Holden v. Canadian Consulate

92 F.3d 918, 96 Daily Journal DAR 9741, 96 Cal. Daily Op. Serv. 5954, 1996 U.S. App. LEXIS 20064, 68 Empl. Prac. Dec. (CCH) 44,240, 71 Fair Empl. Prac. Cas. (BNA) 929, 1996 WL 453266
CourtCourt of Appeals for the Ninth Circuit
DecidedAugust 9, 1996
DocketNo. 94-17130
StatusPublished
Cited by28 cases

This text of 92 F.3d 918 (Holden v. Canadian Consulate) is published on Counsel Stack Legal Research, covering Court of Appeals for the Ninth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Holden v. Canadian Consulate, 92 F.3d 918, 96 Daily Journal DAR 9741, 96 Cal. Daily Op. Serv. 5954, 1996 U.S. App. LEXIS 20064, 68 Empl. Prac. Dec. (CCH) 44,240, 71 Fair Empl. Prac. Cas. (BNA) 929, 1996 WL 453266 (9th Cir. 1996).

Opinion

LEAVY, Circuit Judge:

Arlene Holden, a former commercial officer, sued the Canadian Consulate for wrongful termination alleging, among other claims, sex and age discrimination. The. Consulate moved to dismiss Holden’s complaint based on sovereign immunity under the Foreign Sovereign Immunities Act (FSIA), 28 U.S.C. § 1602. The district court denied the motion finding that Holden’s claims were based on a commercial activity, an exception to sovereign immunity under 28 U.S.C. § 1605(a)(2). The Consulate interlocutorily appeals the district court’s order. We have jurisdiction under the collateral order doctrine. Schoenberg v. Exportadora de Sal, S.A. de C.V., 930 F.2d 777, 779 (9th Cir.1991). We affirm.

[920]*920I. Background

In February 1993, the Canadian government closed its Consulate in San Francisco. As a result, the Consulate laid off numerous employees, including appellee Holden. Holden was a “Commercial Officer” within the Trade and Investment Section of the Canadian Consulate. She held the same position throughout her thirteen year tenure with the Consulate. Her job involved responding to inquiries from Canadian companies regarding information on prospective buyers, assistance in obtaining sales representation or wholesale distributors, provision of names or appointments with trade contacts and evaluations of the sales potential of a particular product. Holden also spent a significant amount of time at trade shows, promotions and seminars. Occasionally, Holden would respond to marketing inquiries from the Canadian government. She would simply relay information to the government, without any opinion or analysis.

In place of the Consulate, Canada opened a small satellite office staffed with only one commercial officer. A competition for that position was held between Holden and another commercial officer, Mark Ritchie. Rit- . chie, a man younger and less experienced than Holden, was selected for the job.

As a result, Holden filed a complaint in the Northern District of California against the Consulate alleging sex discrimination, age discrimination, violation of California public policy, breach of the implied contract to terminate only for cause and breach of the covenant of good faith and fair dealing. The •Consulate moved to dismiss the complaint based on sovereign immunity granted by the FSIA. The district court denied the motion and this interlocutory appeal resulted.

II. Discussion

The existence of subject matter jurisdiction under the FSIA is a question of law which this court reviews de novo. Sideivnan de Blake v. Republic of Argentina, 965 F.2d 699, 706 (9th Cir.1992), cert. denied, 507 U.S. 1017, 113 S.Ct. 1812, 123 L.Ed.2d 444 (1993).

The FSIA is the “sole basis” for obtaining jurisdiction over a foreign state and its agencies and instrumentalities. Argentine Republic v. Amerada Hess Shipping Corp., 488 U.S. 428, 434, 109 S.Ct. 683, 688, 102 L.Ed.2d 818 (1989). Under the FSIA, foreign states are presumed to be immune from the jurisdiction of United States courts unless one of the FSIA’s exceptions applies. 28 U.S.C. § 1604. Under the “commercial activities” exception, a foreign state is not immune if the plaintiffs cause of action is based upon a commercial activity carried on by the foreign state. 28 U.S.C. § 1605(a)(2). The FSIA defines “commercial activity” as “a regular course of commercial conduct or a particular transaction or act.” 28 U.S.C. § 1603(d). In determining the commercial character of an activity, the FSIA directs courts to examine the nature of the act or course of conduct, rather than the purpose. Id.

The Supreme Court has developed some additional guidelines. A foreign sovereign engages in commercial activity when it exercises “only those powers that can also be exercised by private citizens,” versus those “powers peculiar to sovereigns.” Saudi Arabia v. Nelson, 507 U.S. 349, 360, 113 S.Ct. 1471, 1479, 123 L.Ed.2d 47 (1993); Republic of Argentina v. Weltover, Inc., 504 U.S. 607, 614, 112 S.Ct. 2160, 2166, 119 L.Ed.2d 394 (1992). The commercial activity exception applies only where the sovereign acts “in the market in the manner of a private player.” Weltover, 504 U.S. at 614, 112 S.Ct. at 2166.

Further, it is not enough for the foreign state merely to have engaged in a commercial activity. Rather the statutory language requires that the plaintiffs cause of action be “based upon” the commercial activity in question. Gates v. Victor Fine Foods, 54 F.3d 1457, 1463 (9th Cir.), cert. denied, — U.S. —, 116 S.Ct. 187, 133 L.Ed.2d 124 (1995). A plaintiffs claim is “based upon” those activities that are elements of the claim that would entitle the plaintiff to relief. Saudi Arabia, 507 U.S. at 356-57, 113 S.Ct. at 1477.

The Consulate contends Holden’s suit is based on Canada’s decision to close its Consulate which resulted in the loss of Holden’s job. Such decision was clearly a sovereign [921]*921act. Holden, however, does not challenge the right of Canada to close its Consulate. Rather her suit is based on the fact that she was terminated and a younger man was not.

Given the FSIA’s lack of a clear definition of “commercial activity,” we turn to the statute’s legislative history which provides a useful framework for analyzing the question. The FSIA’s corresponding House Report states, “Also public or governmental and not commercial in nature, would be the employment of diplomatic, civil service, or military personnel, but not the employment of American citizens or third country nationals by the Foreign state in the United States.” H. Rep. No. 94-1487, 94th Cong., 2d Sess. at 16, reprinted at 1976 U.S.Code Cong. & Ad. News 6604, 6615. The report further states, “Activities such as a government’s ... employment or engagement of laborers, clerical staff or public relations or marketing agents ... would be among those included within the definition [of commercial activity].” Id.

? adopt the standard suggested by the legislative history, that is, employment of diplomatic, civil service or military personnel is governmental and the employment of other personnel is commercial. Because private parties cannot hire diplomatic, civil service or military personnel, such hiring is necessarily governmental.

The Seventh Circuit has already adopted the analytical framework suggested by the House Report. See Segni v. Commercial Office of Spain, 885 F.2d 160, 165 (7th Cir.1987).

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92 F.3d 918, 96 Daily Journal DAR 9741, 96 Cal. Daily Op. Serv. 5954, 1996 U.S. App. LEXIS 20064, 68 Empl. Prac. Dec. (CCH) 44,240, 71 Fair Empl. Prac. Cas. (BNA) 929, 1996 WL 453266, Counsel Stack Legal Research, https://law.counselstack.com/opinion/holden-v-canadian-consulate-ca9-1996.