and adequate notice are embodied in [ 28 U.S.C. § 1330(b)]").
This Court initially notes neither the cases nor the legislative history relied on by Iran are binding on this Court.
Two of the cases cited by Iran, Carey and Gonzalez, are neither binding nor persuasive. Moreover, the third case that Iran relies upon, Gould, actually supports this Court's decision.
The holding in Carey, and the dictum in Gonzalez, are grounded in the idea that "minimum contacts" are included as part of "direct effects." This Circuit has rejected that approach. Gilson v. Republic of Ireland, 221 U.S. App. D.C. 73, 682 F.2d 1022, 1028 (D.C. Cir. 1982). It is clear from the direct effects analysis in Foremost-McKesson, 905 F.2d at 450-51, that direct effects are different from, and do not include, minimum contacts. The Court of Appeals has ruled that the direct effects alleged in this case, if proved, are sufficient to subject Iran to the subject matter jurisdiction of this Court. Id.
Additionally, both Carey and Gonzalez were decided prior to Texas Trading and Milling Corp. v. Federal Republic of Nigeria, 647 F.2d 300, 313 (2d Cir. 1981), cert. denied, 454 U.S. 1148, 71 L. Ed. 2d 301, 102 S. Ct. 1012 (1982). In Texas Trading, the Second Circuit attempted to determine, once and for all, the correct way to analyze jurisdiction under the FSIA. As Chief Judge Kaufman, who also sat on the panel in Carey, put it: "these cases present an opportunity to untie the FSIA's Gordian knot, and to vindicate the Congressional purposes behind the [FSIA]." Texas Trading, 647 F.2d at 307. Chief Judge Kaufman, speaking for the Second Circuit, held in Texas Trading that minimum contacts analysis is not part of direct effects analysis. Id. at 308. Indeed, Texas Trading held that minimum contacts analysis was part of constitutional due process analysis. Id. at 313-15. Constitutional due process analysis is only employed after a finding of subject matter jurisdiction and statutory personal jurisdiction. Id. at 308. In light of Texas Trading, both the holding in the short per curiam opinion in Carey and the dictum in Gonzalez, which cites Carey, are less than persuasive.
Furthermore, contrary to Iran's assertions, the Gould decision supports this Court's position. In Gould, the district court had denied the sovereign defendants' motion to dismiss for lack of personal jurisdiction on the ground that plaintiff showed sufficient minimum contacts to assert personal jurisdiction. Gould, 853 F.2d at 453-54. The Sixth Circuit held that this constituted error and stated that "upon remand, then, personal jurisdiction will depend upon the district court finding subject matter jurisdiction under 28 U.S.C. § 1330(a), and proper service under 28 U.S.C. § 1608." Id. at 454. This Court's decision, following the rule of this Circuit, also conditions a finding of statutory personal jurisdiction upon a finding of subject matter jurisdiction and proper service.
The United States Court of Appeals for the District of Columbia Circuit explained the process for determining jurisdiction under the FSIA in this Circuit in Gilson v. Republic of Ireland, 221 U.S. App. D.C. 73, 682 F.2d 1022 (D.C. Cir. 1982).
First, the court must determine whether subject matter jurisdiction exists. Gilson, 682 F.2d at 1026. "Subsequent to the determination of subject matter jurisdiction is the issue of personal jurisdiction." Gilson, 682 F.2d at 1028 (quoting Texas Trading, 647 F.2d at 313). "Statutorily, personal jurisdiction exists so long as subject matter jurisdiction exists and service has been properly made under section 1608 of the FSIA." Gilson, 682 F.2d at 1028; see also 28 U.S.C. § 1330(b) ("personal jurisdiction over a foreign state shall exist as to every claim for relief over which the district courts have [subject matter] jurisdiction under subsection (a) where service has been made under section 1608 of this chapter."); Foremost-McKesson, 905 F.2d at 442 ("personal jurisdiction under FSIA exists so long as subject matter jurisdiction exists and service has been properly made pursuant to 28 U.S.C. § 1608"). The statute, however,
cannot grant personal jurisdiction where the Constitution forbids it, and the Supreme Court has held repeatedly that certain 'minimum contacts' must exist between the person and the jurisdiction to be consistent with the Due Process Clause of the Fifth Amendment.
Gilson, 682 F.2d at 1028.
Following its determination of subject matter jurisdiction and statutory personal jurisdiction, the court in Gilson proceeded to follow a traditional minimum contacts analysis to determine whether constitutional personal jurisdiction existed. Id. at 1028-29; see also Foremost-McKesson, 905 F.2d at 453 (constitutional personal jurisdiction is "separate ground" from statutory personal jurisdiction).
In this case, while discussing subject matter jurisdiction, the Court of Appeals held that, for purposes of a motion to dismiss, Iran's actions "were sufficiently commercial in nature," and that the "alleged effects [of the actions] were sufficiently direct" to permit subject matter jurisdiction. Foremost-McKesson, 905 F.2d at 450-51. Thus, for purposes of this analysis, subject matter jurisdiction is properly exercised. Additionally, service was proper under section 1608. Therefore, statutory personal jurisdiction is properly exerted by this court. The Court of Appeals held that Iran waived its right to challenge constitutional personal jurisdiction. Foremost-McKesson, 905 F.2d at 453 ("Iran may not now raise the separate constitutional ground for a claim of lack of in personam jurisdiction.") The three pronged analysis of Gilson is, therefore, satisfied in this case. Iran may challenge subject matter jurisdiction. Iran may also dispute statutory personal jurisdiction if subject matter jurisdiction is lacking. As Iran is barred from obtaining discovery that is not "reasonably calculated to lead to the discovery of admissable evidence," Fed. R. Civ. P. 26(a), discovery regarding minimum contacts and personal jurisdiction will not be permitted.
In conclusion, this court will grant plaintiffs' motion for leave to amend the complaint because (a) the delay does not warrant prohibiting the amendment; (b) Iran will suffer no prejudice because of the amendment; and (c) the tortious interference claim is not futile as a matter of law. Also, this court will deny defendants' motion for leave to file discovery concerning personal jurisdiction because the Court of Appeals has ruled that Iran has waived its right to challenge personal jurisdiction on constitutional grounds and the discovery request is therefore not reasonably calculated to lead to the discovery of admissible evidence. An appropriate order accompanies this memorandum opinion.
ORDER - March 7, 1991, Filed
This matter comes before the Court on Plaintiffs' Motion for Leave to Amend the Complaint and Defendants' Motion for Leave to File Discovery Concerning Personal Jurisdiction. Upon consideration of plaintiffs' motion, defendants' opposition thereto, plaintiffs' reply, defendants' motion, plaintiffs' reply thereto, defendants' reply, argument in open court, the entire record herein, and for the reasons stated in accompanying memorandum opinion, it is by the Court this 7th day of March 1991
ORDERED that plaintiffs' Motion for Leave to Amend the Complaint is GRANTED; and it is further
ORDERED that defendants' Motion for Leave to File Discovery Concerning Personal Jurisdiction is DENIED.