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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.
