The act of state doctrine is a federal common law rule that requires U.S. courts to treat the official acts of a foreign government, carried out within that government’s own territory, as legally valid. A court applying the doctrine will not sit in judgment on whether the foreign sovereign’s action was lawful, even when the action injured an American citizen or company. It is a rule about what courts refuse to decide, not about which courts have jurisdiction, and it applies only when a lawsuit would actually require a judge to invalidate the foreign act.
Where the Rule Comes From
The doctrine goes back to Underhill v. Hernandez in 1897, where an American citizen sued a Venezuelan military commander for detaining him during a revolution. The Supreme Court refused to evaluate the commander’s conduct, holding that “every sovereign state is bound to respect the independence of every other sovereign state, and the courts of one country will not sit in judgment on the acts of the government of another, done within its own territory.”1Justia. Underhill v. Hernandez
The modern version comes from Banco Nacional de Cuba v. Sabbatino in 1964. After Cuba nationalized sugar owned by a company with American investors, the Court held that U.S. courts would not examine the validity of the expropriation, even on a claim that it violated customary international law.2Justia. Banco Nacional de Cuba v. Sabbatino The Court grounded the doctrine in the “far greater authority of the political branches of government relative to the judicial branches in the area of foreign affairs.” Because the doctrine is a judicial policy rather than a constitutional command, Congress can override it by statute.
When the Doctrine Actually Applies
The doctrine is narrower than most people expect. It is not triggered every time a lawsuit involves something a foreign government did. The Supreme Court drew the line clearly in W.S. Kirkpatrick & Co. v. Environmental Tectonics Corp. (1990), a case about bribes paid to Nigerian officials to win a government contract. The losing bidder sued, and Kirkpatrick argued the doctrine barred the claim because resolving it required examining Nigeria’s contracting decisions.
The Court rejected that argument unanimously. The doctrine applies only when a court must “declare invalid the official act of a foreign sovereign performed within its own territory.” Proving that a contract was procured through bribery does not invalidate any Nigerian act; it establishes facts about how the contract came to be. As the Court put it, “Act of state issues only arise when a court must decide—that is, when the outcome of the case turns upon—the effect of official action by a foreign sovereign. When that question is not in the case, neither is the act of state doctrine.”3Justia. Kirkpatrick and Co. v. Environmental Tectonics Corporation, International
That distinction does most of the practical work. A suit that requires proving foreign officials behaved badly, took bribes, or acted with corrupt motives does not trigger the doctrine. A suit that requires stripping a foreign government’s act of its legal effect does.
Why Courts Follow It
Two ideas support the rule. The first is separation of powers. Foreign policy belongs to the president and Congress, not federal judges. When a court declares that a foreign government acted unlawfully inside its own borders, it risks contradicting positions the executive branch has taken or forcing confrontations the political branches would rather manage through diplomacy.
The second is international comity, the mutual respect nations extend to each other’s legal systems. If U.S. courts routinely invalidated the internal decisions of foreign governments, other nations’ courts might do the same to American ones. Following the doctrine does not mean a U.S. court approves of the foreign act. It means the courtroom is not the right venue to challenge it.
The Main Exceptions
The Hickenlooper Amendment
Congress responded to Sabbatino by passing what is commonly called the Second Hickenlooper Amendment, codified at 22 U.S.C. § 2370(e)(2). The amendment prohibits courts from refusing, on act of state grounds, to decide property claims where a foreign government confiscated property after January 1, 1959, in violation of international law.4Office of the Law Revision Counsel. 22 USC 2370 – Prohibitions Against Furnishing Assistance If a foreign government seized property without the compensation international law requires, a court cannot use the doctrine to avoid the case. The statute has one safety valve: the President can file a suggestion asking the court to apply the doctrine anyway because U.S. foreign policy interests require it.
The Treaty Exception
The Sabbatino Court itself left an opening: the doctrine may not apply “in the absence of a treaty or other unambiguous agreement regarding controlling legal principles.”2Justia. Banco Nacional de Cuba v. Sabbatino Where a treaty between the U.S. and the foreign government supplies clear rules for the dispute, courts have firmer footing to reach the merits, because they are applying agreed obligations rather than making independent judgments about another nation’s sovereignty.
Commercial Activity
Whether the doctrine reaches a foreign government’s commercial dealings, as distinct from its sovereign or governmental acts, remains unsettled. In Alfred Dunhill of London, Inc. v. Republic of Cuba (1976), a plurality suggested the doctrine should not extend to purely commercial activity, but only four justices joined that reasoning, so it never became binding precedent.5Justia. Alfred Dunhill of London, Inc. v. Republic of Cuba Lower courts have split. As a practical matter, the more a foreign government acts like a private business, the weaker its act of state defense tends to be, but there is no clean rule.
Jus Cogens Violations
Some federal courts have held that the doctrine cannot shield acts that violate jus cogens norms, the small set of international law principles considered so fundamental that no nation can opt out of them, including prohibitions on genocide, slavery, and torture. The Ninth Circuit applied this reasoning to allow human rights and environmental tort claims to proceed.6Digital Commons. The International Law Exception to the Act of State Doctrine – Redressing Human Rights Abuses in Papua New Guinea The Supreme Court has not endorsed the exception, so its availability depends on the circuit.
The Bernstein Question
A recurring question is whether the Executive Branch can signal to courts that it has no objection to adjudicating a particular foreign act, effectively lifting the doctrine case by case. This idea, known as the Bernstein exception, has never been endorsed or rejected by the Supreme Court. In Sabbatino, the Court noted it had “never had occasion to pass upon the so-called Bernstein exception” and declined to do so. Some lower courts treat executive suggestions as relevant, but no Supreme Court authority confirms that the Executive Branch can toggle the doctrine off on its own.
How It Differs From Sovereign Immunity
These two doctrines are easy to confuse. Sovereign immunity, governed by the Foreign Sovereign Immunities Act of 1976, asks whether a U.S. court can hear the case at all. If a foreign government is immune, the court has no jurisdiction and the case is dismissed at the threshold.7Office of the Law Revision Counsel. 28 USC 1602 – Findings and Declaration of Purpose
The act of state doctrine assumes the court already has jurisdiction. It governs how the court decides the case: whether it must treat a foreign government’s act as legally valid rather than assess its lawfulness. A foreign government can lose its sovereign immunity under one of the FSIA exceptions and still benefit from the act of state doctrine if the lawsuit would require declaring its official act invalid. The two defenses run on separate tracks, and defeating one does not defeat the other.
What It Means for a Real Claim
The doctrine surfaces most often in nationalization and expropriation cases. When a foreign government seizes private assets within its borders, whether by taking over an oil company, confiscating farmland, or nationalizing a bank, the doctrine generally prevents U.S. courts from ruling the seizure illegal. If the Hickenlooper Amendment applies, the case can proceed; outside that statutory carve-out, the remedy is diplomatic rather than judicial.
The doctrine also stops U.S. courts from serving as appellate courts for foreign legal systems. When a foreign government issues a regulatory order, revokes a license, or enters a judgment through its own courts on local matters, U.S. courts will not review whether the foreign government followed its own laws correctly. The Kirkpatrick limit matters here. A lawsuit that only requires proving facts about how foreign officials behaved, without challenging the legal validity of any government act, is not blocked, and the case proceeds normally.3Justia. Kirkpatrick and Co. v. Environmental Tectonics Corporation, International
For anyone with a grievance against a foreign government, the first question to ask is whether winning would require a court to declare that government’s official act invalid. If yes, the doctrine probably applies unless an exception fits. If no, because the claim challenges private conduct, commercial behavior, or simply proves facts that happen to involve foreign officials, the doctrine should not stand in the way.