United States Court of Appeals,
Fifth Circuit.
No. 94-60732.
Kenneth BROWN and Elmira Brown, Plaintiffs-Appellees,
International Paper Company, Intervenor-Plaintiff-Appellee,
v.
VALMET-APPLETON, et al., Defendants,
Valmet Paper Machinery, Inc., Defendant-Appellant.
March 18, 1996.
Appeal from the United States District Court for the Southern
District of Mississippi.
Before POLITZ, Chief Judge, and JONES and PARKER, Circuit Judges.
POLITZ, Chief Judge:
Valmet Paper Machinery, Inc. (VPI), a Finnish corporation,
appeals the trial court's denial of a claim of sovereign immunity
as a defense to plaintiffs' complaint. For the reasons assigned we
affirm and remand.
Background
Kenneth Brown was employed by International Paper Company as
an operator at the company's Moss Point, Mississippi paper mill.
On August 1, 1990, Brown suffered serious injury when his right
hand and arm were pulled into a paper winder. He has undergone
several surgical procedures for the reconstruction of his arm and
allegedly is maimed for life.
On July 6, 1993, Brown and his wife filed the instant action
against, inter alia, VPI which responded with a motion to dismiss
for lack of subject matter jurisdiction, invoking the Foreign
1
Sovereign Immunities Act of 1976 (FSIA), codified at 28 U.S.C. §§
1602 et seq.1 In its motion, VPI averred that it was a
wholly-owned subsidiary of Valmet Corporation, 70% of the stock of
which is held by the Republic of Finland. As such, VPI claimed
qualification as a foreign state under 28 U.S.C. § 16032 and
concomitant entitlement to sovereign immunity under 28 U.S.C. §
1604.3 The district court denied this motion, applying the
1
Fed.R.Civ.P. 12(b)(1); Argentine Republic v. Amerada Hess,
488 U.S. 428, 109 S.Ct. 683, 102 L.Ed.2d 818 (1989).
2
§ 1603. Definitions
For purposes of this chapter [28 U.S.C. § 1602 et
seq.]—
(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 as defined in section 1332(a) and
(d) of this title nor created under the laws of
any third country.
3
§ 1604. Immunity of a foreign state from jurisdiction
Subject to existing international agreements to which
the United States is a party at the time of enactment
of this Act 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
2
commercial activity exception to foreign sovereign immunity.4 VPI
timely appealed.
Analysis
The interlocutory order denying VPI's motion to dismiss,
based upon a denial of sovereign immunity under the FSIA, is an
appealable collateral order.5 We review de novo the district
court's legal conclusions concerning VPI's immunity under the FSIA;
we examine for clear error the factual findings upon which those
conclusions are based.6
VPI first contends that the plaintiffs do not allege with
sufficient particularity the jurisdictional facts required to
overcome the presumption of immunity created by 28 U.S.C. § 1604.7
of this chapter.
4
§ 1605. General exceptions to the jurisdictional immunity
of a foreign state
(a) A foreign state shall not be immune from the
jurisdiction of courts of the United 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.
5
Stena Rederi AB v. Comision de Contratos, 923 F.2d 380 (5th
Cir.1991).
6
Walter Fuller Aircraft Sales v. Rep. of Philippines, 965
F.2d 1375 (5th Cir.1992).
7
VPI accords excessive weight to this presumption. In a
determination of immunity under the FSIA, "[o]nce the defendant
3
In considering this contention "we assume that we have truthful
allegations before us though many of those allegations are subject
to dispute"8 and may, if appropriate, look to materials outside of
the complaint to clarify disputed issues.9 The plaintiffs allege,
and information derived from interrogatories and other discovery
devices support, the proposition that VPI was involved in the
production, distribution, and/or installation of the paper winder
which caused Brown's injuries.10 VPI has received fair notice of
the activities upon which the subject matter jurisdiction of the
district court is premised.11 This contention, therefore, is not
alleges that it is a "foreign state,' the plaintiff must produce
some facts to show that the commercial activity exception to
immunity applies, but the defendant retains the ultimate burden
of proof on immunity." Arriba Ltd. v. Petroleos Mexicanos, 962
F.2d 528, 533 (5th Cir.1992) (citations omitted) (emphasis
added). See also United States v. Moats, 961 F.2d 1198 (5th
Cir.1992).
8
Saudi Arabia v. Nelson, 507 U.S. 349, 349, 113 S.Ct. 1471,
1473, 123 L.Ed.2d 47 (1993) (citation omitted).
9
Moran v. Kingdom of Saudi Arabia, 27 F.3d 169 (5th
Cir.1994).
10
That the plaintiffs' allegations embrace the defendants in
globo does not detract from their specificity. An acceptable
reading of the pleadings alleges that each defendant engaged in
the tortious conduct therein described. See Fed.R.Civ.P.
8(e)(2).
11
VPI argues that a "heightened pleading requirement,"
similar to that utilized in cases where the affirmative defense
of qualified immunity has been invoked, is applicable in FSIA
cases. As we recently explained, however, there no longer exists
a per se "heightened" pleading requirement in qualified immunity
cases. Schultea v. Wood, 47 F.3d 1427 (5th Cir.1995) (en banc ).
Rather, in such cases any requirement that a plaintiff clarify
the allegations set forth in his or her complaint arises solely
out of the district court's discretionary authority to order a
reply to a defendant's proffer of a qualified immunity defense.
Id. Neither VPI nor the district court apparently perceived the
4
persuasive.
VPI next challenges the merits of the district court's
decision denying immunity. In Aldy v. Valmet Paper Machinery,12 a
panel of this court affirmed the denial of foreign sovereign
immunity in a case involving facts essentially akin to those at
bar. Finding any legal and factual variance between Aldy and the
instant action irrelevant to today's decision, we adopt the careful
and comprehensive reasoning of our colleagues and affirm the trial
court's denial of immunity.
AFFIRMED and REMANDED for further proceedings consistent
herewith.
* * * * * *
need for that procedure and we do not reach that issue on appeal.
12
74 F.3d 72 (5th Cir.1996).
5