Coyle v. P.T. Garuda Indonesia, No. 01-35784.

• Court: United States Courts of Appeals. United States Court of Appeals (9th Circuit)
• Writing for the Court: O'Scannlain
• Citation: 363 F.3d 979
• Parties: Joyce E. COYLE, as Personal Representative of the Estate of Fritz G. Baden, deceased and as Personal Representative of the Estate of Djoeminah Baden, deceased, Plaintiff-Appellee, v. P.T. GARUDA INDONESIA, an Indonesian Corporation, dba Garuda Indonesia Airlines, Defendant-Appellant.
• Docket Number: No. 01-35784.
• Decision Date: 12 April 2004

363 F.3d 979 Joyce E. COYLE, as Personal Representative of the Estate of Fritz G. Baden, deceased and as Personal Representative of the Estate of Djoeminah Baden, deceased, Plaintiff-Appellee,
v.
P.T. GARUDA INDONESIA, an Indonesian Corporation, dba Garuda Indonesia Airlines, Defendant-Appellant. No. 01-35784. United States Court of Appeals, Ninth Circuit. Argued and Submitted March 4, 2003. Filed April 12, 2004.

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Alan D. Reitzfeld (argued), James V. Marks, and Joanna L. Geraghty, Holland & Knight LLP, New York, New York, and Jonathan M. Hoffman and Douglas Pickett, Martin, Bischoff, Templeton, Langslet & Hoffman LLP, Portland Oregon, for the defendant-appellant.

Floyd A. Wisner (argued), Nolan Law Group, Chicago, Illinois, and Susan R. Swanson, Esq., Portland, Oregon, for the plaintiff-appellee.

Appeal from the United States District Court for the District of Oregon; Robert E. Jones, District Judge, Presiding.

Before: DIARMUID F. O'SCANNLAIN, FERDINAND F. FERNANDEZ, and RAYMOND C. FISHER, Circuit Judges.

O'SCANNLAIN, Circuit Judge:

We must decide whether the federal courts have jurisdiction to hear this wrongful death claim arising out of a plane crash in Indonesia that resulted in the deaths of plaintiff's parents.

I

Fritz G. and Djoeminah Baden, residents of Lake Oswego, Oregon, decided to visit Indonesia in September 1997. To that end, the Badens contacted Astra World Express, Inc. ("Astra"), a Portland, Oregon travel agency, and booked the following itinerary:

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                Date (1997) Flight Carrier
                ----------------------------------------------------------------------------------
                September 6 Portland to Seattle Alaska/Horizon Airlines
                ----------------------------------------------------------------------------------
                September 7 Seattle to Taipei Eva Airways
                ----------------------------------------------------------------------------------
                September 8 Taipei to Jakarta Eva Airways
                ----------------------------------------------------------------------------------
                September 30 Jakarta to Singapore Garuda Indonesia Airlines
                ----------------------------------------------------------------------------------
                September 30 Singapore to Taipei Eva Airways
                ----------------------------------------------------------------------------------
                September 30 Taipei to Seattle Eva Airways
                ----------------------------------------------------------------------------------
                September 30 Seattle to Portland Alaska/Horizon Airlines
                ----------------------------------------------------------------------------------
                

On or about September 25, 1997, while in Indonesia, the Badens purchased two tickets in Jakarta for an open-ended round trip from Jakarta to Medan¹ aboard Garuda Indonesia Airlines ("Garuda")² Flight 152, leaving Jakarta at 11:30 a.m. on September 26. The Badens paid for the tickets in Indonesian Rupiah, and the tickets were clearly labeled "DOMESTIK." Flying through thick smoke generated by regional forest fires, the Airbus A300 B4 carrying the Badens dropped well below normal altitude on its approach into Medan and crashed into the side of a mountain. None of the 232 passengers and crew on board survived the crash, making it the worst air disaster in Indonesian history.³

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On September 22, 1999, Joyce Coyle, one of the Badens' three children, filed a lawsuit against Garuda in the United States District Court for the District of Oregon, alleging both negligent and intentional wrongful death claims under the Convention for the Unification of Certain Rules Relating to International Transportation by Air — more commonly known as the Warsaw Convention. 49 U.S.C. § 40105 note (2003).⁴ Anticipating that Garuda would invoke Indonesia's sovereign immunity under the Foreign Sovereign Immunities Act ("FSIA"), 28 U.S.C. § 1604 (2003), and thereby attempt to deprive the federal courts of subject matter jurisdiction over her action,⁵ Coyle argued that two exceptions to FSIA's grant of sovereign immunity, 28 U.S.C. §§ 1605(a)(1) & 1605(a)(2), applied to allow the federal courts to entertain her suit. The former FSIA subsection denies immunity to sovereigns that have explicitly or implicitly waived it, while the latter denies immunity to foreign sovereigns in actions"based upon a commercial activity carried on in the United States by the foreign state ... or upon an act outside the territory of the United States in connection with a commercial activity of the foreign state elsewhere and that act causes a direct effect in the United States." Id. Coyle argued first that Garuda's foreign air carrier operating permit⁶ in place at the time of the accident included an express waiver of its sovereign immunity for actions arising under an international treaty, and second that Garuda was subject to suit in federal court based upon its sale of tickets in the United States for the Coyle's international transportation, of which Flight 152 was allegedly a part.

Predictably, Garuda moved to dismiss Coyle's lawsuit pursuant to Fed.R.Civ.P. 12(b)(1)-(3) or, alternatively, for summary judgment under Fed.R.Civ.P. 56. The airline contended that: (1) the district court

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lacked subject matter jurisdiction because Flight 152 was "purely Indonesian domestic transportation," and therefore not within the ambit of the Warsaw Convention; (2) the district court lacked personal jurisdiction over Garuda; (3) Oregon was an improper venue; and (4) Oregon was an inconvenient forum.

On April 30, 2001, Magistrate Judge John Jelderks issued his "Findings and Recommendation" in which he concluded that Garuda had waived its entitlement to Indonesia's sovereign immunity. This conclusion was based upon his assessment that the Badens' ill-fated Jakarta-Medan flight, while itself entirely domestic, was nevertheless "one leg of an international journey" and therefore subject to the terms of the Warsaw Convention. Accordingly, he concluded that Coyle's lawsuit fell within the exception provided in 28 U.S.C. § 1605(a)(1), and thus could not be barred by an assertion of sovereign immunity by Garuda. In addition, he concluded that personal jurisdiction over Garuda was proper and that venue lay in federal district court in Oregon.

The district court adopted the magistrate judge's report on June 28, 2001, and scheduled the case for trial. Garuda filed this interlocutory appeal, challenging the court's determination that the Warsaw Convention applied to the flight along with its determinations regarding personal jurisdiction, venue, and forum non conveniens. Prior to oral argument, we indicated in an unpublished order that the district court's decisions with respect to personal jurisdiction, venue, and forum non conveniens were non-appealable at this stage. Therefore, only the issue of Garuda's immunity from suit — and thus, of our subject matter jurisdiction over Coyle's action — remains for decision here.

II

We first consider whether Indonesia has waived Garuda's entitlement to sovereign immunity "either explicitly or by implication" under 28 U.S.C. § 1605(a)(1).⁷

A

Coyle contends that Garuda's possession of a U.S. Department of Transportation (USDOT) foreign air carrier operating permit at the time of the accident constituted a waiver of foreign sovereign immunity. In relevant part, that permit provided:

(3) The holder agrees that operations under this permit constitute a waiver of sovereign immunity for the purposes of 28 U.S.C. § 1605(a), but only with respect to or proceedings instituted against it in any Court or Tribunal in the United States that are:

(a) Based upon its operations in international air transportation that, according to the contract of carriage, include a point in the United States as a point of origin, point of destination, or agreed stopping place, or for which the contract of carriage was purchased in the United States; or

(b) Based upon any claim under any international agreement or treaty cognizable in any Court or other Tribunal of the United States.

In this condition, the term "international transportation" means "international transportation as defined by the Warsaw Convention," except that all States shall

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be considered to be High Contracting Parties for the purpose of this definition.

Garuda responds that its permit's waiver does not apply to the present case. Specifically, the airline argues that the first paragraph of Section 3 of the permit — which states that "[t]he holder agrees that operations under this permit constitute a waiver of sovereign immunity" for certain enumerated claims — affirmatively excludes Flight 152 because, as a trip between two foreign cities wholly within the borders of Indonesia, it did not constitute an "operation[] under this permit." We respectfully disagree.

The enumerated claims for which acceptance of its permit constituted a waiver of sovereign immunity are defined as those "(a) Based on its operations in international air transportation that, according to the contract of carriage, include a point in the United States ..." and those "(b) Based upon a claim under any international agreement." If, as Garuda contends, its sovereign immunity could be waived only for flights "between a place in the United States and a place outside the United States," the first of the above cited clauses would be rendered surplusage, and the second of the above cited clauses would spur an irreconcilable interclausal contradiction: As will soon become clear, purely domestic flights within a foreign nation can — at least in certain circumstances-fall within the coverage of the Warsaw Convention. See Warsaw Convention Article 1(3).

The lone case Garuda cites in support of its reading of the permit, Barkanic v. General Administration of Civil Aviation, 822 F.2d 11 (2d Cir.1987), does little to advance its argument. Faced with a...