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Supreme Court hears arguments on tax claims against diplomatic residences

[JURIST] The US Supreme Court [official website] Tuesday heard oral arguments [transcript, PDF] in Permanent Mission of India v. New York [LII case backgrounder; merit briefs], a case in which the justices will determine whether US courts can hear claims against foreign governments regarding unpaid property taxes for diplomatic residences. The city of New York brought the claim against India and Mongolia in 2003, and both the district court and the US Court of Appeals for the Second Circuit [official website] ruled that the Foreign Sovereign Immunities Act [LII text] provides an exception allowing US courts to hear the action. The city relies on a 1958 New York tax law which subjects all diplomatic property apart from the mission and principal residence of an ambassador to property taxes. India and Mongolia, which house their diplomats in the same high-rise buildings in which their missions are located, owe $16.4 million and $2.1 million respectively in tax liens, according to the city.

Lawyers for the two countries argued that because diplomats are always on call, the same reasons that justify immunity for diplomatic missions apply to diplomatic residences. Additionally, attorneys for the countries and the US Department of State maintained that if the court permits suits against foreign sovereigns for unpaid taxes in US courts, US diplomatic residences around the world will be subject to similar suits. The city relies on a 1985 ruling by the US Court of Appeals for the Third Circuit that Libya was not immune from a similar claim. AP has more.

The court also heard two other oral arguments Tuesday. In Beck v. Pace International Union [transcript, PDF; merit briefs], the Court must decide whether a pension plan sponsor’s decision to terminate a plan by purchasing an annuity is subject to the Employee Retirement Income Security Act [text]. In Dayton v. Hanson [transcript, PDF; merit briefs], the Court must decide whether a senator's decison to fire a staff member whose duties primarily involved legislation was an official act protected by the Speech or Debate Clause of the constitution.

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