The Political Economy of Foreign Sovereign Immunity

The Foreign Sovereign Immunities Act (“FSIA”) prohibits civil litigation against foreign states, their agencies, and instrumentalities unless one of several enumerated exceptions to immunity applies. The most important of these exceptions is for the commercial activity of foreign sovereigns. While most scholars and practitioners of the FSIA acknowledge the centrality of the commercial activity exception and its general relationship to capitalism, few have explored in much detail the relationship between the commercial activity exception, or the FSIA more generally, and the capitalist system. This Article fills this gap. Applying a political economy lens, it shows how the statutory framework for private litigation against foreign sovereigns has long been aligned with interests and prerogatives associated with capitalism—as evidenced by the historical evolution of foreign sovereign immunity doctrine and the FSIA’s eventual passage; the central role of the commercial activity exception in the foreign sovereign immunity scheme; and the ways courts have interpreted the commercial activity exception to privilege particular corporate interests and plaintiffs over other types of claims and claimants. While capitalism’s influence on the FSIA is a story that has yet to be fully told, its telling benefits and enriches legal analysis and understanding of the FSIA itself.