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Rex v. Cia. Pervana De Vapores

decided: September 17, 1981.



Before Aldisert, Weis and Sloviter, Circuit Judges.

Author: Aldisert

Before us is an interlocutory appeal certified under 28 U.S.C. § 1292(b) from a district court decision granting plaintiff-appellee's motion for a jury trial. Rex v. Cia. Pervana De Vapores, S.A., 493 F. Supp. 459 (E.D.Pa.1980). The issues certified and accepted for our review are whether all actions brought under 28 U.S.C. § 1330(a), enacted as § 2(a) of the Foreign Sovereign Immunities Act of 1976, Pub.L.No.94-583, 90 Stat. 2891 (hereinafter referred to as FSIA), must be tried to the court without a jury, whether that act is the sole basis for federal subject matter jurisdiction in civil actions against agencies or instrumentalities of foreign sovereigns, and, if the answers to both of these questions are affirmative, whether the FSIA is consistent with the seventh amendment guarantee of civil jury trial. We resolve each of the questions in the affirmative, and therefore reverse.


Because of the procedural status of the case, a detailed recitation of facts is unnecessary. Calvin Rex, the appellee, is a longshoreman who was injured while unloading cargo for the ship of the appellant, Compania Pervana De Vapores, S.A. The appellant is a Peruvian corporation, the stock of which is wholly owned by the Government of Peru. Appellee filed suit for damages under § 5(b) of the Longshoremen's and Harbor Workers' Compensation Act, 33 U.S.C. § 905(b), alleging federal subject matter jurisdiction by reason of diversity of citizenship, 28 U.S.C. § 1332, a federal question, 28 U.S.C. § 1331, and an action against a foreign sovereign, 28 U.S.C. § 1330(a). Included in his claim for relief was a request for a jury trial. The district court instructed the clerk to notify the Attorney General of the United States to allow his participation in the case.

In Rex v. Cia. Pervana De Vapores, S.A., 493 F. Supp. 459 (E.D.Pa.1980), the district court granted the demand for a jury trial. The court expressed concern that an interpretation of the FSIA, which creates federal jurisdiction over agents or instrumentalities of foreign states, as the exclusive basis for federal jurisdiction over foreign governments would unconstitutionally deprive plaintiffs of their right to jury trial. Section 1330(a), the jurisdictional provision of the FSIA, states:

The district courts shall have original jurisdiction without regard to amount in controversy of any nonjury civil action against a foreign state as defined in section 1603(a) of this title as to any claim for relief in personam with respect to which the foreign state is not entitled to immunity either under sections 1605-1607 of this title or under any applicable international agreement.

To avoid this possible constitutional infirmity, the court concluded that 28 U.S.C. §§ 1331 and 1332 provide federal civil actions against the commercial enterprises of foreign sovereigns, and that the right to jury trial has not been eliminated from these sections. 493 F. Supp. at 466-69. By refusing to construe § 1330(a) as the exclusive basis of federal jurisdiction, therefore, the district court obviated application of the seventh amendment to invalidate the statute.*fn1


The issues before us in this case have previously drawn the attention of two other courts of appeals. In Williams v. The Shipping Corp. of India, 653 F.2d 875 (4th Cir. 1981), and in Ruggiero v. Compania Peruana de Vapores "Inca Capac Yupanqui", 639 F.2d 872 (2d Cir. 1981), the courts affirmed district court orders striking jury demands on similar facts. Judge Friendly's opinion for the court in Ruggiero examined the relevant statutes and their legislative histories and concluded that § 1330(a) constitutes the sole basis of federal subject matter jurisdiction over a foreign sovereign or its entities. The court considered and rejected the theory posited by the district court in this case. It concluded that "(t)he (House and Senate) reports thus confirm what is patent from the statutory language Congress wished to provide a single vehicle for actions against foreign states or entities controlled by them, to wit, § 1330 and § 1441(d), its equivalent on removal, and to bar jury trial in each." 639 F.2d at 878.

Faced squarely with the seventh amendment question, the second circuit reasoned that the purpose of the seventh amendment is to preserve the right to jury trial as it existed in 1791 when the amendment became effective, and not to extend the right to new types of cases. Because the military and commercial operations of foreign governments were immune from suit until the middle of the twentieth century, the court concluded that the seventh amendment is inapplicable to these cases because no right of jury trial in similar cases existed when the seventh amendment became effective in 1791. Id. at 879. The court also analogized suits against foreign governments to suits against the United States, and noted that Congress can attach conditions to such suits as a predicate for creating federal jurisdiction over them. Id. at 880. It distinguished Curtis v. Loether, 415 U.S. 189, 94 S. Ct. 1005, 39 L. Ed. 2d 260 (1974), and Pernell v. Southall Realty, 416 U.S. 363, 94 S. Ct. 1723, 40 L. Ed. 2d 198 (1974) as holding "only that when Congress enlarges domestic substantive law or alters procedure in cases governed by it, the Seventh Amendment protects the right to jury trial if the new substantive right or proceeding is analogous to a suit at common law in 1791." 639 F.2d at 881 (citations omitted).

The court in Williams followed the Ruggiero analysis, holding that sections 1330 and 1441(d) are jurisdictionally exclusive and that the jury bar is constitutional. Citing McElrath v. United States, 102 U.S. 426, 26 L. Ed. 189 (1880), and Parsons v. Bedford, 28 U.S. (3 Pet.) 433, 7 L. Ed. 732 (1830), the court held that the seventh amendment applies only to defendants who could be sued at common law in 1791. Because the commercial vessels of foreign states were immune from suit in 1791, the action was not within the seventh amendment. We agree with the conclusions reached by the second and fourth circuits, although we arrive by a slightly different route.


In accordance with the oft-cited maxim that "(n)o court ought, unless the terms of an act (of Congress) rendered it unavoidable, to give a construction to it which should involve a violation, however unintentional, of the constitution," Parsons v. Bedford, 28 U.S. (3 Pet.) at 448, we must first examine the jurisdictional provisions of the FSIA to determine if a reasonable construction of them will avoid a conflict with the seventh amendment. See also St. Martin Evangelical Lutheran Church v. South Dakota, 451 U.S. 772, 778, 101 S. Ct. 2142, 2146, 68 L. Ed. 2d 612 (1981); United States v. Clark, 445 U.S. 23, 27, 100 S. Ct. 895, 899, 63 L. Ed. 2d 171 (1980); Califano v. Yamasaki, 442 U.S. 682, 693, 99 S. Ct. 2545, 2553, 61 L. Ed. 2d 176 (1979); New York City Transit Authority v. Beazer, 440 U.S. 568, 582-83 & n.22, 99 S. Ct. 1355, 1364, 59 L. Ed. 2d 587 & n.22 (1979). This inquiry requires us to determine if Congress clearly intended to withhold jury trials in FSIA actions, and, if so, whether § 1330(a) is the exclusive jurisdictional grant in this case.


Section 1330(a) was intended to provide a comprehensive treatment of jurisdiction over actions against foreign states. H.R.Rep.No.1487, 94th Cong., 2d Sess. 14, reprinted in (1976) U.S.Code Cong. & Ad.News 6604, 6613. The parties concede that appellant is a "foreign state" for purposes of § 1330(a).*fn2 The parties also agree that appellant is entitled to no claim of immunity under the FSIA.*fn3

Although Congress could have stated with more elegance that actions against foreign states and their instrumentalities could be litigated in federal court only to a judge sitting without a jury, we have been shown no indication that Congress intended its grant of jurisdiction over "nonjury civil action(s)" to mean anything other than a statutory denial of jury trial in these cases. See 1 J. Moore, Federal Practice P 0.66(4) at 700.179-.180 (2d ed. 1980). The parallel statute, 28 U.S.C. § 1441(d), which allows removal to federal court of actions filed against foreign sovereigns in state court, supports our interpretation of § 1330(a). Section 1441(d) allows removal, but states that "(u)pon removal the action shall be tried by the court without jury." The clear intention of the jurisdictional revisions in the FSIA was to require trial of these actions without a jury. Although the district court held that the appellant qualifies as both an "instrumentality of a foreign state" under 28 U.S.C. § 1603(a) and a "citizen" of a foreign state under 28 U.S.C. § 1332(a)(2), we conclude that the legislative history forecloses this interpretation of § 1332(a)(2).


The district court espoused a separate theory for avoiding denial of a jury trial. Although conceding that Congress eliminated diversity jurisdiction over foreign states by explicitly amending 28 U.S.C. § 1332(a)(2), the district court noted that Congress failed to amend the federal question statute, 28 U.S.C. § 1331. By failing to delete actions against foreign states from the federal question statute, it reasoned that Congress thereby allowed an alternative basis of jurisdiction in these cases, to which the right to jury trial would apply. The court concluded that this action arose under the LHWCA, thus creating federal question jurisdiction.

We are unable to agree with this analysis. We have recently rejected this argument in the context of the Seaman's Wage Act, 46 U.S.C. §§ 596-97. Velidor v. L/P/G Benghazi, 653 F.2d 812 at 818 & n.9 (3d Cir. 1981) (citing Ruggiero ). Although Congress did not explicitly alter § 1331, that does not end the inquiry. Appellee's argument would allow jury trials in cases presenting federal statutory or constitutional questions against foreign states, but would not allow jury trials in actions involving the same parties that were previously cognizable under the federal diversity of citizenship statute, 28 U.S.C. § 1332. We find no justification in the legislative history for treating these types of cases differently. The House Report's discussion of the amendment to § 1332, which formerly created diversity jurisdiction in these actions, states: "Since jurisdiction in actions against foreign states is comprehensively treated by the new section 1330, a similar jurisdictional basis under section 1332 becomes superfluous." H.R.Rep.No.1487 at 14, (1976) U.S.Code Cong. & Ad.News at 6613. In addition, the legislative history of the FSIA discloses a clear intention to withhold jury trial in all actions against foreign states: "As in suits against the U.S. Government, jury trials are excluded. See 28 U.S.C. (s) 2402. Actions tried by a court without jury will tend to promote a uniformity in decision where foreign governments are involved." Id. at 13, (1976) U.S.Code Cong. & Ad.News at 6611-12; see also 1 J. Moore, Federal Practice P 0.66(4) at 700.179-.180 (2d ed. 1980). We conclude, therefore, that Congress intended all actions against foreign states to be tried without a jury, and to be brought under 28 U.S.C. § 1330(a).


Our resolution of the statutory issues thus requires us to confront squarely the seventh amendment issue. The intention of Congress to withhold jury trial from actions against foreign states an intention we believe to be clear conflicts with whatever right a plaintiff has to be heard by a jury in these cases. If that right is protected by the seventh amendment, then the jurisdictional provisions of the FSIA must be held void as repugnant to the Constitution.

In any case in which a federal court considers the constitutionality of an act of Congress, it must be cautious to respect the "presumption of constitutionality" that is afforded acts of a coordinate branch of government. The Court has recently stated:

Whenever called upon to judge the constitutionality of an Act of Congress "the gravest and most delicate duty that this Court is called upon to perform," Blodgett v. Holden, 275 U.S. 142, 148 (48 S. Ct. 105, 107, 72 L. Ed. 206 ) (1927) (Holmes, J.) the Court accords "great weight to the decisions of Congress." CBS, Inc. v. Democratic National Committee, 412 U.S. 94, 102 (93 S. Ct. 2080, 2086, 36 L. Ed. 2d 772) (1973). The Congress is a coequal branch of government whose members take the same oath we do to uphold the Constitution of the United States. As Justice Frankfurter noted in Joint Anti-Fascist Refugee Committee v. McGrath, 341 U.S. 123, 164 (71 S. Ct. 624, 644, 95 L. Ed. 817) (1951) (concurring opinion), we must have "due regard to the fact that this Court is not exercising a primary judgment but is sitting in judgment upon those who also have taken the oath to observe the Constitution and who have the responsibility for carrying on government."

Rostker v. Goldberg, 453 U.S. 57, 101 S. Ct. 2646, 2650, 69 L. Ed. 2d 478 (1981); see also City of Rome v. United States, 446 U.S. 156, 207, 100 S. Ct. 1548, 1577, 64 L. Ed. 2d 119 (1980) (Rehnquist, J., dissenting). The importance of the congressional decisions reflected in the FSIA to the nation's foreign policy also counsel against invalidation of the statute without a most persuasive demonstration of unconstitutionality. The seventh amendment issue presented by this case therefore must be considered in the context in which it arises: a congressional schema comprehensively dealing with actions in American courts against foreign sovereigns.


We must first ascertain the meaning of the seventh amendment text with the judicial gloss it has received from numerous Supreme Court decisions since its ratification on December 15, 1791. The seventh amendment states in relevant part: "In Suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved...." U.S.Const. amend. VII. Justice Story's opinion for the Court ...

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