Martyn Baylay v. Etihad Airways P.J.S.C.
881 F.3d 1032
7th Cir.
2018

Background

  • Baylay, an Etihad pilot (British citizen), was assaulted in October 2013 in an employer-paid hotel room in Chicago by fellow crewmember Saravdeep Mann using a bronze hotel decoration; Mann expressed anti-British remarks during the attack.
  • Mann was arrested, posted bond, then left the U.S. with Etihad’s assistance and did not return; Baylay required hospital treatment.
  • Baylay sued Etihad (UAE public joint stock company), Mann, the Westin’s corporate owners, and a security company in federal court asserting state-law claims (negligence, negligent retention, willful and wanton conduct); the security company was later voluntarily dismissed.
  • The district court dismissed Baylay’s claims against Etihad under Rule 12(b)(6), concluding the Illinois Workers’ Compensation Act (IWCA) exclusivity provisions required employee claims against an employer to be heard by the Illinois Workers’ Compensation Commission; that dismissal was certified for immediate appeal (No. 16-4113).
  • After Etihad’s dismissal, the district court dismissed the remaining state-law claims against Mann and the Westin entities without prejudice for lack of original jurisdiction and declined to exercise supplemental jurisdiction; Baylay appealed (No. 17-1958). The Seventh Circuit consolidated the appeals.
  • The Seventh Circuit affirmed: (1) FSIA does not preempt the IWCA; Etihad’s employee-related claims fall within the IWCA so the Commission must adjudicate them; and (2) the district court properly declined supplemental jurisdiction over the remaining state-law claims.

Issues

Issue Plaintiff's Argument Defendant's Argument Held
Whether the Foreign Sovereign Immunities Act (FSIA) preempts the IWCA and bars administrative (Commission) adjudication of claims against a foreign-state employer Baylay: FSIA vests exclusive adjudicative power over claims against foreign states in courts, so claims against Etihad cannot be sent to an administrative agency (the Commission) Etihad: FSIA governs immunity only; once immunity is rejected, state substantive law (IWCA) applies and its exclusivity can require Commission adjudication Held: FSIA does not preempt the IWCA; FSIA decides immunity but incorporates state substantive law (pass-through), so IWCA exclusivity governs employee claims against Etihad
Whether the IWCA’s exclusivity bars Baylay’s common-law claims against Etihad Baylay: Exceptions to exclusivity apply (argued IWCA doesn’t cover these claims; also raised employer-definition issue on appeal) Etihad: IWCA exclusivity applies because injury was accidental, arose out of and in the course of employment, and is compensable under the IWCA Held: IWCA exclusivity applies — attack deemed accidental/compensable (racial/ethnic motive analogous to Rodriguez); employer-definition argument forfeited on appeal
Whether the district court had original diversity jurisdiction over remaining claims (suit by a foreign plaintiff against a foreign defendant and U.S. citizens) Baylay: District court had diversity jurisdiction over claims against Mann and the Westin entities Defendants: Diversity statute does not authorize jurisdiction where a foreign plaintiff sues both foreign and U.S. citizen defendants such that no U.S. citizen is on the plaintiff side Held: No original diversity jurisdiction — statute and Seventh Circuit precedent foreclose jurisdiction where a sole foreign plaintiff sues a mix including a foreign defendant
Whether the district court abused discretion by declining supplemental jurisdiction over remaining state-law claims Baylay: District court should have kept supplemental jurisdiction (including over third-party contribution claims) Defendants: After Etihad’s dismissal, the state-law claims predominate; §1367(c) permits declining jurisdiction Held: No abuse of discretion — supplemental claims substantially predominate and dismissal was proper

Key Cases Cited

  • Argentine Republic v. Amerada Hess Shipping Corp., 488 U.S. 428 (explains FSIA provides the sole basis for U.S. court jurisdiction over foreign states)
  • First Nat’l City Bank v. Banco Para El Comercio Exterior de Cuba, 462 U.S. 611 (FSIA does not displace governing state substantive law once immunity is resolved)
  • Samantar v. Yousuf, 560 U.S. 305 (FSIA preemption principles and scope of immunity determinations)
  • Bolivarian Republic of Venezuela v. Helmerich & Payne Int’l Drilling Co., 137 S. Ct. 1312 (discussion of FSIA immunity framework)
  • Oveissi v. Islamic Republic of Iran, 573 F.3d 835 (describes FSIA as a "pass-through" to state law principles)
  • Allendale Mut. Ins. v. Bull Data Sys., Inc., 10 F.3d 425 (Seventh Circuit rule on diversity jurisdiction when a foreign plaintiff sues both foreign and U.S. defendants)
  • Tango Music, LLC v. Deadquick Music, Inc., 348 F.3d 244 (related Seventh Circuit precedent on diversity jurisdiction)
  • Meerbrey v. Marshall Field & Co., 564 N.E.2d 1222 (Ill. law: IWCA abrogates common-law employer liability and defines compensable workplace risks)
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