In 2003, the City of New York initiated a lawsuit against the Permanent Missions of India and Mongolia to the United Nations to collect unpaid property taxes. Both countries maintain their diplomatic offices in the same buildings where they house their staffs. According to New York law, embassies and consulates are exempt from paying taxes on property used for official purposes. But the city argued that this exemption did not extend to those parts of the building used for housing, and that India and Mongolia owed $37 million and $4 million, respectively, in unpaid property taxes for these living quarters. It said that many other missions also owed such property taxes.

India and Mongolia, with support from the United States government, said that American courts did not have jurisdiction over such cases. They argued that a federal statute—the Foreign Sovereign Immunities Act (FSIA)—largely provides immunity to foreign diplomats and their staffs from lawsuits in the United States. Legal scholars say that many countries have enacted similar laws providing foreign diplomats with immunity from domestic lawsuits. But, under FSIA, there are several exceptions to immunity, including cases involving criminal acts and instances in which a country decides to waive immunity, among others. The City of New York also pointed to an exception in cases where “rights in immovable property situated in the United States are in issue” (which, in its opinion, included disputes concerning property taxes). But India and Mongolia argued that this particular exception revolved around questions concerning, for instance, title and ownership of property.

A federal district court and, later, an appeals court ruled in favor of the city and its interpretation of the FSIA exception for immovable property. In their decisions, they also cited certain international treaties to support their conclusions, though some analysts pointed out that the United States was not a party to any of these treaties, and that one of the treaties had not yet come into force. In June 2007, the United States Supreme Court, in a 7-2 ruling, decided that the FSIA exception for immovable property applied to the New York case over the unpaid property taxes, and that the federal courts did have jurisdiction to hear it.

What are the implications of this decision? Will it allow the City of New York to move forward with its lawsuit against India and Mongolia? Could U.S. diplomatic offices abroad face similar treatment? Will it affect initiatives such as the city’s proposed traffic congestion pricing plan? Could it encourage other courts to cite international treaties in support of their decisions in unrelated cases?

In his C.V. Starr Lecture, John J.P. Howley ‘89—who represented the Permanent Missions of India and Mongolia before the Supreme Court—will analyze the court’s majority and dissenting opinions, and discuss these and other questions.