FSIA Retroactivity Subsequent to the Issuance of the Tate Letter: A Proposed Solution to the Confusion

Northwestern Journal of International Law & Business, Dec 1989

Three recently decided cases discuss the retroactive application of the Foreign Sovereign Immunities Act of 1976 to pre-1952 claims—Carl Marks & Co. v. Union of Soviet Socialist Republics, Jackson v. People's Republic of China, and Slade v. United States of Mexico. These cases have conclusively established that the FSIA is not to be applied retroactively to pre-1952 events—i.e., to claims arising prior to the issuance of the Tate Letter. They do not resolve the issue of retroactive application of the FSIA to post-1952 events, however, and this issue is currently engulfed in confusion. This Comment attempts to resolve this confusion and propose a solution to the retroactivity problem. Section II delineates the retroactivity issue, while Section III discusses the history of sovereign immunity and describes the FSIA in detail. Section IV outlines the sources of confusion in the area of FSIA retroactivity and identifies four basic principles which may be applied to circumvent the confusion. Finally, Section V proposes a retroactivity solution arrived at through the application of these principles.

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FSIA Retroactivity Subsequent to the Issuance of the Tate Letter: A Proposed Solution to the Confusion

FSIA Retroactivity FSIA Retroactivity Subsequent to the Issuance of the Tate Letter: A Proposed Solution to the Confusion Michael E. Jansen 0 0 This Comment is brought to you for free and open access by Northwestern University School of Law Scholarly Commons. It has been accepted for inclusion in Northwestern Journal of International Law & Business by an authorized administrator of Northwestern University School of Law Scholarly Commons Part of the Courts Commons; International Law Commons; and the Legislation Commons - FSIA Retroactivity Subsequent to the 'Issuance of the Tate Letter: A Proposed Solution to the Confusion CONTENTS I.* INTRODUCTION ........................................... VI. CONCLUSION ............................................. 334 For centuries, nations granted full immunity from suit to foreign sovereigns in all aspects of their relationships.1 Today, however, the United States, like most nations, requires foreign sovereigns to account for their commercial activities that occur in or affect the United States.2 Although the Foreign Sovereign Immunities Act of 1976 ("FSIA") 3 clearly incorporates this requirement, considerable confusion has ensued regarding the statute's retroactive application. This Comment attempts to clear this confusion and to provide a solution to the issue of FSIA retroactivity. The FSIA, which sought to clarify the instances in which foreign states may be sued in U.S. courts,4 codified the restrictive theory of sovereign immunity, which the executive branch had for mally adopted in 1952 when it issued the Tate Letter.5 In the Tate Letter, the State Department publicly took the position that henceforth it would recommend to U.S. courts that as a matter of policy, a foreign state should be granted immunity only for its sovereign or public acts, and not for its private acts.6 Accordingly, the FSIA sets forth the general rule that "a foreign state shall be immune from the jurisdiction of the courts of the United States,"'7 and then lists several specific exceptions to the general rule.8 These exceptions encompass thejuregestionis (private acts) referred to in the Tate Letter,9 and they now provide the sole basis for state and federal court jurisdiction over suits against foreign states."° Although this restrictive theory of sovereign immunity was adopted in the Tate Letter, the theory as codified in the FSIA differs substantially from prior practice both substantively and procedurally. 1' Thus, there has been considerable debate concerning the retroactive effect of the FSIA-that is, whether the statute applies to claims which arose before the statute was enacted. Three recently decided cases discuss the retroactive application of the FSIA to pre-1952 claims-Carl Marks & Co. v. Union of Soviet SocialistRepublics,'" Jackson v. People'sRepublic of China,'3 and Slade v. UnitedStates ofMexico. 4 These cases have conclusively established that the FSIA is not to be applied retroact ively to pre-1952 events-i.e., to claims arising prior to the issuance of the Tate Letter. 5 They do not resolve the issue of retroactive application of the FSIA to post-1952 events, however, and this issue is currently engulfed in confusion. 6 This Comment attempts to resolve this confusion and propose a solution to the retroactivity problem. Section II delineates the retroactivity issue, while Section III discusses the history of sovereign immunity and describes the FSIA in detail. Section IV outlines the sources of confusion in the area of FSIA retroactivity and identifies four basic principles which may be applied to circumvent the confusion. Finally, Section V proposes a retroactivity solution arrived at through the application of these principles. 10 Verlinden B.V. v. Central Bank of Negeria, 461 U.S. 480 (1983). See infra note 121 for a more extensive list of citations. 11 See infra notes 128-131 and accompanying text. 12 665 F. Supp. 323 (S.D.N.Y. 1987), aff'd, 841 F.2d 26 (2d Cir.), cert.denied, - U.S. -, 108 S. Ct. 2874 (1988). 13 596 F. Supp. 386, aff'd, 74 F.2d 1490 (11th Cir. 1986), cert. denied, 480 U.S. 917 (1987). 14 617 F. Supp. 351 (D.C.D.C. 1985), aff'd, 790 F.2d 163 (D.C. Cir. 1986), cert denied, 479 U.S. 1032, reh'g denied, 480 U.S. 912 (1987). 15 See infra notes 132-152 and accompanying text. 16 Upon initial observation, it appears that because the FSIA has now been in effect for more than a decade, applicable statutes of limitations would moot the FSIA retroactivity issue. The Jackson, Slade, and CarlMarks cases, however, are proof that claims upon such grounds as the repudiation of international debt may remain viable forever because no statute of limitations bars claims against international debt obligations. As one prominent author noted: "There is no statute of limitations as to international claims," and "[g]overnments are presumed to be always ready to do justice, and whether a claim be a day or a century old, so that it is well-founded, every (...truncated)


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Michael E. Jansen. FSIA Retroactivity Subsequent to the Issuance of the Tate Letter: A Proposed Solution to the Confusion, Northwestern Journal of International Law & Business, 1989, Volume 10, Issue 2,