Carol Sachs v. Republic of Austria

rеcog- BIA As the relationship. qualifying intended not have

nized, could Congress Wang, Matter game. See zero-sum I would defer at 36-38. I. N. Dec.

25 & construction agency’s reasonable Brand step two. See at Chevron

statute 980,125

X, S.Ct. 2688. 545 U.S.

III. Conclusion 1153(h)(3) ambig-

I would hold F4 F3 and aged-out about whether

uous its am- are within beneficiaries

derivative they

bit, BIA’s conclusion and that the I that the believe not is reasonable. is enti- provision of this

BIA’s construction Found., 131 Mayo See

tled deference. X, 980,125 712; 545 U.S. at Brand affirm Accordingly, I would

S.Ct. 2688. court.

the district respectfully dissent. SACHS, Plaintiff-Appellant, P.

Carol

v. AUSTRIA; Hold- OBB OF

REPUBLIC Group; Personenverkehr

AG, Defendants-Appellees.

No. 11-15458. Appeals, States Court

Ninth Circuit. 13, 2012.* June

Submitted Sept.

Filed * 34(a)(2). R.App. Fed. P. unanimously case is concludes this panel argument. decision without oral suitable for 2007,

In Eu- purchased March Sachs a rail in California from Ex- pass Rail Pass company perts, a based in Massachusetts. pass A Eurail is a train ticket that allows railways various passage on of the Eurail association Group, thirty-one Euro- railway pean transportation providers. Becker, Becker, Geoffrey Becker & La- permitted pass Sachs’s travel Austriа CA, fayette, appellant P. Carol Sachs. Republic. April and the Czech Sachs Basombrio, Dorsey Whitney Austria, Juan C. where & traveled to she intended LLP, Mesa, CA, Costa OBB appellees originate journey, her and purchased there Personenverkehr, AG. upgrade a to her local sleeper ticket at a days later,

train A few April station. 27, 2007, arrived at Sachs the Innsbruck train and attempted station to board moving train. She fell to the tracks through gap platform and suffered injuries ultimately ampu- required the GOULD, Before: RONALD M. legs tation of both above the knee. TALLMAN, RICHARD C. and CARLOS BEA, Judges. T. Circuit (“OBB”) OBB Personenverkehr railway. Holding Austrian national OBB TALLMAN; Opinion by Judge Group (“Holding Group”) owns 100% by BEA; Judge Concurrence Dissent OBB’s The Republic stock. of Austria Judge GOULD. Holding Group created under Austrian law, railway and the Republic’s Federal OPINION Ministry Transport, Innovation and TALLMAN, Judge, announcing Circuit is the Technology sole shаreholder judgment of the Court: Holding Group. OBB is not required In this case we consider what acts pay corporate and, or through income tax be attributed to a applying Holding parent Group, all forwards immu- profits ‍‌‌‌​​‌‌‌​‌​‌​‌​‌​‌‌​​‌‌​‌​​​​‌​‌​‌​‌​‌​​​​‌‌‌‌‌‌‍to Austrian government. nity Foreign Sovereign under the Immuni- (“Eurail”) Group The Eurail is an associ- Act. ties organized ation under Luxembourg law. Carol Sachs sued Austrian-owned OBB thirty other European railways sustaining personal Personenverkehr after own Eurail Eurail. is a enti- legal distinct injuries attempt as a result of her to board ty employs management own moving train in Innsbruck. district employees. with, Eurail among is tasked court ruled that other things, marketing and sale exception to the Foreign Sovereign Immu- Eurail passes. nities Act did not and dismissed subject ju- Sachs’s suit for lack of matter filed a complaint Sachs in the Northern risdiction. Sachs appeals district California against District of court’s order. Austria, We have Holding Group, and OBB. She 28 U.S.C. 1291 and we affirm. of negligence, asserted claims de- design 480, Nigeria, 461 U.S. warn, v. Cent. Bank and breach feet, failure to (1983), 76 L.Ed.2d 81 103 S.Ct. merchantability and implied warranties taken “focus on actions fitness, federal premising sovereign.” Republic In re foreign served Group was not Holding diversity. of (9th Cir.2002). 1143, Phil., F.3d 1150 309 The Re- this case. party is not include actions in which the exceptions The to dis- moved Austria and OBB of public immunity, has waived its 28 foreign state juris- matter subject on lack miss based 1605(a)(1), involving § and actions U.S.C. Austria’s oppose not Sachs did diction. state’s successor interest foreign granted it. court and the district motion in the United id. property located not rule on at first did court The district 1605(a)(4). commonly § “The two most motion, supple- calling for instead OBB’s however, immunity, exceptions invoked actions of whether the briefing on mental acts and for tor are those for commercial imputed could be Pass Rail Ger., tious acts.” v. Fed. 2011, 28, January the district OBB. On Wolf (7th Cir.1996) 536, (citing 28 95 F.3d 541 motion to dismiss OBB’s granted court 1605(a)(2) (a)(5)).1 § & U.S.C. immune concluding that OBB after appeal This followed. from suit. Sachs, bringing suit party as the state, that an foreign must offer evidence

II immunity applies. Joseph Nigeria, Consulate Gen. v. in the by which courts The “sole basis” Office of (9th Cir.1987). 1018, 1021 If she does jurisdiction over may obtain States so, would bear the burden of estab Sovereign Foreign foreign states is by a of the evidence lishing preponderance (“FSIA”), 28 U.S.C. Act Immunities apply. See id. that the does Am Republic v. seq. Argentine § et novo a district court’s deter review de 428, We Corp., 488 U.S. Shipping erada Hess immunity (1989). regarding mination 683, 434, 102 L.Ed.2d 109 S.Ct. v. Banco Cent. de under the FSIA. Corzo FSIA, foreign pre are states Under (9th Peru, 519, Reserva del from suit federal immune sumptively .2001). Cir courts, subject to a number of and state Repub Arab Embassy

exceptiоns. III Lasheen, 603 F.3d Egypt v. lic of only excep- agree that the (9th Cir.2010); parties also 28 U.S.C. see is the commer- appeal relevant to this in 28 tion exceptions § are found 1604. These deprives for- activity exception, which § § Verlinden B.V. cial 1605 and U.S.C. 1605(a)(2). § The tortious act ex- activity exception with- 28 U.S.C. 1. The commercial foreign part, deprives a state of ception, for its any foreign immunity from a state draws immunity in cases case encompassed paragraph not otherwise upon a com- the action is based in which above, (2) money damages in the United carried on mercial foreign personal sought against a state for state; upon foreign an act or States death, damage to or loss of injury or or in connec- performed in the United States occurring property, activity of the for- with a commercial tion by the tortious аct or omission and caused elsewhere; upon an act out- eign or foreign state state or of official of that territory acting States in foreign of the United employee side employ- scope his office or with a commercial connection within act and that ment. state elsewhere 1605(a)(5). § States. in the United a direct effect causes eign sovereigns immunity in any erly case to it for pur- “in which the action is based upon poses. a com- Id. at 1076. carried on in the United appeal, On recognized that “in apply- States state.” 28 U.S.C. jurisdictional provisions of the 1605(a)(2). § There is no dispute that FSIA, courts will routinely have to decide OBB, “agency as an or instrumentality” of whether a particular corpora- individual or

Austria, 1603(a), id. constitutes a “for- tion is an agent of a state.” Id. at eign state” for the purposes of the FSIA. 1079. We looked for guidаnce in First argument

Sachs’s is scat- City National Bank v. Banco Para El premised tershot but is upon the fact (Bancec), that Comercio Exterior de Cuba 462 the pass by 611, sale of the Eurail 2591, Rail Pass U.S. 103 S.Ct. 77 L.Ed.2d 46 Experts (1983). commercial activity Bancec, Supreme the Court should to OBB. parties Both considered the inverse situation from the agree that purchase the pass the Eurail Holy is, one we faced in See—that when only is the within the the actions of a foreign state could be United States relevant to this case. But 620, attributed to its subordinate. at Id. OBB denies that it was commercial activity 103 S.Ct. 2591. government The Cuban the state because connection be- had established Bancec as an official credit tween Rah union, Pass and OBB is so stock, owned all of its and supplied attenuated. capital. 613-14, Id. at 103 S.Ct. 2591.

In 1960 Cuba nationalized all proper- U.S. A. ty in country, the including banks. Citi- bank previously had issued Bancec a letter previously We grappled ques with the of credit sugar but, related to a sale when tion of which acts could be attributed to a presented Bancec the letter for payment, foreign state under the FSIA in Doe v. paid Citibank the sought amount less the See, (9th Cir.2009) Holy 557 F.3d 1066 (per expropriated value of its Cuban branches. — curiam), denied, cert. —, ‍‌‌‌​​‌‌‌​‌​‌​‌​‌​‌‌​​‌‌​‌​​​​‌​‌​‌​‌​‌​​​​‌‌‌‌‌‌‍U.S. 130 614-15,103 Id. at S.Ct. 2591. Bancec then 3497, (2010). S.Ct. 177 L.Ed.2d 1089 John brought suit in federal district court seek- Doe, case, V. plaintiff the in that brought ing to collect on full the value of the letter claims, vicarious liability others, among of credit and Citibank counterclaimed. against See for the actions of its 615,103 at S.Ct. 2591. subordinates, including the Archdiocese of Portland, (Archdiocese), Oregon the Cath The Court considered whether Bancec olic Bishop of Chicago (Bishop), and the was liable on expropriation Citibank’s (Order). Order of the Friar claim; Servants Doe was nоt at issue in the Ronan, that Father a member of 619-21, case. 103 S.Ct. 2591. As priest Archdiocese, Order and in Holy noted Supreme Court sexually had assaulted him when he was a “recognized a presumption of ‘separate ju- ” teenager. Id. at 1069. The district court ridical status’ subordinates of held that Bancec, states. 557 F.3d at (quoting immunity did not but 624, 2591) (brackets 462 U.S. at 103 S.Ct. did, omitted). tortious act thus granting it The Court clarified that jurisdiction. Id. at 1071. (1) See presumption will negated only countered that it immunity retained a corporate “where entity extensively is so suit because the acts of Archdiocese, controlled its owner that a relationship the Bishop, and the Order could not prop- (2) of principal and agent is created” or be attributed to presumption legitimately [for- “would recognizing where Bancec, purposes of eign establishing injustice.” state] fraud or work FSIA],” (internal 629, quotation jurisdiction we first [under omitted). second, state recognize must has a on the Relying marks juridical separate status. presumption held Bancec Court equitable prong, presumption Id. at 1079. That separate sta- recognizing liable because if Cuba, only complaint alleges true beneficia- overcome permit tus would bank, “day-to-day, routine involvement” of the by-then-defunct ry behind corpora- in the individual against Citibank bank’s enforce the affairs, if tion’s see id. at or maintain- simultaneously avoiding jurisdiction “work fraud or presumption counterclaim on the creditor’s 630-32, injustice,” see id. 1078-79. government. Cuban S.Ct. 2591. B. analysis adopted this expressly

We jurisdic- allegations Sachs’s do withstand this extended it to Holy See and Pass sale FSIA, scrutiny. Experts’ the Fifth Rail of the joining the phase tion of cannot, See, Holy pass 557 at Eurail under doing. in so F.3d and D.C. Circuits Doe, imputed to OBB. Like John V. presump- (“Applying 1078-79 Banсec’s allege day-to-day, not routine for overcom- Sachs “does as the standard tion—as well of’ OBB in Eurail Group, the outset of a involvement that presumption —at Experts. much Rail Pass See id. at phase makes less as as at the merits suit well sense.”). alleges Group that Eurail the facts of the 1079. She Turning to good represents and OBB that case, allegations owned and we that Doe’s concluded agent Bancec Rail was in turn the stan- Pass were not sufficient under Group. Eurail But these facts fall far of the presumption to the dard overcome the standard re- juridical short of what Bancec Holy separate status. See’s required quires. Republic In Flatow v. allege not Islamic 1079. Doe did of Iran, example, applied we Bancec “day-to-day, routine involvement” operations phase standard at merits determine Holy in its subordinates’ See the actions of a bank could be principal— of a whether establish the existence (citing imputed to Iran. 308 F.3d relationship. Flatow v. Id. Iran, that and Despite the fact Iran nationalized 1065 Islamic (9th Cir.2002)). bank, as fully proposed as well Holy The fact that owned directors, we regu- even candidates for its board those entities and See created were insuffi- enough. allegations not 1079- held that these lated them was negate sepa- cient jurisdiction proper presumption under the 80. Nor was juridical at 1071-74. not rate status. alleged “Doe equitable prong. ha[d] ... used Holy inappropriately that See OBB, allege The can is that Sachs best separate corporations status of the thirty with other part-owner along as Bancec, benefit, own that its owners, degree wielded some control Holy corporations for the created Sеe Group was aware that over Eurail evading liability for its own purpose of agents like Group Eurail used U.S. sales wrongs.” Id. at 1080. Experts. But even these facts Rail Pass Holy See. Holy nearly enough land after See is not lay The that OBB was alleged nowhere determining Sachs has considerably clearer. thus routine, Experts’ in Rail involved Pass complaint acts alleged “which of the See, day-to-day Holy see operations, C. fact, 1079; in it is F.3d at not clear argue concurrence dissent OBB even aware that Rail Pass Ex- was precedent the above is not applicable to alleged it perts existed. Nor is that OBB ease Holy our because in consid- we Group’s involved in Eurail affairs to ered the tortious act immu- high degree. Eurail has Group nity rather than the commercial independent management. The con- own exception. This distinction was not Ex- nection between OBB Rail Pass meaningful See, analysis Holy to our perts enough close under the first it nor should be here. prong the Bancec standard to overcome presumption separate juridical sta- opinion Holy Our expan- See contains impute

tus and pass the sale the Eurail language regarding sive applicability to OBB. deciding FSIA cases. After that the ac- Archdiocese, Order, tions granting immunity Nor would to OBB Bishop were not attributable to the injustice,” “work fraud or Bancec’s second See, plaintiff concluded that the for overcoming method the presumption of had “therefore not sufficient facts separate juridical status. See 1077- id. at demonstrate that to sov- Bancec, (quoting U.S. at ereign immunity applies to that cause of 2591). undisputed It is (em- action.” 557 F.3d at 1080 engages itself in no commercial added). phasis We also that “in noted thе United presumably part in to applying jurisdictional the provisions of immunity retain from suit in American FSIA, the will courts routinely have to Any injustice courts. that results is no decide whether a particular individual or greater than in the mine-run of cases— corporation state,” is an agent of a foreign is, over a after provides and that “Bancec a workable all, ordinarily not available. Verlin- See deciding standard for question.” this den, 488, 461 U.S. at 103 S.Ct. 1962. And at 1079. Nowhere did we indicate that Bancec, cry this case is a far from where holding this be should cabined the tor- to Cuba, beneficiary the real behind a defunct act exception tious and indeed such an bank, wanted to on the collect bank’s claim interpretation fly would in the face of a against deny jurisdiction Citibank but plain reading language. of this Citibank’s counterclaim Cuban the government. Bancec, 631-33, 462 U.S. at question corpora- of which acts of a 2591; Flatow, 103 S.Ct. see also or an tion may individual imputed to (“[UJnlike Bancec, at 1072 in Sader- [Bank the prehminary state is to consid- at Iran] is not attempting to use a United eration of exceptions individual to immuni- States court to on a recover ty, we previously have recognized: “Be- the same time to trying being avoid turning which, fore question to the if subject of adversary proceeding.”). any, of the exceptions FSIA’s immunity to There is no sleight similar hand OBB we apply, must determine which of the trump would presumption its acts complaint legiti- juridical separate See, Holy status. mately See to Holy attributed See for 557 F.3d at 1079. OBB thus engaged purposes of establishing jurisdiction.” Id. no commercial within the United at 1076. There nothing is ambiguous strip States would it of immunity its holding. If we had wanted restrict to to suit. analysis our exception the tortious act case, Holy act Sеe stands for alone, explicitly exception have so we done would implicitly, at least that what language. proposition, using sweeping such instead exception may may apply immunity precedent we cited any of Nor does of a makes no difference to which actions exclusivity Holy evince See sover- corporation can be attributed anything if exception; act tortious eign. Holy See suggests opposite. caselaw that the directly Out-of-circuit caselaw confirms its attribution standard borrowed applicable But to the the Bancec standard is Bancec. 1079-80. jurisdictional provisions regardless was not con- FSIA’s Court Bancec Supreme amenability analy- exception of which is at issue. The stan with to suit—its cerned way unique acts dard in no tort cases. focused what could be sis liability, Leasing, Both v. La purpоses state for Transamerica Inc. to the Venezuela, jurisdiction, Republica id. at de F.3d 847- Holy See extended 54, why reason and Arriba Ltd. v. Petroleos Mexica 1077-78—so there no nos, 533-36, 962 F.2d at extended Bancec one standard jurisdiction phase involving to the immunity but not others. cases activity exception. Like Holy expressly tellingly, Most See Illinois, wise the Northern District cit with two other circuits aligned ourselves ing applied our decision in analy this same Bancec that had extended provision. Bancec to this In re Potash jurisdiction phase and that did so sis to 816, Litig., F.Supp.2d Antitrust 821- exception. (N.D.I11.2010). Another district court 1078; also Leas see Transamerica to a decision extended Bancec case involv Venez., 200 Republica Inc. v. La de ing, 1605(a)(3), “takings” exception, (D.C.Cir.2000); 843, Arriba F.3d 847-48 entirely different to immuni Mexicanos, v. Petroleos Ltd. Fr., ty. v. Republic Freund (5th Cir.1992). in That 533-36 (S.D.N.Y.2008). F.Supp.2d 558-59 exception the tortious act did not volved case, fact, provides The in that dissent no on these to matter when we relied seem suggests might apply that to one Bancec in adopting for the Bancec support cases jurisdictional provisions of the FSIA’s but phase. jurisdiction for the FSIA’s standard authority not The of such to all. absence (“The See, Supreme at Holy 557 F.3d is striking. opportu not in Bancec did have Court true, notes, It actions as the dissent that we nity to consider whether the of specifically to the sov did not consider the commer- corporation be attributed activity exception immunity Holy ... cial in ereign purposes determining for why it is jurisdiction that 557 F.3d but unclear whether over make a difference in the previously have not addressed fact should exists. We in present Holy At least two case. Our decision ‍‌‌‌​​‌‌‌​‌​‌​‌​‌​‌‌​​‌‌​‌​​​​‌​‌​‌​‌​‌​​​​‌‌‌‌‌‌‍See question either. other however, circuits, question which exception faced with such scenar viewed the io, immunity might apply totally separate substantive cor applied have Bancec’s of which acts were attribut- principles determining the issue porate law The structure of able to the state. whether exists (internal supports this opinion interpretation. omitted and ital FSIA.” footnote removed)). sub-headings has in its By relying opinion on two circuits four ics first discuss “Analysis” section. The two applied Bancec the context activity in a tortious standard review exception case, appeal. reject The third is entitled we over Sachs’s the dissent’s May Acts Attrib- “Determining Which Be contention Barkanic v. General Ad- uted to the for Jurisdictional ministration Aviation the Peo- Civil finally fourth Purposes,” and in a ad- (2d China, ples 822 F.2d 11 If exception. dress tortious act Cir.1987), and Kirkham v. Société Air determining which acts of a stаndard France, (D.C.Cir.2005), 429 F.3d 288 eluci- corporation were attributable to the sover- our In each date task. of these cases the unique excep- to the tortious act eign were court held that the commercial tion, analyze made sense it have exception applied and that in our together. them Yet discussion of state was not immune from suit. But did agency/attribution we not once mention agency undisputed was in both Kirkham 1605(a)(5)— § act exception the tortious Barkanic squarely and thus neither other for that matter— tackles the issue us before here: whether anchoring if we which would be odd were the acts of a separate entity may attrib- analysis statutory our to the text of that to the sovereign. uted alone. subsection Barkanic, purchased the decedents if Holy only Even applicable See were for an certain, flight tickеts internal all, but Chinese excep- not of the FSIA’s CAAC, airline, immunity, tions to Chinese state from a exceptions closely and tortious act are agency, travel the court stated statutory tethered text. “The tor- “an agent was for Pan American.” 822 activity exception provides jurisdic- tious and Pan CAAC Am entered tion over tort encompassed actions general agency agree- into a bilateral sales ‘in which whereby general ment CAAC would act as money damages sought against a for- agent Am sales for Pan and Pan China eign damage for ... to or loss of Am general would act as sales property, in the occurring CAAC United States. Id. CAAC and caused the tortious act or omission maintained employees offices New ” of that Joseph, state.’ operated flights York and some out U.S. 1605(a)(5))(alteration (quoting crashed, cities. Id. flight The decedents’ original). them, killing and their estates sued nothing opinion There is in our airline. opinion Id. The focused on suggest See to that we meant to restrict its whether there sufficient nexus be- applicability to exception. the tortious act tween crash and CAAC’s commercial assuming Even directly the decision is not activity within the United but the controlling, given opinion’s language, explicitly analyzéd quali- court never what precedent, and structure there is no intelli- activity fied “commercial carried on in gible why reason it we should not by the United States state.” foreign a closely analogous case. The concurrence 1605(a)(2); Barkanic, § 28 U.S.C. see explain and dissent do not attempt even to F.2d at 13. by limiting what ap- factor Bancec would a injured Kirkham woman ply to the involved who tortious act not Orly Paris, her at activity exception. Airport allegedly the commercial fоot the negligence due to of an Air France D. employee. plaintiff at 290. F.3d purchased Even were accept we to her tickets from a travel suggestion that controlling See is not agency; trip flight on this her included a on Unit- BEA, D.C., Judge, concurring in the to Circuit Washington, Par- ed Airlines judgment: later, flight to Corsica and, days four is injury Id. The occurred on Air France. I majority’s holding concur in the that flight. to her second airport prior at the correctly the district court dismissed this solely court focused on Again subject jurisdiction. case for lack matter however, separately, I write because I upon based her the claim was whether agree Judge with Gould the definition considering com- without purchase ticket v. agency in Doe 557 F.3d 291-92, at in this case activity, id. mercial Cir.2009) (9th concerning case —a “Air the ticket concede[d] because France Foreign act to the Sov- tortious activity in a commercial sale constituted (FSIA) Immunities Act not ereign —need Id. at 293. the United States.” question agency to the extended interprets these cases to The dissent concerning activity cases carri- foreign mean “that where a common exception. This court’s decision Sun v. er, entity, pur- operated Cir.2000) (9th Taiwan, per- 201 F.3d 1105 use of the carri- posefully sells tickets for narrowly, us to the case more mits decide through arguendo overseas a domestic an assuming agency er’s services relationship Rail Pass Ex- ticket is exists between agent, the sale sales (Experts), Eurail, perts and OBB Perso- which to the for- activity (OBB) impute to nenverkehr serves eign carrier.” But this conclusion common Experts the acts and to OBB. omissions question to we assumes the answer affirm the district court answering: with whether Rail Pass tasked allege fails basis that Sachs facts suffi- Agen- an OBB all. give cient to under Sun. rise Barkanic, cy undisputed was Kirkham, provides immunity foreign The FSIA states action “in which the action is It hotly here it is contested. whereas upon activity based a commercial carried simply attributing enough note on in the United States the ticket sale to the airline went “without state; upon performed or act without dispute parties between connection with com- suggestion from either the Second Circuit of the state else- so or the D.C. Circuit that do where; upon act outside the territo- with the inconsistent FSIA’s ry in connection of the United States with exception.” why not know We do a commercial undisputed agency was should not elsewhere and that act causes direct speculate. But we cannot counsel’s allow effect in the United States.” U.S.C. forego contesting strategic decision 1605(a)(2). Sachs bases her in Kirkham agency and Barkanic fore- subject exclusively matter ability to close OBB’s do so here. activity the commercial first clause the in question so the exception, relevant IV appeal is whether her action “is based upon activity a carried on in commercial judgment It the of this Court that the by the state.” correctly district court dismissed this case Sun, brought a wrongful the Suns subject jurisdiction. for lack of matter gov- action the Taiwanese death ernment, foreign sovereign, a after their AFFIRMED. 679, 129 (2009) 1937, 173 son Taiwanese beach with L.Ed.2d drowned tides, tricky spon- claimed on a trip (reviewing courts must draw on common by government sored the Taiwanese sense determine whether a claim for in the United States. 201 F.3d advertised “plausible”). relief This court FSIA 1106-07. held remaining Sachs’s claim is based on tort claim barred Suns’ because alleged OBB’s to warn failure about the marketing claim was not “based on” the gap platform between the and the rail tour, for the and ticket sales commer- cars. This claim is stated broadly enough activity cial carried on Taiwan in the a claim negligent misrepre- constitute Id. at 1109. court United States. The sentation, requisite but the nexus activity exception held that the commercial alleged act omission the United (1) alleges if the claim does lacking. States is court in Sun ex- negligence entirely that occurred in for- pressly distinguished a failure warn (2) eign country, or the claim fail- alleges claim negligent misrepresentation from a ure to warn negligent misrepre- and not claim, defining the latter as affirmative sentation. 1109-10 & n. 2. To duty to disclose “known information con- allege negligent misrepresentation claim cerning prospective dangers.” 201 F.3d at jurisdiction, that could confer the plaintiff 1110 n. 2. сomplaint Sachs’ not al- does must show a nexus between failure to lege negligently misrepresented OBB warn and commercial that oc- duty services breaching a to disclose States, curred the United id. at knowledge the dangerous platform train example, for by alleging failure to warn conditions United States at ticket sold in a United States or Instead, point sale train tickets. she United States advertisement. Neither alleges that there was Sun, until changed the Suns in the United States —OBB’s advertising theory their of the case in their appellate passes, and sale of Eurail both directly and brief. Id. The Sun panel noted this through agents Eurail and Rail Pass change, and it remanded case to the separately then alleges that —and court district consideration the Suns’ she should have been warned about the negligent amended misrepresentation gap platform. qualify a negli- To claim based on gent misrepresentation sufficient to took place the United States. jurisdiction confer under FSIA under allege Sachs does not facts sufficient to Sun, complaint Sachs’s would to al- have give rise under Sun. disclosed, lege OBB should have first Sachs’s set claims—that Per- States, the ticket delivered in the United (OBB) sonenverkehr negligently moved in their advertisements broadcast in the train, provided an place unsafe States, or in some other manner in car, board the rail to supervise failed dangers the United of the known boarding, negligently stop failed to gap. pleaded The facts as are insuffi- train, and breached various warranties— cient to invoke allegations that, are all of negligence FSIA. aught that appears, entirely occurred Although deny Austria. Sachs does Sachs not state leave amend her violated, аbove, complaint. where these duties were only As noted the Sun court plausible complaint of her reading is that remanded that case to allow the district such acts and place omissions took in Aus- court to review the whether Suns’ new tria. See v. Iqbal, 556 claim of negligent misrepresentation was Ashcroft a permits the tion of the FSIA domestic forum in United on commercial based “changed their in assert her negligence the Suns which Sachs because States OBB, briefs” theory appellate case in their or that our other claims Taiwan, negli in to precedent prevent to warn not from failure Ninth Circuit does this, the United misrepresentation general that the gent and we should follow Specifically, F.3d at 1110. the circuits approach States. other federal that have been alleged they should Suns that have decided in similar cases ticket advertising the done the warned in agent in the sales United States government the United Taiwanese activity exception invoked the commercial danger the treach the known States of immunity in sovereign involving cases Taiwanese beach. Id. erous tides the common carriers. Sachs, conversely, changes neither her See, Holy not believe that Doe v. do on file to

theory the case in her briefs Cir.2009) (9th controls allege misrepresentation negligent See, Holy of this appeal. outcome plat dangerous train district court concluded FSIA’s Sun, Austria, nor form conditions activity exception to sovereign purpose, to amend for this requests leave Holy immunity did not See’s amendment, multiple despite prior activity, and the district court dismissed in district court.1 briefs filed alleged Doe’s fraud claims under that ex- Instead, ception. district GOULD, dissenting: Judge, Circuit Holy court сoncluded that See’s activi- sovereign majority The decides ty FSIA’s fit within the tortious immunity of OBB Personenverkehr sovereign immunity, Austria, (“OBB”), railway national de- Holy court See’s district denied motion forum starting gate domestic feats at remaining all Doe’s to dismiss claims by a States claim United negligence for alleged activity excep- under the tortious bought a Eurail pass citizen who 1605(a)(2)(com- Id.; tion. see 28 U.S.C. Sachs, California, United States. (tortious (a)(5) activity exception), from Rail Pass Ex- bought pass a Eurail exception). sub-agent of perts, a Massachusetts-based decision, Holy appealed that Group. Group The Eurail mar- the Eurail worldwide, cross-appealed in- and Doe the district court’s passes kets and sells rail his dismissing OBB is order fraud cluding States. within United activity exception. under the commercial Group, of the Eurail part-owner declined, 1071. We carry Eurail customers Aus- OBB trains however, to Doe’s commercial ac- permitted Eurail Sachs to consider pass tria. The tivity-based appeal. in an unoc- at 1074-75. We train and sit board an OBB injured did have seriously concluded cupied seat. Sachs appeal, Doe’s unlike train because trying board that, not fall within the collat- appeal, of See’s did purposes I believe Austria. final judgment to the interpreta- eral order immunity, a sensible However, require plead local rules that a request er case. to amend to 1. Sachs did leave accompa- request leave amend must be of Rail would show that the actions facts that pleading, proposed by the Sachs to OBB. nied Pass should allege allege proposed no that would requested amendment Had leave to amend she acts omissions in the her claim is based on or omissions in that her сlaim based acts Cal. R. States. N.D. 10-1. a much hard- the United rule, against foreign “the tort causes of that “[ques [that and action states” and to appeal Bancec, were relevant See’s liability by tions are addressed of inextricably were] not intertwined with which examines circumstances under Doe’s other claims.” Id. at 1075. We foreign entity which can be held substan said: tively government’s liable for the words,

In other here we asked judgment debt.” Re Flatow v. Islamic up appeal grant take from that (9th Iran, public 308 F.3d 1065 Cir. of and determi- reverse district court’s 2002) added).1 (emphasis nation; out we would have reach expressly Because we did not consider engage disquisition in a lengthy on the activity exception Holy in FSIA, commercial See, it is not both controlling. Because neither must nor we should do. separate ju Bancec and deal Thus, Flatow with will we not consider issues re- ridical purposes liability, status ‍‌‌‌​​‌‌‌​‌​‌​‌​‌​‌‌​​‌‌​‌​​​​‌​‌​‌​‌​‌​​​​‌‌‌‌‌‌‍for the of garding grant court’s the district im- of munity majority’s under the neither mandates the approach commercial to the FSIA. resolving would, instead, appeal. follow added). the decisions of the Second Circuit (emphasis Id. in Barkanic v. General Administration We of went on to extend the presumption Civil People’s Republic Aviation Chi separate juridical in favor of status at of (2d na, Cir.1987) 822 F.2d 11 liability phase, by Supreme identified in D.C. Circuit Kirkham v. Air Société City Court First National v. Bank Ban France, (D.C.Cir.2005). 429 F.3d 288 Cuba, co Para El Comercio Exterior de courts in expressly Barkanic and Kirkham 611, 103 462 U.S. 77 L.Ed.2d 46 (1983) considered the (“Bancec activity excep ”), to the immunity tion phase of the FSIA inquiry. Holy FSIA in the context the sale of F.3d 1079. We though did this even common explained an earlier case carrier tickets in the “[t]he exceptions agents. pro Although enumerated to the FSIA Statеs travel there subject vide exclusive source of matter some distinctions of fact in those jurisdiction over cases,2 civil brought actions I read them to mean in substance preclude 1. ruling Flatow also does not BSI could not held Republic liable for the there, favor of inquiry Sachs because our obligation like of Iran's to Flatow. Bancec, ques- the Court's in centered on liability, jurisdiction, per- tion of and not Kirkham, bought 2. In an Kirkham airline tick- activity excep- mitted under agent Washington, et from travel D.C. for sovereign immunity tion to under the FSIA. Kirkham, Europe. travel on Air France in (“The See id. at 1069 distinction between lia- injured 429 F.3d at 290. Kirkham was in a bility is crucial to our resolu- airport planes, changing Paris and she case.”). permit tion of this We declined to France, majority sued Air whose shareholder appellant levy property real Barkanic, Republic is the of France. In ("BSI”), owned Bank Saderat Iran a na- CAAC, bought fly Barkanic a ticket to on bank, tionalized satisfy order to a default China, People's Republic judgment against of Iran. Id. at a Pan agent Washing- Am-affiliated travel Bancec, Relying ton, Barkanic, 1066. we concluded that D.C. 12. Pan Am allege Flatow did not facts sufficient to over- previously and CAAC had entered into come ‘s presumption separate jurid- Bancec agency agreement in which Pan Am was au- liability phase. ical status at appoint agents thorized travel to sell seats short, presumption separate under the flights. CAAC Barkanic killed juridical purposes China, liability, flight status for the when his CAAC crashed carrier, as “commercial foreign a state” is defined op- common foreign a where that activity by carried on such state and hav- entity, purposefully sovereign by a erated contact with the United ing substantial the carrier’s ser- for use of tickets sells 1603(e). § legislative States.” sales through a domestic overseas vices history Congress notes that intended the activity is commercial the ticket sale agent, activity exception commercial foreign com- to the may imputed which endeavor, spectrum of “a broad invoke the carrier and is sufficient mon commercial transaction or act to individual sovereign activity exception to commercial commercial conduct.” 1605(a)(2) regular a course of § of the FSIA. immunity under Rep. H.R. 94-1487 at 6614-15. are consistent and Kirkham Barkanic part owner Here OBB is a member FSIA, language of the plain with consumers, targets Eurail which jurisdic- the limitation to require does selling passes year thousands of each activity excep- commercial tion under the OBB, railways, including on use majority. by the Section tion relied on Europe upon purchase one of a throughout 1605(a)(2)provides: through That Eurail does this sub- pass. immune not be foreign A state shall Experts3 like Rail Pass in the agents jurisdiction of courts of from the OBB, change does not that or of the States States United Eurail, through regularly engages based ... which the action is ease activity in type of commercial the United activity carried upon a commercial Congress that intended to defeat States state; by foreign States United immunity under the FSIA. In sovereign in the United performed an act upon or deed, of the Eurail primary purpose a a commercial in connection with States in the entity is to market and sell United elsewhere; of the state passes Eurail and around the world States territory an act outside the upon good only passage on OBB and other a in connection with the United States way, railways. Stated another European commercial entity, Eurail in which knew that the OBB a direct and that act causes elsewhere owner, marketing part it was would be in the States. effect United like Sachs in the United passes people added). 1605(a)(2) charged It knew or should be with (emphasis § States. 28 U.S.C. knowledge that Eurail would constructive activity” is defined as “either “Commercial Experts Rail Pass sub-agents or use like of commercial conduct regular a course people like Sachs within transaction or sell tickets particular 1603(d), States. See act,” and a “commercial United id. at Phaneuf v. (9th Indonesia, Cir. 307-08 States activity carried on court, argued OBB wrongful 3. Before the district death suit filed his survivors Experts CAAC. Id. an authorized Rail Pass is not however, whether the acknowledges, case was the issue of In neither of OBB. (i.e., air- the sale of the Group of the Eurаil OBB is a member agent) could in the U.S. a travel line ticket be, presumably, "Rail Pass raised. Instead to the agent accredited subagent general sales to both the ticket was attributed the sale of therefore, and, group able to by The Eurail dispute between the foreign carriers without higher passes (likely rates than sell Eurail suggestion from either parties and without directly).” available from Eurail those Circuit that to Circuit or the D.C. the Second com- inconsistent with the FSIA’s do so was activity exception. 1997) (“Because acts giving duty rise to the [of reasonable care] ... through agents, agent’s its deed which include common carrier with pas- Thus, sengers.”). authority the commercial activity, based on the actual of the argues which Sachs that the commer- state constitutes ‘of the cial sovereign immuni- purpose state’ of the com- [for ty should here a necеssary ele- activity exception].”). OBB has (i.e., ment duty establishment of the empowered agent, Eurail Group, care) that, reasonable if proven, would en- passes good trains, sell for travel on OBB title Sachs to relief on a least some part of including through sub-agents Rail like Nelson, her action OBB. See Pass within the United States. 4, (“We n. U.S. do Moreover, See id. when a citizen suggest not mean to that the first clause of buys pass a Eurail in the United States for 1605(a)(2) § necessarily requires that each passage on railways OBB and other every element of a claim be commer- in the United and then is state.”). activity by cial injured through allegedly improper activi- ty foreign railway carrier, judgment like OBB A in favor of Sachs is also in Europe, person such a should be able to consistent with our decision Sun v. Tai- wan, (9th Cir.2000). have a forum for suit within 201 F.3d 1105 the United In that case, we sovereign aрpellants States so far as considered whether the immunity is bring could a wrongful concerned. death action against Taiwan under the commercial ac- I also believe that Sachs’ action is suffi- tivity exception immunity un- ciently upon” “based OBB’s commercial der the FSIA after their son drowned on a required by as is the FSIA. 28 Taiwanese beach during a cultural tour of 1605(a)(2). § U.S.C. In Saudi Arabia v. country. court, Before the district Nelson, 349, 507 U.S. 113 S.Ct. appellants only alleged “a negligent failure (1993), L.Ed.2d 47 Supreme Court ex- to warn and failure to exercise reasonable plained that within the context of the supervision.” Id. at 1109. We clarified FSIA, phrase “the upon’] [‘based is read phrase that the upon requires “based ... naturally most to mean those elements of a nexus between the action and the commer- that, proven, if a plain- entitle cial activity.” Id. We then reasoned thаt tiff to theory relief under his of the case.” although operation Taiwan’s of the tour Indeed, Id. at 113 S.Ct. 1471. “[t]he was commercial activity within the mean- only reading upon’] reasonable of [‘based FSIA, 1108-09, only id. at “ad- calls something more than a con- mere promotion ministrative application with, to, nection or relation commercial management place took in the United activity.” 358,113 S.Ct. 1471. States.” Id. at 1110. Specifically, we said Here, Sachs’ first claim for relief is that the basis for the Suns’ claims of negli- negligence. based on alleges She gent supervision and failure to warn claims OBB, as a hire,” “common carrier lay in sovereign’s alleged conduct in duty breached its of care when Sachs was Taiwan, beach, on the Taiwanese and had injured boarding the OBB train in Inns- no nexus with the admitted commercial bruck, duty Austria. This arose from the States; activity in the namely Unitеd sale of the ticket for passage on OBB promotion and sales of tickets for the tour. trains, the commercial activity identified only Id. Because “[t]he conduct relevant (Third) Sachs. See Restatement to the action was failure to take reasonable 40(b) (2012) Torts (“Special relationships in allowing care the students to swim and them,” all of which supervise failure America, STATES of Taiwan, UNITED we concluded place

took Plaintiff-Appellee, a nexus unable to show were the Suns action and the between v. States.4 activity within RAMOS, L. Defendant- Armando contrast, ac- Here, negligence Sachs’ Appellant. com- breached its alleges that OBB tion in the reasonable care duty of mon-carrier No. 11-3126. trains, causing physical her of its operation of Appeals, States Court United above, duty origi- this stated

harm. As Tenth Circuit. activity that Sachs in the сommercial nates sale of the train alleges, namely OBB’s Aug. Eurail, ticket, participation through ‍‌‌‌​​‌‌‌​‌​‌​‌​‌​‌‌​​‌‌​‌​​​​‌​‌​‌​‌​‌​​​​‌‌‌‌‌‌‍its I in the United States. occurred is a sufficient conclude that there and the com- Sachs’ action nexus between Barkanic, 822 activity. Accord

mercial (concluding that “there is a airplane crash nexus between

sufficient airline carried ticket] sale of the

and [the country”). sovereign] [the (1) Eurail I

Because believe by its sub- ticket sales

Group, through engaged in com- Experts, Rail Pass activity within fairly attributed to that this Eurail, carrying part-owner

OBB as (2) Austria, that there is

customers that commercial

a sufficient nexus between action because the tick-

activity and Sachs’ carrier gave rise to the common

et sale allegedly care breach-

duty of reasonable

ed, has I would hold that Sachs satisfy sufficient to

facts sovereign immunity

activity exception to respectfully dissent.

under the FSIA. Id. We then changed theory of lia- the tour in the United States. then their 4. The Suns arguing bility appeal, that under California the district "to remanded the case to court law, duty "Taiwan was under an affirmative to deter- review the Suns’ claim first order by disclosing care cast, to exercise reasonable whether, currently it is based on mine concerning prospective known information place activity that took misleading dangers on the tour and United States.” promoting participants,” while prospective

Case Details

Case Name: Carol Sachs v. Republic of Austria

Court Name: Court of Appeals for the Ninth Circuit

Date Published: Sep 26, 2012

Citation: 695 F.3d 1021

Docket Number: 11-15458

Court Abbreviation: 9th Cir.