(Pro Hac Vice) Additional counsel on next page · 2014-05-23 · Case 1:13-cv-07074-GBD Document 41 Filed 05/23/14 Page 2 of 34 Timothy B. Fleming (Pro Hac Vice) Of Counsel WIGGINS

Case 1:13-cv-07074-GBD Document 41 Filed 05/23/14 Page 1 of 34

UNITED STATES DISTRICT COURTSOUTHERN DISTRICT OF NEW YORK

x

FIONA HA VLISH, individually andon behalf of the ESTATE OFDONALD G. HA VLISH, JR.,Deceased, et al.,

Petitioners,

v.

ROYAL DUTCH SHELL PLCCarel van Bylandtlaan 302596 HR The HagueThe Netherlands,

Respondent.

Filed by ECFNo. 13-cv-7074 (GBD)

Judgment Debtors:Islamic Republic of IranNational Iranian Oil CompanyIslamic Revolutionary Guard CorpMinistry of PetroleumAyatollah Ali Hosenei KhameneriAli Akbar Hashemi RafsanjaniMinistry of Information and SecurityNational Iranian Tanker CorporationNational Iranian Gas CompanyNational Iranian Petrochemical Co.Ministry ofEcon. Affairs & FinanceMinistry of CommerceMinistry of Defense & Armed ForcesIran AirlinesCentral Bank of IranHezbollah

x

PLAINTIFFS' MEMORANDUM IN OPPOSITION TO ROYAL DUTCH SHELL'SMOTION TO DISMISS THE PETITION AND STRIKE THE RESTRAINING NOTICE

Stuart H. Singer, Esq. (Pro Hac Vice)William S. Dzurilla, Esq. (Pro Hac Vice)BOIES, SCHILLER & FLEXNER LLP401 East Las Olas Boulevard, Suite 1200Fort Lauderdale, FL 33301Telephone: (954) 356-0011Facsimile: (954) 356-0022E-mail: [email protected]: [email protected]

Michael Gottlieb, Esq. (Pro Hac Vice)BOIES, SCHILLER & FLEXNER LLP5301 Wisconsin Ave., NWWashington DC 20015Telephone: (202) 237-2727Facsimile: (202) 237-6131Email: [email protected]

Lee Wolosky, Esq. (Bar no. W-1280)BOIES, SCHILLER & FLEXNER LLP575 Lexington AvenueNew York, NY 10022Telephone: (212) 446-2300Facsimile: (212) 446-2350Email: [email protected]

Richard D. Hailey, Esq. (Pro Hac Vice)RAMEY & HAILEY LAW9333 North Meridian Street, Suite 105Indianapolis, IN 46260Telephone: (317) 582-0000Facsimile: (317) 582-0080E-mail: [email protected]

Additional counsel on next page

mailto:[email protected]






Timothy B. Fleming (Pro Hac Vice)Of CounselWIGGINS CHILDS PANTAZIS FISHER

GOLDFARB PLLC1850 M Street, N.W., Suite 720Washington, D.C. 20036Telephone: (202) 467-4489Facsimile: (205) 314-0805Email: [email protected]

Stephen A. Corr, Esquire (Pro Hac Vice)STARK & STARK, P.C.777 Township Line Road, Suite 120Yardley, PA 19067Telephone: (267) 907-9600Facsimile: (267) 907-9659Email: [email protected]

Robert M. Foote, Esq. (Pro Hac Vice)FOOTE, MIELKE, CHAVEZ & O'NEIL, LLC10 West State Street, Suite #200Geneva, IL 60134Telephone: (630) 232 7450Facsimile: (630) 232 7452Email: [email protected]

Attorneys for Petitioners

Dennis G. Pantazis (Pro Hac Vice)WIGGINS CHILDS P ANTAZIS FISHER

GOLDFARBLLCThe Kress Building301 Nineteenth Street NorthBirmingham, AL 35203Telephone: (205) 314-0531Facsimile: (205) 314-0731Email: [email protected]

David C. Lee, Esq. (Pro Hac Vice)LAW OFFICE OF DAVID C. LEE800 S. Gay Street, Suite 700Knoxville, TN 37902Telephone: (865) 247-9736Facsimile: (865) 381-1638Email: [email protected]







TABLE OF CONTENTS

TABLE OF AUTHORITIES ii

I. BACKGROUND 1

II. THIS COURT HAS SUBJECT MATTER JURISDICTION OVER THISEXECUTION ACTION AGAINST THE ASSETS OF AN ADmDGED SPONSOROF TERRORISM 2

A. Assets of an Adjudged Terrorism Sponsor, Such As NIOC, Are Subject toExecution Wherever Found 3

B. Even If Petitioners Are Only Entitled to Execute on NIOC Assets in theUnited States, Petitioners Are Entitled to Discovery on the Situs of the Assets .....9

III. THIS COURT HAS PERSONAL JURISDICTION OVER SHELL 10

A. This Court Has Personal Jurisdiction Over Shell Because Shell is "Essentiallyat Home" in New York or At Least in the United States as a Whole 10

1. This Court Has General Jurisdiction Under Bauman 12

2. Shell's Massive Affiliations With New York and the United States as aWhole Make Shell "At Home" Here 14

a. Shell's New York and U.S. Affiliations Are Extensive 14

b. Shell is Essentially At Home in New York and the UnitedStates 16

B. Shell Cannot Escape U.S. Jurisdiction By Operating Through Subsidiaries ......... 17

1. Shell's Subsidiaries Lack Independence and Distinctness 17

2. Shell's U.S. Subsidiaries Are Shell's Agents 18

3. Shell's Subsidiaries Are Alter Egos or "Mere Departments" of Shell.. .... 21

C. This Court Also Has General Personal Jurisdiction Over Shell Because ShellHas Consented to be Sued Here 23

D. Petitioners Are At Least Entitled to Jurisdictional Discovery .23

IV. Comity Does Not Require Dismissal of This Execution Action 24

CONCLUSION 26


TABLE OF AUTHORITIES

Autotech Tech. LP v. Integral Research & Dev. Corp.,499 F .3d 737 (7th Cir. 2007) 7

Ball v. Metallurgie Hoboken-Overpelt, SA.,902 F.2d 194 (2d Cir. 1990) 9

Barriere v. Cap Jaluca Leading Hotels,2014 WL 652831 (S.D. Fla. Feb. 19,2014) 13, 20

Beja v. Jahangiri,453 F.2d 959 (2d Cir. 1971) 10

Bellikoffv. Eaton Vance Corp.,481 F.3d 110 (2d Cir. 2007) 6

Bellomo v. Pennsylvania Life Co.,488 F. Supp. 744 (S.D.N.Y. 1980) 19

Bialek v. Racal-Milgo, Inc.,545 F. Supp. 25 (S.D.N.Y.1982) 21

Burger King Corp. v. Rudzewicz,471 U.S. 462 (1985) 17

Caminetti v. United States,242 U.S. 470 (1917) 4

Cicippio-Puleo v. Iran,353 F.3d 1024 (D.C. Cir. 2004) 6

Crawford Fitting Co. v. JT Gibbons, Inc.,482 US 437 (1987) 5

Daimler A G v. Bauman,134 S. Ct. 746 (2014) 10, 20

Dardana Ltd. v. Yuganskneftegaz,317 F.3d 202 (2d Cir. 2003) 11

Dorchester Financial Securities, Inc. v. Banco BRJ, SA.,722 F.3d 81 (2d Cir. 2013) 9,23

11


Estate of Heiser v. Islamic Republic of Iran,807 F. Supp. 2d 9 (D.D.C. 2011) 1

Filartiga v. Peiia-Irala,630 F.2d 876 (2d Cir. 1980) 2

Flatow v. Bank Saderat Iran,308 F.3d 1065 (9th Cir. 2002) 6

Flatow v. Islamic Republic of Iran,999F. Supp.1 (D.D.C.1998) 3

Frummer v. Hilton Hotels Int'l Inc.,19 N.Y.2d 533 (1967) 19

Gelfand v. Tanner Motor Tours, Ltd.,385 F.2d 116 (2d Cir. 1967) 19

George v. Uponor Corp.,2013 WL 6801219 (D. Minn. 2013) 21

George v. Uponor Corp.,2014 WL 1431194 (D. Minn. 2014) .20, 23

Gundlach v. IBM Japan, Ltd.,No. 11-CV-846 (CS), 2013 WL 6123627 (S.D.N.Y. Nov. 21, 2013) 22

In re Parmalat Securities Litigation,414 F. Supp. 2d 428 (S.D.N.Y. 2006) 12

In re South African Apartheid Litigation,643 F. Supp. 2d 423 (S.D.N.Y. 2009) 11

JW Oilfield Equipment, LLC v. Commerzbank AG,764 F. Supp. 2d 587 (S.D.N.Y. 2011) 8

Landoil Res. Corp. v. Alexander & Alexander Servo Inc.,918 F.2d 1039 (2d Cir. 1990) 12

Levin V. Bank of NY,No. 09-CV5900, 2011 WL 812032 (S.D.N.Y. Mar. 4, 2011) 1

Liberty Property Trust V. Republic Properties Corp.,577 F.3d 335 (D.C. Cir. 2009) 19

111


Ministry of Defense and Support for Armed Forces of Islamic Republic of Iran v.Cubic Defense Systems, Inc.,2013 WL 6231403 (S.D. CaL 2013) 5

Morris Plan Industrial Bank of New York v. Gunning,295 N.Y. 324(1946) 10

Mwani v. Laden,947 F. Supp. 2d 1 (D.D.C. 2013) 8

Palmieri v. Estefan,793 F. Supp. 1182 (S.D.N.Y. 1992) 21

Perkins v. Benguet Consolidated Mining Co.,342 U.S. 437 (1952) 16

Peterson v. Islamic Republic of Iran,2013 WL 1155576 (S.D.N.Y. 2013) 11, 25

Rates Technology Inc. v. Broadvox Holding Co.,2014 WL 46538 (S.D.N.Y. 2014) 13

Rosario v. US.,625 F. Supp. 2d 123 (S.D.N.Y. 2008) 20

Sonera Holding B. V v. Cukurova Holding A.S.,_ F.3d _,2014 WL 1645255 (2d Cir. Apr. 25, 2014) 20

STX Panocean (UK) Co., Ltd. v. Glory Wealth Shipping Pte Ltd.,560 F.3d 127 (2d Cir. 2009) 23

Tiffany (NJ) LLC v. Forbse,2012 WL 1918866 (S.D.N.Y. 2012) 8

US v. Ron Pair Enterprises, Inc.,489 U.S. 235 (1989) 4

US v. Swiss American Bank, Ltd.,191 F.3d 30 (1st Cir. 1999) 11

Volkswagenwerk Aktiengesellschaft v. Beech Aircraft Corp.,751 F.2d 117 (2dCir. 1984) 21

Wiwa v. Royal Dutch Petroleum Co.,226 F. 3d 88 (2d Cir. 2000) 13

IV


Statutes

28 USC 1355(b)(2) 8

28 USC 1605A passim

28 USC 1605(a)(7) 4

28 USC 1610(a) passim

28 USC 1610(g) 5

Other Authorities

Born & Vollmer, The Effect of the Revised Federal Rules,150 F.R.D. 221 (1993) 11

House Conf. Report,H.R. Conf. Rep. No. 110--477, at 1001-02 (2007) 7

Paust, Permissible Self-Defense Targeting and the Death of Bin Laden,39 Denv. J. Int'l L. & Pol'y 569 (2011) 8

Restatement (3d) of U.S. Foreign Relations Law § 402 2

Restatement (3d) of U.S. Foreign Relations Law § 404 8

Terrorism Act 2000 (UK) §§ 12, 17,63 25

Wright & Miller, Federal Practice and Procedure § 1068.1 11

v


Petitioners, judgment creditors Fiona Havlish, et al., oppose the motion for dismissal of

respondent Royal Dutch Shell pic ("Shell").

I. BACKGROUND

This Court entered a judgment, the validity of which is not challenged by Shell, which

found that the Islamic Republic of Iran ("Iran") and its agents, including the National Iranian Oil

Company ("NIOC"), are sponsors of terrorism within the meaning of28 USC 1605A and are

liable under to Petitioners for aiding and supporting the terrorist attacks of September 11, 2001.

NIOC is admittedly owed over $2.3 billion by Shell or wholly owned Shell subsidiaries, and

Petitioners seek to execute on this debt, in partial satisfaction of this Court's $6 billion judgment

against NIOC.

In response to the petition, Shell could have remained neutral, or at least interpleaded the

funds at issue, as Sprint and others have done in cases against Iranian agencies.' Instead, Shell

has opted to attempt to block petitioners from obtaining the funds that NIOC is undisputedly

owed and that Shell undisputedly controls.

Even more surprisingly, Shell argues for dismissal, before any discovery, on the basis of

arguments that read restrictions into unambiguous statutory language, and that rely on the

unsupported "understanding" of a non-lawyer. Shell also claims this Court lacks personal

jurisdiction, even though it is by revenue the world's largest company, with 22,000 employees in

the U.S., hundreds of billions of dollars of business in New York and throughout the United

States, and multi-billion dollar refineries, pipelines, terminals, wells, plants, and other major

facilities from New York to the Gulf of Mexico to Alaska.

1 See Estate of Heiser v. Islamic Republic of Iran , 807 F. Supp. 2d 9, 17 (D.D.C. 2011); Levin v. Bank ofN Y,No. 09-CV5900, 2011 WL 812032, at *2 (S.D.N.Y. Mar. 4, 2011).

1


Shell leans heavily on "sovereign immunity" and "customary international law," but it

completely ignores that NIOC is an adjudged sponsor of terrorism, with responsibility for the

worst terrorist attack on record for both persons (nearly 3,000 deaths) and property ($40 billion

in damages). Terrorists, including terrorist states and their instrumentalities, have no sovereign

immunity and no rights under customary international law. Like the torturer, pirate, and slave

trader, the terrorist is "hostis humani generis, an enemy of all mankind." Filartiga v. Peiia-Irala,

630 F.2d 876,890 (2d Cir. 1980),z

Accordingly, Shell's motion should be denied. This Court has subject matter jurisdiction

to execute on NIOC's assets, even on assets located outside the U.S. In any event, Petitioners

are entitled to discovery to determine where the assets are located. And this Court has general

personal jurisdiction over Shell, which has affiliations with New York and the United States that

are so continuous and systematic as to render it "essentially at home" in New York and/or the

United States, and which has consented to be sued here. Finally, "comity" does not oblige this

Court to refrain from ordering the turnover of the NIOC assets, and U.S. statutes mandate such

an order.

II. THIS COURT HAS SUBJECT MATTER JURISDICTION OVER THISEXECUTION ACTION AGAINST THE ASSETS OF AN ADJUDGED SPONSOROF TERRORISM

Shell contends that this Court lacks subject matter jurisdiction, on the basis of two

contentions: 1) assets of an instrumentality of a sovereign are not subject to execution unless

located within the USA, even if the sovereign has committed and been held liable for terrorist

acts, and 2) the assets at issue, debts owed by Shell (or at least entities wholly owned by Shell) to

2 See Restatement (3d) of U.S. Foreign Relations Law § 402, comment g (principle that a state may apply its law toforeign acts "is increasingly accepted as applied to terrorist and other organized attacks on a state's nationals").

2


NIOC, are not located in the USA. Shell's motion must be denied if either of these contentions

is incorrect.

A. Assets of an Adjudged Terrorism Sponsor, Such As NIOC, Are Subject toExecution Wherever Found

NIOC has no right to any immunity under U.S. law or customary international law. The

U.S. Congress has repeatedly acted to strip state sponsors of terrorism of any "immunity" they

might otherwise have under the Foreign Sovereign Immunities Act ("FSIA"). In 1996 Congress

created the "state sponsored terrorism exception" to the FSIA to permit U.S. victims of terrorism

to bring civil suits against terrorist states. After a federal court interpreted this exception

narrowly, Congress passed the "Flatow Amendment," which created an express federal cause of

action against terrorists. See Flatow v. Islamic Republic of Iran , 999 F. Supp. 1, 12 (D.D.C.

1998). However, some courts gave this new cause of action a narrow construction, and in 2008

Congress felt compelled to act yet again. Congo Rec. S54-55 1/22/08 (S. Lautenberg- sponsor

of bill).

In 2008, as part of the National Defense Appropriations Act ("NDAA"), Congress

enacted a broad new provision designed to aid plaintiffs who, like plaintiffs in this case, have

obtained a judgment under 28 U.S.C. § 1605A, which provides a federal cause of action against

terrorist states such as Iran. The new provision, 28 U.S.C. § 1610(g), clearly provides that "the

property of an agency or instrumentality of such a state, including property that is a separate

juridical entity or is an interest held directly or indirectly in a separate juridical entity, is subject

to attachment in aid of execution, and execution .... " 28 U.S.C. § 1610(g)(1).

Prior to the 2008 enactment of28 U.S.C. § 1610(g), section 1605Ajudgments against

state-sponsored terrorists could, just like judgments against non-terrorist states, only be satisfied

by execution against property in the United States: "The property in the United States of a

3


foreign state ... shall not be immune from attachment in aid of execution, or from execution,

upon a judgment entered by a court of the United States or of a State ... if ... the judgment

relates to a claim for which the foreign state is not immune under [the FSIA's terrorism

exception]. 28 U.S.C. § 1610(a)(7) (emphasis added);' see also id. § 1610(b) (under specified

conditions, "any property in the United States of an agency or instrumentality of a foreign state

engaged in commercial activity in the United States shall not be immune from attachment in aid

of execution, or from execution") (emphasis added).

Shell admits that, unlike §§ 1610(a) & (b), § 1610(g) does not contain an "in the United

States" limitation. Shell Brief at 10. Shell only argues that the same limitation should

nevertheless be read into § 1610(g), to give adjudged terrorists the benefit of "sovereign

immunity" and the "presumption against extraterritorial effect of U.S. statutes." Id. Shell's

interpretation of § 1610(g) ignores the language of the statute, the FSIA statutory scheme as a

whole, the legislative history, and simple common sense.

The language of § 1610(g) is plain and unambiguous: "the property of an agency or

instrumentality of [a state adjudged liable for terrorist acts under § 1605A], including property

that is a separate juridical entity or is an interest held directly or indirectly in a separate juridical

entity, is subject to attachment in aid of execution, and execution .... " Nothing in the statutory

language limits this provision to property located in the U.S. Where, as here, the statutory

language is unambiguous, the words of the statute must be given their plain and ordinary

meaning. US v. Ron Pair Enterprises, Inc., 489 U.S. 235, 241 (1989) (quoting Caminetti v.

United States, 242 U.S. 470, 485 (1917) (where statutory language "is plain ... the sole function

3 Prior to 2008, the terrorism exception was at 28 USC 1605(a)(7). The 2008 legislation broadened the exceptionand moved it to 28 USC 1605A.

4


of the courts is to enforce it according to its terms, ... and the rules which are to aid doubtful

meanings need no discussion").

This rule applies fully to § 1610(g): "The plain language of the statute supports a broad

reading. Section 1610(g) allows attachment of any 'property of a foreign state against which a

judgment is entered under section 1605A'." Ministry of Defense and Support for Armed Forces

of Islamic Republic of Iran v. Cubic Defense Systems, Inc., 2013 WL 6231403, *18 (S.D. CaL

Nov. 27, 2013) (emphasis added). As put by another court:

Courts generally presume that Congress is knowledgeable about existing lawpertinent to the legislation it enacts. Yet, in crafting the broad remedial languageof § 1610(g), Congress made no exceptions to its reach, despite the fact that theplain language of the Act undeniably reaches transactions otherwise authorized byOFAC regulations .... [T]he Court cannot ignore that a core purpose of theNDAA is to significantly expand the number of assets available for attachmentin satisfaction of terrorism-related judgments under the FSIA. As already setforth above, the language of § 1610(g) is broad and without reservation; indeed,this Court has explored the "broad remedial purposes" of the NDAA, explainingthat § 1610(g) "demonstrate [s] that Congress remains focused on eliminatingthese barriers that have made it nearly impossible for plaintiffs in these actions toenforce civil judgments against Iran or other state-sponsors of terrorism." In lightof these strong remedial purposes, the Court will not now read a significantexception into § 1610(g) that is not otherwise found in the text and that wouldseverely undercut the unmistakable goals of Congress.

Estate of Heiser, 807 F. Supp. 2d at 25-26 (emphasis added, citations and quotations omitted).

If there were any doubt about § 161O(g)' s applicability to a terrorist's assets outside the

U.S., it would be resolved by comparing its language with that of §§ 1610(a) & (b), which

pertain to execution on assets of non-terrorist states, and which both contain an "in the United

States" limitation. This comparison clearly shows that Congress knows how to limit the

territorial scope of an FSIA execution provision when it chooses to do so, and it declined to do

so here. See Crawford Fitting Co. v. JT Gibbons, Inc., 482 US 437, 442 (1987) (express limits in

other statutes made it "clear that when Congress meant to set a limit on fees, it knew how to do

5


so"); Bellikoffv. Eaton Vance Corp., 481 F.3d 110, 116 (2d Cir. 2007) ("Congress's explicit

provision of a private right of action to enforce one section of a statute suggests that omission of

any explicit private right to enforce other sections was intentional") (quotation omitted).

Courts have already rejected the notion that limitations in § § 161O(a) & (b) limit the

scope of § 1610(g). For example, even though §§ 1610(a) & (b) limit execution to property used

in "commercial activity," § 1610(g) has been held to have no such limitation. Cubic Defense

Systems, supra, 2013 WL 6231403 at *18; Estate of Heiser, 807 F. Supp. 2d at 19 n.8. Nor do

OFAC regulations limit the reach of § 1610(g), even if the garnishee has a U.S. government

license to do business with an Iranian agency. Estate of Heiser, 807 F. Supp. 2d at 25-26.

The legislative history of § 1610(g) further demonstrates Congress' intent not to place

territorial limitations on its scope. As the Estate of Heiser court has outlined in great detail,

Congress included § 1610(g) in the NDAA in 2008 with a "core purpose" of "significantly

expand[ing] the number of assets available for attachment in satisfaction of terrorism-related

judgments under the FSIA." 807 F. Supp. 2d at 26. Congress enacted § 1610(g) to overrule the

restrictive interpretation some courts had given to § 1610(g). As the sponsor of the legislation

explained, "this legislation is essential to providing justice to those who have suffered at the

hands of terrorists and is an important tool designed to deter future state-sponsored terrorism.

The existing law passed by Congress in 1996 has been weakened by recent judicial decisions.

This legislation fixes these problems." Congo Rec. S54-55 1/22/08 (S. Lautenberg)." Thus,

§ 1610(g) was broadly "written to subject any property interest in which the foreign [terrorist]

state enjoys a beneficial ownership to attachment and execution," subject only to a court's

inherent authority to protect the rights of innocent third parties, and treaties on diplomatic

4 Sen. Lautenberg gave several examples of cases his bill was intended to overrule, including Cicippio-Puleo v.Iran, 353 F.3d 1024 (D.C. Cir. 2004) (finding no private right of action) and Flatow v. Bank Saderat Iran, 308 F.3d1065 (9th Cir. 2002) (finding no right to execute against property ofIranian bank).

6


property such as embassies. House Conf. Report, H.R. Conf. Rep. No. 110--477, at 1001-02

(2007) (emphasis added). Nothing in the legislative history even remotely suggests any intent to

limit the territorial scope of § 161O(g). 5

In light of the plain language of the statute, the FSIA statutory scheme as a whole, and

the legislative history, Congress has provided far more than the "hint" of intent necessary to

overcome the presumption of domestic-only application required by the case law Shell cites,

Shell Brief at 11 (citing Autotech Tech. LP v. Integral Research & Dev. Corp., 499 F.3d 737,

750-51 (7th Cir. 2007) (construing a different statutory section, § 1610(a), which, as discussed

above, is expressly limited to assets "in the United States")). Shell's position should therefore be

rejected.

Shell complains that "no court has ever interpreted [§ 161O(g)] to lift immunity with

respect to property in other countries." Shell Brief at 12. This is technically true, but neither has

any court interpreted § 1610(g), which applies solely to the property of terrorists, as only limited

to assets located in the United States. The only case Shell cites for this proposition did not

involve extraterritorial assets. Shell quotes the case as stating, "judgment creditors can now

reach any U.S. property in which Iran has any interest," but the very next sentence reads: "the

only requirement for attachment or execution of property is evidence that the property in

question is held by a foreign entity that is in fact an agency or instrumentality of the foreign state

against which the Court has entered judgment." Estate of Heiser v. Bank of Tokyo Mitsubishi

UFJ, 919 F. Supp. 2d 411,417 (S.D.N.Y. 2013) (emphasis added, quotations omitted).

5 President George W. Bush vetoed this legislation the first time it was passed by Congress because it allowedjudgments for Iraqi state-sanctioned terrorism to be satisfied by assets of the post-Saddam Hussein government. Theonly "legislative history" cited by Shell is a statement by President Bush, not by Congress, that the bill would "riskthe freezing of substantial Iraqi assets in the United States--including those of the Development Fund for Iraq(DFI), the Central Bank ofIraq (CBI), and commercial entities in the United States in which Iraq has an interest."Resp. Auth. 6, at 1641. The president's expression of concern regarding these specific U.S. assets, undercircumstances very different than those present here, is hardly proof that other assets, outside the United States, wereintended by Congress to be beyond the legislation'S reach.

7


Similarly meritless is Shell's contention that extraterritorial application of § 1610(g)

would violate international law. Even in ordinary commercial disputes where the judgment

debtor is not a terrorist, in appropriate circumstances a U.S. court may allow the judgment

creditor to execute on debtor property located outside the United States. See, e.g., JW Oilfield

Equipment, LLC v. Commerzbank AG, 764 F. Supp. 2d 587 (S.D.N.Y. 2011) (German bank

ordered to tum over judgment debtor's German-based bank account balance to judgment

creditor); Tiffany (NJ) LLC v. Forbse, 2012 WL 1918866, *12 (S.D.N.Y. 2012) (injunction

restraining assets in Chinese bank account); see also 28 USC 1355(b )(2) ("Whenever property

subject to forfeiture under the laws of the United States is located in a foreign country, ... an

action or proceeding for forfeiture may be brought" in federal court).

Moreover, while U.S. court orders may have extraterritorial effect even in ordinary

litigation, extraterritorial action is afortiori legal under international law where, as here, it is

directed against terrorist states. The law of nations is founded on the premise that sovereign

states will "settle their international disputes by peaceful means in such a manner that

international peace and security, and justice, are not endangered" and to refrain "from the threat

or use of force against the territorial integrity" of any other state. U.N. Charter, art. 2. Where, as

here, a sovereign and its instrumentalities flagrantly breach this duty by committing terrorist acts

causing massive deaths and destruction, the victims are entitled to take reasonable and

proportionate measures against the terrorists, regardless of location. See Mwani v. Laden, 947 F.

Supp. 2d 1,5 (D.D.C. 2013) (U.S. statute given extraterritorial effect against terrorists who

bombed U.S. embassy in Kenya).6 This Court should reject Shell's contention that the assets of

6 UN. Charter, art. 51; Restatement (3d) of US. Foreign Relations Law § 404, comment a ("universal jurisdictionis increasingly accepted for certain acts of terrorism, such as ... indiscriminate violent assaults on people at large").Paust, Permissible Self Defense Targeting and the Death of Bin Laden, 39 Denv. 1. Int'l L. & Pol'y 569 (2011)(U.N. Charter permits extraterritorial response to terrorism).

8


NIOC, an adjudged sponsor of terrorism, are entitled to any type of sovereign immunity from

execution.

B. Even If Petitioners Are Only Entitled to Execute on NIOC Assets in theUnited States, Petitioners Are Entitled to Discovery on the Situs of the Assets

As shown above, § 1610(g) permits Petitioners to execute on NIOC assets regardless of

their location. In any event, Petitioners are entitled to discovery on the location issue. The Form

20-F that Shell filed with the SEC in 2012 states that "we have approximately $2,336 million

payable to, and $11 million receivable from, National Iranian Oil Company." Petition (DE 1)

Ex. L (DE 1-10) at 51. The form makes no mention of SITME, STIL, or the location of the

assets. With so much at stake and so little public information about Shell's corporate structure

and operating procedures, discovery is needed before any conclusions are drawn about the situs

of the debt. Shell is not entitled to summary dismissal on the basis of an untested declaration.

As the Second Circuit has repeatedly held:

Prior to discovery, a plaintiff challenged by a jurisdiction testing motion maydefeat the motion by pleading in good faith, legally sufficient allegations ofjurisdiction. At that preliminary stage, the plaintiff's prima facie showing may beestablished solely by allegations. After discovery, the plaintiff's prima facieshowing, necessary to defeat a jurisdiction testing motion, must include anaverment of facts that, if credited by the trier, would suffice to establishjurisdiction over the defendant. At that point, the prima facie showing must befactually supported.

Dorchester Financial Securities, Inc. v. Banco BRJ, SA., 722 F.3d 81,84 -85 (2d Cir. 2013)

(quoting Ball v. Metallurgie Hoboken-Overpelt, SA., 902 F.2d 194, 197 (2d Cir. 1990)).

Shell relies on a declaration from Mr. Bjorn Fermin, who alleges that two obscure Shell

subsidiaries, SITME and STIL, which allegedly do no business in the U.S., are the entities that

owe the money to NIOC. Declaration of Bjorn Fermin ("Fermin Decl.") ~~ 13-15. However,

SITME has stated that North America is one of its "major markets." Declaration of James

9


McCoy ("McCoy Decl.") ~ 6, Ex. 4. Petitioners are entitled to discovery to test Shell's contrary

allegations and to examine, for example, how and where the contracts arose, whether any funds

or oil flowed to the United States, and the terms of the contracts, including whether payments

were designated in dollars. Shell has made no showing that these two subsidiaries operate as

independent companies such that jurisdiction, if found over RDS, is not sufficient for execution

on the Iranian assets in question.

Moreover, even if the debt is owed by a foreign entity, the situs of the debt "may be

wherever the debtor may be found and sued." Fletcher's Cyclopedia of Corporations § 4736;

Beja v. Jahangiri, 453 F.2d 959,963 (2d Cir. 1971) (foreign insurer properly found and sued in

NY could be garnished for insurance proceeds payable to foreign residents as a result of foreign

accidents); Morris Plan Industrial Bank of New York v. Gunning, 295 N.Y. 324, 330 (1946)

(under NY law, a judgment creditor may attach "a debt to a nonresident from a foreign

corporation provided the foreign corporation can be personally served in New York").

Petitioners allege that the Shell debt to NIOC is owed by an entity that may properly be sued and

served here, and no further showing is required at this early stage of the litigation. Therefore, at

the very least, Shell's motion should be denied as premature.

III. THIS COURT HAS PERSONAL JURISDICTION OVER SHELL

A. This Court Has Personal Jurisdiction Over Shell Because Shell is"Essentially at Home" in New York or At Least in the United States as aWhole

Shell is indisputably present and open for business in New York and the U.S.

Notwithstanding that reality, Shell argues that this Court lacks personal jurisdiction, supposedly

because it only has "attenuated or sporadic" New York affiliations. Shell Brief at 17. Not so.

Shell's New York affiliations are "so continuous and systematic as to render it essentially at

home" in New York. Daimler AG v. Bauman, 134 S. Ct. 746, 749 (2014). And even if Shell's

10


New York contacts were deemed insufficient, this Court would still have personal jurisdiction

under Rule 4(k)(2), Fed. R. Civ. P., because at the least Shell's affiliations with the United States

as a whole make Shell "at home" in the USA as a whole.

Shell's brief does not mention Rule 4(k)(2), which provides:

For a claim that arises under federal law, serving a summons or filing a waiver ofservice establishes personal jurisdiction over a defendant if: (A) the defendant isnot subject to jurisdiction in any state's courts of general jurisdiction; and (B)exercising jurisdiction is consistent with the United States Constitution and laws.

Under Rule 4(k)(2), "a defendant sued under federal law may be subject to jurisdiction

based on its contacts with the United States as a whole, when the defendant is not subject to

personal jurisdiction in any state ... so long as the exercise of jurisdiction comports with the Due

Process Clause of the Fifth Amendment." Dardana Ltd. v. Yuganskneftegaz, 317 F.3d 202,

207 (2d Cir. 2003) (remanding for discovery on nationwide contacts). See In re South African

Apartheid Litigation, 643 F. Supp. 2d 423,429-31 (S.D.N.Y. 2009); Wright & Miller, Federal

Practice and Procedure § 1068.1.

Rule 4(k)(2) is a type of "federal long-arm statute," under which the "defendant's

national contacts take center stage because the ... federal courts draw jurisdictional authority

from the federal sovereign [and] the applicable constitutional requirements devolve from the

Fifth rather than the Fourteenth Amendment." US v. Swiss American Bank, Ltd., 191 F.3d 30,

36 (1st Cir. 1999). In applicable cases, Rule 4(k)(2), when combined with new provisions on

extraterritorial service of process, "authorizes world-wide service of process and a national

contacts analysis in all federal question cases." Born & Vollmer, The Effect of the Revised

Federal Rules, 150 F.R.D. 221, 227 (1993).

An action for execution on a judgment under § 1605A of the FSIA is a federal claim

within the meaning of Rule 4(k)(2). Peterson v. Islamic Republic of Iran , 2013 WL 1155576,

11


*17 (S.D.N.Y. 2013). Under Rule 4(k)(2), the question thus is whether Shell has the "requisite

aggregate contacts with the United States as a whole." Id. at *15 (finding personal jurisdiction in

New York over foreign garnishees holding Iranian assets, and ordering turnover of such assets);

see also In re Parmalat Securities Litigation, 414 F. Supp. 2d 428,442 (S.D.N.Y. 2006) ("due

process analysis looks to defendant's contacts with the United States as a whole, rather than with

the forum state specifically'Y'

Rule 4(k)(2) applies to all federal claims if "the defendant is not subject to jurisdiction in

any state's courts of general jurisdiction." Shell does not contend that any other state has

jurisdiction over this matter.f As it would be unduly burdensome to require a plaintiff to prove

affirmatively that the defendant is not subject to general jurisdiction in any of the 50 states, most

courts have held that Rule 4(k)(2) confers jurisdiction "so long as a defendant does not concede

to jurisdiction in another state." Mwani, 417 F .3d at 11 (citing cases ).9

1. This Court Has General Jurisdiction Under Bauman

In Bauman, the Supreme Court refined the traditional test for general jurisdiction: no

longer is a foreign company's "continuous and systematic activity" in the forum enough by itself

for all-purpose jurisdiction; instead, the defendant's affiliations with the forum must be "so

continuous and systematic as to render it essentially at home." 134 S. Ct. at 749. Also, while the

7 Shell acknowledges that this Court has personal jurisdiction if Shell 1) does business in New York with a "fairmeasure of permanence and continuity," Landoil Res. Corp. v. Alexander & Alexander Servo Inc., 918 F.2d 1039,1043 (2d Cir. 1990), and 2) the exercise of jurisdiction comports with constitutional requirements under Bauman.Shell Brief at 17-18. Plaintiffs submit that Shell's New York affiliations satisfy these tests, but it may not benecessary for the Court to decide this issue because, even if Shell's New York contacts are insufficient, under Rule4(k)(2) the Court has jurisdiction if Shell's nationwide contacts are constitutionally sufficient.8 If Shell concedes or the Court finds that Shell is subject to jurisdiction in another state, such as Delaware (the stateof incorporation of many of Shell's US. subsidiaries) or Texas (the site of Shell's investor relations office and theprincipal place of business of many of Shell's subsidiaries), Rule 4(k)(2) would not apply, but the proper course inthat case would be transfer under 28 USC § 1404, not dismissal, if Shell's New York contacts are found inadequate.9 Although most courts have applied the Mwani presumption, some courts have required plaintiffs invoking Rule4(k)(2) to certify that, based on available information, the defendant is not subject to suit in the courts of generaljurisdiction of any state. E.g., South African Apartheid, 643 F. Supp. 2d at 429. Plaintiffs so certify because, ifShell's New York contacts are insufficient, Shell's contacts with other states would not likely be sufficient, althoughShell's aggregate US. contacts would be.

12


Court made no holding as to when the forum contacts of a subsidiary could be imputed to a

foreign parent, the Court suggested in dicta that such contacts could be attributed under the alter

ego theory and perhaps under an agency theory, although the Court indicated that the Ninth

Circuit's particular application of agency theory was too "sprawling" to be acceptable. Id. at

759-60. Bauman thus "undoubtedly limit[s] the application of general jurisdiction to foreign

defendants [but should not be viewed] as mandating the complete casting off' of prior authority.

Barriere v. Cap Jaluca Leading Hotels, 2014 WL 652831, at *9 (S.D. Fla. Feb. 19,2014).

In light of Shell's New York and United States affiliations, this case is plainly

distinguishable from Bauman. In Bauman, Argentinian plaintiffs sought jurisdiction in the U.S.

courts in order to hold a German company liable for actions in Argentina. Here, by contrast,

Petitioners are U.S. citizens who seek to enforce a final judgment, entered by a U.S. court,

predicted on a terrorist attack that took place in New York, and they do not seek to impose

liability on Shell for anything. Instead, Petitioners seek only a turnover of funds that Shell

admittedly would be paying to NIOC.

This case is less similar to Bauman than it is to a prior case in which the Second Circuit

held that Shell's predecessor was subject to general jurisdiction in this Court. In that case, the

court found that Shell and its U.S. subsidiaries "have a physical presence in the forum state, have

access to enormous resources, face little or no language barrier, have litigated in this country on

previous occasions, have a four-decade long relationship with one of the nation's leading law

firms, and are the parent companies of one of America's largest corporations, which has a very

significant presence in New York." Wiwa v. Royal Dutch Petroleum Co., 226 F. 3d 88, 99 (2d

Cir. 2000); accord, Rates Technology Inc. v. Broadvox Holding Co., 2014 WL 46538, *5

(S.D.N.Y.2014). So too, here, Shell is "at home" in New York, or at least in the United States

13


as a whole. The New York and U.S. affiliations of Shell's subsidiaries are imputable to Shell,

under any reasonable reading of the Bauman dicta and Second Circuit authority.

2. Shell's Massive Affiliations With New York and the United States as aWhole Make Shell "At Home" Here

a. Shell's New York and U.S. Affiliations Are Extensive

Shell is the world's largest company, in terms of gross revenue. Petition ~ 3. Shell's

wholly-owned U.S. subsidiaries are active in all 50 states, employing over 22,000 employees,

and operating about 25,000 Shell-branded service stations nationwide. Petition ~ 11. Operating

through at least 1,268 subsidiaries, McCoy Decl. at ~ 9, Ex. 6, all using the famous red and gold

"pecten" logo, Shell asserts that it "has no operations of its own" (Fermin Decl. ~ 5) and its

"principal activity is being the parent company for ShelL" Petition Ex. L at 161.

The scope and extent of Shell's U.S. and New York affiliations are far greater than what

is typically seen in a personal jurisdiction case. With $87.5 billion in annual revenue from its

U.S. operations, McCoy Deci. at ~ 11, Ex. 8 at 8, Shell runs a "vast U.S. network" of pipelines

and terminals. Id. at ~ 13, Ex. 10. Compare, e.g., South African Apartheid, 643 F. Supp. 2d at

436 ("The notion that a company may do [$100 million] of business in the United States without

anticipating application of general jurisdiction is implausible at best"). Shell-branded service

stations are in all 50 states, a total of 25,000 nationwide. McCoy Deci. ~ 14, Ex. 11. Shell has

major production facilities, refineries and/or chemical plants in Texas, California, Washington,

Wyoming, Pennsylvania, Alaska, and Louisiana. Petition Ex. L at 26-27,39-40. One Shell

Square in New Orleans is the tallest building in all of Louisiana, and One Shell Plaza is the third

tallest building in Houston.

Although incorporated abroad, Shell "is owned to a very large extent by U.S. institutional

Shareholders," such as Fidelity (FMR), Capital Group, T. Rowe Price, Dodge & Cox, Franklin

14


Resources, BlackRock, and others. McCoy Deci. ~ 15, Exs. 12 and ~ 17, Ex. 14. Four of Shell's

largest seven shareholders, and 27% of all Shell shareholders, are American. Id. at ~ 17, Ex. 14

at 20 and ~ 10, Ex. 7 at 1. And many of Shell's "European" shareholders are merely foreign

subsidiaries of American companies, such as BNY Mellon, Chase, and State Street. Id. at ~ 12,

Ex. 9 at 180. On the New York Stock Exchange, $25-30 billion worth of Shell shares are traded

daily, with two classes of stock and 14 series of Shell-guaranteed notes. Id. at ~ 17, Ex. 14 at 20;

Declaration of Ken Lawrence ("Lawrence Decl.") ~ 4. Shell's "presentation and functional

currency is US dollars," and dividends are paid in U.S. dollars. Petition Ex. L at 44, 161.

Over half of the worldwide Shell service stations are in the USA. In 2012,38% of

Shell's worldwide expenditures for oil and gas exploration and production were in the United

States, and 38% of Shell's ethylene capacity was here. Id. at 29,37. As an example of the

magnitude of Shell's U.S. presence, in 2012 Shell paid $1.9 billion for 2,200 square kilometers

(849 square miles) of Texas acreage "rich in oil and natural gas." Id. at 21.

Moreover, Shell is omnipresent throughout New York. Its wholly owned subsidiaries

have offices in Manhattan, Brooklyn, Albany, and Syracuse. '0 Shell service stations are in every

city and town. As mentioned above, 14 series of Shell-guaranteed notes and two classes of Shell

ADR shares are traded on the NYSE. Lawrence Decl. ~ 4. Shell products are traded on the New

York Mercantile Exchange ("NYMEX"). McCoy Deci. ~ 5, Exs. 2-3.

To manage risk, Shell is an active participant in the trading of options and futures

commodities contracts on the NYMEX exchange. Shell is a large player on the commodities

market, and at least one Shell entity is a corporate member of NY MEX, which is the largest

physical commodity futures exchange and preeminent forum for energy in the world. McCoy

Deci. ~ 5, Exs. 2-3.

10 McCoy Decl. ~ 18, Ex. 15 (Syracuse and Albany) and ~ 19, Ex. 16 (Manhattan and Brooklyn).

15


At least eight prominent Shell subsidiaries, including Shell Oil Company, are registered

with the New York Department of State to do business and have appointed an agent for the

service of process in New York. One Shell entity filed with the Department of State and

appointed a registered agent as recently as February 4,2014. McCoy Deci. ~ 4, Ex. 1.

b. Shell is Essentially At Home in New York and the United States

In Bauman, the Supreme Court stated that "continuous and substantial activity" is not

alone enough, that domicile and principal place of business are enough, and that other types of

contacts may be enough, if a corporation's operations in a forum are "so substantial and of such a

nature as to render the corporation at home in that State." 134 S. Ct. at 761 n.19. As an example

of a situation where a company could be deemed "at home" in a jurisdiction other than its place

of domicile or principal place of business, the Court cited Perkins v. Benguet Consolidated

Mining Co., 342 U.S. 437 (1952), where the Court held that the courts in Ohio could exercise

general jurisdiction over a Philippine company with its principal place of business in the

Philippines, because the company's foreign operations had been disrupted by war and its

business was being run from a small Ohio office.

However the courts ultimately refine the Bauman test, Shell will fall comfortably within

its scope. Whatever Bauman means, it cannot be read to preclude all courts in the United States

from exercising general jurisdiction over the world's largest company, a company that profits

from access to the U.S. markets to the tune of some $87.5 billion in annual revenue, with over

22,000 U.S. employees, service stations in all 50 states, huge facilities and operations in many

states, whose securities and commodities are traded daily in huge numbers on exchanges a few

miles from this Court, and substantial other U.S. connections, as outlined above.

By many measures, the USA is Shell's principal place of business. As discussed above,

over half of the world's Shell stations are here, 38% of Shell's worldwide expenditures for on oil

16


and gas exploration and production are here, and 38% of Shell's ethylene capacity is here. The

touchstone of due process is fundamental fairness, Burger King Corp. v. Rudzewicz, 471 U.S.

462,470 (1985), and patently there is no unfairness at all in treating Shell as a defacto U.S.

domiciliary.

B. Shell Cannot Escape U.S. Jurisdiction By Operating Through Subsidiaries

1. Shell's Subsidiaries Lack Independence and Distinctness

Although Shell's declarations claim that its numerous subsidiaries are "independent,"

available information indicates otherwise, and discovery has not yet occurred. Employees of one

Shell entity work for others, as Shell corporate lines are blurred and crossed. For example, Shell,

the only publicly-traded entity in the Shell group, has an investor relations office in Houston,

TX, which is staffed by employees of Shell subsidiaries Shell Oil Company and Shell Canada

Services Ltd. Lawrence Decl. ~ 8. The exact nature of the relationships between Shell and its

subsidiaries is not clear, but the company presents itself to the world as a unitary, highly-

integrated entity.

Shell itself has no employees, but the brochure that Shell apparently gives to new

employees of its subsidiaries does not even mention the name of their formal employer; it refers

to Shell as "our company," to Shell's CEO as "our CEO," and to Shell as a singular "vertically

integrated oil company." McCoy Decl. ~ 16, Ex. 13 at 1-4. According to the brochure, Shell's

"upstream" business has always been centralized, with "detailed technical and financial direction

coming from the central offices in The Hague." And, although historically the local

"downstream" businesses had more autonomy, today such autonomy "has been largely

removed." Id. at 2.

Shell has a "single risk based control framework," the "Shell Control Framework," to

identify and limit risks. This control framework governs all Shell companies in which the parent

17


has a direct or indirect controlling interest. Fermin Decl., Ex. F at 2, Ex. D at 1.

Shell's press statements and reports usually do not even mention the name of the

pertinent subsidiary or any of the subsidiary's officers, and the spokesman and decision maker is

typically Shell's own CEO or another officer of the parent. For example, "Energy giant Royal

Dutch Shell pic (NYSE:RDS.A) has shelved plans to build a $12.5 billion natural gas-to-diesel

conversion plant in Louisiana .... Shell CEO Peter Voser said, 'We are making tough choices

here, focusing our efforts and capital on the most attractive opportunities in our worldwide

portfolio to add value for shareholders. '" McCoy Decl. at ~ 20, Ex. 17. Shell CEO Voser was

also spokesman for the announcement that "Royal Dutch Shell" planned to start production in

North American "tight oil" reserves. Id. at ~ 21, Ex. 18. And it was Mr. Voser's successor, Ben

van Beurden, who recently announced that "Royal Dutch Shell" would not pursue its effort to

drill in Alaska during 2014, because he was "frustrated" by a court decision and was not

prepared to commit further money and employee time to the project. Id. at ~ 22, Ex. 19.

2. Shell's U.S. Subsidiaries Are Shell's Agents

Shell admits that the presence of a subsidiary in the forum renders the parent subject to

general jurisdiction if the subsidiary is an "agent" or "mere department" of the parent. Shell

Briefat 19. These are two different tests. Shell argues its U.S. subsidiaries are not "mere

departments" under the four-factor test Gundlach test, but it ignores the separate agency test,

except to say that its ownership of its U.S. subsidiaries is not, standing alone, sufficient to make

the subsidiaries agents of Shell for personal jurisdiction purposes. Shell Brief at 19-20. It is true

that ownership alone is not enough, but here there is much more.

Under the Second Circuit's traditional agency test, Shell's subsidiaries are

unquestionably Shell's agents and the New York and U.S. affiliations of the subsidiaries are

imputable to ShelL The Second Circuit has long adhered to the rule that a foreign corporation is

18


subject to all-purpose New York jurisdiction if its subsidiary acts as its "New York

representative entity and that New York representative renders services on behalf of the foreign

corporation that go beyond mere solicitation and are sufficiently important to the foreign entity

that the corporation itself would perform equivalent services if no agent were available." Wiwa,

226 F.3d at 95. Under this rule, "a plaintiff need demonstrate neither a formal agency

agreement, nor that the defendant exercised direct control over its putative agent. The agent must

be primarily employed by the defendant and not engaged in similar services for other clients."

Id. (citations omitted).

Wiwa followed the Second Circuit's earlier decision in Gelfand v. Tanner Motor Tours,

Ltd., 385 F.2d 116,120-21 (2d Cir. 1967) and the New York Court of Appeals opinion in

Frummer v. Hilton Hotels Int'l Inc., 19 N.Y.2d 533,537 (1967). Gelfand held that New York

residents injured on a tour bus in Arizona could sue the foreign tour operator in New York,

because a New York company acted as sales service representative for the foreign tour company

and accounted for approximately 3,000 of the 7,000 total annual passenger reservations on the

tour. Frummer found general New York jurisdiction over Hilton Hotels (U.K.) Ltd., a British

corporation, because it used Hilton Reservation Service, which had an office in New York, to

accept and confirm room reservations at the London Hilton.

Shell's subsidiaries have a far larger New York presence and do far more work for Shell

than did the agent companies in Wiwa, Gelfand, and Frummer. As Shell is merely a holding

company that "has no operations of its own," Fermin Decl. ~ 5, the business of the subsidiaries

"constitutes the only business of the parent" and thus "there is no basis for distinguishing

between the business of the parent and the business of the subsidiaries." Liberty Property

Trust v. Republic Properties Corp., 577 F.3d 335,341-42 (D.C. Cir. 2009) (quoting Bellomo v.

19


Pennsylvania Life Co., 488 F. Supp. 744, 746 (S.D.N.Y. 1980) (jurisdiction based on

subsidiary's local activities if plaintiffs could prove the subsidiary was a "mere instrumentality

of the parent"). Under the rationale of these cases, this Court plainly has personal jurisdiction

over Shell.

The Wiwa-Gelfand-Frummer line of authority should remain binding law following

Daimler AG v. Bauman. See Sonera Holding B. V v. Cukurova Holding A.S., _ F.3d _,2014

WL 1645255, *4 (2d Cir. Apr. 25, 2014) ("we need not consider whether the agency principles

announced in Wiwa survive in light of Daimler"). The Bauman Court's comments about agency

were, at most, not necessary to the decision, and therefore constitute dicta. Thus, this Court

remains bound by more than 45 years of controlling Second Circuit precedents - and it is for the

Second Circuit to say otherwise. See, e.g., Rosario v. US., 625 F. Supp. 2d 123, 130 (S.D.N.Y.

2008) ("whether Koon undermines Restrepo is for the Second Circuit to decide; this Court

remains bound by its authority").

Post-Bauman cases have agreed that prior authority should not be cast aside. See

Barriere v. Cap Jaluca Leading Hotels, 2014 WL 652831, at *9. Barriere was a suit against an

Anguillan company by Texas citizens for injuries at the defendant's resort in Anguilla. The

court concluded that, notwithstanding Bauman, Florida could exercise general jurisdiction by

virtue of the defendant's presence in Florida via a Miami sales agent, Miami asset management

agent, and Miami sales reservation agent. See also George v. Uponor Corp., 2014 WL 1431194,

*2 (D. Minn. 2014) (notwithstanding Bauman, foreign parent subject to personal jurisdiction in

subsidiary's principal place of business).

The Supreme Court's criticism (in dicta) of the Ninth Circuit's version of agency theory

is inapposite in the Second Circuit. Bauman held that the Ninth Circuit's agency theory

20


purported to "subject foreign corporations to general jurisdiction whenever they have an in-state

subsidiary or affiliate." 134 S. Ct. at 749. That has never been so in the Second Circuit. See,

e.g., Volkswagenwerk Aktiengesellschaft v. Beech Aircraft Corp., 751 F.2d 117, 120 (2d Cir.

1984) ("the presence of a local corporation does not create jurisdiction over a related, but

independently managed, foreign corporation"). Even if, in light of Bauman, the Second Circuit

limits imputation of a subsidiary's contacts, for example to situations where the parent and

subsidiary have a "close, synergistic relationship" that transcends "mere ownership," George v.

Uponor Corp., 2013 WL 6801219, at *6 (D. Minn. 2013), the contacts of Shell's subsidiaries

would still be imputed. See, e.g., South African Apartheid Litigation, supra, 643 F. Supp. 2d at

435 (imputation where the companies form an "integrated business unit," with "individual

instances of direct control," shared facilities and staff, and overlapping officers); Parmalat

Securities Litigation, supra, 414 F. Supp. 2d at 442 (imputation based on control and "an

integrated, global organization"); Palmieri v. Estefan, 793 F. Supp. 1182, 1193 (S.D.N.Y. 1992)

(quoting Bialek v. Racal-Milgo, Inc., 545 F. Supp. 25, 32 (S.D.N.Y.1982) (local subsidiary

deemed agent of foreign parent if they are both "components of a tightly-knit commercial

organization of common-owned entities"). See also Liberty Property, 577 F.3d at 341-42

(imputation is proper where the subsidiaries are "mere instrumentalities" that are "created by

the parent, for tax or corporate finance purposes, to carry on business on its behalf').

Thus, based even on the limited pre-discovery facts available to plaintiffs, and under

even the most limited version of the agency theory, the New York and U.S. affiliations of

Shell's subsidiaries may be imputed to Shell, as the subsidiaries are at most instrumentalities

in Shell's tightly knit, synergistic business.

3. Shell's Subsidiaries Are Alter Egos or "Mere Departments" of Shell

21


As noted above, Bauman discussed with approval the alter ego theory of corporate

imputation. In New York, this theory is often called the "mere department" theory. As Shell

admits, a subsidiary's forum affiliations are imputed to the parent if the subsidiary is deemed a

"mere department" of the parent by virtue of: (1) common ownership, (2) financial dependency

of the subsidiary on the parent corporation, (3) the degree to which the parent corporation

interferes in the selection and assignment of the subsidiary's executive personnel and fails to

observe corporate formalities, and (4) the degree of control over the marketing and operational

policies of the subsidiary exercised by the parent." Shell Brief at 19-20 (quoting Gundlach v.

IBM Japan, Ltd., No. 11-CV-846 (CS), 2013 WL 6123627, *4 (S.D.N.Y. Nov. 21, 2013). Only

the first factor is essential to an alter ego finding; the others "comprise a balancing test." Id.

Shell admits common ownership, the only essential factor. And it is apparent that

corporate formalities are not always observed, as the Shell investor relations office is staffed by

employees of subsidiaries that have no "investors" other than Shell itself. Lawrence Decl. ~ 8. It

also seems plain that Shell has total control over the subsidiaries' marketing and operational

policies. Shell exercises such control by enforcing the Shell Control Framework, by imposing

"detailed technical and financial direction" and directly managing "virtually all of Shell's

operations in all of its various businesses," and by making all significant policy decisions, which

are announced in Shell's name by Shell's own officers, with not even a mention of the

subsidiary. See Part III.B.1 supra. As for "financial dependency," the facts are not yet clear, but

Shell's own exhibits show that at least one subsidiary'S activities are financed "mainly by funds

provided by the shareholder." Fermin Decl., Ex. Gat 4. It is inconceivable that Shell's more

than 1,000 subsidiaries are each separate companies under the pertinent tests.

22


Accordingly, the New York and U.S. contacts of the subsidiaries should be imputed to

ShelL See George v. Uponor Corp., supra, 2014 WL 1431194, at *2 (notwithstanding Bauman,

foreign parent subject to personal jurisdiction in subsidiary's principal place of business, because

subsidiary was parent's alter ego). Shell's motion to dismiss should be denied.

C. This Court Also Has General Personal Jurisdiction Over Shell Because ShellHas Consented to be Sued Here

As noted above, at least eight wholly owned Shell subsidiaries, including Shell Oil

Company, have appointed a registered agent for service of process in New York. By appointing

an agent for service of process, all eight of these wholly-owned Shell subsidiaries have

consented to general jurisdiction in New York, STX Panocean (UK) Co., Ltd. v. Glory Wealth

Shipping Pte Ltd., 560 F.3d 127,131 (2d Cir. 2009), regardless of whether they are "at home" in

New York under the Bauman test. Thus, Shell is subj ect to general jurisdiction here if the

affiliations of even one of these eight subsidiaries are imputed to the parent. For the reasons

stated above, imputation is appropriate because the subsidiaries are agents or alter egos of ShelL

Bauman concerns only general personal jurisdiction on the basis of contacts. It does not

in any way negatively impact the authority of cases such as STX Panocean, which hold that all-

purpose jurisdiction may be based on consent. In light of Shell's consent, Shell's personal

jurisdiction argument should be rejected.

D. Petitioners Are At Least Entitled to Jurisdictional Discovery

If the facts discussed above are not themselves sufficient, Shell's motion should

nevertheless be denied as premature, and petitioners should be allowed jurisdictional discovery

regarding Shell's New York and nationwide affiliations. Petitioners allege in good faith that

Shell has sufficient New York and/or nationwide contacts to satisfy due process concerns, and

that is all that is needed at this stage of this litigation. Dorchester Financial Securities, Inc. v.

23


Banco BRJ, SA., 722 F.3d at 84 -85 (prior to discovery, "good faith, legally sufficient allegations

of jurisdiction" are sufficient to defeat a motion to dismiss for lack of jurisdiction). There is no

basis for dismissal on the basis of Shell's untested, conclusory declarations that have already

been shown to be inaccurate, at least to some extent.

IV. COMITY DOES NOT REQUIRE DISMISSAL OF THIS EXECUTION ACTION

Shell argues that comity requires dismissal because the U.S. interest in this matter "is

outweighed by the interest of the United Kingdom and European Union in the application of

their sanctions law to property located within their territorial jurisdictions." Shell Brief at 30.

Thus, Shell's comity argument depends on the notion that the payables are located outside the

USA.

If the payables to NIOC are deemed to have a U.S. situs, Shell's comity argument fails at

the threshold. As discussed above, petitioners allege that the assets are located in the United

States. Petitioners dispute the contrary allegations in Shell's declarations and are entitled to

discovery on this jurisdictional issue. See Part II.B supra.

In any event, Shell's contention that this case presents a "true conflict" (compliance with

an order to tum over the payables to this court would require Shell to violate UK law) turns

entirely on an unsupported "understanding" in ~ 17 of the declaration ofMr. Fermin that

payment "would require express prior authorization by the competent authorities, including the

UK Government (specifically, Her Majesty's Treasury)."

Shell does not cite any EU or UK law or regulation that supports Mr. Fremin's

"understanding" regarding a governmental prior authorization requirement, even though Shell is

supposedly a UK entity. There is no mention of any such requirement on the UK government's

official Iran sanctions page, https://www.gov.uklsanctions-on-iran. In any event, even if

authorization were required, Shell has asserted absolutely no reason why the UK would deny it,

24

http://https://www.gov.uklsanctions-on-iran.


as the UK is strongly opposed to terrorism and its laws criminalize the support and financing of

terrorism, even where such acts occur outside the UK. "

Shell complains of only a "speculative hardship," which is not grounds for abstention on

comity grounds. JW Oilfield Equipment, supra, 764 F. Supp. 2d at 598; accord, Tiffany (NJ),

supra, 2012 WL 1918866 at *9 (speculative possibility of sanctions "not a factor" to be weighed

in comity analysis). The possibility that compliance with a turnover order would place a

European company in violation of the EU freeze on Iranian assets was specifically rejected as

grounds for dismissal by Judge Forrest in Peterson v. Islamic Republic of Iran, supra, 2013 WL

1155576 at *22, *28 ("it cannot be that a court must refrain from adjudicating a dispute where

the potential exists for a foreign legal regime to impose penalties on a litigant based on the U.S.

court's decision"). Shell's comity argument should likewise be rejected here.

Shell is obligated to prove that execution on a proper judgment by the Havlish plaintiffs

would constitute a transfer of funds that is subject to and in violation ofEU or UK sanctions. It

has not even satisfied this threshold issue. It is therefore premature and inappropriate for the

Court to rely on the conclusory argument and Mr. Fermin's declaration to find that such an

execution invokes concerns of comity, let alone that comity should suffice to defeat lawful

execution upon this Court's judgment. This is especially true as any order by this Court will not

require Shell to make payment to an Iranian person, entity or body.

11 Terrorism Act 2000 (UK) §§ 12, 17,63, at http://www.legislation.gov.uk/ukpga!2000Il1.

25

http://www.legislation.gov.uk/ukpga!2000Il1.


CONCLUSION

For the reasons stated above, Shell's motion should be denied in its entirety. In the

alternative, at the very minimum, Shell's motion should be denied as premature, subject to

renewal after completion of jurisdictional discovery.

Dated: May 23,2014

Stuart H. Singer, Esq. (Pro Hac Vice)William S. Dzurilla, Esq. (Pro Hac Vice)BOIES, SCHILLER & FLEXNER LLP401 East Las Olas Boulevard, Suite 1200Fort Lauderdale, Florida 33301Telephone: (954) 356-0011Facsimile: (954) 356-0022E-mail: [email protected]: [email protected]

Michael Gottlieb, Esq. (Pro Hac Vice)BOIES, SCHILLER & FLEXNER LLP5301 Wisconsin Ave., NWWashington DC 20015Telephone: (202) 237-2727Facsimile: (202) 237-6131Email: [email protected]

Timothy B. Fleming (Pro Hac Vice)Of CounselWIGGINS CHILDS PANTAZIS FISHER

GOLDFARB PLLC1850 M Street, N.W., Suite 720Washington, D.C. 20036Telephone: (202) 467-4489Facsimile: (205) 314-0805Email: [email protected]

Respectfully submitted,

BOIES, SCHILLER & FLEXNER LLP

By: lsi Stuart H. SingerSTUART H. SINGER

Lee Wolosky, Esq. (Bar no. W-1280)BOIES, SCHILLER & FLEXNER LLP575 Lexington AvenueNew York, NY 10022Telephone: (212) 446-2300Facsimile: (212) 446-2350Email: [email protected]

Richard D. Hailey, Esq. (Pro Hac Vice)RAMEY & HAILEY LAW9333 North Meridian Street, Suite 105Indianapolis, IN 46260Telephone: (317) 582-0000Facsimile: (317) 582-0080E-mail: [email protected]

Dennis G. Pantazis (Pro Hac Vice)WIGGINS CHILDS PANTAZIS FISHER

GOLDFARBLLCThe Kress Building301 Nineteenth Street NorthBirmingham, Alabama 35203Telephone: (205) 314-0531Facsimile: (205) 314-0731Email: [email protected]

26









Stephen A. Corr, Esquire (Pro Hac Vice)STARK & STARK, P.C.777 Township Line Road, Suite 120Yardley, PA 19067Telephone: (267) 907-9600Facsimile: (267) 907-9659Email: [email protected]

David C. Lee, Esq. (Pro Hac Vice)LAW OFFICE OF DAVID C. LEE800 S. Gay Street, Suite 700Knoxville, TN 37902Telephone: (865) 247-9736Facsimile: (865) 381-1638Email: [email protected]

Robert M. Foote, Esq. (Pro Hac Vice)FOOTE, MIELKE, CHAVEZ & O'NEIL, LLC10 West State Street, Suite #200Geneva, IL 60134Telephone: (630) 232 7450Facsimile: (630) 232 7452Email: [email protected]

Attorneys for Petitioners

CERTIFICATE OF SERVICE

I HEREBY CERTIFY that on May 23, 2014, a true and correct copy of the foregoing has

been furnished to all counsel of record via ECF and emaiL

By: lsi Stuart H. SingerSTUART H. SINGER

27




Documents

(Pro Hac Vice) Additional counsel on next page · 2014-05-23 · Case 1:13-cv-07074-GBD Document 41 Filed 05/23/14 Page 2 of 34 Timothy B. Fleming (Pro Hac Vice) Of Counsel WIGGINS