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Bank of Hawaii v. Balos
Published online by Cambridge University Press: 27 February 2017
Extract
Plaintiff bank, incorporated under the laws of the state of Hawaii, brought an action in the United States District Court for the District of Hawaii against defendants, residents and citizens of the Republic of the Marshall Islands (RMI). One of the defendants, Imata Kabua, moved to dismiss the complaint for lack of subject matter jurisdiction on the ground that diversity of citizenship did not exist because defendants were not citizens of a “foreign state” within the meaning of 28 U.S.C. §1332(a)(2). The district court (per King, J.) denied the motion and held that diversity jurisdiction exists because the RMI, although technically retaining membership in the Trust Territory of the Pacific Islands (TTPI), has de facto become a foreign state.
Keywords
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- International Decisions
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- Copyright © American Society of International Law 1989
References
1 28 U.S.C. § 1332(a)(2) provides: “The district courts shall have original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $10,000 … and is between … (2) citizens of a State and citizens or subjects of a foreign state … .” 28 U.S.C.A. §1332(a)(2) (West Supp. 1989).
2 The TTPI consists of approximately 96 island units located in the western Pacific Ocean north of the equator. See Trust Territory of the Pacific Islands, 13th Annual Re port to the United Nations 190 (Dep’t of State Pub. No. 7183, 1961).
3 701 F.Supp. 744, 745 (citing, e.g., Murarka v. Bachrack Bros., 215 F.2d 547 (2d Cir. 1954); World Communications Corp. v. Micronesian Telecommunications Corp., 456 F.Supp. 1122 (D. Haw. 1978); People of Saipan v. Department of Interior, 356 F.Supp. 645 (D. Haw. 1973), aff’d, 502 F.2d 90 (9th Cir. 1974)).
4 61 Stat. 3301, TIAS NO. 1665, 8 UNTS 189 (entered into force July 18, 1947) [herein after Trusteeship Agreement].
5 701 F.Supp. at 745 (quoting World Communications Corp., 456 F.Supp. at 1123–24, and citing People of Saipan, 356 F.Supp. at 653–54).
6 Id. (citing World Communications Corp., 456 F.Supp. at 1123–24; Klausner v. Levy, 83 F.Supp. 599 (E.D. Va. 1949), and Murarka, 215 F.2d at 552). The court distinguished a recent Ninth Circuit case, In re Bowoon Sangsa Co., 720 F.2d 595, 602 (9th Cir. 1983), which held that the courts of Palau could not be considered “foreign” for purposes of limitations on liability. Because that case involved the interpretation of another statute, the court argued, its relevance to the interpretation of 28 U.S.C. §1332 was “questionable.” 701 F.Supp. at 745 n.2.
7 48 U.S.C. §1681 (Supp. IV 1986) [hereinafter Compact].
8 Secretary of the Interior, Order No. 3039, 44 Fed. Reg. 28,116 (1979).
9 By its terms, the Compact has the force and effect of a U.S. statute.
10 Proclamation No. 5564, 51 Fed. Reg. 40,399 (1986).
11 13 CI. Ct. 667, 677 (1987).
12 701 F.Supp at 746 (quoting Juda v. United States, 13 CI. Ct. at 677).
13 The Juda court noted:
[T]he Trusteeship Agreement and the Compact are two separate documents that involve different parties and raise differing legal issues. The Trusteeship Agreement is between the United States and the [United Nations Security Council]; the Compact is between the United States and the RMI. Trusteeship termination and the Compact implementation are two separate issues.
Id. (quoting Juda, 13 CI. Ct. at 678).
14 639 F.Supp. 706 (S.D.N.Y. 1986), summarized in 81 AJIL 220 (1987).
15 701 F.Supp. at 747.