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CASTILLO v. SHIPPING CORP.

April 11, 1985

LUIS CASTILLO, Plaintiff, against THE SHIPPING CORP. OF INDIA, Defendant.


The opinion of the court was delivered by: GOETTEL

GERARD L. GOETTEL, U.S.D.J.

The defendant, the Shipping Corp. of India ("SCI"), is a corporation wholly owned by the government of India and formed under the laws of that country. It is engaged in shipping activities in the United States and throughout the world. SCI owns and operates a fleet of vessels, including the State of Andhra Pradesh. That ship has not called at the Port of New York since 1980 and is presently assigned to an Asian route.

On October 14, 1981, Luis Castillo, a citizen and resident of the Dominican Republic, was injured in the Dominican Republic while working aboard the Andhra Pradesh. Castillo alleges that SCI committed numerous negligent acts that were the direct and proximate causes of his injuries. Castillo now brings this action seeking $300,000 in damages. SCI's New York agents and the Indian Embassy in Washington, D.C., have been served with a summons and complaint.

 SCI moves to dismiss the action for lack of personal jurisdiction and forum non conveniens. SCI asserts that it is a "foreign state" under the Foreign Sovereign Immunities Act of 1976 (the "FSIA" or the "Act"), 28 U.S.C. §§ 1330, 1602-1611 (1982), entitled to immunity from the jurisdiction of the United States' federal and state courts. Both parties buttressed their arguments on this motion with affidavits Consequently, we treat this as a motion for summary judgment pursuant to Fed. R. Civ. P. 56. We may grant the motion only if the memoranda and supporting materials before us "disclose 'that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.'" C. Wright, A. Miller & M. Kane, Federal Practice and Procedure § 2725 (2d ed. 1983) (quoting Fed. R. Civ. P. 56(c)). For the reasons stated below, the Court is convinced that the defendant qualifies for the immunity provided by the FSIA. Therefore, its motion for summary judgment is granted.

 I. Discussion

 A. The Foreign Sovereign Immunities Act

 The FSIA regulates the Court's jurisdiction in this case. This relatively new statute raises difficult interpretive questions, but provides little guidance in the resolution of those questions. See Gibbons v. udaras na Gaeltachta, 549 F. Supp. 1094, 1106 (S.D.N.Y. 1982). A tangled web of provisions in the FSIA governs the central issues of subject matter jurisdiction, *fn1" personal jurisdiction, and sovereign immunity. These, in turn, determine a foreign state's amenability to suit. Section 1330(a) of the Act confers subject matter jurisdiction upon the district courts in certain actions against foreign states "not entitled to immunity." Personal jurisdiction exists when the district court has subject matter jurisdiction and process has been served in conformity with section 1608. *fn2" 28 U.S.C. § 1330(b) (1982). Thus, the absence of sovereign immunity is essential for the existence of subject matter jurisdiction, which, in turn, is necessary for the attainment of personal jurisdiction. *fn3"

 Section 1604 governs claims of sovereign immunity by foreign nations. It provides as follows:

 
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 of this chapter.

 28 U.S.C. § 1604 (1982). Although this section gives foreign countries a general grant of immunity, it limits the applicability of that immunity. First, the grant may be subject to international agreements. Second, the party seeking refuge under the Act must be a foreign state within the meaning of the FSIA. Finally, the immunity is subject to exceptions contained in other sections of the Act.

 That the first two conditions are not germane is indisputed. Neither party alleges or attempts to prove the existence of any international agreement affecting section 1604's grant of immunity. Similarly, both the plaintiff and the defendant agree that SCI is a foreign state as section 1603(b) of the Act defines that term. *fn4" The sole dispute between the parties and the central issue in the case is whether any of the exceptions to immunity embodied in sections 1605 to 1607 remove the cloak of immunity from the defendant and render it subject to the jurisdiction of this Court. Specifically, the plaintiff asserts that the exception to immunity in the first clause of section 1605(a)(2) and the exception contained in section 1605(b) apply to the defendant and subject it to our jurisdiction.

 1. Section 1605(a)(2). The first clause of section 1605(a)(2) provides that a foreign nation is not immune in actions "based upon a commercial activity carried on in the United States by [that] foreign state." 28 U.S.C. § 1605(a)(2) (1982). *fn5" Plaintiff Castillo claims that this negligence action, which arose in the Dominican Republic on one of the defendant's vessels, is "based upon" SCI's United States shipping operations within the meaning of section 1605(a)(2). The defendant disputes this contention. Resolution of their dispute requires us to examine the FSIA's language and purposes as well as the cases interpreting the Act.

 A commercial activity carried on in the United States is one having substantial contact with this country. 28 U.S.C. § 1603(e) (1982). Castillo alleges that SCI engages in shipping operations in the United States, that its ships call regularly at U.S. ports, and that it earns a large portion of its revenues here. In a supporting affidavit, the plaintiff claims that a spot check of Lloyd's listing revealed that two of SCI's vessels recently called at the Port of New York. Taking these allegations as true for purposes of this motion, we conclude that SCI carries on shipping activities having substantial contact with the United States. See In re Rio Grande Transport, Inc., 516 F. Supp. 1155, 1161 & n.5 (S.D.N.Y. 1981) (citing similar activities as support for asserting jurisdiction under the Act). Moreover, the shipping activities involved in this case are commercial, not governmental, in nature. See China National Chemical Import & Export Corp. v. M/V Lago Hualaihue, 504 F. Supp. 684, 689 (D. Md. 1981) (the operation of commercial cargo vessels is a commercial activity). The issue, then, is whether this action is "based upon" SCI's United States shipping activities within the meaning of section 1605(a)(2).

 Courts, attempting to define the words "based upon," have employed a number of formulations to describe the specific connection required between the lawsuit and the United States activity relied upon for jurisdiction. In Ministry of Supply, Cairo v. Universe Tankships, Inc., 708 F.2d 80, 84 (2d Cir. 1983), the Second Circuit stated that the acts sued upon must "comprise an integral part of the state's" U.S. activities. The same court, in Gemini Shipping, Inc. v. Foreign Trade Organization for Chemicals and Foodstuffs, 647 F.2d 317, 319 (2d Cir. 1981), held that an action on a guarantee was "based upon" the United States activity because it was "part and parcel" of the United States activity. Finally, in Sugarman v. Aeromexico, Inc., 626 F.2d 270, 272 (3d Cir. 1980), ...


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