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March 19, 2002


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


This action arises from the alleged wrongful death of plaintiffs' children and grandchildren in a ski train accident that occurred in Kaprun, Austria in November 2000. See Kern v. Oesterreichische Elektrizitaetswirtschaft Ag, 178 F. Supp.2d 367, 367 (S.D.N.Y. 2001). Plaintiffs are suing Gletscherbahnen Kaprun AG ("GBK"), an Austrian ski resort operator, among other corporate and individual defendants, seeking compensatory and punitive damages as well as injunctive relief.*fn1

GBK now moves to dismiss this action pursuant to the Foreign Sovereign Immunity Act of 1976 ("the Act" or "FSIA"), 28 U.S.C. § 1330(a), 1602-1611, because the Austrian government indirectly owns a majority of its shares. For the reasons set forth below, GBK's motion to dismiss is denied.


GBK is a private company that owns the ski resort located on Kitzsteinhorn Mountain in Kaprun, Austria. See Declaration of Johann Peter Praauer, Managing Director at GBK ("Praauer Decl.") ¶ 4. It also owns and operates the ski train and tunnel involved in the accident. See id. Plaintiffs allege that GBK is responsible for train and tunnel defects that caused the death of their family members. See 12/21/01 Consolidated Amended Complaint ¶¶ 98-101. GBK's parent corporation, Oesterreichische Elektrizitaetswirtschaft AG ("OE AG"), an Austrian power generation and tourism conglomerate, owns 45% of GBK's shares.*fn2 See Praauer Decl. ¶ 5. Gemeinde Kaprun ("Village of Kaprun") owns 33.98%. See id.*fn3


A. Rule 12(b)(1) Generally

"The court properly dismisses a case for lack of subject matter jurisdiction pursuant to Rule 12(b)(1) when the district court lacks the statutory or constitutional power to adjudicate it." Tasini v. New York Times Co., 184 F. Supp.2d 350, 353 (S.D.N.Y. 2002) (quotations, alterations omitted). Plaintiffs bear the burden of proving, by a preponderance of the evidence, that this Court has subject matter jurisdiction over their case. See Makarova v. United States, 201 F.3d 110, 113 (2d Cir. 2000).

When faced with a Rule 12(b)(1) motion that contains a factual challenge, a court may draw jurisdictional facts from the complaint, affidavits and exhibits submitted by the parties. See Robinson v. Government of Malaysia, 269 F.3d 133, 140 (2d Cir. 2001); Kline v. Kaneko, 685 F. Supp. 386, 389-90 (S.D.N.Y. 1988). If the defendant challenges only the legal sufficiency of plaintiffs' jurisdictional allegations, the court must take all facts alleged in the complaint as true and draw all reasonable inferences in favor of plaintiffs. See Robinson, 269 F.3d at 140; Tasini, 184 F. Supp.2d 350, at 353; Virtual Countries, Inc. v. Republic of South Africa, 148 F. Supp.2d 256, 262 (S.D.N.Y. 2001). Although the only challenge here is legal in nature, defendant's declaration regarding its shareholder composition is cited because when "evidence relevant to the jurisdictional question is before the court, the district court may refer to that evidence." Robinson, 269 F.3d at 140 (quotation marks, citation and alterations omitted).

B. Rule 12(b)(1) in FSIA Context

Because "`sovereign immunity is immunity from suit, not just from liability,' a motion to dismiss based on an assertion of foreign sovereign immunity has particular significance because of the necessity of resolving that issue early on if possible." Robinson, 269 F.3d at 141 (quoting Moran v. Kingdom of Saudi Arabia, 27 F.3d 169, 172 (5th Cir. 1994)). Sovereign immunity "`is effectively lost if a case is erroneously permitted to go to trial.'" Id. at 142 (quoting Mitchell v. Forsyth, 472 U.S. 511, 526, 105 S.Ct. 2806, 86 L.Ed.2d 411 (1985) (alterations added)).

The FSIA provides the sole basis for a federal court's subject matter jurisdiction over a suit against a foreign sovereign. See Saudi Arabia v. Nelson, 507 U.S. 349, 355, 113 S.Ct. 1471, 123 L.Ed.2d 47 (1993); Wasserstein Perella Emerging Mkts. Fin. LP v. Province of Formosa, No. 97 Civ. 793, 2000 WL 573231, at *1 (S.D.N.Y. May 11, 2000). Subject matter jurisdiction exists over matters involving foreign states wherever an exception deprives the foreign state of immunity, or where an international agreement applies. See 28 U.S.C. § 1330(a). Once the defendant presents a prima facie case that it is a foreign state as defined by the Act, 28 U.S.C. § 1603, it is presumptively immune and the burden shifts to plaintiffs to go forward with evidence showing that an exception applies. See Cargill Int'l SA v. MIT Pavel Dybenko, 991 F.2d 1012, 1016 (2d Cir. 1993); Wasserstein, 2000 WL 573231, at *4. Where defendant cannot make out a prima facie case that it is a foreign state, the Act does not apply at all and plaintiffs may establish that jurisdiction is proper on some other ground.*fn4

III. ...

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