Venezuela pushes back on attempted lawsuit by U.S. company at Supreme Court

By Marissa Page, Medill News Service  |  Nov. 3, 2016 at 11:54 AM
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WASHINGTON -- The Supreme Court heard arguments Wednesday in a case that could make it easier to sue foreign governments in U.S. courts, an outcome that a Justice Department lawyer said would damage foreign relations.

Oklahoma oil company Helmerich & Payne International Drilling Co. went to court against the Venezuelan government in 2011, alleging that it seized ownership of company rigs and other assets to use in the state-owned drilling business. H&P had stopped drilling because the state-owned operation had fallen $100 million behind in payments to the company. Hugo Chavez, then the president of Venezuela, said the seizure was necessary to put the rigs back in operation.

H&P argued that by expropriating the property of a U.S. company, Venezuela lost the immunity usually granted to foreign governments from the jurisdiction of U.S. courts under the Foreign Sovereign Immunities Act. The act specifies a few exceptions to the immunity rule, among them situations "in which rights in property taken in violation of international law are in issue."

A federal district judge agreed that H&P could file suit against Venezuela, as did a federal appeals court. Venezuela petitioned the Supreme Court last year to overturn the lower courts' rulings, saying the country was immune from legal action.

Catherine Carroll, representing H&P, emphasized the historical precedent for future cases involving U.S. diplomatic relations.

"There has been a problem of foreign sovereigns taking [U.S.] property, for discriminatory reasons or without paying for it, [and] using that property to gain advantage in the marketplace," Carroll said. "And we want the courthouse doors to be open to that."

Justice Department lawyer Elaine Goldenberg told the justices that upholding the lower courts' ruling could be a "real affront to a foreign sovereign if another court sits in judgment of something that foreign sovereign has done."

Chief Justice John Roberts questioned why a ruling for H&P would make a difference, since a judge would sit in judgment "one way or the other," either at the beginning or further along in the legal process.

Several justices noted the sensitivity of suing foreign governments.

Catherine Stetson, an attorney representing Venezuela, urged the justices to limit their consideration to the U.S. relationship with Venezuela.

"[This] isn't just about jurisdiction over a class of cases or a type of case," she said. "It's jurisdiction over this sovereign standing in front of the court."

She said the standards must be higher for determining a violation of international law than the "exceptionally low bar" set by the appellate court.

A ruling is expected by the end of June.

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