Jackson v. People's Republic of China, Civ. A. No. 79-C-1272-E.

• Court: United States District Courts. 11th Circuit. United States District Court of Northern District of Alabama
• Writing for the Court: CLEMON
• Citation: 596 F. Supp. 386
• Parties: Russell JACKSON, et al., Plaintiffs, v. The PEOPLE'S REPUBLIC OF CHINA, a foreign government, Defendant.
• Docket Number: Civ. A. No. 79-C-1272-E.
• Decision Date: 26 October 1984

596 F. Supp. 386

Russell JACKSON, et al., Plaintiffs,
v.
The PEOPLE'S REPUBLIC OF CHINA, a foreign government, Defendant.

Civ. A. No. 79-C-1272-E.

United States District Court, N.D. Alabama, E.D.

October 26, 1984.

596 F. Supp. 387

W. Eugene Rutledge, Rutledge & Yearout, Birmingham, Ala., for plaintiffs.

Warren Lightfoot, Bradley, Arant, Rose & White, Birmingham, Ala., for defendant.

MEMORANDUM OF OPINION

CLEMON, District Judge.

The plaintiffs instituted this action on November 13, 1979 seeking payment of certain bearer bonds, now in default, which were issued by the Imperial Chinese Government in 1911. The jurisdiction of the Court was invoked under the Foreign Sovereign Immunities Act of 1976 ("FSIA"), 28 U.S.C. §§ 1330, 1391 and 1602 et seq. A default judgment was entered against the defendant, the People's Republic of China (China) on October 21, 1981 due to China's failure to appear or answer. Damages were subsequently awarded in 1982. 550 F.Supp. 869.

In August of 1983, China made a special appearance requesting the Court to set aside its entry of default judgment. On February 27, 1984, following a hearing on the issue, this Court entered an order pursuant to Rule 60(b) of the Fed.R.Civ.P. which set aside the default judgment against China. Noting that the controversy was fraught with jurisdictional issues and mindful of the far reaching ramifications that the ultimate decision could have on Sino-American relations, the Court found that justice and the public interest dictated that the default judgment be set aside.

The case is now before the Court upon China's motion to dismiss. In support of its motion, China alleges that the FSIA, which was enacted in 1976, does not retroactively apply to a cause of action arising out of a 1911 transaction.

The law is clear that the FSIA is the exclusive basis for jurisdiction in this case. Ruggiero v. Compania Peruana de Vapores, 639 F.2d 872, 875-76 (2nd Cir.1981); Rex v. Compania Pervana de Vapores, 660 F.2d 61, 65 (3rd 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, 445 U.S. 982, 102 S.Ct. 1490, 71 L.Ed.2d 691 (1982); Goar v. Compania de Vapores, 688 F.2d 417 (5th Cir.1982); McKeel v. Islamic Republic of Iran, 722 F.2d 582 (9th Cir.1983).

Therefore, the question of the retroactive application of the statute is dispositive of the case, if the statute is found to be prospective only.¹ In that situation, the case must be dismissed for want of jurisdiction.

I.

Courts generally look unfavorably upon the retroactive application of statutes. In the landmark case of Union Pac. R. Co. v. Laramie Stock Co., 231 U.S. 190, 34 S.Ct. 101, 58 L.Ed. 179 (1913) the Supreme Court pronounced the basic tenet governing the application of statutes as follows:

596 F. Supp. 388

... The first rule of construction is that legislation must be considered as addressed to the future and not to the past. The rule is one of obvious justice ... and has been expressed in varying degrees of strength, but always of one import, that a retrospective operation will not be given to a statute which interferes with antecedent rights ... unless such be "the unequivocal and inflexible import of the terms, and the manifest intention of the legislation." quoting United States v. Heth, 3 Cranch 399, 413, 2 L.Ed. 479, 483.

231 U.S. at 199, 34 S.Ct. at 102.

It is equally well established that the rights of a party pursuant to a contractual agreement are determined by the law existing when the contract was made. "Not only are existing laws read into contracts in order to fix obligations as between the parties, but the reservation of essential attributes of sovereign power is also read into contracts as a postulate of the legal order." Home Building and Loan Association v. Blaisdell, 290 U.S. 398, 435, 54 S.Ct. 231, 239, 78 L.Ed. 413 (1934).

These...