Federal Question Jurisdiction in International Disputes - Part 1 Chapter 22 - The Practice of International Litigation - 2nd Edition
Lawrence W. Newman has been a partner in the New York office of Baker & McKenzie since 1971, when, together with the late Professor Henry deVries, he founded the litigation department in that office. He is the author/editor of 4 works on international litigation/arbitration.
Michael Burrows, Formerly, Of Counsel, Baker & McKenzie, New York.
The decision of the United States Supreme Court in Erie R. Co. v. Tompkins, 304 U.S. 64 (1938), is commonly cited for the proposition that there is “no federal general common law.” Nevertheless, the Supreme Court has recognized both the need and the authority to formulate “federal common law” in certain restricted areas. Federal common law has developed along two lines: First, when a uniform federal rule is required to protect a uniquely federal interest, and, second, when Congress has specifically authorized the federal courts to develop substantive law. With regard to the first category, federal common law has been applied to cases involving issues of international law, and, more specifically, the issue of relations between the United States and a foreign sovereign.
Federal common law has been held to support federal question jurisdiction under 28 U.S.C. § 1331 in the same way as a federal statute, treaty or the Constitution. This article discusses two recent cases from the Fifth Circuit Court of Appeals—Torres v. Southern Peru Copper Corp., 113 F.3d 540 (5th Cir. 1997) and Marathon Oil Co. v. Ruhrgas, A.G., 115 F.3d 315 (5th Cir. 1997)—in which that court reached opposite conclusions with respect to the existence of federal question jurisdiction based on federal common law.
Federal Common Law as a Basis for Federal Question Jurisdiction
The concept that federal common law may support federal question jurisdiction when the claim brought necessarily involves international law and relationships between the United States and a foreign sovereign is well settled and, indeed, is set forth in Section 111 of the Restatement (Third) of the Foreign Relations Law of the United States. In pertinent part, Section 111(2) states that “Cases arising under international law or international agreements of the United States are within the Judicial Power of the United States and, subject to the Constitution and statutory limitations and requirements of justiciability, are within the jurisdiction of the federal courts.”
Federal courts have found federal question jurisdiction to exist with regard to issues of international law and international relations even when the plaintiff’s complaint alleges only claims based on state law. For example, in Republic of Philippines v. Marcos, 806 F.2d 344 (2d Cir. 1986), the government of the Philippines brought an action in New York state court against Ferdinand Marcos, the deposed dictator of the Philippines, to attach certain properties in New York that were alleged to have been purchased by Marcos with funds of the people of the Philippines. The court noted that the complaint, on its face, was brought under a state law theory of “conversion, requiring the imposition of a constructive trust or equitable liens upon the ‘ill-gotten’ gains.” The court nevertheless held that, under the plaintiff’s well pleaded complaint, international relations were sufficiently implicated to support federal jurisdiction, stating; “An action brought by a foreign government against its former head of state arises under federal common law because of the necessary implications of such an action for United States foreign relations.”