Vanderbilt Journal of Transnational Law


Sarah K. Schano

First Page



The globalization of the United States economy in the latter half of the twentieth century has fostered greater interaction between the United States and foreign states and their instrumentalities. As a result, the likelihood of legal disputes arising between United States entities and foreign states has increased. Traditionally, foreign states have been immune from suit in United States courts. However, the Foreign Sovereign Immunities Act (FSIA), enacted in 1976, specifies instances in which United States courts may deny immunity to foreign states and exercise jurisdiction over them. Under one provision of the FSIA, a foreign state may forfeit its immunity if it engages in a commercial activity outside of the United States that has a direct effect within the United States. The United States Supreme Court recently interpreted the direct effect clause of this commercial activity exception in Republic of Argentina v. Weltover, Inc. The Court broadly defined the terms "commercial activity" and "direct effect," thereby making foreign states and their state-owned enterprises more vulnerable to suit in the United States. Arguably, then, the Due Process Clause of the United States Constitution may provide foreign states the only protection against the jurisdiction of United States courts; however, the Weltover Court refused to determine whether such protection extends to foreign states and their instrumentalities. This Note analyzes the Supreme Court's decision in Weltover. It addresses the issues unresolved by the Court and surveys the problems encountered by lower courts applying Weltover's holdings. The author concludes that practical concerns and principles of international law weigh in favor of extending constitutional due process protection to foreign states.