Carlos Figueroa v. The Ministry For Foreign Affairs of Sweden et al
Filing
57
MEMORANDUM OPINION AND ORDER re: 32 MOTION to Dismiss /Partially Dismiss First Amended Complaint. filed by The Ministry For Foreign Affairs of Sweden, Sweden's New York Mission to The United Nations. This Court has considered all of the arguments raised by the parties. To the extent not specifically addressed, the arguments are either moot or without merit. For the foregoing reasons, the defendants' motion for partial dismissal of the First Amended Complaint for lac k of subject matter jurisdiction is granted with respect to the discrimination and retaliation claims, and denied with respect to the breach of contract claim. The Clerk is directed to close Dkt. No. 32. (As further set forth in this Order.) (Signed by Judge John G. Koeltl on 11/26/2016) (cf)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
-----------------------------------CARLOS FIGUEROA,
Plaintiff,
- v.-
16-cv-00682 (JGK)
MEMORANDUM OPINION
AND ORDER
THE MINISTRY FOR FOREIGN AFFAIRS OF
SWEDEN ET AL.,
Defendants.
-----------------------------------JOHN G. KOELTL, District Judge:
The plaintiff, Carlos Figueroa, has brought claims for
personal injury, retaliation, and discrimination (due to his
national origin, race, and disability) arising from his
employment as an “Office Clerk/Chauffeur” with The Ministry of
Foreign Affairs of Sweden (the “Ministry”), and the Permanent
Mission of Sweden to the United Nations (the “Mission”)
(collectively, “the defendants”).1 The plaintiff has also brought
a claim against the defendants for the alleged breach of a
separate tolling agreement. It is undisputed that the
defendants, as instrumentalities of the Kingdom of Sweden
(“Sweden”), are foreign sovereigns under the Foreign Sovereign
Immunities Act (the “FSIA”). See 28 U.S.C. §§ 1602-11. Relying
1
The plaintiff’s discrimination claims are brought pursuant to
the New York City Human Rights Law. While the plaintiff also
initially brought two discrimination claims pursuant to New York
State law, the plaintiff abandoned those claims in his papers.
See Pl.’s Op. Mem. at 1 n.2.
on the FSIA’s immunity provisions, the defendants have moved
pursuant to Rule 12(b)(1) of the Federal Rules of Civil
Procedure to dismiss all of the plaintiff’s claims, with the
exception of the personal injury claim, for want of subject
matter jurisdiction.2
The plaintiff initially brought this action in the New York
State Supreme Court, New York County. The defendants removed the
action to this Court pursuant to 28 U.S.C. §§ 1330 and 1441(d)
because the Court has original jurisdiction over actions against
foreign states.
For the following reasons, the defendants’ motion for
partial dismissal of the First Amended Complaint is granted in
part and denied in part.
I.
In defending a motion to dismiss for lack of subject matter
jurisdiction, a plaintiff bears the burden of proving the
Court’s jurisdiction by a preponderance of the evidence.
Makarova v. United States, 201 F.3d 110, 113 (2d Cir. 2000).
When the defendant claims immunity under the FSIA and “presents
a prima facie case that it is a foreign sovereign, the plaintiff
2
Subject to certain exceptions, § 1605(a)(5) grants federal
courts jurisdiction over foreign states for personal injury tort
claims where the injury occurred in the United States. See
Bisson v. United Nations, No. 06-cv-6352, 2007 WL 2154181, at *8
(S.D.N.Y. July 27, 2007), report and recommendation adopted, No.
06-cv-6352, 2008 WL 375094 (S.D.N.Y. Feb. 11, 2008).
2
has the burden of going forward with evidence showing that,
under exceptions to the FSIA, immunity should not be granted,
although the ultimate burden of persuasion remains with the
alleged foreign sovereign.” Cargill Int’l S.A. v. M/T Pavel
Dybenko, 991 F.2d 1012, 1016 (2d Cir. 1993) (citations omitted).
In considering such a motion, the Court generally must accept
the material factual allegations in the complaint as true, but
does not draw all reasonable inferences in the plaintiff’s
favor. See J.S. ex rel. N.S. v. Attica Cent. Sch., 386 F.3d 107,
110 (2d Cir. 2004); Graubart v. Jazz Images Inc., No. 02 Civ.
4645, 2006 WL 1140724, at *2 (S.D.N.Y. Apr. 27, 2006). Indeed,
where jurisdictional facts are disputed, the Court has the power
and the obligation to consider matters outside the pleadings,
such as affidavits, documents, and testimony, to determine
whether jurisdiction exists. See APWU v. Potter, 343 F.3d 619,
627 (2d Cir. 2003); Kamen v. Am. Tel. & Tel. Co., 791 F.2d 1006,
1011 (2d Cir. 1986). In doing so, the Court is guided by the
body of decisional law that has developed under Rule 56 of the
Federal Rules of Civil Procedure. Kamen, 791 F.2d at 1011; see
also Hijazi v. Permanent Mission Of Saudi Arabia to the United
Nations, 689 F. Supp. 2d 669, 670 (S.D.N.Y.), aff’d, 403 F.
App’x 631 (2d Cir. 2010) (summary order).
3
II.
The following facts are taken from the First Amended
Complaint, and the declarations and affidavits accompanying the
parties’ respective motion papers.
The Ministry is a constituent part of the Government of
Sweden responsible for Sweden’s foreign affairs. FAC ¶ 3; Dahlin
Aff. ¶ 6. The Ministry has no presence in the United States
except through its instrumentalities: the Mission, the Swedish
Consulate General, and the Swedish Embassy, all of which are
located in New York State or Washington, D.C. Dahlin Aff. ¶ 6.
The Mission, the Consulate General, and the Embassy each serve
purely governmental functions designed to advance the national
interests of Sweden. Dahlin Aff. ¶ 6.
The Mission represents Swedish diplomatic interests before
the United Nations in New York City. Dahlin Aff. ¶ 5. The
Swedish Ambassador to the United Nations is stationed at the
Mission and has a residence in New York City. Dahlin Aff. ¶ 4.
The Mission also supports around twenty Swedish diplomats.
Dahlin Aff. ¶¶ 10-11. The Mission frequently hosts events,
including for the diplomats of other nations. Dahlin Aff. ¶ 11.
The Mission employs a variety of support staff, such as
administrative assistants, secretaries, and human resources
personnel. See, e.g., FAC ¶¶ 21, 24, 44.
4
In late 2005, the Mission advertised that it was seeking to
hire an Office Clerk/Chauffeur. FAC, Ex. 3 (The Vacancy
Announcement).3 The Office Clerk/Chauffeur’s duties included
driving the Mission car “upon request,” “minor repairs and
maintenance,” and other “routine clerical duties.” FAC, Ex. 3.
The Mission held itself out as an Equal Opportunity Employer,
and did not require that an applicant speak Swedish. FAC, Ex. 3.
On January 9, 2006, the Mission hired the plaintiff, who is
an American citizen of Puerto Rican descent and not fluent in
Swedish, as the Office Clerk/Chauffeur, a position he currently
holds. FAC ¶ 9; FAC, Ex. 1 (The Employment Letter). The
plaintiff’s employment with the Mission was governed by an
employment agreement entitled the “Terms and Conditions for
Locally Employed Staff.” FAC, Ex. 2 (The Employment Agreement).
The employment agreement provided, among other things, that the
plaintiff’s entitlement to a pension, group life insurance, and
a funeral grant was subject to Swedish law for Locally Engaged
Non-Swedish Staff at Swedish Missions Abroad. FAC, Ex. 2.
In his capacity as an Office Clerk/Chauffeur, the plaintiff
spent the majority of his time chauffeuring the Swedish
Ambassador and the Ambassador’s family, Swedish diplomats and
3
The vacancy announcement described the position as “Office
Clerk/Driver,” see FAC, Ex. 3, but the plaintiff’s employment
letter described the position as “Office Clerk/Chauffeur,” see
FAC, Ex. 1.
5
their families, and members of the Royal Family of Sweden.
Dahlin Aff. ¶ 7; Figueroa Decl. ¶ 6. He also performed routine
office tasks, such as setting up for the aforementioned events,
accepting packages, and purchasing supplies. Figueroa Decl. ¶ 4;
Dahlin Aff. ¶ 9.
The plaintiff alleges that, from the beginning of his
employment, his Swedish employers treated him disparately and
discriminated against him on a daily basis due to his race and
national origin. FAC ¶ 32. The plaintiff catalogues numerous
alleged acts of discrimination---ranging from demeaning slights
to considerable career disadvantages---that he suffered as a
result. For example, he alleges that the defendants excluded him
from meetings, FAC ¶ 24; withheld multiple employment documents
from him, FAC ¶¶ 19, 54; ordered him to perform personal tasks
for Mission employees, FAC ¶¶ 18-19; attempted to reduce his
compensation because he was not Swedish, FAC ¶ 30; failed to
inform him of his entitlement to a clothing allowances (even
though all Swedish employees knew about the allowance), FAC ¶
32; and passed him over for promotion in favor of a more
recently-hired Swedish employee with inferior qualifications,
FAC ¶¶ 21-22.
Matters came to a head in May 2012, when the Swedish
Ambassador allegedly directed the plaintiff to assemble and
6
install two very large pieces of furniture.4 FAC ¶¶ 33-35. Over
the plaintiff’s protestations, the plaintiff alleges that the
Ambassador directed him to assemble the furniture to avoid the
cost of hiring professionals, even though the Ambassador knew
that the assembly instructions stated that two workers with
requisite carpentry competence should construct the wardrobe.
FAC ¶¶ 35-39. While assembling the furniture, the plaintiff
alleges that he fell from a ladder, leading to serious injuries
to his back and legs that form the basis for the plaintiff’s
personal injury claim, which is not at issue on this motion. FAC
¶ 40.
The plaintiff’s injuries have required extensive medical
treatment and resulted in two medical leaves from work, the
latter of which has extended from May 24, 2014, through the
present. FAC ¶ 42. During his medical leaves, the plaintiff
alleges that the defendants have threatened to fire him unless
he prematurely returns to work, which he is allegedly incapable
of doing due to his severe injuries. FAC ¶¶ 47, 50. The actions
that the defendants have taken to push the plaintiff out of his
position at the Mission form the basis for the plaintiff’s
retaliation and disability discrimination claims.
4
The furniture consisted of two heavy wardrobes purchased from
IKEA.
7
Following his injuries, the plaintiff became eligible for,
and received, medical leave compensation at the rate of 80% of
his salary pursuant to his employment agreement. FAC ¶ 51. On
May 22, 2015, after the plaintiff informed the defendants of the
possibility of litigation, the parties entered into a tolling
agreement that preserved all of the parties’ claims and
defenses, and provided that the defendants’ counsel would accept
service of process. See Chinitz Decl. ¶ 2; Chinitz Decl., Ex. 1
(The Tolling Agreement). The tolling agreement imposed a number
of other obligations on the parties, including that the
plaintiff would keep his claims confidential during settlement
negotiations. Chinitz Decl., Ex. 1.
In addition, the tolling agreement provided that, “To
enable [the defendants] to fully evaluate [the plaintiff’s]
claims, including those claims related to his physical injuries,
and to enable the Parties to attempt to negotiate a confidential
settlement of [the plaintiff’s] claims, all of which are denied
by [the defendants], [the plaintiff] will continue to remain on
a partially paid leave of absence at the same level of
compensation as presently being received (something to which
[the defendants] take[] the position that he is not entitled to
at this time).” Chinitz Decl., Ex. 1. Despite the tolling
agreement, the plaintiff alleges that the Mission reduced the
plaintiff’s medical leave compensation. FAC ¶¶ 52, 87-89.
8
III.
The only basis for subject matter jurisdiction in this
Court over a foreign sovereign is the FSIA. See Republic of
Argentina v. Weltover, Inc., 504 U.S. 607, 610-11 (1992). Under
the FSIA, a foreign sovereign is immune from suit in the United
States unless a statutory exception applies. See 28 U.S.C. §
1604 (“[A] foreign state shall be immune from the jurisdiction
of the courts of the United States and of the States except as
provided in sections 1605 to 1607 of this chapter.”); Weltover,
504 U.S. at 610-11. “The FSIA defines ‘foreign state’ to include
an ‘agency or instrumentality’ of a foreign state.” Kato v.
Ishihara, 360 F.3d 106, 110 (2d Cir. 2004) (quoting 28 U.S.C. §
1603(a)). There is no dispute that the defendants are foreign
sovereigns under the FSIA.
The plaintiff argues that the Court has jurisdiction over
the plaintiff’s claims for discrimination, retaliation, and
breach of contract pursuant to 28 U.S.C. § 1605(a)(2), the
commercial activity exception of the FSIA. Under § 1605(a)(2),
as relevant here, a foreign sovereign is not immune from suit in
any case “in which the action is based upon a commercial
activity carried on in the United States by the foreign state.”
28 U.S.C. § 1605(a)(2). The FSIA defines a “commercial activity”
as “either a regular course of commercial conduct or a
particular commercial transaction or act. The commercial
9
character of an activity shall be determined by reference to the
nature of the course of conduct or particular transaction or
act, rather than by reference to its purpose.” 28 U.S.C. §
1603(d).
The FSIA’s legislative history indicates that Congress
intended the FSIA to give “courts . . . a great deal of latitude
in determining what is a ‘commercial activity’ for purposes of
[the FSIA].” Kato, 360 F.3d at 110 (alterations in original)
(quoting H.R. Rep. No. 94-1487, at 16 (1976), as reprinted in
1976 U.S.C.C.A.N. 6604, 6615). The same legislative history
gives examples of what Congress considered to be governmental,
as opposed to commercial, activity. See id. (governmental
activity includes “the employment of diplomatic, civil service,
or military personnel” while commercial activity includes
“employment or engagement of laborers, clerical staff or public
relations or marketing agents”) (quoting H.R. Rep. No. 94-1487,
at 16).
“[A] state engages in commercial activity . . . where it
exercises only those powers that can also be exercised by
private citizens.” Saudi Arabia v. Nelson, 507 U.S. 349, 360
(1993) (quoting Weltover, 504 U.S. at 614). “[T]o determine the
nature of a sovereign’s act, we ask not whether the foreign
government is acting with a profit motive or instead with the
aim of fulfilling uniquely sovereign objectives but rather
10
whether the particular actions that the foreign state performs
(whatever the motive behind them) are the type of actions by
which a private party engages in ‘trade and traffic or
commerce.’” Anglo-Iberia Underwriting Mgmt. v. P.T. Jamsostek,
600 F.3d 171, 177 (2d Cir. 2010) (quoting Weltover, 504 U.S. at
614).
To determine whether the commercial activity exception
applies, the Supreme Court recently reiterated that the “‘based
upon’ inquiry . . . first requires a court to identify the
‘particular’ conduct on which the plaintiff’s action is
‘based.’” OBB Personenverkehr AG v. Sachs, 136 S. Ct. 390, 395
(2015) (alterations and citation omitted); see also Kensington
Int’l Ltd. v. Itoua, 505 F.3d 147, 154-55 (2d Cir. 2007) (noting
that the same definition of “based upon” is applicable to all
three clauses of the commercial activity exception). A court
must thus “examin[e] the act of the foreign sovereign that
serves as the basis for the plaintiff’s claim,” Anglo-Iberia,
600 F.3d at 177, meaning that a court must focus on “the
gravamen of the complaint” and “those elements that if proven
would entitle a plaintiff to relief,” OBB Personenverkehr, 136
S. Ct. at 395 (citation and alteration omitted).
A.
The plaintiff’s retaliation and discrimination claims are
plainly based upon the plaintiff’s employment relationship with
11
the defendants. While the plaintiff argues that the inquiry
should focus on the specific discriminatory and retaliatory acts
that form the basis for his claims, that approach presents the
issue too narrowly for purposes of assessing commercial
activity. Indeed, the courts of appeals have uniformly rejected
the plaintiff’s suggested analytical framework in employment
cases. See El-Hadad v. United Arab Emirates, 496 F.3d 658, 663
n.1 (D.C. Cir. 2007) (noting, that like all courts of appeals,
including the Court of Appeals for the Second Circuit, “[the
Court of Appeals for the D.C. Circuit] . . . focus[es] [its]
commercial activity analysis on the employment relationship
between [the plaintiff] and the [defendant-embassy] as a whole,
rather than narrowly on [the plaintiff’s] termination alone or
separately on [the plaintiff’s] termination and defamation”
(citing Kato, 360 F.3d at 111–12)). With respect to the
retaliation and discrimination claims, the gravamen of the
complaint is that, over the course of the plaintiff’s
employment, the defendants discriminated and retaliated against
the plaintiff due to his race, national origin, and disability.
Accordingly, the commercial activity exception can only apply to
those claims if the employment relationship between the
defendants and the plaintiff was commercial in nature.
The plaintiff argues that his employment as an Office
Clerk/Chauffeur was in fact commercial in nature and unrelated
12
to the defendants’ diplomatic activity in the United States. The
defendants respond that the plaintiff’s employment was noncommercial because the Mission is uniquely sovereign and
employment with the defendants is not the type of activity in
which a private party could engage.
Although the courts of appeals agree that the employment
relationship is the proper starting point for the commercial
activity exception inquiry, the courts of appeals apply
different analytical approaches to assess whether the employment
relationship qualifies as commercial. See id. at 664 n.2
(reviewing different approaches). While the plaintiff argues
that the (more favorable) analytical approaches used in other
circuits should apply to this case, the standard set forth by
the Court of Appeals for the Second Circuit is controlling.
Kato v. Ishihara, 360 F.3d 106 (2d Cir. 2004), is the Court
of Appeals’ most recent decision extensively analyzing the
application of the commercial activity exception to employment
relationships. In that case, the plaintiff, a Japanese citizen
employed by the Tokyo Metropolitan Government (“TMG”) in Japan,
brought sexual harassment, retaliation, and discrimination
claims against TMG based upon acts that occurred while she was
assigned to TMG’s New York office. Id. at 107, 109. The
plaintiff was employed under the terms of Japanese laws
governing “local public servants.” Id. at 109.
13
The plaintiff argued that TMG’s function promoting business
development and investment on behalf of Japanese businesses
rendered TMG’s activities commercial. Id. at 108, 111-12. The
plaintiff also argued that her job responsibilities---including
preparing marketing reports and promoting products at trade
booths---at the very least rendered her own employment
commercial in nature. Id. at 109. Indeed, the plaintiff pointed
to the legislative history of the FSIA, which stated that a
foreign sovereign’s “employment or engagement of laborers,
clerical staff or public relations or marketing agents” is to be
considered commercial activity. Id. at 110 (quoting H.R. Rep.
No. 94-1487, at 16) (emphasis added). The defendant countered
that the plaintiff was a public servant under the laws of Japan,
and that the FSIA’s legislative history stated that the hiring
of a civil servant would be typically non-commercial in nature.
Id. at 111.
The Court of Appeals rejected the plaintiff’s argument that
the inclusion of “marketing agent” in the legislative history as
an example of a commercial activity could be conclusive in that
case. Id. As the Court of Appeals noted, even though the
plaintiff was a marketing agent, she was governed by Japan’s
public service laws and, far more significantly, she was
integral to the mission of TMG: marketing Japanese businesses.
Id. Thus, “[I]n order to evaluate plaintiff’s argument that her
14
employment was by nature ‘commercial’ because she engaged in
‘commercial activity’ on behalf of TMG, [the Court] consider[ed]
whether TMG’s activities in New York were typical of a private
party engaged in commerce.” Id. The Court found that the actions
performed by TMG---actions that would naturally require the
employment of marketing agents, like the plaintiff---“were only
superficially similar to actions typically undertaken by private
parties” because they were actually geared toward “the promotion
of other Japanese businesses, or the promotion of Japanese
business interests in general,” a type of activity appropriately
undertaken by a foreign sovereign, not a private business. Id.
at 111-12. Accordingly, because “TMG was not involved in a
‘commercial activity’ under the FSIA when it provided general
business development . . . to Japanese businesses,” the Court
“reject[ed] plaintiff’s argument that her involvement in
[promoting] such activities on TMG’s behalf rendered her
employment ‘commercial’ under the FSIA.” Id. at 112. The Court
of Appeals concluded that there was no jurisdiction over the
plaintiff’s claims. Id. at 114.
The Court of Appeals also emphasized that any assessment of
an employee’s status as a civil servant must not be in reference
to the norms associated with civil service in the United States;
instead, such an inquiry should focus on the contemporary norms
associated with civil service in the sovereign country at issue.
15
Id. at 112 (“[W]here courts identify ‘governmental’ or ‘noncommercial’ activity by reference to the category ‘civil
service’ identified by the House Report of the FSIA, the
category of ‘civil service’ should be interpreted to include the
broad range of civil service employment relationships used by
countries other than the United States.”).
As the Court’s analysis demonstrated, the examples of noncommercial and commercial employment contained in the FSIA’s
legislative history could clash: it was possible for a marketing
agent also to be a civil servant. It would thus be inappropriate
for a court to rely on the examples set forth in the legislative
history as outcome determinative without further analysis. See
id. at 114 (“In determining whether a foreign government’s
employment of personnel in the United States is ‘civil service,’
and therefore ‘governmental,’ we do not look principally to
whether that employment resembles the contemporary civil service
of the American democracy, but we instead inquire whether the
particular actions that the foreign state performs . . . are the
type of actions by which a private party engages in ‘trade and
traffic or commerce.’” (citation omitted) (first emphasis
added)).
The parties dispute the proper interpretation of Kato. The
defendants argue that the focus should be on the defendants’
activities alone. The plaintiff argues that the focus should be
16
primarily on the plaintiff’s job activities irrespective of the
sovereign’s general activities. In Hijazi v. Permanent Mission
Of Saudi Arabia to the United Nations, 689 F. Supp. 2d 669, 670
(S.D.N.Y.), aff’d, 403 F. App’x 631 (2d Cir. 2010) (summary
order), this Court read Kato to require two inquires in
employment cases: First, “whether the activity to which the
plaintiff’s employment was directed is governmental”; and,
second, “whether the plaintiff’s employment relationship was
sufficiently intertwined with that activity to provide that the
employment relationship itself was part of the governmental
function.” Id. at 674-75. The dual inquiry is faithful to Kato.
In Kato, the Court of Appeals analyzed the job responsibilities
of the plaintiff, determining that those responsibilities were
inextricably intertwined with the function of TMG to promote
Japanese commerce.
In Hijazi, 689 F. Supp. 2d at 670, an employee of the
Kingdom of Saudi Arabia’s Mission to the United States sued the
Saudi Mission based on a variety of discrimination claims. Under
the first Kato inquiry, the Saudi Mission was plainly engaged in
governmental activity. Id. at 674-75.
As to the second Kato inquiry, the Saudi Mission presented
uncontested evidence that the plaintiff held the rank of an
“Advisor,” the classification for the Saudi Mission’s highest
ranked employees who were not career diplomats. Id. at 675. The
17
plaintiff performed significant duties on behalf of the Saudi
Mission, including “attending meetings, both alone and in the
company of diplomats, conducting research, and writing
memoranda,” and even speaking on behalf of the Saudi Government
at the United Nations. Id. at 671, 675. While this Court noted
that, based on Kato’s interpretation of the FSIA’s legislative
history, “it would be clear that hiring purely clerical staff,
even clerical staff that types diplomatic speeches, comes within
the commercial activity exception,” the plaintiff was much more
than a clerical worker. Id. at 675. The plaintiff’s employment
was integral to the diplomatic function of the Mission, and
accordingly the plaintiff’s employment relationship with the
Saudi Mission was governmental, not commercial in nature. Id.
In this case, under the first Kato inquiry, the activity to
which the plaintiff’s employment was directed is undoubtedly
governmental. See id. at 674; Gray v. Permanent Mission of
People’s Republic of Congo to United Nations, 443 F. Supp. 816,
820 (S.D.N.Y.) (“[I]t is hard to imagine a purer embodiment of a
foreign state than that state’s permanent mission to the United
Nations.”), aff’d, 580 F.2d 1044 (2d Cir. 1978).
The defendants argue that the analysis should stop there,
and that the second Kato inquiry is no longer necessary in light
of Anglo-Iberia Underwriting Mgmt. v. P.T. Jamsostek, 600 F.3d
171 (2d Cir. 2010), a decision issued shortly after this Court’s
18
decision in Hijazi. Based on their interpretation of AngloIberia, the defendants also argue that the legislative history
of the FSIA has been rendered a nullity in employment cases. The
defendants advocate the application of a per se rule that any
employee of the Mission (or similar foreign sovereign organ
operating in the United States) cannot be employed in a
commercial capacity. But the defendants overstate the relevance
of Anglo-Iberia to an individual employee’s claims against a
sovereign employer based upon an employment relationship.
In Anglo-Iberia, the plaintiffs sued the Republic of
Indonesia, and the Indonesian state-owned social security
insurer, Jamsostek, for alleged negligent supervision over
Jamsostek’s employees, who had allegedly perpetrated an
international commercial reinsurance fraud scheme that injured
the plaintiffs. Id. at 174. The gravamen of the plaintiffs’
claim was not based on the employment relationship between
Jamsostek and its employees; rather, it was based upon
Jamsostek’s provision of health insurance as Indonesia’s
“default health insurer,” a quintessential sovereign function
that a private health insurer would not perform. Id. at 177-78.
The Court observed that “to hold otherwise and look only to the
fact of employment for purposes of our ‘commercial activity’
analysis would allow the exception to swallow the rule of
19
presumptive sovereign immunity codified in the FSIA.” Id. at 178
(emphasis added).
Anglo-Iberia is relevant to the first Kato inquiry in this
case. Regardless of the various employees that the defendants
employed, the defendants were still undoubtedly engaged, as a
general matter, in a governmental function: representing Swedish
foreign interests. Anglo-Iberia has much less relevance for the
second Kato inquiry, namely when an employee sues a sovereign,
what is the relationship between the employee’s employment and
the sovereign’s governmental function.5
The conclusion that the second inquiry should be performed
based on a fair reading of Kato is buttressed by the summary
order affirming Hijazi, which the Court of Appeals issued
following Anglo-Iberia. See Hijazi v. Permanent Mission of Saudi
Arabia to United Nations, 403 F. App’x 631, 632 (2d Cir. 2010)
(summary order). Much like the dispute between the parties in
this case, on appeal in Hijazi, the plaintiff argued that a
court should focus only on the employee’s activities, while the
5
The defendants also argue that Kato rejected any application of
the legislative history to employment cases. But, as noted, Kato
only rejected assessments of the legislative history that relied
upon American norms of civil service, as opposed to the norms of
the sovereign at issue. See Kato, 360 F.3d at 114 n.6 (rejecting
approach to legislative history taken by Holden v. Canadian
Consulate, 92 F.3d 918, 921 (9th Cir. 1996), and Mukaddam v.
Permanent Mission of Saudi Arabia to United Nations, 111 F.
Supp. 2d 457, 463 (S.D.N.Y. 2000), that relied upon “certain
familiar indicia” relevant to the American conception of civil
service).
20
Saudi Mission countered that a court should focus only on the
sovereign’s activities. See id. The Court of Appeals did not
need to resolve the dispute because it could “affirm under
either formulation of the jurisdictional inquiry.” Id. The Court
of Appeals did not reject the relevance of either the activities
of the sovereign, or the activities of the employee.6 See id.
Accordingly, under Kato, it is appropriate to analyze
whether the plaintiff’s employment relationship was sufficiently
intertwined with the defendants’ governmental activity to
provide that the employment relationship itself was part of the
governmental function. In this case, the plaintiff’s
transportation responsibilities as a chauffeur at the Mission
were sufficiently intertwined with the diplomatic function of
the Mission such that the employment itself was part of the
defendants’ sovereign function.
In his capacity as a chauffeur, the plaintiff was
responsible for transporting the Swedish Ambassador and the
6
The defendants argue that the analysis employed in Kim v. Korea
Trade Promotion-Inv. Agency, 51 F. Supp. 3d 279 (S.D.N.Y. 2014)
---which focused primarily on the activities of the sovereign--supports their articulation of the law, but Kim was essentially
a carbon copy of Kato and thus does not add much to the proper
interpretation of Kato in other employment cases. See Kim, 51 F.
Supp. 3d at 286-87 (describing the facts at issue as “strikingly
similar” and “almost identical” to those in Kato). Moreover, Kim
found that, “Plaintiff’s function was not ancillary to [the
defendant’s] promotion of Korean firms; rather, Plaintiff
actively worked to facilitate that quintessentially governmental
goal.” Id. at 289 n.4.
21
Ambassador’s family, Swedish diplomats and their families, and
even members of the Royal Family of Sweden. See FAC ¶ 43 (noting
the Ambassador’s “schedule sometimes required that [the
plaintiff] sit in the Embassy car for up to eighteen hours at a
time” in order to aid the Ambassador); Dahlin Aff. ¶¶ 7-8
(stating that the plaintiff spent approximately 80% of his time
as a chauffeur). The defendants’ employment of the plaintiff as
a full-time chauffeur for the Mission entrusted the plaintiff
with the safe transport of Swedish dignitaries, an activity
integral to effecting the governmental function of the Mission.
A sovereign’s decisions on how best to address the safety
concerns of government officials are peculiarly sovereign
because the failure to protect or safeguard a sovereign
representative, such as an ambassador or a titular head of
state, can have extremely adverse consequences for the sovereign
nation. See Butters v. Vance Int’l, Inc., 225 F.3d 462, 465 (4th
Cir. 2000) (reasoning that a “foreign sovereign’s decision as to
how best to secure the safety of its leaders” is an “act
peculiar to sovereigns” and thus holding that employing security
guards was a non-commercial activity). The plaintiff’s
employment relationship was non-commercial because it was
sufficiently intertwined with the defendants’ governmental
function.
22
In an essentially identical case, Crum v. Kingdom of Saudi
Arabia, No. CIV.A. 05-275, 2005 WL 3752271, at *4 (E.D. Va. July
13, 2005), the United States District Court for the Eastern
District of Virginia likewise concluded that an embassy’s
employment of a full-time limousine driver was not subject to
the commercial activity exception. Relying on Kato’s reasoning,
the court in Crum held that, “An embassy’s decision to hire a
limousine driver to transport embassy officials, their families
and guests, and meet its everyday needs does not amount to
engaging in ‘trade and traffic or commerce.’” Id. (citation
omitted); see also El-Hadad, 496 F.3d at 664 n.2 (citing Crum
with approval).
The plaintiff contends that the inquiry should focus on the
plaintiff’s duties as an office clerk. But the record shows that
the plaintiff spent most of his time as a chauffeur. In any
event, there is no basis to segregate the portions of the
plaintiff’s employment that could be characterized as purely
clerical from the portions that were more in aid of the
defendants’ governmental function because the commercial
activity jurisdictional assessment must be made with reference
to the plaintiff’s course of conduct with the defendants as a
whole, which was non-commercial in nature. See Hijazi, 689 F.
Supp. 2d at 675 (finding that even though some of the employee’s
duties may have been clerical, the employee’s duties on the
23
whole were intertwined with the defendant’s governmental
function).
The plaintiff also argues that, in light of the FSIA’s
legislative history, his duties as a chauffeur were closer to
those of a laborer or a clerical worker than to those of a civil
servant. Although the examples of commercial employment in the
legislative history are informative, they are not outcome
determinative. See Kato, 360 F.3d at 113. Moreover, reference to
the employment examples in the legislative history must be
measured by the norms of the sovereign at issue, in this case,
Sweden. The plaintiff’s employment agreement was subject to a
special body of statutory law for “Locally Engaged Non-Swedish
Staff at Swedish Missions Abroad.” See FAC, Ex. 2. The body of
law is specific to Swedish Missions, and does not apply to any
employee of a private Swedish company. While similarly not
outcome determinative, the existence of a Swedish statutory
scheme for the Mission’s employees weighs in support of the
conclusion that the plaintiff’s employment was intertwined with
the governmental function of the Mission. See Kato, 360 F.3d at
109; Hijazi, 689 F. Supp. 2d at 671. This is true even though
the plaintiff may not have been a civil servant under Swedish
law because “[o]ther countries are free to structure employment
relationships in ways that do not mimic civil service
protections now common to the United States and many European
24
states, without thereby sacrificing the immunity conferred by
the FSIA, as long as the sovereign, by extending the employment,
is engaging in ‘governmental’ rather than ‘commercial’
activity.” Kato, 360 F.3d at 113; cf. El-Hadad, 496 F.3d at 664
& n.2 (holding that the employment of some non-civil servants
can properly be characterized as non-commercial). Under Kato,
the plaintiff’s employment was non-commercial because the
defendants were engaged in a governmental function, and the
plaintiff’s employment was intertwined with that function such
that it too should be properly considered governmental.
Finally, the plaintiff argues that a finding that his
employment was governmental would mean that the defendants could
enter into any basic commercial transaction and retain their
immunity. The plaintiff’s slippery slope argument is
unpersuasive. The first step in any commercial activity
exception inquiry is identifying the conduct or transaction that
provides the basis for the gravamen of a plaintiff’s claim. With
respect to the retaliation and discrimination claims, the
plaintiff’s claims are “based upon” his employment, which was
not commercial in nature. By contrast, as the defendants
concede, claims “based upon” individual service transactions
with third-parties---such as individual taxi, food, and delivery
services---would be “obviously” subject to the commercial
activity exception. See Defs.’ Reply Mem. at 4. As discussed
25
below with respect to the plaintiff’s claim that the defendants
breached the tolling agreement, the defendants can certainly
enter into transactions that are subject to the commercial
activity exception.7
B.
The plaintiff’s claim that the defendants breached the
tolling agreement by reducing the plaintiff’s medical leave
compensation---allegedly in contravention of the tolling
agreement’s provision that the defendants would maintain that
compensation at the same level while the parties explored a
confidential settlement, see Chinitz Decl., Ex. 1---is different
from the plaintiff’s retaliation and discrimination claims. The
tolling agreement is a contract, and the plaintiff’s claim is
“based upon” the defendants’ alleged breach of that contract.
See OBB Personenverkehr, 136 S. Ct. at 395. The defendants do
not contest that the tolling agreement is a valid contract, and,
furthermore, concede that the defendants can enter into
contracts that are commercial in nature. See, e.g., Weltover,
504 U.S. at 614–15 (“[A] contract to buy army boots or even
bullets is a ‘commercial’ activity, because private companies
can similarly use sales contracts to acquire goods.”); U.S. Fid.
7
The defendants also moved to dismiss the discrimination claims
on other grounds, but it is unnecessary to reach the alternative
arguments for dismissal because the defendants are immune from
suit on those claims.
26
& Guar. Co. v. Braspetro Oil, 379 F. Supp. 2d 487, 490 (S.D.N.Y.
2005).
Nevertheless, the defendants assert that the tolling
agreement is inextricably intertwined with the underlying
employment claims for discrimination and retaliation, and thus
was not the product of a commercial activity. In particular, the
defendants argue that the breach of contract claim is an attempt
to recast the retaliation claim in contract clothing so that the
claim better fits the commercial activity exception.
However, the plaintiff’s claim is not that the defendants
breached the underlying employment agreement by reducing his
leave benefits, but that the defendants breached their
obligations as set forth in a new contract wholly separate and
apart from the underlying employment agreement. A tolling
agreement creates enforceable rights between parties, and is the
type of contract that private parties regularly enter into to
freeze their respective rights in contemplation of future
litigation. See, e.g., Oxbow Carbon & Minerals LLC v. Union Pac.
R.R. Co., 81 F. Supp. 3d 1, 15 (D.D.C. 2015); Medtronic
Navigation, Inc. v. Saint Louis Univ., No. 12-cv-01706-PAB, 2013
WL 5323307, at *4 (D. Colo. Sept. 23, 2013). In this case, among
other things, the parties agreed that the plaintiff would keep
his claims confidential, and, in exchange, the defendants would
27
maintain his leave compensation. The tolling agreement is
plainly not the product of an act peculiar to a sovereign.
In an analogous case involving a sovereign’s alleged breach
of a settlement agreement, the Court of Appeals for the Fifth
Circuit reasoned that, “The negotiation of contracts, including
entry into a settlement agreement, clearly is the type of act
performed by private persons.” United States v. Moats, 961 F.2d
1198, 1205 (5th Cir. 1992). There, the Court of Appeals held
that any jurisdictional inquiry under the commercial activity
exception must focus on the settlement agreement that the
sovereign allegedly breached. Id. at 1205-06. Accordingly, the
underlying activities and claims resolved by the settlement
agreement were irrelevant to the jurisdictional inquiry. Id. As
the Court of Appeals concluded, the settlement “agreement
functioned as a new contract between the parties, and [the
plaintiff] now wants to recover for an alleged breach of that
new contract,” meaning that the settlement agreement was the
activity that had to support jurisdiction under the commercial
activity exception. Id. at 1206. In that case, although the
entry into the settlement agreement was a commercial activity,
the commercial activity exception did not apply because the
settlement agreement had no jurisdictional connection to the
United States. See id.
28
In this case, there is no jurisdictional connection issue.
The defendants entered into a contract just like any private
party, and the commercial activity exception applies to a claim
based upon the breach of that contract. A contrary conclusion
would mean that a sovereign’s agreement to toll a statute of
limitations---the archetypal provision of a tolling agreement,
including the one at issue---would be unenforceable by courts in
the United States. It is irrelevant that the plaintiff’s
underlying employment relationship with the defendants was noncommercial in nature because the tolling agreement was a
distinct transaction that is commercial in nature.
Accordingly, this Court has jurisdiction over the
plaintiff’s claim for breach of contract pursuant to 28 U.S.C. §
1605(a)(2).
29
CONCLUSION
This Court has considered all of the arguments raised by
the parties. To the extent not specifically addressed, the
arguments are either moot or without merit. For the foregoing
reasons, the defendants’ motion for partial dismissal of the
First Amended Complaint for lack of subject matter jurisdiction
is granted with respect to the discrimination and retaliation
claims, and denied with respect to the breach of contract claim.
The Clerk is directed to close Dkt. No. 32.
SO ORDERED.
Dated:
New York, New York
November 26, 2016
_____________/s/______________
John G. Koeltl
United States District Judge
30
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