Mykola Ivanenko v. Viktor Yanukovich
995 F.3d 232
| D.C. Cir. | 2021Background
- Mykola and Larysa Ivanenko founded Luxexpress–II in Kyiv (1993); Alamo Group (Atlanta) later invested, loaned $300,000, and contracted to supply vehicles and parts.
- Luxexpress–II leased valuable riverfront land in Kyiv; in 2003–09 Ukrainian authorities approved a bridge project and notified Luxexpress–II its leases could be terminated; compensation negotiations stalled and Ukrainian courts vacated a favorable judgment.
- In July 2012 buildings, equipment, automobiles, and parts on the property were demolished or seized; appellants say the land ended up as a sports facility owned by relatives of a railway official; appellants fled Ukraine and sought asylum in the U.S.
- Appellants sued Ukrainian officials and later added Ukraine in federal court, alleging RICO, wrongful expropriation, fraud, conversion, and related claims; the case was transferred to D.C.
- The district court dismissed Ukraine for lack of subject–matter jurisdiction under the Foreign Sovereign Immunities Act (FSIA), concluding none of appellants’ invoked exceptions (expropriation, commercial activity, waiver) applied; appellants appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether FSIA expropriation exception (§1605(a)(3)) applies | Ivanenkos/Luxexpress: Ukraine’s destruction was a discriminatory taking violating international law; Alamo: its property was taken and is now owned/operated by a Ukrainian instrumentality engaged in U.S. commerce | Ukraine: domestic takings rule bars intrastate takings claims; Alamo failed to allege its property is owned/operated by a state instrumentality engaged in U.S. commercial activity | Dismissed: domestic takings rule bars Ivanenko/Luxexpress claims; Alamo failed to allege property was "owned or operated" by an instrumentality engaged in U.S. commerce |
| Whether FSIA commercial‑activity exception (§1605(a)(2) direct‑effect clause) applies | Appellants: the taking and subsequent use (golf/sports facility) were commercial in nature | Ukraine: eminent‑domain seizure is a sovereign act, not commercial; subsequent use or motive doesn't change nature of the act | Dismissed: the taking was a sovereign exercise of eminent domain and not commercial activity |
| Whether Ukraine waived immunity (explicitly or implicitly) | Appellants: waiver via 1994 U.S.–Ukraine Bilateral Investment Treaty or via 2016 presidential decree authorizing Ministry of Justice to litigate/settle foreign claims | Ukraine: the treaty does not clearly and unambiguously waive U.S.‑court immunity; the decree is ambiguous and even contemplates asserting immunity; no implied waiver (no U.S. choice‑of‑law, no arbitration, no responsive pleading) | Dismissed: neither the treaty nor the decree meets the exacting standard for an express or implied waiver |
Key Cases Cited
- Federal Republic of Germany v. Philipp, 141 S. Ct. 703 (2021) (adopts absolute domestic‑takings rule: intrastate takings do not violate international law)
- Republic of Argentina v. Amerada Hess Shipping Corp., 488 U.S. 428 (1989) (FSIA is sole basis for suit against foreign states in U.S. courts)
- Republic of Argentina v. Weltover, 504 U.S. 607 (1992) (defines commercial‑activity inquiry and direct‑effect test)
- Saudi Arabia v. Nelson, 507 U.S. 349 (1993) (distinguishes sovereign acts from commercial acts by reference to behavior, not motive)
- Rong v. Liaoning Province Government, 452 F.3d 883 (D.C. Cir. 2006) (expropriation/condemnation is a sovereign act, not commercial, under §1605(a)(2))
- World Wide Minerals, Ltd. v. Republic of Kazakhstan, 296 F.3d 1154 (D.C. Cir. 2002) (standards for explicit waiver and limited circumstances for implied waiver)
- Odhiambo v. Republic of Kenya, 764 F.3d 31 (D.C. Cir. 2014) (requires exacting showing for foreign‑state waiver of immunity)
- Nelson v. Fed. Republic of Germany decisions cited in the opinion (collectively reflect FSIA waiver and exemption principles cited above)