The U.S. Northern District of California Court dismissed a civil rights action filed by Mark Adam Cottonham, an inmate at the Santa Rita Jail in Alameda County. Cottonham sued over his detainment by Bangkok, Thailand police upon a visit to the U.S. Embassy. The complaint was dismissed with prejudice because the U.S. has sovereign immunity from this complaint. The court found that Cottonham had filed a civil rights action under 42 U.S.C. § 1983, whereas in fact his claim should have been filed under as a tort. The complaint alleges that when Cottonham went to the U.S. Embassy in Bangkok, Thailand, on March 7, 2011 to obtain more pages for his passport, his passport was taken from him without explanation. In addition, he was arrested by Thai police, charged with a “3 day over stay and having no passport,” and incarcerated in an unpleasant Thai jail for eight days. His complaint was reviewed by the Court under 28 U.S.C. § 1915A.

A federal court must engage in a preliminary screening of any case in which a prisoner seeks redress from a governmental entity or officer or employee of a governmental entity. See 28 U.S.C. § 1915A(a). The court must—with a liberal view See Balistreri v. Pacifica Police Dep’t, 901 F.2d 696, 699 (9th Cir. 1990)—identify any cognizable claims, and dismiss any claims which are frivolous, malicious, fail to state a claim upon which relief may be granted, or seek monetary relief from a defendant who is immune from such relief. See id. at § 1915A(b)(1),(2). Cottonham claimed a civil rights action under 42 U.S.C. § 1983. His claim plainly is not one under § 1983 because he does not allege that a “person acting under color of state law” deprived him of a right secured by the Constitution or laws of the United States. See West v. Atkins, 487 U.S. 42, 48 (1988). His claim should have been filed as a tort claim against the United States (acting through its agency, the United States Embassy) and governed by the Federal Tort Claims Act. The Federal Tort Claims Act (“FTCA”) passed in1946, 28 U.S.C. §§ 1346(b), 2671-2680 waives sovereign immunity of the United States for certain torts committed by federal employees acting within the scope of their employment. See FDIC v. Meyer, 510 U.S. 471, 475-76 (1994). The act provides that district courts have exclusive jurisdiction of civil actions against the United States for money damages “for injury or loss of property, or personal injury, or death caused by the negligent or wrongful act or omission of any employee” of the federal government while acting within the scope of his office or employment, 28 U.S.C. § 1346(b)(1). One of the exceptions to that waiver applies in the Cottonham case. Specifically, waiver of immunity does not apply to acts or omissions of the United States “arising in a foreign country.” 28 U.S.C. § 2680(k). This exception applies even if “the tort occurs in a foreign area under United States control.” Nurse v. United States, 226 F.3d 996, 1003 (9th Cir. 2000). The foreign country exception “bars all claims based on any injury suffered in a foreign country, regardless of where the tortuous act or omission occurred.” Sosa v. Alvarez-Machain, 542 U.S. 692, 712 (2004).

The court said that Cottonham cannot pursue a claim for the alleged wrongful confiscation of his passport by the U.S. Embassy in Bangkok because his claim is for an act or omission of the United States (through its agency, the U.S. Embassy) arising in a foreign country. The United States has not waived sovereign immunity for such a claim. Accordingly, this action was dismissed. Leave to amend was not granted because it would be futile: Cottonham could not plead around the sovereign immunity bar to his claim. Since the United States has immunity against Plaintiff’s complaint, it was dismissed with prejudice and the file was closed.

The United States Court of Appeals, Second Circuit issued on March 30th its decision in the case of NML Capital, LTD. v. Republic of Argentina, whereby it upheld the attachment and restraining orders of the District Court for the Southern District of New York, relative to funds deposited in a New York bank belonging to the Agencia Nacional de Promocion Cientifica y Tecnologica (ANPCT), an Argentinean government agency. The action, encompassing 11 consolidated proceedings, had been initiated by NML Capital and EM Ltd. as a means to secure debt, totaling hundreds of millions of dollars, traced to non-performing Argentinean government bonds obtained on the secondary market, with the American judiciary as the forum. ANPCT declared that the aforementioned bank account served only to procure scientific equipment for grant beneficiaries, said beneficiaries ordering and receiving delivery straight from the equipment suppliers, and ANPCT responsible for payment alone. A series of District Court judgments rendered during the period of September 2008 through September 2010 granted restraining orders (final decision suits) and attachment orders (pre-final decision suits), followed by confirmation of the restraining orders solely, and then the admission of error and confirmation of the attachment orders. The basis for the District Court rulings favorable to the plaintiffs was the commercial activity exception set forth in the Foreign Sovereign Immunities Act (FSIA) that denies the shield sovereign immunity affords foreign nations from the jurisdiction of American courts. Argentina all along has asserted its sovereign immunity under the FSIA.
The Court of Appeals made clear that foreign debt proceedings are not normally subject to the jurisdiction of American courts unless the disputed foreign assets are tied to commercial transactions in the United States. It therefore employed a commercial activity analysis, determining if the commercial activity requirements of the FSIA were met, to reach its decision. The court found that the buying of scientific equipment by ANPCT was of the type of commercial dealing in which a private party would enter. It rejected Argentina’s contention that the transactions were cloaked in sovereign immunity because the equipment was bought in conjunction with the establishment of a national program of scientific research and development. In addition to casting aside Argentina’s “essential nature” argument linked to the aim of commercial activity, the court concluded that the claim Argentina made of no profit incentive did not have a bearing whatsoever on the evaluation of commercial character.

The Supreme Court was to begin hearing arguments last week in the appeal of the Kiobel v. Royal Dutch Petroleum case, whereby Royal Dutch Petroleum and subsidiary Shell in America were sued over business connections to a barbarous past Nigerian regime, and revolving around the issue of whether corporations can be held liable for human rights violations committed by ruthless regimes to which they are linked. The former Nigerian government’s military police were guilty of the torture, rape, and executions of denizens of the oil abundant delta. The 2010 ruling being appealed was handed down by the United States Court of Appeals in New York, which found by a 2-1 margin that nations, but not corporations, were accountable for violations of international law, and consequently dismissed the Royal Dutch action. The Obama administration along with human rights activists oppose the blanket immunity that decision confers on corporations, setting in motion the current proceedings.

Other multinational corporations are embroiled in similar actions, including Exxon-Mobil for its purported role in the torture and murder of Indonesians ten years ago. California was the jurisdiction where suit was brought against the British mining company Rio Tinto, over claims of atrocities perpetrated against residents of Papua New Guinea more than two decades back. Each of the aforementioned cases turns on the Alien Tort Statute of 1789, a little known law resurrected by human rights attorneys in the 1980s, and employed to an ever greater extent against corporations with ties to brutal governments. Specifically, said legislation invests federal courts with the authority to adjudicate suits initiated by an alien asserting violation of the “law of nations.” The exact significance of the preceding phrase remains unclear, as the sole Supreme Court decision pertaining to the statute declared its lone applicability to very restricted types of well established violations of international law, perhaps encompassing torture, enslavement, and genocide. Corporate attorneys dispute the validity of a law permitting foreigners to resort to American courts as a forum for suits involving deeds of foreign origin under the aegis of foreign regimes. Corporations as well as the British, Dutch, and Australian governments have argued that the American judiciary is without jurisdiction over proceedings relative to foreign companies with dealings in foreign countries.

The United States Magistrate Court in Tampa decreed on the 17th that Odyssey Marine Exploration Inc., a Florida deep sea recovery company, must hand back to Spain by the 24th of this month the 17 tons of treasure and artifacts the company salvaged from the shipwreck of the nineteenth century Spanish galleon Nuestra Senora de las Mercedes off the Portuguese coast. Odyssey recovered approximately 595,000 gold and silver coins from the Atlantic Ocean wreckage it unearthed in 2007, with the total haul appraised in excess of $500 million, marking the single largest sunken treasure salvage ever. The Mercedes was transporting its valuable cargo as one of the vessels in a Spanish convoy in 1804 from Peru, a Spanish viceroyalty at the time, to Spain, when the aforesaid convoy was engaged in battle by a British squadron, and the explosion of the Mercedes followed shortly thereafter. U.S. Magistrate Judge Mark Pizzo also blocked Odyssey’s efforts at securing reimbursement from the Spanish government in the amount of $412,814 for its alleged expenditures regarding the storage and preservation of the Mercedes booty. During the course of Odyssey’s legal disputes with Spain and Peru over rights to the wreck’s bounty, the gold and silver were kept in a warehouse in Tampa.
The December 2009 ruling of United States District Court Judge Steven D. Merryday, Middle District of Florida (Tampa), affirmed Spain’s sovereign immunity pursuant to the Foreign Sovereign Immunities Act, and the accompanying absence of jurisdiction by the court over the case. Hence, the court ordered the dismissal of Odyssey’s complaint. The latter party had contended that the final voyage of the Mercedes was overwhelmingly commercial in nature and, therefore, precluded invocation of sovereign immunity. Odyssey’s counsel had asserted further that under such circumstances the designation of the Mercedes as a warship was inapplicable. Judge Merryday directed that the treasure remain in Odyssey’s possession throughout the appellate process. The United States Court of Appeals in Atlanta rendered its decision on September 21st of last year, whereby it agreed with Spain’s contention concerning the Mercedes that the vessel was a sovereign asset and could not be the subject of a suit brought in America. The appellate court consequently refused to reverse the dismissal of the Odyssey action. Prior to the current magistrate judicial proceedings, the United States Supreme Court earlier this month upheld the lower court findings pertaining to Spain’s rightful ownership of the Mercedes bounty.

The International Court of Justice, the UN’s highest court, handed down a decision on the third of this month that held sovereign immunity shielded Germany from actions in foreign jurisdictions brought by the victims of Nazi atrocities perpetrated during WWII. Specifically, the 15-judge panel ruled that the Italian Supreme Court erred in its 2008 finding that forced laborer Luigi Ferrini, an Italian civilian transported to Germany in 1944 in order to toil in the armaments industry, should receive reparations. The judges found 12-3 that the outcome of the Ferrini proceedings violated Germany’s sovereign immunity. Germany had claimed that the Italian decision posed a threat to an already established restitution system that served as the means for tens of billions of dollars of reparation payments dating back to the 1950s. It warned that if the international court upheld the Italian ruling, the result would be a slew of reparation suits worldwide, an occurrence it had attempted to avert by reaching reparation accords with Israel, Second World War era occupied nations, and particular groups, including the Conference on Jewish Material Claims against Germany. Italy in turn asserted that the principle of sovereign immunity was inapplicable where wartime crimes and crimes against humanity were concerned, an argument the world court dismissed. Greece has backed the Italian efforts, largely because of similar Greek cases instituted against Germany. The International Court of Justice decision is final and binding.

The United States Supreme Court this past Tuesday made known its desire for the Obama administration’s input regarding the appeal sought by holders of Argentina’s defaulted bonds, who dispute the Second United States Circuit Court of Appeals ruling last July that blocked the seizure of approximately 105 million dollars in Central Bank of Argentina assets held at the Federal Reserve Bank in New York. The justices requested that the administration’s counsel at the high court, the United States solicitor general, articulate the official government position on the appeal question. The Second Circuit decision constituted a serious setback for holdout bondholders, including plaintiffs EM Ltd. and NML Capital Ltd. in the current action, that refused to participate in a greatly discounted Argentine bond swap. The court held that the principle of sovereign immunity delineated in the Foreign Sovereign Immunities Act protected the Central Bank of Argentina deposits from confiscation or freeze, because said funds linked to a foreign central bank did not figure in commercial transactions. Thus, the freeze on the aforementioned assets in effect since 2006, was lifted. The present suit numbers among many arising from attempts to recover debt created by Argentina’s 100 billion dollar bond default more ten years ago, and Argentine funds in the U.S. have been targeted. The submission of the solicitor general’s brief elaborating the government’s views on the proceedings might be months away. Only at that time will the Supreme Court make its determination on the appeal issue.

A Claim for Restitution of Assets seized by the Hungarian National Railroad and Banks from Jews.

The U.S. Court of Appeals for the Seventh Circuit hear arguments regarding the restitution suit brought by Holocaust survivors and heirs against the Hungarian national railway and banks. The case, in reality a number of related actions, centers on the assets seized by the Hungarian national railroad and banks from Jews sent to Nazi death camps in 1944. The three judge panel considered an appeal sought by the defendants in the action already underway for trial. The appellate ruling, not subject to time constraints, will decide if the trial being held in the U.S. District Court proceeds. The suit was instituted in February 2010 in a federal court in Chicago by Northwestern University law professor Anthony D’Amato on behalf of Hungarian Holocaust survivors and heirs. Mr. D’Amato, whose area of expertise is international law, was aware of the restrictions placed on actions against foreign countries or state controlled entities involving claims of suffering or death. Knowing that no such limitations extend to the loss of assets, his suit turned on the stealing of possessions of the victims rather than their suffering or deaths. Requested were compensatory damages totaling 240 million dollars, or 5 percent of the approximate value of everything confiscated, along with punitive damages in the amount of 1 billion dollars.

Arguments as to sovereign immunity and personal jurisdiction have figured prominently during the proceedings. Since the current case entails American citizens suing in American courts for losses inflicted in Hungary, Judge David Hamilton then inquired of the plaintiffs if it followed that American Indians could sue in European courts with respect to the lands taken from them. Other questions posed dealt with whether restitution
cases constituted an obstacle to U.S. diplomacy, and what was the original American aim of sovereign immunity. According to Peter Black, U.S. Holocaust Memorial senior historian, other restitution suits of late have met with success. Swiss banks finally admitted to deposits made by Holocaust victims, and European insurance companies have at last acknowledged policies purchased by persons who perished at the hands of the Nazis. Also, the Germans have set up a fund as a means to make reparations to forced laborers. A spokesman for the Hungarian delegation in America declared no official response to the current action would be forthcoming.

The United States District Court for the District of Columbia denied a motion to confirm an arbitration award sought by GSS Group Ltd. (GSS) against the National Port Authority of Liberia (NPA). The court granted NPA’s motion to dismiss the confirmation petition due to lack of personal jurisdiction. The roots of the case lie in a contract entered into in June 2005 between GSS, a private corporation established in the British Virgin Islands, and NPA, a state owned corporation, for the express purpose of building and operating a container park in the Liberian capital of Monrovia. GSS later claimed breach of contract and consequently instituted arbitration proceedings the following year. NPA largely ignored the proceedings, which went ahead in spite of its minimal presence. In the end, the arbitrator agreed that NPA did breach the
contract with GSS, culminating with two arbitration awards totaling $44,347,260 in damages. GSS then sought confirmation of said arbitration awards and petitioned the court to that effect in July 2009.

The court resorted to sovereign immunity exception requirements set forth in the Foreign Sovereign Immunities Act (FSIA) in its consideration of the jurisdiction question, and concluded that the requisite subject matter jurisdiction and proper service had been satisfied. First and foremost, it held that NPA was a foreign state according to the FSIA, which specifies instrumentalities and agencies of a foreign state as well. Secondly, the FSIA withholds the shield of sovereign immunity in particular actions, one of which is the petitioning for confirmation of arbitration awards made pursuant to the New York Convention. Lastly, the court emphasized that the issue of service of process never was raised. Thus, it found that a statutory basis for personal jurisdiction had been demonstrated. However, the court also examined the applicability of the Due Process Clause with regards to the exercise of such jurisdiction. The Due Process Clause restricts the jurisdiction of courts over nonresident defendants and stipulates that minimum contacts with the forum are necessary in constituting jurisdiction. Its protections do not extend to foreign sovereign states and the court stressed they only pertained to private foreign entities. While acknowledging that NPA occupied a somewhat fuzzy area between the two groups of defendants, the court maintained that because NPA portrayed itself as legally and financially autonomous from the Liberian government, a representation to which GSS offered no opposition, the exemption of foreign states from due process rights was not called for in this case. In addition, NPA described itself as operating solely in Liberia, again eliciting no opposition from GSS to such characterization, as the court pointed out. It ruled that it did not have jurisdiction over NPA, the minimum contacts standard not having been met, and underscored the fact that GSS had not tried in the least to show that NPA had any contacts with the United States.

Judge John Bates, of the United States District Court, District of Columbia, rendered his decision on November 28th regarding Owens v. Sudan, civil proceedings brought by the victims of the 1998 suicide bombings of the American embassies in Nairobi, Kenya and Dar es Salaam, Tanzania, along with their families, against Sudan and Iran, and ruled in favor of the plaintiffs, who possibly could be awarded damages reaching billions of dollars. In point of fact, the judge’s findings pertained to six distinct actions that had been consolidated for reasons of a hearing conducted this past October and for the assessment of damages. The attacks claimed hundreds of lives and those injured numbered more than one thousand, with most of the victims being foreign national employees of the embassies. The complaint specifically named the Republic of Sudan, the Ministry of the Interior of Sudan, the Islamic Republic of Iran, the Iranian Revolutionary Guards Corps, and the Iranian Ministry of Information and Security, as defendants. Sudanese participation in the case ended over two years ago, while there has been no response whatsoever on the part of Iran. Thomas Fay, lead attorney for a number of the plaintiffs, stressed that Sudan’s liability would not be assigned to the newly formed Republic of South Sudan, recognized as an autonomous state only since July of this year.

The district court opinion made abundantly clear that the sole means by which an American court could establish personal and subject matter jurisdiction over a foreign nation, and thereby overcome the shield of sovereign immunity, would entail satisfying certain criteria put forth in the Foreign Sovereign Immunities Act (FSIA). The judge pointed out that personal jurisdiction stemmed from proper service of process, a requirement fulfilled in the present actions, adding that the failure of the defendants to respond or appear within 60 days of service prompted a default judgment to be entered. Bates maintained that subject matter jurisdiction was conferred because of the FSIA state sponsor exception that allowed money damages for personal injury or death resulting from torture, extrajudicial killings, airplane sabotage, hostage situations, or the supply of materials or resources for said acts. He asserted that all the subject matter jurisdiction requisites were met, beginning with the condition that defendants be listed by the State Department as “state sponsors of terrorism” when the aforementioned acts took place. Iran’s classification as such dates back to 1984 and Sudan has occupied a place on the list since 1993. Next, the court declared that Sudan and Iran backed the “extrajudicial killings” perpetrated by al Qaeda and Osama Bin Laden during the bombings of the embassies. The definition given for extrajudicial killing was a considered killing not authorized by the judiciary. The decision went on to describe how Sudan and Iran provided support to al Qaeda and Bin Laden. Sudan served as a “safehouse” for them, from whence organization, logistics, and training were implemented, while Iran itself furnished training, as well as arranging for Hezbollah to give instruction on explosives, especially where large structures were concerned. Finally, the victims of the attacks were either American nationals or employed by the U.S. government.

However, the judge found that the amendment to the FSIA embodied in the National Defense Authorization Act for Fiscal Year 2008, so that foreign nationals could bring suit against state sponsors of terrorism for injuries or death incurred while at work, did not extend to family of the foreign nationals, including those members who are plaintiffs in the current actions. Although Bates stated a federal cause of action relative to liability was absent, he also indicated that state and/or foreign law might serve as avenues for proceedings. The court directed the appointment of a special master entrusted with determining the handling of each case and the attendant damages.

The United States Court of Appeals for the Second Circuit ruling of November 7th on the appeal by Afghanistan of the district court’s decision blocking dismissal of a 9/11 widower’s conspiracy and wrongful death action against the nation, concurred with the lower court’s findings. The suit had been brought by Judicial Watch, the government corruption watchdog, on behalf of “John Doe”, whose wife perished in the south tower of the World Trade Center on September 11, 2001. It was filed in the United States District Court for the District of Columbia in December of that year, naming Usama bin Laden and Afghanistan as defendants, and citing the noncommercial tort exception to the Foreign Sovereign Immunities Act (FSIA). A default judgment against Afghanistan followed in 2003, due to a lack of response on its part to the complaint. The next year the response came in the form of two motions, one to vacate the default judgment and a second seeking dismissal of the proceedings. The aforementioned adverse district court decision regarding Afghanistan was handed down in September 2008.

The appellate court agreed with the lower court’s application of the noncommercial tort sovereign immunity exception, which removes the shield against the jurisdiction of the American judiciary, and permits lawsuits against foreign countries for monetary compensation relative to damages in personal injury cases, when said injury is inflicted in the United States and brought about by the wrongful act of the foreign nation. The Court of Appeals also offered no dissent to the district court’s repudiation of the argument made by counsel for Afghanistan that accountability for terrorist activity be determined solely by placement on the State Department’s list of state supporters of terrorism on September llth, from which Afghanistan was absent. The district court maintained that to interpret the noncommercial tort exception in such a manner would have a ludicrous outcome. However, the higher court did remand the suit for jurisdictional discovery, due to factual issues dealing with attribution of the Taliban’s alleged part in the 9/11 attacks to
Afghanistan, and the question of whether the acts could be considered “discretionary” with regards to the noncommercial tort exception, according to section 1605(a)(5)(A).