Jam V Ifc
Jam V Ifc
Syllabus
Syllabus
Syllabus
Syllabus
No. 17–1011
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It is so ordered.
16 JAM v. INTERNATIONAL FINANCE CORP.
No. 17–1011
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A
The “commercial activity” exception to the sovereign
immunity of foreign nations is broad. We have said that a
foreign state engages in “commercial activity” when it
exercises “ ‘powers that can also be exercised by private
citizens.’ ” Republic of Argentina, 504 U. S., at 614. Thus,
“a contract to buy army boots or even bullets is a ‘commer-
cial’ activity,” even if the government enters into the
contract to “fulfil[l] uniquely sovereign objectives.” Ibid.;
see also H. R. Rep. No. 94–1487, p. 16 (1976) (“[A] transac-
tion to obtain goods or services from private parties would
not lose its otherwise commercial character because it was
entered into in connection with an [Agency for Interna-
tional Development] program”).
As a result of the majority’s interpretation, many of the
international organizations to which the United States
belongs will discover that they are now exposed to civil
lawsuits based on their (U. S.-law-defined) commercial
activity. And because “commercial activity” may well have
a broad definition, today’s holding will at the very least
create uncertainty for organizations involved in finance,
such as the World Bank, the Inter-American Development
Bank, and the Multilateral Investment Guarantee Agency.
The core functions of these organizations are at least
arguably “commercial” in nature; the organizations exist
to promote international development by investing in
foreign companies and projects across the world. See Brief
for International Bank for Reconstruction and Develop-
ment et al. as Amici Curiae 1–4; Brief for Member Coun-
tries and the Multilateral Investment Guarantee Agency
as Amici Curiae 13–15. The World Bank, for example,
encourages development either by guaranteeing private
loans or by providing financing from its own funds if pri-
vate capital is not available. See Articles of Agreement of
the International Bank for Reconstruction and Develop-
ment, Art. I, Dec. 27, 1945, 60 Stat. 1440, T. I. A. S. No.
Cite as: 586 U. S. ____ (2019) 13
1502.
Some of these organizations, including the International
Finance Corporation (IFC), themselves believe they do not
need broad immunity in commercial areas, and they have
waived it. See, e.g., Articles of Agreement of the Interna-
tional Finance Corporation, Art. 6, §3, Dec. 5, 1955, 7
U. S. T. 2214, 264 U. N. T. S. 118 (implemented by 22
U. S. C. §282g); see also 860 F. 3d 703, 706 (CADC 2017).
But today’s decision will affect them nonetheless. That is
because courts have long interpreted their waivers in a
manner that protects their core objectives. See, e.g.,
Mendaro v. World Bank, 717 F. 2d 610, 614–615 (CADC
1983). (This very case provides a good example. The D. C.
Circuit held below that the IFC’s waiver provision does not
cover petitioners’ claims because they “threaten the
[IFC’s] policy discretion.” See 860 F. 3d, at 708.) But
today’s decision exposes these organizations to potential
liability in all cases arising from their commercial activi-
ties, without regard to the scope of their waivers.
Under the majority’s interpretation, that broad exposure
to liability is at least a reasonable possibility. And that
being so, the interpretation undercuts Congress’ original
objectives and the expectations that it had when it enacted
the Immunities Act in 1945.
B
The majority’s opinion will have a further important
consequence—one that more clearly contradicts the stat-
ute’s objectives and overall scheme. It concerns the im-
portant goal of weeding out lawsuits that are likely bad or
harmful—those likely to produce rules of law that inter-
fere with an international organization’s public interest
tasks.
To understand its importance, consider again that in-
ternational organizations, unlike foreign nations, are
multilateral, with members from many different nations.
14 JAM v. INTERNATIONAL FINANCE CORP.