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Under the Act of State Doctrine, U.S. courts refrain from evaluating the validity of the acts of a sovereign state made in that state’s territory.  The party asserting the Act of State Doctrine bears the burden of proving its applicability.  The Doctrine applies to “official” or “public” acts of a sovereign, such as the passage of laws, decrees, creation of government agencies, military actions, police actions, etc., that are both official and governmental in nature.

There are three general considerations noted by the U.S. Supreme Court when deciding whether to apply the Act of State Doctrine to bar claims against a sovereign state.  First, the greater the degree of codification or consensus concerning a particular area of international law, the more appropriate it is for the judiciary to render decisions and not apply the Act of State doctrine.  Second, the less important the implications of an issue are for U.S. foreign relations, the weaker the justification for exclusivity in the political branches under the Act of State Doctrine.  Third, if the government that perpetrated the challenged act of state is no longer in existence, the Act of State Doctrine will not be applied.  Banco Nacional de Cuba v. Sabbatino, 376 U.S. 398, 428, 84 S.Ct. 923, 11 L.Ed.2d 804 (1964).  In addition to the foregoing three factors, the Ninth Circuit has also noted a fourth factor – whether the foreign state was acting in the public interest.  Liu v. Republic of China, 892 F.2d 1419, 1432 (9th Cir. 1989).

Numerous cases have rejected efforts by sovereign states to attempt to invoke the Act of State Doctrine in a variety of contexts and for a variety of reasons.  Here are a few examples:

  • The Federal Arbitration Act expressly provides that enforcement of arbitration agreements shall not be refused on the basis of the Act of State doctrine.  9 U.S.C.A. § 15.
  • Isolated acts of an official may not be official acts depending on whether the official was authorized to act for and bind the state.  Riggs Nat’l Corp. v. Comm’ner of IRS, 163 F.3d 1363, 1368 (D.C. Cir. 1999) (doctrine not applicable to interpretation of law by an official); Alfred Dunhill v. Cuba, 425 U.S. 682, 694 (1976) (doctrine not applicable to official’s repudiation of a debt); Cruz v. U.S., 387 F.Supp.2d 1057, 1068 (N.D. Cal. 2005) (doctrine not applicable to government’s retention of savings funds of participants in workers program created during and after WWII); Monolithic Power Systems, Inc. v. O2 Micro Int’l Ltd., 2006 WL 2975587, *4 (N.D. Cal. Oct 18, 2006) (doctrine not applicable to granting of patents); Marinduque v. Placer Dome, Inc., 582 F.3d 1083, 1089 (9th Cir. 2009) (doctrine not applicable where governmental actions are collateral to claims in complaint).
  • The Act of State Doctrine does not apply to actions of states that are no longer in existence.  de Csepel v. Hungary, 2011 WL 3855862, *23 (D.D.C.  Sept. 1, 2011).

Act of State doctrine does not generally apply to claims concerning alleged expropriations in violation of international law.  22 U.S.C. § 2370(e)(2).

However, some courts have held that actions that are primarily commercial in nature are excepted from the Act of State Doctrine, but this is still an open issue in some circuits.  In re Transpacific Passenger Air Transp. Antitrust Litigation, 2011 WL 1753738, *17-18 (N.D. Cal. May 9, 2011) (actions of state-owned airlines do not necessarily constitute acts of state); cf. Clayco Petroleum Corp. v. OPEC, 712 F.2d 404, 408 (9th Cir. 1983) (9th Circuit has not definitively ruled on the commercial exception); U.S. v. Giffen, 326 F.Supp.2d 497, 503 (S.D.N.Y. 2004) (commercial actions are not immune under the act of state doctrine); Oceanic Exploration Co. v. ConocoPhillips, Inc., 2006 WL 2711527, *9-10 (D.D.C. Sept. 21, 2006) (balancing approach when commercial conduct is involved); Glen v. Club Méditerranée, S.A., 450 F.3d 1251, 1254 n.2 (11th Cir. 2006) (no commercial activity exception to doctrine).

For further information, please contact:  Nicholas P. Connon, Managing Partner and Chair of the Middle East Practice Group; Tel:  +1.626.638.1757; e-mail:

Copyright © 2014 Connon Wood LLP •

Disclaimer: This article is for informational purposes only.

Nothing in this article can or should be regarded as legal advice or a substitute for legal counsel.

Application Of The Act Of State Doctrine To Bar Claims Against A Sovereign State

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