          United States Court of Appeals
                     For the First Circuit


No. 17-2211

                       CYNTHIA L. MERLINI,

                      Plaintiff, Appellant,

                               v.

                             CANADA,

                      Defendant, Appellee.


          APPEAL FROM THE UNITED STATES DISTRICT COURT
                FOR THE DISTRICT OF MASSACHUSETTS

         [Hon. Nathaniel M. Gorton, U.S. District Judge]


                             Before

                   Lynch, Kayatta, and Barron,
                         Circuit Judges.


     Theodore J. Folkman, with whom Murphy & King, P.C. was on
brief, for appellant.
     John F. Cooney, with whom Benjamin E. Horowitz, Venable LLP,
D.E. Wilson, Jr., Andrew E. Bigart, and Liz C. Rinehart were on
brief, for appellee.


                          June 10, 2019
           BARRON, Circuit Judge.            Cynthia Merlini ("Merlini") is

a United States citizen who was injured in the course of her

employment      as    an    administrative    assistant    at     the    Canadian

consulate in Boston, Massachusetts.            The injury occurred in 2009

when she tripped over a cord in the consulate that had not been

secured to the floor.         In 2017, as a result of that injury, Merlini

sued Canada for damages in the United States District Court for

the   District       of    Massachusetts   pursuant   to   the    Massachusetts

Workers' Compensation Act (the "MWCA"), which is codified at

Massachusetts General Laws chapter 152.

           The District Court dismissed Merlini's complaint for

lack of jurisdiction after concluding that Canada was immune from

the suit under the Foreign Sovereign Immunities Act ("FSIA"), 28

U.S.C. § 1602 et. seq.          We now reverse.

                                       I.

           In 2003, the government of Canada hired Merlini -- who

is a resident of Massachusetts, a citizen of the United States,

and not a citizen of Canada -- to be an administrative assistant

to the Consul General of Canada in Boston.             Merlini asserts, and

Canada does not contest, that her "duties" in this position "were

purely clerical, and comparable to the duties of an assistant or

secretary to an executive in any private firm," as "[s]he answered

the   phones,    maintained       files,   typed   letters,      and    did   other

secretarial work" in the Canadian consulate in Boston. She further


                                      - 2 -
asserts, again without dispute, that "[s]he was not a consular

officer," "[s]he had no governmental, consular, diplomatic, or

official duties," "[s]he took no competitive examination before

hiring," and "she was not entitled to tenure protections, or to

the   employment       benefits    Canadian   foreign   service   officers

received."

             Merlini alleges that, while setting up coffee and tea

service on January 22, 2009 for a meeting at the consulate, she

tripped   over   an    unsecured   speakerphone   cord,   fell,   struck   a

credenza, and thereby sustained "a serious injury" that left her

unable to work.       Canada does not challenge that allegation for the

purpose of the present appeal.          Additionally, it is undisputed

that, per Canada's own national workers' compensation system,

Canada paid Merlini what amounted to her full salary from shortly

after the accident until October 2009.

             Sometime thereafter, however, Canada determined that

Merlini was able to return to work and ceased paying her pursuant

to its national workers' compensation system.           That determination

appears to have set matters on the course that has resulted in the

suit that is now before us on appeal.

             The initial step on that course was Merlini's request

that Canada reconsider its determination to stop paying her under

Canada's workers' compensation system.         Following Canada's denial




                                     - 3 -
of that request for reconsideration, Merlini shifted course and

sought relief under Massachusetts law.

           Merlini      did   so   first,     in    2011,   by    bringing   an

administrative    claim       against       the     Massachusetts      Workers'

Compensation Trust Fund ("WCTF").        That fund provides, among other

things, for the payment of benefits to employees who are unable to

work in consequence of workplace injuries that they have suffered

while   working   for    an   employer      who    is   subject   to   personal

jurisdiction within the Commonwealth and who is "uninsured" for

purposes of the MWCA.         See Mass. Gen. Laws ch. 152 § 65(2)(e).

Chapter 152 provides that, to qualify as "insured," an employer

must (1) have insurance with an insurer, (2) hold membership in a

workers' compensation self-insurance group certified by the state,

or (3) be licensed as self-insured annually by the state, which

requires the employer, among other things, to complete a detailed

application, provide certain financial information, post a surety

bond to or deposit negotiable securities with the state to cover

any losses that may occur, and purchase catastrophe reinsurance of

at least $500,000.      See id. at §§ 1(6), 25A; 452 Mass. Code Regs.

5.00; see also LaClair v. Silberline Mfg. Co., 393 N.E.2d 867, 871

(Mass. 1979).

           In 2013, the Massachusetts Department of Industrial

Accidents ("DIA") held an evidentiary hearing, in which Canada

participated as amicus curiae for the WCTF, on Merlini's claim


                                    - 4 -
against the fund.          An administrative judge found that Merlini was

entitled to ongoing incapacity benefits from the fund under chapter

152 § 34 (temporary total incapacity benefits) and chapter 152

§ 34A (permanent total incapacity benefits).

             The WCTF then appealed this ruling to the DIA's Reviewing

Board   ("DIA    Board").         In   2015,    the    DIA   Board    reversed       the

administrative judge's ruling and denied Merlini the benefits from

the fund.       The DIA Board determined that (1) Canada was not

"subject to the personal jurisdiction of the Commonwealth"; (2)

Canada was not "uninsured" for purposes of the statute because it

had sovereign immunity; and (3) the WCTF was not liable if an

employee was entitled to workers' compensation benefits in any

other jurisdiction,          Mass. Gen. Laws ch. 152 § 65(2)(e)(i), and

Merlini was in fact entitled under Canadian law to such benefits

under Canada's national workers' compensation system.

             In 2016, Merlini sought review of the DIA Board's ruling

from the Massachusetts Appeals Court ("MAC").                   The MAC upheld the

Board's ruling.       The MAC did so, however, only on the ground that,

in    consequence     of    the   injury   that       Merlini    suffered       at   the

consulate,      she   had     been     entitled       to   benefits        in   another

jurisdiction -- namely, Canada.            Thus, the MAC did not "address

whether the Canadian government is subject to the jurisdiction of

the   Commonwealth     or     whether   the     Consulate       was   an    'uninsured

employer' in violation of chapter 152."


                                        - 5 -
            Merlini did not appeal the MAC's ruling.     Instead, in

2017, Merlini sued Canada for damages in federal district court in

the District of Massachusetts pursuant to chapter 152.    It is that

suit that is the subject of this appeal.

            Canada moved to dismiss Merlini's suit on jurisdictional

grounds under Federal Rule of Civil Procedure 12(b)(1).       Canada

contended in its motion that it was entitled to foreign sovereign

immunity under the FSIA and thus that the District Court lacked

jurisdiction.    Canada also separately moved to dismiss Merlini's

suit under Federal Rule of Civil Procedure 12(b)(6) for failure to

state a claim.    Canada did so on the ground that the DIA Board's

ruling that Canada was not "uninsured" was preclusive of Merlini's

claim because the DIA Board had ruled on that basis that Canada

"was not required to obtain local workers' compensation insurance

or register with the state as a self-insurer and therefore could

not be considered an uninsured employer" under the MWCA.

            In opposing Canada's motion to dismiss, Merlini first

asserted that two exceptions to the FSIA's presumption of foreign

sovereign immunity applied: the "commercial activity" exception,

28 U.S.C. § 1605(a)(2),1 and the "noncommercial tort" exception,


     1   This provision states that:
            A foreign state shall not be immune from the
            jurisdiction of courts of the United States or of
            the States in any case in which the action is based
            upon a commercial activity carried on in the United



                                - 6 -
id. at § 1605(a)(5).2     Merlini thus contended that the District

Court had jurisdiction over Canada.     Merlini also argued that she

had stated a claim against Canada because the DIA Board ruling did

not preclude her claim.

            In December 2017, the District Court dismissed Merlini's

complaint for lack of jurisdiction on the grounds that, pursuant

to the FSIA, Canada is "'presumptively immune' from liability in

federal courts of the United States" and that Merlini had failed

to demonstrate that either of the two FSIA exceptions on which she




            States by the foreign state; or upon an act
            performed in the United States in connection with
            a commercial activity of the foreign state
            elsewhere; or upon an act outside the territory of
            the United States in connection with a commercial
            activity of the foreign state elsewhere and that
            act causes a direct effect in the United States.
     2   This provision states that:
            A foreign state shall not be immune from the
            jurisdiction of courts of the United States or of
            the States in any case not otherwise encompassed in
            paragraph (2) [the "commercial activity" exception]
            above, in which money damages are sought against a
            foreign state for personal injury or death, or
            damage to or loss of property, occurring in the
            United States and caused by the tortious act or
            omission of that foreign state or of any official
            or employee of that foreign state while acting
            within the scope of his office or employment;
            except this paragraph shall not apply to -- (A) any
            claim based upon the exercise or performance or the
            failure to exercise or perform a discretionary
            function regardless of whether the discretion be
            abused, or (B) any claim arising out of malicious
            prosecution, abuse of process, libel, slander,
            misrepresentation, deceit, or interference with
            contract rights.

                                - 7 -
relied in contesting Canada's sovereign immunity applied.              Merlini

v. Canada, 280 F. Supp. 3d 254, 256, 258 (D. Mass. 2017) (quoting

Saudi Arabia v. Nelson, 507 U.S. 349, 355 (1993)).               The District

Court "decline[d] to address" Canada's separate contention that

Merlini had failed to state a claim for which relief could be

granted.   Id. at 259.        Merlini now appeals the District Court's

dismissal of her claim for lack of jurisdiction and also contends

that the dismissal of her claim may not be affirmed on issue

preclusion grounds.

                                    II.

           We   start    by     describing    certain    aspects       of   the

Massachusetts workers' compensation scheme, as codified by chapter

152 of the MWCA.        Those provisions figure prominently in the

parties'   dispute   over     whether   Canada   is   entitled    to   foreign

sovereign immunity in this case.

           As a general matter, the MWCA bars an employee from suing

her employer for a work-related injury -- including one resulting

from a fellow employee's conduct -- when the employer is "insured"

within the meaning of the MWCA.         See Mass. Gen. Laws ch. 152 § 24.

The MWCA imposes this bar by providing that an employee waives the

"right of an action at common law . . . [with] respect to an injury

that is compensable under [the MWCA]" if the employer was insured

within the meaning of the MWCA at the time of the employee's hiring

or became insured prior to the employee's injury, unless the


                                   - 8 -
employee preserves such a right by providing proper notice of the

employee's intent to preserve it.   Id.

          Chapter 152, however, sets forth a corollary to this

bar.   It provides that, if an employer is not insured within the

meaning of the MWCA, then an employee, generally, may bring a suit

against the employer to recover for a workplace injury -- even if

the conduct is caused by a fellow employee.    See Hanover Ins. Co.

v. Ramsey, 539 N.E.2d 537, 538 n.3 (Mass. 1989) ("An employer who

has failed to obtain workers' compensation insurance can be held

liable essentially in all cases in which the employee can prove

that he was injured in the course of his work.").

          Moreover, chapter 152 makes clear that, in such a suit

by the employee, the employer is deprived of asserting a host of

important defenses that would ordinarily be available at common

law, which effectively renders the employee's claim against the

employer a "strict liability" claim.      See Doe v. Access Indus.,

Inc., 137 F. Supp. 3d 14, 16 (D. Mass. 2015); Coppola v. City of

Beverly, 576 N.E.2d 686, 687 (Mass. App. Ct. 1991).   Section 66 of

chapter 152 specifies the limitations on the defenses that are

available as follows:

          Actions brought against employers to recover
          damages for personal injuries or consequential
          damages sustained within or without the
          commonwealth by an employee in the course of
          his employment . . . shall be commenced within
          twenty years from the date the employee first
          became aware of the causal relationship


                              - 9 -
          between the disability and his employment. In
          such     actions      brought     by      said
          employees . . . it shall not be a defense: 1.
          That the employee was negligent; 2. That the
          injury was caused by the negligence of a
          fellow employee; 3. That the employee had
          assumed voluntarily or contractually the risk
          of the injury; 4. That the employee's injury
          did not result from negligence or other fault
          of the employer, if such injury arose out of
          and in the course of employment.

          Merlini contends that, because Canada is not insured

(even as a self-insurer) within the meaning of chapter 152, she is

entitled under chapter 152 to bring her suit against Canada for

the workplace injury that she suffered. And, she further contends,

for that same reason, Canada is subject in her suit to the

limitations on the defenses that are set forth in § 66.       Canada

argues in response that, precisely because Merlini relies on § 66,

it is entitled to immunity under the FSIA, even assuming that

Canada does not qualify as being "insured" within the meaning of

chapter 152.   Thus, Canada contends, Merlini's claim must be

dismissed for lack of jurisdiction.

          We must now decide whether Canada is right.      To do so,

we must address Merlini's contention that Canada lacks foreign

sovereign immunity in consequence of either of two exceptions to

such immunity that the FSIA recognizes.




                             - 10 -
                                       III.

            The    FSIA    "provides     the     sole   basis    for    obtaining

jurisdiction over a foreign state in federal court."                     Universal

Trading & Inv. Co. v. Bureau for Representing Ukrainian Interest

in Int'l & Foreign Courts, 727 F.3d 10, 16 (1st Cir. 2013) (quoting

Argentine Republic v. Amerada Hess Shipping Co., 488 U.S. 428, 439

(1989)).    The FSIA establishes "a presumption of foreign sovereign

immunity from the jurisdiction of the courts of the United States"

that typically controls the jurisdictional question.                   Id. (citing

28 U.S.C. § 1330; Verlinden B.V. v. Cent. Bank of Nigeria, 461

U.S. 480, 485 n.5 (1983)).        Thus, as a general matter, "courts in

the   Unites      States   lack   both    subject       matter   and      personal

jurisdiction over a suit against a foreign sovereign."                  Id.

            The FSIA does, however, set forth a list of express

exceptions to the foreign sovereign immunity that it generally

recognizes, such that foreign states are not immune from suit in

federal court if one of those "enumerated exceptions to immunity

applies."    Id. (citing 28 U.S.C. §§ 1604, 1605, 1605A; Verlinden,

461 U.S. at 488).      Merlini invokes two of those exceptions -- the

"commercial    activity"     exception     and    the   "noncommercial        tort"

exception -- in contending that Canada is not entitled to sovereign

immunity from her suit.

            We focus here on one of them, the "commercial activity"

exception, 28 U.S.C. § 1605(a)(2), as we conclude that, contrary


                                   - 11 -
to the District Court's ruling, this exception does apply.           This

conclusion, moreover, precludes the "noncommercial tort" exception

from applying.       See 28 U.S.C. § 1605(a)(5) (providing that "[a]

foreign state shall not be immune from the jurisdiction of courts

of the United States or of the States in any case not otherwise

encompassed     in    paragraph   (2)      [the    "commercial   activity"

exception]").    Our review of the District Court's ruling on this

score is de novo.      Universal Trading, 727 F.3d at 15.

                                    A.

          The "commercial activity" exception provides in relevant

part that "a foreign state is subject to jurisdiction in any case

'in which the action is based upon a commercial activity carried

on in the United States by the foreign state.'"           Fagot Rodriguez

v. Republic of Costa Rica, 297 F.3d 1, 5 (1st Cir. 2002) (emphasis

added) (quoting 28 U.S.C. § 1605(a)(2)).          The inquiry into whether

the exception applies -- at least in a case like this, in which

the parties agree that the foreign state "carried on" the relevant

action "in the United States" -- involves two steps.

          The first step "requires a court to 'identify[] the

particular conduct on which the [plaintiff's] action is based.'"

OBB Personenverkehr AG v. Sachs, 136 S. Ct. 390, 395 (2015)

(alteration in original) (quoting Saudi Arabia v. Nelson, 507 U.S.

349, 356 (1993)).      In performing that threshold inquiry, "a court

should identify that 'particular conduct' by looking to the 'basis'


                                  - 12 -
or 'foundation' for a claim," which the court has variously

described as "'those elements . . . that, if proven, would entitle

a plaintiff to relief'" and as "the gravamen of the complaint."

Id. (omission in original) (internal citations omitted) (quoting

Nelson, 507 U.S. at 357).

           This inquiry requires more than a myopic focus on whether

"one element" of the claim is based upon a "commercial activity"

of the foreign state.   See id. at 394-96.   The right approach looks

beyond the fact that a single element of the claim might be "based

on" such conduct and instead "zeroe[s] in on the core of" the

plaintiff's claim.   Id. at 396.

           After a court identifies the particular conduct by the

foreign state on which the plaintiff's claim is "based," the next

step in the inquiry requires a court to determine whether that

conduct qualifies as "commercial activity."     Fagot Rodriguez, 297

F.3d at 5.   If the conduct does so qualify, then the "commercial

activity" exception to foreign state sovereign immunity applies,

at least when, as in this case, the parties do not dispute that

the conduct was "carried on" by the foreign state "in the United

States."

           "The term 'commercial activity' encompasses both 'a

regular course of commercial conduct' and 'a particular commercial

transaction or act.'"    Id. (quoting 28 U.S.C. § 1603(d)).    As we

have explained, however, "the question is not whether the foreign


                               - 13 -
government [was] acting with a profit motive or instead with the

aim of fulfilling uniquely sovereign objectives," but "[r]ather,

the issue is whether the particular actions that the foreign state

perform[ed] (whatever the motive behind them) [were] the type of

actions by which a private party engages in 'trade and traffic or

commerce.'"    Id. at 6 (alterations in original) (quoting Republic

of Argentina v. Weltover, Inc., 504 U.S. 607, 614 (1992)).             Thus,

"[i]n assessing whether a certain transaction or course of conduct

is commercial in character, courts must look to the 'nature' of

the activity rather than its 'purpose.'"       Id. at 5-6; see also 28

U.S.C. § 1603(d) ("The commercial character of an activity shall

be determined by reference to the nature of the course of conduct

or particular transaction or act, rather than by reference to its

purpose.").

             Against   this   legal   background,   the   key    questions

concerning    the   "commercial   activity"   exception   that    we    must

address in this appeal are the following: what conduct is Merlini's

claim against Canada "based on," and is that conduct "commercial

activity"?     We turn, then, to those two questions, starting with

the first.

                                      B.

             In taking up the first question, we begin by observing

that Canada does not dispute that it employed Merlini at its

consulate in Boston, that she is an American citizen and not a


                                  - 14 -
Canadian citizen, that her employment involved only duties that

"were purely clerical," and that her employment lacked indicia of

diplomatic    or   civil    service.3      Nor    does    Canada   contest,     for

purposes of this appeal, that Merlini was injured while performing

her ordinary clerical duties as Canada's employee in the consulate

in Boston.

             Thus, if Merlini's complaint is "based on" Canada's

employment of her as a clerical worker doing routine clerical work

at   the   consulate   in    Boston,     then    the     "commercial     activity"

exception would appear to apply.           See H. Rep. No. 94-1487, at 16

(1976), reprinted in 1976 U.S.C.C.A.N. 6604, 6615 (describing

"[a]ctivities such as a government's . . . employment or engagement

of laborers, clerical staff or public relations or marketing agents

. . . [as] those included within the definition [of commercial

activity]" (emphasis added)).           In fact, Canada does not appear to

argue otherwise.

             The State Department, in its amicus brief, however,

contends    that   Merlini's    complaint        is    solely   "based    on"   the

negligent conduct by her fellow employee that caused the injury

that she suffered during the course of her employment -- namely,



      3As already mentioned, Canada does              not contend that Merlini
had governmental, consular, diplomatic,               or official duties; took
a competitive examination before hiring;              or was entitled to tenure
protections or the employment benefits                Canadian foreign service
officers receive.



                                   - 15 -
what she alleges in her complaint to have been the negligent laying

of the cord by that employee.          The Department then contends that

this conduct does not qualify as "commercial activity" and thus

that the "commercial activity" exception does not apply.                    Rather,

the Department contends, the "noncommercial tort" exception is the

only exception that might apply in Merlini's case, insofar as her

action under § 66 can be characterized -- notwithstanding the fact

that it strips the employer of asserting an absence of negligence

as a defense -- as one that seeks recovery "against a foreign state

for personal injury . . . caused by [a] tortious act or omission."

28 U.S.C. § 1605(a)(5) (emphasis added).                 The Department thus

argues that we should vacate and remand to permit Merlini to

develop her claim of negligence under the "noncommercial tort"

exception.

             To    establish   the   premise    on     which    this      contention

rests -- namely, that the suit is based solely on the conduct of

Merlini's    fellow     employee     with   respect     to     the   speakerphone

cord -- the Department invokes the Supreme Court's opinion in Saudi

Arabia v. Nelson.       There, the plaintiff argued that his claims of

torture and false imprisonment at the hands of the Saudi Arabian

government    were     "commercial"    in     nature    because      it    was   his

employment with the Saudi Arabian government that "led to" those

injuries.     Nelson, 507 U.S. at 358.         The Supreme Court, however,

disagreed.        In so deciding, the Court held that it was wrong to


                                     - 16 -
characterize      the    plaintiff's       claims       as    being    "based     on"

"commercial    activity"       simply      because        "commercial    activity"

"preceded"    the   conduct      from    which   those       claims   arose.     Id.

Instead, the Court stressed that while the plaintiff's employment

may have "led to" his injuries at the hands of the Saudi Arabian

government in a temporal sense, the actions that effectuated those

injuries   were     in   no   way   tied    to   that     employment     and    were,

therefore, not "commercial" in nature.              Id.      The Department argues

that the same conclusion is required here.

           We disagree.       The MWCA requires that Merlini prove only

that she was injured in the workplace in the course of her

employment with Canada.          Consequently, Merlini is not required to

prove -- as the plaintiff in Nelson was required to prove as to

his claims for battery, unlawful detainment, wrongful arrest and

imprisonment, false imprisonment, inhuman torture, disruption of

normal family life, and infliction of mental anguish -- any action

by any person that caused the underlying injury. She has to prove,

instead, that she suffered a workplace injury in the course of her

employment and that the defendant, Canada, was her employer. Given

that courts have held that an employer's maintenance of a hostile

or   discriminatory       work      environment      constitutes        "commercial

activity" for the purposes of a Title VII suit against an employer,

42 U.S.C. § 2000e–2(a), -- see, e.g., Holden v. Canadian Consulate,

92 F.3d 918, 922 (9th Cir. 1996); Ashraf-Hassan v. Embassy of


                                        - 17 -
France   in    United   States,   40   F.   Supp.    3d   94,     102-03   (D.D.C.

2014) -- we fail to see why that same logic does not apply to

Merlini’s § 66 claim against her employer for workplace injuries

suffered by employees during the course of their employment.                  Hers

is no more an ordinary slip and fall case than those cases are

ordinary harassment cases.        Each rests on a claim that makes the

employer directly liable for what happens in the workplace to the

employee who brings the suit.

              To be sure, the Supreme Court has stressed that to find

the gravamen of any personal injury suit, one must look to "the

point of contact -- the place where the boy got his fingers

pinched."     Sachs, 136 S. Ct. at 397 (internal quotations omitted).

However, nothing in that precedent requires that we assess that

conduct independent of the plaintiff's actual claim, which, in

this case, is a claim against the employer -- not a fellow employee

-- and requires no proof that any fellow employee engaged in any

particular conduct.

              We find the D.C. Circuit's analysis in El-Hadad v. United

Arab Emirates instructive in this regard.            496 F.3d 658 (D.C. Cir.

2007).      There, the Court held that that the gravamen of the

plaintiff's     complaint,   which     alleged      breach   of    contract    for

wrongful termination, involved "commercial activity," in part,

because it occurred in the "employment context."                Id. at 663.     In

choosing to focus on the "employment relationship . . . as a


                                   - 18 -
whole," the Court noted that a "narrow[er]" framing of the gravamen

of    the    complaint     --   focusing    myopically     on    the     plaintiff's

defamation      or     breach   of   contract   claims     divorced       from     the

employment context -- would "defy analysis" under the "commercial

activity" inquiry.         Id. at 663 n.1 (highlighting the difficulty of

characterizing         a   "breach    of    contract,"         without    more,     as

"commercial" or "non-commercial").

              Simply put, Merlini's employment did not simply "le[ad]

to" the injury that she received; it provides the legal basis for

the only cause of action that she has against her employer for the

injury for which she seeks to recover.              See In re Opinion of the

Justices, 34 N.E.2d 527, 544 (Mass. 1941) (establishing that

chapter 152 §66 "must be interpreted as creating a cause of action

in    an    employee    sustaining    an   injury   'in    the     course     of   his

employment' that is a 'direct result' of such employment though

not   a     'direct    result   of   any   negligence     on    the    part   of   the

employer'").

              We recognize that, as the Department notes, the Supreme

Court did not reject all of Nelson's claims on the ground that his

allegations of "commercial activity" (his employment) preceded the

actual conduct causing his injuries.            Instead, in both Nelson and

the Court's subsequent decision in Sachs, the Supreme Court noted

that, with respect to the plaintiffs' failure to warn claims, the

exception triggering activities (Nelson's employment and Sachs's


                                      - 19 -
ticket     purchase)     were    necessary    elements        of   those      claims.

Nonetheless, the Court concluded in both cases that the failure to

warn     claims        were      impermissible         because        they       were

"merely . . . semantic          ploy[s],"    Nelson,    507    U.S.    9   at   363,

"artful[ly] pled[]," Sachs, 136 S. Ct. at 396, to avoid the foreign

states' sovereign immunity.

            Insofar as the Department means to argue that Merlini's

claims are, in some way, a similar "semantic ploy" to avoid

Canada's     sovereign     immunity,    no    such     concerns       exist     here.

Merlini's chapter 152 claim was not part of some shrewd litigation

strategy aimed at navigating around Canada's sovereign immunity.

It was, instead, the only claim that Merlini could bring against

her employer for the workplace injury that she suffered under the

statutory framework established by the Massachusetts legislature

for permitting employees to seek redress for such injuries from

their employers.       That framework has, as one of its express aims,

the goal of incentivizing employers to comply with the law's

worker's compensation requirement so that employees are ensured

adequate coverage in situations where they are injured during the

course of their employment.         See In re Opinion of the Justices, 34

N.E.2d at 543-44 (describing the "manifest[] . . . purpose" of

chapter 152 as "leav[ing] non-subscribing employers in such a

disadvantageous position that hardly any employer could afford not

to accept the insurance provisions of the act").


                                     - 20 -
              Thus, even if we were to accept that the gravamen of

Merlini's complaint does not encompass Canada's choice to forgo

obtaining the requisite insurance, we still would find that the

"commercial activity" exception applies.            And that is because the

conduct on which her claim is based cannot be divorced from her

"employment relationship" with Canada.

              In so deciding, though, we emphasize that we reach this

conclusion because Merlini is a United States citizen -- and not

a citizen of Canada -- whom Canada employed to work for it as

clerical staff in the United States.            Accordingly, Merlini is just

the type of employee whose employment by a foreign state Congress

identified as an example of "commercial activity" by a foreign

state.     See H. Rep. No. 94-1487, at 16 (1976), reprinted in 1976

U.S.C.C.A.N. 6604, 6615.          Nor does Canada argue that there is

anything      about   Merlini's    duties    that    supports     a   different

conclusion.     We thus do not mean to suggest that the outcome would

be the same if Merlini's position were not purely "clerical."              See

Kato     v.   Ishihara,   360     F.3d   106,     110-14   (2nd   Cir.   2004)

(characterizing "product promotion for Japanese companies" as

"governmental" and, therefore, noncommercial); Butters v. Vance

Intern., Inc., 225 F.3d 462, 465 (4th Cir. 2004) (characterizing

"[p]roviding security for the royal family" of Saudi Arabia as

"sovereign" and, therefore, noncommercial).




                                    - 21 -
                                          C.

                We turn, then, to Canada's contention, which it also

made       to   the   District   Court,        that   "[t]he   circumstances   of

[Merlini's] employment, and whether Canada could or should have

prevented the alleged accident," are "incidental and immaterial

under [Merlini's] theory of the claim."               Canada points to the fact

that Merlini is relying in bringing her claim on chapter 152 § 66,

which provides that "[a]n employer is liable in tort to an employee

without proof of negligence if the employer is required to maintain

workers' compensation insurance and fails to do so (or fails to

become a licensed self-insurer) . . . ."                Thorson v. Mandell, 525

N.E.2d 375, 377 (Mass. 1988).

                Canada argues that Merlini's reliance on § 66 is of

critical importance in determining the gravamen of her complaint.

Canada contends that, due to her reliance on that provision of

chapter 152, Merlini is necessarily bringing a claim that is "based

on" "how Canada provides workers' compensation benefits," given

that her claim necessarily depends on the fact that Canada chose

to compensate her through a means that does not qualify an employer

as "insured" under chapter 152.4               (Emphasis added).




       4
       Notably, Canada does not dispute the fact that this activity
was conducted by the Canadian government, nor does it dispute that
it was performed in the United States.


                                     - 22 -
           The District Court appeared, at least at points, to agree

with Canada that the conduct that we must assess to determine

whether it is "commercial" in nature is Canada's "decision to

provide   benefits   directly    under        its   own   [national   workers'

compensation insurance] system."              In particular, the District

Court, after describing "[t]he determinative question" at the

first step of the inquiry as being "whether [Canada's] decision

not to purchase workers' compensation insurance is commercial in

nature," ultimately concluded that Canada's "decision to provide

its own benefits does not fall under the commercial activit[y]

exception because the decision to create and organize a workers'

compensation program is sovereign in nature."                Merlini, 280 F.

Supp. 3d at 257 (emphasis added).

           The State Department, in its amicus brief, also endorsed

this position as an alternative to its argument that the gravamen

of   Merlini's   claim   is   more    appropriately       characterized   as   a

"noncommercial tort."     The Department contends that "Canada opted

out of the Massachusetts workers' compensation system in a manner

available exclusively to sovereigns -- by enacting a statute

creating an alternate and uniform compensation regime for all

Canadian employees, wherever in the world they might be."

           But, while Canada and the District Court are right that

Merlini's claim does rely on § 66, nothing in § 66, or, for that

matter, the whole of chapter 152, makes how an "uninsured" employer


                                     - 23 -
chooses to compensate an injured employee of any relevance to a

chapter 152 claim for damages against that employer.    Chapter 152

requires, in relevant part, only that an employee must show "that

[the employer] had to carry worker's [sic] compensation insurance"

for an employee and "that [the employer] did not carry it."    Beath

v. Nee, 74 Mass. App. Ct. 1119, 1119 (2009) (unpublished).       The

statute does not require any showing regarding what alternative

means, if any, the employer may have used to compensate the

employee once the employee has shown that the employer was not

insured within the meaning of chapter 152.      Thus, while we must

"zero[] in on the core" of her claim, Sachs, 136 S. Ct. at 396,

and while we may not unduly seize upon merely one element of her

claim, see id. at 394-96, Merlini's claim is in no sense "based

on" Canada's decision to compensate her through its own national

workers' compensation system.        See Sachs, 136 S. Ct. at 395

(explaining that "a court should identify . . . those elements

. . . that, if proven, would entitle a plaintiff to relief, . . .

and the gravamen of the complaint" (internal citations omitted)).

          That is not to say, though, that we reject Canada's

contention that its decision to forgo insurance forms part of what

may be understood to be the gravamen of Merlini's claim.      We may

assume that it does.   Cf. Nelson, 507 U.S. at 358 n.4.   But, even

if we do, we cannot ignore that Canada failed to obtain what

Massachusetts   courts    describe     as   "workers'   compensation


                              - 24 -
insurance," see LaClair v. Silberline Mfg. Co., Inc., 393 N.E.2d

867, 869 (Mass. 1979), and that Merlini's claim is based on the

fact that she is an employee who was injured during the course of

her employment while her employer failed to possess that type of

insurance.        See El-Hadad, 496 F.3d at 663 (declining to divorce

the conduct on which a breach of contract claim was based -- the

breach -- from the "employment context" in which it occurred).

Thus, even accepting that the gravamen of Merlini's claim relates

to Canada's failure to obtain the requisite insurance, our inquiry

into whether it is based on "commercial activity" would require us

to examine whether that failure -- given the employment context in

which it occurred -- constitutes "commercial activity."

             In    so     doing,        we     must   keep        in   mind    that    the

characterization of conduct as "commercial activity" turns on its

"nature" rather than its "purpose."                   28 U.S.C. § 1603(d).            Thus,

a sovereign's conduct constitutes "commercial activity" if "the

particular actions that the foreign state perform[ed] (whatever

the motive behind them) [were] the type of actions by which a

private party engages in 'trade and traffic or commerce,'" Fagot

Rodriguez,    297       F.3d   at   6    (alterations        in    original)    (quoting

Weltover, 504 U.S. at 614).              Applying that test, we conclude that

Canada's employment of Merlini without obtaining the requisite

insurance is properly deemed to be "commercial activity," at least

given that Merlini is a United States citizen whom Canada employed


                                             - 25 -
in Boston as clerical staff and that she seeks recovery for the

injury she suffered while performing her clerical duties.5

                                  1.

          We   start   by   considering    whether,   in   general,   an

employer's failure, in employing its workers, to be insured within

the meaning of chapter 152 is the type of conduct "by which a

private party engages in 'trade and traffic or commerce.'"        Fagot

Rodriguez, 297 F.3d at 6 (quoting Weltover, 504 U.S. at 614).         We

have little doubt that it is.

          Private employers in Massachusetts must regularly decide

whether, in employing their workers, they should obtain the kind

of insurance that chapter 152 contemplates or whether they instead

should take the risk of going bare.      See, e.g., Brown v. Leighton,

434 N.E.2d 176 (Mass. 1982) (uninsured taxicab driver employer);

Barrett v. Transformer Serv., Inc., 374 N.E.2d 1325 (Mass 1978)

(uninsured transformer service company employer); Truong v. Wong,

775 N.E.2d 405 (Mass. App. Ct. 2002) (uninsured tofu manufacturing




     5 Although we recognize that courts are instructed to give
"special attention" to the State Department's views on matters of
foreign immunity, see Jam v. Int'l Finance Corp., 139 S. Ct. 759,
770-71 (2019) (quoting Bolivarian Republic of Venezuela v.
Helmerich & Payne Int'l. Drilling Co., 137 S. Ct. 1312, 1320
(2017)), we are aware of no authority that would instruct us to
adopt the Department's views if we conclude -- as we do
here -- that they would have us run afoul of the statutory
instruction that we not permit the purposes behind foreign state
actions to serve as proxies for the nature of those actions. 28
U.S.C. § 1603(d); Weltover, 504 U.S. at 614.


                                - 26 -
plant employer).        That decision by employers about their approach

to insuring themselves against their employees' workplace injuries

impacts     the    overall    financial      wellbeing    of     the     employers'

businesses        and    generally    concerns     parties       (namely,       their

businesses' employees) who have commercial expectations about the

recourse that they will have against their employers in the event

that they suffer a workplace injury. See, e.g., Truong, 775 N.E.2d

at    408   (establishing     that    the   corporation       president    did    not

purchase     workers'     compensation      insurance    because    it    was    "too

expensive"); see also Rush-Presbyterian-St. Luke’s Med. Ctr. v.

Hellenic Republic, 877 F.2d 574, 580-81 (7th Cir. 1989) (describing

the    commercial       obligations   that     arise    out    of   traditionally

private, third-party transactions).6

             In recognizing the commercial nature of this choice by

a business to go bare in employing someone, we do not mean to

question whether Canada was in so "choosing"              -- while nonetheless

employing Merlini, a United States citizen, as a clerical worker




       6
       Of course, it may be that, in some instances, a private
business's failure to become insured within the meaning of chapter
152 is less the product of a commercial choice than a commercial
oversight, see, e.g., O'Dea v. J.A.L., Inc., 569 N.E.2d 841 (Mass.
App. Ct. 1991) (employer alleged to be uninsured due to a policy
lapse), especially given how disadvantageous such a decision would
appear to be for the employer. But, such an oversight still takes
place in the course of the business's employment of its workers
and in parallel with its business judgments about how to protect
against the commercial losses that might be incurred in consequence
of those workers suffering a workplace injury.


                                      - 27 -
in its consulate in Boston -- motivated by what it characterizes

as its sovereign obligation to provide its employees protection

through its own national workers' compensation system.               In fact,

Canada   asserts   that    it   has   no   legal   authority   --   given   the

limitations that it contends that Canadian law imposes -- to act

otherwise.      But, in light of the Supreme Court's decision in

Weltover, it is clear that the "motive behind" Canada's conduct in

employing Merlini without obtaining the requisite insurance is not

germane to the question of whether the activity of doing just that

is "commercial" for purposes of the FSIA's "commercial activity"

exception.     Fagot Rodriguez, 297 F.3d at 6 (quoting Weltover, 504

U.S. at 614); see also 28 U.S.C. § 1603(d).

             In Weltover, the plaintiffs brought a breach of contract

claim against Argentina after it defaulted on its bonds. Weltover,

504 U.S. at 610.          Argentina argued in response that foreign

sovereign immunity protected it from the suit, pointing to the

fact that the bonds were not issued for the ordinary commercial

purpose of "raising capital or financing acquisitions" but instead

as instruments for refinancing sovereign debt.                  Id. at 616.

According to Argentina, these refinancing measures were required

as part of the government's program for addressing its domestic

debt crisis.     Id.   Argentina thus argued that its decision not to

repay the bonds was part of a governmental policy undertaken for

sovereign rather than commercial reasons and therefore that the


                                      - 28 -
claim was based on activity that could not qualify as commercial

for FSIA purposes.      Id. at 616-17.

             The Supreme Court rejected Argentina's contention.                 Id.

at 617.     According to the Court, Argentina had defaulted on what

it termed "garden-variety debt."           Id. at 615.       Argentina's bonds,

like private bonds, were negotiable, were traded on international

markets, and came with the promise of future repayment. Id. Thus,

for purposes of determining whether Argentina's default on those

bonds     was   "commercial    activity,"     the        Court    explained   that

Argentina's participation in the bond market was of a type that

was commercial in nature and thus that it was "irrelevant why

Argentina participated in the bond market."                      Id. (emphasis in

original).

             Canada, of course, did not issue bonds.                  But, it did

employ a United States citizen as clerical staff in its Boston

consulate, thereby engaging in conduct that it does not dispute

qualifies as being "commercial" in nature. Nor does Canada dispute

that private businesses, when employing such clerical workers, are

subject    to   the   very   same   obligation      to    obtain    insurance    in

compliance with chapter 152 -- insofar as they wish to avoid being

subjected to personal injury suits such as Merlini brings -- or

that    their   employment    of    such    workers       without    having   such

insurance, as applied to those businesses, constitutes an activity

that is commercial in nature.


                                    - 29 -
          We   thus   do   not    see    how    Canada's   maintenance       of    a

"garden-variety" employment relationship with Merlini while not

maintaining    such   insurance    is    an    activity    that   is   any   less

"commercial"    in    nature      than    was     Argentina's     default         on

"garden-variety" debt in Weltover. In each case, the foreign state

can point to a sovereign "purpose" in acting as it did.                  But in

neither case does that reason speak to the "nature" of the foreign

sovereign's conduct.7      As a result, Canada provides no more reason


     7 The dissent argues that, in attempting to identify the
"nature" of Merlini's claim, we ignore the "outward form of
[Canada's] conduct," which the dissent characterizes as "informing
Merlini that she was subject to the GECA . . . , compensating her
pursuant to the GECA's benefits scheme after she made a claim of
injury, and not continuing her benefits when Canada's Workplace
Safety and Insurance Board (WSIB) determined after a full process
that Merlini was ready to return to work." However, none of these
actions constitutes the "outward conduct" that forms the basis of
Merlini's claim against the Canadian government. The only "outward
conduct" on Canada's part that Merlini needs to prove to succeed
in her claim is defined by the elements of the claim that § 66
permits her to bring.     Those elements make clear that she must
prove that Canada was her employer in Massachusetts when she
suffered the workplace injury for which she seeks recompense and
that Canada did not comply with the state's workers' compensation
requirements while having her in its employ. In fact, had Canada
registered as a self-insurer in compliance with chapter 152, it
could have performed each of the "outward" actions that the dissent
outlines and Merlini would not have had a claim that she could
bring under Massachusetts law. This point shows that the "outward
conduct" described by the dissent is simply immaterial to the claim
that Merlini brings here, such that her claim can in no sense be
understood to be "based on" it. She has a cause of action under
Massachusetts law against Canada for the workplace injury that she
suffered only because Canada employed her and, as her employer,
did   not   comply   with   the   state's   workers'   compensation
requirements. Because that kind of conduct is the kind of conduct
that private employers engage in regularly it is conduct that is



                                   - 30 -
for us to conclude that its conduct is "sovereign" rather than

"commercial" than Argentina provided for the Court in Weltover.

           Moreover,     we   note    that,    in   deciding    Weltover,      the

Supreme Court relied in part on the Seventh Circuit's reasoning in

Rush-Presbyterian.      Weltover, 504 U.S. at 614.         There, Greece had

entered   into    contracts   with    American      doctors    but     then   only

partially paid them for their services.              Rush-Presbyterian, 877

F.2d at 575-76.        The Greek government pointed out that it had

assumed these obligations as part of its comprehensive scheme to

provide healthcare to all of its citizens.            Id. at 580.      According

to   Greece,     the   fact   that    its     healthcare      system    was   not

profit-seeking, was funded by taxpayers, and operated through its

own set of administrative proceedings, placed Greece's activity in

retaining the doctors' services -- and thus its alleged failure to

pay them fully for those services -- squarely in the realm of

sovereign rather than "commercial activity."            Id. at 580-81.

           The Seventh Circuit disagreed.             The court made clear

that "private parties in the United States enter such agreements

routinely" and that "the 'basic exchange' of money for health care

services is the same" whether the payer is a government or a

private employer.      Id. at 581.    The court thus ruled that Greece's




properly characterized as "commercial activity," at least given
Merlini's particular attributes as a United States citizen working
in the Boston consulate as clerical staff.


                                     - 31 -
reasons for characterizing its conduct as noncommercial related

only to the purpose underlying Greece's decision to enter into the

contracts with the doctors and then not to pay them fully, rather

than to the nature of the decision to enter into those contracts

or to breach them.     Id. at 580.     And, for that reason, the Seventh

Circuit    rejected    Greece's      contention       that    the   "commercial

activity" exception did not apply.

            Here, Canada, like Greece, entered into a contract for

commercial services -- in this case, in the form of its employment

contract with Merlini, given that Canada does not dispute the

"commercial" nature of Canada's employment of her as clerical staff

at the consulate.     And, then, after having done so, Canada, like

Greece, failed to do what state law required of employers engaged

in such typical commercial employment relationships -- namely, in

this case, to be "insured" within the meaning of chapter 152 in

employing Merlini.

            To be sure, the existence of Canada's own national

workers'   compensation     system    may     explain   Canada's     motive   for

making a type of decision regularly made by private commercial

actors.    But, the existence of the foreign sovereign's system of

social    insurance   in   Rush-Presbyterian       helped     to    explain    the

purpose    behind   that   sovereign's      failure     to   undertake   a    duty

commonly required of employers engaged in commercial employment




                                     - 32 -
relationships.        Yet, Rush-Presbyterian makes clear that such a

fact does not thereby alter the commercial nature of that failure.

                                          2.

             Notwithstanding Weltover and Rush-Presbyterian, Canada

contends that this case is actually more closely analogous to both

Jungquist v. Sheikh Sultan Bin Khalifa Al Nahyan, 115 F.3d 1020

(D.C. Cir. 1997) and Anglo-Iberia Underwriting Mgmt. v. P.T.

Jamsostek, 600 F.3d 171 (2d Cir. 2010), in which the "commercial

activity" exception was held not to apply.                    See Jungquist, 115

F.3d at 1024; Anglo-Iberia, 600 F.3d at 176.                          Neither case,

however, supports Canada's position.

             In Jungquist, the D.C. Circuit held that the "commercial

activity" exception was inapplicable to claims brought against

officials of the government of the United Arab Emirates for actions

that those officials took in administering the Abu Dhabi medical

program in compliance with the Crown Prince Court's orders.                      115

F.3d    at   1020.        Specifically,    the     court    determined    that   the

officials engaged in no "commercial activity" with the plaintiffs,

but    instead    "fulfilled     [the    government's]       obligations    to   the

[plaintiffs]         by      performing        their       official      tasks    as

administrators."          Id. at 1030.

             In   Anglo-Iberia,     the        Second   Circuit   held    that   the

"commercial activity" exception did not apply to claims against

the Indonesian government for a fraud perpetrated by its employees


                                        - 33 -
in their capacities as administrators of the state-owned social

security insurer, Jamsostek.           600 F.3d at 174.     The court noted

that providing insurance is an activity that both the government

and private markets perform.          But, the court explained, Jamsostek

did not operate like a private insurer and therefore its wrongful

administration of that government-run insurance program did not

qualify as "commercial activity."          Id. at 176.

             The reason that neither Jungquist nor Anglo-Iberia aids

Canada's cause is simple.           In each of those cases, the claims at

issue     were   based   on   the    defendants'   administration   of   the

government programs at issue independent of any conduct by the

foreign state as the employer of the plaintiffs, such that it was

the manner of the administration of those programs -- and not the

manner of the foreign state's employment of the plaintiffs -- that

was alleged to be wrongful.

             Merlini's claim is quite distinct.            Even on Canada's

account, insofar as Merlini's claim is based on more than Canada's

employment of her at the consulate or the conduct that caused the

injury that she suffered there, her claim is still based on the

Canadian government's decision to employ her for clerical work at

the Boston consulate while not having the insurance contemplated

by chapter 152.     Thus, her claim is not based -- as the claims at

issue in Jungquist and Anglo-Iberia were -- on any allegation that

foreign    state   officials    acted    wrongfully   in   administering   a


                                      - 34 -
governmental program independent of the foreign state's employment

of   the   plaintiff   in   circumstances   in   which   such   employment

concededly constitutes "commercial activity."

            In that respect, Merlini's claim is no different from

the claims that other employees have brought against private

business employers that, like Canada, have not insured themselves

in the manner chapter 152 specifies for the injuries that their

workers may suffer in the workplace.         The existence of Canada's

own nationally administered program for compensating workers like

Merlini, in other words, only provides the justification for the

conduct by Canada on which Merlini's claim is based.             But that

justification speaks to Canada's "purpose" in engaging in that

conduct and not to the "nature" of the conduct itself.

            In fact, if Canada and the dissent's views prevailed, we

struggle to understand what recovery for workplace harm -- whether

concerning wages, benefits, or discriminatory treatment -- an

employee of a foreign government, who, like Merlini, is a United

States citizen employed as a clerical worker, could seek from the

employer under the "commercial activity" exception recognized in

the FSIA.    Yet, it is quite clear that Congress, in enacting the

"commercial activity" exception to foreign state immunity in the

FSIA, contemplated that some employees of foreign governments

would be entitled to recover for workplace harm against their

foreign state employer -- namely, those employees that, like


                                  - 35 -
Merlini,     are   United   States   citizens   employed   in   clerical

positions.     See H. Rep. No. 94-1487, at 16 (1976), reprinted in

1976 U.S.C.C.A.N. 6604, 6615 (describing "[a]ctivities such as a

government's . . . employment or engagement of laborers, clerical

staff or public relations or marketing agents . . . [as] those

included within the definition [of commercial activity]").          Nor

are we aware of any precedent supporting the notion that employees

like Merlini lose their right to recover against their foreign

state employer whenever that foreign employer establishes rules

different from ours for protecting them.8

                                     3.

             Finally, Canada contends that a ruling that it must

comply with the MWCA's insurance requirements or be stripped of

many common law defenses in any suit claiming damages for a




     8 The dissent relatedly argues that the "commercial activity"
exception should not apply to Canada in this context because, due
to Canada's own workers' compensation law, the government was not
allowed to comply with Massachusetts' insurance requirements under
chapter 152. We fail to see how Canada's legislative prohibition
against obtaining the type of insurance that would qualify Canada
as being "insured" for purposes of chapter 152 renders the act of
not acquiring compliant insurance any less "commercial" in nature.
As we have already argued, while Canada's sovereign workers'
compensation regime clearly provides the motivation for its
decision not to acquire compliant insurance under chapter 152,
that motivation does not strip Canada's decision not to provide
the requisite insurance of its "commercial" character, any more
than the presidential decree directing Argentina to default on its
bonds stripped that act of its "commercial" character in Weltover
by way of constituting executive action. See Weltover, 504 U.S.
at 610.


                                 - 36 -
workplace injury brought by an employee against the employer would

"produce an absurd result."           Such a conclusion, Canada contends,

would   essentially   force      Canada      to   subject     itself   to   having

Massachusetts assess its solvency through semi-annual audits and

various deposit requirements.          According to Canada, that kind of

intrusion into its finances "would violate basic principles of

comity" that foreign sovereign immunity exists to protect.                   Thus,

for this reason, too, Canada contends, the "commercial activity"

exception cannot be construed to apply here.

           We may, for present purposes, set aside the fact, which

Canada does not contest, that some foreign consulates as well as

the Quebec Government Office in Boston, which is a political

subdivision of Canada for the purposes of FSIA applicability,

apparently have obtained the insurance required by chapter 152.

The more fundamental point is that Canada's concerns about "comity"

do not provide a basis for concluding that it is immune from suit

in this case.

           As Canada rightly points out, the "FSIA's objective is

to give protection from the inconvenience of suit as a gesture of

comity."   Bolivarian Republic of Venezuela v. Helmerich & Payne

Int’l   Drilling   Co.,    137   S.    Ct.     1312,   1322   (2017)   (internal

quotations omitted) (noting that the FSIA was drafted with comity

concerns in mind).        But, by including the "commercial activity"

exception in the FSIA, Congress made clear that those concerns do


                                      - 37 -
not provide a reason to extend that protection to foreign states

with respect to a suit that the "commercial activity" exception

encompasses.     Thus, an appeal to comity cannot in and of itself

explain why a foreign state's conduct that is encompassed by that

exception should be treated as if it is not.

             Perhaps there is a case to be made that such comity

concerns are relevant to a merits determination -- as a matter of

Massachusetts or federal law -- that chapter 152's "insurance"

requirement does not apply to a foreign sovereign in the same way

that it applies to private employers.         But, FSIA immunity applies

only if, under the analysis that we must apply, see Weltover, 504

U.S. at 614; Fagot, 297 F.3d at 5–6, the conduct on which Merlini's

claim is based is not "commercial" in nature. And, for the reasons

that we have explained, the conduct here is commercial in nature,

even though it may have been undertaken for sovereign reasons.

Canada's appeal to comity, therefore, adds nothing to its argument,

which   we    otherwise   reject,     that   the   "commercial   activity"

exception does not apply here.       And thus, Canada's comity concerns

provide no basis for concluding that Canada enjoys an immunity

from this suit pursuant to the FSIA such that no federal court

even has jurisdiction to make a merits judgment.

             In its amicus brief, the State Department advances many

similar "comity" concerns to those presented by Canada.              But,

although we give "special attention" to the State Department's


                                    - 38 -
views on matters of foreign policy, see Jam, 139 S. Ct. at 770-71,

we   decline   to   place     much    weight     on    those   views    here.        The

Department itself does not view recovery by an employee like

Merlini   under     §    66   against    a     foreign   state    employer      to   be

necessarily adverse to United States foreign policy interests,

given that it argues to us that Canada might lack immunity from

Merlini's claim under the FSIA's "noncommercial tort" exception,

28 U.S.C. § 1605(a)(5).         And, as we have explained, the Department

sets forth no basis in the legislative history or text of the

FSIA -- or in any precedent construing it -- for finding that

Canada is immune from a suit under § 66 that is brought by a

clerical worker like Merlini.

                                         IV.

           Having        determined     that     the   FSIA    does    not   prohibit

Merlini's suit, Canada argues that we should nevertheless affirm

the District Court's dismissal on a ground not reached by the

District Court.          Specifically, Canada argues that Merlini has

failed to state a claim upon which relief can be granted, see Fed.

R. Civ. P. 12(b)(6), because the DIA Board's ruling operates to

preclude Merlini's suit.

           The parties agree that we apply Massachusetts issue

preclusion law.         In re Baylis, 217 F.3d 66, 70-71 (1st Cir. 2000).

Canada contends that the DIA Board's conclusion that "Canada is

not uninsured in violation of [the MWCA]" should be entitled to


                                        - 39 -
preclusive effect and thus bars Merlini's "relitigation" of that

issue in federal court.

             In order for an issue to have preclusive effect in a

later proceeding under Massachusetts law, the following elements

must be present:     (1) there was a final judgment on the merits in

the prior adjudication; (2) the party against whom preclusion is

asserted was a party to the prior adjudication; and (3) the issue

in the prior adjudication was identical to the issue in the current

adjudication and essential to the earlier judgment.        See Kobrin v.

Bd. of Registration in Med., 832 N.E.2d 628, 634 (Mass. 2005); see

also In re Baylis, 217 F.3d at 71.         An order from a state agency

is considered to be a final judgment for issue preclusion purposes,

however, only if it is unappealed. See, e.g., Almeida v. Travelers

Ins. Co., 418 N.E.2d 602, 605 (Mass. 1981) (noting that the

determination of an agency is not binding for preclusion purposes

after it has been appealed).       And here, Merlini appealed the DIA

Board's ruling to the MAC.       Thus, it is to the MAC's ruling that

we must look.

             The MAC's ruling, however, is of no help to Canada's

contention    that   Merlini's   claim   must   be   dismissed   on   issue

preclusion grounds.     In affirming the DIA Board's order, the MAC

did so only on one ground -- namely, that Merlini was not entitled

to recover from the WCTF because she was eligible for benefits in

another jurisdiction. The MAC expressly stated that it was not


                                  - 40 -
ruling on whether Canada was subject to the jurisdiction of

Massachusetts or whether the consulate was an "uninsured" employer

in violation of chapter 152.         For that reason, the MAC's "judgment

is conclusive [only] as to the first determination." In re Baylis,

217 F.3d at 71.    And, given that Canada makes no argument, just as

it made none to the District Court, that the judgment as to the

issue that the MAC did decide is preclusive of Merlini's claim,

Canada's argument for dismissal pursuant to Federal Rule of Civil

Procedure 12(b)(6) on the grounds of issue preclusion fails. See

P.R. Tel. Co., Inc. v. San Juan Cable LLC, 874 F.3d 767, 770 (1st

Cir. 2017), cert. denied, 138 S. Ct. 1597 (2018) (holding that any

argument not raised in the party's brief is deemed waived).

                                       V.

          For     the    foregoing    reasons   we   reverse   the   District

Court's grant of Canada's motion to dismiss and remand the case

for further proceedings.       The parties shall bear their own costs.



                        -Dissenting Opinion Follows-




                                     - 41 -
            LYNCH, Circuit Judge, dissenting.            In this important

case affecting this country's foreign relations, I respectfully

disagree with my colleagues.         The majority holds that Canada is

stripped of its sovereign immunity under the commercial activity

exception to the Foreign Sovereign Immunities Act ("FSIA"), 28

U.S.C. § 1602 et seq.      I disagree.

            This suit is based on Merlini's disagreement with the

decision of her employer, the Canadian consulate in Boston, not to

provide her with extended workers' compensation benefits, having

provided her with basic benefits.              That decision by Canada is

required by a Canadian legislative act, under which Canada has

chosen to provide its own workers' compensation system to all

consulate   employees,     regardless     of    nationality.     I   believe

Canada's actions are protected from suit by the FSIA.           Even if the

suit could be viewed as based not on a legislative act, but only

on an administrative act by Canada in its decision not to give

Merlini an extension on her benefits, Canada is still protected by

sovereign immunity.

            Further,   I   think    the      policy   implications   of   the

majority's view are grave.         What is sauce for the Canadian goose

under the majority's holding will prove to be a bitter sauce for

the American gander.       The majority view will, I believe, operate

to the detriment of the United States.          Compelling Canada to abide

by Massachusetts state law, at the expense of maintaining its own


                                    - 42 -
workers' compensation scheme, will redound to the harm of the U.S.

government's functions abroad, as I discuss later.

          Because a sovereign state is "presumptively immune from

the jurisdiction of United States courts" under the FSIA, Saudi

Arabia v. Nelson, 507 U.S. 349, 355 (1993), the burden falls upon

Merlini to demonstrate that an exception applies, see Universal

Trading & Inv. Co. v. Bureau for Representing Ukrainian Interest

in Int'l & Foreign Courts, 727 F.3d 10, 17 (1st Cir. 2013) (citing

Virtual Countries, Inc. v. Republic of S. Afr., 300 F.3d 230, 241

(2d Cir. 2002)).    I agree with the district court that this burden

has not been met.   See Merlini v. Canada, 280 F. Supp. 3d 254, 258

(D. Mass. 2017).    I set out my reasons below.9

                                  I.

          I first consider the text and meaning of the FSIA.    The

FSIA, enacted in 1976, "provides the sole basis for obtaining

jurisdiction over a foreign state in the courts of this country."

Sullivan v. Republic of Cuba, 891 F.3d 6, 9 (1st Cir. 2018)

(quoting Argentine Republic v. Amerada Hess Shipping Corp., 488




     9    I do agree with, and join, the majority in rejecting the
State Department's arguments in its amicus brief that (1) Merlini's
complaint is based only on the negligent conduct of her fellow
employee in laying the phone cord that Merlini tripped over and so
(2) we should vacate and remand for Merlini to make a negligence
claim under the noncommercial tort exception. But, as discussed
later, I agree with aspects of the State Department's brief,
particularly concerning this country's activities abroad.



                                - 43 -
U.S. 428, 443 (1989)).            According to the Supreme Court, "the

[FSIA's] manifest purpose [is] to codify the restrictive theory of

foreign sovereign immunity."         Nelson, 507 U.S. at 363.10             In a case

cited approvingly by the Nelson Court, the Second Circuit carefully

laid out the scope of the restrictive theory, which safeguards

immunity    for   "traditionally      .   .   .    quite       sensitive"    actions

including "internal administrative acts" and "legislative acts."

Victory    Transp.   Inc.    v.   Comisaria       Gen.    de    Abastecimientos    y

Transportes, 336 F.2d 354, 360 (2d Cir. 1964).                      And the Nelson

Court quoted from a much-cited law review article by a leading

commentator, stating, "[S]uch acts as legislation . . . cannot be

performed by an individual acting in his own name.                     They can be

performed only by the state acting as such."                   Nelson, 507 U.S. at

362 (quoting Hersch Lauterpacht, The Problem of Jurisdictional

Immunities of Foreign States, 28 Brit. Y.B. of Int'l L. 220, 225

(1952)).

            Under    the    FSIA's   commercial          activity    exception,    a

foreign state is not immune from suit in a case

            in which the action is based upon a commercial
            activity carried on in the United States by
            the foreign state; or upon an act performed in
            the United States in connection with a
            commercial activity of the foreign state

     10   Indeed, just months before the passage of the FSIA, the
Supreme Court noted that "it is fair to say that the 'restrictive
theory' of sovereign immunity appears to be generally accepted as
the prevailing law in this country." Alfred Dunhill of London,
Inc. v. Republic of Cuba, 425 U.S. 682, 703 (1976).


                                     - 44 -
          elsewhere; or upon an act outside the
          territory of the United States in connection
          with a commercial activity of the foreign
          state elsewhere and that act causes a direct
          effect in the United States.

28 U.S.C. § 1605(a)(2).11

          As the first step in considering this exception, we must

"identify[] the particular conduct on which [Merlini's] action is

'based' for purposes of the [FSIA]."     Nelson, 507 U.S. at 356.

This requires "zero[ing] in on the core of the[] suit," OBB

Personenverkehr AG v. Sachs, 136 S. Ct. 390, 396 (2015), without

focusing merely on "a single element of a claim," id. at 395.12



     11   The majority states correctly that its holding on the
commercial activity exception, see 28 U.S.C. § 1605(a)(2),
"precludes the noncommercial tort exception from applying." See
id. § 1605(a)(5).
          I consider the noncommercial tort exception briefly on
the merits here.      As the district court pointed out, the
noncommercial tort exception expressly does not apply to "any claim
based upon the exercise or performance or the failure to exercise
or perform a discretionary function regardless of whether the
discretion be abused."     28 U.S.C. § 1605(a)(5)(A); see Fagot
Rodriguez v. Republic of Costa Rica, 297 F.3d 1, 8 (1st Cir. 2002);
Merlini, 280 F. Supp. 3d at 258. Canada's decision to enact a
particular workers' compensation scheme clearly is a discretionary
legislative decision and is a decision "based on considerations of
public policy."   Berkovitz v. United States, 486 U.S. 531, 537
(1988).   Following the Supreme Court, we must avoid "judicial
'second guessing' of legislative and administrative decisions
grounded in social, economic and political policy through the
medium of an action in tort." United States v. S.A. Empresa de
Viacao Aerea Rio Grandense (Varig Airlines), 467 U.S. 797, 814
(1984).   Thus, Merlini's argument that Canada's conduct falls
within the exception for noncommercial torts is unavailing.
     12   In Sachs, the Court unanimously held that the commercial
exception did not apply to a claim concerning a grievous injury



                              - 45 -
That is, a court must identify the "gravamen of the complaint."

Id.

           Here,   when   we   properly    "zero[]   in   on   the   core   of

[Merlini's] suit," id. at 396, we see that it was the sovereign

decision by Canada to enact and administer its own compensation

scheme, including for all workers at consulates,13 that is the

basis for plaintiff's claim of injury.        Merlini seeks more in the

way of workers' compensation than Canada has provided.           I disagree

with the majority's characterization of Canada's conduct as being

"an employer's failure . . . to be insured" under state law, as




from a rail accident in Austria, and did not permit jurisdiction
over the foreign state-owned railway. 136 S. Ct. at 393. The
Court rejected the Ninth Circuit's reading of Nelson -- that the
commercial activity exception was properly met so long as a single
element of the claim met the exception -- and said again that
courts must focus on the acts of the sovereign alleged to have
injured the plaintiff.    "[T]he mere fact that the sale of the
Eurail pass would establish a single element of a claim is
insufficient to demonstrate that the claim is 'based upon' that
sale for purposes of § 1605(a)(2)." Id. at 395.
      13  Consulates, like embassies, by their operation are not
usual places. They embody actions by a sovereign exercising its
sovereign powers; the consulate here is an extension of Canada.
As Canada says, the "[c]onsulate's mission is to monitor and
interpret political and economic issues in the New England area;
represent Canadian sovereign interests on issues such as borders,
security, and trade; and provide consular services to Canadian
citizens in New England, among other functions." I certainly do
not say that the FSIA question is resolved by the fact that the
accident happened in a consulate and to a person employed by a
consulate. But I think the majority gives insufficient attention
to these facts.




                                  - 46 -
though Canada were a private employer making a discretionary,

market-based choice.14    The majority concludes that this is an

ordinary commercial omission made by an employer who "take[s] the

risk of going bare."     Thus, the majority asserts that Merlini's

claim is "in no sense 'based on' Canada's decision to compensate

her through its own national workers' compensation scheme."   In my

view, the premise is wrong, and the conclusion is wrong.

          To see why, one need only look to Canada's Government

Compensation Act ("GECA"), R.S.C. 1985, c. G-5.      That Canadian

statute not only establishes the exclusive framework for how local

consulate staff, like Merlini, receive benefits, but it also sets

forth the sole mechanism for appealing the denial of such benefits.

Accordingly, the GECA sets forth what the government of Canada has

determined, in its sovereign discretion, to be the appropriate

comprehensive workers' compensation scheme for all of its federal

employees, at home and abroad. It does not matter, as the majority

posits, that Merlini held only an administrative position:     The

GECA clearly applies to all "locally engaged" employees.   See id.

§ 7(1).




     14   Canada argues that it does provide workers' compensation
and that the chapter 152 definition of "uninsured" or
"self-insured" employer is irrelevant to its immunity, contrary to
what the majority suggests. And Merlini's complaint argues not
that the consulate was uninsured as a factual matter, but that it
"was acting as a self-insurer without obtaining a [Massachusetts]
license."


                               - 47 -
             Important here, the GECA authorizes the government of

Canada to compensate workplace injuries only through the Canadian

Consolidated     Revenue    Fund    (if    a    local    fund       exists    in    the

jurisdiction where the injury occurred), see id., or directly

through the government of Canada, see id. § 7(2).                     The Act does

not authorize any other means of compensation.                  As such, Canada,

as Merlini's employer, was prohibited by law from purchasing local

Massachusetts insurance.           Nothing under the FSIA required the

Canadian consulate to flout its own Canadian laws.                     Contrary to

the majority, this issue is not, then, one of "motivation," but of

a   sovereign    choice    by     Canada's      legislature     untethered         from

commercial     activity    (unlike,      for    example,      the    issuance      and

repayment of bonds).

             To enforce Canada's uniform compensation scheme, the

consulate     had    to   forgo    Massachusetts        workers'      compensation

insurance.      These "acts" -- of enforcing the Canadian uniform

compensation     scheme    and    of    foregoing    Massachusetts           workers'

compensation insurance -- are the same.              It is mere semantics to

disaggregate        the   two.         Following        the     Supreme       Court's

interpretations in Nelson15 and Sachs, then, Merlini's suit is

"based upon" Canada's enforcement and administration of a uniform


      15  In Nelson, discussed further in the following section,
the Supreme Court held that the suit was "based upon a sovereign
activity immune from the subject-matter jurisdiction of United
States courts under the [FSIA]." 507 U.S. at 363.


                                       - 48 -
compensation scheme, and not merely one aspect of Canada's conduct

in enforcing and administering this scheme.

                                           II.

             The    second    step    of    the    commercial     activity       inquiry

requires determining whether the conduct that the complaint is

"based upon" is commercial rather than sovereign. The FSIA defines

commercial activity as "either a regular course of commercial

conduct or a particular commercial transaction or act.                              The

commercial       character    of     an    activity    shall     be   determined      by

reference to the nature of the course of conduct or particular

transaction or act, rather than by reference to its purpose."                        28

U.S.C. § 1603(d). Thus, courts must assess "whether the particular

actions that the foreign state performs . . . are the type of

actions by which a private party engages in 'trade and traffic or

commerce.'"      Republic of Argentina v. Weltover Inc., 504 U.S. 607,

614    (1992)    (quoting     Black's      Law     Dictionary    (6th   ed.      1990)).

Weltover requires that the "full context" be considered.                         Id. at

615.

             The majority asserts that Canada's conduct cannot be

framed as a Canadian legislative directive to have and enforce its

own workers' compensation scheme because that goes to the "purpose"

of    Canada's     conduct,    and    not    its     "nature."        See   28    U.S.C.

§ 1603(d).       I disagree.       Although it can be "difficult . . . in

some cases to separate 'purpose' (i.e., the reason why the foreign


                                          - 49 -
state engages in the activity) from 'nature' (i.e., the outward

form of the conduct that the foreign state performs or agrees to

perform)," Weltover, 504 U.S. at 617 (emphasis omitted), that

distinction here supports my view.

           The "outward form of [Canada's] conduct" includes, among

other things, informing Merlini that she was subject to the GECA

(this was done before her accident and injury),16 compensating her

pursuant to the GECA's benefits scheme after she made a claim of

injury, and not continuing her benefits when Canada's Workplace

Safety and Insurance Board (WSIB) determined after a full process

that Merlini was ready to return to work.          Each of these actions

was authorized, and, indeed, compelled by the GECA.          I cannot see

how a country enacting its own law as to its employees and then

administering its own national compensation scheme under that law

as to those employed at its embassies and consulates is not, by

its   "nature,"   a   sovereign   act.     Put   another   way,   the   full

administration of this scheme is not the "justification for the

conduct by Canada on which Merlini's claim is based," it is the

relevant conduct by Canada. The majority asserts that this conduct

is "simply immaterial," and we should treat Canada, a sovereign




      16  Merlini's complaint acknowledges that "the Consulate
instructed all its American employees, including Merlini, to apply
to the Government of Canada for benefits in the event of a
workplace accident."



                                  - 50 -
state, simply as an "employer" who just "did not comply with the

state's workers' compensation requirements."            I disagree, and view

this    conduct   as   clearly    material   to     Merlini's   claim.17     The

majority,   then,      narrowly   focuses    on   Merlini's     employment   and

Canada's failure to have workers' compensation insurance under

Massachusetts state law, which I do not see as the relevant "course

of   conduct":    Canada's    sovereign,     full    administration     of   its

workers' compensation scheme.

            The majority thrice cites to a single sentence in the

House Report about "employment or engagement" of clerical staff,

as though it provides support for its conclusion.               See H. Rep. No.

94-1487, at 16 (1976), reprinted in 1976 U.S.C.C.A.N. 6604, 6615.

It does not.

            The full text of that paragraph of the report states:

            The courts would have a great deal of latitude
            in determining what is a '[commercial]
            activity' for purposes of this bill. It has
            seemed unwise to attempt an excessively
            precise definition of this term, even if that

       17 The majority also says that, "had Canada registered as
a self-insurer in compliance with chapter 152, it could have
performed each of the 'outward' actions" that I list and "Merlini
would not have had a claim that she could bring under Massachusetts
law."   That counterfactual is not relevant to the majority's
assertion that "none of these actions constitutes the 'outward
conduct' that forms the basis of Merlini's claim against the
Canadian government."    The existence of an alternative form of
compliance with a Massachusetts statute (or, put another way, a
method for a sovereign state to stave off lawsuits) does not change
the character of Canada's acts from sovereign to commercial, nor
does it mean that these acts are not the relevant conduct by Canada
underlying Merlini's claim.

                                    - 51 -
             were practicable.      Activities such as a
             foreign government's sale of a service or a
             product,   its  leasing    of  property,  its
             borrowing   of  money,    its  employment  or
             engagement of laborers, clerical staff or
             public relations or marketing agents, or its
             investment in a security of an American
             corporation, would be among those included
             within the definition.

Id.    This history does not support the majority's use of it.             This

case is not about whether Canada complied with local law when it

hired Merlini.      No such dispute is before us.        Merlini was hired;

this dispute is about workers' compensation and Canada's choice of

the workers' compensation it provides for its employees.                Nothing

in     the   legislative   history    says     that    any    dispute     about

post-employment compensation for workplace injuries is within the

exception for commercial activity.            This case is about Canada's

sovereign choice of a comprehensive workers' compensation scheme

(a scheme which did compensate Merlini).              Canada chose to cover

all people employed at its consulates, whether U.S. citizens or

nationals of other countries, under its own scheme.

             Further,   Canada's     action     is    not    the   "type     of

action[] . . . which a private party [would] engage[] in," id. at

614.    That is so because no private party can administer such a

national statutory scheme.

             My   understanding    comports    with   the    Supreme    Court's

holding and reasoning in a series of cases. In Weltover, the Court

held that Argentina's issuance of bonds known as "Bonods" was a


                                   - 52 -
commercial act, even though its purpose was to restructure the

country's debt, 504 U.S. at 609-10, because the government was

acting "not as regulator of [the] market, but in the manner of a

private player within it."     Id. at 614.     The Court looked at the

"full context," id. at 615, and pointed to the fact that private

parties   regularly   held   and   traded   such   "garden-variety   debt

instruments."   Id.

           In this case, the very opposite is true:        The Canadian

consulate's decision to comply with and enforce the workers'

compensation scheme established by the GECA is precisely "the type

of action[]" that a "regulator," not a private employer, engages

in.   Id. at 614.      To be sure, a private employer can forgo

purchasing workers' compensation insurance, but unlike Canada, it

does not and cannot do so as part and parcel of enforcing a broader

statutory scheme.

           Next, in Nelson, the Court firmly rejected the argument

that the recruitment and employment by Saudi Arabia of foreign

nationals -- which was arguably a commercial activity, and may

have led to the commission of intentional torts which injured the

plaintiffs -- satisfied the commercial activity exception.            507

U.S. at 351.    That is, the Court explicitly rejected the argument




                                   - 53 -
that no more was required than "a mere connection with, or relation

to, commercial activity."        Id. at 358.

             The    Nelson   court   emphasized    that   "a   foreign    state

engages in commercial activity for purposes of the restrictive

theory only where it acts 'in the manner of a private player

within' the market."         Id. at 360 (quoting Weltover, 504 U.S. at

614).   The Court cited several federal cases, some pre-FSIA, for

the   proposition     that   immunity   extends    "to    a   foreign   state's

'internal administrative acts.'"              Id. at 361 (quoting Victory

Transport, 336 F.2d at 360); see Herbage v. Meese, 747 F. Supp.

60, 67 (D.D.C. 1990), aff'd, 946 F.2d 1564 (D.C. Cir. 1991); see

also Heaney v. Gov't of Spain, 445 F.2d 501, 503 (2d Cir. 1971)

(reiterating immunity for legislative acts and administrative

acts); Isbrandtsen Tankers, Inc. v. President of India, 446 F.2d

1198, 1200 (2d Cir. 1971) (same).              Whether viewed as primarily

legislative    or    administrative,    Canada's     conduct    here    remains

sovereign.

             The majority opinion, in my view, is also inconsistent

with the Court's prior precedent and other circuit precedent. This

circuit and others have rejected the majority's implicit premise

that the nature of an action can be determined by an abstract

consideration of whether some aspects of the broader governmental

conduct are like those "which a private party engages in [during]

'trade and traffic or commerce.'"         Weltover, 504 U.S. at 614.        In


                                     - 54 -
my   view,    private     parties   cannot      create   governmental   workers'

compensation schemes and so Canada's actions are not like those of

private employers.         But even if there were some likenesses to a

private employer's decision to self-insure, that would not be

enough to strip Canada of its immunity under fairly settled FSIA

law.

              Several circuits have correctly found that even where

government conduct is determined to be like that in which private

parties can and do engage, the government conduct remains sovereign

when performed as part of a broader governmental program.

              I think the majority's view is in conflict with the

Second Circuit decision in Anglo-Iberia Underwriting Mgmt. v. P.T.

Jamsostek, 600 F.3d 171 (2d Cir. 2010).             There, the Second Circuit

held   that    an    Indonesian     state-owned     insurer   was   entitled    to

sovereign immunity against a negligent supervision claim because

neither Indonesia nor its state-owned insurer was engaged in a

commercial activity.          Id. at 176.          Even if the insurer were

arguably involved in a commercial activity overall, the challenged

activity (negligent supervision) was not sufficiently connected to

commerce. Id. at 179. That is, the state-owned insurer's "hiring,

supervision,        and   employment    of"     individuals    as   part   of    a




                                       - 55 -
comprehensive      national      health     insurance   program     was    not     a

commercial act.      Id. at 178.

            The    Second     Circuit's     first   holding   was     that       the

sovereign there, Indonesia, "does not sell insurance to workers or

to employers in any traditional sense and does not otherwise

compete in the marketplace like a private insurer."                  Id. at 177

(internal quotation marks omitted). Thus, it held that Indonesia's

insurance scheme does not equate to that of an independent actor

in the private marketplace of potential health insurers.                  Instead,

it determined that "the administration of Indonesia's national

health insurance program" was "sovereign in nature."                Id. at 178.

Here, Canada also does not compete in the marketplace as either

seller or buyer, nor does it offer its workers' compensation

program to private employees.

            The Second Circuit's second holding was that "even if

. . . administration        of   Indonesia's    national    health    insurance

program    and    [the   state-owned      insurer's]    employment . . . were

commercial in nature," the FSIA would not allow "abrogat[ing] a

foreign sovereign's immunity solely on the basis of an employment

relationship."      Id. at 179.       The majority attempts to distinguish

Anglo-Iberia on this second holding, saying "the claims [there]

were based on the defendants' administration of the government

programs     at     issue,"      as    it     was   "the    manner        of     the

administration . . . that was alleged to be wrongful."                It is, at


                                      - 56 -
minimum,   the   administration    by   Canada   of    its   own   workers'

compensation scheme that is at issue here, too.

           And my view is that Jungquist v. Sheikh Sultan Bin

Khalifa Al Nahyan further supports my point: The fact that actions

can be done by private actors does not mean the actions fall within

the   commercial    activity   exception   where      such   actions   were

nevertheless "uniquely sovereign in nature."          115 F.3d 1020, 1030

(D.C. Cir. 1997).        There, the two officials who saw to the

provision of the plaintiff's healthcare were "performing their

official tasks as administrators of a government [health and

welfare] program."       Id.   As here, then, the sovereign actions

involved the "administrat[ion] of a government program [for health

and welfare]."     Id.

           I also view the majority's conclusion as being at odds

with rulings by the Ninth Circuit and D.C. Circuit.           In Gregorian

v. Izvestia, the Ninth Circuit held that the Soviet Union was

entitled to sovereign immunity against a libel claim regarding a

state-controlled newspaper.     871 F.2d 1515, 1522 (9th Cir. 1989).

That the newspaper was sold and distributed in the United States

did not render commercial the nature of its publication and

distribution, as the "writing and publishing of articles reporting

or commenting on events" remained governmental because the paper

was state-owned and operated. Id. The D.C. Circuit held similarly

that Peru was entitled to sovereign immunity for remodeling and


                                  - 57 -
operating a building as a chancery allegedly in violation of local

District of Columbia zoning laws, because the operation of a

chancery was "by its nature governmental." MacArthur Area Citizens

Ass'n v. Republic of Peru, 809 F.2d 918, 920 (D.C. Cir. 1987)

(citation omitted).

             In my view, it is incorrect to say that Merlini's claim

is "no different from the claims that other employees have brought

against private businesses that . . . have not insured themselves"

under Massachusetts law.           It is analytically incorrect, partly

because     the     broader     context   must   matter   as   to   statutory

interpretation and application of the FSIA.                If that broader

context did not matter, almost any governmental act could be

disaggregated and framed as commercial conduct that a private party

can perform.

             Since what Canada has done here is a governmental act by

its very nature, the majority cannot rely on Rush-Presbyterian-

St. Luke's Med. Ctr. v. Hellenic Republic, 877 F.2d 574 (7th Cir.

1989), even if the case (whether rightly or wrongly decided) bears

some initial resemblance.         There, the Greek government was alleged

to be in breach of a contract to reimburse physicians and an organ

bank   in   Chicago     for   performing    kidney   transplants    on   Greek

nationals.        Id. at 575.     The Seventh Circuit held that Greece's

execution of the contract constituted "commercial activity," even

though it was done to fulfill the government's constitutional goal


                                     - 58 -
of caring for the health of Greek citizens, because "nothing about

the provision of and payment for health services . . . is uniquely

governmental."   Id. at 581.

          Not so here.     Canada's conduct, its enactment of a

comprehensive workers' compensation scheme and decision not to

award extended benefits, is the conduct at issue, and it is

"uniquely governmental."   Id.    It is one thing for a government to

engage in a private, commercial act (such as executing a contract)

in order to fulfill a general governmental purpose (such as

providing healthcare to its citizens).18     It is quite another for

a government to act in a manner strictly and precisely compelled

by its own law to maintain the uniformity of its own federal

workers' compensation program.     This distinction is important.




     18   The Seventh Circuit in Rush-Presbyterian stated that
"[u]nder the Greek constitution, the government has a broad
obligation to provide health care services to Greek citizens."
877 F.2d at 575. The Greek constitution does establish that "the
State shall care for the health of citizens and shall adopt special
measures for the protection of youth, old age, disability and for
the relief of the needy." 2001 Syntagma [Syn.][Constitution] 21
(Greece) (trans). This language seems closer to stating a general
sovereign purpose -- caring for health of citizens -- than a direct
and precise mandate such as at issue in the GECA.
          In furthering this general constitutional goal, the
Greek government maintains a wide range of possible options. And
indeed, the Greek government has changed the precise cost and
provision of healthcare numerous times since Rush-Presbyterian was
decided, including, for example, eliminating health insurance for
those who had been unemployed for more than two years as part of
austerity measures. See Lucy Rodgers & Nassos Stylianou, How bad
are things for the people of Greece, BBC News (July 16, 2015),
http://www.bbc.com/news/world-europe-33507802.


                                 - 59 -
             I return to my sense of the foreign policy repercussions

of the majority's view. The U.S. has undertaken the same sovereign

exercise abroad as to providing workers' compensation for U.S.

embassy and consulate employees as has Canada. For over a century,

the U.S. has had a workers' compensation scheme for federal workers

under the Federal Employees' Compensation Act ("FECA"), 5 U.S.C.

§ 8101   et    seq.      FECA    expressly     covers   "noncitizens     and

nonresidents" who are employees of the United States, such as

employees at U.S. embassies and consulates abroad. See id. § 8137.

The State Department tells us that "many foreign nationals employed

by U.S. embassies and consulates — including Canadian citizens

employed by the United States in Canada — are currently entitled

to workers' compensation benefits in virtue of United States law,

not local law."     Like the GECA, U.S. law mandates that noncitizen,

nonresident federal workers employed abroad are subject to federal

U.S. workers' compensation law and procedures.                See id.     In

addition to this statutory command, State Department regulations

establish a "special schedule" for the compensation of such embassy

and consulate workers, except in narrow circumstances.             20 C.F.R.

§ 25.2(b).

             To say, then, that Canada is acting in a "commercial"

manner when it imposes its own workers' compensation scheme would

lead to the conclusion that our government's like actions as to

employees     of   embassies    and    consulates   abroad   are   similarly


                                      - 60 -
commercial, not sovereign.       That, in my view, cannot be right.        A

decision    that   Canada's   actions   are   merely    commercial      risks

providing cover for other countries to ignore sovereign actions

taken by the U.S. and allow liability against the U.S. government

concerning workers' compensation under local laws.              Indeed, the

State   Department's    filing    expresses   concern    with     the   U.S.

"fac[ing] increased exposure in similar claims abroad."             I think

it highly unlikely that Congress intended such a result in drafting

the FSIA.    The effect of the majority's holding is to abrogate

Canada's immunity from suit and force it to face a claim that

Massachusetts can require Canada to get local insurance when Canada

has made a sovereign decision to provide insurance itself through

a comprehensive scheme.

            Further, Merlini cannot escape from the fact that she is

challenging Canada's imposition of its own compensation scheme in

lieu of purchasing Massachusetts workers' compensation insurance.

The majority finds little significance in the fact that Canada

provided Merlini with compensation through Canada's own workers'

compensation system.      Pursuant to the GECA, Merlini received

compensation, in the form of full payment of her salary, from March

until October 2009.       At that point, the WSIB determined that

Merlini was able to return to work and terminated her benefits.

Merlini chose not to appeal, which was open to her, and instead




                                  - 61 -
began a decade-long legal battle in the U.S. to obtain additional

benefits from Massachusetts and from Canada.

            Finally, the majority also "emphasize[s]" throughout

that Merlini is an American citizen, and states that it reaches

its conclusion because of that fact.               But that cannot limit the

reach of its opinion in any way.                 The Massachusetts insurance

statute, by its terms, applies to workers of all nationalities

employed locally, not just U.S. citizens.               So, by that logic, even

the   consulate's     Canadian   employees       are     subject    to   the   state

statute.    The majority's attempt to cabin its opinion by stressing

that Merlini is an American citizen does not work for yet another

reason.    The majority's attempted distinction based on citizenship

of Canada's consular employees creates incentives to discourage

Canada from employing Americans in its consulate, and imposes on

Canada the costs and paperwork of administering different workers'

compensation    systems.         In     turn,     the    majority's      attempted

distinction    would    discourage      American        embassies    abroad    from

employing     local    foreign        citizens     due     to      post-employment

application of local workers' compensation law.                 But the choice to

employ such citizens and the mix of the nationalities of employees

at such consulates and embassies are sovereign choices.

            If the majority thinks, as it says it does, that its

result here, a denial of sovereign immunity, can be limited to

low-level, "purely clerical" workers, I think that is mistaken.


                                      - 62 -
The logic of its analysis leaves no room for that.    Further, there

is no support in the text of the statute or the Supreme Court

caselaw for such a distinction. The same is true for any attempted

limitation based on Merlini's American citizenship.

           The purpose of sovereign immunity is to leave sovereign

issues to the sovereigns, not to the courts.         I respectfully

dissent.




                              - 63 -
