216 F.3d 29 (D.C. Cir. 2000), 99-7220, El-Hadad v. United Arab Emirates

Docket Nº:99-7220
Citation:216 F.3d 29
Party Name:Mohamed Salem El-Hadad, Appellee v. United Arab Emirates and The Embassy of the United Arab Emirates, Appellants
Case Date:June 16, 2000
Court:United States Courts of Appeals, Court of Appeals for the District of Columbia Circuit
 
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216 F.3d 29 (D.C. Cir. 2000)

Mohamed Salem El-Hadad, Appellee

v.

United Arab Emirates and The Embassy of the United Arab Emirates, Appellants

No. 99-7220

United States Court of Appeals, District of Columbia Circuit

June 16, 2000

Argued May 19, 2000

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Appeal from the United States District Court for the District of Columbia(No. 96cv01943)

James M. Johnstone argued the cause for appellant. John P. Szymkowicz was on the brief for appellant.

Sylvia J. Rolinski argued the cause and filed the brief for appellee.

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Before: Ginsburg, Tatel, and Garland, Circuit Judges.

Opinion of the court filed by Circuit Judge Garland.

Garland, Circuit Judge:

Plaintiff Mohamed Salem ElHadad is a citizen of Egypt and a former employee of the Embassy of the United Arab Emirates located in Washington, D.C. After his employment was terminated, El-Hadad sued both the Embassy and the United Arab Emirates (collectively, "the U.A.E.") for alleged breach of contract and defamation.1 The U.A.E. moved to dismiss, asserting immunity from suit under the Foreign Sovereign Immunities Act (FSIA), 28 U.S.C. §§ 1602 et seq. The district court denied the U.A.E.'s motion on the pleadings, holding that the employment relationship between the U.A.E. and El-Hadad came within the "commercial activity" exception to sovereign immunity because El-Hadad was not a national of the U.A.E. The court also rejected the U.A.E.'s contention that even if plaintiff's suit fell within the "commercial activity" exception, the FSIA contains an "exception to that exception" for defamation claims.

The U.A.E. appeals from the denial of its motion to dismiss. We conclude that there are factual questions that must be resolved before the relationship between El-Hadad and the U.A.E. can be characterized as commercial rather than governmental, and we therefore reverse in part and remand for further proceedings. We agree with the district court, however, that if El-Hadad's action is based upon commercial activity, the U.A.E. is not immune from his claim for defamation.

I

The denial of a foreign state's motion to dismiss on the ground of sovereign immunity is subject to interlocutory appeal under the collateral order doctrine. See Trans-america Leasing, Inc. v. La Republica de Venezuela, 200 F.3d 843, 847 (D.C. Cir. 2000). Because the district court decided the motion on the pleadings, our standard of review is de novo. See id.

The FSIA provides the sole avenue by which American courts can obtain jurisdiction over foreign states. See Republic of Argentina v. Weltover, Inc., 504 U.S. 607, 611 (1992).Under the FSIA, a foreign state is immune from the jurisdiction of our courts unless certain statutory exceptions are met.See 28 U.S.C. §§ 1604-1605. The principal exception at issue here is that for "commercial activity." The Act provides that a "foreign state shall not be immune from the jurisdiction of courts of the United States or of the States in any case-... (2) in which the action is based upon a commercial activity carried on in the United States by the foreign state...." Id. § 1605(a).

Our precedent makes clear that the employment of personnel by a foreign state is not per se commercial activity under the FSIA.2 In Broadbent v. Organization

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of American States, applying an analysis based on the FSIA, we held that the firing of staff members of the General Secretariat of the Organization of American States (OAS) was not commercial activity and therefore that the OAS was immune from suit for improper discharge. See 628 F.2d 27, 35 (D.C. Cir. 1980). In support, we cited the House Report on the FSIA, which states in part: "Also public or governmental and not commercial in nature, would be the employment of diplomatic, civil service, or military personnel...." H.R. Rep. No. 94-1487, at 16 (1976).3 The words replaced by the ellipses in this quotation will soon become important, but for now it is enough to note that, as we concluded in Broadbent, the "report clearly marks employment of civil servants as noncommercial for purposes of restrictive immunity." 628 F.2d at 34.4

The U.A.E. contends that El-Hadad was a civil servant of the U.A.E., and that his firing is therefore noncommercial and immune from suit in our courts. Although El-Hadad is an Egyptian citizen, it is uncontested that he worked for the government of the U.A.E. for sixteen years.5 For the first thirteen of those years, he worked in the U.A.E. as an auditor. Beginning in January of 1993, El-Hadad worked as an auditor in the Cultural Division of the U.A.E.'s Embassy in Washington. The U.A.E. terminated El-Hadad's employment in February 1996. El-Hadad alleges that he was terminated after he uncovered misappropriation of U.A.E. public funds. The U.A.E. disputes this allegation, but contends that even if it were true, the auditing function ElHadad performed is the work of a civil servant and the U.A.E. is therefore immune from suits arising from such activity.

The district court held that regardless whether El-Hadad was a member of the U.A.E.'s civil service, his employment would nonetheless constitute commercial activity because he is not a U.A.E. national. The court based that conclusion on language in our Broad bent opinion, which stated that there is "an exception from the general rule" that civil service employment is noncommercial "in the...

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