Earlier this week, a split Fourth Circuit panel result two knotty jurisdictional questions. The first relates to appellate jurisdiction in a case that has been transferred from a district court in one circuit to a district court in another circuit. The second relates to the commercial activities exception of the Foreign Sovereign Immunities Act. Judge Duncan wrote the majority opinion in Wye Oak Technology, Inc. v. Republic of Iraq, in which Judge Osteen (M.D.N.C.) joined. Judge Shedd dissented.
Wye Oak sued the Republic of Iraq for breach of contract in the United States District Court for the Eastern District of Virginia. The underlying contract was between Wye Oak and Iraq’s Ministry of Defense. Iraq moved to dismiss for lack of jurisdiction (both subject-matter jurisdiction and personal jurisdiction) and for improper venue. The subject-matter jurisdiction argument was based on the Foreign Sovereign Immunities Act. Wye Oak invoked the commercial activities exception. Iraq then argued that the commercial activities exception did not apply to the claim against Iraq, because the contract was entered into by Iraq’s Ministry of Defense–a separate legal person–rather than Iraq itself. The District Court held that the commercial activities exception did apply after determining that Iraq and Iraq’s Ministry of Defense should be “treated as one and the same” for purposes of the FSIA. The District Court also held, however, that venue was improper, and immediately transferred the case to the United States District Court for the District of Columbia. The transferee court stayed the case while the parties appealed the denial of the motion to dismiss to the Fourth Circuit.
The Fourth Circuit affirmed, holding that it possessed appellate jurisdiction notwithstanding the transfer, and that Iraq and Iraq’s Ministry of Defense were not separate legal purpose persons for purposes of the FSIA’s commercial activities exception.
Judge Shedd dissented from the holding regarding appellate jurisdiction over the now-transferred case.