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June 12, 2000


The opinion of the court was delivered by: Paul L. Friedman, District Judge.


This matter is before the Court on the motions of the Republic of Bolivia and the Republic of Venezuela to remand their lawsuits to the state courts in which they were originally brought and on the motion of the removing defendants for leave to take limited discovery. The removing defendants asserted two jurisdictional bases for the removal of these cases to federal court: (1) that the cases arise under federal law because they implicate the "federal common law of foreign relations," and (2) that the foreign plaintiffs are diverse from the named defendants. Bolivia and Venezuela moved to remand the cases to state court on the grounds that these cases do not implicate the federal common law of foreign relations, the defendants are not diverse from plaintiffs, and removal was procedurally flawed because the defendants did not unanimously consent to removal.

Upon consideration of the motions to remand, the oppositions and replies, and the oral arguments of counsel, the Court will remand Venezuela's lawsuit to state court because there is no federal jurisdiction. Because the Court finds that there is diversity jurisdiction in Bolivia's case, the Court will grant the motion for discovery in order to allow further elucidation of the facts surrounding the lack of unanimous consent to its removal.


Bolivia's action was removed to the United States District Court for the Southern District of Texas on February 19, 1999. In their notice of removal, the removing defendants asserted that removal was proper because the federal courts had both diversity jurisdiction and federal question jurisdiction, the latter under the federal common law of foreign relations. Although those defendants affiliated with the Liggett Group Inc. ("the Liggett defendants") did not consent to the removal, the removing defendants asserted that the usual procedural requirement of unanimity among defendants should be ignored because the Liggett defendants were cooperating with the plaintiffs and therefore should be realigned as plaintiffs. Before Bolivia could file a motion to remand the case to state court, Judge Samuel B. Kent of the United States District Court for the Southern District of Texas transferred the case to this Court sua sponte pursuant to 28 U.S.C. § 1404(a). See Republic of Bolivia v. Philip Morris Companies, Inc., 39 F. Supp.2d 1008 (S.D.Tex. 1999).

Venezuela's action was removed from state court to the United States District Court for the Southern District of Florida on February 26, 1999. The removing defendants asserted nearly identical grounds for removal as had the removing defendants in Bolivia's case. Venezuela's motion for remand was fully briefed in the Southern District of Florida, but had not been ruled upon by the time the Judicial Panel on Multidistrict Litigation ("MDL Panel") transferred all of the lawsuits brought against the tobacco industry by foreign sovereigns, including Venezuela's lawsuit, to this Court on June 11, 1999.


Bolivia and Venezuela move to remand to state court, asserting both that this Court has no jurisdiction and that the defendants did not unanimously consent to the notices of removal. The removing defendants have moved for limited discovery regarding the latter argument in order to provide the Court with a complete record regarding the Liggett defendants' alleged cooperation with plaintiffs. Because the Court need not reach the issue of discovery if no basis exists for federal jurisdiction, it will analyze the jurisdictional arguments first.

A. The Federal Common Law of Foreign Relations

Once a case is removed to federal court under 28 U.S.C. § 1446, it must be remanded to state court "[i]f at any time before final judgment it appears that the district court lacks subject matter jurisdiction." 28 U.S.C. § 1447(c).*fn1 "[T]he presence or absence of federal-question jurisdiction is governed by the `well-pleaded complaint rule,' which provides that federal jurisdiction exists only when a federal question is presented on the face of plaintiff's properly pleaded complaint." Rivet v. Regions Bank of Louisiana, 522 U.S. 470, 475, 118 S.Ct. 921, 139 L.Ed.2d 912 (1998) (quoting Caterpillar Inc. v. Williams, 482 U.S. 386, 392, 107 S.Ct. 2425, 96 L.Ed.2d 318 (1987)). "The rule makes the plaintiff the master of the claim; he or she may avoid federal jurisdiction by exclusive reliance on state law." Caterpillar Inc. v. Williams, 482 U.S. at 392, 107 S.Ct. 2425. For that reason, the party moving to remand does not have the burden; the burden is on the removing defendants to show that federal jurisdiction exists and that the motion for remand should be denied. See 14C CHARLES ALAN WRIGHT, ARTHUR R. MILLER AND EDWARD H. COOPER, FEDERAL PRACTICE AND PROCEDURE § 3739 at 424 (1998) ("It is . . . well-settled under the case law that the burden is on the party seeking to preserve the district court's removal jurisdiction, typically the defendant, not the party moving for remand to state court, typically the plaintiff, to show that the requirements for removal have been met").

The complaints filed by Venezuela and Bolivia assert no claims under federal law. They contain only state statutory and common law claims. The removing defendants nevertheless argue that Bolivia and Venezuela's complaints present a federal question on their face under the federal common law of foreign relations because the lawsuits implicate the "vital economic and sovereign interests" of Bolivia and Venezuela, because the damages requested are a large percentage of each country's Gross Domestic Product, and because many of Bolivia and Venezuela's claims would require an inquiry into their governmental decision-making. See Torres v. Southern Peru Copper Corp., 113 F.3d 540, 543 n. 8 (5th Cir. 1997). Defendants also argue that the implications for the foreign relations of the United States are substantial in these cases because a failure of this country to speak with one voice in its relations with other countries would be detrimental to its interests. See, e.g., Bolivia Defendants' Opposition at 8-9; Venezuela Defendants' Opposition at 9-10.

The federal common law of foreign relations finds its roots in the Supreme Court's decision in Banco Nacional de Cuba v. Sabbatino. 376 U.S. 398, 84 S.Ct. 923, 11 L.Ed.2d 804 (1964). There was no such concept recognized by the courts before 1964. In Sabbatino, the Court held that litigation requiring an inquiry by the courts of this country into the propriety of acts of foreign states was "uniquely federal in nature," id. at 424, 84 S.Ct. 923, and that the scope of the "act of state doctrine" — whether and under what circumstances the courts of one country should abstain from sitting in judgment on the acts of another sovereign done within its own territory — "must be determined according to federal law." Id. at 427, 84 S.Ct. 923. "[A]n issue concerned with a basic choice regarding the competence and function of the Judiciary and the National Executive in ordering our relationships with other members of the international community must be treated exclusively as an aspect of federal law." Id. at 425, 84 S.Ct. 923. See also Zschernig v. Miller, 389 U.S. 429, 88 S.Ct. 664, 19 L.Ed.2d 683 (1967); id. at 443, 88 S.Ct. 664 (Stewart, J., concurring) ("the conduct of our foreign affairs is entrusted under the Constitution to the National Government, not to the probate courts of the several States").

The Second Circuit subsequently held that the exercise of federal jurisdiction was proper in a lawsuit arising out of the ownership of property in the United States by a foreign head of state. See Republic of the Philippines v. Marcos, 806 F.2d 344 (2nd Cir. 1986). The focus of the case before the Second Circuit was limited to whether the courts in adjudicating ownership interests in property located within the borders of the United States should respect the assertion of a claim to such property by a foreign sovereign's newly installed government when the property was also claimed by the foreign sovereign's former head of state. See id. at 347; see also Republic of Iraq v. First Nat'l City Bank, 353 F.2d 47, 49-50 (2nd Cir. 1965). Such inquiries, the Second Circuit suggested, are not ...

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