Nextera Energy Glob. Holdings B.V. v. Kingdom of Spain

• Decision Date: 15 February 2023
• Docket Number: Civil Action 19-cv-01618 (TSC)
• Parties: NEXTERA ENERGY GLOBAL HOLDINGS B.V. and NEXTERA ENERGY SPAIN HOLDINGS B.V., Petitioners, v. KINGDOM OF SPAIN, Respondent.
• Court: U.S. District Court — District of Columbia

NEXTERA ENERGY GLOBAL HOLDINGS B.V. and NEXTERA ENERGY SPAIN HOLDINGS B.V., Petitioners,
v.
KINGDOM OF SPAIN, Respondent.

Civil Action No. 19-cv-01618 (TSC)

United States District Court, District of Columbia

February 15, 2023

MEMORANDUM OPINION

TANYA S. CHUTKAN UNITED STATES DISTRICT JUDGE

Dutch-incorporated companies NextEra Energy Global Holdings B.V. and NextEra Energy Spain Holdings B.V. (collectively, “NextEra”) have petitioned to confirm an international arbitral award they received against the Kingdom of Spain (the “Award”). Petition to Confirm International Arbitral Award Pursuant to the 1965 ICSID Convention, ECF No. 1 (“Petition”). Spain moved to dismiss the Petition, ECF No. 62 (“Spain MTD”), and NextEra cross-moved for summary judgment, ECF No. 68 (“Cross-MSJ”), as well as leave to file a surreply, ECF No. 75. In response, Spain moved to strike NextEra's cross-motion as premature, ECF No. 71. While those motions were pending, on January 12, 2023, NextEra moved for a preliminary injunction and temporary restraining order enjoining Spain from pursuing litigation in the Netherlands that would prevent NextEra from seeking to confirm the Award. ECF No. 78 (“PI/TRO Motion”).

For the reasons that follow, the court will DENY Spain's Motion to Dismiss and GRANT in part NextEra's Motion for Preliminary Injunction and Temporary Restraining Order. The court will also DENY Spain's Motion to Strike and DENY NextEra leave to file a surreply.

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I. BACKGROUND

A. Laws and Treaties

This case concerns both international treaties and domestic laws and raises complex issues about how they interact for purposes of sovereign immunity.

Along with many other nations, the United States, the Netherlands, and Spain are all parties to the 1965 Convention on the Settlement of Investment Disputes between States and Nationals of Other States (the “ICSID Convention”). The ICSID Convention establishes an arbitration regime for resolving disputes related to international investments between the treaty's members, or “Contracting States.” The Convention's Article 54(1) provides: “Each Contracting State shall recognize an award rendered pursuant to this Convention as binding and enforce the pecuniary obligations imposed by that award within its territories as if it were a final judgment of a court in that State.” Congress has confirmed that commitment by statute: “The pecuniary obligations imposed by [an ICSID Convention] award shall be enforced and shall be given the same full faith and credit as if the award were a final judgment of a court of general jurisdiction of one of the several States.” 22 U.S.C. § 1650a.

Spain and the Netherlands are also contracting parties to the Energy Charter Treaty (ECT), a multinational agreement designed to create “a legal framework in order to promote long-term cooperation in the energy field” through “complementarities and mutual benefits.” ECT art. 2. For example, the ECT entitles investors from one contracting party to receive “fair and equitable treatment” from the other contracting parties. Id. art. 10(1). Should a dispute arise, the ECT provides that each contracting party “gives its unconditional consent to the submission of [that] dispute to international arbitration”-and if a consenting investor seeks arbitration, the arbitration can be carried out under the ICSID Convention. Id. art. 26(3)-(5).

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Finally, the Foreign Sovereign Immunities Act (FSIA) provides that foreign states are immune from the jurisdiction of U.S. courts unless they fall within certain exceptions. Under the “waiver” exception, for example, U.S. courts have jurisdiction “in any case . . . in which the foreign state has waived its immunity either explicitly or by implication.” 28 U.S.C. § 1605(a)(1). And under the “arbitration” exception, U.S. courts have jurisdiction in any case “in which the action is brought . . . to confirm an award made pursuant to . . . an agreement to arbitrate, if . . . the agreement or award is or may be governed by a treaty or other international agreement in force for the United States calling for the recognition and enforcement of arbitral awards.” Id. § 1605(a)(6).

B. Facts and Procedural History

Both NextEra petitioners are private limited liability companies incorporated under the laws of the Netherlands. Petition ¶ 4. After Spain enacted legislation to encourage investment in solar power projects in its territory in 2007, “NextEra invested in the construction, development and operation of two Spanish [solar power] projects at a total cost of approximately 750 million euros.” Id. ¶ 13. But NextEra alleges that between 2012 and 2014, Spain “fundamentally and radically changed the investment regime NextEra relied on when making its investment,” causing NextEra “significant harm as a result.” Id. ¶ 14 (quotation and citations omitted). Because the Netherlands and Spain are both contracting parties to the ECT, in 2014 NextEra sought to redress its grievances by requesting arbitration under the ICSID Convention. Id. ¶ 18.

In 2015, a three-member ICSID arbitral tribunal convened to address NextEra's request, and held a hearing on all issues during December of 2016. Id. ¶ 19. In March 2019, the ICSID tribunal issued a decision in favor of NextEra. Id. at 20; see Award, ICSID Case No. ARB/14/11, Annex A: Decision on Jurisdiction, Liability and Quantum Principles, ECF No. 1-4 (“Liability Decision”). Two months later, the tribunal issued a “Final Award requiring Spain to

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pay NextEra EUR 290.6 million as damages, plus pre-judgment interest at a rate of 0.234%, compounded monthly, from June 30, 2016.” Id. ¶ 21; see Award, ICSID Case No. ARB/14/11, ECF No. 1-4.

NextEra petitioned this court to confirm the ICSID's Award against Spain. Petition, ECF No. 1. But in September 2020, the court stayed the case while Spain applied for an annulment of the Award with an ICSID Annulment Committee. ECF No. 39. The court lifted that stay in April 2022 upon receiving notice that the Annulment Committee had dismissed Spain's application. April 29, 2022 Minute Order. Shortly thereafter, Spain moved to dismiss NextEra's petitions, asserting lack of subject-matter jurisdiction, lack of personal jurisdiction, and failure to state a claim upon which relief can be granted. ECF No. 62. NextEra opposed Spain's motion and cross-moved for summary judgment. ECF No. 68.

While those motions were pending, on December 22, 2022, Spain initiated a legal action in Amsterdam (the “Dutch Action”), seeking an order requiring NextEra to “take all actions necessary to withdraw the proceedings currently pending before the United States District Court for the District of Columbia under case number 1:19-cv-01618 . . . under penalty of a daily payment of EUR 30,000 per day for each day or part of a day that Defendants fail to effect such suspension.” See PI/TRO Motion, Decl. of Bradley A. Klein, Exhibit 1, at 32-33, ECF No. 78-3 (“Dutch Writ”). Spain also requests a separate civil penalty and an injunction preventing NextEra from seeking to confirm the Award or otherwise pursue payment anywhere in the world. Id. at 33.

In response, NextEra now seeks injunctive relief of its own, asking this court to issue a preliminary injunction and temporary restraining order preventing Spain from pursuing the Dutch Action insofar as it would affect NextEra's suit here. Specifically, NextEra seeks an

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injunction stopping Spain from seeking any relief in the Dutch Action-or anywhere else-that would halt or obstruct this case, and requiring Spain to withdraw its requests for such relief in the Dutch Action-Claims (A) through (D) and (L) through (P) of the Dutch Writ. See Proposed Order Granting Preliminary Injunction at 2-3, ECF No. 78-5.

Because Spain committed to not seek any relief in the Dutch Action until at least March 1, 2023, see Joint Status Report, ECF No. 80, the court did not deem it necessary to issue a temporary restraining order before deciding whether to issue a preliminary injunction.

II. LEGAL STANDARD

A. Motion to Dismiss

“Before evaluating the availability of preliminary relief, the Court must first determine that it may properly exercise jurisdiction over the action.” Rosenkrantz v. Inter-Am. Dev. Bank, No. CV 20-3670 (BAH), 2021 WL 1254367, at *7 (D.D.C. Apr. 5, 2021) (quotation omitted), aff'd, 35 F.4th 854 (D.C. Cir. 2022); see also Aamer v. Obama, 742 F.3d 1023, 1028, 1038 (D.C. Cir. 2014) (“We begin, as we must, with the question of subject-matter jurisdiction,” then “turn to the question of whether petitioners have established their entitlement to injunctive relief.”). A defendant's “Motion to Dismiss under Rule 12(b)(1) therefore must be decided before plaintiffs' Motion for Preliminary Injunction may be considered.” Rosenkrantz, 2021 WL 1254367, at *7.

Here, Spain moves for dismissal under Rule 12(b)(1) on the grounds that it is immune from jurisdiction under the FSIA, which provides the “sole basis for obtaining jurisdiction over a foreign state in the courts of this country.” Saudi Arabia v. Nelson, 507 U.S. 349, 355 (1993) (quotation omitted). “Under the Act, a foreign state is presumptively immune from the jurisdiction of United States courts; unless a specified exception applies, a federal court lacks subject-matter jurisdiction over a claim against a foreign state.” Id. at 355.

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When a defendant challenges the factual basis for jurisdiction under an FSIA exception, the D.C. Circuit applies a burden-shifting analysis. See Agudas Chasidei Chabad of U.S. v. Russian Fed'n, 528 F.3d 934, 940 (D.C. Cir. 2008). The plaintiff “bears the initial burden of supporting its claim that the FSIA exception applies.” Chevron Corp. v. Ecuador, 795 F.3d 200, 204 (D.C. Cir. 2015) (citing Chabad, 528 F.3d at 940). “[T]his is only a burden of production”-producing evidence of the required jurisdictional facts. Id. (same). If Plaintiff meets its burden, then the “burden...