Amicus Curiae Brief — Animal Sci. Prods., Inc. v. Hebei Welcome Pharm. Co., 137 S. Ct. 2320 (2017) (No. 16-1220)

No. 16-1220

IN THE

Supreme Court of the Anited States

ANIMAL SCIENCE PRODUCTS, INC., et al.,

Petitioners,

Vv.

HEBEI WELCOME PHARMACEUTICAL Co. LTD., et ai.,

Respondents.

On Writ of Certiorari to the

United States Court of Appeals

for the Second Circuit

BRIEF FOR THE CHAMBER OF COMMERCE OF

THE UNITED STATES OF AMERICA AS AMICUS

CURIAE IN SUPPORT OF PETITIONERS

STEVEN P. LEHOTSKY LUKE A. SOBOTA

U.S. CHAMBER Counsel of Record

LITIGATION CENTER JAN PAULSSON

U.S. CHAMBER OF COMMERCE PHILIPP KOTLABA

1615 H Street NW KIMBERLY H. LARKIN

Washington, D.C. 20062 E JIN LEE

(202) 463-5337 THREE CROWNS LLP

3000 K Street NW, Suite 101

Counsel for the Chamber of :

Washington, D.C. 20007

Commerce of the United (202) 639-6500

States of America luke.sobota@

threecrownsllp.com

Counsel for Amicus Curiae

March 5, 2018

WILSON-EPES PRINTING Co., INC. — (202) 789-0096 — WasHiNGTON, D.C. 20002

TABLE OF CONTENTS

Page

TATE OF BUTTE ee vccccseessccscsrccnssssescessees ii

INTEREST OF AMICUS CURIAE.................0..4- 1

SUMMARY OF ARGUMENT ...................ccc0e0ees 2

EE pindennielddnicndstuninannckranccubstandenbenianibiindne 3

I. The Doctrine of International Comity in

EPH TRAE duicenncpsnennshanctidieniinetannabdagnenneanegitints 3

Il. Respondents’ Proposed Test Would Mate-

rially Alter the Doctrine of International

I taciencasiancntpeinsltnnincnndeideigycendindenstnanins 8

Ill. U.S. Courts Have Applied the Comity

Balancing Test in a Diverse Array of

Cases Involving Foreign Law................... 11

A. Cases Involving Questions of Foreign

Sovereign Immunity...................::00000 11

B. Enforcement of Foreign Arbitral

Awards Under the New York

i hcscssisintnisicsnnnancntnctisivensatersoincces 14

C. Enforcement of Foreign Judgments in

i IEEE ccsiceussionsdinsesistaunininssaisecpaaiiinicds 17

D. Discovery Requests Made Under 28

PGS Sb IPOD stcianctecedcedédtancatbdntionmnnsotinte 19

SR IID Sisctcnciateadonisasvoptasscinictnniiniscirauciein’ 22

(i)

il

TABLE OF AUTHORITIES

CASES Page(s)

Ackermann v. Levine,

788 F.2d 830 (2d Cir. 1986) ................0.008 15

Auer v. Robbins,

I I I Rc cciiisinuessietetiienmnaccdacactan 3

Banco Nacional de Cuba v. Sabbatino,

ee ee HI ee i crectbrcetscennenisvichinepseeoninss 6

Bank Melli Iran v. Pahlavi,

58 F.3d 1406 (9th Cir. 1995)..................... 18

Bank of Augusta v. Earle,

Be ee rit secstccceneressscastssevscencens 6

Bowles v. Seminole Rock & Sand Corp.,

ee ee Oe CE cab sikaenexdecensicécincecssnsionss 1

Chevron Corp. v. Donziger,

974 F. Supp. 2d 362 (S.D.N.Y. 2014)........ 17

Chevron U.S.A., Inc. v. Nat'l Res. Def.

Council,

Ne es I i iiccenttncecebecnnedinekinbieblionine 2

China Trade & Dev. Corp. v.

M.V. Choong Yong,

837 F.2d 33 (2d Cir. 1987) ...............:0:00008 5

Corporacion Mexicana De Mantenimiento

Integral, S. De R.L. De C.V. v.

Pemex-Exploracion Y Produccion,

832 F.3d 92 (2d Cir. 2016)........................ 15, 16

Daimler AG v. Bauman,

es is, Se ccicecenticniecdsvccccisccnscenes 5

Disconto Gesellschaft v. Umbreit,

En 7

ili

TABLE OF AUTHORITIES—Continued

Page(s)

Dole Food Co. v. Patrickson,

ee ee MI ai escrciistievcissdniinaceninenesiien 5

EEOC v. Arabian Am. Oil Corp.,

ge een 5

Emory v. Grenough,

ee ieiivcaiiceigtiienstinniidettiiibichaniesnenn 5

F. Hoffmann-La Roche Ltd. v. Empagran

BAM., G43 UB. BG CQIG4) 5.00000005005000000000002. 5

First Nat'l City Bank v. Banco Para el

Comercio Exterior de Cuba,

ee 12, 13

Garco Construction, Inc. v. Sec’y of the Army,

856 F.3d 938 (Fed. Cir. 2017)................... 1

Hilton v. Guyot,

gE passim

In re Maxwell Commce’n Corp.

93 F.3d 1036 (2d Cir. 1996)...................... 4

Intel Corp. v. Advanced Micro Devices, Inc.,

Be Si Ce i accreccscessinsenssnsitnsteonennes 6, 20, 21

Int'l Transactions, Ltd. v. Embotelladora

Agral Regiomontana, S.A. de CV,

347 F.3d 589 (5th Cir. 2003)..................... 17

Karaha Bodas Corp. v. Perusahaan

Pertambangan Minyak Dan

Gas Bumi Negara,

335 F.3d 357 (5th Cir. 2003)..................... 14

Manez Lopez v. Ford Motor Corp.,

470 F. Supp. 2d 917 (S.D. Ind. 2006) ....... 17, 18

iv

TABLE OF AUTHORITIES—Continued

Page(s)

Matter of Arbitration Between Chromalloy

Aeroservices, a Div. of Chromalloy Gas

Turbine Corp. & Arab Republic of Egypt,

939 F. Supp. 907 (D.D.C. 1996)................ 15

McCulloch v. Sociedad Nacional

de Marineros de Honduras,

ee I, He iiacariencntnecctctieninitonnninciccines 5

Oakey v. Bennett,

Be ee SE iinicinignerastinditiceticiicetninetsnonsics 6

Oetjen v. Central Leather Corp.,

us eee 6

Republic of Austria v. Altmann,

ee Es re Gi er teiscssincencsecicscnssncssdeeness 5

Royal & Sun All. Ins. Corp. of Can. v.

Century Int'l Arms, Inc.,

466 F.3d 88 (2d Cir. 2006) .............0...0.0... 5

Sanchez Osorio v. Dole Food Corp.,

665 F. Supp. 2d 1307 (S.D. Fla. 2009) ..... 18, 19

Second Russian Ins. Corp. v. Miller,

268 U.S. GES (19BG).........ccccccscccccccscesessseees 7

Societe Nationale Industrielle Aerospatiale

v. U.S. Dist. Ct. of S. Dist. of Iowa,

k,l 4,6,7,9

Tahan v. Hodgson,

662 F.2d 862 (D.C. Cir. 1981)................... 15

TermoRio S.A. E.S.P. v. Electranta S.P.,

487 F.3d 928 (D.C. Cir. 2007)................0.. 15

Vv

TABLE OF AUTHORITIES—Continued

Page(s)

Thai-Lao Lignite (Thailand) Co., Ltd. v.

Gov't of the Lao People’s

Democratic Republic,

864 F.3d 172 (2d Cir. 2017)... 15

United States v. McNab,

324 F.3d 1266 (11th Cir. 2003)................. )

United States v. Pink,

ee Os HE a ie rcctcescnnsssackcaseesvessesscess 7,8

Util. Air Regulatory Grp. v. EPA,

ee es Be eR iccnccnccosnsescsccstnncepseces 2

STATUTES

te Ob Se iciinnnisenansasnecensiiiscatesssreniessasenees 19, 20

ae Ae I aiittiininceerennncnidarnmenssedienesnem 20

Federal Arbitration Act,

Be eT a biccinitecnssncovmencnentecnanensincs 14

I PN crasicercescieetacekeslsihaaitsiatialiiigitchabingeidisteteibseseen 14

Foreign Sovereign Immunities Act,

28 U.S.C. § 1606 ef 00d. ......00000000scesccecceeeee 11

cussion 12

TREATIES AND CONVENTIONS

Convention on the Recognition and

Enforcement of Foreign Arbitral

Awards, June 10, 1958, 330 U.N.T.S. 38. 14

IN TN celia cideiinishsinsliateesidsilabuotehipietivetimiass 14

a ED scectidsvieducinccaabipetuntiiiesatinncnnties 14

vi

TABLE OF AUTHORITIES—Continued

FOREIGN STATUTES Page(s)

Law No. 793 (1960) (Cuba) ..............0cceceeeeees 12

Special Law 364 (2000) (Nicaragua)............ 18, 19

RULES

Be le a re LI inves dccinestsnscbitistingsenconbchuvunne 10, 19

COURT FILINGS

Brief for Commission of the European

Communities as Amicus Curiae, /ntel

Corp. v. Advanced Micro Devices, Inc.,

No. 02-572 (Nov. 15, 2002) ................000005 21

OTHER AUTHORITIES

Donald E. Childress III, Comity as Conflict:

Resituating International Comity as

Conflict of Laws, 44 U.C. DAVIS L. REV. 11

I inicivisi iad cesticeiasdiianidsniseaseaialbdaitisduiebstbdanbabliies 3,4

Ernest G. Lorenzen, Huber’s De Conflictu

Legum, 13 ILL. L. REV. 375 (1919)............ 4

Joel R. Paul, Comity in international Law,

32 HARV. INT'L L. J. 1 (1991)..............000000 6

Joel R. Paul, The Transformation of

International Comity, 71 L. & CONTEMP.

BI, IIE onc cniicdveucuacbconueicspnvaceeoes 4

JOSEPH STORY, COMMENTARIES ON THE

CONFLICT OF LAWS (4th ed. 1852)............. 5, 17

RESTATEMENT (THIRD) OF FOREIGN RELATIONS

RSI ERS EAL TOE ARE pe 17

ULRICH HUBER, DE JURE CIVITATIS (1694)... 4

vii

TABLE OF AUTHORITIES—Continued

Page(s)

World Bank Group, Worldwide Governance

Indicators: 1996-2016 (2018), http://nfo.

worldbank.org/governance/wgi/index.asp

ID inisccnsctnnsenctsiecanteminansediaiesicieidaiinatavioben 10

World Justice Project, Rule of Law Index:

2017-2018 (2018), https://worldjustice

project.org/sites/default/files/documents/

WJP_ROLI_ 2017-18 Online-Edition_0.

INTEREST OF AMICUS CURIAE'

The Chamber of Commerce of the United States of

America (Chamber) is the world’s largest business

federation. It represents 300,000 direct members and

indirectly represents the interests of more than three

million companies and professional organizations of

every size, in every industry, from every region of

the country. An important function of the Chamber is

to represent the interests of its members in matters

before Congress, the Executive Branch, and the courts.

The Chamber regularly files amicus curiae briefs in

cases raising issues of concern to the nation’s business

community, including with respect to its international

The Chamber’s members and the broader business

community have a substantial interest in the level of

judicial deference U.S. courts give to a sovereign’s

interpretation of its law — whether that sovereign is

domestic or foreign. The Chamber has repeatedly urged

this Court to reconsider, or at least substantially

cabin, Seminole Rock? (or Auer)’ deference granted to

a federal agency’s interpretation of its own regula-

tions. See, e.g., Garco Construction, Inc. v. Sec’y of

the Army, 856 F.3d 938 (Fed. Cir. 2017), petition for

cert. filed, (U.S. Aug. 7, 2017) (No. 17-225). And the

Chamber, as either a plaintiff, petitioner or an amicus

‘ No counsel for a party authored this brief in whole or part,

and no counsel or party made a monetary contribution to fund the

preparation or submission of this brief. No person other than

amicus curiae, its members, or its counsel made any monetary

contribution to its preparation and submission. The parties were

given timely notice and have consented to this filing.

® See Bowles v. Seminole Rock & Sand Corp., 325 U.S. 410

(1945).

* See Auer v. Robbins, 519 U.S. 452 (1997).

2

curiae, has frequently urged American courts to scruti-

nize, rather than reflexively defer to, federal agencies’

capacious interpretations of purportedly ambiguous

statutory text. See, e.g., Util. Air Regulatory Grp. v.

EPA, 1348. Ct. 2427 (2014).

This case, which presents the doctrine of interna-

tional comity, is a species of the genus. Although the

issue here, unlike in the Auver* and Chevron’® contexts,

arises in an antitrust dispute between private parties

and concerns a particular foreign sovereign’s inter-

pretation of its law, the Chamber is of the view that

free enterprise does not benefit from an uncritical and

reflexive deference by the courts to a sovereign

regulator’s interpretation of its own laws.

This may be particularly so where a foreign state

does not operate with regulatory impartiality regard-

ing state-owned enterprises and private actors, and

regularly provides “informal” or “non-binding” man-

dates that can influence the behavior of state-owned

and state-favored private enterprises, to the detriment

of U.S. business. This Court should be circumspect lest

deference to a foreign country's litigating positions

regarding the scope of its laws become carte blanche to

justify violations of U.S. law, for example by creating

a price cartel in pursuit of an industrial policy

objective.

SUMMARY OF ARGUMENT

This Court has long held that the doctrine of inter-

national comity requires a balancing of “international!

duty and convenience” with “the rights of its own

* See Auer v. Robbins, 519 U.S. 452 (1997).

® See Chevron U.SA., Inc. v. Nat'l Res. Def. Council, 467 U.S.

837 (1984).

3

citizens or of other persons who are under the

protections of its laws.” Hilton v. Guyot, 159 U.S. 113,

163-64 (1895). In seeking affirmance of the Second

Circuit’s decision below, Respondents propose a

standard of deference to foreign states that would

distort, if not eliminate, this balancing test. They

favor a “clear rule of conclusive deference” whenever a

foreign sovereign “formally” appears with an inter-

pretation of its domestic law that is not “obviously

unreasonable.” While the views of a foreign state are

entitled to substantial deference, affirmance of the

Second Circuit’s test would significantly distort the

traditional weighing of interests under the doctrine

of comity. The purpose of this amicus curiae brief

is to note the potential ramifications of Respondents’

reconception of the doctrine of comity on other areas of

U.S. law.

I. The Doctrine of International Comity in

U.S. Law

International comity is a multifarious concept.’ The

term has been deployed by courts and commentators

to reference both the deference afforded to foreign

sovereigns and the doctrine for determining the level

® Brief in Opposition at 20, 24.

’ See generally Donald E. Childress Ill, Comity as Conflict:

Resituating International Comity as Conflict of Laws, 44 U.C.

Davis L. REV. 11, 47-53 (2010) (describing three primary forms of

modern U.S. comity analyses); William S. Dodge, Jnternational

Comity in American Law, 115 COLUM. L. Rev. 2071, 2078-79

(2015) (surveying U.S. legal applications of comity and proposing

a similar tripartite interpretative taxonomy).

4

of such deference.* This submission concerns inter-

national comity in its second sense.

The doctrine of comity exists as a tool for U.S. judges

to mediate the legal issues that arise when a particu-

lar case implicates the sovereign interests of a foreign

state. The concept of comity traces to conflict-of-laws

jurisprudence of the iate Middle Ages.° Seventeenth-

century Dutch academic Ulrich Huber later opined

that comity calls on a state to recognize and enforce

rights created by other states, provided that such

recognition does not prejudice the state or its subjects.'°

* Joel R. Paul, The Transformation of International Comity, 71

L. & CONTEMP. PROBS. 19, 27 (2008) (“[Cjomity is offered [in

Hilton v. Guyot| both as a rule for the enforcement of foreign

judgments, and as an explanation for why foreign judgments

should be enforced. In other words, comity is both a legal doctrine

and also a justification for deferring to foreign judgments.”);

Donald E. Childress Ill, Comity as Conflict: Resituating

International Comity as Conflict of Laws, 44 U.C. DAvis L. REv.

11, 13-14 (2010) (“la] court may apply the laws of another country

by virtue of comity” but comity also “serves as a judicial canon”

and “jurisprudential concept”). See also Societe Nationale

Industrielle Aerospatiale v. U.S. Dist. Court of S. Dist. of Iowa,

482 U.S. 522, 555 (1987); In re Maxwell Commc'n Corp., 93 F.3d

1036, 1046 (2d Cir. 1996).

* Ernest G. Lorenzen, Huber’s De Conflictu Legum, 13 IL. L.

REV. 375, 391-92 (1919) (describing the recognition and enforce-

ment of foreign court decisions “as a natural duty imposed by

considerations of justice” in accordance with the Roman maxim

res judicata pro veritate accipitur).

ULRICH HupEeR, De JuRE Crvrratis, bk. 3, s. 4, c. 1, n. 42

(1694) (“Both should be enforced, on grounds of comity, for

reasons of utility and convenience, unless it would cause preju-

dice to the state or to its citizens.”). See also Ernest G. Lorenzen,

Huber’s De Conflictu Legum, 13 I. L. Rev. 375, 378 (1919). As

early as 1797, this Court acknowledged the doctrine of comity

among nations by explicit reference to Huber’s treatise. See

5

Relying on Huber, Justice Story wrote in his seminal

monograph Commentaries on the Conflict of Laws that

“there would be extreme difficulty in saying, that other

nations were bound to enforce laws, institutions, or

customs, of that nation, which were subversive of their

own morals, justice, or polity.”

In the United States, the doctrine of comity affects

a host of judicial doctrines, from foreign sovereign

immunity” and judicial abstention” to the presump-

tion against extraterritoriality'’* and approaches to

Emory v. Grenough, 3 U.S. 369 (1797) (“The following extract

from Huberus was translated for, and read in, this cause... .”).

" JOSEPH STORY, COMMENTARIES ON THE CONFLICT OF LAWS

§ 25 (4th ed. 1852).

" See, e.g., Republic of Austria v. Altmann, 541 U.S. 677, 696

(2004) (characterizing foreign sovereign immunity as a “gesture

of comity”) (citing Dole Food Co. v. Patrickson, 538 U.S. 468, 479

(2003)); Daimler AG v. Bauman, 134 8. Ct. 746, 763 (2014)

(noting “risks to international comity” posed by expansive view of

general jurisdiction).

See, e.g., Royal & Sun All. Ins. Corp. of Can. v. Century Intl

Arms, Inc., 466 F.3d 88, 92 (2d Cir. 2006) (applying “doctrine of

international comity abstention” in deferring to parallel proceed-

ing in foreign court); China Trade & Dev. Corp. v. M.V. Choong

Yong, 837 F.2d 33, 37 (2d Cir. 1987) (concluding that factors

favoring antisuit injunction for foreign parallel proceeding were

“not sufficient to overcome the restraint and caution required by

international comity”).

“ See, e.g., EEOC v. Arabian Am. Oil Corp., 499 U.S. 244, 248

(1991) (the presumption “serves to protect against unintended

clashes between our laws and those of other nations which could

result in international ¢’scord”) (citing McCulloch v. Sociedad

Nacional de Marineros de Honduras, 372 U.S. 10, 20-22 (1963));

F. Hoffmann-La Roche Ltd. v. Empagran S.A., 542 U.S. 155, 169

(2004) (noting that “principles of prescriptive comity” limit U.S.

antitrust law).

6

transnational discovery."° Even the application of

customary international law in U.S. courts implicates

notions of international comity.'®

Although the application of comity in a particular

case may implicate several different issues, the frame-

work for weighing those issues is well established. Per

Hilton v. Guyot, U.S. courts must balance “international

duty and convenience” against “the rights of its own

citizens or of other persons who are under the protec-

tions of its laws.” 159 U.S. 113, 163-64 (1895).'’ Both

considerations must be weighed against each other to

See, e.g., Societe Nationale Industrielle Aerospatiale v. U.S.

Dist. Court of 8. Dist. of lowa, 482 U.S. 522, 543-44 (1987) (noting

that the “concept of international comity” requires “par-

ticularized analysis” for discovery requests outside of the United

States for use in domestic courts); Intel Corp. v. Advanced Micro

Devices, Inc., 542 U.S. 241, 261 (2004) (“comity and parity

concerns may be important as touchstones” for discovery inside

the United States for use in foreign courts). Other instantiations

of international comity include conflict of laws, see Bank of

Augusta v. Earle, 38 U.S. 519, 589 (1839) (“[Tlhe laws of one

[country] will, by the comity of nations, be recognised and

executed in another... .”); and the ability of foreign sovereigns

to bring actions in U.S. courts see Banco Nacional de Cuba v.

Sabbatino, 376 U.S. 398, 408-09 (1964) (“Under principles of

comity governing this country’s relations with other nations,

sovereign states are allowed to sue in the courts of the United

States.”).

Oetjen v. Central Leather Corp., 246 U.S. 297, 302-04 (1918)

(noting that “principles of international law” apply in U.S. courts

and rest “at last upon the highest considerations of international

comity and expediency”).

’ See also Joel R. Paul, Comity in International Law, 32 HARv.

INT'L L. J. 1, 8-9 (1991) (noting that Hilton “is the most commonly

cited statement of comity in U.S. law”); Oakey v. Bennett, 52 U.S.

33 (1850) (“national comity does not require any government to

give effect to such assignment, when it shall impair the remedies

or lessen the securities of its own citizens”).

7

properly account for the novel, sensitive, and difficult

issues that often arise in cases involving transnational

litigation.

This Court has applied Hilton’s balancing exercise

for over a century to cases involving foreign legislative,

executive, or judicial authorities." This is seen in

United States v. Pink, 315 U.S. 203 (1942), which

Respondents cite in support of the Second Circuit's

decision. Brief in Opp. at 24. In Pink, this Court

delineated two questions: (i) whether the Russian

decree at issue was intended by its drafters to have

extraterritorial effect and (ii) whether the decree

should be granted extraterritorial effect as a matter of

U.S. law." Although the Pink Court accepted the

representations of the Soviet Government regarding

the first inquiry, it exercised independent judgment in

weighing the relevant interests at issue in respect of

the second, including in particular the views of the

Executive Branch. The Court found that the Russian

* Disconto Gesellschaft v. Umbreit, 208 U.S. 570, 578-79 (1908)

(noting that “international comity does not require the enforce-

ment of judgments” that would prejudice the rights of local

creditors); Second Russian Ins. Corp. v. Miller, 268 U.S. 552, 561

(1925) (finding that “adoption of foreign law by comity” would be

“much beyond its limits as at present defined” and finding “no

basis for the contention that the principle of comity would

require” the same); Societe Nationale Industrielle Aerospatiale v.

U.S. Dist. Court of S. Dist. of Iowa, 482 U.S. 522, 546 (1987)

(requiring courts to “take care to demonstrate due respect for . . .

any sovereign interest expressed by a foreign state” but declining

to “articulate specific rules to guide this delicate task of

adjudication”).

” Pink, 315 U.S. at 221 (1942) (“We hold that so far as its

intended effect is concerned the Russian decree embraced the

New York assets of the First Russian Insurance Co.... The

question of whether the decree should be given extraterritorial

effect is of course a distinct matter.”).

8

decree was a facet of a larger “transaction|| resulting

in an international compact between the two govern-

ments,” which established diplomatic relations and

settled liability claims between U.S. and Soviet nationals.

Pink, 315 U.S. at 223. The Court concluded that the

decree should be granted extraterritorial effect because

“lilt was the judgment of the [U.S.| political depart-

ment that full recognition of the Soviet government

required settlement of all outstanding problems includ-

ing the claims of our nationals,” and “|wJe would usurp

the executive function if we held that that decision was

not final and conclusive in the courts.” Jd. at 230. The

Pink Court thus assessed all relevant circumstances

before recognizing the extraterritorial effect of the

Russian decree. Contrary to Respondents’ assertion,

the Soviet Government’s interpretation of its decree

was an element, but not conclusive, of the question

presented in Pink.

Il. Respondents’ Proposed Test Would Mate-

rially Alter the Doctrine of International

Comity

The Second Circuit’s decision cites Hilton v. Guyot

but then applies that decision in a way that effectively

reduces its balancing test to a vanishing point. Pet.

App. 13a. In pressing for affirmance in this Court,

Respondents propose a test under which a foreign

state’s interpretation of its own law is given “conclu-

sive” deference. Ascribing such weight to a single

consideration is irreconcilable with the holistic balanc-

ing found in this Court’s jurisprudence. It is settled

law that a U.S. court should give substantial weight to

the statement of a foreign government concerning its

9

own law.”° But, as the United States argued at the

certiorari stage, this should not preclude a U.S. court

from considering “all relevant circumstances,” includ-

ing the “statement’s clarity, thoroughness, and support;

its context and purpose; the authority of the entity

making it; its consistency with past statements; and

any other corroborating and contradictory evidence.”

Invitation Brief for the United States as Amicus

Curiae at 7-8.

Respondents argue that their position “allows courts

to more capably and credibly balance the competing

sovereign interests at stake.” Brief in Opp. at 24.

But under Respondents’ “clear rule of conclusive

deference,” the foreign state’s position would have a

multiplier effect on the remainder of the comity

analysis, which, when coupled with the substantial

deference already afforded foreign sovereigns, could

bring the traditional balancing under the doctrine of

comity into disequilibrium.

This would be a clear departure | om the articula-

tion of comity in Hilton and its progeny, and would

materially restrict the scope of substantive review

that U.S. courts typically exercise when applying the

doctrine of comity.

As elaborated in Part III infra, it is not uncommon

for a foreign state to have a direct or indirect interest

in the outcome of U.S. litigation. In such cases, the

*© See, e.g., Societe Nationale Industrielle Aerospatiale v. U.S.

Dist. Ct. of S. Dist. of Iowa, 482 U.S. 522, 543 n.27 (1987) (evoking

“the spirit of cooperation in which a domestic tribunal approaches

the resolution of cases touching the laws and interests of other

sovereign states.”); United States v. McNab, 324 F.3d 1266, 1241

(11th Cir. 2003) (noting that “|a])mong the most logical sources for

[a] court to look to in its determination of foreign law are the

\relevant] foreign officials”).

10

post litem motam statement of the foreign sovereign

should be measured against “any” other “relevant

material or source,” as provided in Federal Rule of

Civil Procedure 44.1. There is no inconsistency

between affording deference to a foreign sovereign and

considering the totality of the circumstances — a

representation by a foreign state does not render other

materials and sources immaterial.”'

In particular, Respondents’ proposed test would

give undue weight to the method by which a foreign

sovereign expresses its views, with states receiving

special, or even dispositive, deference when they “formally

appear” in a pending U.S. case. Brief in Opp. at 24.

Although a foreign state’s “direct participation” signals

the importance of that case to that state, the form of

the state’s participation should not negate full con-

sideration of all relevant factors. The views of a

foreign state should always be taken into account,

but the particular means by which those views are

expressed should not alter the substantive balancing

of the array of considerations bearing upon a particu-

lar transnational dispute. Indeed, such a rule could

*! The weight afforded a particular foreign state’s submission

might include consideration of the reliability of the application of

the rule of law in that jurisdiction. For example, only 97 of 215

countries and territories enjoyed a positive score (on a scale of

-2.5 to 2.5) in the 2016 World Bank governance indicator for “rule

of law.” See WORLD BANK GROUP, WORLDWIDE GOVERNANCE

INDICATORS: 1996-2016 (2018), http//info.worldbank.org/govern

ance/wgi/index.aspx#home. According to the World Justice

Project’s 2017 Rule of Law Index, 75 of 113 countries score below

0.60 (on a 1.00 scale) in terms of their provision of “civil justice,”

with 42 of those countries scoring below 0.50. See WORLD JUSTICE

PROJECT, RULE OF LAW INDEX: 2017-2018 (2018), https://world

justiceproject.org/sites/default/files/documents/WJP_ROLI_2017

18_Online-Edition_0.pdf.

11

skew the application of the doctrine of comity in future

cases, because the number of “formal representations”

by foreign states would only increase if they received

“conclusive deference.” This could give foreign sover-

eigns undue influence over adversarial proceedings in

which they have an interest.

Ill. U.S. Courts Have Applied the Comity

Balancing Test in a Diverse Array of Cases

Involving Foreign Law

Although presented in the specific context of

whether there is a “true conflict” between U.S. and

foreign law on competition, the case at hand presents

the broader question of whether U.S. courts under the

doctrine of international comity must afford “conclu-

sive deference whenever a foreign sovereign formally

appears with an interpretation of its own domestic law

that is not obviously unreasonable.”” Respondents’

proposed test would, if accepted, threaten to upend

other areas of U.S. law where the doctrine of comity

obtains. As the cases below illustrate, the holistic

balancing found in these other areas of U.S. law would

be materially altered under Respondents’ reconception

of the doctrine of comity.

A. Cases Involving Questions of Foreign

Sovereign Immunity

The doctrine of comity is manifested in U.S. juris-

prudence on the liability of foreign states under the

exceptions enumerated in the Foreign Sovereign

Immunities Act (FSIA). See 28 U.S.C. § 1605 et seq.

Under the FSIA, U.S. courts may exercise jurisdic-

tion over foreign sovereigns and their agencies and

* Brief in Opposition at 24.

12

instrumentalities with respect to certain commercial

activity. 28 U.S.C. § 1605(a)(2). In determining whether

a foreign entity should be considered a state instru-

mentality, U.S. courts consider — but do not conclusively

defer to — foreign laws bearing upon its legal status.

First Nat'l City Bank v. Banco Para el Comercio

Exterior de Cuba (Bancec) concerned a letter of credit

that Banco Para el Comercio Exterior de Cuba (Bancec),

a Cuban bank, received in 1960 from Citibank, a U.S.

banking and financial services company. 462 U.S. 611,

614 (1983). Days after Bancec sought to collect on

this letter, all of Citibank’s assets were seized and

nationalized without compensation by the Cuban

Government. Jd. When Bancec sought to enforce the

letter of credit in U.S. district court, Citibank counter-

claimed to obtain a set off reflecting the value of its

nationalized assets, for which it had not received any

compensation. Jd. at 614-15. This counterclaim was

predicated on the assertion that Bancec was the alter

ego of the Cuban Government, and was thus liable to

provide compensation for the expropriation. Jd. at

617-19.

As the Bancec Court acknowledged, “the law of the

state of incorporation normally determines issues

relating to the internal affairs of a corporation.” 462

U.S. at 621. Bancec was established under Cuban law

as “an official autonomous credit institution for foreign

trade with full juridical capacity of its own.” Id. at 613

(quoting Law No. 793, Art. 1 (1960) (Cuba)). During

the district court proceedings, a former Cuban

government attorney confirmed that “under Cuban

*° At the time of the expropriation, Citibank was named First

National City Bank. See Bancec, 426 U.S. at 613.

13

law Bancec had independent legal status.” Jd. at 616,

fn. 3.

The Bancec Court nevertheless declined to defer to

Cuban law. As Bancec had effectively been subsumed

by the Cuban Ministry of Trade, any award in Bancec’s

favor would accrue to the Cuban Government. 462

U.S. at 615-16, 630-32. Applying Cuban law would

thus have allowed “the real beneficiary of such an

action, the Government of the Republic of Cuba, to

obtain relief in our courts that it could not obtain in

its own right without waiving its sovereign immunity

and answering for the seizure of Citibank’s assets.” Id.

at 632. The Court observed that “givling] conclusive

effect to the law of the chartering state in determining

whether the separate juridical status of its instru-

mentality should be respected would permit thlat]

state to violate with impunity the rights of third

parties under international law while effectively insu-

lating itself from liability in foreign courts.” Jd. at 622.

The Bancec Court underlined that its decision was

the result of its balancing of competing equities which

“announcel|d] no mechanical formula for determining

the circumstances under which the normally separate

juridical status of a government instrumentality is to

be disregarded.” 462 U.S. at 633. Instead, it was “the

product of the application of internationally recognized

equitable principles to avoid the injustice that would

result from permitting a foreign state to reap the

benefits of our courts while avoiding the obligations of

international law.” Id. at 633-34.

If applied in the FSIA context, Respondents’ position

might establish the very “mechanical formula” that

Bancec rejects, which could allow foreign States to

“insulatile] [themselves] from liability in foreign

courts.” Bancec, 462 U.S. at 622.

14

B. Enforcement of Foreign Arbitral Awards

Under the New York Convention

The doctrine of international comity looms large in

the jurisprudence of U.S. courts on whether to enforce

foreign arbitral awards that have been set aside at the

seat of arbitration by foreign courts applying their own

domestic law.

The enforcement of foreign arbitral awards is gov-

erned by the Convention on the Recognition and

Enforcement of Foreign Arbitral Awards, June 10,

1958, 330 U.N.T.S. 38 (New York Convention). The

New York Convention is implemented in the United

States by Chapter Two of the Federal Arbitration Act.

9 U.S.C. §§ 201-08. Article III of the New York

Convention sets out the conditions under which U.S.

courts are to “recognize arbitral awards as binding

and enfrrce them.” New York Convention, Art. III,

9 U.S.C. § 207. In particular, courts may refuse

recognition and enforcement where the award “has

been set aside or suspended by a competent authority

of the country in which, or under the law of which, that

award was made.” New York Convention, Art. V(1)(e).

The New York Convention does not mandate

that the court in which enforcement is sought defer to

the decision of the court where the arbitration was

seated; this is left to the discretion of the enforcement

court. See, e.g., Karaha Bodas Corp. v. Perusahaan

Pertambangan Minyak Dan Gas Bumi Negara, 335

F.3d 357, 369 (5th Cir. 2003) (“As an enforcement

jurisdiction, our courts have discretion under the

Convention to enforce an award despite annulment

in another country, and have exercised that discretion

in the past.”). In exercising this discretion, U.S. courts

“weigh|] notions of ‘public policy’ in determining whether

to credit the judgment of a court in the primary State

15

vacating an arbitration award.” TermoRio S.A. E.S.P.

v. Electranta S.P. (TermoRio), 487 F.3d 928, 938 (D.C.

Cir. 2007). This entails balancing the deference owed

to the foreign judgment setting aside the arbitral

award and the interests of the party seeking enforce-

ment of the arbitral award. Ackermann v. Levine

(Ackermann), 788 F.2d 830, 842 (2d Cir. 1986)

(balancing (1) the res judicata of a foreign judgment

and (2) concerns about fairness to litigants).

Consistent with the substantial deference afforded

foreign sovereigns, arbitral awards set aside at the

seat of arbitration are presumptively unenforceable.

See TermoRio, 487 F.3d 928, 936 (D.C. Cir. 2007) (“an

arbitration award does not exist to be enforced in other

Contracting States if it has been lawfully ‘set aside’ by

a competent authority in the State in which the award

was made”). This presumption recently led the Second

Circuit to revoke a decision enforcing an arbitral

award after it was subsequently set aside by a court at

the seat of arbitration. Thai-Lao I ignite (Thailand)

Corp., Ltd. v. Gov’t of the Lao People’s Democratic

Republic, 864 F.3d 172, 182-89 (2d Cir. 2017).

In exceptional circumstances, however, U.S. courts

will enforce an award that was set aside at the seat of

arbitration, where deference to the foreign court's

decision would be “repugnant to fundamental notions

of what is decent and just.” Corporacion Mexicana De

Mantenimiento Integral, S. De R.L. De C.V. v. Pemex-

ion Y Produccion (Pemex), 832 F.3d 92, 106

(2d Cir. 2016) (quoting Ackermann, 788 F.2d 830, 837

(2d Cir. 1986) and Tahan v. Hodgson, 662 F.2d 862,

864 (D.C. Cir. 1981)); see also Matter of Arbitration

Between Chromalloy Aeroservices, a Div. of Chromalloy

Gas Turbine Corp. & Arab Republic of Egypt, 939 F.

Supp. 907 (D.D.C. 1996).

16

Each case is assessed on its specific facts. In Pemex,

for instance, the Eleventh Collegiate Court in Mexico

set aside an arbitral award against an instrumentality

of the Mexican Government on the ground that the

instrumentality could not be compelled to arbitrate.

In so holding, the Mexican court cited a Mexican law

that had been enacted after the arbitration had com-

menced. 832 F.3d 92, 99 (2d Cir. 2016).

The Second Circuit refused to defer to the Mexican

annulment. First, the Second Circuit held that defer-

ring to the Mexican annulment of an arbitral would

give effect to a “twelfth-hour invocation of sovereign

immunity” that “shatters [the petitioner’s|] investment-

backed expectation in contracting, thereby impairing

one of the core aims of contract law.” Pemex, 832 F.3d.

at 108. Second, the Court opined that “(gliving effect

to the nullification would likewise impair the closely-

related concept of avoiding retroactive application of

laws.” Id. Third, the Court held that “|t)he imperative

of having cases heard — somewhere — is firmly

embedded in legal doctrine,” and recognizing the

annulment would leave Petitioners without a “sure

forum in which to bring its contract claims.” Jd. at 109.

Fourth, recognizing the annulment would give effect

to “a taking of private property without compensation,”

which “would be an unconstitutional taking” in the

United States. Jd. at 110.

Respondents’ proposal for a “clear rule” in favor of a

foreign sovereign’s interpretation of its own law is

difficult to reconcile with the discretion the New York

Convention affords enforcement courts to recognize

arbitral awards that have been set aside at the seat of

arbitration.

17

C. Enforcement of Foreign Judgments in

U.S. Courts

The doctrine of international comity is integrated

into the jurisprudence of U.S. courts regarding the

enforcement of foreign judgments. Generally, “a final

judgment of a court of a foreign state .. . is entitlea

to recognition in courts in the United States.”

RESTATEMENT (THIRD) OF FOREIGN RELATIONS LAW

§ 481(1) (1987). However, in the absence —

treaty commitments, “(n]o sovereign is bound .

pene tage ne Dm ay hn nee ee Po

the tribunals of another State.” Hilton v. Guyot, 159

U.S. at 116. A decision to recognize a foreign judgment

necessarily involves a balancing exercise, as it

“depend(s] on a variety of circumstances which cannot

be reduced to any certain rule.” Jd. at 164 (quoting

STORY, COMMENTARIES ON THE CONFLICT OF LAWS at

§ 28).

Courts in the United States have declined to

recognize foreign judgments in instances where the

proceedings failed to provide basic due process or

otherwise violated public policy.“ For example, in

™ See, ¢.g., RESTATEMENT (THIRD) OF FOREIGN RELATIONS LAW

§ 482 (1987) (setting out grounds for non-enforcement of foreign

judgments); Hilton v. Guyot, 159 U. 8. 113, 167 (1895) (“Every

foreign judgment, of whatever nature, in order to be entitled to

any effect, must have been rendered by a court having jurisdic-

tion of the cause, and upon regular proceedings, and due notice.”),

Int'l Transactions, Ltd. v. Embotelladora Agral Regiomontana,

S.A. de CV, 347 F.3d 589, 594 (5th Cir. 2003) (“Notice is an

element of our notion of due process and the United States wil!

not enforce a judgment obtained without the bare minimum

requirements of notice.”); Chevron Corp. v. Donziger, 974 F. Supp.

2d 362, 608-09 (S.D.N.Y. 2014) (denying enforcement

was procured through fraud and

where

judgment ); Manez

Lopez v. Ford Motor Corp., 470 F. Supp. 2d 917 (S.D. Ind. 2006)

18

Sanchez Osorio v. Dole Food Corp., 665 F. Supp. 2d

1307 (S.D. Fla. 2009; affd sub nom Osorio v. Dow

Chemical Corp., 635 F.3d 1277 (11th Cir. 2011))

(Osorio), the district court declined to enforce a

judgment by a Nicaraguan trial court against several

agricultural and chemical companies pursuant to

Special Law 364, a Nicaraguan law specially

regulating the procedures for lawsuits pertaining to

Id. at 1311-12. This judgment was part of a series of

cases brought under Special Law 364, which

collectively resulted in judgments of over US$2 billion.

665 F. Supp. 2d. at 1312.

The district court determined that Special Law 364

presented a number of concerns. Among other things,

it established an irrefutable presumption that DBCP

was the cause of plaintiffs’ sterility. Osorio, 665 F.

Supp. 2d at 1314 (citing Special Law 364, Art. 9), 1327

-29. It also provided the parties only eight days to

submit evidence, evincing in the district court’s view a

“clear intent ... to unfairly fast track these substantia!

and complex cases, and thereby deny DBCP defendants

sufficient time to present an adequate defense.” Id. at

1340.

In particular, the district court was presented with

divergent conclusions from the Nicaraguan Supreme

Court and the Nicaraguan trial court regarding the

constitutionality of the jurisdictional provisions in

Special Law 364. Osorio, 665 F. Supp. 2d at 1324-26.

The district court noted that it “had broad discretion

(refusing recognition of foreign judgment procured by fraud);

Bank Melli Iran v. Pahlavi, 58 F.3d 1406 (9th Cir. 1995)

(generalized proof of systemic due process concerns sufficient to

refuse recognition of foreign judgment).

19

to consider ‘any relevant material or source, including

testimony’ in determining foreign law.” /d. at 1322,

1326 (quoting Fed. R. Civ. P. 44.1). It thereby

exercised its independent judgment to conclude that,

under the Nicaraguan Supreme Court’s decision, there

was no jurisdiction over the judgment debtors. /d. at

1326.

The district court also denied enforcement of the

Nicaraguan trial court’s judgment on public policy

grounds, as Special Law 364 was found to unfairly

a “a narrowly defined group of foreign defendants

and subject them to discriminatory provisions that

dlid] not apply to domestic defendants|.|” Osorio, 665

F. Supp. 2d at 1336. The court found that this

offended the general principle of equality before the

law that is “basic to any definition of due process and

fair play.” Id. at 1341-42. In reaching its conclusions,

the district court considered the totality of the

circumstances, including contradictory interpreta-

tions of Nicaraguan law. Id.

Respondents’ theory of conclusive deference to a

foreign state’s interpretation of its own laws is in

tension with the decisions of U.S. courts refusing to

recognize foreign judgments that offend minimal

standards of due process or violate public policy.

D. Discovery Requests Made Under 28

U.S.C. § 1782

The doctrine of comity also finds expression in the

discretion accorded U.S. district courts to grant discov-

ery requests in aid of a foreign or international

tribunal under 28 U.S.C. § 1782. District courts

consider multiple factors when deciding whether to

grant section 1782 discovery requests.

20

This Court’s judgment in Intel Corp. v. Advanced

Micro Devices, Inc. represents the clearest judicial

statement on how district courts should approach

section 1782 discovery requests. 542 U.S. 241, 252

(2004). It establishes a discretionary four-part test

under which district courts consider a number of

factors bearing upon whether to grant section 1782

discovery.”

One of the issues presented in Jntel was whether

section 1782 imposes a foreign-discoverability rule,

which would prevent a U.S. court from ordering

production of documents that the applicant could not

obtain “if they were located in the foreign jurisdiction.”

542 U.S. at 259-60. The Jntel Court concluded that the

documents need not be discoverable in the foreign

jurisdiction, explaining that “|w|hile comity and parity

concerns may be important as touchstones for a

district court’s exercise of discretion in particular

cases, they do not permit our insertion of a generally

applicable foreign-discoverability rule into the text of

§ 1782(a).” Id. at 260-61.

Given the hortatory aim of section 1782 of

“encouraging foreign countries by example to provide

* Intel, 542 U.S. at 264-65 (noting that a district court's

discretion as to whether to grant a section 1782 application

should be guided by four factors: (1) whether the material sought

is within the foreign tribunal’s jurisdictional reach and thus

accessible absent section 1782 aid; (2) the nature of the foreign

tribunal, the character of the proceedings underway abroad, and

the receptivity of the foreign government or the court or agency

abroad to U.S. federal-court jurisdictional assistance; (3) whether

the section 1782 request conceals an attempt to circumvent

foreign proof-gathering limits or other policies of a foreign

country or the United States; (4) whether the request is unduly

intrusive or burdensome).

21

similar assistance to |U.S.| courts," the /ntel Court

determined that the receptivity of the foreign court to

the discovery provided by U.S. court could not dictate

the inquiry. In particular the Court did not give

conclusive weight to the amicus curiae brief of the

European Commission, the putative beneficiary of the

section 1782 application in that case, which opposed

U.S. discovery on the ground that a “private

complainant lacks any authority to obtain discovery of

business secrets and commercial information” under

European Union law. 542 U.S. at 272 (citing Brief for

Commission of the European Communities as Amicus

Curiue at 13, n. 15.).

The Second Circuit’s understanding that comity

requires “conclusive” deference to the formal view of a

foreign sovereign sits uneasily with the /ntel Court’s

determination that the non-discoverability of docu-

ments as a matter of foreign law does not control a

district court’s analysis as to whether discovery should

be allowed under section 1782.

” * *

The doctrine of international comity requires sub-

stantial deference to the interests of foreign states

along with consideration of the interests of the United

States and those seeking the protection of its laws.

The test applied by the Second Circuit below and advo-

cated by Respondents in this Court threatens to upset

this balance, with potentially undesirable consequences

for other areas of U.S. law.

* Intel, 542 U.S. at 252.

22

CONCLUSION

For the foregoing reasons, the Chamber respectfully

requests that this Court reverse the judgment of the

Second Circuit below.

Respectfully submitted,

STEVEN P. LEHOTSKY LUKE A. SOBOTA

U.S. CHAMBER Counsel of Record

LITIGATION CENTER JAN PAULSSON

U.S. CHAMBER OF COMMERCE PHILIPP KOTLABA

1615 H Street NW KIMBERLY H. LARKIN

Washington, D.C. 0062 E JIN LEE

(202) 463-5337 THREE CROWNS LLP

3000 K Street NW, Suite 101

Counsel for the Chamber of <

Washington, D.C. 20007

Commerce of the United (202) 639-6500

States of America arenas oar

Counsel for Amicus Curiae

March 5, 2018