Sovereign Immunity

• Author: International Law Group

Yuka Kato works for the Tokyo Municipal Government (TMG) in Japan. After her transfer to TMG's New York office in 1998 as a standard rotation of employment, the TMG transferred her back to Japan in 2000. She returned later on to New York on medical leave. While there, she sued TMG and Shintaro Ishihara, the Governor of Tokyo (defendants) in federal court.

The complaint alleged sexual harassment and retaliation by defendants during her employment at TMG that breached Title VII of the Civil Rights Act of 1964 [42 U.S.C. Section 2000e], as well as New York State and local human rights laws. The district court later granted TMG's motion to dismiss plaintiff's complaint based on sovereign immunity under the Foreign Sovereign Immunities Act of 1976 (FSIA) [28 U.S.C. Section 1602ff]. Plaintiff then filed a timely appeal. The U.S. Court of Appeals for the Second Circuit, however, affirms.

The FSIA codifies the "restrictive theory" of sovereign immunity under which foreign sovereigns and their agencies and instrumentalities enjoy immunity subject to a few, enumerated exceptions. For example, sovereigns have no immunity from suits "based upon ... commercial activity carried on in the United States ..." 28 U.S.C. Section 1605(a)(2).

There is no dispute here that TMG and the Governor constitute a "foreign state" for purposes of the FSIA. The question then boils down to whether TMG's activities in New York were of a "commercial" nature. The Act, however, leaves it to the courts to apply the "commercial activity" exception to the facts of each case.

Plaintiff's job focused on promotional activities for TMG, such as working at TMG's booths at trade shows and doing...