November 12, 2021 - This Week at the Ninth

This Week at the Ninth: Sovereign Immunity and Plausible Defamation

This week, the Ninth Circuit examines whether private companies can count as foreign sovereigns for purposes of immunity, and when broad statements can plausibly be read to refer to specific individuals under Washington State defamation law.

WHATSAPP INC. ET AL. V. NSO GROUP TECHNOLOGIES LIMITED ET AL.

The Court holds that foreign sovereign immunity does not protect private companies.

The panel: Judges Murguia, Nelson, and Forrest, with Judge Forrest writing the opinion.

Key highlight: “The question presented is whether foreign sovereign immunity protects private companies. The law governing this question has roots extending back to our earliest history as a nation, and it leads to a simple answer—no. Indeed, the title of the legal doctrine itself—foreign sovereign immunity—suggests the outcome.”

Background: Plaintiffs WhatsApp Inc. and Facebook, Inc. (collectively “WhatsApp”) sued defendants, privately owned and operated Israeli corporations (collectively “NSO”), for sending malware through WhatsApp’s server system to approximately 1,400 mobile devices, breaking both state and federal law. NSO contended that it was entitled to foreign sovereign immunity because, if WhatsApp’s allegations were true, NSO was acting as an agent of a foreign state. The district court denied NSO’s motion to dismiss on that ground. Relying on the Restatement (Second) of Foreign Relations Law § 66, the district court concluded that NSO was not entitled to common-law conduct-based foreign sovereign immunity because it failed to show that exercising jurisdiction over NSO would serve to enforce a rule of law against a foreign state.

Result: The Ninth Circuit affirmed on an alternative ground. The Court first held that it had jurisdiction over NSO’s interlocutory appeal under the collateral-order doctrine. The Court then held that the Foreign Sovereign Immunity Act (“FSIA”) occupies the field of foreign sovereign immunity as applied to entities and categorically forecloses extending immunity to any entity that falls outside the FSIA’s broad definition of “foreign state.” Under the FSIA, a “foreign state” includes a body politic, as well as its “political subdivisions, agencies, and instrumentalities.” 28 U.S.C. § 1603(a). And “agency or instrumentality” is defined to include “any entity [that] is a separate legal person, corporate or otherwise and . . . 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.” 28 U.S.C. § 1603(b). Because the FSIA addresses foreign sovereign immunity for entities, its description of which such entities qualify as “foreign states” is the exclusive means for entities to claim foreign sovereign immunity. The Supreme Court’s holding in Samantar v. Yousuf, 560 U.S. 305 (2010) that individual foreign officials are not subject to the FSIA does not defeat this interpretation because the FSIA did not address, at all, immunity for individuals or natural persons. Because NSO does not qualify as a “foreign state” under the FSIA, it cannot claim foreign sovereign immunity. There is no need to analyze—as the district court did—whether NSO is entitled to immunity under the common law because the proper analysis begins and ends with the FSIA.

MILLER V. SAWANT

The Court holds that, under Washington defamation law, a city politician’s statements about a police shooting were plausibly “of and concerning” the officers who shot and killed someone, despite not mentioning them by name.

Panel: Judges Tashima, M. Smith, and Nguyen, with Judge Tashima writing the opinion.

Key Highlight: “At most . . . the district court has identified one reasonable interpretation of Sawant’s words, not the only reasonable interpretation. Where a communication is capable of two meanings, one defamatory and one not, it is for a jury, not a judge, to determine which meaning controls.”

Background: Seattle police officers Scott Miller and Michael Spaulding shot and killed Che Taylor, a Black man, while attempting to make an arrest in February 2016. A few days later, Seattle City Council member Kshama Sawant told a crowd: “The brutal murder of Che Taylor, just a blatant murder at the hands of the police, show[s] how urgently we need to keep building our movement for basic human rights for black people and brown people.” She said the police department should be held “accountable for their reprehensible actions, individual actions. We need justice on the individual actions and we need to turn the tide on the systematic police brutality and racial profiling.” Miller and Spaulding sued Sawant for defamation, and the district court dismissed on the ground that the complaint failed plausibly to allege that Sawant’s remarks were “of and concerning” the plaintiffs, as required by Washington defamation law.

Result: The Ninth Circuit reversed. First, the Court settled a dispute about the applicable standard of review. Washington law does not require plaintiffs to demonstrate that allegedly defamatory comments were “of and concerning” them with “convincing clarity.” Plausibility is enough, the Court said. And, according to the Ninth Circuit, the complaint met that standard. While Sawant’s comments “appear aimed, at least in part, at the police generally, some of her language suggests that her words refer specifically to the officers who shot Taylor,” the Court said. And the complaint alleged that some people who heard the remarks understood them to refer to Miller and Spaulding. Because those allegations were “neither conclusory nor implausible,” they were “entitled to a presumption of truth at this stage of the proceedings.”

The Court rejected Sawant’s reliance on the Supreme Court’s reasoning in New York Times Co. v. Sullivan because the plaintiff in that suit had no “personal involvement in the acts in question.” It was not dispositive that Sawant never named the plaintiffs in her remarks—it was enough that her words could be reasonably understood as referring to the officers who shot Taylor, and that listeners understood Sawant’s remarks to refer to the plaintiffs. Nor did it matter that Sawant did not herself make the plaintiffs’ identities public, because “Plaintiffs’ family, friends, and colleagues were ‘familiar with the details of the Che Taylor shooting’ and understood Sawant’s statements to be directed at Plaintiffs at the time they were made.” Sawant’s policy arguments were unavailing, the Court said, because “[t]he law . . . makes clear that defamation claims may be based on how a communication is understood by individuals who know the plaintiff.” Finally, the Ninth Circuit rejected Sawant’s argument that Plaintiffs improperly relied on allegations of extrinsic facts, which, the Court held, may permissibly show “that a statement refers to a particular individual” without naming them. The Court declined to reassign the case to a different district court judge, and remanded for further proceedings.