AUREUS ASSET MANAGERS, LTD. v. United States
1:14-cv-00703
Fed. Cl.May 26, 2015Background
- In 1985 EgyptAir Flight 648 was hijacked; the attack was later attributed to Libya sponsoring the Abu Nidal Organization and the aircraft hull was destroyed. Plaintiffs (Aureus and Riverstone), UK corporations and subrogated insurers, paid insured losses for the hull.
- Plaintiffs sued Libya in U.S. district court after FSIA amendments (lifting Libya’s immunity); in 2008 Congress enacted the Libyan Claims Resolution Act (LCRA) and the U.S. entered a Claims Settlement Agreement with Libya, terminating pending suits and espousing claims of U.S. nationals to the FCSC.
- The Executive Order and settlement created a compensation mechanism for U.S. nationals only; foreign nationals (including these plaintiffs) were excluded and their district-court suits against Libya were dismissed.
- Plaintiffs filed in the Court of Federal Claims alleging the United States effected a Fifth Amendment taking by extinguishing their causes of action against Libya without providing compensation.
- The Government moved to dismiss under Rule 12(b)(6) arguing plaintiffs lack a cognizable Fifth Amendment property interest in their claims (or, alternatively, the matter is a non-justiciable political question). The court denied the motion.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether plaintiffs had a cognizable Fifth Amendment property interest in their causes of action against Libya | Causes of action (including unfiled ones) protecting legally recognized property interests (insurance/subrogation rights, loss of aircraft hull) are property | Causes of action, especially pre-judgment or statutory entitlements, are not vested property rights for Takings Clause purposes | Court: Plaintiffs plausibly alleged a property interest in their legal claims protecting insured property and subrogation rights and survived dismissal |
| Whether the U.S. ‘‘took’’ that property by entering the Claims Settlement Agreement and excluding plaintiffs from compensation | U.S. extinguished plaintiffs’ claims and provided no alternative recovery for foreign nationals — this can constitute a taking | President’s settlement and foreign-relations decisions are political acts, not subject to judicial review; no compensable taking | Court: Plaintiffs pleaded facts sufficient to allege a taking at the motion-to-dismiss stage (Penn Central analysis premature) |
| Justiciability / political question | Plaintiffs challenge compensation (takings) not the President’s foreign-relations discretion; seeking money damages is judicially manageable | Settlements and espousal of foreign claims implicate core foreign-affairs powers and are non-justiciable | Court: Claim is justiciable — it challenges the absence of compensation, not the President’s authority to settle, so dismissal on political-question grounds denied |
| Court’s jurisdiction under the Tucker Act to hear a Fifth Amendment claim by foreign nationals | Takings Clause is money-mandating; foreign nationals can assert Fifth Amendment takings claims in the Court of Federal Claims | (Implicit) jurisdiction not proper if no money-mandating source or non-justiciable political issue | Court: Tucker Act jurisdiction exists; Fifth Amendment is money-mandating and applies to foreign nationals |
Key Cases Cited
- Alliance of Descendants of Texas Land Grants v. United States, 37 F.3d 1478 (Fed. Cir. 1994) (legal causes of action can be property for Takings Clause purposes)
- Abrahim-Youri v. United States, 139 F.3d 1462 (Fed. Cir. 1997) (claims espoused/settled by the government can be treated as extinguished property interests)
- Shanghai Power Co. v. United States, 765 F.2d 159 (Fed. Cir. 1985) (unfiled or nascent claims may be property; valuation depends on stage/forum)
- Adams v. United States, 391 F.3d 1212 (Fed. Cir. 2004) (distinguishes statutory entitlements from Takings Clause property; causes of action protect legally recognized property interests to qualify)
- Penn Central Transp. Co. v. New York, 438 U.S. 104 (1978) (multi-factor test for regulatory takings analysis)
- Cities Services Co. v. McGrath, 342 U.S. 330 (1952) (authority recognizing intangible rights as property)