Reference no: EM13763592

Dole Food Co. v. Patrickson

Facts: Patrickson, the plaintiff, and a group of farm workers who were similarly situated and came from Costa Rica, Ecuador, Guatemala, and Panama, filed a suit against Dole Food Company, (referred to hereinafter as Dole, or defendant) seeking relief for injuries that they alleged were caused by pesticides that the company Dole used when growing produce in their home countries. Dole asserted that two other corporations should be involved: Dead Sea Bromine Co., Ltd., and Bromine Compounds, Ltd. (hereinafter referred to as the Dead Sea Companies or defendants). The plaintiffs filed suit in Hawaii in state court. The defendants requested the case be moved to federal court based on 28 U.S.C. § 1441(d). 28 U.S.C. § 1441(d) governs removal actions[JD1] against foreign States and provides that: any civil action brought in a state court against a foreign State as defined [under § 1603(a) of the Foreign State Immunities Act (FSIA)] may be removed by the foreign state to the district court of the United States for the district and division embracing the place where such action is pending 28 U.S.C. § 1441(d[JD2] ).

Section 1603(a) of the FSIA defines foreign state to include an "agency or instrumentality of a foreign state." Additionally, "agency or instrumentality of a foreign State[JD3] " is defined as any entity which is a separate legal entity (person or corporation). It includes divisions of foreign states, including political subdivisions of those nations. It can also include a group of minority owners of shares or other ownership interest of a company owned by a foreign nation or political subdivision of that nation, provided the entity is not a citizen of the US or the company is not registered (or created) in a third party nation. While Dole met this qualification (because it is headquartered and registered in the US), the Dead Sea Companies were instrumentalities of the State of Israel. Thus, they argued, they were entitled to foreign immunity and that their portion of the case was more appropriately filed in Israel.

Issue:

The issue is whether the Foreign States Immunity Act (FSIA) requires that a foreign state own a majority of the shares of a corporation if the corporation is to be deemed an instrumentality of the State. A second issue is whether instrumentality status is determined at the time of filing a complaint or later in the process.

Discussion:

1.) The corporations' instrumentality status is defined as of the time of the filing of the complaint. Thus, the instrumentality is defined either at the time of the alleged tort nor at the time the company is founded. Rather, it is determined as of the time of the filing of the compliant (De Jonge, 2011, p. 113 ).

2.) Shared responsibilities of corporations and employees are essentially an economic theory that developed as a way to ensure that the source of deeper pockets is the one that is ultimately responsible for paying them. Prosser, (in Parlee, 1984, p. 30) point out that:
The losses caused by the torts of employees, which as a practical matter are sure to occur in the conduct of the employer's enterprise, are placed upon that enterprise itself, as a required cost of doing business. They are placed upon the employer because...he is better able to absorb them, and to distribute them, through prices, rates or liability insurance, to the public, and so shift them to society, to the community at large. Citation?

This seems to suggest that it is a well understood concept that the employee can misbehave, the corporation (which has more money) will be forced to pay out, but the costs will be redistributed back to the community . This applies only to compensatory damages, and Parlee (1984 ) pointed out that the concept of vicarious liability is actually the opposite of what the entire legal system has generally accepted as fault principles. As Holmes (in Parlee, 1984, p. 31) pointed out, "commonsense is opposed to making one man pay for another man's wrong, unless he actually has brought the wrong to pass according to the ordinary canons of legal responsibility ."
The scope of employment rule, however, allows that a principal who is vicariously liable for compensatory damages may be liable for punitive damages, assuming the individual acted within the scope of agency at the time the incident occurred. This would apply in Dole v. Patrickson (year) regarding the subsidiaries. However, in this particular case it is important to note that the Court did not hear the issues relating to liability; they only heard issues relating to the proper location for hearing the case. However, in order to avoid this type of problem in the future, it would be beneficial to the companies to establish venues and jurisdiction of any potential court actions In the future, i.e., to specify in ownership, partnership, or contract papers what the venture will be in the event of a problem. In this way, any issues associate with proper setting for legal action will be settled in advance

3.) The Supreme Court held that the Court of Appeals was correct when they held that the Dead Sea Companies were a subsidiary of an instrumentality (Dole), and were not themselves entitled to instrumentality status. Thus the matter was referred to Hawaii for hearing.

4.) The case itself did little to determine who was responsible for what, in terms of the chemicals. However, the case was extremely important in terms of establishing what was, and what was not, an instrumentality. The Court established that a company could be an instrumentality only if it were a direct subsidiary of majority stockholder interest owned by a foreign state or subdivision. It was not enough to be a subsidiary of a subsidiary; the company had to be owned in majority by the foreign state or subdivision. Breyer's dissent held open the possibility that this issue would be discussed in later Courts.

Where is the conclusion paragraph which provides a brief summary of the content of the paper?

Why did the corporation request removal?

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Citation?

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What is this? Unless you actually read these cases, do not insert them as citations.

Consider that the Court pointed out that the Israel did not own a majority of the shares at any time.

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How does this answer the question of shared responsibility?

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Keep in mind that it is the instrumentality status at issue.