Randall v. Arabian American Oil Co.
| Decision Date | 26 December 1985 |
| Docket Number | No. 84-2701,84-2701 |
| Citation | 778 F.2d 1146 |
| Parties | 121 L.R.R.M. (BNA) 2611 Charles J. RANDALL, Plaintiff-Appellant, v. ARABIAN AMERICAN OIL COMPANY, Defendant-Appellee. |
| Court | U.S. Court of Appeals — Fifth Circuit |
Jeffery H. Krasnow, Roanoke, Va., Hicks, Glover, Robinson & Sheiness, Iris Hefter Robinson, Houston, Tex., for plaintiff-appellant.
Bracewell & Patterson, Victoria Corcoran, V. Scott Kneese, Houston, Tex., for defendant-appellee.
Appeal from the United States District Court for the Southern District of Texas.
Before GARZA, TATE and JOHNSON, Circuit Judges.
This diversity action was filed by Charles J. Randall ("Randall") against his former employer, the Arabian American Oil Company ("ARAMCO"), for wrongful discharge of employment. The district court entered judgment for ARAMCO based on it's motion for summary judgment, which alleged that under the applicable law of Saudi Arabia, this dispute could be heard only by the Saudi Labor Commission. We disagree with the district court's ruling that Randall's remedy must be enforced through the Saudi Arabian tribunal. Although there is no question that Saudi Arabian
substantive law provides the rule of decision in this case, we see no reason why Randall's claim cannot be adjudicated in our federal courts if subject matter and in personam jurisdiction exist. We find that ARAMCO's motion for summary judgment was improperly granted. Accordingly, we reverse and remand.
In the fall of 1973, Randall interviewed with ARAMCO in Houston, Texas, for a position of employment in Saudi Arabia. ARAMCO interviewed him a second time in New York City, and he accepted employment in May 1974. Randall was hired as a Maintenance Engineer III and he lived and worked in Dharan, Saudi Arabia until his termination on August 31, 1981. ARAMCO purportedly fired Randall for diverting certain company goods, as well as services of employees under his supervision, to his own use and benefit. Randall received a notice of termination on August 22, 1981, effective August 31, 1981.
After receiving the notice of termination, Randall began investigating his right to contest the termination. He obtained a copy of the company's "Internal Rules ("Rules") and a copy of the Labor and Workmen Law (Kingdom of Saudi Arabia) ("Labor Law"). It appears that Randall could have challenged his termination by using either an internal grievance procedure under the Rules or by a formal complaint to the Labor and Settlement of Disputes Commissions ("Labor Commission") created under the Labor Law. 1
Randall alleges, however, that ARAMCO kept him from pursuing his complaint in Saudi Arabia. He received an anonymous telephone call at his home suggesting that he should not pursue his complaint because he and his family could get in trouble with the government and possibly be put in jail. Also, Randall alleges that an ARAMCO employee, who was involved in an investigation of Randall's misconduct, had warned Randall that if he embarrassed the company he could "end up in big trouble." It is not clear whether these, and other, alleged threats actually kept Randall from pursuing his claims in Saudi Arabia. But thinking that he could seek relief in an American court, and fearing for his safety and that of his family, Randall returned to the United States where he filed this diversity action on August 30, 1982.
Randall is a citizen of Virginia and ARAMCO is a Delaware corporation with its principal place of business in Houston, Texas. Randall alleges that his termination was wrongful and that under the Labor Law he suffered damages in excess of $10,000. More specifically, Randall claims that he was (1) not guilty of the alleged misconduct ARAMCO charged him with, (2) never made aware of his rights under the Labor Law, as required by the Labor Law, (3) terminated in violation of the procedural rights granted to employees under the Labor Law, (4) kept from pursuing challenges to his termination in Saudi Arabia, (5) wrongfully denied his termination award in the amount of $27,924.04 and back pay in the amount of $4,850.00, and (6) denied indemnity pursuant to the Labor Law in the amount of $29,100.00.
ARAMCO initially filed a motion to dismiss on the grounds that (1) the Labor Law gave exclusive jurisdiction for the settlement of labor disputes to a Labor Commission created by the Labor Law, 2 (2) that because of the exclusive jurisdiction provisions of the Labor Law, Randall's claim failed to state a claim upon which relief A hearing was set for argument and testimony on the issues of the exclusive jurisdiction provisions of the Labor Commission and the plaintiff's awareness of his rights under the Labor Law. This hearing never occurred. In his brief, Randall states that ARAMCO notified the district court and opposing counsel that it was withdrawing the issue of jurisdiction from consideration. The record is silent about this, except for an order by the district court denying ARAMCO's motion to dismiss. Almost one year later, after further discovery by the parties, ARAMCO filed a motion for summary judgment asserting as its sole ground for relief the exclusive jurisdiction provisions of the Labor Law. In granting judgment for ARAMCO, the district court gave effect to the exclusive jurisdiction provisions of the Labor Law and ruled that the Labor Commission was the only forum in which Randall could file an action against ARAMCO.
could be granted, and (3) that the claim was barred by the one-year statute of limitations of the Labor Law. 3 Since the parties had asked the court to consider the employment contract, the Rules, and the Labor Law, the court appropriately considered the motion to dismiss as a motion for summary judgment. See Oaxaca v. Roscoe, 641 F.2d 386, 391-92 (5th Cir.1981) (a Rule 12(b)(6) motion may be converted by the court into a motion for summary judgment)
On appeal, Randall argues (1) that the exclusive jurisdiction provisions of the Labor Law are procedural in nature and that under conflict of laws principles the court may use Texas procedures and remedies to enforce his rights against ARAMCO using Saudi Arabian substantive law, (2) that a United States citizen should not, as a matter of public policy, be forced to seek relief before a foreign tribunal, and (3) that ARAMCO should be equitably estopped from asserting the exclusive jurisdiction provisions of the Labor Law because it prevented him from using the Saudi Arabian tribunals by frightening him out of the country.
ARAMCO counterargues that the exclusive jurisdiction provisions of the Labor Law are an integral part of any rights Randall may have under the Labor Law and cannot be ignored in determining whether Randall may use an alternative forum to enforce his rights, if any. Further, the Act of State Doctrine and the doctrine of international comity compel the district court to recognize the Labor Commission's exclusive authority over this dispute, thereby depriving any other forum of authority to adjudicate.
Our analysis and disposition of this appeal will be easier to follow if we begin The exclusive jurisdiction provisions of the Labor Law cannot deprive a United States District Court of subject matter jurisdiction. The geopolitical outreach of a foreign country's legislative jurisdiction normally does not extend beyond its borders, and the effect of a foreign sovereign's laws in another country depends on the recognition the other country chooses to give it either through notions of comity and reciprocity or through a formal agreement or treaty between sovereigns. We reject outright the notion that the law of a foreign country can unilaterally curtail the power of our federal courts to hear a dispute even though the dispute involves rights fixed by the laws of another nation. Only the Constitution and the laws of the United States can dictate what cases or controversies our federal courts may hear, and the parties have not directed our attention to any treaties or agreements with Saudi Arabia that would require our courts to refrain from exercising jurisdiction in this case.
with the district court's subject matter jurisdiction and the effect, if any, of the Saudi Arabian exclusive jurisdiction provisions on the courts of this country. ARAMCO contends that the exclusive jurisdiction provisions of the Saudi Arabian Labor Law deprived the United States District Court of subject matter jurisdiction. We disagree. The district court had subject matter jurisdiction of this dispute by virtue of the diverse citizenship of the parties and the claim for damages in excess of $10,000. Moreover, the parties do not dispute that the court had in personam jurisdiction over the defendant.
The issue of whether our courts have subject matter jurisdiction is readily distinguishable from the issue of what law governs this dispute. The district court's diversity jurisdiction directs us to the law of the forum state as the rule of decision, Erie Railroad v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938), including the conflict of laws rules of that state. Klaxon Co. v. Stentor Electric Manufacturing Co., 313 U.S. 487, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941). The State of Texas requires that "in all choice of law cases, except those contract cases in which the parties have agreed to a valid choice of law clause, the state with the most significant relationship to the particular substantive issue will be applied to resolve that issue," Duncan v. Cessna Aircraft Co., 665 S.W.2d 414, 421 (Tex.1984), unless application of the law referred to "violates good morals, natural justice or is prejudicial to the general interests of our own citizens." Gutierrez v. Collins, 583 S.W.2d 312, 321 (Tex.1979).
ARAMCO argues that Randall's cause of action is against Texas' public policy because Texas is an...
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