What Deference to the Executive in Halkbank Should Have Looked Like
November 7, 2024
As previously reported, the Second Circuit issued its opinion in United States v. Turkiye Halk Bankasi (Halkbank) on October 22, 2024, addressing the deference owed to the executive branch’s determination that Halkbank, a Turkish state-owned bank, is not immune from criminal prosecution for violating U.S. sanctions on Iran. Similar questions of deference to the executive arise in the context of foreign official immunity from civil suits. In both contexts, the executive asserts that courts in the United State are required to obey its determinations that an entity or person is or is not immune.
As Ingrid Brunk noted in her earlier post, the Second Circuit’s opinion expressly reserved the question whether an executive decision to deny immunity would be entitled to deference if it ran contrary federal common law. In Halkbank, the court concluded, federal common law did not require immunity. This disposition leaves the question of deference largely unsettled.
In this post, I discuss what deference to the executive should look like in such cases. Courts should not, I argue, blindly follow the executive’s immunity determinations. Doing so abdicates their responsibility to develop federal common law and, in Justice Gorsuch’s phrase, “relegate[es] courts to the status of potted plants.” But courts should defer to the executive branch on the content of federal common law. This is because the federal common law of immunity should be based on the customary international law of immunity, and the State Department has expertise on customary international law that courts lack.
Separation of Powers
In Halkbank, and previously in foreign official immunity cases, the executive branch has claimed authority to make federal common law. As Ingrid and I argued in an amicus brief, this position violates the constitutional separation of powers. The President is charged with executing the laws, not making them. As the Supreme Court observed in Youngstown Sheet & Tube Co. v. Sawyer (1952), “the President’s power to see that the laws are faithfully executed refutes the idea that he is to be a lawmaker.” Congress may delegate legislative authority to the President, but it has not done so with respect to immunity.
The Supreme Court has made clear that questions of immunity not governed by federal statutes (like the Foreign Sovereign Immunities Act (FSIA)) or treaties (like the Vienna Convention on Diplomatic Relations), are governed by federal common law. Courts make common law. And federal courts make federal common law.
The Federal Common Law of Immunity
I have previously argued that the federal common law of immunity should be based on customary international law.
After Erie Railroad v. Tompkins (1938), the lawmaking power of the federal courts is, of course, limited. But the Supreme Court has recognized that “foreign relations” is one area where federal common law may be appropriate. When the United States would violate customary international law if its courts denied immunity, making a federal common law rule to give effect to that immunity is well within the bounds of federal judicial authority. Such a federal rule would also bind state courts, ensuring that they do not violate the United States’ international law obligations, either.
To be clear, I am not arguing here that U.S. courts should automatically treat all customary international law as federal common law. I am simply saying that federal courts should create rules of federal common law immunity based on customary international law when necessary to avoid U.S. violations of that law.
Chimène Keitner and I have further argued that, in developing the federal common law of immunity, courts should not go beyond the immunity that customary international law requires. In addition to the usual reasons for “judicial caution” in making federal common law, judicially developed rules of immunity have the potential to frustrate the application of statutes that Congress has passed, from laws authorizing the imposition of sanctions to laws permitting civil claims for torture. Federal courts should not immunize defendants from such statutes based on their own conceptions of foreign policy. They should do so only to prevent U.S. violations of international law.
Deference to the State Department on Customary International Law
Although federal courts must be the ones that make the federal common law of immunity, and although they should (as discussed above) base that federal common law on customary international law, they should nevertheless defer substantially to the State Department on the content of customary international law.
Simply put, the State Department has expertise on international law that courts lack. It is well settled that the State Department’s interpretations of treaties are entitled to “great weight.” The Restatement (Third) of Foreign Relations Law § 112, Comment c takes the same position with respect to all international law, reasoning that it is “desirable that so far as possible the United States speak with one voice on such matters.” Here, it is important to distinguish the State Department, which is expert on international law, from the Justice Department, which is not. This is another reason—in addition to those Zach Clopton discussedlast week—why it matters what part of the executive branch makes the immunity determination.
Of course, to be entitled to this sort of deference, the State Department would have to explain its views on customary international law. The U.S. brief in Halkbank failed to discuss the customary international law of immunity at all (although the government did raise it to some extent during oral argument). This was odd, since customary international law strongly supported the government’s position.
In the end, the Second Circuit’s analysis of federal common law relied entirely on U.S. cases. The opinionreasoned that federal common law distinguishes between the immunity of a state itself and the immunity of entities that it owns (pp. 28-29) and extends immunity to the latter only when they exercise governmental functions (pp. 30-31). The court noted that the same principles had been applied in the few cases involving criminal prosecutions (pp. 32-33). The court discussed only one foreign decision—because Halkbank relied on it heavily—reasoning that the decision had extended immunity only to state-owned corporations exercising state authority (pp. 33-34).
It is noteworthy that all the common law decisions on which the Second Circuit relied were decided more than 50 years ago, before the FSIA replaced common law immunity with statutory immunity for cases that fall within the statute. The result is that the federal common law of immunity that the Second Circuit applied reflects the State Department’s view of customary international law as it existed more than half a century ago—a law of state immunity “trapped in amber.” This makes little sense. It would be far better for courts in the United States to base the federal common law of immunity on the State Department’s view of customary international law as it exists today.
Conclusion
In short, there should be deference to the executive branch on questions of common law immunity. That deference should not, however, take the form of blind obedience to executive determinations. It should instead reflect deference to the reasoned views of the State Department about the content of customary international law, based on the State Department’s considerable expertise.
There are other aspects of immunity on which the State Department is also entitled to deference. As a function of the President’s constitutional authority over recognition of foreign governments, for example, the State Department determines which officials are foreign heads of state. Although the executive branch does not make the law of head-of-state immunity, its recognition of a foreign head of state automatically entitles that official to such immunity.
The approach I have suggested here leaves the State Department with considerable influence over questions of common law immunity. But it also respects the constitutional separation of powers. It acknowledges that, although the President makes recognition decisions and the State Department’s views of international law are entitled to deference, it is the judicial branch that makes federal common law.