Opinion ID: 773596
Heading Depth: 1
Heading Rank: 3

Heading: jurisdiction

Text: 5 Before proceeding any further, we must determine whether we have jurisdiction over this action in light of the fact that Marchetti is an instrumentality of the Republic of Italy. 2 There can be no dispute about the general rule thata foreign state shall be immune from the jurisdiction of the courts of the United States. 28 U.S.C. §§ 1604. Of course, there are exceptions to that, id., and one of them is that there shall not be immunity in a case in which the action is based . . . 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. 28 U.S.C. §§ 1605(a)(2). 6 The parties do agree that Marchetti's acts of designing, manufacturing and selling the F-260 were in connection with a commercial activity and that the activity wasoutside the territory of the United States. What is in dispute is whether that activity caused a direct effect in the United States, and it is that rather enigmatic proposition that we must construe. The Supreme Court has unraveled the enigma to some extent. 7 In Republic of Argentina v. Weltover, Inc., 504 U.S. 607, 112 S. Ct. 2160, 119 L. Ed. 2d 394 (1992), the Court was faced with a situation where Argentina had issued certain bonds payable in United States dollars, with payment, at the election of the creditor, to be made on the New York market. Id. at 609-10, 112 S. Ct. at 2163-64. When the bonds matured, Argentina did not pay them, and an action was commenced against it in the United States District Court for the Southern District of New York. Pursuant to the FSIA, Argentina moved to dismiss for lack of jurisdiction, but that motion was denied. Id. at 610, 112 S. Ct. at 2164. The Court began by rejecting the notion that in order for an effect to be direct, it must be substantial or foreseeable. Id. at 618, 112 S. Ct. at 2168. Rather, said the Court, an effect is `direct' if it follows `as an immediate consequence of the defendant's . . . activity.'  Id. (citation omitted). The Court, thus, explicated the text with an oracular pronouncement of its own. It had little trouble in applying that to the case before it, where Argentina had actually contracted to make payments in the United States. Id. at 618-19, 112 S. Ct. at 2168-69. Its application here is not quite as obvious. 8 Because of that, Marchetti seizes on a case in which a district court held that the FSIA exception did not apply to the crash of a helicopter in Colorado. Four Corners Helicopters, Inc. v. Turbomeca S.A., 677 F. Supp. 1096, 1097 (D. Colo. 1988). That craft was manufactured, at least in part, by an instrumentality of France and was sold in that country. Id. at 1098. The helicopter finally found its way into the United States many years later. The court, which did not have the benefit of Weltover, ruled that in order to have a direct effect here [t]he injury suffered by the plaintiff must be `a substantial, foreseeable and immediate causal result of an act of the defendant outside the United States in connection with [defendant's] commercial activity elsewhere.'  Id. at 1101 (citation omitted). But that is exactly what the Supreme Court said the effect need not be. Again, it need only be an immediate consequence of the defendant's activity. Thus, Marchetti's reliance on Four Corners is misplaced. See Adler v. Fed. Republic of Nigeria, 219 F.3d 869, 876 (9th Cir. 2000); see also Corzo v. Banco Cent. de Reserva del Peru, 243 F.3d 519, 525-26 (9th Cir. 2001). 9 Once we eschew both substantiality and foreseeability, we must interpret immediate consequence to mean something different from those terms. Particularly where failure of a manufactured product is concerned, a more appropriate reading of the phrase should focus on whether some intervening act broke the chain of causation leading from the asserted wrongful act to its impact in the United States. 3 That view is propounded in Vermeulen v. Renault, U.S.A., Inc. , 985 F.2d 1534 (11th Cir. 1993), which is more apposite to the case at hand than the arguments pressed upon us by Marchetti. Vermeulen was driving a Renault in Georgia when she was injured in an accident. The car was designed and manufactured by a corporation which was wholly owned by the French government. Id. at 1537. The court applied the Weltover test and held: The complaint in this case alleges that the injuries Vermeulen suffered in an automobile accident on the roads of Georgia were the result of RNUR's negligent design and manufacture of the LeCar passenger restraint system. We can hardly imagine a more immediate consequence of the defendant's activity. Id. at 1545. It should be noted, however, that there can be little doubt that the sale and use of the automobile in question in the United States was contemplated by the manufacturer. Id. at 1537-42. Nevertheless, that fact relates to foreseeability more than it relates to immediate consequence, and in Vermeulen the court properly focused on the latter. A defective product failed because of the defect; the consequence could hardly be more immediate. The same is allegedly true in the case at hand. 10 Marchetti asks us to consider, instead, the gloss placed on the concept in Princz v. F.R.G., 26 F.3d 1166 (D.C. Cir. 1994). That was an attempt by a Holocaust survivor to sue the Federal Republic of Germany for injuries he suffered in Europe. Id. at 1168. The court declared that there was no direct effect in the United States and opined that[a] `direct effect' however, `is one which has no intervening element, but, rather, flows in a straight line without deviation or interruption.'  Id. at 1172 (citation omitted). In so doing, the court quoted one of its own pre-Weltover cases. Even if we apply that gloss, it is pellucid that the line between the defective production of the aircraft and the failure of that product because of the defect was a straight one. The acts which resulted in production of an allegedly defective product were legally significant and gave rise to the claim at hand. See Adler, 219 F.3d at 876. 11 Therefore, we hold that we do have jurisdiction. In so stating, we recognize that much time passed between the manufacture and the injury and that the aircraft even changed hands. Still, time itself is linear, and while questions about its ravages, or speculation about the ravages of others along the way, may affect proof, they do not affect jurisdiction. Nevertheless, considerations of that sort do lead legislatures to enact statutes of repose. With that in mind, we turn to GARA.