     07-1815-cv
     Frontera Resources Azerbaijan Corporation v. State Oil Company of the Azerbaijan
     Republic

 1                          UNITED STATES COURT OF APPEALS
 2                              FOR THE SECOND CIRCUIT
 3
 4                            August Term 2008
 5      (Argued: October 27, 2008       Decided: September 28, 2009)
 6                          Docket No. 07-1815-cv
 7   -----------------------------------------------------x
 8   FRONTERA RESOURCES AZERBAIJAN CORPORATION,
 9
10                Petitioner-Appellant,
11
12                             -- v. --
13
14   STATE OIL COMPANY OF THE AZERBAIJAN REPUBLIC,
15
16                Respondent-Appellee.
17
18
19   -----------------------------------------------------x
20
21   B e f o r e :       WALKER, PARKER, and RAGGI, Circuit Judges.

22         Petitioner Frontera Resources Azerbaijan Corporation appeals

23   from the dismissal of its petition to confirm a foreign arbitral

24   award against Respondent State Oil Company of the Azerbaijan

25   Republic (“SOCAR”) for lack of personal jurisdiction.                    We hold

26   that the district court correctly required jurisdiction over

27   either SOCAR or SOCAR’s property.              We find, however, that the

28   district court erred by holding that foreign states and their

29   agents are entitled to rights under the Due Process Clause.

30   Accordingly, we overrule our holding to the contrary in Texas

31   Trading & Milling Corp. v. Federal Republic of Nigeria, 647 F.2d

32   300 (2d Cir. 1981), and remand for the district court to

33   reconsider its jurisdictional analysis.

                                              -1-
1         VACATED and REMANDED.

 2                                          JAMES E. BERGER, Paul Hastings
 3                                          Janofsky & Walker, LLP, New
 4                                          York, NY, for Petitioner-
 5                                          Appellant.
 6
 7                                          JOHN D. WINTER, Patterson
 8                                          Belknap Webb & Tyler LLP, New
 9                                          York, NY, for Respondent-
10                                          Appellee.
11

12   JOHN M. WALKER, JR., Circuit Judge:

13        Petitioner-Appellant Frontera Resources Azerbaijan

14   Corporation (“Frontera”) appeals from the dismissal by the United

15   States District Court for the Southern District of New York

16   (Richard J. Holwell, Judge) of its petition to enforce a Swedish

17   arbitration award against Respondent-Appellee State Oil

18   Corporation of the Azerbaijan Republic (“SOCAR”).     The district

19   court granted SOCAR’s motion to dismiss for want of personal

20   jurisdiction.   See Frontera Res. Azer. Corp. v. State Oil Co. of

21   the Azer. Republic, 479 F. Supp. 2d 376, 388 (S.D.N.Y. 2007).     We

22   conclude that SOCAR is not entitled to the Due Process Clause’s

23   jurisdictional protections if it is an agent of the Azerbaijani

24   state.   Accordingly, we vacate and remand for the district court

25   to reconsider its analysis.

26                                 BACKGROUND

27        Frontera and SOCAR are two companies in the oil industry.

28   Frontera is based in the Cayman Islands, and SOCAR is based in

29   and owned by the Republic of Azerbaijan (“Azerbaijan”).     In

                                      -2-
1    November 1998, the parties entered into a written agreement (the

2    “Agreement”) under which Frontera developed and managed oil

3    deposits in Azerbaijan and delivered oil to SOCAR.      In 2000, a

4    dispute arose over SOCAR’s refusal to pay for some of this oil,

5    and in response, Frontera allegedly sought to sell oil that was

6    supposed to be sold to SOCAR to parties outside of Azerbaijan

7    instead.    In November 2000, after instructing local customs

8    authorities to block Frontera’s oil exports, SOCAR seized the

9    oil.

10          In March 2002, the bank that had financed Frontera’s

11   involvement in Azerbaijan foreclosed on its loan, forcing

12   Frontera to assign its rights in the project to the bank.      In

13   July 2002, the bank settled its claims with SOCAR.      Frontera,

14   however, continued to seek payment for both previously delivered

15   and seized oil.    Based on its settlement with the bank, SOCAR

16   denied liability to Frontera.

17          After Frontera and SOCAR were unable to settle their dispute

18   amicably, Frontera served SOCAR in July 2003 with a request for

19   arbitration as per the Agreement.      In January 2006, after a

20   hearing on the merits with full participation by both parties, a

21   Swedish arbitral tribunal awarded Frontera approximately $1.24

22   million plus interest.

23          On February 14, 2006, Frontera filed a petition in the

24   Southern District of New York to confirm the award pursuant to


                                      -3-
1    Article II(2) of the Convention on the Recognition and

2    Enforcement of Foreign Arbitral Awards (“New York Convention”),

3    opened for signature June 10, 1958, 21 U.S.T. 2517, 330 U.N.T.S.

4    38, implemented at 9 U.S.C. § 207.     The district court dismissed

5    the petition for lack of personal jurisdiction, on the basis that

6    SOCAR had insufficient contacts with the United States to meet

7    the Due Process Clause’s requirements for the assertion of

8    personal jurisdiction.    The district court questioned the

9    soundness of according due process protections to SOCAR, a

10   company owned by Azerbaijan, but nonetheless applied the

11   traditional due process test based on our precedent in Texas

12   Trading & Milling Corp. v. Federal Republic of Nigeria, 647 F.2d

13   300 (2d Cir. 1981).    The district court also declined to find

14   quasi in rem jurisdiction over SOCAR, because Frontera had not

15   identified specific SOCAR assets within the court’s jurisdiction.

16   The district court denied jurisdictional discovery and dismissed

17   Frontera’s petition.    This appeal followed.

18                                DISCUSSION

19        Frontera contends (1) that a court does not need personal

20   jurisdiction over a party in order to confirm a foreign arbitral

21   award against that party, and (2) that Texas Trading should be

22   overruled, because the Due Process Clause’s protections should

23   not apply to foreign states or their instrumentalities.    Frontera

24   also challenges the district court’s denial of jurisdictional


                                      -4-
1    discovery.

2    I.   Personal Jurisdiction over SOCAR

3         When considering a district court’s dismissal for lack of

4    personal jurisdiction, we review its factual findings for clear

5    error and its legal conclusions de novo.    See Sunward Elecs.,

6    Inc. v. McDonald, 362 F.3d 17, 22 (2d Cir. 2004).

7         Generally, personal jurisdiction has both statutory and

8    constitutional components.   A court must have a statutory basis

9    for asserting jurisdiction over a defendant, see Grand River

10   Enters. Six Nations, Ltd. v. Pryor, 425 F.3d 158, 165 (2d Cir.

11   2005), and the Due Process Clause typically also demands that the

12   defendant, if “not present within the territory of the forum,

13   . . . have certain minimum contacts with it such that the

14   maintenance of the suit does not offend ‘traditional notions of

15   fair play and substantial justice.’”    Int’l Shoe Co. v.

16   Washington, 326 U.S. 310, 316 (1945) (quoting Milliken v. Meyer,

17   311 U.S. 457, 463 (1940)).   The parties do not challenge the

18   district court’s reliance on the Foreign Sovereign Immunities Act

19   (“FSIA”), 28 U.S.C. § 1608(a), as the statutory basis for

20   jurisdiction over SOCAR.   See Frontera, 479 F. Supp. 2d at 379-

21   80; see also Argentine Republic v. Amerada Hess Shipping Corp.,

22   488 U.S. 428, 439 (1989) (stating that the FSIA “provides the

23   sole basis for obtaining jurisdiction over a foreign state in

24   federal court”).   This appeal instead is focused on the Due


                                     -5-
1    Process Clause’s place in the district court’s analysis.

2         The district court dismissed Frontera’s petition because it

3    concluded that SOCAR’s contacts with the United States were

4    insufficient to meet the Due Process Clause’s demands for

5    personal jurisdiction.   Frontera contends that this was in error

6    both because personal jurisdiction is not necessary for the

7    requested relief, and because SOCAR is not entitled to the Due

8    Process Clause’s protections.   We address each argument in turn.

9         A. The Need for Jurisdiction

10        Frontera argues that a district court does not need personal

11   jurisdiction over a respondent to confirm a foreign arbitral

12   award against that party.   Yet, Frontera contends, the district

13   court’s dismissal of its petition “necessarily rest[ed] upon an

14   assumption” that personal jurisdiction over SOCAR was

15   indispensable.   (Appellant’s Br. at 38.)

16        We read the district court’s decision differently.    Although

17   the district court considered whether it could assert personal

18   jurisdiction over SOCAR, it did not make that question

19   dispositive.   Instead, after finding SOCAR’s contacts with the

20   United States insufficient to establish personal jurisdiction,

21   the district court examined whether it had jurisdiction over any

22   of SOCAR’s assets, because “in the absence of minimum contacts,

23   quasi in rem jurisdiction may be exercised to attach property to

24   collect a debt.”   Frontera, 479 F. Supp. 2d at 387.   Thus, by


                                     -6-
1    suggesting that the district court required personal

2    jurisdiction, Frontera misunderstands the framework of the

3    court’s analysis.     And to the extent that Frontera’s challenge is

4    to the district court’s requirement of either personal or quasi

5    in rem jurisdiction, it is without merit.

6         We have previously avoided deciding whether personal or

7    quasi in rem jurisdiction is required to confirm foreign arbitral

8    awards pursuant to the New York Convention.          See Dardana Ltd. v.

9    A.O. Yuganskneftegaz, 317 F.3d 202, 207 (2d Cir. 2003).            However,

10   the numerous other courts to have addressed the issue have each

11   required personal or quasi in rem jurisdiction.           See, e.g.,

12   Telcordia Tech Inc. v. Telkom SA Ltd., 458 F.3d 172, 178-79 (3d

13   Cir. 2006); Glencore Grain Rotterdam B.V. v. Shivnath Rai

14   Harnarain Co., 284 F.3d 1114, 1120-22 (9th Cir. 2002); Base Metal

15   Trading, Ltd. v. OJSC “Novokuznetsky Aluminum Factory”, 283 F.3d

16   208, 212-13 (4th Cir. 2002); see also Transatl. Bulk Shipping

17   Ltd. v. Saudi Chartering S.A., 622 F. Supp. 25, 27 (S.D.N.Y.

18   1985).

19        Frontera contends that none of these courts addressed the

20   precise argument it advances here:        that there is no “positive

21   statutory or treaty basis” for such a jurisdictional

22   requirement.1    (Appellant’s Reply Br. at 11.)        The federal

     1
1          This position is not as novel as Frontera suggests. The Ninth Circuit
2    rejected an identical argument in Glencore Grain. See 284 F.3d at 1121 (“[I]t
3    is not significant in the least that the . . . [New York] Convention lacks
4    language requiring personal jurisdiction over the litigants. We hold that

                                         -7-
1    statute that implements the New York Convention requires a court

2    to confirm an award “unless it finds one of the grounds for

3    refusal or deferral of recognition or enforcement of the award

4    specified in the said Convention.”         9 U.S.C. § 207.     Article V of

5    the New York Convention “provides the exclusive grounds for

6    refusing confirmation,” Yusuf Ahmed Alghanim & Sons, W.L.L. v.

7    Toys “R” Us, Inc., 126 F.3d 15, 20 (2d Cir. 1997), and specifies

8    seven grounds for refusing to enforce an arbitral award, none of

9    which include a lack of jurisdiction over the respondent or the

10   respondent’s property, see New York Convention at art. 5, 21

11   U.S.T. at 2517.     Frontera accordingly argues that we cannot

12   impose a jurisdictional requirement if the Convention does not

13   already have one.     We disagree.

14         Unlike “state courts[,] [which] are courts of general

15   jurisdiction[,] . . . federal courts are courts of limited

16   jurisdiction which thus require a specific grant of

17   jurisdiction.”     Foxhall Realty Law Offices, Inc. v. Telecomm.

18   Premium Servs., Ltd., 156 F.3d 432, 435 (2d Cir. 1998) (citing

19   Sheldon v. Sill, 49 U.S. (8 How.) 441, 449 (1850)).            “The

20   validity of an order of a federal court depends upon that court’s

21   having jurisdiction over both the subject matter and the

22   parties.”    Ins. Corp. of Ir., Ltd. v. Compagnie des Bauxites de



1    neither the Convention nor its implementing legislation removed the district
2    courts’ obligation to find jurisdiction over the defendants in suits to
3    confirm arbitration awards.”).

                                          -8-
1    Guinee, 456 U.S. 694, 701 (1982).     While the requirement of

2    subject matter jurisdiction “functions as a restriction on

3    federal power,” id. at 702, the need for personal jurisdiction is

4    fundamental to “the court’s power to exercise control over the

5    parties,” Leroy v. Great W. United Corp., 443 U.S. 173, 180

6    (1979).   “Some basis must be shown, whether arising from the

7    respondent’s residence, his conduct, his consent, the location of

8    his property or otherwise, to justify his being subject to the

9    court’s power.”   Glencore Grain, 284 F.3d at 1122 (quoting

10   Transatl. Bulk Shipping, 622 F. Supp. at 27).

11        Because of the primacy of jurisdiction, “jurisdictional

12   questions ordinarily must precede merits determinations in

13   dispositional order.”   Sinochem Int’l Co. v. Malay. Int’l

14   Shipping Corp., 549 U.S. 422, 431 (2007).     “[T]he items listed in

15   Article V as the exclusive defenses . . . pertain to substantive

16   matters rather than to procedure.”     Monegasque de Reassurances

17   S.A.M. v. Nak Naftogaz of Ukr., 311 F.3d 488, 496 (2d Cir. 2002)

18   (emphasis added).   Article V’s exclusivity limits the ways in

19   which one can challenge a request for confirmation, but it does

20   nothing to alter the fundamental requirement of jurisdiction over

21   the party against whom enforcement is being sought.

22        Frontera argues that the Supreme Court suggested otherwise

23   in Shaffer v. Heitner, 433 U.S. 186 (1977), in the following

24   footnote:


                                     -9-
1         Once it has been determined by a court of competent
2         jurisdiction that the defendant is a debtor of the
3         plaintiff, there would seem to be no unfairness in allowing
4         an action to realize on that debt in a State where the
5         defendant has property, whether or not that State would have
6         jurisdiction to determine the existence of the debt as an
7         original matter.

8    Id. at 210 n.36.   But while this footnote indicated, in dicta,

9    that a court might not need jurisdiction over a respondent’s

10   person when enforcing a debt — “the Shaffer principle” that

11   Frontera makes much of, (Appellant’s Br. at 46) — it nonetheless

12   assumed that such a court would still have jurisdiction over the

13   respondent’s property.   And in this regard, the district court’s

14   approach in no way conflicted with Shaffer.   The district court

15   did not view its lack of personal jurisdiction over SOCAR as

16   fatal to Frontera’s petition; instead, the court then

17   appropriately considered whether it could assert jurisdiction

18   over SOCAR’s property.

19        We therefore hold that the district court did not err by

20   treating jurisdiction over either SOCAR or SOCAR’s property as a

21   prerequisite to the enforcement of Frontera’s petition.   The

22   district court may, however, have given the Constitution’s Due

23   Process Clause an unwarranted place in its analysis, which we

24   discuss next.

25        B. SOCAR’s Rights Under the Due Process Clause

26        The district court recognized that our precedent Texas

27   Trading compelled it to hold that SOCAR possessed rights under


                                    -10-
1    the Due Process Clause, thus requiring that jurisdiction over

2    SOCAR meet the minimum contacts requirements of International

3    Shoe.    The district court, however, questioned Texas Trading’s

4    soundness.    These doubts were well-founded.

5         The Due Process Clause famously states that “no person shall

6    be . . . deprived of life, liberty or property without due

7    process of law.”    U.S. Const. amend. V (emphasis added).    In

8    Texas Trading, we held that a foreign state was a “person” within

9    the meaning of the Due Process Clause, and that a court asserting

10   personal jurisdiction over a foreign state must — in addition to

11   complying with the FSIA — therefore engage in “a due process

12   scrutiny of the court’s power to exercise its authority” over the

13   state.    647 F.2d at 308, 313 (“[T]he [FSIA] cannot create

14   personal jurisdiction where the Constitution forbids it.”).

15   Texas Trading reached this conclusion without much analysis,

16   while also noting that cases on point were “rare.”     Id. at 313.

17   The FSIA had been enacted only five years earlier, and pre-FSIA

18   suits against foreign states were generally supported by quasi in

19   rem jurisdiction.    Id.   Subsequently, we applied Texas Trading

20   not only to foreign states but also to their agencies and

21   instrumentalities.    See, e.g., Seetransport Wiking Trader

22   Schiffarhtsgesellschaft MBH & Co. v. Navimpex Centrala Navala,

23   989 F.2d 572, 579-80 (2d Cir. 1993) (applying Texas Trading to a

24   foreign trading company wholly owned by Romania that “promoted


                                      -11-
1    ship sales through its governmental office in Manhattan”).

2         Since Texas Trading, however, the case law has marched in a

3    different direction.   In Republic of Argentina v. Weltover, Inc.,

4    the Supreme Court “assum[ed], without deciding, that a foreign

5    state is a ‘person’ for purposes of the Due Process Clause,” 504

6    U.S. 607, 619 (1992), but then cited South Carolina v.

7    Katzenbach, 383 U.S. 301, 323-24 (1966), which held that “States

8    of the Union are not ‘persons’ for purposes of the Due Process

9    Clause,” 504 U.S. at 619.   Weltover did not require deciding the

10   issue because Argentina’s contacts satisfied the due process

11   requirements, see id. at 619 & n.2, but the Court’s implication

12   was plain:   If the “States of the Union” have no rights under the

13   Due Process Clause, why should foreign states?

14        After Weltover, we noted that “we are uncertain whether

15   [Texas Trading] remains good law.”     Hanil Bank v. PT Bank Negara

16   Indon., 148 F.3d 127, 134 (2d Cir. 1998).    But we went no further

17   in Hanil Bank because the due process requirements were satisfied

18   in that case.   See id.   The instant case is different, however,

19   as only the Due Process Clause prevented the district court from

20   asserting personal jurisdiction over SOCAR.

21        In Price v. Socialist People’s Libyan Arab Jamahiriya, 294

22   F.3d 82 (D.C. Cir. 2002), the D.C. Circuit reasoned that because

23   “the word ‘person’ in the context of the Due Process Clause of

24   the Fifth Amendment cannot, by any reasonable mode of


                                     -12-
1    interpretation, be expanded to encompass the States of the

2    Union,” Katzenbach, 383 U.S. at 323, “absent some compelling

3    reason to treat foreign sovereigns more favorably than ‘States of

4    the Union,’ it would make no sense to view foreign states as

5    ‘persons’ under the Due Process Clause,” 294 F.3d at 96.             The

6    Price court found no such reason, see id. at 95-100, and we find

7    that case’s analysis persuasive.        As the Price court noted, the

8    States of the Union “both derive important benefits [from the

9    Constitution] and must abide by significant limitations as a

10   consequence of their participation [in the Union],” id. at 96,2

11   yet a “‘foreign State lies outside the structure of the Union,’”

12   id. (quoting Principality of Monaco v. Mississippi, 292 U.S. 313,

13   330 (1934)).

14         If the States, as sovereigns that are part of the Union,

15   cannot “avail themselves of the fundamental safeguards of the Due

16   Process Clause,” Price, 294 F.3d at 97, we do not see why foreign

17   states, as sovereigns wholly outside the Union, should be in a

18   more favored position.      This is particularly so when the Supreme

19   Court has “[n]ever . . . suggested that foreign nations enjoy



     2
 1         Price compared U.S. Const. art. I, § 10 (prohibiting specific acts by
 2   the States), with id. at art. IV, § 4 (“The United States shall guarantee to
 3   every State in this Union a Republican form of Government, and shall protect
 4   each of them against Invasion; and on Application of the Legislature, or of
 5   the Executive (when the Legislature cannot be convened) against domestic
 6   Violence.”), and id. at art. VI, cl. 2 (“This Constitution, and the Laws of
 7   the United States which shall be made in Pursuance thereof ... shall be the
 8   supreme Law of the Land; and the Judges in every State shall be bound thereby,
 9   any Thing in the Constitution or Law of the State to the Contrary
10   notwithstanding.”). 294 F.3d at 96.

                                         -13-
1    rights derived from the Constitution,” and when courts have

2    instead “relied on principles of comity and international law to

3    protect foreign governments in the American legal system.”    Id.

4    For the reasons discussed by the Price court in its thorough

5    opinion, we “are unwilling to interpret the Due Process Clause as

6    conferring rights on foreign nations that States of the Union do

7    not possess.”    Id. at 99.   Thus, we hold that the district court

8    erred, albeit understandably in light of Texas Trading, by

9    holding that foreign states and their instrumentalities are

10   entitled to the jurisdictional protections of the Due Process

11   Clause.

12        SOCAR argues otherwise by defending not Texas Trading’s

13   reasoning but its significance as precedent.    And, to be sure,

14   our court’s decisions are binding until overruled by us sitting

15   en banc or by the Supreme Court, United States v. Wilkerson, 361

16   F.3d 717, 732 (2d Cir. 2004), neither of which has happened to

17   Texas Trading.    “We do, however, recognize an exception to this

18   general rule where there has been an intervening Supreme Court

19   decision that casts doubt on our controlling precedent.”    Gelman

20   v. Ashcroft, 372 F.3d 495, 499 (2d Cir. 2004) (internal quotation

21   marks omitted).    Although Weltover arguably casts sufficient

22   doubt on Texas Trading to justify its overruling by this panel,

23   see Hanil Bank, 148 F.3d at 134, we have nonetheless circulated

24   this opinion to all active members of our court, and none has


                                      -14-
1    objected to our departure from Texas Trading.   See United States

2    v. Parkes, 497 F.3d 220, 230 n.7 (2d Cir. 2007) (describing our

3    “mini-en banc” process).   Accordingly, to the extent that Texas

4    Trading conflicts with our holding today that foreign states are

5    not “persons” entitled to rights under the Due Process Clause, it

6    is overruled.

7         Simply overruling Texas Trading, however, and holding that a

8    sovereign state does not enjoy due process protections does not

9    decide the precise question in this case, because SOCAR is not a

10   sovereign state, but rather an instrumentality or agency of one.

11   Frontera contends that, because the FSIA treats foreign states

12   and their agencies and instrumentalities identically, see

13   Kensington Int’l Ltd. v. Itoua, 505 F.3d 147, 153 (2d Cir. 2007)

14   (citing 28 U.S.C. § 1603(a)), we should treat SOCAR just as we

15   would treat Azerbaijan for constitutional purposes.   The simple

16   fact that SOCAR is deemed a foreign state as a statutory matter,

17   however, does not answer the constitutional question of SOCAR’s

18   due process rights.   SOCAR may indeed lack due process rights

19   like a foreign state, but similar statutory treatment will not be

20   the reason.

21        However, if the Azerbaijani government “exerted sufficient

22   control over” SOCAR “to make it an agent of the State, then there

23   is no reason to extend to [SOCAR] a constitutional right that is

24   denied to the sovereign itself.”   TMR Energy Ltd. v. State Prop.


                                    -15-
1    Fund of Ukr., 411 F.3d 296, 301 (D.C. Cir. 2005).   Although

2    “government instrumentalities established as juridical entities

3    distinct and independent from their sovereign should normally be

4    treated as such,” this presumption can be overcome if the state

5    so “extensively control[s]” the instrumentality “that a

6    relationship of principal and agent is created,” or if

7    “adher[ing] blindly to the corporate form . . . would cause . . .

8    injustice.”   First Nat’l City Bank v. Banco Para El Comercio

9    Exterior de Cuba (“Bancec”), 462 U.S. 611, 626-27, 629, 632

10   (1983); see also Zappia Middle E. Constr. Co. v. Emirate of Abu

11   Dhabi, 215 F.3d 247, 252 (2d Cir. 2000) (“While the presumption

12   of separateness is a strong one, it may be overcome if a

13   corporate entity is so extensively controlled by the sovereign

14   that the latter is effectively the agent of the former, or if

15   recognizing the corporate entity as independent would work a

16   fraud or injustice.”).   Although Bancec asked when a state

17   instrumentality can be treated like its state for “the

18   attribution of liability,” id. at 622 n.11, we think, as the D.C.

19   Circuit did in TMR Energy, that Bancec’s analytic framework is

20   also applicable when the question is whether the instrumentality

21   should have due process rights to which the state is not

22   entitled.   See TMR Energy, 411 F.3d at 301; see also, e.g.,

23   Walter Fuller Aircraft Sales, Inc. v. Republic of the Phil., 965

24   F.2d 1375, 1382 (5th Cir. 1992) (“The broader principles upon


                                    -16-
1    which Bancec was based . . . are undoubtedly relevant whenever a

2    plaintiff seeks to disregard a foreign government instrumentality

3    . . . .”).   Accordingly, if SOCAR is an agent of the Azerbaijani

4    state, as recognized in Bancec and subsequent cases, then, like

5    Azerbaijan, SOCAR lacks due process rights.

6         The district court did not decide whether SOCAR is an agent

7    of the state because Texas Trading rendered the question

8    unnecessary and, unsurprisingly, there was scant briefing on the

9    issue.   SOCAR suggests that the parties’ lack of focus on the

10   question should be fatal to Frontera’s position, because Frontera

11   “bears the burden of proving that the corporate entity should not

12   be presumed distinct from a sovereign or sovereign entity.”

13   Zappia, 215 F.3d at 252.   But the Bancec analysis and Frontera’s

14   related burden were not relevant until our decision today, nor

15   did Frontera argue that Bancec should apply.   Cf. Brooklyn Legal

16   Servs. Corp. v. Legal Servs. Corp., 462 F.3d 219, 232 (2d Cir.

17   2006) (“It is our role to ensure that in making factual findings,

18   the district court applies the proper legal test and applies it

19   correctly.”).   Moreover, using the parties’ inattention to

20   SOCAR’s relationship with Azerbaijan to decide that SOCAR is not

21   an agent of the state would still not resolve this appeal.    We

22   would then have to determine whether SOCAR, as a corporation

23   owned by a foreign state but not the state’s agent, was entitled

24   to the Due Process Clause’s protections.


                                    -17-
1         In TMR Energy, the D.C. Circuit called this last question

2    “far from obvious.”   411 F.3d at 302 n.*.   The TMR Energy court

3    observed that “‘aliens receive constitutional protections [only]

4    when they have come within the territory of the United States and

5    developed substantial connections with this country.’”   Id.

6    (quoting United States v. Verdugo-Urguidez, 494 U.S. 259, 271

7    (1990)) (alteration in TMR Energy).    The Supreme Court has gone

8    so far as to accord due process protections to privately owned

9    foreign corporations.   See Helicopteros Nacionales de Colombia,

10   S.A. v. Hall, 466 U.S. 408, 418-19 (1984); see also, e.g., Bank

11   Brussels Lambert v. Fiddler Gonzalez & Rodriguez, 171 F.3d 779,

12   784 (2d Cir. 1999); Metro. Life Ins. Co. v. Robertson-Ceco Corp.,

13   84 F.3d 560, 571 (2d Cir. 1996).   Whether, and to what extent, it

14   would do so for state-owned foreign corporations has not been

15   decided.   And, given the present posture of this litigation, it

16   would be premature for us to address this question without

17   hearing first from the court below.    See Farricielli v. Holbrook,

18   215 F.3d 241, 246 (2d Cir. 2000) (per curiam) (“It is our settled

19   practice to allow the district court to address arguments in the

20   first instance.”).    Accordingly, we choose to remand so that in

21   the first instance the district court can determine, in light of

22   Texas Trading’s demise and Bancec’s new relevance to this

23   context, (1) whether SOCAR is an agent of Azerbaijan, and if not,

24   (2) whether SOCAR is entitled to the protections of the Due


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1    Process Clause.

2    II. Jurisdictional Discovery

3         Frontera also argues that the district court erred by

4    rejecting its request for limited discovery of SOCAR’s contacts

5    with the United States.   We review the district court’s decision

6    for an abuse of discretion.    See Jazini v. Nissan Motor Co., 148

7    F.3d 181, 186 (2d Cir. 1998).   This issue is relevant only if the

8    Due Process Clause protects SOCAR, which is for the district

9    court to determine on remand.

10        “A district court has wide latitude to determine the scope

11   of discovery,” In re Agent Orange Prod. Liab. Litig., 517 F.3d

12   76, 103 (2d Cir. 2008), and is typically within its discretion to

13   deny jurisdictional discovery when “the plaintiff [has] not made

14   out a prima facie case for jurisdiction,” Best Van Lines, Inc. v.

15   Walker, 490 F.3d 239, 255 (2d Cir. 2007) (citing cases).

16   Assuming for the moment that SOCAR has the jurisdictional

17   protections of the Due Process Clause, to establish jurisdiction

18   Frontera must show that SOCAR had “continuous and systematic

19   general business contacts” with the United States, Metro. Life

20   Ins. Co., 84 F.3d at 568 (quoting Helicopteros, 466 U.S. at 416),

21   a highly fact-sensitive “contextual inquiry” with no one factor

22   having “talismanic significance,” id. at 570-71.

23        Frontera argued that SOCAR’s production-sharing contracts

24   with several U.S. oil companies and loan agreement with “a


                                     -19-
1    syndicate that included [a] U.S. bank” brought it within the

2    district court’s jurisdiction.    Frontera, 479 F. Supp. 2d at 386.

3    Frontera also alleged that “it is highly likely that at least a

4    portion of [SOCAR’s] oil and gas revenues are processed through

5    U.S.-based banks.”   Id. at 386-87 (alteration in original).   The

6    district court dismissed this latter allegation as “conclusory,”

7    and then found the rest of Frontera’s claims insufficient to

8    demonstrate a prima facie case for jurisdiction, reasoning that

9    “[t]he fact that American oil companies and one bank have entered

10   into contracts with SOCAR for oil production in Azerbaijan does

11   not demonstrate a continuous and systematic presence in the

12   United States.”   Id.   “In the absence of any prima facie showing

13   of personal jurisdiction,” the district court found it

14   “inappropriate to subject SOCAR to the burden and expense of

15   discovery” and denied Frontera’s request.   Id. at 387.

16        Frontera contends that our decision in Seetransport

17   demonstrates that the district court’s denial was erroneous.    In

18   Seetransport, we held that a foreign company’s “deliberate[]”

19   solicitations of business through U.S.-based representatives

20   “with a fair measure of permanence or continuity” met the minimum

21   requirements for general personal jurisdiction.   989 F.2d at 580.

22   Frontera argues that SOCAR’s contracts with U.S. oil and

23   financial companies “were likely the product of the type of

24   ‘deliberate solicitations’” found sufficient in Seetransport, see


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1    id., and that the district court should therefore have granted

2    jurisdictional discovery.      (Appellant’s Br. at 54-55.)   But this

3    is pure speculation on Frontera’s part.

4           Seetransport addressed solicitations that were

5    “deliberate[,] and not occasional[] or casual[],” with the record

6    establishing the defendant’s use of a New York office.       989 F.2d

7    at 580.    Here, the fact that SOCAR has relationships with

8    American companies, without more, could just as easily be the

9    result of occasional or casual solicitations, or solicitations

10   outside the United States.      Thus, because Frontera has not

11   pointed to anything in the record that suggests otherwise, we

12   will not disturb the district court’s discretionary decision not

13   to allow discovery.    See Best Van Lines, 490 F.3d at 255 (“We

14   conclude that the district court acted well within its discretion

15   in declining to permit discovery because the plaintiff had not

16   made out a prima facie case for jurisdiction.”).       The district

17   court is free to consider further discovery requests in light of

18   the questions it must decide on remand.

19   III.    Forum Non Conveniens

20          Finally, SOCAR asks us to affirm the district court’s

21   dismissal on the alternate basis of forum non conveniens.         Having

22   dismissed for want of jurisdiction, the district court expressly

23   declined to address this argument.       Following “our settled

24   practice” of allowing district courts to address arguments in the


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1   first instance, Farricielli, 215 F.3d at 246, we express no view

2   on SOCAR’s forum non conveniens argument, which it is free to

3   raise again on remand.

4                              CONCLUSION

5         For the foregoing reasons, we VACATE the district court’s

6   dismissal of Frontera’s petition and REMAND for further

7   proceedings.




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