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Law School Case Brief

Dominican Republic v. AES Corp. - 466 F. Supp. 2d 680 (E.D. Va. 2006)

Rule:

Foreign sovereigns have standing to bring civil suit in the federal courts of the United States as long as they are recognized by the United States and at peace with the United States. Foreign sovereigns may bring civil claims in the same way as domestic corporations or individuals. If the United States denied this privilege, it would manifest a want of comity and friendly feeling. Given that foreign sovereigns may sue as an individual or corporation might sue, they must meet traditional standing requirements. In order to bring suit in federal court in the United States of America, litigants must have a sufficient personal interest in the outcome of the litigation in order to establish standing pursuant to U.S. Const. art. III. Standing to bring an action is a prerequisite to federal jurisdiction, for without it there is no case or controversy between the parties. A foreign sovereign plaintiff must meet three elements in order to establish standing in United States federal court: (1) that they suffered an injury in fact that is (a) concrete and particularized and (b) actual or imminent, not conjectural or hypothetical; (2) that the injury is fairly traceable to the challenged action of the defendant; and (3) that the injury is likely to be redressed by a favorable decision by the court.

Facts:

The Government of the Dominican Republic filed a complaint against AES Corporation in the Eastern District of Virginia, alleging that the corporation formed a civil conspiracy to carry out several illegal acts in order to dispose of hazardous coal ash, which resulted to the pollution of Manzanillo and Samana Bay. The Dominican Republic sought compensatory and punitive damages for environmental damages (including removing the ash, restoring local ecology, and monitoring cleanup), healthcare costs for injured residents, and economic damages for the loss of tourism. It also asserted violation of the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C.S. §§ 1961-1968. AES filed a motion to dismiss.

Issue:

  1. Did the Dominican Republic have the standing to bring the suit in the United States?
  2. Should defendants’ motion to dismiss be granted?

Answer:

1) Yes. 2) Yes, as to RICO and product liability claims.

Conclusion:

The federal district court held that the Dominican Republic had standing to bring suit in the United States because the United States recognized the Dominican Republic and was not at war with the Dominican Republic. However, the Dominican Republic did not have standing to assert claims for a decline in tourism or for the costs of caring for injured residents. The court granted defendants' motion to dismiss the RICO claims because the facts alleged were insufficient to establish a pattern of racketeering activity and, alternatively, because the predicate acts of bribery and a threat of murder did not directly cause the alleged injury. The court found that the nuisance, civil conspiracy, and aiding and abetting claims were cognizable under the law of the Dominican Republic and that the law of the Dominican Republic applied to those claims. The court dismissed the product liability claim because the parties agreed that the coal ash was not a product. The court found that the act of state doctrine did not bar the Dominican Republic's claims because a public act was not at issue.

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