F I L E D United States Court of Appeals Tenth Circuit UNITED STATES COURT OF APPEALS DEC 12 2000 TENTH CIRCUIT PATRICK FISHER Clerk
ORIENT MINERAL, a Nevada corporation,
Plaintiff-Counter-Defendant- Appellee, v.
DAVID YUE, aka YIAOQUN YUE; SAREN GAOWA, No. 99-4174 Defendants, (D.C. No. 98-CV-238) (District of Utah) and
BANK OF CHINA, a foreign Banking Institution doing business in the United States,
Defendant-Cross-Claimant- Appellant.
ORDER AND JUDGMENT*
Before LUCERO, Circuit Judge, McWILLIAMS, Circuit Judge, and ALLEY**, Senior
* This order and judgment is not binding precedent, except under the doctrines of law of the case, res judicata, and collateral estoppel. The court generally disfavors the citation of orders and judgments; nevertheless, an order and judgment may be cited under the terms and conditions of 10th Cir. R. 36.3.
Honorable Wayne E. Alley, Senior District Judge of the Western District of **
Oklahoma, sitting by designation. District Judge.
On April 3, 1998, Orient Mineral Company (“Orient”), a Nevada corporation, filed
a complaint in the United States District Court for the District of Utah, naming as
defendants the Bank of China (“Bank”), described in the caption of the complaint as a
foreign banking institution doing business in the United States, David Yue and Saren
Gaowa. The Bank was identified in the body of the complaint as a foreign banking
institution doing business in the United States with its main office in Los Angeles,
California.1 David Yue is described in the complaint as a citizen of the People’s Republic
of China, who was residing in Utah and owned property in Utah, and Saren Gaowa is
described as the spouse of David Yue and was also residing in Utah. It was alleged in
the complaint that jurisdiction was based on diversity of citizenship, 28 U.S.C. §§ 1331
and 1332, and that the amount in controversy exceeded $100,000.00. For the purposes of
this order and judgment, we need not set forth the four causes of action asserted by Orient
against the defendants.
After answering the complaint2, the Bank filed a motion pursuant to Fed. R. Civ. P.
On appeal, it is apparently agreed that the Bank is wholly owned by the People’s 1
Republic of China, and is therefore an agency or instrumentality of a “foreign state,” and, being such, a “foreign state” under the Foreign Sovereign Immunities Act (“FSIA”). 28 U.S.C. § 1603. 2 By amended answer, the Bank alleged, inter alia, that the district court lacked subject matter jurisdiction and personal jurisdiction over it and that the purported service of process was insufficient.
-2- 12(c) asking for judgment on the pleadings based on the following: (1) the district court
lacked subject matter jurisdiction and personal jurisdiction under FSIA, 28 U.S.C. §§
1330, 1604; (2) venue was improper under FSIA, 28 U.S.C. § 1391(f); and (3) service of
process on the Bank was insufficient under FSIA, 28 U.S.C. § 1608 and the Hague
Convention. In support of that motion the Bank filed a memorandum brief with
supporting affidavits, to which Orient filed a brief in opposition.
On July 19, 1999, the district court held that it did have subject matter jurisdiction
over the controversy, and that venue was properly in Utah, but that there was no proper
service of process on the Bank. In this latter connection, Orient had purported to serve
the Bank by serving the Chinese Consulate of the People’s Republic of China located in
San Francisco, California. The district court held that such did not comport with 28
U.S.C. § 1608(b), and that the Bank had not “waived its objections to service by filing the
pleadings it has filed to date.” The district court concluded by granting that part of the
Bank’s motion for judgment on the pleadings “to the extent that it is based upon
insufficient service of process” and in connection therewith quashed the purported service
of the Bank by service on the Chinese Consulate in San Francisco. In this regard, the
district court granted Orient 30 days within which to effect service of process pursuant to
28 U.S.C. § 1608(b), with the proviso that “if service is not accomplished within that
time, the complaint shall be deemed dismissed as against the Bank of China, without
-3- prejudice.”3 However, the district court, at the same time, went on to deny the Bank’s
motion insofar as it sought a determination by the district court that it lacked subject
matter jurisdiction.
On August 18, 1999, the Bank filed a notice of appeal wherein it appealed that part
of the district court’s order of July 19, 1999, denying the Bank’s motion for judgment on
the pleadings on the ground that the district court lacked subject matter jurisdiction under
FSIA. 28 U.S.C. § 1604. In its notice of appeal, the Bank asserted that the district
court’s order as concerns the immunity issue was “immediately appealable,” citing U.S. v.
Moats, 961 F.2d 1198 (5th Cir. 1992) and Stena Rederi AB v. Comision de Contratos del
Comite, 923 F.2d 380 (5th Cir. 1991).4
In this court, both Orient and the Bank are only concerned with the question of
whether the district court erred in concluding that it had subject matter jurisdiction under
the “direct effect” prong of FSIA’s “commercial activity” exception. 28 U.S.C. §
1605(a)(2). Our initial concern was whether we needed to address that issue, since it
appeared from the record before us that Orient had not effected valid service of process
3 On August 12, 1999, Orient filed a motion in the district court to extend the time up to and including December 31, 1999, to file its return of service of process on the Bank. That motion was granted by the district court on August 18, 1999. The record before us does not indicate that any return of service of process was filed on or before December 31, 1999, or at any time thereafter. 4 Orient did not file a cross-appeal of that part of the district court’s order of July 19, 1999, quashing its purported service of process on the Bank. Yue and Gaowa are not parties to this appeal.
-4- on the Bank. In other words, if there was no valid service of process on the Bank, we
were doubtful of any necessity to grapple with the question of subject matter jurisdiction.
Gadlin v. Sybron International Corp., 222 F.3d 797 (10th Cir. 2000). Accordingly, on
September 18, 2000, we issued an Order to Show Cause, directing the parties to show
within 30 days why this appeal should not be dismissed, and the case remanded to the
district court with directions that it vacate that part of its order of July 19, 1999, wherein
it held that there was subject matter jurisdiction. On October 17, 2000, Orient filed a
response to our show cause order. On October 23, 2000, the Bank filed a motion for
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F I L E D United States Court of Appeals Tenth Circuit UNITED STATES COURT OF APPEALS DEC 12 2000 TENTH CIRCUIT PATRICK FISHER Clerk
ORIENT MINERAL, a Nevada corporation,
Plaintiff-Counter-Defendant- Appellee, v.
DAVID YUE, aka YIAOQUN YUE; SAREN GAOWA, No. 99-4174 Defendants, (D.C. No. 98-CV-238) (District of Utah) and
BANK OF CHINA, a foreign Banking Institution doing business in the United States,
Defendant-Cross-Claimant- Appellant.
ORDER AND JUDGMENT*
Before LUCERO, Circuit Judge, McWILLIAMS, Circuit Judge, and ALLEY**, Senior
* This order and judgment is not binding precedent, except under the doctrines of law of the case, res judicata, and collateral estoppel. The court generally disfavors the citation of orders and judgments; nevertheless, an order and judgment may be cited under the terms and conditions of 10th Cir. R. 36.3.
Honorable Wayne E. Alley, Senior District Judge of the Western District of **
Oklahoma, sitting by designation. District Judge.
On April 3, 1998, Orient Mineral Company (“Orient”), a Nevada corporation, filed
a complaint in the United States District Court for the District of Utah, naming as
defendants the Bank of China (“Bank”), described in the caption of the complaint as a
foreign banking institution doing business in the United States, David Yue and Saren
Gaowa. The Bank was identified in the body of the complaint as a foreign banking
institution doing business in the United States with its main office in Los Angeles,
California.1 David Yue is described in the complaint as a citizen of the People’s Republic
of China, who was residing in Utah and owned property in Utah, and Saren Gaowa is
described as the spouse of David Yue and was also residing in Utah. It was alleged in
the complaint that jurisdiction was based on diversity of citizenship, 28 U.S.C. §§ 1331
and 1332, and that the amount in controversy exceeded $100,000.00. For the purposes of
this order and judgment, we need not set forth the four causes of action asserted by Orient
against the defendants.
After answering the complaint2, the Bank filed a motion pursuant to Fed. R. Civ. P.
On appeal, it is apparently agreed that the Bank is wholly owned by the People’s 1
Republic of China, and is therefore an agency or instrumentality of a “foreign state,” and, being such, a “foreign state” under the Foreign Sovereign Immunities Act (“FSIA”). 28 U.S.C. § 1603. 2 By amended answer, the Bank alleged, inter alia, that the district court lacked subject matter jurisdiction and personal jurisdiction over it and that the purported service of process was insufficient.
-2- 12(c) asking for judgment on the pleadings based on the following: (1) the district court
lacked subject matter jurisdiction and personal jurisdiction under FSIA, 28 U.S.C. §§
1330, 1604; (2) venue was improper under FSIA, 28 U.S.C. § 1391(f); and (3) service of
process on the Bank was insufficient under FSIA, 28 U.S.C. § 1608 and the Hague
Convention. In support of that motion the Bank filed a memorandum brief with
supporting affidavits, to which Orient filed a brief in opposition.
On July 19, 1999, the district court held that it did have subject matter jurisdiction
over the controversy, and that venue was properly in Utah, but that there was no proper
service of process on the Bank. In this latter connection, Orient had purported to serve
the Bank by serving the Chinese Consulate of the People’s Republic of China located in
San Francisco, California. The district court held that such did not comport with 28
U.S.C. § 1608(b), and that the Bank had not “waived its objections to service by filing the
pleadings it has filed to date.” The district court concluded by granting that part of the
Bank’s motion for judgment on the pleadings “to the extent that it is based upon
insufficient service of process” and in connection therewith quashed the purported service
of the Bank by service on the Chinese Consulate in San Francisco. In this regard, the
district court granted Orient 30 days within which to effect service of process pursuant to
28 U.S.C. § 1608(b), with the proviso that “if service is not accomplished within that
time, the complaint shall be deemed dismissed as against the Bank of China, without
-3- prejudice.”3 However, the district court, at the same time, went on to deny the Bank’s
motion insofar as it sought a determination by the district court that it lacked subject
matter jurisdiction.
On August 18, 1999, the Bank filed a notice of appeal wherein it appealed that part
of the district court’s order of July 19, 1999, denying the Bank’s motion for judgment on
the pleadings on the ground that the district court lacked subject matter jurisdiction under
FSIA. 28 U.S.C. § 1604. In its notice of appeal, the Bank asserted that the district
court’s order as concerns the immunity issue was “immediately appealable,” citing U.S. v.
Moats, 961 F.2d 1198 (5th Cir. 1992) and Stena Rederi AB v. Comision de Contratos del
Comite, 923 F.2d 380 (5th Cir. 1991).4
In this court, both Orient and the Bank are only concerned with the question of
whether the district court erred in concluding that it had subject matter jurisdiction under
the “direct effect” prong of FSIA’s “commercial activity” exception. 28 U.S.C. §
1605(a)(2). Our initial concern was whether we needed to address that issue, since it
appeared from the record before us that Orient had not effected valid service of process
3 On August 12, 1999, Orient filed a motion in the district court to extend the time up to and including December 31, 1999, to file its return of service of process on the Bank. That motion was granted by the district court on August 18, 1999. The record before us does not indicate that any return of service of process was filed on or before December 31, 1999, or at any time thereafter. 4 Orient did not file a cross-appeal of that part of the district court’s order of July 19, 1999, quashing its purported service of process on the Bank. Yue and Gaowa are not parties to this appeal.
-4- on the Bank. In other words, if there was no valid service of process on the Bank, we
were doubtful of any necessity to grapple with the question of subject matter jurisdiction.
Gadlin v. Sybron International Corp., 222 F.3d 797 (10th Cir. 2000). Accordingly, on
September 18, 2000, we issued an Order to Show Cause, directing the parties to show
within 30 days why this appeal should not be dismissed, and the case remanded to the
district court with directions that it vacate that part of its order of July 19, 1999, wherein
it held that there was subject matter jurisdiction. On October 17, 2000, Orient filed a
response to our show cause order. On October 23, 2000, the Bank filed a motion for
leave to file a reply to Orient’s response, which motion was granted on November 3,
2000, and its tendered reply was accepted by this court.
In its response to our Order to Show Cause Orient stated that, in accordance with
28 U.S.C. § 1608 and the Hague Convention, it had caused a summons and complaint to
be served upon the Chinese Central Authority and that the latter had “delivered” the
summons and complaint to the Bank on September 23, 1999, but that it (Orient) had not
yet received a certificate to that effect from the Chinese Central Authority. Further, in its
response, Orient went on to state that, notwithstanding the failure of the Chinese Central
Authority to return a certificate of service to it, counsel for the Bank had “agreed that the
Bank has been served.” Finally, in its response Orient stated that it had sent a letter to
that effect to the district court on December 22, 1999.
In a reply to Orient’s response, the Bank states that “[i]n fact . . . there was no
-5- ‘agreement’ by the Bank concerning service of process as alleged by Orient Mineral,”
although the Bank had decided to “not renew its dismissal motion but instead continue
with its [then pending] appeal in this Court.” Counsel for the Bank in his reply concluded
by declaring that “[n]either during my December 22, 1999 telephone conversation with
Mr. Eck [counsel for Orient] nor at any other time, have I or anyone else on behalf of the
Bank of China ‘agreed’ that service of process under the requirements of the Foreign
Sovereign Immunities Act (“FSIA”) or the Hague Convention . . . – which require more
than mere delivery of the complaint to a foreign state defendant such as the Bank of
China – has been effected on the Bank or that the Bank of China ‘considered itself so
served’.”
We are not inclined on the basis of Orient’s response to our Order to Show Cause,
and the Bank’s reply thereto, to consider whether Orient has complied with the district
court’s order that it had until December 31, 1999, to effect valid service of process on the
Bank, and, if not so served, the complaint as it related to the Bank would be “deemed
dismissed . . . without prejudice.” That question should be considered, in the first
instance, in the district court. As stated above, the record of the district court before us
shows that the district court quashed Orient’s purported service of process, i.e., service on
the Chinese Consulate in San Francisco, California, and granted Orient 30 days to effect
service of process pursuant to 28 U.S.C. § 1608, which time was later extended to
December 31, 1999. The record of the district court does not show compliance with the
-6- district court’s order to effect service by December 31, 1999, or at any time thereafter. It
is on this state of the record that we further decline to review the propriety of the district
court’s order denying the Bank’s motion to dismiss on the ground that the district court
lacked subject matter jurisdiction.
Accordingly, the appeal is dismissed and the case is remanded to the district court
with directions that it vacate, as premature, that part of its order of July 19, 1999, wherein
it held that there was subject matter jurisdiction. Further proceedings in the district court
are to be consonant with the views herein expressed.
Entered for the court,
Robert H. McWilliams Circuit Judge
-7-