After spending more than a decade and almost $300 million, the United Nations–backed Khmer Rouge tribunal convicted three men in April 2017 for the Cambodian genocide of the 1970s.
Between 1975 and 1979, the Khmer Rouge regime killed an estimated 2.2 to 2.8 million people.
The Khmer Rouge—and the civil war it birthed—also saw forced displacement, malnutrition and starvation, serious lasting disabilities from landmines and other wartime weapons, and the decimation of the education system.
Amidst this chaos, looters descended upon Cambodia’s ancient Hindu and Buddhist temples.
Before the start of the civil war in 1970, Cambodia’s temples had remained largely intact.
Yet during the war, the Cambodian army, the Khmer Rouge, various paramilitary factions, and rogue soldiers all took part in deconstructing the ancient temples and trafficking their prizes through organized black-market trade routes.
Often local villagers were “invited” to loot temples for the benefit and under the watchful eye of these armed groups.
One casualty of this sustained cultural theft—and the center of a recent U.S. federal district court case—is the Duryodhana, a statue allegedly removed from the Prasat Chen Temple at Koh Ker in the 1970s.
When the Duryodhana surfaced in the United States in 2010 at Sotheby’s auction house, the U.S. government initiated civil forfeiture actions.
The U.S. government premised these civil forfeiture actions on Cambodia’s patrimony laws—laws that nationalize ownership of cultural property found within a nation’s borders.
In particular, the U.S. government had to rely on Cambodia’s colonial patrimony laws because the original theft had occurred in the 1970s, prior to the enactment of Cambodia’s modern patrimony laws.
In response, Sotheby’s asserted a defense unique to foreign-patrimony-law litigation: Because Cambodia never actively enforced these colonial patrimony laws, neither should the United States.
Although the case eventually settled, it raised important questions in the struggle to protect looted cultural property.
Does this “inactivity” claim have merit? Should context play a role in deciding the legitimacy of inactivity defenses? More pointedly, should a court consider an inactivity defense if that inactivity transpired during a bloody, decade-long civil war? These queries are made all the more difficult by the rarity of precedent, a natural result of the rarity of foreign-patrimony-law cases in general.
This Note argues that courts should consider context in making inactivity determinations. Part I begins by introducing existing U.S.-based mechanisms for protecting stolen cultural property. It focuses on the McClain doctrine, which validated enforcement of foreign patrimony laws in U.S. courts via the National Stolen Property Act. This Part then proceeds with a fact-intensive discussion of what constitutes an enforceable foreign patrimony law. Part II argues that the inactivity defense as currently wielded fails to consider context and thus threatens to undermine the purpose of the McClain doctrine. Finally, Part III proposes a solution by way of procedural intervention: Inactivity should be treated as an affirmative defense that places a factual burden on the claimant and, if met, shifts a legal burden that incorporates context to the government.
I. Foreign Patrimony Laws in the United States
Foreign patrimony laws nationalize ownership of cultural property found within a nation’s borders and prohibit export or private ownership of those items.
These laws are enforceable in U.S. courts under the McClain doctrine.
Given the limited protections for cultural property in the United States, the McClain doctrine theoretically serves as an important bulwark. However, underdevelopment of the McClain doctrine has given rise to questions such as those surrounding the inactivity defense. In order to address these questions, it is first necessary to consider the history and underlying values of the McClain doctrine.
To that effect, section I.A describes how patrimony laws act as necessary protections for cultural property in lieu of insufficient U.S. alternatives. Section I.B describes how patrimony laws walk the delicate line between two conflicting U.S. values: protecting foreign ownership and upholding public policy prohibiting the enforcement of foreign regulation. Section I.C explains how these twin concerns birthed the McClain doctrine.
A. Patrimony Laws as Necessary Cultural Property Protections in the United States
Cultural property finds protection in a patchwork of legal mechanisms in the United States, including the Convention on Cultural Property Implementation Act (CPIA)
as well as the combination of the National Stolen Property Act (NSPA)
and various patrimony laws. The limited utility of the allegedly preeminent CPIA underscores the continuing importance of patrimony laws as a U.S. enforcement mechanism. The CPIA is the United States’ implementing legislation for the 1970 UNESCO Convention on the Means of Prohibiting and Preventing the Illicit Import, Export and Transfer of Ownership on Cultural Property.
The international community convened the UNESCO Convention in response to rampant looting following World War II—looting that systematically stripped countries of their cultural heritage, deprived individuals of their history and property, and prevented researchers from examining artifacts in their original contexts.
By 1970, protection was already long overdue.
The UNESCO Convention holds that “[t]he import, export or transfer of ownership of cultural property effected contrary to the provisions adopted under this convention by the States Parties thereto, shall be illicit.”
It defines cultural property as “property which, on religious or secular grounds, is specifically designated by each State as being of importance for archaeology, prehistory, history, literature, art or science” and that belongs to an enumerated list of categories including: rare fauna, flora, and paleontology; scientific, technological, and social history; archaeology and antiquities; ethnology; and art of all mediums.
The United States ratified the UNESCO Convention in 1972.
Significantly, it entered a reservation refusing to enforce foreign export restrictions except by agreement or in an emergency.
This reservation reflects the United States’ long-held position against enforcement of foreign export restrictions.
Finally, more than a decade after signing the UNESCO Convention, the United States passed implementing legislation in 1982: the CPIA.
Due in part to the ferocity of the legislative debate that birthed it, the CPIA represents an “elaborate compromise” that ultimately has limited utility.
It introduced a mechanism for entering into bilateral treaties with other nations, whereby the United States can impose import restrictions on narrow categories of a foreign nation’s property upon request by that nation.
Yet so narrow are the criteria that only seventeen nations today have such bilateral treaties with the United States.
Additionally, even if a foreign state clears the preliminary hurdles to treat with the United States, the agreements are not retrospective: Any object stolen prior to the implementation of the treaty remains unprotected.
The treaties also expire after five years and can be renewed only if the same criteria are again found satisfied upon reexamination.
In contrast to CPIA treaties, patrimony laws allow nations to assert broader protections over their cultural property in U.S. courts.
Patrimony laws also allow nations greater control over that protection.
They protect categories of cultural property as broad or narrow as a nation desires, so long as the language is clear and unambiguous and the property is found within the nation’s borders.
They do not require the foreign nation to show that its cultural heritage is “in jeopardy” of looting.
They also do not require the nation to be involved in — or even aware of — the international playing field.
They can be enforced against any property discovered after the patrimony law’s implementation, sometimes stretching far into the past rather than only the oft-brief and oft-recent lifespan of a CPIA treaty.
And they never expire.
When paired with U.S. judicial enforcement mechanisms, patrimony laws provide dual methods of recovery for foreign nations. First, as discussed further in subsection I.C.3, nations can bring individual civil actions to recover stolen property.
These actions can take various forms,
but all are premised on the theory that the relevant patrimony law vested true ownership in the nation. Second, also as discussed further in subsection I.C.3, the U.S. government can bring a civil forfeiture action and transfer the forfeited property to the foreign nation.
The United States has three main statutory options for civil forfeiture actions premised on patrimony laws. Each option requires one additional predicate vehicle: the NSPA.
First, 18 U.S.C. § 981(a)(1)(C) subjects to civil forfeiture any property that “constitutes or is derived from proceeds traceable to a violation of . . . any offense constituting ‘specified unlawful activity.’”
Second, 18 U.S.C. § 545 subjects to civil forfeiture any property “fraudulently or knowingly import[ed] or [brought] into the United States . . . contrary to law.”
And third, 19 U.S.C. § 1595a(c) subjects to civil forfeiture any merchandise “introduced or attempted to be introduced into the United States contrary to law.”
In each of these three provisions, NSPA violations fulfill the “specified unlawful activity” and “contrary to law” language, as explained further in the following subsection.
B. The National Stolen Property Act: Ownership Versus Regulation
Originally enacted in 1934 as an expansion of the National Motor Vehicle Act, the NSPA extended protection to forms of property beyond cars.
It provides for a fine or maximum imprisonment of ten years, or both, if three elements are proven: “ (1) the transportation in interstate or foreign commerce of property, (2) valued at $5,000 or more, (3) with knowledge that the property was stolen, converted, or taken by fraud.”
A defendant may defend herself against an NSPA charge by claiming she was ignorant of a certain fact that made her conduct criminal—for example, that she did not know that the objects were indeed stolen. But a defendant cannot defend herself by claiming ignorance of the law itself, whether of the NSPA or of any underlying law.
The NSPA can be used to enforce certain foreign claims that would not otherwise be enforceable in federal courts. In general, the courts of one nation do not enforce either the criminal or regulatory laws of another nation. The inapplicability of foreign criminal law reflects the tradition, as articulated by Chief Justice Marshall, that “[t]he Courts of no country execute the penal laws of another.”
This tradition, in turn, reflects the policy against judicial interference with international relations.
Although the NSPA does not allow enforcement of the criminal laws of another country, it does expand federal courts’ jurisdiction. Consider, for example, United States v. Portrait of Wally.
This case involved a painting allegedly stolen by Nazis during the German occupation of Austria in 1938.
The U.S. government sued the Leopold Museum for recovery under the NSPA, claiming that the painting had been imported into the United States as stolen property and was thus subject to civil forfeiture.
The theft itself did not trigger the NSPA and thus it cannot be said that the United States was able to enforce foreign criminal law; rather, the act of importing stolen property triggered the NSPA.
The inapplicability of foreign regulatory law reflects a similar policy as does the inapplicability of foreign criminal law but lacks the benefit of the NSPA’s jurisdictional expansion. For the purpose of this Note, “foreign regulatory law” primarily refers to foreign export restrictions.
Export restrictions have long been considered unenforceable outside a nation’s jurisdictional borders, absent a specific statute to the contrary.
The ability to enact export restrictions is considered a regulatory police power, not an ownership right; thus, illegal export is considered a crime against the state, not against an individual.
Professor Paul Bator provides the customary international law position on foreign export restrictions, within the context of cultural property:
The fact that an art object has been illegally exported does not in itself bar it from lawful importation into the United States; illegal export does not itself render the importer (or one who took from him) in any way actionable in a U.S. court; the possession of an art object cannot be lawfully disturbed in the United States solely because it was illegally exported from another county.
In other words, violation of a foreign export restriction does not affect an otherwise-rightful title. This policy sounds partly in a practical concern with remedy. When the penalty for illegal export is seizure of the object by the importee state and return to the exportee state, the remedy is “a return only in the geographical sense; in practical terms it is a transfer of ownership to the foreign state.”
Such a remedy could theoretically entail the transfer of title from a rightful, good faith owner to the foreign nation merely for lack of proper permit.
Given this interplay between the NSPA and public policy, patrimony laws walk a fragile line in the United States. If they are considered to be ownership laws, then property taken in violation of a patrimony law can be considered “stolen” under the NSPA. But if patrimony laws are instead considered to be regulatory laws—that is, export restrictions—then such property cannot be considered “stolen” under the NSPA. This determination hinges on the extent to which an object can be considered “stolen” from a foreign nation rather than from a private individual. The McClain doctrine, a series of holdings from three circuit court cases, begins to answer this question.
C. The NSPA and the McClain Doctrine
The McClain doctrine establishes four criteria for determining whether a foreign patrimony law in a given context is enforceable in U.S. courts: (1) The law must be “clear and unambiguous”; (2) the law must be more than a mere export restriction; (3) the property at issue must have been found within the modern boundaries of the country asserting ownership; and (4) the property must have been discovered after enactment of the law.
This section focuses on the two more litigious elements: what constitutes a “clear and unambiguous” patrimony law and what constitutes a mere export restriction. It begins, in subsection I.C.1, by presenting the criminal case law that laid the foundation of the McClain doctrine. It proceeds, in subsection I.C.2, by describing the case that affirmed the McClain doctrine and brought it into the twenty-first century. Finally, it ends, in subsection I.C.3, by explaining the McClain doctrine’s evolution as a civil tool.
1. Foundation: Hollinshead and McClain. — United States v. Hollinshead heralded the first application of the NSPA to the cultural-property context.
At issue in Hollinshead were several pre-Columbian artifacts, in particular a rare and valuable stele known as Machaquila Stele 2.
The Ninth Circuit upheld convictions under the NSPA for transporting stolen property in foreign commerce.
That said, the Ninth Circuit spared little discussion of the legitimacy of the relevant patrimony law because the defendants did not attempt to argue that the patrimony law at issue was unenforceable.
Three years later, the eponymous case United States v. McClain officially addressed the enforceability of foreign patrimony laws in U.S. courts.
Defendants were charged under the NSPA for conduct related to their transport of pre-Columbian artifacts from Mexico, including terra cotta figures, pottery, beads, and stucco pieces.
At trial, despite strong evidence of defendants’ knowledge of the illegality of their conduct under Mexican law, the government was unable to prove the precise provenance of the goods.
Without provenance, the government could not prove specific instances of theft. Thus, in lieu of attempting to prove specific illegal conduct, prosecutors applied Mexico’s patrimony law.
Application of the patrimony law required proof only that the objects were stolen from anywhere in Mexico at any time after the enactment of the law, thus rendering them “stolen” from the Mexican government.
The trial court instructed the jury that Mexican patrimony laws had vested ownership in the State since 1897, and thus the jury should convict if the defendants had taken possession of the antiquities any time after 1897.
McClain represented a significant expansion of cultural property law.
It stands for the proposition that cultural property taken in violation of a foreign nation’s patrimony laws renders that property “stolen” under the NSPA.
Yet in so holding, the court was careful to distinguish foreign patrimony laws from foreign export restrictions.
Although a nation may exert police power—such as price regulation, prohibition on discriminatory use, antitrust laws, or export controls—over property within its borders, this police power is merely regulatory.
And neither the police power to regulate property nor the fact that a state has regulated property in itself constitutes ownership.
Rather, the court specified that the NSPA covers only property over which a foreign nation has made a “declaration of national ownership” and whose export the foreign nation restricts.
This dichotomy serves as the foundation of the McClain doctrine.
Despite the Fifth Circuit’s legitimization of patrimony laws via the NSPA, it nevertheless reversed the convictions of McClain and her codefendants due to judicial error.
As discussed, the trial court had instructed the jury that Mexican law had vested ownership in the state since 1897.
Yet the Fifth Circuit found this date incorrect; although Mexico had been “concerned with the preservation and regulation of pre-Columbian artifacts since 1897, . . . ownership of all pre-Columbian objects by legislative fiat . . . did not come until much later.”
This ruling emphasized the court’s distinction between regulation and ownership.
On remand, defendants were again convicted.
2. Affirmation: United States v. Schultz. — Because of the general rarity of patrimony law claims, the issue did not reach the federal appellate level again until 2003 in United States v. Schultz.
In this seminal case, prominent New York art dealer Frederick Schultz conspired with infamous art thief Jonathan Tokeley Parry to smuggle ancient Egyptian artifacts into New York.
The Second Circuit, in affirming their convictions under the NSPA,
joined the Fifth Circuit
in endorsing the application of the NSPA to foreign patrimony laws. The Second Circuit found that the relevant patrimony law, Egyptian Law 117, was “clear and unambiguous” and thus enforceable.
Like McClain, Schultz provided a detailed factual analysis of what made the relevant law an enforceable ownership law as opposed to an unenforceable export restriction. Based largely on the testimony of two expert witnesses,
the court found that Egyptian Law 117 asserted state ownership of all antiquities found after 1983 with no exceptions;
clearly defined “antiquity”;
described the procedure to be followed upon discovery of an antiquity; mandated serious criminal penalties for violations; provided for licensure of foreign archaeological missions and subsequent potential government donations to foreign museums; and directed its influence at both activity within and export out of Egypt.
Significantly, the Schultz court also noted that Egypt’s active enforcement of Law 117 confirmed the “intent of the law.”
Schultz claimed, as did McClain before him, that despite the legitimacy of Egyptian Law 117 specifically, foreign patrimony laws in general should not trigger the NSPA’s definition of “stolen.”
And the Second Circuit held, as did the Fifth Circuit before it,
that the NSPA should be interpreted expansively to include violations of foreign patrimony laws.
Thus, the McClain-doctrine cases—Hollinshead, McClain, and Schultz—differentiate patrimony laws from export restrictions based on the underlying ownership values. Under this doctrine, a patrimony law is enforceable when a foreign nation clearly and intentionally declares itself owner, and particularly when it backs up that declaration with proof of its intention, such as active enforcement.
3. Evolution: The McClain Doctrine as a Civil Tool. — Even after McClain legitimized the use of patrimony laws in the criminal context, it was unclear to what extent patrimony laws could be enforced in civil actions. But beginning in 1989 with what Professor Patty Gerstenblith calls the “first generation cases,” foreign nations began bringing their own civil actions in U.S. courts against alleged thieves.
Soon thereafter, the U.S. government followed suit by bringing civil forfeiture actions on behalf of foreign governments
—what Gerstenblith calls the “second generation cases.”
This section analyzes how both of these types of civil cases utilized and transformed the McClain doctrine.
Gerstenblith’s “first generation” cases dragged patrimony laws into the civil context. In Republic of Turkey v. OKS Partners, for example, Turkey tapped patrimony laws via the NSPA to recover an ancient Greek coin hoard worth an estimated $7.5 to $10 million.
Amidst protracted litigation, the district court held that Turkey’s patrimony laws vested it with “an immediate and unconditional right of possession” of the hoard.
This finding of right of possession was based largely on the fact that individuals who discover “movable antiquities” in Turkey must report and deliver the antiquities to the government.
Thereafter, if the antiquities are deemed deserving of protection and if the finder complied with the notice and delivery requirements, the state pays a reward to the finder.
Notably, the Turkish laws were more forgiving than the Egyptian law at issue in Schultz.
The Turkish laws referred to the finder as “owner,” allowed private possession of antiquities deemed undeserving of state protection, and provided a reward for compliance.
Egyptian Law 117, in contrast, explicitly stated that finders had no ownership rights, provided no reward for compliance, and granted no exceptions for private ownership.
Indeed, patrimony laws need not follow specific parameters to meet the enforceability threshold of the McClain doctrine. Rather, a case-by-case, fact-intensive analysis focused on the underlying ownership values and the specific property at issue determines enforceability.
Gerstenblith’s “second generation cases” encompass the move from private civil actions to government-initiated civil forfeiture actions. This shift may reflect a general expansion in the use of civil forfeiture.
It also may reflect greater U.S. appreciation for international comity, since the shift necessarily transferred litigation costs from foreign nations to the U.S. government. This cost shifting is appropriate: Foreign nations seeking recovery of stolen cultural property are often under-resourced or underadministrated (often the reason for the property theft in the first place) and may lack the ability to successfully repatriate on their own. The shift also generated significant advantages for foreign nations. The increased use of Customs civil forfeiture in particular allows for greater protections for stolen property compared to “first generation” civil actions. Customs violations under Title 19 of the U.S. Code carry a five-year statute of limitations that runs from the time the U.S. government first discovers the violation.
The statute of limitations for civil actions, in contrast, runs from the time of theft, thus rendering an old theft—such as the Nazi-era looting at issue in Portrait of Wally—likely barred.
One such Customs case is United States v. An Antique Platter of Gold, which concerned a gold phiale (or ceremonial bowl) looted from Italy.
In the midst of investigating an international smuggling ring, Italy requested assistance from the United States.
The relevant Italian patrimony law inspired no controversy.
The U.S. government sought civil forfeiture based on three theories, including one pursuant to 19 U.S.C. § 1595a(c).
As discussed above, § 1595a(c) subjects items to civil forfeiture when they have been imported “contrary to law.”
Violation of Italy’s patrimony law triggered the NSPA, which in turn triggered § 1595a(c)’s “contrary to law” language.
The district court ultimately granted summary judgment in favor of the government pursuant to § 1595a(c).
Antique Platter is just one of the increasing number of foreign patrimony law civil forfeiture claims being brought by the U.S. government.
As this number grows and the doctrine evolves, new questions come to light.
II. Inactivity Undermines the McClain Doctrine
One such question that has emerged within patrimony law litigation, and especially in the burgeoning civil forfeiture realm, regards the active-enforcement claim—here known as the “inactivity” defense. In defending against patrimony law repatriation claims, defendants wield the inactivity defense by citing to the domestic effect of the patrimony law. Specifically, defendants claim that a foreign nation’s poor history of domestic enforcement of the patrimony law should invalidate the legitimacy of the patrimony law in U.S. courts. This claim has dual difficulties: First, courts have not yet fleshed out what role inactivity should play in the litigation process; and second, in part due to this limited understanding, inactivity has been wielded in ways that threaten to forgo important contextual considerations. Section II.A introduces the origins of the inactivity defense. Section II.B describes the inactivity defense’s current, uncertain state. In light of this uncertainty, section II.C explains the importance of context in understanding inactivity, and how forgoing consideration of context threatens the McClain doctrine. Finally, section II.D discusses the procedural problems inherent in inactivity defenses that inhibit proper consideration of context.
A. The Creation of “Inactivity”: Government of Peru v. Johnson
The inactivity defense leverages the fragile balance between enforceable foreign patrimony laws and unenforceable foreign export restrictions.
This defense asserts that a nation’s patrimony laws are not “true” patrimony laws when they have little or no domestic effect. The underlying theory is that a nation could cheat the U.S. public policy (and the customary international law policy more broadly) against enforcing foreign export restrictions by enacting a “patrimony law” in name only. Imagine that a foreign nation passes a law that comports with the facial requirements of the McClain doctrine: It clearly and unambiguously declares national ownership of cultural property.
Imagine further, however, that the foreign nation has a sparse history of enforcing this law within its own borders. Perhaps the law provides criminal penalties for ownership,
but the foreign nation never enforces those penalties within its own borders; perhaps the law provides procedures to be followed upon discovery of cultural property,
but the mechanisms for those procedures are not functional; perhaps ownership of cultural property without proper permit is considered theft,
but the nation brings conversion claims only against property that has left the country. Such a system would allow free movement of cultural property within the nation’s own borders while simultaneously allowing the nation to assert ownership rights in U.S. courts when cultural property is illegally exported. The inactivity defense finds this duality problematic and seeks to invalidate such laws by “revealing” them as mere export restrictions.
This strategy is not new. It dates back to Government of Peru v. Johnson, a 1989 case involving stolen pre-Columbian artifacts.
Seeking to recover the artifacts, Peru sued the alleged thieves for conversion predicated on Peru’s patrimony law and the NSPA.
Yet the action failed, in part on account of Peru’s inability to prove that its patrimony laws were not just export restrictions in disguise.
Specifically, the district court expressed skepticism about the patrimony laws’ domestic effect.
Despite those laws’ seemingly clear proclamations of national ownership,
Peru allowed artifacts to remain in private possession and be privately transferred by various methods.
The court found “no indication in the record that Peru ever ha[d] sought to exercise its ownership rights in such property, so long as there [was] no removal from that country.”
Thus the laws functioned effectively as mere export restrictions.
Johnson signaled to defendants that a foreign nation’s less-than-ardent enforcement of its patrimony laws could be wielded as a defense to patrimony law claims—even when the patrimony law facially followed the explicit requirements of the McClain doctrine. Yet uncertainty plagues the inactivity defense today. In particular, it suffers from the lack of a cohesive framework, as discussed in the following section.
B. The Uncertain State of Inactivity
The inactivity defense is underdeveloped in part due simply to lack of precedent, because patrimony laws, in general, are so rare. Yet the inactivity defense has been cited consistently throughout the few patrimony law cases that have been brought. For example, an Illinois district court cited Johnson for the general proposition that export regulations do not create ownership rights under the NSPA.
More significantly, the Second Circuit implicitly referenced the inactivity defense in United States v. Schultz, discussed in subsection I.C.2 above, by emphasizing that Egypt’s “active enforcement of its ownership rights confirm[ed] the intent of” its patrimony law.
District courts have also discussed inactivity in each of the three cases since Schultz that concerned novel patrimony laws, two of which are discussed in this section and the third of which is considered in the following section.
The first case was United States v. One Lucite Ball Containing Lunar Material, a sensational story about a stolen lunar rock that President Richard Nixon had gifted to Honduras in 1973.
The court in Lucite Ball distinguished Johnson, in somewhat conclusory fashion, because “all of the factors identified by the district court in that case are absent here.”
It is true that, in contrast to Johnson, there were no issues in Lucite Ball with determining the provenance of the property.
In light of these factual differences, the court’s decision could be understood as a distancing from Johnson, a determination that inactivity is relevant only when the case is plagued by additional factual uncertainties.
Inactivity did not appear again until 2012 in United States v. One Tyrannosaurus Bataar Skeleton.
Bataar Skeleton involved a commercial paleontologist, Eric Prokopi, who removed a Tyrannosaurus bataar skeleton from Mongolia.
In defending against the government’s civil forfeiture complaint, Prokopi drew on Johnson to claim that “[w]hile facial clarity [of the patrimony law] is necessary, it alone is not sufficient.”
Specifically, he described the purpose of the inactivity rule as “prevent[ing] a country unwilling to take the politically unpopular step of seizing antiquities from its own people from asking the United States to do so on its behalf” or from “‘rediscovering’ laws that have previously not been enforced, thereby unsettling the reasonable expectations that have developed about the meaning of those laws.”
Like the defendants in Johnson, Prokopi asserted that the government’s complaint failed because it did not allege that Mongolia had ever enforced its patrimony laws.
The district court was unconvinced: It held that Schultz, despite emphasizing active enforcement as probative of the intent motivating a foreign law, still “falls short of making active enforcement a pleading requirement.”
Although significant, Bataar Skeleton was hardly surprising given the circumstances. The government’s civil forfeiture action accompanied significant criminal charges against Prokopi, who eventually pled guilty and agreed to return the skeleton to Mongolia.
Furthermore, there was little question regarding the provenance of the skeleton, specifically that the skeleton was recently stolen from the Nemegt Formation in Mongolia.
This meant that the most recent iterations of Mongolian patrimony law were available for prosecutorial use—and the most recent iterations of Mongolian patrimony laws were clear and clearly applicable.
But what result for an inactivity defense when the theft dates back many decades? Such claims are particularly important to consider because they are less likely to be protected under alternative, comparably recent mechanisms such as the CPIA.
Yet no case law speaks firmly to such retrospective hypotheticals.
Furthermore, all of the existing case law on inactivity involves defendants whose mens rea was unambiguous. In Johnson, there existed “substantial evidence that Mr. Johnson purchased the subject items in good faith”
—and the court wielded inactivity in support of the defendant.
In Schultz, the government produced significant evidence regarding defendants’ awareness of the illegality of their actions
—and the court wielded activity against the defendants.
And in Bataar Skeleton, the government again presented ample evidence that claimant knew that his actions were illegal
—and the court refused to wield inactivity in support of the claimant.
Mens rea is a requisite aspect of NSPA claims, but what role, if any, does it play in determining the legitimacy of the patrimony laws themselves, especially when the defendant’s mens rea is not so black-and-white?
Despite its pervasiveness in patrimony law litigation, Johnson and its descendants fail to clearly delineate the role that the inactivity defense should play.
As a result, inactivity is an uncertain standard with an uncertain future, and that uncertainty burdens parties on both sides.
C. The Importance of Context: United States v. A 10th Century Cambodian Sandstone Sculpture
One significant uncertainty that still lurks within the inactivity defense is what role context should play in the determination that a foreign nation has not actively enforced its patrimony law. United States v. A 10th Century Cambodian Sandstone Sculpture (Duryodhana), the third and most recent case involving inactivity since Schultz, illustrates this problem.
As discussed briefly in the Introduction, in this case the U.S. government sought forfeiture of the Duryodhana, a statue allegedly removed from the Prasat Chen Temple in Cambodia.
The statue had been broken off at the ankles, with the feet and pedestal remaining in situ, and was purchased by a Belgian collector in the 1970s.
In 2010, the collector’s widow signed a Consignment Agreement with Sotheby’s.
Sotheby’s contacted the Cambodian government to ensure the auction would run smoothly, but Cambodia reacted by demanding the statue’s return.
The U.S. government intervened upon Sotheby’s refusal to comply with Cambodia’s demand: It brought civil forfeiture allegations predicated on Cambodia’s patrimony laws via the NSPA.
The government premised its complaint in part on a series of colonial decrees vesting ownership in Cambodia.
The government alleged that the force of these colonial decrees carried over through Cambodia’s independence: While still under French rule, the Cambodian king signed a 1947 constitution that laid the foundation for independence and provided for existing laws consistent with its terms to “remain in force” until repealed or replaced.
A 1950 convention then transferred from France to the Royal Government of Cambodia the power to protect, classify, and conserve historic monuments.
And finally, in 1953, Cambodia formally declared and was granted independence.
Its 1972 constitution, establishing the Khmer Republic, similarly preserved the previous government’s institutions.
As a sovereign nation on the international playing field, Cambodia continued to voice its support for the protection and conservation of cultural property. It was part of the international outcry against the rampant looting in the 1960s that culminated in the 1970 UNESCO Convention
and was the seventh state to ratify the Convention.
Control over cultural property faltered during Cambodia’s bloody civil war.
Yet since the return of relative stability in the mid-1990s,
the Cambodian government has actively sought return of looted artifacts.
In Duryodhana, claimants asserted several defenses in their motion to dismiss, including that the government’s interpretation of the colonial decrees was incorrect.
Significantly, claimants also cited to Johnson and Schultz for the proposition that “[e]ven an apparently clear foreign law does not vest ownership if the foreign state has not actually enforced its own law as granting it title.”
That is, even if the colonial decrees succeeded under the McClain doctrine, they were nevertheless unenforceable under the inactivity-defense theory.
In support of their assertions, claimants painted a damning picture of the Cambodian colonial decrees. They noted that the government’s expert witness submitted an affidavit “conspicuous[ly]” devoid of “any instance prior to this litigation in which anyone—the French Government, the Cambodian government, or even a legal scholar or art historian—has taken the position that the 1925 decree on which this case is based transferred title to antiquities like the Statue to the State.”
Even Cambodia’s Culture Minister apparently had no intention of seeking the return of cultural objects that had been removed from the country before Cambodia’s modern 1992 law expressly nationalized antiquities.
Unfortunately, the case settled before trial, raising more questions than it answered. Had it gone to trial, the likely outcome of claimants’ inactivity defense is uncertain.
Some information can be gleaned from the court’s decision on claimants’ motion to dismiss. The district court ultimately denied the motion on the grounds that further evidence was necessary to determine the enforceability of the laws.
In doing so, the court explicitly denigrated claimants’ reference to Johnson on the grounds that Johnson was decided post-trial and was thus irrelevant to determining pleading sufficiency in a motion to dismiss.
The court also cited to Bataar Skeleton for substantially the same proposition: Schultz does not require the government to plead active enforcement.
The court’s ambivalence regarding the inactivity defense may indicate that courts in general are now less inclined to consider inactivity. But, on the other hand, one scholar dubbed Duryodhana “an apparent departure from Schultz.”
At a hypothetical Duryodhana trial, perhaps the government could have found instances of active enforcement and subverted the inactivity defense altogether. More likely, however, the government would have had to confront the inactivity question directly. The simplest method of confrontation is to assert that Johnson, a Central District of California case, is not good law in the Second Circuit. Yet this is rather unconvincing, given the Second Circuit’s implicit affirmance of Johnson in Schultz.
Instead, Schultz may be more easily hedged by arguing that active enforcement, while probative, is not necessary. Or, as it asserted in Bataar Skeleton, the government could claim that active enforcement is relevant only when the underlying patrimony law is unclear or ambiguous.
However, succeeding on any of these arguments only forces the government to confront another question immediately thereafter: why any particular patrimony law should be allowed reprieve from Johnson’s demands. In theory, this answer should be context specific and fact intensive. On the one hand, as the claimant in Bataar Skeleton theorized, perhaps the nation did not enforce its patrimony law because it was unwilling to take from its citizens yet had no similar qualms about asking the United States to take from its own citizens.
In such a case, the so-called patrimony law would indeed function as merely an export restriction. On the other hand, perhaps the nation was embroiled in a decade-long, bloody civil war at the time of the theft and protecting cultural heritage in the midst of the upheaval was not a priority.
In such a case, dismissing a case on an inactivity defense could read as callous—or even predatory.
Such contextual facts are essential to understanding patrimony laws in nations across the world. For example, one scholar has written of China that “[i]t is virtually impossible for the government to halt the illegal flow of cultural property out of—and within—China.”
Specifically, “[i]nstitutional insecurity, lack of funding, inadequate procedures, and corruption” prevent the active enforcement of Chinese patrimony laws.
Similarly, Nigerian patrimony laws are underenforced due to corruption and “undermining by the Nigerian authorities at the highest level.”
Even scholars otherwise wary of patrimony laws have admitted that “[e]nforcement is notoriously ineffective.”
Accordingly, inactivity is often reflective of inability, not apathy. It makes sense to avoid acting as cultural-heritage guardian for countries who “discover” their interest in protecting cultural heritage only when a particularly valuable piece shows up on the market. But it is circular and unfair to deny protection to countries rich in heritage but poor in administrative and enforcement resources—countries that have evinced interest in protecting their heritage yet are prevented from realizing that goal. It is these nations that are most in need of help from the international community. It is these nations that suffer most under a pure “inactivity” defense standard that does not consider context.
D. The Procedural Roadblocks to Incorporating Context
A proper understanding of inactivity takes context into consideration. Yet two procedural hurdles prevent this consideration. First, as subsection II.D.1 discusses, inactivity must be appreciated as a public policy protection rather than as a fairness protection. Second, as subsection II.D.2 describes, inactivity is currently restrained by the mandates of the various Federal Rules, including the Federal Rules of Civil Procedure and the Federal Rules of Criminal Procedure.
1. Inactivity Is a Public Policy Protection, Not a Due Process Protection. — Contrary to recent claimants’ assertions, inactivity should not be wielded as a fair notice or due process protection for the defendant. Bataar Skeleton claimant Prokopi emphasized the importance of “the reasonable expectations that have developed about the meaning of [patrimony] laws.”
Yet this assertion is negated by analyses of the McClain doctrine, the NSPA, the inactivity defense itself, and comparable legal mechanisms. Such analyses instead comport with an understanding of inactivity as a public policy protection. A public policy protection, unlike a due process protection, is more flexible with regard to considering context.
First, the importance of integrating context into the inactivity defense accords with the purposes of both the McClain doctrine and the inactivity defense itself. The NSPA’s purpose is to protect the proprietary interests of owners of stolen property.
Similarly, the McClain doctrine’s purpose in extending the NSPA to include patrimony laws is to expand protection beyond “ownership as understood by the common law” to include “ownership derived from foreign legislative pronouncements.”
It would be hollow expansion indeed to find that such ownership is diminished when the owner is unable to assert its interest. Incorporating context into the inactivity consideration extends protection to good faith owners who are unable to assert their interest while simultaneously rejecting protection to regulators-in-disguise who simply choose not to assert their interest. If this distinction sounds lightly in due process, it rings louder in public policy.
Second, the McClain doctrine also protects fairness in other ways distinct from inactivity. The very requirement that a patrimony law be “clear and unambiguous” ensures fairness.
Similarly, the NSPA’s scienter requirement mandates that the defendant know that the object at issue is indeed stolen, thus “eliminat[ing] the possibility that a defendant is convicted for an offense he could not have understood to exist.”
And, as discussed in section I.B, the NSPA makes concessions only for mistake of fact, not for mistake of law.
Finally, understanding inactivity as a public policy protection rather than a fairness protection comports with comparable legal mechanisms that incorporate violations of foreign law as a predicate offense. No other comparable legal mechanisms spare any consideration to active enforcement. In Lacey Act prosecutions against wildlife trafficking, for example, “[t]he underlying foreign law violation does not have to be . . . one actively enforced in the foreign country.”
Similarly, in Republic of Colombia v. Diageo North America Inc., the court found inactive enforcement to be “irrelevant” to a civil Racketeer Influenced and Corrupt Organizations Act suit.
If active enforcement were an essential fairness protection, it would not be unique to foreign patrimony laws. Instead, inactivity as a patrimony law defense is merely an expression of the public policy that the United States will not enforce foreign export restrictions absent specific agreement.
2. The Federal Rules on Determining Foreign Law. — The inactivity defense also suffers under the confused mandates of the Federal Rules of Civil Procedure and the Federal Rules of Criminal Procedure. Patrimony laws, like foreign law, are governed by Federal Rule of Civil Procedure 44.1 and its substantially similar criminal analogue Federal Rule of Criminal Procedure 26.1. Both Rules require that foreign law be treated as a question of law.
But the uncertainties of Federal Rule of Civil Procedure 44.1 and Federal Rule of Criminal Procedure 26.1 compound the already-uncertain state of the inactivity defense, making it procedurally difficult to incorporate context.
Although, traditionally, foreign law was treated as a question of fact, the Federal Rules explicitly codified foreign law as a question of law in 1966.
This change was in direct response to sustained confusion caused by the treatment of foreign law as a question of fact.
Thus the change heralded a significant evolution, manifesting as both a simplification and a liberalization.
First, the switch affected the method of notice. Prior to the adoption of the Federal Rules of Civil Procedure and the Federal Rules of Criminal Procedure, a party intending to invoke foreign law had to do so in the pleadings with all the requisite fact-finding. Disagreement over the content of the foreign law necessarily precluded summary judgment, since, by definition, there existed a genuine issue of material fact under Federal Rule of Civil Procedure 56.
Under the new 1966 Federal Rules, however, foreign law need not be pled; rather, a party could provide notice “by a pleading or other writing,” so long as it was within a “reasonable” time.
This also negates the summary judgment problem; today, courts regularly issue summary judgment on disputed issues of foreign law.
Second, the Federal Rules of Civil Procedure and the Federal Rules of Criminal Procedure have liberalized methods of proof. Courts may consider “any relevant material or source, including testimony, whether or not submitted by a party or admissible under the Federal Rules of Evidence.”
This change is significant in two ways. First, parties are no longer constricted by rules of hearsay,
expert witness qualification,
or the like. They may present “English-language or translated books, treatises, statutes, cases, [or] legal aids” regardless of their would-be applicability as factual evidence.
The most common and impactful form of evidence on foreign law remains expert witnesses.
Given judicial unfamiliarity with foreign law,
expert witnesses provide necessary guidance through often complex, murky, or archaic foreign law.
Second, the liberalization allows the court to engage in sua sponte research by conducting its own investigation, reviewing the evidence on its own terms, presenting its own material, and even calling its own witnesses.
This is especially useful when parties seek to “muddy the waters” by presenting conflicting or overcomplicated pictures of the foreign law so as to encourage judges either to dismiss or to choose the forum law over the foreign law.
A third change wrought by the Federal Rules is the treatment of foreign law on appeal. As a question of fact, foreign law was reviewed under the “clearly erroneous” standard of Federal Rule of Civil Procedure 52(a).
As a question of law, however, foreign law is now subject to independent judicial investigation and open for de novo appellate review.
Finally, the fact–law distinction is also significant for determining who may act as fact-finder. Under the old Federal Rules treating foreign law as a question of fact, the issue was often sent to the jury.
However, under the new Federal Rules, foreign law is determined by the judge.
As such, the Federal Rules transformed the determination of foreign law. Yet despite their purported emphasis on foreign law as a question of law, the Federal Rules still perpetuate the treatment of foreign law as a question of fact in some regards. For example, Rule of Civil Procedure 44.1 retains the “adversarial” elements of questions of fact, such as burdening the parties to provide notice and evidence concerning the foreign law.
When not sufficiently pled, such failure can lead to automatic dismissal or to application of forum law (even under the looser pleading standards of questions of law).
Indeed, scholars have variously criticized this duality as “conceptually incoherent,”
a “procedural minefield,”
and an “ignominious and unseemly spectacle.”
Even half a century later, some courts simply ignore the mandate of Rule of Civil Procedure 44.1 to treat foreign law as a question of law. The Fifth Circuit in particular seems keen on reanimating the pre-1966 Federal Rules: Banque Libanaise pour le Commerce v. Khreich
acts as a tuning fork. In Banque Libanaise, a French bank operating in the Emirate of Abu Dhabi sued a contractor to recover money from an overdraft agreement pursuant to an Abu Dhabi judgment.
The Fifth Circuit found for the defendant because the bank “fail[ed] to adequately prove . . . the applicable Abu Dhabi law.”
Specifically, the bank did not provide “sufficient proof to establish with reasonable certainty the substance of the foreign principles of law.”
Thus, although the court explicitly noted Rule 44.1’s requirement that foreign law is to be treated as a question of law, it still considered the pleading materials related to the relevant foreign law under a factual standard. This sufficiency language in Khreich—and its seemingly open-eyed denial of Rule 44.1—echoes throughout the rest of the Fifth Circuit and has even cropped up in the courts of other circuits.
The effect of this Federal Rules–wrought confusion on the inactivity defense is twofold. First, to the extent that Federal Rule of Civil Procedure 44.1 incorporates characteristics of both questions of law and questions of fact, it introduces an additional confusion into the already-uncertain inactivity defense. This confusion further muddies the role that both inactivity and context should play in litigation: Are they questions of fact necessitating full pleading, or questions of law requiring substantially less notice?
Second, following Rule 44.1’s explicit direction to treat foreign law as a question of law only worsens the situation. Treating inactivity as a question of law goes against a facial understanding of inactivity. It instinctively makes sense to treat the analysis of foreign patrimony law as a question of law—it is a clearly legal, albeit foreign, issue. Yet the level of enforcement itself—the threshold question of whether a patrimony law is actively enforced—is facially a factual issue. The procedural problem with incorrectly treating an issue as a question of law is, as discussed, the comparably lower pleading requirement.
In theory, under the loose pleading requirements of Rule 44.1, asserting inactivity could be as simple as presenting an expert witness who testifies that, for example, “a few shopkeepers in Costa Rica told an investigator that the law was not enforced.”
In short, the pleading standards under Rule 44.1 as applied to patrimony laws are both too confusing and too loose, and as such would allow too many inactivity defenses to move forward.
III. Creating an Inactivity Affirmative Defense
As described in Part II, inactivity is an uncertain standard. Context is both substantively underappreciated and procedurally inhibited. Inactivity defenses create uncertainty even in what is usually certain: being able to take foreign countries at their word that a foreign law is indeed what it purports to be.
Given this uncertainty, either the courts or Congress must assert control over the inactivity narrative. This Part proposes a formal standard that could be implemented either via further judicial interpretation of the McClain doctrine—itself a judicial creation—or as a statutory remedy.
Section III.A presents a substantive standard for determining when inactivity should invalidate a patrimony law. Section III.B describes how that standard should be procedurally implemented as an affirmative defense.
A. An Inactivity Standard that Incorporates Context via Intent
The key consideration in analyzing the context behind inactivity is, as discussed in Part II, whether it belies inability or apathy. Inability implies a greater need for U.S. protection. Apathy implies an export restriction in disguise, which triggers the U.S. policy against enforcing foreign regulations. The difference between inability and apathy boils down to intent. With this in mind, an “inactive” patrimony law should be defined as a law that intentionally uses the guise of a patrimony law to in fact function as an export restriction. This standard includes two distinct factors: (1) the factual level of active enforcement and (2) the legal intent behind the law.
The factual-enforcement inquiry should focus on the actual frequency of enforcement. This includes whether the patrimony law has ever been enforced in the home courts of the foreign nation; if so, whether it is only or usually upon illegal export; and whether it has ever been used in nonhome courts, such as in the United States. The analysis should not be made more complex than necessary. Focus should remain on whether the patrimony law has ever been utilized for the purpose of retaining cultural property, not on the precise prior interpretation of that law. Prior interpretation may be relevant for determining whether the law is “clear and unambiguous”
but not for determining inactivity.
The legal-intent inquiry introduces context. This factor respects the extent to which a nation has attempted to assert control, as opposed to the extent to which it has actually asserted control. Focusing on intent comports with previous NSPA rulings, both within and outside the cultural-property context. In McClain I itself, the Fifth Circuit expanded the NSPA partly because Mexico “had done all it reasonably could do—vested itself with ownership—to protect its interest in the artifacts.”
This reasoning reflects an emphasis on (or at least an acknowledgement of) both legal intent and factual context. In particular, the Fifth Circuit’s use of “reasonable” is meaningful. “Reasonable” is flexible and implies case-by-case analysis. “Reasonable” means that Mexico’s assertion of control should not necessarily be used to judge Cambodia’s or Mongolia’s assertion of control, because these countries claim vastly diverging histories. “Reasonable” is context dependent.
Domestic NSPA cases, such as United States v. Tomlinson, also support a focus on intent.
Tomlinson, which involved the illegal transportation of wild horses, turned on how intent factored into the difference between ownership and regulation.
Defendants alleged that the law in question, the Wild Free-Roaming Horses and Burros Act (“Burros Act”), did not vest ownership of the wild horses in the federal government because it did not reduce the horses to “actual possession or control.”
The court disagreed.
Rather, it was “abundantly clear that Congress . . . intended to exercise substantial dominion and control over [the wild horses] to the exclusion of private parties.”
The court further noted that it would be “hard to conceive any way in which the Congress could have chosen to exercise a greater dominion and control over such animals without reducing them to actual possession, an alternative Congress expressly rejected as contrary to its intent.”
Tomlinson is relevant for its focus on intent in determining whether the law at issue was proprietary or regulatory in nature. In finding that the Burros Act did indeed confer ownership, the court looked at the extent to which Congress could have reasonably enforced the law given its intent. Viewing the low level of active engagement in a vacuum, the Burros Act did indeed seem regulatory; although it explicitly deemed wild horses and burros to be “property of the United States,” in practice it acted merely as a management tool.
Yet factoring intent into the analysis revealed a different picture. In the Senate Report accompanying the bill, wild horses were declared “national esthetic resources” that belonged not to any one person but to “all of the American people.”
In that context, Congress’s choice not to exercise actual possession over the animals was reasonable, because asserting actual possession would have destroyed that “esthetic resource.”
Granted, there is a difference between the government conduct in Tomlinson—intentional restraint from total control—and the theoretical foreign government conduct at issue in inactivity defenses—inability to assert total control. But the focus on government intent is the takeaway. Just as “Congress could [not] have chosen to exercise a greater dominion and control over [the wild horses] without reducing them to actual possession,”
foreign nations could not choose to exercise greater control over cultural property that has not yet been discovered or cultural property that is part of an immoveable structure without either acting contrary to the intent of patrimony laws or using resources beyond their capabilities. In Bataar Skeleton, for example, reducing all dinosaur fossils in Mongolia to actual possession would require a massive archeological undertaking. In Duryodhana, reducing all temple statues to actual possession would require either the deconstruction of the temples (expensive and contrary to the preservational intent of the patrimony laws) or the construction of bulwarks to protect the temples (a difficult and expensive enterprise even in modern times, rendered impossible during the Cambodian civil war in the 1970s).
With this in mind, it is useful to reconsider the validity of claimant’s assertions in Bataar Skeleton. Claimant Prokopi wrote in his motion to dismiss that the purpose of inactivity was twofold: (1) “prevent[ing] a country unwilling to take the politically unpopular step of seizing antiquities from its own people from asking the United States to do so on its behalf” and (2) preventing a country from “‘rediscovering’ laws that have previously not been enforced, thereby unsettling the reasonable expectations that have developed about the meaning of those laws.”
As discussed in Part II, Prokopi’s second assertion speaks to fairness, with which inactivity is unconcerned. But Prokopi’s first assertion speaks to intent and therefore should be a legitimate consideration in determining inactivity. Despite the denial of his motion to dismiss, at least part of Prokopi’s theory was correct. Defining inactivity as coextensive with intent ensures proper acknowledgement of context. It comports with the purpose of the NSPA in general and with the McClain doctrine in particular, while simultaneously respecting the public policy of nonenforcement of foreign regulation.
B. Inactivity as an Affirmative Defense
While section III.A reconsiders the substantive content of inactivity, this section reconsiders the procedural treatment of inactivity. As described in subsection II.D.2, Federal Rule of Civil Procedure 44.1 is problematic when applied to inactivity because it offers conflicting, incorrect guidance (in the form of mixed signals and overly loose pleading requirements). Instead, inactivity should be treated as a mixed question of fact and law, under which (1) the level of active enforcement is a question of fact and (2) the intent behind the law is a question of law.
As an affirmative defense, the claimant should be allowed to plead as a question of fact that the foreign nation has not actively enforced its relevant patrimony laws.
This burden distribution comports with recent district court decisions on pleading inactivity. As discussed in Part II, the district court in Bataar Skeleton held that while active enforcement may be probative, it is not a pleading requirement.
Similarly, in Duryodhana, the court found that Johnson’s active-enforcement consideration was made post-trial and thus irrelevant to the pleading stage.
If sufficiently pled, the burden should shift to the government. The government may plead, as a question of law, that the foreign nation was not intentionally using the guise of a patrimony law to give extraterritorial effect to mere regulation. This is the stage at which context becomes integrated—and integral. Under the looser pleading requirements applying to questions of foreign law under Federal Rule of Civil Procedure 44.1,
the government may present contextual evidence of intent—specifically, that the foreign nation’s lack of active enforcement was due to inability, not apathy. Perhaps the foreign nation was at war, or lacked sufficient resources, or suffered from advanced corruption.
Treating an aspect of foreign law as a question of fact is contrary to a normal understanding of foreign law under the mandates of Rule 44.1.
Yet understanding inactivity as a mixed question of fact and law properly respects context in a way that a pure question of foreign law under Rule 44.1 could not. The purpose of treating the claimant’s burden as a question of fact is to force it to conform to the requisite higher pleading standards. Under the standard articulated in Bell Atlantic Corp. v. Twombly
and Ashcroft v. Iqbal,
an affirmative defense must “state a claim to relief that is plausible on its face.”
As clarified in Iqbal, “[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.”
One district court described the minimum requirement for affirmative defenses as a “brief narrative stating facts sufficient to give the plaintiff ‘fair notice of what the . . . [defense] is and the grounds upon which it rests,’”
such that “the facts stated plausibly suggest cognizable defenses under applicable law.”
Thus, a claimant may not simply assert inactivity without presenting sufficient supporting evidence.
This method of treating foreign law as a question of fact finds similarity (if not perfect symmetry) in a recent district court decision. In SEC v. Jackson, a Texas district court found that the government failed in its Foreign Corrupt Practices Act (FCPA) action to sufficiently plead the contents of a Nigerian law under the Twombly and Iqbal standard.
Specifically, the court held that the SEC did not plead sufficient facts to support its allegation that the defendants “knew that [their] payments would be used to influence a discretionary decision of a foreign official,” because they failed to sufficiently plead that the foreign official’s conduct was in fact a “discretionary” action under Nigerian law.
The court justified its decision to treat foreign law as a question of fact by noting that the Nigerian law was “not the decisional law” but rather “relevant as fact[ ].”
The court explained that although the actual Nigerian law provision need not have been pled, the SEC was required to “plead some facts that would render plausible its allegation” that the relevant conduct was indeed discretionary.
Instead, the SEC merely made “repeated incantations” that the conduct was discretionary without any apparent support.
Although Jackson occurred in a district within the jurisdiction of the Fifth Circuit—and as discussed in subsection II.D.2, the Fifth Circuit has a history of disregarding the mandates of Federal Rule of Civil Procedure 44.1
—this particular case does something more complex than simply treat foreign law as a question of fact. It differs from other Fifth Circuit precedent in that it specifically delineates the relevant Nigerian law as being tangential (“relevant as fact[ ]” rather than as “decisional law”). This treatment is comparable to the inactivity defense. If the patrimony law itself is the governing law, then the factual circumstances surrounding its enforcement frequency—as opposed to its method of use—are the tangential facts similar to the “discretionary” nature of the conduct at issue in Jackson. Thus, treating ostensible foreign law as a mixed question of law and fact has precedent.
Treating active enforcement as an affirmative defense that operates as a mixed question of fact and law properly allows consideration of context. Although seemingly novel, it comports with existing precedent both on foreign law generally and patrimony law specifically.
The heart of the NSPA—and thus the McClain doctrine—is protecting ownership. Yet despite the otherwise complementary public policy goals that birthed it, the inactivity defense has the potential to undermine that purpose. In order to harmonize both ownership rights and public policy within the inactivity defense, courts should consider context in determining whether a patrimony law is enforceable. The best procedural mechanism to allow this contextual consideration is an affirmative defense. Specifically, the factual burden should lie with the claimant to show inactivity, and if met, should shift to a legal burden on the government to show context. This method prevents inadvertent U.S. enforcement of foreign export restrictions while simultaneously respecting foreign ownership.