United States v. Pangang Group Co., No. 19-10306 (9th Cir. 2021)
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The Ninth Circuit affirmed the district court's denial of a motion brought by plaintiffs, four affiliated Chinese companies, seeking to dismiss an indictment charging violations of the criminal provisions of the Economic Espionage Act. The Pangang Companies moved to dismiss the indictment, arguing that they are "instrumentalities" of the government of the People's Republic of China (PRC) and are therefore entitled to sovereign immunity under the Foreign Sovereign Immunities Act (FSIA).
After determining that it had appellate jurisdiction, the panel concluded that, in moving to dismiss the indictment, the Pangang Companies failed to carry their burden to make a prima facie showing that they are instrumentalities of a foreign sovereign within the meaning of the FSIA. In this case, the allegations of the indictment, standing alone, are insufficient to establish that the Pangang Companies were instrumentalities of the PRC on the date they were indicted. The panel explained that, because the Pangang Companies relied solely upon the indictment’s allegations, and presented no evidence to support their motion to dismiss, they necessarily failed to establish a prima facie case that they were foreign states entitled to immunity under section 1604 of the FSIA. Therefore, the motion to dismiss was properly denied.
Court Description: Criminal Law The panel affirmed the district court’s denial of a motion by four affiliated Chinese companies to dismiss an indictment charging violations of the criminal provisions of the Economic Espionage Act. The companies argued that they are “instrumentalities” of the government of the People’s Republic of China (PRC) and are therefore entitled to sovereign immunity under the Foreign Sovereign Immunities Act (FSIA). The district court denied the motion on the grounds that, even assuming that the FSIA’s immunity provisions extend to criminal cases, the companies were not immune in light of the FSIA’s commercial activity exception and its waiver exception. Regarding the Government’s challenges to appellate jurisdiction, the panel perceived no basis for departing from the well-settled caselaw allowing immediate appeals, under the collateral order doctrine, from a denial of foreign * Richard K. Eaton, Judge of the United States Court of International Trade, sitting by designation. UNITED STATES V. PANGANG GROUP 3 sovereign immunity, and rejected the Government’s suggestion that the appeal is unripe. The panel did not need to reach the issues of whether and to what extent the immunity conferred by the FSIA applies in criminal cases. The panel concluded, rather, that in moving to dismiss the indictment, the companies failed to carry their burden to make a prima facie showing that they are instrumentalities of a foreign sovereign within the meaning of the FSIA. The panel explained that the allegations of the indictment, standing alone, are insufficient to establish that the companies were instrumentalities of the PRC on the date they were indicted; and that because the companies relied solely upon the indictment’s allegations, and presented no evidence to support their motions to dismiss, they necessarily failed to establish a prima facie case that they are “foreign state[s]” entitled to immunity under § 1604 of the FSIA.
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