see J.A. 320 (“Of

course, if [Peterson] moved to another country, he would have

asked to be paid elsewhere and he would have been paid

elsewhere.”). Thus, similar to the situation in Goodman

Holdings, Saudi Arabia “might well have paid” Peterson or

another employee in the United States “but it might just as well

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have done so” outside the United States. 26 F.3d at 1146-47;

see also Princz, 26 F.3d at 1172 (“A ‘direct effect’ . . . is one

which has no intervening element, but, rather, flows in a straight

line without deviation or interruption.” (internal quotation marks

& citation omitted)). Accordingly, the “commercial activity”

exception does not provide any court in the United States with

the jurisdiction necessary to entertain Peterson’s suit against

Saudi Arabia.

* * *

For the foregoing reasons, the judgment of the district court is

affirmed.

So ordered.

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