2013 International Law Update, Volume 19, Number 4 (October – November - December)

2013 International Law Update, Volume 19, Number 4 (October – November - December)

Legal Analyses published by Mike Meier, Attorney at Law. Copyright 2017 Mike Meier. www.internationallawinfo.com. 

ARBITRATION/DISCOVERY

In ongoing dispute over severe environmental pollution in Ecuador allegedly caused by U.S. company, Fifth Circuit holds that judicial estoppel is appropriate and discovery should be made available under Section 1782 for use in arbitration; Chevron, opposing the Section 1782 discovery, had previously argued that the arbitration is in fact an “international tribunal” and benefitted from the results, but in this case argued the opposite, that the arbitration is not such a “foreign or international tribunal”

The following case is part of the ongoing saga about the environmental contamination of oil fields in Ecuador. The dispute has continued for almost 20 years and involved dozens of courts. Before a court in Lago Agrio, Ecuador, issued a multi-billion dollar judgment against Chevron, Chevron filed for arbitration under the UNCITRAL rules pursuant to the U.S.–Ecuador Bilateral Investment Treaty (BIT).

In the following matter, The Republic of Ecuador seeks discovery under 28 U.S.C. Section 1782 from John Connor and his company GSI Environmental to use it in the foreign arbitration proceeding against Chevron. Chevron intervened in the U.S. District Court proceeding to protect its interests. The District Court found that the pending arbitration is a bilateral investment dispute and not a “foreign or international tribunal” as required by Section 1782. Ecuador appeals.

The U.S. Court of Appeals for the Fifth Circuit reverses and remands for a determination of the scope of discovery. The Court notes that in the past, Chevron has benefitted by arguing against Ecuador and others that the arbitration is a “foreign or international tribunal.” Chevron’s previous positions are inconsistent with its current argument, and judicial estoppel should apply to make the discovery available to Ecuador.

“Judicial estoppel is an equitable doctrine designed to protect the integrity of judicial proceedings by preventing litigants from asserting contradictory positions for tactical gain. The precise rationale for and consequences of the doctrine vary. 18B CHARLES ALAN WRIGHT, ARTHUR R. MILLER & EDWARD H. COOPER, FEDERAL PRACTICE AND PROCEDURE § 4477 (2d ed. 2002 & Supp. 2012) … Recognizing this, the Supreme Court examined the doctrine extensively in New Hampshire v. Maine, 532 U.S. 742, 121 S.Ct. 1808, 149 L.Ed.2d 968 (2001), but in the end refused to establish an ‘inflexible formula.’ Relying instead on several factors that often indicate the propriety of the sanction, the Court held that a party may be estopped from asserting a position in a judicial proceeding where it has previously persuaded a court to adopt a clearly contrary position to the disadvantage of an opponent. See also Reed v. City of Arlington, 650 F.3d 571 (5th Cir.2011) (en banc). Reed also notes, ‘Because judicial estoppel is an equitable doctrine, courts may apply it flexibly to achieve substantial justice.’ Id. at 576.”

“The predicate for the exercise of judicial estoppel against Chevron is easily described. To promote international dispute resolution and comity, § 1782 authorizes federal district courts to issue discovery orders ancillary to proceedings in ‘foreign or international tribunals.’ In numerous district courts, and on appeal in other circuits, Chevron asserted that the BIT arbitration is an international proceeding. Chevron explicitly distinguished this court’s [decision in Republic of Kazakhstan v. Biedermann Int’l, 168 F.3d 880 (5th Cir.1999)]… as involving a purely ‘private’ international arbitration between the Republic of Kazakhstan and an investor company. Chevron denies neither that it made these assertions, nor that its current position on the arbitration’s status is precisely contrary, nor that it successfully obtained § 1782 discovery orders over Ecuador’s opposition. Why shouldn’t sauce for Chevron’s goose be sauce for the Ecuador gander as well?” [708 F.3d at 654] (footnotes omitted)

The Court then addresses and rejects Chevron’s argument that the BIT arbitration raises an issue of jurisdiction to which judicial estoppel does not apply.

“The only remaining doubt about the availability of judicial estoppel is that Chevron’s inconsistent argument may have been ‘irrelevant’ to the discovery orders in prior cases. Because the parties’ disputes have involved both Ecuadorian court litigation (unquestionably, a ‘foreign tribunal’) and the BIT arbitration (arguably, an ‘international tribunal’), Chevron’s § 1782 discovery requests were often premised on twin grounds. We have found no authority suggesting that ‘harmless error,’ or some variety thereof, is not among the equitable considerations underlying judicial estoppel, but we do not reach the question here. A review of many of the courts’ orders shows that they rested on the twin § 1782 grounds for authorizing discovery, in part because Ecuador never challenged that the BIT arbitration is an ‘international tribunal.’ A recent Third Circuit decision, in particular, notes repeatedly that although certain of Ecuador’s objections to discovery might be meritorious if related to the Lago Agrio litigation alone, ‘Chevron seeks the § 1782 discovery for use in both the Lago Agrio litigation and the BIT arbitration.’ In re Application of Chevron Corp., 633 F.3d 153, 161, 163 (3d Cir. 2011). Chevron profited from being able to assert mutually reinforcing grounds under § 1782 to support its discovery requests; the courts were persuaded that whether ‘for use’ in the Ecuadorian court proceedings or the arbitral tribunal, Chevron’s requests satisfied § 1782. The status of the BIT arbitration was not irrelevant to Chevron’s success.”

“The result of rejecting these objections is clear. Chevron has deliberately taken inconsistent positions on the availability of § 1782 discovery for use in ‘international tribunals.’ Chevron successfully obtained such discovery by persuading courts to reject Ecuadorian (and related parties’) objections and by contending, opposite to its current position, that the BIT arbitration is an ‘international tribunal.’ Finally, if Chevron is permitted to shield itself under Biedermann against Ecuador’s current discovery request, it will have gained an unfair advantage over its adversary. Chevron should be judicially estopped from asserting its legally contrary position here. Consequently, we need not and do not opine on whether the BIT arbitration is in an ‘international tribunal.’ On remand, the district court should proceed in its discretion to evaluate Ecuador’s request for discovery pursuant to § 1782.” [708 F.3d at 657-658]

Citation: Republic of Ecuador v. Connor, 708 F.3d 651 (5th Cir. 2013).

COPYRIGHT

German High Court holds that file hosting providers must ensure that the files and links do not violate copyrights, and imposes comprehensive monitoring requirements

The German High Court [Federal Court of Justice, Bundesgerichtshof (BGH)] has issued an opinion which elaborates the obligations of file hosting companies to protect copyrights.

In a previous opinion issued in 2012, the German High Court had found that file hosting providers must block access to links and delete files once they receive notification that they violate copyrights. They must also review and filter as necessary once they receive notification of an infringement (“Alone in the Dark” matter, Urteil vom 12.07.2012, Az: I ZR 18/11). The German High Court now expands these duties by requiring active monitoring of links and data files.

The dispute began with the German Society for musical performing and mechanical reproduction rights (GEMA) filing suit against RapidShare (www.rapidshare.com), a file hosting (“sharehosting”) company based in Switzerland. GEMA has exclusive use rights for numerous musical works, including 4,800 works that GEMA found on the RapidShare website in violation of registered copyrights. RapidShare stores, administers and helps users distribute electronic files such as music, games and images. RapidShare permits users to upload files, and allows other users to anonymously download those files through a download link. RapidShare does not provide a table of contents or catalogue, and does not offer any search function. However, users can create link collections which can be searched.

GEMA notified RapidShare repeatedly of the violations in 2006 and 2008, and demanded that (a) the 4,800 files and links be deleted, and (b) that RapidShare investigate whether files have been uploaded in violation of copyrights.

GEMA filed suit in the District Court Hamburg (Landgericht Hamburg, ZUM 2009, 863; Beschluss vom 10.12.2009; Az. 308 O 667/09) against RapidShare and two of its officers, demanding that RapidShare stop the offering of the 4,800 musical works through its website. RapidShare appealed.

The Court of Appeals in Hamburg (Oberlandesgericht, OLG) found that RapidShare acted as an “interferer” (“Störer”) who enabled the copyright infringements by providing a forum where the infringements can take place (Urteil vom 14.03.2012, Az. 5 U 87/09, available at http://openjur.de/u/270161.html).

[NOTE: “Störer” (“interferer”) is a term of art in German law. As for internet-related offenses, there is “Störerhaftung” (“interferer liability”) for those who participate in the distribution of content that violates the law. See Wikipedia article on “Störerhaftung” in German law at http://de.wikipedia.org/wiki/St%C3%B6rerhaftung.]

The Court thus imposed a duty to monitor such file sharing activities upon file hosting providers such as RapidShare. RapidShare appealed to the German High Court, asking that the case be dismissed.

The German High Court affirms the decision of the Hamburg Court of Appeals as for RapidShare, and elaborates on the monitoring duties for such service providers. Such service providers must actively monitor whether the offered files violate copyrights, and delete links and files that are found to be in violation. The Court remands, however, for additional fact-finding as for the two individual officers, whether they were aware of the infringements and could have prevented them.

The German High Court essentially affirms the findings and monitoring duties imposed by the Hamburg Court of Appeals. RapidShare received notification of the infringements being committed through its servers, and could have stopped them. The musical works at issue, however, continued to be accessible. If RapidShare had monitored the activities of its users for copyright infringements, it could have prevented the violations of GEMA’s rights.

For all copyrighted works for which service providers like RapidShare have received notices of infringements, it is not an undue burden to regularly monitor the files and links created by users to prevent copyright infringements (Paragraphs 1-16 of the German High Court Opinion).

RapidShare is liable as an “interferer” because it failed to comply with its monitoring obligations. The Court notes that RapidShare contributes to the illegal file sharing, for example by permitting anonymous access to the links and files, and the availability of for-pay “premium accounts” which make file sharing simpler and faster. While RapidShare’s business deserves the protection of the law, it contains in its very structure the potential for large-scale copyright infringements.

As for international jurisdiction over the subject matter, the Court relies on Article 5, paragraph 3, of the Lugano Convention on jurisdiction and the enforcement of judgments in civil and commercial matters (1988) (BGBL. 1994 II S. 2658) (“Article 5. A person domiciled in a Contracting State may, in another Contracting State, be sued: … 3. in matters relating to tort, delict or quasi-delict, in the courts for the place where the harmful event occurred; …”). GEMA alleges that the infringements also occurred in Germany.

[NOTE: There is a “new Lugano Convention” which entered into force on January 1, 2010, see http://ec.europa.eu/world/agreements/prepareCreateTreatiesWorkspace/treatiesGeneralData.do?redirect=true&treatyId=7481].]

The Court notes that the decision of the Hamburg Court of Appeals does not outline the specifics of the monitoring duties for service providers such as RapidShare. Such duties, however, are difficult to specify in detail in this type of proceeding.

While RapidShare cannot be classified as an “accomplice” to the copyright infringements, it certainly is an “interferer” who directly or indirectly contributed to the copyright infringements. The “interferer” liability cannot be unduly imposed upon third parties who have not personally violated the law. Thus, “interferer” liability requires the third party to have violated some duty to monitor.

The scope of the duty to monitor depends. There cannot be a general duty to monitor. See Article 15 of Directive 2000/31/EC of the European Parliament and of the Council of 8 June 2000 on certain legal aspects of information society services, in particular electronic commerce, in the Internal Market (“Directive on electronic commerce”) (Official Journal L 178, 17/07/2000 P. 0001– 0016): “Member States shall not impose a general obligation on providers, when providing the services …. to monitor the information which they transmit or store, nor a general obligation actively to seek facts or circumstances indicating illegal activity.” There are, however, permissible monitoring duties in specific cases. Service providers that store data provided by users have a reasonable duty of care to discover and prevent violations of domestic law. See Paragraph 48 of the Preamble of the Directive on electronic commerce: “(48) This Directive does not affect the possibility for Member States of requiring service providers, who host information provided by recipients of their service, to apply duties of care, which can reasonably be expected from them and which are specified by national law, in order to detect and prevent certain types of illegal activities.” This general duty of care complies with the opinion of the European Court of Justice in the case Judgment of the Court (Grand Chamber) of 12 July 2011, L’Oréal SA and Others v eBay International AG and Others (C-324/09).

There may be further duties if the purpose of the offered services involves violations of the law. (Paragraphs 29-31).

Here, the business model of RapidShare is not intentionally designed to violate the law. There are many lawful purposes for RapidShare’s services, and there is a technical and economic demand for such. For example, business and private persons can use RapidShare to store and protect their data, or to share their proprietary files.

RapidShare generates revenue through “premium accounts” that facilitate downloads. It advertises that some files have been downloaded 100,000, which strongly indicates that highly attractive, copyrighted materials were shared, such as movies, music or software. The more a user downloads such files, the more attractive is RapidShare’s premium account. RapidShare thus profits from illegal filesharing. Illegal filesharing becomes even more attractive because RapidShare permits it occur anonymously. (Paragraphs 36-42).

As for a reasonable duty of care in such cases, the Court notes that RapidShare received notice of specific copyright infringements, deleted those infringing files, but failed to prevent similar infringements in the future. Such similar, future infringements that must be prevented are not only those committed by the same user with the same copyrighted work. In addition, the service provider must act as much as technically and economically feasible to prevent the identified infringing user from continuing to offer the specified copyright works. While RapidShare claimed to have a 17-person team working on preventing copyright infringements generally, it did not show that it acted to prevent further infringements of the copyrighted works for which it had received notifications. RapidShare’s terms and conditions state that users shall not violate copyrights is a necessary requirement, but not an effective means of preventing copyright infringements. Neither is the user of filtering devices useful, as it can only discover the distribution of identical files. Finally, the “delete interface” offered copyright holders to delete infringing files only permits copyright holders to delete already known files, but does not permit a search of potentially infringing files. RapidShare thus violated its monitoring duties to prevent similar violations of the law in the future. (Paragraphs 44-55).

In particular, RapidShare should have searched the link collections for the works for which RapidShare received notification of copyright infringement. (Paragraphs 55-58).

Service providers such as RapidShare have a “market observation duty” which require the use of search engines such as Google, Facebook or Twitter, and possibly even web crawlers, to identify continuing copyright infringements through its servers of the works for which it received copyright infringement notifications (Paragraphs 59-60).

In sum, the German High Court holds:

Even if the business model of a file hosting service is not intended to violate the law, there are monitoring requirements because the service acts as a contributor to the violations.

If a file hosting service, through its business model, substantially contributes to copyright infringements, it is not an undue burden to regularly monitor the collections of links provided through its services.

The resulting monitoring requirements apply to each copyrighted work for which the file hosting service has received notice of a copyright infringement. They apply even if the number of notified infringements is large (in this case 4,800 music titles).

In practical terms, this decision requires service providers such as RapidShare to actively monitor the files being offered and shared for possible copyright violations.

The German High Court, however, remands the matter to the Hamburg Appeals Court for a new trial and fact-finding as for the individual officers. There cannot be liability as an “interferer” for violations of the law in which one did not participate, of which one had no knowledge, and which one could not have prevented.

Citation: Bundesgerichtshof (BGH), I ZR 80/12 (15. August 2013), available at www.bundesgerichtshof.de.

CRIMINAL LAW

In habeas corpus proceeding as to actual innocence, California Court of Appeal finds it is not necessary to examine witness in Mexico who had testified at trial in a contradictory manner; Court notes that examination of out-of-state/out-of-country witness is generally permissible in post-conviction proceedings

In 2002, Juan Jose Pulido was convicted of various criminal charges including the torture and kidnapping of Emanuel Cardenas, and was sentenced to 51 years in prison. In 2011, Pulido filed a petition for a writ of habeas corpus in the Superior Court of Los Angeles County, which the Court denied. Pulido then filed habeas corpus in the California 4th District Court of Appeal, and the Court only granted an evidentiary hearing before the Superior Court on the issue of actual innocence.

In the meantime, the crime victim Cardenas had been deported to Mexico. Pulido filed a motion requesting that Cardenas be examined in Mexico. Pulido stated in support of his motion that Cardenas wanted to recant his prior testimony that Pulido was the perpetrator. Attached to Pulido’s motion was a sworn declaration signed by Cardenas, stating that Pulido was not involved in the dispute that led to the kidnapping and injuries. Instead, police officers, the prosecutor, and the actual abductors intimidated Cardenas and forced him to falsely testify that Pulido was the perpetrator. The Superior Court did not see any purpose in examining Cardenas in Mexico and denied the request.

Pulido now petitions review of the Superior Court’s denial of his motion to examine a material witness in Mexico.

The California 4th District Court of Appeal denies the petition. The California Penal Code does permit the examination of an out-of-state witness when necessary to the attainment of justice. Here, however, Cardenas’ trial testimony shows that his testimony to be given in Mexico would not be materially different.

“‘Sections 1349 through 1362 set forth procedures under which a defendant may have a material witness residing outside the state or the country examined on an issue of fact arising in a pending criminal action. The defendant must apply for an order to examine the witness upon a commission (§§ 1349, 1350), based on an affidavit stating that the testimony of the witness is material to defense of the action. (§ 1352 … ) If the court ‘is satisfied of the truth of the facts stated, and that the examination of the witness is necessary to the attainment of justice,’ it must order issuance of a commission to take the witness’s testimony. (§ 1354 …) The commission is a process issued under court seal, authorizing a designated person to take the deposition of the witness and return it to the court. (Ibid.; § 1351.) ‘Depositions taken under the commission may be read in evidence by either party at trial on a finding the witness is unavailable under Evidence Code section 240. (§ 1362.) The procedure does not afford any means by which such testimony may be compelled; obtaining the testimony is subject to the consent of the person whose testimony is sought. [¶] The trial court’s ruling on the application is reviewed for an abuse of discretion. [Citation.]’ (Ibid.) The trial court’s initial ruling that the statutes do not apply to postconviction proceedings, however, is a purely legal question which we review de novo. …” [Slip Op. 7-8]

“While the statutes reference ‘trial’ proceedings, the essence of the commission procedure is to allow a defendant to provide material testimony from an out-of-state witness when ‘an issue of fact has been joined’ and when the ‘examination of the witness is necessary to the attainment of justice.’ (§§ 1352, 1354.) This case presents just such a situation. We have ordered the trial court to conduct an evidentiary hearing on actual innocence, joining the ultimate issue of fact, which is whether Pulido was innocent of the offenses for which he was convicted. Under these circumstances, the examination of a material witness is ‘necessary to the attainment of justice.’ When actual innocence is in issue posttrial, the trial court retains its statutory authority to order examination on a commission, because its objective is the same as in a trial proceeding.”

“That the court has the authority to order such an examination does not, however, require the court to do so upon every request. While we disagree with the trial court’s conclusion that the statute does not apply in this case, we see no abuse of discretion in the trial court’s additional ruling, in which it found that Pulido had not demonstrated that the examination of Cardenas in Mexico would assist the court as a trier of fact. The court concluded that Cardenas’s declaration, meant to show that the examination would produce material evidence, did not include anything materially different from his trial testimony and thus it would not be necessary to the attainment of justice. …” [Slip Op. 8-9]

“On cross-examination, Cardenas said he was still frightened of some people who had ‘chase[d] [him] around once’ after a dispute about a girl, and who had threatened him and rode around his parents’ house. He repeated that Pulido had forced him into the van at gunpoint. Cardenas admitted that the day before he told the prosecutor that Pulido was not the man who shot him, but denied telling that to [witness] Gallardo. Pulido had not threatened him and no one had asked him to lie on the stand, but Cardenas had told two different stories. He denied telling anyone that he wanted to change his story at the preliminary hearing. ‘The person that shot me is the same man. It’s him [Pulido].’ He had wanted to change his testimony yesterday because he was afraid: ‘They’ll do something.’ Asked, ‘Who?’ Cardenas answered, ‘I don’t know, man. There’s people outside.’ It was just fear that made him say that Pulido was not the shooter. He was also afraid of being prosecuted for perjury. The day before, he was ‘[j]ust saying the truth.’ Cardenas had not told anyone other than the prosecutor that he wanted to change his testimony. Pressed again, Cardenas reaffirmed that he was ‘telling the truth today’: ‘Jose is the one that shot me.’ The prosecutor just told him to tell the truth. It was only fear that had caused him to say the day before that Pulido was not the shooter. The last words of Cardenas’s testimony were: ‘He’s the one that shot me.’” [Slip Op. 10-11]

“Our review of the trial transcript demonstrates that the trial court, who also read the transcript, did not abuse its discretion in denying the motion for a commission on the grounds that it would not produce material evidence to assist the court in adjudicating the claim of actual innocence in Pulido’s habeas petition. A commission should be issued if the supporting affidavit explains how the testimony would be material to the defense ‘and that the examination of the witness is necessary to the attainment of justice.’… Cardenas had already testified at trial, consistent with his earlier identification and his testimony at the preliminary hearing, that Pulido shot him. Cardenas also acknowledged that he had said the day before that Pulido was not the shooter, and had earlier told Gallardo the same thing (which Gallardo confirmed in his testimony), but had done so because he was frightened. He repeated over and over that Pulido was the shooter and that he was telling the truth. The jury heard about Cardenas’s momentary recantation of his identification of Pulido as the shooter, and chose to believe Cardenas when he stated on the stand that he was telling the truth, and ‘Jose is the one that shot me.’”

“Cardenas is not a new witness. His 2008 declaration promises a reprise of the conflicting stories presented to the jury at Pulido’s trial; the jury chose to believe Cardenas’s trial testimony that Pulido was the shooter. Accordingly, the trial court was within its discretion to deny the motion for a commission to examine Cardenas in Mexico.” [Slip. Op. 12]

Citation: Pulido v. Superior Court, No. B250802 (Cal.App.4th December 10, 2013).

EXTRADITION

Reviewing a challenge to extradition of international arms dealer from Thailand, Second Circuit affirms that courts cannot second-guess another country’s grant of extradition to the United States, even if such extradition may be the result of political pressure

Viktor Bout made a comfortable living selling arms internationally. He was arrested in Thailand in 2008 as the result of an international sting operation. Bout thought he was meeting with representatives of the Colombian terrorist organization “Fuerzas Armadas Revolucionarias de Colombia” (FARC) to negotiate the sale of 100 surface-to-air (SAM) missiles. In fact, Bout’s negotiating partners were government informants. The U.S. sought his extradition from Thailand, which was granted in 2010.

After a trial in the U.S. District Court for the Southern District of New York in the Fall of 2011, Bout was found guilty of various offenses, including conspiracy to kill U.S. officers and conspiracy to acquire and export a missile system designed to destroy aircraft. Bout now appeals. One of his challenges is that his extradition from Thailand was illegal because it was the result of intense U.S. political pressure.

The U.S. Court of Appeals for the Second Circuit affirms the conviction. The Court first rejects Bout’s claim that the prosecution was vindictive and violated his constitutional right to due process.

“The Supreme Court has … recognized the possibility that ‘outrageous’ government conduct could bar a criminal conviction. See Hampton v. United States, 425 U.S. 484, 489, 96 S.Ct. 1646, 48 L.Ed.2d 113 (1976). To prevail on such a claim, however, a defendant must show that the government’s conduct is ‘so outrageous that common notions of fairness and decency would be offended were judicial processes invoked to obtain a conviction.’ … In other words, the government’s conduct must ‘`shock the conscience’ in the sense contemplated by [the Supreme Court in] Rochin v. California, 342 U.S. 165, 172, 72 S.Ct. 205, 96 L.Ed. 183 (1952) (forced stomach pumping).’ … As we have explained:”

“‘Generally, to be `outrageous,’ the government’s involvement in a crime must involve either coercion or a violation of the defendant’s person. It does not suffice to show that the government created the opportunity for the offense, even if the government’s ploy is elaborate and the engagement with the defendant is extensive. Likewise, feigned friendship, cash inducement, and coaching in how to commit the crime do not constitute outrageous conduct.’”

“United States v. Al Kassar, 660 F.3d 108, 121 (2d Cir. 2011) (citations omitted). Indeed, ‘as with all sting operations, government creation of the opportunity to commit an offense, even to the point of supplying defendants with materials essential to commit crimes, does not exceed due process limits.’ ….”

“Having reviewed the record in light of these principles, we conclude that Bout’s allegations do not meet the high threshold necessary to prevail on a vindictive prosecution claim. Bout refers to media reports stating that former Deputy National Security Advisor Juan Zarate and other high-ranking officials at the Drug Enforcement Agency (DEA) had him in their ‘cross-hairs.’ Appellant’s Br. 24. Even if true, these allegations do not constitute the type of ‘animus’ that is relevant within the meaning of our cases on vindictive prosecution. The ‘animus’ that is prohibited typically occurs in situations where ‘a prosecutor’s charging decision is a direct and unjustifiable penalty that resulted solely from the defendant’s exercise of a protected legal right.’ … In this case, however, the government’s motivation to prosecute Bout stemmed from widespread concern that he was engaged in criminal conduct, as evidenced by his placement on numerous United States and United Nations ‘sanctions lists’ since the early 2000s. The government’s enthusiastic or energetic pursuit of Bout, a high-priority criminal target, does not demonstrate vindictive, or even inappropriate, government conduct. See United States v. Sanders, 211 F.3d 711, 718 (2d Cir. 2000) (holding that an ‘aggressive investigation’ in response to a ‘potential [criminal] violation ... cannot give rise to an inference of impropriety’).” [731 F.3d at 238-239]

The Court then turns to the issue of Bout’s extradition. The gist of Bout’s challenge is that 18 U.S.C. Section 3184 permits U.S. courts to review the legality of an extradition of a defendant from the U.S. to another country. Consequently, U.S. courts should review the legality of an extradition from another country to the U.S.

“We disagree. We have squarely held that ‘although courts of the United States have authority to determine whether an offense is an extraditable crime when deciding whether an accused should be extradited from the United States ... our courts cannot second-guess another country’s grant of extradition to the United States.’ United States v. Campbell, 300 F.3d 202, 209 (2d Cir. 2002) (citation omitted); id. (‘It could hardly promote harmony to request a grant of extradition and then, after extradition is granted, have the requesting nation take the stance that the extraditing nation was wrong to grant the request.’).”

“Likewise, under the so-called Ker-Frisbie doctrine, ‘the government’s power to prosecute a defendant is not impaired by the illegality of the method by which it acquires control over him.’ United States v. Toscanino, 500 F.2d 267, 271 (2d Cir.1974) (relying on Ker v. Illinois, 119 U.S. 436, 7 S.Ct. 225, 30 L.Ed. 421 (1886), and Frisbie v. Collins, 342 U.S. 519, 72 S.Ct. 509, 96 L.Ed. 541 (1952)) … Accordingly, we find no merit to Bout’s claim that his indictment should have been dismissed because he was improperly extradited to the United States.” [731 F.3d at 239-240] (footnote omitted)

The Court concludes that:

(1) In the absence of actual animus or shocking conduct such as coercion or a violation of defendant’s person, an international sting operation like the one in this case does not constitute either vindictive prosecution or outrageous government conduct.

(2) The U.S. Government’s application of “coercive political pressure” on a foreign government to secure a defendant’s extradition does not render that defendant’s prosecution improper.

Citation: United States v. Bout, 731 F.3d 233 (2d Cir. 2013).

HEAD OF STATE IMMUNITY

District of Columbia Circuit affirms dismissal of lawsuit against sitting President of Sri Lanka; head of state immunity is established under common law and the TVPA did not abrogate that common law immunity

The Plaintiffs in the following case filed a lawsuit in the U.S. District Court for the District of Columbia based on the Torture Victim Protection Act (TVPA), 28 U.S.C. Section 1350 note, against the sitting President Rajapaksa of Sri Lanka. The U.S. Department of State filed a “Suggestion of Immunity” based on Rajapaksa’s current status, regardless of the merits of the Plaintiffs’ case. The “Suggestion of Immunity” stated, in relevant part:

“6. … [C]ourts have also routinely deferred to the Executive Branch’s immunity determinations concerning sitting heads of state. See Ye v. Jiang Zemin, 383 F.3d 620, 626 (7th Cir. 2004) (‘The obligation of the Judicial Branch is clear — a determination by the Executive Branch that a foreign head of state is immune from suit is conclusive and a court must accept such a determination without reference to the underlying claims of a plaintiff.’) …”

“When the Executive Branch suggests the immunity of a sitting head of state, judicial deference to that suggestion is predicated on compelling considerations arising out of the Executive Branch’s authority to conduct foreign affairs under the Constitution.”

“ ... Judicial deference to the Executive Branch in these matters, the court of appeals noted, is ‘motivated by the caution we believe appropriate of the Judicial Branch when the conduct of foreign affairs is involved.’ …”

“… As noted above, in no case has a court subjected a sitting head of state to suit after the Executive Branch has suggested the head of state’s immunity.”

“7. Under the customary international law principles accepted by the Executive Branch, head of state immunity attaches to a head of state’s status as the current holder of the office. After a head of state leaves office, however, that individual generally retains residual immunity only for acts taken in an official capacity while in that position. See 1 Oppenheim’s International Law 1043–44 (Robert Jennings & Arthur Watts eds., 9th ed. 1996). In this case, because the Executive Branch has determined that President Rajapaksa, as the sitting head of a foreign state, enjoys head of state immunity from the jurisdiction of U.S. courts in light of his current status, President Rajapaksa is entitled to immunity from the jurisdiction of this Court over this suit.” (Case 1:11-cv-00235-CKK Document 12, filed 01/13/12, footnote omitted).

The District Court thus dismissed the case. The Plaintiffs appeal, claiming that Rajapaksa is not immune from a civil suit based on the TVPA. The U.S. Court of Appeals, in a per curiam opinion, affirms the District Court.

“… In [Samantar v. Yousuf, ___ U.S. ___, 130 S.Ct. 2278, 2284, 176 L.Ed.2d 1047 (2010)], the Court explained that ‘a two-step procedure developed for resolving a foreign state’s claim of sovereign immunity,’ and that ‘the same two-step procedure was typically followed when a foreign official asserted immunity.’ Id. at 2284-85. Under the first step of that procedure, the only one that is relevant here, ‘the diplomatic representative of the sovereign could request a `suggestion of immunity’ from the State Department,’ and ‘[i]f the request was granted, the district court surrendered its jurisdiction.’ Id. at 2284; …. Here, the defendant did request a suggestion of immunity, and the United States granted that request by submitting a suggestion of immunity to the court. Accordingly, as the district court recognized, it was without jurisdiction, …. unless Congress intended the TVPA to supersede the common law.”

“ … ‘In order to abrogate a common-law principle, the statute must ‘speak directly’ to the question addressed by the common law.’ United States v. Texas, 507 U.S. 529, 534, 113 S.Ct. 1631, 123 L.Ed.2d 245 (1993) … Whether or not legislative history would be sufficient to satisfy the requirement of speaking ‘directly,’ the plaintiffs’ view is that the legislative history of the TVPA is ambiguous on the subject of head of state immunity. In fact, if anything the legislative history appears to indicate that Congress expected the common law of head of state immunity to apply in TVPA suits. See H.R. REP. NO. 102-367, at 5 (1991), 1992 U.S.C.C.A.N. 84, 88 (‘[N]othing in the TVPA overrides the doctrines of diplomatic and head of state immunity.’).”

“This leaves only the language of the TVPA, which the plaintiffs contend supersedes the common law because it renders ‘an individual’ liable for damages in a civil action, and a head of state is ‘an individual.’ But as even the plaintiffs acknowledge, the term ‘an individual’ cannot be read to cover every individual; plaintiffs agree that both diplomats and visiting heads of state retain immunity when they visit the United States. …. We … conclude that the common law of head of state immunity survived enactment of the TVPA. … see Devi v. Rajapaksa, No. 12-4081 (2d Cir. Jan. 30, 2013) (holding that the defendant, who is the same defendant as in this case, ‘clearly is entitled to head-of-state immunity’).”

“Because, as a consequence of the State Department’s suggestion of immunity, the defendant is entitled to head of state immunity under the common law while he remains in office, and because the TVPA did not abrogate that common law immunity, the judgment of the district court dismissing the plaintiffs’ complaint is affirmed.” [711 F.3d at 179-180]

Citation: Manoharan v. Rajapaksa, 711 F.3d 178 (D.C. Cir. 2013).

HUMAN RIGHTS

European Court of Human Rights dismisses case against Russia over World War II massacre in Katyn of more than 20,000 Polish prisoners

The European Court of Human Rights (ECHR or “Court”) has dismissed the case against Russia over the massacre of more than 20,000 Polish officers and other prisoners in 1940. This case is important as it is the first to address the temporal applicability of the 1950 European Convention on Human Rights (“Convention”). Here, the events at issue took place before the creation of the Convention. Russia ratified the Convention only in 1998.

In April and May of 1940, Soviet forces detained Polish officers, policemen, and many others. The Soviet secret police (NKVD) (“People’s Commissariat for Internal Affairs”) executed these prisoners in Katyn forest and other locations, and buried the bodies in mass graves. German officials publicized the massacre in 1943 but Soviet authorities blamed the massacre on German forces.

The Soviet Union finally admitted responsibility for the massacre in 1990 and began investigating, but never identified any Russian participants. The Russian investigation ended in 2004 with 36 of the 183 case files being classified “top secret,” including the last report on the matter. Relatives of some of the victims, after unsuccessfully pressing for information in Russia, presented their claims to the ECHR arguing, among other things, that Russia had failed to conduct an effective investigation and showed a “dismissive attitude” towards the matter.

In sum, the ECHR held that:

By a majority, that the ECHR may not examine the complaints under Article 2 (Right to Life) of the Convention. The events at issued occurred before the adoption of the Convention in 1950 and before Russia’s ratification of the Convention in 1998;

By a majority, that there had not been a violation of Article 3 (Prohibition of Torture, prohibition of inhuman or degrading treatment) of the Convention. By the time the Convention entered into force for Russia, the massacre had become a historical fact and there was no uncertainty about the prisoners’ fate; and

Unanimously, that Russia had failed to comply with its obligations under Article 38 (Examination of the Case, obligation to furnish necessary facilities for examination of the case) of the Convention. Member States must comply with requests for evidence, but Russia failed to provide the classified decision why it discontinued its investigation of the massacre.

Article 2 (Right to Life) Issues: No ECHR Competence to Examine the Complaint under Article 2 of the Convention (Paras. 102-161) (thirteen to four votes)

Whether the ECHR can examine Russia’s investigation into the events requires a “genuine connection” between the events and the entry into force of the Convention.

The Majority relied on the test developed by the 2009 case of Silih v. Slovenia (Application no. 71463/01), which arguably permits the ECHR to consider matters that occurred before a state’s ratification of the Convention. However, such review is only for procedural acts and omissions that occurred after the state’s ratification. Furthermore, there must be a “genuine connection” between the alleged act and the entry into force of the Convention. See Paras. 103 et seq. Thus, significant parts of the investigation must take place after the state’s ratification of the Convention.

Applying Silih, the Majority finds that the 58-year lapse between the massacre and Russia’s ratification of the Convention is unprecedented in the Court’s jurisprudence. There was no “genuine connection” between the deaths and the entry into force of the Convention for Russia.

The Majority opined that the crimes at issue have no statute of limitations, but that does not impose an “unceasing obligation to investigate” upon the state. See the Convention on Non-Applicability of Statutory Limitations to War Crimes and Crimes Against Humanity (26 November 1968).

Adding to the test first formulated in Silih, the Majority notes that an obligation to investigate war crimes that occurred in the past exists only if some new information becomes available after the “critical date.” See Becknell v. the UK, Application no. 32457/04, paras. 66-67. Such information must have the potential to either undermine the conclusions of an earlier investigation or to allow an earlier inconclusive investigation to be pursued further. Here, the Majority found that not to be the case, as critical documents were published by the Russian State Archives in 1992, six years before Russia ratified the Convention (see Paras. 134-140). In the words of the ECHR:

“(b) The ‘genuine connection’ test”

“145. The first sentence of paragraph 163 of the Šilih judgment posits that the existence of a ‘genuine connection’ between the triggering event and the entry into force of the Convention in respect of the respondent State is a condition sine qua non for the procedural obligation under Article 2 of the Convention to come into effect.”

“146. The Court considers that the time factor is the first and most crucial indicator of the ‘genuine’ nature of the connection. It notes … that the lapse of time between the triggering event and the critical date must remain reasonably short if it is to comply with the ‘genuine connection’ standard. Although there are no apparent legal criteria by which the absolute limit on the duration of that period may be defined, it should not exceed ten years (see, by analogy, Varnava and Others, cited above, § 166, and Er and Others v. Turkey, no. 23016/04, §§ 59-60, ECHR 2012 (extracts)). Even if, in exceptional circumstances, it may be justified to extend the time-limit further into the past, it should be done on condition that the requirements of the ‘Convention values’ test have been met.”

“147. The duration of the time period between the triggering event and the critical date is however not decisive, in itself, for determining whether the connection was a ‘genuine’ one. As the second sentence of paragraph 163 of the Šilih judgment indicates, the connection will be established if much of the investigation into the death took place or ought to have taken place in the period following the entry into force of the Convention. This includes the conduct of proceedings for determining the cause of the death and holding those responsible to account, as well as the undertaking of a significant proportion of the procedural steps that were decisive for the course of the investigation. This is a corollary of the principle that the Court’s jurisdiction extends only to the procedural acts and omissions occurring after the entry into force. If, however, a major part of the proceedings or the most important procedural steps took place before the entry into force, this may irretrievably undermine the Court’s ability to make a global assessment of the effectiveness of the investigation from the standpoint of the procedural requirements of Article 2 of the Convention.”

“148. Having regard to the above, the Court finds that, for a ‘genuine connection’ to be established, both criteria must be satisfied: the period of time between the death as the triggering event and the entry into force of the Convention must have been reasonably short, and a major part of the investigation must have been carried out, or ought to have been carried out, after the entry into force.”

“(c) The ‘Convention values’ test”

“149. The Court further accepts that there may be extraordinary situations which do not satisfy the ‘genuine connection’ standard as outlined above, but where the need to ensure the real and effective protection of the guarantees and the underlying values of the Convention would constitute a sufficient basis for recognising the existence of a connection. The last sentence of paragraph 163 of the Šilih judgment does not exclude such an eventuality, which would operate as an exception to the general rule of the ‘genuine connection’ test. In all the cases outlined above the Court accepted the existence of a ‘genuine connection’ as the lapse of time between the death and the critical date was reasonably short and a considerable part of the proceedings had taken place after the critical date. Against this background, the present case is the first one which may arguably fall into this other, exceptional, category. Accordingly, the Court must clarify the criteria for the application of the ‘Convention values’ test.”

“150. Like the Chamber, the Grand Chamber considers the reference to the underlying values of the Convention to mean that the required connection may be found to exist if the triggering event was of a larger dimension than an ordinary criminal offence and amounted to the negation of the very foundations of the Convention. This would be the case with serious crimes under international law, such as war crimes, genocide or crimes against humanity, in accordance with the definitions given to them in the relevant international instruments.”

“151. The heinous nature and gravity of such crimes prompted the contracting parties to the Convention on the Non-Applicability of Statutory Limitations to War Crimes and Crimes Against Humanity to agree that they must be imprescriptible and not subject to any statutory limitation in the domestic legal order. The Court nonetheless considers that the ‘Convention values’ clause cannot be applied to events which occurred prior to the adoption of the Convention, on 4 November 1950, for it was only then that the Convention began its existence as an international human rights treaty. Hence, a Contracting Party cannot be held responsible under the Convention for not investigating even the most serious crimes under international law if they predated the Convention. Although the Court is sensitive to the argument that even today some countries have successfully tried those responsible for war crimes committed during the Second World War, it emphasises the fundamental difference between having the possibility to prosecute an individual for a serious crime under international law where circumstances allow it, and being obliged to do so by the Convention.”

“4. Application of the above principles to the present case”

“152. Turning to the undisputed facts of the present case, the Court recalls that the applicants’ relatives were servicemen in the Polish Army who had been taken prisoner in the wake of the Soviet invasion of the territory of eastern Poland in September 1939. During the following months they were detained in the NKVD camps in the western part of the USSR, in Kozelsk, Ostashkov and Starobelsk.”

“153. On 5 March 1940, acting on the proposal of the NKVD head, the members of the Politburo of the Central Committee of the Communist Party of the USSR approved the extrajudicial execution of Polish prisoners of war, which was to be carried out by NKVD officers. The prisoners were killed and buried in mass graves on various dates in April and May 1940. The lists of prisoners for execution were drawn up on the basis of the NKVD ‘dispatch lists’, on which the names of the applicants’ family members were mentioned among others.” […]

“155. It is undisputed - and the NKVD’s ‘dispatch lists’ furnish documentary evidence to that effect - that in late 1939 and early 1940 the applicants’ family members were in custody in Soviet territory and under the full and exclusive control of the Soviet authorities. The Politburo’s decision of 5 March 1940 stipulated that all Polish prisoners of war being held in the NKVD camps, without exception, were liable to extrajudicial execution, which was carried out by the Soviet secret police in the following months. Mass burials of prisoners wearing Polish uniforms were uncovered in the Katyn Forest as early as 1943, following the German takeover of the territory. A note written in 1959 by the head of the KGB, a successor to the NKVD, acknowledged that a total of more than twenty-one thousand Polish prisoners had been shot by NKVD officials. The families stopped receiving correspondence from the prisoners in 1940 and have not received any news from them ever since, that is, for more than seventy years.”

“156. Having regard to these factual elements, the Court concludes that the applicants’ family members who were taken prisoner in 1939 must be presumed to have been executed by the Soviet authorities in 1940.”

“157. The Russian Federation ratified the Convention on 5 May 1998, that is, fifty-eight years after the execution of the applicants’ relatives. The Grand Chamber endorses the Chamber’s finding that the period of time between the death and the critical date is not only many times longer than those which triggered the coming into effect of the procedural obligation under Article 2 in all previous cases, but also too long in absolute terms for a genuine connection to be established between the death of the applicants’ relatives and the entry into force of the Convention in respect of Russia.”

“158. The investigation into the origin of the mass burials started in 1990 and was formally terminated in September 2004. Even though the Russian Government argued that the initial decision to institute the proceedings had been unlawful, those proceedings were, at least in theory, capable of leading to the identification and punishment of those responsible. Accordingly, they fell within the scope of ‘procedural acts and omissions’ for the purposes of Article 2 of the Convention.”

“159. In the early 1990s a significant number of procedural steps were undertaken by the Soviet and subsequently the Russian authorities. Corpses were excavated at the mass burial sites in Kharkov, Mednoye and Katyn in 1991 and the investigators commissioned forensic studies and arranged interviews with potential witnesses to the killings. Official visits and coordination meetings were held between the Russian, Polish, Ukrainian and Belarusian authorities. However, all these steps took place before the critical date. As regards the post-entry into force period, it is impossible, on the basis of the information available in the case file and in the parties’ submissions, to identify any real investigative steps after 5 May 1998. The Court is unable to accept that a re-evaluation of the evidence, a departure from previous findings or a decision regarding the classification of the investigation materials could be said to have amounted to the ‘significant proportion of the procedural steps’ which is required for establishing a ‘genuine connection’ for the purposes of Article 2 of the Convention. Nor has any relevant piece of evidence or substantive item of information come to light in the period since the critical date. That being so, the Court concludes that neither criterion for establishing the existence of a ‘genuine connection’ has been fulfilled.”

“160. Finally, it remains to be determined whether there were exceptional circumstances in the instant case which could justify derogating from the ‘genuine connection’ requirement by applying the Convention values standard. As the Court has established, the events that might have triggered the obligation to investigate under Article 2 took place in early 1940, that is, more than ten years before the Convention came into existence. The Court therefore upholds the Chamber’s finding that there were no elements capable of providing a bridge from the distant past into the recent post-entry into force period.”

“161. Having regard to the above considerations, the Court upholds the Government’s objection ratione temporis and finds that it has no competence to examine the complaint under Article 2 of the Convention.”

Article 3 (Prohibition of Torture) Issues: No Violation of Article 3 of the Convention (Paras. 162-189) (twelve to five votes)

There was no violation of Article 3. The ECHR acknowledges that the suffering of family members of a disappeared person might trigger an Article 3 violation when the authorities are indifferent. Here, however, the ECHR only has jurisdiction beginning in 1998 with the entry into force of the Convention for Russia. At that time, there was no uncertainty about the Polish prisoners, and their deaths were directly or indirectly confirmed. As the ECHR explains:

“185. By the time the Convention was ratified by the Russian Federation on 5 May 1998, more than fifty-eight years had passed since the execution of the Polish prisoners of war. Having regard to the long lapse of time, to the material that came to light in the intervening period and to the efforts that were deployed by various parties to elucidate the circumstances of the Katyn massacre, the Court finds that, as regards the period after the critical date, the applicants cannot be said to have been in a state of uncertainty as to the fate of their relatives who had been taken prisoner by the Soviet Army in 1939. It necessarily follows that what could initially have been a ‘disappearance’ case must be considered to be a ‘confirmed death’ case. The applicants acquiesced in that assessment of the present case (see, in particular, paragraph 116 above and also paragraph 119 of the Chamber judgment). …”

“186. The Court does not question the profound grief and distress that the applicants have experienced as a consequence of the extrajudicial execution of their family members. However, it reiterates that it is in the interest of legal certainty, foreseeability and equality before the law that it should not depart from its own precedents without compelling reason (see Sabri Güne v. Turkey [GC], no. 27396/06, § 50, 29 June 2012). The Court’s case-law, as outlined above, has accepted that the suffering of family members of a ‘disappeared person’ who have to go through a long period of alternating hope and despair may justify finding a separate violation of Article 3 on account of the particularly callous attitude of the domestic authorities to their quest for information. As regards the instant case, the Court’s jurisdiction extends only to the period starting on 5 May 1998, the date of entry into force of the Convention in respect of Russia. The Court has found above that as from that date, no lingering uncertainty as to the fate of the Polish prisoners of war could be said to have remained. Even though not all of the bodies have been recovered, their death was publicly acknowledged by the Soviet and Russian authorities and has become an established historical fact. The magnitude of the crime committed in 1940 by the Soviet authorities is a powerful emotional factor, yet, from a purely legal point of view, the Court cannot accept it as a compelling reason for departing from its case-law on the status of the family members of ‘disappeared persons’ as victims of a violation of Article 3 and conferring that status on the applicants, for whom the death of their relatives was a certainty.”

“187. The Court further finds no other special circumstances of the kind which have prompted it to find a separate violation of Article 3 in ‘confirmed death’ cases (see the case-law cited in paragraph 181 above).”

“188. In such circumstances, the Court considers that it cannot be held that the applicants’ suffering reached a dimension and character distinct from the emotional distress which may be regarded as inevitably caused to relatives of victims of a serious human rights violation.”

“189. Accordingly, the Court finds no violation of Article 3 of the Convention.”

Article 38 (Examination of the Case) Issues: Russia Failed to Comply with Obligations of Article 38 of the Convention (Paras. 190-216) (unanimous)

The Russian Government did not provide the ECHR with its September 2004 decision to discontinue the Katyn investigation. In fact, Russia classified that decision, and several of the investigation files, as “top secret.”

“207. In giving notice of the two applications at the origin of the instant case to the respondent Government, the Court put a number of questions to the parties and requested the Government to produce a copy of the decision of 21 September 2004 relating to the discontinuation of the proceedings in criminal case no. 159. The Government refused to provide it, citing its top-secret classification at domestic level. On 5 July 2011 the Court adopted a partial admissibility decision, invited the parties to submit any additional material which they wished to bring to its attention, and also put a question regarding the Government’s compliance with their obligations under Article 38 of the Convention. The Government did not submit a copy of the requested decision. In the proceedings before the Grand Chamber, on 30 November 2012 and 17 January 2013, the Government submitted a number of additional documents which, however, did not include a copy of the decision of 21 September 2004 that had been requested.”

“208. The Court reiterates that Article 38 of the Convention requires the Contracting States to furnish all necessary facilities to the Court, whether it is conducting a fact-finding investigation or performing its general duties as regards the examination of applications. Being master of its own procedure and of its own rules, the Court has complete freedom in assessing not only the admissibility and the relevance but also the probative value of each item of evidence before it. … The parties are obliged to comply with its evidential requests and instructions, provide timely information on any obstacles in complying with them and provide any reasonable or convincing explanations for failure to comply (see Davydov and Others, cited above, § 174; Nevmerzhitsky v. Ukraine, no. 54825/00, § 77, ECHR 2005-II (extracts); and Ireland v. the United Kingdom, 18 January 1978, § 210, Series A no. 25) …”

“209. As regards the allegedly derivative nature of the obligation to furnish all necessary facilities for its investigation, flowing from Article 38 of the Convention, the Court reiterates that this obligation is a corollary of the undertaking not to hinder the effective exercise of the right of individual application under Article 34 of the Convention. Indeed, the effective exercise of this right may be thwarted by a Contracting Party’s failure to assist the Court in conducting an examination of all circumstances relating to the case, including in particular by not producing evidence which the Court considers crucial for its task. Both provisions work together to guarantee the efficient conduct of the judicial proceedings and they relate to matters of procedure rather than to the merits of the applicants’ grievances under the substantive provisions of the Convention or its Protocols. Although the structure of the Court’s judgments traditionally reflects the numbering of the Articles of the Convention, it has also been customary for the Court to examine the Government’s compliance with their procedural obligation under Article 38 of the Convention at the outset, especially if negative inferences are to be drawn from the Government’s failure to submit the requested evidence (see, among other cases, Shakhgiriyeva and Others v. Russia, no. 27251/03, §§ 134-140, 8 January 2009; Utsayeva and Others v. Russia, no. 29133/03, §§ 149-153, 29 May 2008; Zubayrayev v. Russia, no. 67797/01, §§ 74-77, 10 January 2008; and Tangiyeva, cited above, §§ 73-77). … Furthermore, it is not required that the Government’s alleged interference should have actually restricted, or had any appreciable impact on, the exercise of the right of individual petition (see McShane v. the United Kingdom, no. 43290/98, § 151, 28 May 2002). The Court reaffirms that the Contracting Party’s procedural obligations under Articles 34 and 38 of the Convention must be enforced irrespective of the eventual outcome of the proceedings and in such a manner as to avoid any actual or potential chilling effect on the applicants or their representatives.”

“210. Turning to the justification advanced by the Government for their failure to produce a copy of the requested decision, the Court observes that it focused on the fact that the decision had been lawfully classified at domestic level and that the existing laws and regulations prevented the Government from communicating classified material to international organisations in the absence of guarantees as to its confidentiality.”

“211. The Court reiterates that it has already found in another case against Russia that a mere reference to the structural deficiency of the domestic law which rendered impossible communication of sensitive documents to international bodies is an insufficient explanation to justify the withholding of information requested by the Court … It has also previously rejected similar objections from the Russian Government relating to the alleged lack of safeguards in the Court’s procedure guaranteeing the confidentiality of documents or imposing sanctions on foreign nationals for a breach of confidentiality … The Court reiterates in this connection that the Convention is an international treaty which, in accordance with the principle of pacta sunt servanda codified in Article 26 of the Vienna Convention on the Law of Treaties, is binding on the Contracting Parties and must be performed by them in good faith. Pursuant to Article 27 of the Vienna Convention, the provisions of internal law may not be invoked as justification for a failure by the Contracting State to abide by its treaty obligations. In the context of the obligation flowing from the text of Article 38 of the Convention, this requirement means that the respondent Government may not rely on domestic legal impediments, such as the absence of a special decision by a different agency of the State, to justify a failure to furnish all the facilities necessary for the Court’s examination of the case. It has been the Court’s constant position that Governments are answerable under the Convention for the acts of any State agency since what is in issue in all cases before the Court is the international responsibility of the State (see Lukanov v. Bulgaria, 20 March 1997, § 40, Reports 1997-II).”

“212. Even though in the Grand Chamber proceedings the Government submitted copies of the judgments issued by the domestic courts in the declassification proceedings, these did not make any more apparent the exact nature of the security concerns that informed the decision to classify a portion of the materials in the criminal case file, including the decision of 21 September 2004 requested by the Court. It has become clear that the classification decision was not made by the Chief Military Prosecutor’s Office of its own initiative but rather on the basis of the opinion of some officials from the Federal Security Service, which had ‘the right to dispose as it saw fit of the information reproduced in the Chief Military Prosecutor’s decision’. It was also stated that the decision of 21 September 2004 contained information ‘in the field of intelligence, counterintelligence and operational and search activities’, without further elaboration …”

“213. The Court reiterates that the judgment by the national authorities in any particular case that national security considerations are involved is one which it is not well equipped to challenge. However, even where national security is at stake, the concepts of lawfulness and the rule of law in a democratic society require that measures affecting fundamental human rights must be subject to some form of adversarial proceedings before an independent body competent to review the reasons for the decision and the relevant evidence. If there was no possibility to challenge effectively the executive’s assertion that national security was at stake, the State authorities would be able to encroach arbitrarily on rights protected by the Convention (see Liu, cited above, §§ 85-87, and Al-Nashif v. Bulgaria, no. 50963/99, §§ 123 and 124, 20 June 2002).”

“214. … The national courts did not subject to any meaningful scrutiny the executive’s assertion that information contained in that decision should be kept secret more than seventy years after the events. They confined the scope of their inquiry to ascertaining that the classification decision had been issued within the administrative competence of the relevant authorities, without carrying out an independent review of whether the conclusion that its declassification constituted a danger to national security had a reasonable basis in fact. The Russian courts did not address in substance … [the] argument that the decision brought to an end the investigation into a mass murder of unarmed prisoners, that is, one of the most serious violations of human rights committed on orders from the highest-ranking Soviet officials … Finally, they did not perform a balancing exercise between the alleged need to protect the information owned by the Federal Security Service, on the one hand, and the public interest in a transparent investigation into the crimes of the previous totalitarian regime and the private interest of the victims’ relatives in uncovering the circumstances of their death, on the other hand. Given the restricted scope of the domestic judicial review of the classification decision, the Court is unable to accept that the submission of a copy of the decision of 21 September 2004, as it had requested, could have affected Russia’s national security.”

“215. The Court emphasises, lastly, that legitimate national security concerns may be accommodated in its proceedings by means of appropriate procedural arrangements, including restricted access to the document in question under Rule 33 of the Rules of Court and, in extremis, the holding of a hearing behind closed doors. Although the Russian Government were fully aware of those possibilities, they did not request the application of such measures, even though it is the responsibility of the party requesting confidentiality to make and substantiate such a request.”

“216. Accordingly, the Court considers that in the present case the respondent State failed to comply with their obligations under Article 38 of the Convention on account of their refusal to submit a copy of the document requested by the Court.”

Citation: European Court of Human Rights, Case of Janowiec and Others v. Russia

(Applications nos. 55505/07 and 29520/09), [2013] ECHR 1003 (21 October 2013), available at www.echr.coe.int. Numerous press releases and articles discuss this case, for example press release “The Court delivers its Grand Chamber judgment in the Janowiec and Others case,” ECHR press release ECHR 306 (2013) (21.10.2013); The Moscow Times, “Katyn Massacre Case Thrown Out by Human Rights Court,” October 21, 2013, available at www.themoscowtimes.com; “Court makes final ruling on World War Two Katyn massacre complaint,” October 21, 2013, available at

www.humanrightseurope.org.

JURISDICTION

Second Circuit finds that New York has jurisdiction over foreign bank that does not do business in New York but has used New York correspondent bank account for dozens of transactions that may be related to the underlying facts

The Plaintiffs in the following case are victims, and relatives of victims, of rocket attacks on Israel that occurred in July and August of 2006. These attacks were purportedly carried out by the Hezbollah organization. Defendant Lebanese Canadian Bank, SAL (“LCB”) does not do business in the U.S. directly, but uses a correspondent bank account at American Express Ltd., held by the Shahid Foundation, for U.S.-dollar-denominated transactions. The Plaintiffs claim that LCB used this U.S. bank account for transactions on behalf of Hezbollah and thereby enabled it to carry out the 2006 attacks.

The U.S. District Court for the Southern District of New York dismissed the case for lack of personal jurisdiction. A defendant is subject to personal jurisdiction in New York under N.Y. C.P.L.R. 302(a)(1) if the (1) the defendant transacted business within the state, and (2) the claim arises from that business activity.

On appeal, the U.S. Court of Appeals for the Second Circuit sought clarification regarding New York’s long-arm statute from the New York Court of Appeals. It certified the following two questions (see 732 F.2d at 167):

(1) Does a foreign bank’s maintenance of a correspondent bank account at a financial institution in New York, and use of that account to effect “dozens” of wire transfers on behalf of a foreign client, constitute a “transact[ion]” of business in New York within the meaning of N.Y. C.P.L.R. § 302(a)(1)?

(2) If so, do the plaintiffs’ claims under the Anti-Terrorism Act, the ATS, or for negligence or breach of statutory duty in violation of Israeli law, “aris[e] from” LCB’s transaction of business in New York within the meaning of N.Y. C.P.L.R. § 302(a)(1)?

In response, the New York Court of Appeals explained that:

“… Transacting Business. … Amigo Foods Corp. v. Marine Midland Bank-N.Y., 39 N.Y.2d 391, 348 N.E.2d 581, 384 N.Y.S.2d 124 (1976), stands for the proposition that the use of a New York correspondent bank account, standing alone, may be considered a ‘transaction of business’ under the long-arm statute if the defendant’s use of the correspondent account was purposeful. … [W]hether a defendant has purposefully availed itself of the New York forum is a fact-intensive inquiry inasmuch as it requires the trial court, in the first instance, to ‘closely examine the defendant’s contacts for their quality.’ … As a general matter, however,”

“‘complaints alleging a foreign bank’s repeated use of a correspondent account in New York on behalf of a client — in effect, a ‘course of dealing’ — show purposeful availment of New York’s dependable and transparent banking system, the dollar as a stable and fungible currency, and the predictable jurisdictional and commercial law of New York and the United States.’” […]

“With respect to LCB’s contacts with New York, … both the frequency and deliberate nature of LCB’s use of its correspondent account [are] determinative. … LCB used its New York correspondent account ‘dozens’ of times ‘to effect its support of Shahid and shared terrorist goals,’ not ‘once or twice by mistake.’ … [T]his conduct ‘indicates desirability and a lack of coincidence,’ … that is, it reflects LCB’s purposeful availment of the privilege of doing business in the New York forum.”

“… Claims ‘Arising From’ a Transaction of Business. [T]he ‘arising from’ prong of section 302(a)(1) does not require a causal link between the defendant’s New York business activity and a plaintiff’s injury. Instead, it requires ‘a relatedness between the transaction and the legal claim such that the latter is not completely unmoored from the former, regardless of the ultimate merits of the claim.’ … [W]hether a plaintiff’s claim arises from a defendant’s New York contacts depends upon ‘the nature and elements of the particular causes of action pleaded.’ … However, section 302(a)(1) ‘does not require that every element of the cause of action pleaded must be related to the New York contacts; rather, where at least one element arises from the New York contacts, the relationship between the business transaction and the claim asserted supports specific jurisdiction under the statute.’ …”

“… Because the defendant’s allegedly culpable conduct stems from this use of the New York correspondent account, the … plaintiffs’ claims are sufficiently related to LCB’s New York business activity to satisfy the second prong of section 302(a)(1). …” [732 F.3d at 168-169]

Therefore, the Plaintiffs have made a prima facie showing that the District Court may exercise personal jurisdiction over LCB. The remaining issue is thus whether the District Court’s exercise of personal jurisdiction meets the due process requirements.

The U.S. Court of Appeals for the Second Circuit concludes that the exercise of personal jurisdiction over LCB does in fact comport with due process protections. The Court therefore vacates the District Court’s dismissal for lack of personal jurisdiction.

“Our analysis typically proceeds in two steps. First, we ‘evaluate the quality and nature of the defendant’s contacts with the forum state under a totality of the circumstances test.’ … ‘Where the claim arises out of, or relates to, the defendant’s contacts with the forum — i.e., specific jurisdiction [is asserted] — minimum contacts [necessary to support such jurisdiction] exist where the defendant purposefully availed itself of the privilege of doing business in the forum and could foresee being haled into court there.’ ….” [732 F.3d at 170]

“… Minimum Contacts. The jurisdictional basis for the plaintiffs’ claims is LCB’s execution of dozens of dollar-denominated wire transfers through its AmEx correspondent account in New York. These wire transfers are a part of the principal wrong at which the plaintiffs’ lawsuit is directed inasmuch as they allege that ‘LCB carried out the ... [t]ransfers as a matter of official LCB policy, in order to assist and advance Hizbollah’s terrorist activities against Jews in Israel’ in violation of various statutory duties. …”

“We conclude that the selection and repeated use of New York’s banking system, as an instrument for accomplishing the alleged wrongs for which the plaintiffs seek redress, constitutes ‘purposeful[] avail[ment] ... of the privilege of doing business in [New York],’ Bank Brussels Lambert, 305 F.3d at 127 (internal quotation marks omitted), so as to permit the subjecting of LCB to specific jurisdiction within the Southern District of New York consistent with due process requirements.” [732 F.3d at 170-171]

The Court cautions, however, that a foreign defendant’s mere maintenance of a correspondent bank account in the U.S. does not necessary create personal jurisdiction over the account-holder for any kind of controversy. In this case, the correspondent account at issue has allegedly been used as an instrument to achieve the alleged wrong.

“… Reasonableness. Where a defendant has purposefully directed its activities at the forum state, it may still defeat jurisdiction on due process grounds. To do so, however, it ‘must present a compelling case that the presence of some other considerations would render jurisdiction unreasonable.’ [Burger King Corp. v. Rudzewicz, 471 U.S. 462, 477] … In conducting this part of the due process inquiry, we focus on the factors we identified above [‘(1) the burden that the exercise of jurisdiction will impose on the defendant; (2) the interests of the forum state in adjudicating the case; [and] (3) the plaintiff’s interest in obtaining convenient and effective relief....’].”

“We recognize, of course, that LCB is based in Lebanon and that all of the plaintiffs, including those who are American citizens, reside in Israel; accordingly, many of the documents and witnesses relevant to this litigation are located abroad. But ‘the conveniences of modern communication and transportation ease’ any burden the defense of this case in New York might impose on LCB. …”

“It is true, moreover, that the injuries and deaths for which compensation is sought occurred in Israel. The claims, which are premised on LCB’s use of a correspondent account to support a terrorist organization, however, involve acts by banks in New York. And although not controlling, weighed in the balance is the United States’ and New York’s interest in monitoring banks and banking activity to ensure that its system is not used as an instrument in support of terrorism, money laundering, or other nefarious ends.” [732 F.3d at 173-174]

The Court concludes that the exercise of personal jurisdiction over LCB does not offend principles of fair play and substantial justice. Therefore, the exercise of personal jurisdiction over LCB is consistent with due process protections.

Citation: Licci v. Lebanese Canadian Bank, SAL, 732 F.3d 161 (2d Cir. 2013).

TOPICS IN BRIEF

European Union approves renewal Agreement between the U.S. and EU on the coordination of energy-efficient labelling programs for office equipment. The Council of the European Union has approved the “Agreement between the Government of the United States of America and the European Union on the coordination of energy efficiency labelling programmes for office equipment.” It supersedes the 2006 Agreement on the same subject. The purpose of the Agreement is to increase energy savings and environmental benefits through energy efficient office equipment such as computers. Both Parties will use a common set of energy-efficiency specifications and a common logo (“Energy Star” label, owned by the U.S. Environmental Protection Agency, EPA). Only the top 25 percent energy efficient models are to receive the “Energy Star” label. Manufacturers, vendors and resellers enter the Energy Star program by registering as a Program Participant.

 The management entities for the implementation of the Agreement are as follows: The EU designated for this purpose the EU Commission. The U.S. designated the EPA.

 The Agreement provides for a Technical Commission to review the implementation of the Agreement in both the EU and the U.S. The EU Commission will be EU representative in this Technical Commission (Title VII of the Agreement).

 The Annexes to the Agreement contain the official Energy Star logo, Guidelines for the proper use of the Energy Star name and logo, as well as the technical specifications the office equipment must meet to receive the Energy Star designation.

 The new Agreement will run through the year 2017.

 Citation: Council Decision … on the signing and conclusion of the Agreement between … the United States … and the European Union on the coordination of energy-efficiency labelling programmes for office equipment, 2013 O.J. of the European Union (L 63) 5. The text of the Agreement is in the same issue of the Official Journal, beginning at page 7. For information on EPA’s cooperation with the EU, including this Agreement, see the “International Programs” section of the EPA website at http://www.epa.gov/oita/regions/Europe/index.html.