Abrams v. Societe Nationale Des Chemins, No. CIV.A.00-CV-5326(DGT).

CourtUnited States District Courts. 2nd Circuit. United States District Court (Eastern District of New York)
Writing for the CourtTrager
Citation175 F.Supp.2d 423
Docket NumberNo. CIV.A.00-CV-5326(DGT).
Decision Date05 November 2001
PartiesRaymonde ABRAMS, et al., Plaintiffs, v. SOCIÉTÉ NATIONALE DES CHEMINS DE FER FRANÇAIS, Defendant.
175 F.Supp.2d 423
Raymonde ABRAMS, et al., Plaintiffs,
v.
SOCIÉTÉ NATIONALE DES CHEMINS DE FER FRANÇAIS, Defendant.
No. CIV.A.00-CV-5326(DGT).
United States District Court, E.D. New York.
November 5, 2001.

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Stephen T. Rodd, Abbey, Gardy & Squitieri, L.L.P., Harriet Tamen, Clifford James, Blair C. Fensterstock, Fensterstock & Partners, LLP, Richard H. Weisberg, Cardozo Law School, Lucille A. Roussin, New York City, for plaintiffs.

Mitchell A. Karlan, Gibson Dunn & Crutcher, New York City, for defendant.

MEMORANDUM AND ORDER

TRAGER, District Judge.


Plaintiffs, Holocaust survivors filing suit on behalf of themselves and on behalf of other Holocaust victims similarly situated, bring this action against the French national railroad company, the Société Nationale Des Chemins De Fer Français ("SNCF"), claiming violations of customary international law and the law of nations arising out of alleged deportation of Jews and others from their homes in France to various Nazi death camps during World War II. Defendants now move to dismiss this action because of a lack of subject matter jurisdiction due to SNCF's entitlement to sovereign immunity. Plaintiffs have cross-moved for discovery on issues relevant to the sovereign immunity determination in the event that the court finds there to be factual issues that need to be resolved prior to ruling on SNCF's motion.

Background

Created in August 1937 by the unification of the five major regional rail networks of France and reorganized as a corporation by a decree issued on December 11, 1940, see Decl. of Corinne Hershkovitch ¶¶ 2-3, with its principal place of business in Paris, France, SNCF is currently an "établissement public industriel et commercial" formed by law no. 82-1153, promulgated by the French government on February 18, 1983. See Decl. of Stephan Haimo Supp. Mot. Dis. [hereinafter "Haimo Decl."] ¶ 2; Decl. of Frank Terrier Supp. Mot. Dis. [hereinafter "Terrier Decl."] ¶ 2. An "établissement public" is an instrumentality of the state which has separate legal existence and is charged with performing a public service. See Haimo Decl. ¶ 2. It has no shares and no shareholders, is wholly owned by the state of France, and is not run for profit. See id. ¶ 3; Terrier Decl. ¶¶ 4, 9. Rather, its President and members of the governing board are appointed by the French government. See Haimo Decl. ¶ 3. Other members of the governing board are consumers and employees of SNCF. See id.

The public service that SNCF performs is operating a monopoly over rail transport in France. See Haimo Decl. ¶ 3. It owns and operates France's national railway system, with its passenger and freight trains running chiefly in France and other European countries. See Terrier Decl. ¶ 3. Pursuant to French law, the state supervises SNCF's administration of its services and financial matters and exercises

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ultimate control over its operations. See id. ¶ 6.

Discussion
(1)

The positions of the parties can be summarized fairly succinctly. SNCF argues that this court lacks subject matter jurisdiction over plaintiffs' claims under the Foreign Sovereign Immunities Act ("FSIA"). Alternately, if the FSIA does not apply, SNCF would have been immune from suit under sovereign immunity law as it existed prior to the effective date of the FSIA. Plaintiffs counter that the FSIA does not apply to conduct occurring prior to 1952 and that under pre-1952 law, SNCF would not have been immune from suit.

To establish a bit of necessary background, a brief history of the purposes behind the enactment of the FSIA is in order. Before 1952, foreign sovereigns were entitled to assert absolute immunity from suit in United States courts. See Verlinden B.V. v. Central Bank of Nigeria, 461 U.S. 480, 486, 103 S.Ct. 1962, 1967, 76 L.Ed.2d 81 (1983). "But in the so-called Tate Letter, the State Department announced its adoption of the `restrictive' theory of foreign sovereign immunity. Under this theory, immunity is confined to suits involving the foreign sovereign's public acts, and does not extend to cases arising out of a foreign state's strictly commercial acts." Id. at 487, 103 S.Ct. at 1968.

The restrictive theory was not initially enacted into law, however, and its application proved troublesome. As in the past, initial responsibility for deciding questions of sovereign immunity fell primarily upon the Executive acting through the State Department, and the courts abided by "suggestions of immunity" from the State Department. As a consequence, foreign nations often placed diplomatic pressure on the State Department in seeking immunity. On occasion, political considerations led to suggestions of immunity in cases where immunity would not have been available under the restrictive theory.

Id.

"In 1976, Congress passed the Foreign Sovereign Immunities Act in order to free the Government from the case-by-case diplomatic pressures, to clarify the governing standards, and to `assur[e] litigants that ... decisions are made on purely legal grounds and under procedures that insure due process.'" Id. at 488, 103 S.Ct. at 1968 (citation omitted).

For the most part, the Act codifies, as a matter of federal law, the restrictive theory of sovereign immunity. A foreign state is normally immune from the jurisdiction of federal and state courts, 28 U.S.C. § 1604, subject to a set of exceptions specified in §§ 1605 and 1607. Those exceptions include actions in which the foreign state has explicitly or impliedly waived its immunity, § 1605(a)(1), and actions based upon commercial activities of the foreign sovereign carried on in the United States or causing a direct effect in the United States, § 1605(a)(2). When one of these or the other specified exceptions applies, "the foreign state shall be liable in the same manner and to the same extent as a private individual under like circumstances," 28 U.S.C. § 1606.

Id. at 488-489, 103 S.Ct. at 1968-69.

Wright, Miller and Cooper, in their multi-volume "Federal Practice and Procedure" treatise, expand upon these themes:

The Foreign Sovereign Immunities Act (FSIA) of 1976 was designed to provide a set of comprehensive regulations governing access to the federal and state courts in this country for plaintiffs

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asserting claims against foreign states and instrumentalities thereof. The enactment of this legislation responded to the reality that increased contacts between American citizens and companies on the one hand, and foreign states and entities owned by foreign states on the other, as well as a constantly expanding range of governmental activities, had created the need for judicial fora in this country to resolve disputes arising out of these activities. In addition, the Act addressed the uncertainties of the then current American judicial practices and Department of State policies with regard to a foreign nation's sovereign immunity.

According to the House Report, the statute was designed to accomplish four objectives. First, the Immunities Act codified the so-called "restrictive" principle of sovereign immunity, as recognized in international law. Under this doctrine, the immunity of a foreign state in the courts of the United States is "restricted" to claims involving the foreign state's public acts and does not extend to suits based on its commercial or private conduct. This principle was adopted by the Department of State in 1952 and has been followed by American courts in numerous cases and by the executive branch of the national government ever since. Moreover, the principle is regularly applied in suits against the United States in foreign courts.

Second, the 1976 statute tried to insure that this restrictive principle of sovereign immunity is applied uniformly in litigation before United States courts. Prior to the Act, when a foreign state wished to assert immunity, it often requested the Department of State to make a formal suggestion of immunity to the court. Although the State Department espoused the restrictive principle of immunity, the foreign state might have attempted to bring diplomatic influences to bear upon the Department's sovereign-immunity determination. A principal purpose of the Immunities Act was to transfer the immunity determination from the executive branch to the judicial branch of the national government, thereby reducing the issue's foreign policy implications and assuring litigants that these often crucial decisions are made on purely legal grounds and under procedures that insure due process and uniformity of application. In this regard, the statute brought American immunity practice into conformity with the practice of almost every other country in the world.

Third, the Foreign Sovereign Immunities Act provides a formal procedure for making service of process upon, giving notice to, and obtaining in personam jurisdiction over a foreign state or one of its instrumentalities in an action in a United States court. The existence of this procedure renders unnecessary the former practice of seizing and attaching the property of a foreign government for the purpose of obtaining personal jurisdiction over it in the United States.

Fourth, the statute purports to remedy, at least in part, the predicament of a plaintiff who has obtained a judgment against a foreign state. Under prior law, a foreign state enjoyed absolute immunity from execution, even in ordinary commercial litigation in which commercial assets were available in this country for satisfying this broad immunity. It conformed the execution-immunity rules more closely to the jurisdiction-immunity rules and provides the judgment creditor some remedy if, after a reasonable period, a foreign state or its enterprise fails to satisfy a judgment rendered against it.

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Wright, Miller & Cooper, 14A Federal Practice and Procedure: Jurisdiction 3d § 3662 (footnotes omitted).

The FSIA itself consists of both jurisdictional...

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4 practice notes
  • Abrams v. Societe Nationale Des Chemins, Docket No. 01-9442.
    • United States
    • U.S. Court of Appeals — Second Circuit
    • June 13, 2003
    ...foreign sovereign immunity, it was without jurisdiction to adjudicate them. Abrams v. Société Nationale des Chemins de Fer Francais, 175 F.Supp.2d 423, 428-29, 450 (E.D.N.Y.2001). On appeal, as in district court, plaintiffs urge that the FSIA does not apply to this case because it arises ou......
  • Fund v. Anglo Irish Bank Corp. Ltd. (f/K/A Anglo Irish Bank Corp. Plc), 11 Civ. 0955 (PGG)
    • United States
    • United States District Courts. 2nd Circuit. United States District Courts. 2nd Circuit. Southern District of New York
    • November 28, 2011
    ...as at the time the act on which th[e] suit is based took place." Similarly, Abrams v. Societe Nationale des Chemins de Fer Franptais, 175 F. Supp. 2d 423 (E.D.N.Y. 2001), aff'd, 389 F.3d 61 (2d Cir. 2004), provides no support for Plaintiffs' position. The defendant railroad was "wholly owne......
  • Strach v. Casino Windsor, No. 04-74197.
    • United States
    • United States District Courts. 6th Circuit. United States District Court (Eastern District of Michigan)
    • December 22, 2004
    ...in the United States' for the purposes of abrogating sovereign immunity."); Abrams v. Societe Nationale des Chemins de Fer Francais, 175 F.Supp.2d 423, 430 (E.D.N.Y.2001) ("the law to date would not consider such effects as within the parameters of the commercial activity"); Harris v. VAO I......
  • Abrams v. Societe Nationale Des Chemins, Docket No. 01-9442.
    • United States
    • U.S. Court of Appeals — Second Circuit
    • June 13, 2003
    ...none of the Act's exceptions for foreign sovereign immunity applied. Abrams v. Société Nationale des Page 63 Chemins de Fer Francais, 175 F.Supp.2d 423, 433 (E.D.N.Y.2001). Plaintiffs appealed to this Court, contending that the application of the Act to their claims is impermissibly retroac......
4 cases
  • Abrams v. Societe Nationale Des Chemins, Docket No. 01-9442.
    • United States
    • U.S. Court of Appeals — Second Circuit
    • June 13, 2003
    ...foreign sovereign immunity, it was without jurisdiction to adjudicate them. Abrams v. Société Nationale des Chemins de Fer Francais, 175 F.Supp.2d 423, 428-29, 450 (E.D.N.Y.2001). On appeal, as in district court, plaintiffs urge that the FSIA does not apply to this case because it arises ou......
  • Fund v. Anglo Irish Bank Corp. Ltd. (f/K/A Anglo Irish Bank Corp. Plc), 11 Civ. 0955 (PGG)
    • United States
    • United States District Courts. 2nd Circuit. United States District Courts. 2nd Circuit. Southern District of New York
    • November 28, 2011
    ...as at the time the act on which th[e] suit is based took place." Similarly, Abrams v. Societe Nationale des Chemins de Fer Franptais, 175 F. Supp. 2d 423 (E.D.N.Y. 2001), aff'd, 389 F.3d 61 (2d Cir. 2004), provides no support for Plaintiffs' position. The defendant railroad was "wholly owne......
  • Strach v. Casino Windsor, No. 04-74197.
    • United States
    • United States District Courts. 6th Circuit. United States District Court (Eastern District of Michigan)
    • December 22, 2004
    ...in the United States' for the purposes of abrogating sovereign immunity."); Abrams v. Societe Nationale des Chemins de Fer Francais, 175 F.Supp.2d 423, 430 (E.D.N.Y.2001) ("the law to date would not consider such effects as within the parameters of the commercial activity"); Harris v. VAO I......
  • Abrams v. Societe Nationale Des Chemins, Docket No. 01-9442.
    • United States
    • U.S. Court of Appeals — Second Circuit
    • June 13, 2003
    ...none of the Act's exceptions for foreign sovereign immunity applied. Abrams v. Société Nationale des Page 63 Chemins de Fer Francais, 175 F.Supp.2d 423, 433 (E.D.N.Y.2001). Plaintiffs appealed to this Court, contending that the application of the Act to their claims is impermissibly retroac......

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