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OSS Nokalva, Inc. v. European Space Agency

August 16, 2010

OSS NOKALVA, INC.
v.
EUROPEAN SPACE AGENCY, APPELLANT
OSS NOKALVA, INC., APPELLANT
v.
EUROPEAN SPACE AGENCY



On Appeal from the United States District Court for the District of New Jersey (D.C. No. 3-08-cv-03169) District Judge: Honorable Mary L. Cooper.

The opinion of the court was delivered by: Sloviter, Circuit Judge.

PRECEDENTIAL

Argued June 29, 2010

Before: SLOVITER, BARRY, and HARDIMAN, Circuit Judges.

OPINION OF THE COURT

This case comes to us under the collateral order doctrine on appeal from the District Court's order denying the European Space Agency's ("ESA") motion to dismiss the claims of OSS Nokalva, Inc. ("OSSN"). ESA had asserted absolute immunity from suit based on its status as an international organization. The District Court held that ESA is generally entitled to absolute immunity, but that here it waived such immunity. ESA appeals the conclusion that it waived immunity. OSSN cross-appeals the finding that ESA "is entitled to absolute immunity in the first place." OSSN Br. at 2. We agree with the District Court that ESA is not entitled to immunity in this case, but our conclusion is based on reasons other than those relied on by the District Court.

I.

A. The Parties

OSSN is a New Jersey corporation which provides software and services to its customers. ESA, a designated international organization with headquarters in Germany, is comprised of eighteen member states and was founded "to provide for and to promote, for exclusively peaceful purposes, cooperation among European States in space research and technology." ESA Convention, Art. II(a) (quotation and citation omitted).

A federal statute enacted in 1945, the International Organizations Immunities Act, 22 U.S.C. § 288, et seq. ("IOIA"), applies to those international organizations which the President designates as entitled to the benefits of the Act. See 22 U.S.C. § 288. The IOIA provides that designated international organizations, to the extent consistent with the instruments creating them, have the capacity to enter into contracts. Id. § 288a(a)(i). The IOIA also provides that designated organizations "enjoy the same immunity from suit and every form of judicial process as is enjoyed by foreign governments, except to the extent that such organizations may expressly waive their immunity for the purpose of any proceedings or by the terms of any contract." Id. § 288a(b). ESA's predecessor was designated as an international organization by President Johnson in 1966. See Exec. Order No. 11,318, 31 Fed. Reg. 15307 (Dec. 5, 1966), as amended by Exec. Order No. 11,351, 32 Fed. Reg. 7561 (May 22, 1967), superceded by Exec. Order No. 11,760, 39 Fed. Reg. 2343 (Jan. 17, 1974), as amended by Exec. Order No. 12,766, 56 Fed. Reg. 28463 (June 18, 1991).

The ESA Convention ("Convention") governs ESA's policies, procedures, and internal rules. A council of representatives ("Council") from ESA's member states oversees its governance. The Convention provides that ESA is immune from "jurisdiction and execution," except to the extent that it shall, by decision of the Council, have expressly waived such immunity in a particular case; the Council has the duty to waive this immunity in all cases where reliance upon it would impede the course of justice and it can be waived without prejudicing the interests of the Agency[.]

Convention, Annex I, Art. IV ¶ 1(a).

B. The Agreements

ESA contracted with OSSN to provide it with, among other things, software tools and related proprietary software and information to assist ESA in developing its own software. Between 1996 and 2004, the parties executed four sets of License Agreements and corresponding Software Maintenance Agreements ("Agreements").*fn1

The first set of Agreements, License No. 5941, dated February 7, 1996, provided that "[a]ny dispute which cannot be settled amicably shall be submitted to arbitration. The arbitration proceedings shall take place in Princeton (New Jersey) in accordance with the rules of the International Chamber of Commerce." App. at 62, 65. A provision consenting to the jurisdiction of the New Jersey courts was struck out. The subsequent Agreements, though, contained a different forum selection clause -- language setting forth that each

Agreement shall be governed by the laws of the state of New Jersey and [that ESA] expressly submits to jurisdiction therein... and agrees that any dispute arising out of this Agreement shall be subject exclusively to the jurisdiction of New ...


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