Venezuela v. Helmerich & Payne Int’l
Issues
How should a court determine whether a foreign state has taken property in violation of international law? Is the pleading standard for establishing jurisdiction under the Foreign Sovereign Immunities Act’s expropriation clause more restrictive than the pleading standard for federal question jurisdiction?
This case will address what pleading standard a plaintiff attempting to use the Foreign Sovereign Immunities Act’s (FSIA) expropriation exception is required to meet to establish jurisdiction. The Bolivarian Republic of Venezuela, Petroleos de Venezuela and PDVSA Petroleo (“Venezuela”) argue that, in order for private American corporations like Helmerich & Payne International Drilling Co. and Helmerich & Payne Venezuela (“H&P”) to bring a claim against a foreign sovereign in U.S. courts, plaintiffs must meet the usual standards of subject matter jurisdiction under the FSIA. In contrast, H&P argues that the approach taken by the Court of Appeals for the D.C. Circuit, which only denies jurisdiction to “wholly insubstantial or frivolous” claims, is the appropriate standard under the expropriation exception. This case will impact the viability of future claims of expropriation against foreign sovereigns, especially within the context of private corporations seeking redress against foreign governments.
Questions as Framed for the Court by the Parties
The Foreign Sovereign Immunities Act (FSIA) provides that "a foreign state shall be immune from the jurisdiction of the courts of the United States and of the States except as provided in sections 1605 to 1607 of this chapter." 28 U.S.C. § 1604. Under the Act's expropriation exception, in pertinent part, "[a] foreign state shall not be immune * * * in any case* * * in which rights in property taken in violation of international law are in issue." Id. § 1605(a)(3).
The three questions presented in this petition concern the requirements for pleading jurisdiction under the expropriation exception. They are:
- Whether, for purposes of determining if a plaintiff has pleaded that a foreign state has taken property "in violation of international law," the FSIA recognizes a discrimination exception to the domestic-takings rule, which holds that a foreign sovereign's taking of the property of its own national is not a violation of international law.
- Whether, for purposes of determining if a plaintiff has pleaded that "rights in property taken in violation of international law are in issue," the FSIA allows a shareholder to claim property rights in the assets of a still-existing corporation.
- Whether the pleading standard for alleging that a case falls within the FSIA's expropriation exception is more demanding than the standard for pleading jurisdiction under the federal question statute, which allows a jurisdictional dismissal only if the federal claim is wholly insubstantial and frivolous.
Helmerich & Payne, an Oklahoma-based American company, had successfully operated an oil-drilling business in Venezuela through a series of Venezuelan subsidiaries (such as Helmerich & Payne, Venezuela (H&P-V)) from 1975 until 2010. See Helmerich & Payne International Drilling Co. and Helmeric & Payne Venezuela C.A. v.
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Additional Resources
- Jon Gingerich, Hogan Lovells Reps Venezuela in Pending Supreme Court Case, O’Dwyer’s (March 23, 2016).
- Lawrence Hurley, Venezuela to Hear Venezuela Oil Rig Dispute, Reuters (June 28, 2016).
- John Kennedy, Venezuela Takes Oil Nationalization Dispute to High Court, Law 360 (October 19, 2015)