El-Shifa Pharmaceutical Industries Co. v. U.S., 03-5098.

Citation378 F.3d 1346
Decision Date11 August 2004
Docket NumberNo. 03-5098.,03-5098.
PartiesEL-SHIFA PHARMACEUTICAL INDUSTRIES COMPANY and Salah El Din Ahmed Mohammed Idris, Plaintiffs-Appellants, v. UNITED STATES, Defendant-Appellee.
CourtUnited States Courts of Appeals. United States Court of Appeals for the Federal Circuit

Appeal from the Court of Federal Claims, Lawrence M. Baskir, J.

COPYRIGHT MATERIAL OMITTED

Stephen J. Brogan, Jones Day, of Washington, DC, argued for plaintiffs-appellants. With him on the brief were Timothy J. Finn, Jonathan C. Rose, Daniel H. Bromberg and Julia C. Ambrose. Of counsel was Christopher J. Lovrien.

Peter H. Oppenheimer, Attorney, Environment & Natural Resources Division, Policy, Legislation & Special Litigation Section, United States Department of Justice, of Washington, DC, argued for defendant-appellee. With him on the brief were Thomas L. Sansonetti, Assistant Attorney General; and Kathryn E. Kovacs, Attorney.

Before LOURIE, CLEVENGER, and SCHALL, Circuit Judges.

CLEVENGER, Circuit Judge.

El-Shifa Pharmaceutical Industries Company ("El-Shifa") and Salah El Din Ahmed Mohammed Idris ("Idris") (collectively "appellants") brought this suit seeking just compensation for the destruction of a manufacturing facility by the armed forces of the United States. The complaint alleges that destruction of the appellants' facility constituted a taking of private property for public use within the meaning of the Fifth Amendment to the United States Constitution. The Court of Federal Claims concluded that the government's conduct did not rise to the level of a taking under the Fifth Amendment and dismissed the complaint accordingly. El-Shifa Pharm. Indus. Co. v. United States, 55 Fed. Cl. 751 (2003). For the reasons stated below, we hold that the appellants failed to allege a valid takings claim and therefore affirm the judgment of the Court of Federal Claims.

I

The complaint states that Idris is a highly successful Saudi banker who was born and raised in Sudan. The chain of events leading up to the instant lawsuit began in March 1998, when Idris purchased shares in El-Shifa, a corporation organized under the laws of Sudan, for $18 million. At the time, El-Shifa was the sole and exclusive owner of a manufacturing facility located in Khartoum, Sudan ("the Plant"). The appellants allege that El-Shifa was the largest pharmaceutical manufacturing company in Sudan and that it used the Plant to supply drugs sorely needed by the impoverished people living in that country.

On August 7, 1998, the United States Embassies in Nairobi, Kenya, and Dar es Salaam, Tanzania, were bombed in nearly simultaneous attacks that were linked to Osama bin Ladin and the terrorist organization al-Qaeda. On August 20, 1998, President William Jefferson Clinton ordered the armed forces of the United States to conduct strikes in Afghanistan and Sudan intended to "disrupt bin Ladin's terrorist network and destroy elements of its infrastructure" there. President's Radio Address, 2 Pub. Papers (Aug. 22, 1998). In particular, the stated purpose of the strikes was to "destroy, in Sudan, [a] factory with which bin Ladin's network is associated, which was producing an ingredient essential for nerve gas." Id.

The day after the strikes, the President sent a letter to Congress in which he stated that the Plant was being used to produce chemical weapons. See Letter to Congressional Leaders Reporting on Military Action Against Terrorist Sites in Afghanistan and Sudan, 2 Pub. Papers (Aug. 21, 1998). The President stated the United States had acted in self-defense, and that the

strikes were a necessary and proportionate response to the imminent threat of further terrorist attacks against U.S. personnel and facilities. These strikes were intended to prevent and deter additional attacks by a clearly identified terrorist threat. The targets were selected because they served to facilitate directly the efforts of terrorists specifically identified with attacks on U.S. personnel and facilities and posed a continuing threat to U.S. lives.

Id. The President added that he ordered the strikes "pursuant to [his] constitutional authority to conduct U.S. foreign relations and as Commander and Chief Executive." Id. Although bin Laden and al-Qaeda survived the strikes, the Plant was "substantially, if not completely, destroyed." El-Shifa, 55 Fed. Cl. at 754. The appellants aver that the Plant was destroyed by cruise missiles launched from American naval vessels operating on the high seas.

The appellants filed a complaint in the Court of Federal Claims on July 27, 2000, seeking $50 million in damages as compensation for the destruction of the Plant by the United States. The complaint contained a series of factual allegations denying assertions President Clinton and members of his administration made regarding the Plant's involvement in the production of chemical weapons as well as links between the appellants and al-Qaeda.

The government responded with a motion to dismiss the complaint challenging the appellants' standing to sue as well as the jurisdiction of the Court of Federal Claims to entertain their takings claim. The government argued first, that the appellants' complaint should be dismissed because nonresident aliens do not have standing to sue the government for an alleged taking absent a substantial voluntary connection between the United States and the claimants or their property. Second, the government characterized any injury the appellants may have suffered during the strikes as a maritime tort over which the Court of Federal Claims lacked subject matter jurisdiction. Third, the government argued that the appellants failed to satisfy the specific requirements of 28 U.S.C. § 2502, which limits the jurisdiction of the Court of Federal Claims over suits brought by aliens to those in which United States citizens enjoy a reciprocal right to sue the alien's home nation in its home courts.

After oral argument on the government's motion, the court ordered the parties to file additional briefing addressing the justiciability of the appellants' claim in light of the Supreme Court's political question doctrine and the applicability of the Takings Clause of the Fifth Amendment to the governmental conduct described in the complaint. El-Shifa, 55 Fed. Cl. at 755. Ultimately, the government briefed fully its contention that the political question and military necessity doctrines counseled in favor of dismissal. Id.

The Court of Federal Claims rejected the three original grounds for dismissal, but nevertheless ruled in the government's favor on the ground that the Takings Clause did not apply to the facts alleged in the complaint. See id. at 755-56 (stating that "the Takings Clause does not extend to claims arising out of military operations against enemy war-making instrumentalities"). The court determined that the property in question in this case was transformed into enemy property by the President, see id. at 771, and it determined that the President's designation was conclusive in light of his constitutional role as Commander-in-Chief, see id. at 772. The court concluded that it could "not look behind the President's discharge of his Constitutional duties as Commander in Chief, including his declaration of what constitutes an enemy target and his determination to use military force to destroy that target." Id. at 774.

The Court of Federal Claims entered judgment in the government's favor on March 14, 2003 and denied the appellants' motion for reconsideration. The appellants timely appealed the court's decision to this court. We have jurisdiction to entertain the appeal pursuant to 28 U.S.C. § 1295(a)(3).

II

The appellants' assertion that the Court of Federal Claims erred when it dismissed their complaint for failing to state a claim upon which relief can be granted raises a question of law that we review de novo. See Leider v. United States, 301 F.3d 1290, 1295 (Fed.Cir.2002); Boyle v. United States, 200 F.3d 1369, 1372 (Fed.Cir.2000). In reviewing a decision to dismiss for failure to state a claim we must assume that all the well-pled factual allegations in the appellants' complaint are true, and we draw all reasonable inferences in their favor. See Leider, 301 F.3d at 1295. The government's contention that the Court of Federal Claims erred when it rejected its motion to dismiss for lack of subject matter jurisdiction also raises a question of law warranting de novo review. See Boyle, 200 F.3d at 1372; Moyer v. United States, 190 F.3d 1314, 1317-18 (Fed.Cir.1999).

III

On appeal, the government raises anew its three original grounds for dismissal of the appellants' complaint. Like the Court of Federal Claims, we think none of these grounds provides a firm basis supporting entry of judgment in favor of the United States.

A

The government's first ground raises the issue of whether the Takings Clause reaches property owned by a nonresident alien located beyond the shores of the United States. The government argues that it does not if the nonresident alien or his property lacks a substantial voluntary connection to the United States. The appellants oppose the government's characterization of the Takings Clause in this respect and respond by stating, in part, that the "Takings Clause imposes an absolute and unqualified restriction upon government conduct... [that] is derived from a theory of `natural law' and based upon a natural right to private property which is universal in nature, not dependent on citizenship, and a fundamental principle of international law...." Appellants' Reply Br. at 20.

The Takings Clause tersely states: "nor shall private property be taken for public use, without just compensation." U.S. Const. amend. V. To be sure, the text of the Takings Clause does not qualify what is meant by "private property" or indicate that it must be located in this country. Nor does the text say that only American citizens may receive just compensation. Accordingly, the parties agree that a complaint...

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