Altmann v. Austria and the retroactivity of the Foreign Sovereign Immunities Act

Journal of International Criminal Justice

Volumn 3, Issue 1, 2005, Pages 207-223

  Vázquez, Carlos M ^a  

^a GEORGETOWN UNIVERSITY LAW CENTER   (United States)

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EID: 27144525048     PISSN: 14781387     EISSN: 14781395     Source Type: Journal    
DOI: 10.1093/jicj/3.1.207     Document Type: Article

References (93)

1. Supreme Court Reporter 2240 (2004).
2. United States Code, §§ 1602 et seq. (hereinafter FSIA).
3. The FSIA defines a 'foreign state' to include foreign state instrumentalities, 28 USC, §1603(b).
4. USC, §1605(a)(3).
5. 'Hague Convention (IV) on the Laws and Customs of War on Land', 18 October 1907, in C. Bevans (ed.), Treaties and Other International Agreements of the United States of America 1776-1949 (1 Department of State, 1968) 631, at 653.
6. See Altmann, 124 S. Ct, at 2258 (J. Breyer, concurring in the judgment).
7. F.3d, at 964 (quoting Princz v. Federal Republic of Germany, 26 F.3d 1166 (DC Cir. 1994), at 1178-1179 (J. Wald, dissenting) (citing Verlinden v. Central Bank of Nigeria, 461 United States Reports (US) 480 (1983), at 486).
8. F.3d, at 965.
9. Altmann, 124 S. Ct, at 2254.
10. See, e.g. Compania Espanola De Navegacion Maritima, S. A. v. The Navemar, 303 US 68 (1938), at 74.
11. Republic of Mexico v. Hoffman, 324 US 30 (1945), at 35-36.
12. 1952 Tate Letter, reprinted in Alfred Dunhill v. Republic of Cuba, 425 US 682 (1976), at 713.
13. See Verlinden B.V. v. Cent. Bank of Nigeria, 461 US 480 (1983), at 487.
14. See ibid. ('F]oreign nations often placed diplomatic pressure on the State Department in seeking immunity [and o]n occasion, political considerations led to suggestions of immunity in cases where immunity would not have been available under the restrictive theory.').
15. Ibid., at 488 ('Congress passed the Foreign Sovereign Immunities Act in order to free the [State Department] from the case-by-case diplomatic pressures.').
16. Brief of the USA as Amicus Curiae in Republic of Austria v. Altmann, at 7.
17. In concluding that the State Department would have recommended no immunity for the defendants in 1948, the Court of Appeals relied on a different letter from Jack B. Tate, this one known as the Bernstein Letter. In it, Tate stated that '[t]he policy of the Executive, with respect to claims asserted in the USA for the restitution of identifiable property (or compensation in lieu thereof) lost through force, coercion, or duress as a result of Nazi persecution in Germany, is to relieve American courts from any restraint upon the exercise of their jurisdiction to pass upon the validity of the acts of Nazi officials', letter from Jack B. Tate, Acting Legal Advisor, Department of State, to the Attorneys for the plaintiff in Civil Action No. 31-555 (SDNY) reprinted in Bernstein v. N.V. Nederlandsche-Amerikaansche, 210 F.2d 375 (2d Cir. 1954), at 376 (per curiam). This letter, however, addressed the act-of-state doctrine, not the doctrine of foreign sovereign immunity. Even in this more limited context of the act-of-state doctrine, the use of Bernstein Letters has been controversial. When the Supreme Court directly confronted a Bernstein Letter for the first (and only) time, a solid majority concluded that the courts should not regard it as binding. Although Justice Rehnquist's plurality opinion in First National City Bank v. Banco Nacional de Cuba, 376 US 398 (1964), concluded that the courts should defer to such letters, the dissenters strongly objected to such deference on separation-of-powers grounds, ibid., at 792-793 (J. Brennan, dissenting) as did Justices Douglas, ibid., at 772-773 (J. Douglas, concurring in the judgment) and Powell, ibid., at 773 (J. Powell, concurring in the judgment). In the words of Justice Douglas, 'unquestioning judicial deference to the Executive' would convert the courts into 'a mere errand boy for the Executive Branch which may choose to pick some people's chestnuts from the fire, but not others', ibid., at 773, note 4 (J. Douglas, concurring in the judgment).
18. 511 US 244 (1994).
19. Landgraf, 511 US, at 280.
20. Altmann, 124 S. Ct, at 2250-2251
21. see also ibid., at 2256 (J. Scalia, concurring). For Justice Scalia, such statutes address the limits of judicial power and jurisdiction, not substantive rights. 'Therefore, the relevant analysis is not when the underlying conduct occurred, but when the judicial power was invoked'., ibid., at 2256.
22. 28 USC, §1602.
23. Altmann, 124 S. Ct, at 2251 (quoting Landgraf, 511 US, at 261-262).
24. Perhaps the majority's failure to rest on the 'unambiguous' language from the preamble stemmed from the view of two of its members that the language was not in fact unambiguous. Justices Breyer and Souter agreed with the dissenters that 'there is no logical inconsistency between an act that applies "henceforth" and a reading of §1605(a (3) that limits it to "rights in property taken after this Act came into force"', (Altmann, 124 S. Ct, at 2258-2259 (J. Breyer, concurring) (emphasis in original)). The concurring Justices seem to engage here in a form of temporal renvoi, interpreting the temporal reference in the preamble to be subject to any temporal limitation found in more specific provisions of the statute. There might have been something to be said for that approach had the other provision included a temporal limitation, but s. 1605(a)(3) does not. Section 1605(a)(3) is not in terms limited to rights in property taken after the FSIA's entry into force. The preamble does address the FSIA's temporal scope, and it says that it applies to 'claims of immunity' made after the FSIA's entry into force. There accordingly appears to have been no good reason not to obviate the inconclusive Landgraf analysis by treating the language in the preamble as a clear statement about the temporal scope of the FSIA.
25. Altmann, 124 S. Ct, at 2251 ('Prior to 1976 foreign states had a justifiable expectation that, as a matter of comity, United States courts would grant them immunity for their public acts..., but they had no "right" to such immunity'.).
26. 461 US 480 (1983), at 486 (emphasis added).
27. See Restatement (Second) of Foreign Relations Law, 4§2 (1965);
28. 1952 Tate Letter, reprinted in Alfred Dunhill v. Republic of Cuba, 425 US 682 (1976), at 711 (discussing the history and evolution of sovereign immunity in international law).
29. Altmann, 124 S. Ct, at 2251, citing Hughes Aircraft Co. v. United States ex rel. Schumer, 520 US 939 (1997), at 951.
30. Altmann, 124 S. Ct, at 226 (J. Kennedy, dissenting).
31. The courts of appeals only have jurisdiction over final decisions, 28 USC, §1291.
32. Puerto Rico Aqueduct & Sewer Auth. v. Metcalf & Eddy, Inc., 506 US 139 (1993).
33. Mitchell v. Forsyth, 472 US 511 (1985). It is precisely for this reason that the Courts of Appeals have unanimously held that a foreign state is entitled to pursue an immediate appeal against the denial of its motion to dismiss a suit on the ground of foreign sovereign immunity.
34. (See, e.g. I.T. Consultants, Inc. v. Islamic Republic of Pak., 351 F.3d 1184 (DC Cir. 2003), at 1185
35. Filler v. Hanvit Bank, 378 F.3d 213 (2nd Cir. 2004), at 216
36. Byrd v. Corporacion Forestal y Indus. de Olancho S.A., 182 F.3d 380 (5th Cir. 1999), at 381
37. Compania Mexicana de Aviacion, S.A. v. United States Dist. Court, 859 F.2d 1354 (9th Cir. 1988), at 1356
38. Gould, Inc. v. Pechiney, 853 F.2d 445 (11th Cir. 1988), at 450.)
39. The dissenters insisted that, for purposes of answering this question, only courts in the USA should be considered, as 'the task of canvassing what causes of action foreign countries might have allowed before a new jurisdictional regime made such suits also viable in American courts would be a most difficult task to assign American courts', 124 S. Ct, at 2272. The lower courts before Altmann also limited this inquiry to US courts; see Abrams v. Société Nationale des Chemins de Fer Français, 332 F.3d 173 (2d Cir. 2003), at 186, vacated and remanded, 124 S. Ct 2834 (2004).
40. See supra note 25 and accompanying text.
41. In at least one respect, the FSIA changed prior law by expanding the protections afforded to foreign state entities. Section 1602 defines 'foreign state' to include corporations a majority or more of whose shares are owned by a foreign state. It appears that, under prior law, separately incorporated entities were not treated as foreign state instrumentalities; see discussion infra.
42. Two arguments in favour of retroactivity advanced by Justice Breyer become less probative of the issue when considered in the light of the evolution of international law principles of foreign sovereign immunity. First, Justice Breyer notes that the FSIA was applied immediately after its enactment to permit suits against foreign states falling into one of the FSIA's exceptions, 124 S. Ct, at 2260 (citing Verlinden). But these cases involved the commercial-activities exception, which the USA adhered to when it issued the Tate Letter in 1952. Secondly, Justice Breyer notes that the Tate Letter itself was applied retroactively to permit suits based on conduct that predated its issuance, 124 S. Ct, at 2260. But this disregards the fact that the Tate Letter purported to be an interpretation of existing customary international law. The USA was, in fact, among the slowest to embrace formally the restrictive theory of international law which, according to the Tate Letter itself, had ripened into a rule of customary international law some time before.
43. Altmann, 124 S. Ct, at 2251 (quoting Verlinden, 461 US, at 496-497).
44. US Constitution, Art. III, §2.
45. Verlinden, 461 US, at 497.
46. 318 US 578, at 588. There is additional case support, overlooked by the Court, for the proposition that the immunity enjoyed by a sovereign is a substantive immunity. In the closely analogous context of the immunity of the USA, the Supreme Court has made it clear that, when sovereign immunity applies, it prevents a liability from attaching in the first place. This was the holding of The Western Maid (257 US 419 (1922)) in which the Court, speaking though Justice Holmes, dismissed on the merits a libel against ships that had caused injuries while they were owned and operated by the USA, even though the ships were no longer operated by the USA and thus no longer beyond the reach of legal process. The Court held that, as a result of the immunity enjoyed by the USA, no liability attached when the ships caused the injury. In the view of the Court, '[l]egal obligations that exist but cannot be enforced are ghosts that are seen in the law but that are elusive to the grasp'. (ibid., at 433). A similar scepticism about the existence of substantive legal liabilities when no courts have jurisdiction to entertain claims to enforce such liabilities seems to underlie the conclusion in Hughes Aircraft that a statute that creates jurisdiction where none existed before is substantive for purposes of retroactivity analysis.
47. For elaboration, see C. M. Vázquez, 'Comment. Verlinden B.V. v. Central Bank of Nigeria: Federal Jurisdiction Over Cases Between Aliens and Foreign States', 82 Colum. L. Rev. (1982), at 1057, 1078-1080 and notes 106-108.
48. See also infra note 41 (discussing s. 1608). It is true that certain provisions of the FSIA, including the provision at issue in Altmann itself, contemplate suits against foreign states based not on national law but on international law. With respect to cases falling within exceptions of this sort, it might be contended that the Act does not extend to states substantive laws that had not previously applied to them; rather, this exception simply opens up the US courts to enforce laws that applied to the states all along. If so, then perhaps the question of whether the FSIA is substantive or merely procedural would have to be addressed exception by exception.
49. Ibid., at 2251. Although the majority did not cite anything for this proposition, it may have had in mind the indication in the legislative history that the FSIA does not affect the substantive law of liability (H.R. Rep. No. 94-1487, p. 12 (1976) ('The [FSIA] is not intended to affect the substantive law of liability'.). This statement might be understood to indicate that the immunity of foreign states is not an immunity from the substantive laws regulating private parties. But the FSIA could be read differently. Section 1608 provides that if a foreign state is not entitled to immunity under s. 1605, it shall be liable to the same extent as a private party under like circumstances (28 USC, § 1608). Consistent with a substantive conception of foreign sovereign immunity, this provision could be read to contemplate that immune foreign states are beyond the reach of substantive laws that regulate private parties, but foreign states that are not immune under s. 1605 are made subject by s. 1608 to the laws that would otherwise apply to private parties in like circumstances. On this view, s. 1608 would be the substantive counterpart to s. 1605; the two provisions would operate in tandem to extend judicial jurisdiction and substantive liability to foreign states with respect to conduct falling within one of the exceptions specified in the Act. When a state is entitled to immunity, however, it does not incur a liability.
50. 538 US 468 (2003).
51. Ibid., at 479 (citing Verlinden, 461 US, at 486).
52. The author of the opinion in Patrickson (Justice Kennedy) did not seem to think so, however, as he wrote the dissenting opinion in Altmann.
53. The Court cited Verlinden for the proposition that the FSIA offers 'protection from the inconvenience of suit as a gesture of comity between the United States and other sovereigns'. The citation to Verlinden appears to be for the proposition that the protection afforded to foreign sovereigns is afforded as a matter of comity. On this question, see supra notes 23-25, and accompanying text. On the question of whether the protection offered is merely a protection from the inconvenience of suit, Verlinden cuts the other way, in light of its description of such protection as 'substantive'.
54. E.g. The Western Maid, discussed supra note 38.
55. See 124 S. Ct, at 2259 (J. Breyer, concurring) (discussing foreign cases regarding head-of-state immunity).
56. 124 S. Ct, at 2259.
57. See Queen v. Bow Street Metropolitan Stipendiary Magistrate (Ex parte Pinochet Ugarte) [2000) 1 Law Reports: Appeal Cases 147, at 202 (1999) (opinion of Lord Browne-Wilkinson) (acknowledging that a former head of state enjoys 'continuing partial immunity... after leaving [his] post'.).
58. For an argument that the immunity of states of the Union is an immunity from liability, see C. M. Vázquez, 'What Is Eleventh Amendment Immunity?', 106 Yale Law Journal (Yale LJ) 1683 (1997).
59. For the claim that the Supreme Court has now accepted this view of the state's sovereign immunity, see C. M. Vázquez, 'Sovereign Immunity, Due Process, and the Alden Trilogy', 109 Yale LJ 1927 (2000).
60. 124 S. Ct, at 2254.
61. Ibid.
62. See Argentine Republic v. Amerada Hess, 488 US 428 (1989), at 439 (Argentina enjoys immunity with respect to acts taken on the high seas).
63. 124 S. Ct, at 2251.
64. 124 S. Ct, at 2252.
65. Ibid.
66. The Court cited the provisions regarding venue, removal, execution and attachment, 124 S. Ct, at 2253.
67. Ibid.
68. Ibid.
69. 332 F.3d 173 (2d Cir. 2003), vacated and remanded; 124 S. Ct 2834 (2004).
70. 332 F.3d, at 179-180.
71. Ibid., at 180.
72. Ibid., at 174.
73. Ibid., at 188.
74. 124 S. Ct 2834 (2004).
75. Abrams v. Société Nationale des Chemin de Fer Français, 389 F.3d 61 (2004).
76. See, e.g. Jackson v. People's Republic of China, 480 US 917 (1987);
77. Carl Marks & Co. v. USSR, 841 F.2d 26 (2d Cir. 1988); cert. denied 487 US 1219
78. Slade v. Mexico, 617 F.Supp 351 (DDC 1985); cert. denied 479 US 1032.
79. Supra notes 9-10 and accompanying text.
80. Ibid., at 2253.
81. 124 S. Ct, at 2255.
82. Ibid.
83. Ibid., at 2263-2264 (J. Kennedy, dissenting).
84. Ibid., at 2255-2256.
85. See Abrams, 389 F.3d 61 (2004);. Hwang Geum Joo v. Japan, 332 F.3d 679 (DC Cir. 2003), vacated and remanded for reconsideration in light of Altmann, 124 S. Ct 2835 (2004);
86. Republic of Austria v. Whiteman, 72 Fed. Appx. 850 (2d Cir. 2003), vacated and remanded for reconsideration in light of Altmann,124 S. Ct 2835 (2004);
87. Republic of Poland v. Garb, 72 Fed. Appx. 850 (2d Cir. 2003), vacated and remanded for reconsideration in light of Altmann, 124 S. Ct 2835 (2004);
88. Ungaro-Benages v. Dresdner Bank AG, 379 F.3d 1227 (11th Cir. 2004).
89. See Cruz v. U.S., No. C 01-00892 CRB, slip. op. at 5 (ND Cal. June 24, 2003) (granting plaintiffs leave to amend their complaint to plead entitlement to an equitable tolling of the statute of limitations);
90. Princz v. Federal Republic of Germany 26 F.3d 1166 (DC Cir. 1994), at 1168-1170.
91. See Joo, 332 F.3d 679
92. Haven v. Polska, 215 F.3d 727 (7th Cir. 2000), at 730-731.
93. See Abrams, supra note 66, and accompanying text.