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Badilla v. National Air Cargo, Inc.

United States District Court, Second Circuit

September 30, 2013

JESSICA T. BADILLA, et al., Plaintiffs,
v.
NATIONAL AIR CARGO, INC., et al., Defendants.

REPORT, RECOMMENDATION AND ORDER

JEREMIAH J. McCARTHY, Magistrate Judge.

This action arises from the crash of National Airlines Flight 662 into a mountain east of Kabul International Airport in Afghanistan on October 12, 2010, while en route from Bagram Air Base. Plaintiffs, the alleged personal representatives of six crew members killed in the crash, commenced this removed action on October 2, 2012 by filing a Summons and Complaint in State of New York Supreme Court, County of Erie [1-3], [1] asserting state law negligence claims and seeking to recover unspecified damages.

This action has been referred to me by Hon. Richard J. Arcara for supervision of pretrial proceedings, including the preparation of a Report and Recommendation on dispositive motions [13]. Before me are plaintiffs' motion to remand [18, 24] and for leave to conduct limited jurisdictional discovery in further support of their motion to remand [35], as well as defendants Transafrik International Limited and Transafrik Corporation Limited's (collectively "Transafrik") motion to dismiss the Complaint for, inter alia, lack of personal jurisdiction [37].[2] Oral argument was held on January 10, 2013 [40, 46]. For the following reasons, plaintiffs' motion for leave to conduct limited jurisdictional discovery [35] is granted in part and denied in part; and I further recommend that plaintiffs' motion to remand [18, 24] be denied, without prejudice to renewal following completion of limited jurisdictional discovery, and that defendants Transafrik's motion to dismiss [37] be denied, without prejudice to renewal if and when it is determined that subject matter jurisdiction exists.

BACKGROUND

The Complaint alleges that defendants National Air Cargo, Inc., National Air Cargo Holdings, Inc., National Air Cargo Group, Inc., and/or National Air Cargo - Middle East FZE (collectively "National Air Cargo") "contracted to provide certain air transportation services in support of the mission of the North Atlantic Treaty Organization (NATO') in Afghanistan". Complaint [1-3], ¶11. In connection with providing these services, National Air Cargo leased the aircraft that crashed from defendants Transafrik International Ltd. and/or Transafrik Corporation Ltd. Id., ¶14.[3] Defendant Midwest Air Traffic Control Service, Inc. ("Midwest ATC") provided air traffic control services for the airspace over Kabul International Airport and was providing these services to the aircraft at the time of the crash. Id., ¶¶30-31.

By Notice of Removal dated November 1, 2012, National Air Cargo removed this action pursuant to 28 U.S.C. §§1332 and 1441 "in that it [is] a civil action brought in a State Court by citizens of a foreign state against citizens of States of the United States, and the matter in controversy exceeds the sum of $75, 000.00". Notice of Removal [1], ¶12. Midwest ATC filed a Supplemental Notice of Removal [5] on November 11, 2012, alleging diversity jurisdiction and the existence of jurisdiction "pursuant to 28 U.S.C. §1442(a) as [it] was acting under an officer and/or agency of the United States at all times relevant to this action" and "the underlying accident occurred within a federal enclave where the United States exercised all power and authority". Id . ¶10. On December 18, 2012, Transafrik filed its consent [25] to National Air Cargo's Notice of Removal and Midwest ATC's Supplemental Notice of Removal.

Since I was concerned as to whether there was subject matter jurisdiction, on November 30, 2012, I issued an Order to Show Cause [17] directing the parties to show cause why the case should not be remanded. Later that same day, plaintiffs filed their motion to remand [18], and I issued a briefing schedule for that motion and my Order to Show Cause.

ANALYSIS

A. Plaintiffs' Motion to Remand

"Where... jurisdiction is asserted by a defendant in a removal petition, it follows that the defendant has the burden of establishing that removal is proper." United Food & Commercial Workers Union, Local 919, AFL-CIO v. CenterMark Properties Meriden Square, Inc. , 30 F.3d 298, 301 (2d Cir. 1994). See Flood v. CSX Transportation, Inc., 2012 WL 464189, *5 (W.D.N.Y. 2012) (Skrenty, J.) ("When a party files a motion to remand challenging the removal of an action from state court, the burden falls squarely upon the removing party to establish its right to a federal forum by competent proof"). "[I]f subject matter jurisdiction is contested, courts are permitted to look to materials outside the pleadings." Romano v. Kazacos , 609 F.3d 512, 520 (2d Cir. 2010).

Defendants removed this action alleging diversity, federal enclave, and federal officer jurisdiction. I will address each form of alleged jurisdiction individually.

1. Diversity Jurisdiction

It is alleged in the Complaint that each of the plaintiff decedents were residents of the Republic of the Phillipines at the time of the accident. Complaint [1-3], ¶8. In arguing that this action is brought "by citizens of a foreign state against citizens of States of the United States" (Notice of Removal [1], ¶12), National Air Cargo relies upon 28 U.S.C. §1332(c)(2), which states that "the legal representative of the estate of a decedent shall be deemed to be a citizen only of the same State as the decedent" (emphasis added). As noted in my Order to Show Cause ([17], ¶1), §1332(e) defines "States" as "includ[ing] the Territories, the District of Columbia, and the Commonwealth of Puerto Rico". Since foreign states such as the Philippines are not included in this definition, I questioned whether plaintiffs could be considered foreign citizens. Id.

Initially, it is not evident that "State" carries the same meaning as "States". Even if it did, "[i]t would be absurdly inconsistent... to treat the representative of a citizen's estate according to the decedent's citizenship, but to treat the representative of an alien's estate according to the representative's own citizenship. The most obvious and sensible meaning of §1332(c)(2), which was clearly intended by Congress, is that the representative of a decedent's estate is treated as having the citizenship of the decedent." Geler v. National Westminster Bank USA , 763 F.Supp. 722, 726 (S.D.N.Y. 1991).[4] Therefore, I conclude that plaintiffs' citizenships are controlled by the citizenships of the decedents.

Whereas the Notice of Removal alleges that all plaintiffs were citizens of a foreign state ([1], ¶12), National Air Cargo now points out that the Letters of Limited Administration attached to the Complaint for plaintiff decedent Eduardo Padura ([18-1], p. 31 of 32) establish that, unlike the other plaintiff decedents, he was domiciled in Erie County, New York, rather than the Philippines. Id.[5] Plaintiffs respond by moving [34] for leave to substitute his erroneous Letters of Limited Administration, which are attached to the Complaint as Exhibit A ([1-3], ¶10)[6], with the corrected version issued by the Erie County Surrogate's Court reflecting that his domicile was the Philippines. Since the original Petition for Letters of Limited Administration reflect Padura's domicile as being the Phillipines [34-3] and there was no opposition to this motion at oral argument, I will deem plaintiffs' Complaint amended to reflect the corrected Letters of Limited Administration for decedent Padura.

With plaintiffs sharing foreign citizenship, National Air Cargo also corrects its allegation in the Notice of Removal ([1], ¶12) that defendants are "citizens of States of the United States", conceding that defendant National Air Cargo Middle East - FZE is an alien corporation, thereby "plac[ing] aliens on both sides of the caption [and] raising doubt as to the existence of federal jurisdiction under Section 1332(a)(2)." National Air Cargo's Memorandum of Law [28], p. 4. It is undisputed that Transafrik is likewise a foreign citizen. Transafrik's response to the Order to Show Cause [31], p. 2.

As I indicated in my Order to Show Cause ([17], ¶3), "[t]he general rule requiring complete diversity between opposing parties is explicit and unequivocal.... Clearly, this rule applies in cases where aliens appear on both sides of a case." International Shipping Co., S.A. v. Hydra Offshore, Inc. , 875 F.2d 388, 391 (2d Cir.), cert. denied, 493 U.S. 1003 (1989). Therefore, I conclude that complete diversity is lacking.[7]

2. Federal Enclave Jurisdiction

Midwest ATC's Supplemental Notice of Removal [5] alleges that "[t]he subject accident occurred, and the actions of employees of MIDWEST AIR were undertaken, within a federal enclave, that is, a place in which the United States has exclusive power and authority." Id., ¶16. "A federal enclave is a portion of land over which the United States government exercises exclusive federal jurisdiction.'" Tardd v. Brookhaven National Laboratory , 407 F.Supp.2d 404, 417 (E.D.N.Y. 2006) (emphasis added).

In support of Midwest ATC's argument that the actions of its employees were undertaken within a federal enclave, it alleges that Kabul International Airport "was owned by the Ministry of Transport and Civil Aviation... and operated by the [NATO International Security Assistance Force (ISAF')], of which the United States is the principal participant". Von Campbell Affidavit [30-1], ¶11. Even accepting this as true, it fails to establish that the United States' jurisdiction over the Kabul International Airport was exclusive. Midwest ATC also fails to establish that the United States had exclusive control over the accident scene, which was approximately 25-30 kilometers east of the Kabul International Airport. [24-2], p. 29 of 31. Furthermore, it argues that "the United States Air Force was in control of the air space between the military base in Bagram and the Kabul International Airport" (Midwest ATC's Memorandum of Law [30], p. 15; Von Campbell Affidavit [30-1], ¶11), but cites no case law supporting that federal enclave jurisdiction can be established by control over airspace (as opposed to land).

In any event, "[t]he term federal enclave' originates in the enclave clause in the Constitution" Harris v. Kellogg, Brown & Root Services, Inc. , 796 F.Supp.2d 642, 656 n.7 (W.D.Pa. 2011), which states that, "[t]o exercise exclusive Legislation in all Cases whatsoever, over such District (not exceeding ten Miles square) as may, by Cession of particular States, and the Acceptance of Congress, become the Seat of the Government of the United States, and to exercise like Authority over all Places purchased by the Consent of the Legislature of the State in which the Same shall be, for the Erection of Forts, Magazines, Arsenals, dock-Yards, and other needful Buildings". U.S. Constitution Article I, §8, Clause 17 (emphasis added). Thus, even if the United States exercised exclusive jurisdiction over the Kabul International Airport, the accident scene, or airspace, "courts have reasoned that the enclave clause does not apply to a military installation on foreign soil." Harris , 796 F.Supp.2d at 656 n.7 (citing cases). See Gavrilovic v. Worldwide Language Resources, Inc. , 441 F.Supp.2d 163, 176-77 (D.Me. 2006) (rejecting federal enclave defense for alleged acts occurring at the Bagram Air Force base since ...


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