17-4025-cv Funk v. Belneftekhim
UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT
SUMMARY ORDER Rulings by summary order do not have precedential effect. Citation to a summary order filed on or after January 1, 2007, is permitted and is governed by Federal Rule of Appellate Procedure 32.1 and this Court’s Local Rule 32.1.1. When citing a summary order in a document filed with this Court, a party must cite either the Federal Appendix or an electronic database (with the notation “summary order”). A party citing a summary order must serve a copy of it on any party not represented by counsel.
1 At a stated term of the United States Court of Appeals for the Second Circuit, held at 2 the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New York, 3 on the 26th day of June, two thousand eighteen. 4 5 PRESENT: JOSÉ A. CABRANES, 6 GERARD E. LYNCH, 7 SUSAN L. CARNEY, 8 Circuit Judges. 9 10 11 VLADLENA FUNK, EMANUEL ZELTSER, 12 13 Plaintiffs-Appellees, 17-4025-cv 14 15 v. 16 17 BELNEFTEKHIM, AKA CONCERN 18 BELNEFTEKHIM, BELNEFTEKHIM USA, INC., 19 20 Defendants-Appellants. 21 22 23 FOR PLAINTIFFS-APPELLEES: EMANUEL ZELTSER, Sternik & Zeltser, 24 New York, NY. 25 26 FOR DEFENDANTS-APPELLANTS: KENNETH A. CARUSO (Christopher D. 27 Volpe, Michelle Letourneau-Belock, on 28 the brief), White & Case LLP, New 29 York, NY. 30
1 1 Appeal from orders of the United States District Court for the Eastern District of 2 New York (Brian M. Cogan, Judge).
3 UPON DUE CONSIDERATION WHEREOF, IT IS HEREBY ORDERED, 4 ADJUDGED, AND DECREED that the orders are AFFIRMED in part, and the appeal 5 is DISMISSED in part.
6 Defendants-Appellants Belneftekhim, also known as Concern Belneftekhim, and 7 Belneftekhim USA, Inc. (collectively, “Belneftekhim”) appeal the District Court’s orders 8 entered on August 22, September 5, November 20, and December 15, 2017. In those orders, 9 the District Court imposed discovery sanctions on Belneftekhim, denied Belneftekhim’s 10 motion to dismiss, and denied Belneftekhim’s motions for reconsideration. On appeal, 11 Belneftekhim argues that the orders must be vacated because (1) under the Foreign 12 Sovereign Immunities Act of 1976 (“FSIA”), the District Court lacked subject matter 13 jurisdiction, and (2) the District Court lacked diversity jurisdiction over the suit. It further 14 contends that the District Court should have remanded the case to state court. We assume 15 the parties’ familiarity with the facts and procedural history of this case, to which we refer 16 here only as necessary to explain our decision affirming the District Court’s denial of 17 Belneftekhim’s motion to dismiss and dismissing the remainder of the appeal for lack of 18 appellate jurisdiction.
19 I.
20 Before turning to the merits of Belneftekhim’s appeal, we must determine whether 21 we have appellate jurisdiction to consider the challenged orders; if we do, we then assess the 22 scope of that jurisdiction. See Kovaco v. Rockbestos-Surprenant Cable Corp., 834 F.3d 128, 133–34 23 (2d Cir. 2016); Bolmer v. Oliveira, 594 F.3d 134, 140 (2d Cir. 2010).
24 It is well established that a district court’s denial of a motion to dismiss on foreign 25 sovereign immunity grounds is an appealable collateral order. Rein v. Socialist People’s Libyan 26 Arab Jamahiriya, 162 F.3d 748, 755 (2d Cir. 1998); see also Funk v. Belneftekhim (“Funk I”), 861 27 F.3d 354, 363 (2d Cir. 2017). We therefore have jurisdiction to consider this aspect of 28 Belneftekhim’s appeal, even though final judgment has not been entered.
29 In contrast, a district court’s imposition of discovery sanctions and rulings on 30 diversity jurisdiction and motions to remand, in the ordinary course, are not immediately 31 appealable. See Ashmore v. CGI Grp., Inc., 860 F.3d 80, 85 (2d Cir. 2017) (“[I]mmediate appeal 32 is not automatically authorized whenever a party alleges that a district court has permitted a
2 1 suit to move forward in the absence of proper subject matter jurisdiction.”). Under the 2 doctrine of pendent appellate jurisdiction, however, we may exercise jurisdiction over such 3 orders in certain limited circumstances: “[W]here we have jurisdiction over an interlocutory 4 appeal of one ruling, [we may] exercise jurisdiction over other, otherwise unappealable 5 interlocutory decisions, where such rulings are inextricably intertwined with the order over 6 which we properly have appellate jurisdiction, or where review of such rulings is necessary to 7 ensure meaningful review of the appealable order.” Myers v. Hertz Corp., 624 F.3d 537, 552 8 (2d Cir. 2010) (internal quotation marks omitted).
9 Here, the District Court’s foreign sovereign immunity ruling, the appeal of which we 10 may consider, was predicated on the discovery sanctions that it imposed. These sanctions 11 created a related evidentiary presumption against Belneftekhim and limited the record that 12 the court considered in evaluating the sovereign immunity defense. Our review of the 13 sovereign immunity ruling “would be handicapped by our failure to review the non- 14 appealable” discovery sanctions, id. at 553 (internal quotation marks omitted), because the 15 discovery sanctions circumscribed the evidentiary record on which the District Court relied 16 in adjudicating the sovereign immunity defense. Under Myers, therefore, we have pendent 17 appellate jurisdiction to consider the sanctions order.
18 We lack pendent appellate jurisdiction, however, to consider Belneftekhim’s 19 arguments that the District Court lacked diversity jurisdiction over the suit and that it should 20 have remanded the case to state court. As we explain, neither question is “inextricably 21 intertwined” with the denial of foreign sovereign immunity, nor is resolution of either issue 22 “necessary to ensure meaningful review of the appealable order.” Id. at 552 (internal 23 quotation marks omitted).
24 We are unpersuaded by Belneftekhim’s argument that, because of our jurisdiction 25 over the District Court’s denial of foreign sovereign immunity, we have jurisdiction—and 26 even an obligation—to consider these additional issues of subject-matter jurisdiction. The 27 cases Belneftekhim cites are distinguishable. In some cases relied on by Belneftekhim, review 28 of the otherwise non-appealable subject-matter jurisdiction questions was necessary to 29 ensure meaningful review of the appealable order: the district court would necessarily have 30 lacked jurisdiction to issue the appealable order at all if it had no subject-matter jurisdiction. 31 See, e.g., Hapag-Lloyd Aktiengesellschaft v. U.S. Oil Trading LLC, 814 F.3d 146, 150 n.10 (2d Cir. 32 2016); Merritt v. Shuttle, Inc., 187 F.3d 263, 269 (2d Cir. 1999). In others, the subject-matter 33 jurisdiction question was “inextricably intertwined” with the appealable issue. See, e.g., In re 34 Methyl Tertiary Butyl Ether (“MTBE”) Prods. Liab. Litig., 488 F.3d 112, 123 (2d Cir.
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17-4025-cv Funk v. Belneftekhim
UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT
SUMMARY ORDER Rulings by summary order do not have precedential effect. Citation to a summary order filed on or after January 1, 2007, is permitted and is governed by Federal Rule of Appellate Procedure 32.1 and this Court’s Local Rule 32.1.1. When citing a summary order in a document filed with this Court, a party must cite either the Federal Appendix or an electronic database (with the notation “summary order”). A party citing a summary order must serve a copy of it on any party not represented by counsel.
1 At a stated term of the United States Court of Appeals for the Second Circuit, held at 2 the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New York, 3 on the 26th day of June, two thousand eighteen. 4 5 PRESENT: JOSÉ A. CABRANES, 6 GERARD E. LYNCH, 7 SUSAN L. CARNEY, 8 Circuit Judges. 9 10 11 VLADLENA FUNK, EMANUEL ZELTSER, 12 13 Plaintiffs-Appellees, 17-4025-cv 14 15 v. 16 17 BELNEFTEKHIM, AKA CONCERN 18 BELNEFTEKHIM, BELNEFTEKHIM USA, INC., 19 20 Defendants-Appellants. 21 22 23 FOR PLAINTIFFS-APPELLEES: EMANUEL ZELTSER, Sternik & Zeltser, 24 New York, NY. 25 26 FOR DEFENDANTS-APPELLANTS: KENNETH A. CARUSO (Christopher D. 27 Volpe, Michelle Letourneau-Belock, on 28 the brief), White & Case LLP, New 29 York, NY. 30
1 1 Appeal from orders of the United States District Court for the Eastern District of 2 New York (Brian M. Cogan, Judge).
3 UPON DUE CONSIDERATION WHEREOF, IT IS HEREBY ORDERED, 4 ADJUDGED, AND DECREED that the orders are AFFIRMED in part, and the appeal 5 is DISMISSED in part.
6 Defendants-Appellants Belneftekhim, also known as Concern Belneftekhim, and 7 Belneftekhim USA, Inc. (collectively, “Belneftekhim”) appeal the District Court’s orders 8 entered on August 22, September 5, November 20, and December 15, 2017. In those orders, 9 the District Court imposed discovery sanctions on Belneftekhim, denied Belneftekhim’s 10 motion to dismiss, and denied Belneftekhim’s motions for reconsideration. On appeal, 11 Belneftekhim argues that the orders must be vacated because (1) under the Foreign 12 Sovereign Immunities Act of 1976 (“FSIA”), the District Court lacked subject matter 13 jurisdiction, and (2) the District Court lacked diversity jurisdiction over the suit. It further 14 contends that the District Court should have remanded the case to state court. We assume 15 the parties’ familiarity with the facts and procedural history of this case, to which we refer 16 here only as necessary to explain our decision affirming the District Court’s denial of 17 Belneftekhim’s motion to dismiss and dismissing the remainder of the appeal for lack of 18 appellate jurisdiction.
19 I.
20 Before turning to the merits of Belneftekhim’s appeal, we must determine whether 21 we have appellate jurisdiction to consider the challenged orders; if we do, we then assess the 22 scope of that jurisdiction. See Kovaco v. Rockbestos-Surprenant Cable Corp., 834 F.3d 128, 133–34 23 (2d Cir. 2016); Bolmer v. Oliveira, 594 F.3d 134, 140 (2d Cir. 2010).
24 It is well established that a district court’s denial of a motion to dismiss on foreign 25 sovereign immunity grounds is an appealable collateral order. Rein v. Socialist People’s Libyan 26 Arab Jamahiriya, 162 F.3d 748, 755 (2d Cir. 1998); see also Funk v. Belneftekhim (“Funk I”), 861 27 F.3d 354, 363 (2d Cir. 2017). We therefore have jurisdiction to consider this aspect of 28 Belneftekhim’s appeal, even though final judgment has not been entered.
29 In contrast, a district court’s imposition of discovery sanctions and rulings on 30 diversity jurisdiction and motions to remand, in the ordinary course, are not immediately 31 appealable. See Ashmore v. CGI Grp., Inc., 860 F.3d 80, 85 (2d Cir. 2017) (“[I]mmediate appeal 32 is not automatically authorized whenever a party alleges that a district court has permitted a
2 1 suit to move forward in the absence of proper subject matter jurisdiction.”). Under the 2 doctrine of pendent appellate jurisdiction, however, we may exercise jurisdiction over such 3 orders in certain limited circumstances: “[W]here we have jurisdiction over an interlocutory 4 appeal of one ruling, [we may] exercise jurisdiction over other, otherwise unappealable 5 interlocutory decisions, where such rulings are inextricably intertwined with the order over 6 which we properly have appellate jurisdiction, or where review of such rulings is necessary to 7 ensure meaningful review of the appealable order.” Myers v. Hertz Corp., 624 F.3d 537, 552 8 (2d Cir. 2010) (internal quotation marks omitted).
9 Here, the District Court’s foreign sovereign immunity ruling, the appeal of which we 10 may consider, was predicated on the discovery sanctions that it imposed. These sanctions 11 created a related evidentiary presumption against Belneftekhim and limited the record that 12 the court considered in evaluating the sovereign immunity defense. Our review of the 13 sovereign immunity ruling “would be handicapped by our failure to review the non- 14 appealable” discovery sanctions, id. at 553 (internal quotation marks omitted), because the 15 discovery sanctions circumscribed the evidentiary record on which the District Court relied 16 in adjudicating the sovereign immunity defense. Under Myers, therefore, we have pendent 17 appellate jurisdiction to consider the sanctions order.
18 We lack pendent appellate jurisdiction, however, to consider Belneftekhim’s 19 arguments that the District Court lacked diversity jurisdiction over the suit and that it should 20 have remanded the case to state court. As we explain, neither question is “inextricably 21 intertwined” with the denial of foreign sovereign immunity, nor is resolution of either issue 22 “necessary to ensure meaningful review of the appealable order.” Id. at 552 (internal 23 quotation marks omitted).
24 We are unpersuaded by Belneftekhim’s argument that, because of our jurisdiction 25 over the District Court’s denial of foreign sovereign immunity, we have jurisdiction—and 26 even an obligation—to consider these additional issues of subject-matter jurisdiction. The 27 cases Belneftekhim cites are distinguishable. In some cases relied on by Belneftekhim, review 28 of the otherwise non-appealable subject-matter jurisdiction questions was necessary to 29 ensure meaningful review of the appealable order: the district court would necessarily have 30 lacked jurisdiction to issue the appealable order at all if it had no subject-matter jurisdiction. 31 See, e.g., Hapag-Lloyd Aktiengesellschaft v. U.S. Oil Trading LLC, 814 F.3d 146, 150 n.10 (2d Cir. 32 2016); Merritt v. Shuttle, Inc., 187 F.3d 263, 269 (2d Cir. 1999). In others, the subject-matter 33 jurisdiction question was “inextricably intertwined” with the appealable issue. See, e.g., In re 34 Methyl Tertiary Butyl Ether (“MTBE”) Prods. Liab. Litig., 488 F.3d 112, 123 (2d Cir. 2007) 35 (“[W]e cannot resolve the defense of sovereign immunity here without determining whether 3 1 the removal statutes confer subject matter jurisdiction on the district court.”). Here, by 2 contrast, there is no dispute that the District Court had subject matter jurisdiction to decide 3 whether Belneftekhim was entitled to foreign sovereign immunity after Belneftekhim 4 properly removed the case to federal court on that basis, see 28 U.S.C. § 1441(d), and 5 Belneftekhim’s diversity and removal arguments are not inextricably intertwined with the 6 foreign sovereign immunity claim. Accordingly, none of the cases Belneftekhim cites 7 supports exercising pendent appellate jurisdiction here.
8 II.
9 We review de novo the District Court’s denial of a motion to dismiss for want of 10 foreign sovereign immunity, see Filler v. Hanvit Bank, 378 F.3d 213, 216 (2d Cir. 2004); we 11 review for abuse of discretion the discovery sanctions that the court imposed, see Funk I, 861 12 F.3d at 365.
13 Belneftekhim claims that the District Court erred in imposing as a discovery sanction 14 an evidentiary presumption against Belneftekhim and in further declining to consider a 15 certain document submitted by Belneftekhim. In Funk I, however, we addressed this issue 16 explicitly, suggesting that, although the court could not strike the foreign sovereign immunity 17 defense as a sanction for non-compliance with court orders, it could “(1) accord[ ] an 18 evidentiary presumption against defendants that withheld discovery would refute their claim 19 that [Belneftekhim] is an organ or instrumentality of Belarus, and (2) prohibit[ ] defendants 20 from offering further supporting evidence on that issue.” Id. at 371 (citing Fed. R. Civ. 21 P. 37(b)(2)(A)(i), (ii)). Following our suggestion to the letter, after further proceedings, the 22 District Court imposed both of these sanctions. It explained its basis for doing so in a 23 thoughtful opinion. See Funk v. Belneftekhim, No. 14-cv-376 (BMC), 2017 WL 5592676, at *6– 24 *7 (E.D.N.Y. Nov. 20, 2017).
25 Perhaps recognizing weakness in its contentions on the point, Belneftekhim merely 26 gestures toward an argument that the District Court abused its discretion by imposing the 27 challenged evidentiary presumption.1 Instead, it focuses its attack primarily on the District 28 Court’s refusal to consider purported interpretations of law set forth in a two-page
1 To the extent Belneftekhim’s invocation of the act-of-state doctrine bears on this issue (or any other in this appeal), we are unpersuaded that we should revisit the conclusion of the Funk I panel (were we free to do so) that the doctrine is not relevant here. See Funk v. Belneftekhim, 861 F.3d 354, 367–68 (2d Cir. 2017).
4 1 document submitted by Belneftekhim and bearing the heading “Ministry of Justice of the 2 Republic of Belarus.” See App. 409–10. Relying on our decision in In re Vitamin C Antitrust 3 Litigation, 837 F.3d 175 (2d Cir. 2016), Belneftekhim argues that the District Court was 4 required to consider the document and to afford conclusive deference to the document’s 5 assertions regarding the formation and status of Belneftekhim in Belarus. We are not 6 persuaded.
7 Most significant, of course, is the development that one week after we heard 8 argument in this case, the Supreme Court vacated our decision in Vitamin C, in which we 9 afforded conclusive weight to an extensive and detailed interpretation of foreign law 10 submitted by a foreign government appearing as amicus curiae. See Animal Sci. Prods., Inc. v. 11 Hebei Welcome Pharm. Co. Ltd., No. 16-1220, — S. Ct. —, 2018 WL 2973745, at *3 (June 14, 12 2018). The Court held that “a federal court is neither bound to adopt the foreign 13 government’s characterization [of its laws] nor required to ignore other relevant materials.” 14 Id. at *6; see also id. (identifying “[r]elevant considerations” in determining weight foreign 15 government’s submission should be afforded). Belneftekhim’s position that the District 16 Court was obligated to defer to assertions set forth in the tendered document is now, 17 therefore, unsupported by case law and contrary to the Supreme Court’s most recent 18 pronouncement in the field.
19 Further, and contrary to Belneftekhim’s protestations that it was error not to consider 20 the document at all, “[c]ourts routinely decide issues”—including those related to sovereign 21 immunity and subject-matter jurisdiction—“based on limited records.” Funk I, 861 F.3d 22 at 372. In Funk I, our Court deemed plaintiffs’ claim that Belneftekhim has “two 23 components,” one essentially private and one an agency or instrumentality of Belarus, to be 24 at least superficially plausible, see id. at 368, 372, and, as recounted by the District Court, 25 Belneftekhim has for years stymied plaintiffs’ efforts to obtain evidence that would support 26 (or negate) these allegations. Faced with Belneftekhim’s recalcitrance, the District Court 27 acted permissibly in limiting the record and refusing to consider the tendered document in 28 its determination regarding the FSIA defense propounded by Belneftekhim. Nothing in 29 Vitamin C compelled a different result.2
2 Nor does Federal Rule of Civil Procedure 44.1—which provides that courts “may consider any relevant material or source” in determining a foreign country’s law—suggest that the District Court could not limit the record in the way it did.
5 1 Absent the tendered document, Belneftekhim’s argument that the District Court 2 erred by denying its sovereign immunity defense quickly runs aground: the evidentiary 3 presumption in plaintiffs’ favor carries the day.
4 * * *
5 We have considered Belneftekhim’s remaining arguments regarding the denial of 6 foreign sovereign immunity and the imposition of discovery sanctions and conclude that 7 they are without merit. Accordingly, we find no error in the District Court’s rejection of 8 Belneftekhim’s claim of sovereign immunity.
9 CONCLUSION
10 For the reasons set forth above, we AFFIRM the District Court’s orders IN PART 11 insofar as they imposed sanctions on Belneftekhim and denied Belneftekhim’s motion to 12 dismiss for lack of subject-matter jurisdiction on the ground that Belneftekhim holds 13 sovereign immunity. We DISMISS the appeal IN PART for lack of appellate jurisdiction to 14 consider whether the District Court has diversity jurisdiction and whether the District Court 15 properly denied Belneftekhim’s motion to remand.
16 FOR THE COURT: 17 Catherine O’Hagan Wolfe, Clerk of Court