Court Opinion

ID: 1009092
Source: CourtListenerOpinion
Date Created: 2013-07-04 19:50:28.527442+00
Date Added: 2024-06-11T11:09:01.263654
License: Public Domain

UNPUBLISHED

UNITED STATES COURT OF APPEALS
                FOR THE FOURTH CIRCUIT

WORLD WIDE DEMIL, L.L.C.,              
formerly known as Buck
Environmental Technologies,
L.L.C.,
                Plaintiff-Appellant,             No. 02-1170
                 v.
NAMMO, A.S.,
                Defendant-Appellee.
                                       
           Appeal from the United States District Court
        for the Eastern District of Virginia, at Alexandria.
               Leonie M. Brinkema, District Judge.
                         (CA-00-1992-A)

                       Argued: October 30, 2002

                      Decided: November 22, 2002

    Before WILKINS, NIEMEYER, and KING, Circuit Judges.

Affirmed by unpublished per curiam opinion.

                             COUNSEL

ARGUED: James Arthur DeVita, WORLD WIDE DEMIL, L.L.C.,
McLean, Virginia, for Appellant. Richard Murray, POMPAN, MUR-
RAY & WERFEL, P.L.C., Alexandria, Virginia, for Appellee.
2                   WORLD WIDE DEMIL v. NAMMO
Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).

                              OPINION

PER CURIAM:

   This appeal stems from a series of interactions between Plaintiff
World Wide Demil, L.L.C. ("WWD")1 and Defendant Nammo, A.S.
("Nammo") during the fall and winter of 1998. WWD alleges that
Nammo breached oral and written agreements into which Nammo and
WWD had entered, tortiously interfered with WWD’s contracts and
business expectations, and conspired to injure WWD’s reputation,
trade, and business. The district court awarded summary judgment to
Nammo on all counts, and WWD has appealed. We possess jurisdic-
tion pursuant to 28 U.S.C. § 1291. As explained below, we affirm.

                                   I.

   The relevant facts are adequately set forth in the district court’s
opinion. World Wide Demil, L.L.C. v. Nammo, A.S., No. 00-1992-A,
Mem. Op. at 1-6 (E.D. Va. Jan. 18, 2002) (the "Opinion"). We write
solely to address Nammo’s contention that this action is barred by the
Foreign Sovereign Immunities Act, 28 U.S.C. § 1602 et seq. (the
"FSIA"). Subject to several exceptions, the FSIA deprives federal and
state courts of jurisdiction to adjudicate claims against foreign states
or their instrumentalities. 28 U.S.C. §§ 1603-1607. A foreign state or
instrumentality is defined to include any entity, a majority of whose
shares are owned by a foreign country or governmental arm. 28
U.S.C. § 1603(b). An entity that comes within the protection of the
FSIA "is entitled to sovereign immunity unless the plaintiff demon-
strates that one of the exceptions to sovereign immunity applies." In
re Tamimi, 176 F.3d 274, 278 (4th Cir. 1999). If no exception applies,
then courts "lack[ ] both statutory subject-matter jurisdiction and . . .
    1
  Until February of 1999, WWD was known as "Buck Environmental
Technologies." For simplicity, we refer to the company throughout as
WWD.
                    WORLD WIDE DEMIL v. NAMMO                         3
personal jurisdiction." Verlinden B.V. v. Cent. Bank of Nigeria, 461
U.S. 480, 485 n.5 (1983).

   We review applications of the FSIA de novo. Tamimi, 176 F.3d at
277. Nammo is a multinational joint venture between the government
of Norway, the government of Finland, and SAAB, AB, a publicly
held Swedish company. At the time of the acts that are the subject of
this suit, the Royal Ministry of Trade and Industry of Norway owned
45% of Nammo; Patria Industries, a governmental instrumentality
wholly owned by the Government of Finland, owned 27.5%; and
SAAB, AB, owned the remaining 27.5%. Thus, when the ownership
interests of Norway and Finland are "pooled," it appears that a major-
ity of Nammo’s shares were owned by foreign governments or their
instrumentalities. Nammo contends that, because a majority of
Nammo’s shares were owned by foreign governments or their instru-
mentalities, Nammo is immune from suit under the FSIA.

   Without deciding the propriety of such "pooling" of shares under
the FSIA, and without deciding whether Nammo’s ownership through
wholly government-owned companies can render Nammo a protected
"instrumentality of a foreign state" for purposes of 28 U.S.C. § 1603,
we conclude that, with respect to WWD’s breach of confidentiality
claim, Nammo has implicitly waived any immunity to which it might
otherwise have been entitled; and that, with respect to the remaining
claims, Nammo falls outside of the FSIA by virtue of the Commercial
Activities Exception.

                                  A.

   Under 28 U.S.C. § 1605(a)(1), "[a] foreign state shall not be
immune from the jurisdiction of courts of the United States or of the
States in any case . . . in which the foreign state has waived its immu-
nity either explicitly or by implication . . . ." As this court has
observed, "[w]aiver under the FSIA is rarely accomplished by impli-
cation." Tamimi, 176 F.3d at 278. However, in the legislative history
of the FSIA, Congress specified three core examples of implicit waiv-
ers: (1) agreement to arbitration in another country; (2) agreement that
a contract is governed by the law of a particular country; or (3) filing
a responsive pleading without raising the defense of sovereign immu-
nity. See id. (citing H.R. Rep. No. 1487, 94th Cong., 2d Sess. 18,
4                    WORLD WIDE DEMIL v. NAMMO
reprinted in 1976 U.S. Code Cong. & Admin. News 6604, 6617; S.
Rep. No. 1310, 94th Cong., 2d Sess. 18). With respect to WWD’s
claim of breach of confidentiality, the second form of waiver ——
agreement that a contract is governed by the law of a particular coun-
try —— is implicated here.2

   On November 6, 1998, Nammo and WWD entered into the Confi-
dentiality Agreement, which contained a choice of law provision
selecting the Commonwealth of Virginia as the forum whose law
would govern any disputes that might arise from the Agreement.3 This
clause constitutes an implicit waiver of any immunity to which
Nammo might otherwise have been entitled with respect to WWD’s
claim that Nammo breached the Confidentiality Agreement. See
Eckert Int’l Inc. v. Government of Fiji, 32 F.3d 77, 80 (4th Cir. 1994)
("[A] choice of law provision constitutes an implied waiver of . . .
sovereign immunity."). Thus, the court had jurisdiction to entertain
the breach of confidentiality count.

                                   B.

   A waiver of FSIA immunity with respect to one claim does not
constitute a waiver with respect to other claims brought in the same
suit. See World Wide Minerals, Ltd. v. Republic of Kazakhstan, 296
    2
     WWD argues that the third form of waiver also applies —— that
Nammo has waived any immunity to which it would be entitled because
it failed to include the FSIA defense in its July 13, 2001, Renewed
Motion to Dismiss. However, a motion to dismiss is not a responsive
pleading that triggers the third exception to FSIA immunity. In re Repub-
lic of Philippines, 2002 WL 31429850 (9th Cir. Oct. 31, 2002); see also
Fed. R. Civ. P. 7 (distinguishing between "motions" and "pleadings");
Mellon Bank, N.A. v. Ternisky, 999 F.2d 791, 795 (4th Cir. 1993) (hold-
ing that a motion to dismiss is not a "pleading"). Because Nammo’s
August 7, 2001, Answer constituted its first "responsive pleading," and
because the Answer included the FSIA defense, Nammo did not waive
FSIA immunity by delinquency in asserting the defense.
   3
     The forum selection clause of the confidentiality agreement provides:
"Should individual terms of this agreement be or become completely or
partially ineffective, the remaining terms will continue to be valid, and
our obligations under this agreement will be governed by the laws of the
State of Virginia."
                     WORLD WIDE DEMIL v. NAMMO                           5
F.3d 1154, 1164 (D.C. Cir. 2002). Thus, although Nammo has implic-
itly waived its immunity from claims springing from the Confidential-
ity Agreement, we must also assess whether the court had jurisdiction
to entertain WWD’s other claims against Nammo (specifically, tor-
tious interference with contract, tortious interference with prospective
business advantage, conspiracy, and breach of oral contract). Even if
FSIA immunity attached, the court nonetheless had jurisdiction,
because WWD’s remaining claims are based on Nammo’s commer-
cial activities. A portion of those activities occurred here in the United
States; and a portion occurred abroad, but directly affected an Ameri-
can corporation.

   Under the Commercial Activity Exception to the FSIA, 28 U.S.C.
§ 1605(a)(2),

     [a] foreign state shall not be immune from the jurisdiction
     of courts of the United States or of the States in any case . . .
     in which the action is based upon a commercial activity car-
     ried 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 . . . .

The Exception applies "when a foreign government acts, not as regu-
lator of a market, but in the manner of a private player." Republic of
Argentina v. Weltover, Inc., 504 U.S. 607, 614 (1992). The fact that
a foreign state has engaged in commercial activities does not neces-
sarily bring the Exception into play; rather, the Exception applies only
if the plaintiff’s claim is "based upon" those activities. Saudi Arabia
v. Nelson, 507 U.S. 349, 357-59 (1993). However, even a single com-
mercial act, such as negotiating or entering into a contract, is suffi-
cient to trigger the Exception if the act is of a type that a private
person would customarily engage in for profit. S & Davis Int’l, Inc.
v. Yemen, 218 F.3d 1292, 1302 (11th Cir. 2000) (citing legislative his-
tory); Gould, Inc. v. Pechiney Ugine Kuhlmann, 853 F.2d 445,452-53
(6th Cir. 1988). The act need not occur in the United States, so long
as it has a "direct effect" here. 28 U.S.C. § 1605(a)(2). And that effect
need be neither substantial nor foreseeable. See Republic of Argen-
6                   WORLD WIDE DEMIL v. NAMMO
tina, 504 U.S. at 618 ("[W]e reject the suggestion that § 1605(a)(2)
contains any unexpressed requirement of ‘substantiality’ or ‘foreseea-
bility.’").

   Nammo unquestionably engaged in commercial activities in the
United States, and those activities form the basis for WWD’s breach
of oral contract claim. Specifically, Nammo engaged in negotiations
with WWD in McLean, Virginia, on November 22 and 23, 1998;
WWD alleges that those negotiations culminated in an oral contract.
Hence, it is those Virginia negotiations that form the basis for
WWD’s breach of oral contract claim. Consequently, the Commercial
Activities Exception embodied in § 1605(a)(2) applies and Nammo is
deprived of any FSIA protection to which it might otherwise have
been entitled for the breach of oral contract count.

   Nammo also is alleged to have engaged in commercial activities
outside of the United States that caused a direct and injurious effect
on WWD, an American corporation. Those activities form the basis
for WWD’s remaining claims of tortious interference with contract,
tortious interference with prospective business advantage, and con-
spiracy. Specifically, Nammo is alleged to have tortiously interfered
with WWD’s contracts and prospective business advantage when, in
Norway on February 26, 1999, it reneged on an oral agreement with
WWD, depriving WWD of access to the subcontractor on which
WWD was relying in order both to perform the Air Force Contract,
and to secure the Army Contract. Furthermore, Nammo is alleged to
have conspired with the German bankruptcy receiver of a WWD sub-
contractor to injure WWD in its reputation, trade, and business when,
in Germany on January 26, 1999, Nammo induced the receiver to
inform the United States government both that WWD and the subcon-
tractor no longer had a binding subcontract, and that WWD was in a
precarious financial position. These are the acts not of a sovereign,
but of a private market player. Because they are alleged to have
inflicted direct and immediate harm on WWD, and because they are
the basis for WWD’s claims against Nammo, these extraterritorial
commercial acts again trigger the Commercial Activities Exception.
Nammo is accordingly deprived of any FSIA protection to which it
might otherwise have been entitled for the tortious interference and
conspiracy counts. Consequently, both the court below and this court
                     WORLD WIDE DEMIL v. NAMMO                           7
have subject matter jurisdiction to entertain WWD’s complaint
against Nammo.

                                    II.

   For the reasons set forth in the district court’s Opinion, which we
are content to adopt, we affirm the district court’s award of summary
judgment in favor of Nammo.4

                                                             AFFIRMED
  4
   WWD also maintains on appeal that the court abused its discretion in
refusing to permit WWD to supplement its Rule 26(a)(2) expert disclo-
sures after the time specified in the court’s scheduling order had expired.
See World Wide Demil, L.L.C. v. Nammo, A.S., No. 00-1992-A, Order at
1 (E.D. Va. Nov. 30, 2001). A trial court has wide latitude in imposing
sanctions on parties who fail to comply with pretrial orders and proce-
dures. See Rambus Inc. v. Infineon Techs., A.G., 145 F. Supp. 2d 721,
736 (E.D. Va. 2001). We see no abuse of discretion in this ruling, and
we affirm the court’s handling of the matter without further discussion.