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ASHLEY v. AMERICAN AIRLINES

June 13, 1990

FERN ASHLEY, ET AL., PLAINTIFFS,
v.
AMERICAN AIRLINES, INC.,AND GOVERNMENT OF THE VIRGIN ISLANDS, DEFENDANTS. PETER CHIOPELAS, ET AL., PLAINTIFFS, V. AMERICAN AIRLINES, INC., AND GOVERNMENT OF THE VIRGIN ISLANDS, DEFENDANTS. JULES S. DAVIS, ET AL., PLAINTIFFS, V. AMERICAN AIRLINES, INC., AND GOVERNMENT OF THE VIRGIN ISLANDS, DEFENDANTS. CIRO A. GAMBONI, ET AL., PLAINTIFFS, V. AMERICAN AIRLINES, INC., AND GOVERNMENT OF THE VIRGIN ISLANDS, DEFENDANTS.



The opinion of the court was delivered by: Leisure, District Judge:

OPINION AND ORDER

This matter is before the Court on defendant Government of the Virgin Islands' ("GVI") motion to dismiss plaintiffs' complaints for lack of subject matter jurisdiction pursuant to Fed.R.Civ.P. 12(b)(1)*fn1 and for failure to join indispensable parties to the action pursuant to Fed.R.Civ.P. 12(b)(7).*fn2

BACKGROUND

This action arises out of events occurring on December 31, 1984. On that date, three armed Virgin Islands Corrections officers escorted a convicted mass murderer, Ishmael Ali LaBeet, aboard American Airlines Flight 626 in St. Croix, Virgin Islands. While the flight was en route to New York, LaBeet disarmed the guards and redirected the plane to Havana, Cuba. Cuban authorities then gained control of the situation and brought the episode to a safe conclusion.

Plaintiffs Fern Ashley and Neil Goldman were passengers on Flight 626 and subsequently commenced this negligence action against defendant American Airlines in the Supreme Court of New York. The action was removed to this Court by American Airlines and the remaining plaintiffs were added to the action through amended complaints and the filing of additional actions, as indicated in the above entitled captions. Defendant American Airlines served GVI with a Notice of Vouching-In and tender of defense which GVI rejected. Thereafter, American Airlines made a motion for leave to file a third party complaint against GVI, which this Court granted.

GVI then filed a motion to dismiss the third party complaint pursuant to Fed.R.Civ.P. 12(b) claiming lack of personal and subject matter jurisdiction, insufficient service of process, failure to comply with Fed.R.Civ.P. 8(a)(1), improper venue and insufficiency of the complaint. In an Opinion and Order dated October 21, 1988, the Court denied GVI's motion. Thereafter, plaintiffs moved for leave to amend their respective complaints and assert direct claims against GVI. The Court granted the motions and plaintiffs served and filed amended complaints naming American Airlines and GVI as defendants.

GVI now moves to dismiss plaintiffs' complaints against it arguing that the Court lacks subject matter jurisdiction pursuant to Fed.R.Civ.P. 12(b)(1). GVI claims that Virgin Islands law applies to plaintiffs' action against it, and that plaintiffs have failed to comply with the notice and statute of limitations requirements of the Virgin Islands Tort Claims Act. V.I.Code Ann. tit. 33, § 3405 et seq. (1967). GVI claims sovereign immunity from suit by plaintiffs under that Act, thus depriving this Court of subject matter jurisdiction. Alternatively, GVI asserts that plaintiffs failed to join indispensable parties to the action, including, but not limited to, the convict LaBeet, pursuant to Fed.R.Civ.P. 12(b)(7).

DISCUSSION

A) Subject Matter Jurisdiction

Defendant GVI enjoys limited sovereign immunity under the Virgin Islands Tort Claims Act ("VITCA"). VITCA permits certain suits to be brought against GVI by waiving the government's immunity if the claimant complies with the specific procedural requirements of that Act. GVI asserts that Virgin Islands law applies to plaintiffs claims against it, and that plaintiffs have failed to comply with the notice and statute of limitations provisions of VITCA. As a result, GVI claims that its sovereign immunity remains intact, depriving this Court of subject matter jurisdiction over plaintiffs' action against GVI.

Initially, the Court must determine whether it should give effect to Virgin Islands law regarding defendant's limited immunity from plaintiffs' claims against it.*fn3 This inquiry requires a two prong choice of law analysis under the "public policy test" set forth in Nevada v. Hall, 440 U.S. 410, 99 S.Ct. 1182, 59 L.Ed.2d 416, reh'g denied, 441 U.S. 917, 99 S.Ct. 2018, 60 L.Ed.2d 389 (1979), and the "fairness test" set forth in Allstate v. Hague, 449 U.S. 302, 101 S.Ct. 633, 66 L.Ed.2d 521, reh'g denied, 450 U.S. 971, 101 S.Ct. 1494, 67 L.Ed.2d 623 (1981).

1) Hall — The Public Policy Test

In Nevada v. Hall, 440 U.S. 410, 99 S.Ct. 1182, 59 L.Ed.2d 416 (1979), the Supreme Court held that a state may refuse to honor a sister state's sovereign immunity under certain circumstances.*fn4 That case involved a tort action by California residents arising out of an automobile collision in California where one of the vehicles was owned by the State of Nevada and was being used for official business. The California courts chose not to give effect to Nevada's limited tort liability statute because doing so would have frustrated California's public policy of fully compensating victims of accidents on the state's highways. In affirming a decision of the California Court of Appeal, the Supreme Court established the "public policy test" for choice of law and held that while a state may give effect to a sister state's reservation of sovereign immunity as a matter of comity, it is not constitutionally required to do so. "[T]he Full Faith and Credit Clause does not require a State to apply another State's law in violation of its own legitimate public policy." Hall, 440 U.S. at 422, 99 S.Ct. at 1189.

The Court must therefore determine whether a New York court would deem VITCA to be in violation of New York's own public policy. It is useful here to compare VITCA with the New York Court of Claims Act, N.Y. Ct. Cl. Act ยง 8-12 (McKinney 1963) ("NYCCA"), which, similar to VITCA, waives New York State's immunity from suit provided that the claimant complies with the Act's procedural requirements. At first glance then, the Virgin Islands ...


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