First decision of the Term is a unanimous one in Foreign Sovereign Immunities Act case
on Dec 1, 2015 at 2:50 pm
On the first day of the new Term, the Justices heard oral arguments in the case of Carol Sachs. The California woman was seeking to hold the Austrian national railroad liable in U.S. courts for the serious injuries that she suffered when she fell while attempting to board a train operated by the railroad in Innsbruck, Austria. Today, the Court ruled unanimously that Sachs’s lawsuit cannot go forward, in a brief decision by Chief Justice John Roberts that does not appear to break much new ground in the sometimes complex area of foreign sovereign immunity.
A federal law, the Foreign Sovereign Immunities Act, bars most lawsuits against foreign states and their agencies unless one of several exceptions to the act applies. The specific question before the Court in Sachs’s case was whether her lawsuit fell within the FSIA’s “commercial activity” exception, which allows lawsuits when “the action is based upon a commercial activity carried on in the United States by a foreign state.”
Sachs argued that the “commercial activity” exception applied, so that she could sue the railroad in U.S. courts, because her lawsuit was “based upon” her purchase of a Eurail pass in the United States from a travel agency based in Massachusetts. But that argument, the Justices all agreed, was foreclosed by the Court’s 1993 decision in a lawsuit brought by an American couple against the Saudi Arabian government for its alleged mistreatment of the husband while he was employed at a government-owned hospital there. The Court rejected the couple’s argument that the “commercial activity” exception applied because their suit was “based upon” the Saudi government’s actions in recruiting the husband in the United States. In that case, the Court explained today, it “zeroed in on the core of their suit: the Saudi sovereign acts that actually injured” the couple.
Applying that same principle to Sachs’s case, the Court easily concluded that “the conduct constituting the gravamen of Sachs’s suit plainly occurred abroad. All of her claims,” the Court explained, “turn on the same tragic episode in Austria, allegedly caused by wrongful conduct and dangerous conditions in Austria, which led to injuries suffered in Austria.” The Court was unconvinced by Sachs’s argument that it should look beyond events in Austria because some of her claims “involve at least some wrongful action in the United States” – for example, a failure to warn her when she purchased the Eurail pass in the United States about dangerous conditions at the train station in Austria. The Court countered that, “under any theory of the case that Sachs presents,” “there is nothing wrongful about the sale of the Eurail pass standing alone.” The Court also declined to consider Sachs’s argument that her lawsuit was based not simply on the sale of the Eurail pass, but also on the railroad’s “overall commercial railway enterprise,” because it was not raised in the lower court.
Because the Court decided Sachs’s case on the ground that it was not “based upon” commercial activity in the United States, it did not reach another question that it had agreed to review: whether the U.S. travel agency’s sale of the Eurail pass to Sachs could be attributed to the railroad at all. Given the ubiquity of Internet transactions, a ruling on that issue could have been quite significant. But particularly when the Court took pains in a footnote to emphasize that its ruling in this case was fairly limited, today’s decision at first blush appears less momentous than we might have expected when the Court agreed to take the case on earlier this year.
