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Karen L. Suter v. Munich Reinsurance Company

Date: Aug. 7, 2000


*KAREN L. SUTER,
the Commissioner of Banking and Insurance of the
State of New Jersey, as Liquidator of Integrity
Insurance Company

v.

MUNICH REINSURANCE COMPANY,
Appellant

*(Substituted pursuant to F.R.A.P. 43(c))

On Appeal From the United States District Court
For the District of New Jersey
(D.C. Civil Action No. 99-cv-00757)
District Judge: Honorable Joseph A. Greenaway, Jr.

Argued November 18, 1999

BEFORE: ALITO, BARRY and STAPLETON, Circuit Ju dges

(Opinion Filed: August 7, 2000)

ALITO, Circuit Judge, dissenting:

I respectfully dissent because the unique considerations governing removal by a Foreign Sovereign under the Foreign Sovereign Immunities Act (FSIA) do not apply to removal by a corporation under the Convention Act. In Foster v. Chesapeake Ins. Co., 933 F.2d 1207 (3d Cir. 1987), we held that forum selection clauses must be interpreted using normal principles of contractual interpretation and that they must therefore be interpreted as waivers of the right to remove, except in cases where a sovereign wishes to remove pursuant to the provisions of the FSIA. See id. at 1217-19. In In Re Texas Eastern Transmission Corp., 15 F.3d. 1230 (3d Cir. 1993), the Court concluded that the "unique policy considerations" that are involved in sovereign litigation and the "peculiar" provisions of the FSIA implied a congressional intent that courts depart from their normal practice and construe forum selection clauses in favor of a sovereign's right to remove pursuant to the Act. Thus, we held that forum selection clauses do not waive a sovereign's right to remove pursuant to 28 U.S.C. S 1441(d) (the FSIA's removal provisions) unless there is "clear and unequivocal" language to that effect. See id. at 1243. The majority argues today that the policy considerations of the FSIA are not so unique after all, and its removal provisions not "peculiarly" broad. Indeed, the majority holds that the purposes and the structure of the Convention Act are so similar to the purposes and structure of the FSIA that they implicitly command us to construe forum selection clauses in favor of a defendant's right to remove pursuant to the Convention Act as well. I cannot agree.

Foster laid down a general rule governing contractual waivers of removal rights. It held that parties could waive removal rights and that such waivers need not be clear and unequivocal. See id. at 1218 n.15. We explained at length why the doctrine of "clear and unequivocal waiver"- developed by courts in cases involving non-contractual waivers cannot sensibly be imported into cases involving contractual waivers. See id. In so doing, we specifically criticized courts that had failed to recognize that different considerations applied in cases of contractual and non- contractual waiver. See id.1 Furthermore, we concluded that it would be unfair to bring the "clear and unequivocal" standard of non-contractual waiver into cases involving contractual waivers. See id.2

Two years later, in Texas Eastern, the Court held that certain qualities peculiar to the FSIA required waivers of a sovereign's removal rights under the FSIA to be clear and unequivocal. The Court inferred this from two qualities that were peculiar to the FSIA. First, the FSIA implicated "unique policy considerations related to international relations." Texas Eastern, 15 F.3d at 1241. Second, the FSIA granted removal rights so peculiarly broad that they implied congressional intent "to give the defendant foreign state the unqualified right to remove any civil action brought against it in state court." Id. at 1243. In order to serve these ends, the Court held that it would have to construe forum selection clauses in favor of a sovereign's right to remove. Thus, the Court cited with approval the Ninth Circuit's holding that "generally applicable rules of removal do not apply to the uniquely expansive S 1441(d)." Id. (quoting Teledyne, Inc. v. Kone Corp. , 892 F.2d 1404, 1409 (9th Cir. 1989)).

The majority today finds that the Convention Act is similar in certain material respects to the FSIA, and that we therefore should not find waiver of the right to remove pursuant to the Convention Act unless there is clear and unequivocal language explicitly waiving the right to remove. This is not so. Although the Convention Act contains provisions that are similar in some ways to the removal provisions of the FSIA, it does not share those precise provisions that imply congressional intent to require clear and unequivocal waivers of the right to remove under the FSIA. Thus, despite superficial similarities, a corporation does not have an "unqualified" right to remove pursuant to the Convention Act analogous to a sovereign's right to remove pursuant to the FSIA.

First, the Convention Act does not implicate the same foreign policy considerations as the FSIA. The majority asserts that "there are foreign policy considerations underlying the Convention [Act] as well." See Maj. Op. at 17. This is true, but it is beside the point. Texas Eastern makes it absolutely clear that we carve out an exception to our general rules of waiver not simply because "there are foreign policy considerations underlying" the FSIA, but because, as the opinion stated twice, there are"unique policy considerations touching on the international relations of the United States." Id. at 1239, 1243."Unique" means, of course, "being the only one; known to exist in no other copy" or "being without a like or equal: single in kind or excellence." Webster's Third New International Dictionary 2500 (1971). The unique policy concerns that are implicated by the FSIA are the concerns that arise when the courts of one sovereign are asserting jurisdiction over another sovereign. In holding that the FSIA implicates "unique" concerns requiring the adoption of special removal rules, Foster and Texas Eastern both cite the Sixth Circuit's analysis in In re Delta Re Insurance Co., 900 F.2d 890 (6th Cir. 1990), which focuses on the unique concerns that arise because the FSIA strips sovereigns of their long-standing immunity from suit in the United States. See Texas Eastern, 15 F.3d at 1243 (same); Foster 933 F.2d at 1217 n.15 (citing Delta 900 F.2d at 894) In Foster we noted:

obviously viewing the element of foreign sovereignty of paramount importance, the court [in Delta ] concluded:

"In order to provide maximum guidance for future cases involving foreign states, we hold that any claimed waiver of the right of removal stemming from contractual language must be explicit." Foster 933 F.2d at 1217-18 n.15 (emphasis added)(quoting 900 F.2d at 894).

The Convention Act, which does not regulate the interaction of states, does not involve the "unique policy considerations" that underlie our opinion in Texas Eastern. Furthermore, the text of the Convention Act does not grant broad rights of removal that imply congressional intent "to give the defendant foreign state the unqualified right of removal." Texas Eastern, 15 F.3d at 1243. As the majority opinion freely admits, Texas Eastern identified three specific provisions that together implied a grant of an unqualified right of removal. First, the FSIA provides that there will be no amount in controversy requirement for removal under the FSIA. See 28 U.S.C. S 1441 (d); second, it provides that a sovereign can remove even after trial has commenced, see id.; and third, it automatically guarantees a bench trial. See id. As the majority also concedes, a party covered by the Convention Act is not entitled to either of these last two rights. Such a party may not remove after trial has begun (a severe "qualification" of the right to remove) and is not guaranteed a bench trial. See 9 U.S.C.S 205. Thus, even if the provisions of the Convention Act are broader than the provisions of 28 U.S.C. S 1441 (a)-(b), they are not as broad as the provisions of the FSIA, and they cannot be said to grant an "unqualified right of removal." Texas Eastern, 15 F.3d at 1243.

The majority tries to paper over the crucial differences between the FSIA and the Convention Act and downplay their significance. See Maj. Op. at 14-15. It points out that one has more time to remove under the Convention Act than one would under S 1441(a)-(b). This is beside the point. In the FSIA context we depart from the generally applicable removal rules, not because the removal rights are generous, but because they are "unqualified." Since the right to remove pursuant to the Convention Act is not "unqualified," we should not depart here from the generally applicable rule.

The FSIA exception to general rules of removal cannot be extended by analogy to include removal under the Convention Act. Despite its protestations to the contrary in Section 3G, the majority has indeed based its decision on its "own essentially legislative judgment as to the relative importance of the foreign relations implications of sovereign immunity and the enforcement of arbitration agreements with foreign commercial enterprises." Maj. Op. at 18.

In addition, the rule that the majority reaches is actually quite unfair. Munich Re is a massive corporation with excellent counsel who engaged in careful negotiations with another corporation. As part of its deal, it willingly offered to litigate in any forum selected by its partner. Such a promise seems on its face to be a promise not to remove a case, and our cases make clear that it will be interpreted as such-except in cases involving removal under the FSIA. Today the majority allows this corporation to walk away from its freely entered obligation. I respectfully dissent.


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