18 Jun Appellate Jurisdiction and the FSIA
The case of Powerex v. Reliant Energy Services presents a delicate procedural question regarding appellate jurisdiction and the FSIA immunity protections. Bottom line: Do federal appellate courts have jurisdiction over FSIA questions (i.e., whether a corporation is a foreign state entity) when an appeal is jurisdictionally barred? The answer from the Supreme Court today is no.
The case in many respects is fairly simple. Powerex argues it is a foreign state entity within the meaning of FSIA 1603(a) and as such it should have the right under 28 U.S.C. 1441(d) to remove a state court case to federal court. The federal district court concluded that Powerex was not a foreign state entity and remanded the case back to state court. On appeal to the Ninth Circuit, Powerex argued it was in fact a foreign state entity. Problem was, there is no appellate jurisdiction for such a remand question, as 28 U.S.C. 1447(d) provides that “[a]n order remanding a case to the State court from which it was removed is not reviewable on appeal or otherwise.”
Writing for the majority, Justice Scalia (joined by the same group as last week’s FSIA case of India v New York: Roberts, Kennedy, Souter, Thomas, Ginsburg, and Alito) concluded that the appellate jurisdiction statute is what it is, and the Ninth Circuit should not have considered Powerex’s foreign state entity argument on appeal.
[P]etitioner contends, with no textual support, that §1447(d) is simply inapplicable to a suit removed under the FSIA. It asserts that “§1447(d) must yield because Congress could not have intended to grant district judges irrevocable authority to decide questions with such sensitive foreign-relations implications.” We will not ignore a clear jurisdictional statute in reliance upon supposition of what Congress really wanted. Petitioner’s divination of congressional intent is flatly refuted by longstanding precedent:
“Section 1447(d) applies ‘not only to remand orders made in suits removed under [the general removal statute], but to orders of remand made in cases removed under any other statutes, as well.’ . . . Absent a clear statutory command to the contrary, we assume that Congress is ‘aware of the universality of th[e] practice’ of denying appellate review of remand orders when Congress creates a new ground for removal.”…
We are well aware that §1447(d)’s immunization of erroneous remands has undesirable consequences in the FSIA context. A foreign sovereign defendant whose case is wrongly remanded is denied not only the federal forum to which it is entitled (as befalls all remanded parties with meritorious appeals barred by §1447(d)), but also certain procedural rights that the FSIA specifically provides foreign sovereigns only in federal court (such as the right to a bench trial, see 28 U. S. C. §1330(a); §1441(d)). But whether that special concern outweighs §1447(d)’s general interest in avoiding prolonged litigation on threshold nonmerits questions, is a policy debate that belongs in the halls of Congress, not in the hearing room of this Court. As far as the Third Branch is concerned, what the text of §1447(d) indisputably does prevails over what it ought to have done.
In dissent, Justice Breyer does a good job explaining what is at stake for foreign state entities subject to suit in state court and an erroneous decision in federal district court:
Imagine that a private plaintiff brings a lawsuit in state court against a noncommercial division of a foreign nation’s government, say, a branch of that nation’s defense ministry or, for that matter, against the foreign nation itself. The FSIA provides a specific guarantee that such a suit cannot continue (except in certain instances that, for purposes of my example, are not relevant). 28 U. S. C. §§1602-1605. It achieves this objective by authorizing the foreign government to remove the case to federal court where a federal judge will determine if the defendant is indeed a foreign government and, if so, dismiss the case. §1441(d).
What happens if the foreign sovereign removes the case to federal court only to have the federal judge mistakenly remand the case to state court? As in an ordinary case, the lawsuit may well continue in the state tribunal. But, if so, unlike the ordinary case (say, a wrongly remanded diversity or “arising under” case)…, the removing party will have lost considerably more than a choice of forum. The removing party will have lost that which a different portion of the special statute sought to provide, namely, the immunity from suit that the FSIA sought to assure.
In a separate concurrence, Justices Kennedy and Alito seem particularly concerned with the dilemma facing alleged foreign state entities such as Powerex, and they wrote separately to urge congressional action.
When Congress acted through the [FSIA] to codify certain protections and immunities for foreign sovereigns and the entities of those sovereigns, it no doubt considered its action to be of importance for maintaining a proper relationship with other nations. And so it is troubling to be required to issue a decision that might well frustrate a policy of importance to our own Government. As the Court explains, however, the structure and wording of §1447(d) (2000 ed.) leave us no other choice. There is no latitude for us to reach a different result. If it is true that the statute as written and the judgment we issue today are inconsistent with the intent and purpose Congress wanted to express, then the immediate jeopardy that foreign sovereign entities will now face should justify urgent legislative action to enact the necessary statutory revisions.
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