Petition For A Writ of Certiorari
Petition For A Writ of Certiorari
Petition For A Writ of Certiorari
17-___
IN THE
Statutes
Foreign Corrupt Practices Act of 1977, 15
U.S.C. § 78dd-1 et seq. ........................................ 18
viii
22 U.S.C. § 282g ........................................................... 7
International Organizations Immunities Act,
Pub. L. No. 79-291, 59 Stat. 669, 22 U.S.C.
§ 288 et seq. (1945) .......................................passim
22 U.S.C. § 288 .......................................... 2, 14, 16
22 U.S.C. §§ 288-288l ............................................ 3
22 U.S.C. § 288a(b) .......................................passim
28 U.S.C. § 1254(1)....................................................... 1
Foreign Sovereign Immunities Act, Pub. L. No.
94-583, 90 Stat. 2891, 28 U.S.C. § 1602-11
(1976) .............................................................passim
28 U.S.C. § 1605(a)(2) ............................... 8, 18, 20
Federal Tort Claims Act, 60 Stat. 812, 844 ch.
753, tit. IV, § 410(a) (1946) ................................. 25
Legislative Materials
H.R. 4489, 79th Cong. (1945) .................................... 16
H.R. Rep. No. 105-802 (1998) .................................... 18
S. Rep. No. 79-861 (1945) .......................................... 17
ix
Other Authorities
Herz, Steven, International Organizations in
U.S. Courts: Reconsidering the Anachronism
of Absolute Immunity, 31 Suffolk Transnat’l
L. Rev. 471 (2008) ................................................ 20
International Finance Corporation, Articles of
Agreement, 7 U.S.T. 2197 (1955) ................ 7, 8, 25
International Finance Corporation, Policy on
Environmental and Social Sustainability
(2012) ...................................................................... 5
International Monetary Fund, Articles of
Agreement, 60 Stat. 1401 (1945) .......................... 2
Klabbers, Jan, Contending Approaches to
International Organizations, in Research
Handbook on the Law of International
Organizations (Jan Klabbers & Asa
Wallendahl eds., 2011) .......................................... 5
Letter from Acting Secretary of State Arnold
Kanter to President George H.W. Bush
(Sept. 21, 1992) in Digest of United States
Practice in International Law, 1991-1999
(Sally J. Cummins & David P. Stewart eds.,
2005) ..................................................................... 13
Nash, Marian L., Contemporary Practice of the
United States Relating to International Law,
74 Am. J. Int’l L. 917 (1980)................................ 12
The Oxford Handbook of International
Organizations (Jcob Katz Corgan et al.,
eds. 2016) ............................................................... 1
United States, Brief for the United States as
Amicus Curiae, Broadbent v. Org. of Am.
States, 628 F.2d 27 (D.C. Cir. 1980)
(No. 78-1465) .................................................. 13, 18
x
U.S. Dep’t of State, Constitutionality of the Bretton
Woods Agreement Act (1945) .............................. 25
World Bank, Articles of Agreement of the
International Bank for Reconstruction and
Development, 60 Stat. 1440 (1945) ..................... 25
PETITION FOR A WRIT OF CERTIORARI
Petitioners Budha Ismail Jam, et al., respectfully
petition for a writ of certiorari to review the judgment
of the United States Court of Appeals for the D.C.
Circuit in No. 16-7051.
OPINIONS BELOW
The opinion of the United States Court of Appeals
for the D.C. Circuit (Pet. App. 1a) is published at 860
F.3d 703 (D.C. Cir. 2017). The relevant opinion of the
district court (Pet. App. 23a) is published at 172 F.
Supp. 3d 104 (D.D.C. 2016).
JURISDICTION
The opinion of the court of appeals was issued on
June 23, 2017. Pet. App. 1a. The court of appeals
denied rehearing en banc on September 26, 2017. Pet.
App. 39a. On December 11, 2017, the Chief Justice
extended the time within which to file a petition for a
writ of certiorari to and including January 25, 2018.
See No. 17A606. This Court has jurisdiction under 28
U.S.C. § 1254(1).
RELEVANT STATUTORY PROVISIONS
The relevant statutory provisions of the
International Organizations Immunities Act, 22
U.S.C. §§ 288-288a, are reproduced at Pet. App. 40a-
42a.
2
INTRODUCTION
The past several decades have witnessed a
proliferation of “international organizations”—that
is, public organizations in which multiple countries
are members pursuant to treaties or other
foundational laws. See generally The Oxford
Handbook of International Organizations, at v-vi
(Jacob Katz Cogan et al. eds., 2016). These
organizations pursue a wide range of ends—ranging
from providing health care to managing fisheries to
financing economic development. Examples (just to
name a few to which the United States belongs)
include the World Trade Organization, see Exec.
Order No. 13,042, 62 Fed. Reg. 18,017 (Apr. 9, 1997);
the Inter-American Investment Corporation, see
Exec. Order No. 12,567, 51 Fed. Reg. 35,495 (Oct. 2,
1986); and the International Pacific Halibut
Commission, see Exec. Order. No. 11,059, 27 Fed.
Reg. 10,405 (Oct. 23, 1962). All told, there are
currently over eighty formally designated
international organizations of which the United
States is a member. See 22 U.S.C. § 288 (providing
process for presidential designation); id. app. (listing
designated organizations).
Some of these international organizations are
immune from suit in U.S. courts by virtue of their
founding treaties. See, e.g., Nyambal v. Int’l
Monetary Fund, 772 F.3d 277, 281 (D.C. Cir. 2014)
(noting that the International Monetary Fund’s
Articles of Agreement expressly provide immunity
from “every form of judicial process” (quoting Articles
of Agreement of the IMF, Art. IX, § 3, Dec. 27, 1945,
60 Stat. 1401, 1413)); Brzak v. United Nations, 597
F.3d 107, 110-12 (2d Cir. 2010) (describing the
3
Convention on Privileges and Immunities of the
United Nations, “which extends absolute immunity to
the United Nations”). But most are not. For those
organizations, immunity is governed by the
International Organizations Immunities Act (“IOIA”
or the “Act”). See Pub. L. No. 79-291, 59 Stat. 669
(1945) (codified as amended at 22 U.S.C. §§ 288-288l).
Enacted in 1945, the IOIA affords international
organizations certain privileges and immunities,
including “the same immunity from suit and every
form of judicial process as is enjoyed by foreign
governments.” 22 U.S.C. § 288a(b). The Act also
allows international organizations to “waive their
immunity.” Id.
When Congress enacted the IOIA, the question
whether a foreign government was entitled to
immunity from suit was a political one. Courts
deferred to the judgment of the political branches,
including the Executive’s case-by-case
determinations. Republic of Austria v. Altmann, 541
U.S. 677, 689 (2004); Republic of Mexico v. Hoffman,
324 U.S. 30, 35-36 (1945). Absent explicit
instructions, courts implemented the State
Department’s views as best they could.
In the 1952 “Tate Letter,” the State Department
formally “announced its adoption of the restrictive
theory of immunity, under which immunity is
confined to suits involving the foreign sovereign’s
public acts, and does not extend to cases arising out
of a foreign state’s strictly commercial acts.” See
Atkinson v. Inter-Am. Dev. Bank, 156 F.3d 1335,
1340 (D.C. Cir. 1998) (citing Letter from Jack B. Tate,
Acting Legal Adviser, Dep’t of State, to Acting
Attorney General Philip B. Perlman (May 19, 1952));
4
see also Republic of Argentina v. Weltover, Inc., 504
U.S. 607, 612 (1992). Congress later codified the
restrictive theory of foreign sovereign immunity—
and gave courts the sole authority to apply it—in the
Foreign Sovereign Immunities Act of 1976 (“FSIA”).
Pub. L. No. 94-583, 90 Stat. 2891 (codified as
amended at 28 U.S.C. §§ 1602-11).
The question presented here is whether the
IOIA’s language conferring the “same immunity from
suit . . . as is enjoyed by foreign governments” means
that the rules governing immunity for international
organizations track those in the FSIA. The Third
Circuit has held that, as a matter of plain language
and common sense, the IOIA does so. See OSS
Nokalva, Inc. v. Eur. Space Agency, 617 F.3d 756,
762-64 (3d Cir. 2010). Indeed, all but eighteen of the
currently designated IOIA organizations—including
respondent, the International Finance Corporation
(“IFC”)—were designated after 1952; it would be
especially odd for them to be entitled to a form of
immunity that no longer prevailed time of their
designation. “The considered view of the Department
of State” is likewise that “the immunity of
international organizations under the IOIA was not
frozen as of 1945, but follows developments in the law
of foreign sovereign immunity under the FSIA.” Pet.
App. 15a (Pillard, J., concurring).
The D.C. Circuit, however, has squarely “rejected
such an evolving notion of international organization
immunity.” Pet. App. 5a (citing Atkinson, 156 F.3d at
1341). And in the decision below, it reaffirmed its
view that the IOIA gives international organizations
“the immunity that foreign governments enjoyed at
the time the IOIA was passed.” Id. 4a (emphasis
5
added). Notwithstanding this Court’s explanations
that immunity law as of 1945 depended on case-by-
case views of the Executive Branch, the D.C. Circuit
has further held that the law at that time conferred
“virtually absolute immunity” on foreign
governments. Id. 4a (quoting Atkinson, 156 F.3d at
1340). Other courts agree. See infra at 14.
This Court should resolve this conflict.
International organizations play an ever-increasing
role in the economic landscape of this country and the
world, and their actions “have far-reaching
consequences.” Jan Klabbers, Contending
Approaches to International Organizations, in
Research Handbook on the Law of International
Organizations 3, 3 (Jan Klabbers & Åsa Wallendahl
eds., 2011). Yet courts are generally the only
available forum for holding such organizations to
their legal obligations. Therefore, the question
whether they are absolutely immune from any kind
of lawsuit—no matter how strictly commercial their
activities; no matter how egregiously unlawful their
actions; and no matter the views of the Executive
Branch—is extremely important. Even more to the
point, no organization should be essentially above the
law without this Court having at least considered the
issue.
STATEMENT OF THE CASE
1. This case arises out of a commercial
development project financed by respondent, the
International Finance Corporation. Chartered in
1955 and headquartered in Washington, D.C., the
IFC’s stated “mission is to fight poverty.” IFC, Policy
on Environmental and Social Sustainability 2 (2012),
http://bit.ly/2mJbbiR. Specifically, it provides loans in
6
the developing world to private corporations, at
profit-generating interest rates, for projects that
would otherwise have difficulty attracting private
capital. Pet. App. 3a. The IFC is composed of 184
member countries, including the United States. Id.
24a. It is also “among the organizations that have
been . . . designated” under the IOIA as “international
organizations.” Id. 29a (citing Exec. Order No. 10,680,
21 Fed. Reg. 7647 (Oct. 2, 1956)).
In 2008, the IFC provided $450 million in loans
“for construction of the Tata Mundra Power Plant in
Gujarat, India.” Pet. App. 2a-3a.1 In accordance with
the IFC’s policy to prevent social and environmental
damage, the loan agreement afforded the IFC
“supervisory authority” over the project and “included
an Environmental and Social Action Plan designed to
protect the surrounding communities” from harm. Id.
3a. Should the local loan recipient fail to abide by
these conditions, the IFC “could revoke financial
support for the project.” Id.
According to the IFC’s own ombudsman, however,
the IFC engaged in “inadequate supervision of the
project.” Pet. App. 3a. “[T]he plant’s construction and
operation did not comply with the Plan.” Id. “Yet the
IFC did not take any steps” to address the situation.
Id. And it still has not taken any meaningful steps.
The result is a “dismal picture.” See Pet. App. 2a
n.1. The power plant has “devastated” the local
environment—and, indeed, the local way of life. Id.
2a. To name just a few of the calamities, neighboring
1
Because this appeal arises from a motion to dismiss, all
allegations in the complaint must be taken as true. See, e.g.,
Walden v. Fiore, 134 S. Ct. 1115, 1119 n.2 (2014).
7
villagers and farmers are no longer able to procure
fresh water because the plant’s construction caused
“[s]altwater intrusion into the [local] groundwater.”
Id. 2a n.1. “[T]he plant’s cooling system discharges
thermal pollution into the sea, killing off marine life
on which fisherman rely for their income” and local
residents rely for nourishment. Id. And “coal dust and
ash”—released from a conveyor system that brings
coal to the plant—“disperse into the atmosphere and
contaminate the surrounding land and air.” Id.
2. Petitioners are farmers and fishermen who live
near the plant, a trade union of fishworkers, and a
local government entity. See Pet. App. 2a. In 2015,
they sued the IFC in the U.S. District Court for the
District of Columbia, where it is domiciled, id. 3a.
Petitioners brought claims “for negligence, negligent
supervision, public nuisance, private nuisance,
trespass, and breach of contract.” Id. 28a. They
sought “injunctive relief running against [the] IFC or,
in the alternative, compensatory and punitive
damages.” Id.
The IFC’s Articles of Agreement—its founding
treaty—contain an express waiver of immunity.
Under that provision, “[a]ctions may be brought
against the Corporation . . . in a court of competent
jurisdiction in the territories of a member in which
the Corporation has an office.” IFC Articles of
Agreement art. VI, § 3, Dec. 5, 1955, 7 U.S.T. 2197,
2214;2 see also 22 U.S.C. § 282g (giving this provision
of the IFC Articles of Agreement “full force and effect
in the United States”). There is only one exception:
2
The IFC Articles of Agreement, as amended through June
2012, are available at http://bit.ly/2bnPz4q.
8
Suits by member states are expressly prohibited. IFC
Articles of Agreement, supra, art. VI, § 3.
Yet the IFC responded to petitioners’ complaint
by moving to dismiss based on absolute immunity,
among other grounds. Pet. App. 28a. Petitioners
responded that under the restrictive theory of
sovereign immunity codified in the FSIA, see 28
U.S.C. § 1605(a)(2), the IFC is amenable to suit for
commercial activities performed in the United States,
including its financing of the Tata Mundra Plant. See
Pet. App. 3a-5a. Petitioners also argued that the IFC
had waived through its charter any immunity to
which it might otherwise be entitled. Id. 4a, 7a.
The district court granted the IFC’s motion,
ruling “only” on its immunity argument. Pet.
App. 28a, 38a. The district court noted that in
Atkinson v. Inter-American Development Bank, 156
F.3d 1335 (D.C. Cir. 1998), the D.C. had Circuit held
that the IOIA affords international organizations the
degree of immunity that foreign governments enjoyed
in 1945, when the IOIA was enacted. Pet. App. 30a.
That form of immunity, the D.C. Circuit had
concluded, was “virtually absolute immunity.” Id.
(quoting Atkinson, 156 F.3d at 1340). Accordingly,
the district court held that the IFC is absolutely
immune from suit. Id.
The district court also held, despite “the broad
language of [the IFC’s] waiver,” Pet. App. 31a, that
the IFC Articles of Agreement had not waived the
IFC’s immunity, id. 37a. Stressing that D.C. Circuit
precedent required it “to read such waivers . . .
narrowly,” the district court explained that “[t]he
relevant question is . . . ‘whether a waiver of
immunity to allow this type of suit, by this type of
9
plaintiff, would benefit the organization over the long
term.’” Id. 31a-32a (quoting Osseiran v. IFC, 552 F.3d
836, 840 (D.C. Cir. 2009)). Petitioners argued that
their suit falls into this category because the IFC
requires the support of the local community before
financing potentially harmful projects like the Tata
Mundra Plant. See id. 35a. The IFC, petitioners
continued, would not be able to “credibly assuage any
doubts that local communities may harbor” about the
impacts of future projects if its promises to prevent
injury were unenforceable. Id. 36a. The district court
acknowledged that this argument “makes some
intuitive sense.” Id. But it ultimately deemed the
argument foreclosed by D.C. Circuit precedent. Id.
37a-38a.
3. A panel of the D.C. Circuit, which included two
of the three judges who decided Atkinson, affirmed.
The court of appeals declared that Atkinson “stands
as an impassable barrier” to any argument that the
IOIA should be construed consistently with the FSIA.
Pet. App. 7a. Under Atkinson, “international
organizations [a]re given complete immunity by the
IOIA.” Id. 6a.
The court of appeals also ruled that even though
the IFC Articles of Agreement, “read literally, would
seem to include a categorical waiver” of immunity
from suit, the IFC had not waived its immunity. Pet.
App. 7a-11a. The D.C. Circuit acknowledged that “it
is a bit strange” that its precedent requires courts to
ask “when a claim ‘benefits’ the international
organization.” Id. 8a (citing Osseiran, 552 F.3d at
840). But, being “obliged to apply” that test, the court
of appeals found the benefits of this suit would be
outweighed by the burdens. Id. 10a-11a.
10
Judge Pillard wrote separately to express her
opinion that Atkinson was “wrongly decided” and
should be abrogated. Pet. App. 12a (Pillard, J.,
concurring). Noting that the Third Circuit has
expressly rejected Atkinson, Judge Pillard
maintained that were she “not bound by Atkinson,
[she too] would hold that international organizations’
immunity under the IOIA is the same as the
immunity enjoyed by foreign states.” Id. 16a (citing
OSS Nokalva, Inc. v. Eur. Space Agency, 617 F.3d
756, 762-64 (3d Cir. 2010)). “When a statute
incorporates existing law by reference”—as the IOIA
does—“the incorporation is generally treated as
dynamic, not static.” Id. 12a. And that canon, Judge
Pillard concluded, “makes sense” here. Id. 16a.
“Neither the IOIA nor [the D.C. Circuit’s] cases
interpreting it explain why nations that collectively
breach contracts or otherwise act unlawfully through
organizations should enjoy immunity in our courts
when the same conduct would not be immunized if
directly committed by a nation acting on its own.” Id.
Judge Pillard added that the D.C. Circuit’s
waiver case law has “compounded” Atkinson’s error.
Pet. 16a. Directing that courts “pare back an
international organization’s apparent waiver of
immunity,” according to the “amorphous” question
whether a particular lawsuit would “benefit” an
international organization, creates a “doctrinal
tangle.” Pet. App. 16a-17a, 21a. It would be far better,
Judge Pillard proposed, to determine waiver issues
according to organizations’ own charters and the
“time-tested body of law under the FSIA” that allows
lawsuits based on commercial activity. Id. 21a.
11
4. Petitioners sought rehearing en banc, but the
court of appeals denied the petition without comment.
Pet. App. 39a.
REASONS FOR GRANTING THE WRIT
The International Organizations Immunities Act
grants international organizations “the same
immunity from suit and every form of judicial process
as is enjoyed by foreign governments.” 22 U.S.C.
§ 288a(b). This statute gives rise to two important
questions. First, does the “same immunity . . . as is
enjoyed” language incorporate immunity standards
as they currently exist under the Foreign Sovereign
Immunities Act, or does it continue to give
international organizations the now-anachronistic
immunity to which foreign governments were
entitled in 1945? Second, if the statute does the latter,
what rules govern the immunity to which
international organizations are entitled? The Court
should use this case to consider both these pressing
questions.
I. This Court should resolve whether the IOIA
cloaks international organizations with greater
immunity than the FSIA affords to foreign states.
A. There is an entrenched circuit split over this
issue.
1. The Third Circuit has held that “[w]ell-
established rules of statutory interpretation
demonstrate” that the IOIA confers no more
immunity on international organizations than the
FSIA affords to foreign states. OSS Nokalva, Inc. v.
Eur. Space Agency, 617 F.3d 756, 762-63 (3d Cir.
2010). In particular, the Third Circuit has explained
that the plain language of the IOIA’s “same
12
immunity” language triggers the “Reference Canon.”
Id. at 762-63. Under that canon, “[a] statute which
refers to a subject generally adopts the law on the
subject as of the time the law is enacted. This will
include all the amendments and modifications of the
law subsequent to the time the reference statute was
enacted.” Id. at 763 (emphasis in original) (quotation
marks and citation omitted). Applying that canon
here, the IOIA tracks the FSIA. Id. at 763-64.3
“The considered view of the Department of State”
is likewise that “the immunity of international
organizations under the IOIA was not frozen as of
1945, but follows developments in the law of foreign
sovereign immunity under the FSIA.” Pet. App. 15a
(Pillard, J., concurring); see also OSS Nokalva, 617
F.3d at 763-64. The State Department Legal Advisor
has explained: “By virtue of the
FSIA, . . . international organizations are now subject
to the jurisdiction of our courts in respect of their
commercial activities . . . .” Letter from Roberts B.
Owen, Legal Adviser, Dep’t of State, to Leroy D.
Clark, Gen. Counsel, EEOC (June 24, 1980), in
Marian L. Nash, Contemporary Practice of the
United States Relating to International Law, 74 Am.
J. Int’l L. 917, 918 (1980).4 Furthermore, the United
3
Before the D.C. Circuit’s decision in Atkinson, the United
States District Court for the District of Columbia also concluded
that “the plain language of the International Organizations
Immunities Act incorporates the terms of the Foreign Sovereign
Immunities Act.” Rendall-Speranza v. Nassim, 932 F. Supp. 19,
23 (D.D.C. 1996) (capitalization altered). But Atkinson
abrogated this decision. See 156 F.3d at 1341 n.6.
4
The State Department has similarly explained that the
United States typically “afford[s] restrictive immunity” to
13
States has explained in a brief to the D.C. Circuit that
the “express language and the statutory purposes
underlying the [IOIA] bring international
organizations within the terms of the [FSIA],”
characterizing the contrary view as “devoid of
substance.” Brief for the United States as Amicus
Curiae at 8-9, Broadbent v. Org. of Am. States, 628
F.2d 27 (D.C. Cir. 1980) (No. 78-1465), available at 3
D.C. Cir. J.A. 1056-75 [hereinafter U.S. Broadbent
Brief]; see also Broadbent, 628 F.2d at 31
(acknowledging this view).
“Although the State Department’s interpretation
of the IOIA is not binding on [courts], the
Department’s involvement in the drafting of the IOIA
lends its view extra weight.” Pet. App. 15a (Pillard,
J., concurring).
2. In direct contrast, the D.C. Circuit reaffirmed
its view here that the IOIA cloaks international
organizations with “the immunity of foreign
organizations in 1945.” Pet. App. 6a (citing Atkinson
v. Inter-Am. Dev. Bank, 156 F.3d 1335 (D.C. Cir.
1998)). In Atkinson, the D.C. Circuit opined that “the
text of the IOIA unfortunately provides no express
guidance on whether Congress intended to
incorporate in the IOIA subsequent changes to the
law governing the immunity of foreign sovereigns.”
156 F.3d at 1341. The D.C. Circuit therefore turned
to another provision of the Act giving the President
the authority to modify or revoke any of the privileges
5
Although the petition for certiorari in Nyambal raised the
question presented here, that case was a poor vehicle for
resolving the issue. The defendant’s articles of agreement gave
it unqualified immunity from suit, “broader than the protection
afforded by the IOIA’s aegis alone.” Nyambal, 772 F.3d at 281.
So the defendant was entitled to immunity regardless of the
scope of the IOIA. See id. Such is not the case here.
16
This conclusion is also compelled by the
particular context in which the IOIA operates. The
IOIA is a jurisdictional provision. See Zuza v. Office
of the High Representative, 107 F. Supp. 3d 90, 93
(D.D.C. 2015). And where, as here, a jurisdictional
provision is “expressed in the present tense,” its
“plain text” requires applying the law as of the time
of suit. Dole Food Co. v. Patrickson, 538 U.S. 468, 478
(2003). Furthermore, sovereign immunity has always
been determined according to “current political
realities.” Republic of Austria v. Altmann, 541 U.S.
677, 696 (2004).
The D.C. Circuit brushed all this aside, focusing
instead on another IOIA provision that gives the
President the “authority to modify, condition, limit,
and even revoke” the privileges or immunities of a
designated organization. Atkinson, 156 F.3d at 1341
(citing 22 U.S.C. § 288). The D.C. Circuit has taken
this provision as evidence that Congress intended
post-1945 changes in immunity from suit to come
only from the Executive, not from subsequent
legislation. See id. But as Judge Pillard explained
below, that provision “merely empowers the
President to make organization- and function-specific
exemptions from otherwise-applicable immunity
rules.” Pet. App. 13a (Pillard, J., concurring); accord
OSS Nokalva, 617 F.3d at 763. It does not establish
those otherwise-applicable immunity rules; that is
what Section 288a(b) does.
2. Drafting history. The drafting history of the
IOIA confirms what the plain text indicates. The
original House version of the Act provided
international organizations “immunity from suit and
every form of judicial process.” H.R. 4489, 79th Cong.
17
§ 2(b) (1945). The Senate, however, rejected this
phrasing. While retaining absolute immunity
language with respect to “the property of
international organizations,” the Senate curbed the
immunity-from-suit provision so that, as enacted, it
provides merely the “same immunity . . . as is enjoyed
by foreign governments.” Pet. App. 14a-15a (Pillard,
J., concurring) (alteration in original) (emphasis
added) (citation omitted). A court may not “read back
into the Act the very . . . ‘statutory language that
[Congress] ha[d] earlier discarded in favor of other
language.’” Chickasaw Nation v. United States, 534
U.S. 84, 93 (2001) (citation omitted).
The D.C. Circuit’s Atkinson decision overlooked
this problem. Instead, the court fixated on a sentence
of legislative history stating that the President
retained the authority to adjust the immunity a
designated organization enjoys if it “engage[d], for
example, in activities of a commercial nature.” 156
F.3d at 1341 (quoting S. Rep. No. 79-861, at 2 (1945)).
From this the court concluded that the 1945 Congress
had already “taken into account” the “concerns that
motivated the State Department to adopt the
restrictive immunity approach to foreign sovereigns
in 1952” by giving the role of modifying immunity to
the President. Id. But this single sentence of
legislative history can hardly overcome the plain text
of the IOIA. At any rate, the sentence offers no
meaningful support to the D.C. Circuit’s view. As
noted just above, the President’s power is to make
organization-specific exceptions to immunity, not to
change the default immunity rules.
Lest there be any doubt, Congress itself has since
read the IOIA to provide only restrictive immunity.
18
Years after the United States adopted the restrictive
theory, a congressional report confirmed that
“international organizations . . . generally have the
same immunity as foreign governments, and the
[FSIA] provides that foreign governments are not
immune for actions taken in connection with their
commercial activities.” H.R. Rep. No. 105-802, at 13
(1998) (citation omitted) (explaining the impact of an
amendment to the Foreign Corrupt Practices Act).
3. Consequences. The D.C. Circuit’s absolute
immunity rule also produces “an anomalous result,”
OSS Nokalva, 617 F.3d at 764. As just noted, foreign
states involved in commercial activities are subject to
suits in this country based on those activities. See 28
U.S.C. § 1605(a)(2). Yet under the D.C. Circuit’s rule,
“a group of states acting through an international
organization is entitled to broader immunity than its
member states enjoy when acting alone.” OSS
Nokalva, 617 F.3d at 764; see also Pet. App. 16a
(Pillard, J., concurring). As the United States has
explained, there is “no reason” for this incongruity.
U.S. Broadbent Brief, supra, at 10. Worse yet, the
rule “may create an incentive for foreign governments
to evade legal obligations by acting through
international organizations.” OSS Nokalva, 617 F.3d
at 764.
The D.C. Circuit has never answered this
argument. At the very least, therefore, its
counterintuitive and potentially subversive absolute
immunity rule demands review by this Court.
C. This Court should resolve this important
issue here and now.
1. The question whether the IOIA incorporates
the restrictive theory of immunity codified in the
19
FSIA is a recurring issue. It has been embedded in
D.C. Circuit cases in recent years involving claims
ranging from bankruptcy, see Kaiser Grp. Int’l, Inc. v.
World Bank, 420 Fed. Appx. 2 (D.C. Cir. 2011), to race
discrimination in employment, see Smith v. World
Bank Grp., 694 Fed. Appx. 1 (D.C. Cir. 2017). Other
decisions include Sampaio, 468 Fed. Appx. 10;
Inversora Murten, S.A. v. Energoprojekt-
Niskogradnja Co., 264 Fed. Appx. 13 (D.C. Cir. 2008);
Aguado v. Inter-Am. Dev. Bank, 85 Fed. Appx. 776
(D.C. Cir. 2004); Dujardin v. Int’l Bank for
Reconstruction & Dev., 9 Fed. Appx. 19 (D.C. Cir.
2001); Fazzari v. Inter-Am. Dev. Bank, 254 F.3d 315
(D.C. Cir. 2000); Hudes v. Aetna Life Ins. Co., 806 F.
Supp. 2d 180, 187-89 (D.D.C. 2011), aff’d per curiam,
493 Fed. Appx. 107 (D.C. Cir. 2012); Polak v. IMF,
657 F. Supp. 2d 116, 120-21 (D.D.C. 2009), appeal
dismissed, No. 09-7114, 2010 WL 4340534 (D.C. Cir.
2010). The question presented also regularly arises in
other courts. See supra at 14 (citing cases from the
past decade adjudicated in federal or state courts in
Alaska, Georgia, New Jersey, New York, and Texas).
2. The question presented also has significant
implications for individuals and international
organizations alike. Individuals and companies doing
business with international organizations have a
strong interest in holding such organizations to their
commercial and other private-law obligations. The
same is true of others directly affected by the actions
of such organizations. Insofar as the D.C. Circuit’s
absolute immunity rule is mistakenly impeding such
legal accountability, this Court should reject that
rule.
20
On the other hand, when the IOIA provides
immunity, it provides protection from “every form of
judicial process,” 22 U.S.C. § 288a(b), no matter how
preliminary or “unobtrusive,” Atkinson, 156 F.3d at
1339. Accordingly, if the D.C. Circuit’s absolute
immunity rule is correct, then international
organizations should be promptly relieved of the
obligation to defend themselves in the Third Circuit,
as well as in other courts where the question
presented is unresolved.
3. The question whether the IOIA incorporates
the restrictive theory of immunity codified in the
FSIA is outcome-determinative here. The FSIA
denies immunity where a lawsuit is based on
“commercial activity” in the United States or on an
act performed in the United States in connection with
commercial activity elsewhere. 28 U.S.C. § 1605(a)(2);
see also Republic of Argentina v. Weltover, Inc., 504
U.S. 607, 614 (1992). The IFC has not disputed that
its activities at issue here meet this test. Nor could it.
Loaning money at market-based interest rates to a
private entity, to build a private enterprise, is
quintessentially commercial activity. See Steven
Herz, International Organizations in U.S. Courts:
Reconsidering the Anachronism of Absolute
Immunity, 31 Suffolk Transnat’l L. Rev. 471, 529
(2008) ( “banking transactions” constitute commercial
activity for FSIA purposes). And the IFC made these
loan decisions, as well as at least some subsequent
supervisory choices, in the United States.
Accordingly, if the IOIA tracks the FSIA, then the
IFC is not entitled to immunity and the D.C. Circuit’s
judgment must be reversed.
21
II. If the IOIA confers greater immunity than the
FSIA allows, this Court should settle the basic
rules governing that immunity.
Even if the D.C. Circuit were correct that the
IOIA entitles international organizations to
immunity according to the rules that prevailed in
1945, this Court’s intervention would still be
warranted. This is so for two reasons. First, contrary
to the D.C. Circuit’s position, the law in 1945 did not
afford absolute immunity to foreign governments.
Second, the D.C. Circuit’s test for determining
whether an organization has waived its immunity is
misguided. At the very least, the meaning of the IOIA
is too important to be left to D.C. Circuit precedent
that—as even members of that court endorsing the
precedent concede—“is a bit strange” even on its own
terms and requires demoting several decisions of this
Court to mere “dicta.” See Pet. App. 6a, 8a.
A. The D.C. Circuit’s “absolute immunity” rule is
mistaken.
1. This Court has repeatedly explained that as of
1945, sovereign immunity was not absolute. Instead,
courts “‘consistently . . . deferred to the decisions of
the political branches—in particular, those of the
Executive Branch—on whether to take jurisdiction’
over particular actions against foreign sovereigns.”
Republic of Austria v. Altmann, 541 U.S. 677, 689
(2004) (alteration in original) (quoting Verlinden
B.V. v. Cent. Bank of Nigeria, 461 U.S. 480, 486
(1983)); see also Bank Markazi v. Peterson, 136 S. Ct.
1310, 1328 (2016). Accordingly, courts in 1945 would
confer immunity if the State Department requested
it. Samantar v. Yousuf, 560 U.S. 305, 311 (2010).
22
But if the Executive Branch remained silent, a
court would “decide for itself” whether the immunity
a foreign state sought was “one which it is the
established policy of the [State Department] to
recognize.” Samantar, 560 U.S. at 311-12 (alteration
in original) (first quoting Ex parte Republic of Peru,
318 U.S. 578, 587 (1943); then quoting Republic of
Mexico v. Hoffman, 324 U.S. 30, 36 (1945)). Courts
would not “allow an immunity on new grounds which
the government has not seen fit to recognize.” Bank
Markazi, 136 S. Ct. at 1328 (quoting Hoffman, 324
U.S. at 35). Indeed, less than a year before the IOIA
was enacted, this Court in Hoffman denied immunity
to Mexico because the State Department did not
request it and no established ground supported it.
324 U.S. at 38.
Applying this framework leads to a
straightforward conclusion: Even if the IOIA requires
courts today to follow the immunity rules of 1945,
courts should still not confer immunity upon
international organizations where, as here, the FSIA
would deny it and the Executive Branch has not
asked for it. The “official policy of our Government”—
reflected in the FSIA and, before that, in the 1952
Tate Letter—is the “restrictive theory” of sovereign
immunity. See Alfred Dunhill of London, Inc. v.
Republic of Cuba, 425 U.S. 682, 698, 703 (1976)
(opinion of White, J.). And even more specifically, the
State Department’s view is that international
organizations are not entitled to more immunity than
the FSIA confers. See supra at 12-13 (setting forth the
State Department’s position). A court applying 1945
immunity law must “defer” to that political branch
policy. Cf. Altmann, 541 U.S. at 696 (deferring to
congressional judgment embodied in the FSIA).
23
2. The D.C. Circuit has rejected this logic on the
ground that this Court’s consistent description—
beginning in 1943 and as recently as 2016—of the
immunity rules that prevailed in 1945 has been mere
“dicta.” Pet. App. 6a. According to the D.C. Circuit,
the law at that time instead bestowed “absolute
immunity” on foreign governments—without ever
expressly saying so. Id. 4a, 6a; see also Atkinson v.
Inter-Am. Dev. Bank, 156 F.3d 1335, 1341 (D.C. Cir.
1998).
This Court’s statements respecting deference to
the political branches, however, are not dicta.
Altmann held the FSIA applies to pre-FSIA conduct
partly because courts have long “deferred to the
[immunity] decisions of the political branches.” 541
U.S. at 689, 696 (quoting Verlinden, 461 U.S. at 486).
And this Court deemed the pre-1945 rule that courts
would not allow immunity the government had not
recognized “[p]articularly pertinent” in Bank
Markazi, 136 S. Ct. at 1328, and “controlling” in
Hoffman, 324 U.S. at 38. See also OSS Nokalva,
Inc. v. Eur. Space Agency, 617 F.3d 756, 762 n.4 (3d
Cir. 2010) (noting that “considerable evidence”
supports the conclusion that this Court’s rule in 1945
was deference to the political branches, not absolute
immunity).
Hedging its bets, the D.C. Circuit also suggested
here that “virtually absolute” immunity existed in
1945 at least as “a matter of practice” because the
State Department requested immunity back then
“whenever a foreign sovereign was sued.” Pet.
App. 6a. But this assertion, too, is incorrect. In
addition to the Hoffman case discussed above, the
State Department either denied or declined to
24
suggest immunity in numerous pre-1945 cases, see,
e.g., Compania Espanola de Navegacion Maritima,
S.A. v. The Navemar, 303 U.S. 68, 71 (1938);
Lamont v. Travelers Ins. Co., 24 N.E.2d 81, 86 (N.Y.
1939), including some involving commercial activity,
see, e.g., United States v. Deutsches Kalisyndikat
Gesellschaft, 31 F.2d 199, 200, 203 (S.D.N.Y. 1929);
The Pesaro, 277 F. 473, 479 n.3 (S.D.N.Y. 1921). And
where the State Department did not suggest
immunity, courts denied it. See, e.g., Deutsches
Kalisyndikat Gesellschaft, 31 F.2d at 200, 203; Ulen
& Co. v. Bank Gospodarstwa Krajowego, 24 N.Y.S.2d
201, 204, 206 (App. Div. 1940).
B. The D.C. Circuit’s test for finding a waiver of
immunity distorts the plain language of
governing law.
The IOIA makes clear that international
organizations “may expressly waive their immunity.”
22 U.S.C. § 288a(b). Yet the D.C. Circuit’s doctrine for
assessing such waivers “lacks a sound legal
foundation and is awkward to apply.” Pet. App. 17a
(Pillard, J., concurring). That doctrine, too, warrants
this Court’s review.
1. Analyzing under the IOIA whether an
international organization has waived immunity to
suit should be an uncomplicated task. All such
organizations have founding agreements that reflect
the judgment of the participating states—including
the United States—as to the level of privileges and
immunities necessary for the organization to carry
out its particular functions. The IFC Articles of
Agreement, like those of many other international
organizations, state that except for suits by member
states, “[a]ctions may be brought against the
25
Corporation.” IFC Articles of Agreement, supra,
art. VI, § 3. Where, as here, the plain terms of those
documents waive immunity, those express waivers
should be honored. Cf., e.g., United States v. Yellow
Cab Co., 340 U.S. 543, 547 & n.4 (1951) (explaining
that the Federal Tort Claims Act, which gave district
courts jurisdiction (subject to certain exceptions not
pertinent here) to hear “any [tort] claim against the
United States,” “waive[d] the Government’s
immunity from suit in sweeping language” (quoting
ch. 753, tit. IV, § 410(a), 60 Stat. 812, 844) (1946)).
The D.C. Circuit acknowledged that “read
literally,” the IFC’s waiver provision “would seem to
include a categorical waiver” of immunity. Pet. App.
7a. And that is how the State Department read
identical language in the World Bank’s Articles of
Agreement when it was established. See Articles of
Agreement of the International Bank for
Reconstruction and Development art. VII, § 3,
Dec. 27, 1945, 60 Stat. 1440, 1457-58. “[T]he Bank,”
the State Department explained, “will be subject to a
suit.” U.S. Dep’t of State, Constitutionality of the
Bretton Woods Agreement Act 90 (1945),
http://bit.ly/2Dm0qwe. But instead of enforcing the
text of the charter according to its plain terms, the
D.C. Circuit has read the IOIA’s waiver provision to
insert “a qualifier into it.” Osseiran v. IFC, 552 F.3d
836, 839 (D.C. Cir. 2009). The D.C. Circuit insists
that under the IOIA, an international organization’s
express waiver of immunity “allow[s] only the type of
suit by the type of plaintiff that ‘would benefit the
organization over the long term.’” Pet. App. 7a
(emphasis omitted) (quoting Osseiran, 552 F.3d at
840); see also Atkinson, 156 F.3d at 1338.
26
The IOIA provides no license to engage in such
picking and choosing. Its provision allowing
international organizations to “expressly waive their
immunity,” 22 U.S.C. § 288a(b), contains no qualifier
directing courts to assess whether an international
organization will “benefit” in any given case from
waiver of immunity from suit. Therefore, an
organization’s express, categorical waiver in its
charter should be the end of the matter. At any rate,
organizations’ assessments of costs and benefits “are
more reliably reflected in their charters and
policies—here, in the broad waiver included in the
IFC’s Articles of Agreement—than in their litigation
positions defending against pending claims.” Pet.
App. 19a (Pillard, J., concurring).
2. The D.C. Circuit’s practice in applying its
revisionist waiver test highlights the test’s
impropriety. The test assumes that an international
organization’s long-term goals are served by being
amenable to suit based on commercial activity only
when the party suing it “would not [have] enter[ed]
into negotiations or contract with the organization
absent waiver.” Pet. App. 9a.
But, as Judge Pillard explained below, “the
opposite would make more sense.” Pet. App. 19a
(Pillard, J., concurring). “Entities doing regular
business with international organizations can write
waivers of immunity into their contracts with the
organizations.” Id.; see also OSS Nokalva, 617 F.3d at
759 (referencing a contract clause allowing a software
developer to sue an international organization). So
perhaps the absence of a waiver of immunity in a
contract negotiated by sophisticated parties might
indicate something about the parties’ intent. By
27
contrast, local people who “lack[] any bargaining
opportunity” to obtain similar concessions—even
regarding risky projects like this one—have no
comparable protection. Pet. App. 20a (Pillard, J.,
concurring). All they have is the IOIA and its
commitment to honor waivers of immunity in
organizations’ charters. Therefore, when such people
bring suits against international organizations, the
only way the organizations can demonstrate they are
willing to be kept to their promises (and thereby
benefit themselves in the long run) is to subject
themselves to suit—at least insofar as foreign states
would be subject to suit under the FSIA.
CONCLUSION
For the foregoing reasons, the petition for a writ
of certiorari should be granted.
Respectfully submitted,
Richard L. Herz Jeffrey L. Fisher
Marco B. Simons Counsel of Record
Michelle C. Harrison David T. Goldberg
EARTHRIGHTS Pamela S. Karlan
INTERNATIONAL STANFORD LAW SCHOOL
1612 K Street, N.W. SUPREME COURT
Suite 401
Washington, DC 20006 LITIGATION CLINIC
559 Nathan Abbott Way
Stanford, CA 94305
(650) 724-7081
jlfisher@stanford.edu
1
Appellants’ complaint paints a dismal picture. For example,
the plant’s cooling system discharges thermal pollution into the
sea, killing off marine life on which fishermen rely for their
income. Saltwater intrusion into the groundwater—a result of the
plant’s construction—means that farmers can no longer use that
water for irrigation. (In fact, the villagers must purchase
elsewhere freshwater necessary for consumption.) And because
3a
The IFC, headquartered in Washington, is an
international organization founded in 1956 with over
180 member countries. It provides loans in the
developing world to projects that cannot command
private capital. IFC Articles, art. III §3(i), Dec. 5, 1955,
7 U.S.T. 2197, 264 U.N.T.S. 117. The IFC loaned $450
million to Coastal Gujarat Power Limited, a subsidiary
of Tata Power, an Indian company, for construction
and operation of the Tata Mundra Plant. The loan
agreement, in accordance with IFC’s policy to prevent
social and environmental damage, included an
Environmental and Social Action Plan designed to
protect the surrounding communities. The loan’s
recipient was responsible for complying with the
agreement, but the IFC retained supervisory authority
and could revoke financial support for the project.
Unfortunately, according to the IFC’s own internal
audit conducted by its ombudsman, the plant’s
construction and operation did not comply with the
Plan. And the IFC was criticized by the ombudsman
for inadequate supervision of the project. Yet the IFC
did not take any steps to force the loan recipients into
compliance with the Plan.
The appellants’ claims are almost entirely based on
tort: negligence, negligent nuisance, and trespass.
They do, however, raise a related claim as alleged third
party contract beneficiaries of the social and
environmental terms of the contract. According to
appellants, the IFC is not immune to these claims,
2
The Articles of Agreement contains the following provision,
titled “Position of the Corporation with Regard to Judicial
Process”:
Actions may be brought against the Corporation only in
a court of competent jurisdiction in the territories of a
member in which the Corporation has an office, has
appointed an agent for the purpose of accepting service
or notice of process, or has issued or guaranteed
securities. No actions shall, however, be brought by
members or persons acting for or deriving claims from
members. The property and assets of the Corporation
shall, wheresoever located and by whomsoever held, be
immune from all forms of seizure, attachment or
execution before the delivery of final judgment against
the Corporation.
IFC Articles, art. 6, § 3(vi). That provision carries “full force and
effect in the United States” under the International Finance
Corporation Act. 22 U.S.C. § 282g.
8a
(citing Atkinson, 156 F.3d at 1338 and Mendaro, 717
F.2d at 618).3
To be sure, it is a bit strange that it is the judiciary
that determines when a claim “benefits” the
international organization; after all, the cases come to
us when the organizations deny the claim, and one
would think that the organization would be a better
judge as to what claims benefit it than the judiciary.
Perhaps that is why Osseiran, when applying
Mendaro, refers to long-term goals, rather than
immediate litigating tactics.
But whether or not the Mendaro test would be
better described using a term different than “benefit,”
it is the Mendaro criteria we are obliged to apply.
Ironically, the line of cases applying Mendaro ended up
tying waiver to commercial transactions, so there is a
superficial similarity to the commercial activities test
that appellants would urge us to accept. But whatever
the scope of the commercial activities exception to
sovereign immunity, that standard is necessarily
broader than the Mendaro test; if that exception
applied to the IFC, the organization would never retain
3
Appellants argue that Mendaro impermissibly overruled our
earlier case, Lutcher S.A. Celulose e Papel v. Inter-American
Development Bank, 832 F.2d 454 (D.C. Cir. 1967), without an
intervening Supreme Court or en banc decision. Appellants rely
on dicta in Lutcher, but its holding was that the Inter-American
Development Bank waived immunity to a breach of contract suit
by a debtor. 382 F.2d at 456-68. Mendaro expressly considered the
rationale of Lutcher and declined to extend its holding to the suit
before it. 717 F.2d at 614-17. Indeed, the Mendaro test emerged in
part from Lutcher’s discussion that the charter language at issue
indicated waiver where “vulnerability to suit contributes to the
effectiveness of the [organization’s] operations.” Lutcher, 382 F.2d
at 456.
9a
immunity since its operations are solely “commercial,”
i.e., the IFC does not undertake any “sovereign”
activities.
The Mendaro test instead focused on identifying
those transactions where the other party would not
enter into negotiations or contract with the
organization absent waiver. See 717 F.2d at 617
(inferring waiver only insofar as “necessary to enable
the [organization] to fulfill its functions”). Mendaro
provided examples: suits by debtors, creditors,
bondholders, and “those other potential plaintiffs to
whom the [organization] would have to subject itself to
suit in order to achieve its chartered objectives.” Id. at
615.
We have stretched that concept to include a claim
of promissory estoppel, see Osseiran, 552 F.3d at 840-
41, and a quasi-contract claim of unjust enrichment,
see Vila v. Inter-Am. Invest. Corp., 570 F.3d 274, 278-
80 (D.C. Cir. 2009). But all the claims we have
accepted have grown out of business relations with
outside companies (or an outside individual engaged
directly in negotiations with the organization).4
Compare Lutcher S.A. Celulose e Papel v. Inter-Am.
Dev. Bank, 382 F.2d 454 (D.C. Cir. 1967) (finding
4
Appellants do present a third party beneficiary claim,
which, unlike their other claims, sounds in principles of contract
law. We have previously found the distinction between contract
and noncontract claims relevant. See Vila 570 F.3d at 280 n.3.
But even if appellants qualified as third party beneficiaries, a
point we do not address, they were not a necessary negotiating
party. Accordingly, inferring waiver in this case stands at odds
with the reasoning in Mendaro, i.e., that Mendaro implies waiver
when the parties negotiated with the background of international
organization immunity.
10a
waiver in debtors’ suit to enforce loan agreement) with
Mendaro, 717 F.2d at 611 (rejecting employee sexual
harassment and discrimination claim); Atkinson, 156
F.3d at 1336 (rejecting garnishment proceeding
against organization employee).
Appellants attempt to define “benefit” more
broadly. They argue that holding the IFC to the very
environmental and social conditions it put in the
contract, conditions which the IFC itself formulated,
would benefit the IFC’s goals. Even though appellants
had no commercial relationship with the IFC (other
than, allegedly, as third party beneficiaries of the loan
agreement’s requirements), they contend that the IFC
will benefit from their lawsuit because they are
attempting to hold the IFC to its stated mission and to
its own compliance processes. They argue that
obtaining “community support” is a required part of
any IFC project, and suggest that communities will be
unlikely to support IFC projects if the IFC is not
amenable to suit. Appellants’ ability to enforce the
requirement that the IFC protect surrounding
communities is as central to the IFC’s mission as a
commercial partner’s ability to enforce the requirement
that the IFC pay its electricity bill.
But Mendaro drew another distinction between
claims that survive and those that don’t. Those claims
that implicate internal operations of an international
organization are especially suspect because claims
arising out of core operations, not ancillary business
transactions, would threaten the policy discretion of
the organization. Accord Vila, 570 F.3d at 286-89
(Williams, J., dissenting).
11a
That notion applies here. Should appellants’ suit
be permitted, every loan the IFC makes to fund
projects in developing countries could be the subject of
a suit in Washington.5 Appellee’s suggestion that the
floodgates would be open does not seem an
exaggeration. Finally, if the IFC’s internal compliance
report were to be used to buttress a claim against the
IFC, we would create a strong disincentive to
international organizations using an internal review
process. So even though appellants convince us that
the term “benefit” is something of a misnomer—its
claim in some sense can be thought of as a “benefit”—it
fails the Mendaro test.
Accordingly, the district court decision is affirmed.
So ordered.
5
We need not reach appellee’s alternative argument that this
case may be dismissed under the doctrine of forum non
conveniens.
12a
PILLARD, Circuit Judge, concurring: I agree that
Atkinson and Mendaro, which remain binding law in
this circuit, control this case. I write separately to note
that those decisions have left the law of international
organizations’ immunity in a perplexing state. I believe
both cases were wrongly decided, and our circuit may
wish to revisit them.
1. The International Organizations Immunities Act
(IOIA), Pub L. No. 79-291, 59 Stat. 669 (1945) (codified
at 22 U.S.C. § 288 et seq.), grants international
organizations the same immunity “as is enjoyed by
foreign governments.” Id. § 2(b). When Congress
enacted the IOIA in 1945, foreign states enjoyed
“virtually absolute immunity,” so long as the State
Department requested immunity on their behalf.
Verlinden B.V. v. Central Bank of Nigeria, 461 U.S.
480, 486 (1983). President Eisenhower designated the
IFC as entitled to immunity under the IOIA in 1956.
See Exec. Order No. 10,680, 21 Fed. Reg. 7,647 (Oct. 5,
1956). Congress and the courts have since recognized
that foreign governments’ immunity is more limited, as
described by the Foreign Sovereign Immunities Act. 28
U.S.C. §§ 1604-05; see Republic of Argentina v.
Weltover, 504 U.S. 607 (1992). We took a wrong turn in
Atkinson when we read the IOIA to grant
international organizations a static, absolute immunity
that is, by now, not at all the same “as is enjoyed by
foreign governments,” but substantially broader.
When a statute incorporates existing law by
reference, the incorporation is generally treated as
dynamic, not static: As the incorporated law develops,
its role in the referring statute keeps up. Atkinson
itself correctly acknowledged that a “statute [that]
refers to a subject generally adopts the law on the
13a
subject,” including “all the amendments and
modifications of the law subsequent to the time the
reference statute was enacted.” Atkinson v. Inter-
American Development Bank, 156 F.3d 1335, 1340
(D.C. Cir. 1998) (emphasis omitted); see El Encanto,
Inc. v. Hatch Chile Co., 825 F.3d 1161, 1164 (10th Cir.
2016).
The IOIA references foreign sovereign immunity,
but in Atkinson we did not apply the familiar rule of
dynamic incorporation because we thought another
IOIA provision showed that Congress intended that
reference to be static. Section 1 of the IOIA authorizes
the President to “withhold or withdraw from any such
[international] organization or its officers or employees
any of the privileges, exemptions, and immunities
provided for” by the IOIA. IOIA § 1. We read that
language to mean that Congress intended the
President alone to have the ability, going forward, to
adjust international organizations’ immunity from
where it stood as of the IOIA’s enactment in 1945.
Atkinson, 156 F.3d at 1341. That presidential power
was, we thought, exclusive of any shift in international
organizations’ immunity that might be wrought by
developments in the law of foreign sovereign immunity
to which the IOIA refers.
Correctly read, however, section 1 merely
empowers the President to make organization- and
function-specific exemptions from otherwise-applicable
immunity rules. It says that the President may
“withhold or withdraw from any such organization”—
note the singular—“or its officers or employees any of
the privileges, exemptions, and immunities” otherwise
provided for by the IOIA. IOIA § 1 (emphasis added).
Section 1 thus empowers the President to roll back an
14a
international organization’s immunity on an
organization-specific basis. See, e.g., Elizabeth R.
Wilcox, Digest of United States Practice in
International Law 405 (2009) (describing President
Reagan’s 1983 exercise of section 1 authority to
withhold immunity from INTERPOL, followed by
President Obama’s 2009 restoration of the immunity
after INTERPOL opened a liaison office in New York).
Nothing about section 1 suggests that Congress framed
or intended it to be the exclusive means by which an
international organization’s immunity might be
determined to be less than absolute.
The inference we drew from section 1 in Atkinson
seems particularly strained because it assumes that
Congress chose an indirect and obscure route to
freezing international organizations’ immunity over a
direct and obvious one. If Congress intended to grant
international organizations an unchanging absolute
immunity (subject only to presidential power to
recognize organization-specific exceptions) it could
have simply said so. It might have expressly tied
international organizations’ immunity to that enjoyed
by foreign governments as of the date of enactment.
Or, even better, it might have avoided cross-reference
altogether by stating that international organizations’
immunity is absolute. As it happens, the original
House version of the IOIA did just that, providing
international organizations “immunity from suit and
every form of judicial process.” H.R. 4489, 79th Cong.
(as introduced, Oct. 24, 1945; referred to H. Comm. on
Ways and Means), but the Senate rejected that as “a
little too broad,” 91 Cong. Rec. 12,531 (1945), even as it
retained the absolute immunity language in provisions
granting the property of international organizations
15a
immunity from search, confiscation and taxation. See
IOIA §§ 2(c), 6. In lieu of the House version’s broad
language, the Senate adopted the current formulation
of section 2(b), which provides international
organizations the “same immunity . . . as is enjoyed by
foreign governments.” H.R. 4489, 79th Cong. (as
reported by S. Comm. on Finance, Dec. 18, 1945).
The considered view of the Department of State,
harking back to before Atkinson, is that the immunity
of international organizations under the IOIA was not
frozen as of 1945, but follows developments in the law
of foreign sovereign immunity under the FSIA. In a
1980 letter, then-Legal Adviser Roberts Owen opined
that, by “virtue of the FSIA, . . . international
organizations are now subject to the jurisdiction of our
courts in respect of their commercial activities.” Letter
from Roberts B. Owen, Legal Adviser, U.S.
Department of State, to Leroy D. Clark, General
Counsel, Equal Employment Opportunity Commission
(June 24, 1980), reprinted in Marian L. Nash,
Contemporary Practice of the United States Relating
to International Law, 74 Am. J. Int’l L. 917, 917-18
(1980). Although the State Department’s
interpretation of the IOIA is not binding on the court,
the Department’s involvement in the drafting of the
IOIA lends its view extra weight. See H.R. Rep. No. 79-
1203, at 7 (1945) (referring to the draft bill as
“prepared by the State Department”); see also Sosa v.
Alvarez-Machain, 542 U.S. 692, 733 n.21 (2004) (citing
a letter of the State Department’s Legal Adviser and
encouraging courts to “give serious weight to the
Executive Branch’s view” in cases that may affect
foreign policy).
16a
Reading the IOIA to dynamically link
organizations’ immunity to that of their member states
makes sense. The contrary view we adopted in
Atkinson appears to allow states, subject to suit under
the commercial activity exception of the FSIA, to carry
on commercial activities with immunity through
international organizations. Thus, the Canadian
government is subject to suit in United States courts
for disputes arising from its commercial activities here,
but the Great Lakes Fishery Commission—of which
the United States and Canada are the sole members—
is immune from suit under Atkinson. See Exec. Order
No. 11,059, 27 Fed. Reg. 10,405 (Oct. 23, 1962); see
also Convention on Great Lakes Fisheries, Can.-U.S.,
Sept. 10, 1954, 6 U.S.T. 2836. Neither the IOIA nor our
cases interpreting it explain why nations that
collectively breach contracts or otherwise act
unlawfully through organizations should enjoy
immunity in our courts when the same conduct would
not be immunized if directly committed by a nation
acting on its own.
Were I not bound by Atkinson, I would hold that
international organizations’ immunity under the IOIA
is the same as the immunity enjoyed by foreign states.
Accord OSS Nokalva, Inc. v. European Space Agency,
617 F.3d 756, 762-64 (3d Cir. 2010) (declining to follow
Atkinson and holding that restricted immunity as
codified in the FSIA, including its commercial activity
exception, applies to international organizations under
the IOIA).
2. Atkinson’s error is compounded in certain suits
involving waiver under the Mendaro doctrine. In
Mendaro v. World Bank, we decided that courts should
pare back an international organization’s apparent
17a
waiver of immunity from suit whenever we believe the
waiver would yield no “corresponding benefit” to the
organization. 717 F.2d 610, 617 (D.C. Cir. 1983); see
Osserian v. Int’l Fin. Corp., 552 F.3d 836, 840 (D.C.
Cir. 2009) (holding organization’s facially broad waiver
of immunity effective only as to types of plaintiffs and
claims that “would benefit the organization over the
long term”). That doctrine lacks a sound legal
foundation and is awkward to apply; were I not bound
by precedent, I would reject it.
It is undisputed that IOIA immunity may be
waived, 22 U.S.C. § 288a(b), and the majority
recognizes that the IFC’s charter “would seem to
include a categorical waiver.” Maj. Op. 6-7 & n.2; see
IFC Articles of Agreement art. 6, § 3, May 25, 1955, 7
U.S.T. 2197, 264 U.N.T.S. 118. Half a century ago, we
read the Agreement establishing the Inter-American
Development Bank (IADB) to effectuate a broad waiver
of the Bank’s immunity. See Lutcher S. A. Celulose e
Papel v. Inter-American Development Bank, 382 F.2d
454, 457 (D.C. Cir. 1967) (Burger, J.). The IFC’s
Articles of Agreement, which use the same waiver
language as did the IADB in Lutcher, would appear to
waive the IFC’s immunity here. Under the reasoning of
Lutcher, the IFC, like the IADB in that case, may be
sued in United States court.
But Lutcher was not our last word. As just noted,
we decided in Mendaro to honor an international
organization’s “facially broad waiver of immunity” only
insofar as doing so provided a “corresponding benefit”
to the organization. 717 F.2d at 613, 617. We thought
it appropriate to look to the “interrelationship between
the functions” of the international organization and
“the underlying purposes of international immunities”
18a
to cabin a charter document’s immunity waiver. Id. at
615. The member states, we opined in Mendaro, “could
only have intended to waive the Bank’s immunity from
suits by its debtors, creditors, bondholders, and those
other potential plaintiffs to whom the Bank would
have to subject itself to suit in order to achieve its
chartered objectives.” Id. We decided the waiver did
not apply to the claim of Mendaro, a former Bank
employee challenging her termination, because
recognizing employment claims had no “corresponding
benefit” for the Bank. Id. at 612-14.
We saw Mendaro as distinguishable from Lutcher.
Allowing the debtor’s claims in Lutcher “would directly
aid the Bank in attracting responsible borrowers,”
whereas complying with the law governing the Bank’s
“internal operations” in Mendaro would not
“appreciably advance the Bank’s ability to perform its
functions.” Id. at 618-20 (emphasis omitted). In other
words, Mendaro assumes that business counterparties
will be unwilling to transact with an international
organization if they lack judicial recourse against it,
but that making employees’ legal rights unenforceable
against such an organization will not affect their
willingness to work there. We thus held that a facially
broad waiver of an organization’s immunity should be
read not to allow employee claims.
The “corresponding benefit” doctrine calls on courts
to second-guess international organizations’ own
waiver decisions and to treat a waiver as inapplicable
unless it would bring the organization a
“corresponding benefit”—presumably one offsetting the
burden of amenability to suit. The majority
acknowledges that “it is a bit strange” that Mendaro
calls on the judiciary to re-determine an international
19a
organization’s own waiver calculus. Slip Op. at 8. I
agree that the organization itself is in a better position
than we are to know what is in its institutional
interests. But, whereas my colleagues point to the fact
that “the cases come to us when the organizations deny
the claim,” id., I would be inclined to think that
organizations’ assessments of their own long-term
goals are more reliably reflected in their charters and
policies—here, in the broad waiver included in IFC’s
Articles of Agreement—than in their litigation
positions defending against pending claims.
It is not entirely clear why we have drawn the
particular line we have pursuant to Mendaro. Why are
suits by a consultant, a potential investor, and a
corporate borrower in an international organization’s
interest, but suits by employees and their dependents
not? Compare, e.g., Vila v. Inter-American Investment,
Corp., 570 F.3d 274, 276, 279-82 (D.C. Cir. 2009)
(permitting suit by a consultant); Osseiran, 552 F.3d at
840-41 (permitting suit by a potential investor);
Lutcher, 382 F.2d at 459-60 (permitting suit by a
corporate borrower), with, e.g., Atkinson, 156 F.3d at
1338-39 (barring suit by a former wife seeking
garnishment of former husband’s wages); Mendaro,
717 F.2d at 618-19 (barring suit by a terminated
employee asserting a sex harassment and
discrimination claim).
Our cases seem to construe charter-document
immunity waivers to allow suits only by commercial
parties likely to be repeat players, or by parties with
substantial bargaining power. But the opposite would
make more sense: Entities doing regular business with
international organizations can write waivers of
immunity into their contracts with the organizations.
20a
See, e.g., OSS Nokalva, 617 F.3d at 759 (contract
clause authorizing software developer to sue European
Space Agency in state and federal courts in New
Jersey). Sophisticated commercial actors that fail to
bargain for such terms are surely less entitled to
benefit from broad immunity waivers than victims of
torts or takings who lacked any bargaining
opportunity, or unsophisticated parties unlikely to
anticipate and bargain around an immunity bar.
The IFC successfully argued here that it would
enjoy no “corresponding benefit” from immunity
waiver. The local entities and residents that brought
this suit contend that giving effect here to the IFC’s
waiver would advance the Corporation’s organizational
goals. The “IFC requires ‘broad community support’
before funding projects” like the Tata Mundra power
plant, and “local communities may hesitate to host a
high-risk project,” the appellants contend, “if they
know that the IFC can ignore its own promises and
standards and they will have no recourse.” Appellants
Br. at 48-49. Without directly addressing the benefits
of legal accountability to the communities it seeks to
serve, the IFC contends that treating the waiver in its
Articles of Agreement as effective here would open a
floodgate of litigation in United States courts. That
argument has it backwards: The IFC persuaded the
majority to stem a litigation flood it anticipates only
because the immunity waiver in the IFC’s own Articles
of Agreement opened the gate.
The perceived need for Mendaro’s odd approach
would not have arisen if we had, back in Atkinson,
read the IOIA to confer on international organizations
the same immunity as is enjoyed by foreign
governments—i.e. restrictive immunity that, today,
21a
would be governed by the FSIA. As the majority
observes, Slip Op. at 8, the cases in which we have
applied Mendaro to hold that claims are not immunity-
barred look remarkably like cases that would be
allowed to proceed under the FSIA’s commercial
activity exception. The activities we held to be non-
immunized—such as suits by “debtors, creditors, [and]
bondholders,” Mendaro, 717 F.2d at 615, “suits based
on commercial transactions with the outside world”
affecting an organization’s “ability to operate in the
marketplace,” Osseiran, 552 F.3d at 840, and unjust
enrichment claims by commercial lending specialists,
Vila, 570 F.3d at 276, 279-82—seem like just the kinds
of claims that would be permitted under the
commercial activity exception. We should have
achieved that result, not via Mendaro’s “corresponding
benefit” test, but by recognizing that the IOIA hitched
the scope of international organizations’ immunity to
that of foreign governments under the FSIA. There is a
time-tested body of law under the FSIA that delineates
its contours—including its commercial activity
exception. The pattern of decisions applying Mendaro
may approximate some of the results that would have
occurred had international organizations been subject
to the FSIA, but Mendaro begs other important
questions that assimilation of IOIA immunity to the
FSIA would resolve.
Our efforts to chart a separate course under the
IOIA were misguided from the start, and the doctrinal
tangle has only deepened in light of the amorphous
waiver-curbing doctrine that has developed under
Mendaro. I believe that the full court should revisit
both Atkinson and Mendaro in an appropriate case.
22a
But because those decisions remain binding precedent
in our circuit, I concur.
23a
APPENDIX B
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
MEMORANDUM OPINION
Located in a coastal region of Gujarat, India, the
coal-fired Tata Mundra Power Plant was constructed
in order to supply much-needed power for India’s
continued economic growth. But according to plaintiffs,
who live, fish, and farm in the shadow of the Plant, its
main legacy has been environmental and social harm—
to the marine ecosystem, to the quality of the air, to
plaintiffs’ health, and to their way of life. Plaintiffs
believe that the International Finance Corporation
(IFC), which provided $450 million for construction of
the Plant, is primarily responsible for their injuries.
They have sued IFC in this Court seeking several
forms of equitable relief or, in the alternative,
compensatory and punitive damages. IFC now moves
to dismiss on several grounds, most notably that it is
immune from this suit under the International
Organizations Immunities Act. Because the Court
agrees that IFC is immune from this suit, it will
24a
dismiss plaintiffs’ complaint in its entirety, without
reaching IFC’s other arguments.
BACKGROUND
IFC is an international organization with 184
member countries, including the United States and
India. Def.’s Mot. to Dismiss [ECF No. 10-1] at 3. As
described in its Articles of Agreement, IFC’s purpose is
“to further economic development by encouraging the
growth of productive private enterprise in member
countries.” Ex. 1 to Zeidan Decl. [ECF No. 10-8]
(Articles of Agreement) Art. I. To fulfill that purpose,
IFC may invest in privately run projects for which
“sufficient capital is not available on reasonable
terms.” Id. The project at the center of this case,
development of the Tata Mundra Power Plant, was
carried out by Coastal Gujarat Power Limited (CGPL),
a subsidiary of Tata Power, an Indian power company.
IFC loaned CGPL $450 million for the development of
the Plant. Total project cost was estimated to be $4.14
billion. Compl. [ECF No. 1] ¶¶ 56, 47.
Internal IFC policies demand careful attention to
the environmental and social impacts of IFC-financed
projects. IFC’s “Performance Standards on
Environmental and Social Sustainability” create a
framework for the assessment, avoidance,
minimization, and mitigation of environmental and
social risks. See Ex. 5 to Herz Decl. [ECF No. 22-5]
(2012 Performance Standards) at ¶¶ 1–8. “IFC will
only finance investment activities that are expected to
meet the requirements of the Performance Standards
within a reasonable period of time.” Ex. 2 to Herz Decl.
[ECF No. 22-5] (2012 Policy on Environmental and
Social Sustainability) ¶ 22. When IFC does invest in a
25a
project, the resulting loan agreement requires the
client to comply with the Performance Standards and
other related policies. See 2012 Policy on
Environmental and Social Sustainability ¶ 24. Thus,
“managing environmental and social risks and impacts
in a manner consistent with the Performance
Standards [becomes] the responsibility of the client.”
Id. ¶ 7. But IFC retains responsibility for monitoring
and supervising its clients’ efforts. Id. “If the client
fails to comply with its environmental and social
commitments,” then “IFC will work with the client to
bring it back into compliance.” Id. ¶ 24. “Persistent
delays in meeting [those commitments] can lead to loss
of financial support from IFC.” Id. ¶ 22.
From the earliest stages of its involvement, IFC
recognized that the development of the Plant entailed
significant—and possibly irreversible—environmental
and social risks. See Ex. 7 to Zeidan Decl. [ECF No. 10-
14] (Compliance Advisory Ombudsman Assessment
Report) at 4–5. Hence, before closing the deal on IFC’s
$450 million investment, IFC and CGPL developed an
Environmental and Social Action Plan in an attempt to
manage the risks they had identified. Compl. ¶¶ 49–
51. Ultimately, the Action Plan was incorporated into
the loan agreement, along with IFC’s Performance
Standards and other environmental guidelines. See Ex.
1 to Karim Decl. [ECF No. 10-5 & -6] (Schedule I to
Loan Agreement) at 91–92 (requiring CGPL to comply
with the “Environmental and Social Requirements”);
see also id. at 13–14 (defining “Environmental and
Social Requirements”).
Plaintiffs include fishermen and farmers who live
and work near the Plant, suing on behalf of themselves
and others similarly situated; a local trade union
26a
(MASS) dedicated to protection of fisherworkers’
rights; and the local government of a nearby village.
See Compl. ¶¶ 13–15. In plaintiffs’ view, CGPL and
IFC have failed to honor their commitments. They
point to a host of negative environmental and social
impacts allegedly caused by the operation of the Plant:
hot water from the cooling system has substantially
altered the marine environment, depressing the fish
catch near the shore; the water intake channel has
leaked saltwater into the groundwater, thereby
making it unsuitable for drinking or irrigation;
emissions have significantly degraded local air quality;
local fisherman and farmers have been displaced. See
Pls.’ Opp’n [ECF No. 22] at 3–5; see also Compl. ¶¶ 74–
115. Plaintiffs feel that, when these individual impacts
are considered in the aggregate, their “way of life [has
been] fundamentally threatened or destroyed by the
Tata Mundra Plant.” Compl. ¶ 6.
Plaintiffs blame IFC for the injuries they have
suffered. In their view, if IFC had “follow[ed] its own
policies and enforce[d] the conditions of the loan
agreement,” the negative environmental and social
impacts caused by the Plant could have been avoided,
minimized, or mitigated. Compl. ¶ 191; see id. ¶¶ 176–
92. Based on that conviction, plaintiffs filed a
complaint with IFC’s Compliance Advisor Ombudsman
(CAO). See Ex. 6 to Zeidan Decl. [ECF No. 10-13]. The
CAO is IFC’s “independent recourse and accountability
mechanism . . . for environmental and social concerns.”
Ex. 3 to Zeidan Decl. [ECF No. 10-10] (CAO
Operational Guidelines) at 4. But the CAO’s
compliance function is focused on IFC’s environmental
and social performance, not on the performance of
IFC’s clients. Id. at 22. CAO compliance investigations
27a
focus on whether IFC has “fail[ed] to address
environmental and/or social issues as part of [its]
review process,” and whether that failure has “resulted
in outcomes that are contrary to the desired effect of
the [IFC’s] policy provisions.” Id. at 24. The final
investigation report, which is made available on the
CAO’s website, will detail any identified policy
violations. Id. at 25. However, the CAO is not a court,
has “no authority with respect to judicial processes,”
and creates no “legal enforcement mechanism.” Id. at
4. Thus, the CAO cannot compel IFC to right its
wrongs, or to provide remedies to individuals who have
been harmed by IFC-financed projects.
Plaintiffs understand that well. The CAO
investigation into their complaint concluded that IFC
had failed adequately to consider the environmental
and social risks to which plaintiffs would be exposed as
a result of the Plant’s development. See Ex. 11 to
Zeidan Decl. [ECF No. 10-18] (CAO Audit Report) at 4.
In the CAO’s estimation, IFC then compounded that
error by failing to perform an environmental and social
impact assessment “commensurate with project risk,”
and by failing to “address [subsequent] compliance
issues during [project] supervision.” Id.; see also id. at
50–53 (summarizing the key compliance findings). IFC
responded with a letter challenging some of the CAO’s
conclusions, see Ex. 12 to Zeidan Decl. [ECF No. 10-
19], and with a statement laying out a ten-item action
plan to address any compliance shortcomings, see Ex.
13 to Zeidan Decl. [ECF No. 10-20]. But the CAO was
unimpressed. In a subsequent monitoring report, it
explained that “a number of its findings suggest the
need for a rapid, participatory and expressly remedial
approach to assessing and addressing project impacts
28a
raised by [plaintiffs].” Ex. 14 to Zeidan Decl. [ECF No.
10-21] at 5. In the eyes of the CAO, the action plan
proposed by IFC and CGPL fell short of that mark. Id.
The matter remains open for continued monitoring.
Def.’s Mot. to Dismiss at 7.
Seeking the relief they cannot obtain from the
CAO, plaintiffs have filed a complaint in this Court.
Their case is focused on “the irresponsible and
negligent conduct of the International Finance
Corporation in appraising, financing, advising,
supervising and monitoring its significant loan to
enable the development of the Tata Mundra Project in
Gujarat, India.” Compl. ¶ 2. That conduct, plaintiffs
contend, gives rise to valid claims for negligence,
negligent supervision, public nuisance, private
nuisance, trespass, and breach of contract. See id. ¶¶
294–332. As remedies, plaintiffs seek various forms of
injunctive relief running against IFC or, in the
alternative, compensatory and punitive damages. See
id. ¶¶ 333–45. IFC has responded with a motion to
dismiss. At the threshold, IFC believes plaintiffs’ suit
is barred by the International Organizations
Immunities Act (IOIA), 22 U.S.C. § 288 et seq.
Alternatively, IFC asks the Court to dismiss on
grounds of forum non conveniens or for failure to join
indispensable third parties. Finally, IFC argues that
some of the counts in plaintiffs’ complaint fail to state
a claim upon which relief can be granted. See Def.’s
Mot. to Dismiss at 1–2. As the Court agrees that IFC is
immune from plaintiffs’ suit, it will address only IFC’s
threshold immunity argument.
29a
LEGAL STANDARD
IFC’s immunity claim seeks dismissal for lack of
subject-matter jurisdiction under Federal Rule of Civil
Procedure 12(b)(1). As “[f]ederal courts are courts of
limited jurisdiction[,] . . . [i]t is to be presumed that a
cause lies outside this limited jurisdiction, and the
burden of establishing the contrary rests upon the
party asserting” it. Kokkonen v. Guardian Life Ins. Co.
of Am., 511 U.S. 375, 377 (1994) (citations omitted).
Thus, plaintiffs must establish jurisdiction by a
preponderance of the evidence. See Gordon v. Office of
the Architect of the Capitol, 750 F. Supp. 2d 82, 87
(D.D.C. 2010). In making this determination, “the
Court must accept as true all of the factual allegations
contained in the complaint,” but those allegations “will
bear closer scrutiny in resolving a 12(b)(1) motion than
in resolving a 12(b)(6) motion for failure to state a
claim.” Id. at 86–87 (internal quotation marks and
citations omitted).
DISCUSSION
“It is well established that statutes like the IOIA
that grant immunity to foreign nations and
international organizations limit the District Court’s
jurisdiction over parties that are entitled to such
protection.” Weinstock v. Asian Dev. Bank, 2005 WL
1902858, at *3 (D.D.C. July 13, 2005). “The
International Organizations Immunities Act applies to
those international organizations which the President
designates as entitled to [its] benefits . . . .” Osseiran v.
Int’l Finance Corp., 552 F.3d 836, 838 (D.C. Cir. 2009).
IFC is among those organizations that have been so
designated. Id. (citing Exec. Order No. 10,680, 21 Fed.
Reg. 7,647 (Oct. 2, 1956)). Under the IOIA, IFC
30a
generally “enjoy[s] the same immunity from suit and
every form of judicial process as is enjoyed by foreign
governments.” 22 U.S.C. § 288a(b). “When Congress
enacted the IOIA in 1945, foreign sovereigns enjoyed—
contingent only upon the State Department’s making
an immunity request to the court—‘virtually absolute
immunity.’” Atkinson v. Inter-Am. Dev. Bank, 156 F.3d
1335, 1340 (D.C. Cir. 1998) (quoting Verlinden B.V. v.
Cent. Bank of Nigeria, 461 U.S. 480, 486 (1983)). The
IOIA thus confers that same absolute immunity upon
international organizations like IFC. Id. at 1341.
Immunity may be waived, however, “for the purpose of
any proceedings or by the terms of any contract.” 22
U.S.C. § 288a(b).
IFC’s Articles of Agreement contain such a waiver
provision. Titled “Position of the Corporation with
Regard to Judicial Process,” it reads:
Actions may be brought against the
Corporation only in a court of competent
jurisdiction in the territories of a member in
which the Corporation has an office, has
appointed an agent for the purpose of accepting
service of process, or has issued or guaranteed
securities. No actions shall, however, be
brought by members or persons acting for or
deriving claims from members. The property
and assets of the Corporation shall,
wheresoever located and by whomsoever held,
be immune from all forms of seizure,
attachment or execution before the delivery of
final judgment against the Corporation.
31a
Articles of Agreement, Art. VI, § 3.1 Based on the broad
language of this waiver, one might conclude that IFC
retained immunity only from suits by its members. The
D.C. Circuit, however, has instructed courts to read
such waivers more narrowly, with careful attention to
“the interrelationship between the functions of the
[IFC] set forth in the Articles of Agreement and the
underlying purposes of international immunities.”
Mendaro v. World Bank, 717 F.2d 610, 615 (D.C. Cir.
1983).
“‘Since the purpose of the immunities accorded to
international organizations is to enable the
organizations to fulfill their functions, applying the
same rationale in reverse, it is likely that most
organizations would be unwilling to relinquish their
immunity without receiving a corresponding benefit
which would further the organization’s goals.’”
Atkinson, 156 F.3d at 1338 (quoting Mendaro, 717 F.2d
at 617). Waivers should be more broadly construed
only “when the waiver would arguably enable the
organization to pursue more effectively its institutional
goals.” Vila, 570 F.3d at 278–89 (internal quotation
marks omitted). On the other hand, “‘when the benefits
accruing to the organization as a result of the waiver
would be substantially outweighed by the burdens
caused by judicial scrutiny of the organization’s
discretion to select and administer its programs, it is
logically less probable that the organization actually
intended to waive its immunity.’” Id. at 279 (quoting
Mendaro, 717 F.2d at 617). The relevant question is
1
IFC’s waiver provision is identical to that of its parent
entity, the World Bank, Osseiran, 552 F.3d at 839, and nearly
identical to that of the Inter-American Investment Corporation,
Vila v. Inter-Am. Inv. Corp., 570 F.3d 274, 278 (D.C. Cir. 2009).
32a
thus “whether a waiver of immunity to allow this type
of suit, by this type of plaintiff, would benefit the
organization over the long term.” Osseiran, 552 F.3d at
840. Hence, immunity “should be construed as not
waived unless the particular type of suit would further
[IFC’s] objectives.” Atkinson, 156 F.3d at 1338.
As a general matter, “promises founded on good
faith alone are worth less than obligations enforceable
in court.” Osseiran, 552 F.3d at 187. International
organizations, which must often participate in the
marketplace in order to fulfill their chartered
functions, may therefore waive their immunity from
certain kinds of suits to enhance their credibility in
dealings with certain counterparties. The World Bank,
for example, waives its immunity for suits arising out
of its “commercial transactions with the outside world,”
brought by “its debtors, creditors, bondholders, and
those other potential plaintiffs to whom the Bank
would have to subject itself to suit in order to achieve
its chartered objectives.” Mendaro, 717 F.2d at 615,
618. IFC has waived immunity for a suit by a
prospective buyer of an IFC investment, who brought
promissory estoppel and breach of confidentiality
claims after the deal soured. Osseiran, 552 F.3d at
840–41. And the Inter-American Investment
Corporation was not immune from the unjust
enrichment claim of an independent consultant who
had provided advisory services to the organization
without being paid. Vila, 570 F.3d at 276–78.
Plaintiffs believe their suit fits comfortably within
this precedent. Because their suit arises from IFC’s
“external activities and relationships with host
communities,” and because IFC “could not function
without credible policies and promises” to those
33a
communities, plaintiffs argue that a waiver would
benefit IFC here. Pls.’ Opp’n at 22. But plaintiffs’
argument glosses over some material differences
between those waiver of immunity cases and this one.
International organizations have previously waived
immunity for suits brought by individual plaintiffs
with whom the organization had a direct commercial
relationship. Here, on the other hand, plaintiffs are a
would-be class of fishermen and farmers, and two
institutional plaintiffs that represent their interests—
none of whom have a commercial relationship with
IFC. See Compl. ¶¶ 6, 13–15. Nor is this the type of
suit for which waiver has previously been found. In
both Osseiran and Vila, the underlying claims invoked
principles of contract law. See Vila, 570 F.3d at 276.
Plaintiffs’ claims, however, sound primarily in tort. See
Compl. ¶¶ 294–324 (asserting claims for negligence,
negligent supervision, public nuisance, private
nuisance, and trespass); see also Banco de Seguros del
Estado v. Int’l Finance Corp., 2007 WL 2746808, at *5–
6 (S.D.N.Y. Sept. 20, 2007) (IFC did not waive
immunity for negligent supervision claim by third-
party). True, plaintiffs do bring one claim for breach of
contract. See Compl. ¶¶ 325–32. But it is a stretch to
characterize that claim, as plaintiffs attempt to do, as
one arising purely from IFC’s external activities.
Plaintiffs’ own complaint characterizes the suit as one
that “arises out of” IFC’s “irresponsible and negligent
conduct . . . in appraising, financing, advising,
supervising and monitoring its significant loan” to
CGPL. Id. ¶ 2. By focusing on IFC’s internal decision-
making processes, the suit invites—indeed, demands—
“judicial scrutiny of the [IFC’s] discretion to select and
administer its programs.” Vila, 570 F.3d at 279
(internal quotation marks omitted). Waiver of
34a
immunity is highly unlikely in such circumstances. See
Mendaro, 717 F.2d at 617.
Nonetheless, in assessing the claim that immunity
has been waived, the Court remains obliged to weigh
the benefits and costs that a waiver may entail. Vila,
570 F.3d at 281. On the cost side of the ledger, the
Court may appropriately consider the litigation costs
inherent in defending this type of suit. See Atkinson,
156 F.3d at 1339. In cases where the D.C. Circuit has
found a waiver, the organization has failed to come
forward with robust arguments about costs. See
Osseiran, 552 F.3d at 841 (“International Finance
identifies no unique countervailing costs . . . .”); Vila,
570 F.3d at 281 (The Inter-American Investment
Corporation “has not identified countervailing costs
that are distinguishable from the costs associated with
a claim for promissory estoppel.”). But here, IFC
argues that waiver would “produce a considerable
chilling effect on IFC’s capacity and willingness to lend
money in developing countries,” by opening “a
floodgate of lawsuits by allegedly aggrieved
complainants from all over the world.” Def.’s Reply
[ECF No. 23] at 9–10. Litigation of this kind, in other
words, would “open [IFC] to disruptive interference
with its lending policies.” Vila, 570 F.3d at 281
(internal quotation marks and brackets omitted). Since
this type of suit is aimed at IFC’s internal decision-
making process, the Court has little reason to doubt
IFC’s assessment of its concerns.
But plaintiffs take issue with IFC’s cost
contentions. IFC will only incur this cost, plaintiffs’
argument goes, if it persists in providing loans
“irrespective of the environmental and human toll.”
See Pls.’ Opp’n at 26. To avoid litigation, IFC can
35a
simply “choose projects and partners that follow IFC
policy and obey the law.” Id. at 27. If it fails to do so,
some suits may be filed. But because each of these
suits would seek only to encourage “IFC’s management
to do what the IFC already requires,” plaintiffs assert,
the suits would actually benefit IFC and further its
development goals. Id. at 26. Thus, in plaintiffs’ view,
the “costs” identified by IFC are not costs at all. Id.
Plaintiffs cannot so easily blur the boundaries
between cost and benefit. The D.C. Circuit has
identified “judicial scrutiny of the organization’s
discretion to select and administer its programs” as a
burden or cost, without regard to whether the
underlying litigation is meritorious or in some other
sense deserved. See Mendaro, 717 F.2d at 617. This
Court will not completely dismiss the possibility that a
waiver could provide some incentive for IFC to adhere
more scrupulously to its policies, over and above the
pressure already applied by the CAO. But that
marginal benefit must be weighed against the relevant
costs which, in suits like this by these kinds of
plaintiffs, remain quite substantial.
Plaintiffs also offer a more modest theory
regarding the benefits of waiver in cases where the
CAO has identified a compliance failure but IFC has
failed to deliver a remedy. See Pls.’ Opp’n at 25–26.
IFC-funded projects are likely to be more successful
when they garner support from local communities,
plaintiffs argue. If, however, IFC can breach its
environmental and social policies without providing
redress to those who are negatively impacted, that
support will be difficult to secure. Local communities
“may hesitate to do business with an entity insulated
from judicial process,” Vila, 570 F.3d at 279 (internal
36a
quotation marks omitted), and may instead decide to
“fight [IFC] projects tooth and nail,” Pls.’ Opp’n at 22.
Waiver of immunity, plaintiffs contend, is the solution
to this problem. By creating a legal avenue for the
redress of environmental and social harms, IFC can
credibly assuage any doubts that local communities
may harbor about hosting IFC-funded projects.2 See id.
at 21–26.
Although plaintiffs’ argument makes some
intuitive sense, it is ultimately insufficient to support a
finding of waiver here. As an initial matter, the Court
hesitates to extend the “credibility” theory upon which
plaintiffs rely outside the context of commercial
transactions, where it was initially developed and has
been exclusively applied. But even if the Court were to
stretch that theory to reach this case, plaintiffs would
not prevail. The preceding analysis has left plaintiffs
with a daunting task. To support a finding of waiver,
they must point to a benefit that would justify opening
the courthouse doors to a new type of plaintiff,
bringing a new and very broad type of suit, more costly
than those that have previously been allowed and
aimed squarely at IFC’s discretion to select and
administer its own projects. Plaintiffs’ benefit
argument simply cannot bear that substantial weight.
Immunity “should be construed as not waived unless
2
Plaintiffs also argue that waiver would help IFC maintain
the support of donor governments like the United States. See Pls.’
Opp’n at 24. But the United States government has adequate
tools at its disposal to make its view on IFC’s immunity known
directly—specifically, the “President retains authority to modify,
condition, limit, and even revoke the otherwise absolute immunity
of a designated organization,” Atkinson, 156 F.3d at 1341. In this
setting, the Court thinks it unwise to speculate as to the United
States government’s views on IFC’s immunity.
37a
the particular type of suit would further [IFC’s]
objectives.” Atkinson, 156 F.3d at 1338. Any “ties go to
the organization.” Vila, 570 F.3d at 286 (Williams, J.,
dissenting). In the Court’s view, for all the reasons
reviewed above, suits like plaintiffs’ are likely to
impose considerable costs upon IFC without providing
commensurate benefits. Hence, IFC has not waived its
immunity to this suit.
The Court can deal quickly with plaintiffs’
remaining arguments, which urge several changes to
the D.C. Circuit’s immunity jurisprudence. First,
plaintiffs believe Atkinson was incorrectly decided.
Citing the Third Circuit’s decision in OSS Nokalva,
Inc. v. European Space Agency, 617 F.3d 756 (3d Cir.
2010), plaintiffs argue that the IOIA was intended to
incorporate subsequent changes to the law of foreign
sovereign immunity (like the Foreign Sovereign
Immunities Act’s commercial activity exception),
rather than to preserve the understanding of foreign
sovereign immunity that prevailed in 1945. See Pls.’
Opp’n at 19–20. Plaintiffs also argue, citing several
FSIA decisions by the Supreme Court, that Atkinson
mischaracterized the pre-1945 law by holding that it
had provided absolute immunity for foreign sovereigns.
See id. at 14–19. Finally, they intend to argue on
appeal that Mendaro’s “corresponding benefit” test,
which structured the preceding analysis, “unduly
narrows the plain meaning of the IFC’s waiver.” Id. at
21 n.12.
But as plaintiffs recognize, this Court cannot
overturn Mendaro or Atkinson. Nor will it authorize an
end-run around Atkinson, which the D.C. Circuit said
less than two years ago “remains vigorous as Circuit
law.” Nyambal v. Int’l Monetary Fund, 772 F.3d 277,
38a
281 (D.C. Cir. 2014). This Court’s role is to apply
Circuit law, not to “reconsider” it. Cf. Steven Herz,
International Organizations in U.S. Courts:
Reconsidering the Anachronism of Absolute Immunity,
31 Suffolk Transnat’l L. Rev. 471 (2008) (making
plaintiffs’ arguments). Perhaps the D.C. Circuit will
adopt plaintiffs’ suggested approach to questions
concerning waivers of international organization
immunity. This Court, however, cannot do so. And
plaintiffs’ invitation to the Court to undertake such a
revision of controlling case law simply underscores the
conclusion that, under that precedent, plaintiffs’
waiver claim fails.
CONCLUSION
Because IFC has not waived its immunity from
this suit, its motion to dismiss will be granted, and
plaintiffs’ complaint will be dismissed in its entirety. A
separate Order has issued on this date.
/s/
JOHN D. BATES
United States District Judge