Opposition Brief — Guevara v. Republic of Peru

2 @O les

No. 10-389 1 CCFO

IN THE

Supreme Court of the Anited States

JOSE GUEVARA,

Petitioner,

We

REPUBLICA DEL PERU, AND

MINISTERIO DEL INTERIOR DEL PERU,

Respondents.

On Petition for Writ of Certiorari to the

United States Court of Appeals

for the Eleventh Circuit.

BRIEF IN OPPOSITION TO

PETITION FOR WRIT OF CERTIORARI

MARK A. CYMROT

Counsel of Record

LEE H. SIMOWITZ

AMBIKA J. BIGGS

BAKER & HOSTETLER LLP

1050 Connecticut Ave., NW

Washington, DC 20036

(202) 861-1500

October 22, 2010 mcymrot@bakerlaw.com

Counsel for Respondents

ATTEN AE SEE TT ATTA ART IIS MARRIOT AGRE, SS TSMR RAM)

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

QUESTION PRESENTED

The petition does not raise an issue of law, but

rather a dispute about the insufficiency of Plaintiff

Jose Guevara’s evidence. The Eleventh Circuit

correctly found that Guevara’s evidence failed to

prove any “direct etfect” in the United States from

Peru’s reward offer for accurate information directly

enabling the capture of an infamous fugitive. With-

out a “direct effect” in the United States—i.e., with-

out any nexus between the conduct and the United

States—the Eleventh Circuit dismissed the case for

want of subject matter and personal jurisdiction

under the Foreign Sovereign Immunities Act (*FSIA”),

28 U.S.C. § 1605(a)(2). The Eleventh Circuit did not

hold that the “direct effect” had to be a “legally signif-

icant act” or satisfy a requirement of “substantiality”

or “foreseeability,” as the petition suggests. These

arguments were not made below and thus, not

addressed by the Eleventh Circuit. Accordingly, they

were not properly preserved for this Court.

Guevara’s evidence of “direct effect” fails to raise

any novel or highly disputed issues. He argues that

his arrest in Miami was “in connection with”

commercial activity of Peru; the Eleventh Circuit

correctly held his arrest was in connection with his

criminal activity. The Eleventh Circuit also correctly

held that Peru’s refusal to pay Guevara in the United

States was not required by the reward offer, thus

distinguishing this case from Republic of Argentina v.

Weltover, 504 U.S. 607 (1992). See Guirlando v. T.C.

Ziraat Bankasi A.S., 602 F.3d 69, 75 (2d Cir. 2010)

(no direct effect where payment in United States not

contractually required).

(i)

ii

The circuit split interpreting the FSIA’s nexus

requirement, that Guevara asserts, is illusory and

immaterial to the outcome of this case. The three

judges of the Eleventh Circuit, including the dissent,

agreed that this case was not appropriate for a

United States court to decide, as argued by the

United States in its amicus brief to the Eleventh

Circuit. And there are numerous additional bases to

support the result.

The petition, thus, should be denied.

TABLE OF CONTENTS

Page

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STATEMENT OF THE CASE .......................004 2

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B. Proceedings Below ...................:ccccecceeeeeeeee 5

SUMMARY OF ARGUMENT .................0....0.2.04. 9

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APPENDIX

APPENDIX A: Emergency Decree No. 049-

EE deksnsdensrincéurdensdvensaaneiundienisahebaldésadadionaenens la

APPENDIX B: Federal Bureau of Investiga-

tion’s Response to Plaintiffs Motion to

Compel Compliance with Trial Subpoenas. 12a

APPENDIX C: Brief for the United States

as Amicus Curiae in Support of Republica

BPE FE scsccsiscrscsnceseunsnsssnintexisecsadidessmnanmbbasbitn 20a

(iii)

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TABLE OF AUTHORITIES

CASES Page

American Telecom Co., LLC v. Republic of

Lebanon, 501 F.3d 534 (6th Cir. 2007) .... 18

Guevara v. Republic of Peru, 468 F.3d 1289

C2 Sa, HIE vundecssunenutsscrcarecsas 1, 2, 6, 7, 12, 20

Guevara v. Republic of Peru, 608 F.3d 1297

Ce a MP cctesccdsucidiedbideustsccssukeniecoss 2, 12,19

Guirlando v. T.C. Ziraat Bankasi, A.S., 602

FAs Be CAG CP. BAO) cc evccccsncsccsscescescseses: 16

Hanil Bank v. PT. Bank Negara Indone-

sta, 148 F.3d 127 (2d Cir. 1998) ............... 16

Harris Corp. v. Nat'l Iranian Radio & Tele-

vision, 691 F.2d 1344 (11th Cir. 1982)..... 13

Republic of Argentina v. Weltover, 504 U.S.

kt oo ee oe 13, 14, 16, 17, 18

Saudi Arabia v. Nelson, 507 U.S. 349, 362

PT hsanicbabantqnensuasesseeseulesunpensiieedessecnavessooth 14

STATUTES

Re A AEE vide cicscancsnscenecsussavncacsesvatesssoess 4

Be ee OE IED daacetncosnsiesseoivntsesxtnnvtensunays 4

28 U.S.C. § 1605(a)(2).............. 1,11, 12, 14, 16, 17

MISCELLANEOUS

67 Am. Jur. 2nd Rewards § J...............000008.. 10

IN THE

Supreme Court of the United States

No. 10-389

JOSE GUEVARA,

Petitioner,

we

REPUBLICA DEL PERU, AND

MINISTERIO DEL INTERIOR DEL PERU,

Respondents.

On Petition for Writ of Certiorari to the

United States Court of Appeals

for the Eleventh Circuit.

BRIEF IN OPPOSITION TO

PETITION FOR WRIT OF CERTIORARI

OPINIONS BELOW

This case has been before the United States Court

of Appeals for the Eleventh Circuit twice. The

Eleventh Circuit’s first decision in this case held that

“a foreign state’s offer of a reward in return for

information enabling it to locate and capture a fupi-

tive” fell within the FSILA’s commercial activity excep-

tion. 28 U.S.C. § 1605(a)(2). The decision, which

reversed the district court’s dismissal of Guevara’s

lawsuit, is reported at 468 F.3d 1289 (11th Cir. 2006)

(“Guevara I”).

2

On remand, the district court granted partial

summary judgment in favor of Guevara and denied

Peru’s cross motion for summary judgment, finding

Guevara had earned the reward and thus “effectively

preempting the ... evaluation decision” of the Peru-

vian governmental body (Special High Level Commit-

tee or “SHLC”) that determined that Guevara had

not earned the reward. 608 F.3d F.3d 1297, 1305. In

response to Peru’s argument that its conduct had

insufficient nexus to the United States for jurisdic-

tion under the FSIA, the district court held that

the Eleventh Circuit already had decided the juris-

dictional issues in Guevara I. The district court

conducted no further analysis. This decision is

published at 2008 WL 4194839.

The Eleventh Circuit’s secend decision reversed the

district court, holding that: (1) it had not decided

the nexus issue in Guevara I, and (2) the district

court lacked subject matter jurisdiction because

Peru’s reward offer did not cause a direct effect in the

United States under FSIA’s commercial activity

exception. That decision is reported at 608 F.3d 1297

(“Guevara IT’).

STATEMENT OF THE CASE

A. Factual Record

Plaintiff Jose Guevara, a former Venezuelan intel-

ligence officer, provided security and a safe house in

Venezuela for Vladimiro Montesinos, the fugitive

head of Peru’s National Intelligence Agency, who had

purportedly committed a string of crimes, including

arms and drug trafficking, money laundering, extor-

tion, bribery, and multiple murders. 3a-5a_ of

Guevara Appendix A (hereinafter cited as “Guevara

App. A, __”). The first media leaks of Montesinos’

3

videotapes exposing some of his crimes led to the

resignation of Peruvian President Alberto Fujimori,

and created a political and constitutional crisis that

had repercussions in Peru for many years. Guevara

App. A, 3a. Montesinos quickly fled the country and

disappeared.’ Guevara App. A, 3a.

When the trail for Montesinos went cold, Peru’s

interim President Valentin Paniagua Corazao issued

an Emergency Decree providing for a $5 million

reward for “accurate information that will directly

enable the locating and capturing” of Montesinos.

Guevara App. A, 4a; Emergency Decree, Peru Appen-

dix A (hereinafter referred to as “Peru App. A, __”).

If more than one person supplied information, the

reward would be split among them. The reward offer

expressly required that information had to be pro-

vided to the SHLC, and that the SHLC would decide

any reward claims. Guevara App. A, 4a. The decree

authorized the government to take a loan from, and

open an account in, a Peruvian state-owned bank to

pay the reward. Guevara App. A, 4a. The decree

gave the reward recipients no right to determine the

place of payment.

While harboring Montesinos, Guevara and others

extracted at least $55 million from him as protection

money. DE 296-3, pp. 41589-92; DE 295-3, pp. 4544-

45; DE 295-2; p. 45,757; DE 296-6, pp. 68890, 68900.’

When Montesinos was running out of money,

"The Eleventh Circuit recounted the facts in the light most

favorable to Guevara. We include a more complete recitation of

the record before the district court.

* DE refers to the docket entry number on the docket in the

U.S. District Court for the Southern District of Florida, Case

No. 1:04-cv-23223-MGC.

+

Guevara made trips on Montesinos’ behalf to Lima,

Bogota, Miami and Nassau, Bahamas seeking addi-

tional funds. DE 201-2, pp. 35, 36, 94. On June 22,

2000, Guevara was arrested in Miami by the FBI

after attempting to extort a banker to release a

total of $3.7 million from one of Montesinos’ bank

accounts. Guevara App. A, 10a. Guevara was

charged with extortion and fraud against the United

States. 18 U.S.C. $§ 875(b), 371. DE 201-2, p. 108;

DE 201-6.

While in FBI custody, Guevara was told that he

would be released and the charges dropped if he

cooperated in Montesinos’ capture. He also was

informed of Peru’s reward offer, which the FBI was

aware of from published reports. Guevara App. A,

5a-6a. Supervisory Special Agent Kevin Currier

testified that Guevara had agreed to cooperate with

the FBI before he was informed of Peru’s reward.

DE 319-3, pp. 39-42. Currier, who was stationed in

Lima, consulted with Minister of the Interior Antonio

Ketin Vidal and worked out a plan for Montesinos’

capture. DE 201-3, p. 125. In a single telephone

conversation from Lima, Vidal and Currier told FBI

Agent Waldo Longa in Miami to instruct Guevara to

have his accomplices in Caracas deliver Montesinos

to the Peruvian ambassador’s residence. Guevara

App. A, 12a-13a. Vidal also explained the terms of

the reward to Longa who passed the information to

Guevara. Guevara App. A, 13. Guevara then called

his accomplice in Venezuela and supposedly gave the

instructions. Guevara App. A, 13a.

Montesinos never arrived at the Peruvian ambas-

sador’s residence; he was captured that same night

by the Venezuelan authorities. Guevara App. A, 13a.

The next day Venezuelan President Hugo Chavez

3)

announced that Venezuela had found and arrested

Montesinos. DE 201-3, pp. 55, 68; DE 201-4, p. 58.

In a diplomatic flap with both Peru and the United

States, Venezuela said it alone had located Montesi-

nos.” The head of the FBI’s Miami field office stated

publicly he did not know how Montesinos was

arrested, and Guevara told the media that the Vene-

zuelan government had known all along where

Montesinos was _ hiding. DE 285-14, DE 265-1,

DE 201-2, pp. 69-73.

Guevara then submitted a claim for the reward to

the SHLC, which conducted an extensive investiga-

tion, including meetings and correspondence with

FBI Agent Currier and Guevara’s lawyer. DE 326-5,

{ 5. Despite repeated requests over a two-year

period, Currier could not connect Montesinos’ arrest

to Guevara’s purported cooperation. DE 326-5, {J 6,

7, 14. Guevara, who was in the best position to

provide evidence regarding the circumstances of the

arrest, relied only on the coincidence of timing

between his call to Caracas and Montesinos’ subse-

quent arrest. The SHLC, therefore, concluded that

the Venezuelan Government’s intervention was an

independent event that resulted in Montesinos’

arrest, and denied Guevara’s claim. DE 326-5, JJ 16,

19; DE 201-4, pp. 20-21.

B. Proceedings Below

Guevara filed suit against Peru and two ministers

seeking the reward in Florida state court. Guevara

App. A, 6a. After removing the case to federal court,

Peru moved to dismiss on the grounds of sovereign

* Venezuela’s tension with Peru and the United States is

reported in a June 29, 2001 Associated Press Worldstream

article. DE 285-14.

6

immunity. Guevara App. A, 6a-7a. Peru argued that

a reward offer did not constitute “commercial activ-

ity” that had sufficient “nexus” to the United States

under the FSIA. DE 17, 99 10, 11. The district court

dismissed, ruling that a reward offer was not

commercial activity. Guevara App. A, 17a. The court

did not address Peru’s nexus argument. DE 31.

The Eleventh Circuit reversed in Guevara I, hold-

ing that the reward offer was commercial activity.

Guevara App. C. Because it was not a basis for the

district court ruling, the nexus issue was not

presented to the Eleventh Circuit, and the court’s

opinion did not address the issue. Guevara App. A,

17a.

On remand, Peru preserved the nexus issue in its

answer. In the midst of discovery, Guevara moved

for partial summary judgment, and Peru responded,

in part, by again arguing the nexus issue. DE 200,

pp. 17-18. The district court granted Guevara partial

summary judgment on his breach of contract claim,

finding that Guevara had earned the reward. The

court relied principally on its interpretation of a

preliminary SHLC_ resolution that purportedly

acknowledged Guevara’s role in Montesinos’ arrest.

Guevara App. A, 14a. This interpretation was

contested by an affidavit from the SHLC Chairman,

and on reconsideration, by three additional affidavits,

including by the draftsman of the resolution.

DE 201-8, 9 3; 285-15, 7] 12-13; 285-20, J] 4-5; and

285-21, (3-5. The district court also relied upon a

conclusory, hearsay affidavit by FBI Agent Currier

stating that Guevara’s cooperation “indirectly”

resulted in Montesinos’ arrest, which fails on its face

to satisfy the causation requirement in the reward

decree (“directly enabling”). Guevara App. B, 40a-

7

41a; DE 119-3, 7 16. Currier acknowledged in his

deposition that he had no personal knowledge

regarding the circumstances of Montesinos’ capture.

In opposing Guevara’s motion to compel Agents

Longa and Currier to testify at trial, the FBI

disavowed Currier’s affidavit, saying it was unautho-

rized and did not reflect the position of the FBI. Peru

App. B, p. 16a, n.2.

On reconsideration, Peru submitted two sworn

affidavits from the Venezuelan Congressional record

by Guevara’s accomplice, stating that Guevara had

secretly signaled him on the telephone call from FBI

custody to murder Montesinos. DE 297-6, p. 43,

DE 326-3, pp. 4546-47, 4549-50. Guevara did not

dispute these statements, in an affidavit or other-

wise, and they stand uncontested on this record.

DE 319-1, pp. 16, 17. Guevara’s assertion that he

had cooperated with the FBI to bring about Montesi-

nos’ capture thus evaporated, along with any possible

dispute regarding his ineligibility for the reward.

On the nexus issue, the district court found that

the issue had already been decided by the Eleventh

Circuit in Guevara I, and said no more. Guevara

App. A, 13a. After the district court denied reconsi-

deration, Peru appealed. DE 284, 344, 349.

Guevara did not address the nexus issue in his

briefing before the Eleventh Circuit, aside from

asserting that the Eleventh Circuit already had

determined the issue in the previous appeal. At oral

argument, the Eleventh Circuit offered Guevara the

opportunity to identify a nexus between Peru’s

commercial activity and the United States.

After oral argument, the United States submitted

an amicus brief urging reversal of the district court,

8

which the Eleventh Circuit accepted. Brief for the

United States as Amicus Curiae in Support of

Republica Del Peru, Peru App. C. The United States

said:

To protect the prerogatives of the Executive

Branch in its conduct of foreign affairs, both the

act of state doctrine and principles of interna-

tional comity generally preclude U.S. courts from

reviewing and overriding the sovereign decisions

of foreign states and foreign tribunals. Particu-

larly because this judgment against Peru

presents two serious foreign-relations dilemmas

for the United States, the doctrines are fully

applicable here.

Peru App. A, pp. 35a-36a.

In reversing the district court, the Eleventh Circuit

found that it had not previously decided the nexus

issue, which had been properly preserved by Peru.

Guevara App. A, 15a. On this issue, Judge Cox

dissented but suggested, nonetheless, the case might

not be appropriate for resolution by a United States

Court under the doctrine of international comity.

Guevara App. A, 32a.

On the merits of the nexus issue, the Eleventh

Circuit responded to Guevara’s nexus argument by

finding that Guevara’s arrest in Miami was in

connection with his own criminal—not Peru’s com-

mercial—activity. Guevara App. A, 25a-26a. Peru’s

alleged refusal to make payment in the United States

fails as a direct effect because Guevara had no right

to payment in the United States; the Emergency

Decree established a loan and bank account in Peru

for payment. Guevara Appendix A, 4a. The Eleventh

Circuit also found that Peru’s refusal to pay the

9

reward to Guevara was a “negative activity” that

alone did not satisfy the commercial activity excep-

tion. Guevara App. A, 25a.

The Eleventh Circuit held that the “one-off” tele-

phone conversation among the two FBI agents and

the Peruvian Minister did not constitute an act in

connection with commercial activity. Guevara App.

A, 25a. (During oral argument Guevara appeared to

abandon, as evidence of direct effect, that single tele-

phone call. Jd.) The Eleventh Circuit found this call

to be an insufficient basis to exercise personal and

subject matter jurisdiction over a foreign state by

analogy to the minimum contacts test for Due

Process. Guevara App. A, 25a.

SUMMARY OF ARGUMENT

Guevara’s petition founders on two misconceptions:

(1) he misstates the Eleventh Circuit’s holding in

order to argue that a purported circuit split on the

“direct effects” rule under the FSIA is relevant and

case dispositive; and (2) he also misstates the record

in arguing that the FBI and State Department differ

on the handling of this case.

Peru’s reward offer had no effect—legally signifi-

cant or otherwise—in the United States; the Emer-

gency Decree required all material events to occur in

Peru, and Guevara’s claims of a direct effect are

factually inaccurate and legally deficient by any

precedent. Guevara’s case was properly dismissed for

lack of subject matter jurisdiction, and even if subject

matter jurisdiction were present, his case would be

dismissed on principles of international comity (as

even the dissent in the Eleventh Circuit suggested)

and act of state, as well as numerous other grounds

10

including the merits (Guevara did not earn the

reward).

Public policy also supported dismissal. As set forth

in the United States’ amicus curiae brief, assuming

jurisdiction over a foreign reward program would

violate principles of international comity, create

serious diplomatic tensions, and necessarily result in

United States law enforcement and _ diplomatic

decisions regarding our own reward programs being

subjected to review by foreign courts. The United

States stated:

(T]he federal government has a profound interest

in preventing the district court’s judgment from

undermining our nation’s relationship with a

stable democratic partner in South America.

Moreover, the United States operates its own

highly successful international reward programs,

and the judgment here raises the troubling

specter of foreign courts overriding decisions

made by U.S. law enforcement and diplomatic

officials.

Peru App. C, 28a. The United States has at least 15

statutory reward programs, and frequently denies

reward claims. 67 Am. Jur. 2d Rewards §5. As

the United States recognized, any interference by

the United States in Peru’s sovereign decisions

regarding a notorious former government official

would stress an otherwise friendly relationship. The

United States, therefore, urged the Eleventh Circuit

to dismiss Guevara’s case on the alternative grounds

of international comity and act of state.

The question presented, as framed by Guevara, did

not and could not have determined the result of this

case. The single phone call, and Peru’s “negative

11

activity” in failing to pay the reward, had no direct

effect in the United States, regardless of whether

those actions or non-actions are characterized as

“legally significant acts.” The Eleventh Circuit’s

ruling was correct, and numerous other grounds

support dismissal. The petition should be denied.

ARGUMENT

Even if properly preserved for this Court—which it

was not— Guevara’s arguments do not raise the issue

of whether a “legally significant act” must occur in

the United States, as the petition argues.* Guevara

did not raise the issue below, the Eleventh Circuit

did not address the issue, and none of Guevara’s

arguments for direct effect turn on the outcome of

this issue. Under any existing interpretation of the

direct effect clause, Peru’s conduct did not waive

sovereign immunity under the FSIA.

The Eleventh Circuit held that the evidence did not

establish that Peru’s activities fell within any of the

three clauses of FSIA’s commercial activity exception,

including the direct effect clause. Guevara App. A,

20a-26a. In his petition, Guevara concedes the first

two clauses do not apply and challenges only the

* Guevara incorrectly asserts that this issue was raised below

and addressed by the Eleventh Circuit two times. Petition for

Writ of Certiorari, (hereinafter cited as “Pet. _”), pp. 10-11.

Neither opinion addressed whether a “legally significant act”

must occur within the United States under the commercial

activity exception. The Eleventh Circuit’s first opinion address-

ed whether the offer of a reward was commercial activity. Jd. at

48a. The second opinion addressed whether Peru’s acts fell

within any of § 1605(a)X2)’s three clauses. Jd. at 20a-26a.

Guevara did not raise below and the courts did not address

whether a “legally significant act” must occur in the United

States.

12

Eleventh Circuit’s determination that the third

clause—or “direct effect” clause—does not establish

an exception to immunity for Peru. The clause

provides an exception to immunity when:

... the action is based .. . [3] upon an act outside

the territory of the United States in connection

with a commercial activity of the foreign state

elsewhere and that act causes a direct effect in

the United States.

§ 1605(a)(2). Guevara argues that the Court should

grant his Petition so that the Court can resolve a

purported circuit split on “whether the commercial

activity exception’s ‘direct effect’ clause requires

evidence that a ‘legally significant act’ occurred

within the United States in the order to vest Ameri-

can courts with jurisdiction over a foreign sovereign.”

Pet., i-ii, Question Presented.

This case is not appropriate for resolving those

issues. Guevara did not raise in the courts below the

issue of whether Peru’s purported actions involving

the United States were or were not “legally signifi-

cant,” or whether any circuit split on that question

existed. Rather, he merely asserted that the

Eleventh Circuit already had decided the issue of the

court’s subject matter jurisdiction in its 2006

Guevara I opinion. The Eleventh Circuit did not

require Guevara to plead or prove the existence of a

“legally significant act.” Indeed, the Eleventh Circuit

did not address the “legally significant act” issue in

Guevara II at all—understandably so, because

Guevara did not raise it. As this issue has not been

preserved, the Court should deny Guevara’s petition

on this ground alone,

13

As support for his argument that the Eleventh

Circuit applied the “legally significant act” test,

Guevara states that the question the court defined

was whether “the effect was sufficiently ‘direct’ and

sufficiently ‘in the United States’ that Congress

would have wanted an American court to hear the

case.” Pet. 14 (citing Guevara App. A, 23a-24a). This

language clearly shows that the Eleventh Circuit was

concerned about whether the effect was sufficiently in

the United States, not whether the conduct or act

was sufficiently in the United States. In determining

whether Peru fell within the “direct effect” clause of

the commercial activity exception, the Eleventh

Circuit correctly held that “[nJeither of Guevara’s

arguments for a direct effect in the United States

reflects [Republic of Argentina v.| Weltover [504 U.S.

607 (1992)]’s requirement of immediate consequences

or Harris Corp. [v. Nat'l Iranian Radio & Television,

691 F.2d 1344 (11th Cir. 1982)]’s focus on significant

financial consequences in the United States. There-

fore, we cannot conclude that a direct effect occurred

in the United States as a result of Peru’s promise to

pay the reward money.” Guevara App. A, 26a.

The Eleventh Circuit thus was not called on to

assess the nature or quality of Peru’s alleged acts—

“legally significant” or not—because no act was

alleged or proven that could possibly have had a

direct effect in the United States. Equally to the

point, the Eleventh Circuit did not require that

Guevara prove a “legally significant act,” either in

the United States or outside it. Because Guevara did

not have to meet any such legal standard, that test

had no significance to the outcome of this case.

Guevara’s petition consists mostly of an academic

discussion of the “legally significant act” test in the

14

courts; the petition barely attempts to identify Peru’s

acts that supposedly waived its sovereign immunity

under the FSIA. Guevara argues that the reward

“offer itself constituted commercial activity.” Pet. 17-

18. Guevara maintains that he accepted Peru’s offer

by performing in the United States, “1.e., he provided

information and coordinated efforts from the United

States which led to the location and capture of the

fugitive Montesinos[,|!” which presumably provided

the “direct effect” on the United States under the

third branch of § 1605(a)(2). Pet. 18. The record

does not support his argument, and Peru’s reward

offer defined acceptance as the delivery of informa-

tion to the SHLC in Peru.

Guevara’s arrest was not commercial activity

carried on by Peru, in the United States or in Peru.

As the Eleventh Circuit properly held, Guevara’s

arrest and subsequent cooperation was in connection

with Guevara’s criminal activity, not the reward.

Guevara App. A, 25a-26a (“Guevara’s arrest was ‘an

immediate consequence’ of his criminal activity, not

of Peru’s offer of a reward for Montesinos’s capture”

(quoting Weltover, 504 U.S. at 618). Law enforce-

ment activities do not fall within the commercial

activity exception. Saudi Arabia v. Nelson, 507 U.S.

349, 362 (1993) (“Exercise of the powers of police and

penal officers is not the sort of action by which

private parties can engage in commerce.”). Guevara’s

call to Caracas was not a condition of the reward;

it was law enforcement activity which cannot provide

the basis for jurisdiction under the commercial activ-

ity exception.

The factual record also defeats Guevara’s argu-

ment. Guevara was required to make the call to

Venezuela for the much more immediate purpose of

15

obtaining his “get out of jail free card” from the FBI.

DE 319-3, pp. 39-42. Guevara submitted no evidence

suggesting he was motivated to make the Venezuela

call to earn the reward; according to FBI Agent

Currier, Guevara had agreed to cooperate with the

FBI before he knew about Peru’s reward offer.

DE 319-3, pp. 39-42; DE 119-3, J 8. Even assuming

that his purported cooperation would satisfy the

reward offer, the uncontested evidence is that

Guevara was only feigning cooperation while order-

ing Montesinos’s murder from FBI custody. Dk 297-

6, p. 43, DE 319-1, pp. 16, 17, DE 326-3, pp. 4546-47,

4549-50. In addition, Guevara presented no evidence

that his telephone call to Caracas was related to

Montesinos’s capture, except as a post hoc, ergo

procter hoc coincidence of time. He even admitted

that the Venezuelan government did not need his

information; they knew where Montesinos was from

the outset. DE 285-14; DE 201-2, pp. 69-73.

Nor could the reward offer itself have a direct effect

in the United States. Reciting the facts in the light

most favorable to Guevara, the Eleventh Circuit

confronted a record in which the Emergency Decree

defined the operative performance as the receipt of

information by the SHLC in Peru (which never

occurred); Guevara made a claim to the SHLC in

Peru; his counsel met with members of the SHLC in

Peru; the alleged breach of contract occurred when

the SHLC, after an extensive and good faith review,

denied Guevara’s claim in Peru; and Peru declined

to make payment from a bank account authorized

by the Emergency Decree to be opened in Peru.

Guevara App. A, 20a; Peru App. A, pp. la-Ga.

Guevara argued that even though every event in

connection with the offer took place in Peru, a direct

effect sprang from what the Eleventh Circuit de-

16

scribed as “Peru’s failure to make the reward pay-

ment within the United States—a sort of ‘negative

activity[.]” Guevara App. A, 25a. The Eleventh Cir-

cuit observed that no federal court had ever relied on

such “negative activity” to confer subject matter

jurisdiction under § 1605(a)(2), and correctly rejected

Guevara’s argument. See also Guirlando v. T.C.

Ziraat Bankasi A.S., 602 F.3d 69, 76 (2nd Cir. 2010)

(under FSIA, “although the failure to act may have a

legally significant effect in the place where the act

was to have been performed, the failure to act is not

itself an act.”).

Guevara’s argument that he was entitled to

payment in Miami fails because it is factually inaccu-

rate, as the Eleventh Circuit found. Guevara App. A,

23a. The Emergency Decree authorized a loan and

bank account in Peru for payment of the reward. Td.

The decree requires the loan to be taken from Banco

de la Nacion, a state-owned bank, and describes it as

an internal indebtedness operation. Nothing in the

decree requires payment in the United States, or

gives Guevara the power to choose the place of

payment. Thus, Guevara’s case is distinguished from

Weltover, 504 U.S. at 619 (direct effect because

payment due in the United States) and Hanil Bank v.

PT. Bank Negara Indonesia, 148 F.3d 127, 132 (2d

Cir. 1998) (direct effect when plaintiff entitled under

a letter of credit to designate place of payment and it

designated its New York bank account), and similar

to the Second Circuit’s recent decision in Guirlando.

Guevara argued (but abandoned) the proposition

that a direct effect in the United States occurred by

virtue of the single Lima-Miami telephone call in

which Minister Vidal conveyed the terms of the offer

to FBI Agent Longa. The Eleventh Circuit held that

17

Guevara’s acceptance-related activity involved only

this “one-off” telephone communication that was too

de minimis to support subject matter jurisdiction,

using the minimum contacts personal jurisdiction

test as an analogy, as this Court did in Weltover, 504

U.S. at 619. Guevara App. A, 25a. The Vidal call

also was in connection with law enforcement—not

commercial—activities. Jd. The participants were

discussing how to bring about Montesinos’ arrest,

and Minister Vidal did nothing more than repeat the

terms of the reward offer.

In short, the Eleventh Circuit correctly determined

that no act performed by any character in this drama

brought about a “direct effect” in the United States

within the meaning of § 1605(a)(2) of the FSIA. This

conclusion did not turn on whether any act was

“legally significant,” because no act, regardless of how

it could be characterized, produced the requisite

direct effect in the United States. No party, includ-

ing Guevara, raised this issue, and the Eleventh

Circuit had no occasion to consider it.

Even though the “legally significant act” test is

irrelevant to the outcome of this case, Guevara

evidently believes that a circuit conflict is a potential

ticket to review by this Court. He therefore raises

this issue for the first time in his petition, and

devotes the lion’s share of the petition to explication

of a purported circuit conflict on this irrelevant issue.

Guevara argues that some circuits require a

“legally significant act” in the United States under

the direct effect clause, while others do not. He

asserts that the Eleventh Circuit requires a legally

significant act to occur within the United States.

18

Contrary to Guevara’s assertions, the Eleventh

Circuit does not require a legally significant act,

neither within nor without the United States. In this

case, the Eleventh Circuit explicitly followed this

Court’s articulation of the nexus rule in Weltover, 504

U.S. at 618, where the Court held that “an effect is

‘direct’ if it follows ‘as an immediate consequence of

the defendant’s . . . activity.” (ellipses in original).

Guevara App. A, 23a. The Eleventh Circuit did

not mention the legally significant act test at all,

let alone the location of any such act, nor did it

include or make reference to a “substantiality” or

“foreseeability” requirement, which Weltover expressly

rejected.

Here, the Eleventh Circuit adopted the sensible

approach recently exemplified by the Sixth Circuit in

American Telecom Co., LLC v. Republic of Lebanon,

501 F.3d 534 (6th Cir. 2007). Noting that some

circuits adopt the legally significant act formulation,

others reject it, and still others find it “helpful but

not required,” the Sixth Circuit said: “But, while the

circuits have framed the inquiry differently, these

differences have no impact here. The present case is

easily resolved without resort to any legally signifi-

cant act....” Id. at 540. Like the Eleventh Circuit

here, the Sixth Circuit found that the conduct alleged

simply could not have had a direct effect in the

United States, and dismissed the case for want of

subject matter jurisdiction under the FSIA.

Notably, although the Sixth Circuit in American

Telecom catalogued the circuits with regard to their

positions on the “legally significant act” issue, it did

not identify the Eleventh Circuit as yet having taken

any position on the question. That agnosticism

remains unchanged after the Eleventh Circuit’s deci-

19

sion here. Even if there is a circuit conflict on this

issue, the Eleventh Circuit’s non-position is not in

conflict with any other circuit, making this case a

particularly unsuitable vehicle for resolving whatever

conflict may exist.

Guevara also relies on public policy arguments,

none of which are valid.

First, Guevara maintains that because the United

States—like Peru—offers rewards as adjuncts to law

enforcement, United States courts should compel

Peru to pay him the award he contends that he has

earned. Pet. 18-19. To the contrary, the SHLC, a

duly constituted organ of the Peruvian government,

following in good faith the procedures set out in the

reward offer, and with the participation of the FBI

and Guevara’s attorney in the process, determined

that Guevara had not earned the reward. As the

United States explained in its amicus brief to the

Eleventh Circuit, and as Judge Cox noted in his

dissent, the courts of the United States would violate

basic principles of comity if they sat in judgment on

the acts of other sovereign nations in determining

entitlement to reward offers. indeed, public policy

dictates precisely the opposite conclusion from that

urged by Guevara. As the United States also ex-

plained in its amicus brief, if a United States

court can “effectively preempt{] the ... evaluation

decision” of the Peruvian government (Guevara II,

608 F.3d at 1305), courts of other nations would

be encouraged to “preempt the .. . evaluation

decision[s]” of the United States, and order payment

of rewards to claimants that the United States had

determined to be unjustified.

In fact, when Guevara accepted the reward offer,

he also accepted the stipulation that his entitlement

20

to the reward would be decided by the SHLC in Peru.

Guevara is no different from a party who signs a

garden-variety contract that contains a forum selec-

tion clause dictating how and where disputes under

the contract will be resolved. Guevara, having

accepted and participated in that process, cannot now

ask a U.S. court to supplant the Peruvian tribunal

whose decision Guevara agreed to respect.

Second, Guevara reverses course and argues that a

reward offer is not “typical” commercial activity, and

should be evaluated under some unspecified new

FSIA standard “requir[ing] closer scrutiny.” Pet. 21.

(“This is not a typical fact pattern; this case does not

involve the type of commercial activity regularly

considered by the courts in determining whether

an exception to the FSIA’s presumed immunity

applies.”). Guevara cannot have it both ways: hav-

ing persuaded the Eleventh Circuit in Guevara I

that a reward offer is commercial activity potentially

subject to FSIA jurisdiction, Guevara cannot in good

conscience maintain in this Court that a reward offer

is in some way less commercial than the activities

that ordinarily fall within the exception. Indeed, if

Guevara had made this concession to the Eleventh

Circuit in Guevara ]—that a reward offer is not

“typical” commercial activity—this case would have

been over in 2006.

Third and finally, Guevara argues that FBI Agent

Currier’s urging to the Peruvian government to

pay the reward to Guevara exposes a “yawning

conceptual gap” between the FBI and the position

taken by the United States in its amicus brief to the

Eleventh Circuit. Pet. 22. That “gap” is illusory.

The FBI later disavowed Currier’s statements as

unauthorized. Even if the FBI had not disavowed

21

them, Agent Currier’s letters do not contradict the

considered position taken by the United States in

this litigation with regard to the application of the

doctrine of international comity. Agent Currier did

not and could not take a legal position on this issue

on behalf of the FBI.

CONCLUSION

There is no law, no equity and no public policy that

would justify the district court assuming jurisdiction

over Guevara’s reward claim and entering judgment

for Guevara. Guevara invites this Court to second-

guess the decision of an organ of the Peruvian

government, which is an inappropriate undertaking

for a United States court. His petition should be

denied.

Respectfully submitted,

MARK A. CYMROT

Counsel of Record

LEE H. SIMOWITZ

AMBIKA J. BIGGS

BAKER & HOSTETLER LLP

1050 Connecticut Ave., NW

Washington, DC 20036

(202) 861-1500

October 22, 2010 mcymrot@bakerlaw.com

Counsel for Respondents

APPENDIX

la

APPENDIX A

STATUTE LAWS

YEAR XIX - No. 7608

EMERGENCY DECREES

EMERGENCY DECREE NO. 049-2001

ESTABLISHING A FINANCIAL REWARD IN

EXCHANGE FOR ACCURATE INFORMATION

LEADING TO THE LOCATION AND CAPTURE OF

VLADIMIRO MONTESINOS TORRES

THE PRESIDENT OF THE REPUBLIC

WHEREAS:

The authorities of the Peruvian Judiciary, the

Office of the Prosecutor General and the National

Police are concentrating working on prosecuting sev-

eral criminal acts committed by various officials

between 1990 and 2000;

Vladimiro Montesinos Torres stands out among said

officials, who, during the aforementioned period held

the position of Advisor in the National Intelligence

System.

The aforesaid person was involved in serious crimes

which affect the security of the State and society

overall, in accordance with the evidence which has

been obtained in special proceedings and judicial

inquiries which are being conducted pursuant to

Laws Nos. 27378, 27379 and 27380 on organized crime;

Therefore, a warrant for his arrest has been issued

by several Courts as the alleged perpetrator of crimes

against government administration, public corrup-

tion, embezzlement, crimes against persons, aggravated

murder, drug trafficking, national security and others;

2a

There is a need to adopt exceptional economic and

financial measures to grant a financial reward to the

person or persons who provide(s) accurate informa-

tion which will enable locating and capturing

Vladimiro Lenin Montesinos Torres, in accordance with

the procedure set forth in this Emergency Decree;

Said measures will contribute to deciding the

criminal acts under investigation, by virtue whereof

there are matters of national security which justify

its immediate issuance;

Exercising the authority vested under Article 118

paragraph 19) of the Peruvian Political Constitution:

As approved by the Cabinet by way of a vote; and

required to report to the Congress of the Republic;

DECREES:

Article 1-Financial Reward

Establish a financial reward in the amount US

$5,000,000.00 (FIVE MILLION 00/100 UNITED

STATES DOLLARS),- which shall be given to the

person or persons who provide(s) accurate informa-

tion that will directly enable locating and capturing

Vladimiro Lenin Montesinos Torres. In the event

several persons provide the said information, the

financial reward shall be divided among them.

Article 2-Special High Level Committee

Establish a Special High Level Committee in the

Ministry of the Interior /Department of Homeland

Security] for the purpose of evaluating information

received and deciding on granting the financial reward.

The Special High Level Committee shall consist of:

— the Secretary of Homeland Security, who will

preside

— the Undersecretary of Homeland Security

— the Director General of the National Police

3a

— the Director General of Intelligence of the

Department of Homeland Security

Article 3- Accurate Information

For purposes of this Emergency Decree, accurate

information shall be that [information] provided

through any means to the Special High Level Com-

mittee and which enables locating and capturing

Vladimiro Lenin Montesinos Torres, who is wanted.

Article 4-Use of a Pseudonym

The informant or informants may use a pseu-

donym, in which case the Special High Level

Committee shall provide a secret code for subsequent

identification upori receipt of the information in order

to grant the Financial Reward.

Articie 5-Protection and Safety Measures

The Special High Level Committee, in keeping with

the degree of risk or danger, shall adopt the following

measures for the protection and safety of the

informant:

a) Police protection for the informant and his

family, which may include a change of residence;

b) Withhold his identity and other personal infor-

mation during proceedings.

Article 6- Secret Information

All information involving application of this Emer-

gency Decree is secret. Any person who violates this

provision, shall be administratively, civilly or crimi-

nally liable, as the case may be, in accordance with

current law.

Article 7- Scope of the Financial Reward

The Department of Homeland Security shall pay

the Financial Reward 24 hours after the actual

4a

location and capture of Vladimiro Lenin Montesinos

Torres. Said reward, as well as the measures for safety

and protection, shall apply to nationals and foreigners.

Article 8-Government Loan

The Department of the Economy and Finance is

hereby authorized to obtain a Government Loan with

Banco de la Nacién for up to US $5,000,000.00 (FIVE

MILLION 00/100 UNITED STATES DOLLARS), ear-

marked for financing the issuance of the Financial

Reward which is the object of the Emergency Decree;

said funds shall be deposited in an account defined by

the General Directorate of the Treasury for channe-

ling to the Department of Homeland Security in the

same currency as the pertinent disbursement is made.

The government loan shall be paid over a period of

four (4) years, which includes a one-year (1) grace

period and an option for early payment, in consecutive

semi-annual installments, and if possible, in equal

amounts, accruing interest at the LIBOR rate plus 3%.

Article 9- Servicing the debt

Services for pay off, interest and other expenses

relating to this Government Loan shall be handled by

the Department of the Economy and Finance, debited

from funds provided therefore in accordance with

inter-sectoral priorities and goals of the Sector in

each fiscal year budget for Public Debt servicing.

Article 10- Exercise of the early payment option

and charged to recoveries

The first funds recovered from the criminal acts

object of this investigation, as set forth in the whereas

clauses of this Emergency Decree, shall be ear-

marked for early pay off of the debt incurred in the

Government Loan authorized in Article 8, until paid

5a

in full, in exercise of the stipulated early payment

option.

Article 11- Authorization to sign

The Secretary of the Economy and Finance or his

appointee are hereby empowered to sign the loan

contract, and the Director General of National Debt

is also empowered to sign the other government loan

documents authorized in the foregoing article.

Article 12- Schedule and payment

The National Government Budget Administration

and the Public Treasury General Directorate shall

schedule and draw, respectively, payable to the

Department of Homeland Security section, up to the

equivalent in legal tender of the amount indicated in

this Emergency Decree, charged to the Supplemen-

tary Loan that shall be approved by the pertinent law

and/or to the budgetary modifications on closing of

Fiscal Year 2001, as stipulated in Law No. 27209, on

Management of the National Budget.

Article 13-Approval

This Emergency Decree shall be approved by the

Cabinet and the Secretaries of the Economy and

Finance and Homeland Security.

Issued at the Government House in Lima on the

sixteenth of April two thousand one.

VALENTIN PANIAGUA CORAZAO

Constitutional President of the Republic

JAVIER PEREZ DE CUELLAR

Cabinet Council President

JAVIER SILVA RUETE

Secretary, Economy and Finance

6a

ANTONIO KETIN VIDAL HERRERA

Secretary of Homeland Security

22266.

(Translator’s note:] In the U.S., the Department of

Homeland Security is equivalent to the Ministry of

the Interior of the Republic of Peru.

7a

CERTIFICATE OF ACCURACY

I, Esther Cecilia Crespo, an interpreter certified by

the Administrative Office of the United States

Courts, for and on behalf of Liaison Services, Inc.,

hereby certify that the foregoing translation,

attached hereto and consisting of 2 page(s), is a true

and accurate translation of the original document.

/s/ Ksther Cecilia Crespo

Esther Cecilia Crespo

I

U.S. Court Interpreter ¢ Translator

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DU. N° 049-2001.- Esta-

ampensacién Econdmica a

(adades de] Poder Judicial. ¢! Ministe

0 y ja/Policia Nacional del Pend, se encuen-

bocadas shesclarccimicniu de lus diversos ilicitos

Penales cn que fabrian currido diferentes funcions-

rins.catre los aifos 1990 y 2000:

Que, entre gichos funcionanos desiaca la persona

de Viadimiro Lenin Monicsinos Torres. que en el

periodo establackie ejcrcid el cargo de Ascsor cn cl

Sistema de Intefigencia Nacional:

Que, Ja persona antes indicada estaria trans en

graves dehtos que alectan. la seguridad del Estado y a

la somedad en s\i conjunto, conforine a las evidencias |

Que $¢ vienen ol¥emicndo en los procedimicnios espe- |

clales ¢ investigactuncs judiciales gue se Hevan a cabo

en aplicacidn de las Leyes N°s. 27378 (T.295,§154}.

27379 [T.298,§1S5] y 27380 (1.295,8156] relauvos a

$s crnunalidad unganizada:

Que, por tai motivo se encucnim mequisitoriado por

diferentes Juzgadas, por ser presunto aulor de delitos

contra 1a Administracién Publica, Corrupcidn de Tun-

Gonanos, Peculado, Conira ta Vida, el Cuerpo y la

Salucl, Homicidio Calificado, Homicidio Agravado,

Trafico Hicito de Drogas, Contra la Seguridad y otras:

Que, resulia necesano adoplar medidas excepcio-

nalts en materia econdmica y financier para el otor-

£amiento de una compensacion ccondmica p favor de

la persona oO personas que proporcionen informacida

veraz que permita 1a ubicacidn y capturm de Viodimiro

Lenin Montesinos Tomes, de contormidad con el pm.

7 SNihek;

cedimienio que cl presente Dex Prin era :

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Que, dichas medidas contnhuirdn con el esc laree:

mento de los slicios penales que s¢ encuentran cn

investiaacron eo virtud de lo cual existen razom’s de

interés nacional que: juslican su expedicidn en tania

iinediata

La uso de las facultades conteridas en elmerso 19)

ct Ardiculo TIS® de da Constitucién Polittea del Peru

{1.241,§213)

Con el vulu aprobatono del Consejo de Minsstras

Con cargo de dar cuenta a! Congreso de la Repo

blica

DECRETA

Articulo 1°.- Compensacion Ecandmica

Establézcase una Compensacidn Econdmica gs

cendente a la suma de USS § 000 00,00 (CINCO

MILLONES Y 00/100 DOLARES AMERICANOS

gue seri olurgade ala persona que proporcione infur-

macion veraz que pernita en forma directa la ubscacion

y captura de Vladimiro Lenin Montesinos Tones Tra

tindose de vanas persanas que proporcionen dicha

informacion, ls commpensacidn coondmica sera distri

buida entre éstas,

Articuln 2°.- Comision Especial de Alto Nive!

Coastituyase en el Minisiceo del Interior una Co

misidn Especial de Alto Nivel con Ja finalidad ok

cvaluar In mformacion recibida y decidir el otorga-

mientu de ta Compensacién Economica. La Comission

Especial de Alto Nivel estard conformada por:

- Muinistro del latevior, quien lo presidirs

- Viceministro del Interior

— Director General de fu Policia Nacional

~ [ircctor General de Inteligencia dei Minisieno de

Interior

Articulo 3°.- Informacién Veraz.

Para fos efectos del presente Deereto de Urgencia

se considers informacidn veraz 1a que se propacciane

por cualquier mecho ala Conusidn Especial de Alte

| Nivel, y que pasihilite fa ubicacidn y captura ded re

quisiionado Viadimiro Lenin Montesinos Tones

Articula 4*.- Uso de Scuddnimo

El informante o los infonnanies podein usar un

scuddnuna, en cuyo caso 19 Comision Especial de Alto

Nivel a la recepcidn de ta infonnacidn te asignard un

cddigo seereto que permita su posteriur ideniificocion

pam efecto del otorgamiento de la Compensacidn Eco-

némica

Articulo $*.- Medidas de Protecclén y Seguridad

LaComisién Especial de Alto Nivel, sega cl vrado

de nesgo 0 peligro, adoptard las siguientes medidas de

protecerdn y seguridad de! informante:

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Articulo 6°. Informacion de Curdcter Secreto

Voda informacion relucronaha con la apheacidi del

presente Decrvto de Urgenciis Gene e} canictey de se-

ered, Los que infrinjan esta disposicidn, weaned en

responsabilidad adminisirativa, civil y/o penal, seguin

conesponda, de confonmidad con lo establecsdo en la

legistacién vigenty,

Articulo 7". Aleance de la Compensaciin keu-

némica

El Ministerio del [nterior bard ctectiva la Compen

sacién Econdmica a las 24 horas de produccion ta

ubivactén y captup¥de Viadimiro Lemn Monicsinos

AsACION asi como las medidas de

1dad, aleanzan anacionales y eaten:

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f a! Ministerio de Economia y Finanzas a

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in General del Tesoro Publice pura su cana-

diente

La operacién de Endeudanuenio lntcmu seni iii

celada en un plazo de cuatro (4) ais, que incluye un

(1) aho de gracia, mediante cuolas semesirtics cin-

culivas ¥en lo posible iguales, devenganda una tasa de

interes anual de Labor mds un mareen adiciorxal de 3%,

con opcion de prepago

Articulo 9.- Servicio de la Deuds

FI servicio de amorizacidn. iniereses y demis gay-

O$ Que OCasiOne fa presenic operacidn de Enmlouds-

micmto Interno serdn atendhdos por el Ministero de

Economia y Finanzas, con cargo a los recursos gue ont

funcidn de las peoridades intersectonales y metas del

Sector le coreespondan en cada Ejecercin Presupuestal

para cl sesvicto de la Deuda Publica

Articula 10°. Ejercicio de li opcian de prepago

con cargo a recuperactones

Las primeras recuperaciones de los recursos prove-

nienies de los ilicitos penales nuterial de investigacion

sciialados en la parte consicterativa del presente Decre-

to de Urgencia serdn destinadas a prepagar Ia douda

Ceavads de la operacién de Endeudamiento Intemo

cue dutoriza eb Articulo 8* hasta su cancelacidn (otal,

cn gjercicid de la opcién de prepago establecida.

Articulo 11° Autorizacion de Suscripcién

Autoriaase al Ministro de Economia y Finanzas 0 a

quien él designe, a susenbir cl contralto de présiaiao,

asi como al Director General de Crédito Publico a

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I certify that the official named below, whose true

signature and official seal are, respectively, sub-

scribed and affixed to the annexed document, was, on

this day, empowered to act in the official capacity

designated in the annexed document, to which faith

and credit are due:

JULIA ADELA MOREANO DE DUENAS

This Embassy assumes no responsibility for the

contents of the attached document.

/s/) JAMARI SALLEH

JAMARI SALLEH

Consul U.S. Embassy

Lima, Peru

April 10, 2008

Date

12a

APPENDIX B

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF FLORIDA

MIAMI DIVISION

[Filed Aug. 15, 2008]

iaciasecitenciloneemmanl

/

Case No. : 04-23223-CIV-COOKE/BANDSTRA

JOSE GUEVARA,

Plaintiff,

Si

REPUBLICA DEL PERU, MINISTERIO DEL

INTERIOR DEL PERU, ANTONIO KETINVIDAL, and

FERNANDO ROSPIGLIOSI,

Defendants.

FEDERAL BUREAU OF INVESTIGATION’S

RESPONSE TO PLAINTIFF'S MOTION

TO COMPEL COMPLIANCE WITH

TRIAL SUBPOENAS

The United States Department of Justice, Federal

Bureau of Investigation (the “FBI”), through the

undersigned Assistant United States Attorney,

responds to Plaintiff, Jose Guevara’s “Motion to

Compel Compliance with Trial Subpoenas or... to

Perpetuate Testimony . . .” of Special Agents Kevin

Currier and Waldo Longa as follows:

INTRODUCTION

Plaintiff Jose Guevara is suing Defendants Peru, et

al., to collect a $5 million reward Defendants allegedly

offered for information leading to the capture and

l3a

arrest of an international fugitive, Vladimir Lenin

Montesinos. Plaintiff has issued subpoenas for testi-

mony at trial by FBI Special Agents Kevin Currier

and Waldo Longa. Those Agents were involved in the

FBI’s search for Montesinos in late 2000 and 2001.

Plaintiff alleges that, in response to a promise from

the government of Peru which was communicated to

him by the Special Agents, he provided information

which led to Montesino’s capture. Plaintiff:seeks to

elicit testimony from the Agents about “the specific

facts leading up [to] the offer and acceptance by

[Plaintiff] of the $5 million reward .. .”. MOTION To

COMPEL, p.3.

Pursuant to the Federal Housekeeping Statute,

5 U.S.C. § 301, and the Supreme Court’s decision in

United States ex rel. Touhy v. Ragen, 340 U.S. 462

(1951),’ the Department of Justice treated the trial

subpoenas issued to Special Agents Currier and

Longa as requests for testimony under the DOdJ’s

Touhy regulations at 28 C.F.R. § 16.21 et seg. As

explained to Plaintiff after careful and thorough

deliberation, the DOJ conciuded that testimony

concerning the FB!’s search for Montesinos would

necessarily reveal the FBI’s theories in that case, its

investigative sources and methods, and the identities

of witnesses. The DOJ expressed its concern that the

testimony sought would thus cempromise ongoing

"In Touhy, the Court upheld the authority of the Attorney

General to prescribe regulations for the custody, use, and pre-

servation of DOJ records. 340 U.S. at 468. As the Court noted,

“(w]hen one considers the variety cf information contained in

the files of any government department and the possibilities of

harm from unrestricted disclosure in court, the usefulness,

indeed, the necessity, of centralizing determination as _ to

whether subpoenas duces tecum will be willingly obeyed or

challenged is obvious.” Jd.

l4a

and future FBI investigations—a potential harm to

the public which outweighed Plaintiffs need for the

testimony in the prosecution of this civil lawsuit. The

DOJ also determined that testimony sought impli-

cated other common law and statutory privileges or

bars on disclosure. For all of these reasons, the DOJ

elected not to authorize the requested testimony.

The DOJ’s denial of Plaintiffs requests for Agents

Currier and Longa’s testimony is subject to review

under the Administrative Procedure Act (the “APA”),

5 U.S.C. § 701, et seg., not Rule 45 of the Federal

Rules of Civil Procedure. The APA requires that

a court defer to an agency’s decision so long as the

decision was not arbitrary or capricious. As demon-

strated below, the DOJ’s decision in this case was

neither arbitrary nor capricious. The Court should

therefore defer to the DOJ’s denial of Plaintiffs’

requests for the Special Agents’ testimony at trial

and deny Plaintiffs Motion to Compel

ARGUMEN™

I. The DOJ’s Decision To Deny Authorization for

Special Agents Currier and Longa’s Testimony

Must Be Upheld Because it Was Not Arbitrary,

Capricious, an Abuse of Discretion, or Otherwise

Not in Accordance With Law

“[A] federal employee may not be compelled to obey

a subpoen contrary to his federal employer’s instruc-

tions under valid agency regulations.” Moore v. Armour

Pharm. Co., 927 F.2d 1194, 1197 (11th Cir.1991)

(quoting Boron Oil Co. v. Downie, 873 F.2d 67, 73

(4th Cir.1989)). The DOJ’s Touhy regulations require

that, in deciding whether to authorize an employee

to testify in response to a subpoena, the DOJ

official should consider “[w]hether such disclosure is

l5a

appropriate under the rules of procedure governing

the case or matter in which the demand arose,” and

“(wlhether disclosure is appropriate under the rele-

vant substantive law concerning privilege.” 28 C.F.R.

§ 16.26(a). Among other things, the DOJ’s Touhy

regulations prohibit the disclosure of information

that “would reveal a confidential source or informant,

unless the investigative agency and the source

or informant have no objection,” or “would reveal

investigatory records compiled for law enforcement

purposes, and would interfere with enforcement

proceedings or disclose investigative techniques and

procedures the effectiveness of which would thereby

be impaired.” Jd. at § 16.26(b)(4), (b)(5).

The DOuJ’s decision not to permit the testimony of

Special Agents Currier and Longa is a final agency

action reviewable under the Administrative Proce-

dure Act. See 5 U.S.C. § 704; see also Moore, 927 F.2d

at 1197. The Court may not overturn the DOJ’s

decision unless it was “arbitrary, capricious, an abuse

of discretion, or otherwise not in accordance with

law.” 5 U.S.C. § 706(2)(A); see also Moore, 927 F.2d at

1197. “To determine whether an agency decision was

arbitrary and capricious, the reviewing court ‘must

consider whether the decision was based on a con-

sideration of the relevant factors and whether there

has been a clear error of judgment.” N. Buckhead

Civic Ass’n v. Skinner, 903 F.2d 1533, 1538 (11th

Cir.1990) (quoting Marsh v. Or. Natural Res. Council,

490 U.S. 360, 378, 109 S.Ct. 1851, 104 L.Ed.2d 377

(1989)).

The DOJ based its denial of Plaintiffs request for

testimony from Special Agents Currier and Longa

upon careful and thorough consideration of its law

enforcement interests and Plaintiffs need for the

16a

testimony. As noted above, the DOJ’s Touhy regulations

prohibit the disclosure of information that “would

interfere with enforcement proceedings or disclose

investigative techniques and procedures the effective-

ness of which would thereby be impaired[.]” 28 C.F.R.

§ 16.26(b)(5). Where a disclosure would result in such

harm, the DOJ cannot authorize such disclosure

unless it determines that “the administration of jus-

tice requires disclosure.” Jd. § 16.26(c).

Applying the foregoing standard, the DOJ concluded

that authorizing the testimony of Special Agents

Currier and Longa would disclose certain investiga-

tory procedures and techniques, thereby impairing

their effectiveness in other investigations. Regardless

of how it is characterized in the Motion to Compel,

the testimony Plaintiff seeks to elicit from the Special

Agents concerns the methods the FBI used in its

search for Vladimir Montesinos. Essentially, Plaintiff

seeks to elicit testimony that the Special Agents

sought permission from the Peruvian government to

convey an offer of reward to Plaintiff, that the Agents

received such permission, that the Agents conveyed

Peru’s reward offer to Plaintiff, and that Plaintiff

provided the information that led to Montesinos’

capture.’ Indeed, in the relevancy statement he sub-

mitted to DOJ in support of his trial subpoenas,

Plaintiff noted that Special Agent Currier would

testify about his formulation of a plan for the capture

2 Presumably, the testimony Plaintiff seeks to elicit from the

two Special Agents mirrors the substance of the “Declaration of

Kevin Currier” attached to the Motion to Compel. That Declara-

tion and the disclosures made therein were not authorized by

the DOJ and do not constitute an official statement of the FBI

or a waiver of the rights and privileges asserted by the DOJ

herein.

17a

of Montesinos, his meeting and discussions with

Peruvian officials for that purpose, and his com-

munications with other FBI agents about the case.

Such testimony would reveal in open court exactly

how the FBI conducted its investigation and search

for Montesinos. That is precisely the kind of disclosure

the DOJ’s Touhy regulations prohibit absent a finding

that “the administration of justice requires disclo-

sure.” Id. § 16.26(c).

The term “administration of justice” refers to the

government’s role in ‘“administlering]” its law

enforcement duties through, for example, “pursul[it]

[of] a civil or criminal prosecution or affirmative

relief, such as an injunction.” 28 C.F.R. 16.26(c).

Assisting Plaintiffs efforts to collect on a foreign

government's offer of a reward for the capture of a

fugitive does not fit within any understanding of

DOJ’s duties to administer justice, or anything

“require(d]” by those duties. The DOJ, therefore,

concluded that disclosure was not required for the

administration of justice and denied Plaintiffs

requests for the Special Agents’ testimoiiy at trial.

Il. Special Agent Currier is located More 100 Miles

Outside of the Court’s Jurisdiction

In addition to the reasons set forth above, the

Court should decline to compel the testimony of Spe-

cial Agent Currier at trial because, as Plaintiff

concedes in his Motion, Agent Currier is located in

Caracas, Venezuela—more than 100 miles outside

of the Southern District of Florida—and, therefore

outside the Court’s jurisdiction to compel his atten-

dance at trial. See Rule 45, Federal Rules of Civil

Procedure.

18a

CONCLUSION

For all of the foregoing reasons, Plaintiffs Motion

to Compel the requested testimony should be denied.

Dated: August 15, 2008

Respectfully Submitted,

R. ALEXANDER ACOSTA

United States Attorney

By

/s/ Carlos J. Raurell

Carlos J. Raurell

Assistant United States Attorney

Florida Bar No. 529893

99 Northeast 4th Street

Miami, Florida 33132

Telephone: (305) 961-9243

Fax: (305) 530-7139

i-Mail: carlos.raurell@usdoj.gov

Counsel for the Department of Justice,

Federal Bureau of Investigation

19a

CERTIFICATE OF SERVICE

| hereby certify that on August 15, 2008, I

electronically filed the foregoing document with the

Clerk of the Court using CM/ECF. I also certify that

the foregoing document is being served this day on all

counsel of record via transmission of Notices of

Electronic Filing generated by CM/ECF or in some

other authorized manner for those counsel or parties

who are not authorized to receive electronically

Notices of Electronic Filing.

/s/) CARLOS RAURELL

CARLOS RAURELL

Assistant United States Attorney

20a

APPENDIX C

IN THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT

No. 08-17213

JOSE GUEVARA,

Plaintiff-Appellee

Cross-Appellant,

LUIS ALFREDO PERCOVICH,

Intervenor-Appellant,

Vv

REPUBLICA DEL PERU and

MINISTERIO DEL INTERIOR DEL PERU,

Defendants-Appellee:

Cross-Appellants

ON APPEAL FROM TH UNITED STATES

DISTRICT COURT FOR THE SOUTHERN

DISTRICT OF FLORIDA

BRIEF FOR THE UNITED STATES

AS AMICUS CURIAE IN SUPPORT OF

REPUBLICA DEL PERU

Zla

HAROLD HONGJU KOH TONY WEST

Legal Adviser Assistant Attorney General

U.S. Department of State JEFFREY H. SLOMAN

2201 © Street N.W. Acting United States

Washington, D.C. 20520 A "6 7

ttorney

DOUGLAS N. LETTER

(202) 514-3602

NICHOLAS BAGLEY

(202) 514-2498

Attorneys, Appellate Staff

Civil Diviston, Room 7226

U.S. Department of Justice

950 Pennsylvania Ave. N.W.

Washington, D.C. 20530

22a

CERTIFICATE OF INTERESTED PERSONS

Pursuant to Eleventh Circuit Rule 26.1-1, the

undersigned counsel certifies that, to the best of his

knowledge, the following persons, in addition to those

listed in appellant’s and appellee’s opening briefs, are

the only ones who may have an interest in the outcome

of this case:

Nicholas Bagley, Attorney, U.S. Department of

Justice;

Harold Hongju Koh, Legal Adviser, U.S. Depart-

ment of State;

Douglas N. Letter, Attorney, U.S. Department of

Justice;

Jeffrey H. Sloman, Acting United States Attorney;

Tony West, Assistant Attorney General, US.

Department of Justice.

/s/ NICHOLAS BAGLEY

23a

TABLE OF CONTENTS

Page

CERTIFICATE OF INTERESTED PERSONS

STATEMENT REGARDING ORAL ARGUMENT

INTEREST OF THE UNITED STATEG............. 1

STATEMENT OF THE CASE. ..........0.00.000000000... 6

BR. FACCUAE TRACE OUING, oo. 5 o.o sc aiiescccsevavcscendocssces 6

Il. Judicial Proceedings in the United

RRS AIRE Mp oe Ties eae Re AOR SAE AE ETA AN ae A

SUMMARY OF ARGUMENT. ........0.000000000ccce. 12

PR IE aoc Vaecietnes bik aci ba ccasanssrsuewstanksaon eos 14

I. International Comity and the Act of State

Doctrine Require Reversal of the District

Court’s Judgment Against Peru................. 14

Pe. SUOTUMTIONIA! COOMBE. 00.5 cicccccsccssccceseecss 15

Be. Act OF Siete Dactrine onic. oo ceccciecccesceseses 26

iy NN gos yaa rea ey enaeatonaiaeesoe is 30

II. This Court Need Not Resolve Whether

Peru’s Reward Offer Had a Sufficient

Commercial Nexus to the United States. ... 32

SRI Aiud uco peicubeisttavsincgomcnasinusstseee cunt 35

CERTIFICATE OF SERVICE

CERTIFICATE OF COMPLIANCE

24a

TABLE OF AUTHORITIES

Cases: Page

Banco Nacional de Cuba v. Sabbatino, 376

U.S. SOS (1BGG) iscscisccursdcnrcneeeeeee 12, 26, 31

Chalabi v. Hashemite Kingdom of Jordan,

543 F.3d 725 (D.C. Cir. 2008).................. 33, 34

Dean Witter Reynolds, Inc. v. Fernandez,

741 F.2d 355 (11th Cir. 1984) ................. 30, 31

F. Hoffmann-La Roche Ltd. v. Empagran

S.A., 542 U.S. 166 @0G@) .........50ee 15

Fortino v. Quasar Co., 950 F.2d 389 (7th

Civ. 1GGL) s occcsicssvescavesxeesnnsnneicde eee 31

Glen v. Club Mediterranee, S.A., 450 F.3d

1251 (Lith Cir. SOG) 0. :.scossesaeenne ee 28

Granberry v. Greer, 481 U.S. 129 (1987)..... 32

Guevara v. Republica del Peru, 468 F.3d

1289 (llth Cir. 2OQ@) ....ssisavecckeseueeeee 6, 10

Harris v. United States, 149 F.3d 1304

(Lith Cir. 1996) .....0.ci<c..<sesesaasae ee 32

Hartford Fire Ins. Co. v. California, 509

U.S. F646. (2GGS) ovnciccsscsnnskcpesernoeaneeeeee 15

Hilton v. Guyot, 159 U.S. 113 (1895)........... 15, 26

Honduras Aircraft Registry, Ltd. v. Hon-

duras, 129 F.3d 543 (11th Cir. 1997)..... 28

Horowitz v. United States, 267 U.S. 458

(BDZ) nc iedcanvssieasevacwnnnntayegls tinea eee 29

International Association of Machinists v.

OPEC, 649 F.2d 1354 (9th Cir. 1981)..... 28

Pravin Banker Associates, Ltd. v. Banco

Popular Del Peru, 109 F.3d 850 (2d Cir.

ROT } 5 ssse<o10000s00nceevweneiyeeeeeeeeaaeena 31

20a

Republic of Argentina v. Weltover, Inc., 504

BP ee WE ChB ssc cceesssasisscecscvasesnconee 29

Society of Lloyd’s v. Siemon-Netto, 457

Pie 94.10. Civ, OCB) caccivcvicccsecesssccsecens 29

Steel Co. v. Citizens for a Better Environ-

ment, 523 U.S. 83 (1998).............ccecceeeeees 33

Tenet v. Doe, 544 U.S. 1 (2005) .....0. ee. 22, 34

Uriderhill v. Hernandez, 168 U.S. 250

EMME Pens ackiassssesssectuiseonsennecacsanelgavonsaraene 28

Ungaro-Benages v. Dresdner Bank AG, 379

F.3d 1227 (11th Cir. 2004). ........00.0.... 16, 19, 20

Victrix S.S. Co., S.A. v. Salen Dry Cargo

A.B., 825 F.2d 709 (2d Cir.1987). ........... 16

W.S. Kirkpatrick & Co., Inc. v. Environ-

mental Tectonics Corp., Int'l, 493 U.S

MOE © BP iis os cecseessxxcipaiuisnnsaxansenccasslien 26, 28

Statutes:

RE AO Mats DB DO Be ossvninsinccnseessenadensvansxeeonsasenesSeen 22

BP 8S 9AS. S UDTD . ncescccscccssescecasesnssseesostenvatees 23

22 U.S.C. 5 EU ee nsecnixpneriystxanavsaiaecienene ee 22, 2a

Be GP APN. © OF 1. seen conscwerssnesensnsesinncscentvedeceionee 1

Be U.S.C. § GOA... ..cccccscosccvevsssseessencseeseserens 10

BO U.S.C. 9 1608.20.00... csccccccccssccenssnccessseesenes 10, 33

Rules:

POG. H. ADD. P. ZH) o50.:.0sc0csssrseecseeseaseecconevs 1

Other Authorities:

Clifford Krauss, Former Spy Chief of Peru

Captured in Venezuela Lair, N.Y. Times,

June 25, ZOO] . .0....... cece scececcececececececscecs |

26a

STATEMENT REGARDING ORAL ARGUMENT

Because the panel already heard oral argument

from the parties on January 13, 2010, the United

States does not request oral argument. Should the

Court schedule a second oral argument in the case,

the United States believes that its participation

would be useful to the Court and would request ten

minutes of argument time.

27a

IN THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCU-T

JOSE GUEVARA,

Plaintiff-Appellee-

Cross-Appellant,

LUIS ALFREDO PERCOVICH,

Intervenor-Appellant,

V.

REPUBLICA DEL PERU and

MINISTERIO DEL INTERIOR DEL PERU,

Defendants-Appellees-

Cross-Appellants.

ON APPEAL FROM THE UNITED STATES

DISTRICT COURT FOR THE SOUTHERN

DISTRICT OF FLORIDA

BRIEF FOR THE UNITED STATES

AS AMICUS CURIAE IN

SUPPORT OF PERU

INTEREST OF THE UNITED STATES

Pursuant to 28 U.S.C. § 517 and Fed. R. App. P.

29(a), the United States files this amicus curiae brief

in order to urge the Court to reverse the district

court’s judgment against the Republic of Peru under

either international comity principles or the act of

state doctrine. These justiciability doctrines are fully

applicable here and foreclosed the district court from

28a

issuing an $8.2 million judgment against Peru that

overrode the decisions of high-level Peruvian govern-

ment officials made in connection with the apprehen-

sion of a corrupt former Peruvian intelligence chief

who had been hiding in Venezuela.

The district court’s substantial judgment against

Peru would, if affirmed, become a serious irritant in

the United States’ bilateral relationship with that

nation. The judgment represents a serious affront to

Peruvian sovereignty and is precisely the type of

ruling that a United States court should not make

because it hamstrings the Executive Branch’s ability

to carry out its foreign-relations responsibilities.

Reversal under these circumstances is entirely con-

sistent with precedent from the Supreme Court, this

Court, and its sister Circuits applying the interna-

tional comity and act of state doctrines.

We have taken the highly unusual step of filing an

amicus brief after oral argument because the federal

government has a profound interest in preventing the

district court’s judgment from undermining our

nation’s relationship with a stable democratic partner

in South America. Moreover, the United States

operates its own highly successful international

reward programs, and the judgment here ruises the

troubling specter of foreign courts overriding decisions

made by U.S. law enforcement and diplomatic officials.

As discussed below, this case arose because the

President of Peru issued a formal executive decree

offering a $5 million reward for information leading

directly to the capture of Viladimiro Lenin Montesinos

Torres, the former head of Peru’s intelligence agency.

The Peruvian President established a Special Com-

mittee of high-ranking officials within the Peruvian

Interior Ministry to implement this reward program.

29a

The committee was vested with exclusive authority to

issue the reward, and provision was made for the

committee to operate confidentially. In addition, the

committee was empowered by the Peruvian President

to make determinations concerning competing claims

to the reward, and to decide how the available funds

should be divided if more than one claimant qualified

for compensation.

Plaintiff-appellee Jose Guevara was a Venezuelan

intelligence official who offered information relating

to Montesinos’ whereabouts while in the temporary

custody of the FBI as part of a federal criminal

investigation of his conduct. Guevara provided this

information while in the United States on a short

trip. Not long after, he filed a claim in Peru for the $5

million reward.

The Peruvian Special Committee rejected Guevara’s

claim, reasoning that Venezuelan authorities had

taken Montesinos into custody and that no evidence

connected Guevara’s information with those authori-

ties. Guevara is now pursuing his claim against Peru

in a United States court.

Notwithstanding the Peruvian government’s

authoritative resolution of Guevara’s claims, the

district court here ruled that the Special Committee’s

determination was incorrect and that Peru must

therefore pay Guevara the entire $5 million reward,

plus $3.2 million in interest. This ruling sets aside

two Peruvian government decisions: (1) the conferral

of exclusive authority on the Special Committee to

administer the reward program; and (2) that commit-

tee’s ultimate conclusion that Guevara had not

demonstrated his entitlement to the reward.

30a

The adjudication in a United States court of the

validity of a sovereign determination by a foreign

administrative tribunal is precisely what the interna-

tional comity and act of state doctrines are meant to

avoid. And, as alluded to already, the district court’s

judgment exposes actions taken by the United States

in implementing parallel reward programs to reversal

by foreign courts. This type of foreign court ruling

would be especially problematic because U.S. officials

make reward decisions on the basis 0. competing con-

siderations such as the nature, quality, and accuracy

of the information provided; how that information

ties in with confidential information that the United

States already had; the degree to which the information

actually assisted the government; the need to protect

sensitive sources and methods; the effect of payment

on our national! security interests; and whether non-

payment would undermine the effectiveness of the

program. Foreign judicial pronouncements on govern-

mental decisions made by U.S. officials concerning

these factors would obviously be inappropriate and

unwelcome.

Thus, drawing either on principles of international

comity or on the act of state doctrine, this Court

should reverse the judgment against Peru. This Court

should do so as an exercise of its discretion, whether

or not Peru presented these arguments adequately to

the district court. Full and proper application of these

principles is of immense importance to the interests

of the United States, and those interests should

override any procedural problems created by Peru’s

litigation strategy.

STATEMENT OF THE CASE

In this brief, except where otherwise expressly

noted, the United States takes the description of the

3la

facts purely from Guevara’s complaint, this Court’s

opinion in Guevara v. Republica del Peru, 468 F.3d

1289 (11th Cir. 2006), and the uncontested facts

described in the district court record.

I. Factual Background.

During the 1990s, Vladimiro Lenin Montesinos

Torres served as an adviser to Peruvian President

Alberto Fujimori and as the head of Peru’s National

Intelligence System. In that capacity, Montesinos

allegedly committed numerous crimes, including (but

not limited to) bribery, influence peddling, drug traf-

ficking, money laundering, unlawful! arms trafficking,

and murder. He was caught on videotape offering a

bribe to a legislator-elect in September 2000, which led

almost immediately to the collapse of the Fujimori

government.

Montesinos went into hiding and an international

manhunt ensued. In April 2001, the President of Peru

issued an Emergency Decree offering a $5 million

reward to “the person or persons who provide(s) accu-

rate information that will directly enable locating and

capturing” Montesinos. DE 119-2, at 2 (Emergency

Decree).' The decree established a Special High Level

Committee within the Peruvian Ministry of the

Interior “for the purpose of evaluating information

received and deciding on granting the financial

reward.” Id. And “accurate information” was defined

to mean information “provided through any means to

the Special High Level Committee and which enables

locating and capturing” Montesinos. Jd. The four-per-

son committee was made up of the Minister of the

Interior, his immediate subordinate, the Director

' “DE” refers to the docket entry number on the district court

docket.

32a

General of the National Police, and the Director

General of Intelligence for the Interior Ministry. /d.

“In the event several persons provide the said infor-

mation,” the decree provides, “the financial reward

shall be divided among them.” Jd. The Special Com-

mittee was charged with taking “measures for the

protection and safety of the informant”; consistent

with that need for confidentiality, “[aJll information

involving application of this Emergency Decree is

secret.” Id. at 2-3.

In the meantime, Montesinos had secretly taken

refuge in Venezeula. A member of the Venezuelan

intelligence service, plaintiff-appellee Jose Guevara,

provided Montesinos with a safe house and a security

detail. As he ran short on money, Montesinos “sent

Guevara on trips to Lima, Bogota, Miami, and Nassau,

Bahamas, in a desperate search for more money.” DE

333, at 3. On Guevara’s third such trip to Miami in

June 2001 to meet with an employee at a Miami bank

on Montesinos’ behalf, the FBI took Guevara into

custody.

According to Peru, Guevara was “charged with

fraud against the United States and extortion of the

family of a bank official * * * in an effort to access $43

million of Montesinos’ deposits at a Miami bank.”

Appellant’s Br. 3. The FBI told Guevara that the case

in the United States would be dropped if he provided

information concerning Montesinos’ whereabouts. The

FBI agents in Miami consulted over the telephone

with a Peruvian official, who confirmed that a $5

million reward for information leading to Montesinos’

capture was available to Guevara. See DE 230, at 3.

In light of his discussions with the FBI and Peru's

reward program, Guevara decided to cooperate, and

he placed a telephone call to a colleague in Venezuela,

33a

Id. Montesinos was arrested the following day by

Venezuelan authorities. Jd.

Guevara then sought to collect the reward in Peru.

In 2002, the Peruvian government’s Special Committee

agreed to process Guevara’s request for the reward.

Guevara was not the only claimant, however: a

handful of others—including the bank employee with

whom Guevara met in Miami—also submitted claims.

In 2005, the Special Committee notified Guevara

that his request for the reward had been denied. DE

201-9. The Peruvian government did not in its notice

provide an explanation for its decision; Peru instead

informed Guevara that, pursuant to the terms of the

Emergency Decree, that information was considered

confidential. Guevara was nevertheless invited “to

read the Resolution related to your request” at a

Peruvian ministry office. Jd. In a declaration submit-

ted to the district court, a former Peruvian Minister

of the Interior and member of the Special Committee

explained that Guevara’s reward claim had been

rejected because “the acts of the Venezuelan military

were an intervening event that broke the chain

of causation” between Guevara’s assistance and

Montesinos’ capture. Costa Decl., DE 326-4 416; see

also Rospigliosi Dep., DE 201-3, at 21.

Il. Judicial Proceedings in the United States.

In 2004, Guevara filed a breach-of-contract action

in a Florida state court against Peru to recover the $5

million reward. The case was removed to the United

States District Court for the Southern District of

Florida, which concluded that Peru was immune from

suit under the Foreign Sovereign Immunities Act

(FSIA), 28 U.S.C. §§ 1604, 1605. In the district court’s

view, offering a reward for the capture of a criminal

34a

was a sovereign, and not a commercial, act. (Shortly

before the district court issued its decision, the

Venezuelan Supreme Court of Justice had rejected a

separate claimant’s suit effort to sue Peru for the

reward in Venezuela on the similar ground that the

Peruvian President’s issuance of the Emergency

Decree was a sovereign act not subject to challenge in

Venezuelan courts. See Decision of February 17, 2004

(available at http://www.tsj.gov.ve/decisiones/jspa/

Febrero/03-1314.htm)).

This Court reversed in November 2006. Guevara uv.

Republica del Peru, 468 F.3d 1289 (11th Cir. 2006).

The Court found that Peru’s reward offer was a

unilateral offer to enter into a contractual relation-

ship. And under the FSIA, this Court held, a contract

for the provision of information is a commercial con-

tract and is not inherently sovereign. The case was

therefore remanded for further proceedings.

On remand, the district court granted summary

judgment against Peru. In the court’s view, the Spe-

cial Committee’s 2002 resolution indicating that

Guevara’s claim had been accepted for consideration

established that Guevara had, in fact, provided

information that led directly to Montesinos’ capture.

DE 230, at 6-7. The court rejected Peru’s argument

that the capture of Montesinos by Venezuelan

authorities, and not by Peruvian authorities, raised

an issue of fact as to whether Guevara's provision of

information had led directly to Montesinos’ arrest.

“In the absence of evidence to the contrary, it appears

that Venezuela learned of Montesinos’s location from

Guevara and would have been unable to capture him

had Guevara not cooperated.” Jd. at 8. The court also

rejected Peru’s evidence regarding the Special Com-

mittee’s deliberations, and it closed its analysis by

criticizing the secrecy of the proceedings, discounting

for that reason the significance of Peru’s formal letter

rejecting Guevara's claim. /d. at 9-10.

The district court subsequently entered final

judgment against Peru. Under that judgment, the

court ordered Peru to pay Guevara the entirety of the

$5 million reward, plus more than $3.2 million in

prejudgment interest. DE 346. Peru appealed. DE

349. In its opening appellate brief to this Court, Peru

argues, among other things, that international

comity and the act of state doctrine should have

prevented the district court from entering a judgment

against Peru contradicting the decision by the

Peruvian government that Guevara was not entitled

to payment of the reward. Appellant’s Br. 40-42.

SUMMARY OF ARGUMENT

In practical effect, Jose Guevara’s lawsuit ayainst

the Peruvian government in the United States is both

a collateral attack in another nation’s courts on the

Special Committee’s decision that he was not entitled

to the reward and a challenge to the authority of the

Peruvian President to delegate to the Special Com-

mittee the exclusive authority to administer the

reward program. Not only would the district court's

order requiring the Peruvian government to pay the

reward violate the act of state doctrine, which the

Supreme Court has held to have “constitutional

underpinnings.” Banco Nacional de Cuba v. Sabbatino,

376 U.S. 398, 423 (1964). It would also, if affirmed,

introduce considerable friction into the United States’

bilateral relationship with Peru. To protect the

prerogatives of the Executive Branch in its conduct of

foreign affairs, both the act of state doctrine and

principles of international comity generally preclude

U.S. courts from reviewing and overriding the

36a

sovereign decisions of foreign states and foreign

tribunals. Particularly because this judgment against

Peru presents two serious foreign-relations dilemmas

for the United States, the doctrines are fully

applicable here.

First, the district court’s entry of a multi-million

djudgment against Peru would, if affirmed, become

an irritant in the United States’ relationship with

that country. Peru justifiably believes that the district

court overstepped its authority when it overrode the

authoritative decision of the Special Committee

denying Guevara’s claim for the reward. Second, the

United States itself administers several reward pro-

grams for the capture of international fugitives. To

preserve the ability of U.S. officials to make delicate

and context-sensitive judgments about whether an

individual is or is not entitled to a reward, decisions

made pursuant to those reward programs are gener-

ally not subject to judicial review even in domestic

courts. Yet the district court’s judgment stands as an

invitation to foreign courts to accept jurisdiction over

litigation challenging decisions by U.S. officials con-

cerning reward claims. The threat of oversight by

foreign courts would not only seriously hamper the

administration of these important reward programs;

it would also present the risk that foreign courts will

demand the release of confidential information

relating to ongoing law enforcement investigations—

or even order the U.S. to disclose classified information.

The United States therefore urges this Court to

reverse the judgment against Peru on the ground

that it accords neither with international comity nor

with the act of state doctrine. We recognize that Peru

has argued in the alternative that its commercial

activity lacked a sufficient nexus to the United States

37a

to fall within the commercial activity exception.

Because resolving the nexus argument in this very

unusual case could have far-reaching implications for

future litigation, we ask the Court to reverse the

judgment on international comity and act of state

grounds, which themselves render the suit non-

justiciable.

ARGUMENT

I. International Comity and the Act of State

Doctrine Require Reversal of the District Court’s

Judgment Against Peru.

As explained above, a high-level committee within

the Peruvian government vested with the exclusive

authority to administer a $5 million reward for

information leading directly to Mcntesinos’ capture

considered and rejected Guevara’s claim for that

reward. In nonetheless ordering Peru to pay Guevara

the entirety of the $5 million reward, plus millions in

interest, the district court contradicted the deter-

mination of a foreign tribunal and arrogated to itself

authority that the President of Peru had delegated to

that tribunal. As we explain below, principles of

international comity demanded that the district court

abstain from overriding the decision of the Special

Committee to reject Guevara’s claim for the reward.

And the act of state doctrine prohibited the district

court from invalidating the Peruvian President’s

establishment of an exclusive mechanism for admi-

nistering the reward.

A. International Comity.

“International comity”"—“the recognition which one

nation allows within its territory to the legislative,

executive or judicial acts of another nation,” Hilton v.

Guyot, 159 U.S. 113, 164 (1895)—has two forms. Pre-

38a

scriptive comity (also called the “comity of nations”) is

a doctrine under which courts construe “ambiguous

statutes to avoid unreasonable interference with the

sovereign authority of other nations.” F. Hoffmann-

La Roche Ltd. v. Empagran S.A., 542 U.S. 155, 164

(2004). The second form—at issue in this case—is the

“comity of courts, whereby judges decline to exercise

jurisdiction over matters more appropriately adjudged

elsewhere.” Hartford Fire Ins. Co. v. California, 509

U.S. 764, 817 (1993) (Scalia, J., dissenting). Although

the comity of courts is an abstention doctrine that is

typically invoked when a U.S. court declines to

exercise jurisdiction in deference to parallel judicial

proceedings in a foreign state, see Victrix S.S. Co.,

S.A. v. Salen Dry Cargo A.B., 825 F.2d 709, 713-14

(2d Cir.1987), it applies equally in cases involving the

decisions of foreign administrative tribunals. See

Ungaro-Benages v. Dresdner Bank AG, 379 F.3d 1227,

1237-40 (11th Cir. 2004) (finding that international

comity required dismissal of domestic claims in

deference to the compensation determinations of a

foreign administrative tribunal).

In deciding whether to defer on comity grounds to

the decision of a foreign tribunal, this Court weighs

at least four factors: “(1) whether the foreign court

was competent and used ‘proceedings consistent with

civilized jurisprudence, (2) whether the judgment

was rendered by fraud, * * * (3) whether the foreign

judgment was prejudicial because it violated Ameri-

can public policy notions of what is decent and just’;

and (4) “whether the central issue in dispute is a

matter of foreign law and whether there is a prospect

of conflicting judgments.” Jd. at 1238. The strength of

the United States’ interests and the interests of the

foreign state are also important to the analysis. Id. at

1239.

39a

These factors compel application of the comity

doctrine to preclude review in U.S. courts of Peru’s

determination that Guevara was not entitled to the

reward. DE 201-9. Of greatest significance, the

district court’s judgment not only “creates a prospect

of conflicting judgments,” but actually does conflict

with the Specia! Committee’s decision. The conflict is

particularly striking because the central issue in

dispute in this case is whether Guevara satisfied the

terms of the Peruvian reward program.

The potential for conflict runs much deeper than

the district court’s decision merely to overturn a

single decision of the Special Committee. The Peru-

vian President’s Emergency Decree caps the total

reward amount at $5 million. In the event that more

than one person provided information leading to

Montesinos’ arrest, the Special Committee was charged

with “divid[ing] among” those persons the $5 million

sum. DE119-2, at 2. The district court’s $8.2 million

judgment against Peru, however, not only exceeds

that $5 million cap. More significantly, it means

that other courts—both in the United States and

elsewhere—could enter another judgment awarding

the same $5 million. That resu!t would thwart the

Peruvian government’s effort to cup the total amount

it disbursed in connection with the Emergency Decree,

and to provide for appropriate divisions where

necessary.

The Special Committee’s determination is precisely

the sort of decision by a foreign governmental body to

which U.S. courts owe deference. its competence is

beyond dispute: the Special Committee comprised four

high-level Peruvian officials from law enforcement

and the Ministry of the Interior, including the

Minister himself. DE 119-2, at 2. Their accumulated

40a

expertise in law enforcement and intelligence put

them in a very strong position to ascertain whether

certain information did or did not lead directly to

Montesinos’ capture. And so far as the evidence in

the record shows, the Special Committee was fully

authorized under Peruvian law to make this

determination and its conclusion lay within its lawful

discretion.

In the district court, Peru submitted a declaration

from a former Peruvian Minister of the Interior who

served on the Special Committee from 2001 to 2003.

That declaration described the Committee’s delibera-

tions, its collection of information, its consideration

of testimony, and its repeated requests for more

information from the FBI and Guevara’s counsel

about Guevara’s assistance. See Second Decl. of G.

Costa Santolalla, DE 326-4. This former minister

stated without contradiction that Guevara’s reward

claim was rejected because the available evidence did

not support the conclusion that Guevara provided the

information leading directly to Montesinos’ capture.

Id. J 16. Instead, “the Special Committee concluded

that the acts of the Venezuelan military were an

intervening event that broke the chain of causation

between Mr. Guevara’s telephone call * * * and the

arrest of Montesinos.” Costa Decl., DE 326-4, J 16.

The Minister’s declaration was corroborated by a

deposition from another former Peruvian Minister of

the Interior who served on the Committee from 2001

to 2002 and from 2003 to 2004. Depo. of Fernando

Rospigliosi, DE 201-3, at 21.

Nothing in the record suggests that the Committee’s

determination was tainted by fraud or otherwise

violated United States public policy. Indeed, it would

be perfectly consistent with U.S. policy to deny a

4la

reward ciaim in a case in which insufficient evidence

connected the information to the eventual arrest, a

third party’s intervention made the proffer of

information irrelevant, or a claimant failed to satisfy

the terms of the reward offer. Just as decisions based

on such factors by U.S. officials are not amenable to

challenge in foreign tribunals, so too should Peru’s

determination be insulated from collateral attack in

U.S. courts.

Deference to the Special Committee’s decision is all

the more appropriate given that the district court’s

invalidation of that decision, if affirmed by this

Court, could adversely affect the United States’ rela-

tionship with Peru. That is particularly true here

because the target of the $5 million reward was not

some common criminal. The Montesinos affair was an

international cause célébre. Montesinos was an

infamous former high-level official accused of (and in

some cases convicted of) “crimes against government

administration, public corruption, embezzlement,

crimes against persons, aggravated murder, national

security and other[ crimes].” DE 119-2, at 2. His

arrest was the precipitating event in the collapse of

the Fujimori presidency, and both Montesinos and

Fujimori have since been convicted in Peruvian

courts of serious abuses of power. See id. (stating in

the Emergency Decree that various officials commit-

ted illegal acts between 1990 and 2000, and that

Montesinos “stands out among said officials” because

of his “involve[ment] in serious crimes which affect

the security of the State and society overall”).

Even the circumstances of Montesinos’ capture

were a source of foreign-relations controversy. Although

President Hugo Chavez and other Venezuelan

officials claimed that Venezuela was single-handedly

42a

responsible for Montesinos’ arrest, many Peruvians

suspected that Venezuelan authorities had knowingly

harbored him. See Clifford Krauss, Former Spy Chief

of Peru Captured in Venezuela Lair, N.Y. Times, June

25, 2001. That the Special Committee’s decision arose

against the backdrop of a sensitive regional political

controversy provides a particularly compelling reason

to defer to Peru’s handling of the reward question.

Given the delicacy of the issue, the Special Commit-

tee was entitled to do its work without second-

guessing from courts in other countries, including the

United States.

Further, and contrary to the district court’s view,

DE 230, at 9-10, the fact that the Special Com-

mittee’s reasoning was confidential provides no

reason to question its conclusions. As the Emergency

Decree makes clear, the evidence presented to the

Committee, its deliberations, and its reasoning were

to be kept secret in order to protect the safety of

claimants. See DE 119-2, at 2-3 (directing the Special

Committee to adopt specific measures “for the

protection and safety of the informant,” authorizing

claimants to use pseudonyms, and requiring “[a]ll

information involving application of this Emergency”

to be kept “secret”). Despite these valid concerns, the

Special Committee expressly invited Guevara to

review the record of its decision within a Peruvian

ministry. DE 201-9.

In any event, the Peruvian government’s interest

in preserving the confidentiality of proceedings

touching on sensitive law enforcement functions

mirrors the United States’ own interest in protecting

informant confidentiality and preserving the secrecy

of classified information. See 5 U.S.C. § 552(b)(1), (7)

(protecting classified information and certain “records

43a

or information compiled for law enforcement purposes”

from disclosure under the Freedom of Information

Act); cf. Tenet v. Doe, 544 U.S. 1, 8 (2005) (holding

that “[p]ublic policy forbids the maintenance of any

suit in a court of justice, the trial of which would

inevitably lead to the disclosure of ti.atters which the

law itself regards as confidential” (internal quotation

and emphasis omitted)).

Over and above these concerns, the United States

has a substantial interest in forestalling reciprocal

litigation in foreign tribunals that would interfere

with the administration of U.S. reward programs.

The State Department, for example, administers

three rewards programs that target some of the most

dangerous classes of international fugitives: Rewards

for Justice, the Narcotics Rewards Program, and

Rewards for Information Concerning Individuals

Sought for Serious Violations of International Huma-

nitarian Law Relating to the Former Yugoslavia or

Rwanda. See 22 U.S.C. § 2708.

These three programs fund payments for informa-

tion leading to the arrest of international terrorists,

narco-traffickers, and war criminals, respectively.

Under the auspices of the reward programs, the

Secretary of State determines, with input from the

Interagency Rewards Committee (a group composed

of Executive Branch officials), whether to pay a

reward and, if so, the amount to be paid. The

Department of Defense administers a similar reward

program for persons providing “information § or

nonlethal assistance” in aid of an operation against

international terrorism. 10 U.S.C. § 127b(a).

Under all of these U.S. reward programs, a decision

to grant or deny a reward is by law “final and

conclusive and is not subject to judicial review.” 22

44a

U.S.C. § 2708(j); 10 U.S.C.§ 127b(g). This policy makes

eminent sense. The federal officials who administer

these reward programs must balance a range of

competing considerations in deciding whether to

grant or deny an individual’s claim. As noted earlier,

those considerations include the nature and quality

of the information provided, the accuracy of the

information, whether the individual providing the

information is eligible for payment under the terms

of the relevant statute or regulation, whether the

same or comparable information was obtained from

other sources, the degree to which that information

actually led to the apprehension of a suspect, the

need to protect sensitive sources and methods, whether

payment is consistent with national security, and

whether nonpayment would undermine the effective-

ness of the rewards program. Major and obvious

problems would arise if these U.S. reward program

decisions were subject to invalidation in foreign courts.

Yet the district court’s judgment here seriously

threatens to expose decisions that Congress insulated

from review in domestic courts to adjudication in

foreign tribunals. The risks of such reciprocal litiga-

tion are manifold. Foreign courts cannot be counted

upon to be sensitive to the wide range of concerns

that U.S. officials must take into account in deciding

whether or not to grant a reward. And federal

officials would likely feel constrained in the exercise

of their duties if their decisions were subject to later

judicial review in a foreign state. In addition, in

attempting to decide whether the terms of a reward

program were satisfied, foreign courts might well

order intrusive discovery into what precisely a

confidential informant told law enforcement officials

and how that information did (or did not) satisfy the

terms of the reward program. And courts in other

45a

countries may be unsympathetic to U.S. efforts to

invoke the law enforcement privilege or to resist the

disclosure of classified information.

As if to illustrate the point, the district court in this

very case was asked by both parties to compel the

FBI to disclose extraordinarily sensitive law enforce-

ment information. See, e.g., DE 289 (providing the

FBI’s response to Peru’s motion to compel discovery).

Foreign courts would certainly be presented with

precisely the same sorts of requests. Furthermore, the

district court rested its decision to grant judgment

against Peru in part on the absence of evidence in the

record to rebut the inference that Guevara provided

information leading to Montesinos’ arrest. See DE

230, at 8 (stating that, “[i]Jn the absence of evidence to

the contrary, it appears that Venezuela learned

of Montesinos’s location from Guevara and would

have been unable to capture him had Guevara not

cooperated”). That line of reasoning suggests that a

domestic law enforcement agency’s resistance to

discovery demands could justify a foreign court’s

decision to overrule a U.S. determination that a

particular claimant is not entitled to a reward.

For all of these reasons, international comity prec-

luded the district court from undertaking a review of

the factual and legal determinations of the Special

Committee. See Hilton, 159 U.S. at 202-03 (holding

that where “comity of this nation” calls for recognition

of a judgment rendered abroad, “the merits of the

case should not * * * be tried afresh”).

B. Act of State Doctrine.

For many of the same reasons, the district court’s

judgment against Peru violates a related but separate

doctrine—the act of state doctrine. “[I)n its traditional

46a

formulation,” the act of state doctrine “precludes the

courts of this country from inquiring into the validity

of the public acts of a recognized foreign sovereign

power committed within its own territory.” Banco

Nacional de Cuba v. Sabbatino, 376 U.S. 398, 401

(1964).

The doctrine was “once viewed * * * as an expres-

sion of international law, resting upon the highest

considerations of international comity and expediency,”

W.S. Kirkpatrick & Co., Inc. v. Environmental Tectonics

Corp., Int’l, 493 U.S. 400, 404 (1990) (internal quota-

tion marks omitted), but was described by Justice

Harlan in Sabbatino as a doctrine with “constitu-

tional’ underpinnings,” reflecting “the strong sense of

the Judicial Branch that its engagement in the task

of passing on the validity of foreign acts of state may

hinder” the conduct of foreign affairs, Sabbatino, 376

US. at 423.

In this case, the district court’s judgment granting

Guevara’s claim for the reward invalidated Peru’s

ultimate decision to deny Guevara’s claim. That by

itself violated the act of state doctrine. But the court’s

judgment also invalidated the President of Peru’s

establishment of a specialized tribunal vested with

sole responsibility for determining in confidential

proceedings whether an individual had satisfied the

condition for receiving the reward.

Peru clearly intended the Special Committee's

determinations to be exclusive. The four-person

Committee was established “for the purpose of

evaluating information received and deciding on

granting the financial reward,” and the reward was

due only if information was “provided through any

means to the Special High Level Committee.” DE

119-2, at 2. Per the Emergency Decree, the Special

47a

Committee alone was charged with assessing the

accuracy of the information and with providing pro-

tection to an informant who was in danger because of

his cooperation. Jd. And the Emergency Decree con-

templated that the Special Committee would divide

the total reward among the claimants entitled to it.

Id. at 2-3.

These provisions are in no sense compatible with

having multiple tribunals in different countries

address a claimant’s entitlement to the reward. Thus,

in assuming the authority to dispense the $5 million

reward, the district court invalidated the President of

Peru’s delegation of exclusive decision-making authority

to the Special Committee. The act of state doctrine

serves to protect against precisely that sort of

invalidation. See Underhill v. Hernandez, 168 U.S.

250, 252 (1897) (holding that “the courts of one country

will not sit in judgment on the acts of the government

of another, done within its own territory”). That is

particularly so where, as here, the Peruvian President’s

delegation involved questions relating to the capture

of an infamous former government official and where

the district court’s judgment would, if affirmed,

create diplomatic friction. See Kirkpatrick, 493 U.S.

at 409 (holding that “the policies underlying the act

of state doctrine should be considered in deciding

whether” it should be applied).

The application of the act of state doctrine here is

in no way undermined by this Court’s prior conclu-

sion that the Peruvian reward offer constituted a

commercial contract. The law of this Circuit is that

“there is no commercial exception to the act of state

doctrine.” Honduras Aircraft Registry, Ltd. v.

Honduras, 129 F.3d 543, 550 (11th Cir. 1997); Glen v.

Club Mediterranee, S.A., 450 F.3d 1251, 1254 n.2

48a

(llth Cir. 2006) (same); see also International Asso

ciation of Machinists v. OPEC, 649 F.2d 1354, 1360

(9th Cir. 1981).

Even assuming that a commercial activity exception

existed, the only potential commercial activity at

issue here was Peru’s extension of the reward offer.

The Peruvian President’s distinct decision to delegate

exclusive authority for deciding who is (and is not)

entitled to the reward was non-commercial sovereign

activity. Cf. Horowitz v. United States, 267 U.S. 458,

461 (1925) (distinguishing between the United States’

“public and general acts as a sovereign” and those

acts undertaken in connection with a commercial

contract). Private parties cannot and do not delegate

to specialized committees composed of high-ranking

government officials the power to adjudicate whether

the conditions of a law-enforcement reward offer have

been satisfied. See Republic of Argentina v. Weltover,

Inc., 504 U.S. 607, 614 (1992) (holding that an act is

commercial only if “the particular actions that the

foreign state performs (whatever the motive behind

them) are the type of actions by which a private party

engages in trade and traffic or commerce” (internal

quotation marks omitted)). Under the act of state

doctrine, that sovereign delegation should not be

subject to review in United States courts. Cf. Society

of Lloyd’s v. Siemon-Netto, 457 F.3d 94, 102-103 (D.C.

Cir. 2006) (holding that the act of state doctrine barred

an argument that an English statute unlawfully

delegated authority to Lloyd’s, a private company).

C. Forfeiture.

The parties dispute whether Peru preserved these

justiciability claims in the district court. Whatever

the merits of that dispute, the principle that an

appellate court will not pass on forfeited arguments

49a

is “not a jurisdictional limitation but merely a rule of

practice, and the decision whether to consider an

argument first made on appeal is left primarily to the

discretion of the courts of appeals, to be exercised on

the facts of individual cases.” Dean Witter Reynolds,

Inc. v. Fernandez, 741 F.2d 355, 360 (Lith Cir. 1984)

(internal quotations, footnotes, elision, and correction

omitted).

As we have explained, upholding the judgment

against Peru could have deleterious consequences

both for the United States’ bilateral relationship with

Peru and for the administration of federal reward

programs. Standing alone, those potential conse-

quences are sufficiently serious that this Court should

exercise its discretion to consider the act of state and

international comity arguments. As the Seventh

Circuit has noted in a related context, “federal-state

comity interests can be considered for the first time

on appeal,” and the case for overlooking waiver is

even “stronger” when the arguments presented touch

on “international comity, amity, and commerce.”

Fortino v. Quasar Co., 950 F.2d 389, 391 (7th Cir. 1991).

The United States has a substantial independent

interest in presenting the act of state and interna-

tional comity arguments to this Court, over and

above what Peru may have argued. The two doctrines

“aris{e] out of the basic relationships between

branches of government in a system of separation of

powers,” Sabbatino, 376 U.S. at 423, and exist in part

“to promote cooperation and reciprocity with foreign

lands,” Pravin Banker Associates, Ltd. v. Banco Popu

lar Del Peru, 109 F.3d 850, 854 (2d Cir. 1997). The

Court should consider and address even late-raised

arguments that serve to protect the Executive

50a

Branch’s prerogatives, whether or not a party has

presented them.

Indeed, even if the United States were not partici-

pating, the exceptional nature of this case would

warrant this Court’s review of any forfeited interna-

tional-abstention arguments. The strictly legal issues

presented by the arguments clearly “presen|[t]

significant questions of general impact or of great

public concern.” Dean Witter Reynolds, Inc., 741 F.2d

at 361; cf. Granberry v. Greer, 481 U.S. 129, 134

(1987) (noting that “principles of comity” may be

“better served by addressing the merits forthwith” of

forfeited arguments). This Court should therefore

exercise its discretion to consider the arguments per-

taining to international comity and the act of state

doctrine.

Il. ‘his Court Need Not Resolve Whether Peru’s

Reward Offer Had a Sufficient Commercial

Nexus to the United States.

As an alternative basis for reversal, Peru has

argued that its reward offer bore an insufficient

relationship to the United States, and that its com-

mercial activity therefore fell outside the commercial

activity exception to the immunity otherwise imposed

in the Foreign Sovereign Immunities Act (FSIA).* As

* When this Court previously held that Peru’s extension of the

reward offer amounted to commercial activity, it did not address

(because it was not asked to) whether the activity bore the

requisite connection to the United States. On remand, the dis-

trict court declined to consider the question because it appeared

to believe that this Court’s prior decision “established” the dis-

trict court’s jurisdiction. DE 230, at 10. The nexus argument,

however, implicates this Court’s subject matter jurisdiction and

thus remains viable. See Harris v. United States, 149 F.3d 1304,

1308 (11th Cir. 1998) (holding that “the parties are incapable of

ola

relevant here, the exception provides that a sovereign

is not immune from suit in any case “in which the

action is based * * * upon an act outside the territory

of the United States in connection with a commercial

activity of the foreign state elsewhere and that act

causes a direct effect in the United States.” 28 U.S.C.

§ 1605(a)(2).

The United States takes no position on the highly

fact-bound question whether any act undertaken by

Peru had a “direct effect in the United States” within

the meaning of the FSIA. Nor need the Court resolve

this issue, which, although it arises here in an

unusual factual setting involving a foreign govern-

ment’s law enforcement reward program, could

materially affect the scope of federal court jurisdiction

over quintessentially commercial disputes between

domestic corporations and foreign states. As noted,

the justiciability grounds discussed above—that the

judgment violates principles of international comity

and the act of state doctrine—provide an alternative

and sufficient basis for reversal.

There is no obstacle to addressing international

comity and the act of state doctrine before resolving

whether this Court has subject-matter jurisdiction.

Steel Co. v. Citizens for a Better Environment, 523 U.S.

83, 94-95 (1998), requires a federal court to “prioritize

la] jurisdictional issue only when the existence

of Article III jurisdiction is in doubt.” Chalabi v.

Hashemite Kingdom of Jordan, 543 F.3d 725, 728

(D.C. Cir. 2008). The Supreme Court, however,

“explicitly recognized [in Steel Co.] the propriety of

addressing the merits where doing so made it possi-

conferring upon us a jurisdictional foundation we otherwise lack

simply by waiver or procedural default”).

52a

ble to avoid a doubtful issue of statutory jurisdiction.”

Id. (internal quotation omitted). And although they

are not jurisdictional in nature, the act of state

doctrine and international comity are “threshold

question[s]” designed “to preclude judicial inquiry,”

and as such can properly be addressed before questions

of statutory jurisdiction. Tenet, 544 U.S. at 6 n.4.

CONCLUSION

For the foregoing reasons, the judgment entered by

the district court against the Government of Peru

should be reversed.

Respectfully submitted,

HAROLD HONGJU KOH TONY WEST

Legal Adviser Assistant Attorney General

U.S. Department of State JEFFREY H. SLOMAN

2201 C Street N.W. Acting United States

Washington, D.C. 20520 Att |

‘torney

/s/

DOUGLAS N. LETTER

(202) 514-3602

/s/

NICHOLAS BAGLEY

(202) 514-2498

Attorneys, Appellate Staff

Civil Division, Room 7226

U.S. Depariment of Justice

950 Pennsylvania Ave. N.W.

Washington, D.C. 20530

MARCH 2010

53a

CERTIFICATE OF SERVICE

I hereby certify that on this 3lst day of March,

2010, I caused an original and six copies of the fore-

going brief to be filed with the Court by Federal

Express. On the same date, I also caused an elec-

tronic copy to be filed with the Court, and caused

copies to be served on the following counsel by

Federal Express and email:

Michael Diaz, Jr.

Brant C. Hadaway

Carlos F. Gonzalez

DIAZ, REUS & TARG, LLP

100 Southeast 2nd Street

2600 Bank of America Tower

Miami, Florida 33131

Karen Curtis

CLARKE SILVERGLATE & CAMPBELL, PA

799 Brickell Plaza

Suite 900

Miami, Florida 33131

Mark A. Cymrot

Ambika J. Biggs

Andrene L.K. Smith

BAKER & HOSTETLER LLP

Washington Square, Suite 1100

1050 Connecticut Avenue, N.W.

Washington, D.C. 20036

o. See

NICHOLAS BAGLEY

MARCH 2010

54a

CERTIFICATE OF COMPLIANCE

As required by Fed. R. App. P. 32(a)(5) and (6),

I certify that this brief has been prepared in a fixed-

spaced typeface using Corel WordPerfect 12 in

12-point Book Antiqua font. I further certify that

pursuant to Fed. R. App. P. 32(a)(7)(B) that the

foregoing brief contains 6,479 words, according to the

word count of Corel WordPerfect 12. I certify that the

information on this form is true and correct to the

best of my knowledge and belief formed after a

reasonable inquiry.

/s/

NICHOLAS BAGLEY

MARCH 2010