Brief Fact Summary. The U.S. (P) claim was based on the fact that funds deposited in a U.S. bank by a Russian corporation that had been nationalized by the Soviet government was due to it.
Synopsis of Rule of Law. The states cannot interfere in the complete powers which the national government has in the conduct of international affairs.
Before to the 1918 nationalization and liquidation by the Soviet government, a Russian corporation had deposited money in Belmont (D), a private bank in New York City. In 1993, the Soviet Union and the United States (P) agreed to a final settlement of claims and counterclaims. The agreement of the Soviet Union was to take no steps to enforce claims against American nationals and assigned and released all such claims to the U.S. (P). The court however held that the situs of the bank deposit was within the state of New York and was not an intangible property right within soviet territory and that it would be contrary to the public policy of the State of New York to recognize or enforce the nationality decree when the U.S. (P) sought to recover the money. The U.S. (P) appealed to the Supreme Court which granted certiorari.
Issue. Does the national government have complete power in the conduct of international affairs?
Held. (Sutherland, J.). Yes. The states cannot interfere in the complete powers which the national government has in the conduct of international affairs. The U.S. (P) recognized the Soviet government coincidentally with the assignment of all claims. The President does not need the consent of the Senate to conduct foreign relations. In respect of foreign relations generally, state lines disappear. Reversed and remanded.
Discussion. Points of Law - for Law School Success
What another country has done in the way of taking over property of its nationals, and especially of its corporations, is not a matter for judicial consideration here. View Full Point of Law
The recognition of the Soviet Union and the release of all claims were interdependent and this was noted by the Court. Thus it was purely in the realm of foreign policy to make this agreement. States cannot therefore interfere in the conduct of foreign relations.