D.C. Circuit Affirms Denial Of Motion To Dismiss Lawsuit Seeking Monetary Relief For Venezuelan State-Owned Company’s Expropriation Of U.S. Company’s Wholly Owned Venezuelan Subsidiary
Client Alert | October 9, 2025
Helmerich & Payne International Drilling Co. v. Petroleos de Venezuela, S.A. & PDVSA Petroleo, S.A., No. 24-7161 – Decided October 3, 2025
On October 3, Gibson Dunn secured a significant victory when the United States Court of Appeals for the D.C. Circuit rejected a Venezuelan state-owned energy company’s (PDVSA) claim of sovereign immunity in an international takings suit by a United States energy company, seeking to hold PDVSA liable for Venezuela’s nationalization of the U.S. company’s Venezuelan subsidiary. The D.C. Circuit also rejected PDVSA’s personal jurisdiction and act-of-state defenses.
“[T]he [Foreign Sovereign Immunities Act’s] expropriation exception applies because (1) Venezuela indirectly took Helmerich’s property in violation of international law, (2) PDVSA owns and operates that property, and (3) PDVSA engages in commercial activity in the United States.’”
Katsas, J., writing for the Court
Background
This case arises out of Venezuela’s nationalization of a United States energy company’s wholly owned Venezuelan subsidiary. Helmerich & Payne International Drilling Co. (“Helmerich”) is a U.S.-based company that wholly owns a Venezuelan subsidiary (“Helmerich-Venezuela”). Helmerich-Venezuela for decades provided oil drilling services in Venezuela to Petróleos de Venezuela, S.A. (PDVSA), a Venezuelan energy company wholly owned by the Bolivarian Republic of Venezuela. Helmerich-Venezuela owned various property in Venezuela, including large rigs suitable for drilling oil and gas wells there. In the early 2000s, however, PDVSA began defaulting on its contractual obligations to Helmerich-Venezuela. Helmerich thus announced in 2009 that it would wind down its Venezuelan operations and remove Helmerich-Venezuela’s drilling rigs from Venezuela.
Venezuela responded by sending PDVSA employees and the Venezuelan National Guard to blockade Helmerich-Venezuela’s drilling operations and to prevent removal of the rigs. The Venezuelan National Assembly issued an official declaration recommending that the property be expropriated for the “public benefit and good.” And President Hugo Chávez issued a “Decree of Expropriation” ordering Helmerich-Venezuela to transfer the rigs to PDVSA under a Venezuelan “Law of Expropriation.” PDVSA then began using Helmerich-Venezuela’s rigs and other assets to drill.
Helmerich sued PDVSA in U.S. district court, alleging that Venezuela had unlawfully expropriated its property. PDVSA moved to dismiss. PDVSA principally asserted that, as a sovereign instrumentality, it was immune from suit under the Foreign Sovereign Immunities Act (“FSIA”).
In a previous appeal, following a trip to the U.S. Supreme Court, the D.C. Circuit held that Helmerich had sufficiently alleged that one of the FSIA’s exceptions to immunity—the expropriation exception—applied on the theory that Venezuela had violated international law by expropriating (1) Helmerich’s ownership interest in its subsidiary and (2) its right under Venezuelan law to control the subsidiary’s disposition of the expropriated assets. The court of appeals remanded for further factfinding on those theories and consideration of PDVSA’s other asserted grounds for dismissal.
On remand, the district court found Helmerich’s evidence sufficient to uphold jurisdiction under the expropriation exception. The district court also rejected PDVSA’s remaining defenses for lack of personal jurisdiction and under the act-of-state doctrine. PDVSA’s present appeal followed.
Issues Presented
- Did the district court have subject-matter jurisdiction over Helmerich’s international takings claim under the FSIA’s expropriation exception, 28 U.S.C. § 1605(a)(3)?
- Did the district court have personal jurisdiction over PDVSA?
- Does the Second Hickenlooper Amendment, 22 U.S.C. § 2370(e)(2), bar PDVSA’s act-of-state defense?
Court’s Holding
Yes, across the board. The D.C. Circuit affirmed the denial of PDVSA’s motion to dismiss, holding that the district court had both subject-matter jurisdiction over this case and personal jurisdiction over PDVSA, and that PDVSA’s act-of-state defense failed on the merits.
1. As to the FSIA’s expropriation exception, the D.C. Circuit held that “the expropriation exception applies because (1) Venezuela indirectly took Helmerich’s property in violation of international law, (2) PDVSA owns and operates that property, and (3) PDVSA engages in commercial activity in the United States. 28 U.S.C. § 1605(a)(3).” The court of appeals backed the district court’s findings that the evidence showed that “Venezuela unlawfully took two of [Helmerich’s] protected property interests—its ownership interest in [its Venezuelan subsidiary] and its right to dispose of that subsidiary’s assets.” The court explained that the evidence amply supported the district court’s conclusions that Venezuela’s actions had rendered Helmerich’s shares in Helmerich-Venezuela useless, and that PDVSA had put Helmerich-Venezuela’s drilling rigs to use for its own purposes.
The D.C. Circuit also concluded that PDVSA “owns” or “operates” both expropriated property rights, as the expropriation exception separately requires. As to Helmerich’s specific property right to dispose of its subsidiary’s assets, the district court had concluded that PDVSA had “extinguished” that right and thus did not own or operate it; the district court thus rested jurisdiction entirely on Helmerich’s shareholder ownership interest in its subsidiary. But the D.C. Circuit agreed with Helmerich’s argument on appeal that “the nationalization did not extinguish any power to control the disposition of the nationalized assets” but instead “transferred those rights to PDVSA, which now controls and operates the assets.”
2. The D.C. Circuit held that the district court had personal jurisdiction over PDVSA under the FSIA, and that PDVSA was not entitled to protection from personal jurisdiction under the Fifth Amendment’s due process clause. The panel explained that PDVSA is operated as an alter ego of the Venezuelan government, and foreign state governments and their alter egos are not “persons” protected by the Fifth Amendment.
The D.C. Circuit further concluded that Helmerich’s alter ego showing for purposes of personal jurisdiction did not alter the analysis of subject-matter jurisdiction under the FSIA’s expropriation exception. PDVSA had argued that the expropriation exception imposes more demanding requirements in cases against a foreign state government than in cases against a state agency or instrumentality, such as a state-owned corporation. PDVSA thus argued that if PDVSA was an alter ego of the Venezuelan government for personal jurisdiction purposes, the more demanding requirement applicable to Venezuela for subject-matter jurisdiction purposes would apply to Helmerich’s claims against PDVSA. The D.C. Circuit disagreed, concluding that Helmerich was entitled to rely on the less demanding standard applicable to state-owned corporations.
The court of appeals also noted that, after the case was briefed and argued, “the Supreme Court held” in Fuld v. PLO, 606 U.S. 1 (2025), “that the Fifth Amendment imposes different restrictions on the exercise of personal jurisdiction than does the Fourteenth,” so PDVSA’s personal-jurisdiction-related arguments may independently “fail because they invoke Fourteenth Amendment standards.”
3. Finally, the D.C. Circuit rejected PDVSA’s argument that the act-of-state doctrine bars Helmerich’s expropriation claim. That doctrine prevents courts from holding a recognized foreign sovereign liable for public acts it committed within its own territory. The D.C. Circuit held that a federal statute, the Second Hickenlooper Amendment (22 U.S.C. § 2370(e)(2)), bars the application of that doctrine. In so holding, the court of appeals rejected PDVSA’s argument that the Second Hickenlooper Amendment does not apply to claims for money damages or where the property has not found its way into the United States. The D.C. Circuit concluded that there was “no textual support” for those limitations.
What It Means
- The D.C. Circuit’s decision makes Helmerich the first plaintiff seeking monetary relief for a foreign state’s expropriation of its property to establish jurisdiction under the FSIA’s expropriation exception and survive past the motion to dismiss stage on appeal. The decision thus marks a path for U.S. companies to recover based on a foreign sovereign’s indirect expropriations of their shareholder rights in foreign subsidiaries.
- The decision makes clear that foreign sovereigns may not nationalize property within their borders with impunity and then assert the act-of-state defense in U.S. courts to claims for damages.
- The D.C. Circuit’s citation to the Supreme Court’s recent decision in Fuld v. PLO signals a broader willingness to entertain personal jurisdiction over the agencies and instrumentalities of foreign sovereigns in federal court.
Gibson Dunn represented the prevailing party in the D.C. Circuit in H&P v. PDVSA, where Matt Rozen presented the oral argument. With him on the brief were Miguel A. Estrada, Jeffrey Liu, and Aaron Hauptman.
The Court’s opinion is available here.
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