The U.S. Supreme Court on Wednesday heard arguments on the contentious issue of whether Americans should be allowed to sue foreign nations in U.S. courts, amid signs the justices were skeptical of easing the rules against such cases.
The issue at hand was whether an Oklahoma-based oil company, Helmerich & Payne International, could sue Venezuela over its seizure of oil-drilling rigs. But the justices’ questions might easily apply to some future conflict over the Justice Against Sponsors of Terrorism Act, which Congress enacted in September after overriding President Barack Obama’s veto. That law would allow survivors of the 9/11 terrorist attacks to sue Saudi Arabia, which some critics contend financed the attacks.
Experts on the high court say the case has the potential to be a “blockbuster” because it could open the door for more suits against foreign governments in U.S. courts.
“We don’t want to have foreign countries in our courts when there isn’t really a pretty good case against them, and maybe a winning case,” said Justice Stephen Breyer, who acknowledged he was swinging “back and forth” on how to rule.
Chief Justice John Roberts Jr. and Justice Anthony Kennedy, the court’s usual swing vote, also seemed skeptical of allowing lawsuits against foreign nations. Justice Sonia Sotomayor joined Breyer in pronouncing herself confused by the choices.
Wednesday’s arguments found frequent adversaries the United States and Venezuela on the same side against the American company.
The justices must decide whether the oil company needs to show only that its case is not frivolous for it to continue or must prove first that it will likely prevail in order to have a case brought to trial.
We don't want to have foreign countries in our courts when there isn't really a pretty good case against them.
Justice Stephen Breyer
Lawyers for Helmerich & Payne said Congress didn’t intend for sovereign immunity to be without limits. Lawmakers included an “expropriation” exception in the 1976 Foreign Sovereign Immunities Act for situations when a foreign government has nationalized privately owned property, said Catherine Carroll, Helmerich & Payne’s attorney.
She argued to the court that Congress had included exceptions because it recognized a problem from countries like Cuba, which under Fidel Castro expropriated the property of thousands of U.S. citizens to gain an unfair advantage in the commercial marketplace.
“They wrote a statute that said, ‘We want the courthouse doors to be open to those kinds of claims’; a claim of a taking in violation of international law,” Carroll told the court.
But Roberts questioned whether a lower standard for such suits didn’t invite a double standard.
“Our ambassadors have to go to these other countries and say . . . ‘You’re being sued,’ ” Roberts said. “ ‘You have to come into our courts, even though you’re a sovereign. And we don’t want you dragging us into your courts, but you have to come in our courts because someone has raised a claim that is not wholly insubstantial or frivolous.’ That’s a very low standard in that context.”
Elaine Goldenberg, an assistant to the U.S. solicitor general, warned about the repercussions of prosecuting foreign nations. She noted that angry Russian officials sought to retaliate for a 2013 U.S. federal court ruling that fined Russia $50,000 a day until it surrendered books claimed by a U.S-based Hasidic group. In response, Russia initiated an expropriation action against the United States in Moscow and started imposing $50,000-a-day sanctions on the United States, she said.
“Something like that could conceivably happen,” Goldenberg told the court, “even under the standard that we’re talking about, that a foreign state could take offense. But this is a very sensitive issue.”
They wrote a statute that said, ‘We want the courthouse doors to be open to those kinds of claims’; a claim of a taking in violation of international law.
Catherine Carroll, an attorney for Helmerich & Payne
The case came just weeks after both houses of Congress voted to override Obama’s veto of the Justice Against Sponsors of Terrorism Act, which allows relatives of those killed in the Sept. 11, 2001, terrorist attacks to sue Saudi Arabia for any suspected role in the attack. Saudi diplomats warned that their country would retaliate for any court action in the United States, at one point even threatening to sell U.S. securities the country held.
While the terrorism act didn’t come up in court Wednesday, both the Saudi Arabia legislation and the Venezuela case apply to the same law that grants other countries broad immunity from American lawsuits.
Breyer said that whatever the court decided probably would confuse people.
“I can’t get my hands around this case, or my mind around it, because it . . . seems to me it’s really about a practical matter,” he said. “And the practical matter is when should the judge in this kind of case decide whether or not there really is a claim here, a legitimate claim they can win?”