MEMORANDUM OPINION AND ORDER
Magnus Electronics, Inc. ("Magnus") originally sued Aerolineas
Argentinas ("Aerolineas") and Royal Bank of Canada ("Bank")
because of the nondelivery of Magnus' goods sold to Argentine
purchaser Alfredo DiLullo ("DiLullo"). When Magnus struck out
against Aerolineas (see this Court's three opinions reported
beginning at 611 F. Supp. 436), it shifted to an attack on the
Argentine Republic ("Argentina") via its Second Amended Complaint
(the "Complaint"). Argentina promptly moved for dismissal for
lack of jurisdiction (both over it, Fed.R.Civ.P. ("Rule")
12(b)(2), and over the subject matter, Rule 12(b)(1)). It is
right on both grounds, and this action is dismissed.
In October 1981 Magnus entered into a written contract to sell
goods to DiLullo (Complaint ¶ 3). Under the contract Magnus
was to cause the goods to be delivered to DiLullo in Buenos Aires
through Bank, which was to assure that the goods were delivered
only against payment of the purchase price (Complaint ¶ 4).
Magnus' freight forwarder caused the goods to be shipped to
Miami, where Aerolineas took possession under an airway bill
designating Bank as sole consignee (id.).
"In so acting to cause [Magnus'] goods to be fraudulently
converted for Argentine military purposes, the Country of
Argentina has acted in violation of international law"
(Complaint ¶ 9). Those acts of fraud and conversion are alleged
to be "without the scope of sovereign judicial immunity"
(Complaint ¶ 10).
Lack of Personal Jurisdiction
Argentina is a sovereign state. As with any sovereign, it is
amenable to suit only by strict and literal compliance with the
Foreign Sovereign Immunities Act of 1976 (the "Act"), 28 U.S.C. § 1330
and 1602-1611,*fn2 for "the comprehensive scheme
established by the [Act] is the exclusive means by which foreign
countries may be sued in American courts." Frolova v. Union
of Soviet Socialist Republics, 761 F.2d 370, 372 (7th Cir. 1985)
Section 1608(a)(3) mandates service on Argentina's Ministry
of Foreign Affairs "by any form of mail requiring a signed
receipt." In this case it appears Magnus arranged for delivery
to the Argentine Ministry by an Argentine notary, instead of
service by mail.
That noncompliance with the Act's literal requirements (though
it certainly did provide notice) deprives this Court of personal
jurisdiction.*fn3 But because such a procedural defect is
obviously curable, this opinion goes on to deal with the
noncurable subject matter deficiency in Magnus' claim.
Lack of Subject Matter Jurisdiction
Again the sovereign status of Argentina forces Magnus to invoke
the Act, without whose provisions Argentina is invulnerable to
suit here. Magnus seeks to call into play Section 1605(a)(2):
(a) A foreign state shall not be immune from the
jurisdiction of courts of the United States or of the
States in any case —
(2) in which the action is based upon a
commercial activity carried on in the United States
by the foreign state; or upon an act performed in
the United States in connection with a commercial
activity of the foreign state elsewhere; or upon an
act outside the territory of the United States in
connection with a commercial activity of the
foreign state elsewhere and that act causes a
direct effect in the United States.
First it is clear the action, predicated on an alleged
fraudulent seizure and conversion of Magnus' goods in Argentina,
is not within the statute's first clause, referring to
"commercial activity carried on in the United States by the
foreign state." Though Magnus, playing fast and loose with the
rules, goes outside the record to ascribe Aerolineas' United
States activities to Argentina, even it does not say that
provision applies. And of course the ...