U.S. v. Moats
| Citation | 961 F.2d 1198 |
| Decision Date | 04 June 1992 |
| Docket Number | No. 91-2800,91-2800 |
| Parties | UNITED STATES of America, Plaintiff, v. Bruce C. MOATS, et al., Defendants, REPSA FABRICACION, S.A., Intervenor-Third Party Plaintiff-Appellee, v. PETROLEOS MEXICANOS (PEMEX), Third-Party Defendant-Appellant. Fifth Circuit |
| Court | United States Courts of Appeals. United States Court of Appeals (5th Circuit) |
Douglas S. Johnston, Houston, Tex., for Petroleos Mexicanos.
Arne M. Ray, Houston, Tex., for Bruce Moats, Sr., R. Contreras and Repsa Fabricacion, S.A.
Appeal from the United States District Court for the Southern District of Texas.
Before BROWN, KING, and WIENER, Circuit Judges.
Petroleos Mexicanos (Pemex), the Mexican national oil company, appeals from a district court order holding that the Foreign Sovereign Immunities Act (FSIA) 1 does not shield it from a third-party complaint filed by Repsa Fabricacion, S.A. (Repsa). Our first task is to determine whether we have jurisdiction to entertain Pemex's appeal. Finding that we do, we proceed to the FSIA immunity issue. We conclude that, because the cause of action asserted by Repsa is not sufficiently connected to Pemex's commercial activity in the United States to support the exercise of jurisdiction over Pemex, the district court's order must be reversed.
In 1981 and 1982, Laredo National Bank (Laredo) made a series of loans to two Mexican companies, Repsa and Thermorepsa, S.A. The notes were guaranteed by Bruce C. Moats and Roberto Contreras, officers of Repsa. Additional guaranties were given by the Export-Import Bank of the United States (Eximbank), an independent agency of the United States government which helps finance the export of American goods and services. The loans enabled Repsa to finance the purchase of specialized steel products in the United States. Repsa needed the steel to satisfy contracts with Pemex to fabricate electrostatic dehydrators and desalters for Pemex's oil refineries. Shortly after Repsa had begun working on the steel it purchased, Pemex refused to fully honor the contracts and Repsa defaulted on the loans. Not surprisingly, Pemex's actions caused severe difficulties at Repsa. The Pemex work orders represented a significant portion of Repsa's business, and Pemex's refusal to pay made it impossible for Repsa to pay its employees. The union representing the Repsa workers went on strike and the work in progress remained in the factory. In March 1988, Repsa, Pemex, the union, and the company that had issued the performance bond on the fabrication work settled the matter and entered into a formal settlement agreement.
Meanwhile, back in the United States the Eximbank paid Laredo pursuant to its guaranty and took assignments of the notes. In December 1988, the United States, on behalf of the Eximbank, brought suit against Moats and Contreras 2 in the United States District Court for the Southern District of Texas in an effort to recover the outstanding principal and interest on the notes. Two years later, Repsa was granted leave to intervene and file a third-party complaint against Pemex. This appeal concerns only the third-party action between Repsa and Pemex; the United States, Moats and Contreras entered into an agreed judgment disposing of the main action.
Repsa's complaint concerned the March 1988 settlement agreement executed in Mexico. According to Repsa, the agreement provided that Pemex would receive all the inventory and work in progress from the factory and that Repsa would be paid for the value of its materials and products as they existed at the time they were removed from the factory. Repsa alleged that Pemex had removed the materials from the Repsa factory in May 1988, but breached the agreement by refusing to pay. Repsa sought, as damages, the value of the materials plus interest, costs and attorney's fees.
Pemex filed a motion to dismiss, arguing (1) that under the FSIA, Pemex was immune from the jurisdiction of the district court with respect to the claims asserted by Repsa; and (2) that the settlement agreement upon which the complaint was predicated contained a forum selection clause which directed the parties to a Mexican forum for the resolution of disputes. The district court held a hearing, and, on June 12, 1991, denied the motion to dismiss without opinion.
The procedural saga from this point forward relates to the problem of appellate jurisdiction. On June 21, Pemex filed (1) a motion for reconsideration and (2) a motion to certify an interlocutory appeal. In the motion for reconsideration, Pemex asserted that the judge's comments at the hearing gave the clear impression that the motion to dismiss would be granted. Consequently, Pemex was surprised by the court's order. Directing the court to the arguments advanced in the original motion to dismiss, Pemex urged the court to reconsider and grant the motion. In the motion to certify an interlocutory appeal, Pemex asserted that it could appeal on the immunity issue as a matter of right, but that, to the extent the order rejected the argument on the forum selection issue, it could not appeal unless the district court granted certification pursuant to 28 U.S.C. § 1292(b).
On July 11, Pemex filed a notice of appeal from the June 12 dismissal (erroneously stating that the dismissal order was dated July 13), pointing out that Stena Rederi AB v. Comision de Contratos del Comite, 923 F.2d 380 (5th Cir.1991), permitted an immediate appeal from the denial of a motion to dismiss based on FSIA immunity. On August 14, the district court, again without opinion, denied Pemex's motion for reconsideration, but certified its order for interlocutory appeal.
On August 23, Pemex filed a "Petition for Permission to Appeal From an Interlocutory Order Pursuant to 28 U.S.C. § 1292(b)" in this court. Pemex indicated that it had already filed a notice of appeal with respect to the FSIA immunity issue, and asserted that a difference of opinion on the question whether the forum selection clause should be respected was substantial enough to warrant interlocutory appeal. A panel of this court denied leave to take an interlocutory appeal. Citing, inter alia, Association of Co-op Members, Inc. v. Farmland Indus., Inc., 684 F.2d 1134 (5th Cir.1982), cert. denied, 460 U.S. 1038, 103 S.Ct. 1428, 75 L.Ed.2d 788 (1983), the panel stated that the district court had failed to satisfy the requirements under 28 U.S.C. § 1292(b) for certifying a question for interlocutory appeal. United States v. Moats, No. 91-9154 (Oct. 8, 1991). 3
We confront two distinct questions of appellate jurisdiction. First, we respond to Repsa's argument that we have no jurisdiction to hear this appeal from a non-final order denying a motion to dismiss based on FSIA immunity. Second, we determine whether Pemex properly filed a notice of appeal from the district court's order.
Although the district court did not specify lack of immunity, as opposed to inapplicability of the forum selection clause, as the reason for denying Pemex's motion to dismiss, neither did it indicate that FSIA immunity was not a factor in its decision. More importantly, the effect of the order is to require Pemex to defend the lawsuit. As the purpose behind collateral order appeals from denials of FSIA immunity is to effectuate the guarantee that immune parties will not become embroiled in litigation, see Rush-Presbyterian-St. Luke's Medical Center v. Hellenic Republic, 877 F.2d 574, 576 n. 2 (7th Cir.), cert. denied, 493 U.S. 937, 110 S.Ct. 333, 107 L.Ed.2d 322 (1989), we treat the order as holding that Pemex does not have sovereign immunity.
We recently followed several circuits and held that a district court's refusal to dismiss on the grounds of FSIA immunity is immediately appealable under the collateral order doctrine. Stena, 923 F.2d at 385. The Stena decision would appear to dispose of Repsa's contention that Pemex may not appeal this order. Repsa raises arguments, however, which deserve some attention.
Repsa suggests that Stena permits us to hear an appeal from the denial of FSIA immunity only where the issues are purely legal. In this case, Repsa contends, there is evidence before the district court (in the form of affidavits from Repsa officials Moats and Contreras) which indicates that Pemex had sufficient contacts in the United States to enable an American court to assert jurisdiction over it. Thus, there are factual questions relevant to the issue of immunity which preclude our exercise of jurisdiction over the appeal. Moreover, Repsa says, one of the four requirements for collateral order appeals--a risk of irreparable loss if an immediate appeal is not taken, see EEOC v. Neches Butane Products Co., 704 F.2d 144, 148 (5th Cir.1983)--is absent in this case.
Repsa is correct that we have authority to decide only legal issues when we review an appeal from a collateral order. See Mitchell v. Forsyth, 472 U.S. 511, 527-28, 105 S.Ct. 2806, 2816-17, 86 L.Ed.2d 411 (1985) (). This rule carries even more weight here because the district court resolved FSIA immunity, an issue of subject matter jurisdiction, Stena, 923 F.2d at 386, on the basis of the complaint. Cf. Williamson v. Tucker, 645 F.2d 404, 413 (5th Cir.), cert. denied, 454 U.S. 897, 102 S.Ct. 396, 70 L.Ed.2d 212 (1981) ().
Whether Pemex is immune depends on the applicability of the "commercial activity" exception of the FSIA:
(a) 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...
To continue reading
Request your trial
-
Coleman v. Alcolac, Inc.
...done in the instant case, the burden shifts to the Plaintiff to show that one of the exceptions to immunity exists. United States v. Moats, 961 F.2d 1198, 1205 (5th Cir.1992); Stena Rederi AB v. Comision de Contratos del Comite, 923 F.2d 380, 389-390 n. 14 (5th Cir.1991). Plaintiffs have th......
-
Federal Ins. Co. v. Richard I. Rubin & Co., Inc.
...at 527, 105 S.Ct. at 2816 ("qualified immunity is in part an entitlement not to be forced to litigate"); see also United States v. Moats, 961 F.2d 1198, 1201 (5th Cir.1992) ("the purpose behind collateral order appeals from denials of FSIA immunity is to effectuate the guarantee that immune......
-
Raccoon Recovery v. Navoi Mining and Metallurgical
...40 (D.C.Cir.2000) (under FSIA, foreign sovereign has immunity from trial and the attendant burdens of litigation); United States v. Moats, 961 F.2d 1198, 1203 (5th Cir.1992) ("sovereign immunity is an immunity from the burdens of becoming involved in any part of the litigation process, from......
-
Janvey v. Libyan Inv. Auth.
...only when one of the exceptions to foreign sovereign immunity ... applies.” (alterations in original)).22 See United States v. Moats, 961 F.2d 1198, 1205 (5th Cir. 1992).23 Id.24 Id.25 Arbaugh v. Y & H Corp. , 546 U.S. 500, 514, 126 S.Ct. 1235, 163 L.Ed.2d 1097 (2006). Importantly, the subj......