Joseph v. Office of Consulate General of Nigeria

• Decision Date: 19 October 1987
• Docket Number: Nos. 86-2630,86-2707,s. 86-2630
• Citation: 830 F.2d 1018
• Parties: Catherine JOSEPH, Plaintiff/Appellee/Cross-Appellant, v. OFFICE OF the CONSULATE GENERAL OF NIGERIA, Consulate General of Nigeria, Federal Republic of Nigeria, et al., Defendants/Appellants/Cross-Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 1018

830 F.2d 1018

Catherine JOSEPH, Plaintiff/Appellee/Cross-Appellant, v. OFFICE OF the CONSULATE GENERAL OF NIGERIA, Consulate General of Nigeria, Federal Republic of Nigeria et al., Defendants/Appellants/Cross-Appellees.

Nos. 86-2630, 86-2707.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted June 10, 1987.

Decided Oct. 19, 1987.

John H. Aspelin, San Francisco, Cal., for plaintiff/appellee/cross-appellant.

Carol Johnson Roduit, San Francisco, Cal., for defendants/appellants/cross-appellees.

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

Before CHOY, Senior Circuit Judge, TANG and NELSON, Circuit Judges.

CHOY, Senior Circuit Judge:

This appeal primarily requires us to decide whether the district court has subject matter jurisdiction over a landlord-tenant dispute between a landlord and a foreign state, its consulate, and its consular officials. We conclude that the district court has jurisdiction over the landlord's breach of contract and tort claims. The district court's order finding jurisdiction over only the tort claims is affirmed in part and reversed in part.

BACKGROUND

The sovereign defendants in this case are the Federal Republic of Nigeria ("Nigeria") and the Consulate General of Nigeria (the "Consulate"). According to the defendants, the basic function of the Consulate is to protect the interests of Nigerians residing in its consular district, and to encourage cultural exchanges between Nigerian and American organizations.

In 1978, Catherine Joseph ("Joseph") leased a house in San Francisco to the Consulate. O. Effiong, a former consular officer, signed the standard form lease on behalf of the Consulate. The house was used as a residence by employees of the Consulate and their families. One of those consular employees was defendant A.A. Olalandu ("Olalandu"), a finance officer for the Consulate, who began residence at the Joseph property in 1982.

Shortly after the end of the five-year lease period, Joseph allegedly discovered that the tenants had removed property from the house and had left the premises severely damaged. Joseph brought suit in federal district court, seeking, inter alia, compensation for damages to fixtures, landscaping, and appliances. ¹ Joseph asserts four causes of action against both Nigeria and the Consulate. The first is for breach of contract; the other three are tort claims for conversion, trespass, and waste. ² In addition, Joseph asserts three tort claims against Olalandu for conversion, trespass, and waste.

Joseph filed her complaint in district court in August 1984. The defendants did not respond. On September 27, 1985, the court entered a default judgment against the defendants. In January 1986, the defendants filed a motion to set aside the default judgment. The defendants contended that the default judgment was void for lack of jurisdiction on account of the defendants' sovereign and consular immunity. On March 19, 1986, without deciding the immunity question, the district court granted the defendants' motion on two conditions: 1) that the defendants raise their claims of sovereign and consular immunity in the form of a motion for summary judgment; and 2) that the defendants pay Joseph's attorney's fees. After the parties submitted motions for summary judgment, the court held a hearing on the sovereign immunity question.

On August 12, 1986, the court issued an opinion and order. The court determined that it had jurisdiction over Nigeria and the Consulate pursuant to the Foreign Sovereign Immunities Act ("FSIA"), 28 U.S.C. Secs. 1330, 1602-1611 (1982). Specifically, the court found jurisdiction over Joseph's tort claims under the FSIA's "tortious activity" exception to immunity. However, the court concluded that jurisdiction over Nigeria and the Consulate was not conferred by the FSIA's "waiver," "commercial activity," and "immovable property," exceptions. Because the district court found jurisdiction only pursuant to the tortious The court found jurisdiction over Olalandu pursuant to 28 U.S.C. Sec. 1351 (1982). The court determined that Olalandu was not protected by consular immunity under the Vienna Convention on Consular Relations, April 24, 1963, 21 U.S.T. 77, T.I.A.S. No. 6820, 596 U.N.T.S. 261 (the "Vienna Convention"), which provides immunity to consular officials for actions which are performed in the exercise of the officials' consular functions.

activity exception, the court's decision immunized Nigeria and the Consulate from Joseph's breach of contract claims.

In light of the district court's finding of jurisdiction, Joseph requested to have the default judgment reinstated. The request was denied by the district court "because no trial on the merits was ever held." The court then set a trial date for Joseph's claims.

Both Joseph and the defendants have brought interlocutory appeals in regard to the district court's decision. ³ The defendants appeal the district court's determination that it had jurisdiction over Joseph's tort claims against Nigeria and the Consulate pursuant to the tortious activity exception. Olalandu apparently appeals the district court's determination that he is not protected by consular immunity. ⁴

Joseph contends on appeal that the district court erred in failing to reinstate the default judgment once immunity was denied. Joseph also argues that the district court incorrectly determined that jurisdiction over Nigeria and the Consulate is not conferred by the waiver, commercial activity, and immovable property exceptions to the FSIA.

DISCUSSION

Our evaluation of the defendants' claims of immunity involves two independent doctrines. The doctrine of sovereign immunity is applicable only to states and their instrumentalities--here, Nigeria and the Consulate. The doctrine of consular immunity is applicable only to consular officials and employees--here, Olalandu.

I. Sovereign Immunity

The FSIA is the exclusive source of subject matter jurisdiction over suits involving foreign states or their instrumentalities. De Letelier v. Republic of Chile, 748 F.2d 790, 793 (2d Cir.1984), cert. denied, 471 U.S. 1125, 105 S.Ct. 2656, 86 L.Ed.2d 273 (1985); see 28 U.S.C. Sec. 1330(a). Nigeria is of course a foreign state. The Consulate, as a separate legal person, also qualifies as a "foreign state" under the FSIA. Gerritsen v. de la Madrid Hurtado, 819 F.2d 1511, 1517 (9th Cir.1987).

Under the FSIA, we presume that actions taken by foreign states or their instrumentalities are sovereign acts and thus are protected from the exercise of our jurisdiction, unless one of the FSIA's exceptions to immunity applies. Meadows v. Dominican Republic, 817 F.2d 517, 522 (9th Cir.1987). Once the plaintiff offers evidence that an FSIA exception to immunity applies, the party claiming immunity bears the burden of proving by a preponderance of the evidence that the exception does not apply. See id. at 522-23; Vencedora Oceanica Navigacion, S.A. v. Compagnie Nationale Algerienne de Navigation, 730 F.2d 195, 199 (5th Cir.1984).

Joseph claims that Nigeria and the Consulate are subject to jurisdiction pursuant to four exceptions to sovereign immunity set forth in Sec. 1605 of the FSIA. These exceptions are commonly known as the waiver exception, 28 U.S.C. Sec. 1605(a)(1), the commercial activity exception, 28 U.S.C. Sec. 1605(a)(2), the immovable property exception, 28 U.S.C. Sec. 1605(a)(4), and the tortious

                activity exception, 28 U.S.C. Sec. 1605(a)(5). 5   We review de novo the district court's determination that subject matter jurisdiction over Joseph's lawsuit is conferred only by the tortious activity exception.   See Gerritsen, 819 F.2d at 1515.  We conclude that:  1) the waiver exception is applicable to all of Joseph's claims;  2) the commercial activity exception is applicable to Joseph's breach of contract claims;  and 3) the tortious activity exception is applicable to Joseph's tort claims
                

A. Waiver Exception

The FSIA's waiver exception denies immunity in any case "in which the foreign state has waived its immunity either explicitly or by implication...." 28 U.S.C. Sec. 1605(a)(1). The waiver exception is narrowly construed. See Frolova v. Union of Soviet Socialist Republics, 761 F.2d 370, 377 (7th Cir.1985). Implicit waivers are ordinarily found only where: "(1) a foreign state has agreed to arbitration in another country; (2) a foreign state has agreed that a contract is governed by the law of a particular country; and (3) a foreign state has filed a responsive pleading in a case without raising the defense of sovereign immunity." Id.

At issue in this case is whether the lease agreement between Joseph and the Consulate implicitly waives sovereign immunity. The relevant lease provision states:

In the event that any action shall be commenced by either party hereto arising out of, or concerning this lease or any right or obligation derived therefrom, then in addition to all other relief at law or equity, the prevailing party shall be entitled to recover attorney's fees as fixed by the court.

We conclude that this provision constitutes a waiver of sovereign immunity as to all of Joseph's claims against Nigeria and the Consulate.

A foreign state does not waive its sovereign immunity merely by entering into a contract with another party. Nevertheless, at the very least it is clear that a sovereign party has waived immunity where a contract specifically states that the laws of a jurisdiction within the United States are to govern the transaction. Marlowe v. Argentine Naval Commission, 604 F.Supp. 703, 708-09 (D.D.C.1985) (implicit waiver where contract stated that it "shall be governed by and construed in accordance with the laws of the District of Columbia"); Resource Dynamics International, Ltd. v. General People's Committee for Communications and Maritime Transport in the Socialist People's Libyan Arab Jamahiriya, 593 F.Supp. 572, 575 (N.D.Ga.1984) (implicit waiver...