10-4892-cv
USAA Casualty Ins. Co. v. Permanent Mission, et al.
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
August Term, 2011
(Argued: December 6, 2011 Decided: May 25, 2012)
Docket No. 10-4892-cv
_______________________________________________________________
USAA CASUALTY INSURANCE CO., as subrogee of Robert Adelman,
Plaintiff-Appellee,
v.
PERMANENT MISSION OF THE REPUBLIC OF NAMIBIA,
Defendant-Appellant,
RYBACK DEVELOPMENT, INC., FEDERATION DEVELOPMENT CORP.,
Defendants.
______________________________________________________________
Before: CABRANES and WESLEY, Circuit Judges.1
The Permanent Mission of the Republic of Namibia to the United Nations (“the Mission”)
brings this interlocutory appeal from the District Court’s denial of immunity under the Foreign
Sovereign Immunities Act. The District Court (Laura Taylor Swain, Judge) held that the Mission, an
instrumentality of the Republic of Namibia, is not immune from a tort suit based on its alleged failure
to comply with the New York City Building Code.
Affirmed.
1
The Honorable Roger J. Miner, originally a member of the panel, died prior to the resolution
of this case. The two remaining members of the panel, who are in agreement, have determined the
1
ROBERT WILLIAM PHELAN, Cozen O’Connor,
New York, NY, for Plaintiff-Appellee
USAA Casualty Insurance Co.
JAY M. LEVIN (Carolyn P. Short, on the brief),
Reed Smith LLP, Philadelphia, PA, for
Defendant-Appellant Permanent Mission
of the Republic of Namibia.
JOSÉ A. CABRANES, Circuit Judge:
The question presented is whether the Permanent Mission of the Republic of Namibia to the
United Nations (“the Mission” or “Permanent Mission”) may be sued for the damage to an adjoining
property caused by its alleged failure to comply with the New York City Building Code (“the Building
Code”).2 The Mission brings this interlocutory appeal from a November 17, 2010 order of the United
States District Court for the Southern District of New York (Laura Taylor Swain, Judge) denying it
immunity under the Foreign Sovereign Immunities Act (“FSIA”),3 in the circumstances presented.
We affirm.
BACKGROUND4
At some point before the events that gave rise to this action, the Republic of Namibia made the
decision to house the chancery, or base of operations, of its Permanent Mission to the United Nations
in a Manhattan townhouse located at 135 E. 36th Street (the “Building”). The Mission commissioned
extensive interior construction in order to render the Building suitable for a diplomatic mission. To
matter. See 28 U.S.C. § 46(d); 2d Cir. IOP E(b); United States v. Desimone, 140 F.3d 457, 458–59 (2d Cir.
1998).
2
N.Y. City Admin. Code tit. 28, ch.1.
3
28 U.S.C. §§ 1602–1611.
4
The facts in this section are drawn from the Amended Complaint, the allegations of which we
assume to be true for the purpose of reviewing a district court decision dismissing a complaint pursuant
to either Rule 12(b)(1) or 12(b)(6) of the Federal Rules of Civil Procedure. See, e.g., Ford v. D.C. 37
Union Local 1549, 579 F.3d 187, 188 (2d Cir. 2009) (Rule 12(b)(1)); Flagler v. Trainor, 663 F.3d 543, 546
n.2 (2d Cir. 2011) (Rule 12(b)(6)); see generally Ashcroft v. Iqbal, 556 U.S. 662, 677–79 (2009).
2
perform the proposed construction, the Mission hired an independent general contractor, Federation
Development Corporation (“Federation”), which in turn hired a subcontractor, Ryback Development,
Inc. (“Ryback”) (together with Federation, the “Contractors”).
The townhouse adjoining the Building, 133 E. 36th Street, was then owned by Robert Adelman
and insured by USAA Casualty Insurance Co. (“USAA”). The Building was separated from the
Adelman townhouse by a brick and mortar party wall, upon which the support beams of the Adelman
townhouse rested.
In early December 2008, Ryback employees began pouring a reinforced concrete wall in the
interior of the Building, alongside the existing party wall. On December 15, as the concrete wall was
being poured, the party wall collapsed, causing substantial damage to Adelman’s property. Adelman
filed an insurance claim with USAA, which paid Adelman $397,730 for his damages.
On April 21, 2010, USAA brought suit as Adelman’s subrogee against the Contractors and the
Mission (jointly, the “defendants”) in New York State Supreme Court.5 On May 26, 2010, the Mission
removed the suit to federal court, and on July 8, 2010, with court approval, USAA filed an amended
complaint (the “Amended Complaint”). The Amended Complaint alleged five counts against the
Mission, its contractor, and its subcontractor: (1) negligence; (2) nuisance; (3) trespass;
(4) ultrahazardous activity; and (5) res ipsa loquitur.6
5
Adelman has since brought his own suit against the defendants, which was consolidated with
the instant case on October 18, 2011. See USAA Casualty Ins. Co. v. Permanent Mission of the Republic of
Namibia, No. 10 Civ. 4262(LTS), Docket Entry 76 (S.D.N.Y. Oct. 18, 2011). We do not address
Adelman’s suit in this appeal.
6
As the Mission correctly notes in its opening brief, the doctrine of res ipsa loquitur does not
constitute a separate cause of action. See Frew v. Hosp. of Albert Einstein Coll. of Med. Div. of Montefiore
Hosp. & Med. Ctr., 76 A.D.2d 826, 826 (2d Dep’t 1980) (“Res ipsa loquitur is an evidentiary rule and as
such does not constitute a separate cause of action.”). We list it here merely in the interest of
completeness.
3
In alleging that the Mission had committed a tort against Adelman, USAA relied primarily upon
Section 3309.8 of the New York City Building Code. In pertinent part, that section states:
When any construction or demolition operation exposes or breaches an adjoining wall,
including load bearing and non load-bearing walls as well as party walls and non party
walls, the person causing the construction or demolition operation shall, at his or her
own expense, perform the following: (1) Maintain the structural integrity of such walls,
have a registered design professional investigate the stability and condition of the wall,
and take all necessary steps to protect such wall.7
USAA alleged that the Mission had violated that section of the Building Code by, among other
things, “failing to shore up the common wall.”
On July 28, 2010, the Mission moved to dismiss the Amended Complaint pursuant to Federal
Rule of Civil Procedure 12(b)(1),8 arguing that the District Court lacked subject matter jurisdiction over
the Mission because it is entitled to sovereign immunity under the FSIA. It also argued that the
Amended Complaint should be dismissed pursuant to Federal Rule of Civil Procedure 12(b)(6) for
failure to state a claim upon which relief can be granted.9
On November 17, 2010, the District Court granted the motion to dismiss in part, denied it in
part, and held that the Mission was not entitled to sovereign immunity.10 Reasoning that the Mission’s
case “falls squarely within the [tortious activity] exception” to the immunity from suit conferred by the
7
N.Y.C. Code § 3309.8.
8
Federation and Ryback did not move to dismiss and have not yet answered the Amended
Complaint. The case against the Contractors was stayed by the District Court pending the outcome of
this appeal.
9
The Mission also moved to dismiss the Amended Complaint on the ground that it had not
been properly served with process pursuant to 28 U.S.C. § 1608(a)(4). The District Court determined
that service had not been perfected, but granted USAA leave to properly serve the complaint within
sixty days of its order. The District Court also denied USAA’s cross-motion, pursuant to Federal Rule
of Civil Procedure 4(d)(2), to recover the costs of service. Neither ruling is before us on appeal, but
the record shows (and the Mission evidently no longer disputes) that proper service upon the Mission
was effected pursuant to the order of the District Court.
10
USAA Casualty Ins. Co. v. Permanent Mission of the Republic of Namibia, No. 10 Civ. 4262(LTS),
2010 WL 4739945 (S.D.N.Y. Nov. 17, 2010) (“USAA I”).
4
FSIA, the Court held that “[t]he discretionary function provision of 28 U.S.C. § 1605(a)(5)” was
“inapplicable to the instant claim.”11 Accordingly, the Court found that it had subject matter
jurisdiction and denied the motion to dismiss pursuant to Rule 12(b)(1).12 With respect to the Mission’s
motion under Rule 12(b)(6), the District Court granted the motion to dismiss the Third (trespass) and
Fourth (ultrahazardous activity) Counts of the Amended Complaint for failure to state a claim. It
denied the motion to dismiss with respect to the First (negligence), Second (nuisance), and Fifth (res
ipsa loquitur) Counts. The District Court’s ruling on the Rule 12(b)(6) motion is not before us on
appeal.
This appeal followed. The Mission argues on appeal that it is entitled to immunity under the
FSIA from this “suit alleging vicarious liability for negligence of independent contractors who were
hired to renovate a building to make it suitable for use as the Mission.” Br. of Appellant Permanent
Mission of the Repub. of Namib. at 4.
DISCUSSION
A. Appellate Jurisdiction and Standard of Review
We have jurisdiction to hear this interlocutory appeal because the District Court’s November
17, 2010 order denying, on the ground of sovereign immunity, the Mission’s motion to dismiss the
Amended Complaint is immediately appealable under the collateral order doctrine.13
We review “de novo the district court’s conclusions of law regarding jurisdiction under the
FSIA.”14 We also review de novo “‘a dismissal for lack of subject matter jurisdiction where the trial court
11
USAA I, 2010 WL 4739945, at *2–3.
12
Having found that the tortious activity exception applied, the District Court did not address
USAA’s claim that the Mission’s actions also fell within the “commercial activity” and “immovable
property” exceptions to the FSIA.
13
Rogers v. Petroleo Brasileiro, S.A., 673 F.3d 131, 136 (2d Cir. 2012) (“[T]he collateral order
doctrine . . . ‘allows an immediate appeal from an order denying immunity under the FSIA.”’ (quoting
Kensington Int’l Ltd. v. Itoua, 505 F.3d 147, 153 (2d Cir. 2007))).
5
dismissed on the basis of the complaint alone or the complaint supplemented by undisputed facts from
the record.’”15
B. The FSIA
The FSIA “provides the sole basis for obtaining jurisdiction over a foreign state in the courts of
this country.”16 “[A] foreign state is presumptively immune from the jurisdiction of United States
courts; unless a specified exception [to the FSIA] applies, a federal court lacks subject-matter
jurisdiction over a claim against a foreign state.”17 A foreign state’s permanent mission to the United
Nations is indisputably the “embodiment” of that state.18 Accordingly, as USAA concedes, the Mission
is entitled to rely on the defense of sovereign immunity unless an exception to the FSIA applies.
USAA argues that three exceptions to the FSIA bestow subject matter jurisdiction over the
Mission in this case: (1) the “tortious activity” exception,19 (2) the “commercial activity” exception,20
14
City of New York v. Permanent Mission of India to the United Nations, 446 F.3d 365, 368 (2d Cir.
2006).
15
Robinson v. Gov’t of Malaysia, 269 F.3d 133, 138 (2d Cir. 2001) (quoting Mackensworth v. S.S. Am.
Merchant, 28 F.3d 246, 252 (2d Cir. 1994)).
16
Argentine Republic v. Amerada Hess Shipping Corp., 488 U.S. 428, 443 (1989).
17
Saudi Arabia v. Nelson, 507 U.S. 349, 355 (1993); see 28 U.S.C. 1604 (“[A] foreign state shall be
immune from the jurisdiction of the courts of the United States and of the States except as provided in
sections 1605 to 1607 of this chapter.”).
18
Gray v. Permanent Mission of People’s Repub. of Congo to U.N., 443 F. Supp. 816, 820 (S.D.N.Y.
1978).
19
The tortious activity exception provides, in pertinent part, that “[a] foreign state shall not be
immune from the jurisdiction of courts of the United States or of the States in any case . . . (5) . . . in
which money damages are sought against a foreign state for personal injury or death, or damage to or
loss of property, occurring in the United States and caused by the tortious act or omission of that
foreign state or of any official or employee of that foreign state while acting within the scope of his
office or employment; except this paragraph shall not apply to . . . (A) any claim based upon the
exercise or performance or the failure to exercise or perform a discretionary function regardless of
whether the discretion be abused[.]” 28 U.S.C. § 1605(a)(5).
6
and (3) the “immovable property” exception.21 Because we agree with the District Court that the
tortious activity exception applies, we likewise do not address the applicability of the other two
exceptions.
C. The Tortious Activity Exception
The tortious activity exception to the FSIA “permits courts to exercise jurisdiction over foreign
sovereigns where the plaintiff seeks money damages ‘for . . . damage to or loss of property, occurring in
the United States and caused by the tortious act or omission of [the] foreign state . . . .’”22 In
determining whether an alleged action is a tort within the meaning of this federal statute, “we have
applied the law of the state in which the locus of injury occurred”23—in this case, New York.
Accordingly, we first identify the act or omission complained of, and then address whether that act or
omission is in fact tortious under the law of the State of New York.24
20
The commercial activity exception provides that “[a] foreign state shall not be immune from
the jurisdiction of courts of the United States or of the States in any case . . . (2) in which the action is
based upon a commercial activity carried on in the United States by the foreign state; or upon an act
performed in the United States in connection with a commercial activity of the foreign state elsewhere;
or upon an act outside the territory of the United States in connection with a commercial activity of the
foreign state elsewhere and that act causes a direct effect in the United States[.]” 28 U.S.C.
§ 1605(a)(2).
21
The immovable property exception provides that “[a] foreign state shall not be immune from
the jurisdiction of courts of the United States or of the States in any case . . . (4) in which rights in
property in the United States acquired by succession or gift or rights in immovable property situated in
the United States are in issue.” 28 U.S.C. § 1605(a)(4).
22
Swarna v. Al-Awadi, 622 F.3d 123, 144 (2d Cir. 2010) (quoting 28 U.S.C. § 1605(a)(5))
(alteration in the original).
23
Id.; see Robinson, 269 F.3d at 142 & n.11.
24
Robinson, 269 F.3d at 142.
USAA argues that the Mission’s discussion of the merits of the alleged tort is premature and
improper. See Robinson, 269 F.3d at 148 (Sotomayor, J., concurring) (arguing that courts dealing with
FSIA immunity question should not address merits issues). We have previously made clear that, where
a full evaluation of a defendant’s claim of FSIA immunity requires a discussion of the merits of the
underlying complaint, it is “not remarkable,” and indeed, may be “inevitabl[e],” that a district court’s
7
1. The Tortious Act or Omission
The omission alleged in this case is the Contractors’ failure to “shore up” the party wall
between the Mission’s property and the adjoining townhouse, owned by Adelman.25 We therefore turn
to the question of whether that omission constitutes a tort under New York law. To answer that
question, we must determine whether the duty imposed by the Building Code on the Mission, as
landowner, was delegable to its contractors, who conducted the construction.26 We hold that the
Mission was under a nondelegable duty, pursuant to regulation, to ensure that the structural integrity of
the party wall was maintained during construction.
a. The Mission Had a Duty to Ensure the Structural Integrity of the Party Wall
Section 3309.8 of the New York City Building Code imposes upon the “person causing . . .
construction” within a building the duty to “[m]aintain the structural integrity of [party walls],” and to
“take all necessary steps to protect such wall[s].”27 Under New York law, it is well established that “the
words [‘]person or persons causing[’] . . . apply to the owner of the property who employs a third
evaluation of a defendant’s claim of FSIA immunity will require such an “excursion” into the merits of
the plaintiff’s case. See id. at 143 (majority opinion) (“In making the assessment of whether the plaintiff
has alleged actions on the part of the defendant that constitute a tort, the district court may well have
taken an excursion into the same legal territory that it would visit in the course of deciding the case on
the merits. . . . Courts are . . . regularly called upon to inquire into substantive state or federal law to
resolve the threshold question of subject matter jurisdiction under the FSIA”; see also First Fidelity Bank,
N.A. v. Gov’t of Antigua & Barbuda―Permanent Mission, 877 F.2d 189, 194–95 (2d Cir. 1989) (noting that
a dismissal for lack of subject matter jurisdiction in an FSIA case “can look like a decision on the
merits”).
In this case, as will be discussed more fully below, we must touch upon the merits of USAA’s
claim in order to confirm that the Mission, rather than its Contractors, was under a duty to protect the
party wall.
25
The Mission argues that the relevant acts or omissions for the purpose of the tortious activity
exception were its decision to locate its Mission in the Building and to conduct construction in the
Building to prepare it for use as a Mission. We disagree. See Section C, subsection 2, post.
26
See Robinson, 269 F.3d at 142.
27
N.Y.C. Code § 3309.8(1).
8
person” to conduct a construction project.28 The Mission is the owner of the property, and it
employed the contractor who allegedly failed to shore up the party wall. Therefore, the regulation
imposes its duty of care directly upon the Mission.29
The failure to comply with a duty imposed by the Building Code is, at a minimum, evidence of
negligence and can give rise to tort liability under New York law.30 The alleged failure of the Mission to
protect the party wall was a breach of the duty imposed upon it by the Building Code.
b. The Mission’s Duty Was Not Delegable to its Contractors
Our determination that the Building Code imposes a duty of care directly upon the Mission
does not end our inquiry. Although New York law imposes on property owners a general duty to
28
Rosenstock v. Laue, 140 A.D. 467, 470 (1st Dep’t 1910) (construing former Section 22 of the
Building Code); see also id. (“The provision [requiring the ‘person causing’ an excavation to take specific
safety measures] would be of little value if the owner of the property upon which the excavation is
made could relieve himself from all obligation to protect his neighbor’s property by turning the
excavation over to a contractor.”); Victor A. Harder Realty & Constr. Co. v. City of New York, 64 N.Y.S.2d
310, 317–18 (N.Y. Sup. Ct. 1946) (same). The Mission contends that the New York cases holding that
landowners have a nondelegable duty to comply with provisions of the Building Code regulating
excavation are inapposite because no excavation work was alleged to have been undertaken in
connection with the construction at issue in this case. But it is not the type of work being conducted
and regulated that is salient for our purposes, but rather, the bearer of the duty imposed by the
regulation. In this respect, the excavation regulations cited in Rosenstock and its progeny are identical to
the adjoining wall regulation at issue in this case. Each places the duty upon the “person causing” the
excavation or construction.
29
The Mission argues that any duty of care imposed by the Building Code was in any event not
in force at the time of the accident because USAA has not alleged that the “construction . . . operation
expose[d] or breache[d]” the party wall.” N.Y.C. Code § 3309.8. There is indeed an open question as
to whether the party wall was “expose[d] or breache[d]” by the construction in the Building prior to its
collapse. However, in reviewing a decision under Rule 12(b)(1), we draw all reasonable inferences in
the plaintiff’s favor. See Morrison v. Nat’l Austl. Bank Ltd., 547 F.3d 167, 170 (2d Cir. 2008). Drawing all
inferences in favor of USAA as the nonmoving party, as we must at this stage of the proceedings, see
Fed. R. Civ. P. 12(b)(6), we assume for the purpose of this appeal that the construction in the Building
“expose[d] or breache[d]” the party wall.
30
Although a violation of the Building Code does not constitute negligence per se, see Yenem
Corp. v. 281 Broadway Holdings, 18 N.Y.3d 481, 489 (2012), or create absolute liability “without regard to
negligence,” Elliott v. City of New York, 95 N.Y.2d 730, 736 (citation omitted), it is evidence of
negligence and as such must be considered by the court, see id. at 735.
9
maintain their premises in “reasonably safe condition,”31 that duty can normally be delegated to
independent contractors carrying out construction projects. As recently as 2001, in Robinson v.
Government of Malaysia, we observed that
[i]n the specific context of a building undergoing construction by independent
contractors, . . . unless the owner created the condition or had actual or constructive
notice of the condition [and] should have corrected it, the owner owes no duty of care
with respect to defective conditions. The only exceptions to this general [rule] are (i)
for negligent hiring or supervision, (ii) for work that is inherently dangerous, and (iii)
where the employer bears a specific non-delegable duty.32
In this case, the relevant inquiry is whether the Mission’s duty of care was delegable to its
contractors, thereby absolving the Mission itself of tort liability. Because we find that the duty was not
delegable, we need not, and do not, address the remaining grounds for liability discussed in Robinson.
i. New York Law on Nondelegable Duties
Because New York’s courts have not specifically determined whether the particular section of
the Building Code at issue in this case imposes a delegable or nondelegable duty, we must determine
whether “sufficient precedents exist for us to make a prediction of how the New York Court of
Appeals would decide the question.”33 We therefore examine other construction-related statutes and
regulations that have been found to create delegable or nondelegable duties.
Under New York law, “a duty will be deemed nondelegable when the responsibility is so
important to the community that the employer should not be permitted to transfer it to another.”34
The New York Court of Appeals has repeatedly held that statutes and regulations that address specific
31
Basso v. Miller, 40 N.Y.2d 233, 241 (1976) (internal quotation marks omitted).
32
Robinson, 269 F.3d at 145 (emphasis added) (citations, quotation marks, and alterations
omitted).
33
Goodlett v. Kalishek, 223 F.3d 32, 37 n.4 (2d Cir. 2000).
34
Kleeman v. Rheingold, 81 N.Y.2d 270, 275 (1993) (internal quotation marks omitted).
10
types of safety hazards create nondelegable duties of care.35 As the Court of Appeals has explained, a
regulation will generally create a nondelegable duty where it contains a “specific positive command,”
but not where it merely incorporates “the ordinary tort duty of care,” using terms like “adequate,”
“effective,” or “suitable.”36 Accordingly, we examine the text of Section 3309.8 to determine whether it
constitutes a “specific positive command,”37 or merely imposes a “nonspecific and general
obligation[ ].”38
ii. Section 3309.8
As stated above, see text at note 7, Section 3309.8 of the Building Code requires that “[w]hen
any construction or demolition operation exposes or breaches an adjoining wall, including . . . party walls
. . . the person causing the construction or demolition operation shall . . . (1) [m]aintain the structural
integrity of such walls . . . .”39
Section 3309.8 imposes upon the “person causing” the construction the duty to, under specific
circumstances, perform a specific task.40 We think it plain that this section of the Code contains a
35
Compare, e.g., Ross v. Curtis-Palmer Hydro-Elec. Co., 81 N.Y.2d 494, 500 (1993) (“It is by now well
established that the duty imposed by Labor Law § 240(1) is nondelegable and that an owner . . . who
breaches that duty may be held liable in damages regardless of whether it has actually exercised
supervision or control over the work.”), with Verdugo v. Seven Thirty One Ltd. P’ship, 70 A.D.3d 600, 602
(1st Dep’t 2010) (“Because . . . §§ 27–127 and 27–128 of the Building Code set forth only nonspecific
and general obligations of a building owner, [defendant] was entitled to its affirmative defense of ‘acts
of another or independent contractor.’” (citation omitted)).
36
Morris v. Pavarini Constr., 9 N.Y.3d 47, 50 (2007).
37
Id. (internal quotation marks and alteration omitted)
38
Verdugo, 70 A.D.3d at 602.
39
N.Y.C. Code § 3309.8 (emphasis added).
40
We need not decide, and express no view on, whether the term “person causing the
construction” would also apply to the Contractors. See Fagan v. Pathe Indus., Inc., 274 A.D. 703, 706 (1st
Dep’t 1949).
11
“specific positive command” as contemplated by the New York Court of Appeals in Morris v. Pavarini
Construction.41
We accordingly hold that the Section 3309.8 imposes a nondelegable duty upon owners of
buildings who commission construction projects to ensure the structural integrity of an exposed or
breached party wall. The Mission’s alleged failure to shore up, or otherwise protect, the wall would
therefore, if proven, constitute a tort within the meaning of the tortious activity exception to the
FSIA.42
2. The “Exception to the Exception”: The Discretionary Function Exception
Having decided that the Mission’s alleged failure to shore up the party wall was a tort, we now
turn to the “exception to the exception” that allows a foreign state to retain its immunity when the
allegedly tortious activity took place during the exercise of a “discretionary function.” The
discretionary function exception preserves the immunity of a sovereign nation when it would otherwise
be abrogated by the tortious activity exception “if two conditions are met: (1) the acts alleged to be
negligent must be discretionary, in that they involve an element of judgment or choice and are not
compelled by statute or regulation, and (2) the judgment or choice in question must be grounded in
considerations of public policy or susceptible to policy analysis.”43
41
9 N.Y.3d at 50; see supra note 36.
42
The Mission argues that it is absolved of liability by our holding in Roditis v. United States, 122
F.3d 108, 111–12 (2d Cir. 1997). In Roditis, we held that New York’s imposition of a nondelegable duty
was preempted by the Federal Tort Claims Act, 28 U.S.C. § 2671 et seq. (“FTCA”), because the FTCA
has been read to “preclude[ ] government liability absent a negligent act, and, thus ‘does not extend to
liability without fault.’” 122 F.3d at 112 (quoting Dalehite v. United States, 346 U.S. 15, 44 (1953)). Such
an exception has not been read into the FSIA, and we decline to do so here. We therefore conclude
that Roditis is inapposite.
43
Coulthurst v. United States, 214 F.3d 106, 109 (2d Cir. 2000) (addressing discretionary function
exception of the FTCA) (internal quotation marks omitted).
Cases construing the discretionary function exception in the FSIA draw heavily on case law
interpreting a similar exception in the FTCA. See Swarna v. Al-Awadi, 622 F.3d 123, 145 (2d Cir. 2010);
12
“[T]he discretionary function rule is designed to prevent ‘judicial “second-guessing” of . . .
decisions grounded in social, economic, and political policy [of a foreign state] through the medium of
an action in tort.’”44 Therefore, if the act or omission deemed to be tortious is “based upon the
exercise or performance or the failure to exercise or perform a discretionary function regardless of
whether the discretion be abused,”45 the foreign sovereign nation retains its immunity from suit under
the FSIA.
a. “Compelled by Statute or Regulation”
As we held in Coulthurst v. United States, if an action is “compelled by statute or regulation,” it is
not discretionary for purpose of the discretionary function exception.46 In United States v. Gaubert, the
Supreme Court explained that
[t]he requirement of judgment or choice is not satisfied if a federal statute, regulation or
policy specifically prescribes a course of action for the [Government] to follow. . . . [I]f
a regulation mandates particular conduct, and the [Government] obeys the direction,
the Government will be protected because the action will be deemed in furtherance of
the policies which led to the promulgation of the regulation. If the [Government]
violates the mandatory regulation, there will be no shelter from liability because there is
no room for choice and the action will be contrary to policy. On the other hand, if a
regulation allows the [Government] discretion, the very existence of the regulation
creates a strong presumption that a discretionary act authorized by the regulation
involves consideration of the same policies which led to the promulgation of the
regulations.47
O’Bryan v. Holy See, 556 F.3d 361, 383–84 (6th Cir. 2009) (“[N]ot only does the language of the FSIA
discretionary function exception replicate that of the [FTCA], 28 U.S.C. § 2680(a), but the legislative
history of the FSIA, in explaining section 1605(a)(5)(A), directs us to the FTCA.” (internal quotation
marks omitted; second alteration in original)). We therefore draw upon the case law derived from both
statutes in analyzing the Mission’s entitlement to the discretionary function exception.
44
Swarna, 622 F.3d at 146 (quoting United States v. S.A. Empresa de Viacao Aerea Rio Grandense
(“Varig”), 467 U.S. 797, 814 (1984) (addressing the discretionary function rule of the FTCA)).
45
28 U.S.C. § 1605(a)(5)(A).
46
Coulthurst, 214 F.3d at 109.
47
499 U.S. 315, 322, 324 (1991) (citation omitted).
13
We have already held that the Mission’s compliance with its duty to ensure the protection of
the party wall was specifically compelled by regulation and was nondelegable. Our holding above
controls our analysis of the discretionary function exception as well. The Mission’s alleged failure to
ensure the integrity of the wall constituted a “violat[ion of] the mandatory regulation,”48 and the
Mission can therefore find “no shelter from liability”49 within the discretionary tort exception to the
FSIA.
b. The Fact that the Construction Implemented a Discretionary Decision does not Confer
Immunity upon the Mission
The Mission argues that the construction, including the failure to shore up the wall, was an
activity undertaken to implement its discretionary policy decision to locate its chancery at the Building.
In other words, the Mission argues that it is immunized from suit by the FSIA because the accident
occurred in the course of construction that implemented this policy decision.
It is true, of course, that the discretionary function exception generally “protect[s] not only the
initiation of discretionary activities but also the decisions made about how to implement those
activities.”50 Nevertheless, “[t]he fact that certain implementing actions may be insulated from FSIA
liability[ ] does not . . . mean that any action implementing or executing a discretionary policy will be
shielded from liability”51 Rather, “implementing acts must themselves involve the exercise of policy
judgment.”52
48
Id. at 324.
49
Id.
50
Red Lake Band of Chippewa Indians v. United States, 800 F.2d 1187, 1195 (D.C. Cir. 1986); see
MacArthur Citizens Ass’n v. Republic of Peru, 809 F.2d 918, 921 (D.C. Cir. 1987) (“The Supreme Court has
expressly recognized . . . that implementing decisions should be shielded from liability.” (citing Varig,
467 U.S. at 820)).
51
MacArthur Citizens Ass’n, 809 F.2d at 923 (emphasis in original).
52
Id.
14
Although “[i]n some instances,” the determination of whether an act or omission involved the
exercise of policy judgment “may be . . . fraught with difficulty,”53 it is clear to us that the failure to
protect a wall during a construction project is not a matter of “policy analysis.”54 The alleged failure of
the Mission to ensure the structural integrity of the common wall during construction is simply not a
“judgment . . . of the kind that the discretionary function exception was designed to shield.”55
In sum, we reject the Mission’s argument that the immunity accorded to its decision to base its
operations in a townhouse located at 135 E. 36th Street and to renovate the Building for such use
extends to the tort allegedly committed during its implementation of that decision. Although the
Mission was not under an obligation to construct the chancery at any particular location (or, for that
matter, to construct a chancery at all), once it decided to do so it could not disregard the nondelegable
duty of care imposed upon it by the New York City Building Code.56 Accordingly, we hold that the
obligation to protect the party wall was not discretionary, and that the Mission cannot avail itself of the
protection of the FSIA’s discretionary function exception.
53
Id.
54
Cf., e.g., Indian Towing Co. v. United States, 350 U.S. 61, 69 (1955) (although initial decision to
undertake a lighthouse service was discretionary, the failure to adequately maintain the lighthouse in
good condition did not involve any exercise of policy judgment); see also Maalouf v. Swiss Confed., 208
F. Supp. 2d 31, 37 (D.D.C. 2002) (though “establishing a chancery . . . to conduct foreign relations is a
discretionary public policy decision,” the same cannot be said of “the attachment of a retaining wire to
a tree on Embassy property,” a decision that does not implicate “broader considerations of budgetary
constraints, security concerns, and political concerns regarding the image the foreign government
wishes to protect”).
55
Gaubert, 499 U.S. at 322–23 (internal quotation mark omitted).
15
CONCLUSION
To summarize, we hold:
(1) The Mission owed a nondelegable duty to USAA Casualty’s subrogor, Roger Adelman,
pursuant to Section 3309.8 of the New York City Building Code, to ensure the structural integrity of
the common party wall during the course of construction at the future site of the chancery.
(2) Because the Mission allegedly breached its nondelegable duty, it may not invoke the
shield of sovereign immunity in the Foreign Sovereign Immunities Act to avoid a lawsuit seeking to
hold it liable for damage to Adelman’s property.
(3) The Mission may not avail itself of the discretionary function exception to the tortious
activity exception to the FSIA―the “exception to the exception”―in order to avoid tort liability,
because its failure to ensure the structural integrity of the party wall was not discretionary.
Accordingly, the November 17, 2010 order of the District Court is AFFIRMED.
56
See Maalouf, 208 F. Supp. 2d at 37.
16