Document: 112 S.Ct. 2160 504 U.S. 607 119 L.Ed.2d 394 REPUBLIC OF ARGENTINA and Banco Central De La Republica Argentina, Petitioners,v.WELTOVER, INC., et al. No. 91-763. Argued April 1, 1992. Decided June 12, Syllabus As part of a plan to stabilize petitioner Argentina's currency, that country bank (collectively Argentina) issued bonds, called "Bonods," which provided for repayment in dollars through transfer on the market one several locations, including New York City. Concluding it lacked sufficient foreign exchange retire Bonods when they began mature, Argentina unilaterally extended time payment, offered bondholders substitute instruments as means rescheduling debts. Respondent bondholders, two Panamanian corporations Swiss bank, declined accept insisted York. When refused, respondents brought this breach-of-contract action District Court, denied motion dismiss. The Court Appeals affirmed, ruling had jurisdiction under Foreign Sovereign Immunities Act 1976 (FSIA), 28 U.S.C. § 1602 seq., subjects states suit American courts for, inter alia, acts taken "in connection with commercial activity" have "a direct effect United States," 1605(a)(2). Held: properly asserted FSIA. Pp. 610-620. (a) issuance was "commercial FSIA, maturity dates those with" activity within meaning government acts, not regulator market, but manner private player its actions are "commercial" Cf. Alfred Dunhill London, Inc. v. Republic Cuba, 425 682, 695-706, 96 1854, 1861-1867, 48 301 (plurality opinion). Moreover, because 1603(d) provides character an act is be determined by reference "nature" rather than "purpose," question whether acting profit motive or instead aim fulfilling uniquely sovereign objectives. Rather, issue government's particular (whatever behind them) type party engages commerce. almost all respects garden-variety debt instruments, and, even considered full context, there nothing about their analogous transaction. fact were created help currency valid basis distinguishing them from ordinary since, 1603(d), irrelevant why participated bond actor. It matters only did so. 612-617. (b) unilateral "direct States" Respondents designated accounts place made some interest payments into before announcing payments. Because thus performance ultimate contractual obligations, obligations necessarily effect" country: money supposed been delivered forthcoming. suggestion requirement cannot satisfied where plaintiffs no other connections untenable Verlinden B.V. Bank Nigeria, 461 480, 489, 103 1962, 1969, 76 81. assuming state may "person" purposes Due Process Clause Fifth Amendment, "minimum contacts" test International Shoe Co. Washington, 326 310, 316, 66 154, 158, 90 L.Ed. 95 issuing negotiable denominated payable appointing financial agent city. 617-620. 941 F.2d 145 (CA2 1991), affirmed. SCALIA, J., opinion unanimous Court. Richard J. Davis, City, petitioners. W. Cutler, respondents. Jeffrey P. Minear, D.C., amicus curiae special leave Justice SCALIA 1 This case requires us decide default certain bonds so subject court 1976, seq. 2 * Since mediums accepted international Argentine businesses engaging transactions must pay internationally currency. In recent past, difficult borrowers obtain such funds, principally instability To address these problems, petitioners, central Argentina), 1981 instituted insurance contract program (FEIC), effectively agreed assume risk depreciation cross-border involving borrowers. accomplished agreeing sell domestic borrowers, contractually predetermined amount local necessary repay debts matured, irrespective intervening devaluations. 3 Unfortunately, possess reserves cover FEIC contracts became due 1982. thereupon adopted emergency measures, refinancing FEIC-backed creditors bonds. These provide payment principal dollars; Frankfurt, Zurich, at election creditor. Under program, creditor option either accepting satisfaction initial debt, thereby substituting debtor, maintaining debtor/creditor relationship borrower guarantor. 4 mature May 1986, concluded them. Pursuant Presidential Decree, Respondents, who hold, collectively, $1.3 million Bonods, refused rescheduling, specifying should made. pay, then States Southern York, relying jurisdiction. Petitioners moved dismiss lack subject-matter jurisdiction, personal forum non conveniens. motions, 753 F.Supp. 1201 (S.D.N.Y.1991), 1991). We granted petition certiorari, challenged Appeals' determination that, Act, immune federal case. 502 ----, 858, 116 766 (1992). II 5 establishes comprehensive framework determining country, federal, exercise over state. "foreign shall unless statutorily defined exceptions applies. 1604 (emphasis added). FSIA "sole basis" obtaining States. See Amerada Hess Shipping Corp., 488 428, 434-439, 109 683, 688-690, 102 818 (1989). most significant FSIA's case—is exception 1605(a)(2), any 6 based upon carried state; performed elsewhere; outside territory elsewhere causes States." 7 proceedings below, relied third clause 1605(a)(2) establish F.2d, 149, our analysis therefore limited considering lawsuit (1) "based . States"; (2) country; (3) "cause[d] States."1 complaint alleges cause behalf each respondents, viz., claim attempt refinance according terms. compliance first three requirements—that (presumably extension)—is uncontested. dispute pertains issues turn. 8 amicus, States, contend of, continued liability under, constitute extension schedules activity. latter point obvious enough, does contest it; key 9 defines mean: 10 "[E]ither regular course conduct transaction act. nature act, purpose." 1603(d). 11 definition, however, leaves critical term largely undefined: sentence simply depend single conduct, second merely specifies what element determines commerciality (i.e., purpose), still without saying means. Fortunately, written clean slate. we noted, see 486-489, 1967-1969, 81 (1983), (and particular) codifies so-called "restrictive" theory immunity endorsed State Department 1952. generally attached restrictive statute enacted. McDermott Int'l, Wilander, 498 111 807, 866 (1991) ("[W]e uses [a art], Congress intended established meaning"); NLRB Amax Coal Co., 453 322, 329, 101 2789, 2794, 69 672 (1981); Morissette 342 246, 263, 72 240, 249-250, 288 (1952). 12 occasion discuss scope validity until decision 301. Although evenly divided applied foreign-sovereign-immunity context also availability act-of-state defense, compare id., S.Ct., 1861-1867 (plurality) 725-730, 1875-1878 (Marshall, dissenting), little disagreement general exception. plurality noted after 1952, lower consistently held sovereigns cases "arising out purely transactions," 703, 1865-66; citing, Victory Transport, Comisaria General, 336 354 1964), cert. denied, 381 934, 85 1763, 14 698 (1965), Petrol Corp. Kingdom Greece, 360 (CA2), 385 931, 87 291, 17 213 (1966). further recognized distinction between hand, other, entirely novel law. U.S., 695-696, 1861-1862, Parden Terminal R. 377 184, 189-190, 84 1207, 1211-1212, 233 (1964) (Eleventh Amendment immunity); Planters' Georgia, Wheat. 904, 907-908, 244 (1824) (same); 572, 579, 313, (1946) (opinion Frankfurter, J.) (tax States); South Carolina 199 437, 461-463, 26 110, 116-117, 50 261 (1905) (same). stated would bar state's participation marketplace citizen corporation. 698-705, 1863-1866. A activities "do[es] powers peculiar sovereigns"; rather, "exercise[s] can exercised citizens." Id., 704, 1866. dissenters disagree description, 725, 1875-1876. Given enacted less six months announced, think plurality's contemporaneous description then-prevailing assistance construing Act. 13 accord conclude it, sovereign's performs "trade traffic commerce," Black's Law Dictionary 270 (6th ed. 1990). See, e.g., Rush-Presbyterian-St. Luke's Medical Center Hellenic Republic, 877 574, 578 (CA7), 493 937, 110 333, 107 322 Thus, regulations limiting activity, authoritative control commerce party; whereas buy army boots bullets companies similarly use sales acquire goods, see, Stato di Rumania Trutta, [1926] Foro It. I 584, 585-586, 589 (Corte Cass. del Regno, Italy), translated reprinted Am.J.Int'l L. 626-629 (Supp.1932). confirmed instruments: parties; traded (except Argentina); promise future stream cash income. recognize prior enactment authority suggesting public (dicta). There is, distinctive assumption (other perhaps purpose) always classified jure imperii, regard Transport expressed confusion "purpose" controlling commerciality, 359-360. has now clearly governs, perceive concluding treated categorically different states. 15 contends although bars consideration nonetheless fully consider order determine "commercial." Accordingly, claims erred defining relevant considers overly generalized, acontextual essentially adopting per se rule "issuance instruments" 151 (" '[I]t self-evident [the FSIA]' "), quoting Shapiro Bolivia, 930 1013, 1018 rule, seems 16 points consequence raising capital financing acquisitions. Assuming sake argument example judging purpose, ready answer parties regularly just raise finance purchases, debt. That here: virtue earlier contracts, already obligated supply needed FEIC-insured debts; allowed restructure existing obligations. asserts (without proof elaboration) "received [for Bonods] way commensurate [their] value," Brief 22. true, makes difference. Engaging require receipt fair value, common-law requirements consideration. argues differ "were Government fulfill designed credit crisis, component nation's shortage exchange." 23-24. regard, relies heavily Sanchez de Nicaragua, 770 1385 (CA5 1985), Circuit took view "[o]ften, essence purpose"; "we inquire nature"; light purpose Nicaragua's refusal honor check entitled immunity. 1393. Indeed, line rests "formalistic [that] neither useful nor warranted." Reply 8. squarely foreclosed language However separate reason activity) outward form agrees perform), Sanchez, supra, 1393, unmistakably commands done. agree Appeals, 151, actor; B 18 remaining addressing issue, rejected legislative history "direct" both "substantial" "foreseeable." 152; contra, America West Airlines, GPA Group, Ltd., 793, 798-800 (CA9 1989); Zernicek Brown & Root, Inc., 826 415, 417-419 1987), 484 1043, 108 775, 98 862 (1988); Maritime Int'l Nominees Establishment Guinea, 224 U.S.App.D.C. 119, 135-136, 693 1094, 1110-1111 (1982), 464 815, 104 71, 78 (1983); Ohntrup Firearms 516 1281, 1286 (EDPa.1981), aff'd, 760 259 (CA3 1985). found House Report, covered "consistent principles set forth section 18, Restatement Law, Second, Relations (1965)." H.R.Rep. 94-1487, pp. 19, U.S.Code Cong. Admin.News 6604, 6618 (1976). Section laws given extraterritorial application except respect has, foreseeable result," obviously deals legislate adjudicate, passage Report charitably described bit sequitur," Texas Trading Milling Federal 647 300, 311 1981), 454 1148, 1012, 71 (1982). Of applicable principle minimis curat lex ensures predicated trivial effects But reject contains unexpressed "substantiality" "foreseeability." recognized, if follows "as immediate defendant's activity," 152. 19 sufficiently "Congress wanted entertain action" preserve City's status preeminent center." 153. question, "would wanted" happy endorse Second Circuit's recognition "New York's world leader," diminishing (assuming too speculative all) remote attenuated satisfy Ibid. 20 difficulty States: Money deposit expressly permits plaintiff sue substantive satisfied," 1969. 21 Finally, finding violate avoid difficulty, construe embodying (1945).2 Assuming, deciding, Clause, cf. Katzenbach, 383 301, 323-324, 86 803, 815-816, 769 (1966) (States Union "persons" Clause), find possessed constitutional test. By city, " 'purposefully avail[ed] itself privilege conducting [United States],' Burger King Rudzewicz, 471 462, 475, 105 2174, 2183, 528 (1985), Hanson Denckla, 357 235, 253, 1228, 1240, 1283 (1958). 22 23 FSIA; States; rescheduling. judgment 24 Affirmed. undisputed states" 1603(a), ("[F]oreign state" includes "agenc[ies] instrumentalit[ies] state"). concedes "is aid interpreting Act" "[w]hether [Argentina] independent question." 36, n. 33.

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