O'Shea Reply Brief - Foreign Official Challenge

8/7/2019 O'Shea Reply Brief - Foreign Official Challenge

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Case 4:09-cr-00629 Document 58 Filed in TXSD on 04/18/11 Page 1 of 13

IN THE UNITED STATES DISTRICT COURTFOR THE SOUTHERN DISTRICT OF TEXASHOUSTON DIVISION

UNITED STATES OF AMERICA,Plaintiff,

CRIMINAL NO. Cr-H-09-629.JOHN JOSEPH O'SHEA,Defendant.DEFENDANT O'SHEA'S REPLY TO THE RESPONSE OF THE UNITED STATES TODEFENDANT'S MOTION TO DISMISS COUNTS ONE THROUGH SEVENTEEN OFTHE INDICTMENT

I. INTRODUCTIONOn March 7, 2011, Mr. O'Shea filed his Motion to Dismiss Counts One through

Seventeen of the Indictment ("Motion") (Docket No. 47) because each of these counts restsentirely or in part on an incorrect legal conclusion that a state-owned entity is per se a"department, agency and instrumentality of a foreign government," and that its officers andemployees are "'foreign officials' within the meaning of the FCPA." Indictment, ~~ 5-6. OnMarch 28,2011, the government filed its Response. (DocketNo. 50).

II.ARGUMENTA. The Government Relies on "Prosecutorial Common Law" and Rulings from CasesThat Did Not Consider or Inadequately Considered the Meaning of Foreign Official

To support its expansive interpretation of the Foreign Corrupt Practices Act ("FCPA"),the government notes that thirty-five individuals have entered guilty pleas after being accused ofviolating the FCPA. Response at 14. The Court should give no weight to these guilty pleasbecause each individual had his or her own reasons for entering into a plea agreement with thegovernment. As long as FCPA defendants-both individuals and corporations-enter into non-prosecution agreements, deferred prosecution agreements, and plea agreements, the government


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will continue to build its arsenal of "prosecutorial common law" to support its aggressive andslanted interpretation of the FCPA.' Yet court acceptance of plea agreements does not convertthe government's pronunciations on the law into sources of legal authority. Indeed, thegovernment's strategy of creating its own would-be common law threatens to strip the federalcourts of their judicial power to interpret the FCPA.

The federal courts, and not the Department of Justice nor any other division of theexecutive branch, are the [mal arbiters of what the FCPA actually provides. See U.S. Const. art.III, 1; Marbury v. Madison, 1 Cranch 137, 177 (1803) ("It is emphatically the province and

duty of the judicial department to say what the law is."); United States v. Nixon, 418 U.S. 683,704 (1974) (Judicial power "can no more be shared with the Executive Branch than the ChiefExecutive, for example, can share with the Judiciary the veto power, or the Congress share withthe Judiciary the power to override a Presidential veto," and sharing of powers "would becontrary to the basic concept of separation of powers and the checks and balances that flow fromthe scheme of a tripartite government"). The Court should reject the government's attempt tobootstrap its own expansive interpretation of the FCPA into the statute through "prosecutorialcommon law."

The denial of two past motions to dismiss similarly provides no support for thegovernment's broad reading of "instrumentality" in the FCPA's foreign official provision. Thegovernment cites to orders issued by the district courts in the Eastern District of Pennsylvaniaand the Southern District of Florida on challenges to the FCPA's "foreign official" provision.Response at 14. But these orders denied the motions to dismiss with little or no substantiveanalysis of the FCPA and its foreign official provision, and without the benefit of the analysis of1 See Bingham's Michael Levy on the Rise ofProsecutorial Common Law, 25 Corporate Crime Reporter 6, Feb. 7,2011, available at 4ttp:llwww.corporatecrimereporter.com/michaellevy020711.hhn (describing what author hascalled "prosecutorial common law") (hereinafter referred to as "Levy Interview").

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legislative history offered in the parties' briefing in this case. Response Exs. H, 1. A more recentdenial of a motion to dismiss, issued by the Honorable A. Howard Matz in United States v.Aguilar Noriega, et al., No. 10-1031 (C.D. Ca. 2011), was apparently tied to the court'sunderstanding that a fact dispute existed with regard to Comisi6n Federal de Electricidad("CFE")'s "governmental function." That ruling, far-from endorsing the government's positionon the scope of "foreign official" in the FCPA, supports the inquiry that Mr. O'Shea requestsinto the nature and role of CFE within the Mexican government.

Similarly, while jury instructions are irrelevant when the issue at hand was not consideredby the issuing court, Mr. O'Shea has located jury instructions submitted to the jury in a trial inthe Southern District of Texas after the issue was well-argued and associated facts presented inthe district court. In United States v. McLean, Cr. H-82-224 (S.D. Tex. 1985), the juryinstructions defined "instrumentality of a foreign government" to mean "any entity created,owned, or controlled by a foreign government to achieve a governmental purpose or function."Ex. 1, Excerpt from Rudolf B. Schlesinger et al., Comparative Law: Cases, Text, and Materials78 (New York, Foundation Press, 6th ed. 1998) (quoting the jury instructions given inMcLean).

Thus, the government's attempt at creating a prosecutorial common law aside, it can citeno authorities in support for its position, while the courts that have looked closely at the issuehave adopted analyses focused on sovereignty or government function.B. The Government Takes Conflicting Positions on How to Define "Instrumentality,"But Apparently Accepts a "Governmental Function" Test

The government asserts on the one hand that in order to show that CFE is aninstrumentality, it is entitled to the opportunity to present further facts related to the nature ofCFE and the government's ownership and/or control over the utility. Response at 2. It asserts

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on the other hand that it need only plead, as it has, that CFE is an electric utility owned by thegovernment of Mexico that supplies electricity to the public. Response at 5.In the end, the government does not and cannot provide a concrete definition for

"instrumentality" as used in the FCPA; it never articulates the test to make such determinations.It never defmes what makes something a "state-owned enterprise," sufficient to render it an"instrumentality" under the FCPA. It asks instead that the Court accept its judgment that in anycase, CFE employees are within the definition of foreign official.

This is deliberate ambiguity on the government's part, and flies in the face of Skilling v.United States, 130 S. Ct. 2896,2927 (2010), which holds that the statute must be construed in amanner that does not render it unconstitutionally vague, something that can only be done if"instrumentality" is construed to encompass bona fide government entities.

Just as the government's position within this case is uncertain, the government has ahistory in suits inwhich the sovereign status of an entity becomes an issue of taking the mostadvantageous position in each suit. In fact, while the government has since indicted defendantsfor paying bribes to employees ofPemex, in the past, the government has successfully argued theopposite position that this Mexican state-owned corporation similar to CFE was not an"instrumentality" under common law and the Restrictive Theory of Sovereign Immunity(superceded in the 1970's by the Foreign Sovereign Immunities Act). See Ex. 2, United States v.Tug PemexXV, 1 AMC 896,1960 WL 99004 (S.D. Tex. Jan. 14, 1960).C. Officers and Employees of a State-Owned Entity Are Not "Foreign Officials" Where

the Entity is a Commercial Enterprise Whose Function is not GovernmentalThe government attempts to refute the canon that "instrumentality" is best understood by

noticing what the other words in the series=-department and agency-have in common witheach other (noscitur a sociis). It does so by arguing that state-owned corporations are really very

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rates is strictly limited to membership on boards that make pertinent recommendations, subject toapproval. CFE makes the determination to shut off a customer's electricity for non-payment, butMexican courts have determined that such an act is not a state action ("acto de autoridad'y, and asuit against CFE complaining of such action sounds in contract, not in civil rights law("amparo,,).3D. The FCPA's Legislative History Supports a Narrow Reading of "Instrumentality,"

or the Application of the Rule of LenityThe government asserts that the legislative history surrounding the FCPA does not

expressly adopt Defendant's narrow reading of "instrumentality," but it misses the point.Legislative history sources reflect that in passing the statute, Congress was concerned with bribes

materials explicitly adopts state-owned corporations as instrumentalities, and under the rule oflenity, a tie of this nature goes to the defendant. The government argues that the rule of lenity isreserved for "grievous" ambiguities, but here, where long sentences are at stake despite thescarcity of judicial interpretation of the FCPA,the ambiguity surrounding the meaning of"instrumentality" is indeed grievous.

The government's quote from legislative materials on pages 15 and 16 does not supportits position. The quotation discusses the great number of corporations involved in offeringbribes, not corporations taking such payments. The market sectors named in this material ashttp://www.pi.energy.gov/documentsINAEWGERGuideFinal.pdf (discussing tariffs); Response Ex. B at 11(discussing electricity rates).3 See Ex. 3, Translation of "Federal Electricity Commission. A Receipt Notice of Electrical Power Supply, EvenWhen Containing a Service Disconnection Warning, IsNot an Act of Authority for The Purposes OfAmparo Proceedings," Institute for Legal Research in Mexico, Aug. 2010, available athttp://www.juridicas.unam.mx/infjur/leg/jrs/jrsVer.htm?idt=29453 (explaining a Mexican court ruling that adisconnection of power service by CFE is not an act of authority that can be pursued through civil rights law-inSpanish, amparo-it is a matter of private contract); "Federal Electricity Commission, the Disconnection orSuspension of Electrical Power Supply Is Not an Act of Authority for the Purposes of Amparo Proceedings,"Institute for Legal Research in Mexico, Aug.' 2010, available athttp://www.juridicas.lmam.rnxlinfjur/leg/jrs/jrsVer.htln?idt=29454 (same).

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http://www.pi.energy.gov/documentsINAEWGERGuideFinal.pdfhttp://www.juridicas.unam.mx/infjur/leg/jrs/jrsVer.htm?idt=29453http://www.juridicas.lmam.rnxlinfjur/leg/jrs/jrsVer.htln?idt=29454http://www.juridicas.lmam.rnxlinfjur/leg/jrs/jrsVer.htln?idt=29454http://www.juridicas.unam.mx/infjur/leg/jrs/jrsVer.htm?idt=29453http://www.pi.energy.gov/documentsINAEWGERGuideFinal.pdf


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justifying the FCPA are less a list of sectors in which the government ownership is common, andmore a list of sectors that are heavily regulated, such as oil and gas, pharmaceuticals, and themanufacture of food products.E. The Government's Counterarguments in Support of a Broad Reading of

"Instrumentality" Fail1. The government's attempts to opine on the "plain and ordinary" meaning ofFCPA's "instrumentality" or to rely on other statutes' definitions is

unavailing.The government states that "[i]nstrumentality is not an uncommon word in the law."

Response at 4 (emphasis added). But the legal definition of "instrumentality" cannot be thesource for determining a word's ordinary meaning because a criminal statute must have a

The government argues alternatively that "instrumentality" should be given the meaning that isdefined in the Foreign Sovereign Immunities Act ("FSIA"), passed in 1976, and the EconomicEspionage Act. Response at I0-11. But these two definitions are themselves different: one isabout majority ownership, while the other mentions substantial ownership and control. See Mot.at 4. Moreover, the FSIA contains an important exception for commercial activity that prohibitsits application when an entity is acting more like a corporation; while approaching the problemdifferently, it therefore reflects the same interest that Mr. O'Shea has argued is incorporated intothe FCPA in separating the "commercial" from the governmental. 28 U.S.C. 1605(a)(2)(2008). The Dodd-Frank Act, meanwhile, specifically refers to state-owned entities, and

distinguishes them from "instrumentalities." See Dodd-Frank Wall Street Reform andConsumer Protection Act, Pub. L. 111-203, 124 Stat. 1376 (July 21, 2010). Indeed, as thegovernment mentions, "instrumentality" is used in the Code 1,492 times (at 4). And it is evidentthat the word "instrumentality" simply does not have an accepted legal definition.

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2. The FCPA's grease payment exception does not support a broad reading of"instrumentality"The FCPA's "routine governmental action" or "grease payment" exception provides that

routine governmental action "means only an action which is ordinarily and commonly performedby a foreign official in" among other things, "providing phone service, power and watersupply[.]" 15 U.S.C. 78dd-2(h)(4) and 2(b) (the latter permitting payments to foreign officialand others to "secure the performance of a routine governmental action by a foreign official,"among others). The government reasons that this provision of the FCPA proves that Congressintended entities that provide power supply to be foreign officials; otherwise, the mention ofpower supply would be superfluous. Response at 7. But the Court need not disagree with this in

"instrumentalities," and their employees not "foreign officials." The focus of the "foreignofficial" definition is not the nature of the service provided by the entity in question, but ratherthe nature of the entity in question. Nothing in the text of the FCPA suggests that state-ownedcorporations that are commercial enterprises can be instrumentalities-no matter what theirbusiness is. U.S.C. 78dd-2(h)(4):

Further, to the extent that the concern is reading portions of the FCPA in such a way as torender them superfluous, the FCPA provides that it shall not constitute a violation of the statuteif the person charged can prove that the payment in question constituted "a reasonable and bonafide expenditure, such as travel and lodging expenses," and that it was "directly related to (A) the

promotion, demonstration, or explanation of products or services; or (B) the execution orperformance of a contract with a foreign government or agency thereof." 15 U.S.C. 78dd-2(b)and (c). The government says the statute must be construed to give meaning to all of its parts,but it never explains why the "bona fide expenditure" affirmative defense does not extend to

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payments made to employees of government instrumentalities, but just to agencies. If state-owned corporations are included within the definition of "instrumentality," this omission makesno sense.

3. The Charming Betsy argument is inapplicable.The government also makes a Charming Betsy argument" that the Court must accept the

government's interpretation of "instrumentality" because otherwise, the United States will not bein compliance with its treaty obligations under the Organization for Economic Cooperation andDevelopment Convention on Combating Bribery of Foreign Public Officials in InternationalBusiness Transactions ("OECD Convention"). In this case, the government's contention that itsinterpretation is more consistent with the OECD Convention is not supported by the text of theFCPA, and there is no legislative history suggesting Congress intended to adopt thisinterpretation when it amended the FCPA. Indeed, the government's interpretation distorts theFCPA and its history, rendering the Charming Betsy canon inapplicable. Munoz v. Ashcroft, 339F.3d 950, 958 (9th Cir. 2003) (refusing to apply the Charming Betsy doctrine because the statutein question could not be fairly construed consistently with the treaty the plaintiff cited because"[t]he language of the statute provides absolutely no support for such a construction" and"Congress never suggested or hinted that" it meant for the statute to conformj.'

The "instrumentality" language on which the government hangs its hat has been in thestatute (and has remained unchanged) since 1977. Therefore, it is the intent of that 1977Congress, and not any subsequent Congress (none of which revised that language or otherwise4 Murray v. The Schooner Charming Betsy, 6 U.S. (2 Cranch) 64, 118 (1804) ("[A]n act of Congress ought never tobe construed to violate the law of nations ifany other possible construction remains[.]") (emphasis added).5 Nor is the OECD Convention without comment on the subject. Commentary 15 to the OECD Convention providesthat "[a]n official of a public enterprise shall be deemed to perform a public function unless the enterprise operateson a normal commercial basis in the relevant market, i.e., on a basis which is substantially equivalent to that of a .private enterprise, without preferential subsidies or other privileges." See Convention on Combating Bribery ofForeign Public Officials in International Business Transactions, available athttp://www.oecd.org/dataoecdl4118/38028044.pdf; Response Ex. D. (emphasis added).

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http://www.oecd.org/dataoecdl4118/38028044.pdf;http://www.oecd.org/dataoecdl4118/38028044.pdf;


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included state-owned entities) that matters. See Bruesewitz v. Wyeth LLC, 131 S. Ct. 1068, 1081(2011) ("Post-enactment legislative history (a contradiction in terms) is not a legitimate tool ofstatutory interpretation.") (citing Jones v. United States, 526 U.S. 227,238 (1999); United States

\v. Mine Workers, 330 U.S. 258, 281-82 (1947)). "Real (pre-enactment) legislative history" ispersuasive because it sheds light on what legislators understood the text of an ambiguous statuteto mean when voting to enact it into law. Id. at 1081-82 (citing Exxon Mobil Corp. v. AllapattahServs., Inc., 545 U.S. 546, 568 (2005)). On the other hand, post-enactment legislative history bydefmition "could have had no effect on the congressional vote." Id. (quoting District ofColumbia v. Heller, 554 U.S. 570, 605 (2008)). The government offers no "real legislativehistory" in support.

In any case it is certain that the FCPA does not completely conform to the OECDConvention. The OECD Convention does not contain an express facilitating payment exceptionlike the FCPA's. Instead, commentary 9 to the OECD Convention states that the Conventionviews facilitating payments as not relevant to obtaining or retaining business. See Convention onCombating Bribery of Foreign Public Officials in International Business Transactions, availableathttp://www.oecd.org/dataoecd/4118/38028044.pdf; Response Ex. D. Even this concession tobusiness needs is becoming less accepted by the OECD,6 but the FCPA's provision remainsunchanged.

Further, other signatories to the treaty do not accept the inclusion of state-ownedcorporations. The United Kingdom's new foreign bribery act does not include employees ofstate-owned corporations to be "foreign public officials."

The Court should therefore determine that Congress could have, but deliberately did not,6 See The End of the FCPA Facilitation Payment Exception?, http://tfoxlaw.wordpress.com/2010111/11/the-end-of-the-fcpa-facilitation-payment-exception (Nov. 11,2010).7 See An Ocean Apart, http://fcpaprofessor.blogspot.com/2011/01/ocean-apart.html (Jan. 16, 2011).

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http://athttp//www.oecd.org/dataoecd/4118/38028044.pdf;http://fcpaprofessor.blogspot.com/2011/01/ocean-apart.htmlhttp://fcpaprofessor.blogspot.com/2011/01/ocean-apart.htmlhttp://athttp//www.oecd.org/dataoecd/4118/38028044.pdf;


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bring the FCPA into perfect conformity with the OECD Convention because it chose not toadopt the "state owned enterprise" language from the OECD Convention in 1998, just as it chosenot to incorporate state-owned entities in the 1977 and 1988 amendments to the FCPA.8

4. The Use of "Any" in the FCPA Provision Does Not Support a BroaderReading of "Instrumentality"

The government also argues that Congress intended the FCPA to be interpreted broadlybecause it did not provide a definition .of "instrumentality" and the word "any" exists in theFCPA, both of which supposedly indicate that instrumentalities include state-owned entities. SeeResponse at 10.

But the word "any" merely signals that once the limits of "instrumentality" are discerned,_.__.anything_within thos_e_Jimitsjs_within_the_statute._Eurther,~'anY'''_app_ears_b_efQ1:_e_'.:_d~partm~nt,__

agency or instrumentality," and not directly before "instrumentality." "Any" therefore modifiesthe entire list within which "instrumentality" falls.

And as to the lack of a definition for "instrumentality," as seen in other statutes, Congressknows how to define "instrumentality" to include state-owned entities. Mot. at 4. For example,as the government mentioned in the Response, the Foreign Sovereign Immunities Act ("FSIA")was passed the year before the FCPA' s enactment. Response at 11. If Congress wanted todefme instrumentality to include state-owned entities, as it did in the FSIA, surely it did notforget how to do so one year later.

5. Absurdities flowing from the government's broad readings of"instrumentality" and "foreign official" are far from "hypothetical"

The government argues that the absurd results flowing from its broad reading of theFCPA are "irrelevant" and "imaginary". Response at 13-14. To the contrary, the federal8 Simultaneously with the filing of this Reply, Mr. O'Shea files a Motion to Strike the Declaration of Clifton M.Johnson because the government uses the declaration to introduce into evidence inadmissible hearsay, experttestimony, and irrelevant information related to the OECD Convention and other issues. See Response Ex. G.

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government's substantial ownership in American corporations such as General Motors is farfrom imaginary. And in Houston, the legal and business communities are keenly aware of highlyvisible foreign energy companies such as CITGO (a wholly-owned subsidiary of a Venezuelan-state-owned oil corporation, Petroleos de Venezuela S.A.) with substantial numbers ofemployees in the city, many of whom are American citizens and American-born. Thegovernment's position would make foreign officials of such employees.

III. CONCLUSIONFor all the reasons set forth in the Motion and in this Reply, Mr. O'Shea respectfully

requests that the Court dismiss Counts One through Seventeen of the Indictment.

lsi Joel AndrophyJoel AndrophyState Bar No. 01254700S.D. Tex. 53457Sarah M. FrazierState Bar No. 24027320S.D. Tex. 27980Ashley GargourState Bar No. 24065272S.D. Tex. 1040478Berg &Androphy3704 Travis StreetHouston, Texas 7'(002Telephone (713) 529-5622Facsimile (713) 529-3785Email: [email protected]: [email protected]: [email protected] FOR DEFENDANTJOHN JOSEPH O'SHEA

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mailto:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]


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CERTIFICATE OF SERVICEOn April 18, 2011, a true and correct copy of the foregoing document was served on

counsel electronically through the CM/ECF System./s/ Sarah M. Frazier

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Case 4:09-cr-00629 Document 58-1 Filed in TXSD on 04/18/11 Page 1 of 6

Exhibit 1


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Case 4:09-cr-00629 Document 58-1 Filed in TXSD on 04/18 /11 Page 3 of 6

76

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Th e C Qu rt, h ow eve r, a ff irm e d t he de (e nda nts' convic t ion o n t he co na pira cyco un t,h old in gtba tw ith re s) ', lsc t to too t e o u n t the td:al ju dg e's e rro r w ashro.-mless;ll because the COl1spiracy clearlyahned at ilIegaJl;ydealing witha rt if ac ts e :g :p o rt ed ( an d to be eXpor ted ) f ro m M e l C ic; :o f te r th e e ff ect ive dateotthe 1972statute.~O l) A sia f l'e g ue nt in roreign- l l . lw ' li tig atio n, t he M c Cl !! in case,snpra,1;!riatleaw i t hq u e a ti o ll S Q f p ro e e d ,u : re an< lpl. 'ocedj;lral tactics.

Could theproS l l l ;u to r , a sl i Ip p e l le ( 1 , ' hav e aycided the reversal.of th e C O l l ' V l C .t i on ol i I i b , , , . substantiVe cOul1tif h~had! l igued that.l!Sal'Xlatterofconatitlltion~al J aw , t h e i a au esConCe l 'n ! ll it M e xl ca n l aw haato be sUhm i t t e d to th eju ry , a ndthiit,coll.sequently,the: tdaljudge comnrltt~d l. O erro I'? . ..

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, 77D ; E xp .'E R TW I TN E S S [p, 13)

Y t ;\ U h av e} u ~a .r d t h e t es ti .m o n y o t l\ 1: ;r , I>a~d an d P ro ra sso rB aade , w hOtes tmedl lSeJq1er te in their . fi e ld a , You m a y cO l is id e tt h e il .- t S $t .im ony tod et erm i n e w h et he r Pemex was hl fact a t the t im e a 'l le g e di n th e indictmenta foreign g ove rnm en t o r instrumentality thereof, M dermed in thesein stru ctio ns. Th e testimony o f an exper t wltnessis a drn iasiqle w he re th esiibjectma.ttel ' involved requires specialstiidy, training, orekil! n o t withinthe l 'e ah no fth e o rdin ary e :!tp erie ll.C esofa la ym a n; H o w eve r, the fact t h a tan~ert opiriionisgiV'en does notmean-that.sueh.opiniou isbil1dingupolltb.ejury or that thejury i s o b li g at ed toaccept th e expsl.'t'a op in ion as-towhat the facts are. It lathe f ) l "ov i IWeof t he jury to det~rn~i' t!.etl:t .ecredibilitya nd w eig ht t ha t sh o u ld he g iven to an exp ert o p in io n in th e lig h to a ll th eevidence. Although the jury lJ l i ! l.y not arbi trarily disregard the t e s t imony ofan ex-pert~tneea,if the jury f inds that h).sopinion is ll(~tbnsE)don thef~Ct8, Or is


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78

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de f e )) d a n t. n o tgU i l t y .AI l 'UserJ jll. t l :Ieae inatrt lctIons: (pp. 21-Z2)T M t~.r~ I!to re ig no ff ich u" m ea n:sM y o icer o r emJl lqyee o i ' a fo re igng ove r :m : n en t cn : a n y dell~l:l,~,.agency,.Ol'llwt~lllelitality.thereof,or.aijporsonacting. jn ~o ff ie ia l c ap ac it y- . 0'( '.0), -OIl b eh al f .o fa u y BucI:1.govern.men. t o r d ep al '!; m en t, ~g en a jo r i ns tru m e nt ali ty ; Such term do e s no t inoludea ny ~ plo ye e o f a f o r e ignguvernme l l t o r an y dep a t tm en tJ a ge ncy, o ri l ' l .5trumental i ty th ere of ' w ho se du tie s a re .esse~tiru1yIXl in i st e r i .a1 oo t clerical.T he t.e i'in i tin stru m en ta liu y o fa fo re ig n g ov e r nmen t " me a n s any e~t i ty~reated, owned , ot' c o nt l ol Ie dh y . a fOl: 'e lgtJ .g ove rnmen t toac.hievea g ove rn -men ta l pU'rpoaeo))t'ullctjOl:\.Th o tS l ' l J1" in te l ' s t a t e c0ml


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. C~TER r r ' F O R l ! : l G l > ! L Aw n, O lm C O U R T S 79y ou . I.f yo u do n o t f in d t h a t e a( '.h o f th e facta hasbeen proved by th~ .evid6; t lCebeyonde. reasonable douht,tMn you rn ,usta.cqui t the dl"iendant.NOTE

S ee a lso , fOl. ' background.and JUl'ther 'developmen ts , Un i t ed S ta t e s v,Internatiollal H'sl ' ITester Co., 720 FJ!d 4:18(5th Cid983); : rv. tcLeanv, Tntetne.~t io li e.l B a r ve st e: rC o ., 8 1 7 F .2 d 1 ~1 4 ( 5t h C ir .1 98 7 ).

F'.nnnmer v.Hilton :Hotels Internation.a1,JJ:)c.f f~w Y() rkS l lp remeCOl! r l ; Tril!l ( tenn. , lGltgi>County ,1969.60 M Ule .2d.840, 80~ N ,.S .2d 8 .86. .B i l l MANGANo , J . In bhia neg l i g ence act io :n the. 'juryhl 'ls ret\lrne:d a v e rd ic t. infavor ofthe defendant, and thecourthas been asked by the plaint,iff to .seta s id e t h at ; d et e ~- rn i na t io n a .t )d . g r an t a.n ew ' t r ia l

(Th e o ph rio n th en . ou t l i nes th e e vide nce re ce ive d a t thet r i ru. , which .S h owed that plaintiff; whi l e a registered guel>tat defendant's h o t e l inLondon , Eng l and , 'l 'l 'a s .t h evi ct ir o ofanaccident, As h e w as t a l r i ngashower ,plaintiff s l i pped andfell in the ba th tub ,andas a result B)l fferedgerio ' l l si n ju r ie s , P l a in t i ff con te : nd s tha t t he a cc id en t w a s- du e . to d ef en da n t's f ai lu retopl'ovide a rt ).bbe r$h ow e r- .m a t( alth o 1,lg hp la in tif fh ada .sk s( Lf or B u en a.m a t),a .n dto q erf ia in defectain t h e f a ci li ti es prov.ided byth.e de f e n4a n t . ]

'" A serio u s .quj3stion o f th isotu ' t 's ju ris dict io n o ve r th is de fe nd an tW 3a r ai se d ! U 1 d u lt im a t el y r es olv ed in f av ol' ofjmisdiction by th e Cou rte f ,A pp ea 4 (1 9 N .Y .2d 533, 281 N.Y..S.2d41, 22 7 N.E.2d851) .

...Th e m otio n to se t a side th e ju dgm en t e n te red u p o n thejulj"sverdict lS ba sed; u p on two g ro u p,ds. Th e first is th a t th e coUr t fai led toch arg ep ro pe ;rly.th e re le va nt p ro visio ns o f E n gH a h law, part l .cularJ . ;y theOccup i e rs ' LiabiJityAct o f 1957 (5 and 6 E l1z . 2 , c. 31), a nd second, t h a tc er ta in p h ot og ra p hi c e vt dl'l :n cewasim p rop e i:ly exclud(;!d. .[ Th e c o u.r t f o u nd both o f th eae . i l : r g t u n eh tS to p e without insr i t . JD urin g th e co u rse o f th e co u rt 'a re se a rch . on theQccupie.~a 'L iabi l io /Act , the court becar ,nea :ware of @ issuel1{)h raise~ by plaintilrariounBsLItkth~t conh ' ibutorynegl igel1ce i an o ta . d ef en sa to .t hi il a1 lt lo n under Eng l i shi aw . . Tha t C bl1 ntry h as a do pte d. a co m pa ra tive .n eg llg ellce statute whichredu ce s a p la in tif f '.sda ma ge s t .O th e exte n t th a t Il l~n t if fca :n h esa id to b eresponsible fo r hia o wn fn ju rie s .. The sta tu te -e n ti( ; le dth e L aW R efo rm(Contributory Neg l i gence) Act (8 and gGe!) ..VI.,e. 28)~bec:am6Iaw in1945,and providesin per l i n en tpa r t (S.l) as.fol lows:(I ) w here a ny p erso n s uf fe rs dam ag e a s th e resul t pa r t ly o f h i$o w nfau l t al ld~ar t J ,y ofth~ f au l t o f a ny o th er p erso n orpers0r l B 1 a.cla tm inl.'e sp e ct .o f th a t dam ag e sh a ll n o t be de fe a ted by reason ~f th e fau lt o fth e p erso n su :ff e rin g th e dam ag e , bu t th e dam ag e s recoverable inrespect t h e reo f sh all be reduced to suchextent l lS t he co u rt th in ,l ts ju st


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Exhibit 2


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UNITED STATES, Libellant, VS. TUG PEMEXXV, IN REM, 1960 WL 99004 (1960)1960 A.M.C. 896

1960 A.M.C. 896

American Maritime CasesUNITED STATES DISTRICT COURT, SOUTHERNDISTRICT OF TEXAS GALVESTON DIVISION

UNITED STATES, Libellant,vs.TUG PEMEX XV, IN REM AND BARGE PEMEX559, IN REM, AND PETROLEOS MEXICANOS,IN PERSONAM, AND THE HOUSTON PILOTBOAT NO.1, IN REM, Respondents.IN ADMIRALTY - 2067January 14,1960

JURISDICTION - 135. Sovereign States, SovereignImmunity.Under the current executive policy adhering to the"restrictive theory" of-sovereign-immunity, a-government-owned corporation, engaged in the production, refining,and distribution of petroleum, and its vessels are notentitled to the defense of sovereign immunity in the courtsof the United States.

JURISDICTION 1423. Foreign GovernmentMerchant Vessels.Vessels owned and operated by a Government-ownedcorporation, engaged in the production, refining, anddistribution of petroleum products, are not in thepossession and ownership of the foreign sovereign,' and,accordingly, are not entitled to the defense of sovereignimmunity in the courts of the United States.

Attorneys and Law FirmsCARL C. DAVIS and ALAN RAYWID, Attys.,Admiralty and Shipping Section, Dept. of Justice, forLibellant.E. V. GREENWOOD (FULBRIGHT, CROOKER,FREEMAN, BATES & JAWORSKI, on Brief), forRespondent.STATEMENT.This suit, brought against Petroleos Mexicanos, aMexican government-owned corporation, and its vesselsTug Pemex XV and Barge Pemex 559 seeks damages of$50,000.00 arising out of a collision on February 12,1958, between the Pemex vessels and a United StatesCoast Guard vessel in Galveston Bay, Texas, an area

within the territorial waters of the United States. At thetime of the collision Pemex XV was towing astern theBarge Pemex 559 on a voyage from Houston, Texas, toTampico, Mexico, Transporting a cargo of steel drill pipepurchased in the United States and for use in one ofPemex's new installations.The respondent Petroleos Mexicanos is a corporationwhich was created by executive order of the MexicanGovemment in 1938, and ' 1 : 8 9 7 is engaged in theproduction, refining, and distribution of petroleumproducts.Petroleos Mexicanos appeared specially and excepted tojurisdiction claiming sovereign immunity on the groundthat the corporation was a branch of the MexicanGovernment, a friendly foreign sovereign, and as such, isnot amenable to suit in the court of the United States. TheUnited States answered the exception to jurisdictionasserting that Petroleos Mexicanos and its vessels are notentitled to sovereign immunity, since the vessels at thetime of the collision were not in the ownership orpossession of the Mexican Government but ,were:ownedand operated by the independent corporation PetroleosMexicanos, and, moreover, the granting of sovereignimmunity is governed by the current executive policy,which adheres to the "restrictive theory" of sovereignimmunity, i.e., distinguishes between vessels engaged in apublic and governmental function and vessels employedin private commercial activity, allowing immunity only incases in the public, governmental category."BEN C. CONNALLY, D.J.:INTERLOCUTORY ORDER In Rem AND In Personam.The above-entitled cause, having come on regularly fordecision upon motion of respondent Petroleos Mexicanosfor an order of dismissal based on allegation of sovereignimmunity, and the Court having considered said motiontogether with the affidavit of counsel for respondent, theattached documents submitted by the respective parties, aswell as the briefs submitted on behalf of libellant UnitedStates and respondent Petroleos Mexicanos, and beingotherwise fully informed of the matters involved.And, after due deliberation, the Court having entered itsfinding on the Motion Calendar on December 30, 1959,NOW, THEREFORE, IT IS HEREBY ORDERED thatthe motion of respondent Petroleos Mexicanos to dismisson the basis of sovereign immunity is denied, andIT IS FURTHER ORDERED that respondent PetroleosMexicanos is directed to file its written claims to the TugPemex XV and the Barge Pemex 559, and plead to thelibel herein by February 15, 1960.

\!'/s5tl2\vNexf@ 2011 Thomson Reuters. No claim to original U.S. Government Works. 1


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Case 4:09;.cr-00629 Document 58-2 Filed in TXSD on 04/18 /11 Page 3 of 3

UNITED STATES, Libellant, VS. TUG PEMEX XV, IN REM... , 1960 WL 99004 (1960),------------1960 A.M.C. 896Done at Houston, Texas, this 14th day of January, 1960. Parallel Citations[NOTE: The claim stated in the libel for collision wassettled. - EDS.] 1960 A.M.C. 896

Copyright (c) 1960 by American Maritime Cases, Inc.Footnotesa1 See State Department Bulletin which immediately follows. - EDS.

End of Document 20 1 iT hom so n R eu te rs , N o c la im t o o rig in al U ,S . G o ve rnm en t W o rk s,

Westl2v;,Ne


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Exhibit 3


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Case 4:09-cr-00629 Document 58-3 Filed in TXSD' on 04/18/11 Page 20f 54100Sp r ing VdlleyRd., S U i te 2 03

Dallas, IX 75244Telephone: (214j -256-9222

Fax: (214h256. ;9301www.akorbi.com

April 18, 20U

CERTIFICA.TE OF AC0URACYThetUidersignedcertify that-to the bes t of bur knowledge, the translation provided by Akorbi LanguageC ( jl ls u lt in g i nt o .E l 1g l is h , o f the S pa nish do cu m en t p ro vide d by Berg &Androphyistrtie, co m p le te , a ndaC,cura t e .AHt ra l i~ la t ions h aN e be en pe t f o011 ed f o l l owing ou r IS O 9001:20QO cert if ied qua.l i ty a ssurancepl 'ocess tMt in .c]ude~pr6fe ss io l1a t a r tdqua l i : f i ed t ra n s l at o rs ,e d 1t o l's .a n 'd p r, o o fr ea .d e ts ..

TlIiscettification.pertai:ns totbef611owiug:Instituto de.lnyestig~ciones.Jul1idicas.2ENGDISII_;FINALInstitutodeIn.vestiga.ciones Juridicas(2)ENGLISH_FINAL.Akotl)i Jobnulilber:BYOOOlT0417.

Al1tllorizedSignafure

S TA.TE O F TE XAS.J)ALLA.SCOUN'I;Y .T il is in s tr tlmen t wa s ac knOv ,r leQg e fo r eme o n A pril 18 th , 201.1 . by] .ahe ICagle o f E la .h i .EllterfJiises,In c ',d Jja ,: t\ l< o rb i,.a T ex a sC o rp o 1 'a ti on o n b eh a lf o fs a id c or p or at io n . .
http://www.akorbi.com/http://www.akorbi.com/


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Case 4:09-cr-00629 Document 58-3 Filed in TXSD on 04/18/11 Page 3 of 5L~'(-'L;,A. '.JLJ . J , . t . . R..

Further reflection leads this Court to abandon the opinion that the FederalElectricity Commission is an authority for the purposes of amparoproceedings regarding the determination and collection of electrical powersupply services, due to the fact that: 1) the relationship between the partiesoriginates from a meeting of minds whereby the service provider and the useracquire reciprocal rights; this is governed by private law, which regulates therelationship between the provider and the individual; 2) the legal relationshipexisting between the parties is not that of an authority and the governed(superordinate/subordinate), but rather a relationship of coordination betweenthe decentralized agency and the individual service user; and 3) shutting offthe electrical power supply due to noncompliance by the user does notconvert the relationship of coordination into that ofsuperordinate/subordinate; it merely implies the possibility that the partybeing affected may discontinue the contract service, exercising the legitimateright to suspend the performance of their obligation to which such party isentitiedunder anycontractuai relationshipwhen the other party faiis tocomply (as it happens in private law contracts, in matters of insurance,telephone services, credit cards and others), without this entailing anenforcement procedure intended to collect the debt through coercivemechanisms (e.g. seizure of property), for which it would be necessary toturn to the ordinary courts of justice. In that sense, not every action taken bya public administration agency or the application of contractual clausessuspending obligations in the event of noncompliance by the other partyconstitute an act of authority for the purposes of amparo proceedings, butrather only those that entail the exercise of administrative power, whichgrants the authority some attributes of such magnitude that they trigger asuperordinate/subordinate relationship in that matter. In that sense, thereceipt notice of electrical power supply issued by the Federal ElectricityCommission, even when containing a service disconnection warning, is notan act of authority for the purposes of amparo proceedings.Code: 2a.!J., No.: 112/2010Contradiction of opinion 318/2009. Among those upheld by the SixteenthCircuit Second Associate Court of Administrative and Labor Matters, theTwenty-First Circuit First Associate Court of Criminal and AdministrativeMatters, the Twenty-First Circuit Second Associate Court of Criminal andAdministrative Matters, and the Ninth Circuit First Associate Court. October7,2009. Majority of four votes. Dissenting judge: Genaro David G6ngoraPimentel. Court opinion written by Judge: Margarita Beatriz Luna Ramos.Clerk: Fernando Silva Garda.1 Appeal for rel ief under the Constitut ion, with no direct equivalent in the American judicial system.


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Case 4:09-cr-00629 Document 58-3 Filed in TXSD on 04/18/11 Page 4 of 5Case law opinion 112 /2010 . Approved by the Second Chamber of this HighCourt in private session on August eighteen, two thousand and ten.Type: Case Law by ContradictionSubjects:Administrative Law.Procedural Law.

Copyright, (C)2011 IIJ-UNAMInstitute for Legal Research of UNAM2Circuito Maestro Mario de la Cueva sin, Ciudad Universitaria, CPo04510, Mexico, D.F.Ph. (52) (55) 56-22-74-74, Fax. (52) (55) 56-65-21-93

2 National Autonomous University of Mexico


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Case 4:09-cr-00629 Document 58-3 Filed in TXSD on 04/18/11 Page 5 of 5INSTITUTE FOIt LEGAL RESEARCII

Upon further reflection, this Second Chamber concludes that shuttingoff or suspending the contracted flow of electrical power due to lack oftimely payment cannot be considered, on its own, an act of authority forthe purposes of amparo proceedings. This is because, when dealingwith contractual relationships, it is common to agree that the partyinjured by the other party's noncompliance shall cease to perform itsobligations. Generally speaking, contracts are governed by the parties'will and by bilateralism whereby one party's noncompliance triggers theother party's right to set aside their own obligation as long as thenoncompliance with the meeting of minds persists. Therefore,disconnection of the electrical power supply by the Federal ElectricityCommission does not convert the contract relationship between theuser and said agency into an act of authority.Code: 2a./J., No.: 113/2010Contradiction of-opinion 31812009 . Among-those upheld-by theSixteenth Circuit Second Associate Court of Administrative and LaborMatters, the Twenty-First Circuit First Associate Gourt of Criminal andAdministrative Matters, the Twenty-First Circuit Second Associate Courtof Criminal and Administrative Matters, and the Ninth Circuit FirstAssociate Court. October 7,2009. Majority of four votes. Dissentingjudge: Genaro David G6ngora Pimentel. Court opinion written by Judge:Margarita Beatriz Luna Ramos. Clerk: Fernando Silva Garcia.Case law opinion 113 /2010 . Approved in private session by the SecondChamber of this High Court on August eighteen, two thousand and ten.Type: Case law by ContradictionSubjects:Administrative Law.Procedural Law.

Copyright, (C)2011 IIJ-UNAMInstitute for Legal Research of UNAM2Circuito Maestro Mario de la Cueva s/n, Ciudad Universitaria, CPo04510, Mexico, D.F.Ph. (52) (55) 56-22-74-74, Fax. (52) (55) 56-65-21-93

1 Appeal for rel ief under the Constitut ion, with no direct equivalent in the American judicial system.2 National Autonomous University of Mexico

O'Shea Reply Brief - Foreign Official Challenge

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