FILED 

U.S. COURT OF APPEALS

 ELEVENTH CIRCUIT 

 December 22, 2003 

 THOMAS K. KAHN 

 CLERK

[PUBLISH]

IN THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT

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No. 03-10849

Non-Argument Calendar

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D.C. Docket No. 00-09050-CV-DTKH

MIRZA SHAMIM AHMED BEG,

Plaintiff-Appellant,

versus

ISLAMIC REPUBLIC OF PAKISTAN,

PAKISTAN ARMY, THE

GOVERNMENT OF PUNJAB

Defendants-Appellees.

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Appeal from the United States District Court

for the Southern District of Florida

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(December 22, 2003)

Before BARKETT, HULL and KRAVITCH, Circuit Judges.

KRAVITCH, Circuit Judge:
2

This case involves the issue of whether a foreign government’s expropriation

of property and subsequent failure to compensate for the expropriation falls under the

commercial activity exception to the Foreign Sovereign Immunities Act. See 28

U.S.C. § 1605(a)(2). The district court found that the commercial activities exception

did not apply. We affirm.

I. Background

Mirza Shamim Ahmed Beg filed suit against the Government of Pakistan, the

Pakistan Army, and the regional Government of Punjab concerning the expropriation

of land in Pakistan. In his complaint, Beg alleges that he owned eleven and one-half

acres in the Punjab region of Pakistan valued at $10 million, which were expropriated

from him by the Pakistani government. Beg states that the property was then used for

military housing or otherwise transferred to members of the military. Later, the

Government of Punjab sent a representative to the United States and offered Beg an

alternative parcel of land. Beg alleges that the exchange was accepted by the Lahore

High Court but rejected by the Supreme Court of Pakistan. The latter court

determined the Government of Punjab did not have good title to the second property

and refused to recognize Beg’s title but invited him to pursue further legal remedies

in regard to the original parcel. Beg claims to have abandoned any further litigation
3

in Pakistan, and, instead, has decided to seek monetary compensation in United States

federal court. 

The district court dismissed on the ground that the court lacked subject matter

jurisdiction under the Foreign Sovereign Immunities Act, 28 U.S.C. § 1602, et seq.

The district court found that the suit did not fall under the statute’s exception to

foreign government immunity for commercial activity, 28 U.S.C. § 1605(a)(2),

because Pakistan had not engaged in any commercial activity and because the actions

at issue did not result in a direct effect in the United States. Beg, now proceeding pro

se, appeals.

II. Standard of Review

We review issues of jurisdiction de novo. See Fogade v. ENB Revocable Trust,

263 F.3d 1274, 1285 (11th Cir. 2001).

III. Discussion

Federal courts have jurisdiction to hear claims against foreign governments

only if authorized by the Foreign Sovereign Immunities Act (“FSIA”). See Republic

of Argentina v. Weltover, 504 U.S. 607, 611 (1992) (stating that “[t]he FSIA thus

provides the ‘sole basis’ for obtaining jurisdiction over a foreign sovereign in the
4

United States.”) (citation omitted). The FSIA roughly codifies the “restrictive theory”

of sovereign immunity, which grants foreign governments immunity for their public

acts but not their private, commercial acts. See Verlinden B.V. v. Cent. Bank of

Nigeria, 461 U.S. 480, 486-89 (1983). The FSIA is structured as a general grant of

immunity for foreign governments and their agents, 28 U.S.C. § 1604, unless the

foreign government activity is subject to a specific exception. See Verlinden, 461

U.S. at 488. 

The most prominent exception, and the one at issue here, is the “commercial

activities exception,” 28 U.S.C. § 1605(a)(2). The exception provides: 

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

of the United States or of the States in any case–

(2) in which the action is based upon a commercial activity carried on

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

United States in connection with a commercial activity of the foreign

state elsewhere; or upon an act outside the territory of the United States

in connection with a commercial activity of the foreign state elsewhere

and that act causes a direct effect in the United States;

(emphasis added). On appeal, Beg relies exclusively on this exception’s third clause,

which requires that an act (1) takes place outside of the United States, (2) is
5

connected with a commercial activity, and (3) causes a direct effect in the United

States.

Beg argues that the expropriation falls within this exception because (1) it took

place in Pakistan, (2) the regional government did not have good title to the alternate

property that was offered to him, and (3) he has suffered a financial loss that has a

direct effect within the United States.

The key issue we address is whether the Pakistani government was engaged in

commercial activity. The touchstone for determining if a foreign government’s act

is commercial is whether the nature of the act is public or private. See Weltover, 504

U.S. at 614-16. The Supreme Court defined commercial acts as those in which the

state engages in transactions as a private party would. See id. Public acts, however,

require sovereign power and thus cannot be performed by a private party. See id.

The Court emphasized that public acts must make use of the state’s sovereign

authority:

[W]e conclude 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 meaningof the FSIA ....

[T]he issue is whether the particular actions that the foreign state

performs (whatever the motive behind them) are the type of actions by

which a private party engages in "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
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private companies can similarly use sales contracts to acquire goods. 

Id. at 614 (citations omitted). 

A government’s act is thus commercial if it is the type of transaction that

private actors could complete. For instance, in Weltover, the Court determined that

Argentina’s issuance of bonds to finance a currency-exchange program was a

commercial activity because private corporations could raise capital through the

issuance of debt instruments in the same manner. Id. at 616. Similarly, this court

determined that the Government of Yemen engaged in commercial activity when it

entered into a contract to purchase grain from an American corporation because the

contract was “just a contract and . . . not based upon regulatory reasons.” S & Davis

Int’l v. Republic of Yemen, 218 F.3d 1292, 1303 (11th Cir. 2000).

By contrast, a government’s regulation of the market, use of police power, or

other activities requiring state authority are not commercial. See Saudi Arabia v.

Nelson, 507 U.S. 349, 359-63 (1993); see alsoWeltover, 504 U.S. at 614 (finding that

the regulation of foreign exchange policy would be a sovereign activity). In Nelson,

the Supreme Court found that the alleged detention and torture by Saudi police of an

American citizen, who had entered into an employment contract with a state hospital,

was not commercial activity. See 507 U.S. at 361-62. The alleged tortious activity

was pursuant to the state’s police power and was “not the sort of action by which

private parties can engage in commerce.” Id. at 362. Although the plaintiff claimed
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that the Saudi government’s actions were similar to those of a private actor because

the government had entered into an employment contract with him, the Court

determined that the basis of the claim was the tortious conduct by government agents,

not the employment contract. See id. at 361-63. Consequently, foreign government

acts, “however monstrous,” that are “peculiarly sovereign in nature” are not subject

to review by our courts under the FSIA’s commercial activities exception. Id. at 361.

Here, we conclude that the Pakistani government’s actions involve the power

of eminent domain and, therefore, are not commercial. The power of eminent domain

is a sovereign power. See United States v. Carmack, 329 U.S. 230, 236-37 (1946)

(stating that “[t]he power of eminent domain is essential to a sovereign government”).

Confiscation of real property is a public act because private actors are not allowed to

engage in “takings” in the manner that governments are. See Shakour v. Fed.

Republic of Germany, 199 F. Supp. 2d 8, 13 (E.D.N.Y. 2002) (finding that the

German Democratic Republic’s expropriation of three factories is a public, not a

commercial act); see also Haven v. Polska, 215 F.3d 727, 736 (7th Cir. 2000)

(determining that the commercial activity exception did not apply to expropriation of

real property in Poland because it was not based upon any commercial activity within

the United States); but see Siderman de Blake v. Republic of Argentina, 965 F.2d

699, 708-11 (9th Cir. 1992) (finding that the Argentinian government’s expropriation
1

 Our divergence with the Ninth Circuit is very narrow. We disagree only with that court’s

determination that an expropriation “may” fall within the FSIA’s third clause, which addresses

foreign government activity outside of the United States. See Siderman de Blake, 965 F.2d at 708.

In Siderman deBlake, the plaintiffs alleged that the Argentinian government had expropriated a hotel

from the Siderman family and tortured Jose Siderman, an Argentinian national, because the family

was Jewish. Id. at 703. The Argentinian government continued to operate the property, generated

revenue from American tourists, and advertised the hotel in the United States. The Ninth Circuit

found that this commercial activity was sufficient to bring the Sidermans’ claim under the first and

second clauses of the FSIA’s exception for commercial acts or acts “related to commercial activity”

that take place within the United States. Id. at 708-09. The first and second clauses are not relevant

here and, therefore, we have no issue with this analysis.

Our disagreement is with the Ninth Circuit’s holding that the activity “may also fall within

the third [clause].” Id. at 708. That court determined that the expropriation was commercial activity

of the foreign state outside of the United States because the Argentinian government continued to

operate the hotel for profit. Id. The Ninth Circuit focused on what the government did with

property after the expropriation, not whether the government was acting like a private person in the

marketplace at the time of the expropriation. Id. at 708-10. 

We decline to examine the government’s motives in determiningwhatis commercial activity.

In Weltover, decided less than a month after Siderman de Blake, the Supreme Court stated that the

nature of the act, not the purpose or motive, is dispositive in classifying a government act as

commercial. 504 U.S. at 614-15. Specifically, the Court explained that “the question is not whether

the foreign government is acting with a profit motive or instead with the aim of fulfilling uniquely

sovereign objectives. Rather, the issue is whether the particular actions that the foreign state

performs (whatever the motive behind them) are the type of actions by which a private party engages

in ‘trade and traffic or commerce.’” Id. at 614. Here the government actions were not those of

private party engaged in commerce. Applying Weltover, we conclude that the government’s actions

were not commercial and, therefore, are immune from suit in this nation’s courts.

2The district court relied primarily on Garb v. Republic of Poland, 207 F. Supp. 2d 16

(E.D.N.Y. 2002), for the proposition that government expropriation of property, even if subsequently

resold commercially, was not commercial activity subject to federal court review under the FSIA.

The Second Circuit, in an unpublished opinion, has since vacated and remanded Garb to reconsider

whether the FSIA applies retroactively to World War II takings. See Garb v. Republic of Poland,

2003 WL 21890843, *2 (2d Cir. 2003). Retroactive application of the FSIA is not an issue here.

Beg bases his commercial activity claim on the expropriation of the replacement property to which

he only claims title since December 1990. The FSIA came into effect in January 1977 and would

8

of a hotel was commercial when the government generated revenue from American

tourists and paid for advertising in the United States).1 Consequently, the Pakistani

government’s actions do not fall under the commercial exception to the FSIA.2
govern this event. See Jackson v. People’s Republic of China, 794 F.2d 1490, 1499 (11th Cir. 1986)

(finding that the FSIA’s exceptions to foreign sovereign immunity apply after 1977 but should not

be applied retroactively to pre-1952 events).

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Determining whether or how to compensate property owners for takings is also

a sovereign function, not a market transaction. See Carmack, 329 U.S. at 236-37.

The Supreme Court specifically noted that expropriation does not take place in a freemarket setting:

The power of eminent domain is essential to a sovereign government.

If the United States has determined its need for certain land for a public

use that is within its federal sovereign powers, it must have the right to

appropriate that land. Otherwise, the owner of the land, by refusing to

sell it or by consenting to do so only at an unreasonably high price, is

enabled to subordinate the constitutional powers of Congress to his

personal will. The Fifth Amendment, in turn, provides him with

important protection against abuse of the power of eminent domain by

the Federal Government.

Id. Although the Pakistani government allegedly failed to provide Beg with the

alternative property, the nature of the foreign government’s act is public and not

commercial.

Beg contends that the Punjabi regional government’s agreement to compensate

him is the equivalent of a contract and, therefore, is commercial activity. This

analogy is not persuasive. First, as the Supreme Court made clear in Weltover, the

dispositive issue in determining whether an activity is commercial is whether private

actors could undertake this type of activity in a market. See Weltover, 504 U.S. at
3

 The FSIA has a distinct jurisdictional exception for some types of expropriation performed

in violation of international law. See 28 U.S.C. § 1605(a)(3). It grants subject matter jurisdiction

over suits 

in which rights in property taken in violation of international law are in issue and that

property or any property exchanged for such property is present in the United States

in connection with a commercial activity carried on in the United States by the

foreign state; or that property or any property exchanged for such property is owned

or operated by an agency or instrumentality of the foreign state and that agency or

instrumentality is engaged in a commercial activity in the United States.

Id. International law prohibits expropriation of alien property without compensation, but does not

prohibit governments from expropriating property from their own nationals without compensation.

See Fogade v. ENB Revocable Trust, 263 F.3d 1274, 1294 (11th Cir. 2001) (“[W]hen a foreign

nation confiscates the property of its own nationals, it does not implicate principles of international

law.”). The district court found that Beg was born in Pakistan, although Beg has since become a

naturalized American citizen.

In an earlier action, Beg asserted jurisdiction under this exception. That suit was dismissed

by the district court. Beg did not appeal that dismissal, so we do not discuss that claim, including

when Beg became an American citizen.

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614. Expropriation is neither the type of activity in which private actors engage nor

is it a market transaction. See Carmack, 329 U.S. at 236-37. Second, the FSIA has

a separate exception for certain foreign government expropriations, further indicating

that a foreign government’s use of its eminent domain power is not commercial

activity.3

Because we conclude that the defendants did not engage in commercial

activity, this suit does not fall under the § 1605(a)(2) exception to foreign government

immunity. The federal courts thus lack subject matter jurisdiction under the FSIA.

Accordingly, we affirm the dismissal by the district court.

AFFIRMED.