Devas Multimedia Private Ltd. v. Antrix Corp. Ltd.Devas Multimedia Private Ltd. v. Antrix Corp. Ltd.
SUMMARY**
Personal Jurisdiction / Foreign Sovereign Immunities Act
The panel filed an order denying petitions for rehearing en banc and directing that no further petitions will be entertained, in a case in which the panel held that the district court erred in exercising personal jurisdiction over Antrix Corp. Ltd., an Indian corporation, under the Foreign Sovereign Immunities Act, because plaintiff failed to establish that Antrix had the requisite minimum contacts for personal jurisdiction.
In a statement respecting the denial of rehearing en banc, Judge O‘Scannlain wrote that he agreed with the views expressed by Judge Bumatay in his dissent from the denial of rehearing en banc.
Dissenting from the denial of rehearing en banc, Judge Bumatay, joined by Judges Callahan, Ikuta, Bennett, R. Nelson, and VanDyke, wrote that the Foreign Sovereign Immunities Act, governing when foreign states may be sued in federal court, does not require plaintiffs to also prove “minimum contacts” to assert personal jurisdiction over a foreign state, and this court‘s error in holding otherwise should be corrected through rehearing en banc.
ORDER
The panel has unanimously voted to deny the petitions for rehearing en banc. Judge Miller and Judge Koh have voted to deny the petitions for rehearing en banc, and Judge Molloy* so recommends.
The full court has been advised of the petitions for rehearing en banc. A judge of the court requested a vote on en banc rehearing. The matter failed to receive a majority of votes of non-recused active judges in favor of en banc consideration.
The petitions for rehearing en banc, (20-36024 Dkts. No. 111, 112; 22-35085 Dkt. No. 56; 22-35103 Dkt. No. 63), are DENIED. No further petitions for rehearing or rehearing en banc will be entertained. Judge O‘Scannlain‘s statement respecting the denial of en banc rehearing and Judge Bumatay‘s dissent from the denial of en banc rehearing are filed concurrently herewith.
O‘SCANNLAIN,1 Circuit Judge, respecting the denial of rehearing en banc:
I agree with the views expressed by Judge Bumatay in his dissent from the denial of rehearing en banc.
BUMATAY, Circuit Judge, joined by CALLAHAN, IKUTA, BENNETT, R. NELSON, and VANDYKE, Circuit Judges, dissenting from the denial of rehearing en banc:
Federal courts “have no more right to decline the exercise of jurisdiction which is
In 1976, Congress enacted the Foreign Sovereign Immunities Act (“FSIA“) to govern when foreign states may be sued in federal court.
This case presents a straightforward question. Despite the FSIA‘s text, does the Act require plaintiffs to also prove “minimum contacts” to assert personal jurisdiction over a foreign state? Unlike every other federal court, the Ninth Circuit answers “yes.” And saying “yes” is a big deal—it means that we lock the courthouse doors to plaintiffs whom Congress expressly granted access. So victims of terrorism, those harmed by violations of international law, and persons who suffered from torture may be barred from seeking justice in our courts. See
The problem started more than 40 years ago. Back then, our court appended minimum contacts to the list of requirements that plaintiffs must establish to assert jurisdiction over a foreign state. See Thomas P. Gonzalez Corp. v. Consejo Nacional De Produccion De Costa Rica (”Gonzalez“), 614 F.2d 1247, 1255 (9th Cir. 1980). There, we said, “[p]ersonal jurisdiction under the [FSIA] requires satisfaction of the traditional minimum contacts standard.” Id. We thus replaced the words “shall exist” in
And we made this interpretive move under the most dubious of guises—legislative
Today, it‘s obvious that we cannot appeal to legislative history to undo a statute‘s plain meaning. See Epic Sys. Corp. v. Lewis, 584 U.S. 497, 523 (2018). So we know that Gonzalez‘s interpretation is wrong. But even if that history mattered, the Report doesn‘t say what Gonzalez thought it said about minimum contacts. The Report merely observed that the Act‘s exceptions “embodied” a minimum-contacts analysis. Gonzalez, 614 F.2d at 1255 n.5 (quoting the Committee Report). It says nothing about adding another layer of minimum-contacts review before denying foreign-state immunity. To my knowledge, no other court interprets the FSIA this way.
And nothing in the Constitution requires a minimum-contacts analysis either. Federal courts have uniformly recognized that foreign states are not entitled to the protection of minimum contacts under the Fifth Amendment. See Price v. Socialist People‘s Libyan Arab Jamahiriya, 294 F.3d 82, 99 (D.C. Cir. 2002); Frontera Res. Azerbaijan Corp. v. State Oil Co. of Azerbaijan Republic, 582 F.3d 393, 399-400 (2d Cir. 2009); Abelesz v. Magyar Nemzeti Bank, 692 F.3d 661, 694 (7th Cir. 2012). The Supreme Court has also suggested the same. See Weltover, 504 U.S. at 619. So the Due Process Clause fails to justify our wayward precedent.
Despite all this, our court not only perpetuates, but arguably expands, the minimum-contacts requirement here. See Devas Multimedia Priv. Ltd. v. Antrix Corp., 2023 WL 4884882, at *1-2 (9th Cir. 2023). While Gonzalez merely dealt with the commercial activities exception, see 614 F.2d at 1255, our court seemingly rules that the minimum-contacts inquiry extends to all exceptions under the FSIA. Devas, 2023 WL 4884882, at *1-2. In this case, we applied it to a new context—the arbitral exception—for the first time. See
This case presented an opportunity to correct our erroneous precedent and apply the FSIA the way Congress enacted it. But our court refuses to step in and denies en banc review. And it‘s hard to explain why. Sure, it‘s true that the specific dispute between Devas Multimedia and Antrix Corporation raises some other complexities—like whether Antrix is sufficiently controlled by India to be considered a foreign state. But those other questions are secondary to whether foreign states are entitled to a minimum-contacts analysis in the first place. Those subsidiary questions are thus distractions that should have been left to the three-judge panel to resolve. At a minimum, we should have
After all, how many would-be plaintiffs gave up valid claims in the Ninth Circuit because of our out-of-sync rule? How many plaintiffs had to seek redress in other courts to sidestep our precedent? And how many plaintiffs were simply kicked out of our courts by the minimum-contacts requirement? The effect of our ruling is unquestionably significant. Under a proper reading of the FSIA, those plaintiffs should be welcome to bring their claims in our circuit.
Because we fail our “unflagging” duty to hear and decide cases within our jurisdiction, I respectfully dissent from the denial of rehearing en banc.
I.
A.
Let‘s begin with a brief overview of the FSIA. The FSIA “establishes a comprehensive framework for determining whether a court in this country, state or federal, may exercise jurisdiction over a foreign state.” Weltover, 504 U.S. at 610. The Act “standardize[s] the judicial process with respect to immunity for foreign sovereign entities in civil cases.” Turkiye Halk Bankasi A.S. v. United States, 598 U.S. 264, 272 (2023).
The FSIA starts from the “baseline” that foreign states and their instrumentalities are entitled to sovereign immunity in our courts. Id. (citing
(a) The district courts shall have original jurisdiction without regard to amount in controversy of any nonjury civil action against a foreign state as defined in section 1603(a) of this title as to any claim for relief in personam with respect to which the foreign state is not entitled to immunity either under sections 1605-1607 of this title or under any applicable international agreement.
(b) Personal jurisdiction over a foreign state shall exist as to every claim for relief over which the district courts have jurisdiction under subsection (a) where service has been made under section 1608 of this title.
So whenever an exception applies, Congress grants personal jurisdiction over a foreign state “as to every claim for relief” after proper service.
The FSIA exceptions to immunity cover many subject matters.
- Commercial Activities—Cases “in which the action is based upon a commercial activity ... that ... causes a direct effect in the United States.”
28 U.S.C. § 1605(a)(2) . - Expropriation—Cases “in which rights in property taken in violation of international law are in issue and that property [has a connection to
the United States].” 28 U.S.C. § 1605(a)(3) . - Arbitration—Cases “in which the action is brought ... to confirm an award made pursuant to ... an agreement to arbitrate” including when that award “is or may be governed by a treaty or other international agreement in force ... calling for the recognition and enforcement of arbitral awards.”
28 U.S.C. § 1605(a)(6) . - Terrorism—Cases “in which money damages are sought against a foreign state for personal injury or death that was caused by an act of torture, extrajudicial killing, aircraft sabotage, hostage taking, or the provision of material support or resources ... [by] a state sponsor of terrorism.”
28 U.S.C. § 1605A .
As part of Congress‘s “carefully calibrated scheme,” it also established procedures governing suits under the FSIA. Turkiye Halk Bankasi, 598 U.S. at 273. Congress included many specifics, like a venue provision,
Finally, the FSIA does not just cover direct suits against a foreign government. Instead, “[t]he FSIA defines a ‘foreign state’ to [also] encompass instrumentalities of a foreign state.” Turkiye Halk Bankasi, 598 U.S. at 272 (citing
B.
Now, a quick rundown of this case. Antrix is a company wholly owned by the Republic of India. India incorporated Antrix to market goods and services created by the country‘s Department of Space and the Indian Space Research Organization. Devas was a private company created by a group of American investors and executives to develop telecommunications services in India. The two companies agreed to work together to build, launch, and manage telecommunication satellites. To carry out this agreement, they signed a contract which included an arbitration provision. Eventually, Antrix sought to terminate the agreement; Devas responded by initiating arbitration. A foreign arbitration tribunal found for Devas and awarded it $562.5 million in damages. Devas and Antrix then filed dueling petitions in the Indian courts—Devas‘s to confirm the award and Antrix‘s to set it aside.
While the Indian proceedings were pending, Devas sought to confirm the award elsewhere. It petitioned to confirm the arbitration award in the Western District of Washington, where Antrix has business relationships with several firms. Devas relied on the arbitral exception to the FSIA. See
The district court rejected Antrix‘s jurisdictional challenge. It first held that personal jurisdiction was satisfied under the FSIA, because the “parties d[id] not dispute that personal jurisdiction exists as a matter of statute.” The district court then concluded that foreign states are not entitled to minimum contacts under the Due Process Clause and, even if they were,
After that notice of appeal, there were two developments. First, the Indian government placed Devas into liquidation on the grounds that it had fraudulently conducted its affairs. As a result, several shareholders of the company and its American subsidiary intervened. The district court then permitted the intervenors post-judgment discovery and granted them leave to register the judgment. Both Antrix and Devas (under the control of a liquidator) appealed the order granting them leave to register the judgment.
Second, during the appeal, an Indian court set aside the arbitration award. Antrix now claims that the award is no longer enforceable, which Devas and the intervenors dispute. Because these events occurred after the notice of appeal here, Antrix sought a limited remand to determine whether the district court should reverse its judgment on the merits.
On appeal, our court brushed past all these developments and complications and simply held that the district court lacked personal jurisdiction over Antrix. The panel ruled that the district court was bound to apply the minimum-contacts analysis from Gonzalez because (1) the Supreme Court has not contradicted our prior holding and (2) our court‘s minimum-contacts inquiry is based on a statutory interpretation of the FSIA. The panel then easily rejected the argument that minimum contacts were satisfied here. Because it concluded that the district court lacked personal jurisdiction, the panel didn‘t address any other question on appeal.
Judge Miller wrote a concurrence, joined by Judge Koh. He explained that “our precedent applying the minimum-contacts test to the exercise of personal jurisdiction over foreign states has no foundation in the Constitution or the FSIA, and it is contrary to the views of other courts of appeals.” Devas, 2023 WL 4884882, at *4 (Miller, J., concurring). He recommended that, “[i]n an appropriate case,” we should reconsider our erroneous precedent en banc. Id.
So the sole question for the en banc court was whether plaintiffs must prove minimum contacts before federal courts may assert personal jurisdiction over foreign states under the FSIA. Of course, answering that question may lead to other questions.1 But that‘s no reason to punt on this case. As we often do, we could have left those subsidiary questions to the three-judge panel or district court after correcting our precedent. We were wrong to shy away from this significant question.
I now turn to that question.
II.
While the Supreme Court has called the FSIA Congress‘s “comprehensive framework”
This is not the law enacted by Congress and signed by the President. We have no authority to make up our own rules, especially when dealing with international affairs. See Rubin v. Islamic Republic of Iran, 583 U.S. 202, 208 (2018) (“[C]ourts traditionally deferred to the decisions of the political branches ... on whether to take jurisdiction over actions against foreign sovereigns.” (simplified)). And nothing in the Due Process Clause mandates our statutory interpretation. Rather than extending our dubious precedent, we should have used this case to discard it.
A. The FSIA‘s Text Doesn‘t Require Minimum Contacts
Despite the clear command that personal jurisdiction over a foreign state “shall exist” when an enumerated exception applies,
What supported this minimum-contacts regime? The tersest of reasoning.
Gonzalez first looked to the phrase “direct effect” in one exception—the commercial activities exception—and seemingly read an across-the-board minimum-contacts requirement from those two words. The commercial activities exception provides for jurisdiction “upon an act outside the territory of the United States in connection with a commercial activity of the foreign state elsewhere and that act causes a direct effect in the United States.”
Next, Gonzalez looked outside the text—to legislative history. It stated that “[t]he legislative history of the Act confirms that the reach of
That‘s the entirety of Gonzalez‘s textual analysis. Based on these flimsy data points, Gonzalez broadly proclaimed: “Personal jurisdiction under the Act requires satisfaction of the traditional minimum contacts standard.” Id.
The errors here are obvious—
First, Gonzalez didn‘t ground its analysis in the text of
Every circuit that has analyzed the FSIA has refused to find a statutory minimum-contacts requirement under
Second, Gonzalez simply mixes up subject-matter jurisdiction and personal jurisdiction. The commercial activities exception, along with the other FSIA exceptions, provides subject-matter jurisdiction to federal courts. See Siderman de Blake v. Republic of Argentina, 965 F.2d 699, 706 (9th Cir. 1992) (“A federal court lacks subject-matter jurisdiction over a claim against a foreign state unless the claim falls within an exception to immunity under the FSIA.“). But subject-matter jurisdiction is a separate question from personal jurisdiction, which is governed by
Third, Gonzalez was wrong to alter the clear text of
Even for those who find legislative history persuasive, it does not support Gonzalez‘s minimum-contacts test for the FSIA. Gonzalez‘s analysis of that legislative history consisted merely of a block quote of a House Committee Report:
(b) Personal Jurisdiction. Section 1330(b) provides, in effect, a Federal long-arm statute over foreign states (including political subdivisions, agencies, and instrumentalities of foreign states). It is patterned after the long-arm statute Congress enacted for the District of Columbia. Public Law 91-358, sec. 132(a), title I, 84 Stat. 549. The requirements of minimum jurisdictional contacts and adequate notice are embodied in the provision. Cf. International Shoe Co. v. Washington, 326 U.S. 310 (, 66
S.Ct. 154, 90 L.Ed. 95) (1945), and McGee v. International Life Insurance Co., 355 U.S. 220, 223 (, 78 S.Ct. 199, 201, 2 L.Ed.2d 223) (1957). For personal jurisdiction to exist under section 1330(b), the claim must first of all be one over which the district courts have original jurisdiction under section 1330(a), meaning a claim for which the foreign state is not entitled to immunity. Significantly, each of the immunity provisions in the bill, sections 1605-1607, requires some connection between the lawsuit and the United States, or an express or implied waiver by the foreign state of its immunity from jurisdiction. These immunity provisions, therefore, prescribe the necessary contacts which must exist before our courts can exercise personal jurisdiction. Besides incorporating these jurisdictional contacts by reference, section 1330(b) also satisfies the due process requirement of adequate notice by prescribing that proper service be made under section 1608 of the bill. Thus, sections 1330(b), 1608, and 1605- 1607 are all carefully interconnected. (Footnotes omitted.)
Gonzalez, 614 F.2d at 1255 n.5 (quoting H.R. Rep. No. 94-1487, at 13-14 (1976)).
Although unclear, perhaps Gonzalez relied on the Report‘s statement that the “requirements of minimum jurisdictional contacts and adequate notice are embodied in”
All told, this was the time to correct our circuit‘s misstep. All parties agree that an FSIA exception applied and service was proper. Devas, 2023 WL 4884882, at *1. With those two requirements satisfied, Congress‘s command should have been mandatory. Rather than adhering to the plain text of the statute, we instead expanded our precedent to cover all FSIA exceptions.
B. The Due Process Clause Doesn‘t Require Minimum Contacts
Perhaps realizing Gonzalez‘s shaky textual foundation, some of our later precedents began couching our minimum-contacts inquiry as a constitutional requirement. See Gregorian v. Izvestia, 871 F.2d 1515, 1528-29 (9th Cir. 1989) (sourcing the requirement in the “constitutional constraints of the Due Process clause“); Altmann v. Republic of Austria, 317 F.3d 954, 969-70 (9th Cir. 2002) (after concluding that the FSIA is satisfied, conducting a minimum-contacts analysis “[a]ssuming that a foreign state is a ‘person’ for purposes of the Due Process Clause“). But the Due Process Clause does not rescue our improper addition of a minimum-contacts requirement. As a matter of original meaning and modern precedent, the Fifth Amendment‘s Due Process Clause does not extend the benefit of minimum contacts to foreign states.
Since Weltover, the consensus of circuit courts has followed the Supreme Court‘s lead and definitively held that foreign states are not entitled to the protections of the Due Process Clause.
The D.C. Circuit gave the most thorough explanation. It said that conferring due process protections to foreign states was “not only textually and structurally unsound, but it would distort the very notion of ‘liberty’ that underlies the Due Process Clause.” Price, 294 F.3d at 99. According to that court, common usage of the term “person” didn‘t “include the sovereign.” Id. at 96 (quoting Will v. Michigan Dep‘t of State Police, 491 U.S. 58, 64 (1989)). Indeed, the court said, “foreign states stand on a fundamentally different footing than do private litigants who are compelled to defend themselves in American courts.” Id. at 98. Unlike most “person[s],” “foreign nations are the juridical equals of the government that seeks to assert jurisdiction over them.” Id.
And structurally, the D.C. Circuit described foreign states as “entirely alien to our constitutional system.” Id. at 96. Even though domestic States “derive important benefits and must abide by significant limitations as a consequence of their participation,” they receive no protection under the Due Process Clause. Id. Given this, the D.C. Circuit reasoned that foreign states must also be excluded. Id. at 97. It would be “strange,” the court observed, if domestic States, which were “integral and active participants in the Constitution‘s infrastructure,” were unprotected by the Due Process Clause while foreign states were. Id. at 96.
“[H]istory and tradition” also counseled in favor of excluding foreign states from the Due Process Clause, according to the D.C. Circuit. Id. at 97. As a historical matter, the “principles of comity and international law ... protect[ed] foreign governments.” Id. Thus, “[t]he most a foreign state can demand is that other states observe international law, not that they enforce provisions of domestic law.” Id. (quoting Lori Fisler Damrosch, Foreign States and the Constitution, 73 Va. L. Rev. 483, 520 (1987)). So “foreign states have available to them a panoply of mechanisms in the international arena through which to seek vindication or redress.” Id. at 99 (citing Damrosch, supra, at 525).
Based on all this, the D.C. Circuit held that “[n]either the text of the Constitution, Supreme Court decisions construing the Due Process Clause, nor long standing tradition provide a basis for extending the reach of this constitutional provision for the benefit of foreign states.” Id.
The Second Circuit and Seventh Circuit agree. See Frontera, 582 F.3d at 400 (“[F]oreign states are not ‘persons’ entitled to rights under the Due Process Clause.“); Abelesz, 692 F.3d at 694 (“Other circuits have confronted the issue and have held that foreign states are not ‘persons’ entitled to rights under the Due Process Clause. ... We agree.“). After Weltover, no other circuit court has ruled otherwise.2
And the original meaning of the Due Process Clause supports the view that foreign states are not entitled to the protection of minimum contacts.
To be fair, recent scholarship has suggested foreign states were understood to be “persons” at the time of the Founding. For example, one author argues that Founding-era sources show “foreign states were viewed as ‘persons’ entitled to ‘process.‘” Ingrid Wuerth, The Due Process and Other Constitutional Rights of Foreign Nations, 88 Fordham L. Rev. 633, 637 (2019). As an example, Emmerich de Vattel, an influential 18th-century international law scholar, wrote, “[t]he law of nations is the law of sovereigns: free and independent states are moral persons, whose rights and obligations we are to establish in this treatise.” Emmerich de Vattel, The Law of Nations or the Principles of Natural Law, bk. I, ch. I § 12 (1758) (Charles G. Fenwick trans., 1916).
Another disagrees. According to this scholar, it is “unlikely that the framers of the Fifth Amendment would have viewed foreign states as persons given that foreign sovereigns were treated as completely immune from suit at the time of the founding.” Donald Earl Childress III, Questioning the Constitutional Rights of Foreign Nations, 88 Fordham L. Rev. Online 60, 70 (2019).
But even assuming some process is due—an emerging consensus shows that the original understanding of the Fifth Amendment‘s Due Process Clause does not require minimum contacts for foreign states. Instead, these sources all agree that the political branches may dictate what process is afforded to foreign sovereigns. As Professor Wuerth concludes, “[t]hat foreign states are protected by due process does not tell us what the content of those protections are[.] ... [W]hen it comes to personal jurisdiction, due process limitations may be largely coextensive with the process that Congress chooses to provide.” Wuerth, supra, at 679-86; see Stephen E. Sachs, The Unlimited Jurisdiction of the Federal Courts, 106 Va. L. Rev. 1703, 1743 (2020) (“The Fifth Amendment bars the execution of a federal judgment only if the federal court lacked jurisdiction. And Congress gets to answer th[e jurisdiction] question.“); Max Crema & Lawrence B. Solum, The Original Meaning of “Due Process of Law” in the Fifth Amendment, 108 Va. L. Rev. 447, 530-31 (2022) (“Because the Due Process of Law Clause requires process, ... service on a defendant” may be “sufficient to validate personal jurisdiction whether or not the International Shoe Co. v. Washington minimum contacts test was satisfied.” (simplified)).
Indeed, the view that Congress could legislate the bounds of jurisdiction over foreign sovereigns finds support in a well-known case from Justice Joseph Story. Riding circuit in 1828, Justice Story considered whether a French plaintiff could
So modern jurisprudence, tugged by the gravitational pull of original meaning, points to excluding foreign states from the protection of minimum contacts. Like every other circuit court post-Weltover, we should have followed suit. This was yet another reason to take this case en banc.
III.
Forty years ago, our court disregarded the plain language of the FSIA to add minimum contacts to the requirements for personal jurisdiction over a foreign state. And we did so using questionable interpretive moves. Today, the consensus among circuit courts squarely rejects any constitutional basis for a minimum-contacts regime. So, yet again, the Ninth Circuit stands alone. And when it comes to the law, experimentation isn‘t usually a virtue.
Our atextual reading creates a needless roadblock for plaintiffs seeking to assert their rights against foreign states and their agents. And we are simply incompetent to interfere in these matters of foreign affairs. Imagine requiring a state sponsor of terrorism to have minimum contacts with our country before allowing our citizens to vindicate the death or injury of a loved one at the hands of a terrorist. See
With no constitutional provision requiring otherwise, we should have deferred to the political branches here. FSIA plaintiffs deserve a full opportunity to litigate their cases as Congress determined. By freelancing in this area, we do the legislative process, separation of powers, and rule of law a disservice.
Faced with an opportunity to correct course, we again close the courthouse doors. And we refuse to act despite overwhelming evidence that our position is wrong. Our failure to fix our precedent is a serious mistake.
I respectfully dissent from the denial of rehearing en banc.