Frontera Resources Azerbaijan Corporation v. State Oil Company of the, No. 07-1815 (2d Cir. 2009)

Annotate this Case

Download PDF

07-1815-cv Frontera Resources Azerbaijan Corporation v. State Oil Company of the Azerbaijan Republic 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT August Term 2008 (Argued: October 27, 2008 Decided: September 28, 2009) Docket No. 07-1815-cv -----------------------------------------------------x FRONTERA RESOURCES AZERBAIJAN CORPORATION, Petitioner-Appellant, -- v. -STATE OIL COMPANY OF THE AZERBAIJAN REPUBLIC, Respondent-Appellee. -----------------------------------------------------x B e f o r e : WALKER, PARKER, and RAGGI, Circuit Judges. Petitioner Frontera Resources Azerbaijan Corporation appeals 23 from the dismissal of its petition to confirm a foreign arbitral 24 award against Respondent State Oil Company of the Azerbaijan 25 Republic ( SOCAR ) for lack of personal jurisdiction. 26 that the district court correctly required jurisdiction over 27 either SOCAR or SOCAR s property. 28 district court erred by holding that foreign states and their 29 agents are entitled to rights under the Due Process Clause. 30 Accordingly, we overrule our holding to the contrary in Texas 31 Trading & Milling Corp. v. Federal Republic of Nigeria, 647 F.2d 32 300 (2d Cir. 1981), and remand for the district court to 33 reconsider its jurisdictional analysis. -1- We hold We find, however, that the 1 VACATED and REMANDED. 2 3 4 5 6 7 8 9 10 11 12 13 JAMES E. BERGER, Paul Hastings Janofsky & Walker, LLP, New York, NY, for PetitionerAppellant. JOHN D. WINTER, Patterson Belknap Webb & Tyler LLP, New York, NY, for RespondentAppellee. JOHN M. WALKER, JR., Circuit Judge: Petitioner-Appellant Frontera Resources Azerbaijan 14 Corporation ( Frontera ) appeals from the dismissal by the United 15 States District Court for the Southern District of New York 16 (Richard J. Holwell, Judge) of its petition to enforce a Swedish 17 arbitration award against Respondent-Appellee State Oil 18 Corporation of the Azerbaijan Republic ( SOCAR ). 19 court granted SOCAR s motion to dismiss for want of personal 20 jurisdiction. 21 the Azer. Republic, 479 F. Supp. 2d 376, 388 (S.D.N.Y. 2007). 22 conclude that SOCAR is not entitled to the Due Process Clause s 23 jurisdictional protections if it is an agent of the Azerbaijani 24 state. 25 to reconsider its analysis. 26 The district See Frontera Res. Azer. Corp. v. State Oil Co. of We Accordingly, we vacate and remand for the district court BACKGROUND 27 Frontera and SOCAR are two companies in the oil industry. 28 Frontera is based in the Cayman Islands, and SOCAR is based in 29 and owned by the Republic of Azerbaijan ( Azerbaijan ). -2- In 1 November 1998, the parties entered into a written agreement (the 2 Agreement ) under which Frontera developed and managed oil 3 deposits in Azerbaijan and delivered oil to SOCAR. 4 dispute arose over SOCAR s refusal to pay for some of this oil, 5 and in response, Frontera allegedly sought to sell oil that was 6 supposed to be sold to SOCAR to parties outside of Azerbaijan 7 instead. 8 authorities to block Frontera s oil exports, SOCAR seized the 9 oil. In 2000, a In November 2000, after instructing local customs 10 In March 2002, the bank that had financed Frontera s 11 involvement in Azerbaijan foreclosed on its loan, forcing 12 Frontera to assign its rights in the project to the bank. 13 July 2002, the bank settled its claims with SOCAR. 14 however, continued to seek payment for both previously delivered 15 and seized oil. 16 denied liability to Frontera. 17 In Frontera, Based on its settlement with the bank, SOCAR After Frontera and SOCAR were unable to settle their dispute 18 amicably, Frontera served SOCAR in July 2003 with a request for 19 arbitration as per the Agreement. 20 hearing on the merits with full participation by both parties, a 21 Swedish arbitral tribunal awarded Frontera approximately $1.24 22 million plus interest. 23 24 In January 2006, after a On February 14, 2006, Frontera filed a petition in the Southern District of New York to confirm the award pursuant to -3- 1 Article II(2) of the Convention on the Recognition and 2 Enforcement of Foreign Arbitral Awards ( New York Convention ), 3 opened for signature June 10, 1958, 21 U.S.T. 2517, 330 U.N.T.S. 4 38, implemented at 9 U.S.C. § 207. 5 the petition for lack of personal jurisdiction, on the basis that 6 SOCAR had insufficient contacts with the United States to meet 7 the Due Process Clause s requirements for the assertion of 8 personal jurisdiction. 9 soundness of according due process protections to SOCAR, a The district court dismissed The district court questioned the 10 company owned by Azerbaijan, but nonetheless applied the 11 traditional due process test based on our precedent in Texas 12 Trading & Milling Corp. v. Federal Republic of Nigeria, 647 F.2d 13 300 (2d Cir. 1981). 14 quasi in rem jurisdiction over SOCAR, because Frontera had not 15 identified specific SOCAR assets within the court s jurisdiction. 16 The district court denied jurisdictional discovery and dismissed 17 Frontera s petition. 18 19 The district court also declined to find This appeal followed. DISCUSSION Frontera contends (1) that a court does not need personal 20 jurisdiction over a party in order to confirm a foreign arbitral 21 award against that party, and (2) that Texas Trading should be 22 overruled, because the Due Process Clause s protections should 23 not apply to foreign states or their instrumentalities. 24 also challenges the district court s denial of jurisdictional -4- Frontera 1 discovery. 2 I. 3 Personal Jurisdiction over SOCAR When considering a district court s dismissal for lack of 4 personal jurisdiction, we review its factual findings for clear 5 error and its legal conclusions de novo. 6 Inc. v. McDonald, 362 F.3d 17, 22 (2d Cir. 2004). 7 See Sunward Elecs., Generally, personal jurisdiction has both statutory and 8 constitutional components. A court must have a statutory basis 9 for asserting jurisdiction over a defendant, see Grand River 10 Enters. Six Nations, Ltd. v. Pryor, 425 F.3d 158, 165 (2d Cir. 11 2005), and the Due Process Clause typically also demands that the 12 defendant, if not present within the territory of the forum, 13 . . . have certain minimum contacts with it such that the 14 maintenance of the suit does not offend traditional notions of 15 fair play and substantial justice. 16 Washington, 326 U.S. 310, 316 (1945) (quoting Milliken v. Meyer, 17 311 U.S. 457, 463 (1940)). 18 district court s reliance on the Foreign Sovereign Immunities Act 19 ( FSIA ), 28 U.S.C. § 1608(a), as the statutory basis for 20 jurisdiction over SOCAR. 21 80; see also Argentine Republic v. Amerada Hess Shipping Corp., 22 488 U.S. 428, 439 (1989) (stating that the FSIA provides the 23 sole basis for obtaining jurisdiction over a foreign state in 24 federal court ). Int l Shoe Co. v. The parties do not challenge the See Frontera, 479 F. Supp. 2d at 379- This appeal instead is focused on the Due -5- 1 2 Process Clause s place in the district court s analysis. The district court dismissed Frontera s petition because it 3 concluded that SOCAR s contacts with the United States were 4 insufficient to meet the Due Process Clause s demands for 5 personal jurisdiction. 6 both because personal jurisdiction is not necessary for the 7 requested relief, and because SOCAR is not entitled to the Due 8 Process Clause s protections. 9 10 Frontera contends that this was in error We address each argument in turn. A. The Need for Jurisdiction Frontera argues that a district court does not need personal 11 jurisdiction over a respondent to confirm a foreign arbitral 12 award against that party. 13 court s dismissal of its petition necessarily rest[ed] upon an 14 assumption that personal jurisdiction over SOCAR was 15 indispensable. 16 Yet, Frontera contends, the district (Appellant s Br. at 38.) We read the district court s decision differently. Although 17 the district court considered whether it could assert personal 18 jurisdiction over SOCAR, it did not make that question 19 dispositive. 20 United States insufficient to establish personal jurisdiction, 21 the district court examined whether it had jurisdiction over any 22 of SOCAR s assets, because in the absence of minimum contacts, 23 quasi in rem jurisdiction may be exercised to attach property to 24 collect a debt. Instead, after finding SOCAR s contacts with the Frontera, 479 F. Supp. 2d at 387. -6- Thus, by 1 suggesting that the district court required personal 2 jurisdiction, Frontera misunderstands the framework of the 3 court s analysis. 4 to the district court s requirement of either personal or quasi 5 in rem jurisdiction, it is without merit. And to the extent that Frontera s challenge is 6 We have previously avoided deciding whether personal or 7 quasi in rem jurisdiction is required to confirm foreign arbitral 8 awards pursuant to the New York Convention. 9 A.O. Yuganskneftegaz, 317 F.3d 202, 207 (2d Cir. 2003). See Dardana Ltd. v. However, 10 the numerous other courts to have addressed the issue have each 11 required personal or quasi in rem jurisdiction. 12 Telcordia Tech Inc. v. Telkom SA Ltd., 458 F.3d 172, 178-79 (3d 13 Cir. 2006); Glencore Grain Rotterdam B.V. v. Shivnath Rai 14 Harnarain Co., 284 F.3d 1114, 1120-22 (9th Cir. 2002); Base Metal 15 Trading, Ltd. v. OJSC Novokuznetsky Aluminum Factory , 283 F.3d 16 208, 212-13 (4th Cir. 2002); see also Transatl. Bulk Shipping 17 Ltd. v. Saudi Chartering S.A., 622 F. Supp. 25, 27 (S.D.N.Y. 18 1985). 19 See, e.g., Frontera contends that none of these courts addressed the 20 precise argument it advances here: 21 statutory or treaty basis for such a jurisdictional 22 requirement.1 1 2 3 4 that there is no positive (Appellant s Reply Br. at 11.) 1 The federal This position is not as novel as Frontera suggests. The Ninth Circuit rejected an identical argument in Glencore Grain. See 284 F.3d at 1121 ( [I]t is not significant in the least that the . . . [New York] Convention lacks language requiring personal jurisdiction over the litigants. We hold that -7- 1 statute that implements the New York Convention requires a court 2 to confirm an award unless it finds one of the grounds for 3 refusal or deferral of recognition or enforcement of the award 4 specified in the said Convention. 5 the New York Convention provides the exclusive grounds for 6 refusing confirmation, Yusuf Ahmed Alghanim & Sons, W.L.L. v. 7 Toys R Us, Inc., 126 F.3d 15, 20 (2d Cir. 1997), and specifies 8 seven grounds for refusing to enforce an arbitral award, none of 9 which include a lack of jurisdiction over the respondent or the 9 U.S.C. § 207. Article V of 10 respondent s property, see New York Convention at art. 5, 21 11 U.S.T. at 2517. 12 impose a jurisdictional requirement if the Convention does not 13 already have one. Frontera accordingly argues that we cannot We disagree. 14 Unlike state courts[,] [which] are courts of general 15 jurisdiction[,] . . . federal courts are courts of limited 16 jurisdiction which thus require a specific grant of 17 jurisdiction. 18 Premium Servs., Ltd., 156 F.3d 432, 435 (2d Cir. 1998) (citing 19 Sheldon v. Sill, 49 U.S. (8 How.) 441, 449 (1850)). 20 validity of an order of a federal court depends upon that court s 21 having jurisdiction over both the subject matter and the 22 parties. 1 2 3 Foxhall Realty Law Offices, Inc. v. Telecomm. The Ins. Corp. of Ir., Ltd. v. Compagnie des Bauxites de neither the Convention nor its implementing legislation removed the district courts obligation to find jurisdiction over the defendants in suits to confirm arbitration awards. ). -8- 1 Guinee, 456 U.S. 694, 701 (1982). 2 subject matter jurisdiction functions as a restriction on 3 federal power, id. at 702, the need for personal jurisdiction is 4 fundamental to the court s power to exercise control over the 5 parties, Leroy v. Great W. United Corp., 443 U.S. 173, 180 6 (1979). 7 respondent s residence, his conduct, his consent, the location of 8 his property or otherwise, to justify his being subject to the 9 court s power. 10 11 While the requirement of Some basis must be shown, whether arising from the Glencore Grain, 284 F.3d at 1122 (quoting Transatl. Bulk Shipping, 622 F. Supp. at 27). Because of the primacy of jurisdiction, jurisdictional 12 questions ordinarily must precede merits determinations in 13 dispositional order. 14 Shipping Corp., 549 U.S. 422, 431 (2007). 15 Article V as the exclusive defenses . . . pertain to substantive 16 matters rather than to procedure. 17 S.A.M. v. Nak Naftogaz of Ukr., 311 F.3d 488, 496 (2d Cir. 2002) 18 (emphasis added). 19 which one can challenge a request for confirmation, but it does 20 nothing to alter the fundamental requirement of jurisdiction over 21 the party against whom enforcement is being sought. 22 Sinochem Int l Co. v. Malay. Int l [T]he items listed in Monegasque de Reassurances Article V s exclusivity limits the ways in Frontera argues that the Supreme Court suggested otherwise 23 in Shaffer v. Heitner, 433 U.S. 186 (1977), in the following 24 footnote: -9- 1 2 3 4 5 6 7 Once it has been determined by a court of competent jurisdiction that the defendant is a debtor of the plaintiff, there would seem to be no unfairness in allowing an action to realize on that debt in a State where the defendant has property, whether or not that State would have jurisdiction to determine the existence of the debt as an original matter. 8 Id. at 210 n.36. 9 that a court might not need jurisdiction over a respondent s 10 person when enforcing a debt the Shaffer principle that 11 Frontera makes much of, (Appellant s Br. at 46) it nonetheless 12 assumed that such a court would still have jurisdiction over the 13 respondent s property. 14 approach in no way conflicted with Shaffer. 15 did not view its lack of personal jurisdiction over SOCAR as 16 fatal to Frontera s petition; instead, the court then 17 appropriately considered whether it could assert jurisdiction 18 over SOCAR s property. 19 But while this footnote indicated, in dicta, And in this regard, the district court s The district court We therefore hold that the district court did not err by 20 treating jurisdiction over either SOCAR or SOCAR s property as a 21 prerequisite to the enforcement of Frontera s petition. 22 district court may, however, have given the Constitution s Due 23 Process Clause an unwarranted place in its analysis, which we 24 discuss next. The 25 B. SOCAR s Rights Under the Due Process Clause 26 The district court recognized that our precedent Texas 27 Trading compelled it to hold that SOCAR possessed rights under -10- 1 the Due Process Clause, thus requiring that jurisdiction over 2 SOCAR meet the minimum contacts requirements of International 3 Shoe. 4 soundness. 5 The district court, however, questioned Texas Trading s These doubts were well-founded. The Due Process Clause famously states that no person shall 6 be . . . deprived of life, liberty or property without due 7 process of law. 8 Texas Trading, we held that a foreign state was a person within 9 the meaning of the Due Process Clause, and that a court asserting 10 personal jurisdiction over a foreign state must in addition to 11 complying with the FSIA therefore engage in a due process 12 scrutiny of the court s power to exercise its authority over the 13 state. 14 personal jurisdiction where the Constitution forbids it. ). 15 Texas Trading reached this conclusion without much analysis, 16 while also noting that cases on point were rare. 17 The FSIA had been enacted only five years earlier, and pre-FSIA 18 suits against foreign states were generally supported by quasi in 19 rem jurisdiction. 20 not only to foreign states but also to their agencies and 21 instrumentalities. 22 Schiffarhtsgesellschaft MBH & Co. v. Navimpex Centrala Navala, 23 989 F.2d 572, 579-80 (2d Cir. 1993) (applying Texas Trading to a 24 foreign trading company wholly owned by Romania that promoted U.S. Const. amend. V (emphasis added). In 647 F.2d at 308, 313 ( [T]he [FSIA] cannot create Id. Id. at 313. Subsequently, we applied Texas Trading See, e.g., Seetransport Wiking Trader -11- 1 2 ship sales through its governmental office in Manhattan ). Since Texas Trading, however, the case law has marched in a 3 different direction. In Republic of Argentina v. Weltover, Inc., 4 the Supreme Court assum[ed], without deciding, that a foreign 5 state is a person for purposes of the Due Process Clause, 504 6 U.S. 607, 619 (1992), but then cited South Carolina v. 7 Katzenbach, 383 U.S. 301, 323-24 (1966), which held that States 8 of the Union are not persons for purposes of the Due Process 9 Clause, 504 U.S. at 619. Weltover did not require deciding the 10 issue because Argentina s contacts satisfied the due process 11 requirements, see id. at 619 & n.2, but the Court s implication 12 was plain: 13 Due Process Clause, why should foreign states? 14 If the States of the Union have no rights under the After Weltover, we noted that we are uncertain whether 15 [Texas Trading] remains good law. 16 Indon., 148 F.3d 127, 134 (2d Cir. 1998). 17 in Hanil Bank because the due process requirements were satisfied 18 in that case. 19 as only the Due Process Clause prevented the district court from 20 asserting personal jurisdiction over SOCAR. 21 See id. Hanil Bank v. PT Bank Negara But we went no further The instant case is different, however, In Price v. Socialist People s Libyan Arab Jamahiriya, 294 22 F.3d 82 (D.C. Cir. 2002), the D.C. Circuit reasoned that because 23 the word person in the context of the Due Process Clause of 24 the Fifth Amendment cannot, by any reasonable mode of -12- 1 interpretation, be expanded to encompass the States of the 2 Union, Katzenbach, 383 U.S. at 323, absent some compelling 3 reason to treat foreign sovereigns more favorably than States of 4 the Union, it would make no sense to view foreign states as 5 persons under the Due Process Clause, 294 F.3d at 96. 6 Price court found no such reason, see id. at 95-100, and we find 7 that case s analysis persuasive. 8 States of the Union both derive important benefits [from the 9 Constitution] and must abide by significant limitations as a The As the Price court noted, the 10 consequence of their participation [in the Union], id. at 96,2 11 yet a foreign State lies outside the structure of the Union, 12 id. (quoting Principality of Monaco v. Mississippi, 292 U.S. 313, 13 330 (1934)). 14 If the States, as sovereigns that are part of the Union, 15 cannot avail themselves of the fundamental safeguards of the Due 16 Process Clause, Price, 294 F.3d at 97, we do not see why foreign 17 states, as sovereigns wholly outside the Union, should be in a 18 more favored position. 19 Court has [n]ever . . . suggested that foreign nations enjoy 1 2 3 4 5 6 7 8 9 10 2 This is particularly so when the Supreme Price compared U.S. Const. art. I, § 10 (prohibiting specific acts by the States), with id. at art. IV, § 4 ( The United States shall guarantee to every State in this Union a Republican form of Government, and shall protect each of them against Invasion; and on Application of the Legislature, or of the Executive (when the Legislature cannot be convened) against domestic Violence. ), and id. at art. VI, cl. 2 ( This Constitution, and the Laws of the United States which shall be made in Pursuance thereof ... shall be the supreme Law of the Land; and the Judges in every State shall be bound thereby, any Thing in the Constitution or Law of the State to the Contrary notwithstanding. ). 294 F.3d at 96. -13- 1 rights derived from the Constitution, and when courts have 2 instead relied on principles of comity and international law to 3 protect foreign governments in the American legal system. 4 For the reasons discussed by the Price court in its thorough 5 opinion, we are unwilling to interpret the Due Process Clause as 6 conferring rights on foreign nations that States of the Union do 7 not possess. 8 erred, albeit understandably in light of Texas Trading, by 9 holding that foreign states and their instrumentalities are Id. at 99. Id. Thus, we hold that the district court 10 entitled to the jurisdictional protections of the Due Process 11 Clause. 12 SOCAR argues otherwise by defending not Texas Trading s 13 reasoning but its significance as precedent. And, to be sure, 14 our court s decisions are binding until overruled by us sitting 15 en banc or by the Supreme Court, United States v. Wilkerson, 361 16 F.3d 717, 732 (2d Cir. 2004), neither of which has happened to 17 Texas Trading. 18 general rule where there has been an intervening Supreme Court 19 decision that casts doubt on our controlling precedent. 20 v. Ashcroft, 372 F.3d 495, 499 (2d Cir. 2004) (internal quotation 21 marks omitted). 22 doubt on Texas Trading to justify its overruling by this panel, 23 see Hanil Bank, 148 F.3d at 134, we have nonetheless circulated 24 this opinion to all active members of our court, and none has We do, however, recognize an exception to this Gelman Although Weltover arguably casts sufficient -14- 1 objected to our departure from Texas Trading. 2 v. Parkes, 497 F.3d 220, 230 n.7 (2d Cir. 2007) (describing our 3 mini-en banc process). 4 Trading conflicts with our holding today that foreign states are 5 not persons entitled to rights under the Due Process Clause, it 6 is overruled. 7 See United States Accordingly, to the extent that Texas Simply overruling Texas Trading, however, and holding that a 8 sovereign state does not enjoy due process protections does not 9 decide the precise question in this case, because SOCAR is not a 10 sovereign state, but rather an instrumentality or agency of one. 11 Frontera contends that, because the FSIA treats foreign states 12 and their agencies and instrumentalities identically, see 13 Kensington Int l Ltd. v. Itoua, 505 F.3d 147, 153 (2d Cir. 2007) 14 (citing 28 U.S.C. § 1603(a)), we should treat SOCAR just as we 15 would treat Azerbaijan for constitutional purposes. 16 fact that SOCAR is deemed a foreign state as a statutory matter, 17 however, does not answer the constitutional question of SOCAR s 18 due process rights. 19 like a foreign state, but similar statutory treatment will not be 20 the reason. 21 The simple SOCAR may indeed lack due process rights However, if the Azerbaijani government exerted sufficient 22 control over SOCAR to make it an agent of the State, then there 23 is no reason to extend to [SOCAR] a constitutional right that is 24 denied to the sovereign itself. TMR Energy Ltd. v. State Prop. -15- 1 Fund of Ukr., 411 F.3d 296, 301 (D.C. Cir. 2005). Although 2 government instrumentalities established as juridical entities 3 distinct and independent from their sovereign should normally be 4 treated as such, this presumption can be overcome if the state 5 so extensively control[s] the instrumentality that a 6 relationship of principal and agent is created, or if 7 adher[ing] blindly to the corporate form . . . would cause . . . 8 injustice. 9 Exterior de Cuba ( Bancec ), 462 U.S. 611, 626-27, 629, 632 First Nat l City Bank v. Banco Para El Comercio 10 (1983); see also Zappia Middle E. Constr. Co. v. Emirate of Abu 11 Dhabi, 215 F.3d 247, 252 (2d Cir. 2000) ( While the presumption 12 of separateness is a strong one, it may be overcome if a 13 corporate entity is so extensively controlled by the sovereign 14 that the latter is effectively the agent of the former, or if 15 recognizing the corporate entity as independent would work a 16 fraud or injustice. ). 17 instrumentality can be treated like its state for the 18 attribution of liability, id. at 622 n.11, we think, as the D.C. 19 Circuit did in TMR Energy, that Bancec s analytic framework is 20 also applicable when the question is whether the instrumentality 21 should have due process rights to which the state is not 22 entitled. 23 Walter Fuller Aircraft Sales, Inc. v. Republic of the Phil., 965 24 F.2d 1375, 1382 (5th Cir. 1992) ( The broader principles upon Although Bancec asked when a state See TMR Energy, 411 F.3d at 301; see also, e.g., -16- 1 which Bancec was based . . . are undoubtedly relevant whenever a 2 plaintiff seeks to disregard a foreign government instrumentality 3 . . . . ). 4 state, as recognized in Bancec and subsequent cases, then, like 5 Azerbaijan, SOCAR lacks due process rights. 6 Accordingly, if SOCAR is an agent of the Azerbaijani The district court did not decide whether SOCAR is an agent 7 of the state because Texas Trading rendered the question 8 unnecessary and, unsurprisingly, there was scant briefing on the 9 issue. SOCAR suggests that the parties lack of focus on the 10 question should be fatal to Frontera s position, because Frontera 11 bears the burden of proving that the corporate entity should not 12 be presumed distinct from a sovereign or sovereign entity. 13 Zappia, 215 F.3d at 252. 14 related burden were not relevant until our decision today, nor 15 did Frontera argue that Bancec should apply. 16 Servs. Corp. v. Legal Servs. Corp., 462 F.3d 219, 232 (2d Cir. 17 2006) ( It is our role to ensure that in making factual findings, 18 the district court applies the proper legal test and applies it 19 correctly. ). 20 SOCAR s relationship with Azerbaijan to decide that SOCAR is not 21 an agent of the state would still not resolve this appeal. 22 would then have to determine whether SOCAR, as a corporation 23 owned by a foreign state but not the state s agent, was entitled 24 to the Due Process Clause s protections. But the Bancec analysis and Frontera s Cf. Brooklyn Legal Moreover, using the parties inattention to -17- We 1 In TMR Energy, the D.C. Circuit called this last question 2 far from obvious. 411 F.3d at 302 n.*. The TMR Energy court 3 observed that aliens receive constitutional protections [only] 4 when they have come within the territory of the United States and 5 developed substantial connections with this country. 6 (quoting United States v. Verdugo-Urguidez, 494 U.S. 259, 271 7 (1990)) (alteration in TMR Energy). 8 so far as to accord due process protections to privately owned 9 foreign corporations. Id. The Supreme Court has gone See Helicopteros Nacionales de Colombia, 10 S.A. v. Hall, 466 U.S. 408, 418-19 (1984); see also, e.g., Bank 11 Brussels Lambert v. Fiddler Gonzalez & Rodriguez, 171 F.3d 779, 12 784 (2d Cir. 1999); Metro. Life Ins. Co. v. Robertson-Ceco Corp., 13 84 F.3d 560, 571 (2d Cir. 1996). 14 would do so for state-owned foreign corporations has not been 15 decided. 16 would be premature for us to address this question without 17 hearing first from the court below. 18 215 F.3d 241, 246 (2d Cir. 2000) (per curiam) ( It is our settled 19 practice to allow the district court to address arguments in the 20 first instance. ). 21 the first instance the district court can determine, in light of 22 Texas Trading s demise and Bancec s new relevance to this 23 context, (1) whether SOCAR is an agent of Azerbaijan, and if not, 24 (2) whether SOCAR is entitled to the protections of the Due Whether, and to what extent, it And, given the present posture of this litigation, it See Farricielli v. Holbrook, Accordingly, we choose to remand so that in -18- 1 Process Clause. 2 II. Jurisdictional Discovery 3 Frontera also argues that the district court erred by 4 rejecting its request for limited discovery of SOCAR s contacts 5 with the United States. 6 for an abuse of discretion. 7 F.3d 181, 186 (2d Cir. 1998). 8 Due Process Clause protects SOCAR, which is for the district 9 court to determine on remand. 10 We review the district court s decision See Jazini v. Nissan Motor Co., 148 This issue is relevant only if the A district court has wide latitude to determine the scope 11 of discovery, In re Agent Orange Prod. Liab. Litig., 517 F.3d 12 76, 103 (2d Cir. 2008), and is typically within its discretion to 13 deny jurisdictional discovery when the plaintiff [has] not made 14 out a prima facie case for jurisdiction, Best Van Lines, Inc. v. 15 Walker, 490 F.3d 239, 255 (2d Cir. 2007) (citing cases). 16 Assuming for the moment that SOCAR has the jurisdictional 17 protections of the Due Process Clause, to establish jurisdiction 18 Frontera must show that SOCAR had continuous and systematic 19 general business contacts with the United States, Metro. Life 20 Ins. Co., 84 F.3d at 568 (quoting Helicopteros, 466 U.S. at 416), 21 a highly fact-sensitive contextual inquiry with no one factor 22 having talismanic significance, id. at 570-71. 23 24 Frontera argued that SOCAR s production-sharing contracts with several U.S. oil companies and loan agreement with a -19- 1 syndicate that included [a] U.S. bank brought it within the 2 district court s jurisdiction. 3 Frontera also alleged that it is highly likely that at least a 4 portion of [SOCAR s] oil and gas revenues are processed through 5 U.S.-based banks. 6 district court dismissed this latter allegation as conclusory, 7 and then found the rest of Frontera s claims insufficient to 8 demonstrate a prima facie case for jurisdiction, reasoning that 9 [t]he fact that American oil companies and one bank have entered Frontera, 479 F. Supp. 2d at 386. Id. at 386-87 (alteration in original). The 10 into contracts with SOCAR for oil production in Azerbaijan does 11 not demonstrate a continuous and systematic presence in the 12 United States. 13 of personal jurisdiction, the district court found it 14 inappropriate to subject SOCAR to the burden and expense of 15 discovery and denied Frontera s request. Id. In the absence of any prima facie showing Id. at 387. 16 Frontera contends that our decision in Seetransport 17 demonstrates that the district court s denial was erroneous. 18 Seetransport, we held that a foreign company s deliberate[] 19 solicitations of business through U.S.-based representatives 20 with a fair measure of permanence or continuity met the minimum 21 requirements for general personal jurisdiction. 22 Frontera argues that SOCAR s contracts with U.S. oil and 23 financial companies were likely the product of the type of 24 deliberate solicitations found sufficient in Seetransport, see -20- In 989 F.2d at 580. 1 id., and that the district court should therefore have granted 2 jurisdictional discovery. 3 is pure speculation on Frontera s part. 4 (Appellant s Br. at 54-55.) But this Seetransport addressed solicitations that were 5 deliberate[,] and not occasional[] or casual[], with the record 6 establishing the defendant s use of a New York office. 7 at 580. 8 American companies, without more, could just as easily be the 9 result of occasional or casual solicitations, or solicitations 989 F.2d Here, the fact that SOCAR has relationships with 10 outside the United States. 11 pointed to anything in the record that suggests otherwise, we 12 will not disturb the district court s discretionary decision not 13 to allow discovery. 14 conclude that the district court acted well within its discretion 15 in declining to permit discovery because the plaintiff had not 16 made out a prima facie case for jurisdiction. ). 17 court is free to consider further discovery requests in light of 18 the questions it must decide on remand. 19 III. 20 Thus, because Frontera has not See Best Van Lines, 490 F.3d at 255 ( We The district Forum Non Conveniens Finally, SOCAR asks us to affirm the district court s 21 dismissal on the alternate basis of forum non conveniens. 22 dismissed for want of jurisdiction, the district court expressly 23 declined to address this argument. 24 practice of allowing district courts to address arguments in the -21- Having Following our settled 1 first instance, Farricielli, 215 F.3d at 246, we express no view 2 on SOCAR s forum non conveniens argument, which it is free to 3 raise again on remand. CONCLUSION 4 5 For the foregoing reasons, we VACATE the district court s 6 dismissal of Frontera s petition and REMAND for further 7 proceedings. -22-

Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You should read the full case before relying on it for legal research purposes.

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.