*1 240 59, id. life,” at 120 S.Ct. community tion
IV congressional with In accordance claim jeopardy double Bowe’s With credit Bowe deny intent, also thus we not identi has that Bowe we note rejected, release. supervised of period his against would authority that statutory any fied credit court the district authorized have V The time. prison against time probation usual Code States United in cred- provision erred the district court Because due credit computing upon relied ly proba- on served that Bowe the time iting imprisonment against credit impris- authorizes term 18-month his against tion spent has defendant] any [the time “for court’s district onment, we vacate the date detention prior with instructions and remand official U.S.C. commences.” sentence Bowe within resentence the court that also see added); 3585(b) (emphasis an offense for sentencing range applicable (4th Cir. Whelan, F.2d 522 v. Randall any Bowe granting without 15 and level of term of 1991) against credit (declining to probation. served the time credit for a commu spent time imprisonment FOR AND REMANDED VACATED v. States center); confinement nity RESENTENCING. Cir.1991) (4th (declin Insley, 927 F.2d imprison a term against to credit ing under appeal before spent time
ment the de limiting substantially
restrictions liberty).
fendant’s im- any credit denying Bowe deny we also probation, his
prisonment supervised period against his credit him COMMERCE, OF BANK CONNECTICUT no statute are Again, we aware release. tiff-Appellant-Cr Plain con- To the such credit. authorizes that oss-Appellee, intent an has manifested trary, Congress v. supervised release full service require See United purposes. rehabilitative CONGO, OF REPUBLIC Johnson, S.Ct. 529 U.S. States Defendant-Appellee, Johnson, (2000). In L.Ed.2d 39 Company; Oil CMS and Gas Oil CMS defendant was whether question (International) Company; and Gas a reduction statutorily entitled was Congo International Nomeco CMS com- release to supervised term of his Congo, Inc.; Nomeco Holdings, CMS and one-half two an extra him for pensate (Holdings), Inc.; and Gas Oil CMS Holding prison. served in years that he (Internation Ltd.; Oil Gas CMS such entitled to was not the defendant LDC; Congo al) Ltd.; Nomeco CMS 3624(e), con- U.S.C. under 18 credit Ltd.; Nue (Congo) Gas CMS Oil Supreme Court authority, trolling Congo Company; Energy vo re- “does not the statute pointed out that Congo Company; Nuevo Holding release supervised of a the length duce Ltd.; Nuevo Company; Nuevo time served of excess by reason term Inc.; International, Nuevo Interna 1114, stating 60, 120 S.Ct. prison,” id. Garnishees-Ap Ltd., Holdings tional re- supervised intended “Congress pellees-Cross-Appellants. their transi- individuals to assist lease *2 No. 01-50409.
United States Court of Appeals,
Fifth Circuit.
July 2002.
As Amended on Rehearing Aug. *6 Park Jonathan (argued), Kester G.
John Washing- Connolly, Graham, & Williams DC, Plaintiff-Appellant-Cross-Ap- ton, pellee. Gottlieb, Cleary, (argued),
George Weisz York, NY, Donald Hamilton, New & Steen Clark, & Win- Jr., Thomas Thomas, Scott TX, Defendant-Appellee. Austin, ters, & Vinson (argued), Lipe Guy Stanford Vockell, E. Houston, TX, Marc Elkins, TX, Austin, Elkins, for Garnish- Vinson & ees-Appellees-Cross-Appellants. Bravin, Mor- Buscemi, N. Mark Peter *7 DC, Bockius, Washington, Lewis & gan, Markets Emerging Curiae Amicus Immunity Sovereign Inc. Ass’n Creditors Group. Working District the United States from Appeals Texas. District Western for the Court GARZA, PARKER M. Before EMILIO DENNIS, Judges. Circuit GARZA, Judge: M. Circuit EMILIO ap- of Commerce Bank The Connecticut that the judgment court’s peals district renders Act Immunities Sovereign Foreign by certain owed obligations and tax Republic companies oil Texas garnishment. from immune Congo A predecessor in interest mary Con- procedures to be used when a for- (hereinafter necticut Bank of Commerce eign sovereign’s property is involved. In- Bank”) “the lent Congo million. stead, $6.5 requires it a court to enter the writ In the agreement, loan the Congo waived execution, so that the court can deter- any right foreign to claim sovereign immu- mine the property whether in question nity either from suit or from attachment falls within one of statutory exceptions execution of its property. Congo The de- sovereign immunity. faulted on the loan. acquired The Bank After obtaining the default rights to a valid London judgment from court, the New York state the Bank against the Congo for the outstanding asked that court to enter what it called a principal and interest. In order to turn “1610(c) order.” only The order men-
the foreign judgment into a judgment, U.S. 1610(c) § tioned by is an order actually the Bank filed suit a state court in New attaching or executing against property. York, as permitted by the terms of the 1610(c) (“the 28 U.S.C. court has or- loan agreement. Congo The ap- did not ”). dered such attachment or execution ... pear action, the New York and the state court, The New however, York acting at court entered a default money judgment in “1610(c) request, Bank’s entered a or- favor of the Bank. der” that did not purport to execute Foreign Sovereign Immuni against any property within New York or (FSIA), ties Act 1602-1611, §§ 28 U.S.C. Instead, elsewhere. provided in declara- provides foreign with sovereigns immunity tory terms that the Bank had “permission” from against their property to to execute the Congo’s property satisfy an adverse judgment. 28 U.S.C. wherever it may be found. The York New § 1609. statutory This immunity is sub court authorized the Bank to execute ject to exceptions. several One exception against “any assets or other property of that, if a foreign sovereign waives its nature, of any irrespective of immunity execution, from U.S. may courts the use or intended use of such property execute against “property in the United ... including any payments ... or obli- States ... used for a commercial activity gations due to the Congo oil and in the United States.” 28 U.S.C. gas exploration development compa- ” 1610(a)(1). Even when nies .... completely waives its from exe registered Bank its New judg- York cution, courts in the U.S. execute ment obtained, in Texas state court and against property that meets these two from the clerk of the Texas state court and statutory criteria. Id. order, any court without a writ of garnish-
Only a court may execute against ment group directed to a of oil Texas a foreign sovereign’s property under the companies: Inc., CMS Congo, NOMECO 1610(c) (“No § FSIA. 28 U.S.C. Ltd., attach The Congo Nuevo and some of their ment or execution (hereinafter referred to in subsec companies affiliate gar- “the (a) (b) tions nishees”). and of section this shall be The garnishment pro- writs permitted until the court has ordered garnishees such hibited the from paying any ”). and attachment ... Some debts Congo. to the Congo The and the jurisdictions permit judgment garnishees creditors to removed the garnishment ac- execute against simply by tion apply to the United District States Court for ing to the clerk of the court or to a sheriff. the Western District of Texas filed a 1610(c) Section permit does not such sum- motion to dismiss. The district court dis-
248 “1610(c) than order” the effect to judicata and dis- garnishment writs of
solved the
afford.
itself would
York
New
that, notwith-
It held
action.
the
missed
Faith
Full
of the
obligations
standing the
give
do not
courts
New York
York
New
and the
statute
and Credit
determina
gratuitous
to
effect
preclusive
“1610(c) order,”
prohibit-
not
it was
court’s
oper
judicata
Res
prior
in a
action.
tions
a
considering on
from
judicata
by res
ed
nec
only
issues
relitigation
to bar
ates
amenability
garnish-
of the
the
blank slate
v.
Rader
judgment.
the
essary to
Mfrs.
under the FSIA.
garnishment
debts'to
ees’
139 N.Y.S.2d
Philadelphia,
Ins. Co.
Cas.
and tax
the
It determined
799,
1 A.D.2d
aff'd,
(N.Y.Sup.Ct.1955),
388
to the
companies
the oil
by
owed
payments
(N.Y.App.Div.1956);
220
N.Y.S.2d
149
“commercial
a
not arise from
Congo did
303, 19 N.Y.S.2d
259 A.D.
Irving,
v.
Pike
States,”
there-
the United
activity in
v.
Finkelstein
(N.Y.App.Div.1940);
219
subject
garnishment.
to
not
fore were
the United
Assur. Soc.
Equitable
Life
appeals.
Bank
The
593, 11
States,
N.Y.S.2d
A.D.
690, 23
281 N.Y.
aff'd,
(N.Y.App.Div.1939),
I
(1939).
in the case
Especially
N.E.2d
Statute,
Faith and Credit
Full
The
judicata applies
res
judgment,
of default
1738,
fresh
not bar the
does
28 U.S.C.
support
the
to
essential
to issues
only
the
owed
whether
debts
consideration
pleadings;
the
requested
judgment
are
garnishees
from
can
in the case
developments
subsequent
the FSIA
under
subject
garnishment
judgment or
of the
scope
enlarge
not
York court’s determina
the New
because
beyond the com
judicata
of res
scope
neces
were not
garnishment
tions about
City Hous.
v.Co. N.Y.
Novak &
plaint.
by that
issued
any judgment
sary to
665,
Auth.,
249
type 1
if
policy,
the insured was
amenability
disabled
of the Congo’s property to
period
for a certain
of a time
set out
garnishment,
those determinations were
policy, he was entitled to an irrebuttable
in any way
not
necessary to the money
presumption
permanent disability.
Un-
judgment sought
Here,
pleadings.
der
type
policies, being disabled for the
pleading was the bank’s com-
amount of time set out
the policy gave
plaint1, which sought to convert a money
presumption
rise to a
permanent
dis-
judgment
in London into a money judg-
ability, but the presumption could be re- ment in New York. The New York court
action,
butted.
In a prior
Finkelstein ob-
awarded the
judgment
money
when the
judgment
tained a
type
policy.
He Congo failed to
appear.
Congo does
brought
later
an action on other policies, not challenge the validity of
judgment.
that
type
type
both
and
asserting that res
law,
Under New York
the pleadings define
judicata barred relitigation of the issue of
the scope of a
judgment
default
and there-
his disability. The Appellate Division held fore
scope
judicata.
of res
N.Y.
that
prior
action
judicata
was not res
3215(b);
C.P.L.R.
Co.,
Novak &
type
policies,
as to the
if
previ-
even
N.Y.S.2d at 8-9. To the extent that the
ous court had determined that Finkelstein New York court
legal
made
determinations
disabled,
only “presumably”
was not
but not necessary
awarding
the money judg-
that he
actually
was
disabled.
It reasoned ment, those determinations are not enti-
that “in the prior
all
action
that the in-
tled to any
judicata
res
effect.
required
sured was
was total
establish
Here,
“1610(c)
order” and the deter-
and presumably permanent
...
disability
minations
contained
the order were not
anything more than that which the insured
necessary
awarding
money
judg-
proved
have
was not within the issues
1610(c)
ment. Section
nothing
has
to do
action, and,
hence,
the judgment as with the merits
an
against
action
to such extraneous
judi-
is not res
matters
state,
and
does
somehow turn
Finkelstein,
cata.”
fortioñ the merits court’s consideration. Section impossible would be for the defendant to 1610(c) is directed entirely to a court at- predict in advance of his default any extra- taching or executing against a foreign neous determinations a might court make. state’s property, not at all to the mer- Pike, See 259 A.D. at (limiting 303-304 its court. The provides: statute judicata res effect of a prior judg- default No attachment or execution referred to ment to the “claim alleged in [the] (a) (b) in subsections of this section complaint” and reasoning that the defen- permitted shall be until the court has “default, reason, dant’s for whatever did ordered such attachment not authorize the of a entry judgment after having determined that a reason- against him beyond the scope pray- able period elapsed of time has following relief’). er for entry of judgment and the giving of
To the any extent the New required notice under section 1608(e) York court made determinations about the of this chapter.2 actually plead 1. Bank by way of a "Mo- we pleading will refer to the Bank's as its Summary Judgment "complaint.” tion in Lieu of Com- plaint/' apparently permissible pleading un- 1608(e) requires copy 28 U.S.C. that a New York law. simplicity, der For sake of default entered a for- *10 if some other only First, legal have effect ably three elements. has The statute Congo’s on the executing actually to above, is court purpose its chief discussed as res the order an to treat may enter were a court provide not a against was therefore or execution The order judicata. of attachment order 28 U.S.C. prayed relief property. any coercive foreign necessary state’s to 1610(c) (“until ordered court has the the state § complaint granted or in the execution”).3 Sec- and attachment the order court, such York law under New and may order the court ond, provides it effect. any preclusive to entitled is not “re- only as or execution the attachment say Bank does Although the (b).” (a) Sub- and into subsections ferred words, asks us essentially it many so in as (b) (a) exceptions out the spell sections “1610(c) court’s York the New to treat foreign a sover- rule that general the to as a judgment, declaratory as a order” from execution is immune eign’s of relief form and distinct separate § 1609. 28 U.S.C. See or attachment. by the New issued money judgment the prop- against Third, may execute court the motion out that its points It court. York a reason- “determining that after erty only “1610(c) served order” was the requesting following elapsed time period of has able the Bank’s Congo. But on the separately requires phrase entry judgment.” This declaratory judg not seek a complaint did a example, that acknowledge, for to courts money a it Congo, sought the ment pass sepa- to may have foreign sovereign what was had If the Bank filed judgment. payment the to legislation rate authorize action, then declaratory judgment a Rep. clearly 94- funds. H.R. necessary No. the Nor a situation. have different we would (1976). courts discre- It at 30 allows requesting motion post-judgment could to sovereign foreign for a tion wait 1610(c) scope of enlarge the order a pay arrangements make alternate judg by the default determined issues against any proper- executing debt before above, York law 1610(c) explained As New ment. directs Nothing section ty. Id. judgment a default scope limits judgment issuing to the court itself ques necessary to resolve to the court the issues merits; all directed N.Y. pleadings. or execution.” raised ordering “such attachment tions 3215(b) 2001); 1610(c) (McKinney Novak any determi- makes C.P.L.R. Nothing in foreign post- amenability Co., of a at 8-9. The nation about & 482 N.Y.S.2d 1610(c) exe- mo attachment or sovereign’s property asking motion underlying necessary part C.P.L.R. cution a N.Y. pleading. was not a tion 2001) (“There judgment. money shall be (McKinney shall answer.... There and an “1610(c) complaint in the effect order” had no court or unless the pleading other be no at all: the determina- litigation New York otherwise.”). gratuitous Almost “1610(c) could ders order” conceiv- tions for such issued an the court has order that state in the same less eign be served on juris- serving some execution. proscribed by statute for manner attachment States, attachment complaints against states. dictions may be satisfy judgment execution to purpose Report explains that 3. The House a clerk or to simply by applying had 1610(c) require a court to issue is to suffi- would not afford sheriff. This local It ex- execution. attachment or order of protection to a state. cient plains: Rep. 94-1487, (1976). at 30 No. H.R. 1610(c) ex- prohibits attachment Section (b) 1610(a) and un- under ecution sections *11 determination retroactively could be some other noncommercial gov- source of “declaratory termed a judgment.” If ernment the income. Conversely, even if a Bank a declaratory foreign wanted judgment, state’s property has been generat- needed to ask for one ed in its complaint. activity in the United States, that property is not thereby sub- New York require does not civil ject to execution or attachment if it is not litigants up to show in court to fall on “used for” commercial activity within our their If a swords. defendant does not (and borders. The district court the liti- liability contest his plaintiff as set gants) have focused on the question of out in complaint, he need not appear in whether the Congo’sjoint venture with the the action. Defaulting carry does not garnishees, which gave rise to royalty risk that the court will enter a judgment and tax obligations that the Bank wants to or make determinations not essential garnish, was a “commercial activity awarding the relief for in called the com United States.” This was the wrong ques- plaint. action in The New York was an tion to consider. What matters under the action to turn a money judgment Lon statute is not how the Congo made its don into a money New York. money, but how it spends it. The amena- Congo had way no of knowing from bility royalties of these and taxes gar- complaint the New York court depends nishment they what are “used would make determinations and issue dec for,” not on how they were raised. larations that had nothing to do with a 1952, Until money the United judgment. gen States immunity of the erally afforded foreign sovereigns and tax payments absolute garnishment immunity from jurisdiction was not a defense to a claim of the for money courts, including complete damages, immunity from whatever the New York execution. Verlinden B.V. court have said Central about the immunity of Bank Nigeria, 480, 486, 461 U.S. Congo’s assets to execution had noth (1983). S.Ct. ing to L.Ed.2d 81 do with the Unlike merits action it state or federal sovereign was considering. immunity, for Such statements were eign sovereign immunity does superfluities. mere derive Now not that the immuni from the ty constitution. Id. Foreign of these sover garnishment assets to really is eign issue, instead derives con is from precluded not grace cerns of and comity between asserting nations. sovereign its immunity defense. result, As a Supreme Court regularly II deferred to the Executive Branch in deter mining jurisdiction whether to take over a FSIA, Under the courts may case concerning sovereign. Id. attach only a foreign state’s “property The Executive was in a better position to the United States” when that is property anticipate the foreign relations conse “used a commercial quences of subjecting 1610(a) (em States.” 28 U.S.C. suit U.S. court. theory Under the added). phasis What matters under the sovereign immunity, absolute the Execu statute is what for,” is “used tive regularly would recommend that generated how it was produced. If courts jurisdiction decline to take over property in the United States is used for a case a foreign sovereign. here, commercial purpose subject to attachment and execution even Department State issued if it was purchased with tax Letter,” revenues or the “Tate which announced *12 the touch- constitutes activity” generally of the “restrictive” adoption
Department’s
But
immunity determination.
Id.
immunity.
stone of
sovereign
foreign
theory of
nevertheless
re-
execution is
immunity
from
486-87,
1962. Under
103 S.Ct.
at
immunity.
jurisdictional
nations
many other
than
theory, which
narrower
strictive
Chile,
Depart-
748 F.2d
the State
adopted,
Republic
already
had
De Letelier
Letelier,
Cir.1984).
(2d
immu-
In De
790,
continue to recommend
ment would
798-99
state’s
foreign
concerning
the his-
nity
surveyed
in suits
both
Circuit
the Second
Department,
acts.
sovereign, public
and the
immunity from execution
tory of
im-
denying
however, would recommend
time Con-
context at the
law
international
foreign
sover-
on
munity in suits based
The court con-
the FSIA.
passed
gress
activities.
commercial
strictly
eign’s
lift im-
intended to
Congress
cluded that
modify the com-
nothing to
Letter did
Tate
part,”
“in
from execution
munity
by foreign sover-
enjoyed
immunity
plete
completely
intend to reverse
it did not
proper-
against their
execution
eigns from
antipathy
and international
historical
successfully obtained a
plaintiff
If a
ty.
foreign
proper-
state’s
executing against a
sovereign,
foreign
against a
judgment
final
could
judgment
where a
ty even
cases
foreign
rely
had to
on
he still
Id.
It attributed
the merits.
be had on
Rep.
voluntarily. H.R.
pay the
between
phrasing
the differences
(“[T]he
94-1487,
8,
traditional
at
No.
(§ 1605) and
execution
jurisdictional
concerning exe-
in the United States
view
(§ 1610)
in the FSIA to
immunity sections
of for-
property
that the
cution has been
scope
narrow the
choice to
a deliberate
immune from exe-
absolutely
eign states is
immunity from execution.
Letter’ of
the ‘Tate
Even after
cution ....
position of
to be the
this continued
spell
of the FSIA
Two subsections
and of the
of State
Department
immunity from exe
exceptions to
out the
courts.”);
(Third)
Restatement
1610(a)
§
governs
28 U.S.C.
cution.
FoReign
the United
Law of
Relations
property be
immunity from execution of
(1987) (hereinafter
460 cmt.
States
28 U.S.C.
foreign states.
longing to
“Restatement”).
1610(b)
exe
immunity
governs
“agency
to an
belonging
property
cution of
responsi
The FSIA shifted
foreign state en
instrumentality” of a
or
for
determinations about
bility to make
activity in the United
in commercial
gaged
from the State
eign sovereign
(a),
property
regarding
Subsection
States.
Verlinden, 461
to the courts.
Department
state, per
directly
to a
belonging
most
For the
4. The Third Circuit relied on
reason
buyer.”
similar
a seller and a
Id. at 36. The court
ing City Englewood
People’s
rejected
Socialist
argument, reasoning
this
that if "ac
Libyan
(3d
Jamahiriya,
Arab
quisition
ty permits find try to . . . UTILIZE.” and instead THIRD NEW property, “use” of WEBSTER’S Dictionary (Philip B. to a com or connection any kind of nexus International 1993) ed., Inc. Webster in the States. Merriam activity United Gove mercial (1961). of a says: property for a property means what To use statute belong ordinary meaning of unlike sovereign, activity, within instrumentality, in the “use,” agency put to a mere would be to ing if it “used carry- activity, executed may be of the commercial service prop That the activity. property. a commercial means of the activity by for” out generat or otherwise Here, question from erty royalty obligations is revenue revenue, income, by commercial ed represent *14 thereby proper the render commercial ordi- activity. does allegedly States an say to execution. the ty amenable we would not nary usage, for” a transaction is “used revenue from Ill in return example, For that transaction. rehearing, employer, to his petition employee’s In its for service for an interpretation an revenue in the form Bank advances he receives generally the say plain strange with the It be salary. for” that conflicts would “used for his salary The Bank con uses his meaning phrase. employee of that that “The job, salary for” a com his from his property job.” is “used He earns tends that rent, buy grocer- when the activity pay in the United States uses it to mercial but he ies, to” a from a to” or “related forth. The revenue “integral ever it is and so The the here. does not have located commercial transaction Judge relationship on a sentence from to the commer- Bank relies instrumental by phrase “Because the “used separate opinion: activity denoted Dennis’s cial necessary for;” activity, Congo were of that royalties put ... it is not service to, for, the from used the end result or income integral instead it is therefore obligations activity. ... those joint venture immunity from exceptions fell within to” and “related phrases “integral The for FSIA provided something different. plainly to” mean added). 1610(a)(1)” In our (emphasis that would allow phrases are broad These
view, The sequitur. this sentence is a non any just about execution on basis face denotes phrase “used for” its activity. a commercial connection with specific than something different and more kind of specifies particular The statute “necessary to.” “integral to” or phrases relationship. If a “used for” relationship, (and something distinct It also denotes relationship to any had intended Congress narrower) the Bank phrases than the other suffice, it to have expect we would not “related to” or petition, in its such as uses language. “used for” used the narrower “contemplated by.” Furthermore, the structure of differ- dictionary defines “to use” phrase that the “used indicates It de- FSIA any phrases. of these ently from action, issue, Libya’s present according but instead whether determinative 36-37. The court, Id. at property was commercial. use of the Englewood not whether was trans acquired was in a commercial 1610(a), specific for” was intended to have more Section concerning immunity execution, suggests: than the Bank if from meaning what does not phrase use the 1610(a) “in interpret we were to connection with.” If Congress had in- by the tended to allow way suggested petition, we would execution on had a interpret away “relationship have to an obvious differ- with” or “integral was to” a commercial transaction in phrasing ence of two different the United States, expect much, we would parts sep- say deals FSIA. FSIA (“in probably by using the jurisdiction phrase with same arately immunity from with”) (§ 1605) connection as it in crafting used from execution (§ 1610). exception jurisdictional immunity. In- Although each of these sec- 1610(a) stead, § provides: activity” tions creates a “commercial ex- (a) ception immunity, Congress phrased from The property in the United States of activity” exceptions state, the two “commercial a foreign as defined in section 1605(a)(2), 1603(a) very differently. Section con- chapter, of this used a com- cerning immunity jurisdiction, pro- States, mercial activity in the United vides: shall not be immune from attachment execution, execution, aid of or from upon (a) A foreign state shall not be immune a judgment entered a court of the jurisdiction
from the courts United States or of a State after the United States or of the States in Act, effective date of if this of sev- [one *15 ... case eral additional applies]. factors (2) in which the action upon is based a Congress used the specific phrase more activity commercial carried on in the “used for a commercial in activity” this state; by foreign United States or section rather than specific phrase the less upon performed an act in the United “in connection with activity” a commercial in States connection with a commercial § used in 1605. If we were to take the elsewhere; activity foreign of the state approach, Bank’s interpret away we would upon or an act the territory outside the difference in phrasing between these the United in a States connection with two sections: the Bank asking is us to activity foreign commercial ignore an obvious in way difference elsewhere and that act causes a direct these two different immunities have been States; in effect the United crafted. “in phrase This section uses the connection observed, previously As we 299 (5th with” a activity. 378, Cir.2002), commercial It allows a F.3d 387-89 the differ plaintiff pierce foreign to a immuni- state’s in phrasing ence between the two “com ty for suits based on acts that have activity” mercial espe sections stands out activity cially connection with a commercial starkly against when viewed (or the United with a background States commercial of the historical and interna a elsewhere causes direct ef- tional law context of the Historical FSIA. States). fect in the phrase, ly, theory This even under the “restrictive” with,” “in connection something sovereign immunity, foreign sovereigns means like is, “integral “related to” That enjoyed complete immunity to.” have from exe phrasing immunity in the property section means cution of their United States much thing the same that the Bank wants courts. Verlinden B.V. v. Central Bank of 480, 486, 1962, assign phrasing Nigeria, in the execution 461 U.S. 103 S.Ct. (1983). Moreover, section. 76 L.Ed.2d at the (4) (2)(b) pre- above does not the interna- Subsection passed, was time the FSIA in respect any process the issue of vent against execution community viewed tional being which is the time property greater a, foreign state’s for commer- in use or intended use merely per- than sovereignty to its affront ... purposes cial an the merits of mitting jurisdiction over 33, 1978, c. Immunity Act State Circuit’s decision action. Second makes phrasing The British Act’s (Eng.). Chile, F.2d Republic De Letelier v. to a relationship the mere explicit (2d Cir.1984), 790, relied on the 798-99 per- activity does not suffice the FSIA law context of international execution, present- must mit exceptions that the FSIA’s concluding “in use or being,” the time be ly, “for were indeed narrow- immunity executional pur- for a commercial intended for use jurisdictional im- exceptions than its er juris- The British Act’s focus pose.” principle The court relied on two munity. contrast, section, by dictional European law: the of international sources activi- “relationship” to commercial on the Immunity and the on Convention State ty: Immunity Act. The FSIA British State pro- respects A not immune as State is were all European the two laws relating to— ceedings time: the Eu- roughly the same passed (a) entered a commercial transaction 1972, the FSIA ropean Convention into the State 1976, Immunity Act the British State (Eng.). Immunity Act c. State European Convention in 1978. Id. The Thus, parallels Act the FSIA: the British any mechanism which provide did not mere rela- jurisdiction it allows based on execute litigant could activity, very but tionship to a commercial creditor had property: state’s only depending clearly permits through obtain satisfaction property. “use” administrative chan- executive or state’s *16 FSIA, the On the face of the Id. nels. immunity craft to executional is exception Immunity provi- Act’s The British State specific more “used for” lan using ed the immunity from execution more sion on “in connec guage instead of the broader language. place the it focuses with” we this closely parallels FSIA’s: tion When phrasing against in the back difference property. on the “use” of the plainly history of the of the two forms ground provides: Act and the immunity in the United States (2)(b) of a shall not property the State FSIA, of the the international law context for the en- subject any process be to even phrasing stands out difference or arbitration forcement of plainly. reject We the Bank’s defini more rem, or, for its in an action award tion, not accord not because does arrest, detention or sale. meaning phrase of the “used plain with the for,”5 it would obscure a clear- but because activity necessary appears recognize for commercial the Bank to that 5. Even 1610(a) apply). Any property foreign the the is how the what matters under statute purchases private supplier will property, pri- state from foreign the not how state uses purpose necessarily for a commercial property in the be used parties have used the vate Iran, buys foreign real supplier. that If a past. Republic v. See Flatow Islamic (D.D.C.1999) (hold- example, embassy, an the estate to use for F.Supp.2d 21-23 for a commer- property real estate will have been used ing foreign use of the that the state's ly way intentional difference in the the two be able to against any execute intangible activity” exceptions different “commercial property. jurisdic- —executional clarify We that express we no holding as phrased by Congress.6 tional—have been temporal aspect phrase of the “used for.” In petition its for rehearing, the
IV Bank allege does not any scenario under Contrary suggestion, Bank’s Congo the as- which the put has its or tax the signing phrase ordinary obligations any “used for” its point time in the meaning impossible does not make it to service of a commercial against intangible property is, execute the of United States. That it does not claim foreign The Bank argues state. that that used property for a improperly assigned temporal we have activity, commercial within ordinary for,” for,” phrase focus to the “used that meaning we of “used at any time. In- stead, have focused on the intended use of the it wants interpret phrase us to way the future instead of its use in “used for” in goes beyond that present past. sug- ordinary or the The Bank meaning assigned to that phrase. that, gests prove because it is difficult to temporal aspect Because the of the phrase foreign what a state intends do in the particularly “used for” does not seem im- intangible property, future with like bank portant resolving this case accounts,7 judgment rarely theories, creditors will Bank’s current express we no purpose by Similarly, ample, cial its former owner. the attachment of a bank account used cars, embassy's telephones, diplomatic pay diplomatic an salaries or maintain an housing private party embassy immediately directly were all used some would af- transaction; point foreign sovereign at some for a fect diplomatic commercial state’s is, sale to state. If we activities. party’s private were to allow a 1610(a), use of the to count for we considering bank ac- counts, would erase the commercial/noncommercial several district court have cases use distinction for almost all of a accounts, fact focused on the use of those tangible property. state’s money on the source of the account. example, Corp. For in Liberian Eastern Timber Liberia, assigning phrase Republic 6. We also F.Supp. reiterate (D.D.C.1987), plain meaning helps "used for” its accom- the District Court for the Dis- plish principal goals one of the of the FSIA: of Columbia trict held that bank accounts *17 possible judicial to restrain as much as inter- "utilized for the maintenance of the full facili- acts, jus imperii, sovereign perform diplomatic ference with the or ties of Liberia to its Rep. 94-1487, foreign including payment of a state. See at consular functions ... H.R. allowing any wages diplomatic personnel Its true that kind of execu- salaries and against foreign property ongoing expenses tion a state’s will and various incurred in likely diplomatic have some indirect effect on the state's connection with and consular ac- If, sovereign example, you acts. execute tivities” were not "used for” a commercial against commercially property activity meaning the used of a the within of the FSIA. The airline, foreign you proba- plainly money national state's will focus was on how the from the bly damage profits spent, of the airline. The loss accounts was it came from. where line, profits may, employed of those down the make it Other court have district cases sim- Flatow, sovereign supply reasoning. F.Supp.2d more difficult for the ilar See at (holding books to its schoolchildren send its officials that bank accounts used for the diplomatic repair abroad on missions. But the im- and maintenance of noncommercial pact confiscating property aof court some real estate were not used for a commercial being present sovereign purpose activity used and therefore were immune from at- tachment). is much more direct and immediate: for ex- States, immune from not be shall must be on when opinion entry judg- prior to the activity in the Unit- attachment commercial for a used if—... any ment in action ed States. (1) explicitly state has Moreover, see how fo we cannot from attachment immunity its waived forecloses cusing on the use ... and judgment prior intangible property. against (2) is to of the attachment purpose Turnkey Drilling, in Atwood decision Our of a secure satisfaction S.A., Brasileiro, F.2d v. Petroleo
Inc. entered may ultimately be has been or (5th Cir.1989), how helps illustrate state, and not to can uneontr intangible property certain jurisdiction. obtain in service of oversially be viewed as used section, 1610(a), includes activity in the United States. like This commercial activity in proposition for the The Bank cites Atwood “used for commercial phrase Atwood, prece from opinion departs In we con- panel that the the United States.” contrary, contractually Atwood demon dent. To the that Petrobras had cluded consistent panel opinion that the prejudgment strates from any waived interpreted have way with the we court. and affirmed the district attachment past. in the requirement for” “used con explicitly Atwood did not Although Atwood, Petrobras, Petro- requirement, a Brazilian state the “used for” sider Atwood, credit for a contracted with used the letter of instrumentality, plainly bras ordinary oil wells off company, purpose to drill within an American commercial security Brazil. for the Petro- phrase the coast of As “used for.” meaning contract, Pe- under the sums due Atwood the letter of credit to secure bras used issued provided a letter of credit do corporation trobras American services of an bank. When Petrobras by an American drilling explained work. As we Atwood, Atwood sued for pay refused is not how panel opinion, “what matters Be- contract federal court. money, breach of made its but foreign state] [the expire Atwood, the letter of credit was due cause it.” In the letter spends how it n byits own terms, court issued the district the income or represent credit did not injunction requiring transaction, Petro- preliminary from the commercial revenue of credit for one to extend the letter bras do here. obligations and tax until all the date of the order or year Rather, from the letter of credit put Petrobras credit were to the letter of pertinent activity, issues the commercial in service of appealed, arguing resolved. Petrobras activity. the letter of credit on “spent” im- exceptions to us, contrast, that none of the FSIA’s record before On the attachment, 28 munity prejudgment put intangible property has not its 1610(d), attachment of permitted U.S.C. the service of 1610(d) pro- of credit. Section the letter panel’s definition the United States. fully vides: for” is therefore consistent of “used *18 (d) prejudg the having permitted ... with our foreign a state property The of 9 Atwood.8, attachment in activity the ment a commercial in used for mainly focused on whether Petrobras petition a in At- FSIA cites sentence 8. The Bank's proposition immunity that contractually of context for the waived its wood out had "contemplated by” any intangible property The relevant con- prejudgment attachment. thereby for” transaction is "used provided: tract Atwood's of the that transaction. discussion
259 Atiuood, (1992), The case shows how L.Ed.2d 394 which explored the determine, courts without speculation, can meaning of phrase the “commercial activi- intangible property foreign that the of a in ty” the Nothing FSIA. in panel the activity state is used for a commercial in opinion concerns the definition of “com- case, the United States. In this exam mercial activity”: we assume for sake the ple, royalty obligations the and tax would argument of joint that the venture with the be used for a commercial activity the American oil companies was indeed if the Congo States them as used Instead, “commercial activity.” we focus collateral for loans obtained from United phrase for,” on the “used a phrase no- States There nothing banks. so inher jurisdictional where found the commer- ently speculative intangi about the use of cial activity exception discussed Welt- ble that courts cannot meaning over. The Weltover court summarized its fully ascertain how such interests are used holding as follows: by foreign the states that own them. conclude
[W]e
that when
foreign gov-
V
acts,
ernment
regulator
not as
of mar-
ket, but
in the manner of a private
Finally, our focus on
use of a
the
it,
player
foreign
within
sovereign’s
state’s
in any
does not
way
Supreme
conflict with the
actions are
Court’s de
“commercial” within the
in Republic
Argentina
meaning
cision
v.
of
Moreover,
Welt
the FSIA.
be-
of
over,
607,
504 U.S.
112 S.Ct.
cause the Act provides that
the com-
Moreover,
sovereign immunity.
B. Waiver
The
our definition of "used
cor-
for”
of
acknowledges
[Petrobras]
Borrower
responds
way
that district courts have
agrees
that
contemplated
the activities
dealt with
provisions
agreement
of this
and the
(a
intangible
bank
property).
accounts
form of
notes are commercial
in nature ... and
Those courts have focused on the use of the
acknowledges
agrees
therefore
that it is
accounts rather than on the source of the
any right
not
entitled
of
on the
money in
example,
account.
For
in Libe-
grounds
sovereignty
any legal
of
...
ac-
Corp. Republic
rian Eastern Timber
Libe-
of
proceedings arising
tion or
out
or relat-
ria,
(D.D.C.1987),
F.Supp.
Dis-
ing
agreement
to this
or the notes.
trict Court for the District of Columbia held
Atwood,
added).
(emphasis
mercial character phrases of to describe Bank uses a number to its “nature” by reference determined and tax relationship royalty of the 28 U.S.C. “purpose,” than its rather com- allegedly domestic obligations to 1603(d), is not whether question “con- activity: obligations are mercial acting with a foreign government is “nec- by” activity, they are templated the aim of or instead with profit motive activity, “integral to” the essary to” or sovereign objectives. fulfilling uniquely activity. All of they are “related to” the Rather, partic- is whether the the issue differ from the relationships plainly these per- ular actions that by the statute: a relationship demanded (whatever the motive behind forms Accordingly, we relationship. “used for” them) actions which type are the court to determine remand to the district in “trade and private party engages tax royalty uses its and how the traffic or commerce.” obligations were obligations. How these (internal 614, 112 2160 citations Id. at S.Ct. the plain is of no account under generated omitted). may that we Wettover holds language of the statute. sovereign of a state’s purpose to the refer classifying activity its as com- activity mo comes to us on a appeal This Here, to the mercial noncommercial. such, little tion to dismiss. As there is all, we purpose we have looked to extent development factual the record about property, of the purpose have looked to the are royalties obligations and tax how activity. purpose not the Wettover used. therefore vacate the dismissal We say the definition of nothing to about has action, which was garnishment of the for,” nothing opinion in that “used based on the district court’s conclusion for” de- suggests commands or that “used joint that the oil venture between the Con ordinary anything other than its *20 obligations explicitly immunity and tax are waived its from royalties that the execu- tion, in as follows: any activity not used States, (C) court should the district The Borrower consents in generally garnishment the writs of and dis- suit, dissolve respect any of action or proceed- ings miss the action. arising out of or in connection with Agreement this to the giving any fur- VACATED and REMANDED for relief, any or the issuance of process in proceedings ther not inconsistent with this suit, any connection with such action or opinion. proceedings including, without limita- tion, [taking], enforcement or execu- DENNIS, in Judge, Concurring Circuit any tion against property whatsoever judgment court’s vacating district use) (irrespective of its use or intended further remanding the case for any judgment order or that may be in proceedings disagreeing part but with given made or in action proceed- such or majority opinion controlling as to the ings. principles of law: (D) To the extent the Borrower provisions of the FSIA pertinent may any jurisdiction in claim for itself or are: suit, execution, immunity its assets immunity (whether § 1610. Exceptions execution, attachment in aid or otherwise) from attachment or execution judgment before or or other legal process and to the in extent that (a) in the United States of jurisdiction there such be at- state, in foreign as defined section tributed to itself or its im- assets such 1603(a) chapter, of this used for com- claimed) (whether munity or not States, in mercial the United agrees Borrower not to claim and waives in shall not be immune from attachment per- such to the fullest extent execution, execution, upon aid of or from jurisdiction mitted the laws judgment entered a court of the intending, particular, any pro- that in or United States State after the ceedings forego- taken in New York the Act, if— effective date this waiver of have ing immunity shall effect (1) state has waived its im- under and be construed accordance munity from attachment in aid of execu- Foreign with the United States Sover- explicitly tion or from execution either eign Immunities Act of 1976. by implication, notwithstanding any can no There be reasonable doubt that the withdrawal of the waiver the Congo waived immu- thereby explicitly its may purport except to effect nity judgment from execution of the en- waiver, accordance with the terms of the against tered York favor of New the Bank in accordance with the FSIA 1. 1610(a)(1). my opinion, district court erred that, in
failing
recognize
agree-
the loan
facts,
upon
undisputed
proper-
ment
which the Bank’s
Under
based,
Congo ty
upon
garnishees’ intangi-
executed —the
ly,
ceptions
foreign sovereign immunity
is a
ble —are States, with the aim of by FSIA motive or instead required profit United 1610(a). compa objectives.” are oil garnishees fulfilling uniquely sovereign § The The situs of Instead, in Texas. headquartered nies is “whether the question the Id. in Texas. situs of the debtor a debt is the the particular actions that Mo., Tex. v. Ry. Tex. Co. (whatever Kan. & the motive behind performs of 275, 389, Swartz, 115 S.W. Tex.Civ.App. 53 them) by actions which a type are the of also, writ); (1908, Alliance no See 276 in ‘trade and traffic party engages private ” De Desar Grupo Mexicano Bond Fund Black’s Law (quoting commerce.’ Id. Cir.1999). (2nd 16, rollo, 25 n. 9 190 F.3d (6th in Dictionary 1990))(emphasis ed. royal- obligations pay to The fact that the activity is one original). the the “[I]f satisfied, after their seizure ties be engage, could private person which a credi- seizing judgment of the the election immunity.” Trading Tex. not entitled to tor, by in Texas or by money paid either Nige Milling Corp. Republic v. Fed. & of change Congo, oil does delivered Cir.1981). (2d ria, 300, The 647 F.2d upon— executed the fact that with Ameri joint entered a venture Congo pay royal- to companies’ obligations the oil can, Canadian, companies Congolese and situs of the in Texas at the ties—is located exploration and conduct and promote headquarters. debtors’ from the Atlan gas of oil and development Congolese coast. tic Ocean offshore of objective was to obtain within Congo’s The obligations pay companies’ The oil joint framework of the venture the being Congo royalties are and cooperation qualified and assistance of activity in the United used for commercial companies explora oil well-known 1610(a). § in accordance with FSIA States the minerals un development tion and of activity” “commercial The FSIA defines the best conditions of effectiveness. der as: joint agreement provided for The venture
[Ejither regular course of commercial royalties to the payment mining of particular or a conduct companies agreed provide The Congo. na- or act. The commercial transaction geological with all information Congo activity shall be determined ture of an exploitation in the which could be useful of the course to the nature by reference companies mineral substances. The conduct, than reference to rather jointly operate install and facili agreed 1603(d). purpose. its 28 U.S.C. pump out the mineral pipelines ties of agreed to con production. companies The in Republic held Supreme Court of a and evaluate the construction sult Inc., Wettover, 504 U.S. Argentina v. refinery Congo. hydrocarbon (1992) 2160, 119 L.Ed.2d S.Ct. does not alleges, bank and the dis acts, not foreign government that “when a com the facts that the American oil pute, market, of a but regulator as a joint as a com panies pursued the venture it, within private player manner of a provided range a wide mercial are ‘commer- foreign sovereign’s actions services, plan including management, meaning cial’ FSIA.” within 1603(d) ning, accounting services and direction that an requires Because FSIA States; facts that the and the character is to be deter- act’s commercial in Texas has been garnishees’ presence its “nature” rather mined reference to continuous, and that it is from Texas “is not wheth- “purpose,” than the issue its directed, fi discover and extract oil they supervised, gas speci- have with given sharing profits nanced the activities that have rise fied methods of and loss- obligations royalty pay parties to their to make es wherein one of the is a mineral owner entitled to royalties ments. receive *22 production. Like the “gar- issuance of the Weltover, a brought In bond holders Weltover, den-variety debt instruments” in against Argenti- contract action breach of nothing “there is about [Congo’s action in arising Argentina’s na out of unilateral entering and in participating joint ven- maturity rescheduling pay- of the dates exploit ture to that minerals] is not analo- government ment on certain bonds. 504 gous private to a commercial transaction.” 609-10, at 112 A unani- U.S. S.Ct. 2160. Weltover, 615-16, 504 112 U.S. S.Ct. Argentina that did mous Court concluded Congo engaged 2160. in commercial activ- ac- enjoy immunity not from suit for its ity. tions. The Court concluded that the issu- ance “commercial activi- of the bonds was The district court concluded that that the ty,” Congo engage and unilateral extension of the did not in commercial activi maturity by presidential ty bonds’ dates de- because its contract with compa the oil sovereign cree was an act made “in connection with” nies was in nature and some of 612, 617, activity. that Id. at 112 its were strictly sovereign. S.Ct. activities The Rejecting Argentina’s argument district court on relied dictum in a Seventh case, that the issuance of the not Rush-Presbyterian-St.Luke’s bonds was Circuit commercial activity Republic, because the bonds Med. Ctr. v. Hellenic 877 F.2d (7th Cir.1989) (“a 574, sovereign were issued for a purpose, 578 contract where- explained: why by foreign grants Court “it is irrelevant Ar- a a private party a gentina participated exploit in the bond market in license to the state’s natural re- actor; private the manner of a it matters sources is not a activity, commercial since resources, only that it did Id. at 112 natural they so.” S.Ct. the extent are interest,’ in (emphasis original). public 2160 ‘affected with a goods are deal.”)(cit- only in which the sovereign may case, present Congo engaged MOL, ing paraphrasing Peoples and Inc. v. activity by entering commercial into a Republic Bangladesh, 736 F.2d joint companies venture with American oil (9th Cir.1984)(“government’s grant 1329 purpose discovering and others for the capture export license to and rhesus mon “joint and A extracting gas. oil and ven- keys experimentation for scientific not a ture” is definition a undertak- “business activity, commercial since the agreement ing by two or persons engaged more a Bangladesh’s right regulate ‘concerned single project.” defined Black’s Law Dic- resources,’ natural a uniquely [ ] its sover (7th 1999); tionary profits 843 ed. “shared function”)).1 eign necessary and losses” is one of ele- its MOL, joint however, agreement ments. Id. The venture Unlike the situation assigned Congo right Congo’s stop to receive actions did not with its royalty payments sovereign, regulation on the minerals devel- initial action as resources, oped. nothing uniquely sovereign open There is of its natural them to joint development. Congo about a contract to enter a and exploitation venture approved 1. The was not district court relied on a similar state Jones decision which Petty Ray Geophysical upon by affirming ment in Jones v. relied this Circuit in Geo source, Inc., (S.D.Tex.1989), Petty-Ray Geophysical, F.Supp. appeal. See Jones Geosource,Inc., (5th Cir.1992). unnecessary ground F.2d an alternative or discovery before the Bank to conduct sovereign ing step down from its on to went dismissing garnishment proceeding. its typical in a commercial engage status showing Bank made a reasonable contract with oil joint a venture activity, pay royalties garnishees’ obligations exploration, production, companies Congo oil and world market of sale on the States, a used for the United present something This is gas. States, activity in the Congo’s if the do. Even sovereign can not immune from and therefore its minerals to exposing initial action judgment entered upon an uncontested sovereign regulato was development court’s of a State. The district court acts, not foreign government ry, “when a to the conver- dismissal was tantamount market, but regulator *23 12(b)(6) motion to dismiss sion of a Rule it, the within private player of a manner summary judg- into a Rule 56 motion for are ‘commer sovereign’s actions an parties oppor- all giving ment without of the meaning the FSIA.” within cial’ present perti- to all material made tunity 607, Weltover, 112 2160. S.Ct. 504 U.S. by to such a Rule 56. See nent motion Ar also, Republic v. Weltover Inc. See of 12(b). judgment against Rule The Bank’s (2d 145, F.2d 151 Cir. gentina, uncontested, and, is valid and Congo the 1991)(“[o]nce the mar sovereign enters the facie show- my opinion, upon prima in actor, it should a commercial ketplace as bank, Congo’s prop- the ing by made the marketp subject all the rules of the to be squarely exceptions within the to erty is lace.”)2 immunity provided by the from execution companies’ oil obli- the Texas Because 1610(a)(1). § the Accordingly, dis- FSIA royalties Congo to the were pay to gation should allowed full discov- trict court have to, therefore necessary integral and would have ery against Congo, which for, commercial ac- joint venture used opportunity the Bank a fair allowed conducted, part tivity substantial all material evidence present available States, and the other Congo’s opposition to its pertinent venture, joint those parties for summary motion to dismiss or motion exceptions obligations fell within Texas-Houston, City, judgment. First Cf. provided (2d for immunity Bank, from execution N.A. v. 150 F.3d Rafidain 1610(a)(1). Cir.1998).3 § FSIA
4.
Conclusion
view,
my
agree
the district court
I
with much of the
Finally,
Although
ma-
I
reverse and
jority opinion,
allow-
would
remand
or abused its
not
discretion
erred
constantly implement
public
acts of the
"Foreign sovereigns
states restricted
sover-
eign).
their
programs
to stimulate
broad
intended
catastrophe.
economy
avoid economic
or to
upon by
relied
the district
3. The cases
court
however,
imple-
programs,
Each of these
majority
deny
discovery,
and the
or limit
through
individual transac-
mented
numerous
Mexicanos, 962
Arriba Ltd. v. Petroleos
F.2d
with a sov-
tions. To imbue each transaction
1992)
(5th
Kelly
Syria
Cir.
Shell
part of a
ereign
simply because it is
character
(5th
B.V.,
Dev.
for panel dissenting denial of Congo’s petition for PANEL ON PETITION FOR rehearing: REHEARING I. PER CURIAM: I the majority opinion commend for Republic IT ORDERED that the IS recognizing that we interpret statutes ac- Congo’s petition motion for leave to file its cording to “plain meaning” their and turn- rehearing out time is GRANTED. ing to dictionary to determine what that meaning is for the words “used for” IT IS FURTHER ORDERED that the 1610(a)(1). FSIA Unfortunately the ma- Republic Congo’s petition panel re- jority ignore chooses to parts those hearing petition, is DENIED. definition which do support overly- its out that the Congo points majority opinion narrow construction of the term. neglected explicitly this case to address analysis one of the two prongs notes, under 28 majority correctly As the itself *24 1610(a). 1610(a) provides U.S.C. Section can “used for” mean “utilize.” What the that, circumstances, majority under certain a judg- omits to mention is that “used ment creditor for” put execute also means “to into action or in “property enjoyment the United States of a service: have recourse to or of: ... in EMPLOY.” Webster’s Third Neiv Inter- activity used for commercial Dictionary national 2253 majority opinion (Philip the United States.” The B. Gove ed., 1993). clauses, ed. 3rd See also Black’s Law addressed the second of these but Gardner, ed., Dictionary is, (Bryan A. not the first. it That addressed wheth- 1999) (“[t]he application employ- 7th ed. or royalty er the tax obligations and issue ment something”); of Merriam-Webster’s for a in activity were “used commercial (Frederick Collegiate Dictionary 1301 C. States,” not but the obli- whether 1993) (“avail ed., Mish 10th ed. oneself of: gations “property were in the United ... to expend EMPLOY or consume within of meaning States” the statute. use”). putting property Thus is “used view, In our this not omission does re- for if it activity” employed commercial is quire any to the change mandate of the in, of, in the or applied service utilized for majority opinion. question The factual of activity. commercial what the and tax royalty obligations are majority improper- The uses an “used for” much appears less difficult on ly cramped meaning truncated and of legal question this record than the of de- “use”, it also mischaracterizes the assets at termining intangible royal- the situs of the in Bank issue this case which the seeks to Moreover, ty obligations. despite the argument attach. In order to make its Congo’s arguments contrary, we work, majority incorrectly describes continue to believe that the district court Congo’s royalty interest as “revenue” or appropriate is the forum to resolve the “income,” i.e., as the results or fruits of the factual question of how the uses its Congo’s right royalties to receive rather property. property right than the itself. On the however, petition panel rehearing contrary, royalty for a landowner in- is therefore an interest intangible DENIED. terest is interest royalty of stock or consider shares produc owner to a share entitling its cash, if, there “used for” the tion, as and when in kind or produc production ultimately generates free the costs which production, is Howard R. Williams & Charles tion. See 8 revenue. (2001). and Gas Law Meyer, J. Oil the ordi- majority ignores thus both Wilkinson, 133 S.W.2d Jensen v.
See also misconceives meaning of “use” and nary the usual (Tex.Civ.App.1939)(“... in- interest the nature of way a land-owner to customary here, at the conclusion to arrive volved is to value of his land for oil realize on the showing that failed make a that Bank has leased, royalty rights, and retaining get for” commer- royalty interest is “used royalty rights to share through such I these reasons believe activity. cial For from his hoped which it is will issue profits majority’s analysis is incorrect. to sell production, form of oil or land rights portions or thereof royalty such grant court’s I reverse the district would (“A others.”); 30 La.Rev.Stat. summary judgment, and remand Ann. royalty right participate is the mineral light precepts of the proceedings further of minerals from land owned production my separate opinions. discussed mineral subject or to a by another land ex- owned another. Unless servitude II. royalty qualified by parties,
pressly Congo’s request for an denying free right gross production to share royalty obli- mining drilling production opinion on the situs costs.”); Lowe, writes, Law majority and Gas factual gations “[t]he John S. Oil (1995) (“A a Nutshell 43 landowner’s what the and tax obli- question of *25 in production ... is the interest royalty appears are ‘used for’ much less gations royalty the lessor in the clause retained than legal ques- on this record difficult lease.”). gas of the oil intangi- determining tion of the situs of royalty obligations.” ble rela- simple analogy helps A here. The royalty interest and the tionship between difficulty comprehend why I cannot from that interest is the same as proceeds question the situs allows this court and dividends between shares stock duty guiding the district court shirk its ownership of consequence owed as a complex legal determination it as a share of stock has exis- shares. Just justifi- a conclusion is have to make. Such dividends, separate value tence and assuming that it is inevitable only by able royalty interest has existence landowner will find that the district court separate and value as a interest “used for” commer- royalty interest is not that interest. payments from the owed on majority If the sub silentio activity. cial Jensen, (explaining See 133 S.W.2d decision, it already reached this should has to oil royalty prior that value to interest forthrightly declare the reasons its con- “belief that production comes from likely disagree I would Although clusion. interest, working which is created reasons, they may reveal that the with the that creates the same-self lease provide not be remanded or case should rights, developed operated”). will be court if it is helpful guidance to the district majority may reasonably And while the remanded. to describe strange think that would be I think that the Upon further research enterprise for” the revenue as “used it, which deserves more usage question is one certainly created it is normal situs attention, upon and one which the district may need more in answer- guidance
court I
ing. Accordingly, grant would the Con-
go’s petition for rehearing purpose clarifying setting legal forth the
principles controlling the determina- situs
tion. MASTERSON, Jr.,
John F.
Plaintiff-Appellant, BARNHART,*
Jo Anne B. Commis Security,
sioner of Social De
fendant-Appellee.
No. 01-51137. Appeals, States Court of
Fifth Circuit.
Sept.
*26
*
automatically
Jo Anne B. Barnhart
25(d)(1).
405(g);
substi-
U.S.C.
Fed.R.Civ.P.
previous
tuted for the
Commissioner. See
notes
go
garnishees
and the
was not “commer
meaning.
Even
cial
the United States.”
that the district court was cor
assuming
VI
conclusion,
rect in this
that would tell us
royalties
obligations
and tax
according
only
how the
interpret statutes
We
they
not how
are used.
meanings.
generated,
United States v. were
plain
their
Enters., Inc.,
235, 242,
to the district court for further
Pair
489 U.S.
We remand
Ron
(1989).
1026,
dispositive
consideration of the
factual