ACT OF STATE DOCRTRINE/ JURISDICION OVER THE SUBJECT thatimmunity should not be granted in such cases, we must decline

n such cases, we must decline to accord

MATTER the defendant sovereign immunity from suit. It is “not for the courts to allow
immunity” on grounds ”which the government has not seen fit to recognize.”

It has long been settled and recently reaffirmed by the Supreme Court inBanco
Nacional de Cuba v. Sabbatinothat thecourts in the United States will
1. French v. Banco Nacional de Cuba not inquire into the validity of the acts of a foreign government done within
its own territory. Asthe Supreme Court stated inUnderhill v.
FACTS: Hernandez quoted inSabbatino every sovereign State is bound to respect
theindependence of every other sovereign State, and the courts of one
countrywill not sit in judgment on the acts of thegovernment of another done
The case stems from a regulation of the Cuban Government — adopted after
within its own territory. Redress of grievances byreason of such acts must be
Fidel Castro’s accession to power in January of 1959— which,
obtained throughthe means open to be availed of by sovereign powers as
in effect,prevented American and other foreign investors from receiving
between themselves
currency other than Cuban pesoson their Cuban investments. The investor
here involved was the plaintiff’s assignor, Alexander Ritter, an American
citizen, now living in Florida, who resided in Cuba at the time of the events 2. Hassan El-Fadl v. Central Bank of Jordan
from which this lawsuit arises. In 1957, some two yearsbefore the events in
question, he invested about - $35S,SSS in a Cuban farm. At that time, the FACTS:
Cuban Government permittedforeign investors to turn the proceeds from
their enterprises into American dollars, or other foreign currency, and
exemptedsuch proceeds from Cuba’s tax on the exportation of money. To this El-Fadl is a Lebanese national who has lived in Jordan since 1982. He alleges
end, the CurrencyStabilization Fund of the CubanGovernment was authorized that he was emloyed by PIBC, a subsidiary in the District of Columbia of Petra
to issue “certificates of tax exemption.”In June, 1959, six months after the Bank, a privately owned bank in Jordan. From 1982 to 1989 hewas
inception of theCastro regime, Ritter acquired eight such certificates, employed by PIBC in Jordan as manager of a regional office for Middle Eastern
aggregating $150,000. clients. He had signed acontract under which he "would be permanently
employed for life as a senior manager of Petra
InternationalBanking Corporation." The defendants maintain that El-Fadl was
On July15, 1959, the CurrencyStabilizationFund issued “Decision No. employed by Petra Bank (not PIBC) as asenior manager with responsibility
346”Aimed at stopping the flow of foreign currency from Cuba and When, in for currency and precious metals trading.
December of 1959, ,Ritter tendered his certificates for redemption, payment in
American dollars was refused under the mandate of the decision.
In August 1989, the Central Bank of Jordan with Petra Bank is
in receivership and has been run by aLiquidation Committee appointed by
The plaintiff, Ritter’s assignee, brought the present action in Supreme Court, the Jordanian government. Michel Marto, the Deputy
NewYork County, and obtained a judgmentagainst defendant bank in the Governor of theCentral Bank, was appointed to administer the liquidation
amount of $150,000. of PIBC came to the District of Columbia and
onSeptember 14, 1989 sent El-Fadl a letter of employment termination.
ISSUE:
On July 30, 1993, El-Fadl filed suit in the Superior Court of the District of
Whether or not Banco Nacional de Cuba was entitled to sovereign immunity Columbia seeking to recover damagesagainst Petra International
from suit as an agency of the Cuban Government. Banking Corporation ("PIBC") for wrongful termination of employment as wel
l as forvarious tort claims against several Jordanian institutions
and officials: the Central Bank of Jordan, its Governor and Deputy
Whether or not decision No. 34656
Governor, and Petra Bank (together, the "Jordanian defendants").
wasanactofthesovereignGovernmentofCuba.

The Central Bank of Jordan removed thecase

RULINGS:
The entire court is in agreement in rejecting the sovereign immunity claim. The
State Department concluded that theactivities out of which the present action
arose ”were of a jure gestionis (Commercial) in nature” and its position
to federal district court pursuant to the Federal SovereignImmunities
Act ("FSIA"). Following the removal, the Jordanian defendants filed a motion
to dismiss which thedistrict court dismissed on the grounds of first: the
court ruled that the
Central Bank, Governor MohammedSaeed El-Nabulsi, and Deputy
Governor Michel Marto (together, the "sovereign defendants") were REPUBLIC OF PHILIPPINES et al. v. PIMENTEL, Supreme Court of the
immunefrom suit under the FSIA; second, the court granted Petra Bank'smot United States
ion to dismiss for lack of personal jurisdiction and thirdly, the
court granted PIBC's motion to dismiss on forum non conveniens grounds,
No. 06–1204. Argued March 17, 2008—Decided June 12, 2008
although the court had personal jurisdiction, because El-Fadl had an available

Facts:
forum in the Jordanian courts. The courtdenied El-Fadl's
motion for reconsideration.
The case involves competing claims over a Merrill Lynch account particularly
S.A Arelma, a company incorporated by Marcos in New York which Marcos
ISSUE:
created while in power that has since grown from $ 2 million to more than $35
million. Pimentel’s group, a class of human rights victims previously awarded
Whether or not El-Fadl had an adequate alternative forum available to sue some $2 billion against Marcos’ estate, sought to attach the assets of Merrill
PIBC in Jordan. Lynch. Roger Roxas, a now-deceased Philippine locksmith, seeking recovery
claims that Marcos originally set up the account with proceeds from the
legendary Yamashita Treasure stolen from him, the Philippine government and
RULING:
the PCGG charged with recovering the funds against Marcos’ estate each laid
claim to the money. Facing claims from various claimants, Merrill Lynch filed an
In deciding a forum non conveniens motion, the district court must interpleader to settle all of the claims in one case.The Republic and the
firstestablish that there is an adequate alternative forum: Thus the dismissal Commission moved to dismiss the interpleader pursuant to Federal Rule of Civil
would not be appropriate where the alternative forum does not permit Procedure 19(b). The District Court refused, but the Ninth Circuit reversed,
litigation of the subject matter of the dispute. holding that the Republic and the Commission are entitled to sovereign
immunity and are required parties under Rule 19(a) thereby entering a stay
Consequently, if El-Fadl's expert is correct pending the outcome of Sandiganbayan litigation. Finding that litigation could
in describing the legalsituation in Jordan, the Jordanian courts would appear not determine entitlement, the District Court vacated the stay and ultimately
to be closed to El-Fadl's claims against Petra Bank andperhaps even to claims awarded the assets to the Pimentel class. The Ninth Circuit affirmed. Hence the
against PIBC.Accordingly, we reverse the dismissal of the claims appeal to the Supreme Court of the United States.
against Petra Bank and PIBC on grounds
of forum nonconveniens, remanding for a finding whether Petra Bank and Issue:
PIBC can show that Jordan is an adequatealternative forum; otherwise, we
affirm.
Whether or not the U.S. Court of Appeals for the Ninth Circuit err in approving
the award of assets to creditors of former Philippine President Ferdinand
Marcos when the Philippine government, claiming rightful ownership of the
assets, excluded itself from the proceedings based on sovereign immunity.

Ruling:

Yes it did. The Court's opinion was unanimous in finding that the Philippine
government was a required party to the case under Rule 19(b). Such a
required party must be joined to the suit if it is "feasible," and the Court ruled
that the government's inclusion was feasible in this case. The Court sent the
case back to the district court with instructions to dismiss the interpleader
action. Justice Anthony Kennedy delivered the opinion of the Court in which
Justices John Paul Stevens and David Souter concurred in part and dissented in
part.
The US Supreme Court concluded that the Court of Appeals gave insufficient
weight to the foreign sovereign status of the Republic and the Commission, and
that the court further erred in reaching and discounting the merits of their
claims.
The judgment of the Court of Appeals for the Ninth Circuit is reversed, and the
case is remanded with instructions to order the District Court to dismiss the
interpleader action.
Islamic Republic of Iran, Appellant,
v. Mohammed Reza Pahlavi, Respondent, and Farah Diba Pahlavi,
Defendant.
Court of Appeals of New York
Facts:
Plaintiff, the Islamic Republic of Iran, brings this action against
Iran's former ruler, Shah Mohammed RezaPahlavi, and his wife,
Empress Farah Diba Pahlavi. Italleges in its complaint that defendants
accepted bribesand misappropriated, embezzled or converted 35 billion dollars
in Iranian funds in breach of their fiduciary dutyto the Iranian people and it
seeks to recover those funds and 20 billion dollars in exemplary damages. It
asks
the court to impress a constructive trust on defendants' assets located
throughout the world, for an accountingof all moneys and property received by
the defendants from the government of Iran, and for other incidentalrelief. The
action was commenced in November, 1979 by substituted service on the Shah
made at New YorkHospital where he was undergoing cancer therapy. The
Empress was personally served at the same time at theNew York residence of
the Shah's sister. Thereafter, defendants moved to dismiss the complaint
alleging that itraised nonjusticiable political questions, that the court lacked
personal jurisdiction due to defective service ofprocess on them and that the
complaint should be dismissed on grounds of forum non conveniens.Special
Termgranted defendants' motion based on forum non conveniens,concluding
that the parties had no connection withNew York other than a claim
that the Shah had deposited funds in New York banks, a claim
which it foundinsufficient under the circumstances to justify the
court in retaining jurisdiction. A divided Appellate Divisionaffirmed.
Issue:
On this appeal plaintiff claims that the courts below erred, that the New York
courts must entertain this action because the record does not indicate
that there is any alternative forum available and because the
United States Government undertook to guarantee plaintiff an American forum
to litigate its claims against the former royal family in the hostage settlement
agreements between it and plaintiff known as the Algerian Accords.
Ruling:
Without doubt, the availability of another suitable forum is a most important
factor to be considered in ruling on a motion to dismiss but we have never held
that it was a prerequisite for applying the conveniens doctrine and in
Varkonyi we expressly described the availability of an alternative
forum as a “pertinent factor”, not as a precondition to dismissal (at p
338). Nor should proof of the availability of another forum be required in all
cases before dismissal is permitted. That would place an undue burden on
New York courts forcing them to accept foreign-based actions unrelated to this
State merely because a more appropriate forum is unwilling or unable to
accept jurisdiction. Moreover, even if we were to hold that the motion should
be denied if no alternative forum is available, then the burden of
demonstrating that fact should fall on plaintiff. Its presence in the New York
courts is a matter of choice and permitted because of comity and the public and
private burden of its action appearing, it should justify the need for New York to
assume jurisdiction.
The result may appear arbitrary to some but forum non conveniens
dismissals are not the only instance in which New York courts decline to
entertain jurisdiction even though no alternative forum may exist. Typically,
the courts also refuse to adjudicate claims otherwise actionable because they
involve unclean hands, diplomatic immunity and claims in which the applicable
law is penal in nature or is contrary to the public policy of the forum State.
In this case the convenience of the plaintiff is served because it acquired
jurisdiction over defendant in New York. That circumstance is entitled to
some weight, although less than usual because nonresident parties are
involved, but generally, a plaintiff must be able to
show more than its own convenience for selecting the forum when the choice
imposes a heavy burden on the court and the defendant (Gulf Oil Corp. v
Gilbert, supra, at p 508). To that end, plaintiff claims the action should proceed
in this jurisdiction because assets of the Shah are located here. Nothing before
us establishes that fact, however, and the Surrogate's Court has apparently
found no grounds for ancillary administration of the estate yet. The absence
of an alternative forum is the only substantial consideration
advanced for denial of the motion.

The Court of Appeals dismissed the appeal as against defendant
Mohammed Reza Pahlavi, and affirmed theorder of the Appellate
Division as against defendant Farah Diba Pahlavi, holding, in an opinion by
Judge Simons,that the courts below did not abuse their discretion as a
matter of law in dismissing the action on the ground offorum non
convenienssince the record does not demonstrate a substantial nexus
betweenNew York State andplaintiff's cause of action, even though
there may be no other forum in which plaintiff can obtain the relief
itseeks; and that the provisions of the January, 1981 agreements between the
United States and Iran, commonlyknown as the Algerian Accords, did not
require reversal.Islamic Republic of Iran v Pahlavi, affirmed.
Credit Suisse v. U.S.D.C
Credit Suisse and Swiss Bank Corporation (the "Banks") petition this court
for a writ of mandamus, prohibition or other appropriate extraordinary
relief from the district court's denial of the Banks' motion to dismiss the
action Rosales et al. v. Credit Suisse and Swiss Bank Corp., No. CV 96-6419
(C.D.Cal.) (Real, J.) ("Rosales action"). We have jurisdiction pursuant to 28
U.S.C. § 1651(a). Because the relief sought in the Rosales action would
violate the act of state doctrine, we grant the petition.
Facts:
(Official Act of a Foreign Sovereign)
In 1986, when Ferdinand E. Marcos left power, the Swiss Federal Council,7 the
highest governing body in the Swiss Executive Branch, issued an Executive
Order freezing all assets of the Marcos family that were held in Switzerland.
The Federal Council, expecting the Philippine government to seek recovery of
funds deposited by Marcos and his family in Switzerland, issued the freeze
order to ensure that the funds did not disappear before the Philippine
government had an opportunity to act.
Shortly thereafter, the Philippine government formally requested, pursuant to
the Swiss Federal Act on Mutual Assistance in Criminal Matters ("IMAC"),8 that
the Government of Switzerland freeze all assets held in Switzerland that
belonged to Marcos and his family pending the outcome of a criminal
investigation and prosecution in the Philippines.9 The Philippine government
also requested assistance in obtaining evidence about the amount and nature
of the Marcos assets held in Switzerland and the circumstances under which
such assets were deposited.
After ensuring that the Philippine government's request complied with IMAC,
the Swiss Federal Office of Police forwarded the request for assistance to the
enforcement authorities of the cantons in which the Marcos bank accounts
were maintained-Geneva, Fribourg and Zurich-with instructions to take
provisional measures immediately.10 Pursuant to IMAC procedures which
require the cantonal authorities to execute the instructions of the Swiss federal
government, cantonal orders were immediately issued freezing all assets
belonging directly or indirectly to Marcos and/or his family. These cantonal
orders, which superseded the previously issued Executive Order, were
appealed and affirmed by judgments of the Swiss Federal Supreme Court, the
highest court in Switzerland. The cantonal freeze orders remain in effect today.
Switzerland's act of issuing first the Executive Order and then the cantonal
freeze orders pursuant to IMAC was "paradigmatically sovereign in nature; it is
not [the type of act] that a private person can exercise." Callejo v. Bancomer,
S.A., 764 F.2d 1101, 1116 (5th Cir.1985). The Executive and subsequent
cantonal orders were, therefore, clearly an "official act of a foreign sovereign
performed within its own territory." W.S. Kirkpatrick, 493 U.S. at 405, 110 S.Ct.
at 704.
(Relief Sought Would Require a United States Court to Declare "Invalid" a
Foreign Sovereign's Official Act)
A declaration by a United States court that the Chinn assignment is valid and
binding on the Banks would also violate the act of state doctrine. The
assignment purports to assign to Robert Swift, counsel for the MDL plaintiffs,
all of the Estate's "right, title and interest in and to bank accounts maintained
in Switzerland." The assignment directs entities having authority over such
bank accounts "to perform all necessary acts to effect the transfer of the above
bank accounts forthwith."
A declaration that this assignment is valid and binding on the Banks would be
a declaration that the Banks must transfer all Estate assets held by the Banks
to Swift "forthwith." Such a declaration would not only contradict, and
therefore declare invalid, the Swiss freeze orders, but would also require the
Banks to disregard the Swiss orders.
United States courts are "bound to respect the independence of every other
sovereign State," including Switzerland. See Underhill, 168 U.S. at 252, 18
S.Ct. at 84. If the MDL plaintiffs want to contest the legality of the Swiss freeze
orders, seek a declaration of the validity of the Chinn assignment as against the
Banks, or seek an injunction compelling the Banks to turn over the assets, they
should do so via the Swiss judicial system. See Miller v. United States, 955
F.Supp. 795, 798 (N.D.Ohio 1996).
Issue: Whether or not Switzerland retains jurisdiction over the case.
Ruling: The clerk of this court is directed to issue a writ of mandamus directing
the district court to vacate its denial of the Banks' motion to dismiss, and to
dismiss the action Rosales et al. v. Credit Suisse and Swiss Bank Corp., No. CV
96-6419 (C.D.Cal.) (Real, J.); and further directing the district court to refrain
from taking any further action in the Rosales action or any other case involving
any or all of the Real Parties in Interest and any assets of the Estate of
Ferdinand E. Marcos held or claimed to be held by the Banks.
This court retains jurisdiction over this case. Any motions for vacation or
modification of this order shall be filed with the clerk of this court.
The Petition for Writ of Mandamus is GRANTED.
* (2) "the relief sought or the defense interposed [in the action would require]
Honorable B. Lynn Winmill, United States District Judge for the District of Idaho,
sitting by designation
The Banks are both incorporated under the laws of, and headquartered in,
Switzerland. Swiss Bank maintains a representative office in Los Angeles and a
branch office in San Francisco, both of which are licensed as such by the
California Banking Department. Credit Suisse maintains a branch office in Los
Angeles which is also licensed as such by the California Banking Department
Rule 69(a) provides:
Process to enforce a judgment for the payment of money shall be a writ of
execution, unless the court directs otherwise. The procedure on execution,
in proceedings supplementary to and in aid of a judgment, and in
proceedings on and in aid of execution shall be in accordance with the
practice and procedure of the state in which the district court is held,
existing at the time the remedy is sought.…
The classic statement of the act of state doctrine is found in Underhill v.
Hernandez, 168 U.S. 250, 252, 18 S.Ct. 83, 84, 42 L.Ed. 456 (1897), where
Justice Fuller stated for the Court:
Every sovereign State is bound to respect the independence of every other
sovereign State, and the courts of one country will not sit in judgment on
the acts of the government of another done within its own territory.
Redress of grievances by reason of such acts must be obtained through the
means open to be availed of by sovereign powers as between themselves.
22
Banco Nacional de Cuba v. Sabbatino, 376 U.S. 398, 416, 84 S.Ct. 923,
934, 11 L.Ed.2d 804 (1964) (quoting Underhill, 168 U.S. at 252, 18 S.Ct. at
84). Although once viewed as an expression of international law, resting on
considerations of international comity and expediency, the act of state
doctrine is currently viewed as a "consequence of domestic separation of
powers, reflecting 'the strong sense of the Judicial Branch that its
engagement in the task of passing on the validity of foreign acts of state
may hinder' the conduct of foreign affairs." W.S. Kirkpatrick & Co., Inc. v.
Environmental Tectonics Corp., Int'l, 493 U.S. 400, 404, 110 S.Ct. 701,
704, 107 L.Ed.2d 816 (1990) (quoting Banco Nacional, 376 U.S. at 423, 84
S.Ct. at 937).
23
Under this current view, an action will be barred only if: (1) there is an
"official act of a foreign sovereign performed within its own territory"; and
a court in the United States to declare invalid the [foreign sovereign's]
official act." Id. at 405, 110 S.Ct. at 704.
6. W.S. Kirkpatrick & Co. v. Environmental Tectonics Corp.
Facts:
In 1981, Harry Carpenter, a U.S. citizen and chairman of the board and chief
executive officer of W. S. Kirkpatrick & Co., Inc. (Kirkpatrick), learned that the
Republic of Nigeria was interested in contracting for the construction of an
aeromedical center at Kaduna Air Force Base in Nigeria. He made
arrangements with Benson “Tunde” Akindale, a Nigerian citizen, whereby
Akindale would help secure the contract for Kirkpatrick by paying bribes to
Nigerian officials. In accordance with the plan, the contract was awarded to a
wholly owned subsidiary of Kirkpatrick; Kirkpatrick paid the agreed-upon funds
to Akindale, which were dispersed as bribes to Nigerian officials. Nigerian law
prohibits both the payment and the receipt of such bribes. Environmental
Tectonics Corporation, International (Environmental), an unsuccessful bidder
for the Kaduna contract, learned of the bribes and informed the U.S. embassy
in Lagos, Nigeria. In a criminal action, Carpenter and Kirkpatrick pleaded guilty
to violating the U.S. Foreign Corrupt Practices Act. Environmental then brought
this civil action against Carpenter, Kirkpatrick, and Akindale seeking damages
under federal and state racketeering and antitrust laws. The district court held
that the action was barred by the act of state doctrine and dismissed the
complaint. The Court of Appeals reversed. The defendants appealed to the U.S.
Supreme Court.
Issue:
WON the act of state doctrine bars the plaintiff’s civil suit against the
defendants?
Ruling:
The act of state doctrine does not apply.
Act of state issues arise only when a court must decide—that is, when that
outcome of the case turns upon—the effect of official action by a foreign
sovereign. When that question is not in the case, neither is the act of state
doctrine. That is the situation here. Regardless of what the court’s factual
findings may suggest as to the legality of the Nigerian contract, its legality is
simply not a question to be decided in the present suit, and there is thus no
occasion to apply the rule of decision that the act of state doctrine requires.
The short of the matter is this: Courts in the United States have the power, and
ordinarily the obligation, to decide cases and controversies properly presented
to them. The act of state doctrine does not establish an exception for cases and
controversies that may embarrass foreign governments, but merely requires
that, in the process of deciding, the acts of foreign sovereigns taken within
their own jurisdictions shall be deemed valid. That doctrine has no application
to the present case because the validity of no foreign sovereign act is at issue.
ISSUE: Does the act of state doctrine arise in this case? In other words, does
the outcome of the case turn on whether the court gives legal effect to the act
of the foreign government in its own territory?
 The lower court says that it does – for Tectonics to win, it would have
to prove that the Nigerian government took a bribe, and, because of
that bribe, awarded the job to Kirkpatrick
o Remember: it does not matter that the Nigerian government
is not a party to the suit, because the act of state doctrine
may come into play where none of the parties is a state so
long as the outcome of the case depends on whether a court
gives legal effect to the act of a state
 But the Supreme Court says that the act of state doctrine does NOT
apply here
o “Act of state issues only arise when a court must decide –
that is, when the outcome of the case turns upon – the effect
of official action by a foreign sovereign. When that question
is not in the case, neither is the act of state doctrine. That is
the situation here. Regardless if what the court’s factual
findings may suggest as to the legality of the Nigerian
contract, its legality is simply not a question to be decided in
the present suit….”
o The determination as to whether the bribe took place and
influenced the outcome of the contract does not require the
court to decide whether or not to give legal effect to an
official act of Nigeria in is own territory.
o
7. IN RE: PHILIPPINE NATIONAL BANK, Philippine National Bank,
Petitioner, v. United States District Court for the District of Hawaii
Facts:
This mandamus petition represents one more chapter in a long-running
dispute over the right to the assets of the estate of former Philippine President
Ferdinand E. Marcos. On one side is a class of plaintiffs who obtained a large
judgment in the federal district court in Hawaii against the Marcos estate for
human rights violations by the Marcos regime. The judgment included an
injunction restraining the estate and its agents or aiders and abettors from
transferring any of the estate's assets.2 On the other side is the Republic of
the Philippines, which independently has sought forfeiture of the Marcos
estate's assets on the ground that they were stolen by Marcos from the
Philippine government and its people.
In an earlier case, we dealt with the attempt of class plaintiffs to reach assets
of the Marcos estate located in Swiss banks. Credit Suisse v. U.S. Dist. Ct. for
the Cent. Dist. of Cal., 130 F.3d 1342, 1347-48 (9th Cir.1997). The Swiss
assets had been frozen by the Swiss government at the request of the Republic,
which was seeking to recover them. The class plaintiffs obtained an injunction
from the district court requiring the Swiss banks to hold the assets for the
benefit of the class plaintiffs. We held that the injunction violated the act of
state doctrine, which precludes our courts from declaring “invalid” a foreign
sovereign's official act-in this case the freeze order of the Swiss government.
Id. We accordingly granted a writ of mandamus directing dismissal of the
district court's order, and ordering the district court to refrain from taking any
further action in [this] action or any other case involving any or all of the [class
plaintiffs] and any assets of the Estate of Ferdinand E. Marcos held or claimed
to be held by the Banks.
Thereafter, the Swiss government released the funds frozen in Switzerland for
transfer to the Philippine National Bank in escrow pending a determination of
proper disposal by a competent court in the Philippines. The Philippine
National Bank deposited the funds in Singapore. The Philippine Supreme
Court subsequently held that the assets were forfeited to the Republic of the
Philippines.
The district court then issued the orders that precipitated the present petition
for mandamus. The district court ruled that the Philippine Supreme Court had
violated “due process by any standard” and that its judgment was entitled to
no deference. It ordered reinstatement of an earlier settlement agreement in
the district court litigation that had been rejected when the Philippine courts
refused to approve it and the Republic failed to give its consent to the
agreement.4
Furthermore, the district court ordered that any such transfer, without first
appearing and showing cause in this court as to how such transfer might occur
without violating the Court's injunction shall be considered contempt of the
Court's earlier order. Any and all persons and banking institutions
participating in such transfers ․are hereby notified that such transfer would be
considered in contempt of this Court's injunction[.]
The district court then issued an Order to Show Cause against the Philippine
Bank, which was not a party to the litigation in the district court, requiring the
Bank to show why it should not be held in contempt for violating the court's
injunction against transfer of assets by the estate.
The Bank then filed the present petition for mandamus in this court, seeking to
restrain the district court from enforcing its Order to Show Cause and from
pursuing discovery against the Bank officer. The Bank asserts that it has
transferred nearly all of the funds in issue to the Republic pursuant to the
judgment of the Philippine courts.5 The Bank contends that the officer's
deposition would violate Philippine bank secrecy laws. More important, the
Bank contends that the entire proceeding against the Bank for its transfer of
funds violated the act of state doctrine.
Issue: WON there was violation of the act of state doctrine.
Held:
Every sovereign state is bound to respect the independence of every other
sovereign state, and the courts of one country will not sit in judgment on the
acts of the government of another, done within its own territory. Redress of
grievances by reason of such acts must be obtained through the means open to
be availed of by sovereign powers as between themselves.
The district court's orders in issue violated this principle. In order to obtain
assets from the Philippine Bank, or to hold the Bank in contempt for the
transfer of those assets to the Republic, the district court necessarily (and
expressly) held invalid the forfeiture judgment of the Philippine Supreme Court.
We conclude that this action of the district court violated the act of state
doctrine.
The class plaintiffs in the district court argue that the act of state doctrine is
directed at the executive and legislative branches of foreign governments, and
does not apply to judicial decisions. Although the act of state doctrine is
normally inapplicable to court judgments arising from private litigation, there is
no inflexible rule preventing a judgment sought by a foreign government from
qualifying as an act of state. The forfeiture action was not a mere dispute
between private parties;  it was an action initiated by the Philippine
government pursuant to its “statutory mandate to recover property allegedly
stolen from the treasury.” 6 In re Estate of Ferdinand Marcos Human Rights
Litig., 94 F.3d at 546. We have earlier characterized the collection efforts of
the Republic to be governmental. Id. The subject matter of the forfeiture
action thus qualifies for treatment as an act of state.
The class plaintiffs next argue that the act of state doctrine is inapplicable
because the judgment of the Philippine Supreme Court did not concern matters
within its own territory. Generally, the act of state doctrine applies to official
acts of foreign sovereigns “performed within [their] own territory.” Credit
Suisse, 130 F.3d at 1346 (internal quotations omitted). The act of the
Philippine Supreme Court was not wholly external, however. Its judgment,
which the district court declared invalid, was issued in the Philippines and much
of its force upon the Philippine Bank arose from the fact that the Bank is a
Philippine corporation.Even if we assume for purposes of decision that the
assets were located in Singapore, we conclude that this fact does not preclude
treatment of the Philippine judgment as an act of state in the extraordinary
circumstances of this case. Thus, even when an act of a foreign state affects
property outside of its territory, “the considerations underlying the act of state
doctrine may still be present.” Callejo, 764 F.2d at 1121 n. 29. Because the
Republic's “interest in the [enforcement of its laws does not] end at its
borders,” id., the fact that the escrow funds were deposited in Singapore does
not preclude the application of the act of state doctrine. The underlying
governmental interest of the Republic supports treatment of the judgment as
an act of state.
Indeed, the Philippine National Bank argues that the district court's orders
violated our mandate in Credit Suisse “directing the district court to refrain
from taking any further action” with regard to assets of the Marcos estate “held
or claimed to be held by the [Swiss] Banks.” Id. at 1348. The district court
held that our mandate did not apply to the assets once they left the hands of
the Swiss banks. We need not decide the correctness of that ruling because
we conclude that, in these circumstances, the Philippine forfeiture judgment is
an act of state. The Swiss government did not repudiate its freeze order, and
the Swiss banks did not transfer the funds in the ordinary course of business.
They delivered the funds into escrow with the approval of the Swiss courts in
order to permit the very adjudication of the Philippine courts that the district
court considered invalid. To permit the district court to frustrate the
procedure chosen by the Swiss and Philippine governments to adjudicate the
entitlement of the Republic to these assets would largely nullify the effect of
our decision in Credit Suisse.
8. PENNHURST STATE SCHOOL & HOSP. v. HALDERMAN
Facts:
Respondent Halderman, a resident of petitioner Pennhurst State School and
Hospital, a Pennsylvania institution for the care of the mentally retarded,
brought a class action in Federal District Court against Pennhurst, certain of its
officials, the Pennsylvania Department of Public Welfare, and various state and
county officials (also petitioners). It was alleged that conditions at Pennhurst
violated various federal constitutional and statutory rights of the class
members as well as their rights under the Pennsylvania Mental Health and
Mental Retardation Act of 1966 (MH/MR Act). Ultimately, the District Court
awarded injunctive relief based in part on the MH/MR Act, which was held to
provide a right to adequate habilitation. The Court of Appeals affirmed, holding
that the MH/MR Act required the State to adopt the "least restrictive
environment" approach for the care of the mentally retarded, and rejecting
petitioners' argument that the Eleventh Amendment barred a federal court
from considering this pendent state-law claim. The court reasoned that since
that Amendment did not bar a federal court from granting prospective
injunctive relief against state officials on the basis of federal claims, citing Ex
parte Young, 209 U.S. 123 , the same result obtained with respect to a
pendent state-law claim.
Issue:
Whether a federal court may award injunctive relief against state officials on
the basis of state law.
Held:
The Eleventh Amendment prohibited the District Court from ordering state
officials to conform their conduct to state law.
The principle of sovereign immunity is a constitutional limitation on the federal
judicial power established in Art. III of the Constitution. The Eleventh
Amendment bars a suit against state officials when the State is the real,
substantial party in interest, regardless of whether the suit seeks damages or
injunctive relief. The Court in Ex parte Young, supra, recognized an important
exception to this general rule: a suit challenging the federal constitutionality of
a state official's action is not one against the State.
A federal court's grant of relief against state officials on the basis of state law,
whether prospective or retroactive, does not vindicate the supreme authority
of federal law. When a federal court instructs state officials on how to conform
their conduct to state law, this conflicts directly with the principles of
federalism that underlie the Eleventh Amendment.
In Edelman v. Jordan, 415 U.S. 651 , this Court recognized that the need to
promote the supremacy of federal law that is the basis of Young must be
accommodated to the constitutional immunity of the States. Thus, the Court
declined to extend the Young doctrine to [465 U.S. 89, 90] encompass
retroactive relief, for to do so would effectively eliminate the States'
constitutional immunity. Edelman's distinction between prospective and
retroactive relief fulfilled Young's underlying purpose of vindicating the
supreme authority of federal law while at the same time preserving to an
important degree the States' constitutional immunity. But this need to
reconcile competing interests is wholly absent when a plaintiff alleges that a
state official has violated state law. In such a case the entire basis for the
doctrine of Young and Edelman disappears. A federal court's grant of relief
against state officials on the basis of state law, whether prospective or
retroactive, does not vindicate the supreme authority of federal law. When a
federal court instructs state officials on how to conform their conduct to state
law, this conflicts directly with the principles of federalism that underlie the
Eleventh Amendment.
The dissenters' view is that an allegation that official conduct is contrary to a
state statute would suffice to override the State's protection from injunctive
relief under the Eleventh Amendment because such conduct is ultra vires the
official's authority. This view rests on fiction, is wrong on the law, and would
emasculate the Eleventh Amendment. At least insofar as injunctive relief is
sought, an error of law by state officers acting in their official capacity will not
suffice to override the sovereign immunity of the State where the relief
effectively is against it. Larson v. Domestic & Foreign Commerce Corp., 337
U.S. 682 . Under the dissenter's view, the ultra vires doctrine, a narrow and
questionable exception, would swallow the general rule that a suit is against
the State if the relief will run against it.
The principle that a claim that state officials violated state law in carrying out
their official responsibilities is a claim against the State that is protected by the
Eleventh Amendment applies as well to state-law claims brought into federal
court under pendent jurisdiction. Pp. 117-121.
While it may be that applying the Eleventh Amendment to pendent state-law
claims results in federal claims being brought in state court or in bifurcation of
claims, such considerations of policy cannot override the constitutional
limitation on the authority of the federal judiciary to adjudicate suits against a
State.
The judgment below cannot be sustained on the basis of the state-law
obligation of petitioner county officials, since any relief granted against these
officials on the basis of the MH/MR Act would be partial and incomplete at best.
Such an ineffective enforcement of state law would not appear to serve the
purposes of efficiency, convenience, and fairness that must inform the exercise
of pendent jurisdiction.
673 F.2d 647, reversed and remanded.
Lord Day & Lord v Socialist Republic of Vietnam
FACTS:
Factual Background:
On December 6, 1970, a cargo of rice owned by the, then, Republic of Vietnam
("former Republic") was lost during overseas transport when the ship carrying
the cargo sustained a collision in the Panama Canal. The cargo was insured
under a policy issued by SocieteVietnamenneD'Assuranceset de Reassurances
("SOVAR"), a Vietnamese insurance corporation. Pursuant to the terms of its
insurance agreement, SOVAR reimbursed the former Republic and Tong
CuocTiepTe, the then "General Supply Agency" of the former Republic, its
insured, for the full value of the loss. SOVAR obtained an assignment dated
December 14, 1971 from its insured for all rights against third parties
responsible for the loss. In turn, SOVAR was indemnified by the Reinsurers for
a portion of the total cargo loss.
Under Plaintiff Lord Day's legal representation, SOVAR and the former Republic
commenced a subrogation action in 1973 seeking recovery for the lost rice
cargo against parties allegedly responsible for the loss. The action proceeded in
the name of the Republic of Vietnam and Tong CuocTiepTe (the country's
general supply agency). This action resulted in a settlement in
1975, *554 where the former Republic and Tong CuocTiepTe were to obtain
$548,364.56 from the Panama Canal Company, after payment of sums due
other parties.
On April 30, 1975, shortly after the settlement check was issued from the
Panama Canal Company to Plaintiff Lord Day, Saigon fell to the armies of the
Socialist Republic of Vietnam, and the United States subsequently banned all
transfer of funds to the Vietnamese government and Vietnamese nationals.
The settlement check was issued "Pay to the Order of: Lord, Day & Lord,
attorneys for Republic of Vietnam & Tong CuocTiepTe / General Supply
Agency."
Prevented from transferring the settlement check to its Vietnamese clients,
Plaintiff sought and was issued a License by the Federal Foreign Assets Control
agency permitting placement of the funds into a blocked account, pursuant to
the Trading With the Enemy Act.
Plaintiff applied for a License in its role as "attorneys for Vietnam Assurance
and Reassurance Co.," i.e. SOVAR. Court Ex. 2 at 1. In its application, Plaintiff
listed SOVAR, rather than the former Republic, as a "present claimant" to the
funds. In its Complaint, Plaintiff explains that, although the case was brought
in the name of Vietnam and Tong CuocTiepTe and the Consent Judgment
directed payment to Vietnam and Tong CuocTiepTe, "Lord Day had planned to
transfer the settlement funds to SOVAR because upon information and belief,
SOVAR was subrogated to all rights of the Republic of Vietnam."
In the License application, Plaintiff stated that it sought the license in order
collect the unpaid judgment and for the purpose of making disbursements to
attorneys related to the settlement and "to such other persons having an
interest in the balance as may lawfully be paid. Although Plaintiffs
acknowledged in the license application that "It is our understanding ... that
there are other co-insurers and re-insurers who may be entitled to a share of
the proceeds," no party claims to have sought payment from the account while
the assets were frozen. Upon issuance of the License, Plaintiff deposited the
funds in the name of the Republic of Vietnam and Tong CuocTiepTe in an
interest-bearing account with First National City Bank in New York. Since the
initial bank deposit by Plaintiff, the settlement funds have accrued interest and
are now valued at approximately $2.8 million.
Effective March 6, 1995, the United States lifted the ban, thus allowing the
settlement funds deposited by Plaintiff to be finally transferred. However,
following the fall of Saigon, SOVAR had been effectively dissolved and
nationalized in April 1975 by Vietnam, who discontinued its operations.
Uncertain how to proceed, Plaintiff filed the instant Interpleader action.
Procedural Background:
Plaintiff is a New York law firm currently in liquidation. Plaintiff brought this
interpleader action pursuant to Rule 22 of the Federal Rules of Civil Procedure
naming the Socialist Republic of Vietnam (the current government of Vietnam,
hereinafter, "Vietnam"), and three foreign corporations believed to be former
shareholders of SOVAR: Swiss Reinsurance Company ("Swiss Re"), Assurances
Generales de France, and Groupe des MutuellesAlsaciennes.
Plaintiff Lord Day sought (1) that each of the Defendants interplead and
settle among themselves their respective rights to the funds at issue; (2)
enjoinment and restraint from Defendants making any claim against Plaintiff to
turn over the funds and prosecuting any action for the recovery of the funds; (3)
discharge from all liability in transfer and maintenance of the funds; and (4)
fees and attorneys' costs.
Following a hearing to show cause in interpleader conducted on November 13,
1996, this Court granted Plaintiff relief on each of its requests. The Court also
ordered Plaintiff to deposit the funds with the Clerk of this Court.
The Reinsurers answered the Complaint and appeared as parties of interest
with respect to the funds on November 6, 1996. Upon resolution of outstanding
service issues, Vietnam filed its Answer on May 28, 1997. Vietnam's Answer to
Plaintiff's Interpleader Complaint asserts its right to the funds pursuant to an
Executive Agreement and also asserts several affirmative defenses, including
its right to immunity as a foreign sovereign under the Foreign Sovereign
Immunities Act.
The Reinsurers also filed a Cross-Complaint asserting entitlement to the funds. grant this Court jurisdiction solely for the purpose of awarding it the funds. This,
According to the Reinsurers, prior to SOVAR's dissolution and nationalization, Vietnam cannot do.
the Reinsurers had an agreement with SOVAR to provide indemnity
reinsurance covering a portion of the rice cargo loss, and also held
The appropriate extent of Vietnam's implied waiver here is also impacted by
approximately 30 percent of common stock in the corporation. The Reinsurers
the Court's ability to exercise in remjurisdiction as it is in possession of the
claim ownership of the funds by their status as reinsurers and shareholders
funds at issue. The in rem statute permits the Court to determine claims of
before and during SOVAR's dissolution and nationalization. In addition, Swiss
ownership to property in its possession but does not provide a means for
Re brings a separate claim for expropriation.
parties to sue on unrelated grounds.

Vietnam filed the instant motion to dismiss the Reinsurers' Cross-Complaint

pursuant to Federal Rules of Civil Procedure 12(b) and (c) on various grounds,
including Vietnam's asserted right to the funds as a matter of law pursuant to
an Executive Agreement, lack of jurisdiction under the Federal Sovereign
Immunities Act and the statute of limitations.
ISSUE:
Whether or not Vietnam waived its immunity in agreeing to appear in response
to Plaintiff's interpleader action for the sole purpose of asserting its claim to the
disputed funds.
Thus by its appearance and claim to the funds, Vietnam has impliedly waived
its immunity to the extent necessary to determine all pre-existing claims
relating to legal title to the property arising out of the 1971 accident. Only the
contract claim meets this limited waiver under both in rem and FSIA waiver
and counterclaim analysis. To the extent the Reinsurers seek recovery beyond
the property within this jurisdiction or recovery under theories of dissolution or
expropriation, neither waiver or counterclaim exceptions apply to grant
jurisdiction.

HELD:
1o. Saratoga Country Chamber of Commerce, In. v Pataki
Interpleader actions generally proceed in two stages. First, the Court
determines whether the plaintiff is entitled to the relief sought, including
FACTS:
discharge. Second, the Court adjudicates the adverse claims of the
interpleaded defendants.
On October 15, 1993, then-Governor Cuomo entered into the “Tribal-State
Compact Between the St. Regis Mohawk Tribe and the State of New York.” The
"A case is properly dismissed for lack of subject matter jurisdiction under Rule
compact, which underlies this appeal, is an outgrowth of the Federal Indian
12(b) (1) when the district court lacks the statutory or constitutional power to
Gaming Regulatory Act (IGRA) and allows the Tribe to conduct gambling,
adjudicate it." "In resolving a motion to dismiss for lack of subject matter
including baccarat, blackjack, craps and roulette, on the Akwesasne
jurisdiction under Rule 12(b) (1), a district court ... may refer to evidence
Reservation in Franklin County.
outside the pleadings." Further, a motion to dismiss may be granted only if,
taking as true the allegations pleaded in the complaint and making all
reasonable inferences in favor of the plaintiff, "it appears beyond doubt that In response to the United States Supreme Court's decision in California v.
the plaintiff can prove no set of facts in support of his claim which would entitle Cabazon Band of Mission Indians, Congress passed IGRA, which declares that
him to relief." “Indian tribes have the exclusive right to regulate gaming activity on Indian
lands if the gaming activity is not specifically prohibited by Federal law and is
conducted within a State which does not, as a matter of criminal law and public
The Foreign Sovereign Immunities Act ("FSIA") is the exclusive basis for
policy, prohibit such gaming activity”. IGRA provides statutory  authorization
federal subject matter and personal jurisdiction in suits involving foreign states.
for the establishment of Indian casinos, attempts to regulate the gaming so as
Sovereign entities are entitled to immunity from suit and federal courts lack
to avoid “corrupting influences” and seeks to ensure that the Indian tribes are
jurisdiction unless a statutory exception applies. In its answer to the
the primary beneficiaries of the gaming.
Interpleader Complaint, Vietnam waived its immunity agreeing to appear in
response to Plaintiff's interpleader action for the sole purpose of asserting its
claim to the disputed funds. However, Vietnam explicitly reserved its rights as The Tribe opened its casino on April 10, 1999. On May 27, 1999, Governor
a foreign sovereign immune from jurisdiction in connection with any other Pataki 3 and the Tribe executed an amendment to the 1993 compact. The
claims. Vietnam claims immunity from all other claims to the funds because, it Interior Department approved the amendment, which allowed the casino to
argues, any such claims require the court to consider alleged contractual operate electronic class III games, including keno. By its terms, the
relations between Vietnam and the Reinsurers.[6] Effectively, Vietnam seeks to amendment expired on May 27, 2000, one year after it was signed. Although
the Governor and the Tribe later agreed to two additional amendments, the
Interior Department disapproved them. As a result, there is no authorization
in effect allowing the Tribe to operate electronic gaming. Nevertheless, the
parties inform us that electronic gaming continues at the casino.
 Shortly after the 1999 amendment took effect, plaintiffs brought suit asserting
that the 1993 compact and the 1999 amendment violated the separation of
powers and the constitutional gambling prohibition. They sought a declaration
that the 1993 compact and the 1999 amendment were unconstitutional, and
an injunction prohibiting the State from expending any money in furtherance of
the agreements. They also asked the court to enjoin the Governor from
taking any further unilateral action (such as signing a successor to the 1999
amendment) that would extend gambling in the state.
First and most obvious is the fact that the Governor and Congress are not
coordinate branches of government, thereby rendering defendants' separation
of powers analysis inapt. Although defendants make an attempt to promote
this as a "unique" separation of powers case where the challenged executive
action supposedly implements existing legislative policy "established through
the interplay of policies set by two policy-making bodies — the New York State
Legislature and the United States Congress", the fact is that the policy relied
upon by defendants derives solely from Federal statutes and implementing
regulations. The State Legislature's exclusive role in this matter was to
approve highly restrictive statutes and constitutional provisions which,
although generally banning gambling and at all times evidencing a strong
policy against commercialized gambling, may have unwittingly opened the
door to Indian casino gaming through the subsequently enacted IGRA.

By judgment entered March 10, 2000, Supreme Court dismissed the action for
plaintiffs' failure to join the Tribe as an indispensable party. On appeal, the
Appellate Division reversed, concluding that the Tribe was not an indispensable Second, defendants' analysis overlooks the critical distinction between
party, noting that a contrary ruling would put Indian gaming compacts beyond the existence of a Tribal-State compact and the provisions of such a compact.
constitutional challenge or review. While the Appellate Division acknowledged That is, even if we were to accept the premise that IGRA placed the State in a
that the Tribe's interests would be affected by the suit, it determined that, on position where it had no reasonable alternative but to enter into a compact with
balance, the Tribe's absence should not prevent the suit from going forward. the Tribe, the fact remains that the Governor lacked authority to define the
The Court also rejected the State's statute of limitations, standing and laches terms of that compact. As the legislative history of IGRA makes clear, "[a]
defenses . State's governmental interests with respect to class III gaming on Indian lands
include the interplay of such gaming with the State's public policy, safety, law
and other interests, as well as impacts on the State's regulatory system,
On remand, by order entered April 12, 2001, Supreme Court granted plaintiffs
including its economic interest in raising revenue for its citizens". Here, the
summary judgment. The court declared the 1999 amendment and the 1993
Governor's action deprived the Legislature of any input concerning a number of
compact void and unenforceable, and enjoined the Governor from taking any
significant elements, including the location of the casino, the gaming that could
further action to reenact an electronic gaming amendment without legislative
be carried on there, the extent of State involvement in providing regulation and
approval. The Appellate Division affirmed, holding that the Governor's
a regulatory infrastructure and the fees to be exacted for that regulation.
unilateral action deprived the Legislature of its policymaking authority in such
These numerous collateral issues affecting the health and welfare of State
areas as “the location of the casino, the gaming that could be carried on there,
residents implicate policy choices lying squarely within the province of the
the extent of state involvement in providing regulation * * * and the fees to be
Legislature.
exacted for that regulation” (Saratoga County Chamber of Commerce v. Pataki,
293 A.D.2d 20, 26, 740 N.Y.S.2d 733 [2002] [Saratoga II ] ). The State
appealed as of right, bringing up for review the substantial constitutional
question presented.
As a final matter, we note that defendants expressly disavow any opinion as to
ISSUE: whether (1) under IGRA, New York must allow "all forms of Indian gaming"
because some types of class III gaming are allowed, (2) IGRA preempted the
question of whether the Governor's signature was sufficient to bind the State,
Whether or not the Governor had the authority to execute a Tribal-State
and (3) the Legislature ratified the compact by appropriating funds for its
compact and amendment with the St. Regis Mohawk Tribe allowing certain
implementation and granting the State Police access to the criminal history
class III gaming activities on the Tribe’s reservation.
records of the Division of Criminal Justice Services.

HELD:

We hold that because the basic policy decisions underlying the Governor’s
action have not been made by the State Legislature, the Governor did not have
the authority to bind the State by executing the compact or the amendment.
11. Helen Liu vs The Republic of China Even assuming that the ROC's description of the ramifications of allowing this
case to proceed is accurate, the applicability of the act of state doctrine is, for
a number of reasons, not clear-cut.
FACTS:

First, it is not clear that the ROC has shown the existence of an act of state. Not
On October 15, 1984, Henry Liu was shot to death at his home in Daly City,
all activities of a foreign sovereign state are acts of state for purposes of the
California. Plaintiff, Helen Liu, suing in her individual capacity, as heir and
doctrine. Typically, "acts of state" involve acts by which a foreign state "has
special administrator of the estate of Henry Liu, and as guardian ad litem for
exercised its jurisdiction to give effect to its public interests." The ROC
George Liu, has filed this lawsuit alleging that the Republic of China ("ROC")
concedes that the actual killing of Henry Liu in this Country is not an act that is
and the named defendants are responsible for the death of her husband.
subject to the doctrine. And courts have generally not considered the
resolution of a controversy in a foreign tribunal as an act of state.
The complaint pleads six claims. Four claims seek recovery under various legal
theories for the wrongful death of Henry Liu. A fifth claim seeks recovery for
Second, the fact that the litigation of this case may involve embarrassing or
injury to Helen Liu, who was at home when the killing occurred. The final claim
intrusive discovery does not necessarily implicate the act of state doctrine. As
seeks recovery for the injury to Henry Liu for the initial assault on him by his
described above, the traditional purpose of the doctrine has been to avoid
killers.
judicial review of acts of foreign states, not to dismiss cases otherwise properly
before the court on the basis that the required discovery may intrude on the
The individual defendants named in the complaint have been tried and interests of or embarrass a foreign state.
convicted by tribunals in the ROC of criminal conduct relating to the killing of
Henry Liu.[1] The individual defendants include Vice Admiral Wong Hsi-ling,
former director of the ROC's Defense Intelligence Bureau, as well as Major
General Hu Yi-min and Colonel Chen Hu-men, also former officials of the
Defense Intelligence Bureau. The remaining three defendants, Chen Chi-li, Wu Finally, unlike most cases dismissed on act of state grounds, resolution of this
Tun and Tung Kuei-sen, are ROC citizens who were allegedly recruited to assist case would not necessarily require the Court to directly pass judgment on the
in the killing of Henry Liu. legitimacy of an act of state. The Court would not directly challenge the
findings of the ROC courts, although its findings could conceivably be
inconsistent with those of the ROC courts. Instead, the Court's task would be
Currently before the Court is the ROC's motion to dismiss the claims against it
limited to determining whether the ROC is responsible for the killing of Henry
on act of state grounds.
Liu. The ROC wholeheartedly agrees that the killing of Henry Liu was an illegal
act. Consequently, the fact that this Court would be required to find that the
ISSUE: killing of Henry Liu was "wrongful" certainly does not require application of the
act of state doctrine.
Whether the ROC may possibly be liable under respondeat superior for the
activities of the individual defendants named in the complaint.

HELD:

"The act of state doctrine declares that a United States court will not adjudicate
a politically sensitive dispute which would require the court to judge the
legality of the sovereign act of a foreign state." The act of state doctrine is not
jurisdictional, as are questions of sovereign immunity, nor is its observance
mandated by the Constitution. Rather, the doctrine stems from a recognition
by the "Judicial Branch that its engagement in the task of passing on the
validity of the foreign acts of state may hinder rather than further this country's
pursuit of goals both for itself and for the community of nations as a whole in
the international sphere.