United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued February 7, 2008 Decided July 25, 2008
No. 07-7050
LA REUNION AERIENNE,
APPELLEE
v.
SOCIALIST PEOPLE'S LIBYAN ARAB JAMAHIRIYA AND
LIBYAN EXTERNAL SECURITY ORGANIZATION,
APPELLANTS
Appeal from the United States District Court
for the District of Columbia
(No. 05cv01932)
Arman Dabiri argued the cause and filed the briefs for
appellants.
Christopher B. Kende argued the cause and filed the brief
for appellee.
Before: SENTELLE, Chief Judge, and GINSBURG and
BROWN, Circuit Judges.
Opinion for the Court filed by Chief Judge SENTELLE.
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SENTELLE, Chief Judge: Defendant-appellants, Socialist
People’s Libyan Jamahiriya and the Libyan External Security
Organization (“LESO”) (hereinafter collectively “Libya”), bring
this interlocutory appeal from an order of the district court
denying in part their motion to dismiss. Plaintiff-appellee La
Réunion Aérienne (“LRA”), a French partnership representing
the interests of a group of insurance companies, brought suit
against Libya alleging that it had made compensation payments
to certain survivors and estates of victims of the bombing of a
French airliner over Africa. The suit further alleged that Libya
was responsible for the bombing and that, after making the
compensation payments, LRA took an assignment of, and
became subrogated to, the rights of the survivors and estates of
the victims. Libya filed a motion seeking to dismiss the suit for
lack of subject-matter jurisdiction, arguing that the district court
did not have jurisdiction under § 1605(a)(7) of the Foreign
Sovereign Immunities Act (“FSIA”), 28 U.S.C. § 1602 et seq.,
upon which plaintiffs relied. In its motion Libya also, inter alia,
sought a determination by the court that punitive damages were
not available to LRA, and complained that service of process
upon a group of individual defendants was not proper. The
district court, inter alia, determined that the court had subject-
matter jurisdiction over the plaintiff’s claims, declined to
presently address the question of punitive damages, and rejected
the argument that service of process had not been properly
effected. We conclude that the issues of punitive damages and
service of process are not properly before us and therefore
dismiss so much of the appeal as raises those issues. As for the
issue of subject-matter jurisdiction, we find that the district court
has subject-matter jurisdiction over LRA’s claims and therefore
affirm the district court’s determination on that issue.
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BACKGROUND
In September of 1989 a French airliner exploded over
Niger, Africa, killing all on board including seven Americans.
LRA apparently insured certain risks in connection with the
airliner and subsequently paid, for personal injury and death,
approximately two million dollars to survivors and estates of the
seven deceased Americans. After an investigation implicated
the Libyan government in planting a bomb on the airliner, LRA
filed a complaint in the district court against Libya and non-
appellants Muammar Qadhafi and six high ranking Libyan
government officials in their personal capacities, seeking, inter
alia, indemnification of the two million dollars and punitive
damages. In general, foreign states are immune from suit in the
United States pursuant to the Foreign Sovereign Immunities Act
(“FSIA”), 28 U.S.C. § 1602 et seq. (Supp. V. 2005). But §§
1605-1607 of the FSIA give federal district courts jurisdiction
over suits against foreign states in certain enumerated categories
of cases. LRA in its complaint asserted that the district court
had jurisdiction over its suit pursuant to § 1605(a)(7), the so-
called “terrorism exception” to foreign sovereign immunity. In
pertinent part, that exception provides for no immunity from
American jurisdiction for foreign states in cases in which
“money damages are sought against a foreign state for personal
injury or death that was caused by an act of . . . aircraft
sabotage.” The exception also states that immunity for the
foreign state is not waived if in such a case “neither the claimant
nor the victim was a national of the United States.” LRA further
argued in its complaint that it was entitled to bring suit against
Libya because, by reason of the two million dollars in payments
and relevant insurance policies, it took assignment of, and
became subrogated to, the rights of the American decedents.
After suit was filed, LRA filed a motion seeking permission
for alternative service of process on the six individual
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defendants. Libya also filed a motion arguing that the case
should be dismissed for lack of subject-matter jurisdiction
because under the terrorism exception it is not open to suit as
LRA is not a national of the United States and as LRA is an
assignee/subrogee and so cannot sue Libya for personal injury
or death. Libya also claimed, inter alia, that LRA could not
seek punitive damages against it and that service of process was
not properly effected on the individual defendants.
The district court disposed of LRA’s motion for alternative
service of process in an order which allowed service to be made
on LESO and the individual defendants in their personal
capacities by way of mail on Libya’s counsel of record, who the
court noted was also counsel of record for the individual
defendants in their official capacities. In a Memorandum
Opinion, La Réunion Aérienne v. Libya, 477 F. Supp. 2d 131
(D.D.C. 2007), the court disposed of the remaining motions at
issue. The court rejected Libya’s claims that the court lacked
subject-matter jurisdiction under the FSIA because LRA was an
assignee/subrogee of the families and estates of the victims and
LRA was not a “national” of the United States. The court
deferred making a determination on the punitive damages claim
and rejected Libya’s argument that service of process was not
properly effected.
Libya now brings this interlocutory appeal, arguing that the
district court’s decisions concerning subject-matter jurisdiction,
punitive damages, and service of process should be overturned.
DISCUSSION
We must first determine whether the issues on appeal are
properly before us; in so doing we conclude that, although the
issue of subject-matter jurisdiction is properly before us, the
issues of punitive damages and service of process are not.
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I. Service of process and punitive damages issues
Libya claims that the district court erred in allowing LRA
to make service of process on the individual defendants in their
personal capacities. In allowing service of process, Libya
asserts that the district court ignored the Federal Rules of Civil
Procedure, constitutional due process requirements, as well as
a stipulation agreed to by the parties. LRA replies that the
individual defendants are not parties to this appeal and that
service of process affected only them; as such, argues LRA,
Libya may not raise this issue on appeal as it is of no concern to
it. In other words, LRA contends that Libya does not have
standing to bring the issue before us. We agree. A necessary
(albeit insufficient) requirement needed to support standing is
for the claimed injury to affect the complaining party “in a
personal and individual way.” Lujan v. Defenders of Wildlife,
504 U.S. 555, 560 n.1 (1992). Here, Libya’s claim that the
individual defendants do not have actual notice of the case in
that they were not properly served, and that therefore the district
court is without personal jurisdiction over the individual
defendants, does not affect Libya personally or otherwise.
Consequently, Libya does not have standing to appeal the
district court’s service of process decision.
The district court declined to presently determine whether
punitive damages were available to LRA, stating that the
determination would depend in part on unresolved choice-of-law
issues, and further stating that the parties were to address the
issue in light of Philip Morris USA v. Williams, 127 S. Ct. 1057
(2007). La Réunion Aérienne, 477 F. Supp. 2d at 137. Libya
argues on appeal that the district court’s refusal to address
whether punitive damages are available to LRA is erroneous
because the issue is to be determined pursuant solely to the
FSIA. But Libya is not in a position to make this argument. In
its Memorandum Opinion and Order the district court noted that
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“[p]laintiff[] concede[s] that punitive damages are available, if
at all, only against the individual defendants sued in their
personal capacities.”1 Id. at 137 n.7. The court deferred
consideration of the availability of punitive damages against the
individual defendants who, as we noted above, are not parties to
this appeal. Libya therefore also does not have standing to
appeal the district court’s decision on punitive damages.
II. Issue of subject-matter jurisdiction
A. Appellate jurisdiction
Whether we have jurisdiction on this interlocutory appeal
over the district court’s decision on subject-matter jurisdiction
is somewhat more involved. First, we are not persuaded by
LRA’s contention that the subject-matter jurisdiction issue here
is really “whether LRA is a proper plaintiff in such an action
against Libya.” LRA argues that although Libya labels this
issue as one of sovereign immunity, the issue is actually one “of
standing for LRA as a plaintiff” and standing is not an issue that
falls within the collateral order exception to the finality rule.
We note, however, that in the proceedings below Libya moved
to dismiss LRA’s complaint for lack of subject-matter
1
We note that plaintiff’s concession regarding punitive
damages applies only to its claims filed under the 1996 Amendment
to the Foreign Sovereign Immunities Act of 1976. Pub. L. No. 104-
132, § 221, 110 Stat. 1214, 1241-42, repealed by national Defense
Authorization Act for Fiscal Year 2008, Pub. L. No. 110-181, § 1083,
122 Stat. 3, 338-44 (codified at 28 U.S.C. § 1605A); see Simon v.
Republic of Iraq, No. 06-7175, slip op. at 7 (D.C. Cir. June 24, 2008)
(holding that “the courts retained jurisdiction over cases pending
pursuant to [the 1996 amendment] when the Congress enacted the
[new terrorism exception]”). It does not apply to any claim that may
be filed under the newly enacted terrorism exception to foreign
sovereign immunity codified at 28 U.S.C § 1605A.
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jurisdiction based on foreign sovereign immunity, and that in its
disposition of the motion the district court in fact decided not
whether LRA had standing, but that Libya does not have foreign
sovereign immunity.
Ordinarily, appeals cannot be taken from the district court
to the courts of appeals until final judgment. See Behrens v.
Pelletier, 516 U.S. 299, 305 (1996). There is, however, “a
‘small class’ of district court decisions that, though short of final
judgment, are immediately appealable because they ‘finally
determine claims of right separable from, and collateral to,
rights asserted in the action, too important to be denied review
and too independent of the cause itself to require that appellate
consideration be deferred until the whole case is adjudicated.’”
Id. (quoting Cohen v. Beneficial Indus. Loan Corp., 337 U.S.
541, 546 (1949)). For this collateral order exception to apply,
the Supreme Court has instructed that the district court’s
decision must “[1] conclusively determine the disputed question,
[2] resolve an important issue completely separate from the
merits of the action, and [3] be effectively unreviewable on
appeal from a final judgment.” Coopers & Lybrand v. Livesay,
437 U.S. 463, 468 (1978).
Our task, then, is to determine whether the district court’s
subject-matter jurisdiction decision satisfies the three prongs of
the collateral order exception under Coopers & Lybrand. The
decision easily meets the first two prongs because it
conclusively determines the issue of subject-matter jurisdiction
and that issue is separate from the merits. As to whether the
decision is effectively unreviewable on appeal from final
judgment, we note that the issue here is subject-matter
jurisdiction based on sovereign immunity. We have observed
previously that “‘sovereign immunity is an immunity from trial
and the attendant burdens of litigation . . .’” Foremost-
McKesson, Inc. v. Islamic Republic of Iran, 905 F.2d 438, 443
8
(D.C. Cir. 1990) (quoting Rush-Presbyterian-St. Luke’s Med.
Ctr. v. Hellenic Republic, 877 F.2d 574, 576 n.2 (7th Cir.
1989)). This is so because when the issue is jurisdictional
immunity, “appeal from final judgment cannot repair the
damage that is caused by requiring the defendant to litigate.”
Rein v. Socialist People’s Libyan Arab Jamahiriya, 162 F.3d
748, 756 (2d Cir. 1998). Consequently, “[t]he denial of a
motion to dismiss on the ground of sovereign immunity satisfies
all three [Coopers & Lybrand] criteria, and is therefore subject
to interlocutory review.” Kilburn v. Socialist People’s Libyan
Arab Jamahiriya, 376 F.3d 1123, 1126 (D.C. Cir. 2004). LRA
nevertheless argues that the issue does not fall within the
collateral order exception because Libya’s claim concerns only
whether LRA can assert the same claims that its assignors and
subrogors can assert, and an appeal of that issue would not
involve the avoidance of a trial that would “imperil a substantial
public interest,” Will v. Hallock, 546 U.S. 345, 353 (2006), and
therefore is not effectively unreviewable if left until a later time.
But LRA mischaracterizes Libya’s claim, which in essence rests
on immunity from suit as a foreign sovereign. In sum, we
conclude that the third prong of the collateral order exception
under Coopers & Lybrand is satisfied and consequently we have
jurisdiction over the issue on this interlocutory appeal.
B. District court jurisdiction
Libya contends that the district court does not have subject-
matter jurisdiction over LRA’s claims. This contention is
founded on two arguments concerning the interpretation of the
FSIA terrorism exception.
Libya first argues that the district court lacks subject-matter
jurisdiction over LRA’s claims because the FSIA prohibits
claims by third-party corporate claimants. In support of this
argument Libya contends that because the claims were assigned
9
to LRA they are no longer for “money damages . . . for personal
injury or death” pursuant to the FSIA, but rather for money
damages for payments made to the victims’ families and estates
under commercial contracts of insurance underwritten by LRA.
Libya claims that as such, the causes of action asserted by LRA
do not arise under the FSIA but rather arise under commercial
contracts of insurance against liability. Libya also contends that
the district court ignored language in the terrorism exception
which states that immunity is not waived if “neither the claimant
nor the victim was a national of the United States (as that term
is defined in . . . the Immigration and Nationality Act).” See 28
U.S.C. § 1605 (a)(7)(B)(ii). Since the Immigration and
Nationality Act defines “national of the United States” as “a
citizen of the United States,” 8 U.S.C. § 1101(a)(22), Libya
argues that the terrorism exception does not allow for third-party
corporate claimants but rather limits the category of claimants
to individuals who are nationals of the United States.
We disagree with Libya’s analysis. First, Libya misses the
link that the payments made by LRA to the victims’ families and
their estates were for money damages for the deaths of the
victims, i.e., for the same claims for money damages that the
families and their estates could make directly against Libya
under the FSIA. As the district court noted, when bringing suit
in these circumstances, third-party insurers such as LRA “step
into the shoes” of the victims’ families and their estates.
Furthermore, the language of § 1605(a)(7) is clear on its face: if
“neither the claimant nor the victim was a national of the United
States” at the time of the terrorist act, immunity is not waived.
In other words, if either the claimant or the victim is a national
of the United States, then immunity is waived. Here, there is no
dispute that the victims were United States nationals; therefore,
Libya’s sovereign immunity is not a bar to LRA’s claims
because it is waived.
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Libya next argues that the district court lacks subject-matter
jurisdiction over LRA’s claims because, as an
assignee/subrogee, LRA’s claims do not come under the FSIA.
Since the FSIA is the sole basis for district court subject-matter
jurisdiction, argues Libya, for the district court to create subject-
matter jurisdiction by “rely[ing] upon the state common law
principles of subrogation and assignment, which are outside of
the FSIA, is clearly erroneous.” Libya has a valid point insofar
as “the meaning of the term” “personal injury” is “by definition
a federal question.” Molzof v. United States, 502 U.S. 301, 305
(1992) (interpreting the punitive damages bar in the Federal Tort
Claims Act). However, when “Congress borrows terms of art in
which are accumulated the legal tradition and meaning of
centuries of practice, it presumably knows and adopts the cluster
of ideas that were attached to each borrowed word.” Id. at 307.
Thus, we must ask what is considered a “personal injury” claim
under “traditional common-law principles.” Id. at 312.
It is well established that the assignee or subrogee owns
“the substantive right” of the claimant. United States v. Aetna
Casualty & Surety Co., 338 U.S. 366, 381 (1949) (insurer suing
the United States as assignee of a personal injury claim); see
also Dow Chem. Corp. v. Weevil-Cide Co., Inc., 897 F.2d 481,
484 (10th Cir. 1990) (“[T]he claim of a . . . subrogee is not a
separate cause of action from the right held by the subrogor, but
is derivative of the underlying claim which the subrogor held
against the subrogation defendant.”) (internal citation and
quotation marks omitted); City of Hope Nat’l Med. Ctr. v.
Healthplus, Inc., 156 F.3d 223, 228 (1st Cir. 1998) (“It is
generally understood that the assignee acquires rights similar to
those of the assignor, and is put in the same position with
reference to those rights as that in which the assignor stood at
the time of assignment.”) (citation and internal quotation marks
omitted); Moore v. Hechinger, 127 F.2d 746, 748 (D.C. Cir.
1942) (“[A]cceptance of compensation . . . operates an absolute
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transfer to the employer of the substantive rights of the injured
employee.”). Of course, state law will often determine whether
a person is in fact an assignee or subrogee. See, e.g., Aetna
Casualty & Surety, 338 U.S. at 368 (assignment occurred by
operation of New York law as a result of the employee’s
inaction). Regardless, jurisdiction under § 1605(a)(7) depends
on what is “legally considered” a personal injury claim “under
traditional common-law principles,” Molzof, 502 U.S. at 312
(emphasis in original), and a validly assigned or subrogated
personal injury claim certainly qualifies. Therefore, claims may
be brought by assignees/subrogees of the victims’ families and
their estates, such as LRA, against a subrogation defendant, such
as Libya, under the FSIA.
* * * * * * * * *
Before concluding we must address one final issue. On
January 28, 2008, while this appeal was pending, the President
signed the National Defense Authorization Act for Fiscal Year
2008 (“NDAA”), Pub. L. No. 110-181, 122 Stat. 3. Section
1083 of the NDAA strikes § 1605(a)(7) of the FSIA from the
U.S. Code and replaces it with a new “[t]errorism exception to
the jurisdictional immunity of a foreign state.” 122 Stat. at
338–44 (codified at 28 U.S.C. § 1605A). This statutory change
raised questions about the application of § 1605A to pending
cases such as this one and whether § 1605(a)(7) continues to
apply to them. We settled this issue in Simon v. Republic of
Iraq, __ F.3d __ (D.C. Cir. 2008), in which we held that we
“retained jurisdiction over cases pending pursuant to former
§ 1605(a)(7) when the Congress enacted the NDAA.” Id. at __.
CONCLUSION
We affirm the district court’s denial of Libya’s motion to
dismiss on the ground of sovereign immunity. We dismiss the
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appeal with regard to the other issues raised by Libya.