Peterson v. Islamic Republic of Iran

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT

DEBORAH D. PETERSON, 
Plaintiff-Appellant,
v.
ISLAMIC REPUBLIC OF IRAN,
Defendant,
v.
WORLD BANK, No. 08-17756
Movant,
v.  D.C. No.
3:08-mc-80030-JSW
CMA CGM, OPINION
Third-party-defendant-Appellee,
and
JAPAN BANK FOR INTERNATIONAL
COOPERATION; A.P. MOLLER-
MAERSK A/S; MEDITERRANEAN
SHIPPING COMPANY,
Third-party-defendants.

Appeal from the United States District Court
for the Northern District of California
Jeffrey S. White, District Judge, Presiding

Argued and Submitted
December 10, 2009—San Francisco, California

Filed December 3, 2010

Before: Betty B. Fletcher, Sidney R. Thomas, and
N. Randy Smith, Circuit Judges.

19243
19244 PETERSON v. CMA CGM
Opinion by Judge B. Fletcher;
Dissent by Judge N.R. Smith
 PETERSON v. CMA CGM 19247

COUNSEL

David J. Cook, Robert J. Perkiss, and Nathaniel L. Dunn, San
Francisco, California, for the plaintiff-appellant.

Peter Buscemi and Matthew S. Weiler, San Fransisco, Cali-
fornia, for appellee CMA CGM.

Joan E. Donoghue, Acting Legal Adviser, and Ron B. Kat-
wan, Attorney Advisor, Department of State, Tony West,
Assistant Attorney General, Douglas N. Letter, and Sharon
Swingle, Department of Justice, Washington, District of
Columbia, for amicus curiae United States.

OPINION

B. FLETCHER, Circuit Judge:

Plaintiffs obtained a default judgment against Iran for
$2,656,944,877. When it became clear that Iran was not going
to comply with the judgment, plaintiffs moved the district
19248 PETERSON v. CMA CGM
court to order Iran to assign to the plaintiffs, as judgment
creditors, Iran’s rights to payment from CMA CGM. CMA
CGM is a French shipping company that allegedly frequents
Iranian ports and pays Iran for use of its harbors and for pro-
viding its ships with bunkering oil. The district court raised
the issue of foreign sovereign immunity even though Iran did
not appear to assert that defense, and the court denied plain-
tiffs’ assignment motion on the basis that Iran’s rights to pay-
ment from CMA CGM are immune under the Foreign
Sovereign Immunities Act (“FSIA”). We affirm.

I. Factual and Procedural Background

On October 23, 1983, Ismalal Ascari drove a truck carrying
a large explosive device into the U.S. Marine barracks in Bei-
rut, Lebanon. Ascari crashed through a wire fence and wall of
sandbags, drove into the center of the compound, and deto-
nated the explosives, killing 241 American servicemen and
injuring many others. Peterson v. Islamic Republic of Iran
(Peterson I), 264 F. Supp. 2d 46, 56, 58 (D.D.C. 2003). The
suicide bombing was the most deadly terrorist attack against
Americans prior to September 11, 2001. Id. at 47-48. Evi-
dence later surfaced that Hezbollah was responsible for the
attack, which it carried out with “massive material and techni-
cal support from the Iranian government.” Id. at 58.

In 2001, family members of the deceased servicemen and
injured survivors brought suit against Iran in the District
Court for the District of Columbia. Their complaint included
claims for wrongful death, battery, assault, and intentional
infliction of emotional distress. Id. at 48. Despite being prop-
erly served, Iran failed to respond to the complaint. Id. After
a two-day bench trial,1 Judge Lamberth found that Iran pro-
1
A district court generally does not have to conduct a trial before it can
enter a default judgment against a defendant who fails to appear. How-
ever, the FSIA requires a plaintiff to “establish[ ] his claim or right to
relief by evidence that is satisfactory to the court” before a default judg-
ment may be entered against a foreign state defendant. 28 U.S.C.
§ 1608(e).
 PETERSON v. CMA CGM 19249
vided significant financial and logistical support to Hezbollah
in connection with the Beirut bombing and was thus liable to
the plaintiffs for compensatory damages. Id. at 61. Because of
the large number of plaintiffs — at that point, almost one
thousand — Judge Lamberth directed special masters to deter-
mine the amount of damages owed to each plaintiff. Peterson
v. Islamic Republic of Iran (Peterson II), 515 F. Supp. 2d 25,
37 (D.D.C. 2007). On September 7, 2007, he entered a default
judgment for the plaintiffs in the total amount of
$2,656,944,877. Id. at 60-66.

Plaintiffs registered their multi-billion dollar judgment in
the District Court for the Northern District of California pur-
suant to 28 U.S.C. § 1963. They then submitted fifteen assign-
ment motions to the district court, each naming a different
shipping company that allegedly owed payment to Iran. Judge
White elected to consider the motion concerning CMA CGM
first. Plaintiffs alleged that CMA CGM, a French shipping
company, frequents the Iranian port of Bandar Abbas, as evi-
denced by the shipping routes displayed on the CMA CGM
website. They presented evidence that the Ports & Shipping
Organization of Iran charges tariffs on shipping lines that use
its ports, and the National Iranian Oil Products Distribution
Company sells oil to ships that berth in Iranian ports. The
Ports & Shipping Organization and the National Iranian Oil
Products Distribution Company are, respectively, agencies
under the control of the Iranian Ministry of Roads and Trans-
portation and the Ministry of Petroleum. Plaintiffs moved the
court to order Iran to assign to the plaintiffs, as judgment
creditors, Iran’s rights to payment from CMA CGM.

Though Iran did not appear to assert a sovereign immunity
defense to assignment, Judge White raised the issue of immu-
nity sua sponte. He held that the FSIA abrogated the immu-
nity of all Iranian “property in the United States,” 28 U.S.C.
§ 1610(a), and that the plaintiffs had failed to identify any
such property. He held further that, even if Iran’s rights to
payment from CMA CGM were considered property located
19250 PETERSON v. CMA CGM
in the United States, he could not assign those rights to the
plaintiffs because they had not properly served Iran with the
assignment motion. Accordingly, Judge White denied the
motion.

II. Jurisdiction

[1] The Foreign Sovereign Immunities Act provides “the
sole basis for obtaining jurisdiction over a foreign state in our
courts.” Argentine Republic v. Amerada Hess Shipping Corp.,
488 U.S. 428, 434 (1989); see also 28 U.S.C. § 1330. Unless
a specified exception to foreign sovereign immunity applies,
this court lacks jurisdiction. See Saudi Arabia v. Nelson, 507
U.S. 349, 355 (1993); Corzo v. Banco Central de Reserva del
Peru, 243 F.3d 519, 522 (9th Cir. 2001) (“The [FSIA] con-
flates the usually distinct questions of sovereign immunity,
subject matter jurisdiction, and personal jurisdiction.”).

[2] Under the terrorist act exception, a foreign state shall
not be immune from suit in any case “in which money dam-
ages are sought against a foreign state for personal injury or
death that was caused by an act of torture, extrajudicial kill-
ing, aircraft sabotage, hostage taking, or the provision of
material support or resources for such an act.” 28 U.S.C.
§ 1605A(a)(1) (original version at 28 U.S.C. § 1605(a)(7)
(2000)).2 The foreign state defendant must have been desig-
2
Section 1083 of the National Defense Authorization Act for Fiscal
Year 2008, Pub. L. No. 110-181, § 1083, 122 Stat. 3, 338-44, repealed the
original terrorist act exception, 28 U.S.C. § 1605(a)(7) (2000), and
replaced it with a new and nearly identical exception, 28 U.S.C. § 1605A.
The Authorization Act also expanded the category of foreign sovereign
property that can be attached; judgment creditors can now reach any U.S.
property in which Iran has any interest, 28 U.S.C. § 1610(g), whereas
before they could reach only property belonging to Iran, 28 U.S.C.
§ 1610(a)(7). Plaintiffs in this case failed to re-file their actions under the
new § 1605A terrorism exception and cannot take advantage of new
§ 1610(g). See In re Islamic Republic of Iran Terrorism Litig., 659 F.
Supp. 2d 31, 67 (D.D.C. 2009). The 2008 changes do not impact this case
because plaintiffs rely entirely on § 1605(a)(7).
 PETERSON v. CMA CGM 19251
nated a state sponsor of terrorism by the State Department
either at the time the terrorist act occurred or as a result of that
act, the claimant or the victim must be a U.S. national, and the
foreign state must have been given an opportunity to arbitrate
if the terrorist act occurred in its own territory. 28 U.S.C.
§ 1605A(a)(2) (original version at 28 U.S.C. § 1605(a)(7)(A)-
(B) (2000)).

[3] All four jurisdictional requirements are met here. First,
like the action that established Iran’s liability, this follow-on
suit to enforce the judgment is an action in which money
damages are sought against a foreign state. See Peterson v.
Islamic Republic of Iran (Peterson III), 563 F. Supp. 2d 268,
272 (D.D.C. 2008) (citing Flatow v. Islamic Republic of Iran,
74 F. Supp. 2d 18, 20 (D.D.C. 1999)). Second, plaintiffs seek
damages for personal injury and death resulting from Iran’s
provision of material support to Hezbollah in connection with
the Marine barracks bombing. See Peterson I, 264 F. Supp. 2d
at 58. Third, Iran was designated a state sponsor of terrorism
January 19, 1984, largely because of that attack. See id. at 51
n.7; 50 U.S.C. app. 2405(j)(3); 49 Fed. Reg. 2836-02 (Jan. 23,
1984) (notice from George P. Shultz, Secretary of State, des-
ignating Iran a state sponsor of terrorism); Kenneth Katzman,
Congressional Research Service, Iran: Current Developments
and U.S. Policy 6 (Jan. 14, 2000). Fourth, District Judge Lam-
berth established that each of the victims of the Beirut bomb-
ing was a U.S. national before awarding the plaintiffs over
$2.6 billion in damages. See Peterson II, 515 F. Supp. 2d at
40 n.4. Finally, the bombing took place in Lebanon, not Iran,
therefore the plaintiffs were not required to arbitrate their
claims before bringing suit in federal court. Jurisdiction exists
under FSIA’s terrorist act exception.

[4] Though the District Court for the Northern District of
California did not enter the default judgment against Iran, it
had jurisdiction to enforce that judgment. A judgment creditor
may bring an action to enforce a judgment in any district
court. See, e.g., Hilao v. Estate of Marcos, 536 F.3d 980, 983
19252 PETERSON v. CMA CGM
(9th Cir. 2008). When a final judgment from one district court
is registered with another district court pursuant to § 1963, the
registered judgment must be treated like any other judgment
entered by the registering court. 28 U.S.C. § 1963.

III. Discussion

A. Sua Sponte Consideration of Immunity from
Execution

[5] Plaintiffs contend that foreign sovereign immunity
from execution is an affirmative defense that should have
been pleaded and proved by Iran; therefore, the district court
erred by raising the issue of immunity sua sponte and denying
the CMA CGM assignment motion on that basis. Few courts
have squarely addressed the question of who may raise the
issue of immunity from execution, and those that have are
divided. One district court has held that immunity is an affir-
mative defense that can only be asserted by a foreign state
defendant. Rubin v. Islamic Republic of Iran, 436 F. Supp. 2d
938, 941 (N.D. Ill. 2006), appeal docketed, No. 08-2805 (7th
Cir. July 21, 2008). The Fifth Circuit has disagreed and held
that, when a court is asked to attach the property of a foreign
state, it must raise and decide the issue of immunity from exe-
cution on its own initiative. See FG Hemisphere Assocs., LLC
v. Republique du Congo, 455 F.3d 575, 590-91 (5th Cir.
2006); Walker Int’l Holdings Ltd. v. Republic of Congo, 395
F.3d 229, 233 (5th Cir. 2004) (“Neither 28 U.S.C. § 1610(a)
nor (b) requires the presence of the foreign sovereign . . . .”);
see also Letelier v. Republic of Chile, 748 F.2d 790, 792-93
(2d Cir. 1984) (deciding whether New York assets of Chilean
national airline were immune from attachment even though
Chile had steadfastly refused to participate in the liability and
enforcement proceedings); Rubin v. Islamic Republic of Iran,
456 F. Supp. 2d 228, 232-33 & nn.3-4 (D. Mass. 2006), on
reconsideration in part, 541 F. Supp. 2d 416 (D. Mass. 2008).
We agree with the Fifth Circuit and, accordingly, affirm the
 PETERSON v. CMA CGM 19253
district court’s order denying the plaintiffs’ assignment
motion.

The Foreign Sovereign Immunities Act has two major com-
ponents. The first establishes the general rule that “a foreign
state shall be immune from the jurisdiction of the courts of the
United States,” 28 U.S.C. § 1604, and carves out several
exceptions to immunity from suit, id. §§ 1605-1605A. The
second establishes that “property in the United States of a for-
eign state shall be immune from attachment[,] arrest and exe-
cution,” id. § 1609, and carves out several exceptions to
immunity from execution, id. §§ 1610-1611. The pertinent
exception, for our purposes, provides that commercial prop-
erty belonging to a foreign state that is located in the United
States may be attached in aid of execution of a judgment that
“relates to a claim for which the foreign state is not immune
from suit under section 1605A.” 28 U.S.C. § 1610(a)(7). Sec-
tion 1605A, which was previously codified at 18 U.S.C.
§ 1605(a)(7) (2000), is the terrorist act exception to immunity
from suit.

[6] Sections 1609 & 1610 state that immunity from execu-
tion and certain exceptions to that immunity exist. They are
silent as to who has the burden of pleading and proving
immunity from execution, or whether a court may decide
immunity sua sponte. See Joseph W. Dellapenna, Suing For-
eign Governments 753 (2d ed. 2003) (“Significantly lacking
from section 1610(c) is any mention of who has the burdens
of pleading and proving an exception to the presumed immu-
nity from execution or its lack.”). We must look to the struc-
ture, history, and purpose of the FSIA for guidance. See
generally Samantar v. Yousuf, 130 S. Ct. 2278 (2010) (con-
sidering the history and purpose of the FSIA in determining
whether defendant qualified as a foreign state).

Although the Ninth Circuit has not previously decided who
may raise the defense of immunity from execution, we have
addressed that question in the context of immunity from suit.
19254 PETERSON v. CMA CGM
Section 1604 creates a “statutory presumption that a foreign
state is immune from suit.” Randolph v. Budget Rent-A-Car,
97 F.3d 319, 324 (9th Cir. 1996). To trigger this presumption,
the defendant must make a prima facie case that it is a foreign
state. See Phaneuf v. Republic of Indon., 106 F.3d 302, 305
(9th Cir. 1997), cert. denied, 535 U.S. 987 (2002); see also In
re Terrorist Attacks on September 11, 2001, 538 F.3d 71, 80
(2d Cir. 2008), abrogated on other grounds by Samantar, 130
S. Ct. at 2284 & n.4. The presumption also applies if it is
apparent from the pleadings or uncontested that the defendant
is a foreign state, as in this case. See Phaneuf, 106 F.3d at
306; see also Butler v. Sukhoi Co., 579 F.3d 1307, 1313 n.8
(11th Cir. 2009); Big Sky Network Can., Ltd. v. Sichuan Pro-
vincial Gov’t, 533 F.3d 1183, 1189 (10th Cir. 2008); Robin-
son v. Gov’t of Malay., 269 F.3d 133, 141 n.7 (2d Cir. 2001).
Once the court has determined that the defendant is a foreign
state, “the burden of production shifts to the plaintiff to offer
evidence that an exception applies.” Phaneuf, 106 F.3d at 307
(citing Randolph, 97 F.3d at 324); In re Terrorist Attacks, 538
F.3d at 80 (citing Cargill Int’l S.A. v. M/T Pavel Dybenko,
991 F.2d 1012, 1016 (2d Cir. 1993)); H.R. Rep. No. 94-1487,
at 12 (1976), reprinted in 1976 U.S.C.C.A.N. 6604, 6616
(“Once the foreign state has produced such prima facie evi-
dence of immunity, the burden of going forward would shift
to the plaintiff to produce evidence establishing that the for-
eign state is not entitled to immunity.”). If the plaintiff satis-
fies her burden of production, jurisdiction exists unless the
defendant demonstrates by a preponderance of the evidence
that the claimed exception does not apply. Phaneuf, 106 F.3d
at 307; Butler, 579 F.3d at 1313.

[7] This burden-shifting scheme, which puts most of the
weight on the plaintiff, is partly motivated by the fact that fed-
eral jurisdiction does not exist unless one of the exceptions to
immunity from suit applies. See 28 U.S.C. § 1330; Corzo v.
Banco Central de Reserva del Peru, 243 F.3d 519, 522 (9th
Cir. 2001). A court has a duty to assure itself of its own juris-
diction, regardless of whether jurisdiction is contested by the
 PETERSON v. CMA CGM 19255
parties. Rosson v. Fitzgerald, 545 F.3d 764, 769 n.5 (9th Cir.
2008). Therefore, “even if the foreign state does not enter an
appearance to assert an immunity defense, a District Court
still must determine that immunity is unavailable.” Verlinden
B.V. v. Cent. Bank of Nigeria, 461 U.S. 480, 494 n.20 (1983);
see also Rep. of Austria v. Altmann, 541 U.S. 677, 691 (2004).
We cannot require a defendant to affirmatively plead foreign
sovereign immunity from suit, since a court must decide
immunity even if a defendant does not appear. It must fall to
the plaintiff to prove that immunity does not exist.

[8] Federal sovereign immunity from execution does not
defeat a court’s jurisdiction, therefore it is less obvious that a
court must consider immunity from execution sua sponte.
However, there are other reasons why courts have used a
burden-shifting approach to immunity from suit that apply
equally well to immunity from execution. The structure of the
FSIA — which codifies the background rule that foreign
states are immune from suit and execution, and then creates
narrow exceptions — suggest that courts must begin with the
presumption that a foreign state is immune and then the plain-
tiff must prove that an exception to immunity applies. See,
e.g., Saudi Arabia v. Nelson, 507 U.S. 349, 355 (1993)
(“Under the Act, a foreign state is presumptively immune
from the jurisdiction of United States courts; unless a speci-
fied exception applies . . . .); Export Group v. Reef Indus.,
Inc., 54 F.3d 1466, 1470 (9th Cir. 1995). So does the history
of foreign sovereign immunity in U.S. courts.

At common law, foreign states were absolutely immune
from suit and execution. In Schooner Exchange v. McFaddon,
11 U.S. (7 Cranch) 116 (1812), Chief Justice Marshall con-
cluded that a federal court lacked jurisdiction over “a national
armed vessel . . . of the emperor of France.” Id. at 146. The
opinion was read as extending absolute immunity to foreign
sovereigns as “a matter of grace and comity.” Verlinden, 461
U.S. at 486. “Following Schooner Exchange, a two-step pro-
cedure developed for resolving a foreign state’s claim of sov-
19256 PETERSON v. CMA CGM
ereign immunity . . . .” Samantar, 130 S. Ct. at 2284 (citing
Republic of Mexico v. Hoffman, 324 U.S. 30, 34-36 (1945);
Ex parte Peru, 318 U.S. 578, 587-89 (1943); Compania Espa-
nola de Navegacion Maritima, S. A. v. The Navemar, 303
U.S. 68, 74-75 (1938)). First, the State Department could file
a formal suggestion of immunity with the court on behalf of
the foreign state. See Samantar, 130 S. Ct. at 2284; Ex parte
Peru, 318 U.S. at 581. If the request was granted, the district
court dismissed the case for lack of jurisdiction. See Saman-
tar, 130 S. Ct. at 2284; Hoffman, 324 U.S. at 34; Ex parte
Peru, 318 U.S. at 588. Second, if the State Department said
nothing, a district court “ ‘had authority to decide for itself
whether all the requisites for such immunity existed.’ ”
Samantar, 130 S. Ct. at 2284 (quoting Ex parte Peru, 318
U.S. at 587); see also Hoffman, 324 U.S. at 34-35; Puente v.
Spanish Nat’l State, 116 F.2d 43 (2d Cir. 1940). In making
that determination, the district court considered “whether the
ground of immunity is one which it is the established policy
of the [State Department] to recognize.” Hoffman, 324 U.S. at
36. In this early era, courts used this two-step analysis most
often in cases where a plaintiff sought to seize a ship belong-
ing to a foreign state, Samantar, 130 S. Ct. at 2284, cases
which primarily implicated immunity from execution.

In 1952, the State Department adopted the “restrictive” the-
ory of foreign sovereign immunity, according to which immu-
nity does not apply to “cases arising out of a foreign state’s
strictly commercial acts.” Verlinden, 461 U.S. at 487. Courts
continued to defer to suggestions of immunity from the State
Department and, in the absence of any such suggestion, to
make immunity determinations themselves. See, e.g.,
Isbrandtsen Tankers, Inc v. President of India, 446 F.2d 1198,
1199 (2d Cir. 1971) (deferring to State Department); Heaney
v. Gov’t of Spain, 445 F.2d 501, 503 n.2 (2d Cir. 1971)
(deciding immunity sua sponte); Victory Transp., Inc. v. Com-
isaria General de Abastecimientos y Transportes, 336 F.2d
354, 358-359 (2d Cir. 1964) (“Where, as here, the court has
received no communication from the State Department con-
 PETERSON v. CMA CGM 19257
cerning the immunity of the Comisaria General, the court
must decide for itself whether it is the established policy of
the State Department to recognize claims of immunity of this
type.”).

The continuing practice of district courts deciding issues of
immunity sua sponte was not limited to immunity from suit.
Courts also independently resolved questions of immunity
from execution. See, e.g., Loomis v. Rogers, 254 F.2d 941
(D.C. Cir. 1958). In Loomis, the D.C. Circuit refused to per-
mit the attachment of a fund which contained proceeds from
the sale of oil owned by Italy. Id. at 942. The court relied on
the “well-established rule of international law that the public
property of a foreign sovereign is immune from legal process
without the consent of that sovereign,” which is “based upon
principles of international comity, each sovereign yielding a
portion of that absolute territorial jurisdiction which is the
attribute of every nation.” Id. at 943. There was no formal
suggestion of immunity from the State Department or the
Government of Italy, but the court explained that the “require-
ment that there be a formal suggestion of immunity applies
only in those cases where there is a question of fact as to
whether the property proceeded against is the public property
of a foreign sovereign.” Id. at 944. Because there was no
question that the fund belonged to Italy, it could not be
attached. See id.

Congress enacted the Foreign Sovereign Immunities Act in
1976 because, in part, “political considerations sometimes led
the Department to file suggestions of immunity in cases
where immunity would not have been available under the
restrictive theory.” Altmann, 541 U.S. at 690 (quotation omit-
ted). The FSIA made it the responsibility of the courts, not the
State Department, to decide issues of immunity in the first
instance. Congress essentially did away with the first step —
a suggestion from the State Department — in what used to be
a two-step immunity analysis. It did not, however, disturb the
default presumption of foreign sovereign immunity or the
19258 PETERSON v. CMA CGM
practice of courts deciding issues of immunity sua sponte in
cases where immunity is not raised by the State Department
or a foreign state even though it is clear that the defendant
was a foreign state or the property at issue belongs to a for-
eign state. This practice has clearly continued with respect to
immunity from suit, Verlinden, 461 U.S. at 493 n.20, and,
somewhat less clearly, with respect to immunity from execu-
tion. See, e.g., Letelier v. Republic of Chile, 748 F.2d 790,
792-93 (2d Cir. 1984) (deciding whether New York assets of
Chilean national airline were immune from attachment even
though Chile had steadfastly refused to participate in the lia-
bility and enforcement proceedings).

[9] Allowing courts to independently raise and decide the
question of immunity from execution is not only consistent
with historical practice, but also with the purposes underlying
the FSIA. A burden-shifting approach, unlike one that places
the burden on the foreign state to plead and prove that its
property is immune, is appropriately respectful of the “perfect
equality and absolute independence of sovereigns, and th[e]
common interest impelling them to mutual intercourse.” The
Schoooner Exchange, 11 U.S. at 137; see also Nat’l City Bank
of N.Y. v. Republic of China, 348 U.S. 356, 362 (1955)
(explaining the doctrine of foreign sovereign immunity is
based on “reciprocal self-interest[ ] and respect for the ‘power
and dignity’ of the foreign sovereign”). The FSIA was meant
to spare foreign states not only from liability on the merits but
also from the cost and inconvenience of trial. See Foremost-
McKesson, Inc. v. Islamic Republic of Iran, 905 F.2d 438, 443
(D.C. Cir. 1990) (“[S]overeign immunity is an immunity from
trial and the attendant burdens of litigation, and not just a
defense to liability on the merits.” (quotation omitted)).
Requiring the plaintiff to prove that immunity does not exist,
rather than placing the burden on the defendant foreign state,
best accomplishes that goal.

[10] These policy considerations apply more strongly in
the context of immunity from execution. “[T]he judicial sei-
 PETERSON v. CMA CGM 19259
zure of the property of a friendly state may be regarded as an
affront to its dignity and may . . . affect our relations with it.”
See Philippines v. Pimentel, 128 S. Ct. 2180, 2190 (2008)
(quotation and alteration omitted). Congress was aware that,
although the restrictive theory of sovereign immunity from
suit had become an accepted principle of international law by
the time of the FSIA’s enactment, “the enforcement of judg-
ments against foreign state property remain[ed] a somewhat
controversial subject.” H.R. Rep. No. 94-1487, at 6626; Conn.
Bank of Commerce v. Republic of Congo, 309 F.3d 240, 255
(5th Cir. 2002). Accordingly, the exceptions to immunity
from execution are more narrow than the exceptions from
immunity from suit. Congress fully intended to create rights
without remedies, aware that plaintiffs would often have to
rely on foreign states to voluntarily comply with U.S. court
judgments. See Autotech Techs. LP v. Integral Research &
Dev. Corp., 499 F.3d 737, 749 (7th Cir. 2007); Letelier, 748
F.2d at 799. In light of the special sensitivities implicated by
executing against foreign state property, courts should pro-
ceed carefully in enforcement actions against foreign states
and consider the issue of immunity from execution sua
sponte.

Our decision in Wilmington Trust v. U.S. District Court,
934 F.2d 1026 (9th Cir. 1991), is not to the contrary. In that
case, a U.S. bank tried to foreclose on a ship owned by a pri-
vate Finnish corporation. Id. at 1027. The foreign corporation
argued that FSIA applied because the lawsuit implicated a let-
ter of credit issued by Finland’s national bank. Id. at 1032.
We disagreed, holding that “Congress intended requests for
protection under the FSIA to originate from the foreign state
party.” Id. at 1033. Based on that language, plaintiffs argue
that the district court erred by not requiring Iran to raise the
issue of immunity.

However, in Wilmington Trust, Finland was not a party to
the suit and it was not clear that the ship belonged to Finland.
Id. at 1032 n.9. When a court is not certain that the property
19260 PETERSON v. CMA CGM
in question is covered by the FSIA, a foreign state must make
a prima facie case of ownership in order for the presumption
of immunity to apply. Third parties cannot invoke immunity
on behalf of a foreign state. See Republic of Philippines v.
Marcos, 806 F.2d 344, 360 (2d Cir. 1986) (holding that
defendant-appellant New York corporations who held prop-
erty on behalf of defendants Ferdinand and Imelda Marcos
could not assert foreign sovereign immunity). When it is clear
that the plaintiff seeks to execute against property owned by
a foreign state, as in this case, the presumption of immunity
is automatically triggered.3 See, e.g., Letelier, 748 F.2d at
792-93. This is also the rule for immunity from suit; we
require the defendant to make a prima facie case that it is a
foreign state only when that fact is not obvious or uncon-
tested. See supra pages 19254-55. Therefore, Wilmington
Trust supports our holding that the burden-shifting approach
to foreign sovereign immunity from suit also applies to immu-
nity from execution, and that it is the plaintiff’s burden to
prove that an exception to immunity applies if it is readily
apparent that the property at issue belongs to a foreign state.
Because plaintiffs themselves contend that the rights to pay-
ment from CMA CGM belong to Iran, the district court did
not err by raising the issue of immunity sua sponte.

3
This practice was also followed prior to the enactment of the FSIA. See
Loomis, 254 F.2d at 944 (“The requirement that there be a formal sugges-
tion of immunity applies only in those cases where there is a question of
fact as to whether the property proceeded against is the public property of
a foreign sovereign.”); Puente, 116 F.2d at 45 (explaining that a foreign
state must file a formal suggestion of immunity when it is not apparent
that it owns the property that plaintiff seeks to attach); Kunglig
Jarnvagsstyrelsen v. Dexter & Carpenter, Inc., 300 F. 891, 893-894
(D.N.Y. 1924) (“But when the party before the court as claimant or as
defendant is neither the sovereign nor his ambassador, it is now the estab-
lished rule that the claim will not be recognized, unless by diplomatic
intervention.”).
 PETERSON v. CMA CGM 19261
B. The FSIA Notice Requirements

[11] CMA CGM and the United States argue that plaintiffs
did not properly serve the default judgment on Iran. The FSIA
provides that a court may not order enforcement of a default
judgment until a copy of that judgment is “sent to the foreign
state or political subdivision in the manner prescribed for ser-
vice in this section.” 28 U.S.C. § 1610(c), § 1608(e). The
FSIA provides for four different methods of service, the third
of which is applicable here.4 Id. § 1608(a)(1)-(4). This third
method requires “sending a copy of the [default judgment],
together with a translation [of the default judgment] into the
official language of the foreign state, by any form of mail
requiring a signed receipt, to be addressed and dispatched by
the clerk of the court to the head of the ministry of foreign
affairs of the foreign state concerned.” Id. § 1608(a)(3). Ser-
vice is complete when the foreign state sends back a “signed
and returned postal receipt.” Id. § 1608(c)(2).

Counsel for plaintiffs submitted an affidavit to the District
Court for the District of Columbia informing the court that he
had mailed Manouchehr Mottaki, the Iranian Foreign Minis-
ter, copies of the default judgment, accompanying memoran-
dum opinion, and Farsi translations on November 19, 2008,
by DHL Express. He further attested that he had received an
acknowledgment of receipt signed by Manouchehr Mottaki on
January 10, 2008. See Affidavit of Service of Process of Judg-
ment Pursuant to 28 U.S.C. § 1608(e), Peterson v. Islamic
Republic of Iran, No. 1:01-cv-2094 (D.D.C. July 19, 2006).
On the basis of this affidavit, Judge Lambert entered an order
holding that plaintiffs had satisfied the service requirements
4
The four forms of service are listed in descending order of preference.
The first two are inapplicable because there is no “special arrangement for
service” between the U.S. and Iran, § 1608(a)(1), and Iran is not a party
to any “international convention on service of judicial documents,”
§ 1608(a)(2). See Ben-Rafael v. Islamic Republic of Iran, 540 F. Supp. 2d
39, 52 (D.D.C. 2008).
19262 PETERSON v. CMA CGM
of § 1608(e). See Order Permitting Execution of Judgment
Pursuant to 28 U.S.C. § 1610(c), Peterson v. Islamic Republic
of Iran, 1:01-cv-2094 (D.D.C. June 26, 2008).

[12] It is true that plaintiffs’ counsel erred by mailing a
copy of the default judgment to the Iranian Foreign Affairs
Minister himself, rather than asking the clerk of the court to
mail the papers. 28 U.S.C. § 1608(a)(3). This mistake is not
fatal. The Ninth Circuit has adopted a substantial compliance
test for the FSIA’s notice requirements; a plaintiff’s failure to
properly serve a foreign state defendant will not result in dis-
missal if the plaintiff substantially complied with the FSIA’s
notice requirements and the defendant had actual notice. See
Straub v. A P Green, Inc., 38 F. 3d 448, 453 (9th Cir. 1994).
In Straub, the Ninth Circuit excused the plaintiff’s “failure to
dispatch the complaint by the clerk of the court” because the
foreign state had “received actual notice of the lawsuit.” Id.
at 453-54. By the same token, the FSIA’s service require-
ments have been substantially complied with in this case.

CGM CMA and the United States go further and argue that
Iran should have been served with the registration of judg-
ment with the Northern District of California and the subse-
quent motion for assignment of Iran’s rights to payment from
CMA CGM. Plaintiffs’ counsel did mail their various assign-
ment motions by regular U.S. mail, apparently without deliv-
ery confirmation, to a variety of high-level Iranian officials,
including the Minister of Foreign Affairs. These papers do not
appear to have been translated into Farsi.

[13] The FSIA is quite clear what a plaintiff must serve on
a foreign state before a court may enforce a default judgment
against that state: the default judgment. Service of post-
judgment motions is not required. “Section 1608 sets forth the
exclusive procedures with respect to service on . . . a foreign
state.” H.R. Rep. 94-1487, at 6622 (emphasis added). We may
not add to those requirements. But see Autotech Technologies
LP v. Integral Research & Development Corp., 499 F.3d 737,
 PETERSON v. CMA CGM 19263
747-49 (7th Cir. 2007) (holding that the FSIA’s service provi-
sions do not cover post-judgment motions and applying the
federal rules for service instead); Rubin v. Islamic Republic of
Iran, 2008 WL 192321 (N.D. Ill. 2008) (same).5 If Congress
had intended for foreign states to receive notice of every post-
judgment motion, it would have said so. The district court
erred in concluding that it could not enforce the plaintiffs’
assignment motion because they had not complied with
FSIA’s service requirements.

C. Immunity of Iran’s Rights to Payment from CMA
CGM

[14] Having held that the district court did not err by con-
sidering Iran’s immunity from execution sua sponte, and that
the assignment motions were properly served on Iran, we
must now decide whether Iran’s rights to payment from CMA
CGM constitute “property in the United States.” 28 U.S.C.
§ 1610(a). We hold that they do not and are, therefore,
immune from execution. We affirm the district court’s denial
of plaintiffs’ assignment motion.

[15] Enforcement proceedings in federal district court are
governed by the law of the state in which the court sits, “but
a federal statute governs to the extent that it is applicable.”
5
Even if the federal service rules applied, the plaintiffs would not have
been required to serve Iran with the CMA CGM assignment motion. Fed-
eral Rule of Civil Procedure 5(a) typically requires service of an assign-
ment motion to enforce a judgment. But Federal Rule 5(a)(2) waives that
requirement for motions against a party, like Iran, who is in default for
failing to appear. Even parties who fail to appear must be served with
pleadings with new claims, Fed. R. Civ. P. 5(a)(2), but an assignment
motion is not a pleading (i.e. a complaint or an answer) nor does it contain
a new claim (but rather is an attempt to enforce an old claim). Even if the
assignment motion is construed as raising a new claim, Rule 5(a)(2) would
require service of that motion pursuant to Rule 4, and Rule 4 requires ser-
vice on foreign states pursuant to the FSIA. Fed. R. Civ. P. 4(j)(1). As
explained above, the FSIA does not require service of post-judgment
motions.
19264 PETERSON v. CMA CGM
Fed. R. Civ. P. 69(a)(1). The FSIA does not provide methods
for the enforcement of judgments against foreign states, only
that those judgments may not be enforced by resort to
immune property. See 28 U.S.C. §§ 1609-1610. Therefore,
California law on the enforcement of judgments applies to
this suit insofar as it does not conflict with the FSIA. See, e.g.,
Walker Int’l Holdings, Ltd. v. Republic of Congo, 415 F.3d
413, 415-16 (5th Cir. 2005) (applying Texas enforcement law
in a FSIA case); Hegna v. Islamic Republic of Iran, 380 F.3d
1000, 1006-07 (7th Cir. 2004) (applying Illinois law); Karaha
Bodas Co., LLC v. Perusahaan Pertambangan Minyak Dan
Gas Bumi Negara, 313 F.3d 70, 83 (2d Cir. 2002) (applying
New York law).

California enforcement law authorizes a court to “order the
judgment debtor to assign to the judgment creditor . . . all or
part of a right to payment due or to become due, whether or
not the right is conditioned on future developments.” Cal. Civ.
Proc. Code § 708.510(a). The FSIA abrogates the immunity
of all Iranian commercial property in the United States. 28
U.S.C. § 1610(a)(7). Therefore, a right to payment belonging
to Iran is assignable only if that right is located in the United
States.

A right to payment is intangible. It is difficult to assign a
location to property that by definition “lacks a physical exis-
tence.” See Black’s Law Dictionary 1233 (7th ed. 1999); Af-
Cap Inc. v. Republic of Congo, 383 F.3d 361, 371 (5th Cir.
2004). “The situs of intangibles is in truth a legal fiction, but
there are times when justice or convenience requires that a
legal situs be ascribed to them.” Severnoe Sec. Corp. v. Lon-
don & Lancashire Ins. Co., 174 N.E. 299, 300 (N.Y. 1931)
(Cardozo, J.).6 This is one of those times. To determine the
location of an intangible right to payment, we must look to
6
But see Berkey v. Third Ave. Ry. Co., 155 N.E. 58, 61 (N.Y. 1926)
(Cardozo, J.) (“Metaphors in law are to be narrowly watched, for starting
as devices to liberate thought, they end often by enslaving it.”).
 PETERSON v. CMA CGM 19265
California state law. See GP Credit Co., LLC v. Orlando Resi-
dence, Ltd., 349 F.3d 976, 979-81 (7th Cir. 2003) (applying
Wisconsin law to determine the location of a ‘chose in
action,’ an intangible form of property); Levin v. Tiber Hold-
ing Corp., 277 F.3d 243, 249 (2d Cir. 2002) (reasoning that
contractual obligations are “intangible property” and applying
New York law to determine situs).

[16] In Philippine Export and Foreign Loan Guarantee
Corp. v. Chuidian, 267 Cal. Rptr. 457 (Ct. App. 1990), the
Court of Appeal of California7 squarely held that the location
of a right to payment, at least for the purpose of applying sec-
tion 708.510(a) in a suit against a foreign state defendant, is
the location of the debtor.8 Accordingly, a foreign state defen-
dant’s rights to payment from third-party debtors are assign-
able only if those “debtors [ ] reside in the United States.” Id.
at 481. The Court of Appeal instructed the trial court to enter
an “order compelling Philguarantee,” an agency of the Philip-
pines, “to assign to Chuidian all debts owing or to become
7
The California Court of Appeal’s interpretation of California Code of
Civil Procedure section 708.510(a) is binding on the panel. See Ryman v.
Sears, Roebuck & Co., 505 F.3d 993, 994 (9th Cir. 2007) (“[W]hen (1) a
federal court is required to apply state law, and (2) there is no relevant pre-
cedent from the state’s highest court, but (3) there is relevant precedent
from the state’s intermediate appellate court, the federal court must follow
the state intermediate appellate court decision . . . .”).
8
Other states agree that the situs of a debt obligation is the location of
the debtor. See Rush v. Savchuk, 444 U.S. 320, 328 (1980) (acknowledg-
ing the “legal fiction that assigns a situs to a debt, for garnishment pur-
poses, wherever the debtor is found”); Af-Cap Inc., 383 F.3d at 373
(“[C]ourts consistently hold that the situs of a debt obligation is the situs
of the debtor.”); Alliance Bond Fund v. Grupo Mexicano De Desarrollo,
S.A., 190 F.3d 16, 25 n.9 (2d Cir. 1999) (interpreting New York law);
Great Falls Transfer & Storage Co. v. Pan Am. Petroleum Corp., 353
F.2d 348, 349 (10th Cir. 1965) (interpreting Montana and Wyoming law);
State v. W. Union Fin. Servs., Inc., 208 P.3d 218, 229 n.10 (Ariz. 2009);
Levi Strauss & Co. v. Crockett Motor Sales, Inc., 739 S.W.2d 157, 158
(Ark. 1987); Hotel 71 Mezz Lender LLC v. Falor, 926 N.E.2d 1202, 1210
(N.Y. 2010).
19266 PETERSON v. CMA CGM
owing to Philguarantee from individuals or entities located in
the United States.” Id.

[17] CMA CGM is a French corporation, therefore the
debt obligation it owes to Iran is located in France. Iran’s
rights to payment from CMA CGM are not “property in the
United States” and are immune from execution. 28 U.S.C.
§ 1610(a)(7). We affirm the district court’s denial of plain-
tiffs’ motion to assign Iran’s rights to payment from CMA
CGM.

IV. Conclusion

This case turns on the question of whether immunity from
execution is an affirmative defense that must be raised by a
foreign state. The statutory text, structure, legislative history,
and case law suggest that sua sponte consideration is appro-
priate and serves the dual goals of the FSIA: affording Ameri-
can plaintiffs with a means for bringing suit against foreign
states and ensuring that their disputes will not be resolved
based on political considerations, and also demonstrating a
proper respect for foreign states and sparing them the incon-
venience of litigation. We affirm the district court order on
the basis that Iran’s rights to payment from CMA CGM are
not “property in the United States” that are amenable to
attachment.

N.R. SMITH, Circuit Judge, dissenting:

Immunity from execution is an affirmative defense. Neither
the history of sovereign immunity nor the purpose of the
FSIA permit or require the court to address immunity from
execution sua sponte. I must therefore dissent from today’s
holding.

As a general rule, a claim of immunity is an affirmative
defense. As such, it must be affirmatively pleaded by the
 PETERSON v. CMA CGM 19267
defendant. Even though immunity “is an entitlement not to
stand trial or face the other burdens of litigation,” Saucier v.
Katz, 533 U.S. 194, 200 (2001) overruled on other grounds
by Pearson v. Callahan, 129 S. Ct. 808 (2009), the burden of
asserting it “rests with the [party] seeking it.” al-Kidd v. Ash-
croft, 580 F.3d 949, 958 (9th Cir. 2009) cert. granted
__ S. Ct. __, 2010 WL 2812283 (Oct. 18, 2010). This is true
of many forms of immunity. See 5 Wright & Miller, Federal
Practice and Procedure, § 1271, n. 57 (discussing which
issues must be raised as affirmative defenses under Fed. R.
Civ. P. 8(c)); Murphy v. Waterfront Comm’n of New York,
378 U.S. 52, (1964) (noting that when a witness receives a
promise of immunity from prosecution, the witness must
“plead and prove, as an affirmative defense, that he has
received immunity . . . .”); Gomez v. Toledo, 446 U.S. 635,
640 (1980) (“Since qualified immunity is a defense, the bur-
den of pleading it rests with the defendant.”); Aholelei v.
Dep’t of Pub. Safety, 488 F.3d 1144, (9th Cir. 2007)
(“Eleventh Amendment immunity is an affirmative defense
that must be raised early in the proceedings to provide fair
warning to the plaintiff.” (internal quotation marks and cita-
tion omitted)).

The plain language of the FSIA makes it clear that sover-
eign immunity from execution must be raised as an affirma-
tive defense. The majority acknowledges that nothing in the
language of the FSIA provides that sovereign immunity from
suit or execution may be raised sua sponte. Maj. Op. 19253.
In its entirety, § 1604 reads: “Subject to existing international
agreements to which the United States is a party at the time
of enactment of this Act a foreign state shall be immune from
the jurisdiction of the courts of the United States and of the
States except as provided in sections 1605 to 1607 of this
chapter.” 28 U.S.C. § 1604. Similarly, § 1609 makes no men-
tion that it may be raised sua sponte. It simply states: “Subject
to existing international agreements to which the United
States is a party at the time of enactment of this Act the prop-
erty in the United States of a foreign state shall be immune
19268 PETERSON v. CMA CGM
from attachment arrest and execution except as provided in
sections 1610 and 1611 of this chapter.” 28 U.S.C. § 1609.
Thus, the plain language of the statute does not provide a
means for the court to address the issue sua sponte.

The legislative history is consistent with the plain language
of the FSIA. The Supreme Court recognized that “[t]he House
Report on the Act states that ‘sovereign immunity is an affir-
mative defense which must be specially pleaded.’ ” Verlinden,
461 U.S. 476, 493 n.20 (1983) (quoting H.R. Rep. No. 94-
1487, at 17 (1976), as reprinted in 1976 U.S.C.C.A.N. 6604,
6616). The House Report continues: “the burden will remain
on the foreign state to produce evidence in support of its
claim of immunity. Thus, evidence must be produced to
establish that a foreign state or one of its subdivisions, agen-
cies or instrumentalities is the defendant in the suit and that
the plaintiff’s claim relates to a public act of the foreign state
—that is, an act not within the exceptions in sections 1605-
1607.” H.R. Rep. No. 94-1487 at 17, U.S.C.C.A.N. at 6616
(emphasis added). Congress thus required the foreign state to
assert the defense of sovereign immunity.

Congress has, however, outlined an exception to this gen-
eral rule. As the Supreme Court noted in Verlinden, the
exception is detailed in 28 U.S.C. § 1330. 461 U.S. at 493
n.20.

28 U.S.C. § 1330(a) states:

The district courts shall have original jurisdiction
without regard to amount in controversy of any non-
jury civil action against a foreign state as defined in
section 1603(a) of this title as to any claim for relief
in personam with respect to which the foreign state
is not entitled to immunity either under sections
1605-1607 of this title or under any applicable inter-
national agreement.
 PETERSON v. CMA CGM 19269
Thus in § 1330, Congress explicitly linked the question of
whether a foreign state has sovereign immunity (under 28
U.S.C. §§ 1603, 1605-07), to the question of whether the fed-
eral court would have subject matter jurisdiction. Applying
§ 1330, if a court found a foreign state was not entitled to sov-
ereign immunity (under one of the enumerated sections) then
it necessarily had subject matter jurisdiction over the action.
And, because it is clearly established that courts may address
matters of subject matter jurisdiction sua sponte, Snell v.
Cleveland, Inc., 316 F.3d 822, 826 (9th Cir. 2002), courts
would then also have the power to consider sua sponte sover-
eign immunity from suit.

28 U.S.C. § 1330(a) does not, however, mention determina-
tions of immunity from execution under 28 U.S.C. § 1609.
Therefore, such immunity remains an affirmative defense that
must be pleaded and proved by the defendant. Of course, had
Congress wished to include § 1609 in § 1330(a), it certainly
knew how to do so. See Botosan v. Paul McNally Realty, 216
F.3d 827, 832 (9th Cir. 2000). “The incorporation of one stat-
utory provision to the exclusion of another must be presumed
intentional under the statutory canon of expressio unius. . . .
Congress obviously knew how to adopt provisions of [the
FSIA] because it expressly adopted [sections 1603, 1605-07]
and it is unlikely that Congress would absentmindedly forget
to adopt a provision that appears a mere two [sections] below
the [ ]section it adopted.” Id. (internal quotation marks, alter-
ations, and citations omitted). This omission is significant,
because the failure to include § 1609 in 28 U.S.C. § 1330
requires that sovereign immunity from execution, just like
other immunities, must be pleaded as an affirmative defense.
Therefore, the plain language of the FSIA allows courts to
address the issue of sovereign immunity from suit, but not
immunity from execution, as a jurisdictional question that can
be raised sua sponte by courts.

The majority argues that there are nonetheless good reasons
for allowing courts to address this issue sua sponte. First, it
19270 PETERSON v. CMA CGM
cites cases wherein it alleges that courts addressed sovereign
immunity sua sponte even before the enactment of the FSIA,
arguing that to allow courts to do so now would be consistent
with historical practice. Maj. Op. 19255. Second, it argues
that allowing courts to resolve issues of sovereign immunity
from execution sua sponte would be consistent with the
underlying purposes of the FSIA. Maj. Op. 19258. However,
there is no basis for these propositions; no historical reasons
or underlying purposes can trump the plain language of the
statute. Moreover, the majority’s premises for those argu-
ments are also questionable.

First, the cited cases are not controlling precedent (or even
strong evidence) for this alleged historical practice. None of
the cited cases were decided in our court. Further, the hold-
ings in the three Second Circuit cases do not support the
premise. In Victory, the court did not raise the issue of sover-
eign immunity sua sponte. 336 F.2d 354. Instead, the Spanish
government specifically argued that its Ministry of Commerce
was entitled to sovereign immunity. The court noted that “[a]
claim of sovereign immunity may be presented to the court by
either of two procedures.” Id. at 358. The first involves a
request from the State Department and the second involves a
direct request from the foreign sovereign. Id. In that case, the
State Department had not made such a request, and therefore
the court had to “decide for itself whether it is the established
policy of the State Department to recognize claims of immu-
nity of this type.” Id. at 359. But, because the foreign state
had asserted sovereign immunity on its own behalf, the court
was not required to resolve the issue sua sponte.1
1
Victory, incidentally, took a very limited view of sovereign immunity.
“Sovereign immunity is a derogation from the normal exercise of jurisdic-
tion by the courts and should be accorded only in clear cases.” 336 F.2d
at 360. Therefore, “the courts should deny immunity where the State
Department has indicated, either directly or indirectly, that immunity need
not be accorded.” Id. at 358. Similarly, since Congress delegated the deci-
sion making in this area to the courts by statute, the courts should deny
immunity where Congress has indicated it should be denied—including
actions falling under § 1605(a)(7) and § 1610(a)(7).
 PETERSON v. CMA CGM 19271
Heaney similarly did not involve a court addressing sover-
eign immunity sua sponte. 445 F.2d 501. There again, the for-
eign sovereign did in fact assert immunity. Id. at 502 (“The
[Government of Spain] moved for dismissal of the complaint
on the grounds, insofar as here relevant, that the court lacked
jurisdiction by virtue of the sovereign immunity of the Span-
ish Government and the consular immunity of Gomero.”). In
the third case, Isbrandtsen Tankers, the State Department
made the request for sovereign immunity for the foreign state,
which, as the opinion notes, was the practice before the enact-
ment of the FSIA. 446 F.2d 1198. None of these cases there-
fore address whether the court may consider sovereign
immunity sua sponte.

Only in Loomis did the D.C. Circuit address sua sponte the
issue of immunity from execution.2 254 F.2d 941. Even if one
could construe this one case as establishing a historical prac-
tice, that practice was abrogated by the FSIA. Under the plain
language of the FSIA, determinations of immunity from exe-
cution (unlike determinations of immunity from suit) are not
linked to the question of subject matter jurisdiction and there-
fore cannot be addressed sua sponte.

Second, allowing courts to sua sponte address immunity
from execution would not be consistent with the underlying
purposes of the FSIA. The legislative history of the FSIA
does not in any way indicate that courts should address sover-
eign immunity sua sponte. Instead, one purpose of the FSIA
was to establish procedures that would allow successful plain-
tiffs to enforce their judgments. The FSIA “would remedy, in
part, the present predicament of a plaintiff who has obtained
2
Although Loomis did involve the seizure of assets, the context appears
to be distinguishable from the present case. Loomis was not attaching
assets in order to satisfy a judgment, but possibly to obtain jurisdiction
over the foreign state. 254 F.2d at 942. One purpose of the FSIA was to
“render unnecessary the practice of seizing and attaching the property of
a foreign government for the purpose of obtaining jurisdiction.” H.R. Rep.
No. 94-1487 at 8, U.S.C.C.A.N. at 6606.
19272 PETERSON v. CMA CGM
a judgment against a foreign state. Under existing law, a for-
eign state in our courts enjoys absolute immunity from execu-
tion, even in ordinary commercial litigation where
commercial assets are available for the satisfaction of a judg-
ment. [The FSIA] seeks to restrict this broad immunity from
execution.” H.R. Rep. No. 94-1487 at 8, U.S.C.C.A.N. at
6606. This purpose was strengthened in 1996 when the terror-
ism exception was added to the FSIA. The terrorism excep-
tion created both an exception to immunity from suit for acts
of terrorism and a coextensive exception to immunity from
execution. Antiterrorism and Effective Death Penalty Act of
1996, Pub. L. No. 104-132, § 221, 110 Stat. 1214 (codified at
28 U.S.C. § 1605(a)(7) and § 1610(a)(7)). Even if, as the
majority argues, “exceptions to immunity from execution are
more narrow than the exceptions from immunity from suit”3
and “Congress fully intended to create rights without reme-
dies,”4 Maj. Op. 19259, Congress clearly did not embrace
those arguments for victims of terrorism. Of course, such pol-
icy considerations, even if true, would not outweigh the plain
language of the statute.
3
The majority opinion cites Letelier, 748 F.2d at 799 for this proposi-
tion. Although Letelier was unable to execute against the Chilean assets
at the time of his suit, under the current version of the FSIA it appears that
he would be able to do so, because the basis of his claim was a terrorist
act (an extra-judicial killing).
4
In considering the FSIA, Congress noted several situations in which
U.S. citizens may be injured by foreign states, for example, disputes about
the purchase price or terms of a sale of goods or real estate or when a citi-
zen is struck by an automobile owned by a foreign embassy. H.R. Rep. 94-
1486 at 6-7, U.S.C.C.A.N. at 6605. An examination of the FSIA reveals
that exceptions were tailored to address those exact situations. See
§§ 1605(a)(2), 1610(a)(2), (b)(2) (relating to commercial disputes),
§§ 1605(a)(4), 1610(a)(4) (relating to property disputes), and
§§ 1605(a)(5), 1610(a)(5) (relating to tort claims). While Congress could
not, without abrogating sovereign immunity entirely, provide that property
would be available on which to execute a judgment, it does not seem that
Congress actually “intended to create rights without remedies.”
 PETERSON v. CMA CGM 19273
Furthermore, contrary to the majority’s assertion, there is
less reason to raise immunity sua sponte regarding execution
than there is regarding a suit. The purpose of immunity is gen-
erally to spare the defendant “the cost and inconvenience of
trial.”5 Foremost-McKesson, 905 F.2d at 443. However, after
a court has determined that the sovereign is not immune from
suit and enters a judgment on the merits, only the enforcement
action remains. Now, having been judged liable, the foreign
state has a concrete interest in participating to protect its inter-
ests, unlike a trial on the merits, where any liability is still
speculative.

There is no support for the majority’s assertion that the bur-
den of proving an exception to immunity from execution
should be placed on the plaintiff. The statute creates no such
burden. Contrary to the majority’s interpretation of the statute,
the FSIA does not establish one presumption, but actually
establishes two mutually exclusive presumptions. The major-
ity correctly states that there is a general presumption that the
property of foreign states is not subject to execution. 28
U.S.C. § 1609. However, the FSIA also presumes that “prop-
erty in the United States of a foreign state . . . used for a com-
mercial activity in the United States, shall not be immune
from attachment in aid of execution upon a judgment . . . if—
the judgment relates to a claim for which the foreign state is
not immune under section 1605(a)(7).” § 1610(a)(7). Com-
mercial property, executed upon based on a judgment
obtained under § 1605(a)(7), is therefore presumptively sub-
ject to execution, unless the defendant proves otherwise. As
5
This says nothing about whether the foreign country will choose to
assert that defense, even though our statutes make it available. Indeed, it
seems that addressing a defense that the foreign state has itself not chosen
to assert would undermine, not protect, the independence of the foreign
sovereign.
In a different context, the Confrontation Clause seeks to improve
(among other things) the reliability of the trial process. Yet, if the defen-
dant is not interested in invoking its protections, we certainly do not
impose it on that defendant.
19274 PETERSON v. CMA CGM
reflected in the legislative history of the FSIA, “evidence
must be produced to establish that a foreign state . . . is the
defendant in the suit and that the plaintiff’s claim relates to
. . . an act not within the exceptions in sections 1605-1607.”
H.R. Rep. 94-1487 at 17, U.S.C.C.A.N. at 6616.

The majority recognizes that, in the context of immunity
from suit, the burden shifts between the parties. Maj. Op.
19253-54. However, it fails to acknowledge the clear prece-
dent in this and other circuits that the ultimate burden of prov-
ing immunity belongs to the foreign state defendant. Where
the plaintiff alleges that his claim is based on an exception to
immunity, the defendant must establish a prima facie case that
an exception does not apply. Meadows v. Dominican Repub-
lic, 817 F.2d 517, 522-23 (9th Cir. 1987). The plaintiff must
then offer proof that one of the FSIA exemptions applies. Id.
at 523. Then, “the defendant must prove its entitlement to
immunity by a preponderance of the evidence.” Id. See also
Wilmington Trust, 934 F.2d at 1032 n.9 (“The FSIA places
the burden of proof on the entity attempting to place itself
within the act . . . .”); Princz v. Fed. Rep. of Germany, 26 F.3d
1166, 1171 (D.C. Cir. 1994) (“It is the burden of the foreign
sovereign in each case to establish its immunity by demon-
strating that none of the exceptions is applicable.”); Int’l Ins.
Co. v. Caja Nacional De Ahorro y Seguro, 293 F.3d 392, 397
(7th Cir. 2002) (“The ultimate burden of proving immunity
would rest with the foreign state.”). If the plaintiff merely
alleges that an exception applies, that is sufficient proof to
establish lack of immunity unless contested by the defendant.
Given that the ultimate proof rests with the defendant, it is not
unreasonable to require the defendant to raise the defense of
immunity from execution in the first instance.

Finally, our decision in Wilmington Trust v. U.S. District
Court, 934 F.2d 1026 (9th Cir. 1991) cannot be so easily dis-
tinguished. In addressing whether an international organiza-
tion could assert sovereign immunity from execution, even
 PETERSON v. CMA CGM 19275
where the foreign state was not a party to the action, we
stated:

Congress intended the FSIA to supplant the earlier
practice whereby a foreign sovereign would appeal
to the State Department “to make a formal sugges-
tion of immunity to the court.” Congress transferred
this decision to the courts. We hold that, based on
the language of the statute and its legislative history,
Congress intended requests for protection under the
FSIA to originate from the foreign state party.

Id. at 1032-33 (internal citation omitted). Because Finland
was not a party to the action, this holding strikes more at the
question of whether the FSIA applies even where a foreign
state is not a party, and is therefore somewhat inapposite to
the case at hand. Nevertheless, we certainly seem to imply
that, under the FSIA (as opposed to the historical practice pre-
dating its enactment) requests for sovereign immunity from
execution must come from the foreign country itself and
nowhere else—including from the courts.

For these reasons, I disagree with the majority’s holding
that courts can sua sponte adjudicate issues of sovereign
immunity from execution under 28 U.S.C. § 1609. Because
there is no reason here to violate the general rule against third
party standing, I would hold that CMA CGM cannot assert
sovereign immunity on Iran’s behalf. I would therefore
remand this issue to the district court to consider in the first
instance whether Iran’s right to payment was assignable under
California law without reference to the FSIA.