Graybar Elec Co Inc v. China Natl Offshr

* District Judge of the Western District of Texas, sitting
by designation.
** Pursuant to 5TH CIR. R. 47.5, the Court has determined that
this opinion should not be published and is not precedent except
under the limited circumstances set forth in 5TH CIR. R. 47.5.4.
United States Court of Appeals
Fifth Circuit
F I L E D
May 29, 2003
Charles R. Fulbruge III
Clerk
UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
No. 02-20882
GRAYBAR ELECTRIC COMPANY, INC.,
Plaintiff-Appellant,
versus
CHINA NATIONAL OFFSHORE OIL CORPORATION,
Defendant-Appellee.
Appeal from the United States District Court
for the Southern District of Texas
(H-02-CV-100)
Before WIENER and BARKSDALE, Circuit Judges, and FERGUSON, District
Judge*.
PER CURIAM:**
The district court held China National Offshore Oil
Corporation (CNOOC) entitled to immunity under the Foreign
Sovereign Immunity Act (FSIA), 28 U.S.C. § 1602, et seq. Graybar
claims: CNOOC waived its right to claim immunity; alternatively,
under 28 U.S.C. § 1605(a)(2), this action falls within an exception
to immunity.

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Having heard oral argument, and based upon our review of the
briefs and pertinent parts of the record, we hold: CNOOC did not
waive its right to assert immunity, because, inter alia, in its
answer it claimed lack of subject matter jurisdiction; and this
action does not fall within § 1605(a)(2).
In holding CNOOC entitled to immunity, the district court
reasoned that the third clause of § 1605(a)(2) (immunity exception
“in which the action is based 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”) required the requisite act be non-commercial.
It is not necessary to decide this issue because, for this action,
the exception does not apply whether the requisite act is
commercial or non-commercial. On the other hand, the § 1605(a)(2)
third clause exception has apparently been applied to commercial
acts. See, e.g., Republic of Arentina v. Weltover, 504 U.S. 607
(1992) (third clause applied to extension of payment schedules for
bonds); Byrd v. Corporacion Forestal y Industrial de Olancho S.A.,
182 F.3d 380, 389 (5th Cir. 1999) (paraphrasing third clause as “a
commercial activity carried on outside the United States that has
a direct effect in the United States”); Voest-Alpine Trading USA
Corp. v. Bank of China, 142 F.3d 887 (5th Cir. 1998) (third clause

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applied to failure of foreign bank to remit funds to designated
American corporation).
AFFIRMED

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