OBB Personenverkehr AG v. Sachs

Background

Carol Sachs, a resident of Berkeley, California, bought a Eurail pass over the internet from a Massachusetts travel agent and traveled to Europe. While boarding an OBB train at the Innsbruck station in Austria, she fell onto the tracks and suffered catastrophic injuries. She sued the Austrian state-owned railway in a U.S. federal court asserting negligence, strict liability, and breach of implied warranties. OBB invoked the Foreign Sovereign Immunities Act to argue it was immune from suit, and the lower courts reached differing conclusions about whether the U.S. ticket sale meant the case was based on commercial activity in the United States.

Reasoning

The key question was whether Sachs’s claims were "based upon" the Eurail pass sale in the United States. The Court relied on its earlier decision in Saudi Arabia v. Nelson and rejected the Ninth Circuit’s approach that finding a single claim element tied to a U.S. sale is enough. The Court explained that courts must identify the gravamen—the foundation—of a suit. Here the essential wrongful conduct and the injuries occurred in Austria, and the ticket sale alone was not wrongful. Allowing jurisdiction based on such a sale would let plaintiffs evade the Act by artful pleading.

Real world impact

The Court held that Sachs’s suit does not fall within the commercial-activity exception, so OBB retains sovereign immunity and U.S. courts lack jurisdiction. The decision makes clear that a U.S. ticket sale does not automatically create a basis to sue a foreign state in U.S. courts when the core injury and wrongful conduct happened abroad. The Court also declined to consider a new argument about OBB’s entire enterprise because it was not raised below.