U.S. Supreme Court Discusses Foreign Sovereign Immunities Act in Recent Decision

Earlier this month, the United States Supreme Court decided a case that gave the court occasion to discuss the Foreign Sovereign Immunities Act (the “Act”). The Act is an agreement among nations that limits the liability of foreign governments. The Act generally gives foreign sovereign countries immunity unless the alleged conduct falls within one of the Act’s several exceptions.

In the case, OBB Personenverkehr AG (OBB) v. Sachs, the plaintiff was a California woman who purchased a Eurorail pass over the internet through a U.S.-based travel retailer. In Austria, the plaintiff was attempting to board a train when she fell through a gap between the rail car and the boarding platform. After she fell, a train ran over her legs, requiring the amputation of both her legs. The woman filed suit against OBB, which is wholly owned by the Austrian government.

At trial, OBB sought to dismiss the case against it based on the Act, which generally grants foreign governments immunity from lawsuits. The plaintiff, however, claimed that her case met an exception to the Act’s grant of immunity, specifically that her case “is based upon a commercial activity carried on in the United States by [a] foreign state.”

The Case at Trial

The federal district court hearing the case determined that the case did not fit within the exception to the Act’s general grant of immunity and dismissed the suit against OBB. However, on appeal to the Ninth Circuit Court of Appeals, the case was reversed. The court acknowledged that the relevant language was “based upon,” and arguably the commercial activity at issue here was the sale of the Eurorail pass by the U.S.-based travel agent. However, the court also found that the U.S.-based travel retailer was acting as an “agent” of OBB when the Eurorail pass was sold to Sachs. Because of that relationship, the commercial nature of the transaction between Sachs and the retailer could be attributed to OBB under the common-law theory of agency. OBB then appealed to the U.S. Supreme Court.

The U.S. Supreme Court’s Interpretation of the Act

The U.S. Supreme Court agreed with OBB that the Act should not waive sovereign immunity in this case because the case was not “based upon” any commercial activity that occurred in the United States. The court explained that in order to determine if a case is “based upon” commercial activity, lower courts should look to where the “conduct constituting the gravamen” of the case occurred. Here, the Court determined, the conduct giving rise to the case occurred in Austria. Thus, the case was not “based upon” the commercial transaction that occurred here in the United States. Ultimately, the case against OBB was dismissed because the U.S. courts lacked jurisdiction to hear the case.

Have You Been Injured While Abroad?

If you or a loved one has recently been involved in any kind of slip-and-fall accident that occurred overseas, you may be entitled to monetary compensation based on the negligence of another individual, business, or government. However, federal laws governing claims against foreign governments and entities can be extremely complex, and an experienced attorney should be consulted prior to filing suit. Call one of the skilled personal injury attorneys at the Maryland and Washington D.C. law firm of Lebowitz & Mzhen Personal Injury Lawyers today at 410-654-3600. With decades of experience in federal and state courts, the attorneys at Lebowitz & Mzhen can help guide you through your case from beginning to end.

More Blog Posts:

Two Killed in Glen Burnie Head-On Collision; Alcohol Suspected to Be a Factor, Maryland Accident Law Blog, November 2, 2015.

Marine Struck and Killed in Thurmont by Hit-and-Run Driver, Maryland Accident Law Blog, October 7, 2015.

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