Opinion ID: 2502147
Heading Depth: 2
Heading Rank: 2

Heading: Immunity from Jurisdiction and Immunity from Execution Under the FSIA

Text: Our consideration of petitioners' appellate arguments is usefully informed by a preliminary discussion of the two types of foreign sovereign immunity addressed in the FSIA: (1) [i]mmunity of a foreign state from jurisdiction, 28 U.S.C. § 1604; and (2) [i]mmunity from attachment and execution of property of a foreign state, id. § 1609. Compare id. §§ 1330, 1604-1607 (discussing immunity from jurisdiction), with id. §§ 1609-1611 (discussing immunity from attachment and execution). Although only immunity from execution is at issue in this suit, its parameters are best understood in comparison to immunity from jurisdiction. [5]
The FSIA invests federal district courts with original jurisdiction without regard to amount in controversy of any nonjury civil action against a foreign state, but only as to any claim for relief in personam with respect to which the foreign state is not entitled to immunity ... under sections 1605-1607. 28 U.S.C. § 1330(a). Consistent with this provision, § 1604 states that a foreign state shall be immune from the jurisdiction of the courts of the United States and of the States except as provided in sections 1605 to 1607. Among the exceptions to the general rule of jurisdictional immunity relevant to the Walters' pursuit of their claim against China are the following: cases in which the foreign sovereign has waived its immunity, see id. § 1605(a)(1); cases based upon a commercial activity carried on in the United States by the foreign state, id. § 1605(a)(2); and cases in which money damages are sought against a foreign state for personal injury or death ... occurring in the United States and caused by the tortious act or omission of that foreign state, id. § 1605(a)(5). Although the FSIA's legislative history suggests that jurisdictional immunity is an affirmative defense which must be specially pleaded by the foreign sovereign, H.R.Rep. No. 94-1487, at 17, 1976 U.S.C.C.A.N. 6604, 6616 (1976), the Supreme Court has stated that because § 1330(a) subject matter jurisdiction turns on the existence of an exception to foreign sovereign immunity, ... even if the foreign state does not enter an appearance to assert an immunity defense, a District Court still must determine that immunity is unavailable under the FSIA, Verlinden B.V. v. Cent. Bank of Nigeria, 461 U.S. 480, 493 n. 20, 103 S.Ct. 1962, 76 L.Ed.2d 81 (1983). This requirement is consistent with the courts' independent obligation to consider the presence or absence of subject matter jurisdiction sua sponte. College Standard Magazine v. Student Ass'n of State Univ. of N.Y. at Albany, 610 F.3d 33, 35 (2d Cir.2010) (internal quotation marks omitted). Here, the Western District of Missouri relied on both the commercial activity and tortious act exceptions in § 1605(a)(2) and (5), to hold that China was not immune from jurisdiction on the Walters' claims relating to the death of their son.
A separate section of the FSIA provides certain sovereign property with immunity from attachment and execution. Section 1609 states that the property in the United States of a foreign state shall be immune from attachment arrest and execution except as provided in sections 1610 and 1611. [6] Section 1610(a) enumerates certain exceptions from execution immunity for the property in the United States of a foreign state, as defined in section 1603(a) ..., used for a commercial activity in the United States. [7] Among these exceptions are two at issue on this appeal: where the foreign state has waived immunity, see id. § 1610(a)(1); and where property is or was used for the commercial activity upon which the [underlying] claim is based, id. § 1610(a)(2). Thus, for the property of a foreign state to be subject to attachment or execution under the waiver or commercial activity exceptions, it must not only be (1) used generally for commercial activity in the United States, but it must also be (2) either (a) subject to a waiver of immunity, or (b) used for the specific commercial activity upon which the underlying claim was based. Section 1610(b) contains additional exceptions to immunity for any property in the United States of an agency or instrumentality of a foreign state engaged in commercial activity in the United States. Such property is not immune from attachment or execution where the agency or instrumentality has waived its immunity from attachment in aid of execution or from execution either explicitly or implicitly, id. § 1610(b)(1); or where the judgment relates to a claim for which the agency or instrumentality is not immune by virtue of section 1605(a)(2) ... or (5) ... regardless of whether the property is or was involved in the act upon which the claim is based, id. § 1610(b)(2). Thus, under § 1610(b) the property of an agency or instrumentality of a foreign state is subject to execution if the agency or instrumentality (1) is engaged in commercial activity in the United States and (2) either (a) has waived execution immunity, or (b) is subject to jurisdiction on the underlying claim under certain subsections of § 1605. See Part II.B.1, supra. Section 1610(c) sets out the procedures for attaching or executing upon sovereign property: No attachment or execution referred to in subsections (a) and (b) of this section shall be permitted until the court has ordered such attachment and execution after having determined that a reasonable period of time has elapsed following the entry of judgment and the giving of any notice required under section 1608(e) of this chapter. The cross-referenced provision, § 1608(e), concerns proceedings in which the foreign sovereign is in default: No judgment by default shall be entered by a court of the United States or of a State against a foreign state, a political subdivision thereof, or an agency or instrumentality of a foreign state, unless the claimant establishes his claim or right to relief by evidence satisfactory to the court. A copy of any such default judgment shall be sent to the foreign state or political subdivision in the manner prescribed for service in this section. Thus, two conditions must be met before execution against sovereign property under a default judgment may be effected: (1) a reasonable period of time must have elapsed since the judgment was entered and sent to the foreign state pursuant to § 1608(e), and (2) a court must have ordered such attachment or execution consistent with subsection (a) or (b) of § 1610.
These FSIA provisions for jurisdictional and execution immunity yield certain recognized conclusions relevant to this appeal. First, the FSIA's provisions governing jurisdictional immunity, on the one hand, and execution immunity, on the other, operate independently. As the Restatement (Third) of Foreign Relations Law of the United States explains, this means that a waiver of immunity from suit does not imply a waiver of immunity from attachment of property, and a waiver of immunity from attachment of property does not imply a waiver of immunity from suit. § 456(1)(b) (1987); see also id. § 456 cmt. e (citing 28 U.S.C. §§ 1605, 1610); Ministry of Def. & Support for Armed Forces of Islamic Republic of Iran v. Cubic Def. Sys., Inc., 385 F.3d 1206, 1218-19 (9th Cir.2004) (The scant post-FSIA authority that speaks on the subject suggests that the statute did not change the earlier rule that waiver of jurisdictional immunity does not constitute a waiver of immunity from attachment.), vacated on other grounds sub nom. Ministry of Def. & Support for Armed Forces of Islamic Republic of Iran v. Elahi, 546 U.S. 450, 126 S.Ct. 1193, 163 L.Ed.2d 1047 (2006). Thus, recognition of exceptions to China's jurisdictional immunity in the Western District of Missouri case did not compel recognition of exceptions to the execution immunity of China's sovereign assets in the Southern District of New York turnover action. Second, the execution immunity afforded sovereign property is broader than the jurisdictional immunity afforded the sovereign itself. For example, while a foreign state is not immune from suit for its commercial activities, see 28 U.S.C. § 1605(a)(2), or for damages caused by its tortious acts or omissions, see id. § 1605(a)(5), a plaintiff who prevails against the sovereign in such actions can generally execute the judgment only upon assets with respect to which the foreign state has waived immunity, see id. § 1610(a)(1), or that the foreign state used for the commercial activity upon which the claim was based, see id. § 1610(a)(2). The special protection afforded to the property of a foreign sovereign is due to the fact that at the time the FSIA was passed, the international community viewed execution against a foreign state's property as a greater affront to its sovereignty than merely permitting jurisdiction over the merits of an action. Connecticut Bank of Commerce v. Republic of Congo, 309 F.3d 240, 255-56 (5th Cir.2002); see also Republic of Philippines v. Pimentel, 553 U.S. 851, 866, 128 S.Ct. 2180, 171 L.Ed.2d 131 (2008) ([P]re-FSIA, common-law doctrine dictated that courts defer to executive determination of immunity because `[t]he judicial seizure' of the property of a friendly state may be regarded as `an affront to its dignity and may ... affect our relations with it.') (second alteration and ellipsis in original; quoting Republic of Mexico v. Hoffman, 324 U.S. 30, 35-36, 65 S.Ct. 530, 89 L.Ed. 729 (1945)); Peterson v. Islamic Republic of Iran, 627 F.3d 1117, 1127-28 (9th Cir.2010) (Congress was aware that, although the restrictive theory of sovereign immunity from suit had become an accepted principle of international law by the time of the FSIA's enactment, `the enforcement of judgments against foreign state property remain[ed] a somewhat controversial subject.' (brackets in original; quoting H.R.Rep. No. 94-1487, at 27, 1976 U.S.C.C.A.N. 6604, 6630)). Indeed, our court has observed that the asymmetry between jurisdiction and execution immunity in the FSIA reflects a deliberate congressional choice to create a right without a remedy in circumstances where there is jurisdiction over a foreign state for purposes of obtaining a judgment, but its property is immune from attempts to execute the judgment: Congress passed the FSIA on the background of the views of sovereignty expressed in the 1945 charter of the United Nations and the 1972 enactment of the European Convention, which left the availability of execution totally up to the debtor state, and its own understanding as the legislative history demonstrates, that prior to 1976 property of foreign states was absolutely immune from execution. It is plain then that Congress planned to and did lift execution immunity in part. Yet, since it was not Congress' purpose to lift execution immunity wholly and completely, a right without a remedy does exist in [some] circumstances[.] De Letelier v. Republic of Chile, 748 F.2d 790, 799 (2d Cir.1984) (citation omitted); see also Rubin v. Islamic Republic of Iran, 637 F.3d 783, 796 (7th Cir.2011); Peterson v. Islamic Republic of Iran, 627 F.3d at 1128. Third, the property of an agency or instrumentality of a foreign state is afforded narrower protection from execution than the property of the foreign state itself. See EM Ltd. v. Republic of Argentina, 473 F.3d 463, 472-73 (2d Cir.2007); see also De Letelier v. Republic of Chile, 748 F.2d at 799 (Congress sharply restricted immunity from execution against agencies and instrumentalities, but was more cautious when lifting immunity from execution against property owned by the State itself.); Rubin v. Islamic Republic of Iran, 637 F.3d at 797. This is evidenced in two relevant respects. While all property of an agency or instrumentality engaged in commercial activity under § 1610(b) is potentially subject to attachment or execution, attachment or execution of property of the foreign state itself is strictly limited to those assets that are themselves used for commercial activity. See 28 U.S.C. § 1610(a); see also, e.g., Aurelius Capital Partners, LP v. Republic of Argentina, 584 F.3d at 130 (holding that § 1610(a) requires [m]ore than that property will be used or could potentially be used for commercial activity to be subject to execution (emphasis in original)). Further, unlike the property of an agency or instrumentality under § 1610(b)(2), the property of a foreign state itself is never automatically subject to attachment or execution merely because the underlying judgment relates to a claim for which the state is not immune from suit under § 1605(a)(2) or (5). See 28 U.S.C. § 1610(a). With these principles in mind, we address petitioners' challenges on appeal.