United States v. Liew, 4:11-cr-00573

The government charged four Pangang entities with violations of the Economic Espionage Act for allegedly trying to obtain DuPont’s TiO2 trade secrets and alleged they were "foreign instrumentalities" controlled by SASAC/the PRC.
The Pangang defendants previously moved repeatedly to quash service; the district court denied immunity-based relief and the Ninth Circuit affirmed in part, holding the EEA’s definition of "foreign instrumentality" is broader than the FSIA’s definition.
After remand the Pangang defendants renewed a motion to dismiss arguing FSIA and common-law sovereign immunity, submitting factual evidence to support their claim of SOE status and SASAC control.
The district court found the Pangang entities failed to make a prima facie showing they were FSIA "agencies or instrumentalities" (no clear direct majority state ownership or organ status) and therefore denied dismissal on that ground.
The court held, as its principal legal conclusion, that the FSIA does not apply to criminal prosecutions; alternatively, if the FSIA did apply, the court concluded the FSIA exceptions (commercial-activity and waiver) would bar immunity.
The court also rejected the Pangang defendants’ claim to absolute common-law sovereign immunity for the charged, commercial-nature conduct and denied dismissal on that basis.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Pangang are "foreign instrumentalities" under the FSIA	Gov: record insufficient to show direct majority state ownership or organ status	Pangang: SASAC (state) owns/controls them; they are SOEs entitled to immunity	Denied — Pangang failed to make a prima facie showing of majority ownership or organ status
Whether the FSIA applies to criminal prosecutions	Gov: FSIA does not apply to criminal cases; even if it did, exceptions apply	Pangang: FSIA applies in criminal cases and precludes prosecution	Court holds FSIA does not apply to criminal prosecutions
If FSIA applied, whether FSIA exceptions bar jurisdiction (commercial-activity, waiver)	Gov: exceptions apply to defeat immunity	Pangang: exceptions do not apply	Even assuming FSIA applied, court would apply commercial-activity and waiver exceptions — dismissal denied
Whether common-law sovereign immunity protects defendants	Gov: restrictive/common-law rules do not bar prosecution for commercial acts	Pangang: common-law immunity (absolute) bars prosecution	Denied — court rejects absolute common-law immunity and finds commercial conduct not protected

Dole Food Co. v. Patrickson, 538 U.S. 468 (2003) (FSIA requires direct majority state ownership to qualify as an instrumentality)
Samantar v. Yousuf, 560 U.S. 305 (2010) (FSIA is the sole statutory basis for civil jurisdiction over foreign states)
Argentine Republic v. Amerada Hess Shipping Corp., 488 U.S. 428 (1989) (interaction of §1604 and §1330; FSIA governs jurisdiction over foreign states in civil suits)
WhatsApp Inc. v. NSO Grp. Techs. Ltd., 17 F.4th 930 (9th Cir. 2021) (FSIA occupies the field for entities and forecloses immunity outside FSIA)
United States v. Pangang Group Co., Ltd., 6 F.4th 946 (9th Cir. 2021) (EEA’s broader definition of "foreign instrumentality" is insufficient by itself to invoke FSIA)
In re Grand Jury Subpoena, 912 F.3d 623 (D.C. Cir. 2019) (discusses FSIA’s reach and coexistence with criminal jurisdiction; §3231)
Turkiye Halk Bankasi, 16 F.4th 336 (2d Cir. 2021) (commercial-activity characterization can defeat sovereign-immunity claims in criminal contexts)
EIE Guam Corp. v. Long Term Credit Bank of Japan, 322 F.3d 635 (9th Cir. 2003) (factors for determining whether an entity is an "organ" of a state)
Gates v. Victor Fine Foods, 54 F.3d 1457 (9th Cir. 1995) (entity may be an "organ" where government created/supervises it)
Data Disc, Inc. v. Systems Tech. Assocs., Inc., 557 F.2d 1280 (9th Cir. 1977) (prima facie showing standard for jurisdictional facts)