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Parties Involved:
Elham Cicippio
Appellant
Joseph J. Cicippio
Appellant
Islamic Republic of Iran
Appellee
David Jacobson
Appellant

Document Text:

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1Appellants include Cicippio's wife, Elham Cicippio, as well. 

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued May 19, 1994 Decided July 29, 1994

No. 93-7047

JOSEPH J. CICIPPIO, ELHAM CICIPPIO,

DAVID JACOBSON,

APPELLANTS

v.

ISLAMIC REPUBLIC OF IRAN,

APPELLEE

Appeal from the United States District Court

for the District of Columbia

(92cv2300)

James Godin, of the Bar of the Supreme Court of Pennsylvania, pro hac vice, by special leave of the

Court, argued the cause for appellants. On the briefs for appellants was Barbara A. Barnes.

Bruno A. Ristau argued the cause and filed the brief for appellee.

Before: WALD, SILBERMAN, and RANDOLPH, Circuit Judges.

Opinion for the Court filed by Circuit Judge SILBERMAN.

SILBERMAN, Circuit Judge: Appellants appeal from the district court's order dismissing their

action against the Islamic Republic of Iran for lack of subject matter jurisdiction. Concluding that

kidnapping is not, by its nature, a commercial act, that dealings directly between two sovereign states

do not constitute "commercial activity" within the meaning ofthe Foreign Sovereign Immunities Act,

and that the "noncommercial tort" exception does not apply, we affirm.

I.

This case arises out ofthe well-publicized abductions of appellantsJosephCicippio and David

Jacobson in Lebanon.1 Appellants' complaint alleges that while working in Lebanon, Cicippio and

Jacobson were abducted by Islamic fundamentalists hired by the State of Iran and held by those

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2

In reviewing an order dismissing for lack of jurisdiction under FED. R. CIV. P. 12(b)(1) we

take all well-pleaded facts as true. 

agentsfor an extended period of time, during which theywere tortured.2Iran conditioned the release

of Cicippio and Jacobson on the return of Iranian assets frozen in this country by the United States

government. That abduction, it is also alleged, caused direct effects in the United States through the

emotional harm suffered by the victims' families, the payment of monies to the captors by Mrs.

Cicippio, and the unfreezing of Iranian assets. Jacobson and Cicippio, on the basis of these factual

allegations, sought damages for a number of intentional torts and for violations of international law.

They invoked the "commercial activity" and the "noncommercial tort" exceptions to the Foreign

Sovereign Immunities Act (FSIA) as bases for federal court jurisdiction.

Appellee, the Islamic Republic of Iran, moved to dismiss the suit on grounds that the court

lacked subject matter jurisdiction under the FSIA as well as personal jurisdiction over the defendant.

The district court granted the motion to dismiss on lack of subject matter jurisdiction. It concluded

that although Iran's alleged actions did appear to constitute "commercial activity" within the meaning

of the FSIAat least under the Supreme Court's analysis"state-supported kidnapping,

hostage-taking, and similar universally criminal ventures were simply not the sorts of proprietary

enterprises within the contemplation ofCongress when it enacted the "commercial activity' exception

to [the] FSIA." This appeal followed.

II.

The Foreign Sovereign Immunities Act of 1976, 28 U.S.C. § 1602 et seq. (1988), provides

that a "foreign state shall be immune from the jurisdiction of the courts of the United States and of

the States." 28 U.S.C. § 1604 (1988). The Act does create, however, a number of exceptions to this

immunity. Two are invoked here: the "commercial activity" and the "noncommercial tort"

exceptions. See 28 U.S.C. §§ 1605(a)(2), 1605(a)(5) (1988). We consider them in turn.

A.

The Act permits a suit against a foreign government to proceed in any case

in which the action is based upon a commercial activity carried on in the United States

by a foreign state; or upon an act performed in the United States in connection with

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a commercial activity of the foreign state elsewhere; or upon an act outside the

United Statesin 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) (1988) (emphasis added). Appellants rely on the third clause of this

subsection; i.e., they claim that the government of Iran committed an act in connection with

commercial activity elsewhere. The FSIA defines "commercial activity" as "either a regular course

of commercial conduct or a particular commercial transaction or act." 28 U.S.C. § 1603(d) (1988).

The subsection further directs that the "commercial character of an activity shall be determined by

reference to the nature of the course of conduct or particular transaction or act, rather than by

reference to its purpose." Id. We have not a little difficulty in understanding appellants' precise

theory of the case because they do not clearly identify which of the allegations is the "act" and which

makes up the "commercial activity". As best we can determine, appellants treat "hostage taking for

profit" as both the act and the commercial activity. In other words, appellants do not specifically

claimthat the freezing or prospective unfreezing ofIranian assets(or the paymentsmade byCicippio's

relatives) to gain his release constitute commercial activity, and that the kidnapping is an act in

connection with that transaction. Instead, appellants present the situation as one integrated activity

of a commercial nature which suggests that they should be suing under the first clause. We assume,

however, that appellants are implicitly claiming that one of the acts relating to the abduction takes

place "elsewhere" fromthe commercial activity. We therefore consider whether a foreign sovereign's

alleged use of non-official agents to conduct alleged hostage takings to gain economic advantages

can be considered a commercial activity.

The Supreme Court first had occasion to apply the FSIA's phrase "commercial activity" in

Republic of Argentina v. Weltover, Inc., 112 S. Ct. 2160 (1992). There the government of Argentina

had issued bonds payable in dollars to support its guarantee of payments of loans its domestic

borrowers took from foreign creditors. When the Argentine government unilaterally extended the

time of payment it was sued in New York (where payment was to be made) by foreign creditors.

Drawing on the legislative history of the FSIA, as well as on the pre-Act practice of the State

Department, the Court

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conclude[d] that when a foreign government acts, not as regulator of a market, but

in the manner of a private player within it, the foreign sovereign's actions are

"commercial" within the meaning ofthe FSIA.... [T]he issue is whether the particular

actionsthat the foreign state performs(whatever the motive behind them) are the type

of actions by which a private party engagesin "trade and traffic or commerce." Thus,

a foreign government's issuance of regulations limiting foreign currency exchange is

a sovereign activity, because such authoritative control of commerce cannot be

exercised by a private party; whereas a contract to buy army boots or even bullets is

a "commercial" activity, because private parties can similarly use sales contracts to

acquire goods.

Weltover, 112 S. Ct. at 2166 (citations omitted) (emphasis added). The government of Argentina,

recognizing that the statutemade its purpose irrelevant, nevertheless argued that one could not ignore

the context in which it issued the bondswhich was in order to enhance the ability of its citizens to

borrow foreign capital, not like the ordinary commercial issuance of debt to raise capital or refinance

debt. The court assumed arguendo that the notions of context and purpose might be different but

rejected Argentina's argument because the bonds had been issued, just as might be done by a private

actor, to restructure the government's existing obligations. Putting aside for now the relationship

between purpose and context, we take fromWeltoverthe key proposition that in determining whether

a given government activity is commercial under the act, we must ask whether the activity is one in

which commercial actors typically engage.

Appellantsinsist that thisformulation does not mean that when a sovereign is alleged to have

engaged in illegal activities such activities should be thought not commercial per se. The Second

Circuit had earlier determined that kidnapping (and assassination) could not be considered

commercial activities under FSIA because a private person could not engage in such activitylawfully.

See Letelier v. Republic of Chile, 748 F.2d 790, 797 (2d Cir. 1984). Appellants point out, however,

that all causes of action can be thought, in some sense, to accuse a defendant of acting unlawfully,

and the distinction between tortious and criminal acts is not always clear.

The most recent FSIA Supreme Court decision, Saudi Arabia v. Nelson, 113 S. Ct. 1471

(1993), may well undermine the Second Circuit's categorical approach. There an American plaintiff

hired in the United States to work in a Saudi hospital claimed that he had been wrongly imprisoned

and tortured by Saudi police in retaliation "for his whistle blowing" directed at certain hospital

practices. Although the Second Circuit's approach offered the most obvious line of analysis, the

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3The claim was brought under Clause 1 of the Act so the Court did not consider whether the

torture could be regarded as an act in connection with the commercial activity of operating the

hospital. 

4

Justice White accused the majority of a "single minded focus on the exercise of police power,

[which] while simplifying the case hardly does it justice." 113 S. Ct. at 1482-83. The majority's

focus does seem a bit artificial. 

Court did not take it. Instead, the Court concluded that since the basis of the claim was the alleged

tortiousperhaps criminalactions of the Saudi police (not the arguably commercial activity in

recruiting Nelson), and private parties cannot exercise that "sort " of power while engaging in

commerce, the activity could not be thought "commercial."3

The Court dismissed the contention that the Saudi government typically usessuch techniques

to resolve commercialdisputes byemphasizing that the "powers allegedlyabused were those of police

and penal officers" and noting that "[i]n any event the argument is off the point, for it goes to

purpose." 113 S. Ct. at 1480. The last observation, it seems to us, makes abundantly clear, on top

of the statute and Weltover, that in this case we cannot consider the alleged motive of the Iranian

government in determining whether appellants' claim if true would involve commercial activity. It

is to the character and type of activity to which we should look; purpose must be disregarded and

a plaintiff cannot, by describing the act in question asintertwined with its purpose, avoid the statutory

preclusion. That leaves the issue whether the hostage taking itself can be described as a commercial

activitywithout regard to its purpose.

Appellants, relying on Nelson, assert that it can and should be so regarded. Because the

Supreme Court in Nelson rested on the governmentalstatus ofthe police alleged to have tortured the

plaintiff, rather than the character of the act, one might believe that if those very acts had been

conducted on behalf of the Saudi government by contract thugs the Saudi government would not

have enjoyed immunity under the statute. Justice White, concurring, made exactly that point. 113

S. Ct. at 1481, 1482.

We do not think, however, that appellants (or Justice White) correctly read the Court's

opinionwhich, admittedly, issomewhat puzzling.4 The Court never conceded the validity of Justice

White'ssupposition. By focusing on the status of the perpetrators, the Court avoided the hypothetical

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Justice White posed: "we do not address the case where a claim [based on commercial activity]

consists of both commercial and sovereign elements [such as where private individuals had been

employed to torture the plaintiffs]. We do conclude, however, that where a claim rests entirely upon

activities sovereign in characteras herejurisdiction will not exist under the clause regardless of

any connection the sovereign acts may have with commercial activity." Id. at 1478 n.4 (internal

citation omitted).

In our case,since we cannot saythat the alleged tortious conduct rests entirely upon activities

sovereign in character, because the kidnappers are not alleged to have been officials of the Iranian

government, we cannot dismiss appellants' claim on that basis. On the other hand, to accept

appellants' claim would be to declare that all such acts, regardless of context, sponsored openly or

covertly by a sovereign power are outside the immunity granted by the FSIA unless conducted

directly by acknowledged government officials. We think that cannot be what Congress intended.

Although the purpose and perhaps the illegal character of the alleged acts are irrelevant in judging

their commercial character, to return to the notion assumed arguendo in Weltover, the context in

which the acts take place must be germane. Even Justice White, who thought the allegations in

Nelson did make out a claim of commercial activity, rested his view on the commercial character of

the hospital where Nelson was employed. 113 S. Ct. at 1481-82. Unless an act takes place in a

commercial context it would be impossible to determine whether it is conducted in the manner of a

private player in the market. Otherwise, any act directed by a foreign government and carried out

byirregular operatives in whatever circumstances could be thought commercial including isolated acts

of assassination, extortion, blackmail, and kidnapping (for, perhaps, the sexual pleasure of a depraved

monarch). That can hardly be what Congress meant by commercial activity nor what the Weltover

Court thought were typical acts of market participants.

Insisting that a given act be judged in context before concluding whether it is commercial

activity is not inconsistent with eschewing consideration of purpose. The provision of the statute

which requires us to ignore purpose was obviously designed to prevent the foreign sovereign from

casting a governmental purpose, which always can be found, as a cloak of protection over typical

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5As we have already noted ordinary kidnapping for ransom is not a commercial activity so the

alleged request that Cicippio's wife pay money for his return adds nothing. 

6We, therefore, need not decide whether there were "direct effects" in the United States. 

commercial activities, not to reach out to cover all sorts of alleged nefarious acts that are grist for

John Le Carre novels. Here the kidnapping by itself cannot possibly be described as an act typically

performed by participants in the market (unless one distorts the notion of a marketplace to include

a hostage bazaar). That money was allegedly sought from relatives of the hostages could not make

an ordinary kidnapping a commercial act any more than murder by itself would be treated as a

commercial activity merely because the killer is paid. Perhaps a kidnapping of a commercial rival

could be thought to be a commercial activity. If so, it would not be because the kidnappers

demanded a ransom, but because the kidnapping took place in a commercial context.

There remains the question whether the kidnapping can be thought as an act, not itself a

commercial activity, but taken in connection with commercial activity elsewhere. The commercial

activity under that reading would be presumably, the Iranian government's continued effort to gain

the unfreezing of its assets in the United States.5 We do not think, however, that those efforts are

properly regarded under the Act as commercial. The United States government was acting purely

as a sovereign regulator when it froze the assets of Iran and its citizens, and the government of Iran's

alleged effortsto release the freeze were likewise peculiarly sovereign. When two governments deal

directly with each other as governments, even when the subject matter may relate to the commercial

activities of its citizens or governmental entities, or even the commercial activity conducted by

government subsidiaries, those dealings are not akin to that of participants in a marketplace.

Governments negotiating with each other invariably take into account non-marketplace

considerationsmost obviously political relationsand so they cannot be thought to be behaving,

in that setting, as businessmen.6

B.

Appellants alternatively invoke the "noncommercial tort" exception to the FSIA. That

exception, codified at 28 U.S.C. § 1605(a)(5), provides that a foreign state shall not be immune in

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7The Supreme Court apparently reached the same result in Argentine Republic v. Amerada

Hess Shipping Corp., 488 U.S. 428 (1989), although the matter is not entirely free from doubt

and its statements on this point were in dicta. In the course of concluding that "[b]ecause

respondents' injury unquestionably occurred well outside the 3-mile limit then in effect for the

territorial waters of the United States, the exception for noncommercial torts cannot apply," id. at

441 (emphasis added), the Court noted that the "tortious attack" on respondent's ship occurred

outside the United States, id. at 440 (emphasis added), a statement that might imply that the

tortious conduct, as well as the injury, must occur within the United States. The Court, however,

might simply have relied on the location of the attack as grounds for concluding that the "injury"

occurred outside the United States. At any rate, having concluded that Amerada Hess' injury did

not occur in the United Statesa requirement explicitly imposed by the FSIAany statements

about where the tortious conduct occurred were dicta. It is therefore still unclear what position

the Supreme Court would take if faced with a suit alleging tortious conduct occurring abroad that

caused injury in the United States. 

any case "in which money damages are sought against a foreign state for personal injury ... occurring

in the United States and caused by the tortious act or omission of that foreign state...." We have held

that this exception requires that both the tortious act as well as the injury occur in the United States.

See Persinger v. Islamic Republic of Iran, 729 F.2d 835, 842 (D.C. Cir. 1984).7 Appellants criticize

that opinion, but we are of course bound by it. There is no dispute that the tortious actions of which

appellants complain occurred in Lebanon. Accordingly, the noncommercial tort exception to the

FSIA's grant of immunity is inapplicable.

* * * *

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

So ordered.

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