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United States Court of Appeals for the District of Columbia Circuit
October 1, 2001, Argued ; November 16, 2001, Decided
No. 00-7157, Consolidated with, 00-7263
[*1103] [**2] TATEL, Circuit Judge: McKesson HBOC, Inc., an American corporation, owns a minority interest in an Iranian dairy. Following Iran's 1979 Islamic Revolution, the dairy cut off the flow of capital and other material to McKesson, froze out McKesson's board members, and stopped paying McKesson's dividends. After years of litigation, including two appeals to this court, the district court granted summary judgment for McKesson, holding the Islamic Republic of Iran liable for expropriating McKesson's equity in the dairy. Following a bench trial on the value of McKesson's holdings, the district court ordered Iran to pay over $ 20 million in compensation for, among other things, expropriated equity and withheld dividends. In this appeal, Iran argues that federal courts lack jurisdiction over it, that material issues exist as to its liability for expropriation, and that the district court erred in valuing McKesson's assets. McKesson cross-appeals, challenging the district court's assessment of simple rather than compound interest. We affirm in most respects. Jurisdiction exists pursuant to the Foreign Sovereign Immunities Act's exception for commercial acts of a foreign sovereign that cause [**3] direct effects in the United States. The district court's careful consideration of the valuation evidence easily survives clear-error review. And although the district court may have erred in finding that international law precludes awards of compound interest, it acted well within its broad discretion to grant [*1104] simple interest. But because we find that genuine issues of material fact exist as to whether Iranian corporate law excused the dairy's withholding of dividends, we reverse the district court's grant of summary judgment on the issue of Iran's liability for expropriating McKesson's equity and remand that portion of the case for trial.
For many years prior to Iran's 1979 Islamic Revolution, McKesson HBOC, Inc., appellee and cross-appellant, contributed capital and personnel to Sherkat Sahami Labaniat Pasteurize Pak, an Iranian dairy ("Pak Dairy"). McKesson's representatives made up a majority of Pak Dairy's board of directors.
Full case includes Shepard's, Headnotes, Legal Analytics from Lex Machina, and more.
271 F.3d 1101 *; 2001 U.S. App. LEXIS 24555 **; 348 U.S. App. D.C. 160
MCKESSON HBOC, INC., ET AL., APPELLEES/CROSS-APPELLANTS v. ISLAMIC REPUBLIC OF IRAN, APPELLANT/CROSS-APPELLEE
Subsequent History: Writ of certiorari denied, Motion granted by McKesson HBOC, Inc. v. Iran, 537 U.S. 941, 154 L. Ed. 2d 248, 123 S. Ct. 341, 2002 U.S. LEXIS 7360 (2002)
Writ of certiorari denied, Motion granted by Iran v. McKesson HBOC, Inc., 537 U.S. 941, 154 L. Ed. 2d 248, 123 S. Ct. 341, 2002 U.S. LEXIS 7359 (2002)Vacated by, Remanded by McKesson HBOC, Inc. v. Islamic Republic of Iran, 355 U.S. App. D.C. 152, 320 F.3d 280, 2003 U.S. App. LEXIS 4093 (2003)
Prior History: Appeals from the United States District Court for the District of Columbia. (No. 82cv00220).
McKesson Corp. v. Islamic Republic of Iran, 1997 U.S. Dist. LEXIS 8903 (D.D.C. June 23, 1997)
McKesson Corp. v. Islamic Republic of Iran, 116 F. Supp. 2d 13, 2000 U.S. Dist. LEXIS 13232 (D.D.C. 2000)
McKesson Corp. v. Islamic Republic of Iran, 116 F. Supp. 2d 13, 2000 U.S. Dist. LEXIS 14347 (D.D.C. 2000)
McKesson Corp. v. Islamic Republic of Iran, 116 F. Supp. 2d 13, 2000 U.S. Dist. LEXIS 14347 (D.D.C., 2000)McKesson Corp. v. Islamic Republic of Iran, 1997 U.S. Dist. LEXIS 8903 (D.D.C., June 23, 1997)McKesson Corp. v. Islamic Republic of Iran, 116 F. Supp. 2d 13, 2000 U.S. Dist. LEXIS 13232 (D.D.C., 2000)
Disposition: Affirmed in part. Reversed and remanded in part.
Dairy, district court, dividends, compound interest, summary judgment, expropriated, Treaty, valuation, Tribunal, international law, argues, simple interest, awards, direct effect, shareholders, grant summary judgment, decisions, genuine, survive, rights, challenges, telex, court's jurisdiction, commercial activity, exchange rate, federal court, material fact, Immunities, settlement, Sovereign
Civil Procedure, Appeals, Standards of Review, De Novo Review, International Law, Foreign & International Immunity, Sovereign Immunity, General Overview, Foreign Sovereign Immunities Act, Exceptions, Jurisdiction, Commercial Activities, Direct Effects, Judgments, Preclusion of Judgments, Law of the Case, International Trade Law, Dispute Resolution, Summary Judgment, Opposing Materials, Appellate Review, Standards of Review, Motions for Summary Judgment, Entitlement as Matter of Law, Genuine Disputes, Materiality of Facts, Constitutional Law, Supremacy Clause, Supreme Law of the Land, Treaty Interpretation, Conflict of Law, Evidentiary Considerations, Burdens of Proof, Trials, Bench Trials, Clearly Erroneous Review, Reviewability of Lower Court Decisions, Reversible Errors, Sources of International Law, Tribunals, Business & Corporate Compliance, Enforcement & Execution, Foreign Judgments