*1 AB.; Zеneca CONCLUSION Co. for Mais Medical Products; Copco Airpower N.V.; Atlas summarize, reject To we BOC’s chal- Copco AWB, Cmt; Ltd.; Atlas B. lenge authority to the district court’s France; Braun Medical B. Braun Injunction, issue the Asset conclud- Freeze Melsungen A.G.; B. Braun Medical ing personal jurisdiction over the (Malaysia); Industries BHD SDN necessary Bank to issue in- was not KG; Aesculap Aesculap AG Mo Grupo Mexicano junction inap- and that S.A.; Aesculap Surgical tric Instru plicable. We nevertheless vacate the Au- SDN; S.A.; ments Boston Scientific gust May 2011 and the 2012 orders USA; BNP BNP Paribas Paribas Injunction enforcing the Asset Freeze (Suisse) SA; Hong BNP Paribas Subpoena the 2010 that on remand so Kong; Paris; BNP BNP Paribas Par may district court whether it may consider Holdings Limited; jurisdiction ibas UK BNP specific personal exercise over Par Branch; compel compliance the Bank to with these ibas London BNP Paribas and, so, (SUISSE) proper orders if applica- whether SA; Ltd.; Buhler David B. tion principles comity demon- Chalmers, Jr.; Corp.; Chevron Dae jurisdic- may strates that it exercise such Corp.; woo International Daimler- Finally, tion. we the November reverse Chrysler AG; AgroSciences; Dow holding 2012 order the Bank in civil S.A.; Eastman Kodak Ebewe Pharma contempt imposing monetary pen- civil Eli-Lilly M.B.H.; Export S.A.; Ges alties.24 Corp.; Evapco Europe El Paso
S.R.L.; Fiatavio; Corp.; Flowserve B.V.; Pompes; Flowserve Flowserve House; Glaxosmithkline Walls Glax Sae; Egypt osmithkline Glaxo Well Export Ltd.; come Glaxo Wellcome (South Africa) (Pry) Ltd.; SA Smith International; kline Beecham ABG IRAQ, including The REPUBLIC OF as Allgemeine Baumaschinen-Gesells Parens behalf Patriae on of the Citi chaftmbh Dresser International In Iraq, zens of the Plain Italiana, gersoll-Rand Spa.; Thermo tiff-Appellant, Limited; King Ingersoll Ireland v. Benelux, N.V.; Ingersoll-Rand Rand Ltd.; Cilag World Trade AG Interna AG; Automation; ABB ABB ABB tional; Pharmaceutical; KIA Janssen AS; Sanayi Elektric ABB Industrie Motors; Export AG; Liebherr Lie Machines; AC ABB Industrie Cham France, SA; bher Pharma In Serono pagne; Trading Ltd.; ABB Near East ternational; disk; Merial; Novo Nor Solyvent-Ventec; ABB AGCO Den Pauwels; International; Railtech F. S.A.; A/S; mark AGCO Valtra Do Roche; Diagnos Brazil; Hoffman La Roche Liquide Engineering; Air GMBH; France, Organon; tics Haas N.V.; Akzo Rohm and Nobel N.Y. In S.A.; B.V.; S.A.; tervet Astra S.A.A. of International Secalt Siemens deny pending 24. We court We it to the as moot the Bank’s mo- decisions. leave distriсt supplement tions to record or alternative- up court to take matters on remand. these ly judicial to take of certain notice Chinese *2 Sanayi Ticaret France; Ve Siemens Turkey; Middle East Osram
A.S. of Europe;
FZE; St. Turbines Solar GMBH; Export Sulzer Medical
Jude Ltd.; Engineering Works
Burckhardt GMBH; Pumpen Deutschland
Sulzer Textron, Inc.; Ltd.; Un Turbo
Sulzer formerly S.A.S., Pump known as
ion Pumps S.A.S.;
David Brown Guinard Transmissions
David Brown SAS; S.A.; Renault Trucks
France Agriculture In & Sonalika
Renault V.I.;
ternational; Renault Volvo Con Equipment AB, a successor
struction
company Construction Volvo International;
Equipment The Weir Jr.; Wyatt, Vitol,
Group; Oscar S.
S.A.; International; York Woodhouse Conditioning Refrigeration
Air And
FZE, Defendants-Appellees.*
Docket No. 13-0618. Appeals,
United States Court of
Second Circuit.
Argued: Feb. 2014. Sept.
Decided: * caption The Clerk of Court is directed to amend the official to conform with the above. *4 (Roliff Houston,
Mark TX Maney, Pur- Maney & rington, Gonzalez-Felix, Hous- ton, TX; Bernstein, Stanley D. Christian Siebott, Liebhard, York, Bernstein New NY, brief), on Plaintiff-Appellant. Brant Bishop, Washington, W. D.C. (Thomas Yannucci, Bolton, D. John R. Gilmore, Ellis, Robert B. Kirkland & D.C., Washington, joint brief), *5 Defendants-Appellees Siemens S.A.A. of France, Siemens ve Sanayi Ticaret A.S. of Turkey, and OSRAM Middle East FZE. Bennett, Washington, Robert S. D.C. Handman, (Christopher T. Ellen S. Kenne- dy, Lovells, Hogan Washington, D.C.; Skadden, L. Spaziano, Arps, Jennifer Slate, Flom, & Meagher Washington, D.C., brief), joint on the Defendants-Appel- for USA, lees BNP Paribas BNP Paribas (Suisse) SA, Hong Kong, BNP Paribas Paris, BNP BNP Paribas Paribas UK Limited, Holdings BNP Paribas Lon- don Branch. (John
Axinn, Veltrop & Harkrider D. Harkrider, York, NY, Gail L. New Got- tehrer, Hartford, CT, brief), joint on the Defendant-Appellee for Secalt S.A. (Robert Williams & Connolly A. Van Kirk, Turner, Washington, Katherine M. D.C., brief), joint on the for Defendants- Inc., Appellees Textron, Pump Union S.A.S., and David Brown Transmissions France, S.A. (John
Pillsbury Winthrop Shaw Pittman Flanders, Pritchard, F. Edward Ranah L. Esmaili, York, NY, brief), joint on New (Robert Hickok, Pepper Air- Hamilton L. Defendants-Appellees Copco Atlas for Bassman, PA, Philadelphia, A. Ken- Barak Copco and Atlas CMT. power N.V. York, NY, joint King, neth J. New (James Kirkland & Ellis Gillespie, P. brief), Defendants-Appellees for GlaxoS- DeSantis, Washington, Karen McCartan SAE, Egypt mithKline Glaxo Wellcome brief), D.C., joint for Defendants- on the (South Ltd., Export Glaxo Wellcome SA AG, Automation, ABB Appellees ABB Africa) (PRY) Ltd., and SmithKline Beee- AS, Sanayi ABB Industrie ABB Elektric ham International. Machines, Champagne, ABB Industrie AC (Francis Spagnoletti Spagnolet- & Co. I. Trading and ABB Near East Ltd. Houston, TX, ti, joint Toy, David S. on the (Elliot Cohen, New Troutman Sanders brief), B. Defendant-Appellee for David brief), York, NY, joint on the for Defen- Chalmers, Jr. A/S, dants-Appellees AGCO Denmark Sterling (Philip Urofsky, & E. Shearman S.A., and do Brazil. AGCO Valtra DC, Newcomb, Washington, Danforth H. (Michael Leader & Tiffany, Berkon J. Farber, York, NY, Miriam New on the York, NY; Christopher Riley, New S. brief), joint Defendants-Appellees for Elkhart, IN, Thornburg, Barnes & on the AG, Ltd., Daimler-Chrysler Buhler ABG brief), joint for ABB Defendant-Appellee Allgemeine Baumaschinen-Gesells- Solyvent-Ventec. chaftmbH, Pumpen Sulzer Deutschland GmbH, Ltd., Sulzer Turbo Renault Trucks (Darrell Prescott, Baker & McKenzie SAS, V.I., Renault and Volvo Construction York, NY, brief), joint New on the Equipment AB. Air Defendant-Appellee Liquide Engi- neering. (Meir Feder, Day Jones Thomas E. York, NY, brief), Lynch, joint New on the & Covington Burling (Nancy Kestenb- Defendant-Appellee Corp. Chevron aum, York, NY, Lynch, New Mark H. *6 D.C., brief), Washington, joint (Thomas on the for Valen, Newark, NJ, Gibbons R. N.V., Defendants-Appellees Akzo Nobel brief), joint Defendants-Appel- on the for B.V., Organon, N.V. Intervet International Corp. lees Daewoo International and Kia AB., International, Cilag Astra Zeneca AG Motors. Pharmaceutical,
Janssen and Merial. (Mark Fulbright & Jaworski A. Robert- son, York, NY, brief), joint New on the for (Karl Geercken, Alston & Bird New Defendant-Appellee Corp. El Paso York, NY, brief), joint on the for Defen- France, dants-Appellees B. Braun Medical (Jason Cadwalader, Wickersham & Taft A.G., Melsungen B. Braun B. Braun Medi- Bull, York, NY, Jurgens, Nathan M. New (Malaysia), cal Industries BHD SDN Aes- brief), joint Defendant-Appellee on the for KG, S.A., culap Aesculap AG and Motric AgroScienees. Dow Aesculap Surgical Instruments SDN. (R. & Smith, Michael Bowie Jensen (Robert Cravath, Swaine & Moore H. Towson, MD, brief), joint on the for Defen- Baron, Cameron, York, Timothy G. New dant-Appellee Evapco Europe S.r.l. NY, brief), joint on the for Defendant- (Thomas & Warren Kelley Drye B. Kin- AWB,
Appellee Ltd. zler, Zalman, Byroade, David Melissa E. (Tai Park, York, brief), & Jensen York, NY, joint
Park for H. New New on the NY, brief), joint Defendants-Appellees Corp., on the for Defendant Flowserve Appellee Pompes, Boston Scientific S.A. Flowserve and Flowserve B.V. (Rob- Ernst & Manbeck Rothwell, Figg, (Clay Pierce, Drinker Biddle & Reath J. D.C., Parker, York, NY, Washington, joint brief), on the New
ert P. on the for joint brief), Defendant-Appellee Inger- Defendant-Appellee Agriculture for Renault Benelux, & Sonalika soll-Rand N.V. International. (J.A. (Richard D.
Sidley Klingler, Canales, Austin Ste- Canales & Simonson Cor- Horowitz, D.C., Washington, pus Christi, TX, ven joint brief), J. Doro- on for York, NY, thy Spenner, J. New on the Defendant-Appellee Wyatt, S. Oscar Jr. brief), joint Defendants-Appellees for Eli- (Larence Baker & McKenzie Walker Lilly S.A., Italiana, Export Ingersoll-Rand Newman, York, NY, joint New on the Limited, SpA., Thermo Ireland In- King brief), Defendant-Appellee for Sulzer Ltd., gersoll-Rand Trade World and Novo Engineering Burckhardt Works Ltd. Nor disk. (Michael Day Jones H. Ginsberg, Pitts- (Brett & A. Savage Spain, Willcox Nor- PA, burgh, brief), joint on the for Defen- folk, VA, brief), on joint for Defen- dant-Appellee Group. The Weir dants-Appellees Export Liebherr AG and (Penny Shane, Sullivan & Cromwell An- France, Libher SA. York, NY, drew P. Giering, New on the (Michael Cohen, Peabody Nixon S. Jeri- brief), joint Defendant-Appellee Vitol, for cho, NY, brief), joint for Defen- S.A. dant-Appellee Serono Pharma Interna- (Walter K&L P. Loughlin, Gates New tional. York, NY; Siegel, Christopher Andrew A. (Peter Epstein Green L. Becker & Alti- Payne, Dallas, TX, Siegel, Sandler on the eri, Clark, York, NY, David J. New on the brief), joint Defendant-Appellee Wood- brief), joint Defendant-Appellee Rail- house International. tech International. Reed D. (Casey Laffey, Smith New (John Harkins, Cunningham Harkins G. York, NY, brief), joint on the for Defen- Jr., PA, on Philadelphia, joint brief), dant-Appellee Air Conditioning York for Defendant-Appellee Rohm and Haas Refrigeration FZE. France, A.S. KEARSE, WINTER, Before (John Alston & Bird Doherty, P. New DRONEY, Judges. Circuit
York, NY, brief), joint on the for Defen- dant-Appellee Pauwels. KEARSE, Judge: Circuit *7 (Brian Davis Polk & S. Wardwell Wein- (or Iraq Plaintiff The Republic the stein, NY, York, New Jason McCullough, “Republic”) judgment appeals from D.C., joint brief), Washington, the on the United States District Court for the F. Hoffman Defendants-Appellees La York, Southern Sidney District of New H. Diagnostics Roche and Roche GmbH. Stein, Judge, dismissing its claims under Baker & Hostetler Baker, (Gregory L. the Corrupt Racketeer Influenced and Or- DC, brief), Washington, joint on for ganizations (“RICO”), Act 18 U.S.C. Defendant-Appellee Solar Turbines Eu- seq., 1961 et Foreign §§ Corrupt Prac- rope. (or “FCPA”), tices Act 15 U.S.C. (Judith seq., 78dd-l- et law, §§ Ledyard
Carter & Milburn A. and common York, Lockhart, NY, joint against on who New numerous defendants are al- brief), in Defendant-Appellee leged St. to have conspired Jude 1997-2003 with Export Iraq’s Medical Saddam Hussein then-president GmbH. jurisdiction over them. We supplemental ministries en- and state-owned Iraq’s and an inter- bases and corrupt plunder judgment and affirm the on these terprises to program adminis- Republic’s challenges humanitarian national need not address (or “U.N.”), Nations rulings. tered the United to the district court’s other Programme Oil-for-Food known as the (or “Programme”). Defendants I. BACKGROUND Republic’s First to dismiss
moved the Re- principal legal premise (the Complaint “Amended Com- Amended Complaint is that public’s Amended pursu- “Complaint”) principally or plaint” defined as “Saddam Regime,” “Hussein 12(b)(1) 12(b)(6). and ant to Fed.R.Civ.P. (Amend- representatives” Hussein and his pursuant to Rule They moved to dismiss ¶ 2), although it “was in de Complaint ed 12(b)(1) Repub- that grounds on nation, control of the ... was not a nоnjusticiable by are reason lic’s claims facto (id. jure legitimate government” de political- and the the act-of-state doctrine ¶ 220). allegations factual ground and on the question doctrine Complaint, together public Amended Republic standing lacked to seek re- the district documents that were before pursu- moved to lief. Defendants dismiss 12(b)(6) alia, court, summarized, for, may as relevant to inter failure ant to Rule appeal, a claim on which relief can be as follows. to state ap- granted, arguing that RICO does involving primarily for-
ply conspiracy to a Regime Iraq A. Saddam Hussein’s acts, and eign actors Hussein, president Saddam the former provide private right FCPA does not Republic Iraq, power of The rose to action, Republic pari was in de- military coup and remained defendants, and that the licto with Com- than two power for more decades. Hus- allege plaint proximate failed to causation. authority Iraq sein consolidated his over granted The district court the Rule by harshly “systematically removing] 12(b)(6) grounds; motions on those it also opposition” “installing] all officials un- Republic’s remaining claims ruled that the his direct control in all areas of the der than federal arose under state law rather (Amended government.” law, supple- and it declined to exercise ¶¶ 217-218.) The Hussein further jurisdiction over them. mental of, suppressed opposition by means inter appeal, Republic challenges On these alia, execution of imprisonment and dissi- ruling, rulings. As to the in dents, weapons and use of chemical that that principally contends opponents, causing force civilian ground inapplicable doctrine was many birth defects and thousands of Iraq’s the conduct of Hussein and deaths. Repub- not attributable to the ministries is army Iraqi Hussein caused the lic because that conduct was adverse to the Iran, starting eight-year to invade an war Iraq interests of and its citizens. For the (1) weapons which used chemical follow, reasons that we conclude *8 troops Iranian and ballistic mis- against properly claims were dismissed RICO 2, (2) August Iranian cities. On delicto; against siles of on the basis in 1990, Kuwait, Iraq beginning invaded right does not have a of action (3) FCPA; occupation during Iraq which seven-month under the and the common-lаw law, and committed numerous abuses arose under state and the dis- killed claims Ultimately, af- properly trict court declined to exercise Kuwaiti civilians. (Amended 2003, deposed in Hus- and regime “scope intensity” ter his was Com- ¶ (internal in for Iraqi was convicted an court plaint quotation sein marks against humanity, been having omitted)), crimes calling on all to embargo States systematic and responsible found trade and financial transactions with Iraq. widespread attack on civilian inhabitants ¶¶3-5, 661, See S.C. Res. U.N. Doc. town, Iraqi was by Iraqi an and executed 1990) (“Resolution 6, (Aug. S/RES/661 authorities. 661”). government The United States im- sanctions, plemented these and soon meantime, com-
In the the international designated Iraq thereafter as a state Ku- munity’s Iraq’s reaction to invasion of sponsor of terrorism. was swift censorious. Unit- wait and Security (“Security ed Nations Council 1991, February an international mili- Council”), invasion, day on the of the tary repelled Iraqi coalition forces from Iraqi Ku- invasion of “[c]ondemn[ed] After Kuwait. United Nations fact-finding wait,” Iraq withdraw “[d]emand[ed] to in Iraq missions March 1991 found im- immediately and unconditionally all suffering Iraqi mense in population, to positions they forces which were Security adopted Council a resolution 1990,” August located on 1 and “[c]all[ed] that, continuing while most of the sanc- Iraq to upon begin and Kuwait immedi- imposed by 661, tions Resolution would ately negotiations intensive for the resolu- export have allowed the of foodstuffs to 660, tion their differences.” S.C. Res. Iraq Iraq agreed if to certain conditions. ¶¶ 1-3, 2, (Aug. U.N. Doc. S/RES/660 687, ¶20, See Res. S.C. U.N. Doc. S/RES/ 1990) (“Resolution 660”) (italics origi- 1991). 687 (Apr. Security Two other nal). August On President Council resolutions in 1991 would have al- the United States —which had established lowed the Hussein to Regime Iraqi sell oil diplomatic with the relations Hussein-led return food and medicine. The Hus- Iraq see De- Regime, however, sein was unwilling to State, partment Historian, Office of the participate such humanitarian transac- History A to Guide the United States’ required tions on the conditions Recognition, Diplomatic, and Re- Consular Nations; instead, it United used the suf- lations, by Country, Iraq, since 1776: fering Iraqi as a people negotiating (last http://history.state.gov/countries/iraq tool in for an pressing end economic 16, 2014); September visited PUB- years, the Iraqi people sanctions. For THE LIC PAPERS OF PRESIDENTS to cоntinued suffer and starve. THE OF UNITED STATES: RONALD (1987) REAGAN 1834 an Execu- —issued Programme B. The Oil-for-Food policies Order “the and finding tive impasse ended in when the of Iraq actions the Government consti- in a agreed, Memoran- an extraordinary tute unusual and threat (“MOU”), Understanding dum of to partic- security to the national and foreign policy ipate plan, in a new Nations United “declaring] of the United States” Programme. Oil-for-Food See S.C. Res. to deal emergency national with 1995). ¶ (Amended (inter- (Apr. Doc. U.N. threat” S/RES/986 omitted)). Iraq petroleum to be allowed sell its quotation August nal marks On “oil”) 6, 1990, petroleum products (collectively Iraq having complied demands, purchasers Security pro- use the Resolution 660 adopted those from for- impose purchase Council a resolution to ceeds of sales to “unparalleled” eign economic food and humanitarian sanctions vendors other *9 The 661 Committee goods. chase of these Iraq’s population. civilian to benefit goods contract to reviewed each delegatee Na- or its of the United perspective From the “normal in accordance with “as a that it was was intended see tions, Programme “price acceptable strong practice,” sanctions reconciling commercial for means value,” policies. and Nations Iraqi regime [the] with and United corrupt against a ¶¶ (internal (Id. marks quotation food and medi- get] supplies need [to omitted).) ap- popula- and vulnerable each contract was innocent After cines to an ¶ (inter- (Amended Complaint 296 authorized the Nations proved, tion.” United omitted).) against marks of credit quotation nal of a letter execution Account, payment which from Escrow by a United overseen Programme, delivery upon be made to the vendor would called the committee Nations international goods Iraq. in reference to “661 Committee”—named prevent to designed Resolution 661—was years, Programme’s seven During oil using proceeds of leaders from Iraqi the Escrow deposited was into billion $64.2 ends. The personal and political sales for Ap- oil. Iraqi from the sale of Account require- included features Programme’s spent pur- billion was to proximately $37 every contract approval for U.N. ments goods, and another chase humanitarian $18 every of oil and contract Iraq’s sale satisfy was disbursed Kuwaiti billion and for the es- goods, Iraq’s purchase (See government. Iraqi claims Account,” at a an “Escrow tablishment ¶ 306.) of the Following the downfall id. Nations, by the United bank selected Regime, remaining balance Hussein by Iraq payments all to and through which to an Escrow Account was transferred made. would be by Republic. account owned required Iraqi oil was purchaser Each Programme C. Subversion of terms of the full disclosure of the to make goals Notwithstanding United Nations contract; every incorporated U.N. contract oversight Programme, known for and price paid, to be regulations. “OSP,” Regime, which was concerned Selling Price” or as the “Official ways to maintaining power, found in with monthly by the United Nations was set advantage Programme to its own value. turn the to reflect fair market attempt an sanctions. and to undermine the economic repre- price supposed The contract Programme permitted The fact that price for the oil. purchase the entire sent to choose with whom Iraqi government guaranteed let- purchases The oil were the Hussein it dealt allowed in favor of the Escrow Ac- of credit ters with arrangements covert side both moneys make count, all would be into which sellers of foreign buyers of oil with paid. money to divert goods humanitarian permitted Iraq to use Programme Iraqi peo- the welfare of the intended for “medi- purchase Account funds to Escrow ple. cine, and mate- supplies, foodstuffs health First, po- Regime “curr[ied] the Hussein for essential civilian supplies rials political allies litical favor” and rewarded needs,” equitably to “the to be distributed prices oil at below country.” by selling them throughout abroad Iraqi population (Amended ¶ (internal (Amended fair market value. quota- Complaint 280 ¶¶ 355-361.) this, ¶ 328.) accomplished part, omitted); It Iraqi id. tion marks see a U.N. committee by having provide allies and state-owned en- ministries “lobb[y]” that data” and “false market pur- for the terprises negotiated contracts
155 artifi- underpricing, to set an OSP that was which from ranged committee to$1 $4 384-385.) ¶¶ (Id. barrel, cially low. low per Such resulted in losses to the Es- (See allowed to their prices purchasеrs assign crow Account of at least billion. $1.8 (which ¶¶ 1103-1104.) impermissible interests without id. approval) profit, resell at a U.N. or to Regime The Hussein found even more risk or effort. no ways profit lucrative to from the purchas- Thereafter, began requiring that First, ing side of the Programme. the anyone purchase who to under wanted oil Regime Hussein all of required Iraq’s min- Programme pay “surcharges” the —“illicit” “non-negotiable istries to fabricate ‘trans- payments per-barrel side to the added portation goods requiring fees’ on inland ¶ (Id. see, 363; e.g., of the oil sold. price ¶ (Id. 527.) delivery.” Although the ven- ¶¶ 512.) 395, 423, 440, 468, addition, In id. charges dors included such transporta- began Regime imposing the Hussein new tion in their prices, they contract and re- fees,” surcharges “port characterized as payments charges ceived for those from demanding payments those before permit- Account, legitimate the Escrow no trans- ting cargo ports. load oil at ships Iraqi to portation services were provided, the ¶ (internal (Id. quotation 365 omit- marks fees thus included kicked back to were ted).) purchasers Iraq’s paid The oil ¶¶ (see 530-535). Regime Hussein id. surcharges through “bank accounts Thereafter, Regime the Hussein added by or Re- owned controlled Hussein so-called on all “after-sales-service-fee[s]” ¶ (Id. 363; see, gime” foreign countries. purchase contracts the Programme. under 512.) ¶¶426, 473, id. e.g., approved The ¶ (Id. (internal quotation 558 marks omit- prices sufficiently contract oil were ted).) fees, These which were also includ- to allow kick- price below market these prices, ed in the contract were “mandatory to be still paid pur- backs allow the ¶ (id. (internal quotation kickback[s]” enjoy chasers to resell the oil and “exces- omitted)) Regime, marks to the Hussein ¶ (Id. 384.) Thus, profits.” sive instead ranged percent from 2 to 30 of the negotiating contracts for the sale oil at ¶¶ (see purchase price goods id. value, the proceeds market all of of which 563). Account, gone, have
would via Escrow toward the purchase humanitarian sets of Both fees violated the terms of goods, Regime por- diverted Programme, permitted pay- which Regime’s tion of that value into market only legitimate ment service fees for coffers. ancillary supply “services (internal ¶ (id. Complaint alleged goods” under- quota- material omitted)). of oil pricing suppliers ended after the Unit- tion marks fully goods ed Nations became aware of it and paid humanitarian kickbacks to oil pricing Regime ways: instituted “retroactive to ensure the Hussein “in one three cash, purchased oil was market rates.” transfers to Regime-controlled ac- ¶ (Amended 378; counts, payments companies id. or front see ¶ 1108.) change, companies loy- Before that the sur- individuals controlled ¶ (Id. 565; charges part have of a al Hussein Regime.” would been ¶ ¶¶ see, (cash); purchase price, e.g., market-value but were id. id. ¶¶ 530, accounts); of to
paid (foreign the Hussein instead bank id. (front Account, sham approximately companies).) transporta- the Escrow totaled ¶ 1101.) (See all, million. id. tion and fees totaled after-sales-service $228.8 ¶¶ (See (See 555, 620, in New York Amended City. id. USA some billion. $1.55 *11 978.) Complaint Under 1111.) agreement its the United terms of with using fees paying to sham addition and a Nations United States funds, by profited the vendors escrowed funds, in Iraqi to deal BNP was license goods fair market val- pricing their above obligated to conform its conduct ue, by delivering as well as substandard Programme’s Notwithstanding rules. ¶¶ (See Complaint 640- goods. Amended BNP, obligation, which letters of issued 655.) Complaint estimated a majority purchases credit for of the oil delivery to the Escrow Account of cost Programme, Pro- under the contravened goods and was overpriced of substandard regulations agreement gramme and its ¶¶ 1112.) (See billion. id. at least $7 alia, by, with the United Nations inter Purchasing with De- “cooperating] the Oil Against D. The Claims Defendants to hide information from fendants material events, of these On basis including knowledge the UN” that “oil Complaint claims Amended asserted pre- were purchasers paying a substantial groups three Five against of defendants. mium oil over OSP” and that some are Pur- defendants characterized as “Oil purchasers financing purchase “were defen- chasing They Defendants.” include ¶¶ (id. 1022-1024); of oil ... others” Chalmers, Jr., David B. and Oscar S. dants “ma[king] payments of Escrow funds with- Jr., Wyatt, who ties to the personal had proper out authorization from the United pleaded have and who ¶ (id. 1038); being “involved Nations” and guilty conspiracy to offenses related to in the transfer of mil- аpproximately $10 (See corruption. Programme Amended surcharges lion illicit to the Hus- paid ¶¶ 478-492.) 397-407, Complaint The oth- ¶ (id. 1050). Regime” sein Purchasing er three Oil Defendants are firms, All the remaining defendants dis- energy one of which was affiliated Complaint in the characterized Wyatt. Iraqi These cussed are purchased with firms as Their busi- through Programme, directly oil either “Vendor Defendants.” foodstuffs, nesses involved indirectly, paid surcharges, or and either the sale pharmaceuticals, agricultural directly indirectly, Iraqi govern- or medical and ¶¶ (See 421-475.) machinery, industrial and vehi- supplies, ment. id. of these Two cles; alleged all of these are agree- firms entered into defendants non-prosecution Justice, participated have in the scheme to over- Department ments with the and charge products pay part for their and to pleaded guilty the third in state court to larceny, overage back the Hussein Re- grand relation to their roles ¶¶ (See (See gime. Complaint 800- Programme id. Amended corruption. 974.) ¶¶ 462-464.) 424, 442, Several the Vendor Defendants prosecution have admitted —in deferred defendants, other USA Six BNP Paribas plea other agreements, agreements, or “BNP”), affiliates are (collectively and five public they secretly paid admissions—that banking entities. the bank at BNP was illegal Programme kickbacks contracts. which the United established the Nations ¶¶ (See 662-799.) id. through Escrow Account which the Oil oil Purchasing paid Iraqi asserted principally Defendants through which the hu- Iraq paid claims all under RICO. defendants goods manitarian The Es- Pro- purchased. alleged it It the Oil-for-Food Paribas gramme enterprise, crow Account was located at BNP was RICO either with, Amended Complaint’s allege itself or as associated fact inter failure to alia, Committee; racketeering activity and the defendants’ defendants injuries. Complaint alleged proximate Republic’s that defendants con- cause participated agreed in the conduct of See id. at 542-50. The court also ducted through pattern racke- defendants that “the offers enterprise FCPA no alia, And, teering activity involving, private right inter mail of action.” Id. at fraud, money laundering, concluding Republic’s wire common-law 1962(c), § bribery, in claims violation 18 U.S.C. arose under state rather than feder- *12 law, al conspired and to do so violation of id. the court declined to sup- exercise 1962(d). § Complaint alleged jurisdiction The also plemental as to those claims. that, by the paying kickbacks to Hussein See id. Regime, Purchasing the Vendor and Oil In addressing pari the in de- Foreign Defendants violated the Corrupt fense, in part the district court stated as Act, §§ seq.
Practices 15 U.S.C. 78dd-l et follows: asserted, alia, Complaint inter com- Iraq attempted wrong- has to fit this against for mon-law claims BNP breach of doing of into the mold a civil action. At duty fiduciary Iraq; against its to claims heart, Iraq says, its case amounts to two of Purchasing the Oil Defendants for principal seeking a to for recover to inducing fiduciary BNP breach that to by wayward harms caused it a duty; against claims all defendants for agent Hussein —and his co- —Saddam conspiracy fraud and to commit fraud in conspirators the in this ac- defendants dealing with the United Nations connec- tion .... Programme,
tion with the for breach of Defendants have now moved to dis- their contractual to the commitments Unit- Iraq’s Complaint miss First Amended Nations, unjust ed and for enrichment re- theories, a (“Complaint”) variety on of sulting profits from the excessive made as all touch almost of which on the relation- illegal a result to of their kickbacks ship Iraq wrongs of to the which it for Regime; Hussein and claims all parties agree seeks relief. The that the inducing defendants for the Hussein Re- injustices alleged were and instigated gime duties fiduciary to breach its Regime. directed Hussein by and his Iraqi people. dispute But parties whether Re- public must Iraq responsibility bear E. The District Court Decision and, Regime for the acts of the Hussein so, if means responsibility what that for moved dismiss Defendants to this action. pursuant Amended Rule
12(b)(1) variety jurisdictional The Court concludes that Com- 12(b)(6) grounds, plaint conduct Hussein pursuant alleges to Rule law, that, variety a claim as a is at- failure to state matter of itself, thorough reported Republic tributable opinion plaintiff reasons. alleged Iraq. at 920 court misconduct has a F.Supp.2d the district Therefore, rejected jurisdictional argu- governmental character. defendants’ ments; granted within rule but it defendants’ motions conduct comes the default governmental that a conduct Republic’s regime’s dismiss the claims on RICO (1) The Court grounds sovereign. the alternative lack of extra- redounds to the (2) RICO, rejects may Iraq’s sidestep view that it applicability territorial (3) delicto, because responsibility defense of in the conduct sein, Re- Regime, and the illegiti- power actors held illegal or the not one and the escape public Iraq ... cannot are mately. Sovereigns representa- same; governments they of their are different consequences Ques- misconduct. sov- governmental represent time that the same tives’ over are from attribution distinct ereign tions of state.... legitimacy. lawfulness or questions of (cid:127) the distinction be- Notwithstanding Iraq legal relationship between government, a tween a state and its Hav- frames the case.... and Hussein sovereign it may bind the wrongdoing alleged ing engineered the represents.... alleged having Complaint, in the (internal quota- at 535-36 F.Supp.2d directly harmed the wrongdoing omitted). prin- Based on these tion marks Iraq cannot recover Programme, from a mat- the court concluded that “as ciples, wrongdoing. law, bears ter of added). F.Supp.2d (emphases at 524 action for the Hussein responsibility *13 that “the district court noted The Programme.” Regime’s corruption of the Regime the Hussein Government treated Id. at 536. government during the as the effective sovereigns operate through Because that period,” “[t]he
relevant time United governments, their both domestic and Regime the Nations also treated Hussein ordinarily impute international law to a Iraqi government,” as the effective government. of sovereign the acts its plaintiffs during argu- counsel oral example, governments policy, For set “ alia, stated, agree inter ‘We ment his foreign af- property, hold and conduct regime president Iraq, gov- was the of the gov- consequences fairs. The of these ” Iraq, agent Iraq.’ ernment of the Id. ernmental acts trace back to the sover- wrongful by acts those eign. So do the legal relationship between responsible “A state is governments. Republic Iraq, the Hussein sovereign any obligations violation of its under Regime, Iraqi people and the frames from action resulting international law litigation. relationship That rests by government or inaction the the [ ] principles: on time-tested ” (Third) of Fоr- state.... Restatement (cid:127) change governments the —from eign Relations Law of the United States Regime; Hussein to the Coalition Pro- (1987).... § 207 Authority governed visional sub- Moreover, consequences the of one Hussein; sequent to the fall of Saddam government’s may acts redound to the contemporary Republic —did sovereign government even after that Rather, entirely create an new state. replaced. has been changes leadership those altered the government continuously of a ex- F.Supp.2d noting at 536. While Therefore, isting state. the com- possible persons “it is for the who sovereign entity as Iraq is the same acting to act prise government the without by controlled the Hussein Re- the one government,” the id. at the court as gime .... sovereign may be held recognized that “a (cid:127) governmental conduct of sovereign of a state are to account for the rights [T]he any serving government.” as its persons in the state rather than the
vested con- original). The court particular government may pur- (emphasis which Id. is, Regime’s the “the Hussein it.... That Hus- cluded port represent Programme alleged goal the frustrating Iraq misconduct” Sanctions governmental. Program: Amended was
Id. at 538. (cid:127) government agencies Hussein ordered by Complaint alleges conduct to effectuate the scheme. “[0]n Octo-
Hussein done under color of Regime 25, 2000, Iraqi ber all ministries were authority Iraq. as informed that Saddam Hussein had or- Therefore, Programme conduct imposition dered of kickbacks of at Regime attrib- the Hussein should be 10% in least order to subvert the poli- Iraq purposes uted to for the of this cies the UN and the United States action. 302.) government.” (Comply (cid:127)
First, Complaint alleges agencies negotiated Government Regime’s goal” “main was to Iraqi “The transactions. State Oil (SOMO) “undermine UN sanctions and the U.S. Marketing Organization prohibiting law transactions with State legal entity that entered into the 7.) Sponsors (Comply of Terrorism.” with companies purchasing contracts Hussein declared the Sanctions oil under Programme.” {Id. ¶ 323.) Program to form of occu- “economic On goods side of the Pro- pation” implemented by “enemy.” gramme, wishing “a company to sell ¶ 302.) Thus, alleged miscon- {Id. goods humanitarian under the Pro- represents duct choices made gramme the appropri- contracted with the conduct of its Iraqi ate Ministry or State-Owned ” *14 ¶ 329.) affairs.... Enterprise.... {Id. (cid:127) Second, Complaint the alleges the that agents agencies Government and re- Regime implemented Hussein its the illicit ceived funds. Hussein by using powers engage scheme its to Regime surcharges collected in ac- Regime with the The Hussein made UN. counts held “under the names of two corruption possible, just the employees” because then SOMO trans- it was in a to Pro- position corrupt the the ferred to “accounts of the funds ¶¶ 473-74.) gramme, agreed it to the but because Bank Iraq.” {Id. Central Programme creation of the in the first that Complaint] alleges Iraqi the [The place: it as capacity president did so its the that vice directed the after- § Iraq. Government of {See MOU sales-service fee revenue “be trans- (signature Abdul Amir “for general treasury.” Al-Anbari to ferred {Id. ¶ 568.) Additionally, Iraq”).) Government of It that alleges also various Complaint alleges the that Hussein governmental government- the units (and defendants) Regime effectuated owned businesses collected fees and ¶ by their con- submitting {E.g., (Iraqi scheme false bribes. id. Minis- ¶ Regime tracts to the The Hussein try Transportation); (pay- UN. negotiate only by could those “going Iraq contracts back the ments to Gov- ¶ gov- ernment”); virtue of its status as the effective (“payments were cash”).) Iraq. Thus, ernment of the en- Regime Iraq transferred to gaged in of an international transactions sum, Iraq injuries its alleges that official character. Regime’s resulted from the Hussein
Third, Complaint alleges prosecution policy. that the of its affairs the public goal, un- Regime through govern- Complaint alleges Hussein acted resources, public pursued ment officers pursue offices and to its dertaken under law rather than federal com- using means state purposes, political mon law. to state actors. These only available to conclude the the Court
features lead Defendants, to endorsing in addition the acted under the color of Regime Hussein 12(b)(6)rulings, Rule renew district court’s authority Iraq as the Republic’s challenge standing their to the this for the motion. purposes III of the Constitution to under Article F.Supp.2d at 538-39. injuries Republic’s to the pro- recover for interests, arguing that prietary “Iraq itself court concluded that “the The district instigated alleged wrongs and the received that Re- alleges Hussein (Defendants’ illicit payments” brief on gime and orchestrated conceived 31). reject appeal standing We with defendants’ assis- wrongful conduct substantially argument the reasons proceed it cannot due to tance and thus court, stated the district see 920 pari delicto.” Id. defense F.Supp.2d at 531-32.
II. DISCUSSION claims, respect With RICO we affirm district court’s dismissal on the Republic challenges most appeal, On doctrine, pari basis the in rulings. court’s the district unfavorable Republic’s thus we need not address respect With to the dismissal of its RICO challenges grounds other which delicto, the basis of in claims on dismissed those district court claims. Republic principally contends that properly This based dismissal on the inapplicable, arguing doctrine was Republic’s and we see no pleading, abuse at- conduct of the is not of discretion in the district court’s denial of Republic tributable to because Complaint. leave amend the Amended adverse to the interests of conduct was also reject Republic’s challenges We and its citizens. also of its claims dismissal FCPA and its argues question of comparative nonstatutory claims. question prop- fault a fact could not 12(b)(6)motion; erly on a Rule be resolved A. The RICO Claims *15 alternatively, argues it that the district delicto, pari allowed it court should have to amend its The doctrine in a fault,” Complaint. The term meaning equal Amended chal- “of reflects the lenges principle partici of its who has plaintiff the dismissal claims under the that a Act, Practices in with Foreign Corrupt arguing pated wrongdoing equally another authority” that that by person may the “line of relied on the not recover from other proposition resulting for the from the person damages wrong district court doing. FCPA an in provide implied private principal does contexts which the right Supreme action “is in error” the (Republic applica brief Court has discussed 56) legislative bility on at and that of in to a cause of appeal pari the delicto action by that history Congress demonstrates in- created federal statutes are anti the laws, Mufflers, an implied right tended that such of action trust Perma Inc. v. see Life 134, by Corp., the cоurts. recognized Repub- International Parts 88 (1968)(“Perma that, 1981, given lic 982 also contends the interest of S.Ct. 20 L.Ed.2d speaking single Life”), grounds by the in a on other United States overruled affecting Independence Copperweld Corp. voice on matters rela- v. Tube 752, 2731, tions, Corp., erred 467 104 S.Ct. ruling the district court in that U.S. 81 (1984), nonstatutory and the Republic’s claims arose L.Ed.2d 628 securities
161
Eichler,
Richards,
laws,
delicto,
pari
see Bateman
Hill
“the doctrine of in
with its
Berner,
299,
Inc.
472
S.Ct.
complex scope, contents,
effects,
v.
105
and
(1985) (“Bateman
2622,
215
86 L.Ed.2d
recognized
not to be
as a defense to an
Eichler”);
Dahl,
622,
v.
Id.,
Pinter
486
antitrust action.”
140
at
[88 S.Ct.
(1988)
2063, 100
108 S.Ct.
L.Ed.2d
opinion
ques-
reserved the
1981].
(“Pinter ”).
tion
a plaintiff
engaged
whether
who
in
complete
“truly
and partic-
involvement
In
Life,
Supreme
Perma
re-
Court
ipation in a monopolistic scheme”—one
rulings
upheld
versed
lower-court
had
who “aggressively supportfed] and fur-
pari
by
an in
a
delicto defense asserted
the monopolistic
therfed]
scheme as a
franchisor,
(“Midas”),
Midas Muffler
necessary part
parcel
and
it”—could
alleged
who
their
franchisees
be barred
pursuing
damages
ac-
from
franchise agreements violated the antitrust
tion, finding that
dealers
muffler
stating
laws. While
that “the doctrine of
relatively
had
bargaining power
little
delicto,
pari
scope,
with its complex
they
by
had been coerced
contents,
effects,
recog-
is not to be
into agreeing many
franchisor
action,”
nized as a
to an
defense
antitrust
provisions.
contract’s
Ibid.
392 U.S. at
Court
S.Ct.
separate
In
opinions, five Justices
noted that
even
narrower defense
agreed
concept
“equal
fault”
shared fault would have been inapplicable
be narrowly
should
in litigation
defined
in the case
it because
record
before
arising
regulatory
under federal
stat-
illegal
showed that
scheme
thrust
“the
strong
utes.
public
“[B]ecause
Midas,”
upon
id. at
[franchisees]
in eliminating
interest
restraints
Justices,
Five
S.Ct. 1981.
howev-
...
competition,
many of the refine-
er, opined that a defense to an antitrust
of moral
ments
worth demanded of
recognized
claim
if
plaintiff
should be
plaintiffs by
many
variations
really
substantially equal
bore
least
re-
pari
applica-
of in
not be
should
sponsibility for the violation.
id. at
See
Id.,
ble in the antitrust
field.”
[88
(White, J., concurring);
does not undermine
(2014).
L.Ed.2
cy.” Id. at
Applying
pari
has decided whether in
this Court
claims for violations of federal
context of
defense to a civil RICO
delicto is
valid
laws,
Supreme
Court
securities
that have
appeals
The courts of
claim.
rejection
affirmed the
Bateman Eichler
have concluded that
question
reached
against plaintiff
an
delicto defense
it
Committee Unsecured
is. See
that a broker-dealer
investors who claimed
Official
Edwards,
Inc. v.
*17
Creditors
misleading informa
false and
gave them
PSA
(“Edwards”),
(11th Cir.)
1145, 1152-56
F.3d
represented to be accurate
tion that was
denied,
811, 127
549 U.S.
t.
It concluded that an
information.
inside
cer
(2006);
45,
Rogers v.
RICO
while
rizing
person injured
its business
Prong
Responsibility
One:
to
a civil action
treble
property
bring
for
very premise
The
of the Republic’s
damages,
1964(c),
§
see 18
silent
U.S.C.
is
Complaint is that the
Regime
“de
availability
to the
of any
as
common-law
signed
instigated”
and
the corruption оf
necessarily
Such
does not
defense.
silence
(Amended
the Oil-for-Food Programme.
unavailable,
mean that such
are
defenses
¶4.)
Complaint
Complaint
is replete
however,
“Congress
because
is understood
descriptions
with
of demands made on the
legislate
com
background
Purchasing
Oil
Defendants
the Vendor
adjudicatory
mon-law
principles.” Astoria
pay
Defendants to
all manner of “manda
Loan
Savings
Federal
&
Ass’n v. Solimi
¶
(id.
(internal
tory kickback[s]”
quota
no,
108,
104,
2166,
S.Ct.
omitted))
tion marks
illicit surcharges.
(1991). “Thus,
L.Ed.2d 96
com
where a
(See
above.)
Part I.C.
Even a defendant
established,
principle
mon-law
is well
personal
who
close
had
ties to the Hussein
it
may
given
the courts
take
as
that .Con
Regime was forced against
pay
his will to
gress
legislated
has
with an expectation
illegal kickbacks in
order
do business
the principle
apply except
will
when
Programme.
Oil-for-Food
statutory purpose
contrary
to the
is evi
¶¶
(See
499-503.)
Amended Complaint
(internal quotation
Id.
omit
dent.”
marks
Under
Regime’s policy,
the Hussein
ted).
“[n]o
company
exempted
any
[was to] be
for
The in
principle
delicto
es
well
¶
(Id.
(internal
reason.”
quotation
tablished. The Bateman Eichler Court
omitted).)
Complaint
marks
portrays
traced the “classic formulation” of
doc
having
BNP as
concealed from the United
eighteenth
trine back
century.
information
irregu
Nations
about contract
12, 105
2622; see,
306-07 & n.
S.Ct.
having
larities and
improper
facilitated
Lernout,
e.g., Nisselson v.
469 F.3d
funds,
payments of
thereby
escrowed
as
(1st
(in
Cir.2006)
pan
delicto “has
sisting
Regime
the Hussein
to achieve its
long been
into the
woven
fabric of federal
(id.
“corrupt
wrongful
intentions”
law”),
denied,
cert.
550 127 S.Ct.
¶
¶¶
see,
980;
1038).
1022-1024,
e.g., id.
(2007).
2131,
Applying to Republic. argument the Bateman Eichler test That is meritless. Republic’s long claims in has present recognized legal RICO Our law *18 164 (see, changes Marketing Organization e.g., State Oil
position
foreign
a
state survives
of
¶
Thus,
323),
integral
a foreign
in its
state’s
id.
which was
to the
government.
proprietary rights,
Programme,
and its causes of action
corrupt
scheme
courts,
following change
a
in
persist
our
enterprises
pur-
various
state-owned
Sap
government.
its form of
See The
goods
chased
from the Vendor Defendants
Wall.)
(11
164, 168,
¶
phire,
20 L.Ed.
(see
329).
78 U.S.
Regime
id.
The Hussein
acted
(1871);
Valley R.
Lehigh
¶
127
Co. v. State
(id. 490),
Iraq”
as the
of
“Government
as
(2d
Russia,
396,
Cir.),
21 F.2d
399-401
the United Nations and the United States
of
denied,
571,
159,
48
72
cert.
275 U.S.
S.Ct.
acknowledged,
universally
and as was
un-
(1927). Similarly,
L.Ed.
the obli
432
Republic
derstood.
acknowledged
As the
state are
gations
foreign
unimpaired
of a
court, the
before the district
Hussein Re-
by a
that state’s
change
government.
gime
was
of
president
“the
[and]
Lewis,
County v.
See Comanche
133 U.S. government
Iraq.”
F.Supp.2d
920
of
at 535
(1890).
198, 205,
286, 33
10 S.Ct.
L.Ed. 604
(internal
omitted).
quotation marks
of a
rights
sovereign
Because “the
state
Republic
although
insists
any
are
in the state rather than in
vested
Regime
“was
de
con
Hussein
facto
particular government
may
which
purport
nation,
trol of
it
not a
jure
was
de
or
it,” Guaranty
to represent
Trust Co. v.
(Amended
legitimate government.”
Com
States,
126, 137,
United
304 U.S.
58 S.Ct.
¶ 220.)
plaint
alleged
It
Hussein
(1938)
785,
1224
(“Guaranty
82 L.Ed.
Regime
and retained
power
assumed
”),
Trust
“government
when
laws,
contravention of domestic
and com
remains,
changes,
nation
rights
acts,
mitted
genocidal
thereby
vile and
and obligations unimpaired,” United States
making
“[il]legitimate”
Regime
from
Watkins,
140,
ex rel. Kessler v.
F.2d
163
(2d Cir.)
domestic
international
(internal
perspectives
quotation
143
marks
¶¶
(id.
223).
220,
denied,
allegations,
These
omitted),
838,
how
cert.
68
(1947).
ever,
220,
question
are irrelevant
to the
of
S.Ct.
165
to be
to an
Iraq,
purposes”).)
aptly
ernment of
are
attributed
As the district court
concluded,
Iraq.
of
Republic
Complaint allege[d]
“[t]he
public goal, undertaken with public re-
course,
every
that
action
Of
sources, pursued
political
purposes,
a for
happens to be taken
officials of
using
only
means
available
state
that
eign
properly
state is
attributable to
actors.” 920 F.Supp.2d
agree,
at 539. We
instance,
considering
For
state.
and thus conclude that the actions of the
of
act-of-state doctrine—
applicability
Regime
are attributable to The
“precludes
that
the affirmative defense
Republic
Iraq.
of
country
of
from
into
inquiring
courts
this
persuaded by
are not
We
the Re
validity of
acts a
public
recognized
public’s argument
that,
general
under
foreign
within
sovereign power committed
law,
principles
agency
of
a government’s
Banco
territory,”
its own
Nacional de
actions should not be attributed to
Sabbatino,
401,
398,
v.
376
Cuba
U.S.
84
governs
government
state it
(1964)
when the
(“Sabbati
923, 11
804
S.Ct.
L.Ed.2d
power
abuses its
no”)—courts
contravene the nation
distinguish
public
“between
al
preliminary matter,
interest. As a
we
official,”
private
foreign
Re
acts of
question
note
of whether to attrib
Marcos,
public
Philippines
v.
806
of
foreign government
ute the conduct of a
(2d Cir.1986)
344,
(“Marcos”),
F.2d
359
cert,
and its officials to their state is a matter of
denied,
1048,
2178,
481
107
S.Ct.
federal
questions relating
law because “all
(1987); see, e.g.,
be
light
Republic
to the
plicable
general rule
agent,
its
under the
Regime
Regime
Complaint’s allegations of Hussein
normally
are
agency
agent’s
actions
that,
totally
conduct
rather than
abandon-
escape ap
To
principal.
to the
attributed
interests,
Iraq.
ing Iraq’s
part benefited
rule,
Republic
plication
general
of this
alleged,
example,
Complaint
The
invoke what
is known as the
seeks to
“
illegal
of dollars of secret
sur-
millions
exception,”
interest’
under
‘adverse
charges
paid
were
“to the Government of
not be
agent
“acts of the
will
which
¶
(internal
(Amended
Iraq”
Complaint 483
although
if
charged
[principal]
to the
omitted))
marks
to enable “the
quotation
[principal],
acts for the
agent purportedly
objective
Iraq to achieve its
Government of
really committing a fraud for his own
he is
collecting
illegal surcharges
on oil”
benefit,”
Group,
Funding
In re Bennett
¶
(id.
(internal
omit-
quotation
marks
Cir.2003)
(2d
(inter
Inc.,
94, 100
336 F.3d
ted)).
Complaint
alleged
also
The
omitted). However,
marks
quotation
nal
Regime
of the Hussein
had
Vice President
exceptions,”
“this
most narrow of
[is the]
that all of the sham after-sales-
ordered
outright
...
for those
“reserve[d]
cases—
totaled “about
service fees—which
$1.02
looting
theft or
or embezzlement—where
¶
(id. 620)—
March 2003”
billion
only
benefits
him
the insider’s misconduct
’”
“
(id.
treasury
general
‘be transferred to
i.e., where the fraud
party;
self or a third
¶
added)). Thus, even if
(emphasis
[principal]
rather
is committed
and the
regarded
principal
were
as
v.
than on its behalf.” Kirschner
KPMG
agent, the adverse-
Regime
Hussein
its
LLP,
446, 466-67, 912 N.Y.S.2d
15 N.Y.3d
inapplicable
rule
be
because
interest
would
(2010) (“Kir
508, 519,
must have Republic argues that order acting entirely interests and pal’s inter- “support application of the adverse It can- purposes. or another’s his own it have been al- exception,” est should merely he has a not be invoked because Amended lowed to amend the conflict of interest or because he is allegations that clarify amplify acting primarily principal”.... for his control over the Ira- “Hussein utilized his personal his qi government to serve 938 N.E.2d Id. at N.Y.S.2d 31.) appeal Affiliates, goals.” (Republic brief (quoting Hampton v. Center making any argument But even defendant. The district court proper- Republic futility. Repub- ly reveals that responsibility attributed to the Re- allege lic states that it would that “Hus- public. family por-
sein and his
stole a material
paid
tion
illegally
of the funds
Prong
Two: Policy
Regime by
the Defendants.”
prong
second
the Bate-
(Republic
appeal
(emphasis
brief on
at 35
man
recognition
Eichler test asks whether
added).)
alleged
As the
has
of the in
to a
defense
federal
that the Hussein
ordered some of
statutory cause of
comport
action would
illegally
deposit-
obtained funds to be
purposes
with the
of the statute. The
*21
in Iraq’s treasury
politi-
ed
and used for
Circuit
aptly explained why
Eleventh
has
cal purposes,
Iraq
interests of
were
the
“the
of
application
pari
in
delicto to bar [a
totally
abandoned.
adverse-inter-
coconspirator’s RICO
advances
claim]
exception
apply
allegations
est
cannot
to
policy
liability
of civil
under the federal
government
that Saddam Hussein’s
statute,” Edwards,
RICO
asserted on
behalf
creditors
[innocent]
(other
quotation
at 1155
internal
F.3d
shareholders”).
omitted).
Thus, it
agree.
marks
We
sum,
purpose
reveals that
consistent with the
of RICO to
an
instigator
recognize
pari
was the
delicto defense in
where,
party
plain-
dominant
in the frauds
as a direct result of the
and breaches
cases
id.,
corrupted
wrongdoing,”
Pro-
tiffs “affirmative
Oil-for-Food
gramme.
wrongs
substantially equal
Its
“at
responsibility
plaintiff
for the
bears
least
Eichler,
perpetrated
great
least
that of
responsibility,”
was at
as
as
Bateman
I, 70 F.2d at
Art Metal Works
(quoting
viola- 179
for the RICO
(L.
J.,
Hand,
dissenting)). Art Metal
complains.
which it
tions of
on the basis of the
I was decided
Works
court’s
in the district
see no error
We
70 F.2d at
of unclean hands. See
doctrine
pari
delic-
of the
ruling
application
(majority opinion) (“[a]pplying th[e]
does not
present
case
to doctrine
coming into a
equity”
that “one
principle
conclude
public policy. We
offend
do so with clean
equity
court of
must
properly dis-
claims were
Republic’s RICO
(L.Hand,
hands”);
dissenting)
id. at 646
of that doctrine.
missed on the basis
(“The
confessedly derived from
doctrine is
court, originally
unwillingness
About the Dissent
3. A New Words
conscience,
give
nominally one of
still
disagreement
dissenting colleague’s
Our
very
in the
relief to a suitor who
peculiar
affirmance
court’s
of the district
our
controversy has so conducted himself as
claims on
Republic’s
RICO
dismissal
shock the moral
sensibilities
defense
of the in
the basis
judge.”).
us to make several observations
prompts
analysis of that defense
to the dissent’s
as
Although the doсtrines of unclean hands
application.
of its
and of the effect
*22
mentioned in
pari
and in
delicto are often
breath, they are “distinct terms
the same
Interpretation
Dissent’s
a. The
situations,”
Life,
...
Perm a
for
distinct
Eichler
Bateman
n.1,
(Harlan,
1981
federal securities
(considering
policy
“the
of
F.3d at 1155
Complaint alleged
Amended
The
the federal RICO stat
liability
civil
under
paid
surcharges and kickbacks
that
ute”).
free
approach
The
would
dissent’s
Purchasing Defen
and Oil
by the Vendor
disregard
the in
courts to
antibribery provisions
dants violated
articu
any “policy”
defense on
basis
contends
Republic
FCPA. The
of the
by
plaintiff.
lable
a creative
recog
should have
that the district court
action
right of
implied private
nized an
b. Additional Observations
despite
provisions
those
for violations of
holding
cases
a consistent line of
to make three addi-
compelled
areWe
particularly
is
Republic
expressed
contrary.
as to views
tional observations
Morris, Inc.,
Phillip
Lamb v.
our
critical of
as to the effect of
by the dissent
Cir.1990)
(6th
{“Lamb”),
F.2d 1024
First,
that our decision 915
the view
decision.
cert, denied,
1086, U.S.
the de-
498
victims of
“deprive[s] the ultimate
170
(1991),
leading
remedy
case
consistent
argues
underlying purposes
leg-
of action. The
with the
legisla-
remedy
scheme to
analysis
imply
Lamb erred
islative
such a
plaintiff?
history
tive
of the FCPA and
for the
history suggests that
the reason Con-
Id. at
“[P]rivate purpose officials for the of influ- federal enforce law must be created encing action in official order to obtain Sandoval, Congress.” Alexander v. 78dd-l(a), §§ business. See 15 U.S.C. 275, 286, S.Ct. L.Ed.2d 78dd-3(a). 78dd-2(a), the stat- text of (2001) (“Sandoval”). A federal statute ute contains no explicit provision for a may private create a action right of either right action, private it although does or, expressly rarely, by implication. more provide for civil and criminal see penalties, considering whether statute confers 78dd-3(e), 78ff(e), §§ 78dd-2(g), id. action, implied private an right of “[t]he рermits Attorney seek in- General to judicial interpret task is to the statute relief, 78dd-2(d), junctive §§ see id. 78dd- Congress passed has to determine whether 3(d). express “[t]he Because provision displays just it an intent to create one of enforcing method rule substantive private right private remedy.” but also a Congress suggests pre- intended intent, Id. To discern Congress’s “we look others,” Sandoval, clude first the text and structure stat *24 1511, statute, 121 S.Ct. the structure of the ute.” Lindsay v. Association of Profes enforcement, by focusing public on tends Attendants, 47, Flight sional F.3d 581 52 to indicate the private absence of a reme- (2d Cir.2009), denied, 1038, cert. 561 dy- 3513, (2010). S.Ct. 1114 L.Ed.2d n.3, To “illuminate” analysis, this id. at 52 v. do Cort Ash factors also not also we consider factors enumerated in recognition support right. of a private Ash, 2080, v. Cort 95 S.Ct. prohibitions The statute’s the reg- focus on (1975), L.Ed.2d 26 which include the fol entities; ulated the FCPA no lan- contains lowing: guage expressing solicitude for those who First, plaintiff is the one of the class for might bribery, be victimized acts of especial whose benefit the statute was any particular persons. class of “Stat- enacted, is, ...— that regulated does the statute person utes that focus on the create a right federal in favor of the rather than the individuals cre- protected Second, plaintiff? any implication indica- there ate no of an intent confer legislative intent, of explicit tion or im- rights particular persons.” class of any intent is ex- 1511 cannot be said Sandoval, at omitted). (internal Cong. marks at all on this issue.” quotation pressed (1977) (statement 38,601, 38,602 of Rec. history of the legislative Nor does Tower) added). (emphasis Sen. on the an intention demonstrate FCPA right private create a Congress to part of Second, legislative history although Lamb, 915 F.2d action. As discussed of references to the desir- contains additional by Senator a bill introduced action, right they of do ability private of a included an Congress in the 94th Church any congres- clear indication of provide competitors of action for express right generally sional intent to create one. See officials, see S. foreign bribed those who Doctrine and the Siegel, Implication Cong. § Rec. Cong. 94th Act, 79 Foreign Corrupt Practices Colum. (1976); 12,605, 12,607 provision, how- (1979) (canvassing 1105-12 L.Rev. ever, of the by a committee was deletеd legislative history finding detail and 94-1031, Senate, at 13 S.Rep. No. see congressional “no conclusive evidence (1976). actions”). grant private intent to finally en- Congress, which the 95th FCPA, a committee of House acted the Third, this case illustrates we note that reporting out a bill Representatives, Lamb, avoids the the wisdom of which private for a provide expressly that did not parties the FCPA question of what class action, a statement right of made Although designed protect. we intends that the courts House “Committee de- agree “primarily that the statute was private cause of action recognize shall integrity of American signed protect legislation on behalf based on markets,” domestic foreign policy and injury as a result persons who suffer Lamb, might argue one 915 F.2d bribery,” H.R.Rep. prohibited corporate principally foreign govern- it is (1977). 95-640, at 10 have three No. We corrupt- processes might be ments whose Republic’s with the reliance problems main highlights claim Republic’s ed. The statement, of the aspects and other on this with the latter concern problem obvious justification history, as legislative FCPA’s government supposedly here: The private right of a judicial implication by the FCPA was the “protected]” to be action in its favor. in the entity that demanded the bribes First, statement the House committee’s place. first (and repeated was not no endorsement it has although Finally, we note any way suggested) its substance was century since nearly quarter of a been of either the Senate committee reports decided, although Congress Lamb was or the conference considering FCPA FCPA, see recently amended the has more that reconciled the views committee Fair Anti-Bribery and Com- International language produce and Senate to House *25 1998, 105-366, No. petition Act of Pub.L. ultimately it enacted. of the FCPA as was (1998), Congress has not 112 3302 Stat. (1977); Rep. 95-114 H.R. S.Rep. See No. conclude Lamb. chosen to override We (1977). Indeed, on the the debate 95-831 of action right private there is no committee conferee report, one conference of the antibribery provisions under “courts question that the of whether stated did not the district court and that FCPA implied private right recognize will [an] FCPA Republic’s dismissing err in the Sen- action .... was not considered conference, claims. and thus during [it] ate or
172 “pass[ validity C. The Common-Law Causes Action whether to on the of for- ] eign a “uniquely acts of state” is federal” nonstatutory causes of action issue, Sabbatino, 423-24, 376 U.S. 84 Amended in asserted Marcos, S.Ct. 923. In we concluded that fraud, breach of fiduciary cluded claims of jurisdiction there was federal over a suit contract, duty, unjust breach of and en brought by foreign a state its for- court, having richment. The district dis mer president “regain proper[t]y alleg- Republic’s statutory missed the causes of edly result obtained as the of acts when he action, supplemental declined to exercise state”; was head of we so held for a jurisdiction over these common-law claims. reasons, number of one of which was “the National, Republic, First citing 353 necessary implications of such an action Marcos, 47, F.2d F.2d con United States relations.” 806 tends that the court should have enter consideration, F.2d at 354. a quite Such nonstatutory tained the claims as a matter similar underlying to that the act-of-state law, of federal common interest doctrine, is not here. present having speak “the nation with a united voice” in order complicating to avoid “for case, In present the Complaint’s as eign (Republic appeal relations.” brief on nonstatutory sertion of wrongs describes (internal omitted).) at 59 quotation marks traditional torts types private enti Republic’s reliance these cases is ties. The Republic uniquely identifies no misplaced. federal interest rules of decision to applied, any nor conflict between no general
“There is
federal
policy
federal
or interest and
the use
law,”
common
R.
Erie
Co. v. Tompkins,
state law. We conclude that the district
64, 78,
58 S.Ct.
special
only
federal rule”
in those rare
significant
“situations where there is a
con
Iraq’s
The Republic
allegations
in this
flict between
policy
some federal
or inter
paint
sorry
case
portrait
greedy
of a
est and the use of state law.” O’Melveny
ruthless
colluding with venal
FDIC,
Myers
79, 87,
&
v.
114 individuals and business firms to divert
(1994)
(internal
S.Ct.
ble ... defense plaintiffs recovery may a government.” law notion that survives in its changes state conduct.” by wrongful ante, be barred his own Op., In Maj. articulating at 164. this Dahl, 622, 632, 108 Pinter v. 486 U.S. S.Ct. principle, majority draws on two dis- (1988). 2063, 658 But the 100 L.Ed.2d tinct lines of cases. The first concerns majority’s analysis doеs not rest foreign sovereigns’ conduct within the wrongful In Republic’s “own conduct.” that, it a foreign U.S.: holds when sover- stead, analysis majority begins its eign acts under law—such liti- by U.S. as general principle responsibility a of state in gating entering U.S. courts or into obligations foreign under a which “the through transactions —it does so its then- by change state are unimpaired government recognized govern- ante, government,” Maj. state’s Op., designated ment’s as representatives, such 164—a that we before principle have never See, e.g., ambassadors. Guar. Trust Co. of context, the con recognized this where States, 126, v. N.Y. United 137- alleged duct that to the defendants are (1938). 58 S.Ct. L.Ed. 1224 82 engaged govern have in with a foreign The second—the act of state doctrine— illegal ment was under U.S. from the law foreign governments’ concerns conduct concludes, beginning. majority The then territory: their it within own holds that purported principle based on this of state generally “the country courts [will responsibility, post-Hussein Re inquir[e] validity into public not] public complicit should be treated as recognized foreign sovereign acts [of] on a Regime’s fraud humanitarian relief power territory.” committed within its own program specifically designed aid the Sabbatino, Banco Nacional v. de Cuba population enriching civilian while not 398, 401, U.S. S.Ct. L.Ed.2d 804 Regime. The in is delicto defense (1964). Neither of these doctrines applies premises founded on twin that “courts here. good should not their lend offices to medi ating disputes among wrongdoers denying judicial [and] relief an A. wrongdoer
admitted
is an effective means
principle
that a
state acts
Eichler,
of deterring illegality.” Bateman
under U.S. law
its
through
recognized gov-
Richards,
Berner,
Hill
Inc. v.
472 ernment has
long been established.
299, 306,
I
only
majority’s
therefore concur
in the
reigning Emperor,
Assembly,
or National
holding
Forеign
Corrupt
Practices
or
actual
person
party
power,
other
or
Act
private right
does not create a
agent
representative
but the
action; otherwise, I respectfully dissent.
sovereignty,”
Supreme
national
Court
I.
held,
change
such that
in such repre-
“[a]
change in
majority presents
sentative works no
the national
its decision as
deriving
long-established princi-
sovereignty
from the
rights.”
Id. at 168.
*28
gov-
acts.
ognized government’s
“What
Valley Railroad Co. v.
Similarly, Lehigh
in
Russia,
regarded
repre-
the then-
to be
here as
held
ernment is
this Court
provision-
foreign sovereign
of the
a
state is a
representative
sentative of
recognized
bring suit to
judicial
could
than
government
political
question,
al Russian
rather
a
Russian-
for the destruction
by
political
recover
and is to be determined
the
in
explosives while
and
owned ammunition
government,”
department of
Court
396,
21 F.2d
transit in the United States.
“The
observed.
Id. at
B. procuring by the contract to paying bribes majority The further asserts that the 400, 402, Nigerian 493 110 officials. U.S. Regime of are proper- actions the Hussein (1990). L.Ed.2d S.Ct. 107 816 The Reрublic ly attributed to the because the argued successful of bidder the act Regime government “acted as of Iraq.” the precluded state doctrine the litigation, ante, Maj. Op., at 165. This conclusion necessary since the facts establish again principle relies on a that does not bribery the “support occurred would also a apply to this case. The decisions that the finding that un- the contract invalid [was] majority of support cites this assertion Nigerian der Id. at law.” 110 S.Ct. doctrine, of primarily involve the act state Supreme rejected Court which, formulation, in its traditional holds argument. only Id. “Act of state issues country “the courts of one will not sit is, arise when a court must decide—that judgment on of government the acts the when the of upon— outcome the case turns another, territory.” of done within its own the effect by foreign of official action Hernandez, 250, 252, Underhill v. sovereign,” (empha- the Court found. Id. (1897). 456 L.Ed. original). sis in “When question is below, however, court found that the act of case, not in the neither is state the act of preclude Repub- state doctrine did not the doctrine.” Id. claims, AG, Republic lic’s v. ABB of F.Supp.2d (S.D.N.Y.2013), 533-34 Here, similarly, although finding majority reject and the not does this con- against imply the would defendants tend to clusion. Regime that the Hussein violated its inter- obligations by national Pro- corrupting the
The district
correct in
court was
its de-
(a
that,
gramme
event,
any
conclusion
termination that
of state
the act
doctrine
beyond dispute),
seems
aspect
no
of the
preclude
Republic’s
does not
the
claims.
Republic’s
validity
turns on
of
claims
Adjudicating Iraq’s claim would not re-
Regime’s
a court
the Hussein
conduct.
Re-
quire
“inquir[e]
into the
validity
public
public’s
recognized
complaint challenges
acts a
conduct
sovereign power committed within
its own
non-state defendants under
law.1
Republic’s
1. That
support
claims are based
court cited
on
this rule
of its conclu-
law,
domestic
Regime's
and are asserted
non-
sion that
re-
conduct
defendants,
explains
inapplica-
Republic,
Iraq,
state
also
dounds
see
bility
responsible
F.Supp.2d
state
majority
"[a]
rule that
is
but the
does
any
obligations
rely
appear
majority
violation of
not
its
under inter-
on it. The
is
resulting
law
national
from action or
correct
rule.
inaction
not to base
decision on this
by
governs
responsibility
[] the
state.” Restate-
The rule
for viola-
state
(Third)
Foreign
"obligations
ment
Relations Law of
tions of
under
international
law”;
(1987).
§
United States
The district
it
a rule of international
law. As
it
functioning Programme, since was de
Indeed,
adjudicating
Republic’s
if
an
required
signed
proceeds
to ensure that the
of oil
against the defendants
claims
validity
the Hussein
into the
inquiry
sales were not diverted from humanitarian
acts,
criminal
then the
Regime’s official
foreign govern
Because
“[a]ets
uses.
the two individual defen-
convictions of
purporting
ments
to have extraterritorial
agreements
non-prosecution
and the
dants
by
outside the
definition[ ] fall[ ]
effect
Department
into between
entered
doctrine,”
scope of the act of state
defendants
corporate
and various
Justice
Regime
of the Hussein
in subvert
conduct
faulty premises:
would stand
ing
Programme
cannot be encom
adjudicate
charges
court could never
such
passed by the doctrine. Allied Bank Int’l
violating the act of state doctrine.
without
Agricola
Cartago,
v. Banco Credito
de
(2d Cir.1985).
Furthermore,
Republic’s claims do
F.2d
acts
the Hussein
implicate
if
Even
the act of state doctrine were
*30
solely
Iraqi territory. See
on
performed
case,
in
not end
implicated
would
Underhill,
83;
168 U.S. at
analysis.
Once a court determines the
(“It
Accordingly, for “immoral
States,
456, 506, 47 S.Ct.
relevant,”
and taint
it “must touch
United
see,
(1927);
e.g.,
“im-
The relationship between a corporation
designed
tion is
to aid “in eradicating orga-
*33
and its officers also differs in several obvi- nized crime from the social
by
fabric”
“di-
respects
ous
from the relationship
vest[ing]
between
of
[defendant]
the fruits of its
a sovereign
government—
state and its
ill-gotten gains.” United States v. Turk-
particularly
ette,
where that
an
576, 585,
is
452
2524,
69
authoritarian
(1981).
regime rendering
policy
L.Ed.2d 246
goal
This
especially
is
—
justificаtions
might
support
imputa-
important
alleged
when the
conspiracy un-
tion in the former
altogether
context
inap- dermined a trade embargo established—
plicable in the latter. The New York with
support
of
political
both
branch-
Court of Appeals
justified
has
imputing
es—in response to “an unusual and ex-
the acts of corporate officers to the corpo-
traordinary threat to the
security
national
by
ration itself
observing
“imputation
and
policy
States,”
of the United
fosters an incentive for a principal to
12,722,
select Exec. Order
31,-
No.
Fed.Reg.
586C,
2, 1990);
embargo,
Congress ap-
§
at
the trade
the U.S.
104 Stat.
(Aug.
2048,
humanitarian relief
corrupted
proved
appropriation
of five million
and
to alleviate the “near
designed
support “Iraqi
oppo-
democratic
program
dollars
embargo
that the
and
apocalyptic results”
through
organi-
“such activities as
sition”
brutality
Regime’s ongoing
Hussein
zation,
training, communication and dis-
pari
The in
Iraqi people.
on the
had
information, developing
of
semination
solicitude
is “based not on
delicto defense
agreements among opposi-
implementing
defendant,
but on concern for
for the
groups,
compiling information to
[and]
tion
welfare,
application
thus when
public
Iraqi
support the indictment
officials
in the public
the doctrine would not be
Supplemental Ap-
war crimes----” 1998
interest,
recovery.”
permit
the courts will
Act,
propriations and Rescission
Pub.L.
Inc., 592 F.2d
Leasing
In re
Consultants
105-174,
§
112 Stat.
No.
(2d Cir.1979).
Accordingly, I do
majority’s
discussion of the second
that we should allow the de-
not believe
pari
con
prong
the in
delicto defense
clearly
so
fense where it leads to results
in general
cludes
terms that “it is consis
public policy.
odds with U.S.
purpose
recog
with the
of RICO to
tent
Indeed,
application
pari
of the in
an
defense in cases
pari
nize
in this case leads to a
delicto defense
where,
plaintiffs
as a direct result of the
directly
policy
result that
contradicts U.S.
wrongdoing,
plaintiff
affirmative
bears
time.
Iraq throughout
towards
the relevant
substantially equal responsibility
at least
not
policy
towards
did
treat
it com
for the RICO violations which
collectively complicit in the
Iraqi state as
(internal
ante,
Maj.
plains.”
Op.,
Regime’s сonduct. From the be-
Hussein
omitted).
quotation
citations and
marks
recognized
sanctions
ginning, the economic
recognized
that have
the in
Other circuits
in-
exception for “donations of articles
an
context,
in the RICO
pari delicto defense
suffering,
human
such as
tended to relieve
however, did so in circumstances where
food, clothing,
sup-
medicine and medical
allowing
plaintiff to recover “under
strictly
pur-
for medical
plies intended
violators of
RICO would not divest RICO
12,722
2(b);
§
poses.” Exec. Order No.
ill-gotten gains; it would result
their
2048;
586C(b),
§
104 Stat. at
see also
among similarly situated
wealth transfer
12,724
2(b),
§
Fed.
Exec. Order No.
Comm.
Unse
conspirators.”
33,089
9, 1990);
Official
Res.
Reg.
(Aug.
S.C.
Edwards,
PSA,
Creditors
Inc. v.
cured
(Aug.
para.
U.N. Doc. S/RES/661
(11th Cir.2006);
1145, 1155
see
437 F.3d
1990)
“payments
(recognizing exception for
McDorman,
Rogers v.
521 F.3d
also
or humani-
exclusively
strictly
medical
(5th Cir.2008) (recognizing
de
purposes”).
premise
tarian
The core
claims where the
licto defense to RICO
Programme
Oil-for-Food
plain
not
without [the
“scheme could
work
permitted to
should be
observing
participation,”
active
tiffs’]
market,
oil on the international
sell its
not a situation where an
is
“[t]his
any
take
provided “that all States
being
de
passive
innocent or
victim
may
necessary ...
to ensure
steps that
Here,
remedy”).
a RICO
prived proceeds
[were]
sale
*34
contrast, allowing
to recover
purposes.
from” the authorized
diverted
and cor
from the individuals
8, 14,
under RICO
986,
Doc.
paras.
Res.
U.N.
S.C.
1995).
to sub
allegedly conspired
porations
(Apr.
Far
from
S/RES/986
RICO
Programme
would divest
complicit in the
vert
treating the entire state as
and would
conduct,
illegal profits,
of their
in
in the midst of violators
Regime’s
rejected
for the
compensation
Supreme
allow
ultimate vic-
rities —the
Court
alleged
suggestion
purchaser’s
tims of the defendants’
fraud.
knowledge
that “a
],
unregistered
are
securities
can[
application
pari
of the in
delicto
itself,
by
equal culpability,
constitute
even
carefully
defense demands
courts
sophisticated buyer
where the
is a
investor
specific plaintiffs alleged
scrutinize the
may
necessarily
who
protec-
not
need the
in
public
conduct
relation
relevant
tion of the
Act.”
Securities
486 U.S. at
policy.
Mufflers,
In Perma
Inc. v.
Life
108 S.Ct.
“Because the [Securities]
2063.
instance,
Corp., for
International Parts
specifiсally designed
protect
Act is
in-
Supreme
question
Court addressed the
vestors,”
reasoned,
“even
Court
where
of whether Midas Muffler franchisees who
plaintiff
participates
in
actively
the dis-
allegedly anti-competitive
knew about
securities,
unregistered
tribution of
his
agreements
clauses
their franchise
could
except
suit should not
barred”
bring
later
an antitrust claim. 392
where
U.S.
134, 140,
promoter
his role was
as a
S.Ct.
L.Ed.2d 982
“more
than as
(1968). Observing
638-39,
that “the
an
purposes of
investor.”
Id.
108 S.Ct.
best
by
antitrust
laws are
served
in- 2063.
suring
private
action will be an
demonstrating
Aside from
nar-
how
ever-present
anyone
threat
to deter
con-
rowly the in
delicto
pari
defense is cir-
templating
behavior in
business
violation
light
public policy
cumscribed in
con-
laws,”
of the antitrust
the Court declined siderations,
these decisions reflect
claims,
plaintiffs’
bar antitrust
conclud-
specificity with which the Supreme
that,
ing
light
of the economic power of
Court determines the defense’s availabili-
franchisor,
“partic-
the franchisees’
ty. The
answered in
question
these de-
ipation
voluntary in any
was not
meaning-
cisions is
simply
pari
whether the in
139-40,
ful sense.” Id. at
and controversies
them.”
Id. at
ed to ensure that the courts properly
croach areas reserved for the Allowing Repub
political branches. proceed claims to would not violate
lic’s may safely
the doctrine that U.S. nationals transactions with the
carry on business state,
recognized government of a validity agree of such
confident that the question into
ments will not be called legitimacy
based on the subsequent or its overthrow. See Guar. LUBAVITCH OF LITCH CHABAD Eisenbach, of N.Y, 304 U.S. at Trust Co. INC., COUNTY, Joseph FIELD Republic’s allowing 785. Nor would ntiffs-Appellants-Cross-App Plai any way conflict with proceed claims to ellees, doctrine, adjudicating the act of stаte since “require[] a court in
the case would not America, Plaintiff, United States to declare invalid the the United States v. foreign sovereign per official act of a territory.” own W.S. formed within its LITCHFIELD HISTORIC DISTRICT Co., Kirkpatrick & COMMISSION, Borough of Litch S.Ct. 701. Hillman, Connecticut, field, Glenn Defendants-Ap Crawford, a novel But I see no reason to embrace Kathleen pellees-Cross-Appellants, defense to application of the in notes equal responsibility for the (2) redress, foreign government pre- agreements he seeks violations illegal into under allegedly in- entered were significantly would not clusion of suit very beginning law from the does enforcement the effective terfere with —it 310-11, responsibility not establish the direct de- 108 S.Ct. Id. at the ... laws.” prong pari manded the first of the in satisfy neither here 2063. The defendants delicto defense. prongs. of these two apply To the defense the absence the defendant satisfy prong, the first To especially inappropriate “an conduct is plaintiff was an direct that the must establish here, “agent” where the is an authoritarian active, in the unlaw- voluntary participant which the subject regime “principal” of the suit.” activity that ful —to state Pinter, agent’s imputed “sins” are —is majority regime tyrannized. de- pari reflects the in requirement This any cite to—nor do I know origins in the idea does not equitable doctrine’s licto of— defense morally tainted itself decisions where party that has foreign equi- applied against has been sover- invoke the court’s in a matter cannot instance, prior government’s based on its con- Judge eign For powers. table duct, extraordinary much under the for this Court that less Learned Hand wrote here, as issue where the “unclean hands” de- circumstances closely related wrongful imputed conduct unwillingness fense is “derived from of a hu- sovereign to a involved the subversion give peculiar relief a court designed to ben- controversy program has so manitarian relief very in the suitor who foreign sovereign. people moral efit the himself as to shock the conducted have, however, rejected long efforts judge.” Art Metal Courts sensibilities Straus, Works, equitable 70 F.2d to invoke defenses Inc. v. Abraham & (2d Cir.1934) conclud- (Hand, J., agencies, and its dissent- U.S. may “applied defenses not be ing vacated and dissent such ing), original decree purpose [the to frustrate the United reh’g, the court on adopted opinion as