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BRYKS v. CANADIAN BROADCASTING CORP.

December 1, 1995

EPHRAIM BRYKS, Plaintiff, against CANADIAN BROADCASTING CORPORATION, NOAH ERENBERG, DANIELLE KEEFLER, HEIDI GRAHAM, and CABLE NEW NETWORK, INC., Defendants.


The opinion of the court was delivered by: MUKASEY

 MICHAEL B. MUKASEY, U.S.D.J.

 Plaintiff Ephraim Bryks has sued two television networks and three people for defamation. Defendants move to dismiss on the grounds of lack of subject matter jurisdiction and forum non conveniens. For the reasons set forth below, the motion is granted in part and denied in part, and the complaint against defendants Canadian Broadcasting Corporation and its three employees is dismissed for lack of subject matter jurisdiction.

 I.

 Plaintiff is an Orthodox Jewish rabbi. (Compl. P 3) Between 1978 and 1990, plaintiff was principal and teacher at the Herzlia-Adas-Yeshurun Torah Academy (the "Academy") in Winnipeg, Manitoba, Canada. (Id. P 9) On February 28, 1994, defendant Canadian Broadcasting Corporation ("CBC") twice broadcast a 30-minute report (the "Report") on Plaintiff's tenure at the Academy. (Id.) The Report, entitled "Unorthodox Conduct," examined allegations of sexual misconduct by plaintiff and featured interviews with relatives of some of plaintiff's former students. (Id. PP 12-18) Defendant Cable News Network, Inc. ("CNN") obtained a copy of the Report pursuant to a news sharing agreement with the CBC and broadcast a two-minute excerpt on CNN's Headline News Network on March 2, 1994. (Kohler Decl. PP 2-4) The CBC broadcast a follow-up story on the allegations twice on March 1, 1994, and rebroadcast the original Report on August 25, 1994. (Henry Decl. PP 10-12)

 The three individual defendants are Canadian citizens and were CBC employees at the time the Report aired. (Compl. PP 5-7) Defendants Danielle Keefler and Heidi Graham narrated the Report; Noah Erenberg produced it. (Id. P 9)

 II.

 A. Claims Against the Canadian Broadcasting Corporation

 The FSIA "provides the exclusive source of federal jurisdiction in actions against foreign sovereigns or their instrumentalities." Bailey v. Grand Trunk Lines New England, 805 F.2d 1097, 1100 (2d Cir. 1986), cert. denied, 484 U.S. 826, 98 L. Ed. 2d 54, 108 S. Ct. 94 (1987); 28 U.S.C. §§ 1330(a), 1604 (1988). Subject matter jurisdiction in an action against a foreign sovereign may not be premised on diversity of citizenship. See Argentine Republic v. Amerada Hess Shipping Corp., 488 U.S. 428, 437 n.5, 102 L. Ed. 2d 818, 109 S. Ct. 683 (1989).

 Section 1604 of the FSIA sets forth the general rule that "a foreign state shall be immune from the jurisdiction of the courts of the United States * * *." As a threshold matter, it is necessary to determine whether the CBC is a "foreign state" within the meaning of this provision.

 Under Section 1603(a) of the FSIA, the term "foreign state" includes "an agency or instrumentality of a foreign state." The phrase "agency or instrumentality of a foreign state" means any entity

 
(1) which is a separate legal person, corporate or otherwise, and
 
(2) which is an organ of a foreign state or political subdivision thereof, or a majority of whose shares or other ownership interest is owned by a foreign state or political subdivision thereof, and
 
(3) which is neither a citizen of a State of the United States as defined in section 1332(c) and (d) of this title, nor created under the laws of any third country.

 28 U.S.C. § 1603(b).

 The CBC satisfies all three criteria. First, the CBC maintains an independent existence under Canadian law as a "crown corporation." See Broadcasting Act of Canada, S.C. 1991, c.11; Thomas Decl. Ex. B at 1. Second, as plaintiff concedes, the CBC is wholly owned by the Canadian government. See Thomas Decl. Ex. B. at 1; Pl. Mem. at 7. See also Vermeulen v. Renault, U.S.A., Inc., 985 F.2d 1534, 1542-1543 (11th Cir.), cert. denied, 124 L. Ed. 2d 246, 113 S. Ct. 2334 (1993) (commercial car manufacturer wholly owned by French government is a "foreign state" under the FSIA). Third, the CBC is not a citizen of any state of the United States under the diversity statute (because it is a Canadian corporation operating principally in Canada), and the CBC is not incorporated under the laws of any other country.

 Plaintiff does not challenge this analysis. Instead, plaintiff urges the court to "rethink[] * * * the premises of sovereign immunity" and reject the "mechanistic" analysis invited by Section 1603(b). (Pl. Mem. at 7-9) In support of this argument, plaintiff cites a law review article advocating an "overhaul" of the FSIA. See Joan E. Donoghue, Taking the "Sovereign" Out of the Foreign Sovereign Immunities Act: A Functional Approach to the Commercial Activity Exception, 17 Yale J. Int'l L. 489, 522 (1992). Plaintiff also offers the "Expert Report" of a Canadian political scientist who argues that because the CBC enjoys freedom from ...


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