Opinion ID: 406168
Heading Depth: 2
Heading Rank: 2

Heading: FSIA Jurisdiction

Text: 9 Count 3 is labelled Accounting by Defendant GE for Use of Patent Rights and Proprietary Information, and count 4 is Accounting by Defendant Leictron for Unlawful Use of Patent Rights and Proprietary Information. 14 In them plaintiff alleges that GE-in contravention of U. S. and Irish law, and without plaintiff's consent-turned over to Leictron the use of patent rights and proprietary information owned by plaintiff, and that Leictron used and infringed these rights and information. Leictron is also accused of wrongfully converting and using equipment belonging to plaintiff, and of wrongfully manufacturing and selling quartz crystals with personnel trained by plaintiff. Defendant Leictron is said to have benefitted from the continuing and substantial profits generated by its usurpation (with the active collusion of Defendant GE) of the patent rights, proprietary information and equipment owned by Plaintiff. 15 10 In a word, plaintiff accuses GE and Leictron of stealing his expertise and equipment and making money from them. 11 In determining whether under these alleged circumstances a federal court may properly exercise jurisdiction under FSIA, we must undertake a bifurcated analysis, asking first whether a United States court has subject matter jurisdiction, and second whether it can exercise personal jurisdiction over the defendants. 16 12 Before we ask these questions, however, we should make clear the effect of our answers. We are not making a final factual determination of whether jurisdiction exists, on either count, for any defendant. Only the factual determinations which the district court may undertake later can determine this, one way or another. Our conclusion that the district court's dismissal for lack of jurisdiction was improper is based on our finding that the facts as alleged -and generously interpreted-make a dismissal at least premature in light of the dearth of fact-finding done by the district court thus far. Further fact-finding by the district court, which it should make explicit, may yet render dismissal proper. 17
13 The existence vel non of subject matter jurisdiction will be determined by sections 1604 and 1605 of the Act. 18 Section 1604 states the general FSIA rule that a foreign state shall be immune from the jurisdiction of the courts of the United States, and section 1605 then carves out exceptions to this general rule. It is clear that each of the four defendants is a foreign state within the meaning of section 1604, 19 so the question is whether any of the exceptions in section 1605 apply. The relevant exceptions are: 14 (a) A foreign state shall not be immune from the jurisdiction of courts of the United States or of the States in any case- 15 (2) in which the action is based (clause 1) upon a commercial activity carried on in the United States by the foreign state; or (clause 2) upon an act performed in the United States in connection with a commercial activity of the foreign state elsewhere ; or (clause 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 .... 20 16 Recall that in counts 3 and 4 plaintiff accuses GE and Leictron of stealing his expertise, patent rights, and equipment and making money from them, and that at the time this happened all parties were in Ireland. But the complaint alleges an unbroken chain of events beginning when plaintiff contracted with defendant GE in the United States, with the participation of defendant IDA's New York office, and involving the active collusion of all defendants to entice plaintiff to leave the United States for Ireland. Does this sequence of events yield an action within the exceptions enumerated in section 1605 to section 1604's general rule of immunity? 17 We believe that, if all this happened in the way plaintiff alleges, it does. In particular, we think the case would fall within clause 2 of section 1605(a) (2), that we would have before us an action based upon an act performed in the United States in connection with a commercial activity of the foreign state elsewhere .... 21 The act performed in the United States is the enticement, the commercial activity of the foreign state elsewhere is the quartz crystal business in which plaintiff and defendants were involved. 22 We note that the district court also recognized the possible applicability of clause 2. 23 18 The legislative history of the clause confirms our belief that it would apply. The House Report stated that the clause looks to conduct of the foreign state in the United States which relates either to a regular course of commercial conduct elsewhere or to a particular commercial transaction concluded or carried out in part elsewhere. 24 An (e)xample( ) of this type of situation given by the Report appears to be precisely what is alleged here: a representation in the United States by an agent of a foreign state that leads to an action for restitution based on unjust enrichment .... 25 19 While it is unclear whether the district court failed to find subject matter jurisdiction for these counts, 26 we should note here one reservation about the district court's FSIA determinations generally. Our criticism is prompted not by any major analytical error of the district court; 27 rather, it is attributable to our more open-textured reading of the Act. The three clauses which constitute section 1605(a)(2) are intended to carve out a commercial act exception to the general rule of sovereign immunity: in the statute's Findings and declaration of purpose it is asserted that states are not immune from the jurisdiction of foreign courts insofar as their commercial activities are concerned .... 28 We think that it ought to be difficult for defendants engaged in commercial activity with substantial American contact-as defendants were alleged to have been here-to invoke successfully sovereign immunity when sued for underlying commercial misdeeds. This is especially so in view of the fact that FSIA was written in great measure to ensure that our citizens will have access to the courts in order to resolve ordinary legal disputes. 29 We do not say that plaintiff will win, but neither can we say that he has failed even to allege a claim within the Act. 20 Therefore, we find it improper to dismiss for lack of subject matter jurisdiction under the facts alleged in counts 3 and 4. Also, we vacate the district court's application and exposition of FSIA.
21 There remains a final problem: Subsequent to the determination of subject matter jurisdiction (under FSIA) is the issue of personal jurisdiction. 30 It appears that, statutorily, personal jurisdiction exists so long as subject matter jurisdiction exists and service has been properly made under section 1608 of FSIA. 31 We have found the former, and the latter is not challenged. 22 However, a statute cannot grant personal jurisdiction where the Constitution forbids it, and the Supreme Court has held repeatedly that certain minimum contacts must exist between the person and the jurisdiction to be consistent with the Due Process Clause of the Fifth Amendment. We must determine whether sufficient minimum contacts are alleged here. 23 We believe they are. 32 Under the facts alleged in the complaint, defendants entered into contract with plaintiff in the United States, using U. S. mails, telephones, and telegraph, 33 with the purpose of enticing plaintiff to come to Ireland where his expertise, patent rights, and equipment could be misappropriated. We note that, under the facts alleged, at least some of the defendants maintain offices in the United States and have availed themselves of the privileges of American law, that litigation in the United States was foreseeable to them, and that trying the suit here should not be an undue inconvenience. 34 The Supreme Court has stressed the plaintiff's interest in obtaining convenient and effective relief. 35 Moreover, the Court has in the past considered the forum's manifest interest in providing effective means of redress for its residents, 36 and here Congress passed FSIA to ensure specifically that our citizens will have access to the counts in order to resolve ordinary legal disputes. 37 If plaintiff can show that his allegations have substance and that defendants in fact acted in concert, so that the contacts of one may be attributed to the others, then this is more than enough to establish that maintenance of the suit does not offend 'traditional notions of fair play and substantial justice.'  38 24