Lyon v. Agusta, S.P.A.

252 F.3d 1078, 2001 WL 618584
CourtCourt of Appeals for the Ninth Circuit
DecidedJune 7, 2001
DocketNos. 99-55986, 99-56011, 99-55987, 99-56010
StatusPublished
Cited by86 cases

This text of 252 F.3d 1078 (Lyon v. Agusta, S.P.A.) 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
Lyon v. Agusta, S.P.A., 252 F.3d 1078, 2001 WL 618584 (9th Cir. 2001).

Opinion

FERNANDEZ, Circuit Judge:

David Lyon, Steven Pollack and Roy Belzer were killed in the crash of an airplane. Kathy Lyon, et al., and Belinda Pollack, et al., survivors of David Lyon and Steven- Pollack, respectively, (collectively Survivors) brought this action against Agusta S.P.A., Agusta Aerospace Corporation, Sesto Calende Works of Agusta, and Siai Marchetti Corporation. The Agusta entities are owners of Marchetti, which designed and manufactured the aircraft. Those entities and Marchetti are instru-mentalities of the Republic of Italy.1 Mar-chetti moved to dismiss the action on the basis that under the Foreign Sovereign Immunities Act of 1976 (the FSIA), the district court did not have jurisdiction over it. See 28 U.S.C. § 1604. It also moved to dismiss on the basis that the action was barred by the provisions of the General Aviation Revitalization Act of 1994 (GARA). See Pub.L. No. 103-298, 108 Stat. 1552 (1994) (provisions at 49 U.S.C. § 40101 notes). The district court denied the former motion and granted the latter. The Survivors and Marchetti appeal. We affirm.

BACKGROUND

On November 26, 1993, an airplane designed and manufactured by Marchetti and known as model F-260 crashed in Santa Monica, California. David Lyon and Steven Pollack were aboard, and both were killed in the accident. The airplane had originally been sold by Marchetti in December of 1970 to SA Sabena N.V. in Belgium and had, after intervening transfers, become the property of the owner of the craft at the time of the crash. The Survivors brought their action on November 15, 1994, but the effective date of GARA was August 17, 1994, and that Act declares that, absent certain defined exceptions, “no civil action ... may be brought against the manufacturer ... if the accident occurred” more than 18 years after the aircraft was delivered to the first purchaser or to a person in the business of selling aircraft. GARA §§ 2(a), 3(3). The Survivors asserted that the Act did not apply to them. They also asserted that Marchetti had failed to issue later warnings about an alleged problem with the aircraft, and that amounted to replacement of a component part, which would have started a new 18-year period running from the time of that failure. The district court held that GARA barred the actions.

STANDARDS OF REVIEW

We review de novo a district court’s dismissal of a complaint for failure to state a claim. Johnson v. Knowles, 113 F.3d 1114, 1117 (9th Cir.1997). “A complaint should not be dismissed unless it appears beyond doubt that the Plaintiffs can prove no set of facts in support of their claim that would entitle them to relief.” Id. We also review de novo the issue of whether a statute applies retrospectively. United States ex rel. Lindenthal v. Gen. [1082]*1082Dynamics Corp., 61 F.3d 1402, 1406-07 (9th Cir.1995). In addition, the existence of subject matter jurisdiction under the FSIA is a question of law, which we review de novo. Phaneuf v. Republic of Indonesia, 106 F.3d 302, 304-05 (9th Cir.1997). Finally, we review the district court’s denial of a Federal Rule of Civil Procedure 60(b) motion for an abuse of discretion. Civic Ctr. Square, Inc. v. Ford (In re Roxford Foods, Inc.), 12 F.3d 875, 879 (9th Cir.1993).

JURISDICTION

Before proceeding any further, we must determine whether we have jurisdiction over this action in light of the fact that Marchetti is an instrumentality of the Republic of Italy.2 There can be no dispute about the general rule that “a foreign state shall be immune from the jurisdiction of the courts of the United States.” 28 U.S.C. § 1604. Of course, there are exceptions to that, id., and one of them is that there shall not be immunity in a case “in which the action is based ... upon an act outside the territory of the United States in connection with a commercial activity of the foreign state elsewhere and that act causes a direct effect in the United States.” 28 U.S.C. § 1605(a)(2).

The parties do agree that Marchetti’s acts of designing, manufacturing and selling the F-260 were “in connection with a commercial activity” and that the activity was “outside the territory of the United States.” What is in dispute is whether that activity caused “a direct effect in the United States,” and it is that rather enigmatic proposition that we must construe. The Supreme Court has unraveled the enigma to some extent.

In Republic of Argentina v. Weltover, Inc., 504 U.S. 607, 112 S.Ct. 2160, 119 L.Ed.2d 394 (1992), the Court was faced with a situation where Argentina had issued certain bonds payable in United States dollars, with payment, at the election of the creditor, to be made on the New York market. Id. at 609-10, 112 S.Ct. at 2163-64. When the bonds matured, Argentina did not pay them, and an action was commenced against it in the United States District Court for the Southern District of New York. Pursuant to the FSIA, Argentina moved to dismiss for lack of jurisdiction, but that motion was denied. Id. at 610, 112 S.Ct. at 2164. The Court began by rejecting the notion that in order for an effect to be direct, it must be substantial or foreseeable. Id. at 618, 112 S.Ct. at 2168. Rather, said the Court, “an effect is ‘direct’ if it follows ‘as an immediate consequence of the defendant’s ... activity.’ ” Id. (citation omitted). The Court, thus, explicated the text with an oracular pronouncement of its own., It had little trouble in applying that to the case before it, where Argentina had actually contracted to make payments in the United States. Id. at 618-19, 112 S.Ct. at 2168-69. Its application here is not quite as obvious.

Because of that, Marchetti seizes on a case in which a district court held that the FSIA exception did not apply to the crash of a helicopter in Colorado. Four Corners Helicopters, Inc. v. Turbomeca S.A., 677 F.Supp. 1096, 1097 (D.Colo.1988). That craft was manufactured, at least in part, by an instrumentality of France and was sold in that country. Id. at 1098. The helicopter finally found its way into the United States many years later. The court, which did not have the benefit of Weltover, ruled that in order to have a direct effect here “[t]he injury suffered by [1083]*1083the plaintiff must be ‘a substantial, foreseeable and immediate causal result of an act of the defendant outside the United States in connection with [defendant’s] commercial activity elsewhere.’ ” Id. at 1101 (citation omitted). But that is exactly what the Supreme Court said the effect need not be. Again, it need only be an “immediate consequence” of the defendant’s activity. Thus, Marchetti’s reliance on Four Comers is misplaced. See Adler v. Fed. Republic of Nigeria, 219 F.3d 869, 876 (9th Cir.2000); see also Corzo v. Banco Cent. de Reserva del Peru,

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Bluebook (online)
252 F.3d 1078, 2001 WL 618584, Counsel Stack Legal Research, https://law.counselstack.com/opinion/lyon-v-agusta-spa-ca9-2001.