Opinion ID: 187189
Heading Depth: 2
Heading Rank: 1

Heading: Background and General Principles

Text: Section 1330(a) of Title 28 gives the district courts subject matter jurisdiction over cases against foreign states as to any claim for relief in personam with respect to which the foreign state is not entitled to immunity either under sections 1605-1607 of this title [parts of the FSIA] or under any applicable international agreement. In its suit against Russia, Agudas Chasidei Chabad argues that the FSIA's expropriation exception, § 1605(a)(3), precludes the defendants' immunity. It states in relevant part: (a) A foreign state shall not be immune from the jurisdiction of courts of the United States or of the States in any case . . . . (3) in which [A] rights in property taken in violation of international law are in issue and [B][1] that property or any property exchanged for such property is present in the United States in connection with a commercial activity carried on in the United States by the foreign state; or [2] that property or any property exchanged for such property is owned or operated by an agency or instrumentality of the foreign state and that agency or instrumentality is engaged in a commercial activity in the United States. . . . 28 U.S.C. § 1605(a)(3). The provision appears to rest jurisdiction in part on the character of a plaintiff's claim (designated A) and in part on the existence of one or the other of two possible commercial activity nexi between the United States and the defendants (designated B). Before exploring the statute's particular requirements, we pause to note the standards by which courts are to resolve questions of federal jurisdiction. First, to the extent that jurisdiction depends on particular factual propositions (at least those independent of the merits), the plaintiff must, on a challenge by the defendant, present adequate supporting evidence. Thus, a plaintiff must establish the facts of diversity for purposes of jurisdiction under 28 U.S.C. § 1332. McNutt v. Gen. Motors Acceptance Corp., 298 U.S. 178, 56 S.Ct. 780, 80 L.Ed. 1135 (1936). For purely factual matters under the FSIA, however, this is only a burden of production; the burden of persuasion rests with the foreign sovereign claiming immunity, which must establish the absence of the factual basis by a preponderance of the evidence. See, e.g., Aquamar S.A. v. Del Monte Fresh Produce N.A., Inc. 179 F.3d 1279, 1290 (11th Cir.1999); Cargill Int'l v. M/T Pavel Dybenko, 991 F.2d 1012, 1016 (2d Cir.1993); Alberti v. Empresa Nicaraguense De La Carne, 705 F.2d 250, 255-56 (7th Cir.1983). Second, to the extent that jurisdiction depends on the plaintiff's asserting a particular type of claim, [2] and it has made such a claim, there typically is jurisdiction unless the claim is immaterial and made solely for the purpose of obtaining jurisdiction or ... wholly insubstantial and frivolous, i.e., the general test for federal-question jurisdiction under Bell v. Hood, 327 U.S. 678, 682-83, 66 S.Ct. 773, 90 L.Ed. 939 (1946), and Arbaugh v. Y & H Corp., 546 U.S. 500, 513 & n. 10, 126 S.Ct. 1235, 163 L.Ed.2d 1097 (2006). (Other circuit courts have applied this same standard when jurisdiction depends on factual propositions intertwined with the merits of the claim, but we need not express any opinion on this point. See Safe Air for Everyone v. Meyer, 373 F.3d 1035, 1040 (9th Cir.2004); cf. Morrison v. Amway Corp., 323 F.3d 920, 925 (11th Cir.2003) (finding no need for the independent ascertainment, for jurisdictional purposes, of merits-intertwined facts).) The Bell v. Hood standard to be applied is obviously far less demanding than what would be required for the plaintiff's case to survive a summary judgment motion under Fed. R.Civ.P. 56. Thus, for example, in Clark v. Tarrant County, 798 F.2d 736 (5th Cir. 1986), the court upheld jurisdiction on a finding that the plaintiffs' position on the disputed element of their claim cannot be said [to be] wholly frivolous, id. at 742, saying expressly that it did not intimate whether the plaintiffs in fact established the necessary element, id. at 743. See generally Harry T. Edwards & Linda A. Elliott, Federal Standards of Review ch. III.A (2007). Section 1605(a)(3) presents both types of jurisdictional questions. The alternative commercial activity requirements (B) are purely factual predicates independent of the plaintiff's claim, and must (unless waivedsee below) be resolved in the plaintiff's favor before the suit can proceed. The remainder (A) does not involve jurisdictional facts, but rather concerns what the plaintiff has put in issue, effectively requiring that the plaintiff assert a certain type of claim: that the defendant (or its predecessor) has taken the plaintiff's rights in property (or those of its predecessor in title) in violation of international law. [3] It is undisputed that Agudas Chasidei Chabad has made such claims as to both parts of the Collection. The defendants assert various legal and factual inadequacies in the claims. It is rather unclear what standard the district court applied to those contentions, but Bell requires only that such potential inadequacies do not render the claims wholly insubstantial or frivolous. See 327 U.S. at 682-83, 66 S.Ct. 773. As we shall show below, the claims plainly survive that test. Russia has seemed to draw a distinction between the rights in property element of the plaintiff's claim and the taken in violation of international law element. In a motion to dismiss Russia conceded that [h]ere, for the purposes of this motion only, the first prong [of the expropriation exception] (rights in property at issue) is not disputed, inasmuch as Plaintiff's claims of right to the Library and the Archive are placed in issue by Plaintiff's complaint. Def. Mot. Dismiss 10. The motion then stated, Obviously, the Defendants vigorously deny that Plaintiff has any right of ownership or possession of either the Library or the Archive. Id. at 10 n. 7. On that issue, therefore, Russia recognized that Agudas Chasidei Chabad's burden was only to put its rights in property in issue in a non-frivolous way. Where a plaintiff has failed to do so, such as by making concessions logically inconsistent with a substantial claim to `rights in property' of which he was deprived in derogation of international law, a court will not find jurisdiction. Peterson v. Kingdom of Saudi Arabia, 416 F.3d 83, 88 (D.C.Cir.2005). When it came to whether rights had been taken in violation of international law, however, Russia vigorously disputed the matter, seeming to regard this element as a jurisdictional fact thatlike commercial activitymust be resolved definitively before the court could proceed to the merits. On the contrary, for jurisdiction, non-frivolous contentions suffice under Bell. Thus in West v. Multibanco Comermex, S.A., 807 F.2d 820 (9th Cir.1987), the Ninth Circuit found jurisdiction proper under § 1605(a)(3) when the plaintiff's claim of conversion was substantial and non-frivolous and provide[d] a sufficient basis for the exercise of our jurisdiction, even though we ultimately rule against the plaintiffs on the merits; indeed, the court found on the merits that the defendant's acts were not actually takings in violation of international law. Id. at 826, 831-33; see also Siderman de Blake v. Republic of Argentina, 965 F.2d 699, 712-13 (9th Cir. 1992) (finding no difficulty [in] concluding that the . . . complaint contains `substantial and non-frivolous' allegations that [the disputed property] was taken in violation of international law, subject to further fact finding on remand).