MCLE Article and Self-Assessment Test
The Foreign Sovereign Immunity Act has failed to provide practitioners with a blueprint for resolving conflicts involving foreign nations and their instrumentalities
By Ole R. Sandberg
Ole R. Sandberg is of counsel to Carlsmith Ball, where his practice focuses on international business litigation. He frequently represents foreign governments and government agencies in matters involving immunity issues. He would like to thank Donna A. Martin for her invaluable assistance in preparing this article.
With ever-increasing commercial and noncommercial interaction between nations and the growing participation of foreign governments in activities that may affect the rights of U.S. citizens, disputes before U.S. courts involving foreign sovereign defendants are no longer uncommon. Attorneys in the United States may well find themselves, at least once in their careers, representing a foreign sovereign or its adversary in a transaction or in a dispute. When they do, issues of foreign sovereign immunity will be of paramount importance.
Foreign sovereign immunity is a doctrine of international law that limits a court's jurisdiction in civil actions against foreign governmental entities. There is no comprehensive body of international law lending substance to the doctrine,1 nor is there an international tribunal adjudicating disputes over the applicability of foreign sovereign immunity. Instead, each country applies the doctrine in its own fashion.
The United States, unlike most countries,2 has codified its foreign sovereign immunity law. Congress enacted the Foreign Sovereign Immunity Act of 1976 (FSIA)3 with the hope that it would lead to increased certainty and predictability in the resolution of conflicts involving foreign sovereign immunity.4 Unfortunately, the FSIA's complex-and at times impenetrable-structure, along with the pervasive vagueness5 and ambiguity and occasional inconsistency in the act's conceptual framework, have not been conducive to predictability. The subsequent case law shows courts under the strain of having to wrestle with a nearly incomprehensible piece of legislation.
Obtaining a firm grasp of the many and complex ramifications of the foreign sovereign immunity doctrine, as set forth in the FSIA and developed further by the courts, is therefore no easy task. Representing a party involved in a dispute or transaction with a foreign sovereign without adequate preparation, however, is a recipe for disaster. The FSIA is replete with traps for the unwary, and an early decision concerning what may appear to be an inconsequential detail may have fatal procedural consequences at a later stage.6
Examining the doctrine of foreign sovereign immunity in the context of tort claims is useful because it illuminates the interplay of the basic features of the FSIA and the case law that has emerged to interpret it-and litigating tort claims against foreign sovereigns to a successful conclusion is a particularly difficult enterprise.
Defining "Foreign State"
That the FSIA has not had the effect that Congress intended is evident not only from the explosive increase in the number of reported opinions deciding issues of foreign sovereign immunity since the enactment of the FSIA but also from the exasperated comments, obviously heartfelt, that frequently appear in these opinions. Thus one court described the FSIA as "remarkably obtuse…[a] statutory labyrinth with a bizarre structure and…many deliberately vague provisions."7 Other courts have characterized the FSIA as "a constant bane of the federal judiciary"8 and a "Gordian knot."9 Certainly the many litigants who have been lost for years in the procedural maze of the FSIA are likely to be equally unimpressed.10
A major source of these difficulties is the terminological and definitional muddle involving the FSIA's core concept of a "foreign state" and the manner in which the act defines the two relevant subcategories of foreign states. The FSIA's principal use of the term "foreign state" is simply to designate the entire universe of foreign governmental entities entitled to foreign sovereign immunity in one form or another.11 But then, in the guise of a remarkably oblique and circuitous definition of "foreign state,"12 the FSIA proceeds to draw a significant distinction between two subcategories of foreign states that is unnecessarily vague and difficult to apply and in a way that renders the main term, "foreign state," hopelessly ambiguous.
Consider, for this analysis, that the term "foreign sovereign" designates the universe of entities entitled to foreign sovereign immunity. To explain how the ambiguity arises and the problems of interpretation it generates, it is helpful to attempt a rational reconstruction of what the drafters of the FSIA most likely had in mind when they drew a distinction between the two different classes of foreign sovereigns.13 The governmental machinery with which a modern nation interacts with the rest of the world consists of many disparate elements, not all of which necessarily deserve the same level of immunity. Those parts of the machinery that constitute core entities typically include a central government-a head of state, a legislative assembly, and central executive organs such as government cabinets, ministries, and departments of the central civil administration and judicial authorities-and territorial subdivisions, such as provinces, municipalities, and cities, each with its own central government. Outside the core, towards the periphery, are the fringe components of the governmental machinery-directorates and commissions with specific and limited regulatory tasks, and government-owned or -controlled commercial or quasi-commercial entities entrusted with purely commercial or mixed commercial and regulatory functions.
The drafters of the FSIA did not wish to extend exactly the same degree of immunity to all foreign sovereigns and therefore drew a rough distinction within the universe of foreign sovereigns that coincides-at least in part-with the distinction between core governmental entities and fringe governmental entities.14 But for reasons that are difficult to fathom, the drafters used the term "foreign state"-the same term they had already used to designate the entire universe of foreign sovereigns-to designate the core group of foreign sovereigns.15
The FSIA purports to prescribe the sense in which the term "foreign state" is used in the various provisions of the act,16 but its prescription is misleading. In some instances, when the term "foreign state" is used in the act, the term clearly is not used in the sense prescribed by the FSIA.17 Indeed, the courts have frequently struggled to determine whether the term was used in the prescribed sense and have frequently found to the contrary.18 The drafters further compounded the problem by defining the fringe group of foreign sovereign entities as "agencies or instrumentalities of a foreign state," thereby introducing the same ambiguity into that phrase as well.19
To stay as close as possible to the terms and definitions of the FSIA without further propagating the terminological virus it carries, for this analysis a reference to a "foreign state, broadly defined" will denote the entire universe of foreign entities entitled to foreign sovereign immunity. A "foreign state, narrowly defined" will encompass the core governmental entities. The other subcategory of foreign state, broadly defined, is composed of the fringe governmental entities the FSIA refers to as "agencies or instrumentalities of foreign states"20 and will be referred to as "governmental instrumentalities," to choose another non-FSIA term. Governmental instrumentalities typically are commercial enterprises owned by a foreign government, such as national airlines and banks. The term "foreign sovereign," as defined earlier for this analysis, is synonymous with a foreign state, broadly defined.
The many reported cases in which courts were asked to decide whether a subsidiary of a commercial entity owned by a foreign sovereign is itself a foreign sovereign entitled to immunity graphically illustrate the difficulties caused by the imprecise use of the term "foreign state" in the FSIA. This is not an academic issue, because government-owned commercial entities frequently are part of a tiered structure, with one or more intermediate entities in the chain of ownership between the ultimate owner-a foreign state, narrowly defined-and the entity claiming immunity. The FSIA defines "agency or instrumentality of a foreign state" to include "any entity…a majority of whose shares or other ownership interests are owned by a foreign state or political subdivision thereof."21 If the term "foreign state" is used in the sense of a foreign state, broadly defined, encompassing governmental instrumentalities, then a subsidiary of a commercial entity owned by a foreign state, narrowly defined, will itself be a foreign sovereign entitled to immunity. If, on the other hand, "foreign state" is used in the sense of a foreign state, narrowly defined, then a subsidiary of a commercial entity owned by a foreign state, narrowly defined, will not be a foreign sovereign entitled to immunity. Courts faced with this issue have come down on both sides of the fence, with the majority opting for the first alternative.22
The kinds of procedural nightmares that await the plaintiff filing an action under the FSIA are on full display in the Dickensian litigation between Transaero, Inc., a U.S. supplier of aircraft parts, and the Bolivian Air Force (BAF), which has kept the courts of two federal circuits busy for almost 10 years and has so far generated four reported decisions.23 The only significant issue fueling the litigation was whether the BAF was a foreign state, narrowly defined, or a governmental instrumentality. The case began in 1988, when Transaero, to its eternal regret, brought an action in the Eastern District of New York against the BAF to collect the approximately $1 million the company was owed under a long-term supply contract with the BAF. Transaero served the BAF as a foreign governmental instrumentality under 28 U.S.C. Section 1608(b).
Eight years later, after many twists and turns-including a default judgment for Transaero in the Eastern District of New York, followed by enforcement efforts in district court in Washington, D.C.-Transaero had collected a D.C. Circuit decision that held, with a split panel, that the BAF is a foreign state, narrowly defined, and had therefore not been properly served, rendering void the judgment from the Eastern District of New York. In addition, Transaero has a decision from the Second Circuit that, while provisionally upholding the district court's judgment, invites the BAF to appeal once the district court's judgment becomes final. Thus, at the end of 1996, there was no end in sight.
Even worse, if Transaero eventually prevails with respect to the service issue, it will still most likely have a judgment that is unenforceable. In retrospect, serving the BAF at the beginning of the case both as a foreign state, narrowly defined (28 U.S.C. Section 1608(a)) and as a foreign governmental instrumentality (28 U.S.C. Section 1608(b)) may have been the only way Transaero could have bypassed this obstacle course.
Other Procedural Prerogatives
It is important to realize that the FSIA is not merely a grant of immunity from jurisdiction. The act confers on foreign sovereigns many other kinds of procedural prerogatives that have great practical significance. Immunity from civil jurisdiction, however, certainly is the core privilege granted foreign sovereigns under the FSIA. Immunity from jurisdiction is the general rule,24 but the FSIA enumerates certain exceptions,25 two of which are particularly relevant to tort claims. The first, commonly referred to as the commercial activity exception, is an exception for actions based on claims that are related to the foreign sovereign's commercial activities in ways specified in the act.26 The other, known as the noncommercial tort exception,27 is an exception for actions asserting claims predicated on certain noncommercial torts. While tort claims may be asserted against foreign sovereigns under either of these two exceptions,28 the commercial activity exception accommodates a far broader range of tort claims than the noncommercial tort exception. Neither exception from jurisdictional immunity distinguishes between foreign states, narrowly defined, and foreign governmental instrumentalities.
The FSIA also grants foreign sovereigns immunity from enforcement of judgments, but with certain exceptions29 that are considerably narrower than the exceptions from jurisdictional immunity. Thus, in litigation against foreign sovereigns, the maxim "for every wrong there is a remedy" does not apply.30
While the FSIA makes no distinction between foreign states, narrowly defined, and foreign governmental instrumentalities for purposes of jurisdictional immunity, its provisions with respect to immunity from enforcement of judgments are significantly more favorable to the former than to the latter. The property of a foreign state, narrowly defined, generally is subject to execution only if the property is situated in the United States and used for the commercial activity upon which the judgment is based.31 As a practical matter, this means that judgments against foreign states, narrowly defined, based on noncommercial torts are almost never enforceable because, by definition, noncommercial torts are unrelated to commercial activity. Foreign governmental instrumentalities, on the other hand, receive significantly weaker protection from execution. Any property situated in the United States belonging to a foreign governmental instrumentality that is engaged in commercial activity in the United States is subject to execution "regardless of whether the property is or was involved in the act upon which the claim is based."32 However, if the foreign governmental instrumentality is not engaged in commercial activity in the United States, only the property that was used for the commercial activity upon which the claim is based is subject to execution.33
The FSIA also provides foreign sovereigns with immunity from prejudgment attachment, with exceptions that apply to both foreign states, narrowly defined, and foreign governmental instrumentalities. In effect, only the property of a foreign sovereign that is used for commercial activity in the United States is subject to prejudgment attachment-and then only if the foreign sovereign "has explicitly waived its immunity from attachment prior to judgment...."34
Another significant procedural prerogative that a foreign sovereign defendant can claim under the FSIA is the right to a nonjury trial in federal district court. Federal district courts have original jurisdiction concurrent with state courts to adjudicate claims against foreign sovereigns without regard to the amount in controversy.35 If the plaintiff chooses to file in state court, the foreign sovereign defendant may remove the case to federal court.36 Whether the case is filed in federal court or is removed from state court, the foreign sovereign has the benefit of a bench trial.37
The FSIA precludes awards of punitive and exemplary damages against foreign states, narrowly defined.38 This prerogative does not extend to foreign governmental instrumentalities, which are liable for damages, including punitive and exemplary damages, to the same extent as private defendants.39
In addition to these express prerogatives, the FSIA is sprinkled with other provisions that, whether by design or not, further stack the procedural deck in favor of the foreign sovereign defendant. For example, it is difficult to obtain a default judgment against a foreign sovereign, because foreign sovereigns generally will receive protection from default judgments similar to the protection accorded to the U.S. federal government under Rule 55(e) of the Federal Rules of Civil Procedure.40 Not only is it exceptionally burdensome and time-consuming to obtain a default judgment against a foreign sovereign defendant41 but it can be even harder to make such a judgment stick.42
The complex provisions for service of process43 under the FSIA constitute a formidable initial hurdle which has been the bane of many plaintiffs. The FSIA has different service requirements for foreign states, narrowly defined,44 and foreign governmental instrumentalities.45 Attempted service on a foreign state, narrowly defined, by means of a method prescribed for service on a foreign governmental instrumentality often will be invalid, a circumstance that can sometimes lead to disastrous consequences for a plaintiff's case.46
Another advantage for foreign sovereign defendants frequently emerges during the early stages of discovery. The jurisdictional facts47 that will be determinative of the ultimate resolution of the foreign sovereign defendant's immunity claim are often unknown to the plaintiff but are generally easily available to, and are often within the exclusive control of, the foreign sovereign defendant. Nevertheless, because foreign sovereign immunity from jurisdiction "is an immunity from trial and the attendant burdens of litigation, and not just a defense to liability on the merits,"48 courts generally allow only very limited discovery with respect to jurisdictional facts.49
The Noncommercial Tort Exception
In pursuing a tort claim against a foreign sovereign, the plaintiff must first determine whether the claim is properly characterized as a noncommercial tort or a commercial activity-based tort. This determination is crucial because claims based on the noncommercial tort exception face procedural hurdles more numerous and severe than those faced under the commercial activity exception, making the outcome of a dispute depend entirely on how a claim is characterized. The characterization can be difficult, however, even though noncommercial torts and commercial activity-based torts are, at least in theory,50 mutually exclusive. Once again, the FSIA has drawn an imprecise line of demarcation51 between categories, and so, on its face, a tort cause of action may fall within either category.
Noncommercial tort claims under the FSIA are claims for damages "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 acts or omissions of that foreign state or any official or employee of that foreign state while acting within the scope of his office or employment...."52 There is an exception from the noncommercial tort exception for claims "arising out of malicious prosecution, abuse of process, libel, slander, misrepresentation, deceit, or interference with contract rights...."53 For such claims the foreign sovereign retains its immunity. There is no similar exception from the commercial activity exception.54 Consequently, a plaintiff's only hope of prevailing against a foreign sovereign on a claim for "malicious prosecution, abuse of process, libel, slander, misrepresentation, deceit, or interference with contract rights" is to characterize the claim as one that is based on a tort that falls within the commercial activity exception.
Plaintiffs pursuing a noncommercial tort claim almost certainly will have to respond to a sovereign defendant's contention that the alleged tortious act involved "the exercise or performance or the failure to exercise or perform a discretionary function."55 This "discretionary function exception" from the noncommercial tort exception from jurisdictional immunity is similar to, and indeed was modeled after,56 the discretionary function exception found in the Federal Tort Claims Act (FTCA)57-and both exceptions have been interpreted broadly.58 The exception, which applies equally to all foreign sovereigns, constitutes a serious problem for a plaintiff asserting a noncommercial tort claim involving anything more than a physical accident with little or no element of conscious judgment or decision on the part of the foreign government employee or agent who caused the accident. There is no similar discretionary function exception from the commercial activity exception from jurisdictional immunity.
For a court to exercise jurisdiction over a noncommercial tort claim against a foreign sovereign, not only must the injury resulting from the tortious act occur in the United States59 but the entire tort must occur within U.S. territory as well.60 These requirements significantly limit the applicability of the noncommercial tort exception from jurisdictional immunity. Tort claims based on the commercial activity exception are not subject to these requirements.
Finally, a judgment based on a noncommercial tort is effectively unenforceable against foreign states, narrowly defined, because such a tort is, by definition, unrelated to the foreign sovereign's commercial activity. On the other hand, a judgment based on a noncommercial tort against a foreign governmental instrumentality that is engaged in commercial activity in the United States is enforceable against the assets of the foreign governmental instrumentality to the same extent as a judgment based on a tort related to a commercial activity.61 However, if the governmental instrumentality is not engaged in commercial activity in the United States, the judgment is effectively unenforceable.62
The Commercial Activity Exception
The commercial activity exception from sovereign immunity is far more accommodating to a plaintiff pursuing a tort claim against a foreign sovereign than the noncommercial tort exception, but the obstacles that must be overcome are daunting nonetheless.
The commercial activity exception from foreign sovereign immunity deprives foreign sovereigns of their jurisdictional immunity under three sets of circumstances:
1) When the claim is "based upon" commercial activity conducted in the United States by a foreign sovereign.
2) When the claim is based upon an act performed in the United States "in connection" with commercial activity of the foreign sovereign conducted outside the United States.
3) When the claim is based upon an act performed outside the territory of the United States in connection with commercial activity by the foreign sovereign that is conducted outside the United States-and that act causes a "direct effect" in the United States.63
The three clauses of the commercial activity exception have generated an immense body of case law. Apart from trying to make sense of the term "commercial activity," judicial efforts have focused on the interpretation of the phrase "based upon," which occurs in all three clauses, the phrase "in connection with," which occurs in the second and third clauses, and the phrase "direct effect," which occurs in the third clause.
Early cases decided under the FSIA paid scant separate attention to the requirement that a claim had to be "based upon" certain acts or activities in order to fit within the commercial activity exception from jurisdictional immunity. Instead, the courts tended to blend together 1) the "based upon" requirement, 2) the "substantial contact" requirement found in the FSIA's definition of "commercial activity carried on in the United States,"64 and 3) constitutional "minimum contacts" considerations65-and fashioned from these disparate elements a general requirement that there had to be a "material connection" or "nexus" between the plaintiff's tort cause of action and the foreign sovereign's commercial activity.66 This loose standard opened the door to claims having a very tenuous connection both to the foreign sovereign's commercial activity and to the United States.
In 1993, the U.S. Supreme Court considerably tightened the "based upon" requirement in Saudi Arabia v. Nelson.67 The Court held that a claim is "based upon…those elements of a claim that, if proven, would entitle a plaintiff to relief under the theory of the case" and cited with approval a lower court's holding that "an action is based upon the elements that prove the claim, no more, no less."68 Consequently, claims asserted by a U.S. citizen employed by the Saudi government that he had been the victim in Saudi Arabia of certain intentional torts committed by Saudi government agents, including battery, wrongful arrest, and false imprisonment, were not "based upon" the Saudi government's concededly commercial activity of hiring the plaintiff in the United States. At the very least, Nelson means that the mere existence of an ongoing commercial relationship between the plaintiff and a foreign sovereign does not mean that every conceivable tort claim asserted by the plaintiff against the foreign sovereign is based upon the commercial relationship. The Nelson standard appears to have significantly narrowed the scope of the commercial activity exception69 and has been applied to the "based upon" requirement under all three clauses of the commercial activity exception.70
As for efforts to interpret the phrase "in connection with" in the second and third clauses of the commercial activity exception, neither the FSIA nor subsequent case law provides much guidance as to how strong the "connection" between the tortious act and the foreign sovereign's commercial activity must be to divest the foreign sovereign of its jurisdictional immunity. One recent decision holding that the connection must be "causal" and "substantive"71 is not much help.
The "direct effect" requirement in the third clause has, like the "based upon" requirement, given rise to extensive litigation and has been much criticized for its lack of precision.72 Early decisions required the "effect" to be not only "direct" but also "substantial" and "foreseeable."73 In 1992, in Republic of Argentina v. Weltover,74 the U.S. Supreme Court rejected the judicially created requirements of substantiality and foreseeability, requiring only that the effect follow "as an immediate consequence of the defendant's…activity."75 Subsequent decisions have applied "this more lenient standard."76
The commercial activity exception seemingly opens the door to a broad range of tort claims. The exception potentially accommodates all types of business torts,77 claims based on ordinary negligence,78 claims based on product liability79 and numerous other types of torts and tortlike claims.80 Despite this apparent liberality, a careful reading of the case law interpreting and applying the commercial activity exception suggests that few tort claims will satisfy all the necessary requirements.
Even if plaintiffs asserting a tort claim under the commercial activity exception succeed in clearing all the procedural hurdles and then prevail at trial, they face a significant risk that they may be unable to collect on their judgments. If a judgment is against a foreign state, narrowly defined, the plaintiff will have to locate property situated in the United States that was used for the commercial activity upon which the judgment is based-and a foreign state, narrowly defined, is unlikely to have such property. If the judgment is against a foreign governmental instrumentality engaged in commercial activity in the United States, it could be satisfied with property situated in the United States even if the property was not used for the commercial activity on which the claim is based, or for any commercial purpose. Nevertheless, assets subject to execution still may be difficult to find. If the foreign governmental instrumentality is not engaged in commercial activity in the United States, then only property used in the commercial activity upon which the claim is based is subject to execution.81
The difficulties and uncertainties involved in litigating tort claims against foreign sovereigns are so great that everyone who participates in such litigation, whether as a party, an attorney, or a judge, will at some point have to wonder whether the FSIA must be considered a failed experiment. Plaintiffs and their counsel undoubtedly will ponder the seemingly no-better-than-random odds of successfully converting a meritorious claim into a monetary recovery. Defendants and their counsel will marvel at the seemingly inexhaustible arsenal of defensive weapons at their disposal. Judges will be struck by the limited success of their colleagues on the bench in clearing up even the less dense parts of the FSIA's terminological jungle, in spite of an appalling expenditure of time, effort, and resources by all concerned. Certainly everyone will agree that the legislative technique on display in the FSIA is a poor model for future legislation.
1 The European Convention on State Immunity, Council of Europe No. 74 (1972), has had little discernible impact on U.S. practice.
2 There appear to be only two exceptions: the United Kingdom, which enacted its State Immunity Act in 1978, and Singapore, whose State Immunity Act dates from 1979. McKeel v. Islamic Republic of Iran, 722 F. 2d 582, 588 (9th Cir. 1983), cert. denied, 469 U.S. 880, 1055 S. Ct. 243 (1984).
3 The Foreign Sovereign Immunity Act of 1976 (FSIA), Pub. L. No. 94-583, 90 Stat. 2897 (1976). The provisions of the FSIA are codified in various sections of U.S.C. tit. 28. See, e.g.:
- 28 U.S.C. §1330(a), which grants concurrent jurisdiction to the federal district courts in actions against foreign sovereigns and provides, albeit obliquely, for a bench trial in cases filed in federal district courts.
- 28 U.S.C. §1330(b) and §1330(c), which establish the basic conceptual relationship between immunity, subject matter jurisdiction, and personal jurisdiction.
- 28 U.S.C. §1391(f), which determines the venue for actions against foreign sovereigns.
- 28 U.S.C §1441(d), which provides for removal of actions against foreign sovereigns to the district court and deprives plaintiffs of the right to a jury trial in actions removed from state court.
The substantive immunity provisions of the FSIA are found in ch. 97, 28 U.S.C. §§1602-11.
4 See H.R. Rep. No. 1487, 94th Cong. 2d Sess. 7 (1976), reprinted in 1976 U.S.C.C.A.N. 6604, 6605-08.
5 Texas Trading & Milling Corp. v. Federal Republic of Nigeria, 647 F. 2d 300, 302 (2d Cir. 1981), cert. denied, 454 U.S. 1148, 102 S. Ct. 1012 (1982).
6 For an especially poignant example, see Linton v. Airbus Industrie, 30 F. 3d 592, 594, 597 (5th Cir. 1994), cert. denied, 513 U.S. 1044, 115 S. Ct. 639 (1994) (by improvidently stipulating to the citizenship status of one of a large number of plaintiffs, the foreign sovereign defendant triggered remand to state court, thereby forfeiting the right to a bench trial).
7 See Rush-Presbyterian-St. Luke's Medical Center v. Hellenic Republic, 877 F. 2d 574, 576 (7th Cir. 1989), cert. denied, 493 U.S. 937, 110 S. Ct. 333 (1989).
8 Stena Rederi AB v. Comisión de Contratos del Comité Ejecutivo General del Sindicato Revolucionario de Trabajadores, 923 F. 2d 380, 382 (5th Cir. 1991).
9 Texas Trading & Milling Corp., 647 F. 2d at 307.
10 See, e.g., Gerritsen v. Consulado General de Mexico, 989 F. 2d 340 (9th Cir. 1993), cert. denied, 510 U.S. 828, 114 S. Ct. 95 (1993) (remaining claims dismissed after eight years and four reported decisions); Seetransport Wiking Trader v. Navimpex Centrala, 989 F. 2d 572 (2d Cir. 1993) (foreign sovereign immunity issue finally disposed of after five years and two reported decisions); Drexel Burnham Lambert Group, Inc. v. Committee of Receivers for Galadari, 12 F. 3d 317 (2d Cir. 1993), cert. denied, 511 U.S. 1069, 114 S. Ct. 1644 (1994) (nine years and five reported decisions before claims dismissed on foreign sovereign immunity grounds).
11 28 U.S.C. §1602.
12 28 U.S.C. §1603(a). This section provides, with circular logic, a peculiar definition by any standard: "foreign states" include their "subdivisions" and "agencies and instrumentalities." The principal function of the definition may be to announce the distinction between "core" and "fringe" foreign sovereigns, discussed infra in text.
13 Rational reconstruction is necessary because neither the text of the FSIA nor its legislative history provides a coherent key to the legislative intent. Transaero, Inc. v. La Fuerza Aérea Boliviana, 30 F. 3d 148, 151-52 (D.C. Cir. 1994), cert. denied, 513 U.S. 1150, 115 S. Ct. 1101 (1995).
14 Some support for this analysis can be found in Transaero, Inc., id.,30 F. 3d at 151-52, which adopts the position that was advocated by the United States appearing as amicus curiae in the case.
15 28 U.S.C. §1603(a). It is an instructive exercise to go through the FSIA and attempt to determine for each occurrence of "foreign state" the sense in which the phrase is used.
16 Compare 28 U.S.C. §1603(a) with 28 U.S.C. §1608.
17 28 U.S.C. §1603(a) states, in effect, that "foreign state" means foreign state, broadly defined, except in 28 U.S.C. §1608. Nevertheless, there are many occurrences of "foreign state" in the FSIA, apart from those in §1608, in which the term is clearly used to denote a foreign state, narrowly defined. See, e.g., 28 U.S.C. §1603(b)(2); 28 U.S.C. §1605(a)(3); 28 U.S.C. §1605(7)(A); §1605(7)(B); 28 U.S.C. §1606; 2
18 See, e.g., 28 U.S.C. §1603(a)(2) and discussion in text, infra; 28 U.S.C. §1608(b) (compare Antoine v. Atlas Turner, 66 F. 3d 105, 109 (6th Cir. 1995) with Straub v. A.P. Green, 38 F. 3d 448, 454 (9th Cir. 1994)).
19 28 U.S.C. §1603(b).
20 See, e.g., Transaero, Inc. v. La Fuerza Aérea Boliviana, 30 F. 3d 148, 153-54 (D.C. Cir. 1994), cert. denied, 513 U.S. 1150, 115 S. Ct. 1101 (1995).
21 28 U.S.C. §1603(b)(2).
22 Compare In re Air Crash Disaster Near Roselawn, Ind., 96 F. 3d 932, 939-41 (7th Cir. 1996) with Gates v. Victor Fine Foods, 54 F. 3d 1457, 1461-63 (9th Cir. 1995), cert. denied, 516 U.S. 869, 116 S. Ct. 187 (1995). For a similar quandary involving 28 U.S.C. §1608(b), see Antoine, 66 F. 3d at 109.
23 Transaero, Inc. v. La Fuerza Aérea Boliviana, 24 F. 3d 457 (2d Cir. 1994), 30 F. 3d 148 (D.C. Cir. 1994), cert. denied, 513 U.S. 1150, 115 S. Ct. 1101 (1995), 38 F. 3d 538 (2d Cir. 1994), 99 F. 3d 583 (2d Cir. 1996).
24 28 U.S.C. §1604. The exceptions are set forth in §1605(a)(1) through (a)(7) and (b), (c), and (d). There are also exceptions to the exceptions: see, e.g., §1605(a)(5)(A) and (a)(5)(B).
25 Among the exceptions from jurisdictional immunity, only the waiver exception in 28 U.S.C. §1605(a)(1) has significant practical bearing on tort claims.
26 28 U.S.C. §1605(a)(2).
27 28 U.S.C. §1605(a)(5); Cicippio v. Islamic Republic of Iran, 30 F. 3d 164, 165 (D.C. Cir. 1994), cert. denied, 513 U.S. 1078, 115 S. Ct. 726 (1995).
28 The Export Group v. Reef Indus., 54 F. 3d 1466, 1475-76 (9th Cir. 1995), cert. denied, ___ U.S. ___, 119 S. Ct. 1033 (1999).
29 28 U.S.C. §1610.
30 See, e.g., Letelier v. Republic of Chile, 748 F. 2d 790, 798-99 (2d Cir. 1984).
31 28 U.S.C. §1610(a)(2).
32 28 U.S.C. §1610(b)(2).
34 28 U.S.C. §1610(d)(1); S&S Machinery Co. v. Masinexportimport, 706 F. 2d 411, 416 (2d Cir. 1983), cert. denied, 464 U.S. 850, 104 S. Ct. 161 (1983).
35 28 U.S.C. §1330(a).
36 28 U.S.C. §1441(d).
37 Id. A foreign sovereign defendant's right to a bench trial in cases filed in federal district court is based on the language in 28 U.S.C. §1330(a).
38 28 U.S.C. §1606.
40 Commercial Bank of Kuwait v. Rafidain Bank, 15 F. 3d 238, 242 (2d Cir. 1994).
41 28 U.S.C. §1608(e); Practical Concepts v. Republic of Bolivia, 811 F. 2d 1543, 1551 (D.C. Cir. 1987); Amernational Indus. v. Action-Tungsram, Inc., 925 F. 2d 970, 972-75 (6th Cir. 1991), cert. denied, 501 U.S. 1233, 111 S. Ct. 2857 (1991).
42 Amernational Indus., 925 F. 2d at 977-79 (default judgment vacated after five years of litigation).
43 28 U.S.C. §1608.
44 28 U.S.C. §1608(a).
45 28 U.S.C. §1608(b).
46 See, e.g., Transaero, Inc. v. La Fuerza Aérea Boliviana, 30 F. 3d 148, 153-54 (D.C. Cir. 1994), cert. denied, 513 U.S. 1150, 115 S. Ct. 1101 (1995).
47 If the foreign sovereign has immunity, the court has no subject matter jurisdiction. 28 U.S.C. §1330(a). Every fact determinative of immunity is consequently a jurisdictional fact.
48 Rush-Presbyterian-St. Luke's Medical Center v. Hellenic Republic, 877 F. 2d 574, 576 n.2 (7th Cir. 1989), cert. denied, 493 U.S. 937, 110 S. Ct. 333 (1989).
49 Arriba Ltd. v. Petroleos Mexicanos, 962 F. 2d 528, 534 (5th Cir. 1992), cert. denied, 506 U.S. 956, 113 S. Ct. 413 (1992).
50 The Export Group v. Reef Indus., Inc., 54 F. 3d 1466, 1473 (9th Cir. 1995), cert. denied, ___ U.S. ___, 119 S. Ct. 1033 (1999); 28 U.S.C. §1605(a)(5) (dealing with claims that are "not otherwise encompassed in [§1605(a)(2)]…").
51 See 28 U.S.C. §1603(d) and Saudi Arabia v. Nelson, 507 U.S. 349, 113 S. Ct. 1471, 1478 (1993).
52 28 U.S.C. §1605(a)(5).
53 28 U.S.C. §1605(a)(5)(B).
54 The view that no similar exception exists is now the general consensus. See, e.g., discussion in The Export Group, 54 F. 3d at 1473-75.
55 28 U.S.C. §1605(a)(5)(A).
56 Cases decided under the discretionary function exception of the FSIA have relied heavily on decisions construing the analogous discretionary function exception found in the Federal Tort Claims Act. See, e.g., Joseph v. Office of Consulate General of Nigeria, 830 F. 2d 1018, 1026 (9th Cir. 1987), cert. denied, 485 U.S. 905, 108 S. Ct. 1077 (1988).
57 28 U.S.C. §§2671 et seq.
58 Dalehite v. United States, 346 U.S. 15, 34, 35-36, 73 S. Ct. 956 (1953); United States v. S.A. Empresa de Viacao Aérea Rio Grandense (Varig Airlines), 467 U.S. 797, 813, 104 S. Ct. 2755 (1984); Joseph, 830 F. 2d at 1026.
59 28 U.S.C. §1605(a)(5).
60 See, e.g., Frolova v. Union of Soviet Socialist Republics, 761 F. 2d 370, 379 (7th Cir. 1985) ("Congress intended that the tortious act or omission, as well as the injury, occur in the United States.").
61 28 U.S.C. §1610(b).
63 28 U.S.C. §1605(a)(2).
64 28 U.S.C. §1603(e).
65 See, e.g., Vencedora Oceánica Navigación v. Compagnie Nationale, 730 F. 2d 195, 199-203 (5th Cir. 1984).
66 A typical example of this kind of analysis can be found in Gerding v. Republic of France, 943 F. 2d 521, 526-28 (4th Cir. 1991), cert. denied, 507 U.S. 1017, 113 S. Ct. 1812 (1993).
67 Saudi Arabia v. Nelson, 507 U.S. 349, 113 S. Ct. 1471 (1993).
68 Id., 113 S. Ct. at 1477.
69 General Elec. Capital Corp. v. Grossman, 991 F. 2d 1376, 1383-84 (8th Cir. 1993); NYSA-ILA Pension Trust Fund v. Garuda Indonesia, 7 F. 3d 35, 38-39 (2d Cir. 1993), cert. denied, 510 U.S. 1116, 114 S. Ct. 1065 (1994).
70 General Elec. Capital Corp., 991 F. 2d at 1384-85; Federal Ins. Co. v. Richard I. Rubin & Co., Inc., 12 F. 3d 1270, 1287-90 (3d Cir. 1993), cert. denied, 511 U.S. 1107, 114 S. Ct. 2101 (1994).
71 Federal Ins. Co., 12 F. 3d at 1291.
72 Unified World Trade v. Mangyshlakneft Oil, 33 F. 3d 1232, 1237 (10th Cir. 1994), cert. denied, 513 U.S. 1112, 115 S. Ct. 904 (1995) (criticizing the phrase "direct effect" as "hopelessly ambiguous").
73 See, e.g., United States v. Moats, 961 F. 2d 1198, 1206 (5th Cir. 1992).
74 Republic of Argentina v. Weltover, Inc., 504 U.S. 607, 112 S. Ct. 2160 (1992).
75 Id., 112 S. Ct. at 2168.
76 Walter Fuller Aircraft Sales, Inc. v. Republic of Philippines, 965 F. 2d 1375, 1387 (5th Cir. 1992).
77 Gerding v. Republic of France, 943 F. 2d 521, 527 (4th Cir. 1991), cert. denied, 507 U.S. 1017, 113 S. Ct. 1812 (1993).
78 Filus v. Lot Polish Airlines, 907 F. 2d 1328, 1329 (2d Cir. 1990).
79 Vermeulen v. Renault, USA, 985 F. 2d 1534, 1543-44 (11th Cir. 1993), cert. denied, 508 U.S. 907, 113 S. Ct. 2334 (1993).
80 See, e.g. Holden v. Canadian Consulate, 92 F. 3d 918 (9th Cir. 1996) (age and sex discrimination claims); Gould, Inc. v. Mitsui Mining & Smelting Co., 947 F. 2d 218 (6th Cir. 1991) (misappropriation of trade secrets).
81 28 U.S.C. §1610(b).
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