Mike Meier,
Attorney at Law, summary of legal development: Eleventh Circuit considers
whether Caribbean Airlines, Ltd., a company majority-owned by the Minister of
Finance of Trinidad and Tobago, qualifies for jury immunity under the Foreign
Sovereign Immunities Act, 28 U.S.C. § 1330, in a negligence action
Rovin
Singh, a Florida resident, suffered a stroke while on board of Caribbean
Airlines, Ltd. (CAL). CAL is an international airline based in the Republic of
Trinidad and Tobago (Trinidad and Tobago) and is 84-percent owned by the
Minister of Finance of Trinidad and Tobago (Minister). The Minister is a
corporation organized under the “Minister of Finance (Incorporation) Act”
responsible for all financial or fiscal matters of Trinidad and Tobago,
including administering the Ministry of Finance of Trinidad and Tobago
(Ministry), and holding and administering the state’s property.
Singh
originally filed his complaint in state court, and it was later removed to the
Southern District of Florida. In his amended complaint, Singh included a jury
demand, which CAL moved to strike, citing the Foreign Sovereign Immunities Act
(FSIA), 28 U.S.C. § 1441(d). CAL claimed it qualified as a “foreign state” as
defined in the FSIA, see 28 U.S.C. § 1603(a), and asserted its immunity from a
jury trial. The district court applied a “core function” test and concluded
that the Minister should be considered a “political subdivision” of Trinidad
and Tobago, unless it was a legal entity separate from the government of
Trinidad and Tobago. The district court held that it was not and granted CAL’s
motion. After a bench trial, in which it found that CAL was not negligent, the
district court entered judgment in CAL’s favor. Singh then appealed that
judgment and the underlying order granting the motion to strike.
The
United States Court of Appeals for the Eleventh Circuit affirms the district
court’s order striking the jury demand and the final judgment.
The
issue here is whether an agency or instrumentality of a foreign state qualifies
for jury immunity under the FSIA, 28 U.S.C. § 1330, in a negligence action.
Before
deciding this issue, the Court has to determine whether CAL is an agency or
instrumentality of a foreign state.
“As
a general matter, the FSIA standardizes the sovereign immunity of foreign
states. See id. § 1604. That general rule has exceptions. See id. §§ 1605-07.
Still, a foreign state is granted immunity from jury trials and is entitled to
a bench trial should such an exception apply. See id. § 1441(d). ‘A `foreign
state’ . . . includes a political subdivision of a foreign state or an agency
or instrumentality of a foreign state as defined in subsection (b).’ Id. §
1603(a). Subsection (b) defines an ‘agency or instrumentality of a foreign
state” to include “any entity . . . a majority of whose shares or other ownership
interest is owned by a foreign state or political subdivision thereof.’ Id. §
1603(b) (internal quotation marks omitted). Thus, an agency or instrumentality
of a political subdivision of a foreign state may be treated as a foreign state
for purposes of § 1441(d).”
“At
first glance, it may seem that majority ownership by an agency or
instrumentality, which would be deemed a foreign state under the FSIA, would
make the subsidiary itself an agency or instrumentality, and thus, a foreign
state under the FSIA. However, Supreme Court precedent squarely forecloses any
such ‘corporate tiering’ theory whereby a corporate subsidiary could claim
foreign state status under the FSIA because its parent is majority-owned by a
foreign state. See Dole Food Co. v. Patrickson, 538 U.S. 468, 47378, 123 S. Ct.
1655, 165962 (2003) (‘A corporation is an instrumentality of a foreign state
under the FSIA only if the foreign state itself owns a majority of the
corporation’s shares.’). In that opinion, the Court affirmed the Ninth
Circuit’s rejection of the contention that agency or instrumentality status of
a parent confers the same status on a majority-owned subsidiary. See id. at
473, 123 S. Ct. at 1659.”
Singh
argued that Dole Food settles this appeal. CAL pointed out that, even if a
subsidiary of an agency or instrumentality is not entitled to foreign state
immunity under the FSIA, the Minister is not an agency or instrumentality, but
a political subdivision of Trinidad and Tobago. Moreover, majority-owned
subsidiaries of political subdivisions are themselves entitled to foreign state
status under the FSIA. “[…] See § 1603(b)(2) (‘An `agency or instrumentality of
a foreign state’ means any entity . . . a majority of whose shares or other
ownership interest is owned by a foreign state or political subdivision
thereof. . . .’).”
As
Singh only disputed the Minister’s characterization as a political subdivision
of Trinidad and Tobago, the Court turns to analyze this question applying the
“core functions” test.
“The
core functions test asks ‘whether the core functions of the foreign entity are
predominantly governmental or commercial.’ Transaero, Inc. v. La Fuerza Aerea
Boliviana, 30 F.3d 148, 151 (D.C. Cir. 1994). The rationale behind this test is
based largely on the FSIA’s purpose of standardizing federal courts’
jurisdiction over the commercial activities of foreign states. See 28 U.S.C. §
1602; see also Republic of Argentina v. Weltover, Inc., 504 U.S. 607, 611, 112
S. Ct. 2160, 2164 (1992) (‘The most significant of the FSIA’s exceptions [to
the sovereign immunity of foreign states] . . . is the `commercial’ exception
of § 1605(a)(2). . . .’). The lesser protections the FSIA offers to agencies or
instrumentalities of foreign states reflect the significance of its distinction
between traditional governmental activities and commercial activities. See 28
U.S.C. § 1606 (‘[A] foreign state except for an agency or instrumentality
thereof shall not be liable for punitive damages. . . .’ (emphasis added)); id.
§ 1610(a)(b), (d) (limiting execution against property owned by foreign states
to property “used for a commercial activity’). The distinction is appropriate
because the FSIA repealed sovereign immunity for commercial activity while
preserving the same for inherently governmental functions. See Transaero, 30
F.3d at 15152. […]”
The
conclusions from the factual findings were that the Minister conducts much of
the financial, fiscal and administrative functions of Trinidad and Tobago and
the Ministry; that the Minister is responsible for holding and administering
Trinidad and Tobago’s property; and that the Minister is appointed by the
President in accordance with the provisions of the Constitution of Trinidad and
Tobago. The Court thus agrees with the district court’s holding that the Minister
“is part of the Ministry” and, accordingly, a political subdivision of Trinidad
and Tobago.
“Singh
contends that the Minister’s creation by the Minister of Finance
(Incorporation) Act and the fact that it is organized as a corporation sole do
not distinguish this case. See First Nat’l City Bank v. Banco Para El Comercio
Exterior de Cuba, 462 U.S. 611, 62627, 103 S. Ct. 2591, 2600 (1983)
(‘[G]overnment instrumentalities established as juridical entities distinct and
independent from their sovereign should normally be treated as such.’). We
first note that separate legal identity does not foreclose political
subdivision status. With that in mind, record evidence that the Minister ‘is
not incorporated under the laws of Trinidad and Tobago for the purpose of
carrying on a trade or business for gain and, as `corporate sole,’ is expressly
excluded from the definition of a `body corporate’ under’ Trinidad and Tobago’s
law governing private companies weighs in favor of governmental status and
against commercial status.”
“Furthermore,
to the extent that Dole Food holds that corporate subsidiaries are not entitled
to agency or instrumentality status, that case does not accommodate the
circumstances here. There, the Court did not have to consider whether the corporate
parent was itself a political subdivision because the subsidiaries did not so
argue. In fact, the Court described the corporate parent directly owned by the
foreign state as an instrumentality. See Dole Food, 538 U.S. at 473, 123 S. Ct.
at 1659 (expressly agreeing with the Ninth Circuit’s holding characterizing the
corporate parent as an instrumentality). Here, CAL has squarely argued that the
Minister, the analogue of Dole Food’s corporate parent, is a political
subdivision.”
“Because
we conclude that the district court correctly held that the Minister is a
political subdivision of Trinidad and Tobago, CAL qualifies as an agency or
instrumentality of Trinidad and Tobago, and the district court’s strike of
Singh’s jury demand was not erroneous.”
The
Court affirms the district court’s order and the final judgment.
Citation: Singh Ex. Rel.
Singh v. Caribbean Airlines Ltd., 798 F.3d 1355 (11th Cir. 2015).
