## Facts

- Pan Am Flight 103 exploded over Lockerbie, Scotland on December 21, 1988, killing all aboard and additional persons on the ground.
- Survivors and representatives of passengers’ estates sued Libya and related state entities in U.S. federal court, alleging responsibility for the bombing and seeking damages for wrongful death and personal injury.
- In earlier litigation filed in 1994, the claims were dismissed on FSIA sovereign-immunity grounds; that dismissal was affirmed on appeal.
- In 1996, Congress added FSIA § 1605(a)(7) (via AEDPA), creating a sovereign-immunity exception for specified terrorist acts (including aircraft sabotage) committed by states designated as sponsors of terrorism.
- After the amendment, plaintiffs refiled against Libya invoking § 1605(a)(7) as the jurisdictional basis.
- Libya moved to dismiss, arguing that § 1605(a)(7) was unconstitutional (and therefore could not supply subject-matter jurisdiction), and also raised personal-jurisdiction and damages-related objections.
- The district court denied the motion to dismiss, rejecting Libya’s immunity defense.
- Libya filed an interlocutory appeal under the collateral order doctrine.

## Issues

1. Whether the collateral order doctrine permits interlocutory appellate review beyond the denial of foreign sovereign immunity to include personal-jurisdiction and punitive-damages issues.
2. Whether FSIA § 1605(a)(7) is unconstitutional as applied because it allegedly delegates to the Executive the power to determine when sovereign immunity is abrogated through terrorism designations.
3. Whether § 1605(a)(7) validly removes Libya’s FSIA immunity for claims arising from the aircraft sabotage and thereby supplies subject-matter jurisdiction.

## Decision

- The court exercised interlocutory jurisdiction only over the denial of Libya’s sovereign immunity (treated as a subject-matter-jurisdiction question).
- The court dismissed the appeal for lack of interlocutory jurisdiction as to personal jurisdiction and punitive damages because those questions were not inextricably intertwined with the immunity ruling and could be reviewed after final judgment.
- The court affirmed the district court’s denial of Libya’s motion to dismiss on sovereign-immunity grounds.
- The court held § 1605(a)(7) constitutional as applied and concluded that the FSIA terrorism exception removed Libya’s immunity for claims based on the Flight 103 bombing.

## Legal Principles

- Under the FSIA, foreign sovereign immunity functions as a limitation on subject-matter jurisdiction: if immunity applies, jurisdiction is absent; if a statutory exception applies, jurisdiction exists.
- An order denying a foreign state’s claim of sovereign immunity is immediately appealable under the collateral order doctrine because immunity is an immunity from suit.
- Interlocutory review under the collateral order doctrine is confined to the immunity determination and matters that are inextricably intertwined with, or necessary to ensure meaningful review of, that determination.
- FSIA § 1605(a)(7) does not unconstitutionally delegate legislative power as applied where Congress defined the operative criteria (covered terrorist acts and covered states) and, for Libya, Congress had substantially engaged with and endorsed the consequences of its terrorism designation.
- Where the terrorism exception applies to aircraft sabotage by a designated state sponsor of terrorism, the foreign state is not immune and federal courts have subject-matter jurisdiction under the FSIA jurisdictional grant in conjunction with the exception.

## Conclusion

The Second Circuit limited interlocutory review to the denial of sovereign immunity, upheld the constitutionality of the FSIA terrorism exception as applied to Libya, and permitted the Lockerbie-related civil claims to proceed in federal court while deferring personal-jurisdiction and damages issues until any appeal from final judgment.


Rein v. Socialist People’s Libyan Arab Jamahiriya, 162 F.3d 748 (2d Cir. 1998)