Opinion
Civil No. 04-1211 (JRT).
August 5, 2004
J. Gordon Rudd, Jr., and David M. Cialkowski, ZIMMERMAN REED P.L.L.P., Minneapolis, MN and Steven E. Angstreich, LEVY, ANGSTREICH, FINNEY, BALDANTE RUBENSTEIN COREN P.C., Woodcrest Pavilion, Cherry Hill, New Jersey for plaintiffs.
Tracy J. Van Steenburgh, HALLELAND LEWIS NILAN SIPKINS JOHNSON, P.A., Pillsbury Center South, Minneapolis, MN and Steven M. Kohn, David E. Stanley, and Paul D. Fogel, REED SMITH L.L.P, Oakland, CA, for defendant.
MEMORANDUM OPINION AND ORDER
Plaintiffs Shane O'Neill and his wife, Gabrielle Sanio-O'Neill, filed this products liability action against defendant St. Jude Medical ("SJM") in Ramsey County District Court. SJM removed to this Court; plaintiffs move to remand For the following reasons, the Court grants plaintiffs' motion.
BACKGROUND
This matter is related to the multi-district litigation In re: St. Jude Medical, Inc., Silzone Heart Valves Products Liability Litigation, 01-md-1396, that is currently pending before this Court. For a more thorough discussion of the factual background of these cases, see this Court's Memorandum Opinion and Order on Motion for Class Certification dated March 27, 2003.
ANALYSIS
I. PLAINTIFFS' MOTION TO REMANDThe so-called federal common law of foreign relations recognizes that questions necessarily implicating relations between the United States and foreign states should be considered as a matter of federal law, not state or public international law. Banco Nacional de Cuba v. Sabbatino, 376 U.S. 398, 425-27 (1964). As federal question jurisdiction "will support claims founded upon federal common law," Illinois v. City of Milwaukee, 406 U.S. 91, 100 (1972), courts have determined that an assertion of federal common law of foreign relations may be sufficient to support federal question jurisdiction. See, e.g., Republic of the Philippines v. Marcos, 806 F.2d 344, 352-54 (2d Cir. 1986).
"[T]he presence or absence of federal-question jurisdiction is governed by the `well-pleaded complaint rule,' which provides that federal jurisdiction exists only when a federal question is presented on the face of plaintiff's properly pleaded complaint." Rivet v. Regions Bank of Louisiana, 522 U.S. 470, 475 (1998) (internal quotation omitted). The complaint must state a cause of action created by federal law, or must assert a state-law cause of action requiring the "resolution of a substantial question of federal law." Franchise Tax Bd. of Cal. v. Constr. Laborers Vacation Trust, 463 U.S. 1, 13 (1983); but see Chapalain Compagnie v. Standard Oil Co., 467 F. Supp. 181, 186 (N.D. Ill. 1978) ("the plaintiffs may not defeat original federal jurisdiction, and hence, removal jurisdiction, by adroitly avoiding the citation of federal issues or authority in the complaint") (citations omitted). It is plain, in this case, that plaintiffs' complaint does not include a claim created by federal law. Thus, federal question jurisdiction based on the federal common law of foreign relations will exist only if plaintiffs' properly pleaded complaint raises a claim that necessarily implicates and may substantially impact relations between the United States and a foreign state.
In Sabbatino, the Supreme Court found that the "act of state" doctrine, whereby "the courts of one country will not sit in judgment on the acts of the government of another, done within its own territory," was an example of this federal common law of foreign relations. There is broad agreement, based on Sabbatino, that a claim explicitly involving the legality of an act of a foreign state is highly likely to give rise to federal question jurisdiction. See Marcos, 806 F.2d at 354; see also Patrickson v. Dole Food Co., Inc., 251 F.3d 795, 801 (9th Cir. 2001); Torres v. Southern Peru Copper Corp., 113 F.3d 540, 542 (5th Cir. 1997); Sequihua v. Texaco, Inc., 847 F. Supp. 61, 62 (S.D. Tex. 1994). However, there is disagreement over how strictly the well-pleaded complaint rule must be applied in more ambiguous cases that do not directly involve an act of a foreign state. In other words, there is disagreement over whether a "well-pleaded" complaint must explicitly contain a question of federal common law of foreign relations in order for federal question jurisdiction to exist, or whether it is sufficient for otherwise non-federal claims to implicate a matter of foreign relations.
The Ninth Circuit maintains the strictest interpretation of the rule, intimating that it would only find federal question jurisdiction based on the federal common law of foreign relations where the four corners of the complaint included claims actually involving foreign affairs. See Dole, 251 F.3d at 801, 803-04; accord In re Tobacco/Governmental Health Care Costs Litigation, 100 F. Supp. 2d 31 (D.D.C. 2000). In Dole, the court noted that while "federal courts have preeminence in developing all areas of federal law," "Congress has provided federal jurisdiction in certain cases implicating our foreign relations," but "has not . . . extend[ed] federal-question jurisdiction to all suits where the federal common law of foreign relations might arise as an issue." 251 F.3d at 803 (internal citations omitted). "The [Supreme] Court left no doubt that the substantive law of foreign relations must be federal, and it stressed the need for national uniformity. But Sabbatino does not say that federal courts alone are competent to develop this body of law." Dole, 251 F.3d at 802 (citation omitted). "If federal courts are so much better suited than state courts for handling cases that might raise foreign policy concerns, Congress will surely pass a statute giving us that jurisdiction." Id. at 804. The Ninth Circuit strongly rejected the alternative, more flexible approach applied by the Fifth Circuit in Torres v. Southern Peru Copper Corp., 113 F.3d 540 (5th Cir. 1997).
In Torres, the Fifth Circuit, after noting the well-pleaded complaint rule, found that a complaint alleging only state law tort claims nevertheless implicated the federal common law of foreign relations so as to support federal question jurisdiction. 113 F.3d at 542-43; see also Pacheco de Perez v. ATT Co., 139 F.3d 1368, 1377-79 (11th Cir. 1998) (same). The Torres court noted that the action struck at Peru's "vital economic interests" because the mining industry was critical to Peru's economy and defendant was the largest company in the industry. Id.; but see Dole, 251 F.3d at 804 n. 9 ("Inviting foreign governments to tell us how litigation in our courts affects their interests can only put us in the awkward position of causing an affront to those governments if their interests are not respected. We consider it far more prudent to state clearly that the effect of the litigation on the economies of foreign countries is of absolutely no consequence to our jurisdiction."). Further, the court determined that the action implicated "Peru's sovereign interests by seeking damages for activities and policies in which the government actively has been engaged." Id. at 543. The court also noted that Peru had protested the lawsuit by filing a letter with the State Department and by submitting an amicus brief explicitly maintaining that the litigation implicated vital national interests and would affect its relations with the United States. Id. at 542. While not dispositive, Peru's interjection indicated to the court the importance of the foreign policy issues raised. Id.
SJM argues that plaintiffs' European Directive claim will require the interpretation and application of EU law and of laws of the various European countries. SJM also points out that the class action mechanism and some of the remedies requested by plaintiffs are not widely available in Europe. Thus, SJM argues, permitting plaintiffs to proceed in U.S. courts would implicitly question the decisions of the European governments to limit the availability of these remedies and possibly disrupt a carefully constructed web of interrelated policies and procedures.
SJM relies heavily on Sequihua v. Texaco, Inc., 847 F. Supp. 61 (S.D. Tex. 1994), an earlier case with substantial similarities to Torres. In Sequihua, a group of Ecuadorian citizens sued Texaco for injuries related to air, water, and ground contamination. The district court found federal question jurisdiction "[b]ased upon the important foreign policy implications of this case, upon the international legal principle that each country has the right to control its own natural resources, and the strong opposition expressed by the Republic of Ecuador to [the] litigation." 847 F. Supp. at 63. More specifically, the court noted that Ecuador had "officially protested [the] litigation, asserting that it will do `violence' to the international legal system," that the land implicated amounted to approximately one-third of Ecuador and was owned by the government, that Ecuador regulates petroleum and treats all petroleum exploration and development as a "public utility" controlled by the government rendering plaintiffs claims a direct challenge to Ecuador's action and policies, and that the request for a medical monitoring fund would require "[the] Court to step into the shoes of the Ecuadorian Health Ministry . . . for as many as 500,000 Ecuadorian citizens over the protest of the government of Ecuador." Id. at 62-63.
Plaintiffs counter that the instant case is distinguishable from Torres and Sequihua, even under the Fifth Circuit's more permissive application of the well-pleaded complaint rule, and that federal question jurisdiction therefore does not exist. The Court agrees.
Notwithstanding Torres, the Fifth Circuit has not been eager to grant federal question jurisdiction premised on the federal common law of foreign relations. In Marathon Oil Co. v. Ruhrgas, 115 F.3d 315 (5th Cir. 1997), for example, the same panel of the Fifth Circuit that decided Torres took pains to narrow the scope of Torres, noting that
This case has a complicated history. The case was removed from state court to federal court, where the District Court initially dismissed this case for lack of personal jurisdiction. On appeal, Marathon asserted that the District Court should have remanded for lack of subject matter jurisdiction rather than dismiss for lack of personal jurisdiction. Ruhrgas argued that the District Court was obliged to consider personal jurisdiction prior to subject matter jurisdiction. 115 F.3d at 317-18. The Fifth Circuit declined to create a mandatory rule of procedure regarding the order in which jurisdictional motions must be determined, but then, noting its ongoing duty to examine the existence of subject matter jurisdiction, found that the federal courts lacked subject matter jurisdiction and ordered the case remanded to state court. Id. at 321. The Fifth Circuit en banc held that personal jurisdiction must be considered before any other argument. 145 F.3d 211, 215 (1998). The Supreme Court reversed, finding that the District Court, in its discretion, may consider other questions prior to considering subject matter jurisdiction. 526 U.S. 574, 585-87 (1999). None of these subsequent decisions addressed the substance of the Fifth Circuit panel's discussion of the federal common law of foreign relations as a basis for subject matter jurisdiction. The Court notes that the Fifth Circuit panel opinion was vacated, and thus is no longer binding precedent on any court, but nevertheless finds its reasoning persuasive.
Torres is a very specific application of the well-pleaded complaint rule, under which the complaint must state a cause of action necessarily requiring the resolution of a substantial question of federal law. That test was met in Torres because the suit itself struck directly at vital economic interests of the nation, and, indeed, at the very sovereignty of the Republic of Peru.115 F.3d at 320 (internal quotation omitted). The court went on to distinguish Ruhrgas from Torres by noting that the Ruhrgas plaintiffs' claims did not call into question official German policy decisions, did not allege that Germany was a participant in the activities in question, did not seek to impose liability for injuries to foreign citizens on foreign soil, and could not be said to "impact severely the vital economic interests of a highly developed and flourishing industrial nation such as Germany." Id.
The Eleventh Circuit, in Pacheco, adopted the principles of Torres, and then, as in Ruhrgas, distinguished Torres on the facts. 139 F.3d at 1377-79. Although defendants had pointed out a variety of ways in which the suit was connected and important to the Venezuelan government, the court noted that "the Venezuelan government has taken no position on whether this lawsuit proceeds in the United States or in Venezuela." Id. at 1378. Without some indication that Venezuela was concerned about the action, the court was unwilling to consider its resolution to implicate matters of foreign relations. Further, in comparison to Peru's direct involvement in the activity in question in Torres, the court found Venezuela's connection to the activity "too speculative and tenuous to confer federal jurisdiction over [the] case." Id.
This Court finds the instant matter more similar to Ruhrgas and Pacheco than to Torres or Sequihua. Neither the European Union nor any government is a party or is implicated in the activities in question in this case. Although an EU agency licensed the Silzone valve for use, plaintiffs make no allegations concerning this action. Additionally, to date, no European government or the European Union has officially involved itself in this matter either by addressing the State Department or this Court. SJM contends that several governmental officials have expressed interest in the proceedings. That, however, is a far cry from Peru's or Ecuador's strenuous objection to the actions in Torres and Sequihua, or even from the expression of interest that Germany filed with the court in Ruhrgas. It therefore appears to the Court that this case does not present a risk of unduly or inappropriately impacting the sovereign interests of the countries of Europe or of the European Union.
Similarly, the outcome of this case does not implicate vital economic interests of any European country or of the EU. In both Torres and Sequihua, the industries in question made up large portions of Peru's and Ecuador's respective economies. As such, they were heavily regulated, and the Peruvian and Ecuadorian governments were extensively involved in them. Just as the Fifth Circuit was skeptical of the impact a business dispute could have on Germany's economic well-being, SJM's business simply cannot be said to play a significant role in the various European economies, let alone in the collective EU economy.
SJM points specifically to the determination in Sequihua that the medical monitoring relief requested supported a finding of federal court jurisdiction because granting that relief would require the court "to step into the shoes of the Ecuadorian Health Ministry." This Court finds the current situation readily distinguishable — largely because in this case no government has expressed concern that resolution of this case might interfere with a national health system. Compare Sequihua, 847 F. Supp. at 62-63, with In re Tobacco/Governmental Health Care Costs Litig., 100 F. Supp.2d 31 (D.D.C. 2000), State of Sao Paulo of the Federative Republic of Brazil v. American Tobacco Co., (E.D. La. 2000); State of Rio De Janeiro v. Philip Morris Cos., (E.D. Tex. 1999); Republic of Panama v. American Tobacco Co., 1999 WL 350030 (E.D. La. 1999) (all concluding that state law tort suits brought by foreign governments against various tobacco companies did not implicate the federal common law of foreign relations even though their claims potentially implicated their national health policy and economy).
Additionally, the Court observes that private health care providers exist throughout Europe, apparently without disturbing either national policies or health care systems.
No doubt there is a legitimate and persuasive argument that construction of foreign laws is best confined to the relatively more focused voice of the federal courts. Cf. Hyatt v. Stanton, 945 F. Supp. 675, 691 (S.D.N.Y. 1996) ("international law of foreign relations" might include "the act of state doctrine or the interpretation of foreign laws or regulations"); but cf. Dole, 251 F.3d at 802-803. Additionally, the Court recognizes that where plaintiffs are attempting to circumvent the restrictions of their home legal system by filing suit in the United States, allowing the action to continue might raise an issue impacting foreign relations. But cf. Potabe v. Robichaux, 1999 WL 455442 (E.D. La. Oct. 7, 1998) (action for damages stemming from accident in Papua New Guinea remanded despite Papua New Guinea law prohibiting such claims in foreign courts).
However, this Court is mindful that the federal courts are courts of limited jurisdiction, whose power depends on an explicit grant of jurisdiction. Kokkonen v. Guardian Life Ins. Co. of America, 511 U.S. 375, 377 (1994) (citations omitted); see also Dole, 251 F.3d at 804 ( quoting Romero v. International Terminal Operating Co., 358 U.S. 354, 379 (1959)). The federal common law of foreign relations will support jurisdiction only in a narrow range of cases. Ruhrgas, 115 F.3d at 320. Without at least some indication that the governments of Europe or the European Union are concerned about this case, or that its outcome will necessarily impact European policy, this Court finds any impact on the United States' relations with Europe or its individual nations too speculative and tenuous to confer federal jurisdiction over this case. The case must therefore be remanded. 28 U.S.C. § 1447(c). The Court is confident that the state court will give all due consideration to the interests of Europe and the European nations in its consideration of this case.
II. PLAINTIFFS' REQUEST FOR COSTS
As part of their motion to remand, plaintiffs' have requested the Court to award them their costs associated with the motion. Under 28 U.S.C. § 1447(c), "[a]n order remanding the case may require payment of just costs and any actual expenses, including attorney fees, incurred as a result of the removal." "[W]hile § 1447 empowers the Court to award attorneys' fees, the authority to do so is discretionary." Dakis v. Allstate Ins., Co., 2003 WL 118245, at *2 (D. Minn. Jan.8, 2003) "[T]he propriety of the defendant's removal should be a focus of a decision regarding whether to impose fees." Masepohl v. American Tobacco Co., 974 F. Supp. 1245, 1256 (D. Minn. 1997). As demonstrated by the above discussion, the question of when the federal common law of foreign relations will support federal question jurisdiction has not been conclusively decided. Thus, SJM did not act improperly in seeking removal. The Court accordingly concludes that each side should bear its own costs.
III. DEFENDANT'S MOTIONS TO DISMISS
In light of the foregoing decision, the Court finds that it does not have jurisdiction to consider the merits of SJM's motions to dismiss. The motions to dismiss are therefore denied as moot.
ORDER
Based on the foregoing, all the records, files, and proceedings herein, IT IS HEREBY ORDERED that:
1. Plaintiffs' Motion to Remand [Docket No. 2] is GRANTED with respect to the remand and DENIED with respect to award of costs;
2. Defendant's Motion to Dismiss on International Comity and Due Process Grounds [Docket No. 6] is DENIED AS MOOT;
3. Defendant's Forum Non Conveniens Motion to Dismiss [Docket No. 5] is DENIED AS MOOT; and
4. This matter is remanded to the State of Minnesota District Court, Second Judicial District, Ramsey County.