United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued February 4, 2011 Decided March 15, 2011
No. 10-7040
FG HEMISPHERE ASSOCIATES, LLC,
APPELLEE
v.
DEMOCRATIC REPUBLIC OF CONGO,
APPELLANT
SOCIETE NATIONALE D'ELECTRICITE,
APPELLEE
Consolidated with 10-7046
Appeals from the United States District Court
for the District of Columbia
(No. 1:03-cv-01315)
Sharon Swingle, Attorney, U.S. Department of Justice,
argued the cause for amicus curiae United States for appellant.
With her on the brief were Tony West, Assistant Attorney
General, Ronald C. Machen Jr., U.S. Attorney, Douglas N.
Letter, Attorney, and Harold Hongju Koh, Legal Adviser, U.S.
State Department.
2
Jeremy C. Martin argued the cause for appellant. On the
briefs were Stephen F. Malouf and Jonathan A. Nockels.
Eric A. Shumsky argued the cause for appellee FG
Hemisphere Associates, LLC. With him on the brief were
Bradford A. Berenson, James W. Coleman, and Angela M.
Xenakis. Neil H. Koslowe entered an appearance.
Before: GINSBURG and GARLAND, Circuit Judges, and
SILBERMAN, Senior Circuit Judge.
Opinion for the court filed by SILBERMAN, Senior Circuit
Judge.
SILBERMAN, Senior Circuit Judge: This case, once
pared down, is really less than meets the eye. To be sure, we
encounter for the first time a contempt sanction imposed on a
foreign sovereign in a proceeding brought under the Foreign
Sovereign Immunities Act (“FSIA”). But there has been as yet
no attempt to enforce the sanction (which could prove
problematic).
FG Hemisphere’s predecessor-in-interest (which we will
refer to along with FG Hemisphere as “Hemisphere”), brought
suit against the Democratic Republic of Congo (“DRC”) under
a provision of the FSIA permitting a plaintiff to confirm an
arbitration award secured against a foreign sovereign.
Following entry of a default judgment, and after the DRC began
participating in the litigation, the district court sanctioned the
DRC for failing to respond to court-ordered discovery. The
DRC, supported by the United States as amicus, argues that such
contempt sanctions are unavailable under the FSIA, and, in any
event, are an abuse of discretion. We disagree.
I
3
In 1980, the DRC and its state-owned electric company
entered into a credit agreement with Hemisphere to finance
construction of an electric power transmission facility. The
DRC failed to make the payments required of it under the
agreement, and in 2003 Hemisphere began arbitration
proceedings for those delinquent payments, obtaining two
awards against the DRC. The DRC did not participate in
arbitration.
Hemisphere sought judicial recognition of the arbitration
awards against the DRC in 2004. Although foreign states are
generally immune from the jurisdiction of U.S. courts, 28 U.S.C.
§ 1604, the FSIA contains several exceptions to this rule. One
permits a plaintiff to bring suit against a sovereign “to confirm
an award made pursuant to . . . an agreement to arbitrate,” 28
U.S.C. § 1605(a)(6). Proceeding under this exception,
Hemisphere sued the DRC. The DRC did not appear before the
district court either to contest the court’s jurisdiction or to
litigate the merits of the arbitration award. Accordingly, the
district court entered two default judgments against the DRC.
Hemisphere then sought to execute on the judgments.
The FSIA limits the assets that are available to satisfy a
judgment against a foreign sovereign. Where “the judgment is
based on an order confirming an arbitration award,” a plaintiff
may only execute on “[t]he property in the United States of a
foreign state . . . used for a commercial activity in the United
States.” Id. § 1610(a)(6). In 2005, Hemisphere propounded
post-judgment discovery requests to identify the DRC’s
commercial property in the United States available for
execution. The DRC, by now participating in the litigation,
failed to respond to these discovery requests, and in 2006 the
district court, with the consent of both parties, imposed a two-
part discovery plan. In part one, the court required the DRC to
turn over information regarding any real property it owned
4
located in the District of Columbia. In part two, the court
required the DRC to provide information on any DRC assets
valued over $10,000 and located outside the District of
Columbia, both within the United States and in other countries
where Hemisphere might seek to execute on its judgments.
The DRC never complied with part two of the discovery
order. It produced only documents identifying real property
within the District (which it claimed were immune from
execution).1 The district court concluded, therefore, that the
DRC’s responses “fell woefully short of compliance.” FG
Hemisphere Assocs., LLC v. Democratic Republic of Congo, 603
F. Supp. 2d 1, 2 (D.D.C. 2009). In March 2009 – nearly three-
and-one-half years after Hemisphere first sought discovery and
two years after the court ordered the DRC to produce documents
in response to part two of the court’s discovery plan – the court,
on Hemisphere’s motion, found the DRC in civil contempt. It
again ordered the DRC to comply with the outstanding
discovery requests, and granted Hemisphere’s request for fees
1
These documents identified two properties that had housed DRC
diplomatic officials until the mid-1990s, when political disruptions
resulted in their removal from office, but not from the residences. The
district court entered an execution order to enforce the judgment
against these properties. Several months later, the DRC filed a motion
to quash the execution order, arguing that its failure to respond earlier
was due to “excusable neglect,” and that the properties were immune
from execution under the FSIA. The district court denied the motion;
we reversed and remanded, explaining that the DRC had shown
excusable neglect. See FG Hemisphere Assocs., LLC v. Democratic
Republic of Congo, 447 F.3d 835, 836 (D.C. Cir. 2006). We also
suggested that the properties likely were not subject to execution. See
id. at 843. Hemisphere decided not to seek enforcement of its
judgments against these properties. Nevertheless, the DRC
reproduced the documents identifying the diplomatic properties in
response to part two of the discovery order – an obvious non sequitur.
5
and expenses resulting from the DRC’s failure to comply with
its discovery obligations. The court gave the DRC thirty days
to complete discovery, or to show cause why a fine payable to
Hemisphere should not be imposed in the amount of $5,000 per
week, doubling every four weeks until reaching a maximum of
$80,000 per week, until DRC satisfied its discovery obligations.
Id. at 2-3.
Before the sanctions began accruing, the DRC moved to
vacate the contempt order, arguing that the FSIA does not
authorize contempt sanctions against foreign sovereigns. The
DRC indicated that it had asked the United States to participate
in the litigation and express its position on whether the district
court may impose sanctions on a foreign sovereign. The
government, however, did not appear before the district court.
The court denied the DRC’s motion a year later. This appeal
followed, in which the government (four years after the DRC’s
request) has filed an amicus brief supporting the DRC.
II
The DRC’s brief here embraced the government’s
amicus brief filed in a Fifth Circuit case, Af-Cap Inc. v. Republic
of Congo, 462 F.3d 417 (5th Cir. 2006), which presented a
question similar to the one we consider here. Thereafter, the
government filed its amicus brief in this case, which closely
follows its prior amicus brief. We therefore must first parse the
government’s arguments – and that is no mean feat. The
government’s position is quite confusing, conflating a contempt
order imposing monetary sanctions with an order enforcing such
an award through execution. The government emphasizes that
under the FSIA, a court is quite limited in executing a judgment
against a foreign sovereign, and that no provision of the FSIA
explicitly permits a plaintiff to execute on a sovereign’s assets
to enforce a contempt order. It argues that since the district
6
court could not enforce its civil contempt order against the DRC,
the court should not have issued it. It is unclear whether the
government is contending that the district court lacked the
power under the FSIA to issue the contempt order, or only that
equitable considerations counsel restraint, or both.
In its appeal to equity, the government advances several
considerations to illustrate why the contempt sanctions were
improper. These range from the asserted unseemliness of a
court ordering a contempt sanction it cannot enforce (and the
supposed unnecessary severity of the sanctions), to principles of
comity arising from both international practice and the
government’s international relations concerns. The government
also raises another equitable issue, one not presented by the
DRC to either the district court or to us on appeal: the discovery
order is allegedly overbroad because it seeks discovery on DRC
assets that are not available for execution under the FSIA.
Hemisphere responds that the district court has inherent
authority to issue civil contempt orders to control proceedings
– which neither the government nor the DRC really disputes –
and that the FSIA does not restrict that authority. Then, and
central to its argument, it contends that we do not have before us
even a shadow of an enforcement question; the district court has
not attempted to execute on its contempt order. Both the
government and the DRC blithely ignore this last point. Finally,
Hemisphere defends the district court’s order as within the
court’s discretion because of the DRC’s obdurate refusal to
comply with the discovery order.
* * *
The FSIA is a rather unusual statute that explicitly
contemplates that a court may have jurisdiction over an action
against a foreign state and yet be unable to enforce its judgment
7
unless the foreign state holds certain kinds of property subject
to execution. See De Letelier v. Republic of Chile, 748 F.2d
790, 798-99 (2d Cir. 1984) (plaintiff may hold a right without a
remedy under the FSIA). Otherwise a plaintiff must rely on the
government’s diplomatic efforts, or a foreign sovereign’s
generosity, to satisfy a judgment. Therefore, it is not anomalous
to divide, as Hemisphere does, the question of a court’s power
to impose sanctions from the question of a court’s ability to
enforce that judgment through execution. Hemisphere’s
contention that whether the court can enforce its contempt
sanction is irrelevant to the availability of a contempt order is
consistent with the statutory scheme.
* * *
It is incontrovertible that federal courts enjoy inherent
contempt power. See Spallone v. United States, 493 U.S. 265,
276 (1990); Young v. United States ex rel. Vuitton et Fils, S.A.,
481 U.S. 787, 795 (1987); Shillitani v. United States, 384 U.S.
364, 370 (1966). That power runs with a court’s jurisdiction,
see 11A Charles Alan Wright & Arthur R. Miller, Federal
Practice and Procedure § 2960 (2d ed. 2010), and jurisdiction
here is undeniable. Although Congress can limit that authority,
it must do so through a “clear and valid legislative command,”
Porter v. Warner Holding Co., 328 U.S. 395, 398 (1946), a
command that will not be “‘lightly assume[d],’” Chambers v.
NASCO, 501 U.S. 32, 47 (1991) (quoting Weinberger v.
Romero-Barcelo, 456 U.S. 305, 313 (1982)).
As the Seventh Circuit has recognized, there is not a
smidgen of indication in the text of the FSIA that Congress
intended to limit a federal court’s inherent contempt power.
Autotech Techs. v. Integral Research & Dev., 499 F.3d 737, 744
(7th Cir. 2007). Nor is there any legislative history supporting
such a claim. Indeed, the House Report to the FSIA
8
demonstrates that Congress kept in place a court’s normal
discovery apparatus in FSIA proceedings. See H.R. Rep. No.
94-1487, at 23 (1976) (“The bill does not attempt to deal with
questions of discovery. Existing law appears to be adequate in
this area.”). And the same report illustrates that Congress
specifically contemplated that contempt sanctions would be
available under the FSIA as a remedy for discovery violations:
[If] a private plaintiff sought the
production of sensitive governmental
documents of a foreign state, concepts of
governmental privilege would apply. Or
if a plaintiff sought to depose a diplomat
in the United States or a high-ranking
official of a foreign government,
diplomatic and official immunity would
apply. However, appropriate remedies
would be available under Rule 37, F.R.
Civ. P., for an unjustifiable failure to
make discovery.
Id. (emphasis added); see also Fed. R. Civ. P. 37(b)(2)(A)(vii)
(sanctions available for failure to abide by court-ordered
discovery).
The government points only to the testimony of a State
Department deputy legal advisor asserting that although the
FSIA does not “explicitly preclud[e] a court from imposing a
fine on a foreign state [for] failure to comply with a court
order,” the legislative history of the statute “suggests” that such
sanctions would be unavailable. Foreign Sovereign Immunities
Act: Hearing on H.R. 1149, H.R. 1689, and H.R. 1888 Before
the Subcomm. on Admin. Law and Government Relations of the
H. Comm. on the Judiciary, 100th Cong. 19 (1987), reprinted in
2 William H. Manz, Foreign Sovereign Immunities Act of 1976
9
with Amendments: A Legislative History of Pub. L. No. 94-583
(2000). But this statement seems to us to be more a wish than
an interpretation – the legislative history supports precisely the
opposite proposition. Paradoxically, the deputy legal advisor
took a different position a year earlier, urging Congress to limit
the availability of contempt sanctions against foreign states. See
Arbitral Awards: Hearing on H.R. 3106, H.R. 3137, F.R. 4342,
and H.R. 4592 Before the Subcomm. on Admin. Law and
Government Relations of the H. Comm. on the Judiciary, 99th
Cong. 52 (1986), reprinted in 1 Manz, supra.
To be sure, the Fifth Circuit in Af-Cap Inc., upon which
the government and the DRC heavily rely, held that a contempt
order requiring the Republic of Congo to pay money into the
court’s registry and send its business associates notice of an
outstanding judgment was inconsistent with the FSIA. The
court concluded that “[sections 1610 and 1611 of the FSIA]
describe the available methods of attachment and execution
against property of foreign states. Monetary sanctions are not
included.” Af-Cap, 462 F.3d at 428. Although the Seventh
Circuit in Autotech distinguished Af-Cap on the grounds that the
Fifth Circuit did not purport to decide the antecedent “power”
question, i.e. whether the statute precluded the contempt order,
see Autotech Techs., 499 F.3d at 745, it does seem to us that the
Fifth Circuit accepted the government’s litigating effort to
conflate the power to impose a contempt sanction with the
authority to enforce it (as we noted, the government apparently
filed a similarly confusing brief in that case). In any event, since
the Fifth Circuit never considered the distinction between the
two types of orders, we do not regard its decision as persuasive.2
2
The government requests that we give deference to its
conclusion that the FSIA does not permit a court to enforce a contempt
sanction. But that is not the issue before us, and in any event, the
request for deference is doctrinally unsound. Although the views of
10
We agree with the Seventh Circuit that contempt sanctions
against a foreign sovereign are available under the FSIA.
III
As we noted, both the DRC and the United States assert
that principles of equity and comity demonstrate that the district
court should not have imposed sanctions here. We review a
district court’s contempt finding and the imposed sanctions for
abuse of discretion. In re Fannie Mae Secs. Litig., 552 F.3d
814, 818 (D.C. Cir. 2009).
The government’s and the DRC’s reasons for appealing
to equitable discretion are rather insubstantial. The first – that
a court should not issue an unenforceable order – simply
quarrels implicitly with the statutory scheme, and therefore can
be easily dismissed. The second is that the district court’s
contempt order was excessive, because it is more onerous than
necessary to cure appellant’s intransigence. We do not see how
that argument can seriously be advanced in light of the DRC’s
continued intransigence. The suggestion that adverse
evidentiary presumptions could be employed seems puerile
because judgment has already been rendered. Perhaps even
more nonsensical is the government’s assertion that the district
court should have ordered “targeted discovery” as a sanction for
the DRC’s contemptuous failure to respond to discovery.
Third, the government argues, more seriously, that the
discovery order is overbroad because it seeks information on
property that is not subject to attachment or execution under the
FSIA – indeed it reaches property beyond the United States,
the United States on the meaning of FSIA “are of considerable interest
. . ., they merit no special deference.” Republic of Austria v. Altmann,
541 U.S. 677, 701 (2004).
11
outside of the district court’s jurisdiction. We simply cannot
entertain this argument because it was not raised before the
district court in opposition to the contempt order and it was not
even presented by the DRC before us; it was only raised in the
government’s amicus brief. Although, as we observe below,
there might be unusual circumstances where the government
could raise a new issue as amicus in the court of appeals, this is
certainly not one of them. It would be patently unfair to
Hemisphere, and disrespectful to the district judge, for us to
entertain such an issue first in the court of appeals. See Eldred
v. Reno, 239 F.3d 372, 378 (D.C. Cir. 2001).3
* * *
We turn to the government’s and the DRC’s comity
arguments based on international practice and, as a separate
although related matter, the government’s foreign relations
concerns. Although it may be true, as the government contends,
that at least several countries have explicitly prohibited
monetary sanctions against a foreign state for refusal to comply
with a court order, that seems quite irrelevant because our
Congress has not. And we should bear in mind that our
discovery process is extraordinarily extensive compared to that
of most foreign legal systems. See Joseph W. Dellapenna, Suing
Foreign Governments and Their Corporations 652-53 (2d ed.
2003)
The government also suggests that we should be
concerned about the consequences of affirming the district
court’s order given possible reciprocal treatment of the United
States in foreign courts. Although we often give consideration
3
If the DRC were to comply with the discovery order regarding
property in the United States, the district court might modify the
contempt order.
12
to the government’s assertion that a legal action involves
sensitive diplomatic considerations, we only defer to these views
if reasonably and specifically explained. See Altmann, 541 U.S.
at 702. The government does not explain how the United States
would be harmed if it were found in contempt under reciprocal
circumstances. The broad, generic argument that the
government offers here seems to us to be appropriately
presented to Congress – not us. The government, moreover, did
not present its foreign policy concerns to the district court. We
do recognize that there could be circumstances in which
particular pressing foreign policy concerns involving a
defendant country could affect a court’s decision, and those
concerns, depending on their timing, could justify the
government’s presenting those matters first in an amicus brief in
the court of appeals, but the government has not presented any
such argument in this case.4
IV
We hold today only that the FSIA does not abrogate a
court’s inherent power to impose contempt sanctions on a
foreign sovereign, and that the district court did not abuse its
discretion in doing so here. The district court’s order is
Affirmed.
4
The DRC also opines that the contempt sanctions may be
detrimental to the United States’s relationship with the DRC. But the
views of a party that is not the United States – even a foreign
sovereign – on the effect of a particular legal action on United States
foreign policy are not entitled to deference.