Why Do Treaties Create Private Rights of Action?

The Supreme Court’s Medellin decision has generated lots of academic attention (Julian and I, for example, are both participating in a joint ASIL-ABA Task Force on Treaties developed to address the future status of treaties in US law, which I’m sure will generate blog posts from one or both of us in the months ahead). This past week also saw the DC Circuit rely on Medellin explicitly in an August 26 opinion in the long-running case of McKesson v. Iran (this was not the first Appellate decision re treaties post-Medellin though, the Fifth Circuit, for example, took up that topic back in June).

McKesson was returning for its 5th visit to the DC Circuit, still plugging away at a claim originally made in 1982 against the Iranian government for taking a U.S. company’s holdings in an Iranian dairy interest post-Revolution.  McKesson has long argued that the 1955 Treaty of Amity prohibitions on expropriation without just compensation entitle it to relief in U.S. courts.  Ignoring the irony of a Treaty of Amity with Iran today, the D.C. Circuit disagreed; holding that even though the treaty was self-executing, and thus part of the supreme Law of the land, its provisions failed to overcome a standing presumption against private rights of action:

To determine whether a treaty creates a cause of action, we look to its text.  See United States v. Alvarez-Machain, 504 U.S. 655, 663 (1992) (“In construing a treaty, as in construing a statute, we first look to its terms to determine its meaning.”).  The Treaty of Amity, like other treaties of its kind, is self-executing. See Medellín v. Texas, 128 S. Ct. 1346, 1365–66 (2008); Blanco v. United States, 775 F.2d 53, 60 (2d Cir. 1985) (Friendly, J.); CURTIS A. BRADLEY & JACK L.GOLDSMITH, FOREIGN RELATIONS LAW 379 (2d ed. 2006)  (“[C]ourts commonly assume that certain types of bilateral treaties, such as . . . Friendship, Commerce, and Navigation (FCN) treaties, are self-executing.”). As such, it “operates of itself without the aid of any legislative provision,” Foster v. Neilson, 27 U.S. (2 Pet.) 253, 314 (1829) (Marshall, C.J.), and its text is “the supreme Law of the Land,” U.S. CONST. art. VI, cl. 2, on par with that of a statute, Whitney v. Robertson, 124 U.S. 190, 194 (1888). That the Treaty of Amity is self-executing begins but does not end our search for a treaty-based cause of action, because “[w]hether a treaty is self-executing is a question distinct from whether the treaty creates private rights or remedies.” RESTATEMENT (THIRD) OF FOREIGN RELATIONS LAW OF THE UNITED STATES § 111 cmt. h (1986) [hereinafter RESTATEMENT]; accord Renkel v. United States, 456 F.3d 640, 643 n.3 (6th Cir. 2006); United States v. Li, 206 F.3d 56, 67 (1st Cir. 2000) (en banc) (Selya & Boudin, JJ., concurring). “Even when treaties are self-executing in the sense that they create federal law, the background presumption is that ‘[i]nternational agreements, even those directly benefiting private persons, generally do not create private rights or provide for a private cause of action in domestic courts.’ ” Medellín, 128 S. Ct. at 1357 n.3 (quoting RESTATEMENT, supra, § 907 cmt. a).

We find nothing in the Treaty of Amity that overcomes this presumption. To be sure, article IV(2) of the Treaty of Amity directly benefits McKesson by declaring that “property shall not be taken except for a public purpose, nor shall it be taken without the prompt payment of just compensation.” McKesson contends that the Treaty of Amity creates a right (“property shall not be taken”) and provides a remedy (“just compensation”), and that together these make a cause of action. Not so. The Treaty of Amity tells us what McKesson will receive — money — but leaves open the critical question of how McKesson is to secure its due. For a federal court trying to decide whether to interject itself into international affairs, the Treaty of Amity’s silence on this point makes all the difference. A treaty that “only set[s] forth substantive rules of conduct and state[s] that compensation shall be paid for certain wrongs . . . do[es] not create private rights of action for foreign corporations to recover compensation from foreign states in United States courts.” Argentine Republic v. Amerada Hess Shipping Corp., 488 U.S. 428, 442 (1989).  And without a cause of action, McKesson cannot invoke federal judicial authority to pursue its desired remedy. . .

The Court invoked the Warsaw Convention’s provisions as a counter-example, noting how they specify judicial enforcement and particular courts to do that enforcing.  As a result of the case, McKesson now has to argue it gets a right of action under customary international law using Sosa or via Iranian law, not to mention the possibilty of losing it all under the Act of State Doctrine.

I’m not terribly surprised by the case’s outcome, especially given DOJ’s amicus position favoring Iran (not something you see everyday).  But, it does highlight an interesting question about why treaties provide private causes of action in the first place.  Do they simply act as an alternative means to ensure U.S. treaty compliance akin to theories of private attorneys general that underpin statutory private rights of action?  In other words, is the point of a private right of action to allow an individual to bring a claim that would otherwise, without judicial relief, result in claims of U.S. treaty breach?  Or, do private rights of action reflect a different model, one where the point isn’t U.S. treaty compliance per se, but the fulfilment of agreed upon dispute settlement processes that allow courts to play a role previously left to mechanisms like diplomatic protection or even gunboat diplomacy?  If it’s the first model, than the D.C. Circuit clearly came out with the right result–the U.S. courts were being asked to opine on Iran‘s violation of its treaty commitments; nothing the court could do (or not do) would appear to put the United States at risk of breaching its treaty obligations to Iran.  If, however, the point of private rights of action is judicialization of otherwise diplomatic disputes–letting the Court do the job that the State Dept. would otherwise have–then McKesson might have a better claim.  I’m inclined to think that the first model is the correct one.  After all, treaty compliance concerns motivated the inclusion of all treaties (or, today, at least some treaties) within the Supremacy Clause, so wouldn’t a similar rationale govern the question of individual enforcement? I’d be interested to hear, however, if others prefer the second model, or have a third vision to offer?