In alleged expropriation of U.S. assets by Venezuela, D.C. Circuit holds that Venezuela can be sued in the U.S. if the expropriation was motivated by discriminatory animus; discriminatory takings violate international law.
Soon after signing the contracts, PDVSA fell behind in its payments. PDVSA never denied its contractual debt, but no payments were made. After overdue receivables topped $100 million, H&P-V announced in January 2009 that it would not renew the contracts absent "an improvement in receivable collections." By November 2009, H&P-V had fulfilled all of its contractual obligations. As the payment from PDVSA was still pending, H&P-V disassembled its drilling rigs, and stacked the equipment in its yards.
In June 2010, PDVSA employees, assisted by armed soldiers of the Venezuelan National Guard, blockaded H&P-V's premises in Western and Eastern Venezuela, acknowledging that it erected the blockade to prevent H&P-V from removing its rigs and other assets from its premises, and to force H&P-V to negotiate new contract terms immediately.
Upon a series of press releases by PDVSA which are now central to H&P-V's expropriation claim, the Venezuelan National Assembly issued an official "Bill of Agreement" declaring H&P-V's property to be "of public benefit and good" and recommending that then-President Hugo Chavez promulgate a Decree of Expropriation. President Chavez's decree emphasized that "the availability of drilling equipment [such as H&P-V's] is very low both in the country and at world level, and the lack thereof would affect [Venezuela's national oil drilling] Plan." It directed PDVSA to take "forcible" possession of H&P-V drilling rigs and other property. PDVSA issued a press release that stated that H&P-V's rigs "are specialized drills we need for more complex sites" and "will be very useful."
During a political rally at H&P-V's Eastern site, Rafael Ramirez, Venezuela's Minister of Energy and Petroleum and PDVSA's President, referred to H&P-V as an "American company" with "foreign gentlemen investors" and Venezuelan workers who would now "become part of [PDVSA's] payroll."
PDVSA filed two eminent domain actions in Venezuelan courts for H&P-V's compensation of expropriated property. H&P-V has yet to receive service of process in the first proceeding, while the second one has been stayed indefinitely. H&P-V and its American parent, H&PIDC, filed a two-count complaint under the Foreign Sovereign Immunities Act ("FSIA") in the United States District Court for the District of Columbia. The first count was brought against PDVSA and Venezuela, alleged a taking of property in violation of international law, and asserted jurisdiction under FSIA's expropriation exception. The second count, brought only against PDVSA, alleged breach of the ten drilling contracts and asserted jurisdiction under the FSIA's commercial activity exception.
Venezuela and PDVSA moved to dismiss H&PV's complaint. As the grounds for dismissal they stated that neither FSIA exception applies and that the act-of-state doctrine, under which American courts "will not question the validity of public acts (acts jure imperii) performed by other sovereigns within their own borders," Republic of Austria v. Altmann, 541 U.S. 677, 700 (2004), bars the suit altogether. The parties then filed a joint stipulation in which they agreed to brief four threshold issues:
(1) whether, for purposes of determining if a "taking in violation of international law" has occurred under the FSIA's expropriation exception, H&PV is a national of Venezuela under international law; (2) whether H&PIDC has standing to assert a taking in violation of international law on the basis of Venezuela's expropriation of H&PV's property; (3) whether plaintiffs' expropriation claims are barred by the act-of-state doctrine, including whether this defense may be adjudicated prior to resolution of Venezuela's challenges to the court's subject matter jurisdiction; and (4) whether, for purposes of determining the applicability of the FSIA's commercial activity exception, plaintiffs have sufficiently alleged a "direct effect" in the United States within the meaning of that provision.
The district court resolved the first question in Venezuela's favor and the other three in H&P-V's favor. Both sides appealed.
The United States Court of Appeals for the District of Columbia Circuit affirms the district court's denial of Venezuela's motion to dismiss H&PIDC's expropriation claim, and reverses and remandes for further proceedings in respect to the other three issues.
"The FSIA 'establishes a comprehensive framework for determining whether a court in this country, state or federal, may exercise jurisdiction over a foreign state.' Republic of Argentina v. Weltover, Inc., 504 U.S. 607, 610 (1992). The Act provides that 'a foreign state shall be immune from the jurisdiction of the courts of the United States and of the States,' 28 U.S.C. [section] 1604 (emphasis added), unless one of several exceptions applies, id. [section][section] 1605-07." [Slip op. 5]
Because H&P-V and H&PIDC invoke the expropriation exception for their takings claim, while H&P-V invokes the commercial activity exception for its breach of contract claim, the Court addresses each of these exceptions in turn.
The expropriation exception, "[...] contained in FSIA section 1605(a)(3), denies foreign sovereign immunity 'in any case ... in which rights in property taken in violation of international law are in issue.' 28 U.S.C. [section] 1605(a)(3). [...]." Venezuela argued that the exception is inapplicable here because: as a Venezuelan national, H&P-V may not claim a taking in violation of international law; and because under generally applicable corporate law principles, H&PIDC has no "rights in property" belonging to its subsidiary and thus lacks standing. [Slip op. 5] "In deciding a motion to dismiss for lack of jurisdiction, we are mindful of the distinction between jurisdiction--a court's constitutional or statutory power to decide a case--and ultimate success on the merits. As the Supreme Court has explained, '[jurisdiction ... is not defeated ... by the possibility that the averments [in a complaint] might fail to state a cause of action on which petitioners could actually recover.' Bell v. Hood, 327 U.S. 678, 682 (1946). What plaintiffs must allege to survive a jurisdictional challenge, then, 'is obviously far less demanding than what would be required for the plaintiff's case to survive a summary judgment motion' or a trial on the merits. Agudas Chasidei Chabad of U.S. v. Russian Federation, 528 F.3d 934, 940 (D.C. Cir. 2008). In an FSIA case, we will grant a motion to dismiss on the grounds that the plaintiff has failed to plead a 'taking in violation of international law' or has no 'rights in property ... in issue' only if the claims are 'wholly insubstantial or frivolous.' Id. at 943. A claim fails to meet this exceptionally low bar if prior judicial decisions 'inescapably render the claim frivolous' and 'completely devoid of merit.' Hagans v. Lavine, 415 U.S. 528, 538, 543 (1974). '[P]revious decisions that merely render claims of doubtful or questionable merit do not render them insubstantial' for jurisdictional purposes. Id. at 538. Applying this standard to the present case, and viewing the complaint 'in the light most favorable to the plaintiff,' Sachs v. Bose, 201 F.2d 210, 210 (D.C. Cir. 1952), we first consider whether H&PV has asserted a non-frivolous international expropriation claim and then ask whether H&PIDC has 'put its rights in property in issue in a non-frivolous way,' Chabad, 528 F.3d at 941."
"As to the first inquiry, the parties begin on common ground. All agree that for purposes of international law, 'a corporation has the nationality of the state under the laws of which the corporation is organized,' Restatement (Third) of Foreign Relations Law [section] 213 (1987), and that generally, a foreign sovereign's expropriation of its own national's property does not violate international law, United States v. Belmont, 301 U.S. 324, 332 (1937). The Supreme Court has summarized the latter principle, known as the 'domestic takings rule,' this way: 'What another country has done in the way of taking over property of its nationals, and especially of its corporations, is not a matter for judicial consideration here. Such nationals must look to their own government for any redress to which they may be entitled.' Id."
"According to Venezuela, the domestic takings rule ends this case because H&PV, as a Venezuelan national, may not seek redress in an American court for wrongs suffered in its home country. This argument has a good deal of appeal. Having freely chosen to incorporate under Venezuelan law, H&PV operated in that country for many years and reaped the benefits of its choice, including several extremely lucrative contracts with the Venezuelan government. Given this, and especially given that H&PV expressly agreed that these contracts would be governed by Venezuelan law in Venezuelan courts, one might conclude that H&PV should live with the consequences of its bargain." [Slip op. 6-7] H&P-V argued that Venezuela had unreasonably discriminated against it on the basis of its sole shareholder's nationality, thus implicating an exception to the domestic takings rule. In support of its argument, H&P-V cited Banco Nacional de Cuba v. Sabbatino, 307 F.2d 845, 861 (2d Cir. 1962), in which the Second Circuit determined that the Cuban government's expropriation of Cuban corporation property, whose 90% shares were owned by Americans and the official expropriation decree "clearly indicated that the property was seized because [the corporation] was owned and controlled by Americans." Id., qualified as a taking in violation of international law.
"This, the Second Circuit held, justified disregarding the domestic takings rule: 'When a foreign state treats a corporation in a particular way because of the nationality of its shareholders, it would be inconsistent for [the court] in passing on the validity of that treatment to look only to the nationality of the corporate fiction.' Id. (internal quotation marks omitted). Although the Supreme Court vacated this decision on other grounds, the Second Circuit later reiterated 'with emphasis' its decision to disregard the domestic takings rule in the face of Cuba's anti-American discrimination. Banco Nacional de Cuba v. Farr, 383 F.2d 166, 185 (2d Cir. 1967)." [Slip op. 7]
H&P-V also relied on the Restatement of Foreign Relations Law, which recognizes discriminatory takings as a violation of international law. Specifically, on section 712 which suggests that "a program of taking that singles out aliens generally, or aliens of a particular nationality, or particular aliens, would violate international law." Restatement (Third) of Foreign Relations Law [section] 712 cmt. f. (1987).
"'Discrimination,' the Restatement continues, 'implies unreasonable distinction,' and so '[t]akings that invidiously single out property of persons of a particular nationality would be [discriminatory],' whereas 'classifications, even if based on nationality, that are rationally related to the state's security or economic policies might not be [discriminatory]' and thus not in violation of international law. Id. (emphasis added). The reporter's notes to section 712 cite Sabbatino as an example of a discriminatory taking, explaining that Cuba's express 'purpose was to retaliate against United States nationals for acts of their Government, and was directed against United States nationals exclusively.' Id. [section] 712 reporter's note 5." [Slip op. 7]
H&P-V insisted that its complaint, which emphasizes the Venezuelan government's well-known anti-American sentiment, as well as PDVSA's statements decrying the "American empire," successfully pleads a discriminatory takings claim, while Venezuela urged the Court not to "be the first to revive the overturned Second Circuit precedent" because "there is no internationally recognized exception--based on 'discrimination' or otherwise--to the domestic takings rule." Defs.' Cross Br. 28, 30.
"Dated and uncited as it may be, however, Sabbatino remains good law. See Farr, 383 F.2d at 166 (affirming Sabbatino's discriminatory takings rationale 'with emphasis'). Although 'we are not bound by the decisions of other circuits,' Dissent at 3 (emphasis added), we may 'of course ... find the reasons given for such [decisions] persuasive,' Northwest Forest Resource Council v. Dombeck, 107 F.3d 897, 900 (D.C. Cir. 1997) ...--especially where, as here, our circuit has yet to consider the issue. Moreover, neither Venezuela nor the dissent cites any decision from any circuit that so completely forecloses H&PV's discriminatory takings theory as to 'inescapably render the claim frivolous' and 'completely devoid of merit.' Hagans, 415 U.S. at 538 (emphases added). Given this, and given the Restatement's recognition of discriminatory takings claims, we believe that H&PV has satisfied this Circuit's forgiving standard for surviving a motion to dismiss in an FSIA case."
"[...] Venezuela's claims that even if international law recognizes discriminatory takings, "plaintiffs have failed to plead facts to support it" because "the motivation for the expropriation was Venezuela's need for H&PV's uniquely powerful rigs." Defs.' Br. 31. [...]Based on these statements, it may well be, as the Restatement puts it, that the taking was 'rationally related to [Venezuela's] security or economic policies.' Restatement (Third) of Foreign Relations Law [section] 712 cmt. f (1987)."
"Other statements, however, went well beyond Venezuela's economic and security needs and could be viewed as demonstrating 'unreasonable distinction' based on nationality. Id. PDVSA's press release referred to the 'American empire,' Compl. [paragraph] 108, and a National Assembly member warned that opponents of the expropriation were supporting America's mission of "war ... through the large military industry of the Empire and its allies, id. [paragraph] 105. At this stage of the litigation, where we view the complaint 'in the light most favorable to the plaintiff,' Sachs, 201 F.2d at 210, these statements are sufficient to plead a 'non-frivolous' discriminatory takings claim, Chabad, 528 F.3d at 941." [Slip op. 5]
The Court then analyzes Venezuela's argument that H&PIDC may not invoke the FSIA's expropriation exception because it has no rights in H&P-V's property. As Venezuela reasoned, the expropriation exception applies only to plaintiffs having "rights in property" taken in violation of international law.
"In support of this argument, Venezuela relies almost entirely on Dole Food Co. v. Patrickson, 538 U.S. 468 (2003), an FSIA case in which the Supreme Court held that '[a] corporate parent which owns the shares of a subsidiary does not, for that reason alone, own or have legal title to the assets of the subsidiary.' Id. at 475. This, according to Venezuela, means that 'in enacting the FSIA, Congress specifically intended that basic corporate law concepts inform the interpretation of the statute,' Defs.' Opening Br. 23, and thus 'rights in property' must mean corporate ownership." [Slip op. 9]
"By contrast, FSIA section 1605(a)(3), the expropriation exception, speaks only of 'rights in property' generally, not ownership in shares. The Supreme Court's analysis of another FSIA exception is instructive. In Permanent Mission of India to the United Nations v. City of New York, the Court examined the FSIA's abrogation of sovereign immunity in cases involving 'rights in immovable property situated in the United States.' 551 U.S. 193, 197 (2007) (quoting 28 U.S.C. [section] 1605(a)(4)). An instrumentality of the Indian government argued that the FSIA 'limits the reach of the exception to actions contesting ownership or possession.' Id. Seeing no such limitation in the statute's text, the Court concluded that 'the exception focuses more broadly on 'rights in' property.' Id. at 198." [Slip op. 9-10]
"So too here. The expropriation exception requires only that 'rights in property ... are in issue,' [section] 1605(a)(3), and we have recognized that corporate ownership aside, shareholders may have rights in corporate property. In Ramirez de Arellano v. Weinberger, for example, we considered whether an American citizen, the sole shareholder of three Honduran corporations, had a 'cognizable property interest' in land owned by the Honduran corporations and seized by the United States government. 745 F.2d 1500, 1517 (D.C. Cir. 1984), cert. granted, judgment vacated on other grounds, 471 U.S. 1113 (1985). Whether Ramirez had property rights in the land, we held, 'does not turn on whether certain rights which may belong only to the Honduran corporation may be asserted 'derivatively' by the sole United States shareholders.' Id. at 1516. Instead, property rights depend upon whether the shareholders have 'rights of their own, which exist by virtue of their exclusive beneficial ownership, control, and possession of the properties and businesses allegedly seized.' Id. We thus concluded that notwithstanding corporate ownership, Ramirez had property rights in the Honduran property that he 'personally controlled and managed ... for over 20 years.' Id. at 1520. 'The corporate ownership of land and property,' we held, 'does not deprive the sole beneficial owners--United States citizens--of a property interest.' Id. at 1518; ..." [Slip op. 10]
The Court then addresses the Dissenter:
"Our dissenting colleague questions the precedential value of Ramirez because it was vacated by the Supreme Court on other grounds. Dissent at 45. But we have held that '[w]hen the Supreme Court vacates a judgment of this court without addressing the merits of a particular holding in the panel opinion, that holding 'continue[s] to have precedential weight, and in the absence of contrary authority, we do not disturb' it.' United States v. Adewani, 467 F.3d 1340, 1342 (D.C. Cir. 2006) (quoting Action Alliance of Senior Citizens of Greater Philadelphia v. Sullivan, 930 F2d 77, 83 (D.C. Cir. 1991)). Because the Supreme Court did not address Ramirez's holding that the shareholders had property rights in their corporation's assets, but instead vacated and remanded in light of the U.S. military's subsequent withdrawal of all personnel and facilities from the plaintiffs' land, De Arellano v. Weinberger, 788 F.2d 762, 764 (D.C. Cir. 1986) (en banc) (per curiam); see Weinberger v. Ramirez de Arellano, 471 U.S. 1113 (1985), that holding continues to have 'precedential weight,' Adewani, 467 F3d at 1342." [Slip op. 10]
"Ramirez is especially persuasive in this case because H&PIDC, like the American citizen in Ramirez, was the foreign subsidiary's sole shareholder. Moreover, H&PIDC provided the rigs central to this dispute, Compl. [paragraph][paragraph] 9, 12932, and as a result of the expropriation, has suffered a total loss of control over its subsidiary, which has ceased operating as an ongoing enterprise because all of its assets were taken, Compl. [paragraph][paragraph] 75, 8182. Under these circumstances, H&PIDC has 'put its rights in property in issue in a non-frivolous way.' Chabad, 528 F3d at 941. No more is required to survive a motion to dismiss under the FSIA...." [Slip op. 11]
The Court then analyzes H&P-V's argument that the FSIA's commercial activity exception extends to its breach of contract claim against PDVSA, and states:
"This exception, contained in section 1605(a) (2), nullifies foreign sovereign immunity in any case"
"'in which the action is based upon a commercial activity carried on in the United States by the foreign state; or upon an act performed in the United States in connection with a commercial activity of the foreign state elsewhere; or upon an act outside the territory of the United States in connection with a commercial activity of the foreign state elsewhere and that act causes a direct effect in the United States.'"
"28 U.S.C. [section] 1605(a)(2)(emphases added). Because this case involves a contract executed and performed outside the United States, our analysis focuses on the exception's third clause--specifically, whether Venezuela's breach of the drilling contracts 'cause [d] a direct effect in the United States.' Id. A direct effect 'is one which has no intervening element, but, rather, flows in a straight line without deviation or interruption.' Princz v. Federal Republic of Germany, 26 F.3d 1166, 1172 (D.C. Cir. 1994). H&PV alleges three such effects."
"First, relying on our decision in Cruise Connections Charter Management v. Canada, 600 F.3d 661 (D.C. Cir. 2010), H&PV argues that its contracts with third-party vendors in the United States, made pursuant to the drilling contracts, constitute a direct effect. In Cruise Connections, we found a 'direct effect' where the Royal Canadian Mounted Police (RCMP) cancelled a contract with a U.S. corporation to provide cruise ships during the 2010 Winter Olympics. Id. at 662. H&PV argues that just as in Cruise Connections, where the RCMP contract "required ... subcontracts] with two U.S. based cruise lines," id., its agreements with PDVSA required contracts with U.S. based companies for various drilling rig parts. PDVSA responds that even if H&PV subcontracted with U.S. vendors, nothing in the drilling contracts obligated them to do so."
"We need not resolve this dispute, however, because even assuming that the drilling contracts required subcontracts with American companies, those contracts had no direct effect in the United States. [...]H&PV concedes that none of the third-party contracts was breached. Compl. [paragraph][paragraph] 126128, 135. As a result, no losses, and therefore no 'direct effect,' occurred in the United States." [Slip op. 1112]
"Relying on the Supreme Court's decision in Republic of Argentina v. Weltover, 504 U.S. 607 (1992), H&PV claims a second effect in the United States: that PDVSA made payments to Helmerich & Payne's Oklahoma bank account. In Weltover, Argentina had issued bonds providing for payment through a currency transfer on the London, Frankfurt, Zurich, or New York markets at the discretion of the creditor. Id. at 60910. Two Panamanian bondholders demanded payment in New York, and when Argentina failed to pay, brought suit in the United States, claiming jurisdiction under the commercial activity exception. Id. at 610. The Court had 'little difficulty' finding a direct effect because, as a result of Argentina's failure to meet its payment obligations, a contractually required payment into an American bank was not made. Id. at 61819. Relying on Weltover, H&PV emphasizes that both the eastern and western contracts permitted PDVSA to pay a portion of invoiced amounts in U.S. dollars into an American bank--indeed, PDVSA ultimately paid $65 million this way. Compl. [paragraph] 44. As in Weltover, then, PDVSA's breach meant that money 'that was supposed to have been delivered to [an American] bank for deposit was not forthcoming.' 504 U.S. at 619. But as PDVSA points out, the contracts gave H&PV no power to demand payment in the United States. Rather, under both the eastern and western contracts, PDVSA could choose to deposit payments in bolivars in Venezuelan banks whenever, in its 'exclusive discretion' and 'judgment,' it 'deem[ed] it discretionally convenient.' Compl. [paragraph][paragraph] 78, 85, 82." [Slip op. 13]
"This case presents facts akin to those we examined in Goodman Holdings v. Rafidain Bank, 26 F.3d 1143, 1144 (D.C. Cir. 1994), in which an Iraqi bank failed to pay on letters of credit, and the payee claimed that the bank's prior payments from its accounts in the United States constituted a direct effect. We rejected this contention because pursuant to the letters of credit, Iraq 'might well have paid ... from funds in United States banks but it might just as well have done so from accounts located outside of the United States.' Id. at 114647. Such unlimited discretion, we concluded, meant that unlike in Weltover, no money was 'supposed' to have been paid' in the United States. Id. at 1146 (quoting Weltover, 504 U.S. at 608). In other words, where, as here, the alleged effect depends solely on a foreign government's discretion, we cannot say that it 'flows in a straight line without deviation or interruption.' Princz, 26 F.3d at 1172." [Slip op. 13-14]
"Finally, relying on McKesson Corp. v. Islamic Republic of Iran, 52 F.3d 346 (D.C. Cir. 1995), H&PV contends that PDVSA's breach halted a flow of commerce between Venezuela and the United States, thus causing a direct effect. McKesson, an American corporation, alleged that the Iranian government had illegally divested it of its investment in a dairy located in Iran. Foremost-McKesson, Inc. v. Islamic Republic of Iran, 905 F.2d 438, 441 (D.C. Cir. 1990). In doing so, we concluded, Iran halted a 'constant flow of capital, management personnel, engineering data, machinery, equipment, materials and packaging, between the United States and Iran to support the operation of [the dairy],' thereby causing a direct effect. Id. at 451. H&PV insists that the same is true here. We think not. Iran's actions in 'freezing-out American corporations in their ownership of [the dairy]' had the direct and immediate effect of halting a flow of resources and capital between the United States and Iran. Id. By contrast, any interruptions in commerce between the United States and PDVSA flowed immediately not from PDVSA's breach of contract, but rather from Helmerich & Payne's decision to cease business in Venezuela. And, given that the contracts were for set periods of time ranging from five months to one year, there was no guarantee of future business between Helmerich & Payne and PDVSA beyond those contracts." [Slip op. 14]
The Court affirms the district court's denial of Venezuela's motion to dismiss H&PIDC's expropriation claim. In all other respects, the Court reverses and remands for further proceedings consistent with this opinion.
SENTELLE, Senior Circuit Judge, dissents in part and concurs in part:
"[...] [D]espite my general agreement with the majority's exposition of the facts underlying the claim for expropriation, I dissent from the conclusion that those facts bring this case within the expropriation exception set forth in 28 U.S.C. [section] 1605(a)(3)." [Slip op. 15]
"Unlike the majority, I believe that Venezuela's position is well taken. When appellees chose to incorporate under Venezuelan law, they bargained for treatment under Venezuelan law. To extend our examination of Venezuelan law to adjudicate its fairness appears to me to violate Venezuela's sovereignty, the value protected by the FSIA."
"The majority supports its extended examination with the decision in Banco Nacional de Cuba v. Sabbatino, 307 F.2d 845, 861 (2d Cir. 1962). While that case may stand for the proposition that the courts of the United States can examine the fairness of a foreign sovereign's expropriation, I cannot join the majority's conclusion that 'Sabbatino remains good law.' Maj. Op. at 12. Perhaps Sabbatino is good law in the Second Circuit, but we are not bound by the decisions of other circuits, and I do not conclude that Sabbatino has ever been or remains good law in the District of Columbia Circuit. I would, therefore, conclude that Venezuela's reliance on the domestic takings rule is well taken and should compel the dismissal of Helmerich & Payne's expropriation claim for want of jurisdiction."
"I would further note that I differ with the majority's apparent belief that Venezuela's reliance upon Dole Food Co. v. Patrickson, 538 U.S. 468 (2003), is misplaced. See Maj. Op. at 14. The majority asserts that '[c]ontrary to Venezuela's assertion, ... Dole Food does not represent a wholesale incorporation of corporate law into the FSIA.' Id. While this may be literally accurate, it is at least equally accurate that neither Dole Food nor any other case constitutes a wholesale rejection of corporate law. As both the majority's opinion and mine have recognized, shareholders ordinarily have no standing to assert claims on behalf of a corporation for its property." [Slip op. 16]
"Neither do I find compelling the majority's reliance on two cases from this circuit: Agudas Chasidei Chabad of U.S. v. Russian Federation, 528 F.3d 934, 940 (D.C. Cir. 2008), and Ramirez de Arellano v. Weinberger, 745 F.2d 1500, 1517 (D.C. Cir. 1984), cert. granted, judgment vacated on other grounds, 471 U.S. 1113 (1985). Chabad is authority, at most, for the proposition that '[i]n an FSIA case, we will grant a motion to dismiss on the grounds that the plaintiff has failed to plead a 'taking in violation of international law' or has no 'rights in property ... in issue' only if the claims are 'wholly insubstantial or frivolous.'" Maj. Op. at 9 (quoting Chabad, 528 F.3d at 942) (emphasis in original). As the plaintiff here has, by reason of the domestic takings rule, failed to plead a 'taking in violation of international law,' Chabad supports rather than undermines Venezuela's motion for dismissal. 528 F.3d at 943 (emphasis added). Ramirez warrants no separate discussion." [Slip op. 16-17]
"I would note first that the judgment in Ramirez was vacated by the Supreme Court. Weinberger v. Ramirez de Arellano, 471 U.S. 1113 (1985). [...] For what it's worth, I question whether the language quoted from Adewani and Action Alliance in fact states a holding of this court to the effect that we are bound by the reasoning of vacated opinions. Rather, each instance paraphrases language of Justice Powell quoted in a parenthetical following the quoted language from Action Alliance. Action Alliance parenthetically quoted Justice Powell as stating:"
"Although a decision vacating a judgment necessarily prevents the opinion of the lower court from being the law of the case, ... the expressions of the court below on the merits, if not reversed, will continue to have precedential weight and, until contrary authority is decided, are likely to be viewed as persuasive authority if not the governing law'"
"County of Los Angeles v. Davis, 440 U.S. 625, 646 n.10 (Powell, J., dissenting) (quoted in Action Alliance, 930 F.2d at 8384). In other words, the prior reasoning of the court in vacated opinions may be persuasive, even powerfully persuasive, but I question whether it is binding precedent." [Slip op. 17]
|Printer friendly Cite/link Email Feedback|
|Title Annotation:||SOVEREIGN IMMUNITY|
|Publication:||International Law Update|
|Date:||Apr 1, 2015|
|Previous Article:||Eleventh Circuit affirms dismissal of complaint filed by Venezuelan entrepreneur for alleged expropriations that occurred in Venezuela; act of state...|
|Next Article:||In action to enforce arbitral award against Belize, district of Columbia Circuit rejects Belize's claims of immunity because transactions at issue...|