Petition for Writ of Certiorari — Republic of Argentina v. Siderman de Blake

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IN THE

Supreme Court of the Gnited States

OCTOBER TERM, 1992

REPUBLIC OF ARGENTINA and PROVINCE OF TUCUMAN,

ARGENTINA,

Petitioners,

. vs

SUSANA SIDERMAN DE BLAKE, et al.,

Respondents.

Petition For Writ Of Certiorari To The

United States Court of Appeals For The

Ninth Circuit

PETITION FOR WRIT OF CERTIORARI

BRUNO A. RISTAU

Counsel of Record

4801 Massachusetts Ave., N.W.

Washington, D.C. 20016

(202) 895-1560

Counsel for the Petitioners

PRESS OF BYRON S. ADAMS, WASHINGTON, D.C. (202) 347-8203

QUESTIONS PRESENTED

1. Whether the ‘commercial activity” exception of

the Foreign Sovereign Immunities Act confers juris-

diction over a suit against Argentina and one of its

constituent Provinces (Tucumdn) for the seizure and

“intervention” of respondents’ real estate by military

authorities that governed the Province following the

1976 coup d’état in Argentina.

2. Whether the State of Argentina and the Tucu-

man Province waived their immunity from suit under

the “‘tort exception’”’ of the Foreign Sovereign Im-

munities Act for a tort in violation of international

law (torture) committed in 1976 against an Argentine

national in Tucuman Province, where five years after

the tort victim took up residence in the United States,

a Tucuman court requested a California State court

to serve on the victim a document relating to a crim-

inal proceeding instituted against him in Tucuman.

ill

TABLE OF CONTENTS

Page

OPINIONS BELOw ..... AANA SuRASNAARKancebheniuansaseencneciaaians ]

ian eh caps lnessestxstrdunciianasiecacssacecees:, 2

ee 2

I a accshcsasdiansndnawravesansaveacecea sce? ccc. 6

1. Nature of the Case .............ccccccccccccoccscscees... 6

2. The Proceedings in the District Court ....... 7

3. The Proceedings in the Ninth Circuit ..... si )

4. The Ninth Circuit’s Decision ........................ 12

a. The Sidermans’ expropriation claims ...... 12

b. José Siderman’s torture claim ................. 16

REASONS FOR GRANTING THE WRIT oeeeccecceececcceeeess.. 19

I. The Ninth Circuit has erroneously construed

and applied an important Act of Congress

governing the immunity of foreign states

from suits for the taking of property, and

its construction of the Act’s commercial ac-

tivity exception to sovereign immunity con-

flicts with other Circuits; this Court has

already granted certiorari in another case to

review the conflict ...............ccccccccssssccseseesees, 19

II. The Ninth Circuit’s holding that a foreign

State may be sued for torture where the tor-

tious act and the injury occurred abroad is

in direct conflict with an applicable decision

MN RING icc nsnantencxsessesacsnaricinscovécacssecces, 24

IN goa. of schisduincavasbseansseseniascucaresacessaee, ccs. 2

TABLE OF AUTHORITIES

Cases: Pages

Argentine Republic v. Amerada Hess Shipping

Corp., 488 U.S. 428 (1989) ................. 12,16,17,24,25

Banco Nacional de Cuba v. Sabbatino, 376 U.S. 398

CITE sungcncacanecsnueactusasnaaneisseaaenapcuaecicmeibeaes 25

Nelson v. Saudi Arabia, 923 F.2d 1528 (11th Cir.

1991), cert. granted, No. 91-522, June 8,

RONNIE spcindk cxcaceaeatusismanoeiinckcacsaeaveaaeecuaiceaaarencs) 23

National City Bank v. Republic of China, 348 U.S.

BC AMIE cchnccnsinidnt cosceseduchactconvaeabiuacsecsscauibcicios’ 18

Stena Rederi AB v. Comision de Contratos, 923 F.2d

Be Se SAN. RIED siecgusneseneissteenrsancsatinchieiasenss 22

Verlinden B.V. v. Central Bank of Nigeria, 461 U.S.

BE, CIID sichbesnsistucsesscalebecunicimesbixeisacunaimencens 24

W. S. Kirkpatrick v. Environmental Tectonics Corp.,

S55 U.S. 2, 110 GAA. TOS CUB GO) vvcivsicsevsnss 25

Zschernig v. Miller, 389 U.S. 429 (1968) ............... 25

Statutes:

Foreign Sovereign Immunities Act, 28 U.S.C. §§1330,

1602-1611:

MII biihuinasievakssoueelacibicibennntaniuhesenntonaioa passim

REED \cravnandieesdcannanecsouicdomnidenatsaeaelisaiiacnlekainas 2,6

NOM tach easanesacoamailallicuaenscandecs diobacasianmiunciaoies 3

NII inks niaisvdisindiciecn adntanadasbuasculessapplaceencdaeiainiaas 16

NIN dacctescuinnkasetskcedsamavecetseetapuatiaupaeimantiaciasd 20

ID ihe toma saute tana boots Oe ee ee 20

SETI ndisinvcat cin nniissecs pa viaseconeabednapasadsnemeiaeunetadenaees 4,16

POINTED Sscias csleslan:covudednconicancduooacss peckonmmniouanae 4,17

IED cicisncideecintaeeiscerniecoinunsees 4,13,14,19,21,22,23

| | rE Fe kh

EE set snicannncesincrtasneckahanmoiabaatumnnaieintis 5,16

§1607

Table of Authorities Continued

Page

Te ii Ae es ctntasascasstsreiaeurennctaseieem enous 2

Be eect IE a dessus concesececsauaniacnenseaeeeaeneaeeen 6

Fe ic MEI pvpndevacesnaepncaiceananemeceenaneanhennaelcsiania 6

Se Re as ee seiscnachsaxcda tia aiiaasueniaces tacabcerkeneneuaanien 6

Miscellaneous:

H.R. Rep. No. 94-1487, 94th Cong., 2d Sess.

ERA OTE scsincencincteunrsassucunsehennimancedccapiotaiaiecinnaeed me 20

UU OUNG TGTE TEUEG TE ecsricerrrsescntivnisienase ]

Supreme Court of Argentina, No. S525.XX, Order

OF TOCNEE FB, TOGO eniinercdinsctreicemasnaicn 1]

CORT ROUEN SON sisiccs cxesesitcivsisencevecanccaciconenhers 17

Universal Declaration of Human Rights ................ 17

IN THE

Supreme Court of the Gnited States

OCTOBER TERM, 1992

No.

REPUBLIC OF ARGENTINA and PROVINCE OF TUCUMAN,

ARGENTINA,

Petitioners,

SUSANA SIDERMAN DE BLAKE, et al..

Respondents

PETITION FOR WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS FOR THE

NINTH CIRCUIT

The Republic of Argentina and the Province of

Tucuman! petition the Court that a writ of certiorari

issue to review the judgment rendered in this case

by the United States Court of Appeals for the Ninth

Circuit.

OPINIONS BELOW

The opinion of the court of appeals, Appendix A

(App.la-43a), is reported at 965 F.2d 699 (1992).

‘In compliance with Rule 29.1 of the Rules of this Court.

Petitioners represent that the Republic of Argentina is a foreign

State, and that the Province of Tucumén is a constituent prov-

ince and a political subdivision of the Republic of Argentina.

The orders of the United States District Court for

the Central District of California are not reported;

they are reproduced below in Appendix B (App. 44a-

45a), Order re Subject Matter Jurisdiction and Per-

sonal Jurisdiction of March 14, 1984; Appendix C

(App. 46a-53a), Judgment by Default of September

28, 1984; and Appendix D (App. 54a-57a), Order Va-

cating Default Judgment and Dismissing Action of

March 7, 1985.

JURISDICTION

The judgment of the court of appeals was entered

on May 22, 1992. This Court’s jurisdiction is invoked

under 28 U.S.C. § 1254(1).

STATUTE INVOLVED

The Foreign Sovereign Immunities Act of 1976

(FSIA), 28 U.S.C. §§ 1830, 1602-1611, reads in rele-

vant part as follows:

§ 1330. Actions against foreign states

(a) The district courts shall have original ju-

risdiction without regard to amount in con-

troversy of any nonjury civil action against

a foreign state as defined in section 1603(a)

of this title as to any claim for relief in per-

sonam with respect to which the foreign state

is not entitled to immunity either under sec-

tions 1605-1607 of this title or under any

applicable international agreement.

(b) Personal jurisdiction over a foreign state

shall exist as to every claim for relief over

which the district courts have jurisdiction un-

der subsection (a) where service has been

made under section 1608 of this title.

§ 1603. Definitions

For purposes of this chapter—

(a) A “foreign state’’, except as used in sec-

tion 1608 of thistitle, includes a political sub-

division of a foreign state or agency or

instrumentality of a foreign state as defined

in subsection (b).

(b) An “agency or instrumentality of a for-

eign state’’ means any entity—

(1) which is a separate legal person, cor-

porate or otherwise, and

(2) which is an organ of a foreign state or

political subdivision thereof, or a majority

of whose shares or other ownership inter-

est is owned by a foreign state or political

subdivision thereof, and

(3) which is neither a citizen of a State of

the United States as defined in section

1332(c) and (d) of this title, nor created

under the laws of any third country.

(c)

(d) A “commercial activity’’ means either a

regular course of commercial conduct or a

particular commercial conduct or a particular

commercial transaction or act. The commer-

cial character of an activity shall be deter-

mined by reference to the nature of the

course of conduct or particular transaction

or act, rather than by reference to its pur-

pose.

(e) A “commercial activity” carried on in the

United States by a ‘‘foreign state’ means

commercial activity carried on by such state

and having substantial contact with the

United States.

§ 1604. Immunity of a foreign state from

jurisdiction

Subject to existing international agree-

ments to which the United States is a party

at the time of enactment of this Act a foreign

state shall be immune from the jurisdiction

of the courts of the United States and of the

States except as provided in sections 1605-

1607 of this chapter.

§ 1605. General exceptions to the jurisdic-

tional immunity of a foreign state

(a) A foreign state shall not be immune from

the jurisdiction of courts of the United States

or of the States in any case—

(1) in which the foreign state has waived

its immunity either explicitly or by im-

plication, notwithstanding any with-

drawal of the waiver which the foreign

state may purport to effect except in ac-

cordance with the terms of the waiver;

(2) in which the action is based upon a

commercial activity carried on in the

United States by the foreign state; or

upon an act performed in the United

States in connection with a commercial

activity of the foreign state elsewhere;

or upon an act outside the territory of

the United States in connection with a

commercial activity of the foreign state

elsewhere and that act causes a direct

effect in the United States;

(3) in which rights in property taken in

violation of international law are in issue

and that property or any property ex-

changed for such property is present in

the United States in connection with a

commercial activity carried on in the

United States by the foreign state; or

that property or any property exchanged

for such property is owned or operated

by an agency or instrumentality of the

foreign state and that agency or instru-

mentality is engaged in a commercial ac-

tivity in the United States;

(4)

(5) not otherwise encompassed in para-

graph (2) above, in which money dam-

ages are sought against a foreign state

for personal injury or death, or damage

to or loss of property, occurring in the

United States and caused by the tortious

act or omission of that foreign state or

of any official or employee of that for-

eign state while acting within the scope

of his office or employment; except this

paragraph shall not apply to—

(A) any claim based upon the exer-

cise or performance or the failure to

exercise or perform a discretionary

function regardless of whether the

discretion be abused, or

(B) any claim arising out of mali-

cious prosecution, abuse of process,

libel, slander, misrepresentation, de-

ceit, or interference with contract

rights;

STATE MENT

1. Nature of the Case

The amended complaint in this suit was filed in

November 1982 by respondents José Siderman (‘“‘hus-

band’’), his wife Lea and their son Carlos (Argentine

nationals residing in California at the time of suit),

and by their daughter Susana Siderman de Blake, a

naturalized United States citizen residing in Florida

(collectively ‘‘the Sidermans’’).

The amended complaint named as defendants the

Republic of Argentina (‘‘Argentina’’); the Province of

Tucuman (‘“Tucuman’’), a constituent province and a

political subdivision of Argentina; eight Argentine na-

tionals claimed to have been members of the military

Government of the Province of Tucumén; and an Ar-

gentine construction and real estate management

company, “INOSA,”’ owned by the Sidermans. The

company owned the ‘Hotel Gran Corona”’ in the city

of San Miguel de Tucuman.

The Sidermans invoked the district court’s jurisdic-

tion under the Foreign Sovereign Immunities Act of

1976 (“FSIA’’), 28 U.S.C. §13830; the Alien Tort Stat-

ute, 28 U.S.C. §1350; diversity jurisdiction, 28 U.S.C.

§1332; federal question jurisdiction, 28 U.S.C. §1331;

and pendent jumsdiction. Service on Argentina and

on Tucuman was made by mail on the Argentine Min-

istry of Foreign Affairs and on the Governor of Tu-

cuman, respectively; the individual defendants and the

INOSA company were not served.

The complaint asserted eighteen claims for relief:

claims by the Sidermans for an uncompensated taking

of real estate and a wrongful ‘“‘judicial intervention”’

of the INOSA company instigated by military

authorities who governed Tucumdén following the coup

d’état in Argentina in 1976; a claim by the husband

for a week-long wrongful detention in Tucumén fol-

lowing the coup, during which period he claims to

have been mistreated and tortured by masked, ma-

chine-gun carrying soldiers; a claim by the husband

for false arrest in Italy as a result of a vexatious,

and ultimately unsuccessful, extradition request made

by Argentina in 1981; a claim by the wife for loss

of consortium and emotional distress; derivative claims

by the wife, son and daughter for the husband’s tor-

ture; derivative claims by the Sidermans on behalf of

INOSA for conversion, constructive fraud, intentional

interference with business relationships and breach of

fiduciary duty based on the wrongful intervention:

and a claim for the enforcement of an Argentine judg-

ment.

The Sidermans sought compensatory and declara-

tory relief and punitive damages of $100 million each

on 15 of the claims asserted. The last claim sought

enforcement of a decree issued by a Provincial court

in Tucuman that had vacated the intervention against

INOSA and ordered the return of the company’s prop-

erties to the Sidermans.

2. The Proceedings in the District Court

In February 1983, following receipt of the com-

and Tucumdén, the Argentine Embassy in Washington

presented a diplomatic note to the Department of

State asserting sovereign immunity with respect

all claims asserted by the Sidermans. The Department

of State advised the Embassy that under the FSIA,

immunity defenses should be raised in court and

transmitted copies of the note and of the Depart-

ment’s response to the Clerk of the district court.

In March 1984, following a hearing on the Sider-

mans’ motion to enter a default, the district court

dismissed sua sponte on act of state grounds the Sid-

ermans’ taking claims (App. 44a-45a). The court, how-

ever, found that it was competent under the Alien

Tort Statute to hear the husband’s claim for a tort

in violation of international law and the wife’s claim

for loss of consortium. Without stating any reasons,

the court further ruled that it had personal jurisdic-

tion over Argentina and over Tucumén, but that it

lacked personal jurisdiction over the _ individual

defendants and the INOSA company and dismissed

the suit as to these defendants. The court did not

examine its competence under the FSIA to hear the

claims asserted against Argentina and Tucumdan.

In September 1984, the district court entered a

default judgment against Argentina and Tucuman for

some $2.6 million on the husband’s claim as compen-

sation for pain and suffering, physical injuries, loss

of earnings, medical expenses and moral damages,

and for $100,000 in favor of the wife for loss of

consortium. The court denied recovery to the son and

the daughter. (App. 46a-53a). One month later, the

court entered an order sua sponte for reconsideration

of the issue of sovereign immunity, and ordered the

issue briefed.

In early-January 1985, Argentina and Tucuman

sought relief from the default judgment on the ground

that the FSIA provided the sole jurisdictional basis

for suits against them in United States courts. They

submitted that the claims asserted against them by

the Sidermans were not cognizable under the Act and

that, in consequence, the default judgment was void.

Without taking any position on the legal issues raised

in Petitioners’ moving papers, the United States filed

a suggestion of interest and urged the court to con-

sider Argentina’s motion.

On March 7, 1984, the district court granted the

relief sought by the Petitioners, vacated the default

judgment, and dismissed the action on the ground

that Argentina and Tucuman were immune from the

suit under the FSIA, and that the claims asserted by

the Sidermans did not fall within any of the excep-

tions to sovereign immunity under the Act (App. 54a-

57a). The Sidermans appealed the district court’s dis-

missal of their taking claim against Argentina and

Tucuman and the husband’s compensation claim for

torture.’

3. The Proceedings in the Ninth Circuit

Following the filing of their notice of appeal in

April 1985, the Sidermans obtained nine consecutive

six-month stays of the appeal. (App. 6a-7a n.5). The

Sidermans secured these stays by representing to the

Ninth Circuit that the appeal may become moot. In

their successive applications for the stays, they in-

formed the court that they had filed an action in the

Supreme Court of Argentina under compensatory leg-

islation enacted by the civilian Government of Pres-

2 The Sidermans did not appeal the dismissal of the suit against

the individual defendants and the INOSA company, or the ruling

that the wife, son and daughter lacked standing to claim deriv-

atively damages for the husband’s torture. (App. 6a nn. 2, 3).

ident Raul Alfonsin that had replaced the military

regime in late-1984. They further advised the court

that their Argentine action ‘‘seeks the same relief

against the Republic of Argentina as sought by this

action,’ and that if they obtained redress in Argen-

tina their appeal would become moot.’ The following

year they informed the court that the Argentine

Supreme Court had sent a letter rogatory to the U.S.

District Court in Los Angeles asking that two wit-

nesses be heard.‘ In 1988, they advised the court that

the Argentine Supreme Court ‘‘agreed to hear

plaintiffs’ claims for torture and property depriva-

tion;’’ that ‘“‘[t]hese are the same claims that are the

subject of the instant United States action,’ and that

from May 1986 to February 1988 evidence was taken

both in Argentina and in the United States to de-

termine the Respondents’ financial condition and their

ability to post a substantial bond that was recuired

under Argentine law.® Early in 1989, they submitted

to the court that the Argentine Supreme Cour: had

issued a decision waiving the bond and that a Prov-

incial court in Tucumdn had issued a preliminary de-

cision for the return of some of the Sidermans’

properties. ‘“‘When these properties are returred a

major issue will be resolved in plaintiffs’ favor in

$ Letter from Respondents’ counsel to the Clerk of the Court

of February 10, 1986; Motion to Stay Briefing Pending Reso-

lution of Action in Argentina, filed March 3, 1986.

‘Status Report and Motion for Further Stay, filed April 27,

1987.

‘Status Report and Motion for Further Stay, filed June 9,

1988.

Argentina.’’* Later that year, they submitted that the

action in Argentina was “‘still pending’’ and that the

Sidermans “will also attempt to settle the case

through the Argentine Executive Branch.’ In their

last application for a stay of the appeal, the Sider-

mans advised the court that they had pending a re-

quest before the ‘‘Advisory Committee of the

Argentine Presidency,’’ and that the daughter had

requested the Department of State to espouse a dip-

lomatic claim on her behalf.®

The Sidermans failed to inform the court of appeals

that the compensation claims that they had filed in

the Supreme Court of Argentina had been challenged

for untimeliness, and that in September 1989, the

Supreme Court issued an order dismissing their suit

as time-barred.°

Argentina and Tucumdan opposed any further stays

of the appeal and moved for summary affirmance on

the authority of this Court’s then recent decision in

6 Status Report and Motion for Further Stay, filed January

3, 1989.

7 Status Report and Motion for Further Stay, filed July 18,

1989.

§ Status Report and Motion for Further Stay, filed August 23,

1990.

® The dispositive part of the Order read:

[T]he suit is dismissed, with costs, on the ground that

it is time-barred (Arts. 68 and 69 of the Code of Pro-

cedure). Notification to be given to the parties.

Supreme Court of Argentina, No. S525.XX—Original Juris-

diction. Siderman, José and others vs. The Argentine Nation

and The Province of Tucumén; [complaint] for compensation and

damages; Order of September 19, 1989.

Argentine Republic v. Amerada Hess Shipping Corp.,

488 U.S. 428 (1989). On October 15, 1990, the court

of appeals denied summary affirmance, vacated the

last stay, and ordered that the appeal be briefed and

argued.

4. The Ninth Circuit’s Decision

The court of appeals vacated the district court’s

judgment dismissing the expropriation claims on the

basis of the act of state doctrine and remanded the

case for an evidentiary hearing to determine whether

the Sidermans’ expropriation claims were cognizable

under the FSIA’s ‘“‘commercial activity” and “‘inter-

national takings’ exceptions to sovereign immunity.

(App. 23a). The court noted that ‘‘i]f the district

court determines that it does have jurisdiction over

the expropriation claims, Argentina can raise, and the

district court can reconsider, the act of state doctrine

as a defense to those claims.” (App. 23a-24a).

The court further ruled that the district court’s

dismissal of the husband’s claim for torture for lack

of subject matter jurisdiction under the FSIA con-

stituted reversible error (App. 43a); it remanded the

claim to the district court for a determination whether

Argentina had impliedly waived its immunity from

Suit because of ‘‘Argentina’s invocation of United

States judicial authority [as] part and parcel of its

efforts to torture and persecute José Siderman.”’

(Ibid.).

a) The Sidermans’ expropriation claims

The court criticized the district court for dismissing

the Sidermans’ expropriation claims under the act of

state doctrine without considering at the outset its

subject matter jurisdiction under the FSIA. (App. 9a-

12a). It then proceeded to examine whether the ex-

propriation claims were cognizable under any of the

three ‘‘commercial activity’’ exceptions in §1605(a\2).!°

The court began its analysis by acknowledging that

to come within the first clause of the FSIA’s com-

mercial activity exception, a claim against a foreign

state must be ‘“‘based upon a commercial activity car-

ried on in the United States by the foreign state.’’

(App. 14a). In the court’s view, Argentina’s contin-

uing management of INOSA, its operation of the Gran

Corona Hotel in Tucumén and its receipts of profits

from the INOSA company were activities “‘of a kind

in which a private party might engage’’ (zbid.), and

were clearly commercial in nature. The court further

noted that the seizure of INOSA through a “‘judicial

intervention” may also constitute a commercial activ-

ity. (App. 15a n. 10). Turning to the statutory re-

quirement that the foreign states’s commercial

activities be ‘‘carried on in the United States,” the

court concluded that the requirement was satisfied by

the complaint’s allegations that the Argentine na-

tional airline, Aerolineas Argentinas, advertised the

Gran Corona Hotel in the United States and that

‘numerous Americans have stayed at the Hotel, which

accepts all major American credit cards.’’ (App. 16a).

In the court’s view, these allegations were sufficient

to demonstrate that the commercial activities Argen-

tina was conducting through INOSA have “‘substantial

contact with the United States”’ (ibid.), and that the

expropriation claim therefore fell squarely within

clause one of the commercial activity exception.

section numbers of the Act, as codified in 28 U.S.C.

As to the second clause of §1605(a\2)—which denies

immunity if a claim is based ‘‘upon an act performed

in the United States in connection with a commercial

activity of the foreign state elsewhere’’—the court

held that since Americans spend money at the Gran

Corona Hotel ‘‘which the Sidermans claim rightfully

belongs to them’”’ (App. 17a), the “‘Sidermans’ causes

of action for conversion, constructive fraud, inten-

tional interference with business relationships and

breach of fiduciary duty [in Argentina] directly relate,

therefore, to Argentina’s acts in this country.” (Jbid.).

Thus, the Sidermans’ pleadings also satisfied clause

two of the commercial activity exception.

Noting that the Sidermans did not rely on the third

clause of §1605(a\2)—which denies immunity to a for-

eign state if the claim is based on a commercial act

outside the United States and causes a “direct effect’’

in this country—the court speculated that if the Sid-

ermans could show that dividends from INOSA should

have been, but were not, paid to them in the United

States, the “direct effect’’ requirement of the third

clause would also be satisfied. (App. 19a). The court

instructed the district court that ‘‘on remand the Sid-

ermans also may pursue jurisdiction under clause

three and seek to cure any jurisdictional defects by

amending their complaint and submitting additional

evidence.”’ (Jbid.).

The court then turned to Petitioners’ arguments

that subject matter jurisdiction over the Sidermans’

expropriation claims could only be predicated on the

specific international takings exception to sovereign

immunity codified in § 1605(aX3). Petitioners urged

that those Respondents who were Argentine citizens

could not assert a taking claim in violation of inter-

national law against their own sovereign, and that in

any event the Sidermans’ complaint failed to show on

its face that their claims were cognizable under

§ 1605(aX3) because none of the property allegedly

seized in Argentina (or property exchanged for such

property), was claimed to be physically present in the

United States.

The court accepted the first proposition and re-

jected the latter. (App. 19a-20a). It ruled that the

daughter, an American citizen, was not barred from

asserting a claim under §1605(a\3) for a taking in

violation of international law. (App. 20a). The fact

that none of the expropriated properties were “‘pres-

ent in the United States in connection with a com-

mercial activity carried on in the United States” by

Argentina or Tucuman (first clause of §1605(a\3)),

was not dispositive of the jurisdictional issue tend-

ered. The court pointed to the second clause of the

international takings exception—which permits a court

to hear a suit where the expropriated property “‘is

owned or operated by an agency or instrumentality

of the foreign state and that agency or instrumen-

tality is engaged in a commercial activity in the

United States’’—and held that the daughter could as-

sert subject matter jurisdiction under that clause. The

court reasoned (1) that the daughter’s claim “that

Argentina violated the international law of expropri-

ation is substantial and non-frivolous, because the

complaint alleges that Argentine officials seized IN-

OSA for their personal profit and not for any public

purpose ... and because the Siderman family is Jew-

ish’”’ (App. 21a); (2) when INOSA was subjected to

judicial intervention in Tucuman, it became an

“agency or instrumentality’ of Argentina or Tucu-

EEE

man, as defined in §1603(b) (App. 22a); and (8) the

daughter also satisfied the second clause’s final re-

quirement—that the agency or instrumentality be en-

gaged in a commercial activity in the United States.

In the court’s view, ‘‘[t]he Sidermans’ allegations con-

cerning Argentina’s solicitation and entertainment of

American guests and Hotel Gran Corona and the ho-

tel’s acceptance of American credit cards and trav-

eler’s checks are sufficient at this stage of the

proceedings to show that Argentina is engaged in a

commercial activity in the United States.”’ (App. 22a-

23a). In consequence, the complaint “brings [the

daughter’s] expropriation claims within clause two of

the international takings exception.’ (App. 23a).

b) José Siderman’s torture claim

The court began its analysis of this claim by ob-

serving that, in its view, the decision in Argentine

Republic v. Amerada Hess Shipping Corp., 488 U.S.

428 (1989), merely limited the non-commercial tort

exception of the FSIA, §1605(a\5), ‘‘to cases in which

the damage to or loss of property occurred within

the territorial jurisdiction of the United States.”’ (App.

26a). Had tne Sidermans relied solely on that excep-

tion, “their claims clearly would be barred under

Amerada Hess.” (Ibid.). The court emphasized, how-

ever, that the Sidermans’ jurisdictional argument was

not based on the tort claims exception (App. 38a

n. 17), but rather on the ‘‘international law principle

of yus cogens, and the FSIA’s existing treaty (section

1604) and implied waiver (section 1605(aX1)) excep-

tions” (App. 26a), which the Amerada Hess Court did

not address.

Following a lengthy exegesis on the doctrine of jus

cogens (App. 26a-34a), the court concluded that state-

———————

sponsored torture is now universally outlawed and

constitutes a violation of jus cogens. (App. 33a). Re-

cognizing that it did not ‘‘write on a clean slate’

(App. 34a), the court lamented that in this case it

was bound by an affirmative Act of Congress, and

that its task was to interpret the Act “through the

prism of Amerada Hess.” (App. 35a). The court ac-

knowledged that the Amerada Hess Court was ‘“‘so

emphatic in its pronouncement that ‘immunity is

granted in those cases involving alleged violations of

international law that do not come within one of the

FSIA’s exceptions’,’”’ that it was forced to conclude

“that if violations of jus cogens committed outside the

United States are to be exceptions to immunity, Con-

gress must make them so.” (App. 35a).

Based on Amerada Hess, the court also rejected

the Sidermans’ contention that Argentina should be

denied sovereign immunity for torture claims under

the 1948 Universal Declaration of Human Rights and

the United Nations Charter (App. 35a-38a), since nei-

ther of these documents contained any provision “‘re-

garding remedies or compensation for violations of its

substantive rules of conduct.” (App. 37a). It therefore

concluded that ‘‘[t]he existing treaty exception of sec-

tion 1604 does not apply to torture claims.’’ (App.

38a).

The court, however, found in the waiver provision

of §1605(aX1) a potential basis for the assertion of

jurisdiction over the torture claim. The record estab-

lished that in 1980—some four years after Mr. Sid-

erman had left Argentina for the United States—the

Presiding Judge of the Supreme Court of the Prov-

ince of Tucuman addressed a letter rogatory to the

Superior Court in Los Angeles and requested that a

document relating to a criminal proceeding against

José Siderman in Tucuman be delivered to Mr. Sid-

erman. A judge of the Superior Court mailed the

notice to Mr. Siderman."'

In the court’s view, this judicial assistance request

presented ‘‘a situation where Argentina apparently

not only envisioned United States court participation

in its persecution of the Sidermans, but by its actions

deliberately implicated our courts in the persecution.”’

(App. 41a).

The court found that the presentation of the letter

rogatory, sufficed “‘to bring the [Sidermans’] claims

for torture within ... [the waiver provision] of the

FSIA.” (App. 39a). Without citing any authority, the

court reasoned that ‘“‘i]f Argentina has engaged our

courts in the very course of activity for which the

Sidermans seek redress, it has waived its immunity

as to that redress.’’!* (App. 42). The court instructed

the district court to determine on remand whether

the requisite direct connection exists between Mr. Sid-

erman’s torture in 1976 and the 1980 Argentine letter

rogatory. “If it does, Argentina will be subject to the

court’s jurisdiction for the torture claims.’’ (App. 48a).

‘The Superior Court’s letter to Mr. Siderman is reproduced

in Appendix E.

‘2 The Sidermans argued below that Argentina and Tucumdn

should be deemed to have waived their sovereign immunity pur-

suant to §1607 of the FSIA. That section codifies the principle

established in National City Bank v. Republic of China, 348 U.S.

359 (1955), that when a foreign state brings an action or in-

tervenes in an action in a federal or state court, it becomes

subject to counterclaims and setoffs.

REASONS FOR GRANTING THE WRIT

I. THE NINTH CIRCUIT HAS ERRONEOUSLY CON-

STRUED AND APPLIED AN IMPORTANT ACT OF

CONGRESS GOVERNING THE IMMUNITY OF FOR-

EIGN STATES FROM SUITS FOR THE TAKING OF

PROPERTY, AND ITS CONSTRUCTION OF THE

ACT’S COMMERCIAL ACTIVITY EXCEPTION TO

SOVEREIGN IMMUNITY CONFLICTS WITH OTHER

CIRCUITS; THIS COURT HAS ALREADY GRANTED

CERTIORARI IN ANOTHER CASE TO REVIEW THE

CONFLICT.

The court of appeals’ decision in this case marks

the first time that any United States court has as-

serted jurisdiction over a foreign state under the FSIA

for compensation for a taking of property under the

“commercial activity’’ exception of the FSIA. The

court’s decision is demonstrably wrong. The compe-

tence of courts to hear taking suits is to be found in

the ‘‘international takings exception”’ to sovereign im-

munity, codified in subparagraph (3) of §1605(a), not

in the ‘“‘commercial activity’’ exceptions in subpara-

graph (2) of that section.

The international takings exception is a specific,

self-contained exception to the general immunity of

foreign states, and empowers courts to hear claims

for the taking of property in violation of international

law. To begin with, §1605(a\X3) differentiates between

taking claims asserted against a foreign state itself

(first clause), and taking claims asserted against agen-

cies and instrumentalities of foreign states (second

clause). For a taking claim to succeed under the first

clause, the claimant must show that the property was

taken in violation of international law, that the prop-

erty (or property exchanged for such property) is

present in the United States, and that the property’s

presence here is in connection with a commercial ac-

tivity carried on in the United States by the foreign

state, a political subdivision or an agency or instru-

mentality of the foreign state. H.R. Rep. No. 94-1487,

94th Cong. 2d Sess. at 19 (1976).

The Sidermans’ complaint asserted that the prop-

erty taken from them by the military authorities in

Tucumén consisted of real estate and of a hotel owned

by INOSA, an Argentine company owned by the Sid-

ermans. Since they did not claim that any of the taken

property, or any property exchanged for such prop-

erty, was brought by Argentina or Tucumdan to the

United States, their taking claim plainly does not fall

within the jurisdictional provision of the first clause

of §1605(a\3).

The court of appeals’ conclusion that the district

court was competent to hear the taking claim under

the second clause of §1605(aX3) does not bear anal-

ysis. Under the second clause, the expropriated prop-

erty (or any property exchanged for such property)

(1) must be owned or operated by an “agency or

instrumentality”’ of a foreign state, and (2) that

agency or instrumentality must be engaged in a ‘‘com-

mercial activity in the United States.’’° The legisla-

tive history explains that the jurisdictional regime of

the first clause differs from that of the second clause

in that under the latter ‘‘the property need not be

present in connection with a commercial activity of

the agency or instrumentality.’’ Jbid. The court of

appeals misconstrued the distinction between these

'’ The terms ‘‘commercial activity’ and ‘‘commercial activity

carried on in the United States by a foreign state”’ are defined

in §1603(d) and (e) of the FSIA.

two clauses and, in effect, ruled that under the second

clause the property need not be present in the United

States at all. The only plausible interpretation of the

legislative history just quoted is that where an agency

or instrumentality of a foreign state owns or holds

the property, the property need not be present in the

United States in connection with a commercial activity

of that agency.

The premises of the court’s syllogism, viz., that

INOSA qualified as an ‘‘agency and instrumentality”’

of Argentina or of Tucumdan because of the judicial

intervention (App. 22a); that INOSA engaged in com-

mercial activities in the United States because of Ar-

gentina’s alleged “‘solicitation and entertainment of

American guests at the Hotel Gran Corona and the

hotel’s acceptance of American credit cards and trav-

eler’s checks’’ (ibid.); and that ‘‘[t]he Sidermans’ al-

legations bring Susana Siderman de_ Blake's

expropriation claims within clause two of the inter-

national takings exception’’ (App. 23a) are invalid.

The daughter’s taking claim is not cognizable under

§1605(aX3).

The court of appeals’ principal jurisdictional ruling

regarding the taking claim, 7.e., that the district court

had subject matter jurisdiction over Respondents’ ex-

propriation claims under the three clauses of the

“commercial activity’ exception of §1605(a\2), is un-

precedented and clearly erroneous. The core of the

Sidermans’ taking claim was that their real estate

was unlawfully seized by the military authorities in

Tucumdan, not that Argentina breached a contract or

other commercial undertaking, or committed a com-

mercial tort. Leaving aside the court’s assumption

that the taking of property by a state within its ter-

ritory can be considered a ‘‘commercial activity,”’ the

Respondents’ claims are not “‘based upon”’ the activ-

ities carried on by Argentina and Tucumdan in the

United States—or more accurately, the claims are not

‘“‘based upon”’ the activities of INOSA or the Hotel

Gran Corona—as mandated by the first clause of

§1605(a\2) of the FSIA. The mere fact that a foreign

state or one of its agencies engages in commercial

activities in the United States does not satisfy the

first clause of the FSIA’s commercial activity excep-

tions. The plain and unambiguous language of the

first clause mandates that the suit against the foreign

state be ‘‘based upon” that activity. Here, the court

of appeals identified Argentina’s or Tucumdan’s rele-

vant commercial activity as the Hotel Gran Corona’s

solicitation of American guests and its acceptance of

American credit cards. Plainly, these are not the com-

mercial activities on which the Sidermans’ taking

claims are based. The fact that a foreign state or one

of its agencies engages in commercial operations in

the United States is itself inadequate to support a

finding of subject matter jurisdiction under the FSIA.

There must be a close connection between the cause

of action asserted and the jurisdictional facts upon

which it is based. Other contacts between a defendant

foreign state and the forum state, unrelated to a par-

ticular cause of action, but that might justify assertion

of jurisdiction under the theories of ‘‘doing business,’

or even of “‘transacting business,’’ do not satisfy the

requirements of the commercial activity exception of

the FSIA.

The Circuits, however, have differed widely on the

proper interpretation of the “‘based upon’”’ language

in §1605(a). Cf, e.g., Stena Rederr AB v. Comision de

Contratos, 923 F.2d 380 (5th Cir. 1991) (to satisfy

commercial activity exception of FSIA, commercial

activity that provides jurisdictional nexus must also

be activity on which lawsuit is based) with Nelson v.

Saudi Arabia, 923 F.2d 1528 (11th Cir. 1991) (com-

mercial activity exception of FSIA permits assertion

of claim for torture allegedly committed by officials

in Saudi Arabia because Saudi government entered

into employment contract with claimant in this coun-

try). To resolve the conflict among the Circuits, this

Court granted certiorari last Term in the Nelson case

(Saudi Arabia v. Nelson, No. 91-522), and the matter

is presently being briefed. The Court should therefore

also grant certiorari in the instant case, since it pre-

sents yet another variant of the Circuit Courts’ con-

fusing and _ inconsistent interpretations and

applications of §1605(a\2)’s “‘based upon’’ standard.

The Sidermans also cannot bring their expropria-

tion claims within the second or third clauses of the

commercial activity exception codified in §1605(a\2)

because the claims are not based “upon an act per-

formed in the United States in connection with a

commercial activity of ... [Argentina] elsewhere”

(second clause), nor are they based “‘upon an act out-

side the territory of the United States in connection

with a commercial activity of ... [Argentina] else-

where, and that act causes a direct effect in the

United States” (third clause). By their own pleadings,

the Respondents’ expropriation claims are not ‘“‘based

upon’”’ a commercial activity of Argentina or Tucu-

man, but upon a quintessentially sovereign or gov-

ernmental act—whether denominated seizure, taking,

expropriation, confiscation, nationalization or judicial

intervention. The court of appeals, therefore, miscon-

strued the import and meaning of the commercial

activity exception of the FSIA—the core of the FSIA’s

exception to foreign sovereign immunity—and incor-

rectly decided this important federal question.

Il. THE NINTH CIRCUIT’S HOLDING THAT A FOR-

EIGN STATE MAY BE SUED FOR TORTURE

WHERE THE TORTIOUS ACT AND THE INJURY

OCCURRED ABROAD IS IN DIRECT CONFLICT

WITH AN APPLICABLE DECISION OF THIS COURT.

The court of appeals’ decision in this case also

marks the first time that any United States court has

asserted jurisdiction over a foreign state and one of

its constituent provinces for an intentional tort

(wrongful detention and torture) alleged to have been

committed by persons acting under color of law on

Argentine soil. Not only has the court disregarded

the FSIA’s express provision for immunity from dam-

age actions in the United States for extraterritorial

torts committed by foreign states, but it also ignored

the explicit teaching of this Court only three years

ago in Argentine Republic v. Amerada Hess Shipping

Corp., supra.

Less than a decade ago, in Verlinden B.V. v. Cen-

tral Bank of Nigeria, 461 U.S. 480, 491 (1983), the

Court cautioned that in enacting the FSIA Congress

did not intend to appoint United States courts tc sit

as little international courts of claims, open to all who

seek to litigate a grievance against a foreign state

anywhere in the world. In the instant case, the court

of appeals has turned a deaf ear to this Court’s di-

rective. A suit as the present simply has no place in

the courts of the United States.

Lo)

The court of appeals’ rationale that the Amerada

Hess Court’s holding was inapposite to José Sider-

man’s torture claim because here Argentina impliedly

waived its immunity from suit is bizarre: according

to the court the waiver occurred in 1980—some two

years before the instant suit was filed—when a prov-

incial court in Tucumdn requested that a document

relating to a criminal action against Mr. Siderman be

served on him in Los Angeles. According to the court

of appeals, the State of Argentina thereby deliber-

ately involved United States courts “‘in its efforts tc

torture and persecute’”’ Mr. Siderman. (Mr. Siderman

had left Argentina and became a resident of the

United States in 1976.) The sanction which the court

felt appropriate for such brazenness was to deny to

the State of Argentina the immunity from suit which

Congress and this Court have said Argentina enjoys.

The FSIA is a carefully crafted federal statute, reg-

ulating the jurisdiction of all courts in the United

States in a sensitive area and it is designed to keep

the courts out of the conduct of the foreign relations

of the United States. Through a strict interpretation

of this jurisdictional statute, Argentine Republic v.

Amerada Hess, supra, 488 U.S. at 439-41, application

of the act of state doctrine, Banco Nacional de Cuba

v. Sabbatino, 376 U.S. 398, 428-32 (1964), W. S. Kirk-

patrick v. Environmental Tectonics Corp., 493 U.S.

__., 110 S.Ct. 701, 707 (1990) and treaty interpre-

tation, Zschernig v. Miller, 389 U.S. 429, 437-41

(1968), this Court has time and again instructed fed-

eral and state courts to desist from sitting in judg-

ment on acts performed by foreign states in their

own territories, from examining the ‘‘democracy quo-

tient’”’ of foreign governments, and from exporting

United States law into the territories of foreign states.

The present case is a regrettable example of a fed-

eral appellate court’s unwillingness to heed the teach-

ings of this Court and to assume the role of a

surrogate for the President and the Secretary of State

in the conduct of the United States’ foreign relations.

It should be jurisdictionally irrelevant that the suit

here seeks to subject to the jurisdiction of American

courts acts of a former military regime in Argentina

that was criticized and condemned by the community

of nations for its misdeeds. The Government of Ar-

gentina respectfully submits that it is not a proper

role for American courts to review these acts and to

attempt to grant redress to victims of the regime’s

excesses. The court of appeals’ jurisdictional rulings

in the instant case do not appear to have been mo-

tivated by purely legal considerations, but rather—as

the opinion repeatedly manifests—by the court’s re-

vulsion at what it termed ‘a horrifying portrait of

anti-Semitic, government-sponsored tyranny” painted

in the Sidermans’ pleaungs.

The court of appeals was informed by the

Respondents that the democratically elected govern-

ment of Argentina that succeeded the military regime

in 1983 had, immediately after it assumed the reins

of government, provided domestic redress for human

rights violations and property losses suffered by its

citizens at the hands of its predecessor regime. The

court was also advised by the Respondents that they

had availed themselves of the redress that had been

made available to them under the laws of Argentina

and in the Supreme Court of Argentina. Disregarding

the comity due to the Supreme Court of Argentina,

Se SS Se ee ee.

the court merely adjourned this appeal for almost five

years to await the outcome of Respondents’ claims in

Argentina. When informed that the Respondents’

principal suit in Argentina was dismissed by the

Supreme Court for untimeliness, and that the

Respondents’ claims for the return of property had

been successful only in part, the court proceeded to

hear the Sidermans’ appeal. The court’s erroneous

jurisdictional rulings, and its instructions to the dis-

trict court on remand would, in essence, require com-

prehensive discovery under the guise of jurisdictional

discovery. The court’s actions are plainly at odds with

Congress’ intent in enacting the FSIA and with es-

tablished doctrine that sovereign immunity is an im-

munity from suit rather than a defense on the merits,

and that sovereign immunity is effectively lost if ov-

erbroad discovery is ordered or if a case is erro-

neously permitted to go to trial.

The Court should grant the instant petition for

certiorari and review both the substance of the court

of appeals’ immunity ruling with respect to the ex-

traterritorial tort asserted by the Respondents and

the process employed by the court.

CONCLUSION

For the foregoing reasons, this Court should grant

the petition for certiorari.

Respectfully submitted,

BRUNO A. RISTAU

Counsel for the Petitioners

August 20, 1992.

APPENDIX

APPENDIX A

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

‘

SUSANA SIDERMAN DE BLAKE, JOSE

SIDERMAN, CARLOS SIDERMAN, AND

LEA SIDERMAN, Individuals,

Plaintiffs-Appellants,

Vv.

THE REPUBLIC OF ARGENTINA, a

foreign country; THE PROVINCE OF

TUCUMAN OF THE REPUBLIC OF No. 85-5773

ARGENTINA, a province of a foreign D.C. No.

country; Oscak HoNnorRATo, CV-82-1772-RMT

ABELARDO GARCIA, CARLOS

ROSALES, JUAN ROMAN DIOSQUE,

Victor EpuARDO Mo .inA, GENERAL

Bussi, CAPTAIN ABAS, GENERAL

FORZANO, GENERAL MERLO,

individuals; AND INMOBILIARIA DEL

Nor-Oeste, S.A., an Argentine

Corporation,

Defendants-Appellees.

OPINION

Appeal from the United States District Court

for the Central District of California

Robert M. Takasugi, District Judge, Presiding

Argued and Submitted

June 3, 1991—Pasadena, California

: Filed May 22, 1992

Before: Betty B. Fletcher, William C. Canby, Jr. and

Robert Boochever, Circuit Judges.

COUNSEL

Michael J. Bazyler, Whittier College School of Law, Los

Angeles, California, for the plaintiffs-appellants.

Bruno A. Ristau, Kaplan, Russin & Vecchi, Washington,

D.C., for the defendants-appellees.

Betsy R. Rosenthal, Los Angeles, California, for amicus Anti-

Defamation League of B’Nai B’Rith.

OPINION

FLETCHER, Circuit Judge:

Susana Siderman de Blake and Jose, Lea, and Carlos Sider-

man (collectively, “the Sidermans’”) appeal the dismissal of

their action against the Republic of Argentina and the Argen-

tine Province of Tucuman (collectively, “Argentina’). The

Sidermans’ complaint alleged eighteen causes of action aris-

ing out of the torture of Jose Siderman and the expropnation

of the Sidermans’ property by Argentine military officials.

The district courtdismissed the expropnation claims on the

basis of the act of state doctrine, but granted a default judg-

ment to Jose and Lea Siderman on the torture claims. Argen-

tina then entered its first appearance in the case and moved

for relief from judgment on the ground that the Foreign Sov-

ereign Immunities Act (“FSIA”), 28 U.S.C. §§ 1330, 1602-11,

rendered it immune from the Sidermans’ action. The district

court granted the motion and vacated the default judgment.

The Sidermans now appeal. We reverse and remand for fur-

ther proceedings.

FACTS

The factual record, which consists only of the Sidermans’

complaint and numerous declarations they submitted in sup-

port of their claims, tells a hornfying tale of the violent and

brutal excesses of an anti-Semitic military junta that ruled

Argentina. On March 24, 1976, the Argentine military over-

threw the government of President Maria Estela Peron and

seized the reins of power for itself, installing military leaders

of the central government and the provincial governments of

Argentina.’ That night, ten masked men carrying machine

guns forcibly entered the home of Jose and Lea Siderman,

husband and wife, in Tucuman Province, Argentina. The men,

who were acting under the direction of the military governor

of Tucuman, ransacked the home and locked Lea in the bath-

room. They then blindfolded and shackled 65-year old Jose,

dragged him out of his home, tossed him into a waiting Car,

and drove off to an unknown building. For seven days the

men beat and tortured Jose. Among their tools of torture was

an electric cattle prod, which they used to shock Jose until he

fainted. As they tortured him, the men repeatedly shouted

anti-Semitic epithets, calling him a “Jew Bastard” and a

“Shitty Jew.” They inflicted all of these crueluies upon Jose

Siderman because of his Jewish faith.

At the end of this nightmarish week, his body badly bruised

and his nbs broken, Jose was taken out of the building and

driven to an isolated area, where the masked men tossed him

out of the car. The men told Jose that if he and his family did

not leave Tucuman and Argentina immediately, they would

be killed. On the day of Jose’s release, he and Lea fled to

Buenos Aires in fear for their lives. Their son Carlos followed

shortly thereafter, and the night Carlos left Tucuman, military

authorities ransacked his home. In June 1976, Jose, Lea, and

Carlos left Argentina for the United States, where they joined

Susana Siderman de Blake. She is the daughter of Jose and

Lea and is a United States citizen.

‘A general description of the military coup and its aftermath can be

found in Forti v. Suarez-Mason, 672 F. Supp. 1531, 1536 (N.D. Cal.

1987).

Before the hasty flight from Tucuman to Buenos Aires,

Jose was forced to raise cash by selling at a steep discount

part of his interest in 127,000 acres of land. Pnor to their

departure for the United States, the Sidermans also made

arrangements for someone to oversee their family business,

Inmobiliaria del Nor-Oeste, S.A. (“INOSA”), an Argentine

corporation. Susana Siderman de Blake, Carlos Siderman and

Lea Siderman each owned 33% of INOSA and Jose owned

the remaining one percent. Its assets comprised numerous real

estate holdings including a large hotel in Tucuman, the Hotel

Gran Corona. The Sidermans granted management powers

over INOSA to a certified public accountant in Argentina.

After the Sidermans left Argentina for the United States,

Argentine military officers renewed their persecution of Jose.

They altered real property records in Tucuman to show that

he had owned not 127,000, but 127, acres of land in the prov-

ince. They then initiated a cnminal action against him in

Argentina, claiming that since he owned only 127 acres he

had sold land that did not belong to him. Argentina sought the

assistance of our courts in obtaining jurisdiction over his per-

son, requesting via a letter rogatory that the Los Angeles

Superior Court serve him with documents relating to the

action. The court, unaware of Argentina’s motives, complied

with the request.

Soon thereafter, while he was travelling in Italy, Jose was

arrested pursuant to an extradition request from Argentina to

the Italian government. Argentina charged that Jose had

fraudulently obtained the travel documents enabling him to

leave Argentina in 1976. Jose was not permitted to leave

Cremora, Italy, for seven months, and actually was impris-

oned for 27 days, before an Italian Appeals Court finally held

that Argentina’s extradition request would not be honored, as

it was politically motivated and founded on_ pretextual

charges.

The Argentine military also pursued INOSA with vigor. In

Apnl 1977, INOSA was seized through a sham “judicial

intervention,” a proceeding in which property is put into

receivership. The purported reasons for the intervention were

that INOSA lacked a representative in Argentina and that

INOSA had obtained excessive funds from a Tucuman pro-

vincial bank. Though these reasons were pretexts for perse-

cuting the Sidermans because of their religion and profiting

from their economic success, the Sidermans were unable to

oppose the intervention because Argentine officials had

imprisoned and killed the accountant to whom they had

granted management powers over INOSA. In 1978, the Sider-

mans retained an attorney in Argentina and brought a deriva-

tive action in a Tucuman court in an effort to end the

intervention. The court ordered that the intervention cease,

and the order was upheld by the Supreme Court of Tucuman,

but the order remains unenforced and the intervention has

continued. Argentine military officials and INOSA’s

appointed receivers have extracted funds from INOSA, pur-

chased various assets owned by INOSA at sharply discounted

prices, and diverted INOSA’s profits and revenues to them-

selves.

In 1982, Jose, Lea, and Carlos, who by then had become

permanent residents of the United States, and Susana, a

United States citizen since 1967, turned to federal court for

relief. They filed a complaint asserting eighteen causes of

action based on the torture and harassment of Jose by Argen-

tine officials and the expropriation of their property in Argen-

tina. Named defendants included the Republic of Argentina,

the Province of Tucuman, INOSA, and numerous individual

defendants who participated in the wrongdoing. In December

1982, the Sidermans properly served Argentina and Tucuman

with the Summons and Complaint. The Argentine Embassy

subsequently sought assistance from the U.S. State Depart-

ment, which informed Argentina that it would have to appear

and present any defenses it wished to assert to the district

court, including the defense of sovereign immunity, or risk a

default judgment. The State Department also provided a

directory of lawyer referral services. Despite receiving this

information, Argentina did not enter an appearance, and the

Sidermans filed a motion for default judgment.

On March 12, 1984, the distnct court dismissed the Sider-

mans’ expropriation claims sua sponte on the basis of the act

of state doctrine and ordered a hearing for the Sidermans to

prove up their damages on the torture claims.’ The Sidermans

moved for reconsideration of the court's dismissal of the

expropnation claims. On September 28, 1984, the court

denied the motion for reconsideration and entered a default

judgment on the torture claims, awarding Jose damages and

expenses totalling $2.6 million for his torture claims and

awarding Lea $100,000 for her loss of consortium claim.

The damages award finally elicited a response from Argen-

tina, which filed a motion for relief from judgment on the

ground that it was immune from suit under the FSIA and that

the district court therefore lacked both subject matter and per-

sonal jurisdiction. The United States filed a suggestion of

interest, asking the court to consider the issue of foreign sov-

ereign immunity but indicating no view of the ments. On

March 7, 1985, the district court vacated the default judgment

and dismissed the Sidermans’ action on the ground of Argen-

tina’s immunity under the FSIA.* The Sidermans filed a

timely notice of appeal on April 5, 1985.° We have jurisdic-

tion over the appeal pursuant to 28 U.S.C. § 1291.

*The district court also dismissed the claims against the individual

defendants for lack of personal jurisdiction because they were never

served. The Sidermans are not challenging this ruling on appeal.

*Lea, Carlos, and Susana were found to lack standing to claim damages

for Jose’s torture, and they do not appeal this ruling of the district court.

“The court did not reach the question of personal jurisdiction, nor do the

parties argue the issue on appeal. The FSIA provides that personal juns-

diction exists if subject matter jurisdiction exists and proper service has

been made under the FSIA. See 28 U.S.C. § 1330(b). Nevertheless, the

exercise Of personal junsdiction also must comport with the constitutional

requirement of due process. See Olsen by Sheldon v. Government of Mex-

ico, 729 F.2d 641, 648-51 (9th Cir.), cert. denied, 469 U.S. 917 (1984).

‘Since filing the notice, the Sidermans have sought and obtained nine

six-month stays of the appeal while they pursued an ultimately unsuccess-

DISCUSSION

Until 1952, foreign states and their agencies and instrumen-

talities enjoyed virtually absolute immunity from suit in the

courts of the United States. See Verlinden B.V. v. Central

Bank of Nigeria, 461 U.S. 480, 486 (1983). Chief Justice John

Marshall authored the seminal opinion that considered and

recognized the immunity of a foreign state from suit in a

United States court. In The Schooner Exchange v. M'Faddon,

11 U.S. (7 Cranch) 116 (1812), the Court upheld a French

plea of immunity against an American citizen’s assertion of

title to an armed national vessel of France that had entered the

territorial waters of the United States. In his opinion for the

Court, Chief Justice Marshall first emphasized the “exclusive

and absolute” nature of a nation’s terntorial jurisdiction, any

exception to which could arise only from the consent or

waiver of that nation. 11 U.S. (7 Cranch) at 136. He then

explained:

The world being composed of distinct sovereignties,

possessing equal nghts and equal independence, ...

all sovereigns have consented to a relaxation in prac-

tice, in Cases under certain peculiar circumstances, of

that absolute and complete jurisdiction within their

respective territories which sovereignty confers.

Id. Thus, Chief Justice Marshall announced that the common

practice of nations forms the foundation for the doctrine of

foreign sovereign immunity, while a given state’s agreement

to grant immunity in a particular case is a matter of grace,

comity, and respect for the equality and independence of other

sovereigns. See Verlinden, 461 U.S. at 486. Although The

Schooner Exchange did not announce a rule of absolute sov-

ful suit in Argentina that could have mooted the present case. On October

15, 1990, in light of Argentina’s opposition to the ninth stay, the stay was

vacated and the briefing schedule set.

ereign immunity, in the following 140 years absolute immu-

nity became the norm, principally because the courts

practiced consistent deference to the Executive Branch, which

‘ordinarily requested immunity in all actions against friendly

foreign sovereigns.” /d.

In 1952, however, the Acting Legal Adviser of the State

Department, Jack Tate, sent a letter to the Acting Attorney

General announcing that the State Department was adopting

the “restrictive” principle of foreign sovereign immunity. /d.

at 487 & n.9. Under the restrictive principle, as defined in the

Tate Letter, “the immunity of the sovereign is recognized with

regard to sovereign or public acts (jure imperii) of a state, but

not with respect to private acts (jure gestionis).” 26 Dep't of

State Bull. 984 (1952), reprinted in Alfred Dunhill of London,

Inc. v. Republic of Cuba, 425 U.S. 682, 711 (1976) (Appendix

2). With the issuance of the Tate Letter, the United States

joined the emerging international consensus that private acts

of a sovereign — commercial activities being the primary

example — were not entitled to immunity. While the Tate

Letter altered the Executive Branch’s view of foreign sover-

eign immunity, it did not provide the courts with concrete leg-

islative standards for determining whether to assert

jurisdiction over actions against foreign states. Thus, the

courts continued to defer to the Executive Branch. When the

State Department issued a suggestion of immunity in a partic-

ular case, the court followed it; when the State Department

remained silent, the court relied on prior suggestions for pre-

cedential assistance in determining immunity. Verlinden, 461

U.S. at 487.

With the enactment of the FSIA in 1976, Congress

replaced the regime of deference to Executive suggestion with

a comprehensive legislative framework “governing claims of

immunity in every civil action against a foreign state or its

political subdivisions, agencies, or instrumentalities.” /d. at

488; H.R. Rep. No. 1487, 94th Cong., 2d Sess. 7, reprinted

in 1976 U.S. Code Cong. & Admin. News 6604, 6606 (“A

principal purpose of this bill is to transfer the determination

of sovereign immunity from the executive branch to the judi-

cial branch ....”). In essence, the FSIA codified the restric-

tive theory of sovereign immunity, which had become widely

accepted in international law. See Verlinden, 461 U.S. at 487-

88; H.R. Rep. No. 1487, 94th Cong., 2d Sess. 14, 1976 U.S.

Code Cong. & Admin. News at 6613 (referring to interna-

tional law and Tate Letter). Structurally, the FSIA sets forth

the general rule that foreign states are immune from the juris-

diction of both federal and state courts in the United States,

subject to certain exceptions. 28 U.S.C. §§ 1330(a) & 1604.

A federal court lacks subject matter jurisdiction over a claim

against a foreign state unless the claim falls within an excep-

tion to immunity under the FSIA. See 28 U.S.C. § 1330(a);

Verlinden, 461 U.S. at 489; see also Argentine Republic v.

Amerada Hess Shipping Corp., 488 U.S. 428, 439 (1989)

(FSIA is “sole basis for obtaining jurisdiction over a foreign

State in federal court”).

As a threshold matter, therefore, a court adjudicating a

claim against a foreign state must determine whether the

FSIA provides subject matter jurisdiction over the claim. Liu

v. Republic of China, 892 F.2d 1419, 1424 (9th Cir. 1989),

cert. dismissed, 111 S. Ct. 27 (1990). The existence of subject

matter jurisdiction under the FSIA is a question of law subject

to de novo review. /d. Where, as in the present case, a clam

has been dismissed for lack of jurisdiction, we accept the alle-

gations of the complaint as true. Gerritsen v. de la Madrid

Hurtado, 819 F.2d 1511, 1513 (9th Cir. 1987).

The parties and the district court have agreed that the Sider-

mans’ claims fall into two categories: those relating to the

expropriation of INOSA and those relating to the torture of

Jose Siderman. The district court initially dismissed the

expropriation claims on the basis of the act of state doctrine,

while awarding a default judgment to the Sidermans on the

torture claims. Only later did the court dismiss the torture

claims and the Sidermans’ entire action. Because the two cat-

10a

egones of claims were dismissed at different stages of the

suit, and for different reasons, we separately address each cat-

egory.

I. EXPROPRIATION CLAIMS

In its order of March 12, 1984, the district court dismissed

the expropriation claims on the basis of the act of state doc-

trine; it did not consider whether it had subject matter juns-

diction over the claims pursuant to the FSIA.°® The district

court erred in deciding the act of state issue without first con-

sidering the threshold issue of its subject matter jurisdiction.

Because the federal courts lack junsdiction over a claim

against a foreign state that is immune under the FSIA, “[alJt

the threshold of every action in a district court against a for-

eign state, ... the court must satisfy itself that one of the

[FSIA] exceptions applies.” Verlinden, 461 U.S. at 493-94.

The district court must address this issue “even if the foreign

State does not enter an appearance to assert an immunity

defense.” Jd. at 494 n.20. The court simply cannot proceed

without subject matter jurisdiction.

In contrast to the junsdictional nature of foreign sovereign

immunity under the FSIA, “[t]he act of state doctrine is not

a junsdictional limit on courts.” Liu, 892 F.2d at 1431. The

doctnne reflects the prudential concern that the courts, if they

question the validity of sovereign acts taken by foreign states,

*Argentina contends that the district court held that it lacked jurisdiction

over the expropnation claums when it later granted Argentina’s motion for

relief from judgment and dismissed the Sidermans’ entire action. We find

no evidence in the record to support this contention. At the time that

Argentina filed its motion, the distnct court already had dismissed the

expropriation claims. Those claims were no longer at issue. Moreover, the

parties neither raised nor bnefed the applicability of the FSIA to the

expropriation claims before the district court, and nothing in the court's

order granting Argentina's motion indicates that it considered the issue.

The sole basis for the district court's dismissal of the expropriation claims

was the act of state doctrine.

lla

may be interfering with the conduct of American foreign pol-

icy by the Executive and Congress.’ W.S. Kirkpatrick & Co.

v. Environmental Tectonics Corp., 493 U.S. 400, 404 (1990):

Liu, 892 F.2d at 1431. The act of state doctrine is a principle

or rule of decision that the courts apply in deciding cases

within their jurisdiction. Environmental Tectonics, 493 U.S. at

406, 409; see also West v. Multibanco Comermex, S.A., 807

F.2d 820, 827 (9th Cir.) (describing act of state doctrine as

“combination justiciability and abstention rule”), cert. denied,

482 U.S. 906 (1987). In terms of the Federal Rules of Civil

Procedure, the act of state doctrine does not bar an action for

lack of subject matter jurisdiction, Fed. R. Civ. P. 12(b)(1),

but rather for failure to state a claim upon which relief can be

granted, Fed. R. Civ. P. 12(b)(6). See Timberlane Lumber Co.

v. Bank of America, N.T. & S.A., 549 F.2d 597, 602 (9th Cir.

1976). If a court lacks jurisdiction over a case involving a for-

eign state, the act of state doctrine never comes into play.’

’The doctrine derives from Banco Nacional de Cuba v. Sabbatino, 376

U.S. 398 (1964), in which the Court declined to adjudicate the validity of

expropniations by the Cuban government. The precise holding of

Sabbatino was that:

the Judicial Branch will not examine the validity of a taking of

property within its own terntory by a foreign sovereign govern-

ment, extant and recognized by this country at the time of suit,

in the absence of a treaty or other unambiguous agreement

regarding controlling legal principles, even if the complaint

alleges that the taking violates customary international law.

Id. at 428; see also Restatement (Third) of the Foreign Relations Law of

the United States § 443(1) & Comment b (1987). As the numerous qualifi-

cations in Sabbatino’s holding indicate, the act of state doctrine is “supple,

flexible, ad hoc.” Republic of the Philippines v. Marcos, 862 F.2d 1355,

1361 (9th Cir. 1988) (en banc), cert. denied, 490 U.S. 1035 (1989).

*We note that in /niernational Association of Machinists and Aerospace

Workers (IAM) v. Organization of Petroleum Exporting Countries

(OPEC), 649 F.2d 1354 (9th Cir. 1981), cert. denied, 454 U.S. 1163

(1982), a panel of our court applied the act of state doctrine without first

resolving the threshold issue of immunity and jurisdiction under the FSIA.

However, the OPEC decision was rendered prior to the Supreme Court's

12a

“Because sovereign immunity is jurisdictional and the act of

State doctrine is not, we must consider sovereign immunity

before reaching the act of state doctrine.” De Sanchez v.

Banco Central De Nicaragua, 770 F.2d 1385, 1389 (Sth Cir.

1985); see Liu, 892 F.2d at 1424 (first determining whether

subject matter jurisdiction existed under FSIA before address-

ing district court's act of state ruling).

Since the district court did not consider jurisdiction under

the FSIA with regard to the expropriation claims, it made no

findings of fact concerning jurisdiction. The record consists of

the complaint and numerous declarations submitted by the

Sidermans in support of their contention that certain of the

FSIA exceptions apply, but includes no pleadings or evidence

from Argentina, which had not yet entered an appearance in

the case when the expropriation claims were dismissed.

Argentina contends that the Sidermans’ complaint and decla-

rations fail to demonstrate that the expropnation claims fall

within an FSIA exception, and asks us to affirm the district

court’s dismissal on that ground. We therefore review the

record to determine whether the Sidermans have sustained

their initial burden of alleging jurisdiction under the FSIA. If

the allegations in the Sidermans’ complaint, which we must

accept as true, and the uncontroverted evidence presented by

the Sidermans bring the claims within an FSIA exception, the

burden then shifts to Argentina to prove that any relevant

exceptions do not apply. “Once the plaintiff offers evidence

that an FSIA exception to immunity applies, the party claim-

ing immunity bears the burden of proving by a preponderance

of the evidence that the exception does not apply.”

Schoenberg v. Exportadora de Sal, S.A. de C.V., 930 F.2d

opinions in both Verlinden, which clearly establishes that the question of

whether there is junsdiction under the FSIA must be answered “[a]t the

threshold of every action in distnct court against a foreign state,” 461 U.S.

at 493-94, and Environmental Tectonics, which clarified the nature of the

act of state doctrine. We therefore address the jurisdictional issue first.

13a

777, 779 (9th Cir. 1991) (quoting Joseph v. Office of the Con-

sulate Gen'l of Nigeria, 830 F.2d 1018, 1021 (9th Cir. 1987),

cert. denied, 485 U.S. 905 (1988)). If the Sidermans success-

fully have alleged that an exception to immunity under the

FSIA applies to their claims, we must remand the claims in

order to afford Argentina the opportunity to rebut the Sider-

man’s evidence and sustain its burden of proof before the dis-

trict court.

The Sidermans argue that two of the FSIA exceptions

apply to their expropriation claims, the commercial activity

exception, 28 U.S.C. § 1605(a)(2), and the international tak-

ings exception, 28 U.S.C. § 1605(a)(3). We consider each in

turn.

A. Commercial Activity Exception

The commercial activity exception provides that a foreign

State is not immune from jurisdiction where

"Although the Sidermans have submitted declarations and evidence

beyond the pleadings, allegations in a complaint can themselves be suffi-

cient to require a response from the foreign state defendant before the

complaint can be dismissed. In Meadows v. Dominican Republic, 817 F.2d

517, 522-23 (9th Cir.), cert. denied, 484 U.S. 976 (1987), we held that, at

least with regard to the commercial activity exception to the FSIA, the dis-

tnict court should observe the foilowing procedure:

Where, as here, the plaintiff alleges in his complaint that his

claum is based on a foreign state's strictly commercial acts, the

defendant must establish a prima facie case that it is a sovereign

State and thattheplainuff's clairn arises out of a public act. This

proof establishes a presumption that the foreign state is protected

by immunity. The plaintiff then has the burden of going forward

with the evidence by offering proof that one of the FSIA exemp-

tions applies. Once the plaintiff has presented this evidence, the

defendant must prove its entitlement to immunity by a preponder-

ance of the evidence.

Thus, even if the Sidermans had presented nothing more than the allega-

tions in their complaint, Meadows indicates that it would have been

incumbent upon Argentina to respond to those allegations.

l4a

the action is based [1] upon a commercial activity

carried on in the United States by the foreign state,

or [2] upon an act performed in the United States in

connection with a commercial activity of the foreign

state elsewhere; or [3] upon an act outside the tern-

tory of the United States in connection with a com-

mercial activity of the foreign state elsewhere and

that act causes a direct effect in the United States

28 U.S.C. § 1605(a)(2). As the bracketed numbering indi-

cates, section 1605(a)(2) contains three clauses. See Schoen-

berg, 930 F.2d at 779-80. We find that the Sidermans have

presented sufficient allegations and evidence to demonstrate

— at least at this stage of the proceedings — that their expro-

priation claims fall within the first and second clauses and

may also fall within the third.

In order to come within the first clause of the exception,

a claim against a foreign state must be “based upon a com-

mercial activity carried on in the United States by the foreign

state.” Commercial activity “means either a regular course of

commercial conduct or a particular commercial transaction or

act.” 28 U.S.C. § 1603(d). In determining whether an act or

activity is commercial, we must look to its nature, not its pur-

pose. 28 U.S.C. § 1603(d); Schoenberg, 930 F.2d at 780.

Though activities that customarily are carned on for profit are

certainly commercial, Schoenberg, 930 F.2d at 780, an activ-

ity need not be motivated by profit to be commercial, Joseph,

830 F.2d at 1024. The central question is “whether the activity

is of a kind in which a private party might engage.” /d. In

light of the allegations and evidence submitted by the Sider-

mans, we have no doubt that the Sidermans’ claims are based

on commercial activity being conducted by Argentina. The

activities that form the basis for the claims — Argentina's

continuing management of INOSA, its operation of the Hotel

Gran Corona, and its receipt of profits from the company’s

15a

Operations — are clearly activities “of a kind in which a pri-

vate party might engage.”

The more difficult question is whether this commercial

activity is being “carried on in the United States.” 28 U.S.C.

§ 1605(a)(2). As defined by the FSIA, “ ‘commercial activity

carried on in the United States by a foreign state’ means com-

mercial activity carried on by such state and having substan-

tial contact with the United States.” 28 U.S.C. § 1603(e).

Under this definition, the forum state need not engage in com-

mercial activity in the United States on a regular basis.

Shapiro v. Republic of Bolivia, 930 F.2d 1013, 1018 (2d Cir.

1991). Instead, the critical inquiry is whether there is “‘a nexus

between the defendant’s commercial activity in the United

States and the plaintiff's grievance.” America West Airlines,

Inc. v. GPA Group, Ltd., 877 F.2d 793, 796 (9th Cir. 1989).

The Sidermans have alleged and put forward evidence

that Argentina advertises the Hotel Gran Corona in the United

States and solicits American guests through its U.S. agent,

*°Argentina’s initial seizure of INOSA through a “judicial intervention,”

which the Sidermans allege to have been nothing more than a sham for

expropriation, sumilarly may constitute commercial activity. In

L’Europeenne de Banque v. La Republica de Venezuela, 700 F. Supp. 114

(S.D.N.Y. 1988), a consortium of banks had entered into a deposit lending

agreement with a Venezuelan bank, pursuant to which the consortium

deposited $30 million. Venezuela subsequently declared an “intervention”

in the bank's affairs on the ground that the bank was either in danger of

failing or had violated banking laws. Venezuela granted all management

powers to a vice president of Venezuela’s Deposit Guaranty and Bank

Protection Fund, and eventually the bank was ordered liquidated. In the

consorium’s subsequent action against Venezuela, the court found that

Venezuela's intervention and operation of the bank constituted commer-

cial activity. 700 F. Supp. at 119-20. On the present record, we cannot

determine whether a judicial intervention in Argentina is an action that a

Private party can perform. The Sidermans are free to pursue this argument

on remand. We note that the commercial activity exception does not

require that every act alleged be commercial in nature. See Foremost-

McKesson, Inc. v. Islamic Republic of Iran, 905 F.2d 438, 450 (D.C. Cir.

1990).

l6a

Aerolinas Argentinas, the national airline of Argentina. They

have alleged further that numerous Americans have stayed at

the Hotel, which accents all the major American credit cards,

including Mastercard, Visa, and American Express. On the

present record, we believe that these allegations are sufficient

to demonstrate that the commercial activities Argentina is

conducting through INOSA have “substantial contact with the

United States.” The Sidermans’ allegations also satisfy the

nexus requirement established in America West. Several of

the Sidermans’ expropriation claims are directed toward the

stream of revenue and benefits that Argentina is receiving

through its operation of the Hotel. Argentina’s continuing

receipt of the profits and benefits that nghtfully belong to the

Sidermans — including those derived from U.S. sources —

are some of the “specific acts that form the basis of the suit.”

Id. at 797 (quoting Joseph, 830 F.2d at 1023) (emphasis omit-

ted). We conclude that the Sidermans’ allegations and evi-

dence bring their claims within clause one of the commercial

activity exception.

Clause two of the exception applies to actions based “upon

an act performed in the United States in connection with a

commercial activity of the foreign state elsewhere.” 28 U.S.C.

§ 1605(a)(2). As the few cases to address this clause have

noted, it requires a “maternal connection ... between the

plainuff’s cause of action and the act performed in the United

States.” Stena Rederi AB. v. Comision de Contratos del Com-

ite Ejecutivo General, 923 F.2d 380, 388 (Sth Cir. 1991)

(emphasis in onginal). A plaintiff must either demonstrate a

causal connection between a sovereign’s actions in the United

States and those abroad giving rise to the plaintiff's claims, or

the sovereign’s acts in the United States must themselves rep-

resent an element in the plaintiff's cause of action. Gilson v.

Republic of Ireland, 682 F.2d 1022, 1027 n.22 (D.C. Cir.

1982); see also H.R. Rep. No. 1487, 94th Cong., 2d Sess. 19,

reprinted in 1976 U.S.C.C.A.N. 6613, 6618.

The allegations and evidence set forth by the Sidermans

that Argentina solicits guests for the Hotel Gran Corona in the

United States and presumably accepts payments for those res-

ervations in this country, and that as a result numerous Ameri-

cans stay at the Hotel, suffice to meet this test. Because of

Argentina's acts in the United States — the solicitation and

acceptance of reservations — Americans spend money at the

Hotel Gran Corona, money which the Sidermans claim right-

fully belongs to them. The Sidermans’ causes of action for

conversion, constructive fraud, intentional interference with

business relationships and breach of fiduciary duty directly

relate, therefore, to Argentina’s acts in this country. Argentina

undertakes those acts, furthermore, in connection with com-

mercial activity elsewhere, mainly its operation of the Hotel.

The Sidermans’ claims thus fali squarely within clause two of

the commercial activity exception.

For the Sidermans’ expropriation claims to satisfy clause

three of the exception, the claims must be based “upon an act

outside the territory of the United States in connection with a

commercial activity of the foreign state elsewhere and that act

[must] cause[ ] a direct effect in the United States.” 28 U.S.C.

§ 1605(a)(2). The Sidermans base their claims on Argentina's

seizure and continuing operation of INOSA, both of which

constitute acts that Argentina has performed outside United

States terntory. It is equally clear that they have been per-

formed in connection with the commercial activities of oper-

ating the Hotel Gran Corona and managing INOSA’s real

estate investments in Argentina. These activities are, as noted

above, “of a kind in which a private party might engage.”

Joseph, 830 F.2d at 1024. The dispositive element in clause

three for purposes of this case, therefore, is the requirement

that the acts cause a direct effect in the United States.

Under the direct effect requirement, the “foreign sover-

eign’s activities must cause an effect in the United States that

is substantial and foreseeable in order to abrogate sovereign

immunity.” America West, 877 F.2d at 799. For example, in

America West, an American airline sued an Irish national air-

line for damage sustained by an aircraft engine on which the

l&8a

Irish airline had performed faulty maintenance work. Finding

that it was not foreseeable that the maintenance work per-

formed in Ireland on an engine then owned by a Netherlahds

Antilles company would have an effect in the United States,

we held that the direct effect requirement was unsatisfied. /d.

at 800. The “purely fortuitous” fact that the plaintiff whose

plane subsequently was fitted out with the engine was an

American corporation was insufficient to create a direct

effect. Id., see also Security Pacific Nat'l Bank v. Derderian,

872 F.2d 281, 286 (9th Cir. 1989); Martin v. Republic of S.

Africa, 836 F.2d 91, 94-95 (2d Cir. 1987) (finding no direct

effect in United States where African-American was denied

medical treatment in South Africa).

As a general matter, therefore, “[mJere financial loss” suf-

fered by a person, whether individual or corporate, in the

United States is not, in itself, sufficient to constitute a “direct

effect.” America West, 877 F.2d at 799-800. However, in

cases where a plaintiff's claim is for breach of a contract pro-

viding that payment or performance must be made in the

United States, the “direct effect” requirement has been

deemed satisfied." For example, in Meadows v. Dominican

Republic, 817 F.2d 517 (9th Cir. 1987), we considered an

action brought by two U.S. residents to recover a loan com-

mission they earned by obtaining a loan on behalf of a foreign

"These cases reflect the general rule that “a direct effect occurs at the

locus of the injury directly resulung from the sovereign defendant's

wrongful acts.” Restatement (Third) of the Foreign Relations Law of the

United States § 453 Reporter's Note 5 (1987). Thus, two Ninth Circuit

cases cited by Argentina have held that the estate or family of a decedent

who died abroad could not establish the required direct effect, because

their injuries were only indirectly related to the direct injury suffered by

the decedent. See Australian Gov't Aircraft Factories v. Lynne, 743 F.2d

672, 674-75 (9th Cir. 1984), cert. denied, 469 U.S. 1214 (1985) (American

pilot died when plane crashed in Indonesia); Berkovitz v. Islamic Republic

of Iran, 735 F.2d 329, 332 (9th Cir.), cert. denied, 469 U.S. 1035 (1984)

(American killed by revolutionary forces in Iran). These cases are distin-

guishable from the Sidermans’ action, which asserts direct injunes to the

Sidermans as the owners and shareholders of INOSA.

19a

government. Under the loan agreement, the commission was

to be paid in the United States — through the plaintiffs’ bank

— and we found this to be a sufficiently direct effect to per-

mit jurisdiction under clause three. 817 F.2d at 523. See also

Gregorian v. Izvestia, 871 F.2d 1515, 1527 (9th Cir. 1989)

(discussing similar cases); L’Europeenne de Banque v. La

Republica de Venezuela, 700 F. Supp. 114, 121 (S.D.N.Y.

1988) (extending rule to encompass foreign plaintiff).

As an owner and shareholder of INOSA, each of the

Sidermans is entitled to a share of the profits earned by the

corporation. If INOSA’s articles of incorporation or by-laws

(or the equivalent corporate documents under Argentine law)

require INOSA to pay those dividends at the shareholder's

place of residence, the United States, we believe in light of

Meadows that the direct effect requirement would be satisfied.

While the record before us does not reveal whether this is the

case, it would be premature to hold that the Sidermans have

failed to establish a direct effect. Since the Sidermans have

alleged jurisdiction under clauses one and two, and we are

remanding the expropriation claims on those grounds, on

remand the Sidermans also may pursue jurisdiction under

clause three and seek to cure any jurisdictional defects by

amending their complaint or submitting additional evidence.

See Trentacosta v. Frontier Pac. Aircraft Indus., 813 F.2d

1553, 1561-62 (9th Cir. 1987); In re Complaint of McLinn,

744 F.2d 677, 685 (9th Cir. 1984).

B. International Takings Exception

The Sidermans argue that their claims also fall within the

international takings exception to the FSIA’s rule of immu-

nity. That exception provides that a foreign state is not

immune in an action

in which rights in property taken in violation of

international law are in issue and [1] that property or

any property exchanged for such property is present

’

20a

in the United States in connection with a commercial

activity carried on in the United States by the foreign

state; or [2] that property or any property exchanged

for such property is owned or operated by an agency

Or instrumentality of the foreign state and that

agency or instrumentality is engaged in a commer-

cial activity in the United States ....

28 U.S.C. § 1605(a)(3). Though few courts have had the

Opportunity to cosisider the international takings exception, it

is clear that Jose, Lea, and Carlos Siderman cannot assert a

claim that comes within this exception. In Chuidian v. Philip-

pine Nat'l Bank, 912 F.2d 1095, 1105 (9th Cir. 1990), we held

that the exception does not apply where the plaintiff is a citi-

zen of the defendant country at the time of the expropriation,

because “[e]xpropriation by a sovereign state of the property

of its own nationals does not implicate settled principles of

international law.” See also De Sanchez v. Banco Central de

Nicaragua, 770 F.2d 1385, 1395 (Sth Cir. 1985). However,

Susana Siderman de Blake is eligible to invoke the interna-

tional takings exception, and the Sidermans’ allegations and

evidence bring her claims within clause two of that exception.

Under that clause, the property at issue must have been

taken in violation of international law. At the junsdictional

Stage, we need not decide whether the taking actually violated

international law; as long as a “claim is substantial and non-

frivolous, it provides a sufficient basis for the exercise of our

jurisdiction.” West v. Multibanco Comermex, S.A., 807 F.2d

820, 826 (9th Cir.), cert. denied, 482 U.S. 906 (1987). In

West, we described three requisites under international law for

a valid taking. First, “[vJalid expropriations must always serve

a public purpose.” 807 F.2d at 831. Second, “aliens [must] not

be discriminated against or singled out for regulation by the

state.” Jd. at 832. Finally, “[a]n otherwise valid taking is ille-

gal without the payment of just compensation.” /d. These

well-established principles track the Restatement of Foreign

Relations Law, which provides:

Z2la

A state is responsible under international law for

injury resulting from:

(1) a taking by the state of the property of a

national of another state that

(a) is not for a public purpose, or

(b) is discriminatory, or

pensation ....

Restatement (Third) of the Foreign Relations Law of the

United States § 712 (1987) [hereinafter ‘“Restatement’]. The

legislative history of the FSIA reveals a similar understanding

of what constitutes a taking in violation of international law.

See H.R. Rep. No. 1487, 94th Cong., 2d Sess. 19-20,

reprinted in 1976 U.S. Code Cong. & Admin. News 6604,

6618 (taking violates international law if it is done “without

payment of the prompt adequate and effective compensation

required by international law” or is “arbitrary or discrimina-

tory in nature”). If a taking violates any one of the aforemen-

tioned proscriptions, it violates international law.

Susana Siderman de Blake's claim that Argentina vio-

lated the international law of expropriation is substantial and

non-frivolous. The complaint alleges that Argentina officials

seized INOSA for their personal profit and not for any public

purpose. The complaint also alleges that Argentina seized

INOSA because the Siderman family is Jewish — a discrimi-

natory motivation based on ethnicity. See Restatement § 712

Comment f (noting that “taking that singles out aliens gener-

ally, or aliens of a particular nationality, or particular aliens,

would violate international law”). Finally, none of the Sider-

mans has received any compensation for the seizure, let alone

just compensation. As in West, we have no difficulty conclud-

ing that the Sidermans’ complaint contains “substantial and

22a

non-frivolous” aliegations that INOSA was taken in violation

of international law.

Beyond establishing that property has been taken in vio-

lation of international law, Susan Siderman de Blake must

demonstrate that the expropriated property, or property

exchanged for it, is owned or operated by an agency or instru-

mentality of Argentina and that the agency or instrumentality

is engaged in commercial activity in the United States. The

Sidermans’ allegations establish that INOSA itself has

become an agency or instrumentality of Argentina. As defined

by the FSIA, an “agency or instrumentality”

means any entity—

(1) which is a separate legal person, corporate or

otherwise, and

(2) which is an organ of a foreign state or political

subdivision thereof, ... and

(3) which is neither a citizen of a State of the

United States . . . nor created under the laws of any

third country.

28 U.S.C. § 1603(b). As an Argentine corporation, INOSA

satisfies the first and third elements of the above definition,

and the Sidermans’ basic allegation that Argentina has expro-

priated INOSA suffices as an allegation that INOSA is now

an “organ” of Argentina or Tucuman. The Sidermans’ allega-

tions thus satisfy the “agency or instrumentality” definition.

The final requirement under clause two — that the agency or

instrumentality must be engaged in a commercial activity in

the United States — is also met. The Sidermans’ allegations

concerning Argentina’s solicitation and entertainment of

American guests at the Hotel Gran Corona and the hotel's

acceptance of American credit cards and traveler’s checks are

sufficient at this stage of the proceedings to show that Argen-

23a

tina is engaged in a commercial activity in the United States.

The Sidermans’ allegations bring Susana Siderman de Blake’s

expropriation claims within clause two of the international

takings exception.

We hold that the Sidermans’ complaint and declarations

allege sufficient facts to bring their expropriation claims

within both the commercial activity and international takings

exceptions to the FSIA’s grant of foreign sovereign immunity.

We emphasize the preliminary nature of our holding; follow-

ing further development of the factual record on remand, the

district court ultimately must determine whether the FSIA

exceptions do or do not apply to the expropriation claims.

While the Sidermans have sustained their initial burden of

alleging applicable exceptions to the FSIA., Argentina will

have the opportunity on remand to challenge the evidence

presented by the Sidermans and to present its own. Under the

procedures our circuit has developed for considering jurisdic-

tion under the FSIA, Argentina now bears the burden of prov-

ing by a preponderance of the evidence that none of the FSIA

exceptions applies to the Sidermans’ claims. Schoenberg, 930

F.2d at 779. To the extent that the jurisdictional facts are dis-

puted on remand, the parties should be allowed to conduct

discovery for the limited purpose of establishing jurisdictional

facts before the claims can be dismissed. See America West.

877 F.2d at 801 (““[W]here pertinent facts bearing on the ques-

tion of jurisdiction are in dispute, discovery should be

allowed.”); see also Santos v. Compagnie Nationale Air

France, 934 F.2d 890, 892 n.2 (7th Cir. 1991): Filus v. LOT

Polish Airlines, 907 F.2d 1328, 1332 (2d Cir. 1990).

Because we are remanding to the district court for a more

complete investigation of the jurisdictional basis for the Sider-

mans’ expropriation claims, we vacate the district court’s

judgment dismissing those claims on the basis of the act of

State doctrine. If the district court determines that it does have

jurisdiction over the expropriation claims, Argentina can

raise, and the district court can reconsider, the act of state

]

24a

doctrine as a defense to those claims. The district court erred

in applying that doctrine before Argentina had even entered

an appearance in the case. “The burden of proving acts of

State rests on the party asserting the applicability of the

doctrine.” Liu, 892 F.2d at 1432; see also Republic of the

Philippines v. Marcos, 862 F.2d 1355, 1361 (9th Cir. 1988)

(en banc), cert. denied, 490 U.S. 1035 (1989). “At a mini-

mum, this burden requires that a party offer some evidence

that the government acted in its sovereign capacity and some

indication of the depth and nature of the government's

interest.” Liu, 892 F.2d at 1432. Because the district court

acted sua sponte in dismissing the expropriation claims,

Argentina has offered no such evidence of an act of state.”

Il. TORTURE CLAIMS

The question of Argentina’s immunity from the Sidermans’

torture claims is squarely presented, without the procedural

complications surrounding the district court’s treatment of the

expropriation claims. The district court dismissed the torture

claims on the ground that they fell within no exception to

immunity under the FSIA."” In defending the district court’s

"*We also note that since the time of the district court’s ruling, both the

Supreme Court and our circuit have provided more extensive guidance on

the factors the district court should consider in deciding whether it 1s

appropriate to apply the act of state doctrine in a given case. See, e.g., W.S.

Kirkpatrick & Co. v. Environmental Tectonics Corp., 493 U.S. 400

(1990); Liu, 892 F.2d at 1431-34; Marcos, 862 F.2d at 1360-61.

When the district court granted the initial default judgment in favor of

Jose and Lea Siderman on the torture claims, it relied on the Alien Tort

Statute, which provides the federal courts with jurisdiction over “any civil

action by an alien for a tort only, committed in violation of the law of

nations or a treaty of the United States.” 28 U.S.C. § 1350. When the dis-

trict court later granted Argentina’s motion for relief from the default

judgment, it held that the Alien Tort Statute did not provide an exception

to foreign sovereign immunity and that no exception in the FSIA encom-

passed the Sidermans’ torture claims. The Supreme Court since has held

that the Alien Tort Statute does not provide jurisdiction over suits against

is)

decision on appeal, Argentina argues that the Sidermans’

claims are foreclosed by the Supreme Court’s opinion in

Argentine Republic v. Amerada Hess Shipping Corp., 488

U.S. 428 (1989). Since Amerada Hess represents the Court’s

most extensive treatment of the FSIA and its exceptions to

immunity, we begin with a discussion of the case before turn-

ing to the Sidermans’ arguments about why the case does not

preclude their torture claims.

Amerada Hess involved a Liberian oil tanker that was

attacked by Argentine military aircraft during the Falklands/

Malvinas War between Great Britain and Argentina. The

tanker’s owner and its charterer each brought suit against

Argentina, but the district court dismissed their actions for

lack of subject matter jurisdiction under the FSIA. The court

of appeals reversed, finding that subject matter jurisdiction

existed under the Alien Tort Statute. The Supreme Court,

reversing the court of appeals, held that the FSIA provides

“the sole basis for obtaining jurisdiction over a foreign state

in our courts,” 488 U.S. at 434, and fourid that none of the

exceptions to the general FSIA rule of immunity encompassed

the plaintiffs’ claims. Jd. at 439.

In Amerada Hess, the plaintiffs relied primarily on the non-

commercial tort exception to the FSIA’s grant of immunity.

That exception eliminates immunity in cases

in which money damages are sought against a for-

eign state for personal injury or death, or damage to

or loss of property, occurring in the United States

and caused by the tortious act or omission of that

foreign states; the FSIA is the sole basis for jurisdiction over such actions.

Argentine Republic v. Amerada Hess Shipping Corp., 488 U.S. 428, 434-

38 (1989). In light of Amerada Hess, and because the FSIA links immu-

nity to subject matter jurisdiction, the district court’s determination that no

FSIA exception applied to the torture claims necessarily constituted a

determination that the court lacked subject matter jurisdiction.

foreign state or of any official or employee of that

foreign state while acting within the scope of his

office or employment ....

28 U.S.C. § 1605(a)(5). The Court, limiting this exception to

cases in which the damage to or loss of property occurred

within the territorial jurisdiction of the United States, held that

it did not encompass the plaintiffs’ claims. 488 U.S. at 439-

41. Argentina has devoted the bulk of its argument in the

present case to a discussion of the noncommercial tort excep-

tion and Amerada Hess’s holding that the exception does not

encompass tortious activity perpetrated outside the territorial

jurisdiction of the United States. If the Sidermans were rely-

ing on section 1605(a)(5), their claims clearly would be

barred under Amerada Hess. However, none of the three argu-

ments they raise rests on that exception. Instead, the Sider-

mans contend that Argentina is precluded from asserting the

defense of sovereign immunity by the intemational law prin-

ciple of jus cogens, and by the FSIA’s existing treaty (section

1604) and implied waiver (section 1605 (a)(1)) exceptions.

We consider each of these arguments in turn.

A. Jus Cogens

The Sidermans contend that Argentina does not enjoy

sovereign immunity with respect to its violation of the jus

cogens norm of international law condemning official torture.“

While we agree with the Sidermans that official acts of torture

of the sort they allege Argentina to have committed constitute

a jus cogens violation, we conclude that Amerada Hess

forecloses their attempt to posit a basis for jurisdiction not

expressly countenanced by the FSIA.

As defined in the Vienna Convention on the Law of Trea-

ties, a jus cogens norm, also known as a “peremptory norm”

“The term “official torture” is intended to encompass acts of torture

performed by or under the direction of government officials.

27a

of international law, “is a norm accepted and recognized by

the international community of states as a whole as a norm

from which no derogation is permitted and which can be mod-

ified only by a subsequent norm of general international law

having the same character.” Vienna Convention on the Law

of Treaties, art. 53, May 23, 1969, 1155 U.N.T.S. 332. 8

I.L.M. 679 [hereinafter “Vienna Convention”]; see also

Restatement § 102 Reporter’s Note 6. Jus cogens is related to

customary international law (the direct descendant of the law

of nations), which the Restatement defines as the “general and

consistent practice of states followed by them from a sense of

legal obligation.” Restatement § 102(2). Courts ascertain cus-

tomary international law “by consulting the works of jurists,

wniting professedly on public law; or by the general usage and

practice of nations; or by judicial decisions recognizing and

enforcing that law.” United States v. Smith, 18 U.S. (5

Wheat.) 153, 160-61 (1820) (Story, J.); see also The Paquete

Habana, 175 U.S. 677, 700 (1900) (in ascertaining and

administering customary international law, courts should

resort “to the customs and usages of civilized nations, and, as

evidence of these, to the works of jurists and commentators”);

Filartiga v. Pena-Irala, 630 F.2d 876, 880-81 (2d Cir. 1980).

Courts seeking to determine whether a norm of customary

international law has attained the status of jus cogens look to

the same sources, but must also determine whether the inter-

national community recognizes the norm as one “from which

no derogation is permitted.” Committee of U.S. Citizens Liv-

ing in Nicaragua v. Reagan, 859 F.2d 929, 940 (D.C. Cir.

1988) [hereinafter “CUSCLIN”] (quoting Vienna Convention,

art. 53). In CUSCLIN, the only reported federal decision to

give extended treatment to jus cogens, the court described jus

cogens as an elite subset of the norms recognized as custom-

ary international law. /d.

While jus cogens and customary international law are

related, they differ in one important respect. Customary inter-

national law, like international law defined by treaties and

other international agreements, rests on the consent of states.

28a

A state that persistently objects to a norm of customary inter-

national law that other states accept is not bound by that

norm, see Restatement § 102 Comment d, just as a State that

is not party to an international agreement is not bound by the

terms of that agreement. International agreements and cus-

tomary international law create norms known as jus disposi-

tivum, the category of international law that “consists of

norms derived from the consent of states” and that is founded

‘on the self-interest of the participating states.” Klein, A The-

ory for the Application of the Customary International Law of

Human Rights by Domestic Courts, 13 Yale J. Int'l L. 332,

351 (1988) [hereinafter “Human Rights in Domestic Courts’).

Jus dispositivum binds only “those states consenting to be

govemed by it.” /d.

In contrast, jus cogens “embraces customary laws consid-

ered binding on all nations,” id. at 350-51, and “is derived

from values taken to be fundamental by the international com-

munity, rather than from the fortuitous or self-interested

choices of nations,” id. at 351. Whereas customary interna-

tional law derives solely from the consent of states, the funda-

mental and universal norms constituting jus cogens transcend

such consent, as exemplified by the theones underlying the

judgments of the Nuremberg tribunals following World War

Il. See Note, The Nuremberg Legacy: An Unfulfilled Promise,

63 S. Cal. L. Rev. 833, 868 (1990) [herinafter “Nuremberg

Legacy”’}], Belsky, Merva & Roht-Amiaza, /mplied Waiver

Under the FSIA: A Proposed Exception to Immunity for Vio-

lations of Peremptory Norms of International Law, 77 Calif.

L. Rev. 365, 385-86 (1989) [hereinafter “/rmplied Waiver’).

The legitimacy of the Nuremberg prosecutions rested not on

the consent of the Axis Powers and individual defendants, but

on the nature of the acts they committed: acts that the laws of

all civilized nations define as criminal. See Nuremberg Leg-

acy, supra, at 862-67. The universal and fundamental nghts

of human beings identified by Nuremberg — mghts againsi

genocide, enslavement, and other inhumane acts, see id. at

847 (discussing Nuremberg Charter) — are the direct ances-

29a

tors of the universal and fundamental norms recognized as jus

cogens. In the words of the International Court of Justice.

these norms, which include “principles and rules concerning

the basic rights of the human person,” are the concem of all

States, “they are obligations erga omnes.” The Barcelona

Traction, Light & Power Co. (Belgium v. Spain), 1970 1.C.J.

Because jus cogens norms do not depend solely on the con-

sent of states for their binding force, they “enjoy the highest

Status within international law.” CUSCLIN, 859 F.2d at 940.

For example, a treaty that contravenes jus cogens is consid-

ered under international law to be void ab initio. See Vienna

Convention, art. 53; Restatement § 102 Comment k. Indeed.

the supremacy of jus cogens extends over all rules of interna-

tional law; norms that have attained the status of jus cogens

“prevail over and invalidate international agreements and

other rules of international law in conflict with them.”

Restatement § 102 Comment k. A jus cogens norm is subject

to modification or derogation only by a subsequent jus cogens

norm. /d.

The Sidermans claim that the prohibition against official

torture has attained the status of a jus cogens norm. There is

no doubt that the prohibition against official torture is a norm

of customary international law, as the Second Circuit recog-

nized more than ten years ago in the landmark case of

Filartiga v. Pena-lrala, 630 F.2d 876 (2d Cir. 1980). Dr.

Filartiga and his daughter, citizens of Paraguay, brought suit

against Paraguayan officials who had tortured Dr. Filartiga’s

son to death. They alleged jurisdiction under the Alien Tort

Statute, which grants the district courts “original jurisdiction

of any civil action by an alien for a tort only, committed in

violation of the law of nations or a treaty of the United

States.” 28 U.S.C. § 1350. Dr. Filartiga claimed that the

defendants’ torture of his son, perpetrated under color of offi-

cial authority, violated a norm of customary international law

prohibiting official torture, and the court agreed. Judge Kauf-

30a

man, wnting for the court, explained that “there are few, if

any, issues in international law today on which opinion seems

to be so united as the limitations on a state's power to torture

persons held in its custody.” 630 F.2d at 881. Judge Kaufman

catalogued the evidence in support of this view, citing several

declarations of the United Nations General Assembly and

human rights conventions prohibiting torture,” modem

municipal law to the same effect, and the works of jurists, and

finally concluded “that official torture is now prohibited by

the law of nations.” /d. at 884.

Other authorities have also recognized that official torture

is prohibited by customary international law. In Forti v.

Suarez-Mason, 672 F. Supp. 1531, 1541 (N.D. Cal. 1987), a

Suit predicated on atrocities committed by the same Argentine

military government alleged to be responsible for the torture

of Jose Siderman, the district court held that “official torture

constitutes a cognizable violation of the law of nations,” and

described the prohibition against official torture as “universal,

obligatory, and definable.” Similarly, in Tel-Oren v. Libyan

Arab Republic, 726 F.2d 774, 781 (D.C. Cir. 1984) (opinion

of Edwards, J.), cert. denied, 470 U.S. 1003 (1985), which

involved an action against the Palestine Liberation Organiza-

tion for its acts of terrorism, Judge Edwards identified torture

as a violation of customary international law. Judge Bork,

although raising considerable opposition to the application of

customary international law in U.S. courts, see id. at 801-19

‘Sjudge Kaufman cited the Universal Declaration of Human Rights,

G.A. Res. 217A(III), 3 U.N. GAOR Supp. (No. 16), U.N. Doc. A/810

(1948); Declarauon on the Protection of All Persons from Being Subjected

to Torture, G.A. Res. 3452, 30 U.N. GAOR Supp. (No. 34) at 91, U.N.

Doc. A/1034 (1975); Amencan Convention on Human Rights, Nov. 22,

1969, 36 O.A.S.T.S. 1, O.A.S. Official Records OEA/Ser. 4 v/II 23, doc

21, rev. 2 (1975); International Covenant on Civil and Political Rights,

Annex to G.A. Res. 2200(XXI)a, 21 U.N. GAOR Supp. (No. 16), U.N.

Doc. A/6316 (1966); European Convention for the Protection of Human

Rights and Fundamental Freedoms, Art. 3, Council of Europe, Europ. T.S.

No. 5, 213 U.N.T.S. 211 (1968).

3la

(opinion of Bork, J.), at the same time conceded that the inter-

national law prohibition against torture is not disputed. /d. at

820. The Restatement of Foreign Relations also holds to the

view that customary international law prohibits official tor-

ture. Restatement § 702(d). Finally, the world now has an

international agreement focused specifically on the prohibi-

tion against torture: The Convention Against Torture and

Other Cruel, Inhuman or Degrading Treatment or Punish-

ment, 39 U.N. GAOR Supp. (No. 51), 23 I.L.M. 1027 (1984)

{hereinafter “Torture Convention”), which entered into force

on June 26, 1987. The United States signed the Torture Con-

vention in April 1988, the United States Senate gave its

advice and consent in October 1988, see 136 Cong. Rec.

$17486-92 (daily ed. October 27, 1990), and it now awaits the

President's filing of the instrument of ratification with the

Secretary-General of the United Nations.”*

In light of the unanimous view of these authoritative

voices, it would be unthinkable to conclude other than that

"*The Torture Convention defines torture as

any act by which severe pain or suffering, whether physical or

mental, is intentionally inflicted on a person for such purposes as

obtaining from him or a third person information or a confession,

punishing him for an act he or a third person has committed or

is suspected of having committed, or inumidating or coercing

him or a third person, or for any reason based on discrimination

of any kind, when such pain or suffering is inflicted by or at the

instigation of or with the consent or acquiescence of a public offi-

Cial or other person acting in an official Capacity.

Torture Convention, art. 1. The agreement also calls on each state party

to take measures to prevent torture within its termtory, id., art. 2, and to

“ensure that all acts of torture are offenses under its criminal law,” id., art.

4. States parties must either prosecute or extradite persons charged with

torture. /d., arts. 5-8. Each state party also must ensure that torture victims

or their decedents “obiain{ } redress and ha[ve] an enforceable nght to fair

and adequate compensation including the means for as full rehabilitation

as possible.” /d., art. 14(1). Finally, the Torture Convention creates a

“Committee against Torture,” which is responsible for receiving and

reviewing states’ compliance with the agreement. /d., arts. 17-24.

32a

acts of official torture violate customary intemational law.

And while not all customary international law carries with it

the force of a jus cogens norm, the prohibition against official

torture has attained that status. In CUSCLIN, 859 F.2d at 941-

42, the D.C. Circuit announced that torture is one of a handful

of acts that constitute violations of jus cogens. In Filartiga,

though the court was not explicitly considering jus cogens,

Judge Kaufman's survey of the universal condemnation of

torture provides much support for the view that torture vio-

lates jus cogens. In Judge Kaufman's words, “[a]mong the

rights universally proclaimed by all nations, as we have noted,

is the right to be free of physical torture.” 630 F.2d at 890.

Supporting this case law is the Restatement, which recognizes

the prohibition against official torture as one of only a few jus

cogens norms. Restatement § 702 Comment n (also identify-

ing jus cogens norms prohibiting genocide, slavery, murder or

Causing disappearance of individuals, prolonged arbitrary

detention, and systematic racial discrimination). Finally, there

is widespread agreement among scholars that the prohibition

against official torture has achieved the status of a jus cogens

norm. See, e.g., Implied Waiver, supra, at 389, 393-94; Parker

& Neylon, Jus Cogens: Compelling the Law of Human

Rights, 12 Hastings Intl & Comp. L. Rev. 411, 437-39

(1989); Human Rights in Domestic Courts, supra, at 354

n.111; Randall, Universal Jurisdiction Under International

Law, 66 Tex. L. Rev. 785, 830 (1988).

Given this extraordinary consensus, we conclude that the

right to be free from official torture is fundamental and uni-

versal, a right deserving of the highest status under interna-

tional law, a norm of jus cogens. The crack of the whip, the

clamp of the thumb screw, the crush of the iron maiden, and,

in these more efficient modem times, the shock of the electric

cattle prod are forms of torture that the international order will

not tolerate. To subject a person to such horrors is to commit

one of the most egregious violations of the personal security

and dignity of a human being. That states engage in official

torture cannot be doubted, but all states believe it is wrong,

33a

all that engage in torture deny it, and no state claims a sover-

eign nght to torture its own citizens. See Filartiga, 630 F.2d

at 884 (noting that no contemporary state asserts “a right to

torture its Own or another nation’s citizens”); id. at n.15 (“The

fact that the prohibition against torture is often honored in the

breach does not diminish its binding effect as a norm of inter-

national law.”). Under international law, any state that

engages in official torture violates Jus cogens.

The question in the present case is what flows from the

Sidermans’ allegation that Argentina tortured Jose Siderman

and thereby violated a jus cogens norm. The Sidermans con-

tend that when a foreign state's act violates Jus cogens, the

State is not entitled to sovereign immunity with respect to that

act. This argument begins from the principle that jus cogens

norms “enjoy the highest status within international law,”

CUSCLIN, 859 F.2d at 940, and thus “prevail over and invali-

date ... other rules of international law in conflict with

them,” Restatement § 102 Comment k. The Sidermans argue

that since sovereign immunity itself is a principle of interna-

tional law, it is trumped by jus cogens. In short, they argue

that when a state violates jus cogens, the cloak of immunity

provided by international law falls away, leaving the state

amenable to suit.

As a matter of international law, the Sidermans’ argument

carmes much force. We previously have recognized that

“[s]overeign immunity is a principle of international law.”

International Ass'n of Machinists & Aerospace Workers

(IAM) v. Organization of Petroleum Exporting Countries

(OPEC), 649 F.2d 1354, 1359 (9th Cir. 1981), cert. denied,

454 U.S. 1163 (1982). Chief Justice Marshall identified the

foundation of the doctrine of sovereign immunity as the

“perfect equality and absolute independence of sovereigns,” a

State of affairs making it improper for one state to subject

another to its jurisdiction. The Schooner Exchange, 11 U.S. (7

Cranch) at 137. As described by one scholar of international

law, the doctrine of foreign sovereign immunity “is rooted in

34a

two bases of international law, the notion of sovereignty and

the notion of the equality of sovereigns.” Riesenfeld,

Sovereign Immunity in Perspective, 19 Vand. J. Transnat’l L.

1 (1986). When Jack Tate, writing on behalf of the State

Department, issued his famous letter in 1952, the United

States was recognizing the trend in international law toward

adoption of the restrictive principle of foreign sovereign

immunity, under which states receive immunity for their sov-

ereign acts (jure imperii) but not their private acts (jure

gestionis). With the enactment of the FSIA, Congress explic-

itly adopted the restrictive principle, identifying its origin in

international law. 28 U.S.C. § 1602 (findings and declaration

of purpose); see also H.R. Rep. No. 1487, 94th Cong., 2d

Sess. 7, reprinted in 1976 U.S. Code Cong. & Admin. News

6604, 6605 (FSIA “would codify the so-called ‘restrictive’

principle of sovereign immunity, as presently recognized in

international law”); id. at 8, 1976 U.S. Code Cong & Admin.

News at 6606 (“Sovereign immunity is a doctrine of intema-

tional law under which domestic courts, in appropriate cases,

relinquish jurisdiction over a foreign state.”); id. at 9, 1976

U.S. Code Cong. & Admin. News at 6608 (‘“[S]Jovereign

immunity is a question of international law to be determined

by the courts.”’).

The Sidermans posit that because sovereign immunity

derives from international law, jus cogens supersedes it. “Jus

cogens norms represent the fundamental duties incident to

international life. They are an essential component of the

modem law definition of sovereignty.” Jmplied Waiver,

supra, at 392. International law does not recognize an act that

violates jus Cogens aS a sovereign act. A State's violation of

the jus cogens norm prohibiting official torture therefore

would not be entitled to the immunity afforded by intermna-

tional law.

Unfortunately, we do not write on a clean slate. We

deal not only with customary international law, but with an

affirmative Act of Congress, the FSIA. We must interpret the

35a

FSIA through the prism of Amerada Hess. Nothing in the text

or legislative history of the FSIA explicitly addresses the

effect violations of jus cogens might have on the FSIA’s cloak

of immunity. Argentina contends that the Supreme Court's

Statement in Amerada Hess that the FSIA grants immunity “in

those cases involving alleged violations of international law

that do not come within one of the FSIA’s exceptions,” 488

U.S. at 436, precludes the Sidermans’ reliance on jus cogens

in this case. Clearly, the FSIA does not specifically provide

for an exception to sovereign immunity based on jus cogens.

In Amerada Hess, the Court had no occasion to consider acts

of torture or other violations of the peremptory norms of inter-

national law, and such violations admittedly differ in kind

from transgressions of jus dispositivum, the norms derived

from international agreements or customary international law

with which the Amerada Hess Court dealt. However, the

Court was so emphatic in its pronouncement “that immunity

is granted in those cases involving alleged violations of inter-

national law that do not come within one of the FSIA’s

exceptions,” Amerada Hess, 488 U.S. at 436, and so specific

in its formulation and method of approach, id. at 439

(“Having determined that the FSIA provides the sole basis for

obtaining jurisdiction over a foreign state in federal court, we

turn to whether any of the exceptions enumerated in the Act

apply here’’), that we conclude that if violations of jus cogens

committed outside the United States are to be exceptions to

immunity, Congress must make them so. The fact that there

has been a violation of jus cogens does not confer jurisdiction

under the FSIA.

B. Existing Treaty Exception

The FSIA section establishing the general rule of foreign

sovereign immunity in United States courts, 28 U.S.C.

§ 1604, provides that the rule of immunity is “[sJubject to

existing international agreements to which the United States

is a party at the time of enactment of” the FSIA. In Amerada

Hess, the plaintiffs argued that Argentina’s immunity was

36a

Subjeci to the Geneva Convention on the High Seas and the

Pan American Maritime Neutrality Convention and that those

treaties created an exception to FSIA immunity under section

1604. The Court rejected the argument, adopting a narrow

view of section 1604:

This exception applies when international agree-

ments expressly conflict with the immunity provi-

sions of the FSIA, hardly the circumstances in this

case. [The Geneva and Pan American Conventions]

only set forth substantive rules of conduct and state

that compensation shall be paid for certain wrongs.

They do not create private nights of action for for-

eign corporations to recover compensation from for-

eign states in United States courts.

488 U.S. at 442 (internal quotations, alterations, and citations

omitted). Thus, the Court erected a serious obstacle to claims

that, by subscnbing to a treaty or other international agree-

ment, a defendant state loses its immunity under the FSIA.

The Sidermans argue that Argentina’s immunity under the

FSIA is “subject to” the Universal Declaration of Human

Rights, G.A. Res. 217A(III), U.N. Doc. A/810 (1948), and the

United Nations Charter. Neither of these documents can sup-

port the weight the Sidermans place on them. The Universal

Declaration of Human Rights is a resolution of the General

Assembly of the United Nations. As such, it is a powerful and

authoritative statement of the customary international law of

human rights. See Filartiga v. Pena-Irala, 630 F.2d 876, 882-

84 (2d Cir. 1980). However, it is not an “international

agreement” within the meaning of section 1604. While the

meaning of that term may not be restricted to treaties that the

United States has ratified pursuant to Article II, Section 2 of

the Constitution, see Restatement, Intro. Note to Part III, at

146, the legislative history of the FSIA reveals that Congress

intended the FSIA to be subject to enforceable agreements

between the United States and other foreign states or interna-

37a

tional organizations. The House Report refers to several

examples of “international agreements,” including the NATO

Status of Forces Agreement, and treaties of friendship, com-

merce and navigation. H.R. Rep. No. 1487, 94th Cong., 2d

Sess. 17-18, reprinted in 1976 U.S. Code Cong. & Admin.

News 6604, 6616. These international agreements, which are

intended by the parties to be legally binding under intermna-

tional law, are categorically different from the Universal Dec-

laration of Human Rights, which creates legal obligations

only insofar as it represents evidence of Customary intema-

tional law. We see no indication in the FSIA or its legislative

history that Congress intended the term “international

agreements" to include non-binding resolutions of the General

Assembly of the United Nations.

The United Nations Charter, in contrast to the Universal

Declaration, is a treaty of the United States. However, the

Sidermans have been unable to point out any language in the

Charter regarding individual remedies or compensation for

violations of its substantive rules of conduct. In contrast, the

treaties that were at issue in Amerada Hess were quite specific

about the nghts to compensation of merchant ships in time of

war. See Amerada Hess, 488 U.S. at 442 n.10. For example,

the Pan American Maritime Neutrality Convention provides

that belligerents must indemnify any damage they cause to

neutral merchant ships. /d. Despite these specific remedial

provisions, the Court was unwilling to hold that the treaties

expressly conflicted with the immunity created by the FSIA,

and thus found section 1604 inapplicable. We cannot, consis-

tently with Amerada Hess, accept the Sidermans’ argument

that the U.N. Charter expressly conflicts with the FSIA when

the Charter does not even discuss compensation or individual

remedies.

We hold that the Sidermans have failed to identify an

international agreement to which the United States is a party

that “expressly conflict{s] with the immunity provisions of the

38a

FSIA.” Amerada Hess, 488 U.S. at 442. The existing treaty

exception of section 1604 does not apply to the torture claims.

C. Implied Waiver Exception

[13] The FSIA provides that “[a] foreign state shall not be

immune from the jurisdiction of courts of the United States or

of the States in any case ... in which the foreign state has

waived its immunity either explicitly or by implication, not-

withstanding any withdrawal of the waiver which the foreign

State may purport to effect except in accordance with the

terms of the waiver.” 28 U.S.C. § 1605(a)(1). The Sidermans

contend that Argentina availed itself of our courts in its pur-

suit of Jose Siderman and, in doing so, implicitly waived its

immunity defense with respect to their claims for torture and

persecution. They assert that after the elder Siderman fled to

this country, Argentina commenced malicious cnminal pro-

ceedings against him in Argentina, and requested the assis-

tance of the California state courts in obtaining jurisdiction

over his person. The California courts, unaware of Argenti-

na’s true intentions, complied by effecting service of process.

Argentina did not controvert the Sidermans’ implicit

waiver argument in the district court.” As is true with respect

Argentina's sole contention below with respect to the Sidermans’ tor-

ture claums was that the FSIA’s noncommercial tor exception, section

1605(a)(5), precludes an ummunity defense only in cases where a sover-

eign has engaged in tortious activity within the terntonal junsdiction of

the United States. We so held in McKeel v. Islamic Republic of Iran, 722

F.2d 582 (9th Cir. 1983), cert. denied, 469 U.S. 880 (1984), where we

stated that “nothing in the legislative history [of section 1605(a)(5)] sug-

gests that Congress intended to assert jurisdiction over foreign states for

events occurnng wholly within their own terntory.” /d. at 588; see also

Berkoviiz v. Islamic Republic of Iran, 735 F.2d 329, 331 (9th Cir. 1984),

cert. denied, 469 U.S. 1035 (1984) (“Subsection (a)(5) requires ‘personal

injury, or death . . . occurring in the United States . . ."’). The Supreme

Court confirmed our position in Amerada Hess. 488 U.S. at 439 (“Section

1605(a)(5) is limited by its terms ... to those cases in which the damage

to or loss of property occurs in the United States.” (emphasis in orginal)).

The Sidermans have never relied upon section 1605(a)(5), however, in

asserting that junsdiction exists over their claims for torture.

39a

to the commercial activity and international takings clauses on

which the Sidermans base jurisdiction for their expropriation

claims, then, the only material before us on the subject of

waiver is that presented by the Sidermans. We conclude that

their allegations and evidence suffice to bring their claims for

torture within section 1605(a)(1) of the FSIA. On remand,

Argentina will have an opportunity to rebut the Sidermans’

evidence. At this stage of the proceedings, however, we are

unable to say that the Sidermans’ arguments as to implied

waiver are devoid of merit.

The FSIA’s waiver exception “is narrowly construed.”

Joseph v. Office of Consulate General of Nigeria, 830 F.2d

1018, 1022 (9th Cir. 1987), cert. denied, 485 U.S. 905 (1988).

The House Report accompanying the passage of the FSIA

gives three examples of an implied waiver:

With respect to implicit waivers, the courts have

found such waivers in cases where a foreign state

has agreed to arbitration in another country or where

a foreign state has agreed that the law of a particular

country should govern a contract. An implicit waiver

would also include a situation where a foreign state

has filed a responsive pleading in an action without

raising the defense of sovereign immunity.

H.R. Rep. No. 1487, 94th Cong., 2d Sess. 18 (1976).

reprinted in 1976 U.S.C.C.A.N. 6604, 6617. The House

Report does not purport to provide an exclusive list of the cir.

cumstances giving rise to implied waivers, however, and we

have not construed it in this fashion. Thus, while we stated in

Joseph that implied waivers will “ordinarily [be] found” only

in the three situations mentioned in the legislative history, 830

F.2d at 1022 (citing Frolova v. Union of Soviet Socialist

Republics, 761 F.2d 370, 377 (7th Cir. 1985)), we went

beyond those examples to establish the more general proposi-

tion that where a written agreement entered into by a foreign

sovereign “contemplates adjudication of a dispute by the

United States courts,” we will find the sovereign to have

waived its immunity. Joseph, 830 F.2d at 1023.

We concluded in Joseph that the Federal Republic of Nige-

ria, by signing a lease agreement which stated that the prevail-

ing party in any court dispute arising out of its terms would

be entitled to attorney’s fees, had rendered itself susceptible

to suit in our courts. The lease did not provide specifically for

the adjudication of disputes in the United States. Nor did it

State that United States law would govern such actions. Thus,

it did not fall into one of the categories mentioned by the

House Report. However, because the lease at issue concerned

a house in San Francisco which Nigeria had rented as a con-

Sulate, we surmised that Nigeria must have had United States

courts in mind when it agreed to its adjudicatory provisions.

And since Nigeria could reasonably be said to have contem-

plated “participation of the United States courts in [its]

disputes” with its landlord, 830 F.2d at 1023, we found it to

have waived its immunity from a suit brought by that land-

lord.

Other courts have similarly focused on the question

whether a sovereign defendant entering into a written agree-

ment envisioned the involvement of United States courts in its

dealings with another party. In Marine Int'l Nominees Estab-

lishment v. Republic of Guinea, 693 F.2d 1094 (D.C. Cir.

1982), cert. denied, 464 U.S. 815 (1983), for example, the

D.C. Circuit declined to find a waiver of immunity where the

treaty on which the plainuff premised its waiver argument

“concededly did not foresee a role for the United States courts

.... Id. at 1104. Similarly, in Frolova, the Seventh Circuit

held that the former Soviet Union had not waived its immu-

nity in signing various international agreements where it

could not have “anticipated . . . that American courts would

be the means by which the documents’ provisions would be

enforced.” And in Liberian Eastern Timber Corp. v. Republic

of Liberia, 650 F.Supp. 73, 76 (S.D.N.Y. 1986), aff'd, 854

F.2d 1314 (2d Cir. 1987), Judge Weinfeld found that Liberia

4la

had waived its immunity from the enforcement of an arbitra-

tion award by entering into a treaty which “clearly contem-

plated the involvement of the courts of any of the Contracting

States, including the United States as a Signatory to the Con-

vention, in enforcing the pecuniary obligations of the award.”

Cf. Amerada Hess, 488 U.S. at 442-32 (finding no basis for

concluding that Argentina had waived its immunity, explicitly

or implicitly, “by signing an international agreement that con-

tains no mention of a waiver of immunity to suit in United

States courts or even the availability of a cause of action in

the United States.”).

Thus, the essential inquiry in written agreement cases is

whether a sovereign contemplated the involvement of United

States courts in the affair in issue. Here, we confront a Situa-

tion where Argentina apparently not only envisioned United

States court participation in its persecution of the Sidermans,

but by its actions deliberately implicated our courts in that

persecution. The Sidermans have presented evidence that a

year after Jose, Lea and Carlos Siderman fled Argentina in

fear for their lives, the Argentine military authorities altered

the Tucuman provincial land records to show that they had

held title only to 127, as opposed to 127,000, acres of land in

the Province, and that in their last-minute efforts to raise cash

they had thus sold property which did not belong to them. The

Tucuman Public Prosecutor then initiated criminal proceed-

ings against Jose Siderman for this “fraudulent” sale, and had

the Tucuman Supreme Court enlist the aid of our courts, via

a letter rogatory, in serving him with process." The letter rog-

atory, dated May 11, 1980, informed the Presiding Judge of

the Los Angeles Superior Court that criminal proceedings

"*The Sidermans have presented material indicating that after the mili-

lary coup in 1976, the Argentine courts were transformed into puppets of

the military regime. In addition to presenting general evidence of this

transformation, the Sidermans have alleged that those judges who stood in

the way of the authorities’ efforts to expropriate their properties were mys-

teriously removed from office while other, more “loyal”, judges were used

to legitimize the activities of the new government.

42a

were pending against Jose Siderman in the Supreme Court of

Tucuman. It requested the court’s assistance in serving papers

on Siderman, who was living in Los Angeles at the time.

While the court complied with the request, the record is not

clear as to the subsequent course of the lawsuit. In their

papers in support of jurisdiction, the Sidermans suggest that

the Argentine military authorities sought to obtain Jose’s

return to Argentina in order to further torture and perhaps

even to kill him.”

Shortly after the Los Angeles Superior Court received

Argentina's letter rogatory, indeed, Argentina requested that

the Italian authorities arrest Siderman, who had travelled to

Italy for a wedding, and extradite him to Argentina for having

allegedly forged certain travel documents. Siderman was

detained in Italy for seven months, twenty-seven days of

which time was spent in prison, before an Italian court dis-

missed the charges against him as pretextual and denied

Argentina's extradition request.

We conclude that the Sidermans have presented evidence

sufficient to support a finding that Argentina has implicitly

waived its sovereign immunity with respect to their claims for

torture. The evidence indicates that Argentina deliberately

involved United States courts in its efforts to persecute Jose

Siderman. If Argentina has engaged our courts in the very

course of activity for which the Sidermans seek redress, it has

waived its immunity as to that redress.

As noted, Argentina will have an opportunity to rebut

the Siderman’s evidence on remand. We do not suggest that

"In its letter to the United States Department of State declaring immu-

nity from the Sidermans’ suit, dated February 16, 1983, Argentina stated

that Jose Siderman’s presence before the Supreme-Court of Tucuman was

desired in relation to the property fraud charges. The letter noted Argenti-

na’s request of assistance from the Superior Court of Los Angeles in the

matter.

43a

because Argentina may have implicitly waived its immunity

in this suit, any foreign sovereign which takes actions against

a private party in our courts necessarily opens the way to all

manner of suit by that party. To support a finding of implied

waiver, there must exist a direct connection between the sov-

ereign’s activities in our courts and the plaintiff's claims for

relief. Only because the Sidermans have presented evidence

indicating that Argentina’s invocation of United States judi-

cial authority was part and parcel of its efforts to torture and

persecute Jose Siderman have they advanced a sufficient basis

for invoking that same authority with respect to their causes

of action for torture. It will be up to the district court on

remand to determine whether the requisite direct connection

exists. If it does, Argentina will be subject to the court's junis-

diction for the torture claims.

The district court erred in dismissing the Sidermans’ torture

Claims.

CONCLUSION

The Sidermans’ complaint and the evidence they have pres-

ented in support of their allegations paint a hornfying portrait

of anti-Semitic, government-sponsored tyranny. The record

that so far has been developed in this case reveals no ground

for shielding Argentina from the Sidermans’ claims that their

family business was stolen from them by the military junta

that took over the Argentine government in 1976. It further

Suggests that Argentina has implicitly waived its sovereign

immunity with respect to the Sidermans’ claims for torture.

We REVERSE and REMAND for further proceedings con-

sistent with this opinion.

44a

APPENDIX B

UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

No. CV 82-1772-RMT(MCx)

SUSANA SIDERMAN DE BLAKE: JOSE SIDERMAN:

CARLOS SIDERMAN: and LEA SIDERMAN,, individuals,

Plaintiffs,

VS.

THE REPUBLIC OF ARGENTINA, a foreign country;

THE PROVINCE OF TUCUMAN OF THE REPUBLIC OF

ARGENTINA, a province of a foreign country; OSCAR

HONORATO; ABELARDO GARCIA; CARLOS RASALES;

VICTOR EDUARDO MOLINA; GENERAL DOMINGO

BUSSI; CAPTAIN ABAS; GENERAL LINO MONTIEL

FORZANO; GENERAL ANTONIO MERLO; individuals;

INMOBILIARIA DEL NOR-OESTE, S.A., an Argentine

corporation,

Defendants.

ORDER RE: SUBJECT MATTER JURISDICTION AND

PERSONAL JURISDICTION

This matter having come before the court for hearing

on March 12, 1984 on the motion by plaintiff for default

judgment, and this court having considered the pleadings

and other documents filed herein and argument of counsel,

and having found that this court has subject matter ju-

risdiction with respect to the claims for torture but that

the act of state doctrine applies to the claims regarding

the taking of property and having further found that there

45a

is personal jurisdiction over the Republic of Argentina and

the Province of Tucuman but there is no personal juris-

diction over the other defendants.

IT IS ORDERED that a further hearing shall be-held at

2:00 p.m. on April 2, 1984 on prove-up on damages with

respect to plaintiffs’ claims for torture as against

defendants Republic of Argentina and Province of Tucu-

man and that plaintiffs shall file their brief. supported by

evidence, no later than March 22, 1984.

Dated: MAR 14 1984. 1984.

/s/ Robert M. Takasugi

ROBERT M. TAKASUGI

United States District Judge

46a

APPENDIX C

No. CV 82-1772-RMT(MCx)

Sl A SIDERMAN DE BLAKE; JOSE SIDERMAN;

CARLOS SIDERMAN;: and LEA SIDERMAN; individuals,

Plaintiffs,

VS.

THE REPUBLIC OF ARGENTINA, a foreign country;

THE PROVINCE OF TUCUMAN OF THE REPUBLIC OF

ARGENTINA, a province of a foreign country; OSCAR

HONORATO; ABELARDO GARCIA; CARLOS ROSALES;

VICTOR EDUARDO MOLINA; GENERAL DOMINGO

BUSSI; CAPTAIN ABAS; GENERAL LINO MONTIEL

FORZANO; GENERAL ANTONIO MERLO; individuals;

INMOBILIARIA DEL NOR-OESTE, S.A., an Argentine

corporation,

Defendants.

JUDGMENT BY DEFAULT

FILED

SEP 28 1984

CLERK, U.S. DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

BY DEPUTY

In this action, defendants Republic of Argentina and

Province of Tucuman of the Republic of Argentina were

duly served with summons and complaint according to law.

It is noted that on March 28, 1983, a letter sent to the

court from the United States Department of State was

filed herein. Said letter indicates that the Embassy of the

47a

Argentine Republic transmitted a diplomatic note to the

State Department claiming sovereign immunity in this ac-

tion. The State Department informed the Embassy that

said department was not in a position to comment on this

action and advised the Embassy that any defenses and

claims must be addressed to this court. However.

defendants Republic of Argentina and Province of Tucu-

man of the Republic of Argentina have failed to appear

and their defaults have been duly entered.

By order filed on March 14, 1984, this court found that

pursuant to 28 U.S.C. §1350 it has subject matter juris-

diction over the claims for torture but that the act of state

doctrine applies to and bars the claims regarding the tak-

ing of property. This court further found that persona]

jurisdiction exists as to defendants Republic of Argentina

and Province of Tucuman of the Republic of Argentina

but does not exist as to the other defendants herein.

The present matters before this court are plaintiffs’ mo-

tion for reconsideration regarding this court’s order on the

applicability of the act of state doctrine and plaintiffs’

motion for default judgment.

RECONSIDERATION MOTION

In their motion for reconsideration, plaintiffs advance

the position taken by the State Department in Bernstein

v. N.V. Nederlandsche-Amerikaanasche, 210 F.2d 375 (2nd

Cir. 1954), and Kalamazoo Spice Extraction Co. v. The

Provisional Military Government of Socialist Ethiopia, 729

F.2d 422 (6th Cir. 1984) as the reasons why the act of

state doctrine should not bar their claims for wrongful

taking of their properties.

The act of state doctrine is prudential in nature, de-

signed to avoid judicial action in sensitive areas of foreign

policy. International Association of Machinists v. OPEC.

649 F.2d 1354 (9th Cir. 1981). It “derives from the ju-

diciary’s concern for its possible interference with the con-

48a

duct of foreign affairs by the political branches of the

government.”’ Timberlane Lumber Co. v. Bank of America,

549 F.2d 597, 605 (9th Cir. 1976).

In Banco Nationale de Cuba v. Sabbatino, 376 U.S. 398

(1964) the Supreme court held that “‘the Judicial Branch

will not examine the validity of a taking of property within |

its own territory by a foreign sovereign government, ex-

tant and recognized by this country at the time of suit,

in the absence of a treaty or other unambiguous agreement

regarding controlling legal principles, even if the complaint

alleges that the taking violates customary international

law.” 376 U.S. at 428.

Plaintiffs contend that Bernstein, supra, provides an ex-

ception to the Sabbatino rule and that said exception ap-

plies to them.

Bernstein, supra, is clearly distinguishable from the in-

stant case and even supports the application of the act of

state doctrine herein. In Bernstein, the State Department

issued a letter indicating that judicial intervention would

not interfere with the foreign policy of the Executive and

took an express position to relieve the court from any

restraint on the exercise of jurisdiction. The Second Circuit

Court of Appeals relied on that express position of the

Executive in removing any restraints to the court’s ex-

ercise of jurisdiction. It is unclear whether Bernstein af-

fords an exception to the rule laid down in Sabbatino.' In

‘The viability of the ‘‘Bernstein exception’’ is questionable in light

of the Supreme Court’s ruling in First National City Bank v. Banco

Nacional de Cuba, 406 U.S. 759 (1972). Justice Rehnquist, in a plurality

opinion in which two other justices joined, recognized a ‘Bernstein

exception’”’ to the act of state doctrine where the Executive expresses

a position in the case urging that the doctrine not be applied. Justice

Douglas concurred in the result and Justice Powell concurred in the

judgment, both finding reasons why the act of state doctrine should

not apply but both not relying on a “Bernstein exception.’’ Justice

Brennan’s dissenting opinion, in which three other justices joined,

49a

Sabbatino, the Supreme Court recognized the existence of

the Bernstein case and, expressly, did not ‘‘pass upon the

so-called Bernstein exception,’ 376 U.S. at 420, because

in Sabbatino, letters from the State Department were is-

sued indicating the Department’s wish not to make any

statement bearing on the litigation. Even if a “Bernstein

exception” could be interpreted consistently with Sabba-

tino, it would be a very limited exception as the Court in

Sabbatino stated that

“Even if the State Department has proclaimed

the impropriety of the expropriation, the stamp

of approval of its view by a judicial tribunal, how-

ever impartial, might increase any affront and

the judicial decision might occur at a time, almost

always well after the taking, when such an im-

pact would be contrary to our national interest.”’

376 U.S. at 432.

Assuming the viability of the “Bernstein exception,” it

does not apply here. In the instant action, the State De-

partment has not taken the position it took in Bernstein.

In fact, the position taken by the State Department here

is very similar to its position taken in Sabbatino. The letter

sent to this court by the State Department filed herein

on March 28, 1983 states that “[t]he Embassy [of the

Argentine Republic] was informed that under the laws of

the United States the Department of State is not in a

position to comment on the present suit.’ The letter to

the court expresses no further position.

Plaintiffs also argue that an exception to the act of state

doctrine recognized in Kalamazoo Spice Extraction Co. v.

strongly objected to recognizing an exception to the doctrine by the

judiciary solely upon the desires of the Executive and stated that the

‘Executive Branch, however extensive its powers in the area of foreign

affairs, cannot by simple stipulation change a political question into a

cognizable claim.”’ 406 U.S. at 789.

50a

The Provisional Military Government of Socialist Ethiopia,

supra, should be applied here.-In Kalamazoo, the Sixth

Circuit Court of Appeals recognized a “‘treaty exception’”’

to the act of state doctrine. This exception is derived from

the language in Sabbatino, supra, quoted above, whereby

the doctrine applies “‘in the absence of a treaty or other

unambiguous agreement regarding controlling legal prin-

ciples. . .’’ 376 U.S. at 428. The Kalamazoo court held that

the treaty in existence between the United States and

Ethiopia, the 1953 Treaty of Amity and Economic Rela-

tions, provided a controlling legal standard and, thus, jus-

tified a “treaty exception’”’ to the act of state doctrine.

The court further stated there was no danger that adju-

dication would interfere with the Executive as it had in-

tervened therein through the Departments of State,

Treasury, and Justice who had filed a joint amicus brief

urging the treaty exception to the doctrine. 729 F.2d at

427.

Herein, plaintiffs cite no treaty or other agreement be-

tween the United States and the Republic of Argentina.

As such there is no controlling legal standards to justify

an exception to the act of state doctrine.

This court therefore concludes that the act of state doc-

trine applies to and bars the claims herein regarding the

taking of property.

FACTS

Plaintiffs have established by evidence satisfactory to

this court the following underlying facts:

Plaintiffs Jose and Lea Siderman are husband and wife;

plaintiffs Carlos Siderman and Susana Siderman de Blake

are their children. All of the plaintiffs were born in the

. Republic of Argentina and formerly resided in the Province

of Tucuman. Plaintiffs Jose, Lea and Carlos are presently

permanent residents of the United States. Plaintiff Susana

came to the United States in 1964 and became a citizen

of the United States in 1967.

In March of 1976, while Jose, Lea and Carlos were still

residing in Tucuman, the Argentine President was re-

moved by military coup and a military junta was installed

to govern the country. On the night of the coup, men from

the military came to the home of Jose and Lea, assaulted

both of them, locked Lea in a room and forcibly took Jose

away. Jose was kept for seven days during which time he

was physically tortured and threatened that he and his

family would be killed if they did not immediately leave

Argentina. The day following Jose’s release, Jose and Lea

fled to Buenos Aires. Shortly thereafter, Carlos left Tu-

cuman and went to Buenos Aires. Prior to leaving for

Buenos Aires, Jose sold some of the 127,000 acres of land

that he owned in Tucuman. In June 1976, Jose, Lea and

Carlos left Buenos Aires and came to the United States.

Prior to leaving Argentina, the Siderman family gave

their power of attorney to an accountant who, thereafter,

was imprisoned and has apparently disappeared. The Sid-

erman family then gave their pawer of attorney to their

Argentine attorney.

In April 1977, the military, through an intervention,

seized the Inmobiliaria del Nor-Oeste, S.A. (‘“INOSA’’)

which was a closely held corporation owned by the Sid-

erman family and which owned and operated the Hotel

Gran Corona. This seizure resulted in the imposition of a

receivership through a court system which was created by

the ruling military. Attempting to fight this seizure, the

Sidermans, through their Argentine attorney, brought an

action in 1978 in the Civil and Commercial Court of Tu-

cuman. The court issued an order that the intervention

cease. However, prior to the order being enforced, the

judge resigned. The intervention continues.

In 1981, Jose Siderman left the United States for a trip

to Italy. He was arrested in Italy in May 1981 pursuant

52a

to a request by Argentina for his extradition. In December

1981, the Italian Court denied the request for extradition.

Thereafter, Jose Siderman was allowed to return to the

United States.

Plaintiffs have alleged several causes of action based on

the taking of property from the Sidermans, the torture of

Jose Siderman and Lea Siderman’s claim for loss of con-

sortium.

Having duly considered the issues regarding the act of

state doctrine as a bar to the claims for taking of property,

IT IS ORDERED that the motion by plaintiffs for re-

consideration re act of state is respectfully denied.

Based upon the claims for the torture of Jose Siderman

and the loss of consortium by Lea Siderman and the evi-

dence produced by plaintiffs, and this court having found

that plaintiffs Lea Siderman, Carlos Siderman and Susana

Siderman de Blake have no standing to claim damages for

the torture of Jose Siderman,

IT IS HEREBY ORDERED, ADJUDGED AND DECREED

that plaintiffs Jose Siderman and Lea Siderman recover

from defendants Republic of Argentina and Province of

Tucuman of the Republic of Argentina, and each of them,

as follows:

(1) Defendants Republic of Argentina and Province of

Tucuman of the Republic of Argentina, and each of them,

are liable to Jose Siderman on his torture claim for the

following damages caused by the physical torture of Jose

Siderman in March 1976:

(a) $1,000,000.00 for pain and suffering and emo-

tional distress;

(b) $250,000.00 for physical injuries;

(d) $7,515.63 for medical expenses; and

53a

(e) $150,000.00 for moral damages; for a total award

of $2,607,515.63.

(2) Defendants Republic of Argentina and “Province of

Tucuman of the Republic of Argentina, and each of them,

are liable to plaintiff Lea Siderman on her claim for loss

of consortium in the sum of $100,000.00.

IT IS FURTHER ORDERED that plaintiffs Carlos Sid-

erman and Susana Siderman de Blake recover nothing

from defendants.

Dated: 9/28, 1984.

/s/ Robert M. Takasugi

ROBERT M. TAKASUGI

United States District Judge

54a

APPENDIX D

No. CV 82-1772-RMT(MCx)

SUSANA SIDERMAN DE BLAKE; JOSE SIDERMAN;

CARLOS SIDERMAN: and LEA SIDERMAN; individuals,

Plaintiffs,

VS.

THE REPUBLIC OF ARGENTINA, a foreign country;

THE PROVINCE OF TUCUMAN OF THE REPUBLIC OF

ARGENTINA, a province of a foreign country; OSCAR

HONORATO; ABELARDO GARCIA; CARLOS ROSALES;

VICTOR EDUARDO MOLINA; GENERAL DOMINGO

BUSSI; CAPTAIN ABAS; GENERAL LINO MONTIEL

FORZANO; GENERAL ANTONIO MERLO; individuals;

INMOBILIARIA DEL NOR-OESTE, S.A., an Argentine

corporation,

Defendants.

ORDER VACATING DEFAULT JUDGMENT AND

DISMISSING ACTION

FILED

MAR 7 1985

CLERK, U.S. DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

BY DEPUTY

This matter has come before the court for reconsider-

ation on the issue of foreign sovereign immunity pursuant

to this court’s order filed herein on October 30, 1984. Since

the filing of said order, defendants Republic of Argentina

and Province of Tucuman have filed a motion for relief

55a

from judgment based on their claim of foreign sovereign

immunity.

The court having duly considered the pleadings and other

documents filed herein finds that neither the Foreign Sov-

ereign Immunities Act, 28 U.S.C. §§1330, 1602 et seq., nor

the Alien Tort Claims Act, 28 U.S.C. §1350, provides an

exemption from defendants’ foreign sovereign immunity

applicable in this action.

Although it could be argued that 28 U.S.C. §1350 pro-

vides an exception to foreign sovereign immunity, said

statute in its grant of subject matter jurisdiction is silent

as to its intended effect on foreign sovereign immunity.

Whether this silence should be interpreted as impliedly

effecting an exemption to foreign sovereign immunity re-

quires an examination of the state of the immunity law

at the time of enactment. It appears that when 28 U.S.C.

§1350 was originally enacted in 1789, the longstanding

general rule was the recognition of absolute foreign sov-

ereign immunity, especially as to acts of sovereigns within

their own geographic territory. The Schooner Exchange v.

McF addon, 11 U.S. (7 Cranch) 116 (1812). This immunity

was only questioned as to public ships of a foreign sov-

ereign found within the geographic jurisdiction of another

sovereign, The Santissima Trinidad, 20 U.S. (7 Wheat.)

283 (1822), because such a case would raise a question as

to the strength of the logical corollary to absolute im-

munity, the corollary being the recognition of a sovereign’s

absolute jurisdiction over its own territory. Although the

Supreme Court in The Santissima Trinidad, supra, ex-

plored the extent of foreign sovereign immunity in con-

nection with claims-to foreign public ships found within

the geographic territory of the U.S., it did not reach that

issue, holding simply that ‘‘whatever may be the exemption

((immunity)] of the public ship herself, and of her arma-

ment and munitions of war, the prize property which she

brings into our ports is liable to the jurisdiction of our

courts. ..’’ 20 U.S. at 354.

56a

The longstanding general rule of foreign sovereign im-

munity recognized in Schooner Exchange, supra, indicates

that when 28 U.S.C. §1350 was enacted, the legal status

quo was the recognition of immunity. The logical impli-

cation would be that if Congress intended to affect that

immunity, it would have done so expressly and specifically,

such that silence would imply, if anything, no intended

affect on the general recognition of foreign sovereign im-

munity. As such, 28 U.S.C. §1350 does not provide an ex-

emption to foreign sovereign immunity herevn.

To the extent plaintiffs argue that their claim is one

against Argentina’s property located within the geographic

territory of the United States, that contention is misap-

plied. All of plaintiffs claims challenge defendants’ acts

that occurred in Argentina and are not claims on or to

Argentina’s property. located in the United States. The

only connection plaintiffs’ claim could have to any Argen-

tina property located in the United States, if any, would

be the rights a judgment creditor has to post-judgment

attachments. Those rights arise post-judgment and are not

in issue herein.

With respect to the Foreign Sovereign Immunities Act,

none of the enumerated exceptions to immunity listed in

28 U.S.C. §1605 apply herein. The only arguable exception

appears to be the extent to which any international agree-

ment might so provide. 28 U.S.C. § 1604.

The United Nations Charter and the Universal Decla-

ration of Human Rights (as well as most other interna-

tional human rights agreements) are proclamations of

aspirations to certain international goals and do not waive

immunity from suit.

The Organization of American States (“OAS”) through

the American Convention on Human Rights has set up the

Inter-American Commission on Human Rights (‘“‘Commis-

sion’) and the Inter-American Court of Human Rights.

After exhausting dofiestic remedies, or waiver thereof, an

individual can bring a case against a state before the Com-

mission. If the Commission is unsuccessful in settling the

case, it can bring the matter before the Inter-American

Court of Human Rights. As such, the OAS appears to

provide plaintiffs with their remedy, although it provides

no basis for waiving immunity herein.

Accordingly,

IT IS ORDERED that the default judgment entered herein

is vacated and the action is dismissed.

Dated: March 7, 1985.

/s/ Robert M. Takasugi

ROBERT M. TAKASUGI

United States District Judge

58a

APPENDIX E

The Superior Court

Los Angeles, California 90012

Chamber of

Julius M. Title, Judge

July 22, 1981

Mr. Jose Siderman

c/o Math Master

3700 South Broadway

Los Angeles, California

RE: Government of the Province of Tucuman

vs. Jose Siderman, Case Number 2007/77

Province of Tucuman, Republic of Argentina

Dear Mr. Siderman:

The Los Angeles Superior Court has received the en-

closed documents from the Presiding Judge of the Supreme

Court of tne Province of Tucuman, Republic of Argentina,

which apparently relate to a lawsuit filed against you in

Argentina. These documents have been delivered to the

Presiding Judge of the Los Angeles Superior Court by the

local attorney for the Argentine Governme

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