The opinion of the court was delivered by: LEONARD B. SAND
This action calls into question the rights of a private landlord who has leased premises to a foreign mission to the United Nations which has concededly defaulted on its rental obligations for over a year and a half. The premises at issue are the entire twenty-fifth floor of a commercial office building. The action presents the important question, apparently of first impression, whether such a landlord may regain possession of the premises from its tenant or whether such action is forever barred by the Foreign Sovereign Immunities Act, 28 U.S.C. §§ 1602-1611 (1991) (the "FSIA"), or any treaty obligations.
By order of judgment dated January 15, 1992, we awarded plaintiffs damages and possession of their premises and directed the United States Marshal to remove the Permanent Mission in the event that it failed to vacate on or before January 31, 1992. By order dated January 31, 1992, upon defendant's request, we granted a stay of the order of eviction and ordered the parties to appear before us on February 3, 1992. After a lengthy hearing on that date, we directed the parties and the United States Government, which had since intervened on defendant's behalf, to brief more fully the issue of defendant's claim of diplomatic immunity from eviction. The parties have since done so, and we now consider the merits of defendant's and the Government's (hereinafter "Movants") application for a continued stay pending appeal.
On May 19, 1982, plaintiff Sage Realty entered into a ten year written lease with the Mission for the entire twenty-fifth floor of the building (the "Premises"). The Mission took possession of the Premises on or about May 22, 1982 and remains in possession to this date.
In October 1987, after the Mission had failed to pay its rent for more than seven months, Plaintiffs commenced an action against the Mission before this Court. By judgment dated August 22, 1989, we terminated the Mission's lease, awarded possession of the Premises to Plaintiffs, and awarded Plaintiffs damages in the amount of $ 244,157.49.
After entry of the above judgment, the Mission paid Plaintiffs the full amount of damages. With Plaintiffs' consent, the Mission remained in possession as a month-to-month tenant, without a written lease, paying use and occupancy charges in the fixed amount of $ 19,350 per month.
During the summer of 1990, the Mission again began to default on its rental obligations. By letter dated April 26, 1991, prompted by the Mission's failure to respond to repeated demands to cure its arrears, plaintiff Sage Realty notified the Mission that Plaintiffs had elected to terminate the month-to-month tenancy as of May 31, 1991. On July 22, 1991, Plaintiffs commenced this action against the Mission, seeking unpaid use and occupancy charges from August 1990, attorneys' fees, and possession of the Premises.
Plaintiffs thereafter moved for summary judgment and the Mission cross-moved to dismiss. The Mission did not contest its default on the rental payments, but rather claimed that it had been improperly served under the FSIA and that Plaintiffs were precluded from seeking the remedy of eviction by the doctrine of sovereign immunity. The Court heard oral argument on both motions on November 7, 1991.
Following argument on that date, we issued an oral opinion granting Plaintiffs' motion for summary judgment and denying the Mission's cross-motion to dismiss. See Transcript of Oral Argument, November 7, 1991. In reaching our decision, we first found that "actual notice" of the suit had been given, thereby achieving the purposes of the FSIA with respect to service. Id. at 9-10. We also rejected the Mission's claim that it was immune from eviction, finding that the FSIA's prohibition against "execution and attachment" of property owned by a foreign sovereign did not preclude the eviction of a tenant wrongfully in possession of privately owned premises. Id. at 10-11.
On November 14, 1991, this Court signed an order and judgment awarding Plaintiffs damages and directing the Mission to vacate the Premises. Because that order did not specify a date by which the Mission was required to depart, however, Plaintiffs submitted a second order and judgment. On January 15, 1992, we signed the second order and judgment (hereinafter the "Judgment"), which: awarded Plaintiffs back-damages of $ 387,154.72 and $ 833.19 per day for continued use and occupancy; directed the Mission to vacate the Premises; and directed the United States Marshal to remove the Mission in the event that it failed to vacate on or before January 31, 1992.
On January 28, 1992, the Mission filed a Notice of Appeal to the Second Circuit. On January 30, 1992, the Mission sought a stay of the Judgment pending appeal and informed the Court that the United States Government planned to intervene on its behalf. By order dated January 31, 1992, we granted a stay of that part of the Judgment directing the Marshal to evict the Mission and ordered the parties to appear for a conference on February 3, 1992.
On February 3, 1992, following submission of the Government's Statement of Interest,
Plaintiffs, the Mission and the Government appeared before the Court. After extended argument during which the Government represented that eviction of the Mission would contravene United States treaty obligations and that diplomatic alternatives were being actively pursued,
we extended the stay and ordered further briefing on the issue of immunity from eviction. See Transcript of Oral Argument, February 3, 1992 (hereinafter "Trans."). The Government and Plaintiffs have since submitted further briefs and affidavits, and we now turn to the merits of the motion for a stay.
In deciding whether to grant a stay pending appeal, this Court must consider four factors: (1) whether Movants have made a strong showing of the likelihood of success on the merits; (2) whether Movants will be irreparably injured absent the stay; (3) whether granting the stay would substantially harm the other parties in the proceeding; and (4) where the public interest lies. Hilton v. Braunskill, 481 U.S. 770, 776, 95 L. Ed. 2d 724, 107 S. Ct. 2113 (1987); United States v. Eastern Airlines, Inc., 923 F.2d 241, 244 (2d Cir. 1991).
A. Likelihood of Success on the Merits.
Of the four factors relevant to our decision to grant or deny a stay, the question of likelihood of success on the merits is the most hotly contested by the parties. Movants do not dispute the Mission's default on its rental obligations, but insist that the FSIA and other treaties relating to sovereign immunity preclude the remedy of eviction. Plaintiffs respond that those pronouncements do not apply to the situation at hand, and emphasize that if Movants' contentions were accepted, a private landlord ...