Preble-Rish Haiti, S.A. v. BB Energy USA
21-20534
| 5th Cir. | Nov 4, 2021Background
- Preble-Rish Haiti, S.A. (PRH) contracted with Haiti’s BMPAD to deliver fuel; arbitration in New York produced a Partial Final Award of ~$23 million to PRH, which BMPAD refused to honor.
- PRH filed a Rule B maritime garnishment in S.D. Tex. to attach BMPAD funds allegedly prepaid to BB Energy, a commercial fuel supplier to Haiti and the garnishee.
- The district court initially issued a maritime attachment, then vacated it in part, and PRH amended to add maritime-tort claims.
- BB Energy moved to dismiss, asserting among other defenses that BMPAD is entitled to sovereign immunity under the Foreign Sovereign Immunities Act (FSIA).
- The district court deferred ruling on BB Energy’s FSIA-based motion to dismiss and ordered written discovery and a corporate-rep deposition of BB Energy; BB Energy appealed and moved to stay discovery.
- The Fifth Circuit denied the stay, held that discovery may proceed only as to facts crucial to resolving the sovereign-immunity question, and denied PRH’s motion to dismiss the appeal.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the district court’s order permitting discovery while deferring a FSIA motion to dismiss is immediately appealable | Discovery orders are generally nonappealable; therefore this court lacks jurisdiction | An order deferring ruling on an immunity defense is tantamount to denying immunity and is immediately appealable | Immediately appealable under precedent declining to require defendants to endure discovery while immunity is unresolved (appeal not dismissed) |
| Whether the district court may allow broad jurisdictional discovery while an FSIA immunity defense is pending | Broad discovery is needed to resolve personal jurisdiction and related issues | FSIA immunity protects against litigation burdens, so discovery must be circumscribed and limited to facts essential to the immunity determination | Discovery must be limited “only to verify allegations of specific facts crucial to an immunity determination” (district court instructed to confine discovery accordingly) |
| Whether a stay of discovery pending appeal should be granted | PRH favored proceeding with discovery (to resolve other jurisdictional issues) | BB Energy sought an immediate stay to avoid discovery burden while immunity is resolved | Stay denied, but discovery limited to sovereign-immunity-related facts; one judge would have granted the stay |
Key Cases Cited
- Kelly v. Syria Shell Petrol. Dev. B.V., 213 F.3d 841 (5th Cir. 2000) (FSIA immunity protects against litigation burdens; discovery must be narrowly tailored to immunity issues)
- Zapata v. Melson, 750 F.3d 481 (5th Cir. 2014) (declining to let courts force defendants to undergo discovery when they timely assert immunity defenses; such deferral is treatable as immediately appealable)
- FG Hemisphere Assocs., LLC v. République du Congo, 455 F.3d 575 (5th Cir. 2006) (garnishee may assert a foreign sovereign’s immunity defense)
- Piratello v. Philips Elecs. N. Am. Corp., 360 F.3d 506 (5th Cir. 2004) (general rule that discovery orders are not immediately appealable)
- Ruhrgas AG v. Marathon Oil Co., 526 U.S. 574 (1999) (no absolute hierarchy between subject-matter and personal-jurisdiction determinations; but does not address sovereign-immunity priority)