Goar v. Compania Peruana De Vapores

• Citation: 688 F.2d 417
• Decision Date: 08 October 1982
• Docket Number: No. 81-3170,81-3170
• Parties: Lucas GOAR, Plaintiff-Appellant, v. COMPANIA PERUANA de VAPORES, et al., Defendants-Appellees.
• Court: United States Courts of Appeals. United States Court of Appeals (5th Circuit)

Page 417

688 F.2d 417

Lucas GOAR, Plaintiff-Appellant, v. COMPANIA PERUANA de VAPORES, et al., Defendants-Appellees.

No. 81-3170.

United States Court of Appeals, Fifth Circuit.

Oct. 8, 1982.

Darleen M. Jacobs, New Orleans, La., for Goar.

Chaffe, McCall, Phillips, Toler & Sarpy, J. Dwight LeBlanc, Jr., New Orleans, La., for TUPAC, CPV and Standard.

Appeal from the United States District Court for the Eastern District of Louisiana.

Before WISDOM, RANDALL and TATE, Circuit Judges.

WISDOM, Circuit Judge:

This case poses a simple question, but a novel one with an involved answer. Does the plaintiff have a right to a jury trial in his direct action against the insurer of a foreign-state-owned shipping company, also a defendant in the case? The district court held that he does not. Goar v. Compania Peruana de Vapores, E.D. La. 1981, 510 F.Supp. 737. We affirm.

I.

On August 30, 1979, the S/S Inca Tupac Yupanqui collided with a dock on the Mississippi River, near Good Hope, Louisiana, causing extensive property damage and numerous personal injuries. The vessel belonged to Compania Peruana de Vapores, S.A. (CPV), a corporation wholly owned by Peru, a foreign sovereign state, of course. It was insured by Standard Steamship Owners' Protection and Indemnity Association (Bermuda) Limited (Standard). The plaintiff, Lucas Goar, was among those injured in the collision. He sued the vessel and CPV for negligence and included Standard as a defendant under the Louisiana direct action statute, La. Rev. Stat. Ann. § 22:655 (West 1978). The complaint also named several other defendants.

The collision resulted in several lawsuits aside from Goar's, and all were consolidated for trial together. Before trial, CPV moved for a nonjury trial on the ground that it is a "foreign state" as defined in 28 U.S.C. § 1603(a) ¹ and therefore amenable to trial only under 28 U.S.C. § 1330(a), which establishes jurisdiction "of any nonjury civil action against a foreign state". ² The district court granted the motion, but only with respect to claims against CPV. The court determined that it would empanel a jury to hear any claim in the consolidated cases in which a jury trial was appropriate and that the jury would serve, in the court's discretion, as an advisory jury with respect to other claims.

Shortly before the scheduled trial date, all the consolidated actions except Goar's against CPV and Standard were compromised or dismissed. With Goar the only remaining plaintiff and CPV and Standard the only remaining defendants, the district court noted that it apparently had jurisdiction based on diversity of citizenship, under 28 U.S.C. § 1332(a)(2), which vests the district courts with jurisdiction of civil actions between "citizens of a State and citizens or subjects of a foreign state". Because § 1332(a)(2), unlike § 1330(a), is not restricted to nonjury trials, the court allowed the case to proceed to trial before a jury. ³ CPV stipulated liability for the consequences of the collision, and the jury returned a verdict for Goar of $580,397.00.

CPV and Standard moved to strike the verdict on the ground that Goar had no right to a jury in his case against Standard. The district court granted the motion and entered a verdict of $269,915.00 based on its own findings. Noting its prior holding that CPV is a "foreign state" within the meaning of 28 U.S.C. § 1603(a), the court held that diversity jurisdiction does not obtain in any case in which a "foreign state" is among the defendants and that jurisdiction Goar appeals from the district court's judgment, challenging both parts of its holding. ⁵

                of the action against Standard was therefore exclusively maritime, with no right to a jury trial.  4  The district court also held that, regardless of the statutory basis for jurisdiction, Goar had no right to a jury because his claim is by nature one against a foreign sovereign, for which federal practice does not require a jury
                

II.

Goar argues that jurisdiction of this case is grounded on diversity of citizenship by virtue of 28 U.S.C. § 1332(a). As noted above, § 1332(a)(2) vests the district courts with jurisdiction of civil actions between "citizens of a State and citizens or subjects of a foreign state". ⁶ Before enactment of the Foreign Sovereign Immunities Act of 1976, Pub. L. No. 94-583, 90 Stat. 2891 (codified in scattered sections of 28 U.S.C.) (FSIA), § 1332(a) (2) also embraced jurisdiction of actions by citizens of a state against foreign states. ⁷ In the FSIA, however, Congress chose to treat jurisdiction of actions against foreign sovereigns in a uniform and comprehensive manner. Congress removed the language pertaining to foreign sovereigns from § 1332(a) and enacted a new provision, 28 U.S.C. § 1330, which governs cases in which foreign states are defendants. Pub. L. No. 94-583, §§ 2, 3, 90 Stat. 2891, 2891. Jurisdiction under § 1330 is limited to nonjury cases; Congress determined The appellant does not dispute that CPV is a "foreign state", within the meaning of § 1603, and suable under § 1330. He argues, rather, that a corporation owned by a foreign government is both a "foreign state" under § 1330 and a "citizen or subject of a foreign state" under § 1332(a). In addition, he argues that even if § 1332(a) does not provide a basis for jurisdiction of his action against CPV, CPV's presence in the suit should not affect jurisdiction of the action against Standard. We reject both arguments.

that "(a)ctions tried by a court without jury will tend to promote a uniformity in decision where foreign governments are involved". H.R. Rep. No. 1487, 96th Cong., 2d Sess. 13, reprinted in 1976 U.S. Code Cong. & Ad. News 6604, 6611-12 (House Report). The FSIA defined "foreign state" broadly, to include agencies and instrumentalities of foreign states, 28 U.S.C. § 1603(a), and expressly adopted this broad definition in § 1330.

The appellant's first argument starts with the reasonable premise that, absent the FSIA, CPV would be a "citizen or subject of a foreign state" within the plain meaning of § 1332(a). But the argument rests also on the more tenuous contention that the FSIA does not affect CPV's status under § 1332(a). The appellant points out that § 1603 by its terms applies only "(f)or purposes of this chapter (chapter 97 of title 28 U.S.C.)" and that § 1332 is in chapter 85. He also notes that § 1330(a) expressly incorporates the definitions of § 1603(a) but § 1332 does not. From this he concludes that while the FSIA made corporations owned by foreign governments suable under § 1330(a), it did not affect their amenability to suit under § 1332(a). CPV, according to the appellant, is suable either under § 1330(a) without a jury or under § 1332(a) with one. See Icenogle v. Olympic Airways, S.A., D.D.C. 1979, 82 F.R.D. 36, 38. Although we accept the appellant's premise, we cannot agree that the FSIA left CPV's status under § 1332(a) unchanged.

Every appellate court that has considered whether § 1330(a) is the sole source of federal jurisdiction in suits against corporations owned by foreign states has concluded that it is. Rex v. Compania Pervana de Vapores, S.A., 3 Cir. 1981, 660 F.2d 61, 65; Williams v. Shipping Corp. of India, 4 Cir. 1981, 653 F.2d 875, 881 cert. denied, 1982, --- U.S. ----, 102 S.Ct. 1490, 71 L.Ed.2d 691; Ruggiero v. Compania Peruana de Vapores, S.A., 2 Cir. 1981, 639 F.2d 872, 875 (Friendly, J.). See also Houston v. Murmansk Shipping Co., 4 Cir. 1982, 667 F.2d 1151. ⁸ We agree with the results in these cases. Goar's argument that the words "(f)or purposes of this chapter" in § 1603 prevent that provision from affecting CPV's status under § 1332(a) rests on a "hypertechnical analysis of the legislation". Williams, 653 F.2d at 880. As Judge Friendly pointed out in Ruggiero, there was no need to include a reference to § 1603 in § 1332(a) because § 1332(a) does not mention foreign states under any definition. 639 F.2d at 875 n. 6. Sections 1330 and 1332 must be read together. Id.; see also House Report at 24, 1976 U.S. Code Cong. & Ad. News at 6622-23. The reference to § 1603 in § 1330(a) is thus enough to establish that corporations owned by foreign states are considered foreign states for purposes of subject-matter jurisdiction generally. ⁹

The legislative history of the FSIA supports our conclusion that § 1330(a) is the exclusive basis for federal court jurisdiction in suits against corporations owned by foreign states. The House Report states that The House Report's discussion of the FSIA amendment to § 1332(a) makes our conclusion inescapable. As noted above, the FSIA removed references to "foreign states" from this provision. The House Report states that this change does "not affect the applicability of section 1332 to entities that are both owned by a foreign state and are also citizens of a state of the United States". Id. at 14, 1976 U.S. Code Cong. & Ad. News at 6613. The Report relies on § 1603(b), which excludes from its definition of "agency or instrumentality of a foreign state" those foreign-state-owned entities that are also citizens of states of the United States. See id. at 15, 1976 U.S. Code Cong. & Ad. News at 6614. The House Report clearly assumes that the amendment to § 1332(a) makes it inapplicable to those state-owned entities that are agencies or instrumentalities of foreign states as defined in § 1603.

§ 1330's broad grant of jurisdiction in cases involving foreign sovereigns was intended to promote "uniformity in decision, which is desirable since a disparate treatment of cases involving foreign governments may have adverse foreign relations consequences". House Report at 13, 1976 U.S. Code Cong. & Ad. News at 6611. Uniformity of decision was the specific reason for requiring that suits against foreign sovereigns be tried by a court without a jury. Id., 1976 U.S. Code Cong. & Ad. News at 6611-12. By including in § 1330(a) suits against corporations owned by foreign sovereigns, Congress...