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W.S. Kirkpatrick v. Environmental Tectonics Corp.

    Brief Fact Summary
    W.S. Kirkpatrick Co. (Defendant) argued that the act-of-state doctrine prohibited an action based on alleged acceptance by foreign officials of bribes it had offered.

    Synopsis of Rule of Law
    The act-of-state doctrine does not prohibit an action against a U.S. concern based on acceptance of bribes extended by foreign officials.

    Facts
    To secure a Nigerian government contract, W.S. Kirkpatrick Co. (Defendant) offered certain Nigerian officials bribes, which were accepted.  Defendant secured the contract.  A federal (U.S.) investigation followed, and Defendant pleaded guilty to violations of the Federal Foreign Corrupt Practices Act.  Environmental Tectonics Corp. (Plaintiff), an unsuccessful bidder for the Nigerian contract, brought an action against Kirkpatrick (Defendant) seeking damages under the federal Racketeer Influenced and Corrupt Organizations Act (R.I.C.O.).  The district court dismissed, holding the action barred by the act-of-state doctrine.  The Third Circuit reversed.  The Supreme Court granted review.

    Issue

    Does the act-of-state doctrine prohibit an action against a U.S. concern based on acceptance of bribes extended by foreign officials?

    Held
    (Scalia, J.)  No.  The act-of-state doctrine does not prohibit an action against a U.S. concern based on acceptance of bribes extended by foreign officials.  The doctrine is only considered when a court, in reaching its decision, would have to declare void the act of a foreign government within its own territory.  In an action against a domestic corporation or person based on alleged bribes of foreign officials, it is the act of the domestic entity that is at issue, not the motivation of the foreign official.

    Discussion
    The act-of-state doctrine was originally considered a part of international law.  In recent years, courts in the United States have come to focus on it more as a component of separation of powers.  The judiciary has come to recognize that it is for the political branches of government to conduct foreign policy, and excessive inquiry by the judiciary into the acts of foreign governments would interfere with this.


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