2011 International Law Update, Volume 17, Number 4 (October - December)

2011 International Law Update, Volume 17, Number 4 (October - December)

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

ALIEN TORT STATUTE

Ninth Circuit analyzes district court’s application of the Alien Tort Statute against a foreign corporation for crimes committed abroad

The Ninth Circuit reviewed a case arising out of the operations of Rio Tinto mining groups in Papua New Guinea and the uprising that occurred against Rio Tinto in the late 1980’s that resulted in the use of military force and many deaths. The Plaintiffs were charged under the Alien Tort Statute (“ATS”), 28 U.S.C. § 1350, for crimes against humanity, genocide, racial discrimination, and war crimes.

This case was brought before this Court twice. The Court previously held that exhaustion of the Plaintiffs’ claims for crimes against humanity, war crimes, and racial discrimination was necessary and remanded. On remand, the district court held that it would be inappropriate to impose a prudential exhaustion requirement on the Plaintiffs’ claims for crimes against humanity, war crimes, and racial discrimination, finding that the claims required exhaustion. The district court also dismissed all claims of genocide, war crimes, racial discrimination, and crimes against humanity. Plaintiffs appealed.

The U.S. Court of Appeals for the Ninth Circuit affirms in part, and reverses and remands in part. The Court holds that only the Plaintiffs’ claims of genocide and war crimes fall within the jurisdiction of the ATS, and crimes against humanity and racial discrimination do not.

The ATS “was enacted on the understanding that the common law would provide a cause of action for the modest number of international law violations . . . based on the present‑day law of nations . . . rest[ing] on a norm of international character accepted by the civilized world and defined with a specificity comparable to the features of the 18th‑century paradigms we have recognized [violation of safe conducts, infringement of the rights of ambassadors, and piracy]. [Sosa v. Alvarez‑Machain, 542 U.S. 692, 724‑25 (2004)].” [Slip op. 7]

“Thus, in discussing the definite nature of an international norm that gives rise to a cause of action in an ATS suit against a private actor, the Supreme Court also noted that a related consideration is whether international law extends the scope of liability for a violation of a given norm to the perpetrator being sued, if the defendant is a private actor such as a corporation or individual.” [Slip op. 7]

Rio Tinto attempted to argue that due to its status as a corporation, it could not be held subject to the ATS. However, following the precedent of the Supreme Court in Sosa v. Alvarez‑Machain, the Court determines that Rio Tinto could be sued under the ATS. “The ATS contains no such language and has no such legislative history to suggest that corporate liability was excluded and that only liability of natural persons was intended.” [Slip op. 14]

The Court first looks to the charge of genocide under the ATS. “Claims of genocide fall within the limited category of claims constituting a violation of internationally accepted norms for ATS jurisdiction. Sosa, 542 U.S. at 729. They are not barred by the act of state doctrine because violations of jus cogens norms are not sovereign acts.” [Slip op. 35]

Further, the Court holds that the jus cogens prohibition of genocide extends to corporations. “Given the universal nature of the prohibition, if an actor is capable of committing genocide, that actor can necessarily be held liable for violating the jus cogens prohibition on genocide. Indeed, the implication that an actor may avoid liability merely by incorporating is inconsistent with the universal and absolute nature of the prohibition against genocide.” [Slip op. 36] “Given that an amorphous group, a state, and a private individual may all violate the jus cogens norm prohibiting genocide, corporations likewise can commit genocide under international law because the prohibition is universal.” [Slip op. 37]

Next, the Court looks to the complaints allegations of war crimes in the form of murder against the civilian population of Papua New Guinea. The Court cites a district court case in Virginia, In re Xe Servs. Alien Tort Litig., 665 F. Supp. 2d 569 (E.D. Va. 2009), that held that war crimes could give rise to a cause of action under the ATS.

“Claims for violations of the international norm proscribing war crimes are cognizable under the ATS. By ratifying the Geneva Conventions, Congress has adopted a precise, universally accepted definition of war crimes. Moreover, through enactment of a separate federal statute, Congress has incorporated this precise definition into the federal criminal law. 18 U.S.C. § 2441. Thus, Congress has clearly defined the law of nations to include a binding prohibition on the commission of war crimes. Given this, and given Sosa’s teachings, it follows that an allegation of a war crime states a cause of action under the ATS.” Id.

International law also recognizes that corporations could be held liable for war crimes. “Because parties to a conflict not of an international character by definition must include at least one non‑state actor, entity, or group, Common Article III cannot reasonably be interpreted to be limited to states.” [Slip op. 45]

Third, the Court looks to crimes against humanity and racial discrimination, finding that these charges do not fall within the jurisdiction of the ATS. “Since none of the statutes explicitly include a blockade in their definition of extermination, Plaintiffs’ claim for crimes against humanity can come within the statutes only if the blockade constitutes other inhumane acts.”

“To meet the Sosa test, however, the blockade must be a violation of a recognized specific norm. The statutes do not create such a norm. There is no source of recognized international law that yet identifies a food and medical blockade as another inhumane act or otherwise qualifies it as a crime against humanity. In the absence of any such source, a food and medical blockade does not violate a specific internationally recognized norm within the meaning of Sosa.” [Slip op. 51] Therefore, the Court holds that the crimes against humanity did not fall under the purview of the ATS.

As for racial discrimination, the Court finds that the international norm prohibiting systematic racial discrimination is not sufficiently specific and obligatory to give rise to a cause of action under the ATS. The treaty itself provides a definition of racial discrimination but does not provide any such definition of systematic racial discrimination, nor even include the word “systematic.”

“It is important to recognize that the claim of racial discrimination as set forth in Count IV of the complaint is for a violation of the Racial Discrimination Convention. It is not a claim of apartheid as defined in the relevant international statutes. . . . We assume, without deciding, that a claim akin to apartheid would be cognizable under the ATS, but the complaint in this case does not allege such a claim.” [Slip op. 54]

Citation: Sarei v. Rio Tinto PLC, No. 02‑56256 (9th Cir. 2011).

ARBITRATION

Ninth Circuit interprets and enforces the Carmack Amendment, which precludes the enforcement of foreign arbitration clauses

Gary Smallwood, a United States citizen, moved from San Diego California to Abu Dhabi, United Arab Emirates (“UAE”) and contracted with Allied Van Lines, Inc. and SIRVA, Inc. (“AVL”) to ship some of his belongings to the UAE and put the remainder in storage. In the contract, there is an arbitration clause stating that any disputes arising from the contract would be arbitrated in accordance with Dubai Chamber of Commerce and Industry Commercial Conciliation and Arbitration Regulation.

The belongings that were intended to be stored in the United States, including his firearms and ammunition, were mistakenly shipped to the UAE along with Smallwood’s household items. Smallwood was then arrested and convicted of gun smuggling. Smallwood filed suit against AVL for the mistaken shipment in the United States, but AVL sought to enforce the arbitration clause and moved to compel arbitration. The district court concluded that the arbitration clause was unenforceable under the Carmack Amendment, 49 U.S.C. § 14706. This appeal ensued.

The U.S. Court of Appeals for the Ninth Circuit affirms the district court, finding that the Carmack Amendment controlled this case because it was enacted after any federal arbitration clause statutes; therefore, it precluded the foreign arbitration clause in this case. The Carmack Amendment, as an amendment to the Interstate Commerce Act, “governs the terms of interstate shipment by domestic rail and motor carriers.” [Slip op. 19082] The Court analyzed the amendment by first looking to the plain text of the document.

“Carmack’s statutory scheme is clearly intended to protect shippers from being forced to submit to foreign arbitration as a condition of contracting with a carrier of household goods. To begin with, Carmack expressly prohibits carriers of household goods from contracting around the statute’s requirements.” [Slip op. 19083]

“One of these inalienable requirements is that the shipper be permitted to sue in certain venues when a dispute arises. Carmack provides that, when suing the delivering carrier, ‘[a] civil action . . . may be brought . . . in a district court of the United States . . . in a judicial district . . . through which the defendant carrier operates.’ 49 U.S.C. § 14706(d)(1). Or, when suing the carrier alleged to have caused the damage, ‘[a] civil action . . . may be brought . . . in the judicial district in which such loss or damage is alleged to have occurred.’ Id. § 14706(d)(2). These provisions assure the shipper a choice of forums as plaintiff.” [Slip op. 19083]

Additionally, under Carmack, a shipper is not required to select a forum for disputes at the time of contracting; arbitration is permissible only if the shipper agrees to arbitrate after the dispute has arisen. “Moreover, if a shipper elects to arbitrate, an oral presentation of the dispute may be required only if ‘all parties to the dispute expressly agree to such presentation,’ id. § 14708(b)(7), so the shipper cannot be required to appear in an inconvenient forum even if he chooses arbitration. . . . These provisions operate together to protect the shipper from being forced to arbitrate his claims as a condition to contracting with a household carrier. Thus, under the plain meaning of the statute, after a dispute arises the shipper may either accept a carrier’s offer to arbitrate or decline arbitration and sue in one of Carmack’s enumerated venues. At the time of contracting, however, a carrier of household goods may not force the shipper to relinquish his right to sue in one of those venues.” [Slip op. 19084]

“Whereas Carmack explicitly guarantees shippers certain venues to seek recourse against their carriers, COGSA only generally prohibits ocean carriers from using contracts “relieving [their] liability for loss or damage to or in connection with the goods, arising from negligence, fault, or failure in the duties and obligations provided in this section, or lessening such liability. . . . Because Carmack expressly prohibits carriers of household goods from contracting around its venue provisions, and because Smallwood does not rely on a general prohibition on lessening carriers’ liability, Sky Reefer and its interpretation of COGSA § 3(8) are inapposite to our interpretation of Carmack.” [Slip op. 19085]

Since under the plain meaning of the Carmack Amendment a shipper cannot be forced to arbitrate his claims and may choose to sue in one of Carmack’s enumerated venues, the Court finds that the AVL’s arbitration clause was not enforceable against Smallwood. “The parties’ foreign arbitration clause plainly contravenes Carmack’s directive that Smallwood have recourse in the enumerated venues unless he agrees to arbitrate elsewhere after the dispute arises.”

Citation: Smallwood v. Allied Van Lines, Inc., 660 F. 3d 1115 (9th Cir. 2011).

ARBITRATION AWARD

In review of the confirmation of an Iranian Arbitration Award, Ninth Circuit Court affirms the confirmation, finding no violation of United States public policy

Plaintiff, Cubic International Sales Corporation, a United States corporation, entered into contracts with the defendant, the Ministry of War of the government of Iran, for the sale and service of an air combat maneuvering range for use by Iran’s military in 1977. However, due to the Iranian Revolution, the contracts could not be performed. Therefore, in 1979, the parties agreed to discontinue the contracts and settle the accounts later, and allowed Cubic to resell the air combat equipment elsewhere.

In 1982, the Ministry filed breach of contract claims against Cubic in The Hague with the Iran‑United States Claims Tribunal. After the Tribunal determined that it did not have jurisdiction to hear the matter, the Ministry filed a request for arbitration before the International Chamber of Commerce (ICC) in 1991. The ICC determined that Cubic owed a final award of $2,808,519, plus interest and arbitration costs of $60,000, to the Ministry. In 1988, after Cubic failed to pay, the Ministry filed a petition in the federal district court to confirm the ICC’s arbitration award under the New York Convention, 9 U.S.C. § 207. The district court entered a judgment in 1999, confirming the arbitration award. Though Cubic timely appealed the judgment, the proceedings were suspended due to pending litigation as to whether other judgment creditors of Iran should be attached to the Ministry’s award. Now that the pending litigation has concluded, the appeal comes before this Court.

The U.S. Court of Appeals for the Ninth Circuit affirms the district court’s decision to confirm the award to the Ministry.

Cubic presented arguments to establish that the district court erred in confirming the Ministry’s award because confirmation of the award would be against the United States’ public policy, according to Article V(2)(b) of the New York Convention. The United States filed an amicus brief in support of the confirmation. The Court first delineates the seven reasons to refuse the enforcement of an arbitration award under the New York Convention, one of which includes the recognition or enforcement of the award would be contrary to the public policy of the United States. The Convention’s public policy defense, Article V(2)(b), states:

Recognition and enforcement of an arbitral award may . . . be refused if the competent authority in the country where recognition and enforcement is sought finds that . . . (b) [t]he recognition or enforcement of the award would be contrary to the public policy of that country. 9 U.S.C. § 207.

However, the Court notes that the defense is narrowly construed in the U.S., considering the strong presumption to uphold international arbitration awards. “It applies only when confirmation or enforcement of a foreign arbitration award ‘would violate the forum state’s most basic notions of morality and justice.’ [Parsons & Whittemore Overseas Co. v. Societe Generale De L’Industrie Du Papier (RAKTA), 508 F.2d 969, 974 (2d Cir. 1974)].” [Slip op. 21001]

There is a “strong public policy favoring confirmation of foreign arbitration awards. ‘ The goal of the Convention, and the principal purpose underlying American adoption and implementation of it, was to encourage the recognition and enforcement of commercial arbitration agreements in international contracts and to unify the standards by which agreements to arbitrate are observed and arbitral awards are enforced in the signatory countries.’ Scherk v. Alberto‑Culver Co., 417 U.S. 506, 520 n.15 (1974).” [Slip op. 21003]

The Court states that in order to prevail, Cubic must meet the substantial burden of overcoming the strong public policy in favor of confirmation. Cubic attempts to support its argument that the arbitration award is against the U.S.’s policy against engaging in trade and financial transactions with the Iran by citing several imposed sanctions, including the Iranian Assets Control Regulations, the Iranian Transactions Regulations, and the Weapons of Mass Destruction Proliferators (WMD) Sanctions Regulations. Though Cubic focuses on the overarching theme of the sanctions’ prohibition of financial support to Iran, the Court notes that the sanctions do not prevent the confirmation of the award, though actual payment may be impeded.

The Court mentions the difference between confirmation and payment. “Confirmation, standing alone, transfers no wealth to Iran. Thus, even if Cubic is correct that the United States has a fundamental public policy against economic support for the government of Iran, confirmation does not violate that policy.” [Slip op. 21004]

Additionally, the Court highlights that the Plaintiff could obtain a specific license in order to make the payment to Iran without breaching the sanctions. Though the Iranian Transactions Regulations and the WMD Sanctions Regulations prohibit payment, each states that payment may be made by obtaining a license from the Treasury Department’s Office of Foreign Assets Control (OFAC). The Supreme Court has already determined that a general license applies to the award granted to the Ministry in this case.

“The difference between confirmation and payment is accentuated when, as in this case, payment is subject to licensing rather than barred absolutely. We should not refuse to confirm an arbitration award because payment is prohibited when payment may in fact be authorized by the government’s issuance of a specific license.” [Slip op. 21004] Therefore, the possibility that OFAC could issue a license further supports confirmation.

Furthermore, the Court mentions that the applicable regulations allow for Iran to obtain legal representation in any legal proceedings between Iran and a United States national. The Court argues that they demonstrate that “legal proceedings to resolve disputes such as this one are, short of payment of a judgment, not in conflict with United States sanctions policy.” [Slip op. 21005]

Lastly, the Court notes that the United States filed an amicus brief in support of confirmation. “An expression of national policy is not necessarily dispositive of the public policy issue under the Convention.” However, “the government’s confirmation that the ICC’s award comports with the national and foreign policy of the United States is entitled to great weight.” [Slip op. 21006]

Despite the United States’ conflict with Iran, the Court finds that the Ministry is entitled to confirmation of their arbitration award, as there is no conflict with the U.S.’s public policy. Therefore, the Court holds that confirmation of the ICC’s award was not contrary to the public policy of the United States under Article V(2)(b) of the New York Convention because Cubic had not identified a public policy sufficient to overcome the strong federal policy in favor of recognizing foreign arbitration awards.

Citation: Ministry of Defense & Support for the Armed Forces of the Islamic Republic of Iran v. Cubic Def. Sys. Inc., 665 F.3d 1091 (9th Cir. 2011).

DISCOVERY

Ninth Circuit affirms the application of the Electronic Communications Privacy Act (“ECPA”) to foreign citizens detained abroad

Appellant Suzlon Energy Ltd. filed suit against Rajagopalan Sridhar, an Indian citizen, for civil fraud in Australia. Suzlon subpoenaed Appellee Microsoft Corp., demanding that it release the emails from an account held by Sridhar. Although Sridhar is a citizen of India and is imprisoned abroad, the relevant emails are stored on a domestic server by a domestic corporation, Microsoft. The district court initially granted Suzlon’s petition for production of documents. However, Microsoft objected, arguing that production of the emails would be a violation of the Electronic Communications Privacy Act (“ECPA”), 18 U.S.C. §§ 2510‑2522. The district court agreed with this argument, held that the plain terms of the statute applied the ECPA to all persons, and granted the motion to quash. Suzlon filed an appeal of the motion to quash.

The U.S. Court of Appeals for the Ninth Circuit affirms the district court’s finding that the protections of the ECPA apply to foreign citizens. The Court determines this by looking to the plain text of the Act. “The Ninth Circuit has previously held that the ECPA limits § 1782 by making it illegal for an entity that provides an electronic communication service to the public to produce the contents of its stored communications.” [Slip op. 18684]

The Court examines the provision of the ECPA that states: “a person or entity providing an electronic communication service to the public shall not knowingly divulge to any person or entity the contents of a communication while in electronic storage by that service.” 18 U.S.C. § 2702(a)(1). Further, the ECPA defines “electronic communication service” as “any service which provides to users thereof the ability to send or receive wire or electronic communications.” 18 U.S.C. § 2510(15). Also, the ECPA defines a “user” as “any person or entity who—(A) uses an electronic communication service; and (B) is duly authorized by the provider of such service to engage in such use.” 18 U.S.C. § 2510(13).

The Court then delineates two arguments in support of applying the ECPA to foreign citizens. “First, 18 U.S.C. § 2702(b) and (c) list numerous exceptions to the rule as set forth in § 2702(a), which prohibits the knowing divulgence of the contents of a communication while in electronic storage. But neither § 2702(b) nor (c) list citizenship as an exception.” [Slip op. 18685]

“Second, 18 U.S.C. § 2510(13) defines a user as ‘any person or entity who—(A) uses an electronic communication service; and (B) is duly authorized by the provider of such service to engage in such use.’ The statute starts with the very broad term ‘any person or entity’ and then limits it with two conjunctive qualifications. Microsoft and Sridhar argue that Congress could have added other requirements, such as U.S. citizenship, if that were the intent behind the ECPA. The fact that Congress did not do so indicates that it did not want to impose any additional limitations.” [Slip op. 18685]

The Court agrees with Microsoft’s argument that Congress could have easily included a limitation that the Act would only apply to United States citizens if that was it’s intention. The Court then employees the reasoning of the District of Columbia Circuit Court in O’Rourke v. U.S. Dept. of Justice, 684 F. Supp. 716 (D.D.C. 1988).

“In O’Rourke, the court found that the phrase ‘any person’ in the Freedom of Information Act (“FOIA”), 5 U.S.C. §§ 551 et seq., should be read according to its plain meaning. Id. at 718. The court stated, ‘On its face, then, the statute’s provisions are not restricted to citizens.’ Id. The O’Rourke court contrasted the FOIA language with a provision in the Privacy Act, 5 U.S.C. § 552a(a)(2), which specified that its provisions apply only to ‘a citizen of the United States or an alien lawfully admitted.’ Id. The O’Rourke court concluded that ‘Congress thus distinguishes between a ‘citizen’ and ‘any person’ when it wishes to do so.’ Id.” [Slip op. 18686]

“Like the FOIA statute, the ECPA does not facially restrict its applicability to U.S. citizens. And as the court recognized in O’Rourke, Congress knows how to explicitly limit a statute to U.S. citizens when it intends to do so.” [Slip op. 18686]

Though the plain text of the statute supported Microsoft’s argument, the Court looks to the legislative history of the Act for instructive value. In analyzing a Senate Report regarding the purpose of the Act, the Court determines that though the ECPA was created to benefit and protect the privacy interests of American citizens, that does not mean it was to do so to the exclusion of foreign citizens. “_To the contrary, to fully protect American citizens it might be necessary to extend the ECPA to all domestic communications, regardless of who sent them.” [Slip op. 18687]

Suzlon argued that protection under the ECPA only extends to those who also benefit from Fourth Amendment protection. Since the email accounts belong to foreign citizens who are not protected by the Fourth Amendment, their privacy rights should not be taken into consideration and the emails released. The Court disagrees stating that: “By limiting the ECPA only to those people entitled to Fourth Amendment protection, as urged by Suzlon, an email service provider would need to assess whether a particular account holder was at all times a U.S. citizen, or later became a citizen, or was a resident alien with some Fourth Amendment protection, or if there were other reasons to provide Fourth Amendment rights. This would be a costly, fact‑intensive, and difficult determination. But under Microsoft’s interpretation of “any person,” it’s clear that the ECPA at least applies whenever the requested documents are stored in the United States.” [Slip op. 18687‑88]

Suzlon attempted to argue that Congress failed to discuss civil litigation in the legislative history or text of the Act, thereby indicating that the Act would only apply to government law enforcement. However, the Court disagrees with this argument. “As before, even if Congress’ most pressing concern was law enforcement agencies issuing subpoenas, that does not mean that Congress was not also concerned about civil litigants issuing discovery requests. Declaring an implicit exception to the ECPA for civil litigation would erode the safety of the stored electronic information and trigger Congress’ privacy concerns.” [Slip op. 18688]

Therefore, the Court concludes that the legislative history also supports the inclusion of foreign citizens under the protection of the ECPA.

Citation: Suzlon Energy Ltd. v. Microsoft Corp., U.S. App. LEXIS 20018 (9th Cir., Oct. 3, 2011).

EXTRADITION

Second Circuit clarifies the proper role of a district court in considering a petition for a writ of habeas corpus challenging an extradition order

Appellee Dimitrios Skaftouros, a Greek native, was wanted in Greece on charges including direct complicity in the murder of a minor and was certified as extraditable despite his arguments he made regarding Greece’s compliance with its own criminal procedure. He petitioned for a writ of habeas corpus before the district court, arguing that he was “in custody in violation of the Constitution or laws or treaties of the United States,” 28 U.S.C. § 2241(c)(3), because two requirements of the Extradition Treaty between the United States and Greece had not been met. The district court granted habeas and dismissed the extradition proceedings against him. The United States appeals the grant of habeas.

The U.S. Court of Appeals for the Second Circuit reverses the judgment and vacates the writ of habeas corpus, holding that the district court erred in finding that the United States had the burden of proving that Greece failed to comply with its own laws. The Court further holds that Skaftouros did not and would not be able to carry the burden of proving that the requirements of the Treaty were not met.

The Court describes the legal standards for reviewing extradition proceedings. “At an extradition hearing, the ‘judicial officer’s inquiry is confined to the following: whether a valid treaty exists; whether the crime charged is covered by the relevant treaty; and whether the evidence marshaled in support of the complaint for extradition is sufficient under the applicable standard of proof.’ Cheung v. United States, 213 F.3d 82, 88 (2d Cir. 2000).” [Slip op. 16]

The Court finds that the district court erred in applying the legal standards. Initially, the district court erred by imposing the burden of proof on the United States instead of Skaftouros. “[I]t was error for the District Court to effectively impose on the Government the burden of proving that Skaftouros was not ‘in custody in violation of the Constitution or laws or treaties of the United States.’ 28 U.S.C. § 2241(c)(3).” [Slip op. 21]

It is important to keep in mind that a habeas corpus proceeding is one that seeks to overturn a presumptively valid judgment. “Because we accord a presumption of validity to a judgment on collateral review, it is the petitioner who bears the burden of proving that he is being held contrary to law; and because the habeas proceeding is civil in nature, the petitioner must satisfy his burden of proof by a preponderance of the evidence.” [Slip op. 21]

Since the Court does not find any contrary authority, it determined that this same burden and standard of proof should be applied in a habeas petition arising from international extradition proceedings. “[C]ollateral review of an international extradition order should begin with the presumption that both the order and the related custody of the fugitive are lawful.” [Slip op. 22]

The Court therefore holds that, “in order to merit habeas relief in a proceeding seeking collateral review of an extradition order, the petitioner must prove by a preponderance of the evidence that he is ‘in custody in violation of the Constitution or laws or treaties of the United States,’ 28 U.S.C. § 2241(c)(3), which, in this context, will typically mean in violation of the federal extradition statute, 18 U.S.C. § 3184, or the applicable extradition treaty.” [Slip op. 22]

Next, the Court examines the Appellee’s inability to prove by the preponderance of the evidence that the arrest warrant provided by the Greek government did not satisfy the Treaty’s requirement of a “duly authenticated warrant” sufficient to show that he was charged with a crime covered by the United States—Greek Treaty. Usually, producing an arrest warrant authenticated by a United States diplomatic officer is enough to satisfy the requirement. However, the district court erred by imposing on the government the burden of proving that the warrant was valid according to Greek law.

Concerned solely with the requirements of the Treaty and the federal extradition statute, the Court finds that the arrest warrant was satisfactory and therefore prosecutable. “Greece fully complied with this requirement by submitting a warrant for Skaftouros’s arrest that was authenticated by the U.S. Ambassador to Greece, along with an indictment demonstrating the existence of probable cause to believe Skaftouros had committed the crime charged. In most cases, the production of an arrest warrant authenticated by the principal diplomatic officer of the United States in the demanding country will suffice to satisfy a treaty’s ‘duly authenticated warrant’ requirement.” [Slip op. 24]

Citation: Skaftouros v. United States, 2011 WL 6355163 (2d Cir. Dec. 20, 2011).

FOREIGN CORRUPT PRACTICES

Second Circuit affirms the jury instructions and conviction of defendant in violation of the FCPA

Azerbaijan began privatizing various state assets and the candidates for privatization included SOCAR, a state‑owned oil company. Defendants Viktor Kozeny and Frederic Bourke Jr. conspired with others in a scheme to illegally purchase SOCAR by bribing the Azerbaijani president and other officials. After a jury trial, Bourke was convicted of conspiring to violate the Foreign Corrupt Practices Act (“FCPA”), 15 U.S.C. § 78dd‑1 et seq., 18 U.S.C. § 371, and the Travel Act, 18 U.S.C. § 1953, and of making false statements in violation of 18 U.S.C. § 1001. The district court denied Bourke’s motions for new trial and for judgment of acquittal. On appeal, Bourke argued that the jury instructions given with regard to the FCPA were incorrect.

The U.S. Court of Appeals for the Second Circuit affirms the district court’s denial for a new trial and judgment for acquittal.

Regarding the jury instructions for the FCPA violation, the Court evaluates the instructions given for three elements of the charge, including conscious avoidance, mens rea, and good faith.

For conscious avoidance, the district court instructed the jury:

The FCPA provides that a person’s state of mind is knowing with respect to conduct, a circumstance, or a result if, and I’m quoting from the statute, the FCPA, if such person is aware that such person is engaging in such conduct; that such circumstance exist [sic] or that such result substantially is certain to occur, or such person has a firm belief that such circumstances exist or that such result is substantially certain to occur. That’s the end of the quote. When knowledge of existence of a particular fact is an element of the offense, such knowledge may be established when a person is aware of a high probability of its existence, and consciously and intentionally avoided confirming that fact. Knowledge may be proven in this manner if, but only if, the person suspects the fact, realized its high probability, but refrained from obtaining the final confirmation because he wanted to be able to deny knowledge. On the other hand, knowledge is not established in this manner if the person merely failed to learn the fact through negligence or if the person actually believed that the transaction was legal. [Slip op. 13]

“A conscious avoidance instruction permits a jury to find that a defendant had culpable knowledge of a fact when the evidence shows that the defendant intentionally avoided confirming the fact.” United States v. Ferrarini, 219 F.3d 145, 154 (2d Cir. 2000). “The jury may be instructed on conscious avoidance only where ‘(1) the defendant asserts the lack of some specific aspect of knowledge required for conviction, and (2) the appropriate factual predicate for the charge exists . . . .’ Id.” [Slip op. 13‑14]

Quoting the Court’s decision in United States v. Ferrarini, 219 F.3d 145 (2d Cir. 2000), it states that “[A] jury could be given a conscious avoidance instruction in a case where there was only equivocal evidence that the defendant had actual knowledge and where there was no evidence that the defendant deliberately avoided learning the truth. Under those circumstances, a jury might conclude that no actual knowledge existed but might nonetheless convict, if it believed that the defendant had not tried hard enough to learn the truth.” Id. at 157; [Slip op. 14]. Since the Court finds that there was ample evidence that Bourke had actual knowledge of the bribery scheme, it determines that the district court’s jury instruction was sufficient.

Secondly, for the mens rea element of the conspiracy to violate the FCPA charge, the district court instructed:

The third element, corruptly and willfully: The third element of a violation of the FCPA is that the person intended to act corruptly and willfully. A person acts corruptly if he acts voluntarily and intentionally, with an improper motive of accomplishing either an unlawful result or a lawful result by some unlawful method or means. The term “corruptly” is intended to connote that the offer, payment, and promise was intended to influence an official to misuse his official position. A person acts willfully if he acts deliberately and with the intent to do something that the law forbids, that is, with a bad purpose to disobey or disregard the law. The person need not be aware of the specific law and rule that his conduct may be violating, but he must act with the intent to do something that the law forbids. [Slip op. 19]

The Court finds that this jury instruction was proper because it directed the jury to make the necessary findings. Since the district court instructed that in order for the jury to convict, it must find that Bourke knew and intended for the conspiracy to occur, one possible object of the conspiracy was to violate the FCPA, and that one must act willfully and corruptly to violate the FCPA, the instructions were proper.

Third, with regard to the good faith element of the conspiracy charge, the district court did not give a jury instruction, which Bourke argued was an error. The Court holds that the district court was not required to give an instruction simply because the defendant requested it. Instead, the Court determines that the good faith element of the charge was found elsewhere in other instructions. For instance, the district court instructed the jury that the government did not meet its burden if the defendant merely failed to learn the fact through negligence or if the person actually believed that the transaction was legal.

The Court analogizes the instructions given by the district court to the ones given in another Second Circuit case, United States v. Doyle, 130 F.3d 523 (2d Cir. 1997), where it held that it was not error for the district court to refuse to charge that the Government had the burden to prove bad faith. Since the instructions were similar, the Court upholds the district court, and affirms Bourke’s conviction.

Citation: United States v. Kozeny, 2011 U.S. App. LEXIS 24740 (2d Cir. Dec. 14, 2011).

FOREIGN INTELLIGENCE INFORMATION

Finding that Foreign Intelligence Surveillance Act does not violate the Fourth Amendment, Third Circuit upholds the constitutionality of obtained foreign intelligence information

A group of American citizens and resident aliens conspired to commit violent acts against the United States military in New Jersey, Pennsylvania, and Delaware in furtherance of violent jihad. After becoming known by the FBI, two informants infiltrated the group and began recording discussions among the members regarding their plan to attack the military bases over the course of a year. The FBI obtained footage of the group members purchasing firearms to be used during the attack.

Once the members were arrested, the FBI seized evidence of videos depicting violent jihadist activities, video lectures advocating violent jihad, weapons, the location of their shooting range in the Poconos, their surveillance and research data collected concerning their various potential targets, and a map of the United States Army Base at Fort Dix to use in planning and coordinating an attack.

The members admired the September 11 hijackers, Osama Bin Laden, and al Qaeda in Iraq. They trained in the Poconos in accordance with the violent jihadist videos they watched. They made detailed plans about how they would execute their attacks against the military bases. All of this information was used as evidence in charging the members with various counts of conspiracy to commit murder and gun possession. The Defendants were convicted, but appealed their convictions by arguing that the government relied on evidence obtained by the Foreign Intelligence Surveillance Act (“FISA”), 50 U.S.C. § 1801 et seq., an Act they contend is in violation of the Fourth Amendment.

The U.S. Court of Appeals for the Third Circuit rejects the Defendants’ arguments and affirms their convictions. Specifically, the Defendants argue that FISA, as amended by the Patriot Act, includes a significant purpose test that does not appropriately balance individual privacy interests against the government’s interests in foreign intelligence gathering. They also argue that FISA violates the Fourth Amendment in that it allows searches and seizure without requiring probable cause that a crime is being committed. FISA, as revised by the Patriot Act, requires that a national security officer certify that a significant purpose of the surveillance is to obtain foreign intelligence information. With regard to the Fourth Amendment, the Court states, “the critical Fourth Amendment requirement, for purposes of this case, is that the statutory standard for obtaining a warrant must be reasonable.” [Slip op. 19] Though the Supreme Court has not dealt with the reasonableness standard under FISA, the Court specifically suggests that different probable cause standards for intelligence surveillance “may be compatible with the Fourth Amendment.” [Slip op. 21]

In determining whether FISA’s significant purpose standard is reasonable given the government’s interest in collecting foreign intelligence information, the Court then evaluates the Fourth Amendment as it relates to foreign intelligence generally. The Supreme Court stated in United States v. U.S. District Court (Keith), 407 U.S. 297 (1972), that “Congress may wish to consider protective standards for domestic security surveillance warrants that differ from those prescribed in ordinary criminal cases.” [Slip op. 22]

Since Keith, other courts “almost uniformly have concluded that the important national interest in foreign intelligence gathering justifies electronic surveillance without prior judicial review, creating a sort of foreign intelligence exception to the Fourth Amendment’s warrant requirement.” [Slip op. 23]

“Given the prevailing pre‑FISA conclusion that the executive branch could conduct electronic surveillance for foreign intelligence purposes without a warrant, it was perhaps predictable that the courts of appeals that have reviewed FISA, both before and since the Patriot Act amendments, all would conclude that FISA’s standards and procedures for authorizing foreign intelligence surveillance orders are reasonable under the Fourth Amendment.” [Slip op. 23‑24]

With regard to the “significant purpose test” of FISA, the Court holds that it is reasonable under the Fourth Amendment, and, therefore, constitutional. “First, the ‘significant purpose’ standard reflects a balance struck by Congress between ‘the legitimate need of Government for intelligence information’ and ‘the protected rights of our citizens.’ Keith, 407 U.S. at 323.” [Slip op. 28] “The legislative history reveals that Congress was keenly aware that [the Patriot Act’s amendment to what is now § 1804(a)(6)(B)] relaxed a requirement that the government show that its primary purpose was other than criminal prosecution.” [Slip op. 28]

Additionally, the Court concludes that the significant purpose test is reasonable by examining the government’s legitimate national security goals. “We are mindful of the high stakes involved and emphasize the Supreme Court’s admonition that ‘[w]here, as here, the possible harm against which the Government seeks to guard is substantial, the need to prevent its occurrence furnishes an ample justification for reasonable searches calculated to advance the Government’s goal.’ [Nat’l Treasury Emps. Union v. Von Raab, 489 U.S. 656, 674‑75 (1989)].” [Slip op. 29]

Lastly, the Court highlights that FISA contains several safeguards against abuse and provides appropriate judicial review.

Citation: United States v. Duka, 2011 U.S. App. LEXIS 25868 (3rd Cir. Dec. 28, 2011).

FORUM NON CONVENIENS

After balancing the public and private interests in enforcing arbitration award against Peru, Second Circuit reverses the district court denial of motion to dismiss for Forum Non Conveniens

Figueiredo Ferraz Consultoria E Engenharia de Projeto Ltda. entered into a consulting agreement with the Programa Agua Para Todos (“the Program”), where Figueiredo was to prepare engineering studies on water and sewage services in Peru. The agreement stated that they would avail themselves to the Judges and Courts of the City of Lima or the Arbitration Proceedings, if a dispute arose. When a fee dispute did arise, Figueiredo commenced an arbitration action in Peru against the Program. In 2005, the arbitral tribunal rendered an award. The Ministry of Housing, Construction, and Sanitation appealed the arbitration award to the Court of Appeals in Peru, but the appeal was denied.

Figueiredo filed a petition in the Southern District Court of New York to have the arbitration order confirmed. The arbitration award was confirmed against the Republic of Peru and its agencies for a sum of more than $21 million. However, Peru has a statutory cap that prevents the country from paying more than 3% of its annual budget in awards enforced against the state. Therefore, the country sought to dismiss the action for forum non conveniens (“FNC”). The district court denied the motion, finding that dismissal was not proper under FNC.

The U.S. Court of Appeals for the Ninth Circuit reverses the district court’s ruling and remands the case with directions to dismiss the petition. The Court notes that in analyzing FNC, courts must look to public and private interests. The public interests can include “a local interest in having localized controversies decided at home . . . and the interest in having foreign law interpreted by a foreign court.” [Slip op. 9] The Court further notes that although the Panama Convention established jurisdiction in the United States for this case, there is still authority to reject that jurisdiction due to convenience.

The Court then considers the factor of adequacy of an alternative forum in Peru. “It is no doubt true that only a United States court may attach a defendant’s particular assets located here, but that circumstance cannot render a foreign forum inadequate. If it could, every suit having the ultimate objective of executing upon assets located in this country could never be dismissed because of FNC.” [Slip op. 10]

In order for an alternate forum to be adequate for lawsuits to obtain judgments, the court must determine whether the defendant has some assets in the alternate forum, but the fact that the plaintiff may recover less in another form will not render the forum inadequate.

Next, the Court considers the public interests in determining the proper forum. Agreeing with the Republic of Peru, the Court finds that the statutory cap was a significant public factor that warranted FNC dismissal. “Although it obviously has special significance for one of the parties in this litigation, Peru, . . . there is nonetheless a public interest in assuring respect for a sovereign nation’s attempt to limit the rate at which its funds are spent to satisfy judgments.” [Slip op. 13]

Further, citing to the Supreme Court, the Court notes that deferring to litigation in another jurisdiction is appropriate where the litigation is “intimately involved with sovereign prerogative.” Louisiana Power & Light Co. v. City of Thibodaux, 360 U.S. 25, 28‑29 (1959); [Slip op. 13]. The Court holds that the rate at which a country can disperse public funds to satisfy an arbitration award is surely intimately involved with sovereign prerogative and “the Peruvian courts are the only tribunals empowered to speak authoritatively on the meaning and operation of the cap statute.” [Slip op. 13]

“[T]he public factor of permitting Peru to apply its cap statute to the disbursement of governmental funds to satisfy the Award tips the FNC balance decisively against the exercise of jurisdiction in the United States.” [Slip op. 14] Therefore, the Court reverses the denial of the Appellants’ motion to dismiss for FNC.

Dissenters agree with the reasoning and conclusions of the district court, stating “[t]he merits of the underlying dispute have already been decided, and Figueiredo comes to us with the specific and narrow intent of enforcing its arbitration award against Peru’s assets in the United States, as it is entitled to do under the Panama Convention. The resolution of that issue is not amenable to jurisdiction elsewhere. I therefore agree with the district court’s conclusion that Peru is not an adequate alternative forum.” [Slip op. 42]

Citation: Figueiredo Ferraz E Engenharia De Projeto Ltda. v. Republic of Peru, 665 F.3d 384 (2d Cir. 2011).

FOREIGN SOVEREIGN IMMUNITY

Affirming the dismissal of Plaintiff’s Complaint involving an illegal sale of gold, the Eighth Circuit applies sovereign immunity to the Kenyan government and agencies

Appellant, Community Finance Group, Inc. (CFG) and its representative Andrew Vilehchik entered into discussions with John Saina, a United States citizen and former Kenyan national, about purchasing gold. Saina explored opportunities in Kenya, and CFG ultimately contracted with Zilicon Freighters, Ltd. for the purchase of $6 million in gold. Through Zilicon’s representative Illunga Ngoei, CFG agreed to put $350,000 in escrow with Miller & Company; however, CFG placed the money in an account with Zilicon’s holding company Great Lakes Auto Tech Int’l Ltd.

On June 16, 2009, the Kenya Central Bank verified the transaction. However, due to increased suspicion, CFG retained a Kenyan lawyer and filed a complaint with the Kenya Central Bank Fraud Investigations Department (BFID), which resulted in the arrest of Illunga Ngoei.

During BFID’s investigation of Ngoei, his bank accounts were frozen and CFG’s $350,000 was never returned, nor was it able to purchase the gold. CFG then brought suit against the Republic of Kenya, Kenya Revenue Authority, Kenya Central Bank, and Kenya Department of Customs for breach of duty, improper taking, conversion, conspiracy to commit a tort, and unjust enrichment. The district court dismissed the action for lack of subject matter jurisdiction.           The U.S. Court of Appeals for the Eighth Circuit, by applying the Foreign Sovereign Immunities Act of 1976 (FSIA), 28 U.S.C. §§ 1330, 1602 et seq., affirms the dismissal.

The FSIA is the sole basis for obtaining subject matter jurisdiction over a foreign state. “Under the FSIA, a foreign state is ‘presumptively immune’ from the jurisdiction of American courts and ‘unless a specified exception applies, a federal court lacks subject‑matter jurisdiction over a claim against a foreign state.’ Saudi Arabia v. Nelson, 507 U.S. 349, 355 (1993) (citations omitted).” [Slip op. 4]

Once the foreign states shows that it is protected by immunity, the party seeking to litigate in the United States has the burden of proving that an exception applies. CFG argued that three exceptions applied in this case, all of which the Eighth Circuit denies: 1) the commercial activity exception under § 1605(a)(2) of FSIA; (2) the expropriation exception under § 1605(a)(3); and (3) the tort exception under § 1605(a)(5).

First, the Court states the commercial activity exception applies to “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 un the United States. 28 U.S.C. § 1605(a)(2).” [Slip op. 6] When the foreign state is not acting as a regulator of a market, but rather as a private participant in a transaction, then activity is commercial in nature and the exception applies. The Court finds that the Defendants’ acts in this case (investigating Ngoei’s fraudulent transactions, regulating exports, seizing property during criminal investigations, etc.) were governmental, not commercial, activities.

Second, the Court finds that the expropriation exception did not apply because CFG’s property was not “taken.” According to the FSIA, a foreign state is not immune in any case “in which rights in property taken in violation of international law are in issue and that property or any property exchanged for such property is present in the United States in connection with a commercial activity carried on in the United States by the foreign state¼. 28 U.S.C. § 1605(a)(3).” [Slip op. 6]

Though CFG alleged that the Defendants improperly retained its money and purchased property, the Court determines that a taking did not occur because CFG never paid for or acquired the gold and the $350,000 was never transferred to the Defendants. Also, if the property were “taken,” CFG allege that the property was present in the United States, in accordance with the text of the exception.

Third, the Court denies application of the tort exception to this case. “The FSIA provides an exception to sovereign immunity in a case in which a plaintiff seeks money damages ‘for personal injury or death, or damage to or loss of property, occurring in the United States and caused by the tortious act or omission of that foreign state or of any official or employee of that foreign state while acting within the scope of his office or employment.’ 28 U.S.C. § 1605(a)(5).” [Slip op. 4] “The tort exception covers ‘only torts occurring within the territorial jurisdiction of the United States,’ regardless of whether the alleged tort ‘may have had effects in the United States.’ [Argentine Republic v. Amerada Hess Shipping Corp., 488 U.S. 428, 441 (1989)].” [Slip op. 7]

The Court holds that the alleged torts would have been committed in Kenya, not the United States; therefore, the exception did not apply. Despite CFG’s attempt to argue that the conspiracy began in the United States with Saina’s acts, there was no allegation in the compliant that Saina was an agent of any of the Defendants.

Citation: Cmty. Fin. Grp. Inc. v. Republic of Kenya, No. 11‑1816 (8th Cir. Nov. 15, 2011).

MARITIME LAW

First Circuit, affirming jurisdiction over a vessel used to transport cocaine in international waters, finds that the vessel is without nationality under the Maritime Drug Law Enforcement Act

On February 23, 2007, the United States Coast Guard boarded a “go‑fast vessel” in the Caribbean that did not display any registry numbers, hailing port, or national flag, in violation of international law. Francisco Nueci‑Pena identified himself as master of the ship and, though it was disputed, either claimed Columbia or Venezuela as its country of registry. Both countries were contacted separately, and neither could confirm nor deny the vessel’s registry. In accordance with the Maritime Drug Law Enforcement Act (MDLEA), the vessel qualified as a “vessel without nationality” and was then subject to the jurisdiction of the United States.

The Coast Guard then recovered several burlap sacks that contained 1,170 pounds of cocaine. The entire crew, including Defendant Javier Mitchell‑Hunter, was taken to Puerto Rico and a criminal complaint was issued against each member of the crew.

Nueci and Mitchell moved for dismissal of the criminal complaint, claiming that the vessel was registered in Venezuela and the Coast Guard personnel did not contact the country to verify the registry, thereby invalidating the jurisdiction of the United States. However, the district court agreed with the government’s argument that both countries were contacted on the same day, though by different officers, and neither country could confirm nor deny the vessel’s registry. Therefore, the vessel was properly considered a vessel without nationality, subjecting it to the jurisdiction of the United States. The Defendants appealed.

The U.S. Court of Appeals for the First Circuit affirms the district court’s ruling. Reviewing the jurisdictional issue de novo, the Court begins by analyzing the purpose of the MDLEA. “Finding that drug trafficking at sea was a ‘serious international problem . . . present[ing] a specific threat to the security and societal well‑being of the United States,’ 46 U.S.C. § 70501, Congress, via the MDLEA, made it unlawful to ‘knowingly or intentionally manufacture or distribute, or possess with intent to manufacture or distribute, a controlled substance on board . . . a vessel subject to the jurisdiction of the United States,’ id. § 70503(a), which applies ‘even though the act is committed outside the territorial jurisdiction of the United States,’ id. § 70503(b).” [¶ 11]

There are several types of vessels that fall within the jurisdiction of the United States, including vessels without jurisdiction. “One type of vessel without nationality is ‘a vessel aboard which the master or individual in charge makes a claim of registry and for which the claimed nation of registry does not affirmatively and unequivocally assert that the vessel is of its nationality.’ Id. § 70502(d)(1)(C).” [¶ 12] The Court assumes that the responses from Venezuela and Columbia were adequately proven, thereby qualifying the go‑fast vessel as a vessel without nationality and subject to the United States’ jurisdiction.

“At the time of the events relevant to this case, the MDLEA stated that only a denial of the registry claim, and not an equivocal response, could be proved conclusively by State Department certification. Id. § 70502(d)(2) (2006)” [¶ 13] The Court states that even though the certifications obtained regarding the vessel’s registration “did not rise to the level of conclusive proof in this case,” it found that the district court was correct in its finding that the certifications were “still relevant and admissible prima facie evidence of statelessness.” [¶ 13]

Lastly, the Court considers the remainder of evidence submitted by the government that pertained to the vessel’s statelessness, such as no displayed registry numbers, hailing port, or national flag. Any of these displays would have indicated nationality under international law.

The Court finds that, “[c]onsidering the totality of the evidence presented to the district court, and as the burden of proof is merely a preponderance, id., there was no error in concluding that the go‑fast was a vessel without nationality under § 70502(d)(1)(C).” [¶13] Therefore, the district court was correct in finding that the United States had jurisdiction over the go‑fast vessel.

Citation: United States v. Mitchell‑Hunter, No. 10‑2203 (1st Cir. Dec. 12, 2011).

SOVEREIGN IMMUNITY

Second Circuit denies Afghanistan’s attempt to limit the application of the noncommercial tort exception of the Foreign Sovereign Immunities Act, as it would amount to a repudiation of the law

In a lawsuit stemming from the terrorist attacks on September 11, 2001, the nation of Afghanistan’s motion to dismiss was denied by the district court. Plaintiff John Doe filed a suit as personal representative and executor of his wife’s estate, who perished in the September 11th attacks, with claims of conspiracy and wrongful death. Doe names Afghanistan as the defendant and asserts subject matter jurisdiction under the Foreign Sovereign Immunities Act’s (“FSIA”) noncommercial tort exception. Though Afghanistan did not initially respond and a default judgment was entered against it, the nation appeared to vacate the judgment and dismiss the lawsuit, asserting that the claims could only be brought under the FSIA terrorism exception. However, the exception does not apply to Afghanistan because the State Department has not designated the nation as a state sponsor or terrorism; therefore, the case should be not dismissed. The district court denied Afghanistan’s motion and the nation has appealed.

The U.S. Court of Appeals for the Second Circuit affirms the district court’s denial of the motion to dismiss. To analyze this matter, the Court uses a statutory interpretation approach to determine whether the noncommercial tort exception applies to this case and cases of this nature. First, the Court looks to the plain text of the FSIA. “The text of the noncommercial tort exception of the FSIA provides jurisdiction for cases that (1) are noncommercial, (2) seek ‘money damages,’ (3) for ‘personal injury or death, or damage to or loss of property,’ (4) that ‘occur[ed] in the United States,’ and (5) that was ‘caused by the tortious act,’ (6) ‘of [a defendant] foreign state or [its] employee . . . acting within the scope of his . . . employment,’ unless (7) the claim is based on a discretionary act or (8) it is for ‘malicious prosecution, abuse of process, libel, slander, misrepresentation, deceit, or interference with contract rights.’ 28 U.S.C. § 1605(a)(5).” [Slip op. 4‑5]

The Court determines that the first five requirements were present. Further Court explains that the harms alleged by Doe were all torts attributable to the terrorist attacks. “Additionally, the complaint alleged nondiscretionary acts by employees of the foreign state within the scope of their employment.” [Slip op. 5] Therefore, the Court holds that the claims fit within the noncommercial tort exception.

Specifically with regard to Afghanistan’s argument that the noncommercial tort exception should not apply simply because terrorism exception also applies, the Court further examines the text of the FSIA. The Court finds that Afghanistan is calling for a narrow reading of the FSIA that would limit the jurisdiction of the United States.

The text of the FSIA states that it only applies to injuries within the United States; thereby, excluding any tort claims occurring abroad. The Court notes that when the terrorism exception was added to the FSIA, “[a] bombing abroad killing U.S. nationals is not only a paradigmatic example of terrorism, it is the precise—and only—example Congress cited when it originally added the terrorism exception to the FSIA.” [Slip op. 7]

“Afghanistan’s proposed narrow reading of the noncommercial tort exception would not so much be a reading of the statue as it would be a decision that the terrorism exception amounts to a partial repeal by implication of the noncommercial tort exception. Prior to the terrorism exception’s enactment, several courts had allowed suits against foreign governments under the noncommercial tort exception for tortuous—and arguably ‘terrorist’—acts occurring in the United States.” [Slip op. 8]

If Afghanistan’s reading were correct, then the enactment of the terrorism exception would not have expanded the law, but instead would have repudiated the application of the already existing noncommercial tort exception.

Next, the Court examines the legislative history of the Act. “The House Committee Report explained that the provision was ‘necessary to clarify and expand the circumstances in which an American . . . can bring suit in U.S. courts against a foreign government under the FSIA.’ H.R. Rep. No. 103‑702, at 3 (1994) (emphasis added); accord H.R. Rep. No. 102‑900, at 3‑4 (1992).” [Slip op. 10]

Further, “[t]he noncommercial tort exception excludes from its scope ‘any claim arising out of malicious prosecution, abuse of process, libel, slander, misrepresentation, deceit, or interference with contract rights.’ 28 U.S.C. § 1605(a)(5)(B). Noticeably absent from this list are the torts listed in the terrorism exception—‘an act of torture, extrajudicial killing, aircraft sabotage, hostage taking, or the provision of material support or resources for such an act.’ 28 U.S.C. § 1605A(a)(1).” [Slip op. 10]

By examining the text, legislative history, and purpose of the Act, the Court determines that Afghanistan’s argument was incorrect. Instead, the Act allows for an overlap in application of the exceptions. “But, Congress has expressly provided in the statute for how to determine which exception dominates. It did so by limiting the terrorism exception to ‘any case not otherwise covered by [the FSIA].’ 28 U.S.C. § 1605A(a)(1). In other words, Congress expressly stated that the terrorism exception should only apply when the preexisting exceptions failed to cover a case.” [Slip op. 11]

Lastly, though the Court holds that the terrorism exception of the FSIA did not limit the application of the noncommercial tort exception, it was made clear that there was no ruling made regarding the sufficiency of the pleadings. Therefore, the case was remanded to the district court to determine such issues.

Citation: Doe v. Usama Bin Laden, 663 F.3d 64 (2d Cir. 2011).

TORTURE

Seventh Circuit affirms U.S. citizens’ use of Bivens remedy in a suit against Donald Rumsfeld for torture sustained in Iraq

Donald Vance and Nathan Ertel, two United States Citizens, voluntarily moved from the U.S. to Iraq to assist in rebuilding the country after the war in the country began. The two became employed by a privately owned Iraqi security services company in Baghdad. During their employment, they became suspicious that the company was involved with corruption and other illegal activity. While Vance was home in Chicago, he contacted U.S. government officials to report his suspicions and met with FBI agents, who arranged for Vance to continue reporting suspicious activity back to Chicago. The FBI agent also requested that Vance and Ertel meet U.S. government officials in Iraq to report their observations. Their observations also implicated U.S. military personnel. When their employers became suspicious of their whistle blowing, they revoked the plaintiffs’ credentials and identification documents, trapping them in Baghdad. They contacted the U.S. forces for assistance and were instead arrested, taken into custody and held on a military compound for several months where they were tortured.

In a suit against the former Secretary of Defense, Donald Rumsfeld, Vance and Ertel asserted claims of cruel, inhumane, and unusual punishment in violation of the Constitution. Rumsfeld moved to dismiss, but the district court declined to dismiss the aforementioned claims and held that Rumsfeld was not protected by qualified immunity and the plaintiffs were able to seek a claim under the Bivens Remedy. Rumsfeld appeals.

The U.S. Court of Appeals for the Seventh Circuit affirms the district court’s denial of Rumsfeld’s motion to dismiss. The Court finds that the Plaintiffs alleged sufficient facts to support their claim. In order to determine whether they would be able receive a remedy under Bivens v. Six Unknown Named Agents of Federal Bureau of Narcotics, 403 U.S. 388 (1971), the Court has to find that Rumsfeld was personally responsible for the acts committed against the Plaintiffs. This also requires an analysis of whether Rumsfeld benefited from qualified immunity.

Briefly, the Court finds that “[b]ecause vicarious liability is inapplicable to Bivens and § 1983 suits, a plaintiff must plead that each Government‑official defendant, through the official’s own individual actions, has violated the Constitution.” 653 F.3d 599. “We conclude that the plaintiffs have sufficiently alleged Secretary Rumsfeld’s personal responsibility. While it may be unusual that such a high‑level official would be personally responsible for the treatment of detainees, here we are addressing an unusual situation where issues concerning harsh interrogation techniques and detention policies were decided, at least as the plaintiffs have pled, at the highest levels of the federal government.” 653 F.3d 600.

With regard to the issue of qualified immunity, the Court states that “[t]he qualified immunity doctrine protects government officials ‘from liability for civil damages insofar as their conduct does not violate clearly established statutory or constitutional rights of which a reasonable person would have known.’ Harlow v. Fitzgerald, 457 U.S. 800, 818 (1982).” 653 F.3d 605‑06.

The Court uses a “two‑step sequence that the Supreme Court articulated in Saucier v. Katz, 533 U.S. 194, 200–01 (2001). We first determine whether “[t]aken in the light most favorable to the party asserting the injury ... the facts alleged show the [defendants’] conduct violated a constitutional right.” Id. at 201. Second, we determine if the right was “clearly established” at the time of the relevant events. Id.” 653 F.3d 606

“[A] reasonable official in Secretary Rumsfeld’s position in 2006 would have known that this amounted to unconstitutional treatment of a civilian U.S. citizen detainee.” 653 F.3d 610. “Where the constitutional violation is patently obvious and the contours of the right sufficiently clear, a controlling case on point is not needed to defeat a defense of qualified immunity.” Id.

Therefore, the Court finds that the Rumsfeld could not shield himself from liability with qualified immunity.

In addressing the issues of United State’s citizens using the Bivens remedy, the Court uses a two‑step process to find that the Plaintiffs were eligible to claim the remedy. “There can be no doubt that if a federal official, even a military officer, tortured a prisoner in the United States, the tortured prisoner could sue for damages under Bivens.” 653 F.3d 611.

In this case, the Defendants argue that civilian U.S. citizens can never pursue a Bivens remedy against any U.S. military official if the constitutional violations occurred in a war zone. The Court disagrees with this contention and proceeds by first addressing the nature of the Bivens remedy and then applying the two‑step process the Supreme Court has applied for deciding when a Bivens remedy should be available.

“The Supreme Court recognized in Bivens, however, that private citizens have an implied right of action directly under the Constitution to recover damages against federal officials for constitutional violations even where Congress has not conferred such a right by statute. In Bivens, the plaintiff sued federal law enforcement agents for searching his property without a warrant, using excessive force, and arresting him without probable cause. In holding that Bivens was entitled to sue the agents for damages, the Supreme Court observed that ‘where federally protected rights have been invaded, it has been the rule from the beginning that courts will be alert to adjust their remedies so as to grant the necessary relief.’” 653 F.3d 612.

The first step is to consider whether there is a sufficient “alternative remedy” for the alleged constitutional wrong indicating that Congress has intended to supplant Bivens. Here there is no meaningful alternative, and the defendants do not argue otherwise. The second step is to consider whether “special factors” weigh against recognition of a Bivens remedy under the circumstances. “In taking this second step, we explain that the key elements of plaintiffs’ claims are well established under Bivens: (a) that civilian claims against military personnel are permissible; (b) that claims based on abuse of prisoners are permissible; (c) that the Constitution governs the relationship between U.S. citizens and their government overseas; and (d) that claims against current and former cabinet officials are permitted.” 653 F.3d 611.

“The second step of the Bivens inquiry is to make the kind of remedial determination that is appropriate for a common‑law tribunal, paying particular heed, however, to any special factors counseling hesitation before authorizing a new kind of federal litigation.” 653 F.3d 614.

The Defendants argue that because the events occurred in a war zone, the Bivens claim should not be recognized. “The defendants are arguing for a truly unprecedented degree of immunity from liability for grave constitutional wrongs committed against U.S. citizens. The defense theory would immunize not only the Secretary of Defense but all personnel who actually carried out orders to torture a civilian U.S. citizen. The theory would immunize every enlisted soldier in the war zone and every officer in between. The defense theory would immunize them from civil liability for deliberate torture and even cold‑blooded murder of civilian U.S. citizens. The United States courts, and the entire United States government, have never before thought that such immunity is needed for the military to carry out its missions.” 653 F.3d 615.

Further, the Court notes that the Plaintiffs claim to the Bivens remedy would not extend beyond the core premise of the remedy, as it has been established that it applies to prisoners who have been abused by their federal jailors. It has also been well established that under Bivens, civilians could sue military personnel who violate their constitutional rights. “Third, when civilian U.S. citizens leave the United States, they take with them their constitutional rights that protect them from their own government.” 653 F.3d 616. Lastly, “[t]he Supreme Court has repeatedly entertained Bivens actions against other cabinet members.” 653 F.3d 617.

However, “[t]he defendants’ argument that the courts should stay out of military affairs rests on the assumption that the plaintiffs are mounting a broad challenge to U.S. military and detention policy, raising issues of national security and even foreign relations.” 653 F.3d 618. “[The plaintiffs] are not challenging military policymaking and procedure generally, nor an ongoing military action. They challenge only their particular torture at the hands and direction of U.S. military officials, contrary to statutory provisions and stated military policy, as well as the Constitution. Allowing Bivens liability in these unusual circumstances would not make courts, as defendants suggest, ‘the ultimate arbiters of U.S. military or foreign policy.’” 653 F.3d 618.

“The defendants do not argue that Congress has created an alternative remedy that forecloses a Bivens remedy. They argue, though, that because Congress has passed numerous pieces of legislation regarding detainee treatment, none of which provide detainees with a statutory private right of action, the courts should not recognize a Bivens remedy for civilian U.S. citizens tortured in military custody in a war zone.” 653 F.3d 622.

The Court disagrees with this argument, finding that Congress had not taken any steps to prevent citizens from using Bivens. To support this finding, the Court notes that Congress had enacted several laws that provide civil remedies under United States law for foreign citizens who are tortured by their own governments.

After evaluating the two‑step process, the Court concludes that Congress did not indicate any limitation to claims under the Bivens remedy that would cause the Plaintiffs’ inability to claim it. “In fact, Congress has acted to provide civil remedies to aliens who are tortured by their governments. It would be extraordinary to find that there is no such remedy for U.S. citizens tortured by their own government.” 653 F.3d 611.

Citation: Vance v. Rumsfeld, 653 F.3d 591 (7th Cir. 2011).