Embassy Law Web Log   
Washington, DC, USA      

Saudi Immunity Affirmed

Seven Saudi Arabian defendants who may have played a critical role in the 9/11 terrorist attacks cannot be sued in the United States, according to the U.S. Court of Appeals for the Second Circuit. On August 14, 2008, the Second Circuit ruled that the Foreign Sovereign Immunities Act renders the Kingdom of Saudi Arabia, four Saudi princes, a Saudi banker, and the Saudi High Commission for Relief to Bosnia and Herzegovina immune from litigation in U.S. courts; In re Terrorist Attacks on September 11, 2001, 2008 U.S. App. LEXIS 17223.

While acknowledging that plaintiffs' allegations include a wealth of detail … that, if true, reflect close working arrangements between ostensible charities and terrorist networks, including al Qaeda, the court nevertheless held that defendants retain their immunity because they do not fall under any of the FSIA's statutory exceptions. Those exceptions include (1) designation as a State Sponsor of Terrorism by the U.S. government, (2) personal injury or death resulting from a foreign sovereign's tortious act, and (3) commercial activity.

The decision sets a precedent in the Second Circuit with its holding that an individual official of a foreign state acting in his official capacity is the agency or instrumentality of the state, and is thereby protected under the FSIA. Judges Jacobs, Cabranes and Vitaliano agreed with similar decisions in the 4th, 5th, 6th, 9th, and D.C. Circuits and rejected the narrow[] construction of FSIA immunity held in the 7th Circuit.

Also noteworthy is the court's argument that applying the torts exception in this case would violate an important procedural safeguard--the formal designation of a defendant as a terror sponsor. The court reasoned that to apply the Torts Exception where the conduct alleged amounts to terrorism within the meaning of the Terrorism Exception would evade and frustrate that key limitation on the Terrorism Exception. Additional analysis of the decision is available at the New York Law Journal. -- Christina E. Mason, legal assistant, Berliner, Corcoran & Rowe, LLP.

Direct Effect Exception Under FSIA

The United States Court of Appeals for the Tenth Circuit upheld a prior ruling of the United States District Court of Utah on July 15, 2008 in Big Sky v. Sichuan Provincial Government et al., docket number 07-4014. Big Sky, a British Virgin Islands corporation, and a Chinese company had entered into a joint venture which was dissolved due to subsequently issued Chinese government mandates.

When no financial compensation was forthcoming, Big Sky brought suit against two provincial governments. While the court's first decision of enlarging the FSIA removal period was affirmed, the substantive issue of subject-matter jurisdiction of the Utah court under the exceptions to the FSIA remained unresolved. Big Sky claimed that the Chinese governments' actions directly affected commercial activity in the United States. The company claimed the application of the commercial activity exception clause in 28 U.S.C. §1441(d).

The Court held, however, that the mere financial loss to Big Sky's American mother company, though real, was felt prominently overseas and does not constitute a direct effect on American commerce. -- Stephanie Petrew, legal assistant, Berliner, Corcoran & Rowe, LLP, Washington, DC.

Subrogation and Immunity

On July 25, 2008, the United States District Court of Appeals for the District of Columbia Circuit decided against Libya's Foreign Sovereign Immunities Act claim in La Reunion Aerienne v. Socialist People's Libyan Arab Jamahiriya et al., docket number 07-7050. A French insurer who had stepped into the shoes of Americans it paid under a policy covering the bombing of a French airliner over Africa could successfully plead subject-matter jurisdiction under the terrorism exception to the FSIA, the court held. -- Clemens Kochinke, Berliner, Corcoran & Rowe, LLP, Washington.

Constitutional Challenge to Terror Exception

Generally, sovereignty shields states from litigation. There are exceptions, however. In the United States, the Foreign Sovereign Immunities Act lays down the general principles and exceptions under which lawsuits against sovereign states can be filed with courts in the United States.

In James Owens et al. v. Repubic of the Sudan et al., docket no. 06-5079, the United States Court of Appeals for the District of Columbia explains the constitutionality of 28 USC §1605(a)(7), which contains an exception to sovereign immunity: Nations found to be sponsors of terrorism by the Secretary of State may not invoke their immunity in litigation.

Sudan contests the constitutionality of 28 USC §1605(a)(7) on grounds that it violates the separation of powers. The court does not follow Sudan's logic that Congress unconstitutionally delegated its power to define the jurisdiction of the federal courts to the Executive.

Instead, the court explains on July 11, 2008, Congress assigned the Executive the authority to make a factfinding upon which jurisdiction partially rests and provided sufficient guidance to the Secretary of State to make the finding of the facts upon which the jurisdiction of federal courts over sovereign states depends. Therefore, 28 USC §1605(a)(7) meets the requirements of the intelligible principle standard of review, supra at 16. -- Michael J. Warning, International Fellow with Berliner, Corcoran & Rowe, LLP, Washington, DC.

ICJ Clarifies Avena

On July 16, 2008, the International Court of Justice provided the United States with a clarification to take all measures necessary to ensure that five Mexican nationals are not executed pending its final judgment in The Case Concerning Avena and Other Mexican Nationals (Mexico v. United States of America). Its order is timely as Jose Medellin, one of the Mexicans concerned in the case, is scheduled to be executed on August 5, 2008 in Texas. According to the Houston Chronicle, Texas governor, Rick Perry, intends to execute Avena despite the World Court order. -- Christina E. Mason, legal assistant, Berliner, Corcoran & Rowe, LLP, Washington.

Al-Bashir ICC Prosecution

The International Criminal Court published a press release on the Al-Bashir prosecution on July 14, 2008. The application against the President of Sudan was filed by the ICC prosecution and will be reviewed by the Pre-Trial Chamber. In controlling a counter-insurgency in Darfur, the president is alleged to have used genocidal means outside of the means available to sovereign nations to protect their territory. President Al-Bashir is the first sitting president to face such ICC charges, Times Online adds. -- Clemens Kochinke, Berliner, Corcoran & Rowe, LLP, Washington.

Iraq Complaint Justiciable

On June 24, 2008, the United States Court of Appeals for the District of Columbia Circuit remanded the matter of Robert Simon et al. v. Republic of Iraq et al., docket number 06-7175, to the district court for further proceedings.

Relying on an exception in the Foreign Sovereign Immunities Act, FSIA, the plaintiffs sued Iraq, the Iraqi intelligence service and Saddam Hussein alleging they had been tortured and taken hostage during the Gulf War. Although foreign sovereigns are normally protected from lawsuits, the exception in the FSIA, 28 USC §1605(a)(7), allows for lawsuits against state sponsors of terrorism. The district court dismissed the lawsuit, however, on the basis that the actions were untimely, coming two years after the ten year limitation.

On appeal, Iraq newly contended that the §1083 of the National Defense Authorization Act for Fiscal Year 2008, NDAA, which revised the terrorism exception by repealing §1605(a)(7) of Title 28 and adding §1605A of Title 28, required dismissal of the cases. The new section mostly strengthened plaintiffs' ability to seek damages from state sponsors of terrorism, though §1083(d) allowed the President to waive §1083 with respect to Iraq, which he promptly did in order to protect its reconstruction.

Based on the text and structure of the NDAA, circuit judge Ginsberg wrote that the appeals court concluded that the courts retained jurisdiction over cases pending pursuant to former §1605(a)(7) when the Congress enacted the NDAA. The court found the actions to be timely and liable to be tried in court and, therefore, reversed the district court's dismissal. -- Genevieve Cohoon, legal assistant, Berliner, Corcoran & Rowe, LLP, Washington.

Garnishment Dispute in Supreme Court

In today's session, the United States Supreme Court granted certiorari in Ministry of Defense and Support for the Armed Forces of the Islamic Republic of Iran v. Elahi, docket number 07-615. For a prior discussion, see Attachment of Award and Blocked Assets. The issue accepted on June 23, 2008 is whether an award received by a foreign sovereign may be garnished by a third party that won an award against the sovereign. -- Clemens Kochinke, Berliner, Corcoran & Rowe, LLP, Washington.

Philippine FSIA Case on the Docket

On The Docket maintains a list of Supreme Court cases that address the Foreign Sovereign Immunities Act. The newest decision is Philippines v. Pimental, 553 US _ (2008). -- Clemens Kochinke, Berliner, Corcoran & Rowe, LLP, Washington.

Embassies' Business Outreach

On June 12, 2008, the US-ASEAN Business Council facilitated the business outreach efforts of American embassies in South-East Asia. Under its auspices, four U.S. ambassadors joined with 10 foreign ambassadors to meet with business representatives at the Willard Hotel in Washington, DC. Secretary of Commerce, Carlos Gutierrez, present the keynote speech.

Gutierrez argued that protectionism does not protect and called for focused efforts on free trade agreements with ASEAN nations. The Council has long supported such FTAs and serves as the secrectariat of the US-Malaysia FTA Business Coalition.

The American ambassadors stressed the educational aspects of their tour. In San Diego and Houston, they learned from business about approaches in intellectual property law and energy where embassies and business have opportunities for enhanced cooperation. -- Clemens Kochinke, Berliner, Corcoran & Rowe, LLP, Washington.