The doctrine of sovereign immunity is similar to the act of state doctrine in that it also represents the need to respect the sovereignty of foreign states. The two doctrines differ, however, in significant respects. The law of sovereign immunity goes to the jurisdiction of the court. The act of state doctrine is not jurisdictional. Rather, it is a prudential doctrine designed to avoid judicial action in sensitive areas.
The members of the International Association of Machinists and Aerospace Workers (IAM), plaintiffs, were disturbed by the high price of oil and petroleum-derived products in the United States. They believed the actions of the defendant Organization of the Petroleum Exporting Countries, popularly known as OPEC, were the cause of this burden on the American public. Accordingly, plaintiffs sued defendants and its member nations in December of 1978, alleging that their price-setting activities violated United States anti-trust laws. Plaintiffs sought injunctive relief and damages. The district court entered a final judgment in favor of the defendants, holding that it lacked jurisdiction and that plaintiffs had no valid anti-trust claim.
Did the district court err in its decision to enter a final judgment in favor of the defendants?
The court affirmed the judgment of the district court. However, it did so on the alternative ground that, under the act of state doctrine, exercise of federal court jurisdiction was improper. The act of state doctrine declares that a United States court will not adjudicate a politically sensitive dispute which would require the court to judge the legality of the sovereign act of a foreign state. The Court held that courts should not enter at the will of litigants into a delicate area of foreign policy which the executive and legislative branches have chosen to approach with restraint.