Source: http://openjurist.org/507/us/349
Timestamp: 2015-08-01 11:59:47
Document Index: 429065047

Matched Legal Cases: ['§ 1605', '§ 1605', '§ 1605', '§ 1604', '§ 1605', '§ 1605', '§ 1330', '§ 1605', '§ 1604', '§ 1605', '§ 1603', '§ 1603', '§ 1603', '§ 1605']

507 US 349 Saudi Arabia v. Nelson | OpenJurist
507 U.S. 349 - Saudi Arabia v. Nelson Home
507 US 349 Saudi Arabia v. Nelson 507 U.S. 349
113 S.Ct. 1471
123 L.Ed.2d 47
SAUDI ARABIA, King Faisal Specialist Hospital and Royspec, Petitionersv.Scott NELSON et ux.
No. 91-522.
Argued Nov. 30, 1992.
The respondents Nelson, a married couple, filed this action for damages against petitioners, the Kingdom of Saudi Arabia, a Saudi hospital, and the hospital's purchasing agent in the United States. They alleged, among other things, that respondent husband suffered personal injuries as a result of the Saudi Government's unlawful detention and torture of him and petitioners' negligent failure to warn him of the possibility of severe retaliatory action if he attempted to report on-the-job hazards. The Nelsons asserted jurisdiction under the Foreign Sovereign Immunities Act of 1976, 28 U.S.C. § 1605(a)(2), which confers jurisdiction where an action is "based upon a commercial activity carried on in the United States by the foreign state." The District Court dismissed for lack of subject-matter jurisdiction. The Court of Appeals reversed, concluding that respondent husband's recruitment and hiring were "commercial activities" upon which the Nelsons' action was "based" for purposes of § 1605(a)(2).
Held: The Nelsons' action is not "based upon a commercial activity" within the meaning of the first clause of § 1605(a)(2), and the Act therefore confers no jurisdiction over their suit. Pp. ____.
(a) This action is not "based upon" a commercial activity. Although the Act does not define "based upon," the phrase is most naturally read to mean those elements of a claim that, if proven, would entitle a plaintiff to relief under his theory of the case, and the statutory context confirms that the phrase requires something more than a mere connection with, or relation to, commercial activity. Even taking the Nelsons' allegations about respondent husband's recruitment and employment as true, those facts alone entitle the Nelsons to nothing under their theory of the case. While these arguably commercial activities may have led to the commission of the torts that allegedly injured the Nelsons, it is only those torts upon which their action is "based" for purposes of the Act. Pp. ____.
(b) Petitioners' tortious conduct fails to qualify as "commercial activity" within the meaning of the Act. This Court has ruled that the Act largely codifies the so-called "restrictive" theory of foreign sovereign immunity, Republic of Argentina v. Weltover, Inc., 504 U.S. ----, ----, 112 S.Ct. 2160, 2165, 119 L.Ed.2d 394, and that a state engages in commercial activity under that theory where it exercises only those powers that can also be exercised by private citizens, rather than those powers peculiar to sovereigns, id., at ----, 112 S.Ct. at ----. The intentional conduct alleged here (the Saudi Government's wrongful arrest, imprisonment, and torture of Nelson) boils down to abuse of the power of the police. However monstrous such abuse undoubtedly may be, a foreign state's exercise of that power has long been understood for purposes of the restrictive theory as peculiarly sovereign in nature. The Nelsons' argument that respondent husband's mistreatment constituted retaliation for his reporting of safety violations, and was therefore commercial in character, does not alter the fact that the powers allegedly abused were those of police and penal officers. In any event, that argument goes to the purpose of petitioners' conduct, which the Act explicitly renders irrelevant to the determination of an activity's commercial character. Pp. ____.
(c) The Nelsons' attempt to claim failure to warn is merely a semantic ploy. A plaintiff could recast virtually any claim of intentional tort committed by sovereign act as a claim of failure to warn. To give jurisdictional significance to this feint of language would effectively thwart the Act's manifest purpose to codify the restrictive theory of foreign sovereign immunity. Cf. United States v. Shearer, 473 U.S. 52, 54-55, 105 S.Ct. 3039, 3041-3042, 87 L.Ed.2d 38 (opinion of Burger, C.J.). Pp. ____.
923 F.2d 1528 (CA 11 1985), reversed.
SOUTER, J., delivered the opinion of the Court, in which REHNQUIST, C.J., and O'CONNOR, SCALIA, and THOMAS, JJ., joined, and in which KENNEDY, J., joined except for the last paragraph of Part II. WHITE, J., filed an opinion concurring in the judgment, in which BLACKMUN, J., joined. BLACKMUN, J., filed an opinion concurring in part and dissenting in part. KENNEDY, J., filed an opinion concurring in part and dissenting in part, in which BLACKMUN and STEVENS, JJ., joined as to Parts I-B and II. STEVENS, J., filed a dissenting opinion.
Everett C. Johnson, Jr., Washington, DC, for petitioners.
Jeffrey P. Minear, Washington, DC, for U.S. as amicus curiae, by special leave of the Court.
Paul S. Stevens, Washington, DC, for respondents.
The Foreign Sovereign Immunities Act of 1976 entitles foreign states to immunity from the jurisdiction of courts in the United States, 28 U.S.C. § 1604, subject to certain enumerated exceptions. § 1605. One is that a foreign state shall not be immune in any case "in which the action is based upon a commercial activity carried on in the United States by the foreign state." § 1605(a)(2). We hold that respondents' action alleging personal injury resulting from unlawful detention and torture by the Saudi Government is not "based upon a commercial activity" within the meaning of the Act, which consequently confers no jurisdiction over respondents' suit.
* Because this case comes to us on a motion to dismiss the complaint, we assume that we have truthful factual allegations before us, see United States v. Gaubert, 499 U.S. ----, ----, 111 S.Ct. 1267, ----, 113 L.Ed.2d 335 (1991), though many of those allegations are subject to dispute. See Brief for Petitioners 3, n. 3; see also n. 1, infra. Petitioner Kingdom of Saudi Arabia owns and operates petitioner King Faisal Specialist Hospital in Riyadh, as well as petitioner Royspec Purchasing Services, the Hospital's corporate purchasing agent in the United States. App. 91. The Hospital Corporation of America, Ltd. (HCA), an independent corporation existing under the laws of the Cayman Islands, recruits Americans for employment at the Hospital under an agreement signed with Saudi Arabia in 1973. Id., at 73.
In its recruitment effort, HCA placed an advertisement in a trade periodical seeking applications for a position as a monitoring systems engineer at the Hospital. The advertisement drew the attention of respondent Scott Nelson in September 1983, while Nelson was in the United States. After interviewing for the position in Saudi Arabia, Nelson returned to the United States, where he signed an employment contract with the Hospital, id., at 4, satisfied personnel processing requirements, and attended an orientation session that HCA conducted for Hospital employees. In the course of that program, HCA identified Royspec as the point of contact in the United States for family members who might wish to reach Nelson in an emergency. Id., at 33.
In December 1983, Nelson went to Saudi Arabia and began work at the Hospital, monitoring all "facilities, equipment, utilities and maintenance systems to insure the safety of patients, hospital staff, and others." Id., at 4. He did his job without significant incident until March 1984, when he discovered safety defects in the Hospital's oxygen and nitrous oxide lines that posed fire hazards and otherwise endangered patients' lives. Id., at 57-58. Over a period of several months, Nelson repeatedly advised Hospital officials of the safety defects and reported the defects to a Saudi Government commission as well. Id., at 4-5. Hospital officials instructed Nelson to ignore the problems. Id., at 58.
The Hospital's response to Nelson's reports changed, however, on September 27, 1984, when certain Hospital employees summoned him to the Hospital's security office where agents of the Saudi Government arrested him.1 The agents transported Nelson to a jail cell, in which they "shackled, tortured and bea[t]" him, id., at 5, and kept him four days without food. Id., at 59. Although Nelson did not understand Arabic, Government agents forced him to sign a statement written in that language, the content of which he did not know; a Hospital employee who was supposed to act as Nelson's interpreter advised him to sign "anything" the agents gave him to avoid further beatings. Ibid. Two days later, Government agents transferred Nelson to the Al Sijan Prison "to await trial on unknown charges." Ibid.
At the Prison, Nelson was confined in an overcrowded cell area infested with rats, where he had to fight other prisoners for food and from which he was taken only once a week for fresh air and exercise. Ibid. Although police interrogators repeatedly questioned him in Arabic, id., at 5, Nelson did not learn the nature of the charges, if any, against him. Ibid. For several days, the Saudi Government failed to advise Nelson's family of his whereabouts, though a Saudi official eventually told Nelson's wife, respondent Vivian Nelson, that he could arrange for her husband's release if she provided sexual favors. Ibid.
Although officials from the United States Embassy visited Nelson twice during his detention, they concluded that his allegations of Saudi mistreatment were "not credible" and made no protest to Saudi authorities. Id., at 64. It was only at the personal request of a United States Senator that the Saudi Government released Nelson, 39 days after his arrest, on November 5, 1984. Id., at 60. Seven days later, after failing to convince him to return to work at the Hospital, the Saudi Government allowed Nelson to leave the country. Id., at 60-61.
In 1988, Nelson and his wife filed this action against petitioners in the United States District Court for the Southern District of Florida seeking damages for personal injury. The Nelsons' complaint sets out 16 causes of action, which fall into three categories. Counts II through VII and counts X, XI, XIV, and XV allege that petitioners committed various intentional torts, including battery, unlawful detainment, wrongful arrest and imprisonment, false imprisonment, inhuman torture, disruption of normal family life, and infliction of mental anguish. Id., at 6-11, 15, 19-20. Counts I, IX, and XIII charge petitioners with negligently failing to warn Nelson of otherwise undisclosed dangers of his employment, namely, that if he attempted to report safety hazards the Hospital would likely retaliate against him and the Saudi Government might detain and physically abuse him without legal cause. Id., at 5-6, 14, 18-19. Finally, counts VIII, XII, and XVI allege that Vivian Nelson sustained derivative injury resulting from petitioners' actions. Id., at 11-12, 16, 20. Presumably because the employment contract provided that Saudi courts would have exclusive jurisdiction over claims for breach of contract, id., at 47, the Nelsons raised no such matters.
The District Court dismissed for lack of subject-matter jurisdiction under the Foreign Sovereign Immunities Act of 1976, 28 U.S.C. §§ 1330, 1602 et seq. It rejected the Nelsons' argument that jurisdiction existed, under the first clause of § 1605(a)(2), because the action was one "based upon a commercial activity" that petitioners had "carried on in the United States." Although HCA's recruitment of Nelson in the United States might properly be attributed to Saudi Arabia and the Hospital, the District Court reasoned, it did not amount to commercial activity "carried on the United States" for purposes of the Act. Id., at 94-95. The court explained that there was no sufficient "nexus" between Nelson's recruitment and the injuries alleged. "Although [the Nelsons] argu[e] that but for [Scott Nelson's] recruitment in the United States, he would not have taken the job, been arrested, and suffered the personal injuries," the court said, "this 'connection' [is] far too tenuous to support jurisdiction" under the Act. Id., at 97. Likewise, the court concluded that Royspec's commercial activity in the United States, purchasing supplies and equipment for the Hospital, id., at 93-94, had no nexus with the personal injuries alleged in the complaint; Royspec had simply provided a way for Nelson's family to reach him in an emergency. Id., at 96.
The Court of Appeals reversed. 923 F.2d 1528 (CA11 1991). It concluded that Nelson's recruitment and hiring were commercial activities of Saudi Arabia and the Hospital, carried on in the United States for purposes of the Act, id., at 1533, and that the Nelsons' action was "based upon" these activities within the meaning of the statute. Id., at 1533-1536. There was, the court reasoned, a sufficient nexus between those commercial activities and the wrongful acts that had allegedly injured the Nelsons: "the detention and torture of Nelson are so intertwined with his employment at the Hospital," the court explained, "that they are 'based upon' his recruitment and hiring" in the United States. Id., at 1535. The court also found jurisdiction to hear the claims against Royspec. Id., at 1536.2 After the Court of Appeals denied petitioners' suggestion for rehearing en banc, App. 133, we granted certiorari, 504 U.S. ----, 112 S.Ct. 2937, 119 L.Ed.2d 562 (1992). We now reverse.
The Foreign Sovereign Immunities Act "provides the sole basis for obtaining jurisdiction over a foreign state in the courts of this country." Argentine Republic v. Amerada Hess Shipping Corp., 488 U.S. 428, 443, 109 S.Ct. 683, 692, 102 L.Ed.2d 818 (1989). Under the Act, a foreign state is presumptively immune from the jurisdiction of United States courts; unless a specified exception applies, a federal court lacks subject-matter jurisdiction over a claim against a foreign state. Verlinden B.V. v. Central Bank of Nigeria, 461 U.S. 480, 488-489, 103 S.Ct. 1962, 1968-1969, 76 L.Ed.2d 81 (1983); see 28 U.S.C. § 1604; J. Dellapenna, Suing Foreign Governments and Their Corporations 11, and n. 64 (1988).
Only one such exception is said to apply here. The first clause of § 1605(a)(2) of the Act provides that a foreign state shall not be immune from the jurisdiction of United States courts in any case "in which the action is based upon a commercial activity carried on in the United States by the foreign state."3 The Act defines such activity as "commercial activity carried on by such state and having substantial contact with the United States," § 1603(e), and provides that a commercial activity may be "either a regular course of commercial conduct or a particular commercial transaction or act," the "commercial character of [which] shall be determined by reference to" its "nature," rather than its "purpose." § 1603(d).
There is no dispute here that Saudi Arabia, the Hospital, and Royspec all qualify as "foreign state[s]" within the meaning of the Act. Brief for Respondents 3; see 28 U.S.C. §§ 1603(a), (b) (term "foreign state" includes "an agency or instrumentality of a foreign state"). For there to be jurisdiction in this case, therefore, the Nelsons' action must be "based upon" some "commercial activity" by petitioners that had "substantial contact" with the United States within the meaning of the Act. Because we conclude that the suit is not based upon any commercial activity by petitioners, we need not reach the issue of substantial contact with the United States.
We begin our analysis by identifying the particular conduct on which the Nelsons' action is "based" for purposes of the Act. See Texas Trading & Milling Corp. v. Federal Republic of Nigeria, 647 F.2d 300, 308 (CA2 1981), cert. denied, 454 U.S. 1148, 102 S.Ct. 1012, 71 L.Ed.2d 301 (1982); Donoghue, Taking the "Sovereign" Out of the Foreign Sovereign Immunities Act: A Functional Approach to the Commercial Activity Exception, 17 Yale J.Int'l L. 489, 500 (1992). Although the Act contains no definition of the phrase "based upon," and the relatively sparse legislative history offers no assistance, guidance is hardly necessary. In denoting conduct that forms the "basis," or "foundation," for a claim, see Black's Law Dictionary 151 (6th ed. 1990) (defining "base"); Random House Dictionary 172 (2d ed. 1987) (same); Webster's Third New International Dictionary 180, 181 (1976) (defining "base" and "based"), 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. See Callejo v. Bancomer, S.A., 764 F.2d 1101, 1109 (CA5 1985) (focus should be on the "gravamen of the complaint"); accord, Santos v. Compagnie Nationale Air France, 934 F.2d 890, 893 (CA7 1991) ("An action is based upon the elements that prove the claim, no more and no less"); Millen Industries, Inc. v. Coordination Council for North American Affairs, 272 U.S.App.D.C. 240, 246, 855 F.2d 879, 885 (1988).
What the natural meaning of the phrase "based upon" suggests, the context confirms. Earlier, see n. 3, supra, we noted that § 1605(a)(2) contains two clauses following the one at issue here. The second allows for jurisdiction where a suit "is based . . . upon an act performed in the United States in connection with a commercial activity of the foreign state elsewhere," and the third speaks in like terms, allowing for jurisdiction where an action "is based . . . upon an act outside the territory of the United States in connection with a commercial activity of the foreign state elsewhere and that act causes a direct effect in the United States." Distinctions among descriptions juxtaposed against each other are naturally understood to be significant, see Melkonyan v. Sullivan, 501 U.S. ----, ----, 111 S.Ct. 2157, ----, 115 L.Ed.2d 78 (1991), and Congress manifestly understood there to be a difference between a suit "based upon" commercial activity and one "based upon" acts performed "in connection with" such activity. The only reasonable reading of the former term calls for something more than a mere connection with, or relation to, commercial activity.4
In this case, the Nelsons have alleged that petitioners recruited Scott Nelson for work at the Hospital, signed an employment contract with him, and subsequently employed him. While these activities led to the conduct that eventually injured the Nelsons, they are not the basis for the Nelsons' suit. Even taking each of the Nelsons' allegations about Scott Nelson's recruitment and employment as true, those facts alone entitle the Nelsons to nothing under their theory of the case. The Nelsons have not, after all, alleged breach of contract, see supra, at ____, but personal injuries caused by petitioners' intentional wrongs and by petitioners' negligent failure to warn Scott Nelson that they might commit those wrongs. Those torts, and not the arguably commercial activities that preceded their commission, form the basis for the Nelsons' suit.
Petitioners' tortious conduct itself fails to qualify as "commercial