                  UNITED STATES DISTRICT COURT
                  FOR THE DISTRICT OF COLUMBIA


INVERSORA MURTEN, S.A.,         )
                                )
          Plaintiff,            )
                                )
          v.                    ) Misc. Action No. 03-73 (RWR)(JMF)
                                )
ENERGOPROJEKT HOLDING CO.,      )
                                )
          Defendant.            )
                                )

                          MEMORANDUM OPINION

     Inversora Murten, S.A. (“Inversora”) filed a writ of

attachment against an intended garnishee, the Japan Bank for

International Cooperation (“JBIC”).    Magistrate Judge John M.

Facciola has recommended that Inversora’s writ of attachment be

quashed for lack of subject matter jurisdiction because JBIC and

its successor organizations - - the Japan Finance Corporation

(“JFC”) and the Japan International Cooperation Agency (“JICA”)

- - enjoy sovereign immunity under the Foreign Sovereign Immunity

Act (“FSIA”), 28 U.S.C. §§ 1604, 1611.    Inversora has submitted

objections to the report and recommendation.    Because the

magistrate judge’s recommendation is fully supported in law and

Inversora’s objections are without merit, the recommendation will

be adopted and Inversora’s writ of attachment will be quashed.
                                 -2-

                              BACKGROUND

     The history and background of this case and the underlying

motions are discussed in Inversora Murten, S.A. v.

Energoprojekt-Niskogradnja Co., 264 Fed. Appx. 13, 14 (D.C. Cir.

2008), and Magistrate Judge Facciola’s report and recommendation

of April 8, 2009 (“Report and Recommendation”), Docket Entry 63,

at 1-3.    Briefly, Inversora obtained a default judgment for

roughly $39 million in the U.S. District Court for the District

of New Jersey against Energoprojekt Holding Company

(“Energoprojekt”).    In September, 2005, Inversora obtained from

this court against JBIC a form writ of attachment bearing two

pre-printed interrogatories with spaces after them for JBIC’s

answers.    That month, JBIC filed verified answers to the

interrogatories.    Interrogatory 1 asked, “[w]ere you at the time

of the service of the writ of attachment, or have you been

between the time of such service and the filing of your answers

to this interrogatory, indebted to the defendant(s), and, if so,

how, and in what amount?”    JBIC answered, “[w]ithout waiving any

defense based on a lack of personal jurisdiction, [JBIC] states

that, at the time of service of the writ of attachment and

between that time and service of this answer, JBIC was not

indebted to the defendant.”    (See Verified Answers of JBIC

(“JBIC’s Answers”) at 2.)    Interrogatory 2 asked, “[h]ad you at

the time of the service of the writ of attachment, or have you
                                 -3-

had between the time of such service and the filing of your

answer to this interrogatory, any goods, chattels, or credits of

the defendant(s) in your possession or charge, and if so, what?”

JBIC’s answer stated, “[w]ithout waiving any defense based on a

lack of personal jurisdiction, JBIC states that, at the time of

the service of the writ of attachment and between that time and

service of this answer, JBIC did not possess or have in its

charge any goods, chattels, or credits of defendant [sic].”

(Id.)   Later, in November 2005, JBIC issued a letter to

Inversora’s counsel stating that it believed that Inversora’s

writ of garnishment was “without any force or effect” because,

among other things, “JBIC is immune under” the FSIA.   (See JFC’s

Resp. to Pl.’s Objns., Ex. 1 (“November 9, 2005 Ltr.”) at 2-3.)

     In December 2008, JBIC notified the court that it had been

restructured into two entities - - JFC and JICA.   Shortly

thereafter, Inversora moved for an order requiring JFC and JICA

to appear at a hearing to allow Inversora and the magistrate

judge to question JFC and JICA under oath in order to determine

whether they held any property or credits that belonged to

Energoprojekt.   The magistrate judge granted Inversora’s motion

and scheduled the hearing.   (See Order of January 29, 2009,

Docket Entry 51, at 1.)

     Instead of appearing at the hearing, JFC and JICA filed

notices of sovereign immunity.   In its notice of sovereign
                                 -4-

immunity, JFC stated that it is not a “privatized public

corporation,” but instead is a “public corporation wholly owned

by the Japanese government and established by legislative

enactment of the Japanese Diet,” which “assumed the

responsibility for the former JBIC’s international financial

operations[.]”    (See Notice of Sovereign Immunity by JFC (“JFC’s

Notice”) at 1-2.)   Similarly, in its notice of sovereign

immunity, JICA stated that it is an “official agency of the

Government of Japan, established by legislative enactment of the

Japanese Diet.”   (See Notice of Sovereign Immunity by JICA

(“JICA’s Notice”) at 1.)

     Inversora responded that its writ of attachment should not

be quashed and that the garnishment proceeding should occur

because JBIC, the predecessor to JFC and JICA, implicitly waived

the defense of sovereign immunity by answering the

interrogatories that accompanied the writ of attachment with a

filing that did not contain the defense of sovereign immunity or

lack of subject matter jurisdiction.   (See Resp. of Inversora to

JFC’s Notice at 2-3; Resp. of Inversora to JICA’s Notice

(“Inversora’s Resp. to JICA”) at 3-4.)   Inversora asserted that

JBIC’s answers to the interrogatories constituted a responsive

pleading, and that once JBIC waived the defense of sovereign

immunity by failing to include it in the responsive pleading,

neither JBIC nor its successor organizations could reassert the
                                 -5-

argument.   (See Inversora’s Resp. to JICA at 5-7.)   However,

Inversora did not dispute the assertion that the JBIC, JFC, and

JICA qualified as agencies or instrumentalities under the FSIA.

     The magistrate judge’s report and recommendation first

determined that based upon the assertions that they made in their

notices of sovereign immunity, both JFC and JICA qualified for

sovereign immunity as instrumentalities of a foreign state under

28 U.S.C. § 1603(b) because both entities were successors in

interest to JBIC and because Peterson v. Islamic Republic of

Iran, 563 F. Supp. 2d 268, 273 (D.D.C. 2008), held that “JBIC is

an ‘agency or instrumentality of a foreign state as defined under

28 U.S.C. § 1603(b).’”   See Report and Recommendation at 4-6.

Next, the report and recommendation determined that JBIC did not

waive the defense of sovereign immunity because an answer to

interrogatories served with a writ of garnishment is not

identified as a responsive pleading under Federal Rule of Civil

Procedure 7(a), and because JBIC’s response to Inversora’s

interrogatories “can be interpreted as neither asserting nor

waiving immunity.”   Report and Recommendation at 7-8.   Finally,

the report recommended quashing Inversora’s writ of attachment

against JFC and JICA because JFC and JICA were immune from suit

under the FSIA.   Id. at 9.   Inversora objected, insisting that

the interrogatory answers bearing no assertion of sovereign
                                 -6-

immunity constituted a responsive pleading that waived the

defense.

                              DISCUSSION

     The magistrate judge’s report and recommendation is reviewed

de novo.   LCvR 72.3(c); see also Fed. R. Civ. P. 72; Ames v.

Yellow Cab of D.C., Inc., Civ. Action No. 00-3116 (RWR), 2006 WL

2711546, at *4 (D.D.C. September 21, 2006).

     “The FSIA provides the exclusive basis for a court’s

jurisdiction over a foreign state.”    Intelsat Global Sales &

Mktg. v. Cmty. of Yugoslav Posts Telegraphs & Telephones, 534 F.

Supp. 2d 32, 34 (D.D.C. 2008).    “Under the FSIA, a court may

entertain jurisdiction over a civil complaint directed against a

foreign sovereign ‘only if the foreign state lacks immunity under

the Act’s prescriptions[.]’”    Doe v. Bin Laden, 580 F. Supp. 2d

93, 96 (D.D.C. 2008) (quoting Practical Concepts, Inc. v.

Republic of Bolivia, 811 F.2d 1543, 1544 (D.C. Cir. 1987) and 28

U.S.C. § 1604).   An agency or instrumentality of a foreign state

is treated as a foreign state under the FSIA, 28 U.S.C.

§ 1603(a), and thus is “immune from the jurisdiction of the

courts of the United States.”    Peterson, 563 F. Supp. 2d at 273

(quoting 28 U.S.C. § 1604).    Under the FSIA, an agency or

instrumentality of a foreign state is an entity that is (1) “a

separate legal person, corporate or otherwise”; (2) “an organ of

a foreign state”; and (3) “neither a citizen of a State of the
                                   -7-

United States . . . nor created under the laws of any third

country.”   28 U.S.C. § 1603(b).    When a defendant qualifies for

sovereign immunity, “the federal courts lack subject matter

jurisdiction” over proceedings against that defendant, and

therefore “must dismiss the case” against the immune defendant.

Auster v. Ghana Airways, Ltd., 514 F.3d 44, 48 (D.C. Cir. 2008).

However, an agency or instrumentality of a state that would

otherwise be immune under the FSIA may waive its immunity,

“either explicitly or by implication.”    See 28 U.S.C.

§ 1605(a)(1); Gutch v. Fed. Republic of Germany, 255 Fed. Appx.

524, 525 (D.C. Cir. 2007).    While the FSIA lacks a definition of

an implied waiver, the D.C. Circuit has held that there are three

situations where a foreign state or an agency or instrumentality

of a foreign state implicitly waives the defense of sovereign

immunity: “where a foreign state has filed a responsive pleading

without raising the defense of sovereign immunity”; where a

foreign state agrees to participate in arbitration in another

country; and where a foreign state agrees in a contract that the

laws of another country will govern that contract.    See World

Wide Minerals, LTD. v. Republic of Kazakhstan, 296 F.3d 1154,

1161 n.11 (D.C. Cir. 2002).   However, the D.C. Circuit construes

the implied waiver provision narrowly.    Id. (citing Creighton

Ltd. v. Government of the State of Qatar, 181 F.3d 118, 122 (D.C.

Cir. 1999) (“[I]mplicit in [the concept of implied waiver] is the
                                -8-

requirement that the foreign state have intended to waive its

sovereign immunity.”); see also Doe v. State of Israel, 400 F.

Supp. 2d 86, 105 (D.D.C. 2005) (stating that implicit waiver

requires that a foreign sovereign “subjectively intend” to waive

the defense of sovereign immunity).   Furthermore, in general,

participation in discovery will not be the basis for an implied

waiver of sovereign immunity.   See Rodriguez v. Transnave Inc.,

8 F.3d 284, 289 (5th Cir. 1993) (citing federal cases for the

proposition that “federal courts have been reluctant to find a

waiver from the nature of a foreign state’s participation in

litigation”).

     Inversora does not object to the report and recommendation’s

determination that JFC and JICA are successors in interest to

JBIC, or the determination that all three entities qualify for

sovereign immunity under the FSIA as agencies or

instrumentalities of a foreign state.   Instead, Inversora objects

to only the report and recommendation’s determination that

because JBIC’s filing was not a responsive pleading under Rule

7(a), JBIC did not waive its sovereign immunity by filing answers

to the interrogatories that did not assert the sovereign immunity

defense.

     Inversora has not presented any authority showing that this

court or any other court has held that a party’s answers to

interrogatories, whether in a normal civil action or in a
                                -9-

garnishment proceeding, have been deemed a responsive pleading.

Rule 7(a) states that the only filings that are considered

pleadings are a complaint, an answer to a complaint, an answer to

a counterclaim designated as a counterclaim, an answer to a

crossclaim, a third-party complaint, an answer to a third-party

complaint, and a reply to an answer.   Fed. R. Civ. P. 7(a); see

also Adkins v. Safeway, Inc., 985 F.2d 1101, 1102 (D.C. Cir.

1993) (identifying complaints, answers, replies to counterclaims,

third-party complaints and third-party answers as pleadings).

While Inversora argues that the opinion in Pinkston v. Briley,

129 A.2d 185, 188 (D.C. 1957) deemed a party’s answer to

interrogatories served with a writ of garnishment an “answer,”

that opinion did not find that a party’s answer to

interrogatories was a responsive pleading, or that a party would

waive a defense by failing to assert it in that answer.     In light

of the D.C. Circuit’s practice of construing the implied waiver

provision in the FSIA narrowly, JBIC’s answers to the

interrogatories are more akin to discovery responses than a

responsive pleading that consciously demonstrated JBIC’s

subjective intent to waive sovereign immunity and participate in

this litigation.   JBIC stated at the beginning of its answers

that it did not waive any defenses based upon personal

jurisdiction.   Moreover, shortly after JBIC answered the

interrogatories, JBIC informed Inversora by letter that it was
                                   -10-

immune from these proceedings under the FSIA.      Inversora was

aware for more than three years before seeking to compel JBIC’s

successors to attend a hearing that JBIC believed that it was

immune from these proceedings under the FSIA, and that JBIC

intended to retain some form of defense for lack of jurisdiction

even after answering the interrogatories that accompanied the

writ.       This is not a case where JBIC strung Inversora along for

years by a clear and early demonstration that it intended to

engage in these proceedings only to switch defenses mid-stream by

filing a surprise claim of sovereign immunity.1


        1
       JFC and JICA also request fees and costs from Inversora
under D.C. Code § 16-522 (which states that “[i]f any garnishee
answers to interrogatories that he does not have property or
credits of the defendant, . . . the issue thereby made may be
tried. . . . In such a case, where judgment is rendered for the
garnishee, the plaintiff shall be adjudged to pay to the
garnishee, in addition to the taxed costs, a reasonable
attorney’s fee”), and 28 U.S.C. § 1927 (stating that “[a]ny
attorney . . . who so multiplies the proceedings in any case
unreasonably and vexatiously may be required by the court to
satisfy personally the excess costs, expenses, and attorneys'
fees reasonably incurred because of such conduct”). As an
initial matter, § 16-522 does not apply to this case because the
issue of JFC’s and JICA’s liability to Inversora was not “tried.”
As for § 1927, a court is allowed to impose sanctions under that
provision when a lawyer’s conduct transcends mere negligence and
carelessness, and instead is reckless under the circumstances of
the case. United States v. Wallace, 964 F.2d 1214, 1219 (D.C.
Cir. 1992). “The decision to award attorney’s fees under
[§ 1927] is committed to this Court's discretion.” Newborn v.
Yahoo! Inc., 437 F. Supp. 2d 1, 9 (D.D.C. 2006). The party
moving for sanctions and fees bears the burden of showing that
opposing counsel acted at least recklessly. Healey v. Labgold,
231 F. Supp. 2d 64, 68 (D.D.C. 2002). Here, JFC and JICA offer
no legal analysis in support of their request, and do not carry
their burden of demonstrating the requisite level of culpability
to justify an award of fees and costs. See Newborn 437 F. Supp.
                                -11-

                             CONCLUSION

     Inversora has not demonstrated that the magistrate judge

erred by determining that JFC and JICA are immune from this

proceeding under the FSIA.   Accordingly, because JFC and JICA

enjoy immunity from these attachment proceedings, Inversora’s

objections to Magistrate Judge Facciola’s recommendation will be

overruled, and Inversora’s writ of attachment will be quashed.

An appropriate order accompanies this memorandum opinion.

     SIGNED this 3rd day of December, 2009.


                                              /s/
                                       RICHARD W. ROBERTS
                                       United States District Judge




2d at 10 (declining to impose sanctions where defendant failed to
show that plaintiff’s attorney filed a non-meritorious motion
deliberately); Wallace, 964 F.2d at 1218-19 (reversing a district
court’s imposition of costs and fees under § 1927 where there was
no showing that the defendant’s attorney deliberately delayed a
trial); FDIC v. Bank of New York, 479 F. Supp. 2d 1, 22 (D.D.C.
2007) (while attorney’s conduct was questionable, the court did
not have clear and convincing evidence that the attorney intended
to be vexatious or dilatory).
