Supreme Court Rules President has Authority to Waive FSIA State Sponsored Terrorism Exception for Iraq
On June 8, 2009, the Supreme Court issued its decision on Republic of Iraq v. Beaty, No. 07-1090, in a unanimous opinion delivered by Justice Scalia, holding that the Emergency Wartime Supplemental Appropriations Act (EWSAA) authorized the President to waive application of the Foreign Sovereign Immunities Act’s (FSIA) state-sponsored terrorism exception to Iraq.
Background of Beaty
In 2003, plaintiffs sued the Republic of Iraq in the District of Columbia for intentional infliction of emotional distress, alleging they had been tortured and taken hostage by Iraqi officials during the Gulf War.
Pursuant to the FSIA, sovereign foreign states are generally immune to such lawsuits in American courts. However, the FSIA allows for certain exceptions, including, at that time, stripping a state of its immunity if it has been designated as a sponsor of terrorism. Iraq was classified as such a sponsor in 1990. Following the American-lead invasion of Iraq in 2003, Congress enacted the EWSAA which authorizes the President to “make inapplicable” to Iraq “any provision of law that applies to countries that have supported terrorism.” President George W. Bush exercised this new authority by making the state-sponsored terrorism exception to the FSIA inapplicable to Iraq.
In 2004, the President’s authority to make such a declaration was challenged in Acree v. Republic of Iraq, 370 F.3d 41 (D.C. Cir. 2004). In Acree, the Court of Appeals held that the EWSAA did not authorize the president to waive the FSIA exception for state-sponsored terrorism and accordingly, reinstated Iraq as the subject of the lawsuit. In 2008, Congress simultaneously repealed the FSIA’s state-sponsored terrorism exception and replaced it with a new, similar exception in the National Defense Authorization Act (NDAA). As the President was again given the authority to waive the provision, he again declared that the state-sponsored terrorism exception to FSIA was inapplicable to Iraq.
In Beaty, Iraq contended that Acree was wrongly decided and alternatively, that the case against them should be dismissed based upon the President’s waiver of the provision in the NDAA. However, the Court of Appeals disagreed and held that the waiver signed by the President was not applicable to this case since the lawsuit was already pending at the time the waiver was signed in 2008. Iraq appealed to the Supreme Court.
The Beaty Decision
The Supreme Court disagreed with the interpretation of the EWSAA made by the Court of Appeals in Acree. While the Court could not say for certain that Congress intended that the President have the power to waive the FSIA exception for sponsors of terrorism, it concluded that Congress would have enumerated any limitations to the authority granted in the EWSAA if it intended for there to be any such limitations. Thus, when the President exercised his authority under the EWSAA for Iraq, the courts below lacked jurisdiction over the Beaty lawsuit. Because the Supreme Court determined that the courts below lacked jurisdiction, it declined to resolve Iraq’s alternative argument that they should be dismissed based upon the waiver signed by the President under the NDAA.
SmithAmundsen Experience with FSIA
It is critical that foreign entities understand the intricacies of the FSIA and its exceptions. Carmel Cosgrave, Jennifer Stuart, and Donna Fernandez were recently successful in a motion to dismiss for the Korean Broadcasting System (KBS) based upon FSIA principles. In that case, a lawsuit was brought against KBS, South Korea’s largest public broadcasting network, for injuries sustained by a viewer in the United States who attempted to imitate a demonstration he saw on the network. When foreign entities are well versed in the nuances of the FSIA, claims such as the one brought against KBS can be resolved at an early stage. If you have any questions regarding the FSIA or the impact of the FSIA on a potential claim, please contact Carmel Cosgrave at 312.894.3228 or ccosgrave@salawus.com or Eric Samore at 312.894.3251 or esamore@salawus.com.