Bp Chemicals Ltd. v. Jiangsu Sopo Corp.
| Decision Date | 03 April 2002 |
| Docket Number | No. 01-2894.,No. 01-2738.,01-2738.,01-2894. |
| Citation | 285 F.3d 677 |
| Parties | BP CHEMICALS LTD., an English corporation, Appellant, v. JIANGSU SOPO CORPORATION (Group) Ltd., also known as Jiangsu Sopo (Group) Corp., also known as Jiangsu Sopo (Group) Co. Ltd.; Zhenjiang Chemical Plant, a wholly owned subsidiary of Jiangsu Sopo Corporation (Group) Ltd., Appellees, Shanghai Petrochemical Engineering Co., also known as Shanghai Petro-Chemical Engineering Corporation, Defendant. |
| Court | U.S. Court of Appeals — Eighth Circuit |
Daniel L. Brockett, Cleveland, OH, argued (James W. Satola, James B. Rosenthal, Squire, Sanders & Dempsey, L.L.P., Cleveland, OH, and Charles A. Weiss, Mark S. Deiermann, Bryan Cave, L.L.P., St. Louis, MO, on the brief), for Plaintiff-Appellant BP Chemicals Ltd.
Salem M. Katsh, New York City, argued (Jaculin Aaron, Alex V. Chachkes, Shearman & Sterling, New York City and Michael D. O'Keefe, Kenton E. Knickmeyer, Thompson Coburn LLP, St. Louis, MO, on the brief), for Defendants-Appellees Jiangsu Sopo Corp. (Group) Ltd., and Zhenjiang Chemical Plant.
Before: WOLLMAN, RICHARD S. ARNOLD and BYE, Circuit Judges.
This action between an English plaintiff and Chinese defendants requires us to navigate a jurisdictional minefield. BP Chemicals Ltd. sued Jiangsu Sopo Corporation (Sopo) alleging violations of the Lanham Act, the International Convention for the Protection of Intellectual Property, the Missouri Uniform Trade Secrets Act and Missouri common law. Sopo claimed immunity from suit under the Foreign Sovereign Immunities Act of 1976 (FSIA), Pub.L. No. 94-583, 90 Stat. 2891, because it is owned by the government of the People's Republic of China. The district court agreed and dismissed BP's action for lack of subject matter jurisdiction. BP Chems. Ltd. v. Jiangsu Sopo Corp., 144 F.Supp.2d 1140 (E.D.Mo.2001). We reverse the district court's decision and remand for further proceedings.
A few words about the procedural posture of this case are appropriate at the outset of our discussion, for that posture regulates our consideration of the facts. Sopo moved to dismiss BP's action on several grounds soon after an amended complaint was filed in October 2000. Sopo contended the district court lacked subject matter jurisdiction, personal jurisdiction, and should dismiss the action under the forum non conveniens doctrine. In this appeal, we consider only Sopo's challenge to the district court's subject matter jurisdiction, which we construe as a facial, not factual, challenge because Sopo limited its attack to the allegations in BP's amended complaint. See Osborn v. United States, 918 F.2d 724, 729 n. 6 (8th Cir.1990) ().
We observe that the parties presented the district court with a robust evidentiary record from which competing accounts of the underlying events can be discerned. It may seem odd, then, that we construe Sopo's motion as a facial jurisdictional challenge. Having closely examined the record, however, we believe the parties proffered affidavits, testimony, and documentary materials to assist the district court in deciding the ancillary issues presented in Sopo's motion, questions of personal jurisdiction and forum non conveniens. The portion of Sopo's motion devoted to subject matter jurisdiction does not draw upon facts presented in the evidentiary record. JA 480-92. Instead, Sopo contested the district court's subject matter jurisdiction by arguing the allegations in BP's amended complaint failed to erode its presumptive foreign sovereign immunity. The district court tracked Sopo's facial challenge and did not make findings of fact pertinent to establishing subject matter jurisdiction. The manner in which the district court resolved Sopo's motion obliges us to accept as true the allegations in BP's amended complaint, Titus v. Sullivan, 4 F.3d 590, 593 (8th Cir.1993), so we will not delve into possible disputes of fact brought to our attention in the parties' appellate briefs.
BP's amended complaint reveals that this action stems from its interest in certain trade secret practices and technologies. In 1986, BP acquired Monsanto Corporation's proprietary interests in the methanol carbonylation process for making acetic acid, a chemical used in making paints, plastics, resins, pharmaceutical and agrochemical products. That process entails a combination of special design features and exotic metals that cannot be found in standard texts or design manuals. BP retains trade secret interests in these combinations, features, and technologies used to design and operate an acetic acid-producing plant employing this process.
BP has licensed its trade secrets worldwide, enabling other companies to build acetic acid production plants using the methanol carbonylation process. To build those plants, BP and its licensees often relied upon outside engineering firms (vendors) to produce high-alloy equipment and other intricate components. It appears that many of these vendors operated in the United States. The vendors operated at all times under strict, contractual duties to maintain the secrecy of BP's methods and technologies during and after the construction process.
In the mid-1990s — the amended complaint is not specific — BP learned that Nooter Corporation in St. Louis, a vendor, had been asked to manufacture high-alloy equipment in connection with an acetic acid plant under construction in China. Through its own investigation, BP learned that other American vendors had received similar product specifications and directions to prepare materials needed in building an acetic acid plant. Those product specifications closely resembled trade secrets developed by Monsanto and BP. In some instances, the specifications disclosed to American vendors replicated typographical errors in original BP documents.
BP's investigation traced the disclosures to Sopo and Shanghai Petrochemical Engineering Company (SPECO), another government-owned business. Sopo allegedly worked in concert with SPECO to build the "921 plant" in China using BP's trade secret designs. BP believes SPECO acted as Sopo's purchasing agent by procuring sophisticated engineering products and equipment in the United States for Sopo to use in constructing the 921 plant. BP claims SPECO disclosed BP's trade secrets to American vendors to permit them to assess the cost and feasibility of manufacturing the requested components. SPECO also apparently signed contracts with several vendors to manufacture components used to build the 921 plant.
In February 1999, BP filed this action against Sopo, SPECO, and Nooter. BP quickly settled its claims against Nooter and SPECO defaulted. When Sopo moved to dismiss BP's complaint on the grounds mentioned above, BP opposed the motion and, in the alternative, moved to file a second amended complaint and to conduct additional discovery in China pertaining to jurisdictional facts. The district court reasoned Sopo was immune from suit in federal court under the FSIA and dismissed BP's action for lack of subject matter jurisdiction. The district court declined to reach Sopo's alternative personal jurisdiction and forum non conveniens arguments; the district court also denied BP's motion to amend its complaint and its request for further jurisdictional discovery. BP now appeals from these adverse decisions.
From the earliest days of our Republic, courts have distinguished between the public and private acts of government. See Bank of the United States v. Planters' Bank of Ga., 22 U.S. (9 Wheat.) 904, 907-908, 6 L.Ed. 244 (1824). Public acts, such as punishing criminals and printing money, emanate from the power inherent in sovereignty. Private acts, such as commercial transactions, are not unique to government and could be performed by an individual. Jurisdictional consequences flow from this distinction between public and private acts. A nation is generally immune from suit in another nation's courts in matters arising from its public or sovereign acts, but not its private or commercial acts. Saudi Arabia v. Nelson, 507 U.S. 349, 359-60, 113, S.Ct. 1471, 123 L.Ed.2d 47 (1993); Restatement (Third) of the Foreign Relations Law of the United States § 451 (1987). The FSIA endorsed this understanding of sovereign immunity: a foreign sovereign is presumptively immune from suit in federal court, 28 U.S.C. § 1604, but this presumption erodes when the suit concerns the sovereign's commercial activities and transactions, id. §§ 1602, 1605(a)(2).
Sopo is considered a "foreign sovereign" because it is owned by the government of the People's Republic of China. See id. § 1603(a)-(b). Though Sopo is ostensibly immune from suit, BP believes the district court possessed subject matter jurisdiction because its action satisfied two of the FSIA's three commercial activity exceptions that deprive a foreign sovereign of its immunity from suit. The district court disagreed, holding it lacked jurisdiction because BP's action fit neither exception. We review the district court's decision de novo. Gen. Elec. Capital Corp. v. Grossman, 991 F.2d 1376, 1380 (8th Cir. 1993).
Our review concentrates upon the first commercial activity exception, which vitiates a foreign sovereign's immunity in an action "based upon a commercial activity carried on in the United States." 28 U.S.C. § 1605(a)(2). This plain statutory language naturally lends itself to analysis in two parts. To rebut a foreign sovereign's presumption of immunity, a plaintiff's action must be (1) based upon (2) a commercial activity carried on in the United States. See id. BP contends its action meets both elements of this exception and thereby eliminates Sopo's presumptive immunity, a contention we shall explore in detail below.
The FSIA contains no definition of ...
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