uniquely federal interest

In 1985, DEA agent Enrique Camarena-Salazar was captured on assignment in Mexico, taken to a house in Guadalajara, tortured over the course of a two-day interrogation, and murdered. Based in part on eyewitness testimony, DEA officials in the United States came to believe that respondent Humberto Alvarez-Machain, a Mexican physician, was present at the house and acted to prolong the agent's life, thereby extending the interrogation and torture. In 1990, a federal grand jury in the Central District of California indicted Alvarez for the torture and murder of Camarena-Salazar, and the district court issued a warrant for his arrest. The DEA asked the Mexican government for help in getting Alvarez into the United States, but when requests and negotiations proved fruitless, the DEA approved a plan to hire Mexican nationals to seize Alvarez and bring him to the United States for trial. Petitioner Jose Francisco Sosa participated in the group that abducted Alvarez from his house, held him overnight in a motel, and brought him by private plane to El Paso, Texas, where he was arrested by federal officers. Once in American custody, Alvarez moved to dismiss the indictment on the ground that his seizure was outrageous governmental conduct and violated the extradition treaty between the United States and Mexico. The district court agreed, the Ninth Circuit affirmed, and the Supreme Court reversed, holding that the fact of Alvarez's forcible seizure did not affect the jurisdiction of a federal court. The case was tried in 1992 and ended at the close of the government's case when the district court granted Alvarez's motion for a judgment of acquittal. In 1993, after returning to Mexico, Alvarez began the civil action at issue here. He sued Sosa, Mexican citizen and DEA operative Antonio Garate-Bustamante, five unnamed Mexican civilians, the United States, and four DEA agents. Alvarez sought damages from the United States under the FTCA alleging false arrest and from Sosa under the ATS for a violation of the law of nations. The district court granted the government's motion to dismiss the FTCA claim but awarded summary judgment and $25,000 in damages to Alvarez on the ATS claim. A three-judge panel of the Ninth Circuit affirmed the ATS judgment but reversed the dismissal of the FTCA claim. A divided en banc court reached the same conclusion. The Supreme Court granted certiorari in the companion cases to clarify the scope of both the FTCA and the ATS.

On April 5, 1983, David A. Boyle, a United States Marine helicopter copilot, was killed when the CH-53D Sea Stallion helicopter he was flying crashed into the ocean off the coast of Virginia Beach, Virginia, during a training exercise. Boyle and one other crew member were trapped inside the sinking helicopter and drowned, while three others escaped. His father, the petitioner, brought a diversity action against the helicopter's manufacturer, respondent United Technologies Corporation (Sikorsky Division), in the United States District Court for the Eastern District of Virginia. The petitioner alleged under Virginia tort law that the manufacturer had defectively designed the copilot's emergency escape system because the hatch opened outward rather than inward and its release mechanism was obstructed. The petitioner also alleged that the manufacturer had negligently failed to warn the Navy of dangers in the escape hatch and system. The jury returned a general verdict in the petitioner's favor and awarded $725,000. The District Court denied the manufacturer's motion for judgment notwithstanding the verdict. The Court of Appeals for the Fourth Circuit reversed and remanded with directions to enter judgment for the manufacturer. It held that the state-law tort action was barred by the government contractor defense it had recognized in McKay v. Rockwell International Corp., under which a contractor is not liable for design defects if the United States approved reasonably precise specifications, the equipment conformed to those specifications, and the supplier warned the United States about dangers known to the supplier but not to the United States. The court concluded that the evidence was insufficient as a matter of law to establish a violation of the third condition. The Supreme Court granted certiorari to consider the propriety of the government contractor defense and to resolve a conflict among the Courts of Appeals. The case reached the Court after the Fourth Circuit's 1986 decision in 792 F.2d 413, following the 1983 crash and the subsequent district court trial.

In February and July of 1960 respondent Farr, Whitlock & Co., an American commodity broker, contracted to purchase Cuban sugar free alongside the steamer from a wholly owned subsidiary of Compania Azucarera Vertientes-Camaguey de Cuba (C. A. V.), a Cuban corporation whose capital stock was owned principally by United States residents, with payment to be made in New York upon presentation of shipping documents and a sight draft. On July 6, 1960, Congress amended the Sugar Act of 1948 to permit reduction of Cuba's sugar quota and President Eisenhower exercised that power the same day. Cuba responded by enacting Law No. 851, which authorized the President and Prime Minister to nationalize by forced expropriation property or enterprises in which American nationals held an interest. Between August 6 and 9 the sugar covered by the Farr, Whitlock contract was loaded onto the S. S. Hornfels at the Cuban port of Jucaro. On August 6 the Cuban President and Prime Minister issued Executive Power Resolution No. 1 pursuant to Law No. 851, ordering compulsory expropriation of C. A. V. and other listed American-owned companies. To obtain consent for the vessel to sail, Farr, Whitlock on August 11 entered identical contracts with Banco Para el Comercio Exterior de Cuba, an instrumentality of the Cuban government, and the Hornfels sailed for Morocco on August 12. Banco Exterior assigned the bills of lading to petitioner Banco Nacional de Cuba, another Cuban government instrumentality, which instructed its New York agent to deliver the documents and a sight draft for $175,250.69 to Farr, Whitlock in exchange for payment. Farr, Whitlock refused the initial tender after receiving notice of C. A. V.'s claim to the proceeds, accepted the documents only after C. A. V. agreed to indemnify it, negotiated the bills of lading to its customer, received payment, and refused to remit the proceeds. The New York Supreme Court appointed respondent Sabbatino temporary receiver of C. A. V.'s New York assets and enjoined Farr, Whitlock from removing the funds from the state. Pursuant to court order Farr, Whitlock transferred the funds to Sabbatino to abide the event of a judicial determination as to their ownership. Petitioner then instituted this action in the Federal District Court for the Southern District of New York. Alleging conversion of the bills of lading, it sought to recover the proceeds thereof from Farr, Whitlock and to enjoin the receiver from exercising any dominion over such proceeds. The District Court sustained jurisdiction, found the sugar located in Cuba at the time of expropriation, concluded that the expropriation violated international law on three grounds, and granted summary judgment against petitioner. The Court of Appeals affirmed on similar grounds after considering two additional State Department letters, and this Court granted certiorari.

In 1999, the California legislature enacted the Holocaust Victim Insurance Relief Act (HVIRA). It requires any insurer doing business in the state to disclose details of all life, property, liability, health, annuities, dowry, educational, or casualty insurance policies sold in Europe between 1920 and 1945 by the insurer itself or any related company. This includes any parent, subsidiary, reinsurer, successor in interest, managing general agent, or affiliate. The required disclosures include the current status of each policy, the city of origin or domicile of each policyholder, and the names of the beneficiaries. All information is placed in a central public registry. Noncompliance triggers mandatory suspension of the company's license to do business in California. There are also misdemeanor sanctions for falsehood in required representations about whether and to whom the proceeds of each policy have been distributed. The Act arose against the backdrop of Nazi-era confiscations of Jewish insurance policies and decades of post-war diplomacy. After World War II, the United States participated in the Potsdam and Yalta Conferences and the 1946 Paris Agreement on reparations. The western Allies decided in the London Debt Agreement to put off consideration of claims arising out of the second World War until the final settlement of the problem of reparation. Following German reunification, class-action lawsuits flooded U.S. courts against companies that did business in Germany during the Nazi era. This prompted the federal government to negotiate a resolution. In July 2000, the United States and Germany signed the German Foundation Agreement. Germany established a foundation funded with 10 billion deutsch marks contributed equally by the government and German companies to compensate victims of the National Socialist era. The United States agreed to file statements in U.S. courts that the foundation should be the exclusive remedy for claims against German companies. It also agreed to use its best efforts to encourage state and local governments to respect the foundation as the exclusive mechanism. Parallel agreements were reached with Austria and France. The pacts endorsed the International Commission on Holocaust Era Insurance Claims (ICHEIC) for voluntary handling of insurance claims. This included relaxed standards of proof and procedures for policy information. After HVIRA took effect, administrative subpoenas were issued against subsidiaries of European insurers participating in the ICHEIC. Deputy Secretary of the Treasury Stuart Eizenstat wrote letters to California officials. He stated that the statute damaged the cooperative spirit required for the ICHEIC. He noted that it threatened to derail the German Foundation Agreement by denying companies the legal peace they sought. Several American and European insurance companies and the American Insurance Association then sued California Insurance Commissioner John Garamendi in federal district court. The district court issued a preliminary injunction and later granted summary judgment on due process grounds. The Ninth Circuit rejected the foreign affairs challenge. The Supreme Court granted certiorari in 2003.