 United States Court of Appeals
         FOR THE DISTRICT OF COLUMBIA CIRCUIT



Argued January 19, 2018                  Decided July 3, 2018

                          No. 17-7067

            EIG ENERGY FUND XIV, L.P., ET AL.,
                      APPELLEES

                              v.

                PETROLEO BRASILEIRO, S.A.,
                       APPELLANT


        Appeal from the United States District Court
                for the District of Columbia
                     (No. 1:16-cv-00333)


     Catherine E. Stetson argued the cause for appellant. With
her on the briefs were Adam K. Levin and Sean Marotta.

    Daniel B. Goldman argued the cause for appellees. With
him on the brief were Barry Coburn and Kerri Ann Law.

   Before: HENDERSON and WILKINS, Circuit Judges, and
SENTELLE, Senior Circuit Judge.

    Opinion for the Court ﬁled by Circuit Judge HENDERSON.

   Dissenting opinion ﬁled by Senior Circuit Judge
SENTELLE.
                                 2
     KAREN LECRAFT HENDERSON, Circuit Judge: In 2012 and
2013, an American investment fund sank $221 million into what
seemed like a sure bet: buying equipment to extract a massive,
newly discovered reserve of undersea crude oil oﬀ the coast of
Brazil. Brazilian politicians and corporate executives also saw
an opportunity and set up a scheme to make illegal use—
including payment of bribes and kickbacks—of investors’
money. The eventual revelation of the corruption produced the
largest political scandal in modern Brazilian history. In light of
the scandal, banks were no longer willing to make loans for the
oil-extraction project, which collapsed, taking the American
fund’s money with it.

     Behind the project—and at least some of the corruption—
was Petroleo Brasileiro, S.A. (Petrobras), Brazil’s state-owned
oil company. The jurisdiction of U.S. courts over claims
against foreign states and their “instrumentalities,” like
Petrobras, is limited by the Foreign Sovereign Immunities Act
(FSIA), 28 U.S.C. §§ 1330, 1604–1606, so we must determine
whether Petrobras’s alleged fraud “caused a direct eﬀect in the
United States,” id. § 1605(a)(2). If it did—as the district court
held—then Petrobras is “liable in the same manner and to the
same extent as a private individual under like circumstances.”
Id. § 1606. Otherwise, Petrobras “shall be immune from the
jurisdiction of the courts of the United States.” Id. § 1604.

                         I. Background

    In 2006 Petrobras discovered an estimated 50 billion
barrels of undersea oil oﬀ the coast of Brazil. 1 Although costly

    1
       The factual background is derived from the allegations of the
plaintiﬀs’ ﬁrst amended complaint, which we accept as true in
reviewing the denial of a motion to dismiss. See Price v. Socialist
People’s Libyan Arab Jamahiriya, 294 F.3d 82, 94 (D.C. Cir. 2002).
                                3
to extract, the sheer size of the deposit was tantalizing not only
to the Brazilian state—which had a direct economic interest in
the ﬁnd through Petrobras, the state-owned oil company—but
to investors around the world. Petrobras soon formed a foreign-
investment venture to build 28 specialized “drill ships” at a cost
of more than $700 million apiece. The business plan for the
venture, named Sete Brasil Participações, S.A. (Sete), called
for equity investment of around 7.9 billion Brazilian Reais
($2.19 billion at today’s exchange rates), with approximately
4.6 per cent of that coming from Petrobras itself. The remainder
of the ships’ cost was to be debt-ﬁnanced through third-party
lenders.

     To attract foreign investment, Brazilian law provides tax
incentives through special partnerships known as Fundos de
Investimento em Participações, or FIPs. Petrobras created FIP
Sondas to facilitate foreign investment in the Sete project.
Petrobras speciﬁcally targeted U.S. investors for Sete, Joint
Appendix (JA) 25, including EIG Management Company, LLC
(EIG), a Washington, D.C.–based private equity fund.
Petrobras disseminated in the United States, including to EIG,
a presentation called “The Drilling Rigs Project: Petrobras’[s]
Strategy for its Successful Implementation.” JA26. The
presentation contained a “Cautionary Statement for US
Investors,” referencing U.S. Securities and Exchange
Commission rules governing oil and gas investment. JA26–27.
Another document disseminated by Petrobras in the United
States, titled “Pre-Salt Oil Rigs Project,” “discussed the Sete
investment premise and touted that Sete would have
‘management with extensive experience in the market.’”
JA27–28. A third document “promoting investment in Sete”
was sent to EIG by a putative Petrobras agent nearly a year after
the ﬁrst two documents circulated. JA28.
                                4
     Petrobras and Sete executives also met with EIG
executives in the United States at least twice. At one meeting,
in Houston, Texas, Sete CEO João Carlos de Medeiro Ferraz
(Ferraz) “oﬀered rosy descriptions of Sete and its business
prospects.” JA29. At another, in Washington, D.C., Ferraz
addressed a conference of EIG employees and investors and
“informed [them] that Sete expected drillship charter revenue
‘of almost $90 billion [in] the next 20 years.’” JA30 (second
alteration in original). EIG employees twice traveled to Brazil
to meet with Petrobras representatives, and Petrobras or Sete
corresponded extensively with EIG leading up to EIG’s
investment, through written memoranda, presentations,
telephone calls and emails.

     EIG ultimately invested $221 million in FIP Sondas
between August 2012 and May 2013, on behalf of eight funds
under its management. Six of the eight EIG funds were based
in Delaware but the other two were based in the Cayman
Islands, which Brazil has designated as a tax haven. Because
investors from designated tax havens are ineligible for the tax
incentives provided FIP investments, EIG formed EIG Sete
Parent SARL (EIG Sete Parent), a Luxembourg corporation,
which in turn formed EIG Sete Holdings SARL (EIG Sete
Holdings), also a Luxembourg corporation. EIG’s investment
in Sete therefore ﬂowed from the eight funds to EIG Sete
Parent, to EIG Sete Holdings, to FIP Sondas and, ultimately, to
Sete itself.

     Brazilian prosecutors’ “Operation Car Wash” became
public in 2014. The multi-year investigation uncovered
extensive corruption in the Brazilian government, including
Petrobras, and in the private-sector oil industry, including Sete.
To date, prosecutors have obtained 93 convictions against
oﬃcials engaged in a bribery and kickback scheme going back
to at least 1997. Among the guilty were senior executives at
                                5
Sete, including Ferraz, EIG’s primary contact at Petrobras and
Sete. A 30-year employee of Petrobras, Ferraz became the
chief executive of Sete sometime before the spring of 2013,
when he met with EIG in Houston. Ferraz was EIG’s primary
contact regarding its Sete investment, ﬁrst, while he was at
Petrobras and, later, when he was Sete CEO. In testimony
given to an investigative panel of the Brazilian Congress in
2015, Ferraz explained that “[t]he capital market in the United
States, in particular, loves [Sete’s] type of business. They very
much like the prospects of ﬁnancing drilling rigs, despite the
risks involved.” JA233. And so, Ferraz testiﬁed, “[t]here was
great market interest [in Sete], particularly among US private
equity groups” such as EIG. JA218. Another Sete executive,
chief operating oﬃcer Pedro José Barusco, testiﬁed to the
Brazilian Congress that he and Ferraz had taken “the initiative
to create Sete Brasil” and that “the establishment of bribe
amounts . . . was a continuity [sic] of what happened in
Petrobras.” JA23, JA31 (compl.).

    As the scandal of Operation Car Wash enveloped Sete and
Petrobras, skittish lenders withdrew their support from the drill
ships project. Because the project was highly leveraged by
design, the loss of debt ﬁnancing made it impossible to proceed
with construction. Facing insolvency, Sete declared
bankruptcy. Investors, including EIG, were left with nothing
but worthless shares.

     EIG sued Petrobras and the other defendants in district
court, alleging counts of fraud, aiding and abetting fraud and
civil conspiracy to commit fraud. 2 Petrobras moved to dismiss


    2
      Because Sete is not an “instrumentality” of the Brazilian
government, it would not be immune from suit under the FSIA. See
Dole Food Co. v. Patrickson, 538 U.S. 468, 476 (2003) (only direct
ownership by foreign state makes corporation an instrumentality
                                  6
for lack of subject matter jurisdiction under Federal Rule of
Civil Procedure 12(b)(1). 3 Petrobras asserted that, as an
instrumentality of the Brazilian state, it is immune from suit on
EIG’s claims under the FSIA.

     The district court denied Petrobras’s motion to dismiss,
concluding that EIG’s claims fall within the FSIA’s
commercial activity exception to foreign-state immunity. EIG
Energy Fund XIV, L.P. v. Petróleo Brasileiro S.A., 246 F.
Supp. 3d 52, 72 (D.D.C. 2017); see 28 U.S.C. § 1605(a)(2).
Although EIG argued that each of the three clauses of the
commercial-activity exception applied, the district court relied
on the third clause only, which clause grants jurisdiction over
claims “based 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.” 28 U.S.C. § 1605(a)(2).

     The district court reasoned that EIG’s injury “occurred at
the time Petrobras successfully induced [it] to invest in the
Petrobras-Sete project,” which injury “occurred, at least in part,
in the United States.” 246 F. Supp. 3d at 72. Because the court
concluded that EIG’s injury occurred in the United States, it
rejected Petrobras’s argument that EIG’s structuring its
investment through its Luxembourg subsidiaries—that is, EIG
Sete Parent and EIG Sete Holding—constituted an



under FSIA). Sete’s bankruptcy, however, would likely have made it
futile for the plaintiﬀs to include Sete as a defendant.
     3
       Petrobras also moved to dismiss under Rule 12(b)(6) for failure
to state a claim upon which relief can be granted but the district
court’s denial of Petrobras’s motion on that ground is not before us
in this interlocutory appeal.
                                7
“intervening event[]” that made EIG’s U.S. injuries “indirect.”
Id.

    Moreover, the district court found that “Petrobras did not
merely establish Sete” but “‘installed its own former
employees’—including the architects of Sete and the bribe
scheme, Ferraz and Barusco—for the purpose of continuing the
corrupt enterprise.” Id. (quoting Pl.’s am. compl. 12).
Therefore, it was irrelevant to the court’s analysis that Sete, not
Petrobras, made the misrepresentations that immediately
preceded EIG’s decision to invest: “Sete’s deceptive conduct,
occurring only after it grabbed the baton from Petrobras, is not
the kind of ‘independent’ third-party action that breaks the
causal chain between Petrobras’[s] own misrepresentations and
[EIG’s] injury.” Id.

    Petrobras timely appealed the denial of its motion under
Rule 12(b)(1), invoking our interlocutory appellate jurisdiction
under 28 U.S.C. § 1291. See Jungquist v. Sheikh Sultan Bin
Khalifa Al Nahyan, 115 F.3d 1020, 1025 (D.C. Cir. 1997) (“It is
well[ ]established that an appeal from a denial of a motion to
dismiss a complaint on the ground of sovereign immunity
under the FSIA satisﬁes the three requirements of the collateral
order doctrine and may thus be brought on an interlocutory
basis.”).

                          II. Analysis

         A. Standard of review and burden of proof

     “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) (quoting Argentine Republic v. Amerada Hess Shipping
Corp., 488 U.S. 428, 443 (1989)). “Under the Act, a foreign
state is presumptively immune from the jurisdiction of United
                               8
States courts; unless a speciﬁed exception applies, a federal
court lacks subject-matter jurisdiction over a claim against a
foreign state.” Nelson, 507 U.S. at 355.

     “Once the defendant has asserted the jurisdictional defense
of immunity under the FSIA, the court’s focus shifts to the
exceptions to immunity” provided in the Act. Phx. Consulting
Inc. v. Republic of Angola, 216 F.3d 36, 40 (D.C. Cir. 2000).
“‘In accordance with the restrictive view of sovereign
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.” Id. (quoting
Transamerican S.S. Corp. v. Somali Democratic Republic, 767
F.2d 998, 1002 (D.C. Cir. 1985)). Although the plaintiﬀ bears
the ultimate burden of proving its substantive claims, the
foreign-state defendant bears the burden of establishing the
aﬃrmative defense of immunity. See Kilburn v. Socialist
People’s Libyan Arab Jamahiriya, 376 F.3d 1123, 1131 (D.C.
Cir. 2004); Princz v. Fed. Republic of Germany, 26 F.3d 1166,
1171 (D.C. Cir. 1994).

     If an FSIA defendant contests only the legal suﬃciency of
the plaintiﬀ’s jurisdictional claims, our standard of review is
akin to that applied under Rule 12(b)(6), under which dismissal
is warranted if no plausible inferences can be drawn from the
facts alleged that, if proven, would provide grounds for relief.
Price, 294 F.3d at 93 (citing Browning v. Clinton, 292 F.3d 235,
241–42 (D.C. Cir. 2002)). “A claimant need not set out all of
the precise facts on which the claim is based in order to survive
a motion to dismiss.” Id. at 93.

            B. Petrobras’s alleged fraud caused
             a direct eﬀect in the United States

    Petrobras is subject to the jurisdiction of U.S. courts if it
“caused a direct eﬀect in the United States.” 28 U.S.C.
                                 9
§ 1605(a)(2). Under the direct-eﬀect exception to foreign-state
immunity, a plaintiﬀ must make three showings: that the
“lawsuit is (1) ‘based upon . . . an act [of a foreign state] outside
the territory of the United States’; (2) that was taken ‘in
connection with a commercial activity’ of [the foreign state]
outside this country; and (3) that ‘cause[d] a direct eﬀect in the
United States.’” Republic of Argentina v. Weltover, Inc., 504
U.S. 607, 611 (1992) (quoting 28 U.S.C. § 1605(a)(2)). Petrobras
does not contest that the ﬁrst two of these elements are
satisﬁed; we need concern ourselves, then, with the third only.

     A “direct” eﬀect is one that “follows ‘as an immediate
consequence of the defendant’s . . . activity.’” Id. at 618
(quoting Weltover, Inc. v. Republic of Argentina, 941 F.2d 145,
152 (2d Cir. 1991)). Although “jurisdiction may not be
predicated on purely trivial eﬀects in the United States,” there
is no “unexpressed requirement of ‘substantiality’ or
‘foreseeability.’” Id.

     We believe EIG has made out a prima facie case for
jurisdiction by alleging that Petrobras speciﬁcally targeted U.S.
investors for Sete, JA25; that Petrobras intentionally concealed
the ongoing fraud at Petrobras and at Sete, JA26–27; and that
money invested in Sete was used to pay bribes and kickbacks,
JA32–34. See Atlantica Holdings, Inc. v. Sovereign Wealth
Fund Samruk-Kazyna JSC, 813 F.3d 98, 110 (2d Cir. 2016)
(defendant’s misrepresentations about investment cause direct
eﬀect in United States when defendant “contemplated
investment by United States persons” and “at least some
investors . . . suﬀered an economic loss in this country as a
result of those misrepresentations.”). The burden is therefore
on Petrobras to establish an aﬃrmative defense to jurisdiction.
Princz, 26 F.3d at 1171.
                               10
    Petrobras raises two defenses to jurisdiction: that it did not
cause EIG’s injuries because intervening acts—third-party
lenders’ decisions not to lend to Sete—“broke the chain of
causation,” Appellant’s Br. 31–35; and that Petrobras’s alleged
fraud did not cause a direct eﬀect in the United States because
EIG’s injury occurred, again, not in the United States, its
investment having been funneled through corporate
subsidiaries in Luxembourg, id. at 20–31. Both arguments fail.

   1. No intervening act “broke the chain of causation”

     Petrobras’s “chain of causation” argument fails for two
reasons. First, EIG was injured by Petrobras’s alleged fraud
even before the lenders withdrew; additionally, Petrobras’s
argument would protect it from liability even for the portion of
EIG’s damages incurred before the lenders withdrew. Petrobras
eﬀectively proposes a highly restrictive causation requirement
under which contributing factors readily and predictably
caused by the defendant’s same act would preclude
jurisdiction.

     We rejected a similar argument in Kilburn, 376 F.3d at
1129. The Lebanese terrorist group Hezbollah abducted Peter
Kilburn, a U.S. citizen, in Beirut in 1984 and subsequently sold
him to the Arab Revolutionary Cells (ARC), a terrorist group
based in Libya. ARC tortured and killed Kilburn, whose
brother brought suit against Hezbollah’s and ARC’s state
sponsors, Iran and Libya, respectively. Id. at 1125. The Kilburn
plaintiﬀ invoked the “terrorism exception” to foreign-state
immunity, which applies to a lawsuit against a foreign state
“for personal injury or death that was caused by an act of
torture, extrajudicial killing, aircraft sabotage, hostage taking,
                                 11
or the provision of material support or resources [for such an
act].” 28 U.S.C. 1605(a)(7) (2002) (emphasis added). 4

     Libya argued that it was not the “but-for” cause of
Kilburn’s kidnapping, torture and killing. Kilburn, 376 F.3d at
1127. In other words, Libya argued that Kilburn would have
suﬀered the same fate regardless of Libya’s involvement
because ARC got involved only after Hezbollah had already
kidnapped Kilburn. We disagreed, interpreting the terrorism
exception’s “caused by” language to impose “the base-line
standard of proximate cause” and rejecting Libya’s argument
that multiple but-for causes break the chain of causation for any
one of them. Id. at 1129 (“Such a case, in which application of
a ‘but for’ standard to joint tortfeasors could absolve them all,
is precisely the one for which courts generally regard ‘but for’
causation as inappropriate.”). Although Kilburn’s death at the
hands of ARC might not have occurred had he not been
kidnapped by Hezbollah, that fact did not mean that Libya,
ARC’s state sponsor, was immune from suit for wrongful
death. Id. at 1129. Similarly, Petrobras cannot oust the court of
jurisdiction in a lawsuit resulting from its alleged fraud simply
because Sete’s third-party lenders might also have injured EIG
by cutting oﬀ funds.

    Second—and crucially—the lenders withdrew for the
same reason that EIG’s investment became worthless:
Petrobras’s alleged fraud plainly made Sete unsuitable for

     4
       Since Kilburn was decided, the terrorism exception has been
relocated from 28 U.S.C. § 1605(a)(7) to 28 U.S.C. § 1605A but the
relevant language remains substantially identical to that considered
in Kilburn. See National Defense Authorization Act for Fiscal Year
2008, Pub. L. 110-181 § 1083(a), (b)(1)(A)(iii), 122 Stat. 3, 338–341.
For consistency, we quote and cite the version included in the 2002
edition of the U.S. Code.
                               12
investment. The lenders’ withdrawal and EIG’s tanking
investment are, in other words, two “eﬀects” with the same
cause. The lenders’ withdrawal was not an intervening cause in
any legally signiﬁcant way because that action itself was
caused by the same alleged fraud that caused EIG’s injury.

     EIG’s allegation that Petrobras committed fraud
distinguishes this case from a Second Circuit case Petrobras
relies on. In Virtual Countries, Inc. v. Republic of South Africa,
300 F.3d 230, 232–33 (2d Cir. 2002), South Africa issued a
press release asserting its ownership of the domain name
“southafrica.com.” Virtual Countries, a U.S. company, sought
a declaratory judgment that it owned the domain name and an
injunction preventing South Africa from litigating the issue in
an international tribunal. Id. at 234. The asserted basis for FSIA
jurisdiction was that South Africa’s issuance of the press
release was a commercial act that caused a direct eﬀect in the
United States by virtue of Virtual Countries’ ﬁnancial losses
stemming from negative investor reaction to the press release.
Id. at 235. The Second Circuit held that the press release caused
no direct U.S. eﬀect because investors “formed their own
independent assessments of [South Africa’s] intentions and the
possible eﬀect of those intentions on Virtual Countries and
people who would do business with it,” rendering any U.S.
eﬀect “indirect.” Id. at 237.

     Here, by contrast, EIG’s alleged injury—being
fraudulently induced to invest in Sete—occurred well before
Operation Car Wash came to light, and certainly before the
lenders reacted to the revelation of Petrobras’s alleged fraud.
At this preliminary stage of the litigation, EIG need not
precisely measure the amount of its damages. It is enough that
Petrobras’s alleged fraud necessarily made EIG’s investment
less valuable, even if only to the extent that EIG’s money was
used to pay bribes and kickbacks rather than to pay
                                  13
shipbuilders. 5 The lenders’ withdrawal did not cause EIG’s
alleged damages, it simply conﬁrmed them.

              2. The path of EIG’s losses through
                   Luxembourg is irrelevant

     Petrobras’s remaining argument is that any eﬀect its
actions had in the United States was mediated through
Luxembourg—where EIG created corporate subsidiaries
through which it funneled its Sete investment—and therefore
was not “direct.” Petrobras, EIG and the district court have all
cast this as a debate over the locus of Petrobras’s alleged tort,
which we have previously identiﬁed as one factor in
determining whether a tort causes a direct eﬀect in the United
States. See Bell Helicopter Textron, Inc. v. Islamic Republic of
Iran, 734 F.3d 1175, 1184 (D.C. Cir. 2013). But the third clause
of the commercial activity exception turns on the requisite site
of the direct eﬀects of the defendant’s alleged tort, not its
“locus” as a matter of tort law. It may well be—although we
need not decide today—that a U.S. locus is suﬃcient (but not
necessary) to establish jurisdiction under the FSIA. The


     5
      Federal securities law, by analogy, allows a plaintiﬀ to recover
damages for securities that are devalued as a result of the defendant’s
fraudulent statements or omissions, but only as measured by “the
depreciation in value of such security resulting from such [statement
or omission] as to which [the defendant’s] liability is asserted.” 15
U.S.C. § 77k(e). This “loss-causation rule” ensures that securities
law does not become an insurance policy to protect against bad
investments. But the law also provides that the market’s reaction to
corporate fraud is a sound measure of loss causation. See id.
(authorizing damages measured by “the diﬀerence between the
amount paid for the security [and] the value thereof as of the time
such suit was brought,” subject to adjustment if defendant establishes
portion of diﬀerence is not attributable to fraud).
                                  14
inverse, however, is not true: a foreign locus does not always
mean that a tort causes no “direct eﬀect” in the United States.

      To our knowledge no court has held otherwise. In
Atlantica, 813 F.3d 98, 109 n.5, the Second Circuit observed
that “for FSIA purposes, we have found a direct eﬀect (at least)
at ‘the locus of the tort,’” and noted, id. at 113 n.7, that an earlier
Second Circuit case, Antares Aircraft, L.P. v. Federal Republic
of Nigeria, 999 F.2d 33, 36 (2d Cir. 1993), expressly reserved
the question whether a foreign tort can cause a direct eﬀect in
the United States. Petrobras repeatedly quotes the Second
Circuit’s statement in Antares Aircraft that “[i]n tort, the analog
to contract law’s place of performance is the locus of the tort.”
999 F.3d at 36. But the court went on to say that “the analogy
is not precise” and, “[a]lthough a contractual provision
designating the United States as the place of performance is
suﬃcient to vest jurisdiction under the FSIA, a foreign tort is
not necessarily suﬃcient to deprive federal courts of
jurisdiction.” Id. (emphasis in original).

     Odhiambo v. Republic of Kenya, 764 F.3d 31, 42–43 (D.C.
Cir. 2014), is also inapposite because, as a contract case, “the
analogy is not precise” to a tort case like this one. In Odhiambo
we rested our rejection of FSIA jurisdiction on the lack of a
place-of-performance clause in the contract between the
plaintiﬀ and the sovereign defendant. We reasoned that if a
“pay wherever you are” contract can support jurisdiction of a
foreign state, a plaintiﬀ could then unilaterally create
jurisdiction simply by traveling to the United States. Id. at 40–
41. The investment agreement between EIG and Sete does not
designate a U.S. place of performance, but EIG’s argument
is—in part—that it would never have signed the investment
agreement (which it did in Washington, D.C.) if Petrobras and
Sete had not fraudulently induced it to do so. JA14. More to the
point, EIG alleges that its United States presence was not mere
                               15
happenstance to Petrobras and Sete, but that Petrobras and Sete
“speciﬁcally targeted” U.S. investors. JA25. Accepting these
allegations as true, Odhiambo’s concern over plaintiﬀs
unilaterally creating U.S. jurisdiction is misplaced here.

     For the same reason, we are untroubled by the Second
Circuit’s assertion in Antares Aircraft that “some ﬁnancial loss
from a foreign tort cannot, standing alone, suﬃce to trigger the
exception,” 999 F.2d at 36, because EIG’s ﬁnancial loss does
not “stand[] alone.” Rather, its ﬁnancial loss is alleged to have
resulted from the years-long scheme to part EIG from its
money under false pretenses with the goal of enriching corrupt
Brazilian executives and oﬃcials. See JA25. At least some of
the misstatements and omissions in service thereof took place
in the United States, where the ultimate consequences of the
fraud were later felt. JA15, 17.

     Neither the Second Circuit precedent nor—more on
point—our own Bell Helicopter and Odhiambo nor any other
case on which Petrobras relies holds that a tort’s foreign locus,
without more, means that it causes no direct eﬀect in the United
States. Assuming arguendo that Luxembourg was the locus of
Petrobras’s alleged fraud, we must nevertheless determine
whether the alleged fraud “cause[d] a direct eﬀect in the United
States.” The key to Petrobras’s theory that EIG was injured (if
at all) in Luxembourg is that EIG “booked the loss” from its
Sete investment in Luxembourg and only somewhere down the
line was that loss felt, indirectly, in the United States. Three
ﬂaws doom Petrobras’s argument.

     First, the legal signiﬁcance of corporate form in an FSIA
action is not as settled as Petrobras suggests. On this point
Petrobras’s reliance on Dole Food Co. v. Patrickson, 538 U.S.
468, 474 (2003), is misplaced. To determine whether a foreign-
state defendant is immune from suit, the Congress indeed
                               16
“elected to hew to ‘the general rules regarding corporate
formalities,” Reply Br. 8 (quoting Dole Food, 538 U.S. at 476),
including the principle that “the corporation and its
shareholders are distinct entities.” Dole Food, 538 U.S. at 476.
Thus, the Supreme Court concluded that “[a] corporation is an
instrumentality of a foreign state under the FSIA only if the
foreign state itself owns a majority of the corporation’s shares.”
538 U.S. at 477. But Petrobras asks us to fashion the Dole Food
principle of corporate formalism—which narrowed the scope
of foreign-state immunity—into a limitation on what entity can
be an FSIA plaintiﬀ, with the eﬀect of broadening the scope of
foreign-state immunity. We decline the invitation.

     The second ﬂaw in Petrobras’s focus on the Luxembourg
subsidiaries is that it requires an unrecognized identity between
corporate citizenship and the locus of an investment loss. In
Weltover, the Supreme Court expressly rejected the argument
that a plaintiﬀ’s foreign citizenship necessarily determines
FSIA jurisdiction. 504 U.S. at 619 (FSIA jurisdiction
established notwithstanding plaintiﬀs were “all foreign
corporations with no other connections to the United States”)
(citing Verlinden B.V. v. Cent. Bank of Nigeria, 461 U.S. 480,
489 (1983) (FSIA “allow[s] a foreign plaintiﬀ to sue a foreign
sovereign in the courts of the United States, provided the
substantive requirements of the Act are satisﬁed.”)). In
Atlantica, 813 F.3d at 111, a case upon which Petrobras heavily
relies, most of the plaintiﬀs were not U.S. citizens. The Second
Circuit nevertheless held that FSIA jurisdiction extended to the
foreign plaintiﬀs’ claims even though they did not show—and
apparently could not show—any harm to themselves in the
United States, but only to their U.S.-citizen co-plaintiﬀs. 813
F.3d at 112 (“[H]ad all of the Plaintiﬀs been foreigners, they
could have successfully premised FSIA jurisdiction on the
eﬀect that [the defendant’s] alleged misrepresentations had on
non-party United States investors, provided that Plaintiﬀs
                              17
could adequately establish the existence of United States
investors so aﬀected.”).

     The third defect in Petrobras’s “locus” argument is that,
although EIG may have “booked the loss” in Luxembourg—a
questionable proposition as there is no record support that EIG
Luxembourg maintains any Luxembourg accounts as it has no
employees there and receives its mail at a U.S. address —
presumably EIG would have booked a loss in the same amount
in the United States. See Fin. Accounting Standards Board,
Statement of Financial Accounting Standards No. 157: Fair
Value Measurements (Sept. 2006) (requiring “mark-to-
market” accounting reﬂecting fair market value of investment
assets). Petrobras cannot avoid U.S. jurisdiction because the
eﬀects of its fraud ricocheted halfway around the globe before
coming to rest in EIG’s Washington, D.C. oﬃce. In Weltover,
the Supreme Court upheld FSIA jurisdiction even though the
only connection between the defendant’s actions and the
United States was that “[m]oney that was supposed to have
been delivered to a New York bank for deposit was not
forthcoming.” Weltover, 504 U.S. at 619. There is no basis to
treat EIG’s investment loss diﬀerently from the failure to
deposit scheduled interest payments in New York bank
accounts.

    For the foregoing reasons, we conclude that Petrobras’s
commercial activity in Brazil caused a direct eﬀect in the
United States, including a direct eﬀect on EIG. Accordingly,
Petrobras is not immune from EIG’s suit and the district court’s
order denying dismissal is aﬃrmed.

                                                    So ordered.
     SENTELLE, Senior Circuit Judge, dissenting: While I respect
my colleagues’ careful and well-constructed opinion, I
nonetheless remain unconvinced that the courts of the United
States have jurisdiction over this matter under the Foreign
Sovereign Immunities Act. 28 U.S.C. §§ 1330, 1604-1606.
While I agree with my colleagues that plaintiffs-appellees have
established that the acts of the Brazilian agency may have
“effects” in the United States, the controlling issue in the case is
whether they have shown direct effects. As that is the sole
controlling issue in the case, I will not belabor or contest the
majority’s statement of the facts, but will deal only with that
issue.

     As the majority correctly reasons, Petrobras, an
instrumentality of the government of Brazil, “‘is presumptively
immune from the jurisdiction of United States courts; unless a
specified exception applies, a federal court lacks subject-matter
jurisdiction over a claim against a foreign state.’” Maj. Op. at 7-
8 (quoting Saudi Arabia v. Nelson, 507 U.S. 349, 355 (1993)).
The statutory exception relied upon by appellee and the majority
arises from a provision of the Foreign Sovereign Immunities
Act, 28 U.S.C. § 1605(a)(2). In relevant part, that statute
provides jurisdiction to the courts of the United States over a
case involving a commercial activity that “causes a direct effect
in the United States.” Id. (emphasis added). While the court
sets forth an impressive analysis of the causation of the effects,
that is not sufficient. The statute requires a direct effect. It is
“one of the most basic” canons of statutory interpretation that “a
statute should be construed so that effect is given to all its
provisions.” Corley v. United States, 556 U.S. 303, 314 (2009).
The adjective “direct” is as much a provision of the statute as the
noun “effects.” We must assume that Congress intended each
word to carry its plain and usual meaning. The failure of Sete
as described in the majority opinion obviously had effects.
                               2

Were those effects direct ones in the United States? It is not
apparent that they were.

     As the majority notes, the EIG Funds formed EIG Sete
Parent SARL as a Luxembourg corporation. The Luxembourg
corporation formed EIG Sete Holdings SARL, also a
Luxembourg corporation. EIG Sete Holdings invested $221
million in FIP Sondas, a Brazilian partnership, which ultimately
invested the funds in Petrobras. Thus, the investments, the loss
of which constituted the harmful effects of the failure of Sete,
flowed from the EIG Funds to EIG Sete Parent, to EIG Sete
Holdings, to FIP Sondas, and only ultimately to Sete itself. The
effects in the United States of the alleged tortious conduct in
Brazil, therefore, were at least three steps removed. This does
not seem to comport with normal understandings of “direct,”
which is defined as “stemming immediately from a source.”
Direct, MERRIAM-WEBSTER DICTIONARY, http://www.Merriam-
Webster.com/dictionary/direct (last visited June 19, 2018).

     None of the cases cited by appellee or relied upon by the
majority provide a basis for concluding that those effects were
“direct” in the United States. Odhiambo v. Republic of Kenya,
764 F.3d 31 (D.C. Cir. 2014), as the majority discusses,
concerned a rejection of FSIA jurisdiction on the lack of a place
of performance clause in a contract. Maj. Op. at 14. While the
majority is correct that this does not mandate the rejection of
jurisdiction in the present case, it certainly does nothing to
establish the directness of effects warranting the assumption of
jurisdiction under § 1605(a)(2).

    Similarly, as the majority again notes, the Second Circuit’s
assertion that “some financial loss from a foreign tort cannot,
standing alone, suffice to trigger the exception,” Antares
Aircraft, LV v. Fed. Rep. of Nigeria, 999 F.2d 33, 36 (2d Cir.
1993), may not mandate rejection of jurisdiction on the present
                               3

facts. Nonetheless, it is certainly consistent with a conclusion
that the exception does not apply in this case.

     Neither the cases discussed above, nor any of the other
cases relied upon by the majority, mandate a conclusion that a
loss suffered by a Luxembourg entity, owned by another
Luxembourg entity, in turn owned by United States entities,
constitutes a direct effect in the United States. Implications of
a holding to that effect seem to me to be inconsistent with
Congress’s express language in the relevant exception. Where
do we cut off the chain between an effect and a direct effect to
give meaning to the congressional expression? If the plaintiff in
this case were not EIG but a shareholder of EIG, would that
shareholder’s loss be direct? I think not. It seems unlikely that
Congress would have included as plain a word as “direct” in the
creation of an exception to foreign sovereign immunity unless
it had more apparent content than the majority’s interpretation
would allow.

     In the end, for the reasons set forth above, I respectfully
dissent.
