A decision by the District Court in USAA Casualty Ins. Co, as subrogee of Robert Adelman v. Permanent Mission of the Republic of Namibia, et al., 10 Civ. 4262 (S.D.N.Y. 17 Nov. 2010)(LTS), addresses several issues that arise in international litigation. The case arose out of the collapse of a shared wall between the plaintiff’s property and the Namibia Mission. The action commenced in state court and was removed to federal court. The District Court held:
- Namibia tried to avoid service of process by claiming, correctly, that as a foreign state it must be served in accordance with 28 U.S.C. § 1608. See Fed. R. Civ. P. 4(j)(1). The rules for such service are similar but not identical to the procedure for serving an individual abroad under Fed. R. Civ. P. 4(f)(2)(C)(ii). The key difference is that service on a non-U.S. state is complete only when there is a “signed and returned postal receipt”. 28 U.S.C. § 1608(c). Holding that § 1608 “mandates strict adherence to it its terms, not merely substantial compliance”, the District Court was bound to find service not complete. However, the Court was not going to let Namibia forever avoid suit by the mere expedient of not signing the service of suit papers. Instead, the District Court gave the plaintiff additional time to serve under § 1608(a)(4) (substitute service by sending copies of the summons and complaint, etc. to the Secretary of State).
- Namibia also raised a sovereign immunity defense. Rejecting it, the District Court held that, although a country’s permanent mission to the United Nations is considered a “foreign state” for purposes of the Foreign Sovereign Immunities Act, § 1605(a)(5), the tort exception to sovereign immunity was applicable. Section 1605(a)(5) provides that there is no immunity with respect to any action “in which money damages are sought against a foreign state for . . . damages to . . . property occurring in the United States and caused by the tortious action or omission of that foreign state”.
- Namibia contended that the claims asserted were nonetheless barred by an carve out or exemption to the tort exception – i.e., where the claim was based “upon the exercise [of] or . . . failure to exercise . . . a discretionary function”. The District Court rejected the argument that setting up the Mission in the first place was the discretionary act and found the alleged negligence and other tortious conduct concerning the falling wall was not discretionary. The District Court also found that the “discretionary function” exception of the FSIA should be “construed in light of authorities interpreting the discretionary function exception provision of the Federal Tort Claims Act”.