Court Opinion

ID: 4542781
Source: CourtListenerOpinion
Date Created: 2020-06-19 15:00:29.736117+00
Date Added: 2024-06-11T12:48:02.609783
License: Public Domain

United States Court of Appeals
          FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued October 4, 2019                   Decided June 19, 2020

                         No. 18-7154

     PROCESS AND INDUSTRIAL DEVELOPMENTS LIMITED,
                       APPELLEE

                               v.

     FEDERAL REPUBLIC OF NIGERIA AND MINISTRY OF
   PETROLEUM RESOURCES OF THE FEDERAL REPUBLIC OF
                      NIGERIA ,
                    APPELLANTS

         Appeal from the United States District Court
                 for the District of Columbia
                     (No. 1:18-cv-00594)

    Joseph D. Pizzurro argued the cause for appellants. With
him on the briefs were Kevin A. Meehan and Juan O. Perla.

     Michael S. Kim argued the cause for appellee. With him
on the brief were Josef M. Klazen and Darryl G. Stein.

    Before: PILLARD, WILKINS, and KATSAS, Circuit Judges.

    Opinion for the Court filed by Circuit Judge KATSAS.

   KATSAS, Circuit Judge: This appeal presents the question
whether a district court, in considering a petition to confirm an
                               2
arbitral award against a foreign sovereign, may order the
sovereign to brief the merits before resolving a colorable
assertion of immunity. We hold that such an order is
immediately appealable and that the immunity question must
be resolved first.

                               I

    In 2010, Process and Industrial Developments Ltd. (P&ID)
contracted with the Federal Republic of Nigeria to build and
operate a natural gas processing facility in the Niger Delta.
Nigeria agreed to supply gas for the plant and to build
supporting infrastructure. The deal fell apart; P&ID never
broke ground on the plant, and Nigeria never supplied any gas.
By its terms, the contract was governed by Nigerian law. It
provided for arbitration in London, in accordance with the
Nigerian Arbitration and Conciliation Act.

      P&ID sought arbitration. The arbitral panel bifurcated the
proceeding and found Nigeria liable for breach of contract.
Nigeria unsuccessfully challenged the liability determination
in the London Commercial Court. Nigeria then challenged the
determination in the Federal High Court of Nigeria, which set
it aside as inconsistent with Nigerian law. P&ID, which never
appeared in the Nigerian proceeding, asked the arbitral panel
to hold that the Nigerian court had no jurisdiction to set aside
the award. The panel agreed and, over Nigeria’s objection,
proceeded to consider damages. It awarded $6.597 billion plus
interest, though a dissent would have limited the damages to
$250 million. The award now stands at about $9 billion.

    In 2018, the dispute reached the United States. P&ID filed
a petition to confirm the award under the Federal Arbitration
Act (FAA), which provides for the recognition and
enforcement of awards governed by the Convention on the
Recognition and Enforcement of Foreign Arbitral Awards
                               3
(New York Convention). 9 U.S.C. § 201. Nigeria moved to
dismiss for lack of subject-matter jurisdiction. It invoked the
Foreign Sovereign Immunities Act (FSIA), which makes
foreign sovereigns generally “immune from the jurisdiction of
the courts of the United States.” 28 U.S.C. § 1604. In its
petition, P&ID had argued that the waiver and arbitration
exceptions to the FSIA apply to this case. In the motion to
dismiss, Nigeria argued that neither exception applies.

      Instead of responding to Nigeria’s motion to dismiss,
P&ID moved for an order requiring Nigeria to present all its
defenses—both jurisdictional and merits—in a single response
to the petition to confirm. P&ID argued that the FAA, in
providing that petitions to confirm be treated as motions rather
than pleadings, required joint briefing of immunity and merits
issues. Nigeria countered that the FAA imposed no such
requirement and that the FSIA required a threshold immunity
determination before Nigeria could be compelled to litigate the
merits. The district court sided with P&ID and ordered Nigeria
to file a response containing its “merits arguments” in addition
to its immunity and other jurisdictional defenses. Process &
Indus. Devs. Ltd. v. Fed. Republic of Nigeria, No. 18-594, 2018
WL 8997443, at *3 (D.D.C. Oct. 1, 2018) (P&ID).

     Nigeria filed a notice of appeal. P&ID asked the district
court to forge ahead anyway because the appeal was frivolous.
The district court refused, concluding that it was unresolved
whether a foreign sovereign could seek immediate review of an
order requiring it to brief the merits before its immunity
assertion was resolved. P&ID then moved this Court to dismiss
the appeal for lack of jurisdiction. A motions panel referred
P&ID’s motion to this merits panel.

   Nigeria’s appeal raises two related questions. The first is
whether we have jurisdiction to review what P&ID
                                4
characterizes as nothing more than a briefing order. The
second is whether that order, by requiring Nigeria to defend the
merits while its assertion of sovereign immunity remains
unresolved, impermissibly risked abridging the immunity.

                                II

     This appeal is about jurisdiction—both ours and that of the
district court. We must begin with the question of our
jurisdiction. See, e.g., Steel Co. v. Citizens for a Better Env’t,
523 U.S. 83, 94 (1998); Mansfield, Coldwater & Lake Mich.
Ry. v. Swan, 111 U.S. 379, 382 (1884). It turns on whether the
district court’s ruling fell within the collateral-order doctrine.

                               A

     With narrow exceptions, we have jurisdiction to review
only “final decisions” of the district courts. 28 U.S.C. § 1291.
Ordinarily, a final decision is one that “ends the litigation on
the merits and leaves nothing for the court to do but execute the
judgment.” Catlin v. United States, 324 U.S. 229, 233 (1945).
But under the collateral-order doctrine, section 1291 also
applies to interlocutory orders “that are conclusive, that resolve
important questions separate from the merits, and that are
effectively unreviewable on appeal from the final judgment in
the underlying action.” Mohawk Indus. Inc. v. Carpenter, 558
U.S. 100, 106 (2009) (quotation marks omitted).

     Applying these criteria, this Court repeatedly has held that
the collateral-order doctrine applies to the denial of a motion to
dismiss on the ground of foreign sovereign immunity. See,
e.g., Kilburn v. Socialist People’s Libyan Arab Jamahiriya,
376 F.3d 1123, 1126 (D.C. Cir. 2004); Price v. Socialist
People’s Libyan Arab Jamahiriya, 294 F.3d 82, 91 (D.C. Cir.
2002); Foremost-McKesson, Inc. v. Islamic Republic of Iran,
905 F.2d 438, 443 (D.C. Cir. 1990). In each of these cases, we
                                 5
explained that foreign sovereign immunity provides not only a
defense from liability but also a shield “from trial and the
attendant burdens of litigation.” E.g., Kilburn, 376 F.3d at
1126. So if the immunity is wrongly denied at the outset of a
case, it cannot be vindicated after final judgment. See id.

     In this case, the district court ordered Nigeria to present its
immunity and merits arguments in one opposition to the
petition to confirm. P&ID contends that the collateral-order
doctrine does not apply because the court simply deferred
ruling on the immunity defense rather than conclusively
rejecting it. But the court did conclusively hold that, at least in
the context of petitions to confirm arbitral awards, immunity
issues need not be resolved until after the merits have been fully
briefed. See P&ID, 2018 WL 8997443, at *2–3. Then, in
refusing to lift a stay pending appeal, the court again stressed
that it had decided Nigeria could be “forced to submit a merits
defense” while its assertion of immunity remained pending.
J.A. 236. On appeal, Nigeria contends that an immunity
defense must be resolved before a foreign sovereign can be
compelled to defend on the merits. Because the district court
conclusively rejected that contention, the first prong of the
collateral-order doctrine is satisfied.

     Our decision in Phoenix Consulting, Inc. v. Republic of
Angola, 216 F.3d 36 (D.C. Cir. 2000), is instructive. There, the
district court denied a motion to dismiss on the ground of
foreign sovereign immunity. The court concluded that the
immunity question turned on disputed facts which, together
with facts bearing on the merits, would need to be proven either
on summary judgment or at trial. Id. at 39. On appeal, we held
that the collateral-order doctrine was satisfied, reversed the
district court’s order, and remanded with instructions for the
court to resolve the immunity question at the outset, even if that
would require separate rounds of jurisdictional and merits
                                6
discovery. Id. at 39–41. We did not question our jurisdiction
on the theory that the district court had merely deferred its final
immunity determination until a later stage of the case. Instead,
we stressed that the order had conclusively denied the asserted
“immunity from suit,” and we reviewed it on that basis. Id. at
39. To be sure, the order in Phoenix Consulting was styled as
denying immunity pending further factual development,
whereas the order here is styled as merely deferring a ruling on
immunity. But the effect of the orders is identical—forcing a
foreign sovereign to defend litigation on the merits despite an
unresolved assertion of immunity. And appealability turns on
what the order at issue does, not what it is called. See, e.g.,
Zapata v. Melson, 750 F.3d 481, 484 (5th Cir. 2014); Workman
v. Jordan, 958 F.2d 332, 336 (10th Cir. 1992).

     The second and third prongs of the collateral-order
doctrine are also satisfied. P&ID does not dispute this point,
but we must independently confirm our jurisdiction. See, e.g.,
Steel Co., 523 U.S. at 95–96. As to the second prong, we have
held that an assertion of foreign sovereign immunity presents
important questions distinct from the merits of a case. See, e.g.,
Kilburn, 376 F.3d at 1126. As to the third prong, we have held
that an improper rejection of foreign sovereign immunity is
effectively unreviewable on an appeal from final judgment.
See, e.g., id. To be sure, an outright denial of immunity may
inflict greater harms on a foreign sovereign than an order
merely subjecting it to litigation burdens at the early stages of
a case. But subjecting a foreign sovereign to litigation burdens
is precisely what triggers the second and third prongs of the
collateral-order doctrine in this context, and it is precisely what
occurred here.

    Other courts of appeals have reached similar conclusions.
In Butler v. Sukhoi Co., 579 F.3d 1307 (11th Cir. 2009), the
Eleventh Circuit held that the collateral-order doctrine applied
                                7
to an order (i) denying as “premature” a motion to dismiss on
the ground of foreign sovereign immunity and (ii) requiring the
foreign sovereign to submit to jurisdictional discovery and to
file an answer. Id. at 1311. Likewise, in United States v.
Moats, 961 F.2d 1198 (5th Cir. 1992), the Fifth Circuit held
that the collateral-order doctrine applied to an order denying a
motion to dismiss on unspecified grounds, because the “effect
of the order” was to require the foreign sovereign “to defend
the lawsuit.” Id. at 1201. Here as well, the district court forced
merits litigation while a threshold immunity assertion was left
unresolved.

     P&ID further contends that orders imposing litigation
burdens on foreign sovereigns should be reviewable through
mandamus, not the collateral-order doctrine. But mandamus is
an option of last resort, available only if a party lacks adequate
alternative remedies. See, e.g., Cheney v. U.S. Dist. Court, 542
U.S. 367, 380–81 (2004); In re Stone, 940 F.3d 1332, 1338
(D.C. Cir. 2019). Because the collateral-order doctrine is
available to Nigeria here, mandamus is not.

     P&ID cites Mohawk Industries and In re Papandreou, 139
F.3d 247 (D.C. Cir. 1998), to suggest the opposite—i.e., that
because mandamus is available, the collateral-order doctrine is
not. Neither case supports that suggestion. In Mohawk
Industries, the Supreme Court held that the collateral-order
doctrine does not apply to orders rejecting assertions of
attorney-client privilege, because those orders are effectively
reviewable in appeals from final judgments. 558 U.S. at 606–
07. Only after that ruling did the Court observe that mandamus
might be available in “extraordinary circumstances.” Id. at
607. Papandreou granted mandamus to rein in a discovery
order requiring a foreign cabinet minister to sit for a deposition.
139 F.3d at 249–50.          But that order addressed only
jurisdictional discovery on the immunity issue; it did not
                               8
require the foreign sovereign to litigate the merits. See id.
Accordingly, the collateral-order doctrine would not have
applied under the reasoning that we adopt here.

     Because the district court conclusively rejected Nigeria’s
assertion of immunity from having to defend the merits in this
case, the collateral-order doctrine applies. We thus have
jurisdiction to review the district court’s order.

                               B

     P&ID argues that we nonetheless lack jurisdiction because
Nigeria’s underlying assertion of immunity is not colorable.
Such a colorability requirement has some doctrinal appeal: If
an asserted federal question can be too insubstantial to support
original jurisdiction, see Bell v. Hood, 327 U.S. 678, 682–83
(1946), then perhaps an immunity assertion can be too
insubstantial to support appellate jurisdiction. Moreover, a
colorability requirement makes practical sense, to prevent
parties from prolonging litigation by taking obviously meritless
interlocutory appeals.

     P&ID does not contend that the question Nigeria asks us
to resolve—whether a foreign sovereign can be forced to brief
the merits while its immunity assertion remains unresolved—
lacks even colorable merit. Instead, P&ID contends that
Nigeria’s underlying immunity assertion must also be
colorable. We agree with P&ID that the assertion must be
colorable, but we conclude that it is.

     To overcome Nigeria’s assertion of immunity, P&ID first
invokes the FSIA’s arbitration exception. It provides that a
foreign state is not immune from suit in a case brought to
“confirm an award” made under an arbitration agreement
between the foreign state and a private party, if the award is
governed by a treaty like the New York Convention. See 28
                               9
U.S.C. § 1605(a)(6); Creighton Ltd. v. Gov’t of Qatar, 181
F.3d 118, 123–24 (D.C. Cir. 1999). Nigeria has at least a
colorable argument that a confirmable “award” under the
arbitration exception cannot include an award set aside by a
court with supervisory jurisdiction over the arbitration—just
as, for example, an executable “judgment” under Federal Rule
of Civil Procedure 69(a)(1) presumably could not include a
judgment reversed by the appropriate court of appeals. The
New York Convention makes this point explicit. It provides
that confirmation may be refused if an arbitral award “has been
set aside or suspended by a competent authority of the country
in which, or under the law of which, that award was made.”
N.Y. Conv. art. V(1)(e); see TermoRio S.A. E.S.P. v. Electranta
S.P., 487 F.3d 928, 936 (D.C. Cir. 2007). It is at least possible
that such a judicial order establishes an immunity defense as
well as a merits one.

     P&ID responds that the High Court of Nigeria did not have
supervisory jurisdiction over the arbitration, and thus could not
permissibly set aside the award, because the parties had agreed
to arbitrate in London. We are not so sure. As noted above,
the New York Convention recognizes that an award may be
“set aside or suspended” by courts of the sovereign whose
substantive law governs the arbitration, as well as by courts of
the sovereign where the arbitration takes place. Here, that rule
would seem to include the courts of Nigeria.

     Alternatively, P&ID invokes the FSIA’s waiver exception,
which applies to any case in which the foreign sovereign “has
waived its immunity either explicitly or by implication.” 28
U.S.C. § 1605(a)(1). P&ID contends that Nigeria, by signing
the New York Convention and agreeing to arbitrate this dispute
in another signatory country, waived its immunity by
implication. Creighton contains language supporting that
position, but our holding was that the arbitration exception did
                                  10
not apply because the defendant there had not signed the
Convention. See 181 F.3d at 123. Another of our decisions
holds that the waiver exception does apply if the foreign
sovereign has signed the Convention. Tatneft v. Ukraine, 771
F. App’x 9 (D.C. Cir. 2019) (per curiam). But Tatneft was an
unpublished disposition, so it does not bind future panels. In
re Grant, 635 F.3d 1227, 1232 (D.C. Cir. 2011).

     For these reasons, we conclude that Nigeria’s immunity
defense is at least colorable enough to support appellate
jurisdiction. We need not, and thus do not, determine whether
Nigeria will ultimately prevail on that defense.1

                                  III

    We now consider whether the district court erred in
requiring Nigeria to defend the merits before resolving its
colorable immunity assertion. We conclude that it did.

                                  A

     It is axiomatic that foreign sovereigns enjoy immunity
from litigation burdens as well as from the entry of adverse
judgments. The Supreme Court repeatedly has explained that
the “basic objective” of foreign sovereign immunity is “to free
a foreign sovereign from suit.” Bolivarian Republic of
Venezuela v. Helmerich & Payne Int’l Drilling Co., 137 S. Ct.

     1
         P&ID asks us to conclusively resolve the underlying
immunity issues in this appeal. But the district court did not address
those issues, and we generally decline to consider questions not
passed upon below. Liberty Prop. Trust v. Republic Props. Corp.,
577 F.3d 335, 341 (D.C. Cir. 2009). Resolving the immunity
questions here would be particularly inappropriate given their
complexity and the limited attention that they received in the briefing
on appeal.
                                11
1312, 1317 (2017); see Dole Food Co. v. Patrickson, 538 U.S.
468, 479 (2003). Likewise, we repeatedly have described the
immunity as one “from trial and the attendant burdens of
litigation.” Kilburn, 376 F.3d at 1126; Price, 294 F.3d at 91;
Foremost-McKesson, 905 F.2d at 443. Another circuit has
described it as an immunity “from the burdens of becoming
involved in any part of the litigation process.” Moats, 961 F.2d
at 1203.

     Because the immunity protects foreign sovereigns from
suit, it must be decided “[a]t the threshold of every action” in
which it is asserted. Verlinden B.V. v. Cent. Bank of Nigeria,
461 U.S. 480, 493–94 (1983). In Helmerich & Payne, the
Supreme Court instructed that, even where the immunity turns
on disputed factual questions, a court must “reach a decision”
on it “as near to the outset of the case as is reasonably possible.”
137 S. Ct. at 1317. Likewise, in Phoenix Consulting, we held
that a district court must resolve immunity assertions “as early
in the litigation as possible,” even if that requires jurisdictional
discovery and factual resolution of immunity questions to take
place before the sovereign is required to defend the merits. 216
F.3d at 39–40. We explained that “to defer the question is to
‘frustrate the significance and benefit of entitlement to
immunity from suit.’” Id. at 39 (quoting Foremost-McKesson,
905 F.2d at 449). Confirming this point, the Supreme Court
has said that “consideration of the merits [is] itself an
infringement on foreign sovereign immunity.” Republic of
Philippines v. Pimentel, 553 U.S. 851, 864 (2008).

                                 B

    The district court gave two reasons why, in its view,
Nigeria could be forced to defend the merits despite its
unresolved immunity assertion. We disagree with both.
                              12
                               1

     The district court reasoned that the FAA requires
collapsing the immunity and merits inquiries. The FAA
provides that “[a]ny application to the court hereunder shall be
made and heard in the manner provided by law for the making
and hearing of motions.” 9 U.S.C. § 6. The district court held
that this provision requires all immunity and merits questions
to be addressed in a single round of briefing on the petition to
confirm. P&ID, 2018 WL 8997443, at *1.

     This was error. By subjecting petitions for confirmation
to “the law for the making and hearing of motions,” the FAA
simply directs that the initial filing of the party seeking
confirmation must be treated as a motion rather than a pleading.
See TermoRio, 487 F.3d at 940. But nothing in the FAA—or
in motions practice—prohibits the party against whom a
motion is made from filing countervailing motions. To the
contrary, the FAA is silent on that point, and Federal Rule of
Civil Procedure 7(b) permits any party to file a written motion
stating the relief sought and the grounds for seeking it. So, we
may treat Nigeria’s motion to dismiss, which was styled as
responding to a pleading under Rule 12(b)(1), as a proper
motion under Rule 7(b).

     We recognize that the FAA seeks to streamline the
procedures for confirming arbitral awards. That is an
admirable goal, and it might warrant consolidated briefing
where no immunity is at issue. But the FAA does not prohibit
the filing of defense motions. Accordingly, it does not prevent
a foreign sovereign from seeking what the FSIA guarantees—
resolution of an immunity assertion before the sovereign can
be compelled to defend the merits.

    The district court read TermoRio to suggest a contrary
result. There, a foreign sovereign opposed confirmation of an
                               13
arbitral award on various jurisdictional and merits grounds.
The sovereign raised these issues in a motion to dismiss. 487
F.3d at 932. On appeal, the private party argued that the district
court had erred in resolving disputed factual issues bearing on
the merits. In rejecting that contention, we held that “motions
to enforce arbitral awards should proceed under motions
practice, not notice pleading.” Id. at 940. And under motions
practice, the district court properly considered the evidentiary
materials submitted by the parties. See id. We further noted
that there was no error even under pleading rules—both parties
“had ample time to submit documents outside of the
pleadings,” so the motion to dismiss for failure to state a claim
could have been converted to and resolved as a motion for
summary judgment. Id. at 940–41.

     TermoRio does not support the district court’s order in this
case. We did not hold that a party opposing confirmation may
not seek affirmative relief through a motion of its own. And
we did not hold that the FAA requires simultaneous briefing of
immunity and merits issues. Indeed, the foreign sovereign had
abandoned its immunity defense on appeal, see 487 F.3d at
932, so we decided no question about how and when that
defense should be resolved. In the district court, the foreign
sovereign had chosen to brief immunity and merits issues in a
single motion to dismiss. A foreign sovereign remains free to
oppose a confirmation petition in that manner. And because a
foreign sovereign may forgo its entitlement to a threshold
determination of immunity—as did the sovereign in TermoRio
by opting to brief all of its defenses together—that choice says
nothing about whether the FAA requires simultaneous briefing
of immunity and merits issues over the objection of a foreign
sovereign.
                               14
                                2

     The district court further reasoned that having to brief the
merits would impose a lesser burden on Nigeria than would
either discovery or a trial on the merits. Discovery and trial are
“potentially arduous.” P&ID, 2018 WL 8997443, at *2. But
Nigeria was required only to “submit a single opposition” to
the petition to confirm, and the FAA’s streamlined procedures
would “ensure swift resolution” of the petition after only one
round of briefing. Id.

    The district court understated the litigation burdens that its
order imposed on Nigeria. The court was correct that
confirmation proceedings generally are decided on a single
round of briefing; discovery and trial, while sometimes
available, are more the exception than the rule. See
Restatement (Third) of the U.S. Law of Int’l Commercial and
Inv’r-State Arbitration § 2.28 (Am. Law Inst., Proposed Final
Draft 2019). But that consideration cuts against the district
court’s order, which required Nigeria to present all of its legal
and factual defenses, in final form, together with all supporting
evidentiary materials.

     P&ID’s initial filings illustrate this point. They consisted
not only of a 15-page petition to confirm and a 30-page merits
brief in support, but also a declaration attaching over 500 pages
of exhibits laying out the nearly ten-year history of the
underlying contractual dispute, the London arbitration, and the
competing judicial orders in the United Kingdom and Nigeria.
In short, P&ID’s initial filings constituted its complete case for
entry of a $9 billion judgment. And the district court, without
resolving Nigeria’s colorable immunity assertion, required
Nigeria to present its complete merits defense. The court’s
order thus abrogated the entirety of Nigeria’s asserted
immunity from having to defend this case.
                              15
      More fundamentally, though, immunity does not turn on
the extent of litigation burdens imposed on the foreign
sovereign. Where immunity exists, it affords a complete
protection “from suit,” Helmerich & Payne, 137 S. Ct. at 1317,
not just from whatever burdens we may decide are too many.
After all, one of the “basic objectives” of the FSIA is to
“respect the independence and dignity” of foreign sovereigns,
not simply to ameliorate their litigation burdens. Id. at 1319
(quotation marks omitted). That is why the Second Circuit held
that a denial of sovereign immunity was immediately
appealable even in an action to confirm a foreign arbitral
award, regardless of how small the “burdens of litigation”
might have been in that case or context. Blue Ridge Invs.,
L.L.C. v. Republic of Argentina, 735 F.3d 72, 80 (2d Cir. 2013).
Unless an immunity exception applies, the FSIA does not
permit courts to contemplate how much merits litigation is too
much. Instead, they must resolve colorable assertions of
immunity before the foreign sovereign may be required to
address the merits at all.

                              IV

    Because we have jurisdiction to consider the immunity
question presented, we deny P&ID’s motion to dismiss this
appeal. And because the district court impermissibly ordered
Nigeria to brief the merits while its colorable immunity
assertion remains pending, we reverse and remand for further
proceedings consistent with this opinion.

                                                   So ordered.