The Volokh Conspiracy
Mostly law professors | Sometimes contrarian | Often libertarian | Always independent
Yesterday, I noted Judge Ketanji Brown Jackson's first opinion as a judge on the U.S. Court of Appeals for the D.C. Circuit. Ross Guberman also ran the opinion through BriefCatch to assess how the opinion was written.
Today, the D.C. Circuit released a second opinion by Judge Jackson in an argued case: Wye Oak Technology v. Republic of Iraq. Like her first opinion, Judge Jackson wrote for a unanimous panel. Unlike Judge Jackson's first opinion, this one has little to do with administrative law, so I do not have much to say about it. Here, however, is Judge Jackson's introduction summarizing the opinion.
This appeal arises from a fully litigated contract dispute between an American defense contractor and a foreign government that resulted in a multimillion-dollar plaintiff's judgment. Wye Oak Technology, Inc. first filed its complaint against the Republic of Iraq in the U.S. District Court for the Eastern District of Virginia ("EDVA"). Finding improper venue, that court transferred the case to the U.S. District Court for the District of Columbia ("DDC"), but not before flatly denying Iraq's motion to dismiss the complaint on sovereign immunity grounds. And when the DDC eventually entered judgment in Wye Oak's favor nearly a decade later, after an eight-day bench trial, it did so partly in reliance on an intervening ruling from the Fourth Circuit, which rejected Iraq's contention that none of the exceptions to sovereign immunity in the Foreign Sovereign Immunities Act ("FSIA"), 28 U.S.C. § 1602 et seq., applied to Wye Oak's breach of contract claims.
To be specific, the Fourth Circuit held that because Wye Oak alleged that it had engaged in various acts inside the United States pursuant to the parties' agreement, the lawsuit could proceed under the second clause of the FSIA's commercial activities exception. See 28 U.S.C. § 1605(a)(2) (abrogating foreign sovereign immunity with respect to claims that are "based upon . . . an act performed in the United States in connection with commercial activity of the foreign state elsewhere"). Thus, we are now called upon to decide whether we agree with our sister circuit's FSIA interpretation (as applied in the context of the post-trial judgment in Wye Oak's favor that the DDC has entered against Iraq). We must also determine, incidentally, whether the law of the case doctrine somehow constrains our own assessment of Iraq's alleged immunity at this stage of the case.
In the opinion that follows, we first reject Wye Oak's argument that Iraq's participation in the DDC bench trial implicitly waived its sovereign immunity for the purpose of the FSIA's waiver exception. We then explain that the law of the case doctrine does not require us to adhere to the Fourth Circuit's conclusions about the applicability of the FSIA's commercial activities exception, and, indeed, unlike the Fourth Circuit, we conclude that the second clause of 28 U.S.C. § 1605(a)(2) does not apply to the established facts of this case. But we do discern a plausible basis for sustaining the district court's jurisdictional ruling in the language of the commercial activity exception's third clause. See 28 U.S.C. § 1605(a)(2) (abrogating immunity if the action is "based 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"). And we find that the district court is best positioned to evaluate (or develop) the record as necessary to determine, in the first instance, whether the facts support application of that provision of the FSIA.
Therefore, the district court's post-trial judgment is vacated to the extent that it is premised on a finding of subject matter jurisdiction that rests on an erroneous interpretation of the second clause of the commercial activities exception, and this matter is remanded to the district court for a determination of whether Iraq's breach of contract caused "direct effects" in the United States for the purpose of the third clause of 28 U.S.C. § 1605(a)(2).
For those who think neither of these first two opinions involve the most exciting subject matter, it is worth remembering that Judge Jackson remains the most junior judge on the D.C. Circuit, so she does not get to choose the cases in which she gets to write the opinion for the court. But this only means these opinions are somewhat characteristic of what she would get to do on the Supreme Court, at least at the outset, as she would be the junior-most justice there too.