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finding that the Foreign Sovereign Immunities Act “may attach when a defendant becomes an instrumentality of a foreign sovereign after a suit is filed” and remanding for further fact finding on that issue
Summary of this case from Bartlett v. Societe Gen.e De Banque Au Liban Sal.Opinion
No. 21-2019 August Term, 2022
08-24-2023
Robert BARTLETT et al., Plaintiffs-Appellees, v. Dr. Muhammad BAASIRI, Movant-Appellant, Jammal Trust Bank Sal, Defendant-Appellant.
Michael Radine (Gary M. Osen, Dina Gielchinsky, and Aaron Schlanger, on the brief), Osen LLC, Hackensack, NJ, for Plaintiffs-Appellees. Mark W. DeLaquil (David B. Rivkin, Jr., Elizabeth Price Foley, and Kendall E. Wangsgard, on the brief), Baker & Hostetler LLP, Washington, DC, for Movant-Appellant and Defendant-Appellant. Lewis S. Yelin, Attorney, Appellate Staff, Civil Division, United States Department of Justice, Washington, DC (Richard C. Visek, Acting Legal Adviser, Department of State; Brian M. Boynton, Principal Deputy Assistant Attorney General; Breon Peace, United States Attorney for the Eastern District of New York; Sharon Swingle, Attorney, Civil Division, United States Department of Justice, Washington, DC, on the brief), for Amicus Curiae United States of America. Jay S. Auslander (Natalie Shkolnik, Michael Van Riper, on the brief), Wilk Auslander LLP, New York, NY, for Amicus Curiae Professor Joseph W. Dellapenna.
On Appeal from a Judgment of the United States District Court for the Eastern District of New York. (Carol Bagley Amon, Judge) Michael Radine (Gary M. Osen, Dina Gielchinsky, and Aaron Schlanger, on the brief), Osen LLC, Hackensack, NJ, for Plaintiffs-Appellees. Mark W. DeLaquil (David B. Rivkin, Jr., Elizabeth Price Foley, and Kendall E. Wangsgard, on the brief), Baker & Hostetler LLP, Washington, DC, for Movant-Appellant and Defendant-Appellant. Lewis S. Yelin, Attorney, Appellate Staff, Civil Division, United States Department of Justice, Washington, DC (Richard C. Visek, Acting Legal Adviser, Department of State; Brian M. Boynton, Principal Deputy Assistant Attorney General; Breon Peace, United States Attorney for the Eastern District of New York; Sharon Swingle, Attorney, Civil Division, United States Department of Justice, Washington, DC, on the brief), for Amicus Curiae United States of America. Jay S. Auslander (Natalie Shkolnik, Michael Van Riper, on the brief), Wilk Auslander LLP, New York, NY, for Amicus Curiae Professor Joseph W. Dellapenna. Before: Jacobs, Park, and Nardini, Circuit Judges. William J. Nardini, Circuit Judge:
The plaintiffs in this case are American service members who were wounded, and the relatives of service members who were killed or wounded, in terrorist attacks carried out in Iraq from 2004 to 2011 by proxies of the Lebanese militant group Hezbollah. In 2019, victims and their family members sued several Lebanese banks, alleging that the banks aided and abetted the attacks by laundering money for Hezbollah.
After the plaintiffs filed suit, the United States Department of the Treasury labelled one of those banks, Jammal Trust Bank (JTB), a Specially Designated Global Terrorist. That designation prompted the Banque du Liban, Lebanon's central bank, to liquidate JTB and acquire its assets. JTB then moved to dismiss the case against it, on the ground that it was now entitled to sovereign immunity as an instrumentality of Lebanon. The district court denied the motion, holding that a defendant is entitled to foreign sovereign immunity only if it possesses such immunity at the time suit is filed. JTB appealed. We hold that immunity under the Foreign Sovereign Immunities Act, 28 U.S.C. § 1604, may attach when a defendant becomes an instrumentality of a foreign sovereign after a suit is filed. We therefore vacate the district court's decision and remand for determination of whether JTB is such an instrumentality.
I. Background
Between 2004 and 2011, the Lebanese militant group Hezbollah armed and trained numerous proxy groups in Iraq with increasingly sophisticated roadside bombs, grenades, and rockets, which those groups used to kill and injure thousands of American soldiers. Hezbollah, which is a U.S.-designated Foreign Terrorist Organization, allegedly coordinated the attacks with Iran's Islamic Revolutionary Guard Corps, which supplied much of the weaponry.
On January 1, 2019, a group of American victims and their relatives sued eleven Lebanese banks, including JTB, in the United States District Court for the Eastern District of New York (Carol Bagley Amon, Judge) for allegedly laundering money for Hezbollah. They brought their claims under the Anti-Terrorism Act, 18 U.S.C. § 2333(a) and (d), as amended by the Justice Against Sponsors of Terrorism Act, Pub. L. No. 114-222, 130 Stat. 852 (2016), which authorizes suits against those who aid and abet acts of terrorism. The plaintiffs filed an amended complaint on August 2, 2019.
On August 29, 2019, the United States Department of the Treasury named JTB a Specially Designated Global Terrorist. The Treasury Department accused JTB of "brazenly enabling" Hezbollah's financial activities and posing a "direct threat to the integrity of the Lebanese financial system." Joint App'x at 881.
That designation ended things for JTB. Shut out of the dollar system, the bank was unable to trade with many of its counterparties or to carry out other business denominated in dollars. In September, the Banque du Liban, Lebanon's central bank, responded by freezing JTB's deposits and liquidating its operations. JTB is now undergoing liquidation under Lebanese law. Movant-Appellant Dr. Muhammad Baasiri is the central bank's liquidator.
After the Banque du Liban took over, JTB and Baasiri, acting separately from the other defendants, moved for (1) substitution of Baasiri for JTB or, in the alternative, intervention by Baasiri, and (2) dismissal, based on (a) Baasiri's asserted sovereign immunity, (b) international comity, or (c) lack of redressability as to JTB.
The district court granted Baasiri's motion to intervene but denied the motion to substitute and the motion to dismiss. The court concluded that JTB could not raise sovereign immunity as a defense because the liquidation process began only after the plaintiffs brought their suit. It rested that conclusion on the Supreme Court's decision in Dole Food Co. v. Patrickson, 538 U.S. 468, 123 S.Ct. 1655, 155 L.Ed.2d 643 (2003), which it read to hold that "instrumentality status [must] be determined at the time suit is filed." Special App'x at 16 (quoting Dole Food, 538 U.S. at 478, 123 S.Ct. 1655). JTB and Baasiri appealed. After oral argument, we solicited the views of the United States State Department, which submitted an amicus brief.
II. Discussion
The decisive issue in this appeal is whether JTB may raise a defense of immunity under the Foreign Sovereign Immunities Act (FSIA), 28 U.S.C. §§ 1602-1611, when it alleges that immunity arose after suit was filed. We review the district court's resolution of this question of law de novo. A&B Alternative Mktg. Inc. v. Int'l Quality Fruit Inc., 35 F.4th 913, 915 (2d Cir. 2022); Rukoro v. Fed. Republic of Germany, 976 F.3d 218, 223 (2d Cir. 2020).
We have appellate jurisdiction over this appeal because the collateral order doctrine "allows an immediate appeal from an order denying immunity under the FSIA." Petersen Energía Inversora S.A.U. v. Argentine Republic & YPF S.A., 895 F.3d 194, 203 (2d Cir. 2018) (internal quotation marks omitted).
To determine the effect of the FSIA, one must know something of the system that came before it. We begin, therefore, as almost all modern discussions of foreign sovereign immunity do, with The Schooner Exchange v. McFaddon, 7 Cranch 116, 3 L.Ed. 287 (1812). In that case, Chief Justice John Marshall explained that foreign sovereigns have no inherent exemption from the power of American courts, since the "jurisdiction of the nation within its own territory is necessarily exclusive and absolute." Id. at 136. Still, he wrote, it would "degrade the dignity" of a sovereign state to have its rights adjudicated in the courts of another country, so, most countries had agreed to waive jurisdiction over foreign sovereigns. Id. at 137-40. The young United States, the Chief Justice announced, would do the same. Id. at 147.
This was a matter of "grace and comity," not power, and of "common law," not statute. Verlinden B.V. v. Cent. Bank of Nigeria, 461 U.S. 480, 486, 103 S.Ct. 1962, 76 L.Ed.2d 81 (1983); Samantar v. Yousuf, 560 U.S. 305, 311, 130 S.Ct. 2278, 176 L.Ed.2d 1047 (2010). Although district courts had subject-matter jurisdiction over suits against foreign states under the Constitution and the diversity statute, they elected not to exercise it when a defendant was entitled to immunity. See Argentine Republic v. Amerada Hess Shipping Corp., 488 U.S. 428, 437 n.5, 109 S.Ct. 683, 102 L.Ed.2d 818 (1989).
For many years, that entitlement was determined by the executive branch, not the judiciary. See Verlinden, 461 U.S. at 486-87, 103 S.Ct. 1962. In "nearly every action brought against a foreign sovereign," the State Department would submit a "suggestion of immunity" and the receiving court would surrender its jurisdiction over the case. Beierwaltes v. L'Office Federale De La Culture De La Confederation Suisse, 999 F.3d 808, 818 (2d Cir. 2021) (cleaned up).
Things started to change in 1952, when the State Department announced that it would follow the more modern "restrictive" theory of foreign sovereign immunity. Turkiye Halk Bankasi A.S. v. United States, 598 U.S. 264, 143 S. Ct. 940, 946, 215 L.Ed.2d 242 (2023). In what came to be known as the Tate Letter, the State Department explained that "the immunity of the sovereign [would be] recognized with regard to sovereign or public acts (jure imperii) of a state, but not with respect to private acts (jure gestionis)." Letter of Jack B. Tate, Acting Legal Adviser, Department of State, to Acting Attorney General Philip B. Perlman (May 19, 1952), reprinted in 26 Dep't of State Bull. 984, 984-85 (1952), and in Alfred Dunhill of London, Inc. v. Republic of Cuba, 425 U.S. 682, 711-12, 96 S.Ct. 1854, 48 L.Ed.2d 301 (1976) (Appendix 2 to opinion of the Court).
The Tate Letter threw immunity doctrine "into some disarray." Republic of Austria v. Altmann, 541 U.S. 677, 690, 124 S.Ct. 2240, 159 L.Ed.2d 1 (2004). Although the State Department continued to file suggestions of immunity, and the courts continued to respect them, "political considerations" sometimes led the State Department to support immunity when a straightforward reading of the restrictive theory would have led it to oppose. Id. Confusing things still more, if the State Department did not step in, courts made immunity determinations by themselves, "generally by reference to prior State Department decisions." Verlinden, 461 U.S. at 487, 103 S.Ct. 1962. With two branches, having different institutional considerations, deciding who should be immune and who should not, "the governing standards were," unsurprisingly, "neither clear nor uniformly applied." Id. at 488, 103 S.Ct. 1962.
Twenty-four years after the Tate Letter, Congress brought order to the chaos. It replaced the old ad hoc system with the Foreign Sovereign Immunities Act of 1976, Pub. L. No. 94-583, 90 Stat. 2891, which provided a "comprehensive set of legal standards governing claims of immunity in every civil action against a foreign state." Republic of Argentina v. NML Cap., Ltd., 573 U.S. 134, 141, 134 S.Ct. 2250, 189 L.Ed.2d 234 (2014) (internal quotation marks omitted). In doing so, it intended to "codify the restrictive theory of sovereign immunity" laid out in the Tate Letter, "which Congress recognized as consistent with extant international law." Samantar, 560 U.S. at 319-20, 130 S.Ct. 2278; see Garb v. Republic of Poland, 440 F.3d 579, 586 (2d Cir. 2006) ("Congress . . . intended to codify the Tate Letter.").
The FSIA provides that "a foreign state shall be immune from the jurisdiction of the courts of the United States and of the States except as provided" in the Act. 28 U.S.C. § 1604; Saudi Arabia v. Nelson, 507 U.S. 349, 355, 113 S.Ct. 1471, 123 L.Ed.2d 47 (1993). Any "agency or instrumentality" of a foreign state is similarly immune. 28 U.S.C. §§ 1603(a), 1604. The FSIA defines "agency or instrumentality," in relevant part, as an entity "which is an organ of a foreign state or political subdivision thereof, or a majority of whose shares or other ownership interest is owned by a foreign state or political subdivision thereof." 28 U.S.C. § 1603(b)(2).
The district court did not decide whether JTB is now an instrumentality of a foreign state under the FSIA. See Bartlett v. Société Générale de Banque au Liban SAL, No. 19-CV-00007, 2021 WL 3706909, at *8 (E.D.N.Y. Aug. 6, 2021) (noting that defendants "claim that they qualify as an 'agency or instrumentality' of Lebanon" without deciding this question).
The crucial word there—which goes a long way toward resolving this case—is is. The statute uses the present tense, and we, in the words of the Supreme Court, must give that choice "real significance." Dole Food, 538 U.S. at 478, 123 S.Ct. 1655. The parties, however, disagree on that significance. The plaintiffs argue that a "statute's use of the present tense ordinarily refers to the time the suit is filed, not the time the court rules." Appellees' Br. 46-47 (quoting TIG Ins. Co. v. Republic of Argentina, 967 F.3d 778, 783 (D.C. Cir. 2020)). JTB counters that a time-of-filing rule would violate the purposes of the FSIA. The State Department argues that here, the present tense reflects the FSIA's concern with "current political realities and relationships" and its aim that "foreign states and their instrumentalities" be given "some present protection from the inconvenience of suit as a gesture of comity." Br. of Amicus Curiae U.S. Department of State 11 (quoting Republic of Austria v. Altmann, 541 U.S. 677, 696, 124 S.Ct. 2240, 159 L.Ed.2d 1 (2004)). We think the State Department has the better of it: The most natural reading of the statute is one that gives foreign sovereigns immunity even when they gain their sovereign status mid-suit. We therefore hold that immunity under the Foreign Sovereign Immunities Act, 28 U.S.C. § 1604, may attach when a defendant becomes an instrumentality of a foreign sovereign after a suit is filed.
To see why, look first to the structure of the FSIA. The act gives foreign states immunity not only from judgments, but from process, too. It shields them from the "expense, intrusiveness, and hassle of litigation altogether." Beierwaltes, 999 F.3d at 817 (internal quotation marks omitted). We see no reason why that protection should apply only if the defendant had sovereign status from the beginning of the suit. The fact that a defendant acquired instrumentality status after the suit began will not ordinarily justify subjecting a foreign sovereign to the "inconvenience of suit." Altmann, 541 U.S. at 696, 124 S.Ct. 2240; cf. Zuza v. Off. of the High Representative, 857 F.3d 935, 938 (D.C. Cir. 2017) (concluding that foreign official immunity under the International Organizations Immunities Act, 22 U.S.C. § 288d(b), "compels prompt dismissal even when it attaches mid-litigation").
This reading is consistent with other authority and dovetails with the purposes of foreign sovereign immunity. Such immunity exists for different reasons than "other status-based immunities," including the qualified immunity accorded to many state actors. Dole Food, 538 U.S. at 478-79, 123 S.Ct. 1655. Immunity for government officers prevents "the threat of suit from crippling the proper and effective administration of public affairs." Id. at 479, 123 S.Ct. 1655 (cleaned up). "Foreign sovereign immunity, by contrast, is not meant to avoid chilling foreign states . . . in the conduct of their business but to give [them] some protection from the inconvenience of suit as a gesture of comity between the United States and other sovereigns." Id. The immunity therefore focuses on "current political realities." Altmann, 541 U.S. at 696, 124 S.Ct. 2240; see Republic of Iraq v. Beaty, 556 U.S. 848, 864, 129 S.Ct. 2183, 173 L.Ed.2d 1193 (2009) (same). What matters is whether a foreign sovereign is subject to the burdens of suit at any point before judgment.
See Straub v. A P Green, Inc., 38 F.3d 448, 451 (9th Cir. 1994) (suggesting, but not deciding, that "the FSIA may be applicable if a party that becomes a 'foreign state' after the commencement of a lawsuit promptly brings its status as a 'foreign state' to the district court's attention"); cf. Matton v. Brit. Airways Bd., Inc., No. 85 CIV. 1268, 1988 WL 117456, at *3 (S.D.N.Y. Oct. 27, 1988) (holding that a post-filing privatization of a sovereign instrumentality meant the FSIA no longer applied because the purposes of foreign sovereign immunity were no longer implicated). But see Olympia Express, Inc. v. Linee Aeree Italiane, S.p.A., 509 F.3d 347, 349-50 (7th Cir. 2007) (rejecting Matton's reasoning).
The pre-FSIA history of foreign sovereign immunity likewise suggests that immunity may kick in after a lawsuit has been filed. Take the Supreme Court's decision in Oliver American Trading Co. v. United States of Mexico, 264 U.S. 440, 44 S.Ct. 390, 68 L.Ed. 778 (1924), which illustrates the need for immunity to reflect the latest political developments. Oliver involved a breach of contract suit brought by a Delaware corporation against the government of Mexico. At the time the company filed suit, the United States did not recognize the de facto Mexican government as legitimate, but the United States established diplomatic relations while the suit was pending. Id. at 442, 44 S.Ct. 390. Once that happened, the district court held that Mexico was entitled to immunity. Id. The corporation sought review in the Supreme Court, under a statute authorizing such direct review of decisions that "present the question of jurisdiction of the District Court as a federal court." Id. The Supreme Court, however, concluded that the question of foreign sovereign immunity did not implicate "the power of the court" and transferred the appeal to this Court to proceed in the ordinary course. Id. at 442-43, 44 S.Ct. 390. We affirmed. Oliver Am. Trading Co. v. Gov't of the United States of Mexico, 5 F.2d 659, 667 (2d Cir. 1924). The upshot: In the pre-FSIA world, a defendant who gained foreign sovereign immunity after a suit was filed had to be dismissed from the case. The FSIA, as we have seen, codified the pre-existing common law. Samantar, 560 U.S. at 319-20, 130 S.Ct. 2278.
Oliver also demonstrates that immunity and jurisdiction did not necessarily rise and fall together in the pre-FSIA regime. A court could still have jurisdiction even when a defendant gained sovereign immunity after filing and the court was thereby compelled to dismiss. See Oliver, 264 U.S. at 442, 44 S.Ct. 390 (noting that the case did not implicate the constitutional or statutory power of the court to hear the case); Oliver, 5 F.2d at 667 (holding that post-filing diplomatic recognition conferred immunity on the Mexican government and required dismissal).
More recently, courts have reached the same conclusion in other immunity cases. In 2009, the Supreme Court held that when a 2003 presidential designation made an FSIA exception inapplicable to Iraq, "immunity kicked back in" and then-pending cases had to be dismissed. Beaty, 556 U.S. at 865, 129 S.Ct. 2183. Six years ago, the D.C. Circuit held that officers of international organizations entitled to immunity under the International Organizations Immunities Act (IOIA), 22 U.S.C. §§ 288 et seq., could invoke that immunity, and compel dismissal, even when they gained their status only after the suit was filed. Zuza, 857 F.3d at 938. The IOIA, we note, provides that international organizations enjoy "the same immunity from suit . . . as is enjoyed by foreign governments." 22 U.S.C. § 288a(b). And in a case involving claims against members of the Saudi ruling family, the Eleventh Circuit held that diplomatic immunity requires dismissal even when the defendant becomes a diplomat after the action commences. See Abdulaziz v. Metro. Dade County, 741 F.2d 1328, 1330 (11th Cir. 1984).
With structure, purpose, and history arrayed against them, the plaintiffs argue that Supreme Court precedent is nevertheless on their side. They contend that the Court's statement in Dole Food that "instrumentality status is determined at the time of the filing of the complaint" forecloses changes in status after filing. Dole Food, 538 U.S. at 480, 123 S.Ct. 1655. We disagree. In Dole Food, a group of farm workers from Costa Rica, Ecuador, Guatemala, and Panama sued the Dole Food Company (and several others) over alleged injuries from exposure to a chemical used as an agricultural pesticide. Id. at 471, 123 S.Ct. 1655. Some of the defendants moved to dismiss, arguing that they were instrumentalities of Israel when the alleged conduct took place, although not at the time the suit was brought. Id. at 471-72, 123 S.Ct. 1655. The Supreme Court granted certiorari to decide "whether a corporation's instrumentality status is defined as of the time an alleged tort or other actionable wrong occurred or, on the other hand, at the time suit is filed." Id. at 471, 123 S.Ct. 1655.
The answer, the Court held, is that "instrumentality status is determined at the time of the filing of the complaint," not at the time the wrong occurred. Id. at 480, 123 S.Ct. 1655. The Court reasoned that "the plain text" of § 1603(b)(2) is "expressed in the present tense," id. at 478, 123 S.Ct. 1655. It also invoked "the longstanding principle that the jurisdiction of the Court depends upon the state of things at the time of the action brought." Id. (internal quotation marks omitted). Giving the companies immunity for a status they no longer held would, the Court concluded, do nothing to advance the purpose of foreign sovereign immunity—protecting sovereigns from "the inconvenience of suit as a gesture of comity"—because, once the defendants had ceased to be instrumentalities of a foreign state, no foreign sovereign was involved. Id. at 479, 123 S.Ct. 1655.
The situation here is flipped: The defendant claims to have gained sovereign status after filing, rather than losing it before. The logic of Dole Food, applied to these facts, supports the mirror-image outcome: Although pre-suit sovereign immunity cannot be retained by a no-longer-sovereign defendant, sovereign status acquired post-filing can confer immunity. That result gives the FSIA's use of the present tense "real significance," as Dole Food instructed. 538 U.S. at 478, 123 S.Ct. 1655. It also accords with Dole Food's explanation of the purposes behind foreign sovereign immunity, which exists to protect foreign sovereigns from "the inconvenience of suit," and not, as with qualified immunity, to shape conduct ex ante. Id. at 479, 123 S.Ct. 1655.
The plaintiffs object that Dole Food gave us a clear rule, and as a lower court, we are bound by it. But opinions are not statutes. They should not be read as if they were. See Reiter v. Sonotone Corp., 442 U.S. 330, 341, 99 S.Ct. 2326, 60 L.Ed.2d 931 (1979). The Supreme Court has "often admonished that general language in judicial opinions should be read as referring in context to circumstances similar to the circumstances then before the Court and not referring to quite different circumstances that the Court was not then considering." Turkiye Halk Bankasi A.S. v. United States, 598 U.S. 264, 143 S. Ct. 940, 950, 215 L.Ed.2d 242 (2023) (internal quotation marks omitted).
Turkiye Halk Bankasi provides a nice example of the need for caution in reading broad judicial statements in the FSIA context. The case concerned the criminal prosecution of a Turkish bank for conspiring to evade U.S. sanctions. 143 S. Ct. at 943. The bank, which was wholly owned by the Republic of Turkey, argued that the FSIA gave it immunity from prosecution, claiming that no FSIA exception applied to it and pointing to the Supreme Court's statement in a 1989 case that the FSIA is the "sole basis for obtaining jurisdiction over a foreign state in federal court." Id. at 950 (quoting Argentine Republic v. Amerada Hess Shipping Corp., 488 U.S. 428, 439, 109 S.Ct. 683, 102 L.Ed.2d 818 (1989)). That language, the bank said, was definitive. But the Court, noting that Amerada Hess was a civil, not a criminal, case, concluded that its logic did not "translate to the criminal context." Id.
Read in context, the statement in Dole Food does not support the plaintiffs' position. The Dole Food court had occasion to consider only two options: setting instrumentality status at the time of the allegedly wrongful conduct or setting it at the time the suit was brought. 538 U.S. at 471, 123 S.Ct. 1655. The Court did not consider—and has not since considered—the immunity of a defendant who gains sovereign status after the suit begins. That question, as we have explained, raises quite different concerns from the ones the Court faced in Dole Food.
The plaintiffs point to two statements from this Court that they argue support their reading of Dole Food. First, in 2014, citing Dole Food, we observed in a footnote that "the court's subject matter jurisdiction and a party's instrumentality status for purposes of § 1603 are both determined at the time when the complaint is filed." European Cmty. v. RJR Nabisco, Inc., 764 F.3d 129, 143 n.15 (2d Cir. 2014), rev'd on other grounds, 579 U.S. 325, 136 S.Ct. 2090, 195 L.Ed.2d 476 (2016). The plaintiff in RJR Nabisco was the European Community (EC), which was incorporated into the European Union after the suit was brought, a change that the Court said was irrelevant given Dole Food. Id. That holding, the plaintiffs argue, ties our hands.
We disagree. For one thing, the case lacks precedential status, as the Supreme Court reversed the judgment. Even if the decision had not been reversed, the footnote's cursory incantation of Dole Food would not bind us, since the opinion's reference to "instrumentality status" related not to immunity, but only to determining diversity jurisdiction where the sovereign was a plaintiff. RJR Nabisco, 764 F.3d at 143. Because 28 U.S.C. § 1332(a)(4) creates jurisdiction over suits between "a foreign state . . . as plaintiff and citizens of a State," the district court had diversity jurisdiction only if the EC was a foreign state or an instrumentality of one. RJR Nabisco, 764 F.3d at 143. We thus considered the EC's instrumentality status to establish jurisdiction; we did not consider the EC's potential immunity, because the EC was the plaintiff. See id.
RJR Nabisco thus considered neither the effect of a post-filing change in instrumentality status on jurisdiction in a federal question case, such as this one, nor in a diversity jurisdiction suit brought against a foreign state under 28 U.S.C. § 1330, which provides diversity jurisdiction in cases against foreign states that are not immune under the FSIA.
The plaintiffs also point to a 2004 case in which we said that Dole Food had "unequivocally" held that instrumentality status under the FSIA is "determined at the time of the filing of the complaint." Abrams v. Société Nationale Des Chemins De Fer Francais, 389 F.3d 61, 64 (2d Cir. 2004). But Abrams cited Dole Food only to establish that an entity nationalized pre-suit was entitled to immunity even though the nationalization took place after the conduct at issue. Id. ("Once the railroad is encompassed by the FSIA, its prior incarnation as a private entity does not bar the statute's retroactive application."). That application of Dole Food is not at issue in this case.
Finally, the plaintiffs caution that allowing post-filing changes in sovereign status will encourage gamesmanship. Those are real concerns. Take, for example, TIG Insurance Co. v. Republic of Argentina, 967 F.3d 778 (D.C. Cir. 2020). In that case, an insurance company tried to execute a judgment against Argentina by attaching a house the country owned in Washington, D.C. Id. at 780. Argentina had listed the house for sale, but as soon as the company sought to attach the property to satisfy its judgment, Argentina took it off the market. Id. The parties then disputed whether the building was still in commercial use, and thus within one of the FSIA's exceptions. Id. The D.C. Circuit held that commercial status had to be determined at the time the attachment was filed. Id. at 782. The court noted that the relevant statute, 28 U.S.C. § 1610(a), did not use the present tense, and it worried about creating an incentive for foreign sovereigns "to halt any commercial use of a property as soon as a creditor sought to attach it." Id. at 782-83, 785. Those concerns are absent in this case. It was the U.S. designation of JTB as a terrorist organization, not any attempt by Lebanon to avoid this lawsuit, that forced the bank into liquidation and public receivership.
III. Conclusion
In sum, we hold as follows:
1. Immunity under the Foreign Sovereign Immunities Act, 28 U.S.C. § 1604, may attach when a defendant becomes an instrumentality of a foreign sovereign after a suit is filed. We remand for the district court to determine whether JTB is now such an instrumentality.
2. Given that holding, we need not reach appellants' alternative argument that the district court erred in not substituting Baasiri for JTB.
We therefore VACATE the judgment of the district court and REMAND for further proceedings consistent with this opinion.