The case of the day is Helmerich & Payne International Drilling Co. v. Bolivarian Republic of Venezuela (D.C. Cir. 2018). I’ve written about the case several times before, most recently in a post on the Supreme Court’s 2017 decision. Guest poster Ira Ryk-Lakhman also wrote a more extensive overview of the Supreme Court’s decision. Here is my brief description of the facts from the prior posts:
Helmerich & Payne, an Oklahoma oil company, operated in Venezuela through subsidiaries incorporated under Venezuelan law. Beginning in 2007, its subsidiary made contracts with the Venezuelan state oil company, PDVSA, for the use of the subsidiary’s drilling rigs. But PDVSA quickly fell behind on payments under the contract. PDVSA did, however, promise that payments would be forthcoming, and H&P’s subsidiary completed the work under the contract. The subsidiary then prepared its equipment to be removed from the country, but the Venezuelan government then sent its national guard to prevent removal of the equipment and to force the negotiation of new contractual terms. Venezuela issued press releases stating that the drilling rigs had been nationalized. The government later issued a decree of expropriation and some Hugo Chavez-flavored anti-American press releases. Venezuela brought two eminent domain actions in its courts, supposedly to compensate H&P’s subsidiary. But the subsidiary never received service of process in the first case, and the second case was stayed indefinitely. H&P sued Venezuela and PDVSA. The defendants argued the claim was barred by the FSIA and under the act-of-state doctrine.
In the Supreme Court, the question was the pleading standard that applies when a plaintiff pleads a case within the expropriation exception to FSIA immunity. The holding: “[T]he expropriation exception grants jurisdiction only where there is a valid claim that ‘property’ has been ‘taken in violation of international law.’ § 1605(a)(3). A nonfrivolous argument to that effect is insufficient.”