Ninth Circuit Egypt Sovereign ImmunityOpening Brief Lasheen

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Docket No. 10-17034

In the

United States Court of Appeals For the

Ninth Circuit

EMBASSY OF THE ARAB REPUBLIC OF EGYPT, ARAB REPUBLIC OF EGYPT, and THE EMBASSY OF

EGYPT CULTURAL AND EDUCATION BUREAU,

Defendants-Appellants, v.

MOHAMED E. LASHEEN and THE LOOMIS COMPANY,

Plaintiffs-Appellees. _________________________________

Appeal from a decision of the United States District Court for the Eastern District of

California, No. S-01-00227 LKK-JFM · Honorable Lawrence K. Karlton

BRIEF OF APPELLANTS JOHN HERMINA, ESQ. GEORGE HERMINA, ESQ. HERMINA LAW GROUP 8327 Cherry Lane Laurel, Maryland 20707 (301) 206-3166 Telephone (301) 490-7913 Facsimile [email protected] Email

Attorneys for Appellants Embassy of the Arab Republic of Egypt, Arab Republic of Egypt, and the Embassy of Egypt Cultural and Education Bureau

HERMINALAW GROUP (301) 206-3166 PRINTED ON RECYCLED PAPER

Case: 10-17034 01/24/2011 Page: 1 of 39 ID: 7621490 DktEntry: 7

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TABLE OF CONTENTS

TABLE OF AUTHORITIES................................................................................ iii

I. STATEMENT OF JURISDICTION................................................................1

A. The District Court’s Jurisdiction .................................................................1

B. The Court of Appeals’ Jurisdiction..............................................................3

C. Filing Dates Establishing Timeliness of Appeal.........................................3

II. STATEMENT OF ISSUES.............................................................................3

III. STATEMENT OF THE CASE .....................................................................4

A. Nature of the Case.........................................................................................4

B. Course of Proceedings ..................................................................................5

IV. STATEMENT OF FACTS.............................................................................7

A. The Health Care Benefits Plan ....................................................................7

B. Appellants’ Prior Appeal .............................................................................9

C. THE DISTRICT COURT’S FINDINGS .....................................................9

1. The Waiver Exception As to Lasheen ..........................................................9

2. The Commercial Activity Exception ..........................................................11

V. SUMMARY OF ARGUMENT......................................................................12


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VI. ARGUMENT..................................................................................................14

A. Statement of Standard of Review...............................................................14

B. The District Court Erred in its Determination That The FSIA Does Not

Apply to Lasheen’s Claim. ................................................................................17

1. Immunity is presumed under the FSIA.......................................................17

2. The "waiver" exception to the FSIA does not apply to Lasheen’s claim

against the Appellants.......................................................................................19

3. The commercial activity exception does not apply to Lasheen's claims

against the Egypt Defendants. ..........................................................................23

a. Lasheen was a civil servant .....................................................................24

4. The acts of which Lasheen complains were discretionary functions and

therefore cannot form a basis for jurisdiction under the FSIA. ........................32

VII. CONCLUSION............................................................................................34

CERTIFICATE OF COMPLIANCE..................................................................35

STATEMENT OF RELATED CASES ...............................................................36

PROOF OF SERVICE..........................................................................................37


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TABLE OF AUTHORITIES

CASES

Adler v. Federal Republic of Nigeria, 219 F.3d 869 (9th Cir. 2000) ......................13

Amorrortu v. Republic of Peru, 2008 WL 3338029...........................................18,26

Anglo-Iberia Underwriting Management Company v. Lodderhose, 2008 WL 190364 (S.D.N.Y. Jan. 22, 2008).........................................................................22

Asociacion de Reclamantes v. United Mexican States, 735 F.2d 1517 (C.A.D.C. 1984), cert. denied, 470 U.S. 1051 (1985).............................................28 Blaxland v. Commonwealth Dir. of Public Prosecutions, 323 F.3d 1198 (9th Cir. 2003) .........................................................................................................13 Cargill Intl, S .A. v. M/T Pavel Dybenko, 991 F.2d 1012 ..................................16,19

Chevron USA Inc. v. Bronster, 363 F.3d 846. 855 (9th Cir. 2004) .........................14

Compania Mexicana De Aviacion, S.A. v. U.S. Dist. Ct., 859 F.2d 1354 (9th Cir. 1988)...........................................................................................................2 Concrete Pipe ,Prods. v. Construction Laborers Pension Trust, 508 U.S. 602

(1993) ...................................................................................................................14 Corza v. Banco Cent. de Reserva Del Peru, 243 F.3d 519 (9th Cir. 2001) ............13

Coyle v. P. T. Garuda Indonesia, 363 F.3d 979 (9th Cir. 2004) .............................13

Easley v. Cromartie, 532 U.S. 234 (2001) ..............................................................14

El-Hadad v. United Arab Emirates, 496 F.3d 658 (C.A.D.C. 2007) ............21,23,25

Embassy of the Arab Republic of Egypt v. Lasheen, 603 F.3d 1166 (9th Cir. 2010) .........................................................................................................2,5


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Feldman v. Allstate Ins. Co., 322 F.3d 660, 665 (9th Cir.) .....................................14

Frolova v. Union of Soviet Socialist Republics, 761 F.2d 370 (7th Cir. 1985) ........18

Gates v. Victor Fine Foods, Supra., 54 F.3d 1457........................................12,15,20

Gupta v. Thai Airways International, Ltd., 487 F.3d 759 .......................................2

Holden v, Canadian Consulate, 92 F.3d 918 (9th Cir. 1996) ..................................21

Holden, 92 F.3d 918 ................................................................................................21

Husain v. Olympic Airways, 316 F.3d 829 (9th Cir. 2002), affd, 540 U.S. 644 (2004) ...................................................................................................................14

In re Estate of Ferdinand Marcos Human Rights Litig., 94 F.3d 539 (9th Cir. 1996) .........................................................................................................13 Joseph v. Office of the Consulate Gen. of Nigeria, 830 F.2d 1018 (9th Cir. 1987), cert. denied, 485 U.S. 905 (1988)..........................................9,17,19 Ka Makani 'O Kohala Ohana Inc. v. Water Supply, 295 F.3d 955 (9th Cir. 2002) .........................................................................................................13 Kato v. Ishihara, 360 F.3d 106 (2d Cir. 2004) ..............................................21,22,25

Koirala v. Thai Airways Ini'l, Ltd., 126 F.3d 1205 (9th Cir. 1997) ........................14

League of Wilderness Defenders v. Forsgren, 309 F.3d 1181 (9th Cir. 2002) .......13

MacArthur Area Citizens Assn'v. Republic of Peru, 809 F.2d 918 (D.C. Cir. 1987).......................................................................................................28 Ness v. Commissioner, 954 F.2d 1495 (9th Cir. 1992) ...........................................13

NYSA-ILA Pension Trust Fund v. Garuda Indonesia,7 F.3d 35 (2nd Cir. 1993) .....13

Park v. Shin, 313 F.3d 1138 (9th Cir. 2002) ...........................................................13

Pullman-Standard v. Swint, 456 U.S. 273, 289 n. 1982) ........................................14


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Republic of Argentina v. Weltover, Inc., 504 U.S. 607 ......................................22,25

Saudi Arabia v. Nelson, 507 U.S. 349.....................................................................15

Sklar v. Commissioner, 282 F.3d 610, 612 (9th Cir. 2002).....................................13

U.S. v. S.A. Empresa de Viacao Aerea Rio Grandense (Varig Airlines), 467 U.S. 797 (1984) ............................................................................................................28

Zivkovic v. Southern California Edison Co., 302 F.3d 1080 (9th Cir. 2002)..........14

STATUTES

28 U.S.C. § 1603(a), (b) ..........................................................................................16

28 U.S.C. § 1604 .....................................................................................................15

28 U.S.C. § 1605(a)(5) ............................................................................................27

28 U.S.C. § 1605(a)(5)(A).......................................................................................10

28 U.S.C. §1605(a)(1) .............................................................................................16

28 U.S.C. §2860(a)..................................................................................................28

29 U.S.C. § 1001 .....................................................................................................26

29 U.S.C. § 1003(a).................................................................................................26

Employee Retirement Security Income Act (“ERISA”), 29 U.S.C. 1001 ................1

Foreign Sovereign Immunities Act, 28 U.S.C. § 1601-1607 ....................................1


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OTHER AUTHORITIES

H.R. Rep. 1487, 94th Cong., 2d. Sess. 18, reprinted in 1976 U.S.C.C.A.N. 6604 .28

H.R. Rep. No. 94-1487, 94th Cong., 2d Sess. 18, reprinted in 1976 U.S. Code Cong. & Admin. News 6604 ...............................................................................16

H.Rep. No. 94-1487, 94th Cong., 2d Sess. reprinted at 1976 U.S.C.C.A.N. 6604 .21


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I. STATEMENT OF JURISDICTION

A. The District Court’s Jurisdiction

Appellants, the Embassy of Egypt, The Arab Republic of Egypt (“Egypt”),

and the Embassy of Egypt Cultural and Educational Bureau (collectively referred to

in this Brief as “Appellants”) bring this appeal because the United States District

Court for the Eastern District of California (“the District Court”) lacks subject

matter jurisdiction over the claim brought by Mohamed E. Lasheen (“Lasheen” or

“Appellee”) against the Appellants. Lasheen’s Complaint was premised upon a

Federal question jurisdiction, alleging a violation of the Employee Retirement

Security Income Act (“ERISA”), 29 U.S.C. 1001, et seq. [ER 185-189] In addition

to suing the Appellants for violation of a plan provided to Egyptian nationals,

Lasheen also sued The Loomis Company (“Loomis”), which was the Benefit

Services Manager of the plan. [ER 188:15-21]

In their Answer to the Complaint, the Appellants asserted, inter alia, the of

lack of jurisdiction pursuant to the Foreign Sovereign Immunities Act, 28 U.S.C. §

1601, et seq. (“FSIA”). [ER 179-183] Loomis filed a Cross-Claim against the

Appellants alleging a breach of a benefit service management agreement entered

into between Loomis and Appellants. Loomis and Appellee reached a settlement

agreement and they jointly requested that the District Court find that the FSIA does

not apply to bar Appellee’s claim and Loomis’ Cross-Claim. On February 1, 2008,


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the District Court entered an Order finding that the FSIA is inapplicable to Loomis’

claims against Appellants, but declined to consider whether the Appellants are

immune from Lasheen’s ERISA claim. [ER 167-178]

In an Opinion dated May 10, 2010, this Court affirmed the District Court’s

finding that the FSIA does not deprive the federal courts of jurisdiction as to

Loomis’ claims, but reversed the District Court’s determination “that the issue of

whether the FSIA immunizes the Egyptian Defendants against Lasheen’s claims

was not before it.” Embassy of the Arab Republic of Egypt v. Lasheen, 603 F.3d

1166, 1173 (9th Cir. 2010). Therefore, this Court remanded the case to the District

Court “to make that determination in the first instance.” Id.

On August 31, 2010, the District Court issued an Opinion in which it

determined that the Appellants have waived sovereign immunity. [ER 1-11].

B. The Court of Appeals’ Jurisdiction

Orders regarding the applicability of the FSIA are immediately appealable

under the collateral order doctrine. See Gupta v. Thai Airways International,

Ltd., 487 F.3d 759, 763-764 and n. 6 (9th Cir. 2007), citing Compania Mexicana De

Aviacion, S.A. v. U.S. Dist. Ct., 859 F.2d 1354, 1358 (9th Cir. 1988) (per

curiam). The applicability of the FSIA was the subject of the District Court's August

31, 2010 Order. [ER 1-11]


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C. Filing Dates Establishing Timeliness of Appeal

On August 31, 2010, the District Court filed an Order denying Appellants’

Motion to Dismiss or In the Alternative for Summary Judgment and granting

Lahseen and Loomis’ joint motion for a determination as the FSIA immunity.

[ER 1-11] The Appellants filed a Notice of Appeal of the Court’s Order on

September 9, 2010. [ER 191-211]

II. STATEMENT OF ISSUES

1. Did the Court err in its determination that the FSIA does not apply

to Lasheen’s claim?

2. Did the District Court err in finding that the "waiver" exception is

applicable to Lasheen’s claim against Appellants even though

there was no contract and no failure to assert the affirmative

defense under the FSIA?

3. Did the District Court err in finding that the "commercial activity"

exception to the FSIA may apply to the Egypt Appellants merely

because Appellants provided ERISA coverage to their own citizens

in the United States?

III. STATEMENT OF THE CASE

A. Nature of the Case

The late Appellee Mohamed Lasheen was an Egyptian national who was


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employed by the public university system in Egypt and was considered a civil

servant. [ER 150-151:4-14] The Egyptian Government sent the Appellee to the

United States in March of 2000 where he was under a temporary visa that

required him to return and be barred from re-entering the United States for two

years. [ER 151:11-14] Mr. Lasheen’s healthcare coverage-eligibility decision was

made under the Egyptian health insurance plan made available for civil servants,

“using Egyptian Government guidelines and Egyptian law.” [ER 151:15-23]

Shortly after his arrival in the United States, Lasheen filed a claim with

Appellants through Loomis for coverage of a liver transplant and the claim was

denied due to a preexisting condition of, and treatment for, hepatitis C. Lasheen

died, and a representative of his estate filed an ERISA claim in his name against

Appellants and Loomis. [ER 2:11-15]

Loomis filed a Cross-Claim against the Appellants, and, sometime

thereafter, Loomis and Lasheen reached a settlement agreement and submitted a

joint motion requesting that the District Court find that the FSIA inapplicable to

Lasheen’s claim and Loomis’ Cross-Claim. The District Court determined that

the FSIA did not apply to the underlying action finding an exception as to

Loomis, but not as to Lasshen. An appeal from that decision was taken, and this

Court remanded the case for the District Court to issue a separate determination as

to whether the FSIA applies to Lasheen’s ERISA claim. The District Court issued


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a decision finding that the Appellants waived immunity under the FSIA, and this

appeal followed.

B. Course of Proceedings

On February 2, 2001, Mohamed Lasheen, through a personal

representative, brought the subject action in the District Court against Loomis, the

Appellants, and other parties, alleging, among other things, violations of ERISA.

[ER 185-189]

On November 31, 2005, Loomis filed a Cross-Claim against Appellants for

breach of contact seeking indemnity and attorneys fees for defending the Lasheen

claim against Loomis. Subsequently in 2007, Loomis and Lasheen entered into a

settlement agreement, and on November 6, 2007, both parties requested, through a

Joint Special Motion, that the District Court find that the FSIA does not apply to

Lasheen’s ERISA claim and Loomis’ Cross-Claim against the Appellants.

On February 1, 2008, the District Court granted the Joint Special Motion,

finding that the FSIA is inapplicable to the Appellants. [ER 167] On February 29,

2010, the Appellants filed a Notice of Appeal as to the District Court Order

regarding the FSIA inapplicability.

On May 10, 2010, this Court issued an opinion, in which the Court, inter

alia, affirmed the finding as to the lack of Appellants’ immunity with respect to


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Loomis, but remanded the matter to the District Court for a distinct analysis as to

whether the FSIA was also inapplicable to Lasheen’s claim. Embassy of the Arab

Republic of Egypt, supra 603 F.3d 1166 (9th Cir. 2010). [ER 155]

Shortly after the remand, the District Court issued a briefing schedule

directing Appellants to file a motion for summary judgment, Lasheen to file an

Opposition, giving Appellants an opportunity for reply, and setting a hearing date.

[ER 153]. After hearing from the parties, the Court issued an Order finding that the

FSIA did not immunize the Appellants as to Lasheen’s claim. [ER 1-11] The

Appellants filed a timely appeal of the District Court’s decision on September 14,

2010.

IV. STATEMENT OF FACTS

A. The Health Care Benefits Plan

The late Appellee Mohamed Lasheen was an Egyptian national who was

employed by the public university system in Egypt and was an Egyptian civil

servant. [ER 150-151:4-14] The Egyptian Government sent the Appellee to the

United States in March of 2000 where he was under a temporary visa that

required him to return and be barred from re-entering the United States for two

years. [ER 151:11-14] Mr. Lasheen’s coverage-eligibility decision was made

under the Egyptian health insurance plan (“the Plan”), which was made available

for civil servants, “using Egyptian Government guidelines and Egyptian law.”


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[ER 151:15-23]

The Plan contained specific conditions and prerequisites for eligibility and

coverage, including, according to a summary of plan benefits, the following:

“ELIGIBLE TEACHERS/STUDENTS Eligibility for coverage under this Plan is limited to … international students who: (1) are eligible participants … of … [an] insurance program sponsored by the government of their Home Country … ELIGIBILITY REQUIREMENTS As an International Student ... or teacher, you are eligible for coverage under this Plan only if you satisfy all of the following requirements: a. maintain domicile and citizenship or naturalization status in the

Home Country;

b. are under age 65;

c. are a student enrolled for a minimum of six credit hours per semester (if applicable) and are engaged, full-time, in educational, or research activities while attending an Institution of Higher Learning in the United States, or a teacher working at least 30 hours per week employed by the Embassy of Egypt and Educational Bureau;

d. have duly demonstrated evidence of good health at the point of entry into the United States, as required by the government of your Home Country, if applicable;

e. hold a valid, current foreign passport, a valid "F" or "J" visa, issued by U.S. Department of State, and a valid Form IAP66, or Form 1-20, issued by the U.S. Immigration and Naturalization Service; and

f. have neither received nor applied for naturalization or permanent residency status in the United States, Puerto Rico or


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Canada, or for any other change in your immigration status in the United States as an "F" or "J" visa holder.” [ER 76]

A covered person's spouse who was a U.S. citizen or had permanent

residence in the United States was not eligible for coverage under the Plan. [ER 77]

The Plan was thus designed for the benefit of Egyptian nationals in the United

States temporarily, teaching or studying, under a valid "F" or "J" visa holder. In

addition, the Plan provided for specific exclusions from coverage, including a

preexisting condition exclusion:

“The Plan will not compensate any Covered Person for expenses incurred for any condition, regardless of the condition, for which medical advice, diagnosis, care or treatment was recommended or received within the six month period prior to the enrollment date...” [ER 88]

B. Appellants’ Prior Appeal

As this Court noted in its summary of facts, in Embassy of the Arab

Republic of Egypt, Supra., the District Court found “that the FSIA did not deprive

federal courts of jurisdiction over the claims against the Appellants because the

commercial activities and waiver exceptions applied.” 603 F.3d 1166, 1169 (9th Cir.

2010). Although this Court affirmed the District Court’s finding as to Loomis, the

Court stated that “the existence of an exception under the FSIA for Loomis’ claims

does not control whether the FSIA blocks Lasheen’s claims.” Id. at 1172.


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C. THE DISTRICT COURT’S FINDINGS

1. The Waiver Exception As to Lasheen

The District Court based its conclusion that the “waiver” exception to the

FSIA applies to the Lasheen claim upon its reading of Joseph v. Office of the

Consulate Gen. of Nigeria, 830 F.2d 1018 (9th Cir. 1987), cert. denied, 485 U.S.

905 (1988). The District Court specifically based its analysis upon the existence of

“an agreement to adjudicate a dispute” as constituting “a waiver by implication.”

[ER 6:9-13]

Although the District Court made specific reference to the Agreement between

Loomis and the Cultural Office as a waiver of the FSIA [ER 6:17-19 and 7:1], it

considered a plan document [ER 7:2-4] to be the equivalent to an agreement,

between Lasheen and the Appellants, under its analysis. [ER 6:2-12]. The Court

acknowledged what it termed “three wrinkles in this argument” [ER 7:13; 8:1-20

and 9:1-11]1. The first wrinkle facing the District Court was the fact that the

booklet was not a contract. [ER 7:15-16]; the second wrinkle was that “the plan

does not explicitly state against whom … suits may be brought” [ER 8:9-10]; and

the third wrinkle was that “it is not obvious that the plan constitutes a contract

between the Egyptian defendants and Lasheen.” [ER 9:1-3]. In analyzing the

1In addition to acknowledging that there were three wrinkles, the Court noted “And I concede

that … the FSIA creates another level of concern…” [ER transcript at page 7: 10-15].


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problems created by the document, the Court proceeded to state that: “[t]hese

wrinkles do not appear to be significant” because “it does not fall to the plaintiff to

iron them out.” [ER 9:13-14].

In making its waiver exception determination, the District Court did not

consider the Appellants' argument that because Lasheen was a civil servant of the

Egyptian government, the conduct of which Lasheen complained was governmental

rather than commercial, or their arguments that the alleged acts, of which Lasheen

complained, were "discretionary functions." [ER 131-135 & 139-141] under 28

U.S.C. § 1605(a)(5)(A).

In their Memorandum in Support of their Motion to Dismiss, Appellants

argued that the conduct in providing health coverage to a civil servant is uniquely

sovereign, that because the plan in question is maintained outside of the United

States, ERISA would not be implicated, and that neither exception applies to

Lasheen’s claim [ER 131-143].

2. The Commercial Activity Exception

After discussing the waiver exception, the District Court stated that because

he found that the waiver exception applies, “the court does not discuss the

commercial activities exception.” [ER 6:2-3]. In a footnote, the District Court

stated that “[i]f forced to confront the issue, the court would hold that the Egyptian

defendants’ provision of health benefits in the United States under an ERISA


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insurance framework constitutes commercial activity.” [ER 6:22-24]. Indeed, at

the hearing on the Motion to Dismiss, the Court explained its interpretation of the

exception and its view that the conduct in providing ERISA is “very ordinary. We

see ERISA cases in this court every other Tuesday.” [ER 18:4-10]

V. SUMMARY OF ARGUMENT

The District Court erred in equating a booklet to a contract where the

booklet amounts to no contract and contains no specificity as to contracting parties

and as to who may be sued. The “wrinkles” found by the District Court preclude

any finding that the plan constituted a waiver. The Court’s waiver finding was

based on a waiver by implication. [ER 6:2] An implicit waiver is usually only

found where: "(1) a foreign state has agreed to arbitration in another country; (2) a

foreign state has agreed that a contract is governed by the law of a particular

country; and (3) a foreign state has filed a responsive pleading in a case without

raising the defense of sovereign immunity." Joseph, 830 F.2d at 1022 (citation

omitted). Inasmuch as there is no arbitration agreement and no contract between

the Appellants and Lasheen, and whereas, Egypt has asserted sovereign immunity

as an affirmative defense, the waiver exception is not available to Lasheen in this

case. Id. The District Court also erred in finding that the Lasheen met his burden

“of providing evidence to indicate waiver of FSIA immunity….” Lasheen provided

no evidence that there was an arbitration agreement and he provided no evidence


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that there was any contract between himself and any of the Appellants. Instead of

producing the required evidence, he offered mere speculation that the self-

disclaiming Plan, offered only to Egyptian nationals, may constitute an implicit

waiver.

The booklet itself states: “[t]his booklet is not a contract.” [ER 119] Further,

because Lasheen was an Egyptian civil servant, the commercial activity exception

did not apply to his claims. And, even assuming arguendo that Lasheen was not a

civil servant, there is insufficient evidence to support a finding that the commercial

activities exception applies to the Lasheen claim. The District Court declined to

discuss the “commercial activities” exception to the FSIA, but stated that, if

confronted with the issue, the Court would hold that providing ERISA coverage in

the United States would, in and of itself, suffice as a commercial activity. Indeed,

at the hearing regarding this issue, the Court appeared convinced that providing

ERISA is “very ordinary.” [ER 18:8] “We see ERISA cases … every other

Tuesday.” [ER 18:9] Assuming, arguendo, that this is an actual ERISA claim, the

analysis of the Court stopped short of examining the “employee,” the “employer”

and, most significantly, the required nexus between the claim and the commercial

activity.

Finally, the District Court erred in referring to specific substantive ERISA

provisions incorporated within “the booklet” in reaching its decision. [ER Opinion


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at page 7:2-12] In so doing, the District Court ignored Gates v. Fine Foods, 54 F.3d

1457, 63 USLW 2730 (9th Cir.1995), which the Court cited within its August 31,

2010 Opinion. [ER 7:23] By referring to the ERISA provisions contained within the

Booklet, the Court placed “the substantive cart before the jurisdictional horse.”

Gates, supra., 54 F.3d 1457, at 1464, discussing NYSA-ILA Pension Trust Fund v.

Garuda Indonesia,7 F.3d 35 (2nd Cir. 1993).

VI. ARGUMENT

A. Statement of Standard of Review

The existence of subject matter jurisdiction under the Foreign Sovereign

Immunities Act is a question of law subject to de novo review. See Coyle v. P. T.

Garuda Indonesia, 363 F.3d 979, 984 n. 7 (9th Cir. 2004); Blaxland v.

Commonwealth Dir. of Public Prosecutions, 323 F.3d 1198, 1203 (9th Cir. 2003);

Park v. Shin, 313 F.3d 1138, 1141 (9th Cir. 2002); Corza v. Banco Cent. de

Reserva Del Peru, 243 F.3d 519, 522 (9th Cir. 2001); Adler v. Federal Republic of

Nigeria, 219 F.3d 869, 874 (9th Cir. 2000); In re Estate of Ferdinand Marcos

Human Rights Litig., 94 F.3d 539, 543 (9th Cir. 1996). That is, the Court of Appeal

reviews the case from the same position as the district court, as if it had not been

heard before and no decision had been rendered. League of Wilderness Defenders v.

Forsgren, 309 F.3d 1181, 1183 (9th Cir. 2002); Ka Makani 'O Kohala Ohana Inc.


14

v. Water Supply, 295 F.3d 955, 959 (9th Cir. 2002); Ness v. Commissioner, 954

F.2d 1495, 1497 (9th Cir. 1992). Under the de novo review standard, the district

court's opinion is entitled to no deference. Sklar v. Commissioner, 282 F.3d 610,

612 (9th Cir. 2002). Thus, an issue of statutory interpretation is reviewed de novo.

Chevron USA Inc. v. Bronster, 363 F.3d 846, 855 (9th Cir. 2004). The issue of

waiver, involving mixed questions of law and fact, is also generally reviewed de

novo. Feldman v. Allstate Ins. Co., 322 F.3d 660, 665 (9th Cir.) (waiver of marital

privilege), cert. denied, 540 U.S. 875 (2003). A mixed question of law and fact

occurs when the historical facts are established, the rule of law is undisputed, and

the issue is whether the facts satisfy the legal rule. Pullman-Standard v. Swint, 456

U.S. 273, 289 n. 1982). If however the application of the law to the facts requires

an inquiry that is "essentially factual," review is for clear error. Zivkovic v.

Southern California Edison Co., 302 F.3d 1080, 1088 (9th Cir. 2002); Koirala v.

Thai Airways Ini'l, Ltd., 126 F.3d 1205, 1210 (9th Cir. 1997). Review under the

clearly erroneous standard is significantly deferential, requiring a "definite and firm

conviction that a mistake has been committed." Easley v. Cromartie, 532 U.S. 234,

242 (2001); Concrete Pipe, Prods. v. Construction Laborers Pension Trust, 508

U.S. 602, 623 (1993). If the district court's account of the evidence is plausible in

light of the record viewed in its entirety, the court of appeals may not reverse it

even though convinced that had it been sitting as the trier of fact, it would have


15

weighed the evidence differently. Husain v. Olympic Airways, 316 F.3d 829, 835

(9th Cir. 2002), affd, 540 U.S. 644 (2404).

B. The District Court Erred in its Determination That The FSIA Does

Not Apply to Lasheen’s Claim.

1. Immunity is presumed under the FSIA.

Under the FSIA, "subject to existing international agreements to which the

United States is a party at the time of enactment of this Act a foreign state shall be

immune from the jurisdiction of the courts of the United States and of the States

except as provided in sections 1605 to 1607 of this chapter." 28 U.S.C. § 1604.

"The Foreign Sovereign Immunities Act provides the sole basis for obtaining

jurisdiction over a foreign state in the courts of this country." Saudi Arabia v.

Nelson, 507 U.S. 349, 355 (1993) (citing Argentine Republic v. Amerada Hess

Shipping Corp., 488 U.S. 428, 443 (1989)).

The FSIA codifies a presumption that a foreign state, including a political

subdivision or an agency or instrumentality of a foreign state, is immune from the

jurisdiction of United States courts, unless a specific statutory exception applies.

See 28 U.S.C. § 1604. Absent an exception, a federal court lacks subject matter

jurisdiction over a claim against a foreign state. Saudi Arabia v. Nelson, 507 U.S.

at 355 (citations omitted). Under the restrictive theory of sovereign immunity

reflected in the Act, a state is immune from the jurisdiction of foreign courts with


16

respect to its sovereign, governmental or public acts, but not as to acts, which are

commercial or private in nature. Id., 507 U.S, at 359-360 (citations omitted). Once

a defendant has made a prima facie showing that it is a foreign sovereign, the

plaintiff has the burden of coming forward with evidence to show that one of the

exceptions to immunity applies. Cargill Intl, S .A. v. M/T Pavel Dybenko, 991 F.2d

at 1016. The ultimate burden of persuasion is on the defendant. Lasheen does not

dispute that each of the Appellants falls within the statutory definition of a "foreign

state" under the FSIA. 28 U.S.C. § 1603(a), (b). Thus, a determination that the

FSIA is applicable, and that the exception relied upon by the District Court does not

apply, as discussed in the following sections, deprives the District Court of subject

matter jurisdiction over each of the Appellants with respect to the Lasheen claim.

2. The "waiver" exception to the FSIA does not apply to Lasheen’s claim against the Appellants.

Section 1605(a)(1) of the FSIA provides that a foreign state is not immune

from the jurisdiction of a court within the United States in a case in which the

foreign state "has waived its immunity either explicitly or by implication ... ." 28

U.S.C. §1605(a)(1). An explicit waiver may occur, for example, when a foreign

state renounces its immunity by treaty, or by contract. H.R. Rep. No. 94-1487, 94th

Cong., 2d Sess. 18, reprinted in 1976 U.S. Code Cong. & Admin. News 6604 6617.

The implicit waiver exception to the FSIA is to be construed narrowly. Cargill,


17

991 F.2d at 1017 (citations omitted); Joseph, 830 F.2d at 1022 (citation omitted).

An implicit waiver is usually found only where: "(1) a foreign state has agreed to

arbitration in another country; (2) a foreign state has agreed that a contract is

governed by the law of a particular country; and (3) a foreign state has filed a

responsive pleading in a case without raising the defense of sovereign immunity."2

Joseph, 830 F.2d at 1022 (citation omitted).

The only evidence offered by Appellee regarding the terms of the

relationship between Lasheen and any of the Appellants is the summary referred to

by the District Court, which purports to “explain plaintiff’s benefits under the

plan.” [ER 7:2-4] However, that booklet is an insufficient basis upon which to

premise a waiver of sovereign immunity. The plan summary is not a contract, and

specifically disclaims any binding legal effect:

“No provision contained in this booklet nor any portion of the Health Care Plan shall confer upon any covered person or participant or entity acting on behalf of, or in place of, the covered person or participant, any right or cause of action, either at law or in equity against the Plan Administrator, the Third Party Administrator, the Employer, or the Utilization Review Manager for the acts of any Hospital in which care is received, or for the acts of any physician, or other provider from whom services are received under the Plan.

This booklet is not a contract. It explains in non-technical language the essential features of your Employee Benefit Program. Contact the

2 In Their Answer to the Complaint, the Appellants raised the affirmative defense ofimmunityundertheFSIA:“AnsweringDefendants,asforeignsovereignsareimmunefromsuitbyplaintiffinthecourtsoftheUnitedStatespursuantto29§1601etseq.“[ER390:27‐28]


18

Human Resources Department if there are any questions regarding coverage.” [ER 119]

Appellee has put forth no evidence of the terms of a contract between

Lasheen and any of the Egypt Defendants, pursuant to which any of the Appllants’

agreed to arbitrate a dispute with Lasheen in the United States, nor that a contract

between any of them and Lasheen is governed by the law of a particular country.

Moreover, as noted previously, Appellants asserted the defense of sovereign

immunity in their Answer to Lasheen's Complaint, and their subsequent

participation in the litigation does not invalidate that defense. Amorrortu v.

Republic of Peru, 2008 WL 3338029 at *3 (citations omitted).

In this case, the Court acknowledged that the portion of the Plan -brought to

its attention by Lasheen – is not a contract and poses “three wrinkles.” In stating

that “it does not fall to the plaintiff to iron” what the Court termed “wrinkles,” the

Court negated the presumption the Appellants enjoy under FSIA. In so doing, the

District Court also departed from authority specifically requiring that a plaintiff

meet her/his burden of producing evidence of an implicit waiver. See, e.g., Frolova

v. Union of Soviet Socialist Republics, 761 F.2d 370, 377 (7th Cir. 1985), (noting

that “courts have been reluctant to stray beyond these examples when considering

claims that a nation has implicitly waived its defense of sovereign immunity.”).

Finally, a waiver as to Loomis does not extend to Lasheen. As stated in

Cargill, “… [i]t is rare for a court to find that a country’s waiver of immunity


19

extends to third parties not privy to the contract. When a case involves an implied

waiver, we think that a court should be even more hesitant to extend waiver in favor

of third parties. We agree with other courts that such a waiver will not be implied

absent a strong evidence of the sovereign’s intent.” Cargill, 991 F.2d at 1017

(citations omitted). This is consistent with the narrow application of the waiver

exception recognized by the courts. Id.

The District Court suggests that Lasheen’s attempt to convert the booklet

into a contract should succeed. The Court indicated that by Lasheen’s labeling of

the booklet as the equivalent to an agreement, Lasheen met his burden, and

Appellants became obligated to argue against the booklet. [ER 10:1-5] However,

with the presumption of immunity attached to Appellants, Appellee was required

to provide the specific type of evidence contemplated by the precedent of this

Circuit. See, Joseph, 830 F. 2d at 1022 (citation omitted). Appellee failed to do

so, and the burden never shifted to Appellants.

Moreover, The District Court appears to suggest that somehow the forum-

selection clause in the Loomis contract plays part in its analysis as to Lasheen.

See, fn. 4 of the August 31, 2010 Opinion stating that the waiver analysis as to

Loomis “remains law of the case.” [ER 6:25-26] The Appellants repeatedly stated

that Lasheen is not a party to the contract between the Cultural Office and Loomis.

[ER 142:1-9; ER 15:11-17; and ER 18:11-21]


20

3. The commercial activity exception does not apply to Lasheen's claims against the Egypt Defendants.

In its Opinion finding that the FSIA does not apply to Lasheen’s

claim, the District Court declined to specifically discuss the “commercial activities”

exception as it relates to the ERISA Claim. [ER 6:2-3] However, the Court did

state that “[i]f forced to confront the issue, the court would hold that the Egyptian

defendants’ provision of health benefits under an ERISA insurance framework

constitutes commercial activity.” [ER 6:22-24] The Court’s analysis failed to take

into consideration the status of the Plaintiff who claimed to be an employee under

the Plan, the status and nature of the activity, which is specific to the case, and the

nexus required to show a commercial activity under the FSIA. The activity in

question is not commercial. However, even if it is, “it is not enough for the

defendant merely to have engaged in commercial activity. Rather the statutory

language requires that the plaintiff’s cause of action be ‘based upon’ the

commercial activity in question. Thus, a court must focus ‘only on those specific

acts that form the basis of the suit’ to determine whether those acts constitute or are

in connection with the commercial activity.” Gates v. Victor Fine Foods, Supra.,

54 F.3d 1457 (emphasis in original), at 1463 (internal cite omitted) . Here the

District Court did not focus only on those specific acts that form the basis of the

suit, including the facts that Lasheen was a civil servant, the nature of the activity


21

carried out by Appellants, and whether the action was private, governmental, or

sovereign in nature.

a. Lasheen was a civil servant A foreign government's civil servants, diplomats and soldiers do not

qualify for the commercial activity exception to the FSIA. See Holden v, Canadian

Consulate, 92 F.3d 918, 921 (9th Cir. 1996). See also, El-Hadad v. United Arab

Emirates, 496 F.3d 658, 664 (C.A.D.C. 2007) (citations omitted); Kato v. Ishihara,

360 F.3d 106, 111-112 (2d Cir. 2004); If a person is deemed to be a civil servant,

the inquiry into the commercial activity exception stops. The Ninth Circuit treats

the civil servant question as effectively superseding the commercial/governmental

distinction. Holden, 92 F.3d at 921 ("We adopt the standard suggested by the

legislative history, that is, employment of diplomatic, civil service or military

personnel is governmental and the employment of other personnel is commercial.

Because private parties cannot hire diplomatic, civil service or military personnel,

such hiring is necessarily governmental."). Thus, the Ninth Circuit looks to the

legislative history of the FSIA as the analytical framework for the issue:

Also public or governmental and not commercial in nature would be the employment of diplomatic, civil service, or military personnel, but not the employment of American citizens or third country nationals by the Foreign state in the United States.... Activities such as a government's ... employment or engagement of laborers, clerical staff or public


22

relations or marketing agents ... would be among those included within the definition [of commercial activity].

Holden, 92 F.3d at 921, quoting H.Rep. No. 94-1487, 94th Cong., 2d Sess.

at16, reprinted at 1976 U.S.C.C.A.N. 6604, 6615. Cf. El-Hadad, 496 F.3d at 664

(if a person is not deemed to be a civil servant, the question then becomes whether

his work constitutes commercial activity, i.e., whether it involves the exercise of

powers that can also be exercised by private citizens, as opposed to those exclusive

to sovereigns). "In determining whether a foreign government's employment of

personnel in the United States is 'civil service,' and therefore 'governmental,' we do

not look principally to whether that employment resembles the contemporary civil

service of the American democracy, but we instead inquire whether 'the particular

actions that the foreign state performs ... are the type of actions by which a private

party engages in "trade and traffic or commerce." ' " Kato, 360 F.3d at 114 (quoting

Republic of Argentina v. Weltover, Inc., 504 U.S. at 614) (emphasis in original). See

also Anglo-Iberia Underwriting Management Company v. Lodderhose, 2008 WL

190364, *4 (S.D.N.Y. Jan. 22, 2008) (plaintiffs sued the administering agency for

Indonesia's social security program for damages arising from an international

reinsurance fraud scam perpetrated by one of the program's employees, and others,

while the employee was studying in the United States under the program's

sponsorship; "the nature of Sartono's employment, insofar as it is at issue here, is

therefore employment in the provision of a governmental program of health


23

benefits through the collection of employer contributions and payroll deductions;

such employment is by nature non-commercial;" therefore the District Court lacked

jurisdiction over plaintiffs' claim).

The El-Hadad court identified several non-exclusive factors relevant to a

determination of whether a foreign government's employee is a civil servant,

including: (1) how the foreign country's laws define its civil service, and whether

the employee's duties and job title come within that definition; (2) the nature of the

employee's employment relationship with the foreign country (e.g., contractual or

based solely on the foreign country's civil service laws); (3) the nature of the

employee's work; and (4) the relevance of the employee's foreign citizenship to the

facts of the case (noting that a "person hired by his own country's government to

work abroad should have a somewhat lesser expectation of suing his homeland in

his host nation's courts"). El-Hadad, 496 F.3d at 665 (citation omitted).

Appellee did not put forth any evidence of the terms of any alleged

employment contract between Lasheen and any of the Egypt Defendants. There is

no evidence, however, that Lasheen was employed as a laborer, clerical staff

member or public relations or marketing agent by any of the Egypt Defendants.

Holden, 92 F.3d at 921. It is undisputed that Lasheen was a professor in his native

Egypt, and that he was “sent by [the Government of Egypt] to the United States” to


24

study and train as a student at the University of California at Davis. [ER 151-152:8-

10]

Eligibility for the medical benefits plan under which Lasheen sought

coverage was "limited to teachers as long as they are employed by the Embassy of

Egypt and Educational Bureau working at least 30 hours per week, and

International Students who: (1) are eligible participants of a student or international

student insurance program sponsored by the government of their Home Country, or

by another sponsor acknowledged and approved by the Company; and (2) satisfy

the Eligibility Requirements detailed below." [ER 76] The medical benefit plan

summary of the Plan under which Lasheen sought coverage specifies the

requirements for eligibility, including the following:

“As an International Student ... or teacher, you are eligible for coverage under this Plan only if you satisfy all of the following requirements:

a. Maintain domicile and citizenship or naturalization

status in the home Country; b. are under age 65; c. are a student enrolled for a minimum of six credit

hours per semester (if applicable) and are engaged, full-time, in educational or research activities while attending an Institution of Higher Learning in the United States, or a teacher working at least 30 hours per week employed by the Embassy of Egypt and Educational Bureau;


25

d. have duly demonstrated evidence of good health at the point ofentry into the United States, as required by the government of your Home Country, if applicable;

e. hold a valid, current foreign passport, a valid "F" or

"J" visa, issued by U.S. Department of State, and a valid Form IAP-66, or Form 1-20, issued by the U.S. Immigration and Naturalization Service; and

f. have neither received nor applied for naturalization or

permanent residency status in the United States, Puerto Rico or Canada, or for any other change in your immigration status in the United States as an "F" or "J" visa holder. [ER 76]

The plan itself was thus designed for the benefit of Egyptian nationals

in the United States temporarily, teaching or studying, under a valid "F" or "J"

visa. Regardless of whether Lasheen's studies in the United States were sponsored

by the "Home Country," i.e., Egypt, or by its Cultural and Educational Bureau, or

by the Embassy, such sponsorship of a student in a foreign country is not "the type

of actions by which a private party engages in trade and traffic or commerce."

Kato, 360 F.3d at 114 (quoting Republic ofArgentina v. Weltover, Inc., 504 U.S.

607). Moreover, Lasheen as a temporary resident of the United States, based on

his status as a visiting student, "should have a somewhat lesser expectation of

suing his homeland in his host nation's courts." El-Hadad, 496 F.3d at 665. Under

all of the circumstances, and in the absence of any evidence or allegations by


26

Appellee to the contrary, Lasheen was a civil servant and, as such, the commercial

activity exception is inapplicable.

b. The commercial activity exception is inapplicable even if Lasheen was not a civil servant

Even if Lasheen is not deemed an Egyptian civil servant, he cannot establish

jurisdiction over the Appellants based upon the commercial activity exception. To

assess whether the commercial activity exception applies, the specific acts of each

named defendant alleged to form the basis of the plaintiff’s suit must be examined

and a determination made whether that activity is sovereign or commercial, looking

at its nature rather than its purpose. Amorrortu v. Republic of Peru, 2008 WL

3338029, *4 (citing cases). Lasheen alleges that each of the Egypt Defendants was

"doing business" in the Eastern District of California. [ER 187] Lasheen further

alleges that his "employment as a visiting Egyptian scholar" "includes interstate

commerce within the meaning of 29 U.S.C. § 1003(a) for which Defendants are

responsible to Plaintiff pursuant to the employee benefit plans." [ER 186-188] Each

of the Appellants is alleged to be the "policy holder, agent, and/or Plan

Administrator of the employee benefit plans in question, and as such, operates,

controls, and has discretion over the plans and is a fiduciary with respect to the plan

and Plaintiff." [ER 186-187] The essence of Lasheen's claim against the Appellants

collectively is that they declined to pay benefits, expenses and other amounts,


27

which he claims were due to him under certain employee benefit plans, in violation

of ERISA, 29 U.S.C. § 1001 et seq. [ER 188-189]

The medical benefits plan booklet, however, identifies the Cultural and

Educational Bureau as the Employer under whose auspices the plan was offered.

[ER 2:7-8] Lasheen has not alleged that the Egypt Defendants are alter egos; nor

has he offered evidence of any particular conduct by either Egypt or the Embassy of

Egypt giving rise to his claims. Thus, there is insufficient evidence of commercial

activity by these entities to support a waiver of the FSIA. Nor is there sufficient

evidence of "commercial activity" by the Cultural and Educational Bureau to

support a waiver of the FSIA as to that entity. For all that appears from the record,

the Cultural and Educational Bureau's offering of a medical benefits plan to

Lasheen was merely incidental to his studies in California under Egyptian

sponsorship. Lasheen's participation in the study program was itself an outgrowth

of his job at the public university in Egypt. Assuming arguendo that offering a

medical benefit plan might be deemed a type of commercial activity, clearly not the

case here, the Appellants submit that the sponsorship of an educational program,

from which the medical benefit plan derives, is not the type of activity typically

carried on by private persons for profit, and the alleged jurisdictional nexus is

simply too attenuated. As such, the commercial activity exception does not apply

to Lasheen's claims.


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4. The acts of which Lasheen complains were discretionary functions and therefore cannot form a basis for jurisdiction under the FSIA.

Under 28 U.S.C. § 1605(a)(5), a foreign state is not immune from

jurisdiction in a case seeking money damages for personal injury or death occurring

in the United States and caused by a tortuous act or omission of the foreign state, or

by an official or employee thereof acting within the scope of his office or

employment, except that any claim based upon the exercise or performance or

failure to exercise or perform a discretionary function, regardless of whether the

discretion is abused, shall not form the basis for jurisdiction. A similar exception

under the Federal Tort Claims Act has been so applied. See 28 U.S.C. §2860(a);

H.R. Rep. 1487, 94`h Cong., 2d. Sess. 18, reprinted in 1976 U.S.C.C.A.N. 6604,

6620; MacArthur Area Citizens Assn'v. Republic of Peru, 809 F.2d 918, 921-922

.(D.C. Cir. 1987); U.S. v. S.A. Empresa de Viacao Aerea Rio Grandense (Varig

Airlines), 467 U.S. 797, 813-814 (1984) (discretionary function exception was "to

prevent judicial 'second-guessing' of legislative and administrative decisions

grounded in social, economic and political policy through the medium of an action

in tort").

While courts have recognized that the "tortuous act" exception was

designed primarily to remove immunity for cases arising from traffic accidents, see,

e.g., Asociacion de Reclamantes v. United Mexican States, 735 F.2d 1517, 1525


29

(C.A.D.C. 1984), cert. denied, 470 U.S. 1051 (1985), the Appellants respectfully

submit that, upon Lasheen's claim that the Appellants improperly denied him

medical coverage, the "discretionary function" limitation applies as well to the

determination that Lasheen's request for benefits was foreclosed by a pre-existing

condition under the Plan.

VII. CONCLUSION

Based on the foregoing, appellants Egypt, the Embassy of Egypt, and the

Cultural and Educational Bureau, respectfully request the Court to reverse the

District Court's decision; issue an order holding that no exception to the FSIA is

applicable as to Lasheen and dismiss the Lasheen claim against the Appellants.

Dated: January 21, 2011

Respectfully Submitted, HERMINA LAW GROUP _________/s/___________________ John Hermina George Hermina Attorneys for Egypt, The Embassy of Egypt and the Cultural and Egypt’s Cultural and Educational Bureau


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CERTIFICATE OF COMPLIANCE

I certify that this brief complies with the type-volume limitation set forth in Rule

37(a)(7)(b) of the Federal Rules of Appellate Procedure. This brief uses a

proportional typeface and contains 7,868 words.


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STATEMENT OF RELATED CASES

Pursuant to Ninth Circuit Rule 28-2.6, appellants Embassy of the Arab Republic of

Egypt, The Arab Republic of Egypt, and the Embassy of Egypt Cultural and

Educational Bureau state that they are not aware of any related cases pending in this

Court.


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PROOF OF SERVICE

IDECLARETHAT: IamemployedintheCountyofPrinceGeorge’s,StateofMaryland.Iamoverthe

ageof18andnotapartytothewithinaction;mybusinessaddressis8327CherryLane,

Laurel,Maryland20707. OnJanuary21,2011,Iservedthefollowing:

AppellantsExcerptofRecorddocumentbydeliveringasnotedbelow:

XX Mailbyplacingatruecopythereofenclosedinasealedenvelopewithpostagefullyprepaid,intheUnitedStatesMail,atLaurel,Maryland.Addressedasfollows:

RandyM.Andrus,EsquireANDRUSATTORNEYSAProfessionalCorporation5406West11000North,Suite103‐303Highland,Utah84003Telephone:(801)763‐7993Fax:(801)756‐3936

XXAppellants’BriefviatheCourt’sElectronicFilingSystem. Ideclareunderpenaltyofperjurythatthisdeclarationistrueandcorrect,andwas

executedonJanuary21,2011,atLaurel,Maryland.

_________/S/_ginawrobel___________ GinaWrobel


Ninth Circuit Egypt Sovereign ImmunityOpening Brief Lasheen

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