U.S. Taekwondo Comm. v. Kukkiwon, Court of Appeals No. 12CA0816

• Citation: 411 P.3d 782
• Decision Date: 03 July 2013
• Docket Number: Court of Appeals No. 12CA0816
• Parties: UNITED STATES TAEKWONDO COMMITTEE, a Colorado nonprofit corporation; and U.S. Kukkiwon, Inc., a Colorado corporation, Plaintiffs–Appellees, v. KUKKIWON, a Republic of Korea special corporation, Defendant–Appellant.
• Court: Court of Appeals of Colorado

411 P.3d 782

UNITED STATES TAEKWONDO COMMITTEE, a Colorado nonprofit corporation; and U.S. Kukkiwon, Inc., a Colorado corporation, Plaintiffs–Appellees,

v.KUKKIWON, a Republic of Korea special corporation, Defendant–Appellant.

Court of Appeals No. 12CA0816

Colorado Court of Appeals, Div. VII.

Announced July 3, 2013

Sherman & Howard, L.L.C., Richard L. Tegtmeier, Colorado Springs, Colorado, for Plaintiffs–Appellees

Burg Simpson Eldredge Hersh & Jardine, P.C., Nelson P. Boyle, Englewood, Colorado, for Defendant–Appellant

Opinion by CHIEF JUDGE DAVIDSON

¶ 1 This is an interlocutory appeal of a trial court order denying motions to dismiss a breach of contract action brought against a foreign entity. We dismiss the appeal in part, affirm in part and remand.

¶ 2 Kukkiwon is a South Korean organization that promotes the martial art of Taekwondo. It initially existed as a nongovernmental entity, and so constituted, it contracted with plaintiffs, United States Taekwondo Committee and U.S. Kukkiwon, making plaintiffs its overseas branch in the United States.

¶ 3 Shortly after the contract with plaintiffs was formed, the South Korean government passed a law making Kukkiwon a "special corporation," and giving the South Korean Minister of Culture, Sports, and Tourism authority over several of Kukkiwon's activities. Subsequently, Kukkiwon notified plaintiffs that it was unilaterally cancelling the contract, and plaintiffs filed this action for breach. Defendant here is Kukkiwon as it currently exists as a "special corporation."

¶ 4 In response to plaintiffs' claim, defendant filed separate motions to dismiss for lack of subject matter jurisdiction under the Foreign Sovereign Immunities Act (FSIA), and on the ground that the act of state doctrine precluded the trial court from adjudicating plaintiffs' claim. The FSIA grants sovereign immunity to foreign states under particular circumstances. See 28 U.S.C. §§ 1603 – 1605 (2006 & Supp.2011). The act of state doctrine, by federal common law, limits the ability of United States courts to adjudicate a foreign sovereign's public acts. See W.S. Kirkpatrick & Co. v. Envtl. Tectonics Corp., Int'l, 493 U.S. 400, 404, 110 S.Ct. 701, 107 L.Ed.2d 816 (1990).

¶ 5 In the interest of judicial economy, the parties and the court agreed to combine the trial on plaintiffs' contract claim and the evidentiary hearing on defendant's motions to dismiss into a single hearing. Before the bench trial on the contract claim was completed, however, the court issued its ruling denying defendant's motions to dismiss, concluding that defendant was not entitled to dismissal based on the FSIA or the act of state doctrine.

¶ 6 Defendant immediately filed a notice of appeal and plaintiffs countered with a motion to dismiss the appeal for lack of appellate jurisdiction. Plaintiffs' motion was deferred to us by this court's motions division. Further trial on the contract claim has been stayed pending this appeal.

¶ 7 We first address plaintiffs' argument that because defendant's appeal is interlocutory, we lack jurisdiction to consider it. We disagree in part. We conclude that we have jurisdiction to address defendant's appeal from the trial court's FSIA immunity ruling, but not from the portion of the ruling pertaining to the act of state doctrine. We then address the merits of defendant's FSIA immunity appeal and conclude that the court properly denied defendant's motion to dismiss based on FSIA immunity.

I. The trial court's FSIA immunity ruling is immediately appealable.

¶ 8 We conclude that we have jurisdiction to address the trial court's FSIA immunity ruling on interlocutory appeal.

A. Our jurisdiction is governed by section 13–4–102(1), C.R.S.2012.

¶ 9 The FSIA is a federal statute that provides immunity to any "agency or instrumentality" of a foreign state unless, as pertinent here, the claim is based on "commercial activity." 28 U.S.C. §§ 1603, 1604, 1605(a)(2) (2006). Federal law governs the application of the FSIA. See Verlinden B.V. v. Cent. Bank of Nigeria, 461 U.S. 480, 497, 103 S.Ct. 1962, 76 L.Ed.2d 81 (1983). However, to determine our jurisdiction, even when, as here, the substantive issues are governed by federal law, we apply our appellate jurisdiction statute, section 13–4–102(1). See Johnson v. Fankell, 520 U.S. 911, 916, 117 S.Ct. 1800, 138 L.Ed.2d 108 (1997) (when deciding whether it has jurisdiction over appeal from state court ruling on federal qualified immunity, state appellate court applies its own appellate jurisdiction statute and its own interpretation of the terms therein); Furlong v. Gardner, 956 P.2d 545, 550 (Colo.1998) (following Johnson, 520 U.S. 911, 117 S.Ct. 1800 ).

¶ 10 Our statute permits appeals only from "final judgments." § 13–4–102(1). We are aware of no Colorado appellate decision that has addressed whether we may review, as a "final judgment" under section 13–4–102(1), an interlocutory appeal from a ruling denying FSIA immunity. However, Colorado law directs that, under these circumstances, we may look to federal authority interpreting the federal appellate jurisdiction statute, 28 U.S.C. § 1291 (2006), for guidance. See Furlong, 956 P.2d at 551–52 ( 28 U.S.C. § 1291 permits appeals from "final decisions" and is therefore analogous to section 13–4–102(1) ).

¶ 11 No party argues that section 13–4–102.1, C.R.S.2012, permitting this court under very particular circumstances to exercise discretionary jurisdiction over interlocutory appeals, is applicable here because none of the requisite procedures have been followed.

B. In the federal courts, FSIA immunity rulings are immediately appealable as "final decisions" pursuant to the federal appellate jurisdiction statute and the collateral order doctrine.

¶ 12 The federal collateral order doctrine is a "practical construction" of the finality required by 28 U.S.C. § 1291, and permits, under highly circumscribed situations, interlocutory review of a trial court ruling even if the ruling is not the last decision issued in the case. Will v. Hallock, 546 U.S. 345, 349, 126 S.Ct. 952, 163 L.Ed.2d 836 (2006).

¶ 13 Pursuant to the collateral order doctrine, to be immediately appealable a decision must "[1] conclusively determine the disputed question, [2] resolve an important issue completely separate from the merits of the action, and [3] be effectively unreviewable on appeal from a final judgment." Coopers & Lybrand v. Livesay, 437 U.S. 463, 468, 98 S.Ct. 2454, 57 L.Ed.2d 351 (1978) ; see also Cohen v. Beneficial Indus. Loan Corp ., 337 U.S. 541, 546, 69 S.Ct. 1221, 93 L.Ed. 1528 (1949) (there are some decisions that "finally determine claims of right separable from, and collateral to, rights asserted in the action, too important to be denied review and too independent of the cause itself to require that appellate consideration be deferred until the whole case is adjudicated").

¶ 14 Under federal law, FSIA immunity is immunity from suit and is effectively lost if a case is allowed to go to trial. See, e.g., La Reunion Aerienne v. Socialist People's Libyan Arab Jamahiriya, 533 F.3d 837, 843 (D.C.Cir.2008) (FSIA orders satisfy collateral order doctrine because " ‘appeal from final judgment cannot repair the damage that is caused by requiring the defendant to litigate’ " (quoting Rein v. Socialist People's Libyan Arab Jamahiriya, 162 F.3d 748, 756 (2d Cir.1998) )); Phoenix Consulting, Inc. v. Republic of Angola, 216 F.3d 36, 39 (D.C.Cir.2000) (FSIA immunity must be resolved "as early in the litigation as possible; to defer the question is to frustrate the significance and benefit of entitlement to immunity from suit" (internal quotation marks omitted)). Particularly because it involves federal government relations with foreign governments, Congress intended to have FSIA immunity determined promptly. See Compania Mexicana De Aviacion, S.A. v. U.S. Dist. Court, 859 F.2d 1354, 1358 (9th Cir.1988) (reviewing legislative history of FSIA).

¶ 15 Thus, federal courts consistently hold that FSIA immunity rulings are immediately appealable under the collateral order doctrine as (1) conclusive and final to the issue of foreign sovereign immunity, (2) distinct and severable from the issue of liability on the claim asserted in the complaint, and (3) effectively unreviewable on appeal because the asserted immunity is lost if the case improperly proceeds to trial. See, e.g., Southway v. Cent. Bank of Nigeria, 198 F.3d 1210, 1214 (10th Cir.1999) ("The denial of a claim to sovereign immunity is immediately appealable under the collateral order doctrine."); Jungquist v. Sheikh Sultan Bin Khalifa Al Nahyan, 115 F.3d 1020, 1025 (D.C.Cir.1997) (under federal law, it is "well-established that an appeal from a denial of a motion to dismiss a complaint on the ground of sovereign immunity under the FSIA satisfies the three requirements of the collateral order doctrine and may thus be brought on an interlocutory basis").

C. Guided by Furlong, 956 P.2d 545, we conclude that FSIA immunity rulings are immediately appealable in Colorado as "final judgments" within the meaning of our appellate jurisdiction statute.

¶ 16 In Furlong, the supreme court recognized that federal courts, applying the federal appellate jurisdiction statute, permit interlocutory appeal from a trial court's denial of summary judgment based on qualified immunity in 42 U.S.C. § 1983 (2006) cases, as long as the trial court's denial is based on a question of law. 956 P.2d at 552. Although our appellate jurisdiction is governed by section 13–4–102(1), the supreme court concluded that principles of neutrality and sound appellate practice compelled it to follow the practice of the federal courts and allow certain interlocutory appeals based on qualified immunity in § 1983 cases to be brought in our court. Furlong, 956 P.2d at 550–52.

¶ 17 The supreme court emphasized that under the Colorado Governmental Immunity Act (CGIA), section 24–10–108, C.R.S.2012, an interlocutory appeal from a sovereign immunity...