McKesson Corp. v. Islamic Republic of Iran

McKesson Corp. v. Islamic Republic of Iran

Opinion

 [*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.

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, 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.

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