United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued April 30, 2018 Decided August 7, 2018

No. 13-7169

HELMERICH & PAYNE INTERNATIONAL DRILLING CO.,

APPELLEE

HELMERICH & PAYNE DE VENEZUELA, C.A.

APPELLEE/CROSS-APPELLANT

v.

BOLIVARIAN REPUBLIC OF VENEZUELA, ET AL.,

APPELLANTS/CROSS-APPELLEES

Consolidated with 13-7170, 14-7008

On Remand from the Supreme Court of the United States

Catherine E. Stetson argued the cause for the 

appellants/cross-appellees. With her on the briefs were William 

L. Monts, III, Mitchell P. Reich, Bruce D. Oakley, Joseph D. 

Pizzurro, Robert B. García, Kevin A. Meehan, and Juan O. 

Perla.

Catherine M.A. Carroll argued the cause for 

appellees/cross-appellant. With her on the briefs were David 

W. Ogden and David W. Bowker.
2

Jessie K. Liu, U.S. Attorney, and Douglas N. Letter, 

Sharon Swingle, and Lewis S. Yelin, Attorneys, U.S. 

Department of Justice, were on the brief for amicus curiae 

United States of America.

Before: GARLAND, Chief Judge, TATEL, Circuit Judge, and

SENTELLE, Senior Circuit Judge. 

Opinion for the Court filed by Circuit Judge TATEL.

Opinion concurring in part and concurring in the judgment

filed by Senior Circuit Judge SENTELLE.

TATEL, Circuit Judge: After Venezuela and two of its

agencies seized all assets of an American drilling company’s 

Venezuelan subsidiary, both parent and subsidiary sued in 

federal court. In a prior opinion, we held that, notwithstanding 

the defendants’ efforts to invoke sovereign immunity, both

companies’ suits could go forward because each company had, 

consistent with the then-governing circuit standard, made a 

“non-frivolous” claim that its case fell into a statutory

immunity exception that permits suit against foreign-state

defendants in certain cases involving takings that violate

international law. Helmerich & Payne International Drilling 

Co. v. Bolivarian Republic of Venezuela (Helmerich II), 784 

F.3d 804, 814, 816 (D.C. Cir. 2015) (quoting Agudas Chasidei 

Chabad of United States v. Russian Federation, 528 F.3d 934, 

941 (D.C. Cir. 2008)). The Supreme Court, however, 

overturned this circuit’s “nonfrivolous-argument standard” and

vacated our prior judgment. Bolivarian Republic of Venezuela 

v. Helmerich & Payne International Drilling Co. (Helmerich 

III), 137 S. Ct. 1312, 1324 (2017). Tasked now on remand with 

determining whether either company has alleged facts that are 

sufficient, if true, to establish that it has in fact suffered a taking 

in violation of international law, we conclude that only the 
3

American parent—and not its Venezuelan subsidiary—has 

done so. We therefore affirm the district court’s dismissal of 

the subsidiary’s claims, as well as its denial of the defendants’ 

motions to dismiss the parent’s claims. 

I.

The parties agree that we are to resolve the issues

presented here “solely on the basis of the allegations in the 

complaint.” Joint Stipulation and Motion to Establish a 

Briefing Schedule for the Adjudication of Defendants’ Motions 

to Dismiss at 2, Helmerich & Payne International Drilling Co. 

v. Bolivarian Republic of Venezuela (Helmerich I), 971 F. 

Supp. 2d 49 (D.D.C. 2013) (No. 11-cv-1735) (“Stipulation”), 

ECF No. 34. We therefore draw our factual recitation from the 

complaint’s allegations, assuming their truth and construing 

them in the light most favorable to the plaintiff companies. See 

Helmerich II, 784 F.3d at 811.

Starting in the late 1990s, Venezuelan company Helmerich 

& Payne de Venezuela, C.A. (H&P-V), a wholly owned 

subsidiary of Oklahoma-based Helmerich & Payne 

International Drilling Co. (H&P-IDC), began providing 

exclusive oil- and gas-drilling services to Venezuelan stateowned entities, including Petróleos de Venezuela, S.A., and 

PDVSA Petróleo, S.A. (collectively, PDVSA), that own and 

manage Venezuela’s oil reserves. Compl. ¶ 2. In order to 

overcome Venezuela’s “difficult geological conditions,” 

H&P-V acquired “some of the largest, most powerful, and 

deepest-drilling, land-based drilling rigs available,” id. ¶ 21, 

and developed “a substantial infrastructure needed to maintain, 

repair, operate, and transport [its] drilling equipment,” id. ¶ 25.

The companies’ relationship with PDVSA soured after 

Venezuela’s then-President Hugo Chávez replaced much of 

PDVSA’s workforce in the wake of a 2002–03 strike. Id. ¶ 28. 
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From then on, PDVSA “refused to make timely payments” 

under its drilling contracts, id. ¶ 29, and by June 2009, PDVSA 

had racked up over $113 million in debt to H&P-V, id. ¶ 51. 

Consequently, when the contracts began expiring in early 2009, 

H&P-V “made clear to [PDVSA] that it would not enter into 

new contracts or restart drilling operations unless [PDVSA] 

paid a substantial amount of [its] outstanding debt.” Id. ¶ 52.

Despite these warnings, PDVSA stopped all payments to H&PV in May 2010, with somewhere near $32 million in debt 

remaining. Id. ¶ 56.

Matters deteriorated further the following month. In midJune 2010, seeking “to force H&P-V to negotiate new contract 

terms immediately” and to forgive PDVSA’s outstanding debt, 

id. ¶ 63, PDVSA employees, acting with assistance from the 

Venezuelan National Guard and at the behest of the 

Venezuelan government, blockaded eleven of H&P-V’s 

drilling sites, id. ¶¶ 59–61, 65. According to contemporaneous 

PDVSA press releases, the Venezuelan government had in 

effect “nationalized” these drilling operations. Id. ¶ 65.

Venezuela made the nationalization official soon 

thereafter. The Venezuelan National Assembly began by

“declar[ing] that the taking of all eleven of [H&P-V’s] oil 

drilling rigs and associated property would be of ‘public benefit 

and good.’” Id. ¶ 67. Taking up the Assembly’s 

recommendation, then-President Chávez issued an

“Expropriation Decree,” which authorized the “forcible 

taking” of H&P-V’s assets and declared that the “expropriated 

property [would] become the unencumbered and unlimited 

property of [PDVSA].” Id. ¶ 68. The complaint alleges that 

Venezuela’s actions were driven, at least in part, by animus 

against H&P-V due to its “U.S. ownership.” Id. ¶ 97.
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Days after the decree, PDVSA filed two eminent domain 

suits in Venezuelan court to effectuate the expropriations. Id.

¶¶ 72–73. Neither proceeding, however, has progressed 

beyond the earliest stages, leaving H&P-V and H&P-IDC

without compensation. Id. ¶¶ 86–87. In the meantime, PDVSA 

“ha[s] been operating H&P-V’s Venezuelan business as a 

going concern—employing not only the [company’s] real and 

personal property but also [its] drilling rig managers, drilling 

rig workers, and other professionals who were trained by, and 

formerly worked for, H&P-V.” Id. ¶ 76. According to the 

complaint, “[t]he seizure constituted a taking of the entirety of 

[H&P-V and H&P-IDC’s] Venezuelan business operations.” 

Id. ¶ 75. In other words, Venezuela and PDVSA “took the 

entire business, which they now operate as a state-owned 

commercial enterprise,” thus leaving H&P-V “[s]tripped of all 

its productive assets,” id. ¶ 81, and without “any significant 

tangible property or . . . any commercial operations in 

Venezuela,” id. ¶ 85.

In late 2011, H&P-V and H&P-IDC (collectively, H&P)

sued PDVSA and Venezuela in the United States District Court

for the District of Columbia, claiming as relevant here that the 

expropriation of H&P’s “business and assets” without 

compensation violated international law. Id. ¶ 181. Venezuela 

and PDVSA moved to dismiss for lack of jurisdiction under the 

Foreign Sovereign Immunities Act of 1976, 28 U.S.C. §§ 1330, 

1602–1611, which provides that a foreign state, including 

“agenc[ies] or instrumentalit[ies]” like PDVSA, id. § 1603(a), 

“shall be immune from the jurisdiction of the courts of the 

United States” unless a statutory exception applies, id. § 1604. 

In response, H&P maintained that the alleged takings fit within 

one such exception, the “expropriation exception,” which 

authorizes jurisdiction over a foreign state where “rights in 

property taken in violation of international law are in issue” and

where—a matter not presently at issue—that property is 
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sufficiently connected to commercial activity inside the United 

States. Id. § 1605(a)(3).

To streamline resolution of this jurisdictional issue, the 

parties agreed to seek the district court’s initial decision on

several threshold matters on the basis of the complaint alone. 

Stipulation at 3. The parties asked the court to determine, first,

whether H&P-V is “a national of Venezuela under international 

law” for purposes of the expropriation exception and, second,

whether H&P-IDC has prudential standing to assert an 

expropriation claim. Id.

Based on its resolution of these threshold questions, the 

district court dismissed H&P-V’s expropriation claim but held

that H&P-IDC’s could proceed. See Helmerich I, 971 F. Supp. 

2d at 73. As for the Venezuelan-incorporated H&P-V, the court 

concluded that it is “considered a national of Venezuela under 

international law,” id. at 61, and so failed to satisfy the 

expropriation exception’s requirements because a state’s 

seizure of its own national’s property is not typically a 

“violation of international law,” 28 U.S.C. § 1605(a)(3). As for

the U.S.-incorporated H&P-IDC, the district court 

acknowledged that a corporate parent generally lacks 

prudential standing to enforce the rights of its subsidiary, see 

Helmerich I, 971 F. Supp. 2d at 70, but found that rule 

inapplicable because H&P-IDC sought “to enforce [its] own

individual rights,” id. at 71 (emphasis added). According to the 

complaint, Venezuela had “deprived H&P-IDC, individually, 

of its essential and unique rights as sole shareholder of H&P-V 

by dismantling its voting power, destroying its ownership, and 

frustrating its control over the company.” Id. at 73. Because 

“[i]nternational custom” protects such ownership rights, id. at 

73 n.11, the district court concluded that H&P-IDC’s claim

falls within the expropriation exception as long as it satisfies

the exception’s commercial-activity requirement. 
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On appeal, we ruled that both companies’ claims could 

proceed. See Helmerich II, 784 F.3d at 808. Emphasizing that 

circuit precedent established a “forgiving standard,” id. at 813, 

under which we would “grant a motion to dismiss on the 

grounds that the plaintiff has failed to plead a ‘taking in 

violation of international law’ . . . only if the claims [were] 

‘wholly insubstantial or frivolous,’” id. at 812 (quoting 

Chabad, 528 F.3d at 943), we found that both companies’ 

expropriation claims cleared this “exceptionally low bar,” id.

As for H&P-V, we acknowledged that, “generally, a 

foreign sovereign’s expropriation of its own national’s 

property does not violate international law,” id., but we went 

on to observe that H&P-V alleged “that Venezuela ha[d] 

unreasonably discriminated against it on the basis of its sole 

shareholder’s nationality, thus implicating an exception” that 

the Second Circuit had announced in Banco Nacional de Cuba 

v. Sabbatino, 307 F.2d 845 (2d Cir. 1962), rev’d on other 

grounds 84 S. Ct. 923 (1964). Helmerich II, 784 F.3d at 812. 

Although characterizing Sabbatino as “[d]ated and uncited,” 

we observed that it “remains good law” in the Second Circuit 

and found “[no] decision from any circuit that so completely 

forecloses H&P-V’s discriminatory takings theory as to 

‘inescapably render the claim[] frivolous’ and ‘completely

devoid of merit.’” Id. at 813 (emphases and alteration in 

original) (quoting Hagans v. Lavine, 415 U.S. 528, 538 

(1974)).

As for H&P-IDC, we observed that, under United States 

law, “corporate ownership aside, shareholders may have rights 

in corporate property . . . ‘by virtue of their exclusive beneficial 

ownership, control, and possession of the properties and 

businesses allegedly seized.’” Id. at 815 (quoting Ramirez de 

Arellano v. Weinberger, 745 F.2d 1500, 1516 (D.C. Cir. 1984)

(en banc), vacated 471 U.S. 1113 (1985)). Because H&P-IDC 
8

arguably “had property rights in [its] corporation’s assets,” id., 

and because the expropriation of those assets arguably violated 

international law, we concluded that H&P-IDC had satisfied 

our circuit’s standard by “put[ting] its rights in property in issue 

in a non-frivolous way.” Id. at 816 (quoting Chabad, 528 F.3d 

at 941).

The Supreme Court vacated and remanded. Helmerich III, 

137 S. Ct. at 1324. Rejecting the line of circuit precedent 

establishing the permissive standard this court had employed, 

the Supreme Court held that “a party’s nonfrivolous, but 

ultimately incorrect, argument that property was taken in 

violation of international law is insufficient to confer 

jurisdiction” under the expropriation exception. Id. at 1316. It 

therefore remanded for this court to consider whether H&P’s

“factual allegations . . . make out a legally valid claim”—and 

not merely a non-frivolous one—“that a certain kind of right is 

at issue (property rights) and that the relevant property was 

taken in a certain way (in violation of international law).” Id.

Accordingly, we ask whether H&P-V and H&P-IDC, now 

deprived of the “forgiving standard” they previously enjoyed, 

Helmerich II, 784 F.3d at 813, have pled facts that “do show 

(and not just arguably show) a taking of property in violation 

of international law,” Helmerich III, 137 S. Ct. at 1324. 

Considering the question de novo, see Helmerich II, 784 F.3d 

at 811, we separately address H&P-V and H&P-IDC’s 

expropriation claims in Parts II and III, respectively. In Part IV, 

we address Venezuela’s argument that any remaining claims 

against it—as distinct from PDVSA—must be dismissed in 

light of the expropriation exception’s commercial-activity 

requirement. In conducting our analysis, we have benefited 

from the helpful amicus briefs submitted by the United States.
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II.

All parties agree that H&P-V has adequately alleged that

Venezuela and PDVSA have taken property in which it has 

rights, namely, its drilling rigs and related equipment. The 

parties disagree, however, over whether the complaint

sufficiently alleges that those assets were taken “in violation of 

international law,” as the expropriation exception requires. 28 

U.S.C. § 1605(a)(3).

In arguing that H&P-V’s claim falls outside the ambit of

international law, Venezuela and PDVSA invoke the “so-called 

‘domestic takings rule,’” which provides that, as a general 

matter, “a foreign sovereign’s expropriation of its own 

national’s property does not violate international law.” Simon 

v. Republic of Hungary, 812 F.3d 127, 144 (D.C. Cir. 2016) 

(quoting Helmerich II, 784 F.3d at 812). Acknowledging this 

rule, H&P-V argues that it does not govern here for two 

reasons: (1) H&P-V should be treated as a foreign company 

under international law because Venezuelan law considers it 

foreign for certain purposes, and (2) even if it is treated as a 

Venezuelan company, Venezuela’s seizure of its property was 

motivated by a desire to harm its foreign owner, H&P-IDC, and 

so falls into an exception to the domestic-takings rule. We 

consider each argument in turn.

A.

The domestic-takings rule bars H&P-V’s expropriation 

claim only if, in seizing H&P-V’s assets, Venezuela 

expropriated the property of “its own national[].” Helmerich II, 

784 F.3d at 812. Under international law, “a corporation has 

the nationality of the state under the laws of which the 

corporation is organized.” Restatement (Third) of the Foreign 

Relations Law of the United States (“Third Restatement”)

§ 213. Accordingly, H&P-V, a Venezuelan-incorporated 

company with a legal identity distinct from that of its 
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shareholders under local law, see Código de Comercio art. 

201.3 (Venez.) (“Venezuelan Commercial Code”), is

considered a Venezuelan national under international law.

H&P-V rejects this straightforward reasoning. Instead, it 

makes a two-step argument that international and Venezuelan 

law combine to strip it of its Venezuelan nationality for 

international-law purposes. First, it cites an International Court 

of Justice opinion, The Barcelona Traction, Light and Power 

Co. (Belg. v. Spain), 1970 I.C.J. 3 (Feb. 5), for the proposition 

that “[m]unicipal law determines the [international] legal 

situation . . . of . . . limited liability companies,” id. at 34, ¶ 41. 

Next, it points out that a Venezuelan executive order in effect 

at the time of the expropriations at issue, Decree 356,

denominated foreign-owned, domestically incorporated 

companies such as itself “[i]nternational investment[s]” 

entitled to special protections under domestic law. Decree 

Having the Rank and Force of Law on Investment Promotion 

and Protection, Decree No. 356, art. 3.2, Official Gazette No. 

5,390 (Oct. 22, 1999) (Venez.) (“Decree 356”); see also id. art.

3.1 (defining “investment” to include “any of the corporate . . . 

forms allow[ed] by Venezuelan law”). So, the argument runs

this way: international law directs us to “municipal law,” and 

Venezuela’s “municipal law” considered H&P-V 

“international” at the relevant time, so H&P-V must be 

“international” vis-à-vis Venezuela for purposes of its

international-law claim.

This argument misconceives both international and 

Venezuelan law. As to the former, Barcelona Traction

provides no support for the idea that a domestically 

incorporated company characterized as “international” under 

local law somehow loses its domestic status under international 

law. The “[m]unicipal law” that, according to Barcelona 

Traction, “determines [a company’s] legal situation” under 
11

international law, Barcelona Traction, 1970 I.C.J. at 34, ¶ 41,

consists of the “generally accepted” principles that appear time 

and again in domestic legal systems throughout the world, and 

not, as H&P-V would have it, “the municipal law of a particular 

State,” id. at 37, ¶ 50. After studying the generally accepted 

principles that govern the legal status of corporations under 

domestic legal systems, the Barcelona Traction court

concluded that the limited liability company is typically 

characterized by its “legal personality,” id. at 34, ¶ 40, and that

the place of legal incorporation therefore governs such a

company’s nationality under international law, see id. at 42,

¶ 70.

Nor, in any event, does Venezuelan law establish H&P-V 

as “international” in any relevant sense. Purporting to create 

only domestic rights capable of enforcement by “the national

courts or the Venezuelan arbitration tribunals,” Decree 356 art. 

23 (emphases added), Decree 356 nowhere promised to allow 

Venezuela’s domestic corporations to enforce these rights in 

international tribunals. It is therefore not the sort of 

governmental declaration that “ha[s] the effect of creating legal 

obligations” under international law. Nuclear Tests (Austl. v. 

Fr.), 1974 I.C.J. 253, 267, ¶ 43 (Dec. 20); cf., e.g., Military and 

Paramilitary Activities in and Against Nicaragua (Nicar. v. 

U.S.), 1984 I.C.J. 392, 418–19 (finding United States’ 

declaration about its intent to submit to the jurisdiction of an 

international court to be binding).

In seizing H&P-V’s assets, Venezuela may well have 

violated the local protections it promised foreign-owned, 

domestically incorporated companies in Decree 356. But

because that decree does nothing to alter H&P-V’s status as a 

Venezuelan company under international law, the domestictakings rule applies: the proper place for a Venezuelan 
12

company to assert its property rights against the Venezuelan 

government is a Venezuelan court.

B.

Given H&P-V’s Venezuelan nationality, its takings claim

against Venezuela is a matter of domestic, not international, 

law under the domestic-takings rule. H&P-V insists, however,

that the rule has a relevant exception: if a state expropriates the 

property of a domestically incorporated company with the 

discriminatory aim of harming the company’s foreign owners, 

it violates customary international law notwithstanding the 

domestic-takings rule. And because Venezuela’s seizure of its 

assets was “discriminatory, based on . . . [its] connections to 

the United States,” Compl. ¶ 180, H&P-V contends, it has 

properly alleged that its property was “taken in violation of 

international law,” 28 U.S.C. § 1605(a)(3).

Venezuela and PDVSA beg to differ. They respond, first, 

that H&P-V has failed to demonstrate that international law 

recognizes a discrimination exception to the domestic-takings 

rule and, second, that even if such an exception exists, the 

complaint’s factual allegations fail to plausibly establish that 

Venezuela’s actions were motivated by discriminatory animus. 

Because we agree with Venezuela and PDVSA on the former 

point, we need not address the latter.

As an initial matter, H&P-V misunderstands its burden. 

Pointing to the fact that a foreign-state defendant “bears the 

burden of proving that the plaintiff’s allegations do not bring 

its case within a statutory exception to immunity,” Phoenix 

Consulting, Inc. v. Republic of Angola, 216 F.3d 36, 40 (D.C. 

Cir. 2000), H&P-V apparently believes that in assessing its 

claim that its property was taken “in violation of international 

law,” 28 U.S.C. § 1605(a)(3), we must accept any 

representation it chooses to make about the content of 
13

international law unless Venezuela and PDVSA somehow 

definitively disprove it. This is not the law. Although H&P-V 

is correct that Venezuela and PDVSA “bear[] the ultimate 

burden of persuasion to show [an immunity] exception does not 

apply,” H&P-V bears the “initial burden” of overcoming the 

Act’s “presumption of immunity” by making out a legally 

sufficient case that an exception does apply in the first place. 

Bell Helicopter Textron, Inc. v. Islamic Republic of Iran, 734 

F.3d 1175, 1183 (D.C. Cir. 2013). In other words, as the 

Supreme Court made clear in this very case, H&P-V must 

present “a valid claim that ‘property’ has been ‘taken in 

violation of international law,’” Helmerich III, 137 S. Ct. at 

1318 (quoting 28 U.S.C. § 1605(a)(3)), before the burden shifts 

to Venezuela and PDVSA to disprove that claim.

Because H&P-V does not contend that any express 

international agreement, such as a treaty, entitles it to assert a 

cognizable discriminatory takings claim against its own state 

of incorporation, we ask whether H&P-V has shown that 

Venezuela has, in seizing its assets, violated customary

international law, see Third Restatement § 102(1), i.e., the

“general and consistent practice” that states follow out of “a

sense of legal obligation” to the international community, id.

§ 102(2). In conducting this inquiry, we give “substantial 

weight” to the judgments and opinions of national and 

international judicial bodies, scholarly writings, and 

unchallenged governmental pronouncements that “undertake 

to state a rule of international law.” Id. § 103(2).

H&P-V has failed to make the requisite showing. Instead, 

it relies on an underwhelming hodgepodge of sources, none of 

which unmistakably contemplates a discrimination exception 

to the domestic-takings rule, and all of which derive from a 

single country—the United States—that expressly argues in its 

amicus brief in this case that no such exception exists. See U.S. 
14

Br. 9–10 (“Customary international law does not ignore the 

nationality of a corporation even when it is alleged that the 

state’s expropriation of a domestically incorporated company 

was motivated by discrimination against foreign 

shareholders.”). Although this scattershot showing was 

sufficient the first time around, i.e., to render H&P-V’s claim 

that Venezuela violated international law neither “inescapably

. . . frivolous” nor “completely devoid of merit,” Helmerich II, 

784 F.3d at 813 (quoting Hagans, 415 U.S. at 538, 543), it 

cannot now clear the higher hurdle of demonstrating that the 

discrimination exception H&P-V urges has in fact crystallized 

into an international norm that bears the heft of customary law.

H&P-V principally relies on Sabbatino, a 1962 Second 

Circuit decision that H&P-V reads to hold that a state violates 

international law if it seizes the assets of a domestically 

incorporated company out of a desire to harm the company’s 

foreign owners. Decided against the backdrop of a Cuban 

executive resolution that authorized the expropriation of all 

American-owned property in Cuba, Sabbatino considered 

whether Cuba’s uncompensated seizure of sugar belonging to 

a Cuban company that was more than 90% American-owned, 

see Sabbatino, 307 F.2d at 849–50, comported with “the rules 

and principles of international law,” id. at 854. The court held 

that it did not. See id. at 868. Despite acknowledging the 

domestic-takings rule, the court “place[d] no significance . . . 

on the fact that [the company] was chartered in Cuba” because

the expropriation was motivated by anti-American animus and, 

in the court’s view, “[w]hen a foreign state treats a corporation 

in a particular way because of the nationality of its 

shareholders, it would be inconsistent . . . in passing on the 

validity of that treatment to look only to the ‘nationality’ of the 

corporate fiction.” Id. at 861. Although Sabbatino was reversed 

on other grounds, see Banco Nacional de Cuba v. Sabbatino, 

376 U.S. 398 (1964), the Second Circuit on remand reaffirmed 
15

“with emphasis” that the Cuban company’s nationality was “of 

no particular significance” under international law because the 

expropriation targeted the company’s American shareholders, 

Banco Nacional de Cuba v. Farr, 383 F.2d 166, 185 (2d Cir. 

1967).

Venezuela and PDVSA, together with the United States, 

argue that H&P-V misreads Sabbatino. Pointing to the 

opinion’s statement that “the nationality of the corporation is 

disregarded” under international law “when it is different from 

the nationality of most of the corporation’s shareholders,” 

Sabbatino, 307 F.2d at 861, they contend that the case relied on 

this “incorrect premise,” U.S. Br. 9, rather than any 

discrimination principle, as the basis for rejecting application 

of the domestic-takings rule.

We agree that Sabbatino is wrong to the extent it suggests 

that corporate nationality under international law depends on 

the nationality of the corporate owners rather than the place of 

incorporation. See supra at 9–12. We need not, however,

determine whether Sabbatino rested its rejection of the 

domestic-takings rule on this mistaken suggestion. Even 

assuming that it relied on the discrimination theory H&P-V 

urges, Sabbatino—a single, half-century-old case from a single 

intermediate court in a single country—is by itself insufficient 

to establish a “general and consistent practice of states.” Third 

Restatement § 102(2); see also Simon, 812 F.3d at 146 (urging 

“caution before concluding that a state’s actions against its own 

nationals infringe a prohibition of sufficiently universal 

acceptance to amount to a ‘violation of international law’” 

(quoting 28 U.S.C. § 1605(a)(3))).

Nor do the scattered authorities beyond Sabbatino to 

which H&P-V points contain any clear suggestion that 

international law recognizes a discrimination exception to the 
16

domestic-takings rule. As an initial matter, the authorities

Sabbatino itself cited contain no such suggestion. Some

sources it cited were voluntary settlements that made no 

pronouncement on the scope of international law. See, e.g., 

Settlement of the Claim of the Standard Oil Company of New 

Jersey Arising Out of the Destruction of Property in 1916, in

U.S. Dep’t of State, 3 Papers Relating to the Foreign Relations 

of the United States, 1929, at 757–58, Docs. 858–59 (1944); 

Settlement of the Controversy of the Tlahualilo Company with 

the Government of Mexico, in U.S. Dep’t of State, Papers 

Relating to the Foreign Relations of the United States, with the 

Address of the President to Congress, December 2, 1913, at 

993–1010, Docs. 1295–99 (1920). And of the authorities

Sabbatino cited that did evaluate a domestic taking under 

international law, none indicated that the motive of the state 

effecting the taking was relevant to legality. See, e.g., 

Arbitration of the Claim of Alsop and Company, an American 

Corporation, v. Chile, Award, in U.S. Dep’t of State, Papers 

Relating to the Foreign Relations of the United States, with the 

Annual Message of the President Transmitted to Congress, 

December 7, 1911, at 38–53, 41, Doc. 35 (1918) (rejecting 

Chile’s attempt to invoke domestic-takings rule as

“inconsistent with the terms” upon which the parties presented 

the case for arbitration); Arbitration of Claims of the Salvador 

Commercial Company et al. v. Salvador, in U.S. Dep’t of State, 

Papers Relating to the Foreign Relations of the United States, 

with the Annual Message of the President Transmitted to 

Congress, December 2, 1902, at 838–73, 849, Docs. 799–800

(1903) (allowing a domestic-takings claim to proceed against a 

state that had granted a domestic concession to a foreigner on 

the condition that the foreigner incorporate domestically).

Just as the authorities upon which Sabbatino relied provide 

no support for a discrimination exception to the domestictakings rule, neither do those that followed in Sabbatino’s 
17

wake. H&P-V cites the United States’ amicus brief in 

Sabbatino’s Supreme Court proceedings, but that brief—in

contrast to the brief, adverse to H&P-V, that the United States 

has submitted here—takes no position on whether a state’s 

discriminatory action against a domestic company violates 

international law. See Brief for the United States as Amicus 

Curiae at 2–3, Banco Nacional de Cuba v. Sabbatino, 376 U.S. 

398 (1964), in 2 I.L.M. 1009, 1012 (1963) (arguing only that 

United States courts should decline to adjudicate foreign 

governments’ domestic acts). And of the law review articles 

H&P-V cites that agree with Sabbatino that the discriminatory 

confiscation of foreign property violates international law, 

none make any effort to justify applying that rule to the 

confiscated property of a domestic corporation. See Roland A. 

Paul, The Act of State Doctrine: Revived but Suspended, 113 

U. Pa. L. Rev. 691, 706–07 (1965); John R. Stevenson, The 

Sabbatino Case—Three Steps Forward and Two Steps Back, 

57 Am. J. Int’l L. 97, 97 (1963); Martin Domke, Foreign 

Nationalizations: Some Aspects of Contemporary International 

Law, 55 Am. J. Int’l L. 585, 602–03 (1961); Comment, The Act 

of State Doctrine—Its Relation to Private and Public 

International Law, 62 Colum. L. Rev. 1278, 1311 (1962).

Equally unpersuasive are H&P-V’s citations to a U.S. 

ambassador’s responses to the Cuban expropriation resolution 

that lay at the heart of the Sabbatino litigation. Although the 

ambassador characterized the resolution as “manifestly in 

violation of . . . international law” because it was “in its essence 

discriminatory,” he, like the law review articles just mentioned, 

focused his criticism on the fact that the resolution “specifically 

limited . . . its application to the seizure of property owned by 

nationals of the United States.” Press Release, U.S. Dep’t of 

State, U.S. Protests New Cuban Law Directed at American 

Property (July 16, 1960), in 43 Department of State Bulletin 

171, 171 (1960) (emphasis added); see also Press Release, U.S. 
18

Dep’t of State, United States Protests Cuban Seizures of 

Property (Aug. 9, 1960), in 43 Department of State Bulletin 

316, 316 (1960) (expressing “indignant protest” over “the 

expropriation of property located in Cuba of citizens of the 

United States” (emphasis added)). 

H&P-V next cites U.S. legislation enacted in response to 

the Cuban expropriations. It first points to a program 

established pursuant to the International Claims Settlement Act 

of 1949, 22 U.S.C. §§ 1621 et seq., that provided a mechanism 

for “nationals of the United States” to submit expropriation 

claims against Cuba to the U.S. Foreign Claims Settlement 

Commission in order to allow that body to “obtain information 

concerning the total amount of such claims” for diplomatic 

purposes, id. § 1643. This program lends H&P-V no support.

To be sure, the Commission, in at least one case, upheld the 

claim of an American parent company “for the value of its 

ownership interest” in a wholly owned Cuban subsidiary that 

Cuba had “seized.” Foreign Claims Settlement Commission, 

Final Report of the Foreign Claims Settlement Commission’s 

Adjudication of Claims in Its Cuba Program 374 (1972). But 

the fact that a nation violates a foreign company’s rights under 

international law if it effects a discriminatory taking of that 

company’s property, including an entire domestically 

incorporated subsidiary, see infra at 22–24, hardly suggests 

that international law gives a domestic company protection 

against its own government for the seizure of its property.

H&P-V also points to a Foreign Assistance Act amendment 

that requires the President to suspend assistance to any foreign 

government that “has nationalized or expropriated or seized 

ownership or control of property owned by . . . any corporation, 

partnership, or association not less than 50 per centum 

beneficially owned by United States citizens” unless that 

government “take[s] appropriate steps . . . to discharge its 

obligations under international law toward such citizen or 
19

entity.” Act of Aug. 1, 1962, Pub. L. No. 87-565, § 301(d)(3), 

76 Stat. 255, 261 (codified at 22 U.S.C. § 2370(e)(1)(A)). That

amendment, however, offers no insight into what “steps” 

international law might require, especially where the majority 

American-owned company is incorporated domestically within 

the expropriating state. Finally, H&P-V contends that the 

expropriation exception to the Foreign Sovereign Immunities 

Act was intended to offer protection from the sorts of takings 

that Congress has elsewhere characterized as efforts by “radical 

governments” to “strik[e] a blow at the United States 

Government.” S. Rep. No. 93-676, at 26 (1974). But H&P-V 

identifies nothing suggesting that Congress intended to extend 

this protection to companies organized under the laws of those 

very governments. See generally H. Comm. on Foreign Affairs, 

88th Cong., Expropriation of American-Owned Property by 

Foreign Governments in the Twentieth Century 22–28 (1963), 

in 2 I.L.M. 1066, 1091–97 (1963).

Moving beyond the 1960s, H&P-V points to several

bilateral investment treaties that prohibit a signatory from 

seizing the assets of a corporation organized under its laws if 

that corporation is the wholly owned subsidiary of a parent 

incorporated in a different signatory. These treaties, however, 

are specific, bargained-for agreements between nations and 

therefore offer little evidence that the signatories would 

perceive “a sense of legal obligation” to follow the same rules 

under international custom absent a negotiated treaty. Third 

Restatement § 102(2).

Finally, H&P-V turns to the Restatements, both Second 

and Third, of the Foreign Relations Law of the United States. 

This move is unavailing as well. The Third Restatement, 

although citing Sabbatino, Third Restatement § 712 Reporter’s 

Note 5, points to no other authority that has adopted the

discrimination theory it purportedly embraced. And while that
20

Restatement acknowledges that a nation with “significant 

links” to a company incorporated in a foreign country can 

sometimes represent that company diplomatically “against the 

state of incorporation itself,” id. § 213 Reporter’s Note 3, or 

can even choose to “treat the corporation as its national” for 

diplomatic purposes, id. § 213 cmt. d, it nowhere suggests that 

the company itself has an international-law claim against its 

state of incorporation in the event of a discriminatory 

expropriation, see also Barcelona Traction, 1970 I.C.J. at 41–

45, ¶¶ 69–84 (noting that “the lack of capacity of [a] company’s 

national State to act on its behalf” can be grounds for the 

corporate owners’ state to offer diplomatic protection, id. 41 

¶ 69, but pointing out that “the claim of the State is not identical 

with that of the individual or corporate person whose cause is 

espoused,” id. 44 ¶ 79). 

Finding scant support in the more recent Third 

Restatement, H&P-V looks back fifty years to the Second. 

There, in the comments accompanying a rule involving dual 

citizens that never made its way into the Third Restatement, it 

finds a helpful example, also absent from the Third 

Restatement. See Restatement (Second) of the Foreign 

Relations Law of the United States § 171 cmt. d. The problem

for H&P-V, however, is that the Restatement cites no support 

for the example. And given that the Restatement purports to

codify international law, not to create it, its pronouncements

are useful only if they flow from sources of positive law such 

as judicial authority or reasoned scholarly commentary.

In the end, then, aside from Sabbatino, H&P-V has pointed 

to a smattering of United States sources, most decades old, that 

stand for little beyond the proposition that a state violates 

international law by effecting the uncompensated or

discriminatory seizure of foreign-owned assets. Nothing in 

these sources, however, casts doubt on the United States’ 
21

established position that this rule stops short of protecting

assets that belong to a domestically incorporated company, 

even if international law under certain circumstances might 

permit a foreign state with ties to that company to intercede 

diplomatically on that company’s behalf. Because H&P-V has 

therefore failed to show that the alleged seizure of its assets 

amounts to a “violation of international law,” 28 U.S.C. 

§ 1605(a)(3), we shall affirm the dismissal of its claim.

III.

We turn now to H&P-IDC’s expropriation claim. When 

this case was previously before us, we concluded that

H&P-IDC had adequately put at issue its “rights in property 

taken in violation of international law” for purposes of the 

expropriation exception because (1) H&P-V presented a nonfrivolous claim that its physical assets had been “taken in 

violation of international law,” and (2) H&P-IDC made a nonfrivolous argument that it had “rights in” H&P-V’s property. 

28 U.S.C. § 1605(a)(3); see also Helmerich II, 784 F.3d at 814–

16. Having now concluded that H&P-V’s property was not

taken in violation of international law, however, see supra at 

9–21, we are left to ask whether H&P-IDC has adequately

alleged rights in some other property that was.

As a starting point, international law prohibits a state from 

taking “the property of a national of another state,” unlike the 

property of its own national, without compensation. See Third 

Restatement § 712(1)(c) (emphasis added). Therefore, 

although the domestic-takings rule bars H&P-IDC from basing 

an expropriation claim on Venezuela’s seizure of H&P-V’s 

property, the rule does nothing to prohibit H&P-IDC from

basing such a claim on Venezuela’s seizure of its own property. 

Carefully heeding this distinction, H&P-IDC argues that it has 

put at issue two distinct property rights of its own that 

Venezuela and PDVSA have “taken in violation of 
22

international law.” 28 U.S.C. § 1605(a)(3). First, it argues

broadly that Venezuela has unlawfully seized its ownership 

interest in its subsidiary, H&P-V. Second, and more narrowly, 

it argues that Venezuela has unlawfully seized its allegedly 

direct right under Venezuelan law to exercise some degree of 

control over H&P-V’s expropriated assets.

A.

Most broadly, H&P-IDC contends that its right of 

ownership in its wholly owned subsidiary, H&P-V, constitutes

“property taken in violation of international law.” 28 U.S.C. 

§ 1605(a)(3). Venezuela and PDVSA do not dispute that this 

right qualifies as “property” within the meaning of the

expropriation exception. Cf. Nemariam v. Federal Democratic 

Republic of Ethiopia, 491 F.3d 470, 480 (D.C. Cir. 2007) 

(finding “no reason to distinguish between tangible and 

intangible property” for purposes of the exception). Our 

question, therefore, is whether H&P-IDC has adequately 

alleged that Venezuela and PDVSA expropriated H&P-V itself

in violation of international law.

International law undisputedly protects the “direct rights”

shareholders enjoy in connection with corporate ownership, 

including “the right to any declared dividend, the right to attend 

and vote at general meetings, [and] the right to share in the 

residual assets of the company on liquidation.” Barcelona 

Traction, 1970 I.C.J. at 36, ¶ 47; see U.S. Supp. Br. 4–5. It is 

also well established that a state violates international law if it 

takes “measures that have an effect equivalent to a formal 

expropriation of [a foreign] shareholder’s own property rights,” 

even if the state does not formally divest the shareholder of its 

shares. Id. at 4; see also, e.g., 2012 U.S. Model Bilateral 

Investment Treaty, Annex B (taking the view that customary 

international law prohibits actions that have “an effect 

equivalent to direct expropriation without formal transfer of 
23

title”); Tidewater Investment SRL v. Bolivarian Republic of 

Venezuela, ICSID Case No. ARB/10/5, Award, ¶ 104 (Mar. 13, 

2015) (“[I]t is well accepted in international law that 

expropriation need not involve a taking of legal title to 

property.”); Third Restatement § 712, cmt. g (defining takings 

to include “not only . . . avowed expropriations in which the 

government formally takes title to property, but also . . . other 

actions of the government that have the effect of ‘taking’ the 

property, in whole or in large part”).

To be sure, not every state action that has a detrimental 

impact on a shareholder’s interests amounts to an indirect 

expropriation of the shareholder’s ownership rights. See, e.g.,

Barcelona Traction, 1970 I.C.J. at 36, ¶ 46 (“[A]n act directed

against and infringing only [a] company’s rights does not 

involve responsibility towards the shareholders, even if their 

interests are affected.”); U.S. Br. 12–13 (“[A] shareholder’s 

direct rights generally are not implicated by state action that 

depreciates the value of a corporation’s shares, even 

severely.”). But where state action “is aimed at the direct rights 

of the shareholder as such,” it can form the basis for an

international expropriation claim. Barcelona Traction, 1970 

I.C.J. at 36, ¶ 47. As the United States explains in its amicus 

brief:

[W]hen a state permanently takes over 

management and control of [a foreign 

shareholder’s] business, completely destroying 

the beneficial and productive value of the 

shareholder’s ownership of their company, and 

leaving the shareholder with shares that have 

been rendered useless, it has indirectly 

expropriated the ownership of that business and 

has responsibility under customary
24

international law to provide just compensation 

to the shareholder.

U.S. Supp. Br. 12. Venezuela and PDVSA concede that this 

explanation is “accurate,” Defendants-Appellants’ Supp. Br. 1, 

and we agree, see, e.g., Pope & Talbot Inc. v. Government of 

Canada, Interim Award, ¶ 100 (NAFTA/UNCITRAL Arb. 

Trib. June 26, 2000) (understanding the “ordinary meaning” of 

expropriation “under international law” to include situations in 

which a foreign investment “has been nationalized” and

determining whether nationalization has occurred by asking, 

among other things, whether “the Investor remains in control 

of the Investment” and “directs [its] day-to-day operations”). 

As it turns out, the parties’ only real dispute in connection 

with H&P-IDC’s attempt to ground an expropriation claim on

the seizure of H&P-V itself is over whether the complaint 

adequately alleges that Venezuela and PDVSA have 

“permanently take[n] over management and control of 

[H&P-V’s] business, completely destroying the beneficial and 

productive value of [H&P-IDC’s] ownership of [its] company, 

and leaving [H&P-IDC] with shares that have been rendered 

useless.” U.S. Supp. Br. 12. We have little trouble concluding 

that it does. The complaint expressly alleges that Venezuela 

and PDVSA have taken H&P-V’s “entire business, which they 

now operate as a state-owned commercial enterprise,” Compl. 

¶ 81, and that H&P-V “no longer possesses any significant 

tangible property or maintains any commercial operations in 

Venezuela,” id. ¶ 85. In other words, Venezuela and PDVSA 

are alleged to have taken over “the entirety of [H&P-IDC’s] 

Venezuelan business operations,” id. ¶ 75, thus “depriv[ing]

H&P-IDC of its ownership and control of H&P-V,” id. ¶ 139.

These allegations describe the indirect expropriation of a 

shareholder’s direct rights to a T.
25

Venezuela and PDVSA disagree. They complain that 

Venezuela has neither “appointed ‘government directors’ to 

run H&P-V,” Defendants-Appellants’ Supp. Br. 7, nor 

“asserted the right . . . to direct legal action on H&P-V’s

behalf,” id. at 8. They also point to financial filings

unmentioned in the complaint that, according to them, show 

that H&P-V has been actively pressing its own legal claims and

collecting millions of dollars in consequence. See id. at 9. 

These are certainly relevant considerations that could 

ultimately shed light on how much control H&P-IDC maintains

over H&P-V and whether its ownership of H&P-V retains

meaningful value. And, if propped up with evidentiary support, 

they might be considered along with other such relevant facts 

as part of the district court’s ultimate “fact intensive, case-bycase inquiry” into whether Venezuela and PDVSA have in fact

committed the act of which they stand accused, namely the 

wholesale nationalization of H&P-V. U.S. Supp. Br. 6.

At this point in the litigation, however, we look only to the 

facts alleged in the complaint, take them as true, and construe 

them in H&P-IDC’s favor. See Helmerich II, 784 F.3d at 811; 

Stipulation at 2. Viewed through that lens, we think it quite 

obvious that those allegations sufficiently contend that

Venezuela and PDVSA have entirely commandeered all of 

H&P-V’s on-the-ground operations, leaving H&P-V with 

nothing but a nominal right to compensation that has proven 

worthless in Venezuela’s courts and that, we hold today, cannot 

be vindicated here. In thus alleging that Venezuela and PDVSA 

have expropriated its subsidiary corporation, H&P-IDC has 

presented “a valid claim that ‘property’ has been ‘taken in 

violation of international law.’” Helmerich III, 137 S. Ct. at 

1318 (quoting 28 U.S.C. § 1605(a)(3)). We shall therefore 

affirm the district court’s denial of the motions to dismiss 

H&P-IDC’s expropriation claim and remand for the parties to 
26

address any remaining threshold jurisdictional issues, 

including whether the expropriation exception’s commercialactivity requirement has been satisfied.

B.

Invoking a second, far narrower property interest alleged 

to have been “taken in violation of international law,” 28 

U.S.C. § 1605(a)(3), H&P-IDC argues that Venezuela and 

PDVSA have unlawfully expropriated its allegedly direct right 

under Venezuelan law to exercise some level of control over 

H&P-V’s drilling equipment. Though acknowledging that the 

equipment itself belonged to H&P-V, see Venezuelan 

Commercial Code art. 208 (“[P]roperty contributed by 

[corporate] partners becomes the property of the company 

. . . .”), H&P-IDC argues that as H&P-V’s sole owner it 

enjoyed certain rights in those assets under Venezuelan law, 

such as the right to approve their sale, see id. art. 280(4).

Accordingly, it goes on, when Venezuela and PDVSA seized 

H&P-V’s drilling rigs, they seized not only the rigs themselves,

but also H&P-IDC’s direct rights in those rigs. And those 

rights, the argument runs, while less comprehensive than the 

full bundle of rights that ownership affords, nonetheless

constitute legally recognized “property” subjected to 

uncompensated, and therefore unlawful, expropriation by a 

foreign government.

Given that we shall remand for further district-court 

proceedings in connection with H&P-IDC’s broader claim, that 

Venezuela and PDVSA expropriated H&P-V in its entirety, see 

supra at 22–25, we think it best not to address this narrower 

claim in the first instance, especially given that it raises 

difficult questions about the scope of a parent company’s rights 

in its subsidiary’s assets under Venezuelan law and about the 

extent to which international law protects those rights, 

whatever they might be. Should it become necessary for us to 
27

reach these tricky questions, we would be greatly aided by the 

considered judgment of the district court, which has yet to 

weigh in. We shall therefore leave it to that court to consider 

H&P-IDC’s narrower claim, if necessary, on remand.

IV.

One loose end remains. Venezuela argues that Simon v. 

Republic of Hungary, 812 F.3d 127 (D.C. Cir. 2016), requires 

the dismissal of all remaining claims against it, such that only 

claims against PDVSA may proceed. Simon held that the 

expropriation exception’s commercial-activity requirement 

authorizes jurisdiction over expropriation claims against a 

foreign state itself—as distinct from its agency or 

instrumentality—only if the expropriated 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.” Id. at 146 (quoting 28 

U.S.C. § 1605(a)(3)). Because H&P’s complaint contains no 

allegation that this condition has been satisfied, Venezuela 

argues, Simon requires this court to find that sovereign 

immunity protects Venezuela from ongoing proceedings in this 

case.

The district court declined to rule on this issue, principally 

because it is “not one of the initial issues that the parties jointly 

agreed to brief prior to jurisdictional discovery.” Helmerich I, 

185 F. Supp. 3d at 239. We, too, decline to do so, for the same 

reason. We understand that de Csepel v. Republic of Hungary, 

859 F.3d 1094 (D.C. Cir. 2017), forecloses what appears to be 

H&P’s main argument—that courts in our circuit are free to 

disregard Simon in light of an earlier decision, distinguished in 

de Csepel, that allowed an expropriation claim to proceed 

against Russia without requiring that the expropriated property

(or property exchanged for it) be present in the United States.

See id. at 1104–07 (making clear that Simon, not the earlier 
28

decision, is binding circuit law on this point). That said, we are 

mindful that H&P may yet have other arguments that it has not 

yet had the chance to present due to the way the parties have 

chosen to structure this litigation. The district court, with its 

insight into the twists and turns this case has taken, is in the 

best position to determine how to proceed, and we leave it to 

that court to rule on this issue in the first instance.

V.

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

dismissal of H&P-V’s expropriation claim for lack of 

jurisdiction, as well as its denial of Venezuela and PDVSA’s 

motions to dismiss H&P-IDC’s claim, and remand for further 

proceedings consistent with this opinion.

So ordered.
SENTELLE, Senior Circuit Judge, concurring in part and

concurring in the judgment: I fully concur in my colleagues’

opinion with respect to the claims of Helmerich & Payne de

Venezuela, C.A. I have misgivings concerning Part III of the

court’s opinion.

In my dissent from the original circuit opinion, Helmerich

& Payne International Drilling Co. v. Bolivarian Republic of

Venezuela, 784 F.3d 804, 819 (D.C. Cir. 2015), I set out my

reasons for concluding that we do not have jurisdiction under the

Foreign Sovereign Immunities Act, 28 U.S.C. § 1604, over the

claims of Helmerich & Payne International Drilling Co. 

Nothing in the Supreme Court’s opinion or in my colleagues’

present opinion has changed my mind. However, I recognize

the wisdom of the majority’s determination that: 

Given that we shall remand for further districtcourt proceedings in connection with H&PIDC’s broader claim, that Venezuela and

PDVSA expropriated H&P-V in its entirety, see

supra at 22-25, we think it best not to address

this narrower claim in the first instance,

especially given that it raises difficult questions

about the scope of a parent company’s rights in

its subsidiary’s assets under Venezuelan law and

about the extent to which international law

protects those rights . . . .

Maj. Op. at 26-27. I therefore, with some reluctance, join the

judgment of the court.