Egypt Must Face Lawsuit|Over Liver Transplant

(CN) - Egypt and its embassy can be sued in U.S. courts for allegedly refusing to cover a liver transplant that may have saved a visiting scholar's life, the 9th Circuit ruled.

The estate of Mohamed Lasheen filed a federal lawsuit against the Arab Republic of Egypt, the Egyptian embassy and its Cultural and Educational Bureau after Lasheen was diagnosed with liver cancer, and his embassy health care plan refused to cover a transplant. The embassy based its decision on a pre-existing condition.

Lasheen's estate also sued Pennsylvania-based Loomis Co., the plan's administrator, which in turn sued the Egyptian defendants, claiming they broke their promise to pay defense costs.

Lasheen and Loomis eventually reached a settlement that hinged on the district court's allowing Loomis to sue the Egyptian parties in U.S. courts.

The Foreign Sovereign Immunities Act generally shields foreign countries from litigation, except when the action is based on "commercial activity carried on in the United States by the foreign state."

The district court ruled that this exception applied to Loomis' claims, but it never addressed whether the Egyptian defendants were shielded from Lasheen's action.

The 9th Circuit agreed that Loomis can sue the Egyptian defendants, and it instructed the lower court to decide if Lasheen's estate could likewise sue.

The defendants had argued that Egypt should be dismissed from the complaint, as there's no evidence that the country was involved with the health care plan.

"This assertion is inaccurate," Lucero said, citing a Loomis employee's statements that "all fees, premiums and claim funds came directly from Egypt," and that "the plan was funded entirely by the Egyptian government."

"We affirm the district court's determination that the FSIA does not deprive the federal courts of subject matter jurisdiction over Loomis' claims," Lucero wrote.

But he said the lower court should have tackled whether the Egyptian defendants are liable for the claims brought by Lasheen's estate.

The court affirmed in part, but reversed and remanded for an immunity ruling on the estate's claims.

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