The Supreme Court on Wednesday (Feb. 27) overturned longstanding D.C. Circuit precedent in a ruling that will make it easier to sue international organizations in federal court.
In Jam v. International Finance Corp., Chief Justice John Roberts, writing for a 7-1 majority, reversed the D.C. Circuit’s holding that international organizations—like the United Nations, the World Bank, or the International Monetary Fund—enjoy broad immunity from lawsuits under a 1945 law known as the International Organizations Immunities Act. Instead, the Supreme Court ruled that such organizations have the more limited type of immunity that foreign nations have under the Foreign Sovereign Immunities Act.
In Jam, farmers and fishermen in the village of Gujarat, India brought a lawsuit in U.S. court against the International Finance Corp., a global development organization within the World Bank Group. The IFC had financed a power plant in Gujarat, and the plaintiffs alleged that the plant polluted the surrounding air, land, and water.
The IFC claimed it was immune from suit under the IOIA, which affords international organizations the “same immunity” that is “enjoyed by foreign governments.” The D.C. Circuit agreed that the IFC was immune in a 2017 ruling that relied on a 20-year-old D.C. Circuit case that had broadly interpreted the IOIA’s statutory immunity language.
The problem is that the scope of sovereign immunity has changed over the years. At the time the IOIA was passed, foreign governments enjoyed nearly absolute immunity. Later, Congress passed the FSIA, curtailing immunity for foreign governments and creating several carve-outs that allowed suits against them to proceed. In interpreting the IOIA, the D.C. Circuit relied on the original understanding of foreign sovereign immunity at the time the IOIA was passed—though Judge Pillard, in a concurrence to the 2017 opinion in Jam, suggested it was time to revisit that interpretation.
The Indian plaintiffs sought review at the Supreme Court. In its opinion on Wednesday, the justices noted Pillard’s concurrence and said the D.C. Circuit was wrong to interpret immunity so broadly. Today, Roberts wrote, the “same immunity” that is “enjoyed by foreign governments” means that immunity is governed by the FSIA. International organizations thus have the same limited scope of immunity that foreign governments have, and the lawsuit against the IFC is revived.
Jam is one of three D.C. Circuit cases that the Supreme Court decided to review in its 2018-19 term. The other two are Azar v. Allina Health Services and Lorenzo v. SEC. The justices have not yet ruled in either of those cases.
