United States Court of Appeals

FOR THE SECOND CIRCUIT

Docket No. 99-9011

\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\--

767 THIRD AVENUE ASSOCIATES, CARLYLE LIMITED PARTNERSHIP-XI, MELVYN
KAUFMAN AND ROBERT KAUFMAN,

[Plaintiffs-Appellants]{.underline},

\- v. -

CONSULATE GENERAL OF THE SOCIALIST FEDERAL REPUBLIC OF YUGOSLAVIA,
[et]{.underline} [al.]{.underline},

[Defendants-Appellees]{.underline}.

**\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\--**

**BRIEF FOR [AMICUS CURIAE]{.underline} UNITED STATES OF AMERICA**

**SUPPORTING APPELLEES AND SUPPORTING**

**AFFIRMANCE IN PART AND REVERSAL IN PART**

\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\--

**PRELIMINARY STATEMENT**

Pursuant to 28 U.S.C. § 517 and Rule 29 of the Federal Rules of
Appellate Procedure, the United States submits this brief as [amicus
curiae]{.underline} to express its views on the political question
doctrine as applied in this action.

**INTEREST OF THE UNITED STATES**

This action arises in the aftermath of the dissolution of the former
Socialist Federal Republic of Yugoslavia (the "SFRY"). Since 1992, the
United States has taken the position that the SFRY has ceased to exist,
that there is no state representing the continuation of the SFRY, and
that five successors have arisen \-- the Federal Republic of Yugoslavia
(Serbia and Montenegro) ("FRY(S&M)"), the Republic of Slovenia
(\"Slovenia\"), the Republic of Croatia (\"Croatia\"), the Republic of
Bosnia-Herzegovina (\"Bosnia-Herzegovina\"), and the Former Yugoslav
Republic of Macedonia (\"FYROM\") (collectively, the "Successor
Defendants").

Plaintiffs 767 Third Avenue Associates, Carlyle Limited Partnership-XI,
Melvyn Kaufman, and Robert Kaufman (collectively, \"Plaintiffs\") seek
to recover damages for alleged non-payment of rent and breaches of
leases held by the Consulate General of the Socialist Federal Republic
of Yugoslavia (the "former SFRY Consulate"), the Yugoslav Press and
Cultural Center (the "former SFRY Cultural Center"), and the Yugoslav
Chamber of Economy (the "former SFRY Chamber of Economy") (collectively,
the "former SFRY Defendants"). The district court abstained from
deciding the case on the ground that the extent of the Successor
Defendants' succession to assets and liabilities of the former SFRY is a
non-justiciable political question. However, the district court did not
dismiss the case outright, but \"suspensed\" the case for an
indeterminate period and suggested that the court could resolve the
political question if the Executive Branch did not reach a timely
resolution politically.

The United States participates in this appeal to support application of
the political question doctrine to the claims asserted against the
Successor Defendants, without the limitations articulated by the
district court. The United States takes no position as to whether
Plaintiffs should recover for non-payment under the leases. However,
liability, if any exists, cannot attach to the Successor Defendants in
the absence of a political determination, which has not yet been made,
regarding successor state liability for the private debts of the former
SFRY. Any judgment against the Successor Defendants, whether jointly or
individually, would constitute a political decision that is reserved to
the Executive Branch, and would thus purport to determine
non-justiciable political questions. While the district court correctly
held that the political question doctrine barred any current
determination of liability of the Successor Defendants, or apportionment
of liability among them, it impermissibly limited the scope of the
political question doctrine by suggesting that a court could usurp the
Executive Branch\'s authority on state succession matters at a later
point. Therefore, the United States urges this Court to affirm the
district court\'s acknowledgment that the claims against the Successor
Defendants are barred by the political question doctrine, without the
limits placed on that doctrine by the district court.

In contrast to Plaintiffs\' claims against the Successor Defendants,
adjudication of the claims against the former SFRY Defendants would not,
in and of itself, implicate political questions concerning successor
states because it would not involve the court in an allocation of assets
or liabilities as among the successors. The question remains whether the
claims should proceed against the former SFRY Defendants. In the
district court, the United States represented that it had no
policy-based objection to those claims proceeding, and suggested that,
in a situation such as this, the court have jurisdiction to determine
the amount, if any, of the predecessor state\'s liability, with
judgment, if any, entered only against the predecessor state. (JA
528-30).[^1] The United States noted that, in the corporate context, an
action against a dissolved entity for activities arising prior to its
dissolution abated at common law, although such an action may proceed
where authorized by the laws under which the entity was created.
[See]{.underline} [Oklahoma Natural Gas Co. v. Oklahoma]{.underline},
273 U.S. 257, 259 (1927). However, there is no federal statute
applicable to foreign states in comparable circumstances and no cases
have been located under international law that address this issue in the
context of state dissolution. (JA 528-29). The district court determined
that the action should not proceed against the former SFRY Defendants
(with the defense, if any, being conducted by one or more of the
Successor Defendants), because, in its view, the management of such
proceedings would present practical and political problems of the same
nature as proceedings allocating assets and liabilities of the former
SFRY among the Successor Defendants. [767 Third Avenue Assocs. v.
Consulate General of the Socialist Federal Republic of
Yugoslavia]{.underline}, 60 F. Supp. 2d 267, 274 (S.D.N.Y. 1999). The
United States does not press the point further in this Court.

**Issues Presented for Review**

The United States will address the following issues:

1\. Whether the district court correctly declined, under the political
question doctrine, to determine contract claims asserted against the
successors to the former SFRY in the absence of a determination,
recognized or endorsed by the United States, of the proper allocation of
the legal rights and responsibilities for the contracts of the former
SFRY among those successor states.

2\. Whether the district court erred in concluding that it may
reconsider the justiciability issue if no determination of the political
question has been made by the Executive Branch after it has been
afforded a \"reasonable opportunity\" to do so.

**STATEMENT OF THE CASE**

**A. Political Framework**

In the early part of this decade, the SFRY suffered increasing political
crisis that ultimately led to dissolution. Since 1992, the United States
has taken the position that the SFRY has ceased to exist and that no
state represents the continuation of the SFRY. (JA 378). While the
FRY(S&M) has attempted to maintain that it represents the continuation
of the SFRY, this position has been rejected by the United States, the
United Nations, and the international community generally. (JA 378-79).
Slovenia, Croatia, Bosnia-Herzegovina, and FYROM have been formally
recognized by the United States as independent states. The FRY(S&M) has
not been formally recognized as a state by the United States. (JA 378).

With respect to assets and liabilities of the former SFRY, the United
States' position is that each of the Successor Defendants constitutes a
successor with interests in property of the former SFRY. (JA 379).
Allocation of this property among the successors is a matter of great
sensitivity. ([Id.]{.underline}). The policy of the United States has
been to encourage successors to agree among themselves regarding such
allocation, which has been considered within the framework of an
international conference process. ([Id.]{.underline}). The United States
continues to support the international process as the means to pursue
resolution of these succession issues, which have not been resolved to
date.[^2]

**B. District Court Proceedings**

Plaintiffs brought this action to recover for alleged non-payment of
rent and breaches of leases by the former SFRY Defendants for premises
located at 767 Third Avenue in New York City. (JA 39-42). Plaintiffs
contend that the leases were originally entered into in 1981, and that
they were extended in late 1991 \-- one on August 5, 1991, one on
October 21, 1991, and one on October 24, 1991. (JA 39-41). Plaintiffs
further contend that, by June 1992, the former SFRY Defendants were in
breach of their payment obligations on the leases and were so notified
by Plaintiffs' agent. (JA 39-42).

Plaintiffs sued the former SFRY Defendants and each of the Successor
Defendants in their own names. (JA 36). Plaintiffs asserted jurisdiction
as to all defendants under the Foreign Sovereign Immunities Act, 28
U.S.C. §§ 1330, 1605-1607, on the grounds that the leases at issue are
commercial activities, and that the former SFRY Defendants expressly
waived immunity when they entered into the leases. (JA 38).

In the district court, each of the Successor Defendants moved to dismiss
the action, claiming, among other things, that the liability of the
Successor Defendants cannot be determined without raising
non-justiciable political questions. (JA 8-12). The FRY(S&M) also
asserted cross-claims against the other Successor Defendants in the
event liability were to be determined against the FRY(S&M). (JA 7, 134).
Some of the other Successor Defendants contended, among other things,
that such cross-claims raised non-justiciable political questions. (JA
10-12).

The United States, in a Statement of Interest filed on behalf of the
State Department, asserted that neither the relief requested against the
Successor Defendants, nor any cross-claims among them, could be
adjudicated without addressing non-justiciable issues of state
succession, and that Plaintiffs' complaint and the cross-claims of the
FRY(S&M) should therefore be dismissed as against the Successor
Defendants. (JA 516-33). The United States did not object to
adjudication of the relief requested by Plaintiffs as against the former
SFRY Defendants. (JA 528-30).

In an opinion issued on August 13, 1999, the district court declined to
hear the claims asserted against all of the defendants on the ground
that they presented non-justiciable political questions. [767 Third
Avenue Assocs.]{.underline}, 60 F. Supp. 2d at 269. After reviewing a
number of recent cases in the Southern District of New York applying the
political question doctrine to issues involving succession to assets and
liabilities of the former SFRY, the district court found that the
requested judicial allocation of liabilities of the former SFRY would
involve the court in non-justiciable political questions.
[Id.]{.underline} at 271-72. The district court then rejected each of
three proposals that Plaintiffs had argued would avoid political
questions: (1) that the court could adjudicate liability against all of
the defendants while staying any allocation of that liability pending a
political determination of successor liability, [see]{.underline}
[id.]{.underline} at 273, (2) that the court could use an allocation
percentage worked out by the International Monetary Fund ("IMF") in its
own negotiations with the successors to the former SFRY,
[see]{.underline} [id.]{.underline} at 276, and (3) that the court could
enter joint and several liability against the Successor Defendants
without allocating percentage shares, [see]{.underline}
[id.]{.underline} at 276-77. Moreover, while the United States, as a
policy matter, expressed no objection to the entry of judgment solely
against the former SFRY Defendants, the district court declined to
follow that course, concluding that "\[p\]rotection of the United
States' asserted interest in avoiding judicial allocations among SFRY
successors requires that this court avoid adjudicating liability at
all." [Id.]{.underline} at 274-75.

After determining that non-justiciable political questions could not be
avoided if any part of the case proceeded, the district court
nonetheless did not dismiss the action. Citing [Quackenbush v. Allstate
Insurance Co.]{.underline}, 517 U.S. 706 (1996) (addressing abstention
on grounds of comity with states where federal review would disrupt
state efforts to establish coherent state policy), the district court
instead analogized the case to one where an Executive Branch Department
would have \"primary jurisdiction.\" [See]{.underline} [id.]{.underline}
at 281 (citing [Messinger v. Building Contractors Ass\'n,
Inc.]{.underline}, 703 F. Supp. 320, 324 (S.D.N.Y. 1989)). The district
court then applied principles of abstention and stayed the case "for a
reasonable time to allow the anticipated policy determinations."
[See]{.underline} [id.]{.underline} at 282. While the court stated it
would not "commit to hypothetical future rulings," [id.]{.underline} at
278, it suggested that Plaintiffs could return to court for adjudication
of their claims in one of two circumstances \-- either when the
Executive Branch declares a clear national policy on SFRY successor
allocations, or "when political efforts to resolve the outstanding
succession issues have collapsed, and when the United States has failed
to recognize the futility of awaiting a non-existent international
resolution of those issues," [id.]{.underline}

**Summary of Argument**

Liability for and allocation of debts among successor states present
issues for which there are no identifiable judicial standards. There is
no rule of law or international custom that requires a successor state
to accept responsibility for its predecessor\'s extra-territorial debts
to private parties, or that determines how liability should be
apportioned when there is more than one successor state that agrees to
accept liability. The appropriate share of each successor state in such
liabilities, and indeed whether successors will be held directly
accountable at all for such debts incurred by the former sovereign, is
simply not susceptible to judicial determination and can be decided only
in the political arena. Thus, issues of whether and how United
States-based liabilities of the former SFRY will be apportioned, if at
all, amongst the five successors present non-justiciable political
questions. [See]{.underline} Point I, [infra]{.underline}.

The district court correctly determined that issues regarding the assets
and liabilities of the successors to the former SFRY must be resolved on
political grounds by the political branches of government. However, the
district court then inappropriately suggested that the court could
decide the case at some later date if the Executive did not act in what
the court would consider to be a timely manner. Such a conclusion finds
no support in the rationale or history of the political question
doctrine and cannot be squared with the reservation of these issues to
the Executive Branch. [See]{.underline} Point II, [infra]{.underline}.

**ARGUMENT**

**POINT I**

**THE DISTRICT COURT CORRECTLY DECLINED TO**

**DETERMINE THE LIABILITY OF THE SUCCESSOR DEFENDANTS**

In [Baker v. Carr]{.underline}, 369 U.S. 186 (1962), the Supreme Court
set forth the factors for determining the presence of non-justiciable
political questions:

> Prominent on the surface of any case held to involve a political
> question is found a textually demonstrable constitutional commitment
> of the issue to a coordinate political department; or a lack of
> judicially discoverable and manageable standards for resolving it; or
> the impossibility of deciding without an initial policy determination
> of a kind clearly for nonjudicial discretion; or the impossibility of
> a court's undertaking independent resolution without expressing lack
> of the respect due coordinate branches of government; or an unusual
> need for unquestioning adherence to a political decision already made;
> or the potentiality of embarrassment from multifarious pronouncements
> by various departments on one question.

369 U.S. at 217. Non-justiciability is distinct from lack of
subject-matter jurisdiction: Non-justiciability refers to instances
where, although there may be subject-matter jurisdiction, "the court
will not proceed because the matter is considered unsuited to judicial
inquiry or adjustment." [Id.]{.underline} at 196. Where one or more of
the [Baker]{.underline} factors are present, the political question
doctrine counsels against judicial resolution of the issue.

In [Can v. United States]{.underline}, 14 F.3d 160 (2d Cir. 1994), this
Court made clear that state succession presents political questions.
[Can]{.underline} addressed a claim by a self-styled class of citizens
of the Republic of South Vietnam who sought to be named
successors-in-interest to assets of the former Republic of South Vietnam
in the United States. This Court concluded that the claim was
non-justiciable because the determination of title to the assets of the
former South Vietnam was "inextricably intertwined with the question of
state succession and sovereignty," and the settlement of claims to those
assets clearly involved "decisions constitutionally committed to the
executive branch." [Id.]{.underline} at 165. The [Can]{.underline}
decision stressed the lack of judicial authority to deal with issues of
state succession, both as to power and to property: "\[T\]he
determination of title is . . . beyond judicial competence . . . . The
courts have no standards for judging a claim of succession to a former
sovereign, even where that succession is only to property rather than to
government power. The recognition of any rights of succession to a
foreign sovereign's power or property is in the first instance
constitutionally committed to the executive branch of government, not to
the judiciary." [Id.]{.underline} at 162-63.

Several cases in the Southern District of New York have applied the
principles enunciated by [Can]{.underline} to dismiss claims to United
States-based assets of the former SFRY. [See]{.underline} [Beogradska
Banka]{.underline}, 1998 WL 661481 (action by FRY(S&M) bank to collect
debt obligation would be dismissed on political question grounds if
defendant demonstrated that debt sought to be collected was asset of
former SFRY); [Jugobanka A.D. Belgrade v. Sidex Int'l Furniture
Corp.]{.underline}, 2 F. Supp. 2d 407 (S.D.N.Y. 1998) (action by
FRY(S&M) bank to collect debt obligation was dismissed on political
question grounds where debt sought to be collected was asset of former
SFRY); [Park-71st Corp.]{.underline}, 913 F. Supp. 191 (action raising
competing claims to diplomatic property by successor states to former
SFRY dismissed on political question grounds).

Similar considerations apply to the question of liability of successors
for the debts of a former state. As in the case of successor claims to
assets, liability for and allocation of debts among successors present
issues for which there are no identifiable judicial standards. There is
no rule of law or international custom that requires a successor state
to accept responsibility for the extra-territorial debts of its
predecessor to private parties, or that determines how liability should
be apportioned when there is more than one successor state that agrees
to accept liability. The Foreign Sovereign Immunities Act does not
impute contract liability to successor states that have not signed or
expressly assumed a contract, nor waived immunity on their own behalf.
[See]{.underline} [Yucyco, Ltd. v. Republic of Slovenia]{.underline},
984 F. Supp. 209, 215-16 (S.D.N.Y. 1997) (non-signatory to contract
cannot be defendant in action for breach absent assumption or assignment
of contract). Moreover, while a change in government leaves statehood
unaffected, and has no effect on that state\'s international rights and
obligations, [see, e.g.]{.underline}, [KMW Int\'l v. Chase Manhattan
Bank, N.A.]{.underline}, 606 F.2d 10, 16-17 (2d Cir. 1979); Restatement
(Third) of Foreign Relations Law ("Restatement"), § 208, Note 2, where
one state succeeds another, and/or one or more new states are created,
there is no rule of international law that provides for automatic
assumption by successor states of contracts entered into by the
dissolved predecessor state. [Yucyco]{.underline}, 984 F. Supp. at
217-18 (citing, [inter alia]{.underline}, Restatement §§ 208, 210).[^3]
Here, the appropriate share of each successor state in such liabilities,
and indeed whether successors will be held directly accountable at all
for such debts incurred by the former sovereign, is simply not
susceptible to judicial determination and can be decided only in the
political arena. Thus, issues of whether and how former SFRY liabilities
will be apportioned to the five successors present a non-justiciable
political question. [See, e.g.]{.underline}, [Yucyco]{.underline}, 984
F. Supp. at 217 (absent controlling agreement, treaty, or other
instrument of allocation, claim against Slovenia for "equitable share"
of guarantee made by former SFRY dismissed on political question
grounds); [Yucyco, Ltd. v. Republic of Croatia]{.underline}, No. 96 Civ.
5559 (DC), 1997 WL 728173, at \*1 (S.D.N.Y. Nov. 19, 1997) (same
decision as to Croatia); [compare]{.underline} [Sage Realty Corp. v.
Jugobanka, D.D.]{.underline}, No. 95 Civ. 0323 (RJW), 1998 WL 702272
(S.D.N.Y. Oct. 8, 1998) (landlord\'s claim against FRY(S&M) bank for
unpaid rent raises no political question and implicates no issues of
state succession).

Of course, once successor liability is addressed by the political
branches of government through international negotiation, any resulting
agreements can be interpreted and enforced by the judiciary.
[See]{.underline} [Yucyco]{.underline}, 984 F. Supp. at 217 n.17;
Restatement § 209, Note 6 (citing [Ottoman Public Debt
Case]{.underline}, 1 R. Int\'l Arb. Awards 529 (1925); [Virginia v. West
Virginia]{.underline}, 220 U.S. 1 (1911)); [see also]{.underline} [Japan
Whaling Ass\'n v. American Cetacean Society]{.underline}, 478 U.S. 221,
230 (1986) (courts have authority to construe treaties and executive
agreements). It should be noted that, in international negotiations
addressing such issues in recent years, successor states have not
pressed the \"clean slate\" ([i.e.]{.underline}, no responsibility)
theory, but have instead agreed to negotiated assumptions of liability.
[See]{.underline} Hubert Beemelmans, [State Succession in International
Law: Remarks on Recent Theory and State Praxis]{.underline}, 15 B.U.
Int\'l L.J. 71, 114 (1997). Indeed, some of the successors to the former
SFRY have entered into such agreements with some international entities,
including the IMF, in order to become internationally creditworthy.
[Id.]{.underline} at 113; [see also]{.underline} [id.]{.underline} at
83-84 & n.46; [see generally]{.underline} Carsten Thomas Ebenroth and
Matthew James Kemner, [The Enduring Political Nature of Questions of
State Succession and Secession and the Quest for Objective
Standards]{.underline}, 17 U. Pa. J. Int\'l Econ. 753, 791-93, 796-803
(Fall 1996). However, as there is not yet any agreement that would cover
alleged debts of the former SFRY to private parties such as Plaintiffs,
there is not at this time any agreement for a court to enforce as
against the Successor Defendants.

The district court correctly recognized, 60 F. Supp. 2d at 272-76, that
the issue of whether any or all of the Successor Defendants in this
action may be held responsible for former SFRY debts, and, if so, on
what basis, is a non-justiciable political question that is yet to be
resolved. Because allocation of liabilities of the former SFRY raises
political questions that have not been settled, it would be
inappropriate for any judgment to be entered directly against the
Successor Defendants, either jointly or individually. Any judgment
against the Successor Defendants would have the effect of allocating
debts among successor states and would involve the judiciary in the
fundamentally political question of state succession to assets and
liabilities.

This is so even if a court were merely to hold the successor states
jointly liable for former SFRY debts without further allocation. A
judgment even in this form would constitute a conclusion that the
successor states are to be held directly liable for commercial debts of
the former SFRY, a political determination that has not yet been made.
Moreover, to the extent such a judgment were to be interpreted as
imposing joint and several liability, it would enable Plaintiffs to
enforce the judgment against a subset of the successor states or even
one successor alone. Under this scenario, debts would likely be
allocated based on the availability of executable assets, rather than on
the ultimate political settlement concerning division of assets and
liabilities. By entering such a judgment, the court would be usurping
the political powers reserved to the Executive Branch.

**POINT II**

**THE DISTRICT COURT IMPROPERLY LIMITED**

**THE SCOPE OF THE POLITICAL QUESTION DOCTRINE**

After determining that non-justiciable political questions could not be
avoided if any part of the case proceeded, the district court
nonetheless did not dismiss the action. Instead, the district court
adopted principles of abstention generally applied where a federal court
is asked to defer to a state forum. [See]{.underline} [767 Third Avenue
Assocs.]{.underline}, 60 F. Supp. 2d at 279-82 (citing [Quackenbush v.
Allstate Insurance Co.]{.underline}, 517 U.S. 706 (1996)). The district
court concluded that abstention, rather than dismissal, was appropriate:
"Just as comity in the federalism context requires deference to state
processes and efforts to establish coherent policies on matters of
substantial public concern, so does comity in the international context
(in conjunction with separation of powers principles) require deference
to international and executive branch processes and efforts to establish
coherent policies on matters of substantial public concern."
[Id.]{.underline} at 280. In reaching this conclusion, the district
court analogized the political question doctrine to the doctrine of
\"primary jurisdiction,\" which recognizes that where concurrent
jurisdiction lies with a government agency and the judiciary, it may be
appropriate to defer to the government agency in the first instance.
[Id.]{.underline} at 281 (citing [Messinger v. Building Contractors
Ass\'n, Inc.]{.underline}, 703 F. Supp. 320, 324 (S.D.N.Y. 1989)).

While the district court acknowledged that the resolution of issues
regarding the assets and liabilities of the former SFRY must be answered
on political grounds by the political branches of government, it
erroneously suggested that those issues could nonetheless be reviewed by
a court if the political determination was unduly delayed, and even set
forth a number of factors for the court to consider in determining
whether the \"delay has become too lengthy to justify continued delay of
adjudication.\" [Id.]{.underline} at 177. For example, the district
court concluded it could take jurisdiction where "political efforts to
resolve the outstanding succession issues have collapsed, and when the
United States has failed to recognize the futility of awaiting a
non-existent international resolution of those issues."
[Id.]{.underline} at 278. This inappropriately limits the political
question doctrine by suggesting that a court could decide the case at
some later date if the Executive did not act in what the court would
consider to be a timely manner. [Id.]{.underline}

Such a conclusion finds no support in the rationale or history of the
political question doctrine, and cannot be squared with the reservation
of these issues to the Executive Branch or with the other
[Baker]{.underline} factors. The political question doctrine is an
absolute doctrine involving government structure and the separation of
powers. It is not a choice-of-forum question or an equitable principle
to be freely and flexibly administered by the courts. Future
justiciability is not a "judgment call" for the court, [see]{.underline}
60 F. Supp. 2d at 281 n.3, but must be predicated upon a decision from
the political branches of government recognizing or endorsing a specific
allocation of rights and responsibilities of the successors to the
former SFRY, [Can]{.underline}, 14 F.3d at 162.[^4]

As a component of the recognition of foreign sovereigns, the methods by
which the United States ultimately resolves successor states\' claims to
assets, and successor states\' liability for debts, must be answered on
political grounds by the political branches of government, and are thus
"outside the competence" of courts. [Can]{.underline}, 14 F.3d at 163
(quoting [National City Bank v. Republic of China]{.underline}, 348 U.S.
356, 358 (1955)). The present policy of the United States is to
encourage the successors to the former SFRY to reach an internationally
negotiated settlement of these issues. Until those negotiations succeed,
or until allocation of assets and liabilities is settled politically in
some other way, claims raising these issues are simply unsuitable for
judicial resolution. The United States urges this Court to reject any
suggestion to the contrary made by the district court.

CONCLUSION

The judgment of the district court should be affirmed insofar as it
acknowledges that the claims against the Successor Defendants are barred
by the political question doctrine and reversed insofar as it places
improper limits on the political functions reserved to the Executive
Branch.

Dated: New York, New York

January 31, 2000

Respectfully submitted,

MARY JO WHITE,

[United States Attorney for the]{.underline}

[Southern District of New York]{.underline},

[Attorney for]{.underline} Amicus Curiae

> [United States of America]{.underline}.

WENDY H. SCHWARTZ,

GIDEON A. SCHOR,

[Assistant United States Attorneys]{.underline},

> [Of Counsel]{.underline}.

**Certificate of Compliance**

> Pursuant to Rules 29(c), (d), and 32(a)(7)(C) of the Federal Rules of
> Appellate Procedure, the undersigned counsel for the United States
> hereby certifies that this brief complies with the type-volume
> limitation of Rule 32(a)(7)(B). As measured by the word processing
> system used to prepare this brief, there are 4990 words in the brief.
>
> MARY JO WHITE,

[United States Attorney for the]{.underline}

[Southern District of New York]{.underline},

> By: WENDY H. SCHWARTZ,
>
> [Assistant United States Attorney]{.underline}

[^1]:
    > \* "JA \_\_" refers to the Joint Appendix filed by the parties in
    > this action.

[^2]:
    > \* It should be noted that during the pendency of these
    > international negotiations, none of the Successor Defendants has
    > as yet had access to United States-based assets of the former
    > SFRY. Upon dissolution of the SFRY, in accordance with United
    > Nations Security Council Resolutions and Presidential Executive
    > Orders issued under the International Emergency Economic Powers
    > Act (\"IEEPA\"), 50 U.S.C. §§ 1701 [et seq.]{.underline}, the
    > United States instituted a comprehensive program of economic
    > sanctions against the FRY(S&M). Under this program, all United
    > States-based property and interests in property of the FRY(S&M),
    > and of the former SFRY, in existence on or before December 27,
    > 1995, are "blocked," 31 C.F.R. § 585.301, and may not, without a
    > Government license, be "transferred, paid, exported, withdrawn, or
    > otherwise dealt in." 31 C.F.R. § 585.201(a), (b); [see
    > generally]{.underline} [Beogradska Banka v. Interenergo,
    > Inc.]{.underline}, No. 97 Civ. 2065 (JGK), 1998 WL 661481, \*4-5
    > (S.D.N.Y. Sept. 24, 1998); [Federal Republic of Yugoslavia v.
    > Park-71st Corporation]{.underline}, 913 F. Supp. 191, 193 n.2
    > (1995). Such assets are expected to remain blocked until there is
    > a political resolution of, [inter alia]{.underline}, the
    > successors' rights and responsibilities with respect to assets and
    > liabilities of the former SFRY. [See]{.underline} Statement by
    > James B. Foley, Deputy Spokesman on Yugoslav State Succession,
    > 1997 WL 14464578 (Sept. 30, 1997); [see also]{.underline}
    > Presidential Determination No. 96-7, 61 Fed. Reg. 2887 (Dec. 27,
    > 1995) (permitting certain unblocking of FRY(S&M) assets, but
    > stating that all property in existence on or before December 27,
    > 1995, will remain blocked \"until provision is made to address
    > claims or encumbrances, including the claims of the other
    > successor states of the former Yugoslavia\").

[^3]:
    > \* Regarding succession of states, the Restatement sets forth some
    > general standards that contemplate certain succession rights and
    > responsibilities. [See]{.underline} Restatement §§ 208-210. For
    > instance, under section 208 of the Restatement, "\[w\]hen a state
    > succeeds to another state [with respect to particular
    > territory]{.underline}, the capacities, rights, and duties of the
    > predecessor state [with respect to that territory]{.underline}
    > terminate and are assumed by the successor state, as provided in
    > §§ 209-10." [Id.]{.underline} (emphasis added). However, this
    > section does not address extra-territorial "capacities, rights and
    > duties," which ordinarily terminate "\[w\]hen the state ceases to
    > exist. . . ." Restatement § 208, comment a. Moreover, under § 209
    > of the Restatement, \"\[s\]ubject to agreement between predecessor
    > and successor states, responsibility for . . . rights and
    > obligations under \[the predecessor\'s\] contracts remain with the
    > predecessor state. . . . \[subject to certain exceptions.\]\"
    > Restatement § 209(2). While comment f to that section suggests
    > that it may be unfair for a new state to repudiate contracts of
    > its predecessor, the comment does not call for a successor to
    > assume those contractual obligations unless one of the exceptions
    > applies, [see]{.underline} § 209(2)(a)-(c), which is not the case
    > here. [See]{.underline} Restatement § 209, comment f.

[^4]:
    > \* Indeed, settlement of international claims can be difficult and
    > lengthy, particularly in the context of state dissolution. For
    > instance, the issue of succession to United States-based assets
    > belonging to South Vietnam that were frozen upon that country's
    > effective dissolution in 1975 was not resolved until January 28,
    > 1995. [See]{.underline} Agreement Between the Government of the
    > United States of America and the Government of the Socialist
    > Republic of Vietnam Concerning the Settlement of Certain Property
    > Claims, 1995 WL 79523. However, the passage of twenty years did
    > not alter the political character of that determination or justify
    > the judiciary attempting its own solution. [Can]{.underline}, 14
    > F.3d at 163-64.