SEC v. Jackson / Ruehlen (SEC Motion Re: Nigeria Law)

8/12/2019 SEC v. Jackson / Ruehlen (SEC Motion Re: Nigeria Law)

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF TEXAS

HOUSTON DIVISION

)SECURITIES AND EXCHANGE )

COMMISSION, )

)Plaintiff, ) Case No. 4:12-cv-00563

)

v. ))

MARK A. JACKSON and )

JAMES J. RUEHLEN, )

)

Defendants. ))

SECS MOTION FOR A DETERMINATION OF FOREIGN LAW

PURSUANT TO FEDERAL RULE OF CIVIL PROCEDURE 44.1

AND MEMORANDUM OF LAW IN SUPPORT THEREOF

Case 4:12-cv-00563 Document 138 Filed in TXSD on 03/28/14 Page 1 of 26


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TABLE OF CONTENTS

I. SUMMARY OF THE ARGUMENT ................................................................................. 1

II. NATURE AND STAGE OF THE PROCEEDING............................................................ 2

III. ISSUES TO BE RULED UPON BY THE COURT ........................................................... 3

IV. ADDITIONAL BACKGROUND IN SUPPORT OF MOTION........................................ 3

A. The Nigeria Customs Service is vested with Discretion to Grant or Deny TIPs and

any Extensions. .......................................................................................................... 3

B. TIPs (Including And Extensions) May Not to Exceed Twenty-Four Months in

Duration. .................................................................................................................... 5

C. Nigerian Law Prohibits the Payment of Money or Anything of Value to a

Governmental Official to Influence an Officials Exercise of His or Her Duties. .... 7

D. Nigerian Law Prohibits the Making of False Statements to Government Officials in

Connection With Obtaining A TIP. ........................................................................... 8

E. Defendant Ruehlens Experts Opinions Implicate Matters of Nigerian Law. ........ 10

V. STANDARD OF REVIEW .............................................................................................. 12

VI. ARGUMENT .................................................................................................................... 14

A. Questions of Nigerian Law Should Be Resolved Before Trial. ............................... 14

B. The SEC Has Proven The Substance of Nigerian Law to a Reasonable Certainty. 17

1. NCS Possesses The Discretion to Grant or Deny a TIP or an Extension. ...... 18

2. NCS Cannot Permissibly Grant TIPs Exceeding Twenty-Four Months. ....... 19

3. Payments to a NCS Official to Influence the Officials Exercise of His or Her

Duties is Unlawful. ......................................................................................... 19

4. Making False Statements to NCS Officials in Connection With Obtaining a

TIP or an Extension is Unlawful. .................................................................... 20

VII. CONCLUSION ................................................................................................................. 20



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TABLE OF AUTHORITIES

Cases

Access Telecom, Inc. v. MCI Telecomms. Corp., 197 F.3d 694 (5th Cir.1999)...................... 12, 17

Corder v. BBG Comms.,Inc., Civil Action No. W-11-CA-00264, 2012 WL 3843714 (W.D. Tex.

July 30, 2012) ...................................................................................................................... 13, 17

In re Avantel, S.A., 343 F.3d 311 (5th Cir. 2003) ......................................................................... 13

In re Vitamin C Antitrust Litig., 810 F. Supp. 2d 522 (E.D.N.Y. 2011) ....................................... 13

Iracheta v. Holder, 730 F.3d 419 (5th Cir. 2013) ......................................................................... 12

Liechti v. Roche, 198 F.2d 174 (5th Cir. 1952)....................................................................... 13, 15

Linde v. Arab Bank,PLC, 920 F. Supp. 2d 282 (E.D.N.Y. 2011) .......................................... 13, 15

McGee v. Arkel Intern.,LLC, 671 F.3d 539 (5th Cir. 2012) ................................................... 13, 17Northrop Grumman Ship Sys., Inc. v. Min. of Def. of the Rep. of Venezuela, 575 F.3d 491 (5th

Cir. 2009) .................................................................................................................................. 17

Randall v. Arabian Am. Oil Co., 778 F.2d 1146 (5th Cir. 1985) .................................................. 13

United States v. Boyster, 436 F.3d 986 (8th Cir. 2006) ................................................................ 18

United States v. Gjieli, 717 F.2d 968 (6th Cir. 1983) ................................................................... 15

United States v. Kay, 359 F.3d 738 (5th Cir. 2004) ...................................................................... 16

United States v. McClain,545 F.2d 988 (5th Cir. 1977) .............................................................. 12

United States v. McClain, 593 F.2d 658 (5th Cir. 1979) .............................................................. 13

United States v. Rodgers, 461 U.S. 677 (1983) ............................................................................ 18

Statues, Rules and Regulations

15 U.S.C. 78dd-1 ................................................................................................................ 1, 2, 14

18 U.S.C. 201 ............................................................................................................................. 15

Federal Rule of Civil Procedure 44.1 ......................................................................... 12, 13, 15, 17

Securities Exchange Act of 1934 ................................................................................................ 1, 2

Nigerian Law

Customs and Excise Notices ................................................................................................. 4, 5, 18

Federation of Nigeria Official Gazette ........................................................................................... 4

Nigerian Corrupt Practices and Other Related Offenses Act ................................................ 7, 8, 19



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Nigerian Customs and Excise Management Act No. 55 of 1958 .......................................... passim

Temporary Import Code ................................................................................................. 5, 6, 18, 19

Miscellaneous

Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure, 2444 ................... 13



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I. SUMMARY OF THE ARGUMENTQuestions of Nigerian law pervade this bribery case for two reasons. First, findings on

threshold questions of Nigerian law are necessary for the jury to determine whether Defendants

induced foreign officials to do or omit to do any act in violation of the lawful duty of such

foreign official[s] in violation of Section 30A of the Securities Exchange Act of 1934 (the

Exchange Act), an element of the SECs bribery claims. 15 U.S.C. 78dd-1(a)(3)(A)(ii)

(emphasis added). Questions of Nigerian law are also necessary to determine whether the

payments at issue in this case fit within the narrow facilitating payment exception under the

Foreign Corrupt Practices Act (the FCPA).

These questions of Nigerian law include: (i) whether the grant of a Temporary Import

Permit (TIP) a concession that allows an importer to avoid the payment of import duties

was discretionary; (ii) what was the permissible duration of a TIP and whether and to what extent

a TIP may be extended; and (iii) whether Nigerian customs officials could lawfully accept

payments to approve a TIP based on false paperwork showing that Nobles rigs in Nigeria had

been exported and re-imported, when the rigs in fact had never moved out of Nigerian waters.

These questions of Nigerian law are, like questions of U.S. law, questions of law for the Court to

decide, and each defines the scope of Nigerian customs officials lawful duty in connection

with granting the TIPs and TIP extensions at issue in this case.

Second, rulings on these issues of Nigerian law are necessary in light of the Defendants

purported expert evidence. Defendants intend to introduce expert evidence asserting that, among

other things, the payment of bribes to civil servants in Nigeria is common and even

expected; the submission of falsified documents to Nigerian governmental agencies is

satisfactory or acceptable from the Nigerian governments perspective; that laws governing

the issuance of temporary import permits are not laws but internal rules or policies; and that



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CEMA governs the process for obtaining, and the terms of, TIPs in Nigeria. (Id. 9,

11.) Section 42 of CEMA states that where the Board is satisfied that goods are imported only

temporarily and are intended to be re-exported , it may permit the goods to be delivered on

importation,subject to such conditions as it sees fit to impose, without payment of duty. (Id.

(emphasis added).)

Further, Customs and Excise Notices (C&E Notices)regulations issued by the

Boardalso demonstrate that issuance of TIPs and TIP extensions is discretionary.4 (Id. 15.)

Specifically, C&E Notice No. 14 of 1959 states that where the Board is satisfied that there are

special reasons why, with a view to promoting the interests of trade, duty should not be charged

certain classes of goods may apply for a temporary exemption from import duties. (Id.) Part

III.A. of the C&E Notice No. 14 governing temporary importation of such other goods states:

27. Special Provisions.Prior written application must be made to the Board of

Customs and Excise, Lagos, for permission to import temporarily any goods

(other than commercial samples, advertising materials and motor vehicles whichare dealt with in Parts I and II of this notice) without payment of import duty. The

conditions and the Boards requirements will be advised to the importer.

(Id.) These regulations permit the Board, where it determines there are special reasons why

duty should not be charged, to grant a temporary exemption and set conditions upon that

temporary exemption. Thus, under both CEMA and regulations promulgated thereunder,

issuance of a TIP or TIP extension is vested in the sound discretion of the Board and applicants

are not entitled (as of right upon an application) to receive a TIP. (Id. 9-15, 17.)

The Boards discretion to grant or deny TIPs or TIP extensions, however, is delegated to

NCS and its Comptroller-General. (Id. 16.) Section 6 of Part II of CEMA provides that

[a]nything done or required to be done by the Board in pursuance of any of its powers or duties

4All C&E Notices are published for consumption by the general public in an official government gazette called theFederation of Nigeria Official Gazette. (Id. 14.)



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under the customs and excise laws may be delegated to the Comptroller-General [of the NCS]

or other officer authorized by the Board to act on its behalf. (Id.) In Nigeria, the authority to

grant or deny TIPs and TIP extensions has been delegated to NCS and all applications for TIPs

and TIP extensions are evaluated by NCS. (Id.) Thus, NCS (acting on behalf of the Board

pursuant to its delegated authority) has discretion to grant or deny TIPs or TIP extensions. (Id.

16-17)5

Each of the foregoing statutes and regulations were in effect throughout the relevant

period in this case, 2003 through 2007. (Id. 9, 15.)

B.

TIPs (Including And Extensions) May Not to Exceed Twenty-Four Months inDuration.

NCS discretion to grant or deny TIPs or TIP extensions is limited by Codes promulgated

by the Board. In exercising its discretion to grant or deny TIPs, NCS is bound by the provisions

of the NCS Temporary Import Code (TI Code), a set of specific instructions issued by the

Board relating to the temporary importation of goods. (Id. 19.) NCS has no discretion to

ignore or modify the provisions and procedures of the TI Code, absent express approval and

official authorization by the Board.6 (Id.)

The TI Code sets forth the permissible duration of TIPs and the number of extensions

allowed by the Board pursuant to its authority under CEMA. (Id. 21-25, 27.) Specifically,

Section 16 of the TI Code regarding extension of period of temporary importation provides

that an importer may apply for an extension of three or six months or one year provided for

5As discussed in the SECs Motion for Partial Summary Judgment filed simultaneously herewith, it is undisputed

that issuance of TIPs and TIP extensions is discretionary under Nigerian law.

6The TI Code states [t]he requirements of the Nigeria Customs Service in respect of temporary importation andexportation is contained in Customs and Excise Notice No. 14 of 1959 and [a]ll officers are to familiarizethemselves with this Customs Notice which is to be read in conjunction with the following paragraphs. (Id. 21.)



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in the TI Code. (Id. 25.) However, [i]n the case of Oil rigs, an application for extension

can only be approved by the Comptroller General of Customs, and the extension is only

allowed once. (Id. (emphasis added).) The Comptroller General of Customs may grant a single

extension only if he is satisfied that an extension is reasonable and necessary. (Id.)

Further, Annex C to the TI Codewhich specifically addresses goods related to oil

exploration and drilling contract operationprovides that the Comptroller General of Customs

may discretionally approve TIPs under certain conditions, including:

(a) the equipment imported is acquired on lease basis ONLY;(b) the equipment is solely intended for the execution of major Government

contracts and are for immediate re-exportation at the completion of the contract;and,

(c) the importer who is a party to the contract makes a formal application toHeadquarters Comptroller General of Customs (CGC), asking for authority to

import a specific equipment or machinery.

(Id. 23, 24.) In addition, Annex C to the TI Code identifies the documents that must be

attached to the importers TIP application and reiterates the limitations on the length of any TIP

granted and the number of extensions permitted:

Attached to the application are the following documents, viz:-

(a) Contract Agreement;(b) Specific type of equipment and brochure of such equipment;(c) Lease Agreement;(d) Photocopy Certificate of Registration and License to operate as an oil

operator or Drilling Company as applicable;

(e) After consideration of the merits, approval may be granted for aperiod of twelve (12) months or less depending on the duration of the

Contract.

(f) Concession granted here must not be renewed more than once and theduration of the renewal must not exceed twelve months.



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(Id. 24 (quoting Annex C, Temporary Importation Guidelines, NCS TI Code at 23 (emphasis

added).)

Thus, the TI Code limits NCS discretion to grant TIPs or TIP extensions; specifically,

NCS only has discretion to grant an initial TIP for twelve months or less depending on the

duration of the contract, and such TIP may only be extended once for a period not to exceed

twelve (12) months or the contract term, whichever is less. (Id. 25, 27.)

The foregoing provisions of the TI Code, including Annex C to the Code, were in effect

and binding on NCS throughout the relevant period in this case, 2003 through 2007. (Id. 20.)

C.

Nigerian Law Prohibits the Payment of Money or Anything of Value to aGovernmental Official to Influence an Officials Exercise of His or Her

Duties.

The Nigerian Corrupt Practices and Other Related Offenses Act was enacted and signed

into law in May 2003. (Id. 31.) Section 13(1) provides:

(1) Any person who corruptly

(a) gives, confers or procures any property or benefit of any kind to, on or for

a public officer or to, on or for any other person; or

(b) promises or offers to give, confers, procure or attempt to procure anyproperty or benefit of any kind to, on or for a public officer or any other

person, on account of any such act, omission, favour or disavour to be

done or shown by the public officer

is guilty of an offence of official corruption and shall on conviction be liable to

imprisonment for seven years.

(Id. 32.) Section 13(2) further provides that if any property or benefit of any kind was

given to a public officer or some other person at the instance of a public officer by a person

holding or seeking to obtain a contract, licence, permit, [or] employment from a government

department, then that property, benefit or promise shall, unless the contrary is proved, be

deemed to have been given corruptly for purposes of Section 13(1). (Id. 33.) In other words,



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the law presumes corrupt intent whenever a public official receives anything of value from a

person (or his agent) who is seeking a permit from the government department or agency in

which the public official is serving. (Id.) Those found guilty of an offense of official corruption

may be imprisoned for seven years and be assessed a penalty in the amount of five times the

value of the bribe or 10,000 naira, whichever is higher. (Id. 34.) Sections 12 and 14 of the

Act address so-called demand side bribery and prohibit the solicitation or receipt of bribes by

public officials. (Id.)

In sum, Nigerian law expressly prohibits the payment of money or anything of value to a

governmental official to influence an officials exercise of his or her duties, and corrupt intent to

influence a government official is presumed under the law where, as here, payments are made to

government officials by a person (or his agent) who is seeking to secure a permit from the

government officials agency or department. (Id. 31-34.) Each of the foregoing provisions of

the Corrupt Practices and Other Related Offenses Act were in effect throughout the relevant

period in this case, 2003 through 2007. (Id. 31.)

D. Nigerian Law Prohibits the Making of False Statements to GovernmentOfficials in Connection With Obtaining A TIP.

During the relevant period, the Defendants authorized Nobles agent to make payments to

Nigerian government officials to process and grant TIPs to Noble based on paperwork that

falsely showed that Nobles rigs in Nigeria had been exported and re-imported, when the rigs in

fact had never moved out of Nigerian waters. (SeeSEC Mot. for Partial Summ. J., Section V.)

The Defendants euphemistically referred to this practice of paying government officials and

using false paperwork to obtain TIPs from NCS as the paper process. The so-called paper

process also included the use of false stamps purporting to show that a rig arrived at or departed

from a port to which it did not sail, false invoices for stevedoring, tug boats, and other services at



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Nigerian and foreign ports that the rig did not visit, and other false documents purporting to

show that drilling rigs were exported from Nigerian waters and subsequently reimported, to

secure TIPs or TIP extensions.

However, the making of false declarations and the falsification of documents are

expressly prohibited by CEMA. Section 161(1) of CEMA provides that if any person makes

or signs, or causes to be made or signed, or delivers or causes to be delivered, to the Board or an

officer, any declaration, notice, certificate or other document whatsoever which is untrue in

any material particular, he shall be guilty of an offence under this section. (Id. 28.) Section

161(3) provides that any person who knowingly or recklessly makes such false declarations shall

be liable for a fine of one thousandnaira or two years imprisonment or both and the goods shallbe forfeited. (Id.) Similarly, Section 161(4) provides where any person commits an offence

under this section in such circumstances that he is not liable under [Section 161(3)] of this

section, he [still] shall be liable to a fine of six hundred naira. (Id.) Thus, under Section 161 of

CEMA, the submission of documents that are untrue in any material particular is an offense

punishable by a fine, imprisonment or both. (Id.)

Similarly, Section 162 of CEMA provides that if any person:

(a) counterfeits or falsifies any document which is required by or under the

customs and excise laws or which is used for the transaction of anybusiness relating to customs and excise; or

(b) knowingly accepts, receives or uses any such document so counterfeit or

falsified;

(c) alters any such document after it is officially issued; or

(d) counterfeits any seal, signature, initials or other mark of, or used by, any

officer for the verification of such a document or for the security of goods

or for any other purpose relating to customs and excise,

he shall be liable to a fine of one thousand naira or to imprisonment for two years,

or to both.



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(Id. 29 (quoting Section 162 of CEMA).)

Finally, Section 164 of CEMA also states that anyone who is knowingly concerned in

any fraudulent evasion or attempt at evasion of any duty chargeable shall be liable to a fine of

six times the value of the goods or four hundred naira, whichever is the greater, or to

imprisonment for two years, or to both. (Id. 30.)

In short, Nigerian law broadly prohibits the submission of false information or false

documentation to the Board or NCS for any purpose or business relating to customs and excise,

including obtaining a TIP or TIP extension. (Id. 28-30.) Each of the foregoing provisions of

CEMA was in effect throughout the relevant period in this case, 2003 through 2007. (Id. 9.)

E. Defendant Ruehlens Experts Opinions Implicate Matters of Nigerian Law.Defendant Reuhlen has proffered three experts that address what is purportedly

permissible in Nigeria: former Amb. John Campbell (Campbell), Aaron Sayne (Sayne),

and Ronald Gilson (Gilson). Each disavows rendering any opinion or expertise on the law

governing the issuance of TIPs or TIP extensions or Nigerian law. However, each expert intends

to offer opinions that directly or indirectly implicate matters of Nigerian law.

Campbell spent three years in Nigeria as U.S. Ambassador to the country. (Rule 26

Report of Amb. J. Campbell (Campbell Rep.) (attached as Exhibit B) 2.) Campbell intends

to opine that bribery and the use of false paperwork to secure TIPs was permissible and even

expected in Nigeria. Specifically, Campbell opines:

it is common and even expected that civil servants in Nigeria requirepayment from citizens and businesses, both Nigerian and foreign, for servicesthose civil servants are obliged to perform as a matter of law, practice, or national

policy;

With respect to transactions between the Nigerian Customs Service (NCS) andoil drilling companies during the relevant period, the rules or policies

concerning the duration and limits of TIPs and TIP extensions both from



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Nobles perspective and as reflected in the purported governmental documents

that have been produced in this matter that describe those rules or policies were informal, ad hoc, subject to change, and unclear;

The payments that Noble made in connection with TIPs and TIP extensions including TIPs obtained through the physical movement of rigs, as well as thepaper process do not strike me as outside the understood and accepted norms

that prevailed within Nigerias system of payments to civil servants; and,

in the context of the norms of informal governance that dominate actualgovernance in Nigeria the paper process was a pragmatic arrangement

[and] was thus satisfactory from the perspective of all parties involved.

(Campbell Rep. 6, 10, 12, 109.) Notwithstanding the fact that he intends to testify at trial that

payments to government officials and the use of the so-called paper process was accepted,

expected, or satisfactory in Nigeria, Campbell demurred that he was not a lawyer and was

not offering an opinion on the contours of Nigerian law. (02/12/2014 Deposition of Amb. J.

Campbell at 96; see also id. 93-95 (attached as Exhibit C).)

Sayne is a lawyer (a former staff attorney at Cadwalader, Wichersham & Taft) turned

think-tank entrepreneur. (Rule 26 Report of Aaron Sayne (Sayne Rep.) (attached as Exhibit D)

2-8.) Among other things, Sayne opines that it is highly unlikely that the President of

Nigeria would have permitted NCS to require the exportation of active oil drilling rigs from

Nigerian territory on the grounds of an NCS policy limiting the duration of temporary

importation authorization. (Id. 15, 72, 95.) Sayne (like Campbell) characterizes the TI Code

governing temporary importations as an internal and unpublished NCS rule or policy. (Id.

72.) Sayne, however, disclaims any expertise or knowledge of Nigerian law governing TIPs.

(See 02/10/2014 Deposition of A. Sayne at 52, 70-71, 104, 151 (attached as Exhibit E).) In

short, while disclaiming any opinion on matters of Nigerian law, Sayne intends to testify that the

TI Code is not binding on NCS officials but is merely an internal rule or policy.



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Gilson teaches comparative law and corporate governance at Columbia University and at

Stanford Universitys Institute of Economic Policy Research. During his deposition, Gilson

testified that it was his opinion that filing false applications may be an acceptable practice for

some foreign governments such as Nigeria. (02/19/2014 Deposition of R. Gilson (Gilson

Dep.) at 51, 60-61 (attached as Exhibit F).) He also testified that compliance with foreign law,

such as Nigerian law, is often unclear. (Id. at 62-63.) Though Gilson avoided declaring any

opinion specifically on Nigerian law, Gilsons opinions nonetheless suggest that the so-called

paper process of submitting false information to obtain TIPs was acceptable practice in Nigeria

or, at the very least, Nigerian law was unclear.

7

In short, although none of Ruehlens experts dispute the content of Nigerian law set forth

herein, each expert opines on issues that directly or indirectly implicate issues of Nigerian law

concerning the use false submissions to governmental agencies, payments of money to Nigerian

officials, and the duties of Nigerian officials concerning TIPs.

V. STANDARD OF REVIEWA determination of the content of foreign law is a question of law. SeeFed. R. Civ. P.

44.1 (The courts determination [of foreign law] must be treated as a ruling on a question of

law);Iracheta v. Holder, 730 F.3d 419, 423 (5th Cir. 2013) ([t]he content of foreign law is a

question of law and is subject to de novo review.) (quoting Access Telecom, Inc. v. MCI

Telecomms. Corp., 197 F.3d 694, 713 (5th Cir.1999)). This is true even if foreign law does not

provide the decisional law for the claims asserted. SeeFed. R. Civ. P. 44.1;Iracheta, 730 F.3d at7 As discussed in the SECs separate motions to exclude the testimony of Campbell, Sayne and Gilson (filed

contemporaneously herewith), none of their proposed testimony is admissible under the standards set forth in

Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993), and Federal Rule of Evidence 702. None ofthese experts opinions concerning what is permissible or required in Nigeria are grounded in the clear and

undisputed law set forth herein. Indeed, as discussed in the SECs Motion for Partial Summary Judgment, there is

no genuine dispute of material fact concerning the content of Nigerian law and Defendants experts do not purport tooffer any opinions on Nigerian law.



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425-426 (whether plaintiff was legitimated under Mexican law was a question of law in

determining whether plaintiff attained U.S. citizenship under Immigration and Nationality Act);

United States v. McClain,545 F.2d 988, 997-99 (5th Cir. 1977) (whether artifacts were stolen

under Mexican law was a question of law in determining whether defendants violated the

National Stolen Property Act by importing artifacts from Mexico). Accordingly, issues of

Nigerian law must be addressed to and decided by the Court, not the jury. See Liechti v. Roche,

198 F.2d 174, 177 (5th Cir. 1952) (We conclude that it was the judge's function to determine

the state of the foreign law ).8

In determining foreign law, the court may consider any relevant material or source,

including testimony, whether or not submitted by a party or admissible under the Federal Rules

of Evidence. Fed. R. Civ. P. 44.1. The court may also engage in its own research on an issue

of foreign law. McGee v. Arkel Intern.,LLC, 671 F.3d 539, 546 (5th Cir. 2012) (quoting Fed.

R. Civ. P. 44.1 Advisory Comm. Note). The party seeking to apply foreign law has the burden

of proving its substance to a reasonable certainty. Corder v. BBG Comms., Inc.,Civil ActionNo. W-11-CA-00264, 2012 WL 3843714, at *4 (W.D. Tex. July 30, 2012) (citingIn re Avantel,

S.A., 343 F.3d 311, 321-22 (5th Cir. 2003).)

8See also United States v. McClain, 593 F.2d 658, 669 (5th Cir. 1979) (Our pre-Rule cases make clear that the

proper procedure is for the judge rather than the jury to determine questions of foreign law.);Randall v. Arabian

Am. Oil Co., 778 F.2d 1146, 1151 & n.4 (5th Cir. 1985) (observing question of foreign law are reserved for the

court);Linde v. Arab Bank,PLC, 920 F. Supp. 2d 282, 286 (E.D.N.Y. 2011) ([Q]uestions of foreign law are not tobe determined through a proffer of expert testimony given to the jury, rather a determination of foreign law mustbe treated as a ruling on a question of law and not as an issue to be presented to the jury.) (internal citations

omitted);In re Vitamin C Antitrust Litig., 810 F. Supp. 2d 522, 562-62 (E.D.N.Y. 2011) (Because courts are tasked

with determining foreign law as a question of law, courts, rather than juries, should resolve any disputed factsrelevant to interpreting foreign law. A determination of foreign law is, like choice of law analysis, a preliminary

matter to be resolved by the court. Therefore, any disputed facts underlying that determination must also be resolved

by the court.); Fed. R. Civ. P. 44.1 Advisory Comm. Note (It has long been thought [] that the jury is not theappropriate body to determine issues of foreign law.)



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VI. ARGUMENTA. Questions of Nigerian Law Should Be Resolved Before Trial.Questions of Nigerian law are issues of law that must be resolved by the Court, not the

jury. See, e.g.,Liechti, 198 F.2d at 177;McClain, 593 F.2d at 669 (it is for the judge rather than

the jury to determine questions of foreign law.).9 Here, several questions of Nigerian law are

implicated, either directly by the SECs claims or by the expert testimony proffered by Ruehlen.

These issues of foreign law should be resolved before trial for a number of reasons.

First, the SEC may prove a violation of Section 30A of the Exchange Act by (among

other ways) showing the Defendants induced a foreign official to do or omit to do any act in

violation of the lawful duty of such foreign official. 15 U.S.C. 78dd-1(a)(3)(A)(ii). Of course,

what constitutes the lawful duty of NCS officials with respect to the grant of TIPs or TIP

extensions in this case is determined by Nigerian law. For example, as discussed above,

Nigerian law sets forth the permissible duration of TIPs and the number and duration of

discretionary extensions that may be granted. (Ex. A, Olugbesan Aff. 20-25, 27.) Nigerian

law also determines the contours and limits on NCS officials discretion in granting a TIP or TIP

extension. (Id.) Absent a finding by the Court concerning NCS officials lawful duties under

applicable law, the jury cannot determine whether, in approving multiple, serial TIP extensions,

NCS officials violated their lawful duties.10

Similarly, findings of Nigerian law concerning the lawfulness of the acceptance of

payments or bribes by NCS officials and the submission and use of false statements or9See also9 Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure, 2444 (Rule 44.1 sought to

abandon the fact characterization of foreign law and to make the process of determining alien law identical with the

method of ascertaining domestic law to the extent that it is possible to do so.)

10 As discussed in the SECs Motion for Partial Summary Judgment, these issues of law are also necessary to

determine whether the payments at issue payments authorized by the Defendants fit within the narrowfacilitation payment exception of the FCPA, 15 U.S.C. 78dd-1(b). SeeSEC Mot. for Partial Summ. J., Sections

IV-VII.



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documents to obtain TIPs from NCS, are necessary for the jury to determine whether NCS

officials violated their lawful duties in approving TIPs and TIP extensions based on false

paperwork and/or in exchange for large payments. The Courts determination of these predicate

issues of Nigerian law will assist the jury in answering the ultimate question of whether

Defendants conduct influenced or induced foreign officials to breach their lawful duties.

Second, Ruehlens own experts intend to trump Nigerian law with speculation about

allegedly acceptable practices in Nigeria and, contrary to Rule 44.1, put their speculative

opinions before the jury. For example, Campbell intends to testify that bribery is common

and even expected in Nigeria and, despite having no experience whatsoever with customs law

or practices relative to TIPs and TIP extensions, speculates that the submission of false

paperwork to Nigerian governmental agencies was satisfactory from the perspective of all

parties involved, including the Nigerian government. (Ex. B, Campbell Rep. 6, 109.)

Similarly, Campbell and Sayne intend to testify that the permitted duration of TIPs and the

number of extensions allowed are governed by an internal policy of NCS having no force of law,

despite disavowing any knowledge or expertise concerning the lawful duties of NCS officers.

(Ex. B, Campbell Rep. 12; Ex. D, Sayne Rep. 72.) Finally, Gilson intends to testify that the

use of false paperwork is allegedly an acceptable practice in some foreign countries. (Ex. F,

Gilson Dep. at 51, 60-61.)

Issues of foreign law, however, are issues of law for the Court, not issues of fact for the

jury. See, e.g., Fed. R. Civ. P. 44.1; Liechti, 198 F.2d at 177; Linde, 920 F. Supp. 2d at 286

(questions of foreign law are not to be determined through a proffer of expert testimony given

to the jury). Thus, resolving issues of foreign law concerning issuance of TIPs and TIP



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extensions before trial avoids the potential introduction of improper testimony that would likely

confuse and mislead the jury.

For example, Campbell cites only undefined and speculative customary and accepted

practice and norms of informal governance in Nigeria as support for his opinions that bribery

and the submission of false paperwork to government authorities were permissible in Nigeria.

(Ex. B, Campbell Rep. 6, 48, 109.) But the lawful duty of any government official is

determined by reference to the plain language of the statutes and regulations or rules governing

that officials duties. See, e.g., United States v. Gjieli, 717 F.2d 968, 977 (6th Cir. 1983)

(determination of a public officials lawful duties under the federal anti-bribery statute [18

U.S.C. 201] is made by reference to laws and regulations governing the public officials

duties). Testimony regarding alleged practice[s] or norms is thus irrelevant to the question

of whether Defendants induced foreign officials to violate their lawful duties.11

Moreover, such

testimony would confuse the jury as to NCS officials lawful duties with respect to granting TIPs

or mislead the jury into believing, for example, that the practice of bribery somehow excuses

NCS officials from carrying out their lawful duties.12

Thirdly, and relatedly, resolving issues of Nigerian law before trial will significantly

focus and streamline the presentation of evidence to the jury and avoid a mini-trial within the

trial regarding the content of Nigerian law. Absent findings of Nigerian law before trial, no less

11Furthermore, as discussed in the SECs Motion for Partial Summary Judgment, if evidence so-called norms orcommon practices of bribery or corruption in a foreign country could somehow trump applicable foreign law, the

FCPA would be eviscerated wherever there is evidence of rampant bribery. Such a result would be illogical and

defeat the purpose of the FCPA. See United States v. Kay, 359 F.3d 738, 755 (5th Cir. 2004) (Congress wasmotivated to prohibit rampant foreign bribery by domestic business entities.). See also SEC Mot. for PartialSumm. J., Section VII.C.

12Even if practice[s] or norms were somehow relevant here, the alleged practices at issue in this case the useof false paperwork and bribes to obtain serial TIP extensions exceeding 12 months is only the practice because

of bribery. In other words, the Defendants have offered no evidence that the use of false paperwork is an acceptable

practice or norm in the absence of corruption. Indeed, as discussed in this motion, the use of false paperwork tosecure TIPs is expressly prohibited by Nigerian law.



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than four experts (Campbell, Sayne, Gilson, and Kofo Olugbesan) would likely be called to

testify at trial concerning issues directly or indirectly bearing on applicable Nigerian law. Such

would significantly lengthen the trial and, with respect to Defendants experts, risk misleading

the jury as to the significance, if any, of purported opinions about what is permissible in

Nigeria notwithstanding the undisputed applicable law. Thus, resolving issues of Nigerian law

before trial will streamline the presentation of evidence and avoid confusing the jury with

testimony on issues of law that are not for the jury to decide.

B. The SEC Has Proven The Substance of Nigerian Law to a ReasonableCertainty.

As the party seeking a determination of foreign law, the SEC has the burden of proving

the substance of Nigerian law to a reasonable certainty. Corder, 2012 WL 3843714, at *4

(citing In re Avantel, S.A., 343 F.3d at 321-22). Under Rule 44.1, the SEC may satisfy this

burden through expert testimony accompanied by extracts from foreign legal material. Access

Telecom, Inc., 197 F.3d at 713; McGee, 671 F.3d at 547 (observing expert affidavit was

sufficient to prove content of foreign law); Northrop Grumman Ship Sys., Inc. v. Min. of Def. of

the Rep. of Venezuela, 575 F.3d 491, 498 n. 8 (5th Cir. 2009) (foreign law sufficiently proven

where party submitted English translations of relevant statutes and opposing party had not

alleged that the translation was inaccurate or misrepresented foreign law).

Here, in support of its motion for a determination of Nigerian law, the SEC has submitted

an affidavit of Kofo Olugbesan, an expert in Nigerian law and, in particular, Nigerian customs

law. (SeeEx. A, Olugbesan Aff.) For over a decade, Ms. Olugbesan was an officer in the NCS,

rising to the rank of Assistant Comptroller General. Since leaving NCS in 1995, Ms. Olugbesan

has been a licensed customs agent and attorney practicing in Lagos, Nigeria. (Id. 1-7.) In

addition to expert testimony provided in her affidavit, Ms. Olugbesan also attaches to her



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the Board to NCS. (Id. 16.) Simply put, under the law of Nigeria, NCS has discretion to grant

or deny TIPs or TIP extensions. (Id. 15-17, 27.)

2. NCS Cannot Permissibly Grant TIPs Exceeding Twenty-FourMonths.

NCS is bound by the provisions of the TI Code which sets forth the permissible duration

of TIPs and the number of extensions allowed by the Board pursuant to its authority under

CEMA. (Id. 20-25, 27.) The TI Code expressly provides that an importer may apply for an

extension and [i]n the case of Oil rigs, [an] extension is only allowed once. (Id. 25

(emphasis added).) Furthermore, Annex C to the TI Code provides an initial TIP may be

granted for a period of twelve (12) months or less depending on the duration of the Contract and

any TIP must not be renewed more than once and the duration of the renewal must not exceed

twelve months. (Id. 24.) Thus, under the TI Code promulgated by the Board and binding on

NCS, NCS only has discretion to grant an initial TIP for twelve months or less, depending on the

duration of the contract, and such TIP may be extended only once for a period not to exceed

twelve (12) months. (Id. 27.) The total maximum period of a TIP and any extension is

twenty-four (24) months, or the term of the contract, whichever is less.

3. Payments to a NCS Official to Influence the Officials Exercise of Hisor Her Duties is Unlawful.

The Nigerian Corrupt Practices and Other Related Offenses Act expressly prohibits the

payment of money or anything of value to a Nigerian governmental official to induce an act,

omission, favour or disfavour to be done or shown by the public officer. (Id. 31-34.)

Furthermore, under Nigerian law, corrupt intent is presumed whenever a public official receives

anything of value from or is promised anything of value by a person (or his agent) seeking a

permit from a government department in which the public official is serving. (Id. 32.)



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4. Making False Statements to NCS Officials in Connection WithObtaining a TIP or an Extension is Unlawful.

The making of false declarations and the falsification of documents are expressly

prohibited by CEMA. (Id. 28-30.) Specifically, Section 161 of CEMA provides that if any

person makes or signs, or causes to be made or signed, or delivers or causes to be delivered, to

the Board or an officer any document whatsoever which is untrue in any material particular,

he shall be guilty of an offence under this section. (Id. 28.) Thus, pursuant to Section 161 of

CEMA, the submission of documents that are untrue in any material particular is unlawful

under Nigerian law. (Id.)

Similarly, pursuant to Section 162 of CEMA, any person who falsifies any document

which is required by or under the customs and excise laws or which is used for the transaction of

any business relating to customs and excise; or [] knowingly accepts, receives or uses any such

document so counterfeit or falsified documents is liable to a fine of one thousand naira or to

imprisonment for two years, or to both. (Id. 29 (quoting Section 162 of CEMA); see also id.

30 (anyone who is knowingly concerned in any fraudulent evasion or attempt at evasion of any

duty chargeable shall be liable for a fine, imprisonment or both).) Nigerian law thus broadly

prohibits the submission of false information to the Board or NCS or the use false documentation

(e.g., documents falsely indicating goods were exported from the country) for any purpose or

business relating to customs and excise, including obtaining a TIP or an extension. (Id. 28-

30.)

VII. CONCLUSIONFor the foregoing reasons, Plaintiff respectfully requests that the Court issue an order and

findings of Nigerian law in the form attached.



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Dated: March 28, 2014 Respectfully submitted,

/s/ Patrick M. Bryan

PATRICK M. BRYAN

D.C. Bar No. 490177S.D. Tex. ID No. 1572792

ALFRED A. DAY

MA Bar No. 654436

SHARAN K.S. CUSTERD.C. Bar No. 464495

Securities and Exchange Commission

100 F Street, NEWashington, DC 20549-5949

Telephone: (202) 551-4420

Facsimile: (202) 772-9292

Counsel for Plaintiff SEC



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Local Civil Rule 7.1 Certification

Pursuant to Local Civil Rule 7.1, the undersigned hereby certifies that on March 25,

2014, the SEC made a good faith effort to confer with counsel for the Defendants, including

Kristopher Duilio, Daniel Chung, and Martin Hewett for Defendant James Ruehlen and Adam

Miller and Lauren Randall for Defendant Mark Jackson, about the disposition of the instant

motion. However, the parties were unable to reach agreement.

/s/ Patrick M. Bryan

Patrick M. Bryan

CERTIFICATE OF SERVICE

I certify that on March 28, 2014, I electronically filed the foregoing SECS MOTION

FOR A DETERMINATION OF FOREIGN LAW PURSUANT TO FEDERAL RULE OF

CIVIL PROCEDURE 44.1 AND MEMORANDUM OF LAW IN SUPPORT THEREOF with

the Clerk of the Court for the Southern District of Texas, Houston Division, by using the

CM/ECF system, which will send a notice of filing to all CM/ECF participants for this matter.

/s/ Patrick M. BryanPatrick M. Bryan


SEC v. Jackson / Ruehlen (SEC Motion Re: Nigeria Law)

Documents

Transcript of SEC v. Jackson / Ruehlen (SEC Motion Re: Nigeria Law)