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SUPREME COURT OF THE UNITED STATES
_________________
No.13–1067
_________________
OBB PERSONENVERKEHR AG, PETITIONER
v.
CAROL P. SACHS
on writ of certiorari to the united states
court of appeals for the ninth circuit
[December 1, 2015]
Chief Justice Roberts delivered the opinion of
the Court.
The Foreign Sovereign Immunities Act shields
foreign states and their agencies from suit in United States courts
unless the suit falls within one of the Act’s specifically
enumerated exceptions. This case concerns the scope of the
commercial activity exception, which withdraws sovereign immunity
in any case “in which the action is based upon a commercial
activity carried on in the United States by [a] foreign
state.” 28 U. S. C. §1605(a)(2).
Respondent Carol Sachs is a resident of
Californiawho purchased in the United States a Eurail pass forrail
travel in Europe. She suffered traumatic personal in-juries when
she fell onto the tracks at the Innsbruck, Austria, train station
while attempting to board a train operated by the Austrian
state-owned railway. She sued the railway in Federal District
Court, arguing that her suit was not barred by sovereign immunity
because it is “based upon” the railway’s sale of
the pass to her in the United States. We disagree and conclude that
her action is instead “based upon” the railway’s
conduct in Innsbruck. We therefore hold that her suit falls outside
the commercial activity exception and is barred by sovereign
immunity.
I
A
Petitioner OBB Personenverkehr AG (OBB)
operates a railway that carries nearly 235 million passengers each
year on routes within Austria and to and from points beyond
Austria’s frontiers. OBB is wholly owned by OBB Holding
Group, a joint-stock company created by the Republic of Austria.
OBB Holding Group in turn is wholly owned by the Austrian Federal
Ministry of Transport, Innovation, and Technology.
Sachs v.
Republic of Austria, 737 F. 3d 584, 587 (CA9 2013).
OBB—along with 29 other railways
throughout Europe—is a member of the Eurail Group, an
association responsible for the marketing and management of the
Eurail pass program. Brief for International Rail Transport
Committee as
Amicus Curiae 12; 737 F. 3d, at 587.
Eurail passes allow their holders unlimited passage for a set
period of time on participating Eurail Group railways. They are
available only to non-Europeans, who may purchase them both
directly from the Eurail Group and indirectly through a worldwide
network of travel agents. Brief for International Rail Transport
Committee as
Amicus Curiae 12–13, and n. 3; Brief
for Respondent4–5.
Carol Sachs is a resident of Berkeley,
California. In March 2007, she purchased a Eurail pass over the
Internet from The Rail Pass Experts, a Massachusetts-based travel
agent. The following month, Sachs arrived at the Innsbruck train
station, planning to use her Eurail pass to ride an OBB train to
Prague. As she attempted to board the train, Sachs fell from the
platform onto the tracks. OBB’s moving train crushed her
legs, both of which had to be amputated above the knee. 737
F. 3d, at 587–588.
Sachs sued OBB in the United States District
Court for the Northern District of California, asserting five
causes of action: (1) negligence; (2) strict liability for design
defects in the train and platform; (3) strict liability for failure
to warn of those design defects; (4) breach of an implied warranty
of merchantability for providing a train and platform unsafe for
their intended uses; and (5) breach of an implied warranty of
fitness for providing a train and platform unfit for their intended
uses. App. 14–18. OBB claimed sovereign immunity and moved to
dismiss the suit for lack of subject matter jurisdiction. 737
F. 3d, at 588.
B
The Foreign Sovereign Immunities Act
“provides the sole basis for obtaining jurisdiction over a
foreign statein the courts of this country.”
Argentine
Republic v.
Amerada Hess Shipping Corp., 488 U. S.
428, 443 (1989) . The Act defines “foreign state” to
include a state “agency or instrumentality,” 28
U. S. C. §1603(a), and both parties agree that OBB
qualifies as a “foreign state” for purposes of the Act.
OBB is therefore “presumptively immune from the jurisdiction
of United States courts” unless one of the Act’s
express exceptions to sovereign immunity applies.
Saudi
Arabia v.
Nelson, 507 U. S. 349, 355 (1993) . Sachs
argues that her suit falls within the Act’s commercial
activity exception, which provides in part that a foreign state
does not enjoy immunity when “the action is based upon a
commercial activity carried on in the United States by the foreign
state.” §1605(a)(2).[
1]
The District Court concluded that Sachs’s
suit did not fall within §1605(a)(2) and therefore granted
OBB’s motion to dismiss. 2011 WL 816854, *1, *4 (ND Cal.,
Jan. 28, 2011). A divided panel of the United States Court of
Appeals for the Ninth Circuit affirmed. 695 F. 3d 1021 (2012).
The full court ordered rehearing en banc and, with three judges
dissenting, reversed the panel decision. 737 F. 3d 584.
The en banc majority first observed that,
“based on the agreement of the parties,” “the
only relevant commercial activity within the United States was
[Sachs’s] March 2007 purchase of a Eurail pass from the Rail
Pass Experts,” a Massachusetts company.
Id., at 591,
n. 4 (internal quotation marks omitted). The court concluded
that The Rail Pass Experts had acted as OBB’s agent and,
using common law principles of agency, attributed that Eurail pass
sale to OBB.
Id., at 591–598.
The court next asked whether Sachs’s
claims were “based upon” the sale of the Eurail pass
within the meaning of §1605(a)(2). The “based
upon” determination, the court explained, requires that the
commercial activity within the United States be “connected
with the conduct that gives rise to the plaintiff’s cause of
action.”
Id.
, at 590. But, the court continued,
“it is not necessary that the entire claim be based upon the
commercial activity of OBB.”
Id., at 599. Rather, in
the court’s view, Sachs would satisfy the “based
upon” requirement for a particular claim “if
an
element of [that] claim consists in conduct that occurred in
commercial activity carried on in the United States.”
Ibid. (internal quotation marks omitted).
Applying California law, see
id., at 600,
n. 14, the court analyzed Sachs’s causes of action
individually and concluded that the sale of the Eurail pass
established a necessary element of each of her claims. Turning
first to the negligence claim, the court found that Sachs was
required to show that OBB owed her a duty of care as a passenger as
one element of that claim. The court concluded that such a duty
arose from the sale of the Eurail pass.
Id., at
600–602. Turning next to the other claims, the court
determined that the existence of a “transaction between a
seller and a consumer” was a necessary element of
Sachs’s strict liability and breach of implied warranty
claims.
Id., at 602. The sale of the Eurail pass, the court
noted, provided proof of such a transaction.
Ibid. Having
found that “the sale of the Eurail pass in the United States
forms an essential element of each of Sachs’s claims,”
the court concluded that each claim was “based upon a
commercial activity carried on in the United States” by OBB.
Ibid.
We granted certiorari. 574 U. S. ___
(2015).
II
OBB contends that the sale of the Eurail pass
is not attributable to the railway, reasoning that the Foreign
Sovereign Immunities Act does not allow attribution through
principles found in the common law of agency. OBB also argues that
even if such attribution were allowed under the Act, Sachs’s
suit is not “based upon” the sale of the Eurail pass
for purposes of §1605(a)(2). We agree with OBB on the second
point and therefore do not reach the first.
A
The Act itself does not elaborate on the
phrase “based upon.” Our decision in
Saudi
Arabia v.
Nelson, 507 U. S. 349 , however, provides
sufficient guidance to resolve this case. In
Nelson, a
husband and wife brought suit against Saudi Arabia and its
state-owned hospital, seeking damages for intentional and negligent
torts stemming from the husband’s allegedly wrongful arrest,
imprisonment, and torture by Saudi police while he was employed at
a hospital in Saudi Arabia.
Id., at 351, 353–354. The
Saudi defendants claimed sovereign immunity under the Act, arguing,
inter alia, that §1605(a)(2) was inapplicable because
the suit was “based upon” sovereign acts—the
exercise of Saudi police authority—and not upon commercial
activity. See Brief for Petitioners in
Saudi Arabia v.
Nelson, O. T. 1992, No. 91–552, pp. 12–14. The
Nelsons countered that their suit was “based upon” the
defendants’ commercial activities in “recruit[ing]
Scott Nelson for work at the hospital, sign[ing] an employment
contract with him, and subsequently employ[ing] him.” 507
U. S., at 358. We rejected the Nelsons’ arguments.
The Act’s “based upon”
inquiry, we reasoned, first requires a court to
“identify[ ] the particular conduct on which the
[plaintiff’s] action is ‘based.’ ”
Id., at 356. Considering dictionary definitions and lower
court decisions, we explained that a court should identify that
“particular conduct” by looking to the
“basis” or “foundation” for a claim,
id., at 357 (citing dictionary definitions), “those
elements . . . that, if proven, would entitle a plaintiff
to relief,”
ibid., and “the ‘gravamen of
the complaint,’ ”
ibid. (quoting
Callejo v.
Bancomer, S. A., 764 F. 2d 1101,
1109 (CA5 1985)). Under that analysis, we found that the commercial
activities, while they “led to the conduct that eventually
injured the Nelsons,” were not the particular conduct upon
which their suit was based. The suit was instead based upon the
Saudi sovereign acts that actually injured them. 507 U. S., at
358. The Nelsons’ suit therefore did not fit within
§1605(a)(2).
Id., at 361–362.
B
The Ninth Circuit held that Sachs’s
claims were “based upon” the sale of the Eurail pass
because the sale of the pass provided “
an
element” of each of her claims. 737 F. 3d, at 599.
Under
Nelson, however, the mere fact that the sale of the
Eurail pass would establish a single element of a claim is
insufficient to demonstrate that the claim is “based
upon” that sale for purposes of §1605(a)(2).
The Ninth Circuit apparently derived its
one-element test from an overreading of one part of one sentence in
Nelson, in which we observed that “the phrase
[‘based upon’] is read most naturally to mean those
elements of a claim that, if proven, would entitle a plaintiff to
relief under his theory of the case.” 507 U. S., at 357.
We do not see how that mention of elements—plural—could
be considered an endorsement of a
one-element test, nor how
the particular element the Ninth Circuit singled out for each of
Sachs’s claims could be construed to entitle her to
relief.
Be that as it may, our analysis in
Nelson
is flatly incompatible with a one-element approach. A one-element
test necessarily requires a court to identify
all the
elementsof each claim in a complaint before that court may re-ject
those claims for falling outside §1605(a)(2). But we did not
undertake such an exhaustive claim-by-claim, element-by-element
analysis of the Nelsons’ 16 causes of action, nor did we
engage in the choice-of-law analysis that would have been a
necessary prelude to such an undertaking. Compare
id., at
356–358, with 737 F. 3d, at 600, n. 14 (noting
disagreement over whether state or federal common law principles
govern suits under the Foreign Sovereign Immunities Act).
Nelson instead teaches that an action is
“based upon” the “particular conduct” that
constitutes the “gravamen” of the suit. Rather than
individually analyzing each of the Nelsons’ causes of action,
we zeroed in on the core of their suit: the Saudi sovereign acts
that actually injured them. As the Court explained:
“Even taking each of the
Nelsons’ allegations about Scott Nelson’s recruitment
and employment as true, those facts alone entitle the Nelsons to
nothing under their theory of the case. The Nelsons have
. . . alleged . . . personal injuries caused by
[the defendants’] intentional wrongs and by [the
defendants’] negligent failure to warn Scott Nelson that they
might commit those wrongs. Those torts, and not the arguably
commercial activities that preceded their commission, form the
basis for the Nelsons’ suit.” 507 U. S.
, at
358.
Under this analysis, the conduct constituting
the gravamen of Sachs’s suit plainly occurred abroad. All of
her claims turn on the same tragic episode in Austria, alleg-edly
caused by wrongful conduct and dangerous conditions in Austria,
which led to injuries suffered in Austria.
Sachs maintains that some of those claims are
not limited to negligent conduct or unsafe conditions in Austria,
but rather involve at least some wrongful action in the United
States. Her strict liability claim for failure to warn, for
example, alleges that OBB should have alerted her to the dangerous
conditions at the Innsbruck train station when OBB sold the Eurail
pass to her
in the United States. Under any theory of the
case that Sachs pre-sents, however, there is nothing wrongful about
the sale of the Eurail pass standing alone. Without the existence
of the unsafe boarding conditions in Innsbruck, there would have
been nothing to warn Sachs about when she bought the Eurail pass.
However Sachs frames her suit, the incident in Innsbruck remains at
its foundation.
As we explained in
Nelson, any other
approach would allow plaintiffs to evade the Act’s
restrictions through artful pleading. For example, any plaintiff
“could recast virtually any claim of intentional tort
. . . as a claim of failure to warn, simply by charging
the defendant with an obligation to announce its own tortious
propensity before indulging it.”
Id., at 363. To allow
such “recast[ing]” of a complaint, we reasoned, would
“give jurisdictional significance to [a] feint of
language,” thereby “effectively thwart[ing] the
Act’s manifest purpose.”
Ibid.
A century ago, in a letter to then-Professor
Frankfurter, Justice Holmes wrote that the “essentials”
of a personal injury narrative will be found at the “point of
contact”—“the place where the boy got his fingers
pinched.” Letter (Dec. 19, 1915), in Holmes and Frankfurter:
Their Correspondence, 1912–1934, p. 40 (R. Mennel & C.
Compston eds. 1996). At least in this case, that insight holds
true. Regardless of whether Sachs seeks relief under claims for
negligence, strict liability for failure to warn, or breach of
implied warranty, the “essentials” of her suit for
purposes of §1605(a)(2) are found in Austria.[
2]
III
Sachs raises a new argument in this Court in
an attempt to fit her claims within §1605(a)(2). In addition
to arguing that her claims are “based upon” the sale of
the Eurail pass, she now contends that her suit is “based
upon” “OBB’s overall commercial railway
enterprise.” Brief for Respondent 24; see also Tr. of Oral
Arg. 38.
“[C]ommercial activity carried on in the
United States by the foreign state,” as used in
§1605(a)(2), is defined to mean “commercial activity
carried on by such state and having substantial contact with the
United States.” §1603(e). Sachs’s new theory is
that OBB’s
entire railway enterprise constitutes the
“commercial activity” that has the requisite
“substantial contact with the United States,” because
OBB reaches out to American customers by marketing and selling
Eurail passes in the United States.
That argument was never presented to any lower
court and is therefore forfeited. Sachs argued in the courts below
only that her claims were “based upon” the sale of the
Eurail pass, and the lower courts resolved the case on that
understanding. See,
e.g., 737 F. 3d, at 591, n. 4
(“The district court concluded, based on the agreement of the
parties, that ‘the only relevant commercial activity within
the United States was plaintiff’s March 2007 purchase of a
Eurail Pass from the Rail Pass Experts.’ We consider only the
relevant conduct as defined by the district
court.”).[
3] Indeed, when
we granted certiorari, the relevant question presented for our
review was whether Sachs’s claims were “based
upon” the “sale of the ticket in the United
States.” Pet. for Cert. i; accord, Brief for Respondent i. We
have answered that question in the negative. Absent unusual
circumstances—none of which is present here—we will not
entertain arguments not made below.
Taylor v.
Freeland
& Kronz, 503 U. S. 638 –646 (1992).
We therefore conclude that Sachs has failed to
demonstrate that her suit falls within the commercial activity
exception in §1605(a)(2). OBB has sovereign immunity under the
Act, and accordingly the courts of the United States lack
jurisdiction over the suit.
The judgment of the United States Court of
Appeals for the Ninth Circuit is reversed.
It is so ordered.
