PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No: 20-1016
FRANCE.COM, INC., a California corporation,
Plaintiff – Appellee,
v.
THE FRENCH REPUBLIC; ATOUT FRANCE; THE MINISTRY FOR EUROPE
AND FOREIGN AFFAIRS; FRANCE.COM, a domain name,
Defendants – Appellants,
and
JEAN-YVES LE DRIAN, in his official capacity as the French Republic’s
Minister for Europe and Foreign Affairs; VERISIGN, INC.,
Defendants.
Appeal from the United States District Court for the Eastern District of Virginia, at
Alexandria. Liam O’Grady, Senior District Judge. (1:18-cv-00460-LO-IDD)
Argued: January 27, 2021 Decided: March 25, 2021
Before MOTZ, FLOYD and RUSHING, Circuit Judges.
Reversed and remanded with instructions by published opinion. Judge Motz wrote the
opinion, in which Judge Floyd and Judge Rushing joined.
ARGUED: John Michael Griem, Jr., CARTER LEDYARD & MULBURN LLP, New
York, New York, for Appellants. Benjamin S. Barlow, DUNLAP BENNETT & LUDWIG
PLLC, Leesburg, Virginia, for Appellee. ON BRIEF: Mark R. Colombell, Zachary D.
Cohen, John P. O’Herron, THOMPSONMCMULLAN, P.C., Richmond, Virginia;
Nicholas W. Tapert, CARTER LEDYARD & MILBURN LLP, New York, New York, for
Appellants. David Ludwig, DUNLAP BENNETT & LUDWIG PLLC, Leesburg, Virginia;
Eve J. Brown, C. Alexander Chiulli, BARTON GILMAN LLP, Providence, Rhode Island,
for Appellee.
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DIANA GRIBBON MOTZ, Circuit Judge:
This appeal involves a dispute as to the ownership of the domain name
. In 1994, a California corporation, France.com, Inc. (“the Corporation”)
purchased and registered the domain name and trademarks for
“France.com.” Twenty years later, the Corporation initiated a lawsuit in France alleging
that a Dutch company’s use of the France.com trademark constituted trademark
infringement. The French Republic and its tourism office intervened, seeking to protect
their country’s identity on the Internet and establish its right to the domain name
. Following extensive litigation, French trial and appellate courts declared
the French Republic the rightful owner of the domain name.
The Corporation then filed this action in federal district court against the French
entities, which moved to dismiss the case, asserting sovereign immunity under the Foreign
Sovereign Immunities Act (“FSIA”), 28 U.S.C. § 1604. After the district court denied the
motion, concluding that entitlement to immunity “would be best raised after discovery has
concluded,” the French entities timely appealed. For the reasons that follow, we reverse
the judgment of the district court and remand the case with instructions to dismiss the
complaint with prejudice.
I.
A.
In 1994, Jean-Noel Frydman purchased and registered the domain name
, which sold various services relating to travel in France, including tours and
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lodging. Frydman incorporated his business in California as France.com, Inc. and assigned
his interest in the domain name to the California corporation. He also trademarked
“France.com” in the United States and in the European Union.
In May 2014, the Corporation sued a Dutch company in the Tribunal de Grande
Instance de Paris (“Paris District Court”), alleging trademark infringement and seeking
transfer of trademarks containing the words “France.com.” In April 2015, the French
Republic and Atout France, its tourism agency, intervened in that litigation. They asserted
the exclusive right to use the term “France” commercially, contending that under French
law, the name “France” cannot be appropriated or used commercially by a private
enterprise because doing so violates the French Republic’s exclusive right to its name and
infringes on its sovereignty. They further asserted that “France” expresses the country’s
“geographic, historic, economic and cultural identity.” The Corporation opposed the
attempt to intervene.
In November 2015, the Paris District Court permitted intervention and agreed with
the French entities that the Corporation’s use of the domain name “infringes the rights of
the French State to its name, which refers to a sovereign state and identifies [the] country.”
The court concluded that the transfer of the domain name to the French
Republic was appropriate.
The Corporation appealed to the Cour d’Appel de Paris (“Paris Court of Appeals”),
which on September 22, 2017, affirmed the order of the Paris District Court. The Paris
Court of Appeals explained that “the designation ‘France’ constitutes for the French State
an element of identity akin to the family name of a natural person.” The Corporation then
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appealed to the Cour de Cassation (“French Supreme Court”), where we are told the case
is now pending.
In March 2018, the French entities presented a copy of the Paris Court of Appeals
decision to the domain name registrar Web.com — which was then hosting
— and Web.com transferred the domain name to Jean-Yves Le Drian, the Minister of
Europe and Foreign Affairs of the French Republic.
B.
A month later, the Corporation filed this action in the District Court for the Eastern
District of Virginia against the French Republic, Atout France, the Ministry for Europe and
Foreign Affairs, Le Drian, the domain name , and the domain registry
Verisign, Inc. The Corporation alleged that the defendants engaged in cybersquatting and
reverse domain name hijacking in violation of the Anticybersquatting Consumer Protection
Act, trademark infringement, federal unfair competition, and expropriation.
The Corporation voluntarily dismissed the claims against Verisign. The French
Republic, Atout France, the Ministry for Europe and Foreign Affairs, and
moved to dismiss, arguing that the Corporation failed to state a claim upon which relief
could be granted and that they possessed sovereign immunity under the FSIA. The district
court concluded that entitlement to FSIA immunity “would best be raised after discovery
has concluded,” but granted the motion to dismiss for failure to state a claim without
prejudice and invited the Corporation to file an amended complaint. When the French
entities noted an appeal, we dismissed for lack of jurisdiction. France.com, Inc. v. The
French Republic et al., No. 19-1659 (4th Cir. Aug. 27, 2019) (ECF No. 23). Because the
5
district court’s dismissal was without prejudice, we concluded that it was neither a final
order nor an appealable interlocutory or collateral order. See Goode v. Cent. Va. Legal Aid
Soc’y, Inc., 807 F.3d 619, 623–24 (4th Cir. 2015).
Soon after, the Corporation filed an amended complaint and the French Republic,
Atout France, the Ministry for Europe and Foreign Affairs, and again
moved to dismiss. They did not assert that the Corporation failed to state a claim but
instead relied on their asserted entitlement to FSIA immunity. The district court dismissed
the claims against Le Drian after the United States filed a “Suggestion of Immunity.”
However, the court refused to dismiss the action as to the other defendants, again reasoning
that possible FSIA immunity did “not call for dismissal at this time” but “would be best
raised after discovery has concluded.” The French Republic, Atout France, the Ministry
for Europe and Foreign Affairs, and (collectively, the “French State”) then
noted this appeal.
II.
In a preliminary motion, the Corporation again challenged our jurisdiction to hear
the French State’s appeal. We concluded that we have jurisdiction over the instant appeal
because the district court rested its order not on a failure to state a claim but solely on a
denial of sovereign immunity, which constitutes an appealable collateral order.
France.com, Inc. v. The French Republic, et al., No. 20-1016 (4th Cir. March 27, 2020)
(ECF No. 25); see Abelesz v. Magyar Nemzeti Bank, 692 F.3d 661, 667 (7th Cir. 2012)
(“[W]e and other circuits treat denials of sovereign immunity defenses as appealable
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collateral orders.”). We review de novo the district court’s denial of sovereign immunity
under the FSIA. Wye Oak Tech., Inc. v. Republic of Iraq, 666 F.3d 205, 212 (4th Cir.
2011).
We first address the district court’s concern that its final decision on sovereign
immunity should be postponed pending discovery. The Supreme Court has instructed that
the existence of sovereign immunity under the FSIA constitutes a “threshold” question.
See, e.g., Verlinden B.V. v. Cent. Bank of Nigeria, 461 U.S. 480, 493 (1983). While
jurisdictional discovery can sometimes be appropriate, it cannot “supplant the pleader’s
duty to state those facts at the outset of the case.” Arriba Ltd. v. Petroleos Mexicanos, 962
F.2d 528, 534 n.17 (5th Cir. 1992). Indeed, because the FSIA seeks to “free a foreign
sovereign from suit,” immunity should be addressed “as near to the outset of the case as is
reasonably possible.” Bolivarian Republic of Venezuela v. Helmerich & Payne Int’l
Drilling Co., 137 S. Ct. 1312, 1317 (2017).
The FSIA provides that a “foreign state” enjoys immunity “from the jurisdiction of
the courts of the United States” unless a specific, enumerated exception applies. 28 U.S.C.
§ 1604; OBB Personenverkehr AG v. Sachs, 577 U.S. 27, 31 (2015). The Corporation does
not contend that any of the remaining defendants fails to qualify as a “foreign state” within
the meaning of the FSIA. See id. § 1603(a), (b) (“foreign state” includes “an agency or
instrumentality of a foreign state”). Thus, the defendants are “presumptively immune from
the jurisdiction of United States.” Sachs, 577 U.S. at 31.
To overcome the FSIA presumption of immunity, a complaint must set forth
“sufficient facts to support a reasonable inference that [the] claims” satisfy one of the
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specific, enumerated exceptions in the FSIA. Rux v. Republic of Sudan, 461 F.3d 461, 468
(4th Cir. 2006). The Corporation maintains that its complaint sets forth sufficient facts to
establish two of the exceptions: the “commercial activity” exception, see 28 U.S.C.
§ 1605(a)(2), and the “expropriation” exception, see id. § 1605(a)(3). Accordingly, we
turn to consideration of those exceptions.
III.
The “commercial activity” exception strips foreign states of immunity in cases
“based upon a commercial activity carried on in the United States by the foreign state; or
upon an act performed in the United States in connection with a commercial activity of the
foreign state elsewhere; or 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). The FSIA defines “commercial
activity” as “either a regular course of commercial conduct or a particular commercial
transaction or act.” Id. § 1603(d).
The FSIA mandates that the “commercial character” of an activity “be determined
by reference to the nature of the course of conduct,” not “by reference to its purpose.” Id.
§ 1603(d). Thus, “the issue is whether the particular actions that the foreign state performs
(whatever the motive behind them) are the type of actions by which a private party engages
in ‘trade and traffic or commerce.’” Republic of Argentina v. Weltover, Inc., 504 U.S. 607,
614 (1992) (quoting Black’s Law Dictionary 270 (6th ed. 1990)). A foreign sovereign
engages in “commercial activity” only when it exercises “those powers that can also be
8
exercised by private citizens,” not when it employs “powers peculiar to sovereigns.” Id.
(quoting Alfred Dunhill of London, Inc. v. Republic of Cuba, 425 U.S. 682, 704 (1976)).
In determining whether the commercial activity exception applies here, we begin by
identifying the conduct on which the action is “based.” See Saudi Arabia v. Nelson, 507
U.S. 349, 356 (1993); see also Garb v. Republic of Poland, 440 F.3d 579, 586 (2d Cir.
2006) (noting that the “threshold step” is identifying the “act of the foreign sovereign State
that serves as the basis for plaintiffs’ claims”). To do so, we look to the “gravamen of the
complaint,” meaning the “basis” or “foundation” for it. Nelson, 507 U.S. at 357 (citing
Callejo v. Bancomer, S.A., 764 F.2d 1101, 1109 (5th Cir. 1985)). We examine the “core
of [the] suit,” that is, the “acts that actually injured” the plaintiff. Sachs, 577 U.S. at 35.
The Corporation argues that the act providing the basis for its suit is the French
State’s use of to offer links to tours, accommodations, restaurants and other
tourism resources and to sell advertisements. But study of the complaint makes clear that
the conduct that the Corporation asserts “actually injured” it is not subsequent use of the
website, but the adverse French judgment holding that properly belongs to
the French State. All asserted injuries alleged in the complaint flow from that French
judgment. Cf. Valambhia v. United Republic of Tanzania, No. 18-cv-370, 2019 WL
1440198, at *4 (D.D.C. Mar. 31, 2019), aff’d, 964 F.3d 1135 (D.C. Cir. 2020) (holding an
action for recognition of a foreign judgment was not a “commercial activity” because
courts may not “consider the underlying commercial conduct that gave rise to the foreign
judgment”).
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For example, the complaint repeatedly alleges that the French State’s use of the
website and “any commercial revenue flowing from” that use are a “direct result of [the
French State] illegally seizing the <[F]rance.com> website domain from plaintiff.” It
further alleges that the French State “illegally seiz[ed] the <[F]rance.com> website
domain”; that the French State “misused the French judicial system to seize the domain
from Plaintiff”; that the French State “lack[ed] [] authority to seize property”; and that the
French State “usurp[ed]” and “expropriated” the domain name.
As explained below, it is not at all clear that the French State’s actions in obtaining
the website in a judicial proceeding constitute a “seizure” or an “expropriation” for
purposes of the FSIA’s “expropriation” exception to immunity. But even if those actions
did constitute an “expropriation” under the FISA, they clearly do not constitute a
“commercial activity.” Rather, it is well established that a “seizure” by a foreign
government constitutes a sovereign activity. See, e.g., de Csepel v. Republic of Hungary,
714 F.3d 591, 600 (D.C. Cir. 2013) (“expropriation ‘constitute[s] a quintessentially
sovereign act’ falling outside the scope of the commercial activity exception”) (cleaned
up); Hunt v. Mobil Oil Corp., 550 F.2d 68, 73 (2d Cir. 1977) (“Expropriations . . . are
traditionally considered to be public acts of the sovereign removed from judicial
scrutiny.”). The complaint’s repeated references to the French State’s “seizure” of the
domain name makes clear that this case is “in essence based on disputed takings of
property,” and not any “subsequent treatment” of that property. Garb, 440 F.3d at 586,
588.
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Nor does it matter what motivated the French State to intervene in the French lawsuit
for purposes of the commercial activity exception. The Corporation suggests that France
sought to take control of the domain name in order to take advantage of the Corporation’s
“market share.” And the complaint quotes a French official stating that “[i]t is imperative
to take advantage of the www.france.com domain name to ensure our tourist promotion.”
But the Supreme Court has repeatedly held that the text of the FSIA requires us to examine
the nature, or the “outward form of the conduct that the foreign state performs,” rather than
the purpose, or the “reason why the foreign state engages in the activity.” Weltover, 504
U.S. at 617; see also Nelson, 507 U.S. at 361–62.
Finally, to the extent that the Corporation contends that only the transfer of the
domain name harmed it, and not the preceding court judgment, that argument too fails.
The French judgment — which was affirmed by an appellate court — provided the sole
basis for France’s request to Web.com to transfer the domain name. Without the judgment
issued by the French trial and appellate courts, there would have been no ground for the
request. In sum, none of the conduct that the Corporation alleges harmed it would have
occurred without that judgment. See Garb, 440 F.3d at 587. The Corporation’s attempt to
reframe this case as one about competitive harm in order to “evade the Act’s restrictions
through artful pleading” fails. Sachs, 577 U.S. at 36.
The Corporation’s claims arise from an adverse judgment of a foreign court — in a
proceeding initiated by the Corporation itself — resulting in the transfer of the domain
name, not any commercial activity that may have followed that transfer. Accordingly, the
commercial activity exception to FSIA immunity does not apply.
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IV.
The Corporation also invokes the “expropriation” exception to FSIA immunity. The
expropriation exception applies when property is “taken in violation of international law”
and that property is either “present in the United States in connection with a commercial
activity carried on in the United States by the foreign state” or “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). To establish the
expropriation exception, a plaintiff must show that “(1) rights in property are in issue;
(2) that the property was ‘taken’; (3) that the taking was in violation of international law;
and (4) that one of the two nexus requirements is satisfied.” Zappia Middle E. Constr. Co.
v. Emirate of Abu Dhabi, 215 F.3d 247, 251 (2d Cir. 2000).
The complaint’s factual allegations do not permit a reasonable inference that its
claims satisfy the expropriation exception. First, it is unclear whether the alleged conduct
qualifies as an “expropriation” for FSIA purposes. The French State did not engage in “the
nationalization” of the website. Id. (citing H.R. Rep. No. 94–1487, at 19 (1976), reprinted
in 1976 U.S.C.C.A.N. 6604, 6618). Nor did the French State take the property through
eminent domain. See Expropriation, Black’s Law Dictionary (11th ed. 2019) (“A
governmental taking or modification of an individual’s property rights, esp. by eminent
domain; CONDEMNATION”).
Rather, French courts held that the French State owns the word “France” because it
is integral to its identity as a nation, and so was also entitled to . The French
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courts so held after the French State intervened in litigation in France initiated by the
Corporation itself. And the French courts acted only after years of litigation. Although
the Corporation now asserts the French courts were biased, it points to nothing that suggests
it did not receive a full and fair (and lengthy) opportunity to present its position.
But even if the French judicial decree constitutes an “expropriation” for purposes of
the FSIA, the Corporation fails to identify any international law that this “expropriation”
violated. See Fed. Republic of Germany v. Philipp, 141 S. Ct. 703, 715 (2021) (holding
that the international law of property governs whether a foreign sovereign committed a
taking in violation of international law). The Corporation argues repeatedly that the French
court applied French law in a way that conflicts with or is “hostile to” the laws of the United
States. Even if this is accurate, it does not demonstrate a violation of international law, as
is required to satisfy the expropriation exception to FSIA immunity. Id. at 714 (“United
States law governs domestically but does not rule the world.” (citing Kiobel v. Royal Dutch
Petroleum Co., 569 U.S. 108, 115 (2013)).
The Corporation also asserts that the French courts had no authority to declare the
domain name the property of the French State. The Corporation claims that
the order doing so is “specious” and was rendered absent “legitimate legal process.” Other
than assertedly reaching a result contrary to the laws of the United States, the Corporation
does not explain or even allege how this is so. The French courts are courts of competent
jurisdiction. Neither in its amended complaint nor its brief does the Corporation assert
facts supporting a claim that the French legal process was not “legitimate.” Moreover, this
would seem to be a difficult and unlikely claim given that the Corporation itself invoked
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the power of the French courts. Only because it did so could the French State intervene in
that action to obtain the result challenged here.
In short, the Corporation has alleged no “expropriation” in violation of international
law, and thus the expropriation exception to the FSIA also does not apply. *
V.
For the foregoing reasons, we reverse the judgment of the district court. We remand
the case with instructions to dismiss with prejudice for lack of subject matter jurisdiction
under the FSIA.
REVERSED AND REMANDED WITH INSTRUCTIONS
*
The Corporation’s brief argument that a United States court can exercise in rem
jurisdiction over the domain name also fails. Under the FSIA, foreign
property is immune from pre-judgment arrest unless three conditions are satisfied: the
property is “used for a commercial activity in the United States”; the foreign state “has
explicitly waived its immunity from attachment prior to judgment”; and the purpose of the
attachment is to “secure satisfaction of a judgment” that may be entered against the foreign
state, and “not to obtain jurisdiction.” 28 U.S.C. §§ 1609, 1610(d)(1), (2). France has
certainly not waived immunity, and the Corporation seeks arrest of to obtain
jurisdiction. Thus, the Corporation asserts no basis for in rem jurisdiction.
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France.com, Inc. v. The French Republic
Combined Opinion