Will the Real FSIA Choice-of-Law Rule Please Stand Up?

WILL THE REAL FSIA CHOICE-OF-LAW RULE PLEASE STAND UP?The Foreign Sovereign Immunities Act (FSIA) allows United States courts to exert jurisdiction over foreign states and their corporations in certain specific, limited situations.' However, the FSIA fails to address some of the technical problems that may arise during the trial of these suits, such as the rules for determining what substantive law applys to the merits of a case against a foreign state.(2) To illustrate the importance of this issue, consider the following fact pattern. United States citizens, traveling to Seoul, South Korea, purchase tickets on a Korean Air Lines (KAL) flight departing from New York City.(3) The flight refuels in Anchorage, Alaska, then proceeds southwest across the Pacific Ocean towards Seoul.(4) Unfortunately, due to a serious navigational error on the part of the crew, the flight strays into sensitive Soviet airspace where Soviet interceptors shoot the KAL flight down.(5)' There are no survivors.(6) The family members of the decedents bring wrongful death actions against KAL seeking both compensatory and punitive damages.(7) Now assume that it develops that the government of South Korea owns KAL and claims sovereign immunity as a defense to the wrongful death suit. The FSIA provides that foreign sovereigns are immune from suit in the United States unless certain exceptions apply.(8) In this instance the commercial activities exception(9) probably would apply giving the United States courts jurisdiction over KAL on the wrongful death claims. However, after the court decides that immunity is not present, it must decide which body of substantive law applies to the claims of the decedents' family members.The court must decide whether the substantive law of the United States or of some specific state, such as New York, applies. Alternatively, the court may determine that foreign substantive law, such as the law of Korea or the law of the place of the "accident"--the Soviet Union--controls. In fact, the court may determine that general international law principles govern a case such as this. This choice-of-law determination will most likely have a very important effect on the outcome of the case. The choice-of-law determination will be especially important in the areas of liability, damages, and statutes of limitation.(10) While punitive damages will not be an issue in this FSIA case,(11) general damage limitations imposed by international, foreign, or state law may drastically affect the outcome of the case. Any of these potentially applicable bodies of law may impose strict limits or caps on the amount of liability to which KAL may be subject.(12)Although the FSIA goes a long way toward resolving many of the questions that arise when a plaintiff contemplates a suit against a foreign sovereign, the FSIA does not resolve them all. Specifically, once the court has determined that sovereign immunity is inapplicable and has asserted its jurisdiction, the FSIA fails to establish explicit choice-of-law rules for determining what law to apply to the substantive issues.(13) This omission, which perhaps is due to congressional oversight, has given rise to a divergence of opinion among both legal scholars and the United States courts.(14) For example, the Ninth Circuit and the Second Circuit recently have split on this choice-of-law issue.(15) The Ninth Circuit has advocated a federal common-law choice-of-law rule(16) while the Second Circuit has chosen to utilize the choice-of-law rules of the forum state.(17) An analysis of both the Ninth and Second Circuits' approaches shows that they are not reconcilable. Further, this analysis coupled with an analysis of the legislative history of the FSIA demonstrates the need for either Congress or the Supreme Court to take affirmative action to definitively resolve the FSIA's choice-of-law dilemma.In Barkanic v. General Administration of Civil Aviation of the People's Republic of China,(18) a Chinese plane en route from Nanjing to Beijing, China crashed, killing two American passengers. …