2007_04_unbldgdetail.jpgWhen we hear about the city's scuffles with foreign countries, it usually involves diplomats and scofflaw parking. Well, this time, the scuffle does involve diplomats, but now the city will be arguing why foreign countries should pay real estate taxes in front of the Supreme Court. The NY Sun sheds light on the city's case versus the Department of Justice: The city wants India and Mongolia to pay millions in real estate taxes because their missions are not "used exclusively for diplomatic purposes or to house top diplomats" - lower level employees live there.

The Justice Department is arguing that the city should back off because India and Mongolia could hinder the U.S.'s ability to "buy, sell and construct diplomatic properties." Wait, it gets even more complicated:

The legal question at the heart of the case is whether a federal law, the Foreign Sovereign Immunities Act, gives countries immunity from New York City's suit

The legal question at the heart of the case is whether a federal law, the Foreign Sovereign Immunities Act, gives countries immunity from New York City's suit. The law contains an exemption for disputes over immovable property.

In its brief, New York argues that the liens it has on both buildings for unpaid taxes are enough to trigger that exemption. India and Mongolia say the exemption was intended for questions over disputed ownership of the property. In their brief, the two countries compare the city's suit with a hypothetical "dispute over the Mission's obligation to pay a merchant for selling it a rug." Both the city and the rug merchant may have claims against the Mission, the countries argue, but neither of the claims amounts to a dispute over property.

Last year, the 2nd U.S. Circuit Court of Appeals said that the case can proceed (here's the PDF for a press release about the City of New York v. Permanent Mission of India et al.) because "When owning property abroad, a foreign state must follow all the same laws that pertain to private owners of such property," but the Sun reports the Supreme Court may be tempted to take the case because a 1985 Philadelphia court decision differs from that ruling.

Maybe the city can argue about other countries paying up parking tickets while the lawyers are in front of the Supreme Court anyway.

Photograph of United Nations' Secretariat building windows by webchango on Flickr