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ASOCIACION DE RECLAMANTES v. UNITED MEXICAN STATES

April 20, 1983

ASOCIACION DE RECLAMANTES, et al., Plaintiffs
v.
THE UNITED MEXICAN STATES, Defendant



The opinion of the court was delivered by: HOGAN

 I. Introduction

 This case is before the Court on a motion to dismiss. It involves a class action brought by the Asociacion de Reclamantes and six individual plaintiffs seeking compensation from the United Mexican States ("Mexico") for its alleged taking and conversion of certain land grant related claims possessed by plaintiffs or their ancestors.

 Mexico asserts that the Court lacks subject matter jurisdiction to hear this case as well as personal jurisdiction over Mexico, and that even if the Court assumes jurisdiction, the act of state doctrine precludes it from exercising its jurisdiction and resolving the controversy between the parties.

 Counsel filed excellent briefs in this case and their arguments before the Court on January 16, 1983 were exceedingly helpful in weighing the multitude of contested and competing issues. As the Court noted at the hearing in this case, the alleged injuries to plaintiffs are not only serious and entitled to careful review, but give the Court great concern. Mindful of those considerations, and in accordance with the opinion which follows, the Court holds that it is without subject matter jurisdiction and that the case must be dismissed.

 II. Facts

 In evaluating a motion to dismiss for lack of subject matter jurisdiction under Fed. R. Civ. P. 12(b)(1), the Court must accept as true all material facts alleged in the complaint. Williamson v. Tucker, 645 F.2d 404, 412-13 (5th Cir. 1981) (on rehearing); Menchaca v. Chrysler Credit Corp., 613 F.2d 507, 511 (5th Cir. 1980), cert. denied, 449 U.S. 953, 66 L. Ed. 2d 217, 101 S. Ct. 358 (1980); Mortensen v. First Federal Savings & Loan Ass'n, 549 F.2d 884, 891-92 (3d Cir. 1977); Air Line Pilots Ass'n Int'l v. Northwest Airlines, Inc., 444 F. Supp. 1138, 1142 (D.D.C. 1978). Only where the defendant raises a factual challenge to the jurisdictional facts in the complaint need the court look beyond plaintiff's allegations. Id. Here, the defendant has not challenged plaintiff's jurisdictional facts, but rather asserts that on their face, they fail to invoke the power of this Court.

 Likewise, in evaluating defendant's motion to dismiss for failure to state a claim under Fed. R. Civ. P. 12(b)(6), the Court must also accept as true all material facts alleged in the complaint. Mortensen v. First Federal Savings & Loan Ass'n, 549 F.2d at 891.

 Plaintiffs' claims stem, in part, from the upheaval caused by the Mexican-American War. At the cessation of hostilities, sovereignty over Texas was transferred from Mexico to the United States under the Treaty of Guadalupe Hidalgo, 9 Stat. 922, T.S. No. 207 (Feb. 2, 1848). In the years which followed, plaintiffs' ancestors, who owned land in Texas, *fn1" were allegedly driven off their land or wrongfully divested of title by the United States, Texas, or the citizens thereof. These actions occurred in spite of provisions in the 1848 Treaty providing that the former Mexican landowners' land grants were entitled to the protection and respect of the United States. Art. VIII, Treaty of Guadalupe Hidalgo, supra.

 No allegation is made that plaintiffs' ancestors sought the return of, or compensation for, their land in a United States forum since 1848. Rather, plaintiffs' ancestors, many of whom returned to Mexico, convinced the Mexican Government to pursue their claims through diplomatic channels in the early 1920s. Under a 1923 General Claims Treaty between the United States and Mexico, 43 Stat. 1730, T.S. No. 678 (Sept. 8, 1923), the nations created a General Claims Commission to resolve all claims by citizens of each nation against the other contracting nation. The Commission was directed to quantify the number and size of the claims, and to the extent the aggregate claims of the citizens of either nation exceeded the other nation's aggregate claims, the difference would be repaid sovereign to sovereign. *fn2" Each sovereign would then be responsible for providing compensation to its own citizens. *fn3" By 1940, only a few of the 433 claims submitted by Mexico on behalf of plaintiffs are alleged to have been evaluated.

 Fueled by the expropriation of American oil company properties in Mexico in 1938, the two sovereigns went to the bargaining table again in 1940. These negotiations allegedly included the 433 land grant claims at issue in this case, and resulted in the payment of $40 million by Mexico to the United States, an amount by which it was found the aggregate United States claims exceeded the aggregate Mexican claims. Treaty on Final Settlement of Certain Claims, 56 Stat. 1347, T.S. No. 980 (Nov. 19, 1941). Plaintiffs further allege that the total value received by Mexico (i.e., total claims against Mexico released) was in excess of $193 million, and that:

 Complaint par. 29.

 Shortly after the treaty was signed, the then President of Mexico issued a decree acknowledging Mexico's assumption of the obligation for the land grant related claims, which, in part, stated:

 
FOREIGN AFFAIRS DEPARTMENT, DECREE BY WHICH IT IS ORDERED THAT A LAW BE ENACTED FOR THE SETTLEMENT, VALUATION, AND PAYMENT OF THE CLAIMS PENDING BETWEEN MEXICO AND THE UNITED STATES OF AMERICA.
 
Whereas the Convention regarding claims, signed on the 19th of November of the current year, by the Governments of Mexico and the United States of America, annuls all of the Mexican Claims filed before the General Claims Commission . . . .
 
Whereas it is the duty of the Government to tend to said claims of our nationals in order to satisy them in accordance with the role played in the recently executed convention with our neighbor country to the north and in accordance with rules of equity . . . .
 
Whereas the claims referred to have lost their international character, and have become internal obligations of our government . . . .
 
Whereas it is necessary to have a law enacted by the honorable Congress of the Union indicating the appropriate procedure for evaluating the claims referred to in this Decree, to judge them and to ascribe to them the compensation to which they are entitled, honoring the findings dictated by the international jurisdictions that have decided some of them . . . .
 
Decree
 
I. The Secretariat of Finance shall immediately proceed to study and prepare a plan, which shall be submitted to the honorable Congress of the Union, involving a law for the settlement, valuation, and payment of the Mexican claims presented to the extinct General Claims Commission, established by virtue of the ...

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