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Bolivarian Republic of Venez. v. Helmerich & Payne Int'l Drilling Co.

Supreme Court of the United States

November 2, 2016, Argued; May 1, 2017, Decided

No. 15-423.

Opinion

 [*1316]  Justice Breyer delivered the opinion of the Court.

The Foreign Sovereign Immunities Act of 1976 (FSIA or Act), provides, with specified exceptions, that a “foreign state shall be immune from the jurisdiction of the courts of the United States and of the States . . . .” 28 U.S.C. §1604. One of the jurisdictional exceptions—the expropriation exception—says that

“[a] foreign state shall not be immune from the jurisdiction of courts of the United States or of the [***7]  States in any case . . . (3) in which rights in property taken in violation of international law are in issue and that property . . . is owned or operated by an agency or instrumentality of the foreign state . . . engaged in a commercial activity in the United States.” §1605(a)(3).

The question here concerns the phrase “case . . . in which rights in property taken in violation of international law are in issue.”

Does this phrase mean that, to defeat sovereign immunity, a party need only make a “nonfrivolous” argument that the case falls within the scope of the exception? Once made, does the existence of that nonfrivolous argument mean that the court retains jurisdiction over the case until the court decides, say, the merits of the case? Or does a more rigorous jurisdictional standard apply? To put the question more generally: What happens in a case where the party seeking to rely on the expropriation exception makes a nonfrivolous, but ultimately incorrect, claim that his property was taken in violation of international law?

In our view, a party’s nonfrivolous, but ultimately incorrect, argument that property was taken in violation of international law is insufficient to confer jurisdiction. Rather, [***8]  state and federal courts can maintain jurisdiction to hear the merits of a case only if they find that the property in which the party claims to hold rights was indeed “property taken in violation of international law.” Put differently, the relevant factual allegations must make out a legally valid claim that a certain kind of right is at issue (property rights) and that the relevant property was taken in a certain way (in violation of international law). A good argument to that effect is not sufficient. But a court normally need not resolve, as a jurisdictional matter, disputes about whether a party actually held rights in that  [**669]  property; those questions remain for the merits phase of the litigation.

Moreover, where jurisdictional questions turn upon further factual development, the trial judge may take evidence and resolve relevant factual disputes. But,  [*1317]  consistent with foreign sovereign immunity’s basic objective, namely, to free a foreign sovereign from suit, the court should normally resolve those factual disputes and reach a decision about immunity as near to the outset of the case as is reasonably possible. See Verlinden B. V. v. Central Bank of Nigeria, 461 U.S. 480, 493-494, 103 S. Ct. 1962, 76 L. Ed. 2d 81 (1983).

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137 S. Ct. 1312 *; 197 L. Ed. 2d 663 **; 2017 U.S. LEXIS 2802 ***; 85 U.S.L.W. 4221; 26 Fla. L. Weekly Fed. S 558; 2017 WL 1540510

BOLIVARIAN REPUBLIC OF VENEZUELA, et al., Petitioners v. HELMERICH & PAYNE INTERNATIONAL DRILLING CO., et al.

Notice: The LEXIS pagination of this document is subject to change pending release of the final published version.

Prior History:  [***1] ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA CIRCUIT

Helmerich & Payne Int'l Drilling Co. v. Bolivarian Republic of Venez., 784 F.3d 804, 415 U.S. App. D.C. 21, 2015 U.S. App. LEXIS 7227 (May 1, 2015)

Disposition: Vacated and remanded.

CORE TERMS

sovereign, expropriation, Subsidiary, nonfrivolous, nonfrivolous-argument, entities, incorrect, outset, rigs

International Law, Foreign Sovereign Immunities Act, Exceptions, Expropriation, Sovereign Immunity, Burdens of Proof, Construction & Interpretation