Lucchino v. Foreign Countries

• Citation: 631 F. Supp. 821
• Decision Date: 07 January 1986
• Docket Number: Civ. A. No. 84-2392.
• Parties: Frank J. LUCCHINO, Controller of Allegheny County v. FOREIGN COUNTRIES OF BRAZIL, SOUTH KOREA, SPAIN, MEXICO, AND ARGENTINA.
• Court: U.S. District Court — Eastern District of Pennsylvania

631 F. Supp. 821

Frank J. LUCCHINO, Controller of Allegheny County v. FOREIGN COUNTRIES OF BRAZIL, SOUTH KOREA, SPAIN, MEXICO, AND ARGENTINA.

Civ. A. No. 84-2392.

United States District Court, E.D. Pennsylvania.

January 7, 1986.

Doris A. Smith and Louis S. Gold, Asst. Solicitors, Allegheny County Office of Controller, Pittsburgh, Pa., for plaintiff.

Jose Luis Enciso Rodriquez, Counsel General of Mexico, Philadelphia, Pa., for defendants.

MEMORANDUM AND ORDER

DITTER, District Judge.

On January 4, 1984, petitioner Frank J. Lucchino, Controller of Allegheny County, filed in the Pennsylvania Commonwealth Court a petition for determination of discrimination under the Pennsylvania Trade Practices Act, Pa.Stat.Ann. tit. 71, §§ 773.101-773.113 (Purdon Supp.1984-85). The act makes it unlawful for any Pennsylvania agency to specify, purchase or permit to be used in any public works aluminum or steel products made in a foreign country determined by the court to be discriminating against Pennsylvania steel or aluminum. Id. § 773.103. Named as respondents were the foreign countries of Brazil, South Korea, Spain, Mexico, and Argentina. Mexico, the only respondent to appear before the commonwealth court, claimed that the court lacked jurisdiction over it because of the protection afforded by both the Foreign Sovereign Immunities Act, 28 U.S.C. §§ 1330, 1391(f), 1441(d) & 1602-1611, and the Act of State Doctrine. On April 17, 1984, the commonwealth court rejected Mexico's contentions, found respondent nations to be discriminating against Pennsylvania aluminum and steel products, and ordered the prothonotary of the commonwealth court to place on the foreign registry docket the name of the respondent countries and the specific products of each country whose purchase would be forbidden. See Lucchino v. Foreign Countries of Brazil, South Korea, Spain, Mexico, and Argentina, 82 Pa.Cmwlth. 406, 476 A.2d 1369 (1984).

On May 16, 1984, Mexico petitioned to remove the matter to this court pursuant to section 6 of the Foreign Sovereign Immunities Act, 28 U.S.C. § 1441. Presently before the court is the motion of Frank J. Lucchino to remand the matter to the commonwealth court and the motion of Mexico to dismiss for insufficiency of service. For reasons that follow, Lucchino's motion will be denied and Mexico's motion will be granted in part.

As a predicate to Mexico's argument against remand and in favor of dismissal, I must find that the Foreign Sovereign Immunities Act, Pub.L. No. 94-583, 90 Stat. 2891 (codified in scattered sections of 28 U.S.C.) applies to a petition for determination of discrimination brought under the Pennsylvania Trade Practices Act. Lucchino argues that the Foreign Sovereign Immunities Act was intended to primarily cover ordinary legal actions in which a plaintiff seeks damages and not actions such as the one brought against Mexico in this case.

The FSIA was enacted to provide a comprehensive explanation of when and how a party can maintain a lawsuit against a foreign state in a court within the United States and to codify principles for courts to apply in deciding questions of sovereign immunity. See H.R.Rep. No. 94-1487, 94th Cong., 2d Sess., reprinted in 1976 U.S. Code Cong. & Ad.News 6604, 6604; Velidor v. L/P/G Benghazi, 653 F.2d 812, 816-17 (3d Cir.1981) cert. dismissed, 455 U.S. 929, 102 S.Ct. 1297, 71 L.Ed.2d 474 (1982). The legislative history observes that American citizens increasingly are coming into contact with foreign states and suggests that these contacts raise questions of whether this country's citizens will have access to the courts in order to resolve "ordinary legal disputes." Id. at 6, 1976 U.S.Code Cong. & Ad.News at 6605.

The congressional concern over the availability of U.S. courts to private citizens bringing ordinary damages cases against foreign states does not exhaust the scope of the Act, however. The House Report stresses the lack of "comprehensive provisions" informing parties when they can have recourse to the courts to assert a claim against a foreign state. It continues by emphasizing that two of the Act's objectives were to codify the "restrictive principle"¹ of sovereign immunity and, "to insure that this restrictive principle of immunity is applied in litigation before U.S. Courts." Id.

Prior to the enactment of the FSIA, when a foreign government wished to assert immunity it could request the State Department to make a formal suggestion of immunity to the court. H.R.Rep. No. 94-1487, at 7, 1976 U.S.Code Cong. & Ad. News, 6604, 6606. Although the State Department attempted to apply sovereign-immunity principles neutrally, it was often subject to diplomatic pressures to extend the doctrine in particular cases. See id. One of the primary goals of the FSIA was to divest from the State Department the power to make immunity decisions and to transfer that power to the courts, which would be free from diplomatic pressure. See id.

With the immunity issue withdrawn from the executive branch the only vehicle by which a foreign government may assert sovereign immunity is through the FSIA. Accordingly, the FSIA should be read to encompass all matters before federal and state courts where a foreign government asserts a claim of immunity. This conclusion is buttressed by the house report which states that the proposed act both "sets forth the sole and exclusive standards to be used in resolving questions of sovereign immunity raised by foreign states before Federal and State courts in the United States ...," id. at 12, 1976 U.S.Code Cong. & Ad.News at 6610, and "prescribes ... the procedures for commencing a lawsuit against foreign states in both Federal and State courts." Id. In the face of this legislative background, I conclude that the FSIA applies to a petition for determination of discrimination under the Pennsylvania Act.

Having determined that the FSIA should not be read as narrowly as plaintiff urges, I must next consider whether the requirements of the Act's removal provisions have been satisfied.

In order for an action against a foreign government to be eligible for removal pursuant to this section, it must be a "civil action brought in a state court...." See Foreign Sovereign Immunities Act § 6, 28 U.S.C. § 1441(d). Because the statute does not authorize the interruption of state administrative proceedings, the removal court must determine whether the state body from which the case was dislodged is judicial or administrative in character. See 14A C. Wright, A. Miller & F. Cooper, Federal Practice and Procedure § 3721, at 205-06 (2d ed. 1985). If the proceeding is found to be judicial, it will be eligible for removal: conversely, if the proceeding is found to be administrative, removal is unavailable.

In Upshur County v. Rich, 135 U.S. 467, 10 S.Ct. 651, 34 L.Ed. 196 (1890), the Supreme Court held that a West Virginia "county court," which was charged with the responsibility of reviewing tax assessments, was not a body from which a matter could be removed. The Court observed that the mere fact that a particular body is labeled as a court does not end the inquiry: rather, a functional analysis must be undertaken to determine the nature of the state proceeding. Id. at 470-71, 10 S.Ct. at 652. See also Commissioners of Road Improvement District No. 2 v. St. Louis Southwestern Ry. Co., 257 U.S. 547, 42 S.Ct. 250, 66 L.Ed. 364 (1922).

Under this functional analysis, a court must focus on the procedures and enforcement powers of the state body, the respective state and federal interests in both the subject matter and the provision of a forum, and the traditional locus of jurisdiction over similar matters. Volkswagen de Puerto Rico, Inc. v. Puerto Rico Labor Relations Board, 454 F.2d 38, 44 (1st Cir. 1972). See also Floeter v. C.W. Transport, Inc., 597 F.2d 1100, 1102 (7th Cir.1979); In re Registration of Edudata Corp., 599 F.Supp. 1089, 1090 (D.Minn.1984); Martin v. Schwerman Trucking Co., 446 F.Supp. 1130 (E.D.Wis.1978).

When all the factors are considered, I must conclude that a petition for determination of discrimination is a civil action brought in a state court. First, a review of the commonwealth court's general jurisdictional grants reveals that the court's powers are unquestionably judicial in nature. The court has original jurisdiction over certain civil actions brought by or against the Commonwealth of Pennsylvania. See 42 Pa.Cons.Stat.Ann. § 761 (Purdon Supp. 1985). It has jurisdiction over certain appeals from final orders of the courts of common pleas, id. § 762, final decisions of government agencies, id. § 763, and awards of arbitrators. Id. 763. To aid both its original and appellate jurisdiction, the court has been given the power to issue writs and processes. Id. § 562. Furthermore, the commonwealth court is bound to follow Pennsylvania's rules of civil procedure and rules of evidence. See Pa. Const., art. V, § 10(c); Pa.R.App.P. 103; Pa.R. Civ.P. 51.

The commonwealth court also sits as a judicial body when it presides over a petition for determination of discrimination. The procedure is adversarial in nature and may be initiated by someone outside the Pennsylvania government. Petitions may be filed with the court by a public agency, importer, or Pennsylvania taxpayer, must be served upon certain representatives of the allegedly discriminating foreign nation, and, like a complaint, must specifically set forth the alleged discrimination. See Pa. Stat.Ann. tit. 71, § 773.106(a) (Purdon Supp.1985). The foreign nation is permitted to respond to the allegations of discrimination by presenting testimony. Id. § 773.106(b). In reaching a decision as to whether a foreign country discriminates against Pennsylvania steel or aluminum products the court is directed to employ a decidedly judicial function, i.e., to evaluate evidence against a statutorily-designed definition of discrimination. See id. § 773.102; 773.107.

While Pennsylvania has an...