Af-Cap, Inc. v. Republic of Congo

United States Court of Appeals
Fifth Circuit
F I L E D
UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT August 23, 2006

Charles R. Fulbruge III
Clerk
No. 05-50290

AF-CAP INC,

Plaintiff - Appellant,

v.

THE REPUBLIC OF CONGO,

Defendant,

CMS NOMECO CONGO INC; THE NUEVO CONGO CO; NUEVO CONGO LTD,

Garnishees - Appellees.

05-50782
cons. w/ 05-51168

AF-CAP INC,

Plaintiff - Appellee,

v.

THE REPUBLIC OF CONGO,

Defendant -Appellant.

Appeal from the United States District Court
for the Western District of Texas
Before DEMOSS, BENAVIDES, and PRADO, Circuit Judges.

BENAVIDES, Circuit Judge:

This appeal concerns an ongoing battle by Af-Cap, Inc. to

receive payment from the Republic of Congo on an outstanding debt.

At issue are (1) the district court’s dissolution of garnishment

writs that would have allowed Af-Cap to garnish royalties owed to

the Congo; (2) a turnover order that requires the Congo to receive

monetary payment (as opposed to in kind payment) of the royalties

and requires its debtors to pay the royalties into the court

registry; and (3) a contempt order against the Congo for failing to

comply with the turnover order.

I. FACTUAL AND PROCEDURAL BACKGROUND

In 1984, Equator Bank Limited, Af-Cap’s predecessor-in-

interest, loaned the Congo funds for building a highway.1 The

following year, the Congo defaulted on the loan. More than ten

years later, Connecticut Bank of Commerce (“CBC”), an assignee of

Equator Bank, obtained a judgment against the Congo in England.

The Congo did not make the payments required by the judgment and,

as a consequence, CBC proceeded to enforce the judgment in the

United States. In 2000, a New York state court entered a money

judgment against the Congo in the amount of $13,628,340 plus

interest. Subsequently, the New York court entered an order

permitting attachment and execution against the assets of the Congo

1
In the loan agreement, the Congo agreed that any suit
arising out of the loan could be brought in England or New York.

2
in satisfaction of the judgment.

In 2001, CBC registered the New York judgment in a Texas state

court and simultaneously filed a garnishment action. CBC alleged

that CMS Nomeco Congo, Inc., The Nuevo Congo Company, and Nuevo

Congo Ltd. (the “CMS Companies”), among others, owed royalties and

taxes to the Congo and sought to garnish those obligations to

satisfy the judgment. The CMS Companies own working interests in

a convention (the “Convention”) that governs oil production in

Congolese waters. Under the Convention, the interest owners pay

the Congo royalties, which accrue when oil is taken from Congolese

territory. The Congo chooses the method of payment for these

royalties, either cash or “in kind” oil. Since 1999, the Congo has

opted to receive 100 percent of its payments “in kind.” The state

court, ex parte, issued writs of garnishment.

The Congo and the CMS Companies removed the action to the

United States District Court for the Western District of Texas. In

an order dated March 16, 2001, the district court held that the

Foreign Sovereign Immunities Act (“FSIA”), 28 U.S.C. § 1602 (2000),

prohibited garnishment of the in kind royalties and tax

obligations. This Court vacated that decision, recognizing that

the property at issue could fall within an exception to FSIA if the

property was used by the Congo in conjunction with commercial

activity in the United States. Conn. Bank of Commerce v. Republic

of Congo, 309 F.3d 240 (5th Cir. 2002). The case was remanded for

3
further factual development with regard to whether the property was

used for “commercial activity.”2

On remand, the district court found that the Congo did not use

its royalties and tax obligations for commercial activity. In

doing so, the court dissolved the writs of garnishment against the

CMS Companies. On appeal, this Court vacated the district court’s

decision, holding that the obligations at issue had been used for

a “commercial activity” because the Congo used some of the

obligations to settle a lawsuit with the National Union Fire

Insurance Company (“NUFI”). Af-Cap Inc. v. Republic of Congo, 383

F.3d 361, amended on rehearing, 389 F.3d 503 (5th Cir. 2004)

(hereinafter “Af-Cap II”). It also found that the situs of the

obligations was the United States. Id. at 373. This Court again

remanded, this time instructing the district court to determine

which obligations had been used to pay the NUFI debt. Only those

obligations would fall within the “commercial activity” exception.

Id.

Following the remand, the district court denied a motion to

reinstate the original writs of garnishment3 and, instead, issued

2
By this time, Af-Cap had acquired the debt at issue. It is
the sixth owner of the debt.
3
This Court denied a petition for writ of mandamus on this
issue. See In re Af-Cap Inc., No. 04-51357, slip. op. at 2 (5th
Cir. Dec. 20, 2004) (“We have every confidence in the district
court’s ability to properly understand and apply our mandate
against the backdrop of the troublesome complexities presented in
the garnishment proceedings.”).

4
new writs. Shortly thereafter, however, the district court

dissolved the new writs. In doing so, the court found that the

nonmonetary obligations owed by the CMS Companies were not proper

subjects of garnishment under Texas law. In the same decision, the

district court held that Texas law allowed a “turnover order,” as

an alternative method of attachment. The court issued a turnover

order on February 22, 2005 that purports to (1) take “possession

and control of all future royalty obligations owed to the Congo,”

(2) “order[] the Congo to turn over such royalty payments into the

registry of the Court,” and (3) order the Congo “to execute in

three originals within three days the attached letter of

instruction . . . from the Congo to the parties who pay royalties

under the Convention to the Congo revoking prior instructions

regarding payment of royalty and instructing that the royalty be

paid in cash into the registry of the Court.” The royalties were

to be applied in favor of Af-Cap until the judgment was satisfied.

In response to the turnover order, the Congolese Ministry of

Foreign Affairs and Francophony sent a letter to the district court

stating that the Congo would not follow the order because it

violated the country’s sovereignty. The district court then issued

an order directing the clerk of court to execute a letter of

instruction, directing the CMS Companies to pay royalty obligations

to the court’s registry. On July 1, 2005, the district court found

the Congo in contempt for failing to comply with the turnover

order. Neither the Congo nor the CMS Companies has complied with

5
the orders and the Congo remains in contempt.

The parties timely appealed (1) the order dissolving the writs

of garnishment, (2) the turnover order, and (3) the contempt order.

We consolidated the three appeals for oral argument and likewise do

so now for disposition.

II. STANDARD OF REVIEW

For the contempt issue, the standard of review is abuse of

discretion. United States v. City of Jackson, 359 F.3d 727, 731

(5th Cir. 2004). The underlying findings of fact are reviewed for

clear error, and the underlying conclusions of law are reviewed de

novo. Id. For all of the remaining issues, the standard of review

is de novo because the issues raise questions of law. Randel v.

U.S. Dep't of the Navy, 157 F.3d 392, 395 (5th Cir. 1998). Given

that this is a diversity case, this Court must apply the law of

Texas. See Erie R. Co. v. Tompkins, 304 U.S. 64, 79–80 (1938). If

the law is unclear, this Court must predict how the Texas Supreme

Court would rule. See Herrmann Holdings Ltd. v. Lucent Techs.

Inc., 302 F.3d 552, 558 (5th Cir. 2002). When necessary, the

standard of review is discussed in greater detail below.

III. DISCUSSION

A. Garnishment Action

The first issue of this consolidated appeal is whether the

district court erred by dissolving the writs of garnishment on the

ground that Texas law does not allow the garnishment of nonmonetary

6
obligations.

Garnishment actions in Texas are “purely statutory” and courts

have no power to extend the benefits of garnishment beyond the

relief available under statute. Beggs v. Fite, 106 S.W.2d 1039,

1042 (Tex. 1937); see also 17 TEX. JUR. 3D Creditors’ Rights and

Remedies § 359 (1998). The Texas garnishment statute, however,

does not address the question posed here. See TEX. CIV. PRAC. & REM.

CODE ANN. ch. 63 (Vernon 1997). It makes no mention of nonmonetary

debts. Likewise, no Texas case has specifically considered whether

a nonmonetary obligation can be subject to garnishment.

1. Texas Does Not Allow Garnishment of Nonmonetary
Obligations

Our analysis of this issue is guided by the fact that

garnishment has been “long considered [a] harsh remed[y]” by Texas

courts. Varner v. Koons, 888 S.W.2d 511, 513 (Tex. App.—El Paso

1994, orig. proceeding); cf. Beggs, 106 S.W.2d at 1042 (describing

garnishees as “strangers” to an action who are subjected to

“inconvenience and hazard”). Indeed, Texas case law requires us to

“strictly construe” the Texas garnishment statute. See Varner, 888

S.W.2d at 513. Given this task of “strict construction,” we find

that expanding the garnishment statute to cover nonmonetary

obligations goes too far. This holding conforms with the principle

that courts do not have the equitable power to expand the purely

statutory garnishment remedy. Beggs, 106 S.W.2d at 1042.

7
 Our conclusion is informed by Texas Rule of Civil Procedure

668, which provides that in the event it is determined that “the

garnishee is indebted to the defendant in any amount, or was so

indebted when the writ of garnishment was served, the court shall

render judgment for the plaintiff against the garnishee for the

amount so admitted or found to be due to the defendant from the

garnishee.” TEX. R. CIV. P. 668 (emphasis added). This rule does

not contemplate indebtedness as encompassing obligations other than

money. See Waples-Platter Grocer Co. v. Tex. & Pac. Ry., 68 S.W.

265, 266 (Tex. 1902) (holding that an unliquidated claim for breach

of contract cannot be garnished); Willis v. Heath, 12 S.W. 971, 972

(Tex. 1889) (holding that a negotiable promissory instrument cannot

be garnished). Indeed, Texas courts define the term “debt” as a

“specified sum of money owing to one person from another.” See

Seay v. Hall, 677 S.W.2d 19, 23 (Tex. 1984), superseded by statute

on other grounds as stated in Palmer v. Coble Wall Trust Co., 851

S.W.2d 178, 181 (Tex. 1992). Given that the CMS Companies have a

nonmonetary obligation to pay in kind oil to the Congo, it cannot

be garnished under Texas law.

Af-Cap has failed to point this Court to any authority that

proves Texas allows the garnishment of nonmonetary debts. Instead,

it mistakenly relies on authority related to “effects.” The Texas

garnishment statute contemplates garnishment of (1) debts, money

owed to a defendant, and (2) effects, tangible property owned by

8
the defendant in possession of the garnishee. See TEX. CIV. PRAC. &

REM. CODE ANN. § 63.003(a) (“After service of a writ of garnishment,

the garnishee may not deliver any effects or pay any debt to the

defendant.”). The only way the “effects” provision could be

applicable here is if a physical object in the possession of the

CMS Companies were the subject of this garnishment. That is simply

not the case. Indeed, this Court already determined in Af-Cap II

that the royalty obligation at issue does not have physical

characteristics. 383 F.3d at 371 (“[T]his property is intangible

in nature.”). Therefore, the issue before us concerns a debt, and

the “effects” authority relied upon by Af-Cap is inapposite.4

To conclude, this case turns on the fact that the obligation

at issue is nonmonetary. The CMS Companies, operating under the

Convention, do not owe money to the Congo; they owe oil. Af-Cap

does not ask this Court to allow it to garnish that oil, assuming

it could do so under the FSIA, and instead seeks to be the

beneficiary of the nonmonetary obligation. As explained above,

4
Af-Cap relies on McClung v. Watson, 165 S.W. 532, 535 (Tex.
Civ. App.—Amarillo 1914, no writ), where the court held that a
creditor could garnish certain livestock owned by the debtor but
in possession of the garnishee. It also relies on Jamison v.
Nat’l Loan Investors, L.P., 4 S.W.3d 465, (Tex. App.—Houston [1st
Dist.] 1999, pet. denied), where the court described garnishment
as “a statutory proceeding whereby the property, money, or
credits of a debtor in the possession of another are applied to
the payment of a debt.” Id. at 468 (emphasis added). Both of
these cases reference “effects,” that is physical property owned
by the defendant in possession of the garnishee, rather than
nonmonetary, intangible obligations.

9
Texas does not allow garnishment of this type of debt. Therefore,

the district court did not err in dissolving the writs of

garnishment.

2. Af-Cap’s Other Arguments Fail

Af-Cap also argues that the district court’s holding

contravenes the law of the case. “[U]nlike res judicata, the law

of the case doctrine applies only to issues that were actually

decided, rather than all questions in the case that might have been

decided, but were not.” Alpha/Omega Ins. Servs. v. Prudential Ins.

Co. of Am., 272 F.3d 276, 279 (5th Cir. 2001). An issue is

“actually decided” if the court explicitly decided it or

necessarily decided it by implication. Id. Af-Cap II only

addressed whether the obligations at issue were immune from

garnishment under FSIA. There is nothing in Af-Cap II that

interprets state garnishment law. Therefore, the district court

correctly questioned whether such an obligation could be

garnishable in Texas.

Af-Cap also argues that, as a plaintiff in a garnishment

action, it can “step[] into the shoes” of the Congo and elect to

receive the royalty payments in cash. See Rowley v. Lake Area

Nat'l Bank, 976 S.W.2d 715, 719 (Tex. App.—Houston [1st Dist.]

1998, pet. denied). This reasoning, however, ignores the

chronology of a garnishment proceeding. The writs at issue must

first capture a debt before a garnishor can step into the shoes of

10
the creditor. If this were not the rule, would-be garnishors could

manipulate assets so that a writ could attach. Here, the writs

failed to capture anything, given that the obligation is

nonmonetary. Therefore, Af-Cap has no authority to request payment

in cash.

B. The Turnover Order

The second issue in this consolidated appeal is whether the

district court erred in granting the turnover order that requires

the Congo to accept its royalty payments in cash and order its

debtors to make those payments to the court registry.

The parties dispute the standard of review for this issue,

with the Congo arguing for de novo review and Af-Cap arguing for

abuse of discretion. A combination of the two is required. While

the entry of a turnover order is reviewed for an abuse of

discretion, a district court necessarily abuses its discretion if

its conclusion is based on an erroneous determination of the law.

Maiz v. Virani, 311 F.3d 334, 338 (5th Cir. 2002). This Court

reviews questions of law de novo. Randel, 157 F.3d at 395. It

should be noted, however, that a trial court’s issuance of a

turnover order, even if predicated on an erroneous conclusion of

law, will not be reversed for abuse of discretion if the judgment

is sustainable for any reason. Maiz, 311 F.3d at 338.

In Texas, a court may order a judgment debtor “to turn over

nonexempt property that is in the debtor’s possession or is subject

11
to the debtor’s control.” TEX. CIV. PRAC. & REM. CODE ANN. § 31.002

(Vernon 1997). Such an order can be enforced “by contempt

proceedings or by other appropriate means in the event of refusal

or disobedience.” Id. The statute is “the procedural device by

which judgment creditors may reach assets of a debtor that are

otherwise difficult to attach or levy on by ordinary legal

process.” Beaumont Bank, N.A. v. Buller, 806 S.W.2d 223, 224 (Tex.

1991).

1. The District Court Did Not Have In Personam Jurisdiction
Over the Congo

The dissolution of the writs of garnishment and creation of

the turnover order require this Court to find a new justification

for jurisdiction in this case. In Af-Cap II, this Court found

jurisdiction based on the fact that the obligations were held by

the CMS Companies who were located in the United States, and Texas

specifically. Af-Cap II, 383 F.3d at 371–73. With the turnover

order, the district court bypasses the CMS Companies and directly

orders the Congo to act. To find in personam jurisdiction, this

Court must look to the FSIA, which “provides the sole basis for

obtaining in personam jurisdiction over a foreign state.”

Hashemite Kingdom of Jordan v. Layale Enters., S.A. (In re B-727

Aircraft Serial No. 21010), 272 F.3d 264, 270 (5th Cir. 2001). In

Af-Cap II, this Court looked at the FSIA rules for property under

§ 1610(a); this Court now must look at rules for in personam

12
jurisdiction under § 1605(a). As explained below, the FSIA does

not allow in personam jurisdiction over the Congo.5

Section 1605(a) has two relevant provisions to the present

case. See 28 U.S.C. § 1605(a)(1) & (2). In § 1605(a)(1), personal

jurisdiction over a foreign state exists if the state “has waived

its immunity either explicitly or by implication.” Id. at §

1605(a)(1). In § 1605(a)(2), personal jurisdiction over a foreign

state exists in certain “commercial activity” situations. Id. at

§ 1605(a)(2). Beginning with § 1605(a)(2), the “commercial

activity” exception is foreclosed by reasoning used in Af-Cap II.

The Af-Cap II Court held that the situs requirement—required under

both § 1610 and § 1605—was only possible because the CMS Companies,

holding property of the Congo, were located in the United States.

Under an analysis of the turnover order, however, the CMS Companies

and the property they hold is not considered. The district court,

by dissolving the writs and replacing them with a turnover order,

lost the original foothold for jurisdiction. The “commercial

activity” exception does not apply to the Congo.

Turning to § 1605(a)(1), the loan agreement does not

explicitly waive immunity to suit in Texas. (Loan Agreement,

5
Af-Cap suggests that the turnover order should not be a
problem because “a virtually identical turnover order” was
entered into by the Northern District of Illinois in the NUFI
case. Unlike the present turnover order, however, the Congo
consented to the Illinois order. Therefore, the Congo waived any
potential personal jurisdiction argument in the NUFI case.

13
§ 19). The issue is therefore whether the Congo has implicitly

waived immunity to suit in Texas. This Court has identified three

circumstances in which a waiver is ordinarily implied: “(1) a

foreign state agrees to arbitration in another country; (2) the

foreign state agrees that a contract is governed by the laws of a

particular country; (3) the state files a responsive pleading

without raising the immunity defense.” Rodriguez v. Transnave

Inc., 8 F.3d 284, 287 (5th Cir. 1993) (internal citation omitted).

None of these circumstances is present in this case. First, there

is no arbitration agreement. Second, the loan agreement states

that it is to be governed by English law, not United States law.

Third, the pleadings with regard to the turnover order have

consistently raised an immunity defense. If this Court wanted to

go outside of the three ordinary circumstances, it must still

“narrowly construe” the implicit waiver clause of § 1605(a)(1).

Rodriguez, 8 F.3d at 287 (“[C]ourts rarely find that a nation has

waived its sovereign immunity without strong evidence that this is

what the foreign state intended.”).

In the case at hand, there is no evidence, and certainly no

strong evidence, that the Congo implicitly waived immunity to suit

in Texas. Af-Cap has failed to argue, much less show, how in

personam jurisdiction is appropriate in Texas. Because the

district court erroneously held that the Congo waived its immunity,

it abused its discretion. Therefore, the turnover order is

14
vacated.6

2. The Fugitive Disentitlement Doctrine Does Not Require
Dismissal of this Appeal

By motion dated May 27, 2005, Af-Cap argued that the Congo’s

noncompliance with the turnover order should result in the

dismissal of this appeal pursuant to the fugitive disentitlement

doctrine. We carried the motion with the merits of the appeal and

consider it now. As explained below, we will not extend the

fugitive disentitlement doctrine as contemplated by Af-Cap.

This Court has held that “[a]s a general matter, willful

flouting of the judicial system on the part of one seeking

appellate redress should not go wholly unrecognized.” United

States v. DeValle, 894 F.2d 133, 134 (5th Cir. 1990). The fugitive

disentitlement doctrine embodies that principle and limits a

party’s “access to the judicial system whose authority he evades.”

Bagwell v. Dretke, 376 F.3d 408, 410 (5th Cir. 2004). The

doctrine, however, is a “blunt” instrument that should not be

applied without serious forethought. Degen v. United States, 517

U.S. 820, 828 (1996).

In the present case, the policy concerns associated with the

doctrine are not served. The underlying foundation of the doctrine

is that it deters “disrespect for the legal process.” Ortega-

Rodriguez v. United States, 507 U.S. 234, 246 (1993). Sovereignty

6
We base our holding on the lack of personal jurisdiction
and do not address alternative arguments raised by the Congo.

15
assertions, however, are different than blatant disrespect for the

legal process. As explained above, the Congo correctly believed

that under the FSIA the district court lacked in personam

jurisdiction. The Congo asserts that its position was not designed

to be disrespectful. As evidence of that fact, it points to the

Congolese minister who promptly informed the court that the country

would not obey the turnover order because of sovereignty concerns.

In addition, Af-Cap has failed to cite a single case in which

the doctrine has been used against a foreign state.7 In contrast,

at least two cases exist in which foreign instrumentalities have

refused to comply with injunctions, yet nonetheless have had their

appeals heard. See Karaha Bodas Co. v. Perusahaan Pertambangan

Minyak Dan Gas Bumi Negara, 335 F.3d 357, 366–76 (5th Cir. 2003);

Philippine Nat’l Bank v. U.S. Dist. Court for the Dist. of Hawaii

(In re Philippine Nat’l Bank), 397 F.3d 768, 772–75 (9th Cir.

2005). For these reasons, the fugitive disentitlement doctrine

does not require dismissal of this appeal.

3. The Law of the Case Does Not Prevent Consideration of
Whether the Turnover Order Is Barred by the FSIA

Af-Cap also argues that the law of the case should prevent

this Court from considering the Congo’s arguments under the FSIA.

Af-Cap II, however, only considered FSIA compliance with regard to

7
Af-Cap claims that the doctrine was used against a foreign
instrumentality in United States v. Crawford Enterprises, Inc.,
643 F.Supp. 370, 382 (S.D. Tex. 1986). A review of that case,
however, shows no use of the doctrine.

16
the garnishment of the royalty obligations. The Congo now asks for

consideration of the turnover order under the FSIA. As stated

above, the turnover order raises unique FSIA issues. Supra Part

III.B.1. For these reasons, the law of the case does not prohibit

this Court from considering the FSIA as it applies to the turnover

order.

C. The Contempt Order

The third issue in this consolidated appeal is whether the

district court erred in holding the Congo in contempt.

The district court entered the contempt order on July 1, 2005

after the Congo alerted the court that it would not comply with the

turnover order. The court ordered the Congo to pay $10,000 per day

into the registry of the district court until it complied with the

turnover order. It further stated that if the Congo continued to

ignore the turnover order for sixty days, the Congo would be

required to send written notice to its business associates in the

United States informing them of the amount of outstanding judgment

in the case and of the Congo’s contempt of court.8

8
The United States, as amicus curiae, argues that the
district court erred in imposing contempt sanctions against the
Congo. In foreign sovereignty cases, such as this one, the
government’s view is entitled to deference. Republic of Mexico
v. Hoffman, 324 U.S. 30, 35 (1945) (“‘In such cases [concerning a
foreign state’s immunity] the judicial department of this
government follows the action of the political branch, and will
not embarrass the latter by assuming an antagonistic
jurisdiction.’”) (quoting United States v. Lee, 106 U.S. 196,
209, (1882)); see also Magness v. Russian Fed’n, 247 F.3d 609,
619 (5th Cir. 2001) (interpreting a legal issue under the FSIA in

17
 1. The FSIA Bars the Contempt Order

The FSIA creates the sole method for obtaining jurisdiction

over a sovereign state. Republic of Austria v. Altmann, 541 U.S.

677, 691 (2004). It also provides the sole, comprehensive scheme

for enforcing judgments against foreign sovereigns in civil

litigation. 28 U.S.C. § 1609. The legislative history surrounding

the FSIA specifically discusses contempt orders and states that

they “may be unenforceable if immunity exists.” H.R. Rep. No. 94-

1487, at 22 (1976), reprinted in 1976 U.S.C.C.A.N. 6604.

The contempt order, as written, does not fall within the

provisions of the FSIA. A review of the relevant sections, § 1610

and § 1611, shows that they do not present a situation in which the

order could stand. Those sections describe the available methods

of attachment and execution against property of foreign states.

Monetary sanctions are not included. Therefore, in issuing the

contempt order, the district court relied on an erroneous

conclusion of law. As such, the court abused its discretion, and

the contempt order is vacated.

2. The FSIA Allows Rights Without Remedies

Because we base our holding on the FSIA, we need not reach

other issues raised by the parties.9 We note, however, an error in

light of the government’s position expressed in an amicus brief).

9
The government argues that equitable principles and
international practice also require vacating the order.

18
the district court’s reasoning so that future courts will not

repeat it. In granting the contempt order, the district court

reasoned that Congress must have intended to authorize money

sanctions against foreign states when it authorized the issuance of

injunctive relief against them. That reasoning is flawed. Under

the FSIA, a court’s power to make an order does not always entail

a power of enforcement by sanctions. See De Letelier v. Republic

of Chile, 748 F.2d 790, 798–99 (2d Cir. 1984) (rejecting the

argument that Congress could not have intended in the FSIA to

“create a right without a remedy”).

IV. FG Hemisphere Associates v. The Republique de Congo

This Court recently issued an opinion in a related matter, FG

Hemisphere Associates v. Republique du Congo, _ F.3d _, 2006 WL

1883987 (5th Cir. July 10, 2006) (hereinafter “FG Hemisphere”).

Like the case at hand, FG Hemisphere concerned the appropriateness

of garnishment writs targeting debts owed by the CMS Companies to

the Congo. That case focused on the issue of when a district court

should determine the situs of the CMS Companies for purposes of the

FSIA.10 Id. at *11. It held that a court must determine the situs

10
The situs has great relevance in an FSIA determination
because a court can only attach a foreign state’s property if
that property is in the United States. 28 U.S.C. § 1610(a). In
Af-Cap II, this Court found that situs for the present case was
in the United States because the debtors (the CMS Companies) and
the debt were located in Texas. Af-Cap II, 383 F.3d at 371–73.
The CMS Companies argued in FG Hemisphere, and now argue here,
that the situs has changed because it (and its debts) are now
found in Europe. In July 2004, the Perenco Group, headquartered

19
when it decides whether an FSIA exception to immunity applies. Id.

After finding that the court had not done the appropriate situs

determination at the appropriate time, the FG Hemisphere Court

reversed the district court’s order granting writs of garnishment.

Id. at *18.

The FG Hemisphere opinion was issued after we heard oral

argument in this case. The parties filed supplemental briefing

specifically addressing how FG Hemisphere affects the consolidated

appeals now before us. Having reviewed their arguments, we decide

not to reach the issues raised by FG Hemisphere and instead rely on

the authority cited above, supra Part III. Applying FG Hemisphere

would neither change the fact that Texas law does not allow

garnishment of nonmonetary obligations11 nor alleviate the FSIA

errors committed by the district court with regard to the turnover

and contempt orders. We therefore do not provide alternative

holdings based on whether the district court made situs

determinations at the appropriate times.

V. CONCLUSION

To summarize, we hold that the garnishment of nonmonetary

obligations is not appropriate under Texas law. Likewise, a

in Europe, purchased the CMS Companies.
11
Under Af-Cap II, we have jurisdiction to consider the
garnishment writs. 383 F.3d at 373 (holding that the obligations
“are not protected by sovereign immunity”). Contrary to the CMS
Companies’ assertions, nothing requires us to disrupt that
holding.

20
turnover order is not an appropriate remedy in this action because

the district court did not have personal jurisdiction over the

Congo. Finally, the contempt order is not permissible under the

FSIA. For the reasons outlined above, we AFFIRM the district

court’s decision to dissolve the garnishment writs; VACATE the

turnover order; and VACATE the contempt order. We REMAND to the

district court for proceedings consistent with this opinion. The

motion filed by appellee to dismiss the appeal is denied.

21