least 51% of its shares, as required by Brazilian law. As an individual corporate entity "a majority of whose shares or other ownership interest is owned by a foreign state," 28 U.S.C. § 1603(b)(2), and as plaintiff concedes in her Rule 3(g) statement, Lloyd is an agency or instrumentality of Brazil.
Defendant BNSMM, now known as the Brazilian National Department of Waterway Transportation,
is a regulatory agency of the federal government of Brazil with jurisdictional authority over navigational and merchant marine affairs on the high seas. As such, it is an agency or instrumentality of Brazil.
Thus, I conclude that there is no disputed question of material fact regarding the status of the defendants. As a matter of law, they are agencies or instrumentalities of Brazil and a "foreign state" within the meaning of the FSIA, and therefore 28 U.S.C. § 1330(a) provides the exclusive basis for this Court's exercise of subject matter jurisdiction over the action.
The sole allegation of subject matter jurisdiction in the complaint, however, refers to diversity jurisdiction pursuant to 28 U.S.C. § 1332. Although Fed. R. Civ. P. 8(a) requires that the Complaint contain "a short and plain statement of the grounds upon which the court's jurisdiction depends," and the Complaint is undeniably defective in that regard, the pleadings to date have established a prima facie showing of subject matter jurisdiction. Therefore, I will not dismiss this action for lack of subject matter jurisdiction, but instead grant leave to amend the complaint. I do so because absent sovereign immunity, such jurisdiction does lie with this Court, albeit pursuant to section 1330, and because the erroneous allegation of subject matter jurisdiction in this case may be regarded as a mere pleading error.
The FSIA creates the sole basis for jurisdiction over a suit against a foreign state, and at the same time bestows sovereign immunity upon the defendant foreign states unless the action falls within one of the enumerated exceptions to the presumption of immunity. 28 U.S.C. § 1604. The plaintiff contends that this case comes under the first clause
of the "commercial activity exception" to sovereign immunity, which permits a federal court to exercise jurisdiction in an action otherwise barred by the FSIA if "the action is based  upon a commercial activity carried on in the United States by the foreign state . . . ." 28 U.S.C. § 1605(a)(2).
Zveiter claims that she was sexually harassed while employed as a secretary by defendants in the United States, and therefore the commercial activity relevant to this action is defendants' employment of plaintiff. I must thus determine whether the employment of a secretary is a "commercial activity" under the FSIA.
Like all questions of statutory interpretation, "the starting point is 'the language of the statute itself."' United States v. James, 478 U.S. 597, 604, 106 S. Ct. 3116, 3120, 92 L. Ed. 2d 483 (1986) (citation omitted). Under the FSIA, "commercial activity" is "either a regular course of commercial conduct or a particular commercial transaction or act." 28 U.S.C. § 1603(d). This definition is "somewhat circular," since it defines "commercial activity" in terms of "commercial conduct" and "commercial transaction." Callejo v. Bancomer, S.A., 764 F.2d 1101, 1108 n.6 (5th Cir. 1985).
The Supreme Court recently considered the applicability of the "commercial activity" exception to foreign sovereign immunity. See Saudi Arabia v. Nelson, 123 L. Ed. 2d 47, 113 S. Ct. 1471, 1479 (1993). The Court began its analysis by explicating the "restrictive" theory of foreign sovereign immunity that Congress adopted when it enacted the FSIA:
Under the restrictive, as opposed to the "absolute," theory of foreign sovereign immunity, a state is immune from the jurisdiction of foreign courts as to its sovereign or public acts (jure imperii), but not as to those that are private or commercial in character (jure gestionis).
113 S. Ct. at 1479 (1993) (citations omitted). Thus, "a state engages in commercial activity under the restrictive theory where it exercises 'only those powers that can also be exercised by private citizens,' as distinct from those 'powers peculiar to sovereigns.'" Id. (citations omitted).
In Nelson, plaintiff worked in Saudi Arabia at a hospital owned and operated by the Saudi government. After he reported a number of safety defects that he had observed on the job, he was arrested by Saudi government officials, jailed, tortured, and beaten. He subsequently sued in a federal court, alleging various intentional torts. The Supreme Court held that since "exercise of the powers of police and penal officers is not the sort of action by which private parties can engage in commerce," the intentional conduct that plaintiff had alleged could not qualify as commercial under the restrictive theory. 113 S. Ct. at 1479.
By contrast, this action does not arise from activities that are "peculiarly sovereign in nature." See Id. The employment of a secretary is hardly within the unique sphere of sovereign authority. See Republic of Argentina v. Weltover, Inc., 119 L. Ed. 2d 394, 112 S. Ct. 2160, 2166 (1992)("When a foreign government acts, not as regulator of a market, but in the manner of a private player within it, the foreign sovereign's actions are 'commercial' within the meaning of the FSIA."'). Rather, in employing a secretary, the foreign sovereign enters the marketplace and acts just as a private party would in engaging in this "commercial activity." It is of no consequence that the purpose of employing the secretary was to further the sovereign mission of the foreign state, since "the commercial character of an activity shall be determined by reference to the nature of the course of conduct or particular transaction or act, rather than by reference to its purpose." 28 U.S.C. § 1603(d).
My conclusion that the employment of Zveiter was "commercial" is borne out by the legislative history of the FSIA, to which courts have frequently turned for interpretational guidance. See, e.g., Nelson, 113 S. Ct. at 1481, 1484 (White, J., concurring) (discussion of commercial activity); Barkanic v. General Administration of Civil Aviation of the People's Republic of China, 923 F.2d 957 (2d Cir. 1991) (discussion of legislative history of FSIA in choosing appropriate choice of law rule); Letelier v. Republic of Chile, 748 F.2d 790, 796-97 (2d Cir. 1984) (discussion of commercial activity), cert. denied, 471 U.S. 1125, 86 L. Ed. 2d 273, 105 S. Ct. 2656 (1985).
According to the Report of the House Judiciary Committee, "the employment of American citizens or third country nationals [as civil service personnel] by the foreign state in the United States," in contrast to the employment of citizens of the foreign sovereign, "would be commercial." H.R. Rep. No. 94-1487, 94th Cong., 2nd Sess. 16 (1976), U.S. Code Cong. & Admin. News 1976, p. 6614. Although it "seemed unwise to attempt an excessively precise definition" of commercial activity, it was intended that "activities such as a foreign government's . . . employment or engagement of laborers, clerical staff or public relations or marketing agents . . . would be among those included within the definition." Id. Zveiter is an American citizen, and her employment by the defendants on their clerical staff is therefore a "commercial activity carried on in the United States by the foreign state." 28 U.S.C. § 1605(a)(2).
Defendants cite a number of cases that concern international organizations for the proposition that the employer-employee relationship is beyond the purview of the commercial activity exception of the FSIA. Even though the International Organizations Immunities Act of 1945, 22 U.S.C. § 288a(b), confers on international organizations "the same immunity from suit . . . as is enjoyed by foreign governments," a narrower interpretation has been given to "commercial activity" as it concerns the employment of civil servants by international organizations than the employment of civil servants by foreign states. See, e.g., Broadbent v. Organization of American States, 202 U.S. App. D.C. 27, 628 F.2d 27 (D.C. Cir. 1980).
In Broadbent, the Court of Appeals for the D.C. Circuit considered the legislative history of the FSIA, and noted that the House Report "clearly marks employment of civil servants as noncommercial for purposes of restrictive immunity," but that it "establishes an exception from the general rule in the case of employment of American citizens or third country nationals by foreign states." 628 F.2d at 34, quoting H.R. Rep. No. 94-1487, 94th Cong., 2d Sess. 16 (1976), U.S. Code Cong. & Admin. News 1976, p. 6614.
[a] comparable exception is not applicable to international organizations, because their civil servants are inevitably drawn from either American citizens or "third" country nations . . . [and] such an exception [for international organizations] would swallow up the rule of immunity for civil service employment disputes.
Id. Thus, the case at bar is distinguishable from the international organization cases because it involves the employment of an American citizen by a foreign state rather than by an international organization.
Because the hiring of civil servants by international organizations implicates different policies than the same act when performed by foreign states,
as the D.C. Circuit recognized in Broadbent, and as Congress recognized in enacting the FSIA, defendants' reliance on cases involving international organizations is misplaced. See Tuck v. Pan American Health Organization, 215 U.S. App. D.C. 201, 668 F.2d 547 (D.C. Cir. 1981) (international health organization); Boimah v. United Nations General Assembly, 664 F. Supp. 69 (E.D.N.Y. 1987); Chiriboga v. International Bank for Reconstruction, 616 F. Supp. 963 (D.C.D.C. 1985).
Thus, on the basis of the language of the FSIA, its legislative history, the recent decision of the Supreme Court in Nelson, and the distinguishability of the international organization cases, I conclude that the defendants' employment of Zveiter as a secretary in the United States is indeed a commercial activity.
I must next consider whether or not this action is "based upon" that commercial activity. The allegations that plaintiff raises concern the terms and conditions of her employment, and raise questions concerning her discharge. The allegations of sexual harassment are therefore necessarily "based upon" the defendants' employment of Zveiter. Thus, defendants are not immune from suit by virtue of the first clause of the commercial activity exception.
Sexual Discrimination Claims
Defendants also contend that the action should be dismissed because plaintiff has not made out a cause of action for either "hostile environment" or "quid pro quo" sexual harassment under the New York Human Rights Law, N.Y. Executive Law § 290 et seq.4 I disagree.
Under the New York Human Rights Law, it is an unlawful discriminatory practice "for an employer . . . because of the . . . sex . . . of any individual . . . to discriminate against such individual in compensation or in terms, conditions or privileges of employment." N.Y. Executive Law § 296(1)(a). This law is virtually identical to its federal counterpart, 42 U.S.C. § 2000e-2 et seq., and consequently the federal standards for actionable sexual harassment are used in determining claims brought under the New York Human Rights Law. See, e.g., Fair v. Guiding Eyes for the Blind, 742 F. Supp. 151, 157 (S.D.N.Y. 1990); Nicolo v. Citibank New York State, N.A., 147 Misc. 2d 111, 554 N.Y.S.2d 795 (N.Y. Sup. 1990).
Under the parallel federal and state schemes, there are two related types of sexual harassment claims. The first type of claim concerns sexually offensive conduct that creates a pervasive "hostile environment" for employees. The second type, known as "quid pro quo" harassment, occurs when an employer alters an employee's job conditions or withholds an economic benefit because the employee refuses to accede to sexual demands. See Meritor Savings Bank, FSB v. Vinson, 477 U.S. 57, 64-65, 106 S. Ct. 2399, 2404-05, 91 L. Ed. 2d 49 (1986).
Hostile environment sexual harassment arises when an employee's "right to work in an environment free from discriminatory intimidation, ridicule, and insult" is violated. Id., 477 U.S. at 65, 106 S. Ct. at 2405. To make out a case of hostile environment sexual harassment, an employee must prove that the conduct complained of "was unwelcome, that the conduct was prompted simply because of the employee's gender, and that the conduct was sufficiently pervasive to create an offensive environment antithetical to the priority of merit -- not sex or some other prohibited criterion -- in the workplace." Carrero v. New York City Housing Authority, 890 F.2d 569, 578 (2d Cir. 1989). The only issue raised by defendants' motion is the pervasiveness of the conduct.
Actionable offensive conduct has "the purpose or effect of unreasonably interfering with an individual's work performance or creating an intimidating, hostile, or offensive working environment." Id., 890 F.2d at 577, citing Vinson. The employee must prove that the harassment is "sufficiently severe or pervasive to alter the conditions of employment and create an abusive working environment." Id., citing Vinson. The incidents must be "more than episodic; they must be sufficiently continuous and concerted to be deemed pervasive," a determination which must be made from the "totality of the circumstances." 890 F.2d at 577-78.
Taking the facts adduced by plaintiff to be true, as is appropriate on a motion for summary judgment, defendants summarize plaintiff's allegations as follows:
(1) One instance of touching plaintiff's buttocks, immediately withdrawn upon protestation and never repeated;