In the case of First National City Bank v. Banco Nacional de Cuba, the U.S Supreme Court was tasked with determining whether a foreign government's expropriation of property could be used as a defense in an unrelated claim by that same foreign government against an American corporation. The dispute began when Banco Nacional de Cuba (BNC) nationalized all banks within its borders, including branches of First National City Bank (FNCB). Later, BNC sued FNCB in New York to recover on defaulted promissory notes held by BNC but issued by FNCB before nationalization. In response, FNB counterclaimed for compensation for their seized properties. The court ruled 5-4 in favor of BNC stating that under the act-of-state doctrine - which prevents U.S courts from examining the validity of public acts committed by a recognized foreign sovereign power within its own territory - it had no jurisdiction to adjudicate upon the lawfulness or otherwise under international law or Cuban law about what happened inside Cuba’s borders regarding bank seizures and therefore couldn't offset these claims against each other.

In the dissenting opinion for First National City Bank v. Banco Nacional de Cuba, Justice Black disagreed with the majority's decision to apply the act of state doctrine in this case. He argued that it was not appropriate for courts to refuse to adjudicate cases involving foreign governments' expropriation of property on political grounds. Instead, he believed that such decisions should be left up to Congress and the President as part of their constitutional powers over foreign affairs. Furthermore, he contended that applying the act of state doctrine in this way could potentially harm U.S.-Cuba relations by implying a judicial approval or disapproval of Cuba's actions which might not align with official U.S policy towards Cuba.