This Week At The Ninth: Sovereign Immunity And Plausible Defamation

Published date16 November 2021
Subject MatterLitigation, Mediation & Arbitration, Sovereign Immunity: Public Sector Government, Libel & Defamation
Law FirmMorrison & Foerster LLP
AuthorMs Lena H. Hughes and Adam L. Sorensen

This week, the Ninth Circuit examines whether private companies can count as foreign sovereigns for purposes of immunity, and when broad statements can plausibly be read to refer to specific individuals under Washington State defamation law.

WHATSAPP INC. ET AL. V. NSO GROUP TECHNOLOGIES LIMITED ET AL.

The Court holds that foreign sovereign immunity does not protect private companies.

The panel: Judges Murguia, Nelson, and Forrest, with Judge Forrest writing the opinion.

Key highlight: "The question presented is whether foreign sovereign immunity protects private companies. The law governing this question has roots extending back to our earliest history as a nation, and it leads to a simple answer-no. Indeed, the title of the legal doctrine itself-foreign sovereign immunity-suggests the outcome."

Background: Plaintiffs WhatsApp Inc. and Facebook, Inc. (collectively "WhatsApp") sued defendants, privately owned and operated Israeli corporations (collectively "NSO"), for sending malware through WhatsApp's server system to approximately 1,400 mobile devices, breaking both state and federal law. NSO contended that it was entitled to foreign sovereign immunity because, if WhatsApp's allegations were true, NSO was acting as an agent of a foreign state. The district court denied NSO's motion to dismiss on that ground. Relying on the Restatement (Second) of Foreign Relations Law ' 66, the district court concluded that NSO was not entitled to common-law conduct-based foreign sovereign immunity because it failed to show that exercising jurisdiction over NSO would serve to enforce a rule of law against a foreign state.

Result: The Ninth Circuit affirmed on an alternative ground. The Court first held that it had jurisdiction over NSO's interlocutory appeal under the collateral-order doctrine. The Court then held that the Foreign Sovereign Immunity Act ("FSIA") occupies the field of foreign sovereign immunity as applied to entities and categorically forecloses extending immunity to any entity that falls outside the FSIA's broad definition of "foreign state." Under the FSIA, a "foreign state" includes a body politic, as well as its "political subdivisions, agencies, and instrumentalities." 28 U.S.C. ' 1603(a). And "agency or instrumentality" is defined to include "any entity [that] is a separate legal person, corporate or otherwise and . . . which is an organ of a foreign state or political subdivision thereof, or a majority of whose shares or other ownership interest...

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