Bailey v. Grand Trunk Lines New England

• Decision Date: 19 November 1986
• Docket Number: No. 454,D,454
• Citation: 805 F.2d 1097
• Parties: Eileen BAILEY, Plaintiff-Appellant, v. GRAND TRUNK LINES NEW ENGLAND, Canadian National Railway, Midline Division, St. Lawrence Region, Defendants-Appellees. ocket 85-7583.
• Court: U.S. Court of Appeals — Second Circuit

Page 1097

805 F.2d 1097

Eileen BAILEY, Plaintiff-Appellant, v. GRAND TRUNK LINES NEW ENGLAND, Canadian National Railway Midline Division, St. Lawrence Region, Defendants-Appellees.

No. 454, Docket 85-7583.

United States Court of Appeals Second Circuit.

Argued Nov. 19, 1985.

Decided Nov. 19, 1986.

John F. Collins, Buffalo, N.Y. (Collins, Collins & DiNardo, Buffalo, N.Y., Lawrence J. Vilardo, Damon & Morey, Buffalo, N.Y., of counsel), for plaintiff-appellant.

Robert B. Hemley, Burlington, Vt. Dennis R. Pearson, Burlington, Vt., Gravel and Shea, Burlington, Vt., of counsel), for defendant-appellee Canadian Nat. Ry.

Before VAN GRAAFEILAND, NEWMAN and MINER, Circuit Judges.

MINER, Circuit Judge:

Eileen Bailey, administratrix of the estate of Jeffrey Bailey ("Bailey"), appeals from a judgment of the United States District Court for the District of Vermont (Billings, J.) finding in favor of defendant Canadian National Railway ("CNR") in an action brought under the Federal Employers Liability Act ("FELA"), 45 U.S.C. Secs. 51-60 (1982). Appellant also challenges an earlier ruling of the district court that, pursuant to the Foreign Sovereign Immunities Act ("FSIA"), 28 U.S.C. Secs. 1602-1611 (1982), and 28 U.S.C. Sec. 1330(a) (1982), struck her demand for a jury trial. See Bailey v. Grand Trunk Lines New England, 609 F.Supp. 48 (D.Vt.1984). We affirm Judge Billings' decision with respect to the jury trial issue, but vacate the judgment as to liability and remand for further proceedings.

I. BACKGROUND

On June 3, 1983, Bailey was operating a CNR railroad track brush cutter on a section of New Hampshire railroad track while his partner, Ronald Riendeau, drove in his truck on a highway that ran parallel to the track. Although a CNR regulation required that all operations involving track machines proceed with at least two men "working together," the employees' practice was to have one man operate the machine on the track while his partner traveled on the highway to "flag" him at the crossings. This system was employed despite the fact that portions of the track were not always visible from the highway. ¹

The June 3rd work assignment called for Bailey and Riendeau to cover approximately fifty miles of track, from Berlin, New Hampshire to Island Pond, Vermont. By the time Riendeau arrived at the first crossing in West Milan, New Hampshire, he noticed that Bailey already had been flagged across the intersection. Riendeau thus drove to the second crossing in Stark, New Hampshire, where he waited a short time for Bailey to arrive. Believing that Bailey again had preceded him, Riendeau drove ahead to the third crossing in Groveton, New Hampshire. From Groveton, Riendeau returned along the highway to West Milan to look for Bailey. Since he could not see Bailey from the highway, he continued on to Island Pond. Arriving there at approximately 10:30 A.M., Riendeau attempted several times to contact Bailey by radio. Bailey, however, had derailed at approximately 9:30 A.M., and therefore was unable to respond. It is significant to note that although Bailey's derailment occurred at a point where the track was not visible from the highway, there existed alongside that portion of the route a smaller road from which Riendeau's vision of the track would not have been obscured.

The evidence at trial established that railroad employees commenced a search for Bailey somewhere between 12:15 and 12:30 P.M., nearly three hours after the accident. A search party that had proceeded along the small road adjacent to the track discovered Bailey between the first and second crossings at approximately 12:45 P.M. It was not until 2:00 P.M., however, that the rescuers were able to extricate Bailey and transport him to the hospital. The "crush injury" that Bailey sustained during the approximately four and one-half hours he was pinned underneath the brush cutter resulted in his death four days later.

Eileen Bailey commenced suit against CNR under the FELA, claiming that the railroad was liable to Bailey's estate for negligently causing his death. ² Although a jury trial was requested, CNR moved to strike the jury demand, arguing that the FSIA precluded a trial by jury against an instrumentality of a foreign state. See 28 U.S.C. Secs. 1330, 1603. Judge Billings granted CNR's motion, 609 F.Supp. at 52, and the case then was tried to the court. In an unreported decision dated June 28, 1985, Judge Billings rejected each of appellant's claims and found that CNR had not been negligent.

For the reasons set forth below, we affirm the district court's order denying appellant a jury trial, vacate the court's finding that CNR was not negligent, and remand for further proceedings.

II. DISCUSSION

A. Jury Trial

In striking plaintiff's demand for a jury, the district court properly determined that the FSIA provides the exclusive source of federal jurisdiction in actions against foreign sovereigns or their instrumentalities. See 28 U.S.C. Secs. 1330(a), 1602-1611; Ruggiero v. Compania Peruana de Vapores, 639 F.2d 872 (2d Cir.1981). Since that statutory scheme expressly forecloses the right to a jury trial, we need only determine whether Judge Billings correctly found CNR to be an instrumentality of Canada.

The FSIA defines an "agency or instrumentality of a foreign state" as any 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 as defined in section 1332(c) and (d) of this title, nor created under the laws of any third country.

28 U.S.C. Sec. 1603(b). Appellant concedes that CNR satisfies the first and second elements of section 1603(b), but maintains that CNR is a citizen of a state of the United States, and therefore not an instrumentality of Canada, see 28 U.S.C. Sec. 1603(b)(3). We disagree.

The citizenship of CNR must be determined in accordance with 28 U.S.C. Sec. 1332(c), which provides that "a corporation shall be deemed a citizen of any State by which it has been incorporated and of the State where it has its principal place of business...." It is undisputed that CNR is a Canadian corporation. Although it is undisputed also that CNR maintains its worldwide principal place of business in Canada, appellant urges that we look instead to CNR's principal place of business within the United States. We decline to do so. Such an approach ignores the plain meaning of the concept of a principal place of business and is at odds with the overwhelming consensus of authority that a corporation may have only one principal place of business. E.g., United States Fidelity & Guaranty Co. v. DiMassa, 561 F.Supp. 348, 351 n. 8 (E.D.Pa.1983), aff'd mem., 734 F.2d 3 (3d Cir.1984); Woodbridge Plastics, Inc. v. Borden, Inc., 473 F.Supp. 218, 223 (S.D.N.Y.), aff'd mem., 614 F.2d 1293 (2d Cir.1979); 13B C. Wright, A. Miller & E. Cooper, Federal Practice and Procedure Sec. 3624, at 611 (1984); 1 J. Moore, Moore's Federal Practice p 0.77[3.-1], at 717.60 (1986). Those courts considering this question consistently have held that an alien corporation's worldwide principal place of business, and not its principal place of business within the United States, is controlling. E.g., Arab International Bank & Trust Co. v. National Westminster Bank Ltd., 463 F.Supp. 1145, 1147 (S.D.N.Y.1979); Eisenberg v. Commercial Union Assurance Co., 189 F.Supp. 500, 502 (S.D.N.Y.1960); see, e.g., Salomon Englander y CIA, Ltda v. Israel Discount Bank, Ltd., 494 F.Supp. 914, 916-18 (S.D.N.Y.1980).

Since CNR is a Canadian corporation with its principal place of business in Canada, it is not a citizen of a state of the United States and therefore is entitled to the protections afforded by the FSIA.

Having concluded that application of the FSIA required this action to be tried to the court, we need address only briefly appellant's remaining jury trial claims. First, we reject appellant's contention that the FELA entitled her to a trial by jury. The law is clear that in actions brought against foreign states, the FSIA displaces certain rights which otherwise inhere in a plaintiff's statutory or common law cause of action. ³ More specifically, we expressly have held that the FSIA strips a plaintiff of an otherwise valid entitlement to a jury trial. Ruggiero, 639 F.2d at 875-78. Other circuits uniformly have reached the same conclusion. Arango v. Guzman Travel Advisors, 761 F.2d 1527, 1532-33 (11th Cir.), cert. denied, --- U.S. ----, 106 S.Ct. 408, 88 L.Ed.2d 359 (1985); Goar v. Compania Peruana de Vapores, 688 F.2d 417, 423 (5th Cir.1982); Rex v. Cia. Peruana de Vapores, S.A., 660 F.2d 61, 63-64 (3d Cir.1981), cert. denied, 456 U.S. 926, 102 S.Ct. 1971, 72 L.Ed.2d 441 (1982); Williams v. Shipping Corp. of India, 653 F.2d 875, 880-81 (4th Cir.1981), cert. denied, 455 U.S. 982, 102 S.Ct. 1490, 71 L.Ed.2d 691 (1982); see McKeel v. Islamic Republic of Iran, 722 F.2d 582 (9th Cir.1983), cert. denied, 469 U.S. 880, 105 S.Ct. 243, 83 L.Ed.2d 182 (1984).

Second, we disagree with appellant's claim that CNR has waived its right to a nonjury trial pursuant to 28 U.S.C. Sec. 1605(a)(1) ("A foreign state shall not be immune from the jurisdiction of courts of the United States ... in any case ... in which the foreign state has waived its immunity either explicitly or by implication...."). Although CNR has waived its immunity from suit in the United States by virture of its commercial activities, see 28 U.S.C. Sec. 1605(a)(2), it remains amenable to suit in our courts only to the extent permitted by, and in accordance with the express terms of, the FSIA.

Finally, there is no merit to appellant's contention that the FSIA's prohibition of jury trials offends her rights under the seventh amendment. Since suits against foreign...