567 F.Supp.3d 21
D.D.C.2021Background
- Exxon Mobil sued under Title III of the Cuban Liberty and Democratic Solidarity Act (LIBERTAD), 22 U.S.C. § 6082, seeking money damages for defendants’ trafficking in property confiscated by the Cuban government.
- The district court initially found subject-matter jurisdiction over Corporación Cimex S.A. under the FSIA commercial-activity exception and ordered limited jurisdictional discovery as to other Cuban instrumentalities.
- Three days later the D.C. Circuit decided Ivanenko, which emphasized that an expropriation (eminent-domain) is a quintessentially sovereign act and that subsequent commercial uses do not necessarily convert an expropriation into commercial activity for FSIA purposes.
- Defendants moved for reconsideration, arguing Ivanenko (and Philipp) require the court to treat expropriation claims differently and to decline to invoke the commercial-activity exception for trafficking claims tied to expropriated property.
- The court denied reconsideration, holding the gravamen of Exxon’s Title III claim is trafficking — a commercial act — not the antecedent sovereign act of expropriation; therefore the commercial-activity exception can supply jurisdiction.
- The court distinguished precedents where the expropriation itself was the foundation of the claim (e.g., Ivanenko, Rong) from cases where commercial conduct forms the claim’s foundation (e.g., Foremost-McKesson, de Csepel), and rejected defendants’ reading of Philipp as requiring preference for the expropriation exception.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the FSIA commercial-activity exception can supply jurisdiction for a Title III trafficking claim involving expropriated property | Exxon: Title III liability attaches only when a person traffics in confiscated property; trafficking is quintessentially commercial and thus the gravamen of the claim is commercial | Defs: Allowing commercial-activity jurisdiction here would let plaintiffs circumvent the expropriation exception and its international-law requirement | Held: The gravamen is trafficking (commercial); commercial-activity exception applies and supplies jurisdiction for Exxon’s Title III claim |
| Whether Supreme Court decision in Philipp requires courts to prefer the expropriation exception when multiple FSIA exceptions might fit | Exxon: Philipp does not mandate choosing the ‘‘best’’ exception; the claim must simply fit the exception relied upon | Defs: Philipp suggests courts should avoid using exceptions (like commercial-activity) to reach claims more properly addressed by the expropriation exception | Held: Philipp does not create a rule requiring courts to apply only the most ‘‘precise’’ exception; it construes the expropriation exception’s scope but does not foreclose other exceptions where the gravamen fits |
| Whether antecedent sovereign acts (expropriation) transform later commercial uses into noncommercial sovereign acts for jurisdictional purposes | Exxon: Under Nelson and Sachs, courts must identify the claim’s foundation; antecedent sovereign acts do not control if the claim’s basis is subsequent commercial conduct | Defs: Subsequent trafficking of expropriated property should not be treated as commercial for FSIA jurisdiction when the underlying taking was sovereign | Held: Court follows Nelson/Sachs: separate antecedent sovereign acts from the claim’s foundation; here trafficking is the foundation and commercial in nature |
| Whether precedent (Ivanenko, Rong, Garb, Allen) compels denying commercial-activity jurisdiction here | Exxon: Distinguishes cases where expropriation itself caused the injury; Title III targets trafficking so precedents finding sovereign takings dispositive are distinguishable | Defs: Cite those cases to argue subsequent commercial acts cannot supply jurisdiction when claims target the taking | Held: Court distinguishes those precedents (Ivanenko, Rong, Garb, Allen) on their facts and finds D.C. Circuit precedent (Foremost-McKesson, de Csepel) and gravamen analysis control |
Key Cases Cited
- Ivanenko v. Yanukovich, 995 F.3d 232 (D.C. Cir. 2021) (expropriation via eminent domain is quintessentially sovereign; subsequent commercial use does not automatically convert the taking into commercial activity)
- Saudi Arabia v. Nelson, 507 U.S. 349 (1993) (distinguish antecedent commercial acts from the tort that forms the basis of the claim)
- OBB Personenverkehr AG v. Sachs, 577 U.S. 27 (2015) (antecedent ticket sale did not form the foundation of plaintiff’s injury; the situs incident did)
- Federal Republic of Germany v. Philipp, 141 S. Ct. 703 (2021) (expropriation exception addresses international law of expropriation, not broader human-rights torts)
- Bolivarian Republic of Venezuela v. Helmerich & Payne Int’l Drilling Co., 137 S. Ct. 1312 (2017) (FSIA reflects a restrictive view: immunity for public acts but not private/commercial acts)
- de Csepel v. Republic of Hungary, 859 F.3d 1094 (D.C. Cir. 2017) (D.C. Circuit has applied the commercial-activity exception in disputes involving expropriated property)
- Foremost-McKesson v. Islamic Republic of Iran, 905 F.2d 438 (D.C. Cir. 1990) (commercial-activity exception applied in context of expropriated-property issues)
- Rong v. Liaoning Province Government, 452 F.3d 883 (D.C. Cir. 2006) (caution that expropriation claims should not be converted into commercial-activity claims by subsequent acts)
- Garb v. Republic of Poland, 440 F.3d 579 (2d Cir. 2006) (subsequent commercial transactions involving expropriated property do not necessarily confer jurisdiction over the original taking)
- Allen v. Russian Federation, 522 F. Supp. 2d 167 (D.D.C. 2007) (commercial-activity exception inapplicable where challenged conduct was quintessentially sovereign)