Legal Document

538 U.S. 468 DOLE FOOD CO. ET AL.v.PATRICKSON AL. No. 01-593. Supreme Court of United States. Argued January 22, 2003. Decided April 2003.* Plaintiffs filed a state-court action against Dole Food Company and others (Dole petitioners), alleging injury from chemical exposure. The petitioners impleaded Dead Sea Bromine Co. Compounds, Ltd. (collectively, the Companies). removed to federal court under 28 U. S. C. § 1441(a), arguing that common law foreign relations provided federal-question jurisdiction 1331. District agreed it had jurisdiction, but dismissed case on other grounds. As Companies, rejected their claim they are instrumentalities state (Israel) as defined by Foreign Sovereign Immunities Act 1976 (FSIA), therefore entitled removal 1441(d). Ninth Circuit reversed. petitioners, held could not rest relations. Regarding noted, declined answer, question whether status an instrumentality is assessed at time alleged wrongdoing or suit filed. It even earlier date, were Israel because did meet FSIA's definition. Held: 1. writ certiorari in 01-593, seek review this Circuit's ruling P. 472. 2. A must itself own majority corporation's shares if corporation be deemed FSIA. have direct ownership either Companies any pertinent action. Rather, were, various times, separated one more intermediate corporate tiers. indirect subsidiaries Israel, companies cannot come within statutory language granting entity "majority whose interest owned political subdivision thereof." 1603(b)(2). Only satisfies requirement. In issues structure often matters. reference "shares" shows Congress intended coverage turn formal ownership. its shareholders distinct entities, see, e. g., First Nat. City Bank v. Banco Para el Comercio Exterior de Cuba, 462 611, 625, parent which owns subsidiary's does not, for reason alone, legal title assets; and, follows with greater force, subsidiaries. veil separating corporations may pierced certain exceptional circumstances, refer no authority extending doctrine so far that, categorical matter, all same corporation. Various statutes "direct ownership." absence 1603(b) instructs intend disregard structural rules here. That section's "other interest" phrase, when following word "shares," should interpreted type than stock Reading phrase state's entities further down ladder would make specific redundant. fact exercised considerable control over substituted interest, since concepts, state, control, benchmark status. Pp. 473-478. 3. Instrumentality determined filing complaint. Construing 1603(b)(2) present tense provision "a ... state" has real significance consistent longstanding principle Court's depends upon things brought. E. Keene Corp. States, 508 200, 207. Companies' attempt compare sovereign immunity immunities based government officer's conduct giving rise inapt those apply Unlike immunities, meant avoid chilling states business give them some protection inconvenience gesture comity, Verlinden B. V. Central Nigeria, 461 480, 486. Because relationship recognized FSIA between been severed before was commenced, theory such conferred subsidiary accepted. 478-480. dismissed; 01-594, affirmed. Reported below: 251 F. 3d 795. KENNEDY, J., delivered opinion unanimous respect Parts I, II-A, II-C, Part II-B, REHNQUIST, STEVENS, SCALIA, SOUTER, THOMAS, GINSBURG, JJ., joined. BREYER, concurring part dissenting part, O'CONNOR, joined, post, p. 480. 1 CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR NINTH CIRCUIT. 2 Peter R. Paden argued cause both cases. With him briefs 01-594 Philip Karmel, Laurence A. Horvath, Thomas Walsh, James Bennett. On 01-593 Robert H. Klonoff, Daniel Bromberg, Terence M. Murphy, Michael L. Rice, G. Crow, Richard Sutton, Jr., T. Greig, Boaz Morag, Brem, Walter Conrad, D. Ferguson McNiel III, Charles W. Schwartz, Burton Ballanfant. 3 Jonathan Massey respondents brief Christian Hartley. 4 Jeffrey Minear States amicus curiae urging affirmance. Solicitor General Olson, Assistant Attorney McCallum, Deputy Kneedler, Douglas N. Letter, Byron William Howard Taft IV.† 5 JUSTICE KENNEDY Court. 6 invoke rights litigation (FSIA Act), Pub. 94-583, 90 Stat. 2891. Some Act's provisions also invoked "instrumentality" Act. Republic Argentina Weltover, Inc., 504 607, 611 (1992); 488 (1983). allowing actions court. comes us, presents two questions. first can where tiers above subsidiary. second tort actionable wrong occurred or, hand, We granted certiorari, 536 956 (2002). 7 * underlying Hawaii 1997 petitioners). group farm workers Costa Rica, Ecuador, Guatemala, Panama who exposure dibromochloropropane, used agricultural pesticide home countries. Co., Ltd., merits us. 8 there subject-matter but, nevertheless, grounds forum non conveniens. 9 separate theory. They claimed FSIA, entitling purposes basis. Civ. 97-01516HG (D. Haw., Sept. 9, 1998), App. Pet. Cert. 79a. 10 Appeals Addressing ground relied 795, 800 (CA9 2001). portion Appeals' ruling, we do address it. Accordingly, dismissed. 11 reversed order instance State Israel. went hold definition instrumentality. 12 prevail here, show though each turn. now affirm. II 13 Title 1441(d) governs states. provides "[a]ny civil brought [28 1603(a)] district division embracing place pending." See 1330 (governing original jurisdiction). Section 1603(a), defines "foreign include "agency state." "[A]gency defined, turn, as: 14 "[A]ny — 15 "(1) person, otherwise, 16 "(2) organ thereof, 17 "(3) neither citizen nor created laws third country." 1603(b). B 18 resolved applicability holding Its correct. 19 suit. these For example, 1984-1985, wholly company called Israeli Chemicals, Ltd.; another Works, 20 time. Those grants only 21 speaks urge us ignore formalities use colloquial sense term. ask whether, parlance, said Companies. reject analysis. evident text aware settled principles legislated context. refers showing Likewise, 1603(b)(1), component instrumentality, "separate otherwise." light indicia mind, assess matter law, irrespective everyday parlance. 22 basic tenet American entities. See, 625 (1983) ("Separate personality described `an almost indispensable aspect public corporation'"); Burnet Clark, 287 410, 415 (1932) ("A stockholders generally treated entities"). An individual shareholder, virtue his shares, assets result, holds interest. Fletcher, Cyclopedia Law Private Corporations 31 (rev. ed. 1999). subsidiary; id., 31, 514 ("The properties distinct, both. property"). shareholder change Bank, supra, 626-627 ("[G]overnment established juridical independent normally such"). 23 Applying principles, corporations. 24 essentially interpret piercing veil, however, rare exception, applied fraud Burnet, 415; §§ 41 41.20, usually case-by-case referred gives indication depart general regarding formalities. 25 Where intends sense, knows how so. e.g., 8477(a)(4)(G)(iii) (referring "owned directly indirectly"); 84(c)(5) "any indirectly States"); 79b(a)(8)(A) securities "which owned, controlled, power vote"); 1802(3) term `newspaper owner' means person controls directly, through corporations, newspaper publications"). rules. 26 "shares interest." read "interest" instrumentality's better reading text, our view, support argument. words interest," stock. statute written contingency forms countries, country, conventional structures. best understood accomplish objective. lower Absent requires normal construction, construe manner strained time, render superfluous. Mertens Hewitt Associates, 248, 258 (1993) ("We will modifier superfluous"); Nordic Village, 503 30, 36 (1992) (declining adopt construction violate "settled rule must, possible, construed fashion every operative effect"). 27 say operations, notwithstanding Israel's companies. appear think determining Act, Control ownership, concepts. Bestfoods, 524 51, 64-65 (1998) (distinguishing "operation" "ownership" Comprehensive Environmental Response, Compensation, Liability 1980 liability). terms explicit straightforward. Majority need delve into examine extent involvement operations. Even exerted describe, [the companies'] test mandates inquiry past details nation's relation shares. supported elementary law. 29 alternative affirming Appeals. Woods Interstate Realty 337 535, 537 (1949). C 30 To 1441(d), plain provision, expressed tense, "longstanding `the brought.'" 207 (quoting Mollan Torrance, Wheat. 537, 539 (1824)). well settled, federal-diversity citizenship parties Anderson Watt, 138 694, 702-703 (1891) ("And [jurisdictional] condition commencement suit"); see Minneapolis & St. Louis Peoria Pekin Union 270 580, 586 (1926) existing brought"). dispute determinative 1332(a)(4), suits section 1603(a) ..., plaintiff citizens different States." anomalous 1441(d)'s words, 1603(a)," differently. 32 administer like status-based qualified accorded actor, officer comparison inapt. Our cases applying involve interpretation statute. Spalding Vilas, 161 483, 493-499 (1896) (basing decision official considerations "convenience policy"); Scheuer Rhodes, 416 232, 239-242 (1974). 33 officers prevent threat "crippl[ing] proper effective administration affairs." Spalding, 498 (discussing executive officers); Pierson Ray, 386 547, 554 (1967) (judicial serves judges "at liberty exercise functions independence without fear consequences" (internal quotation marks omitted)). immunity, contrast, comity sovereigns. Verlinden, S., 34 reason, reliance Nixon Fitzgerald, 457 731 (1982), unavailing. There, President immune liability taken during office, he longer serving capacity. served function serve. 751 ("Because singular importance President's duties, diversion energies concern private lawsuits raise unique risks functioning government"). noted above, serve purpose. 35 rationale, applicable here: constitutional separation powers. 749 consider functionally mandated incident rooted tradition powers history"). rationale implicated Any commenced. 37 38 reasons, FSIA; 39 judgment affirmed, 40 ordered. Notes: Together 01-594,Dead et al. Patrickson al., &#x2020; Briefs amici reversal Ireland Martin Baach Davenport; Consortium Réalisation George J. Terwilliger Darryl Lew, Shawn Gunnarson. whom O'CONNOR joins, part. 42 I join dissent opinion. majority, believe state," 1603(b)(2), covers Nation's Corporate Subsidiary, consists Parent Subsidiary. 43 (FSIA) sets forth criteria assert defense immunity. specifies defendant relevant determination. And allows foreign-state commercial heard 1330(a), 1605(a)(2). These last-mentioned federal-court fall (b). 44 defendants corporation, [their] by" nation. (emphasis added). nation subsidiaries' But (simplifying facts) parent, which, ante, 473-474. 45 Does majority-ownership count example what calls interest"? says no, "only requirement." Ante, 474 disagree. 46 statute's language, standing answer question. "own" technical art terms, precise meaning context appear. Cribbet Johnson, Principles Property (3d 1989) ("Anglo-American made much sense"); Black's Dictionary 1049, 1105 (6th 1990) [`owner'] nomen generalissimum" "term most meaning" "of kind" "and gathered connection used, applied"). Williams Taylor, 529 420, 431 (2000) ordinary, contemporary, meaning, absent bear import" omitted; emphasis added)). 47 Thus, "shipowne[r]" though, technically speaking, ship. Flink Paladini, 279 59, 62-63 (1929) Moreover, trademark registered thus mark. K mart Cartier, 486 281, 292 (1988) (opinion J.) added) (noting "the inability discern" "entit[y] `own' domestic parent"); 318 (SCALIA, part) ("It reasonable nominally `owned by' corporation"); 319 subsidiary"). Similarly, here might, might kind arises If "owner" A's ship, Flink, then why subsidiary? mart, shareholder? And, very least, "ownership 48 Neither linguistic points help resolve out, leans favor incorporating formal, requirements. 474-475. resulting suggestion limitation neatly counterbalanced "statute structures." 476. given latter necessity, other" exclude scope "other" mixed, say, debt/equity, arrangement 49 majority's Congress' ownership," added), founders several demonstrate felt necessary explicitly "direct" (a missing FSIA) achieve result. 1087-3(a) ("common Holding Company" added)); 165(g)(3)(A) (requiring taxpayer stock" 851(c)(3)(A) (stock corporations" Were logic correct, 476-477, 50 "veil piercing" argument, 475-476, beside point. So reiteration separateness shareholders, 474-475, aside. (b) (acknowledging nevertheless deliberately conferring itself); Rep. 94-1487, (1976) (same). Working Group Bar Association, Reforming Colum. Transnat'l 489, 517-518 (2002) (hereinafter ABA Group) rejects "separate-entity" courts deny state-owned corporations). 51 Statutory game blind man's bluff. Judges free purposes. examination sheds light. makes clear seeks: (1) provide right bar decided "courts States," i. e., courts, 1604; 1441(d); (2) unbarred claims states, engaging activities, 1605(a)(2), "in manner" similar individual," 1606; (3) guarantee defending protections, including prohibition punitive damages, court, trial judge, procedural (related service process, venue, attachment, execution judgments). 1330, 1391(f), 1606, 1608-1611. 497 ("Congress sought channel sovereigns away courts"); ("giv[ing] remove Federal courts" potential sensitivity developing uniform body area"); ("Such broad conducive uniformity decision, desirable disparate treatment involving governments adverse consequences"). 52 Most important purposes, seeks protections acts name "organ[s]." 53 Given lead grant Nation acting through, Subsidiary? is: nothing distinction. 54 concerned, decisions about incorporate, act single layer layers matters purely form, substance. Cf. (agencies "could assume variety forms"); "developing countries" "establish large-scale national investments"). determination less involved. compelling. risk policy consequences great. 523 strength interests necessarily dissipate employs complicated structures resembling modern businesses"); Dellapenna, Refining Willamette Int'l Disp. Resol. 57, 92-93 (2001). Kumar, Company: Issues Options (World Discussion Paper 187, 1992) existence companies, many variants, widespread"). 55 doubt "[t]he reading," 476, leading rule," 477. nation, Mexico Honduras, tiered manage areas natural resources," 523, find ability adjudicate "potential sensitivity" restricted, 32. unlikely characterize "better" tied undercuts jurisdictional objectives. working lawyers factor complex restructuring equations (determining, merging disaggregating corporations) lose previously available access 56 consequences, perspective unnecessarily produce "better rule"? hold, today, Subsidiary "would merely primary ordinary narrow operation seriously imperil accomplishment purpose." Danciger Cooley, 248 319, 326 (1919). 57 decide issue just Flink. unanimously statutes" question, belonged 62-63. Justice Holmes wrote, Court: 58 "For th[e] purpose [of statutes] rational distinction persons owning vessel [here, subsidiary] making putting distributing extend equally both.... [the] popular defeat manifest intent. This members, overlooked extreme untechnical liberal way ...." Ibid. 59 No said.

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