Amicus Curiae Brief — YPF S.A., Petitioner v. Petersen Energia Inversora S.A.U., et al.

Nos. 18-575 & 18-581

IN THE

Supreme Court of the United States

________________________________

YPF S.A.,

Petitioner,

v.

PETERSEN ENERGÍA INVESORA S.A.U AND

PETERSEN ENERGÍA, S.A.U.,

Respondents.

________________________________

ARGENTINE REPUBLIC,

Petitioner,

v.

PETERSEN ENERGÍA INVESORA S.A.U AND

PETERSEN ENERGÍA, S.A.U.,

Respondents.

________________________________

On Petition for a Writ of Certiorari

to the United States Court of Appeals

for the Second Circuit

________________________________

BRIEF OF THE GOVERNMENT OF THE

UNITED MEXICAN STATES AS AMICUS CURIAE

IN SUPPORT OF PETITIONERS

________________________________

EAMON P. JOYCE

SIDLEY AUSTIN LLP

787 Seventh Avenue

New York, NY 10019

(212) 839-5300

JOSEPH R. GUERRA *

SIDLEY AUSTIN LLP

1501 K Street, N.W.

Washington, D.C. 20005

(202) 736-8000

jguerra@sidley.com

COLLIN P. WEDEL

SIDLEY AUSTIN LLP

555 West Fifth Street

Los Angeles, CA 90013

(213) 896-6000

Counsel for Amicus Curiae

December 3, 2018

* Counsel of Record

TABLE OF CONTENTS

Page

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

ii

INTEREST OF AMICUS CURIAE ......................

1

ARGUMENT .........................................................

4

I. THE SECOND CIRCUIT’S DECISION

RAISES EXCEPTIONALLY IMPORTANT

QUESTIONS ABOUT INTERNATIONAL

COMITY .......................................................

4

II. THE SECOND CIRCUIT’S DECISION

CONFLICTS WITH THOSE OF THIS

COURT AND ANOTHER CIRCUIT ...........

9

CONCLUSION .....................................................

14

(i)

ii

CASES

TABLE OF AUTHORITIES

Page

Animal Sci. Prods., Inc. v. Hebei Welcome

Pharm. Co., 138 S. Ct. 1865 (2018) ...........

7

Banco Nacional de Cuba v. Sabbatino, 376

U.S. 398 (1964) ...........................................

5

Bolivarian Republic of Venez. v. Helmerich

& Payne Int’l Drilling Co., 137 S. Ct. 1312

(2017) ................................................. 4, 9, 10, 11

Butters v. Vance Int’l, Inc., 225 F.3d 462 (4th

Cir. 2000) ....................................................

6

Credit Suisse v. U.S. Dist. Court for the Cent.

Dist. of Cal., 130 F.3d 1342 (9th Cir.

1997) ...........................................................

5

de Sanchez v. Banco Cent. de Nicar., 770

F.2d 1385,1395 (5th Cir. 1985) ..................

11

EEOC. v. Arabian Am. Oil Co., 499 U.S. 244

(1991), superseded by statute as stated in

Arbaugh v. Y&H Corp., 546 U.S. 500

(2006) ..........................................................

4

Gold Reserve Inc. v. Bolivarian Republic of

Venezuela, 146 F. Supp. 3d 112 (D.D.C.

2015) ...........................................................

7

Haven v. Polska, 215 F.3d 727 (7th Cir.

2000) ...........................................................

9

Jungquist v. Sheikh Sultan Bin Khalifa Al

Nahyan, 115 F.3d 1020 (D.C. Cir. 1997) ...

12

Millen Indus., Inc. v. Coordination Council

for N. Am. Affairs, 855 F.2d 879 (D.C. Cir.

1988) ...........................................................

12

N.Y. Cent. R.R. v. Chisholm, 268 U.S. 29

(1925) ..........................................................

8

Nat’l City Bank of N.Y. v. Republic of China,

348 U.S. 356 (1955) ....................................

8

iii

TABLE OF AUTHORITIES—continued

Page

OBB Personenverkehr AG v. Sachs, 136 S.

Ct. 390 (2015) .............................................

10

Piper Aircraft Co. v. Reyno, 454 U.S. 235

(1981) ..........................................................

6

Republic of Austria v. Altmann, 541 U.S. 677

(2004) ..........................................................

9

Rong v. Liaoning Province Gov’t, 452 F.3d

883 (D.C. Cir. 2006) ........................... 11, 12, 13

Sampson v. Fed. Republic of Ger., 250 F.3d

1145 (7th Cir. 2001) ...................................

4

Saudi Arabia v. Nelson, 507 U.S. 349

(1993) .......................................................... 9, 10

Spectrum Stores, Inc. v. Citgo Petroleum

Corp., 632 F.3d 938 (5th Cir. 2011) ...........

8

TRW Inc. v. Andrews, 534 U.S. 19 (2001) ....

10

USX Corp. v. Adriatic Ins. Co., 345 F.3d 190

(3d Cir. 2003) ..............................................

3

Vencedora Oceanica Navigacion, S.A. v.

Compagnie Nationale Algerienne De

Navigation, 730 F.2d 195 (5th Cir.

1984) ...........................................................

3

Verlinden B.V. v. Cent. Bank of Nigeria, 461

U.S. 480 (1983) ................................... 3, 8, 9, 13

World Wide Minerals, Ltd. v. Republic of

Kaz., 296 F.3d 1154 (D.C. Cir. 2002) .........

5

TREATY AND STATUTE

28 U.S.C. § 1605(a) .................................... 2, 5, 11

Vienna Convention on Diplomatic Relations

art. 3, Apr. 18, 1961, 23 U.S.T. 3227, 500

U.N.T.S. 95 .................................................

2

iv

TABLE OF AUTHORITIES—continued

LEGISLATIVE HISTORY

Page

H.R. Rep. No. 94-1487 (1976), reprinted in

1976 U.S.C.C.A.N. 6604 .............................

11

SCHOLARLY AUTHORITIES

Philippe Lieberman, Case Comment,

Expropriation, Torture, and Jus Cogens

Under the Foreign Sovereign Immunities

Act: Siderman De Blake v. Republic of

Argentina, 24 U. Miami Inter-Am. L. Rev.

503 (1993) ...................................................

Thomas Weatherall, Jus Cogens and

Sovereign Immunity: Reconciling Divergence in Contemporary Jurisprudence, 46

Geo. J. Int’l L. 1151 (2015) ........................

6

4

OTHER AUTHORITIES

M. Angeles Villarreal, Cong. Research Serv.,

RL32934, U.S.-Mexico Economic Relations: Trends, Issues, and Implications

(2018),

http://www.fas.org/sgp/crs/row/

RL32934.pdf ...............................................

SelectUSA, U.S. Dep’t of Commerce, Foreign

Direct Investment (FDI): MEXICO (2017),

https://www.selectusa.gov/servlet/servlet.

FileDownload?file=015t0000000LKNE.....

1

1

INTEREST OF AMICUS CURIAE1

The Government of the United Mexican States

(“Mexico”) is a foreign sovereign and an international

partner of the United States. The roots of cooperation

between Mexico and the U.S. run deep. Their executive

and legislative branches, almost every federal agency,

and dozens of state and local governments collaborate

directly with their counterparts across the border constantly. The interaction of labor markets, tourism,

business travel, and student migration is of great importance to the economies of both countries. To enhance economic trade, Mexico and the U.S. have pursued trade liberalization through multilateral, regional, and bilateral negotiations, resulting in multifaceted economic relationships. Foreign investment

also plays a key role since the U.S. represents the largest source of foreign direct investment in Mexico,2 and

Mexico’s investment in the U.S. has increased during

last years to $34.4 billion.3

1 Under Supreme Court Rule 37.6, amicus curiae states that no

counsel for a party authored this brief in whole or in part, and no

person other than amicus curiae and its counsel made any monetary contribution intended to fund the preparation and submission of this brief. Pursuant to Rule 37.2(a), counsel of record for

all parties received notice of the Government of the United Mexican States’ intention to file this brief. The parties have consented

to the filing of this brief, each in a separate writing that is being

filed concurrently with this brief.

2 M. Angeles Villarreal, Cong. Research Serv., RL32934, U.S.-

Mexico Economic Relations: Trends, Issues, and Implications,

1–2, 4 (2018), http://www.fas.org/sgp/crs/row/RL32934.pdf.

3 SelectUSA, U.S. Dep’t of Commerce, Foreign Direct Investment (FDI): MEXICO (2017), https://www.selectusa.gov/servlet/

servlet.FileDownload?file=015t0000000LKNE.

2

Under the Vienna Convention on Diplomatic Relations (“VCDR”), to which both Mexico and the U.S. are

signatories, Mexico has a right to protect its own interests within the limits of international law. See Vienna

Convention on Diplomatic Relations art. 3, Apr. 18,

1961, 23 U.S.T. 3227, 500 U.N.T.S. 95. Consequently,

it submits this brief to underscore the importance of

ensuring that courts interpret the “commercial activity” exception to immunity in the Foreign Sovereign

Immunities Act (“FSIA”), 28 U.S.C. § 1605(a)(2), in a

uniform—and narrow—way.

Although Mexico has no interest in the dispute that

gave rise to this lawsuit, Mexico has always—expressly and publicly—acknowledged the sovereign

right of all countries to decide on the public policies

that should apply in their territories. Consequently,

Mexico has a substantial interest in the threshold

question of immunity presented here, because that

question deals with the paradigmatically sovereign act

of expropriation. A nation’s decisions about how to use,

transfer, and dispose of domestic property are at the

heart of its sovereignty, and are decisions that Congress has generally excluded from the jurisdiction of

U.S. courts. Forcing foreign nations to defend such decisions in a hostile forum impermissibly meddles with

their domestic affairs and ultimately harms the

United States’ interests. Not only do such suits risk

embarrassing key allies and trade partners, but they

also lead inexorably to a reciprocal expansion of suits

against the United States.

Here, by ruling that the commercial activity exception to the FSIA is broad enough to encompass such

sovereign acts of expropriation, the Second Circuit has

upended the typically narrow exceptions to immunity.

Indeed, its decision all but nullifies the FSIA’s exist-

3

ing, narrow exception for expropriation, thereby potentially exposing Mexico and other sovereigns to suit in

U.S. courts for decisions about use and ownership of

property within their own borders.

In addition to its interest in protecting against a curtailment of its sovereign immunity, Mexico also has an

interest in ensuring that U.S. courts understand the

scope of that immunity in a uniform manner. The purpose of the FSIA is, in part, to encourage “a uniform

body of law in this area,” “[i]n view of the potential sensitivity of actions against foreign states” and the

heightened risk of forum shopping. Verlinden B.V. v.

Cent. Bank of Nigeria, 461 U.S. 480, 489 (1983) (alteration in original) (quoting H.R. Rep. No. 94-1487, at 32

(1976)); see also USX Corp. v. Adriatic Ins. Co., 345

F.3d 190, 207 (3d Cir. 2003) (“[U]niformity in decision . . . is desirable since a disparate treatment of

cases involving foreign governments may have adverse

foreign relations consequences.” (quoting H.R. Rep.

No. 94-1487, at 13)); Vencedora Oceanica Navigacion,

S.A. v. Compagnie Nationale Algerienne De Navigation, 730 F.2d 195, 203 (5th Cir. 1984) (per curiam)

(“[I]t is highly desirable to avoid circuit conflicts in the

sensitive area of sovereign immunity.”).

The Second Circuit’s decision here, however, creates

significant uncertainty about how broadly courts may

interpret the “commercial activity” exception to immunity, and whether that exception may reach even

activity that is inextricably intertwined with the sovereign act of expropriation. Such uncertainty undermines the development of a “uniform body of law” and

will encourage forum shopping, making it harder for

Mexico and other sovereigns to predict how, whether,

and where their sovereign acts may subject them to jurisdiction in the United States.

4

ARGUMENT

I. THE SECOND CIRCUIT’S DECISION RAISES EXCEPTIONALLY IMPORTANT QUESTIONS ABOUT INTERNATIONAL COMITY.

This Court should grant review because the Second

Circuit’s decision implicates exceptionally important

questions about foreign policy and international comity.

Principles of sovereign immunity, such as par in

parem non habet imperium—between equals no

power—long predate the FSIA. See Thomas Weatherall, Jus Cogens and Sovereign Immunity: Reconciling Divergence in Contemporary Jurisprudence, 46

Geo. J. Int'l L. 1151, 1152 (2015). Those principles,

which Congress incorporated into the Act, “recognize[]

the ‘absolute independence of every sovereign authority’ and help[] to ‘induc[e]’ each nation state, as a matter of ‘international comity,’ to ‘respect the independence and dignity of every other,’ including our own.”

Bolivarian Republic of Venez. v. Helmerich & Payne

Int’l Drilling Co., 137 S. Ct. 1312, 1319–20 (2017)

(third alteration in original) (quoting Berizzi Bros. v.

S.S. Pesaro, 271 U.S. 562, 575 (1926)). Maintaining respect for principles of international comity is imperative, because suits against sovereigns “might have serious foreign policy implications which courts are illequipped to anticipate or handle,” Sampson v. Fed. Republic of Ger., 250 F.3d 1145, 1155–56 (7th Cir. 2001)

(quoting Frolova v. USSR, 761 F.2d 370, 375 (1985)

(per curiam)); see also EEOC v. Arabian Am. Oil Co.,

499 U.S. 244, 248 (1991) (addressing need “to protect

against unintended clashes between our laws and

those of other nations which could result in international discord” and harm to U.S. interests), characterization of holding as “jurisdictional” superseded by Arbaugh v. Y&H Corp., 546 U.S. 500 (2006).

5

Concerns about “foreign policy implications” and “international discord” are at their highest when, as here,

foreign sovereigns engage in the quintessentially sovereign act of expropriation. As the United States observed last term, “[g]overnmental decisions involving

property . . . within a sovereign’s own territorial jurisdiction are generally reserved to that sovereign free of

interference by the courts of another nation.” Brief for

the United States as Amicus Curiae Supporting Petitioners at 17, Helmerich, 183 S. Ct. 1312 (No. 15-423),

2016 WL 4524346 (citing Asociacion de Reclamantes v.

United Mexican States, 735 F.2d 1517, 1520–24 (D.C.

Cir. 1984)). Consequently, sovereigns generally are

empowered to make (and to change) their own rules

about when and whether to expropriate property. Id.;

see Banco Nacional de Cuba v. Sabbatino, 376 U.S.

398, 400–01, 436–37 (1964) (expropriation of American

property by Cuba is an act of state); World Wide Minerals, Ltd. v. Republic of Kaz., 296 F.3d 1154, 1166

(D.C. Cir. 2002) (holding, under act of state doctrine,

that where conduct resulting in breach was “accomplished pursuant to” a sovereign act of expropriation,

“the Judicial Branch will not examine the validity of a

taking of property within its own territory by a foreign

sovereign government” (quoting Sabbatino, 376 U.S.

at 428)); Credit Suisse v. U.S. Dist. Court for the Cent.

Dist. Of Cal., 130 F.3d 1342, 1347 (9th Cir. 1997) (expropriation of assets is “paradigmatically sovereign in

nature” (quoting Callejo v. Bancomer, S.A., 764 F.2d

1101, 1116 (5th Cir. 1985))).

Recognizing this, Congress has authorized courts to

exercise jurisdiction over a sovereign act of expropriation only where a plaintiff can validly claim that the

taking violated international law. See 28 U.S.C.

§ 1605(a)(3). No such claim was made in this case, yet

6

the Second Circuit concluded that claims based on conduct that directly ensues from an expropriation can be

reviewed in U.S. courts under the FSIA’s commercial

activity exception. The Second Circuit’s decision transgresses the historical limits on U.S. judicial interference with sovereign acts. Without clarity and correction from this Court, that decision threatens to disrupt

international comity in at least three, equally troubling ways.

First, subjecting sovereigns to suit for harms flowing

from expropriative acts forces them to defend their internal deliberative processes in a potentially hostile forum. That is the sort of awkward spectacle that the

FSIA aims to prevent. “One of the main concerns of the

immunity framework adopted by the FSIA is to accommodate ‘the interests of foreign states in avoiding the

embarrassment of defending the propriety of [sovereign] acts before a foreign court.’” Butters v. Vance

Int’l, Inc., 225 F.3d 462, 465 (4th Cir. 2000) (quoting

Broadbent v. Org. of Am. States, 628 F.2d 27, 33 (D.C.

Cir. 1980)); see also Philippe Lieberman, Case Comment, Expropriation, Torture, and Jus Cogens Under

the Foreign Sovereign Immunities Act: Siderman De

Blake v. Republic of Argentina, 24 U. Miami Inter-Am.

L. Rev. 503, 528–29 (1993) (“American courts taking

jurisdiction because of post-expropriation commercial

activities must review acts of governments which Congress intended to be reviewable only within the narrow

confines of [the FSIA’s expropriation exception].”).

Instead, other, more-neutral, and more-convenient

fora exist to resolve such disputes. Cf. Piper Aircraft

Co. v. Reyno, 454 U.S. 235, 254 & n.22 (1981) (discussing circumstances where “the remedy provided by the

alternative forum is so clearly inadequate or unsatisfactory that it is no remedy at all.”). Indeed, the inter-

7

national community, over the last half-century, has relied successfully on alternative dispute resolution systems to prevent discrimination against the sovereign

and the business entity. E.g., Gold Reserve Inc. v. Bolivarian Republic of Venezuela, 146 F. Supp. 3d 112,

116 (D.D.C. 2015) (enforcing arbitration award obtained through International Centre for Settlement of

Investment Disputes between Canadian mining company and nation of Venezuela).

This case highlights the potential for embarrassment in mounting a defense of a sovereign’s exercise of

its core powers in a foreign forum. Petitioner had attempted to demonstrate how its takeover complied

with Argentine law by submitting testimony from an

Argentine legal expert, but the district court and court

of appeal both disregarded those views, relying instead

on their own interpretations of Argentine law. See Argentine Republic Pet. Cert. at 18–19 n.5; App. to Argentine Republic Pet. Cert. 24a (court of appeal “conclud[ing] that [Argentina’s expert’s] opinion does not

establish what Argentina says it does”); Joint Appendix at A-538, Petersen Energía Inversora, S.A.U. v. Argentine Republic (No. 16-3303-CV(L)), 895 F.3d 194

(2d Cir. 2018) (district court declaring that “I actually

don’t really care what the experts say”). Contra Animal Sci. Prods., Inc. v. Hebei Welcome Pharm. Co., 138

S. Ct. 1865, 1869, 1873 (2018) (“In the spirit of ‘international comity,’ . . . a federal court should carefully

consider a foreign state’s views about the meaning of

its own laws” and “accord respectful consideration” to

those views (quoting Societe Nationale Industrielle

Aerospatiale v.U.S. Dist. Court for the S. Dist. of Iowa,

482 U.S. 522, 543 & n.27 (1987))).

Second, subjecting a sovereign’s governmental decision-making to scrutiny in a foreign forum necessarily

thrusts courts into the realm of foreign affairs, an area

8

where they lack both expertise and constitutional responsibility. That is a result that Congress sought to

avoid with respect to expropriative acts that do not violate international law. See Spectrum Stores, Inc. v.

Citgo Petroleum Corp., 632 F.3d 938, 955–56 (5th Cir.

2011) (affirming dismissal of antitrust claims under

act of state doctrine because “[t]he granting of any relief to Appellants would effectively order foreign governments to dismantle their chosen means of exploiting the valuable natural resources within their sovereign territories” and thereby “frustrate the longstanding foreign policy of the political branches by wading . . . brazenly into the sphere of foreign relations”).

Third, as this Court has recognized on several occasions, expansions of FSIA jurisdiction that infringe on

sovereignty tend to be reciprocated by other nations,

and will increase the United States’ exposure to suit in

foreign forums. See Nat’l City Bank of N.Y. v. Republic

of China, 348 U.S. 356, 362 (1955) (sovereign immunity is derived from standards of “reciprocal self-interest”); see also Verlinden, 461 U.S. at 493 (“Actions

against foreign sovereigns in our courts raise sensitive

issues concerning the foreign relations of the United

States.”); N.Y. Cent. R.R. v. Chisholm, 268 U.S. 29, 31–

32 (1925) (adjudicating foreign dispute risks “an interference with the authority of another sovereign, contrary to the comity of nations, which the other state

concerned justly might resent” (quoting Am. Banana

Co. v. United Fruit Co., 213 U.S. 347, 356 (1909))).

That is just the sort of result this Court sought to avoid

in Helmerich. There, this Court accepted the Department of State’s warning against interpreting the

FSIA’s expropriation exception in a manner that

“would ‘affron[t]’ other nations, producing friction in

our relations with those nations and leading some to

9

reciprocate by granting their courts permission to embroil the United States in ‘expensive and difficult litigation, based on legally insufficient assertions that

sovereign immunity should be vitiated.’” 137 S. Ct. at

1322 (alteration in original) (quoting Brief for United

States as Amicus Curiae Supporting Petitioners at 21–

22, Helmerich, 137 S. Ct. 1312 (No. 15-423), 2016 WL

4524346).

II. THE SECOND CIRCUIT’S DECISION CONFLICTS WITH THOSE OF THIS COURT

AND ANOTHER CIRCUIT.

Review is also warranted because the Second Circuit’s decision departs from this Court’s FSIA jurisprudence and directly conflicts with the decisions of the

D.C. Circuit.

1. The Second Circuit’s decision below cannot be reconciled with this Court’s repeated instructions to interpret FSIA’s exceptions narrowly. In light of the

weighty foreign policy implications at play when a sovereign is sued, this Court has repeatedly emphasized

that “[a] foreign state is normally immune.” Verlinden,

461 U.S. at 488. Jurisdiction is permissible only where

the FSIA “carves out certain exceptions to its general

grant of immunity,” Republic of Austria v. Altmann,

541 U.S. 677, 691 (2004). Exceptions to immunity are

“narrowly construed.” Haven v. Polska, 215 F.3d 727,

731 (7th Cir. 2000).

This case involves only the commercial activity exception. Consistent with the general norms of FSIA jurisprudence, this Court has interpreted that exception

narrowly. “[A] state engages in commercial activity . . .

where it exercises ‘only those powers that can also be

exercised by private citizens,’ as distinct from those

‘powers peculiar to sovereigns.’” Saudi Arabia v. Nel-

10

son, 507 U.S. 349, 360 (1993) (emphasis added) (quoting Republic of Arg. v. Weltover, Inc., 504 U.S. 607, 614

(1992)). Put differently, the commercial activity exception confers jurisdiction only in “cases ‘arising out of a

foreign state’s strictly commercial acts.’” Helmerich,

137 S. Ct. at 1315 (emphasis added) (quoting Verlinden, 461 U.S. at 487). Here, because petitioner’s takeover was not accomplished through “only those powers

that can also be exercised by private citizens,” Nelson,

507 U.S. at 360 (emphasis added) (quoting Weltover,

Inc., 504 U.S. at 614), nor through “strictly commercial

acts,” Helmerich, 137 S. Ct. at 1320 (emphasis added)

(quoting Verlinden, 461 U.S. at 487), it cannot lead to

jurisdiction under the commercial activity exception.

The Second Circuit’s decision here departs from this

Court’s guidance by according the FSIA’s commercial

activity exception a sweepingly broad scope. Under the

Second Circuit’s logic, any sovereign act (like expropriation) that is alleged to occur in a commercial setting

or that has commercial consequences (like the takeover of the state-owned energy company at issue here)

can satisfy the exception to immunity for commercial

activity. It is difficult to envision situations in which a

sovereign could expropriate a commercial enterprise

and not engage in subsequent “commercial activity.”

Thus, in the increasingly common scenario where commercial and sovereign activities are intertwined, an

artfully pleaded complaint could evade immunity,

flouting this Court’s decisions to the contrary. See

OBB Personenverkehr AG v. Sachs, 136 S. Ct. 390,

396–97 (2015) (cautioning against “allow[ing] plaintiffs to evade the [FSIA’s] restrictions through artful

pleading”); see also TRW Inc. v. Andrews, 534 U.S. 19,

28 (2001) (“Where Congress explicitly enumerates cer-

11

tain exceptions to a general prohibition, additional exceptions are not to be implied, in the absence of evidence of a contrary legislative intent.”).

The Second Circuit’s expansive view of the commercial activity exception is particularly hard to square

with this Court’s interpretation of FSIA’s existing exception for expropriation claims. See 28 U.S.C.

§ 1605(a)(3). In Helmerich, the Court emphasized that

the expropriation exception is narrow: it “grants jurisdiction only where there is a valid claim that ‘property’

has been ‘taken in violation of international law.’” 137

S. Ct. at 1318 (emphasis added) (quoting 28 U.S.C.

§ 1605(a)(3)); see also de Sanchez v. Banco Cent. de

Nicar., 770 F.2d 1385,1395 (5th Cir. 1985) (“In applying Section 1605(a)(3), our inquiry is narrowly circumscribed.”); H.R. Rep. No. 94-1487, at 19 (1976), reprinted in 1976 U.S.C.C.A.N. 6604, 6618 (expropriation exception is limited to “two categories of cases . . .

where ‘rights in property taken in violation of international law are in issue’”).

Given the narrow scope of the expropriation exception, it would make no sense for a plaintiff who could

not meet it to nonetheless obtain jurisdiction by recasting her claims as “commercial.” Indeed, the D.C. Circuit has observed that if this interpretation of the exception were the law, “almost any subsequent disposition of expropriated property could allow the sovereign

to be haled into a federal court under [the] FSIA.” Rong

v. Liaoning Province Gov’t, 452 F.3d 883, 890 (D.C. Cir.

2006). But that sort of nullification of the expropriation exception is just what the Second Circuit’s decision permits. Congress could not have intended, and

this Court’s decisions preclude, such an absurd result.

Cf. Brief for the United States as Amicus Curiae at 13,

Helmerich, 183 S. Ct. 1312 (No. 15-423), 2016 WL

2997494 (“[T]he court of appeals’ [decision] effectively

12

nullifies the expropriation exception’s requirements.

Congress would not have anticipated that foreign

states would be subject to the burdens of suit for expropriation claims in every case in which the plaintiff

makes merely a non-frivolous assertion that the state’s

conduct [was also commercial in nature].”).

2. The Second Circuit’s decision also deepens a conflict with the D.C. Circuit, which holds that the commercial activity exception does not apply to suits based

upon actions that directly “flow from” a sovereign act

such as expropriation. Rong, 452 F.3d at 889. In Rong,

that court’s most recent and clearest articulation of

this rule, a Chinese province took a controlling interest

in a Hong Kong corporation by deeming the shares to

be “state assets,” replacing the board, and arranging

for a below-market purchase of the corporation by a

new, state-owned company. Id. at 885–87. The D.C.

Circuit held that, even though the province’s methods

for taking over the company “seem[ed] commercial,”

“all of these acts flow[ed] from the [Province’s] ‘state

assets’ declaration—an act that can be taken only by a

sovereign,” and thus, “did not transform the Province’s

expropriation into commercial activity.” Id. at 889–90.

Because the province did not take over the company in

the way that “a private party would”—rather, it “declared [them] to be state assets and claimed them as

does a sovereign”—the province did not act as “[a] private party in the market.” Id. at 890. Instead, it acted

as a sovereign, and remained immune from suit. Id.4

4 Rong is consistent with a long line of earlier decisions from

the D.C. Circuit. E.g., Jungquist v. Sheikh Sultan Bin Khalifa Al

Nahyan, 115 F.3d 1020, 1030 (D.C. Cir. 1997) (“[T]he fact that . . .

actions may relate in certain respects to commercial activity does

not provide a basis for jurisdiction under [the commercial activity

exception].”); Millen Indus., Inc. v. Coordination Council for N.

13

Here, it is not disputed that Argentina’s alleged

breach flows directly from its expropriation. Had this

case arisen in the D.C. Circuit, there is no question

that petitioners would have been immune from suit.

See Rong, 452 F.3d at 890.

This Court’s resolution of that split on a topic of such

extraordinary international importance is therefore

necessary. See Verlinden, 461 U.S. at 489 (observing

need for “a uniform body of law” regarding immunity

“[i]n view of the potential sensitivity of actions against

foreign states” (alteration in original) (quoting H.R.

Rep. No. 94-1487, at 32)). Foreign sovereigns are entitled to know the scope of the FSIA, and to be assured

that they cannot be subject to the jurisdiction of U.S.

courts at the behest of plaintiffs who engage in judicial

forum-shopping and artful pleading to evade the Act’s

carefully delineated limitations.

Am. Affairs, 855 F.2d 879, 885 (D.C. Cir. 1988) (“Even if a transaction is partly commercial, jurisdiction will not obtain if the

cause of action is based on a sovereign activity.”).

14

CONCLUSION

For these reasons, the petition for a writ of certiorari

should be granted.

Respectfully submitted,

EAMON P. JOYCE

SIDLEY AUSTIN LLP

787 Seventh Avenue

New York, NY 10019

(212) 839-5300

JOSEPH R. GUERRA *

SIDLEY AUSTIN LLP

1501 K Street, N.W.

Washington, D.C. 20005

(202) 736-8000

jguerra@sidley.com

COLLIN P. WEDEL

SIDLEY AUSTIN LLP

555 West Fifth Street

Los Angeles, CA 90013

(213) 896-6000

Counsel for Amicus Curiae

December 3, 2018

* Counsel of Record