owned by agencies and instrumentalities, I believe Congress would have been just as explicit and unambiguous in stating its intention that such entities fall under the FSIA if it so intended.
Given these factors -- a) the prevailing international rule and the earlier United States cases presuming that corporations were not protected by sovereign immunity; b) Congress's explicit reversal of this presumption in the case of corporations owned by foreign states or political subdivisions; c) the fact that a broad interpretation would further extend foreign state status to corporations extremely remote from sovereign control; and d) the important consequences that flow from such a classification -- it does not seem to me reasonable to use extremely ambiguous language to find that Congress intended to include corporations majority-owned by agencies or instrumentalities of foreign states in its definition of foreign states. If Congress so intended, I believe it would have been as explicit as it was in extending immunity to corporations majority-owned by foreign states or their political subdivisions. Thus, I find that a corporation a majority of whose shares are owned by an agency or instrumentality of a foreign state is not itself an agency or instrumentality, and therefore is not a foreign state under the FSIA.
Finally, defendant cites cases in three courts that have previously found Skopbank to be a foreign state. However, these cases do not compel a similar conclusion here. First, two of these courts determined that Skopbank was a foreign state at a time when it was owned by the Bank of Finland. See Balentine v. Union Mortgage Co., 795 F. Supp. 266 (N.D. Ill. 1992); Murray v. Union Mortgage Co., No. 91-0799-RV-M, slip op. (S.D. Ala. Jan. 14, 1992) (submitted as Biester Aff., Ex. G) Although I need not pass on the issue of whether the Bank of Finland is an "agency or instrumentality" or a "political subdivision" of a foreign state, I find the analysis in those cases inapplicable here. Second, in Balentine, Skopbank's status was not contested but was merely assumed without analysis. See Balentine, 795 F. Supp. at 269 n.3. Finally, in the third case, Government Guarantee Fund v. Great Cruz Bay Development Co., Civ. No. 1991-355, slip op. at 6 (D.V.I. Dec. 7, 1994) (submitted as Notice of Removal, Ex. B), the court accepted the GGF's characterization of itself as a "governmental institution" and concluded, based on O'Connell, that ownership by a governmental institution was sufficient to confer foreign state status on Skopbank. However, the court did not analyze the distinction between "political subdivision" and "agency or instrumentality," or delve into the GGF's legal characteristics. That case was also decided in a different legal landscape because the Ninth Circuit had not yet decided Gates. Further, to the extent it is inconsistent with the analysis above, I respectfully decline to follow it.
Here, the GGF is an agency or instrumentality of Finland. The GGF owns a majority of Skopbank's shares. A corporation a majority of whose shares are owned by an agency or instrumentality is not a foreign state under the FSIA. Thus, Skopbank is not a foreign state under the FSIA, and this case is not removable under 28 U.S.C. § 1441(d).
Defendant asserts that this case is removable also under 28 U.S.C. § 1441(b), which establishes federal question jurisdiction. According to defendant, this case raises questions of federal law "since the Finnish Government has substantial interests in regulating its banking system, including the collection of loans. The Finnish Government's interests outweigh other interests." (Notice of Removal P 10) This claim evaporates on close scrutiny.
Issues of federal common law present federal questions, see Illinois v. City of Milwaukee, Wisconsin, 406 U.S. 91, 31 L. Ed. 2d 712, 92 S. Ct. 1385 (1972), and "the body of law which pertains to . . . issues of international dimension may be classified as federal common law." Chapalain Compagnie v. Standard Oil Co. (Indiana), 467 F. Supp. 181, 185 (N.D. Ill. 1978). However, for a case to be removable as engaging issues of international relations, the defendant must satisfy the well-pleaded complaint rule. Under the well-pleaded complaint rule, "lower federal courts 'have jurisdiction to hear . . . only those cases in which a well-pleaded complaint establishes either that federal law creates the cause of action or that the plaintiff's right to relief necessarily depends on resolution of a substantial question of federal law.'" Republic of Philippines v. Marcos, 806 F.2d 344, 352 (quoting Franchise Tax Board v. Construction Laborers Vacation Trust, 463 U.S. 1, 27-28, 77 L. Ed. 2d 420, 103 S. Ct. 2841 (1983)), cert. denied, 481 U.S. 1048, 95 L. Ed. 2d 835, 107 S. Ct. 2178 (1987). Thus, defendant must establish from the claims necessarily stated in the complaint that resolution of such claims requires either determinations that directly and significantly affect foreign relations or determinations of the law of international relations. See Marcos, 806 F.2d at 352; Delgado v. Shell Oil Co., 890 F. Supp. 1324, 1348-49 (S.D. Tex. 1995). Here, the well-pleaded complaint rule is not satisfied.
First, defendant has failed to demonstrate that Skopbank's conduct in relation to the St. John resort implicates issues of American foreign relations. Defendant vaguely claims that this case could affect Finland's right to regulate its banks. However, this is an action against Stanton, in his capacity as an officer of Skopbank, for actions taken in the United States, in relation to a property on which the bank held a mortgage. Although the GGF owns a controlling interest in Skopbank, that does not mean that any case challenging any action taken by a bank under the GGF's control raises issues of international relations. Further, now that I have found that Skopbank is not a foreign state under the FSIA, it is an even greater leap to assert that its actions raise issues of international relations. Finally, this case does not interfere with Finland's regulation of its banks; rather, any effect on Finland's regulatory conduct is incidental.
Second, defendant has failed to allege that the resolution of any of plaintiff's claims -- tortious interference with contractual relations or prospective economic advantage, prima facie tort or civil conspiracy -- requires the determination of some issue of international law of foreign relations, such as the act of state doctrine or the interpretation of foreign laws or regulations. As the Delgado court stated, "although important issues of international significance might be implicated by the decisions made by a state court in this case, because no removable federal question implicating the international law of foreign relations necessarily appears in any claim within plaintiffs' well-pleaded petitions," removal is improper. Delgado, 890 F. Supp. at 1349.
Plaintiff relies upon Grynberg Production Corp. v. British Gas, P.L.C., 817 F. Supp. 1338 (E.D. Tex. 1993), where removal was granted because plaintiff sought an order from a Texas court granting specific performance of its alleged right to mine mineral resources in Kazakhstan. The court found that Kazakhstan's interest in allocating its own mineral resources were vitally affected by the lawsuit. Id. at 1356-63. Further, it found that resolution of issues of international relations law, such as the extent of a nation's ownership of its natural resources and questions of sovereign succession, was necessary to resolve the state law claims asserted in the complaint. Id. at 1363. In Grynberg, therefore, issues of international relations were squarely raised and resolution of those issues was necessary to resolve state law claims. Neither of these conditions is present here. Thus, defendant has failed to demonstrate that a federal common law question exists and removal under § 1441(b) is improper.
Finally, defendant asserts that removal is proper under the All Writs Act, 28 U.S.C. § 1651. That Act provides, "The Supreme Court and all courts established by Act of Congress may issue all writs necessary or appropriate in aid of their respective jurisdictions and agreeable to the usages and principles of law." 28 U.S.C. § 1651 (1994). "A district court, in exceptional circumstances, may use its All Writs authority to remove an otherwise unremovable state court case in order to 'effectuate and prevent the frustration of orders it has previously issued in its exercise of jurisdiction otherwise obtained.'" In re Agent Orange Product Liability Litigation, 996 F.2d 1425, 1431 (2d Cir. 1993), cert. denied, 510 U.S. 1140, 127 L. Ed. 2d 434, 114 S. Ct. 1125, 114 S. Ct. 1126 (1994). However, "the All Writs Act is not a jurisdictional blank check which district courts may use whenever they deem it advisable." Id.
The All Writs Act may not be applied to remove this action for two reasons. First, this court has not issued any orders in the exercise of its jurisdiction that are threatened with frustration nor is there any current case within its jurisdiction endangered by this action. The text of the statute specifically requires that the writ be issued to protect a court's jurisdiction. In United States v. International Brotherhood of Teamsters, 907 F.2d 277, 281 (2d Cir. 1990), the Second Circuit stated that
Appellants correctly note that the Act does not enlarge the jurisdiction of the federal courts. . . all we hold is that if jurisdiction over the subject matter of and the parties to litigation is properly acquired, the All Writs Act authorizes a federal court to protect that jurisdiction even though non-paries may be subject to the terms of the injunction.