W.S. Kirkpatrick & Company, Inc. v. Environmental Tectonics Corporation, International

PETITIONER: W.S. Kirkpatrick & Company, Inc.
RESPONDENT: Environmental Tectonics Corporation, International
LOCATION: United States District Court for the District of New Jersey

DOCKET NO.: 87-2066
DECIDED BY: Rehnquist Court (1988-1990)
LOWER COURT: United States Court of Appeals for the Third Circuit

CITATION: 493 US 400 (1990)
ARGUED: Nov 27, 1989
DECIDED: Jan 17, 1990

ADVOCATES:
Edward Brodsky - on behalf of Petitioners
Thomas W. Merrill - as amicus curiae, supporting Respondents
Thomas B. Rutter - on behalf of Respondents

Facts of the case

In 1981, the Republic of Nigeria was interested in building an aeromedical center at Kaduna Air Force Base. Both W.S. Kirkpatrick & Co., Inc. (Kirkpatrick) and Environmental Tectonics Corporation International (Environmental Tectonics) bid for the contract. Kirkpatrick established a deal with a Nigerian citizen who would attempt to ensure Kirkpatrick received the contract. In exchange, Kirkpatrick would pay two Panamanian companies owned by the Nigerian individual 20% of the contract price, which would be distributed as bribes to Nigerian officials. Kirkpatrick succeeded in obtaining the contract, and Environmental Tectonics brought the issue to the attention of the authorities. The United States Attorney for the District of New Jersey brought charges against Kirkpatrick and its CEO, and both pled guilty.

Environmental Tectonics sued Kirkpatrick in district court and sought damages under anti-racketeering acts. Kirkpatrick moved to dismiss the complaint by arguing that the action was barred by state doctrine that prohibited courts from considering cases that would result in embarrassment for a sovereign nation or interfere with US foreign policy. The district court treated the motion as one for summary judgment and granted the motion in favor of Kirkpatrick. The district court held that Environmental Tectonics would have to prove that Nigerian officials accepted bribes and allowed the bribes to influence governmental decisions. The US Court of Appeals for the Third Circuit reversed and held that Kirkpatrick had not met its burden to show that the case could not proceed.

Question

Does state doctrine prohibit a US court from adjudicating a case that would attribute unlawful acts to foreign officials acting in their official capacity?

Media for W.S. Kirkpatrick & Company, Inc. v. Environmental Tectonics Corporation, International

Audio Transcription for Oral Argument - November 27, 1989 in W.S. Kirkpatrick & Company, Inc. v. Environmental Tectonics Corporation, International

Audio Transcription for Opinion Announcement - January 17, 1990 in W.S. Kirkpatrick & Company, Inc. v. Environmental Tectonics Corporation, International

William H. Rehnquist:

The opinion of the Court in No. 87-2066, Kirkpatrick and company versus Environmental Tectonics Corporation will be announced by Justice Scalia.

Antonin Scalia:

This case is here on petition for certiorari to the Third Circuit.

The question it presents is whether the act of state doctrine bars the District Court from adjudicating a dispute between the parties.

According to the allegations of Tectonics’ complaint, Kirkpatrick Company and Tectonics were in competition for a particular contract form the Republic of Nigeria.

Again, according to those allegations, Kirkpatrick Company won the contract by bribing certain Nigerian officials.

Tectonics sued Kirkpatrick Company certain of its officers and others under various federal and state statutes for damages from the loss of the contract.

Both parties agree that Nigerian law prohibits both the payment and the receipt of such bribes.

The District Court granted petitioner’s motion for summary judgment that is Kirkpatrick’s motion, holding that the act of state doctrine barred it from entertaining a cause of action it would require it to find that a foreign official’s act was the result of an unlawful motivation, in this case, the receipt of bribes.

The court thought that such a finding by a court might embarrass the Executive Branch in its dealings with the Republic of Nigeria and that the act of state doctrine which was designed to prevent such embarrassment therefore, barred adjudication of the dispute.

The Court of Appeals for the Third Circuit disagreed and reversed holding that there was nothing in this case to indicate the judicial inquiry in to the events alleged in the complaint would, in any way, embarrass the conduct of foreign relations by the Executive.

We affirm the judgment of the Court of Appeals because the factual predicate for the application of the act of state doctrine is absent in this case.

Nothing in the present suit requires a court to declare invalid and thus, ineffective as a rule of decision the official act of a foreign sovereign.

It is not enough to say that adjudication of the dispute might cause embarrassment to the Executive in conducting affairs with the Republic of Nigeria that such a concern may be one of the policies underlying the act of state doctrine does not mean that the doctrine is applicable whenever that concern is implicated.

The doctrine is not a rule of abstention permitting courts to refrain from adjudicating controversies whenever to do so would cause embarrassment to the Executive Branch rather, it is a rule of decision that requires courts in the process of deciding controversies to deem valid the official acts of foreign sovereigns performed within their jurisdictions.

Accordingly, the judgment of the Third Circuit is affirmed and the decision is unanimous.