(CN) - The Austrian national railway should be held to account in a U.S. court for an accident that caused an American woman to have both legs amputated, her attorney told the 9th Circuit.
Carol Sachs had left California to travel throughout Austria and Czech Republic with a Eurail pass in April 2007. She was trying to board a moving train in Innsbruck, Austria, on April 27, 2007, when she fell to the tracks through a gap in the platform. The injuries she sustained ultimately required doctors to amputate both of her legs above the knee, and she sued the Austrian-owned railway, OBB Personenverkehr.
She claimed that the train pulled away before she could board, and that when she tried to open the railcar's doors, they were locked.
Though the Foreign Sovereign Immunity Act, or FSIA, gives foreign states and their political subdivisions and agencies a presumption of immunity against U.S. litigation, Sachs claimed that the commercial activity exception to that law applied.
She noted that she bought the Eurail pass in California from the Massachusetts-based Rail Pass Experts, but a federal judge in San Francisco refused to apply the exception and dismissed the suit in January 2011.
After a divided panel of the 9th Circuit affirmed in September 2012, the full court vacated the decision in favor of a rehearing en banc.
At the hearing Thursday, Sach's attorney Geoffrey Becker insisted that Eurail Group had made Rail Pass Experts its subagent by authorizing the sale of tickets for use on OBB's system.
"We have a pass that was issued under the auspices of the Eurail Group through its sales network in the U.S.," said Becker of Lafayette, Calif.-based Becker & Becker.
Judge Alex Kozinski repeatedly challenged Becker to show where in the record Sachs had sufficiently asserted the existence of an agency relationship.
"The question is really quite narrow," Kozinski said. "What is the proof of agency?"
Becker said the complaint alleged agency and that the railway's attorney had declared in District Court proceedings that Rail Pass Experts could be presumed to be an agent.
He added that he was also "relying on the ratification that occurred when they took her money."
Noting that the District Court had already resolved the agency relationship, Judge Kim Wardlaw said the real question at issue turns on whether the District Court properly applied an earlier decision called Doe v. Holy See in dismissing Sachs' case.
In that 2009 decision, the 9th Circuit ruled that foreign sovereign immunity can be waived only if the day-to-day activities that form the basis of the lawsuit can be fairly attributed to the sovereign.
Becker replied that the action attributable to the railway here "is the sale of this pass ... which allowed her to board this train in Austria."
He said the District Court improperly applied Holy See since "actual authority is good enough, irrespective of day-to-day control over a business or person."
Replying to Judge Andrew Hurwitz's questions on the commercial activity exception, Becker emphasized that the claims are based on negligence.
"In this case, Carol Sachs must prove a duty to care," Becker said.
Arguing for the railway, Dorsey & Whitney attorney Juan Basombrio declared that the case lacked clarity, and the District Court and the 9th Circuit applied different concepts of agency.
Rail Pass Experts could perhaps be considered the railroad's agent for purposes of tort liability, but not for the requirements of the FSIA's commercial activities exception, the Irvine, Calif.-based lawyer added.
"The FSIA has its own definition of agency," Basombrio said. "Common law doesn't matter. We raised this issue in District Court, but the District Court didn't catch on. It reached the right decision but avoided the initial step."
Under the FSIA's statutory scheme, Rail Pass Experts cannot be considered an agent or instrumentality of Austria, he continued.
The U.S. company would have to be an "organ of the foreign state, but Rail Pass Experts is not," Basombrio said. "It has to be a political subdivision. It is not. Or a political entity whose majority of shares are owned by the foreign state - Rail Pass Experts is not."
Judge Hurwitz asked whether Austria would be immune to U.S. lawsuits if it manufactured poisoned food and then contracted with U.S. companies to distribute the poison food to grocery stores here.
Basombrio replied that the FSIA would give Austria immunity.
The Austrian railway has a website that can be used to buy rail tickets directly, and "if the plaintiff had bought the ticket through the OBB website in the United States, there would be commercial activity by OBB and there would be no immunity," Basombrio said.
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