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

No. 18-575 & No. 18-581

IN THE

Supreme Court of the Anited States

ARGENTINE REPUBLIC,

Petitioner,

v.

PETERSEN ENERGIA INVERSORA S.A.U. AND

PETERSEN ENERGIA, 8.A.U.,

Respondents.

YPF'S.A.,

Petitioner,

v.

PETERSEN ENERGIA INVERSORA S.A.U. AND

PETERSEN ENERGIA, $.A.U.,

Respondents.

ON PETITIONS FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS FOR

THE SECOND CIRCUIT

BRIEF OF THE REPUBLIC OF CHILE AS

AMICUS CURIAE IN SUPPORT OF

PETITIONERS

ANDREW Z. SCHWARTZ PAUL S. REICHLER

ANDREW B. LOEWENSTEIN Counsel of Record

FOLEY HOAG LLP JANIS H. BRENNAN

155 Seaport Boulevard FOLEY HOAG LLP

Boston, MA 02210 1717 K Street, NW

617-832-1000 Washington, DC 20006

202-261-1200

preichle@foleyhoag.com

QUESTION PRESENTED

Whether the “commercial activity” exception to

sovereign immunity in the Foreign Sovereign

Immunities Act, 28 U.S.C. § 1605(a)(2), is applicable

to suits challenging conduct inextricably intertwined

with a sovereign act of expropriation.

INTRODUCTION

ARGUMENT

I.

IT.

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TABLE OF CONTENTS

Congress Intended the FSIA to

Codify International Law on

Sovereign Immunity ...............cccceee

The Court Should Ensure

Consistency with International

ee eeeeerececececeeceseccs

COC C CoCo eee eee eee ET EEE EEE EEE ESET E HELE ESESESEOOS

The FSIA Should Not Be

Interpreted in a Manner at

Variance with International

Departure from International

Standards on Sovereign

Immunity Risks Subjecting

the United States to

Reciprocal Treatment in the

Courts of Other States....... 10

Departure from International

Standards by United States

Courts Can Constitute State

Practice for the

Determination of Customary

International Law.............. 12

III.

IV.

CONCLUSION

- ili -

The Uncertainty in the Law May

Result in Foreign Sovereigns

Receiving Disparate Treatment in

United States Courts... 13

Clarifying the Law Will Reduce the

Temptation to Engage in Forum

SHOPPINg..........ccceeccceeccesecceeeeeeeeeeees 15

-iv -

TABLE OF AUTHORITIES

Cases

Alfred Dunhill of London, Inc. v. Republic of Cuba,

425 U.S. 682 (1976)... cecccccccceeessseeeeeeeeeeees 3,5, 7

Aquamar S.A. v. Del Monte Fresh Produce N.A.,

179 F.3d 1279 (11th Cir. 1999)... eeeeeeeeee 11

Arrest Warrant of 11 April 2000 (Dem. Rep. Congo v.

Belg.), Judgment, 2002 I.C.J. Rep. 3 (Feb. 14).....12

Banco Nacional de Cuba v. Sabbatino,

376 U.S. 398 (1964)... ceccccccssseecceeseeeeeceeeseeeeeees 7

Berizzi Brothers Co. v. S.S. Pesaro,

271 U.S. 562 (1926)... eccccccesseecccceeeeeeeeeeeeeeeeees 4

Bettis v. Islamic Republic of Iran,

315 F.3d 325 (D.C. Cir. 2008)... ceeccceeeeeeeeees 15

Bolivarian Republic of Venez. v. Helmerich & Payne

Intl Drilling Co.,

137 S. Ct. 1812 (2017)... ccccesseceeeceeeeeaeeeeees 4,6

Cabrera-Alvarez v. Gonzalez,

423 F.3d 1006 (9th Cir. 2005) oo... eee eecccceeeeeeeeeees 9

F. Hoffmann-LaRoche Ltd v. Empagran S.A.,

542 U.S. 155 (2004)... eecccccsseeeeeeeeeeeeeeeeens 9, 10

First Natl Bank v. Kaufman,

593 F. Supp. 1189 (N.D. Ala. 1984)... ee 14

Goar v. Compania Peruana de Vapores,

688 F.2d 417 (5th Cir. 1982) wo. eeccccceeee eee ees 14

Guan v. Bi,

2014 U.S. Dist. LEXIS 29961 (N.D. Cal. Mar. 6,

Houston v. Murmansk Shipping Co.,

667 F.2d 1151 (4th Cir. 1982) oo... ccc eeeeeees 14

Jurisdictional Immunities of the State (Ger. v. It.;

Greece Intervening), Judgment, 2012 I.C.J. Rep. 99

CXC) oats ) 5, 12

Ledgerwood v. State of Iran,

617 F. Supp. 311 (D.D.C. 1985)... eens 11

MacLeod v. United States,

229 U.S. 416 (1918). eccccccceceeestsseeeeeeeeeeeaeees 9

Martinez v. Republic of Cuba,

708 F. Supp. 2d 1298 (S.D. Fla. 2010) ........ 14

McKeel v. Islamic Republic of Iran,

722 F.2d 582 (9th Cir. 1988) oe eeeceecceeeeeee eens 6

Morgan Guaranty Trust Co. v. Republic of Palau,

639 F. Supp. 706 (S.D.N.Y. 1986) ....... eee 14

Murray v. Schooner Charming Betsy,

6 U.S. 64 (1804)... ceesceseeceeeeeeeeeseeeeeeeeeeeeeeees 9

Natl City Bank v. Republic of China,

348 U.S. 356 (1955)... eccccccsseeeeeesseeeeeeeaaeeees 11

Permanent Mission of India to the UN v. City of New

York, 551 U.S. 198 (2007)... cceceeeeeessssseeeeeeees 6

Persinger v. Islamic Republic of Iran,

729 F.2d 835 (D.C. Cir. 1984)... eeeeeeeceeeeees 10

Philippines v. Pimentel,

553 U.S. 851 (2008)... eeeccecccccecesessseeeeeeeeeeaeees 4

Radeljak v. DaimlerChrysler Corp.,

A75 Mich. 598 (2006) .......eeccccceseseececeeeeeeeeeeaeeees 15

Republic of Arg. v. Weltover, Inc.,

B04 U.S. GOT ec cccccceccccecseseeeecceeeesaeeeeeeeeeeeesaeees 6

-vi-

Republic of Aus. v. Altmann,

B41 U.S. 677 (2004)... eececceecceeeeeseeseeeeeeeeeeneees 6

Rong v. Liaoning Province Government,

452 F.3d 883 (D.C. Cir. 2006)... eeecccccceeeeeeeeeees 2

Saudi Arabia v. Nelson,

BOT U.S. 849 (1998)... cccccccccesseeeceeeeeeeeeeaeees 2,6

Schooner Exchange v. McFaddon,

11 U.S. 116 (1812). ccc cccssseeeeeceeesesaeeeeeees 4

Scottsdale Ins. Co. v. Tolliver,

636 F.3d 1273 (10th Cir. 2011)... eee 15

Siderman de Blake v. Republic of Argentina,

965 F.2d 699 (9th Cir. 1992) wee cccceceeee eens 3

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

A461 U.S. 480 (19838)... eccccccsseeeceeeseeeeeeeens 13, 14

Williams v. Nat! Gallery of Art,

2017 U.S. Dist. LEXIS 154445

(S.D.N.Y. Sept. 21, 2017)... eeseeeeeeeeeeeeeeeees 9

Williams v. Shipping Corp. of India,

489 F. Supp. 526 (E.D. Va. 1980)... eee 11

Statutes

Foreign Sovereign Immunities Act, 28 U.S.C. §§

1391(f), 1602 ef Seq... .ecccececcccceeccccseeeceeeeeeenees passim

28 U.S.C. § 1891 (D)(1)-(8) oo ee eeeeeeeeeeeeeeeeees 15

28 U.S.C. § 1891 (D(A) oo e ccc eeeeeeceeeeeeeeees 15

28 U.S.C. § 1602... cccccccsseeeeecceeeesaseeeeeeeees 6

28 U.S.C. § 1604... cccccccccccceeseseeceeeaeeeeeeas 7

28 U.S.C. § 1605(a)(2) cc ececcecccceeeseeeeeeeeees 7

Legislative Materials

H.R. REP. NO. 94-1487 (1976) oe eeeeeeeeeees 13, 14

- Vil -

Other Authorities

Brief for United States as Amicus Curiae, Bolivarian

Republic of Venez. v. Helmerich & Payne Intl

Drilling Co., 1878. Ct. 13812 (2017) (No. 15-423),

2016 U.S. S. Ct. Briefs LEXIS 3114... 11

LAWS LIFTING SOVEREIGN IMMUNITY IN SELECTED

COUNTRIES (May 2016),

https://www.loc.gov/law/help/sovereignimmunity/lifting-sovereign-immunity.pdf............ 10

RESTATEMENT (THIRD) OF THE FOREIGN RELATIONS

LAW OF THE UNITED STATES (1987)...............0000 4,12

S. Ct. R. S76. ccccssssssssnennnnneeeceeeeeeeeeeeeeeeeeeeeeeeeeeeeeeees 1

_l-

INTEREST OF AMICUS CURIAE

The Republic of Chile (“Chile”) is a sovereign

State.’ Chile is one of Latin America’s most politically,

economically, and socially stable countries, and it

ranks at the top of Latin American nations in the

leading indicators in all of those areas, including

commitment to the rule of law, democracy, education,

environmental protection, standard of living, absence

of corruption, and human rights. Chile is also a key

foreign relations and economic partner of the United

States. Our two countries routinely cooperate on such

issues as multilateral security and diplomacy,

military exercises and exchanges, international

commerce, and scientific and other academic research.

Since 2004, Chile and the United States have

mutually benefited from a bilateral Free Trade

Agreement, under which consumer and industrial

goods flow between our two countries duty-free.

Chile is concerned that the Second Circuit’s

decision fails to honor the internationally-recognized

distinction between sovereign acts and commercial

acts. It is indisputable that, under international law,

a State exercises powers unique to a sovereign when

it expropriates property and that such conduct is

‘ Counsel of record for all parties received timely notice of amicus

curiae Chile’s intention to file this brief, and all parties have

consented to this filing. Pursuant to Supreme Court Rule 37.6,

amicus curiae Chile affirms that no counsel for a party authored

this brief in whole or in part and that no person other than

amicus curiae and its counsel made a monetary contribution to

its preparation or submission.

_2-

never commercial in character. Under international

law and widespread State practice, a State will be

immune from the jurisdiction of another State’s courts

for expropriatory and other sovereign conduct. The

intertwining of commercial acts with the fundamental

act of expropriation does not change that calculus.

Nor do the commercial consequences of an

expropriation. As a sovereign State dedicated to the

equality of States and adherence to international law,

which includes the international legal standards

governing sovereign immunity, Chile has an

immediate and direct interest in this matter.

INTRODUCTION

This Court has not addressed whether the

commercial activity exception of the Foreign

Sovereign Immunities Act (“FSIA”) applies to a claim

against a foreign sovereign that “consists of both

commercial and sovereign elements.” Saudi Arabia v.

Nelson, 507 U.S. 349, 358 n.4 (1993). Such claims are

being filed, however, and the lower courts are divided

on whether jurisdiction over a foreign sovereign State

may be predicated on the commercial activity

exception when the State has exercised its sovereign

right to expropriate property.

The D.C. Circuit has held that the commercial

activity exception does not apply to a claim based on

seemingly commercial acts that “flow” from an

expropriation. See Rong v. Liaoning Province

Government, 452 F.3d 8838, 889 (D.C. Cir. 2006). On

the other hand, the Ninth Circuit has held that a

claim based on commercial use of previously

expropriated property may be asserted under the

3.

commercial activity exception. Siderman de Blake v.

Republic of Argentina, 965 F.2d 699, 708-9 (9th Cir.

1992).

The Second Circuit has now compounded the

confusion. It has allowed the respondents to proceed

under the commercial activity exception with claims

that challenge allegedly commercial conduct that is

the byproduct of a sovereign expropriation. The

Second Circuit’s artful parsing of these claims cannot

obscure that they arise from conduct that is

inextricably linked to the quintessentially sovereign

act of expropriation.

The varying approaches that the circuits have

taken underscores the need for clarification from this

Court. This is especially so because the “line between

commercial and political acts of a foreign state often

will be difficult to delineate.” Alfred Dunhill of

London, Inc. v. Republic of Cuba, 425 U.S. 682, 715

(1976) (Powell, J., concurring). It is reasonable to

expect that further cases will be presented involving

allegedly commercial conduct that is bound up with or

the inevitable result of a sovereign act. Clear rules

are needed to guide the lower courts in circumstances

where a State undertakes a sovereign act that may

have a commercial component and/or commercial

implications.

_4-

ARGUMENT

I. Congress Intended the FSIA to

Codify International Law on

Sovereign Immunity

Sovereign immunity is a central feature of

international law that “since early in the history of

[the United States]” this Court has “recognized” as

being “premised upon the ‘perfect equality and

absolute independence of sovereigns.” Philippines v.

Pimentel, 553 U.S. 851, 865 (2008) (quoting Schooner

Exchange v. McFaddon, 11 U.S. 116, 187 (1812)).

Consistent with that understanding, “[t]he immunity

of a state from the jurisdiction of the courts of another

state” is universally accepted to be “an undisputed

principle of customary international law.”

RESTATEMENT (THIRD) OF THE FOREIGN RELATIONS

LAW OF THE UNITED STATES, part 4, ch. 5, subch. A,

intro. note, 390 (1987).?

The International Court of Justice — the principal

judicial organ of the United Nations — has explained

that “the rule of State immunity occupies an

2 “Our courts have understood, as international law itself

understands, foreign nation states to be ‘independent sovereign’

entities. To grant those sovereign entities immunity from suit in

our courts both recognizes the ‘absolute independence of every

sovereign authority’ and helps 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 Intl Drilling Co., 1387 8. Ct. 1312,

1319 (2017) (quoting Berizzi Brothers Co. v. S.S. Pesaro, 271 U.S.

562, 575 (1926)).

_5-

important place in international law and

international relations.” Jurisdictional Immunities of

the State (Ger. v. It.; Greece Intervening), Judgment,

2012 I.C.J. Rep. 99, 1 57 (Feb. 3). It “derives from the

principle of sovereign equality of States, which, as

Article 2, paragraph 1, of the Charter of the United

Nations makes clear, is one of the fundamental

principles of the international legal order.” Jd. States

therefore “generally proceed on the basis that there is

a right to immunity under international law, together

with a corresponding obligation on the part of other

States to respect and give effect to that immunity.” Id.

{ 56. Accordingly, “[e]xceptions to the immunity of

the State represent a departure from the principle of

sovereign equality.” Id. ] 57.

The distinction between sovereign and commercial

acts is at the core of the modern approach to sovereign

immunity. This is reflected in the FSIA, which

codifies the restrictive theory of immunity that the

United States formally adopted in 1952, when the

Department of State concluded that customary

international law had come to permit adjudication of

disputes arising from a State’s commercial activities

while preserving immunity for sovereign acts: “the

immunity of the sovereign is recognized with regard

to sovereign or public acts (ure imperii) of a state, but

not with respect to private acts (jure gestionis).”

Alfred Dunhill, 425 U.S. at 711-15, Appendix 2 (Letter

from Jack B. Tate, Acting Legal Adviser, U.S. Dep’t of

State, to Philip B. Perlman, Acting Att’y Gen. (May 19,

1952), reprinted in 26 DEP’T ST BULL. 984-85 (1952)).

This Court has explained that “[i]Jn enacting the

FSIA, Congress intended to codify the restrictive

-6-

theory’s limitation of immunity to sovereign acts.”

Permanent Mission of India to the UN v. City of New

York, 551 U.S. 198, 199 (2007). See also Republic of

Aus. v. Altmann, 541 U.S. 677, 691 (2004); Saudi

Arabia v. Nelson, 507 U.S. 349, 359 (1993) (quoting

Republic of Arg. v. Weltover, Inc., 504 U.S. 607, 612)

(FSIA “largely codifies the so-called ‘restrictive’ theory

of foreign sovereign immunity first endorsed by the

State Department in 1952”).

The motivation for doing so was, in significant

measure, to make the United States’ approach to

immunity consistent with international practice.

Helmerich & Payne, 137 8S. Ct. at 1319 (“The Act for

the most part embodies basic principles of

international law long followed both in the United

States and elsewhere”); Permanent Mission of India,

551 U.S. at 199 (the purpose of the FSIA is

“codification of international law at the time of the

FSIA’s enactment”); McKeel v. Islamic Republic of

Tran, 722 F.2d 582, 587 (9th Cir. 1983) (“Congress

intended that the FSIA would make United States law

on sovereign immunity consistent with international

law”).

Section 1602 of the FSIA reflects Congress’

intention that the laws of the United States should

comport with international legal standards with

respect to commercial activities: “Under international

law, states are not immune from the jurisdiction of

foreign courts insofar as their commercial activities

are concerned...” 28 U.S.C. § 1602. As Alfred Dunhill

explains, “[T]he United States has adopted and

adhered to the policy declining to extend sovereign

immunity to the commercial dealings of foreign

_7-

governments. It has based that policy in part on the

fact that this approach has been accepted by a large

and increasing number of foreign states in the

international community.” 425 U.S. at 701-2.

This intention finds concrete expression in the

relationship between the overarching presumption of

immunity codified in § 1604 of the FSIA and the

limited abrogation of that immunity provided for with

respect to certain commercial activities found in §

1605(a)(2). Congress determined in this respect that

“subjecting foreign governments to the rule of law in

their commercial dealings presents a much smaller

risk of affronting their sovereignty than would an

attempt to pass on the legality of their governmental

acts.” Alfred Dunhill, 425 U.S. at 703-4.

An affront to a foreign sovereign, however,

remains a significant possibility when sovereign and

commercial acts are intertwined in a case. Exercising

jurisdiction in those circumstances would necessarily

bring governmental acts within the court’s purview.

Those acts could and, in the present case, did include

acts that are of particular sensitivity, such as

expropriation. Jd. at 704 n.16 (“some aspects of

international law touch much more sharply on

national nerves than do others”) (quoting Banco

Nacional de Cuba v. Sabbatino, 376 U.S. 398, 428

(1964)). That commercial concerns may also be raised

in such cases does make the need to render judgment

on governmental actions or their consequences any

less a reality.

Indeed, the possible intertwining of sovereign and

commercial acts is not limited to actions that

_8-

implicate an expropriation. It can also arise in other

cases where unwarranted judicial review of a foreign

sovereign’s governmental acts would be equally

sensitive and otherwise beyond the jurisdictional

reach of the courts of the United States. For example,

enactment of environmental laws may constrain the

exercise of contractual rights set out in a concession

agreement entered into between the State and a

private entity for the operation of a mine. A

determination by public health regulators that a

pharmaceutical may not be sold due to adverse sideeffects could affect the performance ofa sales contract

between the manufacturer and a state-owned hospital.

The regulation of chemicals might prevent the

fulfillment of a commercial contract for their sale or

use. Each of these scenarios involves a classic exercise

of sovereign authority that may be inextricably

connected to commercial conduct or have commercial

consequences.

II. The Court Should Ensure

Consistency with International

Law

It is vital that the courts of the United States apply

the exceptions to sovereign immunity correctly and in

conformance with Congress’s expressed intention that

they comport with international law. Certiorari is

warranted where lower court decisions place United

States jurisprudence at variance with such

international standards, as the decision of the Second

Circuit now risks doing.

_9-

A. The FSIA Should Not Be Interpreted

in a Manner at Variance with

International Law

It is presumed that “Congress intend[ed] to

legislate in a manner consistent with international

law.” Cabrera-Alvarez v. Gonzalez, 423 F.3d 1006,

1009 (9th Cir. 2005). Accordingly, acts of Congress

ought not to be interpreted in a manner violative of

international law if any other construction is possible.

Murray v. Schooner Charming Betsy, 6 U.S. 64, 118

(1804). The Court should thus grant certiorari to

ensure that the FSIA is “construed in the light of the

purpose of the Government to act within the

limitation of the principles of international law, the

observance of which is so essential to the peace and

harmony of nations.” MacLeod v. United States, 229

U.S. 416, 434 (1913).

Courts consistently decline to interpret the FSIA

in a manner that would “deviate from the exceptions

to sovereign immunity generally recognized by

international law that Congress sought to codify in

FSIA.” Williams v. Nat Gallery of Art, 2017 U.S. Dist.

LEXIS 154445, at *12 (S.D.N.Y. Sept. 21, 2017).

Indeed, this is mandated by the overarching principle

that a court “ordinarily construes ambiguous statutes

to avoid unreasonable interference with the sovereign

authority of other nations.” F. Hoffmann-LaRoche

Ltd v. Empagran S.A., 542 U.S. 155, 164 (2004). As

this Court has explained, “[t]his rule of statutory

construction cautions courts to assume _ that

legislators take account of the legitimate sovereign

interests of other nations when they write American

laws. It thereby helps the potentially conflicting laws

-10-

of different nations work together in harmony — a

harmony particularly needed in today’s highly

interdependent commercial world.” Jd. at 164-65.

B. Departure from International

Standards on Sovereign Immunity

Risks Subjecting the United States to

Reciprocal Treatment in the Courts of

Other States

Beyond being inconsistent with Congress’

intention to place the United States in conformity

with international law and practice, deviation from

those standards by the United States carries

significant risk. “[Slome foreign states base their

sovereign immunity decisions on_ reciprocity.”

Persinger v. Islamic Republic of Iran, 729 F.2d 835,

841 (D.C. Cir. 1984) (declining to construe the FSIA in

a manner that bears “potential for international

discord and for foreign government retaliation”).

For example, in the Russian Federation,

reciprocity “is declared as a main principle under

which Russian courts will consider the limits to

jurisdictional immunity of a foreign state in relation

to the degree of immunity the Russian Federation

enjoys in that foreign state. The immunity of a foreign

state can be limited in Russia if the foreign state

limits Russian jurisdictional immunity.” LAWS

LIFTING SOVEREIGN IMMUNITY IN SELECTED

COUNTRIES 12 (May 2016).

The Court has thus long recognized that the

United States’ adherence to international norms

regarding sovereign immunity rests in part on

-11-

understandable considerations of reciprocal selfinterest. Natl City Bank v. Republic of China, 348

U.S. 356, 362 (1955). Insofar as United States courts

may permit the exercise of jurisdiction against a

foreign sovereign where, as in the present case, a

sovereign act is inextricably linked to commercial

activity, courts in other States might reciprocally

allow jurisdiction to be exercised against the United

States.

In light of that concern, the Court's FSIA

jurisprudence has paid due regard to the warning of

the Solicitor General and the Department of State

that applying the FSIA’s exceptions to immunity in an

overly-expansive manner risks leading other

countries “to 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.” Helmerich & Payne, 137 S. Ct. at 1322

(quoting Brief for United States as Amicus Curiae at

21-22, Bolivarian Republic of Venez. v. Helmerich &

Payne Intl Drilling Co., 187 S. Ct. 13812 (2017) (No.

15-423), 2016 U.S. S. Ct. Briefs LEXIS 3114, at *38).

See also Aquamar S.A. v. Del Monte Fresh Produce

N.A., 179 F.3d 1279, 1295 (11th Cir. 1999) (the FSIA’s

purposes include according foreign sovereigns

treatment similar to treatment the United States

prefers to receive in foreign courts); Ledgerwood v.

State of Iran, 617 F. Supp. 311, 314 (D.D.C. 1985)

(removing sovereign immunity risks “foreign

government retaliation”); Williams v. Shipping Corp.

of India, 489 F. Supp. 526, 528 (E.D. Va. 1980) (“In

effect, a foreign nation is being accorded... the type of

-12-

reciprocal immunity we would like to be accorded in a

foreign court.”).

C. Departure from International

Standards by United States Courts

Can Constitute State Practice for the

Determination of Customary

International Law

Obtaining this Court's guidance on_ the

requirements of the FSIA in the context of this hybrid

case is also important because of the potential

implications of the Second Circuit decision for

customary international law. That body of law is

formed where state practice is combined with opinio

juris (i.e., a sense of legal obligation). See

RESTATEMENT (THIRD) OF THE FOREIGN RELATIONS

LAW OF THE UNITED STATES § 102(2) (1987)

(“Customary international law results from a general

and consistent practice of states followed by them

from a sense of legal obligation.”).

With respect to sovereign immunity, determining

whether there is sufficient state practice relies

principally on judicial decisions that interpret

immunity laws. For example, the International Court

of Justice observed that “State practice of particular

significance is to be found in the judgments of national

courts faced with the question of whether a foreign

State is immune...” Ger. v. It., 2012 I.C.J. at J 55.

That Court thus scrutinized the jurisprudence of

numerous national courts, including the case law of

United States courts applying the FSIA. See id. {]

72-77. See also Arrest Warrant of 11 April 2000 (Dem.

Rep. Congo v. Belg.), Judgment, 2002 I.C.J. Rep. 3

-13-

(Feb. 14), J 58 (examining case law of national courts

in determining customary international law

concerning immunity from criminal jurisdiction).

By exercising jurisdiction over an action where

sovereign and commercial acts are linked, the Second

Circuit decision may be construed as reflective of the

state practice of the United States. This risks

contributing to the creation of a new norm of

customary international law in respect of sovereign

immunity. That should only be done with the

imprimatur of this Court.

III. The Uncertainty in the Law May

Result in Foreign Sovereigns

Receiving Disparate Treatment in

United States Courts

Resolving the uncertainty in the existing case law

is also necessary to give effect to Congress’ desire to

prevent “disparate treatment of cases involving

foreign governments.” H.R. REP. No. 94-1487, at 13

(1976) (report accompanying FSIA). Given that

“lalctions against foreign sovereigns... raise sensitive

issues concerning the foreign relations of the United

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

U.S. 480, 493 (1983), providing foreign sovereigns

different treatment in actions before United States

courts can have “adverse foreign relations

consequences.” H.R. REP. No. 94-1487, at 13. This is

particularly so where the different treatment

concerns outcome-determinative rules governing

jurisdiction.

_14-

To prevent that from occurring, “Congress

exercised its Art. I powers by enacting a statute

comprehensively regulating the amenability of foreign

nations to suit in the United States.” Verlinden, 461

U.S. at 498. The statute sought “to clarify” the

circumstances in which jurisdiction could be exercised

over foreign sovereigns by enacting a “comprehensive

set of legal standards governing claims of immunity in

every civil action against a foreign state or its political

subdivisions, agencies, or instrumentalities.” Jd. at

488. The House Report is unambiguous that this was

done so the FSIA could achieve “uniformity in

decision.” H.R. REP. No. 94-1487, at 13.

That congressional desire is widely recognized in

the case law. See, e.g., Houston v. Murmansk

Shipping Co., 667 F.2d 1151, 1154 (4th Cir. 1982)

(Congress intended “to foster a uniformity of decisions

in cases under the FSIA”); Goar v. Compania Peruana

de Vapores, 688 F.2d 417, 428 (5th Cir. 1982)

(“Congress has expressed a strong policy favoring

uniformity of decision in cases involving foreign

sovereigns...”); Guan v. Bi, 2014 U.S. Dist. LEXIS

29961, at *19 (N.D. Cal. Mar. 6, 2014) (FSIA enacted

“to create a uniform set of standards for making

foreign immunity determinations”) (citing Martinez v.

Republic of Cuba, 708 F. Supp. 2d 1298, 1301 (S.D.

Fla. 2010)); Morgan Guaranty Trust Co. v. Republic of

Palau, 639 F. Supp. 706, 716 (S.D.N.Y. 1986) (FSIA

intended to ensure uniformity of decisions in interest

of foreign relations); First Natl Bank v. Kaufman, 593

F. Supp. 1189, 1192 (N.D. Ala. 1984) (referring to

FSIA’s “overriding goal of uniform treatment of

foreign states in federal court litigation”).

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The varying approaches taken by the circuit courts

undermine the objective of achieving uniformity of

decision. That the uncertainty involves a critical and

oft-litigated provision of the FSIA makes _ its

resolution all the more urgent.

IV. Clarifying the Law Will Reduce the

Temptation to Engage in Forum

Shopping

In addition to providing this Court with an

opportunity to offer much needed guidance on an

important and recurring issue, granting the petitions

and clarifying the law would have the salutary effect

of removing incentives to forum shop, tolerance for

which conflicts with “basic notions of comity and

respect for foreign sovereignty.” Radeljak ov.

DaimlerChrysler Corp., 475 Mich. 598, 625 (2006)

(Markman, J., concurring). See also Scottsdale Ins. Co.

v. Tolliver, 686 F.3d 1273, 1277 (10th Cir. 2011)

(preferring rules that “discourage|[] forum shopping”).

Under 28 U.S.C. § 13891(f)(4), the District Court for

the District of Columbia is the “dedicated venue for

actions against foreign states.” Bettis v. Islamic

Republic of Iran, 315 F.3d 325, 332 (D.C. Cir.

2003). But plaintiffs may seek to establish venue in

other districts under § 1891(f)(1)-(3) in actions

invoking the commercial activity exception. As things

now stand, in cases involving some combination of

sovereign and commercial conduct, plaintiffs wishing

to sue foreign states under the commercial activity

exception may to try to avoid the District Court for the

District of Columbia and establish venue instead in a

District Court within the Second Circuit. Bringing

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uniformity to the law would level the playing field and

deter procedural ploys.

CONCLUSION

The Court should grant certiorari to resolve the

conflict that has arisen in the interpretation of the

commercial activity exception to sovereign immunity.

Respectfully submitted,

ANDREW Z. SCHWARTZ PAULS. REICHLER

ANDREW B. LOEWENSTEIN — Counsel of Record

FOLEY HoAG LLP JANIS H. BRENNAN

155 Seaport Boulevard FOLEY HoAG LLP

Boston, MA 02210 1717 K Street, NW

617-832-1000 Washington, DC 20006

202-261-1200

preichle@foleyhoag.com

December 38, 2018