OBB Personenverkehr AG v. Sachs

When considering whether the commercial activity exception to the Foreign Sovereign Immunity Act applies to a lawsuit, the court focuses on the conduct at the core of the lawsuit.

Respondent purchased a Eurail pass from a Massachusetts travel agent. While using the pass in Austria, Respondent fell and was injured at a state-owned train station. Petitioner operates the Austrian state-owned train station. Respondent sued Petitioner under the commercial activity exception to the Foreign Sovereign Immunity Act. Sovereign immunity protects foreign governments from lawsuits in United States courts. However, a foreign government that conducts commercial activities in the United States will not be immune to lawsuits “based upon” this commercial activity. The Ninth Circuit held that Respondents lawsuit fit within the commercial activity exception because agency principles connected Petitioner to the Massachusetts travel agent, and that the lawsuit was “based upon” the Eurail pass sale in Massachusetts. The Court reversed, reasoning that Respondent’s lawsuit is not “based upon” the sale of the Eurail pass and is instead “based upon” the dangerous conditions of the train station. Therefore, the Court held that the action fell outside of the commercial activity exception.