Opinion ID: 187202
Heading Depth: 2
Heading Rank: 2

Heading: Issue of subject-matter jurisdiction

Text: Whether we have jurisdiction on this interlocutory appeal over the district court's decision on subject-matter jurisdiction is somewhat more involved. First, we are not persuaded by LRA's contention that the subject-matter jurisdiction issue here is really whether LRA is a proper plaintiff in such an action against Libya. LRA argues that although Libya labels this issue as one of sovereign immunity, the issue is actually one of standing for LRA as a plaintiff and standing is not an issue that falls within the collateral order exception to the finality rule. We note, however, that in the proceedings below Libya moved to dismiss LRA's complaint for lack of subject-matter jurisdiction based on foreign sovereign immunity, and that in its disposition of the motion the district court in fact decided not whether LRA had standing, but that Libya does not have foreign sovereign immunity. Ordinarily, appeals cannot be taken from the district court to the courts of appeals until final judgment. See Behrens v. Pelletier, 516 U.S. 299, 305, 116 S.Ct. 834, 133 L.Ed.2d 773 (1996). There is, however, a `small class' of district court decisions that, though short of final judgment, are immediately appealable because they `finally determine claims of right separable from, and collateral to, rights asserted in the action, too important to be denied review and too independent of the cause itself to require that appellate consideration be deferred until the whole case is adjudicated.' Id. (quoting Cohen v. Beneficial Indus. Loan Corp., 337 U.S. 541, 546, 69 S.Ct. 1221, 93 L.Ed. 1528 (1949)). For this collateral order exception to apply, the Supreme Court has instructed that the district court's decision must [1] conclusively determine the disputed question, [2] resolve an important issue completely separate from the merits of the action, and [3] be effectively unreviewable on appeal from a final judgment. Coopers & Lybrand v. Livesay, 437 U.S. 463, 468, 98 S.Ct. 2454, 57 L.Ed.2d 351 (1978). Our task, then, is to determine whether the district court's subject-matter jurisdiction decision satisfies the three prongs of the collateral order exception under Coopers & Lybrand. The decision easily meets the first two prongs because it conclusively determines the issue of subject-matter jurisdiction and that issue is separate from the merits. As to whether the decision is effectively unreviewable on appeal from final judgment, we note that the issue here is subject-matter jurisdiction based on sovereign immunity. We have observed previously that `sovereign immunity is an immunity from trial and the attendant burdens of litigation ...' Foremost-McKesson, Inc. v. Islamic Republic of Iran, 905 F.2d 438, 443 (D.C.Cir. 1990) (quoting Rush-Presbyterian-St. Luke's Med. Ctr. v. Hellenic Republic, 877 F.2d 574, 576 n. 2 (7th Cir.1989)). This is so because when the issue is jurisdictional immunity, appeal from final judgment cannot repair the damage that is caused by requiring the defendant to litigate. Rein v. Socialist People's Libyan Arab Jamahiriya, 162 F.3d 748, 756 (2d Cir.1998). Consequently, [t]he denial of a motion to dismiss on the ground of sovereign immunity satisfies all three [ Coopers & Lybrand ] criteria, and is therefore subject to interlocutory review. Kilburn v. Socialist People's Libyan Arab Jamahiriya, 376 F.3d 1123, 1126 (D.C.Cir.2004). LRA nevertheless argues that the issue does not fall within the collateral order exception because Libya's claim concerns only whether LRA can assert the same claims that its assignors and subrogors can assert, and an appeal of that issue would not involve the avoidance of a trial that would imperil a substantial public interest, Will v. Hallock, 546 U.S. 345, 353, 126 S.Ct. 952, 163 L.Ed.2d 836 (2006), and therefore is not effectively unreviewable if left until a later time. But LRA mischaracterizes Libya's claim, which in essence rests on immunity from suit as a foreign sovereign. In sum, we conclude that the third prong of the collateral order exception under Coopers & Lybrand is satisfied and consequently we have jurisdiction over the issue on this interlocutory appeal.
Libya contends that the district court does not have subject-matter jurisdiction over LRA's claims. This contention is founded on two arguments concerning the interpretation of the FSIA terrorism exception. Libya first argues that the district court lacks subject-matter jurisdiction over LRA's claims because the FSIA prohibits claims by third-party corporate claimants. In support of this argument Libya contends that because the claims were assigned to LRA they are no longer for money damages ... for personal injury or death pursuant to the FSIA, but rather for money damages for payments made to the victims' families and estates under commercial contracts of insurance underwritten by LRA. Libya claims that as such, the causes of action asserted by LRA do not arise under the FSIA but rather arise under commercial contracts of insurance against liability. Libya also contends that the district court ignored language in the terrorism exception which states that immunity is not waived if neither the claimant nor the victim was a national of the United States (as that term is defined in... the Immigration and Nationality Act). See 28 U.S.C. § 1605(a)(7)(B)(ii). Since the Immigration and Nationality Act defines national of the United States as a citizen of the United States, 8 U.S.C. § 1101(a)(22), Libya argues that the terrorism exception does not allow for third-party corporate claimants but rather limits the category of claimants to individuals who are nationals of the United States. We disagree with Libya's analysis. First, Libya misses the link that the payments made by LRA to the victims' families and their estates were for money damages for the deaths of the victims, i.e., for the same claims for money damages that the families and their estates could make directly against Libya under the FSIA. As the district court noted, when bringing suit in these circumstances, third-party insurers such as LRA step into the shoes of the victims' families and their estates. Furthermore, the language of § 1605(a)(7) is clear on its face: if neither the claimant nor the victim was a national of the United States at the time of the terrorist act, immunity is not waived. In other words, if either the claimant or the victim is a national of the United States, then immunity is waived. Here, there is no dispute that the victims were United States nationals; therefore, Libya's sovereign immunity is not a bar to LRA's claims because it is waived. Libya next argues that the district court lacks subject-matter jurisdiction over LRA's claims because, as an assignee/subrogee, LRA's claims do not come under the FSIA. Since the FSIA is the sole basis for district court subject-matter jurisdiction, argues Libya, for the district court to create subject-matter jurisdiction by rely[ing] upon the state common law principles of subrogation and assignment, which are outside of the FSIA, is clearly erroneous. Libya has a valid point insofar as the meaning of the term personal injury is by definition a federal question. Molzof v. United States, 502 U.S. 301, 305, 112 S.Ct. 711, 116 L.Ed.2d 731 (1992) (interpreting the punitive damages bar in the Federal Tort Claims Act). However, when Congress borrows terms of art in which are accumulated the legal tradition and meaning of centuries of practice, it presumably knows and adopts the cluster of ideas that were attached to each borrowed word. Id. at 307, 112 S.Ct. 711. Thus, we must ask what is considered a personal injury claim under traditional common-law principles. Id. at 312, 112 S.Ct. 711. It is well established that the assignee or subrogee owns the substantive right of the claimant. United States v. Aetna Casualty & Surety Co., 338 U.S. 366, 381, 70 S.Ct. 207, 94 L.Ed. 171 (1949) (insurer suing the United States as assignee of a personal injury claim); see also Dow Chem. Corp. v. Weevil-Cide Co., Inc., 897 F.2d 481, 484 (10th Cir.1990) ([T]he claim of a ... subrogee is not a separate cause of action from the right held by the subrogor, but is derivative of the underlying claim which the subrogor held against the subrogation defendant.) (internal citation and quotation marks omitted); City of Hope Nat'l Med. Ctr. v. Health Plus, Inc., 156 F.3d 223, 228 (1st Cir.1998) (It is generally understood that the assignee acquires rights similar to those of the assignor, and is put in the same position with reference to those rights as that in which the assignor stood at the time of assignment.) (citation and internal quotation marks omitted); Moore v. Hechinger, 127 F.2d 746, 748 (D.C.Cir.1942) ([A]cceptance of compensation ... operates an absolute transfer to the employer of the substantive rights of the injured employee.). Of course, state law will often determine whether a person is in fact an assignee or subrogee. See, e.g., Aetna Casualty & Surety, 338 U.S. at 368, 70 S.Ct. 207 (assignment occurred by operation of New York law as a result of the employee's inaction). Regardless, jurisdiction under § 1605(a)(7) depends on what is legally considered a personal injury claim under traditional common-law principles, Molzof, 502 U.S. at 312, 112 S.Ct. 711 (emphasis in original), and a validly assigned or subrogated personal injury claim certainly qualifies. Therefore, claims may be brought by assignees/subrogees of the victims' families and their estates, such as LRA, against a subrogation defendant, such as Libya, under the FSIA.