Broidy Capital Management LLC v. Nicolas Muzin

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued February 26, 2021 Decided September 3, 2021
No. 20-7040
BROIDY CAPITAL MANAGEMENT LLC AND ELLIOTT BROIDY,
APPELLEES
v.
NICOLAS D. MUZIN, ET AL.,
APPELLANTS
Appeal from the United States District Court
for the District of Columbia
(No. 1:19-cv-00150)
Stephen J. Obermeier argued the cause for appellants.
With him on the joint briefs were Jeremy J. Broggi, Krystal B.
Swendsboe, Jeffrey A. Udell, Alison L. Andersen, Laura E. Zell,
and Charles S. Fax.
Shannen W. Coffin argued the cause for appellees. With
him on the brief were Filiberto Agusti and Linda C. Bailey.
Michael J. Baratz entered an appearance.
Before: PILLARD and WALKER, Circuit Judges, and
RANDOLPH, Senior Circuit Judge.
Opinion for the Court filed by Circuit Judge PILLARD.
2
PILLARD, Circuit Judge: Defendants-Appellants, public
relations contractors who are citizens and residents of the
United States, appeal the district court’s order denying their
claim of immunity from suit for alleged violations of U.S. law
in the course of their work here on behalf of the State of Qatar.
Business executive and activist Elliott Broidy and his company
(collectively, Broidy) sued the defendants, claiming that, in
their efforts to discredit Broidy for speaking out against Qatar,
they distributed emails illegally hacked from Broidy’s private
servers. Without acknowledging any involvement in such a
scheme, the defendants argue that Broidy’s allegations that
they had acted on Qatar’s behalf mean they are shielded by
Qatar’s foreign sovereign immunity. All agree that the Foreign
Sovereign Immunities Act (FSIA) by its terms does not apply,
but the defendants say residual common-law immunity protects
them as agents of Qatar acting at its behest. Broidy argues that
the district court’s nonfinal judgment is not immediately
appealable and that, in any event, the defendants lack
immunity.
The jurisdictional question is close, but we believe we
have jurisdiction over the appeal based on the defendants’
colorable claim of immunity. On the merits, we affirm the
district court’s order denying immunity. The State of Qatar has
not said that the conduct challenged as unlawful was at its
behest nor has it urged the United States to recognize the
defendants’ immunity. The United States Department of State,
for its part, has never suggested that the defendants are immune
as agents of Qatar. In the absence of any such
acknowledgement or suggestion, a private party claiming
foreign sovereign immunity bears a heavy burden. The
defendants here are U.S. citizens and a U.S. firm sued in their
private capacities by U.S. plaintiffs for violations of U.S. and
California law within the United States. We hold they have
3
failed to establish that any foreign official immunity shields
them from further proceedings and ultimate liability.
BACKGROUND
Because we review the district court’s decision on a
motion to dismiss, we draw much of the background from
Broidy’s amended complaint. See Kareem v. Haspel, 986 F.3d
859, 865-66 & n.7 (D.C. Cir. 2021). But where, as here, “the
motion is based on a claim of foreign sovereign immunity,”
which, if meritorious, “provides protection from suit and not
merely a defense to liability,” the court “must engage in
sufficient pretrial factual and legal determinations to satisfy
itself of” jurisdiction. Belhas v. Ya’alon, 515 F.3d 1279, 1281
(D.C. Cir. 2008) (citation omitted). We rely for the most part
on the complaint, on which the defendants have chosen to rest,
and make limited reference to a consulting agreement of record
in a California case arising from the same events.
Broidy describes himself as “a prominent business and
civic leader who has actively served in leadership roles in U.S.
government advisory groups, Jewish organizations, and the
Republican Party for decades.” Amended Compl. ¶ 45, J.A.
23. In recent years, Broidy has urged the United States to
oppose the State of Qatar’s alleged funding and harboring of
terrorists and to support the efforts of Qatar’s neighbors to
isolate it economically. “Beginning in early 2017,” he
explains, he “became a vocal critic of Qatar’s support for
terrorists and friendly relationship with Iran, which he sees as
a major threat to the security of the United States and its allies.”
Id. ¶ 46, J.A. 24. And Broidy has had powerful audiences for
his advocacy, including “directly interact[ing] with” then-
President Donald Trump. Id. ¶ 45, J.A. 23.
Broidy alleges that Qatar sought to counter his advocacy.
It engaged in “a multi-million dollar dark money effort to
4
recruit lobbyists and influencers to polish Qatar’s public image
within the United States.” Id. ¶ 50, J.A. 24. Broidy dubs that
effort the “Qatari Enterprise.” Id.; see also id. ¶ 2, J.A. 13.
That is where the defendants enter the picture: Nicholas D.
Muzin is a former Republican legislative aide and Trump
campaign staffer; Joseph Allaham is a former restauranteur;
Stonington Strategies, LLC, is a public relations consulting
firm those two men co-founded; and Gregory Howard is a
media placement expert at another public strategy firm. Qatar
allegedly paid them millions in hopes of rehabilitating its
image with “the Republican, American Jewish community and
other conservative supporters of Israel.” Id. ¶ 51, J.A. 25.
Broidy acknowledges the lawfulness of the defendants’
initial efforts, including their outreach to relevant stakeholders.
But, Broidy alleges, “Muzin’s and Allaham’s efforts . . . were
largely ineffective, in part because of Mr. Broidy’s actions to
undercut any efforts by Qatar . . . to change the minds of other
Republican Jewish community leaders.” Id. ¶ 71, J.A. 29. That
failure allegedly drove the Qatari Enterprise to turn to lawless
actions to silence Broidy. The Enterprise retained a
cybersecurity firm, Global Risk Advisors LLC, “to coordinate
an offensive cyber and information operation against” Broidy
and his company, “including by infiltrating [their] computer
networks and obtaining unauthorized access to Google email
accounts of United States persons associated with [Broidy]”
such as his spouse and executive assistant. Id. ¶ 79, J.A. 30-
31.
Muzin and Allaham’s alleged role was to distribute hacked
information. They collaborated with Howard “to place
information illegally obtained from the hacking in the hands of
journalists, media organizations, and public relations
professionals.” Id. ¶ 116, J.A. 39. Broidy alleges that their
purpose in “disseminating emails and documents hacked and
5
stolen from Broidy to the U.S. media” was “to destroy Broidy’s
public standing,” and with it his ability to influence public and
presidential opinion on Qatar. Id. ¶ 52, J.A. 25.
In January 2019, Broidy and his company, Broidy Capital
Management, LLC, sued Muzin, Allaham, Howard, and
Stonington Strategies in the District of Columbia under U.S.
and California law. As amended, his thirteen-count complaint
asserts violations of the Racketeer Influenced and Corrupt
Organizations Act, Stored Communications Act, Computer
Fraud and Abuse Act, Defend Trade Secrets Act, and
California law.
This is not Broidy’s first lawsuit over this general course
of events. First, in early 2018 in the Central District of
California, Broidy sued each of the defendants named here
except Howard, along with Global Risk Advisors, the State of
Qatar, and Qatari officials. See Broidy Cap. Mgmt., LLC v.
State of Qatar, 982 F.3d 582, 586 (9th Cir. 2020). That court
dismissed Broidy’s claims against Qatar for lack of subject-
matter jurisdiction under the FSIA and nixed the remaining
claims against the other defendants for lack of sufficient
contacts with California to support personal jurisdiction. Id. at
586, 596. The Ninth Circuit affirmed. Id.
Broidy also sued two of the defendants’ alleged
coconspirators in separate lawsuits in the Southern District of
New York. One of those defendants, a former U.N. official not
named in the California case, obtained a dismissal based on
diplomatic immunity, which the Second Circuit affirmed. See
Broidy Cap. Mgmt. LLC v. Benomar, 944 F.3d 436, 439-40 (2d
Cir. 2019). In the other New York lawsuit, Global Risk
Advisors successfully argued that Broidy’s complaint lacked
sufficient allegations linking the cybersecurity firm to the hack.
See Broidy v. Glob. Risk Advisors LLC, No. 1:19-cv-11861,
6
2021 WL 1225949, at *8-10 (S.D.N.Y. Mar. 31, 2021). In
dismissing the suit, however, the court held that Global Risk
Advisors was not entitled to any form of immunity from suit.
Id. at *5-7.
Shortly after Broidy filed his amended complaint in
federal district court here, the defendants moved to dismiss.
They claimed immunity based on Broidy’s allegations
regarding their relationship to Qatar, a foreign sovereign, and,
alternatively, that the complaint failed to state a legally
adequate claim on its merits. The court granted the motions in
part, dismissing certain claims as legally inadequate, but
rejecting the immunity defense. In this interlocutory appeal,
the defendants challenge only the district court’s denial of
immunity.
The defendants asserted that Broidy’s own allegations that
they acted on behalf of Qatar must be taken as true at the
motion-to-dismiss stage. They emphasized that Qatar’s
foreign sovereign immunity in relation to the same events had
been recently affirmed by the Ninth Circuit, see State of Qatar,
982 F.3d at 586, 596, and contended that if they acted for Qatar
as Broidy alleges they are entitled to conduct-based foreign
official immunity.
The district court rejected the immunity defense. It noted
at the outset that because the defendants are private individuals
and not a foreign state the FSIA does not apply, so any
immunity must arise from the common law. Broidy Cap.
Mgmt. LLC v. Muzin, No. 19-cv-0150, 2020 WL 1536350, at
*5 (D.D.C. Mar. 31, 2020) (citing Samantar v. Yousuf
(Samantar I), 560 U.S. 305, 325 (2010)); see also Lewis v.
Mutond, 918 F.3d 142, 145 (D.C. Cir. 2019). The court
evaluated the defendants’ assertions of immunity under two
7
distinct analyses without “resolv[ing] which . . . properly
applies[.]” Broidy Cap. Mgmt., 2020 WL 1536350, at *6.
The district court first sought to ascertain whether the U.S.
Department of State has an established policy to recognize the
defendants’ asserted grounds for immunity, and held it does
not. Id. Relying on the Fourth Circuit’s description of State
Department policy in its decision on remand from the Supreme
Court in Samantar, the district court observed that “U.S.
residents . . . who enjoy the protections of U.S. law ordinarily
should be subject to the jurisdiction of the courts, particularly
when sued by U.S. residents.” Id. (alteration in original)
(quoting Yousuf v. Samantar (Samantar II), 699 F.3d 763, 777
(4th Cir. 2012)). The court also considered and rejected the
defendants’ claim to protection by what they call “derivative”
foreign sovereign immunity. Id. at *6-7. Neither this court nor
the State Department has ever endorsed a derivative foreign
sovereign immunity doctrine for private agents of a foreign
government, the district court noted, and it was unpersuaded by
the analogy the defendants drew to derivative immunity for
private parties acting as U.S. government agents in the
domestic context. Id. at *7. The court described derivative
immunity as materially different in the domestic context from
immunity that might appropriately shield agents under the
direction of a foreign sovereign: “The rationale for domestic
derivate sovereign immunity is that the United States and
agents of the United States have ‘the same interest in getting
the government’s work done.’” Id. (citation omitted). “But,”
the court observed, “the United States does not necessarily
share an interest with the agents of a foreign sovereign, and
those interests will routinely diverge, as they do in this case.”
Id.
The court concluded that, because each of the defendants
is a U.S. resident and citizen facing claims brought by a U.S.
8
plaintiff under U.S. domestic law for conduct alleged to have
occurred on U.S. soil, “the State Department would not grant
immunity to these defendants.” Id. at *8.
Second, the district court held that the defendants are not
shielded from Broidy’s claims under the standard for foreign
official immunity set out in section 66(f) of the Restatement
(Second) of Foreign Relations Law of the United States (Am.
L. Inst. 1965) (hereinafter Restatement). The court noted that
the Supreme Court has not decided whether the Restatement
correctly sets out the scope of common-law immunity
applicable to current or former foreign officials, nor have we.
Broidy Cap. Mgmt., 2020 WL 1536350, at *6. It, too, avoided
taking a position on the Restatement standard because whether
it applied would have no effect on the outcome; the defendants
lacked immunity under any standard. Section 66(f) of the
Restatement would afford immunity to “any [] [p]ublic
minister, official, or agent of the state with respect to acts
performed in his official capacity if the effect of exercising
jurisdiction would be to enforce a rule of law against the state.”
Lewis, 918 F.3d at 145 (alterations in original) (quoting
Restatement § 66(f)). The district court held it decisive under
the Restatement test that “Broidy is suing the defendants ‘in
their individual capacities’ and ‘is not seeking compensation
out of state funds.’” Broidy Cap. Mgmt., 2020 WL 1536350,
at *8 (quoting Lewis, 918 F.3d at 147).
Because none of the defendants’ theories supported the
immunity defense, the district court held that it had jurisdiction
and, as relevant here, denied the motion to dismiss insofar as it
asserted immunity.
The defendants promptly moved to certify the immunity
question for interlocutory review under 28 U.S.C. § 1292. The
district court denied the motion. The defendants noticed this
9
appeal. Broidy moved to dismiss the appeal summarily for
want of a final order from the district court. Our motions panel
declined to make a summary ruling, instead referring that
motion to us.
ANALYSIS
We review de novo the district court’s decision denying
the defendants’ motion to dismiss under Federal Rule of Civil
Procedure 12(b)(1) for lack of subject-matter jurisdiction. de
Csepel v. Republic of Hungary, 714 F.3d 591, 597 (D.C. Cir.
2013). On appeal from pleading-stage orders, we ordinarily
“accept the well-pleaded factual allegations as true and draw
all reasonable inferences from those allegations in the
plaintiff’s favor.” See Kareem, 986 F.3d at 865 (quoting
Arpaio v. Obama, 797 F.3d 11, 19 (D.C. Cir. 2015)). But a
defendant claiming sovereign immunity in a motion to dismiss
“bears the burden of proving” they qualify for it. Lewis, 918
F.3d at 145; see also Ivanenko v. Yanukovich, 995 F.3d 232,
236 (D.C. Cir. 2021). And because immunity, where it applies,
requires us to relinquish our jurisdiction over the merits of the
dispute, we “must engage in sufficient pretrial factual and legal
determinations to” adjudicate an immunity claim made in a
motion to dismiss. Belhas, 515 F.3d at 1281 (citation omitted);
see Bolivarian Republic of Venezuela v. Helmerich & Payne
Int’l Drilling Co., 137 S. Ct. 1312, 1324 (2017); Ex parte
Republic of Peru, 318 U.S. 578, 588 (1943).
We begin with our own jurisdiction to hear this appeal,
which Broidy contests, before proceeding to the substance of
the immunity issue.
A.
Our jurisdiction to hear this appeal is a close question. An
order denying a motion to dismiss is typically not an appealable
10
final order. See Lauro Lines s.r.l. v. Chasser, 490 U.S. 495,
498 (1989); Bombardier Corp. v. Nat’l R.R. Passenger Corp.,
333 F.3d 250, 253 (D.C. Cir. 2003); 28 U.S.C. § 1291. But
sovereign immunity, where it applies, protects a sovereign’s
dignitary interests in avoiding suit, not just ultimate liability.
To that end, orders denying colorable claims of sovereign
immunity generally are immediately appealable pursuant to the
collateral order doctrine. See P.R. Aqueduct & Sewer Auth. v.
Metcalf & Eddy, Inc., 506 U.S. 139, 143-44 (1993)
(recognizing immediate appealability of order denying
sovereign immunity as involving important interests separate
from the merits that would be effectively unreviewable on
appeal after judgment); Process & Indus. Devs. Ltd. v. Federal
Republic of Nigeria, 962 F.3d 576, 584 (D.C. Cir. 2020). That
must be so, because if immunity appeals had to await final
judgment on the merits, immunity erroneously denied would
lose its litigation-avoidance component before the error could
be corrected. See Kilburn v. Socialist People’s Libyan Arab
Jamahiriya, 376 F.3d 1123, 1126 (D.C. Cir. 2004).
At the same time, immediate appealability is strong
medicine that is harmful when misused. Collateral order
appeals contravene strong judicial-efficiency interests
supporting the final judgment rule. See Will v. Hallock, 546
U.S. 345, 349-50 (2006). To prevent baseless appeals that
delay and potentially obstruct just claims, courts generally
confine interlocutory immunity appeals to legal questions of at
least colorable merit that are separate and distinct from the
underlying claims. See Johnson v. Jones, 515 U.S. 304, 317
(1995) (limiting immunity appeal to legal questions); Process
& Indus. Devs., 962 F.3d at 583-84 (allowing appeal of
colorable claim of immunity).
Broidy acknowledges that denials of foreign sovereign
immunity are typically immediately appealable but contends
11
that we lack jurisdiction here for two interrelated reasons.
First, he asserts that immediate appeals from orders denying
foreign sovereign immunity are available only to foreign
states—not individuals sued as a foreign state’s agents.
“Because Qatar is not a party here” and has not otherwise
asserted its sovereign interests in immunizing these defendants,
Broidy argues, “the interests usually attendant to litigation
against foreign states are not implicated.” Appellees’ Br. 25.
But the Supreme Court in Samantar acknowledged that, in
addition to the immunity of sovereign states that Congress
codified in the FSIA, residual conduct-based immunity may
protect certain individual officials of foreign governments.
Samantar I, 560 U.S. at 320-21. As a general matter, where a
colorable defense of such conduct-based foreign official
immunity is raised, an order denying it is immediately
appealable. See Samantar II, 699 F.3d at 768 n.1; Mamani v.
Berzain, 654 F.3d 1148, 1151 n.3 (11th Cir. 2011); cf. Process
& Indus. Devs., 962 F.3d at 583 (appeals “must be colorable”).
Relatedly, Broidy argues that the defendants’ immunity
assertion does not raise a matter of sufficient “public interest”
or “identify a ‘particular value of high order’” to support
immediate review. Appellees’ Br. 23-24 (emphasis omitted)
(quoting Will, 546 U.S. at 352-53). The reasoning in Will v.
Hallock on which Broidy relies identifies general categories of
important interests that courts have recognized to support
immediate appeal under the collateral order doctrine. See 546
U.S. at 351-53. But Broidy’s contention that the “defendants’
claims of conduct-based foreign official immunity do not raise
weighty enough public interests to justify this Court’s
collateral-order jurisdiction,” Appellees’ Br. 27, is based on
what he sees as weaknesses in the defendants’ immunity claims
rather than any doubt that a denial of a colorable claim of
conduct-based immunity for individual agents of a foreign state
would be immediately appealable. In the absence of binding
12
precedent foreclosing such an immunity defense, we think
Broidy’s argument is appropriately directed at the merits of the
defendants’ immunity, not their appealability.
We conclude that we have appellate jurisdiction because
the asserted defense of conduct-based immunity for the
defendants’ acts allegedly taken on behalf a foreign state
satisfy the requirements of the collateral order doctrine. Based
on allegations that they acted at the behest of a foreign state,
their immunity defense draws on sparse authorities in an
unsettled area of law. This appeal provides an opportunity to
mark some limits. We recognize that, in doing so, our decision
may nudge previously colorable claims into the realm of non-
colorable. Clarification of the principles of immunity law
should help to ensure that our acceptance of jurisdiction here
does not invite a host of appeals asserting non-colorable claims
of immunity. When a future litigant situated similarly to the
defendants cites today’s decision in support of immediate
appeal, we will face the threshold question “[w]hether after our
holding in this case, . . . such a defendant may bring an
interlocutory appeal.” Toussie v. Powell, 323 F.3d 178, 182
(2d Cir. 2003).
B.
We proceed to de novo review of the district court’s denial
of the defendants’ motions to dismiss on immunity grounds.
See de Csepel, 714 F.3d at 597.
1.
United States courts historically have recognized a
common-law doctrine of foreign sovereign immunity as “a
matter of grace and comity on the part of the United States”
toward other sovereign states. Verlinden B.V. v. Cent. Bank of
Nigeria, 461 U.S. 480, 486 (1983). In the Foreign Sovereign
13
Immunities Act of 1976 (FSIA), Congress codified the doctrine
insofar as it protects a foreign state sued in its sovereign
capacity. See 28 U.S.C. § 1602 et seq.; Helmerich & Payne,
137 S. Ct. at 1319-21. Under the FSIA, a foreign state is
“presumpti[vely]” immune from suit in U.S. courts, subject to
enumerated exceptions. Schermerhorn v. State of Israel, 876
F.3d 351, 358 (D.C. Cir. 2017); see 28 U.S.C. §§ 1603-1607.
But the FSIA covers only civil actions against a “foreign state”
or its “political subdivisions and agencies or instrumentalities,”
not individuals. Samantar I, 560 U.S. at 317-19; see 28 U.S.C.
§ 1603(a)-(b).
Foreign sovereign immunity may, in certain
circumstances, also protect individuals even though the FSIA
does not. See Samantar I, 560 U.S. at 324-25. Residual
common-law foreign sovereign immunity includes: (1)
“[s]tatus-based immunity[, which] is reserved for diplomats
and heads of state,” Lewis, 918 F.3d at 145, and (2) “conduct-
based immunity,” for an “act performed by the individual as an
act of the State,” Samantar II, 699 F.3d at 774 (quoting Hazel
Fox, The Law of State Immunity 455 (2d ed. 2008)); see also
Lewis, 918 F.3d at 145. The defendants here are not diplomats
or heads of state; they claim only conduct-based immunity.
Immunity claims not covered by the FSIA are governed by
a two-step analysis. Samantar I, 560 U.S. at 311-12. We ask
first whether the State Department has made a “suggestion of
immunity” applicable to the defendant. Id. at 311. The
diplomatic representative of the implicated sovereign may
request that the State Department make a suggestion of
immunity, and if the State Department agrees immunity is
appropriate, the district court typically dismisses the case on
that ground. Id.; see Republic of Mexico v. Hoffman, 324 U.S.
30, 34-35 (1945). Broidy does not allege, nor do the defendants
14
assert, that the State Department offered its views in this case
or that Qatar ever sought them. We thus proceed to step two.
In the absence of any suggestion of immunity, the court is
left at the second step “to decide for itself whether all the
requisites for immunity exist[].” Samantar I, 560 U.S. at 311(quoting Ex parte Peru, 318 U.S. 578, 587 (1943)). The
Supreme Court has not explained precisely what “requisites”
an individual claiming immunity must establish, nor have we.
But the Court in Samantar observed that courts historically
“inquired ‘whether the ground of immunity is one which it is
the established policy of the [State Department] to recognize.’”
Id. at 312 (alteration in original) (quoting Hoffman, 324 U.S. at
36)). That focus on State Department policy reflects the reality
that the branches of our government “responsible for the
conduct of the nation’s foreign relations” are best positioned to
assess whether exercising jurisdiction over a foreign
sovereign’s official or agent might frustrate the United States’
foreign relations interests. Heaney v. Gov’t of Spain, 445 F.2d
501, 503 (2d Cir. 1971); accord Verlinden, 461 U.S. at 486.
We glean State Department policy and practice in this area “by
reference to prior State Department decisions,” Verlinden, 461
U.S. at 487, such as suggestions of immunity and statements of
interest in other cases.
2.
The defendants advance a sweeping theory of conduct-
based sovereign immunity for the private agents of foreign
sovereigns. They contend that the principles laid down by the
State Department in past cases afford conduct-based immunity
to any defendant who is alleged to have acted at the behest of a
foreign sovereign. If it were otherwise, say the defendants, a
plaintiff such as Broidy, “having tried and failed to sue Qatar
directly,” could “simply repackage his case by leveling the
15
same accusations of cyberespionage against agents who
allegedly carried out Qatari policy” and try to obtain “sensitive
diplomatic material in discovery” just as if Qatar itself were on
trial. Appellants’ Br. 27.
In support, the defendants cite several suggestions of
immunity the State Department made in lawsuits brought
against former officials of foreign sovereigns, including a
former President of Mexico and two former Israeli defense
officials. See Suggestion of Immunity, Addendum to
Appellees’ Br. (Add.) at 236, Doğan v. Barak, No. 2:15-cv-
8130 (C.D. Cal. June 10, 2016); Suggestion of Immunity, Add.
at 224, Doe v. Zedillo Ponce de Leon, No. 3:11-cv-1433 (D.
Conn. Sept. 7, 2012); Statement of Interest, Add. at 284, Matar
v. Dichter, 500 F. Supp. 2d 284 (S.D.N.Y. 2007) (No. 1:05-cv-
10270). In the defendants’ view, those cases illustrate a general
policy that “exercising jurisdiction over the agent of a foreign
sovereign would ‘intrude on core aspects of the foreign state’s
sovereignty and give rise to serious diplomatic tensions.’”
Appellants’ Br. 23 (quoting Brief for United States as Amicus
Curiae at 25, Add. at 378, Matar v. Dichter, 563 F.3d 9 (2d Cir.
2009) (No. 07-2579)). To them, Broidy’s lawsuit is “a
paradigmatic example of how a claim nominally against an
individual agent can target the alleged acts of a sovereign” such
as Qatar, despite the Ninth Circuit’s recognition of Qatar’s
immunity from Broidy’s suit. Id. at 19-20.
The defendants’ narrower, alternative argument is that an
agent of a foreign sovereign is entitled to immunity insofar as
the agent’s challenged actions were taken at the sovereign’s
specific direction. For that theory, sometimes referred to as
“derivative” immunity, defendants rely principally on Butters
v. Vance International, Inc., 225 F.3d 462 (4th Cir. 2000).
16
Broidy invokes our opinion in Lewis v. Mutond to counter
that, in his view, the appropriate immunity standard for agents
of foreign states is found in section 66(f) of the Restatement
(Second) of Foreign Relations Law. In Lewis, we observed that
conduct-based foreign official immunity under section 66(f)
applies only “if the effect of exercising jurisdiction would be
to enforce a rule of law against the state.” 918 F.3d at 145
(quoting Restatement § 66(f)). Broidy asserts that standard
cannot be met where private contractors such as the defendants
here are sued in their private capacities.
Guided by the State Department’s past practice, we
conclude that the defendants have not demonstrated they would
be granted immunity under any established State Department
policy. Given the lack of precedent supporting immunity for
private parties in circumstances like those of the defendants
here, we again need not resolve the question whether section
66(f) accurately restates the law to hold that the immunity
defense falls short.
At the outset, the defendants’ immunity claim is
unsupported. Recall that the defendants “bear[] the burden of
proving” they qualify for immunity, id., and that we “must
engage in sufficient pretrial factual and legal determinations to
satisfy” ourselves of jurisdiction, Belhas, 515 F.3d at 1281.
When assessing immunity, “the nature of the court’s inquiry
depends on the nature of the defendant’s challenge.” Kilburn,
376 F.3d at 1127.
Here, the defendants choose to rely on the amended
complaint alone. Broidy’s complaint alleges that Qatar hired
the defendants to assist it in rehabilitating the country’s image
and that the defendants ultimately resorted to unlawful means
to accomplish that goal. In particular, it alleges that the
defendants came together as what the complaint dubs the
17
“Qatari Enterprise,” which included Qatari officials among
others. The defendants allegedly worked to advance Qatar’s
interests and objectives, especially by influencing public and
official opinion in the United States to favor Qatar and tarnish
the reputation of Broidy, an influential critic of Qatar. See
Amended Compl. ¶¶ 50, 78-79, 199, J.A. 24, 30-31, 56-57.
Broidy alleges generally that the “[d]efendants targeted
[Broidy] on behalf of Qatar.” Id. ¶ 32, J.A. 21. Broidy’s
complaint does not, however, allege that Qatar hired the
defendants to act as its agents to carry out any sovereign
functions, nor does it specify that Qatar requested, approved,
or even knew of the unlawful conduct at the heart of Broidy’s
claims.
Past expressions of State Department policy do not support
immunity for private individuals in the defendants’
circumstances. The defendants do not contend that Qatar
sought immunity on their behalf. The allegations of the
complaint describe defendants’ link to Qatar as an arms-length,
general agreement to provide public relations services to
burnish Qatar’s reputation, in part by tarnishing that of its vocal
and powerful critic Elliott Broidy.
State Department practice suggests that the State of
Qatar’s apparent silence on this case weighs heavily against
immunity. Indeed, the State Department’s position in
Samantar itself shows that the foreign government’s interest—
or lack thereof—bears “principal[]” weight in the immunity
analysis. See Brief for the United States as Amicus Curiae at
22, Samantar v. Yousuf, 571 U.S. 1156 (2014) (No. 12-1078).
To be sure, in Samantar “there was no recognized government
of Somalia to assert immunity,” id., but the result is the same:
Here, as in Samantar, we have no reason to believe that any
sovereign has indicated an interest the State Department would
seek to protect. The court’s analysis may take into account
18
whether the foreign sovereign on whose behalf the defendants
were acting even requested that the State Department submit a
suggestion of immunity to the court. Cf. Lewis, 918 F.3d at 146
(noting that the Democratic Republic of the Congo sought a
suggestion of immunity, albeit unsuccessfully). It is therefore
notable that Qatar, on whose behalf the defendants purportedly
acted, has not indicated any interest in this case, whether by
requesting a formal suggestion of immunity or otherwise.
Contract terms between certain defendants and Qatar do
not support the defendants’ assertion of immunity. Some of the
defendants acknowledge that a consulting agreement between
Stonington Strategies and Qatar—the only written agreement
between a defendant and Qatar that is available for our
review—expressly disclaims the creation of an agency
relationship. Filed as part of Muzin’s registration as a foreign
agent and proffered as an exhibit in the California litigation
between many of these same parties, that agreement states in
particular that it was “not intended to establish
a[] . . . principal-agent relationship” between Stonington
Strategies and Qatar. Agreement for Consulting Services, Ex.
9 to Plaintiff’s Ex Parte Application for TRO at 100-01, Broidy
Cap. Mgmt., LLC v. State of Qatar, No. 18-cv-02421 (C.D.
Cal. Apr. 2, 2018), ECF 31-9. In a filing before the district
court in this case, Muzin and Stonington Strategies
acknowledged as much, even as they argued they should
nevertheless be held immune. See Muzin & Stonington’s Brief
in Support of Motion to Dismiss at 23 n.11, Broidy Cap.
Mgmt., LLC v. Muzin, No. 19-cv-00150 (D.D.C. May 7,
2019), ECF 40-1 (recognizing that “[t]he [agreement] states
that it does not establish an agency relationship”).
Pressed at oral argument for information showing that the
defendants acted as Qatar’s official agents or followed its
directives, defendants’ counsel said that some of the defendants
19
were registered foreign agents of Qatar under the Foreign
Agents Registration Act (FARA), 22 U.S.C. § 611 et seq., for
at least some of the period relevant to this appeal. But never
has the State Department suggested, nor has this court held, that
registered foreign agents are entitled to their principal’s
sovereign immunity as a matter of law. Indeed, counsel
conceded that registration as a foreign agent under FARA is
“absolutely not” sufficient to establish the sort of agency
relationship necessary to cloak a private-party agent in any
residuum or derivative of the foreign sovereign’s immunity.
Oral Arg. Tr. 15. Simply put, the defendants point to no State
Department policy supporting immunity for private parties
with the kind of loose and limited agency relationship that
Broidy alleges these defendants had with the State of Qatar,
and they offer no independent factual basis for their theory.
Because Broidy’s allegations stop short of describing even the
sort of agency relationship the defendants contend would
immunize them, their claim to immunity fails.
In addition to the weakness of the defendants’ claimed
connection with Qatar, the close connections of the parties and
the claims to the United States counts against immunity.
Broidy directs our attention to multiple cases in which the State
Department found a defendant’s affiliation with the United
States to militate against immunity. In Samantar and Ahmed v.
Magan, for instance, plaintiffs sued former high-ranking
Somali officials for alleged misconduct in office. The officials
had since moved to the United States. In responding to requests
for suggestions of immunity in both cases, the State
Department observed that “U.S. residents . . . who enjoy the
protections of U.S. law ordinarily should be subject to the
jurisdiction of our courts, particularly when sued by U.S.
residents.” Statement of Interest ¶ 9, Add. at 443, Samantar II,
No. 12-2178 (4th Cir. Dec. 20, 2012); see also Statement of
Interest ¶ 9, Add. at 135, Ahmed v. Magan, No. 10-cv-342
20
(S.D. Ohio Mar. 15, 2011). The defendants here are (1) U.S.
residents (and, indeed, citizens) (2) sued by U.S. plaintiffs
(3) under U.S. law (4) for conduct that allegedly took place in
the United States. Amended Compl. ¶ 11-19, 22, 26-29, J.A.
16-20. The defendants are correct that the State Department
has not necessarily treated those factors as individually
dispositive, see Brief for the United States as Amicus Curiae at
5-6, 22-23, Samantar v. Yousuf, 571 U.S. 1156 (2014) (No. 12-
1078), but it is clear that together they weigh heavily against
claims of conduct-based immunity.
At bottom, the defendants argue that because Broidy
alleges they acted on behalf of Qatar, they must be immune
from suit. But the defendants have not identified any
established State Department policy of extending foreign
official immunity to defendants in circumstances like theirs.
The defendants alternatively contend they are immune
under a distinct doctrine that they call “derivative” immunity.
They describe that doctrine as covering any action “specifically
ordered” by a foreign sovereign. Appellants’ Br. 28. In
support of that defense, the defendants rely almost exclusively
on Butters v. Vance International, Inc., 225 F.3d at 465. There,
the Fourth Circuit affirmed a district court’s decision to extend
“derivative FSIA immunity” to a private U.S. contractor
providing security to members of the Saudi royal family in the
United States. Id. A security guard of the contractor sued it
for sex discrimination in violation of U.S. law after the
contractor, acting at the direction of a Saudi Arabian general
not to place a woman in the position in question, withdrew its
recommendation that she be promoted within the royal security
detail. In dismissing the claim on foreign official immunity
grounds, the court reasoned by analogy to sovereign immunity
in the domestic context: “Imposing liability on private agents
of the government would directly impede the significant
21
governmental interest in the completion of its work.” Id. at
466. In that court’s view, “[a]ll sovereigns need flexibility to
hire private agents to aid them in conducting their
governmental functions,” including foreign sovereigns
“operating within the United States.” Id. Any other rule, the
court suggested, “would discourage American companies from
entering lawful agreements with foreign governments.” Id.The Butters court thus saw it as “but a small step” to extend the
doctrine of domestic derivative sovereign immunity to the
agents of foreign nations operating in the United States. Id.The defendants argue that the same is true here.
Butters is out-of-circuit precedent and not binding on us,
and this court has never suggested a derivative immunity
doctrine might apply in the foreign immunity context.
Moreover, Butters predates Samantar and by its own terms
applies the FSIA itself to a private actor’s claim of immunity.
Id. at 465, 467 (construing “FSIA immunity”). The Supreme
Court foreclosed that approach in Samantar. Such claims of
immunity must rise or fall not under the FSIA, but the residual
law and practice that the FSIA did not displace. See Samantar
I, 560 U.S. at 316, 319, 324-25 (holding the FSIA applies only
to states and their “agenc[ies] or instrumentalit[ies],” excluding
private entities or individuals). The district court’s thoughtful
opinion also identified reasons the State Department might
hesitate to recognize derivative immunity for agents or officials
of presumptively immune foreign sovereign states. Broidy
Cap. Mgmt., 2020 WL 1536350, at *7 (“[T]he United States
does not necessarily share an interest with the agents of a
foreign sovereign, and those interests will routinely diverge, as
they do in this case.”).
Although we are inclined to agree with the district court,
the defendants do not even meet the standard the Fourth Circuit
embraced in Butters. We thus need not decide whether
22
derivative immunity might apply were a sovereign specifically
to order a private party to take action on its behalf as sovereign
in violation of U.S. law. As the defendants acknowledge,
where it applies in the domestic context, derivative immunity
reaches only conduct “specifically ordered,” Appellants’ Br.
28, or “authorized and directed by the Government,” In re
OPM Data Sec. Breach Litig., 928 F.3d 42, 69 (D.C. Cir. 2019)
(per curiam) (citation omitted); see Butters, 225 F.3d at 466.
The defendants characterize Broidy’s complaint as alleging
that they “disseminated [Broidy’s] hacked materials at Qatar’s
direction.” Appellants’ Br. 6; accord id. at 33. But the
complaint lacks any such allegation. Instead, as noted
previously, Broidy alleges that the defendants were part of a
group he calls the “Qatari Enterprise,” which also included
third parties such as Qatari officials, and that the Enterprise
collectively executed a scheme of influence and intrigue aimed
at discrediting Broidy. See, e.g., Amended Compl. ¶¶ 50, 78-
79, 199, J.A. 24, 30-31, 56-57. The closest Broidy comes to
alleging that Qatar itself directed the defendants’ misconduct is
in his allegations about compensation: He says that the
defendants “were paid millions of dollars by Qatar, its agents,
and its instrumentalities to participate in the conspiracy to
disseminate hacked materials and join the Qatari Enterprise,”
id. ¶ 7, J.A. 15, and that the defendants received sizeable
payments from Qatar soon after the alleged hack. Broidy
alleges those facts imply “that [the defendants] were aware of
the Qatari Enterprise’s efforts to attack [Broidy] and that these
payments were compensation to the defendants for their role in
the conspiracy and unlawful scheme.” Id. ¶ 170, J.A. 50.
But the complaint simply does not allege Qatar
“specifically ordered” the defendants to participate in a scheme
to hack and distribute Broidy’s private emails, as the
defendants themselves concede is necessary to support their
theory of derivative immunity. Appellants’ Br. 28. That gap
23
in Broidy’s allegations contrasts with Butters, where the issue
was decided at the summary judgment stage based on the
absence of a material factual dispute that the defendant
contractor acted “under the direct military orders of” a Saudi
official to take action contrary to U.S. antidiscrimination law.
225 F.3d at 465-67. We have held in the domestic context that
a contractor might avail itself of the government’s derivative
immunity only where it acts pursuant to specific directions
from the government. In re OPM Data Sec. Breach, 928 F.3d
at 70; see also Cabalce v. Thomas E. Blanchard & Assocs.,
Inc., 797 F.3d 720, 732 (9th Cir. 2015) (noting that derivative
immunity does not apply to contractors exercising discretion in
working to accomplish broad governmental objectives). We
do not suggest that we would apply a derivative immunity
theory in the foreign official immunity context. But the
allegations here could not support that defense in any event.
Finally, Broidy relies on Lewis v. Mutond to argue that,
under section 66(f) of the Second Restatement, an “agent” of a
foreign state is entitled to immunity only “if the effect of
exercising jurisdiction would be to enforce a rule of law against
the state,” 918 F.3d at 145 (quoting Restatement § 66(f)), a
standard he says is not met where private contractors like the
defendants here are sued in their private capacities. The district
court held in the alternative that defendants lack immunity
because permitting this litigation to proceed would not have the
effect of “enforc[ing] a rule of law against” Qatar. Broidy Cap.
Mgmt., 2020 WL 1536350, at *8 (citation omitted). According
to the defendants, that analysis is “overly restrictive” and
categorically eliminates immunity for foreign officials sued in
their personal capacities. Appellants’ Br. 49.
It is unclear whether the Restatement articulates the
correct standard. Neither the Supreme Court nor this court has
ever endorsed it. See Samantar I, 560 U.S. at 321 & n.15. In
24
Lewis, we emphasized that both parties had assumed the
Restatement’s test controlled, and that their assumptions were
central to our analysis. See 918 F.3d at 146-47; id. at 148
(Srinivasan, J., concurring); id at 150 (Randolph, J., concurring
in the judgment). The State Department, too, has registered its
skepticism regarding the Restatement’s test. See Brief for the
United States as Amicus Curiae at 14-15, Mutond v. Lewis,
141 S. Ct. 156 (2020) (No. 19-185).
If the Restatement furnished a relevant standard, however,
our application of section 66(f) at the parties’ behest in Lewis
illustrates why the immunity claim of the defendants here
would likewise be foreclosed. There, we concluded that any
costs to the sovereign resulting from sitting officials being
forced to “defend their handling of high-profile domestic
security matters in U.S. courts” were “collateral effects . . . too
attenuated to be equated with the direct fiscal impacts on the
foreign state that are contemplated by the Restatement.” 918
F.3d at 147 (citation omitted). The same is surely true here,
where the defendants are private contractors rather than
officials of a foreign sovereign. The indirect risk to Qatar that,
by pursuing his claims against the defendants on remand,
Broidy will seek to “gain access to Qatar’s sensitive,
diplomatic communications,” Appellants’ Reply 1, does not
suffice. In any event, we trust the district court has the
appropriate tools to protect Qatar’s absolute FSIA “immunity
from trial and the attendant burdens of litigation,” Kilburn, 376
F.3d at 1126 (citation omitted).
* * *
The defendants have not shown “all the requisites
for . . . immunity [to] exist[].” Samantar I, 560 U.S. at 311(quoting Ex parte Peru, 318 U.S. at 587). Accordingly, we
affirm.
25
CONCLUSION
The judgment of the district court is affirmed and the
matter remanded for further proceedings consistent with this
opinion.
So ordered.