[PUBLISH]


                  IN THE UNITED STATES COURT OF APPEALS
                                                                               FILED
                            FOR THE ELEVENTH CIRCUIT COURT OF APPEALS
                                                     U.S.
                             ________________________ ELEVENTH CIRCUIT
                                                                         AUGUST 9, 2010
                                     No. 09-14359                          JOHN LEY
                               ________________________                      CLERK


                          D.C. Docket No. 08-20198-CV-CMA

WORLD HOLDINGS, LLC,
a Florida Limited Liability Company,


                                                                            Plaintiff-Appellee,

                                            versus

THE FEDERAL REPUBLIC OF GERMANY,
a foreign state,

                                                                        Defendant-Appellant.


                               ________________________

                      Appeal from the United States District Court
                          for the Southern District of Florida
                            _________________________

                                       (August 9, 2010)

Before CARNES, ANDERSON and STAHL,* Circuit Judges.

       *
         Honorable Norman H. Stahl, United States Circuit Judge for the First Circuit, sitting by
designation.
STAHL, Circuit Judge:

               This case arises from efforts by Plaintiff-Appellee, World Holdings,

LLC ("World Holdings"), to obtain payment on certain bonds issued by Appellant,

the Federal Republic of Germany ("Germany"). Germany now appeals the denial

of its motion to dismiss for lack of subject matter jurisdiction. After a careful

review, we affirm.

                                 I. Facts and Background1

               In 1924, Germany offered for subscription in the United States $110

million of bearer bonds, called "Dawes Bonds," which were listed on the New

York Stock Exchange and payable in U.S. gold dollars in New York City at the

offering fiscal agent in the United States. In 1930, Germany offered for

subscription in the United States $98.25 million of a second type of bearer bond,

called "Young Bonds." The Young Bonds were also listed on the New York Stock

Exchange and payable in New York City.

               Both the Dawes Bonds and the Young Bonds were backed by the full

faith and credit of Germany and required Germany to maintain sinking funds from



       1
         As when reviewing a Rule 12(b)(6) motion to dismiss for failure to state a claim, we
construe the complaint in the light most favorable to the plaintiff and accept all well-pled facts
alleged in the complaint as true. Sinaltrainal v. Coca-Cola Co., 

, 1260 (11th Cir.
2009).

                                                 2
various revenue sources. According to World Holdings, Germany discontinued

payments to the sinking funds in June 1933. By July 1934, Germany had ceased

making interest payments on both the Young Bonds and the Dawes Bonds.

Though Germany was in default of its obligations under the Bonds, the outbreak

of World War II made impossible any demands for payment or pursuit of remedies

under the Bonds.

              Following the war, Germany affirmed its pre-war liabilities, including

the Dawes and Young Bonds. A payment plan was negotiated at the Conference

on German External Debts in London, and on February 27, 1953, Germany, the

United States, and seventeen other nations signed the London Debt Agreement

("LDA"),2 which resulted in a proposed settlement of most of Germany's pre-

World War II debts, including the Bonds.3 Also in 1953, a series of measures

were enacted relating to the London Debt Agreement. One of those measures is

the Agreement Between the United States of America and the Federal Republic of



       2
         Agreement on German External Debts, Feb. 27, 1953, 4 U.S.T. 443. World Holdings
states that the United States and Germany signed the LDA along with fifteen other nations, but
we take judicial notice of the statement in the LDA's preamble that seventeen other nations
signed the Agreement. 

1.
       3
        According to World Holdings, bondholders could decline to accept the offer of
settlement under the London Debt Agreement. World Holdings admits, and Germany agrees,
that World Holdings did not accept the terms of the LDA. According to World Holdings, the
LDA does not provide clear treatment for non-accepting bondholders like itself.

                                               3
Germany Regarding Certain Matters Arising from the Validation of German

Dollar Bonds (the "1953 Treaty"), Apr. 1, 1953, 4 U.S.T. 885.

             In the 1953 Treaty, the United States and Germany "agreed that it is

in their common interest to provide for the determination of the validity of German

dollar bonds in view of the possibility that a large number of such bonds may have

been unlawfully acquired during hostilities in Germany or soon thereafter." 4

U.S.T. 885, pmbl., para. 2. Another agreement signed in conjunction with the

LDA, the Agreement Between the Government of the United States of America

and the Government of the Federal Republic of Germany Regarding the Validation

of Dollar Bonds of German Issue (the "Agreement on Validation Procedures"),

Feb. 27, 1953, 4 U.S.T. 797, provided the procedures by which a bondholder

might validate his bonds. The 1953 Treaty explicitly references the Agreement on

Validation Procedures and provides:

      No bond, coupon, dividend warrant, renewal certificate, subscription
      warrant or other secondary instrument . . . shall be enforceable unless
      and until it shall be validated either by the Board for the Validation of
      German Bonds in the United States established by the Agreement on
      Validation Procedures, or by the authorities competent for that purpose
      in the Federal Republic.

4 U.S.T. 885, art. II.




                                         4
              In order for a bondholder to satisfy the validation requirement of the

1953 Treaty, he must show, by reference to evidence, that his Bonds were held

outside Germany on January 1, 1945. According to World Holdings, the

validation requirement came about due to a "stolen bond theory," as described in

Abrey v. Reusch, 

(S.D.N.Y. 1957):

             After the First World War, and principally between 1924 and
      1930, a large number of bearer Dollar Bonds were sold by German
      enterprises. . . . Prior to the outbreak of the Second World War, many of
      these Dollar Bonds had been repurchased and reacquired by the issuers
      for eventual retirement, and later submitted to meet sinking fund and
      amortization requirements. Such reacquired bonds were retained in
      Germany and no longer represented valid obligations.
             During the Second World War, it was impossible to present such
      bonds to the American trustees or paying agents for cancellation. As a
      consequence, large numbers of these uncancelled bearer Dollar Bonds,
      in negotiable form, were held in the vaults of German banks.
             After the surrender of Germany, Russian occupation forces seized
      the uncancelled, negotiable Dollar Bonds which they found in the
      German bank vaults within the area of their control. The face amount
      of such bonds has been estimated at $350,000,000. These looted bonds
      were returned to circulation by the Russians.
             At the same time, other German Dollar Bonds, amounting to
      about $250,000,000, were in the legitimate possession of their bona fide
      purchasers. There was thus a real possibility that the eventual holders
      of the looted bonds would share the available assets (limited available
      foreign exchange) of the German obligors equally with the legitimate
      bondholders, a large number of whom were nationals of the United
      States. Moreover, the free and open trading in the United States of all
      German Dollar Bonds was impeded by the uncertainties arising from the
      situation described above.

                                          5
               World Holdings currently owns or controls a significant number of

Dawes and Young Bonds in the original principal amount of $1,000 and $100

denominations. In December 2007, World Holdings demanded payment of its

Bonds in a letter sent to Angela Merkel, Chancellor of Germany, and several

ministers of Germany; Germany did not respond.

               Germany has maintained that the Bonds must be submitted for

validation before they can be paid. World Holdings states that no Validation

Board is currently in existence.4 World Holdings further claims that it is not

subject to the validation requirement.5

               World Holdings filed this action on January 23, 2008. In its

Amended Complaint, World Holdings charges Germany with breach of contract

based on Germany's alleged default of its obligation to pay the outstanding

principal and accrued interest on World Holdings' Dawes and Young Bonds.

               Germany moved to dismiss for lack of subject matter jurisdiction on

the ground that World Holdings' failure to register its bonds and submit them for

validation is fatal to its claims. Specifically, Germany argued that the 1953 Treaty

       4
         Germany, for its part, maintains that such an authority (the "Examining Authority") has
existed in Germany without interruption since 1952 and that World Holdings has not contacted
the Examining Authority with any request to validate its bonds.
       5
        World Holdings has argued below that those who did not accept the terms of the LDA
need not validate their bonds.

                                                6
precluded an enforcement action in United States courts on bonds that have not

been validated.

               The district court denied the motion, finding that it had subject matter

jurisdiction over the action under the commercial-activity exception to the Foreign

Sovereign Immunities Act ("FSIA" or the "Act"), 28 U.S.C. § 1602, et seq. This

appeal followed.6

                                          II. Analysis

A.

               We review de novo the district court's decision to deny the motion to

dismiss for lack of subject matter jurisdiction. 

.

B.

               The FSIA, enacted in 1976, years after the 1953 Treaty, "establishes a

comprehensive framework for determining whether a court in this country, state or

federal, may exercise jurisdiction over a foreign state." Republic of Argentina v.

Weltover, Inc., 

, 610 (1992). Under the Act, a foreign state "shall be


       6
         We have jurisdiction to hear the appeal. "It is well-settled that a court of appeals has
jurisdiction over interlocutory orders denying claims of immunity under the FSIA." Butler v.
Sukhoi Co., 

, 1311 (11th Cir. 2009) (citing O'Bryan v. Holy See, 

,
372 (6th Cir. 2009)). Germany argued below that it is, in effect, immune from suit under the
FSIA and the 1953 Treaty, as the Act is subject to the terms of the 1953 Treaty. Thus, we have
jurisdiction over Germany's assertion of sovereign immunity under the 1953 Treaty (pursuant to
the FSIA's "treaty exception") despite the lack of a final judgment in this case. 

from the jurisdiction of the courts of the United States and of the States"

unless one of several statutorily defined exceptions applies. 

(emphasis in original). As the Supreme Court has held, "the FSIA [is] the sole

basis for obtaining jurisdiction over a foreign state in our courts." Argentine

Republic v. Amerada Hess Shipping Corp., 

, 434 (1989).

             Among the FSIA's exceptions to immunity is the commercial-activity

exception of section 1605(a)(2), which provides that a foreign state shall not be

immune from suit 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.

28 U.S.C. § 1605(a)(2). Germany concedes that its issuance and sale of bonds in

the United States brings it within the commercial-activity exception to the FSIA's

grant of immunity.

             Despite the application of this exception, Germany argues that it is

nonetheless immune from suit. The FSIA was adopted "[s]ubject to existing

international agreements to which the United States [was] a party at the time of




                                          8
[the FSIA's] enactment." 28 U.S.C. § 1604.7 The "subject to" clause, to which we

will refer as the "treaty exception," "applies when international agreements

'expressly conflic[t]' with the immunity provisions of the FSIA." Amerada 

(quoting H.R. Rep. No. 94-1487, at 17 (1976), reprinted in 1976

U.S.C.C.A.N. 6604, 6616) (alteration in original).8 If there is an express conflict

between the FSIA and such an agreement regarding the amenability of a

contracting state to suit in the United States courts, the international agreement

prevails. See Moore v. United Kingdom, 

, 1085 (9th Cir. 2004); see

also H.R. Rep. No. 94-1487, at 17.




       7
        The full text of section 1604 provides:
       Subject to existing international agreements to which the United States is a party
       at the time of enactment of this Act 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.
28 U.S.C. § 1604.
       8
         We need not decide whether the "subject to" language applies only to abrogate immunity
where it may otherwise exist under the FSIA, or whether an existing international agreement may
alternatively preserve a foreign sovereign's immunity from the jurisdiction of United States
courts where the foreign sovereign's conduct otherwise falls under an exception to immunity in
the FSIA. See World Holdings, LLC v. Federal Republic of Germany, 08-cv-20198-CMA, Dkt.
# 139, at 10 n.11. For the purposes of this case, we presume that it may, because even assuming
that the commercial-activity exception of section 1605 is "subject to" existing international
agreements, the 1953 Treaty does not expressly conflict with the commercial-activity exception,
and thus does not preserve Germany's immunity here.

                                                 9
                 The international agreement to which Germany points is the 1953

Treaty, adopted many years prior to the enactment of the FSIA. Article II of the

treaty states:

       No bond, coupon, dividend warrant, renewal certificate, subscription
       warrant or other secondary instrument referred to in the first sentence of
       Article I above shall be enforceable unless and until it shall be validated
       either by the Board for the Validation of German Bonds in the United
       States established by the Agreement on Validation Procedures, or by the
       authorities competent for that purpose in the Federal Republic.

4 U.S.T. 885, art. II (emphasis added). Our task is to determine whether the 1953

Treaty expressly conflicts with the immunity provisions of the FSIA, specifically,

the commercial-activity exception which serves to abrogate Germany's immunity.

                 In so doing, we look to Amerada Hess for guidance. We note at the

outset that Amerada Hess presented a slightly different question than this case.

There, the Court had found that none of the exceptions enumerated in section 1605

applied to abrogate Argentina's sovereign immunity. Amerada 

. Thus, when considering the treaty exception, the Court was evaluating the

plaintiff's claim that the "subject to" language extended jurisdiction where it

otherwise did not exist. In finding that it did not, the Court explained that the

treaties at issue did not "create private rights of action for foreign corporations to

recover compensation from foreign states in United States courts." 

                                           10
Rather, they "only set forth substantive rules of conduct and state[d] that

compensation shall be paid for certain wrongs." 

words, the treaties at

issue did not expressly conflict with the FSIA because they did not speak to the

issue of sovereign immunity.

               Here, as the district court found, Article II is silent on the question of

immunity. Germany would have us read Article II to say that "a plaintiff cannot

bring an action in the courts of the United States to enforce its rights under its

bonds unless and until it has validated its bonds," but that meaning is not apparent

from the language of the treaty.9 Though Article II states that no bond "shall be

enforceable unless and until it shall be validated," that does not necessarily mean

that a plaintiff may not bring a legal action in the United States courts to seek

enforcement of a bond that has not been validated. In the absence of such an

express conflict, we find that the "treaty exception" does not apply.


       9
         Interestingly, the Second Circuit in a very recent opinion rejected Germany's argument
that the commercial-activity exception would not abrogate its immunity when the plaintiff
bondholder had failed to comply with the LDA's validation procedures. The court stated:
        We are unpersuaded that non-compliance with the validation procedures
        undermines the applicability of the commercial activity exception to the FSIA.
        The issue of whether [the plaintiff] complied with the validation procedures does
        not touch upon any of the requirements of the commercial activity exception,
        which is concerned with the conduct of the foreign state and not the allegedly
        aggrieved party. . . . Taking up the validation issue at the jurisdictional stage
        would thus be premature.
Mortimer Off Shore Services, Ltd. v. Federal Republic of Germany, --- F.3d ----, 

, at *9 (2d Cir. Jul. 26, 2010).

                                               11
              Germany also points us to the Preamble of the 1953 Treaty,10 which

states, in part:

       [T]he United States and the Federal Republic agree that further measures
       are required to permit debtors and creditors to proceed to the orderly
       settlement of the obligations arising from German dollar bonds with
       confidence in the stability of the procedures regarding validation and
       with assurance that claims prejudicial to such settlement will not be
       asserted on the basis of bonds which were unlawfully acquired.

4 U.S.T. 885, pmbl., para. 5 (emphasis added). While this portion of the preamble

amplifies the language of Article II that "[n]o bond . . . shall be enforceable unless

and until it shall be validated," like Article II, it does not specifically address the

issue of immunity from suit in United States courts. Following the reasoning of

Amerada Hess, this language is, in effect, "stat[ing] that compensation shall [not]

be paid" for certain bonds. See 

at 442. It is not explicitly expressing

an intent to deny claimants access to United States courts to determine whether

their bonds are enforceable. Again, as Amerada Hess requires, unless a treaty

expressly conflicts with the FSIA's immunity provisions, the FSIA controls, and

there is no express conflict here.



       10
          The language of a treaty must be read in context in light of the treaty's object and
purpose, see In re Commissioner's Subpoenas, 

, 1294 (11th Cir. 2003) (abrogated,
in part, on other grounds, by Intel Corp. v. Advanced Micro Devices, Inc., 

, 253
(2004)), and the "context" of a treaty includes its preamble. Gandara v. Bennett, 

,
827 (11th Cir. 2008).

                                              12
               Because we find that the plain language of the 1953 Treaty does not

expressly conflict with the FSIA, we do not, and need not, consider the legislative

history offered by Germany in support of its position.11

                                         III. Conclusion

               As we find that the treaty exception does not apply, and the parties

have agreed that the commercial-activity exception does apply, we find that



       11
          We note that the legislative history that Germany cites is taken from a "Message from
the President of the United States Transmitting" the LDA and the 1953 Treaty, among others, for
ratification to the Senate ("Message"). The portion of the Message cited by Germany is
contained in "Enclosure 7(d)" ("Summary of Validation Law and Implementing Agreements"),
appended to a letter from Secretary of State John Foster Dulles to President Eisenhower
discussing the agreements submitted for ratification. Germany has argued that the Message
reflects the State Department's (and Executive Branch's) interpretation of the 1953 Treaty, and as
such is entitled to "great weight." See Sanchez-Llamas v. Oregon, 

, 355 (2006)
(quoting Kolovrat v. Oregon, 

, 194 (1961)). But the Supreme Court has never
instructed that a court give "great weight" to the State Department's or Executive's interpretation
when the court's singular task is to determine whether a treaty expressly conflicts with the FSIA.
And as we can conclude from the plain language of the 1953 Treaty, read in context, that there is
no express conflict, we need not resort to extraneous sources. See In re: Commissioner's

(Only "if the treaty text is ambiguous when read in context in light
of its object and purpose, then extraneous sources may be consulted to elucidate the parties'
intent from the ambiguous text.") (citing Chan v. Korean Air Lines, Ltd., 

, 134
(1989)).
         Moreover, even if we were to consider the Message in our analysis, we find that when it
is considered in its entirety, it is inconclusive as to the view of the State Department on the rights
of bondholders who did not accept the LDA's offer of settlement to resort to United States courts.
See Enclosure 7(a) ("Summary of Agreement on German External Debts and Its Annexes"), at
204. Thus, the Message does not alter our conclusion that the 1953 Treaty does not expressly
conflict with the immunity provisions of the FSIA. Cf. Sumitomo Shoji America, Inc. v.
Avagliano, 

, 184-85 n.10 (1982) (giving "great weight" to the position of the State
Department after noting that "[h]owever ambiguous the State Department position may have
been previously," the Department's current interpretation was "beyond dispute" in light of an
amicus brief filed in the case by the United States).

                                                 13
Germany is not immune from suit and affirm the district court's denial of

Germany's motion to dismiss for lack of subject matter jurisdiction.12

               We advise that this is not a decision as to whether World Holdings'

bonds are, in fact, enforceable. We hold merely that the district court has the

authority to decide that issue. The court may yet determine that World Holdings'

failure to comply with the validation requirement of Article II renders its bonds

unenforceable.13 And, in fact, we expect that the district court will decide the

issue of the applicability of Article II's validation requirement to World Holdings'

bonds at the earliest possible opportunity.

               AFFIRMED.




       12
         This result means that we need not consider World Holdings' argument that Germany
waived its affirmative defense of immunity by failing to specially plead immunity in its Answer.
Alternatively, we do not consider the argument because it was raised for the first time on appeal.
See Calzadilla v. Banco Latino Internacional, 

, 1287 (11th Cir. 2005).
       13
          See, e.g., Mortimer Off Shore Services, Ltd. v. Federal Republic of Germany, No. 05
Civ. 10669(GEL), 

, at *6, *11 (S.D.N.Y. Sept. 27, 2007) (aff'd by --- F.3d ----,

, at *9 (2d Cir. Jul. 26, 2010)). In Mortimer, the district court held that the
FSIA's commercial-activity exception applied to abrogate Germany's immunity, but then held
that plaintiff's bonds were unenforceable because of a failure to comply with the bond validation
procedures.

                                                14