Document: 461 U.S. 480 103 S.Ct. 1962 76 L.Ed.2d 81 VERLINDEN B.V., Petitionerv.CENTRAL BANK OF NIGERIA. No. 81-920. Argued Jan. 11, 1983. Decided May 23, Syllabus A contract between the Federal Republic of Nigeria and petitioner Dutch corporation for purchase cement by provided that was to establish a confirmed letter credit price. Subsequently, sued respondent bank, an instrumentality Nigeria, in District Court, alleging certain actions constituted anticipatory breach credit. Petitioner alleged jurisdiction under provision Foreign Sovereign Immunities Act 1976 (Act), 28 U.S.C. § 1330(a), granting federal district courts without regard amount controversy "any nonjury civil action against foreign state . as any claim relief personam with respect which is not entitled immunity either sections 1605-1607 this title or applicable international agreement." The while holding permitted plaintiffs, dismissed on ground none exceptions sovereign specified applied. Court Appeals affirmed but exceeded scope Art. III Constitution, provides, part, judicial power United States shall extend "all Cases arising [the] Laws States, Treaties made their authority," "Controversies State, Citizens thereof, Citizens, Subjects." court held neither Diversity Clause nor "Arising Under" broad enough support over plaintiffs sovereigns. Held: 1. For most codifies, matter law, restrictive theory confined suits involving sovereign's public acts does cases out its strictly commercial acts. If one applies, may exercise subject-matter if fall within exceptions, lacks such jurisdiction. Pp. 486-489. 2. On face, 1330(a) allows plaintiff sue substantive requirements are satisfied. contains no indication limitation based plaintiff's citizenship. And, when considered whole, legislative history reveals intent limit brought American citizens. 489-491. 3. Congress did exceed sovereigns where rule decision be law. While jurisdiction, appropriate basis statutory grant In enacting Act, expressly exercised regulate commerce, along other I powers. merely concern access rather governs types liable codifies standards governing aspect Thus, suit necessarily involves application comprehensive body hence "arises under" law meaning III. 491-497. 4. Since Appeals, affirming find it necessary address question whether present fell exception immunity, remand must consider exists itself. 497-498. 647 F.2d 320 (2nd Cir., 1981), reversed remanded. Abram Chayes, Washington, D.C., petitioner. Paul M. Bator, Cambridge, Mass., U.S., amicus curiae, special leave Court. Stephen N. Shulman, judgment below, Chief Justice BURGER delivered opinion 1 We granted certiorari 1976, authorizing non-federal cause action, violates Article Constitution. 2 * April 21, 1975, Verlinden principal offices Amsterdam, Netherlands, entered into providing 240,000 metric tons Nigeria. parties agreed would governed laws Netherlands disputes resolved arbitration before International Chamber Commerce, Paris, France. 3 Nigerian government irrevocable, total price through Slavenburg's Bank Amsterdam. According petitioner's amended complaint, however, Central improperly established unconfirmed payable Morgan Guaranty Trust Company New York.1 4 August subcontracted Liechtenstein corporation, Interbuco, needed fulfill contract. Meanwhile, ports had become clogged hundreds ships carrying cement, sent numerous suppliers whom also contracts.2 mid-September, unilaterally directed correspondent banks, including Guaranty, adopt series amendments all letters issued connection contracts. directly notified payment only those shipments approved two months arrival waters.3 5 then Southern York, Bank's 1330.4 Respondent moved dismiss for, among reasons, lack subject personal 6 first sovereign. Although clearly reveal intended Judge Weinfeld reasoned language "broad embracing. It confers 'any action' state." 488 F.Supp. 1284, 1292 (S.D.N.Y.1980). Moreover, Court's view, allowing sovereigns, initiated effectuate "the Congressional purpose concentrating litigation states order aid development uniform assertions immunity." Ibid. extends corporations stating: 7 "[The Act] imposes single, standard applied uniformly both hearing claims states. consequence, even though grounded upon common case 'arises under' because complaint compels immunity. short, injects essential element states." 8 nevertheless unless applies. After carefully considering each relied, concluded applied, accordingly action.5 9 Second Circuit affirmed, different grounds. (CA2 1981). properly construed permit plaintiffs. held, view diversity clause6 "arising clause7 sovereigns; case, dismissal action.8 10 certiorari, 454 1140, 102 997, 71 291 (1982), we reverse remand. II 11 more than century half, generally complete from country. Schooner Exchange v. M'Faddon, Cranch 116, L.Ed. 287 (1812), Marshall that, nation own territory "is susceptible imposed itself," id., at 136, impliedly waived activities narrow armed ship found our port, came regarded extending virtually absolute See, e.g., Berizzi Brothers Co. S.S. Pesaro, 271 562, 46 611, 70 1088 (1926); von Mehren, 17 Colum.J. Transnat'l L. 33, 39-40 (1978). 12 As clear, grace comity part restriction Accordingly, consistently has deferred decisions political branches—in particular, Executive Branch—on take instrumentalities. Ex parte Peru, 318 578, 586-590, 63 793, 798-800, 87 1014 (1943); Mexico Hoffman, 324 30, 33-36, 65 530, 531-533, 89 729 (1945). 13 Until 1952, State Department ordinarily requested friendly But so-called Tate Letter,9 announced adoption "restrictive" Under theory, acts, state's 14 initially enacted proved troublesome. past, initial responsibility deciding questions primarily acting Department, abided "suggestions immunity" Department. nations often placed diplomatic pressure seeking occasion, considerations led suggestions have been available theory.10 15 An additional complication posed fact always make requests cases, determine existed, reference prior decisions. See Lowenfeld, Claims States—A Proposal Reform Law, 44 N.Y.U.L.Rev. 901, 909-912 (1969). determinations were branches, variety factors, sometimes considerations. Not surprisingly, clear 906-909; Weber, 1976: Its Origin, Meaning Effect, Yale Stud. World Pub. Order 1, 11-13, 15-17 (1976). 16 passed free Government case-by-case pressures, clarify standards, "assur[e] litigants purely legal grounds procedures insure due process," H.R.Rep. 94-1487, p. (1976), reprinted [1976] U.S.Code Cong. & Ad.News 6604. To accomplish these objectives, set every subdivisions, agencies normally immune courts, 1604, §§ 1605 1607. Those include explicitly 1605(a)(1), carried causing direct effect 1605(a)(2).11 When same manner extent private individual like circumstances," 1606.12 18 provides control States," id. thus contemplates courts. However, "[i]n potential sensitivity importance developing area," 32, guarantees right remove court, 1441(d). outset 1330(a).13 1330(a); jurisdiction.14 ensured 1604. 19 purports allow agree. 20 statute unambiguous. grants non-jury immunity," 1330(a). citizenship plaintiff. 21 less regard. House Report recites provide 1605-1607," (emphasis added), "to how can maintain lawsuit entities," added). At another point, refers growing number "American citizens" states, 6-7, expresses desire ensure "our citizens courts," 22 Notwithstanding citizens," conclude aware [might be] turned small 'international claims[,]' open comers litigate dispute party anywhere world." Testimony Bruno A. Ristau, Hearings H.R. 11315, 31. reveals, protected danger restricting class provisions requiring some form substantial contact States. 1605.15 satisfies regardless plaintiff.16 IV 23 now turn core presented case: Constitution 24 This firmly expand beyond bounds Hodgson Bowerbank, 303, 108 (1809); Kline Burke Constr. Co., 260 226, 234, 43 79, 82, 67 226 (1923). Within sources Act: clause clause.17 clause, controversies "a covers Yet sufficiently since [a] Citize[n] thereof." Mossman Higginson, Dall. 12, 720 (1800).18 conclude, Act. 25 controlling Marshall's Osborn Wheat. 738, 204 (1824). Osborn, upheld constitutionality causes There, "judicial department receive construing law" Legislature constitutionally make," 818. laid down that: 26 "[I]t sufficient foundation up party, defeated construction constitution sustained opposite construction." Id., 822. 27 reflects conception according confer might call breadth conclusion questioned. observed taken broadest, read permitting "assertion original remote possibility presentation question." Textile Workers Union Lincoln Mills, 353 448, 482, 77 923, 934, 972 (1957) (Frankfurter, J., dissenting). P. Mishkin, D. Shapiro H. Wechsler, Hart Wechsler's Courts System 866-867 (2d ed. 1973). need resolve issue decide precise boundaries involve mere speculative arise point proceeding. Rather, raises very outset, term used By reason authority commerce relations, undisputed decide, what circumstances should amenable Actions raise sensitive issues concerning relations primacy concerns evident. Banco Nacional de Cuba Sabbatino, 376 398, 423-425, 84 937-938, 804 (1964); Zschernig Miller, 389 429, 440-441, 88 664, 670-671, 683 (1968). 29 promote interests, powers19 comprehensively regulating amenability sovereign, depends existence 1330(a).20 threshold state, therefore, satisfy itself applies—and doing so apply detailed forth arises purposes 30 reaching contrary conclusion, relied heavily 1331, general particular emphasis "well-pleaded complaint" rule, appear face well-pleaded enter anticipation defense. Louisville Nashville R. Mottley, 211 149, 42, 53 126 (1908); Gully First National Bank, 299 109, 57 96, (1936); C. Wright, Miller E. Cooper, Practice Procedure 3562 (1975) (hereinafter Cooper). arose solely defense, Verlinden's complaint. 31 1331 parallels III, never identical Quite true. Section statute, although broadly phrased, 32 "has continuously limited light produced it, demands coherence, dictates sound policy emerged [statute's] function mosaic judiciary legislation. expounding." Romero Terminal Operating 358 354, 379, 79 468, 484, 769 (1959) 33 accompanying footnote, further observed, "Of course many limitations constitutional courts." 379 n. 51, S.Ct., 484 51. reiterated Powell McCormack, 395 486, 515, 1944, 1960, 491 Shoshone Mining Rutter, 177 505, 506, 726, 864 (1900). broader Appeals' heavy reliance misplaced.21 34 rejecting noted 1330, jurisdictional provision.22 Because this, felt compelled rejected attempts simply statutes. (1800), example, purporting "where alien party" aliens. And Propeller Genesee Fitzhugh, How. 443, 451-453, 1058 (1852), upholding vessels Great Lakes maritime regulation could based. 35 From apparently constitute arises, purposes. statutes sought do nothing cases. stated Chief, "The regulations new courts; object purpose. evident Congress, passing [the law], intend commerce. ." How., 451 36 contrast, 19, supra. indicates, primary "se[t] rules 12; scheme. state. see supra, 588, 799; 36, 533; applying will require interpretation points Finally, determines barred raising his States—manifestly, Wheat., That inquiry labeled affect Congress' calling regulatory statute. 37 pursuant unquestioned powers, framework doing, deliberately channel away thereby reducing multiplicity conflicting results 50 resulting V 38 consistent end case. supported entails terms 39 after satisfying exception. question.23 agrees issue, end. If, hand, concludes exist remanded proceedings. 40 ordered. acted advising bank; undertook independent guaranteeing 109 contracts 68 suppliers. description background events, Texas Trading Milling Corp. 300, 303-306 cert. denied, 1148, 1012, 301 (1982). seriously unilateral violations Uniform Customs Documentary Credits (Int'l Comm. Brochure 222) (1962 Revision), which, stipulation parties, applicable. B.V. 1288 2, provides: "(a) defined section 1603(a) agreement. "(b) Personal subsection (a) service 1608 title." "for jurisdiction." (otherwise known "competence") "not agreement;" 1330(b) wherever process therefore signified absence competence Controversies Const., cl. Power [of States] made, Authority." announced, intervene rehearing complied 2403, requires action" affecting interest drawn question, certify Attorney General." denied motion explanation, Petition 55a. Letter Jack B. Tate, Acting Legal Adviser, General Philip Perlman (May 1952), Dep't Bull. 984-985 (1952), Alfred Dunhill London, Inc. Cuba, 425 682, 711, 96 1854, 1869, 48 (1976) (Appendix WHITE, J.). Monroe Leigh, 11315 Subcommittee Administrative Law Governmental Relations Committee Judiciary, 94th Cong., 2d Sess., 34-35 (1976); Immunity—The Case "Imias", Am.J.Int'l 280 (1974); Note, Giving Plaintiff His Day Ford.L.Rev. 543, 548-549 (1977). "in rights property violation issue," 1605(a)(3); real estate inherited gift located 1605(a)(4); noncommercial torts 1605(a)(5); liens, 1605(b); counterclaims, 1606 somewhat modifies liability punitive damages wrongful death actions. "[T]o encourage bringing 13, specifies "without controversy." situation, 5, waived, seen normal pattern whether, waiving consent wholly unrelated traditional doctrine forum non conveniens. Kane, Suing Sovereigns: Procedural Compass, Stanford L.Rev. 385, 411-412 (1982); Suits Foreigners Against Courts: Selective Expansion Jurisdiction, 90 L.J. 1861, 1871-1873 (1981). Prior passage govern occasion see, J. Zeevi Sons Grindlays N.Y.2d 220, 333 N.E.2d 168, 371 N.Y.S.2d 892, 423 866, 126, 95 (1975). prohibit removed court. 489. proper alternative argument "protective Theory Protective 933 "minimal diversity," Farm Fire Casualty Tashire, 386 523, 1199, 1203, 270 (1967), least citizen State. legislation, specifically powers prescribe I, 8, 9; define offenses "Law Nations," 10; nations, 3; execute Government's 18. "sovereign affirmative defense specially pleaded," 17. turns appearance assert still unavailable Citing (1900), recognized implied" 1331. major whole Act's "comprehensive 12. prescribes commencing lawsuits attachment execution obtained addition, defines "Extent Liability," setting "liable individual," 1606. resolution renders action. Cooper 3563, 418-419. several related suppliers, existed Nigeria's nature "cause[d] 1605(a)(2) 310-313 1148 Each involved supplier operating however. inapplicable, concluding repudiation "caused direct, substantial, injurious States." F.Supp., 1299-1300.

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