Mendaro v. World Bank
| Citation | 717 F.2d 610 |
| Decision Date | 27 September 1983 |
| Court | United States Courts of Appeals. United States Court of Appeals (District of Columbia) |
Jamie S. Gorelick, Washington, D.C., with whom Jonathan B. Sallet, Washington, D.C., was on the brief, for appellant.
John H. Pickering, Washington, D.C., with whom Jay F. Lapin, Seth A. Davidson, Washington, D.C., and Andrew N. Vorkink, New York City, were on the brief, for appellee.
Before ROBINSON, Chief Judge, WILKEY, Circuit Judge, and MARKEY, * Chief Judge, United States Court of Appeals for the Federal Circuit.
Opinion for the Court filed by Circuit Judge WILKEY.
This appeal requires us to decide whether the International Bank for Reconstruction and Development may be sued in United States courts by employees of the Bank seeking redress of employment related grievances. Appellant Susana Mendaro challenges the district court's dismissal of her action under Title VII of the Civil Rights Act of 1964, 1 arguing that the Articles of Agreement of the International Bank for Reconstruction and Development ("Articles of Agreement") 2 effectively waive the immunity from suit which the Bank would otherwise enjoy under the International Organizations Immunities Act. 3 Because the facially broad waiver of immunity contained in the Bank's Articles of Agreement must be narrowly read in light of both national and international law governing the immunity of international organizations, we affirm the decision of the district court.
The International Bank for Reconstruction and Development, commonly referred to as the World Bank, is an international financial institution whose purposes include assisting the development of its member nations' territories, promoting and supplementing private foreign investment, and promoting long range balanced growth in international trade. 4 To meet these objectives the Bank is empowered to make direct loans to its members or to businesses located in the territories of its members; 5 participate in and guarantee loans placed through private investment channels; 6 issue, guarantee, and acquire its own securities; and invest in and guarantee other securities. 7 Membership in the World Bank is generally limited to those nations which participate in the International Monetary Fund and have paid in a specified amount of capital. 8 Since the Bank's genesis at the 1944 United Nations Monetary and Financial Conference at Bretton Woods, New Hampshire, more than 140 nations have joined as members. 9 United States participation in the Bank has been authorized by Congress since 1945. 10
The World Bank is headed by a board of governors, composed of one governor and one alternate appointed by each member. 11 Actual operations are controlled by twelve executive directors, who meet under the chairmanship of a president selected by the executive directors. 12 The president functions as the chief operating officer of the Bank. 13 The administrative staff of the World Bank is currently composed of nearly 6,000 employees, including citizens from 110 countries. Although the majority are employed at the Bank's headquarters in Washington, D.C., the Bank has offices and resident missions in thirty-six countries. 14
Susana Mendaro, an Argentine citizen, was hired as a researcher by the World Bank on 6 September 1977. She claims that during her term of employment she was the victim of a pattern of sexual harassment and discrimination by other Bank employees. Her supervisors allegedly refused to provide her with the same number of assignments as her male coworkers, and at times thwarted her efforts to complete those assignments she had been given. 15 Mendaro alleges that one of her supervisors permitted other male employees to make unwanted verbal and physical advances toward her. 16 In addition, Mendaro claims that the Bank refused to promote her to the position of consultant, although she allegedly performed some of the duties of consultants. 17 Mendaro complained to the Bank about these problems, but felt that they had not been investigated or remedied effectively. 18 Some time after these complaints she was informed that her appointment with the Bank would expire on 30 June 1979.
Subsequent to her termination Mendaro filed a complaint with the Equal Employment Opportunity Commission ("Commission") alleging discrimination and retaliatory termination on the basis of sex in violation of Title VII of the Civil Rights Act of 1964. 19 The area office of the Commission dismissed the charges for lack of jurisdiction on 12 February 1980, concluding that the World Bank is an "international governmental agency ... not subject to the laws of the United States or any other member nation ...." 20 On 22 July 1980 the full Commission ratified this decision, and refused to take jurisdiction over her complaint. 21
Mendaro then filed the present suit against the World Bank in the United States District Court for the District of Columbia. The World Bank responded by moving to dismiss the action, arguing that it is an international governmental organization not subject to its members' jurisdiction in suits arising out of the Bank's internal administrative affairs, such as the alleged violation of its employment contracts. Mendaro opposed the motion for dismissal. She conceded that the challenged activities of the Bank would ordinarily be immunized from judicial scrutiny, but claimed that the Articles of Agreement effectively waive the Bank's right to claim the immunities of an international organization. She cited as the primary basis of her argument Article VII section 3, which permits actions to be brought against the World Bank "in a court of competent jurisdiction in the territories of a member in which the Bank has an office, has appointed an agent for the purpose of accepting service or notice of process, or has issued or guaranteed securities." 22 Reading the Articles of Agreement as a whole, and relying on our decision in Broadbent v. Organization of American States, 23 the district court rejected Mendaro's interpretation of Article VII section 3 and dismissed the action for lack of jurisdiction. Given the scope of the facially broad waiver of immunity under Article VII section 3 of the Article of Agreement, the correctness of the district court's decision hinges on the extent of the World Bank's immunity from suit under the International Organizations Immunities Act. 24
The primary source of national law on the immunity of international organizations is the International Organizations Immunities Act ("Act"), 25 which confers judicial status and immunities upon those international organizations in which the United States participates pursuant to a treaty or congressional act, and which have been designated by the president as being entitled to enjoy the provisions of the Act. 26 Section 2(b) of the Act defines the privileges accorded to qualified international organizations:
International organizations, their property and their assets, wherever located, and by whomsoever held, shall enjoy the same immunity from suit and every form of judicial process as is enjoyed by foreign governments, except to the extent that such organizations may expressly waive their immunity for the purpose of any proceedings or by the terms of any contract. 27
The immunity conferred by section 2(b) is subject to two sources of limitation. First, the organization itself may expressly waive its immunity. Second, the President may specifically limit the organization's immunities when he selects the organization as one entitled to enjoy the Act's privileges and immunities. At any time thereafter, such as when the organization abuses its privileges, the immunity may be modified, conditioned, or revoked by executive order. 28
Although there has been no express waiver by the Bank of its immunity to this particular suit, the members of the World Bank effectively curtailed much of the Bank's immunity from judicial process in Article VII section 3 by stipulating the conditions under which actions may be brought against the Bank. When President Truman extended the Act's privileges and immunities to the World Bank, he limited the Bank's immunity by the terms of the functional waiver contained in the Bank's articles. 29 Thus, even though the extensive immunity conferred by section 2(b) would normally insulate the Bank from jurisdiction over this type of action brought by its employees, 30 this court must accept jurisdiction over Mendaro's claim unless the Articles of Agreement preserve the World Bank's immunity to suits by employees.
The full text of Article VII section 3 states:
Position of the Bank with regard to judicial process
Actions may be brought against the Bank only in a court of competent jurisdiction in the territories of a member in which the Bank has an office, has appointed an agent for the purpose of accepting service or notice of process, or has issued or guaranteed securities. No actions shall, however, be brought by members or persons acting for or deriving claims from members. The property and assets of the Bank shall, wheresoever located and by whomsoever held, be immune from all forms of seizure, attachment or execution before the delivery of final judgment against the Bank. 31
Mendaro argues that Article VII section 3 constitutes a broad waiver of immunity from all suits commenced in a court of competent jurisdiction located in specified territories, subject to two clearly expressed exceptions: the Bank is absolutely immune from (1) suits by members of the Bank, and (2) actions seeking prejudgment attachment of the Bank's...
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