SUBIR GUPTA, Plаintiff-Appellee, v. THAI AIRWAYS INTERNATIONAL, LTD., Defendant-Appellant.
No. 04-56389
UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT
Filed May 30, 2007
487 F.3d 759
Before: Eugene E. Siler, Jr.,* A. Wallace Tashima, and Carlos T. Bea, Circuit Judges. Opinion by Judge Bea; Dissent by Judge Tashima
D.C. No. CV-04-00152-RT. Appeal from the United States District Court for the Central District of California. Robert J. Timlin, Senior District Judge, Presiding. Argued October 25, 2006. Pasadena, California. Submitted May 30, 2007. *The Honorable Eugene E. Siler, Jr., Senior United States Circuit Judge for the Sixth Circuit, sitting by designation.
COUNSEL
Luis E. Lopez, Lopez & Morris, LLP, Riverside, California, for the plaintiff-appellee.
OPINION
BEA, Circuit Judge:
Thai Airways, International (“Thai Airways“) appeals from the district court‘s order denying Thai Airways’ motion to dismiss for lack of subject matter jurisdiction pursuant tо
I.
Subir Gupta, Plaintiff-Appellee, was scheduled to fly from Bangkok to Los Angeles. When Gupta attempted to board the plane bound for Los Angeles, Thai Airways employees refusеd to allow Gupta to board because they determined his United States Visa was invalid. Gupta claims the employees “subjected him to unwarranted accusations of fraud after [he] presented a valid and current U.S. Visa.” Gupta was unable to fly to Los Angeles on this date and claims he missed a lucrative business meeting.
Gupta timely filed a complaint in California Superior Court, Los Angeles County, alleging Thai Airways employees subjected him to unwarranted accusations of fraud regarding his visa that led to professional business losses. Gupta‘s complaint alleged claims of (1) negligence; (2) respondeat superior liability; (3) negligent hiring, training, and/or retention of unfit employee; (4) intentional infliction of emotional distress; (5) employer‘s authorization of employee‘s wrongful conduct; (6) slander per se; and (7) intentional interference with contractual relations.
Thai Airways successfully moved to dismiss for lack of subject matter jurisdiction1 asserting it was a “foreign state” under FSIA, and no exception to the FSIA was applicable.2
The superior court rejected Gupta‘s assertion that Thai Airways had implicitly waived its immunity under
Thai Airways moved to dismiss Gupta‘s federal case pursuant to Federal Rules of Civil Procedure
Gupta responded by asserting that Thai Airways is subject to the jurisdiction of United State courts pursuant to the Warsaw Convention, which gоverns the international transportation of passengers and cargo. See Convention for the Unification of Certain Rules Relating to International Transportation by Air, Oct. 12, 1929, 49 Stat. 3000, T.S. No. 876 (1934), reprinted in note following
In ruling on Thai Airways’ motion to dismiss, the district court held that the prior state judgment did not bar relitigation of the claim in federal court. Nominally applying the preclusion rules of California, the court explained that “a court‘s dismissal for lack of jurisdiction is not res judicata as to the merits of the claim because it was not a judgment on the merits.” Because the state court‘s order dismissed Gupta‘s action for lack of subject matter jurisdiction based on Thai Airways’ immunity under the FSIA, the court held it “was not a judgment on the merits and has no preclusive effect.”
Next the district court held that “[s]uits against foreign states under the Warsaw Convention are excepted from FSIA immunity.” On this basis, the district court then held that the suit against Thai Airways, even though it is a foreign state-owned carrier, was properly brought in United States federal court. The Convention applied to this case, the district court reasoned, because the act of embarking on an international airline flight was sufficient to bring the incident within the ambits of the Convention.
Finally the court explained that the forum was proper because Article 28 of the Warsaw Convention allows for actions
Thai Airways now appeals the district court‘s order denying its motion to dismiss on grounds of Rule 12(b)(1). Thai Airways argues that Gutpa‘s action in federal court is barred under principles of res judicata because the state court determined that Thai Airways is immune from suit in the United States on the identical claims asserted in Gupta‘s federal complaint.
II.
Because this appeal is from an order denying a motion to dismiss for lack of subject matter jurisdiction—an order which ordinarily is not appealable—we must first determine whether we have jurisdiction to consider Thai Airways’ appeal. See Savage v. Glendale Union High Sch., 343 F.3d 1036, 1040 (9th Cir. 2003) (stating that “the denial of a motion to dismiss is ordinarily not a complete and final judgment subject to appeal . . .“). Although the parties did not raise the issue of jurisdiction, we have the obligation to confirm our jurisdiction sua sponte before determining whether the California state court‘s holding that Thai Airways is immune from suit under the FSIA is res judicata in federal court. WMX Techs., Inc. v. Miller, 104 F.3d 1133, 1135 (9th Cir. 1997) (en banc) (“Although the parties did not raise the question of our jurisdiction, we have raised it sua sponte, as we must.“). We conclude that jurisdiction exists.
[1] The FSIA “is the exclusive source of subject matter jurisdiction over all suits involving foreign states or their instrumentalities.” Compania Mexicana de Aviacion, S.A. v. U.S. Dist. Ct., 859 F.2d 1354, 1358 (9th Cir. 1988) (per curiam). Hence, only if one of the Act‘s “specified exceptions to sovereign immunity appliеs” may a court exercise subject matter jurisdiction over a foreign sovereign. Verlinden B.V. v. Cent. Bank of Nigeria, 461 U.S. 480, 489 (1983).5
[2] Because jurisdiction over a foreign sovereign may be exercised only by applicability of an exception to the FSIA, we have long held that “an order denying immunity under the FSIA is appealable under the collateral order doctrine.” Compania Mexicana, 859 F.2d at 1358.6
insures that ‘a foreign state shall be immune from the jurisdiction of the courts of the United States and of the States except as provided [in the Act].’ ” Id. (alteration in the original) (quoting
We note that each of our sister circuits that has considered whether a denial of a motion to dismiss on grounds of foreign sovereign immunity is an appealable сollateral order have unanimously held that it is. See Rux v. Republic of Sudan, 461 F.3d 461, 466-67 (4th Cir. 2006); Southway v. Cent. Bank of Nigeria, 198 F.3d 1210, 1214 (10th Cir. 1999); Rein v. Socialist People‘s Libyan Arab Jamahiriya, 162 F.3d 748, 755-56 (2d Cir. 1998); Hond. Aircraft Registry, Ltd. v. Gov‘t of Hond., 129 F.3d 543, 545 (11th Cir. 1997); Fed. Ins. Co. v. Richard I. Rubin & Co., 12 F.3d 1270, 1279-82 (3d Cir. 1993); Stena Rederi AB v. Comision de Contratos, 923 F.2d 380, 385-86 (5th Cir. 1991); Foremost-McKessen, Inc. v. Islamic Republic of Iran, 905 F.2d 438, 442-43 (D.C. Cir. 1990); Gould, Inc. v. Pechiney Ugine Kuhlmann, 853 F.2d 445, 450-52 (6th Cir. 1988); Segni v. Commercial Office of Spain, 816 F.2d 344, 346-47 (7th Cir. 1987).
Thai Airways moved the district court to dismiss Gupta‘s action on two grounds: lack of subject matter jurisdiction under
It is from this order that Thai Airways is appealing. Under Compania Mexicana,
III.
A.
The existence of subject matter jurisdiction under the FSIA is a question of law reviewed de novo. See Coyle v. P.T. Garuda Indonesia, 363 F.3d 979, 984 n.7 (9th Cir. 2004); Blaxland, 323 F.3d at 1203.
B.
While the order from which Thai Airways is appealing is one denying its motion to dismiss for lack of subject matter jurisdiction, Thai Airways’ first theory supporting dismissal is that the California state court already determined Thai Airways was immune under FSIA. Thus, Thai Airways contends this determination has preclusive effect in federal court under the principle of res judicata. We agree.
[3] Whether a prior state court judgment precludes relitigation of an identical claim in federal court depends on the preclusion rules of the state. Migra v. Warren City Sch. Dist. Bd. of Educ., 465 U.S. 75, 81 (1984); Allen v. McCurry, 449 U.S. 90, 96 (1980). This principle results from the statutory command in
[4] Under California law, ” ‘[a]n order denying a motion or dismissing a proceeding for procedural reasons such as lack of jurisdiction is not res judicata as to the merits of any underlying substantive question.’ ” Kalai v. Gray, 109 Cal. App. 4th 768, 774 (2003) (emphasis added) (quoting Gorman v. Gorman, 90 Cal. App. 3d 454, 462 (1979)).10 However, and
determinative here, such dismissal does bar re-litigation of ” ‘issues necessary for the determination of jurisdiction.’ ” MIB, Inc. v. Super. Ct., 106 Cal. App. 3d 228, 233 (1980) (quoting Nichols v. Canoga Indus., 83 Cal. App. 3d 956, 967 (1978)).11 As the California Supreme Court explained, “when the decision on the jurisdictional question is based upon a determination of the merits of an issue before the court, it constitutes a binding determination of that issue.” Shore v. Shore, 43 Cal. 2d 677, 681 (1954).
C.
[5] Here, the California state court concluded it lacked subject matter jurisdiction because Thai Airways is 79% owned by the Ministry of Finance of the Kingdom of Thailand and is therefore immune from suit in courts in the United States under the FSIA. See
[6] Under California law, it makes no diffеrence that Gupta now contends the Warsaw Convention provides the court jurisdiction. The California Appellate Court in MIB faced a similar situation where in the fourth action attempting to establish jurisdiction over an out-of-state defendant, the plaintiffs introduced new evidence and pleaded new causes of action. 106 Cal. App. 3d at 231. The court held that evidence “which was not introduced in the earlier proceedings” does not overcome the preclusive effect of the prior decisions. Id. at 235. Even if wrong, an earlier decision involving the same issue and the same parties, “is as conclusive as a correct one.” Id. Gupta had a full and fair opportunity to establish the jurisdiction of United Stаtes courts over Thai Airways. He failed to do so. He does not now get a do-over.13
Accordingly, we REVERSE and REMAND with instructions to the district court to vacate its order and dismiss Gupta‘s suit for lack of jurisdiction.14
REVERSED and REMANDED.
The majority finds appellate jurisdiction in this case only by mistakenly assuming that if any issue decided by the district court is subject to interlocutory appeal, any other issue decided in the same order can also be reached on interlocutory appeal. Because I disagree and would dismiss this interlocutory appeal for lack of appellate jurisdiction over the limited issues raised and not reach the merits, I respectfully dissent.
Under the collateral order doctrine, this court would have jurisdictiоn over an interlocutory appeal from that portion of the district court‘s order denying Thai Airways’ claim to sovereign immunity under the Foreign Sovereign Immunities Act (“FSIA“),
Thai Airways was very specific of the issues it raised on this appeal. It raised only two issues. To quote fully the “Issues Presented for Review” section of Thai Airways’ opening brief:
- Whether the District Court erred in Denying Thai Airways’ motion to dismiss after the State Superior Court determined, in an identical prior action, that Thai Airways was immune from suit on Gupta‘s claim in the United States under the Foreign Sovereign Immunities Act (“FISA“).
28 U.S.C. § 1604 ; Saudi Arabia v. Nelson, 507 U.S. 349, 355 (1993). - Whether Gupta‘s subsequent identical action аgainst Thai Airways in federal court was a de facto appeal of the prior State Court determination and thus barred under the Rooker-Feldman Doctrine.
In support of its first issue, Thai Airways argued that the district court erred in denying its motion to dismiss because the prior ruling by the state superior court was res judicata. In support of its second issue, Thai Airways argued that under the Rooker-Feldman doctrine,1 Gupta‘s action in the district court was a de facto appeal of the state court‘s dismissal of his earlier action. Thai Airways raised no argument in its
briefs that it was immune from suit as a foreign state under the FSIA. Yet, because Thai Airways is taking an interlocutory appeal from an ”order denying Thai Airways immunity under the FSIA,” Maj. op. at 6461 (emphasis added), the majority concludes, without analysis and erroneously in my view, that we have jurisdiction to review that рortion of the district court‘s order denying dismissal on the basis of res judicata.
The collateral order doctrine is intended to allow immediate appeal only of “that small class [of decisions] which finally determine claims of right separable from, and collateral to, rights asserted in the action, too important to be denied review and too independent of the cause itself to require that appellate consideration be deferred until the whole case is adjudicated.” Cohen v. Beneficial Indus. Loan Corp., 337 U.S. 541, 546 (1949). “The requirements for collateral order appeal have been distilled down to three conditions: that an order (1) conclusively determine the disputed question, (2) resolve an important issue completely seрarate from the merits of the action, and (3) be effectively unreviewable on appeal from a final judgment.” Will v. Hallock, 126 S. Ct. 952, 957 (2006) (citation and internal quotation marks omitted).
While it is true that our case law permits an immediate interlocutory appeal from an order denying a motion to dismiss based on foreign sovereign immunity, Compania Mexicana de Aviacion, S.A. v. U.S. Dist. Ct., 859 F.2d 1354, 1358 (9th Cir. 1988) (per curiam), it is equally well-settled that the denial of a motion to dismiss based on res judicata grounds is not immediately appealable. See Will, 126 S. Ct. at 960 (“[The] rule of respecting a prior judgment by giving a defense against relitigation has not been thought to protect values so great that only immediate appeal can effectively vindicate them.“). To repeat, in this case, while it is true that the order Thai Airways appeals from rejected its claim of sovereign immunity, Thai Airways’ only arguments on appeal are
directed to the other bases of the order, those resting on res judicata and the Rooker-Feldman doctrine.2
Although the cases discussing the collateral order doctrine sometimes loosely refer to interlocutory orders as being appealable, in fact, the cases actually analyze the specific claim or issue presented in determining the scope of their jurisdiction on an interlocutory appeal. And each claim presented must independently meet the requirements of the collateral order doctrine in order for it to be considered on interlocutory appeal. Appellate jurisdiction over one claim rejected in a district court order does not confer jurisdiction over all other claims rejected in the same order. Abney v. United States, 431 U.S. 651, 662-63 (1977); see also United States v. Yellow Freight Sys., Inc., 637 F.2d 1248, 1251 (9th Cir. 1980) (“Inquiry into the immediate appealability of a particular pretrial order must focus upon each claim asserted.“).
In Abney, after ruling that a denial of a criminal defendant‘s motion to dismiss on double jeopardy grounds is an immediately appealable collateral order, the Supreme Court noted that “we, of course, do not hold that other claims contained in the motion to dismiss are immediately appealable as well.” 431 U.S. at 662-63. The Court held that “other claims presented to, and rejected by, the district court in passing on the accused‘s motion to dismiss . . . . are appealable if, and only if, they too fall within Cohen‘s collateral-order exception to the final-judgment rule.” Id. at 663. The Court thus held that the court of appeals lacked jurisdiction to review the district
court‘s denial of the motion tо dismiss based on insufficiency of the indictment. Id.3
The principle that appellate courts must examine each claim or issue presented separately to determine their jurisdiction on
Hence, the issue here is whether separate claims/defenses are raised by Thai Airways’ arguments to the district court of (1) a substantive entitlement to foreign sovereign immunity, and (2) issue preclusion as to its entitlement to foreign sovereign immunity. Here, under simple logic, applying Abney, if the two arguments constitute separate claims, then this court does not have jurisdiction over an appeal taken solely from the portion of the district court‘s order rejecting Thai Airways’ issue preclusion argument. The fact that the ruling on one argument is interlocutorily appealable does not mean that the other is as well.4
There may be instances where it is not entirely clear whether the two arguments can be considered separate defenses.5 An immunity defense and an issue preclusion defense, however, are clearly unrelated, separate defenses. See, e.g., Timpanogos Tribe v. Conway, 286 F.3d 1195, 1200 (10th Cir. 2002) (refusing to exercise pendent jurisdiction over a res judicata claim in an interlocutory appeal of the denial of a motion to dismiss on Eleventh Amendment grounds, because there was no showing that the res judicata claim was “inextricably intertwined” with the Eleventh Amendment claim).6
Here, the rationale for applying the Cohen collateral order doctrine to appeals from denials of foreign sovereign immunity does not encompass instances where the appeal is taken and supported solely on the grounds of issue preclusion. The Supreme Court has pointedly remarked that “the third Cohen question, whether a right is ‘adequately vindicable’ or ‘effectively reviewable [on appeal from a final judgment],’ simply cannot be answered without a judgment about the value of the interests that would be lost through rigorous application of a final judgment requirement.” Digital Equip. Corp. v. Desktop Direct, Inc., 511 U.S. 863, 878-79 (1994).
In explaining why pretrial rulings based on res judicata grounds do not merit immediate appeal, courts have emphasized that the res judicata doctrine is not meant to give a defendant an absolute right to avoid trial. See, e.g., In re Corrugated Container Antitrust Litig., 694 F.2d 1041, 1043 (5th Cir. 1983) (“[T]he only injury [from denial of immediate review] . . . is that [the defendant] will have to present its defense at trial, but that sort of injury follows in every denial of a motion to dismiss a complaint and does not justify an exception to the final-judgment rule.“); see also R.R. Donnelley & Sons Co. v. FTC, 931 F.2d 430, 432-33 (7th Cir. 1991) (“Preclusion in a civil case creates a ‘right not to be tried’ only in the sense that it creates a right to win; but many legal doctrines do that without also creating a right to interlocutory appellate review.“).
Here, in relying only on issue preclusion arguments, Thai Airways is not arguing that the substantive purposes of the FSIA would be served by granting it sovereign immunity. Those admittedly weighty interests are not the interests at stake in this appeal. Rather, Thai Airways is only arguing that respect for another court‘s judgment entitles it to dismissal. The interests at stake in the claim being asserted are simply those ordinarily protected by the doctrine of res judicata. Any interest that Thai Airways may legitimately possess in avoiding suit under thе FSIA is not truly implicated in this appeal, because Thai Airways is not arguing the merits of its claim to FSIA immunity. Thus, in reaching the merits of this interlocutory appeal, the majority frustrates “the substantial finality interests § 1291 is meant to further, Will, 126 S. Ct. at 957, and expands the intended “modest scope” of the collateral order doctrine, id. at 958.
Had Thai Airways chosen to appeal the district court‘s ruling as to its entitlement to foreign sovereign immunity under the FSIA, we might have exercised jurisdiction over that appeal. However, nowhere in its opening or reply brief did Thai Airways make this argument. In fact, Thai Airways affir-
matively declared that the merits of its FSIA defense are not within the scope of its appeal, arguing in its reply brief that “the applicability of the Wаrsaw Convention is not an issue on this appeal.”7 By electing not to argue its entitlement to FSIA immunity on the merits, Thai Airways has waived the issue for purposes of this appeal. United States v. Kama, 394 F.3d 1236, 1238 (9th Cir. 2005). Thai Airways’ issue preclusion defense is an insufficient ground upon which to base our appellate jurisdiction over this interlocutory appeal.
Because I would dismiss this appeal for lack of jurisdiction, I respectfully dissent.
Notes
461 U.S. at 493-94. The transactional definition of a “claim” for purposеs of claim preclusion, which is aimed at determining whether two suits allege the same cause of action, is unhelpful here, where the court must consider the relationship between defenses rather than between claims. Cf. Cent. Delta Water Agency v. United States, 306 F.3d 938, 952 (9th Cir. 2002) (most important factor in claim preclusion analysis is “whether the two suits arise out of the same transactional nucleus of facts“).The [FSIA] must be applied by the District Courts in every action against a foreign sovereign, since subject matter jurisdiction in any such action depends on the existence of one of the specified exceptions to foreign sovereign immunity[.] At the threshold of every action in a District Court against a foreign state, therefore, the court must satisfy itself that one of the exceptions applies—and in so doing it must apply the detailed federal law standards set forth in the Act.
14A Charles Alan Wright, Arthur R. Miller, & Edward H. Cooper, Juris-diction and Related Matters § 3662 (3d ed. 1998) (emphasis added). The same result occurs when the private party first brought the case in the state court, then filed in federal court. See Kremer v. Chem. Constr. Corp., 456 U.S. 461, 466 (1982).A district court judgment dismissing an action for lack of subject matter jurisdiction because of FSIA is determinative of thе sovereign immunity question. Thus, a private party, who lost on the question of jurisdiction, cannot bring the same case in a state court claiming the federal court‘s decision extended only to the question of federal jurisdiction and not to sovereign immunity or only had force in the federal courts.
Hence, the “sovereign immunity question” is here settled, and to deny interlocutory appeal in this case would frustrate the purpose of FSIA, which is to provide, like qualified immunity, “an immunity from suit rather than a mere defense to liability . . . .” Compania Mexicana, 859 F.2d at 1358 (emphasis added); see Saucier v. Katz, 533 U.S. 194, 200-01 (2001); Brittain v. Hansen, 451 F.3d 982, 987 (9th Cir. 2006) (“[Q]ualified immunity is ‘immunity frоm suit rather than mere defense to liability . . . .’ ” (quoting Mitchell, 472 U.S. at 526)). Thai Airways’ immunity, to which it is entitled pursuant to the state court‘s decision, would be “effectively lost if [the] case is erroneously permitted to go to trial.” Compania Mexicana, 859 F.2d at 1358.
The decision in MIB fully accords with the explanation in Kalai that dismissal for procedural reasons does not bar future litigation of the merits of a claim. MIB simply prohibits re-litigation of jurisdictional facts already decided; the merits of the clаim may still be litigated in a court of competent jurisdiction. The present case is analogous to MIB because the superior court here made findings on jurisdictional facts.
The case before us bears no resemblance to Af-Cap. Here, on a purely factual question of immunity—ownership interest of more than 50% by a foreign sovereign and nonexistence of allegations of exceptions to FSIA—we are called upon to consider only whether California principles of res judicata bar Gupta from re-litigating Thai Airways’ immunity in federal court where a state court already determined the factual bаsis for the application of the FSIA: that Thai Airways is immune.