| Banco Nacional de Cuba v. Sabbatino | |
|---|---|
 | |
| Argued October 22–23, 1963 Decided March 23, 1964 | |
| Full case name | Banco Nacional de Cuba v. Sabbatino, Receiver, et al. |
| Citations | 376U.S.398 (more) 84 S. Ct. 923; 11L. Ed. 2d 804; 1964U.S. LEXIS 2252 |
| Case history | |
| Prior | Complaint dismissed, 193F. Supp.375 (S.D.N.Y. 1961); affirmed, 307F.2d845 (2d Cir. 1962);cert. granted,372 U.S. 905 (1963). |
| Holding | |
| The Court determined that the policy ofUnited States federal courts would be to honor theact of state doctrine, which dictates that the propriety of decisions of other countries relating to their internal affairs would not be questioned in the courts of theUnited States. | |
| Court membership | |
| |
| Case opinions | |
| Majority | Harlan, joined by Warren, Black, Douglas, Clark, Brennan, Stewart, Goldberg |
| Dissent | White |
| Laws applied | |
| Act of State Doctrine;U.S. Const. | |
Banco Nacional de Cuba v. Sabbatino, 376 U.S. 398 (1964), was aUnited States Supreme Court case that determined that the policy ofUnited States federal courts would be to honor theAct of State Doctrine, which dictates that the propriety of decisions of other countries relating to their internal affairs would not be questioned in the courts of theUnited States.[1]
In July 1960, theCuban government retaliated against theUnited States for various measures imposed against theCastro government byexpropriating property held by U.S. citizens in Cuba. This included the seizure ofsugar owned by a Cuban company called Compania Azucarera Vertientes-Camaguey de Cuba (C.A.V.), owned by American stockholders.[2]
An American commodity broker, Farr, Whitlock & Co. had contracted to buy this sugar from C.A.V., but after it was seized, they bought it directly from theCuban government. After receiving the sugar, however, Farr, Whitlock & Co. did not pay the Cuban government; instead, they paid C.A.V.'s legal representative in the U.S., Sabbatino.
The plaintiff, theNational Bank of Cuba (acting on behalf of the Cuban government) filed alawsuit in theUnited States District Court for the Southern District of New York against thedefendant, Sabbatino, to recover the money paid for the sugar. The district court[3] and theCourt of Appeals ruled in favor of the defendant,[4] and the case was appealed to the Supreme Court.
The issue taken by the Supreme Court was whether to apply the Act of State doctrine, which would uphold the legality of the expropriation because it was an official act of another country, not subject to question in US courts.
The defendant contended that the doctrine was inapplicable for three reasons:
The court, in an opinion by JusticeJohn Marshall Harlan II, found that the act of state doctrine did apply in this case. The court refused to hold that the expropriation violated international law, because there was no clear unity of international opinion disapproving the seizure of land or property in a country by the government of that country. It noted also that interposition of the Executive was unnecessary to prevent the courts from interfering in affairs of state, as a single court could upset delicate international negotiations through the assertion ofU.S. law in another country. Finally, the Court found no bar to application of the doctrine should be imposed by the fact that Cuba had brought the suit, comparing this to thesovereign immunity enjoyed byU.S. states which can sue, but can not be sued.
The court also raised and dismissed a potentialErie doctrine problem, noting that although this suit was brought underdiversity jurisdiction, federal interests so outweighed that of the state thatfederal common law must apply, instead of the law of the state where the suit was filed.
Justice White wrote a dissenting opinion,[5][6] asserting that the court's application of the act of state doctrine was too rigid: more so, in fact than the doctrine as applied by other countries.
Not surprisingly, the Sabbatino case provoked an uproar in theU.S. Congress. Before the case could be reviewed by the district court (on remand), Congress passed the so-calledSecond Hickenlooper Amendment (or Sabbatino Amendment) that revoked this presumption in favor of the validity of the act of state doctrine that the Sabbatino court had established. The Amendment was retroactive and subsequently found constitutional by the district court and the Cuban bank's complaint was dismissed. This amendment to theForeign Assistance Act has clarified that courts may proceed with an adjudication on themerits unless the President states that such adjudication may embarrass foreign policy efforts, but the amendment has been construed very narrowly by subsequent court decisions.
