2006 International Law Update, Volume 12, Number 6 (June)

2006 International Law Update, Volume 12, Number 6 (June)

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

EUROPEAN UNION

European Court of Justice annuls airplane passenger data agreement with U.S. for lack of an appropriate legal basis

On May 30, 2006, the European Court of Justice (ECJ) issued a decision that annuls the agreement that the European Union (EU) had reached regarding the transfer of airplane passenger data.

After September 11, 2001, the U.S. has required air carriers operating in the U.S. to provide U.S. authorities with data from their reservation and departure control systems (“Passenger Name Records, PNR). In 2004, the EU Commission found adequate safeguards for the passenger data on part of the United States Bureau of Customs and Border Protection (CBP), and the Council subsequently adopted “Decision 2004/496/EC on the conclusion of an Agreement between the European Community and the United States on the processing and transfer of PNR data by Air Carriers to the United States Department of Homeland Security, Bureau of Customs and Border Protection” (2004 O.J. (L 183) 83). The European Parliament then applied to the ECJ for annulment of the Council Decision and the Commission’s decision an data protection adequacy.

The ECJ agrees with the European Parliament and annuls both decisions. First, the ECJ reviews whether the Commission could validly find data protection adequacy based on Directive 95/46/EC on the protection of individuals with regard to the processing of personal data. Article 3(2) of the Directive provides that the Directive shall not apply to the processing of personal data in the course of an activity that falls outside the scope of EU law, such as public security, defense, State security, and State activities in the area of criminal law. In essence, the ECJ disagrees with the Commission’s and Council’s reliance on the Directive. The transfer of PNR data to CBP constitutes processing operations concerning public security and criminal law. This transfer falls with the public framework for public security. Yet, the data is collected by private entities.

“57 While the view may rightly be taken that PNR data are initially collected by airlines in the course of an activity which falls within the scope of Community law, namely sale of an aeroplane ticket which provides entitlement to a supply of services, the data processing which is taken into account in the decision on adequacy is, however, quite different in nature. As pointed out in paragraph 55 of the present judgment, that decision concerns not data processing necessary for a supply of services, but data processing regarded as necessary for safeguarding public security and for law-enforcement purposes.”

“58 The Court held in ... Lindqvist, which was relied upon by the Commission in its defence, that the activities mentioned by way of example in the first indent of Article 3(2) of the Directive are ... activities of the State or of State authorities and unrelated to the fields of activity of individuals. However, this does not mean that, because the PNR data have been collected by private operators for commercial purposes and it is they who arrange for their transfer to a third country, the transfer in question is not covered by that provision. The transfer falls within a framework established by the public authorities that relates to public security.”

“59 It follows from the foregoing considerations that the decision on adequacy concerns processing of personal data as referred to in the first indent of Article 3(2) of the Directive. That decision therefore does not fall within the scope of the Directive.”

“60 Accordingly, the first limb of the first plea, alleging that the first indent of Article 3(2) of the Directive was infringed, is well founded.”

Therefore, the Commission decision on adequacy does not fall within the scope of Directive 95/46/EC because it concerns the processing of personal data that is excluded from the scope of the Directive.

Second, as for the Council Decision, the ECJ finds that Article 95 EC on the harmonization of the internal market, read in conjunction with Article 25 of the Directive (transfer of personal data to non-member states) does not give the EU competence to conclude such an agreement. The data processing at issue is outside the scope of the Directive.

The ECJ leaves the agreement in effect until September 30, 2006, so that the EU may find a suitable legal basis.

Citation: European Court of Justice, Judgment of the Court (Grand Chamber), 30 May 2006, in Joined Cases C-317/04 and C-318-04; available on the court’s website at “curia.eu.int”; European Court of Justice Press Release No 46/06 (30 May 2006); BBC News report of 30 May 2006, 12.53 GMT.

EXTRADITION

On appeal from order denying petition for habeas corpus, Ninth Circuit decides that political offense exception under Extradition Treaty does not apply to bombing plot against Vietnamese embassy in Thailand

Van Duc Vo, a naturalized U. S. citizen born in Vietnam (Petitioner), belongs to the Government of Free Vietnam (GFVN). The GFVN seeks to dismantle the Communist dictatorship of the Socialist Republic of Vietnam, which in turn has linked the GFVN to several incidents of terrorism in Vietnam and elsewhere. In October 2001, U. S. authorities arrested Petitioner in California for his part in an attempted bombing at the Vietnamese embassy in Bangkok, Thailand earlier that year.

The U.S. ratified a Treaty Relating to Extradition with Thailand which entered into force in May, 1991. Pursuant to the Treaty, the government of Thailand requested that the U. S. extradite Petitioner. After a hearing, a Magistrate Judge certified Thailand’s request for extradition to the Secretary of State. Petitioner asked the district court for a stay and for a writ of habeas corpus, but the district court denied his petitions. He noted a timely appeal from the district court’s order, contending that the alleged bombing plot constituted a nonextraditable “political offense.”

As is typical of extradition treaties, Article 3 of the U.S.-Thai Treaty provides that neither party shall grant extradition when a the other asks seeks extradition for a political offense. For a crime to qualify for the political offense exception, there must be “the occurrence of an uprising” and the charged offense must be ‘incidental to’ the uprising. See Quinn v. Robinson, 783 F.2d 776, 797 (9th Cir. 1986).

In a May 22 opinion, the U.S. Court of Appeals for the Ninth Circuit rejects Petitioner’s claim that the bombing plot was incidental to a political uprising against the Vietnamese government.

“The political offense exception was designed to protect those engaged in internal or domestic struggles over the form or composition of their own government, including, of course, struggles to displace an occupying power.” Quinn, supra at 807.

First, this Court finds that the degree of violence in Vietnam at the time of Petitioner’s conduct does not reach the level necessary to characterize it as an “uprising.” Second, the Court concludes that Petitioner would not qualify for the political offense exception because his alleged crime did not take place “within the country or territory in which those rising up reside,” as required by Article 3. This geographical limitation ensures that the political offense exception will not end up protecting international terrorism.

The appellate Court also spurns Petitioner’s due process claim. His argument rested mainly on Article 5(2) of the Extradition Treaty, which permits the U. S. to refuse to extradite an individual if it has proceeded against the individual for the offense for which extradition is requested. According to Petitioner, the Magistrate Judge had violated his due process rights by failing to make a finding as to whether the U. S. had “proceeded against” him.

Since an extradition court has no authority to make a discretionary decision, its failure to construe the Treaty in order to aid the Secretary of State in the exercise of her discretion did not deprive Petitioner of due process. “An extradition court exercises very limited authority in the overall process of extradition. Its role is limited to determining an individual’s eligibility to be extradited, which it does by ascertaining whether a crime is extraditable under the relevant treaty and whether probable cause exists to sustain the charge. If those requirements are met, it is required to certify the individual as extraditable to the Secretary of State. After an extradition magistrate certifies that an individual can be extradited, it is the Secretary of State, representing the Executive Branch, who ultimately decides whether to surrender the fugitive to the requesting country.” [1245].

Citation: Vo v. Benov, 447 F.3d 1235 (9th Cir. 2006).

EXTRADITION

Ninth Circuit reverses district court’s denial of habeas relief holding that extraditing country’s sentence limitations in its extradition decree may not be violated where treaty is recognized federal law and where extraditing country’s intent is clear

Cristobal Rodriguez Benitez (Petitioner), a Mexican citizen, murdered a man in San Diego, California and later fled to Caracas, Venezuela. In 1997, the United States requested his extradition to California, in accordance with a 1922 treaty with Venezuela. See Treaty of Extradition and Additional Article, 43 Stat. 1098, T.S. 675, 12 Beans 1128, 49 L.N.T.S. 435.

The Treaty provides that the Contracting Parties reserve the right to decline to grant extradition for crimes punishable by death or life imprisonment. In granting extradition, however, the Supreme Court of Venezuela further decreed that no American court may impose on Petitioner the death penalty, life imprisonment, or imprisonment for more than thirty years.

Upon his return, a California court tried and convicted Petitioner for murder, imposing an indeterminate sentence of fifteen years to life. Petitioner filed for a writ of habeas corpus, claiming that his sentence violated the extradition decree. The state courts denied Petitioner’s habeas petitions and the federal magistrate judge held that his federal petition was not yet ripe. The district court, however, found his claim to be ripe but it denied his petition, ruling that Petitioner had failed to show that his sentence violated clearly established federal law. Petitioner then took this appeal.

The U. S. Court of Appeals for the Ninth Circuit reverses and remands with directions to issue the Writ. It holds that the rights claimed by Petitioner pursuant to the Treaty are clearly established federal law. The sentence issued by the California Superior Court, however, contravenes these rights.

An extraditing country may expressly condition extradition, often in the form of limitations on punishment and the federal courts must enforce them. In this case, the state court had potentially sentenced the Petitioner to more than thirty years.

The Ninth Circuit reviews the denial of the Writ de novo and uses the Antiterrorism and Effective Death Penalty Act of 1996 (AEDPA) as its standard of review. “¼ Applying AEDPA, we may only grant the petition for habeas corpus if the state court decision was ‘(1) contrary to, or involved an unreasonable application of, clearly established Federal law, as determined by the Supreme Court of the United States; or (2) resulted in a decision that was based on an unreasonable determination of the facts in light of the evidence presented in the State Court proceeding.’” [Slip op. 3].

The Ninth Circuit preliminarily rejects the magistrate judge’s ruling that the petition was not yet ripe. The Venezuelan extradition decree limited not only the sentence Petitioner could actually serve, but also the sentence in the form entered against Petitioner, despite the possibility of parole before thirty years.

Since the U. S. had duly ratified the present Treaty, it became binding federal law under the Supremacy Clause. Furthermore, the Treaty’s unambiguous language and the surrounding facts indicate that the treaty is clearly established federal law. The Ninth Circuit concludes that “the state court’s application of the extradition treaty was an ‘unreasonable application of clearly established federal law.’” [Slip op. 4] (quoting Williams v. Taylor, 529 U.S. 362, 411 (2000)).

In addition to the extradition treaty, the only other potentially applicable sources of federal law are two Supreme Court cases, United States v. Rauscher, 119 U.S. 407 (1886) and Johnson v. Browne, 205 U.S. 309 (1907). Rauscher stands for the proposition that an extradited defendant can “only be tried for one of the offenses described in that [extradition] treaty.” This rule has become known as the doctrine of “speciality.” Petitioner, however, is not attacking the type of U.S. crimes charged, but merely his punishment.

“We hold that we can enforce limitations on punishments following the extradition of a defendant, but we may do so only if the contracting treaty nations agreed to such a limitation in the particular case.” [Slip op. 5]. Here, enough evidence exists to find that Venezuela had conditioned the extradition by limiting the punishment Petitioner could receive.

Moreover, a federal court may disregard a state court’s findings of fact under 28 U. S. C. 2254(e)(1) if it determines “that the presumption of correctness in their favor is ‘rebutt[ed]¼by clear and convincing evidence.’” [Slip op. 5]. The primary concern in such an analysis is to ensure that the obligations of the requested nation are satisfied. See United States v. Cuevas, 847 F.2d 1417, 1428 (9th Cir. 1988).

Although the U.S. did explain to the Venezuelan Ministry of Justice that Petitioner could face life in prison, they responded that “in principle” Petitioner would not face “life incarceration.” The Venezuelan Supreme court then reinforced this intent to limit the sentence. Further correspondence between U. S. and Venezuelan officials evidenced Venezuela’s strong intent to limit any potential sentence against Petitioner.

Finally, the Court notes that the Executive Branch’s view as to the meaning of international treaties deserves due deference. Here, the Ninth Circuit points out that a Note written by the State Department and faxed to the District Attorney, indicated that it disfavored a sentence of life imprisonment in order to preserve our relationship with Venezuela; this casts doubt on the notion that the clear intent of the Executive Branch was to support a sentence of life in prison.

“Because we find that clearly established federal law applies to limit the punishments extradited defendants can receive when conditionally extradited under a Treaty, and the facts of this case indicate that such limitations were intended here, we reverse the decision of the district court.” [Slip op. 7].

Citation: Benitez v. Garcia, 2006 WL 1391096 (9th Cir., May 23, 2006).

FORUM NON CONVENIENS

Sixth Circuit vacates dismissal on grounds of forum non conveniens holding that lower court should have given U. S. citizen’s choice of forum greater deference than that of foreign party and that courts should separately consider each claim to be litigated in its analysis

In 1998 Wayne Duha (Plaintiff) agreed to move to Argentina at the request of his employer, Agrium U. S., a subsidiary of Canadian-based Agrium, Inc. (Defendant), to enhance Agrium’s Argentine subsidiary, Agroservicios Pampeanos, S.A. (ASP). Plaintiff accepted the position in reliance on certain incentives; these included not only 3,000 stock options but also additional credit for years of service to improve his benefits and any severance pay.

During his two years in Argentina, Plaintiff claims he observed ASP engaging in “shady record-keeping and business practices,” including “bribery.” Further, Plaintiff alleges that ASP was using his Michigan residence to buy equipment and supplies, to avoid having to pay tax and costs associated with letters of credit; ASP processed more than $20 million worth of goods in this way. An investigation revealed that the alleged practices were, in fact, taking place.

Shortly after Plaintiff reported these practices to his supervisors and U. S. authorities, Agrium fired him, allegedly because Plaintiff was supplying his subordinates with prostitutes as a work incentive. A human resources manager, however, had sent an e-mail to ASP management claiming that the comments referring to the prostitute were made jokingly.

While still in Argentina, Plaintiff filed for legal conciliation as required by Argentine law. Although the parties did come to a tentative settlement, the agreement fell apart when Agrium required Plaintiff to release all claims against Agrium and Agrium U. S. in addition to his claims against ASP.

In late June 2000, Plaintiff moved back to Michigan without receiving severance pay, or pay for unused vacation, or money due for business expenses incurred before his termination. Furthermore, Plaintiff alleged that Agrium had canceled his stock options.

Plaintiff agreed to go to work for a different company in September of 2000 for which he had to move to Indiana. Plaintiff claimed, however, that Agrium’s Board of Directors intervened and prevented the award of a business opportunity to Plaintiff’s new company, potentially robbing Plaintiff of a substantial commission.

Plaintiff then filed a 45-count complaint against Agrium in a Michigan federal court. The complaint dealt mainly with claims under contract and tort principles, including many allegations directly relating to his termination. Initial discovery revolved around defendants’ motion to dismiss on grounds of forum non conveniens. The court determined that Agrium possessed most of the relevant documents; and that over one hundred potential witnesses lived in Canada, the U.S. and Argentina; a handful of the most crucial witnesses resided in each of the three countries.

In dismissing the case on forum non conveniens grounds, the district court ruled on numerous public and private law factors. These included (1) that Argentina offered easier access to witnesses; (2) that only the Argentine courts could compel certain nonparty defense witnesses crucial to Agrium’s defense to testify but only in Argentina; (3) that compulsory document discovery from Argentine sources would not be available to Agrium in Michigan; (4) that Argentina has a strong interest in the alleged wrongdoing of a company domiciled there; (5) that the Foreign Corrupt Practices Act creates no private cause of action and thus does not supply a federal interest in retaining the suit; (6) that Michigan citizens stand to be less affected by a trial than Argentineans and (7) that it is likely that Argentine substantive law would apply.

In a 2 to 1 split, the U. S. Court of Appeals for the Sixth Circuit vacates and remands. It holds (1) that the district court gave the U. S. plaintiff’s choice of forum too little deference and (2) that the district court erred in dismissing many of plaintiff’s claims without including them in its forum non conveniens analysis.

For dismissal under forum non conveniens to be appropriate, the defendant must establish that the claim may be brought in an available and adequate alternate forum, and that the balance of private and public law factors, originally laid out in Gulf Oil Corp. v. Gilbert, 330 U.S. 501 (1947), favors that disposition. Applying a clear-abuse-of-discretion standard of review, the Court decides that the district court had misapplied the Gulf Oil factors. These factors require a court (1) to give more weight to the forum choice of a U. S. plaintiff over that of a foreign party; (2) to weigh the relative ease of access to documents and witnesses; and (3) to apply the relevant convenience factors separately to each claim.

First, the Sixth Circuit holds that the district court must accord adequate deference to a U. S. plaintiff’s choice of his home forum and choose dismissal only when the defendant “‘establishes such oppressiveness and vexation ¼ as to be out of all proportion to plaintiff’s convenience, which may be shown to be slight or nonexistent.” [Slip op. 7]. Here, the lower court erroneously gave only the degree of deference generally applied to the forum selections of foreign plaintiffs.

Second, the Sixth Circuit rules that the district court did not correctly weigh the relative ease of access to documents and witnesses. To make this determination, the court applies another three variables: (1) the relative ease of access to sources of proof; (2) the availability of compulsory process for the attendance of unwilling’ witnesses; (3) and the cost of obtaining attendance of willing witnesses.

The parties have obtained the most documents in the U. S. or Canada, and these are written in English. Thus, the U. S. forum offers greater ease of access to the relevant documents. Furthermore, a trial in the U. S. would not vex and oppress Agrium because the mere shipment of the documents to the U. S. forum would not be vexatious or oppressive.

Next, the Sixth Circuit evaluates the obtainability of compulsory process. Since neither party has put on evidence tending to show the existence of recalcitrant witnesses, the court should not have given this factor much weight. While the courts have often treated compulsory process as an important factor in forum non conveniens analysis, a moving party must first show that compulsory process will be necessary.

Finally, with respect to witness travel costs, the Court rules that it should take into account only those witnesses whose relevance has been shown. Since most witnesses are located either in the U. S. or Canada, overall travel costs would be lower if the case were tried in the U.S. rather than in Argentina. Furthermore, analysis should not merely focus on the number of witnesses in each location, but on their accessibility and convenience to the forum. Since interstate travel costs considerably less than international travel, the U. S. forum is preferable.

Third, the Court addresses the district court’s dismissal of plaintiff’s additional claims less directly linked to the termination. The Court holds that, for each factually distinct claim, the district court should have conducted a separate forum non conveniens evaluation. Support for this proposition comes from the inter-district transfer of federal cases under 28 U.S.C. Section 1404. When applying the statute, federal courts have weighed the comparative convenience of analytically distinct causes of action separately, even when they appear in the same complaint.

The district court’s decision to dismiss all claims finds no additional support in the availability of other appropriate U. S. forums. Availability of such forums may support the statutory transfer of certain federal claims, but not dismissal on forum non conveniens grounds.

One Circuit Judge dissents on the ground that the majority has incorrectly applied the clear abuse-of-discretion standard. “While the majority acknowledges the proper standard of review, they have ‘lost sight of this rule,’ and improperly ‘substituted [their] own judgment for that of the district court.’” Quoting Piper Aircraft Co. v. Reyno, 454 U.S. 235, 257 (1981).

A forum non conveniens analysis tends to turn on its facts; therefore a court must practice restraint in overturning a lower court ruling. The district court sits closer to the facts and has an easier time deciding the case, especially in a factually intense inquiry in cases such as forum non conveniens.

Although the dissenter agrees that a citizen’s forum choice deserves more deference, the choice of filing in one’s home forum should not serve as an automatic bar against dismissal. When a district court accords a domestic plaintiff’s choice of forum “due deference” and balances the relevant factors, there is no abuse of discretion.

The dissent also finds that the district court did, in fact, give greater deference to the domestic plaintiff’s choice of forum. It points out that the court appropriately quoted Piper Aircraft Co. v. Reyno, 454 U.S. 235, 256 n.23 (1981): “Dismissal is not ‘automatically barred’ when a plaintiff brings suit in his home forum; rather, the court should give deference to the plaintiff’s choice and dismiss only when ‘the balance of conveniences suggests that trial in the chosen forum would be unnecessarily burdensome for the defendant or the court.’” [Slip op. 18]

The court then carried out a proper forum non conveniens analysis by determining that an appropriate alternative forum did exist and by evaluating the relevant private and public law factors.

“The district court accorded the proper deference to the plaintiff’s choice of forum, weighed the relevant information, determined that the majority of the plaintiff’s complaint revolved around conduct in Argentina, with documents and witnesses in Argentina, and with Argentinian [sic] courts capable of adjudicating the complaint.” [Slip op. 19]

Citation: Duha v. Agrium, Inc., 448 F.3d 867 (6th Cir. 2006).

HUMAN RIGHTS

Third Circuit declines to grant relief under Convention Against Torture where claim rests only on generalized allegations of deplorable prison conditions in proposed country of removal

Federal authorities admitted Kesner Francois (Applicant), a native and citizen of Haiti, to the United States as a lawful permanent resident on March 8, 1979. Between 1992 and 1997, an American court had convicted him of possessing a controlled substance along with aggravated assault and had sentenced him to six years in prison. During 2003, Applicant returned to Haiti three times.

On August 10, 2003, however, U.S. officials denied him entry into the U. S. and handed him over to the Bureau of Immigration and Customs Affairs because his criminal convictions made him inadmissible. The government eventually served Applicant with a Notice to Appear at a removal hearing. Conceding his removability, Applicant applied for asylum, withholding of removal, and relief under Article 3 of the Convention Against Torture and other Cruel, Inhuman or Degrading Treatment or Punishment (in force for U. S. Nov. 20, 1994) (CAT). The immigration judge denied Applicant’s claim for asylum and withholding of removal, but granted relief under the CAT.

The Department of Homeland Security (DHS) appealed this decision to the Board of Immigration Appeals and the BIA reversed. Applicant then filed a habeas corpus petition in the district court but the court denied relief. He next appealed to the U. S. Court of Appeals for the Third Circuit. As of May 19, that Court vacates the district court’s opinion and denies Applicant’s petition for review of the BIA’s decision.

The Court reviews the BIA’s legal decisions de novo while deferring to the BIA’s reasonable interpretations of law. The Foreign Affairs Reform and Restructuring Act of 1998 implemented Article 3 of the CAT and allowed relevant agencies to promulgate regulations. Under certain circumstances, the Department of Justice’s regulations allow aliens to obtain relief under the CAT.

They provide that “(a)(1) Torture is defined as any act by which severe pain or suffering, whether physical or mental, is intentionally inflicted on a person for such purposes as obtaining from him or her or a third person information or a confession, punishing him or her for an act he or she or a third person has committed or is suspected of having committed, or intimidating or coercing him or her or a third person, or for any reason based on discrimination of any kind, when such pain or suffering is inflicted by, or at the instigation of, or with the consent or acquiescence of, a public official or other person acting in an official capacity.”

“(a)(2) Torture is an extreme form of cruel and inhuman treatment and does not include lesser forms of cruel, inhuman or degrading treatment or punishment that does not amount to torture.”

“(a)(3) Torture does not include pain or suffering arising only from, inherent in, or incidental to, lawful sanctions.”

“(a)(4) In order to constitute torture, mental pain or suffering must be prolonged mental harm caused by or resulting from:

“(I) The intentional infliction or threatened infliction of severe physical pain or suffering;”

“(ii) The administration or application, or threatened administration or application, of mind altering substances or other procedures calculated to disrupt profoundly the senses or the personality;”

“(iii) The threat of imminent death; or”

“(iv) The threat that another person will imminently be subjected to death, severe physical pain or suffering, or the administration of mind altering substances or other procedures calculated to disrupt profoundly the sense or personality.”

 “(a)(5) In order to constitute torture, an act must be specifically intended to inflict severe physical or mental pain or suffering. An act that results in unanticipated or unintended severity of pain and suffering is not torture.” 8 C.F.R. Sections 208/18 (a)(1)-(a)(5).”

In a removal case, an Applicant who makes a CAT claim must show that it is more likely than not that he or she would be tortured if sent to the country of removal. The evidence to be considered in evaluating a CAT claim includes “[e]vidence of past torture inflicted upon the applicant;” “[e]vidence of gross, flagrant or mass violations of human rights within the country of removal;” and “[o]ther relevant information regarding conditions in the country of removal.” See 8 C.F.R. Section 208.16(c)(3); see also 8 C.F.R. Section 208.17(a). If the Applicant proves that it is more likely than not that he or she would be tortured, then withholding or deferral of removal becomes mandatory.

Here, Applicant contends that he is entitled to CAT relief because, upon his removal to Haiti, he will have to endure indefinite imprisonment there. His claim rests upon generalized prison conditions as described in the U. S. State Department’s Country Report on Human Rights Practices – Haiti 2002, the Human Rights Watch’s World Report 2003 – Haiti and the INS Resource Information Centers’ Haiti -- Information on Conditions in Haitian Prisons and Treatment of Criminal Deportees.

These reports all state that Haiti routinely imprisons criminal deportees and often detains them indefinitely. On average, the government releases detained deportees after several months of imprisonment. They can get out of the National Penitentiary, however, only after a close family member, such as a parent, presents evidence of identification as well as proof of relationship to the deportee.

The relative must also promise to take responsibility for the deportee upon his or her release. If the released deportee commits a crime in Haiti and is not caught, the police will imprison the responsible relative until they catch the deportee. (Not surprisingly, this practice discourages some family members from sponsoring the release of their loved ones.)

According to the cited reports, the conditions in Haitian prisons are atrocious; they range from overcrowding to malnutrition to abuse. Prisoners and detainees lack basic hygiene and health care. They often suffer from AIDS and tuberculosis. Police mistreatment of suspects is routine. Beatings with fists, sticks, and belts are common forms of abuse.

While the Third Circuit agrees that the conditions Applicant will likely face in Haitian prisons following his removal to Haiti are deplorable, it concludes that the conditions do not constitute “torture” under the CAT. In Auguste v. Ridge, 395 F.3d 123 (3d Cir. 2005), Auguste was a Haitian alien facing removal who based his claim for CAT relief on the wretched conditions in Haitian prisons. This Court spurned his claim because miserable conditions of confinement alone do not constitute torture under the CAT.

“[W]e noted that ‘[t]he District Court concluded that ‘there must be some sort of underlying intentional direction of pain and suffering against a particular petitioner, more so than simply complaining of the general state of affairs that constitute conditions of confinement in a place, even as unpleasant as Haiti.’ Id. at 137. Given our discussion in Auguste, we conclude that the generalized allegations of prison conditions [Applicant] advances here do not rise to the level of ‘torture.’” [Slip op. 7]

Finally, Applicant does not claim that he has been tortured in Haiti. He does not allege that, if the U. S. deports him to Haiti, officials there would personally direct any coercion, force, cruelty or brutality at him. The authorities would probably detain Applicant upon arrival and subject him to the above-mentioned prison conditions. On the whole, however, they do not sink to the level of “torture” as defined in the CAT.

Citation: Francois v. Gonzales, 448 F.3d 645 (3rd Cir. 2006).

HUMAN RIGHTS

On appeal of decision by Board of Immigration Appeals, Sixth Circuit decides that convicted alien's removability is timely but remands his claims under Convention Against Torture to Board for further proceedings

Quang Ly Tran (Applicant) is an ethnic Chinese from Vietnam who entered the U.S. in 1980 as a refugee and later adjusted his status to lawful permanent resident. Eight years later, Applicant pled guilty to aggravated murder and robbery. The Immigration and Naturalization Service (INS) entered an Order to Show Cause why Applicant should not be deported. He appealed to the BIA which closed the proceedings for deportation, but left the removal issues open.

In 1996, Congress enacted the Illegal Immigration Reform and Immigrant Responsibility Act (IIRIRA) to reorganize and streamline the removal process for deportable aliens. Section 321 of IIRIRA expanded the term “aggravated felony” as it appears in the general definition provisions at the start of the Immigration and Naturalization Act. See 8 U.S.C. Section 1101(a)(43)(F) (2000). The effective date provisions make this Section applicable retroactively.

Four years later, the INS began a revised removal process against the Applicant based on the same 1988 convictions that were the subject of the first deportation proceedings. In the second action, the BIA reversed the decision of the Immigration Judge (IJ). The IJ had found the Applicant removable to Vietnam because of his felony conviction but had postponed his deportation on the grounds that Applicant qualified for protection under the CAT. The BIA, however, ordered his removal to Vietnam and Applicant filed a timely appeal.

In a May 17 opinion, the U. S. Court of Appeals for the Sixth Circuit holds that the BIA had properly applied the IIRIRA’s provision allowing for the deportation of aliens convicted of an aggravated felony to Applicant’s pre-IIRIRA conviction. Nevertheless, it remands his CAT claim to the BIA for clarification.

On the removal issue, this Court rejects Applicant’s contention that the BIA had erred by retroactively applying the IIRIRA to his 1988 pre-IIRIRA felony convictions. Section 321(b) of the IIRIRA spells out congress’s intent to apply the aggravated felony provision to convictions handed down before the law’s enactment. 8 U.S.C. Section 1101(a)(43) (2000). Section 321(c), however, limits the application of the revised definition of aggravated felony to proceedings filed after September 30, 1996. The proceeding which Applicant challenges began in December 2000, well within Section 321(c)’s temporal limitation.

Nevertheless, the Court remands Applicant’s CAT claim to the BIA to clarify the standards and burdens of proof it employed in reviewing Applicant’s appeal. To obtain relief under the Convention, the Applicant bears the burden of showing that “it is more likely than not that he or she would be tortured if removed to the proposed country of removal.” 8 C.F.R. Section 1208.16(c)(2).

Judicial review of a “final order of removal against an alien who is removable by reason of having committed [an aggravated felony]” is limited to questions of law. 8 U.S.C. Section 1252(a)(2)(C),(D). These are (1) whether the BIA used the correct standard in reviewing the IJ’s decision and (2) whether it applied the correct burden of proof to Applicant’s evidence.

Here, the Court finds that the BIA’s decision was less than pellucid as to what standard of review it was employing. The matter was particularly significant in Applicant’s case because the IJ had withheld removal under the CAT and Applicant had presented unrebutted evidence as to the likelihood of his facing torture upon being sent back to Vietnam.

Accordingly, the Court remands the case to the BIA so that it could (1) clearly conform to the proper standard of BIA review of his CAT claim, and (2) apply the apt burden of persuasion to Applicant’s evidence.

Citation: Tran v. Gonzales, 447 F.3d 937 (6th Cir. 2006).

IMMIGRATION

U.S. Supreme Court affirms deportation order under IIRIRA over objections that Petitioner’s illegal re-entry of U. S. took place before effective date of statute

For a substantial period of time, U. S. Immigration law has provided that the Immigration & Naturalization Service (INS) may revive an order for removing an alien present unlawfully if he leaves the U. S. and unlawfully reenters. The Illegal Immigration Reform and Immigrant Responsibility Act of 1996 (IIRIRA) amended the Immigration and Nationality Act (INA) to expand the class of illegal re-entrants whose orders may be reinstated and to restrict the range of relief available from a removal order.

In 1982, Humberto Fernandez-Vargas (Petitioner), a Mexican citizen, unlawfully came back into the United States after having been deported. Undiscovered for over two decades spent in Utah, Petitioner fathered a son in 1989 and, two years later, married the boy’s mother, a U.S. citizen. He also started a trucking business. After Petitioner applied to change his status to that of a lawful permanent resident, the Government had his 1981 deportation order reinstated under Section 241(a)(5).

Petitioner then asked the Tenth Circuit to review the reinstatement order. To that Court, he argued, first, that Section 241(a)(5) did not preclude his application for adjustment of status because he had unlawfully reentered the country before IIRIRA’s effective date. Moreover, he urged that Section 241(a)(5) would be unacceptably retroactive if construed to bar his adjustment application.

The Court of Appeals, however, ruled that Section 241(a)(5) did defeat his application and relied on Landgraf v. USI Film Products, 511 U.S. 244 ( 1994) in deciding that IIRIRA had no impermissibly retroactive effect in his case.

The U.S. Supreme Court granted certiorari to resolve a split among the Circuits over whether to apply Section 241(a)(5) to an alien who reentered illegally before IIRIRA’s effective date. On June 22, 2006, the Court affirms in an 8 to 1 split. It holds (1) that Section 241(a)(5) does apply to those who reentered the U. S. before IIRIRA’s effective date and (2) that this reading does not retroactively impair any right of, or place any onus on, the Petitioner, the continuing INA transgressor before the Court.

The Majority opinion then outlines the Court’s general approach to retroactivity of statutes. “Statutes are disfavored as retroactive when their application ‘would impair rights a party possessed when he acted, increase a party’s liability for past conduct, or impose new duties with respect to transactions already completed.’ Landgraf, supra, at 280. The modern law thus follows Justice Story’s definition of a retroactive statute, as ‘tak[ing] away or impair[ing] vested rights acquired under existing laws, or creat[ing] a new obligation, impos[ing] a new duty, or attach[ing] a new disability, in respect to transactions or considerations already past,’ Society for the Propagation of the Gospel v. Wheeler, 22 F. Cas. 756, 767 (No. 13,156) (CCNH 1814).

“Accordingly, it has become ‘a rule of general application’ that ‘a statute shall not be given retroactive effect unless such construction is required by explicit language or by necessary implication.’ United States v. St. Louis, S. F. & T. R. Co., 270 U.S. 1, 3 (1926) (opinion for the Court by Brandeis, J.).” [Slip op. 5]

“Needless to say, Congress did not complement the new version of Section 241(a)(5) with any clause expressly dealing with individuals who illegally reentered the country before IIRIRA’s April 1, 1997, effective date, either including them within Section 241(a)(5)’s ambit or excluding them from it.”

“[Petitioner] argues instead on the basis of the generally available interpretive rule of negative implication, when he draws attention to language governing temporal reach contained in the old reinstatement provision, but missing from the current one. Section 242(f) applied to ‘any alien [who] has unlawfully reentered the United States after having previously departed or been deported pursuant to an order of deportation, whether before or after June 27, 1952, on any ground described in ... subsection (e).’ 8 U.S.C. Section 1252(f) (1994 ed.).”

“According to [Petitioner], since that before-or-after clause made it clear that the statute applied to aliens who reentered before the enactment date of the earlier version, its elimination in the current iteration shows that Congress no longer meant to cover pre-enactment re-entrants. [Cite]. But the clues are not that simple.”

“If, moreover, we indulged any suggestion that omitting the clause showed an intent to apply Section 241(a)(5) only to deportations or departures after IIRIRA’s effective date, the result would be a very strange one: it would exempt from the new reinstatement provision’s coverage anyone who departed before IIRIRA’s effective date but reentered after it.”

“The point of the statute’s revision, however, was obviously to expand the scope of the reinstatement authority and invest it with something closer to finality, and it would make no sense to infer that Congress meant to except the broad class of persons who had departed before the time of enactment but who might return illegally at some point in the future.” [Slip op. 6]

“This facial reading is confirmed by two features of IIRIRA, not previously discussed, that describe the conduct to which Section 241(a)(5) applies, and show that the application suffers from no retroactivity in denying [Petitioner] the opportunity for adjustment of status as the spouse of a citizen of the United States.”

“One is in the text of that provision itself, showing that it applies to [Petitioner] today not because he reentered in 1982 or at any other particular time, but because he chose to remain after the new statute became effective. The second is the provision setting IIRIRA’s effective date, Section 309(a), 110 Stat. 3009-625, which shows that [Petitioner] had an ample warning of the coming change in the law, but chose to remain until the old regime expired and Section 241(a)(5) took its place.” [Slip op. 8]

“That in itself is enough to explain that [Petitioner] has no retroactivity claim based on a new disability consequent to a completed act, but in fact his position is weaker still. For [Petitioner] could not only have chosen to end his continuing violation and his exposure to the less favorable law, he even had an ample warning that the new law could be applied to him and ample opportunity to avoid that very possibility by leaving the country and ending his violation in the period between enactment of Section 241(a)(5) and its effective date. IRRIRA became law on September 30, 1996, but it became effective and enforceable only on ‘the first day of the first month beginning more than 180 days after’ IIRIRA’s enactment, that is, April 1, 1997. Section 309(a), 110 Stat. 3009-625.”

“Unlawful alien re-entrants like [Petitioner] thus had the advantage of a grace period between the unequivocal warning that a tougher removal regime lay ahead and actual imposition of the less opportune terms of the new law. In that stretch of six months, Fernandez-Vargas could have ended his illegal presence and potential exposure to the coming law by crossing back into Mexico.”

“For that matter, he could have married the mother of his son and applied for adjustment of status during that period, in which case he would at least have had a claim (about which we express no opinion) that proven reliance on the old law should be honored by applying the presumption against retroactivity.”

“[Petitioner] did not, however, take advantage of the statutory warning, but augmented his past 15 years of unlawful presence by remaining in the country into the future subject to the new law, whose applicability thus turned, not on the completed act of reentry, but on a failure to take timely action that would have avoided application of the new law altogether.”

“To be sure, a choice to avoid the new law before its effective date or to end the continuing violation thereafter would have come at a high personal price, for [Petitioner] would have had to leave a business and a family he had established during his illegal residence. But the branch of retroactivity law that concerns us here is meant to avoid new burdens imposed on completed acts, not all difficult choices occasioned by new law.”

“What [Petitioner] complains of is the application of new law to continuously illegal action within his control both before and after the new law took effect. He claims a right to continue illegal conduct indefinitely under the terms on which it began, an entitlement of legal stasis for those whose lawbreaking is continuous. But ‘[i]f every time a man relied on existing law in arranging his affairs, he were made secure against any change in legal rules, the whole body of our law would be ossified forever.’ L. Fuller, The Morality of Law 60 (1964)...” [Slip op. 9].

Citation: Fernandez-Vargas v. Gonzales, 2006 WL 1698970 ( Sup. Ct. June 22).

POLITICAL QUESTION DOCTRINE

D.C. Circuit affirms dismissal of claims brought against United States by Indian Ocean islanders dispossessed by U. S. military base as non-justiciable political questions involving matters of foreign policy and national security entrusted to political branches

Plaintiffs here are the descendants of Chagossians. These peoples are indigenous residents of the Chagos Islands, British dependencies in the central Indian Ocean south of India.

They filed suit against the U. S., and several senior executive officials (defendants), alleging that the government had forcibly removed them from their homes in 1965 in order to build a military base. The plaintiffs specifically claimed forced relocation; torture; racial discrimination; cruel, inhuman, or degrading treatment; genocide; intentional infliction of emotional distress; negligence; trespass; and destruction of real and personal property.

The district court granted the defendants’ motions to dismiss all of the plaintiffs’ claims. The court held that the individual defendants were immune from suit under the Westfall Act, 28 U.S.C. Section 2679. The Act converts any claims against an employee of the federal government acting within the scope of his employment into claims against the U. S. under the Federal Tort Claims Act (FTCA).

The court dismissed the FTCA claims (1) because of plaintiffs’ failure to exhaust administrative remedies, and (2) because the alleged injuries arose on foreign soil, an exception to the FTCA’s waiver of sovereign immunity in Section 2680(k).

Turning then to the “political question” doctrine, the lower court dismissed the remaining claims against the U. S. for lack of subject matter jurisdiction. Bancoult v. McNamara, 370 F. Supp. 2d 1 (D.D.C 2004). On plaintiffs’ appeal, the U. S. Court of Appeals for the D.C. Circuit reviews the dismissals solely under the political question doctrine and affirms the district court’s judgment.

The Court initially notes that the nonjusticiability of a political question is primarily a function of the separation of powers, and applies the analytical framework laid out in Baker v. Carr, 369 U.S. 186, 217 (1962). The Court first concludes that the Constitution textually allocates foreign policy decisions to the political departments of the government, the Executive and Legislative branches. See Article I, Section 8 and Article II, Section 2.

Second, the Court recognizes that it lacks judicially manageable standards for resolving claims of this type. The Courts cannot recast U. S. foreign policy and national security questions in tort terms; that, for example, would require it to define standards for the government’s use of covert operations in conjunction with political turmoil in another country.

Finally, the Court admits that it cannot adjudicate whether the U. S. should or should not have taken drastic measures in the realms of foreign policy and national security, without expressing a lack of respect to the coordinate branches of government. For these reasons, the Court concludes that it lacks jurisdiction to decide this case. The decision to depopulate and set up a military base on the Chagos islands was an exercise of the foreign policy and national security powers entrusted by the Constitution to the political branches.

The same considerations that render the claims against the United States non-justiciable also block the claims against the individual defendants. “[W]e ... hold that when the political question doctrine bars suit against the United States, this constitutional constraint cannot be circumvented merely by bringing claims against the individuals who committed the acts in question within the scope of their employment.” [Slip op. 10].

Citation: Bancoult v. McNamara, 445 F.3d 427 (D.C. Cir. 2006).

SOVEREIGN IMMUNITY

In suit by private citizen to attach Iran’s Swiss arbitration award to satisfy default judgment in tort case against Iran, Supreme Court rules that Ninth Circuit erred in treating Iranian defense ministry as agent or instrumentality of foreign state under FSIA

In this case, a Dariush Elahi, a private citizen (Respondent), seeks to attach an asset belonging to Iran’s Ministry of Defense in order to help satisfy a judgment for money damages. The question raised is whether the Foreign Sovereign Immunities Act of 1976 (FSIA or Act), 28 U.S.C. Section 1602 et seq. (2000 ed. and Supp. III), stands in the way of that attachment.

Respondent obtained a federal default judgment against the Islamic Republic of Iran for about $300 million based on the allegation that the Republic had murdered his brother. Elahi v. Islamic Republic of Iran, 124 F. Supp.2d 97, 103 (D.D.C. 2000). To help satisfy this judgment, respondent sought to attach an Iranian asset consisting of an arbitration award (against a third party), which Iran’s Ministry of Defense (Petitioner) had secured in Switzerland. The Petitioner successfully asked a California federal Court to confirm the award.

Respondent then intervened in order to impose a lien upon the award. The Petitioner opposed the attachment on the ground that the FSIA grants it immunity from such a claim.

The District Court saw no merit in the Petitioner’s immunity defense because, by suing to enforce the award, the Petitioner had waived any such immunity. On appeal, the U. S. Court of Appeals for the Ninth Circuit rejects the District Court’s waiver theory. On the other hand, it rules against the Petitioner on a different ground -- one that the parties had not argued.

The Act provides that, under certain conditions, the property of an “agency or instrumentality” of a foreign government is “not ... immune from attachment” if the agency is “engaged in commercial activity in the United States.” 28 U.S.C. Section 1610(b). The Court of Appeals finds that the Petitioner (1) does take part in commercial activity and (2) has met the other statutory conditions. Thus, it rules that this section of the Act did preclude the Petitioner’s claim of immunity.

The Ministry then petitioned for certiorari, asking the Supreme Court to review that decision. The U. S. Solicitor General (as Amicus Curiae) agreed with the Petitioner that the Court should grant the writ but only as it pertains to petitioner’s Question 1. This asks whether “the property of a foreign state stricto sensu, situated in the United States” is “immune from attachment ... as provided in the Foreign Sovereign Immunities Act.” (see Sections 1603(a), 1610(a)).

Amicus also requested the Court to vacate the judgment of the Ninth Circuit and to remand the case for consideration of the following question: whether the Petitioner is simply a “foreign state” (what it calls “a foreign state stricto sensu) or whether the it is an “agency or instrumentality” of a foreign state (as the Ninth Circuit had held).

The Supreme Court granted the writ limited to Question 1. In a per curiam opinion, the Court vacates the judgment of the Ninth Circuit, and remands the case for further proceedings consistent with this opinion.

The Court then interprets the FSIA. “The Act, as it applies to the ‘property in the United States of a foreign state,’ Section 1610(a) (emphasis added), does not contain the ‘engaged in commercial activity’ exception that the Ninth Circuit described. That exception applies only where the property at issue is property of an ‘agency or instrumentality’ of a foreign state. Compare Section 1610(b) (‘property ... of an agency or instrumentality of a foreign state engaged in commercial activity’) with Section 1610(a) (‘property ... of a foreign state used for a commercial activity’) (emphasis added). The difference is critical.”

“Moreover, in the Solicitor General’s view, a defense ministry (unlike, say, a government-owned commercial enterprise) generally is not an ‘agency or instrumentality’ of a foreign state but an inseparable part of the state itself. See ... Transaero, Inc. v. La Fuerza Aerea Boliviana, 30 F.3d 148, 153 (C.A.D.C. 1994) (‘hold[ing] that armed forces are as a rule so closely bound up with the structure of the state that they must in all cases be considered as the ‘foreign state’ itself, rather than a separate ‘agency or instrumentality’ of the state’).” [1194].

“We shall not now determine whether the Solicitor General is correct about the status of the Ministry, for the Ninth Circuit did not address the question nor did the parties argue the matter before the Circuit. Neither can we fault the Ministry for that failure. ‘ ... [T]he District Court based its denial of immunity upon waiver. The parties’ Ninth Circuit briefs focused on matters not relevant here (such as the waiver question), with one exception.”

“The exception consists of a footnote in [Respondent’s] brief mentioning the Act’s ‘agency and instrumentality’ provision. That footnote, however, does not ask for affirmance on that basis; nor did it provide the [Petitioner] with clear notice that a reply was necessary.”

“The Ninth Circuit said that it was free to affirm on ‘any ground supported by the record.’ 385 F.3d, at 1219, n. 15. But the court did not explain what in the record might demonstrate that the [Petitioner] is an ‘agency or instrumentality’ of the state rather than an integral part of the state itself. The court noted that ‘[Respondent] Elahi appears to concede’ that the [Petitioner] is an ‘agency and instrumentality,’ id., at 1218, n. 13, but any relevant concession would have to have come from the [Petitioner] not from [Respondent] whose position the concession favors.”

“Thus, in implicitly concluding that the [Petitioner] was an ‘agency or instrumentality’ of the Republic of Iran within the meaning of Section 1610(b), the Ninth Circuit either mistakenly relied on a concession by Respondent that could not possibly bind Petitioner, or else erroneously presumed that there was no relevant distinction between a foreign state and its agencies or instrumentalities for purposes of that subsection. See Section 1603(a), (b). Either way, the Ninth Circuit committed error that was essential to its judgment in favor of Respondent.”

“Because the Ninth Circuit did not consider, and the [Petitioner] had no reasonable opportunity to argue, the critical legal point we have mentioned, we vacate the judgment of the Ninth Circuit, and remand the case.” [1194-95].

Citation: Ministry of Defense and Support for the Armed Forces of the Islamic Republic of Iran v. Elahi, 126 S. Ct. 1193, 163 L.Ed.2d 1047, 74 U.S.L.W. 3458, 3467 (2006).

WORLDWIDE FREEZE ORDERS

In civil action where lower court has issued universal freeze of defendants’ assets supplemented by order relating specifically to assets in Switzerland, English Court of Appeal (Civil Division) upholds propriety of leaving Swiss variation order in effect over defendants’ objections

The present litigation originally arose out of an arbitration between the claimants and a company called Charlton Court plc (Charlton). In essence, the claimants and Charlton entered into a contract having to do with the manufacture of hospital beds and related equipment. The agreement eventually crumbled. In November 1998, Charlton filed suit in a New York state court against the first Respondents for breach of contract and against the second and third Respondents for fraudulent misrepresentation.

A New York federal court, however, enjoined the action in the spring of 1999, ordering the dispute to arbitration by virtue of an arbitration clause in the Charlton contract. The arbitration soon got under way. The Respondents counterclaimed, inter alia, for fraudulent misrepresentation.

In July 2002, the arbitrator dismissed Charlton’s claims because it had failed to provide security in response to an order to do so. He also upheld the first Respondent’s counterclaim for fraudulent misrepresentation. The arbitrator found that Respondent (Simms) and another individual, Selim Rahman (the second defendant) had made the fraudulent misrepresentation. During the arbitration, Simms put in evidence that Jack and Helga Dadourian were shareholders in Charlton via nominee offshore entities or trusts.

Mr. Simms, the first Appellant [and first defendant] in this action, has been a solicitor with an international commercial practice. In February 2004, however, a Disciplinary Tribunal struck him off the Roll. He allegedly was a close adviser of the Dadourians and their go-between with their Swiss bankers and advisers.

The arbitrator awarded the claimants $4.5 million in damages. The defendants’ failure to pay a cent of it has led to the present English proceedings. The causes of action in these proceedings include fraudulent misrepresentation and conspiracy.

The English court of first instance issued a Worldwide Freezing Order (WFO) (formerly called a Mareva injunction). It forbade the Appellants to dispose of their assets, wherever located, up to $5.5 million. The WFO reaches all the assets in the direct or indirect control of each of the Appellants, none of whom now attack the WFO.

The WFO stipulates, however, that the Respondents could not enforce the WFO in a foreign jurisdiction unless the court gave its permission in advance. Specifically, the Order declared that: “The Applicant will not, without the permission of the court, seek to enforce this order in any country outside England and Wales or France or seek an order of a similar nature including orders conferring a charge or other security against the Respondent or the Respondent’s assets, other than in those jurisdictions.”

The central (but narrower) issue in the present appeal is the validity of the SVO. If the Respondents secure leave of court to enforce the WFO in Switzerland, they can enforce the WFO against assets there if the Swiss court declares that it has the power to effectuate the order. (The WFO itself specified a number of Respondents’ undertakings to compensate the adversary and other involved parties against losses resulting from enforcement of the WFO or the SVO).

The Respondents, however, have been having a hard time locating the Dadourians’ assets. The latter parties seem to have few assets in their own names but to have interests in foreign trusts. By February 2004, the Respondents had identified likely assets in Switzerland to which the WFO would apply. These consisted of bank accounts and trust assets. They sought to enforce the WFO against assets held by a bank (the Swiss Bank) and the trust. At respondents request, the lower court issued the SVO.

A key part of the SVO is as follows: “The applicant has permission and is authorised to enforce the order in Switzerland [viz. the WFO of February 13, 2004] and to seek in Switzerland an order of a similar nature, including orders conferring a charge or other security against the Respondents or the Respondents’ assets.” [¶ 19]

Since issuance of the SVO, the Respondents have tried to obtain several types of orders in Switzerland against the Appellants to implement the WFO. First, they asked the Swiss court for an order prohibiting the Appellants from reducing their Swiss assets, including funds held by the Swiss bank, whether legally or beneficially owned. Secondly, they sought an order that would prevent the Swiss bank from disposing of any of the Appellants’ assets, including those held in trust by third parties.

The original order of the Zurich court dated February 20, 2004 had enforced an earlier WFO rather than the current one. The Respondents appealed to the Supreme Court of the Canton of Zurich. On March 21, 2005, that Court partially upheld their appeal; it issued a declaration of enforceability applicable to the current WFO.

In the end, therefore the Swiss courts gave relief only as against the Appellants. In due course, however, the Respondents made the trust a party to the English proceedings and got a WFO against the trust. The effect of the Swiss proceedings was that the Respondents obtained little more relief than they had gotten in the English proceedings.

The Court next takes up the issue of principle noted earlier. “To do this we do not need to set out the cases which show how the courts developed the WFO jurisdiction. It is enough to say that this court [has] held ... that a freezing order could be made in respect of assets which were outside the jurisdiction.”

“However, the making of the order in respect of foreign assets is a serious step and the risks of refusing this relief must justify it. There is an obvious risk of oppression to defendants and to third parties. To meet the courts’ concerns ... [an] undertaking is now ordinarily given, when a WFO is made, not to enforce the WFO without leave from the English forum.”

“On any application for such leave, which normally would be inter partes, the judge can be expected to have before him what we do not have, namely, evidence of the law and practice in the country or countries in which the order is sought to be enforced. The undertaking, I add, is being offered by all the Plaintiffs, which include amongst their number English companies whose substance has not been questioned. So the undertaking is a worthwhile one.” [¶ 24].

Based on WFO precedent and the practicalities of these situations, the present Court lays down eight “Dadourian guidelines” of particular application to the case at bar. In all of this, the Court stresses the discretionary nature of an SVO.

The First discretionary guideline for the grant of permission to enforce a WFO abroad is (a) that the grant should be just and convenient for implementing the WFO, and (b) that it is not oppressive to the parties to the English proceedings or to third parties who may be joined to the foreign proceedings.

The second factor is that the English court should take into account all the relevant circumstances and options. For example, the court should afford relief on terms as to the extension to third parties of the undertaking to compensate for costs incurred as a result of the WFO and as to the type of proceedings that interested parties may file abroad. Moreover, the forum court should carefully consider the proportionality of the steps to be taken abroad, and to the specific terms of any order.

Thirdly, the court should balance the interests of the Applicant against the interests of the other parties to the proceedings, including any new party likely to be joined to the foreign proceedings.

In the fourth place, the court should seldom grant permission in terms that would enable the Applicant to obtain relief in the foreign proceedings which is superior to the relief given by the English WFO.

The fifth guideline would require the Applicants to furnish all the reasonably obtainable information the judge needs to reach an intelligent decision. Examples would be evidence of the applicable law and practice in the foreign court, and proof as to the specific nature of the proceedings to be filed there. Applicants should also reliably inform the judge about the assets deemed to lie within the foreign court’s jurisdiction and the names of the parties who hold these assets.

Under the sixth guideline, the Applicant has the burden of showing that there is a “real prospect” that there are WFO assets located within the jurisdiction of the foreign court in question.

Guideline seven requires the Applicant to present evidence that the assets in question are at risk of dissipation.

Finally, under guideline eight, the Applicant should normally give notice to the [adverse parties] as to the measures it is taking. In urgent cases, where it is not unjust to do so, a court may give permission without notice to the party against whom relief will be sought in the foreign proceedings. On the other hand, that party should have the earliest practicable chance to have the court reconsider the matter at a hearing of which he does have notice.

The Court of Appeal next applies its Dadourian guidelines to the present record. “In our judgment, it follows that the exercise by the judge of his discretion to refuse to discharge the [SVO] must be set aside. On that basis, it falls to this court to exercise that discretion in his stead. In those circumstances this court is entitled to have regard to matters now in evidence even if the evidence of them was not before the judge and, indeed, even if they had not then occurred.”

“The fact that further evidence (e.g. as to Swiss law) needed to be filed does not mean that it would be a wrong exercise of discretion to refuse to discharge the [SVO]. ... In our judgment, there would have been no difficulty in obtaining satisfactory evidence or instructions as to Swiss law and practice. The Appellants have not ... pointed to any matter which, under the ‘Dadourian’ guidelines, should have been considered which would have prevented the exercise by the judge of his discretion to continue the permission given by the [SVO].” [¶¶ 54-55]

“... [A] major consideration supporting the grant of relief in this case is the fact that Mr. and Mrs. Dadourian have clearly sought to hinder the claimants in their pursuit of assets within the scope of the WFO. The evidence before us shows that there have been [about ten] applications to judges of the Chancery Division seeking relief against them since the WFO was granted. ... The applications against them include two further applications to enforce the WFO abroad, in France and the United States respectively.”

“Of course the number of applications and orders does not of itself mean that Mr. and Mrs. Dadourian have failed to co-operate with the Respondents in identifying the assets subject to the WFO but there is one instance at least where they have clearly done so and this is in relation to Brinton Establishment (Brinton).” [¶ 57].

The Court then addresses the position of Mr. Simms. He urges that there is no evidence that any assets in Switzerland belong to him. Strictly speaking, that is correct. In the Court’s view, however, there is evidence of a close working relationship between him and the Dadourians and between him and the Swiss bank.

For instance, the Clarke affidavit “referred to the finding of the arbitration tribunal in litigation arising from the fraudulent sale by Jack Dadourian of 500,000 tonnes of wheat in Uzbekistan in which the tribunal said: ‘Following the judgments given against him in England and California, Mr. Dadourian divested himself of his assets, which he put in the name of his wife ...’”

The affiant further averred: “I respectfully submit that this evidence, drawn substantially from material supplied by Charlton in the arbitration, justifies my belief that the First-Fourth Defendants (or one or more of them) may hold significant assets in Switzerland. Accordingly I ask that the Claimants’ undertaking at paragraph (8) of Schedule B be amended so as to allow for enforcement in Switzerland or the seeking of a similar order there.” [¶ 61]

“Moreover, Mr. Simms was a director and the chairman of Charlton and Charlton had an account with the Swiss bank. There is also evidence that Mr. Simms was the principal beneficiary of Hackar Funding (referred to by Mr. Clarke), a trust whose banking was handled by Mr. Moser, and that Mr. Simms had a number of off-shore trusts or companies which had connections with the Swiss bank and in addition that Mr. Simms had a long and continuing involvement with Mr. and Mrs. Dadourian.”

“This included directorships of companies owned and controlled by Mr. Dadourian, and his ownership and control of the Citilegal group of companies which was materially involved with entities said by Mr. and Mrs. Dadourian to be owned or controlled by Brinton.”

“In all the circumstances, we accept ... that, if the entities with which Mr. Simms was associated or if Mr. and Mrs. Dadourian had assets in Switzerland, the court is entitled to hold that there is a real prospect that Mr. Simms has assets there too. We note also that ... Mr. Clarke’s affidavit ... contains evidence that Mrs. Dadourian had a relationship with the Swiss bank in Zurich which would further imply that there was a real prospect of finding that she had assets in Switzerland.”

“For the purpose of the exercise of the discretion to continue the [SVO], the position of Mr. and Mrs. Dadourian cannot be distinguished because the evidence of Mr. Dadourian about transferring his assets to Mrs. Dadourian has not yet been tested by cross-examination. [I]n our judgment the Respondents have discharged the onus of showing that there is a real prospect that the Appellants have assets in Switzerland and, moreover, in the light of the history of this matter it is reasonable and proportionate for them to seek to enforce the WFO in Switzerland in order to safeguard their rights under the WFO in relation to those assets.” [¶ 62].

In conclusion, the Court of Appeal declares in a ruling dated April 11, 2006: “... [T]he appeals in so far as they relate to [the lower court’s] refusal to discharge the [SVO] should be dismissed.” [¶ 63].

Citation: Dadourian Group Int. Inc. v. Simms & Ors, [2006] E.W.C.A. Civ. 399, 2006 WL 901064 (C.A. (Civ. Div.)).

Bolivia begins to nationalize its natural gas industry. On May 1, Evo Morales, the President of Bolivia, issued a decree purporting to nationalize Bolivia’s huge natural gas industry. Mr. Morales said that the state would also recover majority control of those Bolivian hydrocarbon companies that were partially privatized during the 1990s. He has sent troops and engineers to take over the gas fields, giving the present foreign operators six months to agree to hand over most production controls to Bolivia’s cash-poor state-owned oil company, Yacimientos Petroliferos Fiscales Bolivianos, or face eviction. The takeovers will affect the Bolivian operations of Exxon Mobil Corp. (based in Texas) along with companies from the UK, Brazil, Argentina, Spain and France. Citation: Associate Press (via Findlaw), La Paz, Bolivia, Monday, May 1, 2006 (bylines of Alvaro Zuazo with contributions from Frank Bajak, Alan Clendenning and Jeanneth Valdivieso).

California company prevails in international patent infringement litigation. On April 24, 2006, Rambus, a technology and research company of Los Altos, California won a federal jury verdict of almost $307 million against Hynix Semiconductor of South Korea for violating plaintiff’s patents on memory chips. Rambus had created the technology to make the chips run at higher speeds. The patents deal with synchronous dynamic random access memory (SDRAM) and with double data rate SDRAM (DDR SD) chips. Plaintiff has similar litigation pending against Samsung Electronics of South Korea as well as against Micron Technology. There is an estimated $20 billion annual market for DRAM. Citation: The New York Times, San Jose, California, Tuesday, April 25, 2006 at C8.