The opinion of the court was delivered by: Shira A. Scheindlin, United States District Judge.
OE AG moved to dismiss the action against it on numerous grounds. The
parties have since agreed to narrow the focus of the motion to the
question of whether the Foreign Sovereign Immunity Act precludes this
Court's jurisdiction over OE AG. Plaintiffs thus claim that jurisdiction
is proper under 28 U.S.C. § 1605(a)(1),(2) (exceptions to foreign
sovereign immunity). For the reasons set forth below, OE AG's motion to
dismiss on the ground of foreign sovereign immunity is granted.
In November 2000, plaintiffs' decedents died in a ski train fire on
Kitzsteinhorn mountain in Kaprun, Austria that killed 155 tourists and
employees of the ski operation. See OE AG's Annual Report for the Year
2000 ("Annual Report") at 37, Ex. B to Plaintiff's Preliminary Opposition
to OE AG's Motion to Dismiss Based on Sovereign Immunity ("Pl. Opp'n.").
Plaintiffs John S. Habblett and Suzanne K. Habblett lost their
daughter, Jennifer Kirkpatrick Habblett Goodridge, and two
grandchildren, Michael and Kyle Goodridge, in the accident. Plaintiffs
Rudolf and Angela Kern's son, Erich Kern, also died in the accident.
Plaintiffs Dick Baker and Carol Baker, not named in the caption, lost
their daughter, Carrie Lynn Baker.
The Habbletts and the Kerns filed separate actions on January 11,
2001, setting forth the same causes of action against numerous defendants
including OE AG. See 1/11/01 Habbletts' Complaint; 1/11/01 Kerns'
Complaint (both "Complaint" or "Compl."). The Bakers filed a complaint
against the same defendants on January 31, 2001, also stating the same
causes of action. 1/31/01 Bakers' Complaint (also "Complaint" or
"Compl."). Defendant OE AG (a.k.a. Verbundgesellschaft or Verbund, see
Compl. ¶ 13) is an Austrian holding company for a "series of
associated companies" in industries ranging from engineering, energy and
environmental technology to telecommunications and tourism. Annual Report
at 36. The Austrian Republic owns 51% of the shares of OE AG. 8/10/01 OE
AG's Answers to Interrogatories ("FSIA Interrog.") No. 1 at 3. OE AG is
the largest individual shareholder (45%) in defendant Gletscherbahnen
Kaprun Aktiengesellschaft ("GBK"), the Austrian company that directly
operated the ski train on Kitzsteinhorn Mountain (the "ski train").*fn1
See Annual Report at 37; Compl. ¶ 17.
Defendant Waagner Biro AG is an Austrian steel and mechanical
engineering corporation, which allegedly designed, built and maintained
the ski train. See Compl. ¶ 14. Defendant Swoboda Karoserie AG is an
Austrian corporation that allegedly provided certain repair services for
See id. ¶ 15.
Defendant Baubedarfszentrum Stadlbauer AG, which plaintiffs allege owns
a controlling share of defendant Swoboda Karoserie AG, is allegedly one
of Austria's leading wholesalers and retailers of building material,
tiles and safety devices. See id. ¶ 16. Defendants ABC Corporations
1-10, and John Does 1-10, are "fictitious names for individuals and
corporations whose actual identity [sic] is as of yet unknown, but will
be identified through discovery." Id. ¶ 18.
B. Related Non-Parties and Events
Various other entities and events are relevant in this action. Austrian
Hydro Power AG ("AHP") is an Austrian company that is 85%-owned by OE
AG. See OE AG's Motion to Dismiss on FSIA Grounds ("Def. Mot.") at 2.
During the past few years, AHP transacted a series of nine cross-border
leases which closed in New York and in which OE AG served as guarantor
(the "leasing transactions"). See FSIA Interrog. No. 15 at 21; see also
Part II.A.2, infra. The leases contain provisions waiving sovereign
immunity for disputes arising from the agreements, and agreeing to the
application of New York law. See id.
Tauern Touristik GmbH ("TT") is one of OE AG's wholly-owned
subsidiaries. See Annual Report at 37. TT carries out "marketing and
utilization" for OE AG's tourism business. Id. Plaintiffs allege that TT
marketed Austrian skiing in the United States, and that this marketing
induced plaintiffs' relatives to ski in Kaprun, Austria. See Pl. Opp'n.
at 9. Plaintiffs further allege that OE AG funded TT's marketing efforts
in the United States. Id. OE AG has denied that it funded any of TT's
advertising or promotional efforts in the United States. See FSIA
Interrog. No. 12 at 18.
When it became apparent that OE AG planned to rely on a sovereign
immunity defense, plaintiffs sought jurisdictional discovery on that
issue. This Court ordered that OE AG provide to Magistrate Judge Theodore
Katz for in camera review the following items: (1) the table of contents
for the closing binders relating to certain leasing transactions, (2) the
intended use provisions of the governing agreements, and (3) any forum
selection, choice of law or immunity waiver clauses in the closing
binders of each transaction. See 9/10/01 Amended Discovery Order
("9/10/01 Discovery Order"); 8/29/01 Transcript at 29-30. In addition,
the Court ordered that OE AG provide a sworn statement as to whether OE
AG had funded any promotional activities of Austrian skiing or hiking in
the United States, and whether OE AG provided funding to TT for promoting
Austrian skiing or hiking in the United States. See 9/10/01 Discovery
Order at 2.
Judge Katz received briefs and opposition papers relating to the
discovery order, and granted further limited discovery of materials
relating to the leasing transactions that closed in New York during
1999-2001. See 10/11/01 Order of Magistrate Judge Theodore Katz ("10/11
Katz Order") at 1. Judge Katz subsequently reviewed the materials and
concluded that none of the information provided any support for
plaintiffs' theory that the funds derived from the leasing transactions
were intended to fund skiing activities at the site of the accident. See
10/23/01 Order of Magistrate Judge Theodore Katz ...