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REPUBLIC OF PHILIPPINESv. MARCOS:THE NINTH CIRCUIT ALLOWS AFORMER RULER TO INVOKE THE

ACT OF STATE DOCTRINEAGAINST A RESISTING SOVEREIGN

TRACIE A. SUNDACK

INTRODUCTIONArticle II of the United States Constitution grants the executive

branch power to conduct foreign relations.' United States7 courtsadjudicating disputes in which a foreign official is a defendant, how-ever, may interfere with the executive's efforts to convey a unifiedforeign policy by ruling contrary to the executive's wishes. 2 The actof state doctrine precludes judicial review of official acts that a rec-ognized foreign sovereign commits within its own territory.3

1. Article II of the United States Constitution provides in pertinent part: "The Presi-dent shall be Commander in Chief of the Army an d Navy of the United States, an d of theMilitia of the several States.. " U.S. CONsT. art. II, 2, cl. 1. "H e shall have Power... tomake Treaties ... shall appoint Ambassadors, other public Ministers an d Consuls...." U.S.CoNsr. art. II, 2, cl. 2. "[Hie shall receive Ambassadors and other public Ministers; he shalltake Care that the Laws be faithfully executed .. " U.S. CONsT. art. II, 3. Some theorists,however, state that article II allows the judiciary to decide questions involving United Statesforeign relations. See Swan, Act of Stateat Bay: A Plea on Behalfof the ElusiveDoctrine, 1976 DUKELJ. 807, 849 (acknowledging controversy regarding role of judiciary in foreign disputes).Thus, the framers implicitly created the power in the judiciary to adjudicate foreign policymatters. Id. See U.S. CONsT. art. III (granting judiciary power to hear cases between statecitizens and foreign nations or citizens); but see United States v. Curtis-Wright Corp., 299 U.S.304, 319 (1936) (stating "[t]he President is the sole organ of the nation in its external rela-tions, an d its sole representative with foreign nations" (quotingJohn Marshall, as member ofHouse of Representatives)).2. See Baker v. Carr, 369 U.S. 186, 211 (1962) (recognizing that foreign affairs questionsrequire single voiced statement of government's views); International Ass'n of Machinists v.OPEC, 649 F.2d 1354, 1358 (9th Cir. 1981) (stating that participation in global communityrequires United States to speak with one voice), cert. denied, 454 U.S. 1163 (1982); see alsoMoore, Federalism and Foreign Relations, 1965 DUKE LJ. 248, 273-74 (noting nations get moreaccurate perception of other country's foreign policy from one voice, from which opposingnation frames its ow n policy).3. The United States and several other countries recognize the act of state doctrine. SeeRESTATEMENT (SECOND) FOREIGN RELATIONS LAw OF THE UNITED STATES 41, ReportersNotes (Tent. Draft No. 7, 1986) (stating that English courts will not determine validity ofactions of foreign government (citing Aksionaire Obschestro v. Sagor, 3 K.B. 532 (C.A.

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226 THE AMERICAN UNIVERSITY LAW REVIEW [Vol. 38:225The rationale underlying the doctrine is to prevent United States

1921))). Proponents of this doctrine reason that such restraint prevents thejudiciary frominterfering with the role of the executive branch in promoting foreign relations. See BancoNacional de Cuba v. Sabbatino, 376 U.S. 398, 427-37 (1964) (characterizing policy underlyingact of state doctrine as separation of powers).United States courts apply the doctrine even if the act of a foreign sovereign violates UnitedStates public policy. See id. at 421-23 (rejecting Second Circuit's holding that act of statedoctrine does not apply to actions in violation of international law). The doctrine is applica-ble when a foreign sovereign is a plaintiff or a defendant. See, e.g., First Nat'l City Bank v.Banco Nacional de Cuba, 406 U.S. 759, 772 (1972) (Douglas, J., concurring) (explaining thatapart from cases when another nation is at war with United States, sovereign states are al-lowed to sue in United States courts); Sabbatino, 376 U.S. at 437-38 (noting act of state doc-trine is applicable even though foreign sovereign is a plaintiff in United States); Republic ofPhilippines v. Marcos, 806 F.2d 344, 356-57 (2d Cir. 1986) ("Marcos I") holding that Philip-pine Government's suit to enjoin its former president from transferring property locatedwithin United States was justiciable), cert. denied, 107 S.Ct. 2178 (1987); Frazier v. ForeignBondholders Protective Council, Inc., 283 A.D. 2d 44, 45, 12 5 N.Y.S.2d 900, 901 (1953) (re-fusing to adjudicate suit when foreign government sued through agent); see also infra notes 14-10 7 and accompanying text (describing judicially created act of state doctrine).Courts have characterized many types of governmental actions as sufficiently public to in-voke the act of state doctrine. Many courts have focused primarily on whether adjudicationwould interfere with United States foreign policy. See, e.g., Sabbatino, 376 U.S. at 432-33 (hold-ing that courts determining validity of foreign acts of state may hinder foreign policy goals);United States v. Pink, 315 U.S. 203, 233-34 (1942) (noting inquiry based on state law mightseriously thwart American foreign policy); Underhill v. Hernandez, 16 8 U.S. 250, 252 (1897)(holding act of state doctrine precludes United States courts from adjudicating Venezuelanmilitary official's refusal to issue passport to United States citizen); DeRoburt v. Gannett Co.,733 F.2d 701, 703 (9th Cir. 1984) (stating act of state doctrine prevents courts from determin-ing validity of loans made by foreign ruler), cert. denied, 469 U.S. 1159 (1985); InternationalAss'n of Machinists v. OPEC, 649 F.2d 1354, 1361 (9th Cir. 1981) (refusing to decide whetherOPEC's price fixing activities should be declared illegal because adjudication would interferewith United States foreign policy), cert. denied, 454 U.S. 1163 (1982); Frolova v. USSR, 558 F.Supp. 358, 361 (N.D. Il. 983) (stating doctrine barred United States courts from examiningSoviet Union's refusal to allow plaintiff's husband to emigrate to United States), aft'd, 761F.2d 570 (7th Cir. 1985); but see Alfred Dunhill of London, Inc. v. Republic of Cuba, 425 U.S.682, 685 (1976) (plurality opinion) (holding act of state doctrine inapplicable when foreignsovereign engaged in "commercial activities"); City Bank, 406 U.S. at 767-68 (plurality opin-ion) (arguing courts may determine validity of foreign government's expropriation when ex -ecutive states that adjudication will not interfere with foreign relations); Marcos 1, 806 F.2d at359 (suggesting justification for application of act of state doctrine is weak when foreign gov-ernment requests scrutiny of its actions because court would be unlikely to interfere withforeign relations).

Courts have applied the act of state doctrine in numerous situations. See, e.g., Sabbatino, 376U.S. at 401 (refusing to adjudicate Cuban Government's expropriation of property becausebarred by act of state doctrine); Underhill, 168 U.S. at 252 (applying doctrine to shield stateofficials' act of false imprisonment); Victory Transport Inc. v. Comisaria General de Abasteci-mientos y Transportes, 336 F.2d 354, 362-63 (2d Cir. 1964) (stating act of state doctrineprecludes courts from inquiring into validity of acts of recognized sovereign committed withinits own territory), cert. denied, 381 U.S. 934 (1965); Pons v. Republic of Cuba, 294 F.2d 925,926 (D.C. Cir. 1961) (noting that United States may notjudge actions foreign sovereign takesagainst its own citizens), cert. denied, 368 U.S. 960 (1962); Banco de Espana v. Federal ReserveBank, 114 F.2d 438, 442 (2d Cir. 1940) (holding United States courts may not determinewhether foreign sovereign violated its own laws); National Inst. of Agrarian Reform v. Kane,15 3 So.2d 40, 43 (Fla. Dist. Ct. App. 1963) (noting act of state doctrine bars determination ofvalidity of Cuban expropriation, notwithstanding fact that expropriation may have been dis-criminatory, arbitrary, and confiscatory); Three Stars Trading Co. v. Republic of Cuba, 32Misc. 2d 4, 5, 222 N.Y.S.2d 675, 676 (Sup. Ct. 1961) (holding foreign sovereign immune fromsuit for governmental action committed within own territory); see also D'Angelo v. PetroleosMexicanos, 331 A.2d 388, 391-92 (Del. 1974) (stating application of act of state doctrine lim-its issues, but does not deprive court ofjurisdiction).


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19881 REPUBLIC OF PHILIPPINES V. MARCOS 227courts from issuing adverse judgments against foreign officials,thereby embarrassing relations and interfering with the executivebranch's conduct of foreign affairs.4 Although in theory this is avalid justification, the practical application of the doctrine results ina decision which immunizes a foreign government from suit andleaves a plaintiff without recourse.5 In order to promote interna-tional comity6 and to avoid injustice to such plaintiffs, courts havecreated specific exceptions to the doctrine.7 For example, somecourts have held that illegal activities of foreign officials do not con-stitute public acts, and therefore the act of state doctrine does notprotect them.8 In so ruling, the courts have reasoned that a ruler's

4. Clayco Petroleum Corp. v. Occidental Petroleum Corp., 712 F.2d 404,406 (9th Cir.),cert. denied, 464 U.S. 1040 (1983).5. See id. at 409 (holding act of state doctrine bars plaintiff's claim involving foreignsovereign even though plaintiff left without impartial jurisdiction to file suit); Hunt v. Mobil

Oil Corp., 550 F.2d 68, 79 (2d Cir.) (leaving plaintiff without recourse against oil companybecause suit could implicate Libyan Government), cert. denied, 434 U.S. 984 (1977).See infra notes 52-107 and accompanying text (discussing exceptions to act of state

doctrine).6. Comity requires sovereign nations to recognize the legislative, executive, andjudicialactions of every other sovereign nation. See Banco Nacional de Cuba v. Sabbatino, 376 U.S.

398, 420 (1964) (stating comity is neither matter of absolute obligation nor mere courtesy andgood will toward other nations (citing Hilton v. Guyot, 159 U.S. 113, 163-64 (1890))).7. Courts have developed numerous exceptions to the act of state doctrine. See, e.g.,Alfred Dunhill of London, Inc. v. Republic of Cuba, 425 U.S. 682, 690 (1976) (plurality opin-

ion) (refusing to apply act of state doctrine when sovereign engages in "commercial activi-ties");Jimenez v. Aristeguieta, 311 F.2d 547, 557-58 (5th Cir. 1962) (holding criminal actionsof dictator were for his own benefit, and therefore, severable from his official actions), cert.denied, 373 U.S. 914 (1963); Bernstein v. N.V. Nederlandsche-Amerikaansche Stoomvaart-Maatschappij, 173 F.2d 375, 376 (2d Cir. 1954) (noting exception when executive authorizesadjudication); see also Sabbatino, 376 U.S. at 427-28 (asserting that act of state doctrine doesnot apply when judicial inquiry would not disturb proper distributions of functions betweenbranches of government in foreign affairs); First Nat'l City Bank v. Banco Nacional de Cuba,406 U.S. 759, 767-68 (1972) (applying Bernstein exception to expropriation); Marcos I, 806F.2d at 354 (suggesting court less justified in applying act of state doctrine when foreign stateasks court to scrutinize its actions); Ramirez de Arellano v. Weinberger, 745 F.2d 1500, 1502(D.C. Cir. 1984) (en banc) (refusing to apply act of state doctrine because alleged expropria-tion had not been completed in foreign country), vacatedmem., 105 S. Ct. 2353 (1987); Repub-lic of Iraq v. First Nat'l City Bank, 353 F.2d 47, 51 (2d Cir. 1965) (holding act of state doctrinedoes not insulate confiscatory decree affecting property within United States), cert. denied, 382U.S. 1027 (1966); cf In re GrandJury Proceedings,John Doe No. 700,817 F.2d 1108, 1110-11(4th Cir.) (permitting government to waive former ruler's head of state immunity), cert. deniedsub nom. Marcos v. United States, 108 S. Ct. 212 (1987).But see Kalamazoo Spice Extraction Co. v. Provisional Military Gov't of Socialist Ethiopia,

729 F.2d 422, 427-28 (6th Cir. 1984) (holding courts should adjudicate acts of state whentreaty articulates controlling legal principles). Some commentators argue, however, that theSixth Circuit's ruling in Kalamazoo was based on executive and American Bar Association in-fluence. See Bayzler, Abolishing the Act of State Doctrine, 134 U. PA . L. REv. 325, 372 (1986)(noting State Department and American Bar Association urged court to recognize treatyexception).

8. See, e.g., DeRoburt v. Gannett Co., 733 F.2d 701, 704 (9th Cir. 1984) (noting rulermay sue and be sued in his capacity as private citizen), cert. denied, 469 U.S. 1159 (1985);Filartiga v. Pena-Irala, 630 F.2d 876, 889 (2d Cir. 1980) (dicta) (observing that police officer'sunratified violation of alien tort statute was not act of state); Jimenez v. Aristeguieta, 311 F.2d547, 557 (5th Cir. 1962) (holding act of state doctrine applicable only when ruler acting in


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THE AMERICAN UNIVERSITY LAW REVIEW [Vol. 38:225illegal activities are crimes against his nation, thereby constitutingprivate activities, such that adjudication would not interfere with thedoctrine's goals.9

In Republic ofPhilippinesv. Marcos,'0 (Marcos 11), the United StatesCourt of Appeals for the Ninth Circuit refused the current Philip-pine Government's request to freeze property of former PresidentFerdinand Marcos, allegedly purchased with money he stole fromthe Philippine Government, pending a hearing on the merits. 1' Thecourt held that Marcos' activities were public actions, even if illegalunder Philippine law and, therefore, the act of state doctrine pre-cluded judicial review. 12 The court also stated that adjudication ofthe dispute would unduly interfere with foreign relations, despitethe joint request of the Philippine Government and the UnitedStates executive branch to waive the doctrine.' 3

This Note analyzes the Marcos II decision in light of prior deci-sions utilizing the act of state doctrine. Part I presents the historicalbackground of the doctrine. Part II discusses the procedural andfactual history ofMarcos II. Part III analyzes the court's opinion andrationale in Marcos II in view of prior cases addressing the purposeand exceptions to the doctrine. This Note concludes that the NinthCircuit's decision in Marcos II defies the purposes of the act of statedoctrine, and will ultimately only cause friction between the UnitedStates and the Philippines.

I. HISTORICAL BACKGROUND OF THE ACT OF STATE DOCTRINEA. Common Law Origins

An examination of the historical development of the act of statedoctrine is essential to an evaluation of the Ninth Circuit's decisionin Marcos 11. Act of state immunity was derived from sovereign im-munity, a creation of twelfth century English monarchs which pro-tected them from civil suit.14 With the decline of the monarchy, theofficial capacity), cert. denied, 373 U.S. 914 (1963). See also Republic of Philippines v. Marcos,806 F.2d 344, 359 (1986) (noting deposed ruler did not prove illegal actions were sovereignacts); Sharon v.Time, Inc., 599 F. Supp. 538, 545 (S.D.N.Y. 1984) (stating government offi-cial's unratified violation of laws was not act of state).9. See infra notes 89-94 and accompanying text (discussing what constitutes private ac-tions of rulers).10. Republic of Philippines v. Marcos, 818 F.2d 1473 (9th Cir.) ("Marcos II"), reh'ggranted, 832 F.2d 1110 (9th Cir. 1987) (en banc).

11 . Id. at 1490.12. Id. at 1482-85.13. Id. at 1485-89.14. See Comment, Act of State and Sovereign Immunities Doctrines: The Need to EstablishCon-gruity, 17 U.S.F. L. REv. 91, 93-94 (1982) (stating that act of state doctrine is corollary tosovereign immunity). Courts have long recognized the common origin of the two doctrines.

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REPUBLIC OF PHILIPPINES V. MARCOSstate replaced the king as the sovereign entity, and state officials be-came the symbols of the new government.1 5 Sovereign immunity,however, protected only the state from sUit. 16 The act of state doc-trine arose to protect state officials acting on behalf of the sovereignfrom suit.17

The United States Supreme Court laid the foundation for the actof state doctrine in 1812 in The Schooner Exchange v. McFaddon,18when it stated that the United States must respect the independenceSee, e.g., Schooner Exch. v. McFaddon, 11 U.S. (7 Cranch) 116, 146 (1812) (emphasizing closedependence of act of state immunity upon sovereign immunity); Allied Bank Int'l v. BancoCredito Agricola de Cartago, 757 F.2d 516, 520 (2d Cir. 1985) (stating act of state doctrinepreviously linked with principles of sovereign immunity), cert. dismissed, 473 U.S. 934 (1985);Libra Bank Ltd. v. Banco Nacional de Costa Rica, 570 F. Supp. 870, 876 (S.D.N.Y. 1983)(noting act of state doctrine long rooted in principles of sovereign immunity).

The sovereign immunity doctrine prohibits United States courts from adjudicating any suitin which a foreign state is a defendant. Schooner Exch., 11 U.S. at 146. By contrast, the act ofstate doctrine, rather than barring adjudication, accords presumptive validity to official acts ofa sovereign. Banco Nacional de Cuba v. Sabbatino, 376 U.S. 398, 438 (1964); see also NationalAm. Corp. v. Federal Republic of Nigeria, 448 F. Supp. 622, 640 (S.D.N.Y. 1978) (explainingsovereign immunity raises jurisdictional bar, while act of state doctrine functions as issue pre-clusion device), aff'd, 597 F.2d 314 (2d Cir. 1979); Henkon, Act of State Today: Recollections inTranquility,6 COL.J. TRANSNAT'L L. 175, 178-80, 187-88 (1967) (comparing sovereign and actof state immunities); R. FALK, THE ROLE OF DoMEsTIC COURTS IN THE INTERNATIONAL LEGALORDER 96-102 (1964) (describing similarities and differences of act of state and sovereignimmunity doctrines).

The two doctrines share the same rationale. Sovereign states are equal and independent.Schooner Exch., 11 U.S. at 146. ChiefJustice Marshall stated that each nation possesses com-plete and absolute sovereignty within its own territory. Id. at 136. One nation cannot judgethe rights of another nation without implying its own superiority. Id. In practice, nations hadrefused to prosecute other nations for wrongful actions within the other nation's territory. SeeUnderhill v. Hernandez, 168 U.S. 250, 253 (1897) (noting act of state doctrine requires everystate to respect independence of every other sovereign by not judging acts of another sover-eign done within its own territory). Through common usage, states began to expect suchtreatment. Id.; see also West v. Multibanco Comermex, S.A., 807 F.2d 820, 828 (9th Cir.) (ex-plaining one sovereign's evaluation of other nation's laws, at least in absence of foreign gov-ernment's consent, intrudes upon state's coequal status), cert. denied, 107 S. Ct. 2483 (1987);DeRoburt v. Gannett Co., 733 F.2d 701, 712 (9th Cir. 1984) (barring libel suit on groundsthat adjudication would require courts to judge foreign policies), cert. denied, 469 U.S. 1159(1985); Holzer v. Deutsche Reichsbahn-Gesellschaft, 277 N.Y. 474, 478, 14 N.E.2d 798, 802(Ct. App. 1938) (noting act of state doctrine bars United States courts from reviewing Germanconfiscatory act); Wulfsohn v. Russian Socialist Federated Soviet Rep., 234 N.Y. 372, 377, 138N.E. 24, 29 (Ct. App. 1923) (prohibiting examination of sovereign nation's actions to avoidimplication that United States'judgment is superior). Thejudiciary should avoid adjudicatingdisputes involving foreign affairs because the executive branch is the most competent in thatarea. See Ex ParteRepublic of Peru, 318 U.S. 576, 588-89 (1943) (noting doctrines allow judi-ciary to respect actions of executive and not embarrass foreign relations); Schooner Exch., I1U.S. at 144-46 (arguing principles of act of state and sovereign immunity doctrines preventjudiciary from embarrassing executive branch).15. See Bayzler, supranote 7, at 330-31 (examining history of act of state doctrine); Com-ment, supranote 14, at 93 (reviewing development of act of state doctrine in England).16. Bayzler, supra note 7, at 330-31.17. See Comment, supra note 14, at 93 (noting that act of state doctrine arose to protect

state officials); see generallyJones,Act of ForeignState in EnglishLaw: The Ghost Goes East, 22 VA.J.INT'L L. 433 (1982) (tracing development of act of state doctrine in England).18. 11 U.S. (7 Cranch) 116 (1812).

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THE AMERICAN UNIVERSITY LAW REVIEW [Vol. 38:225and sovereignty of every nation. 19 The Court, noting that nationsordinarily maintain absolute jurisdiction within their own territory,explained that a nation cannot adjudicate another nation's rightswithout implying that its judgment is superior.20 Moreover, any af-front to the official representatives of a government would also in-sult the sovereign.2 ' To avoid inferences of inequality, allsovereigns had, therefore, either expressly or implicitly relinquishedtheir absolute territorial jurisdiction to shield states entering a for-eign country from suit.2 2 The Court noted, however, that countriescould withdraw such consent upon advance notice.23

The United States Supreme Court first recognized the act of statedoctrine as a doctrine distinct from sovereign immunity in 1897,when it decided Underhillv. Hernandez.2 4 In Underhill, an Americancitizen alleged that a Venezuelan military commander refused togrant him a passport in an attempt to force him to remain in Vene-zuela. 25 The Court, affirming the circuit court's judgment for thedefendant, stated that the Venezuelan general, as head of the defacto government, was not civilly responsible for his actions.2 6Chief Justice Fuller noted in dictum that every sovereign must re-spect the independence of all other sovereigns.2 7 The courts in one

19. Schooner Exch. v. McFaddon, 11 U.S. (7 Cranch) 116, 120 (1812).20. Id. at 136. In Schooner Exchange, the plaintiffs sought to attach a French vessel, which

the French Government had seized. Id. The Supreme Court refused to attach the vessel be-cause the principle of sovereign immunity shielded the French Government from suit. Id. at119. The Court also noted that act of state and sovereign immunity shared a common origin.Id. at 120.21 . Id.22. Id. at 137.23. Id. The Court required notice, however, because the practice of extending immunitywas so widespread that other nations justifiably expected such immunity. Id.24. 168 U.S. 250, 253 (1897). Some historians argue that the political situation in Vene-

zuela from 1877-1899 influenced the Supreme Court in changing the doctrine. Because of anAmerican law providing that the success of a new government accords retroactive validity toall of its acts, an application of sovereign immunity would have accorded immunity to theprovisional government. See Gordon, The Originsof the Act of State Doctrine, 8 Rut.-CM. LJ.595, 615 (1977) (describing rationale for act of state doctrine).

25. Underhill v. Hernandez, 168 U.S. 250, 253 (1897).26. Id. at 254.27. Id. at 252. The language in Underhill,focusing on the acts of the foreign government,extended the act of state doctrine from an emphasis on granting personal immunity to a focus

on the acts of the state itself. See Comment, Act ofState and Sovereign Immunities Doctrines: TheNeed to Establish Congruity, 17 U.S.F. L. REv. 91 , 96 (1982) (foreign state is only immune for itspublic acts, not if it functions as private party).Because the Court's decision was based on personal immunity grounds, the "classic Ameri-can statement" was superfluous. Banco Nacional de Cuba v. Sabbatino, 376 U.S. 398, 416(1964) (characterizing dictum in Underhillas "classic American statement"). See Zander, TheAct ofState Doctrine, 53 AM.J. Iwr'L L. 826 (1959) (characterizing language in Underhillas dic-tum); Comment, The Ac t ofState Doctrine: A HistoryofJudicialLimitationsand Exceptions, 18 HARv.INT'L LJ. 677, 680 (1977) (describing language in Underhillas "superfluous"). See also Rami-rez de Arellano v. Weinberger, 745 F.2d 1500, 1533 (D.C. Cir. 1984), vacatedmein., 105 S. Ct.2353 (1985) (noting traditional formulation of act of state doctrine found in Underhilldictum).

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1988] REPUBLIC OF PHILIPPINES V. MARCOScountry should not judge governmental acts of another sovereigndone within its own territory because adjudication would infringeupon the other nation's autonomy.2 8

B. Rationales Underlying the Act of State DoctrineCourts apply the act of state doctrine based on various theories

including the conflict of laws theory, the theory ofjudicial deferenceto the executive branch, and the theory of international comity.2 9According to the conflict of laws theory, the act of state doctrinerequires courts to presume that the official actions of sovereignswould be valid under foreign law.30 When a foreign act of state oc-curs within the foreign sovereign's territory, choice of law principlesrequire application of foreign law.3 ' Moreover, under traditionalchoice of law principles, the forum court may refuse to apply foreignlaw if the foreign law violates the forum's public policy.3 2 The act ofstate doctrine, however, precludes courts from challenging the for-eign law.3 3 Accordingly, a United States court may adjudicate a dis-pute against a foreign official, but cannot question the legality of the

28. Underhill v. Hernandez, 168 U.S. 250, 252 (1897). In the following years, theSupreme Court reiterated this policy in applying the doctrine. See, e.g., Ricaud v. AmericanMetal Co., 246 U.S. 304, 309 (1918) (noting courts of one nation will not judge anothernation's actions committed within the sovereign's own territory); Oetjen v. Central LeatherCo., 246 U.S. 297, 300 (1918) (applying act of state doctrine to dispute in which Mexicanleader seized plaintiff's property an d sold it to defendant); American Banana Co. v. UnitedFruit Co., 213 U.S. 347, 356 (1909) (arguing courts can not judge sovereign acts of othernations); cf Hunt v. Mobil Oil Corp., 550 F.2d 68, 79 (2d Cir.) (upholding defendant's claimthat act of state doctrine foreclosed adjudication of alleged antitrust violation because adjudi-cation would require evaluation of Libya's governmental action), cert. denied, 434 U.S. 984(1977).29. See infra notes 30-51 and accompanying text (discussing rationales for act of statedoctrine).30. RESTATEMENT (SECOND) OF CONFLICT OF LAws 1 (1971) (defining choice of law asbody ofjurisprudence that recognizes that world is composed of territorial states having sepa-rate and differing systems of law; events occur that may significantly affect more than one statecreating necessity for special body of rules); Sabbatino, 376 U.S. at 446 (White, J., dissenting)(arguing courts may apply international law to foreign acts of state in violation of interna-tional law); Sharon v. Time, Inc., 599 F. Supp. 538, 546 (S.D.N.Y. 1984) (noting doctrine doesnot result in loss of jurisdiction, but in rule of law to make decision).

31. See RESTATEMENT (SECOND) OF CONFLICT OF LAws 6 (1971) (describing choice oflaw principles).32. Id. 90.33. Banco Nacional de Cuba v. Sabbatino, 376 U.S. 398, 446 (1964) (White, J., dissent-ing); see also RESTATEMENT (SECOND) OF TH E FOREIGN RELATIONS LA W OF TH E UNITED STATES 469, Reporters' Note 1 (Tent. draft No. 7 1986) (explaining choice of law theory). See Ri-caud v. American Metal Co., 246 U.S. 304, 309-10 (1918) (holding act within boundaries ofone sovereign cannot become subject of reexamination in courts of another); American Ba-nana Co. v. United Fruit Co., 213 U.S. 347, 356 (1909) (stating law of country determineswhether act is lawful or unlawful). In Oetjen v. Central Leather Co., 246 U.S. 297 (1918), theSupr em e Court invoked the theory of comity as well as the theory of choice of law to recog-nize the acts of the Mexican Government. Id. at 304.


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232 THE AMERICAN UNIVERSITY LAW REVIEW [Vol. 38:225official's actions. 34

The Supreme Court derived a second theory, the theory of inter-national comity, from the theory of conflict of laws.35 The principleof comity requires courts to demonstrate respect for foreign nationsby permitting them to adjudicate their own disputes. 36 Accordingly,United States courts could not adjudicate the validity of the acts ofother sovereigns because a negative determination would jeopard-ize peace between the nations.3 7

A third theory, the theory of judicial deference to the executive,states that the act of state doctrine is primarily justified becausejudi-cial review of the public acts of a foreign power could interfere withthe United States executive branch's conduct of foreign affairs withrespect to that country.38 Accordingly, courts should abstain fromdeciding cases involving acts of a foreign sovereign because a judi-

34. See Sabbatino, 376 U.S. at 446-50 (White, J., dissenting). In the early twentieth cen-tury, the Supreme Court applied the act of state doctrine to bar cases based on the theory ofconflict of laws. See Ricaud v. American Metal Co., 246 U.S. 304, 309 (1918) (arguing courtscannot question actions of foreign sovereigns); American Banana Co. v. United Fruit Co., 213U.S. 347, 356 (1909) (stating principles of comity prevent court from interfering with execu-tive decisions of another sovereign). Justice Holmes held in the 1909 case of Ameican BananaCo. that the act of state doctrine barred the United States froi applying its antitrust laws to aconspiracy in the United States to do acts in another jurisdiction, which would be illegal ifperformed here. Id. at 359.

35. Oetjen v. Central Leather Co., 246 U.S. 297, 304 (1918) (stating courts may notapply forum's law to actions of foreign official committed in foreign sovereign's territory);Ricaud,246 U.S. at 309 (holding that United States courts must assume that actions of foreigngovernments are proper).

36. Brown v. Babbitt Ford, Inc., 117 Ariz. 192, 571 P.2d 689, 695 (1977).37. See Oetjen, 246 U.S. at 304 (holding that to permit courts to examine validity of acts of

another sovereign would "imperil the amicable relations between governments and vex thepeace of nations").38. First Nat'l City Bank v. Banco Nacional de Cuba, 406 U.S. 759, 765 (1971) (plurality

opinion of Rehnquist, J.) (citing Underhill v. Hernandez, 168 U.S. 250, 253 (1897)). Thetheory ofjudicial deference to the executive is based on the premise that the executive branchhas the power to control foreign relations. See supra notes 1-3 and accompanying text (dis-cussing role of executive in foreign affairs).

Another theory is that the act of state doctrine is based on the political question doctrine.The political question doctrine states that the executive and legislature have the exclusivepower to conduct foreign affairs. Oetjen, 246 U.S. at 302. Accordingly, the judiciary shouldnot adjudicate international disputes. Id. Justice Brennan argued in his dissent in City Bankthat Sabbatino held that the determination of the validity of a foreign act of state is sometimes a"political question" not cognizable in our courts. City Bank, 406 U.S. at 787-88 (Brennan, J.,dissenting); but see L. TRIBE, AMERICAN CONSTITUTIONAL LAw 2-2 to 2-4 (1978) (notingjudiciary must operate free of influence from executive or legislative branches).

Other courts have applied the doctrine based on the purpose of the foreign sovereign'sactivity. See, e.g., Clayco Petroleum Corp. v. Occidental Petroleum Corp., 712 F.2d 404, 406(9th Cir. 1983) (noting act of state doctrine protects sovereign against private citizen in suitfor corrupt activities), cert. denied, 464 U.S. 1040 (1984); International Ass'n of Machinists v.OPEC, 649 F.2d 1354, 1361 (9th Cir. 1981) (holding act of state doctrine prevents court fromenjoining alleged OPEC price fixing); MOL, Inc. v. Peoples Republic of Bangladesh, 572 F.Supp. 79, 84 (D. Or. 1983) (stating courts must examine purposes of governmental action inconsidering application of act of state doctrine), aff'd, 736 F.2d 1326 (9th Cir.), cert. denied, 469U.S. 1037 (1984).


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19881 REPUBLIC OF PHILIPPINES V. MARCOS 233cial decision contrary to executive foreign policy could interferewith foreign affairs.39 If a court is uncertain whether a decision willbe inconsistent with United States foreign policy, it should abstainfrom judgment.40Finally, in Banco Nacionalde Cuba v. Sabbatino,41 the Supreme Courtcharacterized the policy underlying the act of state doctrine as thatof separation of powers.42 In Sabbatino,Banco Nacional de Cuba, anagent of the Cuban Government, brought suit in the United Statesalleging that Sabbatino, an American commodities broker, con-verted property belonging to the Cuban Government.43 Sabbatinoargued that the property belonged to him and that the Cuban Gov-ernment had illegally expropriated it.4 4 Moreover, he argued thatthe act of state doctrine should not protect the Cuban Governmentbecause the government's act of expropriating the property violatedinternational law.45 The majority rejected the district court's con-clusion that a United States court could pass judgment on a foreignstate's local act committed in violation of international law.46Balancing the interests of the parties, the role of the executive,and the role of the judiciary, the Court alluded to several factors todetermine whether judicial review of the Cuban expropriation de-cree was proper.47 Specifically, the Court focused on the degree of

39. See supra notes 1-3 an d accompanying text (discussing judicial deference toexecutive).40. See Allied Bank Int'l v. Banco Credito Agricola de Cartago, 566 F. Supp. 1440, 1444(S.D.N.Y. 1983) (refusing to hear case because of possible determination that defendantswould be required to make payments contrary to directives of their government), aff'd 733F.2d 23 (2d Cir. 1984) (published in advance sheets only), withdrawn and vacated,757 F.2d 516(2d Cir.), cert. dismissed,473 U.S. 934 (1985); Bernstein v. N.V. Nederlandsche-AmerikaanscheStoomvaart-Maatschappij, 210 F.2d 375, 375 (2d Cir. 1954) (noting court in previous suitallowed defendant to invoke act of state doctrine because executive's position was unclear).41. 376 U.S. 398 (1964).42. Banco Nacional de Cuba v. Sabbatino, 376 U.S. 398, 427-37 (1964).43. Id. at 406.

44. Id.45. Id, at 420.46 . Id . at 439.47. Id. at 423-24, 428-29. The court alluded to the following factors:1. Possible impairment of the executive's conduct of foreign affairs. The Court im-plied this in its discussion of the separation of powers doctrine. Id. at 423-24.2. The degree of consensus in international law on the act in question. Id. at 428.3. The existence of standards in a treaty. Id.

4. Continued United States recognition of the foreign government. Id.5. Sensitivity of the issue to national concerns. Id.6. Provisions for prompt, adequate, and effective compensation. Id. at 429.See also First Nat'l City Bank v. Banco Nacional de Cuba, 406 U.S. 759, 764-65 (1972) (plu-.rality opinion) (adopting Bernstein exception because purpose of act of state doctrine is toprevent executive embarrassment). But see, Alfred Dunhill of London, Inc. v. Republic ofCuba, 425 U.S. 682, 698 (1976) (rejecting suggestion of State Department to abolish act ofstate doctrine). See infra note 57 and accompanying text (discussing legislative and judicialreaction to Sabbatino decision).


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234 THE AMERICAN UNIVERSITY LAW REVIEW [Vol. 38:225consensus in international law as to the legality of the act in ques-tion, the current political status of the foreign sovereign, and theimplications that adjudication would have on American foreign pol-icy.48 The Court noted that neither principles of international lawnor the Constitution compelled the act of state doctrine. 49 The ma-jority explained, however, that the doctrine had "constitutional un-derpinnings" requiring the judiciary to refrain from interfering withthe executive's conduct of foreign relations. 50 The Court in Sabba-tino, therefore, concluded that it could not review the Cuban Gov-ernment's expropriation of a sugar contract, no matter howoffensive the Cuban seizure was to United States public policy, be-cause the executive branch traditionally handled such matters. 5 1

48. Banco Nacional de Cuba v. Sabbatino, 376 U.S. 398, 423-24, 428-29 (1964). It isuncertain whether the test in Sabbatino applies outside of the expropriation area. See Note,Alien TortClaims Act, 27 VA.J. INT'L L. 433, 438-39 (1987) (noting that it is unclear under whatcircumstances Sabbatino test applies); Note, RehabilitationandExoneration of the Act of State Doc-trine, 12 N.Y.U.J. INT'LL. & POL'Y 599, 612 (1980) (arguing that Sabbatino's hree factor test is"neat," but of "minimal utility"). Lower courts frequently have applied a Sabbatino type bal-ancing test to dismiss a wide variety of foreign transactions, although none of these tests arewidely accepted. See Compania de Gas de Nuevo Laredo v. Entex, 686 F.2d 322, 325 (5th Cir.1982). The court in Compania suggested judicial consideration of four factors: (1) the degreeof involvement of the foreign state; (2) whether the validity of foreign law is at issue; (3)whether the foreign state is a named defendant; (4) whether there is a demonstration of po-tential harm to American commerce. Id. (citing Industrial Investment Dev. Corp. v. MitsuiCo., 594 F.2d 48 (5th Cir. 1979), cert. denied, 445 U.S. 903 (1980)). See also Timberlane Lum-ber Co. v. Bank of Am., 549 F.2d 597, 612 (9th Cir. 1976) (holding courts must weigh inter-ests of and links to United States with nature and depth of foreign state's interest).Courts have used these balancing tests in numerous situations. See, e.g., Clayco PetroleumCorp. v. Occidental Petroleum Corp., 712 F.2d 404, 406 (9th Cir. 1983) (bribery), cert. denied,464 U.S. 1040 (1984); DeRoburt v. Gannett Co., 733 F.2d 701, 703 (9th Cir. 1984) (libel), cert.denied, 469 U.S. 1159 (1985); MOL, Inc. v. Peoples Republic of Bangladesh, 572 F. Supp. 79,83 (D. Or. 1983) (commercial exportation of monkeys), aff'd 736 F.2d 1326 (9th Cir.), cert.denied, 469 U.S. 1037 (1984).49. Sabbatino, 376 U.S. at 423.

50. Id. The court argued that the basic relationship between the branches of govern-ment in a system of separation of powers compels the act of state doctrine. Id. The doctrineprevents the judicial branch from interfering with the executive's role in controlling foreignaffairs. Id;see also Henkin, The ForeignAffairs Powersof the FederalCourts: Sabbatino, 64 COLUM. L.REv. 805, 809-13 (1964) (suggesting that Court in Sabbatino ooked to Constitution to providefederal basis for doctrine to circumvent states from invoking Erie doctrine and applying statelaws to foreign sovereigns).51 . Sabbatino, 376 U.S. at 436. Congress disliked the Sabbatino decision because it per-mitted Fidel Castro to prevail in American courts against American victims. See R. FALK, THEAFrERMATH OF Sabbatino, 35-52 (1965) (describing congressional opinion of Sabbatino). In1964, Congress passed the "Sabbatino Amendment" to the Foreign Assistance Act. Pub. L.No. 88-633, pt. III, 301(d)-(g), Oct. 7, 1964, 78 Stat. 1013 (codified as amended at 22U.S.C. 2370(e)(2) (1982)). The amendment stated that the act of state doctrine should notbar courts from determining the legality of a foreign government's violation of internationallaw. Id. The district court, on remand in Sabbatino, determined that Congress intended toapply the amendment retroactively, and declared that the Cuban expropriation was in viola-tion of international law. Banco Nacional de Cuba v. Farr, 243 F. Supp. 957, 967 (S.D.N.Y.1965).


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REPUBLIC OF PHILIPPINES V. MARCOSC. Exceptions to the Act of StateDoctrine

Application of the act of state doctrine often leaves United Statesplaintiffs with no recourse against a foreign government. 52 Courts,therefore, have created five exceptions to the doctrine, in instanceswhen adjudication would not interfere with international comity. 53First, both the Second Circuit and a plurality of the Supreme Courthave articulated the Bernstein Exception, which states that adjudica-tion of a foreign act of state is proper when the State Departmentexpresses its approval. 54 Second, the Second and Fifth Circuitshave adopted an exception to the act of state doctrine when a for-eign official has engaged in activities that are illegal under applica-ble foreign law.5 5 Third, the Second Circuit has refused torecognize foreign acts of state affecting property within the UnitedStates, unless the act of state is consistent with United States law.56Fourth, the Second and Fourth Circuits have held that a ruler's actof violating his country's laws, for his own benefit, are private ac-tions outside the scope of the act of state doctrine. 57 Finally, theSecond Circuit has suggested that a court should honor a foreigngovernment's attempt to waive the act of state doctrine.58 Theseexceptions are described in detail below.1. The Bernstein exception

In Bernstein v. Amerikaansche Stoomvaart-Maatschappj,59 the SecondCircuit formulated a major exception to the act of state doctrine.The court held that a judicial determination of a foreign act of stateis proper when the State Department has announced that such judg-ment will not harm United States foreign relations. 60 In Bernstein, a

52. See Clayco Petroleum Corp. v. Ocddental Petroleum Corp., 712 F.2d 404, 409 (9thCir. 1983) (barring plaintiff's claim involving foreign sovereign under act of state doctrine,thereby leaving plaintiff without impartial forum), cert. denied, 464 U.S. 1040 (1984); Hunt v.Mobil Oil Corp., 550 F.2d 68, 79 (2d Cir.) (leaving plaintiff without recourse because act ofstate doctrine precluded its claim against Libyan Government), cert. denied, 434 U.S. 984(1977).53. See infra notes 59-107 and accompanying text (explaining exceptions to act of statedoctrine).54. See infra notes 59-73 and accompanying text (describing Bernstein exception).55. See infra notes 89-94 and accompanying text (examining Jimenez, Marcos I andFilartiga).56. See infra notes 81-88 and accompanying text tstating property situs exception).57. See infra notes 89-94 and accompanying text (explaining distinction between ruler'spublic an d private acts).58. See infra notes 95-107 and accompanying text (describing waiver exception).59. 210 F.2d 375 (2d Cir. 1954).60. Bernstein v. N.V. Amerikaansche Stoomvart-Maatschappij, 210 F.2d 375, 376 (2dCir. 1954). Some commentators argue that courts should yield to the executive branch insuits affecting foreign relations. See Note, AdjudicatingActs ofState in Suits Against Foreign Sover-eigns: A PoliticalQuestionAnalysis, 51 FORDHAm L. REv. 722, 730-32 (1983) (discussing Supreme

1988] 235


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THE AMERICAN UNIVERSITY LAW REVIEW [Vol. 38:225Jewish plaintiff brought suit against a Dutch corporation, allegingthat the corporation possessed property that the Nazi German Gov-ernment had seized from him.6 1 On a prior appeal, the court ruledthat the act of state doctrine barred the plaintiff from assertingclaims requiring the court to judge the acts of Nazi officials.62 Afterthat decision, the Department of State issued a letter stating that theDepartment would not object to the court's invalidation of the for-mer German Government's acts. 63 Based on this Bernstein letter, theSecond Circuit permitted the lower court to judge the Nazi officials'actions.64

The State Department did not issue another Bernstein letter foralmost two decades. 65 Finally, in First NationalCity Bank v. Banco Na-cional de Cuba,66 the State Department urged the Supreme Court torefuse to apply the act of state doctrine to bar a counterclaim againstthe Cuban Government. 67 The Department noted that foreign gov-ernments increasingly had expropriated property belonging toUnited States citizens.68 Moreover, the Department added thatwhen foreign governments brought suit to recover money UnitedStates financial institutions owed them, it would be unfair for UnitedStates courts to apply the doctrine to bar the institutions from coun-terclaiming for foreign expropriations. 69 Accordingly, applicationof the doctrine in these cases was unlikely to interfere with UnitedStates foreign policy.70

The Supreme Court, without fully accepting the Bernstein excep-Court's application of Bernstein in City Bank); See also R. FALK, TH E STATUS OF LAW IN INTERNA-TIONAL SociErY 426-47 (1970) (explaining that adjudication of foreign disputes by courts canjeopardize any ongoing negotiations between executive and foreign government). The con-trary argument is that executive guidance is not dispositive because the act of state doctrine isa judicial doctrine for guidance of the courts. See Bayzler, supra note 7, at 337 n.61 (1986)(noting courts interpret extradition treaties even though doing so may interfere with execu-tive's ability to conduct foreign policy); R. FALK, TH E ROLE OF DOMESTIC COURTS IN INTERNA-TIONAL ORDER 10-11 (1964) (arguing judicial deference to executive branch should be basedupon functional principles of allocation and not upon "ad hoc" subordination to executivepolicy).61. Bernstein, 210 F.2d at 376.

62. Id.63. Id. The letter from the State Department stated: "The policy of the Executive withrespect to claims asserted in the United States ... s 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." Id.64. Id. at 377.65. See Bayzler, supra note 7, at 134 (noting State Department has issued very few Bern-stein letters).66. 406 U.S. 759 (1972).67. First Nat'l City Bank v. Banco Nacional de Cuba, 406 U.S. 759, 762 (1972).68. Banco Nacional de Cuba v. First Nat'l City Bank, 442 F.2d 530, 537 (2d Cir. 1971),

rev'd, 406 U.S. 759 (1972).69. Id.70. Id.

236


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1988] REPUBLIC OF PHILIPPINES V. MARCOS 237tion, held that the act of state doctrine did not foreclose a decisionon the merits. 71 Justice Rehnquist, writing for the three memberplurality, noted that because the purpose of the doctrine was toavoid potential executive embarassment, the Court should defer tothe executive's wishes and find the act of state doctrine inapplica-ble.72 The Court was divided on this point, however, becausealthough three Justices concurred in the result, the remaining sixJustices did not expressly accept the Bernstein exception, and fourexplicitly rejected it.32. The commercial activity exception

Four years later, in Alfred Dunhill of London, Inc. v. Republic ofCuba,74 a plurality of the Supreme Court ignored the Bernstein excep-tion, but articulated a commercial activity exception to the act ofstate doctrine. 75 In Dunhill, the Cuban Government repudiated theobligation of a Cuban company to return funds owed to the peti-tioner.76 The Cuban Government claimed that the act of state doc-trine barred the Court from judging the repudiation because itconstituted an act of state.77 The State Department urged the Courtto overrule Sabbatino and abolish the act of state doctrine alto-gether.78 The plurality in Dunhillnoted that when a state enters the

71. City Bank, 406 U.S. at 760, 770, 773. FiveJustices agreed with this result but gavedifferent reasons for not applying the doctrine. Id.

72. Id. at 768.73. Id. at 760, 770, 773. Only Chief Justice Burger and Justice White accepted JusticeRehnquist's proposition that courts should heed executive approval for waiver of the doc-trine. Id. at 760. Justice Douglas relied on equitable principles articulated in National CityBank v. Republic of China, 348 U.S. 356, 365 (1955) (stressing consideration of fair dealing inapplication of foreign sovereign immunity defense). City Bank, 406 U.S. at 771. Justice Powellconcurred in the Court's judgment, noting that cases should be presumed justiciable absent ademonstrated negative impact on foreign relations. Id. at 775-76.Some scholars argue that these three views are inconsistent. See Hardisty, Reflections on StareDecdis, 55 IND. LJ. 1, 52-57 (1979) (arguing Justices' views on application of act of statedoctrine cannot be reconciled). Some courts have, therefore, been reluctant to apply theanalysis in City Bank. See Banco Nacional de Cuba v. Chase Manhattan Bank, 658 F.2d 875,884 n. 11 2d Cir. 1981) (refusing to apply analysis in City Bank).

Justice Brennan, joined in his dissent in City Bank, by Justices Stewart, Marshall and Black-mun, refused to recognize the Bernstein exception. First Nat'l City Bank v. Banco Nacional deCuba, 406 U.S. 759, 777-78 (1972) (Brennan, J., dissenting) (quoting Banco Nacional deCuba v. Sabbatino, 376 U.S. 398, 416 (1964)). Justice Brennan noted that it is questionablewhether the Court's decision to adjudicate a dispute should depend upon the executive's "ed-ucated guess." Id. He argued that, if the executive's position is wrong, adjudication will hin-der United States foreign relations. Id.74. 425 U.S. 682 (1976).75. Alfred Dunhill of London, Inc. v. Republic of Cuba, 425 U.S. 682, 706 (1976).

76. Id. at 685.77. Id.78. Id. at 685-86. Justice Marshall pointed out in his dissent that the executive branchargued the opposite when Sabbatino was before the Court. Id. at 725 n.10 (Marshall, J., dis-senting). The text of the State Department's letters is reproduced in the Sabbatino circuitcourt opinion. See Banco Nacional de Cuba v. Sabbatino, 307 F.2d 845, 858 (2d Cir. 1962),


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238 THE AMERICAN UNIVERSITY LAW REVIEW [Vol. 38:225marketplace seeking customers, it divests itself of its sovereignty,and takes on the character of a commercial trader.79 Accordingly,while the Court retained the act of state doctrine, it found the doc-trine inapplicable because the Cuban Government's repudiation ofthe commercial debts constituted a private action.803. UnitedStates property situs exception

Courts have also refused to apply the act of state doctrine toshield a foreign act of state affecting property within the UnitedStates81 unless such act is consistent with United States law and pol-icy.8 2 In Republic of Iraq v. FirstNationalCity Bank,83 the Republic ofIraq issued a decree to confiscate the assets of its deposed monarch,King Faisal II, whose assets were already located in the UnitedStates.8 4 The Second Circuit agreed that confiscatory decrees arethe very archetype of an act of state. The court then explained,however, that it would only apply the act of state doctrine to publicacts of a sovereign within the sovereign's own territory.8 5 When anact of state affects property within the United States, the foreignsovereign will have a diminished expectation of immunity, such thatadjudication will be unlikely to interfere with United States foreignrev'd, 376 U.S. 398 (1964). While the majority of the Supreme Court in Sabbatino never ac-knowledged that the Court was following the executive branch's recommendation, its formu-lation of the act of state doctrine was identical to the State Department's viewpoint asexpressed in the Solicitor General's brief. See Brief for the United States as Amicus Curiae at18, Banco Nacional de Cuba v. Sabbatino, 307 F.2d 845 (2d Cir. 1962) (No. 62-27268).79. Dunhill,425 U.S. at 696 (citing Ohio v. Helvering, 292 U.S. 360, 369 (1934)).80. Id. at 720.81. See, e.g., Tabacalera Severiano Jorge, S.A. v. Standard Cigar Co., 392 F.2d 706, 715-16 (5th Cir.) (stating court should only recognize foreign acts of state insofar as they are ableto come to complete fruition within the dominion of acting state), cert. denied, 393 U.S. 924(1968); United Bank Ltd. v. Cosmic Int'l, Inc., 542 F.2d 868, 873-74 (1976) (refusing to giveeffect to Pakistani expropriation order because situs of debts was in New York); Menendez v.Saks & Co., 485 F.2d 1355, 1364-65 (2d Cir. 1973) (stating debt is not located within foreignstate unless that state has personal jurisdiction over debtor), cert. denied, 425 U.S. 991 (1976);Maltina Corp. v. Cawy Bottling Co., 462 F.2d 1021, 1024 (5th Cir.) (noting that act whichrequires participation an d acquiescence of foreign state to be effective is not act within terri-tory of acting nation), cert. denied, 409 U.S. 1060 (1972); Weston Banking Corp. v. TurkiyeGaranti Bankasi, 57 N.Y.2d 315, 324, 442 N.E.2d 1195, 1199, 456 N.Y.S.2d 684, 688 (1982)(explaining debt not located within foreign state merely because suit could have been broughtin Turkey instead of United States); Manas y Pineiro v. Chase Manhattan Bank, N.A., 106Misc.2d 660,434 N.Y.S.2d 868, 872 (Sup. Ct. 1980) (holding debt located in foreign countrywhen both property and persons were inside foreign country at time of seizure).82. See Republic of Iraq v. First Nat'l City Bank, 353 F.2d 47, 51-52 (2d Cir. 1965) (refus-ing to enforce Iraqi confiscatory decree in United States because decree violated bill of attain-der clause and fifth and fourteenth amendment due process rights), cert. denied, 382 U.S. 1027(1966); cf Letelier v. Republic of Chile, 488 F. Supp. 665, 673-74 (1980) (refusing to invokesovereign immunity doctrine because it would violate principles of Federal Torts Claim Act).83. 353 F.2d 47 (2d Cir. 1965).

84. Republic of Iraq, 353 F.2d at 47.85. Id. at 50.


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1988] REPUBLIC OF PHILIPPINES V. MARCOS 239relations.86 Noting that King Faisal's property was located in theUnited States at the time Iraq passed the decree, the court con-cluded that the ordinance to confiscate assets in the United Statescould not be fully executed within Iraq, because it would be ineffec-tive unless United States courts enforced it.87 Accordingly, thecourt, finding the act of state doctrine inapplicable, refused to en-force the Iraqi decree 88 because it was shocking to our sense ofjustice.4. Privateact exception

Courts have also held that the act of state doctrine does not insu-late private criminal acts of foreign officials. 89 For example, inJimenez v. Aristeguieta,90 the Venezuelan Government charged thatJimenez, then Venezuela's chief executive, engaged in financialcrimes including securing kickbacks on government contracts andexpropriating property by official decree. 91 The United StatesCourt of Appeals for the Fifth Circuit noted thatJimenez, althoughcharacterized as a dictator, was only a public officer and not himselfthe sovereign. 92 Moreover, the court said that the act of state doc-trine applies only when sovereign officials act in their official capac-ity.9 3 Accordingly, the court held thatJimenez's acts were commoncrimes done for his own benefit, in violation of his position, andtherefore adjudication of their validity was proper.945. The waiver exception

Courts have also explained that application of the act of state doc-86. Id. at 51 .87. Id. The court noted that courts have termed confiscation of assets as contrary topublic policy. Id. (citing Zwack v. Kraus Bros. & Co., 237 F.2d 255, 259 (2d Cir. 1956); Pleschv. Banque Nationale de la Republique d'Haiti, 273 A.D. 224, 77 N.Y.S.2d 43 (1st Dept.), aff'd,

298 N.Y. 573, 81 N.E.2d 106 (1948)).88. Id. at 51-52.89. See, e.g., Republic of Philippines v. Marcos, 806 F.2d 344, 358-59 (2d Cir. 1986), cert.denied, 107 S. Ct. 2178 (1987) (stating that act of state doctrine does not insulate dictator'sillegal activities without proof that such actions were official acts); Filartiga v. Pena-Irala, 630F.2d 876, 889 (2d Cir. 1980) (noting act of state doctrine inapplicable to actions of policeofficial in violation of alien tort statute); Sharon v. Time, Inc., 599 F. Supp. 538, 544 (S.D.N.Y.1984) (declaring actions of state official outside scope of his authority are not acts of state).90. 311 F.2d 547 (5th Cir. 1962), cert. denied, 373 U.S. 914 (1963).91. Jimenez v. Aristequieta, 311 F.2d 547, 552 (5th Cir. 1962), cert. denied, 373 U.S. 91 4(1963).92. Id. at 557.93. Id. (citing Bernstein v. Van Heyghen Freres, S.A., 163 F.2d 246, 249 (2d Cir.), cert.denied, 332 U.S. 772 (1947); Banco de Espana v. Federal Reserve Bank, 114 F.2d 438, 444 (2dCir. 1940)). The court noted that Jimenez engaged in such illegal activities for his "privatefinancial benefit." Id. Because such acts were done in violation of his position, they were as

far from being sovereign acts as would be the act of rape. Id. at 558.94. Id. at 557-58.


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THE AMERICAN UNIVERSITY LAW REVIEW [Vol. 38:225trine when a foreign government requests that it be waived will in-terfere with international comity.9 5 In Republic of Philippines v.Marcos96 (Marcos I), the Philippine Government requested that theSecond Circuit grant a preliminary injunction to prevent the trans-fer or encumbrance of property in the State of New York thatMarcos had bought with funds he allegedly stole from the PhilippineGovernment, pending a decision on the merits. 97 Marcos claimedthat he acted in his official capacity and, therefore, the act of statedoctrine precluded the court from issuing the injunction. 98 TheSecond Circuit held that the doctrine did not apply because Marcoshad not met his strict burden of demonstrating that he acted withinhis official capacity.

99The court also suggested two additional rea-sons why the act of state doctrine was inapplicable in this case.

First, the court noted that because Marcos was no longer in power,adjudication of the legality of his acts was unlikely to interfere withthe executive's conduct of foreign policy. 100 Second, the courtstated that because the act of state doctrine reflects respect for thesovereignty of foreign nations, a court is less justified in applyingthe doctrine when a foreign state asks United States courts to ex-amine its action. 10 '

The United States Court of Appeals for the Fourth Circuit hasborrowed the Second Circuit's dictum in a case involving head ofstate immunity, a doctrine closely related to the act of state doctrine.The doctrine of head of state immunity maintains that a head ofstate and his immediate family are immune from the jurisdiction of a

95. See infranotes 96-107 and accompanying text (explaining that court's failure to honorgovernment's request for waiver of former ruler's immunity will interfere with internationalcomity).96. 806 F.2d 344 (2d Cir. 1986), cert. denied, 107 S. Ct. 2178 (1987).

97. Republic of Philippines v. Marcos, 806 F.2d 344, 348-49 (2d Cir. 1986), cert. denied,107 S. Ct. 2178 (1987). A party requesting a preliminary injunction must demonstrate prob-able success on the merits and irreparable injury if the injunction is not granted. See LosAngeles Memorial Coliseum Comm'n v. National Football League, 634 F.2d 1197, 1201-02(9th Cir. 1980) (stating burden of proof for preliminary injunction).

98. Id. at 357.99. Id. at 359.100. Marcos 1, 806 F.2d at 359. The court recognized that this case was distinguishable

from its earlier decisions barring suit against a foreign sovereign. See Bernstein v. VanHyghen Freres, S.A., 163 F.2d 246 (2d Cir.), cert. denied, 332 U.S. 772 (1947); Banco de Es-pana v. Federal Reserve Bank, 114 F.2d 438 (2d Cir. 1940). Those cases relied on the princi-pal of sovereign immunity rather than the act of state doctrine. Marcos I, 806 F.2d at 359.Moreover, the Court in Sabbatino, based on the separation of powers rationale, establishedthat the balance of considerations may shift against a ruler of a former government becausethe political interest of the United States would be lessened. Id.101. Cf In re Grand Jury Proceedings John Doe No. 700, 817 F.2d 1108, 1111 (4th Cir.)(noting failure to honor government's waiver of former dictator's head of state immunitywould undermine international comity), cert. denied sub nom. Marcos v. United States, 108 S. Ct.212 (1987).

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REPUBLIC OF PHILIPPINES V. MARCOSforeign state's courts for actions engaged in while in power.10 2 In InreJohn Doe No. 700,103 a federal grand jury issued subpoenas com-manding the Marcoses to testify regarding possible corruption inAmerican arms contracts with the Philippines.10 4 In response to theMarcoses' plea for head of state immunity, the Philippine Govern-ment issued a statement attempting to waive the Marcoses' immu-nity.10 5 The court reasoned that failure to honor this waiver wouldoffend the Philippine Government, thereby undermining the doc-trine's purpose of promoting international comity.10 6 Accordingly,the Fourth Circuit gave full effect to the waiver of the doctrine as ademonstration of respect for Philippine sovereignty.'0 7

III. REPUBLIC OF PHILIPPINES V. MARCOS (MARCOS II)Marcos11 illustrates a more recent situation when the current Phil-

ippine Government sought to waive the act of state doctrine in or-der to prosecute its former ruler for his alleged crimes while inoffice. On February 7, 1986, the Philippine Government held a spe-cial presidential election. 108 The Philippine people rejected an offi-cial tabulation showing an overwhelming victory for FerdinandMarcos.' 0 9 Corazon Aquino, the leader of the party opposingMarcos, accused the incumbent government of fraud." 10 TheMarcos Government sent troops to attack those supporting Aquino,and Aquino's supporters successfully retaliated.' 1

Realizing that his regime was at an end, Marcos and his wifeImelda fled to the United States." 2 Almost immediately the UnitedStates Government recognized his successor, President Corazon

102. See Note, Resolving the Confusion of Head of State Immunity: The Divine Rights ofKings, 86COLUM. L. REv. 169, 182 (1986) (explaining doctrine of head of state immunity).103. 817 F.2d 1108 (9th Cir. 1987), cert. denied, 108 S. Ct. 212 (1987).

104. John Doe, 817 F.2d at 1109.105. Id. at 1110.106. Id. The Marcoses contended that the court, by honoring the Philippine Govern-

ment's waiver request, would establish an uncivilized system which would permit political ene-mies to expunge international legal protections from their adversaries, once they have beenremoved from office. Id. at 1111. The court conceded that the system may degrade ex-rulers,who happen to fall out of favor with their political successors. Id. The court, however, arguedthat it would be worse to allow ex-rulers to "mock the existing government by claiming immu-nity in the name of that government." Id.

107. Id.108. Republic of Philippines v. Marcos, 818 F.2d 1473, 1475 (9th Cir.), reh'ggranted,832

F.2d 1110 (9th Cir. 1987) (en banc).109. Id.110. Id.111. Id.112. Id. Since 1979, General Anastasio Somoza of Nicaragua, the Shah of Iran, and Presi-

dent Jean-Claude Duvalier of Haiti have also been forced to flee from their countries. See

19881 241


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242 THE AMERICAN UNIVERSITY LAW REVIEW [Vol. 38:225Aquino, as the legitimate leader of the Philippines.' 1 3 Assets alleg-edly belonging to the Marcoses were later discovered in the UnitedStates and around the world. 114

The Philippine Government brought suit in the United States Dis-trict Court for the Central District of California,"15 alleging that,while Marcos was in power, he converted approximately $1.5 billionin assets belonging to the Philippine Government by accepting pay-ments, kickbacks, and interests in business ventures in exchange forgovernmental favors. 116 The Philippine Government, noting thediscrepancy between the income Marcos reported in the last two de-cades, and his alleged worth of $1.5 billion, relied on a net worthanalysis 17 to assert that Marcos had to have acquired virtually all ofhis wealth through racketeering activities.118 Accordingly, the sov-ereign argued that it was unnecessary for it to trace each particularComment, MarcosMania: The Crusade to ReturnMarcos' Billions to the Philippines Through the Fed-eral Courts, 18 RUTGERS LJ. 17, 217 n.1 (1986) (listing deposed rulers).Because the United States does not have an extradition treaty with the Philippines, Marcosis protected from extradition for prosecution. Id. at 218 n.8.113. Id. (citing MarcosFlees and Is Taken to Guam; U.S. Recognizes Aquino as President, N.Y.Times, Feb. 26, 1986, at Al, col. 3 (noting United States recognized Aquino governmentsame day Marcos fled Philippines)).

114. Marcos II, 818 F.2d at 1474. The Philippine Government brought suits againstMarcos to recover assets in Switzerland, state and federal courts in California, and federalcourts in New York, NewJersey, and Texas. Id. at 1475. See also FilipinosFile $22.6 BillionSuitAgainst Marcoses, N.Y. Times, July 17, 1987, at Al, col. 3 (describing suit against Marcos torecover property in several countries).115. Marcos I, 818 F.2d at 1475. The district court opinion is unreported. The Repub-lic's complaint named Ferdinand and Imelda Marcos, Gregorio Araneta, Ramon Azurin,Antonio Floirendo, Diosado Ordonez, Anchor Holdings, N.V., Al Dejebal Corporation (col-lectively the "minor defendants"), an d Lloyd's Bank of California. Id. at 1476-77. The gov-ernment's complaint stated eleven claims for relief. Id. at 1477. These claims included eightpendent claims and three claims under the federal Racketeer Influenced and Corrupt Organi-zation Statute, 18 U.S.C. 1961-1968 (1982) (RICO). Marcos II, 818 F.2d at 1477. Thepleading alleged the following RICO violations. First, Mr. Marcos and the minor defendantsconducted a RICO enterprise, through a pattern of racketeering acts committed in the UnitedStates, in violation of 18 U.S.C. 1962(c) (1982). Brief of Plaintiff-Appellee at 7, Republic ofPhilippines v. Marcos, 818 F.2d 1473 (9th Cir.) (No. 86-6091), reh'g granted,832 F.2d 1110(9th Cir. 1987) (en banc) [hereinafter Brief of Plaintiff]. Second, they invested the illegalproceeds in various "enterprises" in California, in violation of 18 U.S.C. 1962(a) (1982).Brief of Plaintiff, supra, at 7. Third, they engaged in a single nationwide conspiracy to conductthe RICO enterprise and invest the funds in violation of 18 U.S.C. 1962(d) (1982). Brief ofPlaintiff, supra, at 7. The eight pendent claims were claims for conversion, fraud and deceit,constructive fraud, constructive trust, breach of implied contract (against Mr. Marcos only),quiet title, accounting, an d subrogation. Id. at 8.116. Marcos II, 818 F.2d at 1480-81.

117. Id. at 1480. The complaint charged that during Mr. Marcos's twenty year reign asPresident of the Philippines, he and Mrs. Marcos filed tax returns demonstrating their jointafter-tax income to be approximately $337,429. Brief of Plaintiff, supra note 115, at 6. Duringthese same years, however, they accumulated over $1.55 billion in assets. Id.; se e also Investiga-tion ofPhiL Inv. in the United States, Before the Subcomm. on Asian and Pacificffairs of the HouseComm. on ForeignAffairs, 99th Cong., 1st & 2d Sess. 479 (1985-86) [hereinafter House Investiga-tion] (terming Marcos Government as "kleptocracy" because it existed primarily to "systemati-cally loot and plunder the wealth of the nation") (statement of Rep. Solarz).118. Marcos H, 18 F.2d at 1480.


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19881 REPUBLIC OF PHILIPPINES V. MARCOS 243racketeering activity to the acquisition of specific property."19 ThePhilippine Government claimed, therefore, that it was entitled to aninjunction to freeze property around the world that Marcos alleg-edly bought with the Philippines' assets.' 20

Determining that the Republic of Philippines had a substantiallikelihood of prevailing on the merits, the district court issued a pre-liminary injunction to prevent Marcos from transferring the dis-puted property and irreparably harming the PhilippineGovernment.' 2' The court held that the Philippine Government'sallegations that Marcos had violated the Federal Racketeer Influ-enced and Corrupt Organizations Act ("RICO") provided federaljurisdiction, while the pendent causes of action entitled the Repub-lic to an injunction. 122 The district court, however, did not considerwhether the act of state doctrine barred adjudication of the legalityof Marcos' actions.1 23

119. Id.120. Id. at 1475.121. Id. at 1477. The district court first determined that it had federal jurisdiction underRICO. Id. Second, the majority determined that the sovereign had a substantial likelihood of

prevailing on the merits. Id. Third, the court granted an injunction based on the pendentclaims. Id.The court noted that Marcos had a propensity to move his assets, and if Marcos transferredthe property, the move would irreparably harm the Philippines. Id. at 1476-77. Less than two

weeks after Marcos fled from the Philippines, he transferred the Beverly Hills property to aCayman Islands corporation to prevent the Philippines from recovering the property. Com-plaint of Plaintiff-Appellee at 21 , Republic of Philippines v. Marcos, 818 F.2d 1473 (9th Cir.)(No. 86-6091), reh'ggranted,832 F.2d 1110 (9th Cir. 1987) (en banc). Moreover, both theUnited States District Court for the Southern District of New York and the Los Angeles Supe-rior Court granted a preliminary injunction because of evidence of Marcos' intent to concealassets. Brief of Plaintiff,supra note 115, at 58. The courts noted that Marcos could easily sellthe property and deliver the funds out of the country, beyond the Philippines' reach. Id. at58-59.

After the Ninth Circuit decided MarcosII, a federal grandjury in New York indicted Marcos,his wife Imelda, Saudi Arabian Financier Adnan Khashoggi, and seven others on charges thatthey used funds Marcos embezzled from the Philippines to secretly buy real estate in Manhat-tan. See Marcos, Wife Indicted on U.S. Racketeering Charges; Khashoggi, Calif.Bank also Cited, L.A.Times, Oct. 21 , 1988, at 1, col. 6 (noting that Marcos was indicted on October 21 , 1988). Theindictment alleges that Khashoggi and the other co-defendents assisted the Marcoses in con-cealing the former Philippine president's ownership of the property. Id. Specifically, the in-dictment accuses Marcos of attempting to illegally backdate documents to give the appearancethat he sold four New York office buildings worth approximately $300 million to Khashoggibefore Marcos left office, in order to evade a federal court order preventing Marcos fromtransferring his assets. See id. (stating that Marcos' buildings were worth $300 million); Mar-cus, Marcos Case IllustratesLonger Reach of U.S. Law; NationalBoundariesLess ofan Obstacle, Wash.Post, Oct. 26, 1988, at A4, col. 5 (describing indictment of Marcos).122. Marcos II, 818 F.2d at 1477.

123. If the court determined that the doctrine applied, it would be impossible for thePhilippine Government to demonstrate that Marcos violated Philippine law and, therefore,the Philippine Government would be unlikely to succeed on the merits. Id. at 1477, 1480-81.The Republic argued that Marcos should not have been allowed to plead act of state protec-tion at the appellate level because he did not raise the defense in the district court. Brief ofPlaintiff, supra note 115, at 74.


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244 THE AMERICAN UNIVERSITY LAW REVIEW [Vol. 38:225A. The Ninth Circuit'sOpinion

In a two-one decision, the United States Court of Appeals for theNinth Circuit reversed the district court.124 The court, after agree-ing that RICO provided subject matter jurisdiction, 125 held that theact of state doctrine barred the Philippine Government's request foradjudication of most of former President Marcos' alleged actions.1 26Accordingly, the plaintiff's net worth theory would fail, renderingthe Republic unlikely to prevail at trial, and the preliminary injunc-tion improper. 127

The court articulated two reasons in finding the act of state doc-trine applicable. First, the court stated that a ruler's traditionalgovernmental actions are sufficiently public to invoke the act of statedoctrine.128 Second, the court noted that, to avoid interfering withforeign relations, it must permit a former ruler to invoke the act ofstate doctrine against the current government. 1291. Traditionalgovernmental activities arepublic

The court, noting that the doctrine applied to only official acts,' 30first considered whether Marcos' illegal activities were sovereignacts of the Philippines.'

3' The court stated that Marcos' expropria-tions of property and creation of public monopolies were govern-mental acts and, therefore, official acts of the Philippines. 3 2Because Marcos used his presidential authority to accept bribes andkickbacks, such actions were also sovereign acts of the Philippines,even if illegal under Philippine law.' 3 3 Moreover, the court stated

124. Marcos I, 818 F.2d at 1489. Judge Kozinski wrote the majority opinion, while JudgeNelson dissented. Id. at 1490-1502.

125. The court noted that jurisdictional claims were broadly construed at the complaintstage. Id. at 1478 (citing Keniston v. Roberts, 717 F.2d 1295, 1298 (9th Cir. 1983)). It notedthat a plaintiff's claim must fulfill two criteria. Id. (citing Keniston, 717 F.2d at 1298). Theclaim must claim a right to recover under United States laws, and must not be "wholly insub-stantial and frivolous." Id. (citing Keniston, 717 F.2d at 1298).126. Id. at 1489.127. Id. at 1490. The Ninth Circuit requires a party requesting a preliminary injunction todemonstrate "probable success" on the merits and irreparable injury if the court does notgrant the injunction. See Los Angeles Memorial Coliseum Comm'n v. National FootballLeague, 634 F.2d 1197, 1201 (9th Cir. 1980) (stating test for injunctive relief).128. Marcos II, 818 F.2d at 1485-89.129. Id. at 1487.

130. Id. at 1485 (citing DeRoburt v. Gannett Co., 733 F.2d 70 1 (9th Cir. 1984), cert. denied,469 U.S. 1159 (1985)).131. Id. at 1481-85.132. Id. at 1481 (construing Republic of Philippines v. Marcos, 806 F.2d 344, 359 (2d Cir.1986), cert. denied, 107 S. Ct. 2178 (1987)). The majority ignored the Second Circuit's holdingthat Marcos did not sustain his burden of proof that his acts were public. See Republic ofPhilippines v. Marcos, 806 F.2d 344, 359 (2d Cir. 1986), cert. denied, 107 S. Ct. 2178 (1987).133. Marcos 11, 818 F.2d at 1481. The Ninth Circuit distinguished Marcos' actions fromthose he might have engaged in as a private citizen. Id. at 1485 (citing Alfred Dunhill of


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1988] REPUBLIC OF PHILIPPINES V. MARCOSthat it was irrelevant whether Philippine law authorized Marcos' actsbecause courts may not question the integrity of foreign govern-mental acts.' 3 4 Courts would weaken the act of state doctrine bypermitting parties to attack the motives of officials and question thevalidity of their official acts.1352. Adjudicationwill interfere withforeign relations

The second issue that the court addressed was whether a formerruler may invoke the act of state doctrine as a defense to claims thecountry he formerly ruled brought against him.1 36 Having foundthat Marcos' acts were public, the court concluded that Marcoscould invoke the act of state doctrine, because a United States judi-cial pronouncement of the legality of his actions could impairUnited States relations with the Philippines.1 37 The court concededthat there was less of a possibility that its pronouncements wouldimpair relations with a government who requested adjudication.138The majority noted, however, that just as the position of the execu-tive branch is not dispositive, i3 9 the pronouncement of a foreignsovereign with a stake in the litigation could not control.' 40 Embar-rassment of United States relations with a foreign sovereign is onlyone rationale underlying the act of state doctrine.' 4 ' It was alsoLondon, Inc. v. Republic of Cuba, 425 U.S. 682, 693-95 (1976); West v. MultibancoComermex, S.A., 807 F.2d 820, 828 (9th Cir. 1987); RESTATEMENT (SECOND) OF THE FOREIGNRELATIONS LAW OF THE UNITED STATES 469, n.3 (Tent. Draft No. 7 (1986)). The court notedthat if Marcos robbed the treasury at gunpoint, it would be a private act. Id. at 1484.

134. Id. at 1484-85. The court noted that the governmental acts of a country's chief exec-utive reflect complex political and policy choices. Id. at 1485. That there may have beenimproper motives underlying a particular action does not make the action less entitled torespect from other governments. Id. (construing Clayco Petrol. Corp. v. Occidental Petrol.Corp., 712 F.2d 404, 407 (9th Cir. 1983)).135. Id. at 1485. The court also noted that because the act of state doctrine prohibitsinquiry into the legality of governmental acts, a theory which would only hold an action to beofficial if it were legal, would undermine the act of state doctrine. Id. at 1483.136. Id. at 1485-89.

137. Id. at 1485.138. Id. at 1486. See also In re GrandJury Proceedings, John Doe No. 700, 817 F.2d 1108,1111 (4th Cir.) (noting failure to honor Philippine Government's waiver of Marcos' head ofstate immunity would undermine international comity), cert. denied sub noma.Marcos v. United

States, 108 S. Ct. 212 (1987); Republic of Philippines v. Marcos, 806 F.2d 344, 359 (2d Cir.1986) (holding former head of state had no act of state immunity against own government),cert. denied, 107 S. Ct. 2178 (1987); Banco Nacional de Cuba v. Sabbatino, 376 U.S. 398, 428(1964) (arguing current government's acquiescence to suit and former government's actionslessens need for act of state doctrine).

139. Marcos II, 818 F.2d at 1485 (citing First Nat'l City Bank v. Banco Nacional de Cuba,406 U.S. 759, 762 (1964)).140. Id. at 1486 (citing Banco de Espana v. Federal Reserve Bank, 114 F.2d 438, 444 (2dCir. 1972) (defining "governmental act" as step taken by person capable of exercising sover-eign authority)).

141. Id. (citing Banco Nacional de Cuba v. Sabbatino, 376 U.S. 398, 427-37 (1964)).


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246 THE AMERICAN UNIVERSITY LAW REVIEW [Vol. 38:225conceivable that Marcos would regain power in the Philippines. 142In that situation, the court's willingness to consider whether Marcoshad committed illegal acts would adversely affect relations with thePhilippines. 143 Alternatively, if the court exonerated Marcos, fric-tion would result between the United States and the current Philip-pine Government. 44Accordingly, the court would not adjudicate such controversialmatters, absent express encouragement from the executivebranch.'45 The Ninth Circuit also stated that the Second Circuit'sassertion in MarcosI that the executive branch had approved of sucha determination was simply too nebulous to permit sweeping infer-ences about the executive branch's position.' 46 Moreover, the courtfound the Second Circuit case materially different from the instantcase.147

142. Id. at 1485. The court noted that only four years ago, Mr. Marcos was in power andMrs. Aquino was in exile in the United States. Id. See, e.g., Woman of the Year, Time, Jan. 5,1987 at 18-33 (declaring Corazon Aquino "Woman of the Year" for leading "fairy-talerevolution"); Wall St. J., Dec. 29, 1986, at 1, col. 3 (noting Marcos loyalist staged protest toreject Aquino); U.S. FoilsMarcos in Plan o Return For Coup Attempt, N.Y. Times,Jan. 30, 1987, atAl, ol. I noting Philippine army attempted coup).143. Marcos II, 818 F.2d at 1485.

144. Id. at 1487-88. The question.of whether Marcos properly invoked martial law, orwhether he exercised it properly is of considerable importance to the Philippine Governmentand its people. Id. at 1488. The issue of Marcos' invocation of presidential immunity underthe Philippine Constitution is also pertinent. Id. Article VII, Section 17 of the PhilippineConstitution provides: "The President shall be immune from suit during his tenure. Thereaf-ter, no suit whatsoever shall lie for official acts done by him or by others pursuant to hisspecific orders during his tenure." REPuBLIc OF PHILIPPINES CONsT. art. VII, 17.The court stated that if it decided the latter question, it would be as if the Supreme Court ofthe Philippines decided Nixon v. Fitzgerald. Marcos I, 818 F.2d at 1488 (citing Nixon v. Fitzger-ald, 457 U.S. 731 (1982) (defining immunity of American presidents)). Such a determination"if wrongly made" would likely offend the Philippine Government. Id. at 1487 (citing Repub-lic of Philippines v. Marcos, 806 F.2d 344, 354 (2d Cir. 1986), cert. denied, 107 S.Ct. 2178(1987)).In Nixon v. Fitzgerald, the Supreme Court determined the potential scope of civil damagesimmunity afforded a former United States president for his actions while in office. Nixon v.Fitzgerald, 457 U.S. 731, 755-58 (1982). The facts of Nixon revolve around President Nixon'sfailure to reinstate a civilian Air Force management analyst who testified before a congres-sional subcommittee that a transport airplane was overbudgeted. Id. at 733-39. The manage-ment analyst sought civil damages against Nixon, claiming that Nixon's refusal to reinstatehim was in retaliation for his testimony. See Ricigliano, Remedies - Immunity - PresidentAbso-lutely Immune from Civil Damages Liability For Official Acts - Nixon v. Fitzgerald,102 S. t. 2690(1982); Presidential ides Entitled o Qualified mmunityfrom CivilDamages Liability or OfficialActs -Harlow v. Fitzgerald, 102 S. t. 2727 (1982), 13 SxroN HALL 374, 374-75 (1983).The court in Marcos II failed to acknowledge that the Philippine Government requestedadjudication in Marcos II, whereas the United States did not request that the Philippine courtsadjudicate Nixon. Moreover, the United States has an interest in Marcos1I because Marcos hasbeen granted United States immunity, and he may have violated RICO.145. Marcos II, 818 F.2d at 1486.146. Id. at 1487. The court noted that the statement the Second Circuit relied upon wasaddressed to an unrelated case before the Court of International Trade. Id. Moreover, theNinth Circuit decided that the statement was ambiguous. Id.147. Id. at 1488 (citing Republic of Philippines v. Marcos, 806 F.2d 344, 354 (2d Cir.1986)). The court argued that the Second Circuit asserted jurisdiction over the Philippines'


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REPUBLIC OF PHILIPPINES V. MARCOS3. The dissent

In her dissent, Judge Nelson disputed the court's holding that theact of state doctrine barred the Philippines' suit against Marcos. Sheurged that the act of state doctrine should not protect Marcos' actsbecause those acts were private and unofficial, rather than sovereignacts of the government.1 48 Moreover, Marcos' self-serving activitiesshould not be characterized as public simply because they were tiedto his governmental actions.' 49

Judge Nelson was most concerned with the majority's assertionthat invocation of the act of state doctrine was necessary to preventthe litigation from interfering with the United States executivebranch.' 50 She noted that the doctrine reflects respect for the sov-ereignty of foreign states, and consequently the justification for itsapplication is weak in this case because the Philippine Governmenthad requested adjudication.' 5 ' In addition, the executive branchhad clearly approved of such a determination.1 52 Moreover, shenoted that the majority's holding interfered with international com-ity and separation of powers because it contravened the wishes ofboth the Philippine Government and the executive branch. 55

III. A CRrrIQUE OF MARCOS IIThe Ninth Circuit's application of the act of state doctrine inMarcos II is inconsistent with precedent and defies the basic policiesunderlying the doctrine.' 5 4 First, the court erroneously concludedthat Marcos' illegal governmental activities were public and there-fore beyond United States adjudication.' 55 Second, assuming, argu-endo that Marcos' illegal actions were public, the act of state doctrinewould still not protect them because his actions were not fully exe-claim to freeze Marcos' property subject to future process in the Philippines. Id. at 1487-88.The Philippine courts would decide whether Marcos' conduct constituted theft under Philip-pine law. Id. (citing Marcos I, 806 F.2d at 361). Moreover, the court stated that the claimscovered only specific assets in New York. Id.

InMarcos I, the Philippine Government did not ask the district court to determine the legal-ity of Marcos' actions. Id. at 1488 (citing Marcos I, 806 F.2d at 361). The Philippine courtswere to adjudicate those matters. Id.

148. Id. at 1492-94 (Nelson, J., dissenting). Judge Nelson agreed with the majority thatthe district court had jurisdiction under RICO. Id.149. Id. (Nelson, J., dissenting).150. Id. at 1495 (Nelson, J., dissenting).151. Id. at 1495-96 (Nelson, J., dissenting).152. Id. (Nelson, J., dissenting).153. Id. (Nelson, J., dissenting).154. See infra notes 155-202 and accompanying text (critiquing circuit court's decision).155. See infra notes 158-77 and accompanying text (explaining distinction between offi-

cial's public and private acts).

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THE AMERICAN UNIVERSITY LAW REVIEW [Vol. 38:225cuted within the Philippines.1 56 Third, the court's decision not toadjudicate Marcos' actions, contrary to the express wishes of the ex-ecutive branches of both the United States and the Philippines, willultimately only cause friction between the two countries, thereby vi-olating the purpose of the doctrine.15 7

A. Illegal GovernmentalActivities are PrivateActionsThe Ninth Circuit holding that a ruler's actions are sovereign ac-

tivities when accomplished through governmental acts erroneouslyconcluded that the act of state doctrine barred consideration of thelegality of Marcos' actions.158 An analysis of the court's holding ex-poses two weaknesses. First, the court's approach blurs the distinc-tion between the official and unofficial character of Marcos' acts.' 59Second, the majority ignored the well established principle that theburden of proving that an act is official rests with the party seekingthe protection of the act of state doctrine. 160

The dissent correctly noted that the majority has placed actions offoreign dictators above judicial review. 161 A dictator is only a repre-sentative of his nation, and not the sovereign itself.'6 2 United Statescourts have long recognized the distinction between a foreign offi-cial's public and private acts.' 6 3 The act of state doctrine only156. See infra notes 178-86 and accompanying text (stating that act of state doctrine onlyprotects sovereign official's actions that were fully executed within sovereign's territory).157. See infra notes 187-202 and accompanying text (arguing that court should defer to

executive pronouncements on matters of foreign affairs).158. See Republic of Philippines v. Marcos, 818 F.2d 1473, 1481 (9th Cir.) (Nelson, J.,dissenting), reh'ggranted, 832 F.2d 1110 (9th Cir. 1987) (en banc).159. Id. at 1493 (Nelson, J., dissenting). Courts have long recognized the distinction be-tween a ruler's public and private acts. See infranotes 162-73 and accompanying text (discuss-ing and citing cases that clarify this distinction).The Philippine Constitution distinguishes between a president's official and unofficial ac-tions. REPUBLIC OF PHILIPPINES CONsT. art. VII, 17. The Constitution provides the Presi-dent with complete immunity from suit during his presidential term. Id. It does not allow himimmunity for private actions once he leaves office. Id.160. Marcos I1, 818 F.2d at 1495. See, e.g., Republic of Philippines v. Marcos, 806 F.2d344, 359 (2d Cir. 1986), cert. denied, 107 S. Ct. 2178 (1987) (stating deposed ruler failed tomeet burden of proving that his acts were official); Alfred Dunhill of London, Inc. v. Republicof Cuba, 425 U.S. 682, 695 (1976) (noting burden of proof on party asserting act of statedefense); Sharon v. Time, Inc., 599 F. Supp. 538, 544 (S.D.N.Y. 1984)(holding appellantbears strict burden of proving his acts were official).161. Marcos II, 818 F.2d at 1492-94 (Nelson, J., dissenting).

162. Jimenez v. Aristequieta, 311 F.2d 547, 557-58 (5th Cir. 1962) (stating that dictator isonly chief executive of nation, not sovereign itself), cert. denied, 373 U.S. 914 (1963).163. See, e.g., Marcos I, 806 F.2d at 359 (holding doctrine inapplicable because Marcosfailed to prove that his actions were public);Jimenez, 311 F.2d at 557-58 (noting that dictator'sillegal actions were private actions outside protection of act of state doctrine); Sharon v.Time, Inc. 599 F. Supp. 538, 546 (S.D.N.Y. 1984) (noting that government official seeking ac tof

marcos.act of state doctrine

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