## Facts

- McKesson Corporation, a U.S. company, held a substantial ownership interest in an Iranian dairy company (Pak) and previously received dividends.
- After the 1979 Iranian Revolution, McKesson alleged Iranian state actions and related conduct effectively excluded it from participation in Pak and prevented payment of dividends.
- McKesson claimed these acts amounted to an uncompensated taking of its investment.
- In 1982, McKesson sued Iran in federal court seeking relief for expropriation under the 1955 Treaty of Amity between the United States and Iran and under customary international law.
- The litigation returned to the court of appeals multiple times; on remand before this appeal, the district court entered judgment for McKesson, concluding the Treaty of Amity and customary international law supplied causes of action.

## Issues

1. Whether subject-matter jurisdiction existed under the Foreign Sovereign Immunities Act commercial activity exception, 28 U.S.C. § 1605(a)(2).
2. Whether the Treaty of Amity creates a privately enforceable cause of action for expropriation in U.S. courts.
3. Whether customary international law of expropriation supplies a private cause of action directly enforceable against a foreign sovereign in U.S. courts.

## Decision

- The court affirmed that FSIA subject-matter jurisdiction existed under the commercial activity exception, declining to revisit its prior jurisdiction holdings.
- The court reversed the district court’s ruling that the Treaty of Amity provides a private cause of action, holding it does not authorize private suits.
- The court reversed the district court’s refusal to reconsider whether customary international law provides a cause of action and remanded for renewed analysis of that question in light of intervening authority.
- The case was remanded for further proceedings consistent with these holdings.

## Legal Principles

- Prior appellate determinations sustaining FSIA commercial-activity jurisdiction may be treated as settled where no sufficient basis is shown to reconsider them.
- A treaty’s self-executing status does not, by itself, establish a private right of action; courts generally presume treaties do not create privately enforceable remedies absent clear textual or structural support.
- Treaty provisions setting substantive standards (including protections against uncompensated takings) do not necessarily imply a private cause of action when the agreement contemplates state-to-state dispute mechanisms.
- Customary international law may supply substantive norms, but whether it supplies a domestic, privately enforceable cause of action is a separate question requiring careful analysis under modern implied-right-of-action doctrine.

## Conclusion

The D.C. Circuit maintained FSIA commercial-activity jurisdiction over McKesson’s claims, rejected the Treaty of Amity as a source of a private cause of action, and required the district court to reconsider whether customary international law independently authorizes a private suit against Iran.


McKesson Corp. v. Islamic Republic of Iran, 539 F.3d 485 (D.C. Cir. 2008)