Petition for Writ of Certiorari — Tenney v. Mitsui & Co., Ltd.

4) mene Ceut U8.

O2 1776 WN 4~ 2093

i OFFICE OF THE CLERK

In the

Supreme Court

of the United States

LESTER I. TENNEY, ¢ a/,

Petttioners,

Vv.

MITSUI & CO., LTD., MITSUI & CO. (USA), INC.,

MITSUI MINING CO. LTD.,

and MITSUI MINING USA INC., |

Respondents,

On Petition for a Writ of Certiorari

to the United States Court of Appeals

for the Ninth Circuit

PETITION FOR A WRIT OF CERTIORARI

Steven M. Schneebaum*/

PATTON BOGGS LLP

2550 M Street, N.W.

Washington, D.C. 20037

(202) 457-6300

Counsel for Petitioners

June 4, 2003 */ Counsel of Record

QUESTIONS PRESENTED

1. Under the “well-pleaded complaint rule,” do the

federal courts have removal jurisdiction over lawsuits filed

in State court and arising under State law, in which the

relevant complaints disclose no federal basis for suit, solely

because the defendants (and the United States as amicus

curiae) contend that the actions are barred by a treaty of the

United States?

2. Is it open to a federal appellate court to speculate as

to how the highest cour: of a State would resolve a question

of interpretation of State law, when the only two State

appellate court decisions on point are in direct conflict and

the matter is currently set for resolution by the State

Supreme Court?

a Does the 1951 Treaty of Peace with Japan, on a

proper reading of all of its terms, prohibit the assertion of

private causes of action by Americans against private

Japanese companies that enslaved them, brutalized them, and

profited from their unpaid labor, even though no treaty in the

history of this Republic has ever been held by this Court to

preclude the assertion of private rights of action by private

citizens against foreign non-government defendants?

STATEMENT OF CORPORATE AFFILIATIONS

All Petitioners are individuals, and there are no

corporate affiliations to disclose on their side.

Table of Contents

QUESTIONS PRESENTED ................sscsssssssssssssssrssssesesers ol

STATEMENT OF CORPORATE AFFILIATIONS ............ li

Te Gr BU a onsen snscescccsscsnscecsocencnsconecsovessovens V

BIT nsnsnssndsssescssnsceseccorsssersosescsnessveossosesonorsess 1

IY oinnssncssnsvshiwsiasastichoviarerasespsvecsesavuvasenersennaeites l

TREATIES AND STATUTES INVOLVED.............::eeeeeeee 1

STATEMENT OF THE CASE............ccocssoroscersoeesesssesssesssenes 2

1. The Facts of the Underlying Litigation................ 2

2. The State Court Litigation. ........:........0sccsscssessseeses 2

3. Disposition in the District Court ............:eseseeeee 4

4. The Opinion of the Ninth Circuit ..............esese 4

5. What Is at State in These Cases..............::scceeeeeeees 6

REASONS FOR GRANTING THE WRIT ..........:c:ceeseeeeeees 7

A. The Federal Courts Are without Subject-Matter

Jurisdiction in Cases Brought under State Law, in

Which Any and All Federal Claims are Asserted

by the Deffense. ..................ssscsssssrssssssceseessorsesneeee 7

B. A Federal Appellate Court May Not Resolve a

Question of Interpretation of State Law, When

the Only Two State Appellate Decisions on point

Are in Direct Conflict, and the Matter Is

Currently Set for Resolution by the State

Supreme COult.............cccccsssscssssesecsessessesereeeees 10

C. The Treaty of Peace with Japan Did Not Bar

Actions by Private American Citizens Against the

Private Japanese Companies That Mistreated and

I i alate 11

1. The Treaty Did Not Bar All Prisoner of

a iia eictvesnicietdlanedeiaadarseeaees 13

a. Other Provisions of the Treaty

Limit the Waiver of Claims in

FE Wi vine ndiciinediadeciniien 14

b. Petitioners’ Claims Did Not in

Face, Arise from Actions Taken

“in the Course of Prosecution of

SE FRs i aceiudicninengeeennbehiemeetois 18

c. Petitioners’ Claims Neither Are,

Nor Are Similar to, “Reparations”

cali iacal aan adcad cialis 21

2. Any Treaty Waiver of Petitioners’ Claims

Was Superseded by Subsequent

IE esisicssecsiicsvitiersactnnesesensaniins 22

3. The Treaty Must Be Read Narrowly, So

As Not to Deprive Americans of the Right

to Pursue “National versus National” .

Ns ctaiindac cain clans stenthadiiccintaiadimaiiains 28

a MIT: wncintciasintcoiibiashnicabieonesiaatsnibnitisaibiaenneibialaaieniraieaiton 30

iv

TABLE OF AUTHORITIES

CASES

Am. Ins. Ass’n v. Low, 123 S. Ct. 817 (2003)......... ]

Banco Nacional de Cuba v. Sabbatino,

BIG U.S. FOO CIGD evvccssencnvencictccserimemacevesivianvevns 9

CSX Transp., Inc. v. Easterwood, 113 S. Ct. 9

SFO CAF iescestsnnsecccetpestccmninenen maniacs

Cal. Coastal Comm’n v. Granite Rock Co.,

GO UD, Se I viereestinctieersintnsceininnnareeons 8

Caterpillar, Inc. v. Williams, 482 U.S. 386 7,8

(RGB 7) seincisnincinserscsovntexenene cansaneeivabennsentoainnssirnameiapiies

Chan v. Korean Air Lines, 490 U.S. 122 (1989).... 15

Cipollone v. Liggett Group, Inc., 112 S. Ct. 8-9

DE CG covissnesinesivvevcientatanininiaivienianniammabatininaace

City of Chicago v. Int’! Coll. of Surgeons,

$32 US: VSG IGS?) cecccemnimenvintmmnncinaaiies 7

Clark v. Allen, 331 U.S. 503 (1947) ............ecceeeeeees 9

Dames & Moore v. Regan, 453 U.S. 654 (1981).... 28

Deutsch v. Turner Corp., 317 F.3d 1005, as

amended at 324 F.3d 692 (9" Cir. 2003).........:++++ passim

Eastern Air Lines Inc. v. Floyd, 499 U.S. 530 14

CSOD BD nccvracrcrssinsneosssiinesenttenieaebiceseninisnssieeneendsnrsianiiios

Franchise Tax Bd. of Cal. v. Constr. Laborers

Vv

Vacation Trust for Southern Cal., 463 U.S. 1 8, 10

Gerling Global Reins. Corp. of Am. v. Low, 240

F.3d 739 (9th Cir. 2001), cert. granted sub nom

Am. Ins. Ass’n v. Low, 71 U.S.L.W. 3470 (2003) .. 9

Kawakita v. United States, 343 U.S. 717 (1952)... 20

Kolovrat v. Oregon, 366 U.S. 187 (1961)............... 24, 25

M. Nahas & Co., Inc. v. First Nat’l Bank of Hot

Springs, 930 F.2d 608 (8th Cir. 1991)... 7

Marathon Oil Co. v. Ruhrgas AG, 115 F.3d 315

(Sth Cir. ) cert. denied 522 U.S. 967 (1997)........... 7

Melugin v. Hames, 38 F.3d 1478 (9th Cir. 1994)... 22

Metropo. Life Ins. Co. v. Taylor, 481 U.S. 58 8

CEE TDi csnstnrsssnnisanoneernsaneaaiaeaaiaamnaadias

Mitsubishi Materials Corp. v. Superior Court,

106 Cal. App. 4th 39 (Feb. 6, 2003)... eee 4,6, 11

Moore v. Sims, 442 U.S. 415 (1979) ...... ecco 11

Patrickson v. Dole Food Co., Inc., 251 F.3d 795

(9th Cir. 2001), aff'd on other grounds, 251 F.3d 4

FEE COE cininrniniiniimaamadaemae

Reparations for Injuries Suffered in the Service

of the United Nations Case, [1949] I.C.J. 174........ 22

Taiheiyo Cement Corp. v. Superior Court, 105

Cal. App. 4th 398, 129 Cal. Rptr. 2d 451 ( Jan. 6, 11

9S, FED Pinvsianisinsvsilsveisanciaileltiiedtaaniatandanamanmeadiai:

The Paquete Habana, 177 U.S. 677 (1900) ........... 25

United States v. 37 Photographs, 402 U.S. 363 11

C1 DT) cnssornssersercsrsvercesesssonsnsnonnssnsrenncensnsopeesnenonensneses

United States v. Espy, 145 F.3d 1369 (D.C. Cir. 22

DO vases vsshnnesnssernsisnesnisaninanericsnnaninceniinnsninacaivieninn

In re World War II Era Japanese Forced Labor

Litig., 114 F. Supp. 2d 939 (N.D. Cal. 2000)......... 1,9

Zschernig v. Miller, 389 U.S. 429 (1968)...........+++ 9

FEDERAL STATUTES

SE CPB. © FOGG vaicasienenesnserssisvcnssssncorinsescsnstiorrnsiones 21

FE USL. © VASA) vsevscsessvevcsnesemivcscnsnsissactasenseseees 1

y PART oat & | eee Onn NE DN enter ns 7,10

FE U.S.C. © P4AG(R) ...<crersvacerrcscrresesorescversoncerssnsesenys 7

: Foreign Sovereign Immunities Act,

: 28 U.S.C. § 1601 ef Sq .............sseccererreeeessecrersneeees 4

War Claims Act of 1948, 50 U.S.C. §§ 2001- 4

DOT TD vrccesrssovoscerosaneseveese ail tainniianihainsiianbansilaie

STATE STATUTES

California Code of Civil Procedure § 354.6.......... passim

LAW REVIEWS

Curtis Bradley & Jack Goldsmith, "Customary

International Law as Federal Common Law: A

Vii

Se ea ae eT

Critique of the Modern Position," 110 Harv. L. 10

A es eC IPET e iicciiicsesnteneseentnideaniisianicamnanies

S. D. Murphy, “Nazi-Era Claims Against

German Companies,” 94 Am. J. Int’l. L. 682, 30

MISCELLANEOUS

VI Foreign Relations of the.United States

(1951), 16-17

i, en Be wresseiassscstnsenncneesinianeniemennnnaibiesmnetis

Agreement Between the United States and

Germany, signed July 17, 2000, Annex B............... 29-30

Arrangement Between the Governments of

Japan and Denmark Regarding Settlement of

Certain Danish Claims (May 25, 1959), [1960] 26

Japanese Annual of Int'l Law 203 ........:ccccssseeeeeeees

Arrangement Between the Governments of

Japan and Sweden Regarding Settlement of

Certain Swedish Claims (September 20, 1957),

[1959] 26

Japanese Annual of Int'l Law 186 ...........:cccseseseeees

Exchange of Notes Between the Government of

Japan and the Government of Spain Regarding

the Settlement of the Problem Concerning

Certain Types of Spanish Claims (January 8,

1957), [1958] 26

Japanese Annual of Int'l Law 211 ........ccccceeeeeeeeees

Geneva Convention Relating to the Treatment of

Prisoners of War, 47 Stat. 2021, T.S. 846 (1929), 19

PTITIE FA sccitcsoscsnnciniiiitinsicallaainabtiipaiasuingenteaimisniicdinns

Hague Convention on the Law of War on Land,

36 Stat. 2277, T.S. 539 (1906), Article 6............+++. 19

Joint Declaration by the Union of Scviet

Socialist Republics and Japan (October 19,

1956), [1957] 27

ULN.KT.S. 112....ccccccccssssssssccesccosccosccsesssssvsccosovoessooeses

Lord McNair, The Law of Treaties (1938),

Chpt. XVIIL, pp. 199-206 .......-ssesesersseererererersesesnsess 15

Treaty Between United States and Argentina,

10 Stat. 1005 (1853) .......sscssseesseesneesteeeseeseerseeeenees 24

Treaty Between United States and Serbia, 60 24

Stat. 1401 ........coccccccsssssesscsoscecccssssossccenssssesoscossssessees

Treaty Between Serbia, Poland and

Czechoslovakia, 24

30 L.N.T.S. 185; 85 L.N.T.S. 455 .....eccecseseeeeseeseees

Treaty of Peace with Japan, [1952] 3 U.S.T.

3169, passim -

TIAS 2490 (1951)......ccccssccssseseeereeseceeeeesesecenseeens

ix

a i ee nS

Petitioners Lester Tenney et al. respectfully petition for a

writ of certiorari to review a decision of the United States

Court of Appeals for the Ninth Circuit, which affirmed a

_ judgment of the United States District Court for the Northern

District of California.

OPINIONS BELOW

The decision of the Ninth Circuit is reported sub

nom. Deutsch v. Turner Corporation, at 317 F.3d 1005, as

amended at 324 F.3d 692 (9th Cir. 2003). It is reprinted in

the Appendix hereto (““App.”), at pp. la-65a. This decision

consolidated 28 cases brought by prisoners of war in the

Pacific Theater, as well as one case initiated by a European

Holocaust survivor. The instant Petition is filed on behalf of

Plaintiffs in 11 of those cases, brought by American citizens

who were enslaved by private Japanese companies.

The decision of the U.S. District Court for the

Northern District of California is reported sub nom. In re

World War II Era Japanese Forced Labor Litigation, 114 F.

Supp.2d 939 (N.D. Cal. 2000). It is reprinted at App., pp.

66a-80a.

JURISDICTION

Rehearing and en banc reconsideration of the

decision in the Ninth Circuit were denied on March 6, 2003.

App., pp. 1a-16a. Pursuant to order of the appeals court, the

mandate has not issued, pending this Court’s disposition of

American Insurance Association v. Low, 123 S. Ct. 817

(2003) (granting certiorari). See App., p. 16a. This stay of

mandate does not, however, affect the timing of the instant

Petition: see Rule 13.3 of the Rules of this Court.

This Court’s jurisdiction is invoked pursuant to 28

U.S.C. § 1254(1).

TREATIES AND STATUTES INVOLVED

The treaties and statutes at issue are certain articles of

the Treaty of Peace with Japan, [1952] 3 U.S.T. 3169, TIAS

2490 (1951), reprinted at App., pp. 81a-114a, and California

Code of Civil Procedure § 354.6, reprinted at App., 119a-

120a.

STATEMENT OF THE CASE

1. The Facts of the Underlying Litigation. |

Petitioners, all of whom are United States citizens, |

are the survivors of a group of true American heroes. Their |

claims are based on the brutal abuse they experienced at the

hands of Japanese zaibatsu (private business conglomerates),

including Respondents, after they were taken as prisoners of

war in World War II, and were sold to those companies,

- which forced them to labor without compensation. !

Petitioners contended in their complaints, and are

prepared to demonstrate at trial, that their abusers were

acting not as agents of the Japanese government, but as

profit-making enterprises, enriching themselves by imposing

\ egregious deprivations on innocent Americans and other

Allied POWs.

The sufferings imposed by the zaibatsu on these

victims have been recounted from numerous perspectives.

The perversity of the mistreatment of these men — outside the

laws, customs, and conventions of war which all civilized

nations were and are now obligated to honor -- will always

remain a dark shadow over the history of the twentieth

century.

Respondents, acting for their own war-profiteering

purposes, exploited private commercial opportunities

through Petitioners’ forced labor. At least since 1945, these

conglomerates have thrived beyond the wildest imaginings

ot which their principals would have been capable, either

before or after the War. Privately-owned and -operated

business entities, they could not have achieved these levels

of success had they not survived to enrich themselves in the

reinvigorated post-War Japanese economy; and they could

not have survived the War without the uncompensated labor

' Pursuant to California Code of Civil Procedure § 354.6, Petitioners also

include the U.S.-incorporated affiliates of these Japanese business

entities.

2

tn

of POWs like these Petitioners, who were captured and

pressed into slavery.

2. The State Court Litigation.

Petitioners brought these actions in California State

courts to obtain a remedy, which they deserve as a matter not

just of basic fairness but of law, against those who enslaved

them, tortured them, and exploited their labor without mercy

or compensation. These are not cases against the

government of Japan, despite the unrelenting efforts of

Respondents, supported by the Department of State, to

characterize them in that way. They are founded in common

law and equity, seeking tort damages, unpaid wages, and the

restitution of unjust enrichment.

The cases were brought by private individuals against

private commercial entities, seeking relief measured by the

fruits of unpaid labor, and to recompense grievous wrongs

committed by private employers against a segment of their

workforce. Petitioners were permitted to bring these cases

under an express extension of the statute of limitations

adopted by the California State Legislature in 1999:

California Code of Civil Procedure § 354.6 (see App., p.

115a-16a, infra).

The State court suits, in other words, arose under

California law, and were filed in California courts.

Nevertheless, they were removed to the federal courts, and

ultimately transferred (with others as well) by the Judicial

Panel on Multidistrict Litigation to the U.S. District Court

for the Northern District of California, where they were

consolidated by Judge Walker for pretrial purposes.

There is no basis for federal jurisdiction over these

cases.2 The complaints do not so much as make reference to

federal law in their allegations of fact or prayers for relief.

Despite Respondents’ attempts to portray Petitioners

as seeking judicial review of acts and decisions consigned by

? The presence of California plaintiffs and defendants precludes federal

jurisdiction based on diversity of citizenship.

3

|

the Constitution exclusively to the competence of the federal

government, and indeed to its Executive branch, these cases

fall squarely within the scope of the authority of every State

to assure the enforcement of wage claims, and to punish

mistreatment of its citizens even when they are employed by

foreign nationals or corporations. It is commonplace for

State courts to hear and to adjudicate civil actions relating to

refusals to pay wages and similar abusive conduct by foreign

employers, so long as jurisdiction over the subject matter and

the person of the defendant is properly lodged. That the

events at issue here happened in Japan is no bar: courts in the

United States regularly consider and resolve cases alleging

actionable wrongdoing in other places.

Nevertheless, remand to State court was denied by

Judge Walker, who proceeded to exercise jurisdiction over

these cases.’ Despite the subsequent holding of the Ninth

Circuit in Patrickson v. Dole Food Company, Inc., 251 F.3d

795 (9" Cir. 2001), aff'd on other grounds, 251 F.3d 795

(2003), the district court declined to revisit its decision.

3. Disposition in the District Court.

Before the district court, Respondents opposed

Petitioners’ motions to remand, and moved to dismiss or for

judgment on the pleadings, on four grounds. They alleged

that the claims were barred by: (a) the 1951 Treaty of Peace

with Japan, [1952] 3 U.S.T. 3169, TIAS 2490 (“the Treaty”)

; (b) the political question doctrine; (c) the preemptive

effects of the Treaty, the War Claims Act of 1948, 50 U.S.C.

§§ 2001-2017p, and “the federal government’s plenary

authority over foreign affairs”; and (d) the act of state

doctrine and the Foreign Sovereign Immunities Act, 28

U.S.C. § 1601 et seq.

The district judge, after declining to remand the cases

for lack of subject-matter jurisdiction, granted Respondents’

> Other federal Judges did remand other Japanese Prisoner of War cases

to California State courts, where they remain. See, e.g., Mitsubishi

Materials Corp. v. Superior Court, 106 Cal. App. 4th 39 (2003)

(discussed infra at p. 6).

4

motions, but for only one of the proffered reasons. He held

that the Treaty unambiguously constituted a waiver of these

causes of action. He found further support for this position

— in his analysis of the negotiation and ratification of the

Treaty.

4. The Opinion of the Ninth Circuit.

The Ninth Circuit consolidated the cases brought by

American citizen plaintiffs with litigation initiated by

nationals of both signatories and non-signatories of the San

Francisco Treaty. Also consolidated was an action brought

by a European Holocaust survivor against a German

company, alleging enslavement and pursuing a claim for

damages. :

The Ninth Circuit Panel issued an opinion far more

limited in scope than that of Judge Walker below. The

circuit court held that the section of the California Code of

Civil Procedure extending the limitations period was a

substantive, and hence an impermissible, intrusion by a State

into the federal government’s constitutional prerogative to

conduct foreign affairs. The court opined that the federal

resolution inter alia of the cases now at Bar was

incorporated into the 1951 Treaty, effectively precluding the

maintenance of these suits. ;

After concluding its analysis of the constitutionality

of the State statute, the court went on to address the question

of whether there was federal jurisdiction over these cases at

all, or whether the district court should have remanded them

to the State courts in which they were originally filed. The

Panel found that it did not need to resolve this issue, because

the outcome of State court litigation over the construction

and acceptability of § 354.6 was a foregone conclusion.

In the amendment to its opinion issued six weeks

later (on March 6, 2003) (see App., pp. 1a-16a), the court

noted that two Califorma Court of Appeal panels had

recently issued decisions that reached precisely opposite

holdings on the critical question of whether the statute was

substantive or procedural in nature. One court found that

5

ee

§ 354.6 impermissibly purported to create a cause of action

that would not otherwise exist, while the other opined that

the statute was merely a procedural extension of the

limitations period, raising no constitutional issues. Compare

Mitsubishi Materials Corp. v. Superior Court, 106 Cal. App.

4th 39 (Feb. 6, 2003) with Taiheiyo Cement Corp. v.

Superior Court, 105 Cal. App. 4" 398, 129 Cal. Rptr. 2d 451

( Jan. 15, 2003). Apparently, the existence of this actual

conflict was not sufficient to persuade the circuit court that

the ultimate resolution of this critical question of State law

by the California courts is open to doubt.

Meanwhile, on April 30, the State Supreme Court

granted review of both of these cases, 2003 Cal. LEXIS

2794. Argument will be heard some time in the coming

months.

5. What Is at Stake in These Cases.

Petitioners respectfully submit that the court below

erred, both procedurally in concluding that there is federal

jurisdiction over these suits, and also substantively in

affirming the order of dismissal.

These are cases of enormous public importance,

which have attracted considerable attention from the media,

as well as from the political branches of government.

Indeed, the attention they have drawn is well merited: in this

time when U.S. servicemen and servicewomen are once

again subject to capture as prisoners of war far from these

shores, it is especially important to elucidate the legal rights

of the American heroes who wore their country’s uniform

during World War Two, and for whom this Court now offers

the last hope for vindication.

The Court may surely take notice of the fact that

Petitioners are no longer young: having suffered

unspeakable abuse in 1942-45, the youngest of the survivors

is nearly 80 years of age. Many are substantially older than

that. These men represent the finest of the generation that

fought and won the Second World War, incurring enormous

personal loss to preserve our way of life against severe and

6

imminent threats. They deserve the attention of the highest

Court in the land, which should now address and resolve the

important legal questions that they respectfully present in

this Petition.

REASONS FOR GRANTING THE WRIT

A. The Federal Courts Are without

Subject-Matter Jurisdiction in Cases Brought under

State Law, in Which Any and All Federal Claims

Are Asserted by the Defense.

The competence of the federal courts to hear cases is

limited. They may adjudicate an action only if constitutional

or statutory authority permits. Marathon Oil Co. v. Ruhrgas

AG 115 F.3d 315, (5" Cir. ) cert. denied 522 U.S. 967

(1997). And cases begun there may be removed from State

courts only if they come within that restricted federal

jurisdictional field. The remand statute, 28 U.S.C. § 1446(a),

is strictly construed against federal jurisdiction, as this Court

has repeatedly taught. “To bring a case within the [federal-

question removal] statute, a right or immunity created by the

Constitution or laws of the United States must be an

element, and an essential one, of the plaintiffs cause of

action.” Caterpillar, Inc. v. Williams 482 U.S. 386, 392

(1987) (emphasis added) (quoting Gully v. First Nat'l Bank

299 U.S. 109, (1936).

The federal nature of a cause -- and hence the special

jurisdiction of the federal courts under 28 U.S.C. § 1331 --

may not be created, for example, by the defense to a claim,

when the claim itself arises under State law. In City of

Chicago v. International College of Surgeons, 522 U.S. 156,

163 (1997), this Court described the “well-pleaded complaint

rule” as “long settled law.” Nor may a case be removed

because the plaintiff might have asserted a federal claim but

elected not to do so. M. Nahas & Co., Inc. v. First National

Bank of Hot Springs, 930 F.2d 608, 611 (8th Cir. 1991) (“the

plaintiff is master of his claim, and may avoid federal

removal jurisdiction by exclusive reliance on State law”’).

Here, of course, the complaints themselves declare no

federal cause of action: on the contrary, they are clearly

framed to allege common law and equitable causes of action

under the laws of the State of California. Removal,

therefore, was at least presumptively improper: “original

federal jurisdiction is unavailable unless it appears that some

substantial disputed question of federal law is a necessary

element of one of the well-pleaded State claims, or that

one of the other claims is ‘really’ one of federal law.”

Franchise Tax Bd. of Cal. v. Construction Laborers Vacation

Trust for Southern Cal., 463 U.S. 1, 13 (1982) (emphasis

added).

At the district court, Judge Walker appears implicitly

to have found that these cases come within an exception to

the well-pleaded complaint rule, the so-called “complete

preemption doctrine.” When Congress has so thoroughly

occupied and dominated an area as to leave no room for

State law, any civil action will in essence be federal in

character, and removal may be had no matter how the

complaint is written. Caterpillar, Inc. v. Williams, 482 U.S.

386, 393 (1987); Metropolitan Life Insurance Co. v. Taylor,

481 U.S. 58, 65-66 (1987).

Yet the very rulings that define the doctrine make

clear its inapplicability to such cases as these. States are

surely not preempted from regulating the fairness with which

their citizens are treated in the workplace, or from providing

a mechanism for redress of such grievances.

In California Coastal Comm'n v. Granite Rock Co.,

480 U.S. 572 (1987), this Court laid down the boundaries of

the complete preemption doctrine. States may not regulate

in a given field: (1) when Congress has made clear its intent

to occupy the field exclusively, either by expressly

prohibiting State involvement, or through a legislative

framework leaving no room for State regulation; or (2)

where there is an “actual conflict” between the requirements

(or prohibitions) of State and federal law. 480 U.S. at 581

(citations omitted).

i i

The key question, then, is whether Congress intended

that State law be superseded by Federal law. Cipollone v.

Liggett Group, Inc., 112 S.Ct. 2608, 2617 (1994). Common

law claims, such as the claims at Bar of employees against

employers, are the best example of those “traditionally

governed by State law,” as to which preemption will be most

unlikely. CSX Transportation, Inc. v. Easterwood, 113 S.Ct.

1732, 1737 (1993). No federal statute purports in any

manner to preempt these claims. And there are no

obligations under federal law as to which these suits present

an “actual conflict.”

The “complete preemption doctrine” therefore does

not apply to these lawsuits, which are concerned not with

foreign affairs but with the right of workers to be paid, and

not with diplomacy but with torts and equity. The plaintiffs’

choice of the State court forum should be honored.

In the district court, Judge Walker claimed to follow

“a line of cases committing to federal common law questions

implicating the foreign relations of the United States,”

including Banco Nacional de Cuba v. Sabbatino, 376 U.S.

398 (1964). “Under Banco Nacional,” he wrote, “federal

common law governs matters concerning the foreign

relations of the United States.” 114 F. Supp. 2d at 943

(citation omitted); App. 71a.* But this reasoning, too, is of

* In its decision below, the court of appeals paraphrased with approval its

earlier remark that “(t]he federal government’s foreign affairs power is

not mentioned expressly in the text of the Constitution but, rather, is

derived from the structure of the Constitution and the nature of

federalism.” Gerling Global Reins. Corp. of America v. Low, 240 F.3d

739, 751 n.9 (9" Cir. 2001), cert. granted sub nom. Am. Ins. Ass'n v.

Low, 71 U.S.L.W. 3470 (2003). “The power is rarely invoked by the

courts; the Supreme Court has not applied it in more than 30 years,” id.,

since Zschernig v. Miller, 389 U.S. 429, 433-35 (1968). The circuit

correctly noted this Court’s holding that a statute will not be struck down

if it has only “some incidental or indirect effect in foreign countries.”

Clark v. Allen, 331 U.S. 503, 517 (1947). 317 F.3d 1005, 1021-22; App.

Sia.

no avail. Banco Nacional neither channels cases into the

federal courts nor precludes State courts from hearing

lawsuits properly before them. Banco Nacional is “best

regarded not as authority for an expansive federal common

law of foreign affairs.” Curtis Bradley & Jack Goldsmith,

“Customary International Law as Federal Common Law: A

Critique of the Modern Position,” 110 Harv. L. Rev. 815, 864

(1997). It is not judicial endorsement of'the so-called

“federal common law of foreign relations,” nor does it

establish a generalizable exception to the well-pleaded

complaint rule.

Resolution of Petitioners’ State law claims would not

require that the tnal court decide a substantive question of

federal law. These claims do not “arise under” the laws of

the United States within 28 U.S.C. § 1331, even if

Respondents’ answers and defenses are replete with reliance

on federal law. See Franchise Tax Bd v. Construction

Laborers Vacation Trust for Southern Cal., 463 U.S. 1, 13

(1982), 463 U.S. at 13-14.

These cases should have been remanded, and it was

reversible error to conclude otherwise. Respondents are by

no means precluded from presenting their Treaty-based

defenses in State court. And the disposition of those

defenses is far from the foregone conclusion imagined by the

appellate panel below. Indeed, the court’s confidence that,

on remand, “the State court would simply dismiss the claims

with prejudice,” 317 F.3d at 1030, is demonstrably

erroneous.

B. A Federal Appellate Court May Not Resolve

a Question of Interpretation of State Law, When the

Only Two State Appellate Decisions on Point Are in

Direct Conflict, and the Matter Is Currently Set for

Resolution by the State Supreme Court.

The Ninth Circuit held that the extension of the

statute of limitations in § 354.6 is unconstitutional as a

substantive incursion by a State into the exclusive preserve

of the federal government. The court considered its

10

interpretation of the State statute to be so clearly correct that

it saw no reason to defer to the expertise and competence of

the State judiciary.

Yet, in Taiheiyo Cement Corp, supra, decided in

January of this year, a panel of the California Court of

Appeal came to precisely the conclusion that the Ninth

Circuit dismissed out of hand. The Taiheiyo court found that

§ 354.6 is “essentially a procedural statute designed to allow

venue in the California courts.” 105 Cal. App. 4" 398 at

423. Thus, there is no creation of a cause of action, no issue

of constitutionality, and no incursion into the substantive

regulation of foreign affairs that the federal appellate panel

found the California Legislature to have committed.

“State courts are the principal expositors of State

law.” Moore v. Sims, 442 U.S. 415, 429 (1979). Federal

courts, when they engage in that exercise, do so without

“authoritative jurisdiction.” U.S. v. 37 Photographs, 402

U.S. 363, 369 (1971).

Another panel of “he same State court agreed with the

Circuit, finding the statute to be substantive and therefore

unenforceable, in Mitsubishi Materials Corp, supra, decided

three weeks after Taiheiyo. The conflict in the interpretation

of a State statute is now precisely where it should be ii our

federal system: the California Supreme Court has granted

review to both decisions, and will resolve the matter ii due

course.

The interpretation of State law by the federal

appellate panel below is entitled to no weight. The

California Supreme Court will soon ultimately and

authoritatively pronounce on whether the proper reading of

the statute is as procedural or substantive. The decision

below is grounded in a violation of a fundamental tenet of

federalism, and should be set aside.

C. The Treaty of Peace with Japan Did Not Bar

Actions by Private American Citizens Against the

Private Japanese Companies That Mistreated and

Enslaved Them.

11

The court below did not conclude that it is

impermissible for California to have enacted any legislation

purporting to regulate the rights of Californians who were

victims of wrongs during World War Two. There would be

no basis for such an unprecedented incursion by the federal

courts into the authority of a State Legislature to protect its

citizenry. The real problem, according to the opinion penned

by Judge Reinhardt, is the alleged substantive inconsistency

between California’s enactment, under which these _

Petitioners have a cause of action against these Respondents,

and the Treaty of Peace, which the panel believed waived

such actions.

Petitioners respectfully submit that the panel erred in

its interpretation of the Treaty, no reading of which can

concoct a waiver of claims of private United States citizens

against private entities organized under the laws of the

former Axis powers. It therefore was incorrect in its

conclusion that § 354.6 “is impermissible because it intrudes

on the federal government’s exclusive power to make and

resolve war, including the procedure for resolving war

claims.” 317 F.3d 1005, 1023; App. at 47a. To the

contrary, a proper reading of the document in its entirety and

in its context demonstrates that these claims were not

“resolved” by the Treaty.

As noted below, Article 14(b) of the Treaty of Peace

makes reference to the waiver, subject to certain exceptions,

of “all reparations claims” of U.S. nationals against Japan

and Japanese nationals “arising out of any actions taken by

Japan and its nationals in the course of the prosecution of the

War.” Yet those words by their very terms do not waive all

claims (whether “reparations claims” or not) of U.S.

prisoners of war against Japanese companies (whether

“arising out of . . . the prosecution of the War” or not),

merely by virtue of the fact that they arose during the War

years. This distinction is underscored by the express waiver,

by Japan in Article 19(b), of the claims of its prisoners of

war.

12

Having incorrectly held Article 14(b) to be a

“resolution” of the claims at Bar, the panel also erred in

rejecting Petitioners’ arguments based on the language of an

Article of the Treaty itself, under which certain claims, even

if otherwise barred, were automatically revived in the event

and to the extent that Japan later made “a peace settlement or

war claims settlement with any State granting that State

greater advantages than those provided by the present

Treaty.” Treaty of Peace, Article 26, emphasis added.

These conclusions are incorrect as a matter of law,

‘and are inconsistent with teachings of this Court over

decades. In reaching them, the court below “so far departed

from the accepted and usual course of judicial proceedings . .

_ as to call for an exercise of this Court’s supervisory

powers.” Rule 10(a). Moreover, the questions resolved by

the appellate court are important questions of federal law

“that ha[ve] not been, but should be, settled by this Court.

Rule 10(b).

1. The Treaty Did Not Bar

All Prisoner of War Claims.

Article 14(b) of the Treaty of Peace is clear:

Except as otherwise provided in the present

Treaty, the Allied Powers waive all

reparations claims of the Allied Powers, other

claims of the Allied Powers and their

nationals arising out of any actions taken by

Japan and its nationals in the course of the

prosecution of the war, and claims of the

Allied Powers for direct military costs of

occupation.

To the extent that Article 14(b) might affect claims of

United States nationals, such as Petitioners, against Japanese

nationals, such as Respondents, any waiver is expressly

limited in two respects: (a) it is subject to whatever might be

“otherwise provided” in the Treaty; and (b) it embraces only

claims “arising out of any actions taken by Japan[ese]

nationals in the course of the prosecution of the war.” An

13

analysis of these limitations demonstrates that Article 14

does not constitute an effective waiver of the cases at Bar.

a. Other Provisions of the Treaty

Limit the Waiver of Claims in Article 14.

The proper test for interpreting treaty language was

laid down by this Court in Eastern Air Lines Inc. v. Floyd,

499 U.S. 530, 534-35 (1991): interpretation of a treaty

requires a close scrutiny of its text provisions taken as a

whole. On such a reading, the drafters’ intent not to bar

private claims of Allied prisoners of war against the Japanese

companies that enslaved them emerges unscathed. Article

14(b), which addresses waivers of certain claims of Allied

nationals, has to be read in the context provided by Article

19, the parallel provision governing Japanese waivers.

Neither exists in a vacuum. Understanding Article 14(b),

therefore, and determining whether it is a “resolution” of war

claims that bars State action, requires some analysis of

Article 19.

In Article 19(a), Japan waived claims m language

very much broader than what was accepted by the Allies in

Article 14(b). Article 19 embraces not only claims resulting

from actions taken in the course of prosecution of the War,

but also “all claims . . . arising out of the War or out of

actions taken because of the existence of a state of war.”

Emphasis added. Both the words and the history of this

provision leave no room for doubt that it was intended to

cover far more situations than would come within Article

14(b). Yet if even the more extensive scope of Article 19(a)

does not unambiguously encompass and bar claims like

Respondents’, then surely Article 14(b) cannot be read to do

so either.

_ The negotiators and drafters wrote Article 19(b) to

include critically important language specifying that the

waiver “includes . . . any claims and debts arising in respect

to Japanese prisoners of war and civilian internees in the

hands of the Allied Powers.” Such language, or indeed any

14

express reference to claims to be asserted by Allied POWs

or civilian internees, is absent from Article 14(b).

The venerable maxim “expressio unius est exclusio

alterius” is a proper guide to interpreting treaties, just as it is

for statutory enactments. It requires the conclusion that, in

expressly addressing prisoner of war claims in Article 19(b),

the drafters excluded those claims from the scope of the

waiver in Article 14(b). See Lord McNair, The Law of

Treaties (1938), chapter XVIII, pp. 199-206. The context of

the Treaty thus fills in the meaning of Article 14(b). Itis a

vital part of the judicial function to mine that context, and

thus to discern the meaning of the Treaty as “the supreme

law of the land.”

The court below made no attempt to reconcile its

broad interpretation of Article 14(b) as “resolving” war

claims with the language of the Treaty as a whole, giving

meaning to all of its terms. Article 19 contains “other

provisions,” which limit the reach of the waiver language of

Article 14, and exclude common law claims of private U.S.

citizens against private Japanese business entities.

Articles 14(b) and 19 must be read together, not

because there would be ambiguity in one or both of them

standing alone, but because they deal with related subject

matters,-and, therefore, each provides guidance as to how the

other should be understood. To fail to perform this

contextual analysis, and therefore to conclude that Article

14(b) must be read as if it were a free-standing legislative

instrument, violates this Court’s teaching, articulated most

clearly by Justice Scalia in Chan v. Korean Air Lines, 490

U.S. 122 (1989): the judiciary must not insert into treaties

words that are just not there. The courts may not amend the

Treaty of Peace with Japan to import language that the

drafters did not write into it. Article 14(b) may not be

transformed into the mirror image of Article 19, from which

it differs in critical ways, by importing words that the

drafters did not employ.

15

The negotiating history -- the travaux préparatoires -

- of the Treaty reinforces this conclusion. The historical

record demonstrates without qualification or condition that

the negotiators deleted an express reference to prisoner of

war Claims in Article 14(b), while retaining such a reference

and expanding the scope of the waiver in Article 19(b).

Excerpts from the record,> which were before the

district court below, show that the penultimate draft of the

Treaty, dated June 1, 1951, included two elements relating to

the scope of waivers which were changed by the negotiators

in the final version. First, draft Article 15(d)* provided:

Except as otherwise provided in the present

Treaty, reparations claims of the Allied

Powers, other claims of the Allied Powers and

their nationals (including juridical persons)

arising out of any actions taken by Japan and

its nationals in the course of the prosecution

of the war (including claims arising out of

the treatment accorded by Japan te

prisoners of war and civil‘an internees),

and claims of the Allied Powers for direct

military costs of occupation shall be deemed

to be satisfied out of the Japanese assets

subject to their respective jurisdiction in

accordance with the foregoing and out of

assets received from the Japanese home

islands during occupation.

VI Foreign Relations of the United States (1951), at 1082.

Draft Article 19, by contrast, provided, in words

which mirrored the waiver language ultimately incorporated

in Article 14(b), that:

_ (a) Japan waives all claims of Japan and its

nationals (including juridical persons) against

° Those excerpts are taken from VI Foreign Relations of the United

States (1951), pp. 1074-1101. 5

° This provision was renumbered in the final text as Article 14(b).

16

the Allied Powers and their nationals

(including juridical persons) arising out of

any actions taken by said powers and their

nationals in the course of the prosecution of

the war, and waives all claims arising from

the presence, operations or actions of forces

or authorities of any of the Allied Powers in

Japanese territory proper to the coming into

_ force of the present Treaty.

(b) The foregoing waiver includes any claims

arising out of actions taken by any of the

Allied Powers with respect to Japanese ships

between September 1, 1939, and the coming

into force of the present Treaty, as well as

any claims arising out of the treatment

accorded by the Allied Powers to prisoners

of war and civilian internees.

Id., at 1093-94 (emphasis added).

The negotiators’ treatment of the emphasized

language demonstrates two propositions that cannot be

ignored in any fair canvass of the travaux préparatoires: (1)

the waiver provisions in the June 1, 1951 draft were

originally worded to reflect each other exactly, with both

limited to claims arising “out of the prosecution of the war,”

and (2) by dealing specifically with prisoner of war claims,

both draft provisions addressed the negotiators’ perception

that the scope of the “prosecution of the war’ phraseology,

without elaboration, would not extend unambiguously to

such claims. The negotiating history further shows that even

this waiver, expressly including POW claims, was viewed at

least by the British as still insufficiently broad to protect

their Government against claims by Japanese prisoners of

war. The U.K. representatives therefore sought, and

obtained, the even broader, clearer waiver ultimately ratified

as Article 19 in the final version of the Treaty. Jd., at 1095.

The exchanges between U.S. and British negotiators

over the language of Articles 14(b) and 19 demonstrate that,

17

in the U.K. view, even with textual references to include

prisoner of war claims expressly, the “prosecution of the

war’ waiver still would not be broad enough “to extinguish

all types of claims which the Japanese could raise against the

Allies under the 1929 Geneva Convention on Prisoners of

War or in respect of Japanese surrendered personnel.”

Furthermore, to overcome any perceived limited scope of the

draft waiver, the negotiators redrafted its language between

June and September 1951, expanding the Japanese waiver in

Article 19(b) to include all claims arising during the war,

while deleting from Article 14(b) all language relating to

prisoner of war claims.

All of the traditional guides to the interpretation of

Article 14(b) of the Treaty -- its unambiguous language read

in the context of the whole instrument, the canons of

interpretation, and the travaux préparatoires -- lead to a

single conclusion: Article 14(b) was not intended to bar the

claims of Allied nationals held as prisoners of war by Japan,

and forced to work to enrich private Japanese entities. These

claims were not, therefore, even purportedly “resolved” by

the Treaty, as the court below held, and the Treaty, therefore,

does not evidence exclusive federal occupation of this area

of constitutional territory.

b. Petitioners’ Claims Did Not,

in Fact, Arise from Actions Taken

“an the Course of Prosecution of the War.”

The second express textual limitation on the scope of

the Treaty waiver clause is to actions taken “in the course of

the prosecution of the War.” Petitioners have already shown

that the travaux préparatoires of the Treaty do not support

the bald assertion that prisoner-of-war claims came within

the drafters’ understanding of the scope of the Article 14

waiver. The British negotiators expressly sought broader

language to bar potential claims by Japanese internees

against the Allies. And this fully comports with the

international law regime for treatment of detained persons

18

PO Fe Pe Le Or RR Tt pee

during wartime, which applied to Japan and to the Allied

Powers during World War Two.

Under the international law of war (jus in bello)

- applicable to all nations in the years 1939-45, the assignment

of prisoner of war laborers to work for private parties was

legal and acceptable only if their tasks had “no connection

with the operations of the war.”” If so assigned, laborers had

to be paid “‘at rates in force for work of a similar kind,” with

their wages going “towards improving their position, and the

balance shall be paid them on their release, after deducting

the cost of their maintenance.” Hague Convention on the

Law of War on Land, 36 Stat. 2277, T.S. 539 (1907), Article

6 (emphasis added); see also Geneva Convention Relating to

the Treatment of Prisoners of War, 47 Stat. 2021, T.S. 846

(1929), Article 31.°

If Petitioners’ allegations regarding their enslavement

are true, then either Respondents acted illegally under

international law, or their actions were not undertaken “in

prosecution of the war.” A successful showing by

Respondents that their use of Petitioners’ uncompensated,

forced labor was “in the prosecution of the War” would

constitute an admission of illegal acts, tantamount to a

confession that the zaibatsu were perpetrators of war crimes.

Yet the public record discloses no such confession in the

years immediately following Japan’s surrender, and no

prosecution of any Japanese corporate officer for having

used prisoners of war illegally. Unless Respondents are now

prepared to admit that they committed such war crimes, they

cannot take advantage of the waiver language in Article

7 International law also barred the assignment of “excessive” work to

civilian internees.

8 “(1 Jabor furnished by prisoners of war shall have no direct relation with

the war operations. It is especially prohibited to use prisoners for

manufacturing and transporting arms or munitions of any kind or for

transporting material intended for combatant units.” Geneva Convention

Relating to the Treatment of Prisoners of War, Article 31.

19

14(b) as a matter of law.’ And such a belated confession,

offered in an attempt to obtain the shelter of Article 14(b),

would violate the cardinal rule of domestic and international

legal systems that no one should be permitted to profit from

his own wrong.

Moreover, it is not only not self-evident, but it is

demonstrably incorrect, that no distinction can be made

between the Japanese Imperial government and the industries

that supplied its economic base during the War. That very

distinction was advocated by the United States and endorsed

by this Court in Kawakita v. United States, 343 U.S. 717,

726 (1952) (although “[t]he regulation of the company by the

Japanese government, the freezing of its labor force, the

assignment to it of prisoners of war under military command

were incidents of a war economy,” it does not follow that the

company was acting as part of the war effort, or that it

somehow ceased to be “an organization operating for private

profit under private management”).

Petitioners have alleged, in well-pleaded complaints,

that they were enslaved by Respondents during the War:

that they were abused in various ways, and that they were

forced to work without compensation in order to enrich

private interests. That enrichment occurred, of course, in

substantial measure because the zaibatsu were engaged in

the supply of goods and services in support of the Japanese

wartime economy. But that fact made those businesses

identical to or agents of the Imperial government no more

than Lockheed, Boeing, or any farmer or coal miner became

indistinguishable from the United States by virtue of having

supplied the American economy with transportation

equipment or food products consumed during the Second

° The Hague and Geneva Conventions are appropriate guides for the

understanding and application of the terms of the 1951 San Francisco

Peace Treaty. See Article 11.

20

World War, the Gulf War, or the current War on Terrorism.

That Dow Chemical manufactured Agent Orange for use in

Vietnam does not imply that its factory workers acted “in the

course of the prosecution” of the Vietnam War.

Respondents, therefore, cannot demonstrate that, as a

matter of fact, their exaction of Petitioners’ labor was in the

“prosecution of the war” as that phrase was used in the

Treaty.'® Article 14(b) does not take away the nght of POWs

to sue their abusers, because Petitioners’ claims are not

within the categories that the language of the Treaty

embraces. The conclusion of the court below that Article

14(b) “resolves” these claims must therefore be reversed.

c. Petitioners’ Claims Neither Are,

Nor Are Similar to, “Reparations” Claims.

The Treaty, in Article 14(b), purports to waive “all

reparations claims of the Allied Powers, [and] other claims

of the Allied Powers and their nationals . . .” (emphasis

added). Although this language would appear to reflect a

common understanding that the claims of nationals (such as

those of POWs), as opposed to claims of the Allies

themselves, are not “reparations claims,” Petitioners submit

that theirs are so dissimilar to reparations claims that they

cannot be included in the catch-all word “other.”

Reparations -- a term of art in international law then

and now -- are payments made by governments for injuries

inflicted in the course of hostilities. They are paid, typically

and traditionally, also to governments, for distribution,

often according to a negotiated formula or procedure, to

those able to prove that they were victims of the

'° There is nothing counterintuitive about this result. The words “the

prosecution of the War,” in their common meanings, refer to what

governments do. It is governments, acting through, among others, their

nationals in their military service, that make wars: private companies

such as Respondents may be enlisted in their aid, but they cannot be said

to be “prosecuting” (i.e., spearheading, carrying out) the war effort

merely because they continue to operate their businesses during wartime.

The prosecution of wars in this country is a military function. See 32

C.F.R. § 368.6.

21

belligerency. Thus, in the Reparations for Injuries Suffered

in the Service of the United Nations Case, [1949] 1.C.J. 174,

the International Court of Justice was called upon to advise

whether the United Nations had sufficient international legal

personality — enough resemblance to a nation — to be able to

demand “reparations” from the nascent State of Israel for the

murder of Count Bernadotte, the U.N. peacekeeper in

Jerusalem, by commandos operating under what was to

become the Israeli military structure.

Furthermore, it is true that Article 14(b) of the Treaty

sets out a waiver of reparations claims “and other claims,”

but this language must properly be construed according to

the rule of textual interpretation usually called ejusdem

generis: the general items in a list must be read as members

of the same family as the specific ones. United States v.

Espy, 145 F.3d 1369 (D.C. Cir. 1998); Melugin v. Hames,

38 F.3d 1478 (9" Cir. 1994). The use of terms like “‘and

others” or “etc.” is not the way in which entire classes of

unspoken assumptions are expressed, or important personal

rights of untold numbers of people gained and lost. The

breadth of the category of “reparations claims [and] other

claims” does not extend to private claims of private

individuals against private companies, unless those claims

arose from actions taken “in prosecution of the War”: in

other words, unless they are of the same family of claims as

the others waived in Article 14.

2. Any Treaty Waiver of Petitioners’ Claims

Was Superseded by Subsequent Developments.

Both to ensure fairness to those nations that did not

resolve their war claims against Japan through the 1951

Treaty, and to avoid prejudice to the Allied Powers that were

parties to that instrument, it was agreed as follows:

Japan will be prepared to conclude with any

_ State which signed or adhered to the United

Nations Declaration of January 1, 1942, and

which is at war with Japan . . . which is not a

signatory of the present Treaty, a bilateral

22

oS

Treaty of Peace on the same or substantially

the same terms as are provided for in the

present Treaty. . . . Should Japan make a

peace settlement or war claims settlement

with any State granting that State greater

advantages than those provided by the

present Treaty, the same advantages shall be

extended to the parties to the present Treaty.

Article 26, emphasis added. The text, ratified by the

President of the United States after receiving the advice and

consent of the Senate, included this language, which is every

bit as much “the supreme iaw of the land,” under Article VI _

of the Constitution, as the remainder of the Treaty’s

provisions.

In fact, Japan did subsequently make a number of

“peace settlement[s] or war claims settlement(s] . . . granting

[certain] State[s] . . . advantages” that were “greater . . . than

those provided uy” the San Francisco document, to the

extent that it has been interpreted by the courts below to

include a renunciation of national-vs.-national claims.

Certain states other than the listed Peace Treaty signatories

were granted settlements without waivers of private claims:

an obvicus advantage for their nationals, in comparison with

the situation of United States citizens whose claims the panel

below found to have been sacrificed by their government.

Thus, even if the court below were correct in its

interpretation of Article 14(b), those advantages would

automatically be extended to the United States, according to

the express language of Article 26.

On another point, the court below agreed with the

district court in its interpretation of this Treaty provision,

concluding that it “confers rights only on the ‘parties’ to the

treaties, not on individuals.”"' 317 F.3d 1005, 1026; App.,

"! Judge Walker’s conclusion, adopted by the Ninth Circuit., is also

internally inconsistent or at least asymmetric. On that reading, Article

14(b) extends rights only to governments, not to private entities, such as

Petitioners here. Yet the reading below permits Respondents the right to

23

p. 51a. But the provision of the Treaty does in fact “confer

rights” on individuals, because it is part of United States law,

and it contains express language to the effect that the United

States “shall” have the “greater advantages” given by Japan

to other nations. Since the record clearly indicates that the

United States has never renounced these rights, there is no

basis for the refusal of the courts below to take note of

Japan’s own subsequent actions, made relevant (indeed,

made essential) to this analysis by the express language of

Article 26.

Article 26 is a “most-favored-nation clause,” a

species of draftsmanship often seen in commercial contracts.

It means that if either party extends a preference to any other

entity at any later time, as compared with the instant contract

partner, that benefit is immediately and automatically

extended to the other without the need for a new agreement

or any implementation. Thus, in Kolovrat v. Oregon, 366

U.S. 187, 193-96 (1961), this Court unanimously interpreted

an 1881 treaty between the United States and Serbia, 60 Stat.

1401, T.LA.S. 1501, containing a most-favored-nation

clause, in light of both a pre-existing treaty of the United

States (as it happened, one with Argentina, 10 Stat. 1005

(1853)), and later treaties between Serbia and Poland and

Czechoslovakia (30 L.N.T.S. 185; 85 L.N.T.S. 455). The

Court found the greater advantages contained in those

documents to govern, recognizing that most-favored-nation

clauses have “long [been] used to broaden the scope of rights

protected by treaties.” 366 U.S. at 195.

There is nothing unusual or counterintuitive about the

concept that the nghts of Americans may be interpreted in

light of subsequent developments in the international arena.

Identifying the operative principles and binding norms of

international law may well require analysis of what other

rely upon and to hide behind a supposed waiver of claims against them,

while denying Petitioners any reciprocal right to enforce provisions

which serve to explain, limit, or terminate the effect of that waiver.

24

countries do or have done, but that focus is well within the

traditional mainstream of American jurisprudence.

That customary and conventional international law is

- part of the law of the United States, and has been so since the

earliest days of the Republic, is far beyond dispute. Justice

Gray’s famous pronouncement in The Paquete Habana, 177

U.S. 677, 700(1900), is precisely this: “International law is

part of our law and must be ascertained and administered by

the courts of justice cf appropriate jurisdiction, as often as

questions of right depending on it are duly presented for their

determination.”

When, as in The Paquete Habana or Kolovrat, a legal

instrument such as a Presidential Proclamation or a treaty

makes reference to the possibility cf subsequent

development, there is no contradiction in defining the

content of domestic law by reference to, and therefore as

potentially to be changed by, those later events. Here, the

Treaty says not that its text becomes null and void, or is

subject to renegotiation, should another war claims

settlement agreement involving Japan confer greater benefits

on another country. It says that those additional advantages

shall be extended to the Treaty parties, including the United

States. No “night” to “invoke” this provision need be

asserted by anyone. The conclusion below that the United

States government must perform some affirmative act to be

entitled to this provision is simply without authority in the

Treaty text or the relevant caselaw.

Petitioners’ contention, therefore, is grounded in the

very words of the Treaty: if another nation settles its war

claims with Japan in a way that does not deprive its citizens

of the right to pursue judicial remedies for wrongs done by

private Japanese interests, then American citizens “shall”

have the same right. Even if such claims had been deemed

“waived” before the date of such a more advantageous

agreement, from that date forward, U.S. law would no longer

be obligated to treat them as waived. The Treaty requires

25

Japan to extend the corresponding advantages to the U.S.

automatically, and thus by extension to its nationals.

At least three war claims settlements of Japan do not

purport to abandon, or otherwise to affect in any manner,

claims against Japanese nationals, by whomsoever they

might be asserted, or whenever they may have arisen.

Rather, they expressly waive claims only against Japan’s

government.

Japan’s agreement with Denmark” extends only to

the Japanese government, and does not release claims against

Japanese nationals: see Article III. The agreement between

Japan and Sweden” is identical. The agreement between

Japan and Spain" addresses the settlement of “certain types”

of Spanish war claims, providing only for full and final

discharge of the government of Japan for claims against it,

making no reference to, and therefore offering no release of,

claims between nationals of the two countries.

All of these provisions are clearly more advantageous

than those in Article 14(b) of the Treaty, if that language is

read — as the appeals court read it below — as precluding

Petitioners’ claims: thev permit the pursuit of legal actions

by private citizens against private companies. By the

explicit language of the San Francisco Treaty, therefore, the

right to bring the actions at Bar, not even purportedly

affected by these other instruments signed by Japan,

automatically re-vested in citizens of the United States, even

if the Treaty were to be construed as having taken those

rights away.

'2 Arrangement between the Governments of Japan and Denmark

Regarding Settlement of Certain Danish Claims (May 25, 1959), [1960]

Japanese Annual of Int'l Law 203.

'> Arrangement Between the Governments of Japan and Sweden

Regarding Settlement of Certain Swedish Claims (September 20, 1957),

[1959] Japanese Annual of Int'l Law 186.

'* Exchange of Notes Between the Government of Japan and the

Government of Spain Regarding the Settlement of the Problem

Concerning Certain Types of Spanish Claims (January 8, 1957), [1958]

Japanese Annual of Int'l Law 211.

26

The very existence of these three war claims

settlement agreements, therefore, considered in light of the

language of Article 26, and the express exception in the

Article 14(b) waiver itself regarding what is “otherwise

provided” in the Treaty, means that private claims by United

States nationals against any national of Japan -- including the

Japanese-incorporated Appellees named in these actions —

are not foreclosed by Article 14(b).

Japan also entered into an agreement with the Soviet

Union, which did purport to wz ive claims by Soviets against

Japanese citizens.’ The scope of that waiver, however, was

expressly limited to claims that arose after August 9, 1945:

claims arising before then were unaddressed. Petitioners’

clairns, however, arose significantly before that date, just

days before the unconditional Japanese surrender. The

agreement with the Soviet Union too, therefore, confers

“advantages” not extended to the United States, assuming

that the interpretation of the Treaty in the court below is

correct.

Petitioners urge the Court to consider carefully and

critically the very words of the Treaty itself which expressly,

in light of the subsequent conduct of Japan, recognize their

right to pursue private lawsuits alleging misconduct by

Japanese non-government entities during the War. Nationals

of certain other nations that later settled their claims with

Japan have not lost their right to sue individual wrongdoers:

an “advantage” that the decision below, if allowed to stand,

would deny to U.S. citizens. The Treaty rectifies that

imbalance, and the Treaty, including Article 26, is part of the

laws of our country that the courts are bound to interpret and

to apply.

'5 See Joint Declarations by the Union Soviet Socialist Republics and

Japan (October 19, 1956), [1957] U.N.T.S. 112, 6.

27

ae

3. The Treaty Must Be Read Narrowly,

So As Not to Deprive Americans of the Right

to Pursue “National versus National” Claims.

There is another reason for Petitioners’ position that

the Treaty does not purport to deprive them of their private

claims, and so does not represent a federal “resolution” that

precludes the California statute. The Treaty should be

presumed to be constitutional, requiring a reading in which it

did not take the nghts of American citizens away from them

without compensation, as required under the Fifth

Amendment, unless no other interpretation is possible.

This Court provided a comprehensive overview of

the powers of the President in this area in Dames & Moore v.

Regan, 453 U.S. 654 (1981). Dames & Moore, however,

says nothing about “national versus national” claims.

Rather, in Dames & Moore, the Court addressed the Algiers

Accords, an agreement that affected claims by nationals of

the U.S. only against the Government of Iran, along with its

agencies and instrumentalities, not private Iranian citizens or

interests.-

Petitioners do not contest the proposition that a

sovereign government like ours may settle the claims of its

nationals against foreign states. That is an aspect of

sovereignty recognized in international law. But under

United States constitutional law, the uncompensated “taking’

of a viable claim, which is a property right, is

unconstitutional. Jd., at 688-690. Adhering to the principle

that executive action in the formation of international

undertakings should be presumed to be consistent with the

Constitution, Petitioners submit that an interpretation of the

Treaty as not depriving Americans of their night to property

is to be preferred.

That the waiver of “national versus national” claims

would implicate constitutional limits on the powers to make

treaties or to conduct foreign relations is not an assertion

concocted out of whole cloth by Petitioners. This is the very

position taken by the United States Government recently

28

>

regarding the settlement of forced labor claims by Holocaust

victims against German companies.

On July 17, 2000, the President entered into

Executive Agreements with the Federal Republic of

Germany concerning the resolution of Holocaust-related

claims (including forced labor claims) against German

nationals and German companies, through the establishment

of a foundation, “Remembrance, Responsibility and the

Future.” In those Agreements, however, the President took

precisely the position urged by Petitioners: that claims like

theirs are simply not his to negotiate away. See excerpts at

pp. 121a-131a, infra.

The United States recognized “the importance of. . .

all-embracing and enduring legal peace,” although

acknowledging that private lawsuits had been brought in the

federal courts. Noting that “it would be in the foreign policy

interests of the United States” for the Foundation “to be the

exclusive remedy” for resolving Holocaust claims by U.S.

nationals against German companies, and that dismissal of

the private lawsuits was therefore desirable, the government

could do no more than commit that it “will not raise any

reparations claims against the Federal Republic of

Germany,” and undertake that it would “recommend

dismissal [of pending national versus national lawsuits] on

any valid ground.” Agreement between the U.S. and

Germany, signed July 17, 2000, Annex B, 4 3, App. p. 125a

(emphasis added).

Thus the Executive Branch expressly rejected

Germany’s demand that Holocaust-related forced labor

claims be waived by government fiat. The United States

took the position that whether or not these claims could be

pursued in U.S. courts was “under the U.S. system of

jurisprudence, for the U.S. courts to determine.” Jd. The

United States could take “no position here on the merits of

the legal claims in arguments advanced by plaintiffs or

defendants. The United States does not suggest that its

policy interests concerning the Foundation in themselves

29

provide an independent legal basis for dismissal.” Jd. at ¥ 7;

see also S. D. Murphy, “Nazi-Era Claims Against German

Companies, 94 Am. J. Int’l L. 682, 683-84 (2000).

The conclusions of the court below in this regard are

also inconsistent with the clearly-expressed intent of the

actual negotiators of the San Francisco Treaty with respect to

the scope of Article 14(b). The U.S. negotiating team

wanted an unrestricted, broad waiver of all wartime claims.

Yet it is beyond challenge that Ambassador (later Secretary

of State) John Foster Dulles was forced to compromise on

that goal, because_other Treaty partners rejected it in whole

or in part.

The court below simply assumed that the federal

government has the authority to waive “national versus

national” claims, and that it did so in this case. But such a

move would have been utterly unprecedented in American

history. The negotiators themselves did not intend the

Article 14(b) waiver to extend to “national claims under

private law.” This is further support for the view that Article

14(b) must be construed narrowly, leaving unaffected the

rights of U.S. nationals to pursue private claims against

Japanese nationals.

The court below, in misconstruing the Treaty,

reached the erroneous conclusion that the federal

government has somehow precluded the State of California

from enacting legislative measures to protect its citizens and

others, who may come into court to defend rights accruing

under the statutes and common law of the State. That

conclusion is unwarranted as a matter of law, and should be

reversed.

CONCLUSION

For all of the foregoing reasons, a writ of certiorari

should issue. .

30

. eS

Respectfully submitted,

Steven M. Schneebaum*/

PATTON BOGGS LLP

2550 M Street, N.W.

Washington, D.C. 20037

(202) 457-6300

Counsel for Petitioners

*/ Counsel of Record

Ronald Kleinman, Esq.

C. Allen Foster, Esq.

Joe R. Reeder, Esq.

GREENBERG TRAURIG, LLP

800 Connecticut Ave., NW

Suite 500

Washington, DC 20006

(202) 331-3100

David S. Casey, Jr. Esq.

Bonnie E. Kane, Esq.

Wendy M. Behan, Esq.

HERMAN, MATHIS, CASEY

KITCHENS & GEREL, LLP

110 Laurel Street

San Diego, CA 92101

(619) 238-1811

Maury A. Herman, Esq.

Leonard A. Davis, Esq.

David Fox, Esq.

HERMAN, MATHIS, CASEY,

KITCHENS & GEREL, LLP

820 O’Keefe Avenue

New Orleans, LA 70113

(504) 581-4892

James W. Kitchens, Esq.

HERMAN, MATHIS, CASEY,

KITCHENS & GEREL, LLP

610 North Street

Jackson, MS 39202-3116

(601) 355-7444

James W. Parkinson, Esq.

LAW OFFICES OF

JAMES W. PARKINSON

77564 Country Club Drive

Suite B310

Palm Desert, CA 92211-0450

(760) 772-4550

Michael Goldstein, Esq.

LAW OFFICES OF

MICHAEL GOLDSTEIN

120 Birmingham Drive, Ste. 200

Cardiff, CA 92007

(760) 436-1801

Venus Soltan, Esq.

SOLTAN & ASSOCIATES

555 Anton Blvd.

Costa Mesa, CA 92626

(714) 434-7900

Eric Isaacson, Esq.

MILBERG WEISS BERSHAD

HYNES & LERACH LLP

600 West Broadway, Suite 1800

San Diego, CA 92101

(619) 231-1058

Kevin P. Roddy, Esq.

HAGENS BERMAN LLP -

700 S. Flower Street, Suite 2940

Los Angeles, CA 90017-4101

(213) 330-7135