111 F.4th 12
D.C. Cir.2024Background
- In 1960, the Cuban government expropriated assets owned by Exxon’s Cuban subsidiaries without compensation.
- Congress later created processes for certifying U.S. nationals’ expropriation claims against Cuba, including certification by the U.S. Foreign Claims Settlement Commission (FCSC).
- In 1996, Congress enacted Title III of the Cuban Liberty and Democratic Solidarity Act (the Libertad Act or Helms-Burton Act), providing a private right of action against anyone who traffics in property expropriated by the Cuban government.
- Exxon sued three Cuban state-owned entities, alleging they were "trafficking" in the confiscated property by participating in Cuba's oil and retail gas sector, including operations at former Exxon assets.
- The district court denied the entities' motion to dismiss for lack of jurisdiction on foreign sovereign immunity grounds, holding the commercial-activity exception to the Foreign Sovereign Immunities Act (FSIA) applied to at least one defendant (CIMEX) but the expropriation exception did not apply.
- The Court of Appeals reviewed the threshold jurisdictional issues and remanded for further fact-finding on whether defendants’ activities cause a direct effect in the U.S., a requirement of the FSIA's commercial-activity exception.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does Title III of the Libertad Act independently abrogate FSIA immunity for Cuban state entities? | Title III creates a cause of action and liability for agencies/instrumentalities of foreign states, abrogating FSIA immunity. | FSIA is the exclusive basis for jurisdiction over foreign sovereigns; Title III liability only arises if an FSIA exception applies. | Title III does not independently provide jurisdiction; FSIA governs suits against foreign sovereigns. |
| Does the FSIA expropriation exception apply to these facts? | Expropriation exception applies; Exxon's certified interest is property taken in violation of international law. | Exception does not apply where only indirect shareholder interests are at issue; international law does not protect parent-company interests in subsidiary property here. | Expropriation exception does not apply; Exxon lacked direct property interest recognized under international law. |
| Does the FSIA commercial-activity exception apply to CIMEX's acts? | CIMEX's activities constitute commercial acts (remittances, gas stations) using confiscated property that cause direct effects in U.S. | CIMEX’s acts either lack a direct effect in the U.S. or are too attenuated; effects are caused by third party acts or are not immediate. | Vacated and remanded: district court must assess whether CIMEX’s specific activities on expropriated property cause a direct effect in the U.S. |
| Must plaintiffs establish that a specific FSIA exception applies, even when Congress created a special statutory remedy? | Title III is a specific, later statute that should control over the general FSIA; thus, no FSIA exception required. | FSIA remains exclusive and exhaustive unless Congress expressly supersedes it as to jurisdiction. | FSIA’s framework governs; plaintiffs must fit within a statutory exception to overcome immunity. |
Key Cases Cited
- OBB Personenverkehr AG v. Sachs, 577 U.S. 27 (FSIA provides the sole basis for obtaining jurisdiction over foreign states in civil actions)
- Argentine Republic v. Amerada Hess Shipping Corp., 488 U.S. 428 (FSIA is the exclusive regime for claims against foreign sovereigns)
- Republic of Austria v. Altmann, 541 U.S. 677 (FSIA is comprehensive for civil foreign sovereign immunity)
- Saudi Arabia v. Nelson, 507 U.S. 349 (FSIA exceptions strictly construed; commercial activity requires specific connection to claim)
- Republic of Argentina v. Weltover, Inc., 504 U.S. 607 (defines "direct effect" in the U.S. under FSIA's commercial activity exception)
- Fed. Republic of Germany v. Philipp, 592 U.S. 169 (FSIA expropriation exception requires direct property interest under international law)
- Verlinden B.V. v. Central Bank of Nigeria, 461 U.S. 480 (FSIA is a comprehensive jurisdictional regime for claims against foreign sovereigns)