IN THE UNITED STATES COURT OF FEDERAL CLAIMS
DEFENSE PROCUREMENT DIVISION, )
TAIPEI ECONOMIC AND CULTURAL )
REPRESENTATIVE OFFICE IN THE )
UNITED STATES, )
UNITED STATES, )
DEFENDANT'S REPLY IN SUPPORT OF
MOTION TO DISMISS FOR LACK OF JURISDICTION
Defendant, the United States, respectfully submits this reply in support of our motion to dismiss.
Plaintiff is the non-governmental entity authorized to conduct unofficial relations with the United States on behalf of the people on Taiwan. Plaintiff's complaint seeps refunds of Harbor Maintenance Tax (HMT) payments based upon the Export Clause of the Constitution (First Cause of Action), the Due Process Clause of the Fifth Amendment (Second Cause of Action), and an alleged exemption from taxation contained in an agreement between plaintiff and the non-governmental entity authorized to conduct unofficial relations with the people on Taiwan on behalf of the United States (Third Cause of Action). With respect to the third cause of action, plaintiff alleges that this Court possesses jurisdiction over claims arising under the agreement pursuant to the Tucker Act, 28 U.S.C. S 1491(a)(1).
As we demonstrated in our initial brief, counts one and two may not proceed in this Court for the same reasons that the
claims filed by other exporters may not proceed in this court. count three, however, should be dismissed upon a separate ground. The claim is based upon an agreement that should be considered a "treaty" within the meaning of 28 U.S.C. S 1502 and, thus, is beyond the jurisdiction of this Court.
We have consulted with the United States Department of State concerning this matter. This brief expresses the view of that Department, with which we concur, that the agreement should be so construed. The views of the Executive Branch concerning matters
of foreign policy are entitled to great weight. See Taiwan v..
United States District court for the Northern District of California, 128 F.3d 712, 718 (9th Cir. 1997) (holding that the state Department's interpretation of a statute addressing foreign policy matters "is entitled to substantial deference in light of the 'primacy of the Executive in the conduct of foreign relations' and the Executive Branch's lead role in foreign policy") (quoting First Nat'l City Bank v. Banco Nacional de Cuba, 406 U.S. 759, 767 (1972) (plurality)).
In addition, count three should be dismissed based upon 28 U.S.C. 5 1500, because plaintiff has an identical claim for violation of the treaty pending before the Court of International Trade (CIT). Although we will argue - and plaintiff seemingly concedes - that the claim may not proceed in the CIT, while it
remains pending there, this Court lacks jurisdiction-1
should be dismissed for the same reasons that other (continued...)
conducted through the American Institute in Taiwan, on behalf of the
United States, and plaintiff, the Taipei Economic and Cultural
Representative Office, on behalf of the people on Taiwan. Those entities
are parties to an Agreement on Privileges, Exemptions and
Immunities. In count three of the complaint, plaintiff challenges
the Harbor Maintenance Tax as a violation of an alleged exemption from
taxation contained in the Agreement.
The Tucker Act's waiver of sovereign immunity is limited by 28 U.S.C. � 1502, which divests this Court of jurisdiction to entertain a claim growing out of a treaty. Plaintiff's count three, a request for money damages based upon an alleged breach of a congressionally-authorized agreement, is such a claim, and should be dismissed for lack of jurisdiction.
Like its predecessor, the United States Court of Claims, the United States Court of Federal Claims is a court of limited
exporters may not proceed in this court. Following our consultations with the Department of State, we explain in this brief the independent reasons that this Court lacks jurisdiction to entertain count three. Because these reasons are explained in full in this, our reply brief, we would not oppose plaintiff's request to respond to these arguments. We note, however, that we did cite to 28 U.S.C. 5 1.502 in our initial brief; in its opposition plaintiff failed to cite any authority that supports jurisdiction in this Court.
jurisdiction. Dynalectron Corn. v. United States, 4 Cl. Ct. 424, 428, aff'd, 758 F.2d 665 (Fed. Cir. 1984). Absent congressional consent to entertain a claim against the United States, this Court lacks authority to grant relief. United States v. Testan, 424 U.S. 392, 399 (1976]; United States v. Sherwood, 312 U.S. 584, 586 (1941).
A waiver of sovereign immunity, and thus consent to be sued, must be expressed unequivocally and may not be implied. Library of Congress v. Shaw, 478 U.S. 310 (1986); United States v. Ring, 395 U.S. 1, 4 (1969). As the United States Court of Appeals for the Federal Circuit has stated, "[i]n construing a statute waiving the sovereign immunity of the United States, great care must be taken not to expand liability beyond that which was explicitly consented to by Congress." Fidelity Construction Co. v. United States, 700 F.2d 1379, 1387 (Fed. Cir.), cert. denied, 464 U.S. 826 (1983).
Section 1502 of Title 28, United States Code, limits the waiver of sovereign immunity contained in the Tucker Act. section 1502 states:
Except as otherwise provided by Act of congress, the United States Court of Federal Claims shall not have jurisdiction of any claim against the United States growing out of or dependent upon any treaty entered into with foreign nations.
Plaintiff's count three satisfies both requirements of the statute, placing it beyond this Court's
entered into with [a] foreign nation" within the meaning of the statute; plaintiff's claim "grows out of" that agreement.
The word "treaty" generally has a broader meaning than just those documents that satisfy the treaty clause of the Constitution. The word "treaty . . . ordinarily refers to an international agreement concluded between sovereigns, regardless of the manner in which the agreement is brought into force." Weinberger v. Rossi, 456 U.S. 25, 29 (1982). See also B. Altman & Co. v. United States, 224 U.S. 583 (1912) (construing the word "treaty" in a statute to "include international agreements concluded by the President under congressional authorization").
The Court of Claims also has equated "international executive agreements with treaties for purposes of Section 1502." Hughes Aircraft Co. v. United States, 534 F.2d 889 (Ct. C1. 1976). Thus, in Hughes, a Memorandum of Understanding between the United States and the United Kingdom "neither proclaimed by the President, ratified by the Senate, nor submitted for ratification, as required for treaty status pursuant to Article II, Section 2 of the Constitution," was nonetheless considered to be a "treaty" for purposes of section 1502. 534 F.2d at 903 n.17; See also Yassin v. United States, 76 F. Supp. 509, 516 (Ct. Cl. 1948); Great Western Ins. Co. v. Unite States, 112 U.S. 193
(1884]. The Hughes Court explained:
[T]he reason for this equation is that the fundamental separation-of-powers policy underlying [section] 1502, i.e., to avoid undue judicial interference (e.g., by construction of particular treaty terms and provisions) with the Executive Branch's
conduct of foreign relations, is equally applicable to both forms of international compact.
534 F.2d at 903 n.17.
Interference with the conduct of foreign relations is similarly implicated here. Although the agreement cited in complaint is not a "treaty" ratified by Congress, it does facilitate the conduct of unofficial foreign relations with the people on Taiwan, as explained below.
After the United States established diplomatic relations with the People's Republic of China in 1979, and ended relations with the Republic of China (Taiwan), Congress enacted the Taiwan Relations Act (TRA). The TRA was enacted "to promote the foreign policy of the United states" and "to help maintain peace, security, and stability in the Western Pacific." 22 U.S.C. � 3301(a). The Act declared that "the policy of the United States" was "to preserve and promote extensive, close and friendly . . . relations between the people of the United States and the people on Taiwan." 22 U.S.C. S 3301(b). Congress sought to "promote the foreign policy of the United States by authorizing the continuation of commercial, cultural, and other relations between the people of the United States and the people on Taiwan." 22 U.S.C. � 3301(a)(2).
Under the Act, unofficial relations are conducted on behalf of the United States by a nonprofit corporation called the American Institute in Taiwan (AIT), and by a counterpart organization on behalf of the people on Taiwan. 22 U.S.C.
� 3305(a); 3309(a). That Taiwan instrumentality is plaintiff, the Taipei Economic and Cultural Representative Office (TECRO), formerly known as the Coordination Council for North American Affairs (CCNAA). Exec. Order No. 13014, 61 Fed. Reg. 42,963 (1996); Exec. Order No. 12143, 44 Fed. Reg. 37,191 (1979).
The TRA makes plain that "[t]he absence of diplomatic relations or recognition shall not affect the application of the laws of the United States with respect to Taiwan . . .." 22 U.S.C. � 3303(a). The TRA expressly states that "[f]or all purposes, including actions in any court of the United States, the Congress approves the continuation of all treaties and other international agreements, including multilateral conventions, entered into by the United States and the governing authorities on Taiwan" before January 1, 1979, unless and until terminated in accordance with law. Id. � 3303(c). The TRA further provides that, "[w]henever the President or any agency of the United States is authorized or required by or pursuant to the laws of the United States to enter into, perform, enforce, or have in force an agreement . . . relative to Taiwan, such agreement . . . shall be entered into, performed, and enforced, in the manner and to the extent directed by the President, by or through the Institute." Id. � 3305(b). Finally, the TRA requires the Secretary of State to transmit to Congress the text of any agreement to which the Institute is a party (unless such public
disclosure would prejudice national security interests). Id.
Pursuant to the Taiwan Relations Act, AIT has entered into at least 87 agreements with TECRO since 1979. See 61 Fed. Reg. 33,948 (1996) (listing AIT-TECRO agreements as of July 1, 1996); see also Treaties in Force 315-316 (January 1, 1997) (listing pre-1979 U.S.-Taiwan agreements currently in force); New York Chinese TV Programs Inc. v. G.E. Enterprises. Inc., 954 F.2d 847, 849-52 (2d Cir. 1992) (holding that the Treaty of Friendship, Commerce and Navigation that the Republic of China signed with the United States in 1946 remains in force).
The TRA expressly authorizes the President to extend to "the Taiwan instrumentality and its appropriate personnel, such privileges and immunities . . , as may be necessary to the effective performance of their functions" upon the granting of comparable privileges and immunities to AIT and its personnel by Taiwan. 22 U.S.C. S 3309(c). The status of AIT and TECRO and their privileges and immunities are spelled out in the 1980 Agreement on Privileges, Exemptions and Immunities Between the American Institute in Taiwan and the Coordination Council for North American Affairs. 61 Fed. Reg. 33, 950 (1996) ("AIT-TECRO Agreement"). See Taiwan v. United States District Court, 128 F.3d at 714. Under section 3309(c) and the provisions of the TRA
regarding the execution and implementation of agreements between AIT and TECRO, the AIT-TECRO Agreement must be considered a "treaty" for purposes of the Tucker Act.
Additional provisions of the TRA also mandate this
conclusion. Section 4 of the TRA, 22 U.S.C. � 3303, states:
(a) The absence of diplomatic relations or recognition shall not affect the application of the laws of the United States with respect to Taiwan, and the laws of the United States shall apply with respect to Taiwan in the manner that the laws of the United States applied with respect to Taiwan prior to January 1, 1979.
(b) The application of subsection (a) of this section shall include, but shall not be limited to, the following:
(1) Whenever the laws of the United States refer or relate to foreign countries, nations, states, governments, or similar entities, such terms shall include and such laws shall apply with respect to Taiwan.
Under section 3303 (b)(1), when a law of the United States refers to "nations," that term "shall include . . . Taiwan." Section 1502 of the Tucker Act refers to a treaty entered into "with foreign nations." Thus, under the TRA, the AIT-TECRO Agreement, expressly authorized by Congress and governing the status of the counterpart organizations through which unofficial relations are conducted, must be considered a "treaty entered into with foreign nations" under the Tucker Act. Indeed, this is how the law would have treated any such agreement with Taiwan prior to 1979, and, thus, how the law "shall apply with respect to Taiwan" and the AIT-TECRO Agreement today. See, e.g., Dupont Circle Citizens Association v. BZA, 530 A.2d 1163 (1987)
In sum, the AIT-TECRO Agreement is a congressionally-authorized agreement, promulgated under a statute promoting the foreign policy of the United States to promote peace and stability in the Pacific region. The Agreement, therefore, should be treated like a treaty for purposes of section 1502.
Plaintiff's third cause of action "grows out of" the AIT-TECRO Agreement and, therefore, satisfies the second requirement of section 1502. TECRO's complaint alleges that the imposition of the HMT violated Article 5, section (d) of the Agreement, which states:
Real property used for the performance of the sending counterpart organization's authorized functions and for which the counterpart organization would be liable for payment of taxes shall be exempt from central and local taxation of the jurisdiction in which the receiving counterpart organization is located. The property, income, operations,
and other transactions of the sending counterpart organization shall be exempt from taxation by the central and local authorities of the jurisdiction in which the receiving counterpart organization is located. The exemptions provided in this Article, however, shall not apply to any property which is not used for the purpose of the sending counterpart organization or successor organizations.
Plaintiff contends that the HMT statute, as applied to it, violates this exemption from taxation. Because plaintiff's claim alleges a violation of the Agreement, its claim necessarily "grow[s] out of" and is "dependent on" the Agreement such that this court lacks jurisdiction pursuant to 28 U.S.C. S 1502.
Declining to exercise jurisdiction over count three would comport with the general rule and practice among nations that treaty disputes between governments are not justiciable in domestic courts. Over 100 years ago, in the Head Money Cases, the Supreme court ruled:
A treaty is primarily a compact between independent nations. It depends for the enforcement of its provisions on the interest and the honor of the governments which are parties to it. If these fail, its infraction becomes the subject of international negotiations and reclamations, so far as the injured party chooses to seek redress, which may in the end be enforced by actual war. It is obvious that with all this the judicial courts have nothing to do and can give no redress.
112 U.S. 580, 598 (1884).
When a claim is brought by a foreign government against the United States alleging a treaty violation, principles of nonjusticiability and sovereign immunity intersect, and the very
conduct of foreign relations may be affected. To guard against unwarranted interference, then, a foreign government generally may not bring suit in our domestic courts against the United States to enforce rights allegedly conferred upon that foreign government in an international agreement.
From its earliest days, the Supreme Court has regarded as nonjusticiable claims that the United States has not acted in accordance with a treaty's obligations to a foreign nation, holding: "that the power to determine these matters ha[s] not been confided to the judiciary, which has no suitable means to exercise it, but to the executive and legislative departments of our government; and that they belong to diplomacy and legislation, and not to the administration of the laws." Whitney v. Robertson, 124 U.S. 190, 194-95 (1888).
To rule otherwise would implicate the features of a nonjusticiable political question described in Baker v. Carr, 369 U.S. 186 (1962). Justice Brennan formulated six disjunctive characteristics often present in political questions:
(1) a textually demonstrable constitutional commitment of the issue to a coordinate political department; or
(2) a lack of judicially discoverable and manageable standards for resolving [an issue]; or
(3) the impossibility of deciding an issue without an initial policy determination of a kind clearly far nonjudicial discretion; or
(4) the impossibility of a court undertaking independent resolution without expressing lack of the respect due coordinate branches of government;
(5) an unusual need for unquestioning adherence to a political decision already made; or
(6) the potentiality of embarrassment from multifarious pronouncements by various departments of the Government on one question.
Accord United States v. Munoz-Flores, 495 U.S. 385, 389-90 (1990).
Not all cases involving foreign relations raise political questions. Nonetheless, the Supreme Court has recognized that decisions concerning foreign relations are inherently political in nature: "Not only does resolution of such issues frequently turn on standards that defy judicial application, or involve the exercise of a discretion demonstrably committed to the executive or legislature; but many such questions uniquely demand single-voiced statement of the Government's views." Baker v. Carr, 369 U.S. at 211.
In applying that doctrine, the United States Court of Appeals for the Second Circuit declined to hear a claim similar to the one presented here. Plaintiffs alleged that Executive Branch officials violated treaties with Germany and Great Britain by collecting taxes that should not have been owed:
The fundamental difficulty with the petitioner's suit is that it seeks to submit to judicial decision questions which are not justiciable but pertain to the executive branch of the government. It is not for a court to say whether a treaty has been broken or what remedy shall be given; this is a matter of international concern, which the two sovereign states must determine by diplomatic exchanges, or by such other means as enables one state to force upon another the obligations of a treaty. . . . These are matters concerning the relations between two nations and their adjustment must be left to the field of diplomacy.
George E. Warren Corp. v. United States, 94 F.2d 597 (2d Cir.), cert. denied 304 U.S. 572 (1938); see also Charton v. Kelly, 229 U.S. 447, 476 (1913) (holding that whether a treaty is violated is a decision for the Executive Branch). The court noted that the case involved the conduct of executive officers. According to the court, the doctrine of restraint is even more powerful "in cases involving conflicts between treaties and statutes." 94 F.2d at 603.
The United States Court of Appeals for the District of Columbia Circuit, relying upon the Head Money Cases, also refused to adjudicate a treaty dispute between nations. Canadian Transport Co. v. United States, 663 F.2d 1081 (D.C. Cir. 1980]. Because the United States' sovereign immunity was at issue, the court of appeals refused to hear the dispute absent express language in the treaty permitting such a suit:
Nothing in the quoted [treaty] language indicates that the United States has agreed to be held liable in damages if the treaty is violated. In the absence of specific language in the treaty waiving the sovereign immunity of the United States, the treaty must be interpreted in accord with the rule that treaty violations are normally to be redressed outside the courtroom.
663 F.2d at 1092; see also Breard v. Greene, 118 S. Ct. 1352, 1356 (1998) (refusing Republic of Paraguay's request to set aside criminal conviction of its citizen because "neither the text nor the history of the Vienna Convention clearly provides a foreign nation a private right of action in United States' courts to set
aside a criminal conviction and sentence for violation of consular notification provisions").
Nothing in the TECRO-AIT Agreement creates for TECRO a private right of action against the United States for its violation. In its complaint, TECRO cites Article 6 of the Agreement, which states that "[e]ach counterpart organization shall possess the capacity . . . to institute legal proceedings." Article 6 must be read to recognize the legal personality and capacity of the counterpart organizations. Nothing in the Article or Agreement indicates that the United States intended to waive its sovereign immunity under Article 6. That provision, therefore, does not expressly create a right for TECRO to bring a private cause of action against the United States to enforce the Agreement itself. In short, the Agreement does not contemplate or authorize the suit brought here.'
In sum, the Court of Federal Claims is not the appropriate forum in which to address TECRO's assertion that the HIT violated the TECRO-AIT Agreement. This dispute is beyond the jurisdiction of this Court under the Tucker Act. To the extent the dispute implicates the sovereign immunity of the United States and the conduct of foreign relations of the United States, including the
interpretation of an agreement executed and implemented under the Taiwan Relations Act, it presents a nonjusticiable political question, and the court should defer to the policies and
The Tucker Act's waiver of sovereign immunity is also constrained by 28 U.S.C. � 1500, which divests this Court of jurisdiction over a claim pending before another court. Because plaintiff filed a complaint alleging a violation of the international agreement in the Court of International Trade on the same day that it filed suit in this Court, the count should be dismissed.
Section 1500 states:
The United States Court of Federal claims shall not have jurisdiction of any claim for or in respect to which the plaintiff . has pending in any other court any suit or process against the United States.
The Court of Appeals for the Federal Circuit has held that section 1500 prevents this Court from entertaining a claim "if plaintiff files the claim at a time when the same claim is pending in another court." Richmond, Fredericksburg & Potomac Railroad Company v United States, 75 F.3d 648 (Fed. Cir. 1996). A suit filed in district court on the same day that suit was filed in this Court "arguably was pending at the time the Court of Federal Claims suit was filed, [and the Court of Federal Claims] would be without jurisdiction to entertain the suit." 75
States,, 132 Ct. Cl. 11 (1955).
Under that rule, this Court lacks jurisdiction to entertain plaintiff's count three. On the same day that it filed its complaint in this Court, plaintiff filed a complaint in the Court of International Trade alleging a violation of the TECRO-AIT Agreement's exemption from taxation. Defense Procurement Division v. United States, CIT No. 97-04-00583 (copy attached]. Plaintiff alleges the same cause of action and requests the identical relief in both complaints. Specifically, paragraph 34 of the CIT complaint alleges a cause of action identical to plaintiff's third cause of action here, asserting "the total amount of harbor maintenance fees paid by the plaintiff should be refunded in full together with appropriate interest." Because plaintiff had a suit pending asserting the same claim when it filed suit here, this Court lacks jurisdiction to entertain count three of the complaint.
We note that the CIT lacks jurisdiction to entertain plaintiff's cause of action alleging a breach of the AIT-TECRO Agreement. Plaintiff appears to concede as much in its opposition to our motion to dismiss, stating: "the Court of International Trade does not possess jurisdiction over contract claims against the United States." P1. Br. at 9. Should plaintiff pursue its claim in the CIT, we intend to move to dismiss that claim. While it remains pending, however, plaintiff may not pursue the identical claim in this Court.
For these reasons, we respectfully request this Court to
dismiss the complaint for lack
LINDA JACOBSON Assistant Legal Adviser GILDA BRANCATO Attorney-Adviser
U.S. Department of State Office of the Legal Adviser Diplomatic Law and Litigation
October 9, 1998
FRANK W. HUNGER
Assistant Attorney General
DAVID M. COHEN Director
JEANNE E. DAVIDSON Deputy Director
Attorneys for Defendant