Opinion ID: 775317
Heading Depth: 2
Heading Rank: 3

Heading: Principles of Analysis

Text: 28
29 In a motion to dismiss pursuant to Fed. R. Civ. P. 12(b)(1), the defendant may challenge either the legal or factual sufficiency of the plaintiff's assertion of jurisdiction, or both. See Phoenix Consulting, Inc. v. Republic of Angola, 216 F.3d 36, 40 (D.C. Cir. 2000); see also Gwaltney of Smithfield, Ltd. v. Chesapeake Bay Found., Inc., 484 U.S. 49, 68 (1987) (Scalia, J., concurring in part and concurring in the judgment) (It is well ingrained in the law that subject-matter jurisdiction can be called into question either by challenging the sufficiency of the allegation or by challenging the accuracy of the jurisdictional facts alleged. (citations omitted)). [H]ow the district court proceeds to resolve the motion to dismiss depends upon whether the motion presents a factual challenge. Phoenix Consulting, 216 F.3d at 40. If the defendant challenges only the legal sufficiency of the plaintiff's jurisdictional allegations, id., the court must take all facts alleged in the complaint as true and draw all reasonable inferences in favor of plaintiff, Sweet v. Sheahan, 235 F.3d 80, 83 (2d Cir. 2000) (citation omitted). But where evidence relevant to the jurisdictional question is before the court, the district court... may refer to [that] evidence. Makarova v. United States, 201 F.3d 110, 113 (2d Cir. 2000).
30 1. Generally. In the context of a Rule 12(b)(1) challenge to jurisdiction under the FSIA, then, we have said that the district court must look at the substance of the allegations to determine whether one of the exceptions to the FSIA's general exclusion of jurisdiction over foreign sovereigns applies. Cargill Int'l, 991 F.2d at 1019; see also Verlinden, B.V., 461 U.S. at 493-94. In doing so, the court must review the pleadings and any evidence before it. Cargill Int'l, 991 F.2d at 1019. 6 In Filetech S.A., we held that the district court erred by failing to look beyond the pleadings to factual submissions, including affidavits, submitted to the court in order to resolve a factual dispute as to whether there was sufficient commercial activity to permit the court to exercise jurisdiction under the commercial activities exception to sovereign immunity. See 28 U.S.C. § 1605(a)(2). We remarked: 31 [I]n view of the... factual disputes [in the district court], it was error for [it] to accept the mere allegations of the complaint as a basis for finding subject matter jurisdiction. The district court look[ed] only to the complaint in making its determination. It did so despite the factual issues regarding jurisdiction that were presented to it. In these circumstances, the court should have looked outside the pleadings to the submissions, which both contradicted and supported the bare allegations of jurisdiction pleaded in the complaint. 32 Filetech S.A., 157 F.3d at 932; see also Phoenix Consulting, 216 F.3d at 40 (When the defendant has... challenged the factual basis of the court's jurisdiction... the court must go beyond the pleadings and resolve any disputed issues of fact the resolution of which is necessary to a ruling upon the motion to dismiss.). 33 If the defendant challenges the factual basis of the plaintiff's claim, 7 the plaintiff has the burden of going forward with evidence showing that, under exceptions to the FSIA, immunity should not be granted, although the ultimate burden of persuasion remains with the alleged foreign sovereign. Cargill Int'l, 991 F.2d at 1016 (internal citation omitted). 8 In other words, in assessing whether a plaintiff has sufficiently alleged or proffered evidence to support jurisdiction under the FSIA, a district court must review the allegations in the complaint, the undisputed facts, if any, placed before it by the parties, and -- if the plaintiff comes forward with sufficient evidence to carry its burden of production on this issue -- resolve disputed issues of fact, with the defendant foreign sovereign shouldering the burden of persuasion. See id. 34 The district court's review of the evidence before it on a motion to dismiss based on an assertion of sovereign immunity has particular significance because of the necessity of resolving that issue early on if possible. [S]overeign immunity under the FSIA is immunity from suit, not just from liability. Moran v. Kingdom of Saudi Arabia, 27 F.3d 169, 172 (5th Cir. 1994) (citing Gould, Inc. v. Pechiney Ugine Kuhlmann, 853 F.2d 445, 451 (6th Cir. 1988)). Such immunity... is effectively lost if a case is permitted to go to trial. Id. (citation omitted). 35 A district court does not, of course, decide a case on the merits in order to decide if it has jurisdiction. [J]urisdiction is not defeated by the possibility that the averments might fail to state a cause of action. Bell v. Hood, 327 U.S. 678, 682 (1946). But under the FSIA, the district court may examine the defendant's activities to determine whether they confer subject matter jurisdiction on the federal courts. See Verlinden B.V., 461 U.S. at 489. 36 Inevitably, the jurisdiction and merits inquiries overlap to the extent that each requires examination of the applicable substantive law. But we do not think, as Judge Sotomayor suggests in her concurrence, that this makes these inquiries coterminous or empt[ies] of meaning the concept of immunity from suit.... Post at 149 To the contrary, by permitting the district court to go beyond the bare allegations of the complaint, it preserves the effectiveness of the immunity doctrine by avoiding put[ting the foreign government defendant] to the expense of defending what may be a protracted lawsuit without an opportunity to obtain an authoritative determination of its amenability to suit at the earliest possible opportunity. Segni v. Commercial Office of Spain, 816 F.2d 344, 347 (7th Cir. 1987). 9 37 2. The tortious act or omission exception to sovereign immunity. Section 1605(a)(5) exempts foreign states from sovereign immunity in legal actions in which money damages are sought against [it] for personal injury... caused by the tortious act or omission of that foreign state or of any official or employee of that foreign state while acting within the scope of his office or employment provided that the claim is not based upon the exercise or performance or the failure to exercise or perform a discretionary function regardless of whether the discretion be abused. 28 U.S.C. § 1605(a)(5). In assessing whether there is a sufficient allegation or proffer of evidence to support 10 the conclusion that the Malaysian government committed a tortious act or omission in this case, the district court was required, first, to determine what the relevant activities of the Malaysian government were. Second, the court was required to decide whether those acts were tortious under the law of the State of New York, which indisputably would apply to the merits of the claim. 11 If those activities could not render the Malaysian government liable for a tort under New York law, then it remained immune under § 1605(a)(5). And if it remained immune under § 1605(a)(5), there was no jurisdiction over it under § 1330. Finally, if the district court concluded that the plaintiff did allege Malaysian government action that constituted tortious acts under New York law, the court would have been required to decide whether those acts were non-discretionary. Otherwise, Malaysia's sovereign immunity under 28 U.S.C. § 1605(a)(5)(A) prevailed. 38 In making the assessment of whether the plaintiff has alleged actions on the part of the defendant that constitute a tort, the district court may well have taken an excursion into the same legal territory that it would visit in the course of deciding the case on the merits. That is not remarkable. The FSIA itself does not provide any substantive tort law to guide the inquiry. See First Nat'l City Bank v. Banco Para El Comercio Exterior De Cuba, 462 U.S. 611, 620 (1983) (noting that the FSIA was 'not intended to affect the substantive law of liability') (quoting H.R. Rep. No. 94-1487, at 12). It is ordinary tort law that applies to non-immune foreign governments and into which the court's inquiry would properly have been directed. As noted in the legislative history of the FSIA, 'tortious act[s] or omission[s]' for which the FSIA permits suit include causes of actions which are based on strict liability as well as on negligence; the purpose of section 1605(a)(5) is to permit the victim of a traffic accident or other noncommercial tort to maintain an action against [a] foreign state to the extent otherwise provided by law. H.R. Rep. No. 94-1487, at 21, 1976 U.S.C.C.A.N. at 6620 (emphasis added). 39 Courts are therefore regularly called upon to inquire into substantive state or federal law to resolve the threshold question of subject matter jurisdiction under the FSIA. In Zappia Middle East Construction Co., Ltd. v. Abu Dhabi, 215 F.3d 247, 250-52 (2d Cir. 2000), for example, on appeal from the grant of a Rule 12(b)(1) motion to dismiss for lack of subject matter jurisdiction, we held that the applicability of the expropriation exception to the FSIA, 28 U.S.C. § 1605(a)(3), required a determination whether the defendant's conduct violated international law and, in that case, whether principles of corporate law permitted the plaintiff to pierce the corporate veil of a foreign state-owned corporation. We did so even though the same question -- the liability under international law of the foreign government for the behavior of the corporation -- would have been presented on the merits. In First Fidelity Bank, N.A. v. Government of Antigua & Barbuda, 877 F.2d 189, 194 (2d Cir. 1989), on a motion to vacate a default judgment pursuant to Rule 60(b)(4) for lack of subject matter jurisdiction under the FSIA's commercial activities exception, we reviewed New York agency law to decide whether Antigua's ambassador could bind its government by his signature on loan papers. The plaintiff would have been required to meet the same standard and make the same factual showing in order to prevail on the merits with respect to the country's liability for the loan. 12 We held that the district court should have looked to the pleadings and factual submissions, including affidavits, to resolve a factual dispute as to whether the defendant engaged in sufficient commercial activity to permit jurisdiction. See id. at 195-96. We also specifically noted that a dismissal for lack of subject matter jurisdiction in an FSIA case, because it may involve an examination of substantive law, can look like a decision on the merits. Id. at 195. 40 Other circuits have pursued similar inquiries. In Joseph v. Office of the Consulate General of Nigeria, 830 F.2d 1018 (9th Cir. 1987), for instance, the Ninth Circuit held that [t]he'scope of employment' provision of the tortious activity exception essentially requires a finding that the doctrine of respondeat superior applies to the tortious acts of individuals, id. at 1025, and looked to the California law of respondeat superior to determine whether the individual accused of tortious behavior was acting within the scope of his office or employment with respect to the foreign state defendant, see id. at 1025-26. It did so even though a court trying the case on the merits would have had to decide the same respondeat superior question in order to determine whether the defendant government could be held liable for the acts of its employee. Accord, Moran, 27 F.3d at 173 (following Joseph in applying state law applicable to the alleged tort to determine whether the individual alleged tortfeasors were acting within the scope of their employment at the time the events at issue occurred). And in Liu v. Republic of China, 892 F.2d 1419, 1426-31 (9th Cir. 1989), the Ninth Circuit again applied the California doctrine of respondeat superior for similar purposes. The court explicitly noted that [w]hether the [defendant foreign state] is liable under respondeat superior is crucial not only to the issue of the court's jurisdiction, but also to the merits of the appeal from the denial of [the plaintiff's] judgment on the wrongful death claim there being pursued. Id. at 1425. 13 41