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VASURA v. ACANDS

February 24, 2000

GRETCHEN VASURA, PLAINTIFF,
V.
ACANDS, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Haight, Senior District Judge.

MEMORANDUM OPINION AND ORDER

I. Procedural Background

The complaint at bar was initially filed on February 10, 1999 in New York Supreme Court, alleging that plaintiff suffered personal injury as the result of exposure to asbestos. On September 1, 1999, Atlas Turner, Inc., one of the many defendants, filed a notice of removal to this Court asserting two independent grounds for removal: (1) diversity of citizenship and (2) Atlas Turner's status as a "foreign state" within the meaning of the Foreign Sovereign Immunities Act ("FSIA"), 28 U.S.C. § 1603(a). The first ground implicates 28 U.S.C. § 1441(a), which allows the removal of actions over which district courts have original jurisdiction. In asserting the latter ground, Atlas Turner, once owned by an arm of the Canadian government, implicitly invokes the provisions of 28 U.S.C. § 1441(d), which allows the removal of "[a]ny civil action brought in a State court against a foreign state as defined in § 1603(a)".

On October 14, 1999, plaintiff moved to remand this case to New York Supreme Court chiefly on the basis of lack of subject matter jurisdiction.*fn1 Plaintiff argues that (1) diversity jurisdiction does not lie because plaintiff and one of the defendants, Georgia Pacific, are both citizens of Georgia; (2) removal on the basis of diversity was prohibited in any event by 28 U.S.C. § 1441(b) because at least one of the defendants, Rapid-American Corporation, is a New York corporation; and (3) jurisdiction is not furnished by the FSIA because Atlas Turner did not have the status of a foreign state either at the time this lawsuit was filed or at the time the underlying events occurred.

II. Removal Standards

Pursuant to the federal removal statute, a case originally filed in state court may be removed to federal court if it presents a claim over which the federal court has original jurisdiction or a claim against a "foreign state" as defined in the FSIA. See 28 U.S.C. § 1441(a), (d). The statute permits a plaintiff, if so advised, to seek remand of the case to state court on the ground that subject matter jurisdiction does not exist or because of a defect in the removal procedure. 28 U.S.C. § 1447(c). In resolving a motion to remand, courts must be mindful of considerations of federalism and the limited jurisdiction conferred on subject matter jurisdiction courts and should "strictly construe[]" the federal removal statute, resolving all doubts "in favor of remand." Miller v. First Security Investments, Inc., 30 F. Supp.2d 347, 350 (E.D.N Y 1998) (internal quotation marks omitted). The party involving the Court's removal jurisdiction bears the burden of establishing subject matter jurisdiction on a motion to remand. United Food & Commercial Workers Union, Local 919, AFL — CIO v. CenterMark Properties, 30 F.3d 298, 301 (2d Cir. 1994).

As noted, defendant Atlas Turner identified two alternate bases for removal in its notice: its "foreign state" status as conferred by the FSIA and diversity of citizenship. If this Court has jurisdiction on either ground, removal was proper. Plaintiff argues that neither ground furnishes the requisite jurisdiction over this case. To determine whether remand is necessary, I will consider whether Atlas Turner has established original jurisdiction under the FSIA, and if not, whether complete diversity nonetheless rendered the removal valid.

III. "Foreign State"

Pursuant to the FSIA, this Court has original jurisdiction over civil actions filed against a "foreign state." 28 U.S.C. § 1330(a). As defined by that statute, a "foreign state" includes an "agency or instrumentality" of a foreign state, which in turn includes an entity a majority of whose shares are owned by a foreign state or a political subdivision thereof. 28 U.S.C. § 1603(a), (b). It is common ground that from 1980 to 1989, Atlas Turner was owned by Societe Nationale de l'Amiante, an arm of the Canadian government. Thus there does not appear to be any dispute that between 1980 and 1989 Atlas Turner was a "foreign state" within the meaning of the FSIA. The instant debate instead centers upon whether Atlas Turner was a "foreign state" during a time that is relevant to the underlying claims at bar.

The controlling time period for purposes of assessing whether a defendant is entitled to invoke the FSIA has not yet been determined by the Second Circuit, and the issue is unsettled in other circuits as well. The few circuits that have resolved the question have reached two different conclusions. The Ninth Circuit has suggested that the defendant's status as an agency or instrumentality of a foreign government at the time the lawsuit was filed is determinative. See Straub v. A.P. Green, Inc., 38 F.3d 448, 451 (9th Cir. 1994). Others have held that the relevant time period for ascertaining foreign state status is that in which the conduct at issue took place. See General Electric Capital Corp. v. Grossman, 991 F.2d 1376, 1380-82 (8th Cir. 1993); Gould, Inc. v. Pechiney Ugine Kuhlmann, 853 F.2d 445, 450 (6th Cir. 1988); Pere v. Nuovo Pignone, Inc., 150 F.3d 477, 480-81 (5th Cir. 1998), cert. denied 525 U.S. 1141, 119 S.Ct. 1033, 143 L.Ed.2d 42 (1999). See also Granfinanciera, S.A. v. Nordberg, 492 U.S. 33, 39-40, 109 S.Ct. 2782, 106 L.Ed.2d 26 (1989) (recognizing differing views among the circuits on when status is determined for purposes of invoking FSIA jurisdiction, but leaving "for another day" resolution of the issue).

One court in this district has reconciled the two views and concluded that "the correct approach under the FSIA is to ask whether the underlying conduct took place on the foreign state's watch, even if that state is no longer in control of the party by the time of the lawsuit, or, alternatively, whether the defendant [is] currently a foreign state, regardless of its status at the time of the underlying conduct." Belgrade v. Sidex Int'l Furniture Corp., 2 F. Supp.2d 407, 414 (S.D.N.Y. 1998) (Kaplan, J.); but see Daly v. Castro Llanes, 30 F. Supp.2d 407, 419 (S.D.N.Y. 1998) (Schwartz, J.) (decisive focus for FSIA purposes is "on the status of the foreign entity at the time of the alleged acts, not at a later or earlier date"). To resolve the current motion, I need not decide which, if not both, of the time periods that have been identified under the two approaches governs, because Atlas Turner does not meet the test under either.

Without question Atlas Turner was not a foreign state in 1999 when this lawsuit was filed, having been sold a decade earlier by Societe Nationale de l'Amiante. Thus, if the litmus test is the date of filing, the FSIA would clearly not apply in this case.

Assuming the analysis turns instead on the defendant's status at the time the underlying events occurred, the question becomes whether the conduct giving rise to Atlas Turner's alleged liability took place during the time it was owned by the Canadian government — between 1980 and 1989. That particular inquiry is implicated by the provisions in 28 U.S.C. § 1605(a)(2) that § 1604's general immunity of a foreign state from American jurisdiction (federal or state) does not apply to an action which "is based upon a commercial activity carried on in the United States by the foreign state." (Emphasis added). The complaint in this case alleges that plaintiff developed the severe malady of mesothelioma as a result of her exposure to asbestos both at her home and at her place of work, Café Geiger in New York City. But the complaint is silent as to the dates of her alleged exposure. Pointing to her deposition testimony, however, plaintiff Vasura more precisely identifies the relevant time frame. She avers, consistent with her testimony, that the "installation and exposure to the asbestos-containing products occurred in 1969" during the renovation of Café Geiger.*fn2 Plaintiff's Reply Brief at ¶ 2. Therefore, contending that the "injurious tort that occurred to [Vasura] transpired in 1969," plaintiff seeks "leave to amend ¶ 5 of the Complaint to state that Ms. Vasura was exposed to asbestos-containing materials in 1969." Id. at ¶ 3.

Atlas Turner does not offer any evidence to demonstrate that plaintiff's alleged exposure occurred at any time other than in 1969. Instead, the defendant contends that its liability cannot be circumscribed to 1969, the year of exposure, because the complaint's broad allegations include charges that beginning in the 1920s and continuing to the present Atlas Turner knew of the dangerousness of asbestos and violated its duty to warn of its dangers. Atlas Turner thus argues that the complaint alleges a continuing violation that encompassed the period it was owned by Societe Nationale de l'Amiante. This argument is unpersuasive. While the knowledge of asbestos' dangerousness and the duty to warn the plaintiff of that danger may be relevant to defendant's liability in this case, those factors come into play, if at all, only prior to and during the plaintiff's exposure to asbestos for which ...


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