At the Transnational Litigation Blog, Ingrid (Wuerth) Brunk: Second Circuit Holds for the Government in Halkbank Remand. From the introduction:
The U.S. Court of Appeals for the Second Circuit has issued its opinion in U.S. v. Turkiye Halk Bankasi (Halkbank) following the Supreme Court’s decision to remand the case for further consideration of common law immunity issues. … The opinion concluded that Halkbank, as a state-owned enterprise, is not entitled to common law immunity for its non-governmental conduct, including the conduct alleged in this case.
The Supreme Court agreed with the lower courts that Halkbank is not entitled to immunity under the [Foreign Sovereign Immunities Act], holding 7-2 that the statute is inapplicable in criminal cases. … [T], the Court remanded the case back to the Second Circuit, noting that “the Court of Appeals did not fully consider the various arguments regarding common-law immunity.” Justice Gorsuch (joined by Justice Alito) disagreed with the majority’s statutory analysis and would have held that the FSIA applied but did not confer immunity on Halkbank. His opinion notes that “many thorny questions lie down the ‘common law’ path” that the Second Circuit faced on remand. As Justice Gorsuch wrote:
Right out of the gate, lower courts will have to decide between two very different approaches. One option is to defer to the Executive Branch’s judgment on whether to grant immunity to a foreign sovereign – an approach sometimes employed by federal courts in the years immediately preceding the FSIA’s adoption. The other option is for a court to make the immunity decision looking to customary international law and other sources.
Justice Gorsuch also noted separation of powers concerns about requiring the courts to abide by legal determinations by the executive branch – thereby “relegating courts to the status of potted plants.”
This may sound like an obscure issue of interest only to foreign affairs law scholars (like me), but it has wider implications. An approach that would simply have courts follow whatever immunity outcome is directed by the executive branch in effect results in executive branch lawmaking. As I've written elsewhere (most recently, in The Vesting Clauses and Foreign Affairs, part II.A), the Constitution's bar on presidential lawmaking is a centerpiece of constitutional separation of powers. Granted, the potential immunity of foreign state-owned corporations from criminal prosecution is indeed an obscure issue, but that's what makes it dangerous — allowing presidential lawmaking in this area seems innocuous but becomes a precedent for other presidential lawmaking in other more consequential areas. One need only look at how the George W. Bush administration, in Medellin v. Texas, tried to leverage executive lawmaking in claims settlement into a much broader principle of executive lawmaking in foreign affairs generally.
As Professor Brunk's post says later:
An actual decision in favor of deference means that the government has the constitutional authority to make – that is, to legislate – the law on immunity. It means that the government (i.e. the President) can freely decide to indict Turkey or Russia or Germany or Brazil or China – after all, the government controls the prosecution as well – and that immunity poses no bar. Full stop. Such power is not properly termed “deference,” it is executive control. That position is so extreme that, although it is exactly what the government argues, the government dodges the full implications of it by saying that it would never bring such a prosecution.
Agreed. But I think there is an intermediate position here. The question in Halkbank was (or at least should have been) whether the international law of sovereign immunity protects the commercial activities of a state-owned corporation such as Halkbank from criminal prosecution. That should be the question because courts read generally worded federal statutes not to violate international law. (Murray v. Schooner Charming Betsy, from 1804, and, as to foreign sovereign immunity, Schooner Exchange v. McFaddon, from 1812).
In my view (though perhaps not in Professor Brunk's view), U.S. courts do owe deference to the executive branch when the executive branch takes an official public position on behalf of the United States on the meaning of international law. That's how I read the famous case of The Paquete Habana and the President's constitutional diplomatic powers. In that situation, the President is not making law; the President is applying law (international law), which is an executive function.
But simply having the Justice Department bring a prosecution against an entity that might have immunity isn't taking an official public position on behalf of the United States on the meaning of international law. So in this case I agree there should not have been deference, because "deference," as Professor Brunk says, would imply that the President could just declare a law of immunity for this case.
Posted at 6:56 AM