International Judicial Monitor
Published by the International Judicial Academy, Washington, D.C., with assistance from the
American Society of International Law

Summer 2010 Issue

General Principles of International Law

Foreign Sovereign Immunity in the United States

General Principles of International Law By: Carolyn Dubay, Associate Editor, International Judicial Monitor

Foreign sovereign immunities are a complicated mixture of international and domestic law, and depend on the nature of the proceedings (criminal or civil), the nature of the defendant (individual or government agency or instrumentality), as well as the nature of the conduct (government functions or private conduct).  Immunities may be derived from customary international law, treaties, or domestic statutory law.  In the United States, immunities for foreign governments and government instrumentalities in civil cases are governed by the Foreign Sovereign Immunities Act of 1976, 28 U.S.C. § 1602 et seq.  There is still considerable ambiguity, however, as to the scope of immunities for heads of state (present and former) and lower level government officials, as well as foreign sovereign immunities in the criminal context.

Throughout most of American history, foreign sovereigns were accorded almost complete immunity from suit in American courts.  In the seminal case of The Schooner Exchange v. M'Faddon, 7 Cranch 116, 137, 3 L.Ed. 287 (1812), Chief Justice Marshall wrote that while “[t]he jurisdiction of the nation within its own territory is necessarily exclusive and absolute,” jurisdiction in American courts has been waived against foreign sovereigns because of the “perfect equality and absolute independence of sovereigns, and [the] common interest impelling them to mutual intercourse, and an interchange of good offices with each other.”  Comity concerns, therefore, ensure that foreign governments are not sued in American courts.

Because the decision as to whether to grant foreign sovereign immunity is intricately woven into U.S. foreign relations, over time American courts developed a practice of deferring to the decisions of the Executive Branch in deciding whether a foreign sovereign would be given immunity from suit in a particular matter.   This practice evolved into a process by which the Executive Branch, through the State Department, requested immunity only in cases involving friendly foreign sovereigns.  In 1952, however, this practice changed dramatically, and the State Department adopted a narrower, or “restrictive” theory of foreign sovereign immunity in the “Tate Letter” (a letter written by Jack B. Tate, then Acting Legal Adviser to the Secretary of State).   Under the "restrictive" theory of foreign sovereign immunity, foreign sovereigns would be immune from suit only if the allegations involved the foreign sovereign's public acts.

Under the Tate Letter procedure, the Executive Branch, acting through the State Department, continued to provide guidance to the courts on when immunity should be accorded.  This practice, unfortunately, led to the frequent exertion of diplomatic pressure on State Department officials by foreign sovereigns seeking immunity from suit. If the foreign sovereign did not act through diplomatic channels to secure immunity, the courts themselves would have to determine whether sovereign immunity existed on a case-by-case basis.

To provide a more uniform framework for the determination of foreign sovereign immunities, in 1976, Congress passed the Foreign Sovereign Immunities Act (FSIA), 28 U.S.C. § 1602 et seq.  The FSIA codifies the restrictive theory of foreign sovereign immunity announced in the Tate Letter, yet also provides a comprehensive framework for the resolution of civil claims against foreign sovereigns in state and federal courts in the United States.  Under the FSIA’s provisions, a foreign state or its instrumentality is immune from suit in the United States unless one of the exceptions provided in the Act are satisfied.  If one of the exceptions to foreign sovereign immunity applies, then under § 1606, "the foreign state shall be liable in the same manner and to the same extent as a private individual under like circumstances." The Supreme Court held in Republic of Austria v. Altmann, 541 U.S. 677, 124 S. Ct. 2240 (2004), that the FSIA applies retroactively to conduct that occurred before the FSIA was enacted in 1976, and further held in Dole Food Co. v. Patrickson, 538 U.S. 468, 123 S. Ct. 1655 (2003) that the status of a government instrumentality is to be determined at the time the alleged conduct occurred.

 Federal district courts have subject matter jurisdiction over claims involving foreign sovereigns under 28 U.S.C. § 1330(a) if one of the exceptions to immunity applies.   In Verlinden v. Central Bank of Nigeria, 461 U.S. 480, 103 S. Ct. 1962 (1982), the Supreme Court held that actions against foreign sovereigns filed in federal courts fall under federal courts’ federal question jurisdiction, as all such claims involve interpretation and application of the FSIA’s provisions.  Claims against foreign sovereigns in federal courts need not meet the requirements for the exercise of the federal courts’ diversity jurisdiction as to citizenship and the amount in controversy.  In Argentine Republic v. Amerada Hess Shipping Corp., 488 U.S. 428, 439, 109 S. Ct. 683 (1989), the Supreme Court held that the FSIA is the exclusive basis for federal court jurisdiction over foreign sovereigns.  If an action is filed against a foreign sovereign or an instrumentality thereof in state court, the action may be removed to federal court under 28 U.S.C. § 1441(d).

Section 1605 identifies the exceptions to foreign sovereign immunity.  The most commonly litigated exception to foreign sovereign immunity is the exception for commercial conduct.  Under this exception, a foreign government is subject to suit as long as the conduct in question is commercial and not governmental in nature, and the commercial conduct causes a direct effect in the United States.  The Supreme Court has held that the issuance of government bonds is commercial activity (see Republic of Argentina v. Weltover, 504 U.S. 607, 112 S. Ct. 2160 (1992), but police abuse (even in response to threats to a government institution’s commercial activity) is not commercial in nature (see Saudi Arabia v. Nelson 507 U.S. 349, 113 S. Ct. 1471 (1993)).  Other exceptions to foreign sovereign immunity in United States courts include waiver of immunity, acts of expropriation, tort claims involving the exercise by government officials of discretionary functions, tort claims arising from acts of state-sponsored terrorism, and disputes over rights in immovable property (explained in detail by the Supreme Court in Permanent Mission of India to the United Nations v. City of New York, 551 U.S. 193, 127 S. Ct. 2352 (2007)).

 An area of significant ambiguity in addressing foreign sovereign immunities in the United States is determining the continued applicability of immunities recognized by Chief Justice Marshall in the Schooner Exchange case as arising under the law of nations. As to foreign heads of state (including high level officials and in certain circumstances, former heads of state), courts considering the issue have held that the FSIA does not apply, and the courts must look to the Executive Branch for guidance under the procedure in place under the Schooner Exchange decision and its progeny for both criminal and civil cases.  See, e.g., United States v. Noriega.  117 F.3d 1206, 1212 (11th Cir. 1997) (head-of-state immunity could attach in criminal case against Panamanian dictator Manuel Noriega “only pursuant to the principles and procedures outlined in The Schooner Exchange and its progeny” under which the Executive Branch either explicitly suggests immunity, expressly declines to suggest immunity, or offers no guidance).

The federal circuit courts are split, however, as to the extent of immunity for lower level government officials acting in their official capacity in civil cases.  Recently, the Second Circuit joined the majority of circuits and decided in In re Terrorist Attacks on September 11, 2001, 538 F.3d 71 (2d Cir. 2008), that an individual official of a foreign state acting in his official capacity is the “agency or instrumentality” of the state, and is protected by the FSIA.  In reaching this decision, the Second Circuit joined the Fourth, Fifth, Sixth, Ninth, and District of Columbia circuits.  The Seventh Circuit, on the other hand, held in Enahoro v. Abubakar, 408 F.3d 877 (7th Cir. 2005), that Congress did not intend to include individual government officials in the grant of sovereign immunity provided under the FSIA.


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