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TRUMP TAJ v. COSTRUZIONI AERONAUTICHE

April 11, 1991

TRUMP TAJ MAHAL ASSOCIATES, A LIMITED PARTNERSHIP, TRUMP CASTLE ASSOCIATES, TRUMP PLAZA ASSOCIATES, AND HELICOPTER AIR SERVICES, INC., PLAINTIFFS,
v.
COSTRUZIONI AERONAUTICHE GIOVANNI AGUSTA, S.P.A., AGUSTA S.P.A., GRUPPO AGUSTA, AGUSTA AVIATION CORPORATION, A/K/A AGUSTA AEROSPACE, AND PARAMOUNT AVIATION, INC., DEFENDANTS.



The opinion of the court was delivered by: Gerry, Chief Judge:

  OPINION

This case arises from the notorious helicopter crash on October 10, 1989 in Lacey Township, New Jersey, in which three top executives in Donald Trump's organization were killed. Plaintiffs are the three Trump owned Atlantic City casinos (collectively "Trump") and Helicopter Air Services, Inc., a Delaware corporation with its principal place of business in Linden, New Jersey. Defendants are Costruzioni Aeronautiche Giovanni Agusta S.p.A. ("CAGA"), Agusta S.p.A., and Gruppo Agusta (collectively "Agusta"), the Italian corporate entities that manufactured the Agusta A109 helicopter that crashed in the above accident; their United States subsidiary, Agusta Aviation Corporation ("AAC"); and Paramount Aviation, Inc. ("Paramount"), which was "in the business of operating, maintaining and managing the helicopter." Complaint (Compl.) ¶ 9. (Paramount also employed the pilot of the helicopter, who also died in the crash.)

Plaintiffs filed in New Jersey state court. Defendants removed here. Before the court are plaintiffs' motion to remand and defendants' motion to dismiss. Paramount is named in three of the eight counts and joins in Agusta's motion to dismiss those counts.

The Trump plaintiffs seek recovery on two grounds. First, plaintiffs seek reimbursement of benefits they paid to decedents' beneficiaries under New Jersey's worker's compensation law. Second, plaintiffs invoke eight theories of liability to recover damages flowing from the death of their three "key" employees. Compl. ¶ 32-33. Although framed in eight counts, these damages theories are in essence different ways of articulating a wrongful death claim.

Helicopter Air Services seeks to recover $300,000 in damages based on the diminution in value of an Agusta A109 helicopter it owns, a cause of action arising solely as "a further result of the conduct of the Defendants and the public mistrust over the safety of continued operation of the Agusta 109 helicopters" since the October 10, 1989 crash. Compl. ¶ 38. Defendants argue that such a cause of action is "frivolous" and should be "summarily dismissed." We agree. Helicopter Air Services has not opposed the motion, which will be granted.

The motion to remand turns on two issues. First, defendant Agusta S.p.A. removed on the basis that it is an Italian corporation, owned by the Italian government, and so qualifies for removal as a "foreign state." Plaintiffs challenge Agusta's status as a "foreign state." Second, plaintiffs argue that the presence of a non-diverse New Jersey defendant, Paramount Aviation, makes removal improper. Defendants argue that removal is proper at the sole discretion of the "foreign state," despite the presence of a non-diverse defendant. We find that defendant Agusta S.p.A. was entitled to remove this action regardless of the presence of a non-diverse defendant, and will therefore deny the motion to remand.

The key question regarding plaintiffs' claim for reimbursement of worker's compensation benefits is whether defendants received statutory notice from plaintiffs. Because we find that plaintiffs did not provide the expressly provided statutory notice, we will grant summary judgment for defendants on this claim.

The threshold question raised by defendants on their motion to dismiss is whether a corporation can ever recover damages flowing from the death of its employees. Defendants argue that courts have unanimously held that a corporation may not recover for losses arising from the death (as opposed to injury) of its employees; and that no matter what theories of liability plaintiffs invoke, at bottom this is a wrongful death action, and corporations are not a statutorily approved beneficiary of such damages. No matter how properly plaintiffs may have stated a claim for strict liability or negligence, for example, the basis of their claim is the damages they have suffered from the death of their three employees, and defendants assert that that is an impermissible basis for recovery by a corporation. We agree and will dismiss the complaint.*fn1

Defendants also attack plaintiffs' theories of liability in Count VI, "wilful destruction and spoilation of evidence, and breach of agreement to preserve trial evidence and fraud"; and Count VIII, "willful, intentional interference with contractual employment relations." These counts name only the Agusta defendants. We find that New Jersey does not recognize the cause of action in Count VI, and plaintiffs fail to state a claim against these defendants under Count VIII. These counts would therefore be dismissed even if plaintiffs were entitled to seek damages arising from the death of their employees.

I. FACTS

The following facts are drawn from the complaint and are accepted as true for purposes of the motion to dismiss:

  13. Sometime prior to 1984, the Defendants Agusta
  designed a seven place twin turbine helicopter
  known as the Agusta 109 ("109").
  14. The 109 was designed with four metal rotor
  blades consisting of a front aluminum spar and
  aluminum honeycomb filler with an aluminum outer
  skin.
  15. The military variant of the 109 was designated
  the Agusta "109K," and sold to international
  military establishments, except in the United
  States, and were equipped with the same main rotor
  blades. . . .
  16. The main rotor blades were designed, built and
  sold with a represented

  service life of 3,000 hours between replacement.
  17. Shortly before the introduction of the 109 and
  109K, and long before either aircraft achieved
  3,000 hours on the main rotor blades, the Agusta
  Defendants received reports of design and
  manufacturing defects that resulted in cracks
  developing in the main rotor blades.
  18. The cracks, some of which were usually
  invisible to the unaided eye, were generally
  accompanied by vibrations of varying magnitude,
  which could not be adjusted out of the helicopter
  through normal maintenance techniques.
  19. At all times, the Agusta Defendants held
  themselves out as experts in the design,
  construction and maintenance of helicopters and
  the ultimate authority on the 109 and 109K, upon
  which expertise the Plaintiffs, the United States
  Government, and the Italian equivalent of the
  Federal Aviation Administration relied.
  20. Long prior to 1989, the Defendant Paramount
  acquired the rights to operate the [109]
  helicopter in charter service under the Paramount
  certificate of authority.
  21. Paramount then arranged and performed
  management and maintenance of the [109]
  helicopter, operation of the helicopter under Part
  135 of the Federal Aviation Regulations in
  helicopter taxi service, and was responsible for
  the scheduling, inspections, maintenance and
  overhaul of the helicopter and its components.
  22. From the very first day the helicopter was
  delivered to a retail customer and regularly prior
  to October 10, 1989, the helicopter suffered
  vibrations identified as emanating from the main
  rotor blades, especially during translational lift
  — that period when the flight of the helicopter
  changes from forward flight to hover and vice
  versa.
  23. Consultations and maintenance performed by and
  with the Agusta Defendants, by predecessor
  lessees, Paramount and the Plaintiffs about this
  vibration resulted in no improvement in the
  vibration, but rather assurances were given in
  Philadelphia, Pennsylvania, Morristown, New Jersey
  and elsewhere, that the vibration was within
  normal limits and the [109] helicopter was safe
  for normal operation.
  24. Notwithstanding the assurances given by the
  Agusta Defendants to Paramount, the Plaintiffs,
  and predecessor lessees, Agusta and Paramount knew
  that other Agusta 109 and military and 109K
  helicopters with similar vibrations had suffered
  catastrophic or near catastrophic rotor blade
  failures.
  25. Notwithstanding the assurance afforded, the
  Agusta Defendants and Paramount knew that the very
  sister ship to the [109] helicopter [that crashed
  and killed plaintiffs' employees] had suffered a
  crack in a main rotor blade after similar reports
  of vibration only one year before October 10,
  1989.
  26. Notwithstanding the[se] assurances . . ., the
  Agusta Defendants and Paramount knew that the
  inevitable result of the vibration would be rotor
  blade failure and the certain loss of life and
  serious personal injury resulting therefrom.
  27. In August 1989 and again in September of 1989,
  the helicopter [that crashed] was brought to the
  Agusta Defendants for further examination of the
  rotor system vibration, and again the Agusta
  Defendants assured Paramount and the flight crew
  that the vibration was within normal limits.
  28. Aboard the helicopter [at the time of the
  crash] were three passengers, Stephen Hyde, Mark
  Etess and Jonathan Benanav, all of whom were
  killed.
  29. At the time of his death, Stephen Hyde was
  employed by Plaintiffs Taj Mahal, Castle and Plaza
  as Chief Executive Officer, and in that capacity
  had overall responsibility for the entire Atlantic
  City casino operations of the Plaintiffs.
  30. At the time of his death, Mark Etess was
  employed by the Taj Mahal as its Chief Operating
  Officer, and in that capacity had overall
  responsibility for the completion and opening of
  that casino, together with its day to day
  operations, including the planning and development
  of mega events, casino business development,

  operations and accounting and implementation of
  controls.
  31. At the time of his death, Jonathan Benanav was
  employed by the Trump Plaza as Vice President in
  charge of non-casino operations and was
  responsible for all food and beverage services in
  that casino and was to assume the role as head of
  all non-casino operations of the Plaintiffs'
  Atlantic City casino operations.
  32. All of the decedents were employed in
  capacities critical to the successful operation of
  the Plaintiffs, were key employees upon whose
  services the Plaintiffs relied and depended for
  the successful continuation of their business
  enterprises.
  33. All of the decedents were crucial management
  personnel without whose services the Plaintiffs
  have and will suffer financial damages including,
  but not limited to:
a.  Loss of the value of their services;
b.  Loss of revenue;
c.  Increased expenses and cost of operation;
d.  Higher costs for replacement personnel;
    e.  Financial losses far exceeding the cost to
        the Plaintiffs for the services of the
        deceased;
    f.  Damages to the casino operations as a result
        of managerial inefficiency;
    g.  Loss of mega events and the resultant loss
        of income;
    h.  Other damages as yet unfolding, both as to
        category and amount.
  34. The Plaintiffs were under contract to the
  deceased Hyde and Etess to pay half of their
  salaries for a period of two years following their
  death, and as a result of the death of Hyde and
  Etess, the Plaintiffs have [paid] and will pay
  substantial sums of money pursuant to the[se]
  contracts.

Id., ¶¶ 13-34.

II. MOTION TO REMAND

Because the motion to remand addresses the subject matter jurisdiction of the court, we turn to it first. Defendant Agusta S.p.A. removed this action from New Jersey state court on August 10, 1990.

a) Removal Was Proper

Plaintiffs argue that removal was improper because defendant Agusta S.p.A. ("Agusta") does not qualify as a "foreign state" under the removal provision in 28 U.S.C. § 1603(a). This is so for two reasons. First, Agusta is not a "foreign state" because neither the notice of removal nor the affidavit submitted by Emilio Fraipont, counsel for Agusta, establishes that Agusta is owned by the Italian government. Second, Agusta is not a "foreign state" because of the link between the three Italian corporate defendants and their wholly-owned United States subsidiary, defendant Agusta Aviation Corporation ("AAC"). AAC is a Delaware corporation with its principal place of business in Philadelphia, Pennsylvania, and a wholly-owned subsidiary of the Agusta defendants. Compl. ¶ 8. Defendants argue that ownership of a United States subsidiary does not make Agusta a citizen of the United States.

Plaintiffs further argue that removal was improper because the court does not have authority to exercise pendent party jurisdiction over defendant Paramount Aviation. Thus, the case should be remanded in its entirety.

The removal statute provides, in relevant part:

  Any civil action brought in a State court against
  a foreign state as defined in section 1603(a) of
  this title 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. Upon removal the action
  shall be tried by the court without jury.

28 U.S.C. § 1441(d).

1. Agusta Is A "Foreign State" Under Section 1603(a)

Defendant Agusta, S.p.A. filed a notice of removal on August 10, 1990. The notice alleged:

  2. The underlying action is an action brought
  against a "foreign state" as defined in 28 U.S.C. § 1603(a).
  Defendant Agusta, S.p.A. was at the time
  that this action was commenced, and still is, an
  "agency" or "instrumentality" of the Government of
  Italy within the meaning of the Foreign Sovereign
  Immunities Act [("FSIA"), 28 U.S.C. § 1602 et seq.]
  and therefore defendant . . . is considered a
  "foreign state" as defined by 28 U.S.C. § 1603(a).
  3. Defendant, Agusta S.p.A. is neither a citizen
  of a state of the United States as defined by
  28 U.S.C. § 1332(c) and (d) nor has it been created
  under the laws of any third country.

Id. ¶¶ 2-3. On its face the notice sets forth an adequate basis for removal.

An "agency or instrumentality" of a foreign state is an entity:

  (1) which is a separate legal person, corporate or
  ...

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