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CSG Attorney's 2010 Argument Lays Groundwork for Supreme Court Decision Limiting Sovereign Immunity of International Organizations Before U.S. Courts

March 22, 2019

On February 27, 2019, the U.S. Supreme Court issued its decision in Jam v. International Finance Corp., a case in which it was asked to rule on the extent of sovereign immunity enjoyed by international organizations before U.S. Courts – an issue that had long split federal courts of appeals.

In a 7-1 decision, the Court restricted international organizations’ immunity similarly to that of foreign states under the Foreign Sovereign Immunity Act (“FSIA”) – allowing them to be sued, subject to certain additional protections, for their commercial and nongovernmental actions. In reaching its decision in Jam, the Supreme Court partially relied on a 2010 Third Circuit decision in which Chiesa Shahinian & Giantomasi’s (“CSG”) Ronald L. Israel and Rhonda Carniol were involved.

OSS Nokalva Inc. v. European Space Agency

Nearly a decade prior to the U.S. Supreme Court’s Jam decision, CSG litigator Ronald L. Israel argued in OSS Nokalva Inc. v. European Space Agency on behalf of the plaintiff before the Third Circuit Court of Appeals.

OSS Nokalva (“OSSN”), a New Jersey-based software developer, had originally filed suit in the New Jersey Superior Court asserting a breach of contract against the European Space Agency (“ESA”), an organization headquartered in Germany founded to promote cooperation among European states in space research and technology.

Citing the International Organizations Immunities Act (“IOIA”), ESA removed the action to the U.S. District Court and moved to dismiss the complaint – contending that the Act granted it absolute immunity in U.S. courts – which was a typical, and generally successful, position taken by international organizations being sued in the U.S.

Once in the Third Circuit, Israel argued that the immunity conferred by IOIA should be interpreted as including changes in the immunity given to foreign states, including those under the FSIA. Because the dispute involved commercial activity, which is exempted from immunity under the FSIA, ESA was not entitled to absolute immunity.

With his argument, Israel effectively convinced the Court to disagree with 15 years of D.C. Circuit law interpreting the scope of immunity for international organizations engaged in commercial transactions, thus creating new international law in the Third Circuit.