Foreign Sovereign Immunity How to interpret the FSIA

Case: Texas Trading & Milling Corp. v. Federal Republic of Nigeria (1982) 647
F.2d 300

Facts: Nigeria needed cement to build structures and overbought (they only
expected 20% of the suppliers to deliver) from several U.S. suppliers. When the
docks couldn't handle all the cargo (too small), Nigeria was no longer able to
accept delivery of the cement and repudiated the K. Suppliers brought the case in
U.S., and Nigeria is claiming sovereign immunity.

Nigeria's argument - it's a govt action b/c they were buying for the govt, not a
commercial transaction. Goals were public policy oriented.

Reasoning:
○ Court says we must apply the FSIA ( The Foreign Sovereign Immunities Act
of 1976) here.
§ §1330(a) creates original jurisdiction in the district courts for a
civil suit (nonjury) btwn a citizen and a foreign state. This section also refers
to §§1605-1607, in which 1605 says no immunity is the foreign act is a commercial
activity (which is also defined in §1603(d)). Defines commercial activity in
terms of course of transaction, not purpose.
§ So the real issue the court is dealing with here is if the behavior
is "commercial." The act doesn’t give any guidance on what is "commercial."
Congress deliberately left the meaning open and put faith in the courts to work
out on a case by case basis.
□ First source court looks at to figure this out is legislative
history
® Sources give this info: if it’s a purchase or sale of
goods; or, if its an activity in which a private person could engage in, then its
commercial
□ 2nd source: the U.S. case law which existed upon the passage of
FSIA
® Uses restrictive theory - public acts immune, private not
immune. Commercial acts not immune.
□ 3rd source: current standards of int'l law concerning sovereign
immunity int'l & comparative law
® Court says that int'l law follows the restrictive theory
of sovereign immunity
§ Court concludes: Under each of these standards (sources), Nigeria's
activity qualified as "commercial activity."
□ Nigeria's actions were in the nature of a private K for the
purchase of goods. Its purpose is irrelevant.
□ Also, other nations have uniformly held Nigeria's cement
purchases as a commercial activity, and have denied the defense of immunity.
® Court cites cases from UK & Germany, and an ICC arbitral
award.

Notes and Questions: [p. 848]

○ Can you retroactively apply FSIA?
§ The normal U.S. presumption against retroactive application of
statutes was intended "to avoid unnecessary post hoc changes to legal rules on
which parties relied in shaping their primary conduct. But the principle purpose
of foreign sovereign immunity has never been to permit foreign states and their
instrumentalities to shape their conduct in reliance on the promise of future
immunity from suit in the U.S. courts. Rather, such immunity reflects current
political realities and relationships, and aims to give foreign states and their
instrumentalities some present 'protection from the inconvenience of suit as a
gesture of comity.'"

Class Notes
• We look at int'l norms, b/c FSIA says one of its goals is to uphold that