Foreign States, Personal Jurisdiction, and the FSIA
October 29, 2026
© Raimond Spekking /
A U.S. gas company has sued four Russian defendants in the Southern District of New York for seizing helium containers that the gas company had sent to Russia pursuant to a helium supply contract. One of the defendants, RusChemAlliance (RCA), moved to dismiss for lack of subject-matter jurisdiction. The case is unusual because the plaintiff is arguing that the defendant is a foreign state (which the defendant denies). In the typical case, the defendant is the one arguing that it is a foreign state because foreign states are presumptively entitled to immunity from suit under the Foreign Sovereign Immunities Act (FSIA).
The case, Linde Inc. v. RusChemAlliance, LLC, (Judge Andrew L. Carter) is briefly described below. I then offer some thoughts on why the plaintiff would argue that the defendant is a foreign state and question whether the court was right to conclude that the “direct effect” requirement of the commercial activity exception to the FSIA would be satisfied if the FSIA did apply.
Background
Linde Inc., a U.S. industrial gas company, sued RusChemAlliance (RCA) and three Gazprom entities for conversion, unjust enrichment, and fraudulent misrepresentations. Linde had shipped empty helium containers to Russia pursuant to a helium supply contract with Gazprom Export, but Gazprom Export never produced the promised helium and never returned the containers. Linde alleges that the containers are being held because of a different, unrelated dispute. In this other dispute, RCA had hired Linde affiliates to build gas plants in Russia. The affiliates suspended work in 2022 after the EU imposed sanctions on Russia following its invasion of Ukraine. RCA terminated the contracts, demanded repayment of advances, sued affiliates of Linde in a Russian court, and won a seizure order for the containers—even though Linde Inc. was not itself a party to the construction contracts.
The plaintiff alleges that RCA is a foreign state, but also that it is not entitled to immunity under the FSIA because the expropriation and commercial activity exceptions are applicable. RCA moved to dismiss for lack of subject-matter jurisdiction, arguing it is not a “foreign state” under the FSIA. If RCA is not a foreign state, the case cannot proceed under 28 U.S.C. § 1330(a), which confers subject-matter jurisdiction over claims against foreign states. RCA argued in the alternative that even if it is a foreign state, no exception to immunity applies under the FSIA, so that the case cannot go forward at all.
Is RCA a foreign state?
Judge Carter granted the motion to dismiss, holding that Linde failed to show that RCA is an “agency or instrumentality” of Russia. Under § 1603(b), an entity that qualifies as an agency or instrumentality is classified as a foreign state. Here, the requirements of § 1603(b) were not satisfied, so RCA is treated not as a foreign state but instead as a private party.
The court applied the five-factor Filler v. Hanvit Bank (2d Cir. 2005) test to conclude that RCA was not an organ of the Russian state. The first factor asks if RCA was created for a national purpose. The court concluded that it was because its creation ultimately served Russia’s goals of increasing gross domestic and regional product, fixed capital, and exports of non-resource non-energy goods. Second, the “supervision” factor asks whether Russia appoints the key officials at RCA and whether Russia regulates some of the activities that it can engage in. Plaintiffs had primarily alleged that RCA’s parent corporation, Gazprom PJSC, was totally controlled by Russia, and that RCA, as its subsidiary, was therefore also controlled and dominated by Russia. The court disagreed. It reasoned that indirect oversight was insufficient.
The third factor asks whether the foreign state requires the hiring of public employees and pays their salaries. Plaintiff made no allegations that the Russian Federation requires RCA to hire public employees or pays their employees’ salaries, so this factor cut against finding that RCA was an organ of the Russia Federation. The fourth factor asks whether the entity holds exclusive rights in the foreign country. The Russian Federation apparently gave RCA the exclusive right to develop and operate the Ust-Luga gas processing complex, which the court deemed sufficient for this factor.
Last, the Filler test asks whether foreign law treats the entity as part of the government. Plaintiff alleged that RCA has special status under Russian law because of its strategic importance in the energy sector and that RCA’s projects are part of federal programs overseen by state agencies. These assertions did not suffice, the court reasoned, because they did not show that RCA was part of the federal government. With only two of the five Filler factors satisfied, the court declined to confer organ status on RCA and held that it was not an agency or instrumentality of the Russian Federation.
Why did the plaintiff seek to characterize RCA as a foreign state?
In terms of subject-matter jurisdiction, if RCA is private company and the FSIA does not apply, then Linde should still be able to sue in federal court under alienage jurisdiction. So subject-matter jurisdiction does not seem to be driving the plaintiff’s argument. But some methods of service are available under the FSIA that may not otherwise be available, so perhaps concerns about serving RCA were at work. Another possibility is that personal jurisdiction is easier to establish under the FSIA.
Linde is bringing state law causes of action, so if the FSIA does not apply, FRCP 4(k)(1)(A) probably does. Under that rule, a federal court in New York has personal jurisdiction if the New York state courts would have personal jurisdiction. RCA’s purposeful conduct—required by the Supreme Court’s approach to specific jurisdiction under the Fourteenth Amendment following International Shoe v. Washington (1945)—directed at New York, or even the United States as whole, appears to be minimal. Moreover, it is unclear that the New York state long arm statute would be satisfied. It requires that for torts committed outside the state, injury must occur in New York—and suffering financial loss in the United States is not considered sufficient.
In contrast, going forward under the FSIA means that if an exception to immunity applies, then the FSIA provides statutory authority for the exercise of personal jurisdiction, and there would be no need to satisfy the New York state long statute. There would also be no need to satisfy the Fourteenth Amendment due process standard. Instead, the Fifth Amendment would apply, which provides a more flexible test pursuant to the Court’s decision in Fuld v. PLO (2025). For these reasons, the plaintiff may well have thought that the easier path forward was through the commercial activity exception to the FSIA and the Fifth Amendment.
The court’s opinion suggests as much. After concluding that the FSIA did not apply at all to RCA because RCA is not a foreign state, the court reasoned in dicta that if RCA were a foreign state, then commercial activity exception would apply, thus conferring personal and subject-matter jurisdiction. The court’s reasoning here was cursory and not obviously correct, however, as discussed at greater length below.
Would the commercial activity exception to immunity apply?
The court reasoned that the seizure is commercial because a private company could also use a court order to recover property in a contract dispute. With respect to the requirement that the commercial conduct abroad have a “direct effect” in the United States, the judge went on to conclude that Linde had “demonstrated sufficiently how the seizure of the helium tanks has had direct effects on Linde’s business within the United States.” That reasoning is questionable; at a minimum, it would require greater analysis to be convincing.
It appears that Linde, a U.S. corporation, has suffered economic losses due to the seizure of its helium tanks in Russia. But a U.S. company’s financial loss resulting from conduct abroad is not enough. In Antares Aircraft, L.P. v. Federal Republic of Nigeria (2d Cir. 1991), for example, a New York-based company owned an airplane that it had leased to a Gambian airline. After the airline defaulted on the lease agreement, the Nigerian Airports Authority refused to let the plane leave until Antares paid parking and landing fees that the airline owed. Antares made payments by wire from its New York bank account and sued for conversion. The Second Circuit held that there was no direct effect in the United States. The connection between the seizure of the helium tanks and the United States is arguably even weaker in Lindebecause Antares had at least wired money from New York, so the effect of the wrongful conduct was arguably felt there. Linde’s U.S. location seems fortuitous and even less connected to the seizure.
Petersen Energía Inversora S.A.U. v. Argentine Republic (2d Cir. 2018) illustrates how acts associated with the seizure of property abroad can have a direct effect in the United States, but it provides little help to Linde. Argentina expropriated a controlling stake in an Argentine oil company, YPF. The plaintiffs did not sue over the taking itself; they sued instead for the resulting failure to make a tender offer as required by YPF’s bylaws. Any tender offer had to comply with New York Stock Exchange rules, and the plaintiffs held their stake in the company through instruments issued in New York. The Second Circuit held that the breach of those obligations had a direct effect in the United States. RCA, by contrast, does not appear to have a contractual or fiduciary obligation of any kind that involved performance in the United States.
The foregoing analysis suggests that statutory requirement for personal jurisdiction would not be satisfied in federal court had the case gone forward under the FSIA.
Conclusion
The case against RCA has been dismissed for lack of jurisdiction under 28 U.S.C. § 1330. The next logical step for the plaintiff (aside from appealing) would be to refile against RCA. And whether that suit is in federal or state court, the next step for the defendant (assuming the plaintiff properly makes service) will be to move to dismiss for lack of personal jurisdiction.