Expropriation

• Pages: 132-134

Page 132

This case began in 1982 when McKesson (Plaintiff ) fi led suit in the District of Columbia federal court, claiming that Iran had unlawfully expropriated its investment in the dairy company, Sherkat Sahami Labaniat Pasteurize Pak (Pak). At issue in Iran's appeal are the district court's rulings that McKesson had a cause of action under a treaty with Iran and customary international law. The District of Columbia Circuit remands.

The Court finds that the district court properly asserted subject matter jurisdiction, but reverses the district court's conclusion that the Treaty of Amity, Economic Relations, and Consular Rights (in force: June 16, 1957; 8 U.S. T. 899; T. I. A. S. 207; 284 U. N. T. S. 93) (TOA ) provides a cause of action. Also, the district court should have re-considered its 1997 ruling that customary international law (CIL) provides a cause of action.

The Court had held in the earlier McKesson proceedings that there was federal jurisdiction under the "commercial activity" exception to the Foreign Sovereign Immunities Act (FSIA), 28 U.S.C.

Page 134

§ 1605(a)(2). Also, in McKesson III, the Court held that the [TOA] provided McKesson with a cause of action. Iran unsuccessfully petitioned the U.S. Supreme Court for certiorari to review McKesson III. Because the U.S. Government opposed certiorari, the Court of Appeals vacated the McKesson III holding that the [TOA] provided a cause of action.

The Circuit Court now reverses the district court, and explains its action. "We must determine whether the [TOA] provides a private cause of action. If it does, then McKesson's appearance as a Plaintiff in federal court was a proper exercise of its 'right . . . to seek judicial relief from injuries caused by another's violation of a legal requirement.' Cannon v. Univ. of Chicago, 441 U.S. 677, 730 n.1 (1979) (Powell, J., dissenting). If it does not, and if a cause of action cannot otherwise be found, then McKesson's complaint must be dismissed. The district court had concluded that McKesson had a cause of action under the [TOA]. McKesson Corp. v. Islamic Republic of Iran, 520 F. Supp. 2d 38, 52-55 (D.D.C. 2007). Reviewing this interpretation de novo, we reverse."

"[...] The [TOA], like other treaties of its kind, is self-executing. ... Curtis A. Bradley & Jack L. Goldsmith, Foreign Relations Law 379 (2d ed. 2006) ('[C]ourts commonly assume that certain types of bilateral treaties, such as . . . Friendship, Commerce, and Navigation...