OBB Personenverkehr AG v. Sachs
The Supreme Court ruled unanimously that a California woman's lawsuit against Austria's state-owned railway could not go forward in U.S. courts, because her injuries and the conduct that caused them happened entirely in Austria, not from the U.S. ticket sale that led up to the trip.
The decision clarifies how courts must decide when a lawsuit against a foreign government 'is based upon' commercial activity in the United States, rejecting a broader test that would have let plaintiffs sue foreign states here based on any single element of a claim tied to U.S. conduct.
“However Sachs frames her suit, the incident in Innsbruck remains at its foundation.”
The Court's conclusion that the Austrian accident, not the U.S. ticket sale, was the true basis of the lawsuit.
How it got here: A federal trial court dismissed the suit on immunity grounds; the en banc Ninth Circuit reversed; OBB asked the Supreme Court to review that decision.
The Case in Depth
What happened
Carol Sachs, a California resident, bought a Eurail pass online from a Massachusetts travel agency. While boarding a train in Innsbruck, Austria operated by the Austrian state railway OBB, she fell onto the tracks and lost both legs. She sued OBB in U.S. federal court, and OBB argued it was protected by foreign sovereign immunity.
The question before the Court
Could a California woman injured by a train in Austria sue the Austrian state railway in U.S. court just because she bought her rail pass online from a U.S. travel agent?
Why it matters
Foreign governments and their state-owned companies (like railways, airlines, and utilities) get a clearer, narrower path for being sued in U.S. courts. People injured abroad by foreign state entities generally cannot use an incidental U.S. sale or contact — like buying a ticket online — as the hook for suing in American courts.
What changes now
This is a final merits decision. The Ninth Circuit's ruling is reversed, meaning Sachs's lawsuit against OBB cannot proceed in U.S. courts because OBB retains sovereign immunity. The Court did not decide whether the ticket sale could even be attributed to OBB under agency law, since it resolved the case on the separate 'based upon' issue. Sachs's newly raised theory about OBB's broader U.S. marketing activity was not considered because she never raised it below.
What this does not decide
The Court did not decide whether a travel agent's ticket sale could legally be attributed to a foreign state railway under common-law agency principles, since it resolved the case on other grounds. It also did not address Sachs's later argument that OBB's overall U.S. marketing activity, rather than just the ticket sale, could support jurisdiction, since that argument was raised too late.
How the Court got there
The legal reasoning, step by step
- The Court applied the Foreign Sovereign Immunities Act's commercial-activity exception, which lets a foreign state be sued in U.S. courts only when the lawsuit is 'based upon' commercial activity the foreign state carried on in the United States.
- Relying on its earlier decision in Saudi Arabia v. Nelson, the Court explained that 'based upon' means courts must find the 'gravamen,' or true core, of the complaint — the particular conduct that actually caused the injury — rather than just any commercial activity connected to the story.
- The Court rejected the Ninth Circuit's 'one-element' approach, which had found the U.S. ticket sale sufficient simply because it supplied one legal element of each of Sachs's claims; the Court held this conflicted with Nelson's focus on the conduct that actually injured the plaintiff, not any single supporting fact.
- Applying that gravamen test, the Court found that all of Sachs's claims — however she labeled them (negligence, strict liability, breach of warranty) — ultimately depended on the dangerous conditions and wrongful conduct at the Innsbruck train station in Austria, not the earlier U.S. ticket sale.
- Because the conduct that actually caused Sachs's injuries occurred entirely in Austria, her suit was not 'based upon' commercial activity carried on in the United States, so the commercial-activity exception to sovereign immunity did not apply.
Doctrinal impact
Cases affected by this decision
Reaffirms Saudi Arabia v. Nelson (507 U. S. 349)
The Court relied on Nelson's 'gravamen of the complaint' test to decide what a lawsuit is 'based upon.'