United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued September 23, 2021 Decided February 4, 2022

No. 19-7162

WYE OAK TECHNOLOGY, INC.,

APPELLEE

v.

REPUBLIC OF IRAQ AND MINISTRY OF DEFENSE OF THE 

REPUBLIC OF IRAQ,

APPELLANTS

Consolidated with 19-7169

Appeals from the United States District Court

for the District of Columbia

(No. 1:10-cv-01182)

Boaz S. Morag argued the cause for appellants/cross 

appellees. With him on the briefs were Andrew A. Bernstein 

and Timothy B. Mills.

Neal Kumar Katyal argued the cause for appellee/crossappellant. With him on the briefs were C. Allen Foster, Eric 

C. Rowe, John H. Quinn, Jr., Patrick M. Klemz, Mitchell P. 

Reich, Reedy C. Swanson, and Sundeep Iyer.
2

Before: HENDERSON and JACKSON, Circuit Judges, and 

SENTELLE, Senior Circuit Judge.

Opinion for the Court filed by Circuit Judge JACKSON.

JACKSON, Circuit Judge: This appeal arises from a fully 

litigated contract dispute between an American defense 

contractor and a foreign government that resulted in a 

multimillion-dollar plaintiff’s judgment. Wye Oak 

Technology, Inc. first filed its complaint against the Republic

of Iraq in the U.S. District Court for the Eastern District of 

Virginia (“EDVA”). Finding improper venue, that court

transferred the case to the U.S. District Court for the District of 

Columbia (“DDC”), but not before flatly denying Iraq’s motion 

to dismiss the complaint on sovereign immunity grounds. And 

when the DDC eventually entered judgment in Wye Oak’s 

favor nearly a decade later, after an eight-day bench trial, it did

so partly in reliance on an intervening ruling from the Fourth 

Circuit, which rejected Iraq’s contention that none of the 

exceptions to sovereign immunity in the Foreign Sovereign 

Immunities Act (“FSIA”), 28 U.S.C. § 1602 et seq., applied to 

Wye Oak’s breach of contract claims. 

To be specific, the Fourth Circuit held that because Wye 

Oak alleged that it had engaged in various acts inside the 

United States pursuant to the parties’ agreement, the lawsuit 

could proceed under the second clause of the FSIA’s 

commercial activities exception. See 28 U.S.C. § 1605(a)(2) 

(abrogating foreign sovereign immunity with respect to claims 

that are “based upon . . . an act performed in the United States 

in connection with commercial activity of the foreign state 

elsewhere”). Thus, we are now called upon to decide whether

we agree with our sister circuit’s FSIA interpretation (as

applied in the context of the post-trial judgment in Wye Oak’s 
3

favor that the DDC has entered against Iraq). We must also

determine, incidentally, whether the law of the case doctrine 

somehow constrains our own assessment of Iraq’s alleged 

immunity at this stage of the case. 

In the opinion that follows, we first reject Wye Oak’s 

argument that Iraq’s participation in the DDC bench trial 

implicitly waived its sovereign immunity for the purpose of the 

FSIA’s waiver exception. We then explain that the law of the 

case doctrine does not require us to adhere to the Fourth 

Circuit’s conclusions about the applicability of the FSIA’s 

commercial activities exception, and, indeed, unlike the Fourth 

Circuit, we conclude that the second clause of 28 U.S.C. 

§ 1605(a)(2) does not apply to the established facts of this case. 

But we do discern a plausible basis for sustaining the district 

court’s jurisdictional ruling in the language of the commercial 

activity exception’s third clause. See 28 U.S.C. § 1605(a)(2)

(abrogating immunity if the action is “based 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”). And we find that 

the district court is best positioned to evaluate (or develop) the 

record as necessary to determine, in the first instance, whether 

the facts support application of that provision of the FSIA. 

Therefore, the district court’s post-trial judgment is 

vacated to the extent that it is premised on a finding of subjectmatter jurisdiction that rests on an erroneous interpretation of 

the second clause of the commercial activities exception, and 

this matter is remanded to the district court for a determination 

of whether Iraq’s breach of contract caused “direct effects” in 

the United States for the purpose of the third clause of 28 

U.S.C. § 1605(a)(2).
4

I

The FSIA, 28 U.S.C. § 1602, et seq., affords the “sole 

basis for obtaining jurisdiction over a foreign state” in United 

States courts. Argentine Republic v. Amerada Hess Shipping 

Corp., 488 U.S. 428, 434 (1989); see also Samantar v. Yousuf, 

560 U.S. 305, 314 (2010). That statute “bars federal and state 

courts from exercising jurisdiction when a foreign state is 

entitled to immunity, and . . . confers jurisdiction on district 

courts to hear suits . . . when a foreign state is not entitled to 

immunity.” Diag Hum., S.E., v. Czech Republic-Ministry of 

Health, 824 F.3d 131, 134 (D.C. Cir. 2016). 

The FSIA establishes the general rule for granting foreign 

sovereign immunity, 28 U.S.C. § 1604, and it also makes that 

grant of immunity subject to nine exceptions, see id. §§ 1605–

1607; Mohammadi v. Islamic Republic of Iran, 782 F.3d 9, 13–

14 (D.C. Cir. 2015). The FSIA exceptions are exhaustive; if 

none applies to the circumstances presented in a case, the 

foreign state has immunity and the court lacks subject-matter 

jurisdiction. Odhiambo v. Republic of Kenya, 764 F.3d 31, 34 

(D.C. Cir. 2014).

The two FSIA exceptions that are relevant to this appeal—

waiver and commercial activity—appear at 28 U.S.C. 

§ 1605(a)(1) and (2). In its entirety, that section of the statute

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—

(1) in which the foreign state has waived its 

immunity either explicitly or by implication, 

notwithstanding any withdrawal of the waiver 

which the foreign state may purport to effect 
5

except in accordance with the terms of the 

waiver;

(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.

Section 1605(a)(1) recognizes two species of waiver. 

Where “explicit[]” waiver occurs, the foreign state expressly 

consents to forgo its sovereign immunity with respect to a 

certain class of disputes or a particular subject matter. See

World Wide Mins., Ltd. v. Republic of Kazakhstan, 296 F.3d 

1154, 1162 (D.C. Cir. 2002). Generally speaking, because 

explicit waivers of sovereign immunity are narrowly construed 

“in favor of the sovereign” and are not enlarged “beyond what 

the language requires[,]” id. (quoting Library of Cong. v. Shaw, 

478 U.S. 310, 318 (1986)), a foreign state “will not be found to 

have [explicitly] waived its immunity unless it has clearly and 

unambiguously done so[,]” id.

The waiver provision that is most relevant here is the

FSIA’s reference to “implicit[]” waivers of sovereign 

immunity, which the statute “does not define.” Creighton Ltd. 

v. Gov’t of the State of Qatar, 181 F.3d 118, 122 (D.C. Cir.

1999). However, this circuit has “followed the ‘virtually 

unanimous’ precedents construing the implied waiver 

provision narrowly.” Id. (internal citations omitted). Thus, we

have long held that “implicit in § 1605(a)(1) is the requirement 
6

that the foreign state have intended to waive its sovereign 

immunity.” Id. (emphasis added). The legislative history of 

the FSIA provides only three examples of implicit waivers by 

a foreign state, H.R. Rep. No. 94-1487, at 18 (1976), and courts 

have been reluctant to recognize an implicit waiver of 

sovereign immunity in other circumstances. See ForemostMcKesson, Inc. v. Islamic Republic of Iran, 905 F.2d 438, 444 

(D.C. Cir. 1990) (explaining that an implied waiver occurs if 

the foreign state agrees to arbitration, agrees that the law of a 

particular country governs a contract, or has filed a responsive 

pleading without raising the defense of sovereign immunity).

Under Section 1605(a)(2), a foreign state’s sovereign 

immunity is subject to abrogation based on the state’s

commercial activities. This statutory exception codifies the 

“restrictive theory” of sovereign immunity that the United 

States Department of State first endorsed in 1952, Republic of 

Argentina v. Weltover, Inc., 504 U.S. 607, 612 (1992), pursuant 

to which foreign states were not afforded immunity in cases 

“arising out of purely commercial transactions[,]” id. at 613 

(quoting Alfred Dunhill of London, Inc. v. Republic of 

Cuba, 425 U.S. 682, 703 (1976)). The Supreme Court had long 

held that when “a foreign government acts, not as regulator of 

a market, but in the manner of a private player within it,” id. at 

614, its private acts might be sufficient to justify the invocation 

of the jurisdiction of American courts, see id. (distinguishing 

acts of the state as a market participant from undertakings 

aimed at “fulfilling its uniquely sovereign objectives”); see 

also Permanent Mission of India to the United Nations v. City 

of New York, 551 U.S. 193, 199 (2007). Thus, the FSIA’s 

commercial activities exception carves out, and exempts from 

sovereign immunity, a sphere of private commercial action that

foreign states sometimes undertake. 
7

Notably, as Congress has worded it, the commercial 

activities exception is also designed to ensure that there is a

sufficient connection between the foreign state’s commercial 

activity and the United States to warrant the exercise of 

jurisdiction. See Jam v. Int’l Fin. Corp., 139 S. Ct. 759, 766 

(2019). Thus, the first clause of section 1605(a)(2) requires a 

plaintiff’s claim to be “based upon” an aspect of the foreign 

state’s commercial activity that has a “substantial contact with 

the United States.” Odhiambo, 764 F.3d at 36; see also Zedan 

v. Kingdom of Saudi Arabia, 849 F.2d 1511, 1513 (D.C. Cir.

1988) (clarifying that the degree of contact required must be

more than isolated or transitory, and a plaintiff’s mere 

citizenship status or place of residence will not suffice). The 

second clause of the commercial activities exception permits a 

suit against a foreign state when the plaintiff’s claim is based 

“upon an act performed in the United States[,]” and that act is 

taken “in connection with a commercial activity of the foreign 

state elsewhere.” 28 U.S.C. § 1605(a)(2). And the third clause 

of the exception permits a suit against a foreign state if the 

claim is based upon an act outside the United States that is 

related to the foreign state’s commercial activity if that act 

“causes a direct effect in the United States.” Id.

II

A

After the fall of Saddam Hussein at the conclusion of the 

United States-led military action in Iraq, the newly constituted 

transitional government of Iraq sought to rebuild that country’s 

armed forces. To this end and at the recommendation of the 

United States government, the Iraqi Ministry of Defense 

(“MoD”) engaged the services of Wye Oak, a private defense 

contractor headquartered in Pennsylvania that specializes in 

foreign military equipment. As part of this engagement, Wye 
8

Oak committed to inventorying and assessing Iraq’s existing 

military equipment; refurbishing any such equipment to the 

extent possible; and arranging for scrap sales of any equipment 

that was not salvageable.

MoD and Wye Oak entered into a written Broker Services 

Agreement (“BSA”) in August of 2004. Under the express

terms of the BSA, Wye Oak was to serve as the sole and 

exclusive broker for these equipment recovery and 

refurbishment services for a one-year period. As 

compensation for this work, Wye Oak was to receive a 10% 

commission for scrap sales and 10% of the profit for any 

refurbishing services. 

To receive its compensation, Wye Oak was required to 

provide the MoD with pro forma invoices detailing the work 

that had been done. The BSA specifically provided that “[a]ll 

payments to be made to [Wye Oak] under this Agreement shall 

be made in United States Dollars in the form and manner as 

directed by [Wye Oak].” Joint App’x 775.

Wye Oak began performing under the BSA in August of

2004. Wye Oak’s CEO, Dale Stoffel, and other Wye Oak staff 

who were present in Iraq immediately began identifying, 

assessing, and refurbishing military equipment on the ground 

in that country. Meanwhile, David Stoffel—Dale’s brother and

the head of Wye Oak’s information technology department, 

which was located in the United States—began to oversee all 

I.T. services for Wye Oak. These services included purchasing 

computer equipment and software and reviewing all email

communications that came through the server that housed Wye 

Oak’s data. 

In October of 2004, Wye Oak submitted three pro forma 

invoices to the MoD, totaling $24,714,697.15. Each invoice 

specifically instructed the MoD to remit its payment to Wye 
9

Oak “at the Baghdad Iraq office of [the MoD].” Joint App’x 

781–83. There is no dispute that the MoD never paid these 

invoices.

Nor is it disputed that Wye Oak made many concerted

efforts to collect the fee. For example, in the two months 

between Wye Oak’s October submission of the invoices and 

December 8, 2004—when Dale Stoffel was tragically slain in 

Baghdad on his way to organize the release of funding—Wye 

Oak representatives met with American and Iraqi officials at 

least twice to discuss the project’s progress and to address the 

still-outstanding invoices. As relevant here, these in-person 

meetings took place at MoD’s headquarters in Baghdad. Wye 

Oak reported on the status of the project and also expressed its 

concerns about Iraq’s failure to pay the invoices, including the 

specific worry that the lack of funding could interfere with Wye

Oak’s ability to execute subcontracts, such as an anticipated

construction services agreement with Wye Oak’s sister 

company, CLI Corporation, an American construction firm 

headquartered in Pennsylvania. During the meetings, Wye Oak 

managed to secure additional payment promises from Iraq. 

Wye Oak also undertook various diplomatic efforts to 

secure the overdue funding. Its representatives reached out to 

American government officials (such as then-Secretary of 

Defense Donald Rumsfeld) to discuss the non-payment

dilemma. And Wye Oak contacted General Investment Group, 

s.a.l. (“GIG”), a Lebanese company run by financier Raymond 

Zayna, which had entered into separate funding agreements 

with Wye Oak and Iraq related to the military equipmentrecovery project. GIG had agreed to provide some financing 

for the project, and in its post-invoice conversations with GIG, 

Wye Oak stressed the necessity of payment of the invoices, and 

implored GIG to authorize that such payments be made to Wye 

Oak’s bank account in Pennsylvania. 
10

Despite these overtures, Wye Oak’s invoices remained 

overdue when Dale Stoffel died on December 8, 2004. In the 

wake of that tragedy, the company withdrew all of its U.S. 

personnel from Iraq. It subsequently relied on local contractors 

with respect to its performance under the BSA, which included

coordinating the production of operational armored vehicles

for Iraq’s January 2005 parliamentary election. Wye Oak 

ceased all operations in Iraq shortly after the January 2005 

election, due to the lack of funding. 

B

1

Wye Oak filed a complaint against Iraq in the EDVA on 

July 20, 2009, claiming that Iraq breached the BSA by refusing 

to pay the generated invoices. Wye Oak Tech., Inc. v. Republic 

of Iraq, No. 09CV793, 2010 WL 2613323, at *1 (E.D. Va. June 

29, 2010). Iraq responded with a motion to dismiss Wye Oak’s

complaint, contending primarily that, as a sovereign nation, it

is entirely immune from suit under the FSIA. See Joint App’x 

72 (“As a matter of law . . . the [c]ourt lacks subject matter 

jurisdiction because no exception to Defendant’s sovereign 

immunity applies under the Foreign Sovereign Immunities 

Act.”).

On June 29, 2010, the EDVA issued a lengthy opinion that, 

among other things, examined each of the three clauses of the 

FSIA’s commercial activities exception to assess Iraq’s 

sovereign immunity contention. The court evaluated “the 

factual allegations of the complaint and referenced writings”

with respect to each clause, Wye Oak Tech., 2010 WL 2613323

at *7, and concluded, for each, that “Wye Oak has sufficiently 

established at this stage that this exception to the FSIA’s 

sovereign immunity applies” such that “the [c]ourt may 

exercise subject matter jurisdiction over Iraq in this case[,]” id.
11

at *8. The EDVA further held that venue was not proper

because a “substantial part of the events or omissions giving 

rise to Wye Oak’s claim” did not occur in the Eastern District 

of Virginia. Id. at *11 (finding as much based on Wye Oak’s

allegations). Therefore, in addition to ruling on Iraq’s motion 

to dismiss, that court also transferred the case “forthwith” to 

the federal district court in the District of Columbia. Id. 

Iraq could not appeal the part of the EDVA’s order that 

affected the transfer. Ukiah Adventist Hosp. v. F.T.C., 981 F.2d 

543, 546 (D.C. Cir. 1992). But it did appeal that court’s 

concomitant rejection of its sovereign immunity argument. See 

Wye Oak Tech., Inc. v. Republic of Iraq, 666 F.3d 205, 206 (4th 

Cir. 2011). 

On appeal, the Fourth Circuit began its consideration of 

Iraq’s sovereign immunity argument with a discussion of the 

threshold question of whether it even had jurisdiction to 

entertain an appeal from the transferred case. Id. at 210. The 

panel majority acknowledged that it was not appropriate for the 

EDVA to have ruled on the merits of Iraq’s motion to dismiss 

once it had determined that venue was improper. Id. at 209. 

However, over a vigorous dissent, the majority held that 

appellate jurisdiction could be invoked nonetheless, because

the EDVA’s sovereign immunity holding was an “immediately 

appealable” order, and that particular decision was thus

“effectively severed from the balance of the case,” in 

accordance with circuit authority. Id. at 209–10 (quoting 

Technosteel, LLC v. Beers Constr. Co., 271 F.3d 151, 159–60 

(4th Cir. 2001)).

With respect to the merits of the sovereign immunity

question, the majority affirmed the EDVA’s ruling based on

the complaint’s allegations of fact. The panel concluded that 

Iraq was engaged in commercial activity under the contract 
12

with Wye Oak. Id. at 216–17. And it homed in on various acts 

that Wye Oak had allegedly undertaken inside the United 

States in connection with the BSA, including its alleged 

creation of computer programming software, contacts with

agents of foreign nations, and provision of accounting services. 

Id. at 216. According to the panel majority, if true, these

domestic acts meant that “Wye Oak made a sufficient showing 

that its breach of contract claim [was] based upon an act 

performed in the United States in connection with a 

commercial activity of the foreign state elsewhere” under the

second clause of the FSIA. Id. Therefore, the panel held that

section 1605(a)(2) of the FSIA authorized Wye Oak to litigate 

its claims against Iraq in federal court. Id. at 217.

The dissenting judge rejected the conclusion that appellate 

review was available in this circumstance based on the circuit’s 

precedents. Id. at 218 (Shedd, J., dissenting). And he further 

maintained that the panel should forgo ruling on the sovereign 

immunity issue once the transfer had occurred, because, in his 

view, if the D.C. Circuit disagreed with the Fourth Circuit’s 

immunity holding it “would create a circuit split in the same

case[,]” which the law of the case doctrine could not fix. Id. 

219 (describing the “tenuous situation” that would arise “if the 

courts in the District of Columbia were to find that subject 

matter jurisdiction does not exist”).

2

Meanwhile, after the transferred case arrived in the DDC, 

on December 17, 2010, the court stayed its proceedings at the 

parties’ request, in light of the pending Fourth Circuit appeal. 

The DDC lifted its stay approximately 18 months later, once 

the Fourth Circuit had ruled. The parties then engaged in pretrial proceedings until August of 2019, when an eight-day 

bench trial commenced. 
13

At the conclusion of the bench trial, the trial judge ordered 

the parties to submit Proposed Findings of Fact and 

Conclusions of Law; notably, the briefing that ensued was the 

first time that either party asked the DDC to address the 

sovereign immunity issue. Wye Oak filed the first brief, and it

suggested therein that the district court should hold expressly 

that Iraq did not have sovereign immunity under the second or 

third clauses of the commercial activity exception. Iraq’s 

proposed findings and conclusions eschewed any analysis of 

these purported statutory bases for abrogating its sovereign 

immunity. Instead, Iraq’s brief merely maintained that 

“[p]laintiff bears the burden of proving at trial the existence of 

sufficient facts to establish that the Court possesse[d] [subjectmatter] jurisdiction” and the court “shall determine its 

jurisdiction accordingly.” Joint App’x 505.

On August 27, 2019, the DDC issued findings of fact and 

conclusions of law in support of its post-trial judgment. See 

Wye Oak Tech., Inc. v. Republic of Iraq, No. 10-CV-01182, 

2019 WL 4044046 (D.D.C. Aug. 27, 2019). The district court

specifically held that it had subject-matter jurisdiction “under 

clause two of the [FSIA’s] commercial activity exception[,]” 

id. at *22, acknowledging first that the Fourth Circuit had held 

as much, and reasoning that the Fourth Circuit’s opinion was 

“law of the case[,]” id. at *23. The district court further found 

that “the Fourth Circuit’s immunity determination was 

substantively correct[,]” id., because the evidence at trial

established that Wye Oak had, in fact, engaged in various acts 

in the United States in connection with the BSA, such as 

managing the company’s “electronic communications[,]” and 

“writing a computer program that could ultimately be used to 

inventory and track all the equipment Wye Oak was 

refurbishing[,]” id. at *24. Based on these acts, the DDC 

concluded that “Wye Oak’s [breach of contract] action” was 

based upon “an act performed in the United States in 
14

connection with a commercial activity of the foreign state 

elsewhere” within the meaning of clause two of the commercial 

activities exception. Id.

The district court further concluded that the evidence 

presented at trial established that Iraq had materially breached 

the BSA. Id. at *27. As a remedy, the court awarded Wye Oak 

approximately $88.9 million in compensation, including 

approximately $20.5 million for damages actually incurred

plus $68.4 million for lost profits and prejudgment interest. Id.

at *54. The district court also specifically rejected Wye Oak’s 

argument that it was entitled to “complementary damages”

under Iraqi law, because, in the court’s view, complementary 

damages were similar to punitive damages, which the FSIA

forecloses. Id. at 52. 

C

Iraq and Wye Oak now cross-appeal from the district 

court’s post-trial judgment. As relevant here, Iraq argues that 

the district court erred in concluding that the second clause of 

the commercial activities exception applies, and that it was 

therefore entitled to invoke immunity under the FSIA. 

Appellants’ Br. 18, 24. Wye Oak insists that the district court 

properly exercised jurisdiction over its claims under the FSIA 

for several independent reasons. It argues that Iraq “waived 

any immunity defense under 28 U.S.C. § 1605(a)(1) by failing 

to preserve or press that defense at trial.” Appellee’s Br. 15. It

also contends that the Fourth Circuit’s jurisdictional ruling “is 

law of the case,” id. at 20, and that, regardless, its claims satisfy

both the second and third clauses of the FSIA’s commercial 

activities exception, id. at 25, 30.

This cross-appeal relates additionally to both parties’

objections to various aspects of the district court’s damages 

calculation. See, e.g., Appellants’ Br. 16–17 (arguing that the 
15

district court erred by awarding Wye Oak certain damages, 

including costs Wye Oak did not incur, speculative lost profits, 

and prejudgment interest on the lost profit award); Appellee’s

Br. 17 (challenging the district court’s conclusions concerning 

prejudgment interest and complementary damages). Because 

we conclude that the district court’s jurisdictional holding must 

be reconsidered, we decline to address the parties’ damages 

arguments. 

III

The relative burdens of the parties with respect to 

establishing the applicability (or not) of an exception to 

sovereign immunity under the FSIA are well established, as is 

the applicable standard of review. “[T]he FSIA begins with a 

presumption of immunity, which the plaintiff bears the initial 

burden to overcome by producing evidence that an exception 

applies, . . . and once shown, the sovereign bears the ultimate 

burden of persuasion to show the exception does not apply[.]” 

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

F.3d 1175, 1183 (D.C. Cir. 2013); see also Helmerich & Payne 

Int’l Drilling Co. v. Bolivarian Republic of Venezuela, 743 F. 

App’x 442, 449 (D.C. Cir. 2018). And when a district court

considers the sovereign immunity question and rules that it has 

subject-matter jurisdiction over a legal claim brought in federal 

court against a foreign sovereign, that denial of immunity is 

reviewed de novo. See Odhiambo, 764 F.3d at 35. 

IV

For the reasons explained below, we cannot accept the 

contentions that Iraq has implicitly waived its sovereign 

immunity or that the law of the case doctrine requires us to 

accept the Fourth Circuit’s conclusions about the applicability 

of the second clause of the FSIA’s commercial activities 

exception. And because we find that the second clause is only 
16

applicable when the act inside the United States upon which 

the plaintiff’s claim is based is an act of the foreign sovereign, 

we conclude that the district court’s invocation of subjectmatter jurisdiction over Wye Oak’s claims against Iraq must be 

sustained, if at all, on the basis of another FSIA provision.

A

It is important to note, at the outset, that Wye Oak’s 

argument that Iraq implicitly waived its immunity defense for 

the purpose of FSIA section 1605(a)(1)—the first immunityrelated contention that Wye Oak makes on appeal—appears 

nowhere in the post-trial briefs that Wye Oak filed in the 

district court, and the trial judge did not address it. That 

omission alone raises the specter of forfeiture. NetworkIP, 

LLC v. F.C.C., 548 F.3d 116, 120 (D.C. Cir. 2008) (explaining 

that arguments in favor of subject-matter jurisdiction can be 

forfeited by inattention or deliberate choice).

But even if we consider the merits of Wye Oak’s implicit 

waiver assertion, Wye Oak does not explain how that 

argument—which is based upon Iraq’s decision to participate

in the DDC’s bench trial and its failure to engage on the 

immunity issue in its trial briefs —squares with this court’s 

holdings on the subject. Wye Oak cites Phoenix Consulting, 

Inc v. Republic of Angola, 216 F.3d 36 (D.C. Cir. 2000), which 

does admit the possibility that a foreign state’s “failure to assert 

the immunity after consciously deciding to participate in the 

litigation may constitute an implied waiver of immunity,” id. 

at 39. But, here, Iraq did “assert its immunity under the FSIA 

. . . in its responsive pleading.” Id. Moreover, and importantly, 

we have never varied from the basic principle that “[a]n 

implied waiver depends upon the foreign government’s having 

at some time indicated its amenability to suit.” Princz v. 

Federal Republic of Germany, 26 F.3d 1166, 1174 (D.C. Cir. 
17

1994) (emphasis added); accord Creighton, Ltd., 181 F.3d at 

122. 

Far from demonstrating that it intended to waive sovereign 

immunity, Iraq squarely raised an immunity defense in a 

motion to dismiss that it timely filed at the first opportunity 

after Wye Oak filed the complaint, and it then vigorously 

litigated the EDVA’s denial of that motion, including pursuing 

a separate appeal of that court’s no-immunity ruling. To be 

sure, having lost that appeal, Iraq knowingly proceeded to

litigate the claims against it, and ultimately responded to Wye 

Oak’s post-trial jurisdictional arguments with a tepid statement 

about the court’s needing to make its own decision about

subject-matter and personal jurisdiction. But nothing in the 

record establishes that Iraq ever disclaimed or withdrew its

long-preserved assertion of sovereign immunity. And, again, 

we have consistently concluded that what matters when 

discerning any type of waiver of sovereign immunity is the 

foreign sovereign’s actual intent. See Foremost-McKesson, 

905 F.2d at 444; see also Phoenix Consulting Inc., 216 F.3d at 

39 (explaining that “if the sovereign makes a conscious 

decision to take part in the litigation, then it must assert its 

immunity under the FSIA either before or in its responsive 

pleading” (internal quotation marks and citation omitted)).

Thus, we cannot conclude that Iraq’s trial participation and

post-trial argument, standing alone, “fit in th[e] selective 

company” of implied waiver cases, Khochinsky v. Republic of 

Poland, 1 F.4th 1, 9 (D.C. Cir. 2021), or otherwise indicates

Iraq’s intent to abandon the immunity that it has asserted from 

the outset of this case, such that the FSIA’s section 1605(a)(1) 

applies. 
18

B

We also disagree with both of Wye Oak’s paired assertions

that (1) the law of the case doctrine requires us to accept the 

Fourth Circuit’s holding that the second clause of the FSIA’s 

commercial activities exception applies to abrogate Iraq’s 

sovereign immunity, and, in any event, (2) the Fourth Circuit’s

analysis of the applicability of the second clause of section 

1605(a)(2) to Wye Oak’s breach of contract claims is 

substantively correct. 

1

The “[l]aw-of-the-case doctrine refers to a family of rules 

embodying the general concept that a court involved in later 

phases of a lawsuit should not re-open questions decided . . . by 

that court or a higher one in earlier phases.” Crocker v. 

Piedmont Aviation, Inc. 49 F.3d 735, 739 (D.C. Cir. 1995)

(internal quotation marks omitted). Colloquially speaking, the 

doctrine ensures that “the same issue presented a second time 

in the same case in the same court should lead to the same 

result.” Kimberlin v. Quinlan, 199 F.3d 496, 500 (D.C. Cir.

1999) (internal quotation marks and citation omitted); see also,

Musacchio v. United States, 577 U.S. 237, 244–45 (2016).

The law of the case doctrine is a principle that guides 

courts in the exercise of their discretion, not a binding rule. 

Thus, rigid adherence to rulings made at an earlier stage of a 

case is not required under all circumstances, as other circuits 

have recognized. See Murphy v. F.D.I.C., 208 F.3d 959, 966 

(11th Cir. 2000); see also Pepper v. United States, 562 U.S. 

476, 506 (2011) (explaining that the doctrine “directs a court’s 

discretion, it does not limit the tribunal’s power”). 

Furthermore, there are certain situations in which it is widely 

accepted that courts should not apply the doctrine to preclude 

reconsideration of a prior legal determination, even if the issue 
19

was previously litigated in the context of that case. See, e.g.,

Crocker, 49 F.3d at 740 (explaining that “an intervening 

change of law” will “support a departure from the previously 

established law of the case”); see also Pepper, 562 U.S. at 506–

07 (authorizing setting aside the doctrine “if the court is 

‘convinced that [the prior decision] is clearly erroneous and 

would work a manifest injustice’” (internal citations omitted)).

That said, Wye Oak’s argument that the Fourth Circuit’s 

ruling qualifies as law of the case falters at the threshold, 

because under the circumstances presented here—and, in 

particular, the distinct procedural postures in which the 

immunity issue arises—this court and the Fourth Circuit panel 

are actually addressing different questions. 

The Fourth Circuit’s de novo review of the EDVA’s ruling 

was a targeted assessment of the legal sufficiency of Wye 

Oak’s complaint for the purpose of proceeding to discovery. 

See Wye Oak Tech., Inc., 666 F.3d at 216 (concluding that Wye 

Oak presented sufficient facts to support a reasonable inference 

that its breach of contract claim is based upon an act performed 

in the United States in connection with a commercial activity 

of the foreign state elsewhere). At most, the panel held that the 

allegations in Wye Oak’s complaint could plausibly support a 

finding that the second clause of the FSIA’s commercial 

activity exception applies such that sovereign immunity did not 

preclude continued litigation of Wye Oak’s claims. Neither 

party asked the district court or this court to revisit that

determination.

Instead, the full course of litigation commenced, and when

the trial court in the DDC undertook to address whether Iraq 

was immune from judgment nearly a decade later, in order to 

assess whether it had subject-matter jurisdiction to issue a posttrial order against that foreign state, the DDC engaged in a 
20

fundamentally distinct legal analysis and had a different 

assortment of tools with which to make its determination. 

Specifically, at that stage of the proceedings, the district court

had the benefit of a full adversarial hearing of the issues and a 

developed factual record, and its task was to determine whether 

any FSIA exception had been triggered such that Iraq’s 

immunity from judgment was abrogated and a post-trial 

judgment could be issued against it, in light of the established 

facts of the case.

In other words, our consideration of the sovereign 

immunity question, which stems from our review of the DDC’s 

post-trial judgment, plainly transcends the Fourth Circuit’s 

threshold conclusions about the plausible boundaries of Wye 

Oak’s pleading for law of the case purposes. Cf. Sherley v. 

Sebelius, 689 F.3d 776, 782 (D.C. Cir. 2012) (explaining that 

the preliminary injunction exception to the law of the case 

arose because “[a]n appellate court in a later phase of the 

litigation with a fully developed record, full briefing and 

argument, and fully developed consideration of the issue 

[should] not bind itself to the time-pressured decision it made 

earlier on a less adequate record”). 

It is also quite significant that the core legal issue that we 

are purportedly constrained to consider based on the Fourth 

Circuit’s ruling itself pertains to the defense of immunity, and 

therefore the court’s own subject-matter jurisdiction. Applying

the law of the case doctrine to constrain a court’s post-trial 

assessment of its own jurisdiction based on an earlier 

determination of that question is inherently incompatible with 

the established ongoing duty of a court to determine its own 

jurisdiction at every stage of the legal proceedings. Cf. Steel 

Co. v. Citizens for a Better Env’t, 523 U.S. 83, 95 (1998)

(“[E]very federal appellate court has a special obligation to 

satisfy itself not only of its own jurisdiction, but also that of the 
21

lower courts in a cause under review[.]” (internal quotation 

marks and citation omitted)); see also Henderson ex rel. 

Henderson v. Shinseki, 562 U.S. 428, 434 (“[F]ederal courts 

have an independent obligation to ensure that they do not 

exceed the scope of their jurisdiction, and therefore they must 

raise and decide jurisdictional questions that the parties either 

overlook or elect not to press.”). Applying the law of the case 

doctrine to constrain subsequent jurisdictional analyses is also 

in tension with the federal rules that make clear that alleged

jurisdictional defects are not waivable, see Fed. R. Civ. P. 

12(h)(1), and can be raised “at any time[,]” Fed. R. Civ. P.

12(h)(3); see also Union Pac. R. Co. v. Bhd. of Locomotive 

Eng’rs & Trainmen Gen. Comm. of Adjustment, Cent. Region, 

558 U.S. 67, 81 (2009) (explaining that arguments against

subject-matter jurisdiction can never be forfeited or waived). 

Thus, it is hard to accept the suggestion that the law of the 

case doctrine must be rigidly applied to calcify a threshold 

determination that a court has subject-matter jurisdiction. Cf.

Bishop v. Smith, 760 F.3d 1070, 1085 (10th Cir. 2014)

(explaining that, while jurisdictional issues are not excluded 

from the law of the case doctrine, issues such as subject-matter 

jurisdiction may be particularly suitable for reconsideration, 

even where the law of the case doctrine might otherwise 

counsel against it). At the very least, there is considerable 

support for the notion that, when the issue on review is 

jurisdictional in nature, a doctrine that already incorporates a 

degree of discretion and flexibility should give way as needed 

to facilitate consideration of similar jurisdictional questions 

that may arise at subsequent (but procedurally distinct) stages

of this case. See Am. Canoe Ass’n v. Murphy Farms, Inc., 326 

F.3d 505, 515 (4th Cir. 2003) (“Law of the case, which is itself 

a malleable doctrine meant to balance the interests of 

correctness and finality, can likewise be calibrated to reflect 
22

the increased priority placed on subject matter jurisdictional

issues generally[.]” (emphasis added)).

Sherley v. Sebelius, does not hold otherwise. 689 F.3d at 

776. Wye Oak points to that opinion and argues that, where 

the relevant facts are the same at both the pleading and the trial 

stages of the proceedings, the posture of the case should not 

matter. See Tr. of Oral Arg. 27–28. But this court in Sherley

adhered to the earlier preliminary injunction ruling in that case 

primarily due to the earlier court’s fulsome consideration of the 

legal issues based upon an already fully developed factual 

record. 689 F.3d at 782. Not so here. Again, the Fourth Circuit 

made its immunity determination in the context of a motion to 

dismiss that tested the sufficiency of Wye Oak’s pleading, 

which is substantively different than accelerated consideration 

of the merits of a plaintiff’s claims under the preliminary 

injunction standard. 

In addition, as noted above, the scant and unproven factual 

allegations in Wye Oak’s complaint were no match for the trial 

record; the latter included extensive evidence that both sides 

had presented about Iraq’s commercial activity, Wye Oak’s 

various acts of performance, and Iraq’s alleged breach of the 

parties’ agreement. Thus, when it came time for the final 

analysis of whether there was subject-matter jurisdiction to 

enter a post-trial judgment against this foreign state under the 

FSIA framework, the DDC’s assessment was a far more

significant undertaking than the threshold inquiry into whether 

the complaint’s allegations provide a sufficient basis for the 

parties to proceed to litigate despite Iraq’s immunity defense. 

And the latter is all that the Fourth Circuit addressed.

Therefore, we hold that we are not here being presented 

with “the same issue” that the Fourth Circuit decided in a 
23

manner that implicates the law of the case doctrine. Kimberlin, 

199 F.3d at 500.

1

2

The district court below not only determined that law of 

the case required it to find that the second clause of the FSIA’s 

commercial activities exception was satisfied, it also found 

affirmatively that the Fourth Circuit’s immunity conclusions 

were correct, given the actions that Wye Oak took in the United 

States to perform under the BSA. Wye Oak Tech., 2019 WL 

4044046, at *23-*25. Wye Oak has reiterated that same 

substantive argument on appeal. See Appellee’s Br. 25. And 

it is one that we reject for the following reasons.

To start, we note that the district court’s factual findings 

concerning Wye Oak’s conduct are reviewed for clear error.

Massachusetts v. Microsoft Corp., 373 F.3d 1199, 1207 (D.C. 

Cir. 2004). We consider de novo the district court’s 

interpretation and application of 28 U.S.C. § 1605(a)(2).

Odhiambo, 764 F.3d at 35.

There is no error, much less clear error, with respect to the 

district court’s determination that “Wye Oak performed work 

1 In their briefs, the parties spill a considerable amount of ink 

debating whether, assuming the law of the case doctrine is 

applicable, one or more of the established exceptions to that doctrine 

applies. One such exception is where the previous decision was 

“clearly erroneous and would work a manifest injustice.” Crocker, 

49 F.3d at 740. We note here that our disagreement with the Fourth 

Circuit’s substantive determination about the applicability of the 

second prong of the FSIA’s commercial activity exception as a 

matter of law—which is detailed in Part 2 of this section—makes it 

quite likely that, even if the law of the case doctrine were applicable 

to the instant circumstances, the “clearly erroneous” exception to the 

doctrine would relieve us of the constraints that the doctrine imposes. 
24

in the United States” in connection with the BSA such as 

“writing a computer program[,]” “maintaining e-mail 

communications[,]” and performing “administrative 

activities.” Wye Oak Tech., 2019 WL 4044046, at *24.

However, that court’s legal analysis is mistaken, because the 

second clause of the FSIA—which provides that foreign states 

are not immune when the legal action is “based . . . upon an act 

performed in the United States in connection with a 

commercial activity of the foreign state elsewhere,”

§ 1605(a)(2)—requires that the act at issue be one that the 

foreign state has performed in the United States in connection 

with its commercial activity elsewhere. 

The first clue that this is the correct interpretation of the 

commercial activities exception’s second clause is the 

language and structure of that provision, taken as a whole. 

Section 1605(a)(2) is commonly considered with reference to 

its isolated clauses, but all three appear in a single subsection.

See 28 U.S.C. § 1605(a)(2). And the first and third clauses 

have long been interpreted to relate only to the conduct of the 

foreign state—i.e., it is the foreign state that has to have 

engaged in activity that took place in the United States, or that 

has to have engaged in acts elsewhere that have an effect inside

the United States. See Odhiambo, 764 F.3d at 36 (explaining 

that under clause one of the commercial activities exception, 

the plaintiff's claim must be “based upon some commercial 

activity by” the foreign state); Cruise Connections Charter 

Mgmt. 1, LP v. Att’y Gen. of Canada, 600 F.3d 661, 662 (D.C. 

Cir. 2010) (“[F]oreign governments engaging in commercial 

activities outside the United States enjoy immunity from suit in 

U.S. courts unless those activities have a direct effect in the 

United States.”); see also Atlantica Holdings v. Sovereign 

Wealth Fund Samruk-Kazyna JSC, 813 F.3d 98, 112 (2d Cir. 

2016) (explaining that the “focus” of the direct effects clause 

of the commercial activities exception is “the activity of the 
25

sovereign” and if such activity has a direct effect in the United 

States).

Consistent with the purposes of section 1605(a)(2), this 

court has previously determined that if the foreign state carries 

on commercial activity inside the United States (clause one), or 

if it engages in an act elsewhere in connection with its 

commercial activity elsewhere and that act has a direct effect 

inside the United States (clause three), there is no immunity for

legal actions based upon that foreign state’s domestic 

commercial activity or its impactful foreign act. See, e.g.,

Odhiambo, 764 F.3d at 36–38. And our careful and considered 

application of the first and third clauses to link abrogation of 

sovereign immunity to the fact and implications of the foreign 

state’s own activities renders it entirely anomalous for us to

now read clause two to dispense with immunity if just anyone

performs an act in the United States in connection with the 

foreign state’s commercial activity. 

The view that the second clause of the commercial 

activities exception is triggered only by acts of the foreign state 

is not an unusual position. Indeed, an established treatise that 

Wye Oak relies on specifically states that “the [commercial 

activities] exception’s second clause provides for jurisdiction 

where a defendant qualifying as a ‘foreign state’ under the 

statute engages in acts in the United States in connection with 

a commercial activity abroad.” Ernesto J. Sanchez, The 

Foreign Sovereign Immunities Act Deskbook 137 (2013)

(emphasis added). So, too, have this court and others routinely 

focused on whether the defendant (the foreign state) has 

performed acts inside the United States in connection with its 

commercial activity elsewhere when undertaking the secondclause commercial activities exception inquiry. See, e.g.,

Kensington Int’l Ltd. v. Itoua, 505 F.3d 147, 157 (2d Cir. 2007) 

(holding that the appellant’s claims did not fall under the 
26

second clause of the commercial activities exceptions because 

it failed to allege any acts performed by the foreign defendant 

in the United States as the basis of its complaint); Can-Am Int’l, 

LLC v. Republic of Trinidad & Tobago, 169 F. App’x 396, 406 

(5th Cir. 2006) (stating that the acts of a foreign sovereign in 

the United States in connection with foreign commercial 

activity may give rise to subject-matter jurisdiction); Gilson v. 

Republic of Ireland, 682 F.2d 1022, 1027 (D.C. Cir. 1982), 

abrogated on other grounds by Saudi Arabia v. Nelson, 507 

U.S. 349 (1993), (concluding the court had jurisdiction under 

the second clause of the commercial activities exception 

because Ireland performed an act in the United States by 

enticing Gilson to enter into a commercial contract); see also

Termorio S.A. E.S.P. v. Electrificadora Del Atlantico S.A. 

E.S.P., 421 F. Supp. 2d 87 (D.D.C. 2006), judgment aff'd, 487 

F.3d 928 (D.C. Cir. 2007) (finding no jurisdiction over a breach 

of contract claim because no element of the claim was based 

on any of the foreign defendant’s commercial activities in 

United States).

To the extent that one might think that the second clause

is ambiguous with respect to whose act counts because it lacks

a qualifier that expressly links the referenced “act” to “the 

foreign state,” the legislative history of section 1605(a)(2) 

leaves no doubt. Prior to the passage of the FSIA, the House 

Judiciary Committee produced a house report that analyzed

each proposed section of the FSIA and explained the situations 

in which a foreign state would not be immune. See H.R. Rep.

No. 94-1487, at 18–19 (1976). Significantly for present 

purposes, the Committee stated plainly that the second clause 

of the commercial activities exception “looks to conduct of the 

foreign state in the United States.” Id. at 19 (emphasis added). 

And the Senate Judiciary Committee echoed that exact same 

sentiment. See S. Rep. No. 94-1310, at 12 (1976) (stating that 

the “act performed in the United States in connection with a 
27

commercial activity of the foreign state elsewhere, looks to 

conduct of the foreign state in the United States[.]”).

For all these reasons, we disagree with the view of the 

district court (and, for that matter, the Fourth Circuit) that the 

second clause of the commercial activities exception can be

satisfied for FSIA purposes based on the various acts that the

plaintiff (Wye Oak) took inside the United States to perform 

under the BSA. Again, we have no quarrel with the district 

court’s finding that, while inside the United States, Wye Oak 

“wr[ote] a computer program that could ultimately be used to 

inventory and track all the equipment Wye Oak refurbish[ed]”

pursuant to the BSA, and that it also handled electronic 

communications about the performance of the company’s

contractual obligations “to ensure Wye Oak’s leadership was 

aware of all messages they received.” Wye Oak Tech., 2019 

WL 4044046, at *24. We only hold that, regardless, the

necessary “act performed” that implicates the second clause of 

section 1605(a)(2) is an act of the foreign sovereign; therefore, 

the district court’s application of that provision to support its 

jurisdiction based on Wye Oak’s actions cannot be sustained.

2

2 The “based upon” language that appears in section 1605(a)(2) 

relates to all three clauses of that section, and it is, incidentally, yet 

another reason why Wye Oak’s clause two argument fails. The 

Supreme Court has made clear that, to determine what an action is 

“based upon” for FSIA purposes, the court must “zero[] in on the 

core of the . . . suit” and assess whether “the particular conduct 

constitutes the gravamen of the suit.” OBB Personenverkehr AG v. 

Sachs, 577 U.S. 27, 35 (2015). And while neither the district court 

nor the Fourth Circuit discussed this responsibility, it is reasonably 

obvious that the gravamen of the Wye Oak’s breach of contract suit 

is not any act of performance that Wye Oak undertook pursuant to 

the BSA. Rather, it is Iraq’s nonperformance of its promised 

obligations, including its failure to pay for the services Wye Oak 

rendered, and that nonperformance occurred in Iraq, not in the United 
28

C

Our conclusion that the second clause of the FSIA’s 

commercial activities exception is inapplicable does not mean 

that Iraq must be found to have retained its sovereign immunity

with respect to Wye Oak’s breach of contract claims—at least 

not yet—because Wye Oak points to one other potential basis 

for concluding that the district court has subject-matter 

jurisdiction to enter its post-trial judgment. The third clause of 

the commercial activities exception abrogates a foreign state’s 

immunity if the legal action “is based . . . upon an act outside 

the territory of the United States in connection with a 

commercial activity of the foreign state elsewhere and that act 

causes a direct effect in the United States.” 28 U.S.C. 

§ 1605(a)(2). And there is no dispute that Wye Oak’s lawsuit 

relates to Iraq’s commercial activity and is based upon an act 

of Iraq that took place outside United States’ territory: its 

failure to pay the invoices. Thus, the first two requirements for 

application of clause three of the FSIA’s commercial activities 

exception are satisfied. See Ivanenko v. Yanukovich, 995 F.3d 

232, 238 (D.C. Cir. 2021).

Wye Oak now maintains that the trial record also 

established the only other requirement for finding that clause 

States. See Zedan, 849 F.2d at 1514 (explaining that the plaintiff’s 

suit was not based “upon an act performed in the United States,” but 

upon a contract entered into in Saudi Arabia, which was breached); 

Petersen Energía Inversora S.A.U. v. Argentine Republic, 895 F.3d 

194, 207 (2d Cir. 2018) (holding in a breach-of-contract case that the 

plaintiff’s “lawsuit [was] ‘based on’ Argentina’s breach of a 

commercial obligation”); Devengoechea v. Bolivarian Republic of 

Venezuela, 889 F.3d 1213, 1223 (11th Cir. 2018) (determining that 

“[t]he conduct that actually injured [plaintiff]—and therefore that 

makes up the gravamen of [his] lawsuit—is Venezuela’s failure to 

return [certain artwork] to [him]” in breach of a bailment agreement). 
29

three of the commercial activities exception applies, because 

Iraq’s nonpayment had direct effects inside the United States. 

And from what we have seen so far, given the law in this area, 

we find that Wye Oak’s clause-three argument is at least 

plausible. See Weltover, 504 U.S. at 607; see also EIG Energy 

Fund XIV, L.P. v. Petroleo Brasileiro, S.A., 894 F.3d 339, 345 

(D.C. Cir. 2018).

In particular, as examples of direct effects in the United 

States that flowed directly from the breach, Wye Oak points to 

the fact that Iraq was required to submit payment for Wye 

Oak’s services to a bank in the United States, and that Iraq’s 

nonpayment resulted in the cut-off of a flow of capital and 

personnel between the United States and Iraq. Wye Oak also 

argues that Iraq specifically targeted it (a Pennsylvania 

company) to engage in these services because Iraq knew that, 

when the bill was not paid, that loss of revenue would be felt

in the United States. More generally, Wye Oak further 

maintains that Iraq’s failure to make good on its payment 

obligations directly affected military and diplomatic operations 

in the United States. 

These factual contentions are not uncontested; indeed, Iraq 

vigorously rejects Wye Oak’s allegations in this regard. More 

importantly, however, Iraq asserts that the DDC did not make 

the “factual findings necessary for this [c]ourt to rule that any 

of Wye Oak’s claimed consequences satisfy clause three, nor 

could it have on the record presented.” Appellants’ Reply Br. 

14. And we also observe that there is no indication in the 

record that the district court specifically considered the 

disputed factual allegations about the impact of Iraq’s failure 

to pay or any other facts that allegedly support application of 

the third clause of the commercial activities exception. 

“Factfinding is the basic responsibility of district courts, 
30

rather than appellate courts,” Pullman-Standard v. Swint, 456 

U.S. 273, 291–92 (1982) (internal quotations and citation

omitted), and in this regard, we are fully cognizant of our 

limitations, see id. (“[T]he Court of Appeals should not 

. . . resolve[ ] in the first instance [a] factual dispute which had 

not been considered by the District Court.”). The district court 

is in a much better position than we are to analyze Wye Oak’s 

direct effects arguments in the first instance, and to engage in 

additional fact-finding, as may be necessary, if the existing 

record is unclear. Therefore, the current judgment will be 

vacated, and we are remanding this matter back to the district 

court for this purpose.

V

For the reasons explained above, we cannot accept Wye 

Oak’s argument that Iraq waived its sovereign immunity, nor

do we agree with the Fourth Circuit’s conclusion that the 

second clause of the FSIA’s commercial activities exception 

applies based on the various activities that Wye Oak carried out 

in the United States in connection with its contract with Iraq. 

As for Wye Oak’s alternative argument that the district court

had subject-matter jurisdiction over its breach of contract 

claims because the third clause of the commercial activities

exception applies to the facts established during the bench trial, 

we remand to the district court to make that assessment in the 

first instance.3

So ordered.

3 We do not opine on the sufficiency of the existing record to support 

a determination that the district court has jurisdiction to enter the 

judgment here on the basis of clause three of the commercial 

activities exception, nor do we comment on the need to further 

develop the record to permit the district court to assess its own 

jurisdiction.