Act of State Doctrine. W. S. Kirkpatrick & Co learned that the Republic of Nigeria was interested in contracting for the construction and equipping of a medical center in Nigeria. Kirk-patrick, with the aid of a Nigerian citizen, secured the contract as

Question

a result of bribing Nigerian officials. Nigerian law prohibits both the payment and the receipt of bribes in connection with the awarding of government contracts, and the U.S. Foreign Corrupt Practices Act of 1977 expressly prohibits U.S. firms and their agents from bribing foreign officials to secure favorable contracts. Environmental Tectonics Corp, International (ETC), an unsuccessful bidder for the contract, learned of the bribery and sued Kirkpatrick in a federal district court for damages. The district court granted summary judgment for Kirkpatrick on the ground that resolution of the case in favor of ETC would require imputing to foreign officials an unlawful motivation (the obtaining of bribes) and accordingly might embarrass the Nigerian government or interfere with the conduct of U.S. foreign policy. Was the district court correct in assuming that the act of state doctrine barred ETC's action against Kirkpatrick? What should happen on appeal? Discuss fully.

Answer 1

Act of state doctrine
The United States Supreme Court held that the action was not barred by the act of state doc-trine. The Court stated that in every case in which it had held the act of state doctrine applica-ble, "the relief sought * * * would have required a court in the United States to declare invalid the official act of a foreign [government] performed within its own territory." In the present case, the Court held that the validity of a foreign government's act was not in question. "The short of the matter is this: Courts in the United States have the power, and ordinarily the obligation, to decide cases and controversies properly presented to them. The act of state doctrine does not establish an exception for cases and controversies that may embarrass foreign governments, but merely requires that, in the process of deciding, the acts of foreign [governments] taken within their own jurisdictions shall be deemed valid. That doctrine has no application to the present case because the validity of no foreign [government] act is at issue."