CITY OF AUSTIN, TEXAS v. REAGAN NATIONAL ADVERTISING OF AUSTIN, LLC, et al.
Certiorari To The United States Court Of Appeals For The Fifth Circuit
No. 20–1029. Argued November 10, 2021—Decided April 21, 2022
Like a great many jurisdictions around the country, the City of Austin, Texas (City), specially regulates signs that advertise things that are not located on the same premises as the sign, as well as signs that direct people to offsite locations. See City Code §25–10–102(1). These are known as off-premises signs. The City’s sign code at the time of this dispute prohibited construction of new off-premises signs. Ibid. Grandfathered off-premises signs could remain in their existing locations as “nonconforming signs,” but could not be altered in ways that increased their nonconformity. §§25–10–3(10), 25–10–152(A)–(B). On-premises signs were not similarly restricted. §25–10–102(6).
Respondents, Reagan National Advertising of Austin, LLC, and Lamar Advantage Outdoor Company, L. P., own billboards in Austin. When Reagan sought permits to digitize some of its billboards, the City denied its applications. Reagan filed suit in state court, alleging that the City’s prohibition against digitizing off-premises signs, but not on-premises signs, violated the First Amendment’s Free Speech Clause. The City removed the case to federal court, and Lamar intervened. The District Court held that the challenged sign code provisions were content neutral under Reed v. Town of Gilbert, 576 U. S. 155, reviewed the City’s on-/off-premises distinction under intermediate scrutiny, and found that the distinction satisfied that standard. The Court of Appeals reversed. It found the on-/off-premises distinction to be facially content based because a government official had to read a sign’s message to determine whether the sign was off-premises. The court then reviewed the City’s on-/off-premises distinction under strict scrutiny, and it held that the City failed to satisfy that onerous standard.
Held: The City’s on-/off-premises distinction is facially content neutral under the First Amendment. Pp. 6–14.
(a) Reed held that a regulation of speech is content based under the First Amendment if it “target[s] speech based on its communicative content,” i.e., if it “applies to particular speech because of the topic discussed or the idea or message expressed.” 576 U. S., at 163. The Court of Appeals’ interpretation of Reed—to mean that a regulation cannot be content neutral if its application requires reading the sign at issue—is too extreme an interpretation of this Court’s precedent. Pp. 6–12.
(1) In Reed, the town of Gilbert, Arizona, adopted a comprehensive sign code that applied distinct size, placement, and time restrictions to 23 different categories of signs, giving more favorable treatment to some categories (such as ideological signs or political signs) and less favorable treatment to others (such as temporary directional signs relating to religious events, educational events, or other similar events). The Court rejected the contention that the restrictions were content neutral because they did not discriminate on the basis of particular viewpoints, reasoning that “a speech regulation targeted at specific subject matter is content based even if it does not discriminate among viewpoints within that subject matter.” 576 U. S., at 169. Unlike the sign code in Reed, the City’s sign ordinances here do not single out any topic or subject matter for differential treatment. A sign’s message matters only to the extent that it informs the sign’s relative location. Thus, the City’s on-/off-premises distinction is more like ordinary time, place, or manner restrictions, which do not require the application of strict scrutiny. Cf. Frisby v. Schultz, 487 U. S. 474, 482. Pp. 6–8.
(2) This Court’s precedents and doctrines have consistently recognized that restrictions on speech may require some evaluation of the speech and nonetheless remain content neutral. Most relevant here, the First Amendment allows for regulations of solicitation, and speech must be read or heard to determine whether it entails solicitation. See Heffron v. International Soc. for Krishna Consciousness, Inc., 452 U. S. 640. Moreover, the Court has previously understood distinctions between on-premises and off-premises signs to be content neutral. See Suffolk Outdoor Advertising Co. v. Hulse, 439 U. S. 808 (order dismissing appeal); Members of City Council of Los Angeles v. Taxpayers for Vincent, 466 U. S. 789. Underlying these cases and others is a rejection of the view that any examination of speech or expression inherently triggers heightened First Amendment concern. Rather, content-based regulations are those that discriminate based on “the topic discussed or the idea or message expressed.” Reed, 576 U. S., at 171. Pp. 8–10.
(3) Reagan’s counterargument relies primarily on a sentence in Reed recognizing that “[s]ome facial distinctions based on a message are obvious, defining regulated speech by particular subject matter, and others are more subtle, defining regulated speech by its function or purpose.” 576 U. S., at 163. Reagan contends that the City’s sign code defines off-premises signs on the basis of function or purpose and is therefore content based and subject to strict scrutiny. This stretches Reed’s “function or purpose” language too far. Reed held that subtler forms of content discrimination cannot escape classification as content based simply because they swap an obvious subject-matter distinction for a function or purpose proxy. That does not mean that any classification that considers function or purpose is always content based. Reagan’s reading of Reed would contravene numerous precedents and cast doubt on the Nation’s history of regulating off-premises signs. Pp. 11–12.
(b) This Court’s determination that the City’s on-/off-premises distinction is facially content neutral does not end the First Amendment inquiry. Evidence that an impermissible purpose or justification underpins a facially content-neutral restriction may mean that the restriction is nevertheless content based. Moreover, to survive intermediate scrutiny, a restriction on speech or expression must be “ ‘narrowly tailored to serve a significant governmental interest.’ ” Ward v. Rock Against Racism, 491 U. S. 781, 791. Because the Court of Appeals did not address these issues, the Court leaves them for remand and expresses no view on the matters. Pp. 13–14.
972 F. 3d 696, reversed and remanded.
Sotomayor, J., delivered the opinion of the Court, in which Roberts, C. J., and Breyer, Kagan, and Kavanaugh, JJ., joined. Breyer, J., filed a concurring opinion. Alito, J., filed an opinion concurring in the judgment in part and dissenting in part. Thomas, J., filed a dissenting opinion, in which Gorsuch and Barrett, JJ., joined.
BROWN, ACTING WARDEN v. DAVENPORT
Certiorari To The United States Court Of Appeals For The Sixth Circuit
No. 20–826. Argued October 5, 2021—Decided April 21, 2022
Ervine Davenport was convicted of first-degree murder following a jury trial where, at times, he sat shackled at a table with a “privacy screen.” On appeal, he argued that his conviction should be set aside in light of Deck v. Missouri, 544 U. S. 622, in which this Court held that the Fourteenth Amendment’s Due Process Clause generally forbids shackling a criminal defendant at trial absent “a special need.” Id., at 626. Finding no “special need” articulated in the record, the Michigan Supreme Court agreed that a Deck violation had occurred and remanded the case to the trial court to determine under Chapman v. California, 386 U. S. 18, whether the prosecution could establish that the Deck error was harmless beyond a reasonable doubt. On remand, the trial court conducted an evidentiary hearing at which jurors testified that the shackles had not affected their verdict and concluded that the State had carried its burden. Mr. Davenport appealed again, and the Michigan Court of Appeals affirmed the trial court. The Michigan Supreme Court declined review.
Mr. Davenport petitioned for federal habeas relief. The District Court found relief unwarranted under the Antiterrorism and Effective Death Penalty Act of 1996, which limits the power of federal courts to issue habeas relief to state prisoners. See 28 U. S. C. §2254(d). A divided Sixth Circuit panel reversed, declining to analyze the case under AEDPA. Instead, the court held that its review was governed only by Brecht v. Abrahamson, 507 U. S. 619, which held that a state prisoner seeking to challenge his conviction on the basis of a state court’s Chapman error must show that the error had a “ ‘substantial and injurious effect or influence’ ” on the trial’s outcome, id., at 637. Persuaded that Mr. Davenport could satisfy Brecht, the Sixth Circuit granted federal habeas relief and ordered Michigan either to retry or release Mr. Davenport. This Court granted certiorari to resolve a circuit conflict about the proper interaction between the tests found in Brecht and AEDPA.
Held: When a state court has ruled on the merits of a state prisoner’s claim, a federal court cannot grant habeas relief without applying both the test this Court outlined in Brecht and the one Congress prescribed in AEDPA; the Sixth Circuit erred in granting habeas relief to Mr. Davenport based solely on its assessment that he could satisfy the Brecht standard. Pp. 6–25.
(a) When Congress supplies a constitutionally valid rule of decision, federal courts must follow it. In AEDPA, Congress instructed that a federal court “shall not . . . gran[t]” relief with respect to a claim that has been adjudicated on the merits in state court “unless” certain conditions are met. §2254(d). To be sure, the court below in this case was required to ensure that petitioner carried his burden under the terms of Brecht. But satisfying Brecht is only a necessary condition to habeas relief here; AEDPA must also be satisfied. The Sixth Circuit erred in holding otherwise. Pp. 6–7.
(b) Since the founding, Congress has authorized federal courts to issue habeas writs to federal custodians, and since the Civil War, Congress has extended that authority to include issuance of writs to state custodians. All along, Congress’s statutes used permissive rather than mandatory language; federal courts enjoy the “power to” grant writs of habeas corpus in certain circumstances. That structure persists today; federal courts “may” grant habeas relief “as law and justice require.” 28 U. S. C. §§2241, 2243.
Under the traditional understanding of habeas corpus, a prisoner could not usually use the writ to challenge a final judgment of conviction issued by a court of competent jurisdiction. But by 1953, this Court had begun to depart from that understanding. In Brown v. Allen, 344 U. S. 443, 458, it held that a state-court judgment “is not res judicata” in federal habeas proceedings with respect to a petitioner’s federal constitutional claims. After Brown, federal courts struggled with an exploding caseload of habeas petitions from state prisoners.
Eventually, this Court responded by devising new rules aimed at separating the meritorious needles from the growing haystack of habeas petitions. The Court’s decision in Brecht—which reasoned that Chapman’s harmless-error rule for direct appeals was inappropriate for use in federal habeas review of final state-court judgments, 507 U. S., at 633–634—was part of that effort. Brecht, like this Court’s other equitable doctrines restricting habeas relief, stems ultimately from the discretion preserved by Congress’s habeas statutes.
Congress later introduced its own reforms in AEDPA, instructing that, if a state court has adjudicated the petitioner’s claim on the merits, a federal court “shall not” grant habeas relief “unless” the state court’s decision was (1) “contrary to” or an “unreasonable application of” clearly established federal law, as determined by the decisions of this Court, or (2) based on an “unreasonable determination of the facts” presented in the state-court proceeding. 28 U. S. C. §2254(d). AEDPA thus left intact the equitable discretion invested in federal courts by earlier federal habeas statutes. Pp. 7–14.
(c) Mr. Davenport’s two arguments in defense of the Sixth Circuit’s decision lack merit. Pp. 14–21.
(1) Mr. Davenport argues that because the AEDPA inquiry represents a logical subset of the Brecht test, the Sixth Circuit necessarily found that he satisfied AEDPA when he satisfied Brecht. That argument is mistaken. Proof of prejudice under Brecht does not equate to a successful showing under AEDPA. The inquiries under Brecht and AEDPA are different. Where AEDPA asks whether every fair-minded jurist would agree that an error was prejudicial, Brecht asks only whether a federal habeas court itself harbors grave doubt about the petitioner’s verdict. The legal materials a court may consult when answering each test also differ. Where AEDPA requires state-court decisions to be measured against this Court’s clearly established holdings, Brecht invites analysis based on the whole body of law. Assuming that the Sixth Circuit’s analysis was enough to satisfy Brecht, it was not enough to warrant eligibility for relief under AEDPA. Pp. 14–16.
(2) Mr. Davenport argues that this Court’s precedents in Fry v. Pliler, 551 U. S. 112, and Davis v. Ayala, 576 U. S. 257, require a ruling in his favor. But the holding in neither case helps Mr. Davenport, and neither case resolved the question now before the Court. Instead, Mr. Davenport focuses on a brief passage from Fry, repeated in Ayala—“it certainly makes no sense to require formal application of both tests (AEDPA/Chapman and Brecht) when the latter obviously subsumes the former,” 551 U. S., at 120—that he believes supports the theory that a court may grant relief without applying AEDPA. It does not. In any event, this Court has long stressed that “the language of an opinion is not always to be parsed as though we were dealing with [the] language of a statute.” Reiter v. Sonotone Corp., 442 U. S. 330. The Court will not override a lawful congressional command on the basis of curated snippets extracted from decisions with no reason to pass on the arguments Mr. Davenport presses here. Pp. 17–21.
(d) Even assuming that Mr. Davenport’s claim can survive Brecht, he cannot satisfy AEDPA. Mr. Davenport argues the Michigan Court of Appeals’ disposition of his shackling claim is contrary to, or an unreasonable application of, this Court’s decision in Holbrook v. Flynn, 475 U. S. 560. Holbrook rejected the defendant’s claim that he was denied a fair trial due to the prejudicial effect of supplemental courtroom security on the jury. Id., at 562. The language in Holbrook Mr. Davenport highlights casts doubt only on attempts to assess trial prejudice based on speculative testimony by prospective jurors. Nothing in Holbrook is inconsistent with the Michigan Court of Appeals’ reliance on post-trial testimony from actual jurors concerning the effect on deliberations of security measures at Mr. Davenport’s trial. Nor did the Michigan court unreasonably apply Chapman when it found that the prosecution had established Mr. Davenport’s shackling was harmless beyond a reasonable doubt. This Court cannot say that every fairminded jurist applying Chapman must reach a different conclusion. Similarly, the Court cannot say that every fairminded court would have both identified and adopted Mr. Davenport’s forfeited theory that his shackling might have influenced the jury toward a first-degree, rather than second-degree, murder conviction. Pp. 21–25.
964 F. 3d 448, reversed.
Gorsuch, J., delivered the opinion of the Court, in which Roberts, C. J., and Thomas, Alito, Kavanaugh, and Barrett, JJ., joined. Kagan, J., filed a dissenting opinion, in which Breyer and Sotomayor, JJ., joined.
BOECHLER, P.C. v. COMMISSIONER OF INTERNAL REVENUE
Certiorari To The United States Court Of Appeals For The Eighth Circuit
No. 20–1472. Argued January 12, 2022—Decided April 21, 2022
In 2015, the Internal Revenue Service notified Boechler, P.C., a North Dakota law firm, of a discrepancy in its tax filings. When Boechler did not respond, the IRS assessed an “intentional disregard” penalty and notified Boechler of its intent to levy Boechler’s property to satisfy the penalty. See 26 U. S. C. §§6330(a), 6721(a)(2), (e)(2)(A). Boechler requested and received a “collection due process hearing” before the IRS’s Independent Office of Appeals pursuant to §6330(b), but the Office sustained the proposed levy. Under §6330(d)(1), Boechler had 30 days to petition the Tax Court for review. Boechler filed its petition one day late. The Tax Court dismissed the petition for lack of jurisdiction and the Eighth Circuit affirmed, agreeing that §6330(d)(1)’s 30-day filing deadline is jurisdictional and thus cannot be equitably tolled.
Held: Section 6330(d)(1)’s 30-day time limit to file a petition for review of a collection due process determination is a nonjurisdictional deadline subject to equitable tolling. Pp. 2–11.
(a) Not all procedural requirements are jurisdictional. Many simply instruct “parties [to] take certain procedural steps at certain specified times” without conditioning a court’s authority to hear the case on compliance with those steps. Henderson v. Shinseki, 562 U. S. 428, 435. The distinction matters, as jurisdictional requirements cannot be waived or forfeited, must be raised by courts sue sponte, and do not allow for equitable exceptions. Id., at 434–435; Sebelius v. Auburn Regional Medical Center, 568 U. S 145, 154. As such, a procedural requirement is jurisdictional only if Congress “clearly states” that it is. Arbaugh v. Y & H Corp., 546 U. S. 500, 515. This case therefore turns on whether Congress has clearly stated that §6330(d)(1)’s deadline is jurisdictional.
Section 6330(d)(1) provides that a “person may, within 30 days of a determination under this section, petition the Tax Court for review of such determination (and the Tax Court shall have jurisdiction with respect to such matter).” Whether this provision limits the Tax Court’s jurisdiction to petitions filed within the 30-day timeframe depends on the meaning of “such matter,” the phrase marking the bounds of the Tax Court’s jurisdiction. Boechler contends that it refers only to the immediately preceding phrase: a “petition [to] the Tax Court for review of such determination,” making the filing deadline independent of the jurisdictional grant. The Commissioner, by contrast, argues that “such matter” refers to the entire first clause of the sentence, sweeping in the deadline and granting jurisdiction only over petitions filed within that time, making the deadline jurisdictional.
The text does not clearly mandate the jurisdictional reading. It is hard to see how it could, given that “such matter” lacks a clear antecedent. Moreover, Boechler’s interpretation has a small edge under the last-antecedent rule, which instructs that the correct antecedent is usually the closest reasonable one. There are also other plausible ways to read “such matter.” For example, “such matter” might refer to “such determination” or the preceding subsection’s list of “[m]atters” that may be considered during the collection due process hearing, see §6330(c), but neither possibility ties the Tax Court’s jurisdiction to the filing deadline. And it is difficult to make the case that the jurisdictional reading is clear where multiple plausible, nonjurisdictional interpretations exist. Nothing else in the provision’s text or structure advances the case for jurisdictional clarity. Finally, other tax provisions enacted around the same time as §6330(d)(1) much more clearly link their jurisdictional grants to a filing deadline—see §§6404(g)(1), 6015(e)(1)(A)—accentuating the lack of comparable clarity in §6330(d)(1). Pp. 2–6.
(b) The Commissioner’s counterarguments fall short. In this context, it is not enough that his interpretation of the statute is plausible, or that some might even think it better than Boechler’s. To satisfy the clear-statement rule, the Commissioner’s interpretation must be clear, and it is not. A requirement “does not become jurisdictional simply because it is placed in a section of a statute that also contains jurisdictional provisions.” Auburn, 568 U. S., at 155. Rather than proximity, what is needed is a clear tie between the deadline and the jurisdictional grant. The Commissioner also contends that a neighboring provision, §6330(e)(1), clarifies the jurisdictional effect of §6330(d)(1)’s filing deadline. Section 6330(e)(1) plainly conditions the Tax Court’s jurisdiction to grant an injunction to enforce the suspension of levy actions during collection due process hearings on a timely filing under §6330(d)(1). But, if anything, §6330(e)(1)’s clear jurisdictional statement only highlights the lack of such clarity in §6330(d)(1). Finally, the Commissioner insists that §6330(d)(1)’s filing deadline is jurisdictional because it was enacted at a time when Congress was aware of lower court cases that had held that an analogous tax provision, §6213(a), is jurisdictional. Those lower court cases, however, almost all predate this Court’s effort to “bring some discipline” to the use of the term “jurisdictional.” Henderson, 562 U. S., at 435. Pp. 6–8.
(c) Nonjurisdictional limitations periods are presumptively subject to equitable tolling, Irwin v. Department of Veterans Affairs, 498 U. S. 89, 95–96, and nothing rebuts the presumption here. Section 6330(d)(1) does not expressly prohibit equitable tolling, directs its 30-day time limit at the taxpayer, not the court, and appears in a section of the Tax Code that is particularly protective of taxpayers, see Auburn, 568 U. S., at 160.
The Commissioner invokes United States v. Brockamp, 519 U. S. 347, which held equitable tolling inapplicable to §6511’s deadline for taxpayers to file refund claims, but that case is inapposite. Brockamp’s holding rested on several distinctive features of §6511 that are absent here. Unlike §6511’s deadline, §6330(d)(1)’s deadline is not written in “emphatic form” or with “detailed” and “technical” language, nor is it reiterated multiple times. Id., at 350–351. And §6330(d)(1) admits of a single exception (as opposed to §6511’s six). See §6330(d)(2). If anything, these differences underscore the reasons why equitable tolling applies to §6330(d)(1). Despite the Commissioner’s protestations, the Court is not convinced that allowing §6330(d)(1) to be equitably tolled will appreciably add to the uncertainty already present in the process. Whether Boechler is entitled to equitable tolling on the facts of this case should be determined on remand. Pp. 8–11.
967 F. 3d 760, reversed and remanded.
Barrett, J., delivered the opinion for a unanimous Court.
UNITED STATES v. VAELLO MADERO
Certiorari To The United States Court Of Appeals For The First Circuit
No. 20–303. Argued November 9, 2021—Decided April 21, 2022
The Territory Clause of the United States Constitution—which states that Congress may “make all needful Rules and Regulations respecting the Territory . . . belonging to the United States,” Art. IV, §3, cl. 2—affords Congress broad authority to legislate with respect to the U. S. Territories. In exercising that authority, Congress has long maintained different federal tax and benefits programs for residents of the Territories than for residents of the 50 States. For example, residents of Puerto Rico are typically exempt from most federal income, gift, estate, and excise taxes. See 48 U. S. C. §734; see, e.g., 26 U. S. C. §§933, 2209, 4081–4084. But just as not every federal tax extends to residents of Puerto Rico, so too not every federal benefits program extends to residents of Puerto Rico. One such benefits program is Supplemental Security Income (SSI), which by statute applies only to residents of the 50 States and the District of Columbia. 42 U. S. C. §1382c(a)(1)(B)(i). The question presented is whether the equal-protection component of the Fifth Amendment’s Due Process Clause requires Congress to make Supplemental Security Income benefits available to residents of Puerto Rico to the same extent that Congress makes those benefits available to residents of the States.
Here, respondent Jose Luis Vaello Madero received SSI benefits while he was a resident of New York. He then moved to Puerto Rico, where he was no longer eligible to receive those benefits. Unaware of Vaello Madero’s new residence, the Government continued to pay him SSI benefits. The Government eventually sued Vaello Madero to recover those errant payments, which totaled more than $28,000. In response, Vaello Madero invoked the Constitution, arguing that Congress’s exclusion of residents of Puerto Rico from the SSI program violated the equal-protection component of the Fifth Amendment’s Due Process Clause. The District Court and the Court of Appeals agreed.
Held: The Constitution does not require Congress to extend SSI benefits to residents of Puerto Rico. In Califano v. Torres, 435 U. S. 1, and Harris v. Rosario, 446 U. S. 651, the Court applied the deferential rational-basis test to uphold Congress’s decision not to extend certain federal benefits to Puerto Rico, noting that because Congress chose to treat residents of Puerto Rico differently from residents of the States for purposes of tax laws, it could do the same for benefits programs. Those two precedents dictate the result here. Congress’s decision to exempt Puerto Rico’s residents from most federal income, gift, estate, and excise taxes supplies a rational basis for likewise distinguishing residents of Puerto Rico from residents of the States for purposes of the SSI benefits program. Vaello Madero’s contrary position would usher in potentially far-reaching consequences, with serious implications for the Puerto Rican people and the Puerto Rican economy. The Constitution does not require that extreme outcome. Pp. 4–6.
956 F. 3d 12, reversed.
Kavanaugh, J., delivered the opinion of the Court, in which Roberts, C. J., and Thomas, Breyer, Alito, Kagan, Gorsuch, and Barrett, JJ., joined. Thomas, J., and Gorsuch, J., filed concurring opinions. Sotomayor, J., filed a dissenting opinion.
CASSIRER et al. v. THYSSEN-BORNEMISZA COLLECTION FOUNDATION
Certiorari To The United States Court Of Appeals For The Ninth Circuit
No. 20–1566. Argued January 18, 2022—Decided April 21, 2022
The Foreign Sovereign Immunities Act of 1976 (FSIA), 28 U. S. C. §1602 et seq., governs whether a foreign state or instrumentality is amenable to suit in an American court. The question in this case is what choice-of-law rule a court should use to determine the applicable substantive law in an FSIA suit raising non-federal claims. That issue arises in a dispute concerning the ownership of an Impressionist painting: Camille Pissarro’s Rue Saint-Honoré in the Afternoon, Effect of Rain. Lilly Cassirer inherited the painting, which a family member had purchased from Pissarro’s agent in 1900. After the Nazis came to power in Germany, Lilly surrendered Rue Saint-Honoré to them to obtain an exit visa. Lilly and her grandson, Claude, eventually ended up in the United States. The family’s post-war search for Rue Saint-Honoré was unsuccessful. In the early 1990s, the painting was purchased by the Thyssen-Bornemisza Collection Foundation, an entity created and controlled by the Kingdom of Spain. Claude learned several years later that Rue Saint-Honoré was listed in a catalogue of the Foundation’s museum.
Claude sued the Foundation, asserting various property-law claims based on the allegation that he owned Rue Saint-Honoré and was entitled to its return. Because the Foundation is an “instrumentality” of the Kingdom of Spain, the complaint invoked the FSIA to establish the court’s jurisdiction. See §1603(b). The FSIA provides foreign states and their instrumentalities with immunity from suit unless the claim falls within a specified exception. See §§1605–1607. The courts below held that the Nazi confiscation of Rue Saint-Honoré brought Claude’s suit against the Foundation within the FSIA exception for expropriated property. See §1605(a)(3). That meant the Cassirer family’s suit could go forward. To determine what property law governed the dispute, the courts below had to apply a choice-of-law rule. The Cassirer plaintiffs urged the use of California’s choice-of-law rule; the Foundation advocated a rule based in federal common law. The courts below picked the federal option. That option, they then held, commanded use of the property law of Spain, not California. Applying Spanish law, the courts determined that the Foundation was the rightful owner. This Court granted certiorari to resolve a conflict among the Courts of Appeals as to what choice-of-law rule a court should apply in an FSIA case raising non-federal claims.
Held: In an FSIA suit raising non-federal claims against a foreign state or instrumentality, a court should determine the substantive law by using the same choice-of-law rule applicable in a similar suit against a private party. Here, that means applying the forum State’s choice-of-law rule, not a rule deriving from federal common law.
The FSIA provides a baseline principle of foreign sovereign immunity from civil actions unless a statutory exception applies (including the expropriation exception found to apply here). See §§1604–1607. Yet the FSIA was never “intended to affect the substantive law determining the liability of a foreign state or instrumentality” deemed amenable to suit. First Nat. City Bank v. Banco Para el Comercio Exterior de Cuba, 462 U. S. 611, 620. To the contrary, Section 1606 of the statute provides: “As to any claim for relief with respect to which a foreign state is not entitled to immunity under [the FSIA], the foreign state shall be liable in the same manner and to the same extent as a private individual under like circumstances.” When a foreign state is not immune from suit, it is subject to the same rules of liability (the same substantive law) as a private party. See First Nat. City Bank, at 622, n. 11.
Section 1606 dictates the selection of a choice-of-law rule: It must mirror the rule that would apply in a similar suit between private parties. Only the same choice-of-law rule can guarantee use of the same substantive law—and thus guarantee the same liability. Consider two suits seeking recovery of a painting: one suit against a foreign-state-controlled museum (as here), the other against a private museum. If the choice-of-law rules in the two suits differed, so might the substantive law chosen. And if the substantive law differed, so might the suits’ outcomes. Contrary to Section 1606, the two museums would not be “liable to the same manner and to the same extent.”
In this case, Section 1606 requires the use of California’s choice-of-law rule—because that is the rule a court would use in comparable private litigation. Consider the just-hypothesized suit against a private museum, brought as this case was in California and asserting non-federal claims. If the private suit were filed in state court, California’s choice-of-law rule would govern. And if the private suit were filed in federal court, the same would be true, because a federal court sitting in diversity borrows the forum State’s choice-of-law rule. See Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U. S. 487, 496. If California’s choice-of-law rule applies in the private-museum suit, it must also apply in the suit here, against the Foundation. That is the only way to ensure—as Section 1606 demands—that the Foundation, although a Spanish instrumentality, will be liable in the same way as a private party.
Even absent the clarity of Section 1606, the Court would likely reach the same result. Scant justification exists for federal common lawmaking in this context. Judicial creation of federal common law to displace state-created rules must be “necessary to protect uniquely federal interests.” Texas Industries, Inc. v. Radcliff Materials, Inc., 451 U. S. 630, 640. While foreign relations is an interest of that kind, here even the Federal Government disclaims any necessity for a federal choice-of-law rule in FSIA suits raising non-federal claims. Pp. 5–9.
824 Fed. Appx. 452, vacated and remanded.
Kagan, J., delivered the opinion for a unanimous Court.