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Media Alerts - Triple A International v. The Democratic Republic of the Congo -- Sixth Circuit
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August 8, 2013
  Triple A International v. The Democratic Republic of the Congo -- Sixth Circuit
Case Name: Triple A International, Inc. v. The Democratic Republic of the Congo

Headline: Sixth Circuit declines to exercise jurisdiction over a foreign nation with no commercial dealings in the United States.

Areas of Law: Foreign Sovereign Immunities Act

Issue(s) Presented: (1) Did the district court properly find that the Congo did not have commercial activity in the United States? (2) Does merely purchasing a product from a corporation with an office in the United States confer jurisdiction on the United States?

Brief Summary: Triple A International, a military-equipment company with offices in several locations, including Michigan, sued the Congo alleging breach of contract because the Congo failed to pay for over $15 million worth of equipment it purchased from Triple A. The Congo moved to dismiss based on sovereign immunity. The district court granted the motion, holding that the Congo was immune from suit under the Foreign Sovereign Immunities Act. Triple A appealed, arguing that purchasing the military equipment was enough to satisfy the Act's substantial-contact requirement. The Sixth Circuit disagreed and affirmed the district court's dismissal of the case.

Significance: This case clarifies that the mere act of purchasing equipment from a corporation with an office in the United States does not confer jurisdiction on United States courts.

Extended Summary:

Triple A International is a Michigan corporation with various offices across the world, including one in Dearborn, Michigan. The Democratic Republic of the Congo is an African country that used to be known as Zaire. In 1993, Zaire ordered nearly $15 million worth of military equipment from Triple A, which was sent directly from a South Korean manufacturer. Seventeen years later, Triple A sued the Congo for breach of contract in the United States District Court for the Eastern District of Michigan. The district court dismissed the case based on sovereign immunity, and Triple A appealed.

Under the Foreign Sovereign Immunities Act, states are usually immune from suit in the United States. But there are a number of exceptions to this general rule, including cases where the action is based on "a commercial activity carried on in the United States by the foreign state; or upon an act performed in the United States in connection with a commercial activity of the foreign state elsewhere; or upon an act outside the territory of the United States in connection with a commercial activity of the foreign state elsewhere and that act causes a direct effect in the United States."

Triple A argued that the first clause applied, that is, that the foreign nation's commercial activity occurred in the United States. The Court rejected this argument, stating that "this case is not based upon commercial activity that the Congo (or Zaire) 'carried on in the United States.'"

The Court said that in reality, Triple A's argument rested solely on the Act's definition of "commercial activity." The Act defines "commercial activity" as "activity carried on by such state and having substantial contact with the United States." Specifically, Triple A argued that Zaire's purchase of equipment, though it was overseas, was substantially in the United States because Triple A was an American-based company and it performed some of its contractual obligations here.

Though the Court acknowledged that this definition is far from clear, it explained that the definition clearly could not be satisfied on the facts of this case. The Court rejected Triple A's argument that the definition could be satisfied even if no commercial activity had taken place in the United States. The Court explained that allowing this interpretation would "make nonsense of the language that ยง 1603(e) is supposed to define." Further, Triple A's interpretation would negate any need for the distinctions found in the statutory language. Specifically, Triple A's interpretation of the definition would allow the first clause of the definition to govern any case where the foreign state's activity "has 'substantial contact' with the United States, . . . regardless of whether that activity occurs here or overseas." With this reading, the second and third clauses would, therefore, no longer be useful.

Circuit Judge Merritt concurred in the Court's holding. He emphasized that the Congo had insufficient contacts with the United States to satisfy the basic requirements for personal jurisdiction: "We have no claim here that the Congo representatives came to the United States or had any products shipped to or from the United States. We have no claim that the Congo ordered any products in the United States, and Triple A does not argue that the Congo's order had a 'direct effect' in the United States."

Link to Full Opinion:

Panel: Batchelder, Merritt, and Kethledge

Author of Opinion: Kethledge, Merritt concurred

Argument: January 16, 2013

Date of Issued Opinion: July 2, 2013

Docket Number: 12-1595

Decided: Affirmed

Case Alert Author: Peter J. Tomasek

Counsel: ARGUED: Davidde A. Stella, KERR, RUSSELL AND WEBER, PLC, Detroit, Michigan for Appellant. ON BRIEF: Davidde A. Stella, Robert E. Forrest, KERR, RUSSELL AND WEBBER, PLC, Detroit, Michigan, for Appellant. Eric Linden, Patrice S. Arend, JAFFE RAITT HEUER & WEISS, P.C., Southfield, Michigan, for Appellee.

Case Alert Circuit Supervisor: Professor Eileen Kavanagh

Edited: 08/08/2013 at 12:56 PM by Mark Cooney

    Posted By: Mark Cooney @ 08/08/2013 12:31 PM     6th Circuit  

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