Opinion ID: 782282
Heading Depth: 3
Heading Rank: 3

Heading: Princz

Text: 47 In urging us to forgo the Landgraf analysis, SNCF relies heavily on Princz v. Federal Republic of Germany, 26 F.3d 1166 (D.C.Cir.1994). In Princz, the plaintiff, a Holocaust survivor, sued the Federal Republic of Germany for injuries suffered in Nazi concentration camps during World War II. Id. at 1168. Dismissing plaintiff's claims for lack of subject matter jurisdiction, the District of Columbia Circuit stated that it did not need to decide whether the FSIA applied to the case. Id. at 1168, 1171. If the statute applied, the court reasoned, plaintiff's claims had to be dismissed because they did not fall within any of the FSIA's exceptions to immunity. Id. at 1171. On the other hand, if the Act did not apply, plaintiff's claims still had to be dismissed because there [was] no present basis for subject matter jurisdiction over Mr. Princz's claims in the district court regardless of the state of the circuit law concerning immunity in the period 1942-1945. Id. at 1175-76. After the FSIA's enactment, the court continued, the diversity statute, § 1332, no longer encompasses claims against foreign states. At the same time, the new § 1330 jurisdictional provision of the Act, asserts federal jurisdiction over a suit against a foreign state only insofar as the foreign state is not entitled to immunity under the FSIA, and the court had already found no pertinent exception to immunity. Id. at 1176. 48 We are unable to agree with the Princz court's view that it did not have to and in fact did not decide the issue of the FSIA's applicability. To the contrary, in the second prong of its analysis the majority clearly applied both the FSIA's new jurisdiction-conferring provision, § 1330, and the amended, post-FSIA version of the diversity statute, 28 U.S.C. § 1332. 49 Further, Princz did so without answering either of the two questions posed by Landgraf: (1) has Congress clearly expressed its intent that these FSIA provisions be applied to lawsuits based on pre-1976 events, and, if not, (2) would the application of these provisions to the plaintiff's claims have a retroactive effect. Instead, Princz noted only that it was not aware of any case law suggesting that a court can revive the pre-FSIA diversity jurisdiction over claims against foreign states. 26 F.3d at 1171. Thus, it apparently accepted as axiomatic that the basis for federal subject matter jurisdiction must be found among the jurisdiction-conferring statutes in effect at the time of the lawsuit. As we explained above, in our view such an approach cannot be reconciled with the Supreme Court's discussion of jurisdiction-allocating statutes in Landgraf and, more recently, in Hughes Aircraft. 50 In consequence, we decline the railroad's invitation to adopt the reasoning of Princz and proceed instead to analyze the Act's applicability to this case under the analytical framework outlined in Landgraf and Lindh. B. Landgraf/Lindh Analysis Applied 1. Express Command Lacking to Apply FSIA Retroactively 51 Under Landgraf, the first question is whether Congress clearly expressed its aim that the statute apply to pre-enactment events. We conclude it did not. In I.N.S. v. St. Cyr, 533 U.S. 289, 121 S.Ct. 2271, 150 L.Ed.2d 347 (2001), the Supreme Court explained that the standard for finding the requisite unambiguous direction under Landgraf is a demanding one. Id. at 316, 121 S.Ct. 2271. Cases where this Court has found truly `retroactive' effect adequately authorized by statute have involved statutory language that was so clear that it could sustain only one interpretation. Id. at 316-17, 121 S.Ct. 2271 (quoting Lindh, 521 U.S. at 328 n. 4, 117 S.Ct. 2059). For instance, we found this standard satisfied in Kuhali v. Reno, 266 F.3d 93 (2d Cir.2001), where a statute expanding the definition of the term aggravated felony expressly stated that the new definition applies regardless of whether the conviction was entered before, on, or after the date of the statute's enactment. Id. at 110. 52 In the case at hand, the rigorous requirement of an unambiguous Congressional direction is not satisfied. The closest Congress came to defining expressly the temporal reach of the FSIA was to state that [c]laims of foreign states to immunity should henceforth be decided by courts of the United States and of the States in conformity with the principles set forth in [that statute], 28 U.S.C. § 1602 (emphasis added). See Princz, 26 F.3d at 1170. The use of the word henceforth can reasonably sustain more than one construction. Courts have in fact reached diametrically opposite conclusions regarding Congressional purpose after pouring meaning into this word. See id. at 1178 (Wald, J., dissenting) (collecting cases). Some have interpreted the verbiage as suggesting that the Act should cover all cases decided after its enactment, regardless of the time of the underlying events. See id. at 1170 (majority opinion). Others have concluded that the word henceforth suggests prospective application, meaning application only to suits arising out of post-enactment events — i.e., to some but not all suits filed after the statute's enactment. See Jackson v. People's Republic of China, 794 F.2d 1490, 1497 (11th Cir.1986). 53 Thus, the statutory language obviously is not so clear as to sustain only one construction and thereby to resolve conclusively the question of Congressional purpose, making additional analysis unnecessary. Cf. id. at 1497-98 (proceeding to analyze the FSIA's legislative history, implications of its effective date provision and effect of its application on defendant's antecedent rights to decide whether the statute should apply to claim arising out of pre-1952 events). 54 The railroad also insists the FSIA's comprehensiveness shows Congress wanted the statute to apply to all suits filed after its enactment. This proposition is not persuasive in light of the Supreme Court's express pronouncement in St. Cyr that the comprehensiveness of a statute says nothing with respect to Congress' view regarding the retroactivity of the enactment's individual provisions. 533 U.S. at 317, 121 S.Ct. 2271. 2. Intent to Apply Prospectively 55 We next turn to the question added to the Landgraf analysis in Lindh: do ordinary methods of statutory construction establish that the Act's jurisdictional provisions are inapplicable to the pre-enactment events here at issue? We think the answer to that question is no. 56 As just discussed, Congress' statement that the Act should henceforth govern immunity determinations is ambiguous. Similarly unilluminating is the use of the verb shall in the phrase district courts shall have original jurisdiction ... of any nonjury civil action against a foreign state. 28 U.S.C. § 1330(a). Just as the word henceforth does not necessarily indicate prospective application only, this language does not necessarily signal the statute's applicability only to cases arising out of post-enactment events. Consequently, the use of the cited statutory language may not eliminate the option of retroactive applicability of the statute. 57 Plaintiffs further maintain that Congress indicated the Act was not retroactive by postponing its effective date for 90 days after enactment to give adequate notice of the act and its detailed provisions to all foreign states. See FSIA § 8, 1976 U.S.C.C.A.N. (90 Stat.) at 2898; House Report at 33, reprinted in 1976 U.S.C.C.A.N. at 6632. We do not discern in this provision any suggestion of the intended temporal reach of the statute. Nor do we consider Congress' inclusion of express retroactivity directives in the 1996 and 1997 amendments to the Act a sound basis for construing a different legislature's silence on the same subject ten years earlier. See Antiterrorism and Effective Death Penalty Act of 1996, Pub.L. No. 104-132, § 221, 1996 U.S.C.C.A.N. (110 Stat.) 1214, 1241-43 (making amendments on lawsuits against terrorist states applicable to any cause of action arising before, on, or after the date of the enactment of this Act); Jurisdiction for Lawsuits Against Terrorist States: Technical Correction, Pub.L. No. 105-11, 1997 U.S.C.C.A.N. (111 Stat.) 22, 22 (same). 3. Retroactive Effect 58 Because other tools of statutory interpretation do not establish the FSIA's inapplicability to this case, we must consider whether its application here would have the retroactive effect described in Landgraf and, accordingly, would be barred by the general presumption against retroactivity. What is called for is a commonsense, functional judgment about whether the new provision attaches new legal consequences to events completed before its enactment. St. Cyr, 533 U.S. at 321, 121 S.Ct. 2271. 59 Plaintiffs declare that having the Act cover the instant case would be impermissibly retroactive because, under laws in effect during World War II, SNCF would not have been immune from this specific suit. Thus, plaintiffs assert, application of the Act to bar their claims deprives them of a right of action they previously had and upsets their settled and legitimate expectation of being able to sue SNCF in the United States. 60 In Hughes Aircraft, the Supreme Court distinguished between two types of nominally jurisdictional statutes. 520 U.S. at 951, 117 S.Ct. 1871. Those statutes that affect only where a suit may be brought can generally be applied to currently pending cases without impermissible retroactivity. Id. By contrast, statutes that affect whether a lawsuit may be brought at all can produce a retroactive effect if applied to pre-enactment events. Id. Consistent with Hughes Aircraft, at least two other circuits have concluded that a new statute has a retroactive effect under Landgraf if the statute, although phrased in jurisdictional terms, does not merely change the forum available to plaintiff, but effectively deprives plaintiff of a claim. See Scott, 215 F.3d at 944-47; Mathews, 161 F.3d at 163-66. We adopt this view and hold that the FSIA's application to the present litigation would be retroactive in the Landgraf sense if, as plaintiffs contend, it fully barred claims that previously could have been adjudicated in the United States. 61 The question remains therefore whether the Act's application effectively extinguishes plaintiffs' causes of action. In our view, it does. We recognize that, unlike the immunity provisions, the jurisdictional provisions of the Act do not apply to state courts. See FSIA §§ 2, 3, 1976 U.S.C.C.A.N. (90 Stat.) at 2891 (codified at 28 U.S.C. §§ 1330, 1332). Hence, it could be argued that application of the jurisdictional provisions simply eliminates federal courts as possible forum choices for plaintiffs, but does not affect plaintiffs' ability to pursue their claims in state courts. There, in turn, plaintiffs could oppose the railroad's immunity defense under the FSIA on retroactivity grounds. Such an interpretation of the Act would expose the railroad to a possibility of being sued in state court, even though the same lawsuit could not be brought in federal court. SNCF appears to adopt this position, urging us to separate the analysis of the Act's applicability into two distinct inquiries: jurisdiction and immunity. 62 A foreign sovereign's exposure to suit in state courts may not be broader than its exposure to federal courts' jurisdiction under § 1330. To rule otherwise would be inconsistent with Congress' preference that actions involving foreign states be tried in federal courts. Such preference stems, of course, from the sensitivity of actions in American courts against foreign states and the importance of having a uniform, consistent law in this area. House Report at 32, reprinted in 1976 U.S.C.C.A.N. at 6631. The preference is most evident in the FSIA's liberal removal provision that allows a foreign state defendant — even over objections of co-defendants — to remove to federal court any civil action brought against it in state court. See FSIA § 6, 1976 U.S.C.C.A.N. (90 Stat.) at 2898 (codified at 28 U.S.C. § 1441(d)). 63 Moreover, an interpretation of the Act that allows for a state court action against a foreign government but excludes the same action from district courts' original jurisdiction under § 1330 leads to an obviously anomalous result. Because a foreign sovereign defendant may always remove a case to federal court, see § 1441(d), the action would then be removable to federal court by defendant even though it could not have been originally brought in that court by plaintiff. See 28 U.S.C. § 1441(a) (providing generally for removal of actions within federal district courts' original jurisdiction). Accordingly, applying the Act to bar plaintiffs' claims from federal courts does not simply eliminate one of plaintiffs' forum choices, but fully precludes the claims' adjudication in the United States. Cf. Verlinden, 461 U.S. at 489, 103 S.Ct. 1962 (noting in dictum that any claim permitted under the [FSIA] may be brought from the outset in federal court under § 1330(a)). 64 The final question is whether plaintiffs could have legitimately expected to have their claims adjudicated in the United States prior to the FSIA's enactment. Plaintiffs aver that before the FSIA expanded the definition of a foreign state to encompass state-owned corporations, courts treated such corporations as legal entities separate from their owners and did not recognize the corporations' claims of sovereign immunity. Some pre-FSIA case law from this Circuit supports plaintiffs' assertion. For example, in United States v. Deutsches Kalisyndikat Gesellschaft, 31 F.2d 199 (S.D.N.Y.1929), it was held that a French government-owned mining corporation was not entitled to immunity because the corporation was an entity distinct from its stockholders. Id. at 202-03. Similarly, in Kunglig Jarnvagsstyrelsen v. Dexter & Carpenter, 32 F.2d 195 (2d Cir.1929), we refused to recognize a Swedish railway company's claim of immunity because in its pleadings the company characterized itself as a corporation. Id. at 199-200. In rejecting the immunity claim, we reasoned that such a claim must be raised by an accredited representative of the foreign government. Id. 65 SNCF correctly points out that in other cases courts have treated national railroad companies as state instrumentalities. See Oliver Am. Trading Co. v. Gov't of the United States of Mex., 5 F.2d 659 (2d Cir.1924). For instance, in Oliver, we recognized the immunity claim of the National Railways of Mexico, on the ground that the National Railways of Mexico was simply the name given a system of railroads in the possession of the Mexican government, controlled and operated by Mexico for ten years for national purposes similar to its running the Post Office, Customs Service, or any other branch of the national government. Id. at 661; see also William C. Hoffman, The Separate Entity Rule in International Perspective: Should State Ownership of Corporate Shares Confer Sovereign Status for Immunity Purposes?, 65 Tul. L.Rev. 535, 545-47 (1991) (observing application of separate entity rule to state-owned corporations before FSIA not uniform). 66 Both sides overlook one crucial aspect of the pre-FSIA law and practice in the United States — the State Department's role in courts' foreign sovereign immunity determinations. As earlier noted, the State Department often intervened in litigation by filing a suggestion of immunity. Further, even in cases where the State Department did not intervene, courts looked to that agency for guidance and generally acted in accordance with its policies. 67 The relevance of the State Department's policies to our retroactivity analysis is twofold. First, it appears that the State Department sometimes recognized immunity claims of corporations owned by foreign governments. In Miller v. Ferrocarrill Del Pacifico De Nicaragua, 137 Me. 251, 18 A.2d 688 (1941), the State Department recognized a Maine corporation that operated railways within Nicaragua as an instrumentality of the Nicaraguan government, and the court, in turn, granted the company immunity. Id. at 690-91. 68 Second, and more importantly, the State Department's treatment of ordinary litigation with friendly foreign states in times of peace does not necessarily indicate the position the Department would have taken on claims closely related to war-time crimes of an enemy, such as plaintiffs' claims here. Thus, in Altmann v. Republic of Austria, 317 F.3d 954 (9th Cir.2002), the Ninth Circuit held that Austria could not have legitimately expected immunity from suit for its alleged complicity in the pillaging and retention of treasured paintings from the home of a Jewish alien who was forced to flee for his life during the Holocaust. Id. at 964. In reaching this result, the court relied on a 1949 State Department press release, which announced the Department's policy to relieve American courts from any restraint upon the exercise of their jurisdiction with respect to claims for the restitution of identifiable property wrongfully taken as a result of the Nazi persecution in Germany. Id. at 965-66. 69 The record contains no information with respect to the State Department's position during World War II on the significance of the corporate form in foreign sovereign immunity determinations. Nor is there any indication in the record whether the State Department would have recognized immunity in a case such as the one before us. As a consequence, without this information we cannot determine whether plaintiffs legitimately could have expected to litigate their claims in the United States.