W.S. Kirkpatrick & Co. v. Environmental Tectonics Corp.

Facts:
In 1981, Harry Carpenter, a U.S. citizen and chairman of the board and chief executive officer of W. S.
Kirkpatrick & Co., Inc. (Kirkpatrick), learned that the Republic of Nigeria was interested in contracting for
the construction of an aeromedical center at Kaduna Air Force Base in Nigeria. He made arrangements
with Benson Tunde Akindale, a Nigerian citizen, whereby Akindale would help secure the contract for
Kirkpatrick by paying bribes to Nigerian officials. In accordance with the plan, the contract was awarded to
a wholly owned subsidiary of Kirkpatrick; Kirkpatrick paid the agreed-upon funds to Akindale, which were
dispersed as bribes to Nigerian officials. Nigerian law prohibits both the payment and the receipt of such
bribes. Environmental Tectonics Corporation, International (Environmental), an unsuccessful bidder for
the Kaduna contract, learned of the bribes and informed the U.S. embassy in Lagos, Nigeria. In a criminal
action, Carpenter and Kirkpatrick pleaded guilty to violating the U.S. Foreign Corrupt Practices Act.
Environmental then brought this civil action against Carpenter, Kirkpatrick, and Akindale seeking
damages under federal and state racketeering and antitrust laws. The district court held that the action
was barred by the act of state doctrine and dismissed the complaint. The Court of Appeals reversed. The
defendants appealed to the U.S. Supreme Court.
Issue:
WON the act of state doctrine bar the plaintiffs civil suit against the defendants?
Ruling:
The act of state doctrine does not apply.

Act of state issues arise only when a court must decidethat is, when that outcome of the case turns
uponthe effect of official action by a foreign sovereign. When that question is not in the case, neither is
the act of state doctrine. That is the situation here. Regardless of what the courts factual findings may
suggest as to the legality of the Nigerian contract, its legality is simply not a question to be decided in the
present suit, and there is thus no occasion to apply the rule of decision that the act of state doctrine
requires.
The short of the matter is this: Courts in the United States have the power, and ordinarily the obligation, to
decide cases and controversies properly presented to them. The act of state doctrine does not establish
an exception for cases and controversies that may embarrass foreign governments, but merely requires
that, in the process of deciding, the acts of foreign sovereigns taken within their own jurisdictions shall be
deemed valid. That doctrine has no application to the present case because the validity of no foreign
sovereign act is at issue.
ISSUE: Does the act of state doctrine arise in this case? In other words, does the outcome of the case
turn on whether the court gives legal effect to the act of the foreign government in its own territory?
The lower court says that it does for Tectonics to win, it would have to prove that the Nigerian
government took a bribe, and, because of that bribe, awarded the job to Kirkpatrick
o

Remember: it does not matter that the Nigerian government is not a party to the suit, because
the act of state doctrine may come into play where none of the parties is a state so long as the
outcome of the case depends on whether a court gives legal effect to the act of a state

But the Supreme Court says that the act of state doctrine does NOT apply here
o

Act of state issues only arise when a court must decide that is, when the outcome of the
case turns upon the effect of official action by a foreign sovereign. When that question is

not in the case, neither is the act of state doctrine. That is the situation here. Regardless if
what the courts factual findings may suggest as to the legality of the Nigerian contract, its
legality is simply not a question to be decided in the present suit.
o

The determination as to whether the bribe took place and influenced the outcome of the
contract does not require the court to decide whether or not to give legal effect to an official
act of Nigeria in is own territory.

W.S. Kirkpatrick and Co. v. Environmental Tectonics Corp., International

493 U.S. 400 (1990)
Kirkpatrick and ETC were both trying to win a construction contract in Nigeria. ETC won.
o

ETC won by bribing Nigerian officials.

Kirkpatrick sued ETC in US Federal Court for damages.

o

Bribery is technically illegal in Nigeria.

ETC claimed that since the contract was an official act of the country of Nigeria, suits in US
Courts were barred by the Act of State Doctrine.

The Trial Court dismissed the case. Kirkpatrick appealed.

o

The Trial Court found that the suit was barred by the Act of State Doctrine.

The Court found that a judicial inquiry into the motivation of a sovereign act might result
in embarrassment to the sovereign, or constitute interference with the conduct of US
foreign policy.

The Court found that allowing Kirkpatrick to make a bribery claim would require a finding that
foreign officials were criminals, and that might embarrass the Executive Branch in its conduct
of foreign relations.

The Appellate Court reversed. ETC appealed.

The US Supreme Court affirmed and allowed the case to proceed.

o

The US Supreme Court found that the Act of State Doctrine did not apply because nothing in
the suit required a court to declare invalid the official act of a foreign sovereign.

"The Act of State Doctrine does not establish an exception for cases and controversies
that may embarrass foreign governments, but merely requires that, in the process of
deciding, the acts of foreign sovereigns taken within their own jurisdiction shall deemed
valid."