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MARSCHALK CO. v. IRAN NATL. AIRLINES CORP.

June 11, 1981

The MARSCHALK COMPANY, INC., Plaintiff,
v.
IRAN NATIONAL AIRLINES CORP. and the Government of Iran, Defendants, and United States of America, Intervenor



The opinion of the court was delivered by: DUFFY

This is another opinion *fn1" which addresses difficult issues in what has become known as the Iranian assets litigation. It is with a somewhat heavy heart that I undertake to render this decision not only because I find my views are quite different from those of some of my most respected and learned brethren, but more importantly, as an individual, I would prefer to see this sorry chapter of the history of our country finally closed. My duties as a judicial officer, however, compel me to face the difficult issues presented here devoid of such personal considerations.

I am asked to decide whether the President was acting within his constitutional and statutory powers when he entered into an agreement with Iran and issued executive orders in order to effect the release of the American hostages. The agreement and the executive orders require the termination or suspension of claims against Iran and its instrumentalities, presentation of those claims to an international claims tribunal, and the nullification of orders of attachment imposed on Iranian assets in the United States. *fn2"

The Court of Appeals for this Circuit has directed me to select one of the pending cases and "to join the United States as a party in (that) single case in which the issues raised by the Iranian Agreement and the Presidential Orders are squarely presented and to proceed with confirmation hearings in that case alone." New England Merchants National Bank v. Iran, 646 F.2d 779, 784 (2d Cir. 1981) and related cases. I will refer to the difficulties encountered in the selection of that single case later and only to the extent necessary to indicate some of the processes whereby the selection was made. At this point, suffice it to say, that this case was selected as the one which "squarely presented" the issues for which this litigation was remanded.

 This case is somewhat different from those which have been considered by courts in other circuits. See, e.g., Charles T. Main International, Inc. v. United States, 651 F.2d 800 (1st Cir. 1981); American International Group, Inc. v. Islamic Republic of Iran, 211 U.S. App. D.C. 468, 657 F.2d 430, (D.C.Cir. 1981); Security Pacific National Bank v. The Government and State of Iran, 513 F. Supp. 864 (C.D.Cal.1981); Unidyne Corporation v. Government of Iran, 512 F. Supp. 705 (E.D.Va.1981). Each of these cases involved services to be performed in Iran. This case, however, involves a contract whereby the plaintiff, a corporation formed in the United States, rendered advertising services solely in the United States, the object of which services was to obtain a larger share of the relevant United States market for the defendants by enticing United States citizens and others present in the United States to patronize defendant Iran Airlines. This was purely a commercial transaction wholly within the territory of the United States. The attachment obtained by Marschalk was issued by a United States court and levied upon property located in the United States. The attachment was specifically permitted by United States government license. While this fact pattern puts the issues at bar in much sharper focus than those of the other decided Iranian asset cases, the issues of law here are nonetheless identical to those in the other cases.

 The plaintiff argues that the President did not have the authority under the Constitution or any statute to terminate or suspend claims or nullify orders of attachment; furthermore, plaintiff contends that the President's actions constitute a taking of private property for a public purpose without just compensation.

 The defendants and government's position is that the President was acting within the aggregate of his foreign affairs powers under the Constitution and his powers under the International Emergency Economic Powers Act, 50 U.S.C. § 1701 et seq. (Supp. III 1979) ("IEEPA") and that no compensable taking occurred.

 Background

 On Sunday, November 4, 1979, some 400 Iranians seized the American Embassy in Teheran, Iran, taking fifty-two American diplomats and other personnel hostage. *fn3" Support from the mobs nearby, the religious leaders and the Government of Iran escalated a three-day sit-in to an international crisis which would last 444 days. *fn4"

 In response to this crisis and the Iranian threat to withdraw all of its deposits from the United States, President Carter issued Executive Order No. 12,170, 44 Fed.Reg. 67,729 (1979). *fn5" The order froze all Iranian property within the United States and any interests in such property. The order also directed the Secretary of the Treasury to take the necessary measures to carry out the provisions of the order.

 The Secretary promptly promulgated regulations, 31 C.F.R. Part 535, authorizing the maintenance of law suits against Iran, 31 C.F.R. § 535.504(a) (1979), *fn6" and the imposition of attachments on Iranian property located within the United States, 31 C.F.R. § 535.418 (1979). *fn7"

 The events in Iran and the Secretary's regulations opened the litigation floodgates; law suits poured into this and other circuits seeking monetary damages for alleged civil wrongs ranging from the nationalization of private property to the repudiation of executory contracts. By September of 1980, 96 civil actions were pending in this district alone. The damages claimed in these actions amounted to many billions of dollars.

 In most of the suits in this court, the plaintiffs obtained ex parte orders of attachment pursuant to New York's attachment statute, N.Y.Civ.Prac.Law & R. ("C.P.L.R.") §§ 6201, et seq. (McKinney). Under New York law, an ex parte attachment order must be confirmed by the court after due notice has been given to the defendants.

 Plaintiffs' motions for confirmation of the attachments in the 96 cases before this court were opposed by the Iranian defendants who claimed that their assets were immune from pre-judgment attachment under the Foreign Sovereign Immunities Act, 28 U.S.C. §§ 1602, et seq. (1976) ("FSIA"), and the Treaty of Amity, Economic Relations and Consular Rights, Aug. 15, 1955, United States-Iran, 8 U.S.T. 899 ("Treaty of Amity") between the United States and Iran. The 96 cases were referred to me to resolve the sovereign immunity and other common legal issues. *fn8"

 In an Opinion and Order issued on September 26, 1980, *fn9" I ruled that, while Iran had not expressly waived its immunity from pre-judgment attachment as set out in the FSIA, Iran's sovereign immunity was unequivocally suspended when the President issued Executive Order No. 12,170, 44 Fed.Reg. 67729 (1979), freezing Iran's assets located in the United States. New England Merchants National Bank v. Iran Power Generation and Transmission Co., 502 F. Supp. 120 (S.D.N.Y.1980). I referred the cases back to the district court judges to determine whether the prerequisites of New York's attachment law had been satisfied. *fn10"

 At this juncture, the parties to the 96 law suits sought certification to the Court of Appeals of a number of questions regarding the validity of the attachments. 28 U.S.C. 1292(b). *fn11" In view of the controversial nature of some of the questions and the fact that immediate appeal of my decisions might have materially advanced the termination of the litigation, I certified certain questions to the Court of Appeals. *fn12" New England Merchants National Bank v. Iran Power Generation and Transmission Company, 508 F. Supp. 49 (S.D.N.Y.1980). On January 5, 1981, the Court of Appeals accepted the interlocutory review of the certified questions, scheduled argument, and stayed all proceedings in the district court pending its decision. *fn13"

 Precisely two weeks later, on January 19, 1981, President Carter finalized an agreement with Iran to secure the release of the American hostages (the "Agreement"). Under the Agreement, President Carter promised to "terminate all legal proceedings in the United States involving claims of United States persons and institutions against Iran" and to "nullify all attachments and judgments" obtained in such proceedings. To implement the Agreement, President Carter issued Executive Orders Nos. 12,276 through 12,285. 46 Fed.Reg. 7913-32 (1981). These orders, inter alia, revoked the license permitting attachment of the frozen assets, nullified the attachments acquired under the license, and required that the Iranian funds and securities be transferred out of the United States in accordance with the Agreement.

 On February 24, 1981, President Reagan ratified the Agreement and issued Executive Order No. 12,294, 46 Fed.Reg. 14,111 (1981), "suspending" all claims which were eligible for resolution by the Iran-United States Claims Tribunal (the "Tribunal"). The order also provided, however, that a decision on the merits by the Tribunal would be "final" and require termination of proceedings in the United States courts.

 In light of these events, the Court of Appeals determined that the certified questions had been supplanted by a single, overriding question: "Were the actions of the President in suspending the law suits and nullifying the attachments consistent with constitutional power and any applicable statutory authority?" New England Merchants National Bank v. Iran, supra, 646 F.2d at 783. Since the issues had not been presented or decided in the district court nor briefed on appeal, the Court of Appeals declined to rule on the validity of the Agreement or the orders. Accordingly, the Court of Appeals remanded the cases to me with instructions. Id. at 784.

 Since the 96 cases were remanded to me, I have carefully analyzed each of them in an attempt to select the most appropriate case. After two hearings and many conferences, it became clear that the 96 cases before this court are a mixed bag. Since the Agreement was signed, some of the claimants have been paid the full amount claimed in their complaints; others have reached private settlement agreements with the Iranian defendants. Arbitration clauses or agreements to litigate in the Iranian courts render certain cases inappropriate for expeditious disposition of the issues raised by the Iranian Agreement or presidential orders. Still others do not believe their claims fall within the Agreement or cannot satisfy the jurisdictional requirements of the FSIA. Finally, a number of the claimants do not challenge the constitutionality of the Agreement or orders; instead, they assert merely a right to compensation in the event any judgment in their favor rendered by the Tribunal is not fully satisfied by the claims fund established by the Agreement. Some plaintiffs do not wish to press their claims in the apparent hope and expectation of renewing their commercial ventures with Iran. Thus, after reviewing all the cases on remand individually, I have been constrained to dismiss some actions, to vacate the attachments in others for lack of a showing of continuing need for the levy, and to place the great bulk of this litigation on the suspense docket of this Court.

 The case that most clearly satisfies the criteria set forth by the Court of Appeals belongs to the Marschalk Company, Inc. Accordingly, the government's motion to intervene in the case is granted and I will analyze the validity of the Agreement and the executive orders within the context of the Marschalk case.

 The Parties

 The Marschalk Company, Inc. ("Marschalk") is an advertising company incorporated under the laws of New York to plan, create, write and place advertisements for its clients. Its principal place of business is at 1345 Avenue of the Americas, New York, New York.

 Defendant Iran National Airlines Corp. ("Iran Air") is a corporation organized under laws of the Government of Iran. Its principal place of business is Mehrabad Airport, Iran Air Head Office Building, Teheran, Iran. Iran Air is licensed to do business and is doing business in this jurisdiction. It has an office in New York City located at 345 Park Avenue. Iran Air's only point of arrival and departure in the United States is New York. Defendant Government of Iran ("Iran") is a foreign sovereign state.

 Marschalk's Claim and Attachment

 Iran, acting through Iran Air, entered into an advertising agreement with Marschalk effective August 15, 1978. Under the agreement, Marschalk was designated as Iran Air's advertising agent in the United States. In general, Marschalk promised to provide Iran Air with all the services usually rendered by advertising agencies for one year following the date of the contract and thereafter until termination by Iran Air or Marschalk on three months' notice.

 As Marschalk created advertising and placed it in various print media, it invoiced the defendants for its costs and a commission based on the rates charged to Marschalk by the publishers with whom Iran Air advertisements were placed. The invoices were payable on or before the due date specified on the invoice.

 Marschalk alleges that it performed its obligations under the contract and submitted a number of invoices to Iran Air seeking payment of Marschalk's costs and commissions for work already completed in connection with the contract. These invoices evidently were paid when due for several months. After the Government of Iran changed hands in January, 1979, however, several payments were missed. By November 30, 1979, Marschalk had invoiced Iran Air for $ 46,528.02. According to Marschalk, no part of this sum has been paid by Iran Air or the Government of Iran. The defendants did not protest the invoices and, in fact, by their silence must be deemed to have acquiesced to the validity of the invoices and the amounts therein.

 As further evidence of the claimed breach of contract, Marschalk points to certain events in Iran, which it claims constituted a repudiation of the Marschalk contract and other contracts with American companies. Marschalk notes first that the present government in Iran began to withdraw its assets from American banks. N. Y. Times, Nov. 16, 1979, at 16, col. 6 and 19, col. 1. Marschalk also cites the November 23, 1979 declaration by the then Iranian Foreign Minister Abolhassan Bani-Sadr that all foreign debts incurred by the Imperial Government were repudiated. Marschalk, therefore, filed suit on December 28, 1979, seeking a judgment against the defendants in the amount of $ 46,528.02 with interests and costs.

 On December 31, 1979, this court granted Marschalk an ex parte order of attachment against Iran Air and Iran. *fn14" Plaintiff levied upon properties of defendants by serving the order of attachment on January 2, 1980 on several banks holding assets of the defendants. Marschalk moved to confirm its attachment in accordance with New York law on January 7, 1980. That motion is now ripe for decision.

 The defendants and the United States oppose Marschalk's motion on the grounds that in accordance with the Iranian Agreement and Executive Orders (i) all legal proceedings regarding Marschalk's claim are suspended; (ii) the claim must be presented to the Tribunal for adjudication; and (iii) Marschalk's attachment is nullified. Marschalk argues that the actions taken by the President were not authorized by the Constitution or the laws of the United States. Marschalk alternatively argues that if the President's actions were proper, they constitute a compensable taking under the fifth amendment to the Constitution.

 All agree, however, that the President's power, if any, to enter an agreement with Iran and issue executive orders thereunder must stem either from an act of Congress or from the Constitution itself. See Youngstown Sheet and Tube Co. v. Sawyer, 343 U.S. 579, 585, 72 S. Ct. 863, 865, 96 L. Ed. 1153 (1952).

 Perhaps the best framework for this Court's analysis of the President's actions is that provided in the celebrated concurrence of Justice Jackson in Youngstown. Id. at 634, 72 S. Ct. at 888. In considering President Truman's power to seize the nation's steel mills to prevent a threatened strike during the Korean War, Justice Jackson wrote:

 
The actual art of governing under our Constitution does not and cannot conform to judicial definitions of the power of any of its branches based on isolated clauses or even single Articles torn from context. While the Constitution diffuses power the better to secure liberty, it also contemplates that practice will integrate the dispersed powers into a workable government. It enjoins upon its branches separateness but interdependence, autonomy but reciprocity. Presidential powers are not fixed but fluctuate, depending on their disjunction or conjunction with those of Congress. We may well begin by a somewhat oversimplified grouping of practical situations in which a President may doubt, or others may challenge, his powers, and by distinguishing roughly the legal consequences of this factor of relativity.
 
1. When the President acts pursuant to an express or implied authorization of Congress, his authority is at its maximum, for it includes all that he possesses in his own right plus all that Congress can delegate. In these circumstances, and in these only, may he be said (for what it may be worth), to personify the federal sovereignty. If his act is held unconstitutional under these circumstances, it usually means that the Federal Government as an undivided whole lacks power....
 
2. When the President acts in absence of either a congressional grant or denial of authority, he can only rely upon his own independent powers, but there is a zone of twilight in which he and Congress may have concurrent authority, or in which its distribution is uncertain. Therefore, congressional inertia, indifference or quiescence may sometimes, at least as a practical matter, enable, if not invite, measures on independent presidential responsibility. In this area, any actual test of power is likely to depend on the imperatives of events and contemporary imponderables rather than on abstract theories of law.
 
3. When the President takes measures incompatible with the expressed or implied will of Congress, his power is at its lowest ebb, for then he can rely only upon his own constitutional powers minus any constitutional powers of Congress over the matter. Courts can sustain exclusive Presidential control in such a case only by disabling the Congress from acting upon the subject. Presidential claim to power at once so conclusive and preclusive must be scrutinized with caution, for what is at stake is the equilibrium established by our constitutional system.

 Id. at 635-38, 72 S. Ct. at 870-71 (footnotes omitted).

 I. Suspension of Legal Proceedings in United States Courts

 A. Presidential Authority Under IEEPA

 1. Express Authority Under IEEPA

 The defendants and the government argue first that Congress, under IEEPA, authorizes the President to terminate the legal proceedings involving Marschalk's claim against Iran Air. Thus, they contend, the actions of the President in the case at bar fit into the first category set forth in Justice Jackson's opinion. Particular reliance is placed on the President's power under IEEPA when faced with a national emergency to regulate, nullify, prevent or prohibit the acquisition or exercise of any rights by any person within the jurisdiction of the United States with respect to property located within the United States in which a foreign country or national has an interest. 50 U.S.C. § 1702(a)(1)(B) (Supp. III 1979). *fn15"

 The government and the defendants argue that Marschalk's claim against Iran in American courts represents an attempt to acquire or to exercise a right with respect to Iranian property situated in the United States, and thus, under IEEPA, such claims may be extinguished. *fn16" No precedent for such a construction is offered.

 The characterization of Marschalk's claim as an acquisition or exercise of a right related to Iranian property in the United States is a vain endeavor by the government and the defendants to fit Marschalk's claim into one of IEEPA's pigeonholes which would render it amenable to regulation by the President. Accord, American International Group, Inc., supra, 657 F.2d 430 at 443 n.15, ; Chas. T. Main International, Inc., supra, 651 F.2d 800 at 809 n.13. Putting aside the question of attachment, see discussion at p. 94, infra, and considering merely the suspension of the claim, Marschalk, in fact, is not seeking by its claim to acquire or exercise a right with respect to any particular Iranian property located within the United States. Instead, Marschalk seeks only to establish in the appropriate court of law its rights to payment for services rendered to the defendants under an advertising contract and to obtain a judgment, irrespective of what Iranian property located here or anywhere else in the world is used to satisfy the judgment.

 Marschalk's claim also is not subject to regulation because it is not the type of "property" that Congress intended the President to regulate under IEEPA. Although Marschalk's claim and its contract rights are property interests protected by the fifth amendment of the United States Constitution ("Fifth Amendment"), *fn17" it is clear from the legislative history that the types of property over which the President has power under IEEPA include only securities, currencies and other tangible properties situated in the United States. H.R.Rep.No.95-459, 95th Cong. 1st Sess. 15 (1977) ("IEEPA H.Rep.").

 Furthermore, the President is precluded from regulating Marschalk's claim under IEEPA because the Iranians do not have a property interest in Marschalk's claim. The government admits that the only party which has a property interest in Marschalk's claim or in Marschalk's contract rights is Marschalk. See Transcript at 57-59, The Marschalk Company, Inc. v. Iran Airlines Corp., et al., (S.D.N.Y. June 5, 1981). The Iranians do not have any cognizable property interests in Marschalk's claim or contract rights. They have only an interest in defending against Marschalk's claim, but that interest is not property. The defendants' rights under the contract are separate from Marschalk's and allegedly have been satisfied by Marschalk's complete performance under the contract. Thus, even if claims and contract rights in which a foreign party has an interest do constitute property under IEEPA, Iran has no property interest in Marschalk's claims and contract rights and, therefore, the President cannot exercise his IEEPA powers over them.

 It may be argued that execution in this country on a judgment obtained in this case could be a "transfer" within IEEPA but that cannot be the basis for terminating the litigation. To do so is to ignore the fact that most judgments are not executed upon; the impact of the judgment psychological, moral and political often renders such execution unnecessary. It follows, therefore, that the Agreement terminating the litigation of this claim and transferring it to the Tribunal exceeds the President's power under the express language of IEEPA.

 2. Implied Authority Under IEEPA The Legislative History

 Moreover, the sweeping powers which the executive department would read into the IEEPA find no support in the legislative history of that Act. Congress intended to define and reduce the power of the President by the passage of the Act, not to expand it.

 A review of the legislative history also makes clear that Congress did not merely fail to authorize the President under IEEPA to take United States' citizens claims and transfer them to another tribunal; it acted affirmatively to prevent such action by the President.

 IEEPA was enacted in 1977 as part of "Trading With the Enemy Act Reform Legislation." The Trading With the Enemy Act of 1917, 50 U.S.C.App. §§ 1 et seq. (1976) ("TWEA"). TWEA had authorized the President to take certain extraordinary measures, such as seizing and vesting foreign property, in times of war and peace. Deeply concerned that TWEA had "become essentially an unlimited grant of authority for the President to exercise at his discretion, broad powers in both the domestic and international economic arena." Congress limited TWEA's broad grant of authority to times of declared war. IEEPA H.Rep. at 2, 7, 10. Congress agreed with the constitutional scholars that the "TWEA is a prime example of the unchecked proliferation of Presidential power for purposes totally unforeseen by the creators of that power." Id. at 9.

 IEEPA limited the President's peace-time emergency powers to the "the regulation of international economic transactions." Id. at 10-11. The President does not have the power under IEEPA, as he did under TWEA, to seize foreign property or records or to take title to any property of any foreign country or national thereof for the benefit of the United States. Id. at 2; House Markup Before The Committee on International Relations, 95th Cong., 1st Sess. 3-4 (1977). Nor does the President have the power to regulate purely domestic transactions or authority to control non-economic aspects of international intercourse. IEEPA H.Rep. at 11.

 In the case of Marschalk, the President contravened the prohibitions on his power under IEEPA in at least three ways. First, the Agreement and the Executive Orders attempt to interfere with a purely domestic economic transaction between Marschalk and Iran Air. Marschalk, a United States company, agreed to and did render advertising services solely within the United States to an airline which is doing business in the United States. The purpose of the advertising was to convince United States' residents to patronize the airline. Bills were sent to Iran Air's office in New York City and payments made from Iran Air's account with a New York bank. The fact that a foreign corporation paid for and benefited from the services does not transform the nature of the transaction and the services performed thereunder from domestic to international.

 A similar conclusion was drawn by the Supreme Court in the Youngstown case. There, domestically produced steel was needed for United States military efforts in the Korean War. Despite the relationship between the steel production and our foreign affairs, the Supreme Court held that the President could not interfere with the domestic operation of the steel mills to ensure sufficient steel was produced for the Korean effort. Youngstown, 343 U.S. at 589, 72 S. Ct. at 867.

 Second, the President, by the Agreement and the Executive Orders, is endeavoring to control non-economic aspects of international intercourse. In the instant case, the plaintiff and the defendants were no longer transacting business with one another; the negotiation stage was long past, the plaintiff's obligations under the contract allegedly satisfied. Instead, the parties were adjudicating the rights of Marschalk arising out of an economic transaction which transpired long before the President entered into the Agreement and issued the Orders.

 Finally, the termination of Marschalk's claim and transferral of the claim to the Tribunal constitute a seizure of property belonging to a United States citizen. Although the President did not have the authority to seize or vest property of United States citizens even under TWEA, the government would have this court infer from the language of IEEPA that the President now has such authority. As I have already discussed, such a construction is impossible because Marschalk's claim is not an attempt to acquire or exercise a right in Iranian property, is not property within the meaning of IEEPA, and is not property in which Iran has an interest. The mandate against vesting or seizure of the property of foreign governments and nationals thereof only further supports the conclusion that the President could not under IEEPA take Marschalk's claim. Surely, if the President is prohibited from seizing property of the country whose actions instigated the crisis, Congress did not intend that the property of United States' claimants could be seized and used at the President's sole discretion as ransom.

 The legislative history of IEEPA also indicates that Congress intended that the President, in responding to emergencies would protect, not prejudice, the ability of United States citizens to recover claims against foreign countries. IEEPA H.Rep. at 17. Private claimants are not barred by the language or history of IEEPA from bringing suit against a foreign defendant during a state of emergency declared by the President, nor were they barred from doing so under TWEA, IEEPA's predecessor. Zittman v. McGrath, 341 U.S. 446, 71 S. Ct. 832, 95 L. Ed. 1096 (1951); Vishipco Line v. Chase Manhattan Bank, N. A., 77 Civ. 1251 (S.D.N.Y. Nov. 3, 1978). In addition, the legislative history of the portion of TWEA which is now § 1702(a)(1)(B) of IEEPA reveals that two of the "chief objectives" of TWEA were (i) prevent hostile nations from benefiting from trade with American citizens; and (ii) utilization of enemy property within the United States, inter alia, to satisfy the claims of United States citizens. H.R.Rep.No.85, 65th Cong., 1st Sess. 1 and 4 (1917) ("TWEA" H.Rep.). Extinguishing Marschalk's claim is inconsistent with both purposes.

 3. Conflict Between President's Actions and an Act of Congress

 a. Limits on President's Power under FSIA

 The suspension by the President of litigation of Marschalk's claim in the United States courts is not only unauthorized by IEEPA, it is prohibited by the FSIA. Thus, it cannot be argued that the President's actions fall within the "twilight zone" described in Justice Jackson's second category. Rather than acquiescing to Presidential interference in the litigation of commercial claims against foreign defendants, Congress, in enacting FSIA in 1976, eliminated such Executive interference. Congress also specifically refused to give the President the power to enter into agreements with other nations which would circumscribe the jurisdiction of the United States courts over international commercial claims under the FSIA.

 The government argues that "certainly the Executive Branch when it proposed and supported the FSIA, did not believe it was giving up the President's traditional claims settlement authority." Brief for Government at 23 n.****. This argument is included in a footnote perhaps because the government cannot suggest any other reason for the statute than the obvious, i. e., that the settlement of commercial claims (such as involved here) was to be relegated to the courts without interference from the executive. The sorry history of giving untrammeled power to the executive in such situations certainly gave great impetus to the passage of the FSIA. This is well supported by the legislative history of the FSIA.

 Prior to the FSIA, jurisdiction of actions brought by United States citizens against foreign states was provided solely in 28 U.S.C. § 1332(a) (1976). Such actions, however, could be terminated by the State Department by filing a "suggestion of immunity" to which courts would normally "defer." See, e.g., Rich v. Naviera Vacuba, S. A., 197 F. Supp. 710 (E.D.Va.), aff'd, 295 F.2d 24 (4th Cir. 1961). Thus, a foreign state that did not wish to be sued in the United States courts would typically request that the State Department file a suggestion of immunity. S.Rep.No.94-1310, 94th Cong., 2d Sess. 9 (1976) ("FSIA S.Rep."). A principal purpose behind the FSIA was to transfer the determination of sovereign immunity from the executive branch ...


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