1 376 U.S. 398 (1964).

2 The qualification stems from the phrase “ . . . in the absence of a treaty or other unambiguous agreement regarding controlling legal principles”. 376 U.S. at 428.

3 See 620(e)(2) of the Foreign Assistance Act of 1961, as amended by the Foreign Assistance Act of 1964, P.L. 88–633, 78 Stat. 1013 and the Foreign Assistance Act of 1965, P.L. 89–171, 79 Stat. 659, 22 U.S.C. § 2370(e)(2) (1970).

4 See French v. Banco Nacional de Cuba, 23 N.Y. 2d 46, 295 N.Y.S. 2d 433, 242 N.E. 2d 704 (1968); Banco Nacional de Cuba v. First National City Bank of New York, 431 F.2d 394 (2d Cir. 1970). See also text at note 24 infra.

5 Letter of Nov. 17, 1970 from John, R. Stevenson, Legal Adviser, Department of State, to E. Robert Seaver, Clerk of the Court, United States Supreme Court. The relevant excerpts of the letter appear in the principal case, 406 U.S. at 764 and more fully at 781. The complete text appears in 442 F.2d at 536–38, as well as in 65 A.J.I.L. 391–93 (1971)Google Scholar.

6 First National City Bank v. Banco Nacional de Cuba, 406 U.S. 759 (1972).

7 The exact amount is in dispute, but that phase of the case did not come before the Supreme Court and is not discussed further herein.

8 See note 3, supra; see also text at note 41 infra.

9 Banco Nacional de Cuba v. First National City Bank of New York, 270 F. Supp. 1004 (S.D.N.Y. 1967).

10 Banco Nacional de Cuba v. First National City Bank of New York, 431 F.2d 394 (2d Cir. 1970).

11 Actually, the amount would have been paid into a blocked account under the Treasury’s Cuban Assets Control Regulations, 31 C.F.R. § 515.101 et seq.

12 The term comes from the letter written in connection with a series of claims brought by Bernstein, a former German Jew, against purchasers of property sold by or taken from him under duress from the Nazi government of Germany. The Court of Appeals at first declined to inquire into Bernstein’s claims on the ground that the act of state doctrine was applicable and the Executive Branch had given no indication of “positive intent” to relax it. Bernstein v. Van Heyghen Frères, S.A., 163 F.2d 246 (2d Cir. 1947); Bernstein v. N.V. Nederlandsche-Amerikaansche Stoomvaart Maatschappij, 173 F.2d 71 (2d Cir. 1949); subsequently the State Department wrote a letter expressing such positive intent, and the Court of Appeals changed its decision, removing all restraints on the inquiry into Bernstein’s claims involving official acts of the German government. Bernstein v. N.V. Nederlandsche-Amerikaansche Stoomvaart Maatschappij, 210 F.2d 375 (2d Cir. 1954).

13 The Supreme Court in Sabbatino expressly declined to decide that question though the tenor of its remarks on the point was negative. See 376 U.S. at 420 and especially at 436.

14 See Stevenson, , “The State Department and Sabbatino—’Ev’n Victors Are By Victories Undone’,” 58 A.J.I.L. 707, 709, 710 (1964)Google Scholar. Before the Sabbatino litigation began, Stevenson argued for a reverse Bernstein doctrine, that is for a presumption that the act of state doctrine not inhibit judicial inquiry into acts of foreign governments alleged to violate international law unless the State Department indicated such inquiry would prejudice the conduct of foreign relations of the United States. See Association of the Bar of the City of New York, Committee on International Law, “A Reconsideration of the Act of State Doctrine in United States Courts” (1959) and Resolution of the Association of the Bar of the City of New York on such Report, 14 The Record of the Association of the Bar 228–29 (1959). Mr. Stevenson was Chairman of the Committee and sponsor of the Resolution.

15 See note 5 supra.

16 400 U.S. 1019 (1971).

17 Banco Nacional de Cuba v. First National City Bank of New York, 442 F.2d 530 (2dCir. 1971).

18 61 A.J.I.L. 182 (1968); 65 A.J.I.L. 195 (1971); 65 A.J.I.L. 812 (1971). See also pp. 000–00 infra.

19 Delson, , “The Act of State Doctrine—Judicial Deference or Abstention?” 66 A.J.I.L. 82 (1972)Google Scholar; Metzger, , “The State Department’s Rô1e in the Judicial Administration of the Act of State Doctrine,” 66 A.J.I.L. 94 (1972)Google Scholar; “Sabbatino’s Progeny: The Act of State Doctrine, the Stevenson, Letter, and Foreign Policy in the Courts,” 66 A.J.I.L. (No. 4) 121–29 (1972)Google Scholar. Laylin, , “Does Failure to Pay Compensation for Expropriated Property Come within the Act of State Doctrine?”, see pp. 823–29 Google Scholar infra.

20 The exact count depends on which judicial decisions noted are included. If all those cases listed under act of state in the annual index were included, the number would be over 40.

21 In Apodaca v. Oregon 406 U.S. 404 (1972), eight justices believed the Sixth Amendment applies to the states; five justices believed the Sixth Amendment requires unanimous juries in serious criminal cases; but the judgment of the Court was to uphold convictions in state courts reached after less than unanimous jury verdicts.

22 348 U.S. 356 (1955).

23 See 376 U.S. at 438–39.

24 It may be that the Supreme Court considered, though it did not state, that the second grant of certiorari, like the first certiorari/remand, was limited to consideration of the letter from the Legal Adviser. That letter raised the Bernstein and Republic of China points, but took no position on interpretation of the Hickenlooper Amendment. Both parties, however, argued the issue before the Supreme Court. The only mention of the point in the four opinions is in a footnote (n. 5) to Justice Brennan’s statement of the case, where he reports the Second Circuit’s disposition of the issue and says: “I agree with my colleagues in leaving that determination undisturbed.”

25 See the discussions in the first decision by the U.S. Court of Appeals in First National City and by the New York Court of Appeals in French, note 4 supra. See also Lowenfeld, , “The Sabbatino Amendment—International Law Meets Civil Procedure,” 59 A.J.I.L. 899, 902–04 (1965)Google Scholar; Henkin, , “Act of State Today: Recollections in Tranquility,” 6 Colum. J. Transnat’l L. 175, 184–86 (1967)Google Scholar; Lillich, , “1970 Survey of New York Law—International Law,” 22 Syracuse L. Rev. 263, 271–80 (1971)Google Scholar.

26 Banco Nacional de Cuba v. Sabbatino, 307 F.2d 845 (2d Cir. 1962).

27 383 F.2d 166 (2d Cir. 1967).

28 383F.2d at 183.

29 376 U.S. at 428.

30 Id. at 429–30.

31 See 376 U.S. at 433, n. 37.

32 It is also possible to point to the other part of the Second Circuit’s opinion in Farr—the suggestion that Congress had given content to the international law obligation of other states towards United States investors in the original (1962) Hickenlooper Amendment directed to cutting off of foreign aid (22 U.S.C. § 2370(e)(1) (1970)). But to rely on this basis for a definition of the substance of international law is to rest on a foundation which the Court of Appeals itself was not prepared to examine—”whether Congress can thus specify how our United States courts must decide questions of international law . . . .” 383 F.2d at 185.

33 Judge Rehnquist’s opinion said: “We . . . remand the case [to the Second Circuit] for consideration of respondent’s alternative bases of attack of the judgment of the District Court,” 406 U.S. at 770. The dissent observed that “. . . respondent [Banco Nacional] argues with some substance that the Cuban nationalization of petitioner’s properties, unlike the expropriation at issue in Sabbatino, was not discriminatory against United States citizens,” 406 U.S. at 785.

34 Compare the following statement contained in the brief amicus curiae of the Committee on International Law of the Association of the Bar of the City of New York in Sabbatino: “The application by our courts of international law in determining whether to give effect here to a taking of property by a foreign state will assist the further judicial exposition of a comprehensive body of international law on the subject of the taking of alien property. The adjudication of lawsuits in courts of law is the only effective means of maintaining and developing rules of international law and general acceptance of and respect for that law. Only the imprimatur of a court is capable of attesting the jural quality of a rule of international law, and such an imprimatur cannot be impressed by the political branch of a government whose decisions are designed to meet the political exigencies of each situation as it arises.”

The quotation is from Jessup, “Has the Supreme Court Abdicated One of Its Functions?” 40 A.J.I.L. 168, 172 (1946). Interestingly enough, Jessup was protesting the Supreme Court’s decision in Republic of Mexico v. Hoffman, 324 U.S. 30 (1945) to make the views of the Executive Branch the guiding principle in sovereign immunity cases. Jessup’s phrase responds to a statement by Justice Cardozo that “international law, or the law that governs between states, has, at times, like the common law within states, a twilight existence during which it is hardly distinguishable from morality or justice, till at length the imprimatur of a court attests its jural quality”. New Jersey v. Delaware 291 U.S. 361, 383 (1934).

35 See text at note 29.

36 Barcelona Traoton Case, [1970] I.C.J. 3.

37 In Sabbatino, the defendant sugar broker, Farr, Whitlock received from Banco Nacional’s agent the bill of lading for a shipment of sugar with a sight draft attached, but did not make payment. The defense to Banco Nacional’s action for conversion was the conflicting claim of C.A.V., the former owner of the sugar, replaced almost immediately by Mr. Sabbatino, a receiver appointed by the New York court for CA.V’s New York assets. Thus the assertion that plaintiff did not have good title because of violation of international law was raised as an affirmative defense, and the act of state doctrine was raised in opposition to that defense.

38 Anglo-Iranian Oil Company v. S.U.P.O.R. (The Miriella) 76 II Foro Italiano I, 719, [1953] Intl L. Rep. 19 (Trib. di Venezia, March 11, 1953); Anglo-Iranian Oil Company v. Soc. S.U.P.O.R. 78 II Foro Italiano I, 256 [1955] Intl L. Rep. 23 (Trib. di Roma Sept. 13, 1954).

39 Anglo-Iranian Oil Company v. Idemitsu Kosan Kabushiki Kaisha, [1953] Intl L. Rep. 305 (Dist. Court of Tokyo 1953), aff’d [1953] Intl L. Rep. 312 (High Court of Tokyo 1953).

40 Anglo-Iranian Oil Co. Ltd. v. Jaffrate (The Rose Mary) [1953] 1 W.L.R. 246, [1953] Intl L. Rep. 316 (Sup. Ct. Aden 1953).

41 22U.S.C. § 2370(e)(2) (1970).

42 British Petroleum Company, the successor to the plaintiff in the cases at notes 38–40 brought a similar action, arising out of the termination of its concession in Libya in the Court of Syracuse, Italy. See 11 I.L.M. 328 (1972). The action is pending at this writing. See also note 60 infra.

43 In its letter to the Supreme Court, the State Department wrote: “We regret that our views could not have been brought to the attention of the lower courts. Unfortunately, it was only after the not yet published opinion of the Second Circuit Court of Appeals was handed down that the question of the appropriateness of State Department action arose, since it did not become clear until that time that the Sabbatino Amendment would be considered inapplicable. No formal request for a statement by the Department was made in this case until October 14, 1970, one day after the petition for writ of certiorari was filed.” The request referred to was by the petitioner, First National City Bank.

44 Banco National de Cuba v. Farr, 243 F. Supp. 957, 980–81 (S.D.N.Y. 1965).

45 The Department first tried to get out of answering. In its reply to a letter from counsel for plaintiff, it relied on advice of the Justice Department that the amendment was not applicable to the case at bar. When the court held that the amendment was applicable, it withheld entry of judgment for 60 days (and more if necessary) for the express purpose of giving the Executive Branch time to make the determination under the amendment.

46 Indeed in the two analogous situations the executive has, in the view of the courts, come out wrong both times—once each way. In Farr, the Department was of the view that the amendment did not apply, but the court held it did (note 45 supra); in First National City the Department was of the view that the amendment did apply, but the court held it did not (note 43 supra).

47 An attempt was made in Sabbarino to construe a letter very much along these lines as a Bernstein letter, though in that case the letter was an informal one to counsel for an amicus curiae, and not an official response to a request from the Court. The attempt succeeded (and proved decisive) in the Court of Appeals, 307 F.2d at 857–59; the Supreme Court rejected this interpretation, but only following publication of the entire correspondence and clarification by the State Department and the Solicitor General.

48 See text at note 15 supra.

49 The phrase appears both in the memorandum in support of the petition for certiorari (p. 3) and in the memorandum in support of reversal (p. 3). The Solicitor General did not ask for leave to present oral argument, and did not submit a full-fledged brief. In contrast, when the Sabbatino case came before the Supreme Court in 1963, the Justice Department took a strong position, with then Deputy Attorney General Katzenbach personally making the argument, his first before the Supreme Court.

50 See Goodwin, R., “Letter from Peru,” The New Yorker, (May 17, 1969) 45 at 80–86 Google Scholar.

51 Compare text at notes 29–31 supra.

52 See, e.g., Fed. R. Civ. P. 12 (c). Note that the analogy to summary judgment— i.e. a device between full trial and judgment on the pleadings making use of documents and affidavits—would not ordinarily be available in the absence of agreement by both sides to decision in the Department.

53 See note 33 supra.

54 For a description of the present practice and a discussion of some of its difficulties, see Chayes, A., Ehrlich, T., and Lowenfeld, A., 1 International Legal Process 147–50 (1968)Google Scholar; Lowenfeld, , “Claims Against Foreign States—A Proposal for Reform of United States Law,” 44 N.Y.U.L. Rev. 901, 912–13 (1969)Google Scholar. The earlier practice in which sovereign immunity cases were “decided” in the Department without any regularized opportunity for the plaintiff to be heard were strongly criticized in Cardozo, M., “Sovereign Immunity: The Plaintiff Deserves a Day in Court,” 67 Harv. L. Rev. 608 (1954)CrossRefGoogle Scholar.

55 318 U.S. 578 (1943).

56 324 U.S. 30 (1945). Compare the attack on this decision by Prof. Jessup cited at note 34 supra.

57 At this writing, the Legal Adviser’s proposal on Immunities of Foreign States has not been officially adopted by the Department or formally published, though various drafts have been the subject of public discussions. The present author’s article cited at note 54 was an outgrowth of a study related to an earlier effort to reduce or eliminate the Department’s role in sovereign immunity cases; see also Belman, , “New Departures in the Law of Sovereign Immunity,” 1969 Proceedings Am. Soc. Intl L. 182 Google Scholar. While the standards for granting immunity in the proposal under consideration by the present administration are formulated somewhat differently, the basic thrust of the two proposals, including elimination of a decision-making role for the State Department, are the same.

58 It was in this context that Justice Brennan, dissenting in First National City, wrote: “Thus the assumption that the Legal Adviser’s letter removes the possibility of interference with the executive in the conduct of foreign affairs is plainly mistaken,” 406 U.S. at 785.

59 “Economic Assistance and Investment Security in Developing Nation,” Jan. 19, 1972, 8 Weekly Comp. Pres. Documents 64 (1972).

60 One such episode, which took place while the First National City case was pending, involved efforts by the Iraq National Oil Company to make long term marketing arrangements for the output of oil from its North Rumaila field. That field had been part of the inter-war concession agreements between the Western-owned Iraq Petroleum Company and Iraq, but had not been worked by the Company. In 1961 Iraq nationalized all areas of the original concessions not actually worked; in 1969 it made an agreement with the Soviet Union for technical assistance in developing the field, and for construction of a pipeline, due to come into operation in April 1972. On May 3 the following advertisement appeared prominently in the New York Times and other newspapers in the United States and Europe.

IRAQ—NORTH RUMAILA

Announcement by Basrah Petroleum Company Limited

By Law 80 of 1961, the Iraq Government purported to deprive Iraq Petroleum Company Limited, Mosul Petroleum Company Limited and Basrah Petroleum Company Limited (which are British Companies) of the greater part of their respective concession areas in Iraq. This action constituted a breach by the Iraq Government of its Agreements with the Companies. . . .

This conduct of the Iraq Government is a breach of International Law and such wrongful acts are incapable of depriving the Companies of their rights under the relevant Agreements.

The dispute remains unresolved despite numerous attempts to settle it by negotiations. . . .

Accordingly, the attention of all those who may in any way be concerned is drawn to the continued existence of the rights of the Basrah Petroleum Company. Any oil shipped from Fao will in fact be oil which has been extracted from the area covered by the Company’s Convention of 29th July 1938. The Company will, therefore, take such legal steps as it may consider necessary or desirable to protect all its rights, including especially its title to any such oil.

The threat of suit, coupled with other pressures from the major oil companies, proved too much for potential purchasers, who would have had to undertake substantial investments in refining and marketing, and who had no way of knowing when if ever they might actually be able to use the oil they were interested in, and negotiations were broken off. Thereafter, in quick succession, all of IPCs operations in Iraq were nationalized, Iraq made an arrangement for delivery of oil from the North Rumaila field to the Soviet Union, and a special deal, apparently behind IPC’s back, was negotiated between Iraq and France. See New York Times May 18, at 67, col. 4; June 2, at 1 col. 3; June 19, at 51, col. 8; July 8, at 31, col. 4, 1972.

61 Early in July 1972 Iraq Petroleum Company and the Government of Iraq agreed to begin negotiations under the auspices of the Organization of Petroleum Exporting States. On July 17, 1972, IPC published an advertisement announcing this fact and stating the following:

In view of this mediation the Company announces that it will, without prejudice to such rights, abstain from commencing legal proceedings in relation to oil from the said oilfields lifted prior to any declaration by one or both of the mediators regarding the status of the mediation.

See New York Times, July 17, 1972 at 44, cols. 1–2.

62 175 U.S. 677 (1900). The full text of the paragraph referred to by Justice Rehnquist in First National City and by both the majority and dissent in Sabbatino, is as follows (175 U.S. at 700): “International law is part of our law, and must be ascertained and administered by the courts of justice of appropriate jurisdiction, as often as questions of right depending upon it are duly presented for their determination. For this purpose, where there is no treaty, and no controlling executive or legislative act or judicial decision, resort must be had to the customs and usages of civilized nations; and, as evidence of these, to the works of jurists and commentators, who by years of labor, research and experience, have made themseleves peculiarly well acquainted with the subjects of which they treat. Such works are resorted to by judicial tribunals, not for the speculations of their authors concerning what the law ought to be, but for trustworthy evidence of what the law really is.”

63 See Cooper v. Aaron, 358 U.S. 1 at 17–20 (1958).

64 369 U.S. 186 esp. at 217 (1962).

65 Compare the comment of Justice Brennan quoted at note 58 supra.

66 Note, for example, the emphasis in the dissent in First National City, as in the Court of Appeals in Sabbatino, on the question of discrimination. See note 33 supra.

67 See 3 Hackworth, G., Digest of International Law 655 at 658–59 (1942)Google Scholar.

68 369 U.S. at 267.

69 See Convention on Extradition between the United States and Sweden signed at Washington Oct. 24, 1961, 14 U.S.T. 1845, T.I.A.S. 5496, 494 U.N.T.S. 141 (1963).

70 Compare, e.g., the denials of certiorari or jurisdiction and the dissents of Justice Douglas and others in Mitchell v. United States, 386 U.S. 972 (1967); Mora v. McNamara, 389 U.S. 934 (1967); McArthur v. Clifford, 393 U.S. 1002 (1968); and compare Massachusetts v. Laird, 443 F.2d 1039 (2d Cir. 1971) with Commonwealth of Massachusetts v. Laird, 451 F.2d (1st Cir. 1971).

71 It is worth at least a footnote to point out the effect on the case at bar of the change of administrations. The Legal Adviser wrote to the Supreme Court that the State Department had not made its views known earlier because it was not until the Second Circuit came down with its first decision that it became clear that the Sabbatino Amendment would not apply—i.e. that First National City was a situation B case as discussed above. That statement is completely true. It is also true, however, that neither of the two preceding Legal Advisers of the Department, nor, it is believed the prior Secretary or Under Secretaries, would have taken the view taken by Mr. Stevenson. For his part Stevenson has been completely consistent. See note 14 supra. But the Department itself has made a substantial shift during the pendency of the case, not as a result of any change in relations with Cuba, but as a result of a change in Washington and in particular a change in Legal Advisers.

For a comparison between the Stevenson letter and the State/Justice view as expressed in the brief as amicus curiae in Sabbatino, see Metzger, , “The State Department’s Role in the Judicial Administration of the Act of State Doctrine,” 66 A.J.I.L. 94, at 98 (1972)Google Scholar.

72 Compare on this point Sabbatino at 398 U.S. 432–33, quoted in the dissenting opinion in First National City, 406 U.S. 790–91.

73 Compare on this point the court decisions in 1959 arising out of the nationalization of Dutch-owned properties in Indonesia, in which Netherlands courts went one way, German courts the other. See Domke, , “Indonesian Nationalization Measures Before Foreign Courts,” 54 A.J.I.L. 304 (1960)Google Scholar.