United States Supreme Court Considers whether IO Immunity Is Frozen in Time

[Beatrice Lindstrom is the Legal Director of the Institute for Justice & Democracy in Haiti and was counsel to plaintiffs in the Haiti cholera litigation Georges v. United Nations.]

Last week’s Supreme Court argument in Jam v. International Finance Corporation addressed whether international organizations’ immunity under the International Organizations Immunities Act (IOIA) has evolved with foreign sovereign immunity over the last 73 years, or remains fixed as it existed in 1945. The Court must decide, as Kristen Boon explained in a prior blog, whether IOs remain outliers in the field of immunities law, which has narrowed for every other type of actor.

The IOIA provides that IOs enjoy “the same immunity from suit and every form of judicial process as is enjoyed by foreign governments….” 22 U.S.C. 288a(b). When the IOIA was enacted in 1945, foreign states had nearly absolute immunity. But the Foreign Sovereign Immunities Act (FSIA) of 1976 carves out several exceptions, including for commercial activity or tortious conduct occurring in the United States.

The Jam plaintiffs are Indian fishermen and farmers alleging harms to their livelihoods, health and environment from the Tata Mundra Power Plant. The IFC financed the plant’s construction, and was responsible for ensuring that it complied with the IFC’s Standards on Environment and Social Sustainability. After unsuccessfully seeking remedies from the IFC’s internal accountability mechanism, the Plaintiffs brought suit in the IFC’s home forum in Washington D.C. The District Court, and then the D.C. Circuit, dismissed the suit, reasoning that the IFC enjoys the 1945 version of absolute immunity under the IOIA.

There are strong textual arguments for interpreting the IOIA to include the FSIA updates to immunity. The reference cannon provides that statutes incorporating bodies of law are presumed to evolve with that law. The use of the word “same” also suggests that Congress intended IOs to be treated equally to foreign states, a result that would not follow if IO immunity was forever frozen as it existed in 1945. And in other parts of the IOIA, the statute expressly grants absolute immunity, raising the question of why Congress would not have used the same language in 288(a)b if it intended to preserve an absolute immunity.

At argument, some justices seemed sympathetic to this reading. But Justice Breyer honed in on whether allowing exceptions to immunity would open the floodgates to lawsuits and debilitate important IO functions. This argument frequently arises in IO immunity debates, but curtailing IOIA immunity is unlikely to have a drastic impact. As plaintiffs pointed out at argument, IOs have other sources of protection: some have additional agreements in place that grant absolute immunity (and others could negotiate them), and in general, IOs can protect themselves by obtaining liability insurance.

IFC counsel likened reliance on such measures to jumping off a cliff and hoping for a soft landing. But even where such protections do not apply, increased exposure to liability is not necessarily a bad thing. The specter of liability serves as a critical deterrent to malfeasance. In the Haiti cholera case, another recent IO immunity case in federal court, victims sued the UN for dumping untreated human waste into Haiti’s main water source, causing a cholera epidemic that has to date killed over 10,000 people. Liability concerns might have compelled the basic sanitation practices that would have avoided this disaster. Making international organizations internalize the costs of their misconduct will provide a much-needed incentive to reduce the types of easily preventable harms that have victimized vulnerable communities too often in the past years.

If one takes a long view, limiting immunity may also serve the interests of IOs. Organizations like the Bretton Woods Institutions and the UN, whose missions include promoting development through rule of law, face a growing legitimacy crisis for relying on immunity to deny justice to victims of their harms. When IOs are seen as flouting basic obligations of care and then relying on immunity to avoid the consequences, their calls ring hollow when they implore governments to comply with the rule of law. This double standard has come to the fore in Haiti, where the UN’s ability to fulfill key goals—promoting stability and rule of law—has been seriously undermined by its simultaneous refusal to remedy the wrongs caused by its own misconduct. As argued by a group of former senior UN officials who participated in the Haiti litigation as amicus curiae for the plaintiffs, limiting immunity would enhance the IOs legitimacy and thereby their ability to fulfill their missions.

The Supreme Court’s limited questioning at oral argument makes it difficult to predict the outcome. But if the Court follows the broader trend of limiting immunity, it may promote the interest of both IOs and the people they intend to serve.