Uni-Top Asia Investment Limited v. Sinopec International Petroleum Exploration and Production Corporation

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
UNI-TOP ASIA INVESTMENT LTD.,
Petitioner,
v.
No. 20-cv-1770 (DLF)
SINOPEC INTERNATIONAL
PETROLEUM EXPLORATION AND
PRODUCTION CORP.,
Respondent.
MEMORANDUM OPINION
In this case, Uni-Top Asia Investment Ltd. (Uni-Top) seeks to confirm a foreign arbitral
award that it obtained against Sinopec International Petroleum Exploration and Production Corp.
(SIPC). See Pet’r’s Pet. to Confirm Arbitral Award ¶¶ 1–2, Dkt. 1. SIPC has moved to dismiss
for lack of jurisdiction, improper venue, and the failure to state a claim. See Resp’t’s Mot. to
Dismiss, Dkt. 26. Uni-Top, in turn, has moved for jurisdictional discovery. See Pet’r’s Mot. for
Jurisdictional Discovery, Dkt. 30. In a previous opinion, this Court denied jurisdictional
discovery with respect to the theory that SIPC is “political subdivision” of the People’s Republic
of China (PRC). Mem. Op. of Jan. 26, 2022 at 10, Dkt. 34. It also ordered supplementary
briefing on whether venue would be proper in this District under Uni-Top’s remaining theories
of personal jurisdiction, which all require classifying SIPC as an “agency or instrumentality” of
the PRC. Id. For the reasons that follow, the Court will hold that venue would be improper if
SIPC were an “agency or instrumentality” of the PRC. Accordingly, it will grant SIPC’s motion
to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(3) and deny Uni-Top’s motion for
jurisdictional discovery as moot.
I. BACKGROUND
Uni-Top is an oil and gas company that is organized under the laws of the British Virgin
Islands. See Pet. to Confirm ¶ 3; Pet’r’s Mem. in Supp. of Pet. to Confirm at 6, Dkt. 1-1. SIPC
is an oil and gas company that is organized under the laws of the People’s Republic of China
(PRC). See Pet. to Confirm ¶ 4; Resp’t’s Mem. in Supp. of Mot. to Dismiss at 2–4, Dkt. 26-1
(citations omitted). As relevant here, the parties dispute whether Uni-Top is entitled to a
commission under the terms of their Agency Agreement. See Mem. Op. at 1–2. That Agreement
requires the parties to resolve their disputes through arbitration pursuant to Chinese law and
before the China International Economic and Trade Arbitration Commission (CIETAC). See id.
at 2. Although one CIETAC tribunal found that Uni-Top was entitled to the commission, the
Beijing Fourth Intermediate People’s Court (Beijing Court) annulled the tribunal’s decision. See
id.
Uni-Top filed this action to confirm the CIETAC tribunal’s decision. See Pet. to Confirm
¶¶ 11–12. In doing so, Uni-Top relies on the Convention on the Recognition and Enforcement of
Foreign Arbitral Awards (New York Convention), a “multilateral treaty that addresses
international arbitration,” GE Energy Power Conversion France SAS, Corp. v. Outokumpu
Stainless USA, LLC, 140 S. Ct. 1637, 1644 (2020). See Pet. to Confirm ¶¶ 1, 12. It also relies on
that treaty’s implementing legislation, which “grants federal courts jurisdiction over actions
governed by the Convention” and “establishes venue for such actions,” Outokumpu, 140 S. Ct. at
1644 (citation omitted). See Pet. to Confirm ¶¶ 5, 6. That legislation grants federal district
courts original jurisdiction over all actions “falling under the Convention.” 9 U.S.C. § 203. It
also provides that those actions “may be brought” either in any district “designated in [an
2
arbitration] agreement” or in any court where an action “between the parties could be brought”
“save for the arbitration agreement.” Id. § 204.
Uni-Top argues that this Court has personal jurisdiction over SIPC pursuant to 28 U.S.C.
§ 1330(a)–(b), which confers personal jurisdiction in certain actions 1 against “foreign state[s],”
as that term is “defined in [28 U.S.C. §] 1603(a).” Pet. to Confirm ¶ 6. Section 1603(a), in turn,
defines “foreign state[s]” to include both “political subdivision[s]” of those states and
“agenc[ies] or instrumentalit[ies]” of the same. 28 U.S.C. § 1603(a). To invoke those provisions
in this case, Uni-Top relies on SIPC’s structure. SIPC represents that it is jointly owned by three
entities: China Chengtong Kechuang Investment Co., Ltd (CCKI), China Reform Yuanbo
Investment Co., Ltd (CRYI), and Sinopec Group. See Resp’t’s Mem. at 2–3 (citations omitted).
It further represents that none of those entities is a majority shareholder, but that each of them is
owned by the State Council of the PRC. 2 See id. Uni-Top argues that this structure, combined
with additional information about the companies’ relationship, suffices to classify SIPC as either
a political subdivision or an agency or instrumentality of the PRC.
Uni-Top also relies on SIPC’s structure to establish venue. In the petition to confirm its
arbitration award, Uni-Top invoked 9 U.S.C. § 204, which provides that actions under the New
York Convention may be brought in any court where the parties could have proceeded “save for
[their] arbitration agreement.” Id. § 204. It further invoked 28 U.S.C. § 1391(f)(4), which
1
Section 1330 applies to “nonjury civil action[s] against a foreign state . . . [in] which the
foreign state is not entitled to immunity either under [the Foreign Sovereign Immunities Act
(FSIA)] or under any applicable international agreement.” 28 U.S.C. § 1330(a). This action falls
into that category, as the FSIA does not confer immunity against suits to confirm foreign arbitral
awards. See id. § 1605(a)(6)(B).
2
As SIPC explains, CCKI is a “wholly owned subsidiary of China Chengtong Holdings Group
Co. Ltd.” Resp’t’s Mot. to Dismiss at 3. CRYI is a “wholly owned subsidiary of China Reform
Holdings Co. Ltd.” Id. And “Chengtong Holdings Group Co. Ltd., China Reform Holdings Co.
Ltd., and Sinopec Group are wholly owned by the State Council.” Id.
3
allows civil actions to be brought in this District if they are “brought against a foreign state or
political subdivision thereof,” as those terms are used in “section 1603(a).” See Pet. to Confirm
¶ 8. Uni-Top argued that the combination of those provisions allows its action to proceed here.
SIPC timely moved to dismiss the case on three grounds: first, that this Court lacks
personal jurisdiction because SIPC is not a “foreign state;” second, that venue is improper under
9 U.S.C. § 1391(f)(4); and third, that Uni-Top has failed to state a claim for which relief can be
granted. See generally Resp’t’s Mot. to Dismiss. Determining whether SIPC is a foreign state
turns on disputed questions of fact. Accordingly, Uni-Top moved to stay all proceedings on
SIPC’s motion to dismiss pending the resolution of its motion for jurisdictional discovery. See
Pet’r’s Mot. to Stay Proceedings, Dkt. 28. The Court granted Uni-Top’s motion for a stay, see
Minute Order of April 13, 2021, which SIPC did not oppose, see Pet’r’s Mot. to Stay
Proceedings at 2. Because of that stay, Uni-Top postponed filing a response to SIPC’s motion to
dismiss.
In its motion for jurisdictional discovery, Uni-Top offers four theories for how SIPC
could qualify as either a “political subdivision” or an “agency or instrumentality” of the PRC. 28
U.S.C. § 1330, 1603(a). First, it argues that the SIPC is a “political subdivision” because it is an
“alter ego” of one of its shareholders and because its shareholders are “political subdivision[s]”
of the PRC. Pet’r’s Mem. in Supp. of Mot. for Jurisdictional Discovery at 21, Dkt. 30-1.
Second, it argues that SIPC is an “agency or instrumentality” because “it is majority-owned by
[the PRC] or its political subdivision[s].” Id. at 9 (citing 28 U.S.C § 1603(b)(2)). Third, it
argues that SIPC is an “agency or instrumentality” because it is an “organ” of either the PRC or
its political subdivisions. Id. at 14 (quoting 28 U.S.C. § 1603(b)(2)). Finally, it argues that the
4
SIPC is an “agency or instrumentality” because it is an “alter ego” of one of its shareholders and
because that shareholder is also an agency or instrumentality of the PRC. Id. at 21.
In a previous opinion, this Court denied jurisdictional discovery with respect to the theory
that SIPC is an alter ego of a “political subdivision” of the PRC See Mem. Op. at 6–8. The
Court reasoned that Uni-Top had not “establish[ed] a good faith belief that SIPC is an alter ego
of one of its shareholders.” Id. at 6 (citing Caribbean Broad. Sys., Ltd. v. Cable & Wireless
P.L.C., 148 F.3d 1080, 1090 (D.C. Cir. 1998)). It further reasoned that Uni-Top had failed to
“establish a good faith belief that one or more of SIPC’s shareholders is a ‘political subdivision’
of the PRC. Id. at 7 (quoting 28 U.S.C. § 1603(a)). Finally, it found that Uni-Top made no
“‘detailed showing of what discovery it wishe[d] to conduct’ in support of its theory.” Id. at 8
(quoting NBC-USA Hous., Inc., Twenty-Six v. Donovan, 774 F. Supp. 2d 277, 295 (D.D.C.
2011)). As a result of that holding, Uni-Top may establish personal jurisdiction over SIPC only
if it shows that the company is an “agency or instrumentality” of the PRC, 28 U.S.C. § 1603(a).
In that same opinion, this Court ordered supplemental briefing on whether venue would
be proper if Uni-Top were an “agency or instrumentality.” See Mem. Op. at 8–10. As discussed
above, Uni-Top’s initial theory of venue relied on 28 U.S.C. § 1391(f)(4), which allows civil
actions to proceed in this District if they are “brought against a foreign state or political
subdivision thereof.” See supra. The Court interpreted that language to exclude actions brought
against an “agency or instrumentality” of a foreign state. See Mem. Op. at 8–9; see also OGI
Grp. Corp. v. Oil Projects Co. of Ministry of Oil, No. 19-cv-2619 (APM), 2020 WL 6342886, at
*8–10 (D.D.C. Oct. 29, 2020) (reaching the same conclusion). The Court also noted that Uni-
Top had “not identified another provision that allows litigation in this District.” Mem. Op. at 9.
Accordingly, the Court directed Uni-Top to file a supplemental brief on whether this action
5
should be dismissed for improper venue. See id. at 10. The Court also allowed SIPC to file a
response. See id.
In its supplemental brief, Uni-Top offers three additional theories of venue. See Pet’r’s
Suppl. Br. at 8–12, Dkt. 35. First, it invokes 28 U.S.C. § 1391(f)(3), which provides for venue
“in any judicial district in which the agency or instrumentality is . . . doing business.” See Pet’r’s
Suppl. Br. at 8–10. Second, it invokes 28 U.S.C. § 1391(c)(3), which provides that a “defendant
not resident in the United States may be sued in any judicial district.” See Pet’r’s Suppl. Br. at
11. Finally, it invokes 28 U.S.C. § 1391(b)(3), which provides for venue in any district “in
which any defendant is subject to the court’s personal jurisdiction” if there is no district in which
an action may otherwise be brought as provided in this section.” See Pet’r’s Suppl. Br. at 11–12.
Uni-Top further requests leave, “if necessary,” to conduct “venue-related discovery specifically
tailored to whether SIPC conducts business within this District.” Id. at 15.
On account of the parties’ supplemental briefing, SIPC’s motion to dismiss for improper
venue is now ripe for review. See Resp’t’s Mem. at 20–25; Pet’r’s Suppl. Br. at 8–15; Resp’t’s
Suppl. Br. at 5–14, Dkt. 36.
II. LEGAL STANDARD
Federal Rule of Civil Procedure 12(b)(3) “instructs the court to dismiss or transfer a case
if venue is improper” in a plaintiff or petitioner’s chosen forum. Sanchez ex rel. Rivera-Sanchez
v. United States, 600 F. Supp. 2d 19, 21 (D.D.C. 2009). The Court accepts the petitioner’ well-
pleaded allegations regarding venue as true and draws reasonable inferences from those
allegations in its favor. See Abraham v. Burwell, 110 F. Supp. 3d 25, 28 (D.D.C. 2015). “The
court need not, however, accept the [petitioner]’s legal conclusions as true, and may consider
material outside of the pleadings.” Id. (citations omitted). Because venue is an affirmative
6
defense, the petitioner is not required to address venue in its pleadings. See SEC v. Ernst &
Young, 775 F. Supp. 411, 412 (D.D.C. 1991). However, where a defendant or respondent has
timely objected to venue, “the burden is on the [petitioner] to establish that the district [it] chose
is a proper venue.” Williams v. GEICO Corp., 792 F. Supp. 2d 58, 62 (D.D.C. 2011) (citation
omitted); see also Sanchez-Mercedes v. Bureau of Prisons, 2020 WL 1821131, at *4 (D.D.C.
Apr. 10, 2020).
Where the propriety of venue turns on disputed questions of fact, courts may order
corresponding discovery. See Oppenheimer Fund, Inc. v. Sanders, 437 U.S. 340, 351 (1978).
Motions for venue discovery are subject to the same legal standards that apply to motions for
jurisdictional discovery. See Delta Sigma Theta Sorority, Inc. v. Bivins, 215 F. Supp. 3d 12, 15–
16 (D.D.C. 2013). To obtain venue discovery, the petitioner must therefore “have at least a good
faith belief that such discovery will enable it to show [that venue is proper in this District].”
Caribbean Broad. Sys., Ltd. v. Cable & Wireless P.L.C., 148 F.3d 1080, 1090 (D.C. Cir. 1998).
The petitioner must also make a “detailed showing of what discovery it wishes to conduct or
what results it thinks such discovery would produce.” NBC-USA Hous., Inc., Twenty-Six v.
Donovan, 774 F. Supp. 2d 277, 295 (D.D.C. 2011) (quoting Atlantigas Corp. v. Nisource, Inc.,
290 F. Supp. 2d 34, 53 (D.D.C. 2003)).
III. ANALYSIS
This Court has previously held that Uni-Top cannot establish personal jurisdiction over
SIPC on the theory that the latter is a “political subdivision” of the PRC, 28 U.S.C. § 1603(a).
See Mem. Op. at 6–8. To establish personal jurisdiction in this case, it must accordingly show
that SIPC qualifies as an “agency or instrumentality” of the same. See 28 U.S.C. §§ 1330(a)–(b),
1603(a). For the following reasons, the Court will hold that venue would be improper in this
7
District if SIPC qualified as an “agency or instrumentality.” Accordingly, the Court will dismiss
this action for improper venue pursuant to Federal Rule of Civil Procedure 12(b)(3).
A. Uni-Top Has Failed to Show That SIPC Does Business in This District, as
Necessary for Venue Under 28 U.S.C. § 1391(f)(3)
Section 1391(f)(3) provides that venue for an action “brought against an agency or
instrumentality of a foreign state” is proper “in any judicial district in which the agency or
instrumentality is licensed to do business or is doing business.” 28 U.S.C. § 1391(f)(3). For this
purpose, an entity does business in a district if it “engag[es] in transactions there to such an
extent and of such a nature” that it could be required to “comply with [the local] licensing
scheme.” Eli Lilly & Co. v. Home Ins. Co., 794 F.2d 710, 721–22 (D.C. Cir. 1986) (citations
omitted). In this case, the Court has identified no well-pleaded allegations regarding whether
SIPC does business in this District. See generally Pet. to Confirm. Accordingly, Uni-Top bears
the burden of establishing venue under § 1391(f)(3) based on its supplemental brief,
accompanying declaration, and supporting exhibits. See Abraham, 110 F. Supp. 3d at 28 (noting
that courts may review “material outside of the pleadings” in assessing venue).
In its supplemental brief, Uni-Top argues that SIPC does business in this District “either
directly or through Sinopec Group, Sinopec America, Sinopec D.C. LLP, or other agents or
lobbyists that represent and do business on behalf of SIPC and its affiliates and subsidiaries.”
See Pet’r’s Suppl. Br. at 8. But Uni-Top does not provide any evidence that SIPC does business
here directly, see id. at 8–10, so it cannot establish venue on that ground. Moreover, although
Uni-Top presents some evidence that Sinopec Group and its affiliates conduct business in this
District, see, e.g., Pet’r’s Suppl. Br. Ex. F, Dkt. 35-8 (noting the registration of a lobbyist in the
8
District on behalf of “Sinopec Group through Sinopec D.C.”), it has not established a sufficient
connection between those entities and SIPC.
The Court begins with the plain text of § 1391(f)(3), which asks whether “the [defendant
or respondent] agency or instrumentality . . . is doing business” in a particular district. 28 U.S.C.
§ 1391(f)(3). That language is most naturally read to require a showing that SIPC itself does
business in this District, not that one of its parent companies or affiliates does so. See id. This
interpretation is consistent with the general practice of treating foreign juridical entities as
“distinct and independent.” First Nat. City Bank v. Banco Para El Comercio Exterior de Cuba
(Bancec), 462 U.S. 611, 626–27 (1983). It is also consistent with the structure of § 1391(f),
which distinguishes suits brought against “an agency or instrumentality,” 28 U.S.C. § 1391(f)(3),
from those brought against other juridical entities—namely, “a foreign state or political
subdivision thereof,” id. § 1391(f)(4). See OGI Grp., 2020 WL 6342886, at *10 (explaining this
structural distinction). Thus, because Uni-Top has not provided any evidence that SIPC itself “is
doing business” in this District, it has not shown that venue is proper under § 1391(f)(3).
Uni-Top has two remaining arguments through which it attempts to establish venue under
§ 1391(f)(3). First, it argues that the conduct of Sinopec Group is “attributable to SIPC” on the
ground that the former is the latter’s agent. Pet’r’s Suppl. Br. at 9; see id. (“[I]n assessing
personal jurisdiction under either a constitutional due process standard or a statutory standard,
courts may look to the contacts between the forum and agents of the defendant.” (quoting Mar.
Int’l Nominees Establishment v. Republic of Guinea, 693 F.2d 1094, 1105 (D.C. Cir. 1982))).
And second, consistent with its previous submissions, Uni-Top seeks to attribute Sinopec
Group’s conduct to SIPC on the ground that the latter is the former’s alter ego. Neither argument
succeeds.
9
To begin, even assuming that § 1391(f)(3) incorporates some principles of agency law,
Uni-Top has failed to establish the required “contacts between the forum and agents of the
defendant,” Mar. Int’l, 693 F.2d 1105. Because certain actions of an agent may be attributed to
its principal, see Level the Playing Field v. FEC, 961 F.3d 462, 467 (D.C. Cir. 2020), a principal
could be said to “do[] business” in a district by directing its agent to “do[] business” there, 28
U.S.C. § 1391(f)(3). As relevant to that inquiry, Uni-Top has shown that Sinopec Group
conducts some business in this District. See Pet’r’s Suppl. Br. at 8–10. It has also provided
some evidence that this business benefits its subsidiaries, and it is plausible to think that SIPC
receives some of those benefits. See id. at 9–10. But an agency relationship requires more than
a mere benefit; it also requires that a principal have “the right to control the conduct of the agent
with respect to matters entrusted to [it.]” Transamerica Leasing, Inc. v. La Republica de
Venezuela, 200 F.3d 843, 849 (D.C. Cir. 2000) (citation omitted). And here, the record contains
no evidence that SIPC exercises control over its parent company. Uni-Top in fact took the
opposite position in its motion for jurisdictional discovery, which argued that Sinopec Group
exercises substantial control over SIPC. See Pet’r’s Mem. in Supp. of Jurisdictional Discovery at
22–23. Further, the possibility that SIPC is an agent of Sinopec Group provides no support for
attributing the latter’s conduct to the former. Although the actions of an agent may be attributed
to its principal, see Level the Playing Field, 961 F.3d at 467, the actions of a principal are not
ordinarily attributable to its agent, see Alkanani v. Aegis Def. Servs., LLC, 976 F. Supp. 2d 1, 12
(D.D.C. 2013) (citations omitted). Uni-Top’s argument from agency law accordingly fails.
Uni-Top has further failed to show that SIPC is an alter ego of Sinopec Group. As the
Court explained in its previous opinion, “[c]lassifying SIPC as an alter ego is an uphill battle.”
Mem. Op. at 5. The Supreme Court has held that “juridical entities distinct and independent
10
from their sovereign should normally be treated as such.” Bancec, 462 U.S. at 627. It has also
emphasized, in a similar context, that “piercing the corporate veil . . . is the rare exception,
applied in the case of fraud or certain other exceptional circumstances.” Dole Food Co. v.
Patrickson, 538 U.S. 468, 475 (2003) (citation omitted). For the reasons explained in its prior
opinion, this Court held that “Uni-Top has failed to establish a good faith belief that SIPC is an
alter ego of one of its shareholders,” a category that includes Sinopec Group. Mem. Op. at 6.
And because Uni-Top’s supplemental filing contains no new evidence to support alter ego status,
the Court has no cause to reconsider its holding.
For the above reasons, Uni-Top has not shown that SIPC does business in the District, as
necessary to establish venue under § 1391(f)(3). Nor has it shown a “good faith belief” that
venue discovery would allow it to make that showing. Caribbean Broad. Sys., 148 F.3d at 1090;
see Delta Sigma Theta Sorority, 215 F. Supp. 3d at 15–16. As discussed above, Uni-Top has
presented no evidence that SIPC is itself doing business in this District, as necessary under
§ 1391(f)(3). And although the bar for a “good faith belief” is not high, it requires more than a
reference to information and belief in an opposition brief, see Pet’r’s Suppl. Br. at 8, and
unrelated evidence about other entities’ conduct. Accordingly, to the degree that Uni-Top’s
supplemental briefing can be construed as a motion for venue discovery, that motion is denied.
B. Venue Is Improper Under 28 U.S.C. § 1391(b)(3), (c)(3) Because Those
Provisions Do Not Apply to Suits Against Foreign States
Uni-Top next attempts to establish venue under 28 U.S.C. § 1391(b)(3) and § 1391(c)(3).
Section 1391(b)(3) provides that a “civil action may be brought in . . . any judicial district in
which any defendant is subject to the court’s personal jurisdiction” “if there is no district in
which an action may otherwise be brought as provided in [§ 1391(b)(1)–(2)].” Id. § 1391(b)(3).
11
Section 1391(c)(3), in turn, provides “a defendant not resident in the United States may be sued
in any judicial district.” Id. § 1391(c)(3). Because neither of those provisions applies in actions
“against a foreign state,” id. § 1391(f), they do provide for venue in this case.
The Court begins with the text and structure of § 1391. Section 1391(b) provides that a
general “civil action may be brought in” three kinds of districts: those identified by the
defendants’ residence, see id. § 1391(b)(1); those identified by the location of the events,
omissions, or property at issue, see id. § 1391(b)(2); and those in which any defendant “is subject
to the court’s personal jurisdiction,” id. § 1391(b)(3). It further provides that venue is proper
under the third category only where there is “no federal district anywhere in the United States”
that satisfies § 1391(b)(1), (b)(2). Wright & Miller, Federal Practice & Procedure § 3806.1 (4th
ed. 2021) (emphasis omitted). From there, § 1391(c) governs the determination of residence
“[f]or all venue purposes,” 28 U.S.C. § 1391(c), and § 1391(d) governs the residence of
corporations that are subject to personal jurisdiction in states with multiple districts, see id.
§ 1391(d). The remainder of § 1391 provides specific rules for narrow classes of civil actions.
Section 1391(e) governs actions where the defendant is an officer or employee of the United
States. See id. § 1391(e). Section 1391(f) governs suits “against [] foreign state[s].” Id.
§ 1391(f). Finally, § 1391(g) governs actions that arise from the narrow class of accidents
described in 28 U.S.C. § 1369. 3 See id. § 1391(g).
Section 1391(f) provides in full that “[a] civil action against a foreign state as defined in
section 1603(a) of this title may be brought:
3
That provision concerns actions “involving minimal diversity between adverse parties that
arises from a single accident, where at least 75 natural persons have died in the accident at a
discrete location.” 28 U.S.C. § 1369(a).
12
(1) in any judicial district in which a substantial part of the events or omissions
giving rise to the claim occurred, or a substantial part of property that is the
subject of the action is situated;
(2) in any judicial district in which the vessel or cargo of a foreign state is
situated, if the claim is asserted under section 1605(b) of this title;
(3) in any judicial district in which the agency or instrumentality is licensed to do
business or is doing business, if the action is brought against an agency or
instrumentality of a foreign state as defined in section 1603(b) of this title; or
(4) in the United States District Court for the District of Columbia if the action is
brought against a foreign state or political subdivision thereof.
Id. § 1391(f).
The text and structure of § 1391 make clear that venue for suits against foreign states is
governed by § 1391(f), to the exclusion of § 1391(b) and § 1391(c). “[I]t is a commonplace of
statutory construction that the specific governs the general.” RadLAX Gateway Hotel, LLC v.
Amalgamated Bank, 566 U.S. 639, 645 (2012) (citation omitted). That canon applies not only
where a specific provision contradicts a general one, but also where “a general authorization and
a more limited, specific authorization exist side-by-side.” Id. As described above, Congress has
authorized venue for all civil suits in § 1391(b) and specifically authorized venue for suits
against foreign states in § 1391(f). That structure suggests that “terms of the specific
authorization must be complied with.” RadLAX, 566 U.S. at 645. Moreover, a contrary
conclusion would render part of § 1391(f) superfluous. Both § 1391(b)(2) and § 1391(f)(1)
provide that venue is proper in any “judicial district in which a substantial part of the events or
omissions giving rise to the claim occurred, or a substantial part of property that is the subject of
the action is situated.” 28 U.S.C. §§ 1391(b)(2), (f)(1). If the general provisions of § 1391(b)
applied to suits against foreign states, § 1391(f)(1) would be entirely redundant. The Court will
not construe § 1391 to create unnecessary surplusage. See D. Ginsberg & Sons, Inc. v. Popkin,
285 U.S. 204, 208 (1932).
13
Other federal courts have consistently treated § 1391(f) as the exclusive basis for venue
in suits against foreign sovereigns. The Second Circuit has explained that, when the defendant in
an action to enforce a foreign arbitral award is a foreign state, “the FSIA’s procedural mandates
control, including the requirement[] that . . . venue be proper under 28 U.S.C. § 1391(f).” Mobil
Cerro Negro, Ltd. v. Bolivarian Republic of Venezuela, 863 F.3d 96, 124 (2d Cir. 2017). 4 The
Fourth Circuit has said the same in dicta, see Berg v. Kingdom of Netherlands, 24 F.4th 987, 996
(4th Cir. 2022), and at least one other district court reached the same conclusion in a reasoned
opinion, see Rodriguez v. Pan Am. Health Org., 2020 WL 1666757, at *9 (S.D. Fla. 2020). The
conclusion also tracks the Supreme Court’s holding that the FSIA “provides the sole basis for
obtaining jurisdiction over a foreign state in federal court.” Argentine Republic v. Amerada Hess
Shipping Corp., 488 U.S. 428, 439 (1989). On the other side of things, Uni-Top has not
identified any case in which a federal court has applied § 1391(b) or § 1391(c) in a suit against a
foreign state. Indeed, the only cases it submits in this context concern suits against foreign
individuals or corporations, not foreign states. See Tower Lab’ys, Ltd. v. Lush Cosms. Ltd., 285
F. Supp. 3d 321, 325 (D.D.C. 2018); SEC v. Nielson, 2020 WL 9439395, at *12 (D.D.C. Feb. 13,
2020).
Uni-Top’s only textual argument also fails to persuade. Uni-Top emphasizes that
§ 1391(f) uses the permissive word “may” to identify where suits against foreign states “may be
brought.” See Pet’r’s Suppl. Br. at 10–11 (quoting 28 U.S.C. § 1391(f)). From that observation,
it argues that “a party may bring an action against a foreign state in any of the venues set forth in
4
Mobil Cerro concerned an action under the International Convention on the Settlement of
Investment Disputes between States and Nationals of Other States, see Mobil Cerro, 863 F.3d at
99, not the New York Convention. The distinction is relevant only insofar as the New York
Convention separately authorizes venue in any district “designated in [a covered arbitration]
agreement.” 9 U.S.C. § 204.
14
Section 1391(f) or in any other venue that federal law allows under Section 1391.” Id. But
although “may” is a permissive term, see Bennett v. Panama Canal Co., 475 F.2d 1280, 1282
(D.C. Cir. 1973), it does not grant the degree of permission that Uni-Top suggests. The word
“may” in § 1391(f) makes clear that plaintiffs can proceed under any one of the statute’s four
subsections. For example, a plaintiff “may” bring suit against a foreign state where the disputed
property is located, id. § 1391(f)(1), or he “may” bring suit in this District, id. § 1391(f)(4).
Because that reading of “may” gives effect to its permissive character, there is no reason to adopt
Uni-Top’s more expansive reading of its scope, which would create the surplusage described
above.
Uni-Top’s argument that the above approach creates a “venue gap” likewise falls short.
Pet’r’s Suppl. Br. at 11 n.15. Uni-Top contends that the approach prevents federal courts from
resolving certain suits under the New York Convention, for which Congress has specifically
created subject matter jurisdiction. See id. (citing 9 U.S.C. § 203). But it is unclear whether this
suit falls in that category. This Court has had no occasion to decide whether venue is appropriate
in another district, which turns on whether SIPC does business elsewhere in the United States.
See supra. Moreover, the only actions that fall within the venue gap are those against an agency
or instrumentality of a foreign state, see 28 U.S.C. § 1391(f)(4), that does no business in the
United States, see id. § 1391(f)(3), where the parties dispute foreign events, omissions, or
property, see id. § 1391(f)(1), and where the parties have agreed to arbitrate outside the United
States, see 9 U.S.C. § 904. That is a small fraction of the actions contemplated under the New
York Convention and its implementing statutes. Finally, Congress might have thought that such
actions would independently merit dismissal for forum non conveniens, which the Supreme
Court has described as “essentially, a supervening venue provision,” Sinochem Int’l Co. v.
15
Malaysia Int'l Shipping Corp., 549 U.S. 422, 429 (2007). See In re Arb. between Monegasque
De Reassurances S.A.M. v. Nak Naftogaz of Ukraine, 311 F.3d 488, 496 (2d Cir. 2002) (holding
that the “doctrine of forum non conviens, a procedural rule, may be applied . . . under the
provisions of the [New York] Convention”). 5 That Congress declined to provide venue for the
actions in § 1391(f) is accordingly unremarkable.
For the reasons above, the Court hold that venue is improper under both § 1391(b)(3) and
§ 1391(c)(3). Uni-Top has accordingly failed to show that venue is proper in this District.
C. This Court May Dismiss For Improper Venue Without Resolving the
Remaining Jurisdictional Issues
This Court may dismiss this action for improper venue without resolving the parties’
dispute over personal jurisdiction. See Mem. Op. at 9–10. Federal courts must ordinarily begin
with their own jurisdiction. See Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83, 94–95
(1998). Because “[j]urisdiction is power to declare the law,” the “requirement that [it] be
established as a threshold matter springs from the nature and limits of the judicial power of the
United States.” Id. at 94–95 (quoting Ex parte McCardle, 74 U.S. (7 Wall.) 506, 514 (1868), and
Mansfield, C. & L.M.R. Co. v. Swan, 111 U.S. 379, 382 (1884)). But dismissing an action for
improper venue “does not entail any assumption by the court of substantive law-declaring
power.” Sinochem, 549 U.S. at 424. For the same reason, the Supreme Court has held that
courts may dismiss a case for forum non conveniens without first resolving a difficult
5
The D.C. Circuit has “held that the doctrine of forum non conveniens does not apply to actions
in the United States to enforce arbitral awards against foreign nations.” BCB Holdings Ltd. v.
Gov’t of Belize, 650 F. App’x 17, 19 (D.C. Cir. 2016) (citing TMR Energy Ltd. v. State Property
Fund of Ukraine, 411 F.3d 296, 303–04 (D.C. Cir. 2005)). But that holding, which turned on the
general principles of forum non conveniens rather than the text of any statute governing foreign
arbitrations, sheds no light on what Congress would have anticipated when drafting § 1391(f).
16
jurisdictional issue. See id. at 436; see also id. at 429 (noting that forum non conveniens is
essentially “a supervening venue provision”). And consistent with that holding, courts in this
Circuit routinely address venue before either subject-matter or personal jurisdiction. See, e.g.,
Producers of Renewables United for Integrity Truth & Transparency v. EPA, 778 F. App’x 1, 4
(D.C. Cir. 2019); Shay v. Sight & Sound Sys., Inc., 668 F. Supp. 2d 80, 82 (D.D.C. 2009); Wei
Lai Dev. LLC v. USCIS, No. 21-cv-887 (RDM), 2021 WL 2073403, at *6 (D.D.C. May 24,
2021). This Court will do the same here.
The Supreme Court’s decision in Leroy v. Great Western United Corp., 443 U.S. 173(1979), does not warrant a different approach. See Pet’r’s Suppl. Br. at 12–13. That case noted
that “[t]he question of personal jurisdiction, which goes to the court’s power to exercise control
over the parties, is typically decided in advance of venue, which is primarily a matter of choosing
a convenient forum.” Leroy, 443 U.S. at 180. It then remarked that “neither personal
jurisdiction nor venue is fundamentally preliminary in the sense that subject-matter jurisdiction
is, for both are personal privileges of the defendant, rather than absolute strictures on the court,
and both may be waived by the parties.” See id. (citations omitted). Accordingly, it held that
courts “may reverse the normal order of considering personal jurisdiction and venue” “when
there is a sound prudential justification for doing so.” 6 Id. Such is the case here.
Uni-Top requests that this Court first allow jurisdictional discovery on whether SIPC is
an “agency or instrumentality” of the PRC, 28 U.S.C. § 1603(a). See Pet’r’s Suppl. Br. at 15.
6
Following Leroy, the Court clarified that personal jurisdiction is a threshold issue that must
ordinarily be decided before the merits. See Sinochem, 549 U.S. at 430–31; Ruhrgas AG v.
Marathon Oil Co., 526 U.S. 574, 584 (1999). It also held, however, that courts may resolve
certain threshold non-jurisdictional issues before their both subject-matter and personal
jurisdiction. See Sinochem, 549 U.S. at 432–36. Accordingly, the Court’s clarification regarding
personal jurisdiction does not disturb Leroy’s holding regarding venue.
17
But because the Court assumed that SIPC qualified as such for the purpose of analyzing venue, it
is not clear how any discovery on jurisdiction could alter that analysis. Moreover, allowing
jurisdictional discovery in this case would likely raise both challenging questions of law and
delicate issues of comity. First, the Court would need to decide whether to conduct discovery
pursuant to the Federal Rules of Civil Procedure or the Hague Evidence Convention. See Pet’r’s
Mem. in Supp. of Jurisdictional Discovery at 25–34; Resp’t’s Opp’n to Jurisdictional Discovery
at 3–16, Dkt. 32. That determination would require weighing the “particular facts” of the case,
any “sovereign interests,” and the “likelihood that resort to [the Hague Convention] procedures
[would] prove effective.” Societe Nationale Industrielle Aerospatiale v. U.S. Dist. Ct. for S.
Dist. of Iowa, 482 U.S. 522, 544 (1987). Second, the Court would need to oversee discovery
regarding the structure of the foreign defendant for the purpose of uncovering any connection to
a foreign sovereign based principally on records and witnesses that are in a foreign country.
That would be a sensitive task. Finally, the Court would need to make factual findings regarding
such qualitative questions as whether SIPC is an “organ” of either the PRC or its political
subdivisions, 28 U.S.C. § 1603(b)(2). See Pet’r’s Mem. in Supp. of Jurisdictional Discovery at
14. Those findings could plausibly have foreign relations implications beyond the facts of this
case. Against that backdrop, which makes the analysis in this opinion appear straightforward in
comparison, there is a “sound prudential justification” for resolving this action on the issue of
venue. Leroy, 443 U.S. at 180.
CONCLUSION
For the foregoing reasons, the respondent’s Motion for Dismiss is granted, the
petitioner’s Motion for Jurisdictional Discovery is denied as moot, and the petitioner’s Petition to
18
Confirm Arbitration Award is dismissed for lack of venue. A separate order consistent with this
decision accompanies this memorandum opinion.
________________________
DABNEY L. FRIEDRICH
United States District Judge
April 22, 2022
19