Rodriguez v. Transnave Inc., 93-2101

• Decision Date: 03 December 1993
• Docket Number: No. 93-2101,93-2101
• Parties: Patricio V. RODRIGUEZ, Plaintiff-Appellee, v. TRANSNAVE INC., Defendant-Appellant.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 284

8 F.3d 284

1994 A.M.C. 769

Patricio V. RODRIGUEZ, Plaintiff-Appellee, v. TRANSNAVE INC., Defendant-Appellant.

No. 93-2101.

United States Court of Appeals, Fifth Circuit.

Dec. 3, 1993.

William M. Jensen, Royston, Rayzor, Vickery & Williams, Houston, TX, for defendant-appellant.

Robert D. Bates, Bates & Lee, Patrice Barron, Houston, TX, for plaintiff-appellee.

Appeal from the United States District Court for the Southern District of Texas.

Before JOHNSON, WIENER and DeMOSS, Circuit Judges.

DeMOSS, Circuit Judge:

This is an interlocutory appeal on the issue of foreign sovereign immunity. We REVERSE the district court's denial of the defendant's motion to dismiss and hold that the defendant, an arm of the Ecuadorian government, is immune from the jurisdiction of the United States courts. We therefore REMAND with instructions to dismiss.

I. BACKGROUND

Plaintiff/appellee Patricio V. Rodriguez is an Ecuadorian sailor who was injured on October 3, 1989 while fighting a fire aboard the M/V Isla Salingo, an Ecuadorian-flagged vessel. The ship is wholly owned by the defendant/appellant Transportes Navieros Ecuatorianos ("Transnave" or "Ecuadorian Transnave"), a state naval entity of Ecuador. ¹ The plaintiff was injured during a voyage from Yokohama, Japan to Esmeraldes, Ecuador, when the ship was passing several hundred miles north-northwest of the Hawaiian Islands. The Isla Salingo changed course to call on the port in Honolulu, Hawaii, so that Rodriguez could receive medical aid. After returning to Ecuador, Rodriguez later served on another Transnave-owned ship. During one voyage he began having health problems again, and when the vessel called in the Port of Houston, he disembarked to receive further medical treatment.

Rodriguez filed suit in the 11th District Court of Harris County, Texas, in October 1990, claiming personal injury damages under the Jones Act ² and the general maritime laws of the United States. However, the petition named the wrong party as a defendant. Instead of explicitly identifying Transportes Navieros Ecuatorianos ("Ecuadorian Transnave"), Rodriguez mistakenly named as defendant an unrelated Florida corporation, Transnave, Inc. ("Florida Transnave"). However, the Ecuadorian Transnave was aware of the lawsuit because of prior discussions with plaintiff's counsel, and plaintiff's counsel had sent the Ecuadorian Transnave's counsel a copy of the petition, which identified the defendant "Transnave" as the owner of the Isla Salingo. Believing itself to be the true defendant, and concerned that the timetable for removal was running, the Ecuadorian Transnave filed a notice of removal on November 7, 1990, in the U.S. District Court for the Southern District of Texas. The case was removed to federal court under 28 U.S.C. § 1441(d), the removal provision applicable to civil actions brought against a foreign state as defined in the Foreign Sovereign Immunities Act ("FSIA"). The Florida corporation Transnave, Inc. was eventually dismissed by joint motion of the parties and is not a party to this appeal.

For about two years, Transnave and Rodriguez engaged in pretrial discovery and various non-dispositive motions. In its first answer to the plaintiff's complaint, and in all amended answers, Transnave asserted the defense of sovereign immunity under the FSIA. On November 16, 1992, Transnave filed a motion to dismiss on the basis of sovereign immunity. The district court denied the motion, finding that Transnave had implicitly waived its sovereign immunity, 810 F.Supp. 194. ³

The district court ordered a stay of proceedings during this interlocutory appeal. ⁴

II. ANALYSIS

Appellant Transnave raises two issues, claiming that the trial court erred by (1) denying Transnave's motion to dismiss on the basis of foreign sovereign immunity, and (2) denying Transnave's alternative motion to dismiss on the basis of forum non conveniens.

A. Implied Waiver of Foreign Sovereign Immunity

The Foreign Sovereign Immunities Act sets forth "the sole and exclusive standards to be used" to resolve all sovereign immunity issues raised in federal and state courts. ⁵ It provides that "a foreign state shall be immune from the jurisdiction of the courts of the United States and of the States except as provided in [enumerated exceptions.]" 28 U.S.C. § 1604. One of the exceptions to immunity is "in any case ... in which the foreign state has waived its immunity either explicitly or by implication." 28 U.S.C. § 1605(a)(1).

Whether sovereign immunity exists is a question of law which this Court reviews de novo. Stena Rederi AB v. Comision de Contratos del Comite, 923 F.2d 380 (5th Cir.1991). There are no disputed factual issues regarding Transnave's claim of sovereign immunity.

In this case, plaintiff/appellee Rodriguez has chosen to rely solely on the implied waiver exception. ⁶ Therefore, we do not decide in this opinion whether any of the other exceptions to sovereign immunity listed in 28 U.S.C. §§ 1605-07 would apply on these facts.

The legislative history of the FSIA states that implicit waivers are ordinarily found in three situations: (1) a foreign state agrees to arbitration in another country; (2) the foreign state agrees that a contract is governed by the laws of a particular country; or (3) the state files a responsive pleading without raising the immunity defense. H.REP. NO. 1487, 94TH CONG.2D SESS. 18, reprinted in 1976 U.S.C.C.A.N. 6604, 6617; see also Arriba, 962 F.2d at 539 & n. 22. None of these situations is present here. Since the FSIA became law, courts have been reluctant to stray beyond the three examples given in the legislative history when considering claims that a nation has explicitly waived its defense of sovereign immunity. Frolova v. Union of Soviet Socialist Republics, 761 F.2d 370, 377 (7th Cir.1985). The implicit waiver clause of section 1605(a)(1) has therefore been narrowly construed; courts rarely find that a nation has waived its sovereign immunity without strong evidence that this is what the foreign state intended. Id. at 377.

The decision of the district court to deny Transnave's motion to dismiss seems to have been motivated by three separate rationales: (1) Transnave's "voluntary appearance" in a lawsuit in which it had not been formally served or sued, (2) the act of removal to federal court, and (3) Transnave's participation in trial preparations for two years before filing a motion to dismiss. In its opinion on January 6, 1993, the district court stated:

"Transnave's assertion that this Court has jurisdiction and Transnave's voluntary actions to enter an appearance, to claim the role of defendant, and to remove the case to this Court for trial before this Court, constitute a waiver.... Such assertive action by Defendant implies a waiver of immunity that is at least the equivalent of omitting an assertion of immunity in a responsive pleading."

Later in its opinion, the court added:

"The fact that foreign sovereign immunity is recited as a defense in an answer to Plaintiff's complaint, if not urged to the Court in a timely fashion by a motion to dismiss, hardly seems enough.... If Transnave did not waive by implication any immunity when it first voluntarily entered an appearance and admitted this Court's jurisdiction in its Notice of Removal, the Court finds that its subsequent participation in discovery and preparations for trial in this Court for over two years, without first urging by motion a claim of foreign sovereign immunity, served by implication to waive any immunity."

We will address each of the district court's rationales.

1. "Voluntary Appearance"

The trial court concluded that Transnave was not a named defendant in plaintiff's original petition filed in the Texas state trial court, and thus its action in removing the case to federal court amounted to a voluntary appearance and a waiver of sovereign immunity. However, the petition used "Transnave" and "Transnave, Inc." interchangeably, and the suit was clearly directed at the entity who was the employer of plaintiff at the time of the accident and the owner and operator of the M/V Isla Salingo. Given that it was clearly the intended defendant, Transnave, the Ecuadorian entity, could not have reasonably decided to sit back and ignore the lawsuit, especially since it had actual notice of the suit ⁷ and it knew that but for the plaintiff's mistake concerning identity, the action would have been brought against it.

If Transnave had not acknowledged that it was the intended defendant by filing the notice of removal, Rodriguez could have amended its petition to bring in Transnave, even after the statute of limitations had expired. Schiavone v. Fortune, 477 U.S. 21, 29, 106 S.Ct. 2379, 2384, 91 L.Ed.2d 18 (1986); Barkins v. Int'l Inns, Inc., 825 F.2d 905, 907 (5th Cir.1987). Schiavone and its progeny hold that Federal Rule of Civil Procedure 15(c) allows a plaintiff to amend his pleadings to add a new party if, within the statute of limitations period, the intended (but not originally sued) defendant (1) had received notice of the suit and (2) knew or should have known that, but for a mistake concerning the identity of the proper party, the action would have been brought against it. Schiavone, 477 U.S. at 28, 106 S.Ct. at 2383; Barkins, 825 F.2d at 906-07.

In Barkins, this Circuit expressed little sympathy for a corporation that was aware of the plaintiff's lawsuit and knew that it was the proper defendant, but did not respond to the suit or point out plaintiff's mistake. "This Court will not allow International Inns to 'sandbag' its opponent by waiting until the expiration of the limitations period to point out an error recognizable well before." Barkins, 825 F.2d at 907.

Transnave knew that it would have been brought into the lawsuit eventually whether it took action or not. It was already in contact with plaintiff's counsel and had actual notice of the suit. It took a purely defensive action to...