McKesson HBOC, Inc. v. Islam Repub Iran

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued October 1, 2001 Decided November 16, 2001

No. 00-7157

McKesson HBOC, Inc., et al.,

Appellees/Cross-Appellants

v.

Islamic Republic of Iran,

Appellant/Cross-Appellee

Consolidated with

00-7263

Appeals from the United States District Court

for the District of Columbia

(No. 82cv00220)

Thomas G. Corcoran, Jr. argued the cause for appel-

lant/cross-appellee. With him on the briefs was Mary-Ellen

Noone.

Mark N. Bravin argued the cause for appellees/cross-

appellants. With him on the briefs were Ralph N. Albright,

Jr., Peter Buscemi and Mark R. Joelson.

Before Edwards, Rogers and Tatel, Circuit Judges.

Opinion for the Court filed by Circuit Judge Tatel.

Tatel, Circuit Judge: McKesson HBOC, Inc., an American

corporation, owns a minority interest in an Iranian dairy.

Following Iran's 1979 Islamic Revolution, the dairy cut off the

flow of capital and other material to McKesson, froze out

McKesson's board members, and stopped paying McKesson's

dividends. After years of litigation, including two appeals to

this court, the district court granted summary judgment for

McKesson, holding the Islamic Republic of Iran liable for

expropriating McKesson's equity in the dairy. Following a

bench trial on the value of McKesson's holdings, the district

court ordered Iran to pay over $20 million in compensation

for, among other things, expropriated equity and withheld

dividends. In this appeal, Iran argues that federal courts

lack jurisdiction over it, that material issues exist as to its

liability for expropriation, and that the district court erred in

valuing McKesson's assets. McKesson cross-appeals, chal-

lenging the district court's assessment of simple rather than

compound interest. We affirm in most respects. Jurisdiction

exists pursuant to the Foreign Sovereign Immunities Act's

exception for commercial acts of a foreign sovereign that

cause direct effects in the United States. The district court's

careful consideration of the valuation evidence easily survives

clear-error review. And although the district court may have

erred in finding that international law precludes awards of

compound interest, it acted well within its broad discretion to

grant simple interest. But because we find that genuine

issues of material fact exist as to whether Iranian corporate

law excused the dairy's withholding of dividends, we reverse

the district court's grant of summary judgment on the issue

of Iran's liability for expropriating McKesson's equity and

remand that portion of the case for trial.

I.

For many years prior to Iran's 1979 Islamic Revolution,

McKesson HBOC, Inc., appellee and cross-appellant, contrib-

uted capital and personnel to Sherkat Sahami Labaniat Pas-

teurize Pak, an Iranian dairy ("Pak Dairy"). McKesson's

representatives made up a majority of Pak Dairy's board of

directors.

Following the Revolution, McKesson's ties with Pak Dairy

began to weaken. It no longer received its standard yearly

dividends, and soon lost control of the dairy's board, with-

drawing its last two directors in October, 1981. Since then,

McKesson has neither participated in Pak Dairy's business

nor received shareholder communications or compensation for

its investment, even though it still owns a thirty-one percent

interest in the dairy.

In 1982, McKesson, along with its insurer, the Overseas

Private Investment Corporation (OPIC), filed suit in the

United States District Court for the District of Columbia

alleging that the Islamic Republic of Iran, appellant and

cross-appellee, illegally expropriated McKesson's interest in

Pak Dairy. Pursuant to Executive Order No. 12,294, 46 Fed.

Reg. 14,111 (Feb. 24, 1981), McKesson's claim was trans-

ferred to the newly created Iran-United States Claims Tribu-

nal which, by virtue of the Algiers Accords (which settled the

Iran hostage crisis), had exclusive jurisdiction over suits

involving American claims to frozen Iranian assets. See

generally Declaration of the Government of the Democratic

and Popular Republic of Algeria, Jan. 19, 1981, Iran-U.S., 20

I.L.M. 224. Although the Claims Tribunal decided that Iran's

interference with McKesson's rights had not amounted to an

expropriation by January 19, 1981, the Tribunal's jurisdiction-

al cut-off date, it did find that Pak Dairy had illegally

withheld McKesson's 1979 and 1980 dividends. Foremost

Tehran, Inc. v. Iran, 10 Iran-U.S. Cl. Trib. Rep. 228, 250

(1986). The Tribunal awarded McKesson in excess of

$900,000 as compensation for withheld dividends, plus approx-

imately $500,000 for related breach-of-contract claims. Id. at

252-53, 254-55, 257-58.

Renewing its claim in district court, McKesson argued that

Iran had expropriated its equity in Pak Dairy after the

Tribunal's jurisdictional cut-off date. Iran moved to dismiss,

arguing primarily that the Foreign Sovereign Immunities Act

of 1976 (FSIA), 28 U.S.C. ss 1602-1611, rendered it immune

from suit in federal court. The district court denied this

motion, and we affirmed in part and remanded in part. See

Foremost-McKesson, Inc. v. Islamic Republic of Iran, 905

F.2d 438, 449-51 (D.C. Cir. 1990) ("McKesson I"). In doing

so, we held that McKesson had provided adequate evidence of

federal jurisdiction pursuant to the FSIA exception for suits

based on "commercial activity ... that ... causes a direct

effect in the United States." 28 U.S.C. s 1605(a)(1); see

McKesson I, 905 F.2d at 449-50. Subsequently, Iran again

challenged federal jurisdiction, arguing among other things

that an intervening Supreme Court decision, Republic of

Argentina v. Weltover, Inc., 504 U.S. 607 (1992), undermined

McKesson I. McKesson Corp. v. Islamic Republic of Iran,

52 F.3d 346, 349 (D.C. Cir. 1995) ("McKesson II"). Distin-

guishing Weltover and deferring to McKesson I, we affirmed

the district court's denial of Iran's renewed motion to dismiss.

Id. at 350-51.

With the jurisdictional issue seemingly--though as we shall

soon see, not finally--resolved, both parties moved for sum-

mary judgment on liability. Granting summary judgment for

McKesson, McKesson Corp. v. Islamic Republic of Iran, No.

82-220, mem. op. at 31 (D.D.C. June 23, 1997), the district

court scheduled a bench trial to determine damages. Just

before trial, Iran once again moved to dismiss for lack of

jurisdiction, arguing that the International Guaranty Agree-

ment (IGA), which governs the resolution of claims against

Iran to which the United States government and its instru-

mentalities are subrogated, requires arbitration rather than

litigation. The district court denied the motion, heard several

weeks of testimony on valuation, and then issued findings

valuing McKesson's assets--including equity in Pak Dairy,

dividends, and simple interest--at just over $20 million.

McKesson Corp. v. Islamic Republic of Iran, No. 82-220,

mem. op. at 53 (D.D.C. May 26, 2000). The district court

denied McKesson's subsequent motion for reconsideration of

the court's assessment of simple rather than compound inter-

est. McKesson Corp. v. Islamic Republic of Iran, No.

82-220, mem. op. at 13 (D.D.C. Sept. 28, 2000).

Iran now appeals the grant of summary judgment on

liability as well as the district court's valuation of McKesson's

holdings in Pak Dairy. Iran also appeals the district court's

rejection of its FSIA and IGA jurisdictional arguments.

McKesson cross-appeals the denial of its motion for reconsid-

eration of the decision to award only simple interest.

II.

We begin with Iran's jurisdictional arguments. A foreign

nation's entitlement to sovereign immunity raises questions of

law reviewable de novo. Princz v. Fed. Republic of Germa-

ny, 26 F.3d 1166, 1169 (D.C. Cir. 1994).

The FSIA immunizes foreign sovereigns, as well as their

agents and instrumentalities, from federal court jurisdiction,

see 28 U.S.C. ss 1603(a), 1605, unless the case falls within one

of several exceptions specified in the act, see id. s 1605; see

also Argentine Republic v. Amerada Hess Shipping Corp.,

488 U.S. 428, 443 (1989) ("[T]he FSIA provides the sole basis

for obtaining jurisdiction over a foreign state in the courts of

this country...."). McKesson argues, and the district court

held, that jurisdiction over Iran exists pursuant to the FSIA's

exception for "any case ... in which the action is based upon

a commercial activity ... of the foreign state ... that ...

causes a direct effect in the United States." 28 U.S.C.

s 1605(a)-(b).

This court has twice considered whether the commercial-

activity exception applies to McKesson's claim, holding both

times that the alleged effects of Iran's expropriation--includ-

ing the cut-off of the "constant flow of capital, management

personnel, engineering data, machinery, equipment, materials

and packaging" between the two companies, McKesson I, 905

F.2d at 451, as well as the abrupt end of "McKesson's role as

an active investor," McKesson II, 52 F.3d at 350--were

sufficiently direct to create federal jurisdiction. It is true, as

Iran stresses, that our two earlier decisions found McKes-

son's jurisdictional showing sufficient only to survive a motion

to dismiss, id. at 351, whereas this time we review a district

court order granting summary judgment. Though we do not

here assume the validity of McKesson's factual assertions, see

United States v. Gaubert, 499 U.S. 315, 327 (1991), this

distinction makes no difference, for Iran does not dispute the

particular facts on which our two earlier decisions relied.

Indeed, the district court, reviewing the record without obli-

gation to assume the veracity of either party's assertions,

cited the same facts that McKesson I and McKesson II found

sufficient for "direct effects" jurisdiction. See McKesson

Corp. v. Islamic Republic of Iran, No. 82-220, mem. op. at 10

n.10 (D.D.C. June 23, 1997). Because we are presented with

jurisdictional facts identical to the ones relied on by our two

earlier decisions, and because Iran does not challenge the

veracity of those facts (it challenges only their sufficiency),

the "law of the case" doctrine requires us to follow those two

decisions. McKesson II, 52 F.3d at 350 ("[L]aw-of-the-case

doctrine holds that decisions rendered on the first appeal

should not be revisited on later trips to the appellate court.")

(quoting Crocker v. Piedmont Aviation, Inc., 49 F.3d 735

(D.C. Cir. 1995)) (internal quotation marks omitted). As we

said in McKesson I, "the alleged effects of freezing-out Amer-

ican corporations in their ownership of Pak Dairy are at least

as substantial and direct as effects alleged in prior cases in

which this court and other circuits have found 'direct ef-

fects.' " McKesson I, 905 F.2d at 451.

Iran argues that even if some elements of its expropriation

had direct effects in the United States, federal courts may not

exercise jurisdiction over one particular aspect of that claim:

Pak Dairy's withholding of McKesson's dividends. In sup-

port of this proposition, Iran argues first that in Kingdom of

Saudi Arabia v. Nelson, 507 U.S. 349 (1993), the Supreme

Court established an exclusionary principle under which no

fact that could not have independently served as grounds for

jurisdiction may serve as a basis for a foreign state's liability,

and second, that the "direct effects" exception to claims based

on commercial transactions does not apply where, as here, the

place of payment lies outside the United States. In our

view, neither argument has merit. Nelson held only that

commercial-activity jurisdiction cannot exist absent some nex-

us between the elements of the cause of action and the

commercial activity that forms the basis for jurisdiction. 507

U.S. at 357-58. Here, McKesson's extensive showing of

direct effects flowing from the commercial activity on which

its cause of action rests establishes the nexus found lacking in

Nelson. Regardless of whether denial of dividends alone

would give rise to federal court jurisdiction under the FSIA's

commercial-activity exception, because the net effect of Pak

Dairy's cut-off of commercial ties included not just nonpay-

ment, but also the cessation of "the flow of capital, manage-

ment personnel, engineering data, machinery, equipment, ma-

terials and packaging," McKesson I, 905 F.2d at 451, the

district court rightly considered the dividends issue both in

determining that Iran had expropriated McKesson's equity

interest and in awarding damages for that expropriation.

Iran's alternative jurisdictional argument rests on the In-

ternational Guaranty Agreement's arbitration clause: "[A]ny

claim against the Government of Iran to which the Govern-

ment of the United States may be subrogated as a result of

any payment under such guaranty shall be the subject of

direct negotiation between the two Governments." Agree-

ment on Guaranty of Private Investments, Sept. 17, 1957,

U.S.-Iran, 8 U.S.T. 1599, 1600-01. According to Iran, this

clause applies to OPIC's claims because OPIC insured

McKesson's interest in Pak Dairy, thus precluding federal

court jurisdiction. Acknowledging that OPIC is a govern-

ment instrumentality within the meaning of the IGA, McKes-

son argues that Iran has waived its IGA argument. As

McKesson points out, Iran has actively litigated this case for

nine years, never once mentioning the arbitration clause nor

attempting to begin IGA arbitration proceedings. Iran re-

sponds that subject-matter jurisdiction cannot be waived.

We need not determine whether Iran waived this defense,

however, for in our view, although the IGA might well bar

OPIC from proceeding, it has no effect on the district court's

jurisdiction over McKesson's claims. Even though OPIC has

compensated McKesson for part of its loss, McKesson still

owns title to its equity in Pak Dairy and to its unpaid

dividends, and it is well-settled that where an insured party

holds title to confiscated property, the title holder is the

appropriate party to bring a claim for compensation. See

Mobile & Montgomery Ry. Co. v. Jurey, 111 U.S. 584, 593

(1883); Foremost Tehran, 10 Iran-U.S. Cl. Trib. Rep. at 239

("[T]he governing law of the settlement agreements, that of

the District of Columbia, ... like other common law systems,

provides that an insured party who assigns a limited interest

to its insurer is the proper party to bring a claim for

compensation for the entire loss."); Restatement (Second) of

Trusts s 280 (1959). The settlement agreement between

McKesson and OPIC states that McKesson will "maintain the

legal title in and to all of the aforesaid items for the benefit of

and in trust for OPIC." Foremost Tehran, 10 Iran-U.S. Cl.

Trib. Rep. at 238-39 (quoting August, 1981 settlement agree-

ment between OPIC and McKesson). Relying on this lan-

guage, the Claims Tribunal held that McKesson "is legally

entitled to pursue a claim for recovery of the insured portion

of its losses as well as the uninsured portion.... [R]ecovery

by [McKesson] of a measure of compensation from its insur-

ers cannot affect its title to the claim against [Iran]." Id. at

239. The IGA thus presents no bar to federal court jurisdic-

tion in this case.

III.

This brings us to Iran's contention that the district court

prematurely granted summary judgment on liability in

McKesson's favor. A court may grant summary judgment

only when it finds "no genuine issue as to any material fact

and ... the moving party is entitled to judgment as a matter

of law." Fed. R. Civ. P. 56(c). To defeat a motion for

summary judgment, the opposing party (for purposes of this

issue, Iran) must demonstrate the existence of disputed issues

by reference to affidavits or other materials that "set forth

specific facts showing that there is a genuine issue for trial."

Fed. R. Civ. P. 56(e). The court must resolve any doubts and

make all reasonable inferences in favor of the opposing party.

Abraham v. Graphic Arts Int'l Union, 660 F.2d 811, 814-15

(D.C. Cir. 1981). We review grants of summary judgment de

novo. Summers v. Dep't of Justice, 140 F.3d 1077, 1078 (D.C.

Cir. 1998).

Iran first challenges the district court's conclusion that an

agreement between Iran and the United States, the 1955

Treaty of Amity, gave McKesson a right to recover its

expropriated property. Although treaties are the "supreme

Law of the Land," U.S. Const. art. VI, cl. 2, they provide no

basis for private lawsuits unless implemented by appropriate

legislation or intended to be self-executing, see Tel-Oren v.

Libyan Arab Republic, 726 F.2d 774, 808 (D.C. Cir. 1984)

(Bork, J., concurring), cert. denied, 429 U.S. 835 (1976). If a

treaty contains language clearly indicating its status as self-

executing, courts regard that language as conclusive. See

Cardenas v. Smith, 733 F.2d 909, 918 (D.C. Cir. 1984); see

also Tel-Oren, 726 F.2d at 809 (Bork, J., concurring) (noting

that treaties that "speak in terms of individual rights" may be

regarded as self-executing). The Treaty of Amity contains

just such language: It explicitly creates property rights for

foreign nationals, see Treaty of Amity, Economic Relations,

and Consular Rights, Aug. 15, 1955, U.S.-Iran, art. IV, cl. 2, 8

U.S.T. 899, 903 ("[P]roperty [of foreign nationals] shall not be

taken except for a public purpose, nor shall it be taken

without just compensation."), and contemplates judicial en-

forcement of those rights, see id. art. IV, cl. 1 ("Each High

Contracting Party ... shall assure that [the] lawful contrac-

tual rights [of foreign nationals] are afforded effective means

of enforcement....").

Iran does not dispute that the Treaty of Amity creates

enforceable rights, but instead contends that its clause stating

that "[p]roperty of nationals and companies of either High

Contracting Party, including interests in property, shall re-

ceive the most constant protection and security within the

territories of the other High Contracting Party ... ," Treaty

of Amity art. VI, cl. 2, only "confers a right of action on an

Iranian citizen in a U.S. court," Appellant's Opening Br. at 30.

As the district court convincingly observed, however, al-

though this language suggests that one party will receive

protections within the territory of the other party, it doesn't

say that those protections can only be enforced in the territo-

ry of the other party. McKesson Corp. v. Islamic Republic

of Iran, No. 82-220, mem. op. at 27-26 (D.D.C. June 23,

1997). Such a limited interpretation, moreover, flatly con-

flicts with the treaty's purpose--protecting property of U.S.

nationals--particularly because Iran's post-revolutionary

courts cannot provide adequate remedies for U.S. claims.

See Rockwell Int'l Systems, Inc. v. Citibank, N.A., 719 F.2d

583, 587-88 (2d Cir. 1983) (noting that federal courts have

"consistently rejected" the proposition that the post-

revolutionary Iranian court system can afford adequate reme-

dies to U.S. claimants).

Iran next argues that summary judgment was inappropri-

ate because it raised genuine issues of material fact as to

whether Pak Dairy's refusal to pay McKesson's dividends was

justified by McKesson's failure to comply with Iranian corpo-

rate law--specifically, the requirement that shareholders

must "come to the company" to collect their dividends.

Though skeptical of this requirement, the district court grant-

ed summary judgment because, even if the requirement

existed, McKesson's compliance with it would have been

futile. This is a tricky issue, but reviewing the record

ourselves, we think Iran has raised genuine issues of material

fact sufficient to survive summary judgment on liability.

We begin with Iran's contention that its corporate law

requires shareholders to "come to the company"--that is, to

physically appear at a company's office--in order to collect

dividends. McKesson argues that this requirement merely

reflects non-binding custom and therefore that it could not

excuse Pak Dairy's non-payment of dividends. This issue,

like all determinations of foreign law, may be resolved at

summary judgment. See Fed. R. Civ. P. 44.1; 9 Charles

Wright & Arthur R. Miller, Federal Practice and Proce-

dure s 2446, at 656-58 (2d ed. 1995).

Iran's numerous affidavits suggest that in Iran, "it is

assumed that there is a legal requirement of physically

appearing at the company with a receipt. In a proceeding in

an Iranian court, the proponent of the argument that an

Iranian company was required to pay dividends in any other

way would be put to a very heavy burden of proof and every

inference would be taken against him." Fakhari Aff. IV p 9.

Iran's affidavits also show that where a "come to the compa-

ny" requirement prevails, a corporation may not be held

liable for nonpayment unless and until it denies a sharehold-

er's valid, in-person request for dividends. See Fakhari Aff. I

p 13; Fakhari Aff. II p 3. The affidavits, however, fall short

of proving that this general practice reflects a legal require-

ment applicable to all Iranian corporations. Indeed, Iran's

experts unanimously state that whatever the prevailing cus-

tom and practice, Iranian law, reflected in Article 57 of Iran's

Commercial Code, permits corporate boards to select any

method of disbursing dividends. See Dadyar Aff. I p 7;

Fakhari Aff. I p 14.

Thus, while we agree with the district court that no general

principle of Iranian corporate law excuses Pak Dairy's with-

holding of McKesson's dividends due to its failure to come to

the company, the record contains testimony that Iranian law

permitted Pak Dairy's board of directors to adopt such a

binding requirement. To survive summary judgment, then,

Iran need only make a credible showing that Pak Dairy

exercised its discretion to implement a "come to the compa-

ny" requirement. We think it has made such a showing.

Pak Dairy's chief accountant states in his affidavit that "divi-

dends are paid to shareholders by means of a cheque, and the

shareholders must come to Pak Dairy to receive the cheque.

The cheque is delivered to the shareholder against his receipt

in the Company's documents, especially prepared for this

purpose after his identity and ownership is established by the

Company's officials." Dadyar Aff. I p 7. The chief accoun-

tant further characterized this policy as "the mode of pay-

ment chosen by Pak Dairy ... [s]ince long ago, in particular

in 1981 and 1982 and up to the present." Dadyar Aff. II p 2.

Calling these affidavits "self-serving, vague, and uncorrob-

orated," McKesson argues that they are insufficient to estab-

lish a genuine issue of material fact. Appellee's Opening Br.

at 26. It is true that the chief accountant's affidavits refer to

no documents supporting his assertions, and that we have

held under some circumstances--for example, in Doe v.

Gates, 981 F.2d 1316 (D.C. Cir. 1993)--that a party relying on

unsupported affidavits cannot survive summary judgment.

The inadequate affidavit in Gates--submitted by the plaintiff

in a discrimination case--had two critical defects not present

here: The plaintiff-affiant had no direct knowledge of compa-

ny policy, and the defendant had made an extensive showing

that no discriminatory policy existed. Id. at 1322-23; see

also id. at 1323 (granting summary judgment in part because

plaintiff failed to "provide[ ] some direct evidence of someone

having knowledge of th[e discriminatory] policy asserting it to

exist"). Here, Pak Dairy's chief accountant provided first-

hand testimony of his company's policy--specifically, that it

had a "come to the company" requirement--and McKesson

has submitted no evidence to the contrary. Under these

circumstances, we think Iran's affidavits sufficient to preclude

summary judgment, particularly in view of the generous

reading we owe the opposing party's evidence at this stage.

McKesson argues that even if Pak Dairy had a "come to

the company" requirement, summary judgment was still justi-

fied because compliance with such a requirement would have

been futile. The district court agreed, relying on a 1980 telex

to McKesson in which Pak Dairy announced that it would not

pay "any sums of money for any reason to foreign share

holders." Telex from Pak Dairy to Foremost-McKesson

(May 27, 1980). Although the district court acknowledged (in

a footnote) that Pak Dairy had sent a subsequent telex in

November, 1981 expressing "its readiness for taking proper

measures ... [a]s regards the payment of [McKesson's]

dividend," Telex from Pak Dairy to Foremost-McKesson

(Nov. 11, 1981), the court dismissed the latter communication

as merely an invitation to negotiate, which it regarded as

"inconsequential" because "McKesson was under no legal

obligation to settle for less than the amount to which it was

entitled as a shareholder." McKesson Corp. v. Islamic Re-

public of Iran, No. 82-220, mem. op. at 22 (June 23, 1997).

However plausible the district court's careful reading of the

competing evidence, the role of the court at summary judg-

ment is not to resolve the issue, but to determine whether the

available evidence creates a genuine issue of fact for trial.

Abraham, 660 F.2d at 814. Moreover, the district court

plausibly inferred that in light of ongoing negotiations pursu-

ant to the Algiers Accords, Pak Dairy's second telex repre-

sented a settlement overture, not an offer to give McKesson

its dividends. However, because the opposite inference was

no less plausible, the district court should have resolved the

two competing, reasonable inferences in favor of Iran, the

party opposing summary judgment. See Anderson v. Liberty

Lobby, Inc., 477 U.S. 242, 255 (1986). Implying nothing about

the relative strength of the two telexes, we think the issue

sufficiently close to require a trial on McKesson's futility

claim, as well as Iran's "come to the company" defense.

IV.

Next, Iran challenges the district court's valuation of

McKesson's assets. Although in view of our remand, we need

not address this issue, we will consider it because it is fully

briefed and because resolving it now will avert a second

appeal should McKesson prevail. See Jackson v. District of

Columbia, 254 F.3d 262, 271 (D.C. Cir. 2001) (commenting on

the merits of an otherwise moot issue because of the possibili-

ty that it might "arise again in a new trial"); Martini v. Fed.

Nat'l Mortgage Ass'n, 178 F.3d 1336, 1348 (D.C. Cir. 1999)

(same).

A generous standard governs our review. The trial court's

"[f]indings of fact shall not be set aside unless clearly errone-

ous, and due regard shall be given to the opportunity of the

trial court to judge of the credibility of the witness." Fed. R.

Civ. P. 52(a). "If the district court's account of the evidence is

plausible in light of the record, the court of appeals may not

reverse it." Anderson v. City of Bessemer, 470 U.S. 564, 573-

74 (1985).

The district court's careful consideration of the evidence

and testimony on valuation easily survives this highly defer-

ential standard. Not only do the district court's valuation

findings fall well within the realm of plausibility, but in

reaching them the court relied heavily on its own assessment

of the credibility of the two competing expert witnesses.

Such findings, the Supreme Court has warned, "can virtually

never be clear error." Id. at 574.

Only two of Iran's challenges require even brief consider-

ation. First, Iran claims that the district court erred when

calculating the amount of its award by converting rials to

dollars at the official exchange rate prevailing at the time of

the expropriation. According to Iran, the district court

should have used a different, "open market" exchange rate.

To the extent that this argument applies to the valuation of

McKesson's equity, Iran is estopped from arguing that the

district court committed reversible error because its own

expert witness used the official exchange rate in converting

rials to dollars in his equity valuation. See Georgetown

Manor, Inc. v. Ethan Allen, Inc., 991 F.2d 1533, 1539-40

(11th Cir. 1993) ("[I]t is a 'cardinal rule' of appellate proce-

dure 'that a party may not challenge as error a ruling or

other trial proceeding invited by that party.' ") (citation omit-

ted). To the extent that the argument applies to the district

court's valuation of McKesson's dividends, we think the dis-

trict court's decision to use the official--rather than an "open

market"--exchange rate rests on more than enough evidence

to survive clear-error review. Particularly convincing to us,

the district court relied on decisions of the Iran-U.S. Claims

Tribunal, which invariably used the official exchange rate in

converting rials to dollars. McKesson Corp. v. Islamic Re-

public of Iran, No. 82-220, mem. op. at 45 (D.D.C. May 26,

2000).

Second, Iran claims that the district court erred by award-

ing McKesson the value of its 1982 dividend without reducing

its equity valuation by the same amount. Again, this argu-

ment is barred by estoppel: Iran's trial evidence--including

the submissions of its own expert witness--failed to deduct

the 1982 dividend from its proposed valuation. In any event,

no double-counting occurred. Both experts valued McKes-

son's equity by projecting Pak Dairy's 1982 earnings into the

future, McKesson Corp. v. Islamic Republic of Iran, No.

82-220, mem. op. at 45 (D.D.C. May 26, 2000), while the 1982

dividend was based on Pak Dairy's 1981 earnings.

V.

In its cross-appeal, McKesson challenges the district

court's assessment of simple rather than compound interest.

According to McKesson, the district court erred by holding

that in light of its "finding that the clear majority of interna-

tional courts have historically awarded only simple interest,"

McKesson Corp. v. Islamic Republic of Iran, No. 82-220,

mem. op. at 2 (Sept. 28, 2000), customary international law

required such an award. We review determinations of inter-

national law de novo. See Echeverria-Hernandez v. INS, 923

F.2d 688, 692 (9th Cir. 1991) (applying de novo review to

question of international law), vacated on other grounds by

946 F.2d 1481 (9th Cir. 1991); see also Fed. R. Civ. P. 44.1

("[A]n issue concerning the law of a foreign country ... shall

be treated as a question of law.").

McKesson argues that the district court had no discretion

to award simple interest. For this proposition, McKesson

relies on the Treaty of Amity, which states that property

belonging to nationals and companies of the United States

and Iran "shall not be taken ... without the prompt payment

of just compensation," and that "[s]uch compensation shall

... represent the full equivalent of the property taken."

Treaty of Amity, art. IV, cl. 2. In our view, however, the

phrases "just compensation" and "full equivalent," on which

McKesson relies, are far too ambiguous to require awards of

compound interest.

Although we thus reject the proposition that the Treaty of

Amity requires compound interest, we think McKesson makes

a convincing case that contemporary international law does

not, as the district court seems to have thought, require

simple interest. The only source the district court relies on

that unequivocally states that "compound interest is not

allowable" under international law assessed the state of that

law over fifty years ago. Marjorie M. Whiteman, 3 Damages

in International Law 1997 (1943). And although the Iran-

U.S. Claims Tribunal has never once awarded compound

interest, other international tribunals have. Compare

McKesson Corp. v. Islamic Republic of Iran, No. 82-220,

mem. op. at 49 (May 26, 2000) ("[T]he Tribunal has never

awarded compound interest."), and, e.g., Anaconda-Iran, Inc.

v. Iran, 13 Iran-U.S. Cl. Trib. Rep. 199, 234-35 (1988)

(refusing claimant's request for award of compound interest

even though contract court was enforcing stipulated that such

award was appropriate), with, e.g., Compania del Desarrollo

de Santa Elena, S.A. v. Republic of Costa Rica, 39 I.L.M.

1317, 1332-34 (Int'l Ctr. for Settlement of Inv. Disputes 2000)

(awarding compound interest), and Kuwait v. Am. Indep. Oil

Co. (Aminoil), 21 I.L.M. 976, 1042 (1982) (same). Indeed,

most contemporary sources, including the authority relied on

most heavily by Iran, take the view that "although compound

interest is not generally awarded under international law or

by international tribunals, special circumstances may arise

which justify some element of compounding as an aspect of

full reparation." James Crawford, Third Report on State

Responsibility Submitted to the International Law Commis-

sion of the United Nations, 2 Y.B.I.L.C. 50 (2000).

Accordingly, although customary international law may fa-

vor awards of simple interest, we think the district court

erred in holding that it requires such awards. Had the

district court relied solely on this holding, reversal might

have been appropriate. In denying McKesson's motion for

reconsideration, however, the district court held that "even if

customary international law authorizes an award of compound

interest at the discretion of the awarding body, this Court

finds that the almost uniform practice of awarding only

simple interest is a relevant and compelling consideration in

the exercise of that discretion." McKesson Corp. v. Islamic

Republic of Iran, No. 82-220, mem. op. at 12 (Sept. 28, 2000).

Reviewing this element of the district court's rejection of

McKesson's motion for reconsideration only for abuse of

discretion, see Anyanwutaku v. Moore, 151 F.3d 1053, 1058

(D.C. Cir. 1998), we find none. It is true, as McKesson points

out, that some federal common-law principles require courts

to "make the plaintiff whole." Appellee's Opening Br. at 65.

Even if these principles support awards of compound interest

in tort cases, however, they fall well short of proving that the

district court abused its discretion, particularly in light of the

court's reliance on a far more relevant authority: the deci-

sions of the Claims Tribunal, which invariably awards simple

interest.

VI.

We affirm the district court's holdings that federal courts

have subject-matter jurisdiction over Iran under the FSIA's

commercial-activity exception, that the IGA does not preclude

federal jurisdiction over McKesson's claims, and that the

Treaty of Amity gives McKesson a right to recover its

expropriated property. We reverse the district court's sum-

mary judgment in favor of McKesson on liability and remand

for trial on the "come to the company" and futility issues.

The district court's valuation of McKesson's assets and its

assessment of simple interest are affirmed to the extent that

those judgments are not rendered moot after trial.

So ordered.