Southway Constr. Co. v. Cent. Bank of Nig.

Southway Constr. Co. v. Cent. Bank of Nig.

Opinion

 [*1212]  BALDOCK, Circuit Judge.

] The general immunity provision of the Foreign Sovereign Immunities Act of 1976 (FSIA), 28 U.S.C. §§ 1330, 1602-1611, provides:

Subject to existing international agreements to which the United States is a party at the time of enactment of this Act, a foreign state shall be immune from the jurisdiction of the courts of the United States and of the States except as provided in sections 1605 to 1607 of this chapter.

 28 U.S.C. § 1604. ] The FSIA provides the exclusive means by which federal and state courts may obtain subject-matter jurisdiction over civil suits involving foreign states, their agencies, or instrumentalities. [**2]  Argentine Republic v. Amerada Hess Shipping Corp., 488 U.S. 428, 443, 102 L. Ed. 2d 818, 109 S. Ct. 683 (1989). In this interlocutory appeal, we address two issues involving the federal district court's subject-matter jurisdiction under the FSIA: (1) Whether the FSIA prohibits the district court from exercising subject-matter jurisdiction over civil actions against foreign sovereigns based on a pattern of racketeering activity under the Racketeer Influenced and Corrupt Organizations Act of 1970 (RICO), 18 U.S.C. §§ 1961-1968; and, if not, (2) Whether the FSIA's commercial activity exception, 28 U.S.C. § 1605(a)(2), applies to the alleged racketeering activity of Defendants Central Bank of Nigeria (CBN) and Republic of Nigeria (RN), thus obviating their sovereign immunity from suit under the FSIA? We answer the first question "no," and the second question "yes."

The detailed facts giving rise to this action are well stated in the district court's opinion, Southway v. Central Bank of Nigeria, 994 F. Supp. 1299, 1302-04 (D. Colo. 1998), and we need not repeat them here. Suffice it to say that this action [**3]  arose from an alleged scheme in which numerous individuals, including officials of Defendants CBN and RN, sought to defraud Plaintiffs, a group of Colorado investors. Purported members of the Nigerian National Petroleum Company (NNPC) allegedly solicited Defendant Kirk Brown, a Pueblo, Colorado attorney, to assist them in collecting $ 21.3 million from an "over-invoiced" contract for oil drilling machinery. In exchange for Brown's assistance, the NNPC members agreed to  [*1213]  pay Brown a percentage of the proceeds. Between November 1995 and April 1996, numerous communications occurred between Brown and purported representatives of CBN, RN, and NNPC. Brown and his wife, Helen Tomicich, recruited several Colorado investors to help them pay the "up-front costs," which CBN and RN officials demanded prior to the payoff. The Nigerians' offer turned out to be a scam in which the investors together lost over one-half million dollars. This lawsuit followed.

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