Carol Sachs v. Republic of Austria , 695 F.3d 1021 ( 2012 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
CAROL P. SACHS, 
Plaintiff-Appellant, No. 11-15458
v. D.C. No.
REPUBLIC OF AUSTRIA; OBB  3:08-cv-01840-
HOLDING GROUP; OBB VRW
PERSONENVERKEHR AG, OPINION
Defendants-Appellees.

Appeal from the United States District Court
for the Northern District of California
Vaughn R. Walker, District Judge, Presiding
Submitted June 13, 2012*
San Francisco, California
Filed September 26, 2012
Before: Ronald M. Gould, Richard C. Tallman, and
Carlos T. Bea, Circuit Judges.
Opinion by Judge Tallman;
Concurrence by Judge Bea;
Dissent by Judge Gould
*The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
11843
SACHS v. REPUBLIC OF AUSTRIA 11845
COUNSEL
Geoffrey Becker, Becker & Becker, Lafayette, California, for
appellant Carol P. Sachs.
11846 SACHS v. REPUBLIC OF AUSTRIA
Juan C. Basombrio, Dorsey & Whitney LLP, Costa Mesa,
California, for appellees OBB Personenverkehr, AG.
OPINION
TALLMAN, Circuit Judge, announcing the judgment of the
Court:
In this case we consider what acts may be attributed to a
foreign state in applying the commercial activity exception to
immunity under the Foreign Sovereign Immunities Act.
Carol Sachs sued Austrian-owned OBB Personenverkehr
after sustaining personal injuries as a result of her attempt to
board a moving train in Innsbruck. The district court ruled
that the commercial activity exception to the Foreign Sover-
eign Immunities Act did not apply and dismissed Sachs’s suit
for lack of subject matter jurisdiction. Sachs appeals the dis-
trict court’s order. We have jurisdiction under 28 U.S.C.
§ 1291 and we affirm.
I
In March 2007, Sachs purchased a Eurail pass in California
from Rail Pass Experts, a company based in Massachusetts.
A Eurail pass is a train ticket that allows passage on various
railways of the Eurail Group, an association of thirty-one
European railway transportation providers. Sachs’s pass per-
mitted travel in Austria and the Czech Republic. In April
Sachs traveled to Austria, where she intended to originate her
journey, and there purchased a sleeper upgrade to her ticket
at a local train station. A few days later, on April 27, 2007,
Sachs arrived at the Innsbruck train station and attempted to
board a moving train. She fell to the tracks through a gap in
the platform and suffered injuries that ultimately required the
amputation of both legs above the knee.
SACHS v. REPUBLIC OF AUSTRIA 11847
OBB Personenverkehr (“OBB”) is the Austrian national
railway. OBB Holding Group (“Holding Group”) owns 100%
of OBB’s stock. The Republic of Austria created Holding
Group under Austrian railway law, and the Republic’s Federal
Ministry of Transport, Innovation and Technology is the sole
shareholder of Holding Group. OBB is not required to pay
income or corporate tax and, through its parent Holding
Group, forwards all profits to the Austrian government.
The Eurail Group (“Eurail”) is an association organized
under Luxembourg law. OBB and thirty other European rail-
ways own Eurail. Eurail is a distinct legal entity and employs
its own management and employees. Eurail is tasked with,
among other things, the marketing and sale of Eurail passes.
Sachs filed a complaint in the Northern District of Califor-
nia against the Republic of Austria, Holding Group, and OBB.
She asserted claims of negligence, design defect, failure to
warn, and breach of the implied warranties of merchantability
and fitness, premising federal jurisdiction on diversity. Hold-
ing Group was not served and is not a party to this case. The
Republic of Austria and OBB moved to dismiss based on lack
of subject matter jurisdiction. Sachs did not oppose Austria’s
motion and the district court granted it. The district court at
first did not rule on OBB’s motion, instead calling for supple-
mental briefing on whether the actions of Rail Pass Experts
could be imputed to OBB. On January 28, 2011, the district
court granted OBB’s motion to dismiss after concluding that
OBB was immune from suit. This appeal followed.
II
[1] The “sole basis” by which courts in the United States
may obtain jurisdiction over foreign states is the Foreign Sov-
ereign Immunities Act (“FSIA”), 28 U.S.C. § 1602 et seq.
Argentine Republic v. Amerada Hess Shipping Corp., 488
U.S. 428, 434 (1989). Under the FSIA, foreign states are pre-
sumptively immune from suit in federal and state courts, sub-
11848 SACHS v. REPUBLIC OF AUSTRIA
ject to a number of exceptions. Embassy of the Arab Republic
of Egypt v. Lasheen, 603 F.3d 1166, 1169 (9th Cir. 2010); see
also 28 U.S.C. § 1604. These exceptions are found in 28
U.S.C. § 1605 and § 1607, Verlinden B.V. v. Cent. Bank of
Nigeria, 461 U.S. 480, 488 (1983), and “focus on actions
taken by or against a foreign sovereign.” In re Republic of
Phil., 309 F.3d 1143, 1150 (9th Cir. 2002). The exceptions
include actions in which the foreign state has waived its
immunity, 28 U.S.C. § 1605(a)(1), and actions involving the
foreign state’s successor interest in property located in the
United States, id. § 1605(a)(4). “The two most commonly
invoked exceptions to immunity, however, are those for com-
mercial acts and for tortious acts.” Wolf v. Fed. Republic of
Ger., 95 F.3d 536, 541 (7th Cir. 1996) (citing 28 U.S.C.
§§ 1605(a)(2) & (a)(5)).1
Sachs, as the party bringing suit against a foreign state,
must offer evidence that an exception to immunity applies.
See Joseph v. Office of Consulate Gen. of Nigeria, 830 F.2d
1018, 1021 (9th Cir. 1987). If she does so, OBB would bear
1
The commercial activity exception withdraws immunity from a foreign
state in any case
in which the action is based upon a commercial activity carried
on in the United States by the foreign state; or upon an act per-
formed in the United States in connection with a commercial
activity of the foreign state elsewhere; or upon an act outside the
territory of the United States in connection with a commercial
activity of the foreign state elsewhere and that act causes a direct
effect in the United States.
28 U.S.C. § 1605(a)(2). The tortious act exception, for its part, deprives
a foreign state of immunity in cases
not otherwise encompassed in paragraph (2) above, in which
money damages are sought against a foreign state for personal
injury or death, or damage to or loss of property, occurring in the
United States and caused by the tortious act or omission of that
foreign state or of any official or employee of that foreign state
while acting within the scope of his office or employment.
Id. § 1605(a)(5).
SACHS v. REPUBLIC OF AUSTRIA 11849
the burden of establishing by a preponderance of the evidence
that the exception does not apply. See id. We review de novo
a district court’s determination regarding sovereign immunity
under the FSIA. Corzo v. Banco Cent. de Reserva del Peru,
243 F.3d 519, 522 (9th Cir. 2001).
III
[2] The parties agree that the only exception relevant to
this appeal is the commercial activity exception, which
deprives foreign sovereigns of immunity in any case “in
which 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). There is no dispute that OBB, as an “agency or
instrumentality” of Austria, id. § 1603(a), constitutes a “for-
eign state” for the purposes of the FSIA.
Sachs’s argument for jurisdiction is scattershot but is prem-
ised upon the fact that the sale of the Eurail pass by Rail Pass
Experts is a commercial activity that should be imputed to
OBB. Both parties agree that the purchase of the Eurail pass
is the only commercial activity within the United States rele-
vant to this case. But OBB denies that it was commercial
activity by the state because any connection between Rail
Pass Experts and OBB is so attenuated.
A.
We previously grappled with the question of which acts
could be attributed to a foreign state under the FSIA in Doe
v. Holy See, 557 F.3d 1066 (9th Cir. 2009) (per curiam), cert.
denied, 130 S. Ct. 3497 (2010). John V. Doe, the plaintiff in
that case, brought vicarious liability claims, among others,
against the Holy See for the actions of its subordinates,
including the Archdiocese of Portland, Oregon (Archdiocese),
the Catholic Bishop of Chicago (Bishop), and the Order of the
Friar Servants (Order). Doe alleged that Father Ronan, a
member of the Order and priest in the Archdiocese, had sexu-
11850 SACHS v. REPUBLIC OF AUSTRIA
ally assaulted him when he was a teenager. Id. at 1069. The
district court held that the commercial activity exception to
immunity did not apply but that the tortious act exception did,
thus granting it jurisdiction. Id. at 1071. The Holy See coun-
tered that it retained immunity from suit because the acts of
the Archdiocese, the Bishop, and the Order could not properly
be imputed to it for jurisdiction purposes. Id. at 1076.
On appeal, we recognized that “in applying the jurisdic-
tional provisions of the FSIA, courts will routinely have to
decide whether a particular individual or corporation is an
agent of a foreign state.” Id. at 1079. We looked for guidance
in First National City Bank v. Banco para el Comercio Exte-
rior de Cuba (Bancec), 462 U.S. 611 (1983). In Bancec, the
Supreme Court considered the inverse situation from the one
we faced in Holy See—that is, when the actions of a foreign
state could be attributed to its subordinate. Id. at 620. The
Cuban government had established Bancec as an official
credit union, owned all of its stock, and supplied its capital.
Id. at 613-14. In 1960 Cuba nationalized all U.S. property in
the country, including banks. Citibank had previously issued
Bancec a letter of credit related to a sugar sale but, when Ban-
cec presented the letter for payment, Citibank paid the amount
sought less the value of its expropriated Cuban branches. Id.
at 614-15. Bancec then brought suit in federal district court
seeking to collect on the full value of the letter of credit and
Citibank counterclaimed. Id. at 615.
The Court considered whether Bancec was liable on Citi-
bank’s expropriation claim; jurisdiction was not at issue in the
case. Id. at 619-21. As we noted in Holy See, the Supreme
Court “recognized a presumption of ‘separate juridical sta-
tus’ ” for subordinates of foreign states. 557 F.3d at 1077(quoting Bancec, 462 U.S. at 624) (brackets omitted). The
Court clarified that this presumption will be negated only (1)
“where a corporate entity is so extensively controlled by its
owner that a relationship of principal and agent is created” or
(2) where recognizing the presumption “would work fraud or
SACHS v. REPUBLIC OF AUSTRIA 11851
injustice.” Bancec, 462 U.S. at 629 (internal quotation marks
omitted). Relying on the second, equitable prong, the Court
held Bancec liable because recognizing its separate status
would permit Cuba, the true beneficiary behind the by-then-
defunct bank, to enforce the bank’s claim against Citibank
while simultaneously avoiding jurisdiction on the creditor’s
counterclaim against the Cuban government. Id. at 630-32.
We expressly adopted this analysis in Holy See and
extended it to the jurisdiction phase of the FSIA, joining the
Fifth and D.C. Circuits in so doing. 557 F.3d at 1078-79(“Applying Bancec’s presumption—as well as the standard
for overcoming that presumption—at the outset of a suit as
well as at the merits phase makes good sense.”). Turning to
the facts of the case, we concluded that Doe’s allegations
were not sufficient under the Bancec standard to overcome
the presumption of the Holy See’s separate juridical status. Id.
at 1079. Doe did not allege the required “day-to-day, routine
involvement” by the Holy See in its subordinates’ operations
to establish the existence of a principal—agent relationship.
Id. (citing Flatow v. Islamic Republic of Iran, 308 F.3d 1065(9th Cir. 2002)). The fact that the Holy See created those enti-
ties and even regulated them was not enough. Id. at 1079-80.
Nor was jurisdiction proper under the equitable prong. “Doe
ha[d] not alleged that the Holy See . . . inappropriately used
the separate status of the corporations to its own benefit, as in
Bancec, or that the Holy See created the corporations for the
purpose of evading liability for its own wrongs.” Id. at 1080.
[3] The lay of the land after Holy See is thus considerably
clearer. In determining “which of the acts alleged in the com-
plaint may legitimately be attributed to the [foreign state] for
purposes of establishing jurisdiction [under the FSIA],” we
first must recognize that a foreign state has a presumption of
separate juridical status. Id. at 1076, 1079. That presumption
is overcome only if the complaint alleges “day-to-day, routine
involvement” of the foreign state in the individual or corpora-
11852 SACHS v. REPUBLIC OF AUSTRIA
tion’s affairs, see id. at 1079, or if maintaining the presump-
tion would “work fraud or injustice,” see id. at 1078-79.
B.
Sachs’s allegations do not withstand this scrutiny. Rail Pass
Experts’ sale of the Eurail pass cannot, under Holy See, be
imputed to OBB. Like John V. Doe, Sachs “does not allege
day-to-day, routine involvement of” OBB in Eurail Group,
much less Rail Pass Experts. See id. at 1079. She alleges that
Eurail Group is owned by and represents OBB and that Rail
Pass Experts was in turn an agent for Eurail Group. But these
facts fall far short of what the Bancec standard requires. In
Flatow v. Islamic Republic of Iran, for example, we applied
the Bancec standard at the merits phase to determine whether
the actions of a bank could be imputed to Iran. 308 F.3d at
1069, 1071. Despite the fact that Iran nationalized and fully
owned the bank, as well as proposed candidates for its board
of directors, we held that these allegations were insufficient
to negate the presumption of separate juridical status. Id. at
1071-74.
[4] The best Sachs can allege is that OBB, as a part-owner
along with thirty other owners, wielded some degree of con-
trol over Eurail Group and was aware that Eurail Group used
U.S. sales agents like Rail Pass Experts. But even these facts
are not nearly enough under Holy See. Sachs has nowhere
alleged that OBB was involved in Rail Pass Experts’ routine,
day-to-day operations, see Holy See, 557 F.3d at 1079; in fact,
it is not clear that OBB was even aware that Rail Pass Experts
existed. Nor is it alleged that OBB was involved in Eurail
Group’s affairs to this high degree. Eurail Group has its own
independent management. The connection between OBB and
Rail Pass Experts is not close enough under the first prong of
the Bancec standard to overcome the presumption of separate
juridical status and impute the sale of the Eurail pass to OBB.
[5] Nor would granting immunity to OBB “work fraud or
injustice,” Bancec’s second method for overcoming the pre-
SACHS v. REPUBLIC OF AUSTRIA 11853
sumption of separate juridical status. See id. at 1077-78 (quot-
ing Bancec, 462 U.S. at 629). It is undisputed that OBB itself
engages in no commercial activity in the United States, pre-
sumably in part to retain immunity from suit in American
courts. Any injustice that results is no greater than in the
mine-run of cases—jurisdiction over a foreign state is, after
all, ordinarily not available. See Verlinden, 461 U.S. at 488.
And this case is a far cry from Bancec, where Cuba, the real
beneficiary behind a defunct bank, wanted to collect on the
bank’s claim against Citibank but deny jurisdiction on Citi-
bank’s counterclaim against the Cuban government. Bancec,
462 U.S. at 631-33; see also Flatow, 308 F.3d at 1072(“[U]nlike in Bancec, [Bank Saderat Iran] is not attempting to
use a United States court to recover on a claim while at the
same time trying to avoid being the subject of an adversary
proceeding.”). There is no similar sleight of hand by OBB that
would trump the presumption of its separate juridical status.
See Holy See, 557 F.3d at 1079. OBB thus engaged in no
commercial activity within the United States that would strip
it of its immunity to suit.
C.
The concurrence and dissent argue that the above precedent
is not applicable to our case because in Holy See we consid-
ered the tortious act exception to immunity rather than the
commercial activity exception. This distinction was not mean-
ingful to our analysis in Holy See, nor should it be here.
Our opinion in Holy See contains expansive language
regarding its applicability to FSIA cases. After deciding that
the actions of the Archdiocese, the Order, and the Bishop
were not attributable to the Holy See, we concluded that the
plaintiff had “therefore not alleged sufficient facts to demon-
strate that any exception to sovereign immunity applies to that
cause of action.” Holy See, 557 F.3d at 1080 (emphasis
added). We also noted that “in applying the jurisdictional pro-
visions of the FSIA, courts will routinely have to decide
11854 SACHS v. REPUBLIC OF AUSTRIA
whether a particular individual or corporation is an agent of
a foreign state,” and that “Bancec provides a workable stan-
dard for deciding this question.” Id. at 1079. Nowhere did we
indicate that this holding should be cabined to the tortious act
exception and indeed such an interpretation would fly in the
face of a plain reading of this language.
The question of which acts of a corporation or an individual
may be imputed to the foreign state is preliminary to consider-
ation of individual exceptions to immunity, as we have previ-
ously recognized: “Before turning to the question of which, if
any, of the FSIA’s exceptions to immunity apply, we must
determine which of the acts alleged in the complaint may
legitimately be attributed to the Holy See for purposes of
establishing jurisdiction.” Id. at 1076. There is nothing ambig-
uous in this holding. If we had wanted to restrict our analysis
to the tortious act exception alone, we would have done so
explicitly instead of using such sweeping language.
Nor does any of the precedent we cited in Holy See evince
its exclusivity to the tortious act exception; if anything the
caselaw suggests the opposite. Holy See borrowed its attribu-
tion standard directly from Bancec. Id. at 1079-80. But the
Supreme Court in Bancec was not concerned with amenability
to suit—its analysis focused on what acts could be imputed to
the state for purposes of liability, which Holy See extended to
jurisdiction, id. at 1077-78—so there is no reason why its
standard would apply to one exception to immunity but not
the others.
Most tellingly, in Holy See we expressly aligned ourselves
with two other circuits that had extended this same Bancec
analysis to the jurisdiction phase and that did so under the
commercial activity exception. Id. at 1078; see also Trans-
america Leasing, Inc. v. La Republica de Venez., 200 F.3d
843, 847-48 (D.C. Cir. 2000); Arriba Ltd. v. Petroleos Mexi-
canos, 962 F.2d 528, 533-36 (5th Cir. 1992). That Holy See
involved the tortious act exception did not seem to matter
SACHS v. REPUBLIC OF AUSTRIA 11855
when we relied on these cases for support in adopting the
Bancec standard for the FSIA’s jurisdiction phase. Holy See,
557 F.3d at 1078 (“The Supreme Court in Bancec did not
have the opportunity to consider whether the actions of a cor-
poration may be attributed to the sovereign . . . for purposes
of determining whether jurisdiction over that sovereign exists.
We have not previously addressed that question either. At
least two other circuits, however, faced with such a scenario,
have applied Bancec’s substantive corporate law principles in
determining whether jurisdiction exists under the FSIA.”
(internal footnote omitted and italics removed)). By relying
on two circuits that applied Bancec in the context of the com-
mercial activity exception in a tortious act exception case,
Holy See stands for the proposition, at least implicitly, that
what immunity exception may or may not apply makes no dif-
ference to which actions of a corporation can be attributed to
the sovereign.
Out-of-circuit caselaw confirms that the Bancec standard is
applicable to the FSIA’s jurisdictional provisions regardless
of which exception is at issue. The standard is in no way
unique to tort cases. Both Transamerica Leasing, Inc. v. La
Republica de Venezuela, 200 F.3d at 847-54, and Arriba Ltd.
v. Petroleos Mexicanos, 962 F.2d at 533-36, extended Bancec
to the jurisdiction phase in cases involving the commercial
activity exception. Likewise the Northern District of Illinois,
citing our decision in Holy See, applied Bancec to this provi-
sion. In re Potash Antitrust Litig., 686 F. Supp. 2d 816, 821-
22 (N.D. Ill. 2010). Another district court decision extended
Bancec to a case involving § 1605(a)(3), the “takings” excep-
tion, an entirely different exception to immunity. Freund v.
Republic of Fr., 592 F. Supp. 2d 540, 558-59 (S.D.N.Y.
2008). The dissent provides no case, in fact, that suggests that
Bancec might apply to one of the FSIA’s jurisdictional provi-
sions but not to all. The absence of such authority is striking.
It is true, as the dissent notes, that we did not specifically
consider the commercial activity exception to immunity in
11856 SACHS v. REPUBLIC OF AUSTRIA
Holy See, 557 F.3d at 1076, but it is unclear why this fact
should make a difference in the present case. Our decision in
Holy See viewed the question of which exception to immunity
might apply as totally separate from the issue of which acts
were attributable to the foreign state. The structure of the
opinion supports this interpretation. The opinion has four sub-
headings in its “Analysis” section. The first two discuss the
standard of review and jurisdiction over the appeal. The third
is entitled “Determining Which Acts May Be Attributed to the
Holy See for Jurisdictional Purposes,” and in a fourth we
finally address the tortious act exception. If the standard for
determining which acts of a corporation were attributable to
the sovereign were unique to the tortious act exception, it
would have made sense to analyze them together. Yet in our
discussion of agency/attribution we did not once mention the
tortious act exception of § 1605(a)(5)—or any other exception
for that matter—which would be odd if we were anchoring
our analysis to the text of that statutory subsection alone.
Even if Holy See were only applicable to certain, but not
all, of the FSIA’s exceptions to immunity, the commercial
activity and tortious act exceptions are closely tethered by the
statutory text. “The tortious activity exception provides juris-
diction over tort actions not encompassed in the commercial
activity exception ‘in which money damages are sought
against a foreign state for . . . damage to or loss of property,
occurring in the United States and caused by the tortious act
or omission of that foreign state.’ ” Joseph, 830 F.2d at 1025(quoting § 1605(a)(5)) (alteration in original).
There is nothing in our opinion in Holy See to suggest that
we meant to restrict its applicability to the tortious act excep-
tion. Even assuming the decision is not directly controlling,
given the opinion’s language, precedent, and structure there is
no intelligible reason why we should not apply it in a closely
analogous case. The concurrence and dissent do not even
attempt to explain by what limiting factor Bancec would
SACHS v. REPUBLIC OF AUSTRIA 11857
apply to the tortious act exception and not the commercial
activity exception.
D.
Even were we to accept the suggestion that Holy See is not
controlling on this case, we reject Sachs’s and the dissent’s
contention that Barkanic v. General Administration of Civil
Aviation of the Peoples Republic of China, 822 F.2d 11 (2d
Cir. 1987), and Kirkham v. Société Air France, 429 F.3d 288(D.C. Cir. 2005), elucidate our task. In each of these cases the
court held that the commercial activity exception applied and
that the foreign state was not immune from suit. But agency
was undisputed in both Kirkham and Barkanic and thus nei-
ther squarely tackles the issue before us here: whether the acts
of a separate entity may be attributed to the sovereign.
In Barkanic, the decedents purchased tickets for an internal
Chinese flight on CAAC, the Chinese state airline, from a
U.S. travel agency, which the court stated was “an agent for
Pan American.” 822 F.2d at 12. CAAC and Pan Am entered
into a bilateral general sales agency agreement whereby
CAAC would act as general sales agent for Pan Am in China
and Pan Am would act as general sales agent for CAAC in the
United States. Id. CAAC maintained offices and employees in
New York and operated some flights out of U.S. cities. Id.The decedents’ flight crashed, killing them, and their estates
sued the airline. Id. The opinion focused on whether there was
a sufficient nexus between the crash and CAAC’s commercial
activity within the United States, but the court never explicitly
analyzed what qualified as “commercial activity carried on in
the United States by the foreign state.” 28 U.S.C.
§ 1605(a)(2); see Barkanic, 822 F.2d at 13.
Kirkham involved a woman who injured her foot at Orly
Airport in Paris, allegedly due to the negligence of an Air
France employee. 429 F.3d at 290. The plaintiff purchased her
tickets from a U.S. travel agency; her trip included a flight on
11858 SACHS v. REPUBLIC OF AUSTRIA
United Airlines from Washington, D.C., to Paris and, four
days later, a flight to Corsica on Air France. Id. The injury
occurred at the airport prior to her second flight. Id. Again the
court focused solely on whether the claim was based upon her
ticket purchase without considering commercial activity, id. at
291-92, in this case because “Air France concede[d] the ticket
sale constituted a commercial activity in the United States.”
Id. at 293.
The dissent interprets these cases to mean “that where a
foreign common carrier, operated by a sovereign entity, pur-
posefully sells tickets for use of the carrier’s services overseas
through a domestic sales agent, the ticket sale is commercial
activity which may be imputed to the foreign common carri-
er.” But this conclusion assumes the answer to the question
we are tasked with answering: whether Rail Pass Experts is an
agent of OBB at all. Agency was undisputed in Barkanic, 822
F.2d at 12, and Kirkham, 429 F.3d at 293, whereas here it is
hotly contested. It is not enough to simply note that attributing
the ticket sale to the airline went “without dispute between the
parties and without suggestion from either the Second Circuit
or the D.C. Circuit that to do so was inconsistent with the
FSIA’s commercial activity exception.” We do not know why
agency was undisputed and we should not speculate. But we
cannot allow counsel’s strategic decision to forego contesting
agency in Kirkham and Barkanic to foreclose OBB’s ability
to do so here.
IV
[6] It is the judgment of this Court that the district court
correctly dismissed this case for lack of subject matter juris-
diction.
AFFIRMED.
SACHS v. REPUBLIC OF AUSTRIA 11859
BEA, Circuit Judge, concurring in the judgment:
I concur in the majority’s holding that the district court cor-
rectly dismissed this case for lack of subject matter jurisdic-
tion. I write separately, however, because I agree with Judge
Gould that the definition of agency in Doe v. Holy See, 557
F.3d 1066 (9th Cir. 2009) — a case concerning the tortious
act exception to the Foreign Sovereign Immunities Act
(FSIA) — need not be extended to the question of agency in
cases concerning the commercial activity exception. This
court’s decision in Sun v. Taiwan, 201 F.3d 1105 (9th Cir.
2000) permits us to decide the case more narrowly, while
assuming arguendo that an agency relationship exists between
Rail Pass Experts (Experts), Eurail, and OBB Personen-
verkehr (OBB) which serves to impute the acts and omissions
of Experts to OBB. I would affirm the district court on the
basis that Sachs fails to allege facts sufficient to give rise to
jurisdiction under Sun.
The FSIA provides immunity to foreign states in any action
“in which the action is based upon a commercial activity car-
ried on in the United States by the foreign state; or upon an
act performed in the United States in connection with a com-
mercial activity of the foreign state elsewhere; or upon an act
outside the territory of the United States in connection with a
commercial activity of the foreign state elsewhere and that act
causes a direct effect in the United States. 28 U.S.C.
§ 1605(a)(2). Sachs bases her claim of subject matter jurisdic-
tion exclusively on the first clause of the commercial activity
exception, so the relevant question in this appeal is whether
her action “is based upon a commercial activity carried on in
the United States by the foreign state.”
In Sun, the Suns brought a wrongful death action against
the Taiwanese government, a foreign sovereign, after their
son drowned at a Taiwanese beach with claimed tricky tides,
while on a trip sponsored by the Taiwanese government and
advertised in the United States. 201 F.3d at 1106-07. This
11860 SACHS v. REPUBLIC OF AUSTRIA
court held that the FSIA barred the Suns’ tort claim because
the claim was not “based on” the marketing and ticket sales
for the tour, the commercial activity carried on by Taiwan in
the United States. Id. at 1109. The court held that the com-
mercial activity exception does not apply if (1) the claim
alleges negligence that occurred entirely in a foreign country,
or (2) the claim alleges failure to warn and not negligent mis-
representation. Id. at 1109-10 & n.2. To allege a negligent
misrepresentation claim that could confer jurisdiction, the
plaintiff must show a nexus between failure to warn and com-
mercial activity that occurred in the United States, id. at 1110,
for example, by alleging failure to warn on a ticket sold in the
United States or in a United States advertisement. Neither was
alleged in Sun, until the Suns changed their theory of the case
in their appellate brief. Id. The Sun panel noted this change,
and it remanded the case to the district court for consideration
of the Suns’ amended negligent misrepresentation claim
based on commercial activity which took place in the United
States. Id.Sachs does not allege facts sufficient to give rise to juris-
diction under Sun. Sachs’s first set of claims — that OBB Per-
sonenverkehr (OBB) negligently moved the train, provided an
unsafe place to board the rail car, failed to supervise boarding,
negligently failed to stop the train, and breached various war-
ranties — are all allegations of negligence that, for aught that
appears, occurred entirely in Austria. Although Sachs does
not state where these duties were violated, the only plausible
reading of her complaint is that such acts and omissions took
place in Austria. See Ashcroft v. Iqbal, 556 U.S. 662, 679
(2009) (reviewing courts must draw on common sense to
determine whether a claim for relief is “plausible”).
Sachs’s remaining claim is based on OBB’s alleged failure
to warn about the gap between the platform and the rail cars.
This claim is stated broadly enough to constitute a claim of
negligent misrepresentation, but the requisite nexus to an
alleged act or omission in the Untied States is lacking. The
SACHS v. REPUBLIC OF AUSTRIA 11861
court in Sun expressly distinguished a failure to warn claim
from a negligent misrepresentation claim, defining the latter
as an affirmative duty to disclose “known information con-
cerning prospective dangers.” 201 F.3d at 1110 n.2. Sachs’
complaint does not allege OBB negligently misrepresented its
services by breaching a duty to disclose knowledge of the
dangerous train platform conditions in the United States at the
point of sale of train tickets. Instead, she alleges that there
was commercial activity in the United States—OBB’s adver-
tising and sale of Eurail passes, both directly and through its
agents Eurail and Rail Pass Experts—and then separately
alleges that she should have been warned about the gap in the
platform. To qualify as a negligent misrepresentation claim
sufficient to confer jurisdiction under the FSIA under Sun,
Sachs’s complaint would have to allege that OBB should have
disclosed, on the ticket delivered in the United States, in their
advertisements broadcast in the United States, or in some
other manner in the United States, of the known dangers of
the gap. The facts as pleaded are insufficient to invoke juris-
diction under the FSIA.
I would deny Sachs leave to amend her complaint. As
noted above, the Sun court remanded that case to allow the
district court to review whether the Suns’ new claim of negli-
gent misrepresentation was based on commercial activity in
the United States because the Suns “changed their theory of
the case in their appellate briefs” from failure to warn in Tai-
wan, to negligent misrepresentation in the United States. 201
F.3d at 1110. Specifically, the Suns alleged they should have
been warned in the advertising done by the Taiwanese gov-
ernment in the United States of the known danger of the
treacherous tides at the Taiwanese beach. Id. Sachs, con-
versely, neither changes her theory of the case in her briefs on
file to allege negligent misrepresentation in the United States
of the dangerous train platform conditions in Austria, under
11862 SACHS v. REPUBLIC OF AUSTRIA
Sun, nor requests leave to amend for this purpose, despite
prior amendment, and multiple briefs filed in district court.1
GOULD, Circuit Judge, dissenting:
The majority decides that the sovereign immunity of OBB
Personenverkehr (“OBB”), a national railway of Austria,
defeats at the starting gate a domestic forum for a negligence
claim by a United States citizen who bought a Eurail pass in
the United States. Sachs, in California, bought a Eurail pass
from Rail Pass Experts, a Massachusetts-based sub-agent of
the Eurail Group. The Eurail Group markets and sells rail
passes worldwide, including within the United States. OBB is
a part-owner of the Eurail Group, and the OBB trains carry
Eurail customers in Austria. The Eurail pass permitted Sachs
to board an OBB train and to sit in an unoccupied seat. Sachs
was seriously injured while trying to board an OBB train in
Austria. I believe that, for purposes of sovereign immunity, a
sensible interpretation of the FSIA permits a domestic forum
in which Sachs may assert her negligence or other claims
against OBB, that our Ninth Circuit precedent does not pre-
vent this, and that we should follow the general approach of
other federal circuits that have decided in similar cases that
ticket sales by an agent in the United States invoked the com-
mercial activity exception to sovereign immunity in cases
involving common carriers.
1
Sachs did request leave to amend to plead facts that would show that
the actions of Rail Pass Experts should be imputed to OBB. Had she
requested leave to amend to allege that her claim is based on acts or omis-
sions in the United States, this would be a much harder case. However,
local rules require that a request for leave to amend must be accompanied
by the proposed pleading, and Sachs proposed no amendment that would
allege her claim is based on acts or omissions in the United States. N.D.
Cal. R. 10-1.
SACHS v. REPUBLIC OF AUSTRIA 11863
I do not believe that Doe v. Holy See, 557 F.3d 1066 (9th
Cir. 2009) controls the outcome of this appeal. In Holy See,
the district court concluded that the FSIA’s commercial activ-
ity exception to sovereign immunity did not apply to the Holy
See’s activity, and the district court dismissed Doe’s fraud
claims alleged under that exception. Id. at 1071. Instead, the
district court concluded that the Holy See’s activity fit within
the FSIA’s tortious activity exception to sovereign immunity,
and the district court denied the Holy See’s motion to dismiss
all of Doe’s remaining claims alleged under the tortious activ-
ity exception. Id.; see 28 U.S.C. § 1605(a)(2) (commercial
activity exception), (a)(5) (tortious activity exception).
The Holy See appealed that decision, and Doe cross-
appealed the district court’s order dismissing his fraud claim
alleged under the commercial activity exception. Holy See,
557 F.3d at 1071. We declined, however, to consider Doe’s
commercial activity-based appeal. Id. at 1074-75. We con-
cluded that we did not have jurisdiction because Doe’s appeal,
unlike the Holy See’s appeal, did not fall within the collateral
order exception to the final judgment rule, and “the tort
causes of action [that were relevant to the Holy See’s appeal
were] not inextricably intertwined with Doe’s other claims.”
Id. at 1075. We said:
In other words, here we would be asked to take up
the appeal from that grant and reverse the district
court’s determination; we would have to reach out
and engage in a lengthy disquisition on the commer-
cial activity exception to FSIA, which we neither
must nor should do. Thus, we will not consider
issues regarding the district court’s grant of immu-
nity under the commercial exception to the FSIA.
Id. at 1076 (emphasis added).
We went on to extend the presumption in favor of separate
juridical status at the liability phase, identified by the
11864 SACHS v. REPUBLIC OF AUSTRIA
Supreme Court in First National City Bank v. Banco Para El
Comercio Exterior de Cuba, 462 U.S. 611 (1983) (“Bancec”),
to the jurisdiction phase of the FSIA inquiry. Holy See, 557
F.3d at 1079. We did this even though in an earlier case we
explained that “[t]he enumerated exceptions to the FSIA pro-
vide the exclusive source of subject matter jurisdiction over
civil actions brought against foreign states” and that
“[q]uestions of liability are addressed by Bancec, which
examines the circumstances under which a foreign entity can
be held substantively liable for the foreign government’s
judgment debt.” Flatow v. Islamic Republic of Iran, 308 F.3d
1065 (9th Cir. 2002) (emphasis added).1
Because we did not expressly consider the commercial
activity exception in Holy See, it is not controlling. Because
both Bancec and Flatow deal with separate juridical status for
the purposes of liability, neither mandates the majority’s
approach to resolving this appeal. I would, instead, follow the
decisions of the Second Circuit in Barkanic v. General
Admininstration of Civil Aviation of People’s Republic of
China, 822 F.2d 11 (2d Cir. 1987) and of the D.C. Circuit in
Kirkham v. Société Air France, 429 F.3d 288 (D.C. Cir.
2005). The courts in Barkanic and Kirkham expressly consid-
ered the commercial activity exception to sovereign immunity
under the FSIA in the context of the sale of foreign common
1
Flatow also does not preclude a ruling in favor of Sachs because our
inquiry there, like the Court’s in Bancec, centered on the question of lia-
bility, and not jurisdiction, as permitted under the commercial activity
exception to sovereign immunity under the FSIA. See id. at 1069 (“The
distinction between liability and jurisdiction is crucial to our resolution of
this case.”). We declined to permit the appellant to levy against real prop-
erty owned by Bank Saderat Iran (“BSI”), a nationalized bank, in order to
satisfy a default judgment against the Republic of Iran. Id. at 1066. Rely-
ing on Bancec, we concluded that Flatow did not allege facts sufficient to
overcome Bancec’s presumption of separate juridical status at the liability
phase. Id. at 1074. In short, under the presumption of separate juridical
status for the purposes of liability, BSI could not be held liable for the
Republic of Iran’s obligation to Flatow.
SACHS v. REPUBLIC OF AUSTRIA 11865
carrier tickets in the United States by travel agents. Although
there are some distinctions of fact in those cases,2 I read them
to mean in substance that where a foreign common carrier,
operated by a sovereign entity, purposefully sells tickets for
use of the carrier’s services overseas through a domestic sales
agent, the ticket sale is commercial activity which may be
imputed to the foreign common carrier and is sufficient to
invoke the commercial activity exception to sovereign immu-
nity under § 1605(a)(2) of the FSIA.
Barkanic and Kirkham are consistent with the plain lan-
guage of the FSIA, which does not require the limitation to
jurisdiction under the commercial activity exception relied on
by the majority. Section 1605(a)(2) provides:
A foreign state shall not be immune from the juris-
diction of courts of the United States or of the States
in any case . . . in which the action is based upon a
commercial activity carried on in the United States
by the foreign state; or upon an act performed in the
United States in connection with a commercial activ-
ity of the foreign state elsewhere; or upon an act out-
2
In Kirkham, Kirkham bought an airline ticket from a travel agent in
Washington, D.C. for travel on Air France in Europe. Kirkham, 429 F.3d
at 290. Kirkham was injured in a Paris airport while changing planes, and
she sued Air France, whose majority shareholder is the Republic of
France. Id. In Barkanic, Barkanic bought a ticket to fly on CAAC, an
agent of the People’s Republic of China, from a Pan Am-affiliated travel
agent in Washington, D.C. Barkanic, 822 F.2d at 12. Pan Am and CAAC
had previously entered into an agency agreement in which Pan Am was
authorized to appoint travel agents to sell seats on CAAC flights. Id. Bar-
kanic was killed when his CAAC flight crashed in China, and his survi-
vors filed a wrongful death suit against CAAC. Id.In neither case was the issue of whether the commercial activity (i.e.,
the sale of the airline ticket in the U.S. by a travel agent) could be imputed
to the sovereign raised. Instead the sale of the ticket was attributed to both
foreign carriers without dispute between the parties and without sugges-
tion from either the Second Circuit or the D.C. Circuit that to do so was
inconsistent with the FSIA’s commercial activity exception.
11866 SACHS v. REPUBLIC OF AUSTRIA
side the territory of the United States in connection
with a commercial activity of the foreign state else-
where and that act causes a direct effect in the
United States.
28 U.S.C. § 1605(a)(2) (emphasis added). “Commercial activ-
ity” is defined as “either a regular course of commercial con-
duct or a particular commercial transaction or act,” id. at
§ 1603(d), and a “commercial activity carried on in the United
States by a foreign state” is defined as “commercial activity
carried on by such state and having substantial contact with
the United States.” Id. at § 1603(e). The legislative history
notes that Congress intended the commercial activity excep-
tion to apply to “a broad spectrum of endeavor, from an indi-
vidual commercial transaction or act to a regular course of
commercial conduct.” H.R. Rep. 94-1487 at 6614-15.
Here OBB is a member and part owner of Eurail which tar-
gets U.S. consumers, selling thousands of passes each year for
use on railways, including on OBB, throughout Europe upon
one purchase of a pass. That Eurail does this through sub-
agents like Rail Pass Experts3 in the United States does not
change that OBB, through Eurail, regularly engages in the
type of commercial activity in the United States that Congress
intended to defeat sovereign immunity under the FSIA.
Indeed, a primary purpose of the Eurail entity is to market and
sell in the United States and around the world Eurail passes
good only for passage on OBB and other European railways.
Stated another way, OBB knew that the Eurail entity, in
which it was part owner, would be marketing passes to people
like Sachs in the United States. It knew or should be charged
3
Before the district court, OBB argued that Rail Pass Experts is not an
authorized agent of OBB. OBB acknowledges, however, that OBB is a
member of the Eurail Group and that “Rail Pass Experts may be, presum-
ably, a subagent of a general sales agent accredited by The Eurail group
and, therefore, able to sell Eurail passes (likely at higher rates than those
available from Eurail directly).”
SACHS v. REPUBLIC OF AUSTRIA 11867
with constructive knowledge that Eurail would use sub-agents
like Rail Pass Experts to sell tickets to people like Sachs
within the United States. See Phaneuf v. Republic of Indone-
sia, 106 F.3d 302, 307-08 (9th Cir. 1997) (“Because a foreign
state acts through its agents, an agent’s deed which is based
on the actual authority of the foreign state constitutes activity
‘of the foreign state’ [for the purpose of the commercial activ-
ity exception].”). OBB has empowered its agent, the Eurail
Group, to sell passes good for travel on OBB trains, including
through sub-agents like Rail Pass Experts within the United
States. See id. Moreover, when a U.S. citizen buys a Eurail
pass in the United States for passage on OBB and other rail-
ways from an agent in the United States, and then is injured
through allegedly improper activity of the foreign railway car-
rier, like OBB in Europe, such a person should be able to have
a forum for suit within the United States so far as sovereign
immunity is concerned.
I also believe that Sachs’ action is sufficiently “based
upon” OBB’s commercial activity as is required by the FSIA.
28 U.S.C. § 1605(a)(2). In Saudi Arabia v. Nelson, 507 U.S.
349 (1993), the Supreme Court explained that within the con-
text of the FSIA, “the phrase [‘based upon’] is read most natu-
rally to mean those elements of a claim that, if proven, would
entitle a plaintiff to relief under his theory of the case.” Id. at
357. Indeed, “[t]he only reasonable reading of [‘based upon’]
calls for something more than a mere connection with, or rela-
tion to, commercial activity.” Id. at 358.
Here, Sachs’ first claim for relief is based on negligence.
She alleges that OBB, as a “common carrier for hire,”
breached its duty of care when Sachs was injured boarding the
OBB train in Innsbruck, Austria. This duty arose from the sale
of the ticket for passage on OBB trains, the commercial activ-
ity identified by Sachs. See Restatement (Third) of Torts
§ 40(b) (2012) (“Special relationships giving rise to the duty
[of reasonable care] . . . include a common carrier with its
passengers.”). Thus, the commercial activity, on which Sachs
11868 SACHS v. REPUBLIC OF AUSTRIA
argues that the commercial activity exception to sovereign
immunity should apply here is a necessary element (i.e.,
establishment of the duty of reasonable care) that, if proven,
would entitle Sachs to relief on a least some part of her action
against OBB. See Nelson, 507 U.S. at 358 n.4 (“We do not
mean to suggest that the first clause of § 1605(a)(2) necessar-
ily requires that each and every element of a claim be com-
mercial activity by a foreign state.”).
A judgment in favor of Sachs is also consistent with our
decision in Sun v. Taiwan, 201 F.3d 1105 (9th Cir. 2000). In
that case, we considered whether the appellants could bring a
wrongful death action against Taiwan under the commercial
activity exception to sovereign immunity under the FSIA after
their son drowned on a Taiwanese beach during a cultural tour
of that country. Before the district court, appellants only
alleged “a negligent failure to warn and failure to exercise
reasonable supervision.” Id. at 1109. We clarified that the
phrase “based upon . . . requires a nexus between the action
and the commercial activity.” Id. We then reasoned that
although Taiwan’s operation of the tour was commercial
activity within the meaning of the FSIA, id. at 1108-09, only
“administrative promotion and application management took
place in the United States.” Id. at 1110. Specifically, we said
that the basis for the Suns’ claims of negligent supervision
and failure to warn claims lay in the sovereign’s alleged con-
duct in Taiwan, on the Taiwanese beach, and had no nexus
with the admitted commercial activity in the United States;
namely the promotion and sales of tickets for the tour. Id.Because “[t]he only conduct relevant to the action was failure
to take reasonable care in allowing the students to swim and
failure to supervise them,” all of which took place in Taiwan,
we concluded that the Suns were unable to show a nexus
between the action and the commercial activity within the
United States.4 Id.4
The Suns then changed their theory of liability on appeal, arguing that
under California law, “Taiwan was under an affirmative duty to exercise
SACHS v. REPUBLIC OF AUSTRIA 11869
Here, by contrast, Sachs’ negligence action alleges that
OBB breached its common-carrier duty of reasonable care in
the operation of its trains, causing her physical harm. As
stated above, this duty originates in the commercial activity
that Sachs alleges, namely OBB’s sale of the train ticket,
through its participation in Eurail, which occurred in the
United States. I would conclude that there is a sufficient
nexus between Sachs’ action and the commercial activity.
Accord Barkanic, 822 F.2d at 13 (concluding that “there is a
sufficient nexus between the airplane crash and [the sale of
the airline ticket] carried on by [the sovereign] in this coun-
try”).
Because I believe (1) that the Eurail Group, through ticket
sales by its sub-agent Rail Pass Experts, engaged in commer-
cial activity within the United States, and that this activity is
fairly attributed to OBB as part-owner of Eurail, carrying its
customers in Austria, and (2) that there is a sufficient nexus
between that commercial activity and Sachs’ action because
the ticket sale gave rise to the common carrier duty of reason-
able care allegedly breached, I would hold that Sachs has
alleged facts sufficient to satisfy the commercial activity
exception to sovereign immunity under the FSIA. I respect-
fully dissent.
reasonable care by disclosing known information concerning prospective
dangers on the tour and by not misleading prospective participants,” while
promoting the tour in the United States. Id. We then remanded the case to
the district court “to review the Suns’ claim first in order to determine
whether, as currently cast, it is based on commercial activity that took
place in the United States.” Id.