Court Opinion

ID: 4180403
Source: CourtListenerOpinion
Date Created: 2017-06-23 15:06:01.133591+00
Date Added: 2024-06-11T14:38:37.996876
License: Public Domain

United States Court of Appeals
         FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued February 6, 2017                Decided June 23, 2017

                         No. 16-7051

                 BUDHA ISMAIL JAM, ET AL.,
                      APPELLANTS

                              v.

          INTERNATIONAL FINANCE CORPORATION,
                      APPELLEE

        Appeal from the United States District Court
                for the District of Columbia
                    (No. 1:15-cv-00612)

     Richard L. Herz argued the cause for appellants. With him
on the briefs were Marco B. Simons and Michelle C. Harrison.

    Deepak Gupta was on the brief for amicus curiae Daniel
Bradlow in support of appellants.

   Jennifer Green was on the brief for amicus curiae Dr. Erica
Gould in support of appellants.

    Francis A. Vasquez, Jr. argued the cause for appellee. With
him on the brief was Maxwell J. Hyman.

    Jeffrey T. Green and Sena N. Munasifi were on the brief for
                                  2

amicus curiae The International Bank for Reconstruction and
Development, et al. in support of appellee.

    Before: PILLARD, Circuit Judge, and EDWARDS and
SILBERMAN, Senior Circuit Judges.

    Opinion for the Court filed by Senior Circuit Judge
SILBERMAN.

     Concurring opinion filed by Circuit Judge PILLARD.

     SILBERMAN, Senior Circuit Judge: Appellants, a group of
Indian nationals, challenge a district court decision dismissing
their complaint against the International Finance Corporation
(IFC) on grounds that the IFC is immune from their suit. The
IFC provided loans needed for construction of the Tata Mundra
Power Plant in Gujarat, India. Appellants who live near the
plant alleged—which the IFC does not deny—that contrary to
provisions of the loan agreement, the plant caused damage to the
surrounding communities. They wish to hold the IFC
financially responsible for their injuries, but we agree with the
well-reasoned district court opinion that the IFC is immune to
this suit under the International Organizations Immunities Act,
and did not waive immunity for this suit in its Articles of
Agreement.

                                  I.

     Appellants are fishermen, farmers, a local government
entity, and a trade union of fishworkers. They assert that their
way of life has been devastated by the power plant.1

     1
       Appellants’ complaint paints a dismal picture. For example, the
plant’s cooling system discharges thermal pollution into the sea,
killing off marine life on which fishermen rely for their income.
                                  3

     The IFC, headquartered in Washington, is an international
organization founded in 1956 with over 180 member countries.
It provides loans in the developing world to projects that cannot
command private capital. IFC Articles, art. III §3(i), Dec. 5,
1955, 7 U.S.T. 2197, 264 U.N.T.S. 117. The IFC loaned $450
million to Coastal Gujarat Power Limited, a subsidiary of Tata
Power, an Indian company, for construction and operation of the
Tata Mundra Plant. The loan agreement, in accordance with
IFC’s policy to prevent social and environmental damage,
included an Environmental and Social Action Plan designed to
protect the surrounding communities. The loan’s recipient was
responsible for complying with the agreement, but the IFC
retained supervisory authority and could revoke financial
support for the project.

     Unfortunately, according to the IFC’s own internal audit
conducted by its ombudsman, the plant’s construction and
operation did not comply with the Plan. And the IFC was
criticized by the ombudsman for inadequate supervision of the
project. Yet the IFC did not take any steps to force the loan
recipients into compliance with the Plan.

     The appellants’ claims are almost entirely based on tort:
negligence, negligent nuisance, and trespass. They do, however,
raise a related claim as alleged third party contract beneficiaries
of the social and environmental terms of the contract.
According to appellants, the IFC is not immune to these claims,

Saltwater intrusion into the groundwater—a result of the plant’s
construction—means that farmers can no longer use that water for
irrigation. (In fact, the villagers must purchase elsewhere freshwater
necessary for consumption.) And because the plant is coal-powered,
coal must be transported from nine miles away on an open-air
conveyor system. During that relocation, coal dust and ash disperse
into the atmosphere and contaminate the surrounding land and air.
                                4

and, even if it was statutorily entitled to immunity, it has waived
immunity.

                                II.

     Appellants are swimming upriver; both of their arguments
run counter to our long-held precedent concerning the scope of
international organization immunity and charter-document
immunity waivers.

     The IFC relies on the International Organizations
Immunities Act (IOIA), which provides that international
organizations “shall enjoy the same immunity from suit . . . as
is enjoyed by foreign governments, except to the extent that
such organizations may expressly waive their immunity for the
purpose of any proceedings or by the terms of any contract.” 22
U.S.C. § 288a(b). The President determines whether an
organization is entitled to such immunity. 22 U.S.C. § 288. The
IFC has been designated an international organization entitled
to the “privileges, exemptions, and immunities” conferred by the
statute. Exec. Order No. 10,680, 21 Fed. Reg. 7,647 (Oct. 5,
1956).

     In response to the IFC’s claim of statutory entitlement under
the IOIA, appellants rather boldly assert that Atkinson v. Inter-
Am. Dev. Bank, 156 F.3d 1335 (D.C. Cir. 1998), our leading
case on the immunity of international organizations under that
statute, should not be followed. Atkinson held that foreign
organizations receive the immunity that foreign governments
enjoyed at the time the IOIA was passed, which was “virtually
absolute immunity.” Id. at 1340 (quoting Verlinden B.V. v.
Central Bank of Nigeria, 461 U.S. 480, 486 (1983)). And that
immunity is not diminished even if the immunity of foreign
governments has been subsequently modified, particularly by
the widespread acceptance and codification of a “commercial
                               5

activities exception” to sovereign immunity. E.g., 28 U.S.C.
§ 1605(a)(2).

     Attacking Atkinson, appellants make two related
contentions. First, Atkinson was wrong to conclude that when
Congress tied the immunity of international organizations to
foreign sovereigns, it meant the immunity foreign sovereigns
enjoyed in 1945. Instead, according to appellants, who echo the
arguments pressed in Atkinson itself, lawmakers intended the
immunity of the organizations to rise or fall—like two boats tied
together—with the scope of the sovereigns’ immunity. In other
words, even assuming foreign sovereigns enjoyed absolute
immunity in 1945, if that immunity diminished, as it has with
the codification of the commercial activity exception, Congress
intended that international organizations fare no better.

     The problem with this argument—even if we thought it
meritorious, which we do not—is that it runs counter to
Atkinson’s holding, which explicitly rejected such an evolving
notion of international organization immunity. See 156 F.3d at
1341. We noted that Congress anticipated the possibility of a
change to immunity of international organizations, but explicitly
delegated the responsibility to the President to effect that
change—not the judiciary. Id. Morever, when considering the
legislation, Congress rejected a commercial activities
exception—which is exactly the evolutionary step appellants
wish to have us adopt. Id. As the district court recognized, we
recently reaffirmed Atkinson, saying that the case “remains
vigorous as Circuit law.” Nyambal v. Int’l Monetary Fund, 772
F.3d 277, 281 (D.C. Cir. 2014).

    Recognizing that a frontal attack on Atkinson’s holding
would require an en banc decision, appellants next argued that
we can, and should, bypass its precedential impact because the
Supreme Court has undermined its premise—that in 1945 the
                               6

immunity of foreign sovereigns was absolute (or virtually
absolute).

     To be sure, the Court has said in dicta that in 1945, courts
“‘consistently . . . deferred to the decisions of the political
branches—in particular, those of the Executive Branch—on
whether to take jurisdiction’ over particular actions against
foreign sovereigns . . . .” Republic of Austria v. Altmann, 541
U.S. 677, 689 (2004) (quoting Verlinden, 461 U.S. at 486).
But as a matter of practice, at that time, whenever a foreign
sovereign was sued, the State Department did request sovereign
immunity. Id. The only arguable exception involved a lawsuit
in rem against a ship owned but not possessed by Mexico; it was
not a suit against Mexico. See Republic of Mexico v. Hoffman,
324 U.S. 30 (1945). And, even if appellants are correct that the
executive branch played an important role in immunity
determinations in 1945, that does not diminish the absolute
nature of the immunity those sovereigns enjoyed; although
Supreme Court dicta refers to the mechanism for conferring
immunity on foreign sovereigns in 1945, Executive Branch
intervention does not speak to the scope of that immunity.

     In any event, the holding of Atkinson—regardless how one
characterizes the immunity of foreign sovereigns in 1945—was
that international organizations were given complete immunity
by the IOIA unless it was waived or the President intervened.
And as we noted, that holding was reaffirmed in Nyambal after
the Supreme Court dicta on which appellants primarily rely.
Therefore, we conclude our precedent stands as an impassable
barrier to appellants’ first argument.

                              III.

     That brings us to the waiver argument. There is no question
that the IFC has waived immunity for some claims. Indeed, its
                                 7

charter, read literally, would seem to include a categorical
waiver.2 But our key case interpreting identical waiver language
in the World Bank charter, Mendaro v. World Bank, 717 F.2d
610 (D.C. Cir. 1983), read that language narrowly to allow only
the type of suit by the type of plaintiff that “would benefit the
organization over the long term,” Osseiran v. Int’l Fin. Corp.,
552 F.3d 836, 840 (D.C. Cir. 2009) (citing Atkinson, 156 F.3d at
1338 and Mendaro, 717 F.2d at 618).3

    2
        The Articles of Agreement contains the following provision,
titled “Position of the Corporation with Regard to Judicial Process”:

    Actions may be brought against the Corporation only in a court
    of competent jurisdiction in the territories of a member in which
    the Corporation has an office, has appointed an agent for the
    purpose of accepting service or notice of process, or has issued
    or guaranteed securities. No actions shall, however, be brought
    by members or persons acting for or deriving claims from
    members. The property and assets of the Corporation shall,
    wheresoever located and by whomsoever held, be immune from
    all forms of seizure, attachment or execution before the delivery
    of final judgment against the Corporation.

IFC Articles, art. 6, § 3(vi). That provision carries “full force and
effect in the United States” under the International Finance
Corporation Act. 22 U.S.C. § 282g.
    3
       Appellants argue that Mendaro impermissibly overruled our
earlier case, Lutcher S.A. Celulose e Papel v. Inter-American
Development Bank, 832 F.2d 454 (D.C. Cir. 1967), without an
intervening Supreme Court or en banc decision. Appellants rely on
dicta in Lutcher, but its holding was that the Inter-American
Development Bank waived immunity to a breach of contract suit by
a debtor. 382 F.2d at 456-68. Mendaro expressly considered the
rationale of Lutcher and declined to extend its holding to the suit
before it. 717 F.2d at 614-17. Indeed, the Mendaro test emerged in
part from Lutcher’s discussion that the charter language at issue
                                 8

     To be sure, it is a bit strange that it is the judiciary that
determines when a claim “benefits” the international
organization; after all, the cases come to us when the
organizations deny the claim, and one would think that the
organization would be a better judge as to what claims benefit
it than the judiciary. Perhaps that is why Osseiran, when
applying Mendaro, refers to long-term goals, rather than
immediate litigating tactics.

     But whether or not the Mendaro test would be better
described using a term different than “benefit,” it is the Mendaro
criteria we are obliged to apply. Ironically, the line of cases
applying Mendaro ended up tying waiver to commercial
transactions, so there is a superficial similarity to the
commercial activities test that appellants would urge us to
accept. But whatever the scope of the commercial activities
exception to sovereign immunity, that standard is necessarily
broader than the Mendaro test; if that exception applied to the
IFC, the organization would never retain immunity since its
operations are solely “commercial,” i.e., the IFC does not
undertake any “sovereign” activities.

     The Mendaro test instead focused on identifying those
transactions where the other party would not enter into
negotiations or contract with the organization absent waiver.
See 717 F.2d at 617 (inferring waiver only insofar as “necessary
to enable the [organization] to fulfill its functions”). Mendaro
provided examples: suits by debtors, creditors, bondholders, and
“those other potential plaintiffs to whom the [organization]
would have to subject itself to suit in order to achieve its
chartered objectives.” Id. at 615.

indicated waiver where “vulnerability to suit contributes to the
effectiveness of the [organization’s] operations.” Lutcher, 382 F.2d
at 456.
                                 9

     We have stretched that concept to include a claim of
promissory estoppel, see Osseiran, 552 F.3d at 840-41, and a
quasi-contract claim of unjust enrichment, see Vila v. Inter-Am.
Invest. Corp., 570 F.3d 274, 278-80 (D.C. Cir. 2009). But all
the claims we have accepted have grown out of business
relations with outside companies (or an outside individual
engaged directly in negotiations with the organization).4
Compare Lutcher S.A. Celulose e Papel v. Inter-Am. Dev. Bank,
382 F.2d 454 (D.C. Cir. 1967) (finding waiver in debtors’ suit
to enforce loan agreement) with Mendaro, 717 F.2d at 611
(rejecting employee sexual harassment and discrimination
claim); Atkinson, 156 F.3d at 1336 (rejecting garnishment
proceeding against organization employee).

    Appellants attempt to define “benefit” more broadly. They
argue that holding the IFC to the very environmental and social
conditions it put in the contract, conditions which the IFC itself
formulated, would benefit the IFC’s goals. Even though
appellants had no commercial relationship with the IFC (other
than, allegedly, as third party beneficiaries of the loan
agreement’s requirements), they contend that the IFC will
benefit from their lawsuit because they are attempting to hold
the IFC to its stated mission and to its own compliance
processes. They argue that obtaining “community support” is a

    4
       Appellants do present a third party beneficiary claim, which,
unlike their other claims, sounds in principles of contract law. We
have previously found the distinction between contract and non-
contract claims relevant. See Vila 570 F.3d at 280 n.3. But even if
appellants qualified as third party beneficiaries, a point we do not
address, they were not a necessary negotiating party. Accordingly,
inferring waiver in this case stands at odds with the reasoning in
Mendaro, i.e., that Mendaro implies waiver when the parties
negotiated with the background of international organization
immunity.
                                 10

required part of any IFC project, and suggest that communities
will be unlikely to support IFC projects if the IFC is not
amenable to suit. Appellants’ ability to enforce the requirement
that the IFC protect surrounding communities is as central to the
IFC’s mission as a commercial partner’s ability to enforce the
requirement that the IFC pay its electricity bill.

     But Mendaro drew another distinction between claims that
survive and those that don’t. Those claims that implicate
internal operations of an international organization are
especially suspect because claims arising out of core operations,
not ancillary business transactions, would threaten the policy
discretion of the organization. Accord Vila, 570 F.3d at 286-89
(Williams, J., dissenting).

     That notion applies here. Should appellants’ suit be
permitted, every loan the IFC makes to fund projects in
developing countries could be the subject of a suit in
Washington.5 Appellee’s suggestion that the floodgates would
be open does not seem an exaggeration. Finally, if the IFC’s
internal compliance report were to be used to buttress a claim
against the IFC, we would create a strong disincentive to
international organizations using an internal review process. So
even though appellants convince us that the term “benefit” is
something of a misnomer—its claim in some sense can be
thought of as a “benefit”—it fails the Mendaro test.

    Accordingly, the district court decision is affirmed.

                                                        So ordered.

    5
     We need not reach appellee’s alternative argument that this case
may be dismissed under the doctrine of forum non conveniens.
     PILLARD, Circuit Judge, concurring: I agree that Atkinson
and Mendaro, which remain binding law in this circuit, control
this case. I write separately to note that those decisions have
left the law of international organizations’ immunity in a
perplexing state. I believe both cases were wrongly decided,
and our circuit may wish to revisit them.

     1. The International Organizations Immunities Act
(IOIA), Pub L. No. 79-291, 59 Stat. 669 (1945) (codified at 22
U.S.C. § 288 et seq.), grants international organizations the
same immunity “as is enjoyed by foreign governments.” Id.
§ 2(b). When Congress enacted the IOIA in 1945, foreign
states enjoyed “virtually absolute immunity,” so long as the
State Department requested immunity on their behalf.
Verlinden B.V. v. Central Bank of Nigeria, 461 U.S. 480, 486
(1983). President Eisenhower designated the IFC as entitled to
immunity under the IOIA in 1956. See Exec. Order No.
10,680, 21 Fed. Reg. 7,647 (Oct. 5, 1956). Congress and the
courts have since recognized that foreign governments’
immunity is more limited, as described by the Foreign
Sovereign Immunities Act. 28 U.S.C. §§ 1604-05; see
Republic of Argentina v. Weltover, 504 U.S. 607 (1992). We
took a wrong turn in Atkinson when we read the IOIA to grant
international organizations a static, absolute immunity that is,
by now, not at all the same “as is enjoyed by foreign
governments,” but substantially broader.

     When a statute incorporates existing law by reference, the
incorporation is generally treated as dynamic, not static: As the
incorporated law develops, its role in the referring statute keeps
up. Atkinson itself correctly acknowledged that a “statute [that]
refers to a subject generally adopts the law on the subject,”
including “all the amendments and modifications of the law
subsequent to the time the reference statute was enacted.”
Atkinson v. Inter-American Development Bank, 156 F.3d 1335,
1340 (D.C. Cir. 1998) (emphasis omitted); see El Encanto, Inc.
v. Hatch Chile Co., 825 F.3d 1161, 1164 (10th Cir. 2016).
                               2

     The IOIA references foreign sovereign immunity, but in
Atkinson we did not apply the familiar rule of dynamic
incorporation because we thought another IOIA provision
showed that Congress intended that reference to be static.
Section 1 of the IOIA authorizes the President to “withhold or
withdraw from any such [international] organization or its
officers or employees any of the privileges, exemptions, and
immunities provided for” by the IOIA. IOIA § 1. We read that
language to mean that Congress intended the President alone to
have the ability, going forward, to adjust international
organizations’ immunity from where it stood as of the IOIA’s
enactment in 1945. Atkinson, 156 F.3d at 1341. That
presidential power was, we thought, exclusive of any shift in
international organizations’ immunity that might be wrought
by developments in the law of foreign sovereign immunity to
which the IOIA refers.

     Correctly read, however, section 1 merely empowers the
President to make organization- and function-specific
exemptions from otherwise-applicable immunity rules. It says
that the President may “withhold or withdraw from any such
organization”—note the singular—“or its officers or
employees any of the privileges, exemptions, and immunities”
otherwise provided for by the IOIA. IOIA § 1 (emphasis
added). Section 1 thus empowers the President to roll back an
international organization’s immunity on an organization-
specific basis. See, e.g., Elizabeth R. Wilcox, Digest of United
States Practice in International Law 405 (2009) (describing
President Reagan’s 1983 exercise of section 1 authority to
withhold immunity from INTERPOL, followed by President
Obama’s 2009 restoration of the immunity after INTERPOL
opened a liaison office in New York). Nothing about section 1
suggests that Congress framed or intended it to be the exclusive
                               3
means by which an international organization’s immunity
might be determined to be less than absolute.

     The inference we drew from section 1 in Atkinson seems
particularly strained because it assumes that Congress chose an
indirect and obscure route to freezing international
organizations’ immunity over a direct and obvious one. If
Congress intended to grant international organizations an
unchanging absolute immunity (subject only to presidential
power to recognize organization-specific exceptions) it could
have simply said so. It might have expressly tied international
organizations’ immunity to that enjoyed by foreign
governments as of the date of enactment. Or, even better, it
might have avoided cross-reference altogether by stating that
international organizations’ immunity is absolute. As it
happens, the original House version of the IOIA did just that,
providing international organizations “immunity from suit and
every form of judicial process.” H.R. 4489, 79th Cong. (as
introduced, Oct. 24, 1945; referred to H. Comm. on Ways and
Means), but the Senate rejected that as “a little too broad,” 91
Cong. Rec. 12,531 (1945), even as it retained the absolute
immunity language in provisions granting the property of
international organizations immunity from search, confiscation
and taxation. See IOIA §§ 2(c), 6. In lieu of the House
version’s broad language, the Senate adopted the current
formulation of section 2(b), which provides international
organizations the “same immunity . . . as is enjoyed by foreign
governments.” H.R. 4489, 79th Cong. (as reported by S.
Comm. on Finance, Dec. 18, 1945).

     The considered view of the Department of State, harking
back to before Atkinson, is that the immunity of international
organizations under the IOIA was not frozen as of 1945, but
follows developments in the law of foreign sovereign immunity
under the FSIA. In a 1980 letter, then-Legal Adviser Roberts
                                4
Owen opined that, by “virtue of the FSIA, . . . international
organizations are now subject to the jurisdiction of our courts
in respect of their commercial activities.” Letter from Roberts
B. Owen, Legal Adviser, U.S. Department of State, to Leroy
D. Clark, General Counsel, Equal Employment Opportunity
Commission (June 24, 1980), reprinted in Marian L. Nash,
Contemporary Practice of the United States Relating to
International Law, 74 Am. J. Int’l L. 917, 917-18 (1980).
Although the State Department’s interpretation of the IOIA is
not binding on the court, the Department’s involvement in the
drafting of the IOIA lends its view extra weight. See H.R. Rep.
No. 79-1203, at 7 (1945) (referring to the draft bill as “prepared
by the State Department”); see also Sosa v. Alvarez-Machain,
542 U.S. 692, 733 n.21 (2004) (citing a letter of the State
Department’s Legal Adviser and encouraging courts to “give
serious weight to the Executive Branch’s view” in cases that
may affect foreign policy).

     Reading the IOIA to dynamically link organizations’
immunity to that of their member states makes sense. The
contrary view we adopted in Atkinson appears to allow states,
subject to suit under the commercial activity exception of the
FSIA, to carry on commercial activities with immunity through
international organizations. Thus, the Canadian government is
subject to suit in United States courts for disputes arising from
its commercial activities here, but the Great Lakes Fishery
Commission—of which the United States and Canada are the
sole members—is immune from suit under Atkinson. See Exec.
Order No. 11,059, 27 Fed. Reg. 10,405 (Oct. 23, 1962); see
also Convention on Great Lakes Fisheries, Can.-U.S., Sept. 10,
1954, 6 U.S.T. 2836. Neither the IOIA nor our cases
interpreting it explain why nations that collectively breach
contracts or otherwise act unlawfully through organizations
should enjoy immunity in our courts when the same conduct
                               5
would not be immunized if directly committed by a nation
acting on its own.

     Were I not bound by Atkinson, I would hold that
international organizations’ immunity under the IOIA is the
same as the immunity enjoyed by foreign states. Accord OSS
Nokalva, Inc. v. European Space Agency, 617 F.3d 756, 762-
64 (3d Cir. 2010) (declining to follow Atkinson and holding
that restricted immunity as codified in the FSIA, including its
commercial activity exception, applies to international
organizations under the IOIA).

     2. Atkinson’s error is compounded in certain suits
involving waiver under the Mendaro doctrine. In Mendaro v.
World Bank, we decided that courts should pare back an
international organization’s apparent waiver of immunity from
suit whenever we believe the waiver would yield no
“corresponding benefit” to the organization. 717 F.2d 610, 617
(D.C. Cir. 1983); see Osserian v. Int’l Fin. Corp., 552 F.3d 836,
840 (D.C. Cir. 2009) (holding organization’s facially broad
waiver of immunity effective only as to types of plaintiffs and
claims that “would benefit the organization over the long
term”). That doctrine lacks a sound legal foundation and is
awkward to apply; were I not bound by precedent, I would
reject it.

    It is undisputed that IOIA immunity may be waived, 22
U.S.C. § 288a(b), and the majority recognizes that the IFC’s
charter “would seem to include a categorical waiver.” Maj. Op.
6-7 & n.2; see IFC Articles of Agreement art. 6, § 3, May 25,
1955, 7 U.S.T. 2197, 264 U.N.T.S. 118. Half a century ago,
we read the Agreement establishing the Inter-American
Development Bank (IADB) to effectuate a broad waiver of the
Bank’s immunity. See Lutcher S. A. Celulose e Papel v. Inter-
American Development Bank, 382 F.2d 454, 457 (D.C. Cir.
                               6
1967) (Burger, J.). The IFC’s Articles of Agreement, which
use the same waiver language as did the IADB in Lutcher,
would appear to waive the IFC’s immunity here. Under the
reasoning of Lutcher, the IFC, like the IADB in that case, may
be sued in United States court.

     But Lutcher was not our last word. As just noted, we
decided in Mendaro to honor an international organization’s
“facially broad waiver of immunity” only insofar as doing so
provided a “corresponding benefit” to the organization. 717
F.2d at 613, 617. We thought it appropriate to look to the
“interrelationship between the functions” of the international
organization and “the underlying purposes of international
immunities” to cabin a charter document’s immunity waiver.
Id. at 615. The member states, we opined in Mendaro, “could
only have intended to waive the Bank’s immunity from suits
by its debtors, creditors, bondholders, and those other potential
plaintiffs to whom the Bank would have to subject itself to suit
in order to achieve its chartered objectives.” Id. We decided
the waiver did not apply to the claim of Mendaro, a former
Bank employee challenging her termination, because
recognizing employment claims had no “corresponding
benefit” for the Bank. Id. at 612-14.

     We saw Mendaro as distinguishable from Lutcher.
Allowing the debtor’s claims in Lutcher “would directly aid the
Bank in attracting responsible borrowers,” whereas complying
with the law governing the Bank’s “internal operations” in
Mendaro would not “appreciably advance the Bank’s ability to
perform its functions.” Id. at 618-20 (emphasis omitted). In
other words, Mendaro assumes that business counterparties
will be unwilling to transact with an international organization
if they lack judicial recourse against it, but that making
employees’ legal rights unenforceable against such an
organization will not affect their willingness to work there. We
                               7
thus held that a facially broad waiver of an organization’s
immunity should be read not to allow employee claims.

     The “corresponding benefit” doctrine calls on courts to
second-guess international organizations’ own waiver
decisions and to treat a waiver as inapplicable unless it would
bring the organization a “corresponding benefit”—presumably
one offsetting the burden of amenability to suit. The majority
acknowledges that “it is a bit strange” that Mendaro calls on
the judiciary to re-determine an international organization’s
own waiver calculus. Slip Op. at 8. I agree that the
organization itself is in a better position than we are to know
what is in its institutional interests. But, whereas my
colleagues point to the fact that “the cases come to us when the
organizations deny the claim,” id., I would be inclined to think
that organizations’ assessments of their own long-term goals
are more reliably reflected in their charters and policies—here,
in the broad waiver included in IFC’s Articles of Agreement—
than in their litigation positions defending against pending
claims.

     It is not entirely clear why we have drawn the particular
line we have pursuant to Mendaro. Why are suits by a
consultant, a potential investor, and a corporate borrower in an
international organization’s interest, but suits by employees
and their dependents not? Compare, e.g., Vila v. Inter-
American Investment, Corp., 570 F.3d 274, 276, 279-82 (D.C.
Cir. 2009) (permitting suit by a consultant); Osseiran, 552 F.3d
at 840-41 (permitting suit by a potential investor); Lutcher, 382
F.2d at 459-60 (permitting suit by a corporate borrower), with,
e.g., Atkinson, 156 F.3d at 1338-39 (barring suit by a former
wife seeking garnishment of former husband’s wages);
Mendaro, 717 F.2d at 618-19 (barring suit by a terminated
employee asserting a sex harassment and discrimination
claim).
                               8

     Our cases seem to construe charter-document immunity
waivers to allow suits only by commercial parties likely to be
repeat players, or by parties with substantial bargaining power.
But the opposite would make more sense: Entities doing
regular business with international organizations can write
waivers of immunity into their contracts with the organizations.
See, e.g., OSS Nokalva, 617 F.3d at 759 (contract clause
authorizing software developer to sue European Space Agency
in state and federal courts in New Jersey). Sophisticated
commercial actors that fail to bargain for such terms are surely
less entitled to benefit from broad immunity waivers than
victims of torts or takings who lacked any bargaining
opportunity, or unsophisticated parties unlikely to anticipate
and bargain around an immunity bar.

     The IFC successfully argued here that it would enjoy no
“corresponding benefit” from immunity waiver. The local
entities and residents that brought this suit contend that giving
effect here to the IFC’s waiver would advance the
Corporation’s organizational goals. The “IFC requires ‘broad
community support’ before funding projects” like the Tata
Mundra power plant, and “local communities may hesitate to
host a high-risk project,” the appellants contend, “if they know
that the IFC can ignore its own promises and standards and they
will have no recourse.” Appellants Br. at 48-49. Without
directly addressing the benefits of legal accountability to the
communities it seeks to serve, the IFC contends that treating
the waiver in its Articles of Agreement as effective here would
open a floodgate of litigation in United States courts. That
argument has it backwards: The IFC persuaded the majority to
stem a litigation flood it anticipates only because the immunity
waiver in the IFC’s own Articles of Agreement opened the
gate.
                              9
     The perceived need for Mendaro’s odd approach would
not have arisen if we had, back in Atkinson, read the IOIA to
confer on international organizations the same immunity as is
enjoyed by foreign governments—i.e. restrictive immunity
that, today, would be governed by the FSIA. As the majority
observes, Slip Op. at 8, the cases in which we have applied
Mendaro to hold that claims are not immunity-barred look
remarkably like cases that would be allowed to proceed under
the FSIA’s commercial activity exception. The activities we
held to be non-immunized—such as suits by “debtors,
creditors, [and] bondholders,” Mendaro, 717 F.2d at 615, “suits
based on commercial transactions with the outside world”
affecting an organization’s “ability to operate in the
marketplace,” Osseiran, 552 F.3d at 840, and unjust
enrichment claims by commercial lending specialists, Vila, 570
F.3d at 276, 279-82—seem like just the kinds of claims that
would be permitted under the commercial activity exception.
We should have achieved that result, not via Mendaro’s
“corresponding benefit” test, but by recognizing that the IOIA
hitched the scope of international organizations’ immunity to
that of foreign governments under the FSIA. There is a time-
tested body of law under the FSIA that delineates its
contours—including its commercial activity exception. The
pattern of decisions applying Mendaro may approximate some
of the results that would have occurred had international
organizations been subject to the FSIA, but Mendaro begs
other important questions that assimilation of IOIA immunity
to the FSIA would resolve.

     Our efforts to chart a separate course under the IOIA were
misguided from the start, and the doctrinal tangle has only
deepened in light of the amorphous waiver-curbing doctrine
that has developed under Mendaro. I believe that the full court
should revisit both Atkinson and Mendaro in an appropriate
                             10
case. But because those decisions remain binding precedent in
our circuit, I concur.