Opposition Brief — Republic of Argentina v. Siderman de Blake

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FY FILED

No. 92-320 } OCT 13 i992

OFFICE OF THE CLERK |

IN THE

Supreme Court of the Gnited States

OCTOBER TERM, 1992

REPUBLIC OF ARGENTINA and PROVINCE OF

TUCUMAN, ARGENTINA,

Petitioners,

VS.

SUSANA SIDERMAN DE BLAKE, et al.,

Respondents.

PETITION FOR WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

BRIEF IN OPPOSITION TO

PETITION FOR WRIT OF CERTIORARI

a

=) MICHAEL J. BAZYLER PAUL L. HOFFMAN

©) WHITTIER LAW SCHOOL = ©™¢! of Record

WE 5353 West Third Street ACLU FOUNDATION OF

PA ios Angeles, CA 90020 SOUTHERN CALIFORNIA

‘ 1616 Beverly Boulevard

<= » SCOTT W. WELLMAN Los Angeles, CA 90026

1400 Quail Street (213) 977-9500

Newport Beach, CA 92660

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Attorneys for Respondents

Lawyers Brief Service * Appellate Brief Printers * (213) 613-1013 * (714) 720-1510

QUESTION PRESENTED

Whether this Court should grant certiorari where the

Court of Appeals remanded the case to the district court to

consider whether that court has subject matter jurisdiction

over the case pursuant to the Foreign Sovereign Immunities

Act of ("FSIA") and where the question of subject matter

Jurisdiction under the FSIA was never fully considered by the

district court?

TABLE OF CONTENTS

Pages

QUESTION FRESENTER sacci nce eewait eee sean i

STATEMENT oka dae eee 2

]. Nature of Gee COSC 2 usec ccnesesnsess 2

2. The Proceedings In The District Court .... 3

3. The Decision of The Ninth Circuit ....... 4

a. Expropriation Claims .......4.. 4

b. Forte’ COMME sence cir vesnaas §

REASONS FOR DENYING THE WRIT ......s0s0000% 8

I. THIS CASE IS PREMATURE FOR PLENARY

REVIEW BY THIS COURT GIVEN THE

COURT OF APPEALS REMAND TO THE

DISTRICT COURT FOR FURTHER FACTUAL

PRVEMIVESS. «i040 kta e eee eee s

A. Expropriation COMiMES 64.0 ccssssasene 8

B. Forte LS. .«ca ke beeen 11

I. THIS CASE DOES NOT WARRANT SUPREME

COURT REVIEW BECAUSE IT PRESENTS A

UNIQUE SET OF FACTUAL AND LEGAL

ISSUES AND CREATES NO CONFLICTS

SY SAE bo cock ese ececnsences 12

A. romremtaan CIMUME ous cece weses 12

B weCtrOn FSCS Z) ccs ccunss 14

2. Section 160S(a)(3) cc... eeeeen. 18

B. i Sr ss ok ss bee eee ee oS 19

TT cc. boca ek ck wna rea ekeneuseevess 21

TABLE OF AUTHORITIES

Pages

CASES

Arabia v. Nelson,

923 F.2d. 1528 (Lith Cir. 1991) cert. granted,

Pam, Si-Ras, SUG GD, PPPS oc cece cider aneeses 15

Argentine Republic v. Amerada Hess Shipping Corp,

mci de Abe fd PETER R TER CET 5, 18, 20

Meadows v. Dominican Republic,

817 F.2d 517, (9th Cir.), cert. denied,

Se Ute SOP COET) e6 chee Reena eee ae eees )

Republic of Argentina v. Weltover,

oo4 U.S... , 139 L.Ed. 26 S94 (1992) vce vins 17

Schoenberg v. Exportadora de Sal, S.A. de C.V.,

Doe Fume Ti Fo (FE Cae, TRGE) oii ee eens 10

W.S. Kirkpatrick and Co. v. the Environmental Tectonics Corp.,

SEF Cbs SOP LENO Wik oe 5a ee OREN VR KORE 9

STATUTES AND RULES

Foreign Sovereign Immunities Act of 1976, 28 U.S.C.

Sees a cece ee 6, 7, §4, £9

DE ek or ee eee 14, 15, 16, 17

P POON bn oko ands 17, 18

OTHER AUTHORITIES

G. Born & D. Westin, International Civil Litigation in United

States Courts: C commentary and Materials, 399 (] 990) ... 10

H.R. Rep. No. 1487, 94th C ong., 2d Sess. at 17 reprinted in 1976

U.S. Code Cong. & Admin News .....00.00.0000056... 15

No. 91-712

IN THE

SUPREME COURT OF THE UNITED STATES

OCTOBER TERM 1992

REPUBLIC OF ARGENTINA and PROVINCE OF

TUCUMAN, ARGENTINA.

Petitioner,

V8.

SUSANA SIDERMAN DE BLAKE. et al.

Respondent.

PETITION FOR WRIT OF CERTIORARI

TO THE UNITED STATED COURT OF APPEALS

FOR THE NINTH CIRCUIT

BRIEF IN OPPOSITION TO

PETITION FOR WRIT OF CERTIORARI

Respondents, Susana Siderman De Blake and Jose.

Lea, and Carlos Siderman ("the Sidermans’ '), Submit this brief

IN Opposition to the Petition for Writ of Certiorari filed by

The Republic of Argentina and the Province of Tucuman

( Argentina’).

STATEMENT

ie Nature of the Case

This case involves an action against the Government

of Argentina and the Argentine Province of Tucuman for (1)

the taking of plaintiffs’ propertics and (2) the torture of

plaintiff Jose Siderman during the military dictatorship in

Argentina. The harms suffered by the Sidermans are

attributable to the anti-semitism of the military in Argentina

during the dictatorship. Indeed, the facts of this case reveal

the kinds of human rights abuses that inspired the creation of

international human rights law in response to the Nazi

Holocaust.

In their Complaint, filed before Argentina’s return to

democracy, the Sidermans alleged that the properties scized by

the Argentine military dictatorship have been used, and are

being used by Argentina, to do business in the United States.’

Plaintiff Susana Siderman De Blake, the lead plaintiff, was an

American citizen residing in the United States at the time of

the taking of the properties. The other plaintiffs are

naturalized American citizens who were Argentine nationals

at the time the properties were seized by the military

dictatorship.

Plaintiff Jose Siderman is suing for his torture in

Argentina and for the taking of the propertics. His wife,

plaintiff Lea Siderman, is suing for the taking and for the loss

' The properties include landholdings and an international

resort hotel in the province of Tucum4n. The Sidermans held these

properties, including the hotel, through their family-owned

Argentine corporation, Inmobilaria Del Nor-Oeste, S.A., known by

its acronym INOSA. Plaintiff Susana Siderman De Blake, at all

times relevant herein, was a one-third owner of INOSA.

2

of consortium stemming from Jose’s torture. Their children,

plaintiffs Carlos Siderman and Susana Siderman de Blake, are

suing for the taking of the family-owned properties.

2. The Proceedings In The District Court

The Sidermans filed their Complaint against Argentina

in 1982, and thereafter properly served their Summons and

Complaint pursuant to the Foreign Sovercign Immunities Act

("FSIA"). Argentina, despite being advised by the United

States Department of State to appear in court and defend the

lawsuit, never responded to the Complaint.

The district court found Argentina in default. The

district court dismissed the Sidermans’ claims for the taking of

the properties sua sponte on the basis of the act of State

doctrine without determining if subject matter jurisdiction

existed under the FSIA for these claims.

The district court later found it had subject matter

Jurisdiction over the Sidermans’ claims for torture. — Ip

September, 1984, after the Sidermans submitted evidence to

prove their torture claims, the district court issued its

‘Judgment by Default" against Argentina. The court awarded

Jose Siderman approximately $2.6 million as damages for the

torture and Lea Siderman $100,000 for loss of consortium

stemming from the torture. No damages were awarded to the

children, Susana and Carlos.

In January, 1985, Argentina first appeared in the case,

arguing that they should be relieved from the default

judgment. The United States concurrently filed a "Suggestion

of Interest," asking the district court to allow Argentina to

plead its case. The United States Government stated no

position on the merits of the lawsuit.

The district court agreed to re-examine its judgment

and found that it was barred by sovercign immunity from

considering these claims. In March, 1985, the district court

vacated its September 1984 judgment and dismissed the entire

action.

The Sidermans appealed to the United States Court of

Appeals for the Ninth Circuit.

a The Decision of The Ninth Circuit

The Ninth Circuit reversed in a 3-0 decision (The

Ninth Circuit opinion, authored by Judge Betty Fletcher, is

attached as Exhibit "A" to the Petition for Writ of Certiorari

and is reported at 965 F.2d 699 (1992)).

The Ninth Circuit examined the Sidermans’ taking (or

expropriation) claims and torture claims separately.

a. Expropriation Ciaims

The Ninth Circuit found that the district court erred

in dismissing the Sidermans’expropriation claims on the basis

of the act of state doctrine. The error was two-fold. First,

"[t{Uhe district court erred in deciding the act of state issue

without first considering the threshold issue of its subject

matter jurisdiction.” 965 F.2d at 706. Second, "[t}he district

court erred in applying that doctrine before Argentina had

even entered an appearance in the case.” Jd. at 713.

The Ninth Circuit then went on to examine whether

the Sidermans met their initial burden of alieging subject

matter jurisdiction under the FSIA. The Ninth Circuit found

that the district court "made no findings of fact concerning

jurisdiction.” Jd. at) 707.) The only record regarding

jurisdicion under FSIA consisted "of the complaint and

numerous declarations submitted by the Sidermans in support

of their contention that certain of the FSIA exceptions apply,

but includes no pleading or evidence from Argentina, which

had not yet entered an appearance in the case when the

expropriation claims were dismissed [by the district court]." Jd.

at 707.

Accepting as true the allegations in Complaint and the

Supporting declarations, the Ninth Circuit found that the

Sidermans sustained their initial burden in alleging jurisdiction

under sections 1605(a)(2), the commercial activity exception,

and 1605(a)(3), the international takings exception of the

FSIA.

The facts which the Sidermans pleaded in_ their

Complaint, supported by numerous declarations, were that

Argentina expropriated the property of an American citizen.

Susan Siderman de Blake, and then used those properties to

conduct commercial activities in the United States. The

largest piece of property expropriated was the Hotel Gran

Corona, an international resort hotel which Argentina has

used after the expropriation to conduct commercial tourist

activities in the United States.

hb. Torture Claims

The Ninth Circuit's analysis of the torture claims was

similar to its analysis of the expropriation claims.

On appeal before the Ninth Circuit, the Sidermans

conceded that the sole basis for finding subject matter

jurisdiction for the torture claims was the FSIA. — This

concession was required by this Court’s decision in Argentine

Republic v. Amerada Hess Shipping Corp, 488 U.S. 428 (1989),

which held that the FSIA "provided the sole basis for

obtaining jurisdiction over a foreign state in our court." Id. at

434.

The Sidermans raised three arguments before the

Court of Appeals for why Argentina does not poses sovereign

immunity under the FSIA for the torture claims. First. the

Sidermans contended that Argentina is precluded from

asserting the defense of sovereign immunity by the

international law principles of jus cogens, which the Sidermans

contended confers jurisdiction under the FSIA. Second, the

Sidermans contended that subject matter jurisdiction for the

torture claims is present under the treaty exception, section

1604 of the FSIA. Third, the Sidermans contended that

subject matter jurisdiction for these torture claims exists under

the implied waiver exception, section 1605(a)(1) of the FSIA.

The Court of Appeals ruled against the Sidermans on

their first two arguments. It held that neither the

international principle of jus cogens nor the treaty exception

provide a waiver of sovereign immunity in this case.

The Court of Appeals did find that allegations in the

Sidermans’ Complaint, together with the uncontroverted

evidence presented with their declarations, met the initial

burden of showing subject matter jurisdiction under the

implied waiver exception provisions of section 1605(a)(1).

These allegations were that the government of Argentina,

after Jose Siderman fled to the United States to escape

torture and religious persecution, commenced malicious

criminal proceedings against him in Argentina, and then

requested and obtained the assistance of California state

courts in obtaining jurisdiction over him. This pursuit of Mr.

Siderman by Argentina through California courts in the

United States was part of the same continuing pattern of

harassment, torture and religious persecution, by the military

dictatorship then in power, against the Siderman family.

With these allegations, the Court of Appeals was

“confrontied with] a situation where Argentina apparently not

only envisioned United States court participation in its

persecution of the Sidermans, but by its actions deliberately

implicated our courts in that persecution." 965 F.2d at 721-22.

The Ninth Circuit held that such deliberate use of American

courts by a foreign sovereign against a private party may lead

to an implied waiver of sovereign immunity under 1605(a)(1)

of the FSIA when that party later sues the foreign sovereign

6

for activities that stem from the same basis for which the

foreign sovereign first used the American courts.

The court concluded that "[a]t this Stage of the

proceedings, however, we are unable to Say that the

Sidermans’ argument as to implied waiver {under section

1605(a)(1) of the FSIA] are devoid of merit," Jd. at 720. The

Court of Appeals remanded the case to the district court for

factual findings on this issue.

In general, the Court of Appeals stressed the

preliminary nature of its opinion and the fact that Argentina

would have a full opportunity to introduce evidence to refute

the Sidermans’ allegations and evidence when the district

court considered the issue of subject matter jurisdiction on

remand.

REASONS FOR DENYING THE WRIT

In an effort to convince this Court to grant certiorari

in this case, Argentina accuses the Court of Appeals of issuing

a decision in this case that is "bizarre," (Petition at

25.),"regrettable,” (Jd. at 26), and "not...motivated by purely

legal considerations". /d. In fact, the Court of Appeals’

opinion is in full conformity with the existing law of sovereign

immunity. The opinion is narrow in its holding and limited to

the particular facts of this case. Argentina has identified no

conflict between the Court of Appeals opinion and any

decision of this Court or of any Circuit.

The Ninth Circuit opinion merely holds that the

Sidermans’ complaint and declarations are sufficient to meet

their initial burden of showing that the district court has

subject matter jurisdiction under sections 1605(a)(1), (2) and

(3) of the FSIA. The Court of Appeals remanded the case to

the district court to determine whether subject matter

jurisdiction is present after this issue is fully litigated by the

parties. In its remand, the Ninth Circuit specifically directed

the district court to allow Argentina to present for the first

time evidence why subject matter jurisdiction is lacking.

I. THIS CASE IS PREMATURE FOR PLENARY REVIEW

BY THIS COURT GIVEN THE COURT OF APPEALS

REMAND TO THE’ DISTRICT COURT FOR

FURTHER FACTUAL FINDINGS.

A. Expropriation Claims

The expropriation claims came to the Ninth Circuit,

and now come to this Court, without any findings of fact by

the district court on the question of whether subject matter

jurisdiction exists for those claims. Rather, the district court

dismissed the Sidermans’ expropriation claims strictly on the

&

ground that they were barred by the act of state doctrine.

The district court failed to consider at all whether it had

subject matter jurisdiction over these claims under the FSIA.

At the time that the district court rendered its decision on the

expropriation claims, Argentina intentionally failed to appear

in the case, and therefore presented no arguments to the

district court why that court lacked subject matter jurisdiction

over the case.

The Court of Appeals found that the district courts’

sua sponte dismissal of the Sidermans’ expropriation claims on

act of state grounds clearly was in error. See W.S. Kirkpatrick

and Co. v. the Environmental Tectonics Corp., 493 U.S. 400

(1990). Argentina does not quarrel with this holding.

Having found clear error by the district court. in

dismissing the expropriation claims on act of state grounds, the

Court of Appeals went on to examine whether the Sidermans

met their initial burden of alleging jurisdiction under the

FSIA. The Court of Appeals found that the Sidermans indeed

sustained their initial burden of showing that jurisdiction under

the FSIA exists for the expropriation claims.

The court thereafter remanded the expropriation

claims "in order to afford Argentina the Opportunity to rebut

the Sidermans’ evidence and sustain its burden of proof before

the district court." 965 F.2d at 708. In remanding the case for

further factual finding on the issue of Subject) matter

jurisdiction, the appellate court was merely applying existing

law in the Ninth Circuit and followed by other Circuits.

In Meadows v. Dominican Republic, 817 F.2d 517, 522.

23 (9h Cir.), cert. denied, 484 US. 976 (1987), the Ninth

Circuit held, at least with regard to the commercial activity

exception to the FSIA, that the district court should observe

the following procedure:

"Where, as here, the plaintiff alleges in his

complaint that his claim is based on a foreign

9

hasteneetienaetienesianuacineteitt ene eemnceseesteemtettneneinmenel

State’s strictly commercial acts, the defendant

must establish a prima facie case that it is a

sovereign state and that the plaintiffs claim

arises out of a public act. This proof

establishes a presumption that the foreign

State is protected by immunity. The plaintiff

then has the burden of going forward with the

evidence by offering proof that one of the

exemptions applies. Once the plaintiff has

presented this evidence, the defendant must

prove its entitkement to immunity by a

preponderance of the evidence."

In Schoenberg v. Exportadora de Sal, S.A. de C.V., 930

F.2d 777, 779 (Wh Cir. 1991)(quoting Joseph v. Consulate

Gen'l of Nigeria, 830 F.2d 1018, 1021 (9th Cir. 1987), cert.

denied, 485 U.S. 90S (1988)), the Ninth Circuit likewise stated;

"Once the plaintiff offers evidence that an

FSIA exception to immunity applies, the party

claiming immunity bears the burden of proving

by a preponderance of the evidence that the

exception does not apply."

In their brief, Petitioners nowhere show that these

procedural steps established by the Ninth Circuit for

examining subject matter jurisdiction under the FSIA are in

error. Moreover, they do not show that this procedure is in

conflict with the decisions of this Court or with other courts

of appeal. See G. Born & D. Westin, International Civil

Litigation in United States Courts: Commentary and Materials,

10

399 (1990) ("Virtually all lower courts have followed this basic

approach to burdens of proof under the FSIA.")?

It would be premature for this Court to grant

certiorari at this point in this case. The Court should allow

this case to be remanded to the district court, so that the

district court can proceed with its task of determining whether

it has subject matter jurisdiction over the Sidermans’

expropriation claims.

B. Torture Claims

In dismissing the torture claims on the basis of

sovercign immunity, the district court did not consider whether

Argentina had waived its immunity to a lawsuit by the

Sidermans when Argentina pursued the Sidermans_ in

2 See H.R. Rep. No. 1487, 94th Cong., 2d Sess. at 17. reprinted in

1976 U.S. Code Cong. & Admin. News at 6616:

[Because] sovereign immunity is an affirmative

defense which must be especially pleaded, the

burden will remain on the foreign state to produce

evidence in support of its claim of immunity.

Thus, evidence must be produced to establish that

a foreign state or one of its subdivisions, agencies

Or instrumentalities is the defendant in the suit

and that the plaintiffs claim relates to a public act

of the foreign state -- that is, as act not within the

exceptions in sections 1605-1607. Once the foreign

state has produced such prima facie evidence of

immunity, the burden of going forward would shift

to the plaintiff to produce evidence establishing

that the foreign state is not entitled to immunity.

The ultimate burden of providing immunity would

rest with the foreign state.

1]

American courts as part of a vendetta against them, beginning

with the torture of Jose Siderman, and thereby waived its

sovereign immunity under section 1605(a)(1) of the FSIA.’

The Court of Appeals found that the Sidermans, in

their pleadings and supporting evidence, met their initial

burden of showing implied waiver under section 1605(a)(1).

The Court remanded the torture claims to the district court

for further findings, and to allow both sides for the first time

to argue the issue of implied waiver.

As with the expropriation claims, the torture claims are

not ripe for review by this Court.

I. THIS CASE DOES NOT WARRANT SUPREME

COURT REVIEW BECAUSE IT PRESENTS A

UNIQUE SET OF FACTUAL AND LEGAL ISSUES

AND CREATES NO CONFLICTS AMONG CIRCUITS.

This case is not appropriate for review by this Court

not only because of its preliminary procedural posture, but

also. because it involves unique and unusual factual

circumstances and the Court of Appeals decision is not in

conflict with the decisions of other Circuits

A. Expropriation Claims

The Sidermans have alleged that Argentina

expropriated the properties and assets of Susana Siderman De

Blake, an American citizen and the lead plaintiff in the case.

The largest piece of property expropriated is an international

resort hotel in Argentina, the Hotel Gran Corona, which has

extensive commercial dealings with the United States.

3 The District Court’s order dismissing the torture claims is

attached as appendix "D" in the Petition for Writ of Certiorari.

12

—

What distinguishes this case from the "garden-varicty"

expropriation by a foreign government of the assets of an

American citizen, is that Argentina in this case is engaging in

commercial activities in the United States using the very

properties which they expropriated from the Sidermans.

In the declarations submitted by plaintiffs before the

district court, and in the exhibits attached to those

declarations, the Sidermans showed that Argentina solicits

guests for the Hotel Gran Corona in the United States.

Moreover, the Sidermans showed that the Hotel Gran Corona

accepts a variety of American credit cards, including Visa,

Mastercard and American Express. Every time payment is

made in the hotel through these credit cards, monies flow

from the United States to Argentina. Finally, the Sidermans

showed that Acrolinas Argentinas, the Argentine national

airline, acts as the agent for the Hotel Gran Corona in the

United States. Therefore, Argentina uses the Hotel via, its

agent Aerolinas Argentinas, to do business directly in the

United States.

In their Complaint, the Sidermans specifically alleged

that Argentina is conducting commercial activities in the

United States through the expropriated Hotel Gran Corona.

“In wrongfully holding plaintiffs’ property,

defendants are engaged in the commercial

business of, among other things, a hotel

business, since they are managing and running

the INOSA hotel, Hotel Gran Corona, and

deriving profits and proceeds therefrom."

(para. 101).

"The commercial activities of defendant

described in paragraph 101-104, supra, include

commercial activities conducted in, have

13

commercial contact with, and/or a direct effect

on the United States." (para. 105)

"Defendants therefore have wrongfully

deprived plaintiffs of their ownership rights in

their propertics while at the same time

obtaining benefits in the United States with

regard to their properties." (para. 107)

The Sidermans’ causes of actions are based specifically

upon the commercial activities of Argentina conducted in the

United Siates through the Hotel Gran Corona. Therefore,

contrary to Argentina’s assertion (see Petition at 22), the

Sidermans are not alleging a jurisdictional nexus to the United

States based upon commercial activities of Argentina in the

United States wholly unrelated to the facts of this case.

Rather, as the Court of Appeals found, the commercial

activities being conducted by Argentina in the United States

as a result of the expropriation complained of by the

Sidermans form the jurisdictional basis under which the district

court has subject matter jurisdiction in this case pursuant to

section 1605(a)(2) and 1605(a)(3).

‘ Section 1605(a)(2)

Clause 1 of section 1605(a)(2) requires that the action

of the Sidermans be "based [1] upon a commercial activity [2]

carried on in the United States [by Argentina]." As the Court

of Appeals found, the various commercial activities by

Argentina carried on in the United States through the Hotel

Gran Corona meet both of these statutory requirements. 965

F.2d at 708-09.

Contrary to Argentina’s assertion (Petition at page 22),

the Sidermans indeed have established "a close connection

14

between the cause of action asserted and the jurisdictional

facts upon which it is based." (/d.) All of the Sidermans’

expropriation claims relate to property which has been used in

commercial activities in the United States. Argentina’s

statement that the Sidermans’ suit is based upon "[o]ther

contacts between a defendant foreign state and the foreign

State, unrelated to a particular cause of action" (/d.) is wrong

as a matter of fact. Moreover, to the extent Argentina presses

this point, it is a matter more appropriately resolved in the

district court on remand and not in this Court in the first

instance.*

The Ninth Circuit also found that the allegations of

the Complaint and supporting evidence meet clause 2 of

section 1605(a)(2), which requires that the action be based

“upon an act performed in the United States in connection

with the commercial activity of the foreign state elsewhere."

Again, the clause 2 requirements are met based upon the

commercial activities of Argentina with regard to the Hote!

Gran Corona. As the Ninth Circuit explains:

"The Sidermans’ causes of action for

conversion, constructive fraud, intentional

interference with business relationships and

* Last Term, this Court agreed to hear Saudi Arabia v. Nelson,

923 F.2d 1528 (11th Cir. 1991) cert. granted, No. 91-522, June 6.

1992, a case from the Eleventh Circuit interpreting Clause 1 of

section 1605(a)(2) of the FSIA. Petitioners argue that because

Nelson is presently on review before this Court, the Court must

likewise review the decision of this case, because it too, in part,

involves interpretation of Clause 1 of section 1605(a4)(2). (Petition

at 22-23). To the extent the Nelson case is relevant to the

determination of subject matter jurisdiction in this case, the district

court will apply this Court’s decision in Nelson on remand.

15

breach of fiduciary duty directly relates,

therefore, to Argentina’s acts in this country.

Argentina undertakes those acts, furthermore,

in connection with commercial activity

elsewhere, namely its operation of the Hotel.

The Sidermans’ claims thus fall squarely within

Clause two of the commercial activity

exception.

965 F.2d at 710.

Clause 3 of section 1605(a)(2) requires that the claim

must be based "upon an act outside the territory of the United

States in connection with a commercial activity of the foreign

state elsewhere and that act causes a direct effect in the

United States." The Ninth Circuit found that the Sidermans

may be able to fit their action within clause 3 if they can show

that they are entitled to receive dividends in the United States

from INOSA, their family-owned corporation which was

expropriated from them by Argentina.”

Nowhere in their Brief have Petitioners shown that

this application of the three clauses of 1605(a)(2) to the facts

of this case by the Ninth Circuit ts incorrect. Petitioners cite

no case from this Court showing that the Ninth Circuit

erroneously analyzed section 1605(a)(2) of the FSIA. Nor

have Petitioners shown that the Court of Appeals’ opinion is

in conflict with the decisions of any other Circuit.

> The Court of Appeals did not consider it crucial for the

Sidermans to mect the requirements of Clause 3 of section

1605(a)(2), since it already found that the Sidermans had satisfied

the requirements for subject matter jurisdiction under clauses | and

2 of 1605(a)(2). 965 F.2d at 711.

16

Two objections can be gleaned from Petitioners’ brief,

neither one of which is supported by legal authority.

First, Petitioners object to the Ninth Circuit’s

application of 1605(a)(2), the commercial activity exception,

to claims involving takings, or expropriations, of property by

a foreign government. Petitioners assert that United States

courts can obtain jurisdiction over such suits only under

section 1605(a)(3), the international takings exception of the

FSIA. (Petition at 19.)

However, Petitioners cite no authority for the

proposition that claims against foreign sovereigns arising out

of international takings can only be examined under section

1605(a)(3). Nothing in the language of the FSIA, nor its

legislative history, nor any decision of this Court, prevents a

district court from finding subject matter jurisdiction in a case

involving an international taking, when that taking leads a

foreign government to carry on commercial activities which

also meet the requirements of section 1605(a)(2). Plaintiffs’

jurisdictional allegations fall squarely within the plain meaning

of the FSIA.

Petitioners’ second objection to the application of

section 1605(a)(2) to the expropriation claims is that such a

lawsuit, is based "upon a quintessentially sovereign or

governmental act,” namely the taking or expropriation of the

Sidermans’ property by Argentina. (Petitioner’s Brief at 23.)

However, Petitioners cite no authority that prevents a district

court from taking subject matter jurisdiction over a taking, or

expropriation, merely because it was done by a forcign

governmental authority.

Indeed, the Court of Appeals’ analysis is entirely

consistent with this Court’s subsequent decision in Republic of

Argentina v. Weltover, S04 U.S. ___, 119 L.Ed. 2d 394, 403-407

(1992). See 965 F.2d at 708-710. Without directly so stating,

Argentina is arguing for the return of the rule of absolute

sovercign immunity, namcly that if an act is done by a foreign

17

sovereign, the foreign sovereign then cannot be sued for such

an act. Obviously, this is not the law of the United States.

See Argentine Republic v. Amerada Hess Shipping Corp., supra,

458 U.S. at 434, n/.

2. Section 1605(a)(3)

The Court of Appeals also found that the complaint

and the supporting evidence stated a basis of subject matter

jurisdiction upon clause 2 of section 1605S(a)(3), the

international takings exception. Clause 2 of the international

takings exception provides that a foreign state is not immune

in an action "in which rights and property taken in violation of

international law are an issue and... that property or any

property exchanged for such property is owned or operated by

an agency or instrumentality of the foreign state and that

agency or instrumentality is engaged in a commercial activity

in the United States..."

The Court of Appeals found that Argentina violated

the international law of expropriation when Argentine officials

seized INOSA because the Siderman family is Jewish, a

discriminatory motivation based on ethnicity. 965 F.2d at 712.

Moreover, INOSA was seized for the personal profit of

Argentine military officials and not for any public purpose.

The Court of Appeals found that such an expropriation clearly

violates international law. Jd. Argentina does not dispute this

finding.

Thereafter, the Ninth Circuit found that INOSA, being

wholly taken over by the Argentine government, became an

"agency or instrumentality" of Argentina, as defined in section

1603(b) of the FSIA. Examining again the tourist activities of

the Hotel Gran Corona, owned by INOSA, in the United

States, the court found that the final requirement under

Clause 2 - that the agency or instrumentality must be engaged

in a commercial activity in the United States - is also met.

18

Argentina alleges that this analysis by the Ninth Circuit

is "invalid." (Petition at 21.) Argentina, however, fails to

provide a single authority for this statement. Again, Argentina

points to no language of the FSIA, or its legislative history, or

any decision of this Court, or of any other Circuit in support

of this argument.

B. Torture Claims

With rhetorical flourish, Petitioners accuse the Court

of Appeals of "sitting in judgment on acts performed by

foreign states in their own territories," (Petition at 25),

“examining the ‘democracy quotient’ of foreign governments"

(/d. at 25-26), “exporting United States law into the territories

of foreign states," (/d. at 26), and even "assum|ing] the role of

a surrogate for the President and the Secretary of the State in

the conduct of the United States’ foreign relations,” (/d.)

In fact, the Court of Appeals did nothing of the sort.

Rather, its conclusion that implied waiver exists under section

1605(a)(1) is based upon the extraordinary facts of this case.

Argentina was the first to resort to courts in the

United States in its efforts to continue its persecution of the

Siderman family. After having filed bogus criminal

proceedings in Argentina against Jose Siderman, Argentina

pursued Mr. Siderman in American courts.

Under such facts, the Court of Appeals held that it

was ‘confrontied] [with] a situation where Argentina

apparently not only envisioned United States court

participation in its persecution of the Sidermans but by its

actions deliberately implicated our courts in that persecution,”

965 F.2d at 721-22, and found that the Sidermans met their

burden under section 1605(a)(1) of the FSIA.

The Court of Appeals emphasized that its ruling on

implied waiver is limited to the unique factual circumstances

of this case:

19

We do not suggest that because Argentina m

ay have implicitly waived its immunity in this

Suit, any foreign sovereign which takes actions

against a private party in our counts opens th

e way to all manner of suit by that party. To

support a finding of implied waiver, there mu

st exist. a direct connection between the

sovereign’s activitics in our courts and the

plaintiff's claims for relief. Only because the

Sidermans have presented evidence — that

Argentina’s invocation of United States judicial

authority was part and parcel of its efforts to

torture and prosecute Jose Siderman have th

ey advanced a sufficient basis for invoking th

at same authority with respect ot their cause of

action for torture. It will be up to the district

court to determine whether the requisite

connection exists.

Id. at 722 (emphasis added)

Petitioners argue, without explanation, that the holding

below contravenes this Court’s opinion in Argentine Republic

v. Amerada Hess Shipping Corp., supra. (Petition at 24) In

fact, the Court of Appeals decision is fully consistent with

Amerada Hess in requiring the Sidermans to demonstrate th

at the district court has subject matter jurisdiction under the

specific exceptions of the FSIA.

Again, Petitioners have failed to show how. the

appellate court’s decision contravenes the language of the

FSIA, the FSIA’s legislative history, or any decision of this

Court or any Circuit.

20

CONCLUSION

For all of the foregoing reasons, the Petition for Writ

of Certiorari should be denied.

October 9, 1992

Respectfully submitted

PAUL L. HOFFMAN

Counsel of Record

MICHAEL J. BAZYLER

SCOTT W. WELLMAN

Counsel for Respondents