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Click here for the full text of this decision FACTS:Plaintiff-appellees, receivers for various insurance companies, brought suit against individuals and entities allegedly involved in a conspiracy to fraudulently acquire and loot the insurance companies. In their complaint, plaintiffs alleged that the Holy See, also known as the Vatican City State, participated in the scheme through its agent Emilio Colagiovanni, and sought damages for RICO violations, civil conspiracy, common law fraud, and aiding and abetting fraud. The Vatican moved for dismissal under Federal Rule of Civil Procedure 12(b)(1) based, in part, on its claim of immunity under the Foreign Sovereign Immunities Act. Plaintiffs argued that the Vatican is subject to suit under the commercial exception to the FSIA, 28 U.S.C. �1605(a)(2), either because Colagiovanni acted with the actual or apparent authority of the Vatican, or because the Vatican ratified his acts. The district court declined to consider Plantiffs’ actual authority and ratification theories, and instead denied the Vatican’s rule 12(b)(1) motion on grounds that when Colagiovanni acted with the apparent authority of the Vatican, this conduct fell within the commercial exception to FSIA. HOLDING:Vacated and remanded. Plaintiffs argue that the Vatican is subject to suit under the commercial activity exception to the FSIA, because its agent, Colagiovanni, engaged in commercial activity while possessing apparent authority. The court agrees with the 4th U.S. Circuit Court of Appeals and the 9th U.S. Circuit Court of Appeals that an agent’s acts conducted with the apparent authority of the state is insufficient to trigger the commercial exception to FSIA. Plaintiffs point to two decisions of this court to support their argument that apparent authority is sufficient to trigger the commercial activity exception, Arriba Ltd. v. Peroleos Mexicanos, 962 F.2d 528 (5th Cir. 1992), and Hester Int’l Corp. v. Federal Republic of Nigeria, 879 F.2d 170 (5th Cir. 1989). Both opinions address the presumption of separate juridical status of government instrumentalities under the test articulated by the Supreme Court in First National City Bank v. Banco Para El Comercio Exterio De Cuba, 462 U.S. 611 (1983) (Bancec). Neither case directly addresses the apparent authority of an individual agent in the context of the commercial activity exception. The two inquiries are analytically distinct. The court in Bancec held that when a plaintiff sues a government instrumentality of a foreign state, the court applies a presumption that the instrumentality is independent of the foreign state for purposes of the FSIA. A plaintiff can over come that presumption, however, in certain circumstances by demonstrating that the instrumentality is the agent or alter ego of the foreign state. The inquiry in that context, then, is whether the state exercises day-to-day control over the agency, not whether a particular type of agency relationship is sufficient under the commercial activity exception. Under the commercial activity exception, however, the court must determine whether the commercial activity is “of the foreign state.” OPINION:Davis, J.; Reavley, Davis and Wiener, JJ.

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