557 F.3d 1066 (2009)

John V. DOE, Plaintiff-Appellee,
v.
Holy SEE, Defendant-Appellant.
John V. Doe, Plaintiff-Appellant,
v.
Holy See, Defendant-Appellee.

Nos. 06-35563, 06-35587.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted March 5, 2008. Filed March 3, 2009.

*1068 Jeffrey S. Lena, Law Office of Jeffrey S. Lena, Berkeley, CA, for the defendant-appellant-cross-appellee.

Marci A. Hamilton, Washington Crossing, PA, for the plaintiff-appellee-cross-appellant.

Before: FERDINAND F. FERNANDEZ and MARSHA S. BERZON, Circuit Judges, and OTIS D. WRIGHT, II^[*], District Judge.

*1069 PER CURIAM:

We consider whether, on the allegations made in the Plaintiff's complaint in this case, the Holy See is entitled to immunity from suit under the Foreign Sovereign Immunities Act ("FSIA"), 28 U.S.C. §§ 1330, 1602-1611.

John V. Doe brought suit in the United States District Court for the District of Oregon against the Holy See, the Archdiocese of Portland, Oregon ("Archdiocese"), the Catholic Bishop of Chicago ("Chicago Bishop"), and the Order of the Friar Servants ("Order"), alleging that when he was fifteen or sixteen years old he was sexually abused by Father Ronan, a priest in the Archdiocese and a member of the Order. Doe alleged various causes of action against the Holy See: (1) for vicarious liability based on the actions of the Holy See's instrumentalities, the Archdiocese, the Chicago Bishop, and the Order; (2) for respondeat superior liability based on the actions of the Holy See's employee, Ronan; and (3) for direct liability for the Holy See's own negligent retention and supervision of Ronan and its negligent failure to warn Doe of Ronan's dangerous proclivities. The Holy See contended in the district court that all of Doe's causes of action against it must be dismissed because, as a foreign sovereign, it is immune from suit in U.S. courts. The district court disagreed, holding that it has jurisdiction over all but one of Doe's claims under the FSIA's tortious act exception to sovereign immunity. The Holy See appeals.

For the reasons explained below, we affirm the district court in part and reverse in part as to the Holy See's appeal. As to the Holy See's vicarious liability for the acts of the Archdiocese, the Chicago Bishop, and the Order, we conclude that Doe has not alleged facts sufficient to overcome the presumption of separate juridical status for governmental instrumentalities, so the negligent acts of those entities cannot be attributed to the Holy See for jurisdictional purposes. Doe's vicarious liability claims therefore cannot go forward as pleaded. As to the Holy See's respondeat superior liability for Ronan's acts, we conclude that, because Doe has sufficiently alleged that Ronan was an employee of the Holy See acting within the "scope of his employment" under Oregon law, Ronan's acts can be attributed to the Holy See for jurisdictional purposes. Further, we agree with the district court that Ronan's acts come within the FSIA's tortious act exception, so the Holy See is not immune from suit for the respondeat superior cause of action. Although the district court held that Doe's negligence claims against the Holy See could proceed under the FSIA's tortious act exception, we conclude that they cannot, because the FSIA preserves immunity for discretionary acts. However, we do not have jurisdiction to consider the cross-appeal as to the commercial activity exception at this time. The decision of the district court on the appeal by the Holy See is therefore affirmed in part, reversed in part, and remanded for further proceedings not inconsistent with this opinion. We dismiss the cross-appeal.

I. PROCEDURAL BACKGROUND

A. Complaint

In his amended complaint, filed April 1, 2004, Doe describes as follows Father Andrew Ronan's alleged sexual abuse of young boys: In 1955 or 1956, while employed as a parish priest in the Archdiocese of Armagh, Ireland, Father Ronan molested a minor and admitted to doing so. Ronan was later removed from Our Lady of Benburb and placed in the employ of the Chicago Bishop, at St. Philip's High School. At St. Philip's, Ronan molested at least three male students. Confronted with allegations of abuse, Ronan admitted to *1070 molesting the boys. The Chicago Bishop, "acting in accordance with the policies, practices, and procedures" of the Holy See, did not discipline or remove Ronan from his post.^[1]

In approximately 1965, when Doe was 15 or 16 years old, the Holy See and the Order of the Friar Servants, of which Ronan was a member, "placed" Ronan in a parish priest position at St. Albert's Church in Portland, Oregon. Doe met Ronan at St. Albert's and came to know Ronan "as his priest, counselor and spiritual adviser." Doe was a devout Roman Catholic, and for him "Ronan was a person of great influence and persuasion as a holy man and authority figure." Using his position of trust and authority, Ronan "engaged in harmful sexual contact upon" Doe on repeated occasions. The sexual contact occurred "in several places including the monastery and surrounding areas."

Based on these facts, Doe alleged causes of action against the Holy See, its "instrumentalities or agents" ("Does 1-10"), the Archdiocese, the Chicago Bishop, and the Order, all of whom it alleged were employers of Ronan. According to the amended complaint:

Defendant Holy See is the ecclesiastical, governmental, and administrative capital of the Roman Catholic Church. Defendant Holy See is the composite of the authority, jurisdiction, and sovereignty vested in the Pope and his delegated advisors to direct the world-wide Roman Catholic Church. Defendant Holy See has unqualified power over the Catholic Church including each and every individual and section of the [C]hurch. Defendant Holy See directs, supervises, supports, promotes[,] and engages in providing religious and pastoral guidance, education[,] and counseling services to Roman Catholics worldwide in exchange for all or a portion of the revenues derived from its members for these services. The Holy See engages in these activities through its agents, cardinals, bishops[,] and clergy, including religious order priests, brothers[,] and sisters, who engage in pastoral work under the authority of its bishop[s]. The Holy See is supported through the contributions of the faithful[,] which are received through donations from the dioceses around the world, including those in the United States. Defendant Holy See promotes and safeguards the morals and standards of conduct of the clergy of the [C]atholic [C]hurch. Defendant Holy See does this by and through its agents and instrumentalities, including the Congregation for the Clergy and the Congregation for Religious both delegated by the Pope and acting on his behalf. It creates, divides[,] and re-aligns dioceses, archdioceses[,] and ecclesiastical provinces. It also gives final approval to the creation, division[,] or suppression of provinces of religious orders.... It creates, appoints, assigns and re-assigns bishops [and] superiors of religious orders, and through the bishops and superiors of religious orders [it] has the power to directly assign and remove individual clergy. All bishops, clergy, and priests, including religious order priests, vow to show respect and obedience to the Pope and their bishop. Defendant Holy See also examines and is responsible for the work and discipline and all those things which concern bishops, superiors of religious orders, priests[,] and deacons of the religious clergy. In furtherance of this duty, Defendant Holy See requires *1071 bishops to file a report, on a regular basis, outlining the status of, and any problems with, clergy. Defendant Holy See promulgates and enforces the laws and regulations regarding the education, training[,] and standards of conduct and discipline for its members and those who serve in the governmental, administrative, judicial, educational[,] and pastoral workings of the Catholic [C]hurch world-wide. Defendant Holy See is also directly responsible for removing superiors of religious orders, bishops, archbishops[,] and cardinals from service and/or making them ineligible for positions of leadership in the various divisions and offices of the Catholic [C]hurch.

The Archdiocese, according to the amendment complaint, is a corporation incorporated under the laws of the state of Oregon and is therefore a citizen of that state. It "provided pastoral services to [Doe] and his immediate family through its parishes." The Chicago Bishop is incorporated under the laws of the state of Illinois and is a citizen of that state. Finally, the Order is "a citizen of the state of Illinois," but it operates worldwide. It is under the "ultimate authority of" the Holy See.

Doe alleged that the Archdiocese and the Order were vicariously liable for Ronan's abuse of Doe, and that the Chicago Bishop and the Order were negligent in failing to warn the Archdiocese and Doe of Ronan's propensities. Doe also alleged that the Holy See was vicariously liable for Ronan's abuse of Doe and for the negligent actions of the Archdiocese, the Order, and the Chicago Bishop, and that the Holy See was itself negligent in its retention and supervision of Ronan and in failing to warn of his propensities.

B. District Court Decision

The Holy See moved to dismiss the complaint in its entirety for lack of subject-matter jurisdiction, arguing that as a foreign sovereign, it is presumptively immune from suit under the FSIA, and that neither the "tortious act" exception to sovereign immunity, 28 U.S.C. § 1605(a)(5), nor the "commercial activity" exception to sovereign immunity, 28 U.S.C. § 1605(a)(2), applies. The district court held that the commercial activity exception does not apply to permit the exercise of jurisdiction over Doe's claims; the court did not view the Holy See's activities as commercial because "the true essence of the complaint... clearly sound[s] in tort." Doe v. Holy See, 434 F.Supp.2d 925, 942 (D.Or.2006). In contrast, the district court held that the tortious act exception does apply, permitting it to exercise jurisdiction over all Doe's claims except for the fraud claim. Id. at 957. The district court therefore granted the Holy See's motion to dismiss as to the fraud claim, but it denied the motion as to all of Doe's other claims.

The Holy See appeals the district court's decision that the tortious act exception applies. Doe cross-appeals the district court's dismissal of his fraud claim, contending that the commercial activity exception permits federal court jurisdiction over that cause of action.

II. STATUTORY FRAMEWORK

For much of our nation's history, from at least 1812 until 1952, "the United States generally granted foreign sovereigns complete immunity from suit in the courts of this country." Verlinden B.V. v. Cent. Bank of Nigeria, 461 U.S. 480, 486, 103 S.Ct. 1962, 76 L.Ed.2d 81 (1983) (citing The Schooner Exchange v. M'Faddon, 7 Cranch 116, 3 L.Ed. 287 (1812)). In 1952, however, the State Department adopted a more "restrictive" theory of foreign sovereign immunity, under which sovereign "immunity is confined to suits involving the foreign sovereign's public acts." Id. at 487, 103 S.Ct. 1962. Applying this restrictive *1072 approach, questions of foreign sovereign immunity arising in U.S. courts were decided on a case-by-case basis, often with the assistance of letters from the State Department containing "suggestions of immunity." Id.

In 1976, to "clarify the governing standards" and to insulate the issue of sovereign immunity from the impact of "case-by-case diplomatic pressures," Congress enacted the FSIA, 28 U.S.C. §§ 1330, 1602-1611. Verlinden, 461 U.S. at 488, 103 S.Ct. 1962. The FSIA contains "a comprehensive set of legal standards governing claims of immunity in every civil action against a foreign state or its political subdivisions, agencies, or instrumentalities." Id. at 488, 103 S.Ct. 1962. It is this set of legal standards with which we deal today.

Under the FSIA, a foreign state is "immune from the jurisdiction of the courts of the United States and of the States" unless one of the statute's enumerated exceptions applies. 28 U.S.C. § 1604. A foreign state "includes a political subdivision of a foreign state or an agency or instrumentality of a foreign state." Id. § 1603(a). An "agency or instrumentality of a foreign state" is defined in turn as any entity:

(1) which is a separate legal person, corporate or otherwise, and

(2) which is an organ of a foreign state or political subdivision thereof, ... and

(3) which is neither a citizen of a State of the United States ... nor created under the laws of any third country.

Id. § 1603(b).

Section 1605^[2] contains "[g]eneral exceptions to the jurisdictional immunity of a foreign state," providing in relevant part that:

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

. . .

(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;

. . .

(5) not otherwise encompassed in paragraph (2) above, in which money damages are sought against a foreign state for personal injury or death, or damage to or loss of property, occurring in the United States and caused by the tortious act of that foreign state or of any official or employee of that foreign state while acting within the scope of his office or employment; except this paragraph shall not apply to—

(A) any claim based upon the exercise or performance or the failure to exercise or perform a discretionary function regardless of whether the discretion be abused, or

(B) any claim arising out of malicious prosecution, abuse of process, libel, slander, misrepresentation, deceit, or interference with contract rights ...

The statute further defines the elements of the commercial activity exception: A "`commercial activity' means either a regular course of commercial conduct or a particular commercial transaction or act. *1073 The commercial character of an activity shall be determined by reference to the nature of the course of conduct or particular transaction or act, rather than by reference to its purpose." Id. § 1603(d). A "`commercial activity carried on in the United States by a foreign state' means commercial activity carried on by such state and having substantial contact with the United States." Id. § 1603(e).

The statute does not set out any substantive rules of liability, but instead provides that, "[a]s to any claim for relief with respect to which a foreign state is not entitled to immunity under" the statute, "the foreign state shall be liable in the same manner and to the same extent as a private individual under like circumstances." Id. § 1606.

III. ANALYSIS

A. Standard for Motions to Dismiss Based on Foreign Sovereign Immunity

The Holy See has brought a facial attack on the subject matter jurisdiction of the district court under Rule 12(b)(1). We therefore "assume [plaintiff's] [factual] allegations to be true and draw all reasonable inferences in his favor." Wolfe v. Strankman, 392 F.3d 358, 362 (9th Cir. 2004); see also McNatt v. Apfel, 201 F.3d 1084, 1087 (9th Cir.2000) (holding that we "favorably view[ ] the facts alleged to support jurisdiction"). We do not, however, accept the "truth of legal conclusions merely because they are cast in the form of factual allegations." Warren v. Fox Family Worldwide, Inc., 328 F.3d 1136, 1139 (9th Cir.2003) (emphasis added; internal quotations omitted) (quoting W. Mining Council v. Watt, 643 F.2d 618, 624 (9th Cir.1981)).

The Holy See suggests that when evaluating facial motions to dismiss based on foreign sovereign immunity, we must require a greater-than-usual level of detail in the pleadings, and may not construe factual allegations in favor of the plaintiff. Neither contention is correct. The cases on which the Holy See relies involve fact-based challenges to subject-matter jurisdiction. See, e.g., Robinson v. Gov't of Malaysia, 269 F.3d 133, 137-38, 146 (2d Cir.2001) (relying on testimony and affidavits from the parties in concluding that the "generic allegations" in the complaint were insufficient to establish subject matter jurisdiction under the FSIA). In such cases, "no presumptive truthfulness attaches to plaintiff's allegations, and the existence of disputed material facts will not preclude the trial court from evaluating for itself the merits of jurisdictional claims." Roberts v. Corrothers, 812 F.2d 1173, 1177 (9th Cir.1987).

Here, in contrast, the Holy See is contending that on the face of the complaint, we lack subject matter jurisdiction; it has introduced no evidence contesting any of the allegations. With regard to such a challenge, a motion to dismiss for lack of jurisdiction under the FSIA is no different from any other motion to dismiss on the pleadings for lack of jurisdiction, and we apply the same standards in evaluating its merit. See, e.g., Safe Air for Everyone v. Meyer, 373 F.3d 1035, 1039 (9th Cir.2004). As the D.C. Circuit explained in Rong v. Liaoning Province Gov't, 452 F.3d 883, 888 (D.C.Cir.2006), in the foreign sovereign immunity context, "[i]f the defendant challenges only the legal sufficiency of the plaintiff's jurisdictional allegations, then the district court should take the plaintiff's factual allegations as true and determine whether they bring the case within any of the exceptions to immunity invoked by the plaintiff."

Moreover, we have never held that anything other than our usual notice pleading standard applies to complaints that allege an exception to foreign sovereign *1074 immunity. Under notice pleading rules, we require only "a short and plain statement" of the grounds for jurisdiction and the claim for relief. Fed.R.Civ.P. 8(a)(1), (2); see also Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 1964-65, 167 L.Ed.2d 929 (2007). We do not impose a heightened pleading standard in the absence of "an explicit requirement in a statute or federal rule," Skaff v. Meridien North America Beverly Hills, LLC, 506 F.3d 832, 841 (9th Cir.2007); there is no such explicit requirement here applicable. In evaluating assertions of subject-matter jurisdiction based on an exception to foreign sovereign immunity, then, we apply the same notice pleading requirements we would apply to any other assertion of subject-matter jurisdiction and look only for a "short and plain statement" of the basis for jurisdiction.

B. Appellate Jurisdiction

1. Jurisdiction Over Appeal

A district court's denial of immunity to a foreign sovereign is an appealable order under the collateral order doctrine. See Schoenberg v. Exportadora de Sal, S.A., 930 F.2d 777, 779 (9th Cir.1991); see also In re Republic of the Phil., 309 F.3d 1143, 1148 (9th Cir.2002) (explaining that refusal to dismiss on grounds of sovereign immunity is within the collateral order doctrine because it "may result in the parties having to litigate claims over which the court lacks jurisdiction").

2. Jurisdiction over Cross-Appeal

Doe cross-appeals and argues that his claims come within the FSIA's commercial activity exception to sovereign immunity, § 1605(a)(2). The Holy See contends that we do not have jurisdiction over Doe's cross-appeal because it is not "inextricably intertwined" with the collaterally appealable issue of whether the Holy See is immune from suit. See Burlington N. & Santa Fe Ry. Co. v. Vaughn, 509 F.3d 1085, 1093-94 (9th Cir.2007) (in a case involving a collaterally appealable order, denying a tribe sovereign immunity, but holding that the court could not reach other issues raised on appeal because they were not "inextricably intertwined" with the collaterally appealable issue). According to the Holy See, we do not have jurisdiction to consider Doe's argument that his claims come within the commercial activity exception. We agree.

As a general rule, the collateral order doctrine permits appellate jurisdiction only over those decisions of a district court that "conclusively determine the disputed question, resolve an important issue completely separate from the merits of the action, and [are] effectively unreviewable on appeal from a final judgment." See In re Copley Press, Inc., 518 F.3d 1022, 1025 (9th Cir.2008) (quoting Coopers & Lybrand v. Livesay, 437 U.S. 463, 468, 98 S.Ct. 2454, 57 L.Ed.2d 351 (1978)). A decision denying immunity to a foreign sovereign meets those requirements. See Gupta v. Thai Airways Int'l, Ltd., 487 F.3d 759, 763-64 & n. 6 (9th Cir.2007). Additionally, permitting a trial to go forward against a foreign sovereign when there is a claim of sovereign immunity "imperil[s] a substantial public interest." See Will v. Hallock, 546 U.S. 345, 353, 126 S.Ct. 952, 163 L.Ed.2d 836 (2006) (explaining why decisions denying absolute, qualified, and Eleventh Amendment immunity come within the collaterally appealable order doctrine).

The collaterally appealable order doctrine does not automatically permit review of district court rulings contained in the same district court opinion as the appealable determination, if they do not themselves meet these requirements. See Abney v. United States, 431 U.S. 651, 663, 97 S.Ct. 2034, 52 L.Ed.2d 651 (1977) (after *1075 concluding that the collateral order doctrine applies to a decision denying a motion to dismiss on double jeopardy grounds, holding that "other claims presented to, and rejected by, the district court in passing on the ... motion to dismiss ... are appealable if, and only if, they too fall within[the] collateral-order exception to the final-judgment rule"); Burlington N., 509 F.3d at 1089, 1093-94 (refusing to exercise pendent appellate jurisdiction over an exhaustion issue decided in the same district court order as the collaterally appealable question); United States v. Yellow Freight Sys., Inc., 637 F.2d 1248, 1251 (9th Cir.1980) ("Inquiry into the immediate appealability of a particular pretrial order must focus upon each claim asserted."); but cf. Joseph v. Office of Consulate Gen. of Nig., 830 F.2d 1018, 1021 (9th Cir.1987) (assuming jurisdiction over cross-appeal in FSIA case, without explanation).

Here, the tort causes of action are not inextricably intertwined with Doe's other claims. Thus, that concept is not sufficient to allow Doe to appeal the district court's grant of immunity as far as that exception is concerned.^[3]

Nor do we agree that we ought to simply take up the commercial activity issue on the basis that it is no more than an alternate ground to uphold the district court. In fact, the need for review of immunity denials — avoiding the undermining of the purpose of the grant of immunity^[4] — has no weight where immunity has been granted. Were there any doubt about that, the sensitive nature of the issues dealing with sovereigns would convince us that it would generally be prudentially unsound to expand review into the area of immunity grants when an appeal is taken from a denial of immunity.

This case points up one of the perils of undertaking unnecessary review of grants of immunity. On this appeal we are presented with comparatively straightforward questions about the relationship between the Holy See and local priests under the tort exception. But the cross-appeal seeks to expand our inquiry into the arcane question of whether church functions are commercial activity because churches receive financial support from their parishioners, or otherwise. That is an issue that actually has nothing to do with the issues on interlocutory appeal.

To say it another way, it is well established that, although an interlocutory appeal can be taken whenever immunity (absolute or qualified) is denied to a person or entity claiming entitlement thereto, an expansion to other issues is not usually allowed. See Swint v. Chambers County Comm'n., 514 U.S. 35, 43-51, 115 S.Ct. *1076 1203, 131 L.Ed.2d 60 (1995); Cunningham v. Gates, 229 F.3d 1271, 1284-86 (9th Cir. 2000). We are asked to, in effect, change that rule so that whenever immunity is denied on one set of issues but granted on another set, a cross-appeal can be taken regarding the granted set. Surely that would be the ineluctable effect of Doe's request. One would not even need to show, by the way, a true interlocking of issues beyond the fact that both deal with immunity. One would only need to argue that the alternative set will support the denial of immunity on a wholly different basis. That approach would be followed even if the district court had expressly ruled to the contrary on the alternative set of issues.^[5] In other words, here we would be asked to take up the appeal from that grant and reverse the district court's determination; we would have to reach out and engage in a lengthy disquisition on the commercial activity exception to FSIA, which we neither must nor should do.

Thus, we will not consider issues regarding the district court's grant of immunity under the commercial exception to the FSIA.

C. Determining Which Acts May Be Attributed to the Holy See for Jurisdictional Purposes

Before turning to the question of which, if any, of the FSIA's exceptions to immunity apply, we must determine which of the acts alleged in the complaint may legitimately be attributed to the Holy See for purposes of establishing jurisdiction. Doe's complaint alleges tortious acts by the Archdiocese, the Order, and the Bishop, all alleged to be corporations created by the Holy See. The Holy See argues that we may not consider these alleged acts by the Archdiocese, the Order, and the Bishop when determining whether jurisdiction exists over the Holy See, because Doe has not alleged facts that would overcome the presumption of separate juridical status such that the acts of the latter could be attributed to the former.^[6] For the reasons explained below, given the allegations that Doe has pleaded, we agree with the Holy See. In addition, however, the complaint *1077 alleges a number of actions performed by the Holy See itself, such as "creat[ing]" dioceses and archdioceses, "giv[ing] final approval to the creation, division or suppression of provinces of religious orders," "employ[ing]" Ronan, and "plac[ing]" Ronan in the Archdiocese in Portland, Oregon. We conclude below that these acts do establish jurisdiction over the Holy See for the claims to which the acts are relevant.

1. Determining Whether an Agency Relationship Exists Between the Holy See and Its Domestic Corporations for Purposes of Establishing Jurisdiction over the Holy See

a. The Bancec standard

In arguing that the actions of the corporations are not attributable to Holy See for purposes of determining jurisdiction, the Holy See relies on First Nat. City Bank v. Banco Para el Comercio Exterior de Cuba ("Bancec"), 462 U.S. 611, 103 S.Ct. 2591, 77 L.Ed.2d 46 (1983). In Bancec, the Supreme Court considered whether an instrumentality created by a foreign state could be held liable for the actions of the foreign state itself, a question the reverse of ours. Bancec was "the Cuban Government's exclusive agent in foreign trade," and the "government supplied all of [Bancec]'s capital and owned all of its stock." Id. at 614, 103 S.Ct. 2591. Soon after Bancec sought to collect on a letter of credit that had been issued in its favor by Citibank, the Cuban government seized and nationalized all of Citibank's assets in Cuba. Id. So, when Bancec filed an action in U.S. federal court to recover on the letter of credit, Citibank counterclaimed, seeking a setoff for the value of its expropriated Cuban branches. Id. at 614-15, 103 S.Ct. 2591. In the meantime, Bancec was dissolved, and Bancec filed a stipulation "stating that ... its claim had been transferred to the Ministry of Foreign Trade" of Cuba. Id. at 615-16, 103 S.Ct. 2591.

Jurisdiction in Bancec existed under FSIA's counterclaim provision, 28 U.S.C. § 1607(c).^[7]Id. at 620-21, 103 S.Ct. 2591. Because jurisdiction was not at issue, the question for the Supreme Court was one of liability: whether Bancec could be held liable for the act of expropriation committed by the Cuban government. Id. at 617, 103 S.Ct. 2591.

The Supreme Court began by noting that, although Bancec was an "agency or instrumentality" of Cuba within the meaning of FSIA § 1603(b), this status was relevant only to jurisdiction; it did not control the question of Bancec's liability for Cuba's actions. The FSIA "was not intended to affect the substantive law determining the liability of a foreign state or instrumentality." Id. at 620, 103 S.Ct. 2591. Instead, liability was to be assessed according to corporate law principles "common to both international law and federal common law." Id. at 623, 103 S.Ct. 2591. Surveying international and federal law on the status of corporations, the Supreme Court recognized a presumption of "separate juridical [status]" for the instrumentalities of foreign states. Id. at 624, 624-28, 103 S.Ct. 2591.

That presumption can be overcome, the Court explained, in two instances: when "a corporate entity is so extensively controlled by its owner that a relationship of principal and agent is created," or when recognizing the separate status of a corporation *1078 "would work fraud or injustice." Id. at 629, 103 S.Ct. 2591. The Court then held the latter standard dispositive of Bancec's case: The Cuban government could not have sued in its own name in a U.S. court "without waiving its sovereign immunity and answering for [its] seizure of Citibank's assets." Id. at 633, 103 S.Ct. 2591. Instead, Cuba had transferred its assets to separate entities, and Bancec then sought to avoid liability for the seizure. "[T]he Cuban government ... [and] not any third parties that may have relied on Bancec's separate juridical identity" would be the real beneficiary if Bancec was not held liable for the Cuban government's actions. Id. at 631-32, 103 S.Ct. 2591. Given this circumstance, the Court concluded that to "adhere blindly to the corporate form" would work such an "injustice" that the presumption of separate juridical status had been overcome. Id. at 632, 103 S.Ct. 2591. Holding Bancec liable for the Cuban government's actions, the Court held that Citibank was entitled to offset the value of its seized assets from the amount it owed to Bancec. Id. at 634, 103 S.Ct. 2591.

The Supreme Court in Bancec did not have the opportunity to consider whether the actions of a corporation may be attributed to the sovereign — the reverse of the Bancec scenario — for purposes of determining whether jurisdiction over that sovereign exists. This Circuit has not previously addressed that question either.^[8] At least two other circuits, however, faced with such a scenario, have applied Bancec's substantive corporate law principles in determining whether jurisdiction exists under the FSIA.

In Transamerica Leasing v. La Republica de Venezuela, 200 F.3d 843 (D.C.Cir. 2000), a plaintiff sued Venezuela, alleging that Venezuela was liable for the commercial acts of a government instrumentality, CAVN. Id. at 846. To determine whether Venezuela was amenable to suit under the commercial activity exception, the court turned to the Bancec test and asked whether (1) Venezuela and CAVN had a principal-agent relationship, or (2) recognizing CAVN as a separate entity would work an injustice. Id. at 848. Although it acknowledged that "Bancec recognized these as exceptions to the rule that a foreign sovereign is not liable for the acts of an instrumentality of the state," the D.C. Circuit held that "they serve also as exceptions to the rule that a foreign sovereign is not amenable to suit based on the acts of such an instrumentality."