Throwback Thursday: Eighty Years of Ex Parte Republic of Peru
September 28, 2023
Back in 1943, the Supreme Court issued its opinion in an admiralty case against the Ucayali, a Peruvian steamship. A Cuban company brought the in rem action in a federal district court in Louisiana alleging that the steamship violated a charter agreement by failing to carry a cargo of sugar from Peru to New York. The Republic of Peru owned the vessel and obtained a suggestion of immunity from the U.S. Department of State. The district court judge refused to follow the suggestion, however, reasoning that the Ucayali’s owners waived immunity through their participation in the litigation. The case went directly to the Supreme Court on a writ of mandamus because, in the Court’s view, the case was of “such public importance and exceptional character” that it justified issuance of the writ without a decision by the court of appeals. The Court reversed.
Ex Parte Republic of Peru was decided during a period of doctrinal upheaval in U.S. foreign relations law, civil procedure, and the law of foreign sovereign immunity. The Court’s transformative decision in Erie R.R. v. Tompkins, which held that federal courts lack the power to make general common law, was only five years old. The Federal Rules of Civil Procedure(FRCP) were also five years old – 1938 was a big year for civil procedure. Both developments constrained the power of federal district courts. Erie did so by limiting their power over common law; the FRCP did so by subjecting them to a clear set of uniform procedural rules. Meanwhile, over in foreign relations law, the Court had issued its broadest statement of executive power ever in the much-maligned 1936 case United States v. Curtiss-Wright Export Corp. The opinion reasoned in dicta that the inherent powers of the executive branch over foreign relations law arose from extra-constitutional sources, a theory that historians have discredited and that today has little practical significance. And in 1942, the Supreme Court had upheld, in United States v. Pink, the President’s power to settle claims through an executive agreement (without congressional authorization) that pre-empted inconsistent state law – a vigorous assertion of executive power in profound tension with the Supremacy Clause, and one that has been interpreted very narrowly in the years since. In other words, in 1943, the executive branch had more unilateral constitutional power in foreign relations cases than it had ever had before, a power that was sharply curtailed nine years later in the widely-celebrated and still followed case Youngstown Sheet & Tube Company v. Sawyer. In 1943, executive power was at its zenith. Judicial authority to make and develop unwritten law was in profound retreat.
Globally, the law of foreign sovereign immunity had entered a period of fundamental change and uncertainty. Foreign sovereigns like the Republic of Peru had once enjoyed virtually absolute immunity before foreign domestic courts, immunity that had greatest force in admiralty cases, because those were the ones in which domestic courts most often had jurisdiction over the property of a foreign state – like the steamship Ucayali which was located in New Orleans when it was sued. Foreign states had started behaving like commercial entities, however, and immunity was increasingly held inapplicable to commercial conduct by states. Not all states took that position in 1943 – the United States still backed the doctrine of absolute immunity – but international law was unsettled. There were additional complexities, too, including whether a vessel owned by a foreign government but in the possession and control of a private commercial party was entitled to immunity even under the absolute approach. It was a mess.
Perhaps in this context – and in light of the dangerous war in which the United States was engulfed at the time – it is unsurprising that the Supreme Court held in Ex Parte Republic of Peru that the district court should have followed the President’s suggestion of immunity. The Court reasoned that:
certification and the request that the vessel be declared immune must be accepted by the courts as a conclusive determination by the political arm of the Government that the continued retention of the vessel interferes with the proper conduct of our foreign relations. Upon the submission of this certification to the district court, it became the court’s duty, in conformity to established principles, to release the vessel and to proceed no further in the cause.
This language is what the case is known for today. The Foreign Sovereign Immunities Act, passed in 1976, resolves almost all issues related to immunity, including the exceptions for waiver and commercial activity. The large-scale uncertainty around the content of immunity law is now just a distant memory. But in the narrow band of cases in which the FSIA does not apply – including criminal prosecutions and suits against individual defendants – the power of the executive branch to make immunity determinations is contested. And Ex Parte Peru is widely cited in this context (by scholars and the U.S. government alike) to support the government’s power to dictate the law of immunity to the courts, including the application of that law to particular facts and thus the outcome of specific cases. In litigation currently pending before the Second Circuit, for example, the government has argued that it controls immunity determinations in criminal prosecutions, citing Ex Parte Peru.
The actual holding in Ex Parte Peru is far narrower, however, than either the government or other scholars today understand. The State Department’s power to resolve the immunity issue ultimately rested on the government’s power to settle claims. An overlooked part of the opinion reads:
When the Secretary elects, as he may and as he appears to have done in this case, to settle claims against the vessel by diplomatic negotiations between the two countries rather than by continued litigation in the courts, it is of public importance that the action of the political arm of the Government taken within its appropriate sphere be promptly recognized, and that the delay and inconvenience of a prolonged litigation be avoided by prompt termination of the proceedings in the district court.
In other words, the district court should have accepted the immunity determination because the government had elected “to settle claims against the vessel” through “diplomatic negotiation.” Under the Supreme Court’s ruling in Pink, the executive branch’s claim settlement power sufficed to resolve the case. The Court also independently evaluated the argument that immunity had been waived by Peru through its participation in the litigation, an inquiry in tension with the claim that the executive branch exercises complete control over immunity vel non. Finally, the Court provided no constitutional analysis and no reasoning to support a broad assertion of presidential power over the law of immunity. Indeed, the Court did not appear to view the case as involving an important constitutional issue at all. Modern readers should not interpret it any differently. Today, however, Ex Parte Peru is erroneously cited along with dicta from Republic of Mexico v. Hoffman (1945) in favor of a broad and freestanding executive power to resolve immunity issues.
The tumult and upheaval of the late 1930’s and early 1940’s is long past. Almost all issues related to foreign sovereign immunity are resolved by the FSIA and those still governed by federal common law are small in number and significance. Other issues of federal common law that persist under Erie, such as the Act of State doctrine, are also few and far between, and the courts handle them with little difficulty. Broad assertions of executive power from the 1930s and 40’s have been dialed back in subsequent cases. In the end, Ex Parte Peru should be understood as deeply situated in its historical context and not pressed into the service of broad constitutional arguments that were not addressed by the Court and that were not essential for the disposition of the case.