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Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 

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United States Court of Appeals 

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued May 6, 2008 Decided August 26, 2008 

No. 07-7113 

MCKESSON CORPORATION, ET AL., 

APPELLEES

v. 

ISLAMIC REPUBLIC OF IRAN, 

APPELLANT

Appeal from the United States District Court 

for the District of Columbia 

(No. 82cv00220) 

H. Thomas Byron III, Attorney, U.S. Department of 

Justice, argued the cause for amicus curiae United States of 

America in support of appellant. With him on the brief were 

Jeffrey S. Bucholtz, Acting Assistant Attorney General, 

Jeffrey A. Taylor, U.S. Attorney, and Douglas N. Letter, 

Attorney. 

Thomas G. Corcoran, Jr. argued the cause for appellant. 

With him on the briefs were Laina C. Wilk and Henry M. 

Lloyd. 

USCA Case #07-7113 Document #1135046 Filed: 08/26/2008 Page 1 of 11
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Mark N. Bravin argued the cause for appellees. With him 

on the brief were Peter Buscemi, Thomas J. O’Brien, and 

Mark R. Joelson. 

Before: TATEL, GARLAND, and GRIFFITH, Circuit Judges. 

Opinion for the Court filed by Circuit Judge GRIFFITH. 

GRIFFITH, Circuit Judge: In this long-running dispute, 

now before us for a fifth time, McKesson Corporation alleges 

that the state of Iran unlawfully expropriated its investment in 

an Iranian dairy company. In this appeal, Iran raises a number 

of challenges to the latest decisions of the district court. We 

hold that the district court properly asserted subject matter 

jurisdiction, but reverse its conclusion that the treaty provides 

a cause of action and its refusal to reconsider its earlier ruling 

that customary international law does so as well. We remand 

for further proceedings consistent with this opinion. 

I. 

 The facts of this case are set forth fully in our previous 

decisions. See Foremost-McKesson, Inc. v. Islamic Republic 

of Iran, 905 F.2d 438, 440–42 (D.C. Cir. 1990) (“McKesson 

I”); McKesson Corp. v. Islamic Republic of Iran, 52 F.3d 346, 

347–50 (D.C. Cir. 1995) (“McKesson II”); McKesson HBOC, 

Inc. v. Islamic Republic of Iran, 271 F.3d 1101, 1104–05 

(D.C. Cir. 2001) (“McKesson III”). Suffice it to say for 

purposes of this appeal that McKesson, an American 

company, is a significant shareholder in an Iranian dairy 

company called Sherkat Sahami Labaniat Pasteurize Pak 

(“Pak”). As alleged, Iran effectively froze out McKesson’s 

stake in Pak and blocked its receipt of dividend payments. In 

1982, McKesson filed suit in the United States District Court 

for the District of Columbia, alleging that Iran had unlawfully 

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expropriated its property without compensation. The Overseas 

Private Investment Corporation (“OPIC”), a federal agency 

that helps American businesses invest abroad, participated as 

a co-plaintiff because it had insured a significant portion of 

McKesson’s stake in Pak. OPIC has since been dismissed 

from the litigation. 

In our first two decisions, we held that McKesson had 

properly pleaded federal jurisdiction under the commercial 

activity exception of the Foreign Sovereign Immunities Act 

(“FSIA”), 28 U.S.C. § 1605(a)(2). See McKesson I, 905 F.2d 

at 449–51, 453; McKesson II, 52 F.3d at 350–51. In the third 

decision, we affirmed jurisdiction under the FSIA and also 

held that the 1955 Treaty of Amity, Economic Relations, and 

Consular Rights, Aug. 15, 1955, U.S.-Iran, 8 U.S.T. 899 

(“Treaty of Amity”), between the United States and Iran 

provided McKesson a cause of action for expropriation. 

McKesson III, 271 F.3d at 1106, 1107–08. We remanded the 

case to the district court for a trial on two factual issues: 

whether Pak had instituted a so-called “come-to-the-company 

requirement” for the payment of dividends, and whether it 

would have been futile for McKesson to “come” to Pak to 

collect its dividends. Id. at 1108–10. 

 Iran petitioned the Supreme Court for certiorari to review 

McKesson III. Until then, OPIC had been represented by 

private counsel that had taken the position that the Treaty of 

Amity provided a cause of action. In the Supreme Court, the 

Solicitor General took over OPIC’s representation and 

opposed certiorari, arguing that even though the Treaty of 

Amity did not provide a cause of action, certiorari was not 

appropriate because a final judgment had yet to be entered. 

The Court denied certiorari, and in light of the government’s 

change in position we vacated “the portion of [McKesson III] 

addressing whether the Treaty of Amity between the United 

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States and Iran provides a cause of action to a United States 

national against Iran in a United States court,” and instructed 

the district court “to reexamine that issue in light of the 

representation of the United States that it does not interpret 

the Treaty of Amity to create such a cause of action.” 

McKesson HBOC, Inc. v. Islamic Republic of Iran, 320 F.3d 

280, 281 (D.C. Cir. 2003) (“McKesson IV”). 

At issue on this appeal are the proceedings in the district 

court on remand from McKesson III and McKesson IV. The 

district court concluded that the Treaty of Amity provides a 

cause of action for McKesson. The court also denied Iran’s 

motion for reconsideration of its 1997 decision that customary 

international law (“CIL”)1

 provides a cause of action. The 

court then held a three-week bench trial on the two factual 

issues and ruled against Iran on both. Iran appeals, and we 

have jurisdiction under 28 U.S.C. § 1291. Iran urges us to revisit the question whether there is subject matter jurisdiction 

under the FSIA. Having thrice held that jurisdiction exists, we 

decline Iran’s request. McKesson I, 905 F.2d at 449–51; 

McKesson II, 52 F.3d at 350–51; McKesson III, 271 F.3d at 

1106; see also LaShawn A. v. Barry, 87 F.3d 1389, 1393 

(D.C. Cir. 1996) (en banc) (“[T]he same issue presented a 

second time in the same case in the same court should lead to 

the same result.”). 

Iran argues that the district court erred by interpreting the 

Treaty of Amity to provide McKesson a cause of action, by 

denying its motion to reconsider the earlier CIL ruling, by 

misconstruing our remand mandate in McKesson III, and by 

 

1

 CIL is occasionally referred to as the “law of nations.” It “results 

from a general and consistent practice of states followed by them 

from a sense of legal obligation.” RESTATEMENT (THIRD) OF 

FOREIGN RELATIONS LAW OF THE UNITED STATES § 102(2) (1986). 

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committing several errors during the trial. We reverse the 

district court on the first two issues, defer consideration of the 

remaining issues, and remand for further proceedings 

consistent with this opinion. 

II. 

We must determine whether the Treaty of Amity 

provides a private cause of action. If it does, then McKesson’s 

appearance as a plaintiff in federal court was a proper exercise 

of its “right . . . to seek judicial relief from injuries caused by 

another’s violation of a legal requirement.” Cannon v. Univ. 

of Chi., 441 U.S. 677, 730 n.1 (1979) (Powell, J., dissenting). 

If it does not, and if a cause of action cannot otherwise be 

found, then McKesson’s complaint must be dismissed. The 

district court concluded that McKesson had a cause of action 

under the Treaty of Amity. McKesson Corp. v. Islamic 

Republic of Iran, 520 F. Supp. 2d 38, 52–55 (D.D.C. 2007). 

Reviewing this interpretation de novo, we reverse. See United 

States v. Al-Hamdi, 356 F.3d 564, 569 (4th Cir. 2004) 

(“Interpretation of an international treaty is an issue of law 

subject to de novo review.”). 

To determine whether a treaty creates a cause of action, 

we look to its text. See United States v. Alvarez-Machain, 504 

U.S. 655, 663 (1992) (“In construing a treaty, as in construing 

a statute, we first look to its terms to determine its meaning.”). 

The Treaty of Amity, like other treaties of its kind, is selfexecuting. See Medellín v. Texas, 128 S. Ct. 1346, 1365–66 

(2008); Blanco v. United States, 775 F.2d 53, 60 (2d Cir. 

1985) (Friendly, J.); CURTIS A. BRADLEY & JACK L.

GOLDSMITH, FOREIGN RELATIONS LAW 379 (2d ed. 2006) 

(“[C]ourts commonly assume that certain types of bilateral 

treaties, such as . . . Friendship, Commerce, and Navigation 

(FCN) treaties, are self-executing.”). As such, it “operates of 

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itself without the aid of any legislative provision,” Foster v. 

Neilson, 27 U.S. (2 Pet.) 253, 314 (1829) (Marshall, C.J.), and 

its text is “the supreme Law of the Land,” U.S. CONST. art. 

VI, cl. 2, on par with that of a statute, Whitney v. Robertson, 

124 U.S. 190, 194 (1888). That the Treaty of Amity is selfexecuting begins but does not end our search for a treatybased cause of action, because “[w]hether a treaty is selfexecuting is a question distinct from whether the treaty 

creates private rights or remedies.” RESTATEMENT (THIRD) OF 

FOREIGN RELATIONS LAW OF THE UNITED STATES § 111 

cmt. h (1986) [hereinafter RESTATEMENT]; accord Renkel v. 

United States, 456 F.3d 640, 643 n.3 (6th Cir. 2006); United 

States v. Li, 206 F.3d 56, 67 (1st Cir. 2000) (en banc) (Selya 

& Boudin, JJ., concurring). “Even when treaties are selfexecuting in the sense that they create federal law, the 

background presumption is that ‘[i]nternational agreements, 

even those directly benefiting private persons, generally do 

not create private rights or provide for a private cause of 

action in domestic courts.’ ” Medellín, 128 S. Ct. at 1357 n.3 

(quoting RESTATEMENT, supra, § 907 cmt. a). 

We find nothing in the Treaty of Amity that overcomes 

this presumption. To be sure, article IV(2) of the Treaty of 

Amity directly benefits McKesson by declaring that “property 

shall not be taken except for a public purpose, nor shall it be 

taken without the prompt payment of just compensation.” 

McKesson contends that the Treaty of Amity creates a right 

(“property shall not be taken”) and provides a remedy (“just 

compensation”), and that together these make a cause of 

action. Not so. The Treaty of Amity tells us what McKesson 

will receive — money — but leaves open the critical question 

of how McKesson is to secure its due. For a federal court 

trying to decide whether to interject itself into international 

affairs, the Treaty of Amity’s silence on this point makes all 

the difference. A treaty that “only set[s] forth substantive 

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rules of conduct and state[s] that compensation shall be paid 

for certain wrongs . . . do[es] not create private rights of 

action for foreign corporations to recover compensation from 

foreign states in United States courts.” Argentine Republic v. 

Amerada Hess Shipping Corp., 488 U.S. 428, 442 (1989). 

And without a cause of action, McKesson cannot invoke 

federal judicial authority to pursue its desired remedy. Cf. 

HENRY M. HART, JR. & ALBERT M. SACKS, THE LEGAL 

PROCESS 137 (William N. Eskridge, Jr. & Philip P. Frickey 

eds., 1994) (“A right of action is a species of power — of 

remedial power. It is a capacity to invoke the judgment of a 

tribunal of authoritative application upon a disputed question 

about the application of preexisting arrangements and to 

secure, if the claim proves to be well-founded, an appropriate 

official remedy.”). 

It would be one thing if the Treaty of Amity explicitly 

called upon the courts for enforcement, as the Warsaw 

Convention does. See Convention for the Unification of 

Certain Rules Relating to International Transportation by Air, 

Oct. 12, 1929, 49 Stat. 3000, 137 L.N.T.S. 11 (declaring that 

“carrier[s] shall be liable for damage” to passengers and 

baggage (arts. 17, 18(1)); that “action[s] for damages” must 

be brought before certain courts (art. 28(1)); that “[t]he right 

to damages” lasts for two years (art. 29(1)); and that 

“passenger[s] or consignor[s] shall have a right of action” in 

cases of successive carriers (art. 30(3))); see also Curtin v. 

United Airlines, Inc., 275 F.3d 88, 90 (D.C. Cir. 2001) 

(“Article 18 of the Warsaw Convention, an international air 

carriage treaty ratified by the United States in 1934, creates a 

cause of action against an air carrier for loss or damage to a 

passenger’s checked baggage.”); cf. Key Tronic Corp. v. 

United States, 511 U.S. 809, 822 (1994) (Scalia, J., 

dissenting) (“Surely to say that A shall be liable to B is the 

express creation of a right of action.”). Federal court 

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participation is appropriate where the President, by and with 

the advice and consent of the Senate, makes a treaty declaring 

that money should change hands by way of judicial 

compulsion rather than executive negotiation. But unlike the 

Warsaw Convention, with its explicit references to “right[s] 

of action” and “action[s] for damages,” the Treaty of Amity 

reflects no such determination. 

Reasoning by analogy to the Takings Clause of the Fifth 

Amendment, McKesson next asks us to use our federal 

common law power to recognize an implied cause of action. 

The phrase “just compensation” appears in both the Treaty of 

Amity and the Takings Clause. Compare Treaty of Amity, art. 

IV(2) (“[P]roperty shall not be taken except for a public 

purpose, nor shall it be taken without the prompt payment of 

just compensation.”), with U.S. CONST. amend. V (“[N]or 

shall private property be taken for public use, without just 

compensation.”). McKesson urges us to infer a cause of 

action from the former, as the Supreme Court has from the 

latter. See First English Evangelical Lutheran Church v. 

County of Los Angeles, 482 U.S. 304, 316 & n.9 (1987); 

United States v. Causby, 328 U.S. 256, 267 (1946); Jacobs v. 

United States, 290 U.S. 13, 16 (1933). 

This attempt to draw an analogy between a treaty and the 

Constitution is unsound. When it comes to implied causes of 

action, the Constitution stands apart from other texts. See 

Davis v. Passman, 442 U.S. 228, 241–42 (1979) (explaining 

that “the question of who may enforce a statutory right is 

fundamentally different from the question of who may 

enforce a right that is protected by the Constitution”); 

Cannon, 441 U.S. at 733 n.3 (Powell, J., dissenting) (“[T]his 

Court’s traditional responsibility to safeguard constitutionally 

protected rights, as well as the freer hand we necessarily have 

in the interpretation of the Constitution, permits greater 

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judicial creativity with respect to implied constitutional 

causes of action.”). Inferring a cause of action from the 

Constitution squares with the “presum[ption] that justiciable 

constitutional rights are to be enforced through the courts.” 

Davis, 442 U.S. at 242. By contrast, inferring a treaty-based 

cause of action embroils the judiciary in matters outside its 

competence and authority. See Medellín, 128 S. Ct. at 1357 

n.3 (noting presumption against finding treaty-based causes of 

action); Sosa v. Alvarez-Machain, 542 U.S. 692, 727 (2004) 

(noting that “a decision to create a private right of action is 

one better left to legislative judgment in the great majority of 

cases,” and that “the possible collateral consequences of 

making international rules privately actionable argue for 

judicial caution”); Tel-Oren v. Libyan Arab Republic, 726 

F.2d 774, 799, 801–08 (D.C. Cir. 1984) (Bork, J., concurring) 

(arguing that separation-of-powers concerns counsel against 

inferring treaty-based causes of action). Our conclusion that 

the Treaty of Amity does not create an implied cause of action 

accords with the prevailing sentiment against recognition of 

implied causes of action. See, e.g., Corr. Servs. Corp. v. 

Malesko, 534 U.S. 61 (2001) (refusing to extend Bivens v. Six 

Unknown Named Agents of the Federal Bureau of Narcotics, 

403 U.S. 388 (1971), to provide cause of action against 

private party); Alexander v. Sandoval, 532 U.S. 275, 286 

(2001) (“Like substantive federal law itself, private rights of 

action to enforce federal law must be created by Congress.”); 

FDIC v. Meyer, 510 U.S. 471 (1994) (refusing to extend 

Bivens to provide cause of action against federal agency); 

RICHARD H. FALLON, JR. ET AL., HART AND WECHSLER’S THE 

FEDERAL COURTS AND THE FEDERAL SYSTEM 781–83, 816–21 

(5th ed. 2003) (describing retrenchment of implied causes of 

action in statutory and constitutional contexts). 

In the absence of a textual invitation to judicial 

participation, we conclude the President and the Senate 

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intended to enforce the Treaty of Amity through bilateral 

interaction between its signatories. We give “ ‘great weight’ ” 

to the fact that the United States shares this view. Medellín, 

128 S. Ct. at 1361 (quoting Sumitomo Shoji Am., Inc. v. 

Avagliano, 457 U.S. 176, 184–85 (1982)); see United States 

Amicus Br. at 5–11 (arguing that the Treaty of Amity does 

not create a cause of action). This interpretation is in keeping 

with traditional assumptions about how treaties operate. As 

the Supreme Court declared in The Head Money Cases: 

A treaty is primarily a compact between independent 

nations. It depends for the enforcement of its 

provisions on the interest and the honor of the 

governments which are parties to it. If these fail, its 

infraction becomes the subject of international 

negotiations and reclamations, so far as the injured 

party chooses to seek redress, which may in the end be 

enforced by actual war. It is obvious that with all this 

the judicial courts have nothing to do and can give no 

redress. 

Edye v. Robertson (The Head Money Cases), 112 U.S. 580, 

598 (1884). The Treaty of Amity does not provide a cause of 

action. We must leave to the political branches the 

implementation of its just compensation guarantee. 

III. 

We reverse the district court’s ruling that McKesson has 

a cause of action under the Treaty of Amity. In light of this 

conclusion, we remand for the district court to decide whether 

this suit can proceed. The court shall consider three issues. 

First, the district court must consider whether McKesson has a 

cause of action under Iranian law. McKesson has so 

contended in the district court, but the court has had no reason 

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to address the issue before now. Second, it must reconsider, in 

light of, inter alia, the Supreme Court’s intervening decision 

in Sosa v. Alvarez-Machain, 542 U.S. 692 (2004), whether 

CIL provides McKesson a cause of action. Third, it must 

determine whether the act of state doctrine applies to this 

case. “The act of state doctrine ‘precludes the courts of this 

country from inquiring into the validity of the public acts a 

recognized foreign sovereign power committed within its own 

territory.’ ” World Wide Minerals, Ltd. v. Republic of 

Kazakhstan, 296 F.3d 1154, 1164 (D.C. Cir. 2002) (quoting 

Banco Nacional de Cuba v. Sabbatino, 376 U.S. 398, 401 

(1964)). The doctrine must be addressed before this litigation 

is completed because if it applies Iran cannot be held liable. 

On the latter two issues, the district court shall invite the 

views of the United States, whose interests may be implicated 

by those matters. Because it is unclear whether McKesson’s 

suit may proceed, we defer for now Iran’s challenges to the 

district court’s interpretation of the remand order in 

McKesson III and its rulings at trial. 

 So ordered. 

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