2010 International Law Update, Volume 16, Number 4 (April)

2010 International Law Update, Volume 16, Number 4 (April)

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

CHILD ABDUCTION

In dispute between Israeli citizens over child custody, Eighth Circuit rules that habitual residence of children was in U.S. based on Hague Abduction Convention and implementing statute and Court rejects argument that Israeli consent decree and Missouri divorce decree determine children's habitual residence

In 1994, Sagi (F or father) and Tamar (M or mother) Barzilay, both Israeli citizens, got married in Israel. Their first child arrived two years later. In 2001, their employer transferred the family to the U.S. where they had two more children. The relationship eventually became rocky, however, and so they divorced in January 2005 in Missouri. The divorce decree gave them joint custody, with M having "primary parental responsibility and physical custody." The divorce decree also contained a repatriation clause, which required F, M and the children to live in the same country.

Thus, if either F or M moved back to Israel, the other party must do the same.

F moved to Israel in September 2005 but M refused to do the same. She did, however, take the children for a summer visit in June 2006. During that visit, F obtained an ex parte order in the Kfar Saba court that prohibited the removal of the children from Israel. Shortly before M's and the children's scheduled return to the U.S., the parties filed a consent judgment with the court. It provided [1] that M would repatriate to Israel in August 2009, [2] that M would not take any further action against F in Missouri family court, and [3] that the Israeli court is to be the sole authority as to the children's immigration, repatriation and custody.

Nevertheless, M went ahead and petitioned a Missouri court to remove the repatriation agreement from the original decree, and to limit F's visitation rights. The Missouri court granted the petition. In 2007, F filed the instant case in federal court pursuant to the International Child Abduction Remedies Act (ICARA), 42 U.S.C. § 11601, and the Hague Convention on the Civil Aspects of International Child Abduction, Oct. 25, 1980, T.I.A.S. No. 11,670, 1343 U.N.T.S. 49 (the Convention).

In his complaint, F alleged that Israel was the children's "habitual residence" within the meaning of the Convention, and that M and the children had a legal duty move back to Israel. Disagreeing, the District Court found that the U.S. had become the children's habitual residence, and dismissed F's petition because retention of a child in the state of his or her habitual residence is not wrongful under the Convention.

M appealed. The Eighth Circuit, however, affirms. The controlling issue is the children's habitual residence since the Convention does not bar the retention of a child in the state of its habitual residence.

"The Hague Convention, to which the United States and Israel are both signatories, was adopted to address the problem of child abduction by family members, which not infrequently occurs in connection with transnational custody disputes. The Convention's purpose is ‘to protect children internationally from the harmful effects of their wrongful removal or retention and to establish procedures to ensure their prompt return to the State of their habitual residence....'"

"... The Convention seeks to deter abduction by ‘depriving the abductor's actions of any practical or juridical consequences.' ... It accomplishes this goal—not by establishing any new substantive law of custody—but rather by acting as a forum selection mechanism, operating on ‘the principle that the child's country of ‘habitual residence' is ‘best placed to decide upon questions of custody and access.' ... The purpose of proceedings under the Hague Convention is thus not to establish or enforce custody rights, but only ‘to ‘provide for a reasoned determination of where jurisdiction over a custody dispute is properly placed.'' ..." [...]

"‘The key inquiry under the Convention is whether a child has been wrongfully removed from the country of its habitual residence or wrongfully retained in a country other than that of its habitual residence." ... According to the Convention,"

"The removal or the retention of a child is to be considered wrongful where:

(a) it is in breach of rights of custody attributed to a person, an institution or any other body, either jointly or alone, under the law of the State in which the child was habitually resident immediately before the removal or retention; and

(b) At the time of removal or retention those rights were actually exercised, either jointly or alone, or would have been so exercised but for the removal or retention. Hague Convention art. 3."

"Thus, in order to determine whether an ICARA petition merits relief, ‘a court must ... determine [1] when the removal or retention took place, [2] what the habitual residence of the child was immediately prior to the removal, [3] whether the removal or retention violated the Petitioner's custody rights under the law of the habitual residence, and [4] whether the Petitioner was exercising those rights at the time of the removal or retention.' ..." [...]

As the Court reminds us: "Proceedings under [Art. 19 of] the Hague Convention and pursuant to ICARA do not reach the merits of an underlying custody dispute. (‘A decision under this Convention concerning the return of the child shall not be taken to be a determination on the merits of any custody issue.'); 42 U.S.C. § 11601(b)(4) [(‘The Convention and this chapter empower courts in the United States to determine only rights under the Convention and not the merits of any underlying child custody claims.')]. Rather, ‘the district court is to ascertain `only whether the removal or retention' of a child was ‘wrongful' under the law of the child's ‘habitual residence,' and if so, to order the return of the child to the place of ... ‘habitual residence' for the court there to decide the merits of the custody dispute.' ..." [916‑7].

The Court then applies Convention law to the case at hand. "The first step in determining a child's habitual residence is to discern when the alleged wrongful removal or retention took place, for ‘the text of the Convention directs courts to only one point in time in determining habitual residence: the point in time ‘immediately before the removal or retention.' ... Because this case does not present the typical abduction scenario, it is not entirely clear when the alleged wrongful retention commenced. ... Based on [F's] testimony and a series of e‑mails exchanged between the parties, the district court determined that it began in early Spring 2006, by which time F had informed M that he considered her to be in breach of the repatriation agreement." [...]

"Having concluded that the alleged wrongful retention began in early 2006, the district court proceeded to consider the factors relevant to the determination of habitual residence: ‘[1] the settled purpose of the move to the new country from the child's perspective, [2] parental intent regarding the move, [3] the change in geography, [4] the passage of time, and [5] the acclimatization of the child to the new country.' ..."

"The ‘settled purpose' of a family's move to a new country is a central element of the habitual residence inquiry. ... ‘This settled purpose need not be to stay in a new location forever, but the family must have a ‘sufficient degree of continuity to be properly described as settled.' ... Because two of the Barzilay children had lived their whole lives in Missouri, the eldest had lived there for five years, and there was no indication in the record that the children had spent any significant amount of time in another country, the district court concluded that—from the children's perspective—the settled purpose of the family's residence in Missouri was to remain there permanently." [...]

"Finally, the district court considered ‘the change in geography, the passage of time, and the acclimatization of the children to the new country.' ... It concluded that the children were well acclimatized to life in the U.S.. The eldest child was, after all, the only one who had experienced a significant change in geography, and by 2006, she had been in the U.S. for approximately five years ... The younger two had lived their entire lives in Missouri. ..."

"Based on the foregoing considerations, we agree with the district court's conclusion that the children's country of habitual residence under the Hague Convention was the United States. [F] has pointed to no evidence suggesting [that] the district court's factual findings are clearly erroneous or that its analysis is otherwise unsound. Indeed, he has offered no evidence that his children have spent any significant amount of time outside the United States since 2001 or that they have been given any reason to believe [that] their home is anywhere but Missouri. The United States is the country where the Barzilay children have spent most or all of their young lives, and there can be little question that it is consequently their habitual residence within the meaning of the Hague Convention. ..." [...]

"We also reject the claim that either the Kfar Saba consent judgment or the Missouri repatriation agreement is an enforceable stipulation of the children's habitual residence. We have held that ‘habitual residence may only be altered by a change in geography and passage of time.' ... The notion that parents can contractually determine their children's habitual residence without regard to the actual circumstances of the children is thus entirely incompatible with our precedent. Indeed, [F] has not cited a decision by any court anywhere in the world embracing such a proposition." [...]

"Any idea that parents could contractually determine their children's habitual residence is also at odds with the basic purposes of the Hague Convention. The Convention seeks to prevent the establishment of ‘artificial jurisdictional links' as a means to remove the child from the ‘family and social environment in which its life has developed.' ... It is difficult to imagine a jurisdictional link more artificial than an agreement between parents stating that their child habitually resides in a country where it has never lived." [...]

"... [W]hile [F] characterizes the Missouri repatriation agreement and the Kfar Saba consent judgment as prospective stipulations of habitual residence, they are in fact [merely] custody decrees. ... Indeed, F must agree with that proposition, for they are the bases for his claim that retention of the children in Missouri is wrongful. See Hague Convention art. 3 [(‘The removal or retention of a child is to be considered wrongful where ... it is in breach of rights of custody attributed to a person....').]"

"Once the agreements are seen in this way, the fundamental problem with [F's] argument becomes clear. He is trying to use the Hague Convention as a vehicle to enforce his custody rights, simply by relabeling them as stipulations of habitual residence. ... Regardless of how they are labeled, however, these agreements amount to provisions relating to the custody of the children, and ‘the Convention is certainly not a treaty on the recognition and enforcement of decisions on custody.' ..."

"While [F] has framed this case as a complex matter of first impression, it is in fact relatively simple. Immediately before the alleged wrongful retention in this case began, the children's habitual residence under the Hague Convention was in Missouri, where they had lived without interruption for five years. Under the Convention, it was consequently for the courts of Missouri to determine whether [M's] refusal to bring the children back to Israel was indeed wrongful and if so, to fashion an appropriate remedy."

"Instead of seeking to enforce his custody rights in the Missouri courts, however, [F] went to the court in Kfar Saba because, as he candidly testified in the district court, ‘it proposed better chances for me winning.' Having obtained a favorable judgment there, he then turned to the federal court seeking enforcement of his newly minted custody rights through an ICARA petition. This course of litigation not only betrays a fundamental misunderstanding of the Hague Convention, but also precisely the sort of international forum shopping the Convention seeks to prevent. The district court correctly withheld the relief [F had] requested." [600 F.3d 918‑922]

Citation: Barzilay v. Barzilay, 600 F.3d 912 (8th Cir. 2010).

CRIMINAL LAW

In case of racketeering enterprise with activities in both U.S. and Mexico, Seventh Circuit rules that 18 U.S.C. § 1959 that deals with violent crimes in aid of racketeering activity applies extraterritorially to murder that occurred in Mexico

Julio Lejia‑Sanchez (Defendant) was the purported leader of a criminal organization in Mexico that produced fraudulent driver's licenses, social security cards, permanent residence cards, and other government‑issued documents. According to the indictment, Defendant's organization smuggled many of its employees and customers into the U.S. from Mexico.

At issue in this case is Defendant's motion to dismiss Count III of the indictment; it charged that Defendant had violated 18 U.S.C. 1959 dealing with violent crimes in aid of racketeering activity by arranging for the murder in Mexico of one of his former employees named Guillermo Jimenez Flores. The district court dismissed Count III, ruling that § 1959 does not apply extraterritorially. The United States duly appealed and the Seventh Circuit reverses.

The United States argued that criminal statutes apply to criminal actions even if some part is conducted abroad, relying on United States v. Bowman, 260 U.S. 94 (1922). The district court, however, had apparently relied on EEOC v. Arabian American Oil Co., 499 U.S. 244 (1991) and other decisions that established a presumption that civil statutes do not apply to activity outside the United States.

In the Court's view: "Civil decisions such as Aramco cannot implicitly overrule a decision holding that criminal statutes are applied differently. The main reason for requiring a clear legislative decision before applying a civil statute to activity outside our borders is that nations often differ with respect to [what constitutes] acceptable [non‑criminal] conduct. See Aramco, supra at 248. Title VII of the Civil Rights Act of 1964, the statute at issue in Aramco, forbids religious discrimination, but other nations may impose religious tests. [...]"

"Nations differ in the way they treat the role of religion in employment; they do not differ to the same extent in the way they treat murder. They may use different approaches to defenses, burdens of proof and persuasion, the role of premeditation, and punishment, but none of these is at stake here. It is not as if murder were forbidden by U.S. law but required (or even tolerated) by Mexican law. The crime in Bowman was fraud; the Court observed that fraud was unlawful in all of the places where Bowman's scheme was implemented."

"Whether or not Aramco and other post‑1922 decisions are in tension with Bowman, we must apply Bowman until the Justices themselves overrule it. [‘If a precedent of this Court has direct application in a case, yet appears to rest on reasons rejected in some other line of decisions, the Court of Appeals should follow the case which directly controls, leaving to this Court the prerogative of overruling its own decisions.' Rodriguez de Quijas v. Shearson/American Express, Inc., 490 U.S. 477, 484 ... (1989).] ... The Supreme Court has neither overruled Bowman nor suggested that the courts of appeals are free to reconsider its conclusion." [798‑799]

"The Court also clarifies that Bowman does not require statutes to always apply extraterritorially. Instead, courts must consider whether the language and function of the statute so require. See Restatement (Third) of Foreign Relations Law, Section 402(1) (U.S. may apply its law to conduct that either takes place ‘in substantial part' within the U.S. or has a ‘substantial effect' in the U.S."

"Any international repercussions of the decision to prosecute [Defendant] are for the political branches to resolve with their counterparts in Mexico, rather than matters for the judicial branch. That diplomacy has occurred already. [Defendant] fled to Mexico, which extradited him to the United States to face all of the indictment's charges. The United States promised not to seek or impose the death penalty for the murder; Mexico was satisfied with that undertaking and saw no reason why the United States should not apply its substantive rules."

"Given the holding of United States v. Alvarez‑Machain, 504 U.S. 655 ¼ (1992), that prosecution in the United States is permissible even if the defendant arrives [here] by kidnapping rather than formal extradition, this prosecution is easy to support. The substantive offense in Alvarez‑Machain was the murder in Mexico, by a Mexican national, of two persons who were helping to enforce U.S. drug laws; the statute said to be violated in Alvarez‑Machain was § 1959, because the murders helped an international drug ring continue in business."

"The Supreme Court was not asked to hold in Alvarez‑Machain that applying § 1959 in this fashion would have been impermissibly extraterritorial, so its decision is not direct authority. But we conclude that what the parties assumed in Alvarez‑Machain that § 1959 applies to a murder in another nation designed to facilitate the operation of a criminal enterprise in the United States is indeed the law." [602 F.3d 801‑802].

Citation: United States v. Leija‑Sanchez, 602 F.3d 797 (7th Cir. 2010).

SOVEREIGN IMMUNITY

Second Circuit affirms dismissal of civil lawsuit against bank that was instrumentality of Turkish government because, under Foreign Sovereign Immunities Act, negligence that allegedly took place in Turkey did not have direct effect in U.S.

Theresa Guirlando (Plaintiff) filed a lawsuit against T.C. Ziraat Bankasi A.S. bank (Defendant), claiming that Defendant was negligent and enabled the theft of money from her Turkish bank account. It was Mevlut Cicek , Plaintiff's own husband who withdrew most of her life savings from the Turkish bank account. Plaintiff is a 67‑year‑old U.S. citizen, who in 2006 had married Cicek apparently within the U.S. Cicek, however, was an illegal alien at the time and the U.S. had deported him to Turkey in 2007. Upon Cicek's request, Plaintiff had sold her house and car and followed him to Turkey, carrying a check for $251,156.63.

Cicek took Plaintiff to a Defendant's branch bank to deposit the check. The bank employees allegedly made Plaintiff put the money into a joint account with Cicek thus enabling him to withdraw $200,000 later on. Plaintiff also found out that Cicek was already married to another woman. Upon her return to the U.S., Plaintiff filed the present lawsuit against Defendant in a New York federal court.

All parties agree that Defendant bank is an instrumentality of the Turkish Government. The District Court dismissed for lack of subject matter jurisdiction under section 1605(a)(2) of the Foreign Sovereign Immunities Act (FSIA), because the Defendant's alleged actions did not cause a direct effect in the U.S. Plaintiff noted a timely appeal. The Second Circuit affirms.

The "commercial activity exception" of FSIA section 1605 provides that a foreign state or its instrumentality shall not be immune from the jurisdiction of the U.S. courts if the action is based upon an act outside the U.S. that caused a direct effect in the U.S. The mere fact that a foreign state's commercial activity outside the U.S. caused physical or financial injury to a U.S. citizen, however, does not amount to producing a direct effect in the U.S.

"Plaintiff's complaint alleges principally that, in Turkey, Defendant's employees [1] told her, falsely, that she could not open an individual checking account into which to deposit her Citibank check, [2] caused her to open a disjunctive joint account from which funds could be withdrawn by one joint owner without the consent of the other, rather than an account for which the consent of both owners would be required for a withdrawal, and [3] notified Cicek, rather than Plaintiff, when the funds had arrived in the new account with Defendant.

She asserts that these acts had a direct effect in the United States both because they resulted in the payment of $251,156.63 from her New York Citibank account and because she, who was an American citizen, lost more than $200,000. Regardless of how the ‘legally significant act' test is formulated, we cannot conclude that either event constituted a direct effect in the United States within the meaning of § 1605(a) (2)."

"Plaintiff's contention that the requisite direct effect occurred because she ‘returned to the United States where she lives in much reduced circumstances' ... is quickly disposed of for two reasons. ¼ ‘[T]he fact that an American individual . . . suffers some financial loss from a foreign tort cannot, standing alone, suffice to trigger the [commercial activity] exception.' ... Second, Plaintiff's financial loss was not a direct result of the Bank's denying her the right to open an individual account, for between that conduct and her impoverishment there was an intervening element, to wit, Cicek's larcenous withdrawals." [...]

"Plaintiff's contention that the requisite direct effect in the United States consisted of the transfer of the funds out of her New York Citibank account requires somewhat more discussion, but it suffers from multiple flaws. First, we note that her complaint that Defendant caused her to open a disjunctive joint account, rather than a two‑signature account from which withdrawals could not be made without the consent of both owners, loses considerable significance upon scrutiny."

"Although the latter type of account would have prevented Cicek from withdrawing funds without Plaintiff's knowledge and consent, it would also have given him control over Plaintiff's own ability to withdraw the funds. Thus, the two‑signature joint account that Plaintiff purports to have preferred would have deprived Plaintiff of independent access to her money. Her more logical complaint is that Defendant did not allow her to open an individual account."

"Even as to Defendant's refusal to allow Plaintiff to open an individual account, however, there are several flaws in the contention that that conduct had a direct effect in the United States. First, if Plaintiff had deposited her check into an individual account as she wished, her money still would have left the United States. And while she argues that the transfer of her money from New York had a direct effect in the United States, it is clear from the face of the Complaint that that transfer is not what caused Plaintiff's injury. [As of] the arrival of Plaintiff's funds in Turkey, Plaintiff had lost nothing. What caused her loss were the acts of Cicek—after the money had left the United States—in withdrawing most of the money from the Turkish account without Plaintiff's consent."

"Second, as held in the Antares litigation, although the breach of an agreement ‘to pay [money] . . . in New York' has the requisite direct effect in the United States, see Antares Aircraft, L.P. v. Federal Republic of Nigeria, 948 F.2d 90, 95 (2d Cir. 1991)] ... ‘[t]he transfer of funds out of [a] New York bank account. . . [is] not [itself] sufficient to place the effect of [a] defendant's] conduct `in the United States' within the meaning of § 1605(a)(2),' ... Having engaged Defendant for the express purpose of depositing her New York check into a new Turkish account, an act that by its nature would result in her money leaving the United States, Plaintiff is not entitled to have the courts deny immunity to Defendant on the theory that it was the conduct of Defendant that caused that effect." [Slip op. 20‑25]

Finally, the Court notes that the dismissal for lack of jurisdiction here does not leave Plaintiff without recourse. Defendant stated at the hearings that it is amenable to suit in the Turkish courts and will not challenge the appropriateness of Turkey as the forum for litigating this action.

Citation: Guirlando v. T.C. Ziraat Bankasi A.S., No. 09‑0478‑cv (2d Cir. April 8, 2010).

SOVEREIGN IMMUNITY

Tenth Circuit rejects preliminary FSIA jurisdictional challenge by Indonesian Government‑controlled bank because initial evidence was minimal although limited discovery is often permissible to determine whether "commercial activity" exception to FSIA does apply

Theodore Hansen agreed to sell various gas stations, convenience stores and other assets to Native American Oil Refinery Company (NARCO). To secure the deal, NARCO provided bank guarantees of $90 million provided by the Indonesian entity PT Bank Negara Indonesia (Persero) TBK ("BNI"). BNI also issued two standby letters of credit for $25 million and a $3 million bank guarantee to the other Plaintiffs. When NARCO defaulted, BNI refused to honor the financial instruments, claiming they were forgeries.

The Plaintiffs sued in Utah district court. BNI moved for Judgment on the Pleadings because of sovereign immunity. Plaintiffs presented evidence from individuals who had contacted BNI regarding the financial instruments and received information that indicated their authenticity. BNI presented 15 declarations from BNI employees that denied that authenticity.

The district court denied BNI's motion because BNI had failed to show that the "commercial activity" exception to sovereign immunity did not apply. The district court, however, did order discovery limited to facts bearing on this point.

BNI appealed. The main issue on appeal is whether BNI or any of its representatives in fact generated the financial instruments assigned to the Plaintiffs thus triggering the "commercial activity" exception to the Foreign Sovereign Immunities Act (FSIA), 28 U.S.C. Sections 1330(a), 1603‑1605. The Tenth Circuit affirms the district court's denial of judgment on the pleadings, and orders the dismissal of the discovery order for lack of jurisdiction.

The Court first turns to BNI's motion for judgment on the pleadings. "Courts apply a burden‑shifting analysis to determine whether a foreign state or its instrumentality is immune under the FSIA. ... Under this analysis, once the defendant establishes that it is a foreign state entitled to immunity, the plaintiff bears the burden of production to make an initial showing that an FSIA exception to immunity applies. ... If the plaintiff carries its initial burden, the defendant bears the ultimate burden of proving by a preponderance of the evidence that the claimed exception does not apply in the particular case. ..."

"[Plaintiffs] concede that BNI is an instrumentality of a foreign state for the purposes of the FSIA. They argue, however, that the FSIA's commercial activity exception applies in this case. Under the commercial activity exception in section 1605(a)(2): ‘A foreign state shall not be immune from the jurisdiction of courts of the United States or of the States in any case (2) in which the action is based [1] upon a commercial activity carried on in the United States by the foreign state; or [2] upon an act performed in the United States in connection with a commercial activity of the foreign state elsewhere; or [3] upon an act outside the territory of the United States in connection with a commercial activity of the foreign state elsewhere and that act causes a direct effect in the United States.’"

"[Plaintiffs] contend, however, that the evidence they presented satisfies all three of the independent prongs of the commercial activity exception. Specifically, Plaintiffs argue that BNI's authentication and subsequent rejection of the guarantees and letters of credit in New York constitute both commercial activity carried on in the United States by a foreign state and acts performed in the United States in connection with commercial activity of a foreign state elsewhere."

"Furthermore, [Plaintiffs] contend that BNI's generation of the financial instruments in Indonesia, its issuance of the instruments directly to parties in the United States, and its refusal to honor the instruments, which caused significant loss to [Plaintiffs] in the United States, constitute commercial acts outside the United States that caused a direct effect in the United States." [...]

"As discussed above, the evidence presented to the district court consisted of fifteen declarations from BNI employees and the testimony of [Plaintiffs] and Mr. Jensen. The BNI declarations all dispute the authenticity of the BNI guarantees and letters of credit and all deny any BNI participation in the generation of those instruments. On the other hand, the evidence presented by [Plaintiffs] suggests that BNI employees were involved with the generation of the financial instruments and at the very least authenticated and then subsequently rejected them."

"Thus, the district court was presented with minimal and primarily self‑serving evidence from both BNI and [Plaintiffs]. On this record and at this early stage in the litigation, the district court's finding that BNI did not show by a preponderance of the evidence that none of its officers or employees actually participated in the alleged commercial activity was not clearly erroneous. Accordingly, it did not err in denying BNI's motion for judgment on the pleadings." [1062‑3]

The Court then turns to the validity of the discovery order. "The immunity provided under the FSIA protects foreign sovereigns from all the burdens of litigation, including the general burden of responding to discovery requests. ... When, however, there is a factual question regarding a foreign sovereign's entitlement to immunity, and thus a factual question regarding a district court's jurisdiction, the district court ‘must give the plaintiff ample opportunity to secure and present evidence relevant to the existence of jurisdiction.' ..."

"Thus, there is a ‘tension between permitting discovery to substantiate exceptions to statutory foreign sovereign immunity and protecting a sovereign's or sovereign agency's legitimate claim to immunity from discovery.' ... In light of this tension, other circuits have concluded that ‘at the very least, discovery should be ordered circumspectly and only to verify allegations of specific facts crucial to an immunity determination.' ..."

"This is not to say, however, that a FSIA defendant may immediately appeal from a discovery order that it considers impermissibly broad. ... In the qualified immunity context, for example, we have held that discovery orders ‘which are narrowly tailored to uncover only those facts needed to rule on the immunity claim' are not immediately appealable because they do not subject the defendant to the burdensome pretrial discovery that qualified immunity protects against. ..."

"Given that FSIA sovereign immunity affords defendants the same pre‑trial protection against broad discovery that is unrelated to the question of immunity to defendants, ... we find the ... rule equally applicable in the FSIA context. ... Accordingly, we have jurisdiction to consider BNI's claim only if the district court's order did not adequately limit permissible discovery to the question of BNI's immunity. ..."

"As discussed above, BNI's claim of immunity turns solely on the factual question of whether BNI officers or employees were actually involved in the commercial activity with all [Plaintiffs]. The district court ordered that [Plaintiffs] ‘shall be entitled to conduct limited jurisdictional discovery on whether BNI, or its officials, conducted commercial activity that satisfies the commercial activity exception under the FSIA.' Hansen v. Native Am. Refinery Co., et al., No. 2:06‑CV‑109 (D.Utah Aug. 24, 2009) (order denying BNI's motion for judgment on the pleadings and granting in part and denying in part appellees' motion to stay discovery)."

"Furthermore, at the hearing on BNI's motion for judgment on the pleadings, the district court assured BNI that ‘if the discovery gets to a point where you feel that it is unnecessarily burdensome, I will entertain a motion to limit it appropriately.' Thus, the record reflects that the district court narrowly tailored its discovery order to the precise jurisdictional fact question presented. Accordingly, we do not have jurisdiction to consider BNI's appeal of the order. ..." [1063‑5].

Citation: Hansen v. PT Bank Negara Indonesia (Persero), TBK, 601 F.3d 1059 (10th Cir. 2010).

INTERNATIONAL RIGHTS OF DOMESTIC U.S. PRISONERS

Ninth Circuit rejects lawsuit by federal prisoners claiming that their low salaries violate the Fifth Amendment and International Law

Tony Serra and other current and former federal prisoners (Plaintiffs) brought the following lawsuit against the U.S. Bureau of Prisons and other parties (jointly Defendants). The suit challenged the low wages the Federal Prison Industries or the Inmate Work and Performance Pay Program pay them. Plaintiffs earn between $19 and $145 per month, with hourly rates as low as 19 cents.

In their federal lawsuit, Plaintiffs alleged that the low wages violated articles 7 through 9 of the International Covenant on Civil and Political Rights (ICCPR) (December 16, 1966, 999 U.N.T.S. 171). The district court granted the Defendants' motion to dismiss for failure to state a claim upon which relief can be granted.

This appeal followed. The Ninth Circuit affirms, holding that domestic U.S. prisoners have no judicially enforceable right to be paid for their work under international law.

"Plaintiffs fail to state a viable claim under the ICCPR. ‘For any treaty to be susceptible to judicial enforcement it must both confer individual rights and be self‑executing.' ... A treaty is self‑executing when it is automatically enforceable in domestic courts without implementing legislation. ... The ICCPR fails to satisfy either requirement because it was ratified [by the U.S. ‘on the express understanding that it was not self‑executing and so did not itself create obligations enforceable in the federal courts.' Sosa v. Alvarez‑Machain, 542 U.S. 692 ... (2004)."

"The Standard Minimum Rules for the Treatment of Prisoners (SMRs) ... similarly fail as a source of justiciable rights. This document was adopted by the First United Nations Congress on the Prevention of Crime and the Treatment of Offenders in 1955 ‘to set out what is generally accepted as being good principle and practice in the treatment of prisoners and the management of institutions.' ... It is not a treaty, and it is not binding on the United States. Even if it were a self‑executing treaty, the document does not purport to serve as a source of private rights. ..."

"Finally, Plaintiffs assert that ‘the customs and usages' of the nations of the world, as revealed in these and other sources, form customary international law entitling them to higher wages. This claim fails because customary international law is not a source of judicially enforceable private rights in the absence of a statute conferring jurisdiction over such claims. See Princz v. Federal Republic of Germany, 26 F.3d 1166, 1174 n. 1 (D.C. Cir. 1994) (‘While it is true that `international law is part of our law,' it is also our law that a federal court is not competent to hear a claim arising under international law absent a statute granting such jurisdiction.' ... Plaintiffs can point to no statute that brings their claim within our purview."

"The Alien Tort Claims Act (ATCA) is the only possible vehicle for a claim like Plaintiffs' because no other statute recognizes a general cause of action under the law of nations. ... The ATCA grants to the district courts ‘original jurisdiction of any civil action by an alien for a tort only, committed in violation of the law of nations or a treaty of the United States.' 28 U.S.C. § 1350.

"We need not decide whether Plaintiffs' proposed minimum wage for prison labor ‘rests on a norm of international character accepted by the civilized world and defined with a specificity comparable to the features of Blackstone's 18th‑century paradigms,' ... because Plaintiffs have conceded that they are not aliens. ... The ATCA admits no cause of action by non‑aliens. See Yousuf v. Samantar, 552 F.3d 371, 375 n. 1 (4th Cir. 2009) (‘To the extent that any of the claims under the ACTA are being asserted by plaintiffs who are American citizens, federal subject‑matter jurisdiction may be lacking.')."

"We have allowed ourselves a few sidelong glances at the law of nations in non‑[ATCA] cases by applying the canon of statutory construction that ‘where fairly possible, a United States statute is to be construed as not to conflict with international law or with an international agreement with the U.S.' Munoz v. Ashcroft, 339 F.3d 950, 958 (9th Cir. 2003) (quoting Restatement (Third) of Foreign Relations Law § 114 (1987). The canon is derived from Chief Justice Marshall's statement that ‘an act of Congress ought never to be construed to violate the law of nations if any other possible construction remains, and consequently can never be construed to violate neutral rights, or to affect neutral commerce, further than is warranted by the law of nations as understood in this country.' Murray v. The Schooner Charming Betsy, 6 U.S. (2 Cranch) 64, 118, 2 L.Ed. 208 (1804). The Charming Betsy canon is not an inviolable rule of general application, but a principle of interpretation that bears on a limited range of cases. Mindful that ‘Congress has the power to legislate beyond the limits posed by international law,' ... we do not review federal law for adherence to the law of nations with the same rigor that we apply when we must review statutes for adherence to the Constitution. ..."

"We invoke the Charming Betsy canon only where conformity with the law of nations is relevant to considerations of international comity, ... and only ‘where it is possible to do so without distorting the statute.' ... We decline to determine whether Plaintiffs' rates of pay were in violation of the law of nations because this case meets neither condition for applying the canon."

"First, the purpose of the Charming Betsy canon is to avoid the negative ‘foreign policy implications' of violating the law of nations ... and Plaintiffs have offered no reason to believe that their low wages are likely to ‘embroil the nation in a foreign policy dispute.' ... That the courts should ever invoke the Charming Betsy canon in favor of United States citizens is doubtful, because a violation of the law of nations as against a United States citizen is unlikely to bring about the international discord that the canon guards against ..."

"In The Charming Betsy, the status of the ship's owner as a Danish subject, and thus a neutral in the conflict between the United States and France, was critical to the Court's conclusion that the Non‑Intercourse Act of 1800 should not be interpreted to permit the seizure and sale of his ship. ... We have never employed the Charming Betsy canon in a case involving exclusively domestic parties and domestic acts, ... nor has the Supreme Court. ... As a general rule, domestic parties must rely on domestic law when they sue each other over domestic injuries in federal court. We need not consider whether the statutory and regulatory regime of federal inmate compensation conflicts with the law of nations because Plaintiffs, as United States citizens and residents, have not demonstrated that their low wages have any possible ramifications for this country's foreign affairs."

"Second, ‘the Charming Betsy canon comes into play only where Congress's intent is ambiguous,' ... and there is nothing ambiguous about the complete discretion that Congress vested in the Attorney General with regard to inmate pay. ... Congress is not constrained by international law as it is by the Constitution. See United States v. Aguilar, 883 F.2d 662, 679 (9th Cir. 1989) (‘In enacting statutes, Congress is not bound by international law; if it chooses to do so, it may legislate contrary to the limits posed by international law.'...), cert. denied, 498 U.S. 1046 ... (1991). As a result, ‘we are bound by a properly enacted statute, provided it be constitutional, even if that statute violates international law.' ..." [1196‑1200] The Court of Appeals therefore affirms.

Citation: Serra v. Lappin, 600 F.3d 1191 (9th Cir. 2010).

EU Council approves U.S.‑EU Agreement on processing and transfer of Financial Messaging Data to track Terrorist financing. The Council of the European Union approved the signing of the "Agreement between the European Union and the United States of America on the processing and transfer of Financial Messaging Data from the European Union to the United States for purposes of the Terrorist Finance Tracking Program." The Agreement ensures that providers of international financial payment messaging services make data stored in Europe available to the U.S. Department of the Treasury. According to Article 4 of the Agreement, the U.S. will make requests pursuant to the Agreement on Mutual Legal Assistance between the European Union and the United States (25 June 2003), as well as based on any applicable bilateral mutual legal assistance instrument, stating that there is an ongoing investigation regarding specific conduct. Such request is then sent to the central authority in the Member State at issue for processing. The EU Member States are expected to apply the Agreement provisionally beginning February 1, 2010, pending its official entry into force. The text of the Agreement is attached to the Council Decision. Citation: 2010 O.J. of the European Union (L 8), 9, 13 January 2010.