Comparelli v. Republica Bolivariana De Venez., , S.A., an Agency or Instrumentality of the Bolivarian Republic of Venez., Int'l Petrochemical Sales, Ltd.

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[PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 16-16748
________________________
D.C. Docket No. 1:14-cv-24414-KMW
CARMINA R. COMPARELLI,
JULIO C. DELGADO COMPARELLI,
Plaintiffs - Appellants,
FREDDY E. LOPEZ COMPARELLI, et al.,
Plaintiffs,
versus
REPUBLICA BOLIVARIANA DE VENEZUELA,
a sovereign nation,
PETROQUIMICA DE VENEZUELA, S.A.,
an agency or instrumentality of the Bolivarian
Republic of Venezuela,
INTERNATIONAL PETROCHEMICAL
SALES, LTD.,
Defendants - Appellees.
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________________________
Appeal from the United States District Court
for the Southern District of Florida
________________________
(June 8, 2018)
Before JORDAN, HULL, and BOGGS, * Circuit Judges.
JORDAN, Circuit Judge:
Carmina Comparelli and Julio Delgado Comparelli sued the República
Bolivariana de Venezuela and Petroquimica de Venezuela, S.A., alleging unlawful
expropriation of their property in violation of international law. The district court
dismissed their complaint for lack of subject-matter jurisdiction and denied their
motion for leave nunc pro tunc to file an amended complaint. The Comparellis
appealed.
While the case was pending here, the Supreme Court issued an opinion
detailing the showing that plaintiffs such as the Comparellis must make in order to
have jurisdiction over a foreign state in United States courts under the
expropriation (i.e., takings) exception of the Foreign Sovereign Immunities Act, 28
U.S.C. § 1605(a)(3). See Bolivarian Republic of Venezuela, et al. v. Helmerich &
Payne Int’l Drilling Co., 137 S. Ct. 1312 (2017). This new standard leaves us with
several questions that the district court did not (and likely did not think it had to)
*
The Honorable Danny J. Boggs, United States Circuit Judge for the Sixth Circuit, sitting by
designation.
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answer. Under the circumstances, we believe that the district court is best suited to
resolve those questions in the first instance. And so, after careful review of the
parties’ briefs and the entire record, and with the benefit of oral argument, we
reverse and remand for further proceedings.
I. BACKGROUND
The Comparellis alleged the following facts in their complaint. Because
they share a last name, we refer to them by their first names.
A. THE SEIZURE OF MARIVELCA IN VENEZUELA
Carmina was born in Italy and moved to Venezuela at a young age. She has
resided in Venezuela most of her life and is the sole shareholder of a Venezuelan
company, Marivelca, C.A. 1
Marivelca sold chemical products and raw materials in the alimentary,
petroleum, and petrochemical industries. Carmina’s son, Julio, born in Venezuela,
wholly owns Inversiones Trans Benz, C.A., the “trucking arm” of Marivelca. Both
Marivelca and Trans Benz worked closely with Venezuela’s public sector and its
1
The original complaint states that Carmina, Julio, Freddy Comparelli, and Loryelena
Comparelli each owned a 25% stake of Marivelca. The Comparellis’ attorney acknowledged
that this was an error and attempted to correct it by filing an amended complaint alleging that
Carmina owned 100% of Marivelca. Although the district court struck the amended complaint,
the original complaint includes an exhibit which suggests—at this stage of the litigation—that
Carmina is the sole shareholder of Marivelca. Exhibits control over conflicting allegations in a
pleading, so for the purposes of this opinion we consider Carmina as the sole shareholder of
Marivelca despite the contrary allegation in the original complaint. See Friedman v. Market St.
Mortg. Corp., 520 F.3d 1289, 1295 n.6 (11th Cir. 2008) (“Where there is a conflict between
allegations in a pleading and exhibits thereto, it is well settled that the exhibits control.”)
(quoting Tucker v. Nat’l Linen Serv. Corp., 200 F.2d 858, 865 (5th Cir. 1973)).
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state-owned and operated businesses, including Petroquimica de Venezuela, S.A.
(“Pequiven”), a nationalized Venezuelan company engaged in the domestic
production and sale of petrochemical products.
Marivelca operated as part of Pequiven’s network of certified distributors of
hydrochloric acid for legal industrial applications. Pequiven would deliver
hydrochloric acid to Marivelca at certain storage locations that Marivelca owned or
leased. From those storage locations, Marivelca would transport the hydrochloric
acid to other sites beyond Pequiven’s direct distribution zone.2
As part of its delivery network, Marivelca leased storage space from
Suplidora del Caribe, C.A., a company headquartered in Maracaibo, Venezuela.
Marivelca used the leased space from Suplidora to temporarily store hydrochloric
acid that it acquired from Pequiven.
In June of 2008, the Public Ministry of the State of Zulia (a Venezuelan
state) began investigating Suplidora. During this investigation, on August 8, 2008,
the Anti-Drug Division of the Bolivarian National Guard of Venezuela conducted a
warrantless search of Marivelca’s headquarters for the suspected illicit storage of
controlled chemical substances, as defined in Article 31 of Venezuela’s Organic
2
Hydrochloric acid is a highly corrosive, strong mineral acid with several industrial uses.
Because it is also used in the production of heroin, cocaine, and methamphetamine, it is listed as
a Table II controlled drug precursor under the 1988 United Nations Convention Against Illicit
Trafficking in Narcotic Drugs and Psychotropic Substances. See UN Economic and Social
Council (ECOSOC), United Nations Convention Against Illicit Traffic in Narcotic Drugs and
Psychotropic Substances, 19 December 1988.
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Law Against Illicit Traffic and Consumption of Narcotics and Psychotropic
Substances. After this search, the National Guard reported that Marivelca
maintained a surplus of about three million pounds of hydrochloric acid that it had
not disclosed to Venezuelan authorities. On October 20, 2008, the National Anti-
Drug Office conducted another warrantless search of Marivelca’s facilities, at the
request of the prosecutor’s office in Zulia.
About two years later, in August of 2010, Venezuela charged the
Comparellis with illicit storage of controlled chemical substances in violation of
Article 31, and criminal conspiracy in violation of Article 6 of Venezuela’s
Organic Law Against Organized Crime. In November of 2010, Venezuela seized
Marivelca and its assets and appointed Pequiven as the “special administrator” of
Marivelca.
The original complaint, rife with allegations about corruption in Venezuela’s
political and judicial branches, asserts that Venezuela initiated the criminal
proceeding as a pretext to further an illicit scheme to expropriate Marivelca. The
Comparellis allege that they filed pleadings in September of 2010, December of
2010, and January of 2011 in response to the criminal charges, but claim that these
pleadings were ignored by Venezuela so that it could “put [the case] at sleep . . .
for the sole purpose of furthering the illicit scheme.” The Comparellis also
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submitted a petition for extraordinary relief (an “avocamiento”) to the Venezuela
Supreme Court, but that too was rejected, over the dissent of one justice.
A physical audit of Marivelca’s purchases, sales, and inventory—conducted
in December of 2010—revealed a surplus of only 903 pounds of hydrochloric acid,
an amount within the normal tolerance margins associated with the weighing of
bulk purchases of the acid. The Comparellis sent the results of this audit to the
prosecutor in January of 2011. Instead of providing any relief, the Venezuelan
government sought and obtained arrest warrants for Carmina and Julio. Around
this time (the complaint does not say exactly when), the Comparellis fled
Venezuela for Costa Rica.
B. THE LAWSUIT
On November 19, 2014, Carmina and Julio, together with Freddy and
Loryelena Comparelli, filed a “Complaint for Claims Pursuant to 28 U.S.C. §
1350” (the Alien Tort Statute) against Venezuela and Pequiven. This original
complaint alleged that, through the conduct described above, Venezuela and
Pequiven (an alleged “agency or instrumentality” of Venezuela) unlawfully
expropriated the Comparellis’ assets in violation of “the applicable law of nations
and of conventional and customary international law.” The complaint alleged
violations of the American Convention on Human Rights (1144 U.N.T.S. 129
(1969)), the American Declaration of the Rights and Duties of Man (O.A.S. Res.
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XXX (1948)), the International Covenant on Civil and Political Rights (999
U.N.T.S. 171 (1967)), the Universal Declaration of Human Rights (G.A. Res.
217A, U.N. Doc. A/810 at 71 (1948)), and United Nations General Assembly
Resolution 3281. The Comparellis specifically asserted jurisdiction under the
expropriation exception of the FSIA, 28 U.S.C. § 1605(a)(3).
Venezuela and Pequiven moved to dismiss the Comparellis’ original
complaint. After receiving an extension of time to respond to the motions to
dismiss, Carmina and Julio (but not Freddy and Loryelena) filed an amended
complaint rather than a response to the motions. The amended complaint alleged
the same wrongful expropriation, removed a reference to the ATS, corrected
Marivelca’s ownership, added that Carmina and Julio currently reside in Miami-
Dade County, Florida, and sought to add an additional defendant, International
Petrochemical Sales, Ltd. A week later, Carmina and Julio filed a motion for leave
nunc pro tunc to re-file their amended complaint, requesting that the district court
treat it as the operative pleading in the case. Venezuela and Pequiven opposed the
motion and separately moved to dismiss the amended complaint.
The district court issued a summary omnibus order (1) denying the motion
for leave to file an amended complaint nunc pro tunc; (2) striking the amended
complaint; and (3) ordering the Comparellis to respond to the original motions to
dismiss. Freddy and Loryelena Comparelli voluntarily dismissed their claims.
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Carmina and Julio continued pursuing their claim for unlawful expropriation and
filed a response opposing the motions to dismiss the original complaint six days
later.
On September 23, 2016, the district court granted the motions to dismiss. It
categorized the Comparellis’ claim in the original complaint as arising under the
ATS, not under § 1605(a)(3) of the FSIA. Applying ATS case law and the
presumption against extraterritoriality, see generally Kiobel v. Royal Dutch
Petroleum Co., 569 U.S. 108, 115 (2013), it ruled that federal courts do not have
jurisdiction over an ATS claim when it “involves a foreign plaintiff suing a foreign
defendant where ‘all relevant conduct’ occurred on foreign soil (a so-called
‘foreign-cubed’ case).” D.E. 75 at 4. Describing the facts of the case as a
“quintessential ‘foreign-cubed’ case,” with foreign nationals suing foreign
sovereigns over conduct that occurred abroad, the district court determined that it
lacked subject-matter jurisdiction and dismissed the case.
II. STANDARD OF REVIEW
We review de novo questions of subject-matter jurisdiction. See Doe v.
Drummond Co., Inc., 782 F.3d 576, 593 (11th Cir. 2015). We likewise review de
novo the applicability of the act of state doctrine to the Comparellis’ claims. See
Mezerhane v. República Bolivariana de Venezuela, 785 F.3d 545, 548 (11th Cir.
2015).
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III. THE FOREIGN SOVEREIGN IMMUNITIES ACT
As noted earlier, the Comparellis’ attorney made some errors in the original
complaint that led to the filing of the stricken amended complaint. Because the
amended complaint was never the operative pleading, we only consider the
original complaint. We treat Carmina as the sole shareholder of Marivelca due to
the exhibit attached to the original complaint, which governs over the conflicting
allegation of ownership in the complaint. See Friedman, 520 F.3d at 1295 n.6.
The original complaint cites the ATS in its caption, but that reference does
not preclude us from recognizing that the Comparellis invoked jurisdiction under
the FSIA’s expropriation exception. First, “although captions provide helpful
guidance to the court, they are not determinative as to the parties to the action or
the court’s jurisdiction.” Lundgren v. McDaniel, 814 F.2d 600, 604 n.2 (11th Cir.
1987). Second, aside from the reference to the ATS in the caption, the remainder
of the complaint makes explicit reference to, sets out the elements of, and alleges
facts relating to § 1605(a)(3), the FSIA expropriation exception. Of particular
note, paragraph nine prominently states that the court “has jurisdiction over
Venezuela and Pequiven pursuant to 28 U.S.C. § 1605(a)(3).” Third, all parties
briefed the applicability of the FSIA’s expropriation exception in the district court
and on appeal, indicating that they understand its relevance.
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The FSIA is “the sole basis for obtaining jurisdiction over a foreign state in
our courts.” Mezerhane, 785 F.3d at 548 (quoting Argentine Republic. v. Amerada
Hess Shipping Corp., 488 U.S. 428, 434 (1989)). Under the FSIA, “a foreign state
is immune from the jurisdiction of the United States unless an FSIA statutory
exemption is applicable.” Calzadilla v. Banco Latino Internacional, 413 F.3d
1285, 1296 (11th Cir. 2005) (citation and internal quotation marks omitted). If no
exception applies, the district court lacks subject-matter jurisdiction. See
Verlinden B.V. v. Cen. Bank of Nigeria, 461 U.S. 480, 489 (1983); Mezerhane, 785
F.3d at 548. The FSIA is a jurisdictional statute; it “does not create or modify any
causes of action.” Republic of Austria v. Altmann, 541 U.S. 677, 695 n.15 (2004).
The Comparellis argue that jurisdiction exists under the expropriation
exception of the FSIA. That exception, codified at § 1605(a)(3), provides that
immunity does not apply in any case “in which rights in property taken in violation
of international law are in issue.” Under this exception, “expropriation is a
uniquely sovereign act, as opposed to a private act.” Devengoechea v. Bolivarian
Republic of Venezuela, 889 F.3d 1213, 1228 (11th Cir. 2018). To fall within its
coverage, the Comparellis must show (1) that rights in property are at issue; (2)
that property was taken; (3) that the taking was in violation of international law;
and (4) that at least one of the two statutory nexus requirements are satisfied. See
§ 1605(a)(3). See also Zappia Middle East Const. Co. v. Emirate of Abu Dhabi,
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215 F.3d 247, 251 (2d Cir. 2000). The nexus requirement is satisfied if the
property in question or any property exchanged for such property is either (a)
“present in the United States in connection with a commercial activity carried on in
the United States by the foreign state;” or (b) “owned or operated by an agency or
instrumentality of the foreign state and that agency or instrumentality is engaged in
a commercial activity in the United States.” § 1605(a)(3). See also Garb v.
Republic of Poland, 440 F.3d 579, 588 (2d Cir. 2006).
After briefing in this appeal was concluded, but before oral argument, the
Supreme Court issued its decision in Helmerich, which considered what showing a
party must make to establish a federal court’s jurisdiction over a foreign sovereign
under the FSIA’s expropriation exception. A unanimous Supreme Court held that
“a party’s nonfriviolous, but ultimately incorrect, argument that property was taken
in violation of international law is insufficient to confer jurisdiction.” 137 S. Ct. at
1316. Instead, “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.” Id. See also id. at 1318 (“In our view,
the expropriation exception grants jurisdiction only where there is a valid claim
that ‘property’ has been ‘taken in violation of international law.’”).
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This standard notably departs from the usual pleading standards applied on a
Rule 12(b)(6) motion to dismiss, where a plaintiff’s factual allegations are taken as
true. See, e.g., Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). To establish
jurisdiction under the expropriation exception, the district court must resolve
relevant factual disputes and determine “that the property in which the party claims
to hold rights was indeed property taken in violation of international law.” See
Helmerich, 137 S. Ct. at 1316–17. Thus, challenges to jurisdiction under the
expropriation exception, like other factual challenges to subject-matter jurisdiction
under Rule 12(b)(1), may be resolved by looking to “material extrinsic from the
pleadings, such as affidavits or testimony.” Stalley ex rel. U.S. v. Orlando Reg’l
Healthcare Sys., Inc., 524 F.3d 1229, 1233 (11th Cir. 2008).
IV. THE ACT OF STATE DOCTRINE
The act of state doctrine “is a judicially-created rule of decision that
‘precludes the courts of this country from inquiring into the validity of the public
acts a recognized foreign sovereign power committed within its own territory.’”
Mezerhane, 785 F.3d at 551–52 (quoting Glen v. Club Méditerranée, S.A., 450
F.3d 1251, 1253 (11th Cir. 2006)). Congress limited the reach of the act of state
doctrine in the Second Hickenlooper Amendment, which provides that the doctrine
does not apply where a foreign sovereign, acting within its own territory,
nevertheless violates international law:
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[N]o court in the United States shall decline on the ground of the
federal act of state doctrine to make a determination on the merits
giving effect to the principles of international law in a case in which a
claim of title or other right to property is asserted by any party . . .
based upon (or traced through) a confiscation or other taking . . . by an
act of that state in violation of the principles of international law.
22 U.S.C. § 2370(e)(2). See also Mezerhane, 785 F.3d at 552.3
The Second Hickenlooper Amendment sets out three conditions in order for
its exception to the act of state doctrine to apply: (1) a claim of title or other right
in property, (2) which is based upon or traced through a confiscation or other
taking, (3) and committed in violation of international law. See FOGADE, 263
F.3d at 1294.
V. APPLICATION OF THE DOMESTIC TAKINGS RULE
Although they are separate jurisdictional rules, the FSIA expropriation
exception and the Second Hickenlooper Amendment each require a showing that
the alleged taking of Marivelca by Venezuela and Pequiven violated international
law. See de Sanchez v. Banco Cen. de Nicaragua, 770 F.2d 1385, 1395 (5th Cir.
1985) (“[T]he Hickenlooper Exception and [§] 1605(a)(3) are congruent.”)
3
The Second Hickenlooper Amendment was enacted, in part, as a response to the Supreme
Court’s decision in Banco Nacional de Cuba v. Sabbatino, 376 U.S. 398 (1964). Sabbatino held
that the act of state doctrine prevented United States courts from adjudicating a claim that Cuba
violated international law by expropriating sugar from a Cuban corporation owned primarily by
United States residents. See id. at 428 (“[T]he Judicial Branch will not examine the validity of a
taking of property within its own territory by a foreign sovereign government . . . even if . . . the
taking violates customary international law.”). See generally FOGADE v. ENB Revocable Trust,
263 F.3d 1274, 1293–94 (11th Cir. 2001) (discussing the impact of the Second Hickenlooper
Amendment on Sabbatino).
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(citation omitted). As we explain, showing a violation of international law in a
case like this one is no simple matter.
“As a rule, when a foreign nation confiscates the property of its own
nationals, it does not implicate principles of international law.” FOGADE, 263
F.3d at 1294. “At their core, such claims simply are not international.”
Mezerhane, 785 F.3d at 550. See also Beg v. Islamic Republic of Pakistan, 353
F.3d 1323, 1328 n.3 (11th Cir. 2003) (“International law prohibits expropriation of
alien property without compensation, but does not prohibit governments from
expropriating property from their own nationals without compensation.”).
Therefore, we must first determine whether the so-called “domestic takings rule”
bars the Comparellis’ claims.
A. THE CONCEPT OF NATIONALITY
“Nationality is a concept of international law; citizenship is not, but is a
concept in the national law of many states. A citizen under national law is
generally a national for purposes of international law, but in some states not all
nationals are citizens.” Restatement (Third) of the Foreign Relations Law of the
United States § 211 (1987).
International law recognizes that it is generally up to each state (i.e.,
country) to determine who are its nationals. See Stserba v. Holder, 646 F.3d 964,
973 (6th Cir. 2011) (“The basic rule under international law is that it is within each
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state’s jurisdiction to decide who are its nationals.”); Dhoumo v. Bd. of
Immigration Appeals, 416 F.3d 172, 175 (2d Cir. 2005) (“Nationality is a status
conferred by a state, and will generally be recognized by other states provided it is
supported by a ‘genuine link’ between the individual and the conferring state.”);
Restatement (Third) of Foreign Relations § 211 (“A state is free to establish
nationality law and confer nationality as it sees fit. However, under international
law other states need not recognize a nationality that is involuntary [ ] or that is not
based on an accepted ‘genuine link.’”); Robert D. Sloane, Breaking the Genuine
Link: The Contemporary International Legal Regulation of Nationality, 50 Harv.
Int’l L.J. 1, 2 (2009) (“[I]t is for each State to determine under its own law who are
its nationals.”) (quoting Convention on Certain Questions Relating to the Conflict
of Nationality Laws, The Hague, April 12, 1930). Thus, whether Carmina and
Julio are nationals of Venezuela is determined by the laws of Venezuela. Because
the parties have not addressed the issue, we have conducted our own preliminary
research into Venezuelan law on nationality. See Cooper v. Meridian Yachts, Ltd.,
575 F.3d 1151, 1163 n.5 (11th Cir. 2009) (“Rule 44.1 of the Federal Rules of Civil
Procedure permits us to conduct independent research on foreign law.”).
In Venezuela, “[p]ersons are either Venezuelans or foreigners.” Venezuelan
Civil Code, Chp. II, Art. 24 (Lawrence Pub. Co., Julio Romañach, Jr. ed. 2016).
The Venezuelan Constitution provides specific means of obtaining Venezuelan
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nationality. See Venezuelan Civil Code, Chp. II, Art. 25 (“Venezuelan persons are
those declared by the Constitution of the Republic to be such.”). Under the
Venezuelan Constitution, Venezuelan nationality may be attained either by birth or
naturalization. See Constitution of Venezuela, Chp. II, Sec. I, Arts. 32 & 33. 4
B. CARMINA’S NATIONALITY
Carmina, according to the record before us, is not a Venezuelan national.
Her Venezuelan identification card (provided to the district court) establishes that
she is an “Extranjer[a]”—a foreigner—and that her nationality is Italian. Likewise,
other Venezuelan records list Italy as her birthplace and “Resident” as her current
status. Pequiven admits as much, stating that Carmina is “Italian and a legal
Venezuelan resident since 1957.” Br. of Pequiven at 9.
Venezuelan law does not appear to confer nationality on long-time residents
who do not follow the constitutionally-prescribed means to become Venezuelan.
See generally Venezuelan Civil Code, Chp. II. See also Constitution of Venezuela,
Chp. II, Sec. I, Art. 33 (providing the procedure to obtain Venezuelan nationality
through naturalization). Although Carmina has lived in Venezuela for decades and
has significant ties there, it appears that Venezuela does not consider her to be one
4
On remand, the parties may wish to supplement our preliminary assessment of Venezuelan law
with other sources explaining, for example, whether Venezuela confers nationality in other
circumstances. See Belleri v. United States, 712 F.3d 543, 548 (11th Cir. 2013) (remanding to
the district court because the parties had not briefed Colombian law question so it could “decide
this matter in the first instance, after considering any relevant materials”).
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of its nationals. If this is the case, the domestic takings rule does not bar
Carmina’s claim. 5
C. JULIO’S NATIONALITY
Julio alleged that he is a citizen of Italy. But evidence in the record indicates
that he is also a national of Venezuela, having been born in that country. For
example, a Venezuelan identity card identifies Julio as “Venezolano.” Julio argues
that Venezuela is not permitted to go “beyond the four corners of the [c]omplaint
. . . to argue that he is a dual citizen of Italy and Venezuela.” Br. of Carmina and
Julio Comparelli at 12. As Helmerich made clear, however, this is no longer the
case; courts “may take evidence and resolve factual disputes” to determine the
applicability of the expropriation exception. See Helmerich, 137 S. Ct. at 1316.
Under the principle of jus sanguinis—citizenship based on parents’
citizenship—Julio may indeed be a national of Italy because his mother, Carmina,
is an Italian national. See Faddoul v. I.N.S., 37 F.3d 185, 189 n.3 (5th Cir. 1994)
(“Jus sanguinis . . . continues to be the primary basis for citizenship throughout
much of Europe, Africa, and the Near East.”); Restatement (Third) of Foreign
Relations § 211 cmt. c. (stating that both jus soli—citizenship based on place of
birth—and jus sanguinis are “universally accepted” as reflecting genuine links
5
This conclusion is based upon the record currently before us, which includes government
records submitted by Venezuela in its motion to dismiss. On remand, jurisdictional discovery
may yield other evidence about Carmina’s nationality at the time of the alleged expropriation.
As Helmerich dictates, the district court should resolve any such factual disputes.
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between the state and the individual); Citizenship through Italian parents/ancestors
(“iure sanguinis”), Consolato Generale d’Italia, http://www.consnewyork.esteri.it/
consolato_newyork/en/i_servizi/per-i-cittadini/cittadinanza/iure.html (consulate of
Italy describing nationality under principle of jus sanguinis) (last visited June 5,
2018).
Venezuela and Pequiven argue that Julio’s claims are barred by the domestic
takings rule under FOGADE and Mezerhane. Neither case, however, analyzed
whether the rule extends to a state’s expropriation of property belonging to one of
its nationals who is also a national of another country. See FOGADE, 263 F.3d at
1294 (Venezuelan nationals’ claim of expropriation by Venezuelan agency);
Mezerhane, 785 F.3d at 549 (Venezuelan national’s claim of expropriation by
Venezuela and Venezuelan government entities). How to treat a dual national, as
Julio appears to be, is a question of first impression for us.
Two district courts have addressed expropriation claims by dual nationals.
We discuss both cases below.
In Wahba v. National Bank of Egypt, 457 F. Supp. 2d 721 (E.D. Tex. 2006),
the court considered the National Bank of Egypt’s alleged expropriation of
property from an Egypt-U.S. dual national. The court held that the expropriation
exception did not apply because the expropriation did not violate international law.
Specifically, the plaintiff “held himself out as an Egyptian,” used his Egyptian
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passport while traveling, represented in corporate documents with the NBE that he
was Egyptian, and “relied on his status as an Egyptian national in his dealings with
the NBE.” Id. at 731–32. Critically, “from the NBE’s perspective it was dealing
with Egyptian assets owned by Egyptian corporations, the principal agent of which
was an Egyptian citizen.” Id. at 731.
In Bahgat v. Arab Republic of Egypt, 2015 WL 13654006 (S.D.N.Y. March
31, 2015), aff’d on alternative grounds, 631 F. App’x 69 (2d Cir. 2016), the court
considered another alleged expropriation by the NBE of property owned by an
Egypt-U.S. dual national. The court engaged in a fact-based inquiry to find that
the expropriation exception did not apply. Importantly, the plaintiff was Egyptian-
born and held an Egyptian passport, executed a power of attorney in 2012 stating
that he was an Egyptian national, filed a declaration stating that he “maintained a
more frequent presence in Egypt beginning in 1992,” lived primarily in Egypt
during the relevant period, and “acted as an Egyptian national during his dealings
with the Egyptian government and the NBE.” Id. at *6.
We find Wahba and Baghat instructive in determining whether the domestic
takings rule should apply in the case of a dual national. In doing so, we decline to
announce a broad principle that the rule applies automatically to dual nationals.
Rather, the inquiry is fact-based, considering matters such as the relationship
between the national and the state which allegedly expropriated the property, how
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the national—through his words and conduct—characterized himself, and whether
the state considered its national as one of its own or as a foreign national. See
Wahba, 457 F. Supp. 2d at 732; Baghat, 2015 WL 13654006, at *6.
This fact-based inquiry is in line with the analysis international courts have
used to determine the “dominant and effective nationality” of dual nationals. For
example, the Iran-U.S. Claims Tribunal has jurisdiction over claims of United
States nationals against Iran, but not claims by Iranian nationals against Iran.
Faced with claims by Iran-U.S. dual nationals, the Tribunal determined that it was
required by international law to consider “all relevant factors” to determine the
“dominant and effective nationality” of those dual national claimants for
jurisdictional purposes. See Iran-U.S. Claims Tribunal: Decision in Case No. A/18
Concerning the Question of Jurisdiction over Claims of Persons with Dual
Nationality, Apr. 6, 1984, 5 Iran-U.S. Claims Trib. Reports 251, 265. See also id.
at 263 (emphasizing a “search for the real and effective nationality based on the
facts of a case, instead of an approach relying on more formalistic criteria”).
The fact-based approach also appears to be the accepted analysis among
other international courts. See, e.g., Mergé Case (U.S. v. Italy), 14 R.I.A.A. 236,
247 (Italian-U.S. Conciliation Comm’n June 10, 1955) (“[H]abitual residence can
be one of the criteria of evaluation [to determine effective nationality], but not the
only one. The conduct of the individual in his economic, social, political, civic and
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family life, as well as the closer and more effective bond with one of the two
[s]tates must also be considered.”); Nottebohm Case (Liechtenstein v. Guatemala),
1955 I.C.J. 4, 22–23 (Apr. 6, 1955) (describing a “prevailing tendency [ ] to prefer
the real and effective nationality” and listing several factors for determination);
Drummond’s Case [1834] 12 Eng. Rep. 492, 500 (P.C.) (concluding that Mr.
Drummond “was technically a British subject, . . . yet, he was also, at the same
time, in form and substance, a French subject, domiciled in France, with all the
marks and attributes of French character,” and, therefore, a seizure of his property
by the French government was “in the exercise of its municipal authority over its
own subjects”). See generally Kim Rubenstein and Daniel Adler, International
Citizenship: The Future of Nationality in A Globalized World, 7 Ind. J. Global
Legal Stud. 519, 536–37 (2000) (discussing international courts’ approaches to
dual nationality).
We have described the related determination of a party’s residency as “a
fact-sensitive issue.” Comm’r. v. Estate of Sanders, 834 F.3d 1269, 1279 (11th
Cir. 2016) (considering bona fide residency for tax purposes). The same is true for
the concept of domicile. See Sunseri v. Macro Cellular Partners, 412 F.3d 1247,
1249 (11th Cir. 2005) (“This Court reviews the district court’s findings regarding
domicile under a clearly erroneous standard.”). Having supplied the dual
nationality framework, we remand the question of its application to Julio “because
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the [d]istrict [c]ourt is in the best position to review all the facts and conduct the
inquiry now required.” Local 703, I.B. of T. Grocery & Food Emps. Welfare Fund
v. Regions Fin. Corp., 762 F.3d 1248, 1259 (11th Cir. 2014). In answering the
question, the district court should consider (and the parties may dispute) the
threshold questions of whether Julio is in fact a citizen of both Italy and Venezuela.
Our statements in this opinion are not meant as conclusive determinations.
VI. THE PRESUMPTION AGAINST EXTRATERRITORIALITY
Venezuela and Pequiven rely upon a series of Supreme Court cases
establishing a presumption against extraterritoriality—“when a statute gives no
clear indication of an extraterritorial application, it has none.” Kiobel, 569 U.S. at
115 (quoting Morrison v. Nat‘l Australia Bank. Ltd., 561 U.S. 247, 248 (2010)).
Under Kiobel and Morrison, our task is to “ask whether the presumption against
extraterritoriality has been rebutted—that is, whether the statute gives a clear,
affirmative indication that it applies extraterritorially.” RJR Nabisco, Inc. v.
European Cmty., 136 S. Ct. 2090, 2101 (2016).
According to Venezuela and Pequiven, the FSIA “expropriation exception
does not have extraterritorial effect if there is no connection whatsoever to the
United States.” Br. of Pequiven at 21. This may be true, but the argument ignores
that the expropriation exception contains a nexus requirement providing a requisite
connection to the United States sufficient to allow extraterritorial application. See
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§ 1605(a)(3) (requiring “that property or any property exchanged for such property
is present in the United States in connection with a commercial activity carried on
in the United States by the foreign state; or that property or any property
exchanged for such property is owned or operated by an agency or instrumentality
of the foreign state and that agency or instrumentality is engaged in a commercial
activity in the United States”). The expropriation exception focuses on the
connection of the property in question (or any property exchanged for that
property) to the United States. See id. Congress explicitly noted that the
expropriated property itself “need not be present” in the United States, so long as
the agency or instrumentality of the foreign state owns or operates it (or property
exchanged for it) and is engaged in commercial activity in the United States. See
H.R. Rep. 94-1487, at 19 (1976). If a plaintiff satisfies this requirement, that is
enough to permit exterritorial application. See Verlinden, 461 U.S. at 490–91 (“If
an action satisfies the substantive standards of the [FSIA], it may be brought in
federal court regardless of the citizenship of the plaintiff.”). We cannot, as
Venezuela and Pequiven apparently urge, engraft additional requirements onto
those which Congress has already decreed. See Silva-Hernandez v. U.S. Bureau of
Citizenship & Immigr. Servs., 701 F.3d 356, 361 (11th Cir. 2012) (“[C]ourts have
no authority to alter statutory language. We cannot add to the terms of the
provision what Congress left out.”) (alteration omitted); Friends of the Everglades
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v. S. Fla. Water Mgmt. Dist., 570 F.3d 1210, 1224 (11th Cir. 2009) (“[W]e are not
allowed to add or subtract words from a statute; we cannot rewrite it.”).
Assuming the Comparellis are able to satisfy the necessary nexus to the
United States, this case mirrors the situation described in RJR Nabisco, which held
that the presumption against extraterritoriality was rebutted for certain applications
of the federal RICO statute. There, the Supreme Court noted “that RICO defines
racketeering activity to include a number of predicates that plainly apply to at least
some foreign conduct.” RJR Nabisco, 136 S. Ct. at 2101. For example, the
prohibition against hostage taking includes conduct that occurred outside the
United States, provided that “the offender or the person seized or detained is a
national of the United States,” “the offender is found in the United States,” or “the
governmental organization sought to be compelled is the Government of the
United States.” See 18 U.S.C. § 1203(b)(1); RJR Nabisco, 136 S. Ct. at 2101–02.
In other words, like the FSIA expropriation exception, the RICO statute as applied
to exterritorial hostage takings ensured a specific nexus to the United States. That
nexus requirement was enough to rebut the presumption against extraterritoriality
in RJR Nabisco, and we hold that the nexus requirement of § 1605(a)(3) similarly
rebuts that presumption here.
Amerada Hess does not counsel otherwise. There, two Liberian
corporations sued the Argentine Republic in federal court seeking to recover
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damages stemming from the alleged bombing of their oil tanker in the South
Atlantic, about 600 miles off the coast of Argentina. See Amerada Hess, 488 U.S.
at 431. The corporations argued that jurisdiction was appropriate under
§ 1605(a)(5), the FSIA exception for non-commercial torts. See id. at 439. The
Supreme Court held that the exception did not apply because it was “limited by its
terms [ ] to those cases in which the damage to or loss of property occurs in the
United States.” Id. (emphasis in original). The companies argued that the
bombing occurred “in the United States” because the FSIA defined the United
States to include all “territory and waters, continental and insular, subject to the
jurisdiction of the United States,” including the high seas, which are within its
admiralty jurisdiction. See id. at 440 (quoting 28 U.S.C. § 1603). The Supreme
Court, however, rejected this interpretation of “United States” to include the
bombing over 5,000 miles from the United States coast due to “the canon of
construction which teaches that legislation of Congress, unless contrary intent
appears, is meant to apply only within the territorial jurisdiction of the United
States.” See id. at 440–41.
The expropriation exception does not contain the same limiting language as
the non-commercial tort exception addressed in Amerada Hess. Rather,
§ 1605(a)(3) contemplates suits regarding exterritorial takings so long as the nexus
requirement in the exception is satisfied. In fact, in Amerada Hess, the Supreme
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Court specifically distinguished the commercial activity exception, § 1605(a)(2),
from the non-commercial tort exception, § 1605(a)(5). It explained that under the
commercial activity exception, “a foreign state may be liable for its commercial
activities ‘outside the territory of the United States’ having a ‘direct effect’ inside
the United States.” Amerada Hess, 488 U.S. at 441. We see no reason to treat the
expropriation exception differently. So long as the nexus requirement is met,
§ 1605(a)(3) may apply to an extraterritorial taking in violation of international law
of property belonging to individuals who are not United States nationals. See
Verlinden, 461 U.S. at 490–91 (noting that Congress did not restrict “the class of
potential plaintiffs,” but instead “enact[ed] substantive provisions requiring some
form of substantial contact with the United States”); Cassirer v. Kingdom of Spain,
616 F.3d 1019, 1028 (9th Cir. 2010) (“[W]e understand that Congress meant for
jurisdiction to exist over claims against a foreign state whenever property that its
instrumentality ends up claiming to own had been taken in violation of
international law, so long as the instrumentality engages in a commercial activity
in the United States.”). Put differently, the nexus requirement in § 1605(a)(3) is
the “connection . . . to the United States,” Br. of Pequiven at 21, that Congress has
mandated for extraterritorial application.
Whether or not the Comparellis have actually satisfied the nexus
requirement is another matter. They allege that Pequiven is an agency or
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instrumentality of Venezuela and that it engages in commercial activity in the
United States. But, as Helmerich dictates, the district court will need determine on
remand whether the nexus requirement is, in fact, established; mere allegations are
no longer sufficient. See Helmerich, 137 S. Ct. at 1316. All we hold today is that,
assuming the statutory nexus to the United States is satisfied, the expropriation
exception may apply to an extraterritorial taking of property belonging to foreign
nationals.
VII. WHETHER THE COMPARELLIS SATISFIED THE EXPROPRIATION EXCEPTION
Because the domestic takings rule does not appear to bar Carmina’s claim
(and may not bar Julio’s claim), we next must determine whether the expropriation
exception is satisfied. Again, this exception requires a showing that (1) rights in
property are at issue; (2) the property was taken; (3) the taking was in violation of
international law; and (4) at least one of the two statutory nexus requirements are
satisfied. See § 1605(a)(3).
Not surprisingly, the parties dispute whether this standard has been met. But
they and the district court lacked the benefit of Helmerich. Although the parties’
briefs on appeal discuss how § 1605(a)(3) applies to the facts of this case, the
parties below submitted only limited evidence and the district court made no
factual findings resolving any of the now-critical disputes. This leaves us with
several matters that the record simply does not answer.
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For example, under the third prong of the exception, there are three ways in
which a taking may violate international law: (1) when it does not serve a public
purpose; (2) when it discriminates against those who are not nationals of the
country; or (3) when it is not accompanied by provision for just compensation. See
Chettri v. Nepal Rastra Bank, 834 F.3d 50, 58 (2d Cir. 2016); Cassirer, 616 F.3d at
1027. See also Restatement (Third) of Foreign Relations § 712 (listing these three
manners); H.R. Rep. 94-1487, at 19–20 (1976) (a taking violates international law
if it is done “without payment of the prompt adequate and effective compensation
required by international law” or is “arbitrary or discriminatory in nature”).6
Here, the purpose of the alleged expropriation is hotly contested. See
Siderman de Blake v. Republic of Argentina, 965 F.2d 699, 712 (9th Cir. 1992)
(considering allegations that “Argentina officials seized INOSA for their personal
profit and not for any public purpose”). And there is no finding as to whether it
was done with a discriminatory motive. See id. at 712 (considering allegation that
Argentina targeted the plaintiffs because they were Jewish); Restatement (Third) of
Foreign Relations § 712 cmt. f (noting that “a program of taking that singles out
6
These requirements are subject to the domestic takings rule. As noted, “when a foreign nation
confiscates the property of its own nationals, it does not implicate principles of international
law.” FOGADE, 263 F.3d at 1294.
The Comparellis have alleged numerous treaty violations as sufficient to satisfy the “violation
of international law” requirement of the expropriation exception. But “the Eleventh Circuit has
never held that the exception to sovereign immunity set out in 28 U.S.C. § 1605(a)(3) is
triggered by human rights treaty-based allegations.” Mezerhane, 785 F.3d at 549. And, as in
Mezerhane, “we decline to do so here.” Id.
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aliens generally, or aliens of a particular nationality, or particular aliens, would
violate international law”). But cf. Helmerich & Payne Int’l Drilling Co. v.
Bolivarian Republic of Venezuela, 784 F.3d 804, 813–14 (D.C. Cir. 2015)
(discrimination “‘implies unreasonable distinction,’ and so ‘takings that
invidiously single out property of persons of a particular nationality would be
discriminatory,’ whereas ‘classifications, even if based on nationality, that are
rationally related to the state’s security or economic policies might not be
[discriminatory]’ and thus not in violation of international law”) (citing
Restatement (Third) of Foreign Relations § 712) (alterations omitted), vacated and
remanded, 137 S. Ct. 1312 (2017).7
We also lack any information about what compensation, if any, would be
required under the circumstances. Compare Chettri, 834 F.3d at 58 (freezing of
assets under “routine law enforcement action” did not constitute a violation of
international law), with Siderman de Blake, 965 F.2d at 712 (allegation that the
plaintiffs did not “receive[ ] any compensation for the seizure, let alone just
compensation” stated a claim for a violation of international law) (emphasis
removed). And, finally, the record does not explain and the district court
understandably did not consider what remedies are available in Venezuela, whether
7
That Marivelca is a Venezuelan corporation is not necessarily dispositive. A court may
consider whether “a foreign state treats a corporation in a particular way because of the
nationality of its shareholders.” Banco Nacional de Cuba v. Farr, 383 F.2d 166, 185 (2d Cir.
1967) (noting that Cuban expropriation of corporation occurred “because it was largely owned
by nationals of the United States of North America”).
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the Comparellis exhausted them, or whether any such remedies are inadequate so
that any failure to exhaust them should be excused. See Altmann, 541 U.S. at 714
(Breyer, J. concurring) (“[A] plaintiff may have to show an absence of remedies in
the foreign country sufficient to compensate for any taking.”); Abelesz v. Magyar
Nemzeti Bank, 692 F.3d 661, 679–85 (7th Cir. 2012) (detailing a “well-established
rule of customary international law” that available remedies must be exhausted for
a taking to violate international law, unless “there is a legally compelling reason
for plaintiffs’ failure to exhaust [ ] remedies,” such as when those remedies are
“barred by inaction or hostility” by the foreign state).
These are just some of the issues that must be addressed to determine
whether the expropriation exception is satisfied. In this scenario, with Helmerich
having been issued after the case was on appeal, we believe it is appropriate to
remand and have the district court determine in the first instance whether
jurisdiction exists under § 1605(a)(3) of the FSIA. See Marsteller ex rel. United
States v. Tilton, 880 F.3d 1302, 1315 (11th Cir. 2018) (remanding case in light of
an intervening Supreme Court opinion, including for consideration of whether to
allow the plaintiffs to file a second amended complaint); Miller v. King, 449 F.3d
1149, 1151 (11th Cir. 2006) (concluding that, in light of an intervening Supreme
Court decision, “th[e] case should be remanded to the district court for Miller to
amend his complaint so that the proper [ ] analysis can be undertaken.”). Because
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Helmerich heightened the proof required of the Comparellis to establish
jurisdiction under the expropriation exception of the FSIA, they should be allowed
to amend their complaint. See Fed. R. Civ. P. 15; Miller, 449 F.3d at 1151. And
Venezuela and Pequiven should, of course, be allowed to respond to the amended
complaint as they see fit.
VIII. REASSIGNMENT TO ANOTHER DISTRICT JUDGE
Because we are remanding the case to the district court, we must consider
the Comparellis’ request that we direct the case to be reassigned to a different
district judge pursuant to 28 U.S.C. § 2106. Reassignment is a “severe remedy,”
Stargel v. SunTrust Banks, Inc., 791 F.3d 1309, 1311 (11th Cir. 2015), and only
“appropriate where the trial judge has engaged in conduct that gives rise to the
appearance of impropriety or a lack of impartiality in the mind of a reasonable
member of the public.” United States v. Torkington, 874 F.2d 1441, 1446 (11th
Cir. 1989). Where, as here, there is no indication of actual bias, we apply a three
factor test from Torkington, considering “(1) whether the original judge would
have difficulty putting [her] previous views and findings aside; (2) whether
reassignment is appropriate to preserve the appearance of justice; [and] (3) whether
reassignment would entail waste and duplication out of proportion to gains realized
from reassignment.” Id. at 1447.
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No factor supports reassignment in this case. The Comparellis explain that
their “reasonable belief is grounded on a pattern of adverse rulings,” Br. of
Carmina and Julio Comparelli at 52, but “the fact that the district judge ruled
against the appellants previously is of little impact; otherwise every reversed case
would have to be reassigned on remand.” Stargel, 791 F.3d at 1312. We are
confident that the experienced and able district judge will fairly and impartially
adjudicate this dispute on remand. Nothing whatsoever in the record leads us to
believe otherwise.
IX. CONCLUSION
We reverse the dismissal of the Comparellis’ complaint. On remand, the
district court should permit the Comparellis to file an amended complaint and, after
Venezuela and Pequiven have responded, address whether the domestic takings
rule applies and whether jurisdiction exists under the FSIA’s expropriation
exception. Jurisdictional discovery and the presentation of evidence may be
required, but we leave those matters in the discretion of the district court. See
Helmerich, 137 S. Ct. at 1316–17.
“We recognize that merits and jurisdiction will sometimes come
intertwined.” Id. at 1319. If, on remand, the district court’s resolution of the
jurisdictional questions under Helmerich requires it to “inevitably decide some, or
all, of the merits issues, so be it.” Id.
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REVERSED AND REMANDED.
33