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IN RE WORLD WAR II ERA JAPANESE FORCED LABOR LITIGATION

September 21, 2000

IN RE: WORLD WAR II ERA JAPANESE FORCED LABOR LITIGATION, THIS DOCUMENT RELATES TO: ALFANO
V.
MITSUBISHI CORP, CD CAL NO 00-3174 CORRE V. MITSUI & CO, CD CAL NO 00-999 ENERIZ V. MITSUI & CO, CD CAL NO 00-1455 HEIMBUCH, ET AL. V. ISHIHARA SANGYO KAISHA, LTD, ND CAL NO 00-0064 HUTCHISON V. MITSUBISHI MATERIALS CORP, CD CAL NO 00-2796 KING V. NIPPON STEEL CORP, ND CAL NO 99-5042 LEVENBERG V. NIPPON SHARYO, LTD, ND CAL NO 99-1554 LEVENBERG V. NIPPON SHARYO, LTD, ND CAL NO 99-4737 POOLE V. NIPPON STEEL CORP, CD CAL NO 00-0189 PRICE V. MITSUBISHI CORP., CD CAL NO 00-5484 SOLIS V. NIPPON STEEL CORP., CD CAL NO 00-0188 TITHERINGTON V. JAPAN ENERGY CORP, CD CAL NO 00-4383 WHEELER V. MITSUI & CO, LTD, CD CAL NO 00-2057



The opinion of the court was delivered by: Vaughn R Walker, United States District Judge.

ORDER NO. 4

On December 23, 1941, after mounting a brave resistance against an overwhelming foe, the small American garrison on Wake Island in the South Pacific surrendered to Imperial Japanese forces. James King, a former United States Marine, was among the troops and civilians taken prisoner by the invaders. He was ultimately shipped to Kyushu, Japan, where he spent the remainder of the war toiling by day as a slave laborer in a steel factory and enduring maltreatment in a prison camp by night. When captured, King was 20 years old, 5 feet 11 inches tall and weighed 167 pounds. At the conclusion of the war, he weighed 98 pounds.

James King is one of the plaintiffs in these actions against Japanese corporations for forced labor in World War II; his experience, and the undisputed injustice he suffered, are representative. King and the other plaintiffs seek judicial redress for this injustice.

I

These actions are before the court for consolidated pretrial proceedings pursuant to June 5, 2000, and June 15, 2000, orders of transfer by the Judicial Panel on Multidistrict Litigation. On August 17, 2000, the court heard oral argument on plaintiffs' motions for remand to state court and defendants' motions to dismiss or for judgment on the pleadings.

This order addresses, first, all pending motions for remand. For the reasons stated below, the court concludes that notwithstanding plaintiffs' attempts to plead only state law claims, removal jurisdiction exists because these actions raise substantial questions of federal law by implicating the federal common law of foreign relations.

Second, the court addresses the preclusive effect of the 1951 Treaty of Peace with Japan on a subset of the actions before the court, namely, those brought by plaintiffs who were United States or allied soldiers in World War II captured by Japanese forces and held as prisoners of war. The court concludes that the 1951 treaty constitutes a waiver of such claims.

This order does not address the pending motions to dismiss in cases brought by plaintiffs who were not members of the armed forces of the United States or its allies. Since these plaintiffs are not citizens of countries that are signatories of the 1951 treaty, their claims raise a host of issues not presented by the Allied POW cases and, therefore, require further consideration in further proceedings.

II

Defendants may remove to federal court "any civil action brought in a State court of which the district courts of the United States have original jurisdiction." 28 U.S.C. § 1441 (a). "The propriety of removal thus depends on whether the case originally could have been filed in federal court." Chicago v International College of Surgeons, 522 U.S. 156, 163 (1997).

Since a defense is not part of a plaintiff's properly pleaded statement of his claim, a case may not be removed to federal court on the basis of a federal defense. Rivet v Regions Bank of La, 522 U.S. 470, 475 (1998).

Defendants' assertion of the Treaty of Peace with Japan as a defense to plaintiffs' state law causes of action does not, therefore, confer federal jurisdiction. Recognizing this, defendants rely on a line of cases committing to federal common law questions implicating the foreign relations of the United States.

In Banco Nacional de Cuba v Sabbatino, 376 U.S. 398, 425 (1964), a case in which federal jurisdiction was based on diversity of citizenship, the Supreme Court held that development and application of the act of state doctrine was a matter of federal common law, notwithstanding the general rule of Erie R Co v Thompkins, 304 U.S. 64, 78 (1938), that federal courts apply state substantive law in diversity cases. The court reasoned that because the doctrine concerned matters of comity between nations, "the problems involved are uniquely federal in nature." Id at 424. Although the applicable state law mirrored federal decisions, the Court was "constrained to make it clear that an issue [involving] our relationships with other members of the international community must be treated exclusively as an aspect of federal law." Id at 425.

Under Banco Nacional, federal common law governs matters concerning the foreign relations of the United States. See Texas Indus, Inc v Radcliffe Materials, Inc, 451 U.S. 630, 641 (1981). "In these instances, our federal system does not permit the controversy to be resolved under state law, either because the authority and duties of the United States as sovereign are intimately involved or because the * * * international nature of the controversy makes it inappropriate for state law to control." Id.

If an examination of the complaint shows that the plaintiff's claims necessarily require determinations that will directly and significantly affect United States foreign relations, a plaintiff's state law claims should be removed.

Republic of Phillipines v Marcos, 806 F.2d 344, 352 (2d Cir 1986). This doctrine has been extended to disputes between private parties that implicate the "vital economic and sovereign interests" of the nation where the parties' dispute arose. Torres v Southern Peru Copper Corp, 113 F.3d 540, 543 n8 (5th Cir 1997).

The court concludes that the complaints in the instant cases, on their face, implicate the federal common law of foreign relations and, as such, give rise to federal jurisdiction. Plaintiffs' claims arise out of world war and are enmeshed with the momentous policy choices that arose in the war's aftermath. The cases implicate the uniquely federal interests of the United States to make peace and enter treaties with foreign nations. As the United States has argued as amicus curiae, these cases carry potential to unsettle half a century of diplomacy.

After a thorough analysis, Judge Baird in the Central District of California denied remand in one of the cases now before the undersigned pursuant to the multidistrict litigation transfer order. Poole v Nippon Steel Corp, No 00-0189 (CD Cal March 17, 2000). The court agrees with the analysis and the conclusion in that case.*fn1 Judge Baird held: "[T]his case, on its face, presents substantial issues of federal common law dealing with foreign policy and relations. . . . As such, plaintiffs may not evade this Court's jurisdiction by cloaking their complaints in terms of state law." The motions for remand are DENIED.

III

In addressing the motions to dismiss, the court refers again to a complaint that is representative of the actions by United States and Allied POWs, King v Nippon Steel Corp., No 99- 5042.

As noted at the outset of this order, plaintiff King seeks redress for wrongs inflicted by his captors half a century ago. In count one of the complaint, he asserts a claim under California Code of Civil Procedure § 354.6, a new law that permits an action by a "prisoner-of-war of the Nazi regime, its allies or sympathizers" to "recover compensation for labor performed as a Second World War slave labor victim * * * from any entity or successor in interest thereof, for whom that labor was performed * * * ." Cal Code Civ Pro § 354.6. Count two is an unjust enrichment claim in which plaintiff seeks disgorgement and restitution of economic benefits derived from his labor. In count three, plaintiff seeks damages in tort for battery, intentional infliction of emotional distress and unlawful imprisonment. Count four alleges that ...


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