OBB Personenverkehr AG v. Sachs

(1) Whether common law agency, the definitions in Foreign Sovereign Immunities Act, 28 USC 1602 (FSIA), or the factors set out in First National City Bank v. Banco Para el Comercio Exterior de Cuba should determine when an entity is an “agent” of a foreign state under the commercial-activity exception of FSIA; and (2) whether under the commercial-activity exception of the FSIA, a tort claim in connection with travel outside of the United States arises from allegedly tortuous conduct which occurred outside of the United States; or the from preceding sale of the ticket within the United States.

Respondent, a California resident, purchased a Eurail pass from an internet ticket seller based in Massachusetts. While in Austria, respondent’s legs were crushed, and had to be amputated after she fell between the tracks and was run over by a train. Respondent brings their case against Petitioner, OBB Personenverkehr AG (OBB) the passenger rail operator wholly owned by the Republic of Austria, under the commercial-activity exception to the Foreign Sovereign Immunities Act, 28 USC 1602 (FSIA).

The district court granted Petitioner’s motion to dismiss for lack of subject-matter jurisdiction, holding that as a foreign-state owned entity, Petitioner is immune under FSIA. Respondent appealed and the United States Court of Appeals for the Ninth Circuit reversed, holding that a foreign-state owned common carrier, such as Petitioner, conducts commercial-activity in the United States, and thus loses their immunity against claims in United States courts, when they sell tickets in the United States, even if those tickets are sold through a third party, as in this case.