McKesson Corp. v. Islamic Republic of Iran
400 U.S. App. D.C. 1
D.C. Cir.2012Background
- McKesson alleges Iran expropriated its Pak Dairy equity and withheld dividends after the 1979 revolution.
- District court proceedings spanned decades, with multiple remands on jurisdiction and liability issues under FSIA.
- Tribunal Award in 1986 partially compensated McKesson for withheld dividends, paid under the Algiers Accords.
- This Court has repeatedly held FSIA jurisdiction under the commercial activities exception but left open act of state questions.
- The district court ultimately held treaty-based Iranian-law liability under the Treaty of Amity for expropriation and withheld dividends, awarding damages.
- This court now resolves whether act of state, treaty-based Iranian-law liability, and damages scheme are correct and ends with remand for simple-interest-based damages calculation.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does act of state apply to bar claim? | McKesson | Iran | Act of state does not preclude. |
| Does Treaty of Amity provide a private right of action in U.S. courts? | McKesson | Iran | Treaty provides action under Iranian law; suit may proceed in U.S. courts. |
| Does customary international law provide a private right of action here? | McKesson | Iran | No private action under CIL via FSIA. |
| Is Iran liable for expropriation under Iranian law as interpreted by treaty? | McKesson | Iran | Iran liable; attribution and come-to-the-company disputes resolved in McKesson's favor. |
| What is the proper form of interest for damages? | McKesson | Iran | Compound interest reversed; simple interest remanded. |
Key Cases Cited
- Banco Nacional de Cuba v. Sabbatino, 376 U.S. 398 (1964) (act of state doctrine framework)
- First National City Bank v. Banco Para El Comercio, 462 U.S. 611 (1983) (FSIA limitations on liability)
- Sabbatino cited with respect to act of state principles, 376 U.S. 398 (1964) (principles of deference to sovereign acts)
- Sosa v. Alvarez-Machain, 542 U.S. 692 (2004) (limits on private rights from customary international law)
- McKesson Corp. v. Islamic Republic of Iran, 539 F.3d 485, 539 F.3d 485 (D.C. Cir. 2008) (treaty does not provide implied private action under U.S. law)
- McKesson Corp. v. Islamic Republic of Iran, 271 F.3d 1101, 271 F.3d 1101 (D.C. Cir. 2001) (treatment of treaty and liability issues)