912 F.3d 623
D.C. Cir.2019Background
- A grand jury subpoenaed documents from a corporation (the Corporation) owned by Country A; the Corporation refused and moved to quash, invoking the Foreign Sovereign Immunities Act (FSIA) and Rule 17(c)(2) on grounds that compliance would violate Country A law.
- The district court denied the motion to quash, later held the Corporation in contempt and imposed daily fines (stayed pending appeal); the Corporation appealed the contempt order.
- The government argued (and relied in part on ex parte grand-jury material) that FSIA exceptions apply because the subpoena concerns commercial activity that produced a direct U.S. effect.
- The D.C. Circuit assumed arguendo that FSIA’s immunity provision (28 U.S.C. § 1604) applies to criminal proceedings, but resolved the case on whether jurisdiction and an FSIA exception permitted enforcement of the subpoena.
- The court addressed three legal questions: (1) whether federal criminal jurisdiction (18 U.S.C. § 3231) survives alongside FSIA, (2) whether an FSIA commercial-activity exception applies, and (3) whether contempt sanctions and Rule 17(c)(2) objection based on foreign law were valid.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether FSIA displaces federal criminal subject-matter jurisdiction | Corporation: FSIA eliminates jurisdiction in criminal matters; district court lacks power to enforce subpoena | Government: §3231 grants jurisdiction over all federal offenses; FSIA does not repeal §3231 | Held: §3231 and FSIA can coexist; district court has criminal jurisdiction to enforce subpoena (Amerada Hess exclusivity does not control criminal context) |
| Whether FSIA’s exceptions apply in criminal proceedings | Corporation: FSIA exceptions are for civil cases only; even if applicable, government must prove exception and cannot on ex parte basis | Government: §1605(a) applies to “any case”; it need only show a reasonable probability the commercial-activity exception applies | Held: §1605(a) exceptions extend to “any case”; on ex parte grand-jury record government met burden of showing a reasonable probability that the commercial-activity exception (§1605(a)(2)) applies |
| Whether contempt sanctions against a foreign sovereign-owned corporation are permissible | Corporation: Immunity bars contempt; enforcement raises sovereign-dignity/comity concerns | Government: Contempt is available; FG Hemisphere permits sanctions though enforcement/execution may raise separate issues | Held: Civil contempt sanctions are permissible under FSIA; form of contempt order was proper (execution/enforcement deferred) |
| Whether Rule 17(c)(2) makes subpoena unreasonable because compliance would violate Country A law | Corporation: Country A law forbids disclosure; provided counsel declarations and a late regulatory declaration | Government: Declarations are insufficient and speculative; Corporation bears burden to prove foreign law prevents compliance | Held: Corporation failed to prove foreign law would prohibit compliance; Rule 17(c)(2) objection rejected |
Key Cases Cited
- Verlinden B.V. v. Cent. Bank of Nigeria, 461 U.S. 480 (describing historical shift to restrictive sovereign-immunity theory)
- Rubin v. Islamic Republic of Iran, 138 S. Ct. 816 (explaining policy behind limiting sovereign immunity for commercial activity)
- Samantar v. Yousuf, 560 U.S. 305 (foreign sovereign immunity as common-law doctrine and FSIA’s role)
- The Schooner Exchange v. McFaddon, 11 U.S. (7 Cranch) 116 (original common-law sovereign immunity principle)
- Argentine Republic v. Amerada Hess Shipping Corp., 488 U.S. 428 (FSIA viewed as comprehensive framework for jurisdiction over foreign states in civil cases)
- FG Hemisphere Assocs., LLC v. Democratic Republic of Congo, 637 F.3d 373 (D.C. Cir.) (permitting contempt sanctions against a foreign sovereign entity)
- In re Sealed Case, 146 F.3d 881 (D.C. Cir.) (standards for reviewing contempt orders and use of ex parte grand-jury material)
- OBB Personenverkehr AG v. Sachs, 136 S. Ct. 390 (identifying how to determine the "gravamen" or core conduct on which an action is based)