Merrick Garland on International Issues
Posted on March 16, 2016
Foreign Sovereign Immunity
Three of Judge Garland’s FSIA opinions were in terrorism-related cases. In Oveissi v. Islamic Republic of Iran, 573 F.3d 835 (D.C. Cir. 2009), where the heir of Gen. Gholam Oveissi, the head of Iran’s military under the Shah, alleged that the Iranian government had funded the Hezbollah terrorist group, which murdered Oveissi in Paris in 1984. The Court easily came to the conclusion that Iran lacked foreign sovereign immunity, because the terrorism exception to immunity, now 28 U.S.C. § 1605A, eliminates immunity in cases “in which money damages are sought against a foreign state for personal injury or death that was caused by an — extrajudicial killing,” as long as the foreign state was designated as a state sponsor of terrorism at the time of the killing and the victim was a national of the United States. Oveissi followed on Kilburn v. Socialist People’s Libyan Arab Jamahiriya, 376 F.3d 1123 (D.C. Cir. 2004), where the plaintiff sought damages from Libya and Iran arising from the kidnapping and murder of his brother in Lebanon in the 1980s. The court rejected Libya’s arguments that the plaintiff had to plead that but for Libya’s actions, the victim would not have been kidnapped or killed. “As a moment’s inspection of § 1605(a)(7) [the old statute] makes clear, there is no textual warrant for this claim.” All that was required, Judge Garland wrote, was a showing of proximate causation. While I think the outcome in Kilburn was clearly right, the language is confusing, at least to me. I think of “but for” causation as a less stringent condition than proximate causation. Mrs. Palsgraf would not have been struck by the falling scales but for the the railway employee’s effort to pull onto the moving train the man carrying the fireworks; but the railwayman’s actions were not the proximate cause of Mrs. Palsgraf’s injuries. If you don’t know what I’m talking about, you have been spared a first-year torts class and you should be grateful. But in any event, I think the confusion in the language may have been Libya’s rather than the court’s. Judge Garland also wrote the opinion in Mwani v. bin Laden, 417 F.3d 1 (D.C. Cir. 2005), a case brought by Kenyan victims of the US embassy bombing against Osama bin Laden and Afghanistan, which, they claimed, had harbored and aided the terrorists responsible for the attack. The court rejected the claim that the allegation that Afghanistan had engaged in commercial activity sufficient to bring the commercial activity exception to the FSIA into play. The allegation was that Afghanistan “had served as a place of refuge for international terrorists” and that the Taliban had aided bin Laden “by assigning him guards for security, permitting him to build and maintain terrorist camps, and refusing to cooperate with efforts by the international community to extradite him. Bin Laden provided approximately $10-$20 million per year” in return. The court rejected the idea that Afghanistan’s actions were “paradigmatically mercantile,” since the test is not whether the purpose was to obtain money, but whether it was the kind of act that only a sovereign can engage.
Judge Garland’s other FSIA opinions are quite interesting. El-Hadad v. United Arab Emirates, 216 F.3d 29 (D.C. Cir. 2000), asks whether a foreign national employed in his country’s embassy in Washington could sue his country for breach of contract and defamation, or whether the claim was barred by the FSIA. Here is how I described El Hadad in a brief in a pending appeal involving an American national employed by a foreign consulate:
El-Hadad is particularly instructive because it reviews the earlier cases’ approaches and sets out a methodology for determining whether, in a particular employee’s circumstances, the commercial activity exception applies. The court asks whether the employee is a “civil servant,” and whether her work “involves the exercise of powers that can also be exercised by private citizens, as distinct from those powers peculiar to sovereigns.”
In other words, in my mind at least, El Hadad is one of those very useful cases that synthesizes the prior precedents and arrives at a classic multi-factor test to help courts and lawyers decide later cases.
Last is World Wide Minerals, Ltd. v. Republic of Kazakhstan, 296 F.3d 1154 (D.C. Cir. 2002). A Canadian mining company contracted with Kazakhstan and agreed to manage a Kazakh uranium complex and to loan the country millions of dollars. In return, WWM was to receive the right to export uranium. But the government refused to grant the export license and seized WWM’s assets. WWM sued in a US court for breach of contract, fraudulent inducement, tortious interference, etc., and for violations of the RICO statute. This, by the way, is why you have an arbitration agreement when you do business with a foreign sovereign. Anyway, the court held that Kazakhstan had waived its sovereign immunity as to claims for breach of contract, because two of the written agreements between the parties included explicit waivers that clearly went to those claims. This was, however, a Pyrrhic victory for WWM, because, the court held, the act of state doctrine prohibited the court from adjudicating the claim despite the waiver. The decision whether to grant an export license, and a decision about expropriation, are classic examples of acts of state that are nonjusticiable. WWM tried to save the day by pointing to some of its allegations—Kazakhstan’s failure to pay interest, for example, which seems commercial. But it hadn’t properly pleaded those allegations in connection with the claims that survived.
Recognition and Enforcement of Judgments
Judge Garland has written one decision on the recognition and enforcement of foreign judgments, Society of Lloyd’s v. Siemon-Netto, 457 F.3d 94 (D.C. Cir. 2006). The defendants were “names” sued in England by Lloyd’s for failure to pay a reinsurance premium. The defendants had refused to pay because they had refused to participate in a plan Lloyd’s had implemented to save its insurance market after massive losses from toxic tort claims in the 1990s. Under the plan, Lloyd’s purchased reinsurance from Equitas Reinsurance Ltd., a third party, for the benefit of the names, and the names were to pay a premium for the reinsurance protection. Ninety-five percent of the names agreed, but 5%, including Siemon-Netto, were holdouts. Under English statutes regarding Lloyd’s and the contract, known as the General Undertaking, that the names had signed, Lloyd’s had the power to appoint a substitute for the names, to accept the offer of reinsurance on their behalf. Lloyd’s exercised its power, and the substitute signed the contract on Siemon-Netto’s behalf. Lloyd’s paid the Equitas premium and then sued Siemon-Netto (and the other holdouts) to recoup it. The English courts ultimately held that Lloyd’s had the power to appoint the substitutes (Soc’y of Lloyd’s v. Leigh,  EWCA (Civ.) 2283), that those names who asserted fraud claims (Siemon-Netto did not) had not been fraudulently induced to contract with Lloyd’s (Soc’y of Lloyd’s v. Jaffray,  EWHC (Comm) 51), and ultimately that the names, including Siemon-Netto, were liable for the premium (Soc’y of Lloyd’s v. Fraser,  EWCA (Civ.) 1378). Lloyd’s sought recognition and enforcement in the District of Columbia, where Siemon-Netto resided. Siemon-Netto faced an uphill battle from the start, since, as Judge Garland recognized in the opinion, American courts are extremely reluctant to question the fairness of the English courts as a general matter. Judge Garland rejected out of hand the notion that the English courts were biased in favor of Lloyd’s—the fact that the names had lost their cases in England just went to show that their claims were weak, not that there was any bias. But Siemon-Netto also claimed that the judgment was contrary to DC public policy because they had not signed the reinsurance contract. The question, though, under the UFMJRA is whether the cause of action is contrary to public policy, not whether the application of the law in the particular circumstances is contrary to public policy. Here, the English contract law underlying the case could hardly be repugnant to DC law. Again, the judge focused on the historical relationship between English and American common law, suggesting that such a challenge would always necessarily fail if directed to English law (libel law is probably the main exception). The other grounds, e.g., whether Parliament improperly had given legislative power to Lloyd’s, were really questions of English law that the English courts had already answered. So Judge Garland and the panel affirmed the judgment in favor of Lloyd’s.
Judge Garland has not written enough decisions in these areas to say anything really interesting about his views or his approach. Leaving the terrorism cases aside, his other FSIA cases suggests a reluctance to let marginal claims against foreign sovereigns proceed, though that is hardly a criticism—the whole point of the FSIA and doctrines such as the act of state doctrine is to keep many claims against foreign sovereigns out of our courts. It is difficult to draw conclusions about Judge Garland’s views on judgment recognition from the Lloyd’s case, particularly as the case involved an English judgment and the skepticism that courts sometimes can show towards proceedings abroad is basically absent when an English judgment is involved—except, I suppose, in libel cases.
Unfortunately, it doesn’t seem that Judge Garland has written any decisions in the other areas of interest to us—the Hague Conventions, for example. However, those cases reach the Supreme Court so rarely that I’m not worried about the lack of a way to evaluate the judge on those issues.