The Supreme Court of the United States announced the following decision today:
OBB Personenverkehr AG v. Sachs, No. 13 1067: Respondent Carol Sachs, a California resident, purchased a Eurail Pass over the Internet from a Massachusetts-based travel agency. When she attempted to board the train at the station in Innsbruck, Austria, she fell onto the tracks and was severely injured. Sachs sued OBB Personenverkehr AG (“OBB”), which operates the Austrian railway, in the Northern District of California asserting negligence, strict liability, and breach of warranty claims. The Northern District of California dismissed the action under the Foreign Sovereign Immunities Act (“FSIA”), which renders “foreign states” such as OBB immune from suit unless one of the FSIA’s express exceptions to sovereign immunity apply. That court held that the commercial activity exception was inapplicable, which provides that a foreign state does not have immunity when “the action is based upon a commercial activity carried on in the United States by the foreign state.” 28 U.S.C. §1605(a)(2). The Ninth Circuit, sitting en banc, reversed, holding that the ticket sale by the travel agency constituted commercial activity in the United States by the foreign state, and that the suit was “based upon” that ticket sale because it was a necessary element of each of Sachs’s causes of action. The Supreme Court today reversed, unanimously affirming the rule from its prior decision in Saudi Arabia v. Nelson, 507 U.S. 349 (1993), that “an action is ‘based upon’ the ‘particular conduct’ that constitutes the ‘gravamen’ of the suit,” which here was conduct occurring in Austria.
Dorsey & Whitney LLP represented OBB at all stages of the litigation. Dorsey partner Juan Basombrio argued the case to the Supreme Court.
The Court's decision is available here.