Randolph v. Budget Rent-A-Car

97 F.3d 319, 1996 WL 535045
CourtCourt of Appeals for the Ninth Circuit
DecidedSeptember 23, 1996
DocketNos. 95-55402, 95-55465
StatusPublished
Cited by47 cases

This text of 97 F.3d 319 (Randolph v. Budget Rent-A-Car) 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
Randolph v. Budget Rent-A-Car, 97 F.3d 319, 1996 WL 535045 (9th Cir. 1996).

Opinion

OPINION

THOMAS, Circuit Judge:

This case presents the question of whether an instrumentality of a foreign nation may be held liable for negligent torts committed by a scholarship student trainee in the United States. We hold that the Foreign Sovereign Immunities Act precludes federal jurisdiction for such an action and reverse the district court’s judgment against Saudi Arabian Airlines (“Saudia”).

I. Facts and Procedural History

Fahad Abdullah Maghrabi (Maghrabi) is a subject of the Kingdom of Saudi Arabia who received a scholarship from an ongoing Sau-dia training program to study English and aircraft maintenance in the United States. Saudia provided Maghrabi with money for various living expenses, including clothing, medical and dental insurance, and books and tools needed for school. Saudia did not withhold taxes from any of the payments it made to Maghrabi as it normally does for its U.S. employees. Maghrabi was not promised he would be employed by Saudia after finishing his studies in the United States. Rather, he would be eligible to be considered for em[323]*323ployment only after successfully completing additional training in Saudi Arabia.

Maghrabi signed a “Personal Responsibility” statement as a condition to participating in the training program which reads as follows:

I, the undersigned, understand that while I am in the United States as a student, I am solely responsible for my actions. If I intend to drive while in the United States, I will obtain a valid driver’s license for the State in which I reside and will acquire sufficient insurance for protection against personal liability and property damage.
I understand that Saudia’s sole interest in my activities in the United States is to have me meet the academic standards of my school and that Saudia does not supervise or control my personal conduct while in the United States. I further understand that my personal conduct is my own responsibility and that failure to conduct myself properly may be considered by Saudia in any subsequent offer of employment.
I further understand that the choice of whether to purchase or rent any vehicle is entirely up to me and that I am solely responsible for the costs of such vehicle, including the purchase price, rental and any insurance I may be required to carry.

Maghrabi studied English at Northrop University in Santa Monica, California from June 1990 to September 1991. He then moved to San Antonio, Texas, where he studied airframe and power mechanics at the Hallmark Institute of Technology, graduating on January 15, 1993. After graduation but before his scheduled return to Saudi Arabia on February 4, 1993, Maghrabi personally purchased a round-trip ticket from San Antonio to Los Angeles.

Saudia employees, unlike student trainees, are eligible for discounted travel on U.S. airlines. Maghrabi received neither reimbursement nor discount for his air travel from Saudia. He flew to Los Angeles on January 22,1993 and personally rented a ear from Budget. On January 26, 1993, in Malibu, California, Maghrabi negligently crashed his rented automobile into John Randolph’s motorcycle, injuring his knee, left hand and pelvis.

John and Johanne Randolph filed this action against Maghrabi, Saudia, and Budget in Los Angeles Superior Court to recover damages for John Randolph’s injuries and Jo-hanne Randolph’s loss of consortium. Sau-dia, a corporation wholly owned by the Saudi Arabian government, removed the action to federal district court pursuant to 28 U.S.C. § 1441(d) and asserted the Foreign Sovereign Immunities Act as a defense.

The district court denied Saudia’s and granted Randolph’s motion for summary judgment, ruling as a matter of law that Maghrabi was a Saudia employee acting within the scope of his employment at the time of the accident.

After a bench trial on damages, the district court entered a judgment of $914,253.83 against Saudia and $30,000 against Budget Rent-A-Car (“Budget”). Both Budget and Saudia appealed.

II. Jurisdiction Under the Foreign Sovereign Immunities Act

The threshold issue in this case is whether jurisdiction exists. Although neither party challenged the district court’s jurisdiction on appeal, we are obliged to raise sua sponte issues concerning district courts’ subject matter jurisdiction. Benavidez v. Eu, 34 F.3d 825, 830 (9th Cir.1994). This examination is particularly important in appeals examining the liability of foreign governments and their instrumentalities. Security Pac. Nat’l Bank v. Derderian, 872 F.2d 281, 283 (9th Cir.1989).

The Foreign Sovereign Immunities Act (“FSIA”) is the exclusive basis for federal jurisdiction over a suit involving an agency or instrumentality of a foreign state. Export Group v. Reef Industries, 54 F.3d 1466, 1469 (9th Cir.1995). Federal jurisdiction does not attach until it is determined that the foreign sovereign lacks immunity under the provisions of the FSIA Security Pac. Nat’l Bank, 872 F.2d at 283. As a question of law, we review the existence of subject matter jurisdiction under the FSIA de novo. Ex[324]*324port Group, 54 F.3d at 1469. The district court’s findings of fact relevant to its determination of subject matter jurisdiction must be accepted unless clearly erroneous. Wang v. Reno, 81 F.3d 808, 813 (9th Cir.1996).

The FSIA creates a statutory presumption that a foreign state is immune from suit unless one of the exceptions to immunity enumerated in 28 U.S.C. §§ 1605 to 1607 applies. 28 U.S.C. § 1604. Once a plaintiff offers evidence that an exception to immunity applies, the defendant bears the burden of proving by a preponderance of the evidence that the exception does not apply. Siderman de Blake v. Republic of Argentina, 965 F.2d 699, 707-08 (9th Cir.1992), cert. denied, 507 U.S. 1017, 113 S.Ct. 1812, 123 L.Ed.2d 444 (1993).

Under the FSIA, an “agency or instrumentality of a foreign state” includes a corporation wholly owned by a foreign state, such as Saudia. 28 U.S.C. § 1603(b). Thus, Saudia is immune from suit unless a statutory exception exists.

A. The Commercial Activity Exception.

The district court exercised jurisdiction under the FSIA “commercial activity” exception contained in 28 U.S.C. § 1605(a)(2), which provides that a foreign sovereign is not immune to suits:

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Owens v. SBP Consulting, LLC
E.D. Virginia, 2025
Diaz v. Starbucks Corporation
N.D. California, 2023
Ohan v. Zion
D. Alaska, 2023
Blecher v. The Holy See
S.D. New York, 2022
Shamoun v. Republic of Iraq
S.D. California, 2020
Brooks v. The GEO Group, Inc.
N.D. California, 2019
Aldf v. Usda
Ninth Circuit, 2019
Animal Legal Defense Fund v. U.S. Dep't of Agric.
933 F.3d 1088 (Ninth Circuit, 2019)
Vinum Tokaj International, LLC v. Grand Tokaj Zrt
668 F. App'x 790 (Ninth Circuit, 2016)
Terry v. Sapphire Gentlemen's Club
2014 NV 87 (Nevada Supreme Court, 2014)
Davoyan v. Republic of Turkey
116 F. Supp. 3d 1084 (C.D. California, 2013)
Arnold v. Mutual of Omaha Insurance
202 Cal. App. 4th 580 (California Court of Appeal, 2011)
Peterson v. Islamic Republic of Iran
627 F.3d 1117 (Ninth Circuit, 2010)
Doe v. See
557 F.3d 1066 (Ninth Circuit, 2009)
Doe v. Holy See
Ninth Circuit, 2009

Cite This Page — Counsel Stack

Bluebook (online)
97 F.3d 319, 1996 WL 535045, Counsel Stack Legal Research, https://law.counselstack.com/opinion/randolph-v-budget-rent-a-car-ca9-1996.