Mobil Corp. v. Abeille General Ins. Co. ( 1993 )

IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
No. 91-2401
MOBIL CORPORATION AND MOBIL
OIL CORPORATION, ET AL.,
Plaintiffs-Appellees,
versus
ABEILLE GENERAL INSURANCE CO., ET AL.,
Defendants,
THE INSURANCE COMPANY OF IRELAND, ET AL.,
Defendants-Appellants.
Appeal from the United States District Court
for the Southern District of Texas
( February 17, 1993 )
Before WILLIAMS, HIGGINBOTHAM, and BARKSDALE, Circuit Judges.
HIGGINBOTHAM, Circuit Judge:
Claiming to be the instrumentality of a foreign sovereign, the
Insurance Company of Ireland removed this suit from state to
federal court pursuant to the Foreign Sovereign Immunities Act. 28
U.S.C. §§ 1441(d), 1602 et seq. Finding that ICI had failed to
establish that the FSIA applied, the district court remanded. ICI
appeals, but we must dismiss for lack of appellate jurisdiction.
Mobil amended its pension plan annuity in the 1980's and has
been sued by many former employees. Seeking liability insurance
coverage of these claims, Mobil filed this suit in state court
seeking a declaratory judgment resolving coverage questions. One
policy in dispute was underwritten by ICI. Claiming to be a
foreign sovereign instrumentality, ICI removed the suit to federal
district court.1 ICI would have been entitled to a bench trial in
federal court under 28 U.S.C. § 1441(d).
ICI is an Irish corporation. At the time of underwriting, ICI
was not owned by the Irish government. When financial difficulties
threatened in 1985, the Irish government moved to preserve the
company. Sealuchais Arachais Teoranta, a holding company created
by the Irish Parliament and controlled by the Irish Minister for
Industry, Trade, Commerce, and Tourism, acquired all of ICI's
shares. With financial stability, its shares are to revert to the
original shareholders. The parties dispute the Minister's control
of ICI's operations.2 The district court remanded the case to
state court, holding that ICI was not the instrumentality of a
foreign sovereign, and that it had contractually waived any right
to remove.
Mobil disputes our jurisdiction because an "order remanding a
case to State court from which it was removed is not reviewable on
appeal or otherwise . . . ." 28 U.S.C. § 1447(d). Read in
conjunction with § 1447(c), the statute provides that remands based
1
The first notice of removal in this case was filed by
defendant Arab Insurance Group in November 1989. The district
court found that the FSIA did not apply to ARIG. Although ARIG
is jointly owned by Kuwait, Libya, and the United Arab Emirates,
it is incorporated in another country, Bahrain. See 28 U.S.C.
§ 1603(b)(3). This ruling was not appealed.
2
Since we lack jurisdiction to reexamine the district
court's FSIA finding, we do not discuss other evidence regarding
ownership and control of ICI and Sealuchais Arachais Teoranta.
2
on the lack of subject matter jurisdiction are not reviewable.
Thermtron Prods., Inc. v. Hermansdorfer, 423 U.S. 336, 343, 96 S.
Ct. 584, 589 (1976). Reviewability turns on the grounds for the
remand decision. Tillman v. CSX Transp., Inc., 929 F.2d 1023, 1026
(5th Cir.), cert. denied, 112 S. Ct. 176 (1991).
It is plain that the district court remanded, at least in
part, for lack of subject matter jurisdiction,3 finding that ICI
had not met its burden of establishing jurisdiction under FSIA,
stating "ICI's assertion that it is a foreign sovereign is tenuous
at best."
ICI urges that § 1447(d) permits an exception for FSIA cases.
ICI starts with the premise that not all remand orders are beyond
review. For example, a remand for reasons not authorized by
statute may be appealed. Thermtron, 423 U.S. at 351, 96 S. Ct. at
593. It continues with the observation that appellate jurisdiction
has also been extended to independent substantive matters which
would have terminated the lawsuit before the remand. See, e.g., In
re Life Ins. Co. of North America, 857 F.2d 1190 (8th Cir. 1988)
(holding that district court should have found ERISA preemption and
granted summary judgment rather than remand). ICI then notes that
denials of sovereign immunity from suit under FSIA are subject to
interlocutory appeal. See, e.g., Walter Fuller Aircraft Sales,
Inc. v. Republic of the Philippines, 965 F.2d 1375, 1379 n.4 (5th
Cir. 1992); Foremost-McKesson, Inc. v. Islamic Republic of Iran,
3
Once the district court found that it lacked subject matter
jurisdiction under the FSIA, there was no need to rule on Mobil's
contention that ICI had contractually waived any removal rights.
3
905 F.2d 438 (D.C. Cir. 1990). On this foundation, ICI would build
the conclusion that unique FSIA concerns justify reviewing the
district court's purportedly "substantive" decision that ICI is not
an instrumentality of Ireland; that the decision incidentally
defeated federal subject matter jurisdiction is of no moment.
We are not persuaded that any of these cases permit an
exception from the clear meaning of § 1447(d). Congress enacted
§ 1447(d) so that state court actions could proceed without delay
if federal courts consider proper factors and remand, regardless of
the correctness of their jurisdictional decisions. See Robertson
v. Bell, 534 F.2d 63, 66 n.5 (5th Cir. 1976). The district court's
decision here was a jurisdictional call, despite ICI's effort to
drape it with a substantive label. "Although the existence of
removal jurisdiction may depend upon substantive matters, the
absence of removal jurisdiction is a procedural defect" governed by
§ 1447(c). Hopkins v. Dolphin Titan Int'l, Inc., 976 F.2d 924, 926
(5th Cir. 1992).
Section 1447(d) predated FSIA and its removal provision, but
Congress made no exception for appellate review of a remanded FSIA
case, as it has done for civil rights and FDIC cases. See 28
U.S.C. § 1447(d); 12 U.S.C. § 1819(b)(2)(C). Relatedly, in waiving
the sovereign immunity of the United States, Congress did not
provide a FTCA exception to § 1447(d) and this court has refused to
create one. Mitchell v. Carlson, 896 F.2d 128, 131 (5th Cir.
1990). The FSIA has no such exception and, as in Mitchell, we
"must adhere to the broad application of § 1447(d)." Id.
4
ICI contends that a remand based upon an erroneous denial of
foreign sovereign status could strip a sovereign of immunity from
suit by insulating that deprivation from appellate review. Mobil
responds that the immunity question would remain subject to
examination upon appeal in the state courts.4 The contention that
an unreviewed remand works a practical deprivation of immunity is
not without force. Whatever its ultimate merit, its risk is
inherent in the omission by Congress of an exception to the
withholding of appellate review.
DISMISSED FOR LACK OF APPELLATE JURISDICTION.
4
The FSIA governs actions in state courts as well as federal
courts. See 28 U.S.C. § 1602.
5