457 U.S. 176, 102 S. Ct. 2374 (1982)
Petitioner Sumitomo Shoji America, Inc., is a New York corporation and a wholly owned subsidiary of Sumitomo Shoji Kabushiki Kaisha, a Japanese general trading company or sogo shosha.1 Respondents are past and present female secretarial employees of Sumitomo. All but one of the respondents are United States citizens; that one exception is a Japanese citizen living in the United States.2
Respondents brought this suit as a class action claiming that Sumitomo's alleged practice of hiring only male Japanese citizens to fill executive, managerial, and sales positions violated both 42 U.S.C. § 1981 and Title VII of the Civil Rights Act of 1964.3 Prior to bringing this suit, respondents each filed timely complaints with the Equal Employment Opportunity Commission.4 The EEOC issued right to sue letters to the respondents on October 27, 1977.5 This suit was filed on November 21, 1977.6
Without admitting the alleged discriminatory practice, Sumitomo moved under Rule 12(b)(6) of the Federal Rules of Civil Procedure to dismiss the complaint.7 Sumitomo's motion rested on two grounds: discrimination on the basis of Japanese citizenship does not violate Title VII or § 1981, and Sumitomo's practices are protected under Article VIII(1) of the Friendship, Commerce and Navigation Treaty between the United States and Japan.8 The District Court dismissed the § 1981 claim, holding that neither sex discrimination nor national origin discrimination are cognizable under that section.9 The court refused to dismiss the Title VII claims, however; it held that because Sumitomo is incorporated in the United States it is not covered by Article VIII(1) of the Treaty.10 The District Court then certified for interlocutory appeal to the Court of Appeals under 28 U.S.C. § 1292(b) the question of whether the terms of the Treaty exempted Sumitomo from the provisions of Title VII.11
The Court of Appeals reversed in part.12 The court first examined the Treaty's language and its history and concluded that the Treaty parties intended Article VIII(1) to cover locally incorporated subsidiaries of foreign companies such as Sumitomo.13 The court then held that the Treaty language does not insulate Sumitomo's executive employment practices from Title VII scrutiny.14 The court concluded that under conditions in which Japanese citizenship is a bona fide occupational qualification for high-level employment with a Japanese-owned domestic corporation, Sumitomo's practices might thus fit within a statutory exception to Title VII.15 The court remanded for further proceedings.16
The Supreme Court granted certiorari to decide whether Article VIII(1) of the Friendship, Commerce and Navigation Treaty between the United States and Japan provides a defense to a Title VII employment discrimination suit against an American subsidiary of a Japanese company.17
Whether Article VIII(1) of the Friendship, Commerce and Navigation Treaty between the United States and Japan provides a defense to a Title VII employment discrimination suit against an American subsidiary of a Japanese company?18
Article VIII(1) permits companies of either Party to engage executive personnel of their choice within the territories of the other Party.19 Article XXII(3) defines companies as those constituted under the laws and regulations within the territories of either Party and deems them companies thereof.20 The Treaty therefore extends Article VIII(1) rights only to companies of Japan operating in the United States and companies of the United States operating in Japan.21
No. The facts establish that Sumitomo Shoji America, Inc. is a New York corporation and a wholly owned subsidiary of a Japanese trading company.22 Respondents, past and present female secretarial employees, filed a class action alleging that Sumitomo hired only male Japanese citizens for executive, managerial, and sales positions in violation of Title VII.23 They exhausted administrative remedies by filing timely EEOC complaints, received right-to-sue letters on October 27, 1977, and commenced suit on November 21, 1977.24 Sumitomo moved under Rule 12(b)(6) to dismiss on the ground that Article VIII(1) protected its employment practices.25
The District Court rejected that defense because Sumitomo is incorporated in the United States.26 The Court of Appeals reversed in part on the scope of the Treaty but the Supreme Court granted certiorari to resolve the coverage question.27 Because Sumitomo was constituted under New York law, it is a company of the United States under the plain language of Article XXII(3) and therefore cannot invoke Article VIII(1).28 Both the Japanese Ministry of Foreign Affairs and the United States Department of State confirm that locally incorporated subsidiaries are not covered.29
The Treaty grants national treatment to such subsidiaries as domestic companies rather than superior rights as foreign companies.30 Consequently Article VIII(1) supplies no defense to the Title VII claims.31
Article VIII(1) does not provide a defense to the Title VII employment discrimination suit.32
Whether a corporation constituted under the laws of New York but wholly owned by a Japanese company is a company of Japan under Article XXII(3) of the Treaty?33
Article XXII(3) states that companies constituted under the laws and regulations within the territories of either Party shall be deemed companies thereof and shall have their juridical status recognized within the territories of the other Party.34 Nationality is determined by place of incorporation, not by the nationality of controlling shareholders.35
No. Sumitomo Shoji America, Inc. is a New York corporation even though it is wholly owned by a Japanese parent.36 The Treaty text fixes corporate nationality at the place of constitution under local law.37 Treating ownership as controlling would render other Treaty provisions incoherent, including those addressing companies controlled by nationals of the other Party.38 The negotiating history and postwar purpose of the Friendship, Commerce and Navigation Treaties confirm that locally incorporated subsidiaries receive national treatment as domestic entities rather than alien-entity protections.39
Both signatory governments agree that a New York subsidiary is not a company of Japan.40 The Court of Appeals erred in looking beyond the plain language to the ownership structure.41 Therefore the corporation is a company of the United States under Article XXII(3) and is not a company of Japan.42
A corporation constituted under the laws of New York but wholly owned by a Japanese company is not a company of Japan under Article XXII(3) of the Treaty.43