#11153 - Act Of State Doctrine - International Law I

Act of State Doctrine (ON THE MERITS)

1. If the act of state doctrine applies, we don't address the interesting question of whether or not the foreign law at issue or the act by the foreign state is a violation of international law. Banco Nacional De Cuba v. Sabbatino

   1. Sabbatino provided that "[t]he judicial branch will not examine the validity of a taking of a taking of property within its own territory by a foreign sovereign government, extant and recognized by this country at the time of suit, in the absence of a treaty or other unambiguous agreement regarding controlling legal principles, even if the complaint alleges that the taking violates customary international law."

   2. BUT Hickenlooper 2

      1. "Notwithstanding any other provision of law, no court in the United States shall decline on the ground of the federal act of state doctrine to make a determination on the merits giving effect to the principles of international law in a case in which a claim of title or other right to property is asserted by any party including a foreign state (or a party claiming through such state) based upon (or traced through) a confiscation or other taking after January 1, 1959, by an act of that state in violation of the principles of international law, including the principles of compensation and the other standards set out in this subsection: Provided, That this subparagraph shall not be applicable (1) in any case in which an act of a foreign state is not contrary to international law or with respect to a claim of title or other right acquired pursuant to an irrevocable letter of credit of not more than 180 days duration issued in good faith prior to the time of confiscation or other taking, or (2) in any case with respect to which the President determines the application of the act of state doctrine is required in that particular case by the foreign policy interests of the United States and a suggestion to this effect is filed on his behalf in that case with the court."

         • Substantive Law

           • Expropriation of Property

             • Under customary international law, property owned and expropriated is a violation of international law UNLESS

               • (1) there was a public purpose;

                 • Akin to eminent domain in Con Law BUT an issue where transferred to a private entity (could it be a public purpose where jobs are being created)

               • (2) expropriation was nondiscriminatory; AND

                 • Where targeted against a specific country would be a violation of international law

               • (3) prompt, adequate, and effective compensation

                 • Prompt: Whether there were remedies available in the foreign country (could not rise to level of violation where there was still available in foreign country)

                 • (1) The existence of possible remedy in foreign country

                 • (2) The amount of time it takes to gain remedy (litigation process)

                 • Adequate:

                 • Compensation would include value of property

                 • Some argument by nations that it should also include future profits

                 • Specific performance is not available

                 • Effective

                 • Currency

                 • BUT what about weak currencies?

                 • BUT what about exchange for bonds?

   3. BUT "Bernstein exception"?

      1. This exception may apply where there is a letter from the United States Department of State advising a court that foreign relations considerations do not necessitate an application of the act of state doctrine.

         • BUT, only a plurality (three justices) of the Supreme Court in Citibank affirmed the existence of such an exception; thus, it is of doubtful precedential value.

           • Indeed, the court in Kalamazoo Spice Extraction Co. v. Ethiopia noted that "it appears that the Bernstein exception may have doubtful utility since a majority of the Court did not approve its use."

   4. BUT "Commercial act exception"?

      1. This exception may apply where the act of state was commercial rather than public in nature and would operate such that where the act was commercial in nature the act of state doctrine would not apply and the state would not be entitled to immunity.

         • BUT, only a plurality (four...