Removal, Non-Sovereign Defendants, and Jury Trials

The FSIA’s removal provision states that “[a]ny civil action brought in a State court against a foreign state . . . may be removed by the foreign state to the district court of the United States for the district and division embracing the place where such action is pending.”  28 U.S.C. § 1441(d).  In Guan v. Bi, 13-CV-05537-WHO, 2014 WL 953757 (N.D. Cal. Mar. 6, 2014), District Judge William H. Orrick held that a non-sovereign defendant was not entitled to remove an action to federal court under the FSIA. 

The district court in Guan noted that “the FSIA does not require that every action against a foreign state be in federal court,” and that the FSIA simply gave foreign sovereigns the right to decide whether or not to remove the case.  Guan, 2014 WL 953757, at *7.  The court agreed with the plaintiffs that “section 1441(d) is the exclusive basis for removing actions against foreign states,” and held that section 1441(a) did not enable a non-sovereign defendant to remove a case against a foreign sovereign.      Id. at *9; see also 28 U.S.C. § 1441(a) (“Except as otherwise expressly provided by Act of Congress, any civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant or the defendants, to the district court”).  The district judge concluded that because the individual defendant was “not a foreign state,” section 1441(d) was likewise “unavailable to him.”  Guan, 2014 WL 953757, at *10.  In the absence of a notice of removal filed by the foreign state defendant, “the FSIA does not allow [the non-sovereign defendant] to remove [the] case.”  Id.

An issue not addressed in Guan but one that should be considered and evaluated by an FSIA practitioner contemplating not seeking removal of a case against a foreign sovereign to federal court – is whether there would be a jury trial in the state court proceeding.  Section 1330(a) provides that “district courts shall have original jurisdiction without regard to amount in controversy of any nonjury civil action against a foreign state,” but the statute is silent with respect to jury trials in state court.  28 U.S.C. § 1330(a) (emphasis added).  Similarly, section 1441(d) states that “[u]pon removal the action shall be tried by the court without jury.”  28 U.S.C. § 1441(d).  Section 1441(d) says nothing with regard to a jury trial in state court proceedings.  Finally, 28 U.S.C. 1602 et seq. – the portion of the FSIA that would apply in any state court proceeding – nowhere prohibits a trial by jury.  As a result, at least on the face of the FSIA’s statutory language, nothing bars a jury trial in state court.  See also, e.g., Martinelli v. Djakarta Lloyd P. N., 106 Misc. 2d 429, 430, 431 N.Y.S.2d 748 (Civ. Ct. 1980).  If that is correct, it should provide a strong reason for foreign sovereigns to seek removal of all cases filed in state court.