Leval, Circuit Judge:
This is the latest installment in litigation brought by the European Community and twenty-six of its member states
We conclude that the district court erred in dismissing the federal and state law claims. We disagree with the district court's conclusion that RICO cannot apply to a foreign enterprise or to extraterritorial conduct. Recognizing that there is a presumption against extraterritorial application of a U.S. statute unless Congress has clearly indicated that the statute applies extraterritorially, see Morrison v. Nat'l Austl. Bank Ltd., 561 U.S. 247, 130 S.Ct. 2869, 177 L.Ed.2d 535 (2010), we conclude that, with respect to a number of offenses that constitute predicates for RICO liability and are alleged in this case, Congress has clearly manifested an intent that they apply extraterritorially. As to the other alleged offenses, the Complaint alleges sufficiently important domestic activity to come within RICO's coverage.
We believe that the district court also erred in ruling that the European Community's participation as a plaintiff in this lawsuit destroyed complete diversity. The European Community is an "agency or instrumentality of a foreign state" as that term is defined in 28 U.S.C. § 1603(b). It therefore qualifies as a "foreign state" for purposes of 28 U.S.C. § 1332(a)(4), and its suit against "citizens of a State or of different States" comes within the diversity jurisdiction.
According to the Complaint, the scheme alleged to violate RICO involves a multi-step process beginning with the smuggling of illegal narcotics into Europe by Colombian and Russian criminal organizations. The drugs are sold, producing revenue in euros, which the criminal organizations "launder" by using money brokers in Europe to exchange the euros for the domestic currency of the criminal organizations' home countries. The money brokers then sell the euros to cigarette importers at a discounted rate. The cigarette importers use these euros to purchase RJR's cigarettes from wholesalers or "cut-outs." The wholesalers then purchase the cigarettes from RJR and ship the cigarettes to the importers who purchased them. And the money brokers use the funds derived from the cigarette importers to continue the laundering cycle.
The Complaint alleges that RJR directed and controlled this money-laundering scheme, utilizing other companies to handle and sell their products. It alleges that RJR gave special handling instructions "intended to conceal the true purchaser of the cigarettes." Complaint ¶ 58. The Complaint also alleges that RJR's executives and employees would travel from
The Complaint asserts that in the course of executing this scheme RJR committed various predicate racketeering acts in violation of RICO, including mail fraud, wire fraud, money laundering, violations of the Travel Act, 18 U.S.C. § 1952, and providing material support to foreign terrorist organizations. In addition the Complaint asserts that RJR committed New York common law torts of fraud, public nuisance, unjust enrichment, negligence, negligent misrepresentation, conversion, and money had and received.
Defendants moved to dismiss both the RICO and state law claims. In its first decision, the district court dismissed the RICO claims on the ground that RICO has no application to activity outside the territory of the United States and cannot apply to a foreign enterprise. European Cmty. v. RJR Nabisco, Inc. (European Cmty. I), No. 02-CV-5771, 2011 WL 843957, at *4-5, *7 (E.D.N.Y. Mar. 8, 2011). The court concluded, citing Morrison, that the "focus" of the RICO statute is the enterprise, see 18 U.S.C. §§ 1961(4), 1962(a)-(c), and that the enterprise alleged in the Complaint, which consisted largely of a loose association of Colombian and Russian drug-dealing organizations and European money brokers whose activity was directed outside the United States, could not be considered domestic. Because the enterprise was foreign, the district court concluded, under Morrison's presumption that United States statutes do not apply extraterritorially absent a clear indication of congressional intent, that the Complaint failed to state an actionable violation of RICO. The court thus dismissed the RICO claims under Federal Rule of Civil Procedure 12(b)(6).
As for the state law claims alleged to come within the federal courts' diversity jurisdiction, the district court observed that the necessary complete diversity might be destroyed if the European Community remained a plaintiff. European Cmty. I, 2011 WL 843957, at *8. The court allowed Plaintiffs' counsel time to determine whether the European Community intended to remain a party to the suit. Id.
Once advised that the European Community would remain a party, the court ruled that the state law claims did not come within the diversity jurisdiction of the federal courts. It held that the European Community was not a "foreign state," as used in 28 U.S.C. § 1332, with
Plaintiffs contend on appeal that the district court erred in concluding that the Complaint failed to allege federal law claims, and that the district court erred in finding absence of diversity jurisdiction for the state law claims. We agree with both contentions.
We turn first to the dismissal of the RICO claims. We review a district court's dismissal under Rule 12(b)(6) de novo. Connecticut v. Duncan, 612 F.3d 107, 112 (2d Cir.2010).
The district court concluded that the Complaint failed to state actionable RICO claims because the alleged enterprise was located and directed outside the United States. The court's analysis was based on the Supreme Court's ruling in Morrison that the presumption against extraterritorial application of U.S. statutes bars such application absent a clear manifestation of congressional intent. European Cmty. I, 2011 WL 843957, at *4. The district court concluded that RICO is silent as to whether Congress intended it to apply to conduct outside the United States, and that "this silence prohibits any extraterritorial application of RICO." Id. The district court believed this conclusion was compelled by our holding in Norex Petroleum Ltd. v. Access Industries, Inc., 631 F.3d 29, 32 (2d Cir.2010). We disagree in several respects with the district court's analysis, including its understanding of the Norex precedent.
The RICO statute incorporates by reference numerous specifically identified federal criminal statutes, as well as a number of generically described state criminal offenses (known in RICO jurisprudence as "predicates"). 18 U.S.C. § 1961(1). It adds new criminal and civil consequences to the predicate offenses in certain circumstances — generally speaking, when those offenses are committed in a pattern (consisting of two or more instances) in the context of "any enterprise which is engaged in, or the activities of which affect, interstate or foreign commerce." 18 U.S.C. § 1962; see also id. § 1964.
Litigants, including Plaintiffs in this case, have argued that this just-quoted provision of the statute, which makes RICO applicable to enterprises whose activities affect foreign commerce, sufficiently indicates congressional intent that RICO should apply extraterritorially. In Norex we rejected that argument, noting the Supreme Court's admonishment in Morrison that the mere fact of a statute's generic reference to "interstate or foreign commerce," identifying the source of Congress's authority to regulate, would not qualify as a manifestation of congressional intent that the statute apply extraterritorially. Norex, 631 F.3d at 33 (internal quotation mark omitted). The argument we rejected in Norex was to the effect that all claims under RICO may apply to foreign conduct because all RICO claims require proof of an enterprise whose activities affect interstate or foreign commerce. Id. We viewed this argument as plainly foreclosed by Morrison.
The district court here construed our rejection in Norex of arguments that RICO applies extraterritorially in all of its applications as a ruling that RICO can never have extraterritorial reach in any of its applications. See European Cmty. I, 2011 WL 843957, at *4. This was a misreading of Norex. We now confront an argument about the extraterritorial reach of RICO that was not considered in Norex, or in other rulings called to our attention. Congress manifested an unmistakable intent that certain of the federal statutes adopted as predicates for RICO liability apply to extraterritorial conduct. This appeal requires us to consider whether and how RICO may apply extraterritorially in the context of claims predicated on such statutes.
We conclude that RICO applies extraterritorially if, and only if, liability or guilt could attach to extraterritorial conduct under the relevant RICO predicate. Thus, when a RICO claim depends on violations of a predicate statute that manifests an unmistakable congressional intent to apply extraterritorially, RICO will apply to extraterritorial conduct, too, but only to the extent that the predicate would. Conversely, when a RICO claim depends on violations of a predicate statute that does not overcome Morrison's presumption against extraterritoriality, RICO will not apply extraterritorially either.
Our conclusion is compelled primarily by the text of RICO. Section 1961(1), which defines "racketeering activity" for purposes of RICO, incorporates by reference various federal criminal statutes, which serve as predicates for RICO liability. Some of these statutes unambiguously and necessarily involve extraterritorial conduct. They can apply only to conduct outside the United States. As examples, § 2332 of Title 18 criminalizes killing, and attempting to kill, "a national of the United States, while such national is outside the United States." 18 U.S.C. § 2332(a) (emphasis added). Section 2423(c) criminalizes "[e]ngaging in illicit sexual conduct in foreign places." Id. § 2423(c) (emphasis added). As the conduct which violates these two statutes can occur only outside the United States, Congress unmistakably intended that they apply extraterritorially. By explicitly incorporating these statutes by reference as RICO predicate offenses, Congress also unmistakably intended RICO to apply extraterritorially when § 2332 or § 2423(c) form the basis for RICO liability. Indeed, it is hard to imagine why Congress would incorporate these statutes as RICO predicates if RICO could never have extraterritorial application.
Other statutes that serve as RICO predicates clearly state that they apply to both domestic and extraterritorial conduct. For example, § 1203(b), which criminalizes hostage taking, explicitly applies to conduct that "occurred outside the United States" if the offender or the hostage is a U.S. national, the offender is found in the United States, or the conduct sought to coerce the government of the United States; sections 351(i) and 1751(k) expressly provide "extraterritorial jurisdiction" for their criminalization of assassination, kidnapping, or assault of various U.S.
By incorporating these statutes into RICO as predicate racketeering acts, Congress has clearly communicated its intention that RICO apply to extraterritorial conduct to the extent that extraterritorial violations of those statutes serve as the basis for RICO liability. Thus, a RICO complaint predicating the defendants' liability on their having engaged in a pattern of attempting, while "outside the United States," to kill the plaintiff, "a national of the United States," as prohibited by 18 U.S.C. § 2332(b), would state an actionable violation of RICO notwithstanding the extraterritorial conduct because RICO incorporates Congress's express statement that § 2332(b) applies to whomever "outside the United States attempts to kill ... a national of the United States." Id. (emphasis added). When, and to the extent that, a RICO charge is based on an incorporated predicate that manifests Congress's clear intention to apply extraterritorially, the presumption against extraterritorial application of U.S. statutes is overcome. The district court was mistaken in interpreting our Norex decision as holding that RICO can never apply extraterritorially.
Applying its perception of our holding in Norex, the district court approached the question whether a RICO claim can apply to extraterritorial conduct by determining that the "focus" of RICO is the criminal enterprise and that any application of RICO is therefore impermissibly extraterritorial when the alleged enterprise is foreign. Because the district court viewed the enterprise alleged in the Complaint as consisting primarily of a loose association of foreign criminal organizations whose policies and activities were directed from outside the United States, it concluded that the enterprise was foreign. It accordingly held that the presumption against extraterritorial application of U.S. statutes barred application of RICO to the facts alleged in the Complaint. In our view, the court erred in that analysis for two principal reasons.
First, the district court's approach necessarily disregards the textual distinctions in the statutes incorporated by reference as RICO predicates. For example, the money laundering statute explicitly applies to extraterritorial conduct "if (1) the conduct is by a United States citizen ... and (2) the transaction or series of related transactions involves funds or monetary instruments of a value exceeding $10,000." 18 U.S.C. § 1956(f). The district court's reading of RICO would preclude extraterritorial applications of RICO where they are explicitly permitted under the money laundering statute. By contrast, some RICO predicates do not mention any extraterritorial application, see, e.g., 18 U.S.C. § 1511 (criminalizing the obstruction of state or local law enforcement), while others clearly apply to extraterritorial
Nothing in RICO requires or even suggests such an erasure of statutory distinctions. Rather, RICO prohibits, roughly speaking, investing in, acquiring control of, working for, or associating with an "enterprise" if the defendant's conduct involves (in a variety of potential fashions) a "pattern of racketeering activity." 18 U.S.C. §§ 1962(c), 1964(c). RICO does not qualify the geographic scope of the enterprise.
Second, the district court's requirement that the defendant be, loosely speaking, associated with a domestic enterprise in order to sustain RICO liability seems to us illogical. Under that standard, if an enterprise formed in another nation sent emissaries to the United States to engage in domestic murders, kidnappings, and violations of the various RICO predicate statutes, its participants would be immune from RICO liability merely because the crimes committed in the United States were done in conjunction with a foreign enterprise. Surely the presumption against extraterritorial application of United States laws does not command giving foreigners carte blanche to violate the laws of the United States in the United States. Cf. United States v. Parness, 503 F.2d 430, 438-39 (2d Cir.1974) (noting that a conclusion that RICO requires both a domestic enterprise and a domestic pattern of racketeering activity would "permit those whose actions ravage the American economy to escape prosecution simply by investing the proceeds of their ill-gotten gains in a foreign enterprise").
The district court's standard has the additional, undesirable effect of complicating the question of what conduct exposes a party to liability in the United States.
We think it far more reasonable to make the extraterritorial application of RICO coextensive with the extraterritorial application of the relevant predicate statutes. This interpretation at once recognizes that "RICO is silent as to any extraterritorial application" and thus has no extraterritorial application independent of its predicate statutes. See Norex, 631 F.3d at 33 (quoting N.S. Fin. Corp. v. Al-Turki, 100 F.3d 1046, 1051 (2d Cir.1996)). At the same time, it gives full effect to the unmistakable instructions Congress provided in the various statutes incorporated by reference into RICO. This approach has the benefit of simplifying the question of what conduct is actionable in the United States and permitting courts to consistently analyze that question regardless of whether they are presented with a RICO claim or a claim under the relevant predicate. It also avoids incongruous results, such as insulating purely domestic conduct from liability simply because the defendant has acted in concert with a foreign enterprise.
The Complaint in our case alleges a pattern of racketeering activity based on predicates that include (1) money laundering, 18 U.S.C. §§ 1956-57, (2) providing material support to foreign terrorist organizations, 18 U.S.C. § 2339B, (3) mail fraud, 18 U.S.C. § 1341, (4) wire fraud, 18 U.S.C. § 1343, and (5) violations of the Travel Act, 18 U.S.C. § 1952. Applying Morrison's presumption against extraterritoriality to these predicate statutes, we conclude first that the money laundering and material support of terrorism statutes both apply extraterritorially under specified circumstances, including those circumstances alleged in the Complaint. Second, we conclude that the wire fraud and money fraud statutes, as well as the Travel Act, do not overcome Morrison's presumption against extraterritoriality. Nevertheless, because Plaintiffs have alleged that all elements of the wire fraud, money fraud, and Travel Act violations were completed in the United States or while crossing U.S. borders, we conclude that the Complaint states domestic RICO claims based on violations of those predicates.
The money laundering predicates apply extraterritorially "if (1) the conduct is by a United States citizen ... and (2) the transaction or series of related transactions involves funds or monetary instruments of a value exceeding $10,000." 18 U.S.C. § 1956(f). Section 1956(f) expressly states that "[t]here is extraterritorial jurisdiction over the conduct prohibited by this section." Section 1957 similarly criminalizes knowingly engaging "in a monetary transaction in criminally derived property
The claims of the Complaint asserting RICO liability for a pattern of violations of these predicates meet the statutory requirements for extraterritorial application of RICO. The district court erred in dismissing, as impermissibly extraterritorial, the RICO claims based on these predicates.
Whether Congress manifested an intent that the wire fraud statute, 18 U.S.C. § 1343,
The mail fraud statute presents an easier case.
Applying these principles to the Complaint, we conclude that it alleges sufficient domestic conduct for the claims involving mail fraud, wire fraud, and Travel Act violations to sustain the application of RICO, notwithstanding that these predicates do not apply extraterritorially.
The Complaint alleges that RJR essentially orchestrated a global money laundering scheme from the United States by sending employees and communications abroad. It claims that RJR "communicated... with [its] coconspirators on virtually a daily basis by means of U.S. interstate and international wires as a means of obtaining orders for cigarettes, arranging for the sale and shipment of cigarettes, and arranging for and receiving payment for the cigarettes in question." Complaint ¶ 94. The Complaint also states that RJR and its coconspirators "utilized the interstate and international mail and wires, and other means of communication, to prepare and transmit documents that intentionally misstated the purchases of the cigarettes in question so as to mislead the authorities within the United States, the European Community, and the Member States." Id.
Id. ¶ 84.
Beyond these allegations that the Defendants managed their global money laundering schemes from the United States through foreign travel and communications, the Complaint also claims that the schemes themselves were directed at the United States and had substantial domestic effects. The Complaint alleges that RJR repatriated the profits of its unlawful activity into the United States through money laundering and other acts of concealment. The money laundering involved in one portion of the scheme — that comprising Russian organized crime and the Bank of New York — was largely centered in and operated from Queens, New York, where tens of millions of dollars were allegedly laundered. Defendants allegedly filed large volumes of false documents with the United States Customs Service and the Bureau of Alcohol, Tobacco and Firearms in order to deceive these agencies and permit the unlawful activity to continue. Finally, the Complaint alleges that the money laundering scheme it describes is intertwined with organized crime and narcotics trafficking in New York City, that much of the money laundering through cigarette sales occurs in New York City, and that millions of dollars' worth of real estate have been purchased within New York in conjunction with the scheme.
We need not now decide precisely how to draw the line between domestic and extraterritorial applications of the wire fraud statute, mail fraud statute, and Travel Act, because wherever that line should be drawn, the conduct alleged here clearly states a domestic cause of action. The complaint alleges that defendants hatched schemes to defraud in the United States, and that they used the U.S. mails and wires in furtherance of those schemes and with the intent to do so. Defendants are also alleged to have traveled from and to the United States in furtherance of their schemes. In other words, plaintiffs have alleged conduct in the United States that satisfies every essential element of the mail fraud, wire fraud, and Travel Act claims. If domestic conduct satisfies every essential element to prove a violation of a United States statute that does not apply extraterritorially, that statute is violated even if some further conduct contributing to the violation occurred outside the United States.
We note that, as we are reviewing a dismissal based solely on the contents of the Complaint, our conclusion is based entirely on the Complaint, which we find sufficient to state an actionable claim.
Next, we turn to the district court's dismissal of Plaintiffs' state law claims. We review a district court's legal conclusions dismissing state law claims for lack of subject matter jurisdiction de novo. Capital Ventures Int'l v. Republic of Argentina, 552 F.3d 289, 293 (2d Cir.2009).
Federal courts are powerless to adjudicate a suit unless they have subject matter jurisdiction over the action. The district court determined that it lacked subject matter jurisdiction over Plaintiffs' state law claims under the diversity jurisdiction statute, 28 U.S.C. § 1332. Section 1332 requires complete diversity between opposing parties. See, e.g., Hallingby v. Hallingby, 574 F.3d 51, 56 (2d Cir.2009); Strawbridge v. Curtiss, 7 U.S. (3 Cranch) 267, 267, 2 L.Ed. 435 (1806). If the European Community is not diverse from RJR, its continued participation in this lawsuit would destroy complete diversity and deprive the federal court of jurisdiction.
Section 1332(a)(4) grants the federal courts jurisdiction over suits where the amount in controversy exceeds $75,000 and the suit is between "a foreign state ... as plaintiff and citizens of a State." 28 U.S.C. § 1332(a)(4). A "foreign state" is defined for purposes of § 1332(a)(4) by § 1603, which is part of the Foreign Sovereign Immunities Act ("FSIA"). This latter section provides:
Id. § 1603.
The European Community is therefore a "foreign state" for purposes of § 1332(a)(4) if it is an "agency or instrumentality of a foreign state." Whether it is an agency or instrumentality of a foreign state, in turn, depends on whether it conforms to the definition in subsection (b). There is no doubt that the European Community satisfies the first and third elements of the definition of "agency or instrumentality" provided in § 1603(b).
For the reasons discussed below, we conclude that the European Community is an organ of a foreign state, and thus an agency or instrumentality of a foreign state. As a result, the continued participation of the European Community in this suit does not destroy complete diversity.
The FSIA does not include a definition of the term "organ." A number of dictionaries we have consulted include definitions of "organ" that are altogether compatible with the European Community in its relationship to the states that formed it. See Organ Definition, Oxford English Dictionary, http://www.oed.com/view/Entry/ 132421 (last visited July 10, 2013) ("A means of action or operation, an instrument; (now) esp. a person, body of people, or thing by which some purpose is carried out or some function is performed."); American Heritage Dictionary 875 (2d College ed. 1982) ("An organization that performs certain specified functions: The FBI is an organ of the Justice Department."); Merriam-Webster's Third New International Dictionary of the English Language 1589 (1976) ("an instrumentality exercising some function or accomplishing some end"). RJR in rebuttal points to definitions that characterize an organ as subordinate to a larger entity, arguing that this is not the case with the European Community's relationship to its member nations. But the fact that the word is sometimes used to refer to a smaller part of a larger whole does not mean that the word can serve only in that fashion. The European Community was formed by its member nations to serve on their collective behalf as a body exercising governmental functions over their collective territories. We see no reason why it is not properly described as an organ of each nation.
In Filler v. Hanvit Bank, 378 F.3d 213, 217 (2d Cir.2004), this court set forth five factors to guide a court in determining whether a party is an "organ" under the FSIA. The factors are:
Id. (quoting Kelly v. Syria Shell Petroleum Dev. B.V., 213 F.3d 841, 846-47 (5th Cir.2000)) (alteration in original). We have stated that these factors invite a balancing process, and that an entity can be an organ even if not all of the factors are satisfied. See In re Terrorist Attacks on Sept. 11, 2001, 538 F.3d 71, 85 (2d Cir. 2008), abrogated on other grounds by Samantar v. Yousuf, 560 U.S. 305, 130 S.Ct. 2278, 176 L.Ed.2d 1047 (2010). The European Community satisfies four of these factors and, very likely, also the fifth: it was created by the European nations for
It seems beyond doubt that the member states that founded the European Community did so for a "national purpose." Filler, 378 F.3d at 217. Their purpose was to establish governmental control on a collective basis over various national functions previously performed by each of the member states on an individual basis, such as by establishing a common market and a monetary union, and by coordinating economic activities throughout the community. EC Treaty, arts. 1-4. The management of a common currency and the maintenance of economic stability are quintessential national purposes.
We have said that a foreign state actively supervises an organ when it appoints the organ's key officials and regulates some of the activities the organ can undertake. See, e.g., Peninsula Asset Mgmt. (Cayman) Ltd. v. Hankook Tire Co., 476 F.3d 140, 143 (2d Cir.2007). Member states exercise supervisory responsibility over the European Community by appointing representatives to serve on the Council of Ministers, which is the European Community's "primary policy-making and legislative body." See Stephen Breyer, Changing Relationships Among European Constitutional Courts, 21 Cardozo L.Rev. 1045, 1046 (2000). Each member of the Council is the appointed representative of one member state (although the individual representative will change depending on the subject matter to be discussed by the Council). Id. Additionally, each member state selects commissioners to serve on the European Commission, which administers the Community's various departments. Id. at 1046-47.
It is true that these entities are just two of the five basic institutions of the European Community. However, this factor does not require the foreign state to micro-manage every aspect of the organ's activities. The Council of Ministers is the European Community's primary policy-making and legislative body. Therefore, the member states' supervision of this entity enables the member states to supervise the most significant policy decisions made by the European Community.
The third factor asks "whether the foreign state requires the hiring of public employees and pays their salaries." Filler, 378 F.3d at 217. The EC Treaty, enacted by the member states, requires the creation of particular positions, which are to be filled by public officials. See European Cmty. II, 814 F.Supp.2d at 205. Service as a European Community official satisfies the European Court of Justice's definition of "public service" because such officials exercise "powers conferred by public law and duties designed to safeguard the general interests of the state or of other public authorities." Id. (quoting Case 149/79, Comm'n of the European Cmtys. v. Kingdom of Belgium, 1980 E.C.R. 3881, ¶ 10). The member states indirectly pay the salaries of the public employees. In 2000, for example, they contributed 78.4% of the European Community's budget, 5.5% of which goes to administrative expenses, which include salaries and pensions. See European Commission,
RJR argues that the European Community does not satisfy this factor because its employees are not public employees of the member states. See, e.g., Patrickson v. Dole Food Co., 251 F.3d 795, 808 (9th Cir.2001), aff'd by 538 U.S. 468, 123 S.Ct. 1655, 155 L.Ed.2d 643 (2003). This fact seems to us of small importance at best. Given that the European Community exercises governmental functions delegated to it by the member states, and does so through public employees whose pay is financed largely by the member states, it seems to make little or no difference for the question whether the European Community serves as an organ of its member states that its employees are not employees directly of the member states. Nevertheless, as noted above, our precedent makes clear that the five Filler factors are merely issues to be considered in the decision, and there is no requirement that all five be satisfied to support the conclusion that an entity is an organ of a foreign state. We would reach the same conclusion even if precedent compelled us to decide that the European Community fails to satisfy this factor. See Peninsula Asset Mgmt., 476 F.3d at 143 (concluding the entity was an "organ" despite the fact that it failed to satisfy the public employee factor).
Fourth, we consider "whether the entity holds exclusive rights to some right in the foreign country." Filler, 378 F.3d at 217 (alteration omitted). This factor has been given a broad meaning. See, e.g., Terrorist Attacks, 538 F.3d at 86 (an entity satisfied this factor when it held "the `sole authority' to collect and distribute charity to Bosnia"); Peninsula Asset Mgmt., 476 F.3d at 143 (entity "has the exclusive right to receive monthly business reports from the solvent financial institutions it oversees"). The European Community holds the exclusive right to exercise a number of significant governmental powers, which include the right to "authori[z]e the issue of banknotes within the Community" and "to conclude the Multilateral Agreements on Trade in Goods." European Cmty., 814 F.Supp.2d at 206-07.
Finally, the fifth factor asks "how the entity is treated under foreign state law." Filler, 378 F.3d at 217. In Peninsula Asset Management, this factor was satisfied when the "Korean government informed the State Department and the district court that it treats [the entity] as a government entity." Peninsula Asset Mgmt., 476 F.3d at 143. Neither party cites to European law that clearly addresses this question. The member states that are parties to this suit have identified the European Community as an organ. Plaintiffs informed the district court in their briefing that they consider the European Community to be a governmental entity, and the United States Department of State has advised that it accepts this representation. See Brief for the United States as Amicus Curiae at 29. Therefore, in a manner similar to the one employed in Peninsula Asset Management, the European Community appears to satisfy this factor. Furthermore, the fact that the member states have ceded portions of their governmental authority to the European Community to be exercised by it in their stead and on their collective behalf seems to confirm its status as an organ and agency of the member states.
RJR argues that none of the member states has treated the European Community as its "organ," rather than as a supranational body of the member states. This
RJR argues that the text and legislative history of the FSIA, along with the common law at the time of the FSIA's enactment, demonstrate that an "organ" of a foreign state cannot include an international organization created by multiple states. We disagree.
First, we turn to the text of § 1603. The fact that § 1603(b)(2) uses the term "organ of a foreign state" in the singular does not necessarily negate application to the European Community, which serves numerous foreign states. 28 U.S.C. § 1603(b)(2) (emphasis added). There is no logic to the proposition that an entity that serves as an organ of one foreign state cannot also serve as the organ of another. The Dictionary Act furthermore states that "[i]n determining the meaning of any Act of Congress, unless the context indicates otherwise[,] words importing the singular include and apply to several persons, parties, or things." 1 U.S.C. § 1. Context "means the text of the Act of Congress surrounding the word at issue, or the texts of other related congressional Acts." Rowland v. Cal. Men's Colony, 506 U.S. 194, 199, 113 S.Ct. 716, 121 L.Ed.2d 656 (1993). The context here gives no indication that the phrase "a foreign state" must be interpreted to exclude an organ that serves as an agency of several states. Our interpretation finds support in the law of other circuits dealing with the pooling of shares to determine the status of commercial entities. See In re Air Crash Disaster Near Roselawn, Ind., 96 F.3d 932, 938-39 (7th Cir. 1996) (holding that an entity created by multiple governments is an "agency or instrumentality" under the FSIA); Mangattu v. M/V IBN Hayyan, 35 F.3d 205, 208 (5th Cir.1994) (same); Linton v. Airbus Indus., 30 F.3d 592, 598 n. 29 (5th Cir.1994) (collecting cases). In these "share pooling" cases, courts have repeatedly held that corporations owned by several foreign states are covered by the FSIA, even though the statute uses the singular.
RJR argues that because some dictionaries define "organ" as a smaller unit of a larger entity, an "organ" cannot be a larger international organization created by multiple foreign states. See Merriam-Webster's Collegiate Dictionary 819 (10th ed.1997) (giving as a definition of "organ": "a subordinate group or organization that performs specialized functions"). This argument is not persuasive for at least three reasons: First, while some dictionary definitions treat an organ as smaller than, or subordinate to, the entity for which it functions as an organ, other dictionary definitions do not include any specification that the entity serving as an organ must be smaller or subordinate, but focus rather on the organ's performance of a service. See definitions provided supra. Second, even if we accept an implicit connotation of subordinate status, that is not necessarily inconsistent with treating the European Community as an organ of the nations that created it. While the member states ceded to the European Community primacy as
RJR advances a number of additional strained arguments to the effect that an international organization should not be considered an agency or instrumentality, none of which are convincing.
We are satisfied that the European Community meets at least four, and possibly all five of the Filler factors, and therefore qualifies as an organ and agency of a foreign state under § 1332(a)(4). The suit accordingly comes within the diversity jurisdiction, as specified in 28 U.S.C. § 1332.
The judgment of the district court dismissing the action is VACATED, and the case REMANDED for further proceedings.