Wye Oak Technology, Inc. v. Republic of Iraq and Ministry of Defense of the Republic of Iraq

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued February 13, 2024 Decided July 16, 2024
No. 23-7009
WYE OAK TECHNOLOGY, INC.,
APPELLEE
v.
REPUBLIC OF IRAQ AND MINISTRY OF DEFENSE OF THE
REPUBLIC OF IRAQ,
APPELLANTS
Consolidated with 23-7013
Appeals from the United States District Court
for the District of Columbia
(No. 1:10-cv-01182)
Boaz S. Morag argued the cause for appellants/cross-
appellees. With him on the briefs was Nowell D. Bamberger.
Neal Kumar Katyal argued the cause for appellee/cross-
appellant. With him on the briefs were C. Allen Foster,
William E. Havemann, and Reedy C. Swanson.

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Before: MILLETT and WALKER, Circuit Judges, and
GINSBURG, Senior Circuit Judge.
Opinion for the Court filed by Circuit Judge MILLETT.
MILLETT, Circuit Judge: In late-summer 2003, a small
American company named Wye Oak Technology, Inc. entered
into a contract with the Iraqi Ministry of Defense to rebuild
Iraq’s largely destroyed military, with the cost financed by
Iraq. Wye Oak performed successfully under the contract for
nearly five months. But Iraq refused to pay and gave the
promised money to someone else. When Wye Oak’s owner
flew to Iraq to try to obtain the payment due, he was shot and
killed by unidentified assailants. Wye Oak eventually closed
shop in Iraq with the payment dispute still unresolved.
Years later, Wye Oak sued Iraq in a United States federal
district court for breach of contract. After a decade of
litigation, the district court awarded Wye Oak more than $120
million in damages.
On appeal, Iraq does not dispute that it breached its
agreement with Wye Oak. It argues instead that it is
completely immune from suit and that, alternatively, the
district court’s damage award was too high. Wye Oak, for its
part, contends that the damage award was too low.
Whatever the merits of the damages dispute, we cannot
reach it. Iraq is immune from suit, so we have no jurisdiction.
We accordingly reverse the district court’s judgment and
remand for dismissal of the case.

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I
A
Under the Foreign Sovereign Immunities Act (“FSIA”), a
foreign state is immune from civil suit in the United States
unless the suit falls under one of the Act’s enumerated
exceptions. 28 U.S.C. § 1604; Verlinden v. Central Bank of
Nigeria, 461 U.S. 480, 488–489 (1983).
The “most significant” of these exceptions is the
“commercial” exception. Republic of Argentina v. Weltover,
Inc., 504 U.S. 607, 611 (1992). It provides that a foreign state
is not immune when the action is based
[1] upon a commercial activity carried on in the
United States by the foreign state; or [2] upon an act
performed in the United States in connection with a
commercial activity of the foreign state elsewhere; or
[3] 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[.]
28 U.S.C. § 1605(a)(2).
Only the third clause of the commercial exception is at
issue here. To establish a statutory exception to Iraq’s
sovereign immunity under that clause, Wye Oak must show
that its lawsuit is (1) based on an act by the foreign state outside
the United States; (2) that was taken in connection with
commercial activity; and (3) that caused a direct effect in the
United States. 28 U.S.C. § 1605(a)(2); Weltover, 504 U.S. at
611.

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The first two elements of that test have already been
resolved in Wye Oak’s favor. In a prior appeal in this case, we
held that this lawsuit is based on an act that occurred outside
the United States because Iraq breached its contract with Wye
Oak to pay Wye Oak in Iraq for work performed in Iraq. Wye
Oak Tech., Inc. v. Republic of Iraq, 24 F.4th 686, 703 (D.C.
Cir. 2022) (Wye Oak II). We also held that the breach was
connected to a commercial activity because Iraq contracted
with a private entity, Wye Oak, for military reconstruction
services. Id.
Before us is the remaining jurisdictional question of
whether Iraq’s breach “cause[d] a direct effect in the United
States[.]” 28 U.S.C. § 1605(a)(2).
To answer that question in Wye Oak’s favor, we would
have to find an effect in the United States that had “no
intervening element, but rather, flow[ed] in a straight line
without deviation or interruption” from the breach in Iraq.
Princz v. Federal Republic of Germany, 26 F.3d 1166, 1172
(D.C. Cir. 1994) (quotation marks omitted); Weltover, 504 U.S.
at 618 (“[A]n effect is direct if it follows as an immediate
consequence of the defendant’s activity.”) (formatting
modified).
B
In the early 2000s, the United States led a multi-national
military coalition that toppled Saddam Hussein’s government
in Iraq. Wye Oak Tech., Inc. v. Republic of Iraq, No. 1:10-cv-
01182, 2019 WL 4044046, at *3 (D.D.C. Aug. 27, 2019) (Wye
Oak I). The coalition then handed over power to an interim
Iraqi government. Id.

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As the United States worked to transition Iraq’s
governance to Iraqi politicians and voters, it also worked to
hand over military security to Iraqi armed forces. Wye Oak I,
2019 WL 4044046, at *3. The invasion, though, had left Iraq’s
military structure, equipment, and personnel in ruins.
In 2004, Wye Oak and its president, Dale Stoffel,
contacted the Iraqi Ministry of Defense with a plan to inventory
and assess Iraq’s existing military equipment, refurbish what
equipment it could, and sell the rest for scrap. Wye Oak II, 24
F.4th at 692. With the recommendation of U.S. military leaders
in Iraq, the Ministry agreed. Wye Oak I, 2019 WL 4044046, at
*4.
To implement that plan, the Ministry and Wye Oak signed
a Broker Services Agreement in August 2004. Wye Oak I, 2019
WL 4044046, at *4. The Agreement made Wye Oak the “sole
and exclusive Broker” for all matters related to refurbishing
Iraqi military equipment or selling it as scrap. J.A. 479 (Broker
Services Agreement). The Ministry agreed “not to conduct any
Military Refurbishment Services or arrange for the use, sale or
lease of any Refurbished Military Equipment provided for
under th[e] Agreement nor engage in any scrap sales, except
pursuant to an engagement with [Wye Oak] under th[e]
Agreement.” J.A. 479 (Broker Services Agreement). The
Agreement also set out a payment process under which Wye
Oak would submit invoices to the Ministry. The Ministry
would then “make full payment on such invoice[s] immediately
upon presentation * * * in the form and manner as directed by
[Wye Oak].” J.A. 481 (Broker Services Agreement).
Wye Oak performed as promised under the Agreement. In
Iraq, it worked with Dale’s other company, CLI Corporation,
to hire contractors, began its initial assessment of equipment,
and prepared for refurbishment and scrap operations. Wye Oak

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I, 2019 WL 4044046, at *8. Back in the United States, Dale’s
brother David Stoffel managed some of the company’s
business affairs from West Virginia. Id. at *8. He created a
computer program to inventory and track all the equipment
Dale was handling abroad, oversaw Wye Oak’s electronic
communications, and communicated with the Iraq-based
members of Wye Oak to see what support they might need. Id.
at *15.
Several months into the agreement, Wye Oak presented
the Iraqi Ministry of Defense with three invoices detailing its
costs and the amount it charged for overhead and profit. Wye
Oak I, 2019 WL 4044046, at *9. Together, the invoices totaled
nearly $25 million. Id. Wye Oak designated the Ministry’s
Baghdad office as the place of payment. Wye Oak Tech., Inc.
v. Republic of Iraq, No. 1:10-cv-1182, 2022 WL 17820569, at
*6–7 (D.D.C. Dec. 20, 2022) (Wye Oak III); J.A. 489–491
(Invoices).
The Ministry agreed to pay. Wye Oak I, 2019 WL
4044046, at *9. But it gave the money to a Lebanese
businessman named Raymond Zayna instead. It did not pay a
penny to Wye Oak. See id. at *8, *13–14.
Wye Oak pursued various efforts to secure payment. Dale
flew back to the United States where he and David contacted
several American officials to try to enlist support for Wye
Oak’s efforts. Wye Oak I, 2019 WL 4044046, at *15. As a
result of that outreach, a Senator contacted the State
Department and asked for its assistance. Wye Oak III, 2022
WL 17820569, at *15. The State Department talked to the
Department of Defense. Id. The Department of Defense then
met with Wye Oak and appointed a representative to advise the
Ministry. Id.

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In December, Dale flew back to Iraq to ensure Wye Oak’s
work remained on schedule and to try to resolve the payment
issue. Wye Oak I, 2019 WL 4044046, at *16. When Dale
arrived in Iraq, he attended a meeting with Ministry officials,
Zayna, and U.S. military officers. Id. Everyone agreed that
Zayna and the Ministry would give Wye Oak the money. See
id. at *16–17. Dale then went on a tour of Iraq to survey Wye
Oak’s progress. Id. at *17.
Days later, Dale received word that payment was ready in
Baghdad. He drove toward the city to receive it. Wye Oak III,
2022 WL 17820569, at *3. On the way, unknown assailants
attacked his car and shot him and a companion to death. Wye
Oak I, 2019 WL 4044046, at *17. All of Wye Oak’s personnel
then left Iraq permanently. Id. at *18.
Wye Oak kept managing its contractors in Iraq for a few
weeks after Dale’s death. But without payment, it soon had to
cease all work in Iraq. Wye Oak I, 2019 WL 4044046, at *18–
19. Back in the United States, David stopped developing his
software program and monitoring electronic communications
from Iraq. Wye Oak III, 2022 WL 17820569, at *12. Wye Oak
cancelled multiple planned business ventures, including plans
to subcontract some of its work to CLI, expand its U.S.-based
computer infrastructure and personnel, and build an
international support network focused on Eastern Europe. Id.
at *10–13.
C
1
Wye Oak sued Iraq in the Eastern District of Virginia for
breach of contract. Wye Oak Tech., Inc. v. Republic of Iraq,
No. 1:09-cv-793, 2010 WL 2613323, at *1 (E.D. Va. June 29,

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2010), aff’d 666 F.3d 205. That court transferred the case to
the United States District Court for the District of Columbia.
Id.
The district court found Iraq liable after an eight-day bench
trial. Wye Oak I, 2019 WL 4044046, at *54. The court first
determined that Iraq bore responsibility for any breach of the
Agreement by its Ministry of Defense. Id. at *21. The district
court then held that it had jurisdiction under the commercial
exception’s second clause because it found that Wye Oak’s suit
was based on an act performed in the United States in
connection with a commercial activity of the foreign state
elsewhere. Id. at *21–24. The court did not address the
exception’s other clauses. Turning to the merits, the district
court found that Iraq had materially breached the agreement
when it failed to pay money due under the three invoices. Id.
at *24–28. It ordered Iraq to pay Wye Oak over $120 million.
Id. at *54; Wye Oak I, Order, No. 553 (Nov. 15, 2019).
Iraq appealed and this court vacated the district court’s
judgment. Wye Oak II, 24 F.4th at 703–704. We held that the
commercial exception’s second clause did not apply to Wye
Oak’s breach-of-contract suit. Id. at 702. That clause, we
explained, is triggered only when the foreign sovereign
engages in action inside the United States, while Wye Oak’s
suit was based solely on Iraq’s conduct in Iraq. Id.
We then concluded that it was “plausible” that Iraq might
lose immunity under the commercial exception’s third clause.
Wye Oak II, 24 F.4th at 703. We held that the first two elements
of that test were met because the suit was based on (1) an act
outside the United States that (2) related to Iraq’s commercial
activity. Id. We remanded the case to the district court to
develop a factual record to determine whether Iraq’s breach

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had a “direct effect” inside the United States. Id. (quoting 28
U.S.C. § 1605(a)(2)).
2
The district court developed the needed factual record and
found that Iraq’s breach had direct effects within the United
States. Wye Oak III, 2022 WL 17820569.
At the outset, the court rejected a number of Wye Oak’s
claimed direct effects. It ruled that Iraq’s failure to pay the
money it owed into Wye Oak’s Pennsylvania-based bank
account did not cause a “direct effect” in the United States
because nothing in the Agreement obligated Iraq to deposit the
money in the United States. Wye Oak III, 2022 WL 17820569,
at *5–8. The Agreement instead provided that Iraq would pay
Wye Oak “immediately” upon receiving an invoice “in the
form and manner as directed by [Wye Oak,]” J.A. 481, and
the invoices Wye Oak submitted specified payment in
Baghdad, J.A. 489–491 (Invoices); Wye Oak III, 2022 WL
17820569, at *7–8.
The court also found that Iraq did not “target” Wye Oak in
the United States for a commercial relationship because Iraq
did not take “any affirmative actions” in the United States to
identify Wye Oak or solicit a contractual commitment. Wye
Oak III, 2022 WL 17820569, at *8–9. Instead, Wye Oak
approached the Iraqi government in Iraq about doing business
for it in Iraq. Id. at *9. Regardless of whether Iraq might have
anticipated that Wye Oak would feel some loss from the breach
in the United States, the court held that was not enough to
support jurisdiction. Id. at *10.
As for Wye Oak’s argument that the breach interrupted its
subcontract with U.S.-based CLI, the court reasoned that the

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Agreement did not require that subcontract, and so its loss was
not a direct effect of the breach. Wye Oak III, 2022 WL
17820569, at *10–11.
The district court, however, found that there were other
direct effects in the United States. It noted that Wye Oak
performed “a number of activities in the United States”— such
as the development of inventory-tracking software and
management of Wye Oak’s electronic communications—in
connection with its work under the Agreement. Wye Oak III,
2022 WL 17820569, at *12. Iraq’s breach ground this
domestic work to a halt. Id.
The court additionally found that the breach disrupted
Wye Oak’s “clear” plans to expand its operations in the United
States to support its work for Iraq, and that Iraq knew “from
the start of the relationship” how important this work was to
Wye Oak’s business. Wye Oak III, 2022 WL 17820569, at *12,
*14. The court added that Iraq’s failure to pay also stopped the
frequent trips Dale and other Wye Oak employees made
between the United States and Iraq and prevented Wye Oak
from building a broad network across Eastern Europe for
refurbishing Soviet-era military supplies. Id. at *13.
The court concluded by finding that Iraq’s breach directly
impacted U.S. diplomatic and military operations in the United
States. Wye Oak III, 2022 WL 17820569, at *15. When Iraq
did not pay, Wye Oak reached out to several U.S. officials in
the United States for assistance, and some of those officials
took steps—in the United States—to help. Id. at *15–16.
According to the court, the breach also interfered with U.S.
efforts to stand up a strong Iraqi military to replace the U.S.
military in Iraq. Id. at *17–18. This interference, the court
ruled, impacted policy decisions made in Washington about its
readiness to withdraw American troops from Iraq. Id.

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Having found jurisdiction under the commercial
exception, the district court reentered its prior damages order
with the numbers adjusted to account for increased interest.
See Wye Oak III, Judgment, No. 553 (Dec. 20, 2022). Both
parties appealed.
II
We review the district court’s factual findings for clear
error. Wye Oak II, 24 F.4th at 700. We review its legal
interpretation and application of the FSIA de novo. Id.
III
Iraq loses its immunity to this lawsuit only if its breach of
contract caused a direct effect in the United States. It did not.
Iraq was the center of Wye Oak’s entire commercial
relationship with the Ministry, and Iraq is where the breach’s
direct effects occurred. As a result, the district court lacked
jurisdiction over this suit, and so its judgment is vacated, and
the case remanded with instructions to dismiss.1
1 We address only whether the commercial exception’s third
clause applies to this case. Our earlier decision held that its second
clause does not. Wye Oak II, 23 F.4th at 702. Wye Oak makes no
argument that that the first clause is relevant here, and the district
court did not rely on that clause either. That is unsurprising. In cases
like this that involve “a contract executed and performed outside the
United States,” our analysis generally focuses only on the third
clause, and nothing about the facts in this case warrants different
treatment. See Helmerich & Payne Int’l Drilling Co. v. Bolivarian
Republic of Venezuela, 784 F.3d 804, 817 (D.C. Cir. 2015), vacated
on other grounds, 581 U.S. 170.

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A
The only jurisdictional question left in this case is whether
Iraq’s breach caused a direct effect in the United States. See
28 U.S.C. § 1605(a)(2). A “direct effect” is one that “follows
as an immediate consequence” of the breach. Weltover, 504
U.S. at 618 (quotation marks omitted). Here, all of the
immediate consequences of Iraq’s breach were felt in Iraq, not
the United States.
From the start, Wye Oak and the Ministry fully anchored
their relationship in Iraq. Wye Oak approached the Iraqi
Ministry of Defense, in Iraq, about doing business there. Wye
Oak III, 2022 WL 17820569, at *9. Wye Oak and the Iraqi
government negotiated the scope of that work and executed
their Broker Services Agreement in Iraq. Id. The work
involved rebuilding Iraqi military equipment for use by Iraq’s
armed forces. Wye Oak I, 2019 WL 4044046, at *5–6; J.A. 479
(Broker Services Agreement). The equipment was already in
Iraq, and the maintenance and refurbishment work were to be
performed there as well. Wye Oak I, 2019 WL 4044046, at *8;
J.A. 479 (Broker Services Agreement). Wye Oak’s personnel
travelled to Iraq to visit its military bases and to assess their
stores of weapons and equipment. See Wye Oak III, 2022 WL
17820569, at *13. Wye Oak hired contractors to come to Iraq
to work at those bases. Wye Oak I, 2019 WL 4044046, at *8.
And Iraq used the refurbished equipment in Iraq to help defend
its people. Id. at *18–19.
The breach occurred in Iraq too. When the time came for
payment, Wye Oak chose Iraq as the place where the Ministry
should pay. J.A. 489–491 (Invoices). The Ministry in Iraq
chose not to do so, and instead paid someone else in Iraq.
Those withheld dollars—which should have changed hands in

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Baghdad—were meant to fund Wye Oak’s ongoing work in
Iraq.
B
Wye Oak counters that, despite these extensive ties to Iraq,
there still were three alleged “direct effects” in the United
States: the missed payment, stymied business activities for the
Pennsylvania-based Wye Oak operation, and diplomatic and
military reactions to the contract breach. None qualifies as a
direct effect in the United States within the meaning of the
FSIA’s commercial exception.
1
Wye Oak’s first argument is that the missing funds from
Iraq’s refusal to pay are a direct effect in the United States. But
Wye Oak has shown no such domestic harm because Wye Oak
asked for the payment to be made in Iraq, not in the United
States, and not to a United States bank.
Generally, if a foreign state is obligated to pay money due
under a contract into a U.S. bank account—and does not—then
those missing funds are considered a direct effect in the United
States. See Helmerich, 784 F.3d at 818.
On the other hand, we have repeatedly held that when a
foreign state merely has the discretion to pay in the United
States, the missing funds do not have a direct effect in the
United States. That is because, when the foreign state is not
“supposed” to send money into the United States, its failure to
pay the plaintiff has no “immediate consequence” there.
Peterson v. Royal Kingdom of Saudi Arabia, 416 F.3d 83, 90–
91 (D.C. Cir. 2005) (internal quotation marks omitted); see
Helmerich, 784 F.3d at 818; Goodman Holdings v. Rafidain

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Bank, 26 F.3d 1143, 1146 (D.C. Cir. 1994) (no direct effect
when “[n]either New York nor any other United States location
was designated as the place of performance where the money
was supposed to have been paid”) (quotation marks omitted);
Odhiambo v. Republic of Kenya, 764 F.3d 31, 39 (D.C. Cir.
2014) (There is “no direct effect where the foreign sovereign
might well have paid its contract partner through a bank
account in the United States but might just as well have done
so outside the United States.”) (quotation marks omitted).
At Wye Oak’s direction, Iraq was obligated to pay Wye
Oak in Baghdad, not the United States. Wye Oak III, 2022 WL
17820569, at *7. Wye Oak submitted three invoices. Each one
instructed the Ministry to pay Wye Oak “at [the Ministry’s]
Baghdad[,] Iraq office[.]” J.A. 489, 490, 491 (Invoices).
Wye Oak disputes this characterization of Iraq’s
obligation. A month after Iraq paid Zayna instead of Wye Oak,
Dale emailed Zayna to tell him to pay Wye Oak via its
Pennsylvania-based bank account. Wye Oak argues that this
instruction changed Iraq’s payment obligation to the United
States.
But Iraq agreed to pay “pursuant to” the instructions in
Wye Oak’s invoices. J.A. 481 (Broker Services Agreement).
Once it received those invoices, it was obligated to pay
“immediately” and “in the form and manner” Wye Oak had
instructed. J.A. 481 (Broker Services Agreement); J.A. 489
(Invoice) (“Pay Immediate Upon Receipt”); J.A. 490, 491
(Invoices) (same). Iraq never agreed to honor any changes to
those instructions made weeks later by Wye Oak to a third party
in an email. See Wye Oak III, 2022 WL 17820569, at *7 (“[The
Agreement] specified that Wye Oak would be paid pursuant to
the pro forma invoices it submitted.”).

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Nor, in any event, does the email show that Iraq agreed to
modify the process for receiving payment instructions. Even
assuming Zayna could speak for the Ministry, see Wye Oak III,
2022 WL 17820569, at *2 n.2 (declining to resolve whether
Zayna was Iraq’s agent), Zayna responded to Dale’s email by
refusing to send the money to the United States, id. at *2. He
instead told Dale that he had set up an Iraqi bank account for
payment. J.A. 566 (“Come to Baghdad, I already opened an
account for you in North bank a month ago and you already get
paid a small amount, I’ll feed t[h]is account as much[ ]as you
need to proceed with this project.”). So, to the extent Dale and
Zayna’s email exchange has any relevance, it corroborates that
payment would be in Iraq.
Because Iraq, not the United States, was the place
designated by Wye Oak “where the money was ‘supposed’ to
have been paid[,]” Iraq’s missed payments did not have a
“direct effect” in the United States. Goodman Holdings, 26
F.3d at 1146; see Peterson, 416 F.3d at 90–91.
2
Wye Oak next argues that Iraq’s breach interrupted the
flow of commerce between the United States and Iraq. That
argument fails as well because, for a breach of contract, a halt
in commerce between the United States and another country
counts as a direct effect in the United States only if the contract
“establishe[d] or necessarily contemplate[d] the United States
as a place of performance[.]” Odhiambo, 764 F.3d at 40.
Nothing in Wye Oak’s Agreement with Iraq established or
“necessarily contemplate[d]” performance in the United States.
Odhiambo, 764 F.3d at 40. Quite the opposite. The contract
was for the rehabilitation or scrapping of military equipment
entirely in Iraq. The Agreement appointed Wye Oak as the

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Ministry’s “sole and exclusive Broker” for “the provision of
Military Refurbishment Services with respect to all of the
various military bases, offices and properties owned by, or
under the control of, the Ministry and/or the Republic of
Iraq[.]” J.A. 479 (Broker Services Agreement). There are no
relevant domestic direct effects when “all activities covered by
the contract would have occurred outside the United States[.]”
Cruise Connections Charter Mgmt. 1, LP v. AG of Canada, 600
F.3d 661, 665 (D.C. Cir. 2010) (citing United World Trade,
Inc. v. Mangyshlakneft Oil Prods. Ass’n, 33 F.3d 1232, 1237–
1239 (10th Cir. 1994)).
True, the same Ministry official who signed the
Agreement also gave Wye Oak a letter that represented that
Wye Oak’s work was to be undertaken “with the assistance and
cooperation of the United States Mi[l]itary and all coalition
partners as may[ ]be required by law, statute or as described in
[the Agreement.]” J.A. 486 (Letter from Ministry to Wye Oak)
(emphasis omitted). But that language does not appear in the
Agreement. And nothing in the terms or subject of the
Agreement itself shows that it necessarily contemplated
performance in the United States. See Odhiambo, 764 F.3d at
40; contrast EIG Energy Fund XIV, L.P. v. Petroleo Brasileiro,
S.A., No. 22-7118, slip op. at 12 (D.C. Cir. June 11, 2024)
(foreign fraud caused direct effect in United States because the
plaintiffs’ presence in the United States was the reason the
foreign state targeted them, “not mere happenstance”)
(quotation marks omitted).
Anyhow, the letter must be read in the context of a
military-rehabilitation service to be performed on Iraqi
equipment in Iraq. See J.A. 1409 (Wye Oak’s witness
describing the letter as “a letter of introduction” that was meant
to “ensure safe passage, or at least uninterrupted passage to
[Iraqi] bases”). Given that setting for the contract’s

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performance, the letter’s reference most logically refers to the
support and assistance of the United States military and its
coalition partners in Iraq by, for example, providing access to
coalition-run facilities. See Wye Oak I, 2019 WL 4044046, at
*8; J.A. 479–480 (Broker Services Agreement) (directing Wye
Oak to begin work at multiple coalition-run facilities in Iraq).
Iraq, after all, was a place of ongoing hostilities and military
operations, making the support of the United States military in
Iraq critical to Wye Oak’s Iraqi operations.
Given all of that, Wye Oak’s references to scattered
commercial interchanges that dried up after Iraq’s breach come
up short. For example, David Stoffel decided to stop his work
in West Virginia after months of not being paid. But Iraq never
agreed to, or necessarily contemplated, his work in the United
States in the first place. See Odhiambo, 764 F.3d at 40. The
same goes for Wye Oak’s planned American-based expansion:
That was a unilateral business judgment made by Wye Oak that
fell outside the scope of the Agreement. See Cruise
Connections, 600 F.3d at 665.
As for any subcontracts Wye Oak planned to sign for work
done abroad, their failure is not a direct effect in the United
States for two reasons. First, they were not contemplated by
the Agreement. Second, they were to be performed outside the
United States. While some of the envisioned subcontractors
were U.S. companies, “harm to a U.S. citizen, in and of itself,
cannot satisfy the direct effect requirement.” Cruise
Connections, 600 F.3d at 665.
To be sure, one result of Iraq’s breach is that Wye Oak
eventually stopped operations in Iraq. Its U.S.-based personnel
correspondingly stopped traveling to Iraq and no longer
worked in the United States to support those Iraqi operations.
But those “decision[s] to cease business” in the United States

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did not “flow immediately” from Iraq’s breach. Helmerich,
784 F.3d at 818–819. They were orthogonal to the disrupted
Iraq-based work, especially since the Agreement simply never
established or contemplated any travel or performance in the
United States to begin with. See Cruise Connections, 600 F.3d
at 665; Odhiambo, 764 F.3d at 40.
3
Lastly, Wye Oak argues that the breach had diplomatic and
military impacts in the United States. That argument fares no
better.
Wye Oak is correct that some American government
officials took steps in the United States to assist Wye Oak. For
example, at Wye Oak’s urging, a Senator contacted the State
Department to see if it could help get Wye Oak paid. See Wye
Oak III, 2022 WL 17820569, at *15. The State Department
then spoke with the Department of Defense. Id. The
Department of Defense, in turn, met with Wye Oak and
appointed a representative to advise the Iraqi Ministry on
“acquisition logistics and basing” and to make weekly reports
back to the Department on the Ministry’s progress. Id.; J.A.
1315–1316, Trial Tr. 91:19–92:5; 94:21–95:18 (Dec. 19,
2018).
None of these diplomatic actions amounts to a direct effect
of Iraq’s breach. A direct effect cannot have any “intervening
element” between it and the breach. Princz, 26 F.3d at 1172
(quotation marks omitted). These effects had at least three
intervening and independent elements: Wye Oak’s decision to
seek out the officials; the officials’ own decisions to act based
on Wye Oak’s overtures; and the government’s response to
those overtures. See id.; Helmerich, 784 F.3d at 818–819. The

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Agreement did not contemplate any of those actions. See
Odhiambo, 764 F.3d at 40.
Nor can we brush off those intervening elements as just
additional, but-for causes for diplomatic actions that were
inevitably triggered by Iraq’s breach. See EIG Energy, slip op.
at 13 (holding that the mere existence of “multiple but-for
causes of an injury do[es] not break the chain of causation for
any one of them”) (quotation marks omitted). Iraq broke its
promise to hand over the money in Baghdad. But then Dale
chose to fly back to the United States and petition U.S. officials
for support. Those officials independently opted to listen, and
their subsequent actions were far from a necessary
consequence of Iraq’s failure to pay. See Odhiambo, 764 F.3d
at 44 (Pillard, J., concurring in part) (“[I]n cases in which
parties engage in commercial activities abroad and a plaintiff
thereafter unilaterally decides to relocate to the United States
where he then seeks to enforce claims relating to the foreign
commercial activity, the direct-effects requirement is not
satisfied.”) (citing Peterson, 416 F.3d 83 and Zedan v.
Kingdom of Saudi Arabia, 849 F.2d 1511 (D.C. Cir. 1988)).
Wye Oak next asserts that its mission’s failure hurt U.S.
readiness to withdraw from Iraq, which impacted how
American decisionmakers in Washington approached winding
down the conflict. That argument does not hold up either.
Wye Oak’s work no doubt was an important piece of
rebuilding Iraqi military capability. Wye Oak III, 2022 WL
17820569, at *17. And Iraq’s rehabilitated military was
important to U.S. strategy because the United States anticipated
standing down its own troops as Iraq’s stood up. Id.
But that is not enough. In Princz v. Federal Republic of
Germany, 26 F.3d 1166 (D.C. Cir. 1994), a Holocaust survivor

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argued that his forced labor in German war factories had direct
effects in the United States because he was contributing to the
Nazi war effort, id. at 1168, 1172–1173. He reasoned that his
work incrementally moved the needle in making the Nazis a
more formidable foe. See id. at 1172. We rejected that
argument, holding that too “[m]any events and actors
necessarily intervened between” his work and “any effect felt
in the United States” for it to constitute a direct effect. Id.
So too here. There were too many discretionary steps
made by too many actors reacting to too many considerations
and circumstances over multiple years to be able to trace the
timing of the eventual withdrawal of American troops from
Iraq directly (or even indirectly) to Iraq’s failure to pay many
years earlier on Wye Oak’s contract. See Weltover, 504 U.S.
at 618 (holding an effect was not direct because it was “too
remote and attenuated”). Courts are particularly ill-equipped
to sort through, in the first instance, causally intertwined
matters involving complex and diplomatically sensitive
pronouncements about strategic military decisionmaking in
overseas hostilities. See Chicago & Southern Air Lines, Inc. v.
Waterman S.S. Corp., 333 U.S. 103, 111 (1948) (Foreign-
policy decisions “are delicate, complex, and involve large
elements of prophecy”; the judiciary often lacks the “aptitude,
facilities [and] responsibility” to evaluate them.); Gilligan v.
Morgan, 413 U.S. 1, 10 (1973) (“[It] is difficult to conceive of
an area of governmental activity in which the courts have less
competence” than “[t]he complex[,] subtle, and professional
decisions as to the composition, training, equipping, and
control of a military force[.]”).
In sum, the record in this case does not show the type of
direct effects in the United States from Iraq’s breach of the
Agreement that would trigger the FSIA’s commercial
exception.

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IV
Because the FSIA’s commercial exception does not apply
in this case, Iraq is immune from suit. The district court
accordingly lacked jurisdiction. We vacate its judgment and
remand for dismissal of the case.
So ordered.

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