Ministry of Defense and Support for the Armed Forces of the Islamic Republic of Iran v. Elahi

PETITIONER: Ministry of Defense and Support for the Armed Forces of the Islamic Republic of Iran
RESPONDENT: Dariush Elahi
LOCATION: Board of Immigration Appeals

DOCKET NO.: 04-1095
DECIDED BY: Roberts Court (2006-2009)
LOWER COURT: United States Court of Appeals for the Ninth Circuit

CITATION: 546 US 450 (2006)
DECIDED: Feb 21, 2006

Facts of the case

Dariush Elahi sued in federal court claiming that the Islamic Republic of Iran had murdered his brother, and he won $300 million in damages. When Iran's Ministry of Defense won an arbitration award against a third party, Elahi sued to claim the award as part of the damages due to him. The Ministry objected, arguing that the Foreign Sovereign Immunities Act of 1976 (FSIA) granted its property immunity from such claims. The District Court ruled for Elahi on the grounds that the Ministry had waived its immunity when it sued to enforce its award against the third party. The Court of Appeals for the Ninth Circuit rejected the District Court's reasoning, but it also ruled for Elahi, pointing to a provision of the FSIA that excepts from immunity the property of any "agency or instrumentality" of a foreign government if the agency is "engaged in commercial activity in the United States." The Ninth Circuit ruled that the exception covers any foreign state as long as it is "engaged in commercial activity in the United States."

Question

Is the property of a foreign state excepted from immunity under the Foreign Sovereign Immunities Act of 1976 if the state is "engaged in commercial activity in the United States?