including a state trading corporation, a mining enterprise, a transport organization such as a shipping line or airline, a steel company, a central bank, an export association, a governmental procurement agency or a department or ministry which acts and is suable in its own name." H. Rep. No. 94-1487, 94th Cong., 2d Sess. 15-16 (1976). However, there is no suggestion that a foreign state's system of property ownership, without more, should be determinative on the question whether an entity operating within the state is a state agency or instrumentality under the Act.
Two more precise indices of an entity's status as state agency or instrumentality focus on the degree to which the entity discharges a governmental function, and the extent of state control over the entity's operations. Defendant suggests that the generation and distribution of electricity in Yugoslavia are committed to independent work organizations such as NEK. The work organization in Yugoslavia appears to serve as the principal vehicle for enterprise and production in that nation, much as the private corporation fulfills comparable functions in the United States. That NEK and its co-founders all are work organizations that generate and distribute power is a persuasive suggestion that power generation and distribution is a nongovernmental function in Yugoslavia. Plaintiff's argument that NEK is subject to state control rests on the extent of government regulation of work organizations in such areas as control of assets, dissolution and liquidation. Opposition at 7-8. Defendant, on the other hand, observes that the Yugoslav government does not subsidize NEK, holds no seats on the NEK board, and otherwise takes no direct hand in daily management of NEK operations. These factors are crucial to application of the so-called "control test." In deciding the analogous question whether a community action agency funded federally under the Economic Opportunity Act of 1964, 42 U.S.C. §§ 2781 et seq., is an agency or instrumentality of the Federal Government for purposes of the Federal Tort Claims Act, 28 U.S.C. § 1346 (1970), as amended, Pub. L. No. 94-455, tit. XII, § 1204(c)(1), tit. XIII, § 1306(b)(7), 90 Stat. 1697, 1719 (1976), the Supreme Court noted that a critical factor is the "power of the Federal Government 'to control the detailed physical performance of the contractor.'" United States v. Orleans, 425 U.S. 807, 814, 48 L. Ed. 2d 390, 96 S. Ct. 1971 (1976), quoting Logue v. United States, 412 U.S. 521, 528, 37 L. Ed. 2d 121, 93 S. Ct. 2215 (1973). The Court pointed out also that the degree to which an entity is subject to government regulation aimed at assuring compliance with government goals is not determinative on the question whether the entity is an agency or instrumentality of the state. Id. 425 U.S. at 815, 816. Without depreciating the extent to which the Yugoslav state exercises ultimate control over the policies and operations of work organizations like NEK, we are persuaded by defendant's showing that NEK's daily operations are virtually free of direct government control.
The only basis, therefore, for concluding that NEK is an "organ" of the Yugoslav government, or is at least 50 per cent owned by the government, is that the state "owns" all forms of property in Yugoslavia. Having determined that this premise, however valid it may be in political theory, is not present to confer jurisdiction under the Foreign Sovereign Immunities Act, we lack subject matter jurisdiction under that Act.
Having decided that we lack subject matter jurisdiction for the reasons above stated, it is not necessary to reach the question whether in personam jurisdiction was ever acquired. Similarly, the absence of subject matter jurisdiction obviates consideration of plaintiff's motion for leave to amend its complaint to include the Metalka agency as a defendant.
Accordingly, it appearing that this Court lacks subject matter jurisdiction over this action under 28 U.S.C. §§ 1330, 1332, it is by the Court this 6th day of December, 1977,
ORDERED, that defendant's motion to dismiss be, and hereby is, granted, and it is further
ORDERED, that plaintiff's motion for leave to amend its complaint be, and hereby is, denied as moot.
JOHN H. PRATT, United States District Judge