#11152 - Foreign Sovereign Immunity - International Law I

Foreign Sovereign Immunity (JURISDICTION)

1. The only way to get subject matter jurisdiction against a foreign sovereign state is via the exceptions codified in the Foreign Sovereign Immunity Act

   1. You would still have to get personal jurisdiction against the defendant.

   2. The Alien Tort Statute WILL NOT provide for jurisdiction. Argentine Republic v. Amerada Hess Shipping Corp.

2. Foreign Sovereign Immunity Act

   1. 28 U.S.C. § 1602 - Findings and declaration of purpose

      1. The Congress finds that the determination by United States courts of the claims of foreign states to immunity from the jurisdiction of such courts would serve the interests of justice and would protect the rights of both foreign states and litigants in United States courts. Under international law, states are not immune from the jurisdiction of foreign courts insofar as their commercial activities are concerned, and their commercial property may be levied upon for the satisfaction of judgments rendered against them in connection with their commercial activities. Claims of foreign states to immunity should henceforth be decided by courts of the United States and of the States in conformity with the principles set forth in this chapter.

   2. 28 U.S.C. § 1603 - Definitions

      1. For purposes of this chapter—

         • (a) A “foreign state” . . . includes a political subdivision of a foreign state or an agency or instrumentality of a foreign state as defined in subsection (b).

         • (b) An “agency or instrumentality of a foreign state” means any entity—

           • (1) which is a separate legal person, corporate or otherwise, and

           • (2) which is an organ of a foreign state or political subdivision thereof, or a majority of whose shares or other ownership interest is owned by a foreign state or political subdivision thereof, and

           • (3) which is neither a citizen of a State of the United States as defined in section 1332 (c) and (e) of this title, nor created under the laws of any third country.

         • (c) The “United States” includes all territory and waters, continental or insular, subject to the jurisdiction of the United States.

         • (d) A “commercial activity” means either a regular course of commercial conduct or a particular commercial transaction or act. The commercial character of an activity shall be determined by reference to the nature of the course of conduct or particular transaction or act, rather than by reference to its purpose.

         • (e) A “commercial activity carried on in the United States by a foreign state” means commercial activity carried on by such state and having substantial contact with the United States.

   3. 28 U.S.C. § 1605 - General exceptions to the jurisdictional immunity of a foreign state

      1. (a) A foreign state shall not be immune from the jurisdiction of courts of the United States or of the States in any case—

         • (1) in which the foreign state has waived its immunity either explicitly or by implication, notwithstanding any withdrawal of the waiver which the foreign state may purport to effect except in accordance with the terms of the waiver;

         • (2) in which the action is based upon a commercial activity carried on in the United States by the foreign state; or upon an act performed in the United States in connection with a commercial activity of the foreign state elsewhere; or upon an act outside the territory of the United States in connection with a commercial activity of the foreign state elsewhere and that act causes a direct effect in the United States;

           • TEST re "commercial activity": If the activity is one in which a private person could engage, it is not entitled to immunity. Texas Trading & Milling Corp. v. Federal Republic of Nigeria

             • The purpose of the contract is irrelevant. Texas Trading & Milling Corp. v. Federal Republic of Nigeria

           • If a government department goes into the market place of the world and buys boots or cement - as a commercial transaction - that government department should be subject to all the rules of the marketplace. Texas Trading & Milling Corp. v. Federal Republic of Nigeria

         • Re "direct effect"

           • In Texas Trading, the court held that there was a direct effect in the United States, that is the financial loss occurred in the United States where (1) the suppliers (who would deliver the cement to the plaintiffs, of whom were trading companies) were to present documents and collect money in the United States, and the breaches by the defendant precluded their doing so, and (2) each of the plaintiffs were an American corporation.

           • In Republic of Argentina v. Weltover, Inc., the Supreme Court held that Argentina's rescheduling of debt payments had a "direct effect" in the United States since New York was the place where the debts had to be repaid.

           • In Voest-Alpine Trading USA Corp. v. Bank of China, the Fifth Circuit held "that a financial loss incurred in the United States by an American plaintiff, if it is an immediate consequence of the defendant's activity, constitutes a direct effect sufficient to support jurisdiction under the third clause of the commercial activity exception to the FSIA."

           • In another case in the Fifth Circuit (Not in materials), the court held that detaining a single ship from entering a port did not constitute a direct effect (absence of one ship direct effect).

         • (3) in which rights in property taken in violation of international law are in issue and that property or any property exchanged for such property is present in the United States in connection with a commercial activity carried on in the United States by the foreign state; or that property or any property exchanged for such property is owned or operated by an agency or instrumentality of the foreign state and that agency or instrumentality is engaged in a commercial activity in the United States;

         • (4) in which rights in property in the United States acquired by succession or gift or rights in immovable property situated in the United States are in issue;

           • A lien is an interest in immovable property. India v. New York

         • (5) not otherwise encompassed in paragraph (2) above, in which money damages are sought against a foreign state for personal injury or death, or damage to or loss of property, occurring in the United States and caused by the tortious act or omission of that foreign state or of any official or employee of that foreign state while acting within the scope of his office or employment; except this paragraph shall not apply to—

           • (A) any claim based upon the exercise or performance or the failure to exercise or perform a discretionary function regardless of whether the discretion be abused, or

             • In Letelier v. Republic of Chili, the court determined that the discretionary function did not apply where the employees of the Republic of Chile, acting within the scope of their employment, committed an assassination, of which was a violation of U.S. law.

             • In contrast, in Risk v. Halvorson, the court determined that the discretionary function exception to jurisdiction did apply to a conspiracy to illegally get the children at issue out of the country and into Norway, notwithstanding the knowing violation of U.S. law. The court stated that "it cannot be said that every conceivable illegal act is outside the scope of the discretionary function exception."

               • The distinction here seems to be the gravity of the violation of law. Where the violation is severe, such as with respect to murder or an assassination, it is more likely that this exception will not apply.

           • (B) any claim arising out of malicious prosecution, abuse of process, libel, slander, misrepresentation, deceit, or interference with contract rights; or

         • (6) in which the action is brought, either to enforce an agreement made by the foreign state with or for the benefit of a private party to submit to arbitration all or any differences which have arisen or which may arise between the parties with respect to a defined legal relationship, whether contractual or not, concerning a subject matter capable of settlement by arbitration under the laws of the United States, or to confirm an award made pursuant to such an agreement to arbitrate, if

           • (A) the arbitration takes place or is intended to take place in the United States,

           • (B) the agreement or award is or may be governed by a treaty or other international agreement in force for the United States calling for the recognition and enforcement of arbitral awards,

           • (C) the underlying claim, save for the agreement to arbitrate, could have been brought in a United States court under this section or section 1607, or (D) paragraph (1) of this subsection is otherwise applicable.

      2. (b) A foreign state shall not be immune from the jurisdiction of the courts of the United States in any case in which a suit in admiralty is brought to enforce a maritime lien against a vessel or cargo of the foreign state, which maritime lien is based upon a commercial activity of the foreign state: Provided, That—

         • (1) notice of the suit is given by delivery of a copy of the summons and of the complaint to the person, or his agent, having possession of the vessel or cargo against which the maritime lien is asserted; and if the vessel or cargo is arrested pursuant to process obtained on behalf of the party bringing the suit, the service of process of arrest shall be deemed to constitute valid delivery of such notice, but the party bringing the suit shall be liable for any damages sustained by the foreign state as a result of the arrest if the party bringing the suit had actual or constructive knowledge that the vessel or cargo of a foreign state was involved; and

         • (2)...