The Act of State Doctrine

• Author: Ernesto Sanchez
• Pages: 323-329

323

THE ACT OF STATE DOC TRI NE

§ 28.1 INTRODUCTION

Along with foreign sovereign immunity, limits on extraterritorial jurisdiction, forum non con-

veniens, and political questions, the act of state doctrine also constrains U.S. courts from adju-

dicating certain cross-border disputes. is doctrine, however, does not divest U.S. courts of

jurisdiction, or compel them to abstain from exercising jurisdiction in the rst place, but “pro-

vides foreign states with a substantive defense on the merits.”1 More specically, the doctrine

“precludes the courts of this country from inquiring into the validity of the public acts a recog-

nized foreign sovereign power committed within its own territory.”2 Underlying the doctrine

is the principle that “juridical review of acts of state of a foreign power could embarrass the

conduct of foreign relations by the political branches of the [U.S.] government” and that “liti-

gants may have to forgo decision on the merits of their claims” when this situation takes place.3

§ 28.2 STANDARD OF REVIEW

A motion to dismiss based on the act of state doctrine, in addressing a claim’s merits, is prop-

erly considered under Federal Rule of Civil Procedure 12(b)(6), which allows the dismissal of

actions for “failure to state a claim upon which relief can be granted.”4 To survive a motion to

dismiss for failure to state a claim under Rule 12(b)(6), a complaint “must contain sucient

factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’”5 A claim

is facially plausible when facts pled allow a court to “draw the reasonable inference that the

1. Republic of Austria v. Altmann, 541 U.S. 677, 700 (2004).

2. Banco Nacional de Cuba v. Sabbatino, 376 U.S. 398, 401(1964); see also Altmann, 541 U.S. at 700 (“Under that

doctrine, the courts of one state will not question the validity of public acts (acts jure imperii) performed by other sover-

eigns within their own borders, even when such courts have jurisdiction over a controversy in which one of the litigants

has standing to challenge those acts.”); W.S. Kirkpatrick & Co., Inc. v. Environmental Tectonics Corporation, Int’l, 493

U.S. 400, 406 (1990) (“Act of state issues only arise when a court must decide—that is, when the outcome of the case

turns upon the eect of ocial action by a foreign sovereign. When that question is not in the case, neither is the act of

state doctrine.”) (emphasis in original); Alfred Dunhill of London, Inc. v. Republic of Cuba, 425 U.S. 682, 697 (1976)

(“e major underpinning of the act of state doctrine is the policy of foreclosing court adjudications involving the

legality of acts of foreign states on their own soil that might embarrass the Executive Branch of our Government in the

conduct of our foreign relations.”); Schlesinger v. Reservists Committee to Stop the War, 418 U.S. 208, 215 (1974) (“[T]

he concept of justiciability, which expresses the jurisdictional limitations imposed upon federal courts by the ‘case or

controversy’ requirement of Art[icle] III [of the U.S. Constitution], embodies both the standing and political question

doctrines . . .”); Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 504 (1947) (“[T]he doctrine of forum non conveniens can never

apply if there is absence of jurisdiction . . .”); Canada Malting Company, Ltd., v. Paterson Steamships, Ltd., 285 U.S.

413, 422-23 (1932) (“Courts of equity and of law also occasionally decline, in the interest of justice, to exercise jurisdic-

tion, where the suit is between aliens or non-residents or where for kindred reasons the litigation can more appropriately

be conducted in a foreign tribunal.”); Underhill v. Hernandez, 168 U.S. 250, 252 (1897) (“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.”).

3. First National City Bank v. Banco Nacional de Cuba, 406 U.S. 759, 765, 769 (1972).

4. F . R. C . P. 12(b)(6).

5. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 556 (2007)).

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