Court Opinion

ID: 9561126
Source: CourtListenerOpinion
Date Created: 2023-08-21 18:03:58.812816+00
Date Added: 2024-06-11T09:13:38.586107
License: Public Domain

IKUTA, Circuit Judge,
concurring in part and dissenting in part:
I concur in Sections I, II and III. I disagree with Section IV, however, because in my view we should not take it upon ourselves to write an exhaustion requirement into the Foreign Sovereign Immunities Act (“FSIA”) when Congress has chosen not to. In enacting the FSIA, Congress created uniform and clear standards for litigants seeking to bring lawsuits against foreign sovereigns, and there is no indication that Congress contemplated that courts would impose an additional exhaustion requirement on litigants. Moreover, our case law on prudential exhaustion in the context of the Alien Tort Statute (“ATS”) is both inapposite and non-binding. Because imposing a judge-made exhaustion requirement here is contrary to Congressional intent and does nothing more than create a trap for the unwary, I respectfully dissent.
I
As always, we begin with the plain language of the statute. Prince v. Jacoby, 303 F.3d 1074, 1079 (9th Cir.2002). As the majority acknowledges, the FSIA does not include an exhaustion requirement. Maj. Op. at 1060-61.
Nor is there any evidence that Congress intended to require plaintiffs to exhaust their remedies in a foreign nation before bringing suit under the FSIA. To the contrary, as explained below, the history of the FSIA indicates that Congress intended to create a comprehensive scheme governing lawsuits in federal courts against a foreign sovereign that would establish once and for all a plaintiffs rights, thereby eliminating inconsistency and uncertainty.
Before the enactment of the FSIA, federal courts “deferred to the decisions of the political branches — in particular, those of the Executive Branch — on whether to take jurisdiction over actions against foreign sovereigns and their instrumentalities.” Verlinden B.V. v. Cent. Bank of Nig., 461 U.S. 480, 486, 103 S.Ct. 1962, 76 L.Ed.2d 81 (1983) (citing The Schooner Exchange v. M’Faddon, 7 Cranch 116, 3 L.Ed. 287 (1812)). Before 1952, the Executive Branch generally asked federal courts to recognize the sovereign immunity of friendly sovereigns in all lawsuits. Id. In 1952, however, the State Department *1065changed course, and announced that the Executive Branch had adopted the “restrictive theory” of sovereign immunity,1 under which the Executive Branch would request courts to recognize sovereign immunity only in “suits involving the foreign sovereign’s public acts,” and not in “cases arising out of a foreign state’s strictly commercial acts.” Id. at 487, 103 S.Ct. 1962.
Judicial application of the restrictive theory “proved troublesome” however. Id. Foreign sovereigns often put diplomatic pressure on the State Department to recommend that courts recognize sovereign immunity in cases not fitting the restrictive theory, and the Executive Branch’s involvement in judicial immunity determinations proved inconsistent. Id. These problems resulted in a lack of uniform, predictable standards regarding when federal courts would exercise jurisdiction in lawsuits against foreign sovereigns. See id. at 487-88, 103 S.Ct. 1962; see also Republic of Austria v. Altmann, 541 U.S. 677, 690-91, 124 S.Ct. 2240, 159 L.Ed.2d 1 (2004).
Seeking to remedy these problems, Congress passed the FSIA in 1976. Id. at 691, 124 S.Ct. 2240. The statute’s purpose was “to free the Government from the case-by-case diplomatic pressures, to clarify the governing standards, and to assure litigants that decisions are made on purely legal grounds and under procedures that insure due process.” Verlinden, 461 U.S. at 488, 103 S.Ct. 1962 (internal quotation marks omitted) (citing h.R. Rep. No. 94-1487, at 7 (1976), reprinted in 1976 U.S.C.C.A.N. 6604, 6605).
The FSIA “codif[ied], as a matter of federal law, the restrictive theory of sovereign immunity,” and created “a comprehensive set of legal standards governing claims of immunity in every civil action against a foreign state or its political subdivisions, agencies, or instrumentalities.” Id. Section 2 of the FSIA added § 1330(a) to Title 28, thereby conferring on federal courts subject matter jurisdiction “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 or under any applicable international agreement.” 28 U.S.C. § 1330(a) (2006).2 Section 1604 provides foreign sovereigns with a presumption of immunity,3 and §§ 1604 and 1330(a) “work in tandem: § 1604 bars federal and state courts from exercising jurisdiction when a foreign state is entitled to immunity, and § 1330(a) confers jurisdiction on district courts to hear suits brought by United States citizens and by aliens when a foreign state is not entitled to immunity” by operation of an exception in §§ 1605 to 1607. Argentine Republic v. Amerada Hess Shipping Corp., 488 U.S. 428, 434, 109 S.Ct. 683, 102 L.Ed.2d 818 (1989). The exceptions to immunity in §§ 1605 to 1607 (including actions based on specified *1066commercial activities, rights in personal and real property under certain conditions, and enforcement of certain agreements, among others) generally require “some form of substantial contact with the United States.” Verlinden, 461 U.S. at 490, 103 S.Ct. 1962 (citing 28 U.S.C. § 1605).
If a foreign state is not entitled to sovereign immunity under the FSIA, it is treated like any other private individual litigant (with the exception that punitive damages are unavailable),4 because the state is acting as a private party rather than a sovereign exercising power over its own citizens. See Republic of Arg. v. Weltover, Inc., 504 U.S. 607, 614, 112 S.Ct. 2160, 119 L.Ed.2d 394 (1992) (“A foreign state engaging in ‘commercial’ activities does not exercise powers peculiar to sovereigns; rather, it exercises only those powers that can also be exercised by private citizens.” (internal quotation marks and alterations omitted)); see also Permanent Mission of India to the U.N. v. City of New York, 551 U.S. 193, 200-01, 127 S.Ct. 2352, 168 L.Ed.2d 85 (2007) (holding that a foreign sovereign is not immune from an action for declaratory relief regarding tax liens on the sovereign’s real property, and stating that “property ownership is not an inherently sovereign function”); Weltover, 504 U.S. at 614, 112 S.Ct. 2160 (holding that sovereign immunity does not apply “when a foreign government acts, not as a regulator of a market, but in the manner of a private player within that market”).
The FSIA “governs the types of actions for which foreign sovereigns may be held liable in a court in the United States,” Verlinden, 461 U.S. at 496-97, 103 S.Ct. 1962, but it does not focus on international law claims. Rather, it “merely opens United States courts to plaintiffs with preexisting claims against foreign statesf.]” Altmann, 541 U.S. at 695, 124 S.Ct. 2240; see also id. at 704, 124 S.Ct. 2240 (Scalia, J., concurring) (noting that plaintiffs claims were based primarily in California law and explaining that “the FSIA affects substantive rights only accidentally, and not as a necessary and intended consequence of the law”). The FSIA treats claims arising under international law the same as claims arising under federal or state law, granting federal courts jurisdiction over foreign sovereigns in circumstances that meet the requirements of §§ 1605 to 1607, while granting immunity “in those cases involving alleged violations of international law that do not come within one of the FSIA’s exceptions.” Amerada Hess, 488 U.S. at 439, 443, 109 S.Ct. 683 (holding that federal courts lacked jurisdiction over a Liberian corporation’s suit against Argentina for damage to an oil tanker during war between Great Britain and Argentina, because the FSIA was the sole source of jurisdiction over a foreign state, and it did not authorize jurisdiction in that case); see also Saudi Arabia v. Nelson, 507 U.S. 349, 361, 113 S.Ct. 1471, 123 L.Ed.2d 47 (1993) (holding district court lacked jurisdiction over claims against Saudi Arabia for wrongful arrest, imprisonment, and torture because the “conduct boils down to abuse of the power of its police by the Saudi Government, and however monstrous such abuse undoubtedly may be, a foreign state’s exercise of the power of its police has long been understood for purposes of the restrictive theory as peculiarly sovereign in nature”).
In short, the FSIA established clear and comprehensive standards regarding the limited situations in which Congress deemed it appropriate to allow plaintiffs to sue foreign sovereigns in federal courts. Plaintiffs may bring such suits only in cases having a substantial connection to the United States and involving claims relating to a sovereign’s private or commercial activities. The purpose of this com*1067prehensive framework was to rectify the inconsistency and lack of uniformity that had previously beleaguered litigants. The Supreme Court has emphasized “the importance of developing a uniform body of law in this area,” and that- the FSIA’s “standards control in the courts of the United States and of the States.” Verlinden, 461 U.S. at 489, 103 S.Ct. 1962 .(internal quotation marks omitted).5
II
Given Congress’s intent to establish a uniform and consistent framework for jurisdiction over and litigation involving foreign sovereigns, and given that Congress chose not to include an exhaustion requirement in the FSIA, there appears to be little room for federal courts to impose a new, judge-made requirement on top of the statutory requirements already in the FSIA itself. “[Fjederal courts are vested with a virtually unflagging obligation to exercise the jurisdiction given them,” McCarthy v. Madigan, 503 U.S. 140, 146, 112 S.Ct. 1081, 117 L.Ed.2d 291 (1992) (internal quotation marks omitted), and courts have no authority to devise an additional exhaustion requirement when a statute clearly sets out the prerequisites for federal jurisdiction, see Darby v. Cisneros, 509 U.S. 137, 138, 113 S.Ct. 2539, 125 L.Ed.2d 113 (1993).
A
In imposing a judge-made exhaustion requirement on litigants in the FSIA context, the majority relies primarily on cases addressing exhaustion of administrative remedies. Maj. Op. at 1059-60 (citing McCarthy, 503 U.S. at 145, 112 S.Ct. 1081; Coit Independence Joint Venture v. FSLIC, 489 U.S. 561, 579, 109 S.Ct. 1361, 103 L.Ed.2d 602 (1989); Patsy v. Bd. of Regents of Fla., 457 U.S. 496, 501, 102 S.Ct. 2557, 73 L.Ed.2d 172 (1982); McGee v. United States, 402 U.S. 479, 483 n. 6, 91 S.Ct. 1565, 29 L.Ed.2d 47 (1971)). Because the reasoning in these cases is based on considerations of separation of powers, administrative efficiency and expertise, and other agency-related - concerns,' they provide little assistance in determining whether an exhaustion requirement should be imposed in the FSIA context. See, e.g., McCarthy, 503 U.S. at 145, 112 S.Ct. 1081 (“[T]he exhaustion doctrine recognizes the notion, grounded in deference to Congresses] delegation of authority to coordinate branches of Government, that agencies, not the courts, ought to have primary responsibility for the programs that Congress has charged them to administer.”); accord McGee, 402 U.S. at 484, 91 S.Ct. 1565 (noting that the task for courts in deciding the applicability of the administrative exhaustion requirement is “whether allowing all similarly situated registrants to bypass the administrative avenue in question would seriously impair [the agency’s] ability to perform its functions”) (internal quotation marks and modifications omitted).
To the extent it is appropriate to look to these cases for guidance, they do not support the majority’s conclusion. Rather, they counsel exercising caution and considering carefully whether an exhaustion requirement is consistent with congressional intent. In both McCarthy and Patsy, the Supreme Court looked first for an indication that Congress intended to impose exhaustion requirements upon plaintiffs. See McCarthy, 503 U.S. at 144, 112 S.Ct. 1081 (“[Appropriate deference to Congresses] power to prescribe the basic procedural *1068scheme under which a claim may be heard in a federal court requires fashioning of exhaustion principles in a manner consistent with congressional intent and any applicable statutory scheme.”); Patsy, 457 U.S. at 501-02, 102 S.Ct. 2557 (“[T]he initial question whether exhaustion is required should be answered by reference to congressional intent; and a court should not defer the exercise of jurisdiction under a federal statute unless it is consistent with that intent.”). The Court has rarely discerned such an intent, and indeed has in general declined to require claimants to exhaust administrative remedies when it is not required by statute. See, e.g., Darby, 509 U.S. at 138, 113 S.Ct. 2539 (holding that courts may not impose a prudential exhaustion requirement on litigants under the Administrative Procedure Act when “neither the statute nor agency rules specifically mandate exhaustion as a prerequisite to judicial review.”); McCarthy, 503 U.S. at 149, 112 S.Ct. 1081 (holding that a prisoner was not required to exhaust the Bureau of Prisons’ administrative procedure before making a Bivens claim for money damages); Coit, 489 U.S. at 565, 109 S.Ct. 1361 (holding that creditors were not required to exhaust the Federal Home Loan Bank Board’s administrative claims procedure before bringing suit against a federal bank); Patsy, 457 U.S. at 516, 102 S. Ct. 2557 (holding that a plaintiff claiming discriminatory treatment was not required to exhaust state administrative remedies before bringing a § 1983 claim in federal court).6
Nothing in these administrative law cases suggests that a court should require exhaustion in the FSIA context, where allowing plaintiffs immediate access to federal courts does not raise any risk of undermining the Congressional scheme. To the contrary, imposing an exhaustion requirement not contemplated by Congress is inconsistent with Congress’s intent to have the FSIA’s “comprehensive jurisdictional scheme” provide litigants with “clear guidelines” that were previously lacking. Altmann, 541 U.S. at 699, 700, 124 S.Ct. 2240; see also Darby, 509 U.S. at 147, 113 S.Ct. 2539 (refusing to impose additional exhaustion requirements under the APA, noting that doing so would “transform [the APA provision] from a provision designed to remove obstacles to judicial review of agency action into a trap for unwary litigants.” (internal quotation marks omitted)). When Congress seeks to create such uniformity and clear standards for litigants, see Verlinden, 461 U.S. at 488, 103 S.Ct. 1962, the administrative law cases cited by the majority counsel that we should defer to Congressional intent and decline to impose a new exhaustion requirement that will create a trap for unwary plaintiffs. Cf. El Paso Natural Gas Co. v. Neztsosie, 526 U.S. 473, 485-86, 119 S.Ct. 1430, 143 L.Ed.2d 635 (1999) (holding that imposing a prudential exhaustion requirement was inappropriate where Atom*1069ic Energy Act gave district courts original jurisdiction over certain types of cases, and imposing such a requirement “would invite precisely the mischief ... that the Act sought to avoid”).
B
Nor is the majority’s assertion that Sarei compels us to write an exhaustion requirement into the FSIA persuasive. Maj. Op. at 1062-63; see Sarei v. Rio Tinto, PLC, 550 F.3d 822 (9th Cir.2008) (en banc) (plurality op.). First, the lead opinion in Sarei, which adopts the principle of prudential exhaustion for purposes of the Alien Tort Statute (ATS), is a plurality opinion that is not binding on subsequent panels. See Nevius v. Sumner, 105 F.3d 453, 460 n. 6 (9th Cir.1996).
Second, even as persuasive authority, Sarei is not on point. In Sarei the plaintiffs (who were aliens) brought a lawsuit under the ATS charging a British corporation with violations of customary international law regarding matters of universal concern stemming from its operations in Papua New Guinea. Sarei, 550 F.3d at 825-26.7 As noted by the plurality, this lawsuit had no nexus of any kind with the United States. Id. at 831. The Sarei plurality was concerned that the ATS gave courts potentially sweeping jurisdiction over civil tort actions raising customary international law claims that lacked any nexus to the United States. Id. In order to cabin this supposed limitless jurisdictional reach, the plurality adopted the Supreme Court’s suggestion in Sosa v. Alvarez-Machain, 542 U.S. 692, 733 n. 21, 124 S.Ct. 2739, 159 L.Ed.2d 718 (2004), that federal courts consider adopting a prudential exhaustion requirement as a jurisdiction-limiting principle in the appropriate circumstances. Sarei, 550 F.3d at 824. Sarei held that prudential exhaustion is appropriate in cases “where the United States ‘nexus’ is weak” particularly “with respect to claims that do not involve matters of ‘universal concern.’ ” Id. at 831.
The concerns expressed by the Sarei plurality are not at issue in the FSIA context. There is no analogous concern about unlimited jurisdiction due to the lack of a nexus with the United States: Unlike the ATS (in which courts must create jurisdiction-limiting principles), the FSIA does not give federal courts jurisdiction unless the claim has a nexus to the United States as required by § 1605. In enacting the FSIA, “Congress was aware of concern that our courts might be turned into small international courts of claims, open to all comers to litigate any dispute which any private party may have with a foreign state anywhere in the world.” Verlinden, 461 U.S. at 490, 103 S.Ct. 1962 (internal quotation marks and alteration omitted). The FSIA “protect[s] against this danger not by restricting the class of potential plaintiffs, but rather by enacting substantive provisions requiring some form of substantial contact with the United States.” Id. (citing 28 U.S.C. § 1605).8 Although the Supreme Court recognized that the *1070implications of vast, unchecked federal jurisdiction under the ATS would be “breathtaking,” Sosa, 542 U.S. at 736, 124 S.Ct. 2739, these concerns are simply not present under the FSIA.
Moreover, the concern that jurisdictional overreaching under the ATS could have a negative effect on foreign relations, see Sosa, 542 U.S. at 727, 124 S.Ct. 2739, are not present in the FSIA context. The FSIA’s jurisdictional reach is consistent with that exercised by foreign nations over the United States. Indeed, the Supreme Court noted that Congress “jointed] the majority of other countries by adopting the ‘restrictive theory’ of sovereign immunity[.]” Permanent Mission of India, 551 U.S. at 199, 127 S.Ct. 2352; see also Alfred Dunhill of London, Inc. v. Republic of Cuba, 425 U.S. 682, 702 & n. 15, 96 S.Ct. 1854, 48 L.Ed.2d 301 (1976) (explaining that the United States adopted the restrictive view in part based “on the fact that this approach has been accepted by a large and increasing number of foreign states in the international community,” and listing countries). Further, the Supreme Court has recognized that “subjecting foreign governments to the rule of law in their commercial dealings presents a much smaller risk of affronting their sovereignty than would an attempt to pass on the legality of them governmental acts.” Id. at 703-04, 96 S.Ct. 1854. Here, Cassirer’s case is a property dispute with Spain in its role as a private party, not as a sovereign exercising power over its own citizens.9
In sum, while the Sarei plurality strove to fill in both procedural and substantive gaps in the ATS to cabin its potentially unlimited jurisdiction and avoid impinging on relations with foreign sovereigns, see Sosa, 542 U.S. at 727, 124 S.Ct. 2739, applying the FSIA’s clear language does not require the same creative approach. In creating the FSIA’s comprehensive and detailed scheme, Congress expressed its intent that foreign sovereigns meeting the statutory criteria be subject to suit in federal court, and did not invite us to read in anything more. See 28 U.S.C. § 1602 (“Claims of foreign states to immunity should henceforth be decided by courts of the United States and of the States in conformity with the principles set forth in this chapter.” (emphasis added)); Amerada Hess, 488 U.S. at 434, 109 S.Ct. 683 (concluding that “the text and structure of the FSIA demonstrate Congress’[s] intention that the FSIA be the sole basis for obtaining jurisdiction over a foreign state in our courts” (emphasis added)).
Ill
Nothing in the statutory language, history, or the Supreme Court’s interpretation *1071of the FSIA suggests that we should read an exhaustion requirement into the statute. Doing so will tend to defeat Congress’s goal of achieving consistency and uniformity in suits against foreign sovereigns. The concerns addressed by the Sarei plurality are entirely distinguishable, and in any event, the plurality’s decision to write an exhaustion requirement into the ATS is not binding on us. There is no need to create judge-made law in this context, and therefore, I would refrain from doing so. I respectfully dissent.

. See Letter from Jack B. Tate, Acting Legal Adviser, Department of State, to Acting Attorney General Philip B. Perlman (May 19, 1952), reprinted in 26 Dep’t of State Bull. 984-85 (1952).

. The full text of § 1330(a) states:
The district courts shall have original jurisdiction without regard to amount in controversy of any nonjury civil action against a foreign state as defined in section 1603(a) of this title 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 or under any applicable international agreement.
28 U.S.C. § 1330(a).

. 28 U.S.C. § 1604 (2006) states:
Subject to existing international agreements to which the United States is a party at the time of enactment of this Act a foreign state shall be immune from the jurisdiction of the courts of the United States and of the States except as provided in sections 1605 to 1607 of this chapter.

. See 28 U.S.C. § 1606 (2006).

. The Court has further explained that “Congress’[s] intention to enact a comprehensive statutory scheme is also supported by the inclusion in the FSIA of provisions for venue, 28 U.S.C. § 1391(f), removal, § 1441(d), and attachment and execution, §§ 1609-1611.” Amerada Hess, 488 U.S. at 435 n. 3, 109 S.Ct. 683.

. Only one of the cases cited by the majority held that a claimant must exhaust administrative remedies before initiating suit in federal court, and that case arose in the unique context of the federal Selective Service system. McGee v. United States, 402 U.S. at 485. Before requiring exhaustion, the Court undertook "a discrete analysis of the particular default in question, to see whether there is a governmental interest compelling enough to justify the forfeiting of judicial review.” Id. (internal quotation marks omitted). In this context, the Court determined that a deliberate flouting of the administrative processes would undermine "the scheme of decision-making that Congress has created,” and "jeopardize the interest in full administrative fact gathering and utilization of agency expertise.” Id. at 484, 486, 91 S.Ct. 1565; see also McKart v. United States, 395 U.S. 185, 195, 89 S.Ct. 1657, 23 L.Ed.2d 194 (1969) ("In Selective Service cases, the exhaustion doctrine must be tailored to fit the peculiarities of the administrative system Congress has created.”).

. Specifically, the plaintiffs brought claims alleging:
(1) crimes against humanity resulting from the blockade; (2) war crimes for murder and torture; (3) violation of the rights to life, health, and security of the person resulting from the environmental damage; (4) racial discrimination in destroying villages and the environment, and in working conditions; (5) cruel, inhuman, and degrading treatment resulting from the blockade, environmental harm, and displacement; (6) violation of international environmental rights resulting from building and operating the mine; and (7) a consistent pattern of gross violations of human rights resulting from destruction of the environment, racial discrimination, and [Papua New Guinea] military activities.
Sarei, 550 F.3d at 825-26.

. The Supreme Court has acknowledged that certain provisions of the FSIA do not (on their *1070face) require a nexus to the United States. For example, the Court explained that "Section 1605(a)(1), which provides that sovereign immunity shall not apply if waived, may be seen as an exception to the normal pattern of the Act, which generally requires some form of contact with the United States.” Verlinden, 461 U.S. at 491 n. 15, 103 S.Ct. 1962. In noting "[w]e need not decide whether, by waiving its immunity, a foreign state could consent to suit based on activities wholly unrelated to the United States,” id., the Court hinted that such a nexus might nevertheless be necessary in order for a federal court to have jurisdiction over a foreign sovereign under the FSIA.

. Contrary to the majority’s assertion, Cassirer does not bring claims "based on non-domestic, international law,” Maj. Op. at 1062 n. 20, but rather brings state common-law claims of conversion. Indeed, allegations similar to those in Cassirer’s complaint have been made, and adjudicated, in lawsuits between two private persons. See, e.g., DeWeerth v. Baldinger, 836 F.2d 103 (2d Cir.1987) (painting owner’s heir brought conversion suit against good-faith purchaser for return of oil painting by Claude Monet, allegedly stolen during the Second World War).