The Supreme Court/The Supreme Court.iso/pc/ascii/1991/91_522/91_522.zc

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SUPREME COURT OF THE UNITED STATES
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No. 91-522
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SAUDI ARABIA, KING FAISAL SPECIALIST
HOSPITAL and ROYSPEC, PETITIONERS v.
SCOTT NELSON et ux.
on writ of certiorari to the united states court
of appeals for the eleventh circuit
[March 23, 1993]

  Justice White, with whom Justice Blackmun joins,
concurring in the judgment.
  According to respondents' complaint, Nelson's employer
retaliated against him for reporting safety problems by
-summon[ing him] . . . to the hospital's security office
from which he was transported to a jail cell.-  App. 5.
Once there, he allegedly was -shackled, tortured and
beaten by persons acting at the direction, instigation,
provocation, instruction or request of- petitioners-Saudi
Arabia, King Faisal Specialist Hospital, and Royspec.  Id.,
at 5, 14, 18.  The majority concludes that petitioners enjoy
sovereign immunity because respondents' action is not
-based upon a commercial activity.-  I disagree.  I none-
theless concur in the judgment because in my view the
commercial conduct upon which respondents base their
complaint was not -carried on in the United States.-

                            I
                            A
  As the majority notes, the first step in the analysis is
to identify the conduct on which the action is based.
Respondents have pointed to two distinct possibilities.
The first, seemingly pressed at trial and on appeal,

consists of the recruiting and hiring activity in the United
States.  See Brief for Appellant 12-15.  Although this
conduct would undoubtedly qualify as -commercial,- I
agree with the majority that it is -not the basis for the
Nelsons' suit,- ante, at 8, for it is unrelated to the ele-
ments of respondents' complaint.
  In a partial change of course, respondents suggest to
this Court both in their brief and at oral argument that
we focus on the hospital's commercial activity in Saudi
Arabia, its employment practices and disciplinary proce-
dures.  Under this view, the Court would then work its
way back to the recruiting and hiring activity in order to
establish that the commercial conduct in fact had -sub-
stantial contact- with the United States.  See Brief for
Respondents 22, 24-25, 31; Tr. of Oral Arg. 44-45.  The
majority never reaches this second stage, finding instead
that petitioners' conduct is not commercial because it -is
not the sort of action by which private parties can engage
in commerce.-  Ante, at 13.  If by that the majority means
that it is not the manner in which private parties ought
to engage in commerce, I wholeheartedly agree.  That,
however, is not the relevant inquiry.  Rather, the question
we must ask is whether it is the manner in which private
parties at times do engage in commerce.

                            B
  To run and operate a hospital, even a public hospital,
is to engage in a commercial enterprise.  The majority
never concedes this point, but it does not deny it either,
and to my mind the matter is self-evident.  By the same
token, warning an employee when he blows the whistle
and taking retaliatory action, such as harassment, invol-
untary transfer, discharge, or other tortious behavior,
although not prototypical commercial acts, are certainly
well within the bounds of commercial activity.  The House
and Senate Reports accompanying the legislation virtually
compel this conclusion, explaining as they do that -a
foreign government's . . .  employment or engagement of
laborers, clerical staff or marketing agents . . . would be
among those included within- the definition of commercial
activity.  H. R. Rep. No. 94-1487, p. 16 (1976) (House
Report); S. R. Rep. No. 94-1310, p. 16 (1976) (Senate
Report).  Nelson alleges that petitioners harmed him in
the course of engaging in their commercial enterprise, as
a direct result of their commercial acts.  His claim, in
other words, is -based upon commercial activity.-
  Indeed, I am somewhat at a loss as to what exactly the
majority believes petitioners have done that a private
employer could not.  As countless cases attest, retaliation
for whistleblowing is not a practice foreign to the market-
place.  Congress passed a statute in response to such
behavior, see Whistleblower Protection Act of 1989, 5
U. S. C. 1213 et seq. (1988 ed., Supp. III), as have
numerous States.  On occasion, private employers also
have been known to retaliate by enlisting the help of
police officers to falsely arrest employees.  See, e.g.,
Rosario v. Amalgamated Ladies Garment Cutters' Union,
605 F. 2d 1228, 1233, 1247-1248 (CA2 1979), cert. denied,
446 U. S. 919 (1980).  More generally, private parties
have been held liable for conspiring with public authorities
to effectuate an arrest, see, e.g., Adickes v. S. H. Kress
& Co., 398 U. S. 144 (1970), and for using private securi-
ty personnel for the same purposes.  See Albright v.
Longview Police Dept., 884 F. 2d 835, 841-842 (CA5 1989).
  Therefore, had the hospital retaliated against Nelson by
hiring thugs to do the job, I assume the majority-no
longer able to describe this conduct as -a foreign state's
exercise of the power of its police,- ante, at 12-would
consent to calling it -commercial.-  For, in such circum-
stances, the state-run hospital would be operating as any
private participant in the marketplace and respondents'
action would be based on the operation by Saudi Arabia's
agents of a commercial business.
  At the heart of the majority's conclusion, in other words,
is the fact that the hospital in this case chose to call in
government security forces.  See ante, at 12-13.  I find
this fixation on the intervention of police officers, and the
ensuing characterization of the conduct as -peculiarly
sovereign in nature,- ante, at 12, to be misguided.  To
begin, it fails to capture respondents' complaint in full.
Far from being directed solely at the activities of the
Saudi police, it alleges that agents of the hospital sum-
moned Nelson to its security office because he reported
safety concerns and that the hospital played a part in the
subsequent beating and imprisonment.  App. 5, 14.
Without more, that type of behavior hardly qualifies as
sovereign.  Thus, even assuming for the sake of argument
that the role of the official police somehow affected the
nature of petitioners' conduct, the claim cannot be said to
-rest[] entirely upon activities sovereign in character.-  See
ante, at 8, n. 4.  At the very least it -consists of both
commercial and sovereign elements,- thereby presenting
the specific question the majority chooses to elude.  See
ibid.  The majority's single-minded focus on the exercise
of police power, while certainly simplifying the case, thus
hardly does it justice.
  Reliance on the fact that Nelson's employer enlisted the
help of public rather than private security personnel is
also at odds with Congress' intent.  The purpose of the
commercial exception being to prevent foreign states from
taking refuge behind their sovereignty when they act as
market participants, it seems to me that this is precisely
the type of distinction we should seek to avoid.  Because
both the hospital and the police are agents of the state,
the case in my mind turns on whether the sovereign is
acting in a commercial capacity, not on whether it resorts
to thugs or government officers to carry on its business.
That, when the hospital calls in security to get even with
a whistleblower, it comes clothed in police apparel says
more about the state-owned nature of the commercial
enterprise than about the noncommercial nature of its
tortious conduct.  I had thought the issue put to rest
some time ago when, in a slightly different context, Chief
Justice Marshall observed:
-It is, we think, a sound principle, that when a gov-
ernment becomes a partner in any trading company,
it devests itself, so far as concerns the transactions
of that company, of its sovereign character, and takes
that of a private citizen.  Instead of communicating
to the company its privileges and its prerogatives, it
descends to a level with those with whom it associ-
ates itself, and takes the character which belongs to
its associates, and to the business which is to be
transacted.-  Bank of United States v. Planters' Bank
of Georgia, 9 Wheat. 904, 907 (1824).

See also Alfred Dunhill of London, Inc. v. Cuba, 425 U. S.
682, 695-696 (1976) (plurality opinion).

                            C
  Contrary to the majority's suggestion, ante, at 13, this
conclusion does not involve inquiring into the purpose of
the conduct.  Matters would be different, I suppose, if
Nelson had been recruited to work in the Saudi police
force and, having reported safety violations, suffered
retributive punishment, for there the Saudi authorities
would be engaged in distinctly sovereign activities.  Cf.
House Report, at 16 (-Also public or governmental and not
commercial in nature, would be the employment of diplo-
matic, civil service, or military personnel-); Senate Report,
at 16.  The same would be true if Nelson was a mere
tourist in Saudi Arabia and had been summarily expelled
by order of immigration officials.  See Arango v. Guzman
Travel Advisors Corp., 621 F. 2d 1371 (CA5 1980).  In
this instance, however, the state-owned hospital was
engaged in ordinary commercial business and -[i]n their
commercial capacities, foreign governments do not exercise
powers peculiar to sovereigns.  Instead, they exercise only
those powers that can also be exercised by private citi-
zens.-  Alfred Dunhill, supra, at 704 (plurality opinion).
As we recently stated, -when a foreign government acts,
not as regulator of a market, but in the manner of a
private player within it, the foreign sovereign's actions are
`commercial' within the meaning of the FSIA.-  Republic
of Argentina v. Weltover, Inc., 504 U. S. ___, ___ (1992)
(slip op., at 6).  That, I believe, is the case here.

                           II
  Nevertheless, I reach the same conclusion as the
majority because petitioners' commercial activity was not
-carried on in the United States.-  The Act defines such
conduct as -commercial activity . . . having substantial
contact with the United States.-  28 U. S. C. 1603(e).
Respondents point to the hospital's recruitment efforts in
the United States, including advertising in the American
media, and the signing of the employment contract in
Miami.  See Brief for Respondents 43-45.  As I earlier
noted, while these may very well qualify as commercial
activity in the United States, they do not constitute the
commercial activity upon which respondents' action is
based.  Conversely, petitioners' commercial conduct in
Saudi Arabia, though constituting the basis of the Nelsons'
suit, lacks a sufficient nexus to the United States.
Neither the hospital's employment practices, nor its
disciplinary procedures, has any apparent connection to
this country.  On that basis, I agree that the Act does not
grant the Nelsons access to our courts.