Dead Sea Bromine Co., Ltd., and Bromine Compounds Limited v. Gerardo Dennis Patrickson, et al.

Questions presented

SCOTUS records

1. 01-593 DOLE FOOD COMPANY v. PATRICKSON Ruling below: CA 9, 251 F.3d 795. QUESTION PRESENTED The Foreign Sovereign Immunities Act, 28 U.S.C. §§ 1330, 1332(a), 1391(f), 144I(d), 1602-11, affords "foreign states" various substantive and procedural protections in suits in American courts. The Act defines the term "foreign state" to include certain foreign corporations "a majority of whose shares or other ownership interest is owned by a foreign state or political subdivision." 28 U.S.C. §1603(b)(2). In this case, the State of Israel controlled more than 65% of the shares in two Israeli corporations through ownership of their ultimate parents. Contrary to at least four other circuits (including the Fifth in a case involving the same Israeli corporations), the Ninth Circuit refused to treat the corporations as foreign states under the Act because Israel did not directly own their shares. As a consequence, this case presents the following question: Whether a corporation in which a foreign sovereign controls a majority of the shares indirectly through ownership of the corporation's ultimate parent may qualify as a "foreign state" under the Foreign Sovereign Immmmunities Act. 01-594 DEAD SEA BROMINE CO. v. PATRICKSON Ruling below: CA 9, 251 F.3d 795. QUESTION PRESENTED The Foreign Sovereign Immunities Act (the " Act") establishes the ground rules for claims against a foreign state and, also, an "agency or instrumentality of a foreign state." 28 U.S.C. §§ 1330(a), 1603(a).The Act grants a foreign state or its agency or instrumentality the right to remove an action against it to federal court, immunity from suit absent an exception for certain types of claims and, in those cases where a lawsuit can be brought, certain substantive and procedural protections. Id. §§1330(a), 1441(d). The term "agency or instrumentality of a foreign state" is defined in pertinent part as "any entity ... a majority of whose shares or other ownership interest is owned by a foreign state. ..." Id. §1603(b)(2). Because the State of Israel at all relevant times held a majority ownership interest in Petitioners Dead Sea Bromine Company Ltd. and Bromine Compounds Limited by owning virtually all of their parent corporation 's stock, Petitioners assert that each of them is an "agency or instrumentality of a foreign state" pursuant to §1603(b)(2) and that the district court therefore had subject matter jurisdiction under the Act. The single question presented is whether the Act's definition of "agency or instrumentality" requires direct ownership by the foreign state, or whether an entity that is majority owned by the foreign state through one or more tiered subsidiaries is an entity "a majority of whose shares or other ownership interest is owned by a foreign state" within the meaning of 28 U .S.C. § 1603(b )(2). CERT. GRANTED: 6/28/02 Limited to the following questions:
2. Whether a corporation is an "agency or instrumentality" if a foreign state owns a majority of the shares of a corporate enterprise that in turn owns a majority of the shares of the corporation.
3. Whether a corporation is an "agency or instrumentality" if a foreign state owned a majority of the shares of the corporation at the time of the events giving rise to litigation, but the foreign state does not own a majority of those shares at the time that a plaintiff commences a suit against the corporation. The cases are consolidated and a total of one hour oral argument.

Opinion summary

Etalia.ai summary of the majority opinion

The case involved the Dead Sea Bromine Company and its subsidiary, Bromine Compounds Limited, who were sued by Gerardo Dennis Patrickson and others. The plaintiffs alleged injuries from exposure to dibromochloropropane (DBCP), a chemical used in pesticides. The companies sought immunity under the Foreign Sovereign Immunities Act (FSIA), arguing they qualified as an 'agency or instrumentality' of a foreign state because they were indirectly owned by the State of Israel through another company. However, the U.S. Supreme Court held that for FSIA purposes, direct ownership by a foreign state is required at each level of corporate structure; indirect ownership does not suffice for immunity claims under FSIA. Consequently, since neither company was directly owned by Israel but rather through intermediate entities, they did not qualify for sovereign immunity protection.