Case: 14-10744       Document: 00513161177         Page: 1     Date Filed: 08/19/2015




            IN THE UNITED STATES COURT OF APPEALS
                     FOR THE FIFTH CIRCUIT
                                                                            United States Court of Appeals
                                                                                     Fifth Circuit


                               No. 14-10744 & 14-10953                             FILED
                                                                             August 19, 2015
                                                                              Lyle W. Cayce
                                                                                   Clerk
BLAKE BOX, doing business as Blake Box Company,

                                                  Plaintiff–Appellant,
v.

DALLAS MEXICAN CONSULATE GENERAL,

                                                  Defendant–Appellee.



                   Appeals from the United States District Court
                        for the Northern District of Texas
                             USDC No. 3:08-CV-1010


Before KING, SMITH, and ELROD, Circuit Judges.
PER CURIAM:*
           Following a dispute over a real estate venture, Blake Box sued the
Dallas Mexican Consulate General (Consulate) for breach of contract and
related claims. The district court entered a default judgment in favor of Box,
and the Consulate moved under Rule 60(b) to set aside the default judgment.
The district court vacated the default judgment, concluding that it lacked
subject matter jurisdiction under the Foreign Sovereign Immunities Act
(FSIA). Box appealed and we remanded for limited discovery on fact issues


       * Pursuant to Fifth Cir. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in Fifth
Cir. R. 47.5.4.
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                               No. 14-10744 & 14-10953
pertinent to subject matter jurisdiction under the FSIA. On remand, the
district court concluded that it had subject matter jurisdiction and reinstated
the default judgment. The Consulate then moved under Rule 59(e) for a new
trial or to reconsider the judgment, which the district court granted in part.
Because the relevant facts were established as the law of the case, and because
those facts are not jurisdictional facts, we vacate the district court’s order
granting the Rule 59(e) motion and remand for reinstatement of the default
judgment. Box also moved in the district court for additional attorney’s fees
based on his status as a prevailing party. We affirm the district court’s denial
of these additional attorney’s fees.
                                              I.
       Box, a real estate broker, worked with Ambassador Enrique Hubbard
and Mr. Hugo Juarez-Carillo (Consulate Officials) to secure a new building for
the Mexican Consulate’s Dallas office. 1 Box assisted the Consulate in locating
a suitable building, and when the seller would sell the building only as part of
a three-building package Box devised a transaction to purchase all three
buildings and spin off one of the buildings to the Consulate. Box “identified
prospective sites, enlisted contractors, met with city officials, and was involved
in negotiations.” Throughout this process, the Consulate Officials were in
contact with the Mexican government and working through the government’s
lengthy official procedures for purchasing real property.                    Whether the
Consulate Officials ever obtained actual authority to enter a joint venture with
Box, or to purchase the building, is disputed by the Consulate.




       1 The facts as recited here are those alleged in Box’s complaint and have all been
admitted for merits purposes through the Consulate’s default. See Jackson v. FIE Corp., 

, 525 (5th Cir. 2002) (explaining that a defendant, by default, admits the plaintiff’s
well-pleaded allegations of fact for purposes of the merits).
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      After Box spent extensive time on the transaction, the Consulate
partnered with a third party and purchased the same buildings in a
transaction identical to the one that Box had designed. Box sued the Consulate
for: (1) breach of contract; (2) fraud/fraudulent inducement; (3) breach of
fiduciary duty; (4) unjust enrichment; (5) quantum meruit; (6) promissory
estoppel; (7) constructive trust; (8) attorney’s fees; and (9) exemplary damages.
      The Consulate, despite being properly served, did not respond to Box’s
complaint. Box moved for a default judgment. Before entering a default
judgment, the district court assessed whether it had subject matter jurisdiction
over the case under the FSIA. Under the FSIA, foreign governments are
immune from suit subject to certain exceptions, including a “commercial
activity exception.” The district court determined that because the Consulate
Officials had apparent authority to purchase the building, the commercial
activity exception applied, and the district court had subject matter
jurisdiction over the case. The district court entered a default judgment in
favor of Box for $87,500 in value of services rendered, $6,725 in costs expended
on behalf of the Consulate, and $3,000,000 in compensation for Box’s “joint
venture interest.” The district court also awarded Box attorney’s fees and costs
in the amount of $31,464.83.
      Over five months after the entry of the default judgment, the Consulate
moved under Rule 60(b)(4) to set aside the default judgment. The district court
reanalyzed the FSIA’s commercial activity exception to determine whether the
Consulate Officials had actual authority to purchase the building. The actual
authority requirement is not contested. The district court concluded that the
Consulate Officials lacked actual authority to purchase the building and,
therefore, the commercial activity exception did not apply and the district court
lacked subject matter jurisdiction over the case. The district court granted the
Rule 60(b)(4) motion and vacated the default judgment in its entirety.
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       Box appealed. On appeal, we held that “[t]he district court abused its
discretion in not allowing limited discovery on the issue of whether the
Consulate’s officials lacked actual authority.” Box v. Dall. Mex. Consulate
Gen., 487 F. App’x 880, 887 (5th Cir. 2012) (unpublished) (Box I). We vacated
the district court’s order granting the 60(b)(4) motion and remanded for
“limited discovery” on the issue of whether the Consulate Officials had actual
authority to bind the Consulate to the transaction. 

the parties conducted discovery to determine the extent of
the Consulate Officials’ authority and the district court again addressed the
Consulate’s 60(b)(4) motion. The district court analyzed the 60(b)(4) motion to
determine whether it initially had an “arguable basis” for finding subject
matter jurisdiction and entering the default judgment.               The district court
concluded that “[t]he sole issue before the [district court was] whether the
Consulate Officials had actual authority to engage in a commercial activity—
not just whether the Consulate Officials had actual authority to purchase the
Property from Box. This lawsuit is based upon the facilitation of real estate
services and the formation of a joint venture.”
       The district court analyzed the Mexican government’s procedures for
acquisition and/or leasing of real property assets abroad and concluded that
“[t]he Mexican government indisputably authorized the Consulate to pursue
the acquisition of a [sic] the property” because “the Consulate Officials were
given full authority for all preliminary activities.” 2             The district court
distinguished between the authority to enter a joint venture and the authority
to actually purchase real property, but determined that “[it] need not reach
. . . whether [purchasing real property] falls within the scope of the Consulate



      2The district court considered the Mexican government’s specific procedures, e-mails,
and deposition testimony.
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                           No. 14-10744 & 14-10953
Officials’ actual authority, as [it] determined the general authorization given
to the Consulate for all activities leading up to the acquisition of the Property
would include the retention of Box as a real estate broker.” Because the district
court found that there was actual authority for the Consulate Officials to agree
to the transaction, the commercial activity exception applied, and the district
court had subject matter jurisdiction. The district court denied the 60(b)(4)
motion and left the default judgment in place.
      The Consulate then moved under Rule 59(e) for reconsideration, or in
the alternative, a new trial. The Consulate argued that the district court
should have: (1) evaluated its subject matter jurisdiction under a de novo
standard of review, rather than the “arguable basis” standard of review; and
(2) evaluated whether a joint venture actually existed between the parties.
      The district court agreed and concluded that it erred when it “assumed
the existence of the joint venture.” It reasoned that the existence of a joint
venture was a jurisdictional fact and that even though a defendant admits a
plaintiff’s well-pleaded allegations as true by default—as the Consulate did
here—this does not apply to jurisdictional allegations when those allegations
are disputed by admissible evidence. The district court then determined that
under Texas law the joint venture did not exist, so jurisdiction was improper.
      The district court granted the Consulate’s motion in part, vacating the
default judgment in part and ordering that Box recover only $87,500 for
services rendered and $6,725 for costs expended. The district court did not
award Box the $3,000,000 for his share of the joint venture interest or
additional attorney’s fees. Box moved to alter or amend the judgment and the
district court declined. Box then moved for attorney’s fees in the amount of
$265,315 based on his status as a prevailing party. While the motion for
attorney’s fees was pending, Box appealed the district court’s partial grant of
the Consulate’s Rule 59(e) motion. The district court subsequently denied the
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                           No. 14-10744 & 14-10953
motion for attorney’s fees and Box appealed that judgment. Both appeals were
consolidated before this court.       The Consulate cross-appealed the district
court’s judgment leaving intact the $94,225 award, but later withdrew the
cross-appeal in its response brief.
                                         II.
      The existence of subject-matter jurisdiction under the FSIA is a question
of law, reviewed de novo. UNC Lear Servs., Inc. v. Kingdom of Saudi Arabia,

, 214 (5th Cir. 2009). Whether the law-of-the-case doctrine or its
related doctrines, including the waiver doctrine, foreclose any of the district
court’s actions on remand is also a question of law that this court reviews de
novo. Med. Ctr. Pharm. v. Holder, 

, 834 (5th Cir. 2011).
                                        III.
      Box argues that the district court erred for three reasons: (1) a joint
venture existed under the law of the case, thus the district court could not
reexamine this fact; (2) on remand, the district court impermissibly went
beyond the scope of our mandate; and (3) the existence of a joint venture is a
merits question, not a jurisdictional fact.
      The law-of-the-case doctrine provides that ordinarily “an issue of fact or
law decided on appeal may not be reexamined either by the district court on
remand or by the appellate court on a subsequent appeal.” Demahy v. Schwarz
Pharma, Inc., 

, 184 (5th Cir. 2012) (internal quotation marks
omitted). Box contends that the existence of the joint venture became the law
of the case after Box I because the Consulate failed to raise or brief the non-
existence of a joint venture in Box I and our decision in Box I recognized the
existence of the joint venture. The Consulate argues that it never conceded
the existence of a joint venture and that we did not address the existence of a
joint venture in Box I. The Consulate also argues that as the appellee in Box
I, it had no obligation to challenge the joint venture’s existence because it was
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                                No. 14-10744 & 14-10953
only defending the ruling below, which Box only challenged on the issue of
actual authority.
       In Box I, the Consulate’s briefing repeatedly refers to the joint venture
as the “alleged” joint venture and maintains its non-existence. However, the
Consulate’s arguments only addressed whether there was actual authority for
the joint venture; they did not directly attack its existence. The Consulate
never argued that the joint venture’s non-existence defeated subject matter
jurisdiction. The only issue in Box I was whether the Consulate Officials had
actual authority to agree to the transaction.                   Whether subject matter
jurisdiction existed turned only on the actual authority issue.
       As for the Consulate’s argument that as appellee it did not need to raise
the issue in Box I, the Consulate raised numerous challenges to the district
court’s jurisdiction in Box I, including a lack of personal jurisdiction based on
flawed service and “multiple meritorious defenses” that we considered and
rejected.     Despite raising multiple arguments regarding subject matter
jurisdiction during Box I, the Consulate chose not to raise this one. Moreover,
the Consulate did not raise its lack-of-joint-venture-as-jurisdictional-fact
argument in its initial 60(b)(4) motion before the district court.
       Our opinion in Box I treated actual authority as the only jurisdictional
issue to be addressed on remand. Nothing in either the district court’s 60(b)(4)
order or our opinion in Box I considered the existence of the joint venture as a
contested jurisdictional fact. For these reasons, the existence of a joint venture
for jurisdictional purposes became the law of the case after Box I. 3



       3  Even if the existence of a joint venture is a jurisdictional fact, subject matter
jurisdiction does not create an exception to the law-of-the-case doctrine. See Free v. Abbott
Labs., Inc., 

, 272–73 (5th Cir. 1999) (citing Ferreira v. Borja, 

, 674
(9th Cir. 1996) cert. denied, 

(1997) (“Surely a court that has decided that it has
jurisdiction is not duty-bound to entertain thereafter a series of repetitive motions to dismiss
for lack of jurisdiction.”)).
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                           No. 14-10744 & 14-10953
      Box next asserts that the district court exceeded its authority under our
mandate in Box I when it reconsidered the joint venture’s existence. The
mandate rule relates closely to the law-of-the-case doctrine.        Under the
“mandate rule,” on remand the district court “must implement both the letter
and the spirit of the appellate court’s mandate and may not disregard the
explicit directives of that court.” 

(internal quotation
marks omitted). On remand, a district court may only “consider whatever this
court directs—no more, no less. All other issues not arising out of this court’s
ruling and not raised before the appeals court, which could have been brought
in the original appeal, are not proper for reconsideration by the district court
below.” United States v. Marmolejo, 

, 531 (5th Cir. 1998). In
Marmolejo, we cited “justice as well as judicial economy” as the reasons to
“require a defendant to raise all relevant and appealable issues at the original
[proceeding].” 

I, the “discrete issue [on remand was whether] Hubbard and
Juarez were authorized to purchase the consulate building, which if true would
establish FSIA jurisdiction.” 487 F. App’x at 885. The Consulate argues that
“[a]bsent limitation in the remand, the district court [is] free to admit
additional evidence and conduct all necessary review of the claims on any
grounds before it.” See United States v. Wilson, 

, 360 (5th Cir.
2003). Wilson addressed whether the district court may consider additional
evidence to decide a question on remand. Here, the district court considered
an entirely new question. We remanded Box I “because actual authorization is
a discrete issue conducive to limited discovery” and “[t]he district court abused
its discretion in not allowing limited discovery on the issue of whether the
Consulate’s officials lacked actual authority.” 487 F. App’x at 885, 887. While
consideration of additional evidence was appropriate, nothing in Box I gave the


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                                No. 14-10744 & 14-10953
district court permission to extend its inquiry beyond the question of the
Consulate Officials’ authority. 4
       Even assuming arguendo that the district court was permitted to
consider the existence of a joint venture on remand, the existence of a joint
venture is not a jurisdictional fact. 5 Federal claims litigation and admiralty
law both provide useful analogies because in both areas a district court must
often determine jurisdictional facts prior to addressing the merits of a claim.
Box cites Pure Power!, Inc. v. United States, 

, 742 (Fed. Cl. 2006)
and S.C. State Ports Auth. v. Silver Anchor, S.A., 

, 847 (4th Cir.
1994) (Silver Anchor II) in support. In Pure Power!, the government defendant
argued that the Court of Federal Claims, a court of limited jurisdiction, lacked
jurisdiction over the plaintiff’s contract claim because there was no contract.
Pure Power! held that “if the existence of a contract is well-pleaded, the court
has the jurisdiction to determine, on the merits, if a valid contract actually
exists” and “a claim is not beyond the subject matter jurisdiction of the [court]
merely because the [defendant] asserts that it never had a contract with the

. Put another way, the district court does not lack
jurisdiction to determine whether a contract exists simply because the ultimate
answer is that it does not.



       4 S.C. State Ports Auth. v. Silver Anchor, S.A., 

, 847 (4th Cir. 1994) (Silver
Anchor II), discussed infra regarding the jurisdictional question, is also analogous on the
scope-of-the-mandate 

(“[W]e note that our [previous opinion] was
premised on the assumption that there was a contract between [the parties]. We instructed
the district court to determine only whether that contract was maritime or non-maritime in
nature. We did not instruct the lower court to engage in a freewheeling inquiry about
whether any contract even existed.”).

       5  The parties dispute whether the district court should have employed a de novo
standard of review for assessing subject matter jurisdiction on a Rule 60(b)(4) motion or
review for whether the court had “any arguable basis” for exercising subject matter
jurisdiction. Because we hold that the district court properly had subject matter jurisdiction
under either standard, we express no opinion as to the proper standard of review.
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                           No. 14-10744 & 14-10953
      Silver Anchor II is also persuasive. In Silver Anchor II, the district court
dismissed a maritime contract case on the basis that there was no contract
because there was no personal guaranty of payment from the defendant, a
required contract component. The Fourth Circuit held that the existence of “a
personal guaranty [was] dispositive on the merits,” so “[t]o the extent that [the
defendant] was challenging the court’s jurisdiction on the ground that he gave
no personal guaranty, he was also challenging the very existence of the
[plaintiff’s] cause of 

. Similarly here, because the
Consulate challenges subject matter jurisdiction on the ground that there was
no joint venture, the Consulate is also challenging the very existence of Box’s
cause of action.
      The Consulate attempts to distinguish Silver Anchor II because in Silver
Anchor II “the existence of a contract went so much to the heart of the merits
that it would be unfair to adjudicate it at the motion to dismiss stage,” whereas
here, the Consulate “is seeking to set aside a default judgment under Rule
60(b)(4) after the underlying merits have been established.” If anything, this
distinction weighs in favor of Box. In Silver Anchor, the court held that it was
improper to dismiss the case for what was essentially a merits issue in “the
guise of a jurisdictional dispute, much to [the] advantage” of the defendant,
before reaching the motion to dismiss or summary judgment stage, where the
facts would be viewed in the light most favorable to the plaintiff. Here, it is
not just that the facts would be viewed in the light most favorable to Box in
later proceedings, but they have been conclusively admitted through the
Consulate’s default.
      The Consulate next argues that the district court may always determine
the jurisdictional facts as necessary to determine if it has jurisdiction, even if
those facts have been admitted by a default for purposes of the merits inquiry.
This is correct—the district court must decide whether it has jurisdiction and
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                            No. 14-10744 & 14-10953
must weigh evidence and assess the merits insofar as they weigh on
jurisdiction—but that is not the issue here. That the district courts must
answer jurisdictional questions does nothing to determine exactly which
questions are jurisdictional. The Consulate relies heavily upon Jackson v. FIE
Corp., 

(5th Cir. 2002) and Moran v. Kingdom of Saudi Arabia, 

(5th Cir. 1994) to argue that “facts presumed for purposes of the
merits of the default can be revisited in the context of subject matter
jurisdiction,” and “at least in the context of the FSIA, those factual
determinations can extend to the merits.” The Consulate seeks more from
Jackson and Moran than they give. Both cases stand for the proposition that
a district court is not barred from deciding a jurisdictional fact simply because
that fact is intertwined with, or also is, a merits fact. But this does not support
treating otherwise exclusively merits facts as part of the jurisdictional inquiry,
nor does it have any relevance to the question of whether the joint venture’s
existence is a jurisdictional fact under the FSIA.
      In Jackson, after a default judgment was entered against a foreign gun
manufacturer, the manufacturer moved under Rule 60(b)(4) to vacate the
judgment, arguing that the district court had lacked personal jurisdiction over
the defendant manufacturer because under Louisiana’s long-arm statute the
defendant must have placed the gun in the stream of commerce for personal
jurisdiction to be 

. We held that a fact’s admission by
default for merits’ purposes does not automatically admit that fact for
jurisdictional purposes and remanded for a determination of the jurisdictional
question of whether the defendant put the gun into the stream of commerce.

Jackson merely says that a district court must assess jurisdictional
facts to determine if jurisdiction is proper, even if those facts are admitted by
default for merits’ purposes.      Jackson sheds no light upon whether the
existence of a joint venture is a jurisdictional fact here.
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      In Moran, a FSIA case, the plaintiff sued the Kingdom of Saudi Arabia
following a Mississippi car accident with two Saudi government personnel.
Under the relevant law, Saudi Arabia was only subject to jurisdiction under
the FSIA if the officials were acting within the scope of their employment at
the time of the 

. Whether the officials were acting
within the scope of their employment also bore on the merits of the case. The
district court concluded that the officials were not acting within the scope of
their employment and therefore dismissed the case because the court lacked
jurisdiction under the FSIA. 

that the district court acted properly
by resolving Saudi Arabia’s 12(b)(1) motion “before other challenges since the
court must find jurisdiction before determining the validity of a claim.” 

(internal quotation marks omitted).
      The Consulate argues that the question of whether a joint venture
existed is analogous to the question of whether the officials in Moran were
acting within the scope of their employment, but the Consulate overreads
Moran. The question of whether the Saudi officials were acting within the
scope of their employment, unlike the question of the existence of the joint
venture here, was a required part of the jurisdictional analysis. Here, the FSIA
exception applies to an “action [that] is based upon a commercial activity.” 28
U.S.C. § 1605(a)(2). The analogous attack here would be that, for instance, the
activity was not commercial, not that the activity did not occur.          Moran
demonstrates that jurisdictional facts will sometimes overlap with merits
inquiries, but cannot be stretched to redefine what is jurisdictional in the first
instance.
      The Consulate insists that the Consulate Officials logically could not
have authority to enter a joint venture that did not exist, but this is incorrect.
It is entirely plausible that, for example, a government could give officials
actual authority to spend a certain dollar amount to acquire a building, with
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                          No. 14-10744 & 14-10953
no further oversight. In such a scenario, there would be no question that the
officials had actual authority to enter into a contract within those particular
parameters. Whether the officials actually did enter a contract would be an
entirely different question.   As an alternative example, if the Consulate
Officials had authority to purchase a building within Dallas city limits, or
within a certain time frame, actual authority would exist—a separate question
from whether the Consulate Officials exercised that authority. Because the
authorization process here occurred contemporaneously with the creation of
the joint venture, the Consulate attempts to conflate the two issues. But
whether the Consulate Officials had authority from the Mexican government
to form a joint venture is a separate question from whether they exercised that
authority in their dealings with Box. Simply put, here, the first question was
answered by the district court on remand in Box I and the second question was
defaulted by the Consulate.
                                      IV.
      In Box’s second appeal, he appeals the denial of his additional attorney’s
fees in the amount of $265,315. We review the factual findings supporting the
grant or denial of attorney’s fees for clear error and the conclusions of law
underlying the award de novo. T.B. ex rel. Debbra B. v. Bryan Indep. Sch. Dist.,

, 243 (5th Cir. 2010). The district court’s interpretation of a
statute is a question of law reviewed de novo. 

that he was entitled to additional attorney’s fees under
Chapter 38 of the Texas Civil Practice and Remedies Code based on his status
as a prevailing party. The Consulate responded that Box was not entitled to
attorney’s fees because Chapter 38 does not provide for attorney’s fees against
foreign governments. The district court agreed with the Consulate and denied
the motion.


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      We agree with the Consulate and the district court that Chapter 38 does
not entitle Box to the $265,315 in attorney’s fees. Chapter 38 specifically
permits recovery of attorney’s fees from an “individual or corporation” on
certain types of claims. Tex. Civ. Prac. & Rem. Codes § 38.001. A foreign
government or a foreign government’s agent or instrumentality is not covered
by the plain text of the statute.     See 

courts have
interpreted the provision to prohibit collection of attorney’s fees from
municipal governments, specifically citing the statute’s word choice excluding
government entities. See, e.g., City of Corinth v. NuRock Dev., Inc., 

, 370 (Tex. App.—Fort Worth 2009, no pet.); Dall. Area Rapid Transit v.
Plummer, 

, 875 (Tex. App.—Dallas 1992, writ denied). Neither
the plain text of § 38.001 nor the Texas courts’ interpretation of it permits a
party to recover attorney’s fees from a foreign governmental entity. Thus, the
district court correctly denied Box’s motion for $265,315 in additional
attorney’s fees.
                                      V.
      For the foregoing reasons, the district court’s order granting the
Consulate’s Rule 59(e) motion and revised judgment is VACATED. This case
is REMANDED with instructions to the district court to REINSTATE the
original default judgment in full.    The district court’s order denying Box
additional attorney’s fees is AFFIRMED.




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