Rein v. Socialist People's Libyan Arab Jamahiriya

Defendants-appellants, collectively "Libya," appeal from the denial of their motion to dismiss. The plaintiffs, who are the survivors and representatives of persons killed aboard Pan Am 103 above Lockerbie, Scotland, brought suit against Libya alleging wrongful death, pain and suffering, and a variety of other injuries. Libya moved to dismiss for lack of subject matter jurisdiction, contending that 28 U.S.C. § 1605(a)(7), the provision of the Foreign Sovereign Immunities Act ("FSIA") on which jurisdiction is alleged to be founded, is void as an unconstitutional delegation of the power to establish the jurisdiction of the federal courts. It also sought dismissal for lack of personal jurisdiction or, if its jurisdictional challenges failed, dismissal of certain of the plaintiffs' claims for failure to state a claim on which relief could be granted. The district court denied all aspects of the motion to dismiss, and Libya appealed. We conclude that we have no jurisdiction, on this interlocutory appeal, to review any of the issues that Libya raised in its motion to dismiss other than its challenge to subject matter jurisdiction. We therefore dismiss so much of the appeal as raises these other issues. With respect to the question of subject matter jurisdiction, we find that § 1605(a)(7) is constitutional as applied in this case. We therefore affirm the district court's ruling that it has subject matter jurisdiction over Libya.

On December 21, 1988, Pan Am Flight 103 exploded over Lockerbie, Scotland. All 259 persons on board were killed, as were eleven people on the ground below. The two men named as individual defendants in this suit, both of whom are Libyan, have been indicted in the United States and the United Kingdom in connection with the bombing. Negotiations are currently in progress among the United States, the United Kingdom, and Libya to hold a criminal trial in the Netherlands at which those two men would be tried under Scottish law for allegedly perpetrating the bombing.

In 1994, some of the present plaintiffs brought suit against some of the present defendants, claiming that Libya and its agents were responsible for destroying Pan Am 103. Libya moved to dismiss for lack of jurisdiction under the FSIA or any other applicable law. The FSIA establishes that foreign states are generally immune from suit.1 But it gives the federal district courts jurisdiction over actions against such states when either §§ 1605-07 of the Act or relevant international agreements permit them to be sued.2 Sections 1605-07 enumerate categories of cases in which foreign states are not entitled to sovereign immunity and are, therefore, subject to district court jurisdiction. When the previous litigation was brought in 1994, no provision of the FSIA deprived Libya of sovereign immunity in suits of this sort. Accordingly, the United States District Court for the Eastern District of New York (Platt, J.) dismissed the case for lack of subject matter jurisdiction. Smith v. Socialist People's Libyan Arab Jamahiriya, 886 F.Supp. 306 (E.D.N.Y.1995). We affirmed. Smith v. Socialist People's Libyan Arab Jamahiriya, 101 F.3d 239 (2d Cir.1996), cert. denied, --- U.S. ----, 117 S.Ct. 1569, 137 L.Ed.2d 714 (1997).

In 1996, the Antiterrorism and Effective Death Penalty Act ("AEDPA") amended the FSIA by adding what is now 28 U.S.C. § 1605(a)(7). Under this new section, foreign states that have been designated as state sponsors of terrorism are denied immunity from damage actions for personal injury or death resulting from aircraft sabotage.3 Shortly after passage of the AEDPA, the present plaintiffs filed (against the present defendants) substantially the same claims that had been previously dismissed.

The defendants moved to dismiss for lack of subject matter jurisdiction and lack of personal jurisdiction and, in the alternative, to dismiss some of the plaintiffs' claims for failure to state a claim on which relief could be granted. Rein v. Socialist People's Libyan Arab Jamahiriya, 995 F.Supp. 325, 327 (E.D.N.Y.1998). With respect to subject matter jurisdiction, the defendants claimed that the 1996 amendment to the FSIA was unconstitutional and hence could not create subject matter jurisdiction over Libya. The challenge to personal jurisdiction was based on due process and specifically on the theory of minimum contacts.

On February 26, 1998, the district court denied the defendants' motion to dismiss. Judge Platt ruled (1) that his court had subject matter and personal jurisdiction over the defendants, (2) that the FSIA amendments were constitutional, (3) that pendent jurisdiction existed over the plaintiff's claims for battery and other common-law torts, and (4) that no portion of the action should be dismissed for failure to state a claim. Id. at 332.

Libya now appeals.

Libya has raised several issues on this interlocutory appeal, but most of them are not properly before us at this time. Before turning to the merits, therefore, we examine our jurisdiction to review the different aspects of the district court's decision. We conclude that we currently lack jurisdiction to consider any of the appealed issues other than that of sovereign immunity as a defense to subject matter jurisdiction. We then address the subject matter jurisdiction claim.

(A) Interlocutory appeal and the collateral order exception

This appeal is interlocutory, but our jurisdiction is not founded on the interlocutory appeals statute. 28 U.S.C. § 1292(a) permits interlocutory appeals regarding injunctions, receiverships, and admiralty issues, none of which is present in this case. 28 U.S.C. § 1292(b) permits interlocutory appeals under certain circumstances when a district judge certifies issues for immediate review, but Judge Platt did not make any such certification in this case. As a result, § 1292 does not apply.

Instead, our jurisdiction is founded on the "collateral order" exception to the final order rule. Under this exception, an interlocutory appeal is available for "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, 69 S.Ct. 1221, 93 L.Ed. 1528 (1949). The Supreme Court has articulated a three-pronged test for determining when the collateral order exception applies. To qualify, an order must " conclusively determine the disputed question, resolve an important issue completely separate from the merits of the action, and be effectively unreviewable on appeal from a final judgment." Coopers & Lybrand v. Livesay, 437 U.S. 463, 468, 98 S.Ct. 2454, 57 L.Ed.2d 351 (1978).

The denial of Libya's motion to dismiss on the grounds of sovereign immunity is appealable as a collateral order. See Hanil Bank v. PT. Bank Negara Indonesia, (Persero), 148 F.3d 127, 130 (2d Cir.1998). It is easy to see why the district court's ruling on sovereign immunity meets the first two prongs of Coopers & Lybrand. It conclusively determines the issue of subject matter jurisdiction, thus satisfying the first prong, and the issue of jurisdiction is separate from the merits, thus meeting the second.

The reason why that ruling meets the third prong is a bit more complex. When an ordinary, non-sovereign litigant's motion to dismiss for lack of jurisdiction is denied, the denial is entirely reviewable on appeal from final judgment. That is why denials of motions to dismiss for jurisdictional reasons cannot ordinarily be the subject of interlocutory appeals. See, e.g., Van Cauwenberghe v. Biard, 486 U.S. 517, 527, 108 S.Ct. 1945, 100 L.Ed.2d 517 (1988); United States v. Levy, 947 F.2d 1032, 1034 (2d Cir.1991); United States v. Layton, 645 F.2d 681, 683 (9th Cir.1981). But when the jurisdictional issue is one of immunity, including sovereign immunity, appeal from final judgment cannot repair the damage that is caused by requiring the defendant to litigate. "[S]overeign immunity is an immunity from trial and the attendant burdens of litigation[.]" Foremost-McKesson, Inc. v. Islamic Republic of Iran, 905 F.2d 438, 443 (D.C.Cir.1990) (quoting Rush-Presbyterian-St. Luke's Med. Ctr. v. Hellenic Republic, 877 F.2d 574, 576 n. 2 (7th Cir.1989)). A sovereign that is required to litigate a case on the merits before it can appeal the assertion of jurisdiction over it has not been afforded the benefit of the immunity to which it is entitled. See Puerto Rico Aqueduct & Sewer Auth. v. Metcalf & Eddy, Inc., 506 U.S. 139, 145, 113 S.Ct. 684, 121 L.Ed.2d 605 (1993) (making the same point in the context of the sovereign immunity of the states under the Eleventh Amendment). For this reason we have jurisdiction, on an interlocutory appeal, to review Libya's challenges to subject matter jurisdiction in this case. See Hanil Bank, 148 F.3d at 130.

It does not follow, however, that we also have jurisdiction to review all of the other aspects of the district court's order on the same interlocutory appeal. The issue of sovereign immunity as a bar to subject matter jurisdiction is within the "collateral order" exception to the final order rule, but the other issues addressed in the parties' briefs--including personal jurisdiction, substantive liability, and punitive damages--are not. The rationale for permitting interlocutory appeal of the sovereign immunity issue does not apply to these other questions. Nor does some other rationale enable these issues to meet the three requirements of Coopers & Lybrand. The argument that the plaintiffs have failed to state a valid claim fails the second prong, because it is not separate from the merits of the case. And all of the issues (other than sovereign immunity as an objection to subject matter jurisdiction) fail the third prong, because they can be reviewed effectively on appeal from final judgment.

(B) Swint

1. Limitations on pendent interlocutory review

The Supreme Court has, moreover, recently directed the Courts of Appeals not to take "pendent appellate jurisdiction" on interlocutory appeals of issues not themselves immediately appealable. Swint v. Chambers County Comm'n, 514 U.S. 35, 51, 115 S.Ct. 1203, 131 L.Ed.2d 60 (1995). In Swint, the district court denied qualified immunity to county officials. Denials of qualified immunity are immediately appealable,4 and, accordingly, several of the county officials appealed. Their employer, the defendant County Commission, asked the appellate court to exercise "pendent appellate jurisdiction" and to rule at the same time on the County's motion for summary judgment. It requested review regardless of whether there was any independent basis for immediate consideration of its appeal. Id., 514 U.S. at 40, 115 S.Ct. 1203.

The Supreme Court held unanimously that the appellate court, on interlocutory review, lacked jurisdiction over the County's summary judgment motion and could not reach out and decide that issue in the interest of judicial economy. "[C]ourts of appeals," the Court explained, do not have "discretion to append to a Cohen-authorized appeal from a collateral order further rulings of a kind neither independently appealable nor certified by the district court." Id., 514 U.S. at 47, 115 S.Ct. 1203. The Court went on to describe the mischief that might result from a contrary decision: "[A] rule loosely allowing pendent appellate jurisdiction would encourage parties to parlay Cohen-type collateral orders into multi-issue interlocutory appeal tickets." Id., 514 U.S. at 49-50, 115 S.Ct. 1203. That, the Court opined, would eviscerate both the statutory scheme of § 1292, see Swint, 514 U.S. at 47, 115 S.Ct. 1203, and the more general principle that, with only limited exceptions, appeals in the federal system should be limited to the review of final orders.

Both Libya and the plaintiffs attempt to distinguish Swint from the present appeal. They note, among other things, that in Swint the party that tried to raise the jurisdictionally insufficient issue was not the same party that appealed the jurisdictionally sufficient one. In the present case, a single party--Libya--raises all the issues offered for interlocutory review. To put the point in doctrinal terms, the parties would have us distinguish the pendency of parties from the pendency of issues. But the fact that it is possible to differentiate the two, without more, does not provide a reason why the latter kind of pendency should be treated more permissively than the former.5

The Supreme Court explained in Swint that the reason why courts of appeals should not take pendent jurisdiction over issues that do not independently qualify for the collateral order exception is that parties should not be encouraged "to parlay Cohen-type collateral orders into multi-issue interlocutory appeal tickets." Id., 514 U.S. at 49-50, 115 S.Ct. 1203. A system in which parties could get immediate appellate review of multiple issues once the door was opened for review of one issue would tempt such parties to rummage for rulings that would authorize interlocutory appeals, thereby securing appellate decisions on many issues without having to wait until after trial.

It is clear that pendent issues raised by the party that has the right to bring an interlocutory appeal are at least as great a threat to the final-order scheme as are pendent issues raised by other parties. Indeed, it appears, if anything, more likely that one party will appeal a flimsy collateral issue with the intention of obtaining interlocutory review for other issues it presses than that different parties will conspire to secure early appellate rulings. The likelihood of one party opening the door and the other party walking through with its otherwise jurisdictionally insufficient claims seems less great than that of one party, having gotten its foot in the door, seeking to bring in everything else it has. We conclude, therefore, that the contention that Swint bars pendent interlocutory appellate jurisdiction with regard to pendent parties but does not reach pendent issues gets the relationship between those two categories backwards, and that the Supreme Court's restriction on pendent parties applies, a fortiori, to pendent issues raised by a single party. Pendency of parties may appear more complicated than pendency of issues, but under Swint, it is the pendency of issues that is more dangerous.

To be sure, Swint did not create an absolute bar to interlocutory appeals of all issues not independently warranting immediate review. It suggested instead that (a) where an issue is "inextricably intertwined" with a question that is the proper subject of an immediate appeal, or (b) where review of a jurisdictionally insufficient issue is "necessary to ensure meaningful review" of a jurisdictionally sufficient one, an appellate court may exercise pendent jurisdiction. Id., 514 U.S. at 51, 115 S.Ct. 1203. We have read that suggestion restrictively and have held that the two phrases quoted above specify the only circumstances in which we can review immediately an issue that does not independently qualify for interlocutory appeal. See, e.g., Freeman v. Complex Computing Co., 119 F.3d 1044, 1049 (2d Cir.1997). Most of our sister circuits have also adopted a restrictive understanding of the exceptions to Swint 's general rule. See, e.g., Watkins v. City of Oakland, 145 F.3d 1087, 1091 (9th Cir.1998); Chambers v. Ohio Dep't of Human Servs., 145 F.3d 793, 797 (6th Cir.1998), cert. denied --- U.S. ----, 119 S.Ct. 408, 142 L.Ed.2d 331 (1998); Thornton v. General Motors Corp., 136 F.3d 450, 453 (5th Cir.1998) (per curiam); Woolfolk v. Smith, 81 F.3d 741, 743 (8th Cir.1996) (per curiam); Taylor v. Waters, 81 F.3d 429, 437 (4th Cir.1996); Sevier v. City of Lawrence, 60 F.3d 695, 701 (10th Cir.1995); L.S.T., Inc. v. Crow, 49 F.3d 679, 683 n. 8 (11th Cir.1995).

The D.C. Circuit, in contrast, has given Swint a more permissive reading. See Gilda Marx, Inc. v. Wildwood Exercise, Inc., 85 F.3d 675 (D.C.Cir.1996) (per curiam). As a result, on one occasion it has exercised jurisdiction on an interlocutory appeal in circumstances very similar to those now before us. See Jungquist v. Sheikh Sultan Bin Khalifa Al Nahyan, 115 F.3d 1020 (D.C.Cir.1997). A footnote in Gilda Marx had suggested that "inextricably intertwined" and "necessary to ensure meaningful review" should not be considered "a definitive or exhaustive list of conditions" under which Swint permits the exercise of pendent appellate jurisdiction. See Gilda Marx, 85 F.3d at 679 n. 4. Jungquist expanded on that dictum. It held that an appellate court has discretion to exercise pendent jurisdiction on interlocutory appeals when doing so would serve the "interests of fairness and efficiency." See Jungquist, 115 F.3d at 1027. It specified, moreover, that such pendent jurisdiction may exist even over issues that are not inextricably intertwined with issues that formed the basis for permissible interlocutory review.

The question in Jungquist was whether the court could review a challenge to personal jurisdiction on the same interlocutory appeal in which it considered a defense of sovereign immunity under the FSIA. Although it rejected the sovereign immunity defense with respect to certain defendants, and therefore established that, as to them, subject matter jurisdiction existed, id. at 1028, the court noted that it could conclude the case and spare everyone the need to litigate further by considering the personal jurisdiction question, finding no such jurisdiction, and dismissing on those grounds. Id. at 1027. And so it did. Id. at 1032-33.

We believe that the D.C. Circuit misinterpreted Swint. Jungquist would reserve to the courts of appeals a large measure of discretion in deciding when to review pendent issues on immediate appeals of collateral orders. Yet the Supreme Court in Swint expressly stated that affording the appellate courts such discretion would undermine the statutory scheme governing interlocutory review. See Swint, 514 U.S. at 47, 115 S.Ct. 1203; see also id. at nn.4-5 (discussing congressional rejection of the idea that courts of appeals should have discretion of this sort).

Accordingly, and adhering to our existing understanding of Swint and its exceptions, we hold that when a party takes an interlocutory appeal under the collateral order exception, and that party or any other party seeks simultaneous consideration of another issue that is not independently entitled to interlocutory review, we may not, under Swint, take jurisdiction over the latter issue unless it is inextricably intertwined with, or--what is essentially the same thing--its review is necessary to ensure meaningful review of, the former issue.6 We further hold that this remains the case even if considerations of efficiency argue for deciding both issues on interlocutory review.

(C) Relationship between subject matter jurisdiction and personal jurisdiction

Accordingly, we now inquire whether any of the other issues Libya has raised are inextricably intertwined with its claim of sovereign immunity (that is, with its defense to subject matter jurisdiction). We begin with the question of personal jurisdiction. It is true, as the parties urge, that the two kinds of jurisdiction--subjec