Amicus Curiae Brief — Budha Jam, et al., Petitioners v. International Finance Corporation
Supreme Court briefFeb 14, 2022
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No. 21-995
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In The
Supreme Court of the United States
---------------------------------♦--------------------------------BUDHA JAM, et al.,
Petitioners,
v.
INTERNATIONAL FINANCE CORPORATION,
Respondent.
AND
MANJALIYA IKBAL, et al.,
Petitioners,
v.
INTERNATIONAL FINANCE CORPORATION,
Respondent.
---------------------------------♦--------------------------------On Petition For Writ Of Certiorari
To The United States Court Of Appeals
For The District Of Columbia Circuit
---------------------------------♦--------------------------------BRIEF OF AMICI CURIAE INTERNATIONAL LAW
SCHOLARS IN SUPPORT OF PETITIONERS
---------------------------------♦--------------------------------BEATRICE LINDSTROM
Counsel of Record
TYLER R. GIANNINI
INTERNATIONAL HUMAN RIGHTS CLINIC
HARVARD LAW SCHOOL
6 Everett Street, 3rd Floor
Cambridge, MA 02138
Telephone: (617) 495-9214
Email: blindstrom@law.harvard.edu
================================================================================================================
COCKLE LEGAL BRIEFS (800) 225-6964
WWW.COCKLELEGALBRIEFS.COM
i
TABLE OF CONTENTS
Page
TABLE OF CONTENTS ......................................
i
TABLE OF AUTHORITIES .................................
iii
INTEREST OF AMICI CURIAE .........................
1
SUMMARY OF ARGUMENT ..............................
2
ARGUMENT ........................................................
4
I.
By Substituting its View for That of Congress, the D.C. Circuit Created a New Rule
That Conflates the Immunity Inquiry
with Liability Questions, Leading to Preferential Treatment for Sovereign Commercial Activity in Contravention of the
FSIA’s Text, Purpose, and History ............
4
A. In Immunizing Sovereign Defendants
in Cases Where Similarly Situated
Private Parties Could Be Held Liable
Along with Other Tortfeasors, the D.C.
Circuit’s Decision Runs Contrary to
Ordinary Principles of Liability and
Grants Preferential Treatment to Sovereigns, Ignoring the Explicit Textual
Mandate of § 1606 of the FSIA ............
6
B. In Ignoring § 1606, the D.C. Circuit
Has Undermined the FSIA’s Explicit
and Fundamental Purpose to Enforce
the Restrictive Theory of Sovereign
Immunity ............................................. 10
ii
TABLE OF CONTENTS—Continued
Page
C. The D.C. Circuit’s Ruling Similarly Undermines the FSIA’s Explicit Directive
to Align U.S. Immunity Law with International Law, Which Contradicts
the Circuit’s Position and its Preferential Treatment of Sovereigns ............... 13
II.
By Refusing to Honor International Organizations’ Express Waivers, the D.C. Circuit Has Disregarded Plain Text in Favor
of an Unworkable Test That Creates Incongruence in the Law Governing International Organizations and Foreign States .... 18
A. The IFC Unequivocally Waived its Immunity for Suits Brought in the United
States by Non-Members ...................... 18
B. In Ignoring Express Waivers, the D.C.
Circuit’s Approach Creates Different
Standards for Enforcing Waivers by
International Organizations and Foreign States ........................................... 22
CONCLUSION..................................................... 24
APPENDIX
List of Amici Curiae ............................................ App. 1
iii
TABLE OF AUTHORITIES
Page
CASES
Abelesz v. Magyar Nemzeti Bank, 692 F.3d 661
(7th Cir. 2012)..........................................................23
Aquamar S.A. v. Del Monte Fresh Produce N.A.,
179 F.3d 1279 (11th Cir. 1999) .......................... 13, 23
BAE Sys. Tech. Sol. & Servs. v. Republic of Korea’s Def. Acquisition Program Admin., 884
F.3d 463 (4th Cir. 2018) ...........................................23
Can-Am v. Republic of Trinidad & Tobago, 169
Fed. Appx. 396 (5th Cir. 2006) ................................23
Cass. civ., 10 dicembre 2020, n. 28180 .......................15
Cass. [Court of Cassation] (1st ch.), Oct. 23,
2015, C.14.0322.F/1 .................................................16
Cour de cassation [Cass.] [Supreme Court for
Judicial Matters] crim., Nov. 23, 2004, No. 0484.265 ......................................................................15
Certain Phosphate Lands in Nauru (Nauru v.
Austl.), Preliminary Objections, 1992 I.C.J.
240 (June 26) .............................................................8
Connor v. Great W. Sav. & Loan Ass’n, 447 P.2d
609 (Cal. 1968) ..........................................................9
Corfu Channel (U.K. v. Alb.), Judgment, 1948
I.C.J. 15 (Mar. 25) ......................................................8
Corzo v. Banco Cent. de Reserva del Peru, 243
F.3d 519 (9th Cir. 2001) ...........................................23
Davis v. Nev. Nat’l Bank, 737 P.2d 503 (Nev.
1987) ..........................................................................9
iv
TABLE OF AUTHORITIES—Continued
Page
Estate of Michael Heiser v. Islamic Republic of
Iran [2019] EWHC (QB) 2074 ................................17
Federal Republic of Germany v. Philipp, 141
S. Ct. 703 (2021) ................................................ 12, 13
Fikes v. First Fed. Sav. & Loan Ass’n of Anchorage, 533 P.2d 251 (Alaska 1975) ...............................9
First Nat’l City Bank v. Banco Para El Comercio
Exterior de Cuba, 462 U.S. 611 (1983) ......................7
Genetti v. Caterpillar, Inc., 621 N.W.2d 529
(2001) .........................................................................8
Hertz Corp. v. Friend, 559 U.S. 77 (2010) ...................24
Ivanenko v. Yanunkovich, 995 F.3d 232 (D.C.
Cir. 2021) .................................................................23
Jam v. Int’l Fin. Corp., 139 S. Ct. 759
(2019) ................................................. 3, 18, 22, 23, 24
Jam v. Int’l Fin. Corp., 3 F.4th 405 (D.C. Cir.
2021) ..........................................................................6
Jam v. Int’l Fin. Corp., 860 F.3d 703 (D.C. Cir.
2017) .................................................................. 18, 22
Jurisdictional Immunities of the State (Ger. v.
It.), Judgment, 2012 I.C.J. 99 (Feb. 3) ....................14
Kilburn v. Socialist People’s Libyan Arab Jamahiriya, 376 F.3d 1123 (D.C. Cir. 2004)................. 7, 10
LG and Others v. Rina SpA, EUR-Lex (May 7,
2020) .................................................................. 14, 15
Libra Bank, Ltd. v. Banco Nacional de Costa
Rica, 676 F.2d 47 (2d Cir. 1982) ..............................23
v
TABLE OF AUTHORITIES—Continued
Page
Lutcher v. Inter-American Development Bank,
382 F.2d 454 (D.C. Cir. 1967) ..................................21
Mendaro v. World Bank, 717 F.2d 610 (D.C. Cir.
1983) ........................................................................22
OBB Personenverkehr AG v. Sachs, 577 U.S. 27
(2015) .........................................................................5
Osseiran v. Int’l Fin. Corp., 552 F.3d 836 (D.C. Cir.
2009) ............................................................................ 22
Permanent Mission of India to the United Nations v. City of New York, 551 U.S. 193 (2007) ........12
Rudolph v. First S. Fed. Sav. & Loan Ass’n, 414
So. 2d 64 (Ala. 1982)..................................................9
S.E.C. v. Hughes Capital Corp., 124 F.3d 449 (3d
Cir. 1997) ...................................................................8
Saudi Arabia v. Nelson, 507 U.S. 349 (1993) ....... 4, 5, 6
Steen Estate v. Iran, 2011 ONSC 6464, 2011 CarswellOnt 12470 .......................................................16
T. Garuda Indon., Ltd. v. Australian Competition
& Consumer Comm’n (2012) 247 CLR 240 ..............15
Verlinden B.V. v. Cent. Bank of Nigeria, 461 U.S.
480 (1983) .......................................................... 11, 13
Walker v. Bank of New York, Inc., 1993 CarswellOnt 458 ............................................................16
World Wide Minerals, Ltd. v. Republic of Kazakhstan, 296 F.3d 1154 (D.C. Cir. 2002)................23
Zicherman v. Korean Air Lines Co., 516 U.S. 217
(1996) .......................................................................19
vi
TABLE OF AUTHORITIES—Continued
Page
STATUTES
Foreign Sovereign Immunities Act, 28 U.S.C.
§§ 1602-1611 (1976) ........................................ passim
28 U.S.C. § 1602........................................... 12, 13, 17
28 U.S.C. § 1605(a)(2) ............................................ 4, 5
28 U.S.C. § 1605(a)(7) ................................................7
28 U.S.C. § 1606........................................... 6, 7, 9, 10
International Organizations Immunities Act, 22
U.S.C. § 288a (1945) ..................................................3
RULE
Fed. R. Civ. P. 12(b)(6) ............................................. 6, 10
OTHER AUTHORITIES
74 Am. Jur. 2d Torts (2022) ..........................................8
African Development Bank Articles of Agreement, Aug. 4, 1963, 510 U.N.T.S. 46 ........................21
Antonin Scalia & Bryan A. Garner, Reading
Law (2012).................................................................5
Articles of Agreement, World Bank Group (May
19, 2021), https://www.worldbank.org/en/about/
articles-of-agreement ..............................................21
Asian Development Bank Articles of Agreement,
Aug. 22, 1966, 571 U.N.T.S. 123 ..............................21
vii
TABLE OF AUTHORITIES—Continued
Page
Edward Chukwuemeke Okeke, “Immunities and
Privileges, XIV Annexes of the Specialized
Agencies Convention, Annex VI—International
Bank for Reconstruction and Development
(IBRD),” in The Conventions on the Privileges
and Immunities of the United Nations and its
Specialized Agencies: A Commentary (August
Reinisch ed., 2016) ..................................................20
H.R. Rep. No. 94-1487 (1976) .......................................7
Hazel Fox & Philippa Webb, The Law of State
Immunity (3d ed. 2015) ...........................................15
Int’l Law Comm’n, Draft Articles on Jurisdictional Immunities of States and Their Property, with Commentaries, [1991] 2 Y.B. Int’l L.
Comm’n (Part Two) .................................................15
Int’l Law Comm’n, Draft Articles on Responsibility of States for Internationally Wrongful
Acts, with Commentaries, U.N. Doc. A/56/10
(2001) .........................................................................8
International Bank for Reconstruction and Development Articles of Agreement, Dec. 27,
1945, 60 Stat. 1440 ..................................................20
International Finance Corporation Articles of
Agreement, Dec. 5, 1955, 7 U.S.T. 2197 ............ 18, 19
International Monetary Fund Articles of Agreement, Dec. 27, 1945, 60 Stat. 1401..........................19
James Crawford, International Law and Foreign
Sovereigns: Distinguishing Immune Transactions, 54 Brt. Y.B. Int’l L. 75 (1983) ........................13
viii
TABLE OF AUTHORITIES—Continued
Page
Letter from Jack B. Tate, Acting Legal Adviser,
U.S. Dep’t of State, to Philip B. Perlman, Acting Att’y Gen. (May 19, 1952), reprinted in 26
Dep’t St. Bull. 985 (1952) .................................. 11, 15
Marc B. Feldman, The United States Foreign
Sovereign Immunities Act of 1976 in Perspective: A Founder’s View, 35 Int’l & Comp. L.Q.
302 (1986) ................................................................11
Restatement (Second) of Torts (Am. L. Inst.
1979) ..........................................................................8
The United Nations Convention on Jurisdictional Immunities and Their Property (Roger
O’Keefe & Christian J. Tams eds., 2013) ................13
U.N. Econ. & Soc. Council, Economic Commission
for Africa, Comments and Proposals Received
by the International Bank for Reconstruction
and Development Concerning the Draft Agreement Establishing an African Development
Bank, U.N. Doc. E/CN.14/FMAB/4/Add.5 (July
16, 1963) ..................................................................21
Vienna Convention on the Law of Treaties, May
23, 1969, 1155 U.N.T.S. 331.....................................19
1
INTEREST OF AMICI CURIAE
Amici curiae respectfully submit this brief in support of Petitioners.1 Amici (listed in Appendix) are
scholars of international law with expertise in sovereign and international organization immunity, including under the Foreign Sovereign Immunities Act
(“FSIA”), which also governs international organizations. See 28 U.S.C. §§ 1602–1611 (1976); Jam v. Int’l
Fin. Corp., 139 S. Ct. 759, 768 (2019). Amici, who include scholars with expertise in foreign jurisdictions,
have a strong interest in the accurate and uniform application of the restrictive theory of sovereign immunity and the commercial activity doctrine under the
FSIA. Amici are concerned that among countries that
have adopted restrictive immunity, the United States
would stand alone in allowing sovereigns to use the
commercial activity exception as a shield to escape liability if another actor is the more proximate tortfeasor.
Amici respectfully urge this Court to reconsider the decision below and bring U.S. immunity jurisprudence
back in line with the FSIA’s text and purpose of eliminating preferential treatment for sovereigns involved
in commercial activity.
---------------------------------♦---------------------------------
1
No counsel for any party authored this brief in whole or in
part, and no person or entity other than amici curiae or their
counsel contributed money to the preparation or submission of
this brief. The parties received timely notice and have consented
to this filing.
2
SUMMARY OF ARGUMENT
The animating purpose of the Foreign Sovereign
Immunities Act (“FSIA”), 28 U.S.C. §§ 1602-1611 (1976),
is to remove immunity and preferential treatment for
sovereign entities when they engage in private conduct
such as commercial activity. In other words, sovereigns
acting as private actors should be treated as private
actors. The decision below undermines this raison
d’être of the FSIA while raising an important and unsettled question: whether a sovereign can claim immunity for their commercial activity when a third
party’s conduct may be the more direct cause of a
plaintiff ’s injuries.
The D.C. Circuit’s decision creates a new rule that
conflates a key immunity question (whether the gravamen of the claim against a sovereign is commercial activity) with ordinary liability questions (such as to
what extent the sovereign’s conduct caused the harm).
The effect of the new rule is to give preferential treatment to sovereigns for their commercial activity, which
contravenes the FSIA’s text and explicit purpose, as
well as decades of guidance from Congress, the Executive, and this Court.
Specifically, the lower court impermissibly exempts
sovereigns from ordinary liability regimes in contravention of § 1606’s directive that the FSIA should not be
read to change the principles of liability that would
normally apply to private parties in similar circumstances. The decision also contravenes a second express purpose of the statute, codified in § 1602, of
3
aligning U.S. immunity law with the restrictive theory
of immunity under international law. No other country
known to amici has interpreted the restrictive theory
to afford immunity to a sovereign for commercial acts
because the sovereign is not the principal wrongdoer.
Thus, the lower court’s conflation of the immunity inquiry with ordinary liability concepts is out of step
with international law as well as the text of the statute.
The case also raises a separate important question: whether courts can disregard express waivers.
The lower court ignored the plain text of an international organization’s waiver of immunity. In doing so,
the D.C. Circuit’s rule makes it harder for international organizations to effectuate their intent to waive
than for their constituent states, whose clear, plaintext waivers are given full effect under the FSIA. Such
a result is discordant with this Court’s holding in
Jam v. International Finance Corporation, 139 S. Ct.
759 (2019), that the International Organizations Immunities Act (“IOIA”), 22 U.S.C. § 288a (1945), should
be read “to ensure ongoing parity” with foreign sovereign immunity rules. Jam, 139 S. Ct. at 768.
Amici respectfully urge this Court to grant certiorari to address these two important questions.
---------------------------------♦---------------------------------
4
ARGUMENT
I.
By Substituting its View for That of Congress, the D.C. Circuit Created a New Rule
That Conflates the Immunity Inquiry with
Liability Questions, Leading to Preferential Treatment for Sovereign Commercial
Activity in Contravention of the FSIA’s
Text, Purpose, and History.
The D.C. Circuit’s determination that sovereigns
enjoy immunity for their U.S.-based commercial conduct whenever a third party is more proximate to the
harm creates a new rule that conflates an immunity
inquiry (regarding gravamen) with separate liability
concepts (such as whether and to what extent responsibility falls on a sovereign compared to other wrongdoers). Concepts of immunity and liability are not
synonymous, however. The new rule also runs contrary
to the fundamental purpose of the FSIA: to treat sovereigns the same as private actors when they engage
in private conduct (as specified in § 1602, § 1605, and
§ 1606) and to align U.S. law with the restrictive theory
of sovereign immunity under international law (as
specified in § 1602). Indeed, the D.C. Circuit’s conflation of immunity and liability has resurrected impermissible preferential treatment for sovereigns in explicit
contravention of the FSIA’s text, purpose, and history,
as well as the directive to align with international law.
Under § 1605(a)(2), a court evaluating a claim of
immunity is to inspect the sovereign’s conduct to determine whether the gravamen of the plaintiff ’s claim
against the sovereign is its commercial activity. See
5
Saudi Arabia v. Nelson, 507 U.S. 349, 356–58 (1993)
(holding commercial activity exception does not apply
when core of plaintiffs’ claim against sovereign was its
non-commercial conduct); OBB Personenverkehr AG v.
Sachs, 577 U.S. 27, 35–36 (2015) (holding suit was not
“based upon” sovereign’s commercial activity when
gravamen of suit against sovereign was its unlawful
non-commercial conduct abroad). By requiring that
an “action” against a sovereign be “based upon” its
commercial conduct, § 1605(a)(2) ensures that immunity persists where the alleged commercial conduct is
merely peripheral and the gravamen of the suit
against the sovereign is in fact its public acts. Id.2
What the “based upon” language does not do,
however, is authorize the court to look outside of the
plaintiff ’s claim against the sovereign to determine
whether some other party might be a more suitable defendant. See Nelson, 507 U.S. at 357.3 No precedent instructs courts to transform the gravamen analysis into
an inquiry about a third party’s actions. The D.C. Circuit made precisely this error below. Rather than assess whether it was the commercial conduct of the
2
Moreover, judicial interpretation of § 1605(a)(2) must be
informed by the FSIA’s other provisions and its broader purpose.
See Antonin Scalia & Bryan A. Garner, Reading Law § 4 (2012)
(Presumption Against Ineffectiveness); id. § 24 (Whole Text Canon);
id. § 27 (Harmonious Reading Canon); see also infra Sections
I.A–C.
3
This Court in Nelson noted that “the phrase is read most
naturally to mean those elements of a claim that, if proven, would
entitle a plaintiff to relief under his theory of the case.” Id. (emphasis added).
6
International Finance Corporation (“IFC”) that formed
the basis of the action against it, as instructed by this
Court’s decisions in Sachs and Nelson, the D.C. Circuit
looked beyond the plaintiffs’ claims against the IFC to
hold that the suit was not “based upon” the IFC’s acts
at all, but rather a third party’s. Jam v. Int’l Fin. Corp.,
3 F.4th 405, 408–11 (D.C. Cir. 2021). Where a sovereign
defendant’s actions are not proximate enough to the
harm to create liability, this issue should instead be
addressed under Fed. R. Civ. P. 12(b)(6), just like it
would for any other private actor. Indeed, every other
domestic and foreign court known to amici that applies
restrictive immunity treats the immunity and liability
inquiries separately.
A. In Immunizing Sovereign Defendants
in Cases Where Similarly Situated Private Parties Could Be Held Liable
Along with Other Tortfeasors, the D.C.
Circuit’s Decision Runs Contrary to
Ordinary Principles of Liability and
Grants Preferential Treatment to Sovereigns, Ignoring the Explicit Textual
Mandate of § 1606 of the FSIA.
In creating a new rule that immunizes sovereigns
whenever a third party is more proximate to the harm,
the D.C. Circuit disregarded the plain text of § 1606.
Congress made clear that the FSIA was enacted to
eliminate differential treatment for sovereigns while
also maintaining ordinary principles of liability. The
text of § 1606 unequivocally states that a “foreign state
7
shall be liable in the same manner and to the same extent as a private individual under like circumstances”
with regards to its non-immune conduct. 28 U.S.C.
§ 1606; see also H.R. Rep. No. 94-1487 at 12 (1976)
(“The bill is not intended to affect the substantive law
of liability.”). This Court has affirmed this reading of
the text in no uncertain terms. See First Nat’l City
Bank v. Banco Para El Comercio Exterior de Cuba, 462
U.S. 611, 620 (1983) (“The language and history of the
FSIA clearly establish that the Act was not intended to
affect the substantive law determining the liability of
a foreign state. . . .”).
Of particular importance here is that Congress intended to maintain existing liability regimes for multiple tortfeasors when it adopted the FSIA’s immunity
exceptions. Congress specifically contemplated jurisdiction in a circumstance in which a sovereign may
only be partially liable. H.R. Rep. No. 94-1487 at 12
(“Nor is it intended to affect . . . the attribution of responsibility between or among entities of a foreign
state; for example, . . . whether an entity sued is liable
in whole or in part for the claimed wrong.”); cf. Kilburn
v. Socialist People’s Libyan Arab Jamahiriya, 376 F.3d
1123, 1129 (D.C. Cir. 2004) (finding argument that
§ 1605(a)(7) requires defendant to be the sole cause
“runs afoul of the FSIA’s injunction that a non-immune ‘foreign state shall be liable in the same manner
and to the same extent as a private individual under
like circumstances.’”).
The D.C. Circuit’s holding that the participation of
a third party can shield a sovereign defendant from
8
jurisdiction runs contrary to ordinary principles of liability in contravention of the clear mandate of § 1606.
It is well-established that “[a] person who joins in committing a tort cannot escape liability by showing that
another person is also liable.” 74 Am. Jur. 2d Torts § 64
(2022) (citing S.E.C. v. Hughes Capital Corp., 124 F.3d
449 (3d Cir. 1997); Genetti v. Caterpillar, Inc., 621
N.W.2d 529 (2001)).4 Yet, that is exactly what the D.C.
Circuit’s holding allows sovereign defendants to do.
The decision renders the ordinary liability regimes designed for multiple wrongdoers, see, e.g., Restatement
(Second) of Torts §§ 875–79 (Am. L. Inst. 1979), inapplicable to sovereign defendants even when the sovereign’s wrong is commercial activity in the United
States. Rather than abiding by the clear intent of Congress to make a sovereign defendant open to suit in
such cases, the D.C. Circuit’s ruling effectively immunizes sovereign defendants from liability in any case
where there is a more proximate tortfeasor. This alters
the liability regime for sovereigns so that they are
4
Similarly, it is an established principle of international law
that sovereigns cannot escape liability by showing that another
sovereign is also liable for the alleged wrong. See Int’l Law
Comm’n, Draft Articles on Responsibility of States for Internationally Wrongful Acts, with Commentaries, U.N. Doc. A/56/10,
art. 16 (2001) (recognizing responsibility of sovereign in connection with act of third-party sovereign); Corfu Channel (U.K. v.
Alb.), Judgment, 1948 I.C.J. 15 (Mar. 25) (holding Albania responsible for mine explosion in its territorial waters, even though
it was likely that another party laid the mines); Certain Phosphate Lands in Nauru (Nauru v. Austl.), Preliminary Objections,
1992 I.C.J. 240 (June 26) (holding that Australia could not rely on
actions by other sovereigns, who jointly administered the Nauru
area with Australia, to preclude adjudication of claims against it).
9
treated differently from a private party for the same
private acts,5 which disregards § 1606’s express instruction to treat them the “same.” Thus, by conflating
the gravamen and liability inquiries, the D.C. Circuit
abandons the very principles that the FSIA was expressly designed to maintain.
Ultimately, the D.C. Circuit’s new rule invites
courts at the immunity phase to prematurely determine whether the defendant may or may not be liable.
5
For example, in similar lender liability cases, courts have
developed a nuanced regime to determine liability for negligently
funding and supervising a construction project. While the specific
law to be applied in this case has not yet been determined, courts
across the United States have held that a construction lender may
be liable if the lender took on a role beyond that of the usual
money lender for the benefit of a third party. See, e.g., Connor v.
Great W. Sav. & Loan Ass’n, 447 P.2d 609, 618 (Cal. 1968) (finding
lender liable to third party for construction defects, noting that
lender “not only financed the development . . . but controlled the
course it would take”); Fikes v. First Fed. Sav. & Loan Ass’n of
Anchorage, 533 P.2d 251, 261 (Alaska 1975) (holding that lender,
“having knowledge of a prior equitable interest of a third party,
had a duty to administer the interim construction loan in a conventional manner, with due care”); Rudolph v. First S. Fed. Sav.
& Loan Ass’n, 414 So. 2d 64, 71 (Ala. 1982) (holding trial court
erred in granting summary judgment because lender had assured
plaintiff that lender’s inspections would be sufficient protection to
plaintiffs to replace architect’s approval safeguards); Davis v.
Nev. Nat’l Bank, 737 P.2d 503, 506 (Nev. 1987) (finding bank
liable for failing to investigate plaintiff’s claims of substantial
deficiencies in construction and continuing to distribute loan proceeds to contractor). The D.C. Circuit’s rule effectively eliminates
such liability regimes entirely for sovereigns by exempting them
from lender liability altogether—even when the lending is commercial activity in the United States—creating clear preferential
treatment for sovereign lenders.
10
As the D.C. Circuit has itself previously recognized in
the context of sovereign immunity, “[a]ny concerns
about reaching too far to charge foreign states with the
attenuated impact of their financial activities are better addressed as questions of substantive law.” Kilburn, 376 F.3d at 1129. Allowing such litigation to
proceed to a merits assessment does not mean that
sovereigns will have to go to trial or even face discovery; defendants can use a 12(b)(6) motion to challenge
claims that are too attenuated from their own conduct.
Thus, there are other mechanisms to weed out nonmeritorious cases that protect against a flood of litigation targeting sovereigns and international organizations. This Court should restore the separation of the
gravamen and liability inquiries and ensure that the
express directive in § 1606 is followed.
B. In Ignoring § 1606, the D.C. Circuit Has
Undermined the FSIA’s Explicit and
Fundamental Purpose to Enforce the
Restrictive Theory of Sovereign Immunity.
The D.C. Circuit’s new rule contravenes seventy
years of history and jurisprudence, which have established that sovereigns should receive no special treatment for their commercial activity. The decision
undermines the uncontroverted purpose of the FSIA
as stated in § 1602 and the explicit guidance and
precedent of all three branches of government.
Before 1952, the United States largely gave foreign states absolute immunity. However, the middle of
11
the twentieth century saw “the widespread and increasing practice . . . of governments of engaging in
commercial activities.” Letter from Jack B. Tate, Acting
Legal Adviser, U.S. Dep’t of State, to Philip B. Perlman,
Acting Att’y Gen. (May 19, 1952), reprinted in 26 Dep’t
St. Bull. 985 (1952) [hereinafter Tate Letter]. Recognizing the “unfair advantage” that immunity gave to sovereign entities “in their dealings with the private
sector,” Marc B. Feldman, The United States Foreign
Sovereign Immunities Act of 1976 in Perspective: A
Founder’s View, 35 Int’l & Comp. L.Q. 302, 303 (1986),
a new approach to immunity—allowing private individuals who do business with sovereigns to vindicate
their rights in court—became necessary. Accordingly,
in the Tate Letter of 1952, the U.S. executive branch
adopted the restrictive theory of immunity whereby
sovereigns would be immune only for sovereign acts
(de jure imperii), and not private ones (de jure gestionis).
Still, over the next two decades, courts deferred to
executive branch determinations of immunity, which
occasionally granted immunity for public policy reasons where restrictive theory would not allow, resulting in confusing and inconsistent application of the
theory. Verlinden B.V. v. Central Bank of Nigeria, 461
U.S. 480, 487–88 (1983). To resolve this confusion and
ensure that sovereigns would no longer receive preferential treatment when they act like private parties,
Congress enacted the FSIA in 1976.
Congress explicitly articulated that the Act’s purpose is to conform sovereign immunity determinations
12
with the restrictive theory, under which sovereigns
“are not immune . . . insofar as their commercial activities are concerned.” 28 U.S.C. § 1602. This Court has
repeatedly affirmed this purpose, as well as the importance of aligning interpretation of the immunity exceptions with this purpose. See, e.g., Federal Republic
of Germany v. Philipp, 141 S. Ct. 703, 713 (2021)
(adopting interpretation “more consistent with the
FSIA’s express goal of codifying the restrictive theory,”
and noting that “[m]ost of the FSIA’s exceptions, such
as the exception for ‘commercial activity carried on
in the United States,’ comport with the overarching
framework of the restrictive theory”); Permanent Mission of India to the United Nations v. City of New York,
551 U.S. 193, 199 (2007) (noting Court’s reading of
FSIA’s text aligned with its purpose of codifying restrictive theory).
By adopting a test that directly conflicts with an
uncontested understanding of the core tenet of restrictive theory—to eliminate preferential treatment for
sovereigns involved in commercial activity—the D.C.
Circuit has substituted its view for the explicit directive of the statute. Allowing the D.C. Circuit decision to stand would thus subvert the unmistakable
congressional mandate and this Court’s subsequent
cases interpreting the FSIA.6
6
Furthermore, the D.C. Circuit’s rule would be difficult to
administer, including in cases involving joint sovereign liability
or conspiracies. The ruling thus invites inconsistency that could
well revert the immunity inquiry to a series of ad hoc decisions—
13
C. The D.C. Circuit’s Ruling Similarly Undermines the FSIA’s Explicit Directive
to Align U.S. Immunity Law with International Law, Which Contradicts the
Circuit’s Position and its Preferential
Treatment of Sovereigns.
The D.C. Circuit’s rule also runs afoul of the directive in § 1602 to conform immunity decisions with
the restrictive theory under international law. 28
U.S.C. § 1602; see also Philipp, 141 S. Ct. at 712–13 (referring to international law governing property rights
to interpret FSIA’s expropriation exception); Aquamar
S.A. v. Del Monte Fresh Produce N.A., 179 F.3d 1279,
1294 (11th Cir. 1999) (“Congress intended international law to inform the courts in their reading of the
statute’s provisions.”). International law on the restrictive theory is clear on the question here: the actions of
third parties are irrelevant to the determination of
sovereign immunity.
To determine whether a sovereign is immune, international law asks which of the sovereign’s activities
are the basis of the claim. James Crawford, International Law and Foreign Sovereigns: Distinguishing
Immune Transactions, 54 Brt. Y.B. Int’l L. 75, 94–95
(1983); see also The United Nations Convention on Jurisdictional Immunities and Their Property 67 (Roger
O’Keefe & Christian J. Tams eds., 2013) (observing
the situation Congress specifically enacted the FSIA to avoid. See
Verlinden B.V., 461 U.S. at 488.
14
that, when claim involves sovereign’s commercial and
non-commercial activity, courts inquire as to which
sovereign activity is at the core of the claim). Whether
a third party more directly caused the alleged harm is
a liability question and is distinct from immunity determinations under international law. See Jurisdictional Immunities of the State (Ger. v. It.), Judgment,
2012 I.C.J. 99, ¶ 100 (Feb. 3) (“[W]hether a State is entitled to immunity before the courts of another State is
a question entirely separate from whether the international responsibility of that State is engaged and
whether it has an obligation to make reparation.”).
State practice confirms this approach: No jurisdiction known to amici considers the acts of a third party
in determining the immunity of a sovereign. Instead,
foreign jurisdictions applying international law or interpreting domestic statutes that incorporate international law uniformly ask whether the sovereign’s acts
are commercial without regard to whether a third
party is more responsible.
A recent case decided by the Court of Justice of
the European Union (“CJEU”) is illustrative. In LG
and Others v. Rina SpA, EUR-Lex (May 7, 2020), the
relatives of over 1,000 people killed in a shipwreck
sought compensation from a company acting on behalf of the state of Panama for wrongfully certifying
that the ferry was safe. See id., ¶¶ 14–15. The court,
applying international law, held that the company did
not enjoy sovereign immunity because the classification and certification activities it performed were commercial in nature and not an exercise of a public
15
function. Id., ¶ 49. The court’s reasoning was in no way
affected by the fact that the passengers’ deaths were
more directly caused by the private shipowner’s failure
to provide a timely rescue for the passengers—wrongdoing for which the shipowner was found criminally liable by a separate court.
National courts in countries with well-developed
jurisprudence on restrictive immunity7 uniformly take
the approach of the CJEU in Rina. The following cases
are particularly instructive:
7
•
Italy: Cass. civ., 10 dicembre 2020, n. 28180
(applying CJEU decision in Rina to find no
immunity for commercial activity without regard to third-party shipowner’s conduct that
more directly caused passengers’ deaths);
•
France: Cour de cassation [Cass.] [Supreme
Court for Judicial Matters] crim., Nov. 23,
2004, No. 04-84.265 (focusing immunity analysis in shipwreck case on whether defendant
sovereign’s alleged faulty certificates of seaworthiness were commercial without regard
to third party who was held criminally liable
for failure to service ship);
•
Australia: T. Garuda Indon., Ltd. v. Australian Competition & Consumer Comm’n
(2012) 247 CLR 240 (focusing on whether
For a list of countries involved historically in developing jurisprudence on the restrictive theory, see Hazel Fox & Philippa
Webb, The Law of State Immunity 133–66 (3d ed. 2015); Int’l Law
Comm’n, Draft Articles on Jurisdictional Immunities of States
and Their Property, with Commentaries, [1991] 2 Y.B. Int’l L.
Comm’n (Part Two) 36; Tate Letter.
16
defendant sovereign’s actions were commercial instead of actions of other parties to monopoly and noting that “the definition of ‘commercial
transaction’ fixes upon . . . engagement by the
foreign State”) (emphasis added);
8
•
Belgium: Cass. [Court of Cassation] (1st ch.),
Oct. 23, 2015, C.14.0322.F/1 (focusing, in case
involving multiple sovereign defendants, on
whether a sovereign’s acts as third-party accomplice to private actors were commercial,
and separately assessing whether the acts of
each sovereign defendant satisfied the commercial activity exception, without regard to
which sovereign was more responsible for the
harm);
•
Canada: Steen Estate v. Iran, 2011 ONSC
6464, 2011 CarswellOnt 12470 (holding that
because plaintiff ’s claim was “directed at the
Islamic Republic of Iran . . . not Hezbollah”
immunity analysis considers only Iran’s funding of terrorism,8 despite Hezbollah being more
directly responsible for plaintiff ’s harms); see
also Walker v. Bank of New York, Inc., 1993
CarswellOnt 458 (performing separate sovereign immunity analyses for multiple sovereign defendants (the United States and Bank
of New York), without regard to which sovereign was more directly responsible for the
harm);
Because this decision predates Canada’s enactment of a
terrorism exception to immunity, it reflects Canadian state practice on the commercial activities exception.
17
•
United Kingdom: Estate of Michael Heiser
v. Islamic Republic of Iran [2019] EWHC (QB)
2074 (assessing whether Iran’s sponsorship of
terrorism9 was commercial without regard to
acts of Hezbollah, which directly carried out
terrorist attacks).
Foreign courts applying restrictive theory under
international law thus uniformly assess whether the
conduct for which the sovereign is being sued is commercial to determine whether it enjoys immunity from
that suit, without regard to whether another actor
played a larger role in the alleged harm. By granting
sovereign immunity because it deemed a third party a
more proximate tortfeasor, the D.C. Circuit created a
new rule that conflicts with international law in contravention of § 1602 and the purpose of the FSIA.
This Court should grant certiorari to align the interpretation of the commercial activity exception with
the rest of the FSIA’s text and with the fundamental
and express purpose of the statute: to treat sovereign
entities like private parties when they act like private
parties.
9
The case was decided under the United Kingdom’s commercial activity exception as the United Kingdom does not have a separate terrorism exception to sovereign immunity.
18
II.
By Refusing to Honor International Organizations’ Express Waivers, the D.C. Circuit Has Disregarded Plain Text in Favor
of an Unworkable Test That Creates Incongruence in the Law Governing International Organizations and Foreign States.
The D.C. Circuit failed to recognize the IFC’s express waiver, disregarding the text and drafting history of the IFC’s Articles of Agreement, Dec. 5, 1955, 7
U.S.T. 2197, which clearly convey the IFC’s intent to
waive immunity. In nullifying the IFC’s express
waiver, the court persists in applying an unworkable
“corresponding benefit” test. Moreover, it makes it
harder for international organizations to waive immunity compared to foreign states, a result that creates dissonance with the spirit of this Court’s holding
in Jam that the IOIA “link[s] the law of international
organization immunity to the law of foreign sovereign
immunity, so that the one develops in tandem with the
other.” 139 S. Ct. at 771. This Court should grant certiorari to correct the D.C. Circuit’s “efforts to chart a separate course under the IOIA [that] were misguided
from the start.” Jam v. Int’l Fin. Corp., 860 F.3d 703,
713 (D.C. Cir. 2017) (Pillard, J., concurring).
A. The IFC Unequivocally Waived its Immunity for Suits Brought in the United
States by Non-Members.
Both the text and drafting history of the IFC’s Articles of Agreement plainly convey the organization’s
express waiver of immunity for suits such as this one.
19
The Articles of Agreement provide that “[a]ctions may
be brought against the Corporation only in a court of
competent jurisdiction in the territories of a member
in which the Corporation has an office, has appointed
an agent for the purpose of accepting service of process,
or has issued or guaranteed securities. No actions
shall, however, be brought by members. . . .” IFC Articles of Agreement, art. VI § 3. This provision’s plain
text demonstrates that the IFC contemplated suits by
non-members and consented to the possibility of such
litigation in the United States, where it is headquartered.
The drafting history of the IFC’s Articles affirms
the organization’s intent to waive.10 As part of the
World Bank Group, the IFC has Articles that are identical to those of the World Bank, which in turn were
adapted directly from the Articles of the International
Monetary Fund (“IMF”). Proceedings and Documents
of the United Nations Monetary and Financial Conference (1948), vol. I, at vii. When adapting the IMF’s
charter to the Bank (and IFC), however, the drafters
made a deliberate choice to replace the IMF’s absolute
immunity provision with one expressly permitting
suit in specific fora. Compare International Monetary
10
In interpreting international treaties such as the IFC’s Articles of Agreement, this Court “traditionally consider[s] as aids
to its interpretation negotiating and drafting history (travaux preparatoires).” Zicherman v. Korean Air Lines Co., 516 U.S. 217, 226
(1996); see also Vienna Convention on the Law of Treaties, art.
32, May 23, 1969, 1155 U.N.T.S. 331 (encouraging recourse to
drafting history to “confirm the meaning resulting from” consideration of text and context).
20
Fund Articles of Agreement, art. IX § 3, Dec. 27, 1945,
60 Stat. 1401 (“The Fund . . . shall enjoy immunity
from every form of judicial process except to the extent
that it expressly waives its immunity.”) with International Bank for Reconstruction and Development Articles of Agreement, art. VII § 3, Dec. 27, 1945, 60 Stat.
1440 (“Actions may be brought. . . .”) and IFC Articles
of Agreement, art. VI § 3 (same).
The drafters included a broad immunity waiver
because they deemed it to be strategic for the organization to permit suits by non-members. One of the chief
drafters of the Bank’s Articles explained that its immunity “provision differs from that customarily incorporated into the charters of international public
organizations, which usually confer complete immunity,” because, as a securities marketer, the Bank “believed that it would improve their quality if holders
thereof could establish their rights in the courts in the
case of a dispute with the Bank.” Edward Chukwuemeke Okeke, “Immunities and Privileges, XIV Annexes
of the Specialized Agencies Convention, Annex VI—International Bank for Reconstruction and Development
(IBRD),” in The Conventions on the Privileges and Immunities of the United Nations and its Specialized
Agencies: A Commentary 755, 761 (August Reinisch
ed., 2016).
This intent to broadly waive immunity is also evident in the advice that the World Bank gave to other
development banks that were drafting their own charters. For example, the Bank suggested that the African
Development Bank may want to narrow the scope of
21
its provision “by expressing the cause of action for
which jurisdiction is accepted.” U.N. Econ. & Soc. Council, Economic Commission for Africa, Comments and
Proposals Received by the International Bank for Reconstruction and Development Concerning the Draft
Agreement Establishing an African Development Bank,
¶ 19, U.N. Doc. E/CN.14/FMAB/4/Add.5 (July 16, 1963).
The newer development banks took this advice, providing for “immunity from every form of legal process except in” relation to certain enumerated causes of action.
See African Development Bank Articles of Agreement,
art. 52, Aug. 4, 1963, 510 U.N.T.S. 46; Asian Development Bank Articles of Agreement, art. 50, Aug. 22,
1966, 571 U.N.T.S. 123. The IFC, however, has taken no
steps to amend the waiver provision in its Articles, despite the fact that the Articles have undergone thorough amendment four times since their original
drafting. See Articles of Agreement, World Bank Group
(May 19, 2021), https://www.worldbank.org/en/about/
articles-of-agreement. Given the wide range of language at the drafters’ disposal, the ultimate adoption
of the language “[a]ctions may be brought against the
Corporation” clearly signals a “deliberate choice” by
the drafters, who “must have been aware that they
were waiving immunity in broad terms.” Lutcher v. Inter-American Development Bank, 382 F.2d 454, 457
(D.C. Cir. 1967) (analyzing nearly identical waiver language).
22
B. In Ignoring Express Waivers, the D.C.
Circuit’s Approach Creates Different
Standards for Enforcing Waivers by International Organizations and Foreign
States.
Despite recognizing that the IFC’s Articles of
Agreement “read literally, would seem to suggest a categorical waiver,” the D.C. Circuit nonetheless ignored
the plain text because it deemed that waiving immunity would not confer a benefit on the IFC in this case.
Jam, 860 F.3d at 706. While this Court’s decision in
Jam harmonizes immunity rules for international organizations and foreign states, 139 S. Ct. at 772, the
effect of the D.C. Circuit’s approach is the opposite, creating two divergent standards for making waiver determinations.
Applying the test established in Mendaro v. World
Bank, 717 F.2d 610 (D.C. Cir. 1983), the D.C. Circuit
declined to enforce the IFC’s waiver because allowing
the claim to proceed would not “benefit the organization
over the long term.” Jam, 860 F.3d at 708 (quoting Osseiran v. Int’l Fin. Corp., 552 F.3d 836, 840 (D.C. Cir.
2009)). The Mendaro test asks courts to reach far beyond
the waiver’s plain text to determine whether—in the
court’s independent assessment—waiving immunity in a
particular case would serve the organization’s interest.
Described as “perplexing,” “amorphous,” “lack[ing] a
sound legal foundation,” and “awkward to apply,” this
approach asks judges to “second-guess international
organizations’ own waiver decisions.” Jam, 860 F.3d
at 711 (Pillard, J., concurring); see also id. at 707
23
(majority opinion) (admitting that it is “a bit strange
that it is the judiciary that determines when a claim
‘benefits’ the international organization”). The D.C.
Circuit’s approach is more than “a bit strange”: In substituting the court’s judgment for that of the drafters,
the court completely divorces the waiver’s effect from
the drafters’ intent.
In addition, the rule makes it harder for international organizations to waive immunity than for foreign
states. The D.C. Circuit thus created a discrepancy in
the immunity rules notwithstanding this Court’s guidance in Jam that the two sets of immunity rules should
be interpreted to be “continuously equivalent.” Jam,
139 S. Ct. at 768. In contrast to the Mendaro benefit
test, courts give full effect to foreign states’ plain text
waivers so long as they have “clearly and unambiguously” manifested their intent to waive. See World Wide
Minerals, Ltd. v. Republic of Kazakhstan, 296 F.3d
1154, 1162 (D.C. Cir. 2002). The “touchstone of the
waiver exception” is “that the foreign state ha[s] intended to waive its sovereign immunity.” Ivanenko v.
Yanunkovich, 995 F.3d 232, 240 (D.C. Cir. 2021) (internal citation omitted). Uniformly adopted by courts
across the country,11 this approach asks of judges an
11
See, e.g., Libra Bank, Ltd. v. Banco Nacional de Costa Rica,
676 F.2d 47, 59–60 (2d Cir. 1982); BAE Sys. Tech. Sol. & Servs. v.
Republic of Korea’s Def. Acquisition Program Admin., 884 F.3d
463, 473 (4th Cir. 2018); Can-Am v. Republic of Trinidad & Tobago, 169 Fed. Appx. 396, 402 (5th Cir. 2006); Abelesz v. Magyar
Nemzeti Bank, 692 F.3d 661, 670 (7th Cir. 2012); Corzo v. Banco
Cent. de Reserva del Peru, 243 F.3d 519, 523 (9th Cir. 2001); Aquamar, 179 F.3d at 1292.
24
ordinary task: to engage with the drafters’ intent as
evidenced by plain text, without having to make farreaching assumptions about what claims might benefit
the waiving party.
Given this Court’s guidance in Jam to align the
immunity rules of international organizations and foreign states, as well as this Court’s preference for clear
jurisdictional rules that “remain as simple as possible,”
Hertz Corp. v. Friend, 559 U.S. 77, 80 (2010), this Court
should grant certiorari to correct the D.C. Circuit’s errant approach of disregarding international organizations’ express waivers.
---------------------------------♦---------------------------------
CONCLUSION
For the foregoing reasons, amici urge this Court to
grant petitioners’ writ of certiorari to correct the decision of the court below.
Respectfully submitted,
BEATRICE LINDSTROM
Counsel of Record
TYLER R. GIANNINI
INTERNATIONAL HUMAN RIGHTS CLINIC
HARVARD LAW SCHOOL
6 Everett Street, 3rd Floor
Cambridge, MA 02138
Telephone: (617) 495-9214
Email: blindstrom@law.harvard.edu
February 14, 2022
App. 1
APPENDIX
LIST OF AMICI CURIAE1
George A. Bermann
Jean Monnet Professor of European Union Law
Walter Gellhorn Professor of Law
Director, Center for International Commercial
and Investment Arbitration
Columbia Law School
Arturo J. Carrillo
Clinical Professor of Law
Director, Civil and Human Rights Law Clinic
The George Washington University Law School
Richard Collins
Associate Professor in International Law
University College Dublin
Ireland
Sarah Dávila-Ruhaak
Assistant Professor of Law
Director, International Human Rights Clinic
University of Illinois Chicago School of Law
Constance de la Vega
Professor of Law
Academic Director of International Programs
University of San Francisco School of Law
Diane A. Desierto
Professor of Law and Global Affairs
Notre Dame Law School
1
Affiliations are provided for identification purposes only.
App. 2
William S. Dodge
Martin Luther King, Jr. Professor of Law
John D. Ayer Chair in Business Law
University of California, Davis, School of Law
Carla Ferstman
Law Professor
University of Essex School of Law
United Kingdom
Martin Flaherty
Leitner Family Professor of International
Human Rights Law
Founding Co-Director, Leitner Center of
International Law and Justice
Fordham Law School
Hurst Hannum
Professor of International Law (Emeritus)
Fletcher School of Law and Diplomacy
Tufts University
Jens Iverson
Assistant Professor of Law
Leiden University
The Netherlands
Jan Klabbers
Professor of International Law
University of Helsinki
Finland
Frédéric Mégret
Full Professor and Dawson Scholar
Co-Director, Centre for Human Rights and
Legal Pluralism
Faculty of Law, McGill University
Canada
App. 3
Jordan J. Paust
Professor (Emeritus)
University of Houston Law Center
Riccardo Pavoni
Full Professor of International and European Law
Department of Law, University of Siena
Italy
Naomi Roht-Arriaza
Sullivan Professor and Distinguished
Professor of Law (Emeritus)
University of California, Hastings Law
Pierfrancesco Rossi
Postdoctoral Fellow in International Law
Luiss University, Rome
Italy
Beth Stephens
Distinguished Professor of Law
Rutgers Law School
Jan Wouters
Jean Monnet Chair ad personam
Full Professor of International Law and
International Organizations
Director, Leuven Centre for Global
Governance Studies
Institute for International Law, KU Leuven
Belgium
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.