Alfred Dunhill Of London, Inc. v. Cuba

PETITIONER: Alfred Dunhill Of London, Inc.
RESPONDENT: Republic of Cuba, et. al
LOCATION: Republic of Cuba

DOCKET NO.: 73-1288
DECIDED BY: Burger Court (1975-1981)
LOWER COURT: United States Court of Appeals for the Second Circuit

CITATION: 425 US 682 (1976)
REARGUED: Jan 19, 1976
DECIDED: May 24, 1976
ARGUED: Dec 10, 1974
GRANTED: May 13, 1974

ADVOCATES:
Antonin Scalia - for the United States, as amicus curiae, by special leave of Court
Victor S. Friedman - argued and reargued the cause for the petitioner
Victor Rabinowitz - argued and reargued the cause for the respondents

Facts of the case

In 1960, the government of the Republic of Cuba confiscated the businesses of several Cuban cigar manufacturers. The Republic named “interventors” to take over and run the businesses. The interventors continued to ship cigars to foreign purchasers, including in the U.S., and some purchasers mistakenly paid money owed to the original owners for cigars shipped before the takeover. The interventors refused to return the money. The original owners fled to New York and sued the purchasers for trademark infringement and compensation for money paid to the interventors for past shipments. The district court held that the 1960 intervention was an “act of state” so U.S. courts had no power in the matter. Under the act of state doctrine, the courts of a sovereign cannot question the acts of another sovereign within its own borders. The court did, however, have power over the amounts mistakenly paid for pre-intervention shipments. The purchasers were entitled to set off their mistaken payments against amounts due for post intervention shipments. One purchaser, who was entitled to more than it owed, received an affirmative judgment.

The U.S. Court of Appeals for the Second Circuit affirmed in part and reversed in part. The court held that the 1960 act was an “act of state”, but also held that the interventor's refusal to pay back the mistaken payments was also an act of state. The purchasers could still set off the amount they were entitled to against the amount they owed, but the court reversed the ruling for the one purchaser who received an affirmative judgment.

Question

Is the interventor’s refusal to return money mistakenly paid to them an act of state that cannot be questioned in U.S. courts?

Media for Alfred Dunhill Of London, Inc. v. Cuba

Audio Transcription for Oral Argument - December 10, 1974 in Alfred Dunhill Of London, Inc. v. Cuba
Audio Transcription for Oral Reargument - January 19, 1976 in Alfred Dunhill Of London, Inc. v. Cuba

Audio Transcription for Opinion Announcement - May 24, 1976 in Alfred Dunhill Of London, Inc. v. Cuba

Warren E. Burger:

The judgment and opinion of the Court in 73-1288, Alfred Dunhill of London against the Republic of Cuba will be announced by Mr. Justice White.

Byron R. White:

This case, which is here on certiorari to the United States Court of Appeals for the Second Circuit, arises out of the 1960 expropriation of certain Cuban cigar businesses by the Republic Cuba, and their operations thereafter by government representatives called interventors.

At the time of seizure, petitioner Alfred Dunhill Incorporated and other american of Cuban cigars owed various amounts to the Cuban companies for cigars purchased prior to the seizure.

Dunhill paid the sum it owed to interventors, but it was later held that this money belong to the prior owner rather than to interventors.

The District Court accordingly held Dunhill entitled to recover the sum out of the amounts owing for cigars purchased after intervention, and to an affirmative judgment for any access, i.e., for any amount not recovered by way of set-off.

The Court of Appeals affirmed, except with respect to the affirmative judgment, which it reversed on the grounds that the sum, mistakenly paid by Dunhill, had been the subject of an act of state, and that the Republic of Cuba was therefore not open to judgment in the courts of the United States.

We granted certiorari and in an opinion filed today, we hold that no act of state was proved in the courts below with respect to the funds paid by Dunhill for cigars purchased prior to the expropriation.

The judgment of the Court of Appeals is accordingly reversed.

Mr. Justice Powell has filed a concurring opinion, and Mr. Justice Stevens, a statement agreeing with parts one and two of the filed opinion.

Mr. Justice Marshall has filed a dissenting opinion.

He is joined by Justices Brennan, Stewart, and Blackmun.

Warren E. Burger:

Thank you, Mr. Justice White.