Felicia Ellsworth: Welcome to In the Public Interest, a podcast from WilmerHale. My name is Felicia Ellsworth, and I’m a partner at WilmerHale, an international law firm that works at the intersection of government, technology, and business. Today’s episode is the latest installment of our Supreme Court miniseries, where we dive into the most hotly contested decisions coming out of the Supreme Court this term and discuss the implications of the court’s rulings going forward. Today, I am joined by my WilmerHale colleague and fellow appellate litigator, Daniel Volchok, who will be discussing the court’s unanimous decision in CC/Devas (Mauritius) Ltd. v. Antrix Corp. Ltd., which concerns whether the Foreign Sovereign Immunities Act implicitly requires minimum contacts before a U.S. court can exercise personal jurisdiction over a foreign state. Daniel is joined by Dave Bowker, a former attorney advisor in the State Department and the current partner in charge of WilmerHale’s Washington DC office, where he specializes in international disputes and government-related litigation. It promises to be a fascinating episode, discussing an opinion from the Supreme Court that has far-reaching international impacts. Without further ado, I will turn things over to Daniel and Dave.
Daniel Volchok: Thanks, Felicia, and thank you, Dave, for joining us on this episode of our Supreme Court miniseries. First, I think listeners would be very interested to hear about your practice and given the nature of the case, particularly your practice as it relates to international law and affairs.
David Bowker: Good. Thank you, Daniel and Felicia. I’m the chair of the International Litigation Practice here at WilmerHale. Almost everything in my practice involves a cross-border dispute of some kind. And I could put the types of disputes into maybe a half dozen buckets. The first bucket is the most relevant here, the bucket of Foreign Sovereign Immunities Act and International Organizations Immunities Act. The second bucket would be general commercial disputes that are cross-border in nature. And then, there’s a third bucket of the statutory claims. Those might be Anti-Terrorism Act claims involving foreign acts of terrorism, sometimes in connection with armed conflict overseas or matters under the Trafficking Victims Protection Act or the Alien Tort Statute. Then there’s a bucket of human rights work, political prisoner, hostage cases, property rights, and fundamental human rights, including free speech and free expression. Then a couple more buckets that are more specialized. We do a lot of work for museums and collectors of art and antiquities, universities as well. And then a bucket that’s a little bit of a catch-all involving State Department, national security, and defense. So that’s the scope of the practice.
Daniel Volchok: Terrific. Sounds like a very varied practice, and I can certainly attest from the relatively limited number of matters I’ve done that it is extremely interesting and very important work. Okay, so let’s get into the case itself, CC/Devas v. Antrix. How did the case get started? What’s the underlying dispute here?
David Bowker: The dispute here is interesting. It’s, at the outset, a completely foreign dispute, mainly in India, but also involving investors from other countries. Mauritius and Germany had investors in this project. CC/Devas is an Indian corporation that is a multimedia broadcaster. And Antrix is a space-focused commercial entity that reports to the Indian Department of Space. It manufactures and launches satellites, and the dispute here is that CC/Devas contracted with Antrix, the Indian government-owned entity, to lease space on satellites that would be manufactured and launched by Antrix and the Indian government. Ultimately, when it comes time to launch these satellites, the Indian government decides that it needs to use those satellites for reasons of national security and that it’s not going to be able to offer the leased capacity to CC/Devas. There’s a contract between Antrix and CC/Devas, and that has an arbitration clause. So CC/Devas brings claims under the contract, and then you have investors bringing related bilateral investment treaty claims against the Indian government that are related but somewhat different.
Daniel Volchok: I think one question listeners probably have after hearing all that is, what in the world are we doing in a U.S. court? You started out saying it’s a foreign dispute, and all the parties you just described, none of them is a U.S. entity. How did this case get into a U.S. court?
David Bowker: This is where it gets even more interesting. There’s an arbitration panel that’s convened, and the arbitrators decide in favor of CC/Devas. The argument that was made by Antrix was that they couldn’t perform the contract, and they were therefore excused under the force majeure clause. The arbitrators rejected that argument, saying that essentially the Indian government made its own decision to take the capacity of these satellites for itself, and that a sovereign-owned instrumentality can’t claim force majeure when the sovereign itself is giving rise to the alleged force majeure. Essentially, it’s a decision made by the government not to offer the capacity, not an act of mother nature that intervenes. So now this gets to your question of why the United States. Now CC/Devas has the challenge of enforcing a massive $1.2 or $1.3 billion arbitration award against Antrix. And Antrix is a sovereign-owned entity, so there are difficulties with enforcing this award in India, where Antrix has assets. So they decide they need to find other jurisdictions where Antrix may have assets, and that leads them to the United States, where they have reason to believe that Antrix has assets. Then, of course, that gives rise to all kinds of questions about jurisdiction, which is what the case is about.
Daniel Volchok: And let’s talk about those. So you mentioned when you were discussing your own practice, the Foreign Sovereign Immunities Act, and of course, we’re talking about instrumentalities of a sovereign here. So give a little background for our listeners about the Foreign Sovereign Immunities Act, the FSIA.
David Bowker: It’s a statute that was enacted by Congress in 1976, but I think it’s worth giving a little background on the issue of sovereign immunity because it’s very relevant to the interpretation of the FSIA. For really the first 150 years of the United States’ existence, foreign sovereigns had near absolute immunity in US courts. There were exceptions made from time to time, but by and large, the United States afforded absolute immunity to foreign sovereigns in US courts, meaning you couldn’t sue them in the United States. In 1952, there’s a seismic change in the law of sovereign immunity when the State Department announces in the Tate letter that it is going to adopt something known as the restrictive theory of immunity, which means essentially that the sovereign acts of foreign sovereigns will remain immune from jurisdiction in US courts, but the commercial acts of foreign sovereigns will not. So it’s a restrictive theory of immunity, meaning it’s restricted to the sovereign acts, jure imperii, as opposed to jure gestionis, the commercial activities of a foreign sovereign.
And there are really interesting historical reasons for that, relating to the Cold War, where the United States and really both political branches were frustrated with the Soviet Union and communist regimes using state-owned enterprises to compete against private companies in the West, and then taking advantage of sovereign immunity to avoid legal accountability for their misconduct in the marketplace. The State Department decided to adopt this restrictive theory of immunity to deal with that problem. Now what happens in 1976 is that Congress decides to codify that restrictive theory of immunity with the Foreign Sovereign Immunities Act because for the prior 25 years, there’s a lot of pressure on the State Department, political pressure, diplomatic pressure, to afford immunity in every case. And there’s a fair amount of inconsistency in the application of the restrictive theory of immunity. That leads to unpredictability in courts and in U.S. law. So Congress decides this needs to be resolved and enacts the Foreign Sovereign Immunities Act to do that. And it became the exclusive basis to obtain jurisdiction over foreign sovereigns and their agencies and instrumentalities.
Daniel Volchok: Okay, so CC/Devas is suing Antrix, which is an instrumentality of the government of India, in a United States court in the Western District of Washington. And you just said the FSIA is the only way to get jurisdiction over an instrumentality of a foreign government in a U.S. court. So that’s what CC/Devas has to do. The case makes its way up to the Ninth Circuit Court of Appeals. So what does the Ninth Circuit decide that’s relevant here for what’s going to go up to the Supreme Court?
David Bowker: The Ninth Circuit decides that in order to obtain jurisdiction under the Foreign Sovereign Immunities Act, CC/Devas needed to establish vis-a-vis Antrix, number one, that an exception to immunity existed under the Foreign Sovereign Immunities Act. Number two, that service of process had been validly effected. And number three, that minimum contacts had been established consistent with the requirements of the FSIA. And it’s that last part that gives rise to the Supreme Court’s decision because that last part was, in the Supreme Court’s view, inconsistent with the plain language of the FSIA, and it’s that part of the decision that’s struck down.
Daniel Volchok: You said the Ninth Circuit held that to have jurisdiction over Antrix, they had to show that there was an exception to immunity under the FSIA. You also mentioned service of process had properly been made. Essentially, you had let Antrix know that it had been served and was now the subject of this lawsuit in a way that federal law required for instrumentalities of foreign states.
David Bowker: Yeah, exactly. The FSIA at 28 USC 1330B provides personal jurisdiction over foreign states or their agencies or instrumentalities if two requirements are met. That there is an exception to immunity under the FSIA that’s satisfied and that service of process has been made in accordance with the relevant service requirements. And in that case, personal jurisdiction exists over the foreign state or its agency or instrumentality. The Ninth Circuit added a wrinkle, which is that one must also satisfy minimum contacts with the United States in the nature of the same kind of analysis that’s conducted under International Shoe to satisfy due process. Although the plain language of the FSIA doesn’t include that requirement, the Ninth Circuit read that into the statute based on the legislative history.
Daniel Volchok: Okay, and just for our listeners who’ve forgotten their civ pro class or never took it, International Shoe is an old Supreme Court case that basically laid out this general principle of minimum contacts, which essentially says that if you’re going to sue somebody somewhere in a court in the United States, the defendant has to have some connection to that jurisdiction, whether it’s a state or a judicial district. You can’t go sue somebody in Hawaii who’s never been to Hawaii, never had any contact with Hawaii, never visited Hawaii. That’s just unfair. And so you have to show enough of a connection between the defendant and the forum state, that is to say the place that you are suing them.
David Bowker: This is why I love having you as the moderator, because you’ve practiced in this area as well. And you’re absolutely right. That minimum contacts analysis is designed to ensure that traditional notions of fair play and substantial justice are satisfied, that it’s fair to hail a foreign party in U.S. court. And that is particularly important when you’re dealing with a presumptively immune entity, like a foreign state or an agency or instrumentality.
Daniel Volchok: Exactly. So the Ninth Circuit adds this wrinkle, which as you said, was not in the text of the FSIA itself. And as I recall, two of the three judges on the Ninth Circuit panel that decided this case wrote a separate opinion saying, we have to decide it this way because our court said it a long time ago and we are bound by what our court said. We actually don’t think it makes a ton of sense under the Supreme Court’s modern jurisprudence. So with that tailwind, as it were, CC/Devas goes up to the Supreme Court. The lawyers for Antrix, perhaps having read the separate opinion I just mentioned, they surely did, did not try to defend their win on that reasoning, but said they should win on other grounds. In addition to telling us what the Supreme Court said, if you could talk about how unusual it is for a winning party to take that sort of approach in the Supreme Court.
David Bowker: Yeah, it’s very unusual for a winning party in the court below to walk so far away from the lower court decision, but it’s an understandable tactical decision given how much I think the writing was on the wall here. It was meaningful that two of the three judges on the Ninth Circuit panel signaled to the Supreme Court that although they were bound to follow their earlier precedent, they were unhappy with the reasoning of that precedent and made clear that it would make sense to have the Supreme Court review that reasoning from that earlier decision. That was a pretty strong signal and I think when Counsel for Antrix were briefing the matter and arguing it in the Supreme Court, I think they probably recognized that the notion of reading into the FSIA a minimum contacts requirement that’s not in the plain text and where the legislative history support for that argument is quite weak, I think they recognized that they needed to pivot and try some other arguments.
And so counsel for Antrix makes three different arguments. Number one, regardless of whether minimum context is required by the FSIA, it is required by the due process clause, and minimum context is not satisfied with respect to Antrix, and therefore the matter should have been dismissed for lack of jurisdiction under the due process clause, separate and apart from the FSIA. They make a second argument that even under the FSIA, the claims pleaded by CC/Devas do not fall within the arbitration exception. There’s an implied U.S. nexus requirement in the arbitration exception to immunity. These claims don’t satisfy the U.S. nexus requirement that’s implied, and therefore they don’t fall within the exception to immunity. And then the third argument they advanced was a forum non-convenience argument, which is that because the entire dispute was focused in India on matters of Indian government and Indian public policy, it should all be decided in India and the United States courts should defer as a matter of comity.
So they made those three arguments and the Supreme Court said, we’re not going to consider those because the lower court didn’t consider those. The Supreme Court left those open and said that they could be revisited on remand consistent with the Supreme Court’s decision. The Supreme Court instead focused on this issue that was the basis for the Ninth Circuit’s decision, which is whether or not there is a minimum contacts requirement under the FSIA. There, the Supreme Court decided unanimously that there is no such requirement. It’s not in the plain text. The legislative history can’t create such a requirement, and therefore, the FSIA means what it says, which is that jurisdiction is established if there is an exception to immunity and services proper.
Daniel Volchok: So the Supreme Court unanimously reverses the Ninth Circuit’s decision. It leaves open for the Ninth Circuit or maybe the trial court to address the three other arguments that you just mentioned. And of course, one or more of them could eventually make their way back up to the Supreme Court. And I would gather that this result was not surprising in light of the approach that the counsel for Antrix took of not defending the decision, or at least the reasoning, on which they had won. So, Dave, there’s obviously a lot more we could say about the case. Where should listeners go if they have questions and want to find out more?
David Bowker: Well, they can go to wilmerhale.com, where we have a client alert on this case, and there we discuss it in great detail. And you can find it by searching the case name on the WilmerHale website. There are a number of other places to go, including the Supreme Court’s website, where all the briefing and the decision can be found. There are a number of places where one can go to hear the oral argument, which is quite interesting. So the internet is full of possibilities here.
Daniel Volchok: Terrific. Well, Dave, thank you very much for joining us. Again, CC/Devas v. Antrix is the case if folks want to search by the case name. Thank you for discussing this important case and how it will impact foreign sovereign immunities law going forward.
David Bowker: Thanks, Daniel. Fun to speak about it with you, and hopefully this is helpful to our listeners.
Felicia Ellsworth: And thank you to our listeners for tuning in to this episode of In the Public Interest. We hope you’ll join us for our next episode. If you enjoy this podcast, please take a minute to share with a friend and subscribe, rate, and review us wherever you listen to your podcasts. If you have any questions regarding this episode, please e-mail them to us at [email protected]. For all of our WilmerHale alumni in the audience, thank you for listening. We are really proud of our extended community, including alumni in the government, the nonprofit space, academia, other firms, and in leadership positions and corporations around the world. If you haven’t already, please join our alumni center at alumni.wilmerhale.com so we can stay better connected. A special thank you to the producers of this episode, Eugena Liu and Ben Ryan. Sound engineering and editing by Bryan Benenati. Marketing by Andy Basford and his team, all under the leadership of executive producers Kaylene Khosla, Matt O’Malley, and Jake Brownell. See you next time on In the Public Interest.
