Opposition Brief — Nolan v. Boeing Co.

7 a

No. 90-1335

IN THE

Supreme Court of the United States

OCTOBER TERM, 1990

>

KENNETH P. NOLAN AND VERNON T. JUDKINS,

Petitioners,

—_—V—

THE BOEING COMPANY, ET AL.,

Respondents.

ON PETITION FOR WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

RESPONDENTS’ BRIEF IN OPPOSITION

TO PETITION FOR CERTIORARI

Keith Gerrard Randal R. Craft, Jr.*

John D. Dillow* Michael S. Mitchell

Richard C. Coyle HAIGHT, GARDNER, POOR

Mark H. Lough & HAVENS

PERKINS COIE 195 Broadway

1201 Third Avenue New York, New York 10007

40th Floor (212) 341-7000

20s eprom sei0! Attorneys for Respondents

“ General Electric Company,

Attorneys for Respondent CFM International, Inc.,

The Boeing Company and Societe Nationale d'Etude

et de Construction de Moteurs

d’Aviation, S.A. (SNECMA)

*Counsel of Record

BEST AVAILABLE COP

QUESTIONS PRESENTED

Does this case present any issue appropriate for Supreme

Court resolution when (a) the Court of Appeals’ decision

does not conflict with any holding of this Court or any other

Court of Appeals, (b) statutory changes during the pendency

of this case give it a unique factual and procedural posture

unlikely to reoccur, and (c) further statutory changes substan-

tially redefine for future cases the issues resolved by Court of

Appeals?

Does the removal provision of the Foreign Sovereign

Immunities Act of 1976, 28 U.S.C. § 1441(d), permit a third-

party foreign state defendant to remove an entire civil action

where there is at least minimal diversity between the parties

to the other claims?

Should this Court alter the well-established and uniformly

applied rule that a party entitled to remove an action on the

basis of that party's identity or status removes an entire civil

action when the party is sued as a third-party defendant?

i

LIST OF PARTIES

Those parties not listed im the caption herein include the

following:

A. Defendants

1) General Electric Company (‘‘GE"’)

2) CFM International, Inc. (“‘CFMI, Inc.’’)

B. Third-Party Defendants

1) Societe Nationale d'Etude et de Construction de

Moteurs d'Aviation, S.A. (““SNECMA"’)

***

RULE. 29.1 LISTING OF AFFILIATED

CORPORATIONS

A. General Electric Company

The General Electric Company has a number of subsidi-

aries in the United States and elsewhere. There are, however,

only a limited number of these subsidiaries that have any out-

standing equity or debt securities that are publicly held.

These are:

Dart & Kraft Financial Corporation

GECC Financial Corporation

General Electric Capital Corporation (formerly General

Electric Credit Corporation)

General Electric Capital Canada, Inc.

General Electric Credit International, N.V.

General Electric Financial Services, Inc.

General Electric Overseas Capital Corporation

Montgomery Ward Credit Corporation

The public holdings of Dart & Kraft Financial Corpora-

tion, GECC Financial Corporation, General Electric Capital

Corporation, General Electric Capital Canada, Inc., General

Electric Credit International, N.V., General Electric Financial

Services, Inc., General Electric Overseas Capital Corporation,

and Montgomery Ward Credit Corporation are limited to

debt securities.

General Electric Company itself has common stock and

debt securities that are publicly traded.

In addition, General Electric Company owns 50% of

Montgomery Ward & Co., Incorporated, which has publicly

held debt securities and 51% of CAMCO, Inc. (Canada),

which has publicly held equity securities.

iv

B. CFM International, Inc.

There are no parent companies, subsidiaries, or affiliates to

list for this party.

C. Socicte Nationale d'Etude ct de Construction de Motecurs

d' Aviation, S.A. (SNECMA)

SNECMA has several subsidiaries and affiliates. They are:

Compagnie Generale des Turbomachines, S.A. (CGTM)

Corse Composites Aeronautiques, S.A.

Famer, S.A.

Fabrications Mecaniques de l'Atlantique, S.A. (FAMAT)

FN Moteurs

Hispano-Suiza, S.A.

Messier-Bugatti, S.A.

Office d’Exportation de Materiels Aeronautiques, S.A.

(OFEMA)

Sochata, S.A.

Societe Europeenne de Propulsion, S.A. (SEP)

Societe Europeenne d'Analyse et Programmation, S.A.

(SEDAP)

Societe de Reparation et d’Entretien de Compresseurs

Speciaux, S.A. (SORECOS)

Societe d’Exploitation des Materiels Martin Baker, S.A.

(SEMMB)

Vallaroche

Vallaroche Investissements

D. The Bocing Company

There are no parent companies, subsidiaries, or affiliates to

list for this party.

TABLE OF CONTENTS

QUES CRUING PUseC BEE? oo vccccecucncccestaceuas

LIST OF PACES vcccscsscaccceccsstseucneeee

RULE 29.1 LISTING OF AFFILIATED CORPORA-

TOGRED 6 oi ccvcncteushcceeeucesunsdebas eee

A. General Electric Company .............ee05-

BD. CoE BRUNO, BIR. 6060s cccccetevascens

C. Societe Nationale d'Etude et de Construction

de Moteurs d'Aviation, S.A. (SNECMA).....

D. The Besley Gael << ccccctscusunkescveues

REASONS FOR DENYING THE WRIT............

1. The decision of the Court of Appeals in this case

does not conflict with any decision of another

United States Court of Appeals .............0000-

ll. There are no other special or important reasons for

reviewing the judgment below ...............605:

A. Petitioners’ collusion argument is without

WRGUR va ccccncecscusenessceueeas cease

B. Petitioners’ Finley argument is without merit .

C. Petitioners’ argument concerning the purpose

of the FSIA is without merit ...............

iv

iv

vi

D. Petitioners’ ‘‘comity’’ and ‘‘federalism’’ argu-

ments are without Mefit .......ccccccccccces

CONCLUGION occcccsvcvcccssivecesesanuuaeee

PAGE

vii

TABLE OF AUTHORITIES

Cases PAGE

Arango v. Guzman Travel Advisors Corp., 621 F.2d

ROFE Ce a Ha hv nn.c Uedeccsdeeuvaceccsccecs 12, 15

Barney v. Latham, 103 U.S. 205 (1881) ..........4-- 8

Carnegie-Mellon University v. Cohill, 484 U.S. 343

Cs bis cakeceebeccadestadceuene anaes eeaareen 12

Chicago v. Mills, 204 U.S. 321 (1907)..........0005: 10

Falls Riverway Realty v. City of Niagara Falls, 732

POG SE Ge Gils Bee c ccc cvevacecccccdseccavene 7

Finley v. United States, 490 U.S. 545 (1989)......... 11, 13

Forsythe v. Saudi Arabian Airlines Corp., 885 F.2d

~ Ff ee FPR rere ere 10

Goodrich v. Burlington Northern R.R. Co., 701 F.2d

Ss Gas Sc eisceeccetcanedevecteeunness 7

Herman v. El Al Israel Airlines, Ltd., 502 F. Supp.

BIT GAY .. FIs 0. cc cvccceckccvesvvccvecocvens 15

IMFC Professional Services of Florida, Inc. v. Latin

American Home Health, Inc., 676 F.2d 152 (Sth Cir.

Johnson v. Showers, 747 F.2d 1228 (8th Cir. 1984) .. 7

Kramer v. Caribbean Mills, Inc., 394 U.S. 823 (1969) 4, 10

Mecom v. Fitzsimmons Drilling Co., 284 U.S. 183

CED <6 odes eevee voccccewecessustcanensusescetess 4

In re Metropolitan Ry. Receivership, 208 U.S. 90

CD ixccdbdecdwesducuvecccncastecciusveensnsee 10

Vili

PAGE

Mori v. Port Auth. of New York and New Jersey, 100

2s BS J fk ee) Sry Tr eee 15

Nolan v. Boeing Co., 22 Avi. Cas. (CCH) 17,811 (E.D.

ST dic nenbked GuAGeeeadhabasueeneuanedee 6, 10

In re Princess Louise Corp., 77 B.R. 766 (C.D. Cal.

Gch. ath oe eV cekens ee au bedaleenkes Gunns 8

Proyecfin de Venezuela, S.A. v. Banco Industrial de

Venezuela, 760 F.2d 390 (2d Cir. 1985) ........... 9

Shamrock Oil Corp. v. Sheets, 313 U.S. 100 (1941) .. 9

Teledyne, Inc. v. Kone Corp., 892 F.2d 1404 (9th Cir.

ced contuctsandabeduinevadeckcasieeuca veces 12

Texas Employers Insurance Association v. Felt, 150

Pee ee GE, DE os cus cceacectteeteescucee S

Texas Trading & Milling Corp. v. Federal Republic of

Nigeria, 647 F.2d 300 (2d Cir. 1982), cert. denied,

Se Say Ce EE oko co Raweacabbundenccentaces 3

Thomas v. Shelton, 740 F.2d 478 (7th Cir. 1984) .... 8

Thompson v. Wheeler, 898 F.2d 406 (3d Cir. 1990) .. 7

Verlinden B.V. v. Central Bank of Nigeria, 461 U.S.

SN Cp eCe a ee eed eek es Cela tate kt 9, 14

Urbanizadora Villalba, Inc. v. Banco Y Angecia de

Financiamiento de la Vivienda de Puerto Rico, 845

of ee fs Be Pere eee ee ee 7

Williams v. Shipping Corp. of India, 653 F.2d 875 (4th

Cir. 1981), cert. denied, 455 U.S. 982 (1982) ...... 1S

In re Wilson Industries, Inc., 886 F.2d 93 (Sth Cir.

PAGE

Statutes

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a: ED ccanpcsseseueuacnncenccotunctnes 14

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et Se PC cancendactcccoucccssueceuaed 4, 7, 12

ee i ctvetobcencewcunsesiunceancuens 1

ea Saad ante cetuaseccuceoneuvedeaeen 10

a8 U.S.C. § 1567... 000: dikedensaunaweneseesest 12, 13, 14

eS nnn cue cneabasebesesuseeaneinn 6, 9

ie: tt EE xncntancecass$aceseucaennsnunes 6, 8

ee Te ac nedvcéckcagnccccncedecuscevat passim

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Fe as Wie Kars vecccccenccccsecccsccesncnces $

Be es Ss Ses ceccvenunesdsexuccscecess 1}

eee 7

Judicial Improvements and Access to Justice Act, Pub.

L. No. 100-702, § 202(a), 102 Stat. 4642, 4646 (1988) 4, 12

Judicial Improvements Act of 1990, Pub. L. No. 101-

650, § 310, 104 Stat. S089, S113-14 .. 2... 6... eee 12

ne ev eenebsedeseus 5

Other Authorities

H.R. Rep. No. 101-734, 10lst Cong. 2d Sess.,

reprinted in 1990 U.S. Code Cong. & Admin. News

PAGE

H.R. Rep. No. 94-1487, 94th Cong., 2d Sess.,

reprinted in 1976 U.S. Code Cong. & Admin. News

DN dae oe Nolin sce ounewses owas Gab.00 beeen wenecee’ 15

IN THE

Supreme Court of the United States

OCTOBER TERM, 1990

No. 90-1335

>

KENNETH P. NOLAN AND VERNON T. JUDKINS,

Petitioners,

—_V—

THE BOEING COMPANY, ET AL.,

Respondents.

ON PETITION FOR WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE FIFTIE CIRCUIT

>

RESPONDENTS’ BRIEF IN OPPOSITION

TO PETITION FOR CERTIORARI

OPINIONS BELOW

The Petition seeks the issuance of a Writ of Certiorari to

review the order and judgment of the United States Court of

Appeals for the Fifth Circuit, Nolan v. Boeing Co., 919 F.2d

1058 (Sth Cir. 1990) (pages 1-27 of the Appendix to the Peti-

tion), that unanimously affirmed orders of the United States

District Court for the Eastern District of Louisiana denying

Petitioners’ motion to remand (App. 28-33) and granting

Respondents’ motion to dismiss on the ground of forum non

conveniens. Petitioners challenge only the remand decision;

their Petition does not present to this Court any questions

2

concerning the propriety of the dismissal of their claims on

the ground of forum non conveniens.

COUNTERSTATEMENT OF THE CASE

These sixteen consolidated civil actions arise out of the

January 8, 1989 crash of a Boeing 737-400 aircraft operated

by British Midland Airways, Ltd. (“‘BMA"’), a regional air-

line operating principally within the United Kingdom. The

crash occurred while the aircraft was on a scheduled flight

from London, England, to Belfast, Northern Ireland. The

claimants in these actions, all of whom are citizens of foreign

countries (mostly the U.K.) and reside outside the United

States, are injured passengers, crew, bystanders, and the sur-

viving relations of forty-six persons killed in the accident.

Petitioners brought suit in Louisiana state court against Boe-

ing, the manufacturer of the aircraft, GE, one of the two

engine manufacturers, and CFMI, Inc., a corporation jointly-

owned by GE and SNECMA, the other engine manufacturer.

None of the events giving rise to the accident occurred in

Louisiana; Louisiana's sole contact with this matter is that

Boeing and GE have unrelated business activities there that

subject them to the general jurisdiction of the Louisiana

courts.

These cases present unusual facts in a unique procedural

context. Although Petitioners claim in this Court that they

criginally chose to file this lawsuit in Louisiana because

“they could obtain jurisdiction over all the primary defen-

dants’’ (Pet. 14), it is obvious that economy of litigation was

not Petitioners’ motivation. Petitioners failed to bring suit

against the inmost significant potential defendant: BMA.’

Indeed, the Air Accidents Investigation Branch (‘‘AAIB"’) of

the U.K. Department of Transport, which investigated the

accident, concluded that the cause of the accident was incor-

rect action on the part of the BMA crew. Petitioners presum-

1 Respondents are informed and believe that, after the Court of

Appeals’ decision, claimants sued BMA in England.

ably did not name BMA as a defendant in these actions

because BMA does no business in Louisiana and the Louisi-

ana courts could not obtain jurisdiction over BMA.

Petitioners also failed to sue SNECMA, an equal partici-

pant with GE in the design and manufacture of the accident

aircraft’s engines. Indeed, after Boeing added SNECMA,

Petitioners objected that SNECMA was not subject to the

jurisdiction of the Louisiana courts for claims arising out of

this accident—a contention they repeat in their Petition.’

(Pet. 3)

Petitioners’ real motivation for filing these actions in Loui-

siana was their hope that the Louisiana state courts would

not apply the doctrine of forum non conveniens to dismiss

the actions for refiling in the United Kingdom. Thus, claim-

ants tried to structure the cases so that the federal courts

would lack diversity jurisdiction even though all claimants

were foreign and all the defendants were United States corpo-

rations. In order to accomplish this goal, nominal plaintiffs

Kenneth P. Nolan and Vernon T. Judkins were appointed

representatives of the 255 foreign claimants in these actions.

Messrs. Nolan and Judkins had no contact with the claimants

they represented and, as Petitioners have admitted, were

retained by claimants’ U.S. counsel to lend their names to

these actions for the sole purpose of defeating diversity juris-

diction.’

The appointment of Nolan and Judkins to their various

representative capacities was a necessary but not sufficient

2 __— As Boeing advised the District Court, Petitioners’ argument was and

is without merit. Boeing pointed out that the FSIA provides for

nationwide personal jurisdiction over a non-immune ‘“‘foreign state.”’

See 28 U.S.C. § 1330(b) (1988); Texas Trading & Milling Corp. v. Fed-

eral Republic of Nigeria, 647 F.2d 300, 313 (2d Cir. 1982), cert.

denied, 454 U.S. 1148 (1982).

3. Judkins is a citizen of Washington, and Nolan is a citizen of New

York. Boeing is a Delaware corporation with its principal place of

business in the State of Washington, and GE is incorporated and has

its principal place of business in New York. Accordingly, should

Nolan’s and Judkins’ citizenship control, complete diversity between

plaintiffs and defendants would be absent.

4

element of Petitioners’ strategy. As soon as the appointments

were made (and in some cases even before), Petitioners filed

these actions in Louisiana state court and served the com-

plaints on defendants so that defendants’ statutory 30-day

removal period would expire prior to May 18, 1989, the

effective date of § 202(a) of the Judicial Improvements and

Access to Justice Act, Pub. L. 100-702, 102 Stat. 4642, 4646

(1988). This statute, which applied to actions removed on or

after May 18, 1989, amended 28 U.S.C. § 1332(c) to clarify

that the citizenship of a represented party, not the citizenship

of his or her representative, determines whether diversity

exists. Under this new law, there would unquestionably be

federal diversity jurisdiction over Petitioners’ claims against

Boeing, GE, and CFMI, Inc. The prior law was unclear,

however, because this Court had held 50 years ago that in

some cases the citizenship of the representative, rather than

the represented party, controls. See Mecom v. Fitzsimmons

Drilling Co., 284 U.S. 183 (1931).

Defendants timely removed these actions on May 11, 1989,

which was of necessity prior to the effective date of § 202(a)

of the new Act, on the basis that the citizenships of Nolan

and Judkins were not controlling. Respondents argued that,

even before this section became effective, the Mecom decision

was inapplicable to this situation in view of this Court's later

decision in Kramer v. Caribbean Mills, Inc., 394 U.S. 823

(1969). The District Court disagreed, however, and held that

in actions removed prior to May 18, 1989, the citizenship of

nominal parties controls. Consequently, the District Court

remanded the actions. The District Court also held that

§ 202(a) did not trigger a new 30-day removal period. Thus,

the posture of the case after remand was that complete diver-

sity existed between plaintiffs and defendants but the case

could not be removed by defendants because the law accom-

plishing that result became effective after the period to

remove had expired.

5

After the remand, Boeing moved in each action to add

SNECMA as a third-party defendant.‘ These motions were

granted without opposition, and SNECMA was served on

August 10, 1989.° On August 17, 1989, SNECMA removed

each of the sixteen civil actions to federal court. In its

removal notices SNECMA stated that, as a French corpora-

tion almost entirely owned by the French government, it

qualified as a ‘‘foreign state’’ under the Foreign Sovereign

Immunities Act (‘‘FSIA"’), 28 U.S.C. § 1602 ef seq. (1988).

The FSIA authorizes a foreign state to remove to federal

court “‘any civil action’’ brought against it in state court. 28

U.S.C. § 1441(d) (1988).

Petitioners’ motion to have their claims against Boeing,

GE, and CFMI, Inc. remanded to state court was denied on

September 23, 1989. The District Court held that, because

4 Boeing's third-party complaint set forth a prototypical claim by a

defendant in a product liability case for contribution or common law

indemnity against a component supplier whose product was alleged by

plaintiffs to have caused the accident. Boeing alleged SNECMA's role

in the design and manufacture of the engines, pointed out that ‘‘plain-

tiffs allege that the crash resulted from the failure of one of the air-

craft's CFM-S6-3C-1 engines,’’ and asserted that “‘[t]o the extent

plaintiffs’ damages, if any, were proximately caused by a failure of

one of the accident aircraft's engines," Boeing was entitled to indem-

nity or, at the least, contribution.

Notwithstanding these facts, Petitioners profess confusion about the

basis for Boeing's claim (Pet. 6 n.1, 13) and argue that Boeing's third-

party complaint ‘had litle, if any, connection to the main action."

(Pet. 6)

S On August 15, 1989, Petitioners, without giving notice to Respon-

dents, moved ex parte to “‘sever’’ the third-party claims pursuant to

Article 1038 of the Louisiana Code of Civil Procedure, which provides

for the separate trial of claims for the purpose of avoiding delay or for

the convenience of the parties or the court. Although the state court

judge signed Petitioners’ ex parte order, each of the main and third-

party claims continued to be combined in one suit under one cause

number and continued to constitute a single ‘‘civil action."" The Dis-

trict Court found that the state court's ex parte separate trials order

was irrelevant to the removal issue (App. 32), and the Court of

Appeals agreed. (App. 18-19) Those rulings are not challenged in this

Petition.

6

SNECMA had properly removed the entirety of these civil

actions, no portion of them should be remanded. Boeing then

moved to dismiss these actions under the doctrine of forum

non conveniens. On October 18, 1989, the District Court

granted Boeing's motion to dismiss, subject to certain condi-

tions. Nolan v. Boeing Co., 22 Avi. Cas. (CCH) 17,811

(E.D. La. 1989).

Petitioners appealed the order denying remand and the

order of dismissal to the United States Court of Appeals for

the Fifth Circuit, which affirmed.

REASONS FOR DENYING THE WRIT

I. The decision of the Court of Appeals in this case does not

conflict with any decision of another United States Court

of Appeals.

Petitioners’ lead argument, contained in Point | of their

Petition, is completely misleading. Contrary to Petitioners’

assertion, there is no conflict between the Fifth Circuit’s deci-

sion in this case and a ‘“‘similar decision of the Seventh Cir-

cuit... ."" (Pet. 5) In fact, neither the Seventh Circuit

decision nor any other case cited by Petitioners in Point |

even addressed the issues decided in this case. Therefore,

Petitioners’ suggestion that the cases are ‘‘hopelessly

divided"’ (Pet. 5) and their argument that this Court should

accept review to resolve ‘‘confusion’’ (Pet. 7) among the Cir-

cuits regarding the ability of a third-party defendant to

remove a civil action are without merit.

Petitioners’ argument misconceives the issues involved in

this case and relies on wholly inapplicable cases. The cases

cited by Petitioners discuss only whether: (1) a third-party

defendant qualifies as a ‘‘defendant’’ under 28 U.S.C.

§ 144l(a); or (2) a third-party claim can be ‘‘separate and

independent"’ from plaintiffs’ claims against the original

defendants and thereby form the basis for removal of the

entire civil action pursuant to 28 U.S.C. § 144l(c). Even if

there is some disagreement about these issues among courts,

-

these issues are not present in this case, which in no way

involves either of subsections 144](a) or 1441(c).

In this case, the Fifth Circuit addressed the scope of

removal under the FSIA, 28 U.S.C. § 1441(d). The Fifth Cir-

cuit held that ‘‘when a third party [foreign state] defendant

avails itself of removal jurisdiction under section 1441(d), at

least where minimal diversity exists between the parties to the

main claims, it removes not just the third party claims but

the main claims as well’’.° (App. 17-18) No Court of

Appeals, other than the Fifth Circuit in this case, has

addressed the application of 28 U.S.C. § 144i(d) to a third-

party defendant. However, numerous analogous statutes,

e.g., 28 U.S.C. § 1442(a) (1988), 28 U.S.C. § 2679(c) (1988),

and 12 U.S.C. § 1819 (1988), allow a party to remove a

“‘civil action’’ against that party on the basis of the party’s

identity or status. Court of Appeals decisions interpreting

these sections have uniformly held that a third-party defen-

dant can remove under these statutes and in doing so remove

the entire civil action, not merely the third-party claims.

These decisions are from the Courts of Appeals for the First,

Second, Third, Fifth, Eighth, and Tenth Circuits. See, e.g.,

Thompson v. Wheeler, 898 F.2d 406, 409 (3d Cir. 1990)

(applying 28 U.S.C. § 2679(c)); Urbanizadora Villalba, Inc.

v. Banco Y Angecia de Financiamiento de la Vivienda de

Puerto Rico, 845 F.2d 1 (ist Cir. 1988) (applying 12 U.S.C.

§ 1819); Falls Riverway Realty v. City of Niagara Falls, 732

F.2d 38 (2d Cir. 1984) (applying 28 U.S.C. § 1442(a)); John-

son v. Showers, 747 F.2d 1228, 1229 (8th Cir. 1984) (apply-

ing 28 U.S.C. § 1442(a)); Goodrich v. Burlington Northern

6 In addition to finding that minimal diversity existed between the par-

ties to the main claims, the Fifth Circuit also stated that, at the time

SNECMA removed the case to the District Court, ‘there was actually

complete diversity between the plaintiffs and defendants pursuant to

28 U.S.C. § 1332(c)."" (App. 10) (Emphasis in original.) Petitioners

nevertheless state in their Petition that ‘‘there is no independent federal

jurisdiction over the main action”’ (Pet. 5) and that ‘the Fifth Circuit

seems to have overlooked’’ that the ‘‘suit between original parties. . .

has no independent basis for federal jurisdiction.’’ (Pet. 16)

R.R. Co., 701 F.2d 129, 130 (10th Cir. 1983) (applying 28

U.S.C. § 1442(a)); IMFC Professional Services of Florida,

Inc. v. Latin American Home Health, Inc., 676 F.2d 152 (Sth

Cir. 1982) (applying 28 U.S.C. § 1442(a)). The decision below

is in accord with the unanimous rule of these cases.

Further, the holdings in this case and the other cited cases

that a third-party defendant’s removal removes the entire

case honor the longstanding Congressional preference that

the entire civil action is removed and not just the claims

against the removing party.’ See Barney v. Latham, 103 U.S.

205, 209 (1881); Texas Employers Ins. Ass'n v. Felt, 150 F.2d

227, 234-35 (Sth Cir. 1945). The instant case does not present

an appropriate occasion to reconsider this well-established

doctrine.

As for Petitioners’ claim that the Fifth Circuit's decision in

this case conflicts with a ‘“‘similar decision of the Seventh Cir-

cuit’’, the only decision of the Seventh Circuit (or any other

Circuit) even cited by Petitioners in Point 1 is Thomas v.

Shelton, 740 F.2d 478 (7th Cir. 1984), which appears in a

footnote (Pet. 7n.3) and is not otherwise discussed. In

Shelton, the Seventh Circuit addressed the issue of removal

by a third-party defendant under 28 U.S.C. § 1441(c). 740

F.2d at 482. The court was not faced with, and did not

address, the scope of removal under 28 U.S.C. § 1441(d).°

Petitioners’ use of cases decided under § 1441(c) to suggest

that the Fifth Circuit incorrectly interpreted § 1441(d) is not

only misleading but is also illogical. These statutes have dif-

ferent language and different purposes; further, they have

markedly different policies. The purpose of § 1441l(c) was

explained by the Seventh Circuit in Shelton:

7 The only present exception to this rule concerns bankruptcy remov-

als under 28 U.S.C. § 1452 (1988), which allows a party to remove

‘‘any claim or cause of action in a civil action."" See In re Princess

Louise Corp., 77 B.R. 766, 769 (C.D. Cal. 1987).

8 It is perhaps telling that this so-called ‘‘similar’’ case was never even

cited by Petitioners to either the District Court or the Court of

Appeals.

9

The apparent purpose of this provision and its predeces-

sor, 28 U.S.C. § 71 (1940 ed.), was to prevent a plaintiff

who sues a defendant in state court on a claim within

the federal court’s original jurisdiction from attempting

to defeat the defendant's right of removal by joining a

claim not within that jurisdiction.

740 F.2d at 482. Moreover, as is the case with removal under

28 U.S.C. § 1441(a) and § 1441(b), federal courts have nar-

rowly construed this particular removal provision in order to

demonstrate ‘‘due regard for the rightful independence of

state governments.’’ Shamrock Oil Corp. v. Sheets, 313 U.S.

100, 108-109 (1941).

On the other hand, § 1441(d) was enacted as part of the

FSIA, and its purpose is to concentrate litigation involving

foreign states in the federal courts in order to achieve uni-

form standards of decisional law. As this Court stated in

Verlinden B.V. v. Central Bank of Nigeria, 461 U.S. 480, 497

(1983), § 1441(d) was enacted because ‘‘Congress deliberately

sought to channel cases against foreign sovereigns away from

the state courts and into federal courts... .”’

In the case of § 1441(d), Congress created a distinct prefer-

ence for removal by foreign states as compared to the right

of other parties to remove under provisions like §§ 1441(a)-

(c). As a result, federal courts have generally declined to

apply to § 1441(d) the proposition that removal statutes

should be strictly construed. See, e.g., Proyecfin de Venezu-

ela, S.A. v. Banco Industrial de Venezuela, 760 F.2d 390,

396-397 (2d Cir. 1985) (‘‘Congress’s intent to create a broad

removal right is further substantiated by reference to the leg-

islative history of the [Foreign Sovereign Immunities} Act’).

In summary, there is no conflict between this case and any

decision of any other Circuit. Petitioners ultimately admit

this fact in the first sentence of their Point Il: ‘*[NJone of the

cases cited in Point I deal with the precise issue presented

here... :”” (Pet. 8)

10

Il. There are no other special or important reasons for

reviewing the judgment below.

In Points Il and III of the Petition, Petitioners attempt in

various ways to persuade the Court that there are significant

issues here that warrant review. All of these arguments are

without merit.

A. Petitioners’ collusion argument is without merit.

Petitioners claim that Boeing’s assertion of third-party

clauns against SNECMA was a “‘collusive ploy’’ (Pet. 14) to

create jurisdiction in this matter. The Fifth Circuit correctly

determined that this argument was ‘‘frivolous.’’ (App. 20)

This Court decided long ago that the assertion of a good-

faith claim by a party with a real and substantial interest in

that claim cannot be ‘‘collusive’’ for purposes of 28 U.S.C.

§ 1359 and its predecessor statutes. Jn re Metropolitan Ry.

Receivership, 208 U.S. 90, 111 (1908); Chicago v. Mills, 204

U.S. 321, 330 (1907) (holding that a party’s motive for pre-

ferring a federal tribunal is immaterial).’

Petitioners assert that SNECMA’s waiver of jurisdictional

immunity somehow indicates collusion between itself and

Boeing regarding the removal of the action. (Pet. 6) SNEC-

MA’s waiver of immunity was not only irrelevant to the deci-

sions below,”° but Petitioners’ arguments ignore the fact that

SNECMA had good reason to waive any jurisdictional immu-

nity it might have in this case. SNECMA determined that,

9 Cases decided under the predecessors of 28 U.S.C. § 1359 have con-

tinuing validity in interpreting that section. Kramer v. Caribbean Mills,

Inc., 394 U.S. 823, 826 (1969).

10 SNECMA'’s waiver was filed the same day the District Court dis-

missed the actions and neither the District Court nor the Court of

Appeals even referred to the waiver. Furthermore, the District Court's

opinion cited a Fifth Circuit Case holding that if a case can be dis-

missed on forum non conveniens grounds the immunity issue need not

be decided. Nolan v. Boeing Co., 22 Avi. Cas. (CCH) 17,811, 17,812

n.1 (E.D. La. 1989), citing Forsythe v. Saudi Arabian Airlines Corp.,

885 F.2d 285 (Sth Cir. 1989).

1]

after carefully considering its alleged commercial activity in

the United States and the time, effort, and expense that

would result if it were to maintain its immunity defense, and

after considering the likelihood of an early dismissal of this

case in its entirety on the ground of forum non conveniens, it

was in SNECMA'’s best interest to waive (in this case only) its

immunity under the FSIA pursuant to 28 U.S.C. § 1605(a)(1)

(1988). In so doing, SNECMA reserved to itself all other

entitlements, rights, and privileges granted by the FSIA. In

addition, SNECMA determined that, although it is in its

interest to have this case litigated in the United Kingdom, it

is also in its interest to have this case litigated in a federal

forum if it is to be litigated in the United States. As the

Court of Appeals correctly observed, ‘‘[t]he outcome of the

main suit very much affects SNECMA'’s rights.”’ (App. 15)

In summary, Petitioners are not in a credible position to

assess the interests of SNECMA in this case.

Petitioners’ ‘‘collusion’’ claim was carefully considered and

rejected by both lower courts. In any event, Petitioners’ argu-

ments present no issue of general significance that this Court

should address.

B. Petitioners’ Finley argument is without merit.

Petitioners argue in Point II of the Petition that the Court

of Appeals’ decision ‘‘directly conflicts’’ with this Court's

recent decision in Finley v. United States, 490 U.S. 545

(1989), which held that a different statute, the Federal Tort

Claims Act (*‘FTCA’’), 28 U.S.C. § 1346(b) (1988), does not

authorize supplemental jurisdiction over non-federal claims.

(Pet. 10) This argument is legally incorrect and, in view of

the substantial statutory changes made since Finley, does not

present a significant issue for the Court.

First, as the Fifth Circuit carefully explained in its opinion,

there is no conflict between its decision and Finley. Unlike

the situation in Finley, when Congress enacted the FSIA it

expressly provided in § 1441(d) for federal jurisdiction over

the entire ‘‘civil action’’ in cases involving foreign states,

12

which necessarily includes claims involving other parties.

Teledyne, Inc. v. Kone Corp., 892 F.2d 1404 (9th Cir. 1990);

Arango v. Guzman Travel Advisors Corp., 621 F.2d 1371°

(Sth Cir. 1980).

Second, notwithstanding Petitioners’ frequently repeated

contention that their claims are not within the District

Court's original diversity jurisdiction, these cases were prop-

erly removed by SNECMA after the effective date of the leg-

islation clarifying that the citizenship of the represented

parties should be considered in determining if diversity exists.

See 28 U.S.C. § 1332(c)(2) (as amended by Pub. L. 100-202,

§ 202(a), 102 Stat. 4642, 4646 (1988)). As a result, the Fifth

Circuit held that Petitioners’ claims against Boeing, GE, and

CFMI, Inc. were within the District Court's original jurisdic-

tion at the time of SNECMA's removal. (App. 10) The fact

that the defendants were unsuccessful initially in removing

these claims prior to the effective date of the amendment to

§ 1332(c) is irrelevant. Further, the statutory change gives this

case a unique factual and procedural posture. The improba-

bility of such a situation arising again is reason enough for

this Court to deny the Petition."

Third, and perhaps most importantly, Finley itself has been

legislatively overruled, and future cases will necessarily

present very different issues from this case. Section 310 of

the Judicial Improvements Act of 1990, Pub. L. No. 101-650,

104 Stat. 5089, 5113-14 (codified as 28 U.S.C. § 1367),

expressly provides for the sort of supplemental jurisdiction in

11 Because of the quirk that the main claims were within the original

jurisdiction of the federal court even though they could not be

removed, they would have remained in federal court even if SNECMA

had been dismissed. See, ¢.g., In re Wilson Industries, Inc., 886 F.2d

93, 96 (Sth Cir. 1989). Typically this will not be the case, and pendent

state law claims will be subject to remand if the federal claims are dis-

missed. Carnegie-Mellon University v. Cohill, 484 U.S. 343 (1988). See

U.S.C. § 1367/c\(3) (as amended by Pub. L. 101-650, § 310, 104 Stat.

$089, $113-14). This fact disposes of Petitioners’ claim that, if the

Fifth Circuit's decision is permitted to stand, foreign state defendants

will be impleaded on the meresit “‘pretense’’ (Pet. 8, 9) which ‘will

result in an avalanche of parties seeking removal. . . ."" (Pet. 8)

13

the federal courts that this Court found not to exist in Finley

and which Petitioners contend does not exist under the FSIA.

The new § 1367(a) provides, in relevant part:

{I]n any civil action of which the district courts have

Original jurisdiction, the district courts shall have supple-

mental jurisdiction over all other claims that are so

related to claims in the action within such original juris-

diction that they form part of the same case or contro-

versy under Article II] of the United States Constitution.

Such supplemental jurisdiction shall include claims that

involve the joinder or intervention of additional parties.

This new statute was Congress’s response to this Court's

comment in Finley that ‘‘[w]hatever we say regarding the

scope of jurisdiction conferred by a particular statute can of

course be changed by Congress"’, 490 U.S. at 556, and elimi-

nates for future cases the so-called conflict that the Petition-

ers allege exists in this action. As stated in the legislative

history to this new statute, ‘“‘[iJn providing for supplemental

jurisdiction over claims involving the addition of parties, sub-

section (a) explicitly fills the statutory gap noted in Finley v.

United States.’ H.R. Rep. No. 101-734, 101st Cong. 2d Sess.

29, reprinted in 1990 U.S. Code Cong. & Admin. News 6802,

6875. The statutory change after this case arose refutes Peti-

tioners’ claim that the Fifth Circuit's ruling has some broad

applicability to future cases.

Petitioners nevertheless try to give a semblance of public

significance to this case by arguing that the law under which

it was decided is unaffected by § 1367. Their argument seems

to be that § 1367 does not apply to FSIA jurisdiction and

that a Congressional intent to narrow FSIA jurisdiction

should be read into the fact that § 1441(d) was not itself

amended. While questions as to the relationship of the 1990

legislation to the FSIA are obviously for another day, Peti-

tioners’ argument that § 1367 is irrelevant can be easily dis-

missed.

14

Petitioners state that § 1367 permits supplemental (also

called ‘‘pendent party’’) jurisdiction ‘‘only in a case where a

well-pled federal question is the primary basis of federal

jurisdiction’’, apparently attempting to distinguish such cases

from FSIA cases for which, they say, ‘“‘pendent party juris-

diction of the federal court is not allowed.’’ (Pet. 12) In fact,

by its plain language, § 1367 applies to ‘‘any civil action of

which the district courts have original jurisdiction.’ Under 28

U.S.C. § 1330(a), the district courts have ‘‘original jurisdic-

tion of any nonjury civil action against a foreign state.’’

FSIA cases are squarely within the class of cases to which the

new legislation applies.

C. Petitioners’ argument concerning the purpose of the

FSIA is without merit.

In a further attempt to attract this Court’s attention to this

case, Petitioners have raised an issue that was not raised in

the Fifth Circuit. Petitioners argue that ‘‘the sole purpose”’

for allowing a foreign state to remove under 28 U.S.C.

§ 1441(d) is to provide a federal forum for the adjudication

of sovereign immunity. (Pet. 9-10, 13) This argument is with-

out supporting authority and is frivolous. When Congress

enacted the FSIA, it intended that a// issues in cases involving

a foreign state could be brought before a federal district

court, not just the issue of sovereign immunity. This conclu-

sion follows from the plain language of the statute. It is

made more clear by the legislative history and is confirmed

again by the case law. As this Court stated in Verlinden B.V.

v. Central Bank of Nigeria, 461 U.S. at 489, ‘‘the Act guar-

antees foreign states the right to remove any civil action from

a state court to a federal court.’ (Emphasis supplied.)

The legislative history to the FSIA specifically states that

**broad jurisdiction in the Federal courts should be cenducive

to uniformity in decision, which is desirable since a disparate

treatment of cases involving foreign governments may have

adverse foreign relations consequences’’ and that ‘‘[iJn view

of the potential sensitivity of actions against foreign states

and the importance of developing a uniform body of law in

15

this area, it is important to give foreign states clear authority

to remove to a Federal forum actions brought against them

in the State courts.’’ H.R. Rep. No. 94-1487, 94th Cong., 2d

Sess. 13, 32, reprinted in 1976 U.S. Code Cong. & Admin.

News 6604, 6611, 6631. An even clearer statement of the leg-

islative purpose is contained in the report of the American

Bar Association Section of Internauonal Law to the House of

Delegates recommending passage of the FSIA:

The bill will ensure that the federal courts have subject

matter and personal! jurisdiction over foreign states that

are not entitled to immunity for claims against them by

American citizens. . . . [F]rom the perspective of the

foreign states, the removal provision in the bill will

allow them to seek in the federal courts what they may

regard as greater impartiality and uniformity of deci-

sion.

1976 A.B.A. Int'l L. Rep. 101B at 10. See Arango v. Guz-

man Travel Advisors Corp., 621 F.2d at 1376-77 n.6 (‘‘the

federal hearing is not restricted to [the sovereign immunity]

issue but must proceed to the merits when the foreign state is

found not to be immune."’)” Petitioner's accusations that

**SNECMA clearly did not invoke the federal court jurisdic-

tion in good faith since it waived its claim of immunity

immediately after removal’’ (Pet. 4) and that SNECMA ‘“‘did

not honestly seek the federal court for the determination of

its immunity’’ (Pet. 6) misconceive the scope of SNECMA's

right under the FSIA to litigate all issues in federal court.

12 A survey of the case law illustrates that foreign states often remove

without even making a claim of immunity. For example, a foreign

state which has engaged in commercial! activity in the United States

may remove a civil action originally commenced in state court simply

to extinguish a plaintiff's demand for a jury trial. See, e.g., Williams

v. Shipping Corp. of India, 683 F.2d 875 (4th Cir. 1981), cert. denied,

455 U.S. 982 (1982); Mori v. Port Auth. of New York and New Jersey,

100 F.R.D. 810 (S.D.N.Y. 1984); Herman v. El Al Israel Airlines,

Lid., $02 F.Supp. 277 (S.D.N.Y. 1980).

16

D. Petitioners’ “‘comity’’ and “federalism” arguments

are without merit.

There are no significant comity and federalism issues

present in this case that warrant this Court's attention.

SNECMA's removal of these actions pursuant to the FSIA

rests upon strong federal interests, namely relations with for-

eign governments. Moreover, because this case has no con-

nection whatsoever with Louisiana, there are no significant

State interests which might take precedence over these federal

interests.

This case arises out of an aircraft accident that occurred on

a domestic flight in a foreign country. The claimants are vir-

tually all citizens or residents of the United Kingdom; none

of them are residents of Louisiana or even of the United

States. Furthermore, none of the Respondents are incorpo-

rated in, or have their principal place of business in, Louisi-

ana, and none of Petitioners’ claims against Respondents

arise out of any acts or omissions that occurred in or had any

impact in Louisiana. There is simply no plausible, much less

compelling, policy of comity or federalism that dictates that a

Louisiana state court should decide this case.

17

CONCLUSION

The decision of the Fifth Circuit is not in conflict with any

decision of this Court or of any other Court of Appeals. Fur-

thermore, the decision of the Fifth Circuit does not raise any

important issues regarding the Foreign Sovereign Immunities

Act of 1976, this Court’s Finley decision, the existence of

supplemental jurisdiction, or the relationship between the

state and federal courts. Finally, the Fifth Circuit correctly

decided the scope of removal under 28 U.S.C. § 1441(d) and

correctly concluded that each removed civil action was within

its jurisdiction. Therefore, the Petition for a Writ of Certio-

rari should be, in all respects, denied.

Respectfully Submitted,

Keith Gerrard

John D. Dillow*

Richard C. Coyle

Mark H. Lough

PERKINS COIE

1201 Third Avenue

40th Floor

Seattle, Washington 98101

Randal R. Craft, Jr.*

Michael S. Mitchell

HAIGHT, GARDNER, POOR

& HAVENS

195 Broadway

New York, New York 10007

(212) 341-7000

Attorneys for Respondents

(206) 583-8888

Attorneys for Respondent

The Boeing Company

*Counsel of Record

General Electric Company,

CFM International, Inc.,

and Societe Nationale

d’Etude et de Construction

de Moteurs d’Aviation,

S.A. (SNECMA)