Dorothy A. Wilson and Louis P. Wilson v. Humphreys (Cayman) Limited, a Corporation, and Holiday Inns, Inc., a Corporation

916 F.2d 1239
CourtCourt of Appeals for the Seventh Circuit
DecidedNovember 21, 1990
Docket88-2495, 88-2496
StatusPublished
Cited by123 cases

This text of 916 F.2d 1239 (Dorothy A. Wilson and Louis P. Wilson v. Humphreys (Cayman) Limited, a Corporation, and Holiday Inns, Inc., a Corporation) is published on Counsel Stack Legal Research, covering Court of Appeals for the Seventh Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Dorothy A. Wilson and Louis P. Wilson v. Humphreys (Cayman) Limited, a Corporation, and Holiday Inns, Inc., a Corporation, 916 F.2d 1239 (7th Cir. 1990).

Opinions

RIPPLE, Circuit Judge.

Dorothy and Louis Wilson initiated this diversity action in 1986. The Wilsons as[1241]*1241serted that the two defendants involved in this appeal, together with a third defendant, were liable to them for damages in connection with a serious injury suffered by Mrs. Wilson while staying as a guest in appellant Humphreys’ hotel.1 Humphreys and Holiday Inns moved to dismiss the complaint due to lack of subject matter and personal jurisdiction, and asserted that the forum selected by the plaintiffs violated the doctrine of forum non conveniens. The district court denied these motions. Upon application by the appellants, the district court certified the questions of jurisdiction and forum non conveniens to this court on May 25, 1988 (for Humphreys), and July 7, 1988 (for Holiday Inns). This court accepted the appeal on July 13, 1988. We now affirm the judgment of the district court in part and remand for further consideration.

I

BACKGROUND

Humphreys (Cayman) Limited is incorporated under the laws of the Cayman Islands. Humphreys is a licensee of appellant Holiday Inns, Inc. and operates a hotel in the Cayman Islands under authority of that license. Humphreys maintains a corporate office in Memphis, Tennessee and has operated a reservations office in Miami, Florida. Holiday Inns, Inc. is a Tennessee corporation and is registered to do business in Indiana. The record does not reveal the nature or extent of its activities within the state.

Since 1976, Humphreys has participated in a continuing commercial relationship with American Trans Air (American) to provide accommodations for tours run by American to the Cayman Islands. As part of this relationship, Humphreys sent officers to Indianapolis on at least one occasion to meet with representatives of American. During a trip to Indiana in the summer of 1981, Humphreys’ representatives negotiated a long-term contract with American by which a certain number of rooms at Hum-phreys’ hotel would be guaranteed at a reduced rate for American-run tours, with American tour leaders receiving free accommodations. American frequently has listed trips to the Cayman Islands in its regular advertising brochures and has included specific references to Humphreys’ hotel. In addition, Humphreys advertises extensively in national magazines directed both at travel agents and potential travel-lers. Humphreys printed rate cards and brochures that it sent for further distribution to American in Indiana and to various travel agents around the country.

Dorothy and Louis Wilson participated in a tour organized by American that left Indianapolis International Airport on October 28, 1984. The group stayed at Hum-phreys’ hotel in the Cayman Islands. According to Mrs. Wilson’s affidavit, arrangements for the trip were made as a result of advertisements for the tour that appeared in American’s travel bulletin. Arrangements were made with American’s tour subsidiary, Ambassadair, and payment was made to Ambassadair in Indianapolis, Indiana.

On October 30, 1984, Mrs. Wilson was assaulted by an intruder in her hotel room. The intruder attempted to rob and rape Mrs. Wilson, and she suffered serious injuries. She spent a week in a hospital on the Cayman Islands and then returned to Indianapolis to be treated at Methodist Hospital.

The complaint contains thirteen counts against the two appellants in this case. The counts charge the appellants with negligence, breach of express and implied warranties, breach of contract, and negligent infliction of emotional distress. The appellants moved to dismiss the complaint on the grounds of lack of subject matter or personal jurisdiction, and forum non conve-niens. The district court denied these motions, but subsequently certified them for [1242]*1242interlocutory appeal pursuant to 28 U.S.C. § 1292(b). We accepted the appeal and now consider each issue in turn.

II

ANALYSIS

A. Subject Matter Jurisdiction

Diversity jurisdiction in this suit is based on 28 U.S.C. § 1332(a)(3), which provides for jurisdiction when the suit is between “citizens of different States and in which citizens or subjects of a foreign state are additional parties.” Humphreys argues that the district court cannot exercise subject matter jurisdiction over it because it is a company incorporated in the Cayman Islands, and the Cayman Islands is not a “foreign state.” Humphreys reaches this conclusion by noting that the Cayman Islands is a dependency of Great Britain and that the United States does not regard the Cayman Islands as an independent sovereign. See The World Factbook 1989 at 56.

The power to exercise jurisdiction over a foreign citizen under 28 U.S.C. § 1332 has been referred to as “alienage jurisdiction.” Sadat v. Mertes, 615 F.2d 1176, 1182 (7th Cir.1980). This type of jurisdiction “was intended to provide the federal courts with a form of protective jurisdiction over matters implicating international relations where the national interest was paramount.” Id.

“The dominant considerations which prompted the provision for such jurisdiction appear to have been:
(1) Failure on the part of individual states to give protection to foreigners under treaties; ... [and]
(2) Apprehension of entanglements with other sovereigns that might ensue from failure to treat the legal controversies of aliens on a national level.”

Id. (quoting Blair Holdings Corp. v. Rubinstein, 133 F.Supp. 496, 500 (S.D.N.Y.1955)).

Our inquiry therefore must be whether the policies supporting alienage jurisdiction permit a United States District Court to assume jurisdiction over a citizen of the Cayman Islands.2 The Cayman Islands is a British Dependent Territory.3 A citizen of a British Dependent Territory is a “citizen of the United Kingdom and Colonies.” British Nationality Act 1981 § 51(3)(a)(ii). According to an affidavit of a Cayman Islands attorney submitted by Humphreys, the court system in the Cayman Islands is patterned after that of Great Britain. In addition, “[t]he Common Law of England ... is recognised and applied by the Courts in all cases where there has not been a specific local enactment.” Humphreys’ App. at 66. The Cayman Islands is administered by a governor who is appointed by the British monarch. The United Kingdom represents Caymanian diplomatic interests and is responsible for its military defense. The World Factbook 1989 at 56.

Several federal courts have determined, although generally without discussion, that subject matter jurisdiction existed in suits between citizens of the United States and Cayman Island corporations. See Bally Export Corp. v. Balicar, Ltd., 804 F.2d 398, 399-400 (7th Cir.1986); Philan Ins. Ltd. v. Frank B. Hall & Co., Inc., 712 F.Supp. 339, 345 (S.D.N.Y.1989); Rolls Royce (Canada) Ltd. v. Cayman Airways, Ltd., 617 F.Supp. 17, 18 (S.D.Fla.1985).

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