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 underappreciated, various capitalist interests have comported with and been furthered by the FSIA. Applying a political economy lens, this Article demonstrates how the statutory framework for private litigation against foreign sovereigns has aligned with interests and prerogatives associated with particular stages of capitalist development—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 before and after the FSIA; and the ways courts have interpreted the FSIA’s commercial activity exception to privilege particular corporate interests and plaintiffs over other types of claims and claimants.

While capitalism’s relationship with 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 and points the way to possible reforms of the statute.