Spiess v. C. Itoh & Co. (America), Inc.

• Decision Date: 10 February 1984
• Docket Number: No. 83-2646,83-2646
• Citation: 725 F.2d 970
• Parties: 34 Fair Empl.Prac.Cas. 181, 33 Empl. Prac. Dec. P 34,213 Michael E. SPIESS, et al., Plaintiffs-Appellees, v. C. ITOH & CO. (AMERICA), INC., Defendant-Appellant. Summary Calendar.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 970

725 F.2d 970

34 Fair Empl.Prac.Cas. 181,

33 Empl. Prac. Dec. P 34,213

Michael E. SPIESS, et al., Plaintiffs-Appellees, v. C. ITOH & CO. (AMERICA), INC., Defendant-Appellant.

No. 83-2646

Summary Calendar.

United States Court of Appeals Fifth Circuit.

Feb. 10, 1984.

Neil Martin, Houston, Tex., for defendant-appellant.

Edward John O'Neill, Jr., Houston, Tex., for plaintiffs-appellees.

Appeal from the United States District Court for the Southern District of Texas.

Before TATE, GARWOOD and HIGGINBOTHAM, Circuit Judges.

PER CURIAM:

Although all parties take the position that we have jurisdiction of this appeal, we notice sua sponte, as we are obliged to do, our own want of jurisdiction. Arango v. Guzman Travel Advisors Corp., 621 F.2d 1371, 1374 (5th Cir.1980). For the reasons stated below, we hold that we lack appellate jurisdiction because the order sought to be appealed is not a final judgment. We accordingly dismiss the appeal.

This is an employment discrimination suit brought by plaintiffs-appellees under Title VII of the Civil Rights Act and 42 U.S.C. Sec. 1981 against their employer, defendant-appellant C. Itoh-America, a New York corporation wholly owned by a Japanese parent corporation. Defendant moved under Rule 12(b)(6), Fed.R.Civ.P., to dismiss the complaint for failure to state a claim on which relief can be granted, relying on the 1953 Treaty of Friendship, Commerce and Navigation between the United States and Japan (the "Treaty"), particularly the provision of its Article VIII(1) that:

"[C]ompanies of either Party shall be permitted to engage, within the territories of the other Party, accountants and other technical experts, executive personnel, attorneys, agents and other specialists of their choice."

In 1979 the district court denied the motion to dismiss, relying primarily on the conclusion that defendant-appellant, since it was incorporated under the laws of New York, was a company of the United States, not of Japan, within the definition contained in Article XXII(3) of the Treaty, and hence could not avail itself of the rights provided by Article VIII(1), notwithstanding that it was the wholly owned subsidiary of an admittedly Japanese company. Spiess v. C. Itoh & Co. (America), Inc., 469 F.Supp. 1 (S.D.Tex.1979). The district court also ruled that even if defendant-appellant had standing to raise the Treaty rights of its parent, a question which it did not reach, this would not provide a defense since "[a]ny latitude in hiring provided to Itoh-Japan [the parent] by Article VIII(1) [of the Treaty] extends [only] to employees whom Itoh-Japan itself hires. The hiring questioned by plaintiffs in the instant case is that of Itoh-America [defendant]" and "[a]ny absolute rights granted [by the Treaty] to Itoh-Japan apply only to its own hiring decisions; the practices challenged in the present litigation are those of [the defendant] Itoh-America." Id. at 8, 9. The district court, however, certified to this Court under 28 U.S.C. Sec. 1292(b) the question of whether the appellant could successfully urge the Treaty as a defense to the suit. Id. at 9-11. We accepted the appeal and reversed, ruling that appellant was a company of Japan within the meaning of Articles VIII(1) and XXII(3), and that Article VIII(1) did provide it a defense, notwithstanding that it was a New York corporation, because it was a wholly owned subsidiary of a Japanese company. Spiess v. C. Itoh & Co. (America), Inc., 643 F.2d 353 (5th Cir.1981). Because we held that appellant was a company of Japan under the Treaty and entitled to assert, in its own right, the protection of Article VIII(1), we did not reach the issue of appellant's standing to raise the Treaty rights of its parent, nor whether the parent's Treaty rights extended to staffing of the subsidiary, nor whether the complained of practices were those of the parent or the subsidiary.

Subsequent to our decision, the Supreme Court held that a corporation incorporated in the United States was not a company of Japan under the Treaty and was not entitled to assert in its own right the protection of Article VIII(1), notwithstanding it was the wholly owned subsidiary of an admittedly Japanese company. Sumitomo Shoji America, Inc. v. Avagliano, 457 U.S. 176, 102 S.Ct. 2374, 72 L.Ed.2d 765 (1982). In the course of its opinion the Supreme Court observed, "We also express no view as to whether Sumitomo [the defendant subsidiary] may assert any Article VIII(1) rights of its parent." Id. at 189 n. 19, 102 S.Ct. at 2382 n. 19. Thereafter, the Supreme Court granted the application of plaintiffs-appellees for certiorari in the instant case, vacated the judgment of this Court and remanded the case to this Court "for further consideration in light of Sumitomo Shoji America, Inc. v. Avagliano...." Spiess v. C. Itoh & Co. (America), Inc., 457 U.S. 1128, 102 S.Ct. 2951, 73 L.Ed.2d 1344 (1982). Following the Supreme Court's remand, on January 10, 1983, 687 F.2d 129, we remanded to the district court, stating:

"The parties urge this court to consider the remaining issues in the case. We decline to do so without first remanding the matter to the district court.

"C. Itoh presents several grounds for its motion to dismiss. For example, it argues that it has standing to assert the substantive treaty rights of its parent company. Resolution of these remaining issues may involve several factual determinations that have not yet been made. Therefore, we have determined that no decision should be made by this court at this time. We remand the cause to the district court with directions to conduct further proceedings to finalize the action in light of the mandate of the Supreme Court."

Subsequent to our remand, the parties filed further briefs in the district court, and defendant-appellant reurged its Rule 12(b)(6) motion to dismiss for failure to state a claim on which relief could be granted, generally contending that it had standing to raise the Article VIII(1) Treaty rights of its parent, and that the Japanese staff who filled the positions at issue, though employees of defendant-appellant, were also employees of the parent, which "engaged these Japan staff members, each of whom is an employee of C. Itoh (Japan) [the parent], to work for Defendant" and that:

"It is undisputed that Japan staff members are employees of the parent company both before and after their rotation to C. Itoh (America) [defendant]. Based upon this and other factors in the Record, especially the integrated relationship of the parent and subsidiary, Japan staff members must also be considered employees of the parent company during their assignment to C. Itoh (America).

"...

"[T]here is no reason to assume, as Plaintiffs do, that Article VIII(1) must be limited to employment relationships, thereby excluding other means by which 'to engage' such individuals.

"Even under the most restrictive view, C. Itoh (Japan) [the parent] has certainly exercised its Treaty right 'to engage' the Japan staff. As the Record shows, each member of the Japan staff has been hired and trained by the parent company in Japan. The parent company determines which positions with the subsidiary are to be filled with Japan staff, and selects the individuals to fill those positions. The parent company assigns these individuals to work for the subsidiary for a period of from three to five years. While in the United States, Japan staff compensation and promotions are determined by the parent. After completing their rotation in the United States, they return to Japan where they continue to work for the parent company. Based on these circumstances, there can be no doubt that C. Itoh Japan [the parent] has exercised its Article VIII(1) right 'to engage' managerial and other specialists in this instance."

Defendant-appellant in its submission also stated:

"... Defendant respectfully requests the [District] Court to make the appropriate findings of fact regarding the relationship between the parent and the subsidiary, as well as the circumstances surrounding the selection, assignment, compensation, promotion, and rotation of the Japan staff."

Additionally, defendant-appellant's submission expressly requested the district court "in the event this Motion is denied, to certify the question for appeal to the U.S Court of Appeals for the Fifth Circuit pursuant to 28 U.S.C. Sec. 1292(b)."

Thereafter, the district court on September 27, 1983 entered its order denying "defendant's Motion to Dismiss for Failure to State a Claim pursuant to Rule 12(b)(6), Fed.R.Civ.P." It is from this order of September 27, 1983 that defendant-appellant seeks to appeal. The order recites that the court, in its 1979 ruling, had found that " '[t]he hiring questioned by plaintiffs in the instant case is that of Itoh-American [defendant].' " The order also recites, in reference to defendant-appellant's request for "additional findings of fact," that pursuant to Rule 52(A), Fed.R.Civ.P., findings of fact "are unnecessary on decisions of Motions under Rules 12 or 56 ...." No fact findings are expressly made in the order. The order continues by stating:

"The defendant, by contending that it has standing to assert the substantive treaty rights of its parent, is attempting to accomplish indirectly what it cannot accomplish directly. The Court does not believe that either the Treaty or the Sumitomo case would permit that to occur. Accordingly, defendant's motion to dismiss for failure to state a claim is denied in toto."

The district court in the same order directed defendant-appellant to respond to all of plaintiffs' outstanding interrogatories which were the subject of plaintiffs' pending motion to compel discovery. The district court did not act on, or acknowledge the existence of, the defendant's request for certification under section 1292(b).

On October 4, 1983 defendant moved the district court to amend its September 27, 1983 order so as to certify the ruling...