Justices weigh if international organizations can be sued

Justices weigh if international organizations can be sued
© Stefani Reynolds

The Supreme Court wrestled Wednesday with whether lawsuits can be brought against international organizations like the World Bank in a case that some observers say could make it harder for the groups to fund projects in the developing world.

The long-running dispute stems from the construction of a coal-fired power plant in Gujarat, India, that was funded with a $450 million loan from the Washington, D.C.-based International Finance Corporation (IFC).


A group of farmers and fishermen alleges that pollution from the plant harmed them and they should be able to hold the IFC liable.

The IFC, the private-sector lending arm of the World Bank, however, says the International Organizations Immunities Act of 1945 shields it from any litigation. The law says international organizations are entitled to “the same immunity from suit and every form of judicial process as is enjoyed by foreign governments.”

But the petitioners say Congress narrowed that immunity for foreign governments in the Foreign Sovereign Immunities Act of 1976.

In that law, Congress said cases arising out of a foreign state’s strictly commercial acts were excluded.

The plaintiffs argue the level of immunity for foreign governments under the Foreign Sovereign Immunities Act should apply to international organizations. 

The justices were not as energetic during Wednesday’s arguments as they typically are, with only a few questions asked of either side.

President TrumpDonald TrumpVeteran accused in alleged border wall scheme faces new charges Arizona Republicans to brush off DOJ concern about election audit FEC drops investigation into Trump hush money payments MORE’s newest appointee, Justice Brett KavanaughBrett Michael KavanaughConservative justices split in ruling for immigrant fighting deportation Supreme Court weighs whether to limit issuance of exemptions to biofuel blending requirements The Hill's Morning Report - Presented by Facebook - GOP makes infrastructure play; Senate passes Asian hate crimes bill MORE, did not take part in arguments. He had recused himself from the case likely because he heard the dispute when it was before the D.C. Circuit Court of Appeals.

IFC’s attorney, Donald Verrilli Jr., argued a ruling in the plaintiffs' favor would lead to a flood of litigation.

Future litigation appeared to be a concern for Justice Stephen Breyer.

“So what is the assurance that the government can give us that this isn't going to lead to a lot of lawsuits and this isn't going to interfere with perhaps activity that the United States traditionally has been very much in favor of?” he asked Jonathan Ellis, the assistant to the Solicitor General, who argued on behalf of the government in support of the plaintiffs. 

Ellis said many of these organization waive their immunity because o one's going to enter into a financial transaction with them if they know they can't sue if it goes south.

The Clinton appointee asked the government — siding with the plaintiffs — for assurances that a ruling in their favor wouldn't lead to lawsuits that disrupt the work of these organizations, which he said the U.S. has very much supported.

Other members of the court’s liberal wing also seemed dubious of the argument that Congress never meant to give international organizations absolute immunity from litigation in U.S. courts.

Justice Elena Kagan, an Obama appointee, noted that the International Organizations Immunities Act allows the president to limit the immunity of any designated international organization. 

Kagan said the provision makes more sense with the assumption that Congress meant to give absolute immunity.

“Doesn't that make a lot more sense, that provision, if you assume that Congress meant for there to be absolute immunity?” she said. In other words, the presidential authority is a  one-way ratchet. The President can only under this provision roll it back. It can't increase it.”

If the immunity is less than absolute, she said you would think Congress would have given the presidential authority both ways.

Justice Neil Gorsuch, a Trump appointee, also seemed skeptical. He said the court typically wouldn’t look at the second law as an amendment to the first. 

But Jeffrey Fisherman, who argued the case on behalf of the plaintiffs quoted Gorsuch’s own words in a 10th Circuit ruling to explain why the court wouldn’t look to the International Organizations Immunities Act.

He said “as time goes by, it becomes all the more stilted or antiquated or even foolish sometimes to try to answer questions in the modern day according to what some bygone era doctrine would have required, and especially a bygone era doctrine like this.”

A ruling in the case is expected early next year. Because the justices were shorthanded for this case, a 4-4 tie would leave the D.C. Circuit's decision to dismiss the plaintiffs' case in place.

--This report was updated at 2:05 p.m.