Foreign Sovereign Removal Limited To Direct Majority Ownership

Civil actions may be removed under 28 U.S.C. § 1441(d) if a defendant is an instrumentality of a foreign state, defined as an entity “a majority of whose shares” are “owned by a foreign state.” In Dole Food Co. v. Patrickson, 538 U.S. 468 (Apr. 22, 2003), the U.S. Supreme Court clarified that the foreign state must directly own a majority of the defendant’s shares, and that indirect ownership through subsidiaries is insufficient. The Court broadly described veil-piercing as a “rare exception,” stressing that “[i]n issues of corporate law structure often matters.”