Export Group v. Reef Industries, Inc., No. 93-56022

CourtUnited States Courts of Appeals. United States Court of Appeals (9th Circuit)
Writing for the CourtD.W. NELSON
Citation54 F.3d 1466
PartiesThe EXPORT GROUP; Emilio Figueroa; Jack Andrews, Plaintiffs-Appellants, v. REEF INDUSTRIES, INC., Defendant, and Mexican Coffee Institute, Defendant-Appellee.
Docket NumberNo. 93-56022
Decision Date10 February 1995

Page 1466

54 F.3d 1466
The EXPORT GROUP; Emilio Figueroa; Jack Andrews,
Plaintiffs-Appellants,
v.
REEF INDUSTRIES, INC., Defendant,
and
Mexican Coffee Institute, Defendant-Appellee.
No. 93-56022.
United States Court of Appeals,
Ninth Circuit.
Submitted Feb. 10, 1995 *.
Decided May 22, 1995.

Page 1468

Emilio Figueroa, Irvine, CA, and Jack Andrews, Salt Lake City, UT, pro se for plaintiffs-appellants.

Charles M. Grant, Shearman & Sterling, Los Angeles, CA, for defendant-appellee Mexican Coffee Institute.

Appeal from the United States District Court for the Central District of California.

Before: BROWNING, D.W. NELSON, and HAWKINS, Circuit Judges.

D.W. NELSON, Circuit Judge:

Plaintiffs-appellants Emilio Figueroa, Jack Andrews, and The Export Group (collectively "Export Group") appeal from the district court's grant of relief from a default judgment it had entered against defendant-appellee, the Mexican Coffee Institute or Instituto Mexicano del Cafe ("INMECAFE"), in Export Group's diversity action alleging, inter alia, interference with contract rights. The district court granted INMECAFE's motion to set aside the default judgment on the ground that the judgment was void, Fed.R.Civ.P. 60(b)(4), because the district court concluded that it lacked subject matter jurisdiction over the interference with contract rights claim under the Foreign Sovereign Immunity Act ("FSIA"), 28 U.S.C. Sec. 1602 et seq. We have jurisdiction, 28 U.S.C. Sec. 1291, and we reverse and remand.

FACTUAL AND PROCEDURAL BACKGROUND

Because of the procedural posture of this case, the parties have not litigated the facts, which are disputed. Nevertheless, in deciding whether the district court appropriately determined that it lacked subject matter jurisdiction, we accept the facts alleged in the complaint as true. Siderman de Blake v. Republic of Argentina, 965 F.2d 699, 706 (9th Cir.1992) (citing Gerritsen v. de la Madrid Hurtado, 819 F.2d 1511, 1513 (9th Cir.1987)), cert. denied, --- U.S. ----, 113 S.Ct. 1812, 123 L.Ed.2d 444 (1993); Gregorian v. Izvestia, 871 F.2d 1515, 1528 (9th Cir.) (stating that "[w]e do not here resolve [a] dispute over the jurisdictional facts"), cert. denied, 493 U.S. 891, 110 S.Ct. 237, 107 L.Ed.2d 188 (1989).

The Export Group is a general partnership 1 engaged in international trade, specializing in representing North American companies on an exclusive basis in the sale of commercial and industrial products to agencies of the Mexican government. In October 1981, the Export Group reached an agreement with a commercial supplier, Reef Industries ("Reef"), whereby the Export Group would serve as Reef's exclusive representative in bidding on a contract from a Mexican government agency, Almacenes Nacionales De Desposito, S.A. ("ANDSA"), for 400 tarpaulins to cover grain storage bins. While the Export Group's bid to sell the Reef tarps was under consideration by ANDSA, a corrupt ANDSA employee named Alicia Martinez divulged the details of the Export Group's bid to Javier Mora, then the international director of INMECAFE, as part of an alleged conspiracy to prepare a competing bid. Mora, acting as an authorized agent of INMECAFE, submitted a bid to sell Reef tarps to ANDSA under another company's name, NEUERO. As a result, ANDSA awarded the contract to NEUERO, and the Export Group suffered a loss of approximately two million dollars in profits anticipated from its exclusive representation agreement with Reef.

The Export Group filed suit against NEUERO and Reef in Orange County Superior Court on June 24, 1983. Asserting diversity jurisdiction, defendants removed the action to the district court for the Central District of California. On November 19, 1984, the Export Group filed its first amended complaint adding INMECAFE, ANDSA, Martinez, and Mora as defendants and alleging causes of action for interference with prospective business advantage, interference

Page 1469

with business and contractual relations, negligent interference with prospective business advantage, inducing breach of contract, and conspiracy. After INMECAFE, ANDSA, and Martinez failed to respond to personal service, defaults were entered against them on May 22, 1985. On September 5, 1986, the Consul of the United Mexican States filed a motion on behalf of INMECAFE to set aside the latter's default based on lack of personal service and lack of subject matter jurisdiction, under the FSIA, over an instrumentality of the Mexican Government. The district court denied the motion on April 21, 1987.

After the Export Group settled its claims against defendants Mora, NEUERO, ANDSA and Reef, these defendants were dismissed. On May 5, 1991, the Export Group applied for default judgments against INMECAFE and Martinez, and these judgments were entered on July 8, 1991, awarding the Export Group $2,032,795.49 plus costs. On June 4, 1991, INMECAFE filed a motion to set aside the default judgment on the grounds that the judgment was obtained through fraud, misrepresentation, or misconduct. See Fed.R.Civ.P. 60(b)(3). Alternatively, INMECAFE claimed that the judgment was void, see Fed.R.Civ.P. 60(b)(4), because the district court lacked subject matter jurisdiction under the FSIA. After oral argument, the district court granted INMECAFE's motion to set aside the default judgment previously entered as void, on the grounds that "this court lacks subject matter jurisdiction pursuant to the Foreign Sovereign Immunity Act, 28 U.S.C. Sec. 1605(a)(5)(B)." Accordingly, the district court, sua sponte, dismissed the action as to INMECAFE. The Export Group timely appealed from the district court's final judgment.

DISCUSSION

I. Standard of Review

Ordinarily, motions for relief from judgment pursuant to Federal Rules of Civil Procedure 60(b) are addressed to the sound discretion of the district court and will not be reversed absent some abuse of discretion. In re Roxford Foods, Inc., 12 F.3d 875, 879 (9th Cir.1993). We review de novo, however, a district court's ruling upon a Rule 60(b)(4) motion to set aside a judgment as void, because the question of the validity of a judgment is a legal one. Retail Clerks Union Joint Pension Trust v. Freedom Food Center, Inc., 938 F.2d 136, 137 (9th Cir.1991). Furthermore, the existence of subject matter jurisdiction under the FSIA is a question of law subject to de novo review. In re Estate of Ferdinand Marcos, Human Rights Litigation, 25 F.3d 1467, 1470 (9th Cir.1994), cert. denied, --- U.S. ----, 115 S.Ct. 934, 130 L.Ed.2d 879 (1995); Siderman de Blake, 965 F.2d at 706.

II. The Foreign Sovereign Immunity Act

A. The Structure and Language of the Act

The FSIA, codified at 28 U.S.C. Sec. 1330(a), 2 provides the "sole basis" for federal jurisdiction over the Export Group's claims against INMECAFE. Argentine Republic v. Amerada Hess Shipping Corp., 488 U.S. 428, 433-35 & n. 3, 109 S.Ct. 683, 687-89 & n. 3, 102 L.Ed.2d 818 (1989); Verlinden B.V. v. Central Bank of Nigeria, 461 U.S. 480, 489, 493, 103 S.Ct. 1962, 1971, 76 L.Ed.2d 81 (1983). The FSIA creates a statutory presumption that a foreign state and its instrumentalities are immune from suit unless one of the specific exceptions enumerated in sections 1605 through 1607 of the Act applies. 28 U.S.C. Sec. 1604. The Export Group claims that subject matter jurisdiction over their claim of interference with contract rights is conferred by the "commercial activity" exception to foreign sovereign immunity codified at 28 U.S.C. Sec. 1605(a)(2). Section 1605(a) provides in relevant part:

Page 1470

A foreign state shall not be immune from the jurisdiction of the courts of the United States or of the States in any case--

(2) in which the action is based

[i] upon a commercial activity carried on in the United States by the foreign state; or

[ii] upon an act performed in the United States in connection with a commercial activity of the foreign state elsewhere; or

[iii] 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 * * *

28 U.S.C. Sec. 1605(a)(2) (emphasis added). Elsewhere, the FSIA defines "commercial activity" as follows:

A "commercial activity" means either a regular course of commercial conduct or a particular commercial transaction or act. The commercial character of an activity shall be determined by reference to the nature of the course of conduct or particular transaction or act, rather than by reference to its purpose.

28 U.S.C. Sec. 1603(d). The fifth exception to the general grant of sovereign immunity in section 1605 reads:

A foreign state shall not be immune from the jurisdiction of the courts of the United States or of the States in any case-- ...

(5) not otherwise encompassed in paragraph (2) above, in which money damages are sought against a foreign state for personal injury or death, or damage to or loss of property, occurring in the United States and caused by the tortious act or omission of that foreign state or of any official or employee of that foreign state while acting within the scope of his office or employment; except this paragraph shall not apply to-- ...

(B) any claim arising out of malicious prosecution, abuse of process, libel, slander, misrepresentation, deceit, or interference with contract rights.

28 U.S.C. Sec. 1605(a) (emphases added).

In granting INMECAFE's motion to set aside the default judgment, the district court ruled that the exceptions to the waiver of sovereign immunity contained in section 1605(a)(5)(B) are not limited to the "noncommercial torts" exception of that "paragraph," but extend to restore sovereign immunity for any such tort claims, even if committed in the course of a "commercial activity" as defined in section 1605(a)(2). Thus, even though INMECAFE's acts that form the basis of the Export Group's complaint were "commercial activities" under section 1605(a)(2), the court ruled that they...

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141 practice notes
  • Aquamar v. Del Monte Fresh Produce, No. 95-5198.
    • United States
    • U.S. Court of Appeals — Eleventh Circuit
    • June 30, 1999
    ...2368, 141 L.Ed.2d 736 (1998) (conducting de novo review of FSIA jurisdictional question); see also Export Group v. Reef Indus., Inc., 54 F.3d 1466, 1469 (9th Cir. 1995) ("The existence of subject matter jurisdiction under the FSIA is a question of law subject to de novo review."). We may se......
  • In re Sasson, No. 03-16364.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (9th Circuit)
    • September 13, 2005
    ...to set aside a judgment as void de novo "because the question of the validity of a judgment is a legal one." Export Group v. Reef Indus., 54 F.3d 1466, 1469 (9th Cir.1995). We review the scope of the exercise of equitable power de novo, Graves v. Myrvang (In re Myrvang), 232 F.3d 1116, 1124......
  • Munoz v. PHH Mortg. Corp., No. 1:08-cv-00759-DAD-BAM
    • United States
    • United States District Courts. 9th Circuit. United States District Courts. 9th Circuit. Eastern District of California
    • August 11, 2020
    ...to the decision [in PHH Corp. ] and thus ha[s] no binding or precedential impact in the present case." Exp. Grp. v. Reef Indus., Inc. , 54 F.3d 1466, 1472 (9th Cir. 1995) (citation omitted).17 In another opinion letter issued on August 12, 2004, HUD reaffirmed that the 1997 HUD Letter provi......
  • Peterson v. Islamic Republic Of Iran, No. 08-17756
    • United States
    • United States Courts of Appeals. United States Court of Appeals (9th Circuit)
    • December 3, 2010
    ...immune from the jurisdiction of United States courts; unless a specified exception applies...."); Export Group v. Reef Indus., Inc., 54 F.3d 1466, 1470 (9th Cir.1995). So does the history of foreign sovereign immunity in U.S. courts.627 F.3d 1126 At common law, foreign states were absolutel......
  • Request a trial to view additional results
141 cases
  • Aquamar v. Del Monte Fresh Produce, No. 95-5198.
    • United States
    • U.S. Court of Appeals — Eleventh Circuit
    • June 30, 1999
    ...2368, 141 L.Ed.2d 736 (1998) (conducting de novo review of FSIA jurisdictional question); see also Export Group v. Reef Indus., Inc., 54 F.3d 1466, 1469 (9th Cir. 1995) ("The existence of subject matter jurisdiction under the FSIA is a question of law subject to de novo review."). We may se......
  • In re Sasson, No. 03-16364.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (9th Circuit)
    • September 13, 2005
    ...to set aside a judgment as void de novo "because the question of the validity of a judgment is a legal one." Export Group v. Reef Indus., 54 F.3d 1466, 1469 (9th Cir.1995). We review the scope of the exercise of equitable power de novo, Graves v. Myrvang (In re Myrvang), 232 F.3d 1116, 1124......
  • Munoz v. PHH Mortg. Corp., No. 1:08-cv-00759-DAD-BAM
    • United States
    • United States District Courts. 9th Circuit. United States District Courts. 9th Circuit. Eastern District of California
    • August 11, 2020
    ...to the decision [in PHH Corp. ] and thus ha[s] no binding or precedential impact in the present case." Exp. Grp. v. Reef Indus., Inc. , 54 F.3d 1466, 1472 (9th Cir. 1995) (citation omitted).17 In another opinion letter issued on August 12, 2004, HUD reaffirmed that the 1997 HUD Letter provi......
  • Peterson v. Islamic Republic Of Iran, No. 08-17756
    • United States
    • United States Courts of Appeals. United States Court of Appeals (9th Circuit)
    • December 3, 2010
    ...immune from the jurisdiction of United States courts; unless a specified exception applies...."); Export Group v. Reef Indus., Inc., 54 F.3d 1466, 1470 (9th Cir.1995). So does the history of foreign sovereign immunity in U.S. courts.627 F.3d 1126 At common law, foreign states were absolutel......
  • Request a trial to view additional results

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