Opinion ID: 782282
Heading Depth: 2
Heading Rank: 1

Heading: Prior to the FSIA's Enactment

Text: 12 Foreign sovereign immunity has been a recognized doctrine of American law since the seminal Supreme Court case The Schooner Exchange v. McFaddon, 11 U.S. (7 Cranch) 116, 3 L.Ed. 287 (1812). In The Schooner Exchange, two American citizens claimed ownership of a ship they alleged had been wrongfully seized by the French navy. The United States Attorney for the District of Pennsylvania filed a suggestion of immunity with the district court, thereby raising a question of sovereign immunity. Id. at 117-18. The Supreme Court agreed that immunity existed and dismissed the Americans' claim to the ship. Id. at 147. In an opinion by Chief Justice Marshall, the Court explained that the perfect equality and absolute independence of sovereign nations required that United States courts refrain from exercising jurisdiction over claims against other states. Id. at 137. 13 From that beginning until the FSIA's enactment in 1976, the executive branch played a prominent role in deciding whether a foreign sovereign was immune from suit in American courts. See Verlinden B.V. v. Cent. Bank of Nig., 461 U.S. 480, 486-87, 103 S.Ct. 1962, 76 L.Ed.2d 81 (1983); Restatement (Third) of Foreign Relations Law of the United States [hereafter Restatement 3d] pt. IV, ch. 5, subch. A, introductory note (1987). Foreign states sued in the United States often requested that the Department of State ask the Department of Justice to file a suggestion of immunity with the courts. See Restatement 3d, pt. IV, ch. 5, subch. A, introductory note. 14 Courts, for their part, usually deferred to the decision of the executive, reasoning that the preferable method of resolving disputes with friendly foreign states is not litigation but diplomatic negotiation, a matter within the authority and expertise of the executive branch. See Ex parte Republic of Peru, 318 U.S. 578, 586-87, 63 S.Ct. 793, 87 L.Ed. 1014 (1943); see also Republic of Mexico v. Hoffman, 324 U.S. 30, 35, 65 S.Ct. 530, 89 L.Ed. 729 (1945) (reasoning that the courts should not so act as to embarrass the executive arm in its conduct of foreign affairs). In the 1940s, the Supreme Court expressly endorsed deference to the executive as a guiding principle in determining whether a court should exercise or surrender its jurisdiction in such cases. Hoffman, 324 U.S. at 35, 65 S.Ct. 530; see also Peru, 318 U.S. at 586-87, 63 S.Ct. 793 (accepting a claim of immunity where the Secretary of State had undertaken to settle the dispute through diplomatic channels). 15 Prior to 1952, the United States adhered to the absolute theory of foreign sovereign immunity. See Restatement 3d, pt. IV, ch. 5, subch. A, introductory note. Under that theory, a sovereign cannot be sued in the courts of another state without that sovereign's consent, regardless of the nature of the activity giving rise to the action. See Letter from Jack B. Tate, Acting Legal Adviser, Department of State, to Philip B. Perlman, Acting Attorney General of the United States (May 19, 1952) [hereafter Tate Letter], reprinted in Alfred Dunhill of London, Inc. v. Republic of Cuba, 425 U.S. 682, 711-15, 96 S.Ct. 1854, 48 L.Ed.2d 301 (1976). As foreign states increasingly began to participate in international commerce, an alternative to the theory of absolute immunity emerged called the restrictive theory of sovereign immunity. See Restatement 3d pt. IV, ch. 5, subch. A, introductory note. Under that theory, a foreign state is immune from claims arising out of the state's governmental activities, but not immune from claims arising out of its commercial activities. See id. § 451, cmt. a. The United States adopted the restrictive theory in 1952 when the Department of State announced its formal change of policy in a letter from Acting Legal Adviser Jack Tate to the Acting Attorney General. See Tate Letter, reprinted in Alfred Dunhill, 425 U.S. at 714, 96 S.Ct. 1854. 16 After the Tate Letter, the State Department continued to decide most of foreign states' immunity claims. In those cases where the foreign government did not request the State Department's intervention, the duty to resolve the immunity question in the first instance fell to the courts. Verlinden, 461 U.S. at 487, 103 S.Ct. 1962. Sovereign immunity determinations were thus made in two different branches of government resulting in rules that were neither clear nor uniform. Id. at 488, 103 S.Ct. 1962; see also Danny Abir, Foreign Sovereign Immunities Act: The Right to a Jury Trial in Suits Against Foreign Government-Owned Corporations, 32 Stan. J. Int'l L. 159, 165 (1996) (discussing difficulties in application of the restrictive theory between 1952 and 1976); William R. Dorsey, III, Reflections on the Foreign Sovereign Immunities Act After Twenty Years, 28 J. Mar. L. & Com. 257, 259-60 (1997) (same). Litigation of claims against foreign states was further complicated by the absence of effective procedures for service of process and by the lack of satisfactory standards for execution of judgments against foreign states. See Abir, supra, at 165; Dorsey, supra, at 260. 17 As a result of these inadequacies Congress in 1976 enacted the FSIA, a statute aimed to free the Government from the case-by-case diplomatic pressures, to clarify the governing standards, and to `assur[e] litigants that ... decisions are made on purely legal grounds and under procedures that insure due process.' Verlinden, 461 U.S. at 488, 103 S.Ct. 1962 (quoting H.R.Rep. No. 94-1487, at 7 (1976), reprinted in 1976 U.S.C.C.A.N. 6604, 6606).