U.S. Supreme Court Holds Austrian National Railroad is Entitled to Sovereign Immunity

The United States Supreme Court in a unanimous decision authored by Chief Justice John Roberts concluded an Austrian national railroad company was entitled to sovereign immunity in a negligence action brought in the United States for injuries sustained in Austria.  The action stemmed from a claim brought by a California woman who, in 2007, bought a Eurail pass from a Massachusetts travel agency.  While at the Innsbruck train station in Austria, the woman suffered horrific injuries as a result of her falling off the train platform and having both legs crushed from an oncoming train.  The California woman thereafter sued the operator of the Austrian train, an agency owned and operated by the government of Austria, for her injuries.  The Austrian government agency claimed immunity from suit in the United States under the Foreign Sovereign Immunities Act, a federal law which grants immunity to foreign governments from suit in the U.S., unless certain exceptions apply.  At issue was whether the plaintiff’s injuries suffered while boarding a train in Austria was “based upon” the California woman’s purchase of a Eurail pass through a Massachusetts-based travel agency.  The Ninth Circuit Court of Appeals in an en banc decision, where three judges dissented, held that the Austrian government agency was not immune from suit.  The Supreme Court disagreed and reversed the Ninth Circuit’s ruling.

The plaintiff argued that the so-called “commercial activity” exception under the Foreign Sovereign Immunities Act applied, thus permitting her to sue the Austrian railroad company in the United States, because her injuries were “based upon” her purchase of a Eurail pass from a Massachusetts travel agency.  The Supreme Court flatly disagreed, concluding that the plaintiff’s injuries were “based upon” conduct which occurred entirely in Austria, that is, the unsafe conditions at the Austrian Innsbruck station which the plaintiff alleged were the root cause of her injuries, and not the purchase of the Eurail pass.  Having concluded that the plaintiff’s suit was not “based upon” commercial activity occurring in the United States, the Court refused to reach another question it had agreed to review: whether the Massachusetts travel agency’s sale of the Eurail pass could be attributed to the Austrian railroad company in the first instance.  A decision on this latter question could have been significant, given the ubiquity of today’s internet transactions.

The case is OBB Personenverkehr AG v. Sachs, 577 U.S. ___ (2015).