Ninth Circuit Panel Splits on Appellate Jurisdiction over Denial of FSIA Immunity Claimed via Res Judicata

The Ninth Circuit tackles a question of appellate jurisdiction in Gupta v. Thai Airways International, case no. 04-56389 (May 30, 2007).  The riddle — which the majority overlooks until it responds to the dissent — arises from the intersection of res judicata and the “collateral order” exception to the final judgment rule.

Thai Airways contended in its motion to dismiss for lack of subject matter jurisdiction in the district court that it was immune from suit under the Foreign Sovereign Immunities Act (the airline is 76% owned by the Thai government) .  The airline contended that an identical state court action brought by Gupta was res judicata on this issue because it was dismissed for lack of subject matter jurisdiction on FSIA immunity grounds.  It also argued the merits of FSIA immunity independently of its res judicata argument.  The district court rejected both arguments, finding that the prior ruling was not res judicata because it did not go to the merits of the dispute and that an exception to the FSIA applied.

On appeal, however, the airline did not assert the district court erred in its determination that an exception to the FSIA applied.  It relied exclusively on its res judicata argument. 

This turns out to be what splits the dissent from the majority on appeal.

The Ninth Circuit (and its sister circuits) have long recognized the appealability of an order denying a motion to dismiss based on FSIA immunity.  The majority classifies this as such an appeal, and thus asserts jurisdiction under this well-established exception to the final judgment rule.

The issue becomes thornier when you read the dissent, in which Judge Tashima argues that the court must examine “each claim or issue presented separately to determine their jurisdiction on interlocutory appeal.”  Conceding that he would find jurisdiction over the issue of whether the district court erred in finding that the FSIA exception applied, Judge Tashima contends that the res judicata issue is sufficiently distinct to take it outside the rule allowing review of orders denying FSIA immunity:

While it is true that our case law permits an immediate interlocutory appeal from an order denying a motion to dismiss based on foreign sovereign immunity, it is equally well-settled that the denial of a motion to dismiss based on res judicata grounds is not immediately appealable.


Although the cases discussing the collateral order doctrine sometimes loosely refer to interlocutory orders as being appealable, in fact, the cases actually analyze the specific claim or issue presented in determining the scope of their jurisdiction on an interlocutory appeal. And each claim presented must independently meet the requirements of the collateral order doctrine in order for it to be considered on interlocutory appeal. Appellate jurisdiction over one claim rejected in a district court order does not confer jurisdiction over all other claims rejected in the same order.(Citations omitted, emphasis in original.)

It seems clear that had the airline appealed on both grounds, Judge Tashima would assert jurisdiction over the merits of the FSIA immunity claim but not over the res judicata argument for the same claim of immunity. 

This is too much hair-splitting for the majority, which responds in a footnote to its statement that “It is from this order that Thai Airways is appealing.”  (Emphasis in original.) The majority contends that the dissent relies on a false premise that the FSIA immunity issue and res judicata issues are distinct.  It says that since the res judicata issue involves and is based solely on FSIA immunity, and is indeed determinative on the issue, the appeal falls within the rule of appealability under the collateral order doctrine for orders denying FSIA immunity.

Whatever the asserted ground of error, the majority has a point that in the end, the order appealed from determined that there was no FSIA immunity.  And that is all they needed to bring it within the well-established exception to the final judgment rule.