Opposition Brief — Exportadora de Sal, S. A. de C. V. v. Sugimoto
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No. A 94-651
IN THE
SUPREME COURT OF THE UNITED STATES
OCTOBER TERM, 1994
EXPORTADORA DE SAL, S.A. DE C.V.,
Petitioner,
VS
HIROKO SUGIMOTO, et al.,
Resp yndents
On Petition for Writ of Certiorari
to the United States Court of Appeals
for the Ninth Circuit
RESPONDENTS’ BRIEF IN OPPOSITION
TO THE PETITION FOR CERTIORARI
Robin E. Foor
Counsel of Record
Law Offices of Robin E. Foor
2843 Alhambra Drive
Belmont, CA 94002-1351
Tel: 415-591-5390
Fax: 415-593-4622
Attorney for Respondents
QUESTIONS PRESENTED.
1. Whether there is jurisdiction under the Foreign
Sovereign Immunities Act where decedents were killed in
the United States, giving rise to a wrongful death case
against a business corporation, majority-owned by a foreign
State, where:
(a) defendant assumed a duty in the United States
to transport the decedents non-negligently,
(b) defendant arranged decedents’ round-trip
transportation through defendant’s office in the United
States,
(c) defendant agreed to transport the decedents as
the carrier from the United States to Mexico and back,
(d) defendant began the trip by transporting the
decedents as the carrier from the United States,
(e) defendant delegated the return flight from
defendant’s company town to a substitute for the company
airplane, the substitute acting as a contract carrier,
(f) the pilot, engaged by the defendant on a
scheduled flight on the corporate transportation link,
transported decedents in the United States on behalf of the
corporation, and
(g) negligent piloting in United States airspace
caused the airplane to crash in the United States killing all
on board, as part of the return trip to the United States?
2. Is there jurisdiction under the Foreign Sovereign
Immunities Act, implied waiver exception, where the
defendant waives sovereign immunity in opening statement
and stipulates to jurisdiction at trial?
Parties to the Proceeding
Petitioner is Exportadora De Sal, S.A. De C.V.
("Exportadora”), a Mexican corporation, majority owned by
the United Mexican States, a foreign state.
Respondents are Hiroko Sugimoto, Kimiko Kodani,
Mayumi Nukiwa, and Kuniko Omachi, individually and as
Guardian Ad Litem on behalf of Eri Omachi, a minor.
Mitsukuni Sugimoto, Yasunobu Sugimoto, and
Kyoko Kodani are no longer parties to the case.
Exportadora’s statement does not accurately state
the parties to the case.
Rule 29.1 Listing
Exportadora is forty nine percent owned by
Mitsubishi Corporation ("Mitsubishi"), the parent company
of the Mitsubishi group, which issues shares to the public
traded on the Tokyo, London and Paris stock exchanges.
TABLE OF CONTENTS
Page Number
QUESTIONS PRESENTED ........-----0- +0005:
Parties to the Proceeding ..........--+eeeeeeeees il
Rule 29.1 Listing ...... 0... c cece cece cceeees ii
Table of Contents- ...........2-ce cece eeees eee
Table of Authorities ...........c cece ecceceeees vi
OPINIONS AND DECISIONS BELOW ..........-. 1
es 9 ee ce 2
STATUTE INVOLVED ...... | era ee 2
STATEMENT OF THE CASE .......----eeeeee: 2
I. ee 2
Il. PROCEEDINGS BELOW
AND JURISDICTION IN
THE DISTRICT COURT. .........5e------ 9
SUMMARY OF ARGUMENT .........---+++:: 12
REASONS FOR DENYING THE PETITION ...... 14
I. THERE IS NO CONFLICT WITH
SUPREME COURT DECISIONS ..........-. 14
A. Exportadora’s Contentions ...........+-+- 4
B. Saudi Arabia is Correctly Applied .......- 15
ill
1. The Case is Based on Commercial
Activity Carried on by Exportadora
Having Substantial Contact with
Re ee 15
2. The Pilot was Exportadora’s Agent
Under a Non-delegable Duty ............ 17
3. The Accident was Foreseeable in the
United States and the Pilot was
Authorized to be in the United States ..... 18
4. The Decisions of the Ninth Circuit are
Correct and Consistent with Saudi Arabia .. 21
Dy Se EN in ob av a vn ee ewe 23
G, COMOMNIDES AOMEY . nc ccc ccc ce cccesoes 23
7. The Substitute was Acting as a
Contract Carrier, not Acting as
Ge ik os oe nee ks ctbacees 24
C. There is No Conflict with Weltover ........ 24
THERE IS NO CONFLICT WITH
eee er 25
A. There is No Issue of Separate
SE ND Sa A Ho ii ess 25
B. The Circuits Agree that the Principal’s
Commercial Activity, Carried On Through
an Agent in the United States, is the
Principal’s Commercial Activity
Re I Fs bs ovens Oe hiv a oe oaks 27
iv
lil. OTHER EXCEPTIONS, ALLEGED AND
ARGUED, ESTABLISH JURISDICTION .... 28
IV. THE TWO-COURT RULE............... 30
A CAAA ok ew ne Vanden eemenendd 30
Table of Authorities
Cases: Page Number
Alaska Airlines v, Sweat,
_ S6B F.2d 916 (Aleske 1977) ... 2c ccccccccsss 18
470 U.S. 564, 574-575, 84 LEd.2d 518,
SED, TES Ge BASF Cee vcccccevcccces 23, 24
24 F.3d 39, 40 (9th Cir. 1994)............... 24
rv il Regional
851 F.Supp. 580, 584-585 (S.D.N.Y. 1994) ...... 25
Barkanic v, CAAC,
822 F.2d 11, 13-14 (2nd Cir. 1987) ........... 23
Boise Payette Lumber Co. v. Larsen,
214 F.2d 373, 376 (9th Cir. 1954) ............ 21
r h iv r :
203 Cal. 493, 497-498 (1928) ............ 16, 23
City of Los Angeles v. Meyers Bros.
Parking System, Inc.,
54 Cal.App.3d 135, 138,
126 Cal.Rptr. 545 (1975) ............000 eee 17
C ‘al Bank of Kuwait v. Rafidain Banl
15 F.3d 238, 241 (2nd Cir. 1994) ............ 27
vi
Tee rene bie fasion. 5.2. sr | ag ope
859 F.2d 1354, 1360 (9th Cir. 1988) .......... 28
623 F.2d 1084 (Sth Cir. 1980) ............... 24
’ Vv i,
- 32 F.2d 77, 80 (4th Cir. 1994) ............05. 29
Federa! Ins. Co. v. Richard I, Rubin & Co. Inc.
12 F.3d 1270 (3rd Cir. 1993), cert. denied sub nom.,
<
Pensionenfonds, 128 L.Ed.2d 663 (1994) .... 26, 27
819 F.2d 1511, 1515 (9th Cir. 1987) .......... 29
Goodman v, Lukens Steel Co.,
482 U.S. 656, 665,
96 L.Ed.2d 572, 107 S.Ct 2617, 2673 (1987) .... 30
i in hlmann,
853 F.2d 445, 453 (6th Cir. 1988) ......... 10, 27
Graver Tank & Mfg. Co. v. Linde Air Prod. Co.,
336 U.S. 271, 275,
Re Se ee) 30
Hopkins v, Yellow Cab,
114 Cal.App.2d 394, 397-398 (1952) .......... 24
Insurance Corp, of Ireland, Ltd. v.
; Se dion: Bteetions. de. Chet
456 U.S. 694, 72 LEd.2d 492,
102 S.Ct. 2099, 2104-2105 (1982) ............ 12
vii
830 F.2d 1018, 1021 (9th Cir. 1987)
cert. denied, 485 U.S. 905, 108 S.Ct.
SOTT, SP CRIs BO GIOED cc cc ccccccscess 19
Land v. Dollar,
330 U.S. 731, 735 n. 4, 67 S.Ct. 1009,
1011 n. 4, 91 L.Ed. 1209 (1947) ............. 10
69 Cal.2d 442, 446 (1968)........-0eseeeeee 17
Maritime International Nominees
m lic of Guin
693 F.2d 1094, 1105 (D.C.Cir. 1982) epee 27
v, City of Angeles,
56 Cal.3d 202, 213, 285 Cal.Rptr. 99,
814 P.2d 1341 (1991) ............... 18, 19, 21
Michelin Tir Vv leman :
oe Re re 16
nv, Ki f i Ar :
27 F.3d 169, 172 (Sth Cir. 1994) ............. 10
iola v Kautz Co.,
199 Cal.App.3d 98, 108,
BP CAE: HT CRUE) 5 oo nce wee sccweccess 17
n V ent of
729 F.2d 641, 644 (9th Cir.), cert.
denied sub nom., United Mexican States v,
Olsen by Sheldon, 469 U.S. 917,
105 S.Ct. 295, 83 L.Ed.2d 230 (1984) ......... 19
Viii
504 U.S. --, 119 LEd.2d 394,
112 S.Ct. 2160 (1992)... 12-15, 23, 25, 28
95 Cal.App.3d 603, 611,
157 Cal.Rptr. 272 (1979) .................. 21
503 U.S. - 123 L.Ed.2d 47,
113 S.Ct. 1471 oo ee 11-15, 17, 21, 22
5, 8, 9, 11, 15
- 16, 21. 22
ey
965-F 2d 699. 721-723 (9th Cir. 1992),
cént. denied, - - U.S. - -, 113 S.Ct. 1812,
123 LEd2d 4441993)... 29
626 F.2d 270, 271-273 (3rd Cir. 1980) ...... 23, 27
j Vv r al
S.A. De C.V,,
19 F.3d 1309 (9th Cir. 1994)... 1, 3-5, 12, 15, 16
18, 20, 22. 25
647 F.2d 300, 304, 313 (2nd Cir. 1981) ........ 27
ee. mp eee:
767 F.2d 999, 1003 (D.C.Cir. 1985) ........... 27
fe ee ae) 29
Van Arsdale v. Hollinger,
68 Cal.2d 245, 253, 66 Cal.Rptr. 20,
re ee fo Bae. | | re 12, 18
Vargas v. Ruggiero,
197 Cal.App.2d 709, 716,
SF PE EEOUED Secs ccceeweeseesees 21
Verlinden B.V, v. Central Bank of Nigeria,
461 U.S. 480, 76 L.Ed.2d 81,
eee 12
Vermeulen v, Renault U.S.A.,, Inc.,
985 F.2d 1534, 1545 (11th Cir. 1993),
cert. denied, 124 L.Ed.2d 246 (1993) .......... 28
Wheeler v, San Francisco and Alameda R.R.,
31 Cal. 46, 49, 53-54 (1866) ............208. 23
Whittaker Corp. v. Execuair Corp.,
Soo Fae aa, Dao (ome Cat. T9892) . nc cece 21
Yanez v. United States,
oe ee, Fe ae. c) ran 24
Statutes, Rules and Legislative Materials:
28 U.S.C
EE ne 2
oth on ei get: ae 2
I ee 10
a Fis you om wale bod oon o wo ig 18
UE 5G 65s os 5.46 hae bv ck vn cnt 15
a, er ens 28, 29
2... |) ane 10, 15
Boonen... eee 29
Bolan wi, &) ee 28
2 rr ne 12, 29
Cal.Civ.Code
ee eg peo gag hace thd Pec. 20
Me 5S go ok ow ooh. oe pave eg cs 26
Fed.R.Civ.P.
oe oko ea bw vce cicecccnn. 10
I et oo, Cy lk ee 22
Fed.R.Evid.
nos a RR 8
H.R.Rep. No. 1487, 94th Cong., 2nd Sess. 16,
reprinted in 1976 U.S. Cong. & Admin. News 6604
syle OTE EE Pee nnn ape 15
Rules of the Supreme Court of the United States
coy Sin... A ere 2
= eens 2
pout, a: Sue ee ne 2
Other Authorities:
1 Witkin, Summary of California Law,
9th Ed. 1987, Contracts,
ee oR iss aie es 16
2 Witkin, Summary of California Law,
9th Ed. (1987), Agency and Employment,
OE CEs ve bn Pe wh ebb bad dedckaee 26
PES a5 abr oaks ieee 20
xii
seeks to have reviewed is
No. A 94-651
IN THE
SUPREME COURT OF THE UNITED STATES
OCTOBER TERM, 1994
EXPORTADORA DE SAL, S.A. DE C.V..,
Petitioner,
VS.
HIROKO SUGIMOTO, et al.,
Respondents
On Petition for Writ of Certiorari
to the United States Court of Appeals
for the Ninth Circuit
RESPONDENTS’ BRIEF IN OPPOSITION
TO THE PETITION FOR CERTIORARI
OPINIONS AND DECISIONS BELOW
The opinion of the court of appeals that petitioner
S.A. De C.V,, 19 F.3d 1309 (9th Cir. 1994). (A 110) ' The
findings and conclusions of Senior District Judge James M.
' The appendix is cited by page and finding number. Respondents’
Appendix begins at page 106, after Exportadora’s 105 pages.
1
Fitzgerald at trial were a memorandum decision of March
9, 1993. (A 12-76) An order amending judgment was filed
May 7, 1993. (A 117) ? Final judgment was entered in
district court on May 11, 1993. (A 147) ?
Memorandum decisions were entered denying
Exportadora’s motion to dismiss for sovereign immunity on
June 29, 1989 (A 121)*, and determining that California
law is applicable on August 31, 1989. (A 131)°
Exportadora’s interlocutory appeal on sovereign immunity
and choice of law is Schoenberg v
S.A. De C.V., 930 F.2d 777 (9th Cir. 1991). (A 88)
JURISDICTION
Exportadora seeks certiorari. 28 U.S.C. § 1254(1).
STATUTE INVOLVED
The Foreign Sovereign Immunities Act, 28 U.S.C. §§
1330, 1602-1611, excerpted in the Appendix. (A 106)
STATEMENT OF THE CASE
A. FACTS.
The petition speaks as if the decedents had nothing
2 Required by Rule 14.1(k)(i) and omitted by Exportadora from the
Appendix.
3 Required by Rule 14.1(k)(iv) and omitted by Exportadora from the
Appendix.
‘ Required by Rule 14.1(k)(ii) and omitted by Exportadora from the
Appendix.
5 Required by Rule 14.1(k)(ii) and omitted by Exportadora from the
Appendix.
to do with the United States and nothing to do with
Exportadora. To the contrary, decedents were Exportadora’s
passengers and business visitors, killed in San Diego,
California on September 30, 1987 by Exportadora’s
negligent commercial activity.
The case is based on transactions and events that
occurred in the United States. Exportadora is a salt
manufacturer with an office in San Diego, California. The
travel arrangements for decedents were made through
Exportadora’s San Diego office. Schoenberg at 781. (A 97)
The round trip began and ended in San Diego. The
negligence occurred here. The non-delegable duty was
assumed by the defendant in the United States. The
decedents were accepted as defendant’s passengers for
carriage through defendant’s San Diego office. The
decedents were killed in the United States while Exportadora
was transporting them, through its agent under a non-
delegable duty, on a trip to the United States.
Exportadora agreed to transport the passengers, as the
camer for a round trip, between San Diego and Guerrero
Negro. (A 47-48 F 97-98: A 51 F 103; A 62 F 122; A 65 F
126; A 48 F 100; A 236.) Exportadora’s assertion that it
only "agreed to arrange for transportation to Guerrero
Negro and back" is contrary to the findings. Exportadora
transported the passengers round trip from San Diego. (A
46 F 97-A 47 F 98; A 52 F 104-105)
The district court found that the transportation of the
passengers from Guerrero Negro to Tijuana was on behalf of
Exportadora. (A 31, F 49)
The Ninth Circuit in Sugimoto affirmed the district
court’s factual finding that Exportadora was engaged in
commercial activity in the United States when the air taxi
flew in United States air space. The charter flight was acting
for Exportadora in transporting the passengers. (A 31 F 49; A
232-233, 239)
In Sugimoto, the Ninth Circuit correctly affirmed
that "Exportadora controlled the transportation offered to
3
business visitors to its [Guerrero Negro] plant and company
town ... arranged for their transportation, paid all the
expenses, fed them, determined where they would stay and
how they would come and how they would go.” (A 8)
The passengers were scheduled to travel ound trip
on the company airplane. (A 52 F 104; A 228) Exportadora
chartered the air taxi as a substitute for the company
airplane. (A 52 F 104; A 227) The carrier-passenger
relationship between Exportadora and the decedents
continued to the time of the accident. (A 48 F 98; A 55 F
110; A 24 F 33)
There were no tickets for the flight. (A 213 4% 32)
Exportadora’s assertion that all decisions regarding
the travel arrangements were made in Mexico and Japan is
contrary to the record. There is no evidence of any decision
in Japan. The district court found that Exportadora made
all the arrangements (A 22 F 22), and that the passengers
had nothing to do with any arrangements for their travel
and accommodations. (A 22 F 22; A 55 F 110)
The agreement to transport the passengers was made
through the San Diego office. (A 15 F 6; A 211 4% 18; A 231;
A 225, 227-228, 230-231) Exportadora’s San Diego office
put the passengers on the list to travel. (A 231)
Exportadora’s employees or representatives in San Diego
accepted the decedents in the United States as Exportadora’s
passengers, when their trip to Mexico began. (A 19 F 14; A
20 F 16)
Exportadora is one of the world’s largest commercial
salt producers, 51% owned by the United Mexican States
("Mexico") and 49% by Mitsubishi Corporation
("Mitsubishi"). (A 208) Exportadora’s remote company town
is located on the desert at Guerrero Negro, Mexico.
Exportadora’s San Diego office communicated with parties
outside Mexico on behalf of the Exportadora salt plant in
Guerrero Negro. Sugimoto at 1310. (A 5, 14, 92, 123, 188)
"The district court found that Exportadora
maintained a regular air-and-auto link between its San Diego
4
EI Ze
and Guerrero Negro Offices as pant of its commercial
operations, that it arranged, through its San Diego office,
round-trip transportation for the decedents from San Diego
to Guerrero Negro and that all five decedents began their
trips to Guerrero Negro in San Diego." Schoenberg at 781.
(A 97-98; A 15F 6;A47F 97; A 123-124)
Two Americans were killed in the accident, on
September 30, 1987. (A 158: A 93; Schoenberg at 779) ©
The other three passengers were Japanese, and their
widows and orphan are respondents. Mr. Omachi was a
purchasing agent for Asahi Chemical Industry Co., Ltd.
("Asahi") a substantial customer for Exportadora’s salt. (A
210-211) Dr. Sugimoto and Dr. Kodani were professors at
Tottori University. The university was conducting an
agricultural project, growing vegetables in the desert, at
Guerrero Negro. (Schoenberg at 779: A 93; Sugimoto at
1310;A 6,A 16F8,A18F 12, A 209 9 12 - 210, 243)
Exportadora received consideration in exchange for
its transportation of each Passenger. (A 22 F 24)
Exportadora benefited commercially from transporting each
passenger. (A 22 F 24: A 61 F 120) The district court found
that "Exportadora enjoyed the primary benefit of the
transportation of the decedents." (A 61 F 120)
Exportadora’s statement that it did not profit, or receive
anything of value, for the transportation is false.
The district court did not hold that Exportadora had
no control of the flight after it left Guerrero Negro, as
Exportadora misstates. The district court found that the
pilot controlled only the decision of whether to undertake
the flight, how the flight would be conducted, and whether
under the restricted conditions a landing at Tijuana airport
Should be attempted. (A 60 F 119)
© The two decisions at the outset of the case (A 121-130, 131-146),
affirmed by the Ninth Circuit in Schoenberg, contain the findings
required by the FSIA to determine lack of immunity at the outset of the
case.
The district court found that Exportadora scheduled
the flight (A 60 F 119; A 30 F 49), arranged the flight to
transport decedents as Exportadora’s passengers (A 65 F
126), scheduled the departure to accommodate a customer
(A 30 F 49; A 31 F 51), scheduled the arrival at Tijuana by
8:00 a.m. (A 30 F 47), and told the pilot to pick up two
Exportadora employees in Tijuana to return to Guerrero
Negro. (A 24 F 33; A 208 9 2) In other words, Exportadora
controlled the flight schedule, the list of passengers, the
destination, the time of departure, and the time of arrival.
Exportadora’s assertion that the pilot was neither
expected nor authorized to attempt a landing at Tijuana
through United States air space is contrary to the findings,
contrary to all of the evidence, and false.
Exportadora intended the flight to use United States air
space for an instrument landing. An instrument flight rules
("IFR") flight plan was filed before departure. (A 32 F 53)
Obviously, IFR visibility conditions, and use of the
instrument landing system ("ILS"), were foreseeable to the
pilot and to Exportadora, where an IFR flight plan was
filed. It is stipulated that Tijuana Airport uses United
States airspace for the ILS. (A 213 4 40)
Exportadora told the pilot to go to Tijuana (A 208 9
2, 212 4 30, 213 9 35, 237). Any instrument flight using the
Tijuana ILS would certainly be in the United States. Rather
than being unexpected and unauthorized, the use of United
States air space was virtually certain, entirely foreseeable
under the IFR weather forecast, and an implied part of
Exportadora’s instructions to go to Tijuana.
The ILS approach to Tijuana Airport does not
"briefly traverse" or "swing over" the United States as
Exportadora misstates. The ILS extends for miles in a
straight line into the United States. (A 155) The pilot flew 9
or 10 miles in United States air space prior to the crash. (A
272-273) Every use of the ILS is certain to involve
substantial contact with the United States.
Exportadora’s denial of the weather forecast is false.
6
The forecast for San Diego, where the ILS is located, was
for ceilings of 200 feet, visibility of one half mile in fog
until 11:00 a.m., a forecast of below minimum visibility for
an instrument landing. (A 154, 246-247) The forecast for
Tijuana was for temporary ceilings of 1,000 feet and
visibility of 2 miles in fog until 8:00 a.m., an instrument
flight rules ("IFR") forecast. (A 150, 249-250) The
accident occurred in San Diego at 7:56 a.m. (A 41 F 81) in
forecasted San Diego weather conditions of less than
minimum visibility. The flight, following a schedule under
Exportadora’s control, arrived in less than minimum weather
conditions for a landing attempt. These conditions were
foreseeable before departure. ”
The district court found in 1989 that "[i]t was
entirely foreseeable to Exportadora that passengers could
be injured in the United States on a trip to the United
States." (A 145 n. 2; Emphasis in the text.)
Exportadora’s petition is false in asserting that
Exportadora "specifically requested the pilot to fly on to
another airport . . . if he encountered poor weather in
Tijuana." (Petition at 18) Exportadora actually told the pilot
"if conditions were not good there in Tijuana, that he /the
pilot] could go to Mexicali." (A 30 F 47: A 237) No
instruction was given. The pilot could go as an option.
The air controller did not instruct the pilot, nor
encourage the pilot, to make an attempt to land, as
Exportadora misstates.* The pilot, knowing airport
operations were restricted with fog, decided to make an ILS
landing attempt. (A 28-29, 40 F 78, 41 F 79, 213 9 38)
The accident was caused by the pilot’s negligence in
7 Plaintiffs’ expert meteorologist (A 249-250) and expert pilots (A
265-266, 274-278) testified that IFR conditions and fog were foreseeable.
. Exportadora’s misstatements and false statements are so numerous
that it would be impossible to correct all of them within the page limits.
The Court should not believe any statement from Exportadora.
7
United States air space in failing to follow the ILS glide path
and failing to execute a missed approach at decision height.
(A 43 F 86; 45 F 93; 263, 266, 268, 269, 272, 273) The pilot
was incompetent to conduct an IFR approach, as the
experts testified. (A 265, 274, 278-280) The airplane collided
with a hill in the United States at a high rate of speed with
power applied to both propellers. (A 43-44; 173, 252, 258,
259) At the time, visibility was less than the minimum
required for an instrument landing. (A 214 9 45)
Exportadora did not contract with a commuter
airline, licensed to provide airline services, for the flight, as
the petition misstates. (Petition at 5 1 1) Aviones? is an air
taxi operator (A 6 1 3; A 25 F 34) not a commuter airline.
Exportadora’s statements to the contrary are false and
vexatious.”
Exportadora transported Dr. Sugimoto and Dr. Kodani
at the request of Mitsubishi, an Exportadora shareholder. (A
61 F 120) Exportadora gained valuable consideration for
transporting the scientists, including stockholder goodwill
(A 66 F 128) and future commercia! dealings in other
contexts. (A 22 F 24)
The government of Mexico encouraged Exportadora "to
assist the Japanese [with the agricultural project] as a courtesy
to its co-stockholder in Exportadora and Tottori University."
(A 176, 233, 243; A 127, 96-97, 7) Exportadora accepted the
request to maintain goodwill with its shareholder, which is not
an inherently public act, as the Ninth Circuit held in
Schoenberg. (A 96-97, 236)
9 Exportadora’s assertion about Aviones’ reputation is not in the
record. Reputation evidence was excluded. (RT XV 14:6-12; RT XVI
26:4-27:7)
" Exportadora argues evidence of Aviones’ insurance, admitted for a
limited purpose, for an unlimited purpose on liability. (Petition at 25 n3)
Respondents object and move to strike references to insurance of
$ 13,329 per passenger (A 86 F 185), under Rule 411, Fed.R.Evid.
8
Mr. Bremer, Exportadora’s President, testified at
trial that the government of Mexico did not order Exportadora
to assist the agricultural project (A 234), "there were no
orders given". (A 235) Assisting the agricultural project
provided Exportadora with stockholder goodwill from
Mitsubishi. (A 236)
Exportadora transported the scientists to appease its
majority stockholder, an activity that a private entity can
perform. (A 96, 243-244) As the Ninth Circuit affirmed in
Schoenberg "the Mexican government did not order
Exportadora to assist it in carrying Out a sovereign
function". (A 96-97) The evidence at trial agreed with that
finding. (A 233-235)
The agricultural project was not conducted with the
cooperation of the governments of Mexico and Japan, as
Exportadora misstates. (Petition at 4 9 1) There is nothing
in the record about the government of Japan in 1987, the
year of the accident. Mr. Bremer testified that in 1988, after
the accident, an agreement was signed between those
governments for research. (A 233-235) During 1987, at the
time of the accident, the agricultural project was being
conducted by Tottori University, at the invitation of Mitsubishi
(A 176, 184-185, 233-234, 235), on Exportadora’s land (A
176 4 4) not the government’s land.
Dr. Sugimoto and Dr. Kodani were not transported
at the direction of the government of Mexico pursuant to
an agreement between the governments of Mexico and
Japan, as Exportadora misstates. (Petition at 4 9 2) There
is nothing in the record about the government of Japan in
1987. The district court found in 1989 that the Mexican
government requested that Exportadora transport the
professors. (A 124, 127)
The wreckage of the airplane was stolen from the site
of the accident in the United States. (A 33-34, 257-258)
B. PROCEEDINGS BELOW AND JURISDICTION
IN THE DISTRICT COURT.
9
The Ninth Circuit entered judgment March 25, 1994,
denied Exportadora’s petition for rehearing and suggestion
for rehearing en banc on August 2, 1994, and denied
Exportadora’s motion for stay of mandate on August 12,
1994. The mandate issued on August 15, 1994.
Exportadora’s application to the Supreme Court for
a stay of enforcement of judgment, No. A 94-131, was
denied by Justice O’Conner on August 23, 1994.
Jurisdiction in the district court was held to rest on
28 U.S.C. $§ 1330, 1605(a)2[1], the first clause of the
commercial activities exception of the Foreign Sovereign
Immunities Act ("FSIA") in four decisions. Exportadora is a
business corporation, majority-owned by a foreign state.
Exportadora’s motion to dismiss for sovereign
immunity was denied on June 29, 1989. (A 121-130) The
district court made factual findings, as required under Rule
12(b)(1), Fed.R.Civ.P., to resolve the question of sovereign
immunity at the outset of the case. Vv
Saudi Arabia, 27 F.3d 169, 172 (Sth Cir. 1994). The district
court must resolve factual disputes on a Rule 12(b)(1)
FSIA motion. Land v. Dollar, 330 U.S. 731, 735 n. 4, 67
S.Ct. 1009, 1011 n. 4, 91 L.Ed. 1209 (1947); Gould, Inc, v.
Pechiney Ugine Kuhlmann, 853 F.2d 445, 451 (6th Cir.
1988). Exportadora’s assertion is false that the sovereign
immunity issue was not resolved at the beginning of the
case. The cases were consolidated after that decision (A
192), and that decision is part of the record in these cases.
Jurisdiction in the district court also rests on three
other exceptions that the district court and Court of
Appeals did not have to reach, the second and third clauses
of the commercial activities exception and the implied
waiver exception. All three clauses of the commercial
activities exception were alleged in the complaint (A 197-
200). The pretrial order invokes the first and third clauses.
(A 207-208), both of which were argued at trial and in both
appeals. Exportadora’s statements to the contrary are false.
10
All three clauses, and the implied waiver exception, were
argued to the Ninth Circuit in Sugimoto.
The district court determined on August 31, 1989,
that California law applies under choice of law principals
(A 142-146), and that the accident in California was
foreseeable to Exportadora. (A 144-145)
On interlocutory appeal the Ninth Circuit affirmed.
1, S.A V., 930 F.2d
777 (9th Cir. 1991). Exportadora settled with the
Schoenberg and Hernandez families and Stipulated
dismissals were entered in those cases on May 15, 1992. ™
Trial began January 11, 1993.
Exportadora’s assertion that it was "denied the
opportunity of contesting jurisdiction at trial" is false.
Exportadora waived sovereign immunity in opening
Statement, then stipulated to in personam Jurisdiction and
subject matter jurisdiction for the stated Purpose of saving
time. (A 220) r_ the waiver and stipulati , the district
court found at trial that there was jurisdiction. (A 220)
Plaintiffs presented evidence on jurisdiction.
Exportadora presented no evidence of lack of jurisdiction
and never argued sovereign immunity at trial.
The Ninth Circuit requested a letter brief on
whether there is jurisdiction after Saudi Arabia v, Nelson,
507 U.S. - - , 123 L.Ed.2d 47, 113 S.Ct. 1471 (1993).
Respondents filed a motion in the Ninth Circuit to amend
the jurisdictional allegations of the complaint under 28
U.S.C. § 1653 to allege implied waiver.
1! A new consolidation order was entered June 5, 1992, providing
that the record in the consolidated cases under the previous low number
case, Schoenberg, is part of the record in the present cases, and
consolidating the present cases. The record in the cases consolidated
under case no. 88-1532, Sugimoto, consists of more than 500 docket
entries, and under Schoenberg, 580 docket entries. The cases have the
longest docket in the history of the Southern District of California. The
record in Schoenberg includes the original sovereign immunity decisions.
11
The Ninth Circuit held that subject matter
jurisdiction exists because the case is based on
Exportadora’s commercial activity in the United States.
Exportadora’s transportation of the passengers on the fatal
flight was found to be Exportadora’s commercial activity in
the United States which included negligent piloting, an
element of plaintiffs’ claim. Sugimoto, at 1311.
On July 1, 1994 the Ninth Circuit amended its
opinion. (A 10) Exportadora misstates that the Ninth
Circuit did not rule on the merits of any liability theory.
The Ninth Circuit affirmed by implication that Exportadora
had a non-delegable duty to transport the passengers non-
negligently, citing the case of Van Ar
Cal.2d 245, 253, 66 Cal.Rptr. 20, 25, 437 P.2d 508, 513
(1968), Sugimoto at 1312, a case relied on by the district
court in concluding a non-delegable duty applies. (A 60-61)
The Ninth Circuit did not have to reach the other
liability theories of non-delegable contractual duty and
ostensible agency relied on by the district court.
Personal jurisdiction exists by stipulation. * Service
of process was accepted by stipulation. Personal jurisdiction
was Stipulated to at trial. (A 219-220, 222) Insurance Corp,
of Ireland, Ltd. v. Compagnie des Bauxites de Guinee, 456
US. 694, 72 L.Ed.2d 492, 102 S.Ct. 2099, 2104-2105 (1982).
SUMMARY OF ARGUMENT
The case is based on acts and events that occurred
in the United States. The opinion correctly applies Saudi
Arabia v. Nelson, 503 US. - - , 123 L.Ed.2d 47, 59, 113
12 The parties in lic of Argentina v, Weltover, 504 US. - -,
119 L.Ed.2d 394, 402, 408, 112 S.Ct. 2160 (1992) were all citizens of
foreign states. Jurisdiction under the FSIA arises under federal law. The
FSIA authorizes a foreign plaintiff to sue a foreign state in a federal
court on a non-federal claim. Verli i
461 U.S. 480, 492-493, 76 L.Ed.2d 81, 89, 91-92, 103 S.Ct. 1962 (1983).
12
S.Ct. 1471, 1477 (1993). Defendant assumed a non-
delegable duty in the United States. Decedents were killed
in the United States. All of the elements of negligence
occurred in the United States. Defendant made decedents’
travel arrangements through defendant's office in the
United States. The round trip began and ended in the
United States. The accident in the United States was
foreseeable on a trip to the United States. The pilot was
authorized by defendant to carry defendant’s passengers
and to attempt a landing through United States air space.
In arguing that jurisdiction should not be defined by
the elements of the state law claim (Petition at 21),
Exportadora is arguing in effect that the holding in Saudi
Arabia was incorrect. To the contrary, defining jurisdiction
by the elements of the claim is a clear, uniform rule. Saudi
Arabia was correct and should not be reconsidered.
The circuits agree that a principal’s commercial
activity, carried on through an agent in the United States, is
the principal’s commercial activity as to jurisdiction over
the principal. The issue in this case is not the same as an
issue of separate corporate existence. There is no conflict
between the circuits.
One decedent was the purchasing manager of a
major customer of Exportadora. The two decedent
Scientists were transported at the request of an Exportadora
shareholder. Exportadora received consideration and
commercial benefit from transporting each passenger.
Exportadora argues that its activity was not
commercial because the "for profit" test should define
commercial activity (Petition at 22 n.2), and it denies
making a profit on the transaction. Exportadora is arguing
in effect that the Court’s holding in i
y. Weltover, 504 U.S. - -, 119 L.Ed.2d 394, 405, 112 S.Ct.
2160 (1992) was incorrect. Weltover rejected the "for profit"
test in favor of the test of whether the activity is the type of
action by which a private party engages in trade, traffic or
commerce.
13
Transporting passengers, arranging transportation,
and extending a courtesy to a shareholder, are the type of
actions by which a private party engages in commerce.
Exportadora’s activity was commercial. Weltover was
correct and should not be reconsidered.
Exportadora waived sovereign immunity at trial, and
its statements to the contrary are false.
Exportadora’s petition argues in effect against the
Court’s holdings in recent controlling cases. The petition
misstates the facts and law, misstates the findings and
holdings of the Ninth Circuit and district court in the cases
below. The opinion of the Ninth Circuit correctly applies
the Court’s controlling cases. Certiorari should be denied.
REASONS FOR DENYING THE PETITION
I. THERE IS NO CONFLICT WITH
SUPREME COURT DECISIONS.
A. Exportadora’s Contentions,
Exportadora contends that the case conflicts with
Saudi Arabia because plaintiffs’ claims are not based on
commercial activity of Exportadora which had substantial
contact with the United States, the flight was not
commercial activity of Exportadora, and the crash in the
United States was unexpected and unauthorized.
Exportadora contends its activity was not
commercial because it did not profit from the transaction.
Exportadora contends that there is conflict with
another circuit, where the activities of a corporate
subsidiary were not attributed to the parent company based
only on ownership, contending that attributing the pilot’s
negligence under a non-delegable duty is the same as
attributing a subsidiary’s activities to a parent company only
because of ownership.
Exportadora contends that defining jurisdiction by
14
the elements of the state law claim is at odds with a
uniform body of law. Exportadora contends lack of
sovereign immunity was not determined at the outset,
denying it due process.
Exportadora’s contentions are contrary to the record,
misdescribe the legal issues, and are contrary to Saudi
Arabia which determines jurisdiction under the commercial
activities exception of the FSIA based on the elements of
the state law claim, a clear uniform rule. Exportadora’s
contentions are also contrary to the holding in Weltover
which rejects the profit motive test of commercial activity.
B. Saudi Arabia is Correctly Applied,
1. The Case is Based on Commercial Activity
n_ by Expor ra Havin stantial
Contact with the United States,
The decision correctly applies Saudi Arabia v.
Nelson, 503 U.S. - - , 123 L.Ed.2d 47, 59, 113 S.Ct. 1471,
1477 (1993) to the facts. Saudi Arabia applied the first
clause of the commercial activities exception, applicable
where the case is "based upon a commercial activity carried
on in the United States by a foreign state." 28 U.S.C. §
1605(a)(2)[1]. Such activity is "commercial activity carried
on by such state and having substantial contact with the
United States." 28 U.S.C. § 1603(e). This definition includes
commercial transactions, such as a business flight,
performed in whole or in part in the United States.
Weltover, 119 L.Ed.2d 394 at 408; H.R.Rep. No. 1487, 94th
Cong., 2nd Sess. 16, reprinted in 1976 US. Cong. & Admin.
News 6604, 6615.
In Saudi Arabia the Supreme Court identified the
conduct on which an action is "based" as meaning the
"elements of a claim that, if proven, would entitle a plaintiff
to relief under his theory of the case... ." i
123 L.Ed.2d 47, 59 (1993). If one element of a claim is
15
based upon the defendant’s commercial activity in the
United States there is jurisdiction. Santos v. Compagnie
Nationale Air France, 934 F.2d 890, 893 (7th Cir. 1991).
Exportadora assumed the element of a duty of care
when it accepted decedents as Exportadora’s passengers in
San Diego, California at the outset of the round trip. Brown
v. Feather River Lumber Co., 203 Cal. 493, 497-498 (1928).
(A 19 F 14, A 20 F 16, A 46 F 97, A 52 F 104, A 65 F 126)
Decedents were killed in the United States (A 14 F 4),
when the duty was breached in the United States by the
pilot’s negligence. (A 7; 45 F 93) Sugimoto at 1311.
Defendant made the travel arrangements through
the defendant’s office in the United States. Schoenberg at
781. (A 97; A 22 F 22; A 211 9 18; A 231, 225, 227-228,
230-231) Defendant agreed to transport the decedents as
the carrier from San Diego to Guerrero Negro and back to
the United States. (A 47 F 98; A 52 F 104) The trip began
in the United States with defendant transporting decedents,
and assuming the duty here. (A 19 F 14, A 20 F 16)
The airplane crashed in the United States on the
return trip to the United States. Schoenberg at 781-782;
Sugimoto at 1310-1312. The pilot was transporting the
passengers in the United States on behalf of Exportadora
(A 31 F 49, A 47 F 98, A 51 F 103 - A 52 F 104), ona
flight on the company’s transportation link. (A 15 F 6) (A
The transportation agreement provided that if
decedents traveled to San Diego, Exportadora would
transport them to Guerrero Negro and back. The last act
done to give the agreement binding effect was
Exportadora’s acceptance of decedents as passengers in San
Diego. The contract was made in California "where the last
act is done which is necessary to give a contract binding
effect." 1 Witkin, Summary of California Law, 9th Ed. 1987,
Contracts, § 47, p. 86; Michelin Tire Co, v, Coleman Co.,
179 Cal. 598, 604 (1919).
Undertaking a duty in the United States to transport
passengers safely, transporting passengers negligently in
16
United States air space, crashing into the United States,
and causing wrongful death in commercial activity in the
United States, is carrying on commercial activities having
substantial contact with the United States. Sugimoto at
1311; 28 U.S.C § 1603(e). People were killed by Exporta-
dora’s negligent commercial activity in the United States.
Making travel arrangements, or an agreement for
transportation, from and to the United States, through an
office in the United States is substantial contact with the
United States for jurisdiction. Santos at 894.
2. The Pilot was Exportadora’s Agent Under
a Non-delegable duty,
Undertaking a non-delegable duty was a commercial
act by Exportadora in the United States, as were the elements
of negligent breach, and death caused by the breach. These
elements are sufficient to satisfy 28 U.S.C. § 1605(a)(2)[1]
under the holding in Saudi Arabia. The non-delegable duty
was assumed in the United States when Exportadora
accepted the passengers in San Diego and began to
transport them. All the elements of negligence by the pilot,
Exportadora’s agent under the non-delegable duty, occurred in
the United States.
Under California law, an independent contractor is
the agent of the principal when the principal has a non-
delegable duty. The principal is ". . . liable fur the negligence
of his agent, whether his agent was an employee or an
independent contractor." Maloney v. Rath, 69 Cal.2d 442,
446 (1968). [Emphasis added.]
A company may be both an agent and an
independent contractor under California law. City of Los
Vv r rki nc., 54
Cal.App.3d 135, 138, 126 Cal.Rptr. 545 (1975); Mottola v,
RL. Kautz Co., 199 Cal.App.3d 98, 108, 244 Cal.Rptr. 737
(1988). There is no inconsistency in the charter company
17
having both capacities under a non-delegable duty. ”
Non-delegable duty was alleged in the complaint (A
198 4 13) and was specified in the pretrial order. (CT 209,
1-7-93, p. 22:4-11) Exportadora’s statement that only
negligence was alleged is false.
The trial court found a non-delegable tort duty
based on public policy grounds. (A 56-57, 60-62) Van
Arsdale v, Hollinger, 68 Cal.2d 245, 253 (1968); Alaska
Airlines v, Sweat, 568 F.2d 916 (Alaska 1977).
The Ninth Circuit affirmed by implication the
conclusion that Exportadora had a non-delegable tort duty
on public policy grounds, citing one of the cases relied on
by the district court, Van Arsdale. Sugimoto at 1312. (A 11;
A 60-61; A 55-56; A 116)
Even if, for the sake of argument, Exportadora’s
contention were accepted that the Ninth Circuit affirmed
an exception to the general rule of nonliability for the torts
of an independent contractor, some of the reasons relied
upon - in addition to the pilot’s negligence - occurred
through defendant’s office in the United States, including
Exportadora’s control of transportation offered to business
visitors, approval of business visitors, arranging for
transportation, and determining how business visitors would
come, and how they would go. (A 116) These reasons are
Exportadora’s commercial activities having substantial
contact with the United States.
3. The Accident was Foreseeable in the United
S "ise Sties ‘ene Aastaceinl oa Or os 0
United States.
Exportadora’s commercial activity had substantial
contact with the United States, consistent with Saudi
13 There is also no inconsistency in Aviones being an ostensible agent
and an independent contractor. (A 65 F 126)
18
Arabia, because the accident in the United States was
foreseeable to Exportadora on a trip to the United States
(A 129; A 145 n.2; A 213 9), not fortuitous as Exportadora
misstates. The flight was intended, expected and authorized
by Exportadora to enter the United States, as would any
flight under the forecast for fog. Exportadora in fact
instructed the pilot to land at Tijuana, and never instructed
him to go to another airport. (A 237; A 30 F 47)
Exportadora’s statements to the contrary are false.
In a nearly identical case, where Americans were
killed in the United States in the crash of a Mexican-owned
airplane on approach in fog to Tijuana airport, the district
court found that the "pilots intentionally entered United
States air space with the approval of Tijuana air control to
make an instrument landing . . . the flight over California
was neither accidental nor fortuitous." Olsen by Sheldon v,
Government of Mexico, 729 F.2d 641, 649 (9th Cir. 1984),
cert. denied sub nom., 469 U.S. 917, 105 S.Ct. 295, 83
L.Ed.2d 230 (1984).
Olsen holds that negligent piloting in the United
States, which causes wrongful death here, is sufficient for
FSIA jurisdiction. Olsen at 646.
Scope of employment under the FSIA is determined
by state law. hv, Office of Consul neral
Nigeria, 830 F.2d 1018, 1025 (9th Cir. 1987). Under
California respondeat superior doctrine, whether an
employee has committed a tort in the scope of employment
is a question of whether: (1) the act was either required or
incident to his duties, or (2) the employee’s misconduct
could reasonably be foreseen by the employer. Id,
"Foreseeability” in this context "merely means that in the
context of the particular enterprise an employee’s conduct
is not so usual or startling that it would seem unfair to
include the loss resulting from it among the other costs of
the employer’s business." Id,; Vv
Angeles, 56 Cal.3d 202, 209, 285 Cal.Rptr. 99, 814 P.2d
1341 (1991).
19
Exportadora contends that the pilot was not
authorized to enter United States air space, and asserts that
Exportadora requested that the pilot go to Mexicali if he
encountered poor weather in Tijuana. (Petition at 18)
Exportadora misstates the facts. In fact, the pilot was
told he could go to an alternate as an option. (A 237; A 30
F 47) Exportadora scheduled the flight to arrive at Tijuana
at about 8:00 a.m. (A 212 9 30) Jn attempting to land in
United States air space at 7:56 a.m. (A 41 F 81), the pilot
was following Exportadora’s instructions and flight schedule.
The pilot’s act was certainly within the scope of his
employment and foreseeable. It would not be unfair to
include the loss resulting from the pilot’s tort among the
other costs of the employer’s business. The Ninth Circuit
affirmied that the insurance to distribute the risk is properly
a cost of Exportadora’s business. Sugimoto at 1312. (A 116)
This conclusion was amply supported by the evidence that
the flight was an Exportadora business flight. The issues
affirmed were specified in the pretrial order (CT 209, 1-7-
93, p. 27:3-13) and were litigated. Exportadora’s statement
to the contrary is false.
The district court’s implied finding that the pilot
acted within the scope of his employment was not error.
An agent has implied or incidental authority to
proceed in a reasonable manner, even under unexpected
conditions. 2 Witkin, Summary of California Law, 9th Ed.
(1987), § 79, p. 82. Fog was not unexpected. The pilot
believed an ILS landing could be attempted. (A 36 F 69-72)
The pilot had implied authority to use the Tijuana
ILS in the United States. The pilot filed an instrument flight
rules flight plan before departure. (A 32 F $3) The ILS
extends for miles into the United States. (A 155-156; A
269; A 272-273) The flight was virtually certain to use United
States air space, as would any ILS instrument flight.
An agent has authority to do "everything necessary
or proper and usual" to effect the purpose of his agency.
Cal.Civ.Code § 2319. The scope of the agent’s authority is a
20
question of fact. Mary M. v. City of Los Angeles, 56 Cal.3d
202, 213, 285 Cal.Rptr. 99, 814 P.2d 1341 (1991). The scope
of authority may be established by circumstantial
evidence Boise Payette Lumber Co. v. Larsen, 214 F.2d 373,
376 (9th Cir. 1954); Ripani v. Liberty Loan Corp., 95
Cal.App.3d 603, 611, 157 Cal.Rptr. 272 ( 1979); Vargas v,
Ruggiero, 197 Cal.App.2d 709, 716, 17 Cal.Rptr. 768 (1961).
Exportadora never argued, neither at trial nor in the
Court of Appeals, that the pilot was unauthorized to enter
United States air space. The Court should not consider an
argument on a factual issue that is presented for the first
time in the Supreme Court. Whittaker Corp. v, Execuair
Corp., 953 F.2d 510, 515 (9th Cir. 1992).
Exportadora’s argument that jurisdiction should not
be defined by the elements of the state law claim (Petition
at 21) is an argument that the opinion in Saudi Arabia was
incorrect. Saudi Arabia defines jurisdiction by the elements
of the theory of the case, a clear, uniform rule that the
Court should not reconsider.
4. The Decisions of the Ninth Circuit are Correct
and Consistent with Saudi Arabia.
Exportadora misstates the holding of the Ninth
Circuit in Schoenberg, where the Ninth Circuit did consider
whether the case was based on commercial activity having
substantial contact with the United States. Schoenberg at
780. (A 95) While the "based upon" requirement was not
defined by the elements of the claim, the Ninth Circuit
affirmed that Exportadora’s transportation of decedents in
the United States was a commercial activity having
substantial contact with the United States. The case was
based on arranging round-trip transportation from and to
the United States through the defendant’s office in the
United States, and on transporting the decedents in the
United States. Schoenberg at 780-782. (A 97-99).
Whether Exportadora retained a duty to transport
21
decedents safely was reserved in the opinion written by
Judge Rymer. Schoenberg at 782 n.3. (A 99 n. 3)
The district court at trial resolved the question of
retained duty. The Ninth Circuit in Sugimoto affirmed that
Exportadora retained a duty to transport the passengers
safely. Again, Sugimoto held the case is based upon the
transportation of the decedents by Exportadora in the
United States. The opinions are consistent, and each is
correctly decided. Nothing is left out, nor is the basis for
jurisdiction new, as Exportadora inaccurately asserts.
The petition misstates the holding in Sugimoto.
Sugimoto affirmed that Exportadora controlled the
transportation offered to business visitors, arranged their
transportation, determined how they would come and how
they would go. (A 8) The corporate transportation link
enterprise remained Exportadora’s, the party primarily to
be benefited, who selected the contractor, was free to insist
on one who is financially responsible, to demand indemnity
from him, and the insurance to distribute the risk is
properly a cost of Exportadora’s business. (A 116) These
issues were litigated at trial. Exportadora’s statement to the
contrary is false. (Petition at 25; A 60 - 62)
Exportadora’s control was in part exercised, and the
decedents’ round trip travel arrangements were made,
through the defendant’s office in the United States.
at 781. (A 15 F 6; A 22 F 20-23; A 47-48; A 51,
F 103; A 52, F 104; A 68, F 130) Schoenberg affirmed that
round-trip travel arrangements were made at the outset. (A
129, 145 n.2; A 98; A 51 F 103)
Sugimoto correctly applied Saudi Arabia in affirming
that "Exportadora was engaged in commercial activity
within the United States when the air taxi flew in United
States air space". Sugimoto at 1311. (A 7) The pilot was
acting on behalf of Exportadora, in a commercial activity
for which Exportadora received consideration and
commercial benefit. (A 31 F 49; A 22 F 24) The trial
judge’s findings were not error. Anderson v, City of
22
Bessemer City, 470 U.S. 564, 575, 84 LEd.2d 518, 528, 105
S.Ct. 1504 (1985); Rule 52(a), Fed.R.Civ.P.
5. Implied Contract,
The circuits agree that arranging transportation in
the United States is sufficient to confer jurisdiction where
the case is based on breach of the contract of carriage
arranged here. Barkanic v, CAAC, 822 F.2d 11, 13-14 (2nd
Cir. 1987) (travel in China arranged in the United States);
Vv mexico, Inc., 626 F.2d 270, 271-273 (3rd
Cir. 1980) (tickets purchased from travel agent in New
Jersey for travel in Mexico).
The element of contractual duty was undertaken by
Exportadora in the United States when it began to
transport the passengers. Brown v, Feather River Lumber
Co., 203 Cal. 493, 497-498 (1928); Wheeler v, San Francisco
and Alameda R.R., 31 Cal. 46, 49, 53-54 (1866). (A 51-54)
The United States was a designated place of
performance for Exportadora’s obligation to transport the
passengers back to San Diego. There is jurisdiction where
the designated place of performance for a corporation’s
commercial contract is the United States and the breach of
that agreement has direct effects in the United States.
Republic of Argentina v. Weltover, 504 U.S. - - , 119
L.Ed.2d 394, 408, 112 S.Ct. 2160 (1992).
6. Ostensible Agency,
The passengers’ reliance on Exportadora, an element
of ostensible agency, began in the United States, where
Exportadora accepted the passengers as the carrier for a
round trip, and ended in the United States in the accident.
Additional manifestations by Exportadora to the
passengers that the pilot was its agent occurred in Mexico,
where the pilot was introduced by Exportadora, without
disclosure of his status, as the pilot for the flight the next
23
day. (A 30 F 47; A 240; A 65 F 126) The facts are nearly
identical to the facts in Croce v. Bromley Corp,, 623 F.2d
1084 (Sth Cir. 1980), where the singer Jim Croce lost his
life in an undisclosed, last minute, substituted charter flight.
The trial judge’s factual finding of ostensible agency,
which rested in part on Exportadora’s conduct in the
United States (A 65 F 126), was not clear error. Anderson
yv. City of Bessemer City, 470 U.S. 564, 575, 84 L.Ed.2d 518,
529-30, 105 S.Ct. 1504 (1985).
= i was Acti r ier
in mmon Carri
Aviones was acting as a contract carrier under a
contract with Exportadora, held to a standard of ordinary
care, not acting as a common carrier. (A 48 F 98)
Exportadora so argued to the district court to argue for a
standard of ordinary care (A 287-288), and is bound by
judicial estoppel that Aviones was acting as a private
carrier at the time of the accident. Yanez v. United States,
989 F.2d 323 (9th Cir. 1993); Hopkins v. Yellow Cab, 114
Cal.App.2d 394, 397-398 (1952).
A common carmer contracted to perform a special
service for a company acts as a private carrier. Hopkins at
397-398. If Aviones were acting as a common carrier it
would have been held to a standard of the utmost care.
Andrews v, United Airlines, Inc., 24 F.3d 39, 40 (9th Cir.
1994). The fact that Aviones normally operated as a
common carrier is irrelevant. (A 48) The case concerns
corporate transportation for business visitors, not common
carrier transportation for passengers with tickets.
C. There is No Conflict with Weltover,
Exportadora contends that its activity was not
commercial because it received no payment for the flight,
and the test for commercial activity should be whether the
24
| ny
activity is customarily carried on for a profit, citing
Vv i] ional - ndie,
851 F.Supp. 580, 585 (S.D.N.Y. 1994). Exportadora
misstates the facts. Exportadora received valuable
consideration, and commercial benefit, for the transporta-
tion of each passenger. (A 22 F 24; A 61 F 120) Exporta-
dora’s statement that benefit was not litigated is false.
The Supreme Court in Weltover rejected the "for
profit" test of commercial activity: "the question is not
whether the foreign government is acting with a profit
motive . . . the issue is whether the particular actions that
the foreign state performs (whatever the motive behind
them) are the type of actions by which a private party
engages in "trade, and traffic or commerce” Weltover, 119
L.Ed.2d 394 at 405.
Exportadora is thus arguing that the Court’s opinion
in Weltover was incorrect, that the profit motive test should
have been adopted.
Exportadora’s transportation of the passengers was
commercial activity, as affirmed in Schoenberg, found by
the district court at trial, and affirmed in Sugimoto. In
Schoenberg, the Ninth Circuit held that the nature of
transporting people from one place to another is a
commercial activity, and that acquiescing in a request from
a stockholder is an activity that a private entity can
perform. (A 95-97) At trial the district court found
Exportadora’s transportation to be commercial. (A 22 F 24)
The decisions of the lower courts in this case are consistent
with the definition of commercial activity in Weltover.
Iii, THERE IS NO CONFLICT WITH OTHER
CIRCUITS.
A. There is No Issue of Separate Juridical
Existence,
Exportadora contends that the holding in this case
25
conflicts with Federal Ins. Co. v. Richard I, Rubin & Co.,
Inc, 12 F.3d 1270 (3rd Cir. 1993), cert. denied sub nom., El
Vv n Burger
128 L.Ed.2d 663 (1994). In that case a holding company
was the parent of two subsidiaries that entered into a joint
venture to own an office building in the United States.
In Federal Insurance, the district court attributed the
activities of the subsidiaries to the holding company
because of its status as a parent corporation. The Third
Circuit reversed, holding that "the acts of separate
corporations should not be attributed to related foreign
entities unless [not] doing so would ’work fraud or
injustice’. Federal Insurance at 1286.
The Third Circuit also recognized that separate
corporate status should be disregarded when control is so -
extensive as to create the relationship of principal and
agent. Id. at 1287.
The present case is readily distinguishable from
Federal Insurance. Exportadora did not form a subsidiary
to operate its corporate transportation link. The routine
company airplane flights and company van transportation
were done directly by Exportadora. Exportadora itself
arranged and agreed to transport the passengers round trip.
Exportadora itself undertook the non-delegable duty, began
the round trip transportation in the United States, and
chartered a substitute air taxi for its company airplane.
A person may do by agent any act which he might
do himself. 2 Witkin, Summary of California Law, 9th Ed.
(1987), § 75, p. 78-79; Cal.Civ.Code § 2330. To immunize
foreign states for the acts of their agents in the United
States, as Exportadora asks the Court to do, would be to
create a special immunity from liability for foreign states
only, at the expense of the public in this country, who could
not recover damages for their losses.
Every authorized agent is a separate entity of one
kind or another. The issue in this case is not the same as
the issue of separate corporate existence. The issue here is
26
| cma
the principal’s commercial activity performed by an agent
in the United States.
None of the grounds for liability in this case, non-
delegable duty, contractual duty, or ostensible agency, were
present in Federal Insurance, or in any of the other cases
cited by Exportadora as to separate corporate existence.
Indeed, the opinion in this case is consistent with
Federal Insurance’s recognition that commercial activities
are attributed where the relationship of principal and agent
exists, as under a non-delegable tort duty, non-delegable
contractual duty, or ostensible agency. Federal Insurance at
1287. Finally, there would be great injustice if the activities
of the charter pilot were not attributed to Exportadora,
whose commercial activity killed the decedents.
B. The Circuits ere that the Principal’s
rcial vi nog h
nt in th t he Principal’
mercial A tiv for icti
The circuits agree that under the FSIA, the
| principal’s commercial activity, carried out through an
| agent in the United States, is the commercial activity of the
principal. l illin Vv
Republic of Nigeria, 647 F.2d 300, 304, 313 (2nd Cir. 1981)
(New York bank appointed as agent for letters of credit by
foreign state); Commercial Bank of Kuwait v. Rafidain
Bank, 15 F.3d 238, 241 (2nd Cir. 1994) (lead banks
appointed agents for Kuwait in New York); Sugarman v,
AeroMexico, Inc,, 626 F.2d 270, 273 (3rd Cir. 1980) (travel
agent sold ticket for foreign state in New Jersey); Gould,
n, 853 F.2d 445, 453 (6th
Cir. 1988) (Delaware corporation acted as agent for foreign
state in negotiating in United States);Maritime Int'l
Vv 693 F.2d
1094, 1105-1107 (D.C.Cir.1982)(acts of an authorized agent
may be attributed to the principal); Transamerican
27
Steamship Corp. v. Somali Democratic Republic, 767 F.2d
999, 1003 (D.C.Cir. 1985) (embassy of foreign state acted as
collection agent for instrumentality of foreign state);
Federal Ins, Co, v. Richard I. Rubin & Co,, Inc,, 12 F.3d
1270, 1287 (3rd Cir. 1993), cert. denied sub nom., El Jay
Travel, Inc, v. Algemeen Burgerlijk Pensionenfonds, 128
L.Ed.2d 663 (1994) (activities of an agent may be attributed
to the principal).
There could hardly be any other rule if business is to
be transacted through agents.
lil. OTHER EXCEPTIONS, ALLEGED AND
ARGUED, ESTABLISH JURISDICTION.
Three other exceptions establishing jurisdiction were
alleged and argued to the Ninth Circuit. Exportadora’s
statement that no other exceptions were considered is false.
First, under the third clause of the commercial
activities exception, 28 U.S.C. § 1605(a)(2)[3], the direct
effects clause, the claims arise from the commercial activity
of Exportadora elsewhere that has caused a direct effect in
the United States.
"Where the incident is a fatal plane crash, the direct
effects are loss of life and the destruction of the aircraft.”
Compania Mexicana De Aviacion, S.A. v. United States
Dist. Court, 859 F.2d 1354, 1360 (9th Cir. 1988).
Exportadora’s delegation of duty to a substitute, introducing
the pilot without disclosure of his status, and sending the
airplane to the San Diego-Tijuana area at a time when fog
was forecast were commercial acts, elements of torts with
direct effects in the United States. Vermeulen v, Renault
U,S.A., Inc,, 985 F.2d 1534 at 1544 n.13, cert. denied, 124
L.Ed.2d 246 (1993); Weltover, 119 L.Ed.2d 394 at 407.
Plaintiffs alleged the direct effects clause in the
complaint (A 197 9 8), set forth the clause in the pretrial
order (A 208) and argued it to the Ninth Circuit in both
appeals. Exportadora’s statements to the contrary are false.
28
Second, the implied waiver exception, 28 U.S.C. §
1605(a)(1), is applicable. The defendant waived sovereign
immunity in opening statement, stipulated to jurisdiction at
trial to save time, and never argued sovereign immunity in
closing. (A 219-220, 222-223) '* The defendant waived
sovereign immunity. Exportadora’s statements that it did
not waive sovereign immunity are false.
Even agreeing to a choice of law clause, to be
governed by the law of the United States or of the States, is
a waiver of sovereign immunity. Eckert Int’, Inc, v,
Government of Fiji, 32 F.2d 77, 80 (4th Cir. 1994).
Agreeing to a trial to be governed by United States law and
California law, as Exportadora did, is certainly a waiver.
The question is whether the foreign state voluntarily
involved the United States courts in the claims. Siderman
de Blake v. Republic of Argentina, 965 F.2d 699, 721-723
(9th Cir. 1992), cert. denied, - - U.S. - - , 113 S.Ct. 1812, 123
L.Ed.2d 444 (1993).
Respondents made a motion to amend the
jurisdictional allegation to allege implied waiver in the
Ninth Circuit under 28 U.S.C. § 1653.
Third, under the second clause of the commercial
activities exception, 28 U.S.C. § 1605(a)(2)[2], the pilot’s
negligence is an act in the United States in connection with
the commercial activity of the foreign state elsewhere.
The Court may affirm the existence of subject
matter jurisdiction on any ground appearing in the record,
regardless of whether the parties or the lower courts relied
upon that ground. United States v. Washington, 969 F.2d
752, 755 (9th Cir. 1992). Subject matter jurisdiction is a
question of law which does not depend upon the statutes
identified in the pleadings. Gerritsen v, de la Madrid
14 Exportadora’s statement that the trial court refused to reconsider
the issue of jurisdiction is false. Exportadora never asked the trial court
to reconsider jurisdiction.
29
Hurtado, 819 F.2d 1511, 1515 (9th Cir. -1987).
IV. THE TWO-COURT RULE.
Two courts - the district court and the Ninth Circuit
- have each twice considered the issue of jurisdiction and
have ruled each time against Exportadora. The Supreme
Court should not "undertake to review concurrent findings
of fact by two courts below in the absence of a very obvious
and exceptional showing of error." Grav
yv. Linde Air Prod, Co., 336 U.S. 271, 275, 93 L.Ed. 672,
677, (1949); Goodman v, Lukens Steel Co,, 482 U.S. 656,
665 (1987). The "two court rule” applies.
V. CONCLUSION.
If the petition is granted, the question should be
whether there is subject matter jurisdiction under the
Foreign Sovereign Immunities Act, fairly including all
exceptions.
Respondents respectfully submit that the Ninth
Circuit has correctly applied the law. This Court’s recent
opinions are dispositive, and should not be reconsidered.
There is no conflict between the circuits, and no issue of
importance for the Court’s review.
Certiorari should be denied.
Dated: October 31, 1994
Belmont, California
Respectfully submitted,
a ——
Robin E. Foor —
Counsel of Record
Attorney for Respondents
30
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.