Rodriguez v. Shell Oil Company

REVISED, October 23, 2000

UNITED STATES COURT OF APPEALS
For the Fifth Circuit

No. 95-21074

FRANKLIN RODRIGUEZ DELGADO, ET AL. (Individually
and on behalf of all others similarly situated),

Plaintiffs-Appellants-Cross-Appellees,

VERSUS

SHELL OIL COMPANY; DOW CHEMICAL COMPANY; OCCIDENTAL CHEMICAL
CORPORATION (Individually and as successor to Occidental
Chemical Company and Occidental Chemical and Agricultural
Products, Inc.); STANDARD FRUIT CO.; STANDARD FRUIT AND
STEAMSHIP COMPANY; DOLE FOOD COMPANY, INC.; DOLE FRESH FRUIT
CO.; CHIQUITA BRANDS, INC.; CHIQUITA BRANDS INTERNATIONAL, INC.;
DEL MONTE TROPICAL FRUIT COMPANY,

Defendants-Appellees-Cross-Appellants,

DEL MONTE FRESH PRODUCE, N.A.,

Defendant-Third Party Plaintiff-Appellee-Cross-Appellant,

VERSUS

DEAD SEA BROMINE COMPANY, LTD.; AMERIBROM, INC.,

Third Party Defendants-Appellees-Cross-Appellants.

* * * * * * * * * * * * * * * * * * * * * * * * * *

JORGE COLINDRES CARCAMO, ET AL. (Individually, and on
behalf of all others similarly situated),
 Plaintiffs-Appellants-Cross-Appellees,

VERSUS

SHELL OIL COMPANY; OCCIDENTAL CHEMICAL CORPORATION
(Individually and as successor to Occidental Chemical
and Occidental Chemical and Agricultural Products, Inc.);
STANDARD FRUIT COMPANY; STANDARD FRUIT AND STEAMSHIP
COMPANY; DOLE FOOD COMPANY, INC.; DOLE FRESH FRUIT
COMPANY; CHIQUITA BRANDS, INC.; CHIQUITA BRANDS
INTERNATIONAL, INC.,

Defendants-Appellees-Cross-Appellants,

DOW CHEMICAL COMPANY,

Defendant-Third Party Plaintiff-Appellee-Cross-Appellant,

VERSUS

DEL MONTE FRESH PRODUCE COMPANY (sued as Del Monte
Tropical Fruit Company); DEAD SEA BROMINE COMPANY,
LTD.; AND AMERIBROM, INC.,

Third Party Defendants-Appellees-Cross-Appellants,

DEL MONTE FRESH PRODUCE, N.A., INC.,

Third Party Defendant-Fourth Party
Plaintiff-Appellee-Cross-Appellant,

VERSUS

BROMINE COMPOUNDS, LTD.,

Fourth Party Defendant-Appellee-Cross-Appellant.

* * * * * * * * * * * * * * * * * * * * * * * *

JUAN RAMON VALDEZ, ET AL.,
 Plaintiffs-Appellants-Cross-Appellees,

VERSUS

SHELL OIL COMPANY; OCCIDENTAL CHEMICAL CORPORATION
(Individually and as successor to Occidental Chemical
Company and Occidental Chemical and Agricultural
Products, Inc.); STANDARD FRUIT COMPANY; STANDARD
FRUIT AND STEAMSHIP COMPANY; DOLE FOOD COMPANY, INC.;
DOLE FRESH FRUIT COMPANY; CHIQUITA BRANDS, INC.;
CHIQUITA BRANDS INTERNATIONAL, INC.,

Defendants-Appellees-Cross-Appellants,

DOW CHEMICAL COMPANY,

Defendant-Third Party Plaintiff-Appellee-Cross-Appellant,

VERSUS

DEL MONTE FRESH PRODUCE, N.A.; DEL MONTE TROPICAL FRUIT
COMPANY; DEAD SEA BROMINE COMPANY, LTD.; AMERIBROM, INC.,

Third Party Defendants-Appellees-Cross-Appellants.

* * * * * * * * * * * * * * * * * * * * * * * * *

ISAE CARCAMO,

Plaintiff-Appellant-Cross-Appellee,

VERSUS

DOW CHEMICAL COMPANY; OCCIDENTAL CHEMICAL CORPORATION
(Individually and as successor to Occidental Chemical
Company and Occidental Chemical and Agricultural
Products, Inc.); STANDARD FRUIT COMPANY; STANDARD
FRUIT AND STEAMSHIP COMPANY; DOLE FOOD COMPANY, INC.;
DOLE FRESH FRUIT COMPANY,

Defendants-Appellees-Cross-Appellants,
 SHELL OIL COMPANY

Defendant-Third Party Plaintiff-Appellee-Cross-Appellant,

VERSUS

DEAD SEA BROMINE COMPANY, LTD.; AMERIBROM, INC.,

Third Party Defendants-Appellees-Cross-Appellants.

No. 97-20060

RAMON RODRIGUEZ RODRIGUEZ,

Plaintiff-Appellant,

VERSUS

SHELL OIL COMPANY; STANDARD FRUIT & STEAMSHIP COMPANY;
CHIQUITA BRANDS; CHIQUITA BRANDS INTERNATIONAL, INC.;
STANDARD FRUIT COMPANY,

Defendants-Third Party Plaintiffs-Appellees,

and

DOLE FOOD COMPANY, INC.; DOLE FRESH FRUIT CO.;
DOW CHEMICAL COMPANY; OCCIDENTAL CHEMICAL,

Defendants-Appellees,

VERSUS

BROMINE COMPOUNDS, LTD.; AMVAC CHEMICAL COMPANY;
DEAD SEA BROMINE COMPANY, LTD.,

Third Party Defendants-Appellees.
 Appeals from the United States District Court
For the Southern District of Texas
October 19, 2000

Before GARWOOD, WIENER, and DeMOSS, Circuit Judges.

DeMOSS, Circuit Judge:

In these consolidated appeals,1 Plaintiffs-Appellants

(“Plaintiffs”), who are several thousand foreign agricultural

workers, challenge the district court’s orders dismissing on forum

non conveniens, five of six cases removed from Texas state court.

Plaintiffs assert that the removals were improper and that the

district court lacked subject matter jurisdiction. Concluding that

removal and jurisdiction were proper in all of the five dismissed

cases, we affirm.

I. BACKGROUND

A. Overview

Plaintiffs originally filed all six cases in various Texas

state courts, seeking damages for injuries allegedly caused by

their apparently incremental exposure over a considerable period to

a nematocide, dibromochloropropane (“DBCP”), while working on

banana farms in several foreign countries. Plaintiffs justify

their presence in the state courts of Texas on provisions of a

Texas statute that furnishes a Texas forum to a plaintiff who has

1
By a concurrent order, appeal No. 97-20060 is consolidated
with appeal No. 95-21074.
been injured in a foreign country if that plaintiff is a citizen of

a foreign country that has equal treaty rights with the United

States. See Tex. Civ. Prac. & Rem. Code § 71.031. Defendants-

Appellees (collectively “Defendants”) are Shell Oil Company

(“Shell”), Dow Chemical Company (“Dow”), Occidental Chemical

Corporation (“Occidental”), Standard Fruit Company and Standard

Fruit & Steamship Company (collectively “the Standard Fruit

entities”), Dole Fresh Fruit Company and Dole Food Company, Inc.

(collectively “the Dole entities”), Chiquita Brands, Inc., and

Chiquita Brands International, Inc. (collectively “the Chiquita

entities”), and Del Monte Tropical Fruit Company and Del Monte

Fresh Produce, N.A. (collectively “the Del Monte entities”).

Defendants are alleged to have designed, manufactured, sold, or

used DBCP.

The filing of these cases in the state courts of Texas was by

no means happenstance. In a classic exercise of forum shopping,

Plaintiffs selected Texas because, among other plaintiff-friendly

features, its law at the time of filing provided no applicable

doctrine of forum non conveniens pursuant to which their actions

could be dismissed. See Dow Chemical Co. v. Castro Alfaro, 786

S.W.2d 674, 679 (Tex. 1990).2

2
The Texas legislature subsequently enacted a statute making
the doctrine of forum non conveniens applicable to personal injury
actions filed on or after September 1, 1993. See Tex. Civ. Prac.
& Rem. Code § 71.051. Plaintiffs filed the instant actions before
that date.

6
 In response, Defendants determined that removal of these cases

to federal court, where forum non conveniens was available, would

be an effective way to send these suits back to their countries of

origin. In pursuit of their objective, a different pre-designated

defendant in each of the six cases first filed a third-party

petition impleading Dead Sea Bromine Company, Limited (“Dead Sea”).

Next, Dead Sea removed each action to federal court by virtue of

its alleged status as a "foreign state" under the Foreign Sovereign

Immunity Act (“FSIA”), 28 U.S.C. §§ 1602-1611.3 As the third step,

Dead Sea waived its sovereign immunity in each of the federal

cases.

But, among other things, Plaintiffs contend that Texas Rule of

Civil Procedure 38(a) requires a third-party plaintiff to obtain

leave of court to serve a third-party petition when it is filed

more than thirty days after service of the defendant’s original

state court answer.4 In four of the six cases, the third-party

petitions were filed more than thirty days after the answers. In

the remaining two cases, the third-party petitions were filed

3
Under 28 U.S.C. § 1441(d), a foreign state is entitled to
remove to federal court any civil action brought against it in a
state court.
4
Tex. R. Civ. P. 38(a) provides, "The third-party plaintiff
need not obtain leave to make the service [on the third-party
defendant] if he files the third-party petition not later than
thirty (30) days after he serves his original answer. Otherwise,
he must obtain leave on motion upon notice to all parties to the
action."

7
within less than thirty days following the answers, so leave of

court was not required.

B. Prior Proceedings

Against this backdrop, we pause to recount in turn the

individual procedural history of each case, for cognizance of the

prior proceedings in each is essential to our determination of (1)

the efficacy of Defendants’ joinder of Dead Sea, (2) the validity

of Dead Sea’s removals, and (3) the existence of federal subject

matter jurisdiction.

1. Delgado v. Shell Oil Co. (“Delgado”)

The Delgado plaintiffs are more than 2,000 residents of three

foreign countries who filed suit originally in Galveston County,

Texas.5 The defendants in Delgado previously attempted to remove

to federal court, asserting that the Federal Insecticide,

Fungicide, and Rodenticide Act (“FIFRA”), 7 U.S.C. §§ 136-136y,

preempted the plaintiffs’ claims and provided federal question

jurisdiction. The district court remanded, noting that even if the

FIFRA preempted the Delgado plaintiffs’ claims, there was no

federal question jurisdiction. See Rodriguez v. Shell Oil Co., 818

5
The Delgado plaintiffs are residents of Costa Rica, Nicaragua,
or Panama. The Delgado defendants are Shell, Dow, Occidental, the
Standard Fruit entities, the Dole entities, the Chiquita entities,
and the Del Monte entities.

8
F. Supp. 1013, 1018 (S.D. Tex. 1993).6 Subsequently, Defendant Del

Monte Fresh Produce, N.A., filed an original answer in state court

and, within thirty days, served a third-party petition impleading

Dead Sea and its American affiliate, Ameribrom, Inc., (“Ameribrom”)

as third-party defendants. State court leave to serve the third-

party petition was not required. Later the same day that the

third-party petition was filed against it, Dead Sea removed the

case to the Southern District of Texas, Galveston Division.7

The other defendants joined in the removal and filed cross-

claims against Dead Sea and, in some cases, against one another.8

Shell filed supplemental notices of removal. The Delgado

plaintiffs filed a motion to remand, asserting lack of subject

matter jurisdiction. The district court denied the motion,

concluding that Dead Sea was a foreign state entitled to remove,

6
Following remand, the state court consolidated Delgado with
Aguilar v. Shell Oil Co., an action brought in that court by an
uncertified class of all persons (and their spouses) in Costa Rica
who had been adversely exposed to DBCP that was allegedly designed,
manufactured, marketed, distributed, or sold by one or more of the
defendants and who had not already commenced an individual civil
action. The defendants in Aguilar are Shell, Dow, Occidental, and
the Standard Fruit entities.
7
The district judge to whom the case was originally assigned
recused himself. The case was transferred to the Houston Division
and assigned to the district judge whose decisions form the basis
of these appeals.
8
Del Monte Fresh Produce, N.A., did not file a cross-claim
against Dead Sea.

9
pursuant to 28 U.S.C. § 1441(d),9 and consolidated Delgado with

Jorge, which we consider next.

2. Jorge Carcamo v. Shell Oil Co. (“Jorge”)

The Jorge plaintiffs are nine representatives who filed suit

originally in Brazoria County, Texas, on behalf of themselves and

an uncertified class of more than 16,000 citizens and residents of

twelve foreign countries.10 Defendant Dow filed a third-party

petition against Dead Sea, Ameribrom, and the Del Monte entities

and delivered a courtesy copy of that petition to Dead Sea. More

than thirty days had elapsed since Dow had served its original

answer in state court, and Dow did not obtain state court leave

prior to filing the third-party petition. Regardless, on the same

day that Dow filed its third-party petition, Dead Sea removed the

case to the Southern District of Texas, Galveston Division.11

Predictably, the other defendants joined in the removal, asserting

9
The district court refrained from deciding at that time
whether Dead Sea’s presence conferred federal subject matter
jurisdiction.
10
The Jorge plaintiffs are residents of Burkina Faso, Costa
Rica, Dominica, Ecuador, Guatemala, Honduras, Ivory Coast,
Nicaragua, Panama, the Philippines, Saint Lucia, or Saint Vincent.
One of the Honduran plaintiffs is allegedly a resident of
California. The Jorge defendants are the same as those in Delgado
with the exception of the Del Monte entities, which are not
defendants in Jorge.
11
The district judge to whom the case was originally assigned
(and to whom Delgado had also been originally assigned) recused
himself. The case was transferred to the Houston Division and
ultimately assigned to the district judge whose decisions form the
basis of these appeals.

10
additional bases of subject matter jurisdiction, and filed cross-

claims. Shell filed supplemental notices of removal. The Jorge

plaintiffs filed motions to remand, arguing that (1) Dead Sea’s

removal was procedurally defective for want of state court leave to

serve Dead Sea, and that (2) the district court lacked subject

matter jurisdiction as the Jorge plaintiffs’ Seventh Amended

Petition expressly renounced any intention of pursuing claims

against Dead Sea or its affiliated entities, thus rendering Dead

Sea’s joinder "fraudulent." Subsequent to removal, however, Dow

moved for leave to serve an amended third-party complaint

impleading, inter alia, Dead Sea.12 The motion was referred to a

magistrate judge, who granted the motion.

12
The other third-party defendants served were Ameribrom, the
Del Monte entities, AMVAC Chemical Corp. (“AMVAC”), Saint Lucia
Banana Growers Association, Saint Vincent Banana Growers
Association, Dominica Banana Growers Association, and Programa
Nacional de Banano. Del Monte Fresh Produce, N.A., then filed a
fourth-party complaint impleading Bromine Compounds, Ltd.,
(“Bromine”) a wholly owned subsidiary of Dead Sea. The district
court later dismissed Dominica Banana Growers Association, Saint
Lucia Banana Growers Association, Saint Vincent Banana Growers
Association, and Programa Nacional de Banano.

11
 3. Rodriguez v. Shell Oil Co. (“Rodriguez”)

The Rodriguez plaintiffs are Honduran citizens and residents

who filed suit originally in Jim Hogg County, Texas.13 Defendants

Shell and the Chiquita entities filed third-party petitions against

Dead Sea and Ameribrom more than thirty days after filing their

original answers in state court, without any prior approval by the

state court. After these petitions were filed, Dead Sea removed

the case to the Southern District of Texas, Laredo Division. The

other defendants joined in the removal, asserting additional bases

of federal subject matter jurisdiction, and filed cross-claims

against Dead Sea. Shell filed supplemental notices of removal.

The Rodriguez plaintiffs moved to remand, asserting lack of subject

matter jurisdiction. The district court in Laredo transferred

Rodriguez to the Houston Division where it was consolidated with

Delgado, Jorge, and the following case.

4. Erazo v. Shell Oil Co. (“Erazo”)

In Erazo, a lone Honduran citizen filed suit originally in

Hidalgo County, Texas.14 Defendant Shell filed a third-party

petition against Dow, Occidental, Dead Sea, Ameribrom, and AMVAC

13
One Rodriguez plaintiff is alleged to be a resident of Texas
and another a resident of Michigan. The Rodriguez defendants are
the same as those in Jorge.
14
Shell attempted to remove, asserting federal question
jurisdiction based on FIFRA preemption, but the district court
remanded for lack of subject matter jurisdiction, as it did in
Delgado and Rodriguez.

12
more than thirty days after answering and without leave to serve

the petition. Dead Sea immediately removed the case to the

Southern District of Texas, McAllen Division. The remaining

defendants joined in the removal, asserting additional bases of

federal subject matter jurisdiction, and filed cross-claims against

Dead Sea. Shell filed supplemental notices of removal. The Erazo

plaintiff moved to remand, asserting lack of subject matter

jurisdiction. The district court transferred the case to the

Houston Division where it was consolidated with the others.

5. Isae Carcamo v. Shell Oil Co. (“Isae”)

Isae was originally brought in Morris County, Texas, by

another lone Honduran citizen and resident.15 Defendant Dow filed

a single pleading containing both an answer and a third-party

petition against Dead Sea, Ameribrom, and the Del Monte entities.

As a result, state court leave to serve that petition was not

required. Dead Sea removed the case to the Eastern District of

Texas, and the other defendants joined in the removal, asserting

additional bases of federal subject matter jurisdiction, and filed

cross-claims against Dead Sea. Shell filed supplemental notices of

removal. The Isae plaintiff moved to remand, asserting lack of

15
Originally, Shell was the only Isae defendant. Shell filed a
notice of removal, asserting federal question jurisdiction based on
FIFRA preemption, but the district court remanded the case for the
reasons articulated in Delgado, Rodriguez, and Erazo. The
plaintiff then amended his petition to add, as defendants, Dow,
Occidental, the Dole entities, and the Standard Fruit entities.

13
subject matter jurisdiction. The case, however, was consolidated

with Valdez, which we consider last.

6. Valdez v. Shell Oil Co. (“Valdez”)

The plaintiffs in Valdez are more than 6,000 citizens of eight

foreign countries who filed suit originally in Morris County,

Texas.16 More than thirty days after answering, Defendant Dow filed

a third-party petition against the Del Monte entities, Dead Sea,

and Ameribrom and delivered a courtesy copy of that petition to

Dead Sea. Dead Sea removed the case to the Eastern District of

Texas. The other defendants joined in the removal, asserting

additional bases of federal subject matter jurisdiction, and filed

cross-claims against Dead Sea. Shell filed supplemental notices of

removal. The district court consolidated Valdez with Isae.

Subsequent to removal, Dow moved for leave to serve an amended

third-party complaint to implead, inter alia, Dead Sea.17 The

magistrate judge assigned to the Valdez case granted the motion and

also denied remand in both Valdez and Isae, concluding that federal

subject matter jurisdiction existed in the two cases. Thereafter,

16
The Valdez plaintiffs are citizens of Burkina Faso, Dominica,
Ecuador, Honduras, Ivory Coast, the Philippines, Saint Lucia, or
Saint Vincent. At least two of them allegedly reside in Texas.
The Valdez defendants are the same as those in Jorge.
17
The other third-party defendants served were Ameribrom, the
Del Monte entities, AMVAC, Saint Lucia Banana Growers Association,
St. Vincent Banana Growers Association, and Programa Nacional de
Banano.

14
Valdez and Isae were transferred to the Southern District of Texas,

Houston Division, where they were consolidated with the other four

cases.

C. The Houston District Court’s Proceedings

Once the six cases were consolidated in the Houston Division

of the Southern District, Plaintiffs filed (1) motions to remand,

asserting lack of subject matter jurisdiction and procedurally

defective removal, and (2) motions to strike the third-party claims

or, in the alternative, to dismiss Dead Sea and its affiliated

entities for fraudulent joinder, and to remand the underlying

claims. Defendants contested the fraudulent joinder allegation,

asserting the validity of their third-party claims against Dead Sea

based on the laws of the home countries of several of the

plaintiffs. As a final step, Defendants filed motions to dismiss

all of the removed cases for forum non conveniens.

The district court addressed first whether Dead Sea’s removals

were proper in Jorge, Valdez, Rodriguez, and Erazo, the cases in

which Texas law required leave of state court to serve the third-

party petitions. The court concluded that all removals were

premature and, thus, defective for want of leave. Deferring to the

authority of the state court to determine in the first instance

whether third-party joinder was appropriate, the district court

remanded Rodriguez and Erazo. On appeal, neither party challenges

this decision to remand.

15
 In Jorge and Valdez, however, the district court noted that

magistrate judges had issued post-removal orders granting leave to

implead Dead Sea into federal court pursuant to Federal Rule of

Civil Procedure 14. The district court assumed that Dead Sea had,

thus, validly been made a party in federal court and would remain

a party on remand to state court. Speculating that Dead Sea would

"immediately exercise its presently mature right to again remove

the actions to federal court," the district court concluded that

remand would be futile and denied remand.

The district court also denied remand in the final two cases,

Delgado and Isae (the "under thirty days" cases), in neither of

which had leave to make service on Dead Sea been required under

Texas law.18 Invoking the doctrine of forum non conveniens, the

district court then dismissed all four cases that remained

unremanded -- the two "over thirty days" cases and the two "under

thirty days" cases.

As conditions precedent to dismissal, the district court

required Defendants (including third- and fourth-party defendants)

to (1) waive all jurisdictional and certain limitation-based

defenses, (2) permit the dismissed plaintiffs a reasonable period

within which to conduct discovery before trial in their home

18
In Delgado, Del Monte Fresh Produce, N.A., filed a third-party
petition against Dead Sea within thirty days of the service of its
(Del Monte’s) answer in state court. In Isae, Dow filed a single
pleading containing an answer and a third-party petition against
Dead Sea.

16
countries, and (3) agree to satisfy those plaintiffs’ concerns with

respect to the enforceability of foreign judgments that might be

rendered against Defendants. In addition, the district court

permanently enjoined the dismissed plaintiffs from commencing or

causing to be commenced in the United States any DBCP action and

from intervening in Rodriguez and Erazo, the two remanded cases.

Finally, the district court agreed that it would re-assume

jurisdiction, on proper motion, if the highest court in any foreign

country should affirm a dismissal for lack of jurisdiction over any

action commenced by a dismissed plaintiff in his home country or

his country of injury.

D. The Agreements Between Defendants And Dead Sea

On the day that Dead Sea was required to stipulate to foreign

judgment, Defendants and Dead Sea entered into a pair of agreements

which together allocated their joint liability in the event of an

adverse judgment.19 Those agreements stipulated Dead Sea’s maximum

percentage market share liability in each foreign country. In no

country was that share greater than 2.5%.

As soon as Plaintiffs got word of the existence of the

19
The first agreement was executed by the "Manufacturer
Defendants," defined as Dow, Shell, and Occidental, and "Dead Sea,"
defined as Dead Sea and Bromine. The second agreement was executed
by the "Non-Manufacturer Defendants," defined as the Standard Fruit
entities, the Dole entities, the Del Monte entities, and the
Chiquita entities, and "Dead Sea," again defined as Dead Sea and
Bromine.

17
agreements, they filed a motion for relief from final judgment,

pursuant to Federal Rule of Civil Procedure 60(b)(2), arguing that

Defendants (1) never intended to prosecute their claims against

Dead Sea and (2) joined Dead Sea only to gain entry into federal

court. Plaintiffs asked the district court to remand the entire

matter to state court or, in the alternative, to sever the third-

party claims and remand the underlying ones. The district court

denied Plaintiffs’ motion.

E. The Re-Removal Of Rodriguez

When the district court remanded Rodriguez to Texas state

court on July 11, 1995, the Standard Fruit entities had on file a

“Special Appearance Objecting to Jurisdiction, First Amended Motion

to Transfer Venue, or in the Alternative Motion to Dismiss, and

First Amended Original Answer.” In essence, the Standard Fruit

entities had filed their answers subject to and without waiving

their special appearances. Upon remand, the state court addressed

and denied the Standard Fruit entities’ special appearances on

February 2, 1996, with the order filed on February 5, 1996. On

March 4, 1996, without obtaining leave from the state court, the

Standard Fruit entities filed third-party petitions naming Dead

Sea, Bromine, and AMVAC as third-party defendants and delivered

courtesy copies to Dead Sea and to Bromine. Thereafter, Dead Sea

and Bromine removed the case to the Laredo Division of the Southern

18
District of Texas, asserting federal question jurisdiction as a

foreign state under the FSIA. The case was then transferred to the

federal district court at Houston, whose decisions form the basis

of these appeals.

In the district court, the Rodriguez plaintiffs moved for

remand, arguing that the Standard Fruit entities should have asked

for leave from the state court before filing their third-party

petitions pursuant to Rule 38(a) because the Standard entities had

filed their original answers in August of 1993 and their amended

original answers on September 17, 1993, over two years from the

time that the Standard Fruit entities had filed their third-party

petitions. The district court denied the motion, finding that the

Standard Fruit entities’ answers were conditional and did not

become effective for purposes of Rule 38(a) until the state court

overruled the Standard Fruit entities’ special appearances. As in

Delgado, the Rodriguez plaintiffs sought to strike the third-party

claims on grounds of fraudulent joinder or, in the alternative, to

sever the third-party claims while the Defendants moved for

dismissal on forum non conveniens. The district court denied the

Rodriguez plaintiffs’ motions, but granted dismissal subject to the

same conditions as in Delgado.

F. The Appeals20

20
Erazo is not on appeal.

19
 In appeal No. 95-21074, Plaintiffs timely seek review of the

district court’s dismissal of the "over thirty days" cases (Jorge

and Valdez) and the "under thirty days" cases (Delgado and Isae),

asserting that the district court erred in denying remand and in

dismissing these cases for forum non conveniens. Specifically,

Plaintiffs maintain that: (1) Dead Sea is not a "foreign state"

under the FSIA; (2) the magistrate judges’ orders in the "over

thirty days" cases were nullities which could neither cure

Defendants’ defective joinder of Dead Sea and Dead Sea’s premature

removal nor confer on the district court its otherwise lacking

subject matter jurisdiction; (3) Dead Sea was fraudulently joined;

and (4) the district court abused its discretion in denying

Plaintiffs’ Rule 60(b)(2) motion. In appeal No. 97-20060, besides

charging that Dead Sea is not a “foreign state” under the FSIA and

that it was fraudulently joined, Plaintiffs contend that the

district court erred when it ruled that the Standard Fruit

entities’ answers did not become effective for purposes of Rule

38(a) until the state court overruled their special appearances.

In neither of the appeals, however, do Plaintiffs explicitly take

umbrage with the substance of the district court’s forum non

conveniens analysis, or its use by the court were we to conclude

that it had subject matter jurisdiction.21

21
Defendants and third-party defendants also cross-appealed,
seeking modification of the district court judgment to incorporate
the protections of the Uniform Foreign Money-Judgments Recognition

20
 II. DISCUSSION

A. Subject Matter Jurisdiction And The Foreign Sovereign Immunity
Act

Before proceeding to the other issues raised in these appeals,

we must first address whether the district court would have subject

matter jurisdiction over any case that Dead Sea properly removed,

for original jurisdiction is absolutely essential to the

maintenance of an action in federal court. See Avitts v. Amoco

Prod. Co., 53 F.3d 690, 693 (5th Cir. 1995). If we conclude that

the district court lacked subject matter jurisdiction, we have no

choice but to remand the cases to state court. See 28 U.S.C.

§ 1447(c) ("If at any time before final judgment it appears that

the district court lacks subject matter jurisdiction, the case

shall be remanded."). We review questions of federal subject

matter jurisdiction de novo. See United States v. Teran, 98 F.3d

831, 833-34 (5th Cir. 1996).

The district court based its jurisdiction solely on Dead Sea’s

presence in the cases, concluding that Dead Sea was a "foreign

state" entitled to remove to federal court and that its waiver of

sovereign immunity conferred jurisdiction. Under the express

provisions of 28 U.S.C. § 1330, the district courts are vested with

Act and equivalent common law rules. Defendants later withdrew
their request to modify the district court judgment after
Plaintiffs conceded that nothing in the district court’s orders or
the agreements submitted by Defendants, as required by those
orders, deprives Defendants of the protections of those laws.

21
original jurisdiction of civil actions against a foreign state as

defined by § 1603(a), as to which the foreign state is not entitled

to immunity under §§ 1605-1607. Furthermore, according to the

federal removal statutes, a foreign state, as defined in 28 U.S.C.

§ 1603(a), may remove any civil action brought against it in a

state court. See 28 U.S.C. § 1441(d). Section 1603 provides in

pertinent part:

(a) A "foreign state", . . . includes a
political subdivision of a foreign state or an
agency or instrumentality of a foreign state as
defined in subsection (b).

(b) An "agency or instrumentality of a
foreign state" means any entity --

(1) which is a separate legal person,
corporate or otherwise, and

(2) which is an organ of a foreign state
or political subdivision thereof, or a
majority of whose shares or other ownership
interest is owned by a foreign state or
political subdivision thereof, and

(3) which is neither a citizen of a State
of the United States . . ., nor created under
the laws of any third country.

28 U.S.C. § 1603. Dead Sea is not "a political subdivision of a

foreign state;” therefore, to pass muster as a foreign state, it

must be an "agency or instrumentality of a foreign state as defined

in subsection (b)." Id. None of the parties question that Dead

Sea meets the first and third requirements of that subsection; the

only issue is whether a majority of Dead Sea’s shares are owned by

a foreign state, as required by (b)(2).

22
 Indisputably a foreign state, the State of Israel owns 75.3%

of Israel Chemicals Limited, an entity which owns 88.2% of Dead Sea

Works Limited, which in turn owns 100% of Dead Sea. Through this

tiered structure, there is no question that Israel indirectly owns

a majority interest in Dead Sea. Plaintiffs insist, however, that

indirect ownership is insufficient to qualify an entity for foreign

state status. We disagree. Based on our reading of the statute,

we discern nothing to support the proposition that indirect

ownership of the requisite percentage precludes an entity from

qualifying as a foreign state.

The plain language of the statute simply requires "ownership"

by a foreign state. It draws no distinction between direct and

indirect ownership; neither does it expressly impose a requirement

of direct ownership. Indeed, we have previously indicated that

indirect ownership is sufficient to confer foreign state status.

In Linton v. Airbus Industrie, we stated:

[T]he resolution of the Airbus Defendants’ claim of
immunity turns on whether through "tiering" a
foreign state’s ownership interest can be
attributed when that foreign state did not own a
majority interest in the company that held the
ownership interest in Airbus . . . .[Section 1603],
however, erects no explicit bar to the methods by
which a foreign state may own an instrumentality,
merely requiring that the entity claiming immunity
-- not its parent -- have a "majority of [its]
shares or other ownership interest . . . owned by a
foreign state or a political subdivision thereof.”
There is no mention of "voting" or "control"
majority, thus equitable or beneficial majority
ownership is not expressly prohibited from serving.

23
30 F.3d 592, 598 n.29 (5th Cir. 1994) (citations omitted). Should

any doubt remain concerning this Circuit’s position on tiering or

indirect ownership, we squarely hold today that indirect or tiered

majority ownership is sufficient to qualify an entity as a foreign

state, assuming that all other requirements are met. In so doing,

we join at least two other Circuits that have considered the issue

and reached the same conclusion. See In re Aircrash Disaster Near

Roselawn, Ind. on Oct. 31, 1994, 96 F.3d 932, 941 (7th Cir. 1996);

Allendale Mut. Ins. Co. v. Bull Data Sys., Inc., 10 F.3d 425, 426-

27 (7th Cir. 1993); and Gould, Inc. v. Pechiney Ugine Kuhlmann, 853

F.2d 445, 449-50 (6th Cir. 1988). But see Gates v. Victor Fine

Foods, 54 F.3d 1457, 1462 (9th Cir. 1995). We hold, therefore,

that Dead Sea is a foreign state for purposes of the FSIA and can

create federal subject matter jurisdiction in actions that it

properly removes to federal court. We turn next to consider the

validity of Dead Sea’s removals.

B. Removal

1. Standard of Review

In dismissing the cases for forum non conveniens, the district

court implicitly denied plaintiffs’ motions to remand. We review

the district court’s refusal to remand de novo. See Herron v.

Continental Airlines, Inc., 73 F.3d 57, 58 (5th Cir. 1996).

2. Removal and Texas Rule of Civil Procedure 38(a)

24
 In the "over thirty days" cases, Texas Rule of Civil Procedure

38(a) required state court leave to serve third-party petitions on

Dead Sea. Even though the required leave was not obtained before

removal, the district court upheld the validity of Dead Sea’s

removals by relying on the post-removal orders of two federal

magistrate judges who granted leave to implead Dead Sea pursuant to

Federal Rule of Civil Procedure 14.

Plaintiffs contend that the district court erred in relying on

those orders.22 Plaintiffs’ logic proceeds as follows: (1) at the

time of removal, the state court had not granted leave to serve

Dead Sea, so Dead Sea was not a party in state court; (2) as a non-

party, Dead Sea could not remove to federal court; (3) without Dead

Sea’s presence in federal court, there was no federal subject

matter jurisdiction; and (4) in the absence of subject matter

jurisdiction, (a) the magistrate judges had no authority to issue

post-removal orders, and (b) the district court had no choice but

to remand.

In the face of the district court’s ruling that there had to

have been state court leave to serve the third-party petitions on

Dead Sea and that the removals were, therefore, premature, we

recognize the logical force of Plaintiffs’ argument. Nevertheless,

we reject Plaintiffs’ desired result because, contrary to the

22
Because state court leave to serve the third-party petitions
was not required in the “under thirty days” cases, Plaintiffs do
not challenge their removal on the basis of a failure to comply
with Rule 38(a).

25
district court and Plaintiffs’ view, the removals were not

premature. Generally, service of process is not an absolute

prerequisite to removal. Section 1446(b) expressly provides for

removal of a civil action or proceeding within thirty days after

the receipt by the defendant, “through service or otherwise, of a

copy of an amended pleading, motion, or order or other paper from

which it may first be ascertained that the case is one which is or

has become removable.” We read § 1446(b) and its “through service

or otherwise” language as consciously reflecting a desire on the

part of Congress to require that an action be commenced against a

defendant before removal, but not that the defendant have been

served.23 Indeed, 28 U.S.C. § 1448, which provides that service may

be completed in district court for any removed case from state

court in which any one or more of the defendants was not served

with process or in which the service was not perfected prior to

removal, reinforces a less demanding view of the service

“requirement” prior to removal. And under Texas law, an action has

commenced when a petition is filed. See Tex. R. Civ. P. 22.

Moreover, the removal statute pertaining to a FSIA entity,

does not refer to a served party, or even the term “party,” and it

does not differentiate between parties who have been served and

23
In Murphy Bros. v. Michetti Pipe Stringing, 119 S. Ct. 1322
(1999), the Supreme Court found that mere receipt of a complaint
unattended by any formal service did not trigger a defendant’s time
to remove a case from state court. But the decision did not
address whether service was a prerequisite for a defendant to be
able to remove a case.

26
those who have not. See 28 U.S.C. § 1441(d). Instead, that

removal statute merely states that “[a]ny civil action brought in

a State court against a foreign state . . . may be removed by the

foreign state to the district court . . . .” In light of the fact

that Texas views an action as having commenced when a petition is

filed, Defendants’ filing of their third-party claims initiated

civil actions against Dead Sea, which allowed for the instant cases

to be removed under § 1441(d).24

Accordingly, Defendants’ failure to seek leave under Rule

38(a) to serve the third-party petitions on Dead Sea did not

materially affect Dead Sea’s right to remove the instant cases from

state court, and the removals were not improper. Because service

was not a prerequisite to the removal of the “over thirty days”

cases, we need not address in Rodriguez whether the Standard Fruit

entities’ answers became effective for purposes of Rule 38(a) only

after the state court overruled their special appearances.

24
In the case of a third-party petition, one might argue that
under Texas law such a complaint should be viewed differently than
an initial petition with respect to when an action has commenced.
That is, a third-party action should not be viewed as having
commenced until the third-party petition has been filed and served.
Rule 22, however, makes no distinction between an initial petition
and a third-party petition. The filing of both kinds of petitions
commences an action. Additionally, the history of Rule 38(a) and
third-party petitions indicates that any distinction between the
two kinds of petitions, which may have existed in the past,
regarding the commencement of an action was likely eviscerated by
amendments enacted in 1984. Before that year, a party had to seek
leave of court to file and to serve a third-party petition. See
Tex. R. Civ. P. 38(a) (Vernon 1979, amended 1984). After the
amendments, only leave to serve is required. See Tex. R. Civ. P.
38(a).

27
 3. Fraudulent or Collusive Joinder

As another basis for remand, Plaintiffs insist that defendants

"fraudulently" joined Dead Sea for no purpose but to have it invoke

FSIA jurisdiction as Defendants’ ticket for admission into federal

court. For support, they refer to: 1) the speed with which the

removals occurred; 2) the post-removal agreements between

Defendants and Dead Sea; and 3) two of their amended petitions,

which expressly state that they are not asserting any claims

arising out of products attributable to Dead Sea.

We have normally confronted the fraudulent joinder doctrine

when a defendant removes a case based on diversity jurisdiction and

charges that the plaintiff fraudulently joined a non-diverse

defendant to try to prevent removal. That doctrine has not been

applied where, as here, a third-party, foreign sovereign is alleged

to have been joined willingly and cooperatively to create

jurisdiction as a basis for removal. Recognizing this, the

district court pressed a different inquiry of the facts surrounding

Dead Sea’s joinder, pursuant to 28 U.S.C. § 1359, which prohibits

federal jurisdiction "in a civil action in which any party, by

assignment or otherwise, has been improperly or collusively made or

joined to invoke the jurisdiction of such court." “Section 1359 is

designed to prevent the litigation of claims in federal court by

suitors who by sham, pretense, or other fiction acquire a spurious

status that would allow them to invoke the limited jurisdiction of

the federal courts.” Nolan v. Boeing Co., 919 F.2d 1058, 1067 (5th

28
Cir. 1990). Its purpose is “to prevent the manipulation of

jurisdictional facts where none existed before.” Id. And it has

generally been restricted to circumstances involving assignment of

interests from non-diverse to diverse parties to collusively create

diversity jurisdiction. See, e.g., Kramer v. Caribbean Mills,

Inc., 89 S. Ct. 1487 (1969). Because Plaintiffs did not aver that

Defendants had manufactured Dead Sea’s status as a foreign

sovereign or their claims for contribution or indemnity against

Dead Sea, the district court was not persuaded that any

jurisdictional facts had been collusively manipulated in

contravention of § 1359. We believe that the district court was

correct in holding that § 1359 was not applicable.

On appeal, Plaintiffs do not appear to challenge the district

court’s § 1359 analysis. Rather, they question the district

court’s reliance on that statute as opposed to an analysis

predicated on the fraudulent joinder doctrine. As we previously

noted, the district court declined to apply that doctrine because

it perceptively realized that fraudulent joinder is normally

reserved for cases where a third party is alleged to have been

joined to defeat diversity jurisdiction as a basis for removal.

Accordingly, we are wary of recognizing the applicability of that

judicially constructed doctrine in a new context. Moreover,

whether we ought to apply the fraudulent joinder doctrine to

situations where a third-party, foreign sovereign is alleged to

29
have been joined willingly and cooperatively to create jurisdiction

as a basis for removal is complicated by the doctrine’s

intersection with Congress’s paramount desire that a foreign

sovereign have access to a federal forum to ensure uniformity in

procedure and substance. See, e.g., Nolan, 919 F.2d at 1065. That

is, to craft a fraudulent joinder rule to an FSIA entity’s right to

remove an action from state court would conflict with Congress’s

intent. We need not, and do not, resolve these issues today, for

it is apparent that even if the fraudulent joinder doctrine were to

apply to the instant case, Plaintiffs have failed to establish that

Dead Sea was fraudulently joined.

In those more typical fraudulent joinder cases where a party

has been joined to defeat removal, the burden of persuasion is on

the one who cries fraudulent joinder.25 See B., Inc. v. Miller

Brewing Co., 663 F.2d 545, 549 (5th Cir. Unit A Dec. 1981). To

establish fraudulent joinder, the party crying foul must show that

25
In the more typical fraudulent joinder case, the party crying
fraudulent joinder is also the party removing the case. Because
the party invoking removal jurisdiction has the burden of
establishing federal court jurisdiction, see Frank v. Bear Stearns
& Co., 128 F.3d 919, 921-22 (5th Cir. 1997), one might argue that
the burden of persuasion should still be with the party who removed
the case rather than with the party seeking remand but charging
fraudulent joinder. Such an argument, however, presumes that the
removing party has not already satisfied its burden to establish
federal court jurisdiction. After the removing party has satisfied
its burden to establish federal court jurisdiction, the burden of
persuasion with respect to the issue of fraudulent joinder to
create federal court jurisdiction shifts to the party charging
fraudulent joinder.

30
there is no reasonable probability of recovery against the joined

party or that there has been outright fraud in the pleadings of

jurisdictional facts. See id. If there is no arguably reasonable

basis for believing that liability may be established against the

joined party, then remand is appropriate. See id. at 550.

Normally, a court reviewing allegations of fraudulent joinder

should refrain from conducting an evidentiary hearing but may

utilize a summary judgment-like procedure. See Burchette v.

Cargill, 48 F.3d 173, 176 (5th Cir. 1995).

To support their fraudulent joinder allegations, Plaintiffs’

rely upon three main points: 1) the speed with which the removals

occurred; 2) the post-removal agreements between Defendants and

Dead Sea; and 3) two of Plaintiffs’ amended state court petitions,

which expressly state that they are not asserting any claims

arising out of products attributable to Dead Sea. With respect to

the first point, the intervals between the filing of the third-

party petitions by Defendants and the filing of the notices of

removal by Dead Sea were short, but in our view that time interval

in and of itself is not enough to establish fraudulent joinder.

Indeed, opposing parties often notify each other about pending

petitions and arrange for their convenient delivery. See, e.g., 28

U.S.C. § 1608(b)(1) (contemplating special arrangements for service

by parties suing agencies or instrumentalities of foreign states).

As for Plaintiffs’ second point, the post-removal agreements

31
between Defendants and Dead Sea were dated nearly sixteen months

after the filing of the third-party petitions against Dead Sea in

state court and the removal of those cases. There is nothing in

the record reflecting any negotiation and agreement between

Defendants and Dead sea prior to the filing of the third-party

petitions and the notices of removal. Absent such proof,

Plaintiffs have not established that no cause of action could

possibly have been asserted against Dead Sea by Defendants at the

time of removal.

Plaintiffs’ third basis for fraudulent joinder, however,

merits further discussion. At the time of removal, in two of the

dismissed cases, Jorge and Rodriguez, the latest state court

amended petitions expressly stated that Plaintiffs were not

asserting any “claims because of exposure to DBCP or DBCP-

containing products designed, manufactured, marketed distributed,

or used by Dead Sea Bromine Co., Ltd., Ameribrom, Inc., Israel

Chemical Co., Ltd., Dead Sea Works, Ltd., and the State of Israel.”

The critical issue becomes what law determines the effect of those

disclaimers. Without explanation, Plaintiffs seem to think that

Texas law applies to this determination and dictates the outcome of

any fraudulent joinder analysis.26 Indeed, the only affidavit that

26
The only legal authority that Plaintiffs refer to is an order
in an unrelated DBCP case by a Texas state court judge denying
certain defendants motion to apply Costa Rican law. That order,
though, does not state that Texas law, or any other law, is the
governing law.

32
either Plaintiffs or Defendants refer to in their briefs with

respect to the choice of law issue does not support Plaintiffs’

position but actually suggests the opposite. Defendants, on the

other hand, make a blanket assertion that the relevant choice of

law for determining whether a party was fraudulently joined in a

DBCP-related case is the law of the country where the plaintiff was

exposed to DBCP, i.e., Honduras in the case of Rodriguez and

various foreign countries in the case of Jorge. For support, they

cite to a decision out of the Eleventh Circuit. See Cabalceta v.

Standard Fruit Co., 883 F.2d 1553, 1562 (11th Cir. 1989). In

Cabalceta, several Costa Rican plaintiffs brought suit in Florida

state court against several defendants, including many in the

present appeals, for injuries from exposure to DBCP. The

defendants removed the case to federal district court where it was

ultimately dismissed on forum non conveniens. Among the issues on

appeal was whether the plaintiffs had fraudulently joined one of

the defendants, Dole Fresh Fruit Co. (“Dole”), to defeat removal.

To determine whether the plaintiffs had a colorable cause of

action, the district court applied Florida law. The plaintiffs

charged that this was error because when the district court

dismissed the case on forum non conveniens, it ruled that Costa

Rican law would apply. Noting that the plaintiffs’ pleadings at

the time of removal did not definitely assert that they were

proceeding against Dole under Florida law, the Eleventh Circuit

33
agreed with the plaintiffs and reversed, remanding the fraudulent

joinder issue so that the plaintiffs’ cause of action against Dole

could be evaluated under Costa Rican law.

We find Cabalceta instructive but not dispositive of the

instant cases. We note first that Plaintiffs have not alleged in

either Jorge or Rodriguez that their claims are made under the laws

of any particular state or nation. Next, we turn to the Texas law

of conflicts for guidance as Texas is the state in which the forum

district court sits. See W.R. Grace & Co. v. Continental Cas. Co.,

896 F.2d 865, 873 (5th Cir. 1990). In Gutierrez v. Collins, 583

S.W.2d 312, 318 (Tex. 1979) (Johnson, J.), the Texas Supreme Court

adopted the most significant relationship test as enunciated in

sections 6 and 145 of the Restatement (Second) of Conflicts as

governing all conflicts cases sounding in tort. Those sections

provide:

§ 6. Choice of Law Principles

(1) A court, subject to constitutional
restrictions, will follow a statutory
directive of its own state on choice of law.

(2) When there is no such directive, the
factors relevant to the choice of the
applicable rule of law include

(a) the needs of the interstate and
international systems,

(b) the relevant policies of the
forum,

(c) the relevant policies of other
interested states and the relative

34
 interests of those states in the
determination of the particular
issue,

(d) the protection of justified
expectations,

(e) the basic policies underlying
the particular field of law,

(f) certainty, predictability and
uniformity of result, and

(g) ease in the determination and
application of the law to be
applied.

§ 145. The General Principle

(1) The rights and liabilities of the parties
with respect to an issue in tort are
determined by the local law of the state
which, with respect to that issue, has the
most significant relationship to the
occurrence and the parties under the
principles stated in § 6.

(2) Contacts to be taken into account in
applying the principles of § 6 to determine
the law applicable to an issue include:

(a) the place where the injury
occurred,

(b) the place where the conduct
causing the injury occurred,

(c) the domicile, residence,
nationality, place of incorporation
and place of business of the
parties, and

(d) the place where the
relationship, if any, between the
parties is centered.

These contacts are to be evaluated according
to their relative importance with respect to
the particular issue.

35
In addition, § 173 of the Restatement (Second) of Conflicts states

that “[t]he law selected by application of the rule of § 145

determines whether one tortfeasor has a right to contribution or

indemnity against another tortfeasor.” At least one court has

interpreted that section to mean that the source of law governing

the primary liability claim is also the source of law governing the

contribution claim. See 50-Off Stores, Inc. v. Banque Paribas

(Suisse) S.A., No. SA-95-CA-159, 1997 WL 790739, at *12 (W.D. Tex.

May 20, 1997); cf. Marathon Pipe Line Co. v. Drilling Rig

Rowan/Odessa, 761 F.2d 229, 235 (5th Cir. 1985) (“This court has

held that the body of law establishing the indemnitee’s primary

liability governs his claim for indemnity or contribution against

a third party.”).

Our evaluation of the choice of law issue under these

prescribed rules leads us to conclude that Texas law would not

qualify as the appropriate source of law. Among other things, more

than 99 percent of the Jorge and Rodriguez plaintiffs are citizens

of another country and not of the United States. All of the

plaintiffs’ injuries occurred in various foreign countries,

principally Honduras, and those foreign countries obviously have an

interest in protecting the rights and welfare of their citizens.

And even if the source of law governing Defendants’ contribution

claims were different than that for governing the primary liability

issue, our review suggests no reason why Texas law would

36
necessarily be the preferred choice. As the party crying foul,

Plaintiffs have the burden of proof and persuasion to show that

there is no arguably reasonable basis for believing that liability

may be established against Dead Sea. Plaintiffs have not cited us

to any case law or statutory provision of any jurisdiction, other

than Texas, likely to be chosen as the source of law for

determination of (i) the Plaintiffs’ liability claim against the

various Defendants, (ii) the claims for indemnity or contribution

among the various Defendants, or (iii) the effects of Plaintiffs’

disclaimer respecting Dead Sea on any of the foregoing.

Given the multiplicity of differing provisions that the

various systems of jurisprudence in the countries involved in this

litigation have on the subjects of primary tort liability,

apportionment of liability among joint tortfeasors, indemnity and

contribution, and the disclaimer in this case, and given the

incremental nature of the claimed exposure, the numerous sources of

DBCP’s going into the particular products produced by the

manufacturing Defendants, the apparently very small and

undifferentiated percentage attributable to Dead Sea, and the

various quantities of product that each grower Defendant could have

purchased from any particular manufacturer, we conclude that

Plaintiffs have failed to sustain their burden. Therefore, we are

unable to conclude that Defendants fraudulently or collusively

joined Dead Sea to create federal court jurisdiction and to remove

37
their cases.27

C. Rule 60(b)(2) And The Motion To Sever

Plaintiffs’ final attempt for relief pertains to the district

court’s denial of their Motion for Relief from Final Judgment

pursuant to Federal Rule of Civil Procedure 60(b)(2). That motion

was filed subsequent to Plaintiffs’ discovery of the post-removal

agreements between Defendants and Dead Sea. According to

Plaintiffs, those agreements illustrate 1) that there was

fraudulent or collusive joinder, and 2) that Defendants no longer

have any valid claims against Dead Sea and, hence, no basis for

federal court jurisdiction. Apparently, intertwined with the

denial of the Rule 60(b)(2) motion was another ruling denying

Plaintiffs’ request, in the alternative, to sever the third-party

claims from the primary claims and to remand those primary claims

back to state court. We review both of the district court’s

denials for abuse of discretion. See Fed. R. Civ. P. 14 advisory

committee’s note (stating that a district court has discretion with

respect to severance of a third-party claim); Barrs v. Sullivan,

906 F.2d 120, 121 (5th Cir. 1990) (“The standard of review is

whether the district court plainly abused its discretion in denying

the rule 60(b) motion.”).

27
Because Dead Sea is an agency or instrumentality of a foreign
state and because Defendants did not prematurely remove their cases
or fraudulently implead Dead Sea, we need not address Defendants’
other arguments for removal and subject matter jurisdiction.

38
 Under Rule 60(b)(2), “on motion and upon such terms as are

just, the court may relieve a party or a party’s legal

representative from a final judgment, order, or proceeding for

. . . newly discovered evidence which by due diligence could not

have been discovered in time to move for a new trial under Rule

59(b).” Due to our conclusions with regard to the fraudulent

joinder allegations, we find no abuse of discretion based on

Plaintiffs’ first contention that the post-removal agreements

illustrate fraudulent or collusive joinder. As for Plaintiffs’

second contention that the agreements demonstrate that Defendants

have no valid claims against Dead Sea and, thus, no basis for

federal court jurisdiction, we agree with the district court that

there is still a case or controversy between Defendants and Dead

Sea. Although the agreements cap the maximum liability that Dead

Sea may owe to Defendants for their third-party claims, the

agreements do not definitely outline what the actual liability is

and Dead Sea is not barred from still contesting its liability.

Accordingly, we conclude that the district court did not abuse its

discretion when, confronted with the agreements between Defendants

and Dead Sea, it denied Plaintiffs’ Rule 60(b)(2) motion.

Lastly, the district court did not abuse its discretion when

it denied Plaintiffs’ request to sever Defendants’ third-party

claims from the primary claims and to remand those primary claims

to state court. Indeed, at least one other circuit has held that

a district court has no discretion to remand a plaintiff’s claims

39
when a FSIA third-party defendant has removed the third-party and

primary claims to federal court. See In re Surinam Airways Holding

Co., 974 F.2d 1255, 1260 (11th Cir. 1992). Although we decline to

address the specifics of that holding at this time, the Eleventh

Circuit’s decision suggests that the district court’s decision was

not an abuse of discretion. Furthermore, we note that there was no

indication that the third-party claims unduly complicated or

overburdened the primary claims. On the contrary, policy interests

such as efficiency warranted the disposition of all those claims

together. Thus, we find no abuse of discretion in the district

court’s refusal to sever the third-party claims from the primary

claims and to remand those primary claims to state court.

III. CONCLUSION

Initially, we hold that the majority ownership requirement for

an entity to qualify as a "foreign state" under the FSIA is

satisfied by tiered or indirect majority ownership to the same

extent that it is satisfied by direct ownership. Therefore, we

determine that Dead Sea is a "foreign state."

Next, we conclude that Dead Sea did not prematurely remove the

instant cases, notwithstanding Defendants’ failure to seek leave in

state court to serve Dead Sea. Service was unnecessary to trigger

Dead Sea’s right, as a FSIA entity, to remove under the removal

statute.

40
 As for Plaintiffs’ fraudulent joinder argument, we do not

believe that the speed with which the removals occurred or the

post-removal agreements between Defendants and Dead Sea are

indicative of that reprobated tactic. With respect to the Jorge

and Rodriguez cases, the mere inclusion of disclaimers was

insufficient to satisfy Plaintiffs’ burden as to fraudulent

joinder. Plaintiffs failed to establish that Texas law or the law

of any other jurisdiction precluded Defendants from asserting a

cause of action against Dead Sea.

Finally, the district court did not abuse its discretion when

it denied Plaintiffs’ Rule 60(b)(2) motion and their request to

sever the third-party claims from the primary claims and to remand

those primary claims to state court.

AFFIRMED.28

28
During the pendency of this appeal, the parties have filed
numerous motions that have been held in abeyance. Many of those
motions pertain to various settlement agreements that have been
entered into by some, but not all, of the plaintiffs with some, but
not all, of the defendants in each of the cases involved in this
appeal. Among those motions pertaining to the various settlement
agreements, several seek to dismiss this appeal due to those
settlements. Other parties to this appeal have filed objections to
those motions for dismissal. None of the consummated settlements
required our approval as a condition of settlement, and none of the
settlements required dismissal of this appeal as a condition of
settlement. Under those circumstances, we conclude that the most
appropriate course of action is to deny all motions for dismissal
of this appeal based on settlement; however, denial of those
motions for dismissal should not be deemed or construed by any
party as indicating our position, either pro or con, as to the
validity or binding effect of those settlements. Finally, all
other pending motions are dismissed as moot.

g:\opin\95-21074.op3 41