SAUDI ARABIA ET AL. v. NELSON ET UX.
No. 91-522
Supreme Court of the United States
Argued November 30, 1992-Decided March 23, 1993
507 U.S. 349
Everett C. Johnson, Jr., argued the cause for petitioners. With him on the briefs were Mark E. Newell and Marc Cooper.
Jeffrey P. Minear argued the cause for the United States as amicus curiae urging reversal. With him on the brief were Solicitor General Starr, Assistant Attorney General Gerson, Deputy Solicitor General Roberts, Douglas Letter, and Edwin D. Williamson.
JUSTICE SOUTER delivered the opinion of the Court.
The Foreign Sovereign Immunities Act of 1976 entitles foreign states to immunity from the jurisdiction of courts in the United States,
I
Because this case comes to us on a motion to dismiss the complaint, we assume that we have truthful factual allegations before us, see United States v. Gaubert, 499 U. S. 315, 327 (1991), though many of those allegations are subject to dispute, see Brief for Petitioners 3, n. 3; see also n. 1, infra. Petitioner Kingdom of Saudi Arabia owns and operates petitioner King Faisal Specialist Hospital in Riyadh, as well as petitioner Royspec Purchasing Services, the hospital‘s corporate purchasing agent in the United States. App. 91. The Hospital Corporation of America, Ltd. (HCA), an independent corporation existing under the laws of the Cayman Islands, recruits Americans for employment at the hospital
In its recruitment effort, HCA placed an advertisement in a trade periodical seeking applications for a position as a monitoring systems engineer at the hospital. The advertisement drew the attention of respondent Scott Nelson in September 1983, while Nelson was in the United States. After interviewing for the position in Saudi Arabia, Nelson returned to the United States, where he signed an employment contract with the hospital, id., at 4, satisfied personnel processing requirements, and attended an orientation session that HCA conducted for hospital employees. In the course of that program, HCA identified Royspec as the point of contact in the United States for family members who might wish to reach Nelson in an emergency. Id., at 33.
In December 1983, Nelson went to Saudi Arabia and began work at the hospital, monitoring all “facilities, equipment, utilities and maintenance systems to insure the safety of patients, hospital staff, and others.” Id., at 4. He did his job without significant incident until March 1984, when he discovered safety defects in the hospital‘s oxygen and nitrous oxide lines that posed fire hazards and otherwise endangered patients’ lives. Id., at 57-58. Over a period of several months, Nelson repeatedly advised hospital officials of the safety defects and reported the defects to a Saudi Government commission as well. Id., at 4-5. Hospital officials instructed Nelson to ignore the problems. Id., at 58.
The hospital‘s response to Nelson‘s reports changed, however, on September 27, 1984, when certain hospital employees summoned him to the hospital‘s security office where agents of the Saudi Government arrested him.1 The agents
At the prison, Nelson was confined in an overcrowded cell area infested with rats, where he had to fight other prisoners for food and from which he was taken only once a week for fresh air and exercise. Ibid. Although police interrogators repeatedly questioned him in Arabic, Nelson did not learn the nature of the charges, if any, against him. Id., at 5. For several days, the Saudi Government failed to advise Nelson‘s family of his whereabouts, though a Saudi official eventually told Nelson‘s wife, respondent Vivian Nelson, that he could arrange for her husband‘s release if she provided sexual favors. Ibid.
Although officials from the United States Embassy visited Nelson twice during his detention, they concluded that his allegations of Saudi mistreatment were “not credible” and made no protest to Saudi authorities. Id., at 64. It was only at the personal request of a United States Senator that the Saudi Government released Nelson, 39 days after his arrest, on November 5, 1984. Id., at 60. Seven days later, after failing to convince him to return to work at the hospital, the Saudi Government allowed Nelson to leave the country. Id., at 60-61.
In 1988, Nelson and his wife filed this action against petitioners in the United States District Court for the Southern District of Florida seeking damages for personal injury. The Nelsons’ complaint sets out 16 causes of action, which fall into three categories. Counts II through VII and counts X, XI, XIV, and XV allege that petitioners committed vari-
The District Court dismissed for lack of subject-matter jurisdiction under the Foreign Sovereign Immunities Act of 1976,
The Court of Appeals reversed. 923 F. 2d 1528 (CA11 1991). It concluded that Nelson‘s recruitment and hiring were commercial activities of Saudi Arabia and the hospital, carried on in the United States for purposes of the Act, id., at 1533, and that the Nelsons’ action was “based upon” these activities within the meaning of the statute, id., at 1533-1536. There was, the court reasoned, a sufficient nexus between those commercial activities and the wrongful acts that had allegedly injured the Nelsons: “the detention and torture of Nelson are so intertwined with his employment at the Hospital,” the court explained, “that they are ‘based upon’ his recruitment and hiring” in the United States. Id., at 1535. The court also found jurisdiction to hear the claims against Royspec. Id., at 1536.2 After the Court of Appeals denied petitioners’ suggestion for rehearing en banc, App. 133, we granted certiorari, 504 U. S. 972 (1992). We now reverse.
II
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). Under the Act, a foreign state is presumptively immune from the jurisdiction of United States courts; unless a specified exception applies, a federal court lacks subject-matter jurisdiction over a claim against a foreign state. Verlinden B. V. v. Central Bank of Nigeria, 461 U.S. 480, 488-489 (1983); see
There is no dispute here that Saudi Arabia, the hospital, and Royspec all qualify as “foreign state[s]” within the meaning of the Act. Brief for Respondents 3; see
We begin our analysis by identifying the particular conduct on which the Nelsons’ action is “based” for purposes of the Act. See Texas Trading & Milling Corp. v. Federal
What the natural meaning of the phrase “based upon” suggests, the context confirms. Earlier, see n. 3, supra, we noted that
In this case, the Nelsons have alleged that petitioners recruited Scott Nelson for work at the hospital, signed an employment contract with him, and subsequently employed him. While these activities led to the conduct that eventually injured the Nelsons, they are not the basis for the Nelsons’ suit. 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 not, after all, alleged breach of contract, see supra, at 354, but personal injuries caused by petitioners’ intentional wrongs and by petitioners’ 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.
Petitioners’ tortious conduct itself fails to qualify as “commercial activity” within the meaning of the Act, although the Act is too “obtuse” to be of much help in reaching that conclusion. Callejo, supra, at 1107 (citation omitted). We have seen already that the Act defines “commercial activity” as “either a regular course of commercial conduct or a partic-
We took up the task just last Term in Weltover, supra, which involved Argentina‘s unilateral refinancing of bonds it had issued under a plan to stabilize its currency. Bondholders sued Argentina in federal court, asserting jurisdiction under the third clause of
Under the restrictive, as opposed to the “absolute,” theory of foreign sovereign immunity, a state is immune from the
We emphasized in Weltover that whether a state acts “in the manner of” a private party is a question of behavior, not motivation:
“[B]ecause the Act provides that the commercial character of an act is to be determined by reference to its ‘nature’ rather than its ‘purpose,’ the question is not whether the foreign government is acting with a profit motive or instead with the aim of fulfilling uniquely sovereign objectives. Rather, the issue is whether the particular actions that the foreign state performs (whatever
the motive behind them) are the type of actions by which a private party engages in ‘trade and traffic or commerce.‘” Weltover, supra, at 614 (citations omitted) (emphasis in original).
We did not ignore the difficulty of distinguishing “‘purpose’ (i. e., the reason why the foreign state engages in the activity) from ‘nature’ (i. e., the outward form of the conduct that the foreign state performs or agrees to perform),” but recognized that the Act “unmistakably commands” us to observe the distinction. 504 U. S., at 617 (emphasis in original). Because Argentina had merely dealt in the bond market in the manner of a private player, we held, its refinancing of the bonds qualified as a commercial activity for purposes of the Act despite the apparent governmental motivation. Ibid.
Unlike Argentina‘s activities that we considered in Weltover, the intentional conduct alleged here (the Saudi Government‘s wrongful arrest, imprisonment, and torture of Nelson) could not qualify as commercial under the restrictive theory. The conduct boils down to abuse of the power of its police by the Saudi Government, and however monstrous such abuse undoubtedly may be, a foreign state‘s exercise of the power of its police has long been understood for purposes of the restrictive theory as peculiarly sovereign in nature. See Arango v. Guzman Travel Advisors Corp., 621 F. 2d 1371, 1379 (CA5 1980); Victory Transport Inc. v. Comisaria General de Abastecimientos y Transportes, 336 F. 2d 354, 360 (CA2 1964) (restrictive theory does extend immunity to a foreign state‘s “internal administrative acts“), cert. denied, 381 U. S. 934 (1965); Herbage v. Meese, 747 F. Supp. 60, 67 (DC 1990), affirmance order, 292 U. S. App. D. C. 84, 946 F. 2d 1564 (1991); K. Randall, Federal Courts and the International Human Rights Paradigm 93 (1990) (the Act‘s commercial-activity exception is irrelevant to cases alleging
The Nelsons and their amici urge us to give significance to their assertion that the Saudi Government subjected Nelson to the abuse alleged as retaliation for his persistence in reporting hospital safety violations, and argue that the character of the mistreatment was consequently commercial. One amicus, indeed, goes so far as to suggest that the Saudi Government “often uses detention and torture to resolve commercial disputes.” Brief for Human Rights Watch as
In addition to the intentionally tortious conduct, the Nelsons claim a separate basis for recovery in petitioners’ failure to warn Scott Nelson of the hidden dangers associated with his employment. The Nelsons allege that, at the time petitioners recruited Scott Nelson and thereafter, they failed to warn him of the possibility of severe retaliatory action if he attempted to disclose any safety hazards he might discover on the job. See supra, at 354. In other words, petitioners bore a duty to warn of their own propensity for tortious conduct. But this is merely a semantic ploy. For aught we can see, a plaintiff could recast virtually any claim of intentional tort committed by sovereign act as a claim of failure to warn, simply by charging the defendant with an obligation to announce its own tortious propensity before indulging it. To give jurisdictional significance to this feint of language would effectively thwart the Act‘s manifest purpose to codify the restrictive theory of foreign sovereign immunity. Cf. United States v. Shearer, 473 U. S. 52, 54-55 (1985) (opinion of Burger, C. J.).
III
The Nelsons’ action is not “based upon a commercial activity” within the meaning of the first clause of
It is so ordered.
According to respondents’ complaint, Scott Nelson‘s employer retaliated against him for reporting safety problems by “summon[ing him] . . . to the hospital‘s security office from which he was transported to a jail cell.” App. 5. Once there, he allegedly was “shackled, tortured and beaten by persons acting at the direction, instigation, provocation, instruction or request of” petitioners-Saudi Arabia, King Faisal Specialist Hospital, and Royspec. Id., at 5, 14, 18. The majority concludes that petitioners enjoy sovereign immunity because respondents’ action is not “based upon a commercial activity.” I disagree. I nonetheless concur in the judgment because in my view the commercial conduct upon which respondents base their complaint was not “carried on in the United States.”
I
A
As the majority notes, the first step in the analysis is to identify the conduct on which the action is based. Respondents have pointed to two distinct possibilities. The first, seemingly pressed at trial and on appeal, consists of the recruiting and hiring activity in the United States. See Brief for Appellant in No. 89-5981 (CA11), pp. 12-15. Although this conduct would undoubtedly qualify as “commercial,” I agree with the majority that it is “not the basis for the Nelsons’ suit,” ante, at 358, for it is unrelated to the elements of respondents’ complaint.
In a partial change of course, respondents suggest to this Court both in their brief and at oral argument that we focus on the hospital‘s commercial activity in Saudi Arabia, its employment practices and disciplinary procedures. Under this view, the Court would then work its way back to the recruiting and hiring activity in order to establish that the commercial conduct in fact had “substantial contact” with the United
B
To run and operate a hospital, even a public hospital, is to engage in a commercial enterprise. The majority never concedes this point, but it does not deny it either, and to my mind the matter is self-evident. By the same token, warning an employee when he blows the whistle and taking retaliatory action, such as harassment, involuntary transfer, discharge, or other tortious behavior, although not prototypical commercial acts, are certainly well within the bounds of commercial activity. The House and Senate Reports accompanying the legislation virtually compel this conclusion, explaining as they do that “a foreign government‘s . . . employment or engagement of laborers, clerical staff or marketing agents . . . would be among those included within” the definition of commercial activity. H. R. Rep. No. 94-1487, p. 16 (1976) (House Report); S. Rep. No. 94-1310, p. 16 (1976) (Senate Report). Nelson alleges that petitioners harmed him in the course of engaging in their commercial enterprise, as a direct result of their commercial acts. His claim, in other words, is “based upon commercial activity.”
Indeed, I am somewhat at a loss as to what exactly the majority believes petitioners have done that a private employer could not. As countless cases attest, retaliation for
Therefore, had the hospital retaliated against Nelson by hiring thugs to do the job, I assume the majority-no longer able to describe this conduct as “a foreign state‘s exercise of the power of its police,” ante, at 361-would consent to calling it “commercial.” For, in such circumstances, the state-run hospital would be operating as any private participant in the marketplace and respondents’ action would be based on the operation by Saudi Arabia‘s agents of a commercial business.2
that suggests strongly that the hospital‘s enlistment of, and cooperation with, the police should not entitle it to immunity. The incident involved allegations that an agency of the Jamaican Government conspired to have Jamaican nationals working in the United States “falsely arrested, imprisoned and blacklisted, and to deprive them of wages and other employee rights.” Sovereign Immunity Decisions of the Department of State, May 1952 to January 1977 (M. Sandler, D. Vagts, & B. Ristau eds.), in 1977 Digest of United States Practice in International Law 1062. Significantly, the State Department did not take refuge behind the words “arres[t]” and “impriso[n]” and decide that the actions were sovereign in nature. Rather, it declined to recognize immunity, focusing on the fact that private parties acting in an employment context could do exactly what the Jamaican agency was alleged to have done: “[T]he activities under consideration are of a private nature . . . . The Department of State is impressed by the fact that the activities of the British West Indies Central Labour Organization . . . are very much akin to those that might be conducted by a labor union or by a private employment agency-arranging and servicing an agreement between private employers and employees. Although it may be argued that some of the acts performed by the British West Indies Central Labour Organization in this case are consular in nature, the Department believes that they arise from the involvement of the British West Indies Central Labour Organization in the private employer-employee contractual relationship rather than from a consular responsibility, and cannot be separated therefrom.” Id., at 1063.
“It is, we think, a sound principle, that when a government becomes a partner in any trading company, it devests itself, so far as concerns the transactions of that company, of its sovereign character, and takes that of a private citizen. Instead of communicating to the company its privileges and its prerogatives, it descends to a level with those with whom it associates itself, and takes the character which belongs to its associates, and to the business which is to be transacted.” Bank of United States v. Planters’ Bank of Georgia, 9 Wheat. 904, 907 (1824).
See also Alfred Dunhill of London, Inc. v. Republic of Cuba, 425 U. S. 682, 695-696 (1976) (plurality opinion).
C
Contrary to the majority‘s suggestion, ante, at 363, this conclusion does not involve inquiring into the purpose of the conduct. Matters would be different, I suppose, if Nelson had been recruited to work in the Saudi police force and, having reported safety violations, suffered retributive punishment, for there the Saudi authorities would be engaged in distinctly sovereign activities. Cf. House Report, at 16 (“Also public or governmental and not commercial in nature, would be the employment of diplomatic, civil service, or military personnel“); Senate Report, at 16. The same would be true if Nelson was a mere tourist in Saudi Arabia and had been summarily expelled by order of immigration officials. See Arango v. Guzman Travel Advisors Corp., 621 F. 2d 1371 (CA5 1980). In this instance, however, the state-owned hospital was engaged in ordinary commercial business and “[i]n their commercial capacities, foreign governments do not exercise powers peculiar to sovereigns. Instead, they exercise only those powers that can also be exercised by private
II
Nevertheless, I reach the same conclusion as the majority because petitioners’ commercial activity was not “carried on in the United States.” The Act defines such conduct as “commercial activity . . . having substantial contact with the United States.”
JUSTICE KENNEDY, with whom JUSTICE BLACKMUN and JUSTICE STEVENS join as to Parts I-B and II, concurring in part and dissenting in part.
I join all of the Court‘s opinion except the last paragraph of Part II, where, with almost no explanation, the Court rules that, like the intentional tort claim, the claims based on negligent failure to warn are outside the subject-matter jurisdiction of the federal courts. These claims stand on a much different footing from the intentional tort claims for
I
A
I agree with the Court‘s holding that the Nelsons’ claims of intentional wrongdoing by the hospital and the Kingdom of Saudi Arabia are based on sovereign, not commercial, activity, and so fall outside the commercial activity exception to the grant of foreign sovereign immunity contained in
B
By the same token, however, the Nelsons’ claims alleging that the hospital, the Kingdom, and Royspec were negligent in failing during their recruitment of Nelson to warn him of foreseeable dangers are based upon commercial activity having substantial contact with the United States. As such, they are within the commercial activity exception and the jurisdiction of the federal courts. Unlike the intentional tort counts of the complaint, the failure to warn counts do not complain of a police beating in Saudi Arabia; rather, they complain of a negligent omission made during the recruiting of a hospital employee in the United States. To obtain relief, the Nelsons would be obliged to prove that the hospital‘s recruiting agent did not tell Nelson about the foreseeable hazards of his prospective employment in Saudi Arabia. Under the Court‘s test, this omission is what the negligence counts are “based upon.” See ante, at 356.
The recruiting activity alleged in the failure to warn counts of the complaint also satisfies the final requirement for invoking the commercial activity exception: that the claims be based upon commercial activity “having substantial contact with the United States.”
II
Having met the jurisdictional prerequisites of the FSIA, the Nelsons’ failure to warn claims should survive petitioners’ motion under Federal Rule of Civil Procedure 12(b)(1) to dismiss for want of subject-matter jurisdiction. Yet instead of remanding these claims to the District Court for further proceedings, the majority dismisses them in a single short paragraph. This is peculiar, since the Court suggests no reason to question the conclusion that the failure to warn claims are based on commercial activity having substantial contact with the United States; indeed, the Court does not purport to analyze these claims in light of the statutory requirements for jurisdiction.
The Court‘s summary treatment may stem from doubts about the underlying validity of the negligence cause of action. The Court dismisses the claims because it fears that if it did not, “a plaintiff could recast virtually any claim of intentional tort committed by a sovereign act as a claim of failure to warn, simply by charging the defendant with an obligation to announce its own tortious propensity before indulging it.” Ante, at 363. In the majority‘s view, “[t]o give jurisdictional significance to this feint of language would effectively thwart the Act‘s manifest purpose to codify the restrictive theory of foreign sovereign immunity.” Ibid. These doubts, however, are not relevant to the analytical task at hand.
The majority‘s citation of United States v. Shearer, 473 U. S. 52, 54-55 (1985) (opinion of Burger, C. J.), see ante, at 363, provides no authority for dismissing the failure to warn claims. Shearer refused to permit a plaintiff to recast in negligence terms what was essentially an intentional tort claim, but that case was decided under the doctrine of Feres v. United States, 340 U. S. 135 (1950). The Feres doctrine is a creature of federal common law that allows the Court much greater latitude to make rules of pleading than we have in the current case. Here, our only task is to interpret the explicit terms of the FSIA. The Court‘s conclusion in Shearer was also based upon the fact that the intentional tort exception to the Federal Tort Claims Act at issue there,
As a matter of substantive tort law, it is not a novel proposition or a play on words to describe with precision the conduct upon which various causes of action are based or to recognize that a single injury can arise from multiple causes, each of which constitutes an actionable wrong. See Restatement (Second) of Torts §§ 447-449 (1965); Sheridan, supra, at 405 (KENNEDY, J., concurring in judgment); Wilson v. Garcia, 471 U. S. 261, 272 (1985). In Sheridan, for example, this Court permitted an action for negligent supervision to go forward under the FTCA when a suit based upon the intentional tort that was the immediate cause of injury was barred under the statute. See 487 U. S., at 400. As the Court observed, “it is both settled and undisputed that in at least some situations the fact that an injury was directly caused by an assault or battery will not preclude liability against the Government for negligently allowing the assault to occur.” Id., at 398.
We need not determine, however, that on remand the Nelsons will succeed on their failure to warn claims. Quite apart from potential problems of state tort law that might bar recovery, the Nelsons appear to face an obstacle based upon the former adjudication of their related lawsuit against Saudi Arabia‘s recruiting agent, HCA. The District Court dismissed that suit, which raised an identical failure to warn claim, not only as time barred, but also on the merits. See Nelson v. Hospital Corp. of America, No. 88-0484-CIV-Nesbitt (SD Fla., Nov. 1, 1990). That decision was affirmed on appeal, judgment order reported at 946 F. 2d 1546 (CA11 1991), and may be entitled to preclusive effect with respect to the Nelsons’ similar claims against the sovereign defend-
But the question of claim preclusion, like the substantive validity under state law of the Nelsons’ negligence cause of action, has not yet been litigated and is outside the proper sphere of our review. “[I]t is not our practice to reexamine a question of state law of [this] kind or, without good reason, to pass upon it in the first instance.” Sheridan, supra, at 401. That a remand to the District Court may be of no avail to the Nelsons is irrelevant to our task here; if the jurisdictional requirements of the FSIA are met, the case must be remanded to the trial court for further proceedings. In my view, the FSIA conferred subject-matter jurisdiction on the District Court to entertain the failure to warn claims, and with all respect, I dissent from the Court‘s refusal to remand them.
JUSTICE BLACKMUN, concurring in the judgment in part and dissenting in part.
I join JUSTICE WHITE‘s opinion because it finds that respondents’ intentional tort claims are “based upon a commercial activity” and that the commercial activity at issue in those claims was not “carried on in the United States.” I
JUSTICE STEVENS, dissenting.
Under the Foreign Sovereign Immunities Act of 1976 (FSIA), a foreign state is subject to the jurisdiction of American courts if two conditions are met: The action must be “based upon a commercial activity” and that activity must have a “substantial contact with the United States.”1 These two conditions should be separately analyzed because they serve two different purposes. The former excludes commercial activity from the scope of the foreign sovereign‘s immunity from suit; the second identifies the contacts with the United States that support the assertion of jurisdiction over the defendant.2
In this case, as JUSTICE WHITE has demonstrated, petitioner Kingdom of Saudi Arabia‘s operation of the hospital and its employment practices and disciplinary procedures are “commercial activities” within the meaning of the statute, and respondent Scott Nelson‘s claim that he was punished for acts performed in the course of his employment was unquestionably “based upon” those activities. Thus, the first statutory condition is satisfied; petitioner is not entitled to immunity from the claims asserted by respondent.
Unlike JUSTICE WHITE, however, I am also convinced that petitioner‘s commercial activities—whether defined as the regular course of conduct of operating a hospital or, more specifically, as the commercial transaction of engaging respondent “as an employee with specific responsibilities in that enterprise,” Brief for Respondents 25—have sufficient contact with the United States to justify the exercise of federal jurisdiction. Petitioner Royspec maintains an office in Maryland and purchases hospital supplies and equipment in this country. For nearly two decades the hospital‘s American agent has maintained an office in the United States and regularly engaged in the recruitment of personnel in this country. Respondent himself was recruited in the United States and entered into his employment contract with the hospital in the United States. Before traveling to Saudi Arabia to assume his position at the hospital, respondent attended an orientation program in Tennessee. The position for which respondent was recruited and ultimately hired was that of a monitoring systems manager, a troubleshooter, and, taking respondent‘s allegations as true, it was precisely respondent‘s performance of those responsibilities that led to the hospital‘s retaliatory actions against him.
Notes
Section 4(a) of the FSIA provides:
“(a) A foreign state shall not be immune from the jurisdiction of courts of the United States or of the States in any case—
“(2) in which the action is based upon a commercial activity carried on in the United States by the foreign state.”
The key terms of this provision are defined in § 1603. Section 1603(e) defines “commercial activity carried on in the United States by a foreign state” as “commercial activity carried on by such state and having substantial contact with the United States.” Section 1603(d), in turn, defines “commercial activity” as “either a regular course of commercial conduct or a particular commercial transaction or act.” Thus, interpolating the definitions from § 1603 into § 1605(a)(2) produces this equivalence:
“A foreign state shall not be immune from the jurisdiction of courts of the United States or of the States in any case in which the action is based upon a regular course of commercial conduct or a particular commercial transaction carried on by such state and having substantial contact with the United States.”