Opinion ID: 625173
Heading Depth: 3
Heading Rank: 3

Heading: Clause Two

Text: The second clause of the commercial activities exception applies if a plaintiff's action is based . . . upon an act performed in the United States in connection with a commercial activity of the foreign state elsewhere. 28 U.S.C. § 1605(a)(2) (2006). The Supreme Court has held that jurisdiction will lie where an action is `based upon' some `commercial activity' . . . that had `substantial contact' with the United States. . . . Saudi Arabia v. Nelson, 507 U.S. 349, 356, 113 S.Ct. 1471, 123 L.Ed.2d 47 (1993). The Court explained that the based upon requirement is satisfied if the act performed in the United States constitutes an element[ ] of a claim that, if proven, would entitle a plaintiff to relief under his theory of the case. Id. at 357, 113 S.Ct. 1471. We have expounded on Nelson, holding that based upon, at the very least, requires but for causation. Transatlantic Shiffahrtskontor GmbH v. Shanghai Foreign Trade Corp., 204 F.3d 384, 390 (2d Cir.2000). However, to resolve whether clause two applies to provide the District Court with a jurisdictional basis in this case, we need not reach the based upon analysis. A threshold requirement under the statute itself (and therefore under both Nelson and Transatlantic ) is that the relevant act was performed in the United States. That requirement is not met here. The plaintiffs have suggested that the email sent by Petrobrás' Investor Relations employee in the United States was the breach of contract and thus an act performed in the United States in connection with a commercial activity of the foreign state elsewhere. We disagree. In Guirlando, 602 F.3d at 76, we explored, at length, the metaphysical conundrum that arises within the FSIA context when a foreign sovereign's relevant act actually is an omissionhere, the failure to convert. [7] We stated: The decision by a foreign sovereign not to perform is itself an act, but it is not an act in the United States; it is an act in the foreign state. A decision not to act, standing by itself, does not have an effect until there has been an anticipatory repudiation or a failure to act at the time required. And although the failure to act may have a legally significant effect in the place where the act was to have been performed, the failure to act is not itself an act [in the United States]. Id. at 76. Guirlando's observations are in line with other courts to have been confronted with a similar conundrum. For example, in United States v. Swiss Am. Bank, Ltd., 274 F.3d 610 (1st Cir.2001), the First Circuit, in conducting a minimum contacts analysis, determined that a letter from a foreign bank to a district court simply g[iving] notice that payment might not occur was only marginally instrumental to the alleged breach [of failing to turn over forfeited drug proceeds from an account-holder's account] and therefore insufficient to satisfy a contract-plus requirement. Id. at 622 (citing Burger King Corp. v. Rudzewicz, 471 U.S. 462, 478-79, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985)); see also Elliott v. Armor Holdings, Inc. No. 99-337-B, 2000 WL 1466112, at  (D.N.H. Jan. 12, 2000) (Properly construed, the correspondence and any related telephone calls constitute notice to [the plaintiff] of the alleged breach, rather than the actual mechanism of breach. (citing Ticketmaster-N.Y., Inc. v. Alioto, 26 F.3d 201, 207 (1st Cir.1994))). Here, in accordance with Guirlando, Petrobrás' denial of the conversion sought by the plaintiffs was an act in Brazil based on the terms and conditions of the Bonds. The email sent to the plaintiffs by Helms, while sent from the Unites States, constitute[d] notice to [the plaintiffs] of the alleged breach, rather than the actual mechanism of breach. Elliott, 2000 WL 1466112, at  (emphasis supplied). Thus this act simply cannot fall within the purview of clause two.