Compania Mexicana De Aviacion, S.A., a Corporation Doing Business as Mexicana Airlines v. United States District Court for the Central District of California, and Adela Espinosa De Penasco, Carlos Penasco Garcia, Patricia Guadarrama Ortiz, Rodolfo Guadarrama Ortiz, Raul Guadaramma Ortiz, Ana Maria Esperanza Cuellar Marovilla, Federico Perez Munoz Lido, Amelia Neyra Perez, Pablo Eduardo Zuniga Escobar, Maria De Los Angeles Escobar Rodriguez, Rafael Mujica Bustos, Maria Luisa Susana Alarcon Mujica, Miguelangel Avila Rosales, Hector Avila Rosales, Rene Avila Rosales, Salvador Hernandez Amezcua, Maria Del Socorro Garcia Vizcaino, Individually and as Guardian Ad Litem of Minors, Fernando Contreras Garcia and Liliana Contreras Garcia, Maria Teresa Alvarado Melgoza, Juan Rodriguez Guillen, Martha Rodriguez Guillen, Celia Rodriguez Guillen, Sylvia Rosaura Rodriguez Guillen, Rafael Palacios Ibarra, Enrique Rodriguez Guillen, Individually and as Guardian Ad Litem of Minors, Cristobal Rodriguez Guillen and Pedro Rodrigu

Citations: 859 F.2d 1354; 1988 U.S. App. LEXIS 14089Docket: 88-7015

Court: Court of Appeals for the Ninth Circuit; October 17, 1988; Federal Appellate Court

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Compania Mexicana de Aviacion, S.A. (Mexicana Airlines) seeks to appeal a denial from the United States District Court for the Central District of California regarding its motion to dismiss an action brought on behalf of 69 Mexican decedents who died in a crash of Mexicana flight 940 near Michoacan, Mexico, shortly after taking off from Mexico City on March 31, 1986. The plaintiffs had purchased tickets in Mexico for domestic travel. Mexicana's dismissal motion was based on claims of foreign sovereign immunity and forum non conveniens, but the District Court denied this motion. Mexicana subsequently petitioned the Ninth Circuit Court for a writ of mandamus. The court concluded that the denial of a motion to dismiss based on foreign sovereign immunity constitutes a collateral order that is immediately appealable, referencing precedents such as Segni v. Commercial Office of Spain and Cohen v. Beneficial Industrial Loan Corp. The court also determined there are compelling reasons to treat the petition as a notice of appeal.

Mexicana is recognized as a foreign state under the Foreign Sovereign Immunities Act (FSIA), leading to a lack of jurisdiction for the District Court due to the inapplicability of statutory exceptions to foreign sovereign immunity. The court reversed the denial of sovereign immunity and remanded for dismissal of the action. Following a crash involving Mexicana flight 940, multiple lawsuits were filed in the U.S., including one in California against Mexicana and other parties. After Mexicana removed the case to federal court, it asserted lack of jurisdiction and moved to dismiss. The District Court allowed a voluntary dismissal for other defendants but denied Mexicana's motion to dismiss. Mexicana's subsequent petition for a writ of mandamus was deemed inappropriate as an extraordinary remedy when a direct appeal was available. However, it was reasonable for Mexicana to believe that the denial of its sovereign immunity claim was only reviewable through mandamus, given the lack of precedent for direct appeals in such cases and the expired timeframe for an interlocutory appeal. The court treated the mandamus petition as a notice of appeal, enabling further review.

Jurisdiction over appeals from final judgments of the district court is established under 28 U.S.C. § 1291 (1982). However, certain interlocutory orders can be appealed under the 'collateral order' doctrine as outlined in Cohen v. Beneficial Industrial Loan Corp., which allows immediate appeals for orders that conclusively determine a disputed question, address an important issue separate from the case's merits, and are not reviewable after a final judgment. A denial of a motion to dismiss based on a public official's claim of absolute or qualified immunity is considered an appealable interlocutory order if it involves a legal issue, as per Mitchell v. Forsyth and Nixon v. Fitzgerald. Such immunity is crucial because it can be lost if a case proceeds to trial mistakenly.

The Seventh Circuit's ruling in Segni v. Commercial Office of Spain confirmed that denials of immunity under the Foreign Sovereign Immunities Act (FSIA) are similarly subject to interlocutory review. This is based on the principle that foreign governments should not incur costs from prolonged litigation without a prior determination of their immunity. The court concurs with this view, emphasizing that the FSIA protects foreign states from U.S. jurisdiction unless specific exceptions apply. 

Mexicana Airlines, a wholly owned entity of the Mexican government, qualifies as a foreign state under the FSIA and is immune from lawsuits unless it either waives that immunity or if the claims fall under specific exceptions related to commercial activities or treaties existing before the FSIA's enactment.

Plaintiffs contend that Mexicana has waived its sovereign immunity due to a Foreign Air Carrier permit issued by the U.S. Department of Transportation, which purportedly allows lawsuits in U.S. courts for claims arising from operations under this permit. However, the waiver's intent limits jurisdiction to cases with substantial U.S. contact. In this case, all tickets were purchased in Mexico for domestic flights within Mexico, indicating no substantial contact with the U.S. Furthermore, the operations in question did not occur under the U.S. permit. 

The Warsaw Convention also supports this conclusion, as it defines international transport based on the contract between parties. The tickets involved were for domestic travel, and jurisdiction is limited to the carrier's domicile or principal place of business, which is Mexico. The fact that the aircraft was scheduled to arrive in Los Angeles does not establish jurisdiction.

Regarding commercial activity, while Mexicana engages in business within the U.S., mere participation in commercial activities does not automatically subject it to U.S. jurisdiction. The Foreign Sovereign Immunities Act (FSIA) mandates a significant nexus between the cause of action and the foreign state's commercial activities in the U.S. The only alleged nexus is that the aircraft had been serviced in Chicago before the crash and was headed to Los Angeles. This tenuous connection does not meet the FSIA requirements or align with the principles of the Warsaw Convention, as it could lead to an unreasonable extension of U.S. jurisdiction over foreign government-owned carriers.

Jurisdiction is lacking for claims based on actions in the United States related to foreign commercial activities, as Mexicana did not conduct any significant act within the U.S. relevant to the case. The only U.S. act noted was Delta Airlines servicing the aircraft in Chicago before the accident, which does not establish a jurisdictional basis. The Foreign Sovereign Immunities Act (FSIA) provides an exception for commercial activities outside the U.S. that directly affect the country; however, the plaintiffs' argument regarding FAA orders following the Mexicana crash does not qualify as a direct effect, which is limited to immediate consequences like loss of life or aircraft destruction, not indirect outcomes. Consequently, the crash itself does not fall under the Warsaw Convention's jurisdictional framework. The District Court's previous denial of Mexicana's motion to dismiss is reversed, and the case is remanded for dismissal due to lack of jurisdiction under the FSIA. The panel also notes that the case is submitted without oral argument and does not address the issue of forum non conveniens. Additionally, two related cases involving Mexicana and Boeing are referenced, with the dismissal of Boeing being treated as an adjudication on the merits due to prior voluntary dismissal by the plaintiffs. A Department of Transportation amendment clarifies the waiver of sovereign immunity for international air transportation operations involving U.S. points but is not retroactive.