Abstract:

Something is rotten in the state of foreign sovereign immunity, and it has been rotten for some time. Under the commercial activity exception of the Foreign Sovereign Immunities Act (FSIA), foreign states can be sued for their “commercial acts,” but the statute provides scant guidance on what falls into this category. Courts have stepped into the breach, defining “commercial acts” in contrast to “sovereign acts,” and slowly establishing a sense of what sort of conduct each category describes. This commercial–sovereign dichotomy, however, has proven difficult to apply, leading to strange outcomes such as the issuance of sovereign debt being considered commercial activity,1 while retaliation against a whistle-blowing employee is considered sovereign.2

Along the way, the application of the commercial–sovereign dichotomy has kept numerous human rights claims out of U.S. courts, and it has constructed a profoundly ugly vision of sovereignty. The category of sovereign acts has come to include a range of conduct from promotion of domestic businesses abroad3 and nationalization of private property4 to extrajudicial killing,5 forced labor,6 kidnapping,7 and torture.8 Given the central role that the concept of sovereignty continues to occupy in both international and domestic law—particularly various forms of deference that are considered owed to entities exercising sovereign authority—this construction of sovereignty should be alarming.

This paper argues that the current commercial–sovereign dichotomy in FSIA jurisprudence both goes beyond what is required by the statute and is undesirable for many reasons. Part I outlines the presumption and exceptions to immunity provided in the FSIA, as well as the construction of the commercial–sovereign dichotomy in this context. Next, Part II argues that this dichotomy is not required either by the text of the FSIA or by the concept of “commercial activity” itself. Part III then lays out three ways the dichotomy is undesirable: It forces courts to engage in artificial constructions of the underlying alleged conduct, which can lead to absurd conclusions; it generates potential conflicts with important interpretations of the act of state doctrine and foreign official immunity; and it constructs a notion of sovereignty as intertwined with the right to abuse. Finally, Part IV offers to suggestions for reform that address these concerns.


1. See Republic of Argentina v. Weltover, 504 U.S. 607 (1992).
2. See Saudi Arabia v. Nelson, 507 U.S. 349, 366 (1993) (White, J., concurring) (“[H]ad 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’—would consent to calling it ‘commercial.’”).
3. See Kato v. Ishihara, 360 F.3d 106, 112 (2d Cir. 2004).
4. See de Csepel v. Republic of Hungary, 714 F.3d 591, 600 (D.C. Cir. 2013).
5. See De Letelier v. Republic of Chile, 748 F.2d 790, 797–98 (2d Cir. 1984).
6. See Bao Ge v. Li Peng, 201 F. Supp. 2d 14, 24 (D.D.C. 2000).
7. See Cicippio v. Islamic Republic of Iran, 30 F.3d 164, 168–69 (D.C. Cir. 1994) (specifying that kidnapping by government officials would constitute sovereign activity).
8. See Saudi Arabia v. Nelson, 507 U.S. 349, 361 (1993).