Powerex Corp. v. Reliant Energy Services, Inc., 551 U.S. 224 (2007)

In Powerex Corp. v. Reliant Energy Services, Inc., the underlying dispute arose from lawsuits filed by the State of California and various private entities against companies in the California energy market, alleging price-fixing in violation of state law. Among the defendants were Powerex Corp., a Canadian corporation and subsidiary of the British Columbia Hydro and Power Authority (BC Hydro), as well as other entities like the Bonneville Power Administration (BPA) and the Western Area Power Administration (WAPA), which are U.S. government agencies. The defendants sought indemnity from Powerex and BC Hydro, leading to the removal of the case to federal court based on claims of sovereign immunity and foreign state status under the Foreign Sovereign Immunities Act (FSIA). The procedural history of the case began when the District Court ruled that BPA and WAPA could remove the case under 28 U.S.C. §1442(a), while BC Hydro and Powerex relied on §1441(d) for foreign states. The District Court concluded that Powerex did not qualify as a foreign sovereign under the FSIA, while BC Hydro was granted sovereign immunity. Consequently, the court remanded the entire case back to state court, prompting Powerex to appeal to the Ninth Circuit, asserting its status as a foreign sovereign and challenging the remand decision. The relevant background context includes the legal framework established by the FSIA, which defines the conditions under which foreign states and their entities can be sued in U.S. courts. The case highlights the complexities of jurisdiction and sovereign immunity, particularly in the context of cross-border corporate structures and the interplay between federal and state court systems. The Supreme Court's review was prompted by the need to clarify whether Powerex qualified as an "organ of a foreign state" under the FSIA and to address jurisdictional questions related to the Ninth Circuit's authority to hear the appeal.

Whether petitioner Powerex Corp. qualifies as an “organ of a foreign state or political subdivision thereof” under the Foreign Sovereign Immunities Act of 1976 (FSIA), 28 U.S.C. §1603(b)(2).

The judgment is reversed.