The opinion of the court was delivered by: Stanton, District Judge.
The Palestine Liberation Organization (the "PLO") moves
pursuant to Fed.R.Civ.P. 12(b)(1), (2), (5), (6) and 17(b) to
dismiss the complaints and third-party complaints against it on
the grounds of lack of subject matter or personal jurisdiction,
insufficiency of service of process, failure to state a claim
and lack of capacity to be sued. The motion was argued on March
8, 1989 but its consideration was deferred until April 1990 at
the request of the parties, while they discussed other matters
concerning these suits.
Plaintiffs were passengers, or are the personal
representatives of passengers, on the Italian passenger liner
Achille Lauro, which was forcibly seized in the Mediterranean
Sea in October 1985. During the course of the seizure, Leon
Klinghoffer*fn1 was shot and his body thrown into the
Plaintiffs assert that the seizure and murder were done by
members of the PLO. The PLO denies responsibility for those
acts, which it claims were done by its opponents in an effort
to discredit it; and it asserts that its Chairman Arafat
mediated a peaceful resolution of the piracy. (Transcript of
Oral Argument held March 28, 1989 at 29-30).
A. The Parties and Jurisdictional Allegations
Plaintiffs sued the owner and charterer of the Achille Lauro,
travel agencies and various other entities they claim failed to
take sufficient steps to prevent, or warn of the risk of, the
piracy. These complaints base jurisdiction on diversity of
citizenship, 28 U.S.C. § 1332 (1988), admiralty, id. § 1333, or
both. The Klinghoffer action alleges jurisdiction pursuant to
diversity of citizenship, and asserts claims under state law,
general maritime law and the Death on the High Seas Act
("DOHSA"), 46 U.S.C. App. §§ 761-767 (1982).
Defendants Chandris, Inc. and Crown Service Travel, Inc.
impleaded the PLO, seeking indemnification or contribution. for
any damages awarded against them on plaintiffs' claims and
compensatory and punitive damages against the PLO for tortious
interference with their businesses. The third-party complaints
allege diversity of citizenship, admiralty, federal question,
28 U.S.C. § 1331, and ancillary jurisdiction.
Later, other Achille Lauro passengers filed two actions
directly against the PLO alleging diversity of citizenship
B. The PLO and Its Activities in New York
The PLO describes itself as the internationally
recognized representative of a sovereign people
who are seeking to exercise their rights to
self-determination, national independence, and
territorial integrity. The PLO is the
internationally recognized embodiment of the
nationhood and sovereignty of the Palestinian
people while they await the restoration of their
rights through the establishment of a
comprehensive [sic], just and lasting peace in the
(Affidavit of Ramsey Clark sworn to April 27, 1987 ("Clark
Aff.") ¶ 6).
The United States does not give diplomatic recognition to the
The General Assembly of the United Nations invited the PLO to
participate in its sessions as an observer in 1974. G.A.Res.
3237, 29 U.N. GAOR Supp. 31 (Agenda Item 108) 4, U.N. Doc.
A/9631 (1974). The Secretary-General of the United Nations
accredited Zuhdi Labib Terzi as the PLO's Permanent Observer at
the United Nations in New York. (Clark Aff. ¶ 2).
The United Nations established its headquarters in New York
in the Agreement Between the United Nations and the United
States of America Regarding the Headquarters of the United
Nations (the "Headquarters Agreement"). See 22 U.S.C. § 287
note (1988) (setting forth the Headquarters Agreement). This
agreement provides that United States federal, state and local
authorities "shall not impose any impediments to transit to or
from the headquarters district" by designated persons
affiliated with the United Nations. Headquarters Agreement ¶
The PLO, which has its own headquarters in Tunis, Tunisia,
owns a building in Manhattan which it uses as its United
Nations Mission (the "Mission").*fn2 (Affidavit of Zuhdi Labib
Terzi sworn to May 5, 1986 ("Terzi Aff.") ¶ 2). Mr. Terzi and
his family reside there, and the PLO has eight other employees
at the Mission. (Id.; Crown Travel's Memorandum of Law in
Opposition to PLO's Motion to Dismiss at 13). The PLO owns an
automobile and maintains a bank account in New York, and has a
telephone listing in the NYNEX Telephone Company directory
("white pages"). (Id. at 14).
Other high-ranking officers of the PLO have used the Mission,
including Mr. Arafat and the PLO's information officer, Hatem
Husseini. (Certification of Jay D. Fischer ¶ 3b).
The PLO contends that the United States carefully
circumscribes the activities of Mr. Terzi and his staff to the
headquarters district. The Anti-Terrorism Act of 1987,
22 U.S.C. § 5201-03 (1988) (the "ATA"), makes it unlawful to
"receive anything of value except informational material from
the PLO" or to "expend PLO funds from the PLO" if the purpose
be to further the PLO's interests. Id. § 5202(1)-(2). The ATA
also forbids establishing or maintaining "an office,
headquarters, premises, or other facilities or establishments
within the jurisdiction of the United States at the behest or
direction of, or with funds provided by the Palestine
Liberation Organization or any of its constituent groups, any
successor to any of those, or any agents thereof." Id. §
5202(3). Since the ATA does not override the Headquarters
Agreement, it does not affect the Mission. United States v.
Palestine Liberation Org., 695 F. Supp. 1456, 1464-71 (S.D.N Y
The PLO asserts several grounds for its motion for dismissal:
(1) there is no subject matter jurisdiction because this case
presents a nonjusticiable political question; (2) there is no
personal jurisdiction over the PLO; (3) the PLO, assuming that
it is an unincorporated association, lacks the capacity to be
sued; and (4) service of process on Mr. Terzi in New York was
The PLO asserts that it cannot be sued as an unincorporated
association because it is the embodiment of the Palestinian
people and is structured and operates as a state.
"An unincorporated association is defined as a body of
persons acting together and using certain methods for
prosecuting a special purpose or common enterprise." Motta v.
Samuel Weiser, Inc., 768 F.2d 481, 485 (1st Cir.) (citing
Black's Law Dictionary 111 (5th ed. 1979)), cert. denied,
474 U.S. 1033, 106 S.Ct. 596, 88 L.Ed.2d 575 (1985). Another
formulation of this definition is "a group of persons formed
voluntarily without a charter for the purpose of promoting a
common enterprise or objective." Health Care Equalization Comm.
of Iowa Chiropractic Soc'y v. Iowa Medical Soc'y, 501 F. Supp. 970,
976 (S.D.Iowa 1980), aff'd, 851 F.2d 1020 (8th Cir. 1988).
The PLO's purpose is to restore what its members and
leadership believe to be the rights of the Palestinian people.
Although it claims the attributes of a state, it controls no
defined territory or populace and is not recognized by the
United States. International law generally regards a "state" as
"`(an entity that has a defined territory and a permanent
population, under the control of its own government, and that
engages in, or has the capacity to engage in, formal relations
with other such entities.'" National Petrochemical Co. of Iran
v. M/T Stolt Sheaf, 860 F.2d 551, 553 (2d Cir. 1988) (quoting
Restatement (Third) of the Foreign Relations Law of the United
States § 201 (1987)), cert. denied, ___ U.S. ___, 109 S.Ct.
1535, 103 L.Ed.2d 840 (1989). That definition does not fit the
PLO closely enough to justify treating it as a foreign
sovereign or state in this litigation.
Rather, as its name indicates, the PLO is an organization. It
is composed of individuals, without a legal identity apart from
its membership, formed for specific objectives. For present
purposes, it may be treated as an unincorporated association.
II. Subject-Matter Jurisdiction
A. The Bases for Subject-Matter Jurisdiction
The complaints and third-party complaints allege various
grounds for subject-matter jurisdiction.
These cases come within the admiralty jurisdiction of the
federal courts. See
28 U.S.C. § 1333.*fn3 Admiralty jurisdiction exists where a
tort occurs in navigable waters and the wrong has "a
significant relationship to traditional maritime activity."
Executive Jet Aviation Inc. v. City of Cleveland, Ohio,
409 U.S. 249, 268, 93 S.Ct. 493, 504, 34 L.Ed.2d 454 (1972). See
also Foremost Ins. Co. v. Richardson, 457 U.S. 668, 673-74, 102
S.Ct. 2654, 2657-58, 73 L.Ed.2d 300 (1982) (holding Executive
Jet analysis applies outside aviation torts); Keene Corp. v.
United States, 700 F.2d 836, 843 (2d Cir. 1983).
The seizure of a ship in navigable waters is a traditional
maritime wrong, and therefore these cases lie within admiralty
jurisdiction. See American Hawaiian Ventures, Inc. v. M.V.J.
Latuharhary, 257 F. Supp. 622, 627 (D.N.J. 1966) ("every seizure
by force on the high seas is prima facie piracy, and hence a
maritime tort"). See also Kelly v. Smith, 485 F.2d 520, 523-26
(5th Cir. 1973) (action for injury from rifle fire on small
boat in Mississippi River is ...