Petition for Writ of Certiorari — Petrobras America, Incorporated, Petitioner v. Samsung Heavy Industries Company, Limited

Supreme Court briefDec 5, 2024

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No. ______

In the Supreme Court of the United States

____________

PETROBRAS AMERICA, INCORPORATED,

Petitioner,

SAMSUNG HEAVY INDUSTRIES COMPANY, LIMITED,

Respondent.

____________

On Petition for Writ of Certiorari to the United States

Court of Appeals for the Fifth Circuit

___________

PETITION FOR A WRIT OF CERTIORARI

___________

Jonathan J. Walsh

Counsel of Record

Robert B. Garcia

Felix Gilman

Grace Condro

Sylvi Sareva

CURTIS, MALLET-PREVOST,

COLT & MOSLE LLP

101 Park Avenue

New York, NY 10178

(212) 696-8817

jwalsh@curtis.com

Counsel for Petitioner

QUESTIONS PRESENTED

The

Racketeer

Influenced

and

Corrupt

Organizations Act (RICO), 18 U.S.C. §§ 1962 et seq.,

creates a civil action for “[a]ny person injured in his

business or property by reason of” its predicate

offenses. 18 U.S.C. § 1964(c). This Court has

interpreted “by reason of” to require “some direct

relation between the injury asserted and the injurious

conduct alleged.” Bridge v. Phx. Bond & Indem. Co.,

553 U.S. 639, 654 (2008). The questions presented are:

1. What is the appropriate standard for assessing

a direct relation between the injury asserted and the

injurious conduct alleged under RICO?

2. Can proximate cause under RICO be

established when the defendant’s RICO violation

harms a plaintiff who is not the specific target of the

underlying criminal act?

RULE 29.6 DISCLOSURE STATEMENT

Petitioner Petrobras America, Inc. is a wholly

owned subsidiary of Petrobras International

Braspetro BV, which is a wholly owned subsidiary of

Petróleo Brasileiro S.A. Petróleo Brasileiro S.A. is the

state oil company of Brazil. No publicly held company

owns 10 percent or more of the stock of Petrobras

America, Inc.

iii

RELATED PROCEEDINGS

Other than the direct appeal that forms the basis

for this Petition, there are no related proceedings for

purposes of S. CT. R. 14.1(b)(iii).

TABLE OF CONTENTS

Page

QUESTIONS PRESENTED .................................. i

RULE 29.6 DISCLOSURE STATEMENT ........... ii

RELATED PROCEEDINGS................................iii

PETITION FOR A WRIT OF CERTIORARI ....... 1

INTRODUCTION ................................................. 1

OPINIONS BELOW ............................................. 2

JURISDICTION OF THIS COURT ..................... 2

RELEVANT CONSTITUTIONAL AND

STATUTORY PROVISIONS ................................ 2

STATEMENT ........................................................ 3

Factual Background ..................................... 4

Proceedings Below ........................................ 6

REASONS FOR GRANTING THE PETITION ... 8

I. The Fifth Circuit has created a circuit split on

the extraordinarily important question of

when a plaintiff’s injuries are “directly

related” to a RICO violation ............................ 9

The Circuits are divided over how a “direct

relation” between a plaintiff’s injuries and a

defendant’s conduct may be established

under RICO ................................................... 9

The Circuits are divided on whether a

plaintiff must be the specific target of the

RICO violation ............................................ 16

II. This Case Presents an Ideal Vehicle for

Review ............................................................ 19

CONCLUSION.................................................... 21

TABLE OF AUTHORITIES

Page

Cases

Albert v. Glob. Tel*Link Corp.,

68 F.4th 906 (4th Cir. 2023) ................................. 12

Alix v. McKinsey & Co.,

23 F.4th 196 (2d Cir. 2022) ................................... 17

Allegheny Gen. Hosp. v. Philip Morris,

228 F.3d 429 (3d Cir. 2000)................................... 12

Anza v. Ideal Steel Supply Corp.,

547 U.S. 451 (2006) ......................................... 11, 13

Bridge v. Phx. Bond & Indem. Co.,

553 U.S. 639 (2008) ................................... 16, 17, 18

Commer. Cleaning Servs. v. Colin Serv. Sys.,

271 F.3d 374 (2d Cir. 2001)................................... 11

CSX Transp., Inc. v. McBride,

564 U.S. 685 (2011) ............................................... 14

Grow Mich., LLC v. LT Lender, LLC,

50 F.4th 587 (6th Cir. 2022) ................................. 12

Hamm v. Rhone-Poulenc Rorer Pharms.,

187 F.3d 941 (8th Cir. 1999) ................................. 12

Hemi Grp., LLC v. City of N.Y.,

559 U.S. 1 (2010) ................................................... 11

vii

Holmes v. Sec. Inv. Prot. Corp.,

503 U.S. 258 (1992) ......... 8, 9, 10, 11, 12, 13, 14, 15

In re Neurontin Mktg. & Sales Practices Litig.,

712 F.3d 21 (1st Cir. 2013) ................................... 11

Mendelovitz v. Vosicky,

40 F.3d 182 (7th Cir. 1994) ................................... 12

Mendoza v. Zirkle Fruit Co.,

301 F.3d 1163 (9th Cir. 2002) ............................... 12

Pac. Operators Offshore, LLP v. Valladolid,

565 U.S. 207 (2012) ............................................... 10

Safe Sts. All. v. Hickenlooper,

859 F.3d 865 (10th Cir. 2017) ............................... 13

Torres v. S.G.E. Mgmt.,

838 F.3d 629 (5th Cir. 2016) ................................. 13

Williams v. Mohawk Indus.,

465 F.3d 1277 (11th Cir. 2006) ............................. 12

Statutes

18 U.S.C. §§ 1962 et seq. ............. 1-3, 6-9, 11-14, 16-19

28 U.S.C. § 1254(1) ..................................................... 2

Other Authorities

W. KEETON ET AL., PROSSER AND KEETON ON

LAW OF TORTS § 41 (5th ed. 1984) ......................... 15

PETITION FOR A WRIT OF CERTIORARI

Petrobras America, Inc. respectfully petitions for a

writ of certiorari to review the judgment of the United

States Court of Appeals for the Fifth Circuit.

INTRODUCTION

As the decision below recognizes, Samsung

engaged in a massive bribery scheme targeted at the

Petrobras group of companies, which caused hundreds

of millions of dollars in damages to petitioner

Petrobras America. The only contested question is

whether, under RICO, Petrobras America’s injury had

some direct relation to Samsung’s bribery scheme.

The objective of Samsung’s bribery scheme was to

obtain business with the Petrobras group for

Samsung’s benefit. Petrobras America was the only

entity within the Petrobras group to suffer an injury

as a result of the scheme. But because that injury

flowed through a single intra-company assignment

from a Petrobras holding company, the Fifth Circuit

ratified the district court’s conclusion that it was too

attenuated from Samsung’s bribery scheme to satisfy

proximate cause.

The Fifth Circuit’s imposition of a bright-line rule,

under which a routine intra-company assignment

within a group of companies is sufficient to break the

causal chain, defies this Court’s case law, and conflicts

with precedent from every other circuit, each of which

has taken a nuanced approach to the “directness”

requirement. The Fifth Circuit’s rule also leads, as it

did in this case, to perverse conclusions that ignore

reality and create substantial business risk for all

multinational companies operating on an integrated

basis. This Court’s review is therefore warranted.

OPINIONS BELOW

The Fifth Circuit’s opinion is unpublished but is

available at Petrobras Am., Inc. v. Samsung Heavy

Indus. Co., Ltd., No. 23-20448, 2024 U.S. App. LEXIS

19852 (5th Cir. Aug. 7, 2024), and reprinted in the

Appendix (App.) at 1a. The underlying decision of the

United States District Court for the Southern District

of Texas is available at Petrobras Am., Inc. v.

Samsung Heavy Indus., Co., No. H-19-1410, 2023 U.S.

Dist. LEXIS 140180 (S.D. Tex. Aug. 11, 2023), and

reprinted in the Appendix at 2a-49a.

JURISDICTION OF THIS COURT

The Fifth Circuit issued its opinion and entered

judgment in this case on August 7, 2024. The Fifth

Circuit accepted Petrobras America’s petition for

rehearing as filed on August 21, 2024, and denied

rehearing on September 6, 2024. This Court has

jurisdiction under 28 U.S.C. § 1254(1).

RELEVANT CONSTITUTIONAL

AND STATUTORY PROVISIONS

This case involves the provisions of the Racketeer

Influenced and Corrupt Organizations Act (“RICO”),

18 U.S.C. §§ 1962 et seq. The relevant portions of

these provisions are reproduced in the Appendix.

STATEMENT

The facts giving rise to this case may seem

complicated in their particulars but they are simple in

their substance. Starting in 2006, Samsung began

targeting Petrobras executives as part of a massive

$1.6 billion bribery scheme. The purpose of these

bribes was to induce Petrobras executives into

contracting for the construction of ultra-deepwater

drillships for use by its operating subsidiaries within

the Petrobras group of companies.

The Petrobras entity that signed the contract for

one of the drillships, Petrobras International

Braspetro BV (Braspetro), assigned its contractual

obligations to its wholly owned U.S. subsidiary,

Petrobras America. It did so because Braspetro was

merely a holding company and Petrobras America was

the operating subsidiary best positioned to absorb and

otherwise mitigate the losses associated with such a

large piece of unnecessary capital equipment. The

result was that Petrobras America suffered hundreds

of millions of dollars in damages.

Petrobras America sued Samsung in the Southern

District of Texas under RICO. Though it

demonstrated all the statutory elements of a RICO

claim, the district court dismissed on the ground that

the assignment of the drillship contract to Petrobras

America severed the “direct” relation between

Samsung’s racketeering activity and Petrobras

America’s economic losses. The Fifth Circuit, for its

part, summarily affirmed.

Factual Background

Samsung’s racketeering scheme began in 2006,

when it began paying bribes disguised as

“commissions” to two rogue Petrobras officials to

secure contracts for the construction of two ultradeepwater drillships for entities within the Petrobras

group. App. 10a-11a.

In June 2007, as part of its racketeering

enterprise, Samsung entered into an option

agreement with a third party, Pride Global Ltd.

(Pride), which gave Pride the option to purchase a

drillship from Samsung, known as the DS-5. App. 11a.

Because Samsung understood that Pride would not

exercise its option under the agreement unless Pride

had first obtained a charter agreement with an entity

within the Petrobras group, Samsung paid an

additional $20 million in bribes disguised as

“commissions” to the same Petrobras officials, as an

inducement to approve the DS-5 transaction. App.

11a.

In December 2007, Petrobras and Pride entered

into an agreement setting forth the primary terms

pursuant to which a Petrobras entity would enter into

a drilling services contract with Pride (the “DSC”).

App. 12a. In January 2008, Petrobras executed the

DSC through its wholly owned subsidiary, Braspetro.

App. 13a. The DSC bound Braspetro to pay Pride over

$400,000 per day for the use of the DS-5 during a fiveyear term, a liability of almost $800 million. App.3a.

The same rate applied whether the drillship was

operational or “on standby” (i.e., whether there was

work for the ship or not). App. 14a.

As an international holding company, Braspetro

does not engage directly in drilling operations.

Following Petrobras’ guidance, Braspetro oversees the

activities of its operating subsidiaries, such as

Petrobras America. App. 32a-33a. Thus, the DS-5

contract expressly contemplated that Braspetro would

assign the contract to an operating subsidiary. App.

12a-13a.

No entity within the Petrobras group had any need

for the DS-5—either at the time the DSC was

executed, or upon the completion of construction five

years later in 2011. App. 30a. Braspetro was

nevertheless bound to make payments under the

charter agreement for five years. To mitigate its

losses, it evaluated which of its subsidiaries could

make some use of the drillship. Since there was some

limited drilling work to do in the Gulf of Mexico,

Braspetro assigned the contract to Petrobras America,

the operating subsidiary responsible for Petrobras’

drilling operations in North American waters.

Petrobras America was only able to use the DS-5

for a few years before work ran out. While Petrobras

America attempted to mitigate its losses by assigning

the drillship to third parties, ultimately it was unable

to assign the contract again and had to put the

drillship on permanent standby, incurring hundreds

of millions in monthly standby fees. App. 13a-14a.

Samsung’s bribery scheme came to light in 2015,

by which point Petrobras America had already lost

hundreds of millions of dollars under the DS-5

contract. After Brazilian authorities informed

Petrobras of Pride’s role in Samsung’s racketeering

conspiracy, Braspetro and Petrobras America sent a

letter to Pride officially terminating the DSC. App.

16a-18a.

Both the United States Department of Justice and

the Brazilian authorities conducted investigations

into Samsung’s bribery scheme. In each investigation,

Samsung admitted that it had bribed Petrobras

officials for its own benefit.

Proceedings Below

On March 5, 2019, Petrobras America filed a

complaint against Samsung in Texas state court

asserting claims under RICO. Samsung removed the

case to the Southern District of Texas, and Petrobras

America filed an Amended Complaint on September

13, 2019.

On February 24, 2023, the parties cross-moved for

summary judgment. While Samsung did not dispute

bribing the two Petrobras officials, it sought summary

judgment in its favor on the RICO claim for lack of

standing and proximate cause, among other grounds.

On August 11, 2023, the district court, inter alia,

denied Petrobras America’s motion for summary

judgment and granted Samsung’s cross-motion for

summary judgment against Petrobras America’s

RICO claim. The district court found that “Samsung

bribed Petrobras officials to ensure that Braspetro

executed the [DS-5 contract],” resulting in Braspetro

being saddled with an “unnecessary contract.” App.

34a (cleaned up). The district court therefore found

that Braspetro would have suffered an injury that

“directly flowed from Samsung’s conduct” if it had

made payments under that “tainted” contract. App.

30a.

The district court further found that Petrobras

America was the only entity to make payments under

the DS-5 contract, and therefore the only entity to

suffer an economic injury. It therefore concluded that

Petrobras America had standing to bring the RICO

claims because it had been injured “by reason of”

Samsung’s conduct in bribing Petrobras officials to

procure a charter for a drillship no entity within

Petrobras needed. App. 23a-24a. The court also found

that Samsung’s bribery was a but-for cause of

Petrobras America’s injury. App. 34a. Nevertheless,

the court concluded that Petrobras America’s injuries

did not directly flow from Samsung’s bribery of

Petrobras executives, but rather that its “injuries

occurred because Petrobras America had to assume

Braspetro’s obligations under the Contract,” and not

because of “Samsung’s payment of bribes to Petrobras

officials to secure the contract.” App. 30a. According to

the district court, the intra-company assignment

alone precluded a finding of proximate cause under

RICO. App. 30a-33a.

On August 7, 2024, a three-judge Fifth Circuit

panel issued a per curiam affirmance stating that it

“affirm[ed] essentially for the reasons stated in the

district court’s opinion.” App. 1a. The Fifth Circuit

accepted Petrobras America’s petition for rehearing as

filed on August 21, 2024, and denied rehearing on

September 6, 2024.

REASONS FOR GRANTING THE PETITION

The Fifth Circuit’s decision conflicts with this

Court’s precedent and creates a circuit split as to the

applicable standard for establishing proximate cause

in RICO cases. The “by reason of” language in RICO

requires some “direct relation” between the plaintiff’s

injury and the defendant’s conduct. Both this Court

and every circuit court to consider proximate cause

under RICO has evaluated the concept of “directness”

through the lens of the practical considerations

underlying the requirement originally set forth by this

Court in Holmes v. Sec. Inv. Prot. Corp., 503 U.S. 258

(1992).

Here, the Fifth Circuit refused to consider those

factors and imposed a bright-line rule whereby a

routine intra-company assignment from a holding

company to its subsidiary automatically renders the

subsidiary’s injury “indirect,” even if that same injury

would have been “direct” if suffered by the holding

company.

The Fifth Circuit’s imposition of a bright-line rule

creates two circuit splits. First, the Fifth Circuit’s

mechanical approach directly conflicts with the

nuanced approach employed by every other circuit to

evaluate proximate cause under RICO, each of which

have looked to the policy considerations underlying

the directness requirement. Second, by treating the

assignment as dispositive, the Fifth Circuit

introduced a new requirement into the RICO

proximate cause analysis, namely, that the RICO

victim must be the specific target of the conduct

constituting the RICO violation.

This case presents an ideal vehicle to address the

appropriate standard for proximate cause in RICO

cases, since the decision below has far-reaching

consequences for corporations that are targeted by

racketeering enterprises. Indeed, the imposition of a

bright-line rule ignores how modern multinational

companies operate.

The Fifth Circuit has created a circuit

split on the extraordinarily important

question of when a plaintiff’s injuries are

“directly related” to a RICO violation

A. The Circuits are divided over how a

“direct relation” between a plaintiff’s

injuries and a defendant’s conduct may

be established under RICO

1. In Holmes, this Court held that RICO’s “by

reason of” language requires a plaintiff to establish

both “but for” and “proximate cause.” The Court

explained that it was using the term “proximate

cause” to “label generically the judicial tools used to

limit a person’s responsibility for the consequences of

that person’s own acts.” Holmes, 503 U.S. at 268. “At

bottom, the notion of proximate cause reflects ideas of

what justice demands, or of what is administratively

possible and convenient.” Id. Because proximate cause

seeks to “limit a person’s responsibility for the

consequences of that person’s own acts” in a fair

manner that reflects the realities of enforcement,

proximate cause requires “some direct relation

between the injury asserted and the injurious conduct

alleged.” Id.

The Court identified three key considerations

underlying this “directness” requirement. First,

allowing recovery for indirect injuries would make it

“difficult . . . to ascertain the amount of a plaintiff’s

damages attributable to the violation, as distinct from

other, independent factors.” Id. at 269. Second,

indirect injuries could “force courts to adopt

complicated rules . . . to obviate the risk of multiple

recoveries.” Id. Third, there is no societal interest in

deterrence that would justify claims by indirectly

injured victims, since “directly injured victims can

generally be counted on to vindicate the law as private

attorneys general, without any of the problems

attendant upon suits by plaintiffs injured more

remotely.” Id. These factors all serve the general

purpose of a proximate cause requirement, which

“provides a rough guide for courts in cutting off

otherwise endless chains of cause-and-effect.” Pac.

Operators Offshore, LLP v. Valladolid, 565 U.S. 207,

223 (2012) (Scalia, J., concurring).

This Court cautioned that “the infinite variety of

claims that may arise make it virtually impossible to

announce a blackletter rule that will dictate the result

in every case.” Holmes, 503 U.S. at 272 n.20. Thus, it

explained that its use of the term “direct” should “be

understood as a reference to the proximate-cause

inquiry that is informed by the concerns set out in the

text.” Id. In Anza, this Court reaffirmed that the

requirement should be considered in light of its

“motivating principle[s].” Anza v. Ideal Steel Supply

Corp., 547 U.S. 451, 458 (2006) (stating that its

proximate cause conclusion was “confirmed by

considering the directness requirement’s underlying

premises”); see also Hemi Grp., LLC v. City of N.Y.,

559 U.S. 1, 8 (2010) (“[Holmes] set forth the standard

of causation that applies to civil RICO claims.”).

2. Accordingly, circuits have near-uniformly

rejected efforts to advance bright-line or formalistic

rules to determine directness. Rather, circuits have

approached directness with a nuanced approach that

reflects the requirement’s underlying premises.

The First, Second, Third, Ninth, and Eleventh

Circuits, for their part, have all interpreted Holmes as

imposing a three-factor “functional test” to evaluate

the relationship between the defendants’ racketeering

activity and the plaintiffs’ injuries. See In re

Neurontin Mktg. & Sales Practices Litig., 712 F.3d 21,

35-36 (1st Cir. 2013) (“Importantly, the Holmes Court

also provided three functional factors with which to

assess whether proximate cause exists under RICO.

. . . Holmes makes it clear that both the directness

concern and the three functional factors are part of the

proximate cause inquiry.”); Commer. Cleaning Servs.

v. Colin Serv. Sys., 271 F.3d 374, 381 (2d Cir. 2001)

(“[The Supreme Court] expressly warned against

applying a mechanical test detached from policy

considerations. We have accordingly turned to those

policy considerations explained in Holmes to guide

any application of the Court’s direct relation test.”)

(cleaned up); Allegheny Gen. Hosp. v. Philip Morris,

228 F.3d 429, 443 (3d Cir. 2000) (referring to the

Holmes factors as “[t]he formal factors of proximate

cause in RICO”); Mendoza v. Zirkle Fruit Co., 301 F.3d

1163, 1169 (9th Cir. 2002) (“In this circuit, we focus on

three nonexhaustive factors in considering causation,

that is whether the injury is ‘too remote’ to allow

recovery”); Williams v. Mohawk Indus., 465 F.3d

1277, 1288 (11th Cir. 2006) (“In evaluating whether

the requisite causal connection exists, courts should

consider the ‘motivating principles’ behind the

directness component of the proximate-cause

standard in RICO cases.”).

The Fourth, Sixth, Seventh, Eighth and Tenth

Circuits have likewise turned to the Holmes factors as

“guidance” in analyzing proximate cause under RICO.

See Albert v. Glob. Tel*Link Corp., 68 F.4th 906, 912

(4th Cir. 2023) (finding that “[t]he three principles

underlying Holmes’s ‘direct relation’ test further

support our decision”); Grow Mich., LLC v. LT Lender,

LLC, 50 F.4th 587, 594 (6th Cir. 2022) (observing that

directness is required in order to avoid “practical

hurdles” federal courts would otherwise face, and

describing Holmes factors); Mendelovitz v. Vosicky, 40

F.3d 182, 184 (7th Cir. 1994) (observing that the

Holmes factors provide “guidance” as to “directness”

requirement); Hamm v. Rhone-Poulenc Rorer

Pharms., 187 F.3d 941, 952 (8th Cir. 1999) (applying

Holmes factors); Safe Sts. All. v. Hickenlooper, 859

F.3d 865, 889 (10th Cir. 2017) (relying on Holmes and

Anza to “emphasize the distinctions between direct

and indirect injuries,” and considering factors such as

the existence of “complex, external factors”). The Fifth

Circuit itself previously turned to the Holmes factors

in evaluating directness. See Torres v. S.G.E. Mgmt.,

838 F.3d 629, 640 (5th Cir. 2016) (“As in Bridge, there

are no independent factors that account for [the

Plaintiffs’] injury, there is no risk of duplicative

recoveries by plaintiffs removed at different levels of

injury from the violation, and no more immediate

victim is better situated to sue.”) (cleaned up).

3. However they describe their reliance on Holmes,

each Circuit has expressly disavowed bright-line

rules, and required district courts to assess the

relationship between the RICO violation and the

injury pragmatically and on a case-by-case basis. The

Fifth Circuit did the opposite. It expressly set aside

the policy considerations identified in Holmes, and

instead applied a bright-line test that turned on a

single intervening fact: the intra-company assignment

between two Petrobras entities.

Specifically, the Fifth Circuit held that even if each

Holmes factor was satisfied, the assignment of the

contract served as an automatic bar to a finding of

direct harm, dismissing as “immaterial” evidence that

the assignment itself was a direct and inevitable

result of Samsung’s conduct, since Petrobras America

had no choice but to accept the contract. It reasoned

that the assignment, rather than Samsung’s payment

of bribes to Petrobras officials, was the “act causing

the injury.” App. 30a. In other words, the assignment

was the sole factor that rendered Petrobras America’s

injuries “indirect.”

In holding that a routine intra-company

transaction between a holding company and its

operating subsidiary per se breaks the causal chain,

the court below applied precisely the kind of

formalistic, bright-line rule that this Court has

cautioned against.

Doing so created a circuit split. A corporation

seeking to recover damages under RICO where, such

as here,1 all three Holmes factors are satisfied would

unquestionably be able to recover in any other circuit,

but any minor intra-company transactions would

preclude recovery by an otherwise identically situated

corporation in the Fifth Circuit.

4. The Fifth Circuit’s formalistic approach is

wrong. As this Court has held, the term “proximate

cause” is simply “shorthand” for the concept that

“injuries have countless causes, and not all should

give rise to legal liability.” CSX Transp., Inc. v.

McBride, 564 U.S. 685, 692 (2011). Therefore,

proximate cause, whether in the RICO context or

otherwise, operates to rein in potential causes of

action, since “in a philosophical sense, the

1 Each of the Holmes factors is satisfied here.

There is nothing

speculative or uncertain about which portion of Petrobras

America’s losses were caused by Samsung’s bribery, there are

no issues as to the apportionment of damages, since there is

only one injury at issue, and since only Petrobras America

suffered an injury, it is the party most incentivized to bring a

claim against Samsung.

consequences of an act go forward to eternity, and the

causes of an event go back to the dawn of human

events, and beyond.” Holmes, 503 U.S. at 266 n.10

(quoting W. Keeton, D. Dobbs, R. Keeton, & D. Owen,

Prosser and Keeton on Law of Torts § 41, p. 264 (5th

ed. 1984)). Proximate cause prevents a chain of

endless liability.

An intra-company assignment is not the type of

unexpected intervening event that the concept of

proximate cause is designed to protect against. No

speculative leaps in logic are required to connect

Petrobras America’s injuries to Samsung’s bribery

scheme. Indeed, the Fifth Circuit explicitly

acknowledged that had Braspetro been the entity to

make the payments under the charter agreement, its

injuries would have directly flowed from Samsung’s

conduct. App. 30a. But under the Fifth Circuit’s

approach, the ministerial assignment of the contract

from a holding company onto the books of its

subsidiary is sufficient to break an otherwise crystalclear chain of causation between Samsung’s scheme to

defraud and the resulting economic injuries.

Such an approach not only directly contravenes

this Court’s admonition against the application of

bright-line rules, it also fails to serve the interests the

doctrine of proximate cause is designed to protect. The

doctrine of proximate cause is designed to reflect what

justice demands, i.e., limiting liability in a manner

that is both fair and judicially feasible. Precluding a

subsidiary within an international company from

recovering for losses suffered by the company as a

whole and allowing the fraudster to avoid RICO

liability does not further those judicial interests.

The Circuits are divided on whether a

plaintiff must be the specific target of

the RICO violation

1. The Fifth Circuit’s bright-line rule also creates a

circuit split as to whether a plaintiff must be the direct

recipient of a defendant’s RICO violation to establish

proximate cause. By treating the routine intracompany assignment as dispositive, the Fifth Circuit

created a new rule under which the causal chain is

automatically severed unless the underlying criminal

act is specifically targeted at the injured party. Such

a rule conflicts with this Court’s Bridge v. Phx. Bond

& Indem. Co., 553 U.S. 639 (2008).

In Bridge, this Court held that proximate cause

under RICO may be satisfied even if the defendant’s

RICO conduct was targeted at a third party. Bridge

resolved an existing circuit split regarding whether

proximate cause under RICO requires a plaintiff to

establish reliance on a fraudulent representation,

concluding that it does not. The plaintiffs in Bridge

were bidders at a county’s tax-lien auctions, who

brought RICO claims against fellow bidders, alleging

that they had made misrepresentations to the county

that resulted in an undue advantage. Id. at 643-44.

The defendants argued that the plaintiffs could not

establish proximate cause because the fraudulent

misrepresentations had been made to the county, not

directly to the plaintiffs. Id. at 645. This Court

rejected that argument, finding that the plaintiffs had

clearly been injured by the defendants’ scheme.

This Court explained that under RICO, “a direct

victim may recover through RICO whether or not it is

the direct recipient of the false statements”

constituting the fraud. Id. at 646 (emphasis in

original). Thus, the Court concluded that the plaintiffs

had suffered a “direct injury” from the defendants’

conduct. The Second Circuit has applied Bridge to

hold that “the existence of an intervening decisionmaker . . . is not in and of itself dispositive” of

directness. Alix v. McKinsey & Co., 23 F.4th 196, 206

(2d Cir. 2022) (cleaned up) (“direct relation” was

satisfied notwithstanding that misrepresentations

were made to third parties). In other words, it

establishes that a plaintiff need not be the direct

target of the RICO violation in order to establish

proximate cause.

2. The Fifth Circuit’s decision cannot be reconciled

with Bridge or Alix. By concluding that Petrobras

America could not establish proximate cause because

the Petrobras parent, rather than Petrobras America

itself, was the target of Samsung’s fraudulent scheme,

the Fifth Circuit effectively introduced a form over

substance requirement into the directness analysis,

one that no circuit court has ever imposed before.

Under the Fifth Circuit’s rule, had Braspetro itself

paid Pride, its injury would “directly flow” from

Samsung’s bribery scheme. App. 30a. Yet that very

same injury—the same amount, arising out of the

same fraudulent contract—is “indirect” simply

because Petrobras America instead made the

payment. The sole difference is that Petrobras

America was not a signatory to the so-called “tainted”

contract.

3. If Petrobras America is unable to recover simply

because it became a party to the “tainted” contract via

assignment, then proximate cause would be lacking

whenever the injured party is not the specific target of

the RICO violation. Taken even further, any

intervening factor becomes sufficient to break the

causal chain, no matter how ministerial, since only

the act immediately preceding the injury—here, the

assignment—would be deemed the “cause” of the

injury. Extending this sort of blanket rule to the facts

of Bridge, the county’s decision to grant the

defendants tax liens would arguably break the causal

chain simply because it was technically that action

that caused harm to the plaintiffs. That is not the law.

4. The Fifth Circuit’s rule also creates the perverse

result that no entity within the Petrobras group can

now recover against Samsung for the hundreds of

millions of dollars exacted by its RICO enterprise.

Petrobras and Braspetro, while the direct targets of

Samsung’s RICO violation, suffered no economic

injuries. The only injured party is Petrobras America,

and it has now been precluded from recovering by the

Fifth Circuit’s rule. Such a perverse result is not and

should not be the law.

II.

This Case Presents an Ideal Vehicle for

Review

This case presents an ideal vehicle for review

because it presents an important issue starkly: is an

intra-company assignment alone sufficient to break

the causal chain for purposes of establishing

proximate cause under RICO?

Since there is no dispute that only the operating

subsidiary suffered a loss, this case does not require

complicated inquiries into corporate structure.

Rather, it presents an opportunity for this Court to

resolve a simple question with significant policy

implications. Like all major companies, Petrobras

operates through its subsidiaries and affiliates.

Braspetro, as a holding company within the Petrobras

group, does not operate drillships, and was never

going to operate the drillship it was induced to charter

as a result of Samsung’s bribery. Petrobras America

was the operator of the drillship. Thus, Petrobras

America was the only entity that made any payments

as a result of Samsung’s conduct.

That is how major corporations operate: high-level

decisions are made at the parent level, and operating

subsidiaries incur the costs through their day-to-day

operations. If an intra-company assignment within an

integrated group of companies is sufficient to preclude

recovery by an operating subsidiary under RICO,

countless major corporations operating in the United

States might inadvertently be foreclosing themselves

from protections Congress intended RICO to afford.

The Fifth Circuit’s approach to proximate cause

would protect unlawful conduct from RICO liability

based on mere corporate formalities and carries

significant

implications

for

multinational

corporations who are the targets of RICO enterprises.

Its disregard for the realities of multinational

corporations creates ambiguities that are apt to

preclude recovery under RICO by every corporation

that uses a holding company to execute contracts and

operating subsidiaries to conduct its business. This

case presents a clear vehicle to address those

significant ambiguities.

CONCLUSION

The petition for a writ of certiorari should be

granted.

Respectfully submitted,

Jonathan J. Walsh

Counsel of Record

Robert B. Garcia

Felix Gilman

Grace Condro

Sylvi Sareva

CURTIS, MALLET-PREVOST,

COLT & MOSLE LLP

101 Park Avenue

New York, NY 10178

(212) 696-8817

jwalsh@curtis.com

Counsel for Petitioner

December 5, 2024

APPENDIX

TABLE OF CONTENTS

Appendix A — United States Court of Appeals

for the Fifth Circuit Order

(August 7, 2024) ........................

Appendix B — United States District Court for

the Southern District of Texas

Houston Division

Memorandum and Opinion

(August 11, 2023) ......................

Appendix C — 18 USCS § 1962.........................

Appendix D — 18 USCS § 1964.........................

50a

53a

APPENDIX A

UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

________________

NO. 23-20448

________________

PETROBRAS AMERICA, INCORPORATED,

PLAINTIFF—APPELLANT/CROSS-APPELLEE

SAMSUNG HEAVY INDUSTRIES COMPANY, LIMITED,

DEFENDANT—APPELLEE/CROSS-APPELLANT

________________

Appeal from the United States District Court

for the Southern District of Texas

USDC No. 4:19-CV-1410

________________

Before JONES, SMITH, and HO, Circuit Judges.

PER CURIAM:*

We have carefully considered this appeal in light of

the briefs, the record, and oral argument. Having done

so we find no error that would affect the judgment of

the district court. We therefore affirm essentially for

the reasons stated in the district court’s opinion.



This opinion is not designated for publication. See

5TH CIR. R. 47.5

(1a)

APPENDIX B

IN THE UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF TEXAS

HOUSTON DIVISION

________________

CIVIL ACTION NO. H-19-1410

________________

PETROBRAS AMERICA, INC.,

PLAINTIFF AND COUNTERCLAIM DEFENDANT

SAMSUNG HEAVY INDUSTRIES, CO., LTD.,

DEFENDANT AND COUNTERCLAIMANT

________________

MEMORANDUM AND OPINION

For years, lawyers bringing mine-run breach of

contract cases have tacked on claims under the

Racketeer Influenced and Corrupt Organizations Act,

18 U.S.C. §§ 1961–1968, despite the absence of any

systematic corruption.1 This is not one of those cases.

1 See, e.g., Arruda v. Curves Int’l, Inc., 861 F. App’x 831, 836 (5th

Cir. 2021) (affirming dismissal of RICO claim) (“Breach of

contract is not fraud, and a series of broken promises therefore is

not a pattern of fraud. It is correspondingly difficult to recast a

dispute about broken promises into a claim of racketeering under

RICO.”) (quoting Perlman v. Zell, 185 F.3d 850, 853 (7th Cir.

1999)); Shannon v. Ham, 639 F. App’x 1001, 1004 (5th Cir. 2016)

This case actually involves systematic corruption on a

large scale—Samsung’s bribery of a state-owned

enterprise’s employees to secure a contract to build a

drillship worth hundreds of millions of dollars, with

operating costs of over $400,000 a day. The corruption

has already resulted in a large arbitration award

against Samsung and criminal convictions for the

individuals, employees of the plaintiff’s parent

company, who took the bribes.

Despite the corruption that gave rise to this suit, the

court finds that the elements necessary for the

plaintiff to recover under RICO are not met. The court

also finds that the defendant’s counterclaim is not

viable as a matter of law. The reasons for these rulings

are set out below.

Summary of This Dispute

Petrobras America (“Petrobras America”), an affiliate

of the Brazilian state oil company Petróleo Brasileiro,

S.A. (“Petrobras”), sued Samsung Heavy Industries to

recover damages allegedly caused by Samsung’s

bribery of Petrobras officials to secure a drillingservices contract between Petrobras International

Braspetro B.V. (“Braspetro”) and Pride Global

(“[The plaintiffs] wish to convert claims that would otherwise

sound in Texas contract or statutory law into criminal acts

encompassed by RICO.”) (citation omitted); Zastrow v. Houston

Auto Imps. Greenway Ltd., 789 F.3d 553, 562 (5th Cir. 2015)

(“The district court properly granted summary judgment on [the

plaintiff’s] breach of contract claim dressed in civil RICO garb.”).

(“Pride”).2 Under this contract, Petrobras America

paid Pride at least $600 million. Pride demanded this

contract before agreeing to commission and purchase

from Samsung an ultra-deepwater drillship,3 the

DS-5. Around the time that Samsung finished

building the DS-5, Braspetro assigned the drillingservices contract to Petrobras America. According to

Petrobras America, it had no business need or

justification for this expensive contract. Petrobras

America argues that it would not have been saddled

with this contract but for the bribes Samsung paid to

the two Petrobras officers who arranged for the

contract’s execution.

Petrobras America has moved for summary judgment,

arguing that the undisputed facts show that, as a

matter of law, Samsung is liable under RICO. (Docket

Entry No. 177). Samsung has cross-moved, arguing

that Petrobras America cannot succeed on its RICO

claims. (Docket Entry No. 181).

After Petrobras America declared the Pride contract

void because it was the product of bribery, Pride

received an arbitral award of $180.4 million against

Samsung for its role in the bribery scheme. Pride and

2 Pride was acquired by Ensco plc in May 2011. (Docket Entry

Nos. 177 at 3 n.2, 181 at 6 n.1). Neither party has indicated that

this acquisition is material to the present dispute. The court

refers to the company as “Pride” throughout this opinion.

3 The parties use both the terms “drillship” and “rig” to describe

vessels such as the DS-5. Because the nomenclature for the DS5 is not at issue in this lawsuit, the court uses those terms

interchangeably.

Samsung then settled. Samsung alleges in its

counterclaim that Petrobras America is liable in

contribution for the money Samsung had to pay to

Pride to satisfy the post-award settlement. Petrobras

America’s motion seeks dismissal of Samsung’s

counterclaim.

The parties have extensively briefed the two motions

for summary judgment. (Docket Entry Nos. 177, 181,

194, 199, 208, 215, 219-1, 227, 230). The court held a

hearing on the motions on July 24, 2023. (Docket

Entry No. 233). Based on the briefing and summary

judgment record, the arguments of counsel, and the

relevant law, the court grants Samsung’s motion for

summary judgment, denies Petrobras America’s

motion with respect to its RICO claims, but grants the

part of Petrobras America’s motion seeking dismissal

of Samsung’s counterclaims. The reasons for these

rulings are set out below.

II.

Background4

Petrobras is the national oil company of Brazil, and

the Brazilian federal government is its controlling

shareholder. (PAI SUF ¶ 18; SHI SUF ¶ 2). Braspetro

Background facts are taken from the parties’ statements of

undisputed facts (“PAI SUF” and “SHI SUF”), including, when

relevant, the opposing party’s responses and objections. (See

Docket Entry Nos. 178, 180, 192, 193, 195, 210, 212). Specific

documents in the record are also referenced where appropriate.

The court does not believe that Petrobras America’s objections to

certain summary judgment evidence, (Docket Entry Nos. 192,

216 (Samsung’s responses to Petrobras America’s objections)),

are material to the outcome of the parties’ motions.

is organized under the laws of the Netherlands and is

a wholly owned subsidiary of Petrobras. Petrobras

America is a Delaware-incorporated wholly owned

subsidiary of Braspetro. (PAI SUF ¶¶ 17–18; SHI SUF

¶ 1; July 24, 2023 Hearing Transcript (“Tr.”) at 7:16–

21). Samsung Heavy Industries is organized under the

laws of the Republic of Korea and, among other things,

builds and sells ultra-deepwater drillships. (PAI SUF

¶ 20; SHI SUF ¶ 64).

A. Petrobras

1. Corporate Governance

Petrobras is overseen by a board of directors, which

has the authority to nominate and remove executive

officers of the corporation. (SHI SUF ¶ 3). Petrobras’s

corporate bylaws vest managerial control in a “Board

of Executive Officers,” also called the “Executive

Board.” (Id. ¶¶ 6–7). During the time in question, the

Executive Board had seven members. (Id. ¶ 21).

Among other things, the bylaws tasked the Executive

Board with the responsibility “to authorize the

acquisition . . . of real-estate goods, ships, and

maritime drilling and production units.” (Id. ¶ 9).

Two of the Executive Board’s seven members during

this period were Nestor Cerveró and Renato Duque.

From February 2003 until February 2008, Cerveró

was the head of Petrobras’s International Division

and the chair of Petrobras America’s board of

directors. (PAI SUF ¶ 13; see also id. ¶ 21 (identifying

relevant individuals); SHI SUF ¶¶ 10–11). In these

capacities, Cerveró had the authority to execute

contracts on behalf of certain Petrobras entities. (SHI

SUF ¶ 15). From 2003 until February 2012, Duque

was a member of the Executive Board and Petrobras’s

Chief Services Officer. (PAI SUF ¶¶ 14, 21; SHI SUF

¶ 16). Duque apparently did not hold a position in

Petrobras America. From time to time, Duque acted

as an agent for other Petrobras entities. (SHI SUF

¶ 19). Cerveró’s and Duque’s employment duties

included procuring drillships in compliance with

company policy and relevant law. (Id. ¶ 20).

2. Petrobras and the Oil Market in the

Relevant Period

From 2004 to 2007, Petrobras sought to expand its

global presence through deepwater drilling projects in

various locations. (Id. ¶¶ 39, 47–48, 50, 94; see also id.

¶ 46 (“We consider our core activities to be . . .

deepwater exploration and development off the U.S.

Gulf Coast, Colombia, and West Africa.”) (quoting

Petrobras’s 2006 Annual Report); id. ¶ 127 (testimony

that Petrobras sought drilling rigs for both Brazilian

and international use)). To meet its goals, Petrobras

needed greater deepwater drilling capacity; at the

time, its domestic Exploration and Production

Division had only a single “ultra-deepwater” drilling

rig, that is, one capable of drilling in depths of over

9,000 feet. (Id. ¶¶ 40, 42). In 2008 and 2009 public

filings, and in a 2010 earnings call, Petrobras cited its

lack of domestic drilling capacity as a risk to, or limit

on, its business. (Id. ¶¶ 117, 128, 130). Beginning in

2006, Petrobras began to increase its deepwater

drilling capacity by acquiring usage rights to four

ultra-deepwater rigs. (Id. ¶ 44). Between 2008 and

2010, Petrobras acquired rights to 22 additional ultradeepwater rigs. (Id. ¶ 45; see also id. ¶¶ 123–125

(mentioning specific drillships)).

Other industry players also sought to expand their

deepwater drilling capacity. (Id. ¶¶ 51, 57; see also

¶¶ 219, 222 (stating that there were 32 ultradeepwater rigs in service in 2006 and 107 in 2011).

The push for more deepwater drilling capacity

reflected the generally rising price of oil between 2002

and 2014, temporarily interrupted by the 2008 to 2010

recession. (Id. ¶¶ 49, 60–61, 216–18). These market

dynamics led to the greater use of existing rigs and

higher contract prices for their operation. (Id. ¶¶ 52–

53, 58–59, 62, 220, 223). The market’s focus on

deepwater capacity also led to increased competition

between different oil producers and contractors for

new rigs. (Id. ¶¶ 63, 221).

In 2014, the price of oil fell from about $105 per barrel

in June to less than $60 in December, a decline that

continued into following years. (Id. ¶¶ 225–26; see also

¶ 233 (stating that the price fell to $33 per barrel in

January 2016.). As a result, oil companies, including

Petrobras, began to reduce their drillship fleets. (Id.

¶ 229–232).

B. The DS-5

Contract

and

the

Drilling

Services

Samsung built the DS-5, the drillship at the center of

this dispute, as an “ultra-deepwater” drillship capable

of drilling in depths of over 10,000 feet. (Docket Entry

Nos. 51 ¶ 19 n.3, 85 ¶ 19).

1. Petrobras’s Acquisition of Samsung

Drillships before the DS-5

Samsung had previously constructed two other ultradeepwater drillships for Petrobras entities, the

Petrobras 10,000 and Vitoria 10,000.5 (PAI SUF ¶ 2;

SAI SUF ¶ 65; see also PAI Response to SHI SUF ¶ 65

(stating that the Petrobras entities party to the

Petrobras 10,000 and Vitoria 10,000 transactions were

Braspetro and Petrobras Oil and Gas B.V.,

respectively)). Beginning in 2006, Samsung secured

the contracts to build the Petrobras 10,000 and Vitoria

10,000 by paying bribes to Petrobras officials. (PAI

SUF ¶¶ 2, 4, 28–31). Samsung paid these bribes

through inflated “commission” payments to an entity

owned by Samsung’s broker, Julio Gerin de Almeida

Camargo, who paid Cerveró and Duque, and

potentially other Petrobras employees, from the

inflated commission amounts. (PAI SUF ¶¶ 4–8; SHI

SUF ¶¶ 67, 70–71, 76– 78).

The price Petrobras paid for the drillships was

inflated to include the commission payments, the

existence and nature of which were not directly

disclosed to Petrobras. (PAI SUF ¶¶ 6, 40, 55).

Cerveró and Duque, other Petrobras employees, and

Brazilian politicians allegedly shared Samsung’s

5 See generally PAI SUF ¶¶ 22–69 (detailed description of the

Petrobras 10,000 and Vitoria 10,000 bribery schemes).

10a

commission payments related to the Petrobras 10,000

and Vitoria 10,000. (SHI SUF ¶¶ 77–78).

2. The DS-5 Bribery Scheme

Samsung did not involve Camargo in the bribery

scheme for the DS-5. In 2006, Samsung opened

discussions with Pride about new Brazilian projects.

(PAI SUF ¶ 70). The parties discussed the possibility

of Pride purchasing from Samsung one or more

drillships, which Pride would then charter to

Petrobras. (Id.). Pride introduced Samsung to its

Brazilian agent, Hamylton Pinheiro Padilha Júnior.

(Id. ¶¶ 71–72). Padilha met with Cerveró and Duque

in early 2007 to discuss the possibility of a contract

between Pride and Petrobras for a “newbuild”

drillship. (Id. ¶ 74). Samsung’s potential deal with

Pride required a contract between Pride and

Petrobras or Braspetro. To get that contract, Samsung

funneled bribes to Cerveró and Duque, the two

Executive Board members who would work to approve

the drilling services contract between Pride and

Petrobras for the DS-5. (PAI SUF ¶¶ 10, 76; SHI SUF

¶¶ 76, 81–82). The Samsung executives involved in

the negotiations knew that Padilha would bribe

officials at Petrobras entities other than Petrobras

America. (PAI SUF ¶¶ 79, 82, 130–131; SHI SUF

¶ 131).

Ultimately, Samsung paid $20 million in

“commissions”—bribes—to two entities controlled by

Padilha and a man named Raul Schmidt Felippe

Júnior. (PAI SUF ¶ 12; see also id. ¶¶ 117–21

11a

(detailing the payment of $20 million in

“commissions”). Padilha and Schmidt distributed part

of the $20 million to Cerveró and Duque. (Id. ¶¶ 122–

129).

3. The

Pride-Petrobras

Samsung Agreements

and

Pride-

In May 2007, Petrobras and Pride executed a letter of

intent agreeing to negotiate a contract to charter the

DS-5. (SHI SUF ¶ 80). Cerveró signed the letter on

behalf of Petrobras. (Id.).

In June 2007, Samsung and Pride signed an option

agreement for the purchase of the DS-5. (PAI SUF

¶ 75). Schmidt told Padilha that a commission

payment would be required for Petrobras to contract

with Pride for the DS-5. That information was

communicated to Samsung. (SHI SUF ¶¶ 86–87).

Samsung paid Padilha an inflated $20 million

commission, and Padilha worked with Schmidt to

ensure that Petrobras executed a drilling services

contract with Pride. (PAI SUF ¶¶ 81–82). Samsung

knew that the $20 million “commission” was to pay

bribes to Petrobras officials. (See e.g., id. ¶ 103).

Padilha and Schmidt assisted in Samsung’s payment

of the bribes to Cerveró and Duque. (PAI SUF ¶¶ 122–

125, 128–129). Samsung added the $20 million

payment to the cost of the drillship. (PAI SUF ¶ 87;

SHI SUF ¶ 89). In October 2007, Samsung told Pride

that the higher price was the result of an increase in

labor costs and a less favorable exchange rate. (PAI

SUF ¶ 89). The $20 million commission agreement

12a

was formalized by Samsung, a company controlled by

Padilha, and a company controlled by Schmidt. (PAI

SUF ¶¶ 99–101). Before 2016, no employee of any

Petrobras entity saw the communications in which

Samsung falsely represented to Pride the reason for

the $20 million price increase. (SHI SUF ¶ 91).

In December 2007, Petrobras and Pride executed a

memorandum of understanding for a drilling services

contract between Braspetro and Pride. (SHI SUF

¶ 95). That same month, the Petrobras Executive

Board tentatively approved the DS-5 transaction.

(PAI SUF ¶ 110; SHI SUF ¶¶ 99–100; see also SHI

SUF ¶ 103 (stating that the Executive Board reviewed

information about the proposed transaction)). Cerveró

signed both the agreement and the memorandum of

understanding on behalf of Petrobras. (SHI SUF

¶¶ 95, 100). Around the same time, Samsung

contracted with Pride to construct the DS-5 for

$636,040,000. (PAI SUF ¶ 111).

The drilling services contract (the “Contract”), a fiveyear charter agreement between Braspetro and Pride,

was finalized and executed in January 2008.6 (PAI

SUF ¶ 112; SHI SUF ¶¶ 104, 106–107). Cerveró

signed the Contract as attorney-in-fact for Braspetro.

(SHI SUF ¶ 108). Petrobras America was not a party

to the Contract and did not participate in the

discussions leading to its execution. (Id. ¶¶ 97–98).

The Contract permitted Braspetro to assign it “to any

6 The Contract was approved by the Petrobras Executive Board

the next month. (Id. ¶ 109).

13a

of its Affiliates” merely by providing Pride with

written notification.7 (Docket Entry No. 176-31 (the

Contract) ¶ 23.2.1). Assignment to a third-party

required Pride’s written consent, “which consent shall

not be unreasonably withheld.” (Id. ¶ 7.1.1 (referenced

by ¶ 23.2.2)).

During negotiations about the Contract, certain

Petrobras employees questioned the company’s need

to charter the DS-5. (PAI SUF ¶¶ 95–97). In

particular, a Petrobras geologist, Lincoln Rumenos,

expressed in emails his opinion that Petrobras did not

need a third drillship. (Id. ¶ 95).

4. The DS-5 in Service

As Samsung built the DS-5, Petrobras considered

where it should be deployed. Possible destinations

included Angola and the Gulf of Mexico. (SHI SUF

¶¶ 132–135). In July 2011, before delivery of the DS-5

to any Petrobras entity, Braspetro assigned the

drillship to Petrobras America for use in the Gulf of

Mexico. (PAI SUF ¶ 133; SHI SUF ¶¶ 136–139; see

also Docket Entry No. 182-6, Exh. 52 (the

7 The Contract defines “Affiliate” as follows:

“Affiliate” means in relation to any Party, any company or

legal entity which (a) controls either directly or indirectly a

Party or (b) which is controlled directly or indirectly by such

Party, or (c) is directly or indirectly controlled by a company

or entity which directly or indirectly controls such Party.

“Control” means the right to exercise 50% or more of the

voting rights of such company or entity.

(Id. ¶ 1.1.5). The parties do not dispute that PAI is an affiliate of

Petrobras and Braspetro.

14a

“Assignment Agreement”) at 2). Alexandre Penna

Rodrigues and Orlando Azevedo signed the

Assignment Agreement on behalf of Braspetro and

Petrobras America, respectively. (SHI SUF ¶ 140).

There was no bribery involved in the execution of the

Assignment Agreement for the DS-5. (Id. ¶ 141). The

Assignment Agreement provided for Petrobras

America to assume Braspetro’s obligations under the

Contract. (Assignment Agreement ¶ 2).

Petrobras America does not dispute that it performed

some diligence before executing the Assignment

Agreement, including a review of the Contract terms.

(SHI SUF ¶ 142). The parties dispute whether

Petrobras American’s decision to enter the

Assignment Agreement was made independently of

influence or control by other Petrobras entities. Even

as more facts about Operation Car Wash came to light,

Petrobras America amended and extended the

Assignment Agreement by a series of amendments in

July 2014, August 2014, April 2015, and August 2015.

(Id. ¶¶ 200–207).

Initially, Petrobras America used the DS-5 to drill

exploratory wells in the Cascade Field in the Gulf of

Mexico. (Id. ¶¶ 145–47). After those projects were

completed in December 2013, Petrobras America

assigned the DS-5 to other companies until March

2015, when it was placed on an expensive permanent

standby. (PAI SUF ¶¶ 136–38; SHI SUF ¶¶ 148–52,

155).

15a

5. Operação Lava Jato and the Discovery

of Fraud in Petrobras’s Acquisitions of

Samsung Drillships

In March 2014, the public learned of a major

investigation into corruption within Petrobras and the

Brazilian government. The investigation was

popularly known as Operação Lava Jato, or Operation

Car Wash. (SHI SUF ¶ 172).8 In March 2014, the

public learned that criminal charges had been filed

against Paulo Roberto Costa, in 2007–2008

Petrobras’s Chief Downstream Officer, for his role in

a bribery scheme at Petrobras. (Id. ¶¶ 174, 177). That

same year, Petrobras hired outside counsel to conduct

an internal investigation into Operation Car Wash.

(Id. ¶ 178). In November of the same year, the U.S.

Securities and Exchange Commission also opened an

investigation. Brazilian prosecutors requested

information on “contracts and payments” from

Petrobras, including contracts and payments related

to drillships. (Id. ¶¶ 179–180). Around the same time,

Petrobras officers received public reports that

Camargo had testified that he paid kickbacks to

Petrobras employees, including Costa and Duque. (Id.

¶ 181). By January 2015, the news media began to

report that Cerveró, Duque, and others had been

charged with a bribery scheme involving the Petrobras

8 The first indications of the scandal appeared in August 2013,

when Epoca, a Brazilian magazine, reported that Petrobras

officials had taken bribes with respect to a contract involving the

Titanium Explorer drillship. (Id. ¶ 163). Petrobras’s internal

inquiry revealed problems but not, Petrobras America contends,

“bribery or corruption.” (PAI Response to SHI SUF ¶ 163).

16a

10,000 and Vitoria 10,000 transactions. (Id. ¶¶ 182–

83, 193, see also ¶¶ 195 (referring to the July 2015

arrest of Jorge Zelada, Petrobras’s Chief International

Officer in 2008, and the discovery of his connection

with Schmidt and Samsung), 196 (referring to news

reports identifying Padilha as a “whistleblower”

revealing information about corruption in contracts

and transactions relating to drillships)). Reports

identified Samsung as the source of $13 million in

bribes. (Id. ¶ 182). The Brazilian government

continued to investigate Petrobras’s conduct from

2005 to 2015. (Id. ¶¶ 184–186). Cerveró and Duque

were explicit subjects of these investigations. (Id.).

In March 2015, Petrobras began an internal audit into

the Petrobras 10,000, Vitoria 10,000, and DS-5

transactions. (PAI SUF ¶ 138; SHI SUF ¶ 187). The

audit generated a report, issued in May 2015, that

raised questions about Padilha’s involvement in the

negotiations with Pride for the DS-5. (PAI SUF

¶¶ 139–140; SHI SUF ¶ 189). The report

recommended that Petrobras inform Brazilian

prosecutors of potential improprieties in the DS-5

procurement process. Petrobras did so that same

month. (SHI SUF ¶¶ 190–91). In June 2015,

Petrobras’s outside counsel made a presentation to

United States Department of Justice and SEC officials

about the roles Cerveró, Duque, and Samsung played

in making corrupt payments in the Petrobras 10,000

and Vitoria 10,000 acquisitions. (SHI SUF ¶ 194).

In October 2015, the Brazilian authorities provided

Petrobras with a sworn statement by Padilha, in

17a

which he admitted to the DS-5 bribery scheme and

pointed to Cerveró, Duque, and Samsung as other

participants. (PAI SUF ¶ 141). In August 2015, the

Brazilian authorities indicated that they would

charge Petrobras with crimes relating to the DS-5

transaction. (SHI SUF ¶ 197).

Ultimately, both Cerveró and Duque were convicted of

crimes relating to the DS-5 acquisition. (SHI SUF

¶ 22). Pedro Jose Barusco Filho, Costa, Luis Carlos

Moreira, and Zelada were also convicted of crimes

related to public corruption arising from their

employment with Petrobras. (Id. ¶¶ 22, 25, 30).

Petrobras America states that, except for Cerveró and

Duque, these individuals were convicted of crimes

unrelated to the Petrobras 10,000, Victoria 10,000,

and DS-5 transactions. (See PAI Response to SHI SUF

¶¶ 22, 25, 30–33).

In addition to the Brazilian criminal convictions,

Petrobras admitted that it had violated the United

States Foreign Corrupt Practices Act during 2004 to

2012. (SHI SUF ¶ 36). The statement of facts

accompanying Petrobras’s non-prosecution agreement

with the United States does not include information

related to the Petrobras 10,000, Vitoria 10,000, and

DS-5 drillships. (PAI Response to SHI SUF ¶ 36).

Petrobras did admit responsibility that included

vicarious liability for the corrupt acts of employees

Cerveró, Duque, Costa, Zelada, and Barusco. (SHI

SUF ¶ 37).

In January 2016, Petrobras America and Braspetro

18a

sent a notice to Pride terminating the Contract based

on evidence of the bribery scheme. (PAI SUF ¶ 142;

SHI SUF ¶ 234).

The Pride-Samsung Arbitration

In 2016, Pride initiated arbitration in London against

Samsung, asserting claims under English law for

bribery, dishonest assistance, deceit, and conspiracy.9

(SHI SUF ¶ 238). The tribunal issued a series of

awards. The third award—for damages—found that

Samsung owed Pride $180.4 million, representing the

difference in value between a legitimately procured

contract and the Contract as signed ($152.8 million),

as well as the bribe amount ($20 million), and Pride’s

legal fees in connection with the U.S. investigations

into Pride’s conduct and the arbitration itself ($7.2

million). The third award did not determine

prejudgment interest and costs. After the third award,

Samsung and Pride settled all of Pride’s claims

against Samsung for $200 million.

III.

Procedural Posture

Samsung filed its initial complaint in this action in

March 2019 and an amended complaint in September

of the same year. (Docket Entry Nos. 1, 51). Petrobras

America moved to dismiss the amended complaint.

9 Pride simultaneously initiated an arbitration against Petrobras

America and Braspetro based on the same events and contracts.

(SHI SUF ¶¶ 238, 240). That arbitration was settled before any

award on liability in August 2018. (Id. ¶ 245). The settlement did

not provide for payment by either party.

19a

(Docket Entry No. 52). The court dismissed the

amended complaint in June 2020 because the relevant

four-year statute of limitations had run. (Docket

Entry Nos. 64, 65 (memorandum and opinion and

order of dismissal)). Petrobras America did not

dispute that its claims accrued more than four years

before it filed suit in 2019 but argued that the

limitations period did not begin to run until it

discovered the financial injury it sustained as to the

DS-5. (Docket Entry No. 64 at 6). The court rejected

that argument and ruled that, under federal and

Texas law, “by 2014 Petrobras knew or should have

known about the bribery and corruption within the

company and knew or should have known that the

bribery and corruption extended to the drillship at

issue here.” (Id. at 6–7); Petrobras Am., Inc. v.

Samsung Heavy Indus. Co., Ltd., No. H-19-1410, 2020

WL 13519238, at *4 (S.D. Tex. June 19, 2020), rev’d

and remanded, 9 F.4th 247 (5th Cir. 2021) (per

curiam). Based on the finding that Petrobras

America’s claims were time-barred, the court held

that further amendment would be futile and

dismissed the amended complaint with prejudice. (Id.

at 8); Petrobras, 2020 WL 13519238, at *5.

Petrobras appealed, and the Fifth Circuit reversed

and remanded. (Docket Entry No. 66, 79 at 11; Docket

Entry No. 80 (order)). In the panel’s view, Samsung

had not established as a matter of law that Petrobras

knew or should have known of its injury before March

5, 2015. (Docket Entry No. 79 at 10); Petrobras, 9

F.4th at 256.

20a

On remand, Samsung answered the amended

complaint and brought counterclaims against

Petrobras America in November 2021. (Docket Entry

No. 85). Petrobras America moved to dismiss those

counterclaims on the basis that they were untimely

and failed to state a claim. The court denied the

motion, finding that a four-year statute of limitations

applied to Samsung’s contribution claims arising out

of the November 2021 arbitration award. (Docket

Entry No. 131 at 22); Petrobras Am., Inc. v. Samsung

Heavy Indus. Co., Ltd., 620 F. Supp. 3d 577, 590 (S.D.

Tex. 2022). Discovery and the pending summary

judgment motions followed.

IV.

The Rule 56 Legal Standard

“Summary judgment is appropriate where ‘the

movant shows that there is no genuine dispute as to

any material fact and the movant is entitled to

judgment as a matter of law.’” Springboards to Educ.,

Inc. v. Pharr-San Juan-Alamo Indep. Sch. Dist., 33

F.4th 747, 749 (5th Cir. 2022) (quoting FED. R. CIV. P.

56(a)). “A fact is material if it might affect the outcome

of the suit and a factual dispute is genuine if the

evidence is such that a reasonable jury could return a

verdict for the nonmoving party.” Thompson v.

Microsoft Corp., 2 F.4th 460, 467 (5th Cir. 2021)

(quoting reference omitted). The moving party

“always bears the initial responsibility of informing

the district court of the basis for its motion[] and

identifying” the record evidence “which it believes

demonstrate[s] the absence of a genuine issue of

material fact.” Celotex Corp. v. Catrett, 477 U.S. 317,

21a

323 (1986).

“When ‘the non-movant bears the burden of proof at

trial,’ a party moving for summary judgment ‘may

merely point to the absence of evidence and thereby

shift to the non-movant the burden of demonstrating

by competent summary judgment proof that there is

[a dispute] of material fact warranting trial.” MDK

S.R.L. v. Proplant Inc., 25 F.4th 360, 368 (5th Cir.

2022) (alteration in original) (quoting reference

omitted). “However[,] the movant ‘need not negate the

elements of the nonmovant’s case.’” Terral River Serv.,

Inc. v. SCF Marine Inc., 20 F.4th 1015, 1018 (5th Cir.

2021) (quoting Little v. Liquid Air Corp., 37 F.3d 1069,

1075 (5th Cir. 1994) (en banc) (per curiam)). “If

‘reasonable minds could differ’ on ‘the import of the

evidence,’ a court must deny the motion.” Sanchez v.

Young County, 956 F.3d 785, 791 (5th Cir. 2020)

(quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242,

250–51 (1986)).

After the movant meets its Rule 56(c) burden, “the

non-movant must come forward with ‘specific facts’

showing a genuine factual issue for trial.” Houston v.

Tex. Dep’t of Agric., 17 F.4th 576, 581 (5th Cir. 2021)

(quoting references omitted). The nonmovant “must

identify specific evidence in the record and articulate

the ‘precise manner’ in which the evidence” aids their

case. Shah v. VHS San Antonio Partners, L.L.C., 985

F.3d 450, 453 (5th Cir. 2021) (quoting reference

omitted). Of course, all reasonable inferences are

drawn in the nonmovant’s favor. Loftin v. City of

Prentiss, 33 F.4th 774, 779 (5th Cir. 2022). But a

22a

nonmovant “cannot defeat summary judgment with

‘conclusory allegations, unsubstantiated assertions, or

only a scintilla of evidence.’” Jones v. Gulf Coast Rest.

Grp., Inc., 8 F.4th 363, 369 (5th Cir. 2021) (quoting

reference omitted).

Analysis

A. Petrobras’s RICO Claims

1. Statutory Standing

Samsung argues that Petrobras lacks statutory

standing to assert RICO claims. (Docket Entry No.

181 at 11). Statutory standing for a RICO claim

requires a plaintiff to demonstrate a violation of the

RICO statute and an injury to its “business or

property by reason of a violation of section 1962.” 18

U.S.C. § 1964(c); HCB Fin. Corp. v. McPherson, 8

F.4th 335, 338 (5th Cir. 2021). Statutory standing is

distinct from constitutional standing in that it does

not implicate the court’s subject-matter jurisdiction.

McPherson, 8 F.4th at 339.

Samsung notes that Petrobras, Braspetro, and

Petrobras America are distinct corporate entities, and

that undisputed facts demonstrate that Petrobras

American was not originally a party to the bribetainted transaction for the DS-5. Samsung argues that

the procurement through bribery of the drilling

services agreement may have harmed Braspetro or

Petrobras, but “RICO . . . claims embrace a standing

requirement that precludes plaintiffs from recovering

based on a third-party’s injury.” (Docket Entry No.

23a

181 at 12). Samsung argues that Petrobras America’s

execution of the Assignment Agreement was an

independent business decision, defeating Samsung’s

liability for any injury that Petrobras America

sustained by making payments under the Contract.

Samsung argues that Petrobras America’s injury is

therefore “derivative” of Braspetro’s or Petrobras’s

injuries and is insufficient to confer standing for its

RICO claims. (Id. at 13).

In response, Petrobras America argues that it seeks

recovery for its own injury: the injury sustained by

“paying hundreds of millions of dollars under a

drilling contract that it did not need.” (Docket Entry

No. 199 at 3). Petrobras America notes that neither

Braspetro nor Petrobras made payments under the

Contract, because the Braspetro assigned the

Contract to Petrobras America shortly after Samsung

completed constructing the DS-5. (Id.). Petrobras

America argues that there is a dispute as to whether

its decision to execute the Assignment Agreement was

made independently of Braspetro and Petrobras. (Id.

at 4–5).

The civil RICO statute provides a cause of action to

“[a]ny person injured in his business or property by

reason of a violation” of the statute. 18 U.S.C.

§ 1964(c) (emphasis added). “Nothing on the face of

the relevant statutory provisions imposes . . . [the]

requirement” on the plaintiff to show first-party

reliance

the

defendant’s

alleged

misrepresentations. Bridge v. Phoenix Bond & Indem.

Co., 553 U.S. 639, 648 (2008). The statute does not

24a

require Petrobras America to show that Samsung

defrauded Petrobras America,10 merely that it was

“injured . . . by reason of” Samsung’s RICO violation.

Petrobras America has statutory standing under

RICO.

2. Proximate

Relationship

Cause

Direct

“The proximate causation standard in th[e] [civil

RICO] context is not one of foreseeability; instead, the

plaintiff must demonstrate that the alleged violation

“led directly” to the injuries. Molina-Aranda v. Black

Magic Enters., L.L.C., 983 F.3d 779, 784 (5th Cir.

2020) (quoting Anza v. Ideal Steel Corp., 547 U.S. 451,

461 (2006)).

Samsung argues that the undisputed facts show that

Petrobras America cannot prove that Samsung’s acts

directly caused the asserted injuries. (Docket Entry

No. 181 at 13; Tr. at 30:7– 15). Samsung argues that,

because it paid no bribes to Petrobras America or any

other party with respect to the Assignment

Agreement, any injury Petrobras America suffered

resulted from its own execution of the Assignment

Agreement. (Docket Entry No. 181 at 14). Samsung

also argues that “[Petrobras America] independently

ratified the [Contract] when it repeatedly agreed to

assume Braspetro’s obligations, even after it learned of

10 Samsung does not dispute that a RICO plaintiff need not show

its reliance on a fraudulent representation. (Docket Entry No.

208 at 7).

25a

the bribes to Cerveró and Duque and when it knew it

had no work for the rig to perform.” (Id.). Samsung

argues that the general market downturn after the

assignment to Petrobras America, rather than

Samsung’s bribery, proximately caused Petrobras

America’s injuries. (Id.).

Petrobras America argues that Samsung neglects the

three-factor test used by many courts of appeal to

evaluate proximate causation in the RICO context.

(Docket Entry No. 199 at 6–7). Petrobras America also

argues that there is a dispute as to the independence

of its decision to enter into the Assignment

Agreement, and as to whether the Assignment

Agreement was an “intervening cause” that broke the

causal chain. (Id. at 10). Petrobras America argues

that it had no need for the DS-5 even before the

market downturn, (id. at 15), which Samsung

identifies as beginning in 2014. (Docket Entry No. 181

at 9). Petrobras America contends that it had no need

for the Contract when it was executed or when it was

assigned, without regard to the subsequent market

downturn. (Docket Entry No. 199 at 15). Finally,

Petrobras America argues that ratification is an

affirmative defense and not an element of proximate

cause, (id. at 17), and, in any event, that Samsung has

not established ratification under Texas law. (Id. at

18).

Despite the statute’s broad “by reason of” language,

proximate causation is an essential element of a RICO

claim. Holmes v. Sec. Inv. Prot. Corp., 503 U.S. 258,

266532 (1992) (noting “the very unlikelihood that

26a

Congress meant to allow all factually injured

plaintiffs to recover” and rejecting a standard of only

but-for causation). The parties dispute where the

court should focus in analyzing proximate cause.

Samsung argues that the Supreme Court’s decisions

in Anza, 547 U.S. 451, and Hemi Grp., LLC v. City of

New York, 559 U.S. 1 (2010), require a “direct

relationship between the RICO violation and harm.”

(Docket Entry No. 208 at 4). Petrobras America

considers those authorities but also advocates

application of a three-factor test used by the Ninth

Circuit in Mendoza v. Zirkle Fruit Co., 301 F.3d 1163

(9th Cir. 2002), which it argues is also supported by

the same Supreme Court precedents. (See Tr. at

15:25–16:11).

Anza concerned a dispute between two companies

selling steel products, supplies, and services. Anza,

547 U.S. at 453–54. “According to Ideal, [the Anzacontrolled entity] adopted a practice of failing to

charge the requisite New York sales tax to cashpaying customers, even when conducting transactions

that were not exempt from sales tax under state law.

This practice allowed National to reduce its prices

without affecting its profit margin.” Anza, 547 U.S. at

454. Ideal sued. The court concluded that proximate

cause was lacking, because “[t]he cause of Ideal’s

asserted harms . . . is a set of actions (offering lower

prices) entirely distinct from the alleged RICO

violation (defrauding the State).” Id. The court

observed that National “could have lowered its prices

for any number of reasons unconnected to the asserted

pattern of fraud,” such as receiving additional capital

27a

from a third party or accepting lower margins on its

sales. Id. “[National’s] lowering of prices in no sense

required it to defraud the state tax authority.

Likewise, the fact that a company commits tax fraud

does not mean the company will lower its prices . . . .”

Id. at 448– 59. The court observed that Ideal’s sales

may have fallen for a number of reasons unrelated to

the alleged fraud. Id. at 459.

Hemi concerned a suit brought by New York City

against Hemi, a New Mexico online retailer of

cigarettes. Hemi, 559 U.S. at 4. The City was

responsible for recovering taxes for such sales from

the purchasers themselves, who were required by law

to pay the taxes on their out-of-state purchases to the

City. Id. at 5. Under federal law, Hemi was required

to submit customer information to New York State,

which would forward that information to the City. Id.

at 4–6. The City alleged that it was harmed after

Hemi failed to file this information with New York

State. Id. at 4–5. The Court held that the allegations

did not show that the City was injured “by reason of”

the alleged fraud. Id. at 9. Stating that RICO requires

a “‘direct causal connection’ between the predicate

offense and the alleged harm,” id. at 10–11, the Court

found that the direct cause of the City’s harm was its

tax-avoiding citizens, not Hemi. Id. at 11.

Petrobras accepts the requirement of a “direct causal

relationship,” but urges the court break the

requirement down into three-factor examination of

the harm alleged, as follows:

28a

[W]hether there are more direct victims of the

alleged wrongful conduct who can be counted on to

vindicate the law as private attorneys general; (2)

whether it will be difficult to ascertain the amount

of the plaintiff’s damages attributable to

defendant’s wrongful conduct; and (3) whether the

courts will have to adopt complicated rules

apportioning damages to obviate the risk of

multiple recoveries.

Mendoza, 301 F.3d at 1169. Petrobras argues that

only Petrobras America made payments under the

Contract. No other party was asserting injury under

the Contract, avoiding the risk of double recoveries or

complicated apportionment. Petrobras argues that the

connection is not “speculative” because Petrobras

America would not have suffered the injury of making

contract payments without Samsung’s bribery

payments. Finally, Petrobras argues that the

damages—the payments it made under the

Contract—are ascertainable. (Docket Entry No. 199 at

8).

In Holmes, a Clayton Act case, the Court identified the

difficulties it had found in ascertaining damages and

apportionment

without

requiring

proximate

causation. Holmes, 503 U.S. at 269. The Court stated

that “the need to grapple with these problems is

simply unjustified by the general interest in deterring

injurious conduct, since directly injured victims can

generally be counted on to vindicate the law as private

attorneys general, without any of the problems

attendant upon suits by plaintiffs injured more

29a

remotely.” Id. at 269–70. The Court noted that the

same considerations applied in the RICO context. Id.

at 270.

The Hemi Court noted that “whether better situated

plaintiffs would have an incentive to sue” is “one

consideration we have highlighted.” Hemi, 599 U.S. at

11–12. The Court noted that the State—which also

imposed a cigarette tax—would have an incentive to

sue, although the Court noted that it was not deciding

the viability of any claim brought by the State. Id. at

12. The Anza Court briefly discussed the risk of

multiple recoveries and issues of apportionment and

whether the damages suffered by indirectly harmed

plaintiffs would be difficult to ascertain. Anza, 547

U.S. at 465–466.

The Court appears to view the Mendoza factors as

reasons to require proximate causation and to limit

RICO recovery to direct harms. See Jackson v.

NAACP, 546 F. App’x 438, 443 (5th Cir. 2013) (per

curiam) (stating that the factors identified by

Mendoza and other cases are “[t]he underlying

premises of the proximate cause requirement”); cf.

Molina-Aranda, 983 F.3d at 784 (referring to the

direct injury requirement without evaluating the

Mendoza factors). Even if Petrobras America satisfies

the Mendoza test, that is not by itself enough to show

that Petrobras America suffered a direct harm from

Samsung’s bribery of Petrobras officials. The Court

stated only that, “in the RICO context, the focus [of

the proximate cause analysis] is on the directness of

the relationship between the conduct and the harm.”

30a

Hemi, 599 U.S. at 12. The bribery scheme in which

Samsung paid Petrobras officials tainted the drilling

services contract, allegedly resulting in the

acquisition of a drillship that no Petrobras entity

needed. Braspetro did not need the DS-5 and was a

party to the Contract with Pride. Had Braspetro been

injured by the unnecessary Contract, that injury

would have directly flowed from Samsung’s conduct.

But Braspetro is not before the court. It made no

payments under the Contract. It assigned the

Contract to Petrobras America. Petrobras America

does not contend that Samsung bribed any of its

employees, or any Braspetro or Petrobras employees,

with respect to the Assignment Agreement.

Assuming, without deciding, that Petrobras America

was compelled to enter into the Assignment

Agreement, a jury nonetheless could not find, under

the standard set out by the Supreme Court, that

Samsung proximately caused Petrobras America’s

injuries. Those injuries occurred because Petrobras

America had to assume Braspetro’s obligations under

the Contract. Braspetro or Petrobras caused

Petrobras America to assume those obligations, not

Samsung. Samsung’s conduct did not directly injure

Petrobras America. As in Anza, the act causing the

injury—the assignment of an unnecessary drillship to

Petrobras America—was not the wrongful conduct.

The wrongful conduct was Samsung’s payment of

bribes to Petrobras officials to secure the contract to

build the DS-5.

The Supreme Court has stressed the importance of

31a

direct harm over foreseeability in the RICO context.

Hemi, 599 U.S. at 12. But there is also a lack of

foreseeability as to Petrobras America. Harm to

Braspetro, on the other hand, was foreseeable to

Samsung. Petrobras America makes this argument in

its motion for summary judgment:

After Braspetro was fraudulently induced into a

five-year commitment for a drillship it did not

need, it was reasonably foreseeable that it would

suffer losses by being saddled with a long-term

contract it did not need. [Petrobras America’s]

sporadic use of the drillship to mitigate such

damages does not change the fact that there was

never a need for a five-year commitment.

(Docket Entry No. 177). As quoted, “it was reasonably

foreseeable that [Braspetro] would suffer losses. . . .”

(Id.). It was not reasonably foreseeable that Braspetro

would assign the DS-5 to a related entity that had no

need for it. Once constructed and deployed, the DS-5

was a drillship like any other. Petrobras America does

not contend that the bribery tainted the very nature

of the DS-5, making it unusable for any purpose of any

potential Contract assignee. As Samsung’s counsel

argued, “[t]here is no evidence that the [Contract]

contained any corrupt or harmful terms to Pride.” (Tr.

at 67:16–17). Had Braspetro assigned some other

drilling services contract to Petrobras America—a

contract for a similar drillship untainted by any

illegality—Petrobras would still have been injured.

The harm to Petrobras America is too attenuated from

the bribery scheme itself to serve as a basis for RICO

32a

liability.

Petrobras America argues that the “assignment of the

DS-5 was explicitly contemplated in the [Contract],

such that there was never any question that some

[Petrobras] entity other than Braspetro would be

stuck with the DS-5 upon delivery.” (Docket Entry No.

199 at 10). That the parties contemplated assigning

the Contract does not mean that Braspetro would

assign the Contract to another Petrobras entity. The

Contract on its face permits assignment to any entity,

provided Braspetro gave notice to Pride and Pride

gave its consent. The text of the Contract does not

support the claim that Samsung’s conduct directly

caused Petrobras America’s injury. While there is no

dispute that Petrobras America was the only

Petrobras affiliate to pay anything under the

Contract, nothing in the Contract required that result.

Petrobras America does not point to authority holding

that the court must consider the identity of the payor

under an unlawfully procured contract when

determining whether a RICO injury was the direct

result of unlawful conduct. Petrobras America has not

identified record evidence demonstrating that, during

the negotiations and execution of the Contract, the

parties contemplated that Petrobras America would

receive the drillship by assignment several years

later.

At oral argument, Petrobras America’s counsel stated

that “Braspetro was never going to operate this rig”

and that “Petrobras America was the entity best

situated to take on this contract.” (Tr. at 10:17–22).

33a

But the evidence cited in support of this argument, the

declaration of Petro Albuquerque, (Docket Entry No.

197-7), does not create a factual dispute that precludes

summary judgment. Albuquerque stated that “[t]here

was never any question that Braspetro would assign

the [Contract] to some subsidiary that actually

engages in drilling operations.” (Id. ¶ 6). He also

stated that “[p]rior to the Assignment Agreement,

Braspetro planned to assign the [Contract] to any

Braspetro subsidiary that could utilize the DS-5,” and

that “[t]he assignment of the [Contract] to PAI . . . was

a [Petrobras] decision that sought to mitigate

Braspetro’s overall losses.” (Id. ¶¶ 8–9). That

Braspetro had already decided that it would assign

the Contract does not mean that it would assign the

contract to Petrobras America. Albuquerque’s

declaration shows that the decision to assign the

Contract to Petrobras America was made only after

the Contract’s execution.

The parties dispute whether Petrobras America’s

acceptance of the Contract by assignment was an

independent business decision on the part of

Petrobras America. Samsung argues that it was;

Petrobras America argues that the Petrobras group’s

structure meant that it had no choice. Petrobras

America does not ask the court to perform a veilpiercing analysis. (Tr. at 11:14–20). As a legally

distinct entity, Petrobras America cannot simply

stand in Braspetro’s shoes, even if Braspetro

contemplated the assignment of the Contract to one of

its subsidiaries. The record does not show, the text of

the Contract does not require, and counsel does not

34a

argue, (id. at 21:15–19), that Braspetro necessarily

intended Petrobras America be that assignee when

the Contract was executed as a result of the bribery

scheme. When the Contract was assigned, Braspetro

thought the DS-5 would be assigned to a subsidiary

licensed to operate in Angola, not Petrobras America.

(Id. at 11:21–12:1). Finally, the argument that the

particular assignee is of no moment because no

Petrobras entity could profit from the DS-5’s use, (id.

at 21:21), has to do with the failure of Petrobras’s

drilling prospects at the time—not Samsung’s

wrongdoing. Samsung’s bribery scheme did not affect

the presence of economically feasible recoverable oil

off the coast of Angola or in the Gulf of Mexico.

Samsung’s bribery was a but-for cause of Petrobras

America’s alleged injuries. But RICO requires a

plaintiff to show both but-for and proximate

causation. Hemi, 559 U.S. at 9. Samsung bribed

Petrobras officials to ensure that Braspetro executed

the Contract with Pride. Faced with delivery of a

drillship it did not need, Braspetro and Petrobras

assigned it to Petrobras America. In Petrobras

America’s own words, the “assumption of the

[Contract] was part of a broader decision by

[Petrobras] in coordination with its subsidiaries as the

best way to mitigate damages arising from an

unnecessary contract, and was largely beyond its

control.” (Docket Entry No. 199 at 10). The question of

assignment was discussed within Petrobras. It is

immaterial whether the assignment was made to

mitigate the losses of Petrobras entities, or whether

Petrobras America had little say in this decision.

35a

Petrobras America cannot hold Samsung liable for its

alleged damages under RICO.

The court grants Samsung’s motion for summary

judgment on Petrobras America’s RICO claims

because Petrobras America cannot show that

Samsung proximately caused its losses.

B. Samsung’s Contribution Counterclaim

Petrobras America’s motion asks the court to dismiss

Samsung’s counterclaim seeking contribution with

respect to the settlement agreement between

Samsung and Pride. The parties agree that English

law applies to the counterclaims and have each

provided expert reports on that law.

Under English law, the Civil Liabilities (Contribution)

Act of 1978, c.47, applies to Samsung’s claim. The Act

provides:

Subject to the following provisions of this section,

any person liable in respect of any damage

suffered by another person may recover

contribution from any other person liable in

respect of the same damage (whether jointly with

him or otherwise).

(Docket Entry No. 214-3, First Expert Report of

Richard Millet, K.C., dated Jan. 27, 2023 (“First Millet

Report”) ¶ 20 (quoting Act § 1(1))). The Act instructs

courts to consider the parties’ relative culpabilities

with respect to the amount of any contribution

awarded:

36a

[I]n any proceedings for contribution . . . the

amount of contribution recoverable from any

person shall be such as may be found by the court

to be just and equitable having regard to the

extent of that person’s responsibility for the

damage in question.

(Id. (quoting Act § 2(1))).

1. “The Same Damage”

Petrobras America argues that Samsung cannot show

that it is “liable in respect of the same damage,” as

that phrase is used in the Act. (Docket Entry No. 177

at 31). Samsung seeks contribution for its liability for

the settlement reached after its arbitration against

Pride. Petrobras America argues that the settlement

reflected “Pride’s losses as a result of obtaining a

[Contract] that was ‘tainted’ by Samsung’s bribery

scheme, and as a result [Petrobras America’s] early

termination of that contract.” (Id. at 32). Petrobras

America argues that it cannot be held liable in

contribution for its valid and lawful termination of the

Contract. (Id.). It points to cases supporting a “strict[]”

interpretation of “the same damage.” (Id. at 42). To be

“the same damage” under the Act, Petrobras America

argues, the party seeking contribution must “show[]

that the causation and measure of damage are the

same.” (Id.). Petrobras America asks the court to

understand “damage,” as used in the Act, as what the

tribunal found to be the proper measure of loss to

Pride: “the difference in value between a tainted and

an untainted drilling contract.” (Id. at 43 (quoting

37a

Docket Entry No. 182-8, Exh. 65, Third Partial Award

(Remedies and Quantum) (“Third Award”) ¶¶ 104 &

161, Ensco Global IV Ltd. v. Samsung Heavy Indus.

Co., Ltd. (May 3, 2019) (Schaff, K.C., Dr. Peter,

Sutton, arbs.))).

Samsung argues that “damage,” as used in the Act,

refers to harm more broadly and not to a specific

amount payable as legal damages. (Docket Entry No.

194 at 46). Samsung argues that, in the context of this

litigation, “damage” must be understood as referring

to “the harm [Pride] suffered from having a tainted

[Contract].” (Id. at 47). Samsung argues that whether

Petrobras America properly exercised a right to

terminate the Contract raises at most fact issues

relevant to Petrobras America’s liability or the

apportionment of the parties’ liability to Pride. (Id. at

48).

To be clear, the Third Award found that “[t]here is no

relevant distinction so far as an award of damages is

concerned between the different causes of action.”

(Third Award ¶ 133). All entitled Pride to a “full

compensatory remedy.” (Id.; see also ¶ 156 (“Where a

tribunal determines, without speculation, what would

have happened but for the fraud, . . . then the

compensatory principle makes it just that damages

should be assessed on that basis.”)).

In Royal Brompton Hospital NHS Tr. v. Hammond

(No. 3) [2002] 1 WLR 1397, the House of Lords

affirmed the dismissal of an architect’s claim for

contribution against a contractor relating to the

38a

parties’ liabilities to the plaintiff hospital for the

delayed completion of a building. Lord Bingham first

observed that the Act’s “‘damage’ does not mean

‘damages.’” (Id. ¶ 6 (citing Birse Construction Ltd. v.

Haiste Ltd. [1996] 1 WLR 675, 682)). The contractor

did not complete the project on time, exposing it to

liquidated damages under the contract; however, the

contract also provided that the architect could grant

the contractor extensions of time that would relieve

the contractor of its liability for those liquidated

damages. (Id. ¶¶ 11–12). The architect granted

several extensions. The contractor and the hospital

resolved their dispute. The hospital sought recovery

against the architect for the architect’s negligence in

taking certain actions that extended the timeline. The

hospital also sought to hold the architect liable for the

liquidated damages from which the architect had

relieved the contractor of responsibility.

Lord Steyn characterized the hospital’s claim against

the contractor as arising from “the late delivery of the

building.” (Id. ¶ 22). On the other hand, “[t]he essence

of the case against the architect is the allegation that

his breach of duty changed the employer’s contractual

position detrimentally as against the contractor. The

employer’s case is that the architect wrongly

evaluated the contractor’s claim for an extension of

time.” (Id. ¶ 23). Interpreting “damage” as “harm,” the

lords unanimously found that the claim against the

contractor—the gravamen of which was the delay in

completion—involved separate “damage” than the

claim against the architect. (Id. ¶¶ 8, 9, 35, 48–49).

39a

This case is distinguishable from Royal Brompton

Hospital. Samsung seeks contribution from Petrobras

America because, even assuming that Petrobras

America had nothing to do with the procurement of

the Contract:

[Petrobras America] nonetheless became a

participant in—and fully liable in contribution

under English law—when it knowingly undertook

and affirmed a tainted [Contract] pursuant to the

scheme. Or in simpler terms, [Petrobras America]

was treated under English law as responsible for

the illegal conduct that preceded its knowing

acceptance of a fraudulently procured good.

(Docket Entry No. 194 at 36). Petrobras America’s

expert attempts to distinguish the harms, as follows:

In short, the damages paid by [Samsung] to [Pride]

were based on the loss to [Pride] of receiving a

tainted contract . . . , i.e. one which Braspetro, and

later [Petrobras America] as assignee . . ., was

entitled to avoid based on the acts of Cervero and

Duque. By contrast, in its counterclaim,

[Samsung] seeks to recover damages from PAI

based on the attribution of Cervero and Duque’s

acts to [Petrobras America]. That is not, however,

the same “damage” that it paid to [Pride], and

therefore cannot be the basis for a claim for

contribution under Section 1(1) of the Act.

(First Millet Report ¶ 69). But Cerveró and Duque’s

acts, of course, contributed to the execution of the

40a

tainted Contract—the basis of Pride’s claim against

Samsung. Whether Petrobras America may be held

liable for the corruption of Cerveró and Duque is a

different question from whether Samsung’s claim

against Petrobras America involves “the same

damage.”11 Whether Samsung can succeed on its claim

against Petrobras America is also separate from the

question of whether the claim seeks “the same

damage.” The tribunal identified Samsung’s unlawful

procurement of the Contract as Pride’s “damage.” The

tribunal awarded damages measured by the

difference between what it cost Pride under the

tainted Contract and what Pride would have paid

under an untainted contract. Samsung alleges that

Petrobras America knew that the Contract was

tainted, and therefore avoidable, resulting in harm to

Pride. The harm is the same: an injury caused by a

terminable (or at least allegedly terminable)

Contract.12

11 Similarly, the court agrees with Samsung’s argument, (Docket

Entry No. 194 at 48), that the question of whether PAI was

within its rights to terminate the Contract speaks to liability or

apportionment rather than the analysis of “the same damage.”

(See First Millet Report ¶¶ 72–74 (arguing that, because Pride’s

claim against Samsung was premised on PAI’s valid termination

of the Contract, PAI cannot be liable with respect to “the same

damage.”)).

12 The question of whether “the same damage” is at issue is also

distinct from the question of the parties’ relative liability for that

damage. (See id. ¶ 23 (explaining that a court has “broad

discretion” about how to apportion liability between tortfeasors”

with respect to contribution claims under the Act”)).

41a

2. Petrobras America’s Potential Liability

The parties do not dispute the elements of the

potential bases for contribution that Samsung

identifies: the tort of bribery, conspiracy to injure by

unlawful means, and dishonest assistance. As

Petrobras America argues, and as Samsung does not

seriously dispute, (Docket Entry No. 194 at 35),

Petrobras America cannot be held liable on the basis

that it assisted in the procurement of the Contract,

because Petrobras America had no hand in the acts of

bribery themselves. Samsung instead argues that

Petrobras America:

nonetheless became a participant in—and fully

liable in contribution under English law—when it

knowingly undertook and affirmed a tainted

[Contract] pursuant to the scheme. Or, in simpler

terms, [Petrobras America] was treated under

English law as responsible for the illegal conduct

that preceded its knowing acceptance of a

fraudulently procured good.

(Id. at 36).

As Samsung observes, “the [English-law] experts

largely agree on the applicable law.” (Docket Entry

No. 227 at 1–2). Both experts point to Fish & Fish Ltd.

v. Sea Shepherd UK [2015] A.C. 1229, as providing the

standard for joint liability in tort. That case states

that a plaintiff must show:

First, the defendant must have assisted the

commission of an act by the primary tortfeasor;

42a

secondly, the assistance must have been pursuant

to a common design on the part of the defendant

and the primary tortfeasor that the act be

committed; and, thirdly, the act must constitute a

tort as against the claimant.

Id. ¶ 55. Additionally,

[a]s to the third condition, it is unnecessary for a

claimant to show that the defendant appreciated

that the act which he assisted pursuant to a

common design constituted, or gave rise to, a tort

or that he intended that the claimant be harmed.

But the defendant must have assisted in, and been

party to a common design to commit, the act that

constituted, or gave rise to, the tort. It is not

enough for a claimant to show merely that the

activity, which the defendant assisted and was the

subject of the common design, was carried out

tortiously if it could also perfectly well be carried

out without committing any tort. However, the

claimant need not go so far as to show that the

defendant knew that a specific act harming a

specific defendant was intended.

Id. ¶ 60. Samsung also identifies “conspiracy to injure

by unlawful means” as a basis for Petrobras America’s

contribution liability.

A conspiracy to injure by unlawful means is

actionable where the claimant proves that he has

suffered loss or damage as a result of unlawful

action taken pursuant to a combination or

43a

agreement between the defendant and another

person or persons to injure him by unlawful

means, whether or not it is the predominant

purpose of the defendant to do so.

(Docket Entry No. 198-1, First Expert Report of

Steven Mark Gee, K.C., dated January 31, 2022

(“First Gee Report”) ¶ 59 (quoting FM Cap. Partners

Ltd. v. Marino [2018] EWHC 1798 ¶ 93)). Finally,

“dishonest assistance” is a kind of “accessory liability,”

not an independent tort, that “depends on the

defendant’s wrongful participation in a primary

breach committed by the trustee [i.e. the fiduciary].”

JOHN MCGHEE ET AL., SNELL’S EQUITY ¶ 30-077 (34th

ed.); see also PAUL MCGRATH, COMMERCIAL FRAUD IN

CIVIL PRACTICE ¶ 16.114 (For the defendant to be held

liable, “[i]t suffices if he simply knows that he is

assisting the main fraudster to do something he is not

entitled to do.”). Both parties’ experts agree that

establishing liability for dishonest assistance requires

showing (1) a fiduciary relationship, (2) a breach of the

fiduciary duty, (3) that the defendant’s procurement

or assistance had some causal effect on the fiduciary’s

behavior, and (4) that the procurement or assistance

was dishonest. (First Millet Report ¶ 38; First Gee

Report ¶ 57 (citing Marino, EWHC 1768 ¶ 82)).

The parties’ experts agree that the three bases for

contribution that Samsung identifies have common

elements. For both joint liability with respect to the

tort of bribery, and for conspiracy to injure and

dishonest assistance, Samsung must show what is

variously called a “common design,” “combination or

44a

agreement,” or “assist[ance]” from Petrobras America

that resulted in harm to Pride, or, in the words of

Petrobras America’s expert, some kind of “concerted

action.” (Docket Entry No. 214-3, Second Expert

Report of Richard Millet, K.C., dated May 10, 2023

(“Second Millet Report”) ¶ 24). Unfortunately, the

precise meaning of this element has “never been

defined.” (Docket Entry No. 227-3, Deposition of

Steven Mark Gee, K.C. at 85:17).

Petrobras America observes that Samsung’s

counterclaim turns on finding that, in 2015, Petrobras

America engaged in some kind of concerted action

with Samsung with respect to a bribery scheme in

which all the bribes were paid, and the object of the

scheme obtained, in 2008. (Docket Entry No. 21). The

benefit Samsung sought to obtain was the purchase of

the DS-5 from Pride. Petrobras America claims that

the scheme ended, at the latest, in 2011, with the

delivery of the DS-5.

The court finds Samsung’s argument that the scheme

persisted through Amendment No. 4 to the

Assignment Agreement less convincing. The Third

Award found that Samsung owed Pride the “difference

in value between a tainted and an untainted drilling

contract.” Petrobras America argues that it cannot be

liable because “there is no evidence that [it] had any

knowledge of, much less any involvement in, the

bribery scheme.” (Docket Entry No. 215 at 18–19). The

court agrees with both Petrobras America’s narrower

conception of the scheme and the legal conclusions

that flow from it. The Contract was tainted because

45a

Samsung bribed Petrobras officials in 2008. Petrobras

America’s subsequent performance under the

assigned Contract did not make it any more or any

less tainted. Petrobras America based its termination

on the taint associated with the Contract, but

termination did not change the nature of the Contract.

Samsung’s theory of liability requires it to show that

Petrobras America contributed to a scheme that

resulted in Pride’s execution of a contract that could

be unilaterally terminated by Petrobras America.

As Samsung’s own expert states:

It is not sufficient in English law to prove that a

defendant facilitated tortious conduct or even

knowingly did so, unless there is also the element

of agreement or arrangement or plan or concerted

action with another to participate in the tortious

scheme.

(Docket Entry No. 227-4, Fourth Expert Report of

Steven Mark Gee, K.C., dated April 14, 2023 (“Fourth

Gee Report”) ¶ 61). This statement appears consistent

with Millet’s opinion on the same issue. (Docket Entry

No. 227-1, Deposition of Richard Millet, K.C. at

210:12–17 (defining “concerted action” as meaning

“[a]cting together”), 211:16–23 (“Q: Is it your

understanding that [Samsung] must show that

[Petrobras America] expressly coordinated its actions

with other tortfeasors? A: I don’t think you need to go

quite that far, but you do need to show that it’s joint

in some way. There’s a—that it’s participatory.

Intentional coordination, I think, is normal but it’s not

46a

essential . . . .”)). Petrobras America’s actions with

respect to the bribery scheme, combined with the

nature and timing of the scheme, defeat Samsung’s

attempts to show that Petrobras America engaged in

concerted action with respect to the harm that

Samsung caused Pride. Gee opines that “[o]nce

[Petrobras America] knew that the [Contract] had

been obtained by [Samsung’s] bribery of Padilha, no

orders could have been given honestly by [Petrobras

America ] for services under the [Contract] without

first making at the relevant date full disclosure of all

the material circumstances to [Pride], [Petrobras

America] could not have used or retained the rig,” or

“negotiated for or agreed to extend the term of the

[Contract].” (Id. ¶ 63). But Gee provides no authority

for this statement, and, on these facts, it is

unpersuasive.

Samsung attempts to show Petrobras America’s

contribution to the scheme by demonstrating its

knowledge of the scheme before it signed Amendment

No. 4 to the Assignment Agreement. (Docket Entry

No. 194 at 37 (arguing that, under English law,

“[w]hat matters is whether the late-comer [to the

scheme] knowingly acts in service of a common end, a

factual question which may be . . . inferred from [the

late-comer’s]

conduct,

knowledge,

and

circumstances”)). Samsung argues that “[Petrobras

America] knew of the material facts of the DS-5

bribery at least ten days [that is, August 17, 2015]

before it entered Amendment No. 4.” (Id. at 37).

Samsung also points to the audit report, dated May

18, 2015, in which Petrobras (not Petrobras America)

47a

“identif[ied]

irregularities

and

suspected

improprieties in the [Contract’s] procurement.” (Id. at

38). As evidence, Samsung points to the audit report,

the federal indictment delivered to PAI that

“mention[s] [Pride] DS-5,” (id. at 24), and “the

extensive public reporting . . . on the DS-5 bribery

investigation.” (Id. at 24 n.9).

Petrobras America disputes that Samsung can show

knowledge of the tainted contract before Petrobras

America entered into Amendment No. 4. (Docket

Entry No. 215 at 18–19).13 But even assuming that

Petrobras America had knowledge that the Contract

was tainted by bribery, the court finds little

significance in its continued performance under

Amendment No. 4. Samsung argues that the

amendment “prolonged” the bribery scheme; however,

the amendment neither prolonged the term of the fiveyear Contract nor diminished Petrobras America’s

obligations to Pride. Although the English-law

authorities make clear that Samsung need not show

that Petrobras America provided a high level of

Petrobras America argues that “Samsung cannot establish

that the Indictment was ever sent to or received by any person at

PAI responsible for approving Amendment No. 4.” (Docket Entry

No. 215 at 18). PAI argues that indictment was merely a

complaint and did not conclusively establish key facts

surrounding the alleged bribery, such as whether Pride itself was

involved. (Id.). PAI also argues that “[t]o the extent Samsung

relies on ‘extensive public reporting’ beginning in July 2015 to

establish PAI’s knowledge of the relevant facts,” Samsung’s

argument is “self-defeating . . . [because] if public reporting

sufficed to put PAI on notice of the relevant facts, it must follow

that Pride was on notice too.” (Id. at 19).

48a

assistance to the scheme, the record does not show any

assistance from Petrobras America with respect to

Pride’s injuries.

The question is whether Samsung can obtain

contribution from Petrobras America for Pride’s

injury: the difference between a tainted and untainted

drilling contract. It cannot. Perhaps Petrobras

America should have promptly notified Pride that the

Contract was potentially tainted. Perhaps it may be

held liable to Pride for not doing so. But Petrobras

America cannot be held liable in contribution to

Samsung on this record because the evidence does not

support finding that Petrobras America engaged in

“concerted action” with respect to Samsung’s bribery

scheme.

The undisputed facts do not support Petrobras

America’s liability in contribution to Samsung.

Conclusion

This case spans years. It involves transactions that

launched massive and expensive drill ships around

the world, made by companies participating in an

international industry that is central to modern life.

It presents difficult questions of American and

English law. Counsel have worked hard and long to

present their cases to the court, and they have done so

ably. It is perhaps anticlimactic for the court to find

that neither side can win the relief it seeks. The court

believes that this is nonetheless the correct outcome.

The court: (1) grants Samsung’s motion for summary

49a

judgment, (2) grants in part Petrobras America’s

motion for summary judgment with respect to

Samsung’s counterclaim, and (3) otherwise denies

Petrobras America’s motion for summary judgment.

Because the court’s opinion disposes of all the claims

in this case, final judgment will be entered by separate

order.

SIGNED on August 11, 2023, at Houston,

Texas.

_______________________________

Lee H. Rosenthal

United States District Judge

50a

APPENDIX C

18 USCS § 1962, Part 1 of 2

Current through Public Law 118-107, approved

November 21, 2024.

United States Code Service > TITLE 18. CRIMES

AND CRIMINAL PROCEDURE (§§ 1 — 6005) >

Part I. Crimes (Chs. 1 — 123) > CHAPTER 96.

Racketeer influenced and corrupt organizations

(§§ 1961 — 1990)

§ 1962. Prohibited activities

(a)

It shall be unlawful for any person who

has received any income derived, directly or

indirectly, from a pattern of racketeering

activity or through collection of an unlawful

debt in which such person has participated as a

principal within the meaning of section 2, title

18, United States Code [18 USCS § 2], to use or

invest, directly or indirectly, any part of such

income, or the proceeds of such income, in

acquisition of any interest in, or the

establishment or operation of, any enterprise

which is engaged in, or the activities of which

affect, interstate or foreign commerce. A

purchase of securities on the open market for

purposes of investment, and without the

intention of controlling or participating in the

control of the issuer, or of assisting another to

do so, shall not be unlawful under this

subsection if the securities of the issuer held by

51a

the purchaser, the members of his immediate

family, and his or their accomplices in any

pattern or racketeering activity or the collection

of an unlawful debt after such purchase do not

amount in the aggregate to one percent of the

outstanding securities of any one class, and do

not confer, either in law or in fact, the power to

elect one or more directors of the issuer.

(b)

It shall be unlawful for any person

through a pattern of racketeering activity or

through collection of an unlawful debt to

acquire or maintain, directly or indirectly, any

interest in or control of any enterprise which is

engaged in, or the activities of which affect,

interstate or foreign commerce.

(c)

It shall be unlawful for any person

employed by or associated with any enterprise

engaged in, or the activities of which affect,

interstate or foreign commerce, to conduct or

participate, directly or indirectly, in the conduct

of such enterprise’s affairs through a pattern of

racketeering activity or collection of unlawful

debt.

(d)

It shall be unlawful for any person to

conspire to violate any of the provisions of

subsection (a), (b), or (c) of this section.

52a

HISTORY:

Added Oct. 15, 1970, P.L. 91-452, Title IX, § 901(a), 84

Stat. 942; Nov. 18, 1988, P. L. 100-690, Title VII,

Subtitle B, § 7033, 102 Stat. 4398.

53a

APPENDIX D

18 USCS § 1964

Current through Public Law 118-107, approved

November 21, 2024.

United States Code Service > TITLE 18. CRIMES

AND CRIMINAL PROCEDURE (§§ 1 — 6005) >

Part I. Crimes (Chs. 1 — 123) > CHAPTER 96.

Racketeer influenced and corrupt organizations

(§§ 1961 — 1990)

§ 1964. Civil remedies

(a)

The district courts of the United States

shall have jurisdiction to prevent and restrain

violations of section 1962 of this chapter [18

USCS § 1962] by issuing appropriate orders,

including, but not limited to: ordering any

person to divest himself of any interest, direct

or indirect, in any enterprise; imposing

reasonable restrictions on the future activities

or investments of any person, including, but not

limited to, prohibiting any person from

engaging in the same type of endeavor as the

enterprise engaged in, the activities of which

affect interstate or foreign commerce; or

ordering dissolution or reorganization of any

enterprise, making due provision for the rights

of innocent persons.

(b)

The Attorney General may institute

proceedings under this section. Pending final

54a

determination thereof, the court may at any

time enter such restraining orders or

prohibitions, or take such other actions,

including the acceptance of satisfactory

performance bonds, as it shall deem proper.

(c)

Any person injured in his business or

property by reason of a violation of section 1962

of this chapter [18 USCS § 1962] may sue

therefor in any appropriate United States

district court and shall recover threefold the

damages he sustains and the cost of the suit,

including a reasonable attorney’s fee, except

that no person may rely upon any conduct that

would have been actionable as fraud in the

purchase or sale of securities to establish a

violation of section 1962 [18 USCS § 1962]. The

exception contained in the preceding sentence

does not apply to an action against any person

that is criminally convicted in connection with

the fraud, in which case the statute of

limitations shall start to run on the date on

which the conviction becomes final.

(d)

A final judgment or decree rendered in

favor of the United States in any criminal

proceeding brought by the United States under

this chapter [18 USCS §§ 1961 et seq.] shall

estop the defendant from denying the essential

allegations of the criminal offense in any

subsequent civil proceeding brought by the

United States.

55a

HISTORY:

Added Oct. 15, 1970, P. L. 91-452, Title IX, § 901(a),

84 Stat. 943; Nov. 8, 1984, P. L. 98-620, Title IV,

Subtitle A, § 402(24)(A), 98 Stat. 3359; Dec. 22, 1995,

P. L. 104-67, Title I, § 107, 109 Stat. 758.

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.