In reversing the Ninth Circuit, the United States Supreme Court in the unanimous decision of OBB Personenverkehr AG v. Sachs, 136 S.Ct. 390 (12/1/15) clarified what is required to establish a claim against a foreign entity that would not be barred by sovereign immunity under the Foreign Sovereign Immunities Act ( 28 U.S.C. section 1605 (a)(2)) (“Act”). Under the Act, a foreign state is immune from the jurisdiction of the courts of the United States or individual States, unless the action is based upon commercial activity carried on in the United States by the foreign state.
In this case, plaintiff Sachs, a California resident, bought a Eurail pass for rail travel in Europe from a Massachusetts-based travel agency. Ms. Sachs was injured in a train station in Austria. The railway was treated as an agency of a foreign state. Plaintiff sued under theories of negligence and strict liability, but the gravamen of the suit was the conduct of the railway at the site of the injury.
The Northern District Court dismissed the action under the Act finding the commercial activity exception to the Act did not apply. The Ninth Circuit en banc reversed on the grounds that the ticket sale by a travel agency constituted commercial activity in the United States by a foreign state; and as the suit was based upon that activity, it was a necessary element of each of plaintiff’s causes of action.