Bolivarian Republic of Venezuela, et al. v. OI European Group B.V., et al.

The Foreign Sovereign Immunities Act (FSIA), 28 U.S.C. 1330, 1602 et seq., provides that “foreign state[s]” and their instrumentalities are presumptively immune from suit and attachment. An instrumentality is presumptively independent from its parent government, and is independently entitled to FSIA immunity absent an alter-ego finding. The FSIA operates against the backdrop of the Executive Branch’s exclusive authority to determine whether “a particular regime is the effective government of a state.” Zivotofsky ex rel. Zivotofsky v. Kerry, 576 U.S. 1, 11 (2015). The United States has recognized the Guaidó government as Venezuela’s only legitimate government and derecognized the Maduro regime. The court below held that state oil company PDVSA is Venezuela’s alter ego, principally based on the Maduro regime’s actions after derecognition, and alternatively based on the Guaidó government’s ordinary oversight. As a result, billions of dollars in PDVSA’s shares of PDV Holding, the parent of CITGO, can be auctioned in a bankruptcy-style sale. The questions presented are:

1. Whether a court may assess the FSIA immunity of a “foreign state” and its instrumentalities from jurisdiction, and the immunity of their property from attachment, by relying on the actions of an illegitimate government that has been derecognized by the Executive Branch, where the Executive has chosen to recognize a different government of the state.

2. Whether a finding that a presumptively independent state instrumentality should be treated as the alter ego of the foreign state may be based on nothing more than the ordinary incidents of government supervision that are common to most state instrumentalities, rather than on extraordinary day-to-day control.