By Colin Trundle, Staff Member

Introduction

In a recent decision, the U.S. Supreme Court has ruled international organizations possess only the same sovereign immunity that foreign governments enjoy under the Foreign Sovereign Immunities Act (FSIA).[1] This ruling undoubtedly impacts all international organizations that operate in the United States.

Procedural Posture

The Defendant, International Finance Corporation (IFC), is a “sister organization” of the World Bank.[2] It invests in infrastructure projects in developing countries and is headquartered in Washington, D.C.[3] In this case, the IFC invested in the development of a power generation plant in India.[4] The Plaintiffs are residents and farmers harmed by the pollution the plant emitted.[5] They sued the IFC in the U.S. District Court for the District of Columbia.[6] Both the District Court and the U.S. Court of Appeals concluded the IFC had “virtually absolute immunity” from suit under the International Organizations Immunities Act (IOIA) of 1945 and dismissed the case.[7]

Holding

In a 7-1 decision, the Supreme Court held that the lower courts misinterpreted IOIA.[8] Indeed, the Court noted that IOIA gives international organizations the same immunities that foreign states enjoy.[9] The Court noted that the Foreign Sovereign Immunities Act of 1976 abrogates the sovereign immunity of states in certain situations such as when a state is sued over a commercial activity that has a “sufficient” nexus to the United States.[10] The Court concluded that immunity of international organizations is the same as the restricted immunity of foreign states codified in the FSIA – thus abrogating their previously absolute immunity.[11]

Impact

The impact of this decision is extensive.  For example, the FSIA contains a non-commercial tort exception to sovereign immunity.[12] Prior to the Jam decision, an individual injured by a United Nations vehicle in New York City was unable to sue the United Nations for damages. This individual now has a remedy. Moreover, commentator Danial Bradlow notes multilateral development banks must now worry their malfeasance can be judged by foreign courts with “potentially embarrassing outcomes.”[13] He suggests this will induce them to reform and strengthen accountability.[14]

In my opinion, this decision is long overdue. International organizations such as the United Nations and the World Bank offer much to the global community. However, if they choose to operate in the United States, they must be held accountable in our courts when they harm people. Similarly, these organizations should no longer hide under a cloak of immunity for the wrongs they commit acting as commercial players in the marketplace. This decision is a step in that direction.

[1] Jam v. Int’l Fin. Corp., 203 L.Ed.2d 53 (U.S. 2019)

[2] Id. at 60; see also International Finance Corportation, https://www.ifc.org/wps/wcm/connect/corp_ext_content/ifc_external_corporate_site/home (last visited Mar. 29, 2019).

[3] Jam, 203 L.Ed.2d at 60.

[4] Id.

[5] Id.

[6] Id.

[7] Id. at 61; see also Jam v. Int’l Fin. Corp., 860 F.3d 703 (D.C. Cir. 2017).

[8] Id. at 58.

[9] Id. at 66.

[10] Id. at 59 (citing 28 U.S.C. § 1602 et. seq.)

[11] Id. at 61.

[12] 28 U.S.C. § 1605(5) (abrogating sovereign immunity when “money damages are sought against a foreign state for personal injury or death, or damage to or loss of property, occurring in the United States and caused by the tortious act or omission of that foreign state or of any official or employee of that foreign state while acting within the scope of his office or employment”).

[13] Daniel Bradlow, Multilaterals Must Earn the Right to Limited Immunity, Financial Times (Mar. 28, 2019), https://www.ft.com/content/2512aa84-515d-11e9-9c76-bf4a0ce37d49.

[14] Id.