Banco Nacional de Cuba v. Sabbatino
376 U.S. 398 (1964)

  • A US sugar distributor, Farr Whitlock and Co. contracted with a US-owned sugar producer in Cuba, Compania Azucarera Vertientes-Camaguay de Cuba (CAV), to import sugar into the US.
  • As part of a trade dispute, the government of Cuba nationalized their sugar industry and seized the assets of several US-owned sugar producers, including CAV.
  • CAV still made the delivery, but Farr didn't send the payment to the Cuban government, instead they paid CAV's legal representative in the US, Sabbatino.
  • Banco National de Cuba (BNC) sued Sabbatino in US Court to get them to hand over the money for the sugar.
    • BNC argued that the Cuban nationalization was an official Act of State and should be honored by the US.
      • The Act of State Doctrine says that the propriety of decisions of other countries relating to their internal affairs would not be questioned in US courts.
    • Sabbatino argued that the Act of State Doctrine was inappropriate because:
      • The act in question was a violation of international law;
      • The doctrine should not be applied unless the Executive branch asks the court to do so;
      • Cuba had brought the suit as a plaintiff and had given up its sovereign immunity.
  • The Trial Court found for Sabbatino. BNC appealed.
  • The Appellate Court affirmed. BNC appealed.
  • The US Supreme Court reversed.
    • The US Supreme Court found that the policy of US Federal courts would be to honor the Act of State Doctrine.
      • The Court found that the Cuban seizure did not violate international law, because there was no clear international opinion that a seizure of land or property in a country by the government of that country was illegal.
      • The Court found that there was no need for the Executive branch to ask the courts to apply the Act of State Doctrine.
        • The Court found that it should be assumed to apply because if even a single court made a mistake and failed to apply it, it could mess up US relations with other countries.
      • The Court found that the Act of State Doctrine still applied, even thought the State was a plaintiff.
        • Similar to the idea of sovereign immunity where States can sue, but cannot be sued.
  • In response to this decision, Congress passed the Second Hickenlooper Amendment (aka the Sabbatino Amendment) that revoked the presumption in favor of the validity of the Act of State Doctrine.