4. The Court held that this rule was proper in the absence of any treaty or agreement between the U.S. government and the foreign government involved. The Court held that it would have violated the principle of separation of powers if it had ruled otherwise, pointing out that the area of foreign affairs was a proper subject for the executive branch, rather than the judiciary.
In the years following this decision, dissenting opinion in the Court tried to modify it somewhat, by expressing limits which should be imposed on its application. However, the majority rule held and the Court did not rule on the various applications of the Sabbatino rule by lower federal courts. In one case involving the Cuban nationalization of American-owned property and a suit by American cigar importers for damages suffered from the loss of profits for cigar sales and trademark infringements, four justices agreed that the Cuban government action was not an act of state but a commercial activity. A fifth justice sided with the result but dissented to the part of the opinion which stated that the views of the executive branch as to whether an activity was an act of state or a commercial activity should be given great weight. Four justices dissented in toto and the last justice refused to concur in a part of the opinion that state
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