767 Third Avenue Associates v. Consulate General of Socialist Federal Republic of Yugoslavia

767 Third Avenue Associates (the landlords) (plaintiffs) sued the former Socialist Federal Republic of Yugoslavia (SFRY) and its successor states—Slovenia, Croatia, Bosnia-Herzegovina, Macedonia, and the Federal Republic of Yugoslavia (the successor states) (defendants)—to recover unpaid rent on office space in New York that the SFRY had leased for use as consular office space. During the lease’s term, political turmoil in the Balkans resulted in the disintegration of the SFRY and several years of warfare among the successor states that rose to replace the SFRY. The US government acknowledged the cessation of the SFRY and demanded the expulsion of SFRY consular staff from American soil. The US also recognized the successor states as SFRY’s successors, but succession issues remained and were still under negotiation at the time the landlords filed suit. The district court stayed the landlords’ lawsuit, holding that the landlords’ case was nonjusticiable because the issues addressing liability for payment of rent, including the potential allocation of liability between the SFRY and the successor states, was a political question that was beyond the competence of the court to decide. The district court opined that per the political-question doctrine, the court should not adjudicate, because (1) there were no judicially recognizable standards for resolving the case, (2) adjudication might tread on the duties of the executive branch, and (3) other courts had already determined that similar cases were nonjusticiable. The landlords appealed, arguing that the political-question doctrine did not preclude the court from hearing the case, because allocation of debt to successor states had not been committed to a different branch of government, the US had formally recognized the successor states, and state law provided a standard for establishing proper relief.