DOLE FOOD CO. et al. v. PATRICKSON et al.

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468 OCTOBER TERM, 2002
Syllabus
DOLE FOOD CO. et al. v. PATRICKSON et al.
certiorari to the united states court of appeals for
the ninth circuit
No. 01–593. Argued January 22, 2003—Decided April 22, 2003*
Plaintiffs filed a state-court action against Dole Food Company and others
(Dole petitioners), alleging injury from chemical exposure. The Dole
petitioners impleaded petitioners Dead Sea Bromine Co. and Bromine
Compounds, Ltd. (collectively, the Dead Sea Companies). The Dole
petitioners removed the action to federal court under 28 U. S. C.
§ 1441(a), arguing that the federal common law of foreign relations pro-
vided federal-question jurisdiction under § 1331. The District Court
agreed it had jurisdiction, but dismissed the case on other grounds. As
to the Dead Sea Companies, the court rejected their claim that they are
instrumentalities of a foreign state (Israel) as defined by the Foreign
Sovereign Immunities Act of 1976 (FSIA), and are therefore entitled to
removal under § 1441(d). The Ninth Circuit reversed. As to the Dole
petitioners, it held removal could not rest on the federal common law of
foreign relations. Regarding the Dead Sea Companies, the court noted,
but declined to answer, the question whether status as an instrumental-
ity of a foreign state is assessed at the time of the alleged wrongdoing
or at the time suit is filed. It held that the Dead Sea Companies, even
at the earlier date, were not instrumentalities of Israel because they did
not meet the FSIA’s instrumentality definition.
Held:
1. The writ of certiorari is dismissed in No. 01–593, as the Dole peti-
tioners did not seek review in this Court of the Ninth Circuit’s ruling
on the federal common law of foreign relations. P. 472.
2. A foreign state must itself own a majority of a corporation’s shares
if the corporation is to be deemed an instrumentality of the state under
the FSIA. Israel did not have direct ownership of shares in either of
the Dead Sea Companies at any time pertinent to this action. Rather,
they were, at various times, separated from Israel by one or more inter-
mediate corporate tiers. As indirect subsidiaries of Israel, the compa-
nies cannot come within the statutory language granting instrumental-
ity status to an entity a “majority of whose shares or other ownership
interest is owned by a foreign state or political subdivision thereof.”
*Together with No. 01–594, Dead Sea Bromine Co., Ltd., et al. v. Pat-
rickson et al., also on certiorari to the same court.

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Syllabus
§ 1603(b)(2). Only direct ownership satisfies the statutory requirement.
In issues of corporate law structure often matters. The statutory ref-
erence to ownership of “shares” shows that Congress intended coverage
to turn on formal corporate ownership. As a corporation and its share-
holders are distinct entities, see, e. g., First Nat. City Bank v. Banco
Para el Comercio Exterior de Cuba, 462 U. S. 611, 625, a corporate par-
ent which owns a subsidiary’s shares does not, for that reason alone,
own or have legal title to the subsidiary’s assets; and, it follows with
even greater force, the parent does not own or have legal title to the
subsidiary’s subsidiaries. The veil separating corporations and their
shareholders may be pierced in certain exceptional circumstances, but
the Dead Sea Companies refer to no authority for extending the doc-
trine so far that, as a categorical matter, all subsidiaries are deemed to
be the same as the parent corporation. Various federal statutes refer
to “direct or indirect ownership.” The absence of this language in
§ 1603(b) instructs the Court that Congress did not intend to disregard
structural ownership rules here. That section’s “other ownership inter-
est” phrase, when following the word “shares,” should be interpreted to
refer to a type of interest other than stock ownership. Reading the
phrase to refer to a state’s interest in entities further down the corpo-
rate ladder would make the specific reference to “shares” redundant.
The fact that Israel exercised considerable control over the companies
may not be substituted for an ownership interest, since control and own-
ership are distinct concepts, and it is majority ownership by a foreign
state, not control, that is the benchmark of instrumentality status.
Pp. 473–478.
3. Instrumentality status is determined at the time of the filing of
the complaint. Construing § 1603(b)(2) so that the present tense in the
provision “a majority of whose shares . . . is owned by a foreign state”
has real significance is consistent with the longstanding principle that
the Court’s jurisdiction depends upon the state of things at the time the
action is brought. E. g., Keene Corp. v. United States, 508 U. S. 200,
207. The Dead Sea Companies’ attempt to compare foreign sovereign
immunity with other immunities that are based on a government offi-
cer’s status at the time of the conduct giving rise to the suit is inapt
because the reason for those other immunities does not apply here. Un-
like those immunities, foreign sovereign immunity is not meant to avoid
chilling foreign states or their instrumentalities in the conduct of their
business but to give them some protection from the inconvenience of
suit as a gesture of comity, Verlinden B. V. v. Central Bank of Nigeria,
461 U. S. 480, 486. Because any relationship recognized under the
FSIA between the Dead Sea Companies and Israel had been severed
before suit was commenced, the companies would not be entitled to in-

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strumentality status even if their theory that such status could be con-
ferred on a subsidiary were accepted. Pp. 478–480.
No. 01–593, certiorari dismissed; No. 01–594, affirmed. Reported below:
251 F. 3d 795.
Kennedy, J., delivered the opinion for a unanimous Court with respect
to Parts I, II–A, and II–C, and the opinion of the Court with respect to
Part II–B, in which Rehnquist, C. J., and Stevens, Scalia, Souter,
Thomas, and Ginsburg, JJ., joined. Breyer, J., filed an opinion concur-
ring in part and dissenting in part, in which O’Connor, J., joined, post,
p. 480.
Peter R. Paden argued the cause for petitioners in both
cases. With him on the briefs in No. 01–594 were Philip E.
Karmel, Laurence A. Horvath, Thomas C. Walsh, and James
F. Bennett. On the briefs in No. 01–593 were Robert H. Klo-
noff, Daniel H. Bromberg, Terence M. Murphy, Michael L.
Rice, Robert G. Crow, Richard C. Sutton, Jr., Robert T.
Greig, Boaz S. Morag, Michael L. Brem, F. Walter Conrad,
Jr., D. Ferguson McNiel III, Charles W. Schwartz, and R.
Burton Ballanfant.
Jonathan S. Massey argued the cause for respondents in
both cases. With him on the brief was Christian H.
Hartley.
Jeffrey P. Minear argued the cause for the United States
as amicus curiae urging affirmance. With him on the brief
were Solicitor General Olson, Assistant Attorney General
McCallum, Deputy Solicitor General Kneedler, Douglas N.
Letter, H. Thomas Byron III, and William Howard Taft IV.†
Justice Kennedy delivered the opinion of the Court.
Foreign states may invoke certain rights and immunities
in litigation under the Foreign Sovereign Immunities Act of
†
Briefs of amici curiae urging reversal were filed for the Republic of
Ireland et al. by Martin R. Baach and James P. Davenport; and for Con-
sortium de Re´ alisation et al. by George J. Terwilliger III, Darryl S. Lew,
and R. Shawn Gunnarson.

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1976 (FSIA or Act), Pub. L. 94–583, 90 Stat. 2891. Some of
the Act’s provisions also may be invoked by a corporate en-
tity that is an “instrumentality” of a foreign state as defined
by the Act. Republic of Argentina v. Weltover, Inc., 504
U. S. 607, 611 (1992); Verlinden B. V. v. Central Bank of Ni-
geria, 461 U. S. 480, 488 (1983). The corporate entities in
this action claim instrumentality status to invoke the Act’s
provisions allowing removal of state-court actions to federal
court. As the action comes to us, it presents two questions.
The first is whether a corporate subsidiary can claim instru-
mentality status where the foreign state does not own a ma-
jority of its shares but does own a majority of the shares of
a corporate parent one or more tiers above the subsidiary.
The second question is whether a corporation’s instrumental-
ity status is defined as of the time an alleged tort or other
actionable wrong occurred or, on the other hand, at the time
suit is filed. We granted certiorari, 536 U. S. 956 (2002).
I
The underlying action was filed in a state court in Hawaii
in 1997 against Dole Food Company and other companies
(Dole petitioners). Plaintiffs in the action were a group of
farm workers from Costa Rica, Ecuador, Guatemala, and
Panama who alleged injury from exposure to dibromochloro-
propane, a chemical used as an agricultural pesticide in their
home countries. The Dole petitioners impleaded petitioners
Dead Sea Bromine Co., Ltd., and Bromine Compounds, Ltd.
(collectively, the Dead Sea Companies). The merits of the
suit are not before us.
The Dole petitioners removed the action to the United
States District Court for the District of Hawaii under 28
U. S. C. § 1441(a), arguing that the federal common law
of foreign relations provided federal-question jurisdiction
under § 1331. The District Court agreed there was federal
subject-matter jurisdiction under the federal common law of

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foreign relations but, nevertheless, dismissed the case on
grounds of forum non conveniens.
The Dead Sea Companies removed under a separate the-
ory. They claimed to be instrumentalities of a foreign state
as defined by the FSIA, entitling them to removal under
§ 1441(d). The District Court held that the Dead Sea Com-
panies are not instrumentalities of a foreign state for pur-
poses of the FSIA and are not entitled to removal on that
basis. Civ. No. 97–01516HG (D. Haw., Sept. 9, 1998), App. to
Pet. for Cert. in No. 01–594, p. 79a.
The Court of Appeals reversed. Addressing the ground
relied on by the Dole petitioners, it held removal could not
rest on the federal common law of foreign relations. 251
F. 3d 795, 800 (CA9 2001). In this Court the Dole petition-
ers did not seek review of that portion of the Court of Ap-
peals’ ruling, and we do not address it. Accordingly, the
writ of certiorari in No. 01–593 is dismissed.
The Court of Appeals also reversed the order allowing
removal at the instance of the Dead Sea Companies, who
alleged they were instrumentalities of the State of Israel.
The Court of Appeals noted, but declined to answer, the
question whether status as an instrumentality of a foreign
state is assessed at the time of the alleged wrongdoing or at
the time suit is filed. It went on to hold that the Dead Sea
Companies, even at the earlier date, were not instrumentali-
ties of Israel because they did not meet the Act’s definition
of instrumentality.
In order to prevail here, the Dead Sea Companies must
show both that instrumentality status is determined as of
the time the alleged tort occurred and that they can claim
instrumentality status even though they were but subsidiar-
ies of a parent owned by the State of Israel. We address
each question in turn. In No. 01–594, the case in which the
Dead Sea Companies are petitioners, we now affirm.

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II
A
Title 28 U. S. C. § 1441(d) governs removal of actions
against foreign states. It provides that “[a]ny civil action
brought in a State court against a foreign state as defined in
[28 U. S. C. § 1603(a)] may be removed by the foreign state
to the district court of the United States for the district and
division embracing the place where such action is pending.”
See also § 1330 (governing original jurisdiction). Section
1603(a), part of the FSIA, defines “foreign state” to include
an “agency or instrumentality of a foreign state.” “[A]gency
or instrumentality of a foreign state” is defined, in turn, as:
“[A]ny entity—
“(1) which is a separate legal person, corporate or oth-
erwise, and
“(2) which is an organ of a foreign state or political
subdivision thereof, or a majority of whose shares or
other ownership interest is owned by a foreign state or
political subdivision thereof, and
“(3) which is neither a citizen of a State of the United
States . . . nor created under the laws of any third coun-
try.” § 1603(b).
B
The Court of Appeals resolved the question of the FSIA’s
applicability by holding that a subsidiary of an instrumental-
ity is not itself entitled to instrumentality status. Its hold-
ing was correct.
The State of Israel did not have direct ownership of shares
in either of the Dead Sea Companies at any time pertinent to
this suit. Rather, these companies were, at various times,
separated from the State of Israel by one or more intermedi-
ate corporate tiers. For example, from 1984–1985, Israel
wholly owned a company called Israeli Chemicals, Ltd.;
which owned a majority of shares in another company called

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Dead Sea Works, Ltd.; which owned a majority of shares in
Dead Sea Bromine Co., Ltd.; which owned a majority of
shares in Bromine Compounds, Ltd.
The Dead Sea Companies, as indirect subsidiaries of the
State of Israel, were not instrumentalities of Israel under
the FSIA at any time. Those companies cannot come within
the statutory language which grants status as an instrumen-
tality of a foreign state to an entity a “majority of whose
shares or other ownership interest is owned by a foreign
state or political subdivision thereof.” § 1603(b)(2). We
hold that only direct ownership of a majority of shares by
the foreign state satisfies the statutory requirement.
Section 1603(b)(2) speaks of ownership. The Dead Sea
Companies urge us to ignore corporate formalities and use
the colloquial sense of that term. They ask whether, in com-
mon parlance, Israel would be said to own the Dead Sea
Companies. We reject this analysis. In issues of corporate
law structure often matters. It is evident from the Act’s
text that Congress was aware of settled principles of corpo-
rate law and legislated within that context. The language
of § 1603(b)(2) refers to ownership of “shares,” showing that
Congress intended statutory coverage to turn on formal cor-
porate ownership. Likewise, § 1603(b)(1), another compo-
nent of the definition of instrumentality, refers to a “separate
legal person, corporate or otherwise.” In light of these indi-
cia that Congress had corporate formalities in mind, we as-
sess whether Israel owned shares in the Dead Sea Compa-
nies as a matter of corporate law, irrespective of whether
Israel could be said to have owned the Dead Sea Companies
in everyday parlance.
A basic tenet of American corporate law is that the corpo-
ration and its shareholders are distinct entities. See, e. g.,
First Nat. City Bank v. Banco Para el Comercio Exterior
de Cuba, 462 U. S. 611, 625 (1983) (“Separate legal personal-
ity has been described as ‘an almost indispensable aspect of
the public corporation’ ”); Burnet v. Clark, 287 U. S. 410, 415

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(1932) (“A corporation and its stockholders are generally to
be treated as separate entities”). An individual share-
holder, by virtue of his ownership of shares, does not own the
corporation’s assets and, as a result, does not own subsidiary
corporations in which the corporation holds an interest. See
1 W. Fletcher, Cyclopedia of the Law of Private Corporations
§ 31 (rev. ed. 1999). A corporate parent which owns the
shares of a subsidiary does not, for that reason alone, own or
have legal title to the assets of the subsidiary; and, it follows
with even greater force, the parent does not own or have
legal title to the subsidiaries of the subsidiary. See id., § 31,
at 514 (“The properties of two corporations are distinct,
though the same shareholders own or control both. A hold-
ing corporation does not own the subsidiary’s property”).
The fact that the shareholder is a foreign state does not
change the analysis. See First Nat. City Bank, supra, at
626–627 (“[G]overnment instrumentalities established as ju-
ridical entities distinct and independent from their sovereign
should normally be treated as such”).
Applying these principles, it follows that Israel did not
own a majority of shares in the Dead Sea Companies. The
State of Israel owned a majority of shares, at various times,
in companies one or more corporate tiers above the Dead Sea
Companies, but at no time did Israel own a majority of
shares in the Dead Sea Companies. Those companies were
subsidiaries of other corporations.
The veil separating corporations and their shareholders
may be pierced in some circumstances, and the Dead Sea
Companies essentially urge us to interpret the FSIA as pier-
cing the veil in all cases. The doctrine of piercing the corpo-
rate veil, however, is the rare exception, applied in the case
of fraud or certain other exceptional circumstances, see, e. g.,
Burnet, supra, at 415; Fletcher, supra, §§ 41 to 41.20, and
usually determined on a case-by-case basis. The Dead Sea
Companies have referred us to no authority for extending
the doctrine so far that, as a categorical matter, all subsidiar-

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ies are deemed to be the same as the parent corporation.
The text of the FSIA gives no indication that Congress in-
tended us to depart from the general rules regarding corpo-
rate formalities.
Where Congress intends to refer to ownership in other
than the formal sense, it knows how to do so. Various fed-
eral statutes refer to “direct and indirect ownership.” See,
e. g., 5 U. S. C. § 8477(a)(4)(G)(iii) (referring to an interest
“owned directly or indirectly”); 12 U. S. C. § 84(c)(5) (refer-
ring to “any corporation wholly owned directly or indirectly
by the United States”); 15 U. S. C. § 79b(a)(8)(A) (referring
to securities “which are directly or indirectly owned, con-
trolled, or held with power to vote”); § 1802(3) (“The term
‘newspaper owner’ means any person who owns or controls
directly, or indirectly through separate or subsidiary corpo-
rations, one or more newspaper publications”). The absence
of this language in 28 U. S. C. § 1603(b) instructs us that Con-
gress did not intend to disregard structural ownership rules.
The FSIA’s definition of instrumentality refers to a foreign
state’s majority ownership of “shares or other ownership
interest.” § 1603(b)(2). The Dead Sea Companies would
have us read “other ownership interest” to include a state’s
“interest” in its instrumentality’s subsidiary. The better
reading of the text, in our view, does not support this argu-
ment. The words “other ownership interest,” when follow-
ing the word “shares,” should be interpreted to refer to a
type of interest other than ownership of stock. The statute
had to be written for the contingency of ownership forms in
other countries, or even in this country, that depart from
conventional corporate structures. The statutory phrase
“other ownership interest” is best understood to accomplish
this objective. Reading the term to refer to a state’s inter-
est in entities lower on the corporate ladder would make the
specific reference to “shares” redundant. Absent a statu-
tory text or structure that requires us to depart from normal
rules of construction, we should not construe the statute in

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a manner that is strained and, at the same time, would ren-
der a statutory term superfluous. See Mertens v. Hewitt
Associates, 508 U. S. 248, 258 (1993) (“We will not read the
statute to render the modifier superfluous”); United States v.
Nordic Village, Inc., 503 U. S. 30, 36 (1992) (declining to
adopt a construction that would violate the “settled rule that
a statute must, if possible, be construed in such fashion that
every word has some operative effect”).
The Dead Sea Companies say that the State of Israel exer-
cised considerable control over their operations, notwith-
standing Israel’s indirect relationship to those companies.
They appear to think that, in determining instrumentality
status under the Act, control may be substituted for an
ownership interest. Control and ownership, however, are
distinct concepts. See, e. g., United States v. Bestfoods,
524 U. S. 51, 64–65 (1998) (distinguishing between “opera-
tion” and “ownership” of a subsidiary’s assets for purposes
of Comprehensive Environmental Response, Compensation,
and Liability Act of 1980 liability). The terms of § 1603(b)(2)
are explicit and straightforward. Majority ownership by a
foreign state, not control, is the benchmark of instrumental-
ity status. We need not delve into Israeli law or examine
the extent of Israel’s involvement in the Dead Sea Compa-
nies’ operations. Even if Israel exerted the control the
Dead Sea Companies describe, that would not give Israel
a “majority of [the companies’] shares or other ownership
interest.” The statutory language will not support a control
test that mandates inquiry in every case into the past details
of a foreign nation’s relation to a corporate entity in which
it does not own a majority of the shares.
The better rule is the one supported by the statutory text
and elementary principles of corporate law. A corporation
is an instrumentality of a foreign state under the FSIA only
if the foreign state itself owns a majority of the corpora-
tion’s shares.

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We now turn to the second question before us, which pro-
vides an alternative reason for affirming the Court of Ap-
peals. See Woods v. Interstate Realty Co., 337 U. S. 535,
537 (1949).
C
To be entitled to removal under § 1441(d), the Dead Sea
Companies must show that they are entities “a majority of
whose shares or other ownership interest is owned by a for-
eign state.” § 1603(b)(2). We think the plain text of this
provision, because it is expressed in the present tense, re-
quires that instrumentality status be determined at the time
suit is filed.
Construing § 1603(b) so that the present tense has real sig-
nificance is consistent with the “longstanding principle that
‘the jurisdiction of the Court depends upon the state of
things at the time of the action brought.’ ” Keene Corp.
v. United States, 508 U. S. 200, 207 (1993) (quoting Mollan
v. Torrance, 9 Wheat. 537, 539 (1824)). It is well settled,
for example, that federal-diversity jurisdiction depends on
the citizenship of the parties at the time suit is filed. See,
e. g., Anderson v. Watt, 138 U. S. 694, 702–703 (1891) (“And
the [jurisdictional] inquiry is determined by the condition
of the parties at the commencement of the suit”); see also
Minneapolis & St. Louis R. Co. v. Peoria & Pekin Union
R. Co., 270 U. S. 580, 586 (1926) (“The jurisdiction of the
lower court depends upon the state of things existing at the
time the suit was brought”). The Dead Sea Companies do
not dispute that the time suit is filed is determinative under
§ 1332(a)(4), which provides for suits between “a foreign
state, defined in section 1603(a) . . . , as plaintiff and citizens
of a State or of different States.” It would be anomalous to
read § 1441(d)’s words, “foreign state as defined in section
1603(a),” differently.
The Dead Sea Companies urge us to administer the FSIA
like other status-based immunities, such as the qualified im-
munity accorded a state actor, that are based on the status

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of an officer at the time of the conduct giving rise to the suit.
We think its comparison is inapt. Our cases applying those
immunities do not involve the interpretation of a statute.
See, e. g., Spalding v. Vilas, 161 U. S. 483, 493–499 (1896)
(basing a decision regarding official immunity on common
law and considerations of “convenience and public policy”);
Scheuer v. Rhodes, 416 U. S. 232, 239–242 (1974).
The reason for the official immunities in those cases does
not apply here. The immunities for government officers
prevent the threat of suit from “crippl[ing] the proper and
effective administration of public affairs.” Spalding, supra,
at 498 (discussing immunity for executive officers); see also
Pierson v. Ray, 386 U. S. 547, 554 (1967) ( judicial immunity
serves the public interest in judges who are “at liberty to
exercise their functions with independence and without fear
of consequences” (internal quotation marks omitted)). For-
eign sovereign immunity, by contrast, is not meant to avoid
chilling foreign states or their instrumentalities in the con-
duct of their business but to give foreign states and their
instrumentalities some protection from the inconvenience of
suit as a gesture of comity between the United States and
other sovereigns. Verlinden, 461 U. S., at 486.
For the same reason, the Dead Sea Companies’ reliance on
Nixon v. Fitzgerald, 457 U. S. 731 (1982), is unavailing.
There, we recognized that the President was immune from
liability for official actions taken during his time in office,
even against a suit filed when he was no longer serving in
that capacity. The immunity served the same function that
the other official immunities serve. See id., at 751 (“Because
of the singular importance of the President’s duties, diver-
sion of his energies by concern with private lawsuits would
raise unique risks to the effective functioning of govern-
ment”). As noted above, immunity under the FSIA does
not serve the same purpose.
The immunity recognized in Nixon was also based on a
further rationale, one not applicable here: the constitutional

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separation of powers. See id., at 749 (“We consider this im-
munity a functionally mandated incident of the President’s
unique office, rooted in the constitutional tradition of the sep-
aration of powers and supported by our history”). That ra-
tionale is not implicated by the statutory immunity Congress
created for actions such as the one before us.
Any relationship recognized under the FSIA between the
Dead Sea Companies and Israel had been severed before suit
was commenced. As a result, the Dead Sea Companies
would not be entitled to instrumentality status even if their
theory that instrumentality status could be conferred on a
subsidiary were accepted.
* * *
For these reasons, we hold first that a foreign state must
itself own a majority of the shares of a corporation if the
corporation is to be deemed an instrumentality of the state
under the provisions of the FSIA; and we hold second that
instrumentality status is determined at the time of the filing
of the complaint.
The judgment of the Court of Appeals in No. 01–594
is affirmed, and the writ of certiorari in No. 01–593 is
dismissed.
It is so ordered.
Justice Breyer, with whom Justice O’Connor joins,
concurring in part and dissenting in part.
I join Parts I, II–A, and II–C, and dissent only from
Part II–B, of the Court’s opinion. Unlike the majority,
I believe that the statutory phrase “other ownership interest
. . . owned by a foreign state,” 28 U. S. C. § 1603(b)(2), covers
a Foreign Nation’s legal interest in a Corporate Subsidiary,
where that interest consists of the Foreign Nation’s own-
ership of a Corporate Parent that owns the shares of the
Subsidiary.

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Opinion of Breyer, J.
The Foreign Sovereign Immunities Act of 1976 (FSIA)
sets forth legal criteria for determining when a “foreign
state,” 28 U. S. C. § 1603(a), can assert a defense of sovereign
immunity. The FSIA also specifies that a “foreign state”
defendant may ask a federal court to make the relevant
sovereign immunity determination. § 1441(d). And the
FSIA allows certain foreign-state commercial entities not
entitled to sovereign immunity to have the merits of a case
heard in federal court. §§ 1330(a), 1441(d), 1605(a)(2).
These last-mentioned entities, entitled to invoke federal-
court jurisdiction, include corporations that fall within the
FSIA’s definition of an “agency or instrumentality of a for-
eign state,” §§ 1603(a), (b).
The corporate defendants here, subsidiaries of a foreign
parent corporation, fall within that definition if “a majority
of [their] shares or other ownership interest is owned by”
a foreign nation. § 1603(b)(2) (emphasis added). The rele-
vant foreign nation does not directly own a majority of the
corporate subsidiaries’ shares. But (simplifying the facts) it
does own a corporate parent, which, in turn, owns the corpo-
rate subsidiaries’ shares. See ante, at 473–474.
Does this type of majority-ownership interest count as an
example of what the statute calls an “other ownership inter-
est”? The Court says no, holding that the text of the FSIA
requires that “only direct ownership of a majority of shares
by the foreign state satisfies the statutory requirement.”
Ante, at 474 (emphasis added). I disagree.
The statute’s language, standing alone, cannot answer the
question. That is because the words “own” and “owner-
ship”—neither of which is defined in the FSIA—are not tech-
nical terms or terms of art but common terms, the precise
legal meaning of which depends upon the statutory context
in which they appear. See J. Cribbet & C. Johnson, Prin-
ciples of the Law of Property 16 (3d ed. 1989) (“Anglo-
American law has not made much use of the term ownership
in a technical sense”); Black’s Law Dictionary 1049, 1105 (6th

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ed. 1990) (“The term [‘owner’] is . . . a nomen generalissi-
mum”—a “term of the most general meaning” or “of the
most general kind”—“and its meaning is to be gathered from
the connection in which it is used, and from the subject-
matter to which it is applied”). See also Williams v. Taylor,
529 U. S. 420, 431 (2000) (“We give the words of a statute
their ordinary, contemporary, common meaning, ab-
sent an indication Congress intended them to bear some dif-
ferent import” (internal quotation marks omitted; emphasis
added)).
Thus, this Court has held that “shipowne[r]” can include
a corporate shareholder even though, technically speaking,
the corporation, not the shareholder, owns the ship. Flink
v. Paladini, 279 U. S. 59, 62–63 (1929) (emphasis added).
Moreover, this Court has held that a trademark can be
“owned by” a parent corporation even though, technically
speaking, a subsidiary corporation, not the parent, registered
and thus owned the mark. K mart Corp. v. Cartier, Inc.,
486 U. S. 281, 292 (1988) (opinion of Kennedy, J.) (emphasis
added) (noting “the inability to discern” which “entit[y] . . .
can be said to ‘own’ the . . . trademark if . . . the domestic
subsidiary is wholly owned by its foreign parent”); id., at 318
(Scalia, J., concurring in part and dissenting in part) (“It
may be reasonable for some purposes to say that a trade-
mark nominally owned by a domestic subsidiary is ‘owned
by’ its foreign parent corporation”); id., at 319 (“A parent
corporation may or may not be said to ‘own’ the assets owned
by its subsidiary”). Similarly, here the words “other owner-
ship interest” might, or might not, refer to the kind of
majority-ownership interest that arises when one owns the
shares of a parent that, in turn, owns a subsidiary. If a
shareholder in Company A is an “owner” of Company A’s
ship, as in Flink, then why should the shareholder not be an
“owner” of Company A’s subsidiary? If Company A’s trade-
mark can be said to be “owned by” its shareholder, as in
K mart, then why should Company A’s subsidiary not be said

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to be “owned by” its shareholder? And, at the very least,
can we not say that the shareholder has an “ownership inter-
est” in the subsidiary?
Neither do the various linguistic indicia to which the ma-
jority points help resolve the question. As the majority
points out, the statute’s use of the word “shares” leans in
favor of reading “ownership” as incorporating formal, techni-
cal American legal requirements. Ante, at 474–475. But
any resulting suggestion of formal technical limitation is
neatly counterbalanced by the fact that the “statute had to
be written for the contingency of ownership forms in other
countries, or even in this country, that depart from conven-
tional corporate structures.” Ante, at 476. And given this
latter necessity, there is no reason to read the phrase “shares
or other” as if those words meant to exclude from the scope
of “other” any kind of mixed, say, debt/equity, ownership ar-
rangement that might involve shares only in part.
The majority’s further claim that Congress’ use of the
word “ownership” means “only direct ownership,” ante, at
474 (emphasis added), or formal ownership, founders upon
Flink, supra, and K mart, supra, as well as upon several
statutes that demonstrate that Congress felt it necessary ex-
plicitly to use the word “direct” (a word missing in the FSIA)
in order to achieve that result. See, e. g., 20 U. S. C. § 1087–
3(a) (“common shares . . . directly owned by a Holding Com-
pany” (emphasis added)); 26 U. S. C. § 165(g)(3)(A) (requiring
that “the taxpayer owns directly stock” in a corporation (em-
phasis added)); § 851(c)(3)(A) (stock “owned directly by one
or more of the other corporations” (emphasis added)). Were
the Court’s logic correct, see ante, at 476–477, the word “di-
rect” in these statutes would be redundant.
The majority’s “veil piercing” argument, ante, at 475–476,
is beside the point. So is the majority’s reiteration of the
separateness of a corporation and its shareholders, ante, at
474–475, a formal separateness that this statute explicitly
sets aside. See 28 U. S. C. §§ 1603(a), (b) (acknowledging the

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separateness of a corporate entity but nevertheless deliber-
ately conferring the “foreign state” status of the shareholder
upon the corporation itself); H. R. Rep. No. 94–1487, p. 15
(1976) (same). See also Working Group of the American Bar
Association, Reforming the Foreign Sovereign Immunities
Act, 40 Colum. J. Transnat’l L. 489, 517–518 (2002) (herein-
after ABA Working Group) (FSIA rejects the “separate-
entity” rule that courts had often applied to deny immunity
to state-owned corporations).
Statutory interpretation is not a game of blind man’s bluff.
Judges are free to consider statutory language in light of a
statute’s basic purposes. And here, as in Flink, supra, and
K mart, supra, an examination of those purposes sheds con-
siderable light. The statute itself makes clear that it seeks:
(1) to provide a foreign-state defendant in a legal action the
right to have its claim of a sovereign immunity bar decided
by the “courts of the United States,” i. e., the federal courts,
28 U. S. C. § 1604; see § 1441(d); and (2) to make certain that
the merits of unbarred claims against foreign states, say,
states engaging in commercial activities, see § 1605(a)(2), will
be decided “in the same manner” as similar claims against
“a private individual,” § 1606; but (3) to guarantee a foreign
state defending an unbarred claim certain protections, in-
cluding a prohibition of punitive damages, the right to
removal to federal court, a trial before a judge, and other
procedural rights (related to service of process, venue,
attachment, and execution of judgments). §§ 1330, 1391(f),
1441(d), 1606, 1608–1611. See Verlinden B. V. v. Central
Bank of Nigeria, 461 U. S. 480, 497 (1983) (“Congress delib-
erately sought to channel cases against foreign sovereigns
away from the state courts and into federal courts”); H. R.
Rep. No. 94–1487, at 32 (“giv[ing] foreign states clear author-
ity to remove to a Federal forum actions brought against
them in the State courts” in light of “the potential sensitivity
of actions against foreign states and the importance of devel-
oping a uniform body of law in this area”); id., at 13 (“Such

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broad jurisdiction in the Federal courts should be conducive
to uniformity in decision, which is desirable since a disparate
treatment of cases involving foreign governments may have
adverse foreign relations consequences”).
Most important for present purposes, the statute seeks to
guarantee these protections to the foreign nation not only
when it acts directly in its own name but also when it acts
through separate legal entities, including corporations and
other “organ[s].” 28 U. S. C. § 1603(b).
Given these purposes, what might lead Congress to grant
protection to a Foreign Nation acting through a Corporate
Parent but deny the same protection to the Foreign Nation
acting through, for example, a wholly owned Corporate Sub-
sidiary? The answer to this question is: In terms of the
statute’s purposes, nothing at all would lead Congress to
make such a distinction.
As far as this statute is concerned, decisions about how to
incorporate, how to structure corporate entities, or whether
to act through a single corporate layer or through several
corporate layers are matters purely of form, not of substance.
Cf. H. R. Rep. No. 94–1487, at 15 (agencies or instrumentali-
ties “could assume a variety of forms”); First Nat. City Bank
v. Banco Para el Comercio Exterior de Cuba, 462 U. S. 611,
625 (1983) (noting that “developing countries” often “estab-
lish separate juridical entities . . . to make large-scale na-
tional investments”). The need for federal-court determin-
ation of a sovereign immunity claim is no less important
where subsidiaries are involved. The need for procedural
protections is no less compelling. The risk of adverse for-
eign policy consequences is no less great. See ABA Work-
ing Group 523 (“The strength of a foreign state’s sovereign
interests . . . does not necessarily dissipate when it employs
more complicated legal structures resembling those used by
modern private businesses”); Dellapenna, Refining the For-
eign Sovereign Immunities Act, 9 Willamette J. Int’l L. &
Disp. Resol. 57, 92–93 (2001). See also A. Kumar, The State

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Holding Company: Issues and Options 3 (World Bank Discus-
sion Paper No. 187, 1992) (“The existence of state holding
companies, in many variants, is widespread”).
That is why I doubt the majority’s claim that its reading
of the text of the FSIA is “[t]he better reading,” ante, at 476,
leading to “[t]he better rule,” ante, at 477. The majority’s
rule is not better for a foreign nation, say, Mexico or Hondu-
ras, which may use “a tiered corporate structure to manage
and control important areas of national interest, such as nat-
ural resources,” ABA Working Group 523, and, as a result,
will find its ability to use the federal courts to adjudicate
matters of national importance and “potential sensitivity” re-
stricted, H. R. Rep. No. 94–1487, at 32. Congress is most
unlikely to characterize as “better” a rule tied to legal for-
malities that undercuts its basic jurisdictional objectives.
And working lawyers will now have to factor into com-
plex corporate restructuring equations (determining, say,
whether to use an intermediate holding company when merg-
ing or disaggregating even wholly owned government cor-
porations) a risk that the government might lose its pre-
viously available access to federal court.
Given these consequences, from what perspective can the
Court’s unnecessarily technical reading of this part of the
statute produce a “better rule”? To hold, as the Court does
today, that for purposes of the FSIA “other ownership inter-
est” does not include the interest that a Foreign Nation has
in a tiered Corporate Subsidiary “would be not merely to
depart from the primary rule that words are to be taken in
their ordinary sense, but to narrow the operation of the stat-
ute to an extent that would seriously imperil the accomplish-
ment of its purpose.” Danciger v. Cooley, 248 U. S. 319,
326 (1919).
I believe that the Court should decide this issue just as it
decided Flink. There, the Court unanimously determined
that, in light of “[t]he policy of the statutes” in question, a
corporate shareholder was an “owner” of a ship, which, tech-

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nically speaking, belonged to the corporation. 279 U. S., at
62–63. Justice Holmes wrote, in his opinion for the Court:
“For th[e] purpose [of these statutes] no rational distinc-
tion can be taken between several persons owning
shares in a vessel [here, a subsidiary] directly and mak-
ing the same division by putting the title in a corpora-
tion and distributing the corporate stock. The policy of
the statutes must extend equally to both. . . . We are of
[the] opinion that the words of the acts must be taken
in a broad and popular sense in order not to defeat the
manifest intent. This is not to ignore the distinction
between a corporation and its members, a distinction
that cannot be overlooked even in extreme cases . . . ,
but to interpret an untechnical word [‘owner’] in the
liberal way in which we believe it to have been used
. . . .” Ibid.
No more need be said.