In Permanent Mission of India v. City of New York
, 551 U.S. 193 (2007), the Supreme Court construed the Foreign Sovereign Immunities Act
to allow a federal court to hear a lawsuit brought by the City of New York
to recover unpaid property taxes levied against India
, both of which own real estate in New York.
India and Mongolia owned buildings in Manhattan
. They used part of their buildings for diplomatic business, and another part to house lower-level diplomatic staff, who did not pay rent.
Under New York law, real property owned by foreign governments was exempt from taxation if it was "used exclusively" for diplomatic offices or for the quartering of diplomats "with the rank of ambassador or minister plenipotentiary" to the United Nations
. If the foreign government only used part of its property for these purposes, then the remainder of the property was subject to taxation.
The City of New York had levied taxes against India and Mongolia for the appropriate portions of their buildings, but India and Mongolia refused to pay. Eventually the unpaid taxes became tax liens
. As of February 1, 2003, India's lien amounted to $16.4 million, and Mongolia's amounted to $2.1 million.
The City brought suit in state court to enforce the liens, and India and Mongolia removed
the suit to federal court. Once in federal court, India and Mongolia argued they were immune
to suit under the Foreign Sovereign Immunities Act (FSIA). The district court... Read More