California resident Carol Sachs fell between the tracks while attempting to board a train in Austria and both of her legs, crushed by the moving train, had to be amputated above the knee.
Sachs, who purchased her train pass through the website of a Massachusetts-based travel agent, seeks to sue in U.S. court the railway, which is wholly owned by the Austrian government. A district court said she can’t, the Court of Appeals for the Ninth Circuit reversed this decision and now the U.S. Supreme Court will hear the case this spring. (OBB Personenverkehr v. Carol P. Sachs)
The Foreign Sovereign Immunities Act (FSIA) grants foreign states immunity from being sued in the U.S. except when claims are based on a commercial activity conducted in the U.S. by the foreign state itself. The FSIA defines what entities are considered to be a “foreign state,” says Juan Basombrio, a partner with law firm Dorsey & Whitney LLP in Southern California and counsel for the railway, OB Personenverkehr AG. Purchase of a ticket from a third-party travel agent, for example, would not be commercial activity by the foreign state, he says.
“Thus, what’s unique about the case,” says Basombrio, who specializes in the FSIA and co-chairs Dorsey & Whitney’s International Group, “is the Supreme Court will clarify who is an agent of foreign states for the purpose of sovereign immunity.” He and his colleagues will argue that the travel agent is not an agent of the railway and therefore the railway still has immunity. The Supreme Court will also consider whether the claim is based upon the injury that occurred abroad or the purchase of the ticket in the U.S., he says.
According to Basombrio, the outcome of the case, which will also take into consideration the role of the Internet, will have widespread implications. “The decision could apply to any services provided by a foreign government instrumentality,” he says. It can affect travelers and also come into play if a high-net-worth individual invests in an asset or investment offered through a foreign government, he says.
If a U.S.-based enterprise does business or a joint venture with an agent of a foreign state and there is a dispute among the parties, the upcoming ruling, he says, could determine if the business owner must seek redress stateside or abroad. Examples he notes include computer services, construction and telecommunications, but, he says, “The number of industries is as wide as your imagination.”