Faysound Ltd. v. Walter Fuller Aircraft Sales, Inc.

Faysound Ltd. (plaintiff) sued Walter Fuller Aircraft Sales, Inc. (Fuller) (defendant) to recover a Falcon aircraft that Fuller had purchased in a dubious transaction with the Philippine Presidential Commission on Good Government (PCGG). Faysound, a Hong Kong corporation, was the original owner of the aircraft. Faysound had leased the aircraft to United Coconut Chemicals (UNICHEM), a Philippine corporation. A substantial interest in UNICHEM was held by Eduardo Cojuangco, Jr., who was also a close associate of Philippine president Ferdinand Marcos. After Marcos was deposed from his presidency, the new government established the PCGG to reclaim money and assets that the government considered ill-gotten by Marcos and his associates. To that end, the PCGG sequestered the Falcon aircraft from UNICHEM on account of Marcos’s relationship with Cojuangco without notifying Faysound, which still retained ownership of the leased aircraft. After the sequestration order expired, the PCGG, acting without judicial approval, sold and transferred the aircraft to Fuller in Arkansas. Faysound sued to recover the aircraft and moved for summary judgment. Fuller filed a competing motion for summary judgment, claiming that the court’s adjudication of the case was barred by the act-of-state doctrine and that the Second Hickenlooper Amendment did not apply because Faysound was not an American corporation and the aircraft was not located in the United States when the alleged expropriation occurred.