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The Foreign Sovereign Immunities Act’s “based upon” inquiry first requires a court to identify the particular conduct on which the plaintiff’s action is based. Considering dictionary definitions and lower court decisions, judicial precedent explains that a court should identify that particular conduct by looking to the basis or foundation for a claim, those elements that, if proven, would entitle a plaintiff to relief, and the gravamen of the complaint.
Respondent Carol Sachs, a California resident, purchased a Eurail pass over the Internet from a Massachusetts-based travel agent. While using that pass to board a train in Austria operated by petitioner OBB Personenverkehr AG (OBB), the Austrian state-owned railway, Sachs fell to the tracks and suffered traumatic personal injuries. She sued OBB in Federal District Court. OBB moved to dismiss, claiming that her suit was barred by the Foreign Sovereign Immunities Act, which shielded foreign states and their agencies and instrumentalities from suit in United States courts, unless a specified exception applied. Sachs countered that her suit fell within the Act's commercial activity exception, which abrogated sovereign immunity for suits “based upon a commercial activity carried on in the United States by a foreign state, 28 U.S.C. § 1605(a)(2), reasoning that her suit was “based upon” the Massachusetts-based travel agent's sale of the Eurail pass in the United States, and that the travel agent's sale of that pass could be attributed to OBB through common law principles of agency. The District Court held that Sachs's suit did not fall within § 1605(a)(2) and dismissed the suit, but the en banc Ninth Circuit reversed.
Did the respondent’s suit fall within the Foreign Sovereign Immunities Act’s commercial activity exception?
The Court reversed the Ninth Circuit’s judgment, and held that Sachs's suit fell outside the commercial activity exception and was therefore barred by sovereign immunity. According to the Court, Sachs failed to show that her action against OBB fell within the commercial activity exception; thus, the essentials of her suit were found in Austria. The Court held that the mere fact that Sachs bought the Eurail pass in the United States was insufficient to show that her claims were based upon that sale for purposes of § 1605(a)(2).