Page 145 - Law of Peace, Volume ,

Pam 27-161-1

general standards for determining the validity of expropriations, the pressly stipulates that it does not wish the wurts to pass on the question
alleged combination of retaliation, discrimination, and inadequate com- of validity. SeeAssociation of the Bar of the City of New York, Commit-
pensation makes it patently clear that thisparticular expropriation was in tee on International Law, A Reconsideration of the Act of State
violation of international law. Ifthis view is accurate, it would still be un-
wise for the courts so to determine. Such a decision now would require Doctrine in United States Courts (1959). We should be slow to reject
the drawing of more difficult lines in subsequent cases and these would the representations of the Government that such a reversal of the
involve the possibility of conflict with the Executive view. Even if the Bernstein principle would work serious inroads on the maximum effec-
courts avoided this course, either by presuming the validity of an act of
state whenever the international law standard was thought unclear or by tiveness of United States diplomacy. Often the State Department will
following the State Department declaration in such a situation, the very wish to refrain from taking an official position, particularly at a moment
expression of judicial uncertainty might provide embarrassment to the that would be dictated by the developing of private litigation but might
Executive Branch. be inopportune diplomatically. Adverse domestic consequences might
Another serious consequence of the exception pressed by respond-
ents would be to render uncertain titles in foreign commerce, with the flow from an official stand which could be assuaged, if at all, only by
possible consequence of altering the flow of international trade. If the at- revealing matters best kept secret. Of course, a relevant consideration
titude of the United States courts were unclear, one buying expropriated for the State Department would be the position contemplated in the
goods would not know if he could safely import them into this country. court to hear the case. It ishighly questionable whether the examination
Even were takings known to be invalid, one would have difficulty deter-
mining after goods had changed hands several times whether the partic- of validity by the judiciary should depend on an educated guess by the
ular articles in question were the product of an ineffective state act. Executive as to probable result and, at any rate, should a prediction be
Against the force of such considerations, we find respondents' wun- wrong, the Executive might be embarrassed in its dealings with other
tervailing arguments quite unpersuasive. Their basic contention is that countries. We do not now pass on the Bermgin exception, but even if it
United States wurts could make a sigdkmt contribution to the growth
of international law, a contribution whose importance, it is said, would were deemed valid, its suggested extension is unwarranted.
be magnitied by the relative paucity of decisional law by international However offensive to the public policy of this country and its consti-
bodies. But given the fluidity of present world conditions, the effective- tuent States an expropriation of this kind may be, we conclude that both
ness of such a patchwork approach toward the formulation of an accepta-
ble body of law concerning state responsibility for expropriations is, to the national interest and progress toward the goal of establishing the rule
say the least, highly conjectural. Moreover, it rests upon the sanguine of law among nations are best served by maintaining intact the act of
presupposition that the decisions of the courts of the world's m;(ior state doctrine in this realm of its application.
capital exporting country and principal exponent of the free enterprise ***
system would be accepted as disinterested expressions of sound legal
principle by those adhering to widely different ideologies. The judgment of the Court of Appeals is reversed and the case is re-
It is contended that regardless of the fortuitous circunrstances neces- manded to the District Court for proceedings consistent with this opin-
sary for United States jurisdiction over a case involving a foreign act of
state and the resultant isolated application to any expropriation program ion.
taken as a whole, it is the function of the courts to justly decide in- It is so ordered.
dividual disputes before them. Perhaps the most typical act of state case MR. JUSTICE WHITE, dissenting.
involves the original owner or his assignee suing one not in association
with the expropriating state who has had "title" transferred to him. But I am dismayed that the Court has, with one broad stroke, declared the
it is diicult to regard the claim of the original owner, who otherwise ascertainment and application of international law beyond the compe-
may be recompensed through diplomatic channels, as more demanding tence of the courts of the United States in a large and important category
of judicial cognizance than the claim of title by the innocent thud party
purchaser, who, if the property is taken from him, is without any of cases. I am also disappointed in the Court's declaration that the acts of
remedy. a sovereign state with regard to the property of aliens within its borders
Respondents claim that the economic pressure resulting from the are beyond the reach of international law in the courts of this country.
proposed exception to the act of state doctrine will materially add to the
protection of United States investors. We are not convinced, even However clearly established that law may be, a sovereign may violate it
assuming the relevance of this contention. Expropriations take place for with impunity, except insofar as the political branches of the govern-
a variety of reasons, political and ideological as well as economic. When ment may provide a remedy. This backward-looking doctrine, never
one considers the variety of means possessed by this country to make
secure foreign investment, the persuasive or coercive effect of judicial before declared in this Court, is canied a diswnceming step further: not
invalidation of acts of expropriation dwindles in comparison. The newly only are the courts powerless to question acts of state proscribed by in-
independent states are in need of continuing foreign investment; the ternational law but they are likewise powerless to refuse to adjudicate
creation of a climate unfavorable to such investment by wholesale con- the claim founded upon a foreign law; they must render judgment and
fmtions may well work to their long-run economic disadvantage.
Foreign aid given to many of these countries provides a powerful lever thereby validate the lawless act.Si the Court expressly extends its
in the hands of the oolitical branches to ensure fair treatmentof United ruling to all acts of state expropriating property, however clearly inwn-
States nationals. ul&tely the sanctions of economic embargo and the sistent with the international community, all discriminatory expropria-
freezing of assets in this country may be employed. Any country willing tions of the property of aliens, as for example the taking of properties of
to brave any or all of these consequences is unlikely to be deterred by persons belonging to certain races, religions or nationalities, are entitled
sporadic judicial decisions directly affectingonly property brought to our to automatic validation in the courts of the United States. No other
shores. If the political branches are unwilling to exercise their ample
powers to effect compensation, this reflects a judgment of the national civilized country has found such a rigid rule necessary for the survival of
interest which the judiciary would be ill-advised to undermine indirectly. the executive branch of its government; the executive of no other
It is suggested that if the actof state doctrine is applicable to violations government seems to require such insulation from international law ad-
of international law, it should only be so when the Executive Branch ex- judications in its wurts; and no other judiciary is apparently so incompe-