*1 SABBATINO, NACIONAL BANCO CUBA de RECEIVER, et al. Argued 22-23,
No. 16. October 1963. Decided March 1964. *2 Rabinowitz argued Victor petitioner. cause for B. Boudin. was Leonard him the With on briefs and filed argued the cause Dickerman Williams C. Whitlock & Co. respondent Farr, briefs for Katzenbach, Attorney by special General leave Deputy United argued States, the cause Court, him curiae, With on the brief urging amicus reversal. C. Cox, Hollander, John General Morton were Solicitor Eldridge F. and Andreas Lowenfeld. Dixon a brief for Pan-American Life
James A. filed urging Insurance as amicus reversal. Co., curiae, Whitney Seymour argued North cause for Com- Vertientes-Camaguey pañía Cuba, Azucarera de as amicus curiae, him urging affirmance. With on brief were Birkett, Eastman John A. Guzzetta and Thomas W. *3 Cashel. curiae,
Briefs of amici urging by were filed affirmance, Rhyne, Rodgers, Charles S. Churchill Chopnick, Max Benjamin Busch, R. Nicholas Doman and Leo M. Drachsler for Bar Association; by the American Pieter J. Kooiman, Myres McDougal S. and Cecil for J. Olmstead the Executive Committee of the American Branch of the Brownell, International Law Association; by Herbert James M. Edwards and Jack P. for the Commit- Jefferies tee on International Law of the Association of the Bar of City York; O’Brian, New John Lord John G. Laylin, Brice Clagett M. Ky Ewing, P. Jr. for North American Sugar Industries, Inc., et al.
Mr. Justice Harlan delivered opinion of the Court. question brought this case and is now here,
found to be dispositive issue, is whether the so-called act of state doctrine petitioner’s serves sustain claims litigation. this Such claims ultimately are founded on a decree of the Government of Cuba expropriating certain is here of which proceeds right property, in its traditional doctrine The act of state controversy. from country this courts of precludes formulation recog- acts a validity public of the into the inquiring within own its sovereign power committed nized territory.
I. Whit- respondent July Farr, February 1960, In contracted commodity American Co., broker, lock & from a alongside steamer, free purchase sugar, Cuban Compania Azucarera Ver- subsidiary of wholly owned corporation (C. V.), A. tientes-Camaguey de Cuba capital stock was law whose organized under Cuban Farr, residents. by United States principally owned upon York pay sugar for the agreed New Whitlock sight and a shipping documents draft. presentation States July Congress of the United On Sugar permit presidentially amended the Act of 1948 to sugar quota reduction of the for Cuba.1 On directed granted exercised the day the same President Eisenhower day congressional enactment, power.2 The 851,” of Ministers “Law No. adopted Cuban Council sugar which characterized reduction in the Cuban on quota political purposes” an act of “aggression, taking part‘of justifying the United States, gave the Cuban countermeasures Cuba. The *4 discretionary power and Prime Minister to President by expropriation property nationalize forced or enter- Al- prises in which American nationals had an interest.3 1 74 Stat. 330. publication upon c72, Proclamation No. 74 Stat. effective July 8, Reg. Register, 6414. the Federal Fed. 3 “Whereas, by government the attitude assumed and Legislative America, which Power of the United States of North against aggression, political purposes, basic constitutes an for recently economy, of the Cuban evidenced the Amend interests Sugar just Congress ment to the Act enacted the United States at formally though system compensation provided, was payment may under well deemed possibility be illusory.4 Department Our State has described the “manifestly principles law as in violation of those Cuban request whereby country, excep- of the Chief Executive of that powers upon tional are conferred the President of the United States participation sugars sugar to reduce of Cuban the American political against Cuba, market as a threat of action forces the Revolu- tionary adopt, hesitation, Government to without all and whatever may appropriate measures it deem or desirable the due for defense sovereignty protection develop- of the national and of our economic process. ment advisable, it is view with a to the ends referred to in “Whereas, upon Law, first Whereas of this to confer the President and Republic authority carry
Prime Minister of the full out the na- enterprises by physical tionalization of the and owned and corporate persons who are nationals of the United States of North America, enterprises majority participa- which have interest or though they organized tions in enterprises, such even be under the laws, required adopted Cuban so that the measures be in future pursued. cases with a view to the ends “Now, pursuance powers In it, vested in therefore: promulgate Council of Ministers resolved has to enact and following
“Law No. 851 authority hereby upon Full 1. conferred the President “Article Republic that, and the Prime acting jointly Minister of the in order through appropriate they resolutions whenever shall deem it ad- protection visable or desirable interests, they for the of the national may proceed nationalize, through expropriations, prop- forced enterprises by physical corporate persons erties or owned who are nationals of the America, United States of North or of the enterprises physical corporate persons which such have an though they interest, organized even be under the Cuban laws.” Record, at 98-99. id., Payment See expropriated property Articles 4-7. would years consist of bonds with terms of bearing at least 30 2% annual interest. The year interest was not to be cumulative from year paid only and was yearly foreign out of 25%
403 by long accepted been which have of international discrimi- in its essence It is of the West. free countries 5 confiscatory.” arbitrary natory, cov- sugar 1960, the August 9, August 6 Between and C. V.6 Whitlock A. Farr, between the contract by ered Hornfels, S. for onto the S. Morocco, was destined loaded, of Jucaro' port standing offshore at the Cuban was commenced, day loading Maria). (Santa On acting pursuant and Prime Minister, Cuban President Power Resolution No. 1. issued Executive Law No. 851, prop- all expropriation of compulsory for provided It arising rights and of and interests erty and enterprises, including V., listed C. A. companies, of certain therefrom, nationals. by owned American The wholly principally American alleged injustice preamble reiterated the sugar quota emphasized of the Cuban reduction serving as an for other example of Cuba’s importance struggle “in to free themselves countries^to follow their 7 Imperialism.” consequence from brutal claws of In exchange sugar sales of to the States received Cuban United 3,000,000 Spanish long price tons at a minimum of 5.75 excess of English pound. (In preceding years per 10 the annual cents years average price high only had never been that and in one of those many Spanish long sold, 3,000,000 2d, tons been F. at had as as 307 862.) only upon authority The bonds were to be amortized Bank. The President and Prime Min- the President of the National empowered appraisers. ister of the Cuban state were to choose the paid maturity the bonds were to be at if funds It is not clear whether were insufficient at that time. July (to Ministry Dept. See State Note No. Cuban Foreign Relations). wholly parties owned sub have treated the interest of sidiary V.; if it were identical with that of C. A. hence no distinc companies will be in the remainder of tion between the two drawn opinion. 7 “Whereas, assumed the attitude Government and Legislative America, Power of the United States of North of con aggression, political purposes, against tinued the basic interests *6 of the the consent of resolution, the Cuban Government was necessary ship carrying sugar before a of a named company could leave Cuban In waters. order to obtain this consent, Farr, Whitlock, August on into entered contracts, identical to those it V., had made with C. A. economy, by the Cuban as evidenced the amendment to the Sugar adopted by Congress Act country, whereby excep- said powers upon tional were conferred the President of said nation to participation reduce sugars sugar of Cuban in the market of country, weapon political said against Cuba, action was justification considered as the fundamental of said law. the Chief Executive of the Government of the United
“Whereas, America, making States of North exceptional use of powers, said and assuming political an obvious attitude aggression of economic and against country, our participation has sugars reduced the of Cuban in the North unquestionable American market design with the to revolutionary attack process. Cuba and its this action constitutes a reiteration of the continued “Whereas, government conduct of the of the America, United States of North prevent intended to sovereignty integral exercise of its and its development by people thereby serving our the base interests of the trusts, North American which growth have hindered the of our economy political a*ndthe consolidation of our freedom. “Whereas, developments the face of such undersigned, being fully great conscious of their responsibility legitimate historical and in economy defense of the duty national adopt are bound to the meas- necessary ures deemed by aggression counteract the harm done upon inflicted our nation. duty peoples it is the of the “Whereas, of Latin America to strive recovery for of their wresting native wealth it from the hands foreign monopolies prevent and interests which develop- their ment, promote political interference, impair sovereignty underdeveloped countries of America. “Whereas, stop Cuban Revolution will not until it shall have totally definitely liberated its fatherland. “Whereas, Cuba must be a stimulating example luminous and the sister nations of underdeveloped America all the countries struggle the world to follow in their to free themselves from the Imperialism. brutal claws of p. [Footnote continued on IfiS\ with the Banco Para el Comercio Exterior an Cuba, de instrumentality of the Cuban Government. The S. S. sailed for Morocco on August 12. Hornfels Banco assigned Exterior lading peti- the bills of also instrumentality tioner, the Cuban Government, agent instructed its in New York, Generate, Societe sight deliver the bills and a draft in the sum of $175,250.69 Farr, Whitlock in return for payment. Societe Generale’s initial tender the documents was re- fused Whitlock, which on Farr, day noti- same was fied of C. V.’s claim rightful that as sugar A. owner of the *7 it was entitled to proceeds. the In return promise for a to turn the funds over to petitioner or its agent, C. agreed A. V. to indemnify Farr, Whitlock for any loss.8 Farr, Whitlock subsequently accepted the shipping docu- negotiated ments, the bills of lading to its customer, and “Now, pursuance In powers us, therefore: vested in provisions accordance with the 851, July 6, Law No. we hereby,
“Resolve: “First. To order the nationalization, through compulsory expro- priation, and, therefore, adjudication simple in fee to the Cuban State, of all property enterprises located in the national territory, rights and the resulting and interests exploitation from the of such enterprises, juridical owned persons who are nationals of the United States of North America, operators enterprises in which country nationals of said predom- have a inating interest, below, as listed to wit: Compañá
“22. Camagüey Azucarera Vertientes de Cuba. Consequently, hereby subrogated the Cuban State is “Second. place juridical persons and stead of preceding listed in the section, respect property, rights of the aforesaid, and interests constituting capital of the assets and liabilities enterprises.” of said Record, at 102-105. agreed pay Farr, A. $175,000 C. V. also to Whitlock 10% 2d, if C. A. ever V. obtained that sum. 307 F. at 851. to however, sugar. refused, It payment
received Shortly Generale. Societe proceeds hand over an order with was served Whitlock thereafter, Farr, appointed had Supreme Court, York the New York New of A. V.’s Temporary Receiver Sabbatino as C. regard action in taking any it from assets, enjoining might result in its money claimed A. V. C. Whitlock, Following Farr, this, removal from the State. to Sab- the funds order, transferred pursuant court determination as judicial abide the event of batino, to ownership. to their in the Federal then this action
Petitioner instituted York. District of District Court for Southern New sought Alleging lading, conversion the bills and to proceeds Farr, from Whitlock recover the thereof exercising any from dominion over enjoin the receiver to dismiss and for sum- proceeds. Upon such motions Supp. 193 F. mary Court, the District judgment, despite personam jurisdiction sustained federal sugar control of found that was the funds. It territory expro- located within Cuban at the time priation and that under merchant law com- determined mon to Farr, civilized Whitlock could not countries *8 ownership sugar against have asserted A.C. V. making payment. before It concluded had that C. Y.A. a in sugar subject interest the territorial the jurisdiction of Cuba. court dealt The then with the question of title to on Cuba’s which rested sugar, petitioner’s claim of conversion. acknowledging While continuing vitality of the act of state doctrine, inapplicable court believed it questioned when act is in violation of international Proceeding on law- the basis a taking invalid under international convey good does not title, the District Court found the expropriation Cuban decree to such violate law in three separate respects: by retaliatory it was motivated against American public purpose; not it discriminated nationals; provide and it adequate compensa- failed Summary judgment against petitioner tion. was accord- ingly granted. affirming 2d Appeals, Court F. (not on
decision similar on two grounds, relied letters Court) by before the District Department written State officers it took as evidence that the Executive had objection testing Branch no a judicial of the Cuban validity. unwilling decree’s The court was to declare that any one of infirmities found District Court taking rendered the invalid under international but law, was satisfied that they combination had that effect. granted We certiorari because the issues involved bear importantly on the rela- country’s foreign conduct tions particularly on proper more role of Judi- cial Branch in this sensitive area. 372 S. For U. 905. reasons follow we judgment decide that the below must be reversed.
Subsequent to the decision of the of Appeals, Court the C. A. receivership Y. was terminated the State Supreme Court; the funds in question placed were pending the escrow, outcome of this suit. C. A. hasV. moved Court to this be substituted a party as in the place Although of Sabbatino. it true that Sabbatino’s litigation defensive interest if has largely, reflected that of entirely, C. A. this is true V., Farr, also of position. Whitlock’s There is no indication that Farr, Whitlock has not adequately represented C. A. V.’s inter- est or that will not do continue to so. Moreover, inso- far disposition as case here is A. concerned, C. V. permitted has been as amicus argue to brief and posi- its tion before this Court. In these circumstances we are not persuaded admission of C. A. party V. *9 either that any claim stage safeguard
necessary at this present it already presented it has we are con- Accordingly, litigation. course of this future admitted as A. motion to be deny V.’s strained to C. of such the renewal however to prejudice without party,9 A. V.’s appears if that C. lower courts a motion Farr, Whit- represented by adequately interests are not dis- will not a motion granting such lock and that Curtiss, 3 Strawbridge v. Cf. jurisdiction. federal turb Bank, 314 U. S. Nat’l Indianapolis v. Chase 267; Cranch Edelstein, at 638. 30 F. 2d Ex 69; parte at respect holding below with considering the Before with narrower we must deal doctrine, the act for a judg- action or of the grounds urged dismissal respondents. in favor ment on the merits II. an instrumen- petitioner, this
It first contended that denied access should be tality Government, of the Cuban unfriendly power courts because Cuba is to American country of this to obtain permit nationals does not did though respondents Even relief in its courts. we think it should point this lower courts not raise country If should the courts of this be considered here. government foreign state, of a the under- be closed policy transcending one of national lying reason is and this parties action, Court interests give policy sponte effect to that sua even at this should litigation. stage of the comity governing country’s this principles
Under sovereign relations with other are allowed states nations, position Court, Because of C. A. V.’s amicus in this and because presented separately arguments Farr, its have been from those of Whitlock, though adopted contentions, even each has the other’s opinion “respondents” although Farr, only refers to Whitlock is the party-respondent. formal
409 The Sapphire, of States, to sue the the United courts States, Guaranty Trust v. United 11 Co. 164, 167; Wall. “comity” 304 S. This U. 134. Court has called 126, legal the sense “neither matter of absolute obligation, good on of courtesy will, upon the one nor mere hand, Guyot, the other.” Hilton v. S. 163-164. 113, 159 U. Although comity is often associated with the existence e. of g., Bank of friendly relations between states, Augusta Earle, Russian Republic v. v. 13 Pet. 519, 589; Cibrario, 258, prior 235 N. 139 255, 259, 260, Y. N. E. some recent lower court questioned cases which have the right of instrumentalities sue Cuban Government in our courts,10 only privilege suit has been denied governments Ex Don with parte States, at war United Colonna, Ascanio 314 7 of 510; Trading U. S. see § with Enemy Act, 40 50 416, App. Stat. U. S. C. 417, Hanger Abbott, 532; Caperton 7; § cf. v. 6 Wall. v. Bowyer, 14 216, recognized by or to not Wall. those 236, Penza, The Republic Russian country, this 277 91; v. F. Cibrario, supra.11
10
Corp.
In P
E Shipping
&
v. Banco
El Comercio
Para
Exterior
Cuba,
(C.
de
Cir.),
sponte ques
Respondents, freezing of Cuban embargo, commercial relations, between relations contend that country, assets animosity that such manifest and Cuba United States courts should and that is clear, unfriendliness agree. doWe Government. Cuban to the closed to undertake competent hardly be would This Court *11 its of friendliness varying degrees of assessments for deter- touchstone lacking some definite and, absence, any relationship, to consider constrained we are mination, sovereign power as em- recognized awith war, short of States courts. resorting of United bracing privilege to is an overt diplomatic of relations Although the severance sovereign dealings of significance objective act with inevitably say should unwilling to that we are it states, bringing suit. privilege of of withdrawal result any political number of may place for Severance take and whatever ex- unpredictable, duration is reasons, its may approach not pression animosity imply of it does in a declaration of implicit that war. nonrecognition government of a perhaps
It is true that greater reflect no unfriendli- certain circumstances diplomatic severance of relations with rec- ness than the ognized recognize but the refusal to has government, legal aspect. signifies country’s unwilling- unique It this acknowledge government that in question ness sovereign authority speaks territory pur- as the for the Cibrario, ports Republic supra, see Russian v. control, 139 N. at 261-263. 260-263, E., recognition at Political exclusively a function of possible the Executive. The incongruity judicial “recognition,” by permitting suit, government recognized by of a the Executive is corn- diplomatic theory relations, on the that under such circumstances require comity granting immunity. did not The case was affirmed, ground. but on U. S. another pletely merely diplomatic absent when relations are broken.12 existing
The view that situation between the to a United States Cuba should not lead denial status to sue is buttressed the circumstance none of acts of our Government have been aimed closing at country Cuba, the courts of this and more particularly by the fact that the has come to Government support very “act of claim in Cuba’s state” litigation.
Respondents
urge
further
reciprocity
treatment
is an
ingredient
comity
essential
there-
generally, and,
privilege
fore,
bring
states to
here.
suit
Although Hilton
Guyot,
S.
some
U.
contains
language
broad
relationship
reciprocity
about
the case in
comity,
imposed
requirement
fact
of reci-
procity
only
regard to conclusiveness of
judgments,
only
Id.,
even then
in limited
at
circumstances.
170-171.
Direction der
In
v. United States
Disconto-Gesellschaft
*12
Steel Corp.,
(D.
There are sovereign states to standing ciple question to sovereign permitted will be foreign a sue. Whether than politically more sensitive problem a sue involves re-examined, of its courts judgments whether the the Executive of embarrassment possibility and the substantially more handling foreign relations is Branch re- judgments, principle, Re-examination acute. of injustice the possibility than enhances duces rather allow suit case; a refusal being particular done particular a for a court to see that impossible makes it freezing of Cuban assets dispute fairly resolved. The branches to capacity political of the exemplifies the variety (see infra, pp. through techniques assure, is protected the national interest 431, 435-436), against thought improperly which is to be country denying rights of citizens. United States country gives whether a question
Furthermore, presents a judicata judgments res effect to United States relatively simple inquiry. precise status for- United States Government its nationals before To eign courts is much more difficult to determine. make investigation such an court would have significant, only provided what is formal discover not struc- foreign judicial but also what prac- ture system, fair possibilities tical treatment are. The courts, powers whose to further the national interest necessarily affairs are compared with circumscribed political those can best serve rule branches, excluding not proper otherwise suitors because legal systems. of deficiencies in their petitioner We hold that from barred access *13 to the federal courts.13
13Respondents suggest brought, only that all, suit if at by agent an authorized of the Cuban Government. Decisions estab lishing privilege sovereign prerogatives may based on be evoked
III. had in the Respondents claimed lower courts that Cuba which expropriated merely rights contractual the situs of taking propriety was New the York, governed York The Dis- law. was, therefore, New trict on rejected Court this contention basis right ownership possessed by against Farr, A. V. C. sugar. sugar prior payment Whitlock to for the That itself claim expropriated was rather than contractual supported by further Cuba’s refusal to let S. S. until a signed. sail new had been Had contract Hornfels expro- the Cuban represented only attempt decree priate right V., delay a contractual of C. A. the forced shipment subsequent Farr, Whitlock’s contract with petitioner’s assignor meaningless.14 would have been Neither finding Court’s loca- concerning District tion of S. S. nor its conclusion that Cuba had Hornfels jurisdiction territorial to expropriate acqui- the sugar, esced in challenged the Court of Appeals, seriously Respondents’ here. limited view of the expropriation rejected. must be
Respondents if further contend that the expropriation sugar was of the this suit itself, then becomes to en- one force public law of a foreign as such is not cognizable in country. rely the courts They on the principle enunciated federal and state cases that a only by agents, g., Anne, such e. 435; parte Muir, 3 Wheat. Ex 522, 532-533; Vicente, U. S. The Sao 151; 260 U. S. The “Gul Djemal,” U. apposite S. are not to cases in which a state merely in our any sues Courts claiming right uniquely apper- without taining sovereigns. jurisdiction If expropriate Cuba had right, contractual it unnecessary would have been compel signing it to of a new any contract. If Cuba did have jurisdiction, action took regard Farr, sugar Whitlock would have been ineffective to transfer C. A. V.’s claim.
414 of laws or revenue penal to give effect need
court
Ante
g., The
e.
See,
or sister states.
countries
Co.,
Ins.
Pelican
v.
123; Wisconsin
66,
lope, 10 Wheat.
(all
Attrill,
657
146 U. S.
Huntington
265;
127
S.
v.
U.
15
Mitchell, 30 F. 2d
Moore v.
laws);
relating
penal
to
City Detroit
18;
grounds, 281
S.
aff’d on other
U.
600,
City
Philadelphia
Proctor,
412;
A. 2d
193,
44 Del.
61
v.
S.
2d
230 Y.
167,
N.
N.
Cohen, 11 N. Y. 2d
184
401,
v.
E.
laws).
relating
revenue
(all
2d 188
may apply to other
doctrine
which this
The extent
open ques-
though perhaps still
public laws,
kinds of
have
For we
decided in this case.
not be
tion,16 need
doc-
suggests that the
authority
to no
been referred
fully
has been
which,
public
here,
trine reaches
foreign state. Cuba’s restraint
executed within the
regarded
purposes
for these
S.
must be
the S. Hornfels
taking
an effective
vest-
sugar,
have constituted
right
Farr,
in it.
Whit-
ing
C. A. Y.’s
Cuba
15
penal
purposes
appears
cited,
the cases
law for the
As
from
public
of this doctrine is one which seeks to redress a
rather than a
private wrong.
16
may
Britain,
have a broader
reach in Great
see
doctrine
Cornero,
King’s
Reps. 372;
Don Alonso v.
212a,
Bench
Hob.
Hobart’s
Banco de
9
140;
Scots
Attorney-General
L. T.
Vizcaya
Reps.
v. Don
4
(Outer House); Dicey’s
Alfonso
Canada v. William Schulze &
de
Borbon
y Austria,
Conflict of
[1935]
Co.,
Laws,
1
[1901]
K. B.
162
(Morris
1958); Mann, Prerogative Rights
Foreign
ed.
States and
Lepage
Society
(1955);
Laws,
25
but see
the Conflict of
40 Grotius
tice, Ch.
v. K. Jabbour
San Paulo
Weekly
L. R. 139
Div.);
v. Custodian
Coffee
v.
Lorentzen (Q.
Estates
B.),
than in the United
Co.,
Lydden Co.,
Israeli Absentee
[1917]
&
W.
N.
[1942]
States,
216
Property,
2 K.
(High
United States
cf. B.
Ct.
202;
[1954]
of Jus
F. &
Belmont,
(possibility
542, rev’d,
2d
v.
85 F.
Cuban law.
In dictum in
293,
Hudson v.
4 Cranch
recognize
Chief Justice Marshall declared that one nation must
sovereign power
another,
long
jurisdiction
act
so
as it has
law,
under
improper according
even
it
if
to the
principle
internal law of the latter state. This
has been followed in
See,
g.,
Espana
a number of cases.
e. Banco de
Federal
v.
Reserve
Bank,
438, 443,
(C.
Cir.);
114
2dF.
444
A. 2d
Bernstein v. Van
Heyghen
Anonyme,
(C.
246,
Cir.);
Freres Societe
2d
2d
163 F.
249
A.
Corp.,
Eastern
Supp.
States Petroleum Co. v. Asiatic Petroleum
28 F.
(D.
Y.).
279
C. S. D. N.
But see
Southern R.
Canada
Co. v.
Gebhard,
527;
States,
109 U. S.
cf. Fremont
United
Another the resolution of this in the any applied courts below. test Were to be would have to be challenged what effect the decree would have if in Cuba. If no legal authority institution of would refuse decree, to effectuate the argued invalidity properly pub- “formal” status —here its if not its lished in the OfficialGazette in Cuba —is irrelevant. It has not been seriously judicial contended that institutions of Cuba would declare the decree invalid.
416
IV.
of state doc-
classic American statement
the act
The
England
as
have taken root
trine,
appears
Eng. Rep.
Bamfield,
604, 36
Blad
Swans.
early
1674,
v.
of this
jurisprudence
in the
992,
began
emerge
early
nineteenth cen-
country
eighteenth
the late
g.,
Hylton,
199, 230;
3 Dali.
e. Ware v.
turies, see,
The Schooner
Guestier,
294;
“Every sovereign respect State is bound to sovereign and the dependence every State, other country judgment courts of one will not sit on the *16 government of another done within its acts territory. grievances by own Redress of reason of through open must obtained such acts means by sovereign as powers to be availed between themselves.”
Following precept this the Court that case refused Hernandez, revolutionary into acts of inquire Vene- military government commander had zuelan whose been recognized by the United which made States, later were damage country by of a action in this Underhill, the basis citizen, American who claimed that had been un- he lawfully and detained in assaulted, coerced, by Venezuela Hernandez.
None of this subsequent Court’s cases which the act directly peripherally of state doctrine was involved any manifest from Underhill. retreat See American Banana o. United Fruit Co., 347; Oetjen C v. 213 U. S. v. Co., 297; Central Leather 246 U. S. Ricaud American v. Co., 304; Shapleigh Mier,
Metal U. S. v. 299 U. S. United United Belmont, States 468; 324; 301 U. S. v. Pink, States contrary S. 203. On two U. Ricaud, Oetjen these as announced cases, doctrine Underhill unequivocal was reaffirmed in terms. Oetjen involved seizure hides from a Mexican citizen as a military levy by Villa, acting General for the forces of General Carranza, government recog- whose was nized country subsequent prior to the trial but decision by this Court. The hides sold to a Texas were corporation shipped them to the United States assigned assignee them to As defendant. original plaintiff replevied owner, hides, claiming they had been seized in Hague violation of the Con- ventions. In affirming judgment defendant, suggested Court the rules of the Conventions did apply to civil war and if that, they did, even relevant seizure was not in S., violation of them. 246 U. at 301-302. Nevertheless, it chose to rest its decision grounds. on other It designation described the sovereign a political question to be determined legislative and departments executive rather than the judicial department, invoked the established rule that recognition such operates retroactively to past validate acts, and found the basic tenet of Underhill to be applicable to the case before it.
“The principle that the conduct of independ- one government ent cannot be successfully questioned in the courts of applicable another is as to a case involving the title to property brought within the *17 custody a such court, we have here, as was held to be to cited, the cases in which claims for damages were upon based acts done in a foreign country, for it at upon rests last the highest consid- erations of international comity and expediency. permit To validity the of the acts of one sovereign State to be reexamined and perhaps by condemned certainly ‘imperil very of another would
the courts governments between the amicable relations ” Id., of nations.’ at 303-304. peace the vex general of facts similar —another In Bimud were the military a lead bullion as forces seized the Carranza an belonged to taken that the levy except— Underhill, Ameri- The Court found American citizen. Commenting on Banana, Oetjen controlling. can cases, those principle the nature of the established the rule opinion stated that once jurisdiction deprive not the courts
“does only that, when requires a case. It acquired over government has appear made to that the it is way subject-matter on given in a acted or the merit of details of such action litigation, accepted but must be questioned cannot be the result accept To a rule for their decision. by our courts as accordingly not authority and to decide ruling an but is jurisdiction or abandonment surrender prop- to the it. It the title exercise of results by the in this case must be determined result erty military authorities of action taken at 309. S., Mexico . . . .” U. language of Mr. Justice Cardozo effect is the
To same commenting on supra, Shapleigh case, where, in the (299 land said validity expropriation, of a Mexican he pro- whether the 471): question at here S.,U. “The wrong to our nationals ceeding conducted as to be was so though of international valid law, under the doctrines wrongs land. For under the law of the situs remedy along to be followed is order diplomacy.” channels of deciding present
In
case the Court of Appeals
exception
part upon
unqualified
relied
teach-
*18
Underhill, Oetjen,
and Ricaud
ings
that court
Heyghen
In Bernstein v. Van
had earlier indicated.
Anonyme,
Freres Societe
2d brought
F.
suit was
assignee property allegedly
to recover from an
taken,
effect,
plaintiff
the Nazi
because
was Jew-
Government
Recognizing
ish.
the odious nature of this act of state,
through Judge
the court,
Hand,
Learned
nonetheless re-
fused to
ground.
consider it invalid on that
Rather,
if
looked to
any
see
the Executive had acted in
manner
that would indicate that United States Courts should
give
to
refuse
to such a
Finding
effect
decree.
no
such evidence, the court sustained dismissal of the com-
plaint.
In a
involving
later case
similar facts the same
court again assumed examination of the German acts
improper, Bernstein
N. V.
Nederlandsche-Ameri-
kaansche Stoomvaart-Maatschappij,
18The letter stated: government “1. This consistently opposed has the forcible acts dispossession discriminatory confiscatory practiced nature by the Germans on peoples subject the countries or to their controls. policy
“3. The Executive, respect with to claims asserted in the (or United States for the restitution of identifiable compensation thereof) in lieu through lost force, coercion, or duress persecution as a result of Nazi Germany, is to relieve American any courts upon from jurisdiction restraint the exercise of their pass upon validity of the acts of Nazi Depart- officials.” State April ment Release, 27, 1949, Dept. Press State Bull. 592. pass upon had occasion has never
This Court *19 nor need do so now. exception, Bernstein so-called may thought to exist the ambiguity be For whatever which the officials on Department from State two letters now re- 858, 307 F. at Appeals relied,19 is 2d, Court the has taken by position which Executive moved the not claim; respondents do on act of state this Court the were intended view that these letters indeed contest the wish not Department’s no than the then to reflect more bearing litigation. on this any to make statement upon turns therefore, The outcome of whether case, this against urged by respondents the any of the contentions premises doctrine in the application of act apply doctrine does not acceptable: (1) that as is claimed law, acts of state violate (2) here; inapplicable the case that the doctrine is specifically interposes partic- it in a unless Executive case; (3) any ular that, event, doctrine by government plaintiff be invoked our courts. Chayes, Legal Department, Abram Adviser to the State 18, 1961, inquiry regarding wrote on October in answer to an by attorney position Department Laylin, Mr. John for amici: Department not, Ñipe “The in the Bahia de State has case or elsewhere, anything position done inconsistent with the taken on by Secretary the Cuban nationalizations Herter. Whether or not given these will in the future be effect in the nationalizations United is, course, States for the courts to determine. Since the Sabba present any courts, tino ease and other similar at cases are before question by Department comments on this of State would be out place you yourself point out, As at time. statements highly susceptible executive branch are of misconstruction.” 14, George A Ball, letter dated November from Under Secre- tary Affairs, responded inquiry by for Economic to a similar the same attorney: carefully your
“I have considered letter and have discussed it with Legal conclusion, Secretary concurs, Adviser. Our in which the Department pending should not comment on matters before the courts.”
y. on which we foundations we discuss the Preliminarily, particu- and more rest, of state doctrine deem the act gov- state or federal of whether larly question case.20 diversity ain federal application erns its compelled either this doctrine is believe that We do not some of sovereign authority, as nature of by the inherent Underhill, supra; seem to see imply, the earlier decisions Banana, Oetjen, supra, or supra; American at law. If a transaction of international principle some another, forum is in in one and the place jurisdiction takes by applying by dismissing action the forum does not *20 of its first purport jurisdiction its own law to divest the or merely adjudicate it sovereignty; territorial declines makes its own or before applicable parties law country penal it. The refusal of one to enforce the laws (supra, pp. 413-414) of typical example another is a of instance when a will court not a cause of action entertain arising in another jurisdiction. While historic notions sovereign do authority upon bear the wisdom em- ploying they the act of state do not dictate its doctrine, existence. require application
That international law does not the doctrine is practice evidenced nations. rendering subject Most of the countries decisions on the rigidly.21 fail to follow the international arbitral rule No 20Although complaint alleged diversity in this case both question Appeals jurisdic jurisdiction, reached federal Court only ground, 2d, tion on the former 307 F. at 852. We need not hereafter, question decide, appearing whether for reasons federal jurisdiction also -existed. 21 English jurisprudence, In in the classic case of Luther v. James Sagor & Co., [1921] 3 K. B. the act of state doctrine articu- lated in not unlike those of the See terms United States cases. Princess Paley Olga Weisz, v. [1929] 1 K. B. 718. But see Anglo- 422 suggests international decision discovered judicial foreign gov- recognition sovereign acts of prescribes
law Law, § 1 115aa ernments, Oppenheim’s see International no has apparently 8th ed. claim (Lauterpacht, 1955), fail- before an international tribunal that ever been raised act of a breach apply ure to state doctrine constitutes If obligation. of international does it forbid prescribe doctrine, appli- use neither does if cation of the rule even is claimed that the act of in question violated international law. The tra- ditional view of international law that it establishes principles determining substantive coun- whether one try wronged peculiar has another. Because of its nation- to-nation character the usual method for an individual Iranian Oil Co. Jaffrate, [1953] Weekly L. R. [1953] Int’l Rep. (Aden Sup. Ct.) (exception L. to doctrine if law). countries, however, act violates international Civil law apply exceptions contrary the rule make for acts to their sense of public See, g., Ropit case, (France), order. e. Cour de Cassation [1929] Recueil Général Des Lois et Des Arrets (Sirey) Part I, 217; (Clunet) (1928), 55 Journal Du Droit International [1927- Dig., 43; Graue, Germany: Recognition Foreign Ann. No. 1928] Comp. Expropriations, (1954); Domke, J. L. 3 Am. Indonesian Foreign Courts, Nationalization Measures Before 54 Am. J. Int’l (1960) (discussion excerpts opinions L. 305 of and from of the Dis- Appeals trict Court in Bremen and the Hanseatic Court of in N. V. Verenigde Deli-Maatschapijen v. Deutsch-Indonesische Tabak-Han- *21 delsgesellschaft H., m. b. and of the Amsterdam District Court and Maatschappij Republiek Appellate in Senembah Indo- Court N. V. v. Indonesia); Confiscation, Massouridis, nesio Bank of The Effects Requisition by Foreign Authority, Expropriation, and a 3 Revue Hellénique 62, (1950) (recounting De Droit International 68~ a deci- Piraeus); Anglo-Iranian sion of the court of the first instance of Oil Co. v. S. U. P. O. R. Co., [1955] Int’l L.'Rep. 19 (Ct. Venice), of I, 719; 78 II Foro Italiano Part 40 für Blatter Zürcherische Rechts- prechung 65, (Switzerland). Anglo-Iranian No. 172-173 also See Oil Co. v. Idemitsu Kosan Kabushiki (High Ct. of Tokyo). Kaisha, [1953] Int’l L. Rep. 312 repair local remedies and then to to exhaust seek relief is persuade own authorities of state executive his in or before champion diplomacy claim them to his Diekelman, United States v. international tribunal. See of true that Although is, course, 524. it 520, S.U. part of courts law as apply States United Hylton, Ware v. circumstances, appropriate our own The Nereide, 423; 281; The 388, 9 Cranch 199, Dall. of Habana, Paquete 700, public 677, 175 U. S. theory country which is in hardly nations can dictate wrong within its domestic how to that wronged treat borders. Oetjen “The con-
Despite the broad statement com- foreign of our Government duct of relations Legis- to the Executive mitted the Constitution cannot it Departments,” lative . . . 246 U. at S., controversy thought “every of case or course be beyond cog- foreign judicial lies touches relations Carr, Baker S. 211. The text nizance.” U. of doc- require of the Constitution does not the act state from irrevocably judiciary does not remove trine; validity foreign of acts of capacity to review the state. “consti- of state doctrine have does, however,
The act underpinnings. tutional” It arises of the basic rela- out in a government system between branches of tionships separation powers. competency It concerns the particular and implement dissimilar institutions make in the area of international relations. kinds decisions in past expresses doctrine as formulated decisions strong engagement Branch that sense of the- Judicial its passing validity task of on the acts country’s pur- hinder rather than further this goals community both for itself and for the suit sphere. Many nations as whole the international *22 424 22 disagree view; they with have
commentators
this
limiting past
deci-
distinguishing
means of
striven
policy
by advancing
various considerations
sions
narrowing
apparent scope
of the
of the rule.
to stimulate
thought
predominate,
Whatever considerations are
plain
problems
uniquely
involved are
federal
in
If federal
in
instance
authority,
nature.
this
this
competence
the field of
in this area
Court,
judicial
orders
for the federal
and the
left
courts,
state courts are
free
rules,
purposes
formulate their own
behind the doc-
effectively
could
as if
had
trine
undermined
there
pronouncement
been no
subject.
federal
on the
could
in
perhaps
diversity
We
this
action avoid the
question
deciding
appli-
whether federal or
law is
aspect
cable to
litigation.
New York has
enunciated the act of state doctrine in
terms
echo
those of federal
during
reign
decisions decided
Tyson,
Baez,
22See, g., City e. Association of the Bar of the York, of New Law, Committee on A International Reconsideration of the Act (1959); State Doctrine in United Domke, supra, States Courts 21; Mann, Delinquencies note Municipal International Courts, Before Q. (1954); Zander, 70 L. Rev. 181 Doctrine, The Act of State 53 Am. (1959). see, J. Int’l g., Falk, Theory L. 826 But e. Toward a Participation of Domestic Legal Courts the International Order: Critique A Sabbatino, of Banco Nacional de Rutgers Cuba v. L. (1961); Reeves, Rev. 1 Act of State Doctrine and the Rule of Law— Reply, A (1960). 54 Am. J. Int’l L. *23 government when such territory, own even
within its within of an American citizen the property and sells seizes Assur- Equitable Dougherty v. Cf. its boundaries.” Life v. Holser 897; 193 N. E. Society, 71, 266 Y. ance N. 14 277 Y. Reichsbahn-Gesellschaft, 474, N. Deutsche L’Urbaine Frenkel & Co. v. 2d cf. E. 798. But N. our Co., N. E. Thus 251 Y. 167 430. Fire Ins. N. with whether we dealt might well be the conclusions same Tomp- Erie Co. v. law, as one see R. problem this of state Co., Mfg. v. Elec. kins, 64; S. Co. Stentor 304 U. Klaxon McCoach, 313 S. 487; v. U. 313 U. S. Griffin law. federal make that an clear
However, we are constrained to com regarding with choice concerned a basic issue Judiciary National and function of the and the petence relationships other mem ordering in our with Executive community treated ex international must be bers of the fair to law.23 clusively aspect as an of federal It seems act of the Court did not have rules like assume Co. in mind when it decided Erie R. v. doctrine state Jessup, Philip Soon Professor C. Tompkins. thereafter, recog Justice, of the International Court of judge now legal Erie potential dangers nized the were extended cau affecting relations.24 He problems international not be left that rules should tioned divergent parochial interpretations. and perhaps state rationale of state equally applicable His basic the act doctrine. judicial scope this is At least true when the Court limits the
inquiry. might, We need not whether a now consider state court circumstances, concerning certain a more view adhere to restrictive scope required by acts than this examination Court. Tompkins Applied The Doctrine Erie Railroad v. to Interna Law, (1939). 33 Am. J. tional Int’l L.
The
pre-Erie
Court
act of
cases, although
problem
burdened
applicable
the source of
law,
language
used
sufficiently strong and broad-sweep-
ing
suggest
courts
that state
were not
left free to
develop their own
(as they
doctrines
would have been
had this Court merely
interpreting
been
common law
Tyson,
under
supra).
Appeals
Court
Swift
the first Bernstein case, supra,
diversity
suit, plainly
considered the decisions of
Court, despite
the inter-
Erie,
vention of
to be
controlling
regard to the act of
*24
state question, at
indicating
same time
that New
York law governed
aspects
other
of the case. We are
not without other precedent for a determination that fed-
eral law governs;
there are enclaves of federal
judge-
made law which bind
A
the States.
body
national
federal-court-built
law has been held to have been con-
templated by § 301 of
Labor Management
Relations
Act, Textile
Mills,
Workers v. Lincoln
In Hinderlider v. La
River
Plata
Co.,
VI. *25 a principle decision If the act of state doctrine compelled courts alike but binding federal and state on its Constitution, law nor the by neither international the vitality depends capacity on its reflect continuing the judicial of functions between proper distribution indirectly sup statutory provisions Various constitutional and 3, 10; port determination, Const., I, els. Art. this see U. S. Art. § (a) (b) (b) 2; (2), (1), (3), II, 2, 3; Ill, S. Art. 28 U. C. § §§ §§ uniformity by reflecting for (a)(2), 1333, 1350-1351, a concern indicating country’s dealings foreign a with in this nations jurisdiction give significance to the desire to matters of international Comment, The Act of State Doctrine— of federal institutions. See Rev., Law, Public International 62 Col. L. Its Relation to Private and Belmont, supra; 1278,1297, 123; States v. United States n. cf. United supra. Pink, political bearing branches of the Government on matters apparent upon foreign affairs. It should be the greater degree of codification or concern- the consensus ing particular a area of international the more law, for appropriate judiciary it is the to render decisions the can regarding appli- since courts then focus on the it, agreed principle cation of an of fact circumstances rather than on the of establishing prin- sensitive task ciple not inconsistent with national interest or with justice. is also aspects It evident that some of international law touch much sharply more on na- tional others; important nerves than do the less implications of an are for our issue relations, justification weaker exclusivity political for in the branches. The balance of relevant considerations if government also be shifted perpetrated challenged act of longer no as in existence, Bernstein case, political country interest this may, as result, measurably altered. Therefore, laying rather than reaffirming down or inflexible all-encompassing rule in this case, only we decide that the Judicial Branch will not validity examine the of a taking within its own territory by a foreign sovereign government", recognized extant and country at time treaty absence suit, other unam- biguous agreement regarding controlling legal principles, even if complaint alleges taking violates customary international law.
There are if any few issues in international law today on which opinion seems to be so divided as the limitations on a power state's to expropriate the property of aliens.20
20Compare, g., Friedman, Expropriation e. in International Law (1953); 206-211 Dawson and Weston, “Prompt, Adequate and Effec A Compensation? tive”: Universal Standard of 30 Fordham L. Rev. *26 (1962), 727 Secretary with Note from of State Hull to Mexican Ambassador, August 22, 1938, V Foreign Relations of the United
429 judicial27 in international course, authority, is, There national expressions in the decisions, and arbitral28 for the view among commentators30 governments,29 if is law it improper under taking that a is without discriminatory, or public purpose, not for compensa- and effective adequate, provision prompt, although they countries, However, tion. Communist after degree compensation provided in fact have on obligation no recognize commonly diplomatic efforts, representatives taking country.31 Certain part countries underdeveloped independent newly Foreign Prop- (1938); Doman, Postwar Nationalization States 685 not, (1948). do 1125, 1127 We erty Europe, L. Rev. 48 Col. standard in say is no international course, there mean adjudication only is not meet for area; that the matter we conclude by domestic tribunals. 27 (1934); Case, J., A/B, 63, ser. No. at 87 Chinn P. C. I. See Oscar (1928). 47 Factory Case, J., 17, 46, at A., C. I. ser. No. Chorzow P. 28 States) Shipowners’ (Norway/United Norwegian Case See, g., e. 307, 334, Rep. Awards (Perm. Arb.) (1922), 1 Int’l Arb. U. N. Ct. (1932); 69, Series, 39, 74 Hague Reports, 2d (1948), Court 339 Joly Sabia, General Marguerite American and Panamanian de de 358, Rep. Awards 379, Int’l Arb. 447, 6 U. N. Arbitration Claims (1955). 366 29 Envoy at to British g., Dispatch Lord Palmerston See, e. from 1849-1850, Foreign Papers Athens, Aug. 7, 1846, 39 British and State Secretary to Mexican Ambas Hull Note from State 431-432. 674 July Foreign of the United States sador, 21, 1938, V Relations Dept. July 1960, 43 Government, 16, (1938); to the Cuban Note (1960). State Bull. Enterprises Property g., McNair, The Seizure of See, e. (1959); Re 243-253 Indonesia, Netherlands Int’l L. Rev. (Proposed Foreign Law of the United States statement, Relations 1962), Draft 190-195. Official §§ 1143-1158; Fleming, States, supra, Con Doman, note at See (1960); Bystricky, Inter Progress, Notes on Certain tracts and 62-63 Nationalisation, Relating Legal to Socialist Problems national Assn, Proceedings Lawyers, Com of Democratic International Congress 15. Law, (1956), International Sixth mission on Private *27 430 questioned responsibility
have whether rules of state toward aliens can bind nations have not consented that argued traditionally and it articu- them32 that governing expropriation lated standards of re- “imperialist” inappropriate flect interests and are to the emergent of circumstances states.33 disagreement law relevant international divergence standards reflects an even more basic between capital importing capital national interests and exporting ideologies nations and between social control those countries that favor state considerable portion production and means those adhere to a enterprise system. free imagine It is difficult to country courts of this embarking on in an adjudication area which sensitively practical touches more ideological goals of the various community members of nations.34 we prospect
When consider courts charac- terizing foreign expropriations, however justifiably, as invalid under international law and pass ineffective to title, the wisdom of precedents is confirmed. While each of leading cases Court argued be distinguishable on its facts from this one—Underhill sovereign because immunity provided an independent ground Oetjen, Ricaud, and Shapleigh because there
32 Anand, See Role of the “New” Asian-African Countries in the Present Legal International Order, (1962) ; 56 Am. J. Int’l L. 383 Roy, Is the Responsibility Law of Injuries of States for to Aliens a Part of Universal International Law? 55 (1961). Am. J. Int’l L. 863 33See 1957 (Vol. Yb. U. N. Int’l 1) Comm’n 155, (state L. ments of (Mexico) Mr. Padilla Ñervo (India)). and Mr. Pal are, There course, areas of international law in which consensus greater as to standards is represent and which do battleground conflicting ideologies. way This decision in no intimates that country the courts broadly of this are foreclosed considering from questions of international law. plain law—the of international actually no violation was of ex- import and the opinions, all these implication Shap- at Oetjen, S., 246 U. press statements doctrine is the act of state leigh, at S.,U. law been if has violated. applicable even plausibly of the three most Ricaud, one case In possibility violation, an international involving *28 not dis- doctrine was to the act of state exception of an concluded that it was have cussed. Some commentators attention,35 but Justice Clarke brought the Court’s to on the opinions, Ricaud Oetjen the delivered both stated in the principles can so we assume day, same latter case. applicable to the former were to of a conclusion possible consequences adverse The highlighted in cases is contrary implicit these branch with contrasting practices political of the by process matters of this judicial limitations any significance, an Following expropriation kind. to engages diplomacy aimed assure that the Executive compensated harmed are States citizens who are United it will country, all claimants of this fairly. Representing by or by talks, often be either bilateral multilateral able, employment to. Nations, submission the United to de- political of economic and achieve some sanctions, of in- general redress. Judicial determinations gree an only on the other have validity can, hand, of title they depend on the fortuitous occasional since impact, being brought question circumstance in- if acts country.36 would, into Such decisions this Restatement, Foreign States, Law of the United See Relations (Proposed 1962), §43, Reporters’ Official Draft note 3. *29 finding
a a insult, compliance serious while of with inter- law, greatly strengthen bargaining national would the hand with consequent of the other state detriment American interests. if
Even the State Department proclaimed has the impropriety of the expropriation, stamp approval the its view a judicial tribunal, might however impartial, any judicial increase affront and the might decision occur always at almost time, well after the taking, when such an impact contrary would be to our national interest. Considerably more serious and far-reaching consequences would flow from a judicial finding that international law standards had been ifmet that determination flew in the of a Department proclamation face State contrary. the articulating When principles of international law in its with relations other states, speaks Executive Branch only interpreter as an of generally accepted and tradi- an advocate also as but courts, would rules, tional community for the desirable it believes of standards short, In concerns. national protective nations of con- possibility matter is way cut, whatever Branches could and Executive Judicial flict between avoided. hardly be agree- if there is not even that, contend
Respondents determining the for standards general regarding ment of re- alleged combination validity expropriations, compensation inadequate discrimination, taliation, expropriation particular clear that this patently makes If this view law.37 of international was violation deter- courts so to unwise it would still be accurate, drawing require now would decision mine. Such would and these subsequent cases of more difficult lines Executive with the of conflict possibility involve the course, this either if courts avoided view. Even an of state whenever validity of act presuming the byor fol- thought unclear law was standard in such situa- declaration Department lowing the State might uncertainty very expression judicial tion, Branch. the Executive provide embarrassment pressed exception consequence serious Another titles to render uncertain would be by respondents of alter- consequence possible with the foreign commerce, If the attitude trade.38 ing the flow of international such a determina respondents in suit course, to assist this Of judging purpose for the a decision that have to include tion would Y. is not to be law C. A. expropriation under international principle interna acceptance of the regarded as Cuban and of international provides for breaches other remedies tional *30 damages before international expropriation than suits for of standards questions of these 861, 868 for discussion 2d, 307 F. at tribunals. See Appeals. by the of Court view that the deterrent possibility is consistent with the This ordinarily great. be If the would not invalidations effect of court products buyers at country find for its expropriating could other buying expropri- one unclear, States courts United were safely if goods import he could them not know ated would in- country. known be takings Even were into goods difficulty determining valid, one would have after changed particular several times whether the had hands of an product articles in were question the ineffective state act.39
Against find considerations, the force of such we respondents’ countervailing arguments quite unpersua- Their sive. basic contention is that States courts United significant of growth could make contribution to the law, importance, a contribution whose it magnified by would said, paucity the relative deci- of law by given fluidity sional international bodies. But the present of world conditions, of such effectiveness a patchwork approach toward the formulation of an acceptable of body concerning responsibility expropriations is, say highly the least, conjectural. Moreover, upon sanguine presupposition rests decisions of capital of the the world’s major courts exporting country and principal exponent of free roughly price, might the same the deterrent effect be minimal although patterns significantly of changed. trade would be respondents’ position Were adopted, might the courts be en gaged in ascertaining origin fungible goods, difficult tasks of considering improvements country effect a third made on expropriated determining materials, raw title to com subsequently grown expropriated produced modities on land or with expropriated machinery.
By import discouraging country by appre- to this traders certain or nonrecognition judicial hensive of ownership, findings invalidity might competition among of title sellers; goods limit if the excluded significant portion prices constituted market, for United purchasers might consequent States rise with a economic burden on Balancing States undesirability United consumers. such against furthering result likelihood other national concerns is plainly political a function best left in hands of branches. *31 ex- as disinterested accepted be system would enterprise adhering to by those legal principle of sound pressions ideologies. widely different cir- the fortuitous regardless of
It is contended over jurisdiction necessary United States cumstances act and the resultant involving a a case program taken any expropriation to application isolated decide justly courts to function of the whole, as a it is the typi- Perhaps the most disputes individual before them. or his original involves owner act of cal state case expropriat- not association with the assignee suing one “title” to him. But it ing has had transferred state who who original claim of regard owner, is difficult to diplomatic chan- recompensed through may otherwise be cognizance than the demanding judicial nels, more party who, innocent third by purchaser, claim of title any remedy. from if taken is without him, pressure result- Respondents claim the economic doc- exception from to the act of state ing proposed materially protection will add trine to the United are even convinced, States investors. We assum- ing of this Expropriations contention. relevance place variety reasons, political take for a and ideo- logical economic. one as well as considers When by variety possessed country of means make secure persuasive or foreign investment, coercive effect of acts of expropriation invalidation dwindles judicial newly states in need comparison. independent are a cli- continuing foreign investment; the creation of such con- mate unfavorable to investment wholesale long-run may well work to their economic fiscations given disadvantage. Foreign many aid coun- these lever in hands of provides powerful political tries fair treatment of na- to ensure United States branches embargo sanctions of economic Ultimately the tionals. country of assets in this freezing be any all of employed. Any country willing brave sporadic consequences unlikely deterred these directly only property brought judicial affecting decisions *32 political unwilling If are to to our shores. the branches ample powers compensation, their effect exercise a judgment reflects of the national interest which the indirectly. would ill-advised to undermine judiciary be if suggested appli- act of state doctrine is that the It only cable of international it should be law, violations expressly stipulates so when the Executive Branch that not wish the on pass question does courts to validity. City Association of Bar of See New Committee on International A York, Reconsidera- Law, tion of the Act of State Doctrine in United States (1959). Courts should to reject repre- We be slow sentations of such the Government reversal Bernstein would work principle serious inroads on the maximum diplomacy. effectiveness United States Department Often the State will from wish refrain tak- official ing particularly an at a position, moment would be development private litiga- dictated might tion inopportune but be diplomatically. Adverse consequences might domestic from flow an official stand which could if only be at assuaged, by revealing mat- all, kept ters best Of secret. consideration course, relevant Department the State would the position be contem- plated in the hear court to It highly question- case. able whether the examination validity by judiciary depend should on an guess by educated the Executive as to probable and, any result at should a rate, prediction wrong, be might Executive embarrassed its deal- ings with other countries. We do not pass now on the Bernstein but exception, even if it were deemed valid, its suggested extension is unwarranted.
However public offensive policy of this country and its expropriation constituent States an of this kind both national interest we conclude that be, of law goal establishing the rule progress toward the by maintaining among nations are best served intact application. doctrine in this realm of its act VII. Cuba’s status as
Finally, we must determine whether dictates a result with plaintiff this case at variance If the were to dis- the conclusions reached above. Court tinguish brought by sovereign states and between suits rule would little effect unless assignees, those have a careful examination were made each case to deter- private party suing mine if the had taken good inquiry exceptionally faith. would be Such in- since the transaction would almost difficult, relevant *33 our If such an variably have occurred outside borders. investigation irrelevant, 'were deemed a state could al- ways assign claim. its problem security
It true that of title is not is sovereign in the of a directly presented plaintiff, instance a although plaintiff relief, ship were such denied it would in goods elsewhere, thereby creating its alteration in sensitivity regard foreign to rela- flow trade. possibility and the embarrassment of the Execu- tions heightened by presence of a are, course, tive sovereign recognized The rebuke to a plaintiff. power a in pointed would be more were suitor our courts. In it discussing against foreign penal the rule enforcement of High the Eire laws, Justice, and revenue Court of Peter Buchanan Ltd. v. McVey, [1955] A. C. 529- id., 530, emphasized at that its 530, aff’d, justification was large degree embarrassing the desire to avoid another by scrutinizing penal its state and revenue laws. Al- though presumes invalidity that rule in the forum whereas principle presumes the act of state contrary, the doc- trines have a common rationale, rationale that negates when the act of state rule discarding
the wisdom of a enforcement seeking is not is a state which plaintiff act. public self- sanction
Certainly proposed would the distinction peaceful hardly conducive to something help remedies, not converted Farr, Had Whitlock order. alternatively contract, its lading, breached the bills act of doctrine on the could have relied Cuba proceeds. A. for the brought by of a claim Y. defense C. on the preclude reliance act It would be anomalous unilateral of Farr, doctrine because Whitlock’s of state action have been however such action, justified circumstances. under the theory treating the case another for
Respondents offer participation. It claimed differently of Cuba’s because law to all simply apply forum its own should drawn to analogy An relevant transactions. City Bank National sovereign immunity, area of China, Republic which, if a 348 U. S. seeks in our counterclaims
country courts, redress are immunity prerogative But relates to the permissible. right sovereign property subject suit; to have when the sov- thought require has been fairness counter- ereign subject legitimate seeks recovery, it be against claims it. The act of state doctrine, however, respect although immunity shares with the doctrine sovereign determining for concerns limits states, *34 of an It validity applicable otherwise rule of law. is if a plain recognized government sued on a contract a citizen, concededly legitimate with United States significant performance, locus of its and making, most apply the forum would not own substan- contacts, its law of tive contracts. Since of state act doctrine desirability presuming of the relevant trans- reflects follows; may action forum valid, same result apply regarding foreign its local expropriations. law challenge a proscribes of state doctrine Since the act in this validity expropriation of the Cuban decree invalidity based on must any counterclaim asserted case, or breach of con- theory a of conversion fail. Whether of New York law, is cause action under proper tract validity of presumed expropriation unaffected. no issues of fact Although remaining litigable we discern and may this District Court hear decide them case, the if they develop. judgment the Court of Appeals reversed proceedings
the case is to the remanded District Court opinion. consistent with this
It is so ordered. White, Mr. Justice dissenting.
I dismayed am the Court with has, one broad stroke, application declared the ascertainment beyond international competence law of the courts in large the United a important category States cases. I am disappointed also in the Court’s declaration that the sovereign regard acts of a state with to the prop- erty within aliens its borders beyond are the reach of country. law in the courts this How- ever clearly that law may be, sovereign may established violate it with impunity, except political insofar as the government branches of the provide remedy. This backward-looking doctrine, before never declared in Court, is carried disconcerting step further: not only are powerless the courts question acts proscribed by international they but are likewise powerless to to adjudicate refuse the claim upon founded a foreign law; they judgment must render and thereby validate the lawless act. Since the Court expressly ex- tends its ruling to all acts state expropriating property, however clearly inconsistent with the international com-
440 discriminatory of expropriations all munity, per- of taking properties of example for of aliens, religions nationalities, belonging races, certain sons courts validation to automatic are entitled has country found civilized other United States. No execu- necessary survival of the rigid such a rule of no the executive other government; of its tive branch from insulation inter- government require seems to such and no courts; in its other law adjudications national ascertain and incompetent so judiciary apparently law.1 apply others, following countries, among and their of
1 The courts fully of “executed” act territories have examined property: expropriating
316 England: (Aden Sup. Ct.); Anglo-Iranian N. V. Bataafsche Oil Co. v. de Jaffrate, Petroleum [1953] Maatschappij Int’l L. Rep. v. The War Damage Comm’n, [1956] Int’l L. Rep. 810 (Singapore App.). Ct. Maatschappij Rupubliek N. Indo-
Netherlands: Senembah V. v. 1959, p. Indonesia, Jurisprudentie No. Bank nesie Nederlandse reprinted Domke, (Amsterdam App.), excerpts Indonesian 218 Ct. Foreign J. Courts, Before 54 Am. Int’l L. Nationalization Measures (1960). 307-315 Germany: Verenigde Deli-Maatschapijen Deutsch-Indonesische N. v. V. Handelsgesellschaft (Bremen App.), to. b. H. Ct. Tabak- reprinted Domke, supra, (1960); excerpts at 313-314 Confiscation of Property of Sudeten Germans Case, [1948] Ann. Dig. 24, 25 (No. 12) (Amtsgericht Dingolfing). Kaisha, Anglo-Iranian Japan: Idemitsu Kosan Kabushiki Oil Co. v. Rep. [1953] 312 Int’l (High Ct. of L. Rep. 305 Tokyo). (Dist. Ct. Tokyo), aff’d, [1953] Int’l L. Italy: Anglo-Iranian Oil Co. v. U. O. R. S. P. Co., [1955] Int’l Anglo-Iranian (Ct. Venice); Rep. L. Oil Co. v. S. U. P. R. 19 O. Co., France: [1955] Volatron Int’l L. v. Rep. Moulin, (Civ. [1938-1940] Ct. Rome). Ann. Dig. (Ct. App. Bloch, Aix); Ibéricas Nathan Ann. Société Potasas [1938-1940] Cassation). Dig. (Ct. country applied any does refer to which has
The Court where a international law act state doctrine a ease substantial *36 doctrine, judi- I do not that the act of believe state cially underlying in this and the reasons fashioned Court, in disregard courts to cases it, require American decide litigants to a full rights of international law of the of determination on the merits.
I. Prior of this in which the act of decisions Court state controlling support doctrine was deemed do not asser- the tion foreign recog- acts of state or must be enforced nized or applied they in American when violate courts law, foreign the of nations. These cases do hold that act of applied persons or within property its borders not be denied in courts on effect our the ground public it violates of policy the the forum. language Also the broad in of cases evince some these does sought by issue is to be raised an alien has been property whose expropriated. country among This and this alone Court stand the civilized ruling nations of the world in that such an issue is not cognizable in a court of law.
The Court notes that the courts of both New York and Great Britain have language articulated act of in state doctrine broad by Hernandez, similar to that used this in Court Underhill 168 U. S. v. 250, and recognize from this it that these infers courts no international exception law to the of state act doctrine. The cases relied on the Court involved no international law in these For cases the issue. party objecting validity foreign to the of the act was a citizen foreign significant state. It is that courts of New both York and Britain, apparently Great in the first international cases squarely posed, law issue was ruled that act state doctrine validity was no foreign Anglo- bar to of the examination of the act. Iranian Oil Co. v. Jaffrate, [1953] Int’l L. Rep. 316 (Aden Sup. Ct.): Iranian 1951 law, for, Laws of were invalid international “[T]he by them, company expropriated any of the was without compensation.” Sulyok Kozpont Budapest, v. Penzintezeti App. 279 75, ail’d, 704, 111 2d Div. N. Y. S. N. Y. N. E. 2d 604 (foreign expropriation intangible property denied effect as con- trary public policy). to New York self-imposed restraint deal- caution
an attitude of But violations laws of a nation. ing with the presented cases, law either these international were were nationals predecessors in title parties because the or claimed was insub- acting violation state, presented facts Court light stantial at applicable the time.2 principles arguably even invok In the earliest Court one of decisions Guestier, ing doctrine, Hudson 4 Cranch of state act by foreign validity of a seizure Chief Justice Marshall held that sentencing power jurisdiction court could within of a vessel *37 juris passing sentence its not be reviewed “unless the court the loses by the nations notice.” diction which law can some circumstance of added.) Hernandez, the (Emphasis 250, S. where Underhill v. 168 U. oft-quoted form, suit in was a Court the act of state doctrine its stated against by of the Venezuelan in tort American citizen an officer compelled operation the of Government for an unlawful detention and plaintiffs during a in that the course of revolution water facilities country. immunity precluded plain principles of the Well-established However, grounds suit, tiff’s this was the for dismissal. and one of act doctrine dismiss above, noted invoke the of state in the Court did foreign ing arguably of a citizen the forced detention suit and posed cognizable But the did law. Court a claim under international ignore possibility law; of in violation international rather not of a by military distinguishing involving authorities cases arrests revolutionary concerning right bodies absence of of war those passed plain commerce, the Court on the merits of interfere with law and deemed the claim without tiff’s under international claim legitimate existing merit then doctrines. of warfare under “[A]cts (Emphasis added.) liability.” cannot made the of individual be basis Johnson, S., the Court cited Dow v. 100 U. S. 168 U. at 253. Indeed by 158, arising from officers the South a suit seizures American any during War, was without reliance on in which it held the Civil precluded making act that the of nations of state doctrine liability legitimate basis for after the cessation acts warfare a Surget, 594, held Ford v. 97 U. S. an officer of hostilities, damages prop Confederacy destruction immune from for the erty Co., during war. American Banana v. United Fruit Co. prohibition case often invoked the blanket 213 U. S. strongly imply suggest eases do not These even that woodenly would apply the Court the act state doc- grant trine enforcement act where the flagrant act a clear and violation of international law, was doctrine, only the act of state held that the antitrust did laws not by private foreign country extend to acts committed individual in a foreign government. language with the assistance of a Most response legislative jurisdic- in that case is in how to the issue of far presumed express tion should be extend in the absence of an dec- ordinary understandings laration. The Court held of sov- ereignty proposition warranted the conduct an American ordinarily adjudged citizen should under the law where acts ignoring occurred. Rather than law, the law of nations statutory was relied on for this rule of construction. directly point passed upon
More are the Mexican seizures Oetjen Co., v. Central 246 U. S. and Ricaud v. Amer- Leather Co., Oetjen plaintiff ican Metal In U. S. 304. claimed title property from during a Mexican owner who his was divested of expropriation the Mexican revolution. The terms of the are clear, appears promise compensation but that a made was revolutionary government and that was to only argu- be used for the war effort. The international law issue ably present treaty Hague in the case virtue was of a Convention, sig- to which both Mexico and the United States were natories, governing land; although war on customs of the Court did *38 treaty, point not rest the decision on the it took care to out that this probably treaty compelled seizure was lawful under the as a contri- occupying army. bution in time of war for the needs of the More- over, challenged the the Court stressed fact that the title was derived governing from a Mexican law the relations between the Mexican citizenship Government and Mexican Aside citizens. from the plaintiff’s predecessor title, property satisfy the in the seized was to revolutionary government an assessment of the which the Mexican pay. owner measure, had failed to It is doubtful that even as applied non-Mexicans, would constitute a violation of international Johnson, supra. law. Dow v. In Ricaud the titleholder was an American and the Court deemed this difference irrelevant “for the given” Oetjen. promise reasons in pay In Ricaud there was a during upon seized the revolution the cessation of Appeals have Court of Court District challenged herein. law respect in the Cuban found 2d aff’d, 307 F. 845. 375, Supp. F.
II. doc- law, of international principle Though not by this has its Court, as formulated restraint, trine of and it to these we must policy reasons, in sound roots act of state should whether the doctrine to decide turn exigencies meet created the revo- the seizure was to hostilities and provisions Hague permissible under the lution, was Oetjen. legality This declaration of considered Convention seizures, on the international rules of war Hague Convention, and allegation in Ricaud of an international law violation rendered sufficiently unneces- that consideration on the was frivolous so merits presented Shapleigh Mier, question 299 U. S. sary. The sole law, legality certain action under Mexican concerned the press question legality expressly under parties declined to language in case—“For And the Court’s law. along remedy the channels wrongs order the to be followed of that against background diplomacy” be read of an arbitral —must up compensation had been set to determine claims commission position Shapleigh, of which the in the the existence for claimants existence, Interna- well aware. tribunal is was Court “[A] Commission, established convention between tional Claims liberty Mexico, plaintiffs sub- to which the are at States and United long ago reparation.” S., submitted a claim for 299 U. mit and have at 471. ante, pp. 416-417, the opinion, cited in the Court’s
In the other cases involved; peripherally ap- doctrine was not even act of state Belmont, plicable in States v. 301 U. S. and United both United compact Pink, 203, was a between the States v. 315 U. S. United regarding the and Russia effect of Russian nationalization States seriously property located in the States. No one decrees on United precludes argued that the act of state doctrine reliance on a bi- compact dealing with the effect to afforded denied a national foreign act of state. *39 wrongs cognizable under interna-
be extended to cover tional law. said to an act of state,3
Whatever constitute our of decisions make clear the doctrine nonreview that affecting ordinarily applies tangible prop- laws erty territory a government located within recognized Oetjen is v. by the United States. Central Co., 297; Leather American Metal 246 U. S. Ricaud v. Co., 246 This judicially U. 304. fashioned doctrine of S. corollary ordinarily nonreview is a principle a prescribe governing state has rules jurisdiction the title within its territorial see sovereignty, Clarke, Clarke Vaughn S. De 186; 178 U. v. Hutchin- son, a principle U. S. reflected the conflict of laws rule, adopted virtually nations, all lex loci is governing property.4 the law title to This con- flict rule have enough would been in itself to have controlled the outcome of most act cases decided by this Court. Both of these rules rest on the deeply postulate imbedded in international law of the ter- ritorial supremacy of the postulate a that has sovereign,
3An act any governmental of state been said has to be act in which sovereign’s qua sovereign expression interest involved. “The ‘act of usually State’ denotes ‘an executive or administrative exercise of sovereign power by independent potentate, State or or its or his duly agents authorized or expression, however, officers.’ The obviously art, may, term of to, and it and is in fact often intended legislative judicial statute, include order, acts such as a decree or judgment superior Mann, Saerosanctity Court.” Foreign State, Q. (1943). Act of 59 L. Rev. 42 4 IV Rabel, The Comparative Conflict of Laws: A Study, 30-69 (1958); Ehrenzweig, Laws, (1962); (2d ed.) Conflict 607-633 Rest. (Tent. Conflict Laws, (1959)); Baade, 254a Draft 5 No. Indone § sian Foreign Nationalization Measures Reply, Before Courts —A (1960); Re, Foreign Am. J. Int’l Anglo-Amer L. 801 Confiscations Study (1951). ican Law—A Principle, of the “Rule of Decision” 49-50 *40 446 private pub- of touchstone characterized
been the act of state doctrine law.5 That lic international law concept of international a well-established rooted in countries. These of other practice is evidenced any doctrine, of act employing without countries, foreign acts states occur- respect afford substantial act of state confines.6 Our ring their territorial within Court, past formulated in decisions doctrine, as concept step pre- one further. It territorial carries validity foreign law on the challenge to the cludes ground repugnancy pub- of laws conflict ordinary that Against objection the forum. policy lic public policy, has been foreign act violates domestic the rule of foreign provides decision, said indicate, lex loci Ameri- rule would so where the Heyghen Freres can courts. Bernstein Van Societe v. (C. Cir.); 249 2d Holzer v. Anonyme, 163 F. 2d A. 246, Reichsbahn-Gesellschaft, Y. E. 474, 14 Deutsche 277 N. N. McCarthy Reichsbank, App. 2d 259 Div. 20 798; 1016, 2d 450, Y. 2d 284 N. Y. 31 N. E. 508. But 739, S. aff’d, N. App. cf. Sulyok Kozpont Budapest, v. Penzintezeti 279 5 Kaplan generally, Katzenbach, The Political Founda See Law, (1961); Herz, tions International International 135-172 (1959). Age, in the Atomic 58-62 Politics 6Anglo-Iranian Kaisha, Oil v. Idemitsu Kosan Kabushiki Co. Rep. [1953] 312 Int’l L. (High Rep. Ct. 305 Tokyo); (Dist. Anglo-Iranian Ct. Tokyo), aff’d, Oil Co. v. S. [1953] U. O. P. R. Int’l L. Co. v. S. U. P. Co., [1955] Int’l L. O. R. Rep. Co., 19 [1955] (Ct. of Venice Int’l L. Rep. 23, (1953)); 39-43 Anglo-Iranian (Civ. Ct. of Oil compare Verenigde Deli-Maatschapijen Rome); N. v. Deutsch- V. Tabak-Handelsgesellschaft (Bremen App.), Indonesische b. H. m. Ct. excerpts reprinted in Domke, Indonesian Nationalization Measures Foreign Courts, 305, (1960), Before Am. J. Int’l 313-314 with 54 L. Dig. Confiscation of 24, 25 (No. Property 12) (Amtsgericht of Sudeten Germans Dingolfing) Case, (discriminatory [1948] Ann. confiscatory decrees). Mining also West Central Gold See Rand Co. v. The King, [1905] 2 K. B. 391.
447 N. Y. 75, aff’d, 704, Div. N. Y. S. 2d N. E. 2d 604. See also Perutz v. Bohemian Discount Bank, N. Y. 110 N. E. 2d 7. 533, 537, the deference afforded to
The reasons underlie affecting property acting country acts in the are several; maintain a such deference reflects effort to stability predictability certain trans transnational *41 encourage to avoid friction between actions, nations, to through diplomatic settlement of means disputes these and to avoid interference with the executive control foreign To for a policy relations. adduce sound reasons of nonreview is not to problem hand, resolve the at but to delineate pertinent some the considerations that are to its resolution.
Contrary assumption to the underlying the Court’s strength these are opinion, relative, considerations their from case, varies case to they are no means con- trolling in all litigation involving of a public acts foreign government. abundantly This is made clear numerous in which validity foreign cases of a act of state is in question drawn and in which identical these present considerations are greater the same or a de- gree. American courts have denied recognition or effect foreign law, otherwise applicable under the conflict of laws rules of the forum, many foreign laws where these deeply laws are with policy inconsistent forum, notwithstanding that these laws political were of obvious and social importance acting to the country. For ex- ample, foreign confiscatory purporting decrees to divest corporations nationals and foreign sovereign of property located in the uniformly United States have 7 been denied effect in our courts, including this Court; 7 Moscow Fire Ins. Co. Bank York, 286, v. New 280 N. Y. 20 (1939), N. E. 2d 758 aff’d sub nom. United States v. Moscow Fire Co., 624; Vladikavkazsky Ins. 309 U. S. B. Co. New York v. Trust
448 rights recognize private property
courts continued within the corporations owning property United Russian recognized by long Government, the Russian after States had all such confiscated States, United depended.8 corporate identity the laws on rescinded customarily courts refuse Furthermore, our to enforce no since coun- penal state, laws revenue governmental inter- try obligation further has judgments And foreign sovereign.9 ests of a Co., Banque 456; Plesch v. Nationale de la 369, N. Y. N. E. 263 189 43, Republique D’Haiti, App. 224, aff’d, 2d 77 N. S. 298 273 Div. Y. Generale, 106; App. Bollack v. Societe 573, N. 81 N. E. 2d 263 Y. Passenger Cargo S. Latvian State S. 986; 601, N. 2d & Div. 33 Y. S. McGrath, App. 226, Line v. F. 2d 1000. 88 U. S. D. C. 188 8 Cir.) ; Miller, (C. Russian Ins. Co. v. F. A. 2d Second 297 404 Co., & Russian Ins. 248, E. James Co. Second v. 239 N. Y. 146 N. City Bank, 917; v. National 369; N. 145 N. E. Y. Sokoloff Bank, Merilaid & Co. v. Chase Nat’l 71 Y. S. Misc. N. A/S Compania Bacardi Bank (Sup. Y.). Ron 2d See Ct. N. also Scotia, (normal Supp. (D. Y.) Nova S. D. conflict 193 F. C. N. *42 recognition superseded by policy against laws rule national decrees). confiscatory Cuban
Similarly, it has been held nationalization of shares of a for- eign owning property corporation partnership or in the United States prior partners; will not affect the title of former or shareholders equitable rights deemed retain their in assets located owners are Co., Vladikavkazsky York Trust R. Co. v. New in the United States. occupant 369, belligerent of a N. 263 189 E. 456. The acts N. Y. friendly respect occupied nation in to contracts made within Aboitiz & Co. application our v. been denied in courts. nation have Compare Price, v. Zivnosten- Supp. (D. Utah). 99 F. 602 C. Werfel Banka, ska App. 747, 752, 1001, N. Y. 2d 260 Div. 23 1005. S. 9 Brasil, do affirmation of this doctrine in Banco See recent Commodity A., Co., Israel. holding S. action Brazil v. that an importer fraudulently circumventing against a New coffee York foreign regulations by exchange forging Brazilian documents New contrary public policy, notwithstanding York York was to New agreement, both the Bretton Woods to which the United States and
449
foreign
are
prima
denied conclusive or
facie effect
courts
on a
where
is based
statute
judgment
unenforceable
rendering
procedures
where the
court
forum,
markedly depart from our notions of fair procedure, and
generally
contrary
where
would be
enforcement
public policy
forum.10 These rules demonstrate
that our courts have never
bound to pay
been
unlimited
foreign
deference
state,
acts of
an act or
defined as
in which
sovereign’s governmental
interest
is in-
volved;
they simultaneously
proposi-
cast
on the
doubt
tion that
the additional
element
the case at bar, that
property may
within
have been
the territorial
con-
fines of Cuba when the expropriation
promul-
decree was
expresses
parties,
policy
exchange
Brazil are
favorable to such
laws.
12
371, 190
235,
denied,
N. Y. 2d
N. E. 2d
cert.
376
906.
U. S.
See also
Antelope,
66, 123; Huntington
Attrill,
Wheat.
10
v.
146 U. S.
Mitchell,
657;
Moore
600,
grounds,
v.
30 F. 2d
aff'd on other
281
18;
(Morris
Dicey,
U. S.
ed.,
1958), 667;
Conflict of Laws
7th ed.
Wolff,
(2d
Private
1950),
International Law
ed.
525.
10
Guyot,
Hilton
(lack
reciprocity
v.
159
U. S. 113
judgment
only prima
justice
renders the
facie
of the
evidence
plaintiff’s claim);
Export
cf. Venezuelan Meat
Co. v. United
States,
Dodge,
Supp.
(D.
Md.);
12
The W. Talbot
F.
379
C. D.
(D.
Y.) (fraud
F. 2d 459
D. N.
C. S.
a defense to the enforcement
Develop
Title Ins. & Trust Co. v. California
foreign judgments);
Co.,
ment
Ross,
Minero
173,
Banco
(fraud);
171 Cal.
450 regard- decree, to automatic deference the requires
gated, law.11 foreign act violates international of whether less III. proposi- thought with I be unassailable
I what to start obliged are to determine contro- our courts tions: 11 foreign attempts distinguish these acts to between The Court penal perhaps foreign revenue and other ground on that all presumed public irrebuttably invalid to avoid embar are laws foreign all some and that stemming from examination of acts rassment dis presumed reason. This expropriations valid for same are embarrassing why may refuse explain it be more to fails to tinction confiscatory directed at nationals recognition to an law extraterritorial to confiscating it be to refuse effect a terri state than would confiscatory confiscating state, viewpoint From torial law. beyond significant be as borders need to affect its And property within its borders. it would need to take title to as the sovereignty appear court notions for an American more offensiveto contrary foreign deny because it is deemed to enforcement of a deny morals, public to because justice, policy, than enforcement or say principles It will not do to of international law. property beyond jurisdiction title its foreign state has to affect no jurisdictional bases, citizenship, such in borders, since are other policy state, variably present. But for the forum doubtless ordinary foreign given under conflict of laws law would be effect Compare City Bank, principles. National 239 N. Y. Sokoloff (C. 917; Miller, 297 F. A. Second Russian Ins. Co. v. N. E. Cir.) Banka, App. 2d with v. Zivnostenska Div. Werfel N. 2d 1001. Y. S. foreign penal refusal to and tax laws enforce presumption validity judgments wholly is at odds with the doctrine; requirement of act enforcement under the acting political country clearly involved, realms of the are the enact- ing country large decision, has a stake in the and when enforcement country, jurisdictional enacting against nationals of the bases are present. difficult, conceptually otherwise, clearly Moreover, judgment distinguish where a secured between situation tax foreign country against country in the one who is at the time of presented court and judgment is to an American the situation where confiscatory sought be enforced in American decree is courts.
451 applicable in accordance with merits, versies on their bound part of law American courts are law; and that law. to administer III, 2,§
Article of the Constitution states that “[t]he judicial affecting Power shall extend to all Cases . . . Ambassadors, public Consuls; other Ministers and —to admiralty Jurisdiction; all Cases of and maritime —to Controversies . . . or Citizens State, between foreign And thereof, States, and or Subjects.” Citizens 1332 gives § of Judicial the courts jurisdiction Code over all actions and civil between citizens of a State or subjects states doc citizens thereof. The trine the law of is a part nations law of the originally land, England brought formulated in and part America as of our legal is reflected heritage, 12 during debates the Constitutional Convention and in again Constitution Court itself.13 This and has time 12 applica For contemplated the extent to which the Framers tion of international law in courts American and their concern that body uniformly courts, of law be administered in the see federal 3, 22, by Jay (Bourne The 1947, I); Federalist: No. at John ed. Book 80, 114; 83, 144, by No. at 112 and 82, No. at and No. Alexander (Bourne II); 1947, 42, by Hamilton ed. Book No. Madison James (Bourne 1947, I). Book ed. Jefferson, speaking Secretary Thomas as wrote State, Genet, Minister, M. French in 1793: “The law of makes nations integral part Digest ... the laws of the Moore, land.” I (1906), opinion Attorney Law International 10. And see the Gen- Randolph given eral nations, although spe- in 1792: “The law cially adopted any municipal essentially act, constitution or part Atty. Op. of the of the 1 law land.” Gen. 27. see War- Also ren, Making Constitution, II, I, 116; The Pt. Madison’s c. at 21, 244, Notes in 1 22, generally Farrand See Dickinson, 316. States,
Law of as Part Nations of the National Law of the United (1952). 101 U. of L. Rev. Pa. implemented This intention was reflected and in the Articles of I, 8, empowers Congress the Constitution. Article define § “[t]o punish high Seas, and on Piracies Felonies committed em understanding Framers, clear effectuated the the law nations applying Constitution, in the bodied in The As stated cases controversies.14 to resolve Habana, S. Paquete U. “[international *45 2, against III, Article extends the the Law of Nations.” § Offences Equity, arising judicial Cases, in Law under this power "to all and States, made, or Constitution, Laws of the United and Treaties Authority; affecting made, under their all Cases which shall be —to Consuls; all of Ambassadors, public Cases other Ministers and —to Jurisdiction; admiralty to which the and Controversies maritime —to Party; two or be a Controversies between States shall United —to State;— States; of and another a State Citizens more —between States; of Citizens the same of different between Citizens —between States, claiming of different and between a Lands under Grants State foreign States, thereof, Citizens or State, or the Citizens and Subjects.” Jay Georgia early v. 1793, Chief Justice stated in Chisholm As as period Constitution], “Prior to that date of ... [the earth, by taking place among had, States the nations United 419, 2 Dali. at 474. And to the law of nations.” become amenable Hylton: 1796, Justice Wilson stated in Ware v. “When United they independence, were bound to receive the declared their States purity nations, in modern state of and refinement.” 3 Dali. law of its explicit Marshall even more 199, at 281. Chief Justice was Nereide, when he said: any apply Spain government to rule re-
“If be the will of the to supposed apply govern- captures us, the specting Spain is by passing purpose. an act for the .Till ment will manifest that will by passed, the is bound of nations which such an act be Court law part of of the land.” 9 Cranch at 423. the law Congress would on As to the effect such an Act of have international Congress ought Act never be law, the has ruled that an of Court any possible if other construc- construed violate law nations States, (1913). MacLeod United 229 U. S. tion remains. Guyot: well in Hilton v. As was stated law, comprehensive widest and most sense— “International in its right nations, governed by including only questions not between nations; appropriately but also has been called the law what usually private questions arising under what is called concerning rights persons laws, within law, or the conflict of and and must be ascertained and adminis part law, of our appropriate by justice jurisdiction, courts of tered duly right depending upon as it are questions often of inter presented Principles for their determination.” applied national in our courts to resolve have been merely they provide controversies because a conven they represent ient rule for decision but con because on among proper ordering sensus civilized nations relations between nations the citizens thereof. Fun litigants damental fairness to as well as the interest stability of relationships preservation of reasonable expectations call for application their whenever interna tional controlling law is in a case or controversy.15 territory private and dominion of one nation, acts, reason of public, part done within the dominions of another nation —is law, our must ascertained and administered the courts of *46 justice, questions presented as litigation often as such are in between man, duly man and submitted to their determination. guide, doubt,
“The most ques certain no for the decision of such treaty country. tions is when, a or a statute of this But is the here, upon duty case there is no subject, written law still rests upon judicial ascertaining declaring tribunals of what the is, necessary so, law whenever it becomes to do in order to determine rights parties regularly brought to suits doing before them. In this, they judicial the courts must obtain such aid as can from deci jurists sions, from the works of and commentators, and from the acts usages (1895). 113, of civilized nations.” 159 U. S. 163 explicitly For principle other cases which invoke that interna part see, example: tional law is a of the land, law of the Talbot Janson, 133, 161; Respublica Longchamps, v. 3 Dall. De 1 v. Dall. States, 111, 116; Rapid, 155, 162; 8 Cranch Fremont United 557; Arjona, 17 How. United States v. S.U. 479.
15Among others, upon international law been relied in cases has concerning acquisition territory, and control of Jones v. United 1; States, 202; States, 137 U. S. Mormon Church v. United 136 U. S. States, 138; boundary Dorr v. S. United U. resolution of dis putes, Illinois, 1; Tennessee, Iowa v. 147 U. S. Arkansas v. 246 U. S. 158; questions Wong nationality, Ark, United States v. Kim 649; Inglis Snug Harbour, U. S. v. The Trustees the Sailor’s 3 Pet. just resolution law to of international
The relevance of international impact from the apparent is of this case controversy. Indeed it aspects other law on rules to of international application only because doctrine becomes of state that the act other issues resolve rule The basic in this case. issue the determinative law proper is the law of the situs forums, determining title other applied to be law or international private styled rule whether concepts firmly em- rooted conflict of law, domestic sovereignty. on territorial in a consensus of nations bedded conflict of laws rule and the Without such consensus decree of whether Cuba’s therefrom, question derived of international against the norms can be measured pre- since then a court litigation, never arise in this would governing its own rules sumably apply would be free property. Furthermore, of title to acquisition sugar question contention that the was within the terri- torial confines of Cuba when the Cuban decree was widely accepted principles on of inter- enacted itself rests national law, bays contiguous or inlets namely, to a country are within its and that boundaries territorial jurisdiction beyond extends at least three miles these boundaries. See Oppenheim, International Law, §§ 190-191 (Lauterpacht, 1955). 8th ed. Without these rules derived from law, this confiscation could be characterized as extraterritorial and therefore— *47 unless the Court also change intends to this rule-—sub- ject public to the policy traditionally test applied to extra- takings territorial though property, embarrassing even to Further, response affairs. in to the contention 99; principles neutrality of war and private rights, their effect on Steamship Appam, The Johnson, Dow v. 124; 243 U. S. 100 U. S. Surget, Ford v. 158; 594; private property 97 U. rights gen S. Exchange McFaddon, Schooner erally, 7 Cranch United 116; v. Percheman, States 7 Pet. 51. Whit- to already passed Farr, had sugar to the title when A. with C. the contract Y.
lock virtue below was held it effect, took decree nationalization countries” to civilized common merchant “the law under title acquire not could Whitlock Farr, supplied) (emphasis York. in was made New payment until shipment to the only litigation posed in this central issue Thus the law of applications other because of numerous respect therefrom rules derived nations and domestic in the legal issues controlling, but otherwise subsidiary, controversy. of interna- of rules application accepts
The Court accepts litigation, of this aspects tional law to other an- cases and law in other of international relevance “con- degree of appropriate that when there is nounces law, area of international concerning particular sensus deci- to render judiciary is for appropriate the more can then on the since the courts focus regarding it, sions of fact to circumstances agreed principle of an application prin- establishing on the sensitive task rather than or with with the national interest ciple not inconsistent Ante, then, p. 428. The Court justice.” obligation with its lightly my dispenses rather view, in accordance with “international resolve controversies assuming and de- “national interest” justice” agreement no na- claring that there are areas of between not be. There respect expropriations. tions fails to critical which the Court examination, But without confiscatory I would not conclude that tak- provide, another ing against which discriminates nationals of coun- country against government of that retaliate try within that of issues in international area falls I Nor would opinion to be so divided.” “on seems im- necessarily ironclad assume, as the rule the Court among likely a consensus plies, that there is to be example upon illegality nations area, discriminatory takings upon race, of alien based
456 I of all would not nationality.16 or But most religion if in the that even there were clear consensus declare eyes community, the courts must close their transgression by to a act and render- lawless validate request. for the state at its own ing judgment This is an unfortunate declaration for this to make. Court from wholly premise It inconsistent with the is, course, it, under banishment of inter- starts, and, the Court final in complete national law from the courts is cases cavalierly ignore obligations this. I cannot so like justice litigants before it.17 dispense court to 16“[Discriminatory hatred, against or laws enacted out of aliens against persons any particular category against persons race or or belonging specified political groups social or . . . run counter to internationally accepted principle equality of individuals priation before the law.” Int’l L. Rep. 23, In International Law Anglo-Iranian (Civ. Ct. of Oil Co. (1953), Rome); v. S. 189-192; see also U. O. P. R. Friedman, Expro Wortley, Expro Co., [1955] priation Law, (1959); Cheng, In Public International 120-121 Compensation Expropriation, The Rationale of 44 Grotius So ciety 267, 281, (1959); Seidl-Hohenveldern, Title to Confiscated Foreign Property Law, Int’l and Public International 56 Am. J. L. (1962). 509-510 only opinion In the reference the Court’s between fairness disputes litigants, obligation justly, ante, and a court’s to resolve p. quickly disposes assuming the Court of this consideration typical original that the act of state case between an owner and unjust purchaser, pur an “innocent” so that it is not to leave the by applying chaser’s title undisturbed the act of state doctrine. assumption wholly inapplicable Beside the obvious fact that this foreign sovereign agent to the case where the itself or its seeks to have its title validated our courts —the case at bar —it is far from apparent represent original that most cases suits between the owner purchaser. purchaser and an innocent of a “innocence” who buys goods government knowledge possession from a with apparent patently title was derived from an act inter violation of highly questionable. fundamentally, national law is More doctrines designed protect pur of commercial law the title of a fide bona question upon chaser can serve to resolve this without reliance a broad presumption validity. irrebuttable
IV. on tradi they based as are nonreview, The reasons lose much of sovereignty, territorial concepts tional to be a foreign act of state is shown their force when All exercises of legitimate of international law. violation should otherwise, or sovereign whether territorial power, law, consistently with rules of international be exercised mark of lawful including those rules which the bounds located against property action aliens or their state Al foreign within the territorial confines state. may validity though reasonably expect state that the will operating jurisdiction its laws on within its public policy not be defined local notions of of numer (although ous other states a different well situation presented when of another state are asked to be courts foreign machinery lend their to effectuate the enforcement ), impunity ignore gov cannot with rules act all erning expect the conduct of nations and that other nations and tribunals will its acts as within the view permissible scope sovereignty. of territorial Contrari inquiry question to refuse into the of whether norms wise, community the international been contravened have by the act of under deny review would seem to purport of such a view seems norms, existence with ordering inconsistent the role of international law in impartial the relations between nations. Finally, application only of international law would be an not presented by Another situation was also the Nazi decrees chal in the Bernstein lenged litigation; religious expro these racial and priations, involving while nationals of the state and therefore customarily cognizable law, under international had been con agreements demned multinational and declarations as crimes against humanity. The acts could thus be measured local courts against widely principle judged by parochial held rather than views of the forum. binding and effect of inter
affirmation existence but also a refutation of the notion national rules order, of no body that this consists more than the diver gent parochial capital importing views of free-enterprise exporting nations, socialist nations. puts
The these considerations to with Court rest assumption that the decisions of the courts “of the major capital exporting country world's and principal exponent enterprise system” hardly free would accepted impartial expressions legal sound principle. if assumption, apply any prob- would other sound, *50 arising lem from transactions that cross state lines and is excusing tantamount to a declaration any this Court from consequential future in appli- role the clarification and of City cation international law. National See Bank of New Republic China, York v. S. 363. This U. ignores declaration the historic which role this Court and other American played applying courts have and main- taining principles of international law.
Of course, many there are unsettled areas of inter- law, national as there are domestic law, and these present areas problems of accommodating sensitive interests of nations divergent that subscribe to economic and political systems. may It be certain national- izations of for a public purpose fall within this area. it Also, be that domestic courts, compared to international or arbitral tribunals, commissions, have a different and play less active to role formulating new rules of international law or in choosing between rules yet not by any adhered to substantial group of nations. Where a clear violation of international law is not demon- I would agree that strated, principles of comity underly- ing the act of state doctrine warrant recognition and foreign enforcement act. But none of these consid- erations relieve a obligation court of the to make an of them act, none foreign validity into the inquiry The all. vice inquiry of no at a flat rule warrant and the Court by as formulated act of state doctrine alleged only is not the decree case, where applied and retaliatory discrimina- also confiscatory but flagrant to be a courts has found two and been tory any precludes is that law, of international violation on whether any decision proscribes examination such accepted principle contravenes an Law Cuban No. international law. challenged act reviewing objections
The other with the execu- alleged for the interference herein, save substance, without foreign seem affairs, tive’s conduct of facts of the instant applied and as to the theory both in amount of stabil- of minimum case. The achievement in international commercial trans- predictability ity nonreviewability which actions is assured rule foreign regardless of its any state, act of permits in the validity pass under international muster law, of a very courts of states. act other against which contravenes rules aliens support of which foster law, purpose can at odds with the upon people order rely, stability and in interna- predictability achievement of And infrequency *51 tional transactions. cases involving acts of chal- foreign American courts state law no lenged as invalid under international furnishes all treating unimportant basis at for the matter as erecting today.19 for the rule the Court announces exception argues The Court that an international to the act law, of state doctrine would fail to deter violations of international judicial sporadic. would at since intervention best be At the same contradictory assumption impact time, proceeding as to on a argues exception exception, such an the Court that the would render upset the flow trade. titles uncertain and of international The Court attempts distinguishing to reconcile these conclusions between is also that the act of There the contention disputes through doctrine serves to channel these processes designed rectify wrongs of an international Oetjen Co., magnitude, supra; see v. Central Leather Mier, Shapleigh supra. doctrine, The result of the it is said, requires through alien to seek relief in the courts expropriating executive of the to seek relief country, through diplomatic country channels of his own and to seek review an international tribunal. are fac- These tors an American court should consider when asked to foreign examine act of although availability state, and effectiveness of these modes of accommodation more illusory often be than real. Where alternative modes are available and likely are to be our effective, might courts stay well their hand and a litigant direct or attempt exhaust to utilize them adjudicating before validity foreign act of possi- state. But the bility of alternative remedies, without frail sup- is more, port for a rule of automatic deference to act all cases. The peculiarly Court’s rule inappropriate in the instant no case, argued where one has that C. A. V. can obtain relief in the courts of Cuba, where the United States has diplomatic broken off relations with Cuba, and “direct” impacts and “indirect” of a invalidity, declaration of assuming exporting only nation need buyers find other products its price. at the same point From export- of view of the ing nation, the distinction between impact indirect and direct meaningless, assumption and the facile buyers that other at the same price are available and the further assumption unstated purchase price only pertinent is the consideration exporting country to the are oversimplified based on an view of international trade.
There is no evidence that either the absence of an act of state doc- European trine in the law of numerous uncertainty countries or the question of our own law on today’s until decision has worked with havoc titles in presented commerce or the nice questions 39, ante, p. 434, the Court sets out on n. or has substantially affected the flow of international commerce. *52 although
where the States, protesting illegal- United ity of decrees, sought the Cuban has not any institute against action in an Cuba tribunal.
V. There remains for consideration relationship be- tween the act of state doctrine and the power of the executive over matters touching upon foreign affairs urged the Nation. It the act state doctrine is a necessary corollary of the authority executive’s foreign direct relations of the United States accordingly any exception in the if doctrine, even limited to clear violations of international would law, impede or embarrass the executive in discharging his constitutional responsibilities. Thus, according to the even if Court, principles comity do not preclude inquiry into the validity foreign of a act under international due re- law, gard for the executive function forbids such examination in the courts.
Without
political
doubt
matters in the realm of foreign
affairs are within the exclusive domain of the Executive
as, for
Branch,
issues for which
example,
there are no
available standards or which are textually
committed
the Constitution to the executive.20 But
is far from
saying that the Constitution
vests
the executive exclu-
sive absolute control of foreign affairs or that
validity
of a foreign act of state
necessarily
a political question.
International
law, well as a treaty
agree-
executive
20These
foreign
issues include whether a
recog
state exists or is
nized
Gelston v. Hoyt,
States,
the United
246;
3 Wheat.
Sapphire,
164, 168;
foreign
Wall.
the status that a
state or its
representatives
country
shall
(sovereign
have in this
immunity), Ex
parte Muir,
parte
Peru,
Ex
522;
U. S.
578;
318 U. S.
the terri
torial
States,
Jones v. United
state,
boundaries of a
137 U. S.
202;
representatives
and the authorization of its
for state-to-state
parte Hitz,
Ex
negotiation,
Baiz,
In re
766;
U. S.
Soon Cuban No. Department of the delivered a the State United States protest declaring note of to the Cuban Government law to nationalization be violation of international law.21 ques- Since the nationalization Government the United States considers this law “[T]he manifestly principles in violation of those of long accepted by which have been the free countries of the West. It discriminatory, arbitrary confiscatory.” is in its essence Press 397, Dept. State, July 16, Release No. 1960. diplomatic broken off relations States has
tion, United response And in of Cuba. present with the Government respondent in the instant by counsel for the inquiries alleged Department officials of the State nowhere case, validity of the Cuban decree adjudication with nationalizing A. would embarrass our relations C. V. In on an international level. impede Cuba or settlement order Government issued freeze United States On on all assets located in the States. Cuban United *54 we although there others of which these facts — that wholly are not aware —it is unwarranted to assume Law and validity examination of of Cuban No. 851 the finding invalidity upon a of would intrude relations the between the States and Cuba. United
But spectre pos- the Court is moved the of another sibility; validity it is that an examination of of said the finding law in this a might Cuban case lead to that in widely accepted the Act is not violation of interna- tional norms or adjudication require that an here would a similar examination in other difficult in one more cases, of which would foreign be found that law not in of breach international law. The either finding, this case or subsequent ones, foreign that act does not widely accepted might violate international principles, differ from the executive’s view of the and interna- act law, might thereby seriously tional impede the execu- in negotiating tive’s functions of con- settlement troversy and would therefore be inconsistent with the national very expression interest. of judicial “[T]he decree, United States Ambassador to condemned Cuba this stating Ministry Foreign to the Cuban of Relations: my express
“Under government, instructions from I wish to Excellency indignant protest my government against Your of this upon legitimate rights resolution and its effects which American acquired citizens have under the laws Cuba and under Interna Dept. Aug. tional Law.” Press State, Release No. 1960. Execu- to the embarrassment uncertainty might provide founded Ante, speculations, 433. These p. Branch.” tive diplo- on judicial of a decision impact supposed on the view contrary to the Court’s relations, seem matic make country to by this weapons possessed arsenal powers “ample and [of foreign investment secure ante, p. 436, compensation,” effect political branches] limited com- of the with its view wholly inconsistent area of knowledge judiciary petence Moreover, expression diplomacy. affairs and under the is inevitable uncertainty feared the Court by the ex-cathedra exemplified as is well approach, Court’s premising case. While pronouncements the instant uncertainty par- on whether a expression judicial law would be em- violates international clearly ticular act very in this barrassing executive, Court, case, underpinning as an its decision “[t]here announces today on which any if issues are few on a divided as the limitations opinion to be so seems aliens,” power expropriate State’s of international to demonstrate the absence proceeds *55 divergent of the by cataloguing the views standards nations, “capital exporting,” enterprise” “free and underdeveloped countries,” and “newly independent countries” toward both the issue of of the “Communist generally. and international law The act expropriation bars review in formulated the Court state doctrine involving expropria- in all this and will do others case so precisely because of lack of tion of alien the community international on consensus the rules foreign governing expropriations.22 Contrariwise, law saying governing The Court disclaims that there is no interna area, only but that the matter is not meet for tional standard adjudication. Ante, p. 429, n. 26. But since the Court’s view is that only divergent dif there are of nations that subscribe to views ideologies practical goals "expropriations,” ferent on the matter apply will that of state doctrine not would seem the act in which there is foreign act if it concerns area to a ante, which is among p. 428, agreement nations, unusual I expropriations.23 not the case with the broad area saying from greater fail to see how flows embarrassment widely foreign does not violate clear and act accepted principles saying, of international law than from validation are does, as the Court that nonexamination and required widely no accepted principles because there are subject foreign potential to which to act.24 toAs adjudication, according Court, is not meet for to the because of any agreement among governing expro lack of nations on standards e., area, only priations, i. there in this but is no international law political political views branches of the various nations. might support These find in the authorities assertions much more relied on the Court and others if the issue under discussion was clearly category expropriation—but discrete not the undefined — adequate compensation. credulity It strains issue of and effective accept newly spokes- proposition emerging or their nations responsibility reject men denounce all rules of international state — reject regard foreign generally- nationals than —-rather adequate, requiring prompt, traditional rule of international law compensation. effective implication opinion: There is another in the Court’s the act applies only expropriations, doctrine because of the to all among any lack of a consensus nations on but because standards validity practical issue under law “touches . the . . community ideological goals of the various members of the something If this other than that there nations.” statement means agreement governing expropriations, on no international standards applies important it must because the issue mean that doctrine means, politically foreign to the state. If this is what the Court expanded unprecedented scope. been act of state doctrine has subject challenge foreign No act is where the nation dem practical ideological is in of its onstrates that the act furtherance *56 goals. foreign What acts would not so characterized? light foreign of “a refusal of courts to consider acts State merely not . . a neutral doctrine ab- of the law of nations is . of contrary the effect of such a doctrine to lend stention. On the is as to deter- semantic, is but embarrassment, the difference upholding to a merits and as issue on its mining law, is vast. the difference regime to of embarrassment possibility a further is There validity ap- presumption from the blanket executive all the Court foreign expropriations, plicable is far my view, more which, and ignore, chooses That em- by those adduced the Court. than self-evident all requirement courts, stems from the barrassment any and approve, enforce including Court, validate, this at the behest foreign expropriating property, act regardless of whether the private suitor, or foreign state against aliens on the basis arbitrarily act discriminates posi- and religion, regardless or race, nationality, act. I respect tion executive has taken by that an adjudication would think Court foreign act, protesting as to which the is and executive citizens, is attempting to secure relief American valid beyond question enforcible in the courts prove embarrassing to States would indeed United many Branch of our Government in situations, Executive invalidity so than a much more declaration re- adjudicate controversy For the fusal at all. like- lihood that validation enforcement of act which is will condemned the executive be inconsistent policy goals with national as well as the of the interna- great.25 tional community precisely This result protection courts, police governmental full of the United States agencies contrary to commercial transactions which are to the minimum standard of civilized conduct The Associa- City York, tion of the Bar of the of New on Committee International Law, A Reconsideration of the Act of In State Doctrine United (1959), States Courts 8. rigid embarrassment results from a rule act That immunity judicial is well demonstrated enforcement of Ger pronouncements by man racial decrees after the war. The United beyond question courts that these decrees vest title wholly States was
467 to notwithstanding protestations its Court, because “an inflexible laid down ante, has p. 428, contrary, 26 in this case.” all-encompassing rule and VI. of the cases where examination
Obviously are there validity might invalidity or foreign act and declaration of representa- embodied policy, with the executive’s official at odds through property racial governments, that taken tions to other original to the should be returned the Nazi Government decrees Compare subject reparation state- claims. owners and thus not Dept. Secretary Marshall, reprinted in State 16 ments of State Heyghen Freres (1947), Bernstein v. Van Societe Bull. 793 with Cir.). embarrassing diver- Anonyme, (C. 2d This 163 2d 246 A. F. only governmental opinion the executive gence was eliminated after requested adjudicate on the courts to the matter intervened and Stoomvaart- Nederlandsche-Amerikaansche the merits. Bernstein v. (C. Cir.). Maatschappij, F. 2d A. 2d per that rules It is difficult to reconcile the Court’s statement taining expropriations unsettled unclear with the Court’s are or proper making any pronounced to avoid statements on desire accepted principles law, lest it embarrass of international the. respect particular executive, may view in to this who have a different expropriating country. expropriation particular Is not the or this expro limitation of the act of state doctrine to the area of Court’s uncertainty fluidity governing priations upon —based may prove embarrassing to be law in this area —an admission very line-drawing And to the executive at some later date ? potentially disruptive stresses of the executive’s conduct the Court foreign approach, is inevitable under the Court’s since affairs subsequent involving expropriations require us will cases applies standard determine if the act of state doctrine and the Court’s strength clarity principles is the of the of international clarity thought govern Again the issue. our view of the of these they really principles rules of interna and the extent to which are Department tional law not be identical with the views of the establishing These of the inherent difficulties of State. are some possible speculations about but unidentified rule of law on the basis of the executive at some unknown and unknowable embarrassment to future date. foreign policy
undermine of the Executive Branch attempts negotiating its at for a settlement nation- alization of Americans. respect ordi- narily to a state, due as reflected the decisions of this rests upon to disturb rela- Court, desire not *58 tions and between countries on a view that other means, more piecemeal effective than adjudications claims a arising large-scale out of program nationalization settling the dispute, may Precisely be available. because these considerations are or more less or absent, present, any given situation and Department because the of our primarily Government responsible for the formulation foreign policy settling these matters on a state-to- state basis is competent more than courts to determine the to which they extent are involved, a blanket presumption nonreview each case is inappropriate and a require- ment that Department the State render determination after reasonable notice, each is case, necessary. Such an permit examination would Department to evaluate whether adjudication would “vex peace of nations,” friendly whether foreign sovereign is involved, whether through settlement diplomacy through or an tribunal arbitration impending. upon Based such an evaluation, Department may recommend to the court adjudication that should not proceed present at time. Such a request I would accord considerable I deference would require not a full statement underlying reasons it. But I reject contention the recommendation itself would impede somehow relations of the United States or unduly Department. burden the The Court notes that domestic consequences might “[a]dverse flow from an official stand,” which I take it to mean that it might politically embarrassing on the domestic front Department interpose State to an objection public in a case which has attracted attention. particular take Department But an official stand is what the must under the so-called Bernstein exception, which the Court Assuming there is a dif- disapprove. declines to express ference official examina- objection between tion and executive’s refusal to relieve court from “the any upon jurisdiction,” constraint the exercise of its it fair to allow a litigant the fate of to turn on the possible political Department embarrassment encourage State and is not this Court’s role to or require by bottoming nonexamination of law on rule the domes- tic public relations of Department of State. The rejects procedure Court also because it makes the examination of validity turn on an guess by educated executive as to probable guess might result and such a turn out to be erroneous. The United States in its brief has any disclaimed such interest the result in these either in cases, the ultimate outcome or the determina- *59 tion of and I would take the validity, at Government its in word this without matter, second-guessing the wisdom of its view.
This precisely procedure the Department the adopted State in voluntarily the situation where a foreign government seeks to the im- invoke defense munity in our courts.27 If it is not unduly disruptive for
27 procedure was instituted as far back as The Schooner Ex change McFaddon, 7 Cranch (1812), when a United States Attorney, on the initiative of Branch, the Executive entered an appearance involving in a case immunity the foreign vessel, of a parte was further Muir, defined in Ex (1921), U. S. when request the Court stated that the foreign the suitor to the department executive acceptable anwas and well-established man interposing ner immunity. procedure a claim of Under the out lined in contesting parties Muir each of the immunity raise the by obtaining issue an official statement from the Department, State by encouraging or appropriate executive to set forth suggestions to a certifi- whether issue to determine Department itself when it foreign government immunity to cate in cases Department a recommendation one, seeks hardly can sovereign party is not a generally the where More- foreign relations. embarrassing to our be deemed with the obli- would be consonant procedure over, such except on the merits cases gation adjudicate of courts to case. As particular in the wholly sufficient for reasons ad- yet not said that has it, I the executive understand functions impede'his case would judication adopt a rule of law he has asked us premises; rather subject.unless into the the executive foreclosing inquiry on the affirmatively adjudicate the courts allows merits. act of state requested apply
Where the courts are it does at the behest of the State Department, doctrine proceed adjudicate follow that courts are to not foreign examining validity the action without con- foreign law. The relations act under potential of embarrassment to the execu- siderations act and in the foreign inhere in examination tive following from such an not in the examination, result Department all matter of who wins. State Thus, foreign legitimately request can is nonexamination of the proper authority having act. It has no interest or controversy upon anything less than all courts decide law or to with applicable decide it accordance comports the executive’s view of the outcome that best day. with affairs of domestic We are dealing here with those cases where a court refuses *60 foreign against to a public policy statute of the measure against foreign forum the fundamental law of the Compania Espanola through Attorney to the Court General. See Navegacion Maritima, A., Navemar, de S. The S.U. 74. generally Dickinson, See The Law of As Nations National Law: Questions,” (1956). “Political 104 U. of Pa. L. Rev. 470-475 act created judicially cases In those itself. laws rules the conflict aspect is an state doctrine But controlling. law foreign and renders the forum prin- law under examine to a court refuses where do, to required it is law, ciples court, requests the Branch Executive solely because con- deciding the from to abstain reasons, own for its in my view, then the controversy, trolling issue law of the realm case from the has removed the executive pro- to decline a court must politics, realm to the stay the is to disposition proper The with the case. ceed adjudication an permit until circumstances proceedings within adjudication action where or to dismiss otherwise To do feasible. not seem time does reasonable courts obligation of with the in accordance would not be with the accordance justly controversies to decide to the case. applicable would at bar abstention in the case argued that It is from the proceeds possession A. V. to retain allow C. owners deprived encourage wrongfully would sugar and in order to “self-help” conduct or in devious engage to into from it deriving title sovereign or one compel to this short answer plaintiff. position of the documents negotiation begs question; proceeds and retention Whitlock by Farr, title only if, acquired Cuba if, is unlawful but C. A. V. nationalization decree. by virtue of the shipment in the case if cannot be decided issue that This is the Department’s recommendation to the State deference a recommenda- for the moment that such paid (assuming “self-help,” made). apparent is it tion has been Nor refusing recognize form of deemed, it be if such disruptive force is paramount from unlawful title derived international order. Fur- contrary peaceful of or disposal pre- at its ample has means thermore, court engaged wrongful conduct from who has party vent a *61 setting up defenses which would allow him profit from wrongdoing. Where the act of state doctrine becomes a rule of judicial abstention rather than a rule of decision for the courts, proper disposition is dismissal of the complaint or staying litigation lifted, until the bar is regardless of possession who has title which is dispute.
VII. The position of the Executive Branch of the Govern- charged ment with with respect affairs to this case is not entirely clear. IAs specific see no objection Secretary of State to examination of validity of Cuba’s law has been interposed any stage at in these which proceedings, would ordinarily lead to an adjudica- tion on the merits. Disclaiming, rightfully, I any think, interest in the outcome case, the United States has simply argued for a rule of in every nonexamination case, I literally, suppose, includes this my one. If view had prevailed I would stayed have further resolution of the issues in this Court to afford Department of State reasonable time clarify its in light views opinion. In the specific absence of a objection to an examination of the validity of Cuba’s law under international I law, would proceeded have to determine the issue resolve litigation on the merits. Notes might is, course, influence It true that such determinations bring expropriated property country, pp. to into the see others not impact might beyond 433-434, infra, their indirect extend so of title. actual invalidations likely give offense invalid, often be declared volved were of terri- country; concept since expropriating any resent sovereignty deep seated, is so torial sovereign accord of another of the courts the refusal borders. Piecemeal acts within its territorial validity to involving probability sort dispositions of this seriously interfere with another state could affront Executive Branch being carried on negotiations the terms of might prevent or render favorable less reached. Rela- that could otherwise be agreement in similar engaged third countries which have tions with would not immune from expropriations be effect. regardless dangers adjudication present of such are Department the State as did has, whether asserted that the act violated international relevant case, negotia- If Executive Branch has undertaken law. expropriating with an but has tions refrained country, claims of violation of the law of a deter- nations, from aby might regarded mination to court that effect