JOSÉ A. CABRANES, Circuit Judge:
The question presented is whether the Permanent Mission of the Republic of Namibia to the United Nations ("the Mission"
We affirm.
At some point before the events that gave rise to this action, the Republic of Namibia made the decision to house the chancery, or base of operations, of its Permanent Mission to the United Nations in a Manhattan townhouse located at 135 E. 36th Street (the "Building"). The Mission commissioned extensive interior construction in order to render the Building suitable for a diplomatic mission. To perform the proposed construction, the Mission hired an independent general contractor, Federation Development Corporation ("Federation"), which in turn hired a subcontractor, Ryback Development, Inc. ("Ryback") (together with Federation, the "Contractors").
The townhouse adjoining the Building, 133 E. 36th Street, was then owned by Robert Adelman and insured by USAA Casualty Insurance Co. ("USAA"). The Building was separated from the Adelman townhouse by a brick and mortar party wall, upon which the support beams of the Adelman townhouse rested.
In early December 2008, Ryback employees began pouring a reinforced concrete wall in the interior of the Building, alongside the existing party wall. On December 15, as the concrete wall was being poured, the party wall collapsed, causing substantial damage to Adelman's property. Adelman filed an insurance claim with USAA, which paid Adelman $397,730 for his damages.
On April 21, 2010, USAA brought suit as Adelman's subrogee against the Contractors and the Mission (jointly, the "defendants") in New York State Supreme Court.
USAA alleged that the Mission had violated that section of the Building Code by, among other things, "failing to shore up the common wall."
On July 28, 2010, the Mission moved to dismiss the Amended Complaint pursuant to Federal Rule of Civil Procedure 12(b)(1),
On November 17, 2010, the District Court granted the motion to dismiss in part, denied it in part, and held that the Mission was not entitled to sovereign immunity.
We have jurisdiction to hear this interlocutory appeal because the District Court's November 17, 2010 order denying, on the ground of sovereign immunity, the Mission's motion to dismiss the Amended Complaint is immediately appealable under the collateral order doctrine.
We review "de novo the district court's conclusions of law regarding jurisdiction under the FSIA."
The FSIA "provides the sole basis for obtaining jurisdiction over a foreign state in the courts of this country."
USAA argues that three exceptions to the FSIA bestow subject matter jurisdiction over the Mission in this case: (1) the "tortious activity" exception,
The tortious activity exception to the FSIA "permits courts to exercise jurisdiction over foreign sovereigns where the plaintiff seeks money damages `for ... damage to or loss of property, occurring in the United States and caused by the tortious act or omission of [the] foreign state....'"
The omission alleged in this case is the Contractors' failure to "shore up" the party wall between the Mission's property and the adjoining townhouse, owned by Adelman.
Section 3309.8 of the New York City Building Code imposes upon the "person causing ... construction" within a building the duty to "[m]aintain the structural integrity of [party walls]," and to "take all necessary steps to protect such wall[s]."
The failure to comply with a duty imposed by the Building Code is, at a minimum, evidence of negligence and can give rise to tort liability under New York law.
Our determination that the Building Code imposes a duty of care directly upon the Mission does not end our inquiry. Although New York law imposes on property owners a general duty to maintain their premises in "reasonably safe condition,"
In this case, the relevant inquiry is whether the Mission's duty of care was delegable to its contractors, thereby absolving the Mission itself of tort liability. Because we find that the duty was not delegable, we need not, and do not, address the remaining grounds for liability discussed in Robinson.
Because New York's courts have not specifically determined whether the particular section of the Building Code at issue in this case imposes a delegable or nondelegable duty, we must determine whether "sufficient precedents exist for us to make a prediction of how the New York Court of Appeals would decide the question."
Under New York law, "a duty will be deemed nondelegable when the responsibility is so important to the community that the employer should not be permitted to transfer it to another."
As stated above, see text at note 7, Section 3309.8 of the Building Code requires that "[w]hen any construction or demolition operation exposes or breaches an adjoining wall, including ... party walls ... the person causing the construction or demolition operation shall ... (1) [m]aintain the structural integrity of such walls...."
Section 3309.8 imposes upon the "person causing" the construction the duty to, under specific circumstances, perform a specific task.
We accordingly hold that the Section 3309.8 imposes a nondelegable duty upon owners of buildings who commission construction projects to ensure the structural integrity of an exposed or breached party wall. The Mission's alleged failure to shore up, or otherwise protect, the wall would therefore, if proven, constitute a tort within the meaning of the tortious activity exception to the FSIA.
Having decided that the Mission's alleged failure to shore up the party wall was a tort, we now turn to the "exception to the exception" that allows a foreign state to retain its immunity when the allegedly tortious activity took place during the exercise of a "discretionary function." The discretionary function exception preserves the immunity of a sovereign nation when it would otherwise be abrogated by the tortious activity exception "if two conditions are met: (1) the acts alleged to be negligent must be discretionary, in that they involve an element of judgment or choice and are not compelled by statute or regulation, and (2) the judgment or choice
"[T]he discretionary function rule is designed to prevent `judicial "second-guessing" of ... decisions grounded in social, economic, and political policy [of a foreign state] through the medium of an action in tort.'"
As we held in Coulthurst v. United States, if an action is "compelled by statute or regulation," it is not discretionary for purpose of the discretionary function exception.
We have already held that the Mission's compliance with its duty to ensure the protection of the party wall was specifically compelled by regulation and was nondelegable. Our holding above controls our analysis of the discretionary function exception as well. The Mission's alleged failure to ensure the integrity of the wall constituted a "violat[ion of] the mandatory regulation,"
The Mission argues that the construction, including the failure to shore up the wall, was an activity undertaken to implement its discretionary policy decision to locate its chancery at the Building. In other words, the Mission argues that it is immunized from suit by the FSIA because the accident occurred in the course of construction that implemented this policy decision.
It is true, of course, that the discretionary function exception generally "protect[s] not only the initiation of discretionary activities but also the decisions made about how to implement those activities."
Although, "[i]n some instances," the determination of whether an act or omission involved the exercise of policy judgment "may be ... fraught with difficulty,"
In sum, we reject the Mission's argument that the immunity accorded to its decision to base its operations in a townhouse located at 135 E. 36th Street and to renovate the Building for such use extends to the tort allegedly committed during its implementation of that decision. Although the Mission was not under an obligation to construct the chancery at any particular location (or, for that matter, to construct a chancery at all), once it decided to do so it could not disregard the nondelegable duty of care imposed upon it by the New York City Building Code.
To summarize, we hold:
(2) Because the Mission allegedly breached its nondelegable duty, it may not invoke the shield of sovereign immunity in the Foreign Sovereign Immunities Act to avoid a lawsuit seeking to hold it liable for damage to Adelman's property.
(3) The Mission may not avail itself of the discretionary function exception to the tortious activity exception to the FSIA—the "exception to the exception"—in order to avoid tort liability, because its failure to ensure the structural integrity of the party wall was not discretionary.
Accordingly, the November 17, 2010 order of the District Court is
USAA argues that the Mission's discussion of the merits of the alleged tort is premature and improper. See Robinson, 269 F.3d at 148 (Sotomayor, J., concurring) (arguing that courts dealing with FSIA immunity question should not address merits issues). We have previously made clear that, where a full evaluation of a defendant's claim of FSIA immunity requires a discussion of the merits of the underlying complaint, it is "not remarkable," and indeed, may be "inevitabl[e]," that a district court's evaluation of a defendant's claim of FSIA immunity will require such an "excursion" into the merits of the plaintiff's case. See id. at 143 (majority opinion) ("In making the assessment of whether the plaintiff has alleged actions on the part of the defendant that constitute a tort, the district court may well have taken an excursion into the same legal territory that it would visit in the course of deciding the case on the merits. . . . Courts are .. . regularly called upon to inquire into substantive state or federal law to resolve the threshold question of subject matter jurisdiction under the FSIA"); see also First Fidelity Bank, N.A. v. Gov't of Antigua & Barbuda—Permanent Mission, 877 F.2d 189, 194-95 (2d Cir. 1989) (noting that a dismissal for lack of subject matter jurisdiction in an FSIA case "can look like a decision on the merits").
In this case, as will be discussed more fully below, we must touch upon the merits of USAA's claim in order to confirm that the Mission, rather than its Contractors, was under a duty to protect the party wall.
Cases construing the discretionary function exception in the FSIA draw heavily on case law interpreting a similar exception in the FTCA. See Swarna v. Al-Awadi, 622 F.3d 123, 145 (2d Cir.2010); O'Bryan v. Holy See, 556 F.3d 361, 383-84 (6th Cir.2009) ("[N]ot only does the language of the FSIA discretionary function exception replicate that of the [FTCA], 28 U.S.C. § 2680(a), but the legislative history of the FSIA, in explaining section 1605(a)(5)(A), directs us to the FTCA." (internal quotation marks omitted; second alteration in original)). We therefore draw upon the case law derived from both statutes in analyzing the Mission's entitlement to the discretionary function exception.
