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David Souter on Corporations
Supreme Court Justice (nominated by Pres. Bush Sr. 1990)
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Sovereign immunity only applies to foreign-owned companies.
Justice Souter joined the Court's decision on DOLE FOOD v. PATRICKSON on Apr 22, 2003:
In 1997, a group of Central American farm workers alleged injury from chemical exposure against Dole Food Company and the Dead Sea Companies, which produced dibromochloropropane, an agricultural pesticide that harmed the farm workers. Dole argued that the Dead Sea Companies were instrumentalities of a foreign state, Israel, as defined by the Foreign Sovereign Immunities Act of 1976 (FSIA) and thus entitled to immunity.
HELD: Delivered by Kennedy; joined by Rehnquist, Stevens, Scalia, Souter, Thomas, and Ginsburg
The Court held, 7-2, that a foreign state must itself own a majority of the shares of a corporation if the corporation is to be deemed an instrumentality of the state under the provisions of the FSIA. The corporate structure ("tiering") in this particular case prevented the Dead Sea Companies from claiming instrumentality status.
CONCURRENCE IN PART and DISSENT IN PART: By Breyer; joined by O'Connor
The phrase "owned by a foreign state" covers a foreign state's legal interest in a corporate subsidiary, where that interest consists of the foreign state's ownership of a corporate parent that owns the shares of the subsidiary. The relevant foreign nation does not DIRECTLY own a majority of the corporate subsidiaries' shares. But (simplifying the facts) it does own a corporate parent, which, in turn, owns the corporate subsidiaries' shares. Does this type of majority-ownership interest count as an example of what the statute calls an "other ownership interest"? The Court says no. I disagree.
Source: Supreme Court case 03-DOLE argued on Jan 22, 2003
Page last updated: Feb 01, 2020