Second Circuit addresses interplay between foreign official immunity and the FSIA

In Samantar v. Yousuf, the US Supreme Court held that foreign officials, when sued in their individual capacity, are subject to immunity under a similar, but different set of rules that govern lawsuits against foreign states.

Known as “Samantar immunity,” or “foreign official immunity,” the doctrine arises infrequently, as most lawsuits involving sovereigns are brought against foreign states or state instrumentalities and are governed by the Foreign Sovereign Immunities Act (FSIA), 28 U.S.C. § 1602 et seq. As a result, US appellate courts have not had many opportunities to establish the precise contours of Samantar immunity, including the important question of when it applies, as opposed to the FSIA.

The US Court of Appeals for the Second Circuit, in its February 19, 2025 decision in Hussein v. Maait,[1]  addressed precisely that issue in a ruling that redefines the scope of Samantar and cases involving foreign state officials.

We take a closer look at the ruling and its implications.

Background

The case stems from plaintiff Hussein’s 1997 investment in SIMO Middle East Paper Company, through which he acquired a 72-percent stake in SIMO, valued at $15.7 million. Prior to Hussein’s investment, SIMO was wholly owned by the Egyptian government. In 1999, Egypt effectively expropriated Hussein’s shares in SIMO by seizing control of the company. After seven years of unsuccessfully trying to recover his investment through litigation in the Egyptian courts and arbitration, Hussein filed a summary judgment motion in New York State court in December 2021, seeking recognition and enforcement of two decrees (the Decrees), one entered by an Administrative Justice Court, and the other issued by Egypt’s then-Prime Minister, Ibrahim Mahlab.

Hussein sued Dr. Mohamed Ahmed Maait, in his official capacity as Egypt’s Minister of Finance, for failing to make payment as required by the Decrees. Maait removed the case to federal court under 28 U.S.C. § 1441(d), which authorizes the removal of suits against “foreign states” as defined in section 1603(a) of the FSIA.

The district court found that removal was proper under § 1441(d) because although Maait was not a “foreign state” within the meaning of the FSIA, Egypt was implicated in the suit against Maait and was the “real party in interest.” As a result, the district court found that the FSIA and its procedural protections, like the right of removal, were available to Maait.

Second Circuit’s decision

On appeal, the Second Circuit affirmed. Hussein argued that Maait improperly removed the case to federal court, and that there was no subject matter jurisdiction under the FSIA because “there [was] no foreign sovereign act by a ‘foreign state.’”[2] He further claimed that the “real party in interest” framework should not have been applied by the district court, because it is not mentioned or defined in the FSIA, and the Samantar case established that suits against foreign officials are not governed by the FSIA. The Second Circuit, in a decision that narrowed the Supreme Court’s decision in Samantar, disagreed.

Samantar immunity

The Supreme Court in Samantar determined that an individual sued for conduct undertaken in his official capacity is neither a foreign state nor an agency or instrumentality of a foreign state within the meaning of the FSIA.[3] As a result, the immunity of foreign officials is governed by the common law of immunity, as opposed to the FSIA.

The Supreme Court did, however, create an exception to this general rule by declaring that “some actions against an official in his official capacity should be treated as actions against the foreign state itself, as the state is the real party in interest.”[4] Under those circumstances, that action is governed by the FSIA, not the common law of immunity. Yet, the Supreme Court did not elaborate on when this exception should apply.

Given the Supreme Court’s exception, and the fact that Hussein’s suit was brought against Maait (as opposed to Egypt), the Second Circuit considered de novo whether Samantar established a “real party in interest” exception to its core holding that the FSIA does not govern immunity of foreign officials, and found that it did.

The Second Circuit’s application of the “real party in interest” test

Prior to Samantar, the phrase “real party in interest” had not been applied in the foreign sovereign immunity context.[5] It existed as a term of art defined as a person or legal entity that was entitled to enforce a substantive right. The Second Circuit adopted Samantar’s three-factor test to determine whether Egypt was the “real party in interest.” The test asks:

1. Is the plaintiff suing the foreign official in his personal or official capacity?
2. What is the substance of the liability claim? Is the action a personal liability claim based on personal acts, or is it an official capacity claim based on the state’s acts?
3. Is plaintiff seeking relief from the foreign official’s personal accounts, or from the state treasury?

First, Hussein named Maait as the defendant in his official capacity as Egypt’s (now former) Minister of Finance. It is likely that Hussein sought to sue Maait in his official capacity because prior to commencing his suit in New York State court, Hussein had already attempted to petition Maait and several other Egyptian officials, also in their official capacity, for the same relief.

Second, the substance of Hussein’s liability claim was based on the enforcement of the two Decrees Hussein obtained from the Egyptian state. The second Decree in particular, issued by Egypt’s former Prime Minister, directed the “Minister of Finance” to compensate the SIMO shareholders for their expropriated investment. The Decree did not direct Maait specifically to compensate the shareholders, and certainly, when Maait left office, the Decree transferred the responsibility to the new Minister of Finance. Thus, Hussein was seeking to have whoever occupied the office of the Minister of Finance facilitate his compensation.

Third, Hussein was seeking compensation from the Egyptian Treasury, not from Maait personally. Hussein confirmed as much, stating that “the Egyptian government refused to honor the court’s binding decision,” and “the Egyptian government has refused to compensate the shareholders of SIMO.”[6]

Therefore, because Hussein named Maait in his official capacity, his substantive liability claim was based on Egypt’s failure to compensate him for his expropriated investment, and he was seeking compensation from Egypt’s Treasury – as opposed to Maait’s personal accounts, the Second Circuit found that Egypt was the real party in interest. As a result, Maait was entitled to assert Egypt’s sovereign immunity and remove the case to federal court under § 1441(d).

Impact

The Second Circuit’s decision helps clarify the scope of Samantar immunity, and may dissuade efforts to attempt to circumvent the immunity strictures of the FSIA by suing foreign officials instead of the state. Hussein v. Maait warns that plaintiffs who attempt to plead around the FSIA in this way are likely to have an uphill battle against the current of the “real party in interest” framework.

When determining whether to sue a foreign official in their personal or official capacity, and whether a sovereign state should be named as a co-defendant, parties should carefully consider (1) the three-factor “real party in interest” framework to determine whether the foreign official could properly be sued, or if they would be able to claim the immunity privileges of their sovereign, and (2) whether any of the immunity exceptions apply to remove the foreign official or sovereign from the FSIA’s shelter of presumptive immunity.

Please contact the authors for further information.

 

^{[1] Hussein v. Maait, 129 F.4th 99, 101 (2d Cir. 2025).
[2] Hussein, 129 F.4th at 109.
[3] Samantar v. Yousuf, 560 U.S. 314-319, 323 (2010).
[4] Samantar, 560 U.S. at 325.
[5] The Supreme Court in Samantar imported the “real party in interest” phrase from its 1985 decision in Kentucky v. Graham, 473 U.S. 159, a section 1983 civil rights suit in which the Supreme Court outlined that “an official-capacity suit is, in all respects other than name, to be treated as a suit against the entity. It is not a suit against the official personally, for the real party in interest is the entity.”
[6] Hussein, 129 F.4th at 117.}