2007 International Law Update, Volume 13, Number 2 (February)

2007 International Law Update, Volume 13, Number 2 (February)

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

FORUM NON CONVENIENS

Resolving circuit conflicts, the U.S. Supreme Court rules that district courts have discretion to dismiss on forum non conveniens grounds for trial abroad without having definitively decided whether it has subject matter jurisdiction over case and personal jurisdiction over defendant

Petitioner, Sinochem International Co., Ltd., a Chinese state‑owned importer, entered into a contract with Triorient, a U.S. corporation not a party here. It provided that Sinochem would buy steel coils from Triorient, the latter to be paid under a letter of credit by producing a valid bill of

lading. The bill would certify that Triorient had seen to the loading of the coils for shipment to China on or before April 30, 2003.

Triorient then subchartered a vessel owned by Respondent, Malaysia International Shipping Corporation, a Malaysian company, to transport the coils, and hired a stevedoring company to load the coils in Philadelphia. A bill of lading would trigger payment under the letter of credit.

At some point, Petitioner got the idea that Respondent had falsely backdated the bill of lading. It petitioned the Guangzhou Admiralty Court of China to preserve a maritime claim against Respondent and to arrest the vessel. The Chinese court had the ship arrested, and Petitioner timely filed a complaint in that tribunal. The Chinese admiralty court rejected Respondent’s

jurisdictional objections to Petitioner’s suit and a Chinese appellate court affirmed that ruling.

Shortly after the Chinese admiralty court ordered the vessel’s arrest, Respondent filed this U.S. action in the Eastern District of Pennsylvania. It claimed that Petitioner’s preservation petition to the Chinese court contained misrepresentations, and asked for damages for losses sustained due

to the ship’s arrest.

Petitioner moved to dismiss on several grounds, including lack of subject‑matter and personal jurisdiction and the doctrine of forum non conveniens. Under the latter, a federal district court may dismiss an action if it appears that a foreign court is the more appropriate and convenient

forum for adjudicating the controversy.

The District Court determined (1) that it had subject‑matter jurisdiction over the cause, (2) but that it lacked personal jurisdiction over Petitioner under Pennsylvania law (speculating that limited discovery might reveal that it could have personal jurisdiction under Fed. R. Civ. Proc. 4(k)(2)).

Ultimately, it dismissed on forum non conveniens grounds, deciding that the Chinese courts could decide the case adequately and more conveniently. On appeal, a Third Circuit panel reversed over one dissent. The majority agreed that there was subject‑matter jurisdiction and that limited discovery was essential to resolve the question of personal jurisdiction. It also held

that the District Court could not dismiss the case under the forum non conveniens doctrine unless and until it had determined definitively that it had both subject‑matter and personal jurisdiction.

To resolve a conflict in the circuit courts, the U.S. Supreme Court granted certiorari and unanimously reverses. It rules that a federal district court has discretion to respond at once to a defendant’s forum non conveniens plea, and need not rule first on any other threshold objection. In particular, a court need not resolve whether it has authority to adjudicate the cause or personal jurisdiction over the defendant if it determines that, in any event, a foreign tribunal is the more suitable arbiter of the merits.

In general, a federal court has discretion to dismiss on forum non conveniens grounds “when an alternative forum has jurisdiction to hear [the] case, and ... trial in the chosen forum would establish ... oppressiveness and vexation to a defendant ... out of all proportion to plaintiff’s

convenience, or ... the chosen forum [is] inappropriate because of considerations affecting the court’s own administrative and legal problems. American Dredging Co. v. Miller, 510 U.S. 443, 447‑448 (1994 ).”

“This form of dismissal embodies a court’s assessment of a range of considerations, most notably the convenience to the parties and the practical difficulties that can attend the adjudication of a dispute in a certain locality. Quackenbush v. Allstate Ins. Co., 517 U.S. 706, 723 (1996).”

When a defendant invokes forum non conveniens, it ordinarily bears a substantial onus in trying to upset the Plaintiff’s initial choice of forum. “When the plaintiff has not opted to sue in its home forum, however, the presumption in the plaintiff’s favor ‘applies with less force,’ for the

assumption that the chosen forum is appropriate is then ‘less reasonable.’ Piper Aircraft Co. v. Reyno, 454 U.S. 235, 255‑256 (1981).”

“Steel Co. v. Citizens for Better Environment, 523 U.S. 83 (1998), clarified that a federal court generally may not rule on the merits of a case without first determining that it has jurisdiction over the category of claim in suit (subject matter jurisdiction) and the parties (personal jurisdiction). See id., at 93‑102. ‘Without jurisdiction the court cannot proceed at all in

any cause;’ it may not assume jurisdiction for the purpose of deciding the merits of the case. Id., at 94 (quoting Ex parte McCardle, 7 Wall. 506, 514 (1869)).”

“While Steel Co. confirmed that jurisdictional questions ordinarily must precede merits determinations in dispositional order, Ruhrgas AG v. Marathon Oil Co., 526 U.S. 574, 584 (1999) held that there is no mandatory ‘sequencing of jurisdictional issues.’ 526 U.S., at 584. In appropriate circumstances, Ruhrgas decided, a court may dismiss for lack of personal

jurisdiction without first establishing subject‑matter jurisdiction. See id., at 578.”

“Both Steel Co. and Ruhrgas recognized that a federal court has leeway ‘to choose among threshold grounds for denying audience to a case on the merits.’ Ruhrgas, 526 U.S., at 585; Steel Co., 523 U.S., at 100‑101, n. 3. Dismissal short of reaching the merits means that the court will not ‘proceed at all’ to an adjudication of the cause. Thus, a district court declining to adjudicate state‑law claims on discretionary grounds need not first determine whether those claims fall within its pendent jurisdiction. See Moor v. County of Alameda, 411 U.S. 693, 715‑716 (1973).” [1191].

“Nor must a federal court decide whether the parties present an Article III case or controversy before abstaining under Younger v. Harris, 401 U.S. 37 (1971). [Cite]. A dismissal under Totten v. United States, 92 U.S. 105 (1876) (prohibiting suits against the Government based on covert espionage agreements), we recently observed, also ‘represents the sort of ‘threshold question’ [that] ... may be resolved before addressing jurisdiction.” Tenet v. Doe, 544 U.S. 1, 7, n. 4 (2005). The principle underlying these decisions was well stated by the Seventh Circuit: ‘[J]urisdiction is vital only if the court proposes to issue a judgment on the merits.’ Intec U.S.A., LLC v. Engle, 467 F.3d 1038, 1041 (7th Cir. 2006).”

“A forum non conveniens dismissal ‘den[ies] audience to a case on the merits,’ Ruhrgas, 526 U.S., at 585; it is a determination that the merits should be adjudicated elsewhere. See American Dredging, 510 U.S., at 454; Chick Kam Choo v. Exxon Corp., 486 U.S. 140, 148 (1988).” “The Third Circuit recognized that forum non conveniens ‘is a non‑merits ground for dismissal.’

436 F.3d, at 359. [Cites]. A district court therefore may dispose of an action by a forum non conveniens dismissal, bypassing questions of subject‑matter and personal jurisdiction, when considerations of convenience, fairness, and judicial economy so warrant.”

“Of course a court may need to identify the claims presented and the evidence relevant to adjudicating those issues to intelligently rule on a forum non conveniens motion. But other threshold issues may similarly involve a brush with ‘factual and legal issues of the underlying dispute.’ Van Cauwenberghe v. Biard, 486 U.S. 517, 527‑530 (1988).” [1192].

“For example, in ruling on the nonmerits threshold question of personal jurisdiction, a court may be called upon to determine whether a defendant’s contacts with the forum relate to the claim advanced by the plaintiff. See, e.g., Ruhrgas, 526 U.S., at 581, n. 4 (noting that the District Court’s holding that it lacked personal jurisdiction rested on its conclusion ‘that Marathon had not shown that Ruhrgas pursued the alleged pattern of fraud and misrepresentation during the Houston meetings’).”

“The critical point here, rendering a forum non conveniens determination a threshold, nonmerits issue in the relevant context, is simply this: Resolving a forum non conveniens motion does not entail any assumption by the court of substantive ‘law‑declaring power.’ See id., at 584‑585.”

“The Third Circuit expressed the further concern that a court failing first to establish its jurisdiction could not condition a forum non conveniens dismissal on the defendant’s waiver of any statute of limitations defense or objection to the foreign forum’s jurisdiction. Unable so to condition a dismissal, the Court of Appeals feared, a court could not shield the plaintiff against a foreign tribunal’s refusal to entertain the suit. [Cite].”

“Here, however, [Respondent] faces no genuine risk that the more convenient forum will not take up the case. Proceedings to resolve the parties’ dispute are underway in China, with [Petitioner] as the plaintiff. Jurisdiction of the Guangzhou Admiralty Court has been raised, determined, and affirmed on appeal. We therefore need not decide whether a court conditioning a forum

non conveniens dismissal on the waiver of jurisdictional or limitations defenses in the foreign forum must first determine its own authority to adjudicate the case.” [1193].

“This is a textbook case for immediate forum non conveniens dismissal. The District Court’s subject‑matter jurisdiction presented an issue of first impression in the Third Circuit, ... and was considered at some length by the courts below. Discovery concerning personal jurisdiction would have burdened [Petitioner] with expense and delay. And all to scant purpose: The District Court inevitably would dismiss the case without reaching the merits, given its well‑considered forum non conveniens appraisal.’”

“Judicial economy is disserved by continuing litigation in the Eastern District of Pennsylvania given the proceedings long launched in China. And the gravamen of [Respondent’s] complaint – misrepresentations to the Guangzhou Admiralty Court in the course of securing arrest of the vessel in China – is an issue best left for determination by the Chinese courts.”

“If, however, a court can readily determine that it lacks jurisdiction over the cause or the defendant, the proper course would be to dismiss on that ground. In the mine run of cases, jurisdiction ‘will involve no arduous inquiry’ and both judicial economy and the consideration ordinarily accorded the plaintiff’s choice of forum ‘should impel the federal court to dispose

of [those] issue[s] first.’ Ruhrgas, 526 U.S., at 587‑588. But where subject‑matter or personal jurisdiction is difficult to determine, and forum non conveniens considerations weigh heavily in favor of dismissal, the court properly takes the less burdensome course.” [1194].

Citation: Sinochem Intern. Co. Ltd. v. Malaysia Intern. Shipping Corp., 127

S. Ct. 1184, 75 U.S. L. W. 4126 (U.S. 2007).

GENOCIDE

International Court of Justice rules that evidence of active role in genocide by Serbian state is not conclusive but that it does show (1) that Serb government should have foreseen risk of genocide, but failed to take any steps to prevent massacre of non‑Serb Muslims at Srebenicia and (2) has breached its duty to arrest those who conducted massacre and send them to ICTY for trial

Of the several parties in the region who might be parties, the fifteen‑member International Court of Justice (ICJ) concludes that the Republic of Serbia is, as of the date of the present Judgment, the only Respondent. Any responsibility for past events determined in its Judgment involved at the relevant time the State of Serbia and Montenegro.

As to its jurisdiction, the ICJ had already decided that it had jurisdiction in the present case in its Judgment on preliminary objections of July 11, 1996, and finds that this decision constituted res judicata. i.e. was not open to re‑examination except by way of revision under Article 61 of the

Statute.

The Court notes that the Respondent already applied for revision of the 1996 Judgment in 2001 and that the Court dismissed this Application in a Judgment of February 3, 2003. The Court accordingly affirms its jurisdiction to adjudicate upon the dispute.

The Court first points out that its jurisdiction rests solely on Article IX of the Convention on the Prevention and Punishment of the Crime of Genocide of 9 December 1948 (the Convention). Thus, the Court only has the power to rule on alleged breaches of obligations imposed by the Convention, and not on breaches of other obligations under international law, such as those

protecting human rights in armed conflict, even if these breaches are of peremptory norms, or of obligations that protect essential humanitarian values.

The Respondent first argued that “the Genocide Convention does not provide for the responsibility of States for acts of genocide”. After examining all the relevant Convention articles, the Court concludes that the duty of States to prevent genocide under Article I of the Convention necessarily implies a ban against States themselves committing genocide.

Therefore, if an organ of the State, or a person or group whose acts are attributable to the State, commits an act of genocide or a related act set forth in Convention Article III , the State will incur international responsibility. Moreover, the Court can find States responsible for genocide, or for complicity in genocide, even if a competent court has not previously convicted any individual of that crime.

The Convention requires that, for particular acts to constitute genocide, the perpetrator must have done the acts with the intent to destroy the protected group, in whole or in part. Herein lies an important distinction between genocide and “ethnic cleansing”. While a perpetrator can carry out

“ethnic cleansing” simply by displacing a group of persons from a specific area, genocide requires that these actions be done with the specific intent to destroy all or part of the group.

Furthermore, the Court must be able to define the targeted group by specific positive characteristics—national, ethnic, racial or religious —and not by the lack of them. It therefore rejects the negative definition of the group advanced by the Applicant as the “non‑Serb” population. For the purposes of Applicant’s case, the Court delineates the alleged target group as the “Bosnian Muslims.”

With respect to the burden of persuasion, the Applicant has to prove its case and any party stating a fact has to establish it. The Court requires that the party alleging that someone has committed the crime of genocide (or related acts listed in Article III of the Convention) must prove it by evidence that is fully conclusive. With respect to breaches of the duty to prevent genocide and to punish and extradite perpetrators, the Court requires proof at a high level of certainty appropriate to the seriousness of the allegations.

With regard to the sources of proof, the Court declares that it will make its own determinations of fact based on the evidence presented. In so doing, it will accept, inter alia, relevant trial findings of fact by the International Criminal Tribunal for the former Yugoslavia (ICTY) as highly

persuasive. It will also accord a certain weight to a statement of agreed facts and a sentencing judgment of the ICTY following a guilty plea. In commenting on a number of other sources of evidence, the Court outlines its assessment criteria. In passing, it notes that the U. N. Secretary‑General’s report entitled “The Fall of Srebrenica” has considerable authority.

Before turning to the allegations of fact advanced by Applicant Bosnia and Herzegovina, the Court briefly outlines the background of the case relating to the break‑up of the Socialist Federal Republic of Yugoslavia (SFRY). It also defines the different entities involved in the events complained of. The Court then examines the links between the Government of the Federal

Republic of Yugoslavia (FRY) and the authorities of the Republika Srpska (which was the self‑proclaimed “Republic of the Serb People of Bosnia and Herzegovina”).

The Court decides that there is proof that the FRY made its substantial military and economic support available to the Republika Srpska. Had it withdrawn that support, this would have greatly narrowed the options available to the Republika Srpska authorities.

With respect to “killing members of the protected group” in breach of Article II (a) of the Convention, the Court finds that overwhelming evidence shows that individuals carried out massive killings throughout Bosnia and Herzegovina during the conflict.

The Court is not convinced, however, that the perpetrators of those killings did so with the specific intent to destroy, in whole or in part, the group of Bosnian Muslims. It admits that the killings may have constituted “war crimes” and “crimes against humanity,” but reminds us that it lacks jurisdiction in this case to determine whether or not this is so.

Turning to the massacre at Srebrenica, the Court carefully examined the evidence. The ICTY had found that Bosnian Serb forces killed over 7,000 unarmed Bosnian Muslim men following the takeover of Srebrenica in July 1995. The Court concludes that both killings and acts causing serious bodily or mental harm had taken place. Moreover, the Court finds that the Main

Staff of the VRS (the army of the Republika Srpska) had the necessary specific intent to destroy, in part, the Srebrenica group of Bosnian Muslims. Accordingly, the VRS itself had committed acts of genocide in or around Srebrenica from about July 13, 1995.

The Court then proceeds to examine evidence of acts “causing serious bodily or mental harm to members of the protected group” (Article II (b) of the Convention). It finds that the Bosnian Muslims were systematically victims of massive mistreatment, beatings, rape and torture causing serious bodily and mental harm during the conflict. It finds, however, that the Applicant has not conclusively shown the specific intent to destroy the protected group. The Court also concludes that the Applicant has conclusively shown that there were acts “deliberately inflicting on the group conditions of life calculated to bring about its physical destruction in whole or in part” within Convention Article II (c) but that proof of the specific genocidal intent was lacking.

The Applicant has also alleged breaches of Articles II (d) and (e) of the Convention by Respondent’s “imposing measures to prevent births within the protected group” and “forcibly transferring children of the protected group to another group.” The Court , however, cannot find that the evidence is persuasive enough to establish that such acts took place.

The Court then decides that the Applicant has not established that Republika Srpska had formulated any overall plan to commit genocide based on its 1992 Strategic Goals. It also rejects Applicant’s claim that the very pattern of the atrocities committed in many communities, over a lengthy period, aimed at Bosnian Muslims, can establish the specific genocidal intent.

Having concluded that the army of the Republika Srpska committed acts of genocide at Srebrenica, the Court turns to the question of whether the State Respondent was legally responsible for these acts. In the light of record evidence, the Court finds that it cannot attribute the acts of those who committed genocide at Srebrenica to the Respondent, under the rules of

international law on State responsibility.

In particular, it cannot impute the acts of genocide to the Respondent as done by persons or entities ranking as organs of the Respondent. The Court also finds that the Applicant has not shown that those who carried out the massacres acted on the instructions, or under the direction, of the Respondent nor that the Respondent exercised effective control over the military operations in the course of which the massacres were committed.

With respect to Article III, ¶ (e) (complicity in genocide), the Court declares that there is little doubt that those guilty of the atrocities in Srebrenica acted, at least in part, with the resources which they acquired as a result of the FRY’s general aid policy. One of the very specific conditions for the legal responsibility of the Respondent, however, is not met. Applicant has not conclusively proven that, at the crucial time, the FRY supplied aid to the perpetrators in full awareness that the latter would make use of that aid to commit genocide.

As to the Respondent’s duty to prevent genocide, the Court states, inter alia, that the obligation is one of conduct and not one of result. That is, a State does not incur responsibility simply because genocide takes place. Its liability rather turns on whether the State clearly failed to take all measures to prevent genocide (1) which were within its power, and (2) which might have contributed to preventing the genocide.

A State can be found responsible only if a genocide actually happened. Thus, the Court considers the Respondent’s conduct only as it has to do with the Srebrenica massacres. Finally, it is enough that the State has been aware, or should normally have been aware, of the serious danger of genocide.

The Court notes that the FRY was in a position of influence over the Bosnian Serbs who planned and carried out the genocide in Srebrenica. This influence arises from the strength of the political, military and financial links between the FRY on the one hand, and the Republika Srpska and the VRS on the other.

Although the Court is unable to conclude that the information available to the Belgrade authorities indicated, as a matter of certainty, that genocide was imminent, they could hardly have been unaware of the serious risk of it. Thus, the Yugoslav federal authorities should have made the best efforts within their power to try and prevent the tragic events then taking shape,

whose scale they might have surmised. Yet the Respondent has not shown that it took any steps to avert the atrocities that came to pass. The Respondent thus violated its duty to prevent the Srebrenica genocide to such a degree as to incur international responsibility under Article I of the Genocide Convention.

The Court then addresses the after‑the‑fact duty of States to punish those who commit genocide. Under Article VI of the Convention, States must co‑operate with “such international penal tribunal as may have jurisdiction” in the relevant matter. The ICTY constitutes such a tribunal.

There is plentiful, and mutually corroborative, information suggesting that the Serb General indicted by the ICTY for genocide, as one of those mainly responsible for the Srebrenica massacres, was on the territory of the Respondent at least on several occasions and for substantial periods during the last few years. The indications are that he is still there now and that the Serb authorities have failed to do what they could reasonably do to find out exactly where he is living and to arrest him. As a result, the Respondent has breached its duty to co‑operate fully with the ICTY; thus, violating its duties under Article VI of the Genocide Convention.

Finally, the Court finds that with respect to the massacres at Srebrenica in July 1995, the Respondent failed to obey the Court’s Order of April 8, 1993, reaffirmed in its Order of September 13, 1993. The Court had ordered it to take all measures within its power to forestall the crime of genocide and to make sure that any organizations and persons which may be subject to its influence do not carry out genocide.

Having made its findings, the Court turns to the Applicant’s request for reparation. With respect to the breach of its duty to prevent genocide, the Court finds that the Applicant has not shown that the Respondent could in fact have averted the genocide at Srebrenica if the Respondent had tried to prevent it. Thus, financial compensation is not the appropriate form of reparation. The Court, however, does formally declare that the Respondent has failed to comply with its obligation to prevent the crime of genocide.

As to the obligation to punish acts of genocide, the Court concludes that the following declaration would be an appropriate satisfaction. The Court formally declares that the Respondent has breached the Convention in that it has failed in its duty to arrest and transfer to the ICTY any persons accused of genocide.

Citation: Application of the Convention on the Prevention and Punishment of the Crime of Genocide (Bosnia and Herzegovina v. Serbia and Montenegro), February 27, 2007 (International Court of Justice, based on Court’s press release).

HABEAS CORPUS

In case where detained U.S. citizen is about to be handed over to Iraqi authorities, District of Columbia Circuit holds that, to preserve its habeas corpus jurisdiction, district court may properly enjoin transfer of Petitioner to Iraqi tribunal

U.S. military forces in Iraq captured Shawqi Ahmad Omar (Petitioner), a U.S. citizen, in late 2004. They held him for two years incommunicado, and were planning to ship him over to Iraqi authorities for trial on terrorism charges. Petitioner claims he was in Iraq merely looking for

reconstruction‑related work. The Government alleges, to the contrary, that Petitioner belonged to the terrorist network of Abu Musab al Zarqawi, and that authorities found weapons and bomb‑making materials with him.

In August 2005, a panel of U.S. military officers did decide to turn Omar over to the Central Criminal Court of Iraq (CCCI) for trial. This Court has national jurisdiction over various criminal offenses, including local terrorism.

Omar’s wife and son petitioned for a writ of habeas corpus on his behalf in the District of Columbia federal court. To preserve its jurisdiction over the petition, that court issued a preliminary injunction against his transfer to Iraq.

The Government appealed, claiming (1) that the district court lacked jurisdiction to hear the habeas petition and (2) that the transfer to Iraqi authorities actually grants Petitioner the relief he is seeking, i.e., the release from U.S. custody.

The Government relies primarily on Hirota v. MacArthur, 338 U.S. 197 (1948). There the Court held that World War II Japanese officials could not invoke habeas corpus to challenge their convictions by a multinational military tribunal. In this case, however, a majority of a U.S. Court of Appeals for the District of Columbia Circuit panel affirms.

Unlike the petitioners in Hirota and in Flick v. Johnson, 174 F.2d 983 (D.C. Cir. 1949), the Government has not charged Petitioner Omar with terrorism or a similar crime, much less convicted him of one. Moreover, Petitioner is not trying to collaterally attack a final conviction by an international tribunal. He only seeks to test the lawfulness of his extra‑judicial detention in Iraq, where he has remained in the control of U.S. forces for over two years without legal process.

“True, a panel of three military officers found him to be a ‘security internee’ and an ‘enemy combatant,’ but those determinations, based as they are on military considerations, are a far cry from trial, judgment, and sentencing. See [Hamdi v. Rumsfeld, 542 U.S. 507, 518‑519 (2004)]

(discussing enemy combatant status) ... Habeas proceedings here run no risk, as they did in both Hirota and Flick, of judicial second‑ guessing of an international tribunal’s final determination of guilt.”

“The fact that [Petitioner] has never been convicted of criminal activity thus distinguishes this case from both Hirota and Flick, and rightly so, given that challenging extra‑judicial detention is among the most fundamental purposes of habeas. ‘At its historical core,’ the Supreme Court

has explained, ‘the writ of habeas corpus has served as a means of reviewing the legality of Executive detention, and it is in that context that its protections have been strongest.’ ...”

“Where, as in Hirota and Flick, individuals have been convicted and sentenced by a criminal tribunal, some form of judicial process has occurred, reducing the risk of unlawful extra‑judicial detention. But where, as here, the Executive detains an individual without trial, the risk of

unlawful incarceration is at its apex.” [...]

“... Omar’s petition fits comfortably within the terms of the modern habeas statute ‑ a proposition the government nowhere contests. Under 28 U.S.C. Section 2241, federal courts have authority to issue the writ ‘within their respective jurisdictions’ to prisoners ‘in custody under, or by color of,

the authority of the United States.’ 28 U.S.C. Section 2241(a), (c)(1).”

“Omar’s petition satisfies both requirements. First, the petition is ‘within the jurisdiction’ of the district court because respondents, the Secretary of the Army and two high‑ranking Army officers, are amenable to service in the District of Columbia. ... “ “Second, although American personnel in Iraq operate as part of the [multi‑national force], the government concedes that

Omar is ‘held’ by U.S. forces, ... and that those forces operate ‘subject to’ no independent [multi‑national force] authority ... Omar is thus ‘in custody under or by color of the authority of the United States.’ As a consequence, the district court has jurisdiction to entertain Omar’s habeas petition.” [Slip op. 8‑9]

Neither Hirota nor the “political question” doctrine deprive the district court of jurisdiction to hear Omar’s petition. A transfer would not give [Petitioner] the relief he could obtain through habeas. Finally, the district court’s preliminary injunction properly preserves its jurisdiction

to entertain the petition.

Citation: Omar v. Harvey, 2007 WL 420137 (D.C. Cir. 2007).

NATIONAL SECURITY

Supreme Court of Canada decides unanimously that, despite Parliament’s sincere efforts to protect national security while assuring detained suspects’ constitutional rights, its certificates of inadmissibility procedures violate the Charter of Rights and Freedoms by denying subjects’ fair access to evidence against them and by causing longer detentions for foreign nationals than for permanent residents

The Canadian Immigration and Refugee Protection Act, S. C. 2001, c. 27 (IRPA), tries to resolve the tension between national security and individual liberty in the immigration context. It authorizes the Minister of Citizenship and Immigration (the MCI), and the Minister of Public Safety and Emergency Preparedness (MPSEP) (collectively “the Ministers”) to issue a certificate of inadmissibility that leads to the detention of a permanent resident or foreign national believed to be a threat to national security. The certificate and the detention are both subject to review by a judge.

This process, however, may deny the named person some or all of the information on which the certificate or the detention rested. The question is whether the solution that Parliament has enacted conforms to the Constitution, and specifically to the guarantees in the Canadian Charter of Rights and Freedoms. These provisions protect against unjustifiable intrusions on liberty, equality and the freedom from arbitrary detention and from cruel and unusual treatment.

Appellants before the Supreme Court of Canada are Mr. Adil Charkaoui, a permanent resident, plus Messrs. Mohamed Harkat and Hassan Almrei, foreign nationals who had been recognized as covered by the Refugee Convention. All these Appellants were living in Canada when authorities arrested and detained them. At the time of the decisions on appeal, all had been in custody for some time—since 2003, 2002 and 2001 respectively.

In 2001, a judge of the Federal Court determined Mr. Almrei’s certificate to be reasonable; another determined Mr. Harkat’s certificate to be reasonable in 2005. No court has yet determined the reasonableness of Mr. Charkaoui’s certificate. Canadian authorities released Messrs. Charkaoui and Harkat on certain restrictive conditions in 2005 and 2006 respectively, but the Government has told Mr. Harkat that it plans to deport him to Algeria. Mr. Almrei remains in detention. In these three cases, the detentions stemmed from allegations that the individuals posed a threat to Canadian security due to their links to terrorist activities.

The Appellants argue that the IRPA’s certificate scheme is unconstitutional. They contend that it violates five provisions of the Charter: the Section 7 guarantee of life, liberty and security of the person; the Section 9 guarantee against arbitrary detention; the Section 10(c) guarantee of a prompt judicial review of detention; the Section 12 guarantee against cruel and unusual treatment; and the Section 15 guarantee of equal protection and equal benefit of the law. They also allege violations of unwritten constitutional principles.

The Canadian Supreme Court’s principal rulings are as follows. First, the procedure under the IRPA for determining the reasonableness of the certificate of inadmissibility does infringe Section 7 of the Charter, and the infringement is not demonstrably justified in a free and democratic society under Section 1 of the Charter. Second, the detention of permanent residents or foreign nationals under the IRPA infringes Section 9 of the Charter, and the infringements are not demonstrably justified in a free and democratic society under Section 1 of the Charter. Third, the IRPA in whole or in part or through their combined effect, does infringe Section 10 of the Charter and the infringement is not a reasonable limit prescribed by law which can be demonstrably justified in a free and democratic society under Section 1 of the Charter. A unanimous Court, therefore, allows the appeal.

The question at the Section 7 stage is whether the Government has, in substance, observed the principles of fundamental justice relevant to the case, having regard to the context and the seriousness of the violation. The crux is whether the process is fundamentally unfair to the affected person. If so, the deprivation of life, liberty or security of the person simply does not

conform to the requirements of Section 7. The inquiry then shifts to Section 1 of the Charter, at which point the government has a chance to justify the flawed process, having regard, notably, to the public interest.

It follows that while administrative constraints associated with the context of national security may inform the analysis on whether a particular process is fundamentally unfair, the Government cannot use security concerns to excuse procedures that do not conform to fundamental justice at the Section 7 stage of the analysis. If the context makes it impossible to adhere to the principles of fundamental justice in their usual form, there may exist adequate substitutes. The bottom line is that the Government has to respect these principles to pass the hurdle of Section 7.

The procedures required to comply with the principles of fundamental justice must, of course, reflect to some extent the demands of the security context. Yet the courts cannot let them erode the essence of Section 7. The Government cannot reduce the principles of fundamental justice to the point where they stop furnishing the protection of due process that lies at the heart of Section 7 of the Charter. The protection may not be as complete as in a case where national security constraints do not operate. But to satisfy Section 7, there has to be meaningful and substantial protection.

The Court then explores some of the relevant principles of fundamental justice. “The overarching principle of fundamental justice that applies here is this: before the state can detain people for significant periods of time, it must accord them a fair judicial process [Cite] ‘It is an ancient and

venerable principle that no person shall lose his or her liberty without due process according to the law, which must involve a meaningful judicial process’[Cite]. This principle emerged in the era of feudal monarchy, in the form of the right to be brought before a judge on a motion of habeas corpus. It remains as fundamental to our modern conception of liberty as it was in

the days of King John.”

“This basic principle has a number of facets. It comprises the right to a hearing. It requires that the hearing be before an independent and impartial magistrate. It demands a decision by the magistrate on the facts and the law. And it entails the right to know the case put against one, and the right to answer that case. Precisely how these requirements are met will vary with the context. But for Section 7 to be satisfied, each of them must be met in substance.”

“The IRPA process includes a hearing. The process consists of two phases, one executive and one judicial. There is no hearing at the executive phase that results in issuance of the certificate. However, this is followed by a review before a judge, where the named person is afforded a hearing. Thus, the first requirement, that of a hearing, is met.”

“Questions arise, however, on the other requirements, namely: that the judge be independent and impartial; that the judge make a judicial decision based on the facts and the law; and finally, that the named person be afforded an opportunity to meet the case put against him or her by being informed of that case and being allowed to question or counter it. I conclude that the IRPA scheme meets the first requirement of independence and impartiality, but fails to satisfy the second and third requirements, which are interrelated here.” [¶¶ 28‑31].

“When reviewing the certificate, the judge sees all the material relied on by the government. But if the government claims confidentiality for certain material, the judge cannot share this material with the named person. The judge must make his or her decision without hearing any objections the named person might be able to make, were he or she granted access to the whole of the record. Part of the hearing may be held in camera, with only the judge and the government lawyers in the room. The named person is not there. His or her lawyer is not there. There is no one to speak for the person or to test the evidence put against him or her.” [¶ 35].

“Three related concerns arise with respect to independence and impartiality. First is the concern that the IRPA may be perceived to deprive the judge of his or her independent judicial role and co‑opt the judge as an agent of the executive branch of government. Second is the concern that the designated judge functions as an investigative officer rather than a judge. Third is the concern that the judge, whose role includes compensating for the fact that the named person may not have access to material and may not be present at the hearing, will become associated with this person’s case.” [¶ 37].

“I conclude that, on its face, the IRPA process is designed to preserve the independence and impartiality of the designated judge, as required by Section 7. Properly followed by judges committed to a searching review, it cannot be said to compromise the perceived independence and impartiality of the designated judge.” [¶ 46].

“Judges of the Federal Court have worked assiduously to overcome the difficulties inherent in the role the IRPA has assigned to them. To their credit, they have adopted a pseudo‑inquisitorial role and sought to seriously test the protected documentation and information. But the role

remains pseudo‑inquisitorial. The judge is not afforded the power to independently investigate all relevant facts that true inquisitorial judges enjoy. At the same time, since the named person is not given a full picture of the case to meet, the judge cannot rely on the parties to present missing

evidence. The result is that, at the end of the day, one cannot be sure that the judge has been exposed to the whole factual picture.”

“Similar concerns arise with respect to the requirement that the decision be based on the law. Without knowledge of the information put against him or her, the named person may not be in a position to raise legal objections relating to the evidence, or to develop legal arguments based on the evidence. The named person is, to be sure, permitted to make legal representations. But without disclosure and full participation throughout the process, he or she may not be in a position to put forward a full legal argument.” [¶ 51‑52].

“Under the IRPA’s certificate scheme, the named person may be deprived of access to some or all of the information put against him or her, which would deny the person the ability to know the case to meet. Without this information, the named person may not be in a position to contradict errors, identify omissions, challenge the credibility of informants or refute false allegations. This problem is serious in itself. It also underlies the concerns, discussed above, about the independence and impartiality of the designated judge, and the ability of the judge to make a decision based on the facts and law.”

“The judge ‘shall provide’ the named person with a summary of information that enables him or her to be reasonably informed of the circumstances giving rise to the certificate, but the summary cannot include anything that would, in the opinion of the judge, be injurious to national security or to the safety of any person: Section 78(h) [IRPA]. Ultimately, the judge may have to consider information that is not included in the summary: Section 78(g). In the result, the judge may be required to decide the case, wholly or in part, on the basis of information that the named person and his or her counsel never see. The person may know nothing of the case to meet, and, although technically afforded an opportunity to be heard, may be left in a position of having no idea as to what needs to be said.”[¶ 54].

“In the context of national security, non‑disclosure, which may be extensive, coupled with the grave intrusions on liberty imposed on a detainee, makes it difficult, if not impossible, to find substitute procedures that will satisfy Section 7. Fundamental justice requires substantial compliance with the venerated principle that a person whose liberty is in jeopardy must be given an opportunity to know the case to meet, and an opportunity to meet the case.”

“Yet the imperative of the protection of society may preclude this. Information may be obtained from other countries or from informers on condition that it not be disclosed. Or it may simply be so critical that it cannot be disclosed without risking public security. This is a reality of our modern world. If Section 7 is to be satisfied, either the person must be given the necessary information, or a substantial substitute for that information must be found. Neither is the case here.” [¶ 61].

On these points, the Court finds merit in the Appellants’ contentions. “The issue at the Section 7 stage, as discussed above, is not whether the government has struck the right balance between the need for security and individual liberties; that is the issue at the stage of Section 1 justification of an established limitation on a Charter right. The question at the Section 7 stage is whether the basic requirements of procedural justice have been met, either in the usual way or in an alternative fashion appropriate to the context, having regard to the government’s objective and the interests of the person affected.”

“The fairness of the IRPA procedure rests entirely on the shoulders of the designated judge. Those shoulders cannot by themselves bear the heavy burden of assuring, in fact and appearance, that the decision on the reasonableness of the certificate is impartial, is based on a full view of the facts and law, and reflects the named person’s knowledge of the case to meet. The judge, working under the constraints imposed by the IRPA, simply cannot fill the vacuum left by the removal of the traditional guarantees of a fair hearing.”

“The judge sees only what the Ministers put before him or her. The judge, knowing nothing else about the case, is not in a position to identify errors, find omissions or assess the credibility and truthfulness of the information in the way the named person would be. Although the judge may ask questions of the named person when the hearing is reopened, the judge is prevented from asking questions that might disclose the protected information. Likewise, since the named person does not know what has been put against him or her, he or she does not know what the designated judge needs to hear. If the judge cannot provide the named person with a summary

of the information that is sufficient to enable the person to know the case to meet, then the judge cannot be satisfied that the information before him or her is sufficient or reliable. Despite the judge’s best efforts to question the government’s witnesses and scrutinize the documentary evidence, he or she is placed in the situation of asking questions and ultimately deciding the issues on the basis of incomplete and potentially unreliable information.”

“The judge is not helpless; he or she can note contradictions between documents, insist that there be at least some evidence on the critical points, and make limited inferences on the value and credibility of the information from its source. Nevertheless, the judge’s activity on behalf of

the named person is confined to what is presented by the Ministers. The judge is therefore not in a position to compensate for the lack of informed scrutiny, challenge and counter‑evidence that a person familiar with the case could bring. Such scrutiny is the whole point of the principle that a

person whose liberty is in jeopardy must know the case to meet. Here that principle has not merely been limited; it has been effectively gutted. How can one meet a case one does not know?”

On the Section 7 issues, the Court reaches the following conclusion. “In the IRPA, an attempt has been made to meet the requirements of fundamental justice essentially through one mechanism ‑‑ the designated judge charged with reviewing the certificate of inadmissibility and the detention. To Parliament’s credit, a sincere attempt has been made to give the designated judge the powers necessary to discharge the role in an independent manner, based on the facts and the law.”

“Yet, the secrecy required by the scheme denies the named person the opportunity to know the case put against him or her, and hence to challenge the government’s case. This, in turn, undermines the judge’s ability to come to a decision based on all the relevant facts and law. Despite the best efforts of judges of the Federal Court to breathe judicial life into the IRPA procedure, it fails to assure the fair hearing that Section 7 of the Charter requires before the state deprives a person of life, liberty or security of the person. I therefore conclude that the IRPA’s procedure for determining whether a certificate is reasonable does not conform to the principles of fundamental justice as embodied in Section 7 of the Charter. The same conclusion necessarily applies to the detention review procedures under Sections 83 and 84 of the IRPA. [¶¶ 63‑65].

The Court then examines the time constraints on review for foreign nationals under the Charter and IRPA. “Section 9 of the Charter guarantees freedom from arbitrary detention. This guarantee expresses one of the most fundamental norms of the rule of law. The state may not detain arbitrarily, but only in accordance with the law. The Appellant Mr. Almrei argues that

detention under the IRPA is arbitrary with respect to foreign nationals, first because it permits their detention without warrant and without regard to their personal circumstances, and second because it prevents review until 120 days after the certificate is confirmed. In both respects, foreign nationals are treated differently than permanent residents.” [¶ 88].

“The lack of review for foreign nationals until 120 days after the reasonableness of the certificate has been judicially determined violates the guarantee against arbitrary detention in Section 9 of the Charter, a guarantee which encompasses the right to prompt review of detention under Section 10(c) of the Charter. Permanent residents named in certificates are entitled to an automatic review within 48 hours. The same time frame for review of detention applies to both permanent residents and foreign nationals under Section 57 of the IRPA. And under the Criminal Code, a person who is arrested with or without a warrant is to be brought before a judge within 24 hours, or as soon as possible: Section 503(1). These provisions indicate the seriousness with which the deprivation of liberty is viewed, and offer guidance as to acceptable delays before this deprivation is reviewed.” [¶ 91].

“It is clear that there may be a need for some flexibility regarding the period for which a suspected terrorist may be detained. Confronted with a terrorist threat, state officials may need to act immediately, in the absence of a fully documented case. It may take some time to verify and

document the threat. Where state officials act expeditiously, the failure to meet an arbitrary target of a fixed number of hours should not mean the automatic release of the person, who may well be dangerous.”

“However, this cannot justify the complete denial of a timely detention review. Permanent residents who pose a danger to national security are also meant to be removed expeditiously. If this objective can be pursued while providing permanent residents with a mandatory detention review within 48 hours, then how can a denial of review for foreign nationals for 120 days

after the certificate is confirmed be considered a minimal impairment? I conclude that the lack of timely review of the detention of foreign nationals violates Section 9 and Section 10 (c) and cannot be saved by Section 1.” [¶¶ 93‑94].

The Court then addresses whether the scheme set up under Division 9 of Part 1 of the IRPA suffers from defects that make the scheme inconsistent with the Charter. “The first is that [IRPA] Section 78(g) allows for the use of evidence that is never disclosed to the named person without providing adequate measures to compensate for this non‑disclosure and the constitutional problems it causes. It is clear from approaches adopted in other democracies, and in Canada itself in other security situations, that solutions can be devised that protect confidential security information and at the same time are less intrusive on the person’s rights.”

“It follows that the IRPA’s procedure for the judicial confirmation of certificates and review of detention violates Section 7 of the Charter and has not been shown to be justified under Section 1 of the Charter. I would declare the procedure to be inconsistent with the Charter, and hence of no force or effect.”

“However, in order to give Parliament time to amend the law, I would suspend this declaration for one year from the date of this judgment. If the government chooses to go forward with the proceedings to have the reasonableness of Mr. Charkaoui’s certificate determined during the one‑year suspension period, the existing process under the IRPA will apply. After one year, the certificates of Mr. Harkat and Mr. Almrei (and of any other individuals whose certificates have been deemed reasonable) will lose the ‘reasonable’ status that has been conferred on them, and it will be open to them to apply to have the certificates quashed. If the government intends to

employ a certificate after the one‑year delay, it will need to seek a fresh determination of reasonableness under the new process devised by Parliament. Likewise, any detention review occurring after the delay will be subject to the new process.”

“The second defect is found in Section 84(2) of the IRPA, which denies a prompt hearing to foreign nationals by imposing a 120‑day embargo, after confirmation of the certificate, on applications for release. Counsel for the Ministers submitted in oral argument that, if this Court were to find that Section 84(2) violates the Charter, the appropriate remedy would be to strike Section 84(2) and read foreign nationals into Section 83.”

“This is a good first step, but it does not provide a complete solution, since Section 83 deals with detention review only until the certificate has been determined to be reasonable, whereas Section 84(2) deals with detention review after it has been determined to be reasonable. Striking Section 84(2) would therefore leave no provision for review of detention of foreign nationals once the certificate has been deemed reasonable.”

“Accordingly, I conclude that the appropriate remedy is to strike [IRPA] Section 84(2) as well as to read foreign nationals into Section 83 and to strike the words ‘until a determination is made under subsection 80(1)’ from Section 83(2).” [¶¶ 139‑142]

Citation: Re Charkaoui, 2007 Carswell Nat. 325, 2007 S. C. C. 9 (Sup. Ct. Can. 2007).

PATENTS

In reviewing district court’s finding of supplemental jurisdiction over foreign patent infringement claims, panel majority of Federal Circuit finds abuse of discretion based on comity, judicial economy, convenience, and fairness

In an Oklahoma federal court, Jan Voda (Plaintiff) sued Cordis Corporation (Defendant) for the infringement of Plaintiff’s U.S. patents. Plaintiff owns several patents on exploratory catheters usable by cardiologists. Three patents are from the U.S., while it obtained one each in the European Union, Britain, France, Germany and Canada.

The District Court held it had jurisdiction over Plaintiff’s U.S. claims, and granted him leave to amend his complaint to allege infringements of Plaintiff’s foreign patents. The Court later exercised jurisdiction over those added foreign claims based on 28 U.S. C. Section 1367, the supplemental jurisdiction statute.

Cordis U.S. filed an interlocutory appeal. The U.S. Court of Appeals for the Federal Circuit rules that the District Court had erred in granting leave to amend under Section 1367, and remands.

At the outset, the Court notes that the existence of supplemental jurisdiction over foreign patent claims based on claims of U.S. patent infringements is a matter that is unique to U.S. patent law. The law of the circuit applies. Section 1367 confirms the discretionary nature of supplemental jurisdiction. But it also requires that the claims of foreign patent infringement “form part of the same case or controversy under Article III.”

In this case, however, the Circuit Court need not reach this issue because the district court abused its discretion in finding supplemental jurisdiction under Section 1367(c). That section permits district courts to decline supplemental jurisdiction if (1) the claim raises a novel or complex issue of State law, or (2) the claim substantially predominates over the claim with original jurisdiction, or (3) the district court has dismissed all claims over which it has original jurisdiction, or (4) in exceptional circumstances, if there are other compelling reasons for declining to exercise jurisdiction.

The court below failed to apply Section 1367(c). Considerations of comity, judicial economy, convenience, fairness, and other exceptional circumstances form compelling reasons to decline supplemental jurisdiction in this case. See City of Chicago v. Int’l Coll. of Surgeons, 522 U.S. 156, 173 (1997).

“Plaintiff asserts (and one of the amicus curiae briefs suggests) that international treaties evince a trend of harmonization of patent law and thus, that allowing the exercise of supplemental jurisdiction over Plaintiff’s foreign patent infringement claims furthers the harmonization

goals underlying the treaties.”

“Regardless of the strength of the harmonization trend, however, we as the U.S. judiciary should not unilaterally decide either for our government or for other foreign sovereigns that our courts will become the adjudicating body for any foreign patent with a U.S. equivalent ‘so related’ to form ‘the same case or controversy.’ Cf. F. Hoffman‑La Roche Ltd. v. Empagran S. A.,

542 U.S. 155, 166‑67 (2004) (finding ‘no convincing justification’ for providing such subject matter jurisdiction in antitrust context).”

“Permitting our district courts to exercise jurisdiction over infringement claims based on foreign patents in this case would require us to define the legal boundaries of a property right granted by another sovereign and then determine whether there has been a trespass to that right. ... Based on the international treaties that the United States has joined and ratified as the ‘supreme law of the land,’ a district court’s exercise of supplemental jurisdiction could undermine the obligations of the United States under such treaties, which therefore constitute an exceptional circumstance to decline jurisdiction under Section 1367 (c)(4). ...” [Slip op. 15]

Comity considerations also fail to support the district court’s finding of supplemental jurisdiction. Our federal courts have no legal duty to adjudicate foreign patent infringement claims. None of the relevant international agreements require otherwise. Neither the Paris Convention for the Protection of Industrial Property (September 5, 1970, 21 U.S. T. 1583,

24 U.S. T. 2140), nor the Patent Cooperation Treaty (PCT) (January 24, 1978, 28 U.S. T. 7645), nor the Agreement on Trade‑Related Aspects of Intellectual Property Rights (TRIPS) (April 15, 1994, 1867 U. N. T. S. 154, 33 I. L. M. 1144), grants jurisdiction to the courts of one member state to adjudicate the patents issued by another member state.

The Court sees no reason to supplant foreign courts in adjudicating their patent infringement claims. Therefore, comity and the principle of avoiding unreasonable interference with the authority of other sovereigns required the district court to decline supplemental jurisdiction under Section 1367.

As for the factor of judicial economy, the district court overlooked it. Consolidated multinational patent adjudication might possibly have some efficiencies. A major drawback, however, is the present lack of international mechanisms for the enforcement of U.S. judgments within the

nations that issued these patents.

Finally, the Act of State Doctrine may make the exercise of supplemental jurisdiction over foreign patent infringement claims fundamentally unfair. The Doctrine presumes that the acts of foreign sovereigns on their own soil are valid. Assuming arguendo that the granting of a patent is an Act of State, a U.S. court would not be able to inquire into the validity of a foreign patent.

Here, Plaintiff failed to show that validity would not arise in the present litigation. In sum, the district court abused its discretion in failing to decline supplemental jurisdiction under Section 1367(c) based on treaties that are the “supreme law of the land, “ along with considerations of comity, judicial economy, convenience, and fairness.

The dissenting judge notes that the certified question is merely the authority of a U.S. court to exercise its discretion to accept an amended complaint with foreign patent claims. U.S. courts routinely apply foreign law to resolve disputes.

“The principles of supplemental jurisdiction as applied to federal/state issues, 28 U.S. C. Section 1367, weigh on the side of the exercise of jurisdiction absent compelling reason ...” [Slip op. 40].

Citation: Voda Corporation v. Cordis Corp., 478 F.3d 887, 81 U.S. P. Q. 2d

1789 (Fed. Cir. 2007).

SOVEREIGN IMMUNITY

Fifth Circuit denies claim of sovereign immunity to Japan’s largest telecom company because, though it started out as government‑owned monopoly, Japan is now minority shareholder which does not now manage it as it competes in market place with several other telecommunications companies

The Board of Regents of the University of Texas System (UT) and Hydro‑Quebec (HQ) (Plaintiffs) filed a suit in a Texas court alleging that a scientist of Nippon Telegraph & Telephone Corporation (Defendant) acquired certain confidential information while at the University of Texas at Austin in 1993‑1994. Defendant supposedly used that information to apply for a

Japanese patent related to the technology of lithium rechargeable batteries. In the meantime, UT applied for a provisional patent for similar technology and signed a licensing agreement with HQ. Plaintiffs now claim that Defendant’s Japanese patent interferes with their licensing agreement.

Defendant eventually removed the case to federal court where it filed a motion to dismiss. The district court denied the motion. Defendant then filed this interlocutory appeal, claiming that it is immune from suit as an “organ of a foreign state” under the Foreign Sovereign Immunities Act

(FSIA), 28 U.S.C. Section 1603(b)(2).

The U.S. Court of Appeals for the Fifth Circuit affirms and remands for the district court to send it back to Texas state court. In its view, Defendant is not entitled to foreign‑sovereign status under the FSIA.

Defendant bases his immunity claims on 28 U.S. C. Section 1604. It provides generally that: “[A] foreign state shall be immune from the jurisdiction of the courts of the United States and of the States ...” The definition of “foreign state” includes “an agency or instrumentality of a foreign state.” 28 U.S.C. Section 1603(b).

The Circuit Court, however, is not persuaded. “Our caselaw has developed a five‑factor framework to assist in determining organ status: “(1) whether the foreign state created the entity for a national purpose; (2) whether the foreign state actively supervises the entity; (3) whether the foreign state requires the hiring of public employees and pays their salaries; (4) whether the entity holds exclusive rights to some right in the [foreign] country; and (5) how the entity is treated under the foreign state’s law. Kelly v. Syria Shell Petroleum Dev. B.V., 213 F.3d 841, 846‑7 (5th Cir. 2000) ...”

“Cognizant of this Court’s caveat that these factors should not be applied mechanically because there is no ‘clear test’ for determining organ status, we find them apposite here, as did our court in Kelly, and as have other circuits in similar cases. ... Under the Kelly factors, [Defendant] does not qualify as an ‘organ’ of the Japanese Government.” [Slip op. 5]

In the first place, Japan did not create Defendant for a national purpose. At the outset a 100% Government‑owned monopoly, it is now a commercial entity only 46% owned by the Government; it is only one of several telecom companies competing in the Japanese telecommunications market. Thus, it clearly serves private market purposes, not a government function.

Furthermore, the Japanese Government does not actively supervise Defendant. It reported in its S.E.C. filing that the Japanese Government has never used its power as a major shareholder to direct Defendant’s management. Japanese law does not regard its workers as public employees, does not grant it any exclusive rights, and does not treat it a government organ.

Citation: Board of Regents of the University of Texas System v. Nippon

Telephone and Telegraph Corp., 2007 WL 273957 (5th Cir. 2007).

SOVEREIGN IMMUNITY

In affirming dismissal of garnishment action against Congo based on sovereign immunity despite Congo’s waiver of immunity in underlying contract, Ninth Circuit rules, as matter of first impression, that Congo’s assets were not being “used for” commercial activity within FSIA Section 1610(a)

Af‑Cap, Inc. (Plaintiff), the judgment creditor, filed garnishments and liens against any property of the judgment debtor, the Republic of Congo (Defendant), held by the third party Chevron Texaco Corporation (CT Corp.) and its U.S. subsidiaries (jointly Chevron Texas). The Defendant’s assets held by CT Corp and Chevron Texas consist of intangible obligations such as

bonuses, taxes and royalties from the Defendant’s resources of oil and hydrocarbons. The Defendant asserted sovereign immunity. (See related case at 2006 International Law Update 174.)

The Defendant’s obligations result from a 1984 loan by Equator Bank to build a highway on the Defendant’s territory. In the contract the Defendant consented to “execution against any property whatsoever (irrespective of its use or intended use).” Also, the Defendant waived its “immunity from suit, execution, attachment ... or other legal process.” In 1985, the Connecticut Bank of Commerce (CBC) became Equator Bank’s assignee, obtained a judgment against Defendant in England, and converted it into a U.S. judgment in the New York courts.

The district court vacated the garnishments and liens filed against the Defendant and Plaintiff appealed. The U.S. Court of Appeals for the Ninth Circuit affirms. It held that Defendant did not use the obligations for any commercial activity in the U.S. and thus had retained its immunity under the F. S. I. A., 28 U.S. C. Section 1610(a). The Court rejects Plaintiff’s claim that the Defendant’s waiver renders Section 1610(a) inapplicable to the loan.

“In fact, the opposite is true. Under Section 1609, ‘the property in the United States of a foreign state shall be immune from attachment[,] arrest and execution except as provided in section[ ] 1610 . . .’ 28 U.S.C. Section 1609. In turn, Section 1610(a), the exception at issue in this case, provides: ‘The property in the United States of a foreign state . . . used for a commercial activity in the United States, shall not be immune from attachment in aid of execution, or from execution, upon a judgment entered by a court of the United States or of a State . . . if: (1) the foreign state has waived its immunity from attachment in aid of execution, or from execution . . .’ 28 U.S.C. Section 1610(a) ...”

“[Plaintiff’s] contention that the [Defendant’s] waiver renders 28 U.S.C. Section 1610(a) inapplicable is self‑defeating because, in the absence of a waiver, the property of the Congo would be immune from attachment under Section 1609. We agree with the Fifth Circuit that the waiver merely triggers the exception to the immunity from execution that would otherwise be in effect. ...”

“Rather than end our inquiry, the [Defendant’s] waiver requires that we turn to the second requirement at issue in this case: whether the property was ‘used for a commercial activity in the United States.’ Connecticut Bank of Commerce v. Republic of Congo, 309 F. 3d 240, 251 (5th Cir. 2002) (CBC)] ...”

“The parties dispute the meaning of ‘used for’ in Section 1610(a), and the precise meaning of the term is an issue of first impression in this Circuit. The [Defendant] asks us to adopt the Fifth Circuit’s interpretation of the term. According to the Fifth Circuit: ‘To use property for a commercial activity, within the ordinary meaning of ‘use,’ would be to put the property in the service of the commercial activity, to carry out the activity by means of the property.’ CBC, above at 254.”

“‘What matters under the statute is what the property is ‘used for,’ not how it was generated or produced,’ id. at 251, and not whether the property merely has a ‘nexus or connection to a commercial activity in the United States.’ Id. at 254. In contrast, [Plaintiff] asks us to expand the Fifth Circuit’s definition and determine whether property was used for a commercial activity in the United States by examining the entire underlying activity that generated the property in question.” [Slip op. 7].

The legislative history of Section 1610(a) shows that the property at issue must have been used for a commercial activity in the U.S. Also, the two separate provisions in the F. S. I. A. for execution on property mandate caution in this case. Section 1610(b) is more permissive, allowing execution against any property in the U.S. belonging to an agency or instrumentality of a foreign state. Section 1610(a), however, is more restrictive and allows execution on the property of a foreign state only when it is in the U.S. and is used for a commercial purpose. Thus, the F. S. I. A. limits execution against property directly belonging to a foreign state.

The foreign state’s actual use of the property is determinative. The Court essentially adopts the Fifth Circuit’s test in CBC. Property that is used for a commercial activity in the U.S. if it is put into action, put into service, availed of, or employed for, a commercial activity, not just in

connection or in relation to a commercial activity.

The present Court does not approve, however, of the Fifth Circuit’s reservations to quantifying the number of commercial uses. That would unnecessarily complicate the determination under Section 1610(a). Here, the Defendant’s assets are not being used for commercial activity in the U.S. and thus they are not subject to execution or collection under Section 1610(a).

Citation: Af‑Cap, Inc. v. Chevron Overseas Limited, 475 F.3d 1080 (9th Cir.

2007).

TERRORISM

In challenge by Islamic relief organization to its “Specially Designated Global Terrorist” designation, District of Columbia Circuit upholds listing based on enough record evidence that U.S. and Sudanese entities were unified organizations

In 1985, a Sudanese immigrant founded the Islamic American Relief Agency (Plaintiff or IARA‑USA), based in Columbia, Missouri. It takes part in global humanitarian activities and often cooperates with other organizations. In 2004, the U.S. Department of Treasury, Office of Foreign Assets Control (OFAC), designated Plaintiff’s Sudanese counterpart (IARA) as a “Specially Designated Global Terrorist (SDGT).” IARA allegedly supports persons or organizations that carry out terrorist activities. OFAC also applied the designation to Plaintiff and had its assets frozen.

Plaintiff eventually filed a complaint in U.S. district court. It alleged, inter alia, that the blocking of its assets violates the Administrative Procedure Act (APA) [5 U.S. Code, Subchapter II] and the International Emergency Economic Powers Act (IEEPA) [50 U.S. C. Sections 1701‑1707]. The district court dismissed or entered summary judgment in favor of defendants on all claims. Plaintiff appealed.

The U.S. Court of Appeals for the District of Columbia Circuit affirms, holding that the record below supported the terrorist designation as a branch of IARA.. This is the first challenge to a SDGT designation in this Court based on a branch relationship with an organization that supports

terrorism.

Plaintiff asks the Court to review the designation the same way it would review an “alias” designation in a “Foreign Terrorist Organization” (FTO) case. There the standard is whether the designated entity “so dominates and controls” the alleged alias entity that the government can treat them as one and the same. The Government argued that the alias test does not apply because it did not base the blocking of the assets on that factor. Rather the Court should uphold the blocking if there is enough evidence that Plaintiff and IARA are the same organization even if one entity does not necessarily control the other. The Court agrees.

“We conclude that the Government has the better argument. To determine whether the evidence is sufficient, we must employ a test that reflects the theory on which the assets were blocked. The ‘dominates and controls’ test is appropriate for reviewing the existence of a principal‑agent relationship because, where there is sufficient evidence to find an agency relationship, substantial evidence of the principal’s unlawful activity is sufficient to justify the designation or blocking of the agent. See [Nat’l Council of Resistance of Iran v. Dep’t of State, 373 F.3d 152, 157 (D.C. Cir. 2004)] (concluding that the ‘dominates and controls’ test is an appropriate basis for upholding an alias designation, because of the ‘ordinary principle[] of agency law’ that ‘where a corporate entity is so extensively controlled by its owner that a relationship of principal and agent is created . . . one may be held liable for the actions of the other’).”

“In this case, however, OFAC’s theory was that [Plaintiff] and IARA, along with other branch offices, comprised a single global organization. The Government argues that their relationship, therefore, is more accurately described as one between different offices of the same entity. It follows that, if the record contains substantial evidence that [Plaintiff] is a branch of IARA, then it was proper for OFAC to subject [Plaintiff] to the blocking as a result of IARA’s designation.” [Slip op. 4]

The record shows that both organizations were founded simultaneously, with the U.S. entity having the stated purpose of achieving the objectives and means of the Sudanese counterpart. In 1998, Plaintiff applied to the U.S. Treasury to transfer funds to IARA, its “partner in Sudan.” In a 1995 letter to the “Washington Times” newspaper, Plaintiff’s Executive wrote on behalf of “IARA and its partners” and admitted to being IARA’s branch office in the U.S.

Where national security, foreign policy and administrative law intersect, the standard of review is extremely deferential. Applying such a deferential standard, there is substantial evidence to show the close relationship between the two entities.

OFAC may also block an entity’s assets under IEEPA. The President may exercise his IEEPA authority “to deal with any unusual or extraordinary threat, which has its source in whole or in substantial part outside the United States, if the President declares a national emergency with respect to such threat.” 50 U.S. C. Section 1701(a). OFAC validly relied on that alternative authority.

Citation: Islamic American Relief Agency v. Gonzales, 2007 WL 445938 (D.C.

Cir. 2007).

European Union imposes economic restrictions on Iran. With Common Position 2007/140/CFSP, the EU has implemented U. N. Security Council resolutions and imposed restrictive measures against Iran. They bar the sale or transfer of nuclear and missile technology to Iran, as well as related technical assistance or financing. There is an exception for humanitarian purposes. Further, the Common Position bars the entry of certain individuals into the EU and freezes the assets of specified organizations and individuals, including the Atomic Energy Organisaton of Iran. Citation: Common Position 2007/140/CFSP, 2007 O. J. of the European Union (L 61) 49, 28 February 2007.

United Nations General Assembly approves Convention on Rights of Disabled. On December 13, 2006, the General Assembly voted to promulgate a comprehensive Convention on the Protection and Promotion of the Rights and Dignity of Persons with Disabilities. The Convention would require its member states (1) to guarantee equal rights to life for the disabled (Article 10), (2) to particularly protect disabled women and children (Articles 6 & 7), and (3) to raise universal awareness of the needs of the disabled (Article 8). The Assembly approved an optional Protocol at the same time; it would allow individuals to submit complaints to a Committee on the

Rights of Persons with Disabilities. Citation: U.N. Department of Public Information press release of 13 December 2006; U.N. General Assembly GA/10554 press release of 13 December 2006. Further information on the text of the Convention is available online at http://www.un.org/disabilities/convention.

Iranian’s long sanctuary in Canadian church is over. Amir Kazemian, a 41‑year‑old Iranian man, has spent the better part of three years in sanctuary from a Canadian deportation order at an Anglican church in Vancouver, B. C. before local police arrested him on February 19 last. He said he was afraid to be sent back to Iran where he claimed he had been tortured. The Canada Border Services Agency, however, soon released Kazemian from custody after Citizenship and Immigration officials granted him residency on humanitarian and compassionate grounds. Canada had already accepted his mother as a “political” refugee but not Amir. His attorney

reported that Amir still had to go through various medical and security checks before he could be granted full residency status. Meantime, he no longer needs to hide out. Citation: The Associated Press (online) via FindLaw, Vancouver, Canada, Monday, February 20, 2007, at 01:05:42Z.

D.C. Circuit upholds government limits on funding of AIDS organizations which do not oppose prostitution and trafficking activities. In 2005, DKT International, Inc. sued the U.S. Agency for International Development (AID), alleging that a 2003 law requiring groups to explicitly oppose prostitution and sex trafficking in order to qualify for part of a $15 billion AIDS program violated its free speech rights. DKT provides family planning and HIV/AIDS prevention programs in 11 countries. The group, inter alia, helps to distribute condoms to prostitutes and other sex workers in Vietnam. The federal district court agreed with Plaintiff. On February 27, however, the U.S. Court of Appeals for the D.C. Circuit reversed. In its view, there is no First Amendment violation. Thus, the law does not force DKT to advocate the government’s position on prostitution and sex trafficking; it requires only that, if DKT wishes to receive government funds, it must communicate the message the government has decided to fund. Citation: The Associated Press (via Findlaw), Washington, D.C. , Tuesday, February 28, 2007 at T18:10:22Z (Lara Jakes Jordan, AP writer).

Supreme Court declines to review DVT suit in international air flight context. In Damon v. Air Pacific Ltd. the U.S. Court of Appeals for the Ninth Circuit ruled in 2006 that an Airline’s failure to warn passengers of the risks of “deep‑vein thrombosis” (DVT) is not an “accident” under the Convention for the Unification of Certain Rules Relating to International Transportation by

Air, 49 Stat. 3000, T. S. 876, 2 Bevans 983, 137 U. N. T. S. 11 (1933) (the “Warsaw” Convention). The Convention regulates the circumstances under which international air carriers may be liable for injuries or deaths of passengers or damage to goods. DVT is a potentially serious condition in which blood clots develop in the lower extremities after extended periods of

inactivity in a tight seating position. Although the Airline did include information on DVT in its in‑flight magazines, the Plaintiff complained that it failed to alert passengers about where to find the “inconspicuous” information. The Ninth Circuit’s decision seems generally consistent with

DVT rulings by courts in England, Canada, Australia and France. In Damon, the U.S. Supreme Court recently denied certiorari. Citation: Damon v. Air Pacific Ltd., 2006 WL 2817997 (9th Cir. 2006) (unpub’d) , cert. denied, 2007 WL 506091 (U.S. 2007).

Five new non‑permanent member nations start terms on U. N. Security Council. On November 7 last year, the U.S. Department of State issued the following Press Statement: “Today’s election of Panama to the non‑permanent Latin American seat on the U. N. Security Council completes this year’s non‑permanent election process. The United States congratulates Panama, South Africa, Indonesia, Italy, and Belgium on their election to the Security Council, and looks forward to working with them on the many important issues before the Council. These five countries will begin their two‑year terms on January 1, 2007. We also congratulate Guatemala on its serious and dignified campaign for the Security Council. Guatemala would be an excellent member of the Council, and we are pleased that Guatemala has announced its candidacy for the Council for 2012‑2013.” Citation: Press Statement #2006/1012 by U.S. Department of State Spokesman, Sean McCormack, Washington, D.C. , Tuesday, November 7, 2006.

Dutch Court substantially reduces Dutch attorney’s fee for negotiating return to U.S. heirs of art seized by Nazis. In the 1930s, Jacques Goudstikker was the Netherlands’ largest art dealer. He fled Europe at the start of World War II with his wife and young son, but died on the voyage. He left behind about 1,300 carefully documented artworks. After the Nazi invasion, Hermann Goering seized around 800 works. The Dutch government got about 300 of them back after the war. But 267 works, worth tens of millions of dollars remained in Dutch art museums. In 1996, Goudstikker’s family began trying to recover the Dutch works, despite judicial approval of an inadequate settlement with Goudstikker’s widow in 1952. She had settled under protest and in ignorance of the Dutch government’s extensive holdings. In the late 1990s, an independent commission recommended that the Dutch government return the works. Dutch Lawyer Roelof van Holthe tot Echten, who had negotiated the settlement, then sent the heirs a fee claim of $15.7 million, or about 20% of the estimated value of the art involved. Goudstikker’s heirs, who now live in Connecticut, offered to pay Echten an hourly rate instead. The Hague District Court agreed with the heirs and, on February 16, 2007, awarded Mr. Echten $2.5 million or $425 per hour, an 84% reduction. Citation: The Associate Press (online) via Findlaw, Amsterdam, Friday, February 16, 2007 at T18:10:22Z (byline of Toby Sterling, AP writer).

Federal Court upholds complaint in suit alleging that bank financed Palestinian bombings. In a New York federal court, the families of certain suicide bombing victims filed a damage suit under the Anti‑Terrorism Act (ATA) against the Arab Bank, PLC, based in Jordan. The perpetrators belonged to a terrorist group specially designated by the U.S. Government. Plaintiffs’ main charge is that the Defendant basically acted as a “paymaster” through its branch offices. It allegedly used these offices knowingly to funnel millions of dollars to “martyred” Palestinian bombers or their beneficiaries. Defendant moved to dismiss for failure to state a claim under the ATA. In denying the motion, the judge concluded that Plaintiffs had adequately pled that Defendant knowingly and intentionally took part in a common plan with organizations

and individuals it knew were involved in terrorism, that Defendant’s financial help substantially aided these organizations and that its benefit plan encouraged many to volunteer their services in the cause. These acts, if proven, fell within the broad scope of the ATA. Citation: Almog v. Arab Bank, PLC,2007 WL 214433 (E. D. N. Y. 2007) as reported by Findlaw, Inc. (online) http://news.findlaw.com.

Former Haitian Colonel loses federal human rights suit. On February 23, 2007, a federal jury in Miami found Colonel Carl Dorelien, a former member of the Haitian Military’s High Command, liable for torture, extrajudicial killing, arbitrary detention and crimes against humanity suffered by Plaintiffs Lexiuste Cajuste, Marie Jeanne Jean and her two young children. The District Court ordered Colonel Dorelien to pay a total of $4.3 million to the Plaintiffs in compensatory and punitive damages. Under Dorelien’s command, Haitian military forces arbitrarily detained and severely tortured Mr. Cajuste because of his role as a union organizer and pro‑democracy activist. Fourteen years later, Mr. Cajuste still suffers severe physical disabilities. Dorelien’s refuge in the U.S. became widely known after he won $3.2 million in the Florida state lottery in 1997. This case reportedly represents the first time that a U.S. jury has held a former member of the Haitian military responsible for the widespread human rights abuses that the military committed against the civilian population during the dictatorship from 1991 to 1994. The San Francisco‑based Center for Justice and Accountability (CJA) and the large private firm of Holland & Knight are representing the Plaintiffs. Citation: Human Rights News, the American Bar Association, Monday, February, 26, 2007; see also www.cja.org.