The US Foreign Sovereign Immunities Act (“FSIA”) codifies the doctrine of sovereign immunity and generally prohibits lawsuits in US courts against non-US sovereigns. But the FSIA has an exception where, among other things, a claim is “based upon” the commercial activity of a sovereign in the US. In its December 1, 2015 decision in OBB Personenverkehr AG v. Sachs,2 the US Supreme Court unanimously rejected a broad interpretation of this exception, holding that a claim is only “based upon” a sovereign’s commercial activity where that activity forms the “gravamen” or “core” of the plaintiff’s claim.3 The effect of the Court’s decision is to require that litigation premised on the so-called “commercial exception” of the FSIA be directly traceable to conduct in and affecting the US. Especially in cases where an injury is suffered outside the US—including many likely to present the most politically-charged issues—the ruling should very substantially limit suits against non-US sovereigns, and is solidly within the present Court’s inclination not to provide access to the federal courts for disputes whose origins and effects relate principally to places outside this country. Additionally, there is some reason to think that the opinion’s somewhat holistic interpretation of the phrase “based upon” may be applied to limit the exercise of special personal jurisdiction over claims said to “arise from” a defendant’s contacts with the US.
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