Case of the Day: Jam v. International Finance Corp.
Posted on March 1, 2019
The case of the day is Jam v. International Finance Corp. (S. Ct. 2019). I wrote about the lower court decision back in June 2017. The claim was that the IFC, an international organization headquartered in Washington, had made loans to an Indian power company for construction of a coal-fired power plant in Gujarat, but that it had negligently failed to supervise the project. Local farmers and fishermen, and a local village, sued IFC in Washington on common law tort theories. The IFC moved to dismiss on the grounds that it was immune from suit under the International Organizations Immunities Act. The District Court and the D.C. Circuit held that IFC was indeed immune from suit, and the plaintiffs sought review in the Supreme Court.
Unlike the FSIA, the IOIA does not contain a list of exceptions to the immunity it codifies. Instead, it simply says that international organizations “shall enjoy the same immunity from suit and every form of judicial process as is enjoyed by foreign governments.” The IOIA was enacted before the FSIA, though, and at the time, the United States had not yet adopted the restrictive theory of foreign sovereign immunity. That is, at the time, foreign states were more or less absolutely immune from suit, and the government would typically make a suggestion of immunity, which the courts regarded as conclusive. This is not, of course, how the FSIA works. The FSIA makes the decision a judicial decision, not a political decision, and it codifies exceptions to immunity, e.g., for a foreign sovereign’s commercial activity in the United States.
The question is whether, as the lower courts held, the IOIA should be read to give international organizations the immunity they had in 1945, or whether the statute should be read to incorporate by reference, so to speak, the law of foreign sovereign immunity, including the post-1945 relaxation of the rules? In a 7-1 decision written by Chief Justice Roberts (Justice Kavanaugh did not participate), the Court ruled in favor of the plaintiffs.
The main source of the Court’s reasoning was textual—it thought the most natural reading of the statutory language pointed towards incorporation by reference, and it noted a canon of statutory construction that treats “reference” language in this way. It refused to consider the difference in the purposes of international organization immunity and foreign sovereign immunity to decide whether that difference justified another result, because a resort to purpose could be proper only if the language were unclear. Somewhat paradoxically, the Court criticized the D.C. Circuit for failing to defer to the views of the State Department, which “in this area ordinarily receive special attention.” If the language is as clear as the Court seemed to think, why would any deference be warranted?
Justice Brier was alone in dissent. His approach to interpretation is out of fashion, but in my view admirable. What was Congress’s purpose in enacting the IOIA? Many international financial institutions, he says, probably are more in need of immunity from suits based on their commercial acts than are foreign states. It used to be considered sophisticated to consider a statute’s purpose and history as well as its text when trying to puzzle out its meaning. If I may stretch for an analogy, sometimes I think that the current textualism vogue is like the fundamentalist approach to reading the Bible. There’s a wonderful book by David Hart Bentley, The Experience of God: Being, Consciousness, Bliss, that has an insightful polemic against the fundamentalist Protestant approach (yes, I know, not all Protestants are fundamentalists), which he argues is defensive about modern science and reads the Bible in a way that tries to compete with science on its own terms. This kind of fundamentalism no doubt has influenced American judges given our Protestant history and culture (though it’s somewhat surprising to me, now that I think of it, that the intellectual champion of textualism on the Court was Justice Scalia, a Roman Catholic). But naive literalism is not just the province of Protestants; Maimonides, in the twelfth century, was already making the same point about the six days of creation that Clarence Darrow makes to William Jennings Bryant in Inherit The Wind, which suggests that even in medieval times people were making the same mistake. In short, to follow my analogy a bit further, a