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United States Court of Appeals for the District of Columbia Circuit
October 14, 2011, Argued; February 28, 2012, Decided
[*1070] [**5] 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 [***2] 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.
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, 284 U.S. App. D.C. 333 (D.C. Cir. 1990) ("McKesson I"); McKesson Corp v. Islamic Republic of Iran, 52 F.3d 346, 347-49, 311 U.S. App. D.C. 197 (D.C. Cir. 1995) ("McKesson II"); McKesson HBOC, Inc. v. Islamic Republic of Iran, 271 F.3d 1101, 1104-05, 348 U.S. App. D.C. 160 (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. [***3] 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 Iran-U.S. Cl. Trib. Rep. 228, 1986 WL 424309 (1986) [***4] ("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 amounts awarded out of a security account established at the Hague.
Full case includes Shepard's, Headnotes, Legal Analytics from Lex Machina, and more.
672 F.3d 1066 *; 400 U.S. App. D.C. 1 **; 2012 U.S. App. LEXIS 3940 ***; 2012 WL 615831
MCKESSON CORPORATION, ET AL., APPELLEES v. ISLAMIC REPUBLIC OF IRAN, APPELLANT, FINANCIAL ORGANIZATION FOR THE EXPANSION OF OWNERSHIP OF PRODUCTIVE UNITS, ET AL., APPELLEES
Subsequent History: Rehearing denied by McKesson Corp. v. Islamic Republic of Iran, 2012 U.S. App. LEXIS 17415 (D.C. Cir., Aug. 17, 2012)
US Supreme Court certiorari denied by Islamic Republic of Iran v. McKesson Corp., 2013 U.S. LEXIS 2291 (U.S., Mar. 18, 2013)
Motion granted by, in part, Motion denied by, in part, Costs and fees proceeding at, Motion denied by, As moot, Judgment entered by McKesson Corp. v. Islamic Republic of Iran, 2013 U.S. Dist. LEXIS 43266 (D.D.C., Mar. 27, 2013)
Prior History: [***1] Appeal from the United States District Court for the District of Columbia. (No. 1:82-cv-00220).
McKesson Corp. v. Islamic Republic of Iran, 752 F. Supp. 2d 12, 2010 U.S. Dist. LEXIS 123918 (D.D.C., 2010)McKesson Corp. v. Islamic Republic of Iran, 2009 U.S. Dist. LEXIS 109368 (D.D.C., Nov. 20, 2009)
Treaty, cause of action, district court, expropriation, international law, dividends, customary, act of state doctrine, courts, Tribunal, compound interest, Dairy, damages, private right of action, commercial activity, simple interest, sovereign, contracting parties, board of directors, foreign sovereign, foreign state, withheld, federal court, calculation, principles, territory, currency, parties, rights, cases
Business & Corporate Compliance, Dispute Resolution, Conflict of Law, Jurisdiction, International Law, Sovereign Immunity, Foreign Sovereign Immunities Act, Construction & Interpretation, Remedies, Damages, Act of State Doctrine, Patent Law, Preclusion, Law of the Case, Foreign & International Immunity, General Overview, Authority to Regulate, Exceptions, Commercial Activities, Direct Effects, Jurisdiction, Choice of Law, Governments, Courts, Authority to Adjudicate, Expropriation, Treaty Interpretation, Particular Treaties, Civil Procedure, Appeals, Reviewability of Lower Court Decisions, Judgments, Relief From Judgments, Standards of Review, De Novo Review, Damages, Compensatory Damages