The opinion of the court was delivered by: Motley, District Judge.
The Socialist Federal Republic of Yugoslavia ("SFRY") leased property
from plaintiffs for diplomatic offices in the City of New York. As the
SFRY government fell, the United States forced it out of those offices,
and the SFRY stopped paying plaintiffs rent. Plaintiffs filed this action
against the SFRY and five new states that have emerged from the territory
of the SFRY. The five new states moved for summary judgment and to
For the reasons given below, the court holds that this action currently
presents non-justiciable political questions. Accordingly, the court stays
all matters in the case and places the case on the suspense calendar.
A. History of Yugoslav Leasing of Plaintiffs' Properties
Plaintiffs are the owners of the property at 767 Third Avenue in the
City of New York. Compl. ¶ 5.*fn1 During February-March 1981, the
SPRY entered into three leases with plaintiff 767 Third Avenue Associates
("767") through 767's agent Sage Realty Corporation ("Sage"). The leases
were for long-term tenancies for three SFRY governmental agencies
(collectively, "SFRY tenants"): the Consulate General of the SPRY
("Consulate"), the Yugoslav Press and Cultural Center ("Center"), and the
Yugoslav Chamber of Economy ("Chamber"). Ridulfo Aff. ¶¶ 2, 19, 38.
The three leases all expired in late August 1991. Id. In 1991, as the
1981 leases ended, Sage and the SFRY tenants extended them for several
more years. On August 5, 1991, the Chamber lease was extended to August
31, 1996; on October 21, 1991, the Center lease was extended to September
30, 1994; on October 28, 1991, the Consulate lease was extended to August
31, 1996. Id. ¶¶ 4, 22, 40. The SPRY breached these lease extensions,
plaintiffs allege, by failing to pay the SFRY tenants' rent since May 1992
(for the Chamber) and June 1992 (for the Consulate and the Center).
Compl. ¶¶ 24-25, 35-36, 46-47. Plaintiffs claim that the total SFRY
$2,262,224.41 plus interest. Compl. ¶¶ 27, 39, 50.
B. Disintegration of the Socialist Yugoslav Regime
Political upheaval in the SFRY was the spark for the SFRY tenants' rent
delinquencies. Beginning in 1991, the SFRY government began to dissolve
and the SFRY degenerated into civil war. Expressing its opposition to the
conduct of the dominant Yugoslav regime in Belgrade, the United States
government forced the SFRY tenants' offices in New York to close. On May
25, 1992, the United States Department of State ordered that the SFRY
tenants (and other SFRY consulate staff in the United States) close their
offices immediately, terminate operations by May 31, 1992, and have all
staff leave the United States by June 7, 1992. Fed. Republic of
Yugoslavia R. 56.1 Stmt. ¶ 32 & Pls.' Resp. ¶ 32; Ward Aff.
¶ 14. Additionally, Yugoslav assets in the United States were blocked
by presidential executive orders dated May 30, 1992 and June 5, 1992 and
related Treasury Department regulations. Fed. Republic of Yugoslavia R.
56.1 Stmt. ¶¶ 33-35 & Pls.' Resp. ¶¶ 33-35; Ward Aff. ¶¶ 15-17.
C. Plaintiffs' Prior Efforts at Legal Redress
On June 12, 1992, plaintiff 767 and Sage filed a Court of Federal
Claims action against the United States, alleging that the government had
taken their private property for public use and claiming a Fifth
Amendment right to just compensation. Ward Aff. ¶ 2. On December 21,
1993, the Court of Claims dismissed the complaint; the Court of Appeals
for the Federal Circuit affirmed the dismissal. 767 Third Avenue Assocs.
v. United States, 30 Fed. Cl. 216 (Fed.Cl. 1993), aff'd, 48 F.3d 1575
On July 2, 1992, plaintiff 767 filed an action against the three SFRY
tenants for unpaid May-July 1992 rent, 767 Third Avenue Assocs. v.
Consulate Gen'l of the SFRY, Yugoslav Press & Cultural Ctr., & Yugoslav
Chamber of Economy, No. 92 Civ. 4946(MBM). Ward Aff. ¶ 3, Ex. A. As
against the Chamber, a default judgment was entered on December 17,
1992; the Chamber has not paid the $8,802 judgment. Id. ¶¶ 6-8. As
against the Consulate and the Center, the case settled and the action
closed on December 22, 1992; while the Center made the required
$63,765.01 payment, the Consulate has not made its payments under the
settlement. Id. 669-11.
On February 23, 1996, plaintiffs filed the present action for the
entire amount of the SFRY tenants' rent delinquencies under all the 1991
lease extensions. The defendants are the SFRY tenants as well as the five
new states that emerged from the territory of the SFRY (collectively,
"state defendants"): the Federal Republic of Yugoslavia ("FRY"), the
Republic of Bosnia-Hercegovina ("Bosnia"), the Republic of Croatia
("Croatia"), the Former Yugoslav Republic of Macedonia ("Macedonia"), and
the Republic of Slovenia ("Slovenia"). Plaintiffs allege that the five
state defendants are successors to the SFRY's liabilities as sovereign
states that formerly were part of, and that together constitute the whole
of, the SFRY. Compl. ¶¶ 8, 27, 39, 50. Defendant FRY has filed a
crossclaim against the other state defendants.
The five state defendants all have filed essentially similar, but
somewhat divergent, dispositive motions. The FRY has moved for summary
judgment pursuant to Fed.R.Civ.P. 56. Macedonia has moved to dismiss
pursuant to Ped.R.Civ.P. 12(b)(1) for lack of subject matter
jurisdiction. Bosnia, Croatia, and Slovenia have moved to dismiss
pursuant to both Ped.R.Civ.P. 12(b)(1) for lack of subject matter
jurisdiction and Ped.R.Civ.P. 12(b)(6) for failure to state a claim.
Macedonia, Bosnia, and Slovenia also have moved to dismiss the FRY
In a written submission and at oral argument, the United States has
stated its policy regarding the status of the SFRY and the status of each
of the five state defendants. See United States Stmt. of Interest
("U.S.Mem."); Tr. at 66-72. Succession issues aside, the United States
has not recognized the FRY as a sovereign state, but has recognized the
other four non-SFRY nations. Tr. at 69-70. The United States position on
succession is as follows:
It is the fundamental position of the United States at
this point that the Socialist Federal Republic of
Yugoslavia, the SFRY, has ceased to exist and that no
state represents its continuation. . . . [E]ach of the
states that is before your Honor today that has
emerged on its territory, on the territory of the
former SFRY, is a successor. Each has interests in the
assets and liabilities of the former SFRY, but those
interests have not yet been determined by the
Tr. at 66-67; see also U.S. Mem. at 3-4. The executive branch has not
reached a final determination on these succession issues because, it
explains, "the question of how assets and liabilities located in the
United States should then he allocated to the various successors . . .
must be determined by international negotiation, and that international
negotiation has not yet concluded." Tr. at 70. "The present policy of the
United States is to encourage the successors to the SFRY to reach an
internationally negotiated settlement of these issues. Until those
negotiations succeed, or until allocation of assets and liabilities is
settled politically in some other way, claims raising these issues are
unsuitable for judicial resolution." U.S. Mem. at 9-10. As against the
state defendants, the United States concludes that this case is
non-justiciable because "the manner in which assets and liabilities of a
former state are to be allocated amongst one or more successors is not a
question for the courts to decide, but is a political question that is
reserved to the Executive Branch." Tr. at 67; See also U.S. Mem. at 9. As
against the SFRY tenants, the United States does not object to
continuation of this case, U.S. Mem. at 10-12, but reiterates that no
judgment now could be enforced against the state defendants. Tr. at
A. Non-Justiciable Political Questions
During the SFRY's transition to a number of sovereign states, this
judicial district has seen several cases of disputed claims to SFRY
assets and liabilities (collectively, "SFRY asset/liability cases"). See
Sage Realty Corp. v. Jugobanka, D.D., No. 95 Civ. 0323(RJW), 1998 WL
702272 (S.D.N.Y. Oct. 8, 1998) (landlord's claim for unpaid rent against
tenant Yugoslav bank expelled from United States); Beogradska Banka A.D.
Belgrade v. Interenergo, Inc. ("Beogradska Banka"), No. 97 Civ.
2065(JGK), 1998 WL 661481 (S.D.N Y Sept. 24, 1998) (FRY bank's claim of
succession to SFRY bank and loans it held); Jugobank A.D. Belgrade v.
Sidex Int'l Furniture Corp. ("Jugobank "), 2 F. Supp.2d 407 (S.D.N Y
1998) (FRY bank's claim of succession to SFRY bank and debt obligations
it held); Yucyco, Ltd. v. Republic of Slovenia, 984 F. Supp. 209
(S.D.N.Y. 1997) (creditor's claim against Slovenia on SFRY contracts);
Yucyco, Ltd. v. Republic of Croatia, No. 96 Civ. 5559(DC), 1997 WL 728173
(S.D.N Y Nov. 19, 1997) (companion case to id., holding same as against
Croatia); Fed. Republic of Yugoslavia v. Park-71st Corp. ("Park-71st "),
913 F. Supp. 191 (S.D.N Y 1995) (FRY's claim to SFRY-owned New York
Despite the political upheaval underlying the SFRY asset/liability
cases, not all have featured non-justiciable political questions.
"[P]olitical question doctrine must be cautiously invoked, and the law is
clear that the fact that a case touches on foreign affairs does not,
without more, imply that the case involves a political
question." Can v. United States, 14 F.3d 160, 163 (2d Cir. 1994); see
also Kadic v. Karadzic, 70 F.3d 232, 249 (2d Cir. 1995) ("Although . . .
cases present issues that arise in a politically charged context, that
does not transform them into cases involving nonjusticiable political
questions."). Cases pose non-justiciable political questions only to the
extent that they pose "questions . . . beyond the competence and proper
institutional role of the federal courts." Jugobank, 2 F. Supp.2d at
415. Factors that are "[p]rominent on the surface of any case held to
involve a political question" include the following six:
 a textually demonstrable constitutional commitment
of the issue to a coordinate political department; or
 a lack of judicially discoverable and manageable
standards for resolving it; or  the impossibility
of deciding without an initial policy determination of
a kind clearly for nonjudicial discretion; or  the
impossibility of a court's undertaking independent
resolution without expressing lack of the respect due
coordinate branches of government;  or an unusual
need for unquestioning adherence to a political
decision already made;  or the potentiality of
embarrassment from multifarious pronouncements by
various departments on one question.
Baker v. Carr, 369 U.S. 186, 217, 82 S.Ct. 691, 710, 7 L.Ed.2d 663
(1962), quoted in Kadic, 70 F.3d at 249, and Can, 14 F.3d at 163. All of
the above six factors would be present in a judicial allocation of ...