461 U.S. 480, 492–93 (1983)
On April 21, 1975, the Federal Republic of Nigeria and Verlinden B.V., a Dutch corporation with its principal offices in Amsterdam, the Netherlands, entered into a contract providing for the purchase of 240,000 metric tons of cement by Nigeria.1 The parties agreed that the contract would be governed by the laws of the Netherlands and that disputes would be resolved by arbitration before the International Chamber of Commerce in Paris, France.2 The contract required the Nigerian Government to establish an irrevocable, confirmed letter of credit for the total purchase price through Slavenburg’s Bank in Amsterdam.3
According to Verlinden’s amended complaint, the Central Bank of Nigeria, an instrumentality of Nigeria, improperly established an unconfirmed letter of credit payable through Morgan Guaranty Trust Co. in New York.4 Verlinden subcontracted with a Liechtenstein corporation, Interbuco, to purchase the cement needed to fulfill the contract.5 In mid-September 1975, Central Bank unilaterally directed its correspondent banks, including Morgan Guaranty, to adopt a series of amendments to all letters of credit issued in connection with the cement contracts and directly notified the suppliers that payment would be made only for those shipments approved by Central Bank two months before their arrival in Nigerian waters.6
Verlinden sued Central Bank in the United States District Court for the Southern District of New York, alleging that Central Bank’s actions constituted an anticipatory breach of the letter of credit.7 Verlinden asserted jurisdiction under the Foreign Sovereign Immunities Act, 28 U.S.C. § 1330.8 Respondent moved to dismiss for lack of subject-matter and personal jurisdiction.9
The District Court held that a federal court may exercise subject-matter jurisdiction over a suit brought by a foreign corporation against a foreign sovereign, but after considering each of the exceptions to immunity upon which Verlinden relied, the court concluded that none applied and dismissed the action.10 The Court of Appeals for the Second Circuit affirmed on different grounds, agreeing that the Act permitted actions by foreign plaintiffs but holding that the Act exceeded the scope of Article III.11 The Supreme Court granted certiorari.12
Whether the Foreign Sovereign Immunities Act of 1976 authorizes a foreign plaintiff to sue a foreign state in a United States district court on a nonfederal cause of action?13
The statute grants jurisdiction over any nonjury civil action against a foreign state with respect to which the foreign state is not entitled to immunity, 28 U.S.C. § 1330(a). The Act contains no indication of any limitation based on the citizenship of the plaintiff.14
Yes. The language of the statute is unambiguous.15 In the present case, Verlinden B.V., a Dutch corporation with its principal offices in Amsterdam, sued the Central Bank of Nigeria in the United States District Court for the Southern District of New York alleging that Central Bank’s unilateral amendments to the letter of credit constituted an anticipatory breach while asserting jurisdiction under the Foreign Sovereign Immunities Act.16 The legislative history, when considered as a whole, reveals an intent not to limit jurisdiction under the Act to actions brought by American citizens.17
Congress protected against the danger of turning courts into international claims tribunals by enacting substantive provisions requiring some form of substantial contact with the United States rather than by restricting the class of potential plaintiffs.18
The Foreign Sovereign Immunities Act of 1976 authorizes a foreign plaintiff to sue a foreign state in a United States district court on a nonfederal cause of action.19
Whether Article III of the Constitution permits Congress to confer federal-court jurisdiction over such suits by foreign plaintiffs against foreign sovereigns?20
The Arising Under Clause of Article III provides an appropriate basis for the statutory grant of subject-matter jurisdiction to actions by foreign plaintiffs under the Act.21 A suit against a foreign state under this Act necessarily raises questions of substantive federal law at the very outset, and hence clearly arises under federal law as that term is used in Article III.22
Yes. By reason of its authority over foreign commerce and foreign relations, Congress has the undisputed power to decide as a matter of federal law whether and under what circumstances foreign nations should be amenable to suit in the United States.23 At the threshold of every action in a district court against a foreign state, the court must satisfy itself that one of the exceptions to sovereign immunity applies.24 In doing so it must apply the detailed federal law standards set forth in the Act.25
In the present case, Verlinden’s action against Central Bank requires the district court to apply those federal standards to determine whether any exception applies, thereby injecting an essential federal element into the suit from the outset.26
Article III of the Constitution permits Congress to confer federal-court jurisdiction over such suits by foreign plaintiffs against foreign sovereigns.27