The Takings Exception to the Foreign Sovereign Immunities Act (FSIA) abrogates the defense of sovereign immunity when a foreign government takes property in violation of international law. But the exception does not specify whether plaintiffs must first exhaust local remedies in the relevant foreign country before filing suit in the United States. In the absence of clear statutory guidance, the circuit courts have reached divergent conclusions: the Seventh Circuit has held that the exhaustion rule is required under customary international law, the Ninth Circuit has suggested that courts could impose it at their discretion for reasons of comity, and the DC Circuit has determined that courts cannot impose the exhaustion rule under any circumstance.
This Comment argues that international law does not obligate US courts to impose the exhaustion rule and that they should not impose it at their discretion because doing so would conflict with congressional intent in a sensitive area of foreign policy. Courts should, however, require international takings plaintiffs to exhaust local remedies when the president advises them that the requirement would advance the national security or foreign policy interests of the United States. Granting a limited amount of deference to the executive branch resolves the circuit split in a manner that respects the intent of the FSIA while also minimizing undue judicial interference in the nation’s relationship with foreign countries.