The Supreme Court yesterday issued an opinion in an expropriation case we’ve been following.
No, Bolivarian Republic of Venezuela v. Helmerich & Payne International Drilling Co., No. 15-423 (May 1, 2017), isn’t about redevelopment, or public use and the like, but about the nationalization by Venezuela of oil exploration equipment. The owner of the seized property predictably didn’t get far in the Venezuelan legal process, so brought suit in U.S. federal court for damages for the taking. The DC Circuit, as we noted here, held that Venezuela didn’t enjoy immunity. Game on!
The unanimous Supreme Court disagreed – it turned out that the corporate owner of the drilling equipment is a Venezuelan citizen, and thus, international law isn’t available as a remedy for a taking of its property by the Venezuelan government (the international law remedy is only available to foreigners whose property is wrongly seized).
The narrow issue the Supreme Court decided dealt with how such claims are considered at the jurisdiction stage. Does a claim merely have to be plausible, or does the plaintiff have to be right about the facts and law? The Court unanimously (minus Justice Gorsuch, who sat out) held that it is the latter:
In our view, a party’s nonfrivolous, but ultimately incorrect, argument that property was taken in violation of international law is insufficient to confer jurisdiction. Rather, state and federal courts can maintain jurisdiction to hear the merits of a case only if they find that the property in which the party claims to hold rights was indeed“property taken in violation of international law.” Put differently, the relevant factual allegations must make out a legally valid claim that a certain kind of right is at issue (property rights) and that the relevant property was taken in a certain way (in violation of international law). A good argument to that effect is not sufficient. But a court normally need not resolve, as a jurisdictional matter, disputes about whether a party actually held rights in that property; those questions remain for the merits phase of the litigation.
Slip op. at 2.
Even if this issue doesn’t float your boat, be sure to read the facts section of the opinion by Justice Breyer (and in the DC Circuit’s opinion) about how Venezuela grabbed these assets:
According to stipulated facts, by early 2010 the Venezuelan Government had failed to pay more than $10 million that it owed the Subsidiary. At that point the government sent troops to the equipment yard where the rigs were stored, prevented the Subsidiary from removing the rigs, and issued a “‘Decree of Expropriation’” nationalizing the rigs. App. 72–74. Subsequently, the president of the oil development entities led a rally at the Subsidiary’s offices, where he referred to the Venezuelan Subsidiary as an “‘American company’” with “‘foreign gentlemen investors.’” Id., at 54.
Slip op. at 2.
On this blog, we often complain about government behavior. But things like this remind us that it could get worse — much worse — and that we’re thankful that we live under the system that we do.