The Burden of Proving Foreign Sovereign Immunity

 

“United States Supreme Court 2022 SCOTUS United States Capitol Building“

by Anthony Quintano is licensed under CC BY 2.0

The Supreme Court has granted cert in Republic of Hungary v. Simon and will soon hear oral argument, likely in December. The principal question is how to interpret “property exchanged for such property” under the Foreign Sovereign Immunities Act’s (FSIA) expropriation exception, 28 U.S.C. § 1605(a)(3). But the three issues before the Court also include important procedural questions. TLB will have more coverage of Simon in due course. In this post, I offer some preliminary thoughts on one of those procedural questions—who bears the ultimate burden of proof with respect to foreign sovereign immunity?

The House Report and the Courts of Appeals

The House Report on the FSIA has this to say on the question:

[The FSIA] starts from a premise of immunity and then creates exceptions to the general principle. The chapter is thus cast in a manner consistent with the way in which the law of sovereign immunity has developed. Stating the basic principle in terms of immunity may be of some advantage to foreign states in doubtful cases, but, since sovereign immunity is an affirmative defense which must be specially pleaded, the burden will remain on the foreign state to produce evidence in support of its claim of immunity. Thus, evidence must be produced to establish that a foreign state or one of its subdivisions, agencies or instrumentalities is the defendant in the suit and that the plaintiff’s claim relates to a public act of the foreign state—that is, an act not within the exceptions in sections 1605-1607. Once the foreign state has produced such prima facie evidence of immunity, the burden of going forward would shift to the plaintiff to produce evidence establishing that the foreign state is not entitled to immunity. The ultimate burden of proving immunity would rest with the foreign state. (Emphases added.)

Federal courts of appeals have relied on this legislative history to allocate the burdens of persuasion and proof in FSIA cases. Once a defendant produces prima facie evidence that it qualifies as a “foreign state,” the burden shifts to the plaintiff to show that an exception to immunity applies, at which point the burden shifts back to the defendant to prove that it is entitled to immunity by a preponderance of the evidence.

The Second, Third, Fourth, Fifth, Sixth, Seventh, Ninth, Tenth, Eleventh, and D.C. Circuits have all adopted this burden-shifting framework and have held that the ultimate burden of proving immunity rests with the foreign state. Hungary has not challenged this framework, acknowledging in its brief (p. 43) that “that the burden of persuasion remains with the sovereign defendant.”

The Solicitor General’s Argument

The United States’ amicus brief, on the other hand, argues that the existing framework is wrong and that the plaintiff must bear the ultimate burden of proving that an exception to immunity applies (pp. 30-33). This follows, the brief says, because Congress made foreign sovereign immunity a question of subject matter jurisdiction, and the burden of establishing that a federal court has subject matter jurisdiction always rests with the party asserting jurisdiction.

The U.S. amicus brief acknowledges that the House Report takes a different position. But the brief argues that legislative history cannot override the FSIA’s “explicit statutory language” making the existence of foreign sovereign immunity a bar to subject matter jurisdiction. The U.S. brief also claims that the Supreme Court repudiated the House Report’s description of foreign sovereign immunity as an affirmative defense in Verlinden B.V. v. Central Bank of Nigeria (1983).

A Few Doubts

The text of the FSIA says nothing about burdens of proof for sovereign immunity. The “explicit statutory language” to which the Solicitor General refers is the language of 28 U.S.C. § 1330(a), which says that “[t]he district courts shall have original jurisdiction without regard to amount in controversy of any nonjury civil action against a foreign state … as to any claim for relief in personam with respect to which the foreign state is not entitled to immunity.” The SG infers from this that plaintiffs bear the burden of proof because that is the usual rule for questions of subject matter jurisdiction.

With the FSIA, however, the inference is weak because we know that Congress tied sovereign immunity to subject matter jurisdiction for reasons having nothing to do with burdens of proof. Referring specifically to § 1330, the House Report explains that “broad jurisdiction in the Federal courts should be conducive to uniformity in decision, which is desirable since a disparate treatment of cases involving foreign governments may have adverse foreign relations consequences.” Although Congress did not prohibit state courts from hearing claims against foreign states, it did make cases against them removable.

Against this weak inference from § 1330(a), we have the House Report, which expressly states that “[t]he ultimate burden of proving immunity would rest with the foreign state.” The SG is wrong to assert that Verlinden rejected the House Report’s position on burdens of proof. Verlinden says in footnote 20 that, because foreign sovereign immunity is a question of subject matter jurisdiction, “even if the foreign state does not enter an appearance to assert an immunity defense, a District Court still must determine that immunity is unavailable under the Act.” To that extent, Verlinden rejects the proposition that “sovereign immunity is an affirmative defense.” But Verlinden says nothing about burdens of proof, and none of the ten circuits that have adopted the House Report’s burden-shifting framework have thought it inconsistent with Verlinden.

The SG’s argument by inference from § 1330(a) also fails with respect to claims in state courts because § 1330(a) does not grant subject matter jurisdiction to state courts. At least one state court has relied on the House Report to adopt the same burden-shifting framework as the federal Courts of Appeals. One cannot argue that this is inconsistent with § 1330(a). Section 1604 does address state courts, stating that “a foreign state shall be immune from the jurisdiction of the courts of the United States and of the States” unless one of the FSIA’s exceptions to immunity applies. But § 1604 refers to “jurisdiction,” not “subject matter jurisdiction,” and it is at least open to question whether Congress has authority to regulate the subject matter jurisdiction of state courts over non-federal claims.

Nor does international law require treating foreign sovereign immunity as a question of subject matter jurisdiction. International law does not dictate how its rules are enforced at a national level. Prior to adoption of the FSIA, the State Department generally treated foreign sovereign immunity as a question of personal jurisdiction. Some courts treated it as an affirmative defense. Tying foreign sovereign immunity to subject matter jurisdiction was an innovation of the FSIA, and (as explained above) Congress did this simply to make sure that federal courts would be able to hear cases against foreign states.

Conclusion

It seems to me that the U.S. amicus brief reads too much into the FSIA’s treatment of foreign sovereign immunity as subject matter jurisdiction. It is true that the burden to establish subject matter jurisdiction generally rests with plaintiffs. But the inference Congress intended the same for foreign sovereign immunity under the FSIA is weak because of what we know about the purpose of § 1330(a) and because the inference is contradicted by the legislative history.

Without this inference, the Solicitor General’s argument depends on a claim that Congress lacks the power to make something a question of subject matter jurisdiction and put the ultimate burden of proof on the defendant. That seems a dubious proposition because “it is for Congress to determine the subject-matter jurisdiction of federal courts.”