Opinion ID: 756468
Heading Depth: 3
Heading Rank: 2

Heading: FSIA Exceptions

Text: 10
11 The district court found that the commercial activities exception to the FSIA applied. Under § 1605(a)(2), a foreign state is not immune when the action is: 12 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. 13 Commercial activity is defined as a regular course of commercial conduct or a particular commercial transaction or act. 28 U.S.C. § 1603(d). In determining the commercial character of an activity, courts look to the nature rather than the purpose of the act or transaction. Id. For the commercial activity exception to apply here, Nuovo Pignone's actions must fall within the second listed exception. In other words, the suit must be based upon ... an act performed within the United States in connection with a commercial activity of the foreign state elsewhere. The district court correctly found that the commercial activity upon which the plaintiff's cause of action was based was the design and manufacture of turbine systems. It further found that the act performed in the United States in connection with that activity was Nuovo Pignone's sending a representative to Bayou Black to consult in the final assembly of the system onto the platform. We disagree. 14 We turn first to the issue of each party's burden of proof. Initially, the party seeking immunity must show the district court that it is a foreign state potentially entitled to immunity under the FSIA. Once that party makes such a showing, the burden shifts to the opposing party to raise the exceptions to sovereign immunity and to assert facts that would establish these exceptions. The ultimate burden of proving that the FSIA applies, though, remains upon the party seeking immunity. Stena Rederi AB v. Comision de Contratos del Comite Ejecutivo General del Sindicato Revolucionario de Trabajadores Petroleros de la Republica Mexicana, 923 F.2d 380, 390 n. 14 (5th Cir.1991); Arriba Ltd. v. Petroleos Mexicanos, 962 F.2d 528, 533 (5th Cir.1992). Here, Nuovo Pignone has proven that it is a foreign state entitled to immunity; thus, the burden has shifted to Pere to prove that Nuovo Pignone performed an act within the United States in connection with the commercial activity performed elsewhere. Pere asserts that Nuovo Pignone's sending representatives to Bayou Black, Louisiana to consult on the final assembly was such an act. Assuming arguendo that the consultation was a commercial act performed within the United States, Pere still fails to meet her burden of proof. 15 To determine whether the availability to consult during the Bayou Black assembly was in connection with Nuovo Pignone's design/manufacture in Italy, we look to our prior cases to find the definition of in connection with. In Stena, we held that the connection between the commercial activity and the plaintiff's complaint had to be material. Id. at 387. However, when the in connection with prong applies, any material connection between 'commercial activity elsewhere' and the plaintiff's complaints ... is irrelevant to the determination of subject matter jurisdiction. Id. at 388. Under this prong, the material connection must exist between the act performed in the United States and plaintiff's cause of action. Here, then, the material connection must exist between the availability for consultation during final assembly in Bayou Black and Pere's allegations of wrongful death due to improper design and/or manufacture. Pere fails to show such a material connection. The components of the turbine system were manufactured, tested, and delivered to CABGOC in Italy. More importantly, once the components arrived in Bayou Black, Nuovo Pignone did not perform the final assembly; rather, it was CABGOC's contractor who performed this task. Concededly, Nuovo Pignone did send representatives to consult on the mechanical erection of the components onto the platform; however, there is no indication in the record concerning the extent or nature of the consultation or to show it as an integral part of the design or manufacture. While this Court is told that the Nuovo Pignone representatives consulted, we are left to guess at what the consultation involved. There is simply no indication that the final assembly in Bayou Black was a part of the design or manufacture that occurred in Italy. Thus, we cannot say that there is a material connection between Nuovo Pignone sending consultants to Bayou Black and Pere's wrongful death action. 16
17 Pere argues that the district court did not have to consider the commercial activity exception because Nuovo Pignone has implicitly waived its immunity. The FSIA allows a foreign state to waive its immunity either explicitly or implicitly, 28 U.S.C. § 1605(a)(1), but it does not state how implicit waiver occurs. The legislative history reveals, though, that implicit waiver may be found in three situations: 1) when a foreign state agrees to arbitration in another country; 2) when a foreign state agrees that the laws of another country govern a contract; and 3) when a foreign state files a responsive pleading without raising the immunity defense. H. Rep. No. 1487, 94th Cong.2d Sess. 18, reprinted in 1976, U.S.C.C.A.N. 6604, 6617. See also, Arriba Ltd., 962 F.2d at 539 n. 22. The waiver exception is to be narrowly construed. Joseph v. Office of Consulate General of Nigeria, 830 F.2d 1018, 1022 (9th Cir.1987). 18 Here, Pere argues that Nuovo Pignone implicitly waived its sovereign immunity by virtue of a 1985 contract it made with CABGOC. That contract concerned the overhaul of the FC-1C compressor train that included the starter turbine that exploded. In provision 19 of that contract, Nuovo Pignone agreed that the laws of Texas would govern questions concerning the performance or execution of the overhaul contract. Pere contends that this provision is an implied waiver. We disagree. 19 First, in cases in which implied waiver based upon a contract has been found, the contract was between the parties suing and being sued. See Eckert International v. The Government of the Sovereign Democratic Republic of Fiji, 32 F.3d 77 (4th Cir.1994); Joseph v. Office of Consulate General of Nigeria, 830 F.2d 1018 (9th Cir.1987); Kramer v. Boeing, Co., 705 F.Supp. 1392 (D.Minn.1989). That is not the case here. Moreover, when courts analyze whether a contract's choice of law provision constitutes implicit waiver, they look to the implied intent of the parties. See Eckert Int'l, 32 F.3d at 80. Having studied the 1985 agreement, we find no implied intent of Nuovo Pignone to be responsible to third parties. Hence, Nuovo Pignone has not impliedly waived its sovereign immunity.