The Schooner Exchange v.

McFaddon (1812) 7 Cranch 116

FACTS:
● The Exchange was an American vessel privately owned by John McFaddon and William
Greetham (Plaintiffs). They filed a libel action to reclaim it in the District Court of the United
States for the District of Pennsylvania against the vessel, claiming "...that they were her sole
owners, on the 27th of October, 1809, when she sailed from Baltimore, bound to St. Sebastians,
in Spain".

● During the vessel's voyage, the ship was forcefully taken by agents of France who were acting
under direct orders from Napoleon, the Emperor of France. The Exchange was then outfitted
as an armed public vessel of the French Government under the name of Balaou.

● When the Balaou docked in the port of Philadelphia due to bad weather, McFaddon and
Greetham claimed that the vessel had been illegally seized and that they were legally entitled to
the ship and its possessions.

● The district court denied the libel for lack of jurisdiction, so the plaintiffs appealed. The appellate
court reversed the decision, and the French appealed. As a result, the case was heard by the
Supreme Court..

ISSUE:
● The Supreme Court had to determine whether the Balaou was protected under the legal rules of
foreign sovereign immunity, which shields foreign sovereigns and their acts from the scrutiny of
national courts.
● Can an American citizen assert a title to an armed national vessel in an American court after it
was found in the waters of the United States?

OBSERVATIONS:
● Chief Justice Marshall delivered the majority opinion, and the Supreme Court reversed the
appellate court's decision and affirmed the district court's dismissal of the libel.

● Conclusively, the Supreme Court was upholding the absolutist or traditional theory of
sovereign immunity. Since the world is composed of different types of sovereigns who enjoy
equal rights and independence "...all sovereigns have consented to a relaxation in practice, in
cases under certain peculiar circumstances, of that absolute and complete jurisdiction within their
respective territories which sovereignty confers".
● The Court reasoned that although the jurisdiction of the United States over persons and property
within its territory is susceptible to no limitation not imposed by itself, “... as a matter of comity,
members of the international community had implicitly agreed to waive the exercise of
jurisdiction over other sovereigns in certain classes of cases, such as those involving
foreign ministers or the person of the sovereign."

● It found that the Balaou was a public armed vessel commissioned by and in service of Emperor
Napoleon of France. Essentially, the Court held that the Baloou entered American territory under
the implied promise that it was exempt from the jurisdiction of the United States since it
enjoyed sovereign immunity. Thus, by allowing French naval ships in U.S. ports, it was
implicit that these ships will be protected by the Foreign Sovereign Immunity Doctrine.

● The Court held that "The jurisdiction of the nation within its own territory is necessarily exclusive
and absolute. It is susceptible of no limitation not imposed by itself."

● That case extended virtually absolute immunity to foreign sovereigns as a matter of grace and
comity. Since the case of The Schooner Exchange v. M'Faddon, it is well settled that
governmental instrumentalities, like warships, are exempt from the jurisdiction of a
particular state’s courts.