Petition for Writ of Certiorari — Ricoh Electronics, Inc. v. Haluck

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OFFICE ir tithe © Eek

IN THE

Supreme Court of the United States

RICOH ELECTRONICS, INC.,

Petitioners,

V.

JAMES HALUCK and MICHAEL LITTON,

Respondents.

On Petition For Writ Of Certiorari

To The Court of Appeal, Fourth Appellate District, Division

Three, INTHE SUPREME COURT OF CALIFORNIA

PETITION FOR WRIT OF CERTIORARI

Daniel J. Callahan

Konrad L. Trope

Counsel of Record

CALLAHAN & BLAINE, APLC

3 Hutton Centre Drive, Suite 900

Santa Ana, California 92707

(714) 241-4444

(714) 241-4445 (facsimile)

Counsel for Petitioner

No.

IN THE

Supreme Court of the United States

RICOH ELECTRONICS, INC.,

Petitioners,

Vv.

JAMES HALUCK and MICHAEL LITTON,

Respondents.

On Petition For Writ Of Certiorari

To The Court of Appeal, Fourth Appellate District, Division

Three, IN THE SUPREME COURT OF CALIFORNIA

PETITION FOR WRIT OF CERTIORARI

Daniel J. Callahan

Konrad L. Trope

Counsel of Record

CALLAHAN & BLAINE, APLC

3 Hutton Centre Drive, Suite 900

Santa Ana, California 92707

(714) 241-4444

(714) 241-4445 (facsimile)

Counsel for Petitioner

QUESTIONS PRESENTED

1.Whether the Superior Court for the State of California erred as a

matter of law, in denying Petitioner’s motion for summary judgment

whereby Petitioner, as a subsidiary of a foreign-based corporation,

sought to invoke the rights of its parent corporation provided for

under the U.S.-Japan Friendship, Commerce, and Navigation treaty

and thereby violate the Supremacy Clause of the United States

Constitution found at Article VI, Clause 2.

2.Whether the Superior Court for the State of California erred in

rejecting, as a matter of law, Petitioner’s defense to Respondent’s

claim for discrimination by rejecting Petitioner’s invocation of the

U.S.-Japan Friendship, Commerce, and Navigation Treaty and

thereby violate Article II, Section 2, Clause 2 of the United States

Constitution which provides that the President “shall have the

Power, by and with the Advice and Consent of the Senate to make

Treaties provided two thirds of the Senator’s present concur. . .”

3.Whether the Superior Court for the State of California erred as a

matter of law, in denying Petitioner’s motion for summary judgment

whereby Petitioner, as a subsidiary of a foreign-based corporation,

may invoke the rights of its parent corporation provided for under the

U.S.-Japan Friendship, Commerce, and Navigation treaty and

thereby violate Article I, Section 8, Clause 3 of the United States

Constitution which provides that the Congress shall have the power

to “regulate commerce with foreign nations, and among the several

states...”

tie

PARTIES TO THE PROCEEDING IN THE COURT BELOW

AND STATEMENT PURSUANT TO RULE 29.6

ra

Ricoh Electronics, Inc., a California corporation,

(“Ricoh-USA”), a wholly-owned subsidiary of Ricoh

Company, Inc., a corporation organized and existing

under the laws of the State of New Jersey , and which ~

is a wholly- owned subsidiary of Ricoh Company,

Ltd. (“Ricoh-Japan”), a corporation organized and

existing under the laws of Japan;

Larry Vaught, a resident of the Siate of Georgia;

Houssam El Jurdi, a citizen of the United States;

Yoshihiro Nomura, a citizen of Japan;

Haruo Uesaka, a resident of the State of Georgia;

Yoji Ide, a citizen of Japan,

Yasuaki Muramatsu, a citizen of Japan,

Michael A. Litton (“Litton”), an individual residing in

California; and |

James Haluck, an individual residing in California.

-iii-

i |

TABLE OF CONTENTS

L CRENIOING BELOW occ cccccccccccccccccccecsccoesess 1

ME, FURRTBIIIC TION 0 occ cticcccccscvccesccesccasceccsece 2

Ii. CONSTITUTIONAL PROVISIONS AND STATUTES

NVOQUVED 6.0. chai eee 6

IV. STATEMENT OF THE CASE............2--.00000e0: 7

A. nile ciiwikinaiiwoeatinees 7

B. Facts and Procedural History ................. 11

V. REASONS FOR GRANTING THE PETITION ........... 16

A. There Is a Reasonable Probability That at Least

Four Members of this Court Would Conclude

That this Case Warrants Plenary Consideration .. 16

B. Petitioners Are Likely to Prevail on the Merits ... 17

1. Respondents’ Claims for Discrimination

are Barred by the U.S.-Japan FCN

2. The Alleged Discrimination Against

Respondent Is Ricoh-USA-Japan‘s

Temporary Assignment to Ricoh-USA

iv

of Japanese Citizens as Executives and

Technical Experts in Accordance with

the U.S.-Japan FCN Treaty ............ 18

3. As a Subsidiary of Ricoh-Japan,

Ricoh-USA May Invoke the Rights of

its Parent Provided for Under the

U.S.-Japan FCN Treaty ...........-++. 22

4. Ricoh-USA Has Third Party Standing

to Invoke the Rights of Ricoh-Japan

Under the Treaty .......ccscccccccces 24

c Petitioner Will Suffer Irreparable Harm from the

Denial of Its Petition for Certiorari and the

Balance of the Equities Clearly Favors Issuance

D. In the Absence of a Writ of Certiorari Issuing

from U.S. Supreme Court, U.S-based Subsidiaries

of Japanese Corporations and U.S. Employees

Face Eminent and Irreparable Injury ........... 28

HK, COINCITIIN ccc ccccccsccccssecsesscescescasecss 30

Cases

nnett v. Total Minatom

138 F. 3d 1053 (5 Cir. 1998) .............05. 15, 20,

x Br in v.

420 U.S. 469 (1975)

m n Vv. lle Con

n

Fee a GREED Shh ib ce cbccdcesccsrcess

rv. im

290 U.S. 276 (1933)

Fortino v. ar

950 F.2d 389, 392 (7th Cir. 1991) ......... 10, 14, 21,

odyear, Atomi Vv,

ller

486 U.S. 174, 178-180 (1988) ..........ceeceeeeecees

e v. Riggs

133 U.S. 258 (1890)

Jordon v. Tashiro,

278 U.S. 123 (1928)

ons

|

fee ee eee eee ewe eee eee eeewneeeeanenee

Ki v. Hotel Ni

ite Fae |e EP E rrr or Te 14

Kolovret v. Oregon,

366 UB. 167 CISGA) occ ccc c casccctaervosvsccoenes 29

MacNamara vy. Korean Airlines

863 F. 2d 1135, 1144-45 (3d Cir. 1988).. 10, 12, 14, 20, 21

Mille Lacs Band of Chippewa Indians v. Minnesota,

864 F. Supp. 102, 105 (1994) ....... cece eee e ee eeee 27

Nielsen v. Johnson,

Papaila v. Uniden America Corp.

S17, 36 SA, S35." Cee, 1999) oan c ec ccconas 15, 21,23,24

Republic Natural Gas Co. v. Oklahoma,

FORTIS, Ge, GEA occ bn tcccccasaseacisesaneeane 3

Singleton v. Wulff,

MISUSE. TOG, LES CISIS) once ccc ccccvccsavasecsess 25

Spiess v. C. Itoh imple Co.

643 F. 2d 353, 358-361 & N.2 (5"cir. 1979) ....... ae

vii

Sumitomo Shoji America, Inc. v. Avagliano,

457 U.S. 176, 189, 102 S.Ct. 2374 (1982) ... 16, 19, 22, 23

United States v. Michigan,

508 F. Supp. 480, 491(D. Mich. 1980) ............... 26

Wickes v. Olympic Airways,

745 F. 2d 363, 367-368 (6" Cir. 1984) ............... 20

tatute

California Code of Civil Procedure § 437(c)(g) .........446. ye

California Government Code § 12940 ....... ccc cece eee tou

Cr LA GO BOTS nhc hie cdn eens idan desad bakes 7

Ek ie | | SPPeePePer ory ere e eres ree rite. 20

Be rn BF AMPIO 6 ih ce sawp ne ene as kee eeae see seuee 2

Se i a Ie 5 ei 89 es 549 1584 4-5

Other Authority

rtiene TT, Chae 2, UB COMM. kn cn cnccsaccvevssin sos ee

Article Ill, Section 2, Clause 3, U.S. Const. .......0.ce eevee +

Article VI, Clause 2, Supremacy Clause, U.S. Const. ........... 5

Art. IT, U.S.-France FCN Treaty, 11 U.S.T 2398 (1959) ........ 17

Vili

Article I of the U.S.-Japan FCN Treaty, 4 U.S.T. 2063 (1953) ... 17

Article VIII(1) of U.S.-Japan FCN Treaty .....+++++2e0eees 19

Art II, U.S.-Korea FCN Treaty, 8 U.S.T 2217 (1956) ....++++++: 20

Treaty of Friendship, Commerce and Navigation, April 2, 1953,

U.S.-Japan, 4 U.S.T. 2063, T.LA.S. No. 2863 ......--e seers 18

US Gam Ch. B. IOGG) 2 occ cc cncdacencassscusscecscteces 16

U.S. Sup. Ct. R. 14.1) 2. ccc ccccnsccncccvccscscncccecees 7

ix

I. OPINIONS BELOW

The November 4, 2004 opinion/decision of the Supreme

Court of California denying review of the Petition filed by Petitioner

Ricoh-USA, is not reported, but is attached hereto as Exhibit“‘l” to

the Appendices filed concurrently herewith.

~ The October 21, 2004 opinion/decision of the California

Court of Appeals, 4" Appellate District, Division 3, rejecting

Petitioner’s Petition for Writ of Mandate is not reported, but is

reproduced and attached hereto as Exhibit “2” to the Appendencies

filed concurrently herewith.

The order / opinion of Superior Court of the State of

California for the County of Orange, denying, as a matter of law,

Petitioner’s motion for summary adjudication invoking the

protections of the U.S.-Japan FCN Treaty, is not reported, but exists

in three forms. The trial court on September 28, 2004, issued a

tentative opinion and posted said opinion/decision on the court’s

website, which can be found as Exhibit “3” in the Appendices filed

_concurrently herewith. The trial court also issued a more detailed

tentative ruling on September 29, 2004, which can be found at

aha

Exhibit “4” in the Appendices filed concurrently herewith. Lastly, in

accordance with California Code of Civil Procedure § 437(c)(g), the

trial court issued a formal ruling/opinion on November 8, 2004,

which can be found at Exhibit “5”, in the Appendencies filed

concurrently herewith. None of the foregoing opinions are

published.

Ii. JURISDICTION

This Court has jurisdiction to review by writ of certiorari any

“tflinal judgments or decrees rendered by the highest court of a State

in which a decision could be had . . . where the validity of a statute of

any State is drawn in question on the ground of its being repugnant

to the Constitution . . . or laws of the United States, or where any

title, right, privilege, or immunity is specially set up or claimed under

the Constitution . . . or statutes of . . . the United States.” 28 U.S.C. §

1257(a).

The judgment below is plainly final for purposes of this

Court’s certiorari jurisdiction. As this Court has long recognized,

“t]here have been instances where the Court has entertained an

appeal of an order that otherwise might be deemed interlocutory,

—

2.

because the controversy had proceeded to a point where a losing

party would be irreparably injured if review were unavailing.”

Republic Natural Gas Co. v. Oklahoma, 334 U.S. 62, 68 (1948). As

discussed below, absent an immediate stay from this Court,

Petitioners face irreparable harm from the order of summary

adjudication and the commencement of trial on December 6, 2004,

where Petitioner’s protection under the U.S. Japan FCN Treaty has

been declared null and void. Trial is still in progress.

Moreover, in Cox Broadcasting Corp. v. Cohn, 420 U.S. 469

(1975), this Court identified four categories of cases in which a

judgment is sufficiently final to justify this Court’s review even

though further proceedings remain to be held in the state courts. The

fourth such category permits review even in “those situations where ~

the federal issue has been finally decided in the state courts with

further proceedings pending...” and “reversal of the state court on the

federal issue would be preclusive of any further litigation on the

relevant cause of action rather than merely controlling the nature and

character of, or determining the admissibility of evidence in, the state

proceedings still to come.” Jd. at 482-483.

<™

The fourth Cox Broadcasting category is plainly applicable

here. The federal questions presented by this case have been finally

decided by the courts below. The Superior Court for the State of

California, supported by the California Court of Appeals and the

California Supreme Court, squarely rejected Petitioners’ arguments

that the U.S.-Japan FCN Treaty protected Ricoh-USA from the

employment discrimination claims of Respondents. Accordingly, a

federal issue has been conclusively resolved, and there is no need for

further state court proceedings to finalize or crystallize the lower

court’s disposition of the federal questions involving the Treaty with

Japan, a Treaty that had been negotiated by the President “with the

Advice and Consent of the Senate.” Article III, Section 2, Clause 3,

United States Constitution.

Moreover, reversal of the court below on any of the federal

questions presented in this case “would be preclusive of any further

litigation on the relevant cause of action.” 420 U.S. at 482-83.

Finally, it is readily apparent that “the California Supreme

Court decision seriously erodes federal policy. See 420 U.S. at 483.

In the instant case, the federal policy that is being seriously eroded by

-4-

the erroneous California Supreme Court decision is more than just

policy: it is the Supreme Law of the Land. The President and the

Senate are charged with the negotiation and execution and approval

of treaties with foreign governments. See Article II, Clause 2, U.S.

Const. For the California courts to directly and unequivocally

disregard such constitutional mandates clearly interferes with the

conduct of foreign relations and commerce with other nations

delegated to the Congress and the President. /d.; Article I, Section 8,

U.S. Const.

Moreover, those treaties are assured a status equal with other

constitutional provisions. See Supremacy Clause, Art. VI, Clause 2,

U.S. Const. Accordingly, Cox and related cases warrant review of

“the federal issue, which itself has been finally determined by the

state courts for purposes of the state litigation.” 420 U.S. at 482-83;

accord Goodyear Atomic Corp., 486 U.S. at 178-79 (applying this

exception where “the unreviewed decision of the Ohio Supreme

Court might seriously erode federal policy in the area of nuclear

production”).

Ill. CONS ONAL PROVISIONS AND STA1

INVOLVED

Article I, Section 8, Clause 3 of the Constitution of the

United States of America provides in pertinent part:

“(That Congress shall have Power] to

regulate Commerce with foreign

Nations, and-among the several States

and among the Indian tribes.”

Article Il, Section 2, Clause 2 of the Constitution of the

United States of America provides in pertinent part:

“(The President] shall have Power, by

and with the Advice and Consent of

the Senate to make Treaties, provide

2/3 of the Senators present concur. . .”

Article VI, Clause 3 of the Constitution of the United State of

America provides in pertinent part:

“This Constitution and the Laws of the United States

which shall be made in Pursuance thereof; and all

6-

Treaties made or which shall be made, under the

Authority of the United States shall be the Supreme

Law of the Land; and Judges in every State shall be

bound thereby, any Thing in the Constitution or Laws

of any State to the Contrary notwithstanding.”

Pursuant to this Court’s Rule 14.1(f), the provisions of

California law involved in this case, including California Code of

Civil Procedure § 43 7c; California Labor Code § 970; and

California Government Code § 12940, as well as all other pertinent

provisions of the Constitution of the United States of America, the

United States Code, and various Treaties to which the United States

is a party are reproduced at Exhibits “6” - “13” of the Appendices

filed concurrently herewith.

IV. STATEMENT OF THE CASE

A. Introduction

By its decision on December 3, 2004, the California Supreme

Court openly declared its repugnance to fundamental federal treaty

rights protected by the Supremacy Clause of the United States

x, %

Constitution. California Supreme Court’s decision affirmed a state

trial court, where the trial judge explicitly declared his refusal to

honor treaty rights and U.S. Supreme Court case law interpreting

such treaty rights. Denial of fundamental constitutional rights

concerning a federal treaty protected by the Supremacy Clause is

presumed to be irreparable harm and a Writ of Certiorari from this

Honorable Court to the California Supreme Court is absolutely

essential as a matter of course.

The Superior Court for the State of California (trial court) on

September 29, 2004 (with a:formal written decision issued on

November 8, 2004), held and declared as a matter of law that

Petitioner Ricoh Electronics, Inc. (“Ricoh-USA” or “Petitioner”’), a

wholly-owned subsidiary of a Ricoh Company, Ltd. (“Ricoh-Japan”),

a Japanese corporation, could not invoke the protections of the US.-

Japan Treaty of Friendship, Commerce and Navigation in a lawsuit

alleging employment discrimination by Respondents.

In seeking appellate review, both the California Court of

Appeal and the California Supreme Court affirmed the trial court’s

refusal to recognize fundamental constitutional interests: (1) the

-8-

Supremacy Clause, (2) Article I, and (3) Article II of the United

States Constitution. Thus Petitioner has been summarily denied relief

by these State Court Appellate bodies on November 4, 2004, and

December 3, 2004, respectively. Consequently, Petitioner now faces

a trial which commenced on December 6, 2004, and then abruptly

recessed until January 3, 2005. In this trial, the sole Federal question

has been adjudicated with finality. Petitioner Ricoh-USA is barred

as a matter of law from raising or enjoying the protections

afforded under the FCN Treaty.

Requiring Ricoh-USA even to stand trial to defend itself

against claims of discrimination is an affront to the guarantees of the

U.S.-Japan FCN Treaty. The FCN Treaty expressly recognizes the

rights of companies of the signatories (that is, both the United States

and Japan) to retain certain classes of employees, such as executives,

attorneys or technical experts, “of their choice.” 4 U.S.T. 2063,

T.LA.S. No. 2863, Article VIII(1).

The FCN Treaty promises “to foreign investors the freedom

to place their own citizens in key management positions, thus

facilitating their operational success in the host country.”

-9.

MacNamara v. Korean Airlines, 863 F. 2d 1135, 1144-45 (3d Cir.

1988) (emphasis added) [construing Article VIII(1) of the Korean

FCN Treaty, which is nearly identical to that of the U.S.-Japan FCN

Treaty]. Thus, “discrimination in favor of foreign executives given a

special status by virtue of a treaty and its implementing regulations

is not equivalent to discrimination on the basis of national origin or

race.” Fortino v. Quasar Co., 950 F.2d 389, 392 (7th Cir. 1991)

(emphasis added).

Ricoh-Japan’s and Ricoh-USA’s freedom to place key

Japanese personnel without fear of discrimination complaints, as

guaranteed by the FCN Treaty, is a matter of international

sovereignty. Interference with this protected right threatens to

undermine the Supreme Law of the United States. Review by this

Honorable Court of the summary denial of Ricoh-USA’s invocation

of the FCN Treaty is essential to settle the issue of whether domestic

subsidiaries of foreign corporations enjoy the same protections that

their parents do, when their parents place _ personnel with the

domestic subsidiary.

-10-

B. Facts and Procedural History

In 1973, Ricoh-USA, was organized as a wholly-owned

subsidiary corporation of Ricoh Company, Ltd., a Japanese

corporation organized and operating under the laws of Japan.’

Based in Tustin, California, and Lawrenceville, Georgia, Ricoh-USA

is Ricoh-USA-Japan’s manufacturing subsidiary in the U.S.

responsible for the production of toner and thermal media,

plain-paper copier, and printed circuit board technology.

At Ricoh-USA, in particular, the rotation of Japanese

“expatriate” executives into the corporate hierarchy permits Ricoh-

USA to utilize and capitalize upon the unique knowledge and

experience these individuals from Ricoh-Japan have with newly

developed technology (i.e., the engineering and production of a new

; Ricoh-USA was subsequently reorganized as a wholly

owned (100%) subsidiary of Ricoh Corporation (“Ricoh-New Jersey”),

organized and operating in the State of New Jersey, which in turn is a

wholly owned subsidiary (100%) of Ricoh Company, Ltd. (“Ricoh-

Japan”). Ricoh-New Jersey was incorporated as the sales component of

Ricoh-Japan’s U.S. business, while Ricoh-USA was incorporated as

Ricoh-Japan’s manufacturing arm. Ricoh-USA represents a small part of

the worldwide operation of Ricoh-Japan, which consists of 376

subsidiaries and 28 affiliates that develop, produce, market, sell, and

recycle office equipment, including copiers and printers, information

equipment, optical devices. Nomura Decl. § 2-3.

«#1.

product line or technology developed in Japan). Thus, Ricoh-Japan

will temporarily assign its uniquely qualified personnel to fill those

needs. The appropriate individuals at Ricoh-Japan evaluate the

identified needs and determine who, from among its managerial or

technical staff in Japan, might appropriately fill the void at Ricoh-

USA. Because virtually all of Ricoh-Japan’s managerial and

technical staff are Japanese nationals, the uniquely qualified

personnel that Ricoh-Japan assigns to Ricoh-USA have been

Japanese. Because they are assigned to Ricoh-USA on a temporary

basis,? and remain employees of Ricoh-Japan, the Japanese

expatriates are evaluated by individuals at Ricoh-Japan in accordance

. The particular need as identified by Ricoh-USA dictates

what type of visa application Ricoh-USA makes to the Bureau of

Citizenship and Immigration Services (“BCIS”). Some expatriates have

entered the U.S. on E-2, or treaty investor, visas, which provide non- ~

immigrant status for a national of any country with which an appropriate

treaty of navigation and commerce exists. See Immigration and

Nationality Act (“INA”), 8 U.S.C. § 1101(a)(15)(E). Other individuals

have entered the U.S. for assignment at Ricoh-USA on L-1A or L-1B

visas, which provide non-immigrant status for multi-national executives

and managers or employees with specialized knowledge of the company’s

products, processes, or procedures. See INA, 8 U.S.C. § 1101 (a)(15)(L).

The government’s decision to grant entry of an individual pursuant to one

of these visa categories is strong evidence of that individual’s executive,

managerial, or specialized knowledge status for purposes of Article

VIII(1). MacNamara v. Korean Airlines, 863 F. 2d 1135, 1141-1142 (3d.

Cir. 1988).

2.

with the system in place at the parent company, although individuals

at Ricoh-USA may provide input into the overall evaluation.

On August 12, 2003, Plaintiff Haluck and Litton (“Plaintiffs

and/or Respondents”’) filed a lawsuit against Ricoh-USA, and a

number of executives and managers of the company, including

LARRY VAUGHN (“Vaughn”), HARUO UESAKA (“Uesaka”),

YOJI IDE (“Ide”), YOSHIHIRO NOMURA (“Nomura”),

HOUSSAM EL JURDI (“El Jurdi”), and YASUAKI

MURAMATSU (“Muramatsu”). Rnapendente allege that Ricoh- .

USA intentionally discriminated against them on the basis of

“national origin and race” in violation of the Fair Employment and

Housing Act (““FEHA”) (California Government Code § 12940),

when Ricoh-Japan placed Japanese nationals on a temporary basis in

key management and technical positions at Ricoh-USA.’

’ Respondents further allege that when they complained

about the purported discrimination, Petitioners retaliated against them by

failing to consider them for promotions and corresponding raises in pay,

failing to prevent discrimination, perpetrating adverse employment

actions against them in violation of public policy, breaching an implied

employment contract in bad faith, and thereby causing them emotional

distress. Litton further alleges Petitioner misrepresented the nature of his

employment with Petitioner, upon which he relied to relocate to

California, and ultimately terminated him in retaliation for his complaints.

-13-.

pe ene ee

On May 28, 2004, Ricoh-USA moved for summary

adjudication of several of Plaintiffs’ claims for discrimination on

grounds that, inter alia, these Sincsianinalienn charges were barred by

the Treaty of Friendship, Commerce and Navigation between the |

United States and Japan. See Article VIII(1) of U.S.-Japan FCN

Treaty attached hereto as Exhibit 13 of the Appendices filed

concurrently herewith. On September 29, 2004, the California

Superior Court denied Ricoh-USA’s motion for summary

adjudication as to Respondent’s claims for discrimination on the

basis of race and national origin.

Nevertheless, the California (Trial) Superior Court

specifically stated that it disagreed with the federal case law and any

interpretation of the Treaty so far as Petitioner Ricoh-USA was

concerned. See Exhibit “14" at pages 5-6. See, also, Exhibit “S" at

page 2, in which the court declared that the case of Kirmse v. Hotel

Nikko, 51 Cal 4" 311, 321 (1996), as a statement of California law,

controlled and supported the trial court’s denial of Petitioner Ricoh-

USA’s invocation of the U.S.-Japan Treaty. Indeed, the court

specifically ignored the holdings of MacNamara v. Korean Airlines,

Bre

863 F. 2d 1135, 1144-45 (3% Cir. 1988); Bennett v. Total Minatome

Corp., 138 F. 3d 1053 (5" Cir. 1998); Papaila v. Uniden America

Corp., 51 F. 3d 54, 55 (5" Cir. 1995); and Fortino v. Quasar Co. 950

F. 2d 389, 392 (7" Cir. 1991).

A Petition for Writ of Mandate was timely presented to the

California Court of Appeal and summarily denie.? on November 4,

2004. In addition, a Petition for Review to the California Supreme

Court, following the issuance of a decision shen the California Court

of Appeal was also summarily rejected on December 4, 2004.

Having exhausted its appellate remedies within the State of

California, and facing the continuing binds of Ricoh-USA’s

constitutional rights as well as the constitutional rights of its parent

company, Ricoh-Japan, Petitioner filed an Application for

Emergency Stay of Trial Court Proceedings with Justice O’Connor

on December 3, 2004. Notwithstanding trial commencing on

December 6, 2004, Justice O’Connor denied Petitioner’s Application

for Emergency Stay of Trial Court Proceedings on December 3,

2004.

ie.

Vv. RE ASONS FOR GRANTING THE PETITION

A. There Is a Reasonable Probability That at Least Four

Members of this Court Would Conclude That this Case

Warrants Plenary Consideration

There is a reasonable probability that four or more Members

of this Court would vote to grant certiorari.

1. This Court previously granted certiorari to review a

closely related case arising out of a similar dispute. See Sumitomo

Shoji America, Inc. v. Avagliano, 457 U.S. 176, 102 S. Ct. 2374, 72

L.Ed.2d 765 (1982). This iristant case presents Constitutional issues

not addressed by the Sumitomo decision. See 457 U.S. at 189. The

instant Petition for a Writ of Certiorari presents related questions

under Articles I and II of the United States Constitution and the

Supremacy Clause of the United States Constitution.

2. This Court’s review of the California Supreme

Court’s decision is warranted because the California Supreme Court

“decided an important federal question that conflicts with relevant

decisions of this Court,” U.S. Sup. Ct. R. 10(c). As discussed in

greater detail below, this case presents important questions regarding

“Yo

the Supremacy of the U. S. Constitution, Treaties and federal court

cases. |

3. There is a profound national interest in ensuring the

stable and consistent conduct of foreign affairs and conduct of

foreign commerce. This national interest also includes the

promotion of investments by foreign companies in the U.S. economy

as stated in these FCN Treaties. See Art. I of the U.S.-Japan FCN

Treaty, 4 U.S.T. 2063 (1953); Art. IT, U.S. - France FCN Treaty, 11

U.S.T 2398 (1959); Art IT, U.S. Korea FCN Treaty, 8 U.S.T 2217

(1956).

B. Petitioners Are Likely to Prevail on the Merits

There is at least a “fair prospect” that Petitioner will prevail

on the merits in this case.

i Respondents’ Claims for Discrimination

are Barred by the U.S.-Japan FCN Treaty

Respondents allege Ricoh-USA discriminated against them

on the basis of their “national origin and race” in violation of the

Fair Employment and Housing Act (“FEHA”). (Cal. Govt. Code §

12940). The discrimination as alleged by Respondents, however, is

ees

in reality Ricoh-Japan’s placement of Japanese nationals — employed

by Ricoh-Japan — on a temporary basis in key management and

technical positions at Ricoh-USA - permitted by the Treaty of

Friendship, Commerce and Navigation between Japan and the United

States (“U.S.-Japan FCN Treaty”). See, Commerce and Navigation,

April 2, 1953, U.S.-Japan, 4 US.T. 2063, T.LA.S. No. 2863. Thus,

Respondents’ claims that this placement of Japanese citizens at

Ricoh-USA discriminated against them on account of their national

origin and race in violation of the FEHA simply cannot stand in the

face of the U.S.-Japan FCN Treaty.

2. The Alleged Discrimination Against

Respondent Is Ricoh-J apan‘s Temporary

Assignment to Ricoh-USA of Japanese

Citizens as Executives and Technical

Experts in Accordance with the U.S.-Japan

FCN Trea

In 1953, the United States and Japan signed the Treaty and

Protocol Between the United States of America and Japan Regarding

Friendship, Commerce and Navigation (“U.S.-Japan FCN Treaty”).

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4US.T. 2063, T.LA.S. No. 2863. Originally intended to encourage

‘USS. investments abroad in Japan as it recovered from World War*

the U.S.-Japan FCN Treaty also promotes direct investment by Japan

in the United States. Jd. |

To facilitate seamless management of Japanese companies

operating within U.S. boundaries, the U.S.-Japan FCN Treaty‘

recognizes the right of these companies to retain certain classes of

employees, such as executives, attorneys or technical experts “of

their choice.” See U.S.-Japan FCN Treaty, art. VIII. Specifically,

Article VII(1) of the U.S.-Japan FCN Treaty provides:

“Nationals and companies of either

Party shall be permitted to engage,

within the territories of the other Party,

accountants and other technical

After the Second World War, the United States

negotiated Friendship, Commerce and Navigation (“FCN”) treaties with

over forty-eight nations to promote overseas investments by U.S.

companies in countries recovering from World War II. The treaties

guaranteed certain legal protections for U.S. investors abroad and, in

return, guaranteed protection to foreign businesses operating in the United

States. Sumitomo Shoji America, Inc. v. Avagliano, 457 U.S. 176, 182

(1982) [citing Herman Walker, Jr., ‘Treaties for the Encouragement and

Protection of Foreign Investment: Present United States Practice, 5 Am. J.

Comp. L. 229-232 (1956)].

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experts, executive personnel, attorneys,

agents and other specialists of their

choice.”

4 U.S.C. 2063, 2070 [emphasis added].

The provision outlined in Article VIII of the U.S.-Japan FCN

Treaty was included among the treaty provisions “for the limited

purpose of securing to foreign investors the freedom to place their

own citizens in key management positions, thus facilitating their

operational success in the host country.” MacNamara v. Korean

Airlines, 863 F.2d 1135, 1144-45 (3d. Cir. 1988) [construing Article

VIII(1) of the Korean FCN Treaty, which is nearly identical to that of

the U.S.-Japan FCN Treaty].° Courts generally agree that Article

VIII necessarily affords each such company the right to prefer its

own citizens to those possessing U.S. citizenship. Bennett v. Total

Minatome Corp., 138 F. 3d 1053 (5th Cir. 1998) [construing Article

A Nevertheless, despite its limited purpose, both parties to

the treaty deemed the provision, and its concomitant right to place the

signatories’ own nationals in managerial, technical, and confidential

capacities, “to be critical.” Wickes v. Olympic Airways, 745 F. 2d 363,

367-368 (6" Cir. 1984) (construing Article XII(4) of the Greek FCN

Treaty, which contains language similar to that of the Japanese FCN

Treaty).

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VI of the U.S.-French FCN Treaty, which is similar to Article VII of

the U.S.-Japan FCN Treaty]; Papaila v. Uniden America Corp., 51

F. 3d 54, 55 (Sth Cir. 1995) [construing Article VII(1) of the

U.S.-Japan FCN Treaty]; MacNamara, 863 F. 2d at 1144. This is

true even if the company does so as replacement for or saateni of

existing company personnel. MacNamara, 863 F. 2d at 1144. As

such, “discrimination in favor of foreign executives given a special

status by virtue of a treaty and its implementing regulations is not

equivalent to discrimination on the basis of national origin or race.”

Fortino v. Quasar Co., 950 F. 2d 389, 392 (7th Cir. 1991)

[construing Article VII(1) of the U.S.-Japan FCN Treaty].

In reliance on Article VIII(1) of the U.S.-Japan FCN Treaty,

Ricoh-Japan assigns on a temporary basis several of its own

managers and technical experts to work at Ricoh-USA so as to

implement rapidly evolving technological developments from the

parent to Ricoh-USA and ensure the quality and consistency of the

products that, as such, when the need for highly specialized technical

skills arises, Ricoh-USA relies on its parent to temporarily transfer

individuals from Japan to the United States, which Ricoh-Japan

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properly does pursuant to non-immigrant visas specifically designed

for such purposes.

Consequently, to the extent Respondents, Litton and Haluck

claim that Ricoh-USA-Japan’s placement of Japanese citizens in

positions at Ricoh-USA constitutes discrimination on the basis of

national origin or race, such claims vowe cannot stand given the

provisions of the U.S.-Japan FCN Treaty and Ricoh-USA-Japan and

Ricoh-USA’s reliance thereon. Fortino, 950 F.2d at 392.

3. As a Subsidiary of Ricoh-Japan, Ricoh-

USA May Invoke the Rights of its Parent Provided

for Under the U.S.-Japan FCN Treaty

There has been much debate about what entities may properly

rely upon the provision outlined in Article VIII as relates to their

choice of executives and technical personnel. Indeed, according to

the U.S. Supreme Court, once a Japanese corporation incorporated a

U.S. domestic subsidiary, the subsidiary was technically an

American corporation and thus unable to sabe rights under the

U.S.-Japan FCN Treaty in their own right. Sumitomo Shoji America.

Inc. v. Avagliano, 457 U.S. 176, 189 (1982). The Sumitomo Court

9%

nevertheless expressed “no view as to whether [a U.S. subsidiary]

may assert any Article VIII(1) rights of its parent”, and thus left open

the question. Sumitomo Shoji America. Inc. v. Avagliano, 457 U.S.

176, 189, 190 n.19 (1982) [construing U.S.-Japan FCN Treaty, art.

XXIi(3)].

In the ensuing two decades since Sumitomo was decided,

numerous federal Courts of Appeal have relied on the Sumitomo

Court’s decision, and Footnote 19 in particular, 457 U.S. at 190 n.

19, and determined that, in furtherance of the spirit and purpose of

the FCN treaties, domestic subsidiaries must be per. .itted to assert

the treaty rights of their parent. Fortino, 950 F. 2d at 393. See also,

Bennett, 138 F. 3d 1053; Papaila, 51 F. 3d 54; MacNamara, 863 F.

2d 1135.

According to Fortino and its progeny, by distinguishing the

Sumitomo Court’s decision on the basis that, in that case, “there was

no contention that the parent had dictated the subsidiary’s

discriminatory conduct, the Supreme Court left open the question

whether the subsidiary might in such a case assert any of its parent’s

treaty rights.” Indeed, these subsequent Court of Appeals cases

23.

deemed the subsidiary’s reliance on the treaty necessary so as “to

prevent the treaty from being set at naught.” Fortino, 950 F.2d at

393. See also, Papaila, 51 F.3d at 55. In addition, as all of these

cases recognized, there is a vast difference between, on the one hand,

a corporation esscrting rights afforded under a federal treaty and

thereby exerting a preference for one’s own citizens so as to ensure

protection of its business interests and, on the other hand, a corporate

entity illegally discriminating on the basis of national origin and race.

Id.

Invoke the Rights of Ricoh-J Und

the Treaty

Based on the U.S. Supreme Court’s opinion in Edmonson, a

litigant “may raise a claim on behalf of a third party if the litigant can

demonstrate that he or she has suffered a concrete, redressable injury,

that he or she has a close relation with the third party, and that there

exists sie hindrance to the third party’s ability to protect his or her

own interests.” Edmonson, 500 U.S. at 629. It is clear from the facts

of this case that Ricoh-USA has third party standing to invoke the

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rights of Ricoh-Japan under the U.S.-Japan FCN Treaty.

First, Ricoh-Japan has suffered, a concrete, redressable

injury-in-fact sufficient to have a substantial stake in the outcome of

this litigation. Edmonson, 500 U.S. at 629; Powers v. Ohio, 499

U.S. 399 (1991). Indeed, Ricoh-Japan’s future rights to conduct

business pursuant to the U.S.-Japan FCN Treaty are inextricably tied

to the way in which Ricoh-USA conducts its daily business,

especially should such conduct be found to be proscribed by or in

conflict with the anti-discrimination statutes as alleged by

Plaintiffs/Respondents. Thus, Ricoh-Japan clearly has a stake in the

outcome of this case. Id. See also, Singleton v. Wulff, 428 U.S. 106,

113 (1976) [where party indicates it has performed in the past, and

intends to perform in the future, in a way proscribed by the statute or

law at issue creates controversy between the two parties at bar].

Second, as has been clearly demonstrated, supra, Ricoh-USA

has a close relation with the third party, Ricoh-Japan, sufficient to

permit Ricoh-USA to raise Ricoh-J apan’s rights under the

U.S.-Japan FCN Treaty. Edmonson, 500 US. at 629.

Finally, Ricoh-Japan has not been named in this action and,

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as such, is unable to assert its own rights under the U.S.-Japan FCN

Treaty. Hence, the parent corporation’s absence requires Ricoh-USA

to protect Ricoh-Japan’s interests in this Court.

Therefore, the relationship between Ricoh-USA and Ricoh-

Japan is such that Ricoh-USA is the only effective and recognizable

proponent of Ricoh-J apan’s rights under the Treaty. Singleton, 428

U.S. at 116.

_ Petitioner Will Suffer Irreparable Harm from the Denial

of Its Petition for Certiorari and the Balance of the

Equities Clearly Favors Issuance of a Stay.

Petitioner will suffer irreparable injury unless a Writ of

Certiorari issues in this case. The decision of the Superior Court for

the State of California, and the refusal of both the California Court of

Appeal and the California Supreme Court to stay the trial court’s

proceedings in the face of an assault on the Supremacy Clause of the

Constitution of the United States imperils and abrogates a federal

treaty right protected by the Supremacy Clause. See United States v.

Michigan, 508 F. Supp. 480, 491(D. Mich. 1980). “Where denial of

fundamental interest such as constitutional rights are involved,

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damage is presumed to be irreparable and a writ should issue as a

matter of course.” Jd. Indeed, where a court decision prevents a

party from exercising proper treaty rights, irreparable harm is

presumed. /d.; Mille Lacs Band of Chippewa Indians v. Minnesota,

864 F. Supp. 102, 105 (1994), citing with approval, Muckleshoot

Indian Tribe v. Hall, 698 F. Supp. 1504, 1506 (W.D. Wash. 1988).

In the instant case, the California trial court has declared as a

matter of law that neither Ricoh-USA or its parent corporation,

Ricoh-Japan, may invoke protection under the U.S. -Japan FCN

Treaty in response to violations of California State Law concerning

employment discrimination. Resolution of whether Ricoh-USA, a

Japanese subsidiary based in the U.S. may be barred from exercising

constitutional rights set forth in Fortino, Bennett, Papaila and

MacNamara, as well as Articles I, II and VI of the United States

Constitution must be immediate. This issue cannot be deferred to

final resolution through a lengthy trial and appellate process that

could literally take years and hundreds of thousands if not millions of

dollars in costs, expenditures and consequential expenditures that

have yet to be calculated.

a.

D. In the Absence of a Writ of Certiorari Issuing from U.S.

Supreme Court, U.S-based Subsidiaries of Japanese

Corporations and U.S. Employees Face Eminent and

Irreparable Injury.

As typically detailed in Article I or Article II of a FCN

Treaty, the United States has a vital interest in encouraging foreign

companies to invest in the United States economy by establishing

subsidiary operations within the United States. Such investments of

capital stimulate and promote jobs, economic development and

economic growth of various state, local and ultimately the national

economy.

Indeed, the concern of Japanese parent corporations

concerning the interpretation of the U.S.-Japan FCN Treaty dates

back to the briefing accepted by this very Honorable Court in the

Sumitomo decision. See Amicus briefs of Japanese Government,

East Asiatic Company, Inc., and C. Itoh & Simple Co., Ltd. In

essence, the concern of all Japanese-based parent corporations with

U.S. subsidiaries was articulated in the case of Spiess v. C. Itoh &

Simple Co., 643 F. 2d 353, 358-361 & n.2 (5" Cir. 1979). In Spiess,

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the court declared:

“Considerinig the Treaty as a whole, the only

reasonable interpretation is thai Article VIII (1) means

exactly what it says: Companies have a right to decide

which executives and technicians will manage their

investment in the host country, without regard to host

country laws.”

Therefore, to allow the trial court decision to stand with

respect to Petitioner, violates a fundamental principal of Treaty

interpretation in that a Treaty is to be liberally construed to

accomplish its overriding purpose. See, e.g., Factor v.

Laubenheimer, 290 U.S. 276 (1933); Nielsen v. Johnson, 279 U.S.

47 (1929); Jeofrey v. Riggs, 133 U.S. 258 (1890).

Indeed, the court has traditionally construed commercial

treaties in an expansive manner, both in determining the parties

entitled to claim treaty protection in the means by which those

parties exercise their treaty rights. Kolovret v. Oregon, 366 U.S. 187

(1961); Jordon v. Tashiro, 278 U.S. 123 (1928).

_ If Japanese corporations cannot control their investments in

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U.S. based subsidiaries based upon their reasonable expectations

derived from a plain reading of he U.S.-Japan FCN Treaty, then the

entire economic relationship between United States and Japan may

become unequivocally altered and disrupted.

X. CONCLUSION

Under these circumstances, the effect of a failure to issue of

Writ of Certiorari could well disrupt the economic infrastructure of

the United States and potentially create a diplomatic crisis between

the United States and Japan. Thus a Review by this Honorable Court

is justified by the extraordinary importance of the outcome of this

case and the extremely time sensitive nature of relief.

Respectfully submitted,

DATED:February

KONRAD L. TROPE

CALLAHAN & BLAINE,

APLC

3 Hutton Centre Drive, Suite

900

Santa Ana, CA 92707

Telephone: (714) 241-4444

Facsimile: (714) 241-4445

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