Aviation & General Insurance Company, Ltd. v. United States
127 Fed. Cl. 316
Fed. Cl.2016Background
- Libyan-sponsored terrorist attacks on EgyptAir Flight 648 (1985) and Pan Am Flight 103 (1988) caused insurers (Plaintiffs) to pay ~ $64 million to insureds; most plaintiffs are foreign corporations.
- Plaintiffs filed suits in U.S. district court after Libya was designated a state sponsor of terrorism and the FSIA terrorism exception applied briefly (2008).
- Congress enacted the Libyan Claims Resolution Act and a Claims Settlement Agreement in 2008, restoring Libya’s sovereign immunity in exchange for $1.5 billion to compensate specified victims.
- President Bush issued Executive Order 13477 directing termination of pending suits related to Libyan-sponsored terrorism and directing referral of U.S. nationals’ claims to the Foreign Claims Settlement Commission (FCSC); the Executive Order did not direct referral of foreign claimants’ claims.
- Several plaintiffs sought relief from the FCSC; the Commission dismissed their claims for lack of jurisdiction, leaving plaintiffs without a forum and prompting this Fifth Amendment takings suit in the Court of Federal Claims.
- The Court assumed plaintiffs held a property interest in their causes of action but granted the Government’s summary judgment motion, concluding no compensable taking under Penn Central factors.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether extinguishment of plaintiffs’ suits by Executive Order and settlement statute constitutes a Fifth Amendment taking of plaintiffs’ causes of action | Plaintiffs: had a vested, investment-backed expectation to sue Libya after the FSIA terrorism exception applied; extinguishment without compensation is a taking | Gov: restoration of sovereign immunity and referral to claims process was foreseeable foreign-affairs conduct; no novel interference with expectations; no constitutional duty to act as collection agent | Held: No taking — plaintiffs’ expectations were not protected; government action was a foreseeable exercise of foreign-relations power |
| Whether plaintiffs were deprived of investment-backed expectations | Plaintiffs: reasonably expected to press and recover claims against Libya | Gov: international commerce actors accept risk of changes in sovereign immunity and executive settlements; presidential settlement power is longstanding | Held: Plaintiffs’ expectations were not reasonable/protected; diminished call for compensation |
| Whether Government had to provide an alternative forum or compensation when FCSC declined jurisdiction over foreign claimants | Plaintiffs: Executive Order’s referral scheme effectively extinguished claims without an alternative forum | Gov: Government not constitutionally required to collect or secure judgments; FCSC decisions final and not reviewable | Held: Lack of alternative forum alone does not establish a taking; Court lacks jurisdiction to review FCSC jurisdictional decision |
| Whether plaintiffs’ damages were sufficiently definite and non-speculative | Plaintiffs: could have obtained and collected judgment against Libya | Gov: collection prospects were speculative; enforcement of FSIA terrorism judgments has practical/legal obstacles | Held: Economic impact/value of plaintiffs’ lost causes of action speculative; not a compensable taking |
Key Cases Cited
- Armstrong v. United States, 364 U.S. 40 (1960) (takings clause prevents some individuals from bearing public burdens alone)
- Penn Central Transp. Co. v. New York City, 438 U.S. 104 (1978) (three-factor regulatory takings test)
- Dames & Moore v. Regan, 453 U.S. 654 (1981) (presidential power to settle international claims)
- United States v. Pink, 315 U.S. 203 (1942) (executive action to eliminate sources of international friction)
- Republic of Iraq v. Beaty, 556 U.S. 848 (2009) (foreign sovereign immunity and reliance expectations)
- Republic of Austria v. Altmann, 541 U.S. 677 (2004) (foreign sovereign immunity context)
- Abrahim-Youri v. United States, 139 F.3d 1462 (Fed. Cir. 1998) (takings in international claims/espousal context)
- Belk v. United States, 858 F.2d 706 (Fed. Cir. 1988) (economic impact and takings analysis)
- Shanghai Power Co. v. United States, 4 Cl. Ct. 237 (1984) (no constitutional obligation to act as creditor/collection agent in foreign-relations settlements)
- Sperry v. United States, 493 U.S. 52 (1989) (speculation about enforceability of foreign-claims judgments affects remedy expectations)