February 27, 2019

Supreme Court Decides Jam v. International Finance Corp.

On February 27, 2019, the Supreme Court of the United States decided Jam v. International Finance Corp., No. 17-1011, holding that the International Organizations Immunities Act of 1945 grants international organizations the “same immunity” enjoyed by foreign governments today.

The International Organizations Immunities Act of 1945 (“the Act”) grants international organizations the “same immunity from suit . . . as is enjoyed by foreign governments.” 22 U.S.C. § 288a(b). In 1945, “foreign governments enjoyed virtually absolute immunity from suit.” Foreign governments today enjoy a much more limited immunity under the Foreign Sovereign Immunities Act. For example, a foreign government is presently subject to suit “in connection with its commercial activity that has a sufficient nexus with the United States.” (Citing 28 U.S.C. § 1605(a)(2).)

The International Finance Corporation is an international organization that finances private-sector projects in developing countries, including the construction of a coal power plant in Gujarat, India. That plant, however, was not constructed or operated in compliance with environmental and social action planning, and local farmers and fishermen and a nearby village affected by pollution from the plant sued the IFC in the United States District Court for the District of Columbia. The IFC defended based on the Act, arguing that as an international organization the IFC had the “same immunity” that foreign governments had in 1945. The Petitioners argued that the Act grants international organizations only the “same immunity” that foreign governments enjoy today and permits suits in connection with commercial activity with nexus with the United States.

Applying precedent from the D.C. Circuit, the District Court dismissed the claims, holding that the IFC was immune from suit because it enjoyed the same “virtually absolute” immunity foreign governments enjoyed at the time the International Organizations Immunities Act was enacted in 1945. The D.C. Circuit affirmed, adhering to its own precedent.

The Supreme Court reversed, holding that the Act grants international organizations like the IFC only the “same immunity” foreign governments enjoy today. The Court first noted that, in providing that international organizations have the “same immunity from suit . . . as is enjoyed by foreign governments,” the language of the Act seems to “continuously link” the immunities enjoyed by foreign governments and those enjoyed by international organizations.

The Court also looked to other statutes that contain similar “same as” provisions and noted that “federal and state courts commonly read them to mandate ongoing equal treatment of the two groups or objects.”

Third, the “reference” canon of statutory interpretation confirmed the Court’s reading of the Act. According to that canon, “when a statute refers to a general subject, the statute adopts the law on that subject as it exists whenever a question under the statute arises.” (Citing 2 J. Sutherland, Statutory Construction §§ 5207-5208 (3d ed. 1943).)

Finally, the Court noted that its reading of the Act was bolstered by the State Department’s longstanding opinion that the immunity rules for international organizations and foreign governments are “link[ed].” The Court explained that the State Department’s “views in this area ordinarily receive ‘special attention.’” (Quoting Bolivarian Republic of Venezuela v. Helmerich & Payne Int’l Drilling Co.¸ 581 U.S. __, __ (2017).)

The Court rejected the IFC’s contention that interpreting the Act as granting anything less than absolute immunity would have negative consequences. The Court’s interpretation would not defeat the purpose of granting international organizations immunity because immunity under the Act is only the default rule, and international organizations can, and have, set out broader immunity under their charters. The Court also expressed serious doubts about whether the IFC’s lending activity in Gujarat would even fall under the exception to immunity for “commercial activity that has a sufficient nexus with the United States.”

The Court also rejected the IFC’s argument that international organizations enjoy immunity for different reasons than foreign governments, and to link the immunities together would therefore frustrate those different purposes. The Court held that the IFC’s argument got “the inquiry backward” because courts ordinarily assume that “the legislative purpose is expressed by the ordinary meaning of the words used.” (Quoting American Tobacco Co. v. Patterson, 456 U.S. 63, 68 (1982).)

Chief Justice Roberts delivered the opinion of the Court, in which Justices Thomas, Ginsburg, Alito, Sotomayor, Kagan, and Gorsuch joined. Justice Breyer filed a dissenting opinion. Justice Kavanaugh took no part in the decision of the case.

Download the Opinion of the Court.
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