We’ve previously written about the split among federal courts as to whether the agent of a non-U.S. country can waive that country’s immunity from suit under the U.S. Foreign Sovereign Immunities Act or “FSIA” (you can find our prior posts here and here). Briefly, in some U.S. federal courts (New York, Connecticut, or Vermont), if the plaintiff reasonably believed that the agent had authority to bind the foreign sovereign, i.e., “apparent authority,” that suffices to establish a waiver of immunity. In other U.S. federal courts (California, Texas, Virginia, Maryland, North Carolina, South Carolina, West Virginia, Louisiana, Mississippi, California, Arizona, Nevada, Idaho, Oregon, Washington, and Montana), the foreign sovereign only waives immunity if the agent had actual authority; apparent authority is not good enough.
The D.C. Circuit may soon weigh in on which side of the divide it falls. At the very least, it will likely provide guidance on the minimum pleading standard that plaintiffs in the District of Columbia need to meet to overcome a motion to dismiss regarding an agent’s authority. That holding, in turn, could be important for FSIA litigations going forward, as many lawsuits against foreign sovereigns are brought in the District in the Columbia.
The D.C. Circuit appeal arises out of a decision last fall by the U.S. District Court for the District of Columbia in a case involving the Republic of Iraq, Al Moumin v. Republic of Iraq. The plaintiff alleged that Iraq’s then-Senior Vice President (and former Prime Minister) Nouri al-Maliki entered into a contract for the services for which she was owed a pension. The plaintiff contended that al-Maliki was authorized to act on behalf of Iraq, and that Iraq therefore engaged in “commercial activity” for which it is not immune from suit under the FSIA. Iraq contended, among other things, that the plaintiff failed in her complaint to allege that al-Maliki had the requisite authority to act on behalf of, or bind, Iraq.
The district court noted the split among courts on whether apparent or actual authority suffices. The court stated that, “at least at this point in the litigation,” it did not need to resolve the question. The district court reasoned that the plaintiff had alleged barely enough to meet the “actual authority” standard. The court noted that communications between al-Maliki and Iraq were not within plaintiff’s control, and it was plausible to think that “the Senior Vice President (and former Prime Minister) of Iraq had actual authority to bind Iraq.” The court stated that it would “stage proceedings” to allow the parties “to develop a more complete jurisdictional record before turning, if at all, to the merits.” In other words, the district court seems to intend to have the parties engage in discovery on the issue of al-Maliki’s authority before proceeding further with the case.
Iraq appealed the decision, filing its opening brief at the end of January. (The plaintiff also cross-appealed from the district court’s dismissal of a different part of her complaint). Although interlocutory appeals are typically not permitted in U.S. federal courts, Iraq invoked the “collateral order” doctrine. Under that doctrine, litigants can immediately appeal an issue that: (1) the district court conclusively determined; (2) is important and completely separate from the merits of the case; and (3) would effectively be unreviewable following a final judgment in the action. (You can read more about the collateral order doctrine here). Iraq contends that the issue of its sovereign immunity falls within that doctrine. On the merits, Iraq argues, among other things, that the plaintiff failed to plead that al-Maliki was acting on behalf of Iraq (as opposed to on behalf of himself); that the plaintiff failed to adequately allege actual authority; and that the plaintiff failed to allege apparent authority or that apparent authority “is even a concept that exists under Iraqi agency law.” Iraq argues also that al-Maliki was merely a “deputy” to Iraq’s President and that the President of Iraq is, in turn, a largely ceremonial post. Thus, Iraq contends there was no basis for the district court to find even apparent authority. Iraq relies heavily on a 2021 decision from then-judge Ketanji Brown Jackson (now a U.S. Supreme Court justice), which we wrote about here.
The plaintiff’s response brief is due at the end of February, and oral argument or a decision may be months away. Although the D.C. Circuit could side-step the actual authority versus apparent authority split like the district court did, it may at least provide additional guidance on FSIA plaintiffs’ pleading burden in future cases in the District of Columbia.