|Courts Lack Jurisdiction Over U.S. Citizen Dispute Over Foreign Retirement Benefits|
|Description||Appeals court held that U.S. courts do not have jurisdiction to hear a case in which a U.S. citizen, who paid taxes to the Saudi social security for years while working there, contended he should receive a larger refund. There was no expropriation of property, so no basis for jurisdiction.|
|Key Words||Sovereign Immunity; Expropriation; Tax Contributions; Employment|
|C A S E S U M M A R Y|
|Facts||From 1969 to 1987, Saudi Arabia required employees, regardless of citizenship, to pay a 13% tax similar to Social Security taxes in the U.S. After 1987, non-Saudi workers were excluded from having to pay those taxes and were excluded from benefits. Later, the government decided to return some payments made by non-Saudi employees. Peterson had worked in Saudi Arabia from 1979 to 1990. The Saudi government refunded 5% of the 13% he had contributed. He pressed for the other 8% but did not receive it. He sued the Saudi government in U.S. federal court for a refund of the remainder of the taxes he paid. The district court held that it lacked jurisdiction and dismissed the suit. Peterson appealed.|
Affirmed. The termination of the retirement benefits for foreign workers did not have a direct effect on the United States so as to warrant application of the commercial activity exception to the Foreign Sovereign Immunities Act (FSIA). The only way for a court to obtain jurisdiction over a foreign state is through the FSIA. Since it does not apply to this instance, U.S. courts lack jurisdiction. The tax contributions made by Peterson were not a right in property, so the termination of those rights was not an expropriation of property by the Saudi government.
|Citation||Peterson v. Royal Kingdom of Saudi Arabia, 416 F.3d 83 (D.C. Cir. Ct. App., 2005)|
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