United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued October 14, 2011 Decided February 28, 2012

No. 10-7174

MCKESSON CORPORATION, ET AL.,

APPELLEES

v.

ISLAMIC REPUBLIC OF IRAN,

APPELLANT

FINANCIAL ORGANIZATION FOR THE EXPANSION OF 

OWNERSHIP OF PRODUCTIVE UNITS, ET AL.,

APPELLEES

Appeal from the United States District Court

for the District of Columbia

(No. 1:82-cv-00220)

Christopher J. Wright argued the cause for appellant. On 

the briefs were Thomas G. Corcoran Jr., Laina C. Wilk 

Lopez, and Henry M. Lloyd. 

Mark N. Bravin argued the cause for appellees McKesson 

Corporation, et al. With him on the briefs was Mark R. 

Joelson. David M. Kerr entered an appearance. 
2

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

Justice, argued the cause as amicus curiae United States. 

With him on the brief were Tony West, Assistant Attorney 

General, Ronald C. Machen Jr., U.S. Attorney, Douglas N. 

Letter, Attorney, and Harold Hongju Koh, Legal Adviser, 

U.S. Department of State.

Before: SENTELLE, Chief Judge, TATEL and BROWN, 

Circuit Judges.

Opinion for the Court filed by Circuit Judge BROWN.

BROWN, Circuit Judge: This decades-long dispute 

boils down to a rather simple set of allegations: McKesson 

Corporation, a U.S. company, claims that after the Islamic 

Revolution, the government of Iran expropriated McKesson’s 

interest in an Iranian dairy and withheld its dividend 

payments. McKesson filed its complaint in 1982, and the 

procedural nightmare that followed resembles the harshest 

caricature of the American litigation system as one in which 

justice can be continually delayed, if not denied. This case 

has reached our Court on five prior occasions, and we have 

remanded it for numerous trials by the district court. Yet after 

almost thirty years of effort, this litigation has yet to 

definitively address the foundational issues of this case—

namely, whether this Court has jurisdiction over McKesson’s 

claim and whether any recognized body of law provides 

McKesson with a private right of action against Iran. 

I. Background

The facts of this case are set forth fully in earlier

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, 
3

347–49 (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”). Sherkat Sahami Labaniat 

Pasteurize Pak (“Pak Dairy”), a joint venture between 

McKesson and private Iranian citizens, was incorporated on 

March 12, 1960. McKesson’s ownership interest in Pak, 

initially 50 percent, had decreased to 31 percent at the time of 

the Islamic Revolution. McKesson alleges that in the wake of 

the Revolution, agents and instrumentalities of the 

government of Iran seized control of the board of directors of 

Pak. Through a series of hostile actions allegedly instigated

by the government, the board effectively froze out 

McKesson’s stake in Pak and blocked McKesson’s receipt of 

dividend payments. In 1982, McKesson, joined by the 

Overseas Private Investment Corporation (“OPIC”), filed suit 

in the United States District Court for the District of 

Columbia, alleging that Iran had unlawfully expropriated its 

property without compensation. 

Pursuant to Executive Order 12,294, 46 Fed. Reg. 14,111 

(Feb. 24, 1981), the case was stayed while the plaintiffs 

presented their claims to the Iran-United States Claims 

Tribunal (“Tribunal”). From McKesson’s perspective, the 

Tribunal rendered a mixed result. Although the Tribunal held 

that interference with McKesson’s rights had not amounted to 

an expropriation by the last date of the Tribunal’s jurisdiction, 

it did rule that Pak Dairy had unlawfully withheld from 

McKesson cash dividends declared in 1979 and 1980. See 

Foremost Tehran, Inc. v. Islamic Republic of Iran, 10 IranU.S. Cl. Trib. Rep. 228, 1986 WL 424309 (1986) (“Tribunal 

Award”). The Tribunal also found that Pak Dairy was a 

corporation controlled by the Government of Iran, and 

accordingly awarded McKesson $1.4 million in damages, 

which included interest on its withheld dividends. According 

to the provisions of the Algiers Accords, Iran paid the 
4

amounts awarded out of a security account established at the 

Hague. 

Although the Tribunal award was substantial, it did not 

fully compensate McKesson for the ongoing expropriation of 

its interest in Pak. In an attempt to recover the value of that 

interest, McKesson revived this suit in April 1988 in the 

district court. Iran filed a motion to dismiss, claiming that it 

was immune from suit under the Foreign Sovereign 

Immunities Act of 1976 (“FSIA”), 28 U.S.C. § 1605, but the 

district court held that McKesson had properly pleaded 

jurisdiction under the commercial activities exception of the 

FSIA. Foremost McKesson, Inc. v. Islamic Republic of Iran, 

No. 82-0220, 1989 WL 44086, at *4 (D.D.C. Apr. 18, 1989) 

(“McKesson 1989”). On appeal, this Court remanded for 

further development of the record regarding whether Pak’s 

board of directors was an agency or instrumentality controlled 

by the state for purposes of the stringent requirements of the 

FSIA. McKesson I, 905 F.2d at 440 (noting that under FSIA, 

“agencies and instrumentalities of a foreign nation are 

presumed to be separate from each other and from the foreign 

state”). On remand, the district court found that the evidence 

established the necessary principal-agent relationship between 

the Government of Iran and the board of directors of Pak, and 

this Court affirmed the “extensive” and “well-supported” 

findings of the district court. McKesson II, 52 F.3d at 351–

52. 

The district court subsequently granted McKesson’s 

motion for summary judgment on the issue of liability, 

holding that, as a matter of law, Iran had wrongfully withheld 

from McKesson the payment of dividends declared by Pak 

Dairy in 1981 and 1982 and that Iran could be held liable in 

federal court for the expropriation and failure to pay 

dividends under the Treaty of Amity and customary 
5

international law. McKesson Corp. v. Islamic Republic of 

Iran, No. 82-0220, 1997 WL 361177, at *12–*15 (D.D.C. 

June 23, 1997) (“McKesson 1997”). Between January 18 and 

February 17, 2000, the district court held a bench trial to 

determine the appropriate amount of damages. McKesson 

Corp. v. Islamic Republic of Iran, 116 F. Supp. 2d 13 (D.D.C. 

2000) (“McKesson 2000”). The court awarded McKesson 

$20,071,159.14, which included the value of McKesson’s 

expropriated equity interest in Pak and the dividends withheld 

from McKesson in 1981 and 1982, plus simple interest 

calculated at 9 percent from August 12, 1981 to May 26, 

2000. Id. at 43. 

On appeal, Iran again argued that the court lacked 

jurisdiction, and further claimed that (1) material issues of 

fact existed with respect to liability, and (2) the district court 

erred in valuing Pak’s assets. We again affirmed jurisdiction 

under the FSIA and upheld the district court’s conclusion that 

the 1955 Treaty of Amity, Economic Relations, and Consular 

Rights, U.S.-Iran, Aug. 15, 1955, 8 U.S.T. 899 (“Treaty of 

Amity”), between the United States and Iran provided 

McKesson with a cause of action for expropriation. 

McKesson III, 271 F.3d at 1106–08. We also upheld the 

district court’s valuation of Pak’s assets. Id. at 1110. On the 

question of liability, however, Iran lived to fight another day, 

as we remanded the case for trial on two factual issues:

whether Pak had instituted a so-called “come-to-thecompany” 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 immediately petitioned the Supreme Court for 

certiorari to review McKesson III. The Solicitor General took 

over representation of OPIC, which had previously retained 

private counsel, and advocated for the denial of certiorari on 
6

grounds that the case was not ripe for review. In the course of 

its argument, however, the Solicitor General also made clear 

that the United States did not interpret the Treaty of Amity as 

providing a private right of action. Brief for the Overseas 

Private Investment Corporation, Islamic Republic of Iran v. 

McKesson, Nos. 01-1521 & 01-1708, 2002 WL 32134807, at 

*9–15 (July 24, 2002). The Supreme Court denied certiorari.

In light of the government’s change of position, this 

Court vacated “the portion of [McKesson III] addressing 

whether the Treaty of Amity between the United 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”). On remand, the 

district court essentially affirmed its earlier conclusion that 

the Treaty provides a cause of action, finding “no basis to 

disturb Judge Flannery’s earlier ruling” in McKesson 1997. 

McKesson Corp. v. Islamic Republic of Iran, 520 F. Supp. 2d 

38, 40 (D.D.C. 2007) (“McKesson 2007”).

In our most recent encounter with this case, we reversed 

the district court’s ruling that the Treaty of Amity provides 

McKesson with a private cause of action under United States 

law, noting that the Treaty “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.” McKesson Corp. v. Islamic Republic of Iran, 

539 F.3d 485, 489 (D.C. Cir. 2008) (“McKesson V”). In light 

of this conclusion, we again remanded the case and instructed 

the district court to consider three specific issues: (1) whether 
7

McKesson has a cause of action under Iranian law; (2)

whether, in light of the Supreme Court’s decision in Sosa v. 

Alvarez-Machain, 542 U.S. 692 (2004), customary 

international law (“CIL”) provides McKesson a cause of 

action; and (3) whether the act of state doctrine, which bars 

courts from evaluating public acts committed by foreign states 

within their own territory, applies to this case. We further 

ordered the district court to invite the views of the United 

States on the latter two issues. McKesson 2008, 539 F.3d at 

491.

Upon review of the parties’ submissions and the 

extensive record compiled during this case’s 27-year history, 

the district court held that McKesson does have a cause of 

action under Iranian law, that customary international law 

continues to provide McKesson with a cause of action, even 

in light of Sosa, and that the act of state doctrine does not 

apply. McKesson Corp. v. Islamic Republic of Iran, No. 82-

0220, 2009 WL 4250767, at *1 (D.D.C. Nov. 23, 2009) 

(“McKesson 2009”). Following that ruling, the parties 

submitted additional briefing on the merits of the Iranian law 

causes of action. After reviewing the parties’ submissions 

and hearing arguments, the court entered judgment for 

McKesson on its Iranian law causes of action and awarded 

$43,980,205.58 in damages and prejudgment interest. 

McKesson Corp. v. Islamic Republic of Iran, 752 F. Supp. 2d 

12, 23 (D.D.C. 2010) (“McKesson 2010”). Iran appeals.

In the interest of procedural fairness and judicial finality, 

we think this Sisyphean labor must come to an end. We 

conclude (1) the act of state doctrine does not preclude 

adjudication of this case; (2) McKesson has a private right of 

action against Iran under the Treaty of Amity as construed 

under Iranian law; and (3) Iran is liable for the expropriation 

of McKesson’s interest in the dairy and the withholding of 
8

McKesson’s dividends. Finally, we reverse the district 

court’s award of compound interest, as we find no evidence in 

the record supporting the conclusion that compound interest is 

a remedy recognized by Iranian law. Since Iran does not 

dispute this Court’s prior finding that simple interest is 

appropriate, we remand only for the calculation of an award 

based on the value of McKesson’s expropriated equity interest 

and withheld dividends, plus simple interest calculated at 9

percent from August 12, 1981 to the present day. 

I. Act of State Doctrine

After 29 years of litigation between the same two parties, 

this Court has yet to conclusively decide whether it has 

jurisdiction. One issue, at least is settled: this Court has thrice 

held that subject matter jurisdiction exists under the 

commercial activities exception of the FSIA, McKesson I, 905 

F.2d at 449–51; McKesson II, 52 F.3d at 350–51; McKesson 

III, 271 F.3d at 1106–07, and our previous decision made 

clear this is a question we will not revisit. See McKesson V, 

539 F.3d at 488. Left open, however, is whether the act of 

state doctrine applies and shields Iran from liability. Id. at 

491. The district court held that it does not, McKesson 2009, 

2009 WL 4250767, at *5. Reviewing the question de novo, 

see Agudas Chasidei Chabad of U.S. v. Russian Fed., 528 

F.3d 934, 952–55 (D.C. Cir. 2002), we affirm.

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.” Banco Nacional de Cuba v. Sabbatino, 376 U.S. 

398, 401 (1964). It applies when “the relief sought or the 

defense interposed would [require] a court in the United 

States to declare invalid the official act of a foreign sovereign 

performed within its own territory.” W.S. Kirkpatrick & Co., 
9

Inc. v. Environmental Tectonics Corp., 493 U.S. 400, 405 

(1990). When it applies, the doctrine serves as a “rule of 

decision for the courts of this country,” id. at 406, which 

requires courts to deem valid the acts of foreign sovereigns 

taken within their own jurisdictions. Id. at 409. 

Iran now claims that beginning in February 1980, the 

government imposed currency control regulations “which Pak 

had no choice but to follow.” Appellant’s Br. 38. It claims 

that evidence from the 2007 trial demonstrates that the 

currency control regulations prevented Pak from paying 

McKesson in any currency from February 1980 through 

September 29, 1981, and that after September 29, 1981, Pak 

could not pay McKesson in dollars without proper application 

and authorization by the Central Bank. We disagree with 

both Iran’s interpretation of the act of state doctrine and the 

underlying factual premises of its argument.

Although the Supreme Court has not defined the contours 

of the “official action” requirement of the act of state 

doctrine, the courts of appeals have understood the concept as 

referring to conduct that is by nature distinctly sovereign, i.e.,

conduct that cannot be undertaken by a private individual or 

entity. For example, this Court held that the denial of an 

official license permitting the removal of uranium from 

Kazakhstan was a sovereign act, as was a transfer of corporate 

shares to a state entity. World Wide Minerals, Ltd. v. 

Republic of Kazakhstan, 296 F.3d 1154, 1165–66 (D.C. Cir. 

2002). In direct contrast to the facts in this case, the Court 

emphasized that the “transfer and alleged conversion were 

accomplished pursuant to an official decree of the Republic of 

Kazakhstan.” Id. at 1166. Similarly, this Court applied the 

act of state doctrine where a foreign government’s finance 

minister officially ordered payment of a tax to the foreign 

government through a “private letter ruling, which under 
10

Brazilian law binds the parties.” Riggs Nat. Corp. v. Comm’r 

of Internal Revenue Serv., 163 F.3d 1363, 1366–68 (D.C. Cir. 

1999). See also Society of Lloyd’s v. Siemon-Netto, 457 F.3d 

94, 102–03 (D.C. Cir. 2006) (applying the act of state doctrine 

to preclude a challenge to the validity of a foreign statute). In 

each of these cases, the Court applied the act of state doctrine 

to preclude challenges to actions that, by their nature, could 

only be undertaken by a sovereign power.

The facts of this case differ dramatically from prior cases 

in which the act of state doctrine applied. Although 

McKesson has characterized its claim as one for 

“expropriation,” this is not a typical expropriation case in 

which a foreign government acts in its sovereign capacity to 

take private property for a public purpose. Rather, this case 

turns on claims that agents of the Iranian government—acting 

as representatives of various agencies and companies—took 

over Pak’s board of directors, “froze out McKesson’s board 

members, and stopped paying McKesson’s dividends.” 

McKesson III, 271 F.3d at 1103. The facts allege a pattern of 

conduct by Iran’s agents that cannot fairly be characterized as 

public or official acts of a sovereign government. Iran did not 

pass a law, issue an edict or decree, or engage in formal 

governmental action explicitly taking McKesson’s property 

for the benefit of the Iranian public. Instead, it allegedly took 

control of Pak’s board of directors and abused its position as 

majority shareholder, making McKesson’s claims “akin to a 

corporate dispute between majority and minority 

shareholders,” McKesson 1997, 1997 WL 361177, at *10 

n.17. This is not the type of “public act[] [of] a foreign 

sovereign power” to which the act of state doctrine applies. 

Sabbatino, 376 U.S. at 401; see also Alfred Dunhill of 

London, Inc. v. Republic of Cuba, 425 U.S. 682, 706 (1976) 

(declining to extend the act of state doctrine “to acts 

committed by foreign sovereigns in the course of their purely 
11

commercial operations,” such as conduct by Cuba’s agents in 

the operation of cigar businesses for profit); Malewicz v. City 

of Amsterdam, 517 F. Supp.2d 322, 339 (D.D.C. 2007) 

(holding that the act of state doctrine did not apply to actions 

that could be taken by “any private person or entity”).

Moreover, in making its argument, Iran attempts to 

dredge up factual issues that have long since been settled. In 

finding Iran liable for the withholding of McKesson’s earned 

dividends in 1979 and 1980, the Claims Tribunal implicitly 

found that Pak could have paid McKesson had its board of 

directors chosen to do so. See Tribunal Award, 10 Iran-U.S. 

Cl. Trib. Rep. 228 (1986). Indeed, a dissenting Tribunal 

member noted that Iran failed to cite any law that would 

“render ‘illegal’ Pak’s honoring of its contractual 

obligations—as, indeed, no legal authority has ever been cited

for the refusal to pay dividends to Foremost.” Id. After 

McKesson revived its expropriation claim, the district court 

likewise found that the withholding of McKesson’s dividends 

was not the result of a “nationalization” of Pak Dairy, but 

rather “sound[ed] in the nature of a corporate dispute between 

majority and minority shareholders.” McKesson 1989, 1989 

WL 44086, at *4. This Court affirmed that conclusion on 

multiple occasions. McKesson I, 905 F.2d at 449–50; see also 

McKesson II, 52 F.3d at 349 n.7. As such, the factual finding 

that McKesson’s claims rest on corporate actions taken by 

Iran’s agents on Pak’s board of directors has long been 

established as law of the case. See McKesson II, 52 F.3d at 

350 (“When there are multiple appeals taken in the course of 

a single piece of litigation, law-of-the-case doctrine holds that 

decisions rendered on the first appeal should not be revisited 

on later trips to the appellate court.”). At no point during the 

early stages of this litigation did Iran so much as intimate that 

currency control regulations prevented Pak from paying 

McKesson its earned dividends. It cannot raise this defense 
12

and re-litigate the associated factual issues four appeals—and 

over twenty years—after it first had the opportunity to do so.

II. Cause of Action

Having established that this Court has jurisdiction over 

McKesson’s claim, we must now decide which body of law, if 

any, provides McKesson with a private right of action against 

Iran. We previously held that the Treaty of Amity, as 

construed under U.S. law, does not provide McKesson with a 

cause of action, McKesson V, 539 F.3d at 491, but remanded 

the case to the district court to determine whether McKesson 

has a viable cause of action under either customary 

international law or Iranian law. The district court answered 

both questions in the affirmative. Although we reverse the 

court’s conclusion with respect to a CIL cause of action, we 

agree that McKesson’s suit may proceed under Iranian law.

a. Customary International Law

In McKesson 1997, the district court noted that customary 

international law “is a part of the law of the United States, and 

must be ascertained and enforced by federal courts.” 

McKesson 1997, 1997 WL 361177, at *15. Relying heavily 

on the Restatement (Third) of Foreign Relations Law, the 

court held that Iran is liable under customary international law 

because “its actions, aimed at McKesson, a foreign national, 

were clearly discriminatory” and “Iran neither offered nor 

provided any compensation to McKesson for its interest in 

Pak Dairy.” Id. In McKesson V, we asked the district court to 

consider whether the Supreme Court’s intervening decision in 

Sosa v. Alvarez-Machain, 542 U.S. 692 (2004), affected the 

viability of McKesson’s cause of action under customary 

international law. See McKesson V, 539 F.3d at 491. Sosa 

involved a claim brought under the Alien Tort Statute 
13

(“ATS”), 28 U.S.C. § 1350, a jurisdictional statute originally 

passed as part of the Judiciary Act of 1789. The Supreme 

Court held that the ATS, although by its terms purely 

jurisdictional, can support common law causes of action 

under customary international law, but only if the norms 

allegedly violated are sufficiently specific, universal, and 

obligatory. See Sosa, 542 U.S. at 732–33. On remand, the 

district court found that, like the ATS, the commercial 

activities exception to the FSIA is “more than a jurisdictional 

statute,” because in enacting it, Congress “demonstrated its 

intention that courts hear causes of action involving 

customary international law violations.” McKesson 2009,

2009 WL 4250767, at *3. We disagree.

The FSIA established a broad grant of immunity for 

foreign sovereigns that can only be abrogated by one of the 

statute’s narrowly drawn exceptions. 28 U.S.C. § 1330(a); 

World Wide Minerals, 296 F.3d at 1161. Jurisdiction in this 

case is based on the commercial activities exception, which 

provides that a foreign state shall not be immune from federal 

jurisdiction in any case in which the action is based upon, as 

pertinent here, “an act outside the territory of the United 

States in connection with a commercial activity of the foreign 

state elsewhere and that act causes a direct effect in the 

United States.” 28 U.S.C. § 1605(a)(2). 

The FSIA is purely jurisdictional in nature, and creates 

no cause of action. Republic of Austria v. Altmann, 541 U.S. 

677, 695 n.15 (2004); Cassirer v. Kingdom of Spain, 616 F.3d 

1019, 1026 (9th Cir. 2010) (en banc); Cicippio-Puleo v. 

Islamic Republic of Iran, 353 F.3d 1024, 1033–34 (D.C. Cir. 

2004). The Supreme Court has explained that “[t]he language 

and the history of the FSIA clearly establish that the Act was 

not intended to affect the substantive law determining the 

liability of a foreign state or instrumentality.” First Nat’l City 
14

Bank v. Banco Para El Comercio, 462 U.S. 611, 620 (1983). 

The FSIA simply codified the “restrictive theory” of 

sovereign immunity, under which the immunity of a 

sovereign is recognized with regard to sovereign or public 

acts, but not with respect to private acts. Altmann, 541 U.S. at

690–91. The language of § 1605(a)(2) thus refers to 

commercial activity of foreign governments as a reason why 

the defense of foreign sovereign immunity is unavailable. It 

makes no mention, however, of either a private cause of 

action or customary international law.

Nonetheless, the district court found that “in enacting the 

commercial activities exception, Congress, in essence, 

demonstrated its intention that courts hear causes of action 

involving customary international law violations.” McKesson 

2009, 2009 WL 4250767, at *3. Yet we find no evidence—

textual or otherwise— suggesting that Congress enacted the 

commercial activities exception on the understanding that 

courts would use it to create causes of action based on 

customary international law. Moreover, Congress enacted the 

FSIA in 1976, just one year after the Supreme Court signaled 

its reluctance to imply causes of action when faced with 

statutory silence. See Cort v. Ash, 422 U.S. 66, 78–80 (1975). 

Assuming, as we must, that Congress was aware of all

pertinent legal developments when it drafted the FSIA, 

Congress’ decision not to include an express private right of 

action in any provision of the FSIA reveals that its enactors 

intended it to be purely jurisdictional. See South Dakota v. 

Yankton Sioux Tribe, 522 U.S. 329, 351 (1998).

While the Supreme Court’s holding in Sosa is not binding 

here, the Court’s extensive and careful scrutiny of the Alien 

Tort Statute illustrates the unusual circumstances necessary to 

find that a jurisdictional statute authorizes federal courts to 

derive new causes of action from customary international law. 
15

See Sosa, 542 U.S. at 712–31. For example, the Court noted 

that the particular “anxieties of the preconstitutional period,” 

particularly the Continental Congress’s inability to deal with 

cases involving offenses committed against foreign 

ambassadors, counseled against interpreting the ATS in a way 

that would strip it of any practical effect. Id. at 715–19. The 

Court also explained that, at the time the ATS was passed, a 

certain small set of actions was universally understood to be 

within the common law. Id. at 720. By contrast, nothing in 

the legislative history of the FSIA suggests that Congress 

intended courts to use the commercial activities exception as a 

vehicle to create new causes of action.

Also instructive is the Supreme Court’s admonition to the 

lower courts to use caution when considering customary 

international law claims. To be sure, the Court did so in the 

context of the Alien Tort Statute, which it understood to 

contemplate a “narrow set of violations of the law of nations, 

admitting of a judicial remedy and at the same time 

threatening serious consequences in international affairs.” 

Sosa, 542 U.S. at 715. The broader principles the Court 

expressed, however, are still relevant to this case, in which the 

Court is also being asked to fashion a federal common law 

cause of action out of the ambiguous principles of customary 

international law. 

The Court first noted that because common law 

principles are now regarded as “made” rather than 

“discovered,” a judge deciding on reliance on a perceived 

international norm “will find a substantial element of 

discretionary judgment in the decision.” Id. at 726. The 

invocation of such judicial discretion—indeed, judicial 

lawmaking power—would be particularly dangerous in cases 

such as this one, in which jurisdiction is being asserted over a 

foreign sovereign.
16

The Court then noted that the “significant rethinking of 

the role of federal courts in making [common law]” caused by 

Erie R. Co. v. Tompkins, 304 U.S. 64 (1938), spawned a 

general practice of seeking legislative guidance “before 

exercising innovative authority over substantive law.” Id. No 

such guidance exists here, as the text and legislative history of 

the FSIA merely establish the conditions in which a court may 

assert jurisdiction over a foreign sovereign. They do not 

reveal an intent to encourage—or even allow—courts to infer 

new common law causes of action.

The Court also emphasized the decision to create a 

private right of action is better left to legislative judgment—a

particularly apt admonition in a case like this one, as creation 

of a right of action against a foreign government would 

certainly “raise[] issues beyond the mere consideration 

whether underlying primary conduct should be allowed or 

not[.]” Id. at 727. Collateral consequences can themselves be 

a bar, the Court recognized, particularly when the cause of 

action has “potential implications for the foreign relations of 

the United States.” Id. The Court cautioned that because 

“many attempts by federal courts to craft remedies for 

violation of new norms of international law would raise risks 

of adverse foreign policy consequences, they should be 

undertaken, if at all, with great caution.” Id. at 727–28. In 

sum, we find that the language and history of the FSIA, 

particularly when viewed in light of the principles enunciated 

in Sosa, do not support the creation of a private right of action 

for expropriation based on customary international law.

McKesson takes a different view of the legislative history 

of the FSIA, arguing that the statute’s legislative history 

demonstrates that Congress “recognized that a discriminatory 

and uncompensated expropriation violates international law 

and understood that district courts would recognize private 
17

causes of action against foreign states for expropriation in 

violation of [customary international law].” Appellee’s Br. at 

26. This argument is unpersuasive, however, because the 

legislative history on which McKesson relies refers to the 

“expropriation exception” of §1605(a)(3), an entirely different 

FSIA provision than the one conferring jurisdiction in this 

case. The expropriation exception applies only when rights in 

property “taken in violation of international law” are at issue 

and that property or any property exchanged for it “is present 

in the United States . . . or . . . is owned or operated by an 

agency or instrumentality of the foreign state and that agency 

or instrumentality is engaged in a commercial activity in the 

United States.” 28 U.S.C. § 1605(a)(3).

McKesson’s attempt to blur the boundaries between 

sections 1605(a)(2) and 1605(a)(3) disregards the significance 

of the carefully crafted limitations Congress imposed on each 

of the separate statutory exceptions to foreign sovereign 

immunity. Congress’s careful drafting makes clear that each 

exception only applies when specific conditions are satisfied. 

The facts of this case clearly do not fall within the

jurisdictional ambit of the expropriation exception. The 

property allegedly taken by Iran—McKesson’s equity interest 

in Pak—is not present in the United States, and the entities 

that allegedly froze out McKesson’s interest (on behalf of the 

government of Iran) are not engaged in commercial activity in 

the United States. As such, the expropriation exception is 

entirely irrelevant to McKesson’s case, and has no effect on 

whether Congress intended courts to use the commercial 

activities exception as a vehicle to create causes of action 

based on customary international law.

The district court found that the Second Hickenlooper 

Amendment, 22 U.S.C. § 2370(e)(2), evinced congressional 

intent that courts hear causes of action for expropriation under 
18

customary international law. McKesson 2009, 2009 WL 

4250767, at *4. McKesson picks up that refrain, adding that 

the Amendment embodies a sufficiently specific 

congressional authorization for federal courts to adjudicate 

expropriation claims against foreign states to constitute an 

independent cause of action. Appellee’s Br. at 31. We 

disagree. The Second Hickenlooper Amendment is not a 

grant of jurisdiction and it does not purport to enact or codify 

any cause of action. Its sole purpose was to counter the 

Supreme Court’s decision in Sabbatino by limiting the act of 

state doctrine to certain claims of expropriation. It is 

completely silent regarding the right to bring such claims in 

the first instance. As the Supreme Court has “sworn off” 

implied rights of action, Alexander v. Sandoval, 532 U.S. 275, 

287 (2001), absent the compelling and unusual circumstances 

that animated the Court’s analysis in Sosa, we decline to 

imply causes of action in the face of congressional silence.

b. Iranian Law

Having determined that customary international law does 

not provide McKesson with a cause of action, we turn now to 

the question of whether McKesson’s suit may proceed in a 

U.S. court under Iranian law. We hold that the Treaty of 

Amity, construed under Iranian law, provides McKesson with 

a private right of action against the government of Iran. 

Having so held, we need not determine whether McKesson 

may seek relief under any other Iranian statutes.

Iran concedes that the Treaty provides McKesson with a 

cause of action, but argues that the Treaty requires McKesson 

to bring its suit in an Iranian court. Specifically, Iran claims 

that the text, context, and practical implications of the Treaty 

of Amity preclude McKesson from bringing its suit in a U.S. 
19

court. All three elements of Iran’s argument fail to withstand 

scrutiny.

Iran first points to three textual provisions in the Treaty 

that, it claims, “unambiguously” show that the parties agreed 

that home country courts would hear disputes brought by 

investors of the other country. The first is Article III, Clause 

2, which provides that “[n]ationals and companies of either 

High Contracting Party shall have the freedom of access to 

the courts of justice and administrative agencies within the 

territories of the other High Contracting Party... both in 

defense and pursuit of their rights . . .”. Treaty of Amity, art. 

III, cl. 2, 8 U.S.T. 899. The language of this provision offers 

no support for Iran’s cause. Ensuring access to the courts of 

each contracting party is fundamentally different from 

mandating use of those courts. The former is the only 

“unambiguous” purpose of this clause. Certainly nothing in 

Article III, clause 2 prohibits a U.S. company from bringing 

suit in a U.S. court.

Iran then points to Article IV, Clause 2, which provides 

that “[p]roperty of nationals and companies of either High 

Contracting Party... shall receive the most constant protection 

and security within the territories of the other High 

Contracting Party... . Such property shall not be taken except 

for a public purpose, nor shall it be taken without the prompt 

payment of just compensation.” Treaty of Amity, art. IV, cl. 

2, 8 U.S.T. 899. This clause simply establishes the property 

rights of nationals and companies of each of the parties. It is 

completely silent as to how— or where— those rights can be 

enforced. This provision is thus irrelevant to Iran’s claim that 

its courts are the exclusive forum for claims brought by U.S. 

citizens.
20

Iran’s final textual argument involves Article XXI, 

clauses 1 and 2. The former provides that “[e]ach High 

Contracting Party shall accord sympathetic consideration to, 

and shall afford adequate opportunity for consultation 

regarding” interpretation of the Treaty. Treaty of Amity, art. 

XXI, cl. 1, 8 U.S.T. 899. While the provision does represent 

an agreement to attempt to resolve differences through 

diplomacy, it does not purport to affect the judicial rights of a 

national of one country to seek judicial redress against the 

other government. Similarly, clause 2, which provides that 

any dispute between the parties “not satisfactorily adjusted by 

diplomacy [] shall be submitted to the International Court of 

Justice, unless the High Contracting Parties agree to 

settlement by some other pacific means[,]” does not expressly 

preclude a national from seeking judicial redress from either 

country’s courts. Id. art. XXI, cl. 2. Indeed, the reference to 

the International Court of Justice indicates that this clause 

refers only to disputes among the governments themselves—

and not to disputes among governments and nationals of the 

other contracting party—because the ICJ only arbitrates 

disputes between sovereigns.

Iran’s arguments about the context of the Treaty of Amity 

are similarly unavailing. Iran first points to dicta in Banco 

Nacional de Cuba v. Sabbatino, 376 U.S 398, 422–23 (1964), 

which states that “the usual method for an individual to seek 

relief is to exhaust local remedies and then repair to the 

executive authorities of his own state to persuade them to 

champion his claim in diplomacy or before an international 

tribunal.” Iran corroborates this statement with testimony by 

Michael Ramsey, a law professor with multiple publications 

on international law. While we recognize that the Supreme 

Court’s very general statement might be true in the abstract, it

reveals nothing about the available methods of relief where 

two countries have entered into a treaty. 
21

Iran also notes that as of 1957, no case had been 

successfully brought by a U.S. investor against a foreign 

government in a U.S. court challenging an expropriation that 

had occurred abroad. The reason for this is quite obvious—

the Foreign Sovereign Immunities Act was not passed until 

1976. Moreover, for all we know, the Treaty could have been 

enacted to facilitate such suits as a means of encouraging 

foreign investment. And perhaps there was not much crossinvestment prior to the mid-twentieth-century ratification of 

Friendship, Commerce, and Navigation Treaties (like the 

Treaty of Amity), which would make the absence of such 

cases attributable to a lack of opportunity rather than any 

governing legal norm.

Finally, Iran claims that McKesson’s interpretation of the 

Treaty would lead to absurd results, because it would allow 

Iran to sue the United States for a taking in an Iranian court—

or, for that matter, in the court of any country with personal 

jurisdiction over the United States. Assuming that the 

prospective forum country had a jurisdictional statute 

equivalent to the FSIA, Iran’s description of the implications 

of McKesson’s interpretation is correct. We do not find the 

purported “absurdity” of these consequences sufficient reason 

to interpret the Treaty of Amity in the manner suggested by 

Iran. Although we understand that forum selection is a major 

issue in any treaty negotiation, we also recognize that 

negotiations between two countries will necessarily result in 

an agreement containing provisions that are less than ideal for 

one, or both, of the parties. We find it more reasonable to 

interpret the Treaty’s silence on the forum selection issue as 

allowing nationals or corporations of either country to sue in 

their preferred forum, as such an interpretation benefits both 

contracting parties by ensuring that nationals of each country 

will have the fullest opportunity to recover their losses in the

event of an unlawful expropriation. Under Iran’s 
22

interpretation, by contrast, Iranian citizens would be forced to 

sue in the United States—a consequence that seems just as 

“absurd,” if not more so, than the consequences arising out of 

our decision to allow McKesson’s Treaty-based claim to 

proceed in U.S. court.

There is no tension between our decision here and our 

prior decision in McKesson V, in which we held that the 

Treaty of Amity did not provide a cause of action under U.S. 

law. The United States Supreme Court has long recognized a 

presumption against finding treaty-based causes of action, see 

Medellin v. Texas, 552 U.S. 491, 506 n.3 (2004), because the 

decision to create a private right of action “is one better left to 

legislative judgment in the great majority of cases.” Sosa, 

542 U.S. at 727. Iranian law—by Iran’s own explanation—

operates differently. Iran has conceded that the Treaty of 

Amity creates a private right of action under Iranian law, and 

only contests whether the Treaty permits McKesson to bring 

its claim in a U.S. court. See Appellant’s Br. at 9–10 (arguing 

that “the Treaty unambiguously provides for a Treaty suit 

against Iran in Iran and that failing, the ICJ”). Moreover, Iran 

has produced no evidence indicating that its domestic law 

recognizes a similar presumption against implying causes of 

action under treaties. To the contrary, Iran’s own expert 

testified that “the Treaty is a special law which supersedes the 

general Iranian laws,” Sanaei Op. at 4, and Iran argued in its 

brief that the general laws of Iran do not provide separate 

causes of action because “the Treaty—as lex specialis—

provides the sole [cause of action].” Appellant’s Br. at 25.

In sum, we hold that the Treaty of Amity provides 

McKesson with a private right of action against Iran under 

Iranian law, and that McKesson’s suit can proceed in the U.S. 

courts. Because we find that the Treaty of Amity provides 

McKesson with a cause of action, we need not determine the 
23

viability of McKesson’s claims that Iran violated Article I of 

the Civil Responsibility Act of Iran, Article 308 of the Civil 

Code of Iran, or the Commercial Code of Iran. Accordingly, 

we also need not address Iran’s argument that the Treaty 

cause of action for expropriation is exclusive and supersedes 

all other possible Iranian law causes of action.

III. Liability under the Treaty of Amity

The Treaty of Amity provides:

Property of nationals and companies of either High 

Contracting Party, including interests in property, shall 

receive the most constant protection and security within 

the territories of the other High Contracting Party, in no 

case less than that required by international law. Such 

property shall not be taken except for a public purpose, 

nor shall it be taken without the prompt payment of just 

compensation. Such compensation shall be in an 

effectively realizable form and shall represent the full 

equivalent of the property taken; and adequate provision 

shall have been made at or prior to the time of taking for 

the determination and payment thereof.

Treaty of Amity, art. IV, para. 2. The district court noted that, 

aside from arguing that McKesson’s Treaty claim must be 

brought in Iran and is the exclusive remedy, Iran offered no 

defense to this cause of action. McKesson 2010, 752 F. Supp.

2d at 17. Accordingly, based on its prior findings that Iran 

caused McKesson’s dividends and investment to be taken 

without compensation, the district court found McKesson 

liable under the Treaty of Amity and reinstated its earlier 

award of damages, which was equivalent to the full value of 

the expropriated property plus simple interest, calculated 

through May 26, 2000. Id. at 18.
24

Iran now raises three challenges to the findings of the 

district court. First, it claims the district court erred by 

ignoring attribution principles under Iranian law. Second, it 

claims the non-payment of dividends resulted from a 

sovereign decision to control capital flight. Finally, it argues 

that under Iranian law, Pak’s board exercised its discretion to 

implement a “come to the company” requirement by at least 

October 26, 1981. Acceptance of any of these arguments, 

however, would require this Court to revisit—and indeed, 

overwrite—factual findings that have long since been settled. 

Accordingly, we reject Iran’s arguments and uphold the 

district court’s holding that Iran is liable to McKesson under 

the Treaty of Amity.

Iran’s first argument—that under Iranian law, the 

government of Iran cannot be held responsible for the actions 

of Pak’s board of directors—is by far its most compelling, 

because it does reveal a significant flaw in the reasoning of 

the district court. The district court did not explicitly analyze 

whether, under Iranian law, the government could be held 

responsible for actions of its purported agents. Rather, the 

court noted that prior rulings of the district court “have 

established fault in this case on the part of Iran, as ‘Pak 

Dairy’s board and its government shareholders forced the 

dairy to disregard its commercial mission and its duties to 

McKesson as a shareholder.’” McKesson 2010, 752 F. Supp.

2d at 19 (quoting McKesson II, 52 F.3d at 351). However, 

any reliance on McKesson 1997, or any prior legal finding of 

attribution by either this Court or the district court, was 

misplaced, as none of those cases evaluated attribution under 

the principles of Iranian law. 

But acceptance of Iran’s argument would lead to an 

untenable result, as it would prevent foreign investors from 

obtaining any recourse under the Treaty-based cause of action 
25

that Iran has repeatedly acknowledged. By claiming that it 

cannot be held responsible under the Treaty—or under any of 

the private laws of Iran—for the actions of its agents, Iran 

attempts to engage in a legal sleight of hand. Even a suit in 

Iranian court would be pointless, as the government could not 

be held liable for the actions of McKesson’s board of 

directors regardless of the forum adjudicating the cause of 

action.

Iran’s claim that its domestic law precludes attribution of 

the Board’s unlawful behavior to the government is fatally 

flawed, because it contradicts the plain language of the Treaty

and thus ignores the Iranian law principle that “the Treaty is a 

special law which supersedes the general Iranian laws.” 

Appellant’s Br. at 24. The language of the Treaty does not 

distinguish between direct and creeping expropriation; it 

simply provides that property of foreign nationals “shall not 

be taken except for a public purpose, nor shall it be taken 

without the prompt payment of just compensation.” Treaty of 

Amity, art. IV, para.2. Whether the property was taken 

through interference by a state in the use of that property or 

through a formal expropriatory decree is immaterial. See 

Tribunal Award, 10 Iran-U.S. Cl. Trib. Rep. 228 (explaining 

that “[i]t is well settled, in this Tribunal’s practice as 

elsewhere, that property may be taken under international law 

through interference by a state in the use of that property or 

with the enjoyment of its benefits. This remains true in the 

absence of a formal expropriatory decree, even where the 

formal legal title to the property is not affected.”). Here, the 

factual finding that Iran controlled six of the seven seats on 

Pak Dairy’s board of directors and dictated the company’s

routine business decisions, including declaring and paying 

dividends and honoring the dairy’s contractual commitments, 

is well-settled law of the case. McKesson II, 52 F.3d at 351–

52. Twenty years ago, the district court found that “[t]he 
26

board decided that Pak Dairy would not pay any money to 

foreign shareholders, including McKesson” and that the 

“extensive involvement in day-to-day operations of Pak 

Dairy” is evidence that the business was under the complete 

control of the Iranian government. Id. at 352. Iran’s 

challenge to that factual finding was subsequently addressed 

and rejected by this Court. Id. Put simply, we agree with the 

Tribunal that the language of the Treaty renders Iran liable for 

the taking of McKesson’s property. 

Iran’s attempt to circumvent the language of the Treaty 

is, ironically, undermined by its own explanation of how the 

Treaty interacts with Iranian private law. Iran claims that the 

rule under Iranian law is that “no one is liable for the actions 

of another.” Appellant’s Br. at 51. But while arguing that the 

Treaty supersedes all causes of action under Iranian private 

law, Iran’s expert testified that “the Treaty is a special law 

which supersedes the general Iranian laws.” Sanaei Op. at 4. 

Assuming the internal consistency of Iranian law, this 

principle must not only hold true when evaluating causes of 

action, but also when determining liability. Iran cannot have 

it both ways—it cannot claim that the Treaty trumps its 

domestic laws by foreclosing other causes of action while 

simultaneously claiming that its domestic laws regarding 

vicarious liability trump the plain language of the Treaty, 

which would hold Iran liable for any taking of the property of 

foreign nationals. We thus find Iran’s attribution defense 

unavailing because it conflicts with both the language of the 

Treaty and Iran’s description of the hierarchy of its own laws.

Iran’s two other defenses are barred by the law of the 

case doctrine. First, Iran argues the non-payment of 

dividends was caused by a sovereign decision to prevent 

capital flight. As explained above, the district court 

previously determined that Pak’s failure to pay dividends to 
27

McKesson resulted from a corporate decision by Pak’s board 

of directors, not from a sovereign decision to stanch the flow 

of capital from the country. See McKesson 2010, 752 F. 

Supp. 2d at 16 (“[I]t is hard to imagine how Iran could 

legitimately believe the currency controls defense is still 

viable at this stage of the litigation, given my ruling in 2009 

that Iran’s actions were ‘commercial in nature’ and that the 

act of state doctrine therefore does not apply.”). 

Second, Iran claims Pak implemented a “come to the 

company” requirement for the payment of dividends under 

Iranian law. Iran’s attempt to re-litigate this defense is even 

more brazen, as Iran’s argument that “custom and practice” in 

Iran established a “come to the company” requirement at Pak 

as a matter of Iranian law was rejected on summary judgment 

in 1997 and affirmed by this Court in McKesson III, 271 F.3d 

at 1109 (holding that the affidavits provided by Iran’s experts 

“fall short of proving that this general practice reflects a legal 

requirement” and that “no general principle of Iranian 

corporate law excuses [Pak’s] withholding of McKesson’s 

dividends due to failure to come to the company”). We did, 

however, find that Iran made a credible showing that Pak 

exercised its discretion to implement a “come to the 

company” requirement and denied McKesson’s motion for 

summary judgment. Id. But during the 2007 trial before the 

district court, Iran failed to prove its factual defense that Pak 

had in fact adopted such a requirement. See McKesson 2007, 

520 F. Supp. 2d at 50–51. This Court remains bound by its 

prior factual findings even where the governing body of law 

changes. See LaShawn A. v. Barry, 87 F.3d 1389, 1393 (D.C. 

Cir. 1996) (“The Supreme Court has instructed the lower 

courts to be loathe to reconsider issues already decided in the 

absence of extraordinary circumstances such as where the 

initial decision was clearly erroneous and would work a 

manifest injustice.”). Our adjudication of this case under 
28

Iranian law does not provide Iran with the opportunity to relitigate questions of fact that have previously been found in 

McKesson’s favor.

IV. Award of Compound Interest

We now turn to the district court’s decision to award 

McKesson compound interest from May 27, 2000 through the 

present day. The district court found that “[u]nder Iranian 

law, this Court is not constrained to award simple interest, and 

Iran does not argue to the contrary.” McKesson 2010, 752 F. 

Supp. 2d at 22. Noting that Iranian law provides no guidance 

on when an award of compound interest is appropriate, the 

court looked to federal common law, under which compound 

interest is appropriate where simple interest is insufficient to 

make plaintiffs whole. Id. Although awards of damages are 

generally reviewed for abuse of discretion, we review the 

district court’s award of compound interest de novo because it 

requires us to interpret foreign law. See City of Harper 

Woods Employees’ Retirement Sys. v. Olver, 589 F.3d 1292, 

1298 (D.C. Cir. 2009). Upon review of the record, we 

reverse, and in accordance with our prior ruling in McKesson 

III, remand for calculation of an award based on simple 

interest.

Iran argues its domestic laws do not recognize compound 

interest, and the record contains ample support for its claim. 

Nowhere in the record does either expert on Iranian law 

explicitly state that Iranian law permits the award of 

compound interest. The closest analogue appears to be “late 

payment damages” or “damages for delay of payment,”

which, at first glance, might reasonably be translated as 

“interest.” Sanaei Op. at 15. Further review of the record, 

however, reveals that Iranian law awards damages for delay 

of payment under a very narrow set of circumstances. To 
29

receive an award of delay damages, a plaintiff must establish: 

(a) a debt owed in Iranian currency; (b) a valid demand for the 

debt by the creditor and a refusal to pay by the debtor; and (c) 

an evident difference between the price indices [published by 

Iran’s central bank] from the time of maturity to the time at 

which the creditor demanded payment. Id. As explained 

even by McKesson’s expert, Article 520 of the Iranian Civil 

Procedure Code further explains that “[w]ith respect to 

demanding the [delay] damages sustained, plaintiff must 

prove the reason that the sustained loss has directly resulted 

from [defendant’s] failure or delay to perform the obligation 

and/or deliver the relief sought. Otherwise the damages 

would be dismissed by the court.” Katirai Second Supp. Op. 

at 15. When viewed in context of the circumstances in which 

it can be awarded, “delay damages” clearly does not refer to 

“compound interest,” because compound interest does not 

purport to quantify an actual loss. The Iranian concept of 

“delay damages” refers to actual damages based on 

fluctuations in the value of the Iranian currency, not to any 

type of interest.

In fact, the Iranian Code of Civil Procedure Article 712

explicitly states that “[d]amages which are arisen out of 

damages shall not be recovered,” Katirai Op. at 709,

1

 1 Katirai notes that this provision “[has] not been repeated” in the 

Iranian Civil Procedure Act of 2000, but he does not claim that it 

has been repealed. In its brief, Iran references a 2005 judgment 

from the Tehran Court of Appeals that interpreted this provision. 

See Appellant’s Br. at 61.

which 

implies that any recovery of interest is forbidden under 

Iranian law, much less compound interest. Iran’s expert 

opined that under Islamic and Sharia law, payment of interest 

is forbidden, Sanaei Op. at 15, and statements made by Iran’s 

religious leaders implicitly support his interpretation. See 
30

Katirai Op. at 38 (quoting Ayatollah Ali Khamenei’s 

statement that “[d]amages resulting from a delay in payment 

of a debt . . . is owed by the debtor and is not subject to the 

rules applicable to interest”). Perhaps fortunately for 

McKesson, Iran does not argue that an award of simple 

interest is contrary to Iranian law. In response, McKesson’s 

expert on Iranian law simply states, ipse dixit, that Iran “has 

adopted the principles of customary international law 

concerning the payment of interest as a component of full 

compensation for the expropriation of a foreign investment in 

Iran,” and points to Iran’s enactment of legislation adopting 

the Treaty of Amity and other bi-lateral investment treaties. 

Katirai Second Supp. Op. at 13. His reliance on the Treaty of 

Amity is misplaced, however, because the standard for “full 

compensation” prescribed by the Treaty is ambiguous 

regarding the award of interest. Moreover, the Treaty was 

enacted long before the Islamic Revolution took place, 

making it erroneous to assume that Iran’s current legal system 

is identical to the one in place when the Treaty was enacted. 

In light of the utter lack of evidence indicating that compound 

interest is a recognized remedy under Iranian law, we reverse 

that portion of the award; however, because Iran does not 

challenge the award of simple interest in this case, we remand 

for calculation of an award consisting of the value of 

McKesson’s expropriated interest in Pak and its withheld 

dividends plus simple interest.

VI. Conclusion

We affirm the district court’s holding that the act of state 

doctrine does not apply in this case. While we reverse the 

court’s holding that McKesson may base its claim on 

customary international law, we affirm its alternative holding 

that the Treaty of Amity, construed as Iranian law, provides 

McKesson with a private right of action, and we further 
31

affirm its finding that Iran is liable for the expropriation of 

McKesson’s equity interest in Pak and the withholding of 

McKesson’s dividend payments. Finally, we reverse the 

court’s award of compound interest and remand for 

calculation of an award consisting of the value of McKesson’s 

expropriated property and withheld dividends plus simple 

interest. Because the district court already conducted a 

detailed valuation of McKesson’s equity interest in Pak in 

McKesson 2000, we hope the district court can put an end to 

nearly thirty years of litigation through some simple 

multiplication.

So ordered.