OI EUROPEAN GROUP B.V. v. BOLIVARIAN REPUBLIC OF VENEZUELA; NORTHROP GRUMMAN SHIP SYSTEMS, INC, f/k/a Ingalls Shipbuilding, Inc. v. THE MINISTRY OF DEFENSE OF THE REPUBLIC OF VENEZUELA; ACL1 INVESTMENTS LTD., ACL2 INVESTMENTS LTD., LDO (CAYMAN) XVIII LTD. v. BOLIVARIAN REPUBLIC OF VENEZUELA; RUSORO MINING LIMITED v. BOLIVARIAN REPUBLIC OF VENEZUELA; KOCH MINERALS SARL, KOCH NITROGEN INTERNATIONAL SARL v. BOLIVARIAN REPUBLIC OF VENEZUELA; GOLD RESERVE INC. v. BOLIVARIAN REPUBLIC OF VENEZUELA
Nos. 23-1647, 23-1648, 23-1649, 23-1650, 23-1651, 23-1652, 23-1781
United States Court of Appeals for the Third Circuit
July 7, 2023
PRECEDENTIAL
Opinions of the United States Court of Appeals for the Third Circuit
7-7-2023
OI European Group BV v. Bolivarian Republic of Venezuela
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“OI European Group BV v. Bolivarian Republic of Venezuela” (2023). 2023 Decisions. 619. https://digitalcommons.law.villanova.edu/thirdcircuit_2023/619
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UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT
Nos. 23-1647, 23-1648, 23-1649, 23-1650, 23-1651, 23-1652, 23-1781
OI EUROPEAN GROUP B.V. v. BOLIVARIAN REPUBLIC OF VENEZUELA
PETROLEOS DE VENEZUELA, S.A., Appellant in No. 23-1647
NORTHROP GRUMMAN SHIP SYSTEMS, INC, f/k/a Ingalls Shipbuilding, Inc. v. THE MINISTRY OF DEFENSE OF THE REPUBLIC OF VENEZUELA
PETROLEOS DE VENEZUELA, S.A., Appellant No. 23-1648
ACL1 INVESTMENTS LTD.; ACL2 INVESTMENTS LTD.; LDO (CAYMAN) XVIII LTD. v. BOLIVARIAN REPUBLIC OF VENEZUELA
RUSORO MINING LIMITED v. BOLIVARIAN REPUBLIC OF VENEZUELA
PETROLEOS DE VENEZUELA, S.A., Appellant No. 23-1650
KOCH MINERALS SARL; KOCH NITROGEN INTERNATIONAL SARL v. BOLIVARIAN REPUBLIC OF VENEZUELA
PETROLEOS DE VENEZUELA, S.A., Appellant No. 23-1651
GOLD RESERVE INC. v. BOLIVARIAN REPUBLIC OF VENEZUELA
PETROLEOS DE VENEZUELA, S.A., Appellant No. 23-1652
OI EUROPEAN GROUP B.V. v. BOLIVARIAN REPUBLIC OF VENEZUELA, Appellant No. 23-1781
District Judge: Honorable Leonard P. Stark
Argued June 1, 2023
Before: BIBAS, MATEY, and FREEMAN, Circuit Judges.
(Filed: July 7, 2023)
Jonathan M. Albano
Christopher L. Carter
Morgan Lewis & Bockius
One Federal Street
Boston, MA 02110
Jody C. Barillare
Morgan Lewis & Bockius
1201 N Market Street
Suite 2201
Wilmington, DE 19801
James D. Nelson
David B. Salmons [ARGUED]
1111 Pennsylvania Avenue NW
Suite 800 North
Washington, DC 20004
Counsel for Plaintiff - Appellee in Nos. 23-1647 & 23-1781
Laura D. Jones
Peter J. Keane
Pachulski Stang Ziehl & Jones
919 N Market Street
P.O. Box 8705, 17th Floor
Wilmington, DE 19801
Robert H. Poole, II
Alston & Bird
1201 W Peachtree Street
One Atlantic Center, Suite 4900
Atlanta, GA 30309
Rajat Rana
Alexander A. Yanos
Alston & Bird
90 Park Avenue
12th Floor
New York, NY 10016
Counsel for Plaintiffs - Appellees in Nos. 23-1648 & 1651
Joshua S. Bolian
Riley & Jacobson
1906 W End Avenue
Nashville, TN 37203
Ashby & Geddes
500 Delaware Avenue
P.O. Box 1150, 8th Floor
Wilmington, DE 19899
Counsel for Plaintiffs - Appellees in No. 23-1649
James E. Berger
DLA Piper
1251 Avenue of the Americas
27th Floor
New York, NY 10020
R. Craig Martin
DLA Piper
1201 N Market Street
Suite 2100
Wilmington, DE 19801
Counsel for Plaintiff - Appellee in No. 23-1650
Katherine G. Connolly
Norton Rose Fulbright
555 California Street
Suite 3300
Los Angeles, CA 94104
Matthew H. Kirtland
Norton Rose Fulbright
799 9th Street NW
Suite 1000
Washington, DC 20001
Stephanie S. Riley
Matthew P. Ward
Womble Bond Dickinson
1313 N Market Street
Suite 1200
Wilmington, DE 19801
Counsel for Plaintiff - Appellee in No. 23-1652
Aubre Dean
Kevin A. Meehan
Juan O. Perla
Joseph D. Pizzurro
Allesandra D. Tyler
Curtis Mallet-Prevost Colt & Mosle
101 Park Avenue
34th floor
New York, NY 10178
Counsel for Intervenor - Appellant Petroleos de Venezuela, S.A. in Nos. 23-1647, 23-1648, 23-1649, 23-1650, 23-1651, 23-1652, 23-1781
Ginger D. Anders
Kathleen A. Foley
Elaine J. Goldenberg
Donald B. Verrilli, Jr. [ARGUED]
Sarah Weiner
Munger Tolles & Olson
601 Massachusetts Avenue NW
Suite 500e
Washington, DC 20001
Counsel for Defendant - Appellee Bolivarian Republic of Venezuela in Nos. 23-1647, 23-1648, 23-1649, 23-1650, 23-1651, 23-1652, 23-1781
Matthew S. Rozen
Lucas C. Townsend
Gibson Dunn & Crutcher
1050 Connecticut Avenue NW
Suite 300
Washington, DC 20036
Rahim Moloo
Jason W. Myatt
Robert L. Weigel
Gibson Dunn & Crutcher
200 Park Avenue
47th Floor
New York, NY 10166
Counsel Amicus Curiae Crystallex International Corp in Nos. 23-1647, 23-1648, 23-1649, 23-1650, 23-1651, 23-1652, 23-1781
OPINION OF THE COURT
MATEY, Circuit Judge.
Sovereignty shoulders “[t]hat power . . . whose actions are not subject to the controul of any other power, so as to be annulled at the pleasure of any other human will.” Hugo Grotius, The Rights of War and Peace 62 (A.C. Campbell
In this consolidated appeal, six judgment creditors of the Bolivarian Republic of Venezuela hope to attach property held by Petróleos de Venezuela, S.A. (“PDVSA“), Venezuela‘s national oil company. It all arises from a long-running dispute. Four years ago, this Court wrote the most recent chapter, holding PDVSA operated as Venezuela‘s alter ego and allowing a judgment creditor (Crystallex International Corporation) to attach PDVSA‘s shares in a U.S. subsidiary. Our six creditors2 followed in those footsteps and registered
I.
Venezuela boasts the “largest proven oil reserves in the world,” a stockpile long under the “significant control” of the state. App. 30 (citations omitted). Venezuela formed PDVSA in 1975 to exploit those resources, but this case has little to do with oil. It centers on Venezuela‘s expropriation of glass containers and mining interests, missed payments for warship repairs, and bond defaults. And it continues a story we recently summarized in the parallel suit brought by Crystallex International Corporation against Venezuela over the expropriation of gold deposits. We begin with an even shorter summary.
A.
In 2011, Venezuela nationalized several gold mines and seize the surrounding factories without compensation. That, Crystallex alleged, breached its agreement with Venezuela for
PDVSA intervened in the attachment proceeding and moved to dismiss based on its claim to sovereign immunity. Crystallex II, 932 F.3d at 134. The District Court denied the motion, finding PDVSA was Venezuela‘s “alter ego” under the principles outlined in First National City Bank v. Banco Para El Comercio Exterior de Cuba, 462 U.S. 611 (1983) (”Bancec“). See Crystallex I, 333 F. Supp. 3d at 404–14. That finding made PDVSA‘s property subject to execution to satisfy Venezuela‘s debt. Id. at 416–17.
We affirmed that decision. See Crystallex II, 932 F.3d at 150–51. We pointed to Venezuela‘s economic control over and profit-sharing with PDVSA, its heavy hand in managing PDVSA‘s affairs, the value extracted from PDVSA, and the ability to avoid obligations in U.S. courts by retaining a separate identity. Id. at 146–49. All enough, we concluded, to show that PDVSA was Venezuela‘s alter ego. Id. at 152 (“Indeed, if the relationship between Venezuela and PDVSA cannot satisfy the Supreme Court‘s extensive-control requirement, we know nothing that can.“). And we likewise affirmed the order permitting attachment of PDVSA‘s shares under the FSIA. Id.
Hoping to seize on Crystallex‘s success, Creditors also obtained arbitration awards against Venezuela and Venezuela‘s Ministry of Defense over debts incurred under broken contracts. Creditors then confirmed their arbitration awards in U.S. courts, registered those judgments with the Delaware District Court pursuant to
In 2018, Venezuelan President Nicolás Maduro disqualified opposition candidates for the presidency and declared himself the victor. Dissatisfied, the National Assembly named opposition leader Juan Guaidó Interim President of Venezuela. In 2019, the U.S. Government recognized Guaidó as Interim President and explicitly withdrew recognition of the Maduro Government, although it acknowledged Maduro‘s continued power in Venezuela. See Jiménez v. Palacios, 250 A.3d 814, 822 (Del. Ch. 2019). In 2019, Guaidó took control of the shares of PDVH, appointing an ad hoc board of directors of PDVSA to manage the U.S. subsidiaries. Guaidó remained Interim President for the rest of the time period relevant to this appeal.
Despite those changes, the Delaware District Court granted Creditors’ motion, concluding they had rebutted the presumption that Venezuela and PDVSA are separate and established PDVSA as the alter ego of Venezuela subject to the
PDVSA appealed (and Venezuela intervened),7 challenging the alter-ego finding and asking us to consider the attachment issue under a theory of “pendent appellate jurisdiction.” PDVSA also asked for an emergency stay on both divestiture grounds and the traditional discretionary stay factors. After granting an administrative stay, we ordered merits briefing on an expedited schedule. Agreeing with the District Court‘s well-reasoned opinion and declining to reach the attachment issue, we will affirm.8
II.
We review a narrow question: Did the District Court properly deny PDVSA immunity? The FSIA permitted the District Court to exercise jurisdiction over Venezuela to enforce a judgment based on confirmed arbitration awards against the country.9 And “so long as PDVSA is Venezuela‘s alter ego under Bancec, the District Court had the power to issue a writ of attachment on that entity‘s non-immune assets to satisfy the judgment against the country.” Crystallex II, 932 F.3d at 139. Although PDVSA points to some changes in the
A.
Enacted in 1976, the FSIA specifies when United States courts will recognize claims of sovereign immunity. Our interpretation of the text must give effect to the legislature‘s charge, Brown v. Barry, 3 U.S. (3 Dall.) 365, 367 (1797), stated through the “ordinary meaning . . . at the time Congress enacted the statute,” Perrin v. United States, 444 U.S. 37, 42 (1979). Because interpretation “is a holistic endeavor,” United Sav. Ass‘n of Tex. v. Timbers of Inwood Forest Assocs., Ltd., 484 U.S. 365, 371 (1988), some context is key to understanding Congress‘s aim, see Felix Frankfurter, Some Reflections on the Reading of Statutes, 47 Colum. L. Rev. 527, 538–39 (1947) (Legislation “seeks to obviate some mischief, to supply an inadequacy, to effect a change of policy, to formulate a plan of government.“); see also 1 William Blackstone, Commentaries *61, *87 (George Sharswood ed., 1893) (1765).
The traditional understanding that foreign nations enjoyed “absolute independence” from federal jurisdiction, see, e.g., Schooner Exch. v. McFaddon, 11 U.S. (7 Cranch) 116, 137 (1812), gave way to a restrictive theory of immunity as nations became more commercially interconnected, see George K. Foster, When Commercial Meets Sovereign: A New Paradigm for Applying the Foreign Sovereign Immunities Act in Crossover Cases, 52 Hous. L. Rev. 361, 369–72 (2014). Applying this restrictive theory, the Executive determined case-by-case whether a foreign nation would receive sovereign
So the Executive asked Congress to make the matter a judicial determination, reasoning “that courts are better equipped than the State Department to make immunity decisions based on law rather than politics.” Adam S. Chilton & Christopher A. Whytock, Foreign Sovereign Immunity and Comparative Institutional Competence, 163 U. Pa. L. Rev.
B.
The FSIA provides that foreign states are immune from the jurisdiction of American courts, subject only to exceptions in previous international agreements and the FSIA itself. See
The Supreme Court rejected this reading in Bancec. See 462 U.S. at 621. Although the Court acknowledged that
But like any presumption, this one can be rebutted. The Court “suggested that liability [for instrumentalities] would be warranted, for example, ‘where a corporate entity is so extensively controlled by [the state] that a relationship of principal and agent is created,’ or where recognizing the state
As we did in Crystallex II, 932 F.3d at 141, we consider the Bancec factors described in Rubin and
C.
Having surveyed the “why” and “how” behind instrumentality sovereignty, we turn to the “what“: the facts that should be considered. The District Court evaluated the actions of both the Guaidó and Maduro governments. Appellants’ arguments against this approach mostly skip references to the state and instead stress the word “government,” a term absent from the relevant FSIA provisions. Venezuela calls PDVSA‘s relationship to the Maduro Regime “[i]rrelevant,” Venezuela Reply Br. 12, and insists we look only to the actions taken by the Guaidó Government and the Ad Hoc Board. We disagree. Text, tradition, and legislative aim all point to the sovereign nation of Venezuela as the operative comparator for our alter-ego analysis. So we must consider the actions of both governments.
1.
First, the text. The FSIA codifies foreign sovereign immunity for a “foreign state,”
It also follows Bancec, where, despite the facts flowing from the aftermath of the Cuban Revolution, the Supreme Court never mentioned the Castro Regime. Instead, it framed its analysis as determining whether the government instrumentality of Cuba “may be held liable for actions taken by the sovereign.” Bancec, 462 U.S. at 621. Strong evidence that the relevant “government” in a Bancec analysis is the
2.
Second, tradition, which accepted that the “sovereign power” does not change “whatever appearance the outward form and administration of the government may put on.” 1 Blackstone, Commentaries *49. The Supreme Court has long embraced this differentiation between government representatives and a sovereign. Take The Sapphire, where French officials sued in a United States court for damages caused in a collision between a French and American ship. 78 U.S. (11 Wall.) 164, 167 (1870). Defendants sought dismissal, arguing the collision happened under the reign of Napoleon III, who had just been deposed. Id. at 166. That was the wrong focus, the Court explained, because the “[t]he foreign state is the true and real owner of its public vessels of war. . . . The . . . party in power[] is but the agent and representative of the national sovereignty. A change in such representative works no change in the national sovereignty or its rights.” Id. at 168.
Or consider Guaranty Trust Co. of New York v. United States, where the Soviet Union sued to recover a bank deposit made sixteen years earlier by the Provisional Government of Russia. 304 U.S. 126, 129 (1938). All agreed that the Soviet Government had only recently been recognized by the United States, making this action one of the first for which its representatives could appear in U.S. courts on behalf of Russia. Id. at 138 n.4. Not enough to toll a six-year statute of limitations, said the Court, because, regardless of which representatives are recognized, the “the rights of a sovereign state are vested in the state rather than in any particular government which may purport to represent it.” Id. at 137.
Now, as before, “[r]ulers come and go; governments end and forms of government change; but sovereignty survives.” United States v. Curtiss–Wright Export Corp., 299 U.S. 304, 316 (1936).
3.
Third, legislative aim as informed by history. An essential tool of statutory construction that uncovers 1) “how the common law stood at the making of the act“; 2) “what the mischief was, for which the common law did not provide“; and 3) “what remedy the [legislature] provided to cure this mischief.” 1 Blackstone, Commentaries *87. All “to suppress the mischief and advance the remedy.” Id. As recounted, the FSIA was enacted against the common law of foreign sovereign immunity that included Executive determinations. But Congress understood the State Department to have “sought and supported the elimination of its role with respect to claims against foreign states and their agencies or instrumentalities.”
D.
Knowing what facts to consider—the actions of both the Guaidó and Maduro governments as the totality of the sovereign conduct of Venezuela—similarly answers the “when” issue. The parties present dueling interpretations of the relevant timeframe for considering Venezuela‘s actions. We did not resolve the issue in Crystallex II. See 932 F.3d at 144. On remand, the District Court thought it improper to consider any date after the service of the writ of attachment but acknowledged that consideration of historical events may be necessary for alter-ego analysis. Crystallex Int‘l Corp. v. Bolivarian Republic of Venezuela, 2021 WL 129803, at *6 & n.4 (D. Del. Jan. 14, 2021). PDVSA and Venezuela argue that the relevant inquiry begins the moment of the filing of the
We again decline to take either path. As with the commercial activity determination, “narrowing the temporal
Little imagination is required: a state could quickly scale back oversight, announce laudable (but long-away) reforms, pass promises of new corporate independence, and perhaps commission a blue-ribbon study panel or two. All while its practices dating back to the injury show an alter-ego relationship. Nor is exclusive reliance on the time of injury a satisfying approach. Cf. EM Ltd. v. Banco Central de la República Argentina, 800 F.3d 78, 84–85, 92–94 (2d Cir. 2015) (considering, in alter-ego analysis, sovereign‘s billion-dollar borrowing from instrumentality after plaintiffs first sought attachment). The conduct of the Castro Regime in Bancec19 shows how a state determined to avoid creditors
We heed the charge of the Supreme Court drawing on the “application of internationally recognized equitable principles to avoid the injustice that would result from permitting a foreign state to reap the benefits of our courts while avoiding the obligations of international law.” Id. at 633–34. And we conclude the alter-ego inquiry should consider all relevant facts up to the time of the service of the writ of attachment.
III.
Considering the totality of Venezuela‘s control over PDVSA, it is clear PDVSA is Venezuela‘s alter ego. As in Crystallex II, we draw from the ”Bancec factors,” namely:
(1) the level of economic control by the government; (2) whether the entity‘s profits go to the government; (3) the degree to which government officials manage the entity or otherwise have a hand in its daily affairs; (4) whether the government is the real beneficiary of the entity‘s conduct; and (5) whether adherence
to separate identities would entitle the foreign state to benefits in United States courts while avoiding its obligations.
Crystallex II, 932 F.3d at 141 (quoting Rubin, 138 S. Ct. at 823).
1. Economic Control
Venezuela exerts significant economic control over PDVSA. Start with the Venezuelan Constitution: Article 12 provides that hydrocarbon deposits within Venezuelan territory are government property, Article 302 reserves state control over petroleum activity, and Article 303 enshrines that the State must retain all shares in PDVSA. Crystallex II, 932 F.3d at 147. These statements of authority are not merely aspirational; Venezuelan authorities have dictated PDVSA‘s sales practices and prices, inside Venezuela and abroad. Id. From 2010 to 2016, PDVSA contributed around $77 billion to Venezuelan allies, and in 2017, topped off the tank with the announcement of a $1.2 billion payment on PDVSA bonds along with plans to restructure PDVSA‘s debt. Id. at 147–48.
Appellants argue drastic changes arrived in 2019, but as the District Court explained, new structures did not alter Venezuela‘s significant control. In March 2019, Maduro ordered the transfer of PDVSA‘s European Office from Lisbon to Moscow. Manuel Salvador Quevedo Fernández, a National Guard Major General who was Minister of Housing and Habitat before being appointed by Maduro as both oil minister and president of PDVSA, announced the completion of the European Office‘s move that September. A month later, he
Much the same has followed in the United States, where the Guaidó Government holds direct access to PDVSA‘s U.S. bank accounts, manages (and offered to renegotiate) PDVSA‘s bond debt, sent PDVSA money earmarked for legal bills, and considers PDVSA‘s property “Venezuelan assets held abroad.” App. 44–46.
True, the Guaidó Government has encouraged PDVSA‘s Ad Hoc Board to become more independent. But given the Maduro Government‘s continued extreme control of PDVSA in Venezuela and abroad, and the Guaidó Government‘s substantial control of PDVSA‘s American operations, the facts reveal Venezuela‘s significant economic control of PDVSA through both rival governments.
2. Profits
Not all the Bancec factors are complicated inquires, and here, just as we explained in Crystallex II, “[a]s PDVSA‘s lone shareholder, all profit ultimately runs to the Venezuelan government.” 932 F.3d at 148. Profits, we noted, that PDVSA paid back to Venezuela accompanied by taxes and royalties, sometimes at an artificially high rate. Id. And the Guaidó Government retains direct access to PDVSA‘s U.S. bank
3. Management
Venezuelan officials are vital to management of PDVSA and maintain a strong presence in its daily affairs. We explained that “President Maduro appoint[ed] PDVSA‘s president, directors, vice-presidents, and members of its shareholder council.” Id. Appointments that included roles for military leaders and high government officials, sharing office space with the Ministry of Petroleum and Mining. Id. Even lower-level employees faced threats of termination if they did not attend Maduro‘s political rallies and vote for his coalition in elections. See id. Nothing has changed since 2019, with Maduro calling on PDVSA workers to attack Guaidó, tasking the Minister of Petroleum to restructure PDVSA and attend an OPEC meeting on behalf of both Venezuela and PDVSA, and making political announcements from PDVSA‘s offices.
Similarly, as the Delaware District Court found, “Mr. Guaidó [is empowered] to appoint and remove an Ad Hoc Board of Directors to exercise rights as PDV Holding‘s shareholder, including appointing and removing board members to PDV Holding, CITGO, and other affiliates.” App. 46–47 (citations omitted).20 “PDVSA‘s Ad Hoc Board acknowledges that it operates at the ‘directives’ of the Guaidó Government.” App. 47. The National Assembly requires
The parties disagree about the degree of that control, with PDVSA arguing it all falls short of complete day-to-day operational command. But neither this Court nor the Supreme Court has ever held absolute day-to-day control over operations to be necessary or even the touchstone of the alter-ego inquiry. We do not buck that trend, and instead look to all, not one, of the facts. Together, they reveal a high degree of governmental management of PDVSA‘s affairs.
4. Beneficiaries
PDVSA exists to benefit Venezuela. PDVSA paid Venezuela‘s administrative fees for Venezuela‘s arbitration with Crystallex, and Venezuela gave PDVSA a number of mining rights for no consideration. Crystallex II, 932 F.3d at 149. Venezuela committed PDVSA to sell oil to Caribbean and Latin American allies at steep discounts to further Venezuela‘s policies, often with deferred payments to Venezuela, not PDVSA. See id. at 147–49. Senior members of the Maduro Regime used PDVSA‘s aircraft for state purposes, a practice that continued well after the 2019 election.
The Guaidó Government has not taken identical steps, but it still views PDVSA as key to advancing its political goals. The Delaware District Court found that PDVSA‘s Ad Hoc
5. Equity
Consider, finally, how Venezuela arrives in this Court. The state owes on judgments but denies we have jurisdiction to allow remedies aimed at PDVSA. All while “PDVSA, and by extension Venezuela, derives significant benefits from the U.S. judicial system.” Crystallex II, 932 F.3d at 149. PDVSA enjoys the benefits and protections of United States law, including 2020 bonds “backed by the common stock and underlying assets of U.S.-based corporations,” with “the U.S. legal system [a]s the backstop that gives substantial assurance to investors who buy PDVSA‘s debt.” Id. (internal citations omitted). Observations that still ring true.
Venezuela responds that this rationale would demand an alter-ego finding in every case. That concern is misplaced. Access to the courts of the United States is more than an incidental benefit for PDVSA and its three Delaware corporation subsidiaries. And we again note that our analysis checks the entire record, not detached boxes.
IV.
PDVSA and Venezuela ask us to consider an issue beyond the Delaware District Court‘s denial of sovereign immunity: the attachment of PDVSA‘s shares in PDVH. But Congress has only given the federal circuit courts jurisdiction over “appeals from all final decisions of the district courts.”
Despite the clarity of
Under Cohen‘s test, concluding an appeal of a denial of sovereign immunity is immediately appealable makes sense. A
Still, concerns remain, and the Supreme Court has “described the conditions for collateral order appeal as stringent.” Digital Equip. Corp. v. Desktop Direct, Inc., 511 U.S. 863, 868 (1994). The doctrine as announced through Cohen is an example of “the displacement of apparently controlling, nonjudicial, primary texts.” Mitchel de S.-O.-l‘E. Lasser, “Lit. Theory” Put to the Test: A Comparative Literary Analysis of American Judicial Tests and French Judicial Discourse, 111 Harv. L. Rev. 689, 702 (1998). And the trend has only become trendier given the “textualization of precedent,” the practice of treating judicial opinions like statutes. See Peter M. Tiersma, The Textualization of Precedent, 82 Notre Dame L. Rev. 1187, 1188 (2007).
Heeding that warning, in the years after Swint, this Court has exercised pendent appellate jurisdiction in only two narrow circumstances: 1) when an otherwise non-appealable order is “inextricably intertwined” with an appealable order, and 2) when “necessary to ensure meaningful review of the appealable order.” E.I. DuPont de Nemours & Co. v. Rhone Poulenc Fiber and Resin Intermediates, S.A.S., 269 F.3d 187, 203 (3d Cir. 2001). Orders are “inextricably intertwined” “only when the appealable issue cannot be resolved without reference to the otherwise unappealable issue.” Reinig v. RBS Citizens, N.A., 912 F.3d 115, 130 (3d Cir. 2018) (citations and quotation marks omitted). That “the two orders arise out of the same factual matrix” is insufficient, “even if considering the orders together may be encouraged under considerations of efficiency.” Id. (citation and quotation marks omitted). The question is whether the appealable order can be “dispose[d]
Venezuela argues not only that the immunity and attachment issues are “inextricably intertwined,” but that they are “coextensive.” Venezuela Opening Br. 44. Because the District Court applied the Bancec common law alter-ego test to the immunity inquiry, Venezuela says, “sufficient overlap in the facts relevant to both the appealable and nonappealable issues” warrants review of the attachment issue now. Venezuela Opening Br. 44–45 (citation omitted). We disagree. The immunity inquiry used the Bancec factors to determine whether a state exercises such extensive control over an instrumentality that it may be considered an “alter ego” of the state. The attachment inquiry invoked Bancec to evaluate whether PDVSA‘s property can be attached to pay out a judgment. Resolution of the immunity issue does not dictate the outcome of the attachment issue. So we will not wade into the attachment waters, mindful that “loosely allowing pendent appellate jurisdiction would encourage parties to parlay . . . collateral orders into multi-issue interlocutory appeal tickets.” Swint, 514 U.S. at 49–50. Even if we could consider the attachment issue, we would decline to do so in our discretion. See United States v. Spears, 859 F.2d 284, 287 (3d Cir. 1988) (“[O]nce we have taken jurisdiction over one issue in a case, we may, in our discretion, consider otherwise nonappealable issues in the case as well, where there is sufficient overlap in the facts relevant to [the appealable and nonappealable] issues to warrant our exercising plenary authority over [the] appeal.” (quoting San Filippo v. United States Tr. Co., 737 F.2d 246, 255 (2d Cir. 1984))).
The District Court did not clearly err in its factual determinations and did not legally err in its application of the Bancec factors. For the second time in five years, we conclude that PDVSA is the alter ego of Venezuela, and we will affirm the District Court‘s denial of sovereign immunity to PDVSA.
Notes
- which is a separate legal person, corporate or otherwise, and
- which is an organ of a foreign state or political subdivision thereof, or a majority of whose shares or other ownership interest is owned by a foreign state or political subdivision thereof, and
- which is neither a citizen of a State of the United States as defined in
section 1332(c) and (e) of this title, nor created under the laws of any third country.