Jurisdiction (Subject Matter)

• Author: International Law Group

In 1992, a Boeing 727-200 aircraft, registered in the Cayman Islands and owned by Rifaat Al Assad (father of the president of Layale Enterprises, S.A.) of Syria was transported to Jordan where it underwent repairs and service. The estimated cost of repairs was more than $2,000,000. After these estimates were made, Al Assad gifted the aircraft to Jordan.

Jordan then conveyed the aircraft to Prince Talal bin Mohammed and Princess Ghida Talal, both members of Jordan's royal family and diplomats assigned to the U.S. In the months before obtaining the registration the alleged owners entered into an operating agreement with "Arab Wings" and later into a lease agreement with HMS Aviation. According to the lease agreement the alleged owners agreed to provide the aircraft to HMS which in turn agreed to take care of all repairs and enhancements of the aircraft. Pursuant to the agreement, HMS brought the aircraft to the U.S. for servicing.

In 1996 Jordan issued the alleged owners a temporary registration for the aircraft.

While in the United States, Layale Enterprises sued in Texas state court, claiming ownership of the aircraft. HMS Aviation removed the case to federal court based on federal question jurisdiction. The state court ruled that HMS Aviation was not subject to its personal jurisdiction, but that the court did have in rem jurisdiction over the aircraft. HMS filed an interlocutory appeal contesting such jurisdiction.

While the interlocutory appeal was pending, the government of Jordan intervened to assert foreign sovereign immunity as a absolute jurisdictional bar. According to Jordan, the aircraft is operated by Jordan's wholly-owned instrumentality, Arab Wings.

Jordan then removed the case to federal court, and concurrently filed a motion to dismiss. In early 1999, the district court remanded sua sponte to state court because it lacked original jurisdiction for such an action "against" a foreign state, noting that Layale's petition did not name Jordan as a party and therefore the action was not "against" a sovereign.

The district court eventually dismissed this case for lack of subject...