Opinion ID: 4936
Heading Depth: 2
Heading Rank: 1

Heading: Immediate Appeal From Denial of FSIA Immunity

Text: Although the district court did not specify lack of immunity, as opposed to inapplicability of the forum selection clause, as the reason for denying Pemex's motion to dismiss, neither did it indicate that FSIA immunity was not a factor in its decision. More importantly, the effect of the order is to require Pemex to defend the lawsuit. As the purpose behind collateral order appeals from denials of FSIA immunity is to effectuate the guarantee that immune parties will not become embroiled in litigation, see Rush–Presbyterian–St. Luke's Medical Center v. Hellenic Republic, 877 F.2d 574, 576 n. 2 (7th Cir.), cert. denied, 493 U.S. 937, 110 S.Ct. 333, 107 L.Ed.2d 322 (1989), we treat the order as holding that Pemex does not have sovereign immunity. 3 Under Association of Co-op Members, the district court must certify in writing that the order involves a controlling question of law on which there is substantial ground for difference of opinion and that an immediate appeal may materially advance the termination of the litigation. 684 F.2d at 1137 n. 3. The district court did not include such a statement in the August 14 order. We recently followed several circuits and held that a district court's refusal to dismiss on the grounds of FSIA immunity is immediately appealable under the collateral order doctrine. Stena, 923 F.2d at 385. The Stena decision would appear to dispose of Repsa's contention that Pemex may not appeal this order. Repsa raises arguments, however, which deserve some attention. Repsa suggests that Stena permits us to hear an appeal from the denial of FSIA immunity only where the issues are purely legal. In this case, Repsa contends, there is evidence before the district court (in the form of affidavits from Repsa officials Moats and Contreras) which indicates that Pemex had sufficient contacts in the United States to enable an American court to assert jurisdiction over it. Thus, there are factual questions relevant to the issue of immunity which preclude our exercise of jurisdiction over the appeal. Moreover, Repsa says, o ne of the four requirements for collateral order appeals—a risk of irreparable loss if an immediate appeal is not taken, see EEOC v. Neches Butane Products Co., 704 F.2d 144, 148 (5th Cir.1983)—is absent in this case.
Repsa is correct that we have authority to decide only legal issues when we review an appeal from a collateral order. See Mitchell v. Forsyth, 472 U.S. 511, 527–28, 105 S.Ct. 2806, 2816–17, 86 L.Ed.2d 411 (1985) (court hearing appeal from collateral order denying qualified immunity under 42 U.S.C. § 1983 reviews only legal issues). This rule carries even more weight here because the district court resolved FSIA immunity, an issue of subject matter jurisdiction, Stena, 923 F.2d at 386, on the basis of the complaint. Cf. Williamson v. Tucker, 645 F.2d 404, 413 (5th Cir.), cert. denied, 454 U.S. 897, 102 S.Ct. 396, 70 L.Ed.2d 212 (1981) (appellate court reviews only application of law where district court dismisses for lack o f subject matter jurisdiction on the basis of the complaint alone). Whether Pemex is immune depends on the applicability of the commercial activity exception of the FSIA: (a) A foreign state shall not be immune from the jurisdiction of courts of the United States or of the States in any case— (2) in which the action is based upon a commercial activity carried on in the United States by a 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. 28 U.S.C. § 1605(a)(2). Not only would Pemex have to satisfy one of these jurisdictional connections with the United States to lose its immunity, there also would have to be a connection between its commercial activity and the cause of action asserted by Repsa. Stena, 923 F.2d at 386–87; Vencedora Oceanica Navigacion v. Compagnie Nationale Algerieene de Navigation, 730 F.2d 195, 200 (5th Cir.1984) (per curiam). As is apparent from a reading of § 1605(a)(2), application of the commercial activity exception to a particular defendant (a legal question) depends on certain jurisdictional facts: principally, it must be determined what commercial activity the defendant engaged in and where it took place. Repsa's argument fails because there is no real dispute over the facts relevant to the existence of immunity. At no point in the litigation, including on appeal, has Pemex disputed the facts Repsa has alleged in its (Repsa's) effort to establish that Pemex falls within the co mmercial activity exception. Pemex has never filed an answer to Repsa's third-party complaint and it never disputed the contents of any of Repsa's submissions to the district court, including the Moats and Contreras affidavits. Repsa seems to be asserting that the lack of any district court findings concerning the jurisdictional facts it alleged precludes our review. But this logic would prevent us from reviewing Fed.R.Civ.P. 12(b)(6) dismissals for failure to state a cause of action simply because no findings as to the truth of the plaintiff's facts had yet been made. Clearly, if Pemex does not dispute Repsa's allegations, but believes that it is entitled to immunity under the facts as alleged, the issue we must resolve is the purely legal application of the FSIA. There is nothing unusual in a case arriving at an appellate court in this posture; indeed, the parties frequently do not dispute the facts relevant to jurisdiction and the courts often resolve FSIA immunity by reference to the pleadings. E.g., Rush–Presbyterian–St. Luke's, 877 F.2d at 576; Compania Mexicana de Aviacion, S.A. v. U.S. Dist. Court, 859 F.2d 1354, 1360 (9th Cir.1988) (per curiam).4
Repsa's second argument is more easily dispensed with. In Coopers & Lybrand v. Livesay, 437 U.S. 463, 98 S.Ct. 2454, 57 L.Ed.2d 351 (1978), the Court summarized the four requirements for immediately appealable collateral orders originally articulated in Cohen v. Beneficial Industrial Loan Corp., 337 U.S. 541, 69 S.Ct. 1221, 93 L.Ed. 1528 (1949): [T]he order must conclusively determine the disputed question, resolve an important issue completely separate from the merits of the action, and be effectively unreviewable on appeal from a final judgment. Coopers & Lybrand, 437 U.S. at 468, 98 S.Ct. at 2458 (footnote and citations omitted). The fourth part of this test requires that there be a risk of important and probably irreparabl[e] loss if an immediate appeal is not heard, Cohen, 337 U.S. at 547, 69 S.Ct. at 1226, or, in the words of the court in Neches Butane, some showing of extraordinary harm. 704 F.2d at 148 (emphasis in original); see also Acosta v. Tenneco Oil Co., 913 F.2d 205, 208 (5th Cir.1990). Repsa says that there was a possibility of irreparable loss in Stena, the first case in this circuit to allow appeals from the denial of FSIA immunity, but not here. The difference, Repsa argues, is that in Stena the plaintiff attempted to garnish the credits and effects of one defendant which were in Pemex's possession, while here the plaintiff seeks only a money judgment against the foreign entity. This is a distinction without a difference. As noted above, sovereign immunity is an immunity from the burdens of becoming involved in any part of the litigation process, from pre-trial wrangling to trial itself. Regardless of what the plaintiff seeks from the foreign defendant, the risk of harm from having to defend the lawsuit remains constant and is an irreparable loss within the fourth part of Cohen. This circuit in Stena has found that the purposes behind the collateral order doctrine amply support appeals 4 Even if there were an unresolved factual question, that would not, as Repsa suggests, divest us of jurisdiction to hear the appeal. Rather, such a question would go to the merits of the appeal, and would probably require us to remand for further findings. See Gould, Inc. v. Pechiney Ugine Kuhlmann, 853 F.2d 445 (6th Cir.1988) (remanding for further proceedings because of unresolved questions concerning applicability of commercial activity exception). from the denial of FSIA immunity, and we are not inclined to question that judgment today.