Johnson v. Aramco Services Co, et al

United States Court of Appeals
Fifth Circuit
F I L E D
May 31, 2005
Charles R. Fulbruge III
Clerk
In the
United States Court of Appeals
for the Fifth Circuit
_______________
m 04-20557
Summary Calendar
_______________
PETER BERNARD JOHNSON,
ON BEHALF OF HIMSELF AND ALL PERSONS SIMILARLY SITUATED,
Plaintiff-Appellant,
VERSUS
ARAMCO SERVICES COMPANY; SAUDI ARABIAN OIL COMPANY,
Defendants-Appellees.
_________________________
Appeal from the United States District Court
for the Southern District of Texas
m 4:04-CV-642
_________________________

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ON PETITION FOR REHEARING
Before DAVIS, SMITH, and DENNIS,
Circuit Judges.
JERRY E. SMITH, Circuit Judge:*
The petition for rehearing is GRANTED.
The opinion, 120 Fed. Appx. 547 (5th Cir.
2005), is WITHDRAWN, and the following
opinion is substituted:
* * *
Peter Johnson appeals the dismissal, for
want of subject matter jurisdiction, of his age
discrimination suit. Because Johnson cannot
allege facts sufficient to sustain a cause of ac-
tion against this defendant, we affirm.
I.
Johnson, while fifty-seven years old, at-
tended a job fair in Houston hosted by Aramco
Services Company (“ASC”) and applied
through ASC for a job as a Seismic Field Crew
Supervisor working in Saudi Arabia with
Saudi Arabian Oil Company (“SAO”). SAO is
a Saudi Arabian entity with its principal office
in Dhahran, Saudi Arabia, and ASC, SAO’s
wholly-owned subsidiary, is incorporated in
Delaware. ASC states that it provides SAO
with a range of services, including assistance
with recruiting.
ASC apparently recruitsSSalbeit infrequent-
lySSfor entities other than SAO. Support for
this is found in the record in the form of
ASC’s letter to the Equal Employment Oppor-
tunity Commission (“EEOC”) in which it
states, “ASC, among others, recruits employ-
ees for positions with the Saudi Arabian Oil
Company (‘Saudi Aramco’) and infrequently
recruits for other entities.” Johnson’s unre-
futed affidavit asserts that an ASC employee
informed him that ASC acts as a recruiter for
additional entities including its own subsidiar-
ies.
According to Johnson, he was later in-
formed that he would not be selected for the
job, allegedly because of his advanced age. He
filed a complaint with the EEOC, was granted
a right to sue letter, and sued ASC and SAO
alleging, inter alia, violations of the Age
Discrimination in Employment Act (“ADEA”),
29 U.S.C. § 621 et seq. ASC moved for
dismissal based on a lack of subject matter
jurisdiction, pursuant to FED. R. CIV. P. 12-
(b)(1), or alternatively for summary judgment,
arguing “the court cannot apply extra-territori-
ally the ADEA . . . to a foreign corporation
who employs U.S. citizens to work abroad.”1
The district court summarily granted the mo-
tion to dismiss “with prejudice, for lack of
jurisdiction.”
II.
We review de novo a dismissal for want of
subject matter jurisdiction. See Ramming v.
United States, 281 F.3d 158, 161 (5th Cir.
2001).
Lack of subject matter jurisdiction may be
found [on] any one of [the following bas-
es]: (1) the complaint alone; (2) the com-
plaint supplemented by undisputed facts
* Pursuant to 5TH CIR. R. 47.5, the court has de-
termined that this opinion should not be published
and is not precedent except under the limited cir-
cumstances set forth in 5TH CIR. R. 47.5.4.
1 That this logic indisputably applies with re-
spect to SAO, Johnson does not disagree, and he
consented to the dismissal of his claims against
SAO.

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evidenced in the record; or (3) the com-
plaint supplemented by undisputed facts
plus the court’s resolution of disputed
facts. . . . In examining a Rule 12(b)(1)
motion, the district court is empowered to
consider matters of fact which may be in
dispute. Ultimately, a motion to dismiss for
lack of subject matter jurisdiction should be
granted only if it appears certain that the
plaintiff cannot prove any set of facts in
support of his claim that would entitle
plaintiff to relief.
Id.
III.
The ADEA provides, in part, that “[i]t shall
be unlawful for an employment agency to fail
or refuse to refer for employment, or other-
wise to discriminate against, any individual
because of such individual’s age, or to classify
or refer for employment any individual on the
basis of such individual’s age.” 29 U.S.C.
§ 623(b). Bridling this proposition is the no-
tion that no federal statute applies extra-terri-
torially unless Congress has expressly indi-
cated its intent for such an application. See,
e.g., EEOC v. Arabian Am. Oil Co., 499 U.S.
244, 248 (1991). This canon of statutory con-
struction “serves to protect against unintended
clashes between our laws and those of other
nations which could result in international
discord.” Id. The ADEA does not evince any
such intent; to the contrary, the plain language
of § 623(h)(2) generally prohibits such appli-
cations. Age discrimination claims, conse-
quently, are not cognizable with respect to for-
eign corporations who employ American citi-
zens to work aborad.2
Based on the presumption against extra-ter-
ritorial application, even Johnson concedes
that SAO is not a covered employer under the
ADEA. Nevertheless, because ASC is a U.S.
corporation, the same principle does not nec-
essarily immunize it from suit.
Johnson asserts that ASC, functioning as an
employment agency, may be liable for its own
discriminatory practices under 29 U.S.C.
§ 623(b). Johnson’s complaint avers that
ASC, through its screening and referral pro-
cess that classified him according to his age,
violated the ADEASSindependently of SAO’s
discriminatory practices.
ASC correctly notes, however, that SAO is
not a covered employer under the ADEA.
Consequently, goes the argument, recruiting
organizations such as ASC cannot be consid-
ered an employment agency for purposes of
the act if the foreign corporation for whom the
recruiter works is not a covered employer un-
der the ADEA.3
Johnson responds by citing 29 C.F.R.
§ 1625.3, which states that an employment
agency that “regularly procures employees for
at least one covered employer [] qualifies un-
der section 11(c) of the [ADEA] as an em-
ployment agency with respect to all of its
2 See Denty v. SmithKline Beecham Corp., 109
F.3d 147, 150 (3d Cir. 1991) (The ADEA “does
(continued...)
2(...continued)
not apply to foreign nationals working for [U.S.]
corporations in a foreign workplace and it does not
apply to foreign companies which are not con-
trolled by U.S. firms.”).
3 See Brownlee v. Lear Siegler Mgmt. Servs.
Corp., 15 F.3d 976, 978 n.3 (10th Cir. 1994);
Shrock v. Altru Nurses Registry, 810 F.2d 658,
660-61 (7th Cir. 1987); Goswami v. Aramco
Servs. Co., No. H-00-0929, slip op. at 12-14 (S.D.
Tex. Mar. 22, 2001).

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activities whether or not such activities are for
employers covered by the act.” (Emphasis
added.) Consequently, if ASC “regularly” re-
cruits for any covered employer or employers,
the fact that SAO is not a covered employer
will not immunize it from its conduct with
respect to Johnson.
If we were to apply the regulation, we
would need to determine precisely what is
meant by the phrase “regularly procure.” We
need not do so in this case, however, because
when read in light of Congress’s unequivocal
admonition against extra-territorial application
of the ADEA,4 the regulation cannot impose
liability on ASC. Where “Congress has ex-
plicitly left a gap for the agency to fill, there is
an express delegation of authority to the agen-
cy to elucidate a specific provision of the stat-
ute by regulation.” Chevron USA, Inc. v. Nat.
Res. Def. Council, Inc., 467 U.S. 837, 843
(1984). Where no such gap exists, however,
or where the questioned agency regulation is
“manifestly contrary to the statute,” the agency
regulation will not trump the plain language of
the statute. Id.
In this case, 29 C.F.R. § 1625.3, upon
which Johnson relies, is in obvious tension
with the ADEA’s own general prohibition
against its extra-territorial application. See 29
U.S.C. § 623(h)(2). As we noted above, ab-
sent an express indication of Congressional
intent to apply a statute extra-territorially, such
an intent will not be inferred. See Arabian
Am. Oil Co., 499 U.S. at 248. In the case of
the ADEA, this presumption is made con-
clusive by § 623(h)(2)’s express prohibition of
the application of the ADEA “where the em-
ployer is a foreign person not controlled by an
American employer.”
The regulation on which Johnson relies at-
tempts to impose liability in the very sort of
manner that § 623(h)(2) prohibits. If we were
to accept Johnson’s position, the general anti-
age discrimination prohibitions of § 623 would
apply even though the employer is admittedly
foreign and not controlled by an American
employer. Because such a conclusion would
be contrary to the plain text of § 623(h)(2), §
623(b)’s limitations on the activities of em-
ployment agencies cannot apply to ASC.
The EEOC interpretation in question was
first adopted in 1972 by the Department of
Labor and was subsequently adopted by the
EEOC, after notice and comment, as its own
in 1981.5 Section 623(h)(2), limiting the ex-
tra-territorial application of the ADEA, on the
other hand, was not enacted until 1984. Nei-
ther the Department of Labor nor the EEOC,
therefore, had the opportunity to consider
Congress’s admonition against extraterritorial
application of the EEOC when adopting the
questioned regulation. In this case, the plain
language of the statute must be applied irre-
spective of the regulation.
In light of the foregoing, Johnson has failed
to allege facts sufficient to sustain an ADEA
cause of action against ASC. The judgment of
dismissal is therefore AFFIRMED.
4 See 29 U.S.C. § 623(h)(2).
5 See 37 Fed. Reg. 13345 (1972), codified at 29
C.F.R. § 860.36(c) (1973); 46 Fed. Reg. 47726
(1981).

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