The opinion of the court was delivered by: MIRIAM CEDARBAUM, Senior District Judge
Defendants Deutsche Bahn AG ("Deutsche Bahn"), Deutsche Bahn AutoZug
AG ("AutoZug"), Deutsche Bahn Reise & Touristik AG ("R&T"), Janz
Volker, Accor S.A. ("Accor"), and Compagnie Internationale des
Wagons-Lits ("CIWLT"), move to dismiss the complaint on various grounds,
including sovereign immunity, lack of personal jurisdiction, and
forum non conveniens. For the following
reasons, the motions are granted. BACKGROUND
This case arises from the death of five members of the Amore family in
a train accident in France. According to the allegations of the
complaint, which are accepted as true for the purposes of this motion,
the Amores embarked in Paris on an overnight train to Munich on November
6, 2002. The train was operated by the French national railway,
Société Nationale Chemins de Fer Francais ("SNCF"), but the
railcar to which the Amores were assigned, Railcar 120, was owned and
operated by AutoZug, a subsidiary of defendant Deutsche Bahn, the
nationally owned rail operator of Germany.
Shortly before two in the morning, the kitchenette of Railcar 120
caught fire. According to plaintiffs, defendant Volker, an employee of
defendant R&T and the attendant assigned to Railcar 120 that night,
started the fire and, failing to extinguish it, abandoned his post
without warning the sleeping passengers in Railcar 120. The complaint
further alleges that employees of Accor and CIWLT, who were working in
cars adjacent to Railcar 120, failed to timely warn and evacuate the
Amores after defendant Volker fled.
The fire quickly raged out of control, blocking the railcar's interior
exits and preventing twelve passengers, including the Amores, from
escaping. Although the fire was soon detected and the train stopped,
rescue workers were unable to enter Railcar 120 because Volker had locked the exterior doors of
the railcar from the inside. The passengers trapped inside their
individual compartments were unable to break the windows. By the time
firefighters arrived and gained access to Railcar 120, the twelve
passengers inside were dead.
Plaintiffs, one of whom is suing individually and all of whom are suing
as representatives of the estates of the Amore family, filed this
wrongful death and survival action against Volker and a number of
corporate defendants connected either directly or through their
subsidiaries to the operation of the train on which the Amores were
traveling in France. Plaintiffs assert claims of negligence, product
liability, and breach of implied warranty. Plaintiffs also seek punitive
On December 11, 2003, plaintiffs consented to the dismissal of two
corporate defendants, Accor North America and Stinnes Corporation.
Plaintiffs have agreed to dismiss Deutsche Bahn Nachzug, a defendant
named in the caption and discussed in the complaint, but whom plaintiffs
concede does not exist. Plaintiffs have also agreed to dismiss ISD-DSG
GmbH, which did not exist at the time of the accident and is in
liquidation. The remaining defendants now move to dismiss the complaint. DISCUSSION
The Deutsche Bahn defendants move to dismiss based on sovereign
immunity, lack of personal jurisdiction, forum non conveniens,
and the principle of abstention. The Accor defendants move to dismiss the
complaint for lack of personal jurisdiction, forum non
conveniens, and failure to state a claim.
Deutsche Bahn argues that this court has no subject matter jurisdiction
over the claims against it, because it is an agency or instrumentality of
a foreign sovereign and therefore immune from suit pursuant to the
Foreign Sovereign Immunities Act ("FSIA"), 28 U.S.C. § 1603-10. As
previously noted, Deutsche Bahn is the national rail operator of Germany,
wholly owned by the German government.
The FSIA provides foreign states with immunity from suits in American
courts, subject to certain exceptions. See Verlinden B.V. v. Central
Bank of Nigeria, 461 U.S. 480
, 489 (1983). Section 1603 states that
immunity extends not only to political subdivisions, but also to agencies
and instrumentalities of a foreign state, defined as:
[A]ny 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
. . . nor created under the laws of any third
28 U.S.C. § 1603(b). Once a defendant makes a prima facie showing
that it is an agency or instrumentality of a foreign state, the plaintiff
must demonstrate that a statutory exception to immunity applies.
See Cargill Int'l S.A. v. M/T Pavel Dybenko, 991 F.2d 1012
1016 (2d Cir. 1993).
Plaintiffs concede that Deutsche Bahn is an instrumentality of the
Republic of Germany. They argue, however, that two of the FSIA's
exceptions remove the cloak of immunity from Deutsche Bahn in this case.
The FSIA provides, in relevant part:
A foreign state shall not be immune from the
jurisdiction of courts of the United States
or of the States in any case
(1) in which the foreign state has waived its
immunity either explicitly or by
implication . . .; [or]
(2) in which the action is based upon a commercial
activity carried on in the United States by the
foreign state; or upon an act performed in the
United States in connection with a commercial
activity of the foreign state elsewhere; or upon
an act outside the territory of the United States
in connection with a commercial activity of the
foreign state elsewhere and that act causes a
direct effect in the United States. . . .
28 U.S.C. § 1605(a).
Plaintiffs argue that Deutsche Bahn waived its immunity pursuant to
§ 1605(a)(1) when Germany signed the Convention Concerning
International Carriage by Rail ("COTIF"), a treaty that regulates
litigation arising from railway transportation in signatory countries. Plaintiffs claim, and defendants concede, that
each signatory of COTIF, including Germany, has waived its sovereign
immunity with respect to damage claims arising from its railway
transportation activities in other signatory countries. Each signatory
nation has also agreed that personal injury actions arising from railway
accidents can be filed only in the country in which the injury occurred.
See Convention Concerning International Carriage by Rail (May
9, 1980), app. A, art. 52, § 1. Plaintiffs recognize that the United
States is not a signatory of this treaty, but argue that this explicit
waiver of immunity from suit in signatory countries is an implied waiver
of immunity from suit in the United States within the meaning of the
Plaintiffs' reading of § 1605(a)(1) is too broad. The Second
Circuit has stated that the FSIA's implied waiver provision should be
construed narrowly, see Transatlantic Shiffahrtskontor GmbH v.
Shanghai Foreign Trade Corp., 204 F.3d 384, 391 (2d Cir. 2000), and
that such waivers should not be found absent a showing of the sovereign
defendant's intention to waive immunity, see, e.g.,
Cargill, 991 F.2d at 1017. Here, Germany's ratification of
COTIF constitutes a very narrow waiver of sovereign immunity: signatory
nations have not consented to suit in any signatory nation, but only in
the courts of the country in which the injury giving rise to the suit
occurred. Plaintiffs provide no justification for finding that through such a
limited waiver, Germany and its instrumentalities have impliedly waived
sovereign immunity for lawsuits arising in nonsignatory jurisdictions and
in countries other than the country in which the injury giving rise to
the suits occurred.
Plaintiffs also contend that this suit falls under § 1605(a)(2),
the commercial activities exception to sovereign immunity. Because it is
undisputed that the Amores purchased their train tickets in Europe, and
that all of the wrongdoing alleged in the complaint occurred in Europe,
the only subcategory of the commercial activities exception potentially
applicable here is the third, which removes sovereign immunity when an
action is based upon "an act outside the territory of the United States
in connection with a commercial activity of the foreign state elsewhere
and that act causes a direct effect in the United States."
28 U.S.C. § 1605(a)(2).
The parties do not dispute that Deutsche Bahn's provision of rail
transportation in Europe is a commercial activity. The significant
question is whether the negligence, product defects, and breach of
warranty that allegedly contributed to the fire in Railcar 120
the acts upon which the complaint is predicated had direct
effects in the United States.
In Martin v. Republic of South Africa, 836 F.2d 91 (2d Cir.
1987), the Second Circuit held that personal injuries suffered by an American abroad as a result of the tortious conduct of a foreign
sovereign cannot provide a basis for finding an exception to immunity
under § 1605(a)(2), see id. at 95. In that case, appellant
alleged that he was injured in a car accident in South Africa and was
denied timely medical care because he was black. See id. at 92.
He returned home a quadriplegic, and argued that the pain, suffering, and
financial loss that he consequently suffered in the United States were
direct effects of South Africa's tortious conduct. But because appellant
suffered his injuries and became a quadriplegic in South Africa, the
court reasoned that "it cannot be said that the effects of South Africa's
acts occurred `in the United States.'" Id. at 94. The court
drew on the reasoning of the leading Second Circuit case to parse the
meaning of "direct effect in the United States," Texas Trading &
Milling Corp. v. Federal Republic of Nigeria, 647 F.2d 300 (2d Cir.
1981). Texas Trading held that Nigeria's repudiation of
contracts with American corporations had a direct effect in the United
States because the plaintiffs' financial loss occurred here: the
contracts provided for payment in the United States from a New York bank,
and the plaintiffs were injured when Nigeria withheld that payment.
See id. at 312; see also Martin, 836 F.2d at 94. The
Texas Trading court also suggested that cases involving
personal injuries sustained by Americans abroad are both analytically
distinct from and easier to resolve than contract claims by corporations. The court noted
that personal injuries are "undoubtedly . . . `direct' effects,"
Texas Trading, 647 F.2d at 312, and that when an individual is
injured overseas, "it is easy to locate the `effect' outside the United
States" id. at 312 n.35.
Texas Trading also approved the reasoning of Harris v.
VAO Intourist, Moscow, 481 F. Supp. 1056 (E.D.N.Y. 1979), a wrongful
death action arising from the death of an American citizen in a fire in a
Moscow hotel. In rejecting the plaintiff's argument that the commercial
activities exception of the FSIA barred the defendants' claim of
sovereign immunity, Judge Weinstein wrote:
Obviously the negligent operation of a hotel in
Moscow causing the death of a United States
resident has effects in the United States; here it
leaves aggrieved relatives in this country. But
the precise issue is not whether the fire had any
effect here, but whether it had a "direct effect"
in the United States within the meaning of the
statutory language. Indirect injurious
consequences within this country of an
out-of-state act are not sufficient contacts to
satisfy the "direct effect" requirement of section
Id. at 1062. See also Close v. Am. Airlines,
587 F. Supp. 1062, 1064-65 (S.D.N.Y. 1984) (holding that an American citizen
could not recover for injuries caused abroad by a foreign airline).
Plaintiffs allege that Deutsche Bahn's conduct outside the United
States caused the losses suffered here by the Amores' surviving
relatives, as well as economic losses to Deutsche Bahn itself resulting
from a decline in its United States business following extensive
publicity about the accident. But the direct effects of the conduct alleged were the deaths of the Amores in
France, and the cases cited above demonstrate that those extraterritorial
effects do not provide an exception to Deutsche Bahn's sovereign
immunity. Therefore, the claims against Deutsche Bahn are dismissed for
lack of subject matter jurisdiction.
II. Personal Jurisdiction
Plaintiffs bear the burden of establishing that the court may exercise
personal jurisdiction over the remaining defendants CutCo Indus.,
Inc. v. Naughton, 806 F.2d 361, 365 (2d Cir. 1986) When, as here, a
motion to dismiss for lack of personal jurisdiction is decided before
discovery and without an evidentiary hearing, a plaintiff need only make
a prima facie showing of personal jurisdiction. See DiStefano v.
Carozzi N. Am., Inc., 286 F.3d 81, 84 (2d Cir. 2001). All pleadings
and affidavits are construed in the light most favorable to the
plaintiffs, and all doubts are resolved in their favor. See id.
A federal court sitting in diversity must apply the law of the forum
state in determining whether it may exercise personal jurisdiction over
an out-of-state defendant. Savin v. Ranier, 898 F.2d 304, 306
(2d Cir. 1990). If the applicable statute of the forum state allows the
court to exercise personal jurisdiction, the court must then determine
whether the constitutional standards of due process are met. Id.
Because this lawsuit does not arise out of any activity by the
nonresident defendants within the state of New York, plaintiffs rely on
New York's "general jurisdiction" provision, N.Y. C.P.L.R. § 301.
Personal jurisdiction over a corporation exists pursuant to § 301 if
the corporation is "engaged in such a continuous and systematic course of
`doing business' [in New York] as to warrant a finding of its `presence
in this jurisdiction.'" Laufer v. Ostrow, 55 N.Y.2d 305, 309-10
(1982) (quoting McGowan v. Smith, 52 N.Y.2d 268, 272 (1981)).
Section 301 jurisdiction, which subjects a nondomiciliary corporation to
suits unrelated to its contacts with New York, is appropriate only if the
corporation does business in New York "not occasionally or casually, but
with a fair measure of permanence and continuity." Hoffritz for
Cutlery, Inc. v. Amajac, Ltd., 763 F.2d 55, 58 (2d Cir. 1985)
(quoting Tauza v. Susquehanna Coal Co., 220 N.Y. 259, 267
As discussed in greater detail below, plaintiffs fail to make a prima
facie showing of personal jurisdiction over AutoZug and R&T. There
are also serious questions whether this court can exercise jurisdiction
over Accor and CIWLT.
A. The Remaining Deutsche Bahn Defendants
AutoZug and R&T are two German corporations whose principal business is long-distance passenger train travel in Europe. R&T
is a wholly owned subsidiary of an entity called DB Personenverkehr,
which is itself a wholly owned subsidiary of Deutsche Bahn. AutoZug is a
wholly owned subsidiary of R&T. Thus, each subsidiary exists several
rungs down the corporate ladder from Deutsche Bahn.
Plaintiffs have alleged no direct contacts between AutoZug and New
York, and only one such contact between R&T and New York.
Specifically, plaintiffs allege that R&T contracted directly with
U.S. airlines which have operations in New York to develop "rail and fly"
packages for U.S. customers. This allegation is insufficient because it
does not show that R&T conducted a continuous course of business in
New York, or even that R&T solicited or executed these contracts in
New York. The existence of contractual relationships with entities that
happen to have operations in New York does not establish § 301
jurisdiction, because it does not show extensive conduct directed toward
or occurring in New York. See Mantello v. Hall,
947 F. Supp. 92, 98 (S.D.N.Y. 1996).
Plaintiffs also rely on mere department and agency theories to argue
that jurisdiction over these defendants is proper. Each of these is
discussed in turn below. 1. AutoZug and R&T as "Mere Departments" of Deutsche Bahn
First, plaintiffs contend that these German subsidiaries are "mere
departments" of Deutsche Bahn, and accordingly share the jurisdictional
contacts of their parent. See Volkswaaenwerk Aktiengesellschaft v.
Beech Aircraft Corp., 751 F.2d 117, 120-22 (2d Cir. 1984). A
corporate entity that is present in New York will be considered a "mere
department" of a foreign parent, so as to expose the parent to personal
jurisdiction in New York, "only if the foreign parent's control is
pervasive enough that the corporate separation is more formal than real."
Palmieri v. Estefan, 793 F. Supp. 1182, 1187 (S.D.N.Y. 1992)
(quoting H. Heller & Co. v. Novacor Chemicals Ltd.,
726 F. Supp. 49, 54 (S.D.N.Y. 1988)). This theory, of course, requires an
initial finding that Deutsche Bahn itself is doing business in New York,
and plaintiffs offer a number of alternative theories to support such a
finding: that Deutsche Bahn itself has numerous direct contacts with New
York, that Deutsche Bahn is doing business through other mere departments
located in New York, or that Deutsche Bahn is doing business through
various New York-based agents.
There is a serious problem with plaintiffs' attempt to premise personal
jurisdiction over the German subsidiaries on Deutsche Bahn's contacts
with New York. Deutsche Bahn is immune from suit in the United States. By
alleging that these subsidiaries are mere departments of Deutsche Bahn, plaintiffs are
alleging that the subsidiaries are not separate corporate entities at
all, but rather alter egos of an immune entity. If, as plaintiffs insist,
the subsidiaries' independent corporate form is a mere facade, and
Deutsche Bahn exerts pervasive control over them, then the entities must
share Deutsche Bahn's immunity. Cf. U.S. Fid. & Guar. Co. v.
Braspetro Oil Servs. Co., No. 97 Civ. 6124 (JGK), 1999 WL 307666, at
*11 (S.D.N.Y. May 17, 1999), aff'd, 199 F.3d 94, 97 (2d Cir.
1999) (finding that the defendant, a corporate subsidiary of a subsidiary
of Petrobras, an instrumentality of Brazil, was also an alter ego of
Petrobras, and would have been entitled to sovereign immunity under ...