200 F.3d 843 (D.C. Cir. 2000)
Transamerica Leasing, Inc., et al., Appelleesv.La Republica de Venezuela and Fondo de Inversiones de Venezuela, Appellants
No. 98-7206
United States Court of Appeals FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued September 13, 1999Decided January 21, 2000Rehearing and Rehearing En Banc Denied March 8, 2000*

[Copyrighted Material Omitted]
Appeal from the United States District Court for the District of Columbia, (No. 97cv01354)
Alexander E. Bennett argued the cause for appellants.   With him on the briefs were Mark H. Stumpf, Steven G.  Reade, Jean E. Kalicki, and Beth R. Kallet.
John E. Bradley argued the cause for appellees.  With him  on the brief were Benjamin P. Deutsch, and Lisa M. Cobb.   Cherie B. Artz entered an appearance.
Before:  Ginsburg, Henderson, and Tatel, Circuit Judges.
Opinion for the Court filed by Circuit Judge Ginsburg.
Ginsburg, Circuit Judge:


1
Twelve companies that leased equipment to the now defunct CompaNia Anonima Venezolana de NavegaciOn (CAVN), a shipping company owned by the Republic de Venezuela, brought suit against Venezuela and  the Fondo de Inversiones de Venezuela (FIV), an instrumentality of the Venezuelan government created to assist in  restructuring and privatizing state enterprises.  The first  three counts of the complaint allege that Venezuela and the  FIV are derivatively liable for CAVN's breaches of contract.   The final count alleges that Venezuela and the FIV are directlyliable for having caused CAVN to breach its con- tracts with the plaintiffs.


2
In this interlocutory appeal, Venezuela and the FIV argue  that they are immune from suit upon all counts under the  Foreign Sovereign Immunities Act of 1976 (FSIA), 28 U.S.C.  § 1602 et seq., and that they are immune from suit upon the  fourth count under the "act of state" doctrine as well.  We  hold that because they did not exercise the requisite control  over CAVN, Venezuela and the FIV are indeed immune from  suit upon the first three counts.  We remand the case for the  district court to consider in the first instance whether the  defendants are immune from suit upon the fourth count.

I. Background

3
Although the parties vigorously dispute many details of the  relationship between CAVN and the defendants, the basic  facts underlying this case are uncontested.  CAVN was an  international shipping company created in 1917 by Venezuela  and operated as a state-owned instrumentality until it filed  for bankruptcy in 1994.  At all relevant times, the FIV,  known under Venezuelan law as an "autonomous institute,"  owned 99.86% of CAVN's stock and Venezuela, through vari- ous ministries, owned the remainder.  The plaintiffs are  twelve corporations that leased to CAVN shipping equipment,  such as containers and chassis, between 1982 and 1993.


4
In the early 1990s CAVN began experiencing severe financial trouble, in part because of the inefficient way in which it  handled leased equipment.  In September 1991 the FIV,  concerned about CAVN's mounting losses, commissioned the  consulting firm Booz, Allen & Hamilton, Inc. to assess  CAVN's financial health and operating procedures.  Booz  Allen recommended that CAVN restructure its operations,  upgrade its fleet, overhaul its handling of leased equipment,  and in general strengthen its management.


5
In 1992 CAVN requested financial assistance from the FIV,  which referred the request to the Sectoral Cabinet for Economic and Social Policy Issues, an organization that by law  must approve all such requests before the FIV may act.  The  Cabinet approved CAVN's request conditioned upon CAVN's  agreement to restructure.  When CAVN agreed to that condition, the FIV commissioned Booz Allen to prepare a re- structuring plan.  The FIV made funds available to CAVN  through a trust agreement under which the FIV is both  settlor and trustee and CAVN is the beneficiary.  Under the  agreement, CAVN had to place some of its assets in trust  with the FIV as collateral.


6
Notwithstanding these efforts, CAVN began to fall behind  in its lease payments and in 1993 the plaintiffs issued notices  of default and termination.  In November 1993 CAVN and  the lessors agreed to restructure CAVN's payments;  until  January 1994 the FIV provided additional capital infusions to  allow CAVN to meet the restructured payment schedules.  In  April 1994 the lessors again agreed to restructure CAVN's  payments.  By July, however, CAVN was unable to continue  operations:  it filed for bankruptcy in October 1994.


7
In June 1997 the plaintiffs brought this suit against the  Republic of Venezuela and the FIV (henceforth referred to  collectively as "Venezuela" or "the Government").  In the  first three counts of the complaint they allege that Venezuela  used CAVN as its "alter ego," or as its "agent," or that it  cloaked CAVN with apparent authority to bind the Government, and that Venezuela is therefore liable upon the lease  agreements and restructured payment schedules.  In the final count the lessors allege that Venezuela, by refusing to  continue providing funds to CAVN, caused CAVN to breach  its contracts with the plaintiffs.  Venezuela moved to dismiss  the complaint in January 1998, claiming that under the FSIA  it is immune from suit upon all counts and that suit upon the  fourth count is precluded under the act of state doctrine as  well.


8
The district court denied Venezuela's motion to dismiss.   Based upon the pleadings and the extensive evidence submitted supporting and opposing the motion, the district court  found that Venezuela, which had appointed the Board, exert- ed extensive control over CAVN's everyday operations,  played a major role in CAVN's financial restructuring, and  appeared to have authorized CAVN to act on its behalf.   From these findings the district court concluded both that CAVN had in fact acted as the Government's agent, and that  it had apparent authority to act for the Government, in its  dealings with the plaintiffs, and therefore that Venezuela is  amenable to a suit based upon the activities of CAVN.  The  court did not discuss the final count of the complaint, in which  the plaintiffs seek to hold Venezuela liable for causing CAVN  to breach its contracts, and with respect to which the Government raises the act of state objection.

II. Analysis

9
Venezuela filed this interlocutory appeal in order to press  its claim of immunity from suit.  Under the FSIA a "foreign  state [is] immune from the jurisdiction of the courts of the  United States and of the States," subject to certain enumerated exceptions.  28 U.S.C. § 1604.  For this purpose, "foreign  state" includes any "agency or instrumentality" thereof.  28  U.S.C. § 1603(a).  Both Venezuela and the FIV are immune  from suit upon the plaintiffs' claims, therefore, unless those  claims fall within one of the listed exceptions.  The plaintiffs  contend that their claims are within the "commercial activity"  exception, which provides that:


10
(a) A foreign state shall not be immune from the jurisdiction of courts of the United States or of the States in       any case


11
(2) in which the action is based upon a commercial activity carried on in the United States by the foreign       state;  or upon an act performed in the United States in       connection with a commercial activity of the foreign state       elsewhere;  or upon an act outside the territory of the       United States in connection with a commercial activity of       the foreign state elsewhere and that act causes a direct       effect in the United States;       28 U.S.C. § 1605(a)(2).


12
Venezuela implicitly concedes that the first three counts of  the complaint are based upon "commercial activities" within  the meaning of 28 U.S.C. § 1605(a)(2), but maintains that it is  not amenable to a suit based upon the commercial activities of  CAVN because CAVN was not its agent.  As to the final count, Venezuela argues first that the activities alleged there  are not "commercial activities," and second that they are acts  of state for which the Government is immune from trial in  any event.


13
The district court's denial of a foreign state's motion to  dismiss upon the ground of sovereign immunity is subject to  interlocutory appeal under the collateral order doctrine.  See  Foremost-McKesson, Inc. v. Islamic Republic of Iran, 905  F.2d 438, 443 (D.C. Cir. 1990) (citing Cohen v. Beneficial  Industrial Loan Corp., 337 U.S. 541, 545-47 (1949)).  We  review the district court's findings of fact for clear error, see  Jungquist v. Sheikh Sultan Bin Khalifa Al Nahyan, 115 F.3d  1020, 1028 (D.C. Cir. 1997), and in this case we find none.   We review de novo the district court's determination that Venezuela is not entitled to immunity, see id., to which task  the balance of this opinion is devoted.


14
A.    Subject matter jurisdiction, Counts I-III


15
A government instrumentality "established as [a] juridical  entit[y] distinct and independent from [its] sovereign should  normally be treated as such";  thus, it is presumed to have  legal status separate from that of the sovereign.  First  National City Bank v. Banco Para El Comercio Exterior de Cuba, 462 U.S. 611, 627 (1983) (Bancec).  That presumption  can be overcomein two situations:  First, "where a corporate  entity is so extensively controlled by its owner that a relation- ship of principal and agent is created," id. at 629 (citing  NLRB v. Deena Artware, Inc., 361 U.S. 398, 402-404 (1960));   and second, where recognition of the instrumentality as an  entity apart from the state "would work fraud or injustice."   Id. (citing Taylor v. Standard Gas & Electric Co., 306 U.S.  307, 322 (1939)).  Although the Supreme Court in Bancec  recognized these as exceptions to the rule that a foreign  sovereign is not liable for the acts of an instrumentality of the  state, we have since held that they serve also as exceptions to  the rule that a foreign sovereign is not amenable to suit based  upon the acts of such an instrumentality.  See, e.g.,  Foremost-McKesson, 905 F.2d at 446-47.  Accordingly, the  present plaintiffs argue both reasons--agency and injustice-- for holding that Venezuela is amenable to suit based upon the  activities of CAVN.


16
1.   The agency exception:  Principles                 Our previous decisions applying the agency exception to the  rule of sovereign immunity have generally focused upon how  much control the sovereign exercised over the instrumentality, without explicating why and the circumstances in which  control is relevant to the question of the sovereign's amenability to suit.  See, e.g., McKesson Corp. v. Islamic Republic  of Iran, 52 F.3d 346, 352 (1995).  Control by the sovereign is  relevant in two distinct contexts, as discussed below.


17
a. Control


18
First, control is relevant when it significantly exceeds the  normal supervisory control exercised by any corporate parent  over its subsidiary and, indeed, amounts to complete domination of the subsidiary.  A sovereign is amenable to suit based  upon the actions of an instrumentality it dominates because  the sovereign and the instrumentality are in those circum- stances not meaningfully distinct entities;  they act as one.   Indeed, in the case cited by the Supreme Court to illustrate  the agency exception, various corporations were allegedly operated as a "single enterprise."  See NLRB v. Deena  Artware, Inc., 361 U.S. 398 (1960).


19
In that case, the NLRB had ordered an employer to offer  reinstatement and backpay to former employees.  See id. at  399.  Although the employer initially complied with the order,  it soon ceased operations without having paid back wages.   See id.  The employer was, however, only one of several  wholly-owned subsidiaries of the same parent corporation.   See id. at 399-400.  The Board petitioned the court of appeals  to hold not only the subsidiary employer but also its parent  and the sister subsidiaries in civil contempt.  The Board  proceeded in part upon the theory that the various corporations were operated as a "single enterprise" with each per- forming "a particular function, as a department or division of  the one enterprise in the manufacture, sale and distribution of  the common product."  Id. at 401.  The court of appeals dismissed the petition but the Supreme Court reinstated it  and granted the Board discovery on the "single enterprise"  issue.  Id. at 404.


20
In the course of reaching that decision, the Supreme Court  offered numerous examples of situations where one company  so dominated another that the courts held the controlling  company liable for the obligations of the controlled company.   Thus, if one corporation is "operated as a division of another,"  then the latter may be held responsible for the acts of the  former.  Id. at 403 & n.2 citing, for example, Foard Co. v.  Maryland, 219 F. 827, 829 (4th Cir. 1914) (involving subsidiary that did not handle any funds and paid all profits to  parent "as a charge for managing the business"), and Dillard  & Coffin Co. v. Richmond Cotton Oil Co., 140 Tenn. 290, 293- 94 (1918) (involving parent that could atany time dismiss  subsidiary's Board of Directors and appoint new directors of  its choosing, that received "daily reports of each transaction"  consummated by subsidiary, and that paid financial obligations of subsidiary).  Or the "affairs of the group may be so  intermingled that no distinct corporate lines are maintained."   Id. at 403 & n.4, citing, for example, The Willem Van Driel,  Sr. v. Pennsylvania R.R. Co., 252 F. 35, 37 (4th Cir. 1918)  (involving railroad that dictated subsidiary elevator company's clients, appointed own officers to run elevator company,  controlled elevator company's accounts, and used elevator  company's profits for its own purposes).  In addition, a  parent corporation may be held liable for the acts of a  subsidiary that is a "shell, inadequately financed."  Id. at 403  & n.3, citing, for example, Luckenbach S.S. Co., Inc. v. W.R.  Grace & Co. Inc., 267 F. 676, 681 (4th Cir. 1920) (involving  subsidiary that was undercapitalized, issued 94% of its stock  to owner of parent, leased equipment from parent at "far  below ... rental value," and was "personally managed" by  owner of parent).


21
Second, control is relevant when the sovereign exercises its  control in such a way as to make the instrumentality its  agent;  in that case control renders the sovereign amenable to  suit under ordinary agency principles.  See Gilson v. Repub- lic of Ireland, 682 F.2d 1022, 1026 n.16, 1029 (D.C. Cir. 1982)  ("An agent's actions may provide the basis for jurisdiction  over the principal").  The relationship of principal and agent  depends, however, upon the principal having "the right to  control the conduct of the agent with respect to matters  entrusted to [the agent]."  Restatement (Second) of Agency  § 14 (1958).


22
A sovereign does not create an agency relationship merely  by owning a majority of a corporation's stock or by appointing its Board of Directors.  See Foremost-McKesson, 905  F.2d at 448;  Restatement (Second) of Agency § 14M.  If majority stock ownership and appointment of the directors  were sufficient, then the presumption of separateness announced in Bancec would be an illusion.  At the same time, a  sovereign need not exercise complete dominion over an instrumentality--to the point of stripping it of any meaningful  separate identity--in order to establish a relationship of  principal and agent.  If such domination were required, then  agency principles would be superfluous because, as discussed  above, the sovereign would be subject to suit on the ground  that instrumentality and sovereign were in fact a single  entity.


23
Courts have long struggled, often with confusing results, to  explain how much control is required before parent and  subsidiary may be deemed principal and agent.  Cf. Berkey v.  Third Avenue Railway Co., 244 N.Y. 84, 155 N.E. 58, 61  (1926) ("The whole problem of the relation between parent  and subsidiary corporations is one that is still enveloped in  the mists of metaphor");  Restatement (Second) of Agency § 14M reporter's notes ("When liability is fastened upon the  parent it is said that the subsidiary is a 'mere agent' [which  has resulted in] a weakening and muddying of the term  'agent' and a failure by courts to state the real reasons for  their decisions").  The question defies resolution by "mechanical formula[e]," for the inquiry is inherently fact-specific.   See Bancec, 462 U.S. at 633.  At a minimum, however, we can  confidently state that the relationship of principal and agent  does not obtain unless the parent has manifested its desire  for the subsidiary to act upon the parent's behalf, the subsidiary has consented so to act, the parent has the right to  exercise control over the subsidiary with respect to matters  entrusted to the subsidiary, and the parent exercises its  control in a manner more direct than by voting a majority of  the stock in the subsidiary or making appointments to the  subsidiary's Board of Directors.  See Restatement (Second) of Agency § 1 ("Agency is the fiduciary relation which results  from the manifestation of consent by one person to another  that the other shall act on his behalf and subjectto his control, and consent by the other so to act").


24
That a state and a state-owned corporation may in some  circumstances be, respectively, principal and agent does not  necessarily mean, however, that in those circumstances the  sovereign is amenable to a suit based upon the acts of the  agent.  For example, "jurisdiction [over the sovereign] cannot  be maintained if the agent's actions are not related to the  substance of plaintiff's cause of action."  Gilson, 682 F.2d at  1029-30.  Nor, under principles of agency, is a sovereign  amenable to suit upon a contract that its agent made on its  own account though, unbeknownst to the contracting plaintiff,  the sovereign had authorized the agent to make the contract on the sovereign's behalf.  See Restatement (Second) of  Agency § 199.


25
b. Apparent authority


26
A plaintiff might contend that a corporation, even if not an  agent of the sovereign, had apparent authority to act on the  sovereign's behalf.  In that case the plaintiff would have to  show that it reasonably relied upon a manifestation by the  sovereign to that effect. See Restatement (Second) of Agency  § 27 ("[A]pparent authority to do an act is created as to a  third person by [a manifestation] of the principal which,  reasonably interpreted, causes the third person to believe  that the principal consents to have the act done on his behalf  by the person purporting to act for him");  see also Restatement (Second) of Agency § 27 cmt. d (explaining that a  manager "has apparent authority to do those things which  managers in that business ... customarily do");  Restatement (Second) of Agency § 159 & cmt. b;  Restatement  (Second) of Agency § 8 & cmt. a.  For example, if a sovereign falsely represented to a third party that an instrumentality of the state was authorized to act as the sovereign's agent  and the third party reasonably relied upon that representation when contracting with the instrumentality, then under  agency principles the third party could sue the sovereign  upon the contract under a theory of apparent authority even  though the sovereign and the instrumentality were not, in  fact, related as principal and agent.  See, e.g., Restatement  (Second) of Agency § 8 cmt. a, illus. 3.  We doubt, however,  that a case of merely apparent authority falls within the  agency exception--an exception limited by its terms to situations in which the instrumentality "is so extensively controlled  by [the sovereign] that a relationship of principal and agent is  created."  Bancec, 462 U.S. at 629.  (Still, in an appropriate  case a court might attribute the acts of the instrumentality to  the sovereign under the exception for fraud or injustice).

2.    The agency exception:

27
Application  With these background principles in mind, we turn to the  facts of the case at bar.  Recall that the district court denied  Venezuela immunity under the FSIA based upon its conclusions that CAVN was an agent of the State and that CAVN  had apparent authority to act for the State.  Upon appeal, the  plaintiffs also seem to argue that Venezuela so dominated  CAVN as to deprive it of separate juridical identity.


28
a.    Control


29
In our view, the plaintiffs, whether understood to contend  that Venezuela so dominated CAVN that the corporation  lacked a distinct identity, or merely that CAVN acted as the  Government's agent, have failed to demonstrate that Venezuela controlled CAVN to a degree sufficient to render the  State amenable to suit based upon the actions of the corporation.


30
The district court focused upon five facts that led it to  attribute the actions of CAVN to the Government:  Venezuela  (1) owned a majority of CAVN's stock;  (2) appointed the  Board of Directors and the Chairman of the Board and  President;  (3) was involved in CAVN's "day-to-day" operations by overseeing the restructuring of CAVN's intermodal  operations and approving the sale of three of CAVN's vessels;   and (4) aided CAVN financially byallowing the FIV to enter  into a trust agreement with CAVN;  while (5) the President of  CAVN, with apparent authority to bind Venezuela, assured  one of the plaintiffs that the Government would support  CAVN.  Before this court, the plaintiffs press these considerations as support for both their domination and their agency  theories of the case.


31
In our view however, the facts as found, considered as a  whole, establish neither that Venezuela dominated CAVN nor  that CAVN was Venezuela's actual or apparent agent.  The  first two facts--that the Government owned CAVN's stock  and could appoint CAVN's Board of Directors and the Chair- man and President--are relevant but as a matter of law do  not by themselves establish the required control, see  Foremost-McKesson, 905 F.2d at 448, and the remaining  factors do not make up the shortfall.


32
As for the third fact, the Government's purported role in  CAVN's "day-to-day operations," the district court found that "CAVN's Board of Directors appointed Captain Antonio  Romero Sierraalta, a maritime professional and officer in the  Venezuelan Navy, with full power and authority, to head a  new Intermodal Division," and that the Board directed him to  implement Booz Allen's recommendations for restructuring.   After describing the extensive changes Capt. Sierraalta made  in that managerial capacity and noting that " 'the [B]oard of  [Directors] was aware of [the] details ...' of these efforts,"  the district court concluded that the Government, "through  the appointment of Capt. Sierraalta, effectively commandeered the principal intermodal operations of CAVN."  These  findings, however, describe nothing more than the sole share- holder exercising its influence, through the Board of Directors, to put its own chosen manager in charge of a  corporation that was suffering severe operational problems-- and leaving to him the task of running "day-to-day" operations.  If that were enough to make the shareholder answerable for the acts of the corporation, then the holding of  Foremost-McKesson that majority stock ownership and control over the Board of Directors are insufficient to transform  parent to principal and instrumentality to agent would be  limited to cases in which the shareholder is utterly quiescent;   let it exert itself at all to protect its interests and it loses its  legal identity separate from that of the corporation.  That is  not the law.  See, e.g., Restatement (Second) of Agency  § 14M.


33
The court also found that the Government was involved in  CAVN's "day-to-day" operations because "the Economic Department for the Sector, an agent of ... Venezuela, authorized the sale of [three] of CAVN's vessels."  This finding  adds no support for the proposition that Venezuela exercised  the requisite control over CAVN.  First, the sale of a portion  of its fleet as part of a massive restructuring hardly qualifies  as CAVN's "day-to-day" business.  Second, it is not uncommon for a government--as regulator, not as shareholder--to  require approval for certain transactions in the transportation  sector.  See, e.g., 49 U.S.C. § 11323(a)(2)(requiring that the  Surface Transportation Board approve a "purchase, lease, or  contract to operate property of another rail carrier");  46 App. U.S.C. § 1704(a) (giving Federal Maritime Commission juris- diction over certain agreements among "ocean common carriers").  Because the record evidence cited by the district court  in support of its finding is somewhat cryptic, it is unclear why  the Department for the Sector approved the sale of the ships  and even whether its approval was required.  There is at  least some evidence in the record that Venezuela generally  regulates the sales of vessels.  Without more, we cannot say  that requiring a shipping company to obtain governmental  approval for the sale of vessels represents the exercise of  Venezuela's authority as shareholder rather than its exercise  of governmental power in the ordinary course of regulation.


34
Finally, the district court considered the Government's  "financial involvement" withCAVN.  The court found that  CAVN's counsel, in a letter to the United States Federal  Maritime Commission, had "acknowledged that the operating  assets of CAVN were owned and controlled by ... Venezue- la."  In context, however, that statement is utterly innocuous.   The letter was sent in response to a request from the FMC  for information, which included the following question:


35
Are your operating assets directly or indirectly owned or controlled by a government under whose registry any of       your vessels operate?  ...  For purposes of this question, ownership or control is deemed to exist if a majority       interest in the carrier, or its operating assets, is owned       or controlled in any manner by a government ... or       entity controlled by such government.


36
Counsel answered the question by stating, "Yes, the Republic  of Venezuela," which he had to do simply because "a majority  interest in the carrier ... [was] owned by [the] government"  of that country.  As we have seen, however, mere ownership  does not imply control of the sort that could render the  Government amenable to suit based upon the acts of the  corporation.


37
Also under the heading of financial involvement, the district  court found that Venezuela had "decided to inject funds into  CAVN as part of the restructuring plan" and that the FIV  had entered into the trust agreement with CAVN so that CAVN could "satisfy its debts and attain liquidity."  Far  from demonstrating that Venezuela and the FIV exercised  the type of control over CAVN that would justify attributing  the corporation's actions to them, the facts as found reflect  only a normal relationship between a sovereign and an instrumentality of the state.  Indeed in Bancec the Court noted  that a "typical government instrumentality" has primary responsibility for its own finances "[e]xcept for appropriations  to provide capital or to cover losses."  Bancec, 462 U.S. at  624.  In other words, the infusion of state capital to cover  CAVN's losses was a normal aspect of the relation between a  government and a government-owned corporation, not an  instance of "day-to-day" involvement in the affairs of the  corporation, and hence does not tend to justify stripping  Venezuela of its sovereign immunity.


38
The other findings marshaled by the district court as  evidence of the Government's involvement in CAVN's financial affairs similarly demonstrate only that Venezuela provided funds to CAVN in order to reorganize the ailing company  and to bail it out of debt.  Taken together, the district court's  findings do not show that Venezuela controlled CAVN in a  manner sufficient to forfeit its immunity under the FSIA.


39
The plaintiffs direct our attention to still other evidence in  the record that was not the subject of the district court's  findings--and all of which the defendants contest--that they  claim justifies attributing CAVN's actions to Venezuela.  We  will neither rehearse nor resolve these disputes here.  Viewing the disputed facts favorably to the plaintiffs, however, we  remain unconvinced that Venezuela exercised such control  over CAVN as to make the Government amenable to suit  based upon CAVN's actions under the principal and agent  exception announced in Bancec.


40
Our decision in McKesson, contrary to the plaintiffs' argument, does not indicate a different result.  McKesson involved a suit brought by American holders of a minority  interest in an Iranian dairy against the Government of Iran  and several instrumentalities thereof.  The shareholders alleged that Iran had acted through its instrumentalities unlawfully to divest them of their equity in the dairy.  See McKesson, 52 F.3d at 348.  We affirmed both the district court's  conclusion that the instrumentalities had acted as agents of  Iran in divesting the plaintiffs of their equity and its holding  that the acts of the instrumentalities were attributable to  Iran, which was not, therefore, immune from the suit under  the FSIA.  See id. at 352.


41
Although the district court had made extensive findings  detailing Iran's pervasive control over the instrumentalities,  we focused upon four facts.  First, the instrumentalities  owned a majority of the dairy's stock and controlled six of the  seven seats on its Board of Directors.  See id. at 351.   Second, the Government of Iran had issued anti-American  policy statements to the instrumentalities, which they reason- ably believed the Government wanted them to carry out in  their dealings with the dairy's American shareholders.  For  example, the Managing Director of one of the instrumentalities, who eventually chaired the dairy's Board of Directors,  stated that the dairy "was no longer a 'joint stock company'  whose primary fiduciary duty was to its stockholders" and  declared it the dairy's "main objective ... to protect the  interests of the country."  Id. at 351.  Third, Iran directly  controlled "[r]outine business decisions, such as declaring and  paying dividends to shareholders and honoring the dairy's  contractual commitments";  indeed, the dairy's Board of Directors had "deferred [their] decision to withhold dividends  from [one of the American shareholders]" until they had  received approval from "Iran's Cabinet Ministers (and officials answerable to them)."  Id. at 351-52.  Finally, we  emphasized that the dairy had not "simply carr[ied] out a  state commercial policy as a normal part of the corporation's  mission, without any state involvement" but instead had acted  to effectuate a governmental policy "designed to injure some  of the corporation's own shareholders ... through a corporate policy guided by government representatives."  Id. at  352.


42
Beyond the features inherent in a state-owned corporation,  namely the government's ownership of stock and control of  the Board of Directors, this case bears no resemblance to  McKesson.  Venezuela did not evince an intent to have CAVN act as its agent in dealing with the plaintiffs.  No one  at CAVN sought the Government's approval for routine business decisions.  In short, McKesson is to this case what the  Chicago Manual of Style was to e.e. cummings:  not controlling.


43
b. Apparent authority


44
The district court next considered whether Venezuela had  indicated to the plaintiffs that CAVN could act as its agent,  that is, whether Venezuela had apparently given CAVN authority to act for it.  Upon appeal the plaintiffs also pursue  this theory in support of the district court's holding.


45
In reaching the conclusion that CAVN had apparent authority to bind the Government, the court found that Vice  Admiral Efraim Diaz TarazOn of the Venezuelan Navy, who  also served for a time as President and Chairman of the  Board of CAVN, had assured one of the plaintiffs--while  wearing his naval uniform, no less--that "Venezuela would  support CAVN."  This finding, which is the only support for  the district court's conclusion that Venezuela had cloaked  CAVN with apparent authority, is insufficient to render the  State liable for the acts of the corporation.  Appointing  TarazOn as President of CAVN certainly cloaked him with  authority to bind CAVN, see Restatement (Second) of Agency § 27 cmt. d, above, but something more would be required  before a creditor of CAVN could reasonably infer that Tara- zOn was thereby authorized to bind the Government.  Tara- zOn's decision to dress as an Admiral when he met with one of  the lessors is just that--TarazOn's sartorial decision--not an  indication coming from the Government that it had authorized  him to commit government funds outside the normal channels  running through the Cabinet and the FIV.  In the absence of  any evidence of such an authorization from the Government,  we reject the plaintiffs' argument that CAVN had apparent  authority to bind Venezuela.

3.   The exception for fraud or injustice

46
We turn now to the exception for fraud or injustice recognized in Bancec.  462 U.S. at 629.  Althoughthe district court did not address it, the plaintiffs argue in passing that this  exception, too, applies to this case.  Their theory, in a nut- shell, is that the "[d]efendants' failure to adequately provide  CAVN with the financial resources and the basic tools necessary to run a commercial shipping line and to perform its  contracts with and commitments to" the plaintiffs "provides  an independent basis to attribute CAVN's commercial activities to the [d]efendants for FSIA purposes."  The plaintiffs  cite two cases for support, but neither is of any help to them.


47
In Anderson v. Abbott, 321 U.S. 349 (1944), the Supreme  Court dealt with a suit against some of the shareholders of a  bank holding company, 321 U.S. at 354, the only substantial  asset of which was stock in its subsidiary banks.  Id. at 358.   By statute, stock in the banks carried "double liability,"  meaning that both the banks and their shareholders were  liable to the depositors.  Id. at 358-59.  The Court held the  shareholders of the holding company liable for the depositors'  claims against the subsidiary banks because allowing the  holding company to insulate them "would allow stockholders  of banks to retain all of the benefits of ownership without the  double liability which Congress had prescribed."  Id. at 358.


48
Here, in contrast to Abbott, the sovereign shareholder of  CAVN did not use the corporation to defeat any statutory  policy of either Venezuela or the United States.  Nor was  CAVN, unlike the holding company in Abbott, thinly capital- ized from its inception--a fact relevant to the fraud or  injustice exception later given separate recognition in Bancec.   These two critical differences render Abbott inapplicable to  the case at bar.


49
In Hystro Products, Inc. v. MNP Corporation, 18 F.3d  1384 (7th Cir. 1994), the plaintiff brought suit under state law  against the parent of a corporation that had not paid it for  certain goods before ceasing operations.  See id. at 1386-87.   The jury, finding that the subsidiary was the "alter-ego" of  the parent, awarded damages to the plaintiff.  Id.  The court  of appeals affirmed on the grounds that a reasonable jury  could have concluded both that the parent and its subsidiary  had not maintained their "separate identities," see id. at 1390, and that the parent "allowed [its subsidiary] to continue to  place orders knowing that it would 'stiff' [the plaintiff] on the  final bill."  Id. at 1392.


50
Hystro Products is inapplicable to the present case for two  reasons.  First, while the parent in Hystro Products dominated its subsidiary, the plaintiffs here, as we have seen, have  not shown that Venezuela dominated CAVN.  Second, in  Hystro Products there was evidence that the parent had  planned for months to shut down its subsidiary and had  neither told the plaintiff of those plans nor otherwise indicated that the subsidiary was having financial difficulty.  The  jury therefore reasonably could have concluded that the  parent had used its subsidiary unjustly to obtain goods for  which it had no intention of paying.  Here, Venezuela did not  manipulate CAVN in order to obtain a financial benefit from  the plaintiffs before CAVN went bankrupt;  it simply failed in  the end to bail CAVN out.  The Government's extensive but  ultimately unsuccessful efforts to save CAVN from bankrupt- cy are a far cry from the fraud involved in Hystro Products.


51
We therefore hold that Venezuela is not amenable to suit  upon the first three counts of the plaintiffs' complaint under  the fraud or injustice exception.  Those counts are dismissed.

B.    Subject matter jurisdiction, Count IV

52
In the final count of the complaint the plaintiffs allege that  Venezuela caused CAVN to breach its contracts with them by  "failing to restore CAVN's accumulated deficits and by refusing to allow CAVN to fully perform its obligations under the  Equipment Lease Agreements and the restructuring and  repayment plans."  Venezuelacontends both that the FSIA  and the act of state doctrine protect it from suit upon this  count.  The district court did not address either assertion.


53
In light of our dismissal of the first three counts of the  complaint, and of the district court's failure to discuss the  final count, we leave to the district court in the first instance  the question whether Venezuela and the FIV are, by reason  of the FSIA, immune from suit upon the final count.  We do  not reach Venezuela's act of state defense because it is not properly subject to interlocutory appeal.  See Walter Fuller  Aircraft Sales, Inc. v. Republic of the Philippines, 965 F.2d  1375, 1387 (5th Cir. 1992).  The act of state doctrine is a  substantive rule of law that precludes the district court from  inquiring into the legality of a sovereign's public acts;  it is  not strictly an immunity from suit.  See id.


54
Although the plaintiffs have asked this court to exercise  pendent jurisdiction over the act of state issue, we decline to  do so.  We exercise such jurisdiction "sparingly" and not so  as to "reach[ ] an issue that might be mooted or altered by  subsequent district court proceedings."  Gilda Marx, Inc. v.  Wildwood Exercise, Inc., 85 F.3d 675, 678, 679 (D.C. Cir.  1996).  Because the district court is yet to determine whether  Venezuela is immune from suit upon count four pursuant to  the FSIA, we will not rush in to resolve the act of state issue  at this juncture.

III. Conclusion

55
For the forgoing reasons, the first three counts of the  complaint are dismissed.  We remand this matter to the  district court to consider whether the defendants are immune  under the FSIA from suit upon the fourth count of the  complaint, and if not, then to take up Venezuela's act of state  defense.


56
It is so ordered.



Notes:


*
 Circuit Judge Garland did not participate in this matter.


