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January 26, 2021

Can You Be Sued Under the Foreign Sovereign Immunities Act?: A Primer for Foreign Governments and Their Agencies

Advisory
By

The United States is well known globally as a forum for costly and protracted litigation. Each year, tens of millions of lawsuits are filed within United States borders, and even foreign governments are regularly caught in the crosshairs. Sometimes, the suits filed against foreign governments raise bona fide claims; other times, they are political theater intended only to harass or embarrass. But foreign governments, along with their ministries and state-owned companies, have one inherent advantage in litigation that most defendants do not: the shield provided by the Foreign Sovereign Immunities Act (FSIA), a federal statute that largely (but not entirely) reflects international-law rules about the immunity of a state in the courts of other states.

Foreign states and certain state agencies and companies are presumptively immune under the FSIA from state and federal court jurisdiction, meaning that American courts generally cannot hear cases brought against them. But the FSIA contains several enumerated exceptions. If a case falls within any one of those exceptions, the FSIA effectively strips foreign states of their immunity and allows them to be sued as if they were a private party, opening the door to years of often painful litigation.

In this advisory, we explain the basics of how the FSIA works and then take a look at five of its most significant exceptions: (1) the commercial activity exception, (2) the non-commercial torts exception, (3) the expropriation exception, (4) the waiver exception, and (5) the terrorism exception. By understanding where the law stands on each exception—and, equally important, where the law is trending—foreign governments can begin evaluating their litigation risk and thinking about what steps they can take to avoid ending up in court at all.

Arnold & Porter has represented dozens of foreign states—from every continent except Antarctica—in lawsuits throughout the United States. Having successfully defended lawsuits brought under each of the five FSIA exceptions discussed below, we offer this primer to help foreign sovereigns understand the most frequently invoked exceptions to sovereign immunity.

The Foreign Sovereign Immunities Act

For more than 150 years after the founding of the United States, foreign states were almost entirely exempt from the jurisdiction of US courts as a matter of comity (i.e., respect for the sovereignty of other nations).1 But in the early-to-mid twentieth century, the US government began to join other states in recognizing that this "absolute" immunity was inappropriate in certain cases, especially those in which a foreign state was behaving less like a sovereign and more like a private actor.2 In 1952, the State Department began informing federal courts that the immunity of foreign states was limited or "restricted" to situations where the foreign government engages in governmental functions. However, the State Department's determinations were inconsistent and occasionally colored by political considerations.3 In 1976, Congress responded to these problems by enacting the FSIA, which standardized the new, "restrictive" rules of immunity and assigned responsibility for determining immunity to the federal courts.

Since then, the FSIA has become a mainstay of foreign relations litigation. It makes foreign states, including their "political subdivision[s]" and "agenc[ies] and instrumentalit[ies]," presumptively immune from state and federal court jurisdiction.4 The FSIA also sets up a separate regime of immunity for the enforcement of judgments against foreign states.5 Furthermore, the FSIA indirectly governs the immunity of international organizations through a separate statute, the International Organizations Immunities Act, which incorporates the FSIA's immunity rules.6 However, the FSIA does not apply to foreign officials, who are instead governed by a separate common law of official immunity based in part on guidance provided by the Executive Branch.7

Despite its sweep, the FSIA does not provide immunity in every case involving a foreign state. In accordance with the "restrictive" theory of foreign sovereign immunity, the FSIA limits the immunity it confers through several exceptions.8 If a plaintiff can show that its case falls within one of those exceptions, then a court will automatically have jurisdiction over that case as well as over the foreign state defendant.

Five of the FSIA's exceptions are especially notable and provide the basis for most lawsuits against foreign states: (1) the commercial activity exception, (2) the non-commercial torts exception, (3) the expropriation exception, (4) the waiver exception, and (5) the terrorism exception.9 Each of these exceptions finds frequent favor among plaintiffs, and for that reason courts will continue hearing cases that flesh out the contours of these exceptions. On average, for example, the Supreme Court decides about one FSIA case every year, and many of its cases have concerned—and will continue to concern—these five exceptions.10

The Commercial Activity Exception

Of the various exceptions to foreign sovereign immunity, the "commercial activity" exception provides the basis for most lawsuits against sovereigns and their agencies and instrumentalities.11 States have been sued under this exception (though not always successfully) for an extraordinarily wide array of activities, including the promotion of investment opportunities abroad,12 the failure to warn of safety issues and product defects,13 and state involvement in fraudulent schemes.14 Plaintiffs have often invoked this exception to try to bring run-of-the-mill labor claims, including, for example, those under worker's compensation laws.15 Commercial activity suits related to contracts are also common, including, for example, a contract to manage a health-benefit plan,16 a contract to reimburse physicians for a kidney transplant,17 and a contract to sell a valuable art collection.18 It is especially common for plaintiffs to bring suits under this exception for claims relating to debts and bonds.19

States lose their immunity under the commercial activity exception in suits that are based upon (1) "a commercial activity carried on in the United States by a foreign state"; (2) "an act performed in the United States in connection with a commercial activity of the foreign state elsewhere"; or (3) "an act outside the territory of the United States in connection with a commercial activity of the foreign state elsewhere and that act causes a direct effect in the United States."20

Each clause provides a separate ground for US courts to exercise jurisdiction over a foreign sovereign. And although they differ with regard to the exact conditions that must be satisfied to support jurisdiction, all three clauses first require that the activity in question be "commercial" and that the action giving rise to the suit be "based upon" that commercial activity. Courts therefore generally proceed in three steps when considering the application of this exception.

First, they ask whether the activity of the foreign state is "commercial," rather than "sovereign," in nature. The FSIA defines "commercial activity" as either "a regular course of commercial conduct" or "a particular commercial transaction or act," but it also provides that courts must look to the nature of the activity rather than its purpose.21 That is, regardless of the foreign state's motive, courts must determine whether the conduct at issue is the type of conduct that private players in the market typically engage in.22 For example, the Second Circuit recently held that the Welsh Government's promotion of tourism through a photograph in a brochure qualified as commercial activity because private entities like airlines, hotels, travel agents, art festival sponsors, and operators of theme parks also promote tourism in the same way.23 By contrast, the same court held a day later that Greece's attempt to nationalize historical artifacts and regulate their export and ownership did not qualify as commercial activity because no private party could undertake that same act.24

Second, once courts have determined that the relevant activity is "commercial," they then ask whether the plaintiff's claim is "based upon" that activity or upon an act performed in connection with that activity. The US Supreme Court has interpreted that phrase to mean that courts must identify the core, or "gravamen," of the plaintiff's complaint to determine whether it is "based upon" the alleged commercial activity.25

Disagreement about what constitutes the "gravamen" of an action surfaced in OBB Personenverkehr AG v. Sachs,  26 2015 case in which the Supreme Court narrowed the scope of the "based upon" requirement and, with it, the commercial activity exception. There, a customer purchased a rail pass from a US travel agent and was then injured on a train platform in Austria. She sued OBB, the Austrian state-owned railway carrier, and argued that her claims were "based upon" the ticket transaction in the United States. The Court disagreed. It held that while Sachs's ticket purchase led to the conduct that eventually injured her, all of her claims were "based upon" the alleged tortious conduct of OBB that "plainly occurred abroad." It was not enough, the Court insisted, that one element of her claims was linked to the ticket purchase; otherwise, foreign states would be required to litigate in US courts despite there being only attenuated connections between the commercial activity and a plaintiff's cause of action.

Third, courts must determine whether the commercial activity upon which the plaintiff's suit is based is sufficiently connected to the United States. The FSIA sets forth three separate grounds that can provide the "jurisdictional nexus." The first deals with commercial activity "carried on" in the United States and requires a "substantial contact" between that activity and the United States.27 An isolated contact, like a single transfer of funds to a US bank,28 does not constitute activity "carried on" in the United States. But extensive contract negotiations29—even if that contract is executed outside the United States––and ongoing solicitation of business from vendors in the United States 30 can satisfy the requirement of substantial contacts. The second statutory nexus allows jurisdiction based on an act performed in the United States "in connection with" commercial activity of the foreign state elsewhere. It too requires a "substantial contact" with the United States.31 Finally, the third nexus provides jurisdiction when a plaintiff's claim is based upon an act outside the United States in connection with the foreign state's commercial activity elsewhere that nevertheless causes a "direct effect" in the United States. The Supreme Court has held that an effect is "direct" if it follows as an "immediate consequence" of the defendant's activity.32 Following that guidance, courts adjudicating contract disputes unanimously reject immunity defenses where the contract requires payment or performance in the United States.33 Courts even deny immunity when the contract left the place of payment or performance up to the plaintiff (sometimes without listing the United States specifically) and the plaintiff chose the United States.34

Courts must walk a fine line when applying the FSIA's commercial activity exception between intruding into a foreign state's affairs and denying injured plaintiffs a forum for relief. That balancing act sometimes gives the commercial activity exception taffy-like properties: even as one of its requirements is being compressed, another is often being stretched. So it is that in recent years, the Supreme Court has narrowed the application of the "based upon" requirement in Sachs, while lower courts have been applying the "direct effects" nexus broadly. For foreign governments, the takeaway is clear: it is important to keep an eye on all of the exception's elements simultaneously in order to structure transactions that will avoid pulling the foreign state into court later on.

The Non-Commercial Torts Exception

The second commonly invoked exception to immunity under the FSIA is the "non-commercial torts" exception. This exception strips states of their immunity in cases where "money damages are sought . . . 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."35

Congress crafted the non-commercial torts exception with certain narrow, run-of-the-mill domestic torts in mind. For example, Congress wanted to ensure that plaintiffs could use ordinary state-law causes of action to sue foreign states for traffic accidents caused by their employees inside the United States.36 Other examples of torts falling under this exception include slip-and-falls on diplomatic properties,37 or damage and injury caused while constructing or refurbishing the same.38 Once jurisdiction for this kind of tort is established, a court will typically apply the same standard of liability and other tort rules that would normally apply to a private defendant.39

Plaintiffs have filed a mix of cases in recent years that constitute both "classic" applications of the non-commercial torts exception as well as more creative attempts to get within its scope. For example, plaintiffs sued the Republic of Namibia's Permanent Mission in the United States for allegedly damaging a next-door building through its failure to abide by New York's building code.40 Plaintiffs have also tried to use the exception to sue Nigeria for failing to issue a passport,41 Israel for its military's interception of the Gaza flotilla in 2010,42 and Turkey for the violence that occurred outside its ambassador's residence during President Erdoğan's visit to Washington, DC in 2017.43 Since the beginning of the COVID-19 pandemic, China has also been sued under the non-commercial torts exception for allegedly failing to contain the virus.44

Every federal court of appeals to have considered the question has ruled that there is no jurisdiction under the non-commercial torts exception unless the "entire tort"—that is, the tort and the injury—allegedly occurred inside the United States.45 Courts have been relatively strict both about what qualifies as "the United States" and about whether a tort occurred "entirely" within it. For example, one court of appeals held recently that "the United States" is "limited to the geographic territories and waters of the United States" and does not include US-flagged ships on the high seas.46 Similarly, the same court held in a separate case that the non-commercial torts exception did not apply where the plaintiff alleged that a foreign country had infected his computer inside the United States with spy software.47 Since the software had been programmed and transmitted from abroad, and since the tortious intent lay abroad as well, the court concluded that the "entire tort" had not occurred inside the United States.48 The non-commercial tort exception is thus narrower than the commercial activity exception in not having a "direct effect" or "gravamen" jurisdictional hook.49 That is, if the "tort" occurs outside the United States, the non-commercial tort exception does not apply.

One other distinguishing feature of the non-commercial tort exception is that it encompasses two "exception[s] to the exception," or situations in which a foreign state retains its immunity despite otherwise falling within the exception.50 First, the non-commercial tort exception does not cover "any claim based upon the exercise or performance or the failure to exercise or perform a discretionary function regardless of whether the discretion be abused."51 Congress intended the "discretionary function" carve-out to mimic the carve-out available to the United States under the Federal Tort Claims Act.52

Courts take slightly different approaches to what qualifies as a "discretionary function." Most agree that the discretionary function carve-out is meant to prevent judges from second-guessing states' policy decisions, especially those grounded in social, economic, or political considerations.53 Courts also agree that, if an action is required by law, it is generally not considered "discretionary" for purposes of the carve-out.54 But there can also be differences in emphasis across opinions. Some courts, for example, stick closely to Federal Tort Claims Act precedents when interpreting the carve-out.55 Other courts, however, have explained that the underlying rationales between the FSIA and the Federal Tort Claims Act are sufficiently different that any precedents construing the latter should be treated with caution before being used to interpret the former.56 Regardless, the discretionary function exception can often be a relevant defense in tort cases that involve some degree of governmental decisionmaking.

Second, the non-commercial tort exception also includes a carve-out for "any claim arising out of malicious prosecution, abuse of process, libel, slander, misrepresentation, deceit, or interference with contract rights."57 Once again, this "exception to the exception" has been interpreted slightly differently by different courts. Some have interpreted the carve-out narrowly, to apply only to the specifically listed torts58; others have focused on the phrase "arising out of," and held that what matters is the "predicate conduct' and not necessarily the specific cause of action.59 Unlike the discretionary function exclusion, however, this carve-out turns on the nature of the underlying claim rather than on the nature of the alleged government conduct.

On balance, courts have been fairly conservative in the kinds of torts they are willing to recognize as falling within the non-commercial tort exception. But foreign governments would do well to continue monitoring these cases, especially as plaintiffs continue to file creative suits that push the boundaries of the exception.60

The Expropriation Exception

The FSIA also sets out a third exception to foreign sovereign immunity, the so-called "expropriation exception." Congress included this exception in the FSIA in 1976 as a result of concerns about the nationalization of US companies' property in Latin America in the 1960s and 1970s. No other foreign state has recognized a comparable exception to sovereign immunity, and it is generally understood to be inconsistent with international law.61

States lose their immunity under the expropriation exception when four elements are met: "[1] rights in property [2] taken [3] in violation of international law are in issue,"62 and [4] the requisite connection to the United States exists. For the requisite connection to exist, the expropriated property, "or any property exchanged for such property," must either be "present in the United States in connection with a commercial activity carried on in the United States by the foreign state," or be "owned and operated by an agency or instrumentality of the foreign state and that agency or instrumentality is engaged in a commercial activity in the United States."63

Courts have generally applied the exception's language in two steps. First, they ask whether the claims concern a property right taken in violation of international law.64 Second, assuming so, courts then ask whether the plaintiffs have shown the right connection between the expropriated property—or any property exchanged for it, including money—and the United States.65

For decades, courts, scholars and practitioners understood the expropriation exception to have a relatively modest scope. Plaintiffs relied on it successfully only where they directly challenged a taking as a violation of the international law of alien expropriation, that is, as the nationalization of a noncitizen's property without prompt, adequate, and effective payment.66 For example, a court held the exception satisfied in a case involving Ethiopia's alleged expropriation of the majority of a spice company's foreign-owned stock.67 By contrast, courts held that the expropriation exception does not cover "domestic takings," or takings where a foreign government expropriated the property of its own nationals.68 Courts reasoned that these domestic expropriations, however substantively unjust, did not violate international law and therefore did not come within the scope of the expropriation exception.69

Starting in the 1990s, plaintiffs began bringing a new class of expropriation claims based on takings that had occurred during the Holocaust or other periods of mass human-rights violations. In 2004, the Supreme Court held that the FSIA applied retroactively to conduct that predated its enactment in 1976, including to cases concerning artwork that was stolen during the Holocaust.70 In the years that followed, plaintiffs increasingly relied on the expropriation exception to file these sorts of human rights-related suits.71 One prominent example included the Soviet Union's expropriation of a Jewish organization's religious texts starting in the 1910s.72 Still, even in these cases, plaintiffs continued to allege a violation of the international law of alien expropriation.

Over the last eight years, however, the expropriation exception has undergone another expansion through the rise of the so-called "genocidal takings" cases.73 Contrary to historical practice, plaintiffs do not allege that the takings themselves were unlawful expropriations, but rather that the foreign state took their property in the context of a genocide or other mass atrocities that violated international law.74 Because international human rights law can govern a state's treatment of its own citizens, these plaintiffs argue that the domestic takings rule does not apply to their cases and that they may sue a foreign state for ordinary, common-law causes of action like conversion, restitution, and unjust enrichment.75

Two courts have been receptive to this theory. The Seventh and DC Circuits have both held that the expropriation exception can strip foreign states of their immunity in cases alleging domestic takings during the Holocaust.76 The two courts have, however, disagreed whether the statute permits district courts to dismiss such cases on the basis of international comity. On the one hand, the Seventh Circuit has held that comity requires plaintiffs either to exhaust domestic remedies before bringing suit in the United States, or to show "a powerful reason" to excuse their not doing so.77 On the other, the DC Circuit has equated comity dismissal with exhaustion to hold that comity is not a viable defense because the text of the FSIA's expropriation exception does not expressly require exhaustion.78

We will soon know more. In December, the US Supreme Court heard arguments in two cases against Germany and Hungary involving whether the expropriation exception encompasses "genocidal takings" cases and, if so, whether the exception allows for a comity-based exhaustion requirement.79 In recent years, the Court has gradually narrowed one popular avenue for human-rights suits (the Alien Tort Statute),80 and attorneys are turning to the expropriation exception as the next entry point for human-rights litigation. If the Supreme Court agrees with Seventh and DC Circuit that "genocidal takings" cases fall within the expropriation exception—and especially if there is no exhaustion requirement—then it may open courts up to a diverse array of property-related claims arising out of foreign nationals suing their governments over foreign conflicts with widespread human-rights abuses.81

The Waiver Exception

A fourth exception to foreign sovereign immunity arises when a foreign state waives its immunity. The waiver exception applies in any case "in which the foreign state has waived its immunity either explicitly or by implication, notwithstanding any withdrawal of the waiver which the foreign state may purport to effect except in accordance with the terms of the waiver."82 For a waiver to qualify, it must be clear and unambiguous.83

Explicit waivers are usually found in contracts, although in some cases foreign states have also waived their immunity in international agreements or through authorized declarations.84 Courts generally construe these explicit waivers narrowly, in keeping with their cautious approach to the waiver exception as a whole.85

Judges are even more reluctant to find implicit waivers.86 Many courts have recognized that a foreign state waives its immunity implicitly in only three situations: (1) when it agrees to arbitrate in the United States; (2) when it agrees that US law governs a contract; or (3) when it files a responsive pleading in a case without invoking the defense of sovereign immunity.87 (A separate FSIA provision now governs those waivers of immunity arising from arbitral agreements.88) Foreign states generally do not implicitly waive their immunity when they designate the law or courts of a third country as governing a contract.89 Nor do they waive immunity through litigation conduct short of a responsive pleading, like filing a motion to dismiss, engaging in discovery, or taking procedural steps such as removal to a federal court.90

The FSIA also sets out three circumstances under which a foreign state, by filing suit, implicitly waives its immunity to counterclaims. First, the FSIA permits counterclaims "for which a foreign state would not be entitled to immunity under [the terrorism-based exceptions of the Act] had such claim been brought in a separate action."91 Second, the FSIA permits counterclaims "arising out of the transaction or occurrence that is the subject matter of the claim of the foreign state."92 The assumption is that if a foreign state asks a US court to resolve a dispute, that court should have jurisdiction over the entirety of the dispute, including any counterclaims.93 Finally, the FSIA permits a counterclaim "to the extent that the counterclaim does not seek relief exceeding in amount or differing in kind from that sought by the foreign state."94 Notably, this final type of counterclaim need not relate to the "transaction or occurrence" which the foreign state had originally sued about.95 The takeaway for foreign governments is thus that filing any suit in the United States can potentially expose that state to counterclaims.

Even if a foreign state has explicitly or implicitly waived its immunity from the jurisdiction of a US court to adjudicate a dispute, that waiver does not automatically also extend to the state's immunity from enforcement of any subsequent judgment against the state, as discussed below.96

The Terrorism Exception

A fifth exception, often invoked by plaintiffs' lawyers but rarely subjected to an adversarial defense, is the "terrorism exception" to the FSIA, which is now set out in an entirely separate provision of the FSIA, Section 1605A. Few other countries have adopted comparable exceptions to immunity in their domestic statutes, and Section 1605A's consistency with international law is questionable.97 Section 1605A thus exemplifies the way in which the FSIA can depart from foreign governments' understanding of how sovereign immunity operates under their own domestic systems.

Section 1605A is a relatively recent addition to the FSIA; added only in 2008, it relocated and amended a terrorism-based exception that had been added in 1996.98 (Section 1605A is also separate from another terrorism-based exception that was created as part of the Justice Against Sponsors of Terrorism Act and that is codified in Section 1605B.99) States lose their immunity under Section 1605A in cases where plaintiffs seek damages "for personal injury or death that was caused by an act of torture, extrajudicial killing, aircraft sabotage, hostage taking, or the provision of material support or resources for such an act."100

Section 1605A's terrorism exception is unusual in that it limits the pool of both potential plaintiffs and potential defendants. On the plaintiff's side, Section 1605A requires that either the claimant or the victim be a national of the United States, a member of the US armed forces, or an employee of the Government of the United States or a US government contractor.101 (Section 1605A notably does not require, however, that either the act of terrorism or the injury have a territorial connection to the United States.102) On the defendant's side, Section 1605A applies only if the state was designated as a state sponsor of terrorism at the time of the alleged act of terrorism or if it was designated as a result of that act.103 Today, the State Department has designated three countries as state sponsors of terrorism—Cuba, Iran, North Korea and Syria—but past designees have included Iraq, Libya, and Sudan.104 These nations have been sued for, among other things, materially supporting al Qaeda's embassy bombings,105 torturing and extrajudicially killing counterrevolutionaries,106 and abducting, confining to a penal colony, torturing, and ultimately killing an enemy of the regime.107

Cases under the terrorism exception have been litigated differently than most other FSIA suits. It should come as little surprise that the United States does not have good relations with the nations that it designates state sponsors of terrorism. That mutual hostility means that those states often decide to ignore any suits brought against them or their officials in the United States (at least until plaintiffs find assets to seize). As a result, most cases under the terrorism exception have been litigated without any defendant present.108

Courts have struggled to decide these defendant-less terrorism cases. Sometimes, they have adopted relatively pro-defendant rules. Courts generally agree, for instance, that they must double check to ensure that they have the power to hear a terrorism exception case, even when they are presented with a default judgment issued by another court.109 One example of this sort of inquiry has been courts second-guessing whether the evidence offered by plaintiffs "specifically links" the acts of terrorism alleged with the state's later designation as a state sponsor of terrorism.110 And even absent a defendant, the FSIA still obligates a plaintiff to establish "his claim or right to relief by evidence satisfactory to the court."111

Other times, courts have not cut absent defendants much slack. One federal court of appeals has held that district courts lack the authority to raise a statute of limitations defense for defendants on their own authority.112 Another has refused to require plaintiffs to produce "direct, firsthand evidence of the victim's torture and murder."113 Such a requirement, the court held, would "thwart the purpose of the terrorism exception: holding state sponsors of terrorism accountable for torture and extrajudicial killing."114

Section 1605A is further unusual in that it creates a private cause of action for potential plaintiffs, as well as for their legal representatives. Plaintiffs can use Section 1605A's cause of action to sue either the foreign state or "any official, employee, or agent of that foreign state [who] while acting within the scope of his or her office, employment, or agency" committed one of the listed acts of terrorism.115 Section 1605A's cause of action allows plaintiffs to recover not only economic damages, but also "solatium, pain and suffering," and, significantly, "punitive damages."116

Earlier this year, the Supreme Court addressed the scope of punitive damages under Section 1605A's cause of action in Opati v. Republic of Sudan.117 Opati's plaintiffs successfully obtained a default judgment against Sudan for its role in the al Qaeda-masterminded bombings of the US Embassies in Kenya and Tanzania in 1998.118 Sudan belatedly entered the case and found to its consternation that the judgment against it included roughly $4.3 billion in punitive damages.119 Sudan argued on appeal that the district court had erred in awarding those damages because Sudan's alleged support to al Qaeda indisputably predated Section 1605A's creation by a decade.120 Sudan therefore asserted that, based on the presumption against the retroactive application of law, any punitive damages authorized under Section 1605A's cause of action should be limited to conduct that postdated the provision's enactment in 2008.121 But the Supreme Court disagreed, reasoning that other parts of Section 1605A expressly made its cause of action available to remedy certain past acts of terrorism.122

Opati left several questions open, including whether Section 1605A supplies the exclusive cause of action for claims involving state-sponsored acts of terror, and, if not, whether plaintiffs who invoke its exception to immunity but not its cause of action can nevertheless recover punitive damages.123 Courts will surely continue to wrestle with those questions, as well as with how to strike the broader balance between sympathetic plaintiffs and missing-in-action defendants.

Judgments Against Foreign States

Even if a foreign state has a judgment rendered against it in American courts, there still remains a second line of defense on which to fall back: the FSIA's provisions on execution of judgments. As previously noted, the FSIA sets up a separate regime of immunity for the execution of judgments against the property of foreign states.124 That separate regime in many ways parallels the jurisdictional immunity regime just discussed. First, the FSIA establishes default immunity, providing that the property in the United States of any foreign state "shall be immune from attachment arrest and execution," subject to several exceptions.125 The FSIA then lays out those exceptions, many of which are connected to the exceptions to jurisdictional immunity discussed above.126 For example, the FSIA strips a foreign state's property of its immunity if it is "used for a commercial activity in the United States" and "is or was used for the commercial activity upon which the claim is based."127

States that lose their jurisdictional immunity under the FSIA can take solace from the fact that the FSIA's execution immunity is generally broader.128 It is accordingly not uncommon for a US court to have jurisdiction over a particular dispute against a state, but to be unable to enforce the resulting judgment against that same state's property. Several plaintiffs in Section 1605A terrorism cases, for instance, have spent years searching for non-immune property which they can attach in order to execute their default judgments.129

Conclusion

The FSIA remains a source of considerable litigation—and, from the perspective of many foreign government defendants, frustration—to this day. Each of the five exceptions to jurisdictional immunity discussed above illustrates the balance that courts must often strike between the interests of plaintiffs, defendants, and the public at large. Because that balance is not fixed, plaintiffs will continue testing and probing the boundaries of the FSIA's exceptions to find new ways to pierce the sovereign immunity of foreign states.

*John Bellinger served as the Legal Adviser for the Department of State from 2005-2009 and as the Legal Adviser to the National Security Council at the White House from 2001-2005.

© Arnold & Porter Kaye Scholer LLP 2021 All Rights Reserved. This Advisory is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.

  1.  See, e.g., The Schooner Exch. v. McFaddon, 11 U.S. 116, 136–37, 147 (1812); Berizzi Bros. Co. v. The Pesaro, 271 U.S. 562, 574 (1926); see also Robert B. von Mehren, The Foreign Sovereign Immunities Act of 1976, 17 Colum. J. Transnat'l L. 33, 39–40 (1978).

  2. See Verlinden B.V. v. Cent. Bank of Nigeria, 461 U.S. 480, 486–87 (1983).

  3.  See Verlinden B.V. v. Cent. Bank of Nigeria, 461 U.S. 480, 486–88 (1983).

  4. 28 U.S.C. §§ 1603–04. The FSIA defines an "agency or instrumentality of a foreign state" as "any entity (1) which is a separate legal person, corporate or otherwise, and (2) which is an organ of a foreign state or political subdivision thereof, or a majority of whose shares or other ownership interest is owned by a foreign state or political subdivision, and (3) which is neither a citizen of a State of the United States as defined in section 1332(c) and (e) of this title, nor created under the laws of any third country." Id. § 1603(b). The Supreme Court has held that "only direct ownership of a majority of shares by the foreign state satisfies the statutory requirement" of "majority ownership." Dole Food Co. v. Patrickson, 538 U.S. 468, 474 (2003) (emphasis added). The Court has also held that whether a corporate entity qualifies as an "instrumentality" under the FSIA is determined by its status at the time suit is filed. Id. at 478.

  5. See 28 U.S.C. §§ 1609–11.

  6. See Jam v. Int'l Fin. Corp., 139 S. Ct. 759, 765 (2019).

  7. See Samantar v. Yousuf, 560 U.S. 305, 324–25 (2010); see generally John B. Bellinger III, The Dog that Caught the Car: Observations on the Past, Present, and Future Approaches of the Office of the Legal Adviser to Official Acts Immunities, 44 Vand. J. Transnat'l L. 819 (2011).

  8. See, e.g., 28 U.S.C. §§ 1605–1605B.

  9. Other less commonly litigated exceptions include the exception concerning "rights in immovable property situated in the United States," 28 U.S.C. § 1605(a)(4), the exception for an "action brought to foreclose a preferred mortgage," id. § 1605(d), and the exception for "suit{s} in admiralty . . . brought to enforce a maritime lien against a vessel or cargo of the foreign state, which maritime lien is based upon a commercial activity of the foreign state," id. § 1605(b). Foreign states are also not immune if they waive their immunity in conjunction with certain arbitration agreements, id. § 1605(a)(6).

  10. See The Supreme Court, 2019 Term—The Statistics, 134 Harv. L. Rev. 610, 624 (2020); The Supreme Court, 2018 Term—The Statistics, 133 Harv. L. Rev. 412, 426 (2019); The Supreme Court, 2017 Term—The Statistics, 132 Harv. L. Rev. 447, 460 (2018); The Supreme Court, 2016 Term—The Statistics, 131 Harv. L. Rev. 403, 415 (2017); The Supreme Court, 2015 Term—The Statistics, 130 Harv. L. Rev. 507, 519 (2016).

  11. See Republic of Argentina v. Weltover, Inc., 504 U.S. 607, 611 (1992).

  12. Everard Findlay Consulting, LLC v. Republic of Suriname, No. 20-CV-1691, 2020 WL 7688344 (2d Cir. Dec. 28, 2020); Best Medical Belgium, Inc. v. Kingdom of Belgium, 913 F. Supp. 2d 230 (E.D. Va. 2012).

  13. OBB Personenverkehr AG v. Sachs, 577 U.S. 27 (2015); Filus v. Lot Polish Airlines, 907 F.2d 1328 (2d Cir. 1990).

  14. Frank v. Commonwealth of Antigua & Barbuda, 842 F.3d 362 (5th Cir. 2016).

  15. Merlini v. Canada, 926 F.3d 21 (1st Cir. 2019).

  16. Embassy of the Arab Republic of Egypt v. Lasheen, 603 F.3d 1166 (9th Cir. 2010).

  17. Rush-Presbyterian-St. Luke's Med. Ctr. v. Hellenic Republic, 877 F.2d 574 (7th Cir. 1989).

  18. Devengoechea v. Bolivarian Republic of Venezuela, 889 F.3d 1213 (11th Cir. 2018).

  19. See, e.g., R&R Int'l Consulting LLC v. Banco do Brasil, S.A., 981 F.3d 1239 (11th Cir. 2020); Rogers v. Petroleo Brasileiro, S.A., 673 F.3d 131 (2d Cir. 2012).

  20. 28 U.S.C. § 1605(a)(2).

  21. 28 U.S.C. § 1603(d).

  22. See Saudi Arabia v. Nelson, 507 U.S. 349, 359 (1993).

  23. See Saudi Arabia v. Nelson, 507 U.S. 349, 359 (1993).

  24. Barnet v. Ministry of Culture & Sports of the Hellenic Republic, 961 F.3d 193, 202 (2d Cir. 2020).

  25. Saudi Arabia v. Nelson, 507 U.S. 349, 357 (1993).

  26. 136 S. Ct. 390 (2015).

  27. 28 U.S.C. § 1603.

  28. See Zedan v. Kingdom of Saudi Arabia, 849 F.2d 1511, 1513 (D.C. Cir. 1988); see also General Elec. Capital Corp. v. Grossman, 1991 F.2d 1376, 1384 (8th Cir. 1993) (holding that Canadian auditors did not establish requisite minimum contacts with Minnesota by sending financial statement of Canadian company to Minnesota purchaser for inclusion in its own financial statement).

  29. See, e.g., Universal Trading & Inv. Co. v. Bureau for Representing Ukrainian Interests in Int'l & Foreign Courts, 727 F.3d 10, 25 (1st Cir. 2013).

  30.  See, e.g., BP Chemicals Ltd. v. Jiangsu Sopo Corp., 285 F.3d 677, 682 (8th Cir. 2002).

  31. See, e.g., Anglo-Iberia Underwriting Mgmt. v. P.T. Jamsostek, 600 F.3d 171, 179 (2d Cir. 2010) (holding that Indonesian state-owned insurer's alleged negligent supervision of its employees did not occur "in connection with" insurer's provision of health insurance in Indonesia because alleged reinsurance scheme that injured plaintiff was "wholly unrelated to any negligent supervision by {the insurer}.")

  32. Republic of Argentina v. Weltover, Inc., 504 U.S. 607, 617–18 (1992); see Fontana v. Republic of Argentina, 962 F.3d 667, 670 (2d Cir. 2020) (finding a "direct effect" where a settlement in Argentina "ended long-running litigation in New York").

  33.  See, e.g., Atlantica Holdings, Inc. v. Sovereign Wealth Fund Samruk-Kazyna JSC, 813 F.3d 98, 108 (2d Cir. 2016); Samco Global Arms, Inc. v. Arita, 395 F.3d 1212, 1217 (11th Cir. 2005); Adler v. Fed. Republic of Nigeria, 107 F.3d 720, 726 (9th Cir. 1997).

  34.  See, e.g., Republic of Argentina v. Weltover, Inc., 504 U.S. 607, 619 (1992); Devengoechea v. Bolivarian Republic of Venezuela, 889 F.3d 1213, 1223–24 (11th Cir. 2018); De Csepel v. Republic of Hungary, 714 F.3d 591 (D.C. Cir. 2013); DRFP L.L.C. v. Republica Bolivariana de Venezuela, 622 F.3d 513, 517–18 (6th Cir. 2010); Hanil Bank v. PT. Bank Negara Indonesia (Persero), 148 F.3d 127, 132 (2d Cir. 1998); Voest-Alpine Trading USA Corp. v. Bank of China, 142 F.3d 887, 894 (5th Cir. 1998). But see Valambhia v. United Republic of Tanzania, 964 F.3d 1135, 1141–42 (D.C. Cir. 2020) (holding that there was no "direct effect" when foreign sovereign only "might" have paid through an American bank account or to someone in the United States, without any contractual obligation to do so).

  35. 28 U.S.C. § 1605(a)(5). Only cases that are "not otherwise encompassed" by the commercial activity exception can fall within this exception. Id.

  36.  See Argentine Republic v. Amerada Hess Shipping Corp., 488 U.S. 428, 439–40 (1989); Martinez v. Republic of Cuba, 221 F. Supp. 3d 276, 284–85 (N.D.N.Y. 2016); see also 1 Restatement (Fourth) of Foreign Relations Law § 457, Cmt. a, at 379 (2018).

  37. See 1 Restatement (Fourth) of Foreign Relations Law § 457, Cmt. a, at 379 (2018).

  38. See USAA Cas. Ins. Co. v. Permanent Mission of Republic of Namibia, 681 F.3d 103, 114 (2d Cir. 2012).

  39. See, e.g., USAA Cas. Ins. Co. v. Permanent Mission of Republic of Namibia, 681 F.3d 103, 108 (2d Cir. 2012); see also 1 Restatement (Fourth) of Foreign Relations Law § 457, Cmt. b, at 379 (2018).

  40. USAA Cas. Ins. Co. v. Permanent Mission of Republic of Namibia, 681 F.3d 103 (2d Cir. 2012).

  41.  Nwoke v. Consulate of Nigeria, 729 F. App'x 478 (7th Cir. 2018) (per curiam).

  42. Schermerhorn v. State of Israel, 876 F.3d 351 (D.C. Cir. 2017).

  43. Usoyan v. Republic of Turkey, 438 F. Supp. 3d 1 (D.D.C. 2020).

  44. See Sean Mirski & Shira Anderson, "What's in the Many Coronavirus-Related Lawsuits Against China?," Lawfare (June 24, 2020), https://www.lawfareblog.com/whats-many-coronavirus-related-lawsuits-against-china.

  45. See, e.g., Doe v. Fed. Democratic Republic of Ethiopia, 851 F.3d 7, 8 (D.C. Cir. 2017); Jerez v. Republic of Cuba, 775 F.3d 419, 424 (D.C. Cir. 2014); In re Terrorist Attacks on Sept. 11, 2001, 714 F.3d 109, 115–16 (2d Cir. 2013); see also 1 Restatement (Fourth) of Foreign Relations Law § 457, Reporter's Note 1, at 380 (2018).

  46. Schermerhorn v. State of Israel, 876 F.3d 351, 355 (D.C. Cir. 2017); see id. at 356.

  47.  Doe v. Fed. Democratic Republic of Ethiopia, 851 F.3d 7, 10 (D.C. Cir. 2017).

  48. Doe v. Fed. Democratic Republic of Ethiopia, 851 F.3d 7, 10 (D.C. Cir. 2017).

  49. See Argentine Republic v. Amerada Hess Shipping Corp., 488 U.S. 428, 440 (1989); Doe v. Fed. Democratic Republic of Ethiopia, 851 F.3d 7, 12 (D.C. Cir. 2017); see also 1 Restatement (Fourth) of Foreign Relations Law § 457, Reporter's Note 1, at 380 (2018).

  50. USAA Cas. Ins. Co. v. Permanent Mission of Republic of Namibia, 681 F.3d 103, 108 (2d Cir. 2012).

  51. 28 U.S.C. § 1605(a)(5)(A).

  52. See 1 Restatement (Fourth) of Foreign Relations Law § 457, Reporter's Note 4, at 382 (2018).

  53. See, e.g., Nwoke v. Consulate of Nigeria, 729 F. App'x 478, 479 (7th Cir. 2018) (per curiam); USAA Cas. Ins. Co. v. Permanent Mission of Republic of Namibia, 681 F.3d 103, 111–12, 113 (2d Cir. 2012); Usoyan v. Republic of Turkey, 438 F. Supp. 3d 1, 16 (D.D.C. 2020); see also 1 Restatement (Fourth) of Foreign Relations Law § 457, Reporter's Note 4, at 382 (2018).

  54.  See, e.g., USAA Cas. Ins. Co. v. Permanent Mission of Republic of Namibia, 681 F.3d 103, 112 (2d Cir. 2012); Usoyan v. Republic of Turkey, 438 F. Supp. 3d 1, 15 (D.D.C. 2020); see also 1 Restatement (Fourth) of Foreign Relations Law § 457, Reporter's Note 4, at 382 (2018).

  55. See, e.g., Nwoke v. Consulate of Nigeria, 729 F. App'x 478, 479 (7th Cir. 2018) (per curiam); USAA Cas. Ins. Co. v. Permanent Mission of Republic of Namibia, 681 F.3d 103, 112 n.43 (2d Cir. 2012).

  56. See Usoyan v. Republic of Turkey, 438 F. Supp. 3d 1, 14 (D.D.C. 2020) ("Plaintiffs rely on FTCA cases holding that there is no discretion for United States officials to commit unconstitutional acts. This proposition is reasonable when applied to United States officials because the Constitution places limits on the power of the United States government. . . . However, foreign sovereigns are not bound by the United States Constitution. . . . And, Plaintiffs have cited no case in which a foreign government has been found liable for violating the constitutional rights of an individual. For this reason, the Court concludes that FTCA cases finding violations of constitutional prescriptions by United States officials to be non-discretionary are not persuasive to the Court's analysis of Defendant Turkey's sovereign immunity under the FSIA." (citations omitted)); see also 1 Restatement (Fourth) of Foreign Relations Law § 457, Reporter's Note 4, at 382 (2018) (advising that "decisions under the FTCA should not necessarily be taken as appropriate guides to interpretation of the FSIA").

  57. 28 U.S.C. § 1605(a)(5)(B).

  58. See 1 Restatement (Fourth) of Foreign Relations Law § 457, Reporter's Note 5, at 383 (2018).

  59. Khochinsky v. Republic of Poland, No. 18-CV-1532, 2019 WL 5789740, at *6 (D.D.C. Nov. 6, 2019).

  60. See, e.g., Sean Mirski & Shira Anderson, "What's in the Many Coronavirus-Related Lawsuits Against China?," Lawfare (June 24, 2020), https://www.lawfareblog.com/whats-many-coronavirus-related-lawsuits-against-china.

  61.  See 1 Restatement (Fourth) of Foreign Relations Law § 455, Reporter's Note 15, at 374 (2018); Hazel Fox & Philippa Webb, The Law of State Immunity 430–31 (3d ed. 2015).

  62. 28 U.S.C. § 1605(a)(3). Each of these three elements has important nuances. For example, some courts have interpreted "{1} rights in property" to include not only tangible property but also intangible property. See, e.g., Abelesz v. Magyar Nemzeti Bank, 692 F.3d 661, 671 (7th Cir. 2012) (referring to "the faulty premise that the expropriation exception can apply only to a claim by an owner of tangible property"). It is also well settled that not every governmental interference with property rights means that the property was "{2} taken." Classic takings occur when a foreign sovereign engages in the "nationalization or expropriation of property," thereby acquiring a legal interest in that property, Zappia Middle E. Const. Co. v. Emirate of Abu Dhabi, 215 F.3d 247, 251 (2d Cir. 2000) (citation omitted), and not when, for example, a foreign government freezes financial assets as part of "a routine law enforcement action," Chettri v. Nepal Rastra Bank, 834 F.3d 50, 58 (2d Cir. 2016). Finally, a taking is "{3} in violation of international law" only in limited circumstances, including when it involves "the nationalization or expropriation of property without payment of the prompt adequate and effective compensation required by international law." Zappia, 215 F.3d at 251 (citation omitted).

  63. 28 U.S.C. § 1605(a)(3).

  64.  See, e.g., Bolivarian Republic of Venezuela v. Helmerich & Payne Int'l Drilling Co., 137 S. Ct. 1312, 1316 (2017) ("Put differently, the relevant factual allegations must make out a legally valid claim that a certain kind of right is at issue (property rights) and that the relevant property was taken in a certain way (in violation of international law)."). Courts cannot hear the merits of a case until they find that the property "was indeed 'property taken in violation of international law.'" Id. (citation omitted).

  65. See, e.g., De Csepel v. Republic of Hungary, 859 F.3d 1094, 1101 (D.C. Cir. 2017) ("In other words, the exception has two requirements. A claim satisfies the exception if (1) 'rights in property taken in violation of international law are in issue,' and (2) there is an adequate commercial nexus between the United States and the defendants.").

  66. See Recent Case, De Csepel v. Republic of Hungary, 131 Harv. L. Rev. 650, 650 (2017); Françoise N. Djoukeng, Note, Genocidal Takings and the FSIA: Jurisdictional Limitations, 106 Geo. L.J. 1883, 1895–98 (2018).

  67. See Kalamazoo Spice Extraction Co. v. Provisional Military Gov't of Socialist Ethiopia, 616 F. Supp. 660 (W.D. Mich. 1985).

  68. See, e.g., Luxexpress 2016 Corp. v. Gov't of Ukraine, No. 18-CV-812, 2020 WL 1308357, at *3 (D.D.C. Mar. 19, 2020); see also 1 Restatement (Fourth) of Foreign Relations Law § 455, Reporter's Note 6, at 368 (2018) ("Under the so-called 'domestic takings' (or 'single country') rule, a foreign government's taking of the property of its own nationals within its own country does not violate international law on expropriation and thus does not fall within the statute's expropriation exception.").

  69.  See 1 Restatement (Fourth) of Foreign Relations Law § 455, Reporter's Note 6, at 368 (2018); see also Mezerhane v. Republica Bolivariana de Venezuela, 785 F.3d 545, 549 (11th Cir. 2015) (describing the "so-called domestic takings rule: '{w}ith a few limited exceptions, international law delineates minimum standards for the protection only of aliens; it does not purport to interfere with the relations between a nation and its own citizens'" (citation omitted)).

  70. Republic of Austria v. Altmann, 541 U.S. 677, 700 (2004).

  71. See, e.g., Agudas Chasidei Chabad v. Russian Fed'n, 528 F.3d 934 (D.C. Cir. 2008).

  72. Agudas Chasidei Chabad v. Russian Fed'n, 528 F.3d 934 (D.C. Cir. 2008).

  73. See, e.g., Françoise N. Djoukeng, Note, Genocidal Takings and the FSIA: Jurisdictional Limitations, 106 Geo. L.J. 1883 (2018); Vivian Grosswald Curran, The Foreign Sovereign Immunities Act's Evolving Genocide Exception, 23 UCLA J. Int'l L. & Foreign Aff. 46 (2019).

  74. See, e.g., Simon v. Republic of Hungary, 812 F.3d 127, 142 (D.C. Cir. 2016).

  75. See Simon v. Republic of Hungary, 812 F.3d 127, 141 (D.C. Cir. 2016).

  76. See, e.g., Philipp v. Fed. Republic of Germany, 894 F.3d 406, 410–11 (D.C. Cir. 2018); De Csepel v. Republic of Hungary, 859 F.3d 1094, 1103 (D.C. Cir. 2017); Simon v. Republic of Hungary, 812 F.3d 127, 142 (D.C. Cir. 2016); Abelesz v. Magyar Nemzeti Bank, 692 F.3d 661, 675 (7th Cir. 2012).

  77. Fischer v. Magyar Allamvasutak Zrt., 777 F.3d 847, 858 (7th Cir. 2015).

  78. See Philipp v. Fed. Republic of Germany, 894 F.3d 406, 414–16 (D.C. Cir. 2018).

  79. See Fed. Republic of Germany v. Philipp, No. 19-351, 2020 WL 3578677, at *1 (U.S. July 2, 2020); Republic of Hungary v. Simon, No. 18-1447, 2020 WL 3578676, at *1 (U.S. July 2, 2020).

  80. See Jesner v. Arab Bank, PLC, 138 S. Ct. 1386 (2018); Kiobel v. Royal Dutch Petroleum Co., 569 U.S. 108, 112 (2013).

  81. See 1 Restatement (Fourth) of Foreign Relations Law § 455, Reporter's Note 6, at 369–70 (2018) ("By eliminating the 'domestic takings' rule and permitting claims to proceed on the basis of allegations that the takings occurred in the context of egregious violations of international law, this line of decisions appears to expand the scope of § 1605(a)(3) well beyond the original intent of the Congress, potentially opening courts in the United States to a wide range of property-related claims arising out of foreign internal (as well as international) conflicts characterized by widespread human-rights violations."); Mezerhane v. Republica Bolivariana de Venezuela, 785 F.3d 545, 549 (11th Cir. 2015) ("If successful, Mezerhane's {human-rights-based} argument would significantly extend the FSIA exception and open the courts of this country to suits involving takings abroad by foreign governments that have little or no nexus to the United States.").

  82. 28 U.S.C. § 1605(a)(1).

  83. Architectural Ingenieria Siglo XXI, LLC v. Dominican Republic, 788 F.3d 1329, 1338 (11th Cir. 2015).

  84.  See Federal Judicial Center, The Foreign Sovereign Immunities Act: A Guide for Judges 50 (2d ed. 2018); 1 Restatement (Fourth) of Foreign Relations Law § 453, Reporter's Note 1, at 345 (2018).

  85. See, e.g., GDG Acquisitions LLC v. Gov't of Belize, 849 F.3d 1299, 1306 (11th Cir. 2017); Barapind v. Gov't of Republic of India, 844 F.3d 824, 829 (9th Cir. 2016); Architectural Ingenieria Siglo XXI, LLC v. Dominican Republic, 788 F.3d 1329, 1338 (11th Cir. 2015).

  86. See Federal Judicial Center, The Foreign Sovereign Immunities Act: A Guide for Judges 49 (2d ed. 2018).

  87. see Jacubovich v. State of Israel, 816 F. App'x 505, 508 (2d Cir. 2020); Barapind v. Gov't of Republic of India, 844 F.3d 824, 829 (9th Cir. 2016); Federal Judicial Center, The Foreign Sovereign Immunities Act: A Guide for Judges 49 (2d ed. 2018); 1 Restatement (Fourth) of Foreign Relations Law § 453, Reporter's Note 1, at 346 (2018).

  88. See 1 Restatement (Fourth) of Foreign Relations Law § 453, Reporter's Note 4, at 347–48 (2018).

  89.  See 1 Restatement (Fourth) of Foreign Relations Law § 453, Reporter's Note 3, at 347 (2018).

  90. See Jacubovich v. State of Israel, 816 F. App'x 505, 509 (2d Cir. 2020); 1 Restatement (Fourth) of Foreign Relations Law § 453, cmt. b, at 343 (2018); Federal Judicial Center, The Foreign Sovereign Immunities Act: A Guide for Judges 49 & n.144 (2d ed. 2018).

  91. 28 U.S.C. § 1607(a).

  92. 28 U.S.C. § 1607(b).

  93. See 1 Restatement (Fourth) of Foreign Relations Law § 453, cmt. c, at 344 (2018) ("The rationale supporting unlimited recovery for related counterclaims against foreign states, even when the counterclaim could not have been brought in the United States as an original action, is that when a state resorts to courts in the United States to resolve a dispute, it thereby consents to resolution by those courts of all aspects of the dispute. If a given transaction results in obligations by both sides, it would be unfair and inconsistent with the foreign state's waiver of immunity to allow only one party's obligation to be adjudicated. Thus, when a state initiates an action, it subjects itself to the jurisdiction of the court with respect to all claims related to that controversy.").

  94. 28 U.S.C. § 1607(c).

  95. See 1 Restatement (Fourth) of Foreign Relations Law § 453, cmt. c, at 344 (2018) ("{T}he statute allows unrelated counterclaims to be brought, to the extent that they do not seek relief exceeding in amount or different in kind from that sought by the foreign state. Courts have permitted a setoff against any amount awarded to a state, which effectively treats the foreign state and the counterclaimant as both having interests in the same fund to be distributed by the court. To permit affirmative recovery by a counterclaimant on an unrelated counterclaim not otherwise adjudicable in the United States and exceeding any amount awarded to the foreign state would impose an excessive risk on a foreign state that sought access to courts in the United States as a plaintiff.").

  96. See Federal Judicial Center, The Foreign Sovereign Immunities Act: A Guide for Judges 50 (2d ed. 2018).

  97. See 1 Restatement (Fourth) of Foreign Relations Law § 460, Reporter's Note 11, at 402 (2018).

  98. For a comprehensive history of Section 1605A and its predecessor, § 1605(a)(7), see Owens v. Republic of Sudan, 864 F.3d 751, 763–65 (D.C. Cir. 2017), certified question answered, 194 A.3d 38 (D.C. 2018), and vacated and remanded sub nom. Opati v. Republic of Sudan, 140 S. Ct. 1601 (2020); see also Opati v. Republic of Sudan, 140 S. Ct. 1601, 1605–06 (2020).

  99. See 28 U.S.C. § 1605B.

  100. 28 U.S.C. § 1605A(a)(1).

  101. 28 U.S.C. § 1605A(a)(2)(A)(ii).

  102. See 1 Restatement (Fourth) of Foreign Relations Law § 460, Reporter's Note 3, at 398 (2018). Section 1605A does require that, "in a case in which the act occurred in the foreign state against which the claim has been brought, the claimant has afforded the foreign state a reasonable opportunity to arbitrate the claim in accordance with the accepted international rules of arbitration." 28 U.S.C. § 1605A(a)(2)(A)(iii).

  103. 28 U.S.C. § 1605A(a)(2)(A)(i)(I); see Schermerhorn v. State of Israel, 876 F.3d 351, 358 (D.C. Cir. 2017) (rejecting an "intriguing" but ultimately incorrect argument that Section 1605A permits courts, in their discretion, to hear suits against states that are not designated state sponsors of terrorism).

  104. U.S. State Department Bureau of Counterterrorism, "State Sponsors of Terrorism" (last visited Dec. 30, 2020), available at https://www.state.gov/state-sponsors-of-terrorism; see 1 Restatement (Fourth) of Foreign Relations Law § 460, Reporter's Note 1, at 397 (2018).

  105. Owens v. Republic of Sudan, 864 F.3d 751 (D.C. Cir. 2017).

  106. See, e.g., Vera v. Banco Bilbao Vizcaya Argentaria, S.A., 946 F.3d 120 (2d Cir. 2019); Sullivan v. Republic of Cuba, 891 F.3d 6 (1st Cir. 2018).

  107. Han Kim v. Democratic People's Republic of Korea, 774 F.3d 1044 (D.C. Cir. 2014).

  108. See 1 Restatement (Fourth) of Foreign Relations Law § 460, Reporter's Note 8, at 400 (2018).

  109. See, e.g., Vera v. Banco Bilbao Vizcaya Argentaria, S.A., 946 F.3d 120, 126 (2d Cir. 2019); Vera v. Republic of Cuba, 867 F.3d 310, 317 (2d Cir. 2017); Jerez v. Republic of Cuba, 775 F.3d 419, 422 (D.C. Cir. 2014); see also Sullivan v. Republic of Cuba, 891 F.3d 6, 10 (1st Cir. 2018).

  110. Vera v. Banco Bilbao Vizcaya Argentaria, S.A., 946 F.3d 120, 138 (2d Cir. 2019). The Second Circuit did not resolve just "how taut the causal link must be between a specific enumerated act—such as an extrajudicial killing or act of torture—and a country's later designation to support application of the terrorism exception." Id. at 137–38.

  111. 28 U.S.C. § 1608(e).

  112. Maalouf v. Islamic Republic of Iran, 923 F.3d 1095, 1101 (D.C. Cir. 2019).

  113. Han Kim v. Democratic People's Republic of Korea, 774 F.3d 1044, 1045 (D.C. Cir. 2014).

  114. Han Kim v. Democratic People's Republic of Korea, 774 F.3d 1044, 1045 (D.C. Cir. 2014).

  115. 28 U.S.C. § 1605A(c).

  116. 28 U.S.C. § 1605A(c).

  117. 140 S. Ct. 1601 (2020).

  118. See Opati v. Republic of Sudan, 140 S. Ct. 1601, 1604–06 (2020).

  119. Opati v. Republic of Sudan, 140 S. Ct. 1601, 1607 (2020).

  120. See Opati v. Republic of Sudan, 140 S. Ct. 1601, 1607–08 (2020).

  121. See Opati v. Republic of Sudan, 140 S. Ct. 1601, 1607–08 (2020).

  122. See Opati v. Republic of Sudan, 140 S. Ct. 1601, 1608–09 (2020).

  123. Opati v. Republic of Sudan, 140 S. Ct. 1601, 1610 (2020). For a negative answer to the first question Opati left open, see Fraenkel v. Islamic Republic of Iran, 892 F.3d 348, 353 (D.C. Cir. 2018); Leibovitch v. Islamic Republic of Iran, 697 F.3d 561, 569 (7th Cir. 2012).

  124. See 28 U.S.C. §§ 1609–11.

  125. 28 U.S.C. § 1609.

  126. See 28 U.S.C. § 1610. Section 1611 then contains exceptions to the exceptions.

  127. 28 U.S.C. § 1610(a)(2).

  128. See 1 Restatement (Fourth) of Foreign Relations Law § 464, Cmt. a, at 418–19 (2018).

  129. See, e.g., Rubin v. Islamic Republic of Iran, 138 S. Ct. 816, 820–21 (2018).

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