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:
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: firstname.lastname@example.org
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