Jam v. Int'l Fin. Corp.

• Decision Date: 06 July 2021
• Docket Number: C/w 20-7097,No. 20-7092,20-7092
• Citation: 3 F.4th 405
• Parties: Budha Ismail JAM, et al., Appellants v. INTERNATIONAL FINANCE CORPORATION, Appellee
• Court: U.S. Court of Appeals — District of Columbia Circuit

3 F.4th 405

Budha Ismail JAM, et al., Appellants

v.INTERNATIONAL FINANCE CORPORATION, Appellee

No. 20-7092

C/w 20-7097

United States Court of Appeals, District of Columbia Circuit.

Argued April 26, 2021

Decided July 6, 2021

Rehearing En Banc Denied August 13, 2021

Richard L. Herz argued the cause for appellants. With him on the briefs were Marco Simons and Michelle Harrison.

Henry C. Su was on the brief for amici curiae Center for International Environmental Law, et al. in support of appellants.

Jeffrey T. Green argued the cause for appellee. With him on the brief were Dana Foster and Maxwell J. Kalmann. Marisa S. West entered an appearance.

Before: Rogers and Tatel, Circuit Judges, and Randolph, Senior Circuit Judge.

Concurring opinion by Senior Circuit Judge Randolph.

Rogers, Circuit Judge:

Appellants allege that the International Finance Corporation negligently lent funds to a power-generation project in India, which damaged their environment, health, and livelihoods. Because the gravamen of appellants’ complaint is injurious activity that occurred in India, the United States’ courts lack subject-matter jurisdiction, see OBB Personenverkehr AG v. Sachs , 577 U.S. 27, 35–36, 136 S.Ct. 390, 193 L.Ed.2d 269 (2015), and the district court's dismissal on that ground is affirmed.

I.

Appellants are residents of Gujarat, India, a government entity from the same region, and a nonprofit focused on fishworkers’ rights. The International Finance Corporation ("IFC") is an international organization, established by Articles of Agreement among its 185 member countries.¹ Appellants’ allegations have been fully described in prior opinions. See Jam v. Int'l Fin. Corp. (Jam II ), ––– U.S. ––––, 139 S. Ct. 759, 765–67, 203 L.Ed.2d 53 (2019) ; Jam v. Int'l Fin. Corp. (Jam I ), 860 F.3d 703, 704 (D.C. Cir. 2017) ; Jam v. Int'l Fin. Corp. (Jam III ), 442 F. Supp. 3d 162, 166–69 (D.D.C. 2020). For present purposes, a summary will suffice: Appellants allege that they have been injured by operations of the coal-fired Tata Mundra Power Plant (the "Plant"), which is located in India and owned and operated by Coastal Gujarat Power Limited ("CGPL"). IFC loaned funds for the project and conditioned disbursement of those funds on CGPL's compliance with certain environmental standards. Appellants allege that IFC negligently failed to ensure that the Plant's design and operation complied with these environmental standards but nonetheless disbursed funds to CGPL. These supervisory omissions and disbursement decisions allegedly took place at IFC's headquarters in the United States, specifically in Washington, D.C.

The district court initially dismissed the case for lack of subject-matter jurisdiction, based on then-binding circuit precedent that international organizations like IFC enjoyed virtually absolute immunity from suit. Jam v. Int'l Fin. Corp. , 172 F. Supp. 3d 104, 108–09, 112 (D.D.C. 2016). This court affirmed in Jam I , 860 F.3d at 708, but the Supreme Court reversed, holding that such organizations possess more limited immunity equivalent to that enjoyed by foreign governments, Jam II , 139 S. Ct. at 765. Applying the new standard on remand, the district court in February 2020 again ruled that IFC was immune from appellants’ claims. Jam III , 442 F. Supp. 3d at 179. The district court in August 2020 denied as futile appellants’ motion for leave to amend their complaint, reasoning that IFC would remain entitled to immunity, even crediting the allegations of the proposed amended complaint. Jam v. Int'l Fin. Corp. , 481 F. Supp. 3d 1, 4, 13–14 (D.D.C. 2020).

II.

The parties dispute whether the district court's February 2020 order granting IFC's renewed motion to dismiss the complaint was final and appealable. The court need not resolve that issue. Appellants timely filed a motion to amend their complaint pursuant to Federal Rule of Civil Procedure 15 or, in the alternative, Rule 59(e). The pendency of such a motion tolls the time to appeal. FED. R. APP. P. 4(a)(4)(A)(iv) ; Obaydullah v. Obama , 688 F.3d 784, 788 (D.C. Cir. 2012). After the district court's August 2020 denial of the motion for leave to amend the complaint, appellants timely filed a notice of appeal. The August 2020 decision was a final, appealable order. Therefore, no matter whether the February decision was final, the appeal is timely, and this court has jurisdiction under 28 U.S.C. § 1291. We turn to the merits.

Under the International Organizations Immunities Act ("IOIA"), international organizations "enjoy the same immunity from suit and every form of judicial process as is enjoyed by foreign governments, except to the extent that such organizations may expressly waive their immunity for the purpose of any proceedings or by the terms of any contract." 22 U.S.C. § 288a(b). In Jam II , the Supreme Court held that the IOIA confers on international organizations the same immunity available to foreign governments under the Foreign Sovereign Immunities Act ("FSIA"). 139 S. Ct. at 764–66, 772.

The FSIA, in turn, provides that foreign states are immune from the jurisdiction of United States’ courts, 28 U.S.C. § 1604, subject to a handful of exceptions, id. §§ 1605–07. At issue in this appeal is the commercial activity exception, which provides that a foreign state shall not be immune from jurisdiction

in any case ... in which the action is based [1] upon a commercial activity carried on in the United States by the foreign state; or [2] upon an act performed in the United States in connection with a commercial activity of the foreign state elsewhere; or [3] 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[.]

Id. § 1605(a)(2). The third clause, concerning foreign activity with a direct effect in the United States, is not at issue here.

The "based upon" phrase in the commercial activity exception requires courts to identify the "gravamen" of the lawsuit: "[I]f the ‘gravamen’ of a lawsuit is tortious activity abroad, the suit is not ‘based upon’ commercial activity within the meaning of the FSIA's commercial activity exception." Jam II , 139 S. Ct. at 772. In Saudi Arabia v. Nelson , 507 U.S. 349, 113 S.Ct. 1471, 123 L.Ed.2d 47 (1993), the Supreme Court explained that in identifying what an action is "based upon" — its "gravamen" — courts should examine "those elements of a claim that, if proven, would entitle a plaintiff to relief under his theory of the case." Id. at 357, 113 S.Ct. 1471. There, the plaintiff had been hired to work in a government-owned Saudi Arabian hospital. Id. at 351–52, 113 S.Ct. 1471. The plaintiff alleged that after he reported safety defects at the hospital, Saudi authorities detained and tortured him. Id. at 352–53, 113 S.Ct. 1471. The Court held that the lawsuit was not based upon domestic commercial activity, despite allegations that Saudi Arabia had tortiously failed to warn the plaintiff of the risks when it recruited him in the United States. Id. at 358, 363, 113 S.Ct. 1471.

More recently, in OBB Personenverkehr AG v. Sachs , 577 U.S. 27, 136 S.Ct. 390, 193 L.Ed.2d 269 (2015), the Supreme Court clarified that the gravamen analysis does not require courts to undertake a "claim-by-claim, element-by-element analysis," but rather to "zero[ ] in on the core of [the] suit." Id. at 34–35, 136 S.Ct. 390. "What matters is the crux — or, in legal-speak, the gravamen — of the plaintiff's complaint, setting aside any attempts at artful pleading." Fry v. Napoleon Cmty. Schs. , ––– U.S. ––––, 137 S. Ct. 743, 755, 197 L.Ed.2d 46 (2017). In Sachs , the plaintiff had purchased a Eurail pass from a travel agent in the United States and was later injured by a government-owned railway car in Austria. 577 U.S. at 30, 136 S.Ct. 390. The plaintiff sued for, among other things, failure to warn that the train and boarding platform were defectively designed. Id. The Court concluded that the gravamen of the suit was tortious activity abroad, because the plaintiff's claims all "turn[ed] on the same tragic episode in Austria, allegedly caused by wrongful conduct and dangerous conditions in Austria, which led to injuries suffered in Austria." Id. at 35, 136 S.Ct. 390. The domestic sale of the railway pass did not change the result because there was "nothing wrongful about the sale of the Eurail pass standing alone. Without the existence of the unsafe boarding conditions in [Austria], there would have been nothing to warn Sachs about when she bought the Eurail pass." Id. at 35–36, 136 S.Ct. 390. However the suit was "fram[ed]," "the incident in [Austria] remain[ed] at its foundation." Id. at 36, 136 S.Ct. 390. Any other approach, the Court observed, "would allow plaintiffs to evade the [FSIA's] restrictions through artful pleading." Id.

In the instant case, paralleling Sachs , all of appellants’ claims turn on allegedly wrongful conduct in India, which has led to injuries suffered in India. The Washington, D.C. decisionmaking that appellants criticize consists of providing funding that facilitated conduct in India. Absent the operation of the Plant in India, or appellants’ injuries in India, there would have been nothing wrongful about IFC's disbursement of funds. Even crediting the allegation that the Plant would not have been built without IFC's funding, see Prop. Am. Compl. ¶ 57, the operation of the Plant is what actually injured appellants, cf. Sachs , 577 U.S. at 34, 136 S.Ct. 390, and the manner of its construction and operation is the crux of their complaint. The gravamen of appellants’ lawsuit is therefore conduct that occurred in India, not in the United States, and IFC consequently cannot be subjected to the jurisdiction of United States’ courts under the commercial activity exception. That conclusion holds for each of the various theories that appellants have pleaded: negligent supervision, public nuisance, trespass, breach of contract to...