USCA4 Appeal: 21-2104 Doc: 41 Filed: 11/15/2022 Pg: 1 of 23

PUBLISHED

UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT

No. 21-2104

BLENHEIM CAPITAL HOLDINGS LTD.; BLENHEIM CAPITAL PARTNERS LTD.,

Plaintiffs - Appellants,

v.

LOCKHEED MARTIN CORPORATION; AIRBUS DEFENCE AND SPACE SAS,

Defendants - Appellees,

and

DEFENSE ACQUISITION PROGRAM ADMINISTRATION; REPUBLIC OF KOREA,

Defendants.

Appeal from the United States District Court for the Eastern District of Virginia, at Alexandria. Liam O’Grady, Senior District Judge. (1:20-cv-01608-LO-JFA)

Argued: September 16, 2022 Decided: November 15, 2022

Before GREGORY, Chief Judge, and NIEMEYER and THACKER, Circuit Judges.

Affirmed by published opinion. Judge Niemeyer wrote the opinion, in which Chief Judge Gregory and Judge Thacker joined. USCA4 Appeal: 21-2104 Doc: 41 Filed: 11/15/2022 Pg: 2 of 23

ARGUED: Hamish P.M. Hume, BOIES, SCHILLER & FLEXNER, LLP, Washington, D.C., for Appellants. Marc Laurence Greenwald, QUINN EMANUEL URQUHART & SULLIVAN, LLP, New York, New York; Brian T. McLaughlin, CROWELL & MORING LLP, Washington, D.C., for Appellees. ON BRIEF: Samuel C. Kaplan, Jesse M. Panuccio, BOIES, SCHILLER & FLEXNER, LLP, Washington, D.C., for Appellants. Lyndsay A. Gorton, CROWELL & MORING LLP, Washington, D.C., for Appellee Lockheed Martin Corporation.

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NIEMEYER, Circuit Judge:

Blenheim Capital Holdings Ltd. and Blenheim Capital Partners Ltd.,

Guernsey-based companies (collectively, “Blenheim”), commenced this action against

Lockheed Martin Corporation, Airbus Defence and Space SAS, and the Republic of Korea

and its Defense Acquisition Program Administration (the last two, collectively, “South

Korea”), alleging that the defendants conspired to “cut it out” as the broker for a large,

complex international military procurement transaction. * Under the terms of the

transaction, South Korea would acquire 40 F-35 fighter planes — valued at roughly $7

billion — manufactured by Lockheed and a “Next-gen” military satellite — valued at over

$3 billion — manufactured by Airbus and equipped with capabilities for “integration with

the F-35 fighter planes.” South Korea would pay $7 billion for the F-35s and $150 million

toward the cost of the military satellite, with the remaining value of the satellite serving as

an “offset” to effectively reduce South Korea’s costs and thus “sweeten” the transaction.

Further, the $150 million payment by South Korea was to be paid to Lockheed and passed

on to Blenheim in installments, which Blenheim would use as capital to procure the

financing for the purchase of three satellites from Airbus. One of these satellites would be

the military satellite for South Korea, and the other two would be retained by Blenheim,

which it would operate, leasing their transmission capacity to earn income to pay for the

satellite production and financing costs and provide Blenheim with “a total profit of at least

* For purposes of this appeal, when referring to Lockheed, we include its divisions, subsidiaries, and affiliated companies, as alleged by Blenheim in its complaint; and when referring to Airbus, we likewise include its affiliated companies, as alleged. 3 USCA4 Appeal: 21-2104 Doc: 41 Filed: 11/15/2022 Pg: 4 of 23

$500 million.” The entire transaction was subject to the approval and supervision of the

U.S. government.

For reasons that are vigorously disputed by the parties, Lockheed terminated the

brokerage arrangement with Blenheim and restructured the transaction to be a “direct

procurement” between Lockheed, Airbus, and South Korea, again with the approval and

supervision of the U.S. government. Blenheim was left to bear the costs it had incurred in

designing and working on the transaction, and it was also denied the prospects for profit

from owning and operating two satellites.

In its first amended complaint, Blenheim alleged that the defendants (1) tortiously

interfered with its brokerage arrangement and its prospective business expectations;

(2) conspired to do so; (3) were unjustly enriched; and (4) conspired to violate federal and

state antitrust laws. For subject matter jurisdiction, it relied on federal question jurisdiction

under

, based on its federal antitrust claim, and on the Foreign Sovereign

Immunities Act of 1976,

(a), 1604, 1605(a)(2), and

(supplemental jurisdiction) for its tort claims.

The district court granted the defendants’ motions to dismiss under Federal Rules

of Civil Procedure 12(b)(1) and 12(b)(6). With respect to the tort claims, it concluded that

it lacked subject matter jurisdiction by reason of the Foreign Sovereign Immunities Act

because South Korea was presumptively immune from jurisdiction under the Act and had

not been engaged in “commercial activity,” which is excepted from the immunity from

jurisdiction conferred by the Act. And on the antitrust claim, it held that the action was

barred by both the applicable four-year statute of limitations and the Foreign Trade

4 USCA4 Appeal: 21-2104 Doc: 41 Filed: 11/15/2022 Pg: 5 of 23

Antitrust Improvements Act of 1982, which requires that anticompetitive conduct have a

sufficient effect on domestic or import commerce to be subject to U.S. antitrust laws.

Finding no reversible error in the district court’s analysis, we affirm.

I

According to Blenheim’s complaint, Blenheim “specializes in developing,

structuring, and modeling international ‘offset’ transactions, which are often part of

government procurements.” “Offset” transactions are those in which the supplier in a

procurement contract provides a collateral “sweetener” to the procuring government to

reduce the procuring government’s cost in the transaction. Offset transactions are

“common in defense procurements.”

Beginning in 2011, Blenheim worked with Lockheed to structure an offset

transaction that would secure the sale of 40 F-35 fighter planes to South Korea after South

Korea “accelerated its plans to enhance stealth-fighter capabilities in response to public

outcry over North Korean aggression.” The F-35 is a fifth-generation fighter plane

manufactured by Lockheed for the U.S. government, and it represents the state-of-the-art

in such military equipment and includes classified technology. Because of the F-35’s high

cost, Lockheed and Blenheim recognized that South Korea would require an offset

transaction. Following much work, Blenheim proposed and the relevant parties accepted,

with the approval of the U.S. Department of Defense, the terms of an offset transaction in

which (1) Lockheed would provide South Korea with 40 F-35 planes with a value of

roughly $7 billion; (2) Blenheim would arrange to have Airbus manufacture three satellites,

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one of which — a military satellite designed with “Next-gen” capabilities, including

“integration with the F-35 fighter planes” — would be provided to South Korea, with the

other two to be retained by Blenheim to operate; (3) South Korea would pay for the 40 F-

35s and contribute $150 million toward the cost of the military satellite, which had an offset

value of “more than $3.1 billion,” effectively reducing South Korea’s overall cost by

almost one-half; (4) the $150 million payment would be transferred (via the U.S.

Department of Defense) to Lockheed and then in installments to Blenheim for the purpose

of obtaining financing for the cost of the satellites; (5) Blenheim would then operate the

two satellites provided to it, leasing their transmission capacity to generate income to pay

for all three satellites and to provide it with an estimated profit of $500 million.

Blenheim thus functioned as a broker in the transaction in accordance with the terms

of an “International Brokerage Agreement” between it and Lockheed. Because the

transaction involved highly sensitive military equipment designed and manufactured for

the U.S. military, it could be accomplished only as a “Foreign Military Sale,” requiring

approval and control by the U.S. Department of Defense. Indeed, negotiations for the

transaction took place in the offices of the U.S. Department of Defense, including the

Pentagon, because the negotiations “involved classified information.” The statutes and

regulations governing the sale of the F-35s to South Korea required all aspects of the

transaction to be approved and managed by the U.S. government, including the U.S.

government’s receipt and disbursal of all monies in the manner agreed, including even the

$150 million that South Korea paid to Lockheed for payment to Blenheim.

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Blenheim’s complaint alleged that, beginning sometime in 2015, Lockheed and

Airbus (and later on, South Korea) conspired to “cut Blenheim out” of the offset

transaction. Lockheed’s motivation for doing so, according to Blenheim, was that

Lockheed became concerned that carrying out the transaction would position Blenheim to

compete with a division of Lockheed that was in the market for satellite transmission

capacity. The complaint thus alleged that Lockheed, in furtherance of the conspiracy,

delayed paying Blenheim the installments of the $150 million that it had received from

South Korea via the U.S. Department of Defense. Lockheed made the first payment of $45

million on June 15, 2016 — which was after its due date — and then made no further

payments. And finally, by letter dated October 6, 2016, it terminated Blenheim’s role as

the broker in the offset transaction. The letter stated:

This letter will serve as formal notice by Lockheed Martin Oversees Corporation and its affiliates (“LMOC”) to Blenheim Capital Partners and its affiliates (“Blenheim”) of the immediate termination of International Broker Agreement LMOC-07-51 between LMOC and Blenheim dated October 26, 2007, including all amendments, exhibits, appendices, and attachments thereto (the “IBA”).

As discussed at length in previous written communications, Blenheim has materially breached the IBA (and relevant appendices and exhibits thereto). Such material breaches remain uncured. Accordingly, pursuant to Section 11.B. of the IBA, the IBA is terminated for cause.

The complaint alleged that Lockheed, Airbus, and South Korea then restructured

the offset transaction, cutting Blenheim out of it, such that Lockheed agreed to provide 40

F-35s to South Korea and Airbus agreed to provide the military satellite. The U.S.

Department of Defense approved the restructured transaction, and the military satellite for

South Korea was launched from Cape Canaveral on July 20, 2020.

7 USCA4 Appeal: 21-2104 Doc: 41 Filed: 11/15/2022 Pg: 8 of 23

Blenheim commenced this action on December 31, 2020, alleging that the

defendants (1) tortiously interfered with its International Brokerage Agreement and

prospective business expectancies; (2) conspired to do so; and (3) were unjustly enriched.

And by its first amended complaint, filed on May 21, 2021, Blenheim added claims under

federal and state antitrust laws.

In response, the defendants filed motions to dismiss under Federal Rules of Civil

Procedure 12(b)(1) (lack of subject-matter jurisdiction) and 12(b)(6) (failure to state a

claim), contending, first, that the district court lacked jurisdiction over Blenheim’s tort

claims by reason of the Foreign Sovereign Immunities Act and, second, that the complaint

failed to state antitrust claims because they were barred by the applicable four-year statute

of limitations and, in any event, failed to satisfy the requirements of the Foreign Trade

Antitrust Improvements Act. The district court agreed with the defendants’ positions and,

by order dated September 30, 2021, dismissed Blenheim’s first amended complaint.

From the district court’s order, Blenheim filed this appeal, contending (1) that the

offset transaction or the separate brokerage agreement was “commercial activity” and

therefore was excepted from the immunity conferred by the Foreign Sovereign Immunities

Act; (2) that the antitrust claims “accrued” within four years of its original complaint and

that its first amended complaint adding the antitrust claims related back to the filing date

of the original complaint; and (3) that its antitrust claims satisfied the requirements of the

Foreign Trade Antitrust Improvement Act based on the alleged anticompetitive conduct’s

sufficient effect on U.S. commerce.

8 USCA4 Appeal: 21-2104 Doc: 41 Filed: 11/15/2022 Pg: 9 of 23

II

Blenheim contends first that the district court erred in dismissing its tort claims

against South Korea for lack of subject-matter jurisdiction under the Foreign Sovereign

Immunities Act (“FSIA”),

, 1602–1611, because the basis for its claims

was “commercial activity” by South Korea, which is excepted from the immunity conferred

by the Act.

The FSIA provides that “a foreign state shall be immune from the jurisdiction of the

courts of the United States and of the States except as provided in sections 1605 to 1607 of

this chapter.”

(emphasis added); see also

§ 1330 (providing district

courts with original jurisdiction over foreign states “not entitled to immunity under

§§ 1605-1607”). Blenheim contends, however, that its claims fall within the exception

relating to “commercial activity” as set forth in § 1605(a)(2). That section provides:

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

(a)(2) (emphasis added) (reformatted for clarity). And “commercial

activity,” which is the subject of each exception, is defined as:

either a regular course of commercial conduct or a particular commercial transaction or act. The commercial character of an activity shall be

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determined by reference to the nature of the course of conduct or particular transaction or act, rather than by reference to its purpose.

§ 1603(d).

Blenheim’s argument thus raises, at its core, the question of whether its tort claims

are based on “commercial activity,” as excepted from the immunity from jurisdiction

conferred by § 1604.

As a general principle, the subject-matter jurisdiction of a district court is a question

of law for the court, not the jury, to decide. When a defendant files a motion under Rule

12(b)(1) challenging subject-matter jurisdiction and relying simply on the allegations of

the complaint, the court must take the jurisdictional facts alleged as true — as in the case

of a motion filed under Rule 12(b)(6) — and determine, as a matter of law, whether the

court has jurisdiction. See Kerns v. United States,

(4th Cir. 2009). But

if the defendant disputes the facts alleged for jurisdiction, providing the court with

contradicting facts, the court “may go beyond the complaint, conduct evidentiary

proceedings, and resolve the disputed jurisdictional facts.”

Under the FSIA, a foreign state is “presumptively immune” from the jurisdiction of

U.S. courts, Saudi Arabia v. Nelson,

(1993), and when the foreign state

asserts immunity from jurisdiction under the Act, the “focus shifts” to whether the plaintiff

has demonstrated an exception to such immunity, a question of law, Wye Oak Tech., Inc.

v. Republic of Iraq,

(4th Cir. 2011) (quoting Phoenix Consulting Inc. v.

Republic of Angola,

, 40 (D.C. Cir. 2000). We review the district court’s ruling

on FSIA jurisdiction de novo, see BAE Sys. Tech. Sol. & Servs., Inc. v. Republic of Korea’s

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Def. Acquisition Program Admin.,

(4th Cir. 2018), although we review

the court’s underlying findings of fact under the clear error standard. Here, however, the

governing facts are those of the complaint, which we accept as true for purposes of our

analysis.

In this case, when the defendants asserted a lack of jurisdiction under the FSIA,

Blenheim contended that the conduct alleged in the complaint was based on “commercial

activity,” as excepted from immunity from jurisdiction under § 1605(a)(2). Focusing

mostly on its obligation under the transaction to procure the military satellite for South

Korea, it now asserts:

Blenheim’s claims are principally based upon the commercial transaction that provided a military satellite to South Korea as an “offset” for the F-35 purchase. This transaction was implemented through commercial contracts executed solely by South Korea and Lockheed (to deliver the satellite and related services to South Korea), and by Lockheed with Airbus SAS (to supply the satellite to Lockheed). The U.S. government was not a party to those contracts, and was not permitted to be a party to those contracts. * * * The U.S. government never took title to the satellite, and thus did not act as an intermediary for this “offset” in the way it did for the F-35s. The district court’s conclusion with respect to the F-35 sale is therefore inapplicable to the satellite piece of the transaction. * * * Blenheim’s claims are based principally upon the procurement and financing of the satellite purchase, which was clearly commercial activity.

Blenheim argues that, following the FSIA’s directive to consider the “nature” of the

activity, the offset transaction was commercial because it simply involved “the purchase

and sale of goods.” It argues further that it is irrelevant whether the goods being purchased

could only be purchased by sovereigns for sovereign purposes, “such as military equipment 11 USCA4 Appeal: 21-2104 Doc: 41 Filed: 11/15/2022 Pg: 12 of 23

acquired for national defense,” or whether they were “sold through the [Foreign Military

Sales] Program.”

The defendants do not deny Blenheim’s characterization of the offset transaction as

the sale of goods to South Korea, but they contend that Blenheim’s argument is framed at

too general a level. Rather, they argue, the inquiry must focus on whether the activity was

of a type “exclusively reserved to sovereigns.” When the inquiry is so directed, they

maintain, it becomes clear that the sale of the F-35s and the military satellite, as a “Foreign

Military Sale,” could only be made between sovereigns exercising sovereign authority. As

they argue:

In [a Foreign Military Sale], the sovereign has no privity of contract with the private contractor. . . . In fact, the foreign sovereign effectively delegates control to the U.S. Government, from negotiating terms with the manufacturer’s price and more, and it cannot directly sue the contractor for its performance. . . . [Foreign Military Sales] transactions are also subject to various national security and defense policies, and the foreign sovereign must meet a host of conditions. . . . Indeed, the [Arms Export Control Act] conditions [Foreign Military Sales] on a finding by the President that such sale will strengthen the security of the United States and promote peace.

At the outset, we agree with the defendants’ observation that Blenheim’s definition

of commercial activity is made at too general a level, such that it would essentially

encompass every purchase or sale of goods involving a foreign sovereign. We conclude

that not every purchase of goods by a sovereign is “commercial activity.” Some by their

nature are, and some are not. Nonetheless, the issue is somewhat different. As the Supreme

Court has pointed out, it is “whether the particular actions that the foreign state performs”

are “the type of actions by which a private party engages in trade or commerce.” Republic

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of Argentina v. Weltover, Inc.,

(1992) (first emphasis added) (cleaned

up).

The FSIA defines “commercial activity” as “a regular course of commercial

conduct” or a “particular commercial transaction.”

(d). But it does not

define “commercial.” Rather, it provides only interpretative guidance, stating:

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.

(emphasis added). The Supreme Court observed, “If this is a definition, it is one

distinguished only by its diffidence; as we observed in our most recent case on the subject,

it ‘leaves the critical term “commercial” largely undefined.’” Nelson,

(quoting Weltover,

). But the Court nonetheless undertook to define the

term, beginning with its initial observation that Congress intended the immunity to apply

to “sovereign or public acts (jure imperii)” and not to acts that are “private or commercial

in character (jure gestionis).” Id. at 360. It then concluded:

[A] state engages in commercial activity . . . where it exercises only those powers that can also be exercised by private citizens, as distinct from those powers peculiar to sovereigns. Put differently, a foreign state engages in commercial activity . . . only where it acts in the manner of a private player within the market.

Id. (emphasis added) (cleaned up); see also Weltover,

. Thus, when the

sovereign engages in a transaction peculiar to sovereigns — one in which private parties

cannot engage — it is engaged in sovereign activity that is not excepted from the immunity

conferred by the FSIA, even if it involves the purchase of goods.

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Applying this test to the offset transaction in which Blenheim was a participant and

from which it was subsequently “cut out,” we conclude that South Korea was engaged in

conduct peculiar to sovereigns and therefore was not engaged in “commercial activity” as

excepted from the immunity from jurisdiction conferred by the FSIA.

We begin with the observation that the F-35s and the coordinating military satellite

— the subjects of the offset transaction — involved highly advanced technology and that

the sale of F-35s was restricted as a Foreign Military Sale and therefore could only be made

with the approval and supervision of the U.S. government, and then only to a friendly

country. It was also subject to controlling considerations of national security and public

policy. While the satellite was manufactured by Airbus, a foreign company outside the

United States, it was nonetheless to be designed with next-generation capabilities that

included the capability of engaging with the F-35s, and its inclusion in the offset transaction

was subject to the United States’ approval and supervision. Indeed, the money for the

satellite had to be paid to the United States and only then was disbursed by it, as provided

by the terms of the approved transaction.

Foreign Military Sales cannot be made except in compliance with the Arms Export

Control Act,

et seq., which requires approval of sales by the President of

the United States and certification to Congress. And the President can approve such a

transaction only if, among other things, (1) the President finds that the defense articles “will

strengthen the security of the United States and promote world peace”; (2) the country to

whom the articles are to be provided agrees “not to transfer title to, or possession of” them

without the consent of the President; and (3) the country receiving the goods agrees to

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“maintain the security” of them.

§ 2753(a). Moreover, private parties participating in

Foreign Military Sales are subject to criminal penalties if they are not appropriately

registered and licensed. Id. § 2778(b), (c).

In this case, the nature of the offset transaction was a military procurement by South

Korea from the United States of military items manufactured by Lockheed and Airbus,

which was subject to plenary U.S. government control in furtherance of a policy of

“international defense cooperation among the United States and those friendly countries to

which it is allied by mutual defense treaties.”

. And transactions such as

the offset transaction in this case can be approved “only when they are consistent with the

foreign policy interests of the United States.”

It is clear that a private party could not

engage in such a procurement, whether as buyer or seller. Such activity, by its nature,

involves the transfer of military assets only to sovereigns and then only in furtherance of

U.S. public policy and mutual military cooperation between countries. Moreover, it is not

activity directed or influenced by the market but rather by the President’s and Congress’s

judgment on national security concerns. Foreign Military Sales “reflect[] the national

security interests of the United States,” Sec’y of State for Defence v. Trimble Navigation

Ltd.,

, 707 (4th Cir. 2007), and therefore have a special contract structure that

does not permit designation of the transaction as a “commercial activity.”

Indeed, apart from the Arms Export Control Act, the entire procurement activity and

transaction in this case was inherently sovereign activity. Activities such as creating and

maintaining armed forces and obtaining for them arms and other tools of war — supplied

only by sovereigns and to sovereigns in furtherance of mutual defense arrangements — are

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peculiarly sovereign activities. And while the activity here did not involve the creation of

armed forces, it did involve providing them with F-35s that can only be obtained from the

U.S. government and only provided to a friendly government. Moreover, the sale of F-35s

to South Korea was conditioned on the U.S. government’s determination that the

transaction would advance goals related to foreign relations and national defense. Even

the F-35s’ manufacturer cannot engage in that activity, much less other private parties.

Thus, the activity at issue in this case was not the type that could be pursued by private

citizens or corporations. A sovereign “engages in commercial activity . . . only where it

acts in the manner of a private player within the market.” Nelson,

(cleaned

up). It follows that South Korea was not engaged in “commercial activity” within the

meaning of the FSIA.

Blenheim seeks to avoid this conclusion by arguing that the harm to it was isolated

to its arrangement with Airbus for the manufacture and sale of three satellites, two of which

Blenheim would have operated itself. It thus seeks to break out its contract benefits from

the offset transaction as a whole in order to argue that the satellite transaction was

commercial because a private person or corporation could purchase satellites from Airbus.

But this argument ignores Blenheim’s own characterization of the transaction. The

complaint described South Korea as having an indispensable role. It also described the

satellite as satisfying South Korea’s needs and military specifications, which were

classified. Moreover, it alleged that the offset transaction, including Blenheim’s

arrangement with Airbus for the manufacture of the satellites, was complicated, integrating

many components and parties and requiring Blenheim’s expertise to design it. Blenheim’s

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arrangement with Airbus was a necessary and integral part of the procurement by South

Korea of the F-35s. As Blenheim alleged, it designed the entire transaction as an integrated

offset deal, in which “all four major stakeholders” would benefit — South Korea,

Lockheed, Airbus, and Blenheim. It also alleged that the U.S. Department of Defense

“play[ed] a major role in the sales” and was an “essential player.” Indeed, Blenheim’s

particular arrangement with Airbus for the purchase of the satellites was also regulated by

the United States. As Blenheim alleged, “[E]ven though sovereigns demand offsets as a

‘sweetener’ for defense procurements from foreign suppliers, in the U.S. [Foreign Military

Sales] context, those sovereigns end up footing the bill for the offset with all monetary

transactions flowing through the Pentagon.” (Emphasis added).

Blenheim relies on two district court cases to argue that even taking the offset

transaction as an integrated activity involving South Korea, the offset transaction by its

nature was commercial activity. In the first case, Virtual Def. & Dev. Int’l, Inc. v. Republic

of Moldova,

(D.D.C. 1999), Moldova was seeking to sell Russian-made

MiG fighter planes “to bolster its weakening economy.”

. The MiGs were being

sold on the open market, drawing interest from Iran, to the alarm of the United States.

Moldova then entered into a contract with Virtual Defense as broker to help it find a buyer

that the United States would approve. The MiGs were thereafter purchased by the United

States, and Virtual Defense then sued Moldova for its commission on the transaction. The

district court concluded that the transaction was an open market transaction in which any

private entity could have participated and was therefore “commercial” for purposes of the

FSIA.

. It explained:

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In the instant case, Moldova acted as a private participant in the market when i[t] engaged in discussions with Virtual regarding the sale of the MiGs and when it eventually sold the MiGs to the United States. The mere fact that the goods sold by Moldova were MiG-29 planes does not change the nature of Moldova’s actions. Accordingly, the court concludes that the relevant actions of Moldova constitute commercial activities within the definition espoused in the FSIA.

The transaction in Virtual Defense is clearly distinct from the highly regulated offset

transaction in this case involving South Korea’s procurement of F-35s and a related

military satellite. While Virtual Defense did involve the sale of technically advanced

military aircraft, the structure of the transaction was nothing more than an ordinary

commercial sale by Moldova, without any regulatory oversight. Indeed, the United States

became involved precisely because the MiGs were being sold on the open market, and

possibly to Iran.

The second case relied on by Blenheim, Simon v. Republic of Hungary,

(D.D.C. 2020), likewise does not significantly advance Blenheim’s argument. While

Simon concluded that the Foreign Military Sale involved there was commercial activity, it

did so by analyzing the transaction at issue as one “like a contract to buy army boots,”

(cleaned up), which stands in sharp contrast to the goods being procured here and

the circumstances of the procurement. Moreover, the court’s reasoning gave scant

attention to the manner in which Foreign Military Sales transactions are structured and

regulated.

At bottom, we conclude that the offset transaction in this case was not the type of

activity in which a private party could have participated and that South Korea did not act

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in the manner of a private party in its procurement of the F-35s and the military satellite.

See Nelson,

(quoting Weltover,

).

Because we conclude that the offset transaction was not commercial activity as

excepted from the immunity from jurisdiction conferred in the FSIA, we affirm the district

court’s conclusion that it lacked jurisdiction over Blenheim’s tort claims. See

, 1367.

III

With respect to Blenheim’s antitrust claims, the district court dismissed them based

on both the applicable four-year statute of limitations and its conclusion that they were

barred by the Foreign Trade Antitrust Improvements Act (“FTAIA”), 15 U.S.C. § 6a.

Blenheim contends that both rulings were in error.

On the limitations ruling, the district court concluded that Blenheim’s claims

“accrued” on October 6, 2016, when, as alleged in the complaint, Lockheed sent Blenheim

a letter giving it “formal notice . . . of the immediate termination of the [International

Brokerage Agreement]” between Lockheed and Blenheim. While Blenheim commenced

this action on December 31, 2020, more than four years after the October 2016 date, it

contends that it had challenged the October 2016 letter as invalid because Lockheed did

not have cause to terminate the arrangement and that the agreement was actually terminated

only when Lockheed responded to that challenge in January 2017 with a no-cause 30 days’

notice of termination, which was within the four-year period before Blenheim filed its

original complaint. Blenheim also argues that its injury “was not complete” until the

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restructuring of the offset transaction was completed and the military satellite was actually

launched in 2020, thus deferring or extending to 2020 when its action accrued.

The Clayton Act, under which Blenheim brought its federal antitrust claim, creates

a private cause of action for “any person who shall be injured in his business or property

by reason of anything forbidden in the antitrust laws.”

(a) (emphasis added).

And § 15b provides that such actions “shall be forever barred unless commenced within 4

years after the cause of action accrued.” Id. § 15b. The Virginia statute, on which

Blenheim brings its state antitrust claim, provides similarly. See

-

9.12(b), 59.1-9.14.

An antitrust action “accrues” “when a defendant commits an act that injures a

plaintiff’s business.” Zenith Radio Corp. v. Hazeltine Research, Inc.,

(1971) (emphasis added). “Thus, if a plaintiff feels the adverse impact of an antitrust

conspiracy on a particular date, a cause of action immediately accrues to him to recover all

damages incurred by that date and all provable damages that will flow in the future from

the acts of the conspirators on that date.”

; see also GO Computer, Inc. v.

Microsoft Corp.,

(4th Cir. 2007) (noting that “a cause of action generally

accrues when a defendant commits an act that causes economic harm to a plaintiff”).

Of course, a defense based on the statute of limitations is ordinarily raised as an

affirmative defense, see Fed. R. Civ. P. 8(c), and the burden of establishing that affirmative

defense rests on the defendant, see Goodman v. Praxair, Inc.,

(4th Cir.

2007). Therefore, the limitations defense cannot usually be addressed on a motion to

dismiss under Rule 12(b)(6), which challenges only the legal sufficiency of the complaint,

20 USCA4 Appeal: 21-2104 Doc: 41 Filed: 11/15/2022 Pg: 21 of 23

not usually affirmative defenses that the defendant can assert to the complaint. “But in the

relatively rare circumstances where facts sufficient to rule on an affirmative defense are

alleged in the complaint, the defense may be reached by a motion to dismiss filed under

Rule 12(b)(6).” Id.; see also Richmond, Fredericksburg & Potomac R.R. v. Forst,

, 250 (4th Cir. 1993). In this case, the defendants relied solely on the allegations of the

complaint in moving to dismiss the antitrust claims as untimely. Accordingly, to review

the district court’s ruling granting that motion, we must turn to the complaint.

Blenheim’s complaint alleged, as relevant to when its antitrust causes of action

accrued, that “from 2012 through 2016 Blenheim Capital devised and structured an

innovative offset deal,” as described in detail. After Blenheim had “conceived, modeled,

and begun the implementation” of the offset transaction, Lockheed, Airbus, and South

Korea “conspired to cut Blenheim out of the deal,” and they thus “benefitted from years of

work and effort by Blenheim . . . to maximize their own advantages and profits.” The

complaint alleged further that the defendants “agreed to proceed with a restructured

transaction that cut out Blenheim in late 2016” (emphasis added), thus misappropriating

Blenheim’s “years of effort” on the offset transaction and leaving it with nothing in return.

In addition, the complaint alleged that while South Korea had paid Lockheed $150 million,

which Lockheed was to pay to Blenheim in installments as seed money to finance the

satellites, Lockheed paid Blenheim only one installment of $45 million, leaving $105

million unpaid. According to the complaint, by late 2016, Blenheim had paid $20 million

of the $45 million to Airbus as commitment for the financing, which never occurred. And

Blenheim was cut out from the transaction because, as alleged, Lockheed became

21 USCA4 Appeal: 21-2104 Doc: 41 Filed: 11/15/2022 Pg: 22 of 23

concerned that “Blenheim would become a competitor . . . for the sale and leasing of

satellite capacity.” In furtherance of the conspiracy, “on October 6, 2016, [Lockheed]

provided Blenheim with a purported ‘formal notice . . . of the immediate termination’ of

the [International Brokerage Agreement] for cause.” Thereafter, “[h]aving conspired to

cut Blenheim out of the offset transaction, Lockheed, Airbus, and South Korea proceeded

with the military satellite procurement and worked to obtain the necessary approvals . . . to

do so. On July 20, 2020, the satellite was launched from Cape Canaveral, Florida. . . .

Though the launch was the fruit of Blenheim’s labors, it received nothing.”

Not only do the complaint’s allegations place October 6, 2016, as the date when

Blenheim was cut out of the offset transaction, they also describe how, as of that date,

Blenheim was injured in its business and property and Lockheed, Airbus, and South Korea

were enriched by the product of Blenheim’s years of work and effort, seizing the fruits and

denying Blenheim the benefits of the deal. Indeed, as of that time, October 6, 2016,

Blenheim had already paid $20 million to Airbus as a finance commitment, for which it

received nothing because of the October 6, 2016 termination. Finally, as the complaint

alleged, Blenheim was also denied, as of that date, the benefit of procuring satellites and

obtaining a profit from their operation. Indeed, the complaint stated dramatically that after

October 6, 2016, Blenheim “received nothing.” Under these circumstances, we conclude

that Blenheim’s cause of action accrued on October 6, 2016, when Blenheim felt the

“adverse impact of [the] antitrust conspiracy.” Zenith Radio Corp.,

.

Blenheim argues that it was not injured until January 2017 because it was only then

that Lockheed legally terminated the brokerage agreement. But the question of whether

22 USCA4 Appeal: 21-2104 Doc: 41 Filed: 11/15/2022 Pg: 23 of 23

Lockheed’s October 2016 termination of the brokerage agreement caused Blenheim injury

does not depend on whether that termination was legal. The complaint alleges clearly that

Lockheed’s October 2016 termination, whether legal or illegal, cut Blenheim out of the

transaction and thus deprived it of its anticipated benefits.

Also, Blenheim’s alternative argument that the accrual date of its action was

extended until the restructured offset transaction was complete, i.e., when the satellite was

launched in 2020, lacks legal support. The fact that some damages were to accrue in the

future does not extend the accrual date. See Zenith Radio Corp.,

. As the

Supreme Court noted, to recover future damages, the plaintiff still must “sue within the

requisite number of years from the accrual of the action,” when it first felt “the adverse

impact of [the] antitrust conspiracy.”

Because Blenheim felt adverse impacts

immediately upon Lockheed’s October 2016 termination of the brokerage agreement, the

date of the satellite launch is not relevant to the date when the cause of action accrued.

Accordingly, we affirm the district court’s ruling that Blenheim’s antitrust claims

are barred by the applicable four-year statute of limitations.

While the district court also concluded, indeed persuasively, that the FTAIA barred

Blenheim’s antitrust claims because the anticompetitive conduct alleged did not

sufficiently affect U.S. domestic or import commerce, we do not address that issue in light

of our ruling affirming dismissal on the basis of the statute of limitations.

The judgment of the district court is, accordingly,

AFFIRMED.

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