Unidyne Corp. v. Aerolineas Argentinas
| Decision Date | 07 March 1984 |
| Docket Number | Civ. A. No. 83-504-N. |
| Citation | 590 F. Supp. 398 |
| Parties | UNIDYNE CORPORATION, Plaintiff, v. AEROLINEAS ARGENTINAS and Argentine Naval Commission, Defendants. |
| Court | U.S. District Court — Eastern District of Virginia |
Ronald M. Gates, John W. McCormick, Boyd, Payne, Gates & Farthing, Norfolk, Va., for plaintiff.
Moffett B. Roller, Condon & Forsyth, New York City, for Aerolineas Argentinas.
Joseph M. Young, Reynolds, Smith & Winters, Norfolk, Va., for Argentine Naval Com'n.
This matter arises on the motion of the Argentine Naval Commission to dismiss the above-styled action asserting that this Court lacks both subject matter and in personam jurisdiction over the defendant pursuant to the Foreign Sovereign Immunities Act of 1976, 28 U.S.C. § 1602, et seq. (1977). For the reasons stated below, the defendant's motion to dismiss is GRANTED.
The plaintiff, Unidyne Corporation, alleges in the complaint at hand that a C-4 Ionosounde Pulse Radar Unit, a sophisticated instrument used to test levels of the ionosphere, owned by the Argentine Navy was shipped to Unidyne for repair but was damaged in transit. Pursuant to a repair contract, the Argentine Navy Procurement Office shipped the C-4 Recorder from Buenos Aires, Argentina, to Unidyne's Virginia plant via Aerolineas Argentinas on July 8, 1981. Because Aerolineas Argentinas does not fly into Virginia, the C-4 Recorder was transferred to Trans World Airlines, Inc. (TWA) at the John F. Kennedy International Airport in New York under regular interline procedures. TWA transported the C-4 Recorder to Dulles Airport in Virginia, and on July 28, 1981, the unit was transferred a second time to Groome Transportation, Inc. who carried the cargo by truck to the plaintiff's address in Norfolk, arriving on July 29, 1981. Without dispute, the C-4 Recorder arrived in a seriously damaged condition.
In a subsequent telex message, Unidyne notified the Argentine Naval Office in Buenos Aires of the damage and requested that the Argentine government appoint Unidyne as a claims agent to process any prospective insurance claim against the carriers. On August 27, 1981, an Argentine Naval Commission ("ANC") officer, Alcides V. Cordi, made a visual inspection of the C-4 Recorder and, according to the plaintiff, instructed Unidyne to perform the repairs necessary to resolve the damage claim. On September 3, 1981, the Argentine Navy, not ANC, appointed Unidyne as its official claims agent. Thereafter, Unidyne entered into negotiations with the airlines, albeit unsuccessfully.
On July 29, 1983, Unidyne filed the instant action naming ANC and Aerolineas Argentinas as defendants. The complaint includes three counts. Only Count One, asserting a quantum meruit theory, is applicable against ANC. In essence, Unidyne claims that ANC induced the plaintiff to make repairs worth $43,600 to the C-4 Unit and that ANC was unjustly enriched thereby. Service was effected by mailing a copy of the summons and complaint to the Virginia Secretary of the Commonwealth pursuant to § 8.01-329 of the Virginia Code (1977 Repl.Vol. and 1983 Supp.). The Secretary of the Commonwealth acknowledged that service was made on August 8, 1983, and a copy of the summons and other papers filed were forwarded by certified mail to the ANC which were received by Captain Juan A. Holle on August 9, 1983.
ANC raises two grounds for dismissal. First, the defendant asserts that this Court has no in personam jurisdiction over ANC because service was improper and, further, that ANC lacks sufficient minimum contacts with the Commonwealth of Virginia to satisfy the constitutional guarantee of due process. Secondly, ANC claims it is immune from suit under the Foreign Sovereign Immunities Act, 28 U.S.C. § 1602 et seq. The Act provides that foreign states are generally immune from suits in the United States unless a particular exception applies. Here, the defendant, ANC, contends that they do not fit within any exception because they have not engaged in any commercial activity within the United States in connection with the instant action.
Jurisdiction in this action is predicated on 28 U.S.C. § 1330 which provides that district courts shall have subject matter jurisdiction over any nonjury civil action against a foreign state for in personam relief if the foreign state is not entitled to immunity. In personam jurisdiction is established only if proper service is effected under 28 U.S.C. § 1608. 28 U.S.C. § 1330(b). Therefore, in any nonjury civil action against a foreign state seeking in personam relief proper service as provided in a special statute, § 1608, is a jurisdictional prerequisite.
Initially, this Court must determine whether ANC is a foreign state. Section 1603 of Title 28 defines this term as follows:
A political subdivision of a foreign state includes all governmental units beneath the central government. Williams v. Shipping Corporation of India, 489 F.Supp. 526, 531 (E.D.Va.1980) aff'm 653 F.2d 875 (4th Cir.1981), cert. denied 455 U.S. 982, 102 S.Ct. 1490, 71 L.Ed.2d 691 (1982). For an entity to be a separate legal person, pursuant to 28 U.S.C. § 1603(b)(1), and as a result to be classified as an "agency or instrumentality of a foreign state", the corporation, association, foundation, or other entity, must be capable of suing or being sued in its own name, of contracting in its own name, or of holding property in its own name under the law of the foreign state where it was created. Id.; H.R.Rep. No. 94-1487, 94th Cong., 2d Sess. reprinted in 1976 U.S.Code & Ad.News 6604, 6614. See, Yessenin-Volpin v. Novosti Press Agency, 443 F.Supp. 849, 852 (S.D.N. Y.1978) ()
The ANC is a department of the Argentine Navy whose goal is to procure supplies from foreign countries. The ANC maintains an office in the District of Columbia which is staffed exclusively by active duty Argentine Naval officers on two-year assignments from Argentina. These naval officers are treated as diplomatic agents and report directly to the Argentine ambassador. All contracts are negotiated at the express decision and directive of the Argentine Navy itself. ANC's offices are located in a building owned by Argentina which flies the Argentine flag. The agency has no independent existence in Argentina precluding ANC from owning Argentine property in its own name and from suing or being sued in its official capacity in Argentina. ANC can do no act necessary to justify a finding that it is a separate legal person.
The ANC is part and parcel of the Argentine Navy thereby qualifying as a foreign state or a political subdivision of the Argentine government. The plaintiff has introduced no basis to differentiate ANC's existence as separate from the Argentine Navy. The ANC has no life other than that derived from Argentina; rather the agency is Argentina within the United States, not an entity independent of it. Cf. Croatan Books, Inc. v. Virginia, 574 F.Supp. 880, 885 (E.D.Va.1983). One may analogize ANC's position as a department within a larger division, intregal, but retaining minimal independent characteristics. Accordingly, ANC is not an "agency or instrumentality" as defined in § 1603(b).1
This distinction becomes important because service upon a foreign state substantially varies from service on an agency or instrumentality of a foreign state. Service on the political subdivision of a foreign state is as follows:
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