Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-06-07075/USCOURTS-caDC-06-07075-0/pdf.json

Parties Involved:
Mohamed Salem El-Hadad
Appellee
The Embassy of the United Arab Emirates
Appellant
United Arab Emirates
Appellant

Document Text:

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued March 13, 2007 Decided July 27, 2007

No. 06-7075

MOHAMED SALEM EL-HADAD,

APPELLEE

v.

UNITED ARAB EMIRATES AND

THE EMBASSY OF THE UNITED ARAB EMIRATES,

APPELLANTS

Appeal from the United States District Court

for the District of Columbia

(No. 96cv01943)

Mary M. Baker argued the cause for appellants. With her

on the briefs was Haig V. Kalbian.

Philip M. Musolino argued the cause for appellee. With

him on the brief were Sylvia J. Rolinski and Danielle M. Espinet

Before: TATEL, GARLAND and BROWN, Circuit Judges.

Opinion for the Court filed by Circuit Judge BROWN.

BROWN, Circuit Judge: The chief question in this appeal is

whether the Foreign Sovereign Immunities Act of 1976, 28

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U.S.C. § 1602 et seq., shields the United Arab Emirates from the

wrongful termination and defamation suit of its former employee, Mohamed Salem El-Hadad, once an accountant in the

U.A.E.’s embassy here in Washington, D.C. The case turns on

an application of the Act’s commercial activity exception. Id.

§ 1605(a)(2). Since we conclude El-Hadad was not a civil

servant under the Act, and his work did not involve the exercise

of distinctively governmental powers, we affirm the district

court in applying the commercial activity exception and denying

immunity. A relatively minor issue—the district court’s failure

to discount El-Hadad’s future lost earnings to present

value—compels us to reverse in part and remand the case solely

for correction of that aspect of the damages award.

I

The facts below summarize the district court’s detailed

findings after a bench trial, which we set aside only if clearly

erroneous. See El-Hadad v. Embassy of U.A.E., No. 96-1943,

2006 WL 826098 (D.D.C. Mar. 29, 2006); FED.R.CIV.P. 52(a).

El-Hadad is an Egyptian citizen who earned a bachelor’s

degree in accounting in 1976 and began a career marked for

many years by one promotion and positive job review after

another. From 1982 to 1992, he worked as an auditor for the

government of the United Arab Emirates in Abu Dhabi (not an

unusual arrangement for the U.A.E., whose population between

the ages of 15 and 64 numbers about 75% non-nationals, ElHadad v. U.A.E., 216 F.3d 29, 33 & n.6 (D.C. Cir. 2000)). In

1992, he formally resigned to begin work at the U.A.E.’s

embassy in Washington, where he was an auditor and

supervising accountant in the cultural attaché’s office—and

where he soon discovered that the cultural attaché, his deputy,

and others were involved in embezzling no less than $2 million

in U.A.E. state funds. El-Hadad exposed the embezzlement and

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helped with the subsequent investigation. In 1994, he was

promoted and commended for his work while the cultural

attaché and his accomplices were sacked.

About a year and a half later, in 1995, El-Hadad was

accused of financial impropriety in connection with the very

embezzlement he had exposed. Why he was accused—for the

record and the district court’s opinion make clear that the

accusation was baseless to the core—is a mystery, though a

letter the U.A.E.’s Minister of Finance wrote on El-Hadad’s

behalf gives a clue: “The existing disputes between the Cultural

Attaché in Washington and the . . . Ministry of Higher Education

and Scientific Research have directly impacted the case of Mr.

Mohammed El-Hadad . . . .” El-Hadad, 2006 WL 826098, at *4

(quoting Pl.’s Ex. 85). In fact, the U.A.E.’s Ambassador to the

United States, the Minister of Finance, and the new cultural

attaché each sent multiple letters vouching for El-Hadad’s

character and competence and refuting the allegations against

him point-by-point—views the district court seconded in its

factual findings, concluding that the documents in the record

“demonstrate either that the alleged impropriety was not, in fact,

improper or that if there was any fault, it lay elsewhere, such as

with the embezzlers El-Hadad had detected and reported.” Id.

Nonetheless, the department named in the Minister of Finance’s

letter, the Ministry of Higher Education and Scientific Research,

had final authority over El-Hadad’s employment in the cultural

attaché’s office and, in 1996, ordered penal dismissal along with

fines for the money El-Hadad allegedly mishandled.

After he was fired, El-Hadad briefly found work as an

auditor with the U.A.E.’s military attaché, but the Ministry of

Higher Education and Scientific Research viewed the job as a

“circumvention of the penal termination imposed,” id. at *5,

and, in late summer 1996, had him fired again. At about the

same time, a representative of the Ministry held a meeting about

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El-Hadad’s dismissal with the fifteen or so employees of the

cultural attaché’s office, announcing that El-Hadad was fired for

not doing his job properly or honestly. And since then, in

application after application both here and in Egypt (where he

returned in 1997), El-Hadad has been rejected from every

accounting job for which he has applied, always after inquiries

about the circumstances in which his prior employment ended.

His efforts over the last decade to find work in other fields and

to start his own business have failed as well.

El-Hadad sued the U.A.E. and its Washington embassy for

breach of his employment contract and defamation in August

1996, just after being fired from his job with the military

attaché. Claiming immunity from suit under the Foreign

Sovereign Immunities Act, the U.A.E. moved to dismiss. The

district court, applying the Act’s “commercial activity” exception, denied the motion. El-Hadad v. Embassy of U.A.E., 69 F.

Supp. 2d 69 (D.D.C. 1999) (El-Hadad I). On interlocutory

appeal (under the collateral order doctrine), we reversed in part

and remanded with a list of questions for the district court to

answer before characterizing the employment relationship

between El-Hadad and the U.A.E. as commercial. El-Hadad v.

U.A.E., 216 F.3d 29 (D.C. Cir. 2000) (El-Hadad II). Applying

the analytic framework we had laid out, the district court once

again held the commercial activity exception to apply. ElHadad v. Embassy of U.A.E., No. 96-1943 (D.D.C. July 16,

2001) (El-Hadad III). The parties agreed to a bench trial, after

which the district court reaffirmed its decision to deny immunity

and concluded on the merits that the U.A.E. breached its

employment contract with El-Hadad ($1,245,961 in damages,

plus interest) and defamed him ($500,000 in damages). ElHadad v. Embassy of U.A.E., No. 96-1943, 2006 WL 826098

(D.D.C. Mar. 29, 2006) (El-Hadad IV). The U.A.E. now

appeals.

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II

The chief issue before us is the U.A.E.’s claim to immunity

under the Foreign Sovereign Immunities Act. Before passage of

the 1976 Act, American courts had generally regarded foreign

sovereigns as absolutely immune from suit (with exceptions

where the political branches made case-specific recommendations to suspend immunity). Verlinden B.V. v. Cent. Bank of

Nig., 461 U.S. 480, 486–88 (1983) (discussing the legacy of

Chief Justice Marshall’s opinion in The Schooner Exchange v.

M’Faddon, 11 U.S. (7 Cranch) 116 (1812)). But almost from

the outset, courts recognized a distinction “between the public

and governmental acts of sovereign states on the one hand and

their private and commercial acts on the other.” Alfred Dunhill

of London, Inc. v. Republic of Cuba, 425 U.S. 682, 695 (1976);

see also United States v. Planters’ Bank of Ga., 22 U.S. (9

Wheat) 904, 907 (1824) (Marshall, C.J.) (“[W]hen a government

becomes a partner in any trading company, it devests itself, so

far as concernsthe transactions of that company, of its sovereign

character, and takes that of a private citizen.”). That distinction

became the basis for a “‘restrictive’ theory of foreign sovereign

immunity,” a theory Congress codified in the Foreign Sovereign

Immunities Act of 1976. Verlinden B.V., 461 U.S. at 487. So

while the Act announces that foreign states “shall be immune

from the jurisdiction of the courts of the United States and of the

States,” 28 U.S.C. § 1604, the Act’s principal effect is in the list

of exceptions that follows, and the “most significant” exception,

Republic of Argentina v. Weltover, Inc., 504 U.S. 607, 611

(1992), the one at the heart of the restrictive theory as a whole

and at issue in this appeal, is the commercial activity exception

of § 1605(a)(2): “A foreign state shall not be immune . . . in any

case . . . in which the action is based upon a commercial activity

carried on in the United States by the foreign state . . . .” A state

engages in commercial activity, the Supreme Court has explained (since the Act never defines the term), “where it

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We nonetheless focus our commercial activity analysis on the 1

employment relationship between El-Hadad and the U.A.E. embassy

as a whole, rather than narrowly on El-Hadad’s termination alone or

separately on El-Hadad’s termination and defamation. Otherwise this

case might entirely defy analysis (what would be a “commercial” or

“non-commercial” breach of contract?), and split off both from ElHadad II, 216 F.3d at 34–36, and from other circuits’ handling of

FSIA challenges to wrongful termination (and related) claims, see,

e.g., Kato v. Ishihara, 360 F.3d 106, 111–12 (2d Cir. 2004); Holden

v. Canadian Consulate, 92 F.3d 918, 921 (9th Cir. 1996); Segni v.

Commercial Office of Spain, 835 F.2d 160, 164–66 (7th Cir. 1987).

In fact, much can turn on the activity chosen for the commercial

activity analysis, though the issue is not in dispute in our case.

Compare Saudi Arabia, 507 U.S. at 358 (holding the relevant act to be

misusing state police to imprison and torture a hospital worker), with

id. at 365 (White, J., concurring) (regarding the relevant act as

“run[ning] and operat[ing] a hospital”); see also Butters v. Vance Int’l,

Inc., 225 F.3d 462, 465 (4th Cir. 2000) (holding the relevant act to be

“how best to secure the safety of [Saudi Arabia’s] leaders” in a female

security agent’s Title VII claim against Saudi Arabia).

exercises ‘only those powers that can also be exercised by

private citizens,’ as distinct from those ‘powers peculiar to

sovereigns,’” Saudi Arabia v. Nelson, 507 U.S. 349, 360 (1993)

(quoting Republic of Argentina, 504 U.S. at 614) (internal

quotation marks omitted).

Since El-Hadad’s action is “based upon” breach of his

employment contract and defamation in connection with that

breach, this case involves the commercial activity exception as

applied in the employment context. See Saudi Arabia, 507 U.S.

at 357 (holding that the term “based upon” in the Act indicates

“those elements of a claim that, if proven, would entitle a

plaintiff to relief under his theory of the case”). The Act

1

doesn’t speak directly to this context, but its legislative history

does: “[P]ublic or governmental and not commercial in nature,

would be the employment of diplomatic, civil service, or

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Not all circuits approach these questions as we do. First, while 2

one court has, like us, expressly held that a non-civil servant (and nondiplomat, non-soldier) is not necessarily a commercial employee,

Crum v. Kingdom of Saudi Arabia, No. 05-275, 2005 WL 3752271,

at *4 (E.D. Va. July 13, 2005), another has suggested the opposite,

Holden, 92 F.3d at 921, and still others have seemed to assume the

military personnel,” while commercial and not public or

governmental in nature would be the “employment or engagement of laborers, clerical staff, or public relations or marketing

agents.” H.R. REP. NO. 94-1487, at 16 (1976), as reprinted in

1976 U.S.C.C.A.N. 6604, 6615; see also S. REP. NO. 94-1310,

at 16 (1976) (identical language). Thus, like many of our sister

circuits, we have held that a foreign government’s civil servants

(and diplomats and soldiers) do not qualify for the commercial

activity exception. El-Hadad II, 216 F.3d at 34 (citing

Broadbent v. Organization of American States, 628 F.2d 27,

34–36 (D.C. Cir. 1980)); see also Kato v. Ishihara, 360 F.3d

106, 111–12 (2d Cir. 2004); Holden v. Canadian Consulate, 92

F.3d 918, 921 (9th Cir. 1996); Segni v. Commercial Office of

Spain, 835 F.2d 160, 164–66 (7th Cir. 1987). We have not and

do not affirm the converse: A foreign government’s employee

might not be a civil servant (or diplomat or soldier) and still be

engaged in quintessentially governmental work—like, for

example, a judge. Thus, if El-Hadad is a civil servant, our

analysis stops for we have determined that the U.A.E. is immune

from his suit. If El-Hadad is not a civil servant, we go on to

scrutinize whether his work involves the exercise of “powers

that can also be exercised by private citizens, as distinct from

those powers peculiar to sovereigns.” Saudi Arabia, 507 U.S. at

360 (internal quotation marks omitted). As we framed it in ElHadad II: “[T]he operative question is whether El-Hadad was

a member of the U.A.E.’s civil service” and “[t]he ultimate

question . . . is whether El-Hadad’s employment constituted

commercial activity.” 216 F.3d at 34. Of course, the first

inquiry might well illuminate the second.2

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opposite, see, e.g., Segni, 835 F.2d at 164–65. To our eyes, the phrase

in the House and Senate Reports that undergirds this area of jurisprudence, “diplomatic, civil service, or military personnel,” is plainly

meant to be illustrative and not exhaustive (and wouldn’t make sense

if read to be exhaustive). In addition, it would be difficult to square

the rule that non-civil servants (and non-diplomats or non-soldiers) are

necessarily commercial with cases thoughtfully engaging the commercial activity exception in the employment context where the civil

servant (diplomat, soldier) issue simply doesn’t arise. See, e.g., Janini

v. Kuwait Univ., 43 F.3d 1534 (D.C. Cir. 1995). Second, and

relatedly, not all circuits have taken the same two-stage approach we

have to the operative question of whether plaintiff is a civil servant

and the ultimate question of whether his activity is commercial. The

Second Circuit treats the civil servant question as quite secondary

(“merely [an] example[]” to be used, if at all, only to aid in making the

“central” commercial/governmental distinction). Kato, 360 F.3d at

111. The Ninth Circuit, on the other hand, treats the civil servant

question as effectively superseding the commercial/governmental

distinction. Holden, 92 F.3d at 921. The Seventh Circuit melds the

two together such that exercises of peculiarly governmental power

become the chief mark of a civil servant, while exercises of power

common to private citizens mark a commercial employee. Segni, 835

F.2d at 164–65. We think it makes most sense to conduct two separate

but complementary inquiries, keeping the civil service inquiry glued

to, but not subsumed by, the statutory command from which it comes.

There is no definition of “civil service” in the Foreign

Sovereign Immunities Act or its legislative history and associated case law, and there are dangers in borrowing or analogizing

to get one. Our country’s notion of a civil service has certain

characteristic features (like merit selection, well-defined

personnel procedures, and benefits), but we can’t rightly expect

foreign governments to either “mimic civil service protections

now common to the United States” or “sacrific[e] the immunity

conferred by FSIA.” Kato, 360 F.3d at 113. And in fact, our

country’s notion of a civil service, conceived as an antidote to

political patronage, tends to include “clerical staff, or public

relations or marketing agents” and exclude many

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policymakers—exactly the opposite of the House and Senate

Reports’ apparent aim. The notion of public service might be a

closer proxy for that aim. On the other hand, some countries

might lack the notion of a “civil service” altogether, and others

might define the notion in a way far afield of FSIA’s purpose.

We therefore take a flexible and inclusive approach to determining whether a foreign government’s employee is a civil servant.

El-Hadad II lists five generally relevant considerations, while

noting that the list is not exclusive, necessarily applicable in all

cases, or, unfortunately (but unavoidably), analytically precise:

First, how do the U.A.E.’s own laws define its civil service,

and do El-Hadad’s job title and duties come within that

definition?

Second, what was the nature of El-Hadad’s employment

relationship with the U.A.E.? Did he have a true contractual arrangement, or is his “contract” claim instead based,

as the U.A.E. contends, solely upon the civil service laws of

the U.A.E.?

Third, what was the nature of El-Hadad’s employment

relationship when he worked in the U.A.E., and how did his

subsequent employment at the Embassy relate to that prior

tenure? The U.A.E. contends that El-Hadad was a longtime resident and member of its domestic civil service, who

was merely “transferred” to Washington to perform the

same functions (governmental audits) he had been performing at home. El-Hadad contends, on the other hand, that he

quit his position in the U.A.E. and began a “new” job in the

United States, “separate from his previous employment.”

Fourth, what was the nature of El-Hadad’s work? As noted

above, Congress indicated that the “employment or engagement oflaborers, clerical staff or public relations or marketUSCA Case #06-7075 Document #1056800 Filed: 07/27/2007 Page 9 of 18
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ing agents” would come within the definition of commercial activity. 

Fifth, what is the relevance of El-Hadad’s Egyptian nationality on the facts of this case? Is the U.A.E. a country in

which, as the House Report assumed, non-nationals are

unlikely to be employed as governmental officers? Or does

the U.A.E. often employ non-nationals in governmental

positions?

216 F.3d at 34 (internal citation omitted). The district court

applied this list to the facts in El-Hadad III and repeated the core

of its analysis in El-Hadad IV. The task isn’t easy. The

evidence is meager, sometimes contradictory, and the question

is exceedingly close. Thus it is of great importance in this case

that the foreign sovereign has the burden of proof. Princz v.

F.R.G., 26 F.3d 1166, 1171 (D.C. Cir. 1994).

As to the first question, the district court found that the

U.A.E. does not have a definition of “civil service,” that “no

such designation[] appear[s] to exist,” and that the U.A.E. “does

not distinguish between employees paid by the government by

categorizing them as civil service employees, governmental

employees, or civilian employees.” El-Hadad III, slip op. at

4–5. Yet confusingly enough, several official U.A.E. documents

in the record, including some the district court itself found

probative, use the term. Perhaps these contradictory signals

result from mistranslations of the documents’ original Arabic.

See id. at 5 n.3 (suggesting that the same Arabic term or terms

might be translated as “civil service” or “public service”). In

any case, we find it of some help that a 1994 letter from the

U.A.E. embassy’s cultural attaché states that El-Hadad “doesn’t

have the [c]ivil servant benefits.” If this letter means what it

appears in English to say, it is powerful evidence that El-Hadad

was not a civil servant according to U.A.E. law. Even if the

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letter is mistranslated, the fact that El-Hadad lacked benefits

common to other U.A.E. governmental employees is sufficient

for El-Hadad to prevail, if only slightly and in light of the

burden of proof, on the first factor.

Turning to the second question, El-Hadad was employed in

all respects pursuant to the U.A.E.’s “Local Employees Regulations for the UAE Missions Abroad 1983.” While not an

individualized contract, these regulations provide the clearest

evidence available to us that El-Hadad should not qualify as a

civil servant. First, the regulations define “local employees” as

being generally “[a]dministrative employees, translators . . .

mailmen, drivers, security guards, cooks, waiters, farmers, [and]

maintenance” and state that local employees should almost

always be nationals of the country in which the embassy is

located (with exceptions for “highly exceptional” cases, like,

apparently, El-Hadad’s). Art. 1/3, 4/5–4/6. Plainly, these

regulations are not aimed at what we or the U.A.E. would

normally call a civil service. On the contrary, these regulations

seem to describe the very people Congress intended the commercial activity exception for: “laborers, clerical staff,” and

other Americans contracting to perform ordinary commercial

services in the United States for a foreign government. Second,

the regulations actually refer to a civil service twice (though we

note again the possibility of mistranslation), both times in

discussing the special case of U.A.E. citizens employed as local

employees. Art. 20/2–20/3. While not easy to interpret, the

references appear to contrast local employees and civil servants,

making “civil service” a status available to local employees, if

at all, only if they are also citizens of the U.A.E. Now, it must

be said that under the regulations, local employees (like civil

servants in this country) may be terminated only for cause; ElHadad was, under the regulations as well as according to the

district court and his own testimony, a permanent employee.

Nonetheless, we find the second factor tips decisively in ElUSCA Case #06-7075 Document #1056800 Filed: 07/27/2007 Page 11 of 18
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Hadad’s favor.

The third question is easily answered: While El-Hadad’s

duties in Abu Dhabi were similar to his duties in Washington,

there can be no question that he formally and completely

terminated his employment in the U.A.E. before beginning work

in the United States. The district court goes farther, stating that

“[t]he evidence in the record suggests that El-Hadad’s employment at the UAE’s embassy in the District of Columbia was

separate from and unrelated to his prior employment in the

UAE.” El-Hadad III, slip op. at 7. Factor three favors ElHadad.

The fourth question is more complicated. The district court

reasoned in El-Hadad III that, like laborers, clerical staff, and

public relations or marketing agents, and unlike civil servants,

El-Hadad “had no role in the creation of UAE government

policy and was not privy to UAE political deliberations.” Slip

op. at 7–8. Elaborating on the point in El-Hadad IV, the district

court notes El-Hadad performed only the ordinary auditing

duties of any commercial accountant and that his duties,

“although important and involving large sums of money, were

ministerial, not discretionary.” 2006 WL 826098, at *6. We

agree that, to the extent El-Hadad lacked authority to determine

or articulate policy and lacked discretion in his duties, he is

more like the employees for whom Congress intended FSIA’s

commercial exception, and less like a civil servant. What gives

us pause is El-Hadad’s supervisory authority over at least eight

other accountants in the cultural attaché’s office. He was a “part

of the . . . government,” Holden, 92 F.3d at 921, in a way an

administrative assistant, for example, would not be. On balance,

we find his lack of discretion and exclusion from any policymaking role outweighs his supervisory role. Thus factor four

resolves in El-Hadad’s favor as well—though by a very narrow

margin indeed.

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The fifth question concerns an issue of central importance

in El-Hadad II, though not here. The sentence in the House and

Senate Reports classifying civil service work as governmental

states in full: “Also public or governmental and not commercial

in nature, would be the employment of diplomatic, civil service,

or military personnel, but not the employment of American

citizens or third country nationals by the foreign state in the

United States.” H.R. REP. NO. 94-1487, at 16 (1976), as

reprinted in 1976 U.S.C.C.A.N. 6604, 6615; see also S. REP.

NO. 94-1310, at 16 (1976) (identical language). At one point, in

dicta, we read this language to imply a per se rule that Americans and third country nationals, even if employed by a foreign

state as civil servants, count as commercial employees.

Broadbent, 628 F.2d at 34 (D.C. Cir. 1980). The district court’s

decision on the U.A.E.’s immunity in El-Hadad I turned on this

dictum. 69 F. Supp. 2d at 74–76. But in El-Hadad II, impressed

with the situation of small countries like the U.A.E. that at times

employ non-nationals in high governmental positions, we

rejected Broadbent’s per se rule and held that “a foreign state

can engage in noncommercial (i.e., governmental) activity

through third country nationals.” 216 F.3d at 33. Thus the

relevance of a plaintiff’s nationality for the civil service inquiry

becomes a matter of context. Where a country rarely if ever

hires non-citizens for its civil service (unlike the U.A.E.), noncitizenship strongly indicates that someone is not a civil servant.

And in our view, citizenship makes someone more likely to

qualify as a civil servant even if a country sometimes hires noncitizens as civil servants. Accord Segni, 835 F.2d at 165 n.7

(“[A] person hired by his own country’s government to work

abroad should have a somewhat lesser expectation of suing his

homeland in his host nation’s courts.”). Thus, were El-Hadad a

U.A.E. citizen, the U.A.E. might press its advantage, and were

non-citizens rarely if ever U.A.E. civil servants, El-Hadad might

press his. As it is, El-Hadad’s nationality is all but irrelevant.

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Multifactor tests tend to be inconclusive, but the evidence

here suggests El-Hadad is not a civil servant—and were the

inquiry totally inconclusive, that very fact, together with the

U.A.E.’s burden of proof, would decide the matterin El-Hadad’s

favor. We therefore hold that El-Hadad is not a civil servant and

move on to the ultimate question of whether his work involved

the exercise of “powers that can also be exercised by private

citizens, as distinct from those powers peculiar to sovereigns.”

Saudi Arabia, 507 U.S. at 360 (internal quotation marks

omitted). In so doing, we bear in mind a limiting principle from

the statute: “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.” 28 U.S.C. § 1603(d). One could question whether it

is possible to determine the nature of a human activity without

reference to its purpose, De Sanchez v. Banco Central de

Nicaragua, 770 F.2d 1385, 1393 (5th Cir. 1985) (“Often, the

essence of an act is defined by its purpose—gift-giving, for

example.”), but the Supreme Court has insisted that the statutory

command be carried out, Republic of Argentina, 504 U.S. at 617

(“[The 5th Circuit’s] argument is squarely foreclosed by the

language of FSIA.”), which in practice means rejecting any

argument that rests on the foreign state’s reasons for undertaking the activity alleged to be commercial, id. (“[I]t is irrelevant

why Argentina participated in the bond market in the manner of

a private actor; it matters only that it did so.” (emphasis in

original)). We cannot attend to whether a foreign government

aims to make a profit or protect its borders, whether El-Hadad’s

work aimed to carry out an international political program or to

keep the cultural attaché’s office supplied with pens and pencils.

We can look only to the resemblance between “the outward

form” of his conduct and powers and those of private citizens.

Id.

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One distinctive mark of governmental work is discretionary

involvement with sovereign law or policy. According to the

district court (and we see no reason to disturb its conclusions),

El-Hadad had no role in the creation of governmental policy,

and to the extent he carried it out, his duties were “ministerial,

not discretionary.” El-Hadad IV, 2006 WL 826098, at *6.

Instead, El-Hadad did standard accounting work—“auditing

expenditures, reviewing accounting methods, reconciling bank

statements or employing auditors to conduct these activities,” id.

at *7—of a character easily found in commercial enterprise. We

therefore affirm the district court’s conclusion that El-Hadad’s

employment was commercial rather than governmental, and

agree El-Hadad’s suit is authorized under the Foreign Sovereign

Immunity Act’s commercial activity exception.

III

The U.A.E. raises six other challenges to the district court’s

rulings, five of which obviously fail and one of which just as

obviously succeeds.

At trial, El-Hadad testified over objection that prospective

employers asked him why he left his job with the U.A.E.’s

embassy and told him they could not hire him due to his penal

termination. This was hearsay, the U.A.E. argues, and the

district court’s findings of fact relied on it. But the testimony

was hearsay only to the extent the district court used it for the

truth of the matter asserted, and there is only one substantial

respect in which the court might have done so: to show the

U.A.E.’s defamation caused El-Hadad professional injury.

Since the district court found defamation per se under D.C. law,

id. at *15–16, that injury was presumed and any error was

harmless. See FED. R. CIV. P. 61.

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The U.A.E. complains in two respects about the district

court’s treatment of documentary evidence. First, the U.A.E.

claims the district court admitted into evidence at trial documents undisclosed during discovery. But those documents,

which concerned arcane intricacies of the embezzlement ElHadad exposed, were apparently at issue in substance during

discovery; in any case, nothing in the district court’s opinion

turned on their obscurities. Second, the U.A.E. claims the

district court’s opinion relies on a pair of documents never

properly admitted into evidence at trial. Both documents,

however, concern whether El-Hadad qualifies as a civil servant

and were properly submitted to and used by the court in ElHadad III; the court referenced them again in El-Hadad IV only

by way of reiterating its past work. We find no error or only

harmless errors in these matters. See FED. R. CIV. P. 61.

The U.A.E. claims El-Hadad’s testimony from Egypt by

Internet video violated Federal Rule of Civil Procedure 43(a),

which requires “good cause” and “appropriate safeguards”

before a witness is permitted to testify “by contemporaneous

transmission from a different location.” But before permitting

the testimony, the district court insisted that El-Hadad prove he

had pursued and repeatedly been denied a visa to the United

States (as well as show careful preparations for translation and

teleconferencing). The U.A.E. retreats to the argument that ElHadad’s testimony was effectively unsworn because, with no

extradition treaty between the United States and Egypt, ElHadad could not be prosecuted for perjury. But this argument’s

only direct support comes from Harrell v. State, 709 So. 2d

1364, 1371 (Fla. 1998), which concerns the very different issues

at stake in applying the Sixth Amendment’s Confrontation

Clause in the criminal context. In fact, Rule 43 permits video

testimony, and its criminal equivalent (Federal Rule of Criminal

Procedure 26) doesn’t, precisely because the Supreme Court

found the criminal context too sensitive for the same rule. See

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Order of the Supreme Court, 207 F.R.D. 89, 93–96 (2002)

(Scalia, J.); United States v. Yates, 438 F.3d 1307, 1314–15

(11th Cir. 2006).

El-Hadad’s breach of contract claim required overcoming

the District of Columbia’s usual presumption of at-will

employment. Sisco v. GSA Nat’l Capital Fed. Credit Union,

689 A.2d 52, 54–55 (D.C. 1997). A properly distributed

employee manual with specific termination provisions can do

the job, id.; see also Byrne v. Nat’l R.R. Passenger Co., 184 Fed.

Appx. 6 (D.C. Cir. 2006) (unpublished per curiam), and the

district court found the Local Employees Regulations—whose

termination provisions provide for dismissal where, for example,

an employee’s dereliction of duty destroys valuable embassy

property or compromises official documents, Art. 17/7—to

qualify, El-Hadad IV, 2006 WL 826098, at *11. The U.A.E.

counters, primarily, that the evidence showing the Regulations

to have been distributed was too weak for the district court’s

conclusion. The evidence is weak—at least it is vague—but ElHadad himself testified to distribution, and several other

witnesses supported the claim. That is enough under our

“clearly erroneous” standard of review. FED. R. CIV. P. 52(a).

Finally, the U.A.E. attacks El-Hadad’s defamation claim,

arguing in the main that the common interest privilege protects

all the U.A.E.’s written and spoken statements about El-Hadad’s

dishonesty. But bad faith vitiates the privilege under D.C. law,

Moss v. Stockard, 580 A.2d 1011, 1024–25 (D.C. 1990), and we

have not the slightest difficulty affirming the district court’s

findings of bad faith, El-Hadad IV, 2006 WL 826098, at

*16–17. 

Thus we come to the U.A.E.’s complaints about

damages—principally that the district court failed to discount

El-Hadad’s future lost earnings to present value. We agree.

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“The measure of damages in an employee’s action against his

employer for breach of the employment contract is generally the

compensation ‘that would have been due to the employee during

the unexpired period of employment with appropriate reduction

to present worth.’” Hodge v. Evans Fin. Corp., 823 F.2d 559,

569 (D.C. Cir. 1987) (emphasis added) (internal quotation mark

omitted) (quoting District of Columbia v. Jones, 442 A.2d 512,

524 (D.C. 1982). The district court here noted the requirement,

El-Hadad IV, 2006 WL 826098, at *12, but in the event appears

to have overlooked it, id. at *13 n.14. We therefore must

reverse in part and remand solely for the district court to

perform this task. In all other respects, the district court is

affirmed.

So ordered.

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