Sovereign Immunity

• Author: International Law Group

[For the background facts in this case, see "Alien Tort Claims Act" above.] The Court also decides whether there is subject matter jurisdiction over the Myanmar Military and the Myanmar Oil company which launched the Yadana Pipeline Project. Under the Foreign Sovereign Immunities Act of 1976 (FSIA) [28 U.S.C. Sections 1330, 1602], the district court has jurisdiction over a civil action against a foreign state such as Myanmar (including its subdivisions and agencies) only if one of the FSIA exceptions applies.

Under 28 U.S.C. Section 1605(a)(2), for example, there are exceptions from sovereign immunity as to "an act performed in the United States in connection with a commercial activity of the foreign state elsewhere" or as to "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."

Under the first subdivision, a foreign state loses immunity if an act performed in the U.S. is an element of the plaintiff's claim against it. Here, the plaintiffs' allegations against the Military and the Oil company rest solely upon acts done by these state organizations within Myanmar. Any acts Unocal allegedly carried on in the U.S. (such as investment decisions and money transfers) are not elements of these claims.

Neither does the second subdivision apply. "The Supreme Court has held that 'a state engages in commercial activity ... where it exercises only those powers that can also be exercised by private citizens, as distinct from those powers peculiar to sovereigns.'

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