OBB PERSONENVERKEHR AG v. SACHS
No. 13–1067
SUPREME COURT OF THE UNITED STATES
Argued October 5, 2015—Decided December 1, 2015
577 U.S. ____ (2015)
NOTE: Where it is feasible, a syllabus (headnote) will be released, as is being done in connection with this case, at the time the opinion is issued. The syllabus constitutes no part of the opinion of the Court but has been prepared by the Reporter of Decisions for the convenience of the reader. See United States v. Detroit Timber & Lumber Co., 200 U. S. 321, 337.
CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT
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 shields foreign states and their agencies and instrumentalities from suit in United States courts, unless a specified exception applies. Sachs countered that her suit fell within the Act’s commercial activity exception, which abrogates sovereign immunity for suits “based upon a commercial activity carried on in the United States by [a] foreign state,”
Held: Sachs’s suit falls outside the commercial activity exception and is therefore barred by sovereign immunity. Pp. 5–11.
(a) Sachs’s suit is not “based upon” the sale of the Eurail pass for purposes of
(1) Although the Act does not elaborate on the phrase “based upon,” Saudi Arabia v. Nelson, 507 U. S. 349, provides sufficient guidance to resolve this case. There, the Court held that the “based upon” inquiry requires a court to determine the “particular conduct on which the action is ‘based,’” id., at 356, and identified that conduct by looking to “the ‘gravamen of the complaint,’” id., at 357. Pp. 5–6.
(2) The Ninth Circuit used a flawed approach when it found that the “based upon” inquiry would be satisfied if the sale of the Eurail pass provided “an element” of each of Sachs’s claims. This Court’s approach in Nelson is flatly incompatible with such a one-element approach, which necessarily requires a court to identify all the elements of each claim before finding that the claim falls outside
(3) As opposed to adopting a one-element test, the Nelson Court zeroed in on the core of the plaintiffs’ suit—the conduct that actually injured the plaintiffs—to identify the conduct that the suit was “based upon.” See id., at 358. All of Sachs’s claims turn on the same tragic episode in Austria, allegedly caused by wrongful conduct and dangerous conditions in Austria, which led to injuries suffered in Austria. However Sachs frames her suit, the incident in Innsbruck, Austria, remains at its foundation. Any other approach would allow plaintiffs to evade the Act’s restrictions through artful pleading. See id., at 363. Pp. 7–9.
(b) Sachs now contends that her claims are “based upon” OBB’s entire railway enterprise. Because that argument was never presented to any lower court, it is forfeited. See Taylor v. Freeland & Kronz, 503 U. S. 638, 645–646. Pp. 9–10.
737 F. 3d 584, reversed.
ROBERTS, C. J., delivered the opinion for a unanimous Court.
OBB PERSONENVERKEHR AG, PETITIONER v. CAROL P. SACHS
No. 13–1067
SUPREME COURT OF THE UNITED STATES
December 1, 2015
577 U. S. ____ (2015)
ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT
CHIEF JUSTICE ROBERTS delivered the opinion of the Court.
The Foreign Sovereign Immunities Act shields foreign states and their agencies from suit in United States courts unless the suit falls within one of the Act’s specifically enumerated exceptions. This case concerns the scope of the commercial activity exception, which withdraws sovereign immunity in any case “in which the action is based upon a commercial activity carried on in the United States by [a] foreign state.”
Respondent Carol Sachs is a resident of California who purchased in the United States a Eurail pass for rail travel in Europe. She suffered traumatic personal injuries when she fell onto the tracks at the Innsbruck, Austria, train station while attempting to board a train operated by the Austrian state-owned railway. She sued the railway in Federal District Court, arguing that her suit was not barred by sovereign immunity because it is “based upon” the railway’s sale of the pass to her in the United States. We disagree and conclude that her action is instead “based upon” the railway’s conduct in Inns-
I
A
Petitioner OBB Personenverkehr AG (OBB) operates a railway that carries nearly 235 million passengers each year on routes within Austria and to and from points beyond Austria’s frontiers. OBB is wholly owned by OBB Holding Group, a joint-stock company created by the Republic of Austria. OBB Holding Group in turn is wholly owned by the Austrian Federal Ministry of Transport, Innovation, and Technology. Sachs v. Republic of Austria, 737 F. 3d 584, 587 (CA9 2013).
OBB—along with 29 other railways throughout Europe—is a member of the Eurail Group, an association responsible for the marketing and management of the Eurail pass program. Brief for International Rail Transport Committee as Amicus Curiae 12; 737 F. 3d, at 587. Eurail passes allow their holders unlimited passage for a set period of time on participating Eurail Group railways. They are available only to non-Europeans, who may purchase them both directly from the Eurail Group and indirectly through a worldwide network of travel agents. Brief for International Rail Transport Committee as Amicus Curiae 12–13, and n. 3; Brief for Respondent 4–5.
Carol Sachs is a resident of Berkeley, California. In March 2007, she purchased a Eurail pass over the Internet from The Rail Pass Experts, a Massachusetts-based travel agent. The following month, Sachs arrived at the Innsbruck train station, planning to use her Eurail pass to ride an OBB train to Prague. As she attempted to board the train, Sachs fell from the platform onto the tracks. OBB’s moving train crushed her legs, both of which had to
Sachs sued OBB in the United States District Court for the Northern District of California, asserting five causes of action: (1) negligence; (2) strict liability for design defects in the train and platform; (3) strict liability for failure to warn of those design defects; (4) breach of an implied warranty of merchantability for providing a train and platform unsafe for their intended uses; and (5) breach of an implied warranty of fitness for providing a train and platform unfit for their intended uses. App. 14–18. OBB claimed sovereign immunity and moved to dismiss the suit for lack of subject matter jurisdiction. 737 F. 3d, at 588.
B
The Foreign Sovereign Immunities Act “provides the sole basis for obtaining jurisdiction over a foreign state in the courts of this country.” Argentine Republic v. Amerada Hess Shipping Corp., 488 U. S. 428, 443 (1989). The Act defines “foreign state” to include a state “agency or instrumentality,”
The District Court concluded that Sachs’s suit did not fall within
The en banc majority first observed that, “based on the agreement of the parties,” “the only relevant commercial activity within the United States was [Sachs’s] March 2007 purchase of a Eurail pass from the Rail Pass Experts,” a Massachusetts company. Id., at 591, n. 4 (internal quotation marks omitted). The court concluded that The Rail Pass Experts had acted as OBB’s agent and, using common law principles of agency, attributed that Eurail pass sale to OBB. Id., at 591–598.
The court next asked whether Sachs’s claims were “based upon” the sale of the Eurail pass within the meaning of
We granted certiorari. 574 U. S. ___ (2015).
II
OBB contends that the sale of the Eurail pass is not attributable to the railway, reasoning that the Foreign Sovereign Immunities Act does not allow attribution through principles found in the common law of agency. OBB also argues that even if such attribution were allowed under the Act, Sachs’s suit is not “based upon” the sale of the Eurail pass for purposes of
A
The Act itself does not elaborate on the phrase “based upon.” Our decision in Saudi Arabia v. Nelson, 507 U. S. 349, however, provides sufficient guidance to resolve this case. In Nelson, a husband and wife brought suit against
The Act’s “based upon” inquiry, we reasoned, first requires a court to “identify[ ] the particular conduct on which the [plaintiff’s] action is ‘based.’” Id., at 356. Considering dictionary definitions and lower court decisions, we explained that a court should identify that “particular conduct” by looking to the “basis” or “foundation” for a claim, id., at 357 (citing dictionary definitions), “those elements . . . that, if proven, would entitle a plaintiff to relief,” ibid., and “the ‘gravamen of the complaint,’” ibid. (quoting Callejo v. Bancomer, S. A., 764 F. 2d 1101, 1109 (CA5 1985)). Under that analysis, we found that the commercial activities, while they “led to the conduct that eventually injured the Nelsons,” were not the particular conduct upon which their suit was based. The suit was instead based upon the Saudi sovereign acts that actually injured them. 507 U. S., at 358. The Nelsons’ suit therefore did not fit within
B
The Ninth Circuit held that Sachs’s claims were “based
The Ninth Circuit apparently derived its one-element test from an overreading of one part of one sentence in Nelson, in which we observed that “the phrase [‘based upon’] is read most naturally to mean those elements of a claim that, if proven, would entitle a plaintiff to relief under his theory of the case.” 507 U. S., at 357. We do not see how that mention of elements—plural—could be considered an endorsement of a one-element test, nor how the particular element the Ninth Circuit singled out for each of Sachs’s claims could be construed to entitle her to relief.
Be that as it may, our analysis in Nelson is flatly incompatible with a one-element approach. A one-element test necessarily requires a court to identify all the elements of each claim in a complaint before that court may reject those claims for falling outside
Nelson instead teaches that an action is “based upon” the “particular conduct” that constitutes the “gravamen” of the suit. Rather than individually analyzing each of the Nelsons’ causes of action, we zeroed in on the core of their suit: the Saudi sovereign acts that actually injured them. As the Court explained:
“Even taking each of the Nelsons’ allegations about Scott Nelson’s recruitment and employment as true, those facts alone entitle the Nelsons to nothing under their theory of the case. The Nelsons have . . . alleged . . . personal injuries caused by [the defendants’] intentional wrongs and by [the defendants’] negligent failure to warn Scott Nelson that they might commit those wrongs. Those torts, and not the arguably commercial activities that preceded their commission, form the basis for the Nelsons’ suit.” 507 U. S., at 358.
Under this analysis, the conduct constituting the gravamen of Sachs’s suit plainly occurred abroad. All of her claims turn on the same tragic episode in Austria, allegedly caused by wrongful conduct and dangerous conditions in Austria, which led to injuries suffered in Austria.
Sachs maintains that some of those claims are not limited to negligent conduct or unsafe conditions in Austria, but rather involve at least some wrongful action in the United States. Her strict liability claim for failure to warn, for example, alleges that OBB should have alerted her to the dangerous conditions at the Innsbruck train station when OBB sold the Eurail pass to her in the United States. Under any theory of the case that Sachs presents, however, there is nothing wrongful about the sale of the Eurail pass standing alone. Without the existence of the unsafe boarding conditions in Innsbruck, there would have been nothing to warn Sachs about when she bought the Eurail pass. However Sachs frames her suit, the incident in Innsbruck remains at its foundation.
As we explained in Nelson, any other approach would allow plaintiffs to evade the Act’s restrictions through artful pleading. For example, any plaintiff “could recast virtually any claim of intentional tort . . . as a claim of failure to warn, simply by charging the defendant with an
A century ago, in a letter to then-Professor Frankfurter, Justice Holmes wrote that the “essentials” of a personal injury narrative will be found at the “point of contact”—“the place where the boy got his fingers pinched.” Letter (Dec. 19, 1915), in Holmes and Frankfurter: Their Correspondence, 1912–1934, p. 40 (R. Mennel & C. Compston eds. 1996). At least in this case, that insight holds true. Regardless of whether Sachs seeks relief under claims for negligence, strict liability for failure to warn, or breach of implied warranty, the “essentials” of her suit for purposes of
III
Sachs raises a new argument in this Court in an attempt to fit her claims within
“[C]ommercial activity carried on in the United States by the foreign state,” as used in
That argument was never presented to any lower court and is therefore forfeited. Sachs argued in the courts below only that her claims were “based upon” the sale of the Eurail pass, and the lower courts resolved the case on that understanding. See, e.g., 737 F. 3d, at 591, n. 4 (“The district court concluded, based on the agreement of the parties, that ‘the only relevant commercial activity within the United States was plaintiff’s March 2007 purchase of a Eurail Pass from the Rail Pass Experts.’ We consider only the relevant conduct as defined by the district court.”).3 Indeed, when we granted certiorari, the relevant question presented for our review was whether Sachs’s claims were “based upon” the “sale of the ticket in the United States.” Pet. for Cert. i; accord, Brief for Respondent i. We have answered that question in the negative. Absent unusual circumstances—none of which is present here—we will not entertain arguments not made below. Taylor v. Freeland & Kronz, 503 U. S. 638, 645–646 (1992).
We therefore conclude that Sachs has failed to demon-
The judgment of the United States Court of Appeals for the Ninth Circuit is reversed.
It is so ordered.