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Foreign Sovereign Immunity in Aviation Litigation

One clear trend in United States aviation litigation has been an increase in cases brought by foreign plaintiffs arising from overseas airplane crashes and incidents. Preparing and handling a foreign aviation case can prove extremely difficult for the unprepared attorney. There are numerous considerations to be accounted for in addition to those normally associated with domestic aviation cases. One of these considerations is the issue of foreign sovereign immunity–the principle that foreign governments and their agents and instrumentalities are presumptively immune from suit in the United States.

The Foreign Sovereign Immunities Act1 ("FSIA") provides the exclusive basis for obtaining jurisdiction over foreign governments in the United States. Since the FSIA provides immunity only to foreign governments, the first step is to determine whether the foreign airline or aviation manufacturer qualifies as a foreign government. Under the Act, a foreign corporation is considered to be an agent or instrumentality of a foreign state if the majority of the entity's shares or ownership interest is directly owned by a foreign state or one of its political subdivisions.2 Accordingly, a number of foreign air carriers claim status as foreign states because they are government-owned. If the defendant qualifies as a foreign state, it will be immune from suit in all U.S. courts unless one of the FSIA's enumerated exceptions applies. These three exceptions are (1) explicit or implied waiver3; (2) commercial activity performed in the United States or directly affecting the United States4; and (3) non-commercial tort claims in which monetary damages are sought for personal injury, death, or loss of property, occurring in the United States, caused by the tortious act of a foreign state, official, or employee.5

If one of these exceptions applies, then U.S. courts would have jurisdiction over the foreign state. Still, the government-owned foreign air carrier would have two advantages. First, the foreign entity may remove the plaintiff's entire action to federal court under 28 U.S.C. § 1330, which provides that "federal district courts have original jurisdiction as to any claim for relief in personam with respect to which the foreign state is not entitled to immunity . . . ." Second, the foreign entity would be granted immunity from a jury trial and entitled to a bench trial in federal court.

In recent years, some courts have shrunk the universe of foreign entities that may be immune from suit under the FSIA. In Dole Food Co. v. Patrickson, Israel invoked the FSIA because it owned a majority of the shares in the defendant Dead Sea Companies through intermediary corporations.6 The Supreme Court held that Israel's tiered ownership did not qualify the Dead Sea Companies as instrumentalities of a foreign state. Following the Supreme Court's decision in Dole Food, therefore, government ownership must be direct for an airline to qualify as a "foreign state." The relationship between the government and the airline cannot be more than one step removed. In Wong ex rel. Leung Yuen Man v. The Boeing Co., the plaintiff filed a negligence action in state court on behalf of the estates of two passengers who died in a crash of a Boeing-manufactured China Airlines aircraft.7 Boeing impleaded China Airlines as a third-party defendant, seeking indemnification in case Boeing was found liable. China Airlines removed the entire action to federal court pursuant to 28 U.S.C. § 1441(d), alleging foreign sovereign status under the §§ 1602-1611. The plaintiff filed a motion to remand the case to state court claiming China Airlines was not actually a foreign state as defined under the FSIA. The court agreed and granted Wong's motion to remand.

China Airlines is a private corporation entity, over 70% owned by the China Aviation Development Foundation ("CADF"). CADF is a non-profit foundation established under the Ministry of Transportation and Communications, which is a political subdivision of the People's Republic of China. CADF is a separate legal entity from the PRC, with the capacity to sue and be sued in its own name. CADF is, therefore, an agency or instrumentality of the government rather than a political subdivision of the government.8 Because China Air is majority owned by an agency or instrumentality, rather than by a political subdivision, it is a step too far removed from the government to quality as a foreign state under the FSIA. The court granted Wong's motion to remand to state court.

In contrast, the Eleventh Circuit held that Caribbean Airlines is a foreign state entitled to immunity in Singh ex rel. Singh v. Caribbean Airlines.9 In that case, a passenger brought an action in state court alleging negligence after he suffered a stroke on board a flight. Caribbean Airlines removed the matter to federal court and moved to strike the plaintiff's jury demand on the grounds that the airline qualified as a foreign state as defined in the FSIA. The Minister of Finance, a corporation sole who is responsible for all fiscal and financial matters of Trinidad and Tobago, owns 84% of the airline's stock. The district court performed a "core functions" test to determine if the Minister's activities were governmental or commercial in nature.10 Because the Minister's activities were governmental, the court determined that the Minister should be considered a political subdivision. Consequently, the court found that Caribbean Airlines qualified as an agency or instrumentality, due to its direct ownership by a political subdivision. As an agency or instrumentality, Caribbean Airlines was entitled to a bench trial rather than jury trial. The district court found that the airline had not acted negligently and entered judgment in its favor. On appeal, the Eleventh Circuit affirmed that Caribbean Airlines fell squarely into the category of "majority-owned subsidiaries of political subdivisions"11 that the Supreme Court defined in Dole Food.12 The Minister's interest in the airline does not render the airline an agency or instrumentality of the state, but by the plain language of the FSIA, majority-owned subsidiaries of political subdivisions are themselves entitled to foreign state status.13

These examples barely scratch the surface of an intricate and thorny undertaking. Trying a foreign aviation case is a complex and time-consuming challenge with vast room for mistake. None of the other traditional principles for trying a domestic aviation case are nullified–it is simply that in handling the foreign aviation plane crash case, counsel must be prepared to deal with additional issues requiring a great deal of time, money, and expertise. A petitioner is well served to consider this at the outset of representation, before millions of dollars are spent, to maximize the potential for success.


  1. 28 U.S.C. §§ 1330, 1391(f), 1441(d), 1602-11.
  2. 28 U.S.C. §1603(b)(2) (an agency or instrumentality of a foreign state means any entity which is an organ of a foreign state or political subdivision thereof, or a majority of whose shares or other ownership interest is owned by a foreign state or political subdivision thereof); see also Dole Food Co. v. Patrickson, 538 U.S. 468, 474-75 (2003) (stating that only direct ownership of a majority of shares by the foreign state satisfies the statutory requirement).
  3. 28 U.S.C. § 1605(a)(1)
  4. 28 U.S.C. § 1605(a)(2)
  5. 28 U.S.C. § 1605(a)(5). The non-commercial tort claims exception does not apply to tortious acts or omissions that occur outside of the United States. See Argentine Republic v. Amerada Hess Shipping Co., 488 U.S. 428, 441-2 (1989). It does not apply to claims related to performance or non-performance of discretionary functions. 28 U.S.C. § 1605(a)(5)(A); see also Fagot Rodriguez v. Republic of Costa Rica, 297 F.3d 1, 8 (1st Cir. 2002). It also does not apply to "any claim arising out of malicious prosecution, abuse of process, libel, slander, misrepresentation, deceit, or interference with contract rights." 28 U.S.C. § 1605(a)(5)(B).
  6. Dole Food Co. v. Patrickson,123 S. Ct. 1566, 1660 (2003).
  7. Wong, 2003 WL 22078379, at *1 (N.D. Ill. Sept 8, 2003).
  8. Id. at *7. See also First Nat'l City Bank Banco Para El Comercio Exterior de Cuba, 462 U.S. 611, 624-25 (1983) (finding that capacity to sue and be sued in its own name is a defining characteristic of an agency or instrumentality under § 1603 of the FSIA).
  9. See Singh ex rel. Singh v. Caribbean Airlines, 798 F.3d 1355 (11th Cir. 2015).
  10. Wong, WL 22078379, at *4. See also Segni v. Commercial Office of Spain, 650 F. Supp. 1040, 1041 (N.D. Ill. 1986).
  11. Singh, 798 F.3d at 1358.
  12. See also Filler v. Hanvit Bank, 378 F.3d213, 216-20 (2d Cir. 2004).
  13. See § 1603(b)(2) ("An 'agency or instrumentality of a foreign state' means any entity . . . a majority of whose shares or other ownership interest is owned by a foreign state or political subdivision thereof . . .").