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UNC Lear Services, Inc. v. Kingdom of Saudi Arabia

A foreign state undertakes commercial activity when it enters the marketplace and exercises the same powers that a private citizen might exercise; a contract for the repair and replacement of goods is a commercial activity, regardless of the product's end use for a military purpose. 5th U.S. Circuit Court of Appeals, No. 08-51103, 08-18-2009.

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Before DAVIS, OWEN, and HAYNES, Circuit Judges.

The dispute before us is between the Kingdom of Saudi Arabia and the Ministry of Defense and Aviation of the Kingdom of Saudi Arabia (Defendants Appellants, collectively the “Kingdom”) and UNC Lear Services, Inc., a domestic corporation, and its subsidiary, Lear Siegler Services, Inc. (Plaintiffs – Appellees, collectively “Lear”). The Kingdom appeals the following rulings by the district court: (1) denial of the Kingdom’s motion to dismiss based on its claim of immunity under the Foreign Sovereign Immunities Act, (2) denial of the Kingdom’s motion to dismiss based on its argument that the contracts between the parties contain a mandatory forum-selection clause naming Saudi Arabia as the only available forum, and (3) denial of the Kingdom’s motion to dismiss for forum non conveniens. For the following reasons, we reverse the district court’s order denying the Kingdom’s motion to dismiss based on sovereign immunity with regard to claims brought by Lear under one of the contracts (the TSP), and we affirm all other orders appealed from.

I. Facts and Procedural Background

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