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November 1, 1983


The opinion of the court was delivered by: HAIGHT


HAIGHT, District Judge:

 Defendant Associated Press ("AP") moves pursuant to Rule 12(b)(6), F.R.Civ.P., to dismiss this action for failure to state a claim upon which relief can be granted, and alternatively on grounds of forum non conveniens. Its major argument is that the case is non-justiciable under the "act of state" doctrine. AP's motion under Rule 12(b)(6) assumes the truth of plaintiffs' allegations, which may be summarized as follows.

 Plaintiffs Sarieh Rasoulzadeh and Parviz Raein, wife and husband, are citizens of Iran, currently resident in the United States, and in the process of applying for political asylum in this country. In June, 1979, plaintiffs leased their house in Iran to AP. AP agreed in that lease not to assign the lease or sublease the premises or any part thereof without first obtaining plaintiffs' written consent. Plaintiffs had departed Iran for the United States prior to the execution of the lease. They retained an agent in Iran for general purposes, including overseeing the leased premises.

 In March, 1980, Iranian authorities discovered that the premises were not being occupied by AP, but rather by the Canadian Press. Plaintiffs had not consented in writing to this subletting by AP of the premises to the Canadian Press, which constituted a breach of the lease.

 AP knew, or should have known that, as the result of the action of the Canadian Embassy in sheltering and engineering the escape of American diplomats from Iran after seizure of the American Embassy in Tehran, Canadians were regarded by Iranian authorities with disfavor. Plaintiffs directly and through their representative repeatedly complained to AP concerning breach of the lease, warning that the premises might be confiscated by Iran. AP agreed to vacate the premises, but failed to do so, and ultimately, in July, 1980, the Iranian authorities confiscated plaintiffs' house. Plaintiffs sue AP for wilful tort, which led to the entirely foreseeable consequence of the confiscation of their property.


 The Act of State Doctrine

 The act of state doctrine originated as a bar to suits against foreign governments or their officials. In Underhill v. Hernandez, 168 U.S. 250, 42 L. Ed. 456, 18 S. Ct. 83 (1897), the Supreme Court dismissed a suit for wrongful detention against the revolutionary government of Venezuela, stating, "the courts of one country will not sit in judgment on the acts of another done within its own territory." 168 U.S. at 252. Redress for such acts was held to be proper only through diplomatic channels in the hands of the Executive branch. Id.; see also Shapleigh v. Mier, 299 U.S. 468, 471, 81 L. Ed. 355, 57 S. Ct. 261 (1937) (Cardozo, J.). The doctrine arises not from a lack of jurisdiction or of competence in American courts to inquire into the actions of foreign governments, but rather from recognition that under our Constitution evaluation of the validity of the acts of foreign governments is properly left to the other branches of government. Oetjen v. Central Leather Co., 246 U.S. 297, 309, 62 L. Ed. 726, 38 S. Ct. 309 (1918); Banco Nacional de Cuba v. Sabbatino, 376 U.S. 398, 423-424, 11 L. Ed. 2d 804, 84 S. Ct. 923 (1963). The risk which the doctrine seeks to avoid is that the judiciary "in the task of passing on the validity of foreign acts of state may hinder rather than further this country's pursuit of goals both for itself and for the community of nations as a whole in the international sphere." Sabbatino, 376 U.S. at 423.

 Application of the act of state doctrine requires a case-by-case analysis of the extent to which separation of powers concerns are implicated by the action before the court, Texas Trading & Milling Corp. v. Federal Republic of Nigeria, 647 F.2d 300, 316 n.38 (2d Cir. 1981), cert. denied, 454 U.S. 1148, 71 L. Ed. 2d 301, 102 S. Ct. 1012 (1982); "the less important the implications of an issue are for our foreign relations, the weaker the justification for exclusivity in the political branches." Sabbatino, 376 U.S. at 428. The Supreme Court has consequently been reluctant to create "an inflexible and all-encompassing rule," Id., to govern the doctrine's application.

 Defendant insists that because adjudication of this case will require inquiry into the motivation of the Iranian government in seizing plaintiffs' house, the act of state doctrine bars adjudication. This result, it argues, is required by Hunt v. Mobil Oil Corp., 550 F.2d 68 (2d Cir.), cert. denied, 434 U.S. 984, 54 L. Ed. 2d 477, 98 S. Ct. 608 (1977), in which the Court of Appeals invoked the doctrine in dismissing a claim which would have required the plaintiffs to prove that, as here, but for the wrongful acts of the defendants a foreign government would not have seized plaintiffs' property.

 In Hunt, plaintiffs alleged that anticompetitive activity on the part of defendant oil companies which was designed to resist attempts by the Libyan government to increase its income from oil production caused the Libyan government to seize plaintiffs' property in Libya. The pleadings neither directly challenged the validity of the Libyan government action nor joined that government as a defendant. Nevertheless, the Court of Appeals affirmed a district court dismissal under the act of state doctrine, finding that the examination of the government's motives for the seizure which was required to prove a causal connection between defendants' acts and plaintiffs' injury "inevitably" entailed consideration of the validity of the government's acts. 550 F.2d at 77. Thus the case was rendered non-justiciable by the act of state doctrine.

 In the case at bar, AP vigorously insists that Hunt mandates an inflexible application of the act of state doctrine, requiring dismissal of any case where, whatever the circumstances, the issues necessitate an inquiry into the motivation of a foreign government's action. If this clearly is the Second Circuit rule I must perforce follow it, sup pressing any seditious thought that such rigidity is at odds with the balancing approach articulated in Sabbatino at 428, from which I have already quoted. See also Alfred Dunhill of London, Inc. v. Republic of Cuba, 425 U.S. 682, 728, 48 L. Ed. 2d 301, 96 S. Ct. 1854 (1976) (Marshall, J., dissenting: "I question the wisdom of attempting the articulation of any broad exception to the act of state doctrine within the confines of a single case. The Court in Sabbatino, aware of the variety of situations presenting act of state questions and the complexity of the relevant considerations, eschewed any inflexible rule in favor of a case-by-case approach."). Indeed, other circuits in the antitrust context have criticized Hunt as overbroad and inflexible, see, e.g., Industrial Investment Development Corp. v. Mitsui & Co., Ltd., 594 F.2d 48, 55 (5th Cir. 1979), cert. denied, 445 U.S. 903, 100 S. Ct. 1078, 63 L. Ed. 2d 318 (1980) ("Precluding all inquiry into the motivation behind or circumstances surrounding the sovereign act would uselessly thwart legitimate American goals where adjudication would result in no embarrassment to executive department actions."); Compania de Gas de Nuevo Laredo, S.A. v. Entex, Inc., 686 F.2d 322, 325 (5th Cir. 1982), dert. denied, 460 U.S. 1041, 103 S. Ct. 1435, 75 L. Ed. 2d 794 (1983); Williams v. Curtis-Wright Corp., 694 F.2d 300, 304 n. 5 (3rd Cir. 1982); see also Sage International, Ltd. v. Cadillac Gage Co., 534 F. Supp. 896, 898-908 (E.D.Mich. 1981).These are criticisms echoed by Judge van Graafeiland's dissent in Hunt, 550 F.2d at 79-80 ("Despite the broad language of this accepted definition, the doctrine does not purport to set up a jurisdictional bar to judicial review.... If the validity of the conduct of a foreign government is not placed in issue, its participation in the wrongdoing of individual defendants should not be permitted to screen the latter from accountability for their illegal acts.").

 The criticisms of other circuits and in Judge van Graafeiland's dissent are of no more moment than my own misgivings if, in fact, Hunt must be read to declare a clear and unambiguous Second Circuit version of the act of state doctrine, applicable to all conceivable situations. But it is not entirely ...

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