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Ezeiruaku v Bull and ors, Appeal judgment, ILDC 2486 (US 2015), 617 F App'x 179 (3d Cir 2015), 13th July 2015, United States; Court of Appeals (3rd Circuit) [3d Cir]

From: Oxford Public International Law (http://opil.ouplaw.com). (c) Oxford University Press, 2015. All Rights Reserved. Subscriber: null; date: 20 January 2019

Parties:
Vincent O Ezeiruaku
Dan Bull, David March, London Police
Judges/Arbitrators:
Franklin Van Antwerpen; Cheryl Ann Krause; D Michael Fisher
Procedural Stage:
Appeal judgment
Previous Procedural Stage(s):
Trial judgment; Ezeiruaku v Bull, No CIVA 14-2567 JBS, 2014 WL 7177128, (DNJ Dec 16, 2014), 16 December 2014Trial judgment; Ezeiruaku v Bull, No CIVA 14-2567 JBS, 2014 WL 5587404, at 1 (DNJ Nov 3, 2014)
Subject(s):
Acta jure imperii — Acta jure gestionis — Immunity from jurisdiction, agents of states — Immunity from jurisdiction, states — Tort
Core Issue(s):
Whether the commercial activity exception to the Foreign Sovereign Immunities Act applied to grant a US court jurisdiction over British police officers who seized cash from a US citizen in the United Kingdom and returned it to him in the United States.

Oxford Reports on International Law in Domestic Courts is edited by:

Professor André Nollkaemper, University of Amsterdam and  August Reinisch, University of Vienna.

Facts

F1  On 18 January 2013, Vincent O Ezeiruaku (‘Ezeiruaku’), a US citizen, was travelling through an airport in London when London police officers detained him and seized a large sum of money in US currency he had on his person. The money was retained for over fourteen months, found not to be connected to any illegal activity, and returned to Ezeiruaku in New Jersey, allegedly without interest.

F2  Ezeiruaku brought an action against the British Police Commissioner and British police officers in the District Court for the District of New Jersey challenging the temporary seizure of the money as violating his due process and property rights.

F3  The Commissioner of Police of the Metropolis (‘Commissioner’) moved to dismiss the complaint under the Foreign Sovereign Immunities Act, 28 USC §§ 1602 – 1611 (United States), enacted 21 October 1976, latest published version 2006 (‘FSIA’), claiming that he and the police officers were immune from suit because they had seized the money in their official capacity in the United Kingdom. Additionally, the lawsuit concerned events that had occurred in the United Kingdom.

F4  Ezeiruaku argued that his complaint fell within the commercial activity, expropriation, and tortious activity exceptions to the FSIA and that the British police had engaged in targeted contact with the United States by (1) retaining his money, gaining profit from the interest, and diminishing his ability to conduct business as usual in the United States, and (2) returning the seized currency to him in New Jersey. He contended that the United Kingdom had made a profit by earning interest on his money, which was enough to bring his claim into the federal courts of the United States.

F5  On 3 November 2014, the District Court dismissed Ezeiruaku's complaint, holding that the FSIA insulated the Commissioner from suit in the United States for the alleged conduct.

F6  On 16 December 2014, the District Court denied Ezeiruaku’s motion for reconsideration. Ezeiruaku appealed, relying solely on the commercial activity exception to the FSIA issue.

Held

H1  The FSIA provided the exclusive source of potential subject matter jurisdiction over claims in US courts against foreign states and their agencies or instrumentalities. A foreign state, its agents, and its instrumentalities had presumptive immunity from suits in US federal courts, absent a demonstration by the plaintiff that the claim fell within a statutory exception to immunity. Where the defendant made the prima facie case that it was a qualifying agent and/or instrumentality of a foreign state, the burden shifted to the plaintiff to produce sufficient evidence demonstrating the application of one of the statutory exceptions to immunity under the FSIA. (paragraph 7)

H2  The British officials were entitled to immunity from suit under the FSIA. None of the exceptions applied, including the commercial activity exception. The commercial activity exception provided that states were not immune from US jurisdiction if the action was ‘based upon an act outside the territory of the United States in connection with a commercial activity of the foreign state elsewhere and that act causes a direct effect in the United States’. (paragraph 8)

H3  A two-part test had been adopted to determine whether a foreign state’s commercial activities were sufficient to deprive it of immunity under the FSIA. The first part was whether there was a sufficient jurisdictional connection or nexus between the commercial activity and the United States. The second was whether a substantive connection or nexus existed between the commercial activity and the subject matter of the cause of action. (paragraph 9)

H4  The policing by local authorities of an international airport was a quintessentially sovereign act, and not an activity that private players would normally undertake for profit. The British officials were enforcing the law of the United Kingdom, both in seizing the currency and in investigating whether it was forfeitable. The conduct had no transactional relationship whatsoever to the United States. The commercial activities exception did not apply. Ezeiruaku would have to pursue his claim through the UK courts. (paragraph 10)

H5  The other two exceptions to the FSIA previously raised by Ezeiruaku also did not apply. Under the expropriation exception, a state was not immune when it took property in violation of international law and the property was present in the United States in connection with a commercial activity carried on in the United States by the foreign state, or the foreign state owned the property or property exchanged for it and the foreign state was engaged in commercial activity in the United States. Ezeiruaku had not alleged that the British officials had engaged in any commercial activity in the United States. (paragraph 11)

H6  The tortious activity exception to the FSIA provided that a state was not immune from jurisdiction in any case where a plaintiff sought damages against a foreign state for personal injury or death, or damage to or loss of property, occurring in the United States caused by the tortious act or omission of that foreign state or of any official of the foreign state while acting within the scope of his employment. This exception only covered torts that occurred in the United States; here, all the acts occurred in the United Kingdom. (paragraph 12)

H7  The order of the District Court dismissing the complaint was affirmed. (paragraph 13)

Date of Report: 20 March 2016
Reporter(s):
Chidera Anyanwu

Analysis

A1  Ezeiruaku’s claims did not succeed mainly because acts of law enforcement were sovereign acts that were specially protected under the FSIA because of notions of comity and respect for essential actions of governments. The British officials had been undertaking their official duties. Because acting within their official capacity as agents of a foreign state allowed for their immunity from suit, Ezeiruaku would have had to present compelling evidence given that the burden shifted to him to claim that one of the exceptions to the FSIA applied. (paragraph 7) Ezeiruaku had tried to do so by claiming that not paying interest on the confiscated funds had allowed the British officials to profit from the act, thus making the occurrence a commercial transaction. The court did not find this to be a compelling argument.

A2  Just as in this decision, in the landmark judgment for sovereign immunity under the FSIA, Saudi Arabia v Nelson, Supreme Court judgment, 507 US 349 (1993), ILDC 2643 (US 1993), 23 March 1993 (‘Nelson’), the action from which the claim arose was activity by security officers acting in their official capacity, who detained Mr Nelson. The Supreme Court recognized that the officials were agents of the state and placed the burden on Mr Nelson to prove that their actions amounted to a commercial activity with sufficient nexus to the United States. Mr Nelson claimed that the act upon which his claim was based was the Saudi Arabian government recruiting him for a job while he was in the United States. The Supreme Court determined that a difference existed in regard to a suit based upon commercial activity and one based upon acts that were connected to the commercial activity. It held that the activity upon which the claim was based was the act of the officials in detaining Nelson, which was an act of a public official acting within their official capacity. Therefore, the FSIA exception did not apply.

A3  In the instant case, the court conducted a similar analysis in determining that the actions of the British officers did not constitute commercial activity. The United States Court of Appeals for the Third Circuit (‘Third Circuit’) similarly distinguished between a suit based upon commercial activity and one based upon acts that were of an officer acting in his official capacity, to find that Ezeiruaku was complaining about the quintessential acts of the government, of policing airports through policemen, not the gaining of profits. (paragraph 10) Similar to the conduct in Nelson, the actions of the British policemen were not commercial and had no nexus to the United States.

A4  What this case reinforced was that a foreign state had to have been acting as a private party in a market to have been conducting commercial activity and that act must have been the basis of the suit. The Third Circuit also hinted at the notion of comity when it explained that certain acts were usually protected as acts of the state. The international community acknowledged that certain acts of states were sovereign acts, especially those that were connected to the security of the state. Therefore, the act of searching and seizing a large sum of money for investigation was protected. Future cases such as this would likely also be dismissed.

A5  The court presumed that the individual officer’s actions constituted acts of a foreign state in order to qualify for immunity under the FSIA. In doing so, the court failed to address the Supreme Court precedent stating that individual officers who were sued for their official conduct were not automatically entitled to immunity as a foreign state. This determination was typically subject to US common law. See Samantar v Yousuf, Supreme Court judgment, 560 US 305 (2010), ILDC 1505 (US 2010), 1 June 2010.

Date of Analysis: 20 March 2016
Analysis by: Chidera Anyanwu

Cases cited in the full text of this decision:

To access full citation information for this document, see the Oxford Law Citator record

Decision - full text

Paragraph numbers have been added to this decision by OUP

[1]  International Law

Extent and Effect of immunity

British airport police’s seizure of $80,000 in United States currency from traveler in a London airport and subsequent investigation into whether the currency was forfeitable bore no transactional relationship to the United States, and thus the Foreign Sovereign Immunities Act’s (FSIA) “commercial activity” exception to FSIA’s statutory immunity did not apply and permit suit in the United States, where the policing by local authorities of an international airport was not conduct of a nature that a private party would ordinarily undertake for profit. 28 U.S.C.A. §§ 1603, 1605(a)(2).

Cases that cite this headnote

*179 On Appeal from the United States District Court for the District of New Jersey, (D.C. Civ. No. 1-14-cv-02567), District Judge: Honorable Jerome B. Simandle.

Attorneys and Law Firms

Vincent O. Ezeiruaku, Doing Business as Saba Products, Williamstown, NJ, pro se.

Aileen F. Droughton, Esq., Marta N. Kozlowska, Esq., Traub, Lieberman, Straus & Shrewsberry, Red Bank, NJ, for Appellant.

Before: FISHER, KRAUSE and VAN ANTWERPEN, Circuit Judges.

Opinion*

PER CURIAM.

Vincent O. Ezeiruaku appeals from an order of the District Court dismissing his complaint for lack of subject matter jurisdiction. For the reasons that follow, we will affirm.

On January 18, 2013, while travelling through London’s Heathrow Airport, Ezeiruaku, *180 a naturalized citizen of the United States, was detained by Officers Dan Bull and David March of the Metropolitan Police Services. Ezeiruaku had in his possession $80,000 in United States currency. The currency was seized by the police and held for fourteen months. Ezeiruaku was told to proceed with his trip but that further investigation was needed to determine whether the currency was forfeitable. Appellant’s Informal Brief, at 1. The cash was eventually returned to him, allegedly without interest. Ezeiruaku filed suit in the United States District Court for the District of New Jersey against Bull, March, and the London Police,1 alleging violations of his constitutional right to due process, and his property rights, in connection with the seizure of his funds. Ezeiruaku sought money damages for business losses associated with the seizure.2

The defendants moved to dismiss the complaint, in the main, pursuant to Fed. R. Civ. Pro. 12(b)(1) and on the basis of the Foreign Sovereign Immunities Act (“FSIA”), 28 U.S.C. §§ 1330, 1603, and 1605, contending that they were immune from suit because they seized the currency in their official capacity as law enforcement instrumentalities of the United Kingdom. In opposing the defendants’ motion to dismiss, Ezeiruaku argued that his complaint fell within the commercial activity, expropriation, and tortious activity exceptions to the jurisdictional immunity of a foreign state under 28 U.S.C. § 1605(a)(2), (3) and (5), and that the defendants engaged in targeted contact with New Jersey, and more generally with the United States, by returning the seized currency to him in New Jersey.

In an order entered on November 3, 2014, the District Court granted the defendants’ motion and dismissed Ezeiruaku’s complaint, holding that the FSIA insulated the defendants from suit in the United States for the conduct alleged. In an order entered on December 16, 2014, the District Court denied Ezeiruaku’s timely filed motion for reconsideration.

Ezeiruaku appeals. We have jurisdiction under 28 U.S.C. § 1291. The determination of the existence of subject matter jurisdiction under the FSIA is a legal question subject to plenary review. See Federal Insurance Co. v. Richard I. Rubin & Company, Inc., 12 F.3d 1270, 1282 (3d Cir.1993). In his Informal Brief, Ezeiruaku argues that the commercial activity exception applies because foreign states are not immune from suit in the courts of the United States where an act outside the territory of the United States “causes a direct effect in the United States,” Appellant’s Informal Brief, at 2 (quoting 28 U.S.C. § 1605(a)(2)), and that the District Court incorrectly failed to apply the commercial activity exception to the facts of his case. He argues that there is no “substantial connection with the United States” requirement in the statute, Appellant’s Informal Brief, at 4, and that the United Kingdom made a profit by earning interest on his money, which is enough to bring his claim into the federal courts of the United States.

We will affirm. The FSIA provides the exclusive source of potential subject matter *181 jurisdiction over claims in United States courts against foreign states and their agencies or instrumentalities, which, here, plainly includes the defendants. See Republic of Argentina v. Weltover, 504 U.S. 607, 610–11, 112 S.Ct. 2160, 119 L.Ed.2d 394 (1992). See also Argentine Republic v. Amerada Hess shipping Corp., 488 U.S. 428, 434–35, 109 S.Ct. 683, 102 L.Ed.2d 818 (1989). But a foreign state, its agents, and its instrumentalities have presumptive immunity from suits in federal courts, absent a demonstration by the plaintiff that the claim falls within a statutory exception to immunity. 28 U.S.C. § 1604 (“[A] foreign state shall be immune from the jurisdiction of the courts of the United States and of the States except as provided in sections 1605 to 1607” of the FSIA). Once the defendants make the prima facie case that they are qualifying agents and/or instrumentalities of a foreign state, the burden shifts to the plaintiff to produce sufficient evidence demonstrating the application of one of the statutory exceptions to immunity. See Federal Insurance Co., 12 F.3d at 1285.

In opposing the defendants’ motion, Ezeiruaku argued that three different exceptions to immunity applied to his cause of action; on appeal he relies only on the commercial activity exception. We conclude that the District Court properly determined that the defendants are immune from suit under the FSIA and that none of the exceptions to immunity applies here. Ezeiruaku relies on § 1605(a)(2), which states that a foreign state shall not be immune where “the action is based … upon an act outside the territory of the United States in connection with a commercial activity of the foreign state elsewhere and that act causes a direct effect in the United States.” 28 U.S.C. § 1605(a)(2). In relying on this exception, Ezeiruaku alleged that the defendants’ seizure of his cash enabled them to profit from the interest accrued during their retention of his cash.

The FSIA defines “commercial activity” as “either a regular course of commercial conduct or a particular commercial transaction or act.” Id. at § 1603. The Act also requires that the “commercial activity” carried on in the United States by a foreign state have “substantial contact” with the United States. Id. at § 1603(e). We have adopted a test to determine whether a foreign state’s commercial activities are sufficient to deprive it of immunity under the FSIA. “Under this test, the initial inquiry is whether there is a sufficient jurisdictional connection or nexus between the commercial activity and the United States. The second inquiry is whether there exists a substantive connection or nexus between the commercial activity and the subject matter of the cause of action.” Federal Insurance Co., 12 F.3d at 1286.

10  The District Court concluded that the allegations in Ezeiruaku’s complaint were insufficient to show activities that are commercial in nature or in purpose, and we agree that the initial focus must be on whether the defendants’ actions qualify as commercial activity. Ezeiruaku has improperly relied upon quintessentially sovereign acts, namely, the policing by local authorities of an international airport, here, London’s Heathrow Airport, and not conduct of a nature that a private party would ordinarily undertake for profit. The defendants were enforcing the law of the United Kingdom, both in seizing the currency and in investigating whether it was forfeitable, and thus the conduct at issue bears no transactional relationship whatsoever to the United States. The commercial activities exception thus does not apply. Ezeiruaku will have to pursue a remedy for his alleged financial losses in the courts of the United Kingdom.

11  *182 For the sake of completeness, we note that the other two exceptions also do not apply to deprive the defendants of their immunity from suit. The expropriation exception provides that a foreign state shall not be immune from the jurisdiction of courts of the United States in a case “in which rights in property taken in violation of international law are in issue and that property … is present in the United States in connection with a commercial activity carried on in the United States by the foreign state; or that property … is owned or operated by an agency or instrumentality of the foreign state and that agency or instrumentality is engaged in a commercial activity in the United States.” 28 U.S.C. § 1605(a)(3). Again, Ezeiruaku failed to allege that the defendants engaged in any commercial activity in the United States. As a result, the alleged acts fall outside the scope of the expropriation exception to immunity.

12  The tortious activity exception provides that a foreign state shall not be immune from the jurisdiction of courts of the United States in any case “in which money damages are sought against a foreign state for personal injury or death, or damage to or loss of property, occurring in the United States and caused by the tortious act or omission of that foreign state or of any official or employee of that foreign state while acting within the scope of his office or employment….” Id. at 1605(a)(5). This exception covers only torts occurring within the territorial jurisdiction of the United States. See Argentine Republic, 488 U.S. at 440–41, 109 S.Ct. 683. Even if Ezeiruaku’s complaint could plausibly be construed to allege that the defendants engaged in tortious conduct, he did not allege, nor could he allege, that such conduct occurred “within the territorial jurisdiction of the United States[.]” Id. Rather, the conduct clearly occurred within the territorial jurisdiction of the United Kingdom. The tortious activity exception, accordingly, has no application to this litigation.3

13  For the foregoing reasons, we will affirm the order of the District Court dismissing the complaint for lack of subject matter jurisdiction.

All Citations

617 Fed.Appx. 179

 

Footnotes:

*  This disposition is not an opinion of the full Court and pursuant to I.O.P. 5.7 does not constitute binding precedent.

1  The correct defendant is the Commissioner of Police of the Metropolis.

2  Ezeiruaku claimed a “loss of profit in the amount of $500,000 plaintiff brought the $80,000 specifically to purchase 20 Sandy/flood cars which he would have made profit of $25,000 on each sale; [and] loss of any opportunity to repeat the purchase and sale venture which could have been done at least twice … during the one year period the money was seized, causing the loss of $2,000,000; and [ ] $5,200 in interest of the $80,000 as compounded daily.” Complaint, at ¶ 9 (emphasis removed).

3  Because Ezeiruaku did not address it in his brief, he has waived any challenge to the District Court’s order denying his motion for reconsideration. Nagle v. Alspach, 8 F.3d 141, 143 (3d cir.1993) (“When an issue is either not set forth in the statement of issues presented or not pursued in the argument section of the brief, the appellant has abandoned and waived that issue on appeal.”).