Permanent Mission of India to the United Nations v. City of New York

(Slip Opinion) OCTOBER TERM, 2006 1

Syllabus

NOTE: Where it is feasible, a syllabus (headnote) will be released, as is
being done in connection with this case, at the time the opinion is issued.
The syllabus constitutes no part of the opinion of the Court but has been
prepared by the Reporter of Decisions for the convenience of the reader.
See United States v. Detroit Timber & Lumber Co., 200 U. S. 321, 337.

SUPREME COURT OF THE UNITED STATES

Syllabus

PERMANENT MISSION OF INDIA TO THE UNITED

NATIONS ET AL. v. CITY OF NEW YORK

CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR
THE SECOND CIRCUIT

No. 06–134. Argued April 24, 2007—Decided June 14, 2007
Under New York law, real property owned by a foreign government is
exempt from taxation when used exclusively for diplomatic offices or
quarters for ambassadors or ministers plenipotentiary to the United
Nations. For years, respondent (City) has levied property taxes
against petitioner foreign governments for that portion of their dip
lomatic office buildings used to house lower level employees and their
families. Petitioners have refused to pay the taxes. By operation of
state law, the unpaid taxes converted into tax liens held by the City
against the properties. The City filed a state-court suit seeking de
claratory judgments to establish the liens’ validity, but petitioners
removed the cases to federal court, where they argued that they were
immune under the Foreign Sovereign Immunities Act of 1976 (FSIA),
which is “the sole basis for obtaining jurisdiction over a foreign state
in federal court,” Argentine Republic v. Amerada Hess Shipping
Corp., 488 U. S. 428, 439. The District Court disagreed, relying on an
FSIA exception withdrawing a foreign state’s immunity from jurisdic
tion where “rights in immovable property situated in the United
States are in issue.” 28 U. S. C. §1605(a)(4). The Second Circuit af
firmed, holding that the “immovable property” exception applied, and
thus the District Court had jurisdiction over the City’s suits.
Held: The FSIA does not immunize a foreign government from a law
suit to declare the validity of tax liens on property held by the sover
eign for the purpose of housing its employees. Pp. 3–8.
(a) Under the FSIA, a foreign state is presumptively immune from
suit unless a specific exception applies. In determining the immov
able property exception’s scope, the Court begins, as always, with the
statute’s text. Contrary to petitioners’ position, §1605(a)(4) does not
2 PERMANENT MISSION OF INDIA TO UNITED NATIONS v.

CITY OF NEW YORK

Syllabus

expressly limit itself to cases in which the specific right at issue is ti
tle, ownership, or possession, or specifically exclude cases in which a
lien’s validity is at issue. Rather, it focuses more broadly on “rights
in” property. At the time of the FSIA’s adoption, “lien” was defined
as a “charge or security or incumbrance upon property,” Black’s Law
Dictionary 1072, and “incumbrance” was defined as “[a]ny right to, or
interest in, land which may subsist in another to the diminution of its
value,” id., at 908. New York law defines “tax lien” in accordance
with these general definitions. A lien’s practical effects bear out the
definitions of liens as interests in property. Because a lien on real
property runs with the land and is enforceable against subsequent
purchasers, a tax lien inhibits a quintessential property ownership
right—the right to convey. It is thus plain that a suit to establish a
tax lien’s validity implicates “rights in immovable property.” Pp. 3–5.
(b) This Court’s reading is supported by two of the FSIA’s related
purposes. First, Congress intended the FSIA to adopt the restrictive
theory of sovereign immunity, which recognizes immunity “with re
gard to sovereign or public acts (jure imperii) of a state, but not . . .
private acts (jure gestionis).” Alfred Dunhill of London, Inc. v. Repub
lic of Cuba, 425 U. S. 682, 711. Property ownership is not an inher
ently sovereign function. The FSIA was also meant to codify the real
property exception recognized by international practice at the time of
its enactment. That practice supports the City’s view that petitioners
are not immune, as does the contemporaneous restatement of foreign
relations law. The Vienna Convention on Diplomatic Relations, on
which both parties rely, does not unambiguously support either
party, and, in any event, does nothing to deter this Court from its in
terpretation. Pp. 5–8.
446 F. 3d 365, affirmed and remanded.

THOMAS, J., delivered the opinion of the Court, in which ROBERTS,
C. J., and SCALIA, KENNEDY, SOUTER, GINSBURG, and ALITO, JJ., joined.
STEVENS, J., filed a dissenting opinion, in which BREYER, J., joined.
 Cite as: 551 U. S. ____ (2007) 1

Opinion of the Court

NOTICE: This opinion is subject to formal revision before publication in the
preliminary print of the United States Reports. Readers are requested to
notify the Reporter of Decisions, Supreme Court of the United States, Wash
ington, D. C. 20543, of any typographical or other formal errors, in order
that corrections may be made before the preliminary print goes to press.

SUPREME COURT OF THE UNITED STATES
_________________

No. 06–134
_________________

THE PERMANENT MISSION OF INDIA TO THE

UNITED NATIONS, ET AL., PETITIONERS v.

CITY OF NEW YORK, NEW YORK

ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF

APPEALS FOR THE SECOND CIRCUIT

[June 14, 2007]

JUSTICE THOMAS delivered the opinion of the Court.
The Foreign Sovereign Immunities Act of 1976 (FSIA),
28 U. S. C. §1602 et seq., governs federal courts’ jurisdic
tion in lawsuits against foreign sovereigns. Today, we
must decide whether the FSIA provides immunity to a
foreign sovereign from a lawsuit to declare the validity of
tax liens on property held by the sovereign for the purpose
of housing its employees. We hold that the FSIA does not
immunize a foreign sovereign from such a suit.
I
The Permanent Mission of India to the United Nations
is located in a 26-floor building in New York City that is
owned by the Government of India. Several floors are
used for diplomatic offices, but approximately 20 floors
contain residential units for diplomatic employees of the
mission and their families. The employees—all of whom
are below the rank of Head of Mission or Ambassador—
are Indian citizens who receive housing from the mission
rent free.
Similarly, the Ministry for Foreign Affairs of the Peo
2 PERMANENT MISSION OF INDIA TO UNITED NATIONS v.

CITY OF NEW YORK

Opinion of the Court

ple’s Republic of Mongolia is housed in a six-story building
in New York City that is owned by the Mongolian Gov
ernment. Like the Permanent Mission of India, certain
floors of the Ministry Building include residences for lower
level employees of the Ministry and their families.
Under New York law, real property owned by a foreign
government is exempt from taxation if it is “used exclu
sively” for diplomatic offices or for the quarters of a diplo
mat “with the rank of ambassador or minister plenipoten
tiary” to the United Nations. N. Y. Real Prop. Tax Law
Ann. §418 (West 2000). But “[i]f a portion only of any lot
or building . . . is used exclusively for the purposes herein
described, then such portion only shall be exempt and the
remainder shall be subject to taxation . . . .” Ibid.
For several years, the City of New York (City) has levied
property taxes against petitioners for the portions of their
buildings used to house lower level employees. Petition
ers, however, refused to pay the taxes. By operation of
New York law, the unpaid taxes eventually converted into
tax liens held by the City against the two properties. As of
February 1, 2003, the Indian Mission owed about $16.4
million in unpaid property taxes and interest, and the
Mongolian Ministry owed about $2.1 million.
On April 2, 2003, the City filed complaints in state court
seeking declaratory judgments to establish the validity of
the tax liens.1 Petitioners removed their cases to federal
——————
1 The
City concedes that even if a court of competent jurisdiction de
clares the liens valid, petitioners are immune from foreclosure proceed
ings. See Brief for Respondent 40 (noting that there is no FSIA immu
nity exception for enforcement actions). The City claims, however, that
the declarations of validity are necessary for three reasons. First, once
a court has declared property tax liens valid, foreign sovereigns tradi
tionally concede and pay. Second, if the foreign sovereign fails to pay in
the face of a valid court judgment, that country’s foreign aid may be
reduced by the United States by 110% of the outstanding debt. See
Foreign Operations, Export Financing, and Related Programs Appro
priations Act, 2006, §543(a), 119 Stat. 2214 (hereinafter Foreign Opera
 Cite as: 551 U. S. ____ (2007) 3

Opinion of the Court

court, pursuant to 28 U. S. C. §1441(d), which provides for
removal by a foreign state or its instrumentality. Once
there, petitioners argued that they were immune from the
suits under the FSIA’s general rule of immunity for for
eign governments. §1604. The District Court disagreed,
relying on the FSIA’s “immovable property” exception,
which provides that a foreign state shall not be immune
from jurisdiction in any case in which “rights in immov
able property situated in the United States are in issue.”
§1605(a)(4).
Reviewing the District Court’s decision under the collat
eral order doctrine, a unanimous panel of the Court of
Appeals for the Second Circuit affirmed. 446 F. 3d 365
(2006). The Court of Appeals held that the text and pur
pose of the FSIA’s immovable property exception con
firmed that petitioners’ personal property tax obligations
involved “rights in immovable property.” It therefore held
that the District Court had jurisdiction to consider the
City’s suits. We granted certiorari, 549 U. S. ___ (2007),
and now affirm.
II
“[T]he FSIA provides the sole basis for obtaining juris
diction over a foreign state in federal court.” Argentine
Republic v. Amerada Hess Shipping Corp., 488 U. S. 428,
439 (1989). Under the FSIA, a foreign state is presump
tively immune from suit unless a specific exception ap
plies. §1604; Saudi Arabia v. Nelson, 507 U. S. 349, 355
(1993). At issue here is the scope of the exception where
“rights in immovable property situated in the United
States are in issue.” §1605(a)(4). Petitioners contend that
the language “rights in immovable property” limits the
——————
tions); Consolidated Appropriations Act of 2005, §543(a), 118 Stat. 3011
(hereinafter Consolidated Appropriations). Third, the liens would be
enforceable against subsequent purchasers. 5 Restatement of Property
§540 (1944).
4 PERMANENT MISSION OF INDIA TO UNITED NATIONS v.

CITY OF NEW YORK

Opinion of the Court

reach of the exception to actions contesting ownership or
possession. The City argues that the exception encom
passes additional rights in immovable property, including
tax liens. Each party claims international practice at the
time of the FSIA’s adoption supports its view. We agree
with the City.
A
We begin, as always, with the text of the statute. Lim
tiaco v. Camacho, 549 U. S. ___, ___ (2007) (slip op., at 5).
The FSIA provides: “A foreign state shall not be immune
from the jurisdiction of courts of the United States . . . in
any case . . . in which . . . rights in immovable property
situated in the United States are in issue.” 28 U. S. C.
§1605(a)(4). Contrary to petitioners’ position, §1605(a)(4)
does not expressly limit itself to cases in which the specific
right at issue is title, ownership, or possession. Neither
does it specifically exclude cases in which the validity of a
lien is at issue. Rather, the exception focuses more
broadly on “rights in” property. Accordingly, we must
determine whether an action seeking a declaration of the
validity of a tax lien places “rights in immovable property
. . . in issue.”
At the time of the FSIA’s adoption in 1976, a “lien” was
defined as “[a] charge or security or incumbrance upon
property.” Black’s Law Dictionary 1072 (4th ed. 1951).
“Incumbrance,” in turn, was defined as “[a]ny right to, or
interest in, land which may subsist in another to the
diminution of its value . . . .” Id., at 908; see also id., at
941 (8th ed. 2004) (defining “lien” as a “legal right or
interest that a creditor has in another’s property”). New
York law defines “tax lien” in accordance with these gen
eral definitions. See N. Y. Real Prop. Tax Law Ann.
§102(21) (West Supp. 2007) (“ ‘Tax lien’ means an unpaid
tax . . . which is an encumbrance of real property . . .”).
This Court, interpreting the Bankruptcy Code, has also
 Cite as: 551 U. S. ____ (2007) 5

Opinion of the Court

recognized that a lienholder has a property interest, albeit
a “nonpossessory” interest. United States v. Security
Industrial Bank, 459 U. S. 70, 76 (1982).
The practical effects of a lien bear out these definitions
of liens as interests in property. A lien on real property
runs with the land and is enforceable against subsequent
purchasers. See 5 Restatement of Property §540 (1944).
As such, “a lien has an immediate adverse effect upon the
amount which [could be] receive[d] on a sale, . . . consti
tut[ing] a direct interference with the property . . . .”
Republic of Argentina v. New York, 25 N. Y. 2d 252, 262,
250 N. E. 2d 698, 702 (1969). A tax lien thus inhibits one
of the quintessential rights of property ownership—the
right to convey. It is therefore plain that a suit to estab
lish the validity of a lien implicates “rights in immovable
property.”
B
Our reading of the text is supported by two well-
recognized and related purposes of the FSIA: adoption of
the restrictive view of sovereign immunity and codification
of international law at the time of the FSIA’s enactment.
Until the middle of the last century, the United States
followed “the classical or virtually absolute theory of sov
ereign immunity,” under which “a sovereign cannot, with
out his consent, be made a respondent in the courts of
another sovereign.” Letter from Jack B. Tate, Acting
Legal Adviser, U. S. Dept. of State, to Acting U. S. Attor
ney General Phillip B. Perlman (May 19, 1952) (Tate
Letter), reprinted in 26 Dept. of State Bull. 984 (1952),
and in Alfred Dunhill of London, Inc. v. Republic of Cuba,
425 U. S. 682, 711, 712 (1976) (App. 2 to opinion of the
Court). The Tate Letter announced the United States’
decision to join the majority of other countries by adopting
the “restrictive theory” of sovereign immunity, under
which “the immunity of the sovereign is recognized with
6 PERMANENT MISSION OF INDIA TO UNITED NATIONS v.

CITY OF NEW YORK

Opinion of the Court

regard to sovereign or public acts (jure imperii) of a state,
but not with respect to private acts (jure gestionis).” Id.,
at 711. In enacting the FSIA, Congress intended to codify
the restrictive theory’s limitation of immunity to sover
eign acts. Republic of Argentina v. Weltover, Inc., 504
U. S. 607, 612 (1992); Asociacion de Reclamantes v.
United Mexican States, 735 F. 2d 1517, 1520 (CADC 1984)
(Scalia, J.).
As a threshold matter, property ownership is not an
inherently sovereign function. See Schooner Exchange v.
McFaddon, 7 Cranch 116, 145 (1812) (“A prince, by acquir
ing private property in a foreign country, may possibly be
considered as subjecting that property to the territorial
jurisdiction, he may be considered as so far laying down
the prince, and assuming the character of a private indi
vidual”). In addition, the FSIA was also meant “to codify
. . . the pre-existing real property exception to sovereign
immunity recognized by international practice.” Reclam
antes, supra, at 1521 (Scalia, J.). Therefore, it is useful to
note that international practice at the time of the FSIA’s
enactment also supports the City’s view that these sover
eigns are not immune. The most recent restatement of
foreign relations law at the time of the FSIA’s enactment
states that a foreign sovereign’s immunity does not extend
to “an action to obtain possession of or establish a property
interest in immovable property located in the territory of
the state exercising jurisdiction.” Restatement (Second) of
Foreign Relations Law of the United States §68(b), p. 205
(1965). As stated above, because an action seeking the
declaration of the validity of a tax lien on property is a suit
to establish an interest in such property, such an action
would be allowed under this rule.
Petitioners respond to this conclusion by citing the
second sentence of Comment d to §68, which states that
the rule “does not preclude immunity with respect to a
claim arising out of a foreign state’s ownership or posses
 Cite as: 551 U. S. ____ (2007) 7

Opinion of the Court

sion of immovable property but not contesting such owner
ship or the right to possession.” Id., at 207. According to
petitioners, that sentence limits the exception to cases
contesting ownership or possession. When read in context,
however, the comment supports the City. Petitioners
ignore the first sentence of the comment, which reempha
sizes that immunity does not extend to cases involving the
possession of or “interest in” the property. Ibid. And the
illustrations following the comment make clear that it
refers only to claims incidental to property ownership,
such as actions involving an “injury suffered in a fall” on
the property, for which immunity would apply. Id., at 208.
By contrast, for an eminent-domain proceeding, the for
eign sovereign could not claim immunity. Ibid. Like the
eminent-domain proceeding, the City’s lawsuits here
directly implicate rights in property.
In addition, both parties rely on various international
agreements, primarily the Vienna Convention on Diplo
matic Relations, Apr. 18, 1961, [1972] 23 U. S. T. 3227,
T. I. A. S. No. 7502, to identify pre-FSIA international
practice. Petitioners point to the Vienna Convention’s
analogous withholding of immunity for “a real action
relating to private immovable property situated in the
territory of the receiving State, unless [the diplomatic
agent] holds it on behalf of the sending State for the pur
poses of the mission.” Id., at 3240, Art. 31(1)(a). Petition
ers contend that this language indicates they are entitled
to immunity for two reasons. First, petitioners argue that
“real action[s]” do not include actions for performance of
obligations “ ‘deriving from ownership or possession of
immovable property.’ ” Brief for Petitioners 28 (quoting E.
Denza, Diplomatic Law: A Commentary on the Vienna
Convention on Diplomatic Relations 238 (2d ed. 1998);
emphasis deleted). Second, petitioners assert that the
property here is held “ ‘on behalf of the sending State for
purposes of the Mission.’ ” Brief for Petitioners 28.
8 PERMANENT MISSION OF INDIA TO UNITED NATIONS v.

CITY OF NEW YORK

Opinion of the Court

But as the City shows, it is far from apparent that the
term “real action”—a term derived from the civil law—is
as limited as petitioners suggest. See Chateau Lafayette
Apartments, Inc. v. Meadow Brook Nat. Bank, 416 F. 2d
301, 304, n. 7 (CA5 1969). Moreover, the exception for
property held “on behalf of the sending State” concerns
only the case—not at issue here—where local law requires
an agent to hold in his own name property used for the
purposes of a mission. 1957 Y. B. Int’l L. Comm’n 94–95
(402d Meeting, May 22, 1957); see also Deputy Registrar
Case, 94 I. L. R. 308, 313 (D. Ct. The Hague 1980). Other
tribunals construing Article 31 have also held that it does
not extend immunity to staff housing. See id., at 312; cf.
Intpro Properties (U. K.) Ltd. v. Sauvel, [1983] 1 Q. B.
1019, 1032–1033.
In sum, the Vienna Convention does not unambiguously
support either party on the jurisdictional question.2 In
any event, nothing in the Vienna Convention deters us
from our interpretation of the FSIA. Under the language
of the FSIA’s exception for immovable property, petition
ers are not immune from the City’s suits.
III
Because the statutory text and the acknowledged pur
poses of the FSIA make it clear that a suit to establish the
validity of a tax lien places “rights in immovable property
. . . in issue,” we affirm the judgment of the Court of Ap
peals and remand the case for further proceedings consis
tent with this opinion.
It is so ordered.
——————
2 The City offers several other arguments against immunity based on

the Vienna Convention, but those arguments ultimately go to the
merits of the case, i.e., whether petitioners are actually responsible for
paying the taxes. Because the only question before us is one of jurisdic
tion, and because the text and historical context of the FSIA demon
strate that petitioners are not immune from the City’s suits, we leave
these merits-related arguments to the lower courts.
 Cite as: 551 U. S. ____ (2007) 1

STEVENS, J., dissenting

SUPREME COURT OF THE UNITED STATES
_________________

No. 06–134
_________________

THE PERMANENT MISSION OF INDIA TO THE

UNITED NATIONS, ET AL., PETITIONERS v.

CITY OF NEW YORK, NEW YORK

ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF

APPEALS FOR THE SECOND CIRCUIT

[June 14, 2007]

JUSTICE STEVENS, with whom JUSTICE BREYER joins,
dissenting.
Diplomatic channels provide the normal method of
resolving disputes between local governmental entities
and foreign sovereigns. See Schooner Exchange v.
McFaddon, 7 Cranch 116, 146 (1812). Following well-
established international practice, American courts
throughout our history have consistently endorsed the
general rule that foreign sovereigns enjoy immunity from
suit in our courts. See Verlinden B. V. v. Central Bank of
Nigeria, 461 U. S. 480, 486 (1983); Nevada v. Hall, 440
U. S. 410, 417 (1979). The fact that the immunity is the
product of comity concerns rather than a want of juridical
power, see Verlinden B. V., 461 U. S., at 486, does not
detract from the important role that it performs in order
ing our affairs.
The Foreign Sovereign Immunities Act of 1976 (FSIA)
both codified and modified that basic rule. The statute
confirms that sovereigns are generally immune from suit
in our courts, 28 U. S. C. §1604, but identifies seven spe
cific exceptions through which courts may accept jurisdic
tion, §1605(a). None of those exceptions pertains, or in
deed makes any reference, to actions brought to establish
a foreign sovereign’s tax liabilities. Because this is such
2 PERMANENT MISSION OF INDIA TO UNITED NATIONS v.
CITY OF NEW YORK
STEVENS, J., dissenting

an action, I think it is barred by the general rule codified
in the FSIA.
It is true that the FSIA contains an exception for suits
to resolve disputes over “rights in immovable property,”
§1605(a)(4), and New York City law provides that unpaid
real estate taxes create a lien that constitutes an interest
in such property, N. Y. C. Admin. Code §11–301 (Cum.
Supp. 2006). It follows that a literal application of the
FSIA’s text provides a basis for applying the exception to
this case. See ante, at 4–5. Given the breadth and vintage
of the background general rule, however, it seems to me
highly unlikely that the drafters of the FSIA intended to
abrogate sovereign immunity in suits over property inter
ests whose primary function is to provide a remedy
against delinquent taxpayers.
Under the majority’s logic, since “a suit to establish the
validity of a lien implicates ‘rights in immovable prop
erty,’ ” ante, at 5, whenever state or municipal law recog
nizes a lien against a foreign sovereign’s real property, the
foreign government may be haled into federal court to
litigate the validity of that lien. Such a broad exception to
sovereign immunity threatens, as they say, to swallow the
rule. Under the municipal law of New York City, for
example, liens are available against real property, among
other things, to compel landowners to pay for pest control,
emergency repairs, and sidewalk upkeep. See N. Y. C.
Admin. Code §§17–145, 17–147, 17–151(b) (2000); see also
M. Mitzner, Liens and Encumbrances, in Real Estate
Titles 299, 311–314 (J. Pedowitz ed. 1984). A whole host
of routine civil controversies, from sidewalk slip-and-falls
to landlord-tenant disputes, could be converted into prop
erty liens under local law, and then used—as the tax lien
was in this case—to pierce a foreign sovereign’s traditional
and statutory immunity. In order to reclaim immunity,
foreign governments might argue in those cases—just as
the Governments of India and the People’s Republic of
 Cite as: 551 U. S. ____ (2007) 3

STEVENS, J., dissenting

Mongolia tried to argue here—that slip-and-fall claims,
even once they are transformed into property liens, do not
implicate “rights in immovable property.” But the burden
of answering such complaints and making such arguments
is itself an imposition that foreign sovereigns should not
have to bear.
The force of the arguments of the Solicitor General as
amicus curiae supporting petitioners buttresses my con
viction that a narrow reading of the statutory exception is
more faithful to congressional intent than a reading that
enables a dispute over taxes to be classified as a dispute
over “rights in immovable property.” It is true that insofar
as the FSIA transferred the responsibility for making
immunity decisions from the State Department to the
Judiciary, Verlinden B. V., 461 U. S., at 487–488, the
views of the Executive are not entitled to any special
deference on this issue. But we have recognized that well-
reasoned opinions of the Executive Branch about matters
within its expertise may have the “power to persuade, if
lacking power to control.” Skidmore v. Swift & Co., 323
U. S. 134, 140 (1944).
And I am persuaded. At bottom, this case is not about
the validity of the city’s title to immovable property, or
even the validity of its automatic prejudgment lien.
Rather, it is a dispute over a foreign sovereign’s tax liabil
ity. If Congress had intended the statute to waive sover
eign immunity in tax litigation, I think it would have said
so.
Accordingly, I respectfully dissent.