Post by congregatio on Jan 6, 2016 10:42:11 GMT 4
U.S. Supreme Court Rules on Application of Sovereign Immunity Doctrine
The U.S. Supreme Court provided guidance as to when the commercial activities of a foreign state-owned entity are sufficient to deny such entity the benefits of sovereign immunity as provided for under the Foreign Sovereign Immunities Act (the "FSIA"). The FSIA denies sovereign immunity for claims arising out of commercial activities conducted in the United States.
The case before the Court arose out of a personal injury claim brought by an American tourist against a state-owned Austrian railway. The tourist was travelling on the Austrian railway with a Eurail pass purchased from a travel agent based in Massachusetts. The U.S. District Court dismissed the claim on the basis of sovereign immunity. On appeal, the U.S. Court of Appeals for the Ninth Circuit ruled that the sale of the Eurail ticket was imputable to the Austrian railway under traditional agency doctrine. Thus, the Austrian railway was found to have engaged in commercial activity in the United States under the FSIA.
The U.S. Supreme Court reversed the U.S. Court of Appeals decision by focusing upon whether the personal injury claim was based upon the degree of the Austrian railway's alleged commercial activity in the United States. The Court ruled that the United States commercial activity needed to be the "core" activity of the lawsuit. In refusing to deny the application of the FSIA, the Court found that the core activities of the tourist's lawsuit "plainly occurred abroad." The purchase of the Eurail pass in Massachusetts was just one ancillary element of such lawsuit.
OBB Personenverkehr AG v. Sachs, 136 S. Ct. 390 (U.S. Sup. Ct., Dec. 1, 2015)
The U.S. Supreme Court provided guidance as to when the commercial activities of a foreign state-owned entity are sufficient to deny such entity the benefits of sovereign immunity as provided for under the Foreign Sovereign Immunities Act (the "FSIA"). The FSIA denies sovereign immunity for claims arising out of commercial activities conducted in the United States.
The case before the Court arose out of a personal injury claim brought by an American tourist against a state-owned Austrian railway. The tourist was travelling on the Austrian railway with a Eurail pass purchased from a travel agent based in Massachusetts. The U.S. District Court dismissed the claim on the basis of sovereign immunity. On appeal, the U.S. Court of Appeals for the Ninth Circuit ruled that the sale of the Eurail ticket was imputable to the Austrian railway under traditional agency doctrine. Thus, the Austrian railway was found to have engaged in commercial activity in the United States under the FSIA.
The U.S. Supreme Court reversed the U.S. Court of Appeals decision by focusing upon whether the personal injury claim was based upon the degree of the Austrian railway's alleged commercial activity in the United States. The Court ruled that the United States commercial activity needed to be the "core" activity of the lawsuit. In refusing to deny the application of the FSIA, the Court found that the core activities of the tourist's lawsuit "plainly occurred abroad." The purchase of the Eurail pass in Massachusetts was just one ancillary element of such lawsuit.
OBB Personenverkehr AG v. Sachs, 136 S. Ct. 390 (U.S. Sup. Ct., Dec. 1, 2015)