Petition for Writ of Certiorari — Konanykhine v. Izvestia Newspaper

FILED

() Supreme Court, U.8.

01 103 yu ! 7 2003

No. ——

LTO

IN THE

Supreme Court of the Anited States

ALEXANDRE KONANYKHINE,

Petitioner,

Vv.

IZVESTIA NEWSPAPER and EDITORIAL STAFF

OF IZVESTIA NEWSPAPER,

Respondents.

On Petition for a Writ of Certiorari to the

Virginia Supreme Court

PETITION FOR WRIT OF CERTIORARI

MELISSA WARNER SCOGGINS JOHN PAUL SZYMKOWICZ *

4129 Scotfield Drive JOHN THOMAS SZYMKOWICZ

Chesapeake, VA 23321 SZYMKOWICZ & ASSOCIATES, P.C.

(757) 465-3036 1899 L Street, N.W., Suite 250

Washington, DC 20036

* Counsel of Record (202) 862-8500

AIA SE RNIN MINION IS TS SERA R I AT PI IIT SING SES ME I ASIN SERINE SS 9 ES SEBS

WILSON-EPES PRINTING Co., INC. — (202) 789-0096 - WASHINGTON, D.C. 20001

QUESTIONS PRESENTED

A 1935 agreement between the United ‘States and the

former Soviet Union established procedures to be followed in

the execution of letters rogatory.. This agreement lay

dormant and without judicial interpretation for almost sixty

years, but was recently resurrected in a series of contradictory

decisions concerning service of process on defendants located

in the Russian Federation.

The questions presented are:

1. Whether the 1935 agreement is valid.

2. Whether the 1935 agreement provides the

exclusive method of perfecting service of process on

defendants located in the Russian Federation.

3. Whether the trial court erred in vacating a default

judgment and in dismissing a civil action against a

Russian defendant on the sole ground that service of

process was not perfected via letters rogatory pursuant to

the 1935 agreement.

* Agreement Relating to the Procedure to be Followed in the Execution

of Letters Rogatory; Exchange of Notes at Moscow, Nov. 22, 1935,

U.S.—U.S.S.R., 49 Stat. 3840, E.A.S. No. 83, II Bevans 1262. (“1935

agreement”) (reprinted at pages 15a-23a of the-appendix).

(i)

TABLE OF CONTENTS

Page

QUESTION PRESENTED .........s:0sssssssersnsnsnsnnssenenenenens i

TABLE OF CITED AUTHORITIES. ..........:ceseeeseeeeeeeees vii

CITATIONS OF OPINIONS AND ORDERS

BELOW .......ccccecscocssccsscscsscccssesccseesssssssscsssssssensssensens l

BASIS FOR JURISDICTION. ............:ccsersseeseeeeneensenenees 2

INTERNATIONAL AGREEMENT INVOLVED IN

THIS CASE .......ccccsccesssccssscccssseeeensseessessnsnsennsssnnessners 2

STATEMENT OF THE CASE..........:sscseesseereeeensereneneees 3

A. Introduction ...........cccscssceseseeseenensssernseeseneesnnenenss 3

B. Background of Parties, Service of Process and

Default Judgment ..........-.sssseserserseensnnsensnnseesnnees 3

C. Orders Dismissing Case based on Non-

compliance with 1935 Agreement ..........-+-+-+++++ 5

1. Trial Court Orders...........:ccscceseresserreeeneeeeenes 5

| 2. Virginia Supreme Court Refusal to Review

Trial Court Orders ...........scsseessseeeresenenneeeenes 5

REASONS FOR GRANTING THE WRIT........-.-+-+++++ 6

I RECENT CONFLICTING U.S. DISTRICT

COURT DECISIONS INTERPRETING THE

LONG DORMANT 1935 AGREEMENT

BETWEEN THE UNITED STATES AND

SOVIET UNION REVEAL A NEED FOR

CLARIFICATION REGARDING THE AP-

PLICABILITY OF THIS AGREEMENT TO

SERVICE OF PROCESS ON RUSSIAN

DEFENDANTS .........:00esseeesesssenesensnenennesnnnenenses 6

A. Completely Conflicting Decisions of U.S.

District Courts Interpreting the 1935

AQTECMEN.........ceseseererserenenennenensnnsnsnennenenenees 7

B. Importance of a Definitive Interpretation

of the 1935 Agreement............ssesereeereeeeees 9

(iii)

iv

TABLE OF CONTENTS—Continued

Il. THE LOWER COURT ERRED IN HOLD-

ING THAT SERVICE OF PROCESS ON A

RUSSIAN DEFENDANT IS_ INVALID

UNLESS PERFECTED VIA _ LETTERS

ROGATORY PURSUANT TO THE 1935

PUETINEIN TS sccnesnniccnscencccnsoqnstansenennnssennsstnnanacne

A. The Plain Language of the 1935 Agree-

ment does not Set Forth the Exclusive or

Mandatory Method of Perfecting Service

on a Russian Defendant ...................cceceeeeeees

1. Societe Nationale’s Literal Interpreta-

RGN RR seesecnsictscinicsisnnanitininieninsnhidntinaninsicne

2. The Foreign Sovereign Immunities Act

does not Require a U.S. Plaintiff to

Serve the Russian Government via

EURRES TET cesecesnnvennptnnntveectanenrennatie

B. Izvestia did not Contest Service in its

Original Response to Konanykhine’s Suit...

. AN INTERPRETATION OF THE _ 1935

AGREEMENT WHICH REQUIRES SERV-

ICE TO BE PERFECTED ON A RUSSIAN

DEFENDANT VIA LETTERS ROGATORY

RENDERS U.S. JUDICIAL SOVEREIGNTY

SUBSERVIENT TO THE JUDICIAL SOV-

EREIGNTY OF THE RUSSIAN FED-

A. The Russian Legal System is a to

Ouateide Wenfteren 006 iccscccccccecessisccccssesseccessccsee

1. The Soviet Government has Already

Protected Izvestia from a US.

LOE cn cshissictitnanenshanittinptiinsisienahaohadldeseaie

Page

10

10

v

TABLE OF CONTENTS—Continued

2. The Russian Government has Perse-

CUbOd TOMA YES .......ccccrsescssccassscsseness

CATE AIT csiscnnsteniainnsitintiscatesssbiinhabiinisbiintasisssnadesiid

APPENDICIES

Virginia) Supreme Court Order refusing

discretionary petition for appeal, dated March 5,

Arlington County Circuit Court Order vacating

default judgment dated March 10, 2000................

Arlington County Circuit Court Order quashing

service and dismissing case, dated October 13,

Arlington County Circuit Court Letter Opinion

quashing service and dismissing case, dated

FE Feds te ceicdctentiactininnininiiateanielatiariancaninpad

Arlington County Circuit Court Final Judgment

Order, dated December 16, 1999 0.0.0... cescssceseee

Arlington County Circuit Court Order finding

Editorial Staff of Izvestia Newspaper to be in

Default, dated April 17, 1998 .............ccccssscssssssssers

Arlington County Circuit Court Order finding

Izvestia Newspaper to be in Default, dated April

Virginia Supreme Court Order denying Petition for

Rehearing, dated April 20, 2001 ...............cssscceseeee

Agreement Relating to the Procedure to be

Followed in the Execution of Letters Rogatory;

Exchange of Notes at Moscow, Nov. 22, 1935,

U.S.—U.S.S.R., 49 Stat. 3840, E.A.S. No. 83, I

I Si itisicivhiansatichininscisceedaginasiiaiaieahccebtipaiisanpdes

2a

4a

vi

TABLE OF CONTENTS—Continued

Izvestia’s Response to Konanykhine’s Initial

UDINE scxcecececceessusseqenennsusaseceasesoncnenbetnnbesbecocessnsecete

Forum Financial Group, L.L.C. v. President and

Fellows of Harvard College, 199 F.R.D. 22 (D.

Semtek International Inc. v. Merkuriy Lid., C.A.

No. 95-11920-RCL, 1996 U.S. Dist. LEXIS

SEB OG GD. BER. Tp accsneveneentennntnsnscettinesvinisinaiancinte

JL. Reardon Associates, Lid. v. NPO Energo-

mash, C.A. No. 97-10409-GAO, (D. Ma. 1998)....

40a

vii

TABLE OF CITED AUTHORITIES

CASES Page

Compagnie NOGA D'’ Importation Et D’ Expor-

tation S.A. v. Russian Federation, No. 00-CIV-

0632 (WHP) and No. 00-CIV-6995 (WHP),

(combined cases), (S.D.N.Y. 2000)

Filus v. LOT Polish Airlines, 819 F. Supp. 232

(S.D.N.Y. 1993)

Filus v. LOT Polish Airlines, 907 F.2d 1328

(2nd Cir. 1990)

Forum Financial Group, L.L.C. v. President and

Fellows of Harvard College, 199 F.R.D. 22

(D. Me. 2001)

Gregorian v. Izvestia, 658 F. Supp. 1224 (C.D.

Ca. 1987)

Japan Whaling Association v. American Ceta-

cean Society, 478 U.S. 221 (1986)

J.L. Reardon Associates, Ltd. v. NPO Energo-

mash, C.A. No. 97-10409-GAO, (D. Ma.

Kozorowski v. Russian Federation, 1997 U.S.

App. LEXIS 26266 (9th Cir. 1997)

Mullane v. Central Hanover Bank and Trust Co.,

339, U.S. 306 (1950)

Semtek International Inc. v. Merkuriy Ltd., C.A.

No. 95-11920-RCL, 1996 U.S. Dist. LEXIS

22248 (D. Ma. 1996)

Societe Nationale Industrielle Aerospatiale v.

United States District Court for the

Southern District of lowa, 482 U.S. 522

9, 11, 12, 13, 14

Trans World Airlines, Inc. v. Franklin Mint

Corp., 466 U.S. 243 (1984)

United States v. Alvarez-Machain, 504 U.S. 655

Volkswagenwerk Aktiengesellschaft, v. Schlunk,

486 U.S. 694 (1988)

viii

TABLE OF CITED AUTHORITIES—Continued

STATUTES AND RULES Page

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

OR BO, Bails OE BOM. cancnscncccccscrcescssenscscnsnsteonsnes 14, 15

2B UBL. § TZSTA) GRO cccccccccrcscccesccsscccsssecssesces

28 U.S.C. § 2403(a) (2001)........scccsccccrsecrreeerreeenees

VA. CODE ANN. § 8.01-328.1 (Michie 1997).........

I Ce Bi Pi cities ciiniiccisieinadciiadanispicmnaiinbiniisinmenionen

SUP. Cr. BR. ZH AGB) cccccreccesccccecscesscacesesssocensscseses —

TREATIES AND INTERNATIONAL

AGREEMENTS

Agreement Relating to the Procedure to be

Followed in the Execution of Letters

Rogatory; Exchange of Notes at Moscow,

Nov. 22, 1935, U.S.—U.S.S.R., 49 Stat. 3840,

E.A.S. No. 83, II Bevans 1262.............sssscesssees passim

Hague Convention on the Taking of Evidence

Abroad in Civil or Commercial Matters,

March 18, 1970, 23 U.S.T. 2555, T.LA.S. No.

Nm nN kN LY

FAFA ccccocecssnenssrinntrnenienpaninantatinbianneeonnincintintocenen 11, 12, 13

MISCELLANEOUS

BLACK’S LAW DICTIONARY 1092 (3rd ed.

NDAD) scceresersscccsscsnbacanetehionsnensspsmateionsentnnabigncceasoss 10, 11

U.S. Dept. of Commerce, Business Information

Service for the Newly Independent States,

U.S—Russia Trade Highlights (2000),

available at http://www.bisnis.doc.gov/bisnis/

country/USRStrade_2000.1tM ...........sc0sssseeseees 9

U.S. Dept. of State, FY 2001 Country Com-

mercial Guide: Russia, July 2001 at 47............. 17

U.S. Dept. of State, Judicial Assistance in the

Russian Federation, available at http://travel.

state.gov/russia_legal Ntml...............scsessesseeeeees

IN THE

Supreme Court of the United States

No.

ALEXANDRE KONANYKHINE,

Petitioner,

Vv.

IZVESTIA NEWSPAPER and EDITORIAL STAFF

OF IZVESTIA NEWSPAPER,

Respondents.

On Petition for a Writ of Certiorari to the

Virginia Supreme Court

PETITION FOR WRIT OF CERTIORARI

Alexandre Konanykhine (“Konanykhine”) respectfully

petitions for a writ of certiorari to the Virginia Supreme

Court.

CITATIONS OF OPINIONS AND ORDERS BELOW

The Arlington County Circuit Court order vacating the

default judgment is reproduced at page 2a of the appendix

(“Pet App.”). The Arlington County Circuit Court letter

opinion quashing service of process and dismissing the case

against respondents is reproduced at Pet. App. 6a. The

Arlington County Circuit Court order formally quashing

service of process and dismissing the case against respondents

is reproduced at Pet. App. 4a. The Virginia Supreme Court

order refusing to consider Konanykhine’s petition for appeal

2

is reproduced at Pet. App. la. The Virginia Supreme Court

order denying Konanykhine’s petition for rehearing is

reproduced at Pet. App. 14a. No opinion or order was

reported.

BASIS FOR JURISDICTION

The Arlington County Circuit Court vacated the default

judgment on March 10, 2000. Pet. App. 2a. The Arlington

County Circuit Court quashed service of process and

dismissed the case on October 13, 2000. Pet. App. 4a. The

Virginia Supreme Court denied Konanykhine’s petition for

appeal on March 5, 2001. Pet. App. la. The Virginia

Supreme Court denied Konanykhine’s petition for rehearing

on April 20, 2001. Pet. App. 14a.

The jurisdiction of this Court is invoked pursuant to 28

U.S.C. § 1257(a) (2001) and Sup. CT. R. 10(c) since this case

involves an important question of federal law that has not

been, but should be, settled by this Court. Specifically, the

state court applied its interpretation of a treaty between the

United States and the former Soviet Union in vacating a

default judgment and in dismissing a case against a defendant

located in the Russian Federation.

Since 28 U.S.C. § 2403(a) (2001) may apply, notifications

required by Sup. CT. R. 29.4(b) have been made.

INTERNATIONAL AGREEMENT INVOLVED

IN THIS CASE

Agreement Relating to the Procedure to be Followed in the

Execution of Letters Rogatory; Exchange of Notes at

Moscow, Nov. 22, 1935, U.S.—U.S.S.R., 49 Stat. 3840,

E.A.S. No. 83, Il Bevans 1262.

Because of its length, the full text of this agreement is set

forth at Pet. App. 15a-23a.

3

STATEMENT OF THE CASE

A. Introduction

This case presents the narrow issue of whether a party

suing a Russian defendant in a United States court must resort

to the exclusive use of the complicated, dilatory and

expensive system of letters rogatory in order to perfect service

on the Russian defendant. In the instant matter, a Russian

defendant who transacted business in Virginia, was served

with process pursuant to the Virginia long-arm statute. This

statute prescribed delivery of the initial pleadings and Russian

translations thereof to the Secretary of the Com-

monwealth of Virginia, who, under Virginia law, was the

Russian defendant’s involuntary agent for service of process.

The Russian defendant filed a response to Konanykhine’s

initial pleading but did not raise defective service as a

defense. Aside from filing its response, the Russian defend-

ant failed to further participate in the litigation until after a

default judgment was entered. The sole issue to be decided is

whether service on the Russian defendant’s involuntary agent

for service of process which actually reached the Russian

defendant is valid, despite the 1935 agreement. Agreement

Relating to the Procedure to be Followed in the Execution of

Letters Rogatory; Exchange of Notes at Moscow, Nov. 22,

1935, U.S.—U.S.S.R., 49 Stat. 3840, E.A.S. No. 83, II

Bevans 1262. (“1935 agreement”) Pet. App. 15a-23a.

B. Background of Parties, Service of Process and

Default Judgment

Alexandre Konanykhine was born in the former Soviet

Union in 1966. By 1992, Konanykhine’s estimated worth

was over three hundred million dollars, making him one of

the wealthiest men in Russia. In addition to his business

pursuits, Konanykhine was politically active and supported

Russian President Boris Yeltsin’s anti-corruption, pro-

capitalist and pro-democratic policies by providing half of

4

President Yeltsin’s campaign funds. In mid-1992, several

current or former KGB members kidnapped Konanykhine and

seized control of his businesses under threat of death. After

escaping from his kidnappers, Konanykhine fled to the United

States, where he sought political asylum. In awarding

Konanykhine political asylum, the United States Immigration

Court found that the Russian government engineered false

claims against Konanykhine in order to punish him for

exposing corruption among Russian government and business

officials.

Izvestia Newspaper and Editorial Staff of Izvestia

Newspaper (collectively “Izvestia”) publish the newspaper,

Izvestia, in Moscow, Russia. In 1996 and 1997, Izvestia

published several defamatory articles concerning Konanyk-

hine. Because Izvestia transacted business in Virginia by

employing an editor in Virginia, by locating its U.S. bureau in

Virginia, and by delivering the defamatory articles into

Virginia, Konanykhine filed a civil action in the Arlington

County Circuit Court pursuant to the Virginia Long-Arm

Statute, VA. CODE ANN. §8.01-328.1 (Michie 1997). In

December 1997, Konanykhine served both English and

Russian language copies of his initial pleadings on the

Secretary of the Commonwealth of Virginia, who, under

Virginia law, was Izvestia’s involuntary agent for service of

process. Izvestia received the documents served on the

Virginia Secretary of the Commonwealth and filed a legally

defective response to Konanykhine’s initial pleading. Pet.

App. 24a-26a. Izvestia’s response did not raise defective

service as a defense. In April 1998, the trial court found that

valid service of process was made upon Izvestia and that

Izvestia was in default for its failure to properly respond to

Konanykhine’s claims. Pet. App. 10a-13a. Aside from filing

its initial response, Izvestia failed to further participate in the

defamation litigation or jury trial on Konanykhine’s damages.

In December 1999, the jury returned a $33,500,000 verdict in

5

Konanykhine’s favor and the trial court entered judgment by

default in the amount of the jury verdict. Pet. App. 8a.

C. Orders Dismissing Case based on Non-compliance

with 1935 Agreement

1. Trial Court Orders

In February 2000, Izvestia filed its motion to vacate the

default judgment, claiming that the 1935 agreement required

service of process via letters rogatory. In March 2000, after

extensive briefing and oral argument, the trial court vacated

the default judgment on the sole ground that “service was not

perfected pursuant to the 1935 agreement.” Pet. App. 2a.

Konanykhine objected to the entry of this order interpreting

the 1935 agreement pursuant to Virginia law by endorsing the

order “SEEN AND OBJECTED.” Izvestia then moved to

dismiss Konanykhine’s case since service of process was not

perfected via letters rogatory. On August 25, 2000, after

entensive briefing and oral argument, the trial court dismissed

the case via a letter opinion, holding that “the only proper

means of service on Defendant Izvestia Newspaper is through

letters rogatory. No such service was made. Thus, service

was not proper in this case.” Pet. App. 6a. On October 13,

2000, the trial court incorporated its letter opinion into a

formal order dismissing the case. Pet. App. 4a. Konanykhine

objected to the entry of this order interpreting the 1935

agreement pursuant to Virginia law by endorsing the order

“SEEN AND OBJECTED TO ON ALL GROUNDS

ASSERTED ON BRIEF AND AT ORAL ARGUMENT.”

2. Virginia Supreme Court Refusal to Review Trial Court

Orders

On November 21, 2000, Konanykhine petitioned the

Virginia Supreme Court for review of the trial court’s orders

vacating the default judgment and dismissing the case,

claiming that the 1935 agreement did not require service to be

6

perfected via letters rogatory. On March 5, 2001, the Virginia

Supreme Court refused to exercise its discretion to review the

trial court’s orders in an unpublished two sentence order. Pet.

App. la. On March 19, 2001, Konanykhine filed his timely

petition for rehearing of the Virginia Supreme Court’s refusal

to review the trial court’s orders. On April 20, 2001, the

Virginia Supreme Court denied Konanykhine’s petition for

rehearing. Pet. App. 14a.

REASONS FOR GRANTING THE WRIT

I. RECENT CONFLICTING U.S. DISTRICT

COURT DECISIONS INTERPRETING THE

LONG DORMANT 1935 AGREEMENT BE-

TWEEN THE UNITED STATES AND SOVIET

UNION REVEAL A NEED FOR CLARIFICA-

TION REGARDING THE APPLICABILITY OF

THIS AGREEMENT TO SERVICE OF PRO-

CESS ON RUSSIAN DEFENDANTS

In 1935, the United States and Soviet Union entered into an

agreement regarding the procedures for execution of letters

rogatory. Agreement Relating to the Procedure to be

Followed in the Execution of Letters Rogatory; Exchange of

Notes at Moscow, Nov. 22, 1935, U.S.—U.S.S.R., 49 Stat.

3840, E.A.S. No. 83, If Bevans 1262. Pet. App. 15a-23a.

The 1935 agreement did not establish the exclusive or

mandatory method of perfecting service of process on a

defendant located in the Soviet Union, as the lower court in

the instant matter held, but rather sets forth such ministerial

procedures as the fees to be paid in the execution of letters

rogatory, the name of the court to which the letters rogatory

were to be addressed and nature of the documents which must

accompany the letters rogatory. In addition, there were very

few, if any, private parties in the Soviet Union engaged in

international transactions when the agreement was made.

Therefore, in all likelihood, the 1935 agreement’s drafters did

7

not contemplate that this agreement would require perfection

of service via letters rogatory on a defendant which had

conducted business in the U.S. but is domiciled in the Soviet

Union, or as in the instant case, the successor state, the

Russian Federation.

A. Completely Conflicting Decisions of U.S.

District Courts Interpreting the 1935

Agreement

For almost sixty years, the 1935 agreement lay dormant and

without court interpretation. In 1993, a court, for the first

time, interpreted the 1935 agreement. In Filus v. LOT Polish

Airlines, 907 F.2d 1328 (2nd Cir. 1990), which involved the

U.S.S.R.’s claim of sovereign immunity, the Soviet Union

objected to service of process based, in part, on non-

compliance with the 1935 agreement. In Filus, the Second

Circuit remanded the case to the district court, stating “[t]he

legality of the service of process obtained by plaintiff must be

- evaluated in the light of the diplomatic exchange of notes [the

1935 agreement].” Filus, 907 F.2d at 1333. On remand, the

district court found that the-1935 agreement does not require

service via letters rogatory, stating “[p]lainly this exchange

does not constitute an ‘applicable international convention’

for service of judicial documents. It covers procedures ior

each country to honor letters rogatory issued by courts of the

other country.” Filus v. LOT Polish Airlines, 819 F. Supp.

232, 237 (S.D.N.Y. 1993). Then, in Semtek International Inc.

v. Merkuriy Ltd., C.A. No. 95-11920-RCL, 1996 U.S. Dist.

LEXIS 22248 (D. Ma. 1996), reprinted at Pet. App. 33a, the

court came to a different interpretation of the 1935 agreement.

In Semtek, the court observed that “[pJursuant to [the

agreement], the service of United States judicial documents

upon a defendant in Russia is proper if it is accomplished by

means of a letter rogatory.” Semtek also observed that

“fwjhile there is nothing in [the 1935 agreement] which

explicitly precludes other methods of service other than letters

8

rogatory, a Supreme Soviet decrees strongly indicates that this

is the case.” In 1998, the United States District Court for the

District of Massachusetts again held that the 1935 agreement

“requires service by letters rogatory.” JL. Reardon

Associates, Ltd. v. NPO Energomash, C.A. No. 97-10409-

GAO, (D. Ma. 1998), reprinted at Pet. App. 40a. In 2000, the

trial court in the instant matter, in reliance upon Semtek and

Reardon, vacated the default judgment and dismissed the case

against Izvestia even though Izvestia had actual knowledge of

Konanykhine’s case, and filed a response in the case, solely

because Konanykhine did not perfect service via letters

rogatory pursuant to the 1935 agreement. Pet. App. 2a-7a.

The Virginia Supreme Court exercised its discretion to refuse

to consider Konanykhine’s appeal of the trial court’s orders

vacating the default judgment and dismissing the case. Pet.

App. la. Also in 2000, a case in the Southern District of New

York involved the interpretation of the 1935 agreement, but

the defendant in that case, the Russian Federation, withdrew

objections to service of process prior to court ruling on the

Russian Federation’s objections. See Compagnie NOGA

D’ Importation Et D’ Exportation S.A. v. Russian Federation,

No. 00-CIV-0632 (WHP) and No. 00-CIV-6995 (WHP),

(combined cases), (S.D.N.Y 2000). Finally, in 2001, a court

held that the 1935 agreement “merely sets forth procedures

for executing letters rogatory” and “does not prohibit other

means of service.” Forum Financial Group, L.L.C. v.

President and Fellows of Harvard College, 199 F.R.D. 22 (D.

Me. 2001), reprinted at Pet. App. 27a. In fact, Forum

Financial observed that the “continuing validity and

applicability of the 1935 Agreement with the U.S.S.R. (not

Russia) is unclear” and compared Semtek, which held that

service on Russian defendants must be made via letters

rogatory, with the U.S. State Department publication Judicial

Assistance in the Russian Federation, available at

http://travel.state.gov/ russia_legal.html which stated that

- gees esseseeenessneenrnesmnmencneemesneeeanneacmenocnsnstnacsteenadnen_annpasepntemeaemnemmeemnemesmenenmmenmmanmmenaaee ee

9

“[a]t present, no bilateral agreement on judicial assistance

exists between the United States and Russia.”

B. Importance of a Definitive Interpretation of

the 1935 Agreement

The issue presented by this case is important. In Societe

Nationale Industrielle Aerospatiale v. United States District

Court for the Southern District of lowa, 482 U.S. 522, 531

(1987), this Court noted that there has been a “substantial

increase -in litigation with foreign aspects arising, in part,

from the unparalleled expansion of international trade and

travel in recent decades.” Since this Court’s decision in

Societe Nationale in 1987, the Iron Curtain has fallen,

providing much opportunity for investment in, and trade with,

former Eastern-bloc nations, such as the Russian Federation.

In fact, total bilateral trade between the United States and

Russia expanded 32% in 2000 to more than $10 Billion. U.S.

Dept. of Commerce, Business Information Service for the

Newly Independent States, U.S—Russia Trade Highlights

(2000), § Il, available at http://www.bisnis.doc.gov/bisnis/

country/USRStrade_2000.htm. U.S. imports from Russia in

2000 reached an all-time high of nearly $7.8 billion,

increasing more than 34% over 1999. Id. at § IV.

Furthermore, Russia provides more products to the United

States than all other Central and Eastern European countries

combined. /d. at § VI. With such trade inevitably comes

litigation. The particular issues presented by this case are

likely to recur with some frequency. Indeed, it is to be

expected that plaintiffs in U.S. courts will attempt to perfect

service on defendants located in the Russian Federation in

ways other than by letters rogatory, which this Court

described as “complicated, dilatory and expensive” and “the

exception, rather than the rule” for obtaining evidence located

in other countries. Societe Nationale, 482 U.S. at 531.

This case provides an ideal vehicle for the Court to resolve

the significant dispute between recent conflicting decisions

10

interpreting the 1935 agreement before additional disputes

involving Russian defendants reach litigation. | More

specifically, this case presents the Court with the opportunity

to provide guidance to plaintiffs in American courts seeking

to perfect service on defendants located in the Russian

Federation and other countries formerly associated with the

Soviet Union.

Il. THE LOWER COURT ERRED IN HOLDING

THAT SERVICE OF PROCESS ON A RUSSIAN

DEFENDANT IS INVALID UNLESS PER-

FECTED VIA LETTERS ROGATORY PURSU-

ANT TO THE 1935 AGREEMENT

A. The Plain Language of the 1935 Agreement

does not Set Forth the Exclusive or

Mandatory Method of Perfecting Service on a

Russian Defendant

The plain language of the 1935 agreement evidences no

intent on the part of its drafters to make letters rogatory the

exclusive method of perfecting service on a defendant located

in the Russian Federation; nor does the history of the 1935

agreement evidence any such intent. Nothing in the 1935

agreement even refers to service of process on a defendant,

but rather, the agreement sets forth such ministerial

procedures as the fees to be paid in the execution of letters

rogatory, the name of the court to which the letters rogatory

were to be addressed and nature of the documents which must

accompany the letters rogatory. Pet. App. 15a-23a. In fact, a

leading American law dictionary, available to the 1935

agreement’s drafters, defined “letters rogatory”’ as:

[a] formal communication in writing, sent by a court in

which an action is pending to a court or judge of a

foreign country, requesting that the testimony of a

witness resident within the jurisdiction of the latter court

may be there formally taken under its direction and

transmitted to the first court for use in the pending

action.

11

BLACK’S LAW DICTIONARY 1092 (3rd ed. 1933). This

1933 edition of Black’s Law Dictionary did not define the

term “letters rogatory” in any way as encompassing the

service of process on a defendant.

1. Societe Nationale’s Literal Interpretation

Rule

Courts have the authority to construe treaties and executive

agreements. Japan Whaling Association v. American Ceta-

cean Society, 478 U.S. 221, 230 (1986). Societe Nationale

held that “[t}he great object of an international agreement is to

define the common ground between sovereign nations. Given

the gulfs of language, culture, and values that separate

nations, it is essential in international agreements for the

parties to make explicit their common ground on the most

rudimentary of matters.” Societe Nationale, 482, U.S. 522,

537, n.23 (1987). See also Trans World Airlines, Inc. v.

Franklin Mint Corp., 466 U.S. 243, 262 (1984) (Stevens, J.

dissenting). In construing a treaty, as in construing a statute,

the court must first look to its terms to determine its meaning.

United States v. Alvarez-Machain, 504 U.S. 655, 663 (1992).

Since the 1935 agreement makes no mention of service of

process, the trial court was in error in holding that service of

process on a Russian defendant is valid only if perfected via

letters rogatory.

In Societe Nationale, the court interpreted the Hague

Convention on the Taking of Evidence Abroad in Civil or

Commercial Matters, March 18, 1970, 23 U.S.T. 2555,

T.LA.S. No. 7444 (“Hague Convention”). The Hague Con-

vention (like the 1935 agreement) prescribes certain

procedures by which a judicial authority in one contracting

state may request evidence located in another contracting

state. The question presented in Societe Nationale concerned

the extent to which a federal district court is required to

employ the procedures set forth in the Hague Convention

when litigants seek responses to written discovery from an

12

adversary located within a treaty signatory’s territory. Societe

Nationale rejected the interpretation of the Hague Convention

as requiring the use of the procedures set forth in the

Convention to the exclusion of any other discovery

procedures whenever evidence located abroad is sought for

use in an American court. Societe Nationale, 482 U.S.

at 533-34. Societe Nationale held that the Hague Convention

does not provide the exclusive or mandatory procedures for

obtaining documents and information located within the

territory of a foreign signatory. /d. at 529. Societe Nationale

also rejected the interpretation of the Hague Convention as

requiring that the procedures set forth in the Convention be

used before resorting to other methods of gathering evidence.

Id. at 533-34. Like the 1935 Agreement at issue in the instant

case, the Hague Convention had a simple and unambiguous

purpose - “to facilitate the transmission and execution of

Letters of Request [and] to improve mutual judicial

cooperation in civil or commercial matters.” /d., quoting

Hague Convention, 23 U.S.T. at 2557. As should also be the

interpretation of the 1935 agreement at issue in the instant

matter, Societe Nationale held that the Hague Convention’s

preamble “does not speak in mandatory terms which would

purport to describe the procedures for all permissible

transnational discovery and exclude all other existing

practices.” Jd. In addition, Societe Nationale held that the

text of the Hague Convention itself “does not modify the law

of any contracting state, require any contracting state to use

the Convention procedures, either in requesting evidence or in

responding to such requests, or compel any contracting state

to change its own evidence-gathering procedures.” /d.

Societe Nationale further found that the words used in the

Hague Convention “delineate the extent of their agreement,

without prejudice to their existing rights and practices, they

bound themselves to comply with any request for judicial

assistance that did comply with the treaty’s procedures.” /d.

at 537, n.23. The 1935 agreement’s preambles (like the

i - eee

13

Hague Convention’s preamble, as interpreted by Societe

Nationale) simply state:

Confirming conversations between the American Em-

bassy in Moscow and the People’s Commissariat for

Foreign Affairs with regard to the desirability of setting

forth the procedure followed in our respective countries

in the matter of the execution of letters rogatory issuing

out of courts in the other, I have the honor to inform you

of the conditions under which and the manner in which

courts in the United States may execute letters rogatory

issuing out of courts in the Union of Soviet Socialist

Republics.

Note from American Ambassador to the People’s Commissar

for Foreign Affairs, pmbl. Pet. App. 15a. (emphasis added),

and:

Confirming conversations between the People’s Com-

missariat for Foreign Affairs and the American embassy

in Moscow with regard to the desirability of setting forth

the procedure followed in our respective countries in the

matter of the execution of letters rogatory issuing out of

the courts in the other, I have the honor to inform you of

the procedure according to which the courts of the Union

of Soviet Socialist Republics will accept for execution

letters rogatory of courts in the United States of

America.

Note from the People’s Commissar for Foreign Affairs to the

American Ambassador, pmbl. Pet. App. 19a-20a. (emphasis

added).

The 1935 agreement did not modify the laws of the United

States or Soviet Union which were in effect at the time the

agreement was made. The 1935 agreement did not require

either party to change any of its laws upon the entering of the

agreement. The agreement was therefore, as the formal title

of the 1935 agreement suggests, only related to the procedures

to be followed in the execution of letters rogatory.

14

Societe Nationale found that the “utter absence in the

Hague Convention of an exclusivity provision has an obvious

explanation: the contracting states did not agree that its

procedures were to be exclusive.” 482 U.S. 537, n.23.

Societe Nationale further found that “the treaty language that

the parties have agreed upon and ratified fis] a surer

indication of their intentions than the separate opinion’s

hypothesis about the expectations of the parties.” /d. The

1935 agreement, like the Hague Convention, set forth

procedures to be used in the performance of ministerial

judicial tasks such as obtaining evidence and taking witness

testimony. The language used by the drafters of the 1935

agreement is clear. Had the drafters intended that the 1935

agreement apply to service of process on defendants located

in the former Soviet Union, they would have placed such

language in the text of the agreement itself. Since no such

language is present in the 1935 agreement, the Societe

Nationale literal interpretation rule applies — that the 1935

agreement does not require that service of process be

perfected on a Russian defendant via letters rogatory.

2. The Foreign Sovereign Immunities Act

does not Require a U.S. Plaintiff to Serve

the Russian Government via Letters

Rogatory

Even the Foreign Sovereign Immunities Act, 28 U.S.C.

§§ 1330, 1602, et seg. (2001), which confers immunity on

foreign governments, does not require service to be perfected

on the Russian Government via letters rogatory. It is illogical

to interpret the 1935 agreement as requiring service on a non-

governmental entity located in Russia to be perfected via

letters rogatory, but permit service on the Russian government

to be perfected by simply having a U.S. trial court clerk mail a

copy of the summons, complaint and notice of suit, together

with a Russian translation of each document, to the head of

the Russian Federation’s Ministry of Foreign Affairs. See 28

15

U.S.C. § 1608(a)(3) (2001). In fact, a literal reading of the

1935 agreement makes no distinction between a private party

in Russia, such as Izvestia, and the Russian Government

itself; an important fact, considering that neither the Russian

Federation, nor the Soviet Union, are believed to have ever

sought the protection of the 1935 agreement when sued as a

defendant in the United States besides the withdrawn

objections to service of process in the New York case. See

Compagnie NOGA D’ Importation Et D’Exportation S.A. v.

Russian Federation, No. 00-CIV-0632 (WHP) and No. 00-

CIV-6995 (WHP), (combined cases), (S.D.N.Y. 2000). It is,

perhaps, unfortunate that the Russian Federation withdrew its

objections to service of process in the New York case before

the court could rule upon whether the 1935 agreement’s

provision allowing the Soviet government to unilaterally

refuse to permit service on a defendant shields the Russian

government from suit when that government is sued in U.S.

courts pursuant to the Foreign Sovereign Immunities Act, but

it is likely that this issue will reoccur.

B. Izvestia did not Contest Service in its Original

Response to Konanykhine’s Suit

In its original response to Konanykhine’s lawsuit, Izvestia

did not argue that service on its involuntary agent for service

of process was defective or improper pursuant to Virginia

law. Izvestia received actual notice of Konanykhine’s suit,

filed a response to that suit, and failed to further participate in

the litigation until a $33,500,000 default judgment was

entered after a jury trial on damages. Because Izvestia

received actual notice of Konanykhine’s suit, Konanykhine’s

service on the Virginia Secretary of the Commonwealth,

Izvestia’s involuntary agent for service of process, met the

Due Process Clause requirement that every method of service

provide “notice reasonably calculated, under all the circum-

stances, to appraise interested parties of the pendency of the

action and afford them an opportunity to present their

16

objections.” Volkswagenwerk Aktiengesellschaft, v. Schlunk,

486 U.S. 694, 706 (1988), quoting Mullane v. Central

Hanover Bank and Trust Co., 339, U.S. 306, 314 (1950).

Iii, AN INTERPRETATION OF THE 1935 AGREE-

MENT WHICH REQUIRES SERVICE TO BE

PERFECTED ON A RUSSIAN DEFENDANT

VIA LETTERS ROGATORY RENDERS USS.

JUDICIAL SOVEREIGNTY SUBSERVIENT TO

THE JUDICIAL SOVEREIGNTY OF THE

RUSSIAN FEDERATION

An interpretation of the 1935 agreement which requires the

use of letters rogatory in order to perfect service on a Russian

defendant transacting business in the United States will allow

the Russian government to use its own unreviewable

discretion to decide whether an action against the Russian

defendant can proceed in United States courts. The 1935

Agreement provides that “[t]he execution of letters rogatory

issuing out of a court in the United States may be refused in

whole or in part, if the appropriate authorities in the Union of

Soviet Socialist Republics consider that the execution thereof

would affect its sovereignty or safety.” Note from the

People’s Commissar for Foreign Affairs to the American

Ambassador, art. 8. Pet. App. 20a-22a. Requiring U.S.

litigants, in all cases, to attempt to serve defendants located in

the Russian Federation via letters rogatory pursuant to the

1935 agreement renders United States judicial sovereignty

subservient to the judicial sovereignty of a foreign nation.

Russian litigants will have a substantial advantage over

domestic litigants in litigation in United States courts. While

U.S. parties and foreign parties who are not Russian nationals

will be subject to traditional service of process rules,

including long-arm statutes, litigants who are Russian

nationals will be able to hide behind the 1935 agreement,

leaving the plaintiff’s ability to obtain service of process

wholly within the discretion of the Russian government.

17

Thus, if the Russian government refused to permit service via

letters rogatory on the Russian defendant, the party who filed

the suit in the U.S. court would have no way of obtaining

service on the Russian defendant.

A. The Russian Legal System is Subject to

Outside Influences

The U.S. Department of State has stated:

Russia has a body of conflicting, overlapping and

changing laws, decrees and regulations, which has

resulted in an ad hoc and unpredictable approach to

doing business. Independent dispute resolution in

Russia can be difficult to obtain in a developing judicial

system. Regional and local courts are often subject to

political pressure.

U.S. Dept. of State, FY 2001 Country Commercial Guide:

Russia, July 2001 at 47.

Without a stable judicial system in the Russian Federation,

the United States should not cede control over whether a U.S.

_ plaintiff can perfect service on a Russian defendant to a

Russian court which is subject to outside influences.

1. The Soviet Government has Already

Protected Izvestia from a U.S. Lawsuit

Izvestia is no stranger to American courts, having appeared

as a defendant in Kozorowski v. Russian Federation, 1997

U.S. App. LEXIS 26266 (9th Cir. 1997), and, while not hav-

ing filed an appearance, was served with process through

diplomatic channels and failed to respond to the complaint in

Gregorian v. Izvestia, 658 F. Supp. 1224 (C.D. Ca. 1987). In

Gregorian, the Foreign Ministry of the U.S.S.R. rejected the

U.S. State Department’s diplomatic transmittal of the

summons and complaint, citing “the principle of sovereign

equality of states” and stating that “the Soviet State and its

organs enjoy immunity from the jurisdiction of foreign

courts.” Gregorian, 658 F. Supp. at 1227. Had Konanykhine

18

(or any other U.S. plaintiff) attempted to serve Izvestia via

letters rogatory pursuant to the 1935 agreement, the Russian

Government could have, in their sole discretion, protected

Izvestia from such a suit. Since Izvestia received such

protection under the Soviet system, there is no reason to

believe that it would not continue to receive such protection

from the Russian Government.

2. The Russian Goverament has Persecuted

Konanykhine

While in the dying Soviet Union and in the newly-born

Russian Federation, Konanykhine was politically active and

supported Russian President Boris Yeltsin’s anti-corruption,

pro-capitalist and pro-democratic policies by providing half of

President Yeltsin’s campaign funds. In mid-1992, several

current or former KGB members kidnapped Konanykhine and

seized control of his businesses under threat of death. Upon

his escape from his kidnappers, Konanykhine fled to the

United States, where he sought political asylum. In awarding

Konanykhine political asylum, the United States Immigration

Court found that the Russian government engineered false

claims against Konanykhine in order to punish him for

exposing corruption among Russian government and business

officials. Just as it is likely that the Russian Government will

protect Moscow’s leading daily newspaper, /zvestia, from

U.S. lawsuits, it is also likely that the Russian Government

will not permit a pro-democracy and anti-corruption supporter

living outside of Russia, such as Konanykhine, to perfect

service on a high-profile Russian corporation. Therefore,

because the Russian Government, at its sole discretion, can

choose whether or not to allow service on a Russian

defendant, it is illogical that the United States of America

would have ever agreed to make the 1935 agreement the

mandatory and exclusive method of perfecting service on a

Russian defendant.

19

CONCLUSION

The petition for a writ of certiorari should be granted.

Respectfully submitted,

MELISSA WARNER SCOGGINS JOHN PAUL SZYMKOWICZ *

4129 Scotfield Drive JOHN THOMAS SZYMKOWICZ

Chesapeake, VA 23321 SZYMKOWICZ & ASSOCIATES, P.C.

(757) 465-3036 1899 L Street, N.W., Suite 250

Washington, DC 20036

* Counsel of Record (202) 862-8500

July 17, 2001