UNITED STATES COURT OF APPEALS FOR THE D.C. CIRCUIT


PHOENIX CNSLTNG INC

v.

REPUBLIC OF ANGOLA


99-7032a

D.C. Cir. 2000


*	*	*


Ginsburg, Circuit Judge: Phoenix Consulting sued the  Republic of
Angola for breach of contract, and Angola moved  to dismiss the suit
for lack of subject matter jurisdiction  under the Foreign Sovereign
Immunities Act of 1976 (FSIA),  28 U.S.C. ss 1330, 1602-1611. The
district court, accepting  as true for purposes of the motion the
plaintiff's allegation  that Angola had executed a contractual waiver
of immunity,  denied Angola's motion. Angola appeals from the court's 


Because Angola's motion to dismiss raised a factual chal- lenge to the
court's subject matter jurisdiction under the  FSIA, the district
court erred in accepting as true the  jurisdictional facts alleged by
the plaintiff. Instead, the court  should have settled any contested
jurisdictional facts neces- sary to decide Angola's motion to dismiss.
We therefore  remand the matter to the district court for further
proceed- ings consistent with this opinion.


I. Background


Phoenix Consulting, Inc., a United States affiliate of Phoe- nix
Holdings, Ltd. of the United Kingdom (hereinafter col- lectively
referred to as Phoenix), entered into an agency  contract with Eduardo
Neto Sangueve. Sangueve was au- thorized to negotiate the sale to the
Republic of Angola of a  prefabricated building owned by Phoenix and
stored in An- gola.


Sangueve proposed the sale in a meeting with Jose Anibal  Rocha,
Angola's Minister of Territorial Administration. The  outcome of this
meeting and the subsequent chain of events  are disputed by the
parties. Phoenix claims that Rocha, on  behalf of Angola, contracted
to purchase the building for  $325,000 (U.S.), and that Angola had its
agents remove the  building from storage but never paid for it.
Angola, in  contrast, maintains that Rocha merely took Phoenix's
propos- al under consideration, and that neither he nor any other 
Angolan official contracted to purchase the building. Angola 
professes to have no knowledge of who removed the building  from


Phoenix filed suit in the Superior Court of the District of  Columbia
claiming Angola had breached its contract or, alter- natively, had
converted Phoenix's property or been unjustly  enriched. After default
judgment was entered in favor of  Phoenix, Angola removed the case to
the United States  District Court for the District of Columbia. Angola
then  successfully moved the district court to vacate the default 
judgment and, prior to filing an answer to the complaint,  moved to
dismiss for, among other reasons, lack of subject  matter jurisdiction
under the FSIA. In response, Phoenix  invoked three exceptions to
immunity under the FSIA, any  one of which would provide the district
court with subject  matter jurisdiction: waiver, 28 U.S.C. s
1605(a)(1); commer- cial activity, id. s 1605(a)(2); and a taking of
property in  violation of international law, id. s 1605(a)(3). In
support of  the waiver exception, Phoenix proffered evidence that
Rocha,  as Angola's agent, had executed a written sales contract 
containing a choice of law provision subjecting the contract to  the
jurisdiction and laws of the United States--which, accord- ing to the
legislative history of the FSIA, would by implica- tion have waived
Angola's immunity from suit. See H.R. Rep.  No. 94-1487, at 18 (1976),
reprinted in 1976 U.S.C.C.A.N.  6604, 6616-17. Angola replied with
Rocha's sworn declara- tion that the signature on the written contract
was a forgery  and that Angola had never agreed to any contract, much
less  one containing a waiver provision.


The district court denied Angola's motion to dismiss. First  it held
that the choice of law provision would constitute a  waiver of
sovereign immunity. Then, stating that "[o]n mo- tion to dismiss, the
court is to consider all allegations of  jurisdictional facts in [the
plaintiff's] favor," the court con- cluded that Phoenix's allegation
that Angola had executed the  written contract would, if proven,
establish that Angola had  waived its sovereign immunity.


Angola brings this interlocutory appeal of the district  court's order
pursuant to 28 U.S.C. s 1291 and the collateral  order doctrine of
Cohen v. Beneficial Indus. Loan Corp., 337  U.S. 541 (1949). See
Jungquist v. Sheikh Sultan Bin Khali- fa, 115 F.3d 1020, 1025-26 (D.C.
Cir. 1997); Foremost-


McKesson, Inc. v. Islamic Republic of Iran, 905 F.2d 438, 443  (D.C.
Cir. 1990). Upon appeal, Angola raises only the follow- ing question
of law: May a district court resolve a sovereign  defendant's factual
challenge to the court's subject matter  jurisdiction under the FSIA
by accepting as true the plain- tiff's allegations of jurisdictional
facts?


II. Analysis


Under the FSIA a foreign state is immune from the  jurisdiction of both
the federal and the state courts, except as  provided by international
agreements, see 28 U.S.C.  s 1330(a); id. s 1604, by nine specifically
enumerated excep- tions, see id. s 1605(a)(1)-(7), (b), (d), and by
certain other  exceptions relating to counterclaims in actions brought
by the  foreign state itself, see id. s 1607. If no exception applies,
a  foreign sovereign's immunity under the FSIA is complete:  The
district court lacks subject matter jurisdiction over the  plaintiff's
case, see id. s 1330(a). Thus the sovereign has "an  immunity from
trial and the attendant burdens of litigation,  and not just a defense
to liability on the merits." Foremost- McKesson, 905 F.2d at 443. In
order to preserve the full  scope of that immunity, the district court
must make the  "critical preliminary determination" of its own
jurisdiction as  early in the litigation as possible; to defer the
question is to  "frustrate the significance and benefit of entitlement
to immu- nity from suit." Id. at 449.


The FSIA establishes a specific framework for determining  whether a
sovereign is immune from suit and consequently  whether the district
court has jurisdiction. As a threshold  matter, if the sovereign makes
a "conscious decision to take  part in the litigation," then it must
assert its immunity under  the FSIA either before or in its responsive
pleading.  Foremost-McKesson, 905 F.2d at 443-45. This requirement 
holds even though FSIA immunity is jurisdictional because  failure to
assert the immunity after consciously deciding to  participate in the
litigation may constitute an implied waiver  of immunity, 28 U.S.C. s
1605(a)(1), which invests the court  with subject matter jurisdiction
under 28 U.S.C. s 1330(a). 


See H.R. Rep. No. 94-1487, at 18 (1976), reprinted in 1976 
U.S.C.C.A.N. 6604, 6616-17.*


Once the defendant has asserted the jurisdictional defense  of immunity
under the FSIA, the court's focus shifts to the  exceptions to
immunity laid out in 28 U.S.C. ss 1604, 1605,  and 1607. "In
accordance with the restrictive view of sover- eign immunity reflected
in the FSIA," the defendant bears  the burden of proving that the
plaintiff's allegations do not  bring its case within a statutory
exception to immunity.  Transamerican S.S. Corp. v. Somali Democratic
Republic,  767 F.2d 998, 1002 (D.C. Cir. 1985); see Princz v. Federal 
Republic of Germany, 26 F.3d 1166, 1171 (D.C. Cir. 1994).  By moving
to dismiss, the defendant may challenge either the  legal sufficiency
or the factual underpinning of an exception,  and how the district
court proceeds to resolve the motion to  dismiss depends upon whether
the motion presents a factual  challenge.


If the defendant challenges only the legal sufficiency of the 
plaintiff's jurisdictional allegations, then the district court 
should take the plaintiff's factual allegations as true and  determine
whether they bring the case within any of the  exceptions to immunity
invoked by the plaintiff. See, e.g.,  Saudi Arabia v. Nelson, 507 U.S.
349, 351, 361 (1993) (disput- ed allegations forming basis for suit,
even if true, not "com- mercial activity" within meaning of exception
therefor);  Princz, 26 F.3d at 1172 (disputed allegations of use of
U.S.  mail and banking system, even if true, not "direct effect in the
 United States" of commercial activity within meaning of  exception);
Foremost-McKesson, 905 F.2d at 450 (undisputed 




__________

n * This court has not yet addressed whether and upon what facts  "the
intentionality requirement implicit in s 1605(a)(1)," Princz v. 
Federal Republic of Germany, 26 F.3d 1166, 1174 (D.C. Cir. 1994), 
might allow a sovereign defendant to claim immunity after con-
sciously deciding to take part in the proceeding and filing a respon-
sive pleading. See Alpha Therapeutic Corp. v. Nippon Hoso Kyo- kai,
199 F.3d 1078 (9th Cir. 1999) (no waiver where in-house counsel  of
public broadcaster, unaware of pleading requirement when filing 
answer, raised FSIA promptly upon discovering requirement less  than
three months after complaint filed).


allegations of "commercial activity" adequate to survive mo- tion to
dismiss). In some cases, however, the motion to  dismiss will present
a dispute over the factual basis of the  court's subject matter
jurisdiction under the FSIA, that is,  either contest a jurisdictional
fact alleged by the plaintiff, see,  e.g., Filetech S.A. v. France
Telecom S.A., 157 F.3d 922, 931- 32 (2d Cir. 1998) (factual dispute
whether sufficient commer- cial activity for jurisdiction), or raise a
mixed question of law  and fact, see, e.g., Foremost-McKesson, 905
F.2d at 448-49  (dispute whether person alleged to have harmed
plaintiff was  agent of sovereign). When the defendant has thus
challenged  the factual basis of the court's jurisdiction, the court
may not  deny the motion to dismiss merely by assuming the truth of 
the facts alleged by the plaintiff and disputed by the defen- dant.
Instead, the court must go beyond the pleadings and  resolve any
disputed issues of fact the resolution of which is  necessary to a
ruling upon the motion to dismiss. See  Jungquist, 115 F.3d at
1027-28; Foremost-McKesson, 905  F.2d at 448-49; see also Filetech,
157 F.3d at 932; Moran v.  Saudi Arabia, 27 F.3d 169, 172 (5th Cir.
1994); Gould v.  Pechiney Ugine Kuhlmann, 853 F.2d 445, 451 (6th Cir.
1988);  cf. Herbert v. National Academy of Sciences, 974 F.2d 192, 
197-98 (D.C. Cir. 1992) (affirming district court's resolution of 
disputed facts necessary for subject matter jurisdiction under 
Copyright Act). The district court retains "considerable lati- tude in
devising the procedures it will follow to ferret out the  facts
pertinent to jurisdiction," but it must give the plaintiff  "ample
opportunity to secure and present evidence relevant  to the existence
of jurisdiction." Prakash v. American Uni- versity, 727 F.2d 1174,
1179-80 (D.C. Cir. 1984). In order to  avoid burdening a sovereign
that proves to be immune from  suit, however, jurisdictional discovery
should be carefully  controlled and limited, see Foremost-McKesson,
905 F.2d at  449; it should not be authorized at all if the defendant
raises  either a different jurisdictional or an "other non-merits 
ground[ ] such as forum non-conveniens [or] personal jurisdic- tion"
the resolution of which would impose a lesser burden  upon the


With these principles in mind, we see that in ruling upon  Angola's
motion to dismiss the district court erred by assum- ing the truth of
an allegation of jurisdictional fact contested  by the defendant. When
Angola asserted immunity under  the FSIA, Phoenix invoked the waiver
exception thereto and  presented evidence that Angola had executed a
written con- tract waiving its immunity under the FSIA. Angola
respond- ed with a challenge to the facts upon which Phoenix relied
for  the waiver exception: It presented evidence that the written 
contract was a forgery and that it had never agreed to waive  its
immunity from suit. The district court was required to  resolve this
factual dispute material to its subject matter  jurisdiction; and in
order to preserve the significance and  benefit of a foreign
sovereign's immunity from suit under the  FSIA, the court could not
"postpon[e] the determination of  subject matter jurisdiction until
some point during or after  trial." Gould, 853 F.2d at 451. We
therefore remand this  matter to the district court for further
consideration whether  it has subject matter jurisdiction under the


III. Conclusion


For the foregoing reasons, the order of the district court is  reversed
in part and the case remanded for further proceed- ings consistent
with this opinion.


So ordered.