# Amicus Curiae Brief — Permanent Mission of India v. City of NY > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385016_0287%3A12 ## Record - **Collection:** Supreme Court brief - **Document type:** Amicus Curiae Brief - **Published:** January 1, 2007 - **Citation:** 551 U.S. 193 ## Text No. 06-134 ————— SS —————— —————— Hn the Supreme Court of the Chuted States Lili PERAMTANEN TE AEISSION OF INDIA PO TEER UNTIED NATIONS, KEN PoOHNONETS, \ Cyyot NEW YorRK yy. — ACSPOMGCHT On Writ of Certiorari to the United States Court of Appeals For the Second Circuit BRIEF OF THE INFERNATIONAL SIUENTICIPAL LAWYERS ASSOCIATION AND U.S. CONFLRENCE OF MIAVORS AS IVWICTCURLIE IN SLPPORTE OF RESPONDENT CHARLES AL ROdHEEID { ote! of Re car i Woriw J. PINCUS Veaver. Brown, Rowe & VA LLP LYOU KR Street, NU Washington, DC 206 (421 263-3000 LAN KOATEAN ree db Dba AN } tle! / au Sehteread Supreme (our ddvecae IE 17 Wali Stree! Venu Jlaven, C1 0097! >,» b | (thay dv led Ne / C cueing for linticd’ C ur icte BEST AVAILABLE COPY i QUESTION PRESENTED Amici will address the following question: Whether United States courts have jurisdiction under the Foreign Sovereign Immunities Act of 1976 to declare the va- lidity of a tax lien held by a municipal authority for unpaid property taxes imposed on property owned by a foreign na- tion. il TABLE OF CONTENTS Page ey Ge iininidicicicrsiniscininssisneingenvicnsennialeii iv INTEREST OF THE AMICI CURIAE..........cccccccscsessereeeeeresees l INTRODUCTION AND SUMMARY OF TE setiicensesiacesnviiniinntinntatidibintieneiniiniamaminainiiieinnt 2 FETE insitipninecveesiniiintsdnintnsininmnnsiaaniesnemieneaiitonaines 5 I. THE TEXT OF FSIA PLAINLY ENCOMPASSES SUITS TO DETERMINE THE VERRISS © GR CORTE CIB Ue cencssssesercesccsensvesevessessconsoonees 5 Il. CONGRESS ENACTED FSIA RELYING ON CONTEMPORANEOUS MATERIALS MAKING CLEAR THAT THE IMMOVABLE PROPERTY EXCEPTION INCLUDES DISPUTES OVER PROPERTY TAXES. ..........0006 cesses 8 A. A Fundamental Goal Of FSIA Was To Codify The “Restrictive” Theory Of Sovereign Immunity, Which Denies Immunity In Cases Involving “Private” Acts Such As The Ownership Of Real Property. ..2........ccccccseseeeceesereeees 10 B. Based on Representations By The Executive Branch, Congress Expected The Immovable Property Exception To Apply To Litigation “Relating To” Or “With Respect To” Immovable Property, Including Tax BI: cnsisininictnccncetsinnsnninaiidnniniumntasenniennanmnneen 13 C. The Executive Branch Made Clear To Congress That FSIA Was Consistent With International and Domestic Practice..................:00 15 1. Congress Understood FSIA To Be Consistent With The European Convention, Which Contains A Similarly Broad Immovable Property Exception. .............. 15 ili TABLE OF CONTENTS—continued Page 2. The State Department Expressly Advised Congress That Existing U.S. Practice Did Not Grant Sovereign Immunity In Cases Involving Liens For Unpaid Property TRE, cciemeneisncenernsnccnmcenstasbtnasasiunmuiisepennnnesnesnen 18 Il]. POST-ENACTMENT AND CONTEMPORARY PRACTICE SUPPORTS THE INFERENCE THAT FSIA WOULD PERMIT SUITS TO DETERMINE THE VALIDITY OF TAX LIENS. ....... 20 A. The Third Restatement Makes Clear That ’ Foreign States Are Not Immune From Suits For Unpaid Property Taxes. ..........0.erssrecsscsssssesseess 21 B. Since FSIA’s Enactment, Foreign States and International Organizations Have Construed And Applied The Immovable Property TINE CIID orescesencsnsenescsrsensensnsnovennnpecenncoonseoes 23 C. Recent Congressional Appropriations Statutes Show That Congress Still Interprets FSIA To Provide American Courts Jurisdiction Over Property Tax Suits Against Foreign Nations............ 28 D. The United States’ Amicus Brief In Englewood Explicitly States That FSIA Does Not Make Foreign States Immune From Suits og een 28 CRIED erarvecesecesecnsrentmneseunatenenencmnenpensenienatsconsninontees 30 iV TABLE OF AUTHORITIES Page(s) CASES Asociation de Reclamantes v. United Mexican States, 735 F.2d 1517 (D.C. Cir. 1984) ..........cccscccseseseees 4,8, 22 City of Englewood v. Socialist People's Libyan Arab Jamahiriya, 773 F.2d 31 (3d Cir. 1985)........ passim City of New Rochelle v. Republic of Ghana, Republic of Indonesia, and Republic of Liberia, 255 N.Y.S.2d 178 (County Ct. 1964)... eeeeeeseeeees 18, 20 29A C.J.S. Eminent Domain § 200 (1955)......cccccecceeesereeees 7 BS CFB. Tema EDO (IGT access ssncsecscccsocsscesecsssscssssoncese 7 INS v. Cardoza-Fonseca, 480 U.S. 421 (1987) .....ccceccceeseees 3 Lance v. Coffman, 127 S. Ct. 1194 (2007) .......ccceecereeseenes 10 Mallard v. United States Dist. Court, ae eT ciecinieaiiininiiitpininniccsiisscnsondideninnentiosniintions 3 er a eR BI is istrnsicsnntsnapsicnntinigeniepniadinieadaniinnmeseniinte 6 Republic of Austria v. Altmann, 541 U.S. 677 (2004)........... 3 Roby v. Baker, 432 N.Y.S.2d 917 (3d Dept. 1980)............... 7 United States v. Curtiss-Wright Export Co., Be ee SEI creinitenivoiscenenemntinniniegeremacemninenindntioen 9 Verlinden B.V. v. Central Bank of Nigeria, Se I ctihcrnestianeenntninecnisintnssinntiaceenimnnnindion 17 Weilamann v. Chase Manhattan Bank, 192 N.Y.S.2d 469 (Sup. Ct. N.Y. 1959)... cesereeeeeeens 20 TREATIES, STATUTES, RULES AND REGULATIONS Consolidated Appropriations Act of 2005, P.L. No. 108-447, § 543 (2004) .......cccesccecseceseeseesseeeees 28 European Convention on State Immunity, done May 1G, 972, SDS UN. TB. FBI .nccccececcosecsesessosees 4,7, 15, 16 Vv TABLE OF AUTHORITIES—continued Page(s) Foreign Operations, Export Financing, and Related Programs Appropriations Act of 2006, P le POD. BGREGR, § SGD CIBRD) ncvccncccccvcccsecesessscoocesascoce 28 Foreign States Immunities Act, No. 196 (1985) (Austl.), reprinted in Andrew Dickinson et al., eds., State Immunity: Selected Materials and Commentary 469-87 (2004) ........csecssssssseesesereesseseesenes 24 Foreign States Immunities Regulation, No. 77 (as amended) (1987) (Austl.), available at: http://www.comlaw. gov.au/ComLaw/Legislation/LegislativeInstrume nt] .nsf/0/87C39DB5671D39CCCA256F8F00181 874/$file/1996B00775 pdf. ...........:cccccsceseecsseesecerseeeeeees 24 Foreign Sovereign Immunities Act of 1976, 28 U.S.C. OD Ee OF GU, cninicsscuninsoccsietninsninnsiianiainnamsadiibidiins passim Immunity of Foreign States from the Jurisdiction of Argentinean Courts, Law No. 24, 488 (1995) (Arg.), reprinted in Andrew Dickinson et al., eds., State Immunity: Selected Materials and Commen- SN, 6D I Ge cs tnctctsertianintitsinsnneritnnsinatiaiintacuisiins 24 International Law Association Revised Draft Articles for a Convention on State Immunity (Buenos Ai- res, 14-20 August 1994), Article III(D), reprinted in Andrew Dickinson et al., at 196.............ccc:cceceeeeseeeees 27 L’ Institut de Droit International on Contemporary Problems Concerning the Immunity of States in Relation to Questions of Jurisdiciton and En- forcment (Basle, 2 September 1991), reprinted in Andrew Dickinson et al., at 206-21 1............:cc:cceeee 26, 27 New York City Charter § 1519(2)...........:cecseccesseseseseeseseeens 6 vi TABLE OF AUTHORITIES— Hearing before the Subcommittee on Claims and Governmental Relations of the Committee on the Judiciary, House of Representa- tives, 93rd Cong., Ist Sess., (June 7, 1973), 33-48, reprinted in William H. Manz, ed., Foreign Sovereign Immunities Act of 1976, with Amendments: A Legislative History of Pub. L. No. 94-583 [hereinafter “Hearings (1973)"]. See also House Report at 6-33. 10 A. A Fundamental Goal Of FSIA Was To Codify The “Restrictive” Theory Of Sovereign Immu- nity, Which Denies Immunity In Cases Involv- ing “Private” Acts Such As The Ownership Of Real Property. There is no doubt that FSIA was passed in large part to codify the “restrictive” theory of sovereign immunity, which permits lawsuits in cases arising from a state’s “private” acts.° And it is undisputed that ownership of non-diplomatic property is an example of such a private act. Given that the taxes at issue here were assessed on property used as private housing for staff-level employees — and not for the public purpose of maintaining an embassy or consulate, or housing the head of mission, as stipulated by the Vienna Convention — the restrictive theory allows jurisdiction to be exercised in this case.* The United States tries to avoid this conclusion by argu- ing that the immovable property exception pre-dates the re- strictive theory, and hence should be read against the back- ground of the absolute theory of sovereign immunity that prevailed prior to the Tate Letter. U.S. Br. 6, 9-11. Under this approach, the United States maintains, immunity should be denied only when there is a “necessity” that a sovereign “be able to determine all issues relating to the title and possession ° See House Report 7-10, 14, 45; Hearings (1976) 25-27, 31. ” See Vienna Convention on Diplomatic Relations, 23 U.S.T. 3227, Art. 1 & Art. 23 (exempting states from taxes on the prem- ises of the mission, defined as the parts of buildings used for the purposes of the mission, including the residence of the head of mission). * To the extent there is a dispute here about whether the property at issue is tax-exempt diplomatic property, it should be resolved in the merits stage of the proceeding, under the standards established by the Vienna Convention. Cf. Lance v. Coffman, 127 S. Ct. 1194, 1196 (2007) (‘Federal courts must determine that they have juris- diction before proceeding to the merits”). 11 of property within its realm.” /d. at 6. The United States con- cludes that the absence of pre-FSIA suits adjudicating tax claims demonstrates that there is no such “necessity” for do- mestic courts to adjudicate suits for local property taxes. Ibid. This novel theory has perverse implications; although the reasons for waiving immunity as to disputes involving real property were sufficiently compelling that they were recognized even when absolute foreign sovereign immunity otherwise prevailed, the United States now says that real property disputes should be viewed against the background of a uniquely broad background understanding of immunity. This approach finds no support in the text or legislative his- tory of FSIA. Nowhere in the Act itself, the House or Senate reports, or the testimony of senior State and Justice Depart- ment officials is it suggested that FSIA’s immovable prop- erty exception seeks to codify the understanding of the real property exception that prevailed under the outdated “abso- lute” theory, instead of the more modern “restrictive” ap- proach to immunity. On the contrary, the legislative materials show that Con- gress understood ail provisions of FSIA to embrace the re- strictive theory. As Bruno Ristau, Chief of the Foreign Liti- gation Section of the Justice Department’s Civil Division, testified before Congress, “[t]he [FSIA] is designed to codify as a matter of Federal law the restrictive theory of sovereign immunity, and thus put to rest once and for all the question as to what doctrine of sovereign immunity the United States fol- lows.” Hearings (1976) at 31. And as State Department Legal Adviser Monroe Leigh further made clear, the “principles of international law” constituting the restrictive theory “are em- bodied in sections 1604 through 1607” — including, of course, the very Section 1605({a)(4) now at issue here. Hear- ings (1976) at 27. In light of this contemporaneous evidence, there is no reason to accept the United States’ contention that, unlike the 12 rest of FSIA, Section 1605(a)(4) should be read as though the tule of absolute immunity still prevailed. Such a reading flies in the face of the Act’s central purpose — to formally break from the traditional approach and curtail state reliance on immunity in cases arising from private acts. Moreover, even if the United States is right that the im- movable property exception should be construed in accor- dance with the absolute theory, its conclusion is incorrect be- cause it misstates the broad application of the real property exception that was applied even during the period when ab- solute immunity prevailed. Even at the time, as described in the Tate Letter, the exception was thought generally to allow suit “with respect to real property (diplomatic and perhaps consular property excepted).” House Report at 20 (emphasis added).’ That understanding of the pre-Tate Letter real prop- erty exception, which was stated in terms broad enough to reach suits involving tax liens (suits that surely are “with re- spect” to real property) and which was familiar to Congress in 1976, cannot be squared with the United States‘ current position. * Letter from Jack B. Tate, Acting Legal Adviser, U.S. Department of State, to Phillip B. Perlman, Acting Attorney General (May 19, 1952), reprinted in Alfred Dunhill of London, Inc. v. Republic of Cuba, 425 U.S. 682, 711-715 (1976). Further support for this un- derstanding of the absolute theory can be found in a study com- missioned by the State Department — and endorsed by its Legal Adviser — in 1963. See Joseph S. Sweeney, The International Law of Sovereign Immunity, cover page and 1, U.S. Department of State, Bureau of Intelligence and Research (October 1963). 13 B. Based on Representations “y The Executive Branch, Congress Expected The Immovable Property Exception To Apply To Litigation “Relating To” Or “With Respect To” Immov- able Property, Including Tax Obligations. In both 1973 and 1976, officials from the State and Jus- tice Departments made representations to Congress about the prevailing norms of international practice and suggested leg- islative language for FSIA’s immovable property exception to reflect that practice. These representations strongly suggest that FSIA provides U.S. courts jurisdiction to determine the validity_of tax liens on such property owned by foreign States. In 1973, Secretary of State William P. Rogers and Attor- ney General Richard G. Kleindeist sent Congress an initial draft of FSIA with an immovable property exception identi- cal to the final text of Section 1605(a)(4) enacted three years later. Hearings (1973) at 36. Along with the draft, Rogers and Kleindeist attached a section-by-section commentary giving interpretive guidance on the meaning of each provision. Ac- cording to the commentary, Section 1605(a)(4) reaches “iti- gation relating to immovables and to the property of dece- dents.” Hearings (1973) at 41 (emphasis added). The com- mentary went on to note that “a foreign state cannot deny to the local state the right to adjudicate on questions of owner- ship, rent, servitudes, and other similar matters, as long as the foreign state’s possession of the premises is not dis- turbed.” /bid. (emphasis added). These broad formulations would appear to describe actions to establish the validity of tax liens on immovable property. Testifying on behalf of the bill in 1973, State Depart- ment Acting Legal Adviser Charles Brower used similar lan- guage, confirming the broad scope of Section 1605(a)(4). He declared that the immovable property exception permitted litigation “against a foreign state relating to * * * rights in 14 immovable property situated in the United States.” Hearings (1973) at 21. He went on to explain that “this is a pretty clear exception for estate and real estate matters in this country, in keeping with the law at the present time.” /bid. (emphasis added). Brower gave no indication that the exception applied” only to the rights of foreign states or that the assessment of a property tax was not included within the general category of “real estate matters.” The House Report accompanying the final version of FSIA in 1976 endorsed this broad approach. The Report ex- plains that Section 1605(a)(4) “denies immunity in litigation relating to rights in real estate * * * located in the United States.” House Report at 20 (emphasis added). It goes on to note that, in accordance with the Tate Letter of 1952, “sover- eign immunity should not be granted in actions with respect to real property, diplomatic and consular property excepted *** . It does not matter whether a particular piece of prop- erty is used for commercial or public purposes.” /bid. (em- phasis added). Moreover, in its discussion of the immovable property exception and its relationship to the Vienna Conven- tion, the 1976 House Report reflected the Executive Branch commentary, noting that “a foreign state cannot deny to the local state the right to adjudicate questions of ownership, rent, servitudes, and similar matters, as long as the foreign State’s possession of the premises is not disturbed.” House Report at 20. This review of the contemporaneous sources shows that the discussion of Section 1605(a)(4) prior to FSIA’s passage in 1976 uniformly endorsed the broad scope of the immov- able property exception to sovereign immunity. Indeed, each of the formulations used by the House Report to explain the scope of that exception — “litigation relating to rights in real estate,” “actions with respect to real property,” the right of courts “to adjudicate questions of ownership, rent, servitudes, and similar matters” — is expansive enough to include dis- putes regarding tax liens and is significantly broader than the 15 reading now offered by the United States, which would limit the immovable property exception to suits concerning only “ownership, use, or possession.” U.S. Br. 8. Such a construc- tion would narrow the exception’s scope well beyond the general understanding that prevailed at the time FSIA was enacted. C. The Executive Branch Made Clear To Con- gress That FSIA Was Consistent With Interna- tional And Domestic Practice. / Congress Understood FSIA To Be Consistent With The European Convention, Which Con- tains A Similarly Broad Immovable Property Exception. There is no dispute that one of Congress’s principal goals in drafting FSIA was to align the United States’ prac- tice on sovereign immunity with that of other states. At the time FSIA was under consideration, the most ambitious in- ternational attempt to generate consensus on the law of sov- ereign immunity was the European Convention, which was completed in the years immediately preceding passage of FSIA. References to the EC in FSIA legislative materials in- dicate that both Congress and the Executive Branch believed the Act to be fully consistent and harmonious with the EC.'° That is significant, because the EC strongly supports the con- clusion that disputes concerning tax liens are permissible un- der FSIA. 0 See Hearings (1973) at 18 (testimony by State Department Act- ing Legal Adviser Charles Brower, discussing the general intent of FSIA’s drafters to “conform fairly closely” to “accepted interna- tional standards” such as the EC); Hearings (1976) at 37 (Con- gressman George Danielson asked whether there was “any incon- sistency” between the EC and the proposed FSIA, and Monroe Leigh, State Department Legal Adviser, replied: “[iJn general terms, no.”’). 16 As we note above, the EC waives immunity not only with respect to suits concerning a state’s rights in property, but also when the suit concerns obligations arising out of state ownership of property. EC, Art. 9. The Explanatory Re- port to Article 9 notes that the terms “rights, use and posses- sion” in the immovable property exception “must be inter- preted broadly.” Explanatory Report of the European Con- vention on State Immunity, ETS No. 74 (“Explanatory Re- port”), 9 44."' This understanding, with its express reference to state obligations, is flatly inconsistent with petitioners’ and the United States’ submission that the real property exception is generally understood to reach only disputes concerning a sovereign’s rights to title or possession of property. Petitioners and the United States seek to escape this con- clusion by observing that the EC provides, in Article 29, that the Convention does not cover proceedings concerning “cus- toms duties, taxes or penalties.” U.S. Br. 28-29. But the United States draws precisely the wrong conclusion from this limitation. Article 29 does not give states immunity in tax disputes, as the United States implies. See U.S. Br. 19 n.15 (EC “does not permit adjudication of tax claims”); see also id. at 28-29 (EC “dofes] not abrogate immunity in cases to recover property taxes imposed on — or to declare a tax lien on — foreign governmental property”). Rather, Article 29 en- sures that the EC neither grants nor denies immunity in tax cases; it limits both the broad grant of state immunity of Ar- ticle 15 and the immovable property exception to that grant of immunity stipulated in Article 9. Unlike FSIA, the EC is limited to issues of private law. Treatment of customs duties, taxes, penalties and fines was '' The Explanatory Report was prepared by an expert committee and submitted to the Committee of Ministers of the Council of Europe. It was intended to provide useful but non-authoritative guidance as to how the Convention should be interpreted. Sce Ex- planatory Report, 4 II. 17 omitted because, in many countries, such matters “‘d[id] not fall exclusively under public law or because the dividing line between public and private law [was] ill-defined or non- existent.” Explanatory Report, § 113. Because the EC was “essentially concerned with private law disputes between in- dividuals and States,” the drafters wanted to ensure that taxa- tion disputes would not be drawn into Article 9’s broad im- movable property exception. See ibid. (stating that without Article 29, “Article 9 in particular might otherwise have been applicable” and waived immunity as to tax disputes). It is important to realize, however, that Article 29 applies just as much to the general grant of immunity contained in Article 15 of the EC. Hence, the provision removes treatment of tax disputes from the Convention altogether, leaving such disputes open to “general rules of law.”” See Explanatory Re- port, 9 113. The EC thus does not take a position one way or the other on the issue of sovereign immunity for tax disputes, and member states of the Council of Europe may or may not be immune, depending upon the particular laws of each member country. This arrangement is workable because the EC supplements the laws of its member states; as background law, it leaves certain questions open to determination by in- dividual States. By contrast, FSIA covers the entire field of sovereign immunity law, and hence provides the “sole and exclusive standards to be used in resolving questions of sovereign im- munity raised by foreign states.” House Report at 12. The Court has stated its understanding of the Act in similar terms. Verlinden B.V. v. Central Bank of Nigeria, 461 U.S. 480, 488 (1983)