Arun Kumar Bhattacharya v. State Bank of India

To bring a civil action against a foreign state, a litigant must satisfy one of the exceptions to immunity in the Foreign Sovereign Immunities Act of 1976 (“FSIA”), 28 U.S.C. 1602 et seq. One such exception, under the “direct effects clause” of the FSIA’s commercial-activity exception, 28 U.S.C. 1605(a)(2), provides that a foreign state may be sued “in any case ‘in which the action is based . . . upon an act outside the territory of the United States in connection with a commercial activity of the foreign state elsewhere and that act causes a direct effect in the United States.’” Republic of Argentina v. Weltover, Inc., 504 U.S. 607, 611 (1992) (quoting 28 U.S.C. 1605(a)(2)). The Courts of Appeals have divided as to the application of this exception. Some Circuits, adhering to the plain text of the statute, consider solely whether the relevant foreign act on which the suit is based had a “direct effect” here. But other Circuits, like the Seventh Circuit below, require more. In the decision below, that Circuit required a “legally significant act” in the United States. The question presented is: Whether, to establish a “direct effect in the United States” under 28 U.S.C. 1605(a)(2), a plaintiff must make an extratextual showing that either the sovereign engaged in a U.S.-based “legally significant act,” or that the U.S. effects were “legally significant” in addition to being direct.