In the case of Republic of Argentina and Banco Central de la Republica Argentina v. Weltover, Inc., et al., 1991, the U.S Supreme Court ruled that a foreign state does not have immunity from jurisdiction in U.S courts under the Foreign Sovereign Immunities Act (FSIA) for commercial activities causing direct effects in America. The dispute arose when Argentina rescheduled its debt payments by offering new bonds to bondholders instead of cash payment. Two Panamanian corporations and a Swiss bank with New York accounts held these Argentinean bonds payable in New York dollars. When they did not receive their payments on time due to this restructuring, they sued both entities -Argentina and its central bank- for breach of contract in federal court invoking FSIA's commercial activity exception which waives sovereign immunity if an action is based upon a foreign state's commercial activity having substantial contact or causing direct effect within the United States.

In the dissenting opinion for Republic of Argentina and Banco Central de la Republica Argentina v. Weltover, Inc., et al., Justice Scalia argued that the majority's interpretation of commercial activity was too broad. He contended that not all activities performed by a foreign state in the conduct of its public functions should be considered commercial under the Foreign Sovereign Immunities Act (FSIA). According to him, only those actions which are typically carried out by private individuals or corporations can be classified as such. In this case, he believed that Argentina’s issuance and restructuring of bonds were sovereign acts rather than commercial ones because they involved policy decisions about national economic strategy and debt management - tasks usually undertaken by governments rather than private entities. Therefore, according to his view, these actions should have been protected from U.S jurisdiction under FSIA.