(English) Palmat International, Inc. v Eric Holder - Petition for Writ of Mandamus, Declaratory...

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF FLORIDA

CASE NO. 12-20229-CIV-SEITZ/SIMONTON

PALMAT INTERNATIONAL, INC., a Florida corporation; ROBERTO WELLISCH, individually, Petitioners, vs. ERIC H. HOLDER, JR., Attorney General of the United States of America,

Respondent. _________________________________/

RESPONDENT’S MOTION TO STAY DISCOVERY

OR IN THE ALTERNATIVE, FOR PROTECTIVE ORDER

Respondent, Eric H. Holder, Jr., Attorney General of the United States of America,

through the undersigned Assistant U.S. Attorney, pursuant to Federal Rule of Civil Procedure

26(c) hereby requests that this Court enter an Order staying discovery, or for protective order,

until the Court rules on Respondent’s pending Motion to Dismiss.

INTRODUCTION

In the matter before this Court, Petitioners seek the extraordinary relief of enjoining the

Attorney General of the United States from exercising his executive authority to execute mutual

legal assistance requests pursuant to a mutual legal assistance treaty (“MLAT”) between the

United States and Argentina. Respondent has a strong likelihood of success on the merits. As

Respondent sets forth in his Motion to Dismiss [D.E. 27], Petitioners seek this exceptional relief

despite the fact that their claims are barred by the express language of the applicable treaty and

Case 1:12-cv-20229-PAS Document 36 Entered on FLSD Docket 11/08/2012 of 12

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the lack of support for their constitutional claims. Notwithstanding the pendency of

Respondent’s dispositive motion, Petitioners seek discovery of the very information to which

they have no entitlement under the treaty.1

BACKGROUND

Petitioners filed a Petition for Writ of Mandamus, Declaratory Judgment, and Violation

of Administrative Procedure Act, seeking to enjoin the United States from executing a mutual

legal assistance request they allege was made from the Republic of Argentina, pursuant to the

Treaty Between the Government of the United States of America and the Government of the

Republic of Argentina on Mutual Legal Assistance in Criminal Matters, Signed at Buenos Aires

on Dec. 4, 1990 (“US-Argentina MLAT”), S. Treaty Doc. No. 102-18 (1991). A copy of the US-

Argentina MLAT is attached as Exhibit A. Petitioners’ claim, generally, that Respondent’s

compliance with his obligations under the US-Argentina MLAT in this instance would violate

Petitioners’ constitutional rights given that Argentina has made public “all the information that it

has been able to compile regarding Petitioners and will most likely make public any bank records

obtained pursuant to the MLAT request.” See Pet. [D.E. 1], at ¶ 15.

In response, Respondent filed a Motion to Dismiss, arguing primarily that this Court

lacks subject matter jurisdiction over Petitioners’ claims since the US-Argentina MLAT – by its

express terms – is intended solely for mutual legal assistance between the parties and does not

create any enforceable rights in a private person to “obtain, suppress, . . ., or to impede the

execution of a request.” See US-Argentina MLAT, art. 1, § 4. Accepting Petitioners’ allegations

1 Although stays of discovery are not routinely granted simply because a motion to dismiss is pending, cf. S.D. Fla. App. A. I.D(5), this case is anything but routine. Petitioners seek discovery to reveal a confidential request for assistance by a foreign government and the United States’ internal deliberations about such a request, in a case in which the very action is barred by the applicable treaty and permitting discovery to go forward could have major consequences for the United States’ relations with that government and other foreign governments.


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about the existence of a MLAT request as true, Respondent also submitted that Petitioners fail to

state a constitutional claim because generally: (i) Petitioners’ constitutional claim does not

provide a valid basis to review the Executive Branch’s decision to comply with an MLAT

request; and (ii) Respondent’s production of financial records to Argentina in aid of a criminal

investigation and in response to a valid MLAT request does not violate the Constitution.

Thereafter, and despite the pendency of Respondent’s Motion to Dismiss, Petitioners

served Respondent with Interrogatories and Request for Production of Documents, seeking three

broad categories of information regarding: (1) internal communications between various

components of the U.S. Department of Justice and other federal agencies; (2) communications

between various federal components and the Republic of Argentina; and (3) communications to

third-party financial institutions and documents provided by such institutions to the United

States. A copy of the discovery requests is attached as Exhibit B.

However, as articulated by Magdalena Boynton, Associate Director of the Office of

International Affairs, Criminal Division, U.S. Department of Justice, harm my result from the

Respondent’s failure to keep information confidential. See Declaration of Magdalena Boynton

(“Boynton Decl.”), Associate Director of the Office of International Affairs, Criminal Division,

U.S. Department of Justice, dated November 6, 2012, attached as Exhibit C.

ARGUMENT

The Eleventh Circuit has recognized that it is appropriate to stay discovery until

preliminary questions of law that may dispose of a case have been resolved. See Chudasama v.

Mazda Motor Corp., 123 F.3d 1353, 1367 (11th Cir. 1997) (“Facial challenges to the legal

sufficiency of a claim or defense, such as a motion to dismiss based on failure to state a claim for


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relief, should . . . be resolved before discovery begins.”); Moore v. Potter, 141 F. App’x 803,

807-08 (11th Cir. 2005) (district court did not abuse discretion when it stayed discovery). “In

deciding whether to stay discovery pending resolution of a motion to dismiss, the court must

balance the harm produced by a delay in discovery against the possibility that the motion will be

granted and entirely eliminate the need for such discovery.” Schreiber v. Kite King’s Lake, LLC,

No. 2:10-cv-391, 2010 WL 3909717, at 1 (M.D. Fla. Oct. 1, 2010) (citing Koock v. Sugar &

Felsenthal, LLP, No. 8:09-cv-609-T-17EAJ, 2009 WL 2579307, at 2 (M.D. Fla. Aug. 19, 2009)).

A stay is especially appropriate where, as here, the motion pending before this Court is

dispositive, goes to this Court’s very jurisdiction to proceed, and raises purely legal issues, for

which discovery would not be helpful. Chudasama, 123 F.3d at 1367; see also Cheshire v.

Bank of Am., NA, 351 F. App’x 386, 388 (11th Cir. 2009) (“Defendants’ motion to dismiss raised

only legal questions and, therefore, [plaintiff] had no right to discovery.”); Horsley v. Feldt, 304

F.3d 1125, 1131 n.2 (11th Cir. 2002) (Same).

Because Respondent’s Motion to Dismiss raises purely legal issues that if resolved in

favor of the Respondent will dispose of the case, factual discovery will not aid the resolution of

such Motion. Accordingly, a stay of discovery is warranted.

I. The US-Argentina MLAT Requires That Requests be Kept Confidential.

A. Article 5 of the US-Argentina MLAT Requires Confidentiality

The Constitution accords treaties to which the United States is a party the status of

“supreme law of the land.” U.S. Const. Art. VI, § 2. The Supreme Court has long recognized

that the Constitution places treaties on equal footing with legislative acts of Congress. See

Rainey v. United States, 232 U.S. 310 (1914); United States v. Lee Yen Tai, 185 U.S. 213 (1902);


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Horner v. United States, 143 U.S. 570 (1892); Whitney v. Robertson, 124 U.S. 190 (1888).

Mutual legal assistance treaties generally, and the US-Argentina MLAT, specifically, are self-

executing treaties. See Letter of Transmittal from the President of the United States to the Senate,

October 31, 1991 (Exhibit A). Further, self-executing treaties such as this one are enforceable in

U.S. courts. See e.g., U.S. v. Alvarez-Machain, 504 U.S. 655, 667 (1992) (noting that self-

executing treaties are enforceable).

The Supreme Court has also recognized that a fundamental principle and goal of treaty

construction and interpretation is to determine and apply the intention of the parties “because it is

[the Court’s] responsibility to give the specific words of the treaty a meaning consistent with the

shared expectations of the contracting parties.” Air France v. Saks, 470 U.S. 392, 399 (1985). In

applying this fundamental principle in its analysis of the US-Canada mutual legal assistance

treaty, the Eleventh Circuit stated that a determination of the parties’ intention “begin[s] with the

text of the treaty and the content in which the written words are used.” In Re Commissioner’s

Subpoenas, 325 F.3d 1287, 1294 (citations omitted).

The US-Argentina MLAT requires that the party executing a request for mutual legal

assistance use its “best efforts” to “keep confidential” the request if such confidentiality is

requested by the Central Authority of the requesting state. See US-Argentina MLAT, art. 5, § 5.

It is thus axiomatic that in negotiating the subject MLAT, the United States and Argentina

recognized the sensitive nature of criminal investigations and proceedings and the resulting need

for confidentiality in dealing with such matters. See Boynton Decl., at ¶ 8. Failure to comply

with the confidentiality provision set forth in Article 5 could be characterized by the requesting

state as a breach by the requested state of the US-Argentina MLAT, in violation of its

international obligations. See id. at ¶ 21.


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Moreover, if an MLAT request under the US-Argentina MLAT cannot be executed

without maintaining the requested confidentiality, the requested state is further obligated by the

subject MLAT to consult with the requested state prior to the request’s disclosure in order to

allow the requesting state to “determine whether the request should nevertheless be executed.”

See US-Argentina MLAT, art. 5, § 5; Boynton Decl., at ¶¶ 15, 18. Thus, if presented with an

order compelling discovery regarding an MLAT request, the United States would be obligated

under the US-Argentina MLAT to inform Argentina that the confidentiality of the request cannot

be maintained and allow Argentina an opportunity to withdraw the request prior to disclosure to

prevent any harm to the foreign criminal investigation that may result.

B. Additional Authority Requires Confidential Treatment of MLAT Requests

Relevant U.S. authority also provides for confidentiality when seeking to execute foreign

requests for assistance in criminal matters, consistent with the confidentiality the United States

affords to its own criminal investigations and prosecutions. In executing foreign requests for

assistance, the United States relies on the statutory authority provided by 18 U.S.C. § 3512,

which empowers a federal judge to issue “such orders as may be necessary” to execute the

request. In the context of criminal proceedings, requests for mutual legal assistance, whether

through MLATs or non-treaty based letters rogatory, are customarily received and appropriate

action taken with respect thereto ex parte.

Both Section 3512 and Article 5 of the US-Argentina MLAT authorize the use of

compulsory process in the execution of treaty requests comparable or similar to that used in

domestic criminal investigations or prosecutions. Because subpoenas utilized in U.S. criminal

proceedings (i.e., grand jury and criminal trial subpoenas) are issued without notice to any party

other than the recipients (i.e., no notice to targets or defendants), orders and commissioner’s


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subpoenas issued in execution of MLAT requests pursuant to Section 3512 and the applicable

treaty likewise require no notice other than to the recipients of the subpoena. See, e.g., Boynton

Decl., at ¶¶

II. Discovery Sought May Be Privileged, and Protected from Disclosure.

Petitioners seek discovery that, apart from not being reasonably calculated to lead to the

discovery of admissible evidence as it does not bear a reasonable relationship to the gravamen of

their Petition, encompasses a broad range of documents and material that may be subject to

various privileges, and as a result, protected from disclosure. The information and documents

sought by Petitioners encompass the following categories: (i) information regarding the internal

deliberative processes of the United States in evaluating incoming MLAT requests; (ii)

communications the United States may have with its foreign counterparts in Argentina about any

requests–whether or not such request relates to Petitioners; and (iii) and communications the

United States might undertake with other U.S. government agencies in order to execute an

MLAT request. These categories of information, on their face, are likely to implicate a wide

range of privileges, including those protecting the deliberative process, work product, attorney-

client communications, law enforcement matters, and perhaps others.

III. Disclosure of Documents Requested Would Harm the United States’ Ability to Seek Reciprocity and Impact Foreign Relations With Treaty Partners.

MLATs create reciprocal treaty obligations between the parties to provide each other

with legal assistance in criminal matters. See Boynton Decl., at ¶ 7. Annually the U.S.

Department of Justice Office of International Affairs (“OIA”) receives approximately 3,000

requests for mutual legal assistance from foreign authorities seeking assistance in gathering

evidence located in the United States for use in that country’s criminal investigations and


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prosecutions. See id. at ¶ 6. OIA also makes nearly 1,000 such requests to foreign authorities for

assistance in United States criminal investigations and prosecutions. See id. Such requests are

made pursuant to a network of bilateral MLATs in force with over 70 countries, an increasing

number of multilateral conventions, and pursuant to non-treaty mechanisms such as letters

rogatory and letters of request. See id.

The United States and its treaty partners treat government-to-government

communications and deliberations regarding an MLAT request as sensitive law enforcement

matters that are not subject to disclosure. See id. at ¶ 8. Such expectations of confidentiality are

not limited to the MLAT context but extend to sensitive government-to-government

communications generally. See id. As a matter of treaty practice and reciprocity, the United

States must and does make its best efforts to ensure that requests for confidentiality received

from MLAT partners are honored and that MLAT requests it receives are similarly protected

from disclosure. See id. at ¶ 11. Thus, the legal requirement that the United States honor its

treaty obligations further implicates the strong United States interest in ensuring that its foreign

counterparts, in this case Argentina, reciprocate with respect to confidentiality when asked to

provide assistance in securing evidence for use in U.S. domestic criminal investigations and

prosecutions. Failure to provide any confidentiality requested by Argentina would significantly

impact that country’s ability and willingness to accord reciprocal treatment to similar U.S.

requests for assistance.

As articulated by the Associate Director of the Office of International Affairs, U.S.

Department of Justice, the United States’ ability to maintain effective law enforcement relations

with its treaty partners, including Argentina, is imperative to the United States’ ability to

investigate, prosecute and assist in the prosecution of a wide array of criminal activity that,


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increasingly, transcends national borders. See Boynton Decl., at ¶ 20. The inability of the

United States to fully comply with its obligations under the US-Argentina MLAT could not only

constitute a violation of the subject MLAT as described above, but also could have a chilling

effect on the ability of both parties to communicate freely and candidly regarding matters that

directly affect the security of their citizens, and often, the security of individuals beyond their

respective borders. See id. at ¶ 21. There is such a strong need for confidentiality in the MLAT

process that some foreign countries operate under the assumption that such requests will remain

confidential even absent a specific request for confidentiality. See id. at ¶ 11.

Responding to discovery requests for information and communications relevant to a

foreign criminal matter that is treated as confidential pursuant to the terms of the applicable

treaty risks preventing the United States from fulfilling its treaty obligation to maintain the

confidentiality of the request and impedes the usual and proper application of the US-Argentina

MLAT and. See id at ¶ 18. Further, the inability of the United States to provide foreign

authorities with the confidentiality to which they are entitled under an MLAT may compromise

the United States’ position with treaty partners that the United States receive confidential

handling of its own MLAT requests involving sensitive criminal investigations sent to foreign

authorities. See id. at ¶ 19. The United States’ ability to further its significant domestic and law

enforcement interests would be compromised without the ability to obtain assistance and secure

evidence located abroad. See id. at ¶ 22.

CONCLUSION

For the foregoing reasons, Respondent requests that this Court enter an Order staying

discovery, or a protective order until the Court rules on Respondent’s pending Motion to

Dismiss.


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Dated: November 8, 2012 Respectfully submitted,

WIFREDO A. FERRER UNITED STATES ATTORNEY

By: s/ Marlene A. Fernandez-Karavetsos

MARLENE A. FERNANDEZ-KARAVETSOS Assistant United States Attorney Florida Bar No.: 187569 [email protected] 99 N.E. 4th Street, Third Floor Miami, Florida 33132 Tel: (305) 961- 9341 Fax: (305) 530-7139

Counsel for Respondent

CERTIFICATE OF SERVICE

I HEREBY CERTIFY that on November 8, 2012, I electronically filed the foregoing

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

is being served this day on all counsel of record identified on the Service List by CM/ECF.

s/Marlene A. Fernandez-Karavetsos MARLENE A. FERNANDEZ-KARAVETSOS Assistant United States Attorney


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CERTIFICATE OF GOOD FAITH CONFERENCE

I hereby certify that I have conferred with counsel for Petitioners seeking an agreement to

stay the discovery until such time as this Court rules on the Motion to Dismiss. However,

Petitioners do not agree to such relief requested but do not oppose the filing of this Motion.

s/Marlene A. Fernandez-Karavetsos MARLENE A. FERNANDEZ-KARAVETSOS Assistant United States Attorney


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SERVICE LIST

PALMAT INTERNATIONAL, INC. and ROBERT WELLISCH v. ERIC H. HOLDER, JR., Attorney General of the United States of America

CASE NO. 12-CV-20229-SEITZ/SIMONTON United States District Court Southern District of Florida

Jacqueline M. Arango, Esq. Akerman Senterfitt SunTrust International Center One S.E. Third Avenue – 25th Floor Miami, Florida 33131-1704 Telephone: (305) 374-5600 Facsimile: (305) 374-5095 [email protected] Francisco A. Rodriguez, Esq. Akerman Senterfitt SunTrust International Center One S.E. Third Avenue – 25th Floor Miami, Florida 33131-1704 Telephone: (305) 374-5600 Facsimile: (305) 374-5095 [email protected]


Exhibit

A

Case 1:12-cv-20229-PAS Document 36-1 Entered on FLSD Docket 11/08/2012 Page 1 of 31

12-cv-20229-PAS Document 36-1 Entered on FLSD Docket 11/08/2012 Page

Exhibit

B


Exhibit

C


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