The Supreme Court/The Supreme Court.iso/mac/wordperf/1991/91_522a/91_522a.zc

Text File | 1993-03-23 | 19KB | 319 lines

                       SUPREME COURT OF THE UNITED STATES

                                    --------
                                   No. 91-522
                                    --------

                      SAUDI ARABIA, KING FAISAL SPECIALIST
                      HOSPITAL AND ROYSPEC, PETITIONERS v.                                                       ___
                               SCOTT NELSON ET UX.

                       ON WRIT OF CERTIORARI TO THE UNITED
                    STATES COURT OF APPEALS FOR THE ELEVENTH
                                     CIRCUIT

                                [March 23, 1993]

  JUSTICE WHITE, with whom JUSTICE BLACKMUN joins, concurring in the judgment.

  According to respondents' complaint, Nelson's employer retaliated against him
for reporting safety problems by "summon[ing him] . . . to the hospital's
security office from which he was transported to a jail cell."  App. 5.  Once
there, he allegedly was "shackled, tortured and beaten by persons acting at the
direction, instigation, provocation, instruction or request of" petitioners -
Saudi Arabia, King Faisal Specialist Hospital, and Royspec.  Id., at 5, 14, 18.                                                              __
The majority concludes that petitioners enjoy sovereign immunity because
respondents' action is not "based upon a commercial activity."  I disagree.  I
nonetheless concur in the judgment because in my view the commercial conduct
upon which respondents base their complaint was not "carried on in the United
States."

                                        I

                                        A
  As the majority notes, the first step in the analysis is to identify the
conduct on which the action is based.  Respondents have pointed to two distinct
possibilities.  The first, seemingly pressed at trial and on appeal,                                  91-522 - CONCUR

2                            SAUDI ARABIA v. NELSON                                         ____

consists of the recruiting and hiring activity in the United States.  See Brief
for Appellant 12-15.  Although this conduct would undoubtedly qualify as
"commercial," I agree with the majority that it is "not the basis for the
Nelsons' suit," ante, at 8, for it is unrelated to the elements of respondents'                ____
complaint.
  In a partial change of course, respondents suggest to this Court both in their
brief and at oral argument that we focus on the hospital's commercial activity
in Saudi Arabia, its employment practices and disciplinary procedures.  Under
this view, the Court would then work its way back to the recruiting and hiring
activity in order to establish that the commercial conduct in fact had "sub-
stantial contact" with the United States.  See Brief for Respondents 22, 24-25,
31; Tr. of Oral Arg. 44-45.  The majority never reaches this second stage,
finding instead that petitioners' conduct is not commercial because it "is not
the sort of action by which private parties can engage in commerce."  Ante, at                                                                      ____
13.  If by that the majority means that it is not the manner in which private
parties ought to engage in commerce, I wholeheartedly agree.  That, however, is        _____
not the relevant inquiry.  Rather, the question we must ask is whether it is the
manner in which private parties at times do engage in commerce.                                         __

                                        B
  To run and operate a hospital, even a public hospital, is to engage in a
commercial enterprise.  The majority never concedes this point, but it does not
deny it either, and to my mind the matter is self-evident.  By the same token,
warning an employee when he blows the whistle and taking retaliatory action,
such as harassment, involuntary transfer, discharge, or other tortious behavior,
although not prototypical commercial acts, are certainly well within the bounds
of commercial activity.  The House and Senate Reports accompanying the
legislation virtually compel this conclusion, explaining as they do that "a                                 91-522 - CONCUR

                             SAUDI ARABIA v. NELSON                            3                                         ____

foreign government's . . .  employment or engagement of laborers, clerical staff
or marketing agents . . . would be among those included within" the definition
of commercial activity.  H. R. Rep. No. 94-1487, p. 16 (1976) (House Report);
S. R. Rep. No. 94-1310, p. 16 (1976) (Senate Report).  Nelson alleges that
petitioners harmed him in the course of engaging in their commercial enterprise,
as a direct result of their commercial acts.  His claim, in other words, is
"based upon commercial activity."
  Indeed, I am somewhat at a loss as to what exactly the majority believes
petitioners have done that a private employer could not.  As countless cases
attest, retaliation for whistleblowing is not a practice foreign to the market-
place. (Ftnote. 1)  Congress passed a statute in response to such behavior, see       (Ftnote. 1)
Whistleblower Protection Act of 1989, 5 U. S. C. S1213 et seq. (1988 ed., Supp.                                                       _______
III), as have numerous States.  On occasion, private employers also have been
known to retaliate by enlisting the help of police officers to falsely arrest
employees.  See, e.g., Rosario v. Amalgamated Ladies Garment Cutters' Union,                 ____                    _  _______    _________________________________________
605 F. 2d 1228, 1233, 1247-1248 (CA2 1979), cert. denied, 446 U. S. 919 (1980).
More generally, private parties have been held liable for conspiring with public
authorities to effectuate an arrest, see, e.g., Adickes v. S. H. Kress & Co.,                                          ____                                             _  _______    ________________
398 U. S. 144 (1970), and for using private security personnel for the same
purposes.  See Albright v. Longview Police Dept., 884 F. 2d 835, 841-842 (CA5               ________    _____________________
1989).
  Therefore, had the hospital retaliated against Nelson by hiring thugs to do
the job, I assume the majority - no longer able to describe this conduct as "a
foreign state's
























                    ____________________

   1)  See, e.g., English v. General Electric Co., 496 U. S. 72, 75-76 (1990);   1)       ____               _  _______    ____________________
Belline v. K-Mart Corp., 940 F. 2d 184, 186-189 (CA7 1991); White v. General_______    ____________                                     _____    _______
Motors Corp., 908 F. 2d 669, 671 (CA10 1990), cert. denied, 498 U. S. 1069___________
(1991); Sanchez v. Unemployment Ins. Appeals Bd., 36 Cal. 3d 575, 685 P. 2d 61        _______    _____________________________
(1984); Collier v. Superior Court of Los Angeles County, 228 Cal. App. 3d 1117,        _______    ____________________________________
279 Cal. Rptr. 453 (1991).                                 91-522 - CONCUR

4                            SAUDI ARABIA v. NELSON                                         ____

exercise of the power of its police," ante, at 12 - would consent to calling it                                      ____
"commercial."  For, in such circumstances, the state-run hospital would be
operating as any private participant in the marketplace and respondents' action
would be based on the operation by Saudi Arabia's agents of a commercial
business. (Ftnote. 2)          (Ftnote. 2)
  At the heart of the majority's conclusion, in other words, is the fact that
the hospital in this case chose to call in government security forces.  See
ante, at 12-13.  I find this fixation on the intervention of police officers,____
and the ensuing characterization of the conduct as "peculiarly sovereign in
nature," ante, at 12, to be misguided.  To begin, it fails to capture         ____
respondents' complaint in full.  Far from being directed solely at the
activities of the Saudi police, it alleges that agents of the hospital summoned                                                              ________
Nelson to its security office because he reported safety concerns and that the
hospital played a part in the subsequent beating and imprisonment.  App. 5, 14. ________
Without more, that type of behavior hardly qualifies as sovereign.  Thus, even
assuming for the sake of argument that the role of the official police somehow
affected the nature of petitioners' conduct, the claim cannot be said to "rest[]
entirely upon activities sovereign in character."  See ante, at 8, n. 4.  At the                                                       ____
very least it "consists of both commercial and sovereign elements," thereby
presenting the specific question the majority chooses to elude.  See ibid.  The                                                                     ____
majority's single-minded focus on the exercise of police power, while certainly
simplifying the case, thus























                    ____________________

   2)  "[W]hen the foreign state enters the marketplace or when it acts as a   2)
private party, there is no justification in modern international law for
allowing the foreign state to avoid the economic costs of . . . the accidents
which it may cause. . . . The law should not permit the foreign state to shift
these everyday burdens of the marketplace onto the shoulders of private
parties."  Testimony of Monroe Leigh, Legal Adviser, Department of State,
Hearings on H. R. 11315 before the Subcommittee on Administrative Law and
Governmental Relations of the House Committee on the Judiciary, 94th Cong., 2d
Sess., 27 (1976).                                 91-522 - CONCUR

                             SAUDI ARABIA v. NELSON                            5                                         ____

hardly does it justice. (Ftnote. 3)                        (Ftnote. 3)















                    ____________________

   3)  In contrast, the cases cited by the majority involve action that did not   3)
take place in a commercial context and that could be considered purely
sovereign.  For instance, in Arango v. Guzman Travel Advisors Corp., 621 F. 2d                             ______    _____________________________
1371 (CA5 1980), plaintiffs were expelled from the Dominican Republic pursuant
to a decision by immigration officials that they were "`undesirable aliens.'"
Id., at 1373.  As the Court of Appeals reasoned, the airline's actions "were not__
commercial.  [It] was impressed into service to perform these functions . . . by
Dominican immigration officials pursuant to that country's laws."  Id., at 1379.                                                                    __
Nor was there a hint of commercial activity in Herbage v. Meese, 747 F. Supp. 60                                               _______    _____
(DC 1990), affirmance order, 292 U. S. App. D. C. 84, 946 F. 2d 1564, cert.
denied, 502 U. S. ___ (1991), an extradition case that did not so much as
mention the commercial activity exception.
 Absence of a commercial context also distinguishes those incidents relied on
by the majority that pre-date passage of the Foreign Sovereign Immunities Act.
See ante, at 12, n. 5.  Yet the majority gives short shrift to an occurrence    _____
that most closely resembles the instant case and that suggests strongly that the
hospital's enlistment of, and cooperation with, the police should not entitle it
to immunity.  The incident involved allegations that an agency of the Jamaican
government conspired to have Jamaican nationals working in the United States
"falsely arrested, imprisoned and blacklisted, and to deprive them of wages and
other employee rights."  Sovereign Immunity Decisions of the Department of
State, May 1952 to January 1977 (M. Sandler, D. Vagts, & B. Ristau, eds.), in
1977 Digest of United States Practice in International Law 1062.  Significantly,
the State Department did not take refuge behind the words "arres[t]" and
"impriso[n]" and decide that the actions were sovereign in nature.  Rather, it
declined to recognize immunity, focusing on the fact that private parties acting
in an employment context could do exactly what the Jamaican agency was alleged
to have done: "[T]he activities under consideration are of a private nature
. . . . The Department of State is impressed by the fact that the activities of
the British West Indies Cental Labour Organization . . . are very much akin to
those that might be conducted by a labor union or by a private employment agency
-  arranging and servicing an agreement between private employers and employees.
Although it may be argued that some of the acts performed by the British West
Indies Central Labour Organization in this case are consular in nature, the
Department believes that they arise from the involvement of the British West
Indies Central Labour Organization in the private employer-employee contractual
relationship rather than from a consular responsibility, and cannot be separated
therefrom."  Id., at 1063.             __                                 91-522 - CONCUR

6                            SAUDI ARABIA v. NELSON                                         ____

  Reliance on the fact that Nelson's employer enlisted the help of public rather
than private security personnel is also at odds with Congress' intent.  The
purpose of the commercial exception being to prevent foreign states from taking
refuge behind their sovereignty when they act as market participants, it seems
to me that this is precisely the type of distinction we should seek to avoid.
Because both the hospital and the police are agents of the state, the case in my
mind turns on whether the sovereign is acting in a commercial capacity, not on
whether it resorts to thugs or government officers to carry on its business.
That, when the hospital calls in security to get even with a whistleblower, it
comes clothed in police apparel says more about the state-owned nature of the
commercial enterprise than about the noncommercial nature of its tortious
conduct.  I had thought the issue put to rest some time ago when, in a slightly
different context, Chief Justice Marshall observed:

   "It is, we think, a sound principle, that when a government becomes a partner
   in any trading company, it devests itself, so far as concerns the transac-
   tions of that company, of its sovereign character, and takes that of a
   private citizen.  Instead of communicating to the company its privileges and
   its prerogatives, it descends to a level with those with whom it associates
   itself, and takes the character which belongs to its associates, and to the
   business which is to be transacted."  Bank of United States v. Planters' Bank                                         _____________________    ______________
   of Georgia, 9 Wheat. 904, 907 (1824).   __________


See also Alfred Dunhill of London, Inc. v. Cuba, 425 U. S. 682, 695-696 (1976)         ______________________________    ____
(plurality opinion).                                 91-522 - CONCUR

                             SAUDI ARABIA v. NELSON                            7                                         ____

                                        C
  Contrary to the majority's suggestion, ante, at 13, this conclusion does not                                         ____
involve inquiring into the purpose of the conduct.  Matters would be different,
I suppose, if Nelson had been recruited to work in the Saudi police force and,
having reported safety violations, suffered retributive punishment, for there
the Saudi authorities would be engaged in distinctly sovereign activities.  Cf.
House Report, at 16 ("Also public or governmental and not commercial in nature,
would be the employment of diplomatic, civil service, or military personnel");
Senate Report, at 16.  The same would be true if Nelson was a mere tourist in
Saudi Arabia and had been summarily expelled by order of immigration officials.
See Arango v. Guzman Travel Advisors Corp., 621 F. 2d 1371 (CA5 1980).  In this    ______    _____________________________
instance, however, the state-owned hospital was engaged in ordinary commercial
business and "[i]n their commercial capacities, foreign governments do not
exercise powers peculiar to sovereigns.  Instead, they exercise only those
powers that can also be exercised by private citizens."  Alfred Dunhill, supra,                                                         ______________  _____
at 704 (plurality opinion).  As we recently stated, "when a foreign government
acts, not as regulator of a market, but in the manner of a private player within
it, the foreign sovereign's actions are `commercial' within the meaning of the
FSIA."  Republic of Argentina v. Weltover, Inc., 504 U. S. ___, ___ (1992) (slip        _____________________    ______________
op., at 6).  That, I believe, is the case here.

                                       II
  Nevertheless, I reach the same conclusion as the majority because petitioners'
commercial activity was not "carried on in the United States."  The Act defines
such conduct as "commercial activity . . . having substantial contact with the
United States."  28 U. S. C. S1603(e).  Respondents point to the hospital's
recruitment efforts in the United States, including advertising in the American                                 91-522 - CONCUR

8                            SAUDI ARABIA v. NELSON                                         ____

media, and the signing of the employment contract in Miami.  See Brief for
Respondents 43-45.  As I earlier noted, while these may very well qualify as
commercial activity in the United States, they do not constitute the commercial
activity upon which respondents' action is based.  Conversely, petitioners'
commercial conduct in Saudi Arabia, though constituting the basis of the
Nelsons' suit, lacks a sufficient nexus to the United States.  Neither the
hospital's employment practices, nor its disciplinary procedures, has any
apparent connection to this country.  On that basis, I agree that the Act does
not grant the Nelsons access to our courts.