Supplemental Brief — Republic of Sudan, et al., Petitioners v. James Owens, et al.

No. 17-1236

IN THE

Supreme Court of the United States

————

REPUBLIC OF SUDAN, MINISTRY OF EXTERNAL

AFFAIRS AND MINISTRY OF THE INTERIOR OF THE

REPUBLIC OF SUDAN,

Petitioners,

v.

JAMES OWENS, et al.,

Respondents.

————

On Petition for a Writ of Certiorari to the

United States Court of Appeals

for the District of Columbia Circuit

————

SUPPLEMENTAL BRIEF IN SUPPORT OF

PETITION FOR A WRIT OF CERTIORARI

————

CHRISTOPHER M. CURRAN

Counsel of Record

NICOLE ERB

CLAIRE A. DELELLE

NICOLLE KOWNACKI

CELIA A. MCLAUGHLIN

WHITE & CASE LLP

701 Thirteenth Street, NW

Washington, DC 20005

(202) 626-3600

ccurran@whitecase.com

Counsel for Petitioners

June 3, 2019

WILSON-EPES PRINTING CO., INC. – (202) 789-0096 – WASHINGTON, D. C. 20002

i

TABLE OF CONTENTS

Page

TABLE OF AUTHORITIES ....................................... ii

SUPPLEMENTAL BRIEF FOR PETITIONER ........ 1

I. The United States Fails To Appreciate

That The D.C. Circuit’s “Lighter Burden”

Conflicts With Helmerich .................................1

II. The United States Admits That The

D.C. Circuit Allowed Jurisdictional Facts

To Be Established “Based Solely Upon”

Expert Opinion ..................................................6

III. The United States Obscures The Pertinent

Statutory Language And Misreads This

Court’s Precedents On Causation ....................7

IV. The United States Has Previously

Acknowledged That The Issues Here Raise

Important Foreign Relations Concerns..........10

CONCLUSION ......................................................... 11

ii

TABLE OF AUTHORITIES

Page(s)

CASES

Agudas Chasidei Chabad of U.S.

v. Russian Federation,

528 F.3d 934 (D.C. Cir. 2008) ....................... 2, 3, 5

Anza v. Ideal Steel Supply Corp.,

547 U.S. 451 (2006) ............................................... 8

Bell v. Hood,

327 U.S. 678 (1946) ........................................... 2, 5

Bolivarian Republic of Venezuela v.

Helmerich & Payne Int’l Drilling Co.,

137 S. Ct. 1312 (2017) .................................. passim

Holmes v. Secs. Inv’r Prot. Co.,

503 U.S. 258 (1992) ............................................... 8

Ins. Corp. of Ireland, Ltd.

v. Compagnie des Bauxites de Guinee,

456 U.S. 694 (1982) ....................................... 2, 6, 9

Marvel Characters, Inc. v. Kirby,

726 F.3d 119 (2d Cir. 2013) ................................... 7

Paroline v. United States,

134 S. Ct. 1710 (2014) ........................................... 8

Republic of Arg. v. Weltover,

504 U.S. 607 (1992) ............................................... 9

Rothstein v. UBS AG,

708 F.3d 82 (2d Cir. 2013) ..................................... 8

iii

Village of Hoffman Estates v.

Flipside, Hoffman Estates, Inc.,

455 U.S. 489 (1982) ............................................... 8

STATUTES, RULES, AND REGULATIONS

28 U.S.C. §1605(a)(2) .................................................. 9

28 U.S.C. §1605A(a)(1) ...................................... 7, 8, 9

OTHER AUTHORITIES

Brief for the United States as Amicus Curiae,

Bolivarian Republic of Venezuela v.

Helmerich & Payne Int’l Drilling Co.,

137 S. Ct. 1312 (May 24, 2016) (No. 15-423) ....... 10

Brief for the United States as Amicus Curiae

Supporting Petitioners, Bolivarian

Republic of Venezuela v.

Helmerich & Payne Int’l Drilling Co.,

137 S. Ct. 1312 (Aug. 26, 2016) (No. 15-423) ...... 10

Brief of the United States as Amicus Curiae,

Toshiba Corp. v. Auto. Indus. Pension Trust

Fund, No. 18-486 (U.S. May 20, 2019) .................. 8

Transcript of Oral Argument,

Bolivarian Republic of Venezuela v.

Helmerich & Payne Int’l Drilling Co.,

137 S. Ct. 1312 (2017) (No. 15-423) ..................... 10

1

SUPPLEMENTAL BRIEF FOR PETITIONER

While the United States maintains that a writ of

certiorari is not warranted, that position is

predicated upon a misreading of this Court’s

precedents, the D.C. Circuit’s decision below, and

Sudan’s arguments. When these misreadings are

clarified, it becomes apparent that certiorari is indeed

warranted, because the D.C. Circuit adopted legal

standards in conflict with this Court’s decision in

Helmerich and thereby permitted a default judgment

to stand in the absence of a legally sufficient showing

of jurisdictional facts. Nearly half a century after the

enactment of the FSIA, lower courts are still in

serious disarray on the important and recurring

question of the proper legal standard for establishing

jurisdictional facts necessary to subject foreign

sovereigns to subject-matter jurisdiction in U.S.

courts.

I.

The United States Fails To Appreciate That

The D.C. Circuit’s “Lighter Burden”

Conflicts With Helmerich

The United States is simply incorrect in arguing

that the D.C. Circuit’s decision here “does not

conflict” with this Court’s decision in Helmerich. U.S.

Br. 11.

The D.C. Circuit expressly held that

“[e]stablishing material support and causation for

jurisdictional purposes is a lighter burden than

proving a winning case on the merits.” App. 42a.

That “lighter burden” for jurisdictional purposes

squarely conflicts with Helmerich’s holding that

jurisdictional facts must be conclusively established

before a U.S. court may assert subject-matter

jurisdiction over a foreign sovereign. See 137 S. Ct.

2

at 1319. The United States seems to think that the

D.C. Circuit’s decision cannot conflict with

Helmerich, given that the D.C. Circuit acknowledged

Helmerich (U.S. Br. 11-12); fact is, the D.C. Circuit

acknowledged Helmerich and then promptly adopted

and applied a legal standard squarely at odds with it.

Once Sudan appeared and challenged the

jurisdictional facts underlying the $10.3 billion

default judgment against it, the district court was

required to conclusively resolve the factual disputes

to determine whether subject-matter jurisdiction

existed. If that determination overlapped with the

merits, “so be it.” Helmerich, 137 S. Ct. at 1319.

Instead, the district court merely considered whether

the plaintiffs had produced “some” evidence, even if

“meager.” App. 522a. The D.C. Circuit affirmed,

endorsing the “lighter burden” for jurisdictional facts.

App. 42a, 146a-47a. That decision defied Helmerich

and also Insurance Corp. of Ireland, 456 U.S. 694

(1982), which permits any defaulting party to appear

subsequently and obtain de novo consideration of

subject-matter jurisdiction, even after a default

judgment is entered. Pet. 17-19.

The United States asserts that the D.C. Circuit

was using the term “lighter burden” to refer not to

the

“non-frivolous”

standard

condemned

in

Helmerich, but to a burden-shifting approach under

which a plaintiff bears a modest burden of

production. U.S. Br. 12. That interpretation of the

D.C.

Circuit’s

decision,

while

possible,

is

questionable, because the D.C. Circuit appeared to

use the “lighter burden” to refer to Chabad’s

discussion of “the Bell v. Hood standard” of non-

3

frivolousness rather than to Chabad’s discussion of

burden shifting. App. 42a. Ultimately, however, this

debate does not matter; one way or another, the D.C.

Circuit expressly endorsed a “lighter burden” for

establishing jurisdictional facts, thereby running

headlong into Helmerich.

Adding insult to injury, the D.C. Circuit endorsed

a ridiculously “light[]” burden for establishing the

jurisdictional facts.

The district court required

plaintiffs to produce only “some” evidence, even if

“meager.” App. 522a (emphasis in original). In

affirming, the D.C. Circuit stated that “the only

question before this court is whether the plaintiffs

have met their rather modest burden of production to

establish the court’s jurisdiction.” App. 55a. The

D.C. Circuit contrasted this “rather modest” burden

with the heavier burden of proving a case on the

merits. Id. This bifurcated approach cannot be

squared with Helmerich.

As the United States emphasizes (U.S. Br. 11-12),

the D.C. Circuit acknowledged Helmerich and its

requirement that plaintiffs “prove the facts

supporting the court’s jurisdiction under the FSIA.”

App. 42a. But the D.C. Circuit’s acknowledgement of

Helmerich is immediately preceded by its

endorsement of a “lighter burden” for jurisdictional

facts (App. 42a) and is immediately followed by an

endorsement of the district court’s finding that

plaintiffs’ evidence satisfied “the jurisdictional

standard” (App. 43a). See also App. 55a (“the only

question before this court is whether the plaintiffs

have met their rather modest burden of production to

establish the court’s jurisdiction”); App. 88a (“The

4

district court, therefore, correctly held the plaintiffs

met their burden of production . . . .”). The D.C.

Circuit’s discussion of Helmerich makes it

inescapable that the D.C. Circuit failed to appreciate

that Helmerich forecloses any lower standard for

jurisdictional facts.

Quite simply, there is no

separate “jurisdictional standard”; facts necessary to

establish jurisdiction over a foreign state must be

established to the same extent as facts necessary to

the merits of a claim.

The D.C. Circuit’s misapprehension of Helmerich

might be explained by the timing of that decision,

which was decided more than six months after the

oral argument before the D.C. Circuit in this case.

While the parties notified the D.C. Circuit of

Helmerich, the D.C. Circuit did not have the benefit

of briefing on the case. The D.C. Circuit’s treatment

of Helmerich suggests that the case was an

afterthought.

In any event, the D.C. Circuit’s

decision stands as controlling authority in a circuit

that is always a proper venue for FSIA cases and that

is in fact the venue for the overwhelming majority of

FSIA cases. That controlling authority — catnip for

forumshoppers — cannot stand.

The D.C. Circuit applied an incorrect legal

standard in affirming jurisdiction. Contrary to the

suggestion of the United States (U.S. Br. 10), there is

nothing “fact-bound” about Sudan’s argument. A

challenge to a legal standard is a quintessential issue

of law. And the United States’ cynical reformulation

of Sudan’s Questions Presented should not obscure

that Sudan is raising purely issues of law. Sudan

addresses facts solely to show that the D.C. Circuit’s

5

erroneous

legal

standards

were

outcome

determinative. Sudan seeks reversal and a remand

for the application of the correct legal standard for

jurisdiction under the FSIA.

The United States faults Sudan’s identification of

a circuit split on burden-shifting under the FSIA.

U.S. Br. 12-13. First, the United States criticizes

Sudan for identifying the circuit split in its reply brief

(id. at 12), but that criticism is unfair; it was only in

Respondents’ opposition to Sudan’s Petition that

Respondents first interpreted the D.C. Circuit’s

citation to Chabad as referencing burden-shifting

rather than invoking the Bell v. Hood non-frivolous

standard. Opp’n 19-20. It was entirely appropriate

of Sudan to show that this case is certworthy even

under

Respondents’

questionable

alternative

interpretation of the D.C. Circuit’s opinion. Second,

the United States disputes the existence of a circuit

split, but can do so only by mischaracterizing Sudan’s

position. The circuit split Sudan identified is over the

height of a plaintiff’s burden of production (“meager”

versus preponderance of the evidence) (Reply 6-7),

not over “whether a plaintiff or a foreign sovereign

defendant bears the initial evidentiary burden,” as

the United States mischaracterizes (U.S. Br. 13).

In another inexcusable mischaracterization of

Sudan’s position, the United States asserts that

Sudan’s Petition argued that the D.C. Circuit should

have applied de novo review as to jurisdictional facts.

U.S. Br. 14 (citing Pet. 16-19). In reality, Sudan’s

Petition faults the D.C. Circuit for not requiring the

district court to fully consider de novo Sudan’s

challenge to the jurisdictional findings underlying the

6

default judgment.

As the Petition makes clear,

Insurance Corp. of Ireland and its progeny establish

that any defaulting defendant may subsequently

appear and obtain de novo consideration of subjectmatter jurisdiction. Pet. 17-19. Because both the

United States and Respondents respond only to their

mischaracterized version of Sudan’s argument, there

is no rebuttal to Sudan’s actual argument as to how

the D.C. Circuit’s decision conflicts with Insurance

Corp. of Ireland and its progeny.

The upshot of the D.C. Circuit’s defiance of

Helmerich and Insurance Corp. of Ireland is that

Sudan is saddled with a $10.3 billion default

judgment based on “some” “meager” evidence

supporting subject-matter jurisdiction. Even after

Sudan appeared in the district court to challenge the

default judgment, its jurisdictional arguments never

received plenary consideration.

II. The United States Admits That The

D.C. Circuit Allowed Jurisdictional Facts To

Be Established “Based Solely Upon” Expert

Opinion

Unlike Respondents (Opp’n 23-26), the United

States at least admits that the district court and the

D.C. Circuit permitted the facts necessary for subjectmatter jurisdiction to be based solely upon the

opinion testimony of three expert witnesses. U.S. Br.

8-9, 15. The United States nonetheless defends the

lower court’s reliance solely upon expert opinion,

accepting the D.C. Circuit’s holding that the FSIA

does not require any “particular type of admissible

evidence.” U.S. Br. 15 (citing App. 64a). Indeed, the

7

United States even accepts the D.C. Circuit’s holding

that looser evidentiary standards should apply under

the FSIA’s terrorism exception (U.S. Br. 15) — an

atextual holding that turns presumptive immunity on

its head.

According to the United States, the D.C. Circuit

did not accept expert opinion testimony as a

substitute for factual findings, but instead “concluded

that the district court did not clearly err in making

factual findings based on admissible expert opinions.”

U.S. Br. 17. The United States apparently thinks

this metaphysical distinction avoids a conflict with

Marvel Characters and other authorities condemning

the use of expert witnesses as a means to satisfy

burdens requiring factual evidence. Pet. 27-30. In

any event, the United States does not dispute that

the district court and the D.C. Circuit, applying their

“lighter burden,” permitted jurisdictional facts to be

found based solely on expert opinion, without any

actual factual evidence.

III.

The United States Obscures The Pertinent

Statutory Language And Misreads This

Court’s Precedents On Causation

The United States also defends the D.C. Circuit’s

holding on causation, even though that holding

ignored

the

specific-intent

and

directness

requirements of §1605A(a)(1).

U.S. Br. 18-22.

Unhelpfully, the United States obscures Sudan’s

argument by italicizing the wrong “for” when blockquoting the statutory language. Id. at 18. Sudan’s

consistent position is, and has been, that

§1605A(a)(1) requires specific intention through the

language “or the provision of material support or

8

resources for such an act” (emphasis added). Sudan

raised this argument in its opening brief in the D.C.

Circuit (at pages 27-28), where Sudan quoted the

appropriate “for” and cited to Village of Hoffman

Estates v. Flipside, Hoffman Estates, Inc., 455 U.S.

489, 502 (1982), with the parenthetical statement

“holding that the statutory use of the term ‘for’

requires a showing of intent.” And Sudan has also

consistently maintained that traditional proximate

causation includes an element of directness. Sudan

raised this argument in its opening brief in the D.C.

Circuit at page 27, where Paroline and Rothstein are

cited for their descriptions of the concept of proximate

causation, as including the element of directness. See

also Reply 10.

The United States tries to limit Paroline (and

Anza and Holmes) to their specific statutory contexts,

as though proximate cause includes directness in

some contexts but not in others. U.S. Br. 20-21. But

those cases were unmistakably discussing the

traditional common-law concept of proximate cause

under hornbook law. Indeed, the United States

admitted as much in another CVSG brief it filed with

this Court one day before it submitted its CVSG brief

here: there it stated that “common-law proximatecausation principles . . . require consideration of the

directness of the link between the defendant’s

conduct and the plaintiff’s injury.” Brief of the

United States as Amicus Curiae at 17, Toshiba Corp.

v. Auto. Indus. Pension Trust Fund, No. 18-486 (U.S.

May 20, 2019) (citing Holmes, 503 U.S. at 268).

And the United States is off base suggesting that

the FSIA’s use of “direct” in another exception (i.e.

9

“direct effect” in the commercial activity exception to

sovereign immunity, 28 U.S.C. §1605(a)(2)) means

directness is not part of proximate causation under

the FSIA’s terrorism exception. U.S. Br. 19-20. If

anything, that contrast merely suggests that

Congress used the term “direct” when intending to

exclude other elements of proximate causation such

as substantiality and foreseeability. See Republic of

Arg. v. Weltover, 504 U.S. 607, 618 (1992) (holding

that “direct effect” under the commercial-activity

exception includes directness but not substantiality

or foreseeability).

Only by reading out intent and directness from

§1605A(a)(1)’s causation requirement was the D.C.

Circuit able to reach this extraordinary conclusion:

“In sum, that the evidence failed to show Sudan

either specifically intended or directly advanced the

1998 embassy bombings is irrelevant to proximate

cause and jurisdictional causation.” App. 88a.

All told, the D.C. Circuit’s “lighter burden” for

jurisdictional facts allowed the court to affirm a $10.3

billion default judgment against a foreign sovereign,

based on “some” “meager” evidence, based solely upon

opinion testimony of expert witnesses, even though

that evidence failed to show that Sudan specifically

intended or directly advanced the horrific bombings.

Sudan regrets defaulting in the district court, but

once it appeared to challenge the jurisdictional basis

for the default judgment, Helmerich and Insurance

Corp. of Ireland entitled Sudan to a de novo

determination of jurisdictional facts.

10

IV.

The United States Has Previously

Acknowledged That The Issues Here Raise

Important Foreign Relations Concerns

The United States asserts without explanation

that a writ of certiorari is not warranted by foreignrelations concerns (U.S. Br. 10), but in Helmerich the

United States told this Court repeatedly — at both

the petition and merits stages — that imposing a

lighter burden for jurisdictional facts raised very

serious foreign-relations concerns. See, e.g., Brief for

the United States as Amicus Curiae at 16, Helmerich,

137 S. Ct. 1312 (May 24, 2016) (No. 15-423) (urging

certiorari because a “permissive” standard for

establishing jurisdiction “may result in adverse

foreign-relations consequences and reciprocal adverse

treatment of the United States in foreign courts”);

Brief for the United States as Amicus Curiae

Supporting Petitioners at 20, Helmerich, 137 S. Ct.

1312 (August 26, 2016) (No. 15-423) (“Subjecting a

foreign sovereign to the jurisdiction of a U.S. court

without first making the substantive legal

determination that the FSIA’s immunity exceptions

dictate may well be understood as an affront to that

sovereign’s dignity.” (internal quotations and

brackets omitted)); Transcript of Oral Argument at

25, Helmerich, 137 S. Ct. 1312 (2017) (No. 15-423)

(attorney from Office of the Solicitor General:

“asserting jurisdiction over a foreign state based on a

nonfrivolous allegation . . . is something that doesn’t

respect

foreign

state’s

dignity”).

These

representations of the United States in Helmerich

apply with equal force here, and the United States

offers no rationale to the contrary.

11

CONCLUSION

For the foregoing reasons and those stated in

Sudan’s Petition and Reply, this Court should grant

Sudan’s Petition for a Writ of Certiorari.

Respectfully submitted,

CHRISTOPHER M. CURRAN

Counsel of Record

NICOLE ERB

CLAIRE A. DELELLE

NICOLLE KOWNACKI

CELIA A. MCLAUGHLIN

WHITE & CASE LLP

701 Thirteenth Street, NW

Washington, DC 20005

(202) 626-3600

ccurran@whitecase.com

Counsel for Petitioners

June 3, 2019