In sexual harassment action by
Japanese civil servant against Governor and Municipal Government of Tokyo,
Second Circuit rules that defendants are immune from suit even though their
U.S. activities promote commercial interests of Japanese companies and their
products
Yuka Kato works for the Tokyo
Municipal Government (TMG) in Japan. After her transfer to TMG’s New York
office in 1998 as a standard rotation of employment, the TMG transferred her
back to Japan in 2000. She returned later on to New York on medical leave.
While there, she sued TMG and Shintaro Ishihara, the Governor of Tokyo
(defendants) in federal court.
The complaint alleged sexual harassment and retaliation by defendants during her employment at TMG that breached Title VII of the Civil Rights Act of 1964 [42 U.S.C. Section 2000e], as well as New York State and local human rights laws. The district court later granted TMG’s motion to dismiss plaintiff’s complaint based on sovereign immunity under the Foreign Sovereign Immunities Act of 1976 (FSIA) [28 U.S.C. Section 1602ff]. Plaintiff then filed a timely appeal. The U.S. Court of Appeals for the Second Circuit, however, affirms.
The FSIA codifies the “restrictive theory” of sovereign immunity under which foreign sovereigns and their agencies and instrumentalities enjoy immunity subject to a few, enumerated exceptions. For example, sovereigns have no immunity from suits “based upon ... commercial activity carried on in the United States ...” 28 U.S.C. Section 1605(a)(2).
There is no dispute here that TMG and the Governor constitute a “foreign state” for purposes of the FSIA. The question then boils down to whether TMG’s activities in New York were of a “commercial” nature. The Act, however, leaves it to the courts to apply the “commercial activity” exception to the facts of each case.
Plaintiff’s job focused on promotional activities for TMG, such as working at TMG’s booths at trade shows and doing marketing reports. She thus argues that her employment with TMG was “commercial” rather than “governmental” in nature. The Court disagrees.
“[T]he fact that a government instrumentality, TMG, is engaged in the promotion of commerce does not mean that the instrumentality is thereby engaged in commerce. The promotion abroad of the commerce of domestic firms is a basic – even quintessential – government function.”
“For example, the United States Department of Commerce is charged by statute with the ‘duty ... to foster, promote, and develop the foreign and domestic commerce ... of the United States.’ Indeed, many agencies of the United States have some role in the direct or indirect promotion of American commerce overseas. ... Agencies of foreign governments do not undertake ‘commercial activit[ies]’ merely by engaging in these basic and routine trade promotional activities.”
“We therefore hold that TMG was not involved in a ‘commercial activity’ under the FSIA when it provided general business development assistance, including product promotion, to Japanese businesses seeking to engage in commerce in the United States. Accordingly, we reject plaintiff’s argument that her involvement in such activities on TMG’s behalf rendered her employment ‘commercial’ under the FSIA.” [Slip op. 16-18]
Citation: Kato v. Ishihara, 360 F.3d 106 (2d Cir. 2004).
