Court Opinion

ID: 9424912
Source: CourtListenerOpinion
Date Created: 2023-08-02 23:13:10.692332+00
Date Added: 2024-06-11T17:22:52.181566
License: Public Domain

Mr. Justice Douglas,
concurring in the result.
Banco Nacional de Cuba v. Sabbatino, 376 U. S. 398, does not control the central issue in the present case. Rather, it is governed by National City Bank v. Republic of China, 348 U. S. 356.
I start from the premise that the defendant (petitioner) in the present litigation is properly in the District Court. Respondent, who brought this suit, is for our purposes the sovereign state of Cuba; and, apart from cases where another nation is at war with the United States, it is settled that sovereign states are allowed to sue in the courts of the United States. See Banco Nacional de Cuba v. Sabbatino, supra, at 408-410.
Cuba sues here to recover the difference between a loan made by petitioner and the proceeds of a sale of the collateral securing the loan. The excess is allegedly about $1.8 million. Petitioner sought to set off against that amount claims arising out of the confiscation of petitioner’s Cuban properties. How much those setoffs would be, we do not know. The District Court ruled that the amount of these setoffs “cannot be determined on these motions,” 270 F. Supp. 1004, 1011, saying that they represented “triable issues of fact and law.” Ibid.
*771I would reverse the Court of Appeals and affirm the District Court, remanding the case for trial on the amount of the setoff and I would allow the setoff up to the amount of respondent’s claim.
It was ruled in the Republic of China case that a sovereign’s claim may be cut down by a counterclaim or setoff. 348 U. S., at 364. The setoff need not be “based on the subject matter” of the claim asserted in the strict sense. The test is “the consideration of fair dealing.” Id., at 365. The Court said:
“The short of the matter is that we are not dealing with an attempt to bring a recognized foreign government into one of our courts as a defendant and subject it to the rule of law to which nongovernmental obligors must bow. We have a foreign government invoking our law but resisting a claim against it which fairly would curtail its recovery. It wants our law, like any other litigant, but it wants our law free from the claims of justice. It becomes vital, therefore, to examine the extent to which the considerations which led this Court to bar a suit against a sovereign in The Schooner Exchange [7 Cranch 116] are applicable here to foreclose a court from determining, according to prevailing law, whether the Republic of China’s claim against the National City Bank would be unjustly enforced by disregarding legitimate claims against the Republic of China. As expounded in The Schooner Exchange, the doctrine is one of implied consent by the territorial sovereign to exempt the foreign sovereign from its 'exclusive and absolute’ jurisdiction, the implication deriving from standards of public morality, fair dealing, reciprocal self-interest, and respect for the 'power and dignity’ of the foreign sovereign.” Id., at 361-362.
*772It would offend the sensibilities of nations if one country, not at war with us, had our courthouse door closed to it. It would also offend our sensibilities if Cuba could collect the amount owed on liquidation of the collateral for the loan and not be required to account for any setoff. To allow recovery without more would permit Cuba to have its cake and eat it too. Fair dealing requires allowance of the setoff to the amount of the claim on which this suit is brought — a precept that should satisfy any so-called rational decision.
If the amount of the setoff exceeds the asserted claim, then we would have a Sabbatino type of case. There the fund in controversy was the proceeds of sugar which Cuba had nationalized. Sabbatino held that the issue of who was the rightful claimant was a “political question,” as its resolution would result in ideological and political clashes between nations which must be resolved by the other branches of government.1 We would have that type of controversy here if, and to the extent that, the setoff asserted exceeds the amount of Cuba’s claim. I would disallow the judicial resolution of that dispute for the reasons stated in Sabbatino and by Mr. Justice Brennan in the instant case. As he states, the Executive Branch “cannot by simple stipulation change a political question into a cognizable claim.” But I would allow the setoff to the extent of the claim asserted by Cuba because Cuba is the one who asks our judicial aid in collecting its debt from petitioner and, as the Republic of China case says, “fair dealing” requires recognition of any counterclaim or setoff that eliminates or reduces that claim.2 It is *773that principle, not the Bernstein3 exception, which should govern here. Otherwise, the Court becomes a mere errand boy for the Executive Branch which may choose to pick some people’s chestnuts from the fire, but not others’.4

 A historic instance of the resolution of such a conflict ultimately enforced by judicial sanctions is United States v. Pink, 315 U. S. 203.

 Cf. Pons v. Republic of Cuba, 111 U. S. App. D. C. 141, 294 F. 2d 925.

 Bernstein v. N. V. Nederlandsche-Amerikaansche, 210 F. 2d 375.

 “The history of the doctrine indicates that its function is not to effect unquestioning judicial deference to the Executive, but to achieve a result under which diplomatic rather than judicial channels are used in the disposition of controversies between sovereigns.” Delson, The Act of State Doctrine — Judicial Deference or Abstention? 66 Am. J. Int’l L. 83, 84 (1972).