The opinion of the court was delivered by: Robert L. Carter, District Judge
Plaintiff D.C. Precision, Inc. ("D.C.Precision") brought this action
against defendants the United States Government (the "government"),
Jugobanka A.D. ("Jugobanka"), and Beogradska Banka A.D. ("Beogradska
Banka"), seeking compensatory, declaratory, and injunctive relief on the
ground that the blocking of its funds on deposit in a New York agency of
a Yugoslav bank constitutes an uncompensated "taking" in violation of the
Fifth Amendment of the United States Constitution. Now before the court
is the government's and Jugobanka's motions to dismiss the complaint
pursuant to Rules 12(b)(1) and 12(b)(6), F.R.Civ.P.
In the early 1990s, political crisis led to the dissolution of the
Socialist Federated Republic of Yugoslavia. In response to this crisis,
the United States has imposed a comprehensive economic sanctions program
against the Federal Republic of Yugoslavia (Serbia and Montenegro) (the
"FRY (S & M)"). Invoking his authority under the International
Emergency Economic Powers Act ("IEEPA"), President Bush issued Executive
Order 12808 on May 30, 1992, blocking "all property and interests in
property of . . . the [FRY (S & M)] that hereafter come within the
United States, or that are or hereafter come within the possession or
control of United States persons." President Clinton continued the
sanctions program by blocking the property and interests in property of
all commercial, industrial, and public utility entities organized or
located in the FRY (S & M) through the issuance of Executive Order
12846, dated April 25, 1993. (collectively, the "Executive Orders").
The Executive Orders are implemented by the Department of the Treasury
through the Federal Republic of Yugoslavia (Serbia and Montenegro) and
Bosnian Serb — Controlled Areas of the Republic of Bosnia and
Herzegovina Sanctions Regulations (the "Sanctions Regulations"). See 31
C.F.R. Part 585. Under the Sanctions Regulations, blocked property or
interests in property may not be "transferred, paid, exported, withdrawn
or otherwise dealt in without a license from the Office of Foreign Assets
Control in the Department of the Treasury" ("OFAC"). See
31 C.F.R. § 585.201(a) & (b).
On December 10, 1997, D.C. Precision filed complaint on behalf of
itself and on behalf of all other "depositors who are either U.S.
nationals or U.S. corporations whose accounts are being held by the
United States Government's [sic] pursuant to sanctions against
Yugoslavia," see Complaint ¶ V, asserting a violation of the Fifth
Amendment of the United States Constitution. The complaint sought, inter
alia, damages in excess of $10,000,000. On March 24, 1998, the government
moved for dismissal on the ground that this court lacked subject matter
jurisdiction because the United States Court of Federal Claims has
exclusive jurisdiction of Fifth Amendment taking claims that exceed
$10,000, and because D.C. Precision had not attempted to obtain a license
from OFAC and therefore had not exhausted the available administrative
remedies. The government also moved for dismissal on the basis that the
complaint failed to state a claim. On March 30, 1998, defendant Jugobanka
similarly moved for dismissal for failure to state a claim.
In its October 14, 1998 opposition papers to the government's motion to
dismiss, D.C. Precision contended that the government had misconstrued
its claims. D.C. Precision stated that it had in fact only sought
declaratory relief from the government, not monetary damages. Plaintiff
also informed the court that it had since applied for a license from OFAC
on April 6, 1998 to withdraw its assets from Jugobanka. On October 22,
1998, OFAC informed D.C. Precision that its application for a license was
After the government's filing of its reply papers, D.C. Precision
submitted a "Declaration in Further Opposition" to the motion to dismiss
on November 3, 1998. In the Declaration, D.C. Precision implied that
OFAC's denial of its license application was made in bad faith and
retaliatory. The government filed its surreply on November 30, 1998.
A. Jurisdiction and Sovereign Immunity
In any suit where the United States is a defendant, plaintiff must
demonstrate subject matter jurisdiction, a waiver of sovereign immunity,
and that he has a valid cause of action. See Presidential Gardens Assoc.
v. United States, 175 F.3d 132, 139 (2d Cir. 1999) (to be reported at
175 F.3d 132). The waiver of sovereign immunity is a prerequisite to
subject matter jurisdiction, but "the issues of subject-matter
jurisdiction and sovereign immunity are nonetheless `wholly distinct.'"
Id. (citations omitted). Therefore, a demonstration of subject matter
jurisdiction is "not alone sufficient to allow [a suit against the ...