Callejo v. Bancomer, S.A.: The Need for a Commercial Activity Exception to the Act of State Doctrine

Blankfield, Bryan J. | January 1, 1985

The ability of the United States courts to adjudicate claims against foreign sovereigns is limited by the Foreign Sovereign Immunities Act of 1976 (“FSIA”) and the act of state doctrine. In Dunhill, a plurality of the Court held that the “concept of an act of state should not be extended to include the repudiation of a purely commercial obligation. Recently, the Fifth Circuit in Callejo v. Bancomer, S.A. examined the plurality’s commercial activity exception in Dunhill, yet declined to decide whether to adopt the exception with respect to the act of state doctrine. This Note analyzes the commercial activity exception to the act of state doctrine as espoused in Dunhill and examines the Fifth Circuit’s treatment of the exception in Callejo. Although the Callejo court avoided a decision on the validity of the exception, this Note argues that the facts in Callejo indicate that such a decision was necessary. The Note concludes that a rule-oriented approach to the situation should have been utilized and that, under such an approach, the Callejo plaintiffs’ claims should have been adjudicated.