Source: https://www.skadden.com/insights/publications/2019/03/us-supreme-court-construes-scope-of-immunities
Timestamp: 2019-04-25 18:28:51+00:00

Document:
In the global economy, companies increasingly interact with “international organizations,” or institutions created by treaty or other intergovernmental agreement. These include organizations that engage in economic and banking activity (such as the International Monetary Fund (IMF), the World Bank and the International Finance Corporation (IFC)), regional economic bodies (such as the Inter-American Development Bank and the Organization of American States) and bodies that provide services (like the World Health Organization and UNESCO).
In U.S. courts, international organizations enjoy extensive immunities from civil suit and other protections pursuant to the International Organizations Immunities Act (the IOIA or Act). On February 27, 2019, the U.S. Supreme Court issued its first major decision construing the scope of immunities afforded by the IOIA. The decision, Jam v. International Finance Corp. (U.S. Feb. 27, 2019), holds that the IOIA did not confer upon international organizations any greater immunity than that available to foreign governments under the doctrine of foreign sovereign immunity, as now codified in the Foreign Sovereign Immunities Act (FSIA). The Court’s decision may significantly narrow the degree of immunity previously understood to be available to international organizations in U.S. courts.
As the “restrictive” theory of foreign sovereign immunity gained acceptance, a debate emerged over whether international organizations’ immunity under the IOIA should also be “restrictive,” or whether it should be “absolute,” in that it would bar all lawsuits except in the case of an explicit or implied waiver of immunity (consistent with the philosophy at the time the statute was enacted). In 1980, the U.S. Court of Appeals for the District of Columbia Circuit, in Broadbent v. Organization of American States, 628 F.2d 27 (D.C. Cir. 1980), noted this issue but did not definitively adjudicate it.
The Supreme Court granted certiorari and on February 27, 2019, reversed and remanded the D.C. Circuit’s decision, holding that the IOIA grants international organizations such as the IFC the “same immunity” from suit that foreign governments enjoy today under the FSIA.
Jam represents a significant development in IOIA jurisprudence, by clarifying that international organizations possess the same level of restrictive immunity under that Act as foreign sovereigns have under the FSIA. It also has potentially profound consequences for international organizations that operate in the United States or engage in activities that affect U.S. citizens, as well as companies and individuals that transact business with them.
From the perspective of international organizations themselves (particularly development banks), the potentially increased exposure to U.S. lawsuits may warrant a review of how they operate in matters with a nexus to the United States. From the perspective of companies and individuals transacting business with international organizations, Jam may make it easier to bring U.S. lawsuits relating to such transactions. But Jam may also enable third parties (as in Jam itself) to bring litigation challenging business transactions, which might expose those transactions to risk and uncertainty.
Jam also does not address the question of whether, and to what extent, an individual officer or employee of an international organization might have immunity. Case law decided to date under the IOIA has indicated that the immunity of such individuals is confined to acts done in exercising their official functions (functional immunity) — meaning that their immunity is less than that afforded to accredited diplomats.38 It remains to be seen whether Jam will affect the trajectory of this doctrine.
1 22 U.S.C. § 288a(b) (emphasis added).
2 Jam v. International Finance Corp., No. 17-1011, 2019 WL 938524, at *3 (Feb. 27, 2019), citing 22 U.S.C. § 288.
3 See Jam v. International Finance Corp., 2019 WL 938524, at *3.
4 See Atkinson v. Inter-American Dev. Bank, 156 F.3d 1335, 1340 (D.C. Cir. 1998), citing letter from Acting Legal Advisor, Dep't of State Jack B. Tate to Attorney General Philip B. Perlman; Jam v. International Finance Corp., 2019 WL 938524, at *3.
5See 28 U.S.C. §§ 1604, 1605(a)(2).
6 Atkinson v. Inter-American Dev. Bank, 156 F.3d 1335 (D.C. Cir. 1998).
7 See id. at 1341.
8 See OSS Nokalva, Inc. v. European Space Agency, 617 F.3d 756 (3d Cir. 2010).
9 Id. at 761-62, quoting Atkinson, 156 F.3d at 1340.
10 See id. at 762-63.
11 The IFC is an international development bank headquartered in Washington, D.C., and a designated international organization under the IOIA. It “is charged with furthering economic development ‘by encouraging the growth of productive private enterprise in member countries, particularly in the less developed areas, thus supplementing the activities of’ the World Bank.” Jam v. International Finance Corp., 2019 WL 938524, at *4, quoting Articles of Agreement of the International Finance Corporation, Art. I, Dec. 5, 1955, 7 U.S.T. 2193, T. I. A. S. No. 3620.
13 See id. In its brief before the Supreme Court, the IFC stated that “Petitioners, a group of Indian nationals, filed a complaint with IFC’s Compliance Advisor Ombudsman (CAO), alleging that the power plant had caused environmental harms” and that “[t]he CAO issued findings and suggestions addressing how IFC might better ensure compliance with its self-imposed internal standards.” Brief for Respondent at 11, Jam v. International Finance Corp., 2019 WL 938524 (Feb. 27, 2019) (No. 17-1011).
14 See Jam v. International Finance Corp., 2019 WL 938524, at *4.
15 See id. at *5.
18 Id., citing 42 U.S.C. §§ 1981(a), 1982; Jones v. Alfred H. Mayer Co., 392 U.S. 409, 427-30, 88 S. Ct. 2186, 20 L.Ed.2d 1189 (1968).
22 Id., quoting American Tobacco Co. v. Patterson, 456 U.S. 63, 68, 102 S. Ct. 1534, 71 L.E.2d 748 (1982) (alterations omitted).
26 Id. at *8. The Court cited, among other things, the 1946 Convention on the Privileges and Immunities of the United Nations, 13 Feb 1946, 21 UST 1418. Article II (2) of that convention confers on the U.N. "immunity from every form of legal process except insofar as in any particular case it has expressly waived its immunity."
28 Id., quoting Republic of Argentina v. Weltover, Inc., 504 U.S. 607, 614, 112 S. Ct. 2160, 119 L.Ed.2d 394 (1992).
35 Id. Justice Breyer noted that the same concern would not apply to the U.N. because Congress had ratified a comprehensive immunity provision for the U.N. in 1970. See id. at *13, citing Convention on the Privileges and Immunities of the United Nations, Art. II, § 2, Feb. 13, 1946, 21 U.S.T. 1422, T. I. A. S. No. 6900 (entered into force Apr. 29, 1970); see also App. to S. Exec. Rep. No. 9117, p. 14 (1970).
36 Id. at *15, quoting Broadbent v. Organization of Am. States, 628 F.2d 27, 35 (D.C. Cir. 1980).
37 See 28 U.S.C. §§ 1609-11.
38 See Diallo v. Strauss-Kahn, No. 307065/11, slip op. at 7-8 (N.Y. Sup. Ct., Bronx County, May 1, 2012) (declining to construe the IOIA as conferring "absolute" immunity from civil suit on former head of IMF).

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