*Pursuant to 5TH CIR. R. 47.5, the court has determined that

this opinion should not be published and is not precedent except

under the limited circumstances set forth in 5TH CIR. R. 47.5.4.

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

_____________________

No. 99-40800

_____________________

VALERO ENERGY CORPORATION; VALERO MARKETING AND SUPPLY

COMPANY

Plaintiffs - Appellees

v.

EMPRESA ESTATAL PETROLEOS DEL ECUADOR, also known as

Petroecuador

Defendant - Appellant

_________________________________________________________________

Appeal from the United States District Court

for the Southern District of Texas

(G-99-CV-88)

_________________________________________________________________

June 5, 2000

Before KING, Chief Judge, and GARWOOD and DeMOSS, Circuit Judges.

PER CURIAM:*

Defendant-Appellant Empresa Estatal Petroleos Del Ecuador

appeals from a district court order remanding this case to the

Texas state court from which it was removed. We dismiss for want

of appellate jurisdiction.

I. FACTUAL AND PROCEDURAL HISTORY
 

1 Section 1603 provides, in pertinent part:

(a) A “foreign state”, except as used in section 1608 of

this title, includes a political subdivision of a

foreign state or an agency or instrumentality of a

foreign state as defined in subsection (b).

(b) An “agency or instrumentality of a foreign state” means

any entity--

(1) which is a separate legal person, corporate or

otherwise, and

(2) which is an organ of a foreign state or political

subdivision thereof, or a majority of whose shares

or other ownership interest is owned by a foreign

state or political subdivision thereof, and

(3) which is neither a citizen of a State of the

United States as defined in section 1332(c) and

(d) of this title, nor created under the laws of

any third country.

28 U.S.C. § 1603 (1994).

2

This appeal centers around the removal and remand of an

action for breach of contract and injunction. A proper

understanding of the issues involved requires that we begin by

setting forth some general legal propositions on which we take no

position. 28 U.S.C. § 1603 defines a “foreign state” for

purposes of the Foreign Sovereign Immunities Act (the “FSIA”).1

Defendant-Appellant Empresa Estatal Petroleos Del Ecuador

(“PetroEcuador”) argues that it is a “political subdivision” of a

foreign state under § 1603, and Plaintiffs-Appellees Valero

Energy Corporation and Valero Marketing and Supply Company

(collectively “Valero”) assert that PetroEcuador is an “agency or

instrumentality” of a foreign state. For our purposes, the

distinction matters because, as provided in 28 U.S.C. § 1608, the

requirements for serving process on an entity like PetroEcuador
 

2 Section 1608 provides, in pertinent part:

(a) Service in the courts of the United States and of the

States shall be made upon a foreign state or political

subdivision of a foreign state:

(1) by delivery of a copy of the summons and complaint

in accordance with any special arrangement for

service between the plaintiff and the foreign

state or political subdivision; or

(2) if no special arrangement exists, by delivery of a

copy of the summons and complaint in accordance

with an applicable international convention on

service of judicial documents; or

(3) if service cannot be made under paragraphs (1) or

(2), by sending a copy of the summons and

complaint and a notice of suit, together with a

translation of each into the official language of

the foreign state, by any form of mail requiring a

signed receipt, to be addressed and dispatched by

the clerk of the court to the head of the ministry

of foreign affairs of the foreign state concerned,

or

(4) if service cannot be made within 30 days under

paragraph (3), by sending two copies of the

summons and complaint and a notice of suit,

together with a translation of each into the

official language of the foreign state, by any

form of mail requiring a signed receipt, to be

addressed and dispatched by the clerk of the court

to the Secretary of State in Washington, District

of Columbia, to the attention of the Director of

Special Consular Services--and the Secretary shall

transmit one copy of the papers through diplomatic

channels to the foreign state and shall send to

the clerk of the court a certified copy of the

diplomatic note indicating when the papers were

transmitted.

. . . .

(b) Service in the courts of the United States and of the

States shall be made upon an agency or instrumentality

of a foreign state:

3

turn, in part, on whether the entity is a “political subdivision”

or an “agency or instrumentality.”2
(1) by delivery of a copy of the summons and complaint

in accordance with any special arrangement for

service between the plaintiff and the agency or

instrumentality; or

(2) if no special arrangement exists, by delivery of a

copy of the summons and complaint either to an

officer, a managing or general agent, or to any

other agent authorized by appointment or by law to

receive service of process in the United States; 

or in accordance with an applicable international

convention on service of judicial documents; or

(3) if service cannot be made under paragraphs (1) or

(2), and if reasonably calculated to give actual

notice, by delivery of a copy of the summons and

complaint, together with a translation of each

into the official language of the foreign state--

(A) as directed by an authority of the foreign

state or political subdivision in response to

a letter rogatory or request or

(B) by any form of mail requiring a signed

receipt, to be addressed and dispatched by

the clerk of the court to the agency or

instrumentality to be served, or

(C) as directed by order of the court consistent

with the law of the place where service is to

be made.

28 U.S.C. § 1608 (a) & (b) (1994).

4

On July 15, 1998, Valero filed a petition in Texas state

court against PetroEcuador for breach of contract and injunction. 

On that same date, Valero received an ex parte temporary

restraining order (“TRO”). Valero claims that it soon thereafter

faxed a copy of the petition and TRO to PetroEcuador. On

September 30, 1998, Valero filed its First Amended Original

Petition (the “Complaint”) in state court. Valero claims that

the Complaint was faxed to PetroEcuador the same day. On October

12, 1998, Valero served the Attorney General of the State of

Texas with citation and a copy of the Complaint. Valero avers
 

3 Valero relies on 28 U.S.C. § 1446(d) for this argument. 

Section 1446(d) provides:

Promptly after the filing of such notice of removal of a

civil action the defendant or defendants shall give written

notice thereof to all adverse parties and shall file a copy

of the notice with the clerk of such State court, which

shall effect the removal and the State court shall proceed

5

that because PetroEcuador is an “agency or instrumentality,” this

constituted formal service of process under § 1608(b). The

Attorney General forwarded the citation and complaint to

PetroEcuador, which admits to having received them on October 23,

1998. Valero claims that under § 1608(b), PetroEcuador was

formally served, at the latest, on this date. PetroEcuador, on

the other hand, asserts that because it is a “political

subdivision,” it has yet to receive formal service of process

under § 1608(a).

On December 8, 1998, PetroEcuador filed a Notice of Removal

in the United States District Court for the Southern District of

Texas, Houston Division. The following day, it filed a motion to

dismiss for lack of personal jurisdiction due to improper service

of process. On January 4, 1999, Valero filed an opposition to

PetroEcuador’s motion to dismiss and moved for remand due to

untimely removal or, alternatively, to have the case transferred

to the Galveston Division. On January 6, 1999, PetroEcuador

filed a Notice of Filing Removal in state court. Valero argues

that PetroEcuador did not complete the removal process until this

date.3
no further unless and until the case is remanded.

28 U.S.C. § 1446(d) (1994).

 

4 When a foreign state is involved, the time for removal

may, under certain circumstances, be enlarged:

Any civil action brought in a State court against a foreign

state as defined in section 1603(a) of this title may be

removed by the foreign state to the district court of the

United States for the district and division embracing the

place where such action is pending. Upon removal the action

shall be tried by the court without jury. Where removal is

based upon this subsection, the time limitations of section

1446(b) of this chapter may be enlarged at any time for

cause shown.

 

28 U.S.C. § 1441(d) (1994).

6

The court found that PetroEcuador’s removal was untimely but

that cause existed for its untimeliness.4 The court expanded the

time limitation for removal accordingly and explained in a

written order:

Pursuant to [§ 1441(d)], courts “liberally allow the

enlargement of time to further the purpose of providing a

federal forum for foreign states, when the rights of the

parties and judicial economy would not be prejudiced

thereby.” [Talbot v. Saipem, A.G., 835 F. Supp. 352, 355

(S.D. Tex. 1993)].

Petroecuador proffers several reasons for its delay. 

It contends that the Chief of Judicial Process was not aware

of the fax transmissions, that the transmissions were not

translated, and that the documents were not served through

what it perceives as the normal channels under the FSIA. 

Although these reasons might not constitute “good cause,”

the Court concludes that sufficient “cause” has been

presented.

With regards to prejudice, where little prior activity

has occurred in the state court, removal is generally

allowed. Id. (citing cases). As in Saipem, Petroecuador

filed its notice of removal only several months late. In

fact, Petroecuador provided its notice of removal to Valero
7

a mere forty-three days after the case had been filed. 

Also, as in Saipem, no depositions or motions had been

argued or ruled upon; nor had a scheduling conference or

trial date been set. Accordingly, the Court concludes that

Valero will not be prejudiced and that this court has

subject matter jurisdiction over the lawsuit.

Order entered February 8, 1999, at 3 [hereinafter “Houston

Order”]. In the same order, the court determined that the case

had been removed to the wrong division and transferred it to the

Galveston Division. See id. at 4.

About two-and-a-half months after the case was transferred

to the Galveston Division, Valero moved the district court to

reconsider the motion to remand. The district court reconsidered

the motion and remanded the case. It first decided that “removal

was not effective until January 6, 1999, when PetroEcuador filed

its Notice of Removal with the state court.” Order entered June

3, 1999, at 1 n.1 [hereinafter “Galveston Order”]. The court

then determined that PetroEcuador’s removal was untimely and that

it had not established “cause” for its untimeliness. See id. at

4-5. The court concluded, “Accordingly, the Court holds that

this was untimely removed, and because this Court therefore LACKS

SUBJECT MATTER JURISDICTION, the case is REMANDED to the Court in

which it was originally brought.” Id. at 5. As a result of its

determination that it lacked subject matter jurisdiction, the

court did not reach PetroEcuador’s Motion to Dismiss for Lack of

Personal Jurisdiction. PetroEcuador timely appealed from the

Galveston Order on July 2, 1999.
8

Valero filed a motion to dismiss and to assess costs and

attorney’s fees against PetroEcuador for a frivolous appeal under

Federal Rule of Appellate Procedure 38. Valero’s motion has been

carried with the case.

II. DISCUSSION

28 U.S.C. § 1447(c) provides, in part, that a remand motion

based on “any defect other than lack of subject matter

jurisdiction must be made within 30 days after the filing of the

notice of removal . . . . If at any time before final judgment

it appears that the district court lacks subject matter

jurisdiction, the case shall be remanded.” Section 1447(d)

relatedly provides that “[a]n order remanding a case to the State

court from which it was removed is not reviewable on appeal or

otherwise . . . .” The applicability of § 1447(d) is limited to

those cases remanded pursuant to § 1447(c). See Thermtron

Prods., Inc. v. Hermansdorfer, 423 U.S. 336, 345-46 (1976). “As

long as a district court’s remand is based on a timely raised

defect in removal procedure or on lack of subject-matter

jurisdiction–the grounds for remand recognized in § 1447(c)–a

court of appeals lacks jurisdiction to entertain an appeal of the

remand order under § 1447(d).” Things Remembered, Inc. v.

Petrarca, 516 U.S. 124, 127-28 (1995).
9

PetroEcuador advances several arguments in support of its

contention that § 1447(d) does not preclude our review of the

remand order in this case. Initially, it argues that the remand

order does not fall under § 1447(c) because it was not based upon

a defect in removal procedure. According to PetroEcuador, it

received an enlargement of time in which to remove, pursuant to

§ 1441(d); therefore, its removal was timely at the time it

removed, and to come under § 1447(c), defects in removal must

exist at the time of removal. PetroEcuador also asserts that the

Galveston Order, which ordered the case remanded, granted

Valero’s motion to reconsider, rather than its original motion to

remand. Valero’s original motion to remand was denied by the

district court in the Houston Order. PetroEcuador argues that

because the Galveston Order was not in response to a timely filed

motion to remand, the remand order was not based on a ground

recognized in § 1447(c), and we are not precluded from reviewing

the order by § 1447(d). Finally, PetroEcuador argues that

§ 1441(d) allows an enlargement of time to remove “at any time,”

and we can therefore enlarge the time allowed for removal and

review the Houston Order.

We need not reach any of these arguments, however, because

we disagree with PetroEcuador’s fundamental characterization of

the Galveston Order. PetroEcuador begins by pointing out that

both parties agree that PetroEcuador is a foreign state under

§ 1603. They simply disagree whether PetroEcuador is a
 

5 The statute provides, in pertinent part, that “[t]he

district courts shall have original jurisdiction without regard

to amount in controversy of any nonjury civil action against a

foreign state as defined in section 1603(a) . . . .” 28 U.S.C.

§ 1330(a) (1994). 

 

6 PetroEcuador cites numerous cases in support of its

proposition that “[t]he District Court’s label of description of

its Order does not bind this Court–rather this Court bases its

rulings on the substance and effect of the Order.” 

PetroEcuador’s Brief at 16. The cited cases that do not deal

with remand orders are unpersuasive. Those dealing with remand

orders do not stand for the proposition put forward by

PetroEcuador. In re Digicon Marine, Inc., 966 F.2d 158, 160 (5th

Cir. 1992), stands for the proposition that the basis for remand

stated in the district court’s original remand order controls

over the district court’s description of the remand order in its

subsequent order on reconsideration. Tillman v. CSX Transp.,

Inc., 929 F.2d 1023 (5th Cir. 1991), stands for the unremarkable

proposition that, “even if the trial court neither states as

grounds for remand the specific words of § 1447(c) nor cites the

statute itself, the order is unreviewable if, by substantially

similar language, it is evident that the court intends to remand

for the grounds recited in § 1447(c).” Id. at 1027.

10

“political subdivision” or an “agent or instrumentality.” 

Generally, 28 U.S.C. § 1330(a) grants the district courts

original jurisdiction over suits against foreign sovereigns.5

According to PetroEcuador, the district court here, therefore,

enjoyed subject matter jurisdiction. The statement in the

Galveston Order that the district court lacked subject matter

jurisdiction was simply a mistake; the district court really

remanded the case based upon untimely removal.6 PetroEcuador

states “that the Order granting Plaintiffs’ Motion to Reconsider

was not based on a lack of subject matter jurisdiction . . . . 

Instead, the District Court apparently believed that the earlier

. . . extension of time was improvident. Accordingly, it
11

retracted the enlargement and remanded on that, nonjurisdictional basis.” PetroEcuador’s Brief at 16. PetroEcuador

concludes that, because the Houston Order remanded the case based

on a non-§ 1447(c) procedural defect -- rather than a

jurisdictional defect -- our appellate jurisdiction is not

defeated.

The Galveston Order states that the case “was untimely

removed, and . . . this Court [the district court] therefore

LACKS SUBJECT MATTER JURISDICTION . . . .” Galveston Order at 5. 

PetroEcuador’s interpretation of the order is understandable

considering the intertwined procedural and jurisdictional bases

for the district court’s decision to remand. A careful reading

of the Galveston Order reveals, however, that the district court

concluded that improper removal divested it of subject matter

jurisdiction. The district court therefore remanded the case, at

least in part, because it believed that it lacked subject matter

jurisdiction. Section 1447(d) precludes us from reviewing a

district court’s remand order entered pursuant to 28 U.S.C.

§ 1447(c), “even if the remand order is clearly erroneous.” 

Soley v. First Nat’l Bank, 923 F.2d 406, 408 (5th Cir. 1991). A

remand order based on lack of subject matter jurisdiction is

entered pursuant to § 1447(c) and is therefore unreviewable. See

In re Shell Oil Co., 932 F.2d 1518, 1520 n.5 (5th Cir. 1991)

(“[R]emand orders based on lack of subject matter jurisdiction

are clearly unreviewable.”). We have explained before that “we
12

will only review remand orders if the district court

affirmatively states a non-1447(c) ground for remand.” Soley, 923

F.2d at 408 (internal quotation marks omitted). We will not

review a remand order if “the district court remanded, at least

in part, for lack of subject matter jurisdiction.” Mobil Corp.

v. Abeille General Ins. Co., 984 F.2d 664, 666 (5th Cir 1993).

PetroEcuador’s argument that, in a case such as this, we

should look past the erroneous jurisdictional ground for remand

and examine whether the underlying procedural ground is really

based upon § 1447(c) is inviting. Our precedent requires,

however, that we reject that argument. Once the district court

arrives at the conclusion that it lacks subject matter

jurisdiction, the path it traveled to arrive at that point

becomes irrelevant; pursuant to § 1447(d) the jurisdictional

determination divests this court of appellate jurisdiction. 

Despite our conclusion that we lack appellate jurisdiction to

address this appeal, however, certain other of PetroEcuador’s

arguments warrant comment.

First, PetroEcuador argues that we have jurisdiction to

determine whether it was ever properly served with process. 

PetroEcuador’s concern seems to be that Valero will argue in

state court that process was properly served, otherwise the

district court could not have determined that removal was

untimely. PetroEcuador argues that we may review a decision of
 

7 The district court, citing Ruhrgas AG v. Marathon Oil Co.,

526 U.S. 574 (1999), stated that it would “exercise its

discretion to decide the Motion to Reconsider first, thereby

determining whether the case is properly before it prior to

deciding personal service questions.” Galveston Order at 1-2. 

We recognize that the Motion to Reconsider dealt with the

timeliness of removal, but, as we have stated, the district court

here saw the question of timely removal as one of subject-matter

jurisdiction.

13

the district court that is separable from the remand order, and

the service of process question is just such a decision.

We begin by noting that the service of process question was

tied to PetroEcuador’s Motion to Dismiss for Lack of Personal

Jurisdiction. The district court, faced with what it considered

to be two jurisdictional questions -- that of personal

jurisdiction and that of subject-matter jurisdiction -- opted to

address the question of subject-matter jurisdiction first.7

Finding that issue dispositive, the district court declined to

reach the issue of personal jurisdiction. The district court’s

decision to address the question of subject-matter jurisdiction

first was entirely appropriate. Cf. Ruhrgas AG v. Marathon Oil

Co., 526 U.S. 574, 578 (1999) (“Customarily, a federal court

first resolves doubts about its jurisdiction over the subject

matter . . . .”). 

PetroEcuador correctly asserts, however, that, even if a

case is properly remanded pursuant to § 1447(c), we may review

decisions of the district court that are separable from the

remand order. See Angelides v. Baylor Coll. of Med., 117 F.3d
14

833, 837 (5th Cir. 1997). A decision is separable if it precedes

the remand order in logic and fact and is conclusive. “An order

is conclusive if it will have the preclusive effect of being

functionally unreviewable in the state court.” Id. (internal

quotation marks omitted). Here, the district court’s decision to

remand was jurisdictional, leaving the state court free to

examine, or reexamine as the case may be, any question regarding

service of process, unhindered by the decision of the district

court. See id. Because any decision the district court may have

reached in this regard is not binding on the state court, that

decision is not conclusive and is, therefore, unreviewable in

this court.

Second, PetroEcuador argues that the district court’s

decision to withdraw the prior enlargement of time to remove is

reviewable because that decision was prior in logic and fact to

its decision to remand and is effectively unreviewable in state

court. The district court’s decision to withdraw the prior

enlargement of time was simply a step in its decision to remand. 

We will not, as PetroEcuador seems to suggest we should,

indirectly review the district court’s unreviewable remand order

by scrutinizing the court’s decisions that formed the basis for

its determination that remand was appropriate. Just as § 1447(d)

prevents us from reviewing directly the district court’s decision

to remand, it likewise prevents us from reviewing that decision
 

8 Valero has filed a motion in this court requesting that we

order PetroEcuador to pay Valero twice its costs and attorney’s

fees for a frivolous appeal. Federal Rule of Appellate Procedure

38 provides that “[i]f a court of appeals determines that an

appeal is frivolous, it may, after a separately filed motion or

notice from the court and reasonable opportunity to respond,

award just damages and single or double costs to the appellee.” 

“An appeal is frivolous if it relies on legal points that are not

arguable on their merits.” Walker v. City of Bogalusa, 168 F.3d

237, 241 (5th Cir. 1999) (internal quotation marks omitted). We

disagree with Valero’s contention that PetroEcuador’s legal

15

through some backdoor, as PetroEcuador suggests. To do so would

negate the clear directive of § 1447(d).

Finally, PetroEcuador argues that Congress manifested a

preference for federal courts to hear cases involving foreign

states. According to PetroEcuador, we should therefore take the

steps necessary to ensure its access to the federal courts. We

agree that Congress, in enacting the FSIA, intended for foreign

sovereigns to have access to federal courts. As we have

explained previously, however, that access is not absolute. 

Section 1447(d) predated FSIA and its removal

provision, but Congress made no exception for appellate

review of a remanded FSIA case, as it has done for civil

rights and FDIC cases. Relatedly, in waiving the sovereign

immunity of the United States, Congress did not provide a

[Federal Tort Claims Act] exception to § 1447(d) and this

court has refused to create one. Mitchell v. Carlson, 896

F.2d 128, 131 (5th Cir.1990). The FSIA has no such

exception and, as in Mitchell, we must adhere to the broad

application of § 1447(d). 

Mobil, 984 F.2d at 666 (internal quotation marks and some

citations omitted). When, as here, we determine that the

district court remanded the case pursuant to § 1447(c), the FSIA

provides no exception to the mandate of § 1447(d).8
points are not arguable on the merits. PetroEcuador’s argument

that we should look past the jurisdictional conclusion and focus

on the underlying procedural issues has appeal. Ultimately,

however, we conclude that we are constrained by the statute and

our precedent. The legal points raised by PetroEcuador are

nonetheless, in our minds, arguable on their merits.

16

III. CONCLUSION

The remand order in this case having been entered pursuant

to § 1447(c), we are without appellate jurisdiction to entertain

an appeal from it. Valero’s motion to DISMISS the appeal for

want of appellate jurisdiction is GRANTED. Its motion to award

costs and attorney’s fees is DENIED.